PN7990

VICE PRESIDENT HATCHER: Yes, Mr Dixon?

PN7991

MR DIXON: May it please, your Honour, may I just address two matters very briefly that arose yesterday. The first concerns the question of what is the definition of financial distress that Bissett C asked us about. Mr Trimarchi, whose evidence is referred to in paragraph 19R of our final submissions, appears to have been relying on the census data. He does not give the definition himself and the census data of course refers to that definition, so that we assume it's the same definition that is being used in his evidence that is referred to in that paragraph. The second - - -

PN7992

VICE PRESIDENT HATCHER: Sorry, so where do we actually find the definition? Is it set out somewhere?

PN7993

MR DIXON: It's set out and I referred to it yesterday, your Honour.

PN7994

VICE PRESIDENT HATCHER: Right.

PN7995

MR DIXON: In the census document attached to the affidavit. I think Mr (indistinct) - sorry, I'll find it again if necessary.

PN7996

VICE PRESIDENT HATCHER: Yes, all right.

PN7997

MR DIXON: But it's in the - it's dealt with in paragraph 7874 of the submissions yesterday - on Tuesday. The second matter which I just briefly wish to address is the submission that was made in respect of the submissions to be found in the pro forma letters, and at paragraph 7965 I made a submission about one or two comments about not wanting a separate award. Can I just address that issue. It's accepted that the pro forma letters identify that the objectives did not support the revocation of the Clubs Award however from those pro forma letters the only reason advanced for that position was that the particular clubs did not wish to see staff face a cut from a reduction in the weekend and public holiday penalty rates, and there is no specific or separate ground advanced justifying the retention of a separate award. If the Commission pleases, those are the two matters which I wished to address.

PN7998

VICE PRESIDENT HATCHER: Thank you.

PN7999

Mr Dowling?

PN8000

MR DOWLING: Thank you, your Honour. We'll confirm the running order during the course of today in terms of those respondent parties. I understand I will go first. The parties as I understand it are going to keep to the time limits that we estimated on Tuesday. Mr Duncalfe will go last and we'll confirm the order of the others in between. Can I first confirm in terms of the United Voice the other submissions that are relied upon together with the written submissions that I'll provide to you shortly. The submissions of United Voice dated 14 May of this year firstly.

PN8001

Secondly, the submissions of United Voice dated 12 September of this year, 2018, and thirdly the written submissions dated today. We've provided a copy to our learned friends and the other respondent parties this morning and I'll provide now three copies for the members of the Bench. Just one other matter by way of administrative background detail. We provided on Tuesday the list of common evidence and an index to go with that list. In a responsive way we have provided two further pages of the Australian gambling statistics. Can I provide copies of those together with an amended index. The amendment to the index simply adds the reference to the two additional tables that are attached to the amended index that has just been provided to you.

PN8002

VICE PRESIDENT HATCHER: Thank you.

PN8003

MR DOWLING: They are the written submissions relied upon and the documents identified in that list of common evidence are the documents relied upon. Can I say in respect of - - -

PN8004

VICE PRESIDENT HATCHER: Sorry, so shall we just substitute that for the index in exhibit 67, should we?

PN8005

MR DOWLING: Yes, your Honour, you should. The two pages, can I just note, go to the number of gaming machines dealing separately with hotels and clubs in both New South Wales and the Australian Capital Territory, and they are referred to in the written submissions. Can I start then by saying that this application, we say it is now clear is nothing other than an attempt to reduce penalty rates for employees covered by the Clubs Award. By that I mean full‑time and part‑time employees covered by the Clubs Award in circumstances, we say, where it was accepted on Tuesday of this week that there are permanent employees covered by that award in that industry who are low paid and who will suffer a significant detriment as a result of this application.

PN8006

The Bench will find that concession at paragraph number 7932 to 7935. I said this is an attempt to solely reduce penalty rates. To be clear, we say the last changes made to the proposed amalgamated award arising from the last hearing were made solely in circumstances responding to the criticism of United Voice and the query from your Honour as to why it is that all the terms and conditions of the Clubs Award are being carried over save penalty rates. The further changes were, in our submission, solely in response to that criticism and those further changes it is now clear are made and proposed in circumstances where there was no evidence called about any of them.

PN8007

No evidence called about the necessity for those further changes, no evidence called about the operation of those further changes and certainly, it must be obvious, no consultation by the applicant to its members as to the need for those further changes. They were nothing other, in our submission, than a transparent attempt to deal with an obvious criticism. Can I summarise the application and what we say in response to it. The premise of the application is firstly that the two industries, the clubs industry and the hotel industries are the same. Now, we say that is not made out for these reasons.

PN8008

Firstly, the evidence such as it is does not establish that they are the same industry. Secondly and significantly, for reasons I will come to, the industry profiles - and by that I mean the industry profile relied upon by the Commission in the penalty rates relying on the ANZSIC classifications firstly and, secondly, the HERRC category relied on by the Productivity Commission are either completely unreliable or of uncertain origin so as to not properly form a basis for the proposition that the two industries are the same. As I say I will come to that.

PN8009

Thirdly though we say the evidence establishes fundamental differences between the two industries and lastly that the history establishes that the differences have long been accepted, since at least 2008 when the applicant in this case first made submissions on the need for a separate award but also of course during the entire life of the modern award since 2010, and those differences are maintained today. So the first premise that the two industries are the same we say is not made out. The second premise is that the clubs as part of that same industry are at a competitive disadvantage. Now we say again that is not made out.

PN8010

Firstly, as is clear no doubt from the cross‑examination, we say when is it said that that disadvantage crystallised in circumstances where the first reduction in the penalty rates as a result of the penalty rates decision was implemented on 1 July of 2017 and the application was lodged some 28 days later on 28 July. It can't be that that competitive disadvantage had crystallised in any material way in that four week period. The application was nothing other than speculation that there might be some competitive disadvantage and in our submission it remains just that. Speculation that there might be some competitive disadvantage but it is not made out, in our submission.

PN8011

VICE PRESIDENT HATCHER: But there was already the difference in Saturday penalty rates.

PN8012

MR DOWLING: There was but we understand the import of this application to be as a result of the arising difference attributable to the penalty rates decision. That's the first issue, that question of the crystallisation of any competitive disadvantage. Secondly we say the issue of the competition between clubs and hotels is not a consideration relevant to the modern awards objective. It does not entertain competition as between clubs and hotels, as between industries. It looks at the competition or the competitiveness of the national economy but it doesn't look, and it doesn't regulate, competition between sectors.

PN8013

So it is not a relevant consideration. In any event, we say the evidence does not establish such competition. The highest we got in the applicant's case is that some proximate hospitality offerings constitute competition. Now that, in our submission, is not sound and would not be a sound basis for a conclusion that there is competition. The fact that a nearby club or a nearby hotel offers some similar services; that is as high as the evidence got. Even if the Commission were prepared to accept that that establishes some competition, what is not established is that that disadvantage, if there is one, is the result of the difference in penalty rates.

PN8014

There is nothing firstly we say that establishes the competitive disadvantage, but if there is there's nothing that establishes that competitive disadvantage is as the result of the differential in penalty rates. And related to that of course we say even if we are wrong about those two propositions there is nothing to satisfy the Commission that a reduction in those penalty rates will ameliorate that competitive disadvantage. Lastly of course what is clear from the evidence is that there are some significant competitive advantages that are enjoyed by clubs in respect of particularly gaming and by that - and I'll deal with it in a little bit more detail, but electronic gaming machine numbers and gaming machine taxation and thirdly of course income tax.

PN8015

In those three ways there is in fact a significant competitive advantage enjoyed by clubs. So for those reasons we say the two fundamental bases upon which the application is made are not made out. But worse than that, in our submission, we say those two bases do not pay, even if they were made out, proper regard to the statutory principles. The statutory principles were given cursory if any consideration in the application made by CAI. They must establish, in our submission, that the variations to the Hospitality Award are necessary to achieve the modern awards objective.

PN8016

I will come to the difficulty that's created by the actual mechanics of how this application works for the applicant in circumstances where on their case they have to establish the need for the variation to the Hospitality Award first, and then have to establish that the varied award is appropriate under section 164. There are some fundamental difficulties we say. But they must get over these two significant hurdles. The variations to the Hospitality Award must be necessary to achieve the modern awards objective firstly and then any revocation must result in employees currently covered by the Clubs Award being covered by a different modern award that is appropriate for them or will be so covered when the revocation comes into operation.

PN8017

So in other words upon the making of the revocation there is in existence an award that is appropriate for the clubs' employees. Now, I'll come to in a little more detail how we say appropriate should be measured but in summary we point to four things. Firstly, whether the terms of the different modern award are better or worse. That must be a consideration in assessing appropriateness we say. Secondly, whether the employees are appropriately grouped with those in the replacement award. Thirdly, whether the history of the award to be revoked supports its retention and fourthly and lastly, whether appropriate - or the fact that appropriate should be measured together with the modern awards objectives insofar as they're relevant for appropriate.

PN8018

VICE PRESIDENT HATCHER: Mr Dowling, can I ask you at some convenient stage to address the fact that the application was in effect invited to be made by the penalty rates Full Bench and how we fit that into the process for the analysis.

PN8019

MR DOWLING: Yes, I certainly will. Can I pre-empt a more detailed answer by saying that certainly, in our submission, gives no presumption on the part of the applicant that there is some basis or foundation to it. This Bench has to determine on the evidence before it the merits of the application. There is no presumption in favour of the applicant simply because the suggestion was raised by the Full Bench. But much more importantly - and I'll come to it very shortly - much more important, we say, there is a fundamental flaw in the premise for the proposition being raised by the Full Bench and that is the way they dealt with the industry profile.

PN8020

So I'll come to that first but before I do that can I just identify for the Bench the closing submissions and the structure they follow, because I'm going to go slightly away from the structure to deal with your question, Vice President, and that issue of the industry profile. But you'll see what we have endeavoured to do, save the introduction, is to firstly identify the statutory framework and how it operates. Secondly to identify all of the relevant parts of the evidence and the salient parts of it, and lastly to apply that evidence and the matters before you to the statutory principles.

PN8021

We have taken some time with the written submissions so I won't repeat them. What I'll endeavour to do in the time I have this morning is to draw out the most salient aspects for your attention. Can I then - I said I would go slightly out of order and I want to do that by going to that part of the case that the Bench will see appears under the evidence and under that part with the subheading "The Clubs and Hospitality Industries Are Not the Same or Very Similar" commencing on page 16 and this, as I indicated, is partly in answer to your Honour's question.

PN8022

In raising the suggestion or the possibility that such an application be made, and the Bench did that in its reasons for decision between paragraphs 1998 and 2004 in the penalty rates decision and a number of paragraphs following paragraph 2004. When they did that they said:

PN8023

... the option would have the desirable outcome of rationalising the awards applying to the hospitality sector and providing greater consistency in the regulation of penalty rates in the sector.

PN8024

Now, in our submission it's abundantly clear that the last words "the sector" are referring to the hospitality sector. In identifying the hospitality sector that is the Full Bench's expression and description. They constructed that sector in the penalty rates decision based on the industry profile, and I'll take you to the industry profile. But what we know, for reasons I'll come to, is that that industry profile excludes approximately 55 per cent of clubs and excludes all of those clubs not offering hospitality services. So the premise is based on the notion that all clubs are in the hospitality sector, all clubs are effectively the same as the hotels industry and are within that sector and therefore we should rationalise the hospitality sector. But what it did not realise, what the Bench did not realise in doing that is that the majority of clubs are outside of that sector.

PN8025

Let me explain that in a little more detail. Can I take the Bench to, of the common documents, the common evidence documents of United Voice contained in that folder, the one appearing behind tab 3 and can I say before I come to that document what I think is clear to everyone, but to be clear, the hospitality group designated by the Full Bench in the penalty rates case included three awards; the Hospitality Award, the Clubs Award and the Restaurants Award. So in dividing up that case into the retail sector and the hospitality sector, insofar as the hospitality sector was concerned it included those three awards.

PN8026

Now, does each member of the Bench have the document behind tab 3 which is that Australian Bureau of Statistics ANZSIC document? We've included the cover page and a number of pages thereafter so the Bench can verify its authenticity. But I want to take the Bench firstly to page 9 which I think is six pages in, and the page numbers are marked in the bottom right‑hand corner. You will there see perhaps two‑thirds, just over half of the way down the page at the paragraph commencing or numbered 1.21 the identification of the ANZSIC structure, and this is important for reasons I'll come to. There is a hierarchical structure with four levels; division, subdivision, group and class. If the Bench then turns the page you will there see - of course this is an extract of a much longer document - you will there see page 265 and in respect of that four level hierarchical classification structure you will see what's represented on page 265 is division H, that is the top level division, the subdivision food and beverage services and then each group and class.

PN8027

Moving to the bottom of the page you will see the group 453 and the class 4530 is clubs (hospitality). Now just to note this is one of those classes as we understand it where the group and the class are the same. So the only class that appears within the 453 group is clubs (hospitality) 4530. But what that tells you is that within division H subdivision food and beverage services, pubs and taverns and bars are included, catering services are included, and clubs (hospitality) are included and it says there:

PN8028

This class consists of associations mainly engaged in providing hospitality services to members. These hospitality services include gambling, sporting or other social entertainment facilities. Primary activities - - -

PN8029

VICE PRESIDENT HATCHER: And sorry, these are both within subdivision 45?

PN8030

MR DOWLING: They are. Correct. You'll see the class number starts with 45 so that tells us it's 45 subdivision and then three for the group, zero for the class. The primary activities of these groups, clubs (hospitality), is hospitality club operation. Over the page on page 266 the subdivision - sorry, the class clubs (hospitality) is continued and it tells us what it excluded. Moving to the second dot point under "Exclusions" it provides that what is excluded is:

PN8031

Operating sporting clubs are included in class 9112, sports and physical recreation clubs and sports professionals.

PN8032

So they are included from this class - excluded.

PN8033

VICE PRESIDENT HATCHER: What's the first exclusion referring to?

PN8034

MR DOWLING: It's a good question, your Honour, and I'm not sure in fact that's meant to be an exclusion. It may be you see the subheading says "Exclusion/references", because it seems to be describing an inclusion rather than an exclusion. It says:

PN8035

Units mainly engaged in selling alcohol beverages both for consumption on and off the premises are included in class 4520, pubs, taverns and bars.

PN8036

I think what it's telling us, your Honour, is that those units are excluded from 4530 but are included in 4520. So I take back what I said. I think it is in fact still an exclusion but it's moving those units from 4530 to 4520.

PN8037

VICE PRESIDENT HATCHER: But I'm not aware of any circumstance where a club sells alcohol for consumption off the premises.

PN8038

MR DOWLING: No, I think that's right, your Honour. It's not material for what it is we want to come to.

PN8039

VICE PRESIDENT HATCHER: No.

PN8040

MR DOWLING: But we did wonder about it ourselves, your Honour. So the first point is that we know the clubs that are excluded from class 4530 are those within class 9112, sports and physical recreation clubs and sports professionals. Now if the Bench skips - - -

PN8041

VICE PRESIDENT HATCHER: I'm sorry, would that include golf clubs?

PN8042

MR DOWLING: Yes, and I'll show you why. If the Bench skips not just golf clubs but golf instruction - and I shall tell you why - if the Bench skips the next page 341 and jumps to the page numbered in the bottom left‑hand corner 356 you will there find division R, arts and recreation services, subdivision 91, sports and recreation activities, and group 911 and a third of the way down the page you see "Class 9112". Now that is the class that was referred to in the exclusion to 4530 as not covered by 4530 and that tells you:

PN8043

The class consists of units mainly engaged in operating individual sports or recreation clubs or teams to provide sporting or physical recreation opportunities to participants or entertainment for spectators. The class also includes sports professionals.

PN8044

And then you see:

PN8045

... basketball clubs, cricket club, football club, golf club -

PN8046

In answer to your Honour's question, "gun club, hockey club" et cetera. Now there are some exclusions in respect of this class too - I'm sorry this is a bit painful but we're getting there - and they appear over the page at the top of 357:

PN8047

This class 9112 excludes those units -

PN8048

In the language of the ANZSIC categories:

PN8049

- providing sports and recreation, education, coaching or instructional services because they are included in class 8211.

PN8050

So if the Bench goes back now two pages to the page numbered 341 you will see there class 8211:

PN8051

Sports and physical recreation instruction. The class consists of units mainly engaged in providing non‑vocational instruction in sporting and physical recreation activities ...

PN8052

And sticking with golf as an example you will see the fifth dot point down "golf instruction". So we know now that there are at least two classes that are excluded from the industry profile identified by the Commission and if the Bench now turns ahead to the penultimate page in the document - - -

PN8053

VICE PRESIDENT HATCHER: Before you leave page 357.

PN8054

MR DOWLING: Yes.

PN8055

VICE PRESIDENT HATCHER: There's a second exclusion which in effect puts back clubs which mainly provide hospitality services, doesn't it? That is it seems to me that if for example you're a golf club but on a proper characterisation you are mainly providing hospitality services you would go back in the clubs' category.

PN8056

MR DOWLING: You might, that's right. If you are mainly providing hospitality services you would end up in class 4530 even if you are a golf club. Of course the PGA tell us that hospitality is in their words I think an incidental add-on in respect of golf clubs, and in our submission on what we have heard from the golf professionals it could not be said that a golf club is in the business of mainly providing hospitality services. They tell us they're in the business of mainly providing golf. But I think your Honour is right. If a club, even those described at 9112 class, were mainly providing hospitality services they might slip back into 4530.

PN8057

VICE PRESIDENT HATCHER: And bowling clubs are not included in 9112 as far as I can see, are they?

PN8058

MR DOWLING: Not included in 9112? They're not included in that list, that's correct.

PN8059

COMMISSIONER BISSETT: They seem to be in 9113.

PN8060

MR DOWLING: Yes.

PN8061

COMMISSIONER BISSETT: "Bowling green operation".

PN8062

MR DOWLING: Yes.

PN8063

COMMISSIONER BISSETT: Perhaps.

PN8064

MR DOWLING: Importantly, in our submission, whether they're a 9112 or 9113 they are taken out, in our submission, of 4530.

PN8065

VICE PRESIDENT HATCHER: When these classes refer to units, what's a unit?

PN8066

MR DOWLING: I think a business or a company. It might be incorporated or unincorporated but as we understand it that's the operation or the business, although it does use the expression "operation" as well separately. Can I go to one last class then and that as I said appears on the penultimate page of the document I've provided and that's the class 9559, "Other interest group services". We'll confirm the acronym NEC for you, and you will see there in the description of the primary activities of the duties the sixth dot point identifies:

PN8067

Club operation for the promotion of community or sectional interests.

PN8068

Now that, we understand, might be the Greek Club or the Labor Club or those clubs arising from, as it says, community or sectional interests. NEC - I'm grateful to Ms Burke - is not elsewhere classified. So in our submission, of the four categories that include clubs that is the third of them that is not included in 4530.

