TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 1049886-1

JUSTICE ROSS, PRESIDENT
VICE PRESIDENT HATCHER
VICE PRESIDENT CATANZARITI
SENIOR DEPUTY PRESIDENT HARRISON

C2013/5139 & C2013/6333

s.302 - Application for an equal remuneration order by United Voice; Australian Education Union

(C2013/5139)


s.302 - Application for an equal remuneration order by the Independent Education Union of Australia

(C2013/6333)


Sydney

10.06AM, WEDNESDAY, 23 APRIL 2014

Continued from 22/04/2014

PN1266

JUSTICE ROSS: Any changes to the appearances? No? Just before inviting you to start, can we raise a process issue. Yesterday we gave some directions regarding the filing of responses to questions that have been raised and the like. It occurs to us overnight that we should provide a little more time and also provide some elaboration as to what we were seeking.

PN1267

In terms of the elaboration, this is primarily directed at the State of Victoria. You're there, Mr O'Grady?

PN1268

MR O'GRADY: Yes, your Honour.

PN1269

JUSTICE ROSS: It seemed to us that during the course of your oral submissions there was some elaboration and refinement of the position of the State of Victoria in relation to the statutory construction of the provisions of Part 2-7 and in particular the stepped approach that you were outlining.

PN1270

We would be assisted if the State of Victoria was able to reduce those propositions to writing in a short statement that would be filed by 4 pm next Wednesday, 30 April. That time, 4 pm next Wednesday the 30th, is also the time at which the various parties - in particular I think the Commonwealth and the State of New South Wales - were to file responses to some questions and some issues.

PN1271

That's the first relevant date. The second date is 4 pm on Friday, 9 May, so about 10 days later. That is the opportunity for any interested party to respond to the material that's filed on Wednesday the 30th. We'd particularly invite your responses obviously to whatever the Commonwealth and New South Wales say but also to the Victorian position in relation to proper construction of these provisions. We make that observation also to the Commonwealth in relation to those construction points.

PN1272

MS EASTMAN: Thank you, your Honour.

PN1273

JUSTICE ROSS: Out of an abundance of caution, we'll provide a third date, 4 pm Wednesday, 14 May. This is really an opportunity to make any final observations on something that has come in that you haven't anticipated, and there'd be liberty to apply.

PN1274

The directions are structured to make sure no-one is at any disadvantage. You reach a logical point where you want to close off written argument, but I think providing that last date ought to do that. These are important issues and we don't want to forestall any point that any party wants to make, and for that reason there'll be liberty to apply in the event that anyone needs a further opportunity.

PN1275

If, after getting it all, we have further questions, then we wouldn't discount the possibility of reconvening the proceedings for further oral argument. We're not indicating that's foreshadowed or we're going to do that, but at this stage we don't know what the material is going to uncover. Okay? Are there any questions about any of those directions?

PN1276

The transcript from yesterday has been expedited. It should be on the web site, if it's not already, shortly. Mr O'Grady, that can provide a resource for you as well. We'll now start with you, Mr Ward.

PN1277

MR WARD: If the commission pleases, it seems to us that there are two particular areas of disagreement between the unions and the employer parties. The first one relates to the approach to be adopted by this commission to make a finding to establish the jurisdictional fact necessary to exercise its discretion to consider making an equal remuneration order, and that requires a consideration of section 302(5).

PN1278

There is then further controversy, if that jurisdictional fact is established, as to the basis upon which this commission exercises a discretion. In practical terms that controversy between the parties is described as a debate between a comparative approach versus an undervaluation approach.

PN1279

In relation to the second issue, it's largely centred around what has become described as the discounting issue, which is a slightly derisive term. We think it's better articulated in this fashion; that is, if and when the commission removes from its calculus non-gender reasons for pay differences or, perhaps to put it a slightly different way, removes from the calculus reasons not relevant to the value of work performed - and I want to come back to talk a lot about value of work performed this morning.

PN1280

We have a real and legitimate anxiety about the union's case, and we don't put this to try and scare the commission, but that is - - -

PN1281

JUSTICE ROSS: We're already nervous enough, Mr Ward.

PN1282

MR WARD: Yes, it's an anxiety I probably share, your Honour. At its boldest, our anxiety is that the unions' will introduce a new form of relatively unfettered comparative wage justice for female-dominated industries, and we're going to develop that proposition a little bit a this morning.

PN1283

We don't want to deal this morning with our written submissions in any detail. We want to go to the heart of the matter, if we can, and we want to talk firstly about the purpose of Part 2-7. I know his Honour the Vice President (indistinct) I apologise, your Honour, but this might be a case where the (indistinct) isn't put.

PN1284

We want to then spend some reasonable time looking at how we say section 302(5) is properly understood. We're going to turn our mind then to this notion of undervaluation. We feel required to talk a little bit about the role of modern awards. We will, in the context of that, deal with this discounting debate and then lastly we're going to touch on this question about whether or not our approach requires a finding of discrimination and really deal with that. But I'm hoping in the way we deal with those matters we're going to pick up a large proportion of the questions that fell from the bench yesterday.

PN1285

Many provisions in the Fair Work Act are drafted in a manner which means that their purpose and operation is relatively clear and entirely uncontroversial. We have to concede that Part 2-7 doesn't fall into that category. It is, by the way it's constructed, amenable to a variety of readings, and various parties in these proceedings have done their best to emphasise the importance of particular words over others.

PN1286

It's in that context that we think it's important that the commission form a view as to what its purpose is, because ultimately an argument as to its construction that is available, that fits its purpose, is a more desirable construction than one that doesn't.

PN1287

I don't build this in great detail, but we think the purpose of Part 2-7 is relatively clear. If one follows the evolution of this part all the way back to the original pay equity case in 1969, if one looks at the operation of relevant ILO conventions, if one considers the explanatory memorandum, if one looks at the title of the section, if one looks at the language in the section, which we're going to deal with in great detail, in our view it irresistibly leads to the view that the purpose of the section is to cure a situation where men and women workers performing work of equal or comparable value are paid differently because of their gender.

PN1288

I'm going to try and rephrase that into the language of the section, and that is to say this: that male and female employees performing work of equal or comparable value need to be remunerated commensurate with the value of that work irrespective of their gender. We think that that is a perhaps slightly better explanation of its purpose, given the very particular language that operates in the part, but there's no doubt - we don't hide from the view that its purpose is to cure gender-related differences (indistinct)

PN1289

Its purpose, with respect, can't be to simply allow female-dominated industries to move from minimum rates to actual market rates irrespective of why and how those market rates are set. We don't believe that that is a proper understanding of its purpose, and any construction of the part that leads to that conclusion, in our view, should be resisted.

PN1290

That inexplicably leads me to a consideration of section 302(5). It is a slightly unusual provision - and perhaps one might say that section 302(1) is a slightly unusual provision - in that it requires the reader to read into the provision the definition contained in section 302(2) to understand how it operates.

PN1291

If I can take the liberty of reading that definition into the section to then develop what we say the construction should be. Essentially what I mean by that is this: that the words in section 302(5) of "equal remuneration for work of equal or comparable value" have to be substituted with a definition for those words, being "equal remuneration for men and women workers for work of equal or comparable value". I don't think there's any potential argument available that says that definition is not to apply to section 302(5). I don't think that could be said.

PN1292

If one reads those words from the definition into the section, one then has a section which, in our view, has five elements. I'll read it first and then I'll perhaps (indistinct)

PN1293

Read in that way, section 302(5) would be:

PN1294

However, the Fair Work Commission may make the equal remuneration order only if it is satisfied that for the employees for the order will apply there is not equal remuneration for men and women workers for work of equal or comparable value.

PN1295

The first element of that provision is the element dealing with the Fair Work Commission enlivening the discussion only if it's satisfied of what we say must be understood as a jurisdictional fact. The second element relates to the identification of the employees to whom the order will apply. The third element, which we'll actually come to last, is that there is not equal remuneration. There is then a preposition, which is "for". I think that preposition, the word "for" simply should be given its ordinary meaning of "belonging to". That is, "for men and women workers", that fourth element. Then there's a further preposition "for work of equal or comparable value" and that is the fifth element.

PN1296

In our view, what is necessary to establish the jurisdictional fact required to proceed to exercise discretion are these things: (1) in relation to the second element, the employees to whom the order will apply must be identified. That would seem to be relatively uncontroversial.

PN1297

There then is a need, in our submission, for the persons referred to in the fourth element to be identified, and that is, who are the men and women workers? There are two views on that. There's the one we've really relied on in our written submissions, but we must concede there's actually another view available. We had always taken the "men and women workers" to simply mean those persons who were of the opposite gender to the employees to whom the order will apply. We must concede however that the "men and women workers" could be taken to refer to a comparative group of men and women workers.

PN1298

VICE PRESIDENT HATCHER: Can both groups being compared consist of men and women workers?

PN1299

MR WARD: Your Honour, I'm hoping to say no to that, but I think I have to say yes.

PN1300

VICE PRESIDENT HATCHER: That means for example you could compare Indigenous workers to other Australian workers for the purpose of the exercise?

PN1301

MR WARD: I think the focus point here though has to be largely on the gender nature of what is going on.

PN1302

VICE PRESIDENT HATCHER: That's the assumption, but the only reference to gender is the reference to men and women workers.

PN1303

MR WARD: It is, your Honour, but also that if why we say at the very beginning one needs to look at the purpose of this section. We've advanced our submissions on the view that the reference to the group of men and women workers is the opposite gender to those persons covered by the order.

PN1304

JUSTICE ROSS: Can you just put the alternate?

PN1305

MR WARD: In what way, your Honour?

PN1306

JUSTICE ROSS: Well, that you've already put: that you advance your case on the basis that "men and women workers" is referring to the opposite gender to the group to whom the order applies. Can you just expand on the previous observation you made about it could be a mix.

PN1307

MR WARD: On a literal reading - I mean, in some senses we're trying to read it as "men or women". The phrase is "men and women".

PN1308

JUSTICE ROSS: Yes.

PN1309

MR WARD: I don't want to confuse what I'm trying to say at this point more than I have already, but can we return to this a little later?

