TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009 1055619
VICE PRESIDENT HATCHER
DEPUTY PRESIDENT BOOTH
s.156 - 4 yearly review of modern awards
Four yearly review of modern awards
Supported Employment Services Award
10.07 AM, MONDAY, 5 FEBRUARY 2018
VICE PRESIDENT HATCHER: Yes, can I take the appearances starting in Sydney please?
MR BULL: If the court pleases, my name is Bull. I appear for United Voice.
VICE PRESIDENT HATCHER: Thank you.
MS L SVENDSEN: Your Honour, Svendsen, initial L, appearing for the Health Services Union.
VICE PRESIDENT HATCHER: Yes, thank you.
MR N WARD: Your Honour, Ward, initial N, with Ms Zevari, initial S, appearing for the New South Wales Business Chamber and Australian Business Industry.
VICE PRESIDENT HATCHER: Thank you.
MR P MUSSO: Musso, initial P, appearing for National Disability Services.
VICE PRESIDENT HATCHER: Thank you. The second row.
MR B AMOS: Your Honour, Amos, B, for Practical Workplace Relations.
VICE PRESIDENT HATCHER: Right.
MR M STROPPIANA: Your Honour, Stroppiana, M, appearing for the Endeavour Foundation.
VICE PRESIDENT HATCHER: Thank you.
MS M WALSH: Your Honour, Walsh, initial M, appearing for Our Voice Australia.
VICE PRESIDENT HATCHER: Thank you.
MR CHRISTODOULOU: Your Honour, Christodoulou, C, and I have with me Ms Dron, initial T, appearing on behalf of Greenacres Disability Services.
VICE PRESIDENT HATCHER: Thank you.
MS J ZADEL: If the Commission pleases, Zadel, initial J, of HWL Ebsworth Lawyers, seeking permission to appear on behalf of Civic Disability Industries.
VICE PRESIDENT HATCHER: Thank you. Is that all the appearances in Sydney? Right, next appearances in Melbourne. Mr Harding?
MR HARDING: Yes, your Honour, I appear for the AED Legal Centre and with me is Ms Wilson. I think I sought permission to appear on the last occasion but if permission is required I hereby seek permission to appear.
VICE PRESIDENT HATCHER: Thank you. Appearances in Canberra.
MR S JORDAN: Your Honour, Jordan, initial S, and with me is Ms Wilsmore, initial B, appearing for the Department of Social Services.
VICE PRESIDENT HATCHER: Is that all the appearances in Canberra?
MR JORDAN: Yes, your Honour.
VICE PRESIDENT HATCHER: Yes, right. To the extent that there's been applications for permission for legal representation, is that opposed by any party?
MS SVENDSEN: No, your Honour.
VICE PRESIDENT HATCHER: No, right, well we'll grant permission to those who have sought it. The purpose of this morning is to receive opening submissions. I think there was - may have been a minor issue as to whether the program is in the order agreed by the parties but I think from our part we're content to go with whatever order the parties are happy with. Is there any issue about that?
MR HARDING: Not from our end, your Honour.
VICE PRESIDENT HATCHER: So does that mean we start with you, Mr Harding?
MR HARDING: It does seem so, your Honour, yes.
VICE PRESIDENT HATCHER: Right, well you proceed.
MR STROPPIANA: Your Honour - - -
VICE PRESIDENT HATCHER: Yes, Mr Stroppiana.
MR STROPPIANA: I'm sorry to interpret, your Honour. There are a couple of procedural issues which I wanted to mention.
VICE PRESIDENT HATCHER: Yes.
MR STROPPIANA: Do you want to deal with those now?
VICE PRESIDENT HATCHER: What's the nature of them?
MR STROPPIANA: The nature of them relate to firstly the approach which the Full Bench proposes to take in respect of the evaluation of the modified supported wage system trial report. Whether that is going to be - what protocols if any the Commission is proposing to put in place in respect of material contained in that report.
VICE PRESIDENT HATCHER: That's the first issue.
MR STROPPIANA: That's the first one. The second issue is the statement filed by Mr Paul Kane on 14 December 2017 from - it's part of the evidence of AED Legal. The statement has substantial redactions. Prior to cross-examination we would be seeking some directions to be provided with an unredacted copy of that statement to assist with preparation for cross-examination.
VICE PRESIDENT HATCHER: Right. With respect to the first issue, is that likely to be something which affects opening submissions?
MR STROPPIANA: No, your Honour.
VICE PRESIDENT HATCHER: Right, well I think unless any party objects we'll deal with these issues at the end of the day.
MR STROPPIANA: Yes.
VICE PRESIDENT HATCHER: Are there any other procedural issues of a preliminary nature anyone wants to raise? No, all right, Mr Harding.
MR HARDING: Thank you, your Honour. Your Honour, the AED Legal Centre in this review is now confining its case to one in support of a proposal to amend clause 14.4 of the award, and also to resist a proposal by the ABI and the New South Wales Business Chamber to vary the award by inserting a new tool. The AED has filed an amended draft determination dated 22 December 2017. Does the Bench have a copy of that?
VICE PRESIDENT HATCHER: Yes, we do.
MR HARDING: Thank you. I note that the ABI and New South Wales Chamber and if I just for the purposes of brevity if I just refer to it as the ABI and I intend to pick up those two parties collectively has also amended its draft determination and it did so in January of this year, and now only seeks the insertion of the new wage assessment tool and has abandoned its proposal for modification to the award concerning the definitions, albeit I note that it reserves its right to rely on that matter at a later point.
VICE PRESIDENT HATCHER: Yes.
MR HARDING: I'll take you through our proposal and also the ABI proposal in the course of opening without wishing to rehearse the submissions that have already been filed in writing. If I could just turn to those now, your Honours and Commissioner. The AED has filed three submissions dated 3 October, another - and that was in support of the AED proposal. Another dated 21 November that replied to the submissions in support of the ABI proposal and a final one on 14 December in reply to those parties who oppose the AED determination. Your Honour, do you wish to mark those submissions?
VICE PRESIDENT HATCHER: No, that's not necessary.
MR HARDING: Right. Suffice to say this opening is in addition to and the AED rely upon those written submissions. Can I start, your Honours and Commissioner, by observing what might be a self-evident proposition, namely that we're here to review the existing Supported Employment Services Award. There is no proposal by a party to change the rate of pay fixed by clause 14.2 of the award for the grades of work contained in schedule 2, nor is there a proposal to vary schedule 2. For reasons that will become apparent later, your Honours and Commissioner, that is a matter of significance, in our submission.
There are a number of tools that now appear to be irrelevant and it does appear as if they - there's no party who's come to advance a proposal for their retention, and perhaps if I can just identify those if that would assist.
VICE PRESIDENT HATCHER: Yes.
MR HARDING: As I understand them to be. Those tools are identified in clause 14.4(b) as the Hunter Contracts Wage Assessment Tool, which is - and the next one, the Phoenix Wage Assessment Tool, the PHT Wage Assessment Tool, the Woorinyan Wage Assessment Tool, the RVIB Enterprises Wage Assessment Tool, the Cumberland Industries Wage Assessment Tool, the Wangarang Industries - - -
VICE PRESIDENT HATCHER: Sorry, just slow down.
MR HARDING: The Wangarang Industries Wage Assessment Tool and the Ability Options Wage Assessment Tool. On that basis we've gone down from a list of 29 tools and the 29 excludes the BSWAT to a list of 21. 22 is the default proposal advanced by the ABI and is included. The AED case is based on the proposition that only one tool ought to be provided for by clause 14.4, namely the supported wages system but in so saying that is predicated on the system as amended by the Full Bench on 10 October 2017. That is often referred to in the material as the modified supported employment, the supported wages system and it's that predicated upon which the AED propose the adoption of that - the SWS as the only tool.
There are some significant aspects of the modifications to which we would draw attention and are relevant for the purposes of assessing the utility and efficacy of the SWS as a tool for the determination of a pro rata wage in Australian disability enterprises, which is of course the context that we are here considering. The first is that the scheduled would now provide, this is schedule D of the award, would not provide that the assessed productivity and this is in D.4 of the processed productive capacity of an employee is to be determined in accordance with D.5 and rounded to the nearest whole percentage, and that there is now only in (b) a 12.5 per cent minimum and not an actual amount of minimum wage that would be payable to an employee. To that extent we seem to be on the same page as the ABI because in its proposal 12.5 is the minimum. That's the assessment of course.
A matter of great significance, in our submission, will be the assessment of capacity that's set out in D.5 and why that's significant is because in the first instance the assessment of productive capacity is to be determined by an independent assessment under the SWS and that 50 per cent will go to the determination of the pro rata wage, but a further 50 per cent will be relied on from what's called workplace data. Which of course is an historical record the employer is entitled to keep, that enables the assessment of a productive capacity to take into account the productive capacity over time rather than reliant on a point in time assessment. Smoothing out, we would say, in the nature of an average the bumps, peaks and troughs perhaps that one might get depending on the nature of the assessment at the time and the circumstances in which the assessment's conducted.
It's to be observed, however, that there is provision for dealing with a circumstance where there's disparity as between the two assessments and there'll be evidence - there is some evidence about existence of the disparities in some of the material that was conducted, some of the research material that was provided to the conciliation conference. Of great significance though is that in the end if there is a disparity of greater than 20 per cent, and this is identified in (b) of D.5.5, the independent assessment conducted by the Commonwealth scheme - conducted under the Commonwealth scheme will prevail.
There is in D.7.2 the capacity for review of productive capacity - - -
VICE PRESIDENT HATCHER: Mr Harding, I just want to understand that. So if the disparity is less than 20 per cent you average the two component. Is that right?
MR HARDING: Yes, that's right.
VICE PRESIDENT HATCHER: But if it's more than 20 per cent you'd just take one over the other.
MR HARDING: You take one of the other, that's right, and why that's significant, your Honour, is that in my submission what the award now does is to privilege the independent assessment that comes from the SWS assessment. That is why it gives precedence to the point in time assessment if there is such a disparity. But of course the disparity is not something that necessarily inures forever, because there is opportunity for review in the manner that's set out in D.7.2. It's quite flexible, your Honour, because there is a default position initially being 12 months within the initial assessment, and then the rate of pay adjusts accordingly, and then after that three years but there is flexibility for there to be earlier assessments if that is requested.
Finally, your Honours and Commissioner, there is D.8, which confirms that the only purpose of the schedule is to deal with the term of the modern award pertaining to minimum wages. Expressed in the terms of section 153(3), what the schedule does is to confirm that this only - this merely deals with the subject matter of minimum wages and otherwise employees are entitled to the terms of conditions contained in the award.
Your Honours and Commissioner, it's accepted by the AED as stipulated in the Four Yearly Review case that it falls to it to justify, to persuade the Full Bench that change in the nature that is proposed by the AED is necessary, and we propose to do that. You will note from the submission filed in December that the AED relies on a number of grounds upon which it asserts that the Commission ought to vary the award. In other words, that there is - it will not be satisfied on a prima facie basis that the award as currently framed complies with modern award objective. I don't propose to take you through those unless there is any reason why the Full Bench would like me to.
VICE PRESIDENT HATCHER: No. Go ahead.
MR HARDING: Yes, thank you, your Honour. If I can then take you through the draft determination proposed by the AED and explain what it does. It's really, in my submission, quite simple. What is first proposed is that 14.4(a) be substituted with a term that entitles an employer to require an employee to undergo assessment under the SWS. That departs from the award, the current award to the extent that the current award at 14.4(a) would require assessment. This confers on the employer a discretion as to whether or not it wishes to have that done, and if it does then the assessment is to be conducted in accordance with schedule D and the language of paragraph 2 of the draft determination, in my submission, reflects the language of schedule D in terms of how it is that that assessment is to be conducted, and the resulting wage arrived at.
There is some concern expressed in the evidence about the current award which fixes a rate of pay at a point in time, it doesn't allow for adjustments below that point if productive capacity falls below the initial assessment, except in a limited set of circumstances. The AED and to that extent there is perhaps a tension between the current award and schedule D as amended in that the review uses the language "pay accordingly", permitting of course the rate to go - to respond to the assessment of productive capacity. The AED accepts that that is an issue and accordingly its proposal would permit the rate to float with the assessment of productive capacity as reviewed in accordance with schedule D. That is up or down.
Paragraph 3 retains to some extent the original phrasing of the current - of the award in relation to a situation in which there is a - what's determined a regression in the person's disability. In that situation, the existing provisions are substantially retained.
The predicate of the AED's proposal is that we are here concerned only with a variation that deals with the method of assessment on an individual basis, in applying what is already the value of the work fixed by the award in clause 14.2. In other words, there has been a valuation of the work the award covers, the schedule that's schedule 2, classifies that work by various criteria and in clause 14.2 it fixes a rate that represents the Commission's valuation of that work in clause 14.2.
The purpose of the award is in our submission intended to be beneficial to employees. We're talking here about the Commission fixes what is safeguard, and in so doing it has looked at the work, it has identified what that work is and then it has identified a properly fixed minimum rate for that work. All clause 14.2 ought to do and does is then to say well, subject to that predicate how is an individual to be paid with a disability whose productive capacity is affected by their disability to be paid the rate the award has already stipulated?
All of the tools hinge on clause 14.2. All of them. No party's come along to say if there's anything wrong with the rate in 14.2 or there's anything wrong with the valuation the Commission has made to the work that is has described in schedule 2. In those circumstances it will be the AED's case that this is merely a question of then applying a system on an individual basis where the work - that kind of work, has been valued by the Commission. It has been observed by this Commission in the Four Yearly Review case that section 134, which is the modern award objective, is broadly expressed. That seems to be an understatement. It is very broadly expressed because of course it's covering a very large subject area.
The critical condition is that the Commission ensure, now that's a word of great significant in our submission. The Commission must ensure that the awards that it makes provide for a fair relevant minimum safety net terms and conditions. Now of course that is not limited to minimum wages. There is of course a minimum wage objective in section 284 and that obliges the Commission to provide for a safety net of fair minimum wages, including the factors that are set out in the provisions, including taking into account those factors.
There is - the broad nature of the matters to which the Commission must be satisfied in performing its functions under this part perhaps when applied to a particular context as is the case before us today, have to have regard to that context in assessing the fairness and relevance of the minimum safety net. It'll be our contention that the fairness of the safety net can have regard to under the TO principle the convention - the international convention on the rights of persons with disabilities 2006, a convention which Australia ratified on 17 July 2008 and I'll provide later the Commission with copies of relevant parts of that convention.
Secondly, that it can have regard to the ILO Vocational Rehabilitation and Employment Convention 1983, it was ratified by Australia on 7 August 1990 and the recommendations made by the ILO under that convention. We rely insofar as the convention on the rights of persons with disabilities in article 27 of that convention, and in particular we rely on 27(b) which obliges state parties to:
Protect the rights of persons with disabilities on an equal basis with others to just and favourable conditions of work, including equal opportunities and equal remuneration for work with equal value.
I pause there, your Honours and Commissioner, in relation to the subject matter of value. As I have already said, the value of the work that is covered by this award has been a task that has been already undertaken by the Commission, and is embodied in the combination of clause 14.2 and schedule 2. We would contend that employees with disabilities who are covered by the award ought to be entitled to receive a rate of pay reflecting that value. They ought to be remunerated according to the rate of pay which reflects that value.
VICE PRESIDENT HATCHER: Mr Harding, just that reference to equal remuneration for work of equal or comparable value, that's referred to as a consideration, section 134(1)(e), so are we to read that reference as going beyond gender related issues to obviously issues affecting this case.
MR HARDING: Yes, because in the Act it's confined to gender issues. Under the convention it's specifically tied to those - to workers with disabilities and it's not equal and comparable value, your Honour, it's only equal value.
VICE PRESIDENT HATCHER: Right, thank you.
MR HARDING: The second international convention that we rely on is the Vocational Rehabilitation and Employment Convention of 1983, and by that convention which I might add includes a definition of disability which is apt in these circumstances. Namely, an individual who's prospects of securing, retaining and advancing in suitable employment are substantially reduced as a result of a duly recognised physical mental impairment.