PN8069

VICE PRESIDENT HATCHER: Sorry, just with the last one if it's not elsewhere categorised that would suggest that if a club, for example an ethnic club did mainly engage in providing hospitality services it would in fact fall within the clubs' category?

PN8070

MR DOWLING: When you say the clubs you mean clubs (hospitality) 4530?

PN8071

VICE PRESIDENT HATCHER: Yes.

PN8072

MR DOWLING: Yes. There's no evidence about it but again we would expect that a club established for the promotion of a community or sectional interest, its primary purpose and its primary activity would be the promotion of that community or sectional interest rather than the provision of hospitality services. But we accept what your Honour says. It may fall back into 4530. So they are the three excluded categories and the Bench may well say "Well, how many are in each and why does it matter?" We know this much; in the industry profile in the penalty rates decision we are told that there are 2,925 clubs and we've referred to that in our submissions at paragraph 17 - 70, sorry, and as we understand it the applicant in this case indeed relies upon that industry profile identified by the Productivity Commission.

PN8073

So we know that the clubs that the Commission was talking about in the industry profile were 2,925 clubs. We also know from the KPMG census which is an annexure to Mr Murray's statement tendered by the applicant as exhibit 20 in this case that at the same time, the same relevant period in 2015, there were 6,400 clubs. So from that we say that those clubs in 4530 identified as the 2,925 make up only approximately 45 per cent of the total number of clubs.

PN8074

Now, keeping in mind as I said at the start that the premise of the proposition put by the penalty rates Full Bench is that "Let's rationalise the hospitality sector and let's make the clubs" - "Let's as a possibility, as an option, we can move these clubs into the Hospitality Award" but when it did that, in our submission, we say significantly it did not appreciate that what it was talking about was a minority of clubs, and this Bench is looking at all of the clubs covered by the Clubs Award. We say there shouldn't be any doubt about this but the collection of industries referred to throughout the penalty rates decision, including in the paragraphs identifying the amalgamation option if we can call it that, are cited and referred to as "the hospitality sector" and that is the 2,900 clubs and not the 6,400 clubs.

PN8075

VICE PRESIDENT HATCHER: The evidence would suggest, wouldn't it, that the preponderance of employment would be in the 2,900? That is, by definition the ones that provide the most hospitality services are the largest clubs employing the most people?

PN8076

MR DOWLING: I don't think we could reliably say that, your Honour. It may be so but in our submission the Full Bench could not reliably conclude that on the evidence. Certainly the applicant for its part has not differentiated between - apart from picking up the floor and adopting it, has not sought to in any meaningful way differentiate between those clubs offering hospitality services and those not. So it hasn't put any evidence before you to make good your Honour's question. Clan I just conclude on this point with respect to this classification. There are a number of findings in the penalty rates decision that the applicant seeks to rely upon arising from the industry profile.

PN8077

In our submission they are not reliable for the reasons I've just explained. Can I simply give the Bench a cross‑reference to our submissions. I'll confirm the paragraph numbers, just excuse me one moment. In our written submissions at paragraphs 73 through to 75 we there respond to each of the findings that the applicant seeks to rely upon in respect of the penalty rates decision and we set out, for the reason I've just explained and others, why those findings are not reliable.

PN8078

Can I then nextly - and this is in a similar theme but I can do it slightly more quickly - can I then deal with the HERRC category. We deal with this in our written submissions at paragraphs 76 to 80. Can I tell you though that the HERRC category which you heard talk of on Tuesday, which is the hospitality Entertainment Retail Restaurants and Café industries, that category is a construct of the Productivity Commission. It unlike the penalty rates decision does not in the same way, at least as far as we were able to tell, is not immediately referable to the ANZSIC classifications.

PN8079

It establishes its own group and calls it the HERRC group. Mr Dixon was asked on Tuesday whether that group included clubs and at paragraph number 7914 to 7915 he indicated yes. What we can tell you though is that the Productivity Commission report does not explain the statistical or evidentiary basis on which it has constructed the HERRC category, and there is a basis - and I'll come to it - to conclude that in respect of that HERRC category that it constructed it was also contemplating the clubs offering hospitality services being the minority of clubs.

PN8080

I said it's not clear. We have identified in our submissions I think at paragraph 17 - just let me confirm that. Excuse me one moment. Sorry, my numbers are a little changed but we have identified in the footnote that in the Productivity Commission report at footnote 121 of the Productivity Commission report on page 406 it says:

PN8081

The Productivity Commission includes employees in the clubs industry, fast food, hairdressing and pharmacy industries as part of the HERRC. The first two are akin to restaurants and cafés.

PN8082

So it's including the clubs industry it might be said insofar as they are akin to restaurants and cafés. That footnote is referred to in our written submissions at our footnote 54. Now as I said, the Productivity Commission report doesn't explain how they constructed their HERRC category. They don't tell us but there's two tables that we refer to in our submissions where we draw some guidance. The first is the figure at 13.2 on page 455 of the PC report and there it appears to align the employees in the HERRC industries with:

PN8083

(a) other consumers;

PN8084

(b) accommodation and food services -

PN8085

Which I interpolate is likely to be the ANZSIC division H:

PN8086

- retail and not consumer industry.

PN8087

Now, what we take from that is figure 13.2 seems to suggest that the clubs within the HERRC are the division H clubs, again the 45 per cent. The second pointer to the same proposition is in the table at 11.1 on page 428 where it refers to an alternative viewpoint on weekend work in the HERRC industries. It says - it defines it to cover:

PN8088

... retail ANZSIC division G, AFS -

PN8089

That's accommodation food services:

PN8090

- ANZSIC division H, arts and recreation, rental and personal services and all other industries ...

PN8091

But doesn't include the P and the S, the divisions P and S which were those remaining three categories of clubs that we identified. So again it seems to us that what the Productivity Commission report was doing or the Productivity Commission was doing when it established its HERRC, it was talking about those clubs offering hospitality services who are, we now know, the minority of clubs. And again that undermines the Productivity Commission report insofar as it seeks to say "The industry is all the same, clubs and hotels are all the same" because it is only talking about a portion of the clubs and it undermines what it is the applicant says that undoubtedly clubs are included in this HERRC classification.

PN8092

If you scratch the surface you'll see that is not a reliable proposition. Of course I should also interpolate in respect of the Productivity Commission report that the applicant accepts that the opinions in the PC report are only submissions and they make that concession at paragraphs 39 to 41 of their written submissions of Tuesday. We reach the same conclusion then in respect of the HERRC categories that we reach in respect of the industry profile under the Commission report when we go through and respond to those findings that the applicant seeks to rely on in respect of the Productivity Commission report.

PN8093

Now this brings me back to something I said in the immediate response to your Honour's question and that is what do we do with the fact that the Commission has suggested this as an idea? What we now know, in our submission, is that the premise upon which the idea was based is fundamentally flawed. It is based on the idea of a commonality of work in the hospitality sector and that commonality of work it's talking about is in those and that minority of clubs and does not take account of the other 55 per cent. But in any event we say, as I also indicated, even if that were wrong that should not provide the applicant in this application with any head start.

PN8094

It can't sensibly be said, in our submission, that this Bench should treat the Commission's raising of an option and provisional views as some presumption in favour of the applicant. The Commission has to determine, in our submission, unencumbered by any comments made by the Full Bench in the penalty rates decision in terms of provisional views, its assessment based on the evidence and material before it as to whether it is necessary taking into account the modern awards objectives to vary the Hospitality Award in the way sought and whether that award is appropriate upon the revocation of the Clubs Award. It has to apply that test and it cannot and should not do so encumbered by the provisional views of the Full Bench.

PN8095

Can I then go to in a little more detail the statutory framework because as I've said, in our submission, this was given cursory if any consideration by the applicant in their submissions. Now this is dealt with in part B of our written submissions from paragraph 5 and through to paragraph 49. It's not in dispute it seems to us that it is Part 2-3 of the Fair Work Act we're dealing with. It provides for the terms and the review of the modern award and in section 156 provides the Commission must undertake the review, the four yearly review of modern awards, and it's 156(2) that tells the Bench what it can do. It can either make determinations varying, make one or more modern awards or make a determination revoking a modern award.

PN8096

As we've already said, the Commission's task in the review is to decide whether the particular modern award achieves the modern awards objective. That as everybody knows is set out at section 134. Can we just add to that it's section 134(2) that provides:

PN8097

The modern awards objective applies to the performance or exercise of -

PN8098

the Commission's "functions", we interpolate all of their functions, "or powers under Part 2-3" and of course Part 2‑3 includes not only section 156 but includes section 164. So the variation that you're being asked to make and the revocation that you're being asked to make and the revocation that you're being asked to make must of course - those powers must be exercised consistent with the modern awards objectives.

PN8099

Section 138, piecing all of these sections together, is the section of course that tells us that if the Commission determines that the award does not meet the modern awards objectives it may be varied only so that or such that it only includes terms that are necessary to achieve the modern awards objectives. So that we say is the operation of section 134, 138 and 156 together but we add to that 164 which as the heading tells us provides for special criteria in respect of revocation and, in our submission, provides an additional test and that is the test of appropriateness. The section provides the Commission can't make the determination revoking unless:

PN8100

The award is obsolete or no longer capable of operating; or all the employees covered by the award are covered by a different modern award ... that is appropriate for them, or will be so ... when the revocation comes into operation.

PN8101

Now as I said, the 164 power must be exercised consistent with the modern awards objective in 134, but as I also said it must mean something more than just the modern awards objective, it must apply an additional test and that's the additional test of appropriate. I think we have footnoted for you the decision in which your Honour the Vice President was involved in respect of the Alpine Resorts Award. It was dealing with coverage under 163 but there was in that decision the conclusion consistent with what we say, that an additional criteria of appropriateness, that it adds and establishes the additional criteria of appropriateness to the consideration of an application in that case seeking the transfer of coverage from one award to the other.

PN8102

You can replace those words, in our submission, with "it adds the additional criteria of appropriateness to the consideration of an application to revoke under section 164." That is the interplay, in our submission, between 134, 138, 156 and 164. We end before we come to some of the problems that are created by that by noting, consistent with the question your Honour asked of me in my opening during July, and that is if the Bench is satisfied that the Clubs Award is meeting the modern awards objective is that the end of the application, and our submission is yes. That if the Clubs Award is meeting the modern awards objective there's no further need to conduct the review, there's no need to vary it and there's no warrant to revoke it. But I'll return to that.

PN8103

Can I then describe the practical issues that we say are confronted by the applicant, because what it seeks to do is two things, revoke the Clubs Award but vary the Hospitality Award. And it seems to accept in its written submissions at paragraph 10 of its written submissions dated Tuesday of this week that what should happen is that the variation should occur first, and no doubt it says that because section 164 tells you that the varied award has to be in existence at the time the revocation is made so that it will cover the employees. Now that gives rise to two problems. The first significantly, we say, is that in varying the Hospitality Award the Bench cannot and should not take into account the prospect that the Clubs Award may be revoked.

PN8104

Now that of course is the whole purpose of the variation that the applicant seeks to make, but it is not one of the modern awards objectives. The modern awards objectives guide the basis upon which you can vary the Hospitality Award and it does not include as a consideration that there is an impending revocation of another award so that is a basis for including in, in this case the Hospitality Award, all of the terms of the Clubs Award save penalty rates. That's the first problem. The second of course is that the modern awards objectives also tell us that the modern awards objectives must establish a simple and easy to understand set of modern awards that do not overlap.

PN8105

If you are seeking to vary the Hospitality Award at a time at which the Clubs Award is not revoked you are not only acting inconsistent with that you are - well, you are acting inconsistent with it by directing creating an overlap. But you are not only creating an overlap, you are creating an unwieldy Hospitality Award in this case that has all of the Clubs Award provisions in it save penalty rates and covers the same employees that the Clubs Award covers.

PN8106

VICE PRESIDENT HATCHER: Wasn't this issue touched upon in the Alpine Resorts decision?

PN8107

MR DOWLING: Not in a way that provides an answer to our learned friends, we say. I mean it was dealing with coverage rather than the wholesale revocation.

PN8108

VICE PRESIDENT HATCHER: I thought I suggested that that practical problem in that context is resolved if you simultaneously reduce the coverage of one and expand the coverage of another. By analogy why wouldn't that work? That is you simultaneously revoke one and expand the coverage of another?

PN8109

MR DOWLING: We deal with that in our submissions and we say perhaps you can do it simultaneously and how would that work. But it still creates a difficulty whether it can be done - coverage might be different because you can end one and start one immediately. But the way section 164 works is slightly different in the sense that at the time you revoke you have to have in existence an award to cover the people. So it doesn't have the advantage that the coverage - section 163 can have. You can simultaneously cut one and start one. Under 164 at the time you cut or revoke you have to have in place, in our submission, the varied award. So even if you try and do it simultaneously you still have to by virtue of the operation of section 164 do the variation first so you've got in place your varied award.

PN8110

VICE PRESIDENT HATCHER: It sounds almost theological.

PN8111

MR DOWLING: It's certainly problematical. I should say too that the ultimate conclusion for us is it really doesn't suit this purpose. What it doesn't - what it is not intended to do is allow the wholesale revocation of one award, throw all the terms into another save one, penalty rates effectively, and then revoke the other thereafter. It's not intended for that type of application, and if it's not intended for that application and it doesn't work for that application that's the end.

PN8112

But we should say for completeness that does not mean of course that the applicant can't do what it wants to do, which is reduce penalty rates. It can do that by making an application under section 156 to reduce penalty rates, which it tried to do and failed. It could do it again under section 157 outside the four yearly review. It could do it in the next four yearly review. It is able to do it so although we say there is a significant problem created by the statutory scheme for the applicant, it doesn't result in them not being able to do what they want to do, reduce penalty rates.

PN8113

The second thing we should say is that it doesn't result in there being - it might be said against us "Well, does that mean there's really no utility in section 164? How does it work if it can't work in this case, how does it work?" We know and we've referenced it in our written submissions - I'll identify the paragraph number for you, paragraph 19 of our written submissions - that the explanatory memorandum tells us in respect of 164(a) in respect of the obsolete paragraph:

PN8114

An award may become obsolete by the making of a new modern award.

PN8115

So one area of work that 164 may have to do is if a new award is created and that creates an overlap and there might then be an applicant come along to say "Well, we want to revoke the old award that overlaps and really covers these people covered by the new award. And there, of course, you would be able to say it is obsolete and the employees formerly covered by it will be covered by an existing new modern award. It might do that. It might have that work to do.

PN8116

Additionally, there might be some existing overlap as a result of the modern award making exercise where one party might come along and say, "This was unintended," or "Whether it was intended or unintended, but we have an existing overlap here that is creating more awards than there needs to be, we want to revoke one of them. There's already another for everyone that everyone are covered by, so, you can simply revoke them and the other one is appropriate." So, there is work for 164 to do. It's not the work that the applicant wants it to do here and - - -

PN8117

COMMISSIONER HAMPTON: Mr Dowling, does that mean that if the Commission wanted to amalgamate two awards, it might make a new award which covers the territory, the coverage of both those awards and then rescind both awards?

PN8118

MR DOWLING: Yes.

PN8119

COMMISSIONER HAMPTON: I appreciate that's not what's advanced here, but - - -

PN8120

MR DOWLING: No, but that would certainly be an option that would operate effectively for section 164. It could create a new award. Of course, the Bench would still need to be satisfied that the making of the new award would meet all the statutory requirements and the revocation met the statutory requirements. We'll come to 'appropriate', but that might be an option. That's not the way this case is put, as you say.

PN8121

COMMISSIONER HAMPTON: It does strike me that the unusual application of the laws together that once modern awards are made, you're sort of stuck with the number of modern awards originally determined through that process.

PN8122

MR DOWLING: Yes.

PN8123

COMMISSIONER HAMPTON: I doubt that that was intended.

PN8124

MR DOWLING: We accept that. We accept that, Commissioner. That can't be and that's consistent with what I referenced in terms of the explanatory memorandum that an award may become obsolete on the making of a new modern award. So, certainly, the explanatory memorandum contemplates certainly something like the example that you give, that there might be a new modern award made that creates some obsolescence and 164 has some work to do.

PN8125

COMMISSIONER HAMPTON: Thank you.

PN8126

MR DOWLING: So, that's as much as we want to say about the problems that are created and how the application of these sections are not fit for the purpose that the applicant wants to shoehorn into the provisions. Thereafter, can I identify then the following matters of principle. Assuming the applicant convinces you that you can and should vary the Hospitality Award first and then revoke the Clubs Award. We set out, firstly, in respect of the matters of principle the requirements for variation. We have set out for you in the written submissions at paragraph 27, the Modern Awards Objectives with which you will be very familiar. And the submissions at paragraph 25, 26, 27, 29, 30 through to 33, set out the principles to be implied in respect of the variation.

PN8127

But can we say this. Importantly, at paragraph 25, we identify that matter which should not be controversial and that is the Full Bench in the preliminary jurisdiction issues decision making clear that a proponent for change seeking to make a significant change must ensure that the proposal is supported by a submission which addresses the relevant legislative provisions and be accompanied by probative evidence properly directed to demonstrating the facts supporting the proposed variation.

PN8128

Now, we know in respect of all of the variations, save with the possible exception of penalty rates, there was no evidence called at all. There is no evidence about the need for those other variations. No evidence about the necessity for them. No evidence about the operation of them. Just nothing at all. The only submissions that are made in respect of those other variations are whether they create a situation that's better or worse.

PN8129

Now, returning to what I said near the beginning, the reason for that is those other variations are simply a transparent attempt to cover up a problem. The problem being, "We really just want to reduce penalty rates. We'll throw in a few other variations so it's not as stark." But we know there's no evidence led about them at all. They can't possibly succeed on that test.

PN8130

We have prepared a table, so, I won't need to take you through each one, but what we have done, and I'll make some further reference to it towards the end of my submission, but we have prepared a table which identifies relevantly each of the changes to the proposed amalgamated award as annexure A, each of those that we say is either detrimental or beneficial and they're the last pages. It starts at page 64, but I will come to it at the end. So, that's the proper approach with respect to variation.

PN8131

VICE PRESIDENT HATCHER: When you say detriment, you mean to employees, I assume?

PN8132

MR DOWLING: Yes, that's right, and we say that for a reason, of course, and it's a reason I want to come to now in respect of section 164, the special criteria. I want to for present purposes make three points in respect of 164 before coming to how it is appropriate it's to be assessed. And the last - perhaps I'll do them in reverse order so I can respond to your Honour's question, but the last of them is identified at paragraph 39 and that is that section 164B is directed only at the employees to be covered by the different modern award.

PN8133

A distinction is to be drawn with section 163 that concerns your Honour in the Alpine Resorts case looking at coverage. There you were looking at the interests of varying the coverage taking into account the interests of employers and employees. But section 164B is directed only at the employees and that's why, of course, when we are dealing with the table and whether it is beneficial or detrimental, we have directed that inquiry at the employees.