PN1310

JUSTICE ROSS: That's fine, yes.

PN1311

MR WARD: I think it's important to understand how we characterise what's actually being done. The next part is - and this is the thing the commission must identify. The commission must identify that, whoever those men and women workers are, they are performing work of equal or comparable value to the employees to whom the order will apply.

PN1312

I want to talk at some length about what that last element requires and then I'll come back to the issue of "not equal remuneration". However, in our respectful submission it is absolutely inescapable that what is required here is some form of comparative exercise. You simply cannot place those terms in the order they're placed, in the proper grammatical way they're placed, without seeing this as some form of comparative exercise. You just can't. It's simply not available.

PN1313

What is important about the last element - that is, work of equal or comparable value - is an important consideration. "Value" does not mean the price of labour in the marketplace, in our view. Your Honour Vice President Hatcher said yesterday - I think the phrase your Honour used was "the intrinsic value". The phrase that has been used in a variety of New South Wales cases is "the proper value". I'm not hugely enamoured by the phrase "the true value". I'm not quite sure where that comes from from the unions. But what we think one is looking at there is the value that is properly determined based on industrial principles; that is, work value principles.

PN1314

So what we see as happening to establish the jurisdictional fact to proceed is that there, by force of logic, there must be a comparison and that comparison is effectively a comparative work value assessment between two groups of people. We, with respect, don't see that as a controversial proposition at all.

PN1315

JUSTICE ROSS: Don't you end up with a degree of circularity in that argument? If the modern award minimum rates are properly fixed on work value grounds, then any comparison above those grounds, how can they be said to bear any relationship to work value in that traditional sense? Isn't it just another way of excluding everything that's above the award and saying you can't compare that?

PN1316

MR WARD: We don't want to exclude anything above the award. We don't think you can boldly say you can't look at anything above the award. We have (indistinct) as to why you have to be judicious about what's above the award. When you think about the work that this section is doing, it's doing some very important work. The notion of gender equality is sufficiently important to ensure that if it is alleged to have arisen, it can be dealt with irrespective of the four-year review timetable (indistinct) it's an important piece of work.

PN1317

I'm going to talk at length about the modern awards and what assumptions can be made about them. We don't believe that the modern awards represent a defence in their current form against claims. We've just got some particular views about how well the modern awards have been structured without inherently adopting gender bias, but that's something you will have to - - -

PN1318

VICE PRESIDENT HATCHER: I'm just unclear. The comparison is between two groups who need to be identified as performing work of equal or comparable value.

PN1319

MR WARD: Yes, your Honour.

PN1320

VICE PRESIDENT HATCHER: That question doesn't involve, at that step, any analysis of the remuneration. It simply requires a comparison of the value of the work measured in whatever terms you might consider?

PN1321

MR WARD: Yes, your Honour, that's right.

PN1322

VICE PRESIDENT HATCHER: And that's Victoria's first step?

PN1323

MR WARD: I must confess, with respect, I struggled to follow the conversation yesterday a little bit, but it seems to us that on a proper reading of this section of the Act, that approach is somewhat irresistible.

PN1324

VICE PRESIDENT HATCHER: So that's easily understood, but then Victoria said the second step is you compare remuneration.

PN1325

MR WARD: Yes, we'll come to that.

PN1326

VICE PRESIDENT HATCHER: Right. But you say remuneration is somehow confined for the purpose of a comparison?

PN1327

MR WARD: We do. Can I come to that in a short moment, if I could? The comparative approach that we're proposing is required in our view isn't a particularly novel or controversial approach. If one considers, for instance, the original librarian decision of New South Wales, that effectively seemed to be in large measure a comparison on work value grounds between various persons working in the public sector in related or relevant occupations, in the sense that librarians I think were compared to various professional streams in the public sector. I think geologists was one. There was a comparative work value process going on to ensure that work was objectively valued an that those comparative groups were then appropriately identified as attracting the same value of work. So I don't think it's a particularly controversial notion.

PN1328

VICE PRESIDENT HATCHER: Our context is different, because they were comparing pay rates awards, so there was no question of market rates or anything of that kind.

PN1329

MR WARD: That is true. That brings us then to your Honour's question. We have said in our submissions in the scheme of how we say this works - we have said that it's implicit in that exercise that, because one is looking at the value of work, one should remove - and we perhaps clumsily describe this as non-gender-related issues. I think another way of describing that would be to say one removes from the calculus those matters not relevant to the proper valuation of the work.

PN1330

That's a feature of the New South Wales system. When one looks at comparative awards, the notion of removing elements of pay - the productivity, attraction, retention and the like - is just part of their exercise.

PN1331

We read that into this part of the (indistinct) because we are comparing value and therefore, to the extent that we're determining whether or not remuneration is equal, in our view one needs to look at those elements of remuneration relevant to value rather than things not relevant to value.

PN1332

VICE PRESIDENT HATCHER: How does one get that from the text (indistinct)

PN1333

MR WARD: Your Honour, I'm prepared to concede that's a stretch. If we're wrong on that, we have a view that it must come in - it must come in - as a discretionary consideration. The reason why we say it must come in somewhere is the simple absurdity of the proposition, with respect, if it doesn't come in. Let me give a very, very simple example (indistinct)

PN1334

A lot of focus at the moment has been on this part of the statute operating at an industry level, but in our view the statute needs to be able to operate for an individual applicant. If I can use, just for the purposes of simplistics, an example of an individual applicant. Let us assume that Bob Brown brings a claim saying that he is not paid the same as Jane Smith albeit he is performing work of equal or comparable value. Let's assume for a minute that the evidence demonstrates that they are performing work of equal or comparable value and let's assume for a minute the evidence demonstrates that Jane is paid $20,000 more than Bob.

PN1335

If it's the case that the reason why Jane is paid $20,000 more than Bob is because she is a high performer - she's spent the last three years being given wage increases based on some system because she's been an excellent performer - and Bob by contrast is an unsatisfactory performer, it seems extraordinary to us that there is not some opportunity to remove that from the calculus.

PN1336

VICE PRESIDENT HATCHER: Isn't it moot by the fact that you say they're not performing work of equal value. So the comparison just fails at the outset.

PN1337

MR WARD: That could be one way that does it, yes. We think that would be available. If one didn't do it that way, though, there's got to be a point at which it's got to be removed.

PN1338

SENIOR DEPUTY PRESIDENT HARRISON: So a bonus might be something that - - -

PN1339

MR WARD: Once again we're cautious here. We think there are a number of objective reasons why people are paid differently that do not have anything to do with a proper valuation of the work nor gender. It probably would not surprise this commission that those I act for are keen to ensure that those in some way are accounted for in the process.

PN1340

Absent that, all this provision becomes is an opportunity for certain persons to move from minimum rates to market rates irrespective of the reason for the market rate and, with the utmost respect, a reading of this part that allows that, in our view, just can't stand.

PN1341

VICE PRESIDENT HATCHER: On that example, if the evidence is that the alleged difference in performance between the two individuals has no objective justification and one is receiving a bonus and one isn't, why wouldn't that be something which the commission might conclude is a gender based difference in remuneration?

PN1342

MR WARD: Obviously, your Honour, we'd want to examine why one gets a bonus and one doesn't. For instance, if the bonus was performance based or productivity based, that would be an objective reason. If, on the other hand, somebody got a bonus because they were liked more than somebody else, we're starting to get into a territory where the commission might form the view that there's not an appropriate objective reason and that that probably is, on balance, possibly because of gender.

PN1343

VICE PRESIDENT HATCHER: That means that you can't necessarily exclude bonuses from the remuneration comparison just because they are bonuses.

PN1344

MR WARD: I'm not suggesting you would (indistinct) and I think that's consistent with our view about what remuneration is about.

PN1345

SENIOR DEPUTY PRESIDENT HARRISON: Many bonuses of course are as a result of a team achieving a target.

PN1346

MR WARD: Could be. In industry there tend to be two forms of bonus payments in the private sector. There are those that are based on relatively well-developed KPIs - key performance indicators - and there are those bonuses which are entirely discretionary for which sometimes the motivation and the reasoning is a little bit lost in the mist. Obviously it's a lot easier to argue that one might have an objective basis than the other.

PN1347

VICE PRESIDENT HATCHER: Bringing back memories of section 106.

PN1348

MR WARD: Well, they were good days, your Honour. My friends on the right were very happy with those days, very happy indeed. That is our view as to how section 302(5) operates. We say it's inescapable that it is a form of comparative analysis and we also say that it's implicit in that analysis - or if we're wrong in that, it must be part of the discretionary process that those matters not related to value and not related to gender (indistinct)

PN1349

JUSTICE ROSS: Can I deal with the discretionary process. It doesn't seem to be contested that the power to make the order is in 302(1). That power is qualified by 302(5), which sets out the jurisdictional fact upon which it's to be based.

PN1350

MR WARD: Yes.

PN1351

JUSTICE ROSS: If you go to 302(1), there's this debate that we were having yesterday about the extent of the discretion and opposition being put that there's a discretion to make an order but it is, as it were, an all-or-nothing order. The discretion is whether or not to make the order and the order, if it's to be made, must ensure that for the employees to whom the order will apply there will be equal remuneration for work of equal or comparable value.

PN1352

So when you say it's a factor to be taken into account in the discretion, what stands behind that submission as to your construction of that discretion and its width?

PN1353

MR WARD: This stands behind that, your Honour: in our view, the reference to equal remuneration, based on the preposition for, is inseparable from the proposition of work of equal or comparable value. That is to say that what one is trying to determine is equal remuneration for the value of the work. The value of the work does not include, in our respectful submission, those matters not relevant to the value of the work that might be about simply why somebody pays a certain price for labour in Western Australia.

PN1354

JUSTICE ROSS: Yes, but you've already dealt with that issue in the jurisdictional fact point.

PN1355

MR WARD: We have, but if we're wrong on that, we pick it up again there.

PN1356

VICE PRESIDENT HATCHER: The only problem with that submission is, it's not what the section says.