Article 4 obliges:
The parties to the convention to adopt conditions that are based on the principle of equality, of equal opportunity between disabled workers and workers generally. Equality of opportunity and treatment -
and I emphasise the word "treatment" in this context -
for disabled men and women workers shall be respected.
Then it concludes by saying:
Special positive measures aimed at effective equality of opportunity and treatment between disabled workers and other workers shall not be regarded as discriminating against other workers.
The recommendation, number 168, made by the ILO pursuant to that convention has further content of significance by article 10.
Measures shall be taken to promote employment opportunities for disabled persons which conform to the employment and salary standards applicable to workers generally.
We rely on that in particular because our contention will be that for workers generally who don't have a disability, the award in particular prescribes a rate of pay according to a particular valuation the Commission's arrived at, and that is the general approach that's taken to the modern award the Commission has made. The standards to which the Convention refers includes the standard minimum wage that's contained in clause 14.2 and also the standard of assessment that the modern award would ordinarily adopt to determine what the rate of pay is. That being recourse to schedule 2 of the award as the starting point for the determination of what work falls within which grade, and then how an employee is to be paid by selecting the rate of pay that's prescribed for that grade.
There is on any view, I don't think there's any dispute about it, the process that clause 14.4 envisages is that there will be a pro rata wage - pro rata amount of the minimum wage paid to an employee according to an assessment of that employee. The issue that arises in this proceeding and which is the predicate of the AED's case is which of those assessment methods best delivers the benefit of the minimum wage prescribed by the Commission in clause 14.2. it is self-evident from the application of the AED that the SWS is that method and we will rely on evidence including from Paul Kane who in his witness statement talks about in paragraph 22 that:
The SWS assessment is a comparison of agreed performance standards of what is required to earn the full award rate of pay under the relevant award classification for each job task with the assessed performance achieved by the employee to each job task.
His evidence will be that it is an apples versus apples comparison of the performance of job tasks at the same award classification level. In short - - -
VICE PRESIDENT HATCHER: Mr Harding, is there anything wrong with retaining multiple tools of assessment if we're satisfied that they don't lead to discriminatory outcomes?
MR HARDING: Yes.
VICE PRESIDENT HATCHER: Is it possible that there's more than one way to assess work which leads to a value outcome?
MR HARDING: That might be the case and if your question, your Honour, is on a merit basis and the Commission choose for multiple methods of assessment, if it is persuaded in my submission - if it's persuaded that there are open multiple methods it might be that the Commission can reach that conclusion, yes. But the AED's case is that it's not open on the basis of those tools that are already provided for in clause 14.4 other than the SWS. The reason goes to the point I've just made, namely that only the SWS in the AED's submission takes the award as it finds it and applies the award in a way that conforms to the circumstances of the individual who has the disability. Because it takes the valuation that the award has conferred on employees covered by it and then assesses their productive output against those who are entitled to the full rate, and then on that basis determines the pro rata amount. So it alters nothing about the award other than the legal obligation to pay the rate in clause 14.2.
Whereas we will contend that the other clause actually change the value of the amount that the Commission has prescribed. That includes the tool proposed by ABI. Now if your Honour there is another method that does what we say the SWS does then it would be open to the Commission to adopt it, but there isn't on the evidence, in our submission.
VICE PRESIDENT HATCHER: Thank you.
MR HARDING: The evidence just on that subject, your Honour, we rely on what Mr Kane has said. We also rely on what Mr Kane has said and also Mr MacFarlane as to the focus of the SWS. We say the evidence will show that the SWS focuses on the work the employer actually requires the worker to do, not some - engage in some abstract assessment of skills. I suppose the contention that underlies that, your Honour, is that if they've employed - that is an employer - has employed a worker and is satisfied that the workers is able to do the work that they wish that person to do, and the only legroom left for wage assessment is to determine what their output is, in circumstances where you've got that worker doing the work that the employer requires of them.
That's a point of significance because the other approaches that are against us in this proceeding tend to take the view that there ought to be a system for valuing work that stands outside the award. It's almost as if through these tools we have one system of valuation, that system is embodied in the award itself and another system of valuation in the hands of the employer which it can utilise to determine what part of the minima the Commission has prescribed.
There is some criticism in the material about the utility of the SWS as a method of assessment in the context of team work and production. The evidence we - and production work. The evidence that will be - we say will show that those concerns are misplaced and exaggerated and that the SWS can be applied to properly assess work in those contexts.
There is also some evidence that the tools ought to take account of the personal support that's provided by ADE employers to these workers yet, in some cases, the evidence tells us that there are disabled workers who may wander off task and who require coaching and other support that would not ordinarily be provided by an employer to a workforce.
With respect, there are two things to say about that. Firstly, the evidence will show that the Commonwealth funds the ADEs to provide personal support, and there's some evidence in paragraph 31 of Mr Cain's second statement, that explains how much, on an individual basis, that the ADE employers receive for that provision.
Secondly, in any event, there is a conflation between what is a proper cost borne by the employer for the provision of the - for the purposes of performing the work it wishes to be done and the wages it pays to workers for doing that work. That conflation, in effect, means that the employer seeks to pass on some of its costs to workers who are expected to bear a wage discount, by reference to those kinds of considerations.
VICE PRESIDENT HATCHER: Independent of the issue of cost, is it possible that, in assessing productivity or output, you have to take into account the fact that the disabled employee needs a level of support to even achieve the level of productivity that he or she has? Your comparative non-disabled employee doesn't require, say, any support, apart from training, your disabled employee has a percentage productivity but only with the provision of a certain level of support from the employer, is that to be taken into account in assessing productivity?
MR HARDING: Well, it might be taken into account, yes, in terms of accessing productivity, but only to the extent that it's required. That's done on a specific basis. In other words, if you have someone who has been provided with support, one might see that reflected in the output. That's valid as a way of assessing the output. It would be artificial, I think, to exclude that and I'm not sure how you'd do it. But that's not what some of the tools do and that's not what the ABI proposal does. It wishes to include personal support as part of the valuation of the work itself. That is apparent in, say, the ABI proposal, in clause 4.3 - I withdraw that. It's proposed in annexure A, on page 6 of its draft determination.
What you will see from, say, A.2 and A.3, and I might add, your Honours and Commissioner, we are here talking about sub-classifications of grade 2 work, criteria that would be built into the classification, which attracts a fixed percentage of the award rate, is:
Continually requires personal support.
So, in an abstract sense, one wonders how one determines "continually", it's rather subjective, it can be taken into account, in the value that is assessed for that person, that they continually require personal support of the kind found in B.1.
VICE PRESIDENT HATCHER: Sorry, Mr Harding, where was that?
MR HARDING: Personal support is defined in page 8, B.1.
VICE PRESIDENT HATCHER: Yes, all right.
MR HARDING: You see it?
VICE PRESIDENT HATCHER: Yes.
MR HARDING: Now, the difference between what we've been discussing, your Honour, and what's contained in this annexure is that the ABI proposal would bring into that assessment, in an abstract way, at the outset, some assessment of what's required by way of personal support, whereas, under the SWS, if personal support is required that level of support may vary. Who knows how it might vary, but it might vary. The extent to which it might vary could be reflected in the output. Bear in mind, in making that assessment, we're not talking, as perhaps in the past, with a point and time assessment only. The employer, under the modified SWS, has the ability to collect workplace data over time, in which case the impact of a worker's need for support can be reflected in the output measures or productivity measures that the employer has gathered. That then becomes 50 per cent of the ultimate assessment.
That's objective evidence. Evidence collected objectively about actual productivity and actual output, as opposed to a subjective assessment which then fixes that employee into a sub-classification.
It is, perhaps, at this point, maybe, if I could turn to the ABI proposal. The first thing to observe about that proposal is that it's supposed to be a default tool. In other words, it's put on the basis that if an employer does not make a choice to choose another tool this proposal becomes the assessment method. It's odd, in my submission, that one should have such a proposal, in light of the fact that there's no evidence that anyone has had any difficulty in choosing anything. There are currently 29, 21 methods that ADE employers have to assess wages. The ABI comes along and says, "Well, if I can't choose from one of the 21 ways in which wages can be assessed, here's another one for you."
It would be, in my submission, incumbent on the ABI to show why such an additional method is necessary. Now, in saying, what they have done in their submissions to say, "Well, there's some disconnect between work value and the SWS." But in so saying their attention is focused solely on the SWS, what about the other 20? What about the other 20? Why isn't there a disconnect between work value, on their argument, with group value and the other tools?
For instance, we know, from its proposal, in paragraph 3, that it would apply a system of sub-classification at four levels, containing four sub-levels within each level, meaning that there are 16 sub-classifications of work, of grade 2 and grade 1 work. Each one of these sub-classifications contains a fixed proportion of the minimum rate, contained in clause 14.2, for that grade. Those percentage valuations go all the way up until 100 per cent of the minimum rate.
The proposal is limited to grade 1 and 2. It ceases to apply after grade 3. Well, it ceases to apply at grade 3 and above. So we can infer from that that there is no disconnect, in a work value sense, for grade 3 work and above, but apparently there is for grade 1 and 2. The logic of that is unexplained.
The problem with this argument is that the suggestion there is a disconnect overlooks the fact that the Commission has already valued the work. It's not now open, in our submission, to the ABI, or anyone else for that matter, to reopen the subject of that valuation by asserting that there is a disconnect in circumstances where the Commission has come along and said, "This is the value. We've properly fixed minimum rates and this is what employers are required to pay."
In any event, the disconnect asserted, once that point is disposed of, deprives the ABI of any real argument in favour of its proposal as a default clause in circumstances, or a default assessment tool in circumstances where the SWS is and has always been part of this award. It is one of the choices that it currently open and so are the others.
It will be incumbent on the ABI to persuade you of the need for change. In so doing, it has to explain why its proposal is necessary, whereas it takes no criticism of other tools that depart from its methodology of assessment. There is an inherent contradiction between Greenacres, for instance, coming along to say it supports the ABI proposal but it wishes to retain its own wage assessment tool, in circumstances where the assessment methods differ.
Finally, your Honours and Commissioner, by way of opening, there is some evidence about viability and the impact of any decision by this Full Bench on the viability of ADEs, if it were to adopt the SWS as the only method for assessing clause 14.2 wages. A number of things might be said about that, and I'll be brief on that subject.
Firstly, there is material before the Full Bench from the Commonwealth which has expressed its commitment to maintaining the viability of ADEs. That commitment is something the Commission can have regard to. It also indicates that the subject of social policy is really a matter for the government and not a matter for this Commission in determining what ought to be a safety net rate of pay.
It will be submitted, in any event, that insofar as the argument raised by ADEs, on the subject of viability, is expressed to be an argument about capacity to pay. That capacity to pay is not relevant in circumstances - if the Commission has formed a view about what constitutes a fair and relevant safety net.
In that respect, I note that section 134(1)(f) obliges the Commission to have regard to employment costs. Of course, it expresses that in the context of its assessment of what is a clear and safe, fair and relevant minimum safety net of terms and conditions, collectively, all the terms and conditions of an award. Section 284, which is the minimum wages objective, does not contain that obligation.
Now, it will be submitted by AED that the context, the statutory context, supports the proposition that if you have a situation in which the Commission has determined what ought to be a fair and reasonable safety net, consisting of a wage assessment method for a group of employees whose disabilities effect productivity, and determine what that method ought to be, it can't unwind or discount, or it should not, that method by reference to concerns by ADEs about their viability.
The Commission, in the end, is charged with fixing a method that values the work, not the work as required by an employer, in its particular business circumstances. That's a matter for the employer and any discussions it might have to have with the Commonwealth. But we'll develop that submission as the evidence unfolds.
Your Honours and Commissioner, unless there's any particular questions, that's the opening for the AED.
VICE PRESIDENT HATCHER: Mr Harding, do you agree that it seems by implicit, if not explicit, in everyone's submissions, that the adoption of the SWS as the only assessment tool would cause a general increase in the payment of wages by employees covered by the award?
MR HARDING: There does seem to be a degree of evidence of that. I'm not prepared to submit, at this stage, that that will occur as a fact, but I accept that there is material that supports that proposition, yes.
VICE PRESIDENT HATCHER: All right, thank you. Who's going next?
MS SVENDSEN: Your Honour, if I understand the order correctly, it's those of us who support the AED matters, and I will speak briefly.
VICE PRESIDENT HATCHER: YEs.
MS SVENDSEN: Thank you, your Honours and Commission. I intend to make only some very brief remarks. HSU relies on its filed submissions in this matter and supports the case pressed by AED Legal.
We remain committed to the application which we initially filed, jointly with United Voice, in December 2013. An application which sought, in the first instance, to remove the Business Services Wage Assessment Tool, BSWAT, and an application that was finally concluded through the mechanism of consent orders, agreed in mid-2015, and following agreed transitional arrangements, finally concluded in about early 2016. It secondly sought to remove all wage assessment tools which contained competency components or, alternatively, to remove the competency components of each of those tools.
It's a matter of public record that since 2013 we've been engaged in exhaustive and extensive conciliation conferences, not just the union parties, the HSU, the ACTU and United Voice, but also disability advocates, employer advocates, multiples, supported employment services themselves, carers and their family. In fact, looking around the Bench, the majority of the people that will be appearing in these proceedings have actively engaged in those conferences.
While those conferences and discussions remain, essentially, confidential to the parties, nonetheless the various trials and exhaustive discussions resulted in not only agreed variation to remove the BSWAT and the transitional phasing out of that tool but also, and significantly, major changes to the Supported Wage System tool, to improve its useability in ADEs, the changes which Mr Harding has outlined.
It can't be said that the union parties have sought to ram through the change without considerations of the issues advanced by the support and employment services themselves. We listened, changes were advanced, tested and agreed upon, which made considerable variations to the SWS tool.
Variations were also, importantly, made to the handbook, although I think that's probably still being finalised, the training of assessors and the addition of training for workplace based assessors, to enable the optional collection of data over time, which enables the use of that data for 50 per cent of the assessment, when compared with or added to the point of time assessment made by the independent external assessor.
Also the capacity for benchmarking of the job. So the benchmarking would be undertaken with an external assessor, in the workplace, to benchmark that job against the expected capacity for an individual without an individual, so that timing can be taken in the workplace, and the collection of that workplace data can be based on same premise that it will then be based on when the assessors come to do an independent assessment.
Despite that, HSU still submits that the competency components of all wage assessment tools are discriminatory. They are effectively a method which enables double-dipping, through the assessment of the competency of a person with a disability twice, which results in further reductions to their wages.
HSU is committed, in this respect, to what is fair and what is right. It's about removing the discriminatory aspects of wage assessment tools, which reduce the wages of some people, below the national minimum wage. We need to think about that, I think, for a moment. Wage assessment tools provide a legal mechanism to allow for a person to be paid below the national minimum wage. The tools allow employers to legally pay their employees less than the minimum wage rate, set by the Commission, as a fair minimum rate of pay for every employee in the country. Any different treatment of people must not be done without serious consideration.
We would argue the Commission must hasten very slowly indeed before it considers adding an additional mechanism which would provide classifications with wage rates that are below the national minimum wage rate.
The ABI proposal cannot, for example, be equated to, say, the national training wage system which, arguably, provides for essentially the same sort of thing and which are appended to the majority of modern awards. They are strictly limited by an employee's engaged in externally provided and accredited training programs, time and qualifications and, it must be said, assessments by externally trained and accredited assessors.
HSU submits that the award itself provides for an assessment or classification of employee's competencies. The Supported Wage System merely provides a tool to assess their productivity capacity within those competency levels, as measured against what would be expected of a person who did not have a disability and who was working in the same or similar job.
While it's true that the SWS does not assess competency, it is simply wrong to claim that the Supported Employment Services Award, coupled with the SWS, doesn't provide for an assessment of an employee's competency. The award, like all modern awards, contains a classification structure, HSU is not claiming it's beyond criticism, but it contains a classification structure, it is a structure that recognises the skills and competencies required for a job at each level.
The classification structure provides the initial assessment of the job an individual is undertaking. It provides for the training levels required, the competencies required to undertake the duties at the level, the experience or expertise of an employee, the supervision levels, both of an employee or by an employee of others, expected at that relevant level, the responsibilities expected and the skills needed to work at each level of the structure. These constitute the competencies contained within a modern award classification structure and these are the sort of classification structures that are replicated across the modern awards.