PN8134

Two other things we say about the operation of section 164. Firstly, that it is appropriate to characterise its operation as remedial or beneficial. Now, no doubt the Bench hears these expressions often but we have identified for you in footnote 27, the Pastoral Award case, where sections 139 and 142 were considered remedial and, in our submission, it is a sound proposition that section 164 is remedial and, of course, the consequence of that is that it should be interpreted in a manner so as to give the fullest relief or protection with which the fair meaning of the language will allow. And that's important when we come to look at 'appropriate'. We have to interpret 'appropriate' taking into account it is beneficial or remedial.

PN8135

The third and last point with respect to the operation of section 164 is that it is clear, certainly, by 164A, that a high hurdle is created. Obsolete or no longer capable of operation and, in our submission, 164B should be construed in the same way, creating a high hurdle. There is an obvious reason for that and that is it is intended, amongst other things, to protect the safety net that is created by the modern awards and the National Employment Standards.

PN8136

If it is the case that 'appropriate' is given a very low threshold, there is the potential to undermine the modern award system in the way contended for by the applicant in this case. We could just move a whole lot of people across, take away or reduce their penalty rates. It must mean something more stringent than that so as to protect the modern award system, in our submission.

PN8137

So, they are the points we want to make about the operation of section 164 and we have then identified for you from paragraph 42 what we say the Commission should take account of in determining what appropriate means. It must be measured, in our submission, by an assessment of the practical operation and effect on the employees because 164B is directed at this employees and it should be directed at all of the employees covered.

PN8138

We have set out for you in a very different context, we accept, what it was the High Court had to say of the work 'appropriate', where it appears in section 545 of the Act and we just draw the Bench's attention to the words, "What is appropriate falls to be determined in the light of the purpose of the section and is not to be artificially limited." We say the Bench can be guided by those words, albeit dealing with the word 'appropriate' in a different section in a different context and we - - -

PN8139

VICE PRESIDENT HATCHER: Mr Dowling, let's assume against your primary argument that under section 164B, you can carry out the exercise by simultaneously revoking an existing modern award and varying the coverage and perhaps some other provisions of another modern award.

PN8140

MR DOWLING: Yes.

PN8141

VICE PRESIDENT HATCHER: Does it follow that, assuming you can do that, that the appropriateness test is assessed by reference to the modern award as it would be varied simultaneously with the revocation?

PN8142

MR DOWLING: I think that must be so, your Honour, because it would create a rather odd practical situation otherwise. It might be we contemplate the situation where you would have to assume at least the varied award has a coverage change because otherwise 164 won't work. So, you could assume it just had the coverage change but not all of the other changes and see if your application gets up. But then you have to keep going back and varying again. But we think at a practical level, as you say, against our primary proposition that if you are assessing appropriateness, you are assessing it against the award as proposed to be varied.

PN8143

VICE PRESIDENT HATCHER: So, for the sake of, again, just merely for the sake of argument, if we varied the Hospitality Award to include for club employees every entitlement they currently have which is more beneficial, then on your analysis that would meet the appropriateness test.

PN8144

MR DOWLING: Well, yes. There might be other problems. It would certainly meet the first limb of our appropriate test which is, are the employees any worse off? They wouldn't be any worse off because they'd be getting the same. I will go on to tell you the other three aspects of our appropriateness test and one of them is, are they appropriately grouped? Now, it might be in that example, yes, they're not worse off, but they're in a group with a whole lot of hospitality workers when 55 per cent of them don't do any hospitality work at all. So, they might fail appropriateness in that regard.

PN8145

VICE PRESIDENT HATCHER: Where this leads to is that to the extent that the application was to be granted in some form that was subject to transitional or ameliorative provisions, you would have to assess those as part of the one exercise because they would be relevant to whether the modern award to which you're moving the people is appropriate. It is, on one view, one set of transitional provisions would not sufficiently protect employees and, therefore, moving them across would not be appropriate. But another type of provision might be sufficiently protective such that it is appropriate leading to the analysis that you have to do it as part of the one exercise.

PN8146

MR DOWLING: Yes, there might be some dangers with that, your Honour. One of the issues that I have proposed to come to and I am happy to deal with now is that notion that is put by our learned friends that in varying the Hospitality Award, you can take into account the transitional arrangements. In our submission, that's not a sound proposition and it's not what the Full Bench did in the penalty rates case. What they did was determine whether the variation to the penalty rates was necessary taking into account the Modern Awards Objective. Then having determined that it was appropriate to vary those penalty rates, sought to make and consider transitional arrangements to forestall or ameliorate the immediate impact of that decision. But that, in our submission, is not the same as saying you can throw the transitional arrangements into a consideration of whether it's necessary to make the variation. You make the variation first based on the Modern Awards Objective and then you might apply a transitional arrangement to ameliorate the effect of that decision.

PN8147

VICE PRESIDENT HATCHER: But the problem is we won't know whether the award to which they would be moved would be appropriate without knowing what provisions, including transitional provisions, would apply to people if they were put into it.

PN8148

MR DOWLING: Well, you will know, assuming you adopt the hypothetical arrangement we are describing, which is that the award to be considered in the appropriateness test is the proposed amalgamated award. You know the terms and conditions of that award and that's all you need to know to decide whether it is an appropriate award for the purposes of revocating the Clubs Award. You might decide, well, it's - - -

PN8149

VICE PRESIDENT HATCHER: Well, that would be right if this is treated as a binary, yes/no exercise. But, even on that analysis, we have to take into account the transitional provisions opposed by the applicant in assessing whether the Hospitality Award is an appropriate award to which people could be moved.

PN8150

MR DOWLING: Well, it may be, your Honour, though it is not clear, it may be that the appropriate test would enable the transitional provisions to be included. We say, clearly, that the variation test under section 138, combined with section 156, does not enable you to throw in the transitional arrangements in determining whether to vary the award. But your Honour asks, as I understand it, maybe 'appropriate' does enable you to. We think, in our submission, it may, but it would not be the right approach.

PN8151

VICE PRESIDENT HATCHER: Right.

PN8152

MR DOWLING: Can I just then, in concluding on this part, identify in summary form the four ways that we say appropriate should be measured. The first we have discussed and I have identified and that is, are the terms of the different modern award better or worse? For the reasons I describe, it can't be intended that the safety net created by the modern award and the NES can be undermined if 'appropriate' allows you to reduce the terms and conditions in respect of those employees to be covered by the new award.

PN8153

The second is the question of grouping to which I referred in your Honour's hypothetical. Even though all the terms are carried over, if you're grouping them with a group that is completely unrelated to them, it might also be said to be not appropriate. Of course, we go back to what we said at the start. In the present circumstances, we now know that to group them in that way would be grouping 55 per cent of them that are not classified on the ANZSIC classifications, at least as hospitality clubs.

PN8154

The third, which operates in a slightly different way, is the question of the history of the modern award. That must be a relevant assessment in terms of 'appropriate', but perhaps it works a different way in the sense that you should have regard to the history of the award you're revoking before you determine to revoke it and make the new one as the appropriate award. If it is longstanding, long-accepted, it is much more likely that that award should be the appropriate one and should remain. That's the third.

PN8155

The fourth is, you have to assess 'appropriate' together with the Modern Awards Objectives for the reasons we described at the beginning or in the statutory principles. The only twist on that, your Honour, and other members of the Bench, is, 164 is directed only at the employees. So, when you're looking at the Modern Awards Objectives, you really should only be looking at those Modern Awards Objectives that are relevant to the employees. Most particularly, we will tell you 1341A and 1341DA. So, they are the four ways in which we say 'appropriate' should be approached.

PN8156

Can I then deal with the evidence? As I said, with a couple of exceptions, the way I'd like to deal with this is to identify where the relevant evidence is identify for the Bench the salient issues that we want you to take from the summary that we have provided in writing. So, this part of our written submissions commences at part C, paragraph 50. I do not need to trouble with the summary of the parties' cases we have identified. Most importantly, I want to take the Bench to paragraph 60 where it there deals with the evidence concerning, "The clubs and hospitality industries are not the same or very similar."

PN8157

The first two aspects of that evidence, we have dealt with when I took you out of order. The first being the industry profile, the second being HERRC. I don't need to trouble you with it. The third and last matter that we rely upon in support of that proposition that the two industries are not the same or similar is what we say commencing at paragraph 81 and running through to 83 is the retention by the applicant of the club specific award terms and conditions. That is an acknowledgment, in our submission, of the separateness of the industries. As we say at 81, Clubs NSW and the applicant expressly represented to its members - this is important - in various of its circulars both before and after the application was filed that in making the application it would, in its words, require the special award conditions that apply to clubs to be carried over into a separate chapter of the Hospitality Award and that it was a condition of the application that a separate clubs specific schedule be established within the Hospitality Award to cover clubs employees.

PN8158

We there refer to Mr Murray, Mr Addison and Mr Rees, all agreeing that it was important to preserve the clubs specific provisions, except for penalty rates, and it would not be in the interests of members to remove clubs specific provisions from the award. Mr Trimarchi stated that clubs and hotels are different and those differences should be maintained. So, that, in our submission, was all an acknowledgment of the separateness from the evidence of the applicant itself. That's as much as we need to say about that part.

PN8159

We there, from paragraph 84 to 89, deal with the history of the Clubs Award and I ask the Commission to note what we have defined as the nine differences and the Bench heard a deal about during the evidence set out at paragraph 88. But I don't propose to and don't want to take you through paragraphs 84 to 89, but can I just identify three things about the history that we say is relevant. As I said before in dealing with appropriateness, it goes to the appropriateness of any replacement award because it is undermined if the award that is being revoked is longstanding and supported by all the relevant parties.

PN8160

Secondly, it goes to whether the clubs themselves covered by the award see themselves as part of a separate industry and this is relevant to the exchange between your Honour, the Vice President, and my learned friend, Mr Dixon, in discussions about the objectors because those objectors showed, in our submission, that all of the objectors, the 140, 150 or so, want to retain the Clubs Award. There seemed to be a slight movement away this morning from what my learned friend said on Tuesday. But, in our submission, I can reliably say from what Ms Burke has told me who has read every one of the objections, that each of them identify that they oppose the application to revoke the award and they say they do not support the application to revoke the Clubs Award.

PN8161

It is clear that they are opposing the revocation of the Clubs Award and it's not right to say, as my learned friend does, that, "Well, because they refer to penalty rates, that means that's the only basis upon which they say it should be maintained." They are all categorically stating that they seek to maintain the Clubs Award and it can't be said, "Well, if penalty rates is referred to, that's the only reason they have." So, in our submission, those objectors make clear the intention by those 150-odd to maintain the Clubs Award consistent with the history of it being a separate award. Can I then move to the key features of the clubs industry from paragraphs 90 - - -

PN8162

VICE PRESIDENT HATCHER: Is that a convenient time to take a morning tea adjournment, Mr Dowling?

PN8163

MR DOWLING: It is, your Honour.

PN8164

VICE PRESIDENT HATCHER: Yes, we'll adjourn for approximately 10 minutes.

SHORT ADJOURNMENT [11.27 AM]

RESUMED [11.46 AM]

PN8165

VICE PRESIDENT HATCHER: Mr Dowling.

PN8166

MR DOWLING: Thank you, your Honour. Can I just return to one matter arising from a question your Honour, the Vice President, asked me. Your question was whether those clubs in the 4530 group, the hospitality group employed the majority of employees and my answer was, I just don't think we can reliably say. I was wrong about that. There are two documents that tell us the answer and they are the industry profile prepared by the Fair Work Commission and dated January of 2017, which appears within the applicant's common evidence bundle, read together with annexure NM1 to the statement of Mr Murray, witness of the applicant, which is exhibit 20. And the last of those, NM1 to the statement of Mr Murray, is the clubs census 2015.

PN8167

It tells us at page 17 that the head count in 2015, employment by head count, is 131,000 employees. That's of the total 6,400 clubs to which the census refers, there is 131,000 employees. The industry profile, the Commission document, tells us at table 5.1 at page 26, the total employment of the "Clubs (Hospitality)" is 50,000, or, to be more precise, 50,300.

PN8168

VICE PRESIDENT HATCHER: That's the grouping, what is it, 4530, is it?

PN8169

MR DOWLING: That's correct. That suggests the opposite of your Honour's proposition that, in fact, 38 per cent of the clubs in that group - sorry, the employees of the total clubs sector, 38 per cent of them are in the clubs hospitality 4530 group, meaning that - - -

PN8170

VICE PRESIDENT HATCHER: That's a head count number too?

PN8171

MR DOWLING: It's described as total employment. So, it appears to be so.

PN8172

VICE PRESIDENT HATCHER: Right.

PN8173

MR DOWLING: If all of that is right, that means that 45 per cent of the clubs sector employees 38 per cent of the total number of employees.

PN8174

VICE PRESIDENT HATCHER: Does that imply there is a document somewhere which sets out the numbers in each of the ANZSIC classes?

PN8175

MR DOWLING: I don't know the answer to that, your Honour, but I can tell you that the industry profile table that we're relying upon or that I have just referred the Bench to identifies as its source the ABS data, ABS labour force survey or the publication ABS Labour Force.

PN8176

VICE PRESIDENT HATCHER: I was going to ask you that. So, the ABS Labour Force data gives numbers aligning with ANZSIC classifications and categories?

PN8177

MR DOWLING: Well, that may be so. I'm not certain of that, your Honour, but certainly the way the Commission used it in their industry profile is to separate out the total employment in respect of the 4530 class. I should say if I didn't, only one issue between these two documents, the 131,000 head count is from the 2015 census, the 50,000 from the clubs hospitality 4530 is from August 2016. So, they don't align perfectly. Now, just to give the Bench some comfort, I am still confident that I'll be finished before lunch. I have a running order of the remaining respondents and, as I understand it, they're able to comply with their estimates.

PN8178

I was then at that point in the submissions starting on page 27, which is the key features of the, "Clubs industry by purpose workforce and governance." The purpose of this part of the submissions is to identify the distinctive features of the clubs industry as a demonstration of its uniqueness as an industry. I won't go through the submissions. They're set out at paragraph 90 to 116. Can I just identify four points by way of emphasis? They're set out in more detail in the submissions.

PN8179

Firstly, in respect of the key features of the industry, the context in which the work is performed is important. It's not, in our submission, enough to say a club serves food and drink, therefore, a club is hospitality. Of course, there are many other places where food and drink is served and the context has to be taken into account in assessing the industry. And you will see that at paragraph 91.

PN8180

The second point, there is, it seems to be accepted, a high number of casuals in the industry and we set that out at paragraph 107. That goes to the impact of the reduction on the businesses that the applicant says will be their financial distress will be ameliorated. It can't, in our submission, have it both ways and say, "Well, the impact of the reduction in penalty rates is not great because there aren't a great number of employees to whom it will apply." And at the same time say, "The reduction in penalty rates will ameliorate the financial distress of the business if there is not very many of them. The less there are, the less ameliorating effect it will have."

PN8181

The third point, questions were asked of Mr Dixon about the definition of financial distress. It seems to be accepted and we say is consistent with the submissions otherwise made by the applicant that the definition involves the EBITDARD measure - earnings before interest, taxes, depreciation, amortization, rent and donations - and that assets are not taken into account.

PN8182

We give as an example the Port Macquarie Golf Club. Mr Constable was called by the Port Macquarie Golf Club. He was its CEO. He said, "By the EBITDARD measure, we would be in financial distress, but we are not." So, caution needs to be exercised when just measuring it by EBITDARD. We have footnoted the source for it, but we tell you in our submissions that clubs own $4.6 billion in just land and facilities, not other assets, but just land and facilities. So, if that was to be taken into account, it will change dramatically what's said about financial distress.

PN8183

Can we say one last thing about the key features of the industry and this is with respect to the employees. We tell you in the submissions that over 68 per cent of the employees are over 25 and 25 per cent are aged between 45 and 64. Now, the relevance of that, in our submission, is if they are older, we say it's safe to conclude that they are likely to have greater financial commitments, more likely to be responsible for others, but also more likely to be longer-term employees and that was certainly true of Ms Kelly who was a 20-year employee in the sector, Ms Gorman, who had been in the sector for eight years, Mr Valenti, who had been the sector for 21 years, and Ms King for 23 years. So, these are not - - -

PN8184

VICE PRESIDENT HATCHER: Does evidence say that clubs are different from Hospitality Award employees in that respect, that there's a different demographic profile particularly by reference to age?

PN8185

MR DOWLING: Yes, I think. I'll confirm it for you, but the numbers of older workers, I think, are greater, but I make that submission with caution and I'll confirm it. We are, in this context making it in isolation of the comparison and saying this is a feature and when you're looking at the impact of the reduction, you should take account of that feature because this is not a transient student population, for example, that may work for six months and, therefore, the impact of the penalty rate reduction might be short-term or short-lived. If they are long-term older employees, the impact will be greater.

PN8186

Can I say one last thing about - and perhaps related to the question of financial distress. There was an exchange between your Honour, the Vice President, and Mr Dixon in respect of the acceptance by the applicant that it no longer relies on the evidence about - well, there is not any evidence about the employment effect. And the question your Honour asked was whether there is any evidence that anyone would retain their job as a result of the reduction in penalty rates.

PN8187

The only evidence that is sought to be relied upon in that respect is Ms Petri. Can we make two submissions about the caution that should be exercised with respect to Ms Petri's evidence. The first, her discussion about the potential retention of a job as the result of penalty rates was based on her hearsay account of her discussion with the general manager which was nothing other than speculation, firstly. Secondly, your Honour might recall that you put to Ms Petri and observed that she gave evidence in the casual and part-time employment case and in that case had given evidence that if that application was granted, she would employ more part-time employees and, in fact, she had not done that at all. She had just employed more casual employees.

PN8188

So, there's two reasons for caution. And that was directly put to her, I should say. One, it was really just speculation consistent with the balance of the applicant's case. It's really just speculation about what might happen. There is no solid reliable evidence that anyone will retain their job and there's nothing relied upon by the applicant that there will be any employment effect.

PN8189

That's the last thing that I want to say in respect of the key features of the club industry. Our submissions thereafter deal with the impact of the proposed revocation. And, again, I just want to identify the salient aspects rather than take you through the evidence. The evidence starts from paragraph 117. The first and most significant thing to note is that none of Ms Kelly, Ms Gorman, Mr Valenti, were cross-examined about any of their evidence about the impact of the cuts to penalty rates or the disutility of the weekend worker. And Ms King, the other evidence, wasn't cross-examined at all. None of them were cross-examined in any way about that impact or about that disutility. And, as I said at the start of today, there was an acceptance that as a result of this application, the employees in the clubs industry who are low paid will suffer significant detriment as the result of this application.

PN8190

A couple of other significant points. In terms of the economic loss, we say it should be accepted that in respect of these full-time and part-time employees, there is no opportunity to make up for the lost money. This is not as was seen in the penalty rates case where the large casual workforce and a suggestion by the employers that, "We will have more hours and, therefore, those employees may be able to work some additional hours." Albeit that we complain the consequence of that was you'd have to work more hours to earn the same. That's not the case here. These are - take a full-time employee working 38 hours, they will lose money and they will not have the opportunity to gain it. It is lost forever and so much was accepted by Ms Petri from the St George Leagues Club that an employee on 38 hours a week wouldn't get additional time. That would be overtime. It would be strange if you would cut penalty rates and then start giving them overtime. They would not be able to make up the loss.