PN1357

MR WARD: Your Honour, we think it can be read that way and we say that it should be read that way, because absent that one actually ends up with what we've just describe as some potentially very absurd outcomes. It couldn't be contemplated that parliament intended those outcomes to occur.

PN1358

JUSTICE ROSS: Well, it's a large step to restructure a section and insert words that aren't there.

PN1359

MR WARD: Well, my friends wanted to do it with gay abandon yesterday.

PN1360

JUSTICE ROSS: Whoever wants to do it, it's still a large step.

PN1361

MR WARD: It is, your Honour. We can't imagine that the statute would operate. If this was intended to be a statute that simply allowed certain persons to claim market rates irrespective of the reason - the gender or any other reason - this statute would have been written very, very differently, I'm sure.

PN1362

JUSTICE ROSS: We're not legislating; we're interpreting.

PN1363

MR WARD: Your Honour, I'm doing the best to assist.

PN1364

JUSTICE ROSS: I appreciate it.

PN1365

VICE PRESIDENT HATCHER: While we're on subsection (1), it says that there will be equal remuneration for work of equal comparable value. That applies to employees to whom the order will apply. Does that suggest that the two groups being compared are within one subset to which the order applies?

PN1366

MR WARD: Your Honour, you do have to read again the phrase "for men and women for work of equal comparable value" into (1). I'm not sure if I've answered your Honour's question.

PN1367

VICE PRESIDENT HATCHER: Perhaps I'll try to put it more clearly. The group for whom you're ensuring equal remuneration for work of equal comparable value is the group to whom the order will apply.

PN1368

MR WARD: Yes.

PN1369

VICE PRESIDENT HATCHER: That is, to suggest that you've got a group, you're doing an internal comparison within the group, and you ensure within the group there's equal remuneration, and that's the group to which the order applies.

PN1370

MR WARD: I think there's largely a presumption that you're most likely going to pick a comparable group for whom there has been a proper establishment of the value of the work. That might be problematic in the context of the modern award system, which we need to come to. That clearly was the approach adopted in the New South Wales cases; it clearly was. That is to say that the comparative groups were groups where there was no, or largely no, controversy that the value of the work had been properly set.

PN1371

We might make just a few more observations, if we can, about section 302 which we think are important. The first one is that appears to us that it's available for the applicant to be female or the applicant to be male. It's clear to us that there could be, as we said, a single applicant. Any approach the commission takes to its construction of 305 needs to be able to deal with that. We can't see how the notion of undervaluation operates in the proper way in any event, but certainly in the context of an individual applicant. We don't understand how undervaluation works at all. To simply advance an argument that suits one group of applicants but not another, in our view should be resisted.

PN1372

There's also an interesting element to this section of the Act which I think is important. I think it reinforces this notion that it's about gender, and that is that section 302(3) grants a very particular status to the sex discrimination commissioner. That is, the sex discrimination commissioner can actually be an applicant, and we say that very, very clearly reinforces that what we are (indistinct) is a sense of gender inequality in terms of work and remuneration.

PN1373

JUSTICE ROSS: This isn't the only place where the sex discrimination commissioner has standing to bring an application.

PN1374

MR WARD: My understanding, yes, your Honour. I might be wrong in this, but do they have a right in the annual wage process at all? Perhaps I shouldn't have asked the question.

PN1375

SENIOR DEPUTY PRESIDENT HARRISON: I thought they had some rights in relation to modern awards.

PN1376

MR WARD: Yes.

PN1377

JUSTICE ROSS: In relation to, I think (indistinct) of discrimination provisions.

PN1378

MR WARD: But that, in our view, seems to reinforce very strongly the gender nature of what is being done.

PN1379

VICE PRESIDENT HATCHER: Because that's the message that the comparison must therefore be with workers of the opposite gender.

PN1380

MR WARD: That's how we framed our written submissions (indistinct)

PN1381

JUSTICE ROSS: It's requiring quite a bit of work to do from a standing provision, isn't it? I mean, you're taking the proposition as to who can bring the application. You're then elevating that into interpretation of the substantive provision requiring a comparison with the opposite gender.

PN1382

MR WARD: We dealt with how we viewed section 302(5). We just think that reinforces what we say is the broader purpose of the section.

PN1383

JUSTICE ROSS: Right.

PN1384

MR WARD: We don't suggest that one reads all the words (indistinct) because the sex discrimination commissioner can apply but it certainly colours, in our view, what the purpose of this section is.

PN1385

VICE PRESIDENT HATCHER: Does that submission say anything about the gender make-up of the group covered by the application? That is, it must be wholly male or wholly female, or predominantly male or predominantly female?

PN1386

MR WARD: No, your Honour. It's probably logical to accept that there may be persons of both genders in the applicant group. Absent that, one gets into this unusual circuitry process of the first gender go, perhaps succeed, and then the people working with them then say, "That's our comparator group. We now go." I just think that could happen but it seems to us that what's being looked at here is the proper valuation of the work. It might be inherent in that that a minority gender has also not attracted the proper valuation of the work. It might just be efficient to deal with them at the same time, otherwise they simply run a case immediately following this and the predominant group is their comparator group. Then the merry-go-round probably starts.

PN1387

I just want to talk a little bit about the valuation as a concept. I think at its sort of highest and boldest it's put at paragraph 76 of the IEU submission in reply, and it's in these terms, and I read from about line 3 of paragraph (indistinct):

PN1388

Undervaluation occurs when the value of work done by women and employees in female-dominated industry and occupations gives rise to the rates of remuneration below the true value of that work. The comparison is with equal or comparable work, whether it is performed by men or women in the private or public sector within or between enterprises, or within or between industries.

PN1389

The nature of that proposition is somewhat, with respect, a theory. It seems to suggest that what is occurring is that the commission under section 305 simply makes a conclusion that because of certain characteristics of the applicant group, you can essentially conclude that the work they're doing is simply not properly valued. It seems to avoid then answering the question of who the men and women are in 302(5) and it seems to avoid asking the question, how does the commission know that the group is performing work of equal or comparable value to those men or women? In our respectful submission, it just can't operate properly on a reading of section 302(5).

PN1390

It also struggles, as we said, with the idea that it doesn't seem to accommodate the notion of male applicants; it doesn't seem to accommodate the notion of individual applicants. I think the idea of the true value is a sort of daunting, almost, as we said, theory or proposition. If you take it at its highest as well, what it's essentially saying, as we've already submitted, is that you identify the female-dominated industries with certain characteristics, and there's an almost presumed fact that they're not properly valued; irrespective of why some persons doing that work are paid differently, you simply give them that rate of pay. As we've submitted, that seems quite boldly to suggest that it's a new form of comparative wage justice.

PN1391

VICE PRESIDENT CATANZARITI: So, Mr Ward, you didn't distinguish between the individual case where you've got, say, two lawyers in the same law firm, using an example, a male and a female, and (indistinct) legal profession suggests that there may be a bias towards the wages in that centre, where somebody can say, "Well, my comparator is pretty straightforward. Sally Smith does the same hours as me. Bill Smith is paid more," and that will be caught pretty easily by this section, to what we have before us in this case, which is the class, and you're concerned that the class as such, the mere fact that it is dominated by a female industry creates a different sort of problem. Isn't it the same test?

PN1392

MR WARD: I think it is the same. I think what I am saying, your Honour, is that the way we've approached it is placed quite comfortably between those different approaches. The undervaluation approach really only suits one form of case; it doesn't really suit another form of case. There's no doubt that the more complex the proposition the more complex the case.

PN1393

I don't see what is controversial about that. If it's Bob being compared with Jane or Jane being compared with Bob, one would presume that what's involved in the inquiry is going to be considerably more contained. If it's a proposition which, by way of example, simply said that child care workers under the Child Care Award perform work of equal or comparable value to men under the Manufacturing Award and they're not paid appropriately, that is simply by its nature going to be a more complex case. There's no doubt about that.

PN1394

I don't think we should be looking to find - because of complexity, we shouldn't be moving to adopt the unions' view, which says, "Give us an easy way to do it," when that easy way doesn't, with respect, arise from the language of the statute. If the statute had intended to talk about undervaluation and the like, it would have said so. It doesn't use that phraseology at all, not at all.

PN1395

I think what they want is, they want that because if you adopt undervaluation you get past establishing the jurisdictional fact with almost great ease, and I think Mr Taylor, with respect to him, said yesterday that he would like to say that it's simply enough to show that it's a female-dominated industry. I think he went on to concede that one might have to show some more characteristics, but he did actually say that would be enough. They just simply want to get through that jurisdictional fact-finding with the greatest ease possible, that in our respectful submission is not available on the language of the Act.

PN1396

I feel compelled to say something more about modern awards. There's no doubt that modern awards and the operation of those awards is not a de facto defence against a claim, and in fact the operation of the modern awards probably needs to be given some thought.

PN1397

We have submitted that in 2010 the industrial clock was effectively reset by the making of the modern awards. When one looks at the ministerial reference that gave rise to those modern awards, it was an element of that ministerial reference that the commission was required to give consideration to essentially what are described as equal remuneration principles.

PN1398

When the commission reviewed those modern awards in the 2012 transitional review, one element of consideration of the modern awards objective again was a consideration of those principles. We're not aware of anybody advancing a case that those principles had not been met in the 2012 review. It's possible that nobody thought of it. It's possible the commission didn't think of it.

PN1399

JUSTICE ROSS: It's really the language, "those principles were met". The principles didn't require the commission and they don't require the commission now to ensure that there's equal remuneration for work of equal or comparable value. It's a consideration to which the commission is required to have regard, and that seems to me to be the fundamental difference between the modern award process and Part 2-7. It can't be assumed that all the modern awards ensure that there will be equal remuneration for work of equal or comparable value, because that wasn't what the commission was asked to do.

PN1400

MR WARD: No, your Honour. We couldn't say that you can assume they're all fine. We can't say that. I'd like to say it, but we can't say it. The commission at various times has turned its mind, one would assume, to this issue in the making and reviewing of the awards, but the commission has not been, in a statutory sense, required to ensure that that has occurred. We must concede that.