HSU submits that to add another layer of competency assessment, on top of the classification systems and the productivity assessment, amounts to double-dipping, in relation to competency and, thereby, reducing wages even further. I'll leave my comments there, thank you.
VICE PRESIDENT HATCHER: Thank you. Mr Bull?
MR BULL: I'll try and be very brief. We were a party to the award variation which Booth DP presided over a number of conferences for. That award variation was discontinued on the basis of the issues remaining to be dealt with would be dealt with in the four-yearly review.
We'd indicate that we support the need for a review, in relation to the remaining wage assessment tools. There's a clear issue, which has been raised by the judgment of the Full Federal Court in Nojin, the decisions raised in issue of a number of the remaining wage assessment tools, in clause 14.4, that properly should be considered in this review.
In addition to the modern award objective, which is the main determinant of review, we'd indicate that section 153 of the Act is of relevance. That's a general section that basically says that the terms of modern awards should not be discriminatory in the conventional human rights sense. Among the things that shouldn't be discriminatory is disability discrimination and so forth.
So we'd welcome the review, that because of the change in the jurisprudence since award modernisation there is a pressing need for the remaining wage assessment tools to be thoroughly reviewed and see whether it's appropriate for them to continue to be terms of this particular award. That's all I wish to say at this stage.
VICE PRESIDENT HATCHER: Thank you. Does that finish all the submissions in support of the AED Legal Centre's position? Yes. All right. You're next, Mr Ward?
MR WARD: I think I am, your Honour. My intention this morning is to make some general opening remarks.
VICE PRESIDENT HATCHER: Before you start off, we'll take a morning tea adjournment at about 11.30, if that assists you.
MR WARD: I'll try and work into that. I'll make some general opening remarks. I want to impress upon the Commission the distinction between an Australian Disability Enterprise and a commercial enterprise. I'll be asking the Commission, during the hearing of the evidence, to have that in the back of their minds at all times.
I want to then come to why this controversy has become so lively today and talk a little bit about what's led up to today. I'm then going to deal with our application, talk briefly about the AED application. I will then outline the evidence we have put on, both for our application and against the AED application, and I'll indicate to the Commission the findings we'll be inviting them to make. In so doing that I'd ask them to have those findings in their mind as they hear the evidence. Then I'll make some concluding remarks.
There's no doubt that for a particular part of the Australian community this case is of great import. It's also a very unusual case because while I stand here advocating for the interest of employers, I find myself in a position where, for the first time in my career, all of the employees in the room support the position I advocate.
We also appear to have garnered some union movement support, with the Australian Workers' Union and the South Coast Labour Council supporting the positon we advocate for as well. Intriguingly, our principal opponent is a community based law firm, not a trade union. So it is both a very important case but also an unusual case.
We seek to persuade the Commission to essentially do two things. We seek the Commission to maintain a variety of long-held processes for the setting of wages for employees with a disability in ADEs, but we also seek, and will explain why in some detail, we also seek to place under this a default safety net classification structure that actually describes the work performed, and the environment it is performed in, for employees with a disability working in ADEs and we are inviting the Commission, for the first time that we are aware of, to actually examine that work and value it.
VICE PRESIDENT HATCHER: So is it fair to say that what you're proposing is not a new assessment tool at all, it's a new classification stream?
MR WARD: You'll see some rancour about terminology in this case. We're not asking for a tool at all. We're not asking for anything outside the award at all. We want the award varied so that there is a classification structure with work valued by this Commission sitting there as the default for employees working in ADEs with disabilities.
VICE PRESIDENT HATCHER: Isn't there a tension between that proposition and maintaining the existing assessment mechanisms in that it may result in employer's, where the default is not used, paying people less than your new proposed classification structure?
MR WARD: Your Honour, I can't hide from that, there is a tension, and I'm applying a degree of industrial pragmatism in relation to that tension at the moment. As I will indicate, there has been a great deal of upheaval already in this sector and I think greater upheaval right now is the last thing it needs. We also have a number of proprietary tools where people are very wedded to them, but it is possible, over time, that we might end up with simply a classification structure with properly assessed wages in the award, rather than the use of external tools for ADEs. I'm not talking about open employment, I'm just talking about ADEs. But I have to concede straightaway there is some tension with that, but there is also tension and has always been tension, because we've got different tools. So it's not as if I'm creating a tension that's never existed but, yes, that tension is still alive.
We actually thought the valuation of work was perhaps the least controversial thing we could ask this Commission to do. We actually thought the inclusion of an ADE specific classification structure was the least controversial thing we could ask this Commission to do but it appears, from hearing my opponents open, that the contrary view is taken.
Now, I do ask you, when you hear the evidence, to turn your mind to not only the nature of an ADE but how it constructs the work process. To come to grips with that I should perhaps draw a comparison between a commercial enterprise and an ADE by way of example.
Superficially, an ADE may very well look like a commercial enterprise, but that fundamentally hides its true nature and it fundamentally hides the true nature of how an ADE constructs work process and work processes carried out.
Let's start with the commercial enterprise, and I may regret, in another proceeding, making these submissions but we'll see how we go. It's uncontroversial that a commercial enterprise, their primary motivation is profit and return to investors. That motive drives the organisation of work. Work is organised to produce products or services at the best quality but at the lowest cost and work process is designed to achieve the optimisation of technology and the minimisation of labour, where practicable.
Labour, in a commercial enterprise, is recruited into that model. People might very well be trained, but they're recruited into that model. While culture and engagement play a part to drive retention and performance, labour use is usually optimised through multiskilling and labour specialisation is largely the mains for high value activity. It's a feature of these enterprises, commercial enterprises, they continually seek to improve and, where possible, reduce the use of labour. They constantly seek to reduce the cost to produce and the cost to serve.
ADEs are neither motivated by these considerations nor do they adopt that model. The reason for their existence is to allow people with a disability to participate in work in an environment that is support, welfare and care based, not profit based. They provide an alternative to open employment, where that employment is either not available, not appropriate or not desirable. The ADE work process model, in distinction to a commercial enterprise, usually starts with the person with a disability, the client. Work is being sourced and designed to fit that person, not by degree but totally.
This involves the ADE in an enduring iterative process of de-engineering work to a point suitable to the employee, way beyond the modest modifications that Woolworths might make if they have one employee with a disability sitting in a workforce of 100 people who don't have disabilities.
That model is balanced also then against the need to source the work and you end up, and you'll see this on the inspections tomorrow and you'll see it through the evidence, some of the work is almost artificial in nature. That is, it is not work that you would ever see in a commercial enterprise, but it is work that can engage the individual in the ADE with their disability.
That work is sometimes very hard to source because, more often than not, in a commercial enterprise it's been replaced by technology or it's gone overseas, so the ADE is constantly struggling between finding work suppliers, de-engineering work so it can actually provide productive activity for its clients.
ADEs, in this context, stay afloat, and I don't want to make that a dramatic statement, but they literally just stay afloat, by a combination of payments from work suppliers, government funding and fund raising.
Supervision, in the context of an ADE, has very little to do with supervision in a commercial enterprise. Supervision is about welfare, caring support, life skills, sometimes very basic social interactions, it is not about corporate rules and optimising output. It's an environment that ADE employees work is a fundamental distinct environment from that found in a commercial enterprise.
The results of all this is to allow a discrete but important segment of society to participate in work. To build self-esteem, respect, friendships, life skills and a sense of self-worth and achievement for a very small number, and we have evidence, I think, on some of this, for a very small number is a starting point preparing them for transition into open employment.
It also provides an essential opportunity for carers. More often than not parents and, more often than not, parents very much in their old age. It allows them to enjoy a richer life with their children, as they move through adulthood. It also provides carers with critical time for respite from the pressures of caring, time to pursue their own employment and their own interests.
Industrially, that unique nature and role of ADEs and the way work processes operate has traditionally been acknowledged by some unions. I'll come to that and develop that in our closing submissions.
VICE PRESIDENT HATCHER: Is that a convenient time?
MR WARD: It would be a very convenient time, your Honour.
VICE PRESIDENT HATCHER: All right. We'll take an adjournment for about 10 to 15 minutes.
SHORT ADJOURNMENT [11.25 AM]
RESUMED [11.48 AM]
VICE PRESIDENT HATCHER: Yes, Mr Ward?
MR WARD: Thank you, your Honour. Let me turn to the media controversy, and our characterisation of that seems to be very much at odds with my opponents' characterisation. As I indicated to your Honour before the adjournment, we don't seek another tool, we actually seek to place into the award a classification structure with rates of pay for employees with disabilities working in an ADE.
VICE PRESIDENT HATCHER: Up to level 2?
MR WARD: No, full stop. Full stop. We want you to examine their work. We want you to examine the environment it's conducted in, the experience they bring to their jobs, their skills. We want you to examine it all. Now I'm going to talk about our application in a moment because at the moment, perhaps somewhat for convenience, we've adopted the pegging to the existing classifications in the award. We've done that at this stage purely for administrative convenience so people can see where those rates fall, but we would have assumed if the Bench were in favour of what we want, ultimately what simply would exist in the award is a set of classifications for people with disabilities working in an ADE and a set of rates of pay.
VICE PRESIDENT HATCHER: Sorry, but I thought 2.7 says that if you're grade 3 or higher you're assessed under the modified SWS?
MR WARD: Yes, and we accept that some people might very well do that particularly if they're in preparation for transition to open employment. Your Honour, I'm not suggesting for a moment it's not a complicated issue. We say that the Commission has never examined work carried out by employees with a disability in an ADE. We say they've never looked at that, classified it and valued it. What they have in fact done over the years is they've delegated the fixing of wages to a series of external proprietary tools and it appears that the delegation of the fixing of wages to external proprietary tools is what has caused the difficulties for the sector.
Now historically two of those tools were owned by the Commonwealth, the SWS and what is now called BSWAT. There will be different pronunciations for that from various people in the case but that's it. Some of the tools are owned by ADEs and are ADE specific. Some of the tools evolved in an ADE but have common usage and Greenacres' tool is a good example of that. And at least from an employer's perspective and the unions' perspective, all was running well until Nojin, and I might just provide some brief chronology that gives an understanding of context in that sense. I won't labour this. I just want to make half a dozen points about the chronology of events. I'll deal with this in much greater detail in closing.
The very first industrial regulation of people who were at that stage employees with disabilities working in what was originally called sheltered workshops declared in 1991. So industrial regulation of this sector is actually quite new. The supported wage system evolved in and around 1994 and was first included in awards of the Australian Industrial Relations Commission in late 1994, and I won't take the Commission to that decision today but I will in closing. It's unambiguously designed for open employment. Unambiguously.
We then have a period of evolution in the industry where between 2003 and 2005 the BISWAT is actually developed, and heavily engaging with what are now ADEs in this development and the primary award which is the old Liquor Hospitality and Miscellaneous Workers Union Award, which is a 2005 award which I'll come to in closing, that was actually varied in 2005 to include a reference to BISWAT. Mr Nojin's initial complaint arises in 2008. We then go through the modern award review process with all its delicacies and delights and we find the current modern award is made on 1 January 2010.
The Federal Court hand down a decision in Nojin in late September 2011 and the industry goes into a degree of turmoil because BISWAT is heavily used. The Commonwealth Government apply to the Australian Human Rights Commission for an exemption from the Disability Discrimination Act in relation to BISWAT. They do that in February 2014. They ultimately get a one year exemption. That exemption is extended 30 April 2015 for a further four months and at or around that time we have the very involved process involving Booth DP which started off as a fairly broad process and ultimately rendered down to a very narrow conversation which from my client's perspective is about smoothing some of the rough edges of the SWS, but not such that my clients embrace it as a single mandatory proposition.
Now in the context of that history I simply invite the Commission to be aware as it hears the evidence that the industry has gone through an extraordinary period of turmoil. It has been a number of years now transitioning from BISWAT, which had a very strong application, to other tools. I think the evidence will demonstrate when the Commission considers it that people didn't flock to the SWS. In fact what they've done as far as I'm aware and the evidence shows is they've moved to somebody else's proprietary tool. I think there's a strong take up of the Greenacres tool and a number of others.
But I want the Commission to be mindful that the fixing of minimum wages for employees with disabilities working in ADEs has been in a state of instability and turmoil for a number of years and that is highly industrially undesirable, and if the AED application is successful then rather than a stable safety net we'll have another period of exceptional instability and turmoil. Now let me turn to our application - sorry, I withdraw that. Our motivation in seeking to have the actual work done in ADEs examined and valued is to attempt to start a process of stabilisation. It's not to create greater instability but it's to start a process of stabilisation.
And your Honour the presiding member, in relation to the question you asked me it may well be that ultimately four people working in ADEs who have a disability, they might ultimately simply have an award with a dedicated classification structure for the work they perform and rates of pay. That may well be where we end up at some point - - -
VICE PRESIDENT HATCHER: That is some sort of phase out of assessment tools?
MR WARD: Yes. Yes, your Honour. It is possible. It's not a position we advocate for today. We don't do that because of the instability the industry has gone through. We don't wish to place it in any greater turmoil but we have to acknowledge that there is a tension between all of these multiple things and eventually one might come to that position. Now let me turn to our application. We would think - and we'll deal with this later in closing - but we would think it's self-evident that an award can contain a classification structure and rates of pay for people with disabilities. We would think that is self-evident from section 139(1)(a), section 134 and a proper reading of section 153 which we'll deal with next week.
Let me just explain the structure of the application and there's one part I said is there as much for administrative convenience and understanding. It is a part which is slightly controversial. I'll come to that. We've attempted to make this appear in a structure, a construct that is similar to anybody else's classification structure. Clause 2, if I can take the Commission to the amended application filed on 24 January, clause 2 sets up the machinery dealing with the requirement for the employer to classify. It deals with a variety of fairly standard matters about reassessment, reclassification and progression and those are common features of most machinery provisions associated with classification structures.
Clause 3 deals with the actual rates of pay. I'll deal with the proficiency element later; that is the A1, A2, A3, A4 issue later. Essentially the rates of pay relate to an entry level and four levels. We currently express the rates of pay as a percentage of a pre-existing rate in the modern award but we've done that largely for administrative purposes because it's the way the industry talks. If the Commission was inclined to grant our application we would have assumed that there would actually be rates of pay for classifications. Now they might be low in number, they might appear very modest, but that's what there would be.
I'll come back to the structure in a moment. Clause 4 deals with reviews of decisions to classify. Now given the nature of the employees' concerned this is perhaps a little bit more robust than one would find in a normal classification structure. In most classification structures there is a right to question how you've been classified and in most awards generally through the disputes procedure. But because of the nature of the employees concerned we've put a very specific review process here and we've provided a very broad scope of eligibility for people who might seek a review including legal guardians of the employee as well as the usual suspects, trade unions. We've included parents and perhaps somewhat generously, disability advocacy organisations.
One then turns to Annexure A which is the classification descriptors. We have attempted there to align those descriptions with the work that's actually carried out. Now we have where possible used language which this Commission would be familiar with but where that language is not apt for ADE workplaces and work processes we've adopted somewhat changed language.
VICE PRESIDENT HATCHER: So you've got the four levels.
MR WARD: Yes.
VICE PRESIDENT HATCHER: How do you apply the wage rates within the levels?
MR WARD: That's the controversial part of our proposal. It very well might be that the Commission was of a view that it should simply set the levels. It might very well be that the Commission decides that we should set the levels and maybe have an annual progression to some point based on the period of time the person actually spends in the workplace. The current application has an alternative methodology which looks at the proficiency of the individual and requires an assessment of proficiency. Now that's the controversial part of our application. It might be one that immediately gains rancour from the Bench in terms of classification structures.
Our working group had that conversation. They were quite vexed about that conversation. In a normal workplace - I withdraw that. In a workplace without people with disabilities, proficiency is normally rewarded on a discretionary basis. Some employees are always more proficient than others, and we've included that as a concept in the structure at this time. But we concede that that might not be something that the Bench are excited about in terms of creating a classification structure and minimum rates of pay. We acknowledge that, and it might be better simply to have the levels and/or some form of annual progression for a period of time as the person, the employee, becomes more comfortable to the work environment they're in. But at this stage we've put that proposition forward.