PN8191

Two other responsive issues to submissions my learned friend made in respect of the impact. At paragraph 66(a) of its written submissions, the applicant suggests that the loss suffered by Ms Kelly, Ms Gorman, Ms King and Mr Valenti could be ameliorated by any transitional arrangements.

PN8192

Now, in our submission, that is not an appropriate submission. If it is to be suggested by the applicant that that impact could be ameliorated by the transitional provisions it should have been put to those witnesses, "Won't this be ameliorated if there's transitional provisions, in this kind of way?" They were not asked. It can't now be responsibly submitted, in our submission, that those transitional arrangements would ameliorate the impact that they gave evidence about.

PN8193

In any event, of course, we say, for reasons I said earlier today, the transitional arrangements can't be used to justify the reduction in the penalty rates. It should not be thrown into the mix if it's done, in your Honours' words, in a binary way and that is that the variation is looked at first. You do not incorporate the transitional arrangements in that step. So, in any event, that's not a sound proposition if approached properly, under the statutory principles.

PN8194

It was also said, at paragraph 66, this time 66(b), that the loss that Ms Kelly, Ms Gorman, Mr King and Mr Valenti gave evidence about could be ameliorated by the increase in any minimum wage levels. Again, none of them were asked about it. They were in the witness box, save Ms King who was not required, and could have been asked, "You get a minimum wage increase therefore that will ameliorate the evidence you've given." They were not asked about it, it was never put to any of them.

PN8195

Again, in any event, everybody gets that increase, as the result of the minimum wage and the suggestion put in the written submissions, but almost conceded, it seems to us, in the exchange between Hampton C, the Vice President and my learned friend Mr Dixon, it's not a sound proposition to say that the minimum wage in increase is, in some way, in compensation for reduction of the penalty rates. The Bench will find that exchange at PN 7838 to PN 7848.

PN8196

VICE PRESIDENT HATCHER: Mr Dowling, was there any material which set out the extent to which employees and the club industry are award dependent? That is, paid award rates as distinct from enterprise agreements and other arrangements? Perhaps I'll just leave out club managers from that equation, just the sort of workers which would fall in your client's coverage?

PN8197

MR DOWLING: Excuse me one moment, your Honour? Now, the short answer, I think, is no, your Honour, and we'll will confirm it, but there may be some material going to that proposition in the industry profile, but that will suffer from the problem that we've been highlighting about the industry profile that will only be with respect to that 45 per cent of them.

PN8198

Can I say one last thing about the question of impact of loss? It was submitted by CAI that the financial distress alleged to be suffered by the clubs can be reduced by a reduction in penalty rates. There is, in our submission, no evidence that will have that effect but, again, for the reasons I mentioned earlier, there's a touch of having it both ways there, because it's said the numbers are small, but it will still have that ameliorating effect on the financial distress.

PN8199

The last evidence, in respect of the impact of the proposed revocation is that that deals with the impact of weekend work. This was slightly separate to the financial impact. There was evidence from the employee witnesses, called on behalf of United Voice, about the significant deleterious effect of working on weekends. Can we just give the Bench a reference to that material, it's at paragraphs 135 to 134, and add one other important response and that is, it was submitted by the applicant that the disutility identified in the penalty rates case, in respect of that weekend work, should simply be applied across to the disutility, in respect of the Clubs Award.

PN8200

Can we say four things in response to that? Undoubtedly the principles make clear that you must determine each award separately and you can't simply apply across a finding in the Restaurants Award or the Hospitality Award, the only one that suffered a reduction in the hospitality group, to the Clubs Award. Indeed, that's consistent with what happened in the penalty rates case, of course, of the three Hospitality Awards, only one suffered a reduction. So it wasn't eh case that the Bench was satisfied, "Well, we're going to reduce it in the Hospitality award, therefore it will flow across." That's not the right way to do it.

PN8201

Two, the evidence just doesn't establish that. The applicant did not call evidence to say, "The disutility in respect of this group is the same as the disutility in respect of that group." They did not descend to that level of detail in evidence. Likewise, there was no cross-examination about it, "Your disutility is the same as anybody else's disutility." The four witnesses that gave evidence about the disutility were not cross-examined about it at all.

PN8202

And, lastly, the proposition is based on what we now say is the fundamental flaw, that all club employees are the same as all hospitality sector industry profile employees. For the reasons we've already identified, with respect to that industry profile, that is a proposition that is not sound. That's as much as we want to say about the impact, including financial and the significant deleterious effect.

PN8203

Can we then move to the question of competition and responding to what it is that the applicant says about the competitive disadvantage that it suffers? These submissions start of page 44, paragraph 135 of the written submissions of United Voice.

PN8204

Can I just repeat, albeit briefly, the six points we make, in respect of this competition issue? This question of how did it crystallise between 1 July and 28 July? Competition between clubs and hotels is not relevant to the modern awards objectives. In any event, the evidence doesn't establish the competition. In any event, the evidence doesn't establish any competitive disadvantage, as the result of the penalty rates. And, even if all of that was against us, the evidence doesn't establish that the reduction in penalty rates will ameliorate it. And, lastly, and I'll come to it in a little more detail, there's a significant competitive advantage.

PN8205

Can I say, consistent with all of those principles, that the witnesses called by CAI acknowledged that they had not conducted any calculations, study or assessment of the competitive features of clubs versus the competitive features of hotels. If there was such a competitive disadvantage there was no analysis of it. You might recall your Honour asked my learned friend, Mr Dixon, about whether there was any evidence of change in market share and my learned friend accepted that there was no such evidence and, I think, also went on to say, "Well, it's not possible to obtain it." Well, that's simply not right. What he meant was no effort had been made to obtain it. No one consulted a labour economist, nobody consulted - the industry profile itself deals with market share. Not to the level of disaggregation, but it identifies it can of course assess market share. You can look at supply, you can look at entry and exit rates. There are many and varied and not difficult ways to assess market share. None of it has been done and it is wrong to say it's not possible, but it is right to say no effort has been made to do it. So there is no evidence, at all, that the Commission can rely on to say there's been any movement in market share as a result of the differential in penalty rates.

PN8206

Ultimately, where we get to there's nothing that can satisfy the Commission that there's a competitive disadvantage, there's nothing to satisfy the Commission of the extent of the competition and there's nothing to satisfy the Commission that any competition that can be attributed to penalty rates would be ameliorated. For all those reasons that half, in fact that part of the premise just can't be made out.

PN8207

I mentioned that where there is a significant advantage is in the gambling dollar. It seems to be suggested, from the submissions, that really the concern of the applicant here is concern about the competition for the gambling dollar, rather than for the hospitality dollar. Indeed, in its written submissions from Tuesday, at paragraph 81(c), the applicant says:

PN8208

The key driver for financial success or distress, at least in New South Wales, is revenue from electronic gaming machines.

PN8209

So the applicant itself identifies the key driver for financial success, and that's revenue from electronic gaming machines.

PN8210

VICE PRESIDENT HATCHER: Sorry, what was that reference again?

PN8211

MR DOWLING: Paragraph 81(c) of the applicant's written submissions. I should add to that, an additional - - -

PN8212

VICE PRESIDENT HATCHER: Sorry, which submissions?

PN8213

MR DOWLING: The CAI written submissions of Tuesday of this week. I said 81(c), I should add to that paragraph 19(m).

PN8214

Can I identify, briefly and by reference to the witnesses called, who focused on New South Wales, ACT and Queensland? Mr Trimarchi for New South Wales? In respect of tax, clubs pay no tax on the first million dollars in gaming revenue, whereas hotels pay 33 per cent from $200,000 to a million. Clubs then pay 10 to 28 per cent on revenue between one and 20 and the hotels pay 36 per cent between one and five million and 50 per cent over five million. So a significant gaming tax advantage. Clubs in New South Wales have access to the grant scheme, so they can receive rebates if they pay more than a million dollars in gaming revenue and clubs in New South Wales have no maximum on the number of electronic gaming machines they're entitled to have on their premises, subject to the state cap on the total number of 99,000-odd, whereas hotels have a maximum of 30 machines in their premises.

PN8215

VICE PRESIDENT HATCHER: That's all New South Wales is permitted?

PN8216

MR DOWLING: That's New South Wales, Mr Trimarchi. ACT, Mr Rees, no gaming tax on revenue of $25,000 a month, and thereafter a sliding scale up to 23 per cent. Hotels pay 25.9 per cent flat rate gaming tax on the first dollar and thereafter. Likewise, in ACT, there's no limit on gaming machines in clubs and there's a maximum of 10 in hotels. Our written submissions will tell you, in terms of total gaming revenue in the ACT from gaming machines, clubs it was $168 million, hotels it was $400,000. All one way.

PN8217

In Queensland clubs, until recently, had an obligation to aggregate across venues, they now no longer have that obligation so if clubs run separate venues they can desegregate the gaming revenue, for tax purposes.

PN8218

Can I say one last thing about a competitive advantage, and we heard a deal about it, especially from Ms Petri. Clubs who are established on the principle of interest mutuality, which means that a club established for members can't derive income from itself, means that any income the club receives from its members it does not pay income tax on. I'll come to some figures for the St Leagues Club, but that, of course, the level of income tax paid by clubs is another extraordinary, we say, advantage rather than competitive disadvantage enjoyed.

PN8219

We know, from the memorandum of understanding reached in 2011, running through to the upcoming election, that those beneficial rates, in respect of New South Wales, are guaranteed by the current government and guaranteed to continue, should they be re-elected, under the current memorandum of understanding, which is in document 2 of the common evidence bundle.

PN8220

That's as much as we want to say about a summary of the evidence. Can we then take you to part D of the submissions, which deals with the application of the statutory principles?

PN8221

Firstly, given that some of it has been covered, I will just summarise it, the key evidentiary conclusions. The first, clubs and hospitality industry is not the same, based on four propositions. No reliable evidence that that is so. The industry profile is not reliable and the HERRC category is not reliable and fourthly, and lastly, the clubs themselves want to retain the specific clubs provisions, as an indicator of the separateness of the industry. They are the key propositions in respect of the two industries not being the same.

PN8222

The key proposition, in respect of the history is the maintenance of the separateness and the support of that separateness by the applicant in this case, up until this very application and it's attempt to reduce penalty rates.

PN8223

The key features, which we set out from paragraph 178, can I just direct you to four propositions, the differential purpose, in respect of social and community purpose, in respect of clubs, the variety of the work, as opposed to it being all hospitality services. As I indicated, the evidence of the PGA is that in respect of golf clubs it's an inconsistent add on, we raise that as an example of the unsoundness of a proposition of just suggesting that all clubs carry out hospitality services.

PN8224

The third proposition is the level of casual employment and the last proposition is really directed and the nine differences, the not-for-profit nature, the interest mutuality and those other considerations in the nine differences. They are the key findings in respect of the key features.

PN8225

The key evidentiary conclusions, in respect of the impact; the economic harm, there's no ability to offset it and the disutility of the weekend work that is not undermined. The competitive disadvantage, I've just dealt with it, so I won't repeat what I've had to say about those parts.

PN8226

Can I then move to the separate consideration of the modern awards objectives? We deal with this, this starts at paragraph 190, but can I preface it by saying this is relevant in two ways. Firstly, a consideration of whether it is necessary to vary the Hospitality Award. Secondly, insofar as you're looking at the appropriateness of the new award to the employees, you have to do so together with the modern awards objectives and those that impact on the employees, the two that I'll direct your attention to, are relevant in the same way, so they apply two-fold.

PN8227

We've identified for you, at paragraph 191, the criteria of the needs of the low paid. I've addressed you on the negative impact. What we say is the accepted, significant impact upon those employees that will not be regained and once lost is lost forever. That, we say, weighs heavily against any variation to reduce the penalty rates.

PN8228

We have identified, and I won't speak to them, each of those considerations that we way are neutral; collective bargaining and social inclusion and flexible work practices. We have then identified 174(1)(da) and, again, what we say is significant about the level of that disutility and the need to compensate for that level of disutility and the uncontested evidence about that disutility.

PN8229

I should, at that point, repeat what I said earlier, or at least cross-reference what I said earlier, about the inappropriateness of just applying the disutility concluded by the penalty rates case, in respect of the Hospitality Award, to the Clubs Award here and say, "Disutility is the same, they said so there, it's all simple." It is not. That is not appropriate, it is not consistent with the proper approach, in terms of assessing the disutility.

PN8230

Can I then, nextly, deal with what's said by the applicant or, at least, what was said by the applicant, in respect of 134(1)(e), equal remuneration for work of equal value? In its submissions of 14 June 2018, it's suggested that that criteria had some work to do because the work of clubs was practically synonymous with the work of employees under the Hospitality Award who were being paid different remuneration. It appears that submission may have been withdrawn, if it hasn't it should be. It's a preposterous submission. That criteria, 134(1)(e), is directed and defined that equal remuneration for men and women workers for work of equal or comparable value. The definition is in section 12, links to the definition in section 302. To suggest it has some application for work of equal value between the clubs sector and the hospitality sector is plain wrong, in our submission.

PN8231

134(1)(f) is that consideration that deals with the impact upon business, including the productivity, employment costs and the regulatory burden. It is directed at the likely impact. That must be, in our submission, something more than just speculation about the impact. We accept that there could be an impact upon employment costs by a reduction in the penalty rates but what we do not know anything about, as a result of the applicant's case, is the extent of that reduction in employment costs, we're told nothing about it. No one had formed a proper assessment, Ms Petri hadn't, the only one employer that came along, on behalf of the applicant, she had not performed any calculation nor, as we understand it, her accountant or general manager, about what the extent of that reduction in employment costs was. That remains as a potential only, as speculation only, on the applicant's case. There is no reliable evidence about the extent of that employment cost.

PN8232

Ms Petri being the only employer we have, you must weigh it against the organisation making $35 million in revenue each year and, in 2017, having retained profits of $48 million. So if it is the applicant wants to rely on the St George Leagues Club, you have to look at it in the context of their revenue and their retained profits. You can't be satisfied that that factor will, in any serous way, weigh against the harm done, in respect of 134(1)(a) and 134(1)(da).

PN8233

We then deal with the last two. 134(1)(g), simple and easy to understand, stable and sustainable. I repeat what I said earlier about if you're doing it in the binary way and you're doing it first, you're going to create a problem, under 134(1)(g), because you're going to be varying the Hospitality Award to create an overlap.

PN8234

Even if we're wrong about that, we do say - we accept the CAI have made submission against it, but we do say the resultant proposed amalgamated award could never be said to be simple and easy to understand. It's not to the point, as the applicant proposed in its cross-examination of the employer witnesses called by United Voice, that you could go and speak to the Fair Work Ombudsman, or you could go and speak to CAI, it should be simple and easy to understand, on it's face. What you have is a patchwork of, "This provision doesn't apply to these people. This sub-provision of this provision does apply to some but not others." As your Honour noted, on Tuesday, there's a provision that rules out some clubs employees, then club junior employees, then club junior office employees. There is an unwieldy patchwork of people excluded and included, in respect of each provision, and it could never be said that it is simple and easy to understand, as a result.

PN8235

The last consideration, that dealing with the impact of employment growth, inflation and the national economy. Can we just make this point, if it is not already abundantly clear, it is focused and directed at the competitiveness of the national economy and not and could never be and should never be directed at the competition between firms. It's not ACCC regulation, it's not designed to control competition between firms and it does not do so. So that does not enable the applicant to rely on competition between clubs and hotels.

PN8236

Can we then come to the four ways in which we address the appropriate test? At this point can I refer the Bench, please, to annexure A, only to explain it and perhaps draw out one or two brief examples? Can I say, as I said towards the outset of my submissions, that it must be, in our submission, that "appropriate" must be measured against whether you end up worse off. If you are giving "appropriate" a benefit or remedial meaning and making sure that it does all of the work that it's required to do to protect the modern awards, if employees are ending up worse off, as the result of the award that covers them, it cannot be appropriate for them.

PN8237

We put it in two ways, firstly we say they should not suffer any disadvantage at all, and you don't weigh it, they just should not suffer a disadvantage. If one clause provides a disadvantage that's enough. Alternatively, if the Commission is minded to weigh it, you can weigh the detriment versus the benefit. Now, significantly, those detriments that my learned friend accepted were, in fact, detriments he indicated could be weighed against the other beneficial provisions, in respect of those changes made post the hearings in July and that when you balanced those two things out perhaps you didn't have a detriment at all. But it seemed to us that what the applicant did not include in that weighing exercise was the penalty rates. If you're going to weigh you can't just weigh the changes post July, you've got to weigh those together with the reduction in penalty rates. In our submission, whether you do it the first way or the second way, a weighing exercise will result in the employees being worse off.

PN8238

Can I just identify the table and what it seeks to do? As I said at the outset, it sets out - it does not include those provisions that the parties agree are neutral. It only includes those that are identified as detrimental or beneficial and identifies the clause in proposed amalgamated award and references the clause in the Clubs Award, that's seeked to be revoked.

PN8239

What it then does is reference where the parties have made submissions about those particular awards. What you will find, as a neat way - if the Bench is desirous of trying to separate out the post July changes, and whether they create a detrimental or beneficial effect, you will note that in the submissions column each of those clauses that identify submissions, on 12 September and 15 August, can reliably be said to be those changes that are post the hearings.

PN8240

Can I just identify two of them? One resulted in a discussion, between my learned friend, Mr Dixon, and the Vice President, and that's the one found on the second page of the schedule, at clause 29.4 of the proposed amalgamated Hospitality Award, the make up time provision.

PN8241

Now, it seems to be said, by the applicant, that that is not a disadvantage because the individual flexibility provision, otherwise contained in the Hospitality Award, can be used. That, in our submission, is completely unrealistic. The types of circumstances that the make up time is contemplating is, "I need an hour off at the end of today because I've got to pick up my child from school earlier because there's been some incident. I'll make it up and I'll work an hour tomorrow."

PN8242

Now, what our learned friends say is that what you can then do, in those circumstances, is go to the trouble of setting out an agreement in writing that has notice provisions and notice obligations and has to comply with the obligations in the Act, in terms of individual flexibility, you can do all of that that evening and then give notice of the ability to terminate it the next day, in our submission, is completely unrealistic.

PN8243

VICE PRESIDENT HATCHER: One solution may be, if the awards were to be amalgamated, to give everybody access to the individual make up time provision if it's so beneficial.

PN8244

MR DOWLING: Yes. Well, that would overcome the detriment of that clause, undoubtedly.

PN8245

The other thing that should be said about the submission made is, at PN 7768, my learned friend said, "Well, there's no evidence that the make up time in the Hospitality Award, by virtue of the individual flexibility arrangement provisions, is not working." Now, in our submission, that is inappropriately reversing the obligation that the applicant has. The applicant doesn't get to come along, call no evidence at all about clause 29.4 and say, "Look, there's another provision that might do the work and there's no evidence called by the respondents to say that other provision doesn't do the work." The obligation is undoubtedly and clearly upon the applicant, if it wants a change, to call evidence about it.