PN1401

Having said that, though, an examination of the modern awards will largely identify, in our submission, certain features. Those are that most classifications are built around the Australian Qualifications Framework. I don't think it's contended that that framework is polluted by any gender bias. I've never heard that. But once again, on a cursory review of modern awards one would see that there is an interesting level of alignment in rates that are associated with classifications built around the Australian Qualifications Framework; that is to say that a person who attracts a certificate III in child care, on our view of it, is paid the same rate as a person who attracts a certificate III in manufacturing work, and whether or not it's by design or good fortune, there does seem to be a fairly large level of consistency between those awards. We simply identify that to say that there shouldn't be a presumption that they're wrong, not to say that we can draw a presumption that they're right.

PN1402

It's also important to understand in any claim that's brought before this commission as to whether or not there's an allegation that the award is wrong and that it needs curing, rather than to simply operate with a claim that asserts that the actual rate is simply wrong; that is to say that as we see it, we think it's important to understand whether or not it's asserted that the problem is in the award or outside the award. We think that's a very important inquiry.

PN1403

It's interesting that in the SACS case they turned their mind to that inquiry and, with respect, it was left relatively poorly answered. I don't propose to hand this up, but in SACS 1 at para 261, the commission said:

PN1404

We deal first with the applicants' submission that the minimum wages in the modern award do not properly reflect the value of the work. Given the basis on which minimum rates are fixed, it is not possible to demonstrate that modern award wages are too low in work value terms by pointing to higher rates in enterprise agreements, or in awards which clearly do not prescribe minimum rates. In order to succeed in their submission it would be necessary for the applicants to deal with work value and relativity issues relating to the classification structure in the modern award and potentially to structures and rates in other modern awards. No real attempt has been made to deal with those important issues.

PN1405

We just say that those are important issues that, in the context of a claim for persons covered by awards, need to be the subject of some consideration.

PN1406

JUSTICE ROSS: Yes, but the order is directed to remuneration.

PN1407

MR WARD: I accept that, your Honour.

PN1408

JUSTICE ROSS: I wonder about that. If you look at 302(1), the commission may make any order. What's, I wonder, the scope of that? Would that include an order varying a modern award?

PN1409

MR WARD: Your Honour, can I take that question on notice?

PN1410

JUSTICE ROSS: Sure. I'm starting to regret asking some of these questions.

PN1411

MR WARD: I think it's an important question. We've written it down. I think I should take that on notice.

PN1412

JUSTICE ROSS: No, that's fine.

PN1413

MR WARD: I'm inclined to want to answer it straightaway, but I think I should consider it. I'll take that on notice, your Honour.

PN1414

JUSTICE ROSS: I should say, any issues that arise with any particular advocate any other party should feel free to take the opportunity to comment on in accordance with the directions that have been issued.

PN1415

MR WARD: I'll deal with that if I can later. I think that really deals, as I've said, with how we view section 302(5). It deals with if and when what is described as the discounting approach comes in.

PN1416

Probably lastly the question for us is the allegation that we're asking the commission to make a finding that there's some discrimination. We've not in any part of our submission said that the commission needs to find discrimination. We consistently articulated the view that it's available and proper to remove from the calculus those matters not associated with the proper value of the work being compared and those matters that are objectively not related to gender. That does not in any sense require a finding like or akin to discrimination, not in any sense.

PN1417

VICE PRESIDENT HATCHER: So what is the nature of the finding required then?

PN1418

MR WARD: In terms of 302(5), it's the identification of two groups of persons. It's the identification of those persons performing work of equal or comparable value.

PN1419

VICE PRESIDENT HATCHER: So, on that analysis, once you've got - on the individual case, for example, a female applicant (indistinct) male worker; established they've got equal value of work; difference in remuneration. That's the test satisfied?

PN1420

MR WARD: Well, subject to whether or not the commission adopt our view that one reads into that test the need to remove from the calculus those things not associated with the proper value of the work. If you're against us on that, then that would satisfy the test and then we would say that that part of the calculus comes into the discretion.

PN1421

If the commission pleases, subject to any further questions, those are our submissions.

PN1422

JUSTICE ROSS: Can I ask you a question about the adequate alternative remedy, Mr Ward.

PN1423

MR WARD: Yes, your Honour.

PN1424

JUSTICE ROSS: If you go to para 137 of your written submission - - -

PN1425

MR WARD: It immediately invokes anxiety about having written it so long ago. Sorry, which paragraph, your Honour?

PN1426

JUSTICE ROSS: 137.

PN1427

MR WARD: Yes.

PN1428

JUSTICE ROSS: This goes to section 721 subsection (1):

PN1429

The commission must not deal with an application for an equal remuneration order if it is satisfied there is available to the employees to whom the order will apply an adequate alternative remedy.

PN1430

I just want to explore what's put at 137. I'd not read that proposition as suggesting that we have to positively satisfy ourselves that there is no adequate alternative remedy before we can consider an application, but I want to make sure I'm not mistaken about that.

PN1431

I had rather taken it to be that, if someone puts the proposition that there is an adequate alternative remedy, then we have to deal with that proposition and satisfy ourselves that there is no adequate alternative remedy available. So it's not an inquisitorial requirement that we have to do it of our own motion but someone has to make the assertion.

PN1432

MR WARD: Your Honour, we agree with that proposition. It's not an inquisitorial process. There seems to some extent to be a sort of horse and cart question about adequate remedy; that is, it's difficult to discuss whether or not one exists until one understands what one is trying to remedy.

PN1433

JUSTICE ROSS: You do, yes.

PN1434

MR WARD: Yes.

PN1435

JUSTICE ROSS: Look, if it was intended to operate as almost a jurisdictional fact point, then you would have expected to have seen it put more directly and framed differently. But it does seem that until the claim is articulated - I don't think there's a temporal restriction on 721 - that is, it seems to be a point that can be agitated by any party at any time - and on its face that makes sense, because often in cases the nature of claims might modify during the course of a proceeding.

PN1436

But, as I understand what you're putting, it's really if someone agitates the proposition that in the particular case the tribunal is dealing with there is an adequate alternative remedy, then we're required to deal with that submission - - -

PN1437

MR WARD: Yes, your Honour.

PN1438

JUSTICE ROSS: - - - and satisfy ourselves that there is no adequate alternative remedy before we continue to deal with the application.

PN1439

MR WARD: Yes. I know that some of those in my constituency of those I'm representing - - -

PN1440

JUSTICE ROSS: They frame it differently, yes.

PN1441

MR WARD: They also might want to have a shot at it earlier than later, but it does seem to us that primarily one needs to understand what is going to be cured before one can understand whether or not it can be cured somewhere else. So it seems difficult to advance the view that you could allege an adequate alternative in the abstract without actually understanding what is to be cured.

PN1442

JUSTICE ROSS: I mean, there's a suggestion in some submissions that it's for the applicants to affirmatively demonstrate there is no adequate alternative remedy, but - - -

PN1443

MR WARD: We haven't gone that far, I don't think.

PN1444

JUSTICE ROSS: No. No, you haven't.

PN1445

VICE PRESIDENT HATCHER: There's a follow-up in that that equal remuneration orders not confined to setting rates of pay. For example, on the bonus scheme example we were talking about earlier it might be an order varying the terms of a bonus scheme to make it work in a fashion which fairly reflects work value and productivity.

PN1446

MR WARD: Your Honour, can I take that question on notice. I apologise, your Honour. I wouldn't (indistinct) Obviously the commission has a fairly broad scope in terms of the nature of the orders it makes, but I'd rather give that some proper thought, if I can, if the commission pleases.

PN1447

JUSTICE ROSS: I might just get you to announce your appearance, Mr Ferguson.

PN1448

MR FERGUSON: Yes. My name is Ferguson, initial B. I appear on behalf of the Australian Industry Group.

PN1449

JUSTICE ROSS: Yes.

PN1450

MR FERGUSON: The Australian Industry Group has filed two sets of written submissions. We intend to rely on that, and I don't intend to expand upon that today in any detailed way, although I do want to clarify one issue, which is our position in relation to that initial question about the appropriateness of the commission setting guideline principles.

PN1451

We think that the draft working document released by the commission perhaps overstates our level of support for that or overstates our intent in that regard. To clarify, Ai Group isn't advocating or arguing that there should be guideline principles developed, although we do accept that that is a power that the commission has. In that light and out of concern that the commission should not develop inappropriate principles, we put forward some elements which we say would form part of an appropriate principle - - -

PN1452

JUSTICE ROSS: I take your submission to be that there was no opposition to appropriate guidelines and an appropriate guideline was one that conformed with your submission.

PN1453

MR FERGUSON: Well, our submission is that if they are to be developed they should be appropriate and ones that would be appropriate would be - - -

PN1454

JUSTICE ROSS: I think everyone would agree they should be appropriate. I knew we'd get to a consensus position eventually.

PN1455

MR FERGUSON: Yes, I don't think I'll take that further. Look, beyond that, the only point I wanted to elaborate on today was if the questions that fell from your Honour the President in relation to the relevance - or, I suppose, broader provisions of the Act, section 134, in relation to the operation of Part 2-7 of the Act. That's something we've already canvassed, to a certain extent, in our submissions.

PN1456

JUSTICE ROSS: So it also forms part of the key aspects to which you say any principles should apply.

PN1457

MR FERGUSON: Yes.

PN1458

JUSTICE ROSS: And you say that any order should be consistent with the modern award objective and minimum wages objective.

PN1459

MR FERGUSON: Yes.

PN1460

JUSTICE ROSS: I just want to tease that out. We're dealing with a statute that makes it very clear that the modern award objective and the minimum wages objective don't have ambulatory effect. They're not objects of the Act. They apply when the tribunal is exercising modern award powers in the context of 134.

PN1461

MR FERGUSON: Yes.

PN1462

JUSTICE ROSS: Doesn't that rather bring with it the implication that they're not intended to apply for the exercise of other powers, including those under Part 2-7?

PN1463

MR FERGUSON: We don't think that does bring the implication that they're not relevant to the - - -

PN1464

JUSTICE ROSS: I'm not sure it's implication. I think that's what the language of the Act says.