DEPUTY PRESIDENT BOOTH: Mr Ward, do you accept that if the Bench were to assign wages rates to each of these five levels - I include the training level.
MR WARD: Yes.
DEPUTY PRESIDENT BOOTH: That it could at no time be less than the minimum wage?
MR WARD: We say there's no problem with it being less than the minimum wage.
DEPUTY PRESIDENT BOOTH: So you'd say to the contrary to what I've just said?
MR WARD: You could set a wage rate - and I don't say this in - you could set a wage rate of $4 an hour. There's nothing - and we'll deal with this in closing, but there's nothing in the Act that prevents that. But to the contrary we would say that the Act contemplates that just as it contemplates setting the apprenticeship wages, junior rates and the like. We don't believe the Act in any way prohibits that. In fact we think the Act facilitates that and we think that's available to you. But we don't hide from that proposition. Mr Harding will obviously tell me I'm wrong and I'm going to explain why, but we're quite happy to take that debate on. That's fine.
DEPUTY PRESIDENT BOOTH: Thank you for that clarity.
MR WARD: Now you then come to Annexure B which is a set of definitions. The members of the Bench would be very familiar with the defining words used. We don't hide from the fact that words such as "personal support", "work support" et cetera are in there, because those specifically relate to the environment the work is carried out in. You will see that tomorrow, you'll see it on Wednesday and you will see that as you hear the evidence. Annexure C then discusses some indicative tasks.
I concede now that that might very well be better expressed but a lot of awards have references to indicative tasks to try and help the person understand whether or not somebody is entry level, grade A, grade B, grade C, or grade 1, grade 2, grade 3 or whatever. And then Annexure D relates to that proficiency element and explains how it's meant to work and as I say, the Bench might be immediately uncomfortable with that but we've included it at this stage for the reasons I've expressed. Now that is the application.
VICE PRESIDENT HATCHER: And this is confined to ADEs as a proposal?
MR WARD: Yes, your Honour. Can I say that's - - -
VICE PRESIDENT HATCHER: Is that reflected in the text somewhere, or?
MR WARD: If it's not in there, I apologise. I'll take that question on notice and I'll qualify it this way. This is meant to apply to employees with a disability working in an ADE. Full stop. Now if we've failed to make that clear in the drafting, I make it clear today. We have no interest in open employment whatsoever.
VICE PRESIDENT HATCHER: Then can I take you to clause 2.7 so I understand this correctly.
MR WARD: That's fine.
VICE PRESIDENT HATCHER: I read that to mean that if doing duties which would currently fall under the award grade 3 or above you don't use this system, you just use the modified SWS?
MR WARD: Yes, your Honour, I'm just trying to think where this might be in the evidence, and you might see this at Greenacre tomorrow. There are - you will potentially see some work functions in an ADE which are very akin to open employment. It will be rare but that might be the case and we're trying to find a way to accommodate that hence we've made those references. We might not have done it very well but I suspect when you're on the inspections you might see that, and in some way it needs to be accommodated. There are some persons employed by ADEs who are more than capable - I don't say that in a pejorative sense, but more than capable of working in open employment but for a host of reasons prefer to work in an ADE environment, and we were just seeking to try and find some way to accommodate that. We might have done it badly, by the way, your Honour.
VICE PRESIDENT HATCHER: With open employment -and I'm again looking at your 2.7 - is there any opposition to the notion that the modified SWS is the only method of assessment? This is open employment, not ADEs.
MR WARD: Your Honour, I'll have to take some instructions on that. It's not a question I've contemplated. Can I take that on notice?
DEPUTY PRESIDENT BOOTH: Mr Ward, if you're going to move off the variation I just wanted to ask you another question if I may?
MR WARD: Please. Please, your Honour.
DEPUTY PRESIDENT BOOTH: In relation to Annexure D "Upward guidelines" would it be fair to say that that element of the plan is your version of the modified SWS?
MR WARD: It wasn't constructed, your Honour, in that context. It was constructed more in a conversation that related more to the fact that some employees might be slightly more proficient at their tasks than others even though they're classified a certain way. I mean the analogy might simply be that you've got a mechanical tradesperson C10, you've got two of them but one might be slightly more proficient than the other. It was more in the context of that conversation that it came up, but we acknowledge it's a novel idea for a classification structure and we don't hide from the fact - we accept that it might not be something the Bench are particularly excited about.
DEPUTY PRESIDENT BOOTH: Sorry, I just want to test this other way of describing it.
MR WARD: No, that's fine.
DEPUTY PRESIDENT BOOTH: Would you say that Annexure D you've used the term "proficiency" - and you've just used it again - but would you say that it's really designed to ascertain distinctions between productive capacity as between individuals?
MR WARD: I can't disagree with that as a proposition, but within the organisation and between work colleagues in the sense that if I have four employees it's possible that one might be more proficient than the others. It's not the kind of Dickensian speed test that you get with SWS where the employee without a disability goes as hard as they can against the employee with a disability and you do a time trial. That's not what we had in mind.
DEPUTY PRESIDENT BOOTH: Although it does say in D3:
The employee with a disability output will be benchmarked against a person who has carried out the same task who does not have a disability.
MR WARD: It's true. It's true, but we didn't quite have the Dickensian approach that SWS has in mind.
DEPUTY PRESIDENT BOOTH: Perhaps avoid the pejorative description. Theoretically then given that - if I might ask I promise my last question for the moment - - -
MR WARD: Your Honour, you're entitled to ask as many questions as you like.
DEPUTY PRESIDENT BOOTH: Could you foresee a new classification structure being struck along the lines that you've suggested, and I note that the four levels, that is leaving out the training level, do rather turn in their distinctions on the degree of support required which is the other side of the coin of the degree of application or availability or attention to task that the employee displays, that you could have such a classification structure and then apply the Supported Wage System as modified to that, to get a similar outcome?
MR WARD: Your Honour, I had not contemplated whether or not you could theoretically do that. I suspect you could theoretically do that, yes. I'm not sure that that is the simplicity that we desire. My clients are keen to get to a world for an ADE that's not dramatically different from a non ADE in the sense that I have an employee, I assess based on a set of criteria that you're a level 1, level 2, level 3 and off we go. But your Honour, I think theoretically if you said there had to be an output element you could classify the person and then apply modified SWS, yes. Yes.
DEPUTY PRESIDENT BOOTH: Thank you.
MR WARD: Now this is a modern award review matter and in relation to our application we're mindful that it might be an iterative process, and what I mean by that is the Bench might form the view after hearing the case that there should be a classification structure with rates of pay specifically for ADEs. It might form a view that it identifies some key principles for that and then it might very well direct my interests into a conference with United Voice, the principal union in the industry, and others to put some flesh on that.
So we appreciate that this isn't a win or lose situation, but we would be encouraging through the case that we end up with some specific ADE classification structure with rates of pay for people with a disability working in an ADE and, as I say, if that ends up iterative, so be it. So be it. Now I just want to make some brief observations about just the AED application and I won't go into these in great detail but I just want to say it seems to be based, in our view, on a very particular reading of Nojin. We'll see to qualify why that is not an appropriate reading of Nojin when we come to our closing.
It seems to apply with respect to my learned friend a fairly tortured reading of section 153 and we seem to be very much at odds about what section 153 do, and we'll deal with that in closing as well. There is an implicit undercurrent in their application and their submissions I just wanted to comment on straight away. The word "competence" is not heresy. There's nothing wrong with that word. It's not flawed industrially, it's not flawed legally whether or not it's applied to an employee without a disability or an employee with a disability. The focus on a proper reading of Nojin isn't to say that anything that involves competency is unlawful.
The focus in Nojin was on whether or not the competencies that were being assessed were relevant to the work being performed and there was a substantial criticism of the physical assessment process. But it's very important - - -
VICE PRESIDENT HATCHER: Well, relevant to the duties required in grade 1 of the award is what the criticism - speaking for myself as I read it, the criticism seemed to be focussed upon the use of competencies that were not relevant to the duties that were actually set out in the award for grade 1.
MR WARD: Yes. Yes, well obviously including a classification structure specifically for ADEs would solve those problems once and for all. Now one of the issues that the AED Legal have to obviously overcome is they have no evidence from an employer. So they're trying very hard to build some of their case off the back of our evidence, and we'll see how they go with that. But you're going to be asked by them to make very material findings about the application of proprietary tools largely in a theoretical vacuum. That is it's a bit like seeking declaratory relief without any factual matrix.
So we would ask the Commission to be very cautious about how it approaches that exercise. It's not as if the Commission are being given evidentiary examples of how tool A is applied, tool B is applied, tool C is applied. It is very much a theoretical argument about what might or might not be in a tool and how it might or might not be applied, and that is not a very helpful thing for this Commission to have to come to terms with, and it's one of the very real challenges that AED Legal will need to grapple with. One of their other challenges is this. If we failed and they were successful - it might depend a little bit on how they were successful.
Let's accept for a minute they're successful and rates of pay for employees change, we raise a question as to how that can happen without a work value assessment. If rates of pay change just because of some administrative technical issue and the work hasn't change, how does that happen without a work value assessment. It's a bit like a union coming along and saying "Oh, we just want to crash levels 2 and 3 together" and the people in level 2 will obviously then get a wage increase. "Well, it's convenient to put these levels together, it should all be good". The question arises if you're going to do that, how has level 2 work value actually changed?
So one of the problems that seems to be arising here is if you were to agree to their application and the actual wages earnt by people changed that hasn't been done on work value grounds, and that will be something that we'll need to grapple with next week in some detail. Ultimately in our respectful submission we believe that AED Legal are advancing an agenda predicated principally on ideology rather than any industrial considerations, as amplified by the fact they're not an industrial party to these proceedings.
Can I turn to our evidence and the findings I'm going to invite you to make when you hear it. Our evidence effectively falls into four categories. There is evidence before you from persons involved in the management of an ADE. There is evidence before you from employees working in an ADE with a disability. There is evidence before you from members of families and carers of those employees and lastly, there is expert evidence from Mr Michael Smith who is probably the most knowledgeable person in this industry in Australia today. While we might seek the Commission to make some very granular findings, there's effectively 11 principal findings we'll ask the Commission to make.
I'll go through them fairly quickly just to you on notice. I see Deputy President Booth grimaced as I said all of them.
DEPUTY PRESIDENT BOOTH: No, I'm not going to be able to keep up.
MR WARD: If your Honour pleases.
DEPUTY PRESIDENT BOOTH: So say them.
MR WARD: If your Honour pleases. Finding 1 is that Australian Disability Enterprises fundamentally differ from open employment in terms of their goals, purpose and the model they adopt. Secondly, the ADEs in distinction to open employment specifically re-engineer work to accommodate the capabilities of the person with a disability rather than determine the most efficient form of work to produce profit and recruit into it. the third one is that the SWS even with its rough edges taken off was always designed for open employment and is not fit for purpose for an ADE as a mandated solitary tool.
The fourth is that the SWS has produced significant negative impacts on operations and their viability when it has been adopted. Next is that the award should contain a classification structure specifically designed to describe the work performed by employees with a disability in an ADE and that the value of that work should be valued by this Commission on its proper principles currently contained in section 156, and nothing prevents those rates being below the federal minimum wage. In relation to the evidence from the supported employees we'd ask the Commission find that supported employment plays a critical role in the lives of persons with a disability both financially and non‑financially, and as we'll submit later those matters are relevant to the modern awards objective.
The second finding in relation to that part of the evidence is that the viability of ADEs is critical to the employment of persons with a disability. In relation to the evidence from the family and carers we ask one finding; supported employment provides significant flow on benefits not only to supported employees but also to the lives of the families and carers that support them.
VICE PRESIDENT HATCHER: So are we up to number 8 now are we?
MR WARD: Your Honour, I might have dropped one in there. You know I'm mischievous when it comes to these things, your Honour.
COMMISSIONER CAMBRIDGE: I've got it at eight so far.
MR WARD: Thank you. Well, I might actually save one if that's the case, sir. In relation to Mr Smith's evidence, two findings; wage assessment methods such as the SWS that rely on a narrow definition of productivity do not take into consideration the particular circumstances within which ADEs operate and the way they organise work. And lastly that the use of skills and competencies in the determination of minimum rates are equally valid for workers with disabilities as they are for workers without.
DEPUTY PRESIDENT BOOTH: Mr Ward - - -
VICE PRESIDENT HATCHER: It's 10.
DEPUTY PRESIDENT BOOTH: It is 10, which is - - -
MR WARD: Well, I'm happy to rest on 10.
VICE PRESIDENT HATCHER: You can have another free one if you want.
MR WARD: I threw one away maybe. I'm happy to rest on 10.
DEPUTY PRESIDENT BOOTH: Could I just ask you to consider the distinction for me between skills and competencies? Do you advance a definition of a competency?
MR WARD: Your Honour, you can get a little bit tied up in this conversation. You could adopt - in an industrial context you could possibly say they're used interchangeably. You could possibly also say that there is a slight distinction in the sense that a skill sometimes is seen as a very granular, targeted proposition and a competency is about a more holistic concept about what you're actually doing. So I might be very well skilled to pick that cup up that's in front of me but I actually might be competent to walk in here, understand where the cup is and why I would pick it up.
DEPUTY PRESIDENT BOOTH: My knowledge is dated. It really comes from the early days of the development of skills based classification structures back in the 1990s, but I always defined a competency as skills, knowledge and attitude.
MR WARD: Yes. Yes, it's a broader concept.
DEPUTY PRESIDENT BOOTH: That are applied to the work. Is that meaning largely accurate to you, accurately to you?
MR WARD: I wouldn't argue with your Honour. If your Honour was asking me for a definitive answer, I'll take it on notice. But I wouldn't - it's a set of nomenclature which was developed after 1987 when we had the restructure and efficiency round, 1988 the structural efficiency round. It's a set of nomenclature which basically moved us from one paradigm to another. The original paradigm was, if you like, you had a job that was largely task based. I think about fights his Honour the presiding member and I had when we were younger - I should withdraw that immediately. We've never had any fights. You know, you operate that machine. It's a very specific machine and you're paid because you operate that machine.
We then moved to a world where you're actually an operator at large. You're possibly multi skilled, you have a variety of abilities, capabilities more broadly associated with the a job, the workplace, and we move away from simply saying "Well, I only pay you that when you do that machine" to "I'm paying you because when you turn up you have a variety of things you're offering the business". It was a long journey but it's in that journey that perhaps the phrase "competency" and "skill" either became intertwined or skill evolved into competency. Yes.
VICE PRESIDENT HATCHER: So going back to Nojin, and I might be repeating myself, part of the criticism seemed to be that at least at the level 1 work level which is described in the decision as process based work, that a lot of that is simply irrelevant. That is, it might apply at higher levels but at level 1 where you're doing basic tasks it's not really a relevant concept.
MR WARD: Your Honour, we can talk more about Nojin next week but my understanding of BSWAT was that it included a variety of generic competencies. One, that as I understand it may or may not have had anything to do with the job. Secondly, that the actual tests for those competencies was a pencil and paper test which fundamentally placed persons with an intellectual disability at a material disadvantage to people who didn't have that. So there's no doubt there that competency was a problem but it was more about the fact that they were generic and had no application to the work. Now we're trying to ensure that our proposal in these proceedings doesn't fall foul of that. Obviously if the Bench feel it does after hearing the evidence, they'll tell us.
VICE PRESIDENT HATCHER: Will your case - and I know this is difficult - will your case give any indication of the potential impact of the implementation of your proposal? That is, is it likely to have an effect one way or the other on wages actually paid currently?
MR WARD: I'm hearing lots of people say yes from behind me. The answer is yes. I think Greenacres' evidence will go specifically to that. I'm being nodded yes, that's good. In some cases your Honour will see that it actually increases rates of pay, and we've done that - now we haven't done that across the board but there is some evidence for you in relation to that. Yes.
COMMISSIONER CAMBRIDGE: Does that mean a decreased rate of pay?