PN8246

The other example I just direct the Bench to is that found in clause 25.1, the higher duties. I say that because it's identified in the table as a detriment and it is accepted by the applicant as a detriment, yet the only thing that's said in response to it is, "Well, it might be a detriment but it doesn't affect everybody so therefore that might be okay." Now that is, again, we say, not a sound way to approach the appropriate test.

PN8247

So we rely on the table. I won't take the Bench through each of the items in it, but we rely on it, insofar as this first way "appropriate" is approached, in terms of whether our employees are worse off.

PN8248

VICE PRESIDENT HATCHER: Is section 164B referrable only to those employees who are covered by the award immediately before revocation? It's not talking about future employees, it's talking about current employees. Do you accept that?

PN8249

MR DOWLING: I think that must be so, your Honour. You said "employees"

PN8250

VICE PRESIDENT HATCHER: "Employees," yes.

PN8251

MR DOWLING: Yes.

PN8252

The employees covered by the award are covered by a different award that is appropriate for them or will be so covered when the revocation comes into operation.

PN8253

So it seems to contemplate that it's not appropriate for those covered by it. Again, I don't think we can be satisfied that it it's said - we just don't know how many food and beverage grade 2 and 3 there are, so what the impact is, there's no evidence that there's nobody covered by those particular provisions. Again, keeping in mind, that it's the applicant that's the proponent for change, in respect of these changes. It doesn't call any evidence to say, "Well, you don't need to be worried about that one because there's nobody covered by it."

PN8254

VICE PRESIDENT HATCHER: In respect of penalty rates, does it follow that if there was a red circling arrangement, so that everybody employed as at the date of revocation maintained their existing penalty rates, that would necessarily, at least, satisfy the appropriateness test of 164B, would it not, on your analysis?

PN8255

MR DOWLING: Well, the best that could be said is that it might to some way to satisfying "appropriate" in terms of worse off for those employees.

PN8256

VICE PRESIDENT HATCHER: That's how you analysed it, wasn't it?

PN8257

MR DOWLING: Well, we analyse "appropriate" in four ways, remember? So what I meant by that is it only goes to that first approach to appropriateness. We have to accept that it's not abundantly clear whether it's just those employees, that is an open reading, we accept that. The Bench would have to remember, of course, that the purpose of the modern awards, read together with the NES, is to create a safety net, so one would expect that that's the safety net not just for current employees but for future employees. As I say, it's an open reading but it's one that would require some caution because we are talking about the establishment of a safety net for everyone.

PN8258

The second way we read "appropriate" is the question of whether they are disparate groups, and we've said as much about that as we need to say. We say, for the reasons we've already talked about, that they are not appropriately grouped together, taking into account the many and varied clubs and clubs employees. The 62 per cent that are not covered by that clubs/hospitality group who are not doing the hospitality work.

PN8259

The third way we direct the Bench to guidance about "appropriate" is the history of the Clubs Award, and we've talked about that. I don't need to repeat it. The last is in respect of the modern awards objective and we say, when reading "appropriate", together with the modern awards objective, you're only looking at, as I indicated earlier, those modern award objective considerations that are directed to the employees, because 165B is only directed to the employees and, therefore, relevantly, in our submission, you are only paying regard to 134(1)(a) and 134(1)(da) and, for the reasons we've already given about those considerations, they favour a conclusion that the Hospitality Award would not be appropriate.

PN8260

All of that, we say, means that the applicant, as the proponent for change, has not made out its application. It has not made out the requirement to vary the Clubs Award, consistent with the modern awards objectives, and has not made out a case for revoking the Clubs Award, creating, as the appropriate award, the Hospitality Award.

PN8261

We say the application is one built on speculation about the same industries and about some competitive disadvantage. There is no evidence about that competitive disadvantage that is reliable. Against that, what we can say, with certainty, because it is conceded by the applicant, is that there is a significant detriment to be suffered by low paid workers covered by the Clubs Award. They accept, as the result of its applications, Clubs Australia Industrial's application, as the result of it, low paid workers employed by the clubs sector will suffer a significant detriment as the result of the reduction in penalty rates.

PN8262

So that is the certainty that we know about, weighed against the speculation, unproven similarity an unproven competitive disadvantage. For all of those reasons, and those contained in our written submissions, we say the basis for the variation is not established, the basis for the revocation is not established and the application ought be dismissed.

PN8263

Unless there are any questions, they are the submissions of United Voice.

PN8264

Now, I said I would indicate the running order. I'm instructed that Mr Cooper, who has given us an estimate of 10 to 15 minutes, less than 10, my apologies, will be next, for the Clubs Managers Association of Australia, followed by Ms Crowe for the Professional Golfers Association, followed by Mr Arnold of Queensland RSL representative body, followed by Mr Ryan for the Australian Hotels Association, and Mr Duncalfe gets to go last on behalf of the AWU. That's the running order and we're still on track.

PN8265

VICE PRESIDENT HATCHER: Mr Cooper, can you make your submission before we adjourn for lunch?

PN8266

MR COOPER: Yes.

PN8267

VICE PRESIDENT HATCHER: All right, go ahead.

PN8268

MR COOPER: Thank you. The Clubs Managers Association has made several written applications during the process, I think about three. Whilst we focused on the particular needs of club managers and the career development aspects of that, the association adopts a very holistic approach to this.

PN8269

We support the submissions made by Mr Dowling, on behalf of United Voice. I think they're very well articulated in the statutory provisions of revoking the award and the relevance of our current Clubs Award meeting the modern awards objectives. But I make the point that today's club employee is tomorrow's manager. Our award is a perfect fit, it's not obsolete and it certainly allows for those developments to occur.

PN8270

So it's not merely union solidarity that were posed in the employer's application to revoke the award, the take the view that everyone should be granted that opportunity. We could simply suggest that of all the club managers' provision, in the Clubs Award, have been put into a merged document, whichever version we refer to.

PN8271

But I make the point, and the final point that United Voice is making, this is all about reducing penalty rates. Don't forge the club manager. There are club managers covered by the base rate, they're not all on the 20 or 50 per cent exemptions, under 17(3)(a)(i) or (ii). So there is, amongst the clubs out there, there are a very small percentage that sit on the base rate. They will be disadvantaged. They are what may be referred to as low paid club managers, sitting on a base rate.

PN8272

When you look at the 20 per cent exemption employees, typically your duty managers as such, they receive an exemption to overtime and penalty rates, generally, with the exception of public holiday penalty rates. So there's another larger group, within the club managers, who will be disadvantaged by the reduction in public holiday penalty rates.

PN8273

I make the observation, as well, that looking at the objections that have been filed, and I see that there's been a further objection lodged by the West Tradies Group, since Tuesday's proceedings, so that brings it up to 137. The association has monitored those to see where they're coming from and what they're stating. I'm very proud of our industry to say that the majority of these objections have come from the smaller to medium sized clubs, where the club chairman, in the main, or chair person, have signed, if you like, a proforma stating that they wish to maintain the penalty rates to preserve and look after their staff. That's the shorthand version.

PN8274

Now, the process in the club industry is that the club chairman, or chairperson, can't just sign off on that, they must go through their committee of management getting authorisation before they enter into that commitment, and that's my understanding they've done that. So you could categorise the 138 clubs, as I don't like the word "in stress", but they may be trading in a challenging environment for hospitality, with their club competing with a number of other people. But it's pleasing to see that they have put their community and the needs of their staff before those considerations.

PN8275

So it's not all about money for clubs, that's a distinct difference which we've made in our submissions, but it's all - a strong focus on their social obligations to their community and to their staff.

PN8276

So we also think the award, putting our conditions in the award, is not very appropriate, because none of the submissions made by CAI have addressed our concern about the two categories of managers under this new merged award. So you plonk, simply, the CMA conditions, or club managers' conditions in the award, and you forget about hotel managerial staff, which excludes, as we put in our submissions, quite a number of management positions which employees should be able to aspire, through educational opportunities, to take on those higher positions. You've got a group of managers which are strongly restricted by the merged award or the current Hospitality Award then you've got another group of managers coming in, which have open slather to opportunities to progress their careers. I think that's an inconsistency and it's inappropriate.

PN8277

We stand by the evidence we've given through our five witnesses. We tried to make the point of difference of those various types of clubs those managers were operating, whether they be a football club, a surf club or the Henry Sports Club, focusing on the theatrical side of things, and also the regulatory considerations, in the evidence provided by Allan Peter. I think there is a strong point of difference and we should maintain our current Clubs Award, so we argue strongly against the revoking of our award. Thank you very much.

PN8278

VICE PRESIDENT HATCHER: Thank you. Is the convenient course now for us to adjourn for lunch and then resume with you, Ms Crowe, at 2 pm? I think that's (indistinct). All right, we'll now adjourn.

LUNCHEON ADJOURNMENT [12.49 PM]

RESUMED [1.58 PM]

PN8279

VICE PRESIDENT HATCHER: Mr Dowling.

PN8280

MR DOWLING: Sorry, Vice President, with the leave, just one matter that I neglected to cross-reference in my submissions, are there a number of questions about red circling. I just wanted to be sure that the Commission was aware of the submissions made United Voice on red circling. They're contained in our submissions at paragraph 60 to 62 of 12 September 2018 and in Mr Genge's statement of exhibit 66 at paragraphs 11 to 12.

PN8281

I raise it because of the question about the potential adverse effect on present employees. Mr Genge talks about the prospect of disharmony and friction which would apply even to those presently covered and the submissions on behalf of United Voice talk about the possibility of those on the higher penalty rates being rostered less hours. So even in those circumstances it might be said with red circling, there might be some deleterious effect even on those presently covered.

PN8282

VICE PRESIDENT HATCHER: Perhaps I should have asked you earlier, has United Voice - and I know your position is we should do it as a separate stage if we made the decision to amalgamate the awards because do United Voice have any alternative submission to make about transitional provisions in the event that we did decide to amalgamate the awards?

PN8283

MR DOWLING: It hasn't made any to date because of that reason. It says what it should do is assess the changes so that it can then properly assess how it is that transitional arrangements might ameliorate any immediate impact. That it can't properly assess the immediate impact until it knows what the change is.

PN8284

VICE PRESIDENT HATCHER: Well, that's assuming it includes the penalty rate changes.

PN8285

MR DOWLING: Even if it doesn't that might be so, your Honour.

PN8286

VICE PRESIDENT HATCHER: The problem with that is that you're assuming you will get another opportunity.

PN8287

MR DOWLING: Yes. We had assumed that I think partly because that was the way the penalty rates case ran. If your Honour is telling us now we won't - - -

PN8288

VICE PRESIDENT HATCHER: Well, that's the reason we put out the statement.

PN8289

MR DOWLING: Yes.

PN8290

VICE PRESIDENT HATCHER: You might need to consider that.

PN8291

MR DOWLING: Thank you.

PN8292

VICE PRESIDENT HATCHER: Right, Ms Crowe, are you read to proceed?

PN8293

MS CROWE: Yes, your Honour.

PN8294

VICE PRESIDENT HATCHER: And again, if it's easier to remain seated, you may do so, but it's up to you.

PN8295

MS CROWE: It's fine, your Honour, we found a lectern, thank you very much. I'm happy to stand. PGA is the peak body for golf in Australia. We strongly believe that golf professionals do not work in the hospitality industry. The majority are employed by not for profit community based organisations whose central activity is to provide recreational facilities with people of a common interest to come together.

PN8296

Golf Australia, the national sporting organisation and governing body in Australia to be the same as the PGA. On the Golf Australia website under workforce management, the only award listed for the golf industry in Australia is the Registered and Licensed Clubs Award. These are the two major golf bodies in Australia.

PN8297

In 2018 Mr Stewart was asked about golf professionals being covered by the Hospitality Award. His answer was I don't know of any particular instances myself, personally. Since some further investigation and we can say that to our knowledge, virtually every registered golf club and most resort clubs in Australia have their employees covered by the Clubs Award.

PN8298

We rely on paragraph 12 that states the raw data from the salary survey of 726 PGA golf professionals, indicates that - - -

PN8299

VICE PRESIDENT HATCHER: Ms Crowe, can you just pause for a second, we're having trouble hearing you. Whether you sit down or stand up, you need to stay closer to the microphone. Also see if we can turn up the volume in Sydney.

PN8300

MS CROWE: I'll try sitting. Is that better, your Honour?

PN8301

VICE PRESIDENT HATCHER: Yes, that's much better.

PN8302

MS CROWE: Thank you.

PN8303

VICE PRESIDENT HATCHER: I would add Ms Crowe, that we've got your latest written submissions, so don't feel that you have to read them out.

PN8304

MS CROWE: Thank you very much, your Honour. I'll just move to item 6 then of our submissions. To our knowledge gathered from the data of the survey and other internal data, there are no golf professional employed under the Hospitality Industry Award in Australia. I'd like to just then address the penalty rates, your Honour and press our opposition to the proposed merger of the Clubs Award with the Hospitality Industry Award and the resulting reduction in penalty rates.

PN8305

The two - or job titles or roles that we're concerned about are the assistant professionals who are obviously the low income employees. Their based salary averaged annual income is $46,010 and in the employee teaching professionals. To provide context, for the Commission, there are about six different job titles spread across the golf industry. Directors of Golf and Golf Operations Managers are the roles with probably the highest income and they could be up to $110,000.

PN8306

But of these titles, the assistant professionals and the employees teaching professionals, the two lowest, they constitute 50 per cent of all of our golf professionals employed are in these two roles, the lowest income. We've also done some internal calculations and based on the average hours worked on a Saturday, Sunday and public holidays from the data, we have ascertained would probably be a six to seven per cent reduction in their annual basic salary. Considering these roles are already in the low income category, any reduction obviously to the low paid will have a significant effect on their livelihood.

PN8307

Your Honour, there was a lot spoke about in regards to our witnesses Mr Stewart and Mr Kirkman and running through a list of seven golf and resort courses and their varying facilities of accommodation, restaurants, day spas, tennis courts et cetera. This seemed to take a lot of time during the Full Bench. We've looked at the seven golf clubs that were mentioned by CIA during this hearing. One is definitely a resort course and they currently have an EBA and that is not the typical model as Mr Kirkman said; it's probably a declining market, a resort course rather than a growth area.

PN8308

Five are private and not for profit members clubs and one is a public course. The five private not for profit members clubs and the public course all come under the Registered and Licensed Clubs Award. Whilst they offer some facilities, catering facilities, we stand by the fact that we say that golf clubs cater for their members' social requirements before or after playing golf. That is their core function.

PN8309

I now move on to clause 18 where we talk about the amount of golf clubs that have onsite accommodation and I think it's relevant to note that there's only 3.6 per cent of golf clubs in Australia that do have any form of accommodation. As to the add-on, restaurants being an add-on to a golf course, restaurants and bistros in a golf club are located in a clubhouse.

PN8310

They cater for golfers and they are not walk off the street restaurants available to the general public. We feel that this is a huge difference between the two awards. In fact, the majority of golf clubs register a net loss on their food and beverage operations. This includes the larger private clubs, as it's not their core business.

PN8311

I'd like to talk now about the financial distress and the KPMG census. The KPMG census information being relied on by CAI does not make a distinction between clubs that have had a professional work force, employees whose clubs that are run by volunteers with respect to financial distress. Without this information it's not possible to determine the link between employee wage rates and financial distress.

PN8312

Due to the large number of golf clubs in Australia run by volunteers, it is possible that the majority of clubs in financial distress are volunteer run in regional areas and therefore are referenced to the link between financial distress and employee wage rates and awards is not applicable.

PN8313

Following on from this, the concept of golf clubs being in financial distress or serious distress has been raised in support of the proposed reduction in penalty rates. The financial viability of clubs in Australia has actually improved since 2011. Overall, the number of clubs in a flourishing or solid financial position has increased by 27 per cent in 2011 to 36 per cent in 2015 which clearly demonstrates that relying on the KPMG census, clubs are not in the financial distress as is made out to be.

PN8314

I'd just like to talk a little bit about Mr Mossman's testimony and witness statement. Mr Mossman stated in his witness statement that approximately half of the golf clubs in New South Wales are in financial distress. The majority of these golf clubs in financial distress are in regional New South Wales, but a number of the clubs are also in metropolitan Sydney. We rely on Mr Kirkman's testimony - and I won't read that now - but in relation to the concept of financial distress in golf clubs, the 2016 Golf Victoria Annual Report, indicated a number of clubs in the state increased from 412 to 414, showing that golf clubs in this state are financially viable with their current business model.

PN8315

I'll now move on to the PGA golf professionals and to Mr Mossman's statement again. Mr Mossman stated that he was not aware of any golf professionals actually being employed by golf clubs in regional New South Wales. From his experience of his direct dealing with golf clubs, through their members' enquiries centre for discussion with member services officers in Clubs New South Wales that he visited.

PN8316

He also stated that as part of his trips, he visits golf clubs like Meriwether, for example. But also has consulted with two employees that visit every club in New South Wales. He speaks to them and gets information about the state of golf clubs in relation to each of the clubs they visit. This includes metro and regional, so it's 94 per cent of clubs in New South Wales that they have visited or know about.

PN8317

The PGA's evidence and I've attached a spreadsheet for you to view of golf professionals employed at regional clubs in New South Wales, shows that there are in fact, as Mr Mossman says there are none - there are currently 252 employed PGA professionals at regional clubs in New South Wales. It also shows that clubs that Mr Mossman personally visited and referred to in his testimony Meriwether, has two PGA assistant professionals and one head professional.

PN8318

The head professional has been there for more than 20 years and the assistant professionals, one has been there for 10 years. So we're just not quite sure about that testimony. It was also stated by Mr Mossman that it was not possible that 40 per cent of golfing professionals' annual income is derived from penalty rates and he strongly suspected that either the golfing professionals would be either subcontracted or given annual salaries.

PN8319

We have relied on our data and our facts that 40 per cent of their income is derived from working on weekends and public holidays and I think this was supported by Port Macquarie Golf Club when they testified that Saturdays and Sundays and public holidays are the busiest days for a golf club in the end. We also say it was alleged that 67 per cent of golf professionals in Australia were working as contractors. We rely again on our statement of Mr Stewart of 7 September that actually shows that 70 to 72 per cent of professionals are employed and roughly 28 to 30 per cent are contracted.

PN8320

Your Honour, in closing I'd just like to give you a brief position of the PGA. The PGA believes that the only reason to merge two awards would be if one of them became irrelevant by not meeting the modern award objective or overlapping another. We do not believe this applies in this case. Modern awards apply to the industry in which the (indistinct) operates and in which the employee is employed. We believe that golf professionals work in the community-based clubs' industry.

PN8321

We also believe it is about meeting the modern award objectives in providing additional remuneration to those employees who are required to give up spending weekends and public holidays away from their family and friends. The PGA has based their submissions on facts and evidence produced from current internal data, surveys and expertise in understanding the landscape of the Australian Golf industry.

PN8322

We do not provide any hospitality training or qualifications via the trainee program or accreditation and continuing education as we consider hospitality irrelevant to a successful career as a PGA professional. Our submissions are made on behalf of our low income members that must live with the impact of a six per cent decrease in reduced production in penalty rates should this application be successful. This will have a significant impact on their livelihoods.