PN1465

MR FERGUSON: Let me develop why we say that is relevant.

PN1466

JUSTICE ROSS: Yes, okay.

PN1467

MR FERGUSON: We have to an extent dealt with this in our submissions. I don't wish to demur from what we've put there, but in essence we say that the provisions are relevant in three ways. Firstly, we say that the operation of section 134 underpins that part of our contention which says that it should be assumed - or presumed, rather - that the awards represent a fair and relevant safety net and are consistent with the remuneration principle. Given the 2012 review, or as part of the 2012 review, the commission is required to have regard to the equal remuneration principle and, as the award has already said, is relevant to the ARC.

PN1468

JUSTICE ROSS: I think again you frame it as there should be an assumption that the awards are consistent with the equal remuneration principle.

PN1469

MR FERGUSON: Yes.

PN1470

JUSTICE ROSS: I'm not sure you can take it any further than there should be an assumption that in creating and varying modern awards, the commission has had regard to the equal remuneration principle, because that's the extent of its statutory (indistinct) it's a difference between "having regard to" and "consistent" that I'm just not - and there's the slide between the language that I don't see how the statute carries you the distance.

PN1471

MR FERGUSON: I think we would accept that there could be capacity when applying the terms of 134 that the tribunal came to a view that a fair and relevant safety net didn't provide for equal remuneration. We don't say it's more than a presumption.

PN1472

JUSTICE ROSS: To give you an example, it's a bit like needs of the low paid is one consideration. Well, if you were to adopt your argument, then the corollary to that would be the minimum rates and award meet the needs of the low paid. I'm not sure low-paid workers would necessarily agree with that proposition. There are a range of considerations. Similarly, those that deal with regulatory burden - small, medium business et cetera - I'm not sure those constituents would say that all of their needs and requirements had been met either. So it is in relation to equal remuneration. It's a factor that's been taken into account. I'm not sure you can then slide across and say it's been fully implemented. That's the bit that I'm having difficulty with.

PN1473

MR FERGUSON: I think we would accept that it's a balancing act when having regard to that. I think the idea that we wouldn't lightly accept that in setting fair and relevant (indistinct) terms and conditions the commission hasn't provided for provisions which deliver pay equity.

PN1474

JUSTICE ROSS: For the same reasons I'm not suggesting you can reach the contrary conclusion just because you can't reach the affirmative one. All I'm saying is that it appears that from the statute the most one can say is that, in making modern awards, the commission has carried out its statutory duty. That is, it has had regard to those factors, including equal remuneration, in making those awards. Look, to some extent it might be an arid debate because, whatever one might say about modern awards, if you've got a claim for an equal remuneration order that doesn't seek to agitate anything about any modern award, you're still stuck with Part 2-7. The modern awards may have nothing to do with that particular claim.

PN1475

MR FERGUSON: That's right. I don't take (indistinct) to what you say. It underpins our argument re presumption. We don't say it's not a rebuttal presumption. It forms part of our - - -

PN1476

JUSTICE ROSS: Do you want to develop the argument as to why you say the modern awards objective - that any order that's made by the commission is constrained in some way by the modern awards objective?

PN1477

MR FERGUSON: That's what I'll come to. The way we say that arises is in the application of what can be broadly described as the commission's discretion under section 302. We say that in exercising that discretion - - -

PN1478

JUSTICE ROSS: Is this 302(1)?

PN1479

MR FERGUSON: Yes, your Honour. We say that in exercising that discretion the commission should be guided by, among other things, considerations of the desirability to maintain and evolve the awards and minimum wage orders as constituting a safety net. As a consequence, the considerations arising out of that section 134 and 284 minimum wages objective are relevant. In support of that, we note that the full bench in the 2011 SACS decision indicated - I think it was paragraph 229 - that in effect, in exercising that discretion, considerations related to the safety net are apt to be taken into account.

PN1480

JUSTICE ROSS: I think they referred to it as indirectly related, whatever that means.

PN1481

MR FERGUSON: We would accept that section 134 by its own force doesn't have direct application to the operation of Part 2-7.

PN1482

SENIOR DEPUTY PRESIDENT HARRISON: I don't think that's right. I think it clearly applies to Part 2-7 but it seems to me it applies to Part 2-7 when, in the context of Part 2-7, you're dealing with modern awards. That might very much relate to the manner in which the relief is framed. That's an extraordinary result but it might be the result that an application of when those objectives do or do not apply might be the correct application to a Part 2-7.

PN1483

MR FERGUSON: It may be, your Honour. I think that's where probably - - -

PN1484

JUSTICE ROSS: That may go to the question I put to Mr Ward about "any order".

PN1485

MR FERGUSON: I think that's right and if that's something that we probably haven't fully considered in our submissions, I'd like to take instructions on that.

PN1486

JUSTICE ROSS: Can I just tease out there, when you say "take into account the exercise of the discretion", what's Ai Group's position on this all-or-nothing (indistinct) nature of the discretion? That is, that it's put that if the commission is going to make an order, it must be an order to ensure that there will be equal remuneration for work of equal or comparable value for the employees to whom the order will apply. You can make that sort of order directed at ensuring that outcome. The discretion arises for whether you make that order at all. Do you agree with that proposition, and are you saying that in deciding whether - if you do - to make that order at all, one has regard to the matters you've been raising?

PN1487

MR FERGUSON: We would say in deciding whether you do make an order at all, you do have regard to the matters that we've been raising in terms of the operation of the safety net and not undermining the operation of the safety net and its role. I suppose the broader point that's been developed around what is the capacity to have discretion to vary an order, that's something that we probably fully hadn't developed in our submissions. I may need to take further instructions.

PN1488

JUSTICE ROSS: Yes, that's fine.

PN1489

MR FERGUSON: And I intend to do so, so we can come back to that matter too. In terms of how, I suppose, we say section 134 is relevant in terms of the framework of the Act, we say firstly that in exercising its discretion under 302, it's relevant and appropriate for the commission to have regard to the broader framework of the Act and to seek to not undermine the operation of other (indistinct) of the Act. More squarely perhaps, we note that section 578A dictates that in performing its functions or exercising powers, the commission must take into account the objects of the Act.

PN1490

If we go to section 3, the objects of the Act, that of course provides that the object of the Act is to be achieved by ensuring a guaranteed safety net through the National Employment Standards and, importantly, the modern awards and the national minimum wages orders.

PN1491

JUSTICE ROSS: You don't suggest that equal remuneration orders are not part of the safety net for that purpose?

PN1492

MR FERGUSON: Well, I don't think they are part of the safety net for that purpose, your Honour. Accordingly, we contend that the commission shouldn't exercise its powers under Part 2-7 in a way that would undermine that role of the award as providing a fair and relevant safety net. Accordingly, we contend that equal remuneration orders shouldn't generally be used as a vehicle for delivering wage increases to industries or occupations covered by the modern awards in a broad sense.

PN1493

JUSTICE ROSS: I'm not sure I follow that submission.

PN1494

MR FERGUSON: I think our view is that it's a matter to be weighed up in the exercise of discretion but, broadly speaking, these are issues that should be dealt with through the award system and there is scope in the award system - - -

PN1495

JUSTICE ROSS: Does that mean if you're covered by a modern award you shouldn't get an equal remuneration order?

PN1496

MR FERGUSON: An application seeking to alter remuneration for a class that's dealt with by an award, for example, that should be dealt with through the award system rather than Part 2-7.

PN1497

JUSTICE ROSS: I'm sorry, can you just repeat that?

PN1498

MR FERGUSON: If an application in relation to Part 2-7 is seeking to deal with an industry or classes dealt with by an award rather than, for example, a group below the industry level, then we would say that that should be potentially left to the award system to address that situation.

PN1499

JUSTICE ROSS: So on that submission there should be no capacity to seek an equal remuneration order for an industry or a sector?

PN1500

MR FERGUSON: I think we were cautious about going so far as to say that would be the case in all instances, because the discretion would have to be exercised on a case-by-case basis, but generally our view is that the discretion should be exercised in a way that leads those sorts of issues to be dealt with by the awards.

PN1501

JUSTICE ROSS: How does that sit with 306, which seems to contemplate that there will be a similar field of operation?

PN1502

MR FERGUSON: I think that it contemplates that an order under Part 2-7 might override an award. I don't know that it contemplates that it necessarily be utilised to deliver increases across an entire industry.

PN1503

JUSTICE ROSS: When you're in the language of the sections in Part 2-7 do you derive support for the proposition that you've put about we shouldn't make an order applying to an industry which is regulated by a modern award?

PN1504

MR FERGUSON: We say it arises from the fact that the commission has a discretion under section 302(1) and that that discretion should be exercised to further the objects of the Act and, as I've said, we say that the objects of the Act dictate effectively they will be achieved through the role of the awards and the minimum - - -

PN1505

JUSTICE ROSS: But the Act - why stop at industry? What's special about an industry or sector, on that proposition?

PN1506

MR FERGUSON: It would be industries or occupations covered by awards.

PN1507

JUSTICE ROSS: Then if it's industries or occupations covered by awards, there's a proposition that the commission should not exercise its discretion under 302(1) to make an equal remuneration order in respect of industries or occupations covered by modern awards.

PN1508

MR FERGUSON: But we didn't want to be conclusive, because we think it depends probably on the applications that are before it. We're just saying that that is a consideration to bear in mind in exercising the discretion.

PN1509

JUSTICE ROSS: It would significantly reduce the scope of Part 2-7, wouldn't it?

PN1510

MR FERGUSON: I think it would, your Honour.

PN1511

JUSTICE ROSS: Because almost everyone is covered by a modern award.

PN1512

MR FERGUSON: Yes, it would, but I think it would be covered by the application - - -

PN1513

JUSTICE ROSS: It seems - - -

PN1514

MR FERGUSON: What we were trying to do is mount an argument that this shouldn't be used as a vehicle to deliver increases across a whole industry when the award already provides that capacity and the relevant consideration is the equal remuneration provision.