MR WARD: I don't think it does, no. No, I think they either stay or go up, Commissioner, from memory. I'm not aware of any situation that it did decrease a rate of pay, and in any event there's industrial ways of resolving that if that unfortunately happened. That's not our intention, by the way. It's not our intention. Can I just conclude. Our case we say ensures that the modern award meets the modern awards objective and goes no further than that. Our case is squarely focussed at a fair and relevant minimum safety net relevant to ADEs and their employees, and fair to ADEs, their employees and their carers.
And as we will develop in submissions, we say our case invokes various limbs of section 134 unambiguously, in particular (1)(a), (1)(c), (1)(f) and (1)(g). We also believe our case properly gives effect to the notion of work value reasons as contemplated by section 156 and we'll develop that later as well, and we'll be obviously asking the Commission to dismiss the AED Legal claim and to grant our claim. Now as I've already said it might very well be that the Commission will form the view that our claim might be granted in an iterative process rather than "We're going to grant your claim".
That is something very similar to what has occurred in many modern award proceedings where the Commission has formed a preliminary view, explained the nature of that view and then referred the matter back to the parties for further discussions or conferences with members of the Bench, and that is an approach that on this occasion would seem to be appropriate if the Commission was with us in wanting to include a classification structure for ADEs with rate of pays in the modern award. If the Commission pleases, that is our case.
Can I just say by way of housekeeping, not wishing to mean any disrespect, I won't personally be attending the inspections. I've been. My colleague will attend the inspections and will assist the Commission in the gathering, meeting and process about how we're going to take you through those places. There are some statements of evidence that have been put on by persons, not by us, and to the extent that that is employer interest we'll try and assist the Commission by leading that evidence so that it's put on properly even though it's not actually our evidence. I think there's Mr - - -
MR WARD: Mr Fraser would be a good example of that. So we'll try and do our best to assist the Commission but - there's a couple. There's a couple anyway, so just we'll do our best to assist the Commission in that regard. That is our argument.
VICE PRESIDENT HATCHER: Yes. Thank you.
Mr Musso are you next?
MR MUSSO: Thank you, your Honour. I'd just like to make some brief statements on behalf of NDS and its membership if I may. NDS remains opposed to the AED variation to the award. There is no case for the arbitrary removal of wage assessment tools from the award without an examination of those tools on their merits. We do not believe that the tools breach the UN Convention or the modern awards objective or that the tools determine pro rata wages for employees with disability on a discriminatory basis. NDS believes that ideally factors other than the rate of an employee's productive output should be taken into consideration when determining a pro rata wage especially consideration of work related skills and competencies.
We have agreed to the inclusion of the modifications to the SWS in the award but we remain opposed to the SWS being mandated as the sole wage assessment tool in the award. Witness evidence in these proceedings will forensically examine the issues of wage determination in supported employment settings and will be subject to further consideration later in this hearing, and thank you, your Honours and Commissioner, that's all I have to say at this point.
VICE PRESIDENT HATCHER: Thank you.
Who would like to go next? Mr Amos?
MR AMOS: Yes. Thank you, your Honour. Your Honour, I appear on behalf of and in support of the 50-odd users of the SkillsMaster wage assessment tool, I being the designer and the developer and owner of the system, although I consider that the system is owned by the users of it as they are driving the continued development of the system. Many of the ADEs using the system are located in regional Australia which have their obvious disadvantage to organisations that are located in the metro system, and the majority of those ADEs are the only support organisation for people with a disability in the area, and I'm unaware of any of those organisations that have union involvement.
From my 30-odd years working in the sector both as an industrial relations advocate and a human resource management consultant, and further as a manager of an ADE employing over 150 employees, I have a pretty clear understanding of the industry, the way it operates, the problems associated with the industry and certainly the issues that all ADEs face on a daily basis regarding the employment of people with a disability. It's not an easy industry to work in. The industry cops a lot of flak from all sectors but the majority of that flak is really unsubstantiated and certainly not truthful.
From my experience I guess one could take the view that the users of the services, ADEs, have a much greater connection to the service than just an employee employer relationship. In fact the services provide lots of social support for employees outside of the work environment and I've been involved in a lot of that when I was a manager of an ADE. I remember one instance I attended the police station to try and get one of my employees out of jail and that took up a lot of time and effort by not only myself but other staff members that did it without any payment for what they actually contributed to it.
Although we all understand and acknowledge the role of the ADE in the community is to provide employment opportunities for people with a disability, sadly many of the regional communities and I suspect some metro services there are a number of people with a disability that would be considered unemployable within a different working environment due to their disability. Yet in regional communities these people are accommodated by the local ADE as there is nowhere else for them to go. They don't have the luxury of having day programs. They don't have the luxury of other services and they attend the ADE who treat them as employees even though they may have very little or no productivity
Many of these employees with little or no measureable productivity place the ADE in the position of needing to provide substantial additional support which would not be required of an employee where their contribution, their work restrictions due to their disability and productivity would be at a reasonable level having regard to the nature of the individual disability. Some may also take the view that the service is providing either a day service or a respite service for employees, their parents and guardians and carers.
Notwithstanding the special needs of these employees and the nature of the disability, all ADEs are subject to the same legislative provisions as any other employee(sic) throughout Australia. I'm sure the Commission is well aware of the service that these organisations provide for the community as this has been well documented over many years, and robustly advocated by many, no more so than Mary Walsh from Our Voice Australia that's here today. The Commission has been provided with two submissions from Practical Workplace Relations detailing the history of the SkillsMaster system including the methodology of the system and the operational manuals, together with our position regarding this matter, and we'll rely on those submissions to assist the Commission in making its determination.
To date from my reading of the many submissions and witness statements provided to the Commission, not one of the applicants in this matter has raised or challenged any issue regarding the content of the submissions by Practical Workplace Relations or challenged the position of Practical Workplace Relations, in particular the use of the SkillsMaster system or the authority of the Commission to vary the award and remove the system as part of a modern award review. In fact the only comments made by the applicant was that the SkillsMaster system should be removed, and that was it. No evidence, no nothing.
I do not intend to call any witnesses in this matter as the costs for many of the users of the system, being from regional Australia, is outside of their capacity to accommodate. Nor do I intend to cross‑examine any of the witnesses as I have not seen any submission or witness statement that directly challenges the methodology used by the SkillsMaster or the wage outcomes determined by the system. What I do rely on together with the users of the system is the undisputable facts based on the system being used by ADEs for some 25 years without any dispute regarding the use of the system other than employees requesting a review of the wage calculation in accordance with the system procedures.
We can see no logical or justifiable or reasonable argument to change the current award provisions as the award has served the industry requirements since the inclusion of the wage assessment tools as a consequence of the Commission wage review of 2006, other than these tools that are no longer used or required. A bit of history about the SkillsMaster. The SkillsMaster system was initially developed in the early 1990s and I might add for my colleague here the difference between skills and competency.
I was on the working party of the metalliferous and black coal mining industry development crew developing competency standards for that industry back in the late 80s so I have a pretty clear understanding of the difference between skill and competence, and that's contained in my submission also. The SkillsMaster system was originally developed in the early 1990s as the majority of the ADEs at the time were covered by each state industrial relations jurisdiction. No one was covered by the federal jurisdiction because they had to be roped into the federal award at that time and no one was, and with no provisions in the state industry awards to pay wages less than the award rate of pay, other than to seek through the department what they then called slow work permits, we decided to develop enterprise agreements for the employees that were working in ADEs and incorporated the SkillsMaster system into those agreements.
It should be noted that the SkillsMaster was in place well prior to the Supported Wage System. In the initial agreements - the initial agreements were critiqued by the local Newcastle branch of the AWU, the Australian Workers Union, who supported the use of the system notwithstanding the fact that the union were not a party to the agreement, for no other reason than they didn't have any members that worked in an ADE. But we felt it important at the time that we actually have the agreements, the system, critiqued by a union and by the union movement to ensure that it met all the requirements of the Act at the time.
Many of these agreements incorporating the SkillsMaster system are now all from fifth generation agreements and since 2009 in most cases have been approved in the federal jurisdiction by this Commission. In fact a number of those agreements have been approved by a member of this Bench today.
Over recent years there has also been enterprise agreements approved in the New South Wales Industrial Relations Commission containing the SkillsMaster system where in one case the United Services Union critiqued the system and supported its inclusion by being a party to the agreement. It should also be noted that the Commission made a statement during those procedures congratulating the parties for using the system that the Commission felt was fair, transparent and provides the advancement through the training provisions of the system of all employees.
As I'm not totally familiar with the workings of the modified supported wage system or the other applications put forward to vary the Supported Employment Award 2010 I did not intend to advocate a view or to support or rebut the applications other than to say, from my reading of the information provided in the submissions, it was established that the modified supported wage system and the ABI system has a number of identified issues that would need to be addressed before any decision to include it in the award as made. In fact, the whole thing is totally confusing and it certainly would be confusing to employees to understand it.
VICE PRESIDENT HATCHER: Mr Amos, is the SkillsMaster system contained in a document that's in the materials somewhere?
MR AMOS: The manuals were provided in the documents that I sent to the Commission. Both ‑ ‑ ‑
VICE PRESIDENT HATCHER: Right.
MR AMOS: Yes.
VICE PRESIDENT HATCHER: Thank you.
MR AMOS: In regard to the ABI's application we would have no objection to the inclusion of a more detailed classification structure specifically for employees with a disability and in fact this is exactly what the SkillsMaster system does. It breaks the classification structure down into more detailed tasks so the employees have a clear understanding of what's actually required of them in the workplace. The job models contained in the system have units of competence and attached to those units of competence is elements and then attached to those elements is the performance criteria which is exactly the same method that's used by the national training board and the development of all competency standards in Australia and it's used through all training organisations, universities, TAFEs, so this is no different from what's out in the general workforce. In fact, there's a number of awards that actually specifically contain competency standards as part of the award to determine wages.
So we would have no objection to the inclusion of a classification structure specifically for people with a disability but we would object to each of those tasks within the structure being linked to a specific rate of pay. I expect that would be too cumbersome and too hard to administer. In fact, it seems to me that they're trying to re-invent the wheel here. Having said that, I'll leave it up to the wisdom of the Commission to determine those applications based on the evidence presented to the parties.
In relation to the evidence provided by ADE and Mr Cain in particular I've only had two dealings with Mr Cain and ADE over my entire career; one was back in 2002 where Mr Cain sought to intervene in a matter and at the end of the day that ADE went into liquidation, and the second one was the BSWAT tool, and it might be also said that both of these matters, which one was located on the north coast of New South Wales and the other one was in Melbourne, Mr Nugent was involved in both of those matters. So one would ask the question who is supporting who here? Is ADE supporting people with a disability or are they supporting or coercing Mr Nugent into action.
VICE PRESIDENT HATCHER: Mr Amos, can we just stick to the issues, please?
MR AMOS: Yes. My submission in this matter is to advocate the retaining of the SkillsMaster system and the pro-rata award based wage assessment tool in the support of the Employment Services Award 2010. I will not be attending further days unless I'll be required to by the Commission to answer any questions the Commission might want to ask. As I'm a retired person and I'm not being paid for attending here today. I'm certainly not requesting any of the users of the system to support my attendance here today either. Thank you. If it pleases the Commission.
VICE PRESIDENT HATCHER: Thank you. We might adjourn for lunch now and resume at 2 o'clock. So who will be next? Will you be next Mr Stroppiana?‑‑‑
MR STROPPIANA: Yes, your Honour.
VICE PRESIDENT HATCHER: Yes, all right. We'll receive your submission at 2 o'clock. We'll now adjourn.
LUNCHEON ADJOURNMENT [12.50 PM]
RESUMED [2.04 PM]
VICE PRESIDENT HATCHER: Yes, Mr Stroppiana?
MR STROPPIANA: Yes. Thank you, your Honour. Your Honour, I refer to the outline of submissions already filed on behalf of the Endeavour Foundation and rely on those written submissions and just make some additional comments if I may.
The Endeavour Foundation is the single largest provider of supported employment in Australia. We have approximately 30 sites which span ‑ ‑ ‑
MR HARDING: Your Honour, can I just interrupt at this stage. I can't hear the submissions in Melbourne.
VICE PRESIDENT HATCHER: Just hold on a second. Do you have a microphone there, Mr Stroppiana?
MR STROPPIANA: Yes, I do. Is that better?
VICE PRESIDENT HATCHER: Can you hear them now, Mr Harding?
MR STROPPIANA: Is that better?
MR HARDING: Yes. Yes.
VICE PRESIDENT HATCHER: Thank you.
MR STROPPIANA: The Endeavour Foundation is the single largest provider of supported employment services in Australia. We have approximately 30 sites across three states with the majority of our operations up in Queensland.
The majority of our supported employees are assessed using the Greenacres tool. A smaller number of our Victorian employees are assessed using the SkillsMaster tool and a smaller number of our employees are also assessed using the Greenacres tool. It's the position of Endeavour that the system is always operated with a combination of both industry wage assessment tools and the supported wage systems tool, and we say that that's an appropriate blend and mix and we are advocating for that to continue. Certainly there are employees of the Endeavour Foundation who have gone beyond the skills and capabilities contemplated by the Greenacre tool and it's appropriate that they are assessed under the modified SWS tool.
The Endeavour Foundation does not own any of these tools. We are simply an operator within the industry and as I indicated we predominantly use the Greenacre tool. So we have decided to appear to ensure our position is heard which is in essence to oppose the application brought by AED Legal to amend clause 14.4 and remove all tools except for the modified SWS tool. Our position is that the Greenacre tool provides a fair and reasonable basis to assess the wage rates for the majority of our supported employees and we will be urging, based upon the material we filed, that the Greenacre tool be retained in clause 14.4.
Your Honour, our outline of submissions cover off the statutory framework. I don't know if it's already been dealt with to a large part by previous advocates so I wasn't planning on spending any time in going through the statutory framework under the Act. It is our submission, however, that the Greenacre tool does provide a fair and reasonable method for determining wage rates for employees with a disability working in our ADEs. Our employees are predominantly employees with an intellectual disability which range from mild to substantial. This impacts the range of tasks and duties an employee may be able to realistically undertake. Given these realities it is the case that jobs undertaken by employees are broken down into much more narrower tasks such that they fit with the skills and competencies and capabilities of an employee to be able to undertake the task. No doubt this will be a matter which be ventilated in a great deal of detail and it is certainly covered off in the material we have filed.
I'd like to just spend a little bit of time talking about the nature of supported employment. I don't plan to take a long time given the representative from ABI has already at length spoken about the nature of ADEs, other than to say that supported employment is a very unique form of employment and it provides an opportunity for work and inclusion for people with a disability who would otherwise likely be unable to obtain employment in the open market. The definition of supported employment services is contained in the Disability Services Act at section 7, and the definition provides that supported employment services means:
Services to support the paid employment of persons with disabilities being persons: (a) for whom competitive employment at or above the relevant award wage is unlikely; and (b) who, because of their disabilities, need substantial ongoing support to obtain or retain paid employment.
Similarly the definition of employee with a disability contained in the Supported Employees Services Award at clause 3.1:
Employee with a disability means a national system employee who qualifies for a disability support pension as set out in sections 94 or 95 of the Social Security Act 1991 or who would be so qualified but for paragraph 94(1)(e) or paragraph 95(1)(c) of that Act.
I'm not going to claim to be an expert or refer you to those provisions other than simply to say that supported employee by its very nature is employment specifically targeted to people with a disability who are in receipt of the disability support pension and it provides to them an opportunity, and it provides to the 20 to 41-odd thousand supported employees throughout Australia an opportunity to gain paid work and to be included in the working economy which otherwise, we submit, is unlikely to be the case if supported employment was not available.
What we say is that the supported wage system is an appropriate tool for use in open employment, however the dynamics of open employment and employment within an ADE are very different, and has already been indicated the nature of the work undertaken in an ADE in many cases does not exist in the open employment market, and by that I mean because jobs are broken down into smaller distinct parts in an open market an employee would not be paid for such a small and narrow range of tasks, so we say that the SWS tool is not an appropriate tool to assess wage rates for all employees in ADEs particularly for our high support needs employees.
In the outline of submissions we touch on the Nojin case and we say the Nojin case is not an authority for a proposition that the simple inclusion of competencies in a wage assessment tool makes such a tool fall in breach of the disability discrimination Act. We would say that the shortcomings identified with the BSWAT tool in the Full Federal Court decision in Nojin are not present in the Greenacres tool and we'll be relying upon them and drawing out our evidence in that respect and obviously this will be a matter for final submissions.