PN8323

Regional communities rely on their sporting clubs like cricket, bowls and golf for the local community and also to attract tourism. In fact, many travel to areas like King Island just to play golf. We acknowledge that most regional golf clubs run on the smell of an oily rag and are managed by volunteers.

PN8324

However, without golf professionals at these regional clubs, teaching juniors, the clubs would potentially struggle even more than they are currently. This view appears to be supported by the volume of opposition submissions to the merged award on the Commission's own website from mostly small regional sporting clubs spread across Australia.

PN8325

Our submissions in opposition to the merger is regardless of the number of golf professionals that this will impact, even though that probably is significant. It is about ensuring a simple, easy to understanding relevant, stable and sustainable award for a not for profit industry which is in total contrast to the commercial for profit coverage of the hospitality industry award. Thank you.

PN8326

VICE PRESIDENT HATCHER: Thank you Ms Crowe.

PN8327

MS CROWE: Thank you, your Honour.

PN8328

VICE PRESIDENT HATCHER: Mr Arnold, are you next?

PN8329

MR ARNOLD: Yes, thank you your Honour. In relation to these submissions that we give today, we rely upon our outline of submissions filed on 10 May 2018 and we wish to extrapolate upon those submissions. Further, we find ourselves in the rather unusual circumstance where we fundamentally support the submissions of United Voice, the AWU and the CMA and the PGA.

PN8330

We firstly turn to the issue of the industry support of this application. It is out fundamental submission that there is not general industry support for this application. We further submit that there was scant consultation by Clubs Australia industrial with its members prior to taking this path and making this application.

PN8331

The fact that nearly 140 clubs, notwithstanding the 65 members of my client, have made submissions in opposition to this application, must give some clear indication that there is not broad industry support for this application. Whilst many of these submissions are in the form of a template, the proforma, there are also submissions for a number of clubs, in some cases large and significant clubs throughout the country, that have provided more detailed submissions and more detailed articulation of their opposition to this application.

PN8332

Notwithstanding that, notwithstanding that there are many template submissions, the fact that these clubs that provided these types of submissions, it's important to recognise that the boards of these clubs as indicated by Mr Cooper, have taken the time to consider the application and file these submissions, and that is significant.

PN8333

It is significant in itself to indicate that there's sufficient opposition to this application within the clubs industry. In stark contrast the applicant has provided little or no evidence of clubs that support this application, save and accept for the hand full of those who gave evidence for the applicant.

PN8334

In respect to consultation by the applicant, with its members regarding the perusal of this claim, there is evidence which is patently clear from the evidence of Mr Mossman from Clubs Australia Industrial, that there was little or not consultation with its members prior to pursuing this application. It's the evidence of Mr Wright from Greenbank RSL that he is not aware of any consultation by Clubs Australia Industrial or Clubs Queensland, any clubs in Queensland consulted by Clubs Australia Industrial to make this application. This is uncontested.

PN8335

Tellingly, from the two largest clubs, we were not consulted about this. Greenbank RSL is one of the largest clubs in Queensland; it was not consulted. Probably the largest club in Queensland (indistinct) is a member of Clubs Queensland, but is also a member of the RSL's Association. The evidence would suggest that club was not consulted, even though it was probable the largest.

PN8336

Further if we look through the submissions that have been made so far, we find a club like West (indistinct) Leagues Club which is the largest club in the New England area, which was not consulted and it was in pole position. The Casino RSM Club (indistinct) New South Wales. Where it appears that Mr Genge - there was no consultation, is in opposition to the application.

PN8337

Kingscliff Beach Bowls Club, another significant club in northern New South Wales that was not consulted. The general manager there who was a significant figure in the club industry in northern New South Wales indicates in his submission that there was no consultation with clubs in northern New South Wales. Similarly, we had the same sort of situation with (indistinct).

PN8338

In respect to the award, we make the following submissions. In 2009 the Commission of the Australian Industrial Relations Commission as it was then constituted decided to make a modern award specifically to cover the club industry in Australia that is the Registered and Licensed Clubs Award. In that case, Clubs Australia Industrial strongly advocated the need for a separate and discrete Clubs Award, during the award modernisation process and Clubs Australia Industrial submitted that the club industry was a separate and distinct industry from the hospitality industry and provided a number of grounds to support this claim.

PN8339

These grounds were persuasive. They included the different characteristics of the industry, the difference in trading operations between the sectors, the differences in the types of employees between the industry sectors, including the inclusion of maintenance and horticultural and managerial staff in the award coverage.

PN8340

We submit that the Commission accepted the industry view at the time, that differences existed between the club industry and other hospitality industry sectors and warranted the making of a distinct and separate modern award for the club industry. We submit that there has been nothing that has occurred and there's been no evidence to suggest that has occurred in the relevant industry sectors since 2009 that would warrant a departure from that long-held view that the club industry and the industry sectors are distinct and different and require separate award coverage.

PN8341

In that respect, we make reference to section 164 of the Act and we submit that there is absolutely no evidence to suggest that the Clubs Award is not obsolete or is obsolete. It's an award that is a viable and relevant instrument for the club industry and there's nothing to suggest that the club industry award is no longer capable of operating and is an award that suits the industry and should be retained and not revoked.

PN8342

In respect to the amalgamation of the award with the Hospitality Award, we respectfully submit that such an amalgamated award will result in a complex award. It will be an instrument that is more difficult to understand. It will be difficult to properly interpret and could result in costly mistakes for employers. The proposed amalgamated award runs contrary to the modern award objectives insofar, in particular section 1341(g) where the modern award objectives states that there is a need to ensure a simple and easy to understand, stable and sustainable modern award system.

PN8343

It is our submission that the proposed award is not simple or easy to understand. There are eleven clauses in the proposed award that contain specific and distinct provisions for clubs as opposed to other than clubs provisions. Importantly, these clauses are critical clauses in the award, for example, allowances, salary arrangements, rates, penalty rates, overtime and annual leave.

PN8344

We submit that the complex nature of the proposed award leaves employers, in particular lay persons, exposed to costly mistakes and misinterpretation in terms of pay and conditions. Importantly, the proposed award is not simple and it's not easy to understand and therefore fails the modern award objective in that respect.

PN8345

Finally, and in summary, the submissions of my client are that this application should be dismissed because the current Registered and Licensed Clubs Award 2010 has served the industry well for the past eight years or so. It is not moribund and it's not obsolete. There is not broad industry support for the revocation of this award. There is not broad industry support for the club industry to be covered by the Hospitality General Award 2010.

PN8346

The incorporation of the Club Industry Award provisions into the Hospitality Award, in our view will make the award or the amalgamated award more complex. In turn, this will make the Hospitality Award more difficult to properly interpret and therefore may result in costly mistakes for employers and does not meet the award modernisation objectives.

PN8347

The resultant reduction in penalty rates is not supported by the members of the association, rather, it is the current position of the members of this association to maintain the current level of penalty rates. It is the view of the members of this association that the current levels of penalty rates provided a level of competitiveness over other hospitality sectors which makes it easier to attract quality staff.

PN8348

It's the view of the members of this association that the current existence of the Registered and Licensed Clubs Award and the parties to the award are the masters of their own destiny, meaning that they have a level of control over the terms and conditions of employment in the industry and hold the fear that if the application is successful that this may not be the case and that the terms and conditions of employment in the club industry may be influenced and impacted like other hospitality industry bodies.

PN8349

Those are the submissions of the Registered and Licensed Clubs Association of Queensland, if the Commission pleases.

PN8350

VICE PRESIDENT HATCHER: Thank you Mr Arnold. Mr Ryan, are you next?

PN8351

MR RYAN: Yes, your Honour.

PN8352

MS CROWE: Do you mind if we are excused from Melbourne?

PN8353

VICE PRESIDENT HATCHER: Yes, you're excused Ms Crowe.

PN8354

MS CROWE: Thank you.

PN8355

MR RYAN: Your Honour and Commissioners, we wish to address you on two points this afternoon. Firstly, the managers and in response to the statement issued by the Full Bench, and secondly, annexure A to the submissions filed on 11 May by the AHA and the accommodation associations.

PN8356

Before I do so, the submissions that we filed in these proceedings, there was a preliminary set of submissions filed on 11 May. That included annexure A which was a marked-up version of the Hospitality Industry Award and there was a second set of submissions filed on 12 September.

PN8357

In relation to this first round of submissions, just to touch briefly on them, they addressed the modern award's objective and proponents of change, the association's position in response to the application. Also, by way of perhaps signposting, just pointed out that in the context of these proceedings the Hospitality Industry Award is till currently subject to other proceedings being conducted as part of this four yearly review.

PN8358

These include the annualised salaries provision, noting that both the awards being considered in the context of these proceedings, contain annualised salary arrangements, the group for substantive issues which will be listed for hearing later this month and the plain language drafting exercise. In relation to the submissions filed on 12 September, they dealt with our response to some matters addressed in the amended proposed award filed on 13 July and also dealt with our response to the statement of the Full Bench issued in July as well.

PN8359

I'll now turn to our response first, because our response to the statement really dealt with one aspect or one issue raised by the Full Bench and that was should the system of classification of the working hours arrangements for club managers under the present Clubs Award be considered more broadly for establishments currently covered by the Hospitality Award. In our submission to do so, would be in breach of the Act because the Act says in essence, that a modern award must not contain provisions or coverage terms which cover people who, because of their seniority or have traditionally been award free. Secondly, when that's combined with 164, the constraint in 164 is that if you do revoke the Clubs Award, you have to ensure that anyone currently covered by that award is covered by another award.

PN8360

So, in summary the combined effect of those two provisions of the Commission must not - sorry, I'll withdraw that. The Commission must not cover the uncovered and it can't uncover the covered. There is a difference in award coverage provisions dealing with the Clubs Award and there is even an internal difference in the extent of award coverage. We set that out in the extent of award coverage at the high end in the Hospitality Award.

PN8361

We set that out in our submissions of 12 September. We call that the first limitation is that the managerial staff hotels classification, does not apply to all establishments currently covered by the Hospitality Award, it covers a subset and that's been recognised by this Tribunal, by the Federal Circuit Court and the Federal Courts. We've summarised or pointed out in that paragraph a range of decisions which have recognised that.

PN8362

The most recent decision, your Honour, Commissioners, was handed down by the Federal Circuit Court in between the hearings in July and the hearings this week. That is the Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors (No 2). It cited and applied the rationale of the Federal Court in the subsequent two cases cited there, Johnson v Monti-Haitsma Enterprises Pty Ltd.

PN8363

The second limitation is that even in the Managerial Staff Hotels' classification it doesn't go right up to venue or general manager within the hotels and licensed retail establishments to which that classification applies. We've referred to a number of cases there. Fair Work Ombudsman v Glasshouse Mountains Tavern Pty Ltd & Anor, (indistinct) Reserve Hotels, and Staples v Omnibell.

PN8364

In essence, and I must say, sorry your Honour and Commissioners, the limitation or the restriction in 143(7) has been described by this Tribunal as a statutory injunction. That arose in a case involving the Banking, Finance and Insurance Award. The citation is (2013) FWC 5482 at paragraph 24 where his Honour, Smith DP described the restriction as a statutory injunction.

PN8365

So, in summary we say that you cannot uncover the covered manager classifications in the Clubs Award if you were to merge them, and you can't cover the presently uncovered employees that operate in the hospitality industry.

PN8366

In terms of what's been said about careers and career progression development, nothing in the modern awards objective requires that. Anecdotally I can submit that that happens. I think it was put that today's employee is tomorrow's club manager. In the pub, bars and tavern sector of the industry, it's perhaps more accurate to say that yesterday's employee is today's supervisor or manager, is tomorrow's owner. Many owners of businesses - - -

PN8367

VICE PRESIDENT HATCHER: Or tomorrow's lawyer.

PN8368

MR RYAN: Yes, but many owners of bars and pubs started out washing dishes, running drinks and worked their way up and now they're owners of establishments. In the accommodation side of the sector, there's hotel skills all over the place. Sydney, Melbourne, Adelaide has a branch of a hotel skill based on the Swiss Hotel School in Europe. So that happens and it's not necessary to include that in the award.

PN8369

Turning to annexure A, and if it is the case that the Tribunal determines to merge the awards, we address the proposed merged award as put in our submissions from paragraph 21 onwards. That's the submissions dated 11 May. The first matter we pick up - - -

PN8370

VICE PRESIDENT HATCHER: You haven't addressed the latest version.

PN8371

MR RYAN: We've addressed the latest version, we've made some submissions about it in our submissions dated 12 September.

PN8372

VICE PRESIDENT HATCHER: That's the 13 July version.

PN8373

MR RYAN: We haven't addressed the latest - the distinction between the 13 July version and the 26 September version, my understanding is that it relates to two classifications, subject to the further amendments that were made.

PN8374

VICE PRESIDENT HATCHER: Right, so all those submissions are relevant to the latest version, are they?

PN8375

MR RYAN: Yes. Well, some of them fall away.

PN8376

VICE PRESIDENT HATCHER: Right.

PN8377

MR RYAN: I can deal with some of the aspects of annexure A that fall away as a result of submissions that were made by Clubs Australia Industrial. But I should say at the outset, your Honour, if it was the case that a proposed merged award was made, our approach is that it should include the provision for a draft determination to be issued and parties have the opportunity to respond to that. I've heard what your Honour has said about transitional arrangements; we're not seeking to disturb that. But if a draft determination was issued, there should be an opportunity to respond to that draft determination which will settle some of the drafting issues and the various forms of the award and responses that have been provided.

PN8378

In turning to annexure A, dealing with the coverage, we note that the coverage - this is on page 8 of annexure A. It simply needs to say that the Clubs Award or the coverage of the hospitality industry just includes clubs. Clubs are defined in the definition. There is an extra tail to that in the current Clubs Award about any work in or in connection with clubs. If that was to be included, I don't think it would disturb the arrangements and noting that the current coverage clause in the Hospitality Award is to be varied through the plain language common issue, we don't see that that can't be accommodated in that list, in that revised award.

PN8379

In terms of some of the other matters, I won't labour on all of them. But things such as in annexure A, forklift driver, broken periods, obviously they fall away. But in our submission, the bulk of the matters that pertain to clubs should be dealt with in an annexure or schedule at the back of the award. That will ensure that there's not inadvertent misapplication by the user. You have to bear in mind, that this award is currently in operation.

PN8380

There are a range of businesses and employers that are covered by this award. It ranges from caravan parks, small bars, pubs, right through to casinos. Some of these clauses are proposed to push down the actual provisions which apply to all those other employers across the country and insert the clubs one in lieu. For a small business user that's reading that, they're going to be confused. They might read the first couple of lines, realise it's for a club and move onto something else, or not even apply that relevant provision through confusion or misunderstanding.

PN8381

In our submission, the club specific matter should be dealt with in a schedule. In terms of linking the schedule back to the main body of the award, you can do so, and as we've set out a possible way of doing it in 4.1 with the coverage that it will cover the hospitality industry and those in the classifications in schedule D and schedule L which are specific provisions for clubs. We also refer to schedule L in clause 18, work organisation, talking about different streams containing classification definitions in D and L.

PN8382

In terms of the classifications and minimum wages, similarly to what's done with casino gaming classifications in the current clause 20.3, the club specific classifications could be dealt with in a proposed clause 20.4. Then at the beginning of schedule L - and this wording might need finessing, but we say that the specific provision in respect of clubs in this schedule operate sort of the general provisions in the award where provision is scheduled conflicts with the provision of this award, the provision as scheduled shall prevail, or something to that effect.

PN8383

But in our view, or in our submission, having the club specific matters dealt with in a club specific schedule, would remove a lot of the cumbersomeness and complexity and risk of misapplication, misinterpretation that is currently a feature of the proposed merged award. Adopting that clause wouldn't be inconsistent with what was proposed by the penalty rates Full Bench that club specific matters be dealt with in a club specific schedule.

PN8384

Two final points, your Honour and Commissioners. I note make-up time has been subject to some discussion over the past few days. At page 39 of our annexure A, filed on 11 May, we actually adopted the clubs version. That's in our view, more convenient, less administratively burdensome. But it was also done from the view of making it dovetail and be more consistent with section 65 of the Fair Work Act, that is, if someone had a flexible working request, this was in essence, somewhat consistent with, or you could make urgent ones using the example my learned friend Mr Dowling used earlier today about someone staying back late at work, being able to facilitate an urgent request at short notice.

PN8385

The other matter was the matter that arose in terms of the classification of level 5 food and beverage and gaming attendants. That wasn't responded to in our submission of 12 September. That was understandable, because it was inadvertently omitted from the 13 July draft. Those definitions were provided to the Commission on 26 September. On that version of the award, the Clubs Australian Industrial Award 26 September, page 76, includes a classification as a food and beverage and gaming attendant, grade 5. It has three limbs to it, A, B and C. The current provision in the Hospitality Award is food and beverage supervisor and its limb C. Limb A will only apply to clubs and limb B is written in a way that would extend it beyond clubs. It's not limited to clubs.

PN8386

In our view, the food and beverage grade 5 classification in a proposed merged award should stay as is and if limbs A and B might have incorporated to accommodate those classifications which are quite specific, that could be given a specific name such as club gaming attendant grade 5 and provided in a club specific schedule.

PN8387

Unless there's anything further, your Honour and Commissioners, they're the submissions of the AHA.

PN8388

VICE PRESIDENT HATCHER: Mr Ryan, the applicant has run its case on the basis that the club sector competes with the hospitality sector. From your client's perspective, does it have any interest whatsoever in what penalty rates club employers pay to their employees on weekends?

PN8389

MR RYAN: Any interest?

PN8390

VICE PRESIDENT HATCHER: Any interest? That is, does it matter?

PN8391

MR RYAN: Our interest would be as far as we deal with that in our submissions of 11 May. We set this out, it starts at page 4, paragraph 11 and we deal specifically with the transition from page 5 in paragraph 17. If the Full Bench says there is to be some sort of transition, we certainly say that there should be a merit case met that there was a finding by the Full Bench that they hadn't had a merit case and there's nothing unremarkable about that in the context of this review.

PN8392

But if they meet their case and we're not going to say well we don't make a submission on whether they do or they don't, then the appropriate transitional or other arrangements that the Full Bench considers appropriate, should be implemented. Thank you.

PN8393

VICE PRESIDENT HATCHER: Thank you. All right, Mr Duncalfe?

PN8394

MR DUNCALFE: Thank you, your Honour. I'll firstly address the AWU relies on its submissions filed in opposition to this application to date, insofar as they are still relevant. Those submissions are dated 25 September 2017, 18 May 2018 and 13 September 2018.

PN8395

I make mention, I qualify the reliance on those submissions, based on the fact that the application by Club Australia Industrial has been amended numerous times and so some of the submissions that we've made previously no longer apply, such as the maintenance and horticultural employees. The clause introduced to allow - well proposed to be introduced to allow employers to agree with maintenance and horticultural employees to work ordinary hours on the weekends. So obviously, they do not apply any longer.