PN1515

JUSTICE ROSS: Yes, but if coverage by a modern award is a factor which on your submission should lead us to exercise our discretion not to make an order despite the finding of jurisdictional fact, why would you need 306, because on your submission you'd never make an equal remuneration order?

PN1516

MR FERGUSON: What we are trying to do - and I'm perhaps being too broad - is say that the role of these provisions of Part 2-4 shouldn't be utilised to supplement the role of the awards in setting industry-wide rates of remuneration. They can still be utilised to deliver remedies to groups below the industry level to sort it out at the individual employee level, but - - -

PN1517

JUSTICE ROSS: At the occupational level?

PN1518

MR FERGUSON: Although the commission should be mindful of leaving that as a role for the awards to address. The only other issue we say that section 134 is potentially relevant to is the issue of possible alternate remedy. We don't want to be definitive about when there may be alternate remedies because we think that will be covered by the nature of the application brought, but it's our view there may be circumstances where a variation to the modern award, either through section 158 or section 156, the operation of the four-year review, could deliver an alternate remedy. In that sense we'd say that considerations in relation to section 134 would be relevant. I don't propose to deal with anything further today.

PN1519

JUSTICE ROSS: Thank you, Mr Ferguson. Mr Forster.

PN1520

MR FORSTER: Your Honours, for the benefit of those in Victoria, my name is Forster. I appear for the Australian Federation of Employers and Industries. AFEI filed two written submissions in the matter. We intend to rely on those submissions today. I also intend to adopt some of the submissions that have already been put to the commission by Mr Ward. Certainly I won't be traversing all the territory he covered. What I intend to do primarily is to address some questions that were put to AFEI in the draft working document that was distributed on 16 April. Perhaps this is a hopeful submission: that by having three specific questions put to me, I can assume they are the extent of the questions to be put to me, but I am ready for whatever comes my way, your Honours.

PN1521

JUSTICE ROSS: I think we've canvassed the range of issues that in your submission arises in the context of others.

PN1522

MR FORSTER: Sure.

PN1523

JUSTICE ROSS: To the extent that similar issues arise, we've set down directions for filing material and you should take advantage of that process.

PN1524

MR FORSTER: Yes. Thank you, your Honour. Your Honour, the first question that was put to AFEI as contained at paragraph 28 beginning on page 11 of the draft working document, the question calls for AFEI to respond to a proposition by ABL that sections 577 and 578 of the Act provide the commission broad discretion in respect to how it performs its functions, including the power to set principles.

PN1525

Again, I reiterate that there is general consensus for AFEI with ABL to the extent that they put a number of things we agree with today about proper construction of Part 2-7, but we must say this is a provision that we disagree with. It's our submission that sections 577 and 578 do not give the commission powers; rather, they impose certain obligations on the exercise of powers elsewhere derived. We think this is clearly demonstrated by the introductory words to both of those provisions. If one looks to section 577 - and, your Honours, this is helpfully extracted where the question is posed to us.

PN1526

The introductory words to section 577 is "The Fair Work Act must perform its functions and exercise its powers in a manner that" and it goes on, and then at section 578 it says "In performing functions or exercising powers, in relation to a matter, under a part of this Act the FWC must take into account".

PN1527

We say that it's clear by those introductory words that the function or power referred to is contained elsewhere. There is a convenient list of when the commission is required to exercise powers in section 576 of the Act, one of those being Part 2-7. In this case, of course, the exercise of the power or the function of the commission is located at section 302(1) of the Act, and that's conveniently located under the heading Power to Make an Equal Remuneration Order.

PN1528

It's our submission that, yes, when the commission exercises its powers, as it is doing so now, to hear and determine those types of applications it is required to act in a way as governed by 577 and 578, but that in and of itself doesn't provide it powers to act in a particular way that ought be derived elsewhere.

PN1529

Perhaps the next thing that might be put to AFEI then is that section 590 of the Act might be a provision that gives the commission that power. That is of course the provision that allows the commission, in effect, to be the master of its own procedure. We accept that. It's our submission, however, once again that this is not the proper location from which to derive a power to create an equal remuneration principle binding or not. That provision is concerned with the procedures adopted by the commission to inform itself in a matter that is before it, including matters that it might initiate itself. There are various parts of the Act that allow it to do so.

PN1530

We accept that there are some submissions about the utility to be derived for the commission in the adoption of principles and the efficiency with which those matters could be disposed of, although that in and of itself remains a question that is unanswered, in our view. More broadly, though, the question about the utility of principles in this case is put in that it will guide litigants in future equal remuneration matters and it will also aid in coherency, and the principles that have been proffered so far, in our submission, go much further than occupying the ground between uncertainty and prescription, to the adopt the phrase used in the Equal Remuneration Report. As a matter of fact, they go so far as to dictate what the commission can and cannot look to.

PN1531

So in the circumstances we would see that once more 590 is not the place from which to derive that power - - -

PN1532

JUSTICE ROSS: I can see that there's certainly a broad scope in the debate about, if there are to be principles, what should they be or guidelines.

PN1533

MR FORSTER: Yes.

PN1534

JUSTICE ROSS: You mentioned "whether binding or not". I don't think anyone is putting the proposition that they be binding in any sort of capacity to fetter the discretion of a subsequent full bench.

PN1535

Your submission makes the point that there's no express power to issue principles or guidelines.

PN1536

MR FORSTER: Yes.

PN1537

JUSTICE ROSS: Equal pay principles were set down in the 1972 equal pay case. Where was the express power to do that? That might be something that you'll want to take on notice and, if you do, I'd also ask you to look at the Phonogram Officers case - - -

PN1538

MR FORSTER: Yes, your Honour.

PN1539

JUSTICE ROSS: - - - where the High Court considered the commission's power to issue principles.

PN1540

MR FORSTER: Yes.

PN1541

JUSTICE ROSS: I'd be interested as to what you say about those two propositions.

PN1542

MR FORSTER: Yes. I thank you for the opportunity to take that on notice and I'll certainly give a view about those two - - -

PN1543

VICE PRESIDENT HATCHER: Did you bring your Conciliation and Arbitration Act with you?

PN1544

MR FORSTER: I mean, it's hard when you - I didn't even work under the Workplace Relations Act. But I thank you for the third question, a trip down memory lane.

PN1545

MR FERGUSON: I'll lend you a copy.

PN1546

MR FORSTER: Thank you. That might be a convenient time to address the second question that was posed of AFEI, and it simply follows at page 12 of the draft working document. I'll quickly read out the introductory words:

PN1547

AFEI relies on the express provisions in the Industrial Relations Act 1996 New South Wales section 51 subsection (1) and in the Industrial Relations Act 1999 Queensland section 288 as providing the legislative basis for the development of equal remuneration principles in those states. The following questions are put to AFEI on whether or not there was an equivalent provision in the Tasmanian Act concerning the specific development of stand-alone principles. The answer is no.

PN1548

I have had the opportunity to look at the decision in Tasmania that led to the adoption of an equal remuneration principle. I think it's important to point out that that principle was not adopted as a stand-alone principle. It was, as was the case in New South Wales, adopted to be a specific provision within the state wage-fixing principles. The power to set state wage-fixing principles was dealt with conveniently in the same decision that that principle was adopted. I'd be happy to provide a copy of that decision to your Honour's chambers at the cessation of today's proceedings.

PN1549

The point that they make there - and this is at page 5 - is that the statutory basis of the wage-fixing principles is derived from two different sections in the Industrial Relations Act 1984. In the first place, section 36(2)(c) of the Act clearly provides the statutory underpinning for the contention that such principles are, in part at least, an expression of the public interest and, second, section 35(1)(d) empowers a full bench of the commission to make an award making provision for or altering rates of wages generally or in the manner in which rates of wages generally are to be ascertained.

PN1550

There are a couple of important points to pick up in that. The first is that they derive the power from a specific public interest criterion relevant to setting award wages, something that perhaps is not of relevance now within the Fair Work Act's context, and the second point is that it was concerned with their capacity to make awards dealing with how wages were set generally as opposed to in specific examples.

PN1551

Importantly - and perhaps this strengthens are argument about section 590 - the Tasmanian commission did not rely on their capacity as masters of their own procedure to enact the provision. They granted the power in something else. That is something we say is different in this case.

PN1552

If I could deal with the third question, "For many years the legislative predecessors to the commission set wage-fixing principles. What was the legislative basis for those principles?" The first occasion on which the conciliation and arbitration set wage-fixing principles was in the April 1975 national wage case, and that's located at volume 167 of the Commonwealth Arbitration Reports at 18. They were subsequently reviewed in 1978, at volume 211 of the Commonwealth Arbitration Reports at 260.

PN1553

I haven't read every single national wage case following from that, nor every review of the principles. However, I can say, going back to that first occasion that they were adopted, there wasn't a discussion of the legislative basis, at least to my reading, underpinning the adoption of those principles.

PN1554

There is what I think is a very convenient summary of the development of national wage-fixing principles up and to that point in the 1993 review of wage-fixing principles, and this is another document I'd be happy to make available to be put on the web site. It's, as I said, a matter from 1993 and the print number is K9700.

PN1555

In that case a number of points are made clear about the adoption of wage-fixing principles. The first is that the adoption was concerned with reasons of public interest in the prevention and settlement of industrial disputes, and they were first adopted in 1975 following a serious deterioration of economic conditions in Australia and what was described as an unprecedented explosion in award wages. They were also adopted with great support from the parties who appeared in that case, and that remained the case throughout the history of the utilisation of wage-fixing principles.

PN1556

JUSTICE ROSS: But their support isn't relevant. There's either power or there's not.

PN1557

MR FORSTER: Indeed. The question here about whether there is broad support, though, might stand apart.

PN1558

JUSTICE ROSS: That might go to whether you exercise any power; that's true.

PN1559

MR FORSTER: Quite. If I can answer the question as shortly as this: the indication given is that it was the public interest requirement that dictated the power in which to enact those principles. If I could come quickly then to deal with the situation for setting principles in this context, we agree should power be found - and that may very well be the case. It would still be an appropriate occasion to set principles. Certainly if they are to be set, they should - as the commission has pointed out in its working document and is accepted by all parties - go no further than what the statute intends and should not fetter its discretion in any way. We also wonder what has shifted in the period since the commission last expressed caution about this particular issue, given that no other cases have been heard or determined since that time.