We will also be saying that a move to adopt the modified SWS tool to the inclusion of any other tool will pose a very substantial financial burden upon the industry and it is the evidence of the Endeavour Foundation that in all likelihood this modified SWS was the only tool available for assessment of wage rates for supported employees that would result in closure of centres and/or centres vastly reducing their numbers of employees.
VICE PRESIDENT HATCHER: Can you briefly explain why the modified SWS has that result, that is, what it does that, for example, the Greenacres tool is not currently doing that would cause you to have to pay more?
MR STROPPIANA: We rely upon the evidence contained in the statement of Mr Donne, but if I can touch on that briefly, that evidence is that the experience from the trial of the modified SWS and the results of that trial resulted in wage rates substantially in excess of wage rates as a percentage of the relevant classification rates in the award. It resulted in a substantial increase in those percentages. So if we replicate the results of the trial across our workforce there would be a substantial increase in our total wages bill.
VICE PRESIDENT HATCHER: Is that because it measures productivity only at a point of time or at least for 50 per cent or for some other reason?
MR STROPPIANA: We would say there's numerous reasons and one of those reasons would be that the measuring of productivity in context of some of the roles that are done in ADE are very problematic. For example, roles which are undertaken as part of a team or roles which are very, very narrow in their definition it's extremely difficult to measure productivity. Maybe if I can, by means of an example, from the award if the grade 2 classification in the award for a task such as specialised packaging, and packaging is something which occurs at a lot of ADEs, under the heading of Specialised Packaging on page 37 of the award lists a whole range of tasks from sorting manually, labelling, folding, stacking, use of hand trolleys, pallet trucks, taping, heat sealing, et cetera, et cetera. What we say is that because in an ADE someone undertaking the specialised packaging role may do only one of those dot points or may even do a portion of one of those dot points. So what we say is that in that context it's extremely difficult to use a tool which measures productive capacity alone to set a fair and reasonable wage rate. So that's certainly one aspect of it.
The other aspect we say is that where a job is broken down to such a narrow task an employee may well be quite productive over a short period of time being measured undertaking a very simple task that may well be attaching a label to a box, but what we say is that's not a true and fair reflection of productivity given that outside of that narrow window the productivity of that employee may fluctuate and/or, you know, if for example boxes stop coming down the line the employee may or may not have the capacity to, you know, seek out and find out what's occurred and solve that solution, so there's a whole variety of reasons we say that assessment of productivity alone is not a fair and reasonable measure.
Your Honour, that's all my submissions unless there's anything else.
VICE PRESIDENT HATCHER: Thank you.
MR STROPPIANA: Thank you.
VICE PRESIDENT HATCHER: Mr Christodoulou?
MR CHRISTODOULOU: Thank you, your Honour. I rise to address four issues; one is of course to oppose by AED Legal; secondly, to support the ABI classification structure approach; thirdly, to be very clear that I think the time has come to imbed in the award, whatever the decision the Commission decides with respect to wage determination, rather than to have wage tools sit outside the award; and fourthly, I will address very, very briefly, because Ms Walsh from Our Voice has not yet talked on this issue, our support for the rights of work for supported employees clause.
Greenacres has filed two submissions in these proceedings and a number of witness statements from both supported employees and carers. In addition to the submissions I am about to make to oppose the AED Legal and others in terms of their variation I would indicate that we do support, as I've indicated, the ABI proposal and we also support the generality of the submissions that have been filed thus far and spoken to by the Endeavour Foundation with respect to the Greenacres Association competency based wage assessment scheme which I'll refer to from here on in as the Greenacres tool. We also agree with Mr Harding that in fact the onus does fall on AED Legal to provide all the reasons why the Greenacres tool ought be removed or the reference to the tool ought be removed from the award.
We will set out to establish in these proceedings that the very nature of how disability enterprises operate and the purpose for which they exist which is to provide supported employment will be significantly impacted should the SWS be the only wage assessment mechanism available to disability enterprises, and I will, in what I'm about to talk about, your Honour, try to address the question you've just asked in relation to how that is so.
We submit that the Nojin decision of itself did not have the privilege of any Full Bench decision of this Fair Work Commission to have considered the issue of wage determination for supported employees, and we say that it is this tribunal that ought make those findings as to what the most appropriate mechanism. Nor in the Nojin decision was the immunity of section 47 of the Disability Discrimination Act argued. We say this tribunal has the expertise to determine all like things in relation to employment, not the least being classification structures and in this case how best to determine the wages for supported employees.
Section 47 of the Disability Discrimination Act recognises the role of this tribunal. The fact that section 47 does exist in the Disability Discrimination Act is a sure sign that the determination of wages for people with disabilities is neither a simple or straightforward matter. We believe the evidence will show that the SWS was created specifically as an assessment tool to assist people with disabilities into open employment. The SWS was regarded as inappropriate for the industry when it was developed and we will argue that it's still inappropriate for the industry now.
We would ask the Full Bench in reviewing the Supported Employment Services Award to look at the objects of the Act and also to look at the statement and the objectives that were set out in her Honour's statement in AM2013/30 which was issued on 15 October 2015. Greenacres will contend that the issue of wage determination of supported employees in disability enterprises is a very complex matter and this Fair Work Commission must have high regard to the implications of its decision, both on supported employees, their carers, and the organisations which employ them.
The evidence that we will bring, and I think this won't be disputed by our friends from AED Legal, is that the reforms in the sector date back in 1986 with the introduction of the Disability Services Act. These legislative changes forced then sheltered workshops to have to recognise that people don't support it as employees and to provide them with real employment rights. If they didn't change, that is they didn't make that transition, they would no longer receive funding from the Commonwealth and organisations like Greenacres would not be in existence now. The evidence will also show the reforms were driven by the recommendations put forward by the Ronalds Report titled National Employment Initiatives for People with Disabilities which was released in August 1990. This report made a range of recommendations to secure more people with disabilities open employment outcomes whilst at the same time converting those people with disabilities engaged in sheltered workshops as employees with rights of work. The evidence will also show that the ACTU back then was very much involved in both those strategies.
It was also back then that the ACTU had recognised that for both cohorts, that is both for people with disabilities that would go into open employment but also for people with disabilities that were in supported employment, that they had to recognise that both cohorts would receive something less than the full award rate. This outcome and this recognition was also based on the fact that people with disabilities would also continue to receive their pension and other entitlements which would also supplement their income, and I'll talk a little bit about that supplementation a bit later on.
At the time history shows that there were a range of advocacy groups calling for the complete shutdown of sheltered workshops and for the government to only pursue the option of open employment outcomes. The evidence will show that some of those advocacy groups in these proceedings at best only want disability enterprises to only play a role in assisting people with disabilities to work in open employment. At worst the evidence will also show that they would be happy to see an end to what they describe as segregated employment. They would say that in these circumstances the government should intervene if disability enterprises were to close down and try to find supported employees jobs in open employment or alternatively move such persons across to other disability programs.
As well intentioned as some of these positions may seem the evidence will show that artificially lifting wages by imposing an SWS for supported employees will not achieve the outcomes of open employment; in fact, they'll have the opposite effect. That is imposing the SWS will put many supported employees out of work and the likelihood of them obtaining open employment will be negligible. The labour market in Illawarra where I'm from is difficult enough for people without disabilities to obtain employment let alone people with disabilities who require ongoing support. In this regard we support the submissions of the South Coast Labour Council dated 11 December who very much understand the critical role of organisations like Greenacres, the Flagstaff Group and the Disability Trust to provide supported employment in our environment.
Greenacres will bring evidence to show that if the SWS is the only wage assessment vehicle available to our enterprise it will lead to significant job losses and in our case potentially could even lead to the entire closure of our enterprises. We will bring evidence from supported employees and their carers to show that such an outcome will devastate the lives of people with disabilities both economically and socially, and some of those people that have put those affidavits or witness statements are here with us today. For Greenacres closing our disability enterprises or substantially restructuring our organisation with major job losses would actually save Greenacres over $500,000 a year and free up capital. So from a business perspective it would be good, but, as I've indicated earlier, it would actually devastate the lives of the very people we are here to support, that is our supported employees, not to mention the staff that also support such supported employees.
We say the imposition of a productive output method of assessing wages alone such as the SWS without looking at skills is inappropriate in a working environment of a disability enterprise, and is not in keeping with the traditional way that this Commission has determined wages for people without disabilities. Greenacres believes that determining wages based on how fast a person works is archaic and would be unlikely in 2018 that the Fair Work Commission would adopt such an approach of wage determination for workers without disabilities. These concerns were expressed by the Australian Workers' Union submissions filed on 8 December about the potential for that approach to be pushed by employers more generally, in particular the SWS only measures productive output against only the tasks that supported employees can only carry out to a quality standard and not all the duties or tasks that one might expect of a grade 2 worker. It makes the SWS a perverse way of assessing wage levels for people with disabilities.
So if I could just answer the question that you did ask my friends, your Honour, what it does mean, and you'll see this and hopefully be able to observe this in the inspections, is that we have a range of people that, for a whole host of reasons, have a low level of skill. We provide them with employment opportunities with very simple or basic tasks, so they may well be packing things in a box. I did actually bring for observation only one of those such boxes where we have at a low level people will pack a number of satchels in this box. They may be able to be provided with those satchels and they'll sit there most of the day as long as the material is in front of them and pack. They may be able to pack quite quickly. They may be able to pack it as quickly as myself or yourself, your Honour, but beyond that they don't have the initiative to take up other tasks of a more complex nature. This is low level work for Greenacres, and if the people with disabilities were assessed under the SWS as having to pay a higher wage because they can pack into this box as quickly as you or me, and they were to get 100 per cent of the award wage, then of course we would lose that contract.
Conversely, we have skilled employees that are employed at a much higher level who sew. They sew things like these scarfs. Now, those people at a higher level that sew are actually – because of their skill, understand WHS issues more, understand quality issues more, can communicate better, can do a range of different tasks but their predominant work is sewing. Under the SWS, because you measure what people mostly spend their time on, in that particular case those employees would in all actual fact sew much more slowly than a qualified machinist.
So therefore the perverse outcome would be that the person packing more quickly in a box, who doesn't have as many skills as the person who sews this garment, will end up being on more money than the person that sews the garment. The person who packs in this box will lose their job because the cost of procuring that work will go up and the contract will go to another organisation.
VICE PRESIDENT HATCHER: The work packing the box, what level was that graded at?
MR CHRISTODOULOU: At our level, that is a level A under the Greenacres tool.
VICE PRESIDENT HATCHER: By reference to what award classification?
MR CHRISTODOULOU: Grade two.
VICE PRESIDENT HATCHER: And the sewing?
MR CHRISTODOULOU: The sewing is at our level E.
VICE PRESIDENT HATCHER: Which is in the award what?
MR CHRISTODOULOU: Grade two, because it's straight sewing, it's not intricate sewing. So I just wanted to raise that issue. We will for the purposes of the evidence be able to demonstrate that people with disabilities come to Greenacres and work at Greenacres in the absence of the open employment market being able to provide them with a supportive and inclusive workplace environment. In the vast majority of cases – in fact I can't think of one case at Greenacres where there is an employee who is not with us because they don't want to work at Greenacres.
We provide a whole range of other activities non-associated with work but which we undertake in work time.
VICE PRESIDENT HATCHER: Under the Greenacres tool, how many pay increments are there at each award level?
MR CHRISTODOULOU: There are three increments. They are based on productive output so by that, I mean that – and it is different to productive output as measured by the supported wage system which is a benchmark as against a person without a disability. The productive output at each skill level within the Greenacres tool is really as against the cohort. So if you have 10 people that work under level A, those that can produce more output will get more money than those that produce less output but within the level.
Your Honour, at Greenacres we also provide, as I'd indicated, a whole range of supports well beyond what a normal commercial operation would. Indeed, we provide training and social interaction in terms of both vocational and non-vocational matters. We will bring evidence to show that that training is done both individually and collectively in both large and small groups. We will show the myriad of training that we do through the evidence that we will provide and including in the last 12 months specific training that we've provided to specific supported employees around the question of domestic violence and sexual abuse because that is an issue that disproportionately affects people with disabilities in our society.
These are things that the SWS would not pick up in terms of the cost of operating a disability enterprise. We will be able to bring evidence to show that at our regular monthly paid work meetings that we discuss a whole range of different issues of our supported employees – everything from inappropriate behaviour through to travel safety on the bus through to participation in events like Relay for Life. The evidence will demonstrate the degree of repetition that is necessary at those meetings on a whole range of issues on topics that would never be discussed in open employment or need to be reinforced in an open employment environment. The SWS cannot capture the down time associated with all of this type of support, not to mention the myriad of counselling sessions to deal with supported employee behaviours and problems. We maintain that disability enterprises are an inclusive and supportive work environment. We believe the one-size-fits-all approach of the SWS doesn't adequately also address the diverse range of disabilities or indeed capabilities of supported employees, nor in the case of Greenacres is diverse range and turnover of work that we have on a regular basis.
A simplistic approach of timing the output of supported employees subject to quality issues will create perverse outcomes and lead to artificial increase in wage costs, in particular for low-value work whilst the adverse in relative terms for many higher-skilled supported employees who may in fact receive less. Now, this proposition that I've just put to the bench is also actually explicitly supported in a previous government submission to this Commission in 2006, which we will of course bring to the Commission's attention in due course.
The nature and undertakings of the contracts that Greenacres have with its customers, coupled with the working environment we provide, renders the use of a productive assessment system like the SWS not appropriate and would make our operations unsustainable. We will bring evidence that the SWS will greatly inflate the price of labour carrying out the simplest of tasks and such increases will not sustain the customer base that we have. For our part, Greenacres is very confident of our assessment of the implications of forcing the SWS on our organisation, let alone the industry, and cannot – this cannot be underestimated by the Commission.
Our own estimates are that at the lowest end, it would cost an additional 50 per cent but in some scenarios it could be a 100 per cent increase in our wages bill. The cost of disability enterprises of implementing the SWS will also be further supported by the evidence we've already seen from other organisations and again, not the least being submissions that have been brought to this Fair Work Commission by previous federal governments which showed on an analysis that to move to the SWS would cost the industry 59 per cent in increased costs.
We will bring evidence to show that when combining wages of supported employees currently under the Greenacres tool, with their pension and other entitlements that most supported employees are actually much better off financially than if they were an employee without a disability being paid a minimum wage for the same hours work. That is something that should not be lost on this Commission. The evidence will also show conversely that if the supported employee does lose their job as a consequence of organisations such as Greenacres needing to restructure, on average they will actually lose $125 a week of disposable income when they move back to the pension.
For many of our supported employees who live independently or live in low-income households this will have a devastating effect. Greenacres contends that job security for supported employees is a major part of inclusion in Australian society and the bench needs to consider this primary obligation it has under its objects. If I can deal briefly now with the Greenacres tool, Greenacres contends that our tool is a valid approach to determining wage levels for supported employees. It was developed having regard to the Mayer Key Competencies which were competency standards considered by many training institutions at the time as essential for all employees to have.
Therefore, that is why the Greenacres tool is a hybrid tool – that is, once a supported employee has achieved level EA under the tool, the employer can have that supported employee assessed under the SWS. This is because the tool is predicated on the fact that a supported employee who reaches that level under our wages estimate tool could have sufficient skills to work in open employment, should they wish to, with the support of a DES or other like such program, DES being a disability employment service. Each skill level under the Greenacres wage tool is determined by three components underpinning work skills, task skills and the productivity component which I mentioned earlier, all of which are outlined in the tool and all of which have been filed as part of our evidence.
Greenacres will also provide evidence to show the process we use to authorise supported employees moving up the skill levels is both rigorous and transparent and discussed with supported employees and/or their carers. Wage assessment is done by in-house trainers and historical records are kept for all our supported employees in terms of the development or otherwise of their skills and their capabilities against the criteria in the tool. Discussions about how a supported employee is performing at work also occur at our regular, individual planned meetings. Ultimately, we do have a grievance procedure that can involve our union, United Voice, or an advocate if the supported employee wishes or their carer to have any issue around the rate of pay discussed and dealt with. Greenacres contends that supported employees should be treated like all other employees and have their wages determined by their appropriate level of support and supervision and the value of their work but relative to the tasks and duties that they are capable of performing. Now, having said all that, no tool is perfect and during our enterprise agreement negotiations with United Voice, back in 2014, we did both agree that we need to review the tool, but we also agreed, given that these proceedings were going to be on foot to wait till the outcome before we did so.