PN8396

I also have written closing submissions which I have copies for each member of the Bench and also for Club Australia Industrial. As the submissions of United Voice were very thorough and traverse a lot of the same ground as our own submissions, I won't labour on all of the points. Suffice to say that the Australian Workers Union supports and adopts the United Voice submissions that have been made throughout this matter.

PN8397

In our opposition to this application by Clubs Australia Industrial, I'd just like to take you through a few key points that we believe should be in the forefront before any decision is made on this application. We'd first like to just clarify the coverage that the AWU has in the club sector. It's well established that we do have national coverage of what is the term maintenance and horticultural employees under the award.

PN8398

But also in Queensland outside of south east Queensland, the AWU actually has industry coverage of clubs and therefore can cover a multitude of occupations within clubs. Our interest in this application is not just on behalf of the maintenance and horticultural employees, but also on behalf of all employees, effectively all employees in clubs in Queensland outside the south east region.

PN8399

At its base, this application is - it's not controversial to state that this application is made with the intent to reduce penalty rates payable to permanent employees in the clubs industry on weekends and public holidays. Clubs Australia Industrial has shown throughout this matter that it merely seeks the path of least resistance to achieve this goal. This is specifically shown by Clubs Australia Industrial's numerous amendments to its application. In our submission this shows a preference for ease over actually establishing a merit case to achieve the changes that it's seeking.

PN8400

The AWU submits that Clubs Australia Industrial has completely failed to establish that the amendments it proposes, are consistent with the legislative requirements that apply to this application. Significantly, that includes that the proposed amendments are necessary to achieve the modern award's objective. Clubs Australia Industrial has failed to present convincing evidence in support of its proposed amendments and has instead dedicated the bulk of its submissions to attempting to convince the Commission of any potential similarities between the clubs industry and the hospitality industry and not of the necessity of the amendment it seeks in order to achieve the modern awards objective.

PN8401

The Australian Workers Union further submits that Clubs Australia Industrial has failed to establish a merit case to justify the changes it seeks. Clubs Australia Industrial is proposing that one modern award be revoked, another modern award significantly amended and the rates payable to the permanent employees of an entire sector for working on Saturdays, Sundays and public holidays be reduced. The applicant's reliance on assertions of competition between clubs, pubs, restaurants and casinos and that some roles in clubs and venues covered by the Hospitality Award are similar, to not amount to an acceptable merit argument, nor a justification for such a significant proposal.

PN8402

In pointing to the key elements of the case put forward by Clubs Australia Industrial and in the submission of the Australian Workers Union where it has met significant failure, I'll turn first to the applicable legislative framework. As mentioned by United Voice, the content of section 134(2) of the Fair Work Act, states as follows:

PN8403

The modern award's objective applies to the performance or exercise of the Fair Work Commission's modern award powers which are:

PN8404

The functions or powers under this part and

PN8405

The Fair Work Commissions functions and powers under part 2(6) so far as they relate to modern award minimum wages.

PN8406

By virtue of this clause the modern award's objective must be met in an application to vary an award under section 156 and section 157 and revoking a modern award under 164. Both of these are elements of Clubs Australia Industrial application.

PN8407

Accordingly, it's our submission that Clubs Australia Industrial's proposals to vary the Hospitality Award and revoke the Clubs Award, must both meet the modern award's objective and also must include terms only to the extent necessary to achieve the modern award's objective as by virtue of section 138. We don't think it's controversial to state that the modern award's objective is a central consideration to this application.

PN8408

Despite this, Clubs Australia Industrial has dedicated very little of its submissions throughout this matter to engaging with the modern award's objective and even less to establishing those proposal as necessary to achieve the modern award's objective. In our submission, Clubs Australia Industrial has failed to establish that the Hospitality Award does not meet the modern award's objective and therefore requires these proposed amendments to be able to achieve that. Equally, it's our submission that Clubs Australia Industrial has also failed to establish the same for the Clubs Award.

PN8409

In speaking about the modern award's objective, I'd just like to touch on two of the considerations listed at section 134(1). I won't go through them all; we all know them well. Section 134(1)(a) deals with the relative living standards and the needs of the low paid. According to the definition of low paid, that has continuously utilised by the expert panel in the annual wage review, the majority of award-reliant workers in the clubs industry are low paid. As a central feature of the Clubs Australia Industrial application is the proposed reduction in the rates payable to employees working Saturdays, Sundays and public holidays. This consideration is highly relevant to this application.

PN8410

We note that Clubs Australia Industrial in its final closing submissions has strangely asserted that this consideration is neutral to its claim. We submit this is clearly untrue. A reduction in the take-home pay of a low paid employee has an undeniable and significant negative impact on that employee. The needs of the low paid is not a neutral consideration, and in fact weighs heavily against the granting of Clubs Australia Industrial's application.

PN8411

By its claim that this consideration is a neutral factor, Clubs Australia Industrial has shown that it has not considered the interests of employees in making this application at all. The grant of this claim will result in reduction of conditions for low paid employees. This is an undeniable outcome which is patently unfair to the employees affected. It is our submission that the consideration at 134(1)(a) weighs heavily against the Clubs Australia Industrial claim, and Clubs Australia Industrial's submissions asserting that it is a neutral consideration are not at all believable.

PN8412

I turn next to section 134(1)(g), the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards. The Australian Workers Union notes that of all the considerations in the modern awards objective, this is the only one that Clubs Australia Industrial now asserts to weigh in favour of granting its claim.

PN8413

The AWU disagrees that this weighs in favour of granting its claim and asserts the opposite. The Clubs Award is an industry-specific award that covers all work performed by, in or for clubs. The rationale behind creating this industry award was to avoid a situation where a number of occupation-specific awards applied in a single workplace. The Clubs Award applies to clubs. This is simple and easy to understand.

PN8414

In our submission the Clubs Award currently meets the modern awards objective, and Clubs Australia Industrial has made no submission to the contrary. A proposal to revoke an already simple and easy to understand award does not meet the objective under section 134(1)(g).

PN8415

It is a requirement for the Fair Work Commission to exercise its modern awards powers, that such an exercise is necessary and achieves the modern awards objective. In this application Clubs Australia Industrial has failed to establish such a necessity, or even that the proposed amendments achieve the modern awards objective. This is a marked failure of the application.

PN8416

I turn next to the evidentiary case put forward by Clubs Australia Industrial, and I note that United Voice has made thorough submissions on this point, and the AWU supports and adopts those submissions. We believe that it's worth pointing out additionally again that the evidence tendered by Clubs Australia Industrial in this matter is almost entirely irrelevant to the considerations listed in the modern awards objective.

PN8417

We note that Clubs Australia Industrial has filed evidence on similarities of industries, competition between the industries, financial detriment, and also the prevalence of the use of social media to advertise. We submit that Clubs Australia Industrial has failed to show that any conclusion it invites the Fair Work Commission to make on the basis of this evidence requires the Fair Work Commission to exercise its modern award powers to vary the Hospitality Award and revoke the Clubs Award.

PN8418

In the submissions of the AWU the evidence tendered by Clubs Australia Industrial in this matter cannot satisfy the Fair Work Commission that it is necessary for it to exercise its modern award powers in order to meet the modern awards objective. The evidence is either irrelevant to the modern awards objective or no link has been drawn by Clubs Australia Industrial to show that it is.

PN8419

I will just briefly touch on the merit of the application. In the penalty rates case the Full Bench stated:

PN8420

Proposed variations to modern awards must be justified on their merits. The extent of the merit argument required will depend on the circumstances.

PN8421

In this application Clubs Australia Industrial is seeking significant changes to the terms and conditions of employment for a large work force in the form of penalty rate and other reductions. The AWU maintains its submission that in order to be successful on this claim Clubs Australia Industrial must justify the proposed amendments on their merits. And as the amendments and the result of them being granted are both significant, Clubs Australia Industrial must make out a strong, cogent, merit argument to satisfy the Commission that the proposed amendments are necessary to achieve the modern awards objective.

PN8422

Clubs Australia Industrial has provided no such argument. Instead the applicant has focused on the perceived similarities between some of the work completed under each award and a perceived unfairness whereby employees covered by the Hospitality Award are currently permitted to pay lower weekend penalty rates to permanent employees than employees covered by the Clubs Award.

PN8423

The Australian Workers Union submits that a complaint of competition between industries does not constitute a merit argument for the revocation of a modern award. This is especially so when no argument that the Clubs Award does not currently meet the modern awards objective has not been attempted by the applicant.

PN8424

The effect of the application being successful is thousands of award-reliant employees, the majority of which are considered to be low paid, having terms and conditions of employment imposed on them that are inferior to those they currently enjoy for effectively nothing in return. The granting of the Clubs Australia Industrial application will be an absolutely unfair result from an employee perspective.

PN8425

The justifications for the revocation of the Clubs Award as given by Clubs Australia Industrial are completely inadequate to establish that the modern awards objective will be met by the Commission exercising its modern award powers to make the amendments are revocation as requested by Clubs Australia Industrial.

PN8426

Another issue of merit in this application is Clubs Australia Industrial's numerous amendments to its application. The Australian Workers Union submits that the application before the Commission had the requisite merit to succeed. Clubs Australia Industrial would not have had to suddenly abandon its long-held beliefs that the club industry is unique to make it; nor constantly amend its application when a party opposing the application, or the Full Bench, queries an element of it.

PN8427

A further issue of merit is the issue of consultation, which has been traversed by both United Voice, and also Queensland Registered and Licensed Clubs Association. We note that in response to the claim made by objectors, the Clubs Australia Industrial had not held any consultation with member clubs regarding the application. Clubs Australia Industrial has asserted that the legislation does not require Clubs Australia Industrial to consult, and that there is no suggestion that it is not authorised to pursue the application.

PN8428

Whilst this may be true, an absence of consultation with member clubs, absence of proof of support of member clubs before pursuing the application, and the presence of 137 submissions from clubs opposing the application all affect the merit of the Clubs Australia Industrial application in a negative manner.

PN8429

To conclude the Australian Workers Union opposes the application by Clubs Australia Industrial and encourages the Fair Work Commission to dismiss the claim. Clubs Australia Industrial has completely failed to establish its proposed amendments and revocation are necessary to achieve the modern awards objective. Clubs Australia Industrial is required to establish that much in order for the Fair Work Commission to exercise its modern awards powers in the manner requested by Clubs Australia Industrial

PN8430

It is the submission of the Australian Workers Union that if an application to vary or revoke a modern award is not successfully established by the proponent for change as necessary for the award to meet the modern awards objective, the application cannot be granted.

PN8431

The changes to the terms and conditions of employment for permanent employees in the clubs industry that are sought by Clubs Australia Industrial are significant. Being that applications to vary modern awards are judged by their merits, the AWU submits that the changes sought by Clubs Australia Industrial with this application require an extensive merit argument that justifies these changes.

PN8432

It is the submission of the AWU that Clubs Australia Industrial has not put forward a sufficient merit argument to justify the changes. Accordingly, the application cannot be granted for want of merit. Unless there's anything else, those are the submissions of the Australian Workers Union.

PN8433

VICE PRESIDENT HATCHER: Mr Duncalfe, I don't think the AWU has responded to our statement of 11 July this year.

PN8434

MR DUNCALFE: No, your Honour. We adopt the submissions of the United Voice.

PN8435

VICE PRESIDENT HATCHER: Thank you. Mr Dixon in reply.

PN8436

MR DIXON: May it please the Commission. May I commence by addressing the question raised for the first time by United Voice in respect of the manner in which the Full Bench in the penalty rates case proceeded. In our respectful submission the United Voice's submission is without substance. One sees this from an analysis of the Full Bench's decision in the penalty rates case. May we ask the Full Bench, if you have access to it, to turn to the Full Bench decision. It's 265 IR.

PN8437

VICE PRESIDENT HATCHER: I think we have it. We may have it, Mr Dixon, just hold on a sec. Yes, we do. Yes, we do have it, Mr Dixon.

PN8438

MR DIXON: Thank you Your Honours, Commissioners.

PN8439

VICE PRESIDENT HATCHER: Can I just be clear, what submission are you replying to now?

PN8440

MR DIXON: The suggestion that the Full Bench in the penalty rates case proceeded on the wrong assumption of the industry.

PN8441

VICE PRESIDENT HATCHER: I see, yes.

PN8442

MR DIXON: That submission, in our respectful submission, is without substance. The Full Bench commenced its assessment of the clubs industry at paragraph 915 of that decision. It's at page 233 of IR 265. I will from now on just refer to paragraph numbers, if that is convenient.

PN8443

The Commission will note that the census, that is the ABS data, was referenced from paragraph 918 and follow, and so 919 sets out the level of data that was available from the ABS material, which indicates that there were approximately 43,000 employees in the clubs hospitality section, as categorised by the ABS by reference to the ANZSIC levels.

PN8444

The Full Bench deals with that material until one gets to 920, then comes back to it later. Then it referred to the evidence provided by clubs in those proceedings at 921. And the Full Bench goes on, starting at 923, to the KPMG survey. And 924 you will see that there is a reference to 6577 clubs, and then there are key findings that follow.

PN8445

Based on the KPMG clubs report, the Full Bench turns its mind to clubs by reference to that survey at 927 and following, and both in a diagrammatical form and tabular form there are set out the profile of clubs; the number of clubs; the nature of clubs, types; the spread of clubs across Australia, chart 33; and then you will note in 932 that those clubs that did not have any electronic gaming machine revenue and the like; and at 934, "The overall industry is highly reliant on gaming machines," and that is a reference to the overall industry as determined by that KPMG census.

PN8446

The Commission then, at 937, returns to the employees. One bears in mind that the members of the Full Bench first referred to the number of employees by way of the ABS data, but here at 937 it returns to the survey results of 96,000 employees. And the footnote 847 indicates that the Full Bench was entirely cognisant of the fact that that was a figure which was different from the ABS data, which operated on an apparent narrower classification. But in no respect was the Commission's consideration of the industry can find, in our respectful submission, to what is set out in the earlier part in the ABS data.

PN8447

And then when one goes through to 938, that again - and table 37, these are references to what in our respectful submission was an appreciation of the entire clubs industry, not confined in any way to the ABS data. When the Commission is then drawing its conclusions at 994 it is paying attention not to a narrow concept, as was suggested by United Voice, but to a broader industry, and that leads in after the Commission dealt with the two options.

PN8448

And so that I don't have to come back to it later, may I just interpose here something in 998 - I just ask the Commission to note 998 so I don't have to ask you to open the decision again - in relation to one of the factors that the Full Bench had in mind in informing its provisional view, applying the hospitality sector and providing greater consistency, and a reference to section 134(1)(g). But when one goes on to 1002, there the Commission is looking at clubs generally. And it acknowledges in 1003, differences.

PN8449

But when one looks at 1004 the Commission will see there is no confining approach, from what we perceive from that paragraph. The Full Bench was turning its attention to a high degree of commonality in work performed by the employees covered by the Clubs Award and the Hospitality Award.

PN8450

It was not confining its remarks to a narrow construct, but to an observation that there were two different sources of material, and that the Full Bench had paid particular regard to the census, which provided a broader description, and of course explains the difference in numbers when one looks at the census as opposed to the ABS. And so in our respectful submission that position as put this morning should not be accepted.

PN8451

Clubs Australia Industrial was not on the first of the issue of the classes that were going to be argued this morning. It could have lead evidence of all four of the classes if on notice, and one could possibly go back to the ABS data and get it if that would assist the Commission, but in our respectful submission we were not on notice about that issue.

PN8452

But in any event, for the reasons I've just explained, United Voice takes far too narrow a view in relation to what the Full Bench was considering.

PN8453

VICE PRESIDENT HATCHER: As I understand it, the basic proposition which emerged from that submission was that less than half of club employees work in clubs where the primary function is hospitality.

PN8454

MR DIXON: And I don't think that that's made good by the broader analysis, because it was only looking at a narrower construct, and if one looks at the broader picture, one can't, in my respectful submission, draw that conclusion.

PN8455

VICE PRESIDENT HATCHER: Why can't you draw it, from the way the categories are defined?

PN8456

MR DIXON: No, from the wider survey. The survey has obviously surveyed a broader range of clubs.

PN8457

VICE PRESIDENT HATCHER: Yes, that's the point. I thought the submission being made was that on the face of the definitions of the ANZSIC categories, only a minority of clubs and a minority of club employees fall within the category which is defined by reference to primarily engaging in hospitality functions.

PN8458

MR DIXON: But that is because of the way in which the ANZSIC categories have been categorised. If one looks at the survey material, and you've got six and a half thousand clubs which cover all clubs, and from that material one can't, in my respectful submission, draw the conclusion that within that category of clubs the same limitations apply.

PN8459

VICE PRESIDENT HATCHER: I don't understand that answer, Mr Dixon. The KPMG survey covered all clubs of all types.

PN8460

MR DIXON: Yes.

PN8461

VICE PRESIDENT HATCHER: That's not an issue. And that meant it dragged in a larger number of clubs and a larger number of employees. That's obvious. The ANZSIC classifications, if I understood the submission correctly, on their face said that of those who engage in the category which are primarily concerned with the provision of hospitality functions consisted of a minority of clubs and a minority of club employees. That's the point I'm trying to see if you have a response to. That is, the other clubs, although they may or may not engage in hospitality functions, it's not their primary function.

PN8462

MR DIXON: But that would not necessarily matter, with respect, your Honour.

PN8463

VICE PRESIDENT HATCHER: But is that factually accepted, or is that in dispute?

PN8464

MR DIXON: Not without the ability to go and look at the underpinning material in order to answer that. If that concern that your Honour has is one that remains, then we would seek the opportunity of responding, because we were not put on notice of this at all, and I feel at a disadvantage in answering your Honour's questions.

PN8465

VICE PRESIDENT HATCHER: How long will you need to reply? 14 days?

PN8466

MR DIXON: If your Honour pleases. The third point I wanted to make about that, which I can make independently with the leave that has been given, and that is that the Clubs Australia case is not merely based on those industry profiles or the HERRC definition, by reason of our submissions set out in paragraph 28 of our final submissions of 29 October 2018.

PN8467

Can I then turn to the next topic, and that is section 164 and the suggestion that the tribunal needs to first actually vary one award before considering the global process that we have pressed for; and also to deal with the suggestion that the approach that we put forward adds complexity.

PN8468

Firstly in our submission the exercise of considering a variation of appropriateness can be carried out at the same time. Secondly we say the assessment of whether to revoke the Clubs Award can be carried out with a proposed varied Hospitality Award in mind, that's the assessment, and then the event can occur at the same time. And in one sense the United Voice submissions are just form over substance.

PN8469

What we submit is that if the Hospitality Award is varied as sought, the Clubs Award will be redundant. And in paragraph 17(a) of United Voice's submissions it is suggested that it would be contrary to the modern awards objective. We reject that proposal. In our submission taking into account the potential revocation of the Clubs Award is not inconsistent with the modern awards objective and the task that the Commission must carry out.