PN1560

JUSTICE ROSS: I suppose one thing that shifts it is that half the parties are challenging the conclusions reached in the SACS case. That would seem to call for some sort of decision by us about at least what proper construction of 2-7 is.

PN1561

MR FORSTER: Quite. But we would say that's appropriate in the course of your deliberations in this matter, and that it need not extend to a statement of principles to apply to future matters. It seems to us clear that the parties are advocating for a particular set of principles that they hope to rely on in the second stage of this matter - the evidentiary case.

PN1562

JUSTICE ROSS: It may be that too much has been made of the characterisation as principles or guidelines, but each of the parties has agitated a particular construction of 2-7 and, based on that construction, sort of a step-by-step approach to the exercise of a power and what the jurisdictional fact requirement is.

PN1563

MR FORSTER: Yes.

PN1564

JUSTICE ROSS: The determination of all of that can be said to be giving a decision about the proper construction of 2-7 in a way that provides guidelines about those are the steps that parties need to go through in order to meet the relevant test. So the extent to which you go beyond that really only touches on the evidentiary question. That seems to be the other area that's left in debate.

PN1565

MR FORSTER: Yes.

PN1566

JUSTICE ROSS: It's certainly open question about what, if anything, we would say about that, bearing in mind that the sort of evidence that might be brought will depend very much on the nature of the claim. It would be a large decision to simply rule out or in evidence of a particular character in a general statement of principle.

PN1567

MR FORSTER: Yes.

PN1568

JUSTICE ROSS: I understand the apprehension that's put about but it really depends on the scope of the exercise.

PN1569

MR FORSTER: And can I say, to round this out, that it was our apprehension certainly about the content of the principles, but there was a submission about specific powers and then we perhaps are making this a bigger issue because of the fact that there were specific questions put on the draft working document.

PN1570

JUSTICE ROSS: It was put to you because you're the only one that's argued that there's no power. That's why it was put to you.

PN1571

MR FORSTER: Yes.

PN1572

JUSTICE ROSS: That doesn't mean you're wrong. It just means you're lonely in that proposition. That's all. As I understand your submission, it's really that if we decide the power question, if we were to make any sort of guidance or principles, they should not be prescriptive or framed in a way that would operate to confine a party's case or fetter the commission's discretion as to evidentiary or other matters that might be agitated.

PN1573

MR FORSTER: Yes.

PN1574

JUSTICE ROSS: I think that position is consistent with the views of a number of others as well.

PN1575

MR FORSTER: Yes, and to the extent that there is guidance on construction, may I - - -

PN1576

JUSTICE ROSS: I think their decision about construction - - -

PN1577

MR FORSTER: Indeed, but it is put to the commission in all of the draft principles hitherto that certain elements of construction be identified.

PN1578

JUSTICE ROSS: Yes.

PN1579

MR FORSTER: And if we do that, to identify preference. Well, of course that sits with what's been put by ACCI by Mr Ward.

PN1580

JUSTICE ROSS: Whilst we can't conclusively, obviously, determine the construction point, I don't think that would be expressed as a guideline. It would be expressed as our view as to the proper interpretation of the provisions.

PN1581

MR FORSTER: Yes. Your Honour, might I just indicate very briefly that there are perhaps one or two areas with which, following on from Mr Ward's submissions today, we do depart. The principle area where we do depart is in the requirement for a specific comparator of the opposite sex to be identified in cases of this nature. That is the submission of AFEI and we don't demur from that. So we stand apart from them there. I might say that that was the submission in writing. There were some points made to that by Mr Ward that it might be a broader comparison than that.

PN1582

VICE PRESIDENT HATCHER: I thought that remained his primary submission.

PN1583

MR FORSTER: Yes, yes. Well, we continue to endorse the primary submission. Thank you, your Honour.

PN1584

JUSTICE ROSS: Look, I think that's why we provided the additional opportunity. There has been, through the course of oral argument, some refinement of positions by different parties. Each of you will get the transcript and you'll have an opportunity to make whatever comments you wish to make, consistent with the directions we've issued, or the timing of the directions.

PN1585

MR FORSTER: Yes. Your Honour, did you have any questions of AFEI?

PN1586

JUSTICE ROSS: No. Thanks, Mr Forster.

PN1587

MR FORSTER: Thank you.

PN1588

JUSTICE ROSS: I think that brings us to you, Mr Shingles.

PN1589

MR SHINGLES: Thank you, your Honour. I also thank your Honour for the opportunity to take some of those additional matters on notice and certainly those who (indistinct) rights to further submissions on those particular matters where they see fit in accordance with those directions. There really are only two matters arising but I think always subject to anything the bench might wish to raise with me, and may arise out of the draft working document dated 16 April 2014.

PN1590

On page 64 that document (indistinct) is referred to as a short form for the various employers in the sector that we represent, and a number of paragraphs in our written submission are as stated there, namely 13, 14, 15 and 16, and then omits 17. The only reason I raise that is because it perhaps removes some confusion that may have arisen in relation to my comment in paragraph 18, which is then referred to at the bottom of page 64. That is in relation to isolating the gender-related aspect of any difference in remuneration. The reference to a difference in pay in paragraph 18 really followed on from paragraph 17, which refers to ensuring that any ERO order addresses gender based undervaluation as a step from other - - -

PN1591

JUSTICE ROSS: So paragraph 17, you say there must be a demonstrable causal relationship between the gender of the employees who bring the application and the undervaluation of their work?

PN1592

MR SHINGLES: Yes.

PN1593

VICE PRESIDENT HATCHER: What part of the Act supports that submission?

PN1594

MR SHINGLES: So, in relation to there being a causal relationship we do not accept that it can merely be an association between what might be proven to be a female-dominated group of employees and a form of unequal remuneration. We take on board debates over the last two days in oral argument around the extent to which that can be read into the provisions of Part 2-7. Our position is that we would follow the reasoning in SACS 1 and I know a number of paragraphs from that decision have been referred to. I would suggest that the one that cogently puts the approach that we would adopt is paragraph 276 that the full bench has noted that:

PN1595

The discretionary nature of the remedy and the requirement to make an order only where there is not equal remuneration for men and women workers for equal or comparable value requires a consideration of the reasons for these differences and, where there may be a number of reasons, an assessment of the extent of contributing factors.

PN1596

So our submission is that where undervaluation is used as the basis for seeking orders that would provide equal remuneration under section 302, it is important to identify that aspect which is associated with gender, not just in relation to discretionary factors but also in terms of the defining of the capacity to provide an equal remuneration order under that part. We also note that some opportunity has been given in relation to the scope of the words "any order" in subsection (1) of section 302 and we may seek to put further written submissions in relation to that direction.

PN1597

The other part that I wanted to spend a short amount of time is in relation to issue 12. There is some reference in our submissions on page 112 of the working document on that issue and we don't do much other than rely on those submissions, but it is necessary to deal with the contention that there is disagreement amongst the employer parties as to the treatment of prior decisions by this tribunal or others in relation to work value or matters of gender and valuation.

PN1598

We note and have noted previously that for the particular applications that will proceed as part of this matter, there have been previous decisions, a number of them made for a subset of a group of workers that are the subject of the application, dealing specifically with issues of equity, work value or gender and valuation, and those previous adjustments should be taken into account by the Fair Work Commission in determining the current applications.

PN1599

We particularly note that Mr Taylor was at pains yesterday to discuss the similarity of the current federal jurisdiction with those applying in state jurisdictions, and particularly he went to the Queensland jurisdiction, and we also see that there is a lot of similarity between those two and that is why we consider that any decision made in the Queensland jurisdiction should have serious import in terms of a similar application in the federal jurisdiction.

PN1600

We also note the submissions in relation to the exercise in creating a new modern award system on 1 January 2010 and that the commission will have regard to the equal remuneration principle as part of that process. We don't see that those two are in competition in terms of what previous decisions should be relevant but, rather, both ought to be addressed (indistinct)

PN1601

One aspect that arises on this issue that has not been addressed is how future decisions under Part 2-7 might be affected by previous decisions under Part 2-7 for the same group of workers, and again we would stress that that should be dealt with in the statement of principles issued by the present commission.

PN1602

JUSTICE ROSS: Why would we deal with that? Why wouldn't we wait until that issue arose?

PN1603

MR SHINGLES: If, your Honour, the purpose of putting forward a statement of principles is to provide some guidance to the parties in assessing whether to bring forward applications and how that might be assessed, we submit it would be useful to also indicate to those parties how prior adjustments under Part 2-7 would be taken into account. It might dissuade an application that is otherwise doomed from proceeding, for want of a better word, and we consider that that's in a similar vein to principle 6 in the prior statement of wage-fixing principles operated by the Australian Industrial Relations Commission.

PN1604

JUSTICE ROSS: Can I get you to talk into your microphone, Mr Shingles. You're dropping in and out a bit.

PN1605

MR SHINGLES: I apologise. I'll try not to cough into the microphone but make sure that I'm heard. I apologise.

PN1606

JUSTICE ROSS: It's all right.

PN1607

MR SHINGLES: Did you miss my last comment, your Honour?

PN1608

JUSTICE ROSS: No, I heard the last comment.

PN1609

MR SHINGLES: So aside from those matters (indistinct) submission. We reserve the right to address the further matters that you put directions in relation to.

PN1610

JUSTICE ROSS: Can I take you to paragraph 9 of your submission, Mr Shingles?

PN1611

MR SHINGLES: Certainly.

PN1612

JUSTICE ROSS: You say in the second sentence:

PN1613

It is agreed that the remuneration that is compared is that prescribed within modern awards.

PN1614

And you're talking here about the proper construction of section 302. I'm not sure what - well, I'm not sure what you mean by "it is agreed", but what do you mean by the comparison that's envisaged, on your submission, in "Part 2-7 is a comparison between what is prescribed in modern awards"?