We've outlined in our written submissions that were filed just some of those changes that we would contemplate wanting to make to the Greenacres tool, should it remain in the award. That is because we have 50 other organisations that utilise the tool and certainly from a Greenacres perspective the tool was developed more than 15 years ago and would require further adjustment. Now, on that note, we do believe that if our tool is to remain or indeed other tools are to remain or indeed the reference to the SWS that all of those tools should in fact be embedded in the award. That is because we don't believe having tools referenced and sitting outside the award actually places the necessary obligations on employers from the point of view of enforceability.
The SWS provides a set of guidelines. I'm not sure what happens when someone doesn't follow the guidelines in terms of how they are enforced in terms of enforceability.
VICE PRESIDENT HATCHER: When you say, "embed", them, you mean somehow attach - - -
MR CHRISTODOULOU: Yes.
VICE PRESIDENT HATCHER: - - - as a schedule like the SWS says?
MR CHRISTODOULOU: Yes – well, the SWS actually – I'm not sure that all the guidelines are attached to the award. They are not. They say, "the guidelines", so I'm not even sure whether that means they don't have to be totally enforced. You either have an award that prescribes an obligation on employers and those employers have to make sure that they abide by those obligations or you don't and I don't think having a set of tools that sit outside the award that could be subject to change by anybody, I presume – we haven't other than with our EBA, we've made some modifications – is a good way to proceed.
VICE PRESIDENT HATCHER: That would require us to assess every single existing tool and have some knowledge as to how they work and what outcomes they produce, wouldn't it?
MR CHRISTODOULOU: Well, I presume that would be what the Commission may have to do in those circumstances and of course if you went down that route, your Honour, there would have to be a period of time for that to occur. I simply raise with you this issue because from a Greenacres perspective we have organisations ring us and say, "Look, we'd like to use your tool." We say, "That's fine",' but we can't be sure that those organisations are implementing the tool in the correct way, nor do we want to be, or should we be, the organisation that needs to enforce that obligation upon them.
So from that point of view we do agree with the approach and I think it has even been raised in AED Legal's submissions, that whatever the wage determination mechanism ought be, it should be embedded. To some extent that's why - I'll talk about this in a moment - we think the approach adopted by ABI might well be the best approach for the future.
VICE PRESIDENT HATCHER: One alternative, speaking only for myself, is that the award could specify a series of increments - say 10 per cent increments - at each level, identify a set of conditions or principles or propositions by which the level is to be assessed and then leave it to each AED to work out how to apply that in practice.
MR CHRISTODOULOU: Yes.
VICE PRESIDENT HATCHER: On the basis that if someone disputes it, they can either go to a court and enforce the award or utilise the dispute procedure.
MR CHRISTODOULOU: That could very well be another way of determining it, your Honour. I will continue on. This will be the first time that a Full Bench of this Commission has had to arbitrate on what is an appropriate way of determining wages for supported employees in disability enterprises since the creation of a modern award system. We contend that this Commission should determine that supported employees should have wage levels determined first and foremost by virtue of their skills and capabilities.
Greenacres believes that the bench should have regard to the history of the development of classification structures in awards when determining the wage assessment criteria and should apply the same principles to supported employees as they had to the rest of the workforce when looking at wage determination. One only has to look at - and my friend Mr Ward indicated this - classification structures, including the Manufacturing Industry Award, to see the words "skill" and "competency" scattered throughout those structures.
I would suggest if a proposal ever came forward that workers in his country have their wages determined purely on individual productive output versus the current system where they are classified as against a skill level based on their duties, there would be outrage by the trade union movement at large in terms of such propositions. Why should only people with disabilities have their wages assessed primarily on their productive output rather than on their skills when the consequence - the perverse consequence - could be that they lose their job? That would, in my view, be discriminatory.
If the Fair Work Commission wants to decide that the SWS through arbitration is the best method of assessing wages, would it not actually be saying there should be one system for people with disabilities and a different system for people without disabilities? That is why we say first and foremost that the Commission should decide that it would base a wage assessment system based on skills first and foremost.
If I could now say a little about the work value classification structure. Greenacres does support the ABI proposition for a work value classification structure as an option to be embedded in the award, like all other classification structures are. The vast majority of people - supported employees - receive less than the full minimum rate of pay because they are not capable in most circumstances to carry out all the duties and all the tasks of a worker engaged at grade 2 of the SES Award.
Greenacres, in most cases, can only take on work which our supported employees are capable of doing. In many cases this is work which can be broken up into very basic tasks and much of this work is of low value. In many cases it's non‑profitable. Supported employees require different degrees of greater supervision, ongoing training, ongoing personal support than what you would expect of an employee without a disability in grade 2. An individual's capability does have an impact on what tasks they can safely carry out to a quality standard.
These are issues which must be a consideration in any wage determination system and we believe that the work value classification structure moves in this direction. We will bring evidence that shows that Greenacres provides a range of supports and programs for supported employees that other mainstream commercial businesses do not provide. Many of these supports and programs are all part of providing a holistic approach to supporting people with disabilities in the workplace and we believe to some extent the work value classification structure has made some allowances for this.
The SWS and indeed every other wage tool was created really in another time. We say it may well be time for a complete overhaul of the system to provide some certainty and if the existing wage assessment tools are not going to be available, then certainly the work value classification structure proposed by ABL is the best way forward. The work value classification structure, if supported by the Fair Work Commission, will bring higher wage costs and we will require a phasing in and transition period, but they will certainly not have the dramatic impact that we believe the SWS will have.
Greenacres believes the work value classification structure is a good and mainstream option moving forward, as it is a more consistent approach in terms of wage determination for supported employees when compared to the rest of the workforce. That is extremely important if we are to design a remuneration system where supported employees are treated as equals with respect to the rest of the workforce.
The work value classification also embeds wage determination in the award and, thus, it is not just a guideline, it's not just something that sits outside of the award, but it becomes an enforceable set of criteria which places more onus on the employer to get it right. Then by introducing - which we support - the rights at work clause for supported employees in the award proposed by Our Voice, it also places further obligations on employers to ensure they don't make unreasonable decisions which could be detrimental with respect to classifying supported employees as against those structures.
Finally, your Honours, I just want to pick up on one thing that Mr Harding did introduce and that is he is right that there has been a number of comments made by the Commonwealth about wanting to support disability enterprises and their viability, but one thing is for certain; there has not been one policy initiative that is different to what the Commonwealth announced many years ago about what it might do if there are substantial wage increases associated with this case other than what it has previously announced, which is to offset the costs in the first year and basically phase them out over a three‑year period. That is one of the reasons why most of the ADEs have certainly not chosen to go down the SWS route, because not even the Commonwealth package could offset the changes and the dramatic decisions that would have to be made should the SWS be introduced.
Now, on that basis can I just indicate to the Commission - because this is on the public record - so outraged in a sense are we with the Commonwealth not being prepared to do more at this time, that one of our parents, our cares, Katherine Hubbard, has launched a change.org petition to the Prime Minister asking for his intervention with respect to policy changes and funding, and in a period of only six weeks we have now attracted 10 and a half thousand signatures on that electronic petition and it is growing.
People with disabilities, supported employees, their carers and the industry are absolutely convinced that if the supported wage system is introduced, it will spell an end to the institutions and organisations that we have. Whilst for us as organisations, in terms of enterprises, it may not affect me as a CEO or Mr Donne as a CEO or NDS as an organisation, it will devastate the lives of those people who rely upon us to be their employers. They are my submissions.
VICE PRESIDENT HATCHER: Thank you. Ms Zadel, are you next?
MS ZADEL: Yes. Thank you, your Honour. I intend only to make some brief submissions in support of Civic's position. I note at the outset that Civic Disability Services has not made any application to vary the terms of the award and the outline of submissions filed by Civic Disability Services on 21 November 2017 were filed only in relation to the proposal filed by AED Legal Centre to remove all wage assessment tools, excepting the supported wage system tool.
The proposal, if successful, would remove the Civic Industries Supported Employees Wage Assessment tool; the Civic tool. The Civil tool is a combination of the SkillsMaster tool and the Greenacres tool. I note that we have heard from a number of users and advocates in relation to the Greenacres tool and the SkillsMaster tool this afternoon, and we generally support those submissions inasfar as they relate to the opposition to the AED Legal's proposal.
The Civic tool is used by Civic Disability Services to assess the wages of approximately 130 supported employees engaged in its ADE division. It has been used since on or around 2003. The work provided in Civic's ADE division is also provided alongside access to other services, such as support services, health, training and leisure services.
By way of summary, Civic Disability Services' position is that it opposes the proposal filed by the AED Legal Centre. We seek to rely on the outline of submissions already filed in this matter for Civic Disability Services and those submissions are supported by the witness statement of Ms Nicole Fitze, the Civic Disability Services general manager of human resources.
The basis for Civic's opposition, which is set out in detail in those written submissions and has largely been ventilated this morning and this afternoon by other parties here today - and specifically we also note the detailed submissions today of ABI and the New South Wales Business Chamber, and the NDS. We generally support those submissions inasfar as they relate to the opposition of the AED Legal Centre's proposal.
The basis for Civic's opposition is on three main bases. One, we say AED Legal has not discharged its onus to demonstrate its claim is justified on the basis of the modern award objectives, particularly having regard to the section 134 factors relating to the need to promote social inclusion through increased workforce participation and the impact of any exercise of modern award powers on business. Further, we say AED Legal has not established that the variation is necessarily in accordance with the minimum wage objectives.
Finally, we say the Civic Industries Supported Employment Wages tool and not the SWS is appropriate to the nature of the work, level of responsibility and conditions of employment in which Civic's employees are engaged and work.
Other than these arguments, and the fact that we rely on the submissions already filed in this matter, we do not seek to make any submissions relating to any other claim by any other parties. In particular, we know Civic Disability Services has no position, whether opposition or support, to any other matters part of this review, including, but not limited to, the work value classification structure proposed by the ABI and New South Wales Business Chamber.
Other than what we have just outlined this afternoon, we have nothing further.
VICE PRESIDENT HATCHER: Thank you. Ms Walsh?
MS WALSH: Thank you, your Honour. We have put forward, principally, our two issues. One is some of the terminology and definitions, and the other is what we have loosely called our rights at work. We've discussed that and we will continue to discuss that with union representatives. Perhaps the wording of that is not as it should be, but we're happy to tweak that and just see what other parties to these hearings actually have to say about that.
But if I could just comment and, I guess, broaden off some of the issues raised today on behalf of our family carers and our workers and I would say that our membership, for those who would be wondering, our membership sits, at the moment, at around about 1630. 38 per cent of those are ADE workers, actually working within the industry that we are trying to protect.
AED have stated here today, Mr Harding has stated, that concerns about mandating the SWS as the sole wage assessment tool are misplaced and exaggerated. Well, with respect, none of the parties involved has ever spoken to any of our families and workers, broadly, across Australia. AED, as we have been told, relies on the convention, the UNCRDP, the convention on the rights of persons with a disability, and have also quoted that they secondarily use the vocational rehabilitation, the ILO section of it.
Well, with respect, most of the people whom we represent are people with an intellectual disability and they form the majority of the workforce in Australia's ADEs. So if you're actually looking at rehabilitation in someone - because he did state that that was for those with physical limitations and impairment, but most of the workers that we represent do, in fact, have - they could have that as well, but they also have an intellectual impairment and rehabilitation is much more difficult with that type of impairment. The approach is somewhat different, there's less physical measures and more support measures. You don't just have rehabilitation you have repetition and reinforcement. They are a critical part of how you deal with maximising the potential of someone with an intellectual disability.
So who are AED? I've no intention of getting into the credibility or any of those issues, but I think it's important that we know where we stand and with whom we are dealing. In their letter to the Commission, dated 19th of the 1st, we are told that AED is a community legal centre, funded by the Department of Social Security and those funding guidelines do not permit them to act outside Victoria. Might I say that AED do do some extremely good work within their state.
But if we look at that nationally, with no disrespect to Victorians, but geographically, then Victoria will fit into Queensland seven times and it fits into Western Australia 11 times. So where does that put this whole debate, within the national spectrum?
VICE PRESIDENT HATCHER: There's no reason to think that issues facing ADEs and supported workers is different in Victoria to any other state, is there?
MS WALSH: I would say that that is correct but, by the same token, if you look at the size of Victoria, they do not have the same tyranny of distance and the same - they have issues, we all have issues, Australia has issues, but I think when you try and apply that across a broad place like Australia, I think that can become very, very difficult.
So AED had to get permission to intervene in the Nojin case. I raise it because the Nojin case is why we are all here. It set the legal precedent which is responsible for the current upheaval. If I could just refer to the chronology put forward by Mr Ward, when he mentioned that Nojin goes back as far as 2008, I would like to correct the record just a little and say it goes back further than that. Here I have the original submission that was provided by Australian Parent Advocacy. Australian Parent Advocacy is the precursor for Our Voice Australia, and Carer's Alliance, who originally became involved in the conciliation is actually the body that it morphed into. So this is the original submission put forward by Australian Parent Advocacy. At that time we had 3000 members but you had to pay to be a member. So, as time has moved on, now membership is provided free but then there are many, many people now who don't get involved because it's a double income family, there are lots of social reasons.
I think that's important as well because there will be no denial by anybody, I would be surprised if there was, that the role of ADEs is both social and employment related. That was a fact established in Nojin and it's been agreed to by the advocacy parties.
So if we go back to when Nojin first appeared, and I was involved in this because I was a party to the introduction of the BSWAT and worked very closely with the then union, and the advocacy parties were also involved, the same people, the three of us, are all back here again, 15 years down the track.
So then the case put forward was, I believe, I have all the files at home but, I'm sorry, we have no resources so I couldn't bring them with me, but I think it was 6123 was the last four digits. The dicta in that case would indicate that that particular case was put forward to try and embed the SWS into the award at that time and there was a fight against the then BSWAT. Because the BSWAT was subsequently approved that file, 6123, then was adjourned indefinitely. The worker in that case, was Mr Nojin plus one other. We'll call that Nojin plus X.
So if we then move forward from there we now have the Nojin plus - it was Nojin plus X we now have Nojin and Prior. But Mr Nojin still continued to be, supposedly, discriminated against for 10 years and nobody did anything and we have the same people involved. So it's reasonable ask why, if the discrimination was so bad way back in 2002/2003 then why did not the advocacy regime find alternative employment? It's all resurfaced now, almost a decade later. The records will confirm that if we went back to 2002 or 2003 that the advocates did raise the issue of competency. They also raised a lot of other things, which I, again, have the primary source documents for, in their submission to the - I won't go through them, that's more suitable for evidence. But they raised a lot of things in favour of the BSWAT. I have those documents as primary source documents.
But if we also then go back to the grounds put forward about the declaration of human rights, we would have to say that article 23.1 and 23.2 of that same declaration states that:
Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.
That's the concern that is being raised, very loudly, by our family carers and the workers whom we represent themselves. It is the insecurity and this sector has been subject to it for the last 15 years, it can't continue. I don't envy you your job your Honour, and Commissioners, you've got a very difficult task because you are being asked to solve something that has a social policy as well as an employment policy component. With due respects to the Commonwealth, they have walked away from it
Much has been said about the commitment that the Commonwealth has put in, this is the primary source document from the document from the Commonwealth, it states $173 million which is available in a decreasing threshold. A hundred per cent for the first 12 months, 75 per cent for the second and 50 per cent for the next six months. Now, by the end of that period, they'll be gone. It will be the NDIS and we can just look around everywhere in Australia, you'll see all the states starting to devolve everything to the Feds. We have the advocacy movement itself, and I support them 100 per cent, saying, "Don't ditch advocacy", because it's caught in the middle.