PN8470

And in addition the modern awards objective provisions are not the sole considerations. The factors in 134(1)(a) to (h) do not constitute a code of factors relevant to the modern awards objective.

PN8471

VICE PRESIDENT HATCHER: Mr Dixon, in relation to section 164, if I understood what you just said correctly, you accept that in respect of paragraph (b) the appropriateness test is to be assessed by reference to the modified Hospitality Award which you propose to be made?

PN8472

MR DIXON: Or the modified Hospitality Award that the Commission determines that it will ‑ ‑ ‑

PN8473

VICE PRESIDENT HATCHER: Let's take that a step at a time. If we came to the conclusion that the proposed award in its latest iteration advanced by your client does not satisfy that test, what do you say, if anything, we should do beyond that step? Do we then undertake a general inquiry as to what an appropriate award might look like? Do we ask for further submissions? What do we do?

PN8474

MR DIXON: Your Honour, in our submission at the time of making - I hope I've understood your Honour's question. At the time of making a determination or an assessment - an assessment and then a determination under section 164(b), the Commission would be entitled to have in mind the Hospitality Award as it is prepared to vary it. That might be in the form of the proposal put forward by Clubs, and there may be forms in it that the Commission varies in that regard.

PN8475

But the assessment should be made, in our respectful submission, by reference to the instrument that the Commission is prepared to make by way of a variation.

PN8476

VICE PRESIDENT HATCHER: In the first instance that involves considering your proposal.

PN8477

MR DIXON: Yes, your Honour.

PN8478

VICE PRESIDENT HATCHER: In the event that we weren't satisfied that that proposal satisfied the test, procedurally do we then simply at large consider what else might be appropriate, or do we then return to the parties and ask for further submissions? What should we do?

PN8479

MR DIXON: In some respects it will be dependent upon whether we have already been afforded procedural fairness on that point, and that may depend on the extent to which the Commission departs from what is presently the subject of debate.

PN8480

VICE PRESIDENT HATCHER: Let me put it this way: I think we've raised the possibility of red circling penalty rates. If the Hospitality Award was varied to encompass the Clubs Award coverage and then, as our suggestion goes, preserves the penalty rates as they are forever for existing employees, does CIA submit that that would satisfy the appropriateness test in 165(b)?

PN8481

MR DIXON: I hesitate because of course that assumes that it is simply a cut-off point only. What I'm trying to say, your Honour, is it depends very much on the nature of red circling.

PN8482

VICE PRESIDENT HATCHER: Red circling, as I've indicated, the proposition referred to in our statement was that employees engaged at the time immediately before the revocation would retain forever the penalty rate they currently enjoy. Let's assume for argument's sake that would appear in the varied Hospitality Award; in your submission, would that satisfy the test in 164(b)? Because if you say no, then there's no point us really considering it, is there?

PN8483

MR DIXON: Can I take that on notice? The difficulty, I think, your Honour, this is that it would of course depend on what other provisions go into the variations to the Hospitality Award. If all the changes are made except for red circling penalty rates issue, that might be one thing; but if there are other changes that the Commission may have in mind, that may be another thing. And I'm hesitant to give up an ability to address the Commission about that, knowing the full picture.

PN8484

And in my respectful submission if the Commission were to adopt that red circling approach contrary to the submissions of the parties, then it would be appropriate to give us an opportunity to respond to it, because we will have a better idea of what the award variation in total provides.

PN8485

VICE PRESIDENT HATCHER: The difficulty, Mr Dixon, is that all that suggests procedurally. that if we don't consider your specific proposal appropriate, that we should then open it up for a further hearing, shouldn't we, rather than - because there's a whole range of permutations that could arise about which the parties haven't been heard, for obvious reasons.

PN8486

MR DIXON: There may be - your Honour raised this morning one solution to an apparent problem, for example, namely the individual flexibility agreements as opposed to - for make-up time. Your Honour gave an example that would overcome the problem. Of course we're on notice about that, and I could say now in relation to that issue that seems to be a solution to overcoming any perceived difficulties which otherwise exist.

PN8487

There may be issues in relation to timing. The applicant of course has put forward the proposal that there are certain provisions that will only survive for another 12 months; however, the Commission does not accept that proposition or comes to a different view on that, that might have a different result at the end of the day. I'm not seeking to extend the proceedings and I'm trying to be as cautious as I should be.

PN8488

VICE PRESIDENT HATCHER: I understand why you're being cautious, but to be frank, the other matters - leaving aside perhaps club managers, the other matters are really small beer compared to the penalty rates, aren't they?

PN8489

MR DIXON: Yes.

PN8490

VICE PRESIDENT HATCHER: Which is really what I'm driving at.

PN8491

MR DIXON: Would your Honour allow us to put in our position in writing within a 14-day period?

PN8492

VICE PRESIDENT HATCHER: Yes. And any other party can do so as well.

PN8493

MR DIXON: Thanks, your Honour.

PN8494

VICE PRESIDENT HATCHER: Because I'm trying to find out whether the red circling proposition advanced in our 11 July statement would in anybody's submission satisfy the 164(b) test, because if no one suggests that it would, then there's probably not a lot of point us considering it.

PN8495

MR DIXON: I now understand your Honour's question better than I did earlier. I had understood your Honour to say the opposite, that 164(b) may not be satisfied.

PN8496

VICE PRESIDENT HATCHER: I want to know what the parties say about that with respect to the red circling propositions.

PN8497

MR DIXON: If your Honour pleases. We appreciate the opportunity. Thank you, your Honour. I shall try and deal with the other matters expeditiously. United Voice and others seem to persist with the idea that clubs that are asset rich can meet their financial difficulties, as opposed to EBITDARD. The Commission would really appreciate from our submissions that assets do not enable clubs to pay their annual salaries.

PN8498

VICE PRESIDENT HATCHER: They can if they sell them.

PN8499

MR DIXON: I'm sorry?

PN8500

VICE PRESIDENT HATCHER: They can if they sell them.

PN8501

MR DIXON: Yes, but they will run out of assets, your Honour.

PN8502

VICE PRESIDENT HATCHER: My local Panthers has bought an old golf club in my area, and now is proposing to sell it to make it a cemetery.

PN8503

MR DIXON: Your Honour has nailed it on why your Honour knows so much about a particular club. I understand. But, I mean, it was the - I won't go there. Can I just briefly deal with the question of detriment to permanent employees.

PN8504

We respectfully submit that the transitional arrangements which have been put forward are designed to reduce the impact of the detriment on those employees, and we ask the Commission to note in particular that what is proposed is that the reductions only start on 1 July 2019, and then operate for a two-year period after that. At paragraph 7932 we've accepted that there are some permanent employees that are low-paid, but the transitional arrangements seek to reduce that impact. At paragraph 64 ‑ ‑ ‑

PN8505

VICE PRESIDENT HATCHER: How do they do that?

PN8506

MR DIXON: By alleviating the immediate impact whilst it is likely that there will be an increase in their base salaries by reference to the national wage case on an annual basis.

PN8507

VICE PRESIDENT HATCHER: They will get that anyway. That is, given that if you're award-reliant you will get national wage case increases, I'm just struggling to understand how that ameliorates anything.

PN8508

MR DIXON: Yes, your Honour. It's a factor which has been taken into account by the Full Bench on the penalty rates case and the retail case, and it means the impact is not as big, as immediate, and there is scope within the national wage case for an amount to be awarded directed at base pay which affects that impact. That's what occurred.

PN8509

So we have on at least two previous matters where the transitional provisions have been regarded as limiting the impact on employees. And the national wage case, in our respect for submission, took the reduction in penalty rates into consideration in assessing what the annual increase should be.

PN8510

COMMISSIONER BISSETT: But we can't assume that they're going to do that.

PN8511

MR DIXON: No, I accept that.

PN8512

VICE PRESIDENT HATCHER: If you're right, then the club employees have already got compensation for what is yet to occur.

PN8513

MR DIXON: Well, one can't ignore that has happened, and that the panel has increased wages with that factor in mind. I accept one can't say that will happen again, but the transitional arrangements are there for the purpose of smoothing the position and reducing the immediate impact, and to some degree the ultimate impact, given whatever decisions the wage panel might make.

PN8514

In relation to transitional provisions, we respectfully submit that they should be taken into account in assessment of appropriateness under section 164. In relation to the detriment to the employees by reference to the witness evidence that was given by three employee witnesses, it was not incumbent on Clubs to suggest to them that the transitional provision would reduce the impact.

PN8515

It's obvious that it would do because the rate of decrease in the penalty rates is staggered over almost a three-year period or two and a half year period in small percentage references. And that clearly would lessen the impact, and immediate impact of the reduction.

PN8516

The question of separateness of industries illustrated by specific club matters is apparently put against us in relation to appropriateness. The fact that club-specific provisions are sought to be inserted, in our respectful submission does not stand in the way of the Commission either varying the Hospitality Award or revoking the Clubs Award with such variations in mind. It's not unusual for an award to include classifications, specific entitlements or provisions, and the Full Bench at paragraph 1005 in the penalty rates decision had in contemplation that appropriate transitional arrangements or the inclusion of club-specific arrangements within the Hospitality Award could be appropriate. And I referred earlier to the earlier paragraph at 998.

PN8517

A question arose in my learned friend's submissions in relation to age in the context of the impact of revocation. The data in respect of age categories is that set out in our respectful submissions, Clubs at paragraph 19(f) and Hospitality at 25(d), very similar up to the 24-year provision.

PN8518

In relation to the disutility of the two groups of employees, the Commission would note that in the penalty rates decision at 859 and 860 the Full Bench turned its attention to the disutility of working over weekends in the hospitality industry, and the factor that drew attention in 860 was the adverse impact of the ability to engage in social and familial activity. That does not in any way differ with what was identified by the witnesses called by United Voice as their social disutility.

PN8519

In circumstances where the two groups of employees work, relevantly, similar hours, the same type of work, and are within the same profile, it is clearly open to the Commission to accept that there is no material difference in the social disutility between these two groups of employees. The suggestion that the witnesses could say whether others viewed their disabilities the same as theirs is without any substance.

PN8520

Of course what is not given effect to in our learned friends' submission is that in the penalty rates the Commission concluded that the rates in the Hospitality Award overcompensated employees, given the level of social disutility that had been recognised in that industry.

PN8521

It was suggested that there was no probative evidence for the variation of each of the clauses that have been put forward. In our respectful submission that is not correct. Clubs Australia rely on the commonality of industries, the commonality of work, the commonality of rates, classifications, et cetera. We will address the appropriateness in light of the question that your Honour raised in relation to red circling.

PN8522

The suggestion that under the appropriateness test the approach that the Commission should adopt that employees should not suffer any disadvantage at all in our respectful submission ignores the modern awards objective, and the purposes of section 141(1) and 134(1)(d)(a). And it may be determined that employees are being overcompensated in respect of section 134(1)(d)(a) because of the level of disutility, and so the suggestion that there can be no disadvantage at all in light of the fact that there is overcompensation illustrates the point that our learned friends have got that wrong.

PN8523

In relation to competition, the United Voice continued to misrepresent Clubs' position in relation to this issue. I won't repeat the submissions, but I will just put them on the record. The Clubs position is that paragraph 5 of the 14 June submissions and paragraph 30 of the final submissions, the essential element is that clubs are at a cost disadvantage in respect of labour costs for the performance of some work, and where there are revenue streams based on gaming revenue and there is a reduction in game revenue, it obviously reflects the financial position of clubs, and at the same time they suffer a cost disadvantage in respect of the labour, which is precisely the same.

PN8524

The next submission we make deals with both a submission from United Voice and a submission by the AWU. Again may I just indicate this deals with a question of whether Clubs has properly identified the relevant provisions of section 134 in respect of variation and revocation. That position is not correct because of the submissions that have been put in both the 14 June submissions, paragraph 23, and paragraph 33 to 41.

PN8525

The AWU completely mis-stated the submissions by Clubs in respect of the factors under section 134 in relation to the variation. It was never suggested that that was a neutral factor, and the Commission will see the detailed submissions in that regard. Paragraph 80 of the final submissions address the section 134 provisions in respect of revocation.

PN8526

In relation to the PGA, paragraph 4 of their submissions suggest that virtually every registered club and most resort courses in Australia have their employees covered by the Clubs Award. That proposition does not stand scrutiny. It's not in conformity with paragraph 5 of PGA's submissions. And the evidence in these proceedings at paragraph 20(g) of our final submissions set out the fact that there was evidence of coverage in the Hospitality Award. And none of those submissions detract from the position by PGA that the Amusement Award is regarded by it as the best fit award.

PN8527

In relation to the submissions from Mr Arnold for the Queensland RSCA, in our respectful submission the Commission cannot infer that there is no broad industry support by reason of 137 objections. For example, in New South Wales a circular to 1100 New South Wales clubs was sent advising of the course to be followed. There were only 137 objections across the country, and the Commission should infer that the others who were informed of this have not objected and support their industrial associations' application.

PN8528

VICE PRESIDENT HATCHER: I think Mr Arnold made the point - I think it was Mr Arnold, it may be somebody else - that your client's consultation with members was based on the notion that what was being proposed was something which, leaving aside penalty rates, preserved all existing club-specific conditions in a separate schedule. That is, whatever was (indistinct) the members was not in fact the proposition now being advanced.

PN8529

MR DIXON: If we take it back one, the advice to members was that there would be an application for the variation of the Hospitality Award with specific aim of retaining club-specific matters, and one other matter, that is back then. There was no suggestion that there has not been - that Clubs members have not been informed and don't support a variation which occurred at the ‑ ‑ ‑

PN8530

VICE PRESIDENT HATCHER: I think that's exactly what Mr Arnold is suggesting.

PN8531

MR DIXON: There's no evidence that anyone objects to that course, your Honour. And in relation to - we deal with this in paragraph 74 of our submissions, with a lack of consultation. I don't need to take you to it other than to note that in relation to Queensland RACA, the last paragraph of our submissions indicate that that organisation chose its position to oppose this well before any consideration was given to it, and it's not a member of CAI and could not be expected to be consulted. It made its decision on 28 February, before Clubs Australia had taken any step in that regard.

PN8532

VICE PRESIDENT HATCHER: Can I just take a step back, Mr Dixon. I thought you said Mr Duncalfe wrongly described your submissions as treating 134(1) - the needs of the low-paid as a neutral consideration.

PN8533

MR DIXON: I understood that's what his submission was.

PN8534

VICE PRESIDENT HATCHER: Isn't that what paragraph 80(b) says?

PN8535

MR DIXON: Your Honour, that is in respect of revocation.

PN8536

VICE PRESIDENT HATCHER: I see.

PN8537

MR DIXON: I understood his submission to be directed at the variation, which is dealt with in the submissions in paragraph 80(a). Those paragraphs and the ones that I referred to earlier, 23, and then 33 and following, address each of the 134 provisions in relation to variation. And you may recall that Mr Dowling had submitted that modern awards objective applied to revocation, and those are the provisions that deal with that matter.

PN8538

There was suggestion that there were a range of clubs not consulted by Mr Arnold. From what I gathered through the difficulty in the sound, he was referring to clubs that have not been identified or were not the subject of any evidence, and so the Commission should not pay any regard to that submission.

PN8539

The award complexity matter that he raised, there is no base, in our submission, for the Commission to conclude that that can in any way provide any difficulty in relation to any the matters before the Commission.

PN8540

In relation to the other submission by the AWU, the interests of employees it represents, in our respectful submission those interests have been catered for in respect of the classifications that it has coverage of, maintenance and horticultural employees. Their classifications are preserved, and the penalties that apply to maintenance and horticultural employees are preserved. They are included in the proposed transitional provision on clause 32.1 and are not the subject of change. And we also refer to paragraph 12(c) of our final submissions.

PN8541

VICE PRESIDENT HATCHER: Except that AWU covers everybody in Central and Northern Queensland.

PN8542

MR DIXON: Yes, although the specific provisions in those two categories are preserved, and those are ‑ ‑ ‑

PN8543

VICE PRESIDENT HATCHER: Which two categories?

PN8544

MR DIXON: The horticultural employees and maintenance ‑ ‑ ‑

PN8545

VICE PRESIDENT HATCHER: Yes, but they cover everybody.

PN8546

MR DIXON: I'm sorry.

PN8547

VICE PRESIDENT HATCHER: As I understand it, they cover all classifications in Central and Northern Queensland.

PN8548

MR DIXON: I understand that, your Honour. Your Honour, there's just one - may I take instructions. There are just two other matters. We adopt the position of the AHA on the question of make-up time. And then I ask the Commission's leave to deal with the schedule to United Voice's submissions, the analysis of all the differences that are said to be detriments or advantages under the award.

PN8549

There are a range of those that have not previously been identified for us in their submissions. And if we could respond to that in writing within 14 days. I don't expect that to be a very lengthy submission at all, but there are some items that require slightly better attention than dealing with them on the run. And in my respectful submission the Commission would be better assisted with a more informed view about those.

PN8550

We have addressed a number of them, as the submissions indicate, but there are some that haven't been addressed by us, and we would ask the Commission's leave, in conformity with the 14-day option period.

PN8551

VICE PRESIDENT HATCHER: Is anybody opposed to that?

PN8552

MR DIXON: Those are our submissions, if the Commission pleases.

PN8553

VICE PRESIDENT HATCHER: And if we give you a right of reply, Mr Dowling.

PN8554

MR DOWLING: Yes, I think we would need a right of reply. Of course it has been going on a long time for my client. I think February of 2015 was the first attempt to reduce penalty rates in this award, and here we are in November of 2018.

PN8555

VICE PRESIDENT HATCHER: I will allow Clubs Australia Industrial 14 days to provide further submissions about the ANZSIC category classification issue and the schedule attached to United Voice's submissions; and I will allow United Voice a further 14 days to reply to anything of note in those; and I will allow parties generally 14 days to provide any further submission they wish to make as to the red circling concept in the light of the requirements of section 164(b).

PN8556

MR DOWLING: Yes, we took your Honour's question. I noted your Honour's question: would red circling of the type described by your Honour satisfy the appropriate test in section 164(b)?

PN8557

VICE PRESIDENT HATCHER: Yes.

PN8558

MR DOWLING: Can I, whilst it is that we're talking about all sorts of further submissions, I might join in, your Honour.

PN8559

VICE PRESIDENT HATCHER: Yes.

PN8560

MR DOWLING: Your Honour raised with me the question of the transitional arrangements. The position of my client has been that it's premature to say anything until it knows which particular form of the particular replacement that might take the place of the revoked award. Your Honour understandably raised the possibility that we might not get another opportunity. If your Honour is saying to us you won't get another opportunity ‑ ‑ ‑

PN8561

VICE PRESIDENT HATCHER: I'm not saying you won't, I'm saying you may not. So if there's anything else you want to say along those lines, I will give you a further 14 days.

PN8562

MR DOWLING: Thank you, your Honour. There's nothing further.

PN8563

VICE PRESIDENT HATCHER: All right. We thank the parties for their submissions. Subject to the receipt of the further submissions we've identified, we propose to reserve our decision. We will now adjourn.

ADJOURNED INDEFINITELY [3.50 PM]