PN1615

MR SHINGLES: So in our submission we also define 302(2) as being related - importing a particular evaluation process that relates to the traditional measures of work value, and that it is that comparison that we say involves modern award rates. I realise that there are other submissions that have been put about the breadth of remuneration and it may be that those can't be resisted in terms of the - - -

PN1616

JUSTICE ROSS: But for the moment I just want to understand what you're putting. Are you saying that the remuneration comparison envisaged in Part 2-7 is restricted to a comparison of the minimum rates prescribed in modern awards?

PN1617

MR SHINGLES: Not necessarily, your Honour.

PN1618

JUSTICE ROSS: Well, okay.

PN1619

MR SHINGLES: We would have to note the provision in 306 that does provide that the ERO has certain relationships.

PN1620

JUSTICE ROSS: That's one of the problems with it. The other would seem to be the breath of the word "remuneration".

PN1621

MR SHINGLES: Yes.

PN1622

JUSTICE ROSS: You're seeking to confine it to minimum rates prescribed in modern awards. Perhaps that's something you could clarify in the further directions process - - -

PN1623

MR SHINGLES: Yes, your Honour.

PN1624

JUSTICE ROSS: - - - because I'm not sure what you mean by "not necessarily". So perhaps if you could give some thought to that position and clarify the nature of the point that's being put.

PN1625

MR SHINGLES: Yes.

PN1626

JUSTICE ROSS: Was there anything else, Mr Shingles?

PN1627

MR SHINGLES: Not from my side, no, thank you. Anything else further the bench requires?

PN1628

JUSTICE ROSS: No, thank you.

PN1629

MR SHINGLES: Thank you.

PN1630

JUSTICE ROSS: Ms Howell, do you have any idea about how long you're likely to be in reply?

PN1631

MS HOWELL: At this stage short, your Honour, because I think it would only be at best - it will only be at best a very partial reply because of a number of - well, two reasons.

PN1632

JUSTICE ROSS: Unresolved issues that - - -

PN1633

MS HOWELL: The outstanding issues which a number of parties, including the various ministers and the employers, are taking on notice and addressing through the timetable and, secondly - I think your Honour put it more diplomatically than I would have - there's been some refinement of positions, which perhaps I would like to look at the transcript to see precisely the extent of refinement in some regards. So certainly I'm able to make some general points, but I think a lot of our reply will be in the process which your Honour indicated.

PN1634

JUSTICE ROSS: In any event, the process provides an opportunity for people to respond to whatever you say - - -

PN1635

MS HOWELL: Yes.

PN1636

JUSTICE ROSS: - - - and there's liberty to apply in any event, and we don't want to foreclose the opportunity from anyone to comment on these issues as they've emerged. We've seen from the questioning that sometimes when the consequences of a proposition are put to a party they've modified that position.

PN1637

MS HOWELL: Yes.

PN1638

JUSTICE ROSS: We also want to be clear about what it is the parties are advocating and on what basis. If you're content to start now, we may as well deal with - - -

PN1639

MS HOWELL: Yes, your Honour. The general point which has been made against us in the written and the oral submissions is that it's not appropriate to really look at undervaluation as a first step and you have to go directly to the issue of comparative value of work.

PN1640

Even if that proposition was accepted - that you go straight to, is there work of equal or comparative value - it still doesn't follow, in my submission, that one has to effectively conduct a dual work value exercise, find a comparator group and to compare the work of the two in terms of a detailed analysis of the respective work performed.

PN1641

I should say that, when the term "comparator" is used, it's not always used with precision, but generally it does seem to embody some notion that you're going to have a detailed analysis of two different sets of work and come to a conclusion about the relativity of that work.

PN1642

In my submission, even if you say, well, the undervaluation stage or step is not necessary and is not necessarily helpful, as the employers do, it doesn't follow from that that you need to have the formal dual and comparative analysis of two different work groups.

PN1643

So we do submit that there's an unnecessary fixation on that exercise, but what you don't see in the written and oral submissions of the employer groups in particular are the difficulties and problems which are associated with this exercise. Fundamentally, as we indicated in our oral submissions and in our written submissions, one of the major difficulties is that it is purely an exercise between one group and another relatively narrowly chosen group.

PN1644

So there is no way in which you can say, well, the result of that comparison properly gives you an assessment of how the work of the group who will be affected by the order can be compared to work of a comparable value as a general proposition, because there is nothing to satisfy the commission in that exercise that the comparator group chosen is typical or represents the broader group of either males or females, for that matter, whose work is properly valued.

PN1645

What we heard this morning in I think Mr Ward's submissions was really that the employers are ultimately driven back to some kind of concept of proper value of the comparator group, and I think, although exception was taken to the words "true value", it's really hard to see what the difference is. Ultimately the employers are saying, "Well, you have to make sure that the comparator group is properly valued." Once you say that, effectively you're retreating from the binary comparison. We say the same result can be achieved by the undervaluation approach, and that is effectively tested at the stage where you say, "Well, what remuneration is appropriate to this work?"

PN1646

VICE PRESIDENT HATCHER: Remuneration being actual remuneration or award remuneration?

PN1647

MS HOWELL: Actual remuneration in this case.

PN1648

VICE PRESIDENT HATCHER: How do you answer that question? The award sets the minimum rate appropriate for that work.

PN1649

MS HOWELL: Yes.

PN1650

VICE PRESIDENT HATCHER: What other test could there be to suggest what the actual should be?

PN1651

MS HOWELL: A couple of points come to mind on that, your Honour. First of all, there is a difference between a minimum rate and an appropriate rate, in the same way that one would say there's a difference between a minimum rate and a paid rate. One wouldn't say a paid rate award was overvaluing the work. One would say that was an appropriate rate for a particular occupation, and there is a difference between a minimum rate and a proper value.

PN1652

VICE PRESIDENT HATCHER: Sorry, can you expand upon that. So how do we assess what the appropriate rate is as some separate conception of what the minimum rate is? How do you do that?

PN1653

MS HOWELL: I think our third stage, we have accepted, does involve some comparison. It's just a question of how you do the comparison to say, well, what is the rate which effectively would give equal remuneration with other work of a similar value?

PN1654

VICE PRESIDENT HATCHER: I follow that submission. Your submission was, even before you get to that, there's some isolated undervaluation exercise where you compare, without the virtue of comparison, what their actual rate is and some other rate which you say they should be getting, which is somewhere higher than the minimum rate.

PN1655

MS HOWELL: No, I wouldn't advance it to the extent that you can determine the rates which should be paid necessarily in the first step. If I suggested that, that was probably not explained. The first step of determining whether there is undervaluation - I think the point I was trying to make is, to the extent that the employer interests say you cannot evaluate whether the statutory test is met by that method, then we say, once you come to the third step of saying, what is the appropriate value involving some type of comparison, then that exercise will show if there is any error in the first conclusion that the work is undervalued and, secondly, will necessarily satisfy the statutory test, which is, is the work remunerated equally?

PN1656

VICE PRESIDENT HATCHER: I must say, speaking for myself, I struggle to find how the section supports any of that. It's not about absolute work value, it's about comparative work value between genders, isn't it, which requires a comparison.

PN1657

MS HOWELL: Yes, your Honour, but I think generally underpinning the Act is a notion that there is some kind of assessment of absolute work value still to this day. The framework is primarily the minimum wage framework, but - - -

PN1658

VICE PRESIDENT HATCHER: Leaving aside these sections, work value is only referred to in the context of setting minimum rates for the purpose of the four-yearly review, is it not?

PN1659

MS HOWELL: Yes.

PN1660

VICE PRESIDENT HATCHER: It's only used as a minimum rates concept.

PN1661

MS HOWELL: Leaving aside these sections, yes. It's our submission that even if one accepts that you go straight to comparative work value, it still doesn't necessarily follow from that that one needs the kind of comparative exercise which the employer groups advocate, and the type of examples that I referred to in my submissions yesterday, although they were in the context of demonstrating undervaluation, can equally in my submission be applied to the question of whether there is relative undervaluation of the work.

PN1662

VICE PRESIDENT HATCHER: I thought you submitted yesterday that a comparison could be as simple as saying you have two classifications in two different awards which are both an AQF3 qualification and wind up at the same award rate. Why couldn't it be as simple as that?

PN1663

MS HOWELL: It could be, your Honour. It's really put against us, and I'm saying that that was all put in the context of showing undervaluation. I'm saying equally, if one goes direct comparative work value, those matters are evidentiary ways in which one could demonstrate the meeting of the statutory test.

PN1664

JUSTICE ROSS: So it would work this way, on that submission: that you look at the group of employees to whom the order would apply; you look at another group; you look at the minimum award prescription in relation to both, and the minimum award values, the work of both, in the same way; and then you look at the differential in remuneration and it's that differential that you seek to remedy in the order?

PN1665

MS HOWELL: Yes, your Honour.

PN1666

JUSTICE ROSS: And the differential is the evidence that there's not equal remuneration and the work of comparable value is demonstrated by the minimum award in that case?

PN1667

MS HOWELL: Yes, that's certainly one way in which one can satisfy the statutory test. I think unless there are any questions, really those are the matters I wish to address at this stage. As I indicated, we deal with the more detailed propositions in writing.

PN1668

JUSTICE ROSS: Thank you, Ms Howell. Mr Taylor.

PN1669

MR TAYLOR: Your Honours, I'm content for us to deal with our matters in writing. We are particularly focused on addressing the approach that the State of Victoria refined, in particular the way they took our three-step approach and took a different view on the first step. We're going to give that some consideration and respond directly to that, but, like the bench, we would appreciate seeing how that is refined in writing and so, rather than putting something in by next Wednesday, we'll be responding on the second of the dates that your Honour identified as a date for submissions.

PN1670

JUSTICE ROSS: Does anyone else wish to say anything at this point? You've got the timetable and the directions. If there are any questions that arise about any of that or any party feels that there needs to be some variation of it to ensure they've had a proper opportunity to put what they want to put, then there's liberty to apply in relation to that. All right, we'll adjourn.

<ADJOURNED INDEFINITELY [12.15PM]