We have another primary source document that actually states that, "Yes, there is an admission that the SWS, embedded mandatorily, will increase wages." There's two suggested solutions and they are that the Commonwealth should temporarily fund the ADEs to transition? Well, what are they going to transition to? The Commonwealth has put up this amount of money, if you're involved, as I have been over many years, on boards of ADEs and community organisations and councils and corporate - I'm a professional solicitor - I wish I was a professional solicitor, I'm only an accountant, so the thing is that when you are doing your forward planning you must have five year plans, 10 year plans. Who, in their right mind, would say that viability is not an issue? I mean we are talking about business, of course it's an issue. How could any business go and make decisions that affect the lives of so many people without actually doing their homework first?
The issue of rights is what we're hearing left, right and centre. But could I tell you that the advocacy movement themselves, as well as the Commonwealth government, are in breach of the principles that they promote. Again, primary source documents and they are that the United Nations International Day of People with a Disability their theme in the current year, it's very prolonged, but the key words are, "Leave no one behind." Well, I'm telling you, on behalf of our families carers, and the workers, that they have not been consulted. They're not being adequately represented at national level in policy issues. They are not just being left behind, they are being deliberately excluded. Harsh words but, believe me, that's what's happening, they don't want to know about it.
So if we then move on to a question about is it possible to have multiple tools? Why are the multiple tools there? The multiple tools are already there because they have been duly assessed by the independent judges, that's the AIRC, your predecessors, and also yourselves.
VICE PRESIDENT HATCHER: Does having multiple tools lead to the potential result that people doing of an equivalent level at different ADEs end up being paid different wage rates?
MS WALSH: It gives the - you could go anywhere, to any ADE in Australia, and they are all different. Their work depends on what they can contract on. That's going to change everywhere so, yes, there would be - I guess there'd be some irregularities, but the real issue is that in order for those tools to be legislatively approved they have to have undergone a level of assessment.
Today we've heard here there's eight going to be thrown out. Well, obviously, they've reached their use by date. They're not being used and no one has ever asked the question, or to me, no one has ever seemed to ask the question. With the Nojin and the BSWAT were the assessments, they were two individuals, that's what they were, if you then go to the one that led to the BSWAT payment scheme, you will find that there was a legal issue. You'd be far more familiar with it than I, your Honour, but the issue of actually contesting that, which is why we have the BPAY payment scheme was it would be so prolonged, it would create so much insecurity that in the end they rolled over, both sides, compromised and the end result was worth $100 million, but that was the end result, getting back to the multiple tools.
I really, truly believe that no matter which ADE I've gone to, and you will see it yourselves, and I've visited many over the last 20 years. My son worked in one for 25 years. The issue put forward by the advocates, "Well, they can always just go to a day service if they're not productive." Well, with respect, these people are entitled to work. It's the basis of our very democracy. It's the basis of the Disability Services Act and the national disability strategy, which stated, among other things, that:
To ensure that persons with a disability receive the services necessary to enable them to achieve their maximum potential as members of the community: increased independence, employment opportunities, integration, positive outcomes. They should be supported to achieve independent and social and economic participation and they achieve this by providing support to people with disabilities, their families and carers.
Well, the family and carers, with respect, we're just a by-note on the bottom of most government policy.
That Act was to be construed and administered accordingly. We will contend, in evidence, that that's not happening. It's not happening. The government is not doing it, the advocacy movement isn't doing it and I can understand, from the advocacy perspective, why. The whole system is set up so that all the concentration is on the person with the disability. That's quite right, no one would argue with that, however there are a number of people, and we represent them, and basically many of them work in our ADEs, that they don't have the capacity to self-advocate. Some of them do not have legal capacity.
For those reasons, and those reasons alone, the government, the system actually has to ensure that they have their feet under the policy table. That they are able to actually cooperate with other people who have disabilities, but who don't have the same limitations.
I would unhesitatingly say that the advocates, the advocacy movement, what divides us from them at the moment is far less than what unites us, but the issue is supported employment, segregation and education. It's those issues. I would have to say, and I guess I can call on my years, because I'm probably one of the oldest people here, that is that if the effort and money being poured into the current supported employment situation was actually being poured into diverting the angst and emotion and insecurity into education at the lowest level, then those people would be rearing their children, not like I reared mine and not like some of our other mothers had to rear theirs, they'd be rearing them with a greater expectation than what society can give them. I believe that's there. I believe it's growing The decision that you, unfortunately, will have to make, because it will be your decision and it will be based on law, it has to be, that's why you're there, is that if they could divert some of that stuff towards educating that, instead of retrospectively doing some social engineering with people who've been in the workforce, in their homes and in their communities, and are now 30, 40, 50 years of age, that money would be better spent. But that's not solving the problem, I guess.
But I'm passionate, as you can gather, and the issue for people who have worked to suddenly be put in a day service, it is absolutely soul destroying because there is the dignity of work, there is the acceptance in the community, there's a whole heap of issues which form that social part.
So AED have said that the capacity to pay is not an issue. Professionally, I would simply say, "Really?" The solutions that they put forward, "Commonwealth to pay. Put them back in day services", all of those things, they're not alternatives, they're totally unacceptable. Nowhere in any business that I've ever been associated with would you ever try and remove - if you're doing the hiring and firing and you've got to fire somebody, how could you separate competency, skills and productivity? You can't. It's the very essence of business. You have heard this is a different type of business we're dealing with, it is. The reality is, no, I'm sorry, it just won't work, it doesn't work, it can't work.
So if I could, perhaps, complete my little say here today, I'm sure there'll be other opportunities, we have a lot of primary source documents. I've been around for quite a while, over a long period of time. One of the ones that are important is this one, this one is a primary source document that goes back to the advent of advocacy, and I was there with it too. We fought for the Disability Services Act. We fought for the year of the International Year of the Disabled. We fought for the NDIS. We don't get any recognition for it. Don't worry, those families and carers, anyone who's been involved, they know that they're not going to get any recognition of it. We didn't do it for recognition, we did it for our children, for our communities and our ADEs are a very critical part of the social thread of Australia. We don't want Australia to change that much.
Before I just speak a couple of words about the rights at work issue, this is an important document, I'll read you this, this is on page 33 and I was also a part of that. I was also a part of the national advisory committee on family issues, I was involved with Centrelink, I was on the national consultative committee, so I've been around a while:
The conclusion reached by the steering committee - - -
And this is on advocacy:
- - - is that in the past organisations which have been funded to provide advocacy have carried out their role in accordance with their own operating philosophies. They have not necessarily seen themselves as working within a framework of government funded services which, together, contribute to supporting people with disabilities and their families.
Notice that little bit, "And their families."
The steering committee recognised that people with disabilities are the primary focus of the program. However, it was noted by the committee that despite the government's emphasis on the important role of family there was no significant representation of the views of families of members with disability at the national level.
It goes on a bit further and says:
The committee supports the establishment of a national peak organisation which concentrates on the impact of disability on the family unit.
That was a recommendation that came out, that body was supposed to be in place by 1 July 2000. It is now 2018. It's not there yet, it may never be there and our last submission requesting funding to set that up, because of the NDIS, because of the issues with education and supported employment, has been refused yet again.
So why have we asked for, in the modern review, asked the Commission to look at tidying up some of the terminology? Because it's outdated. We don't - guardianship is very hard to get. I managed to get it for my son during his lifetime, but I almost had to go to the Supreme Court. In the end everyone agreed it was probably the best thing that could happen because everybody could then work together. But it will be very hard to get in the future and there are no uniform national guardianship laws, which we fought for. There never will be, because we've moved away from that and it's now called supported decision making anyway. So there's a whole heap of issues around that part of it.
The issue about the rights at work, and in discussing with the unions, the terminology is probably not right.
DEPUTY PRESIDENT BOOTH: Ms Walsh, just pause for a moment, so that we, on the Bench, know exactly what you're advocating here. I'm looking at page 5 of your submission, that I think was made on 27 July, and it starts with:
(a) When dealing with employment matters affecting
And goes right down to (e), last sentence:
Would help them make informed decisions about employment matters.
Is that the text to which you're now drawing our attention and that's the text that you would like to see incorporated into the award, subject, as you say, to further discussions with interested parties?
MS WALSH: Principally, yes, your Honour. I have had discussions with both Lee and with Chris Christodoulou and the issue that, I guess, has been raised, and I'd have to agree with that, we've called it rights at work. Now there is, from your perspective, a necessity to ensure that whatever support is provided to an employee, in any of those circumstances, then that right is not transferred to the person providing the support.
So we believe it's there because if we look back over the last 15 years, which has been horrendous for everybody, then how did it happen? Why did it happen? We have two individuals who - their case might have been valid, but the issue is what we now have is we now have an individual case which has never been challenged within this forum so therefore the industrial situation, it hasn't been taken into account, but it's dictating where we go from here and it's not good if what they're asking for actually comes to pass.
So what we thought, collectively, was that if the award updates all of that representative and guardian and all that sort of stuff, but still gives a person in a dispute situation, which is where it's most needed, or where there is major workplace change, gives them a set process, however you choose to do it, then if someone then decides, "Well, there's been an abuse here", or, "I think there's been an abuse here, I'm going to run up to the Human Rights Commission and I'm going to get this dismissed." But that's their right, no one would take that right away from them. But in the real business world, if I'm an employer and I want to sack someone that I've got working for me, I have to be able to prove that that person, justifiably, that I had that right to do that, because they didn't do this, this and this. I have to take a process. I have to warn them, I have to do this, I have to do that. That's laid out. That's a process that has to be followed. So, okay, if someone wants to run off to the Human Rights Commission and they think they've got a very good case, that's not our role to say they shouldn't go, but the Human Rights Commission should then expect, "Okay, so this is a workplace situation, have you followed the course that you should have followed?" But none of that seems to be - I could be wrong, I'm not a lawyer, I'm just a mum and I'm just a professional businesswoman, but to me, I don't see that that's actually written into where it should be to make it easier for an employer, whether it's an ADE or whatever, to actually follow the process in this case.
So that's what has motivated it, the uncertainty, the lack of representation of the people who will wear the consequences. That is, our workers, their family carers. On behalf of our organisation I have already provided to the Commission where we sit in this, what type of care. We are lifetime carers, we are not turn of life carers, we are not time of life carers, been all that, but these are lifetime carers. They're there for the long haul. So we would like to think that in the review of the modern award the Commission would take on board, and I would hope, on behalf of us all, that we have the support of the advocates in trying to establish a set process that we never, ever have to go down this path again. Thank you.
VICE PRESIDENT HATCHER: Thank you. Lastly, Mr Jordan, in Canberra.
MR JORDAN: We don't have any opening statements, your Honour.
VICE PRESIDENT HATCHER: All right, thank you. So that's all the opening submissions. So Mr Stroppiana, can we return to your procedural issues?
MR STROPPIANA: Thank you, your Honour. There were two issues which I've highlighted. You will be glad to know that two has grown into three, but the third one is a very, very quick one. The first issue is just to try and get some guidance from the Commission, if I can, at this early stage as to the approach the Commission plans to take with the final report of ARD Consultants. That's the evaluation of the modified supported wage system trial, dated 12 October 2016.
The history of this matter is - the report has been placed on the Commission web site. I'm really just wanting to highlight to the Commission that information contained in the report may well be wished to be used by myself during cross‑examination on Thursday and Friday of this week. It may well be the subject of final submissions. So I really want to understand what the approach or attitude of the Commission is for the use of the material in this report.
VICE PRESIDENT HATCHER: Well, it's a question of whether any party wishes to ask the Commission to make a confidentiality order as to any issues that might be raised with respect to the report in cross‑examination or submissions or evidence. You have raised the issue. I will hear the parties generally about that question.
MR STROPPIANA: Yes, sure.
VICE PRESIDENT HATCHER: Mr Ward?
MR WARD: Your Honour, can I ask that I be given some time to get some instructions on that. I don't have an answer for that at this stage.
VICE PRESIDENT HATCHER: We have got the inspections in the next two days, so if the parties would prefer to park that issue, it having been raised, we can deal with it first thing on Thursday morning.
MR WARD: If the Commission pleases.
VICE PRESIDENT HATCHER: Does any party want to take a different view about that? No, all right. The second issue was, what, Mr Cain's statement, was it?
MR STROPPIANA: Yes, your Honour. Mr Cain's third statement filed on 14 December 2017. There is a substantial amount of redactions in that statement.
VICE PRESIDENT HATCHER: Can you just let us get that out.
MR STROPPIANA: Sure.
VICE PRESIDENT HATCHER: You said 21 November?
MR STROPPIANA: No, sorry, 14 December.
VICE PRESIDENT HATCHER: 14 December. All right. So the version we have is un‑redacted.
MR STROPPIANA: If the Commission agrees, I can hand up a copy.
VICE PRESIDENT HATCHER: Yes.
MR STROPPIANA: This copy has just simply been taken from the Commission's web site.
VICE PRESIDENT HATCHER: Mr Harding, can you remind us procedurally what happened with Mr Cain's further statement?
MR HARDING: I can't really elaborate on that, your Honour. I believe it was filed. I am not aware that there was any order made pertaining to its status. My instructor might assist.
VICE PRESIDENT HATCHER: All right. Mr Stroppiana, we will have to look into this and again we'll return to it on Thursday morning.
MR STROPPIANA: Thank you, your Honour.
VICE PRESIDENT HATCHER: I will return your copy to you.
MR STROPPIANA: If I may, your Honour, one final matter and I promise your Honour it's a very quick matter. For the inspections tomorrow, I just wanted to confirm - in addition to obviously your Honours and Commissioner - at this stage we have one representative from AED Legal, one representative from the HSU, one representative from Our Voice, one representative from People With Disability Australia and one representative from ABI. If there is any other party who are proposing to come, if they could indicate this afternoon just for logistics purposes.
VICE PRESIDENT HATCHER: All right. That's noted. Perhaps if there is any party here who wishes to attend who is not on that list, they can advise Mr Stroppiana before they leave the Court.
MR STROPPIANA: Thank you, your Honour.
VICE PRESIDENT HATCHER: Are there are any issues - Mr Bull?
MR BULL: It's the issue of our superannuation claim, which - - -
VICE PRESIDENT HATCHER: I was wondering about that.
MR BULL: Yes. You've forgotten me again. I won't be offended. There doesn't seem to be much opposition to it, so I can open, expand - perhaps not close today.
VICE PRESIDENT HATCHER: I thought you gave your opening submission. That's why I was wondering.
MR BULL: You didn't give me one.
VICE PRESIDENT HATCHER: I didn't give you one?
MS SVENDSEN: I think there has been some confusion in - - -
MR BULL: No, I thought I was responding to, you know, the wage assessment tool.
VICE PRESIDENT HATCHER: All right. Mr Bull, if you want to open that claim, please do so now.
MR BULL: I said nothing about my claim - our claim, rather. Look, we've filed a submission and evidence on 25 September. The claim essentially is - I would characterise it as updating a current clause in the award, which is 19.5. 19.5 is an award term which creates superannuation entitlements for a group of employees who but for that term would not have access to the superannuation system.
There is a 450‑dollar a month threshold in order to get into the superannuation system. The effect of that term is that it provides access to the superannuation system for employees who are under the threshold. Obviously it's highly relevant to the system as currently configured. It will obviously continue to be highly relevant if the system continues to be configured as it is, but even if there is substantial change to the system which would involve an increase in wages, such a term as 19.5 is still one which I would say should remain in any once reviewed award.
Look, the current term provides that it's 3 per cent of the ordinary earnings or $6 per week, whichever is the greater. That provides the amount which the employer must contribute. The $6 is a floor and generally the 3 per cent will be the operative amount because it's always going to probably be greater than the $6. I'm just going through my submission. I give some background and so forth.
There is perhaps one other matter I should note in my sort of introductory comments. This claim is dependent on the fact that Australian superannuation has produced a new product, so they've produced a superannuation product which contains no insurance element. It's super only. One of the issues that the claim addresses is that because of the structure of superannuation, disabled people under this award were literally being sold insurance for a contingency which they had already realised, so it was utterly superfluous. It's amusing, but it's not.
Perhaps, you know, I'll put in a little plug for the industry superannuation system. This was a claim which couldn't have been made but for the assistance of AustralianSuper. I don't know what Martin Schutz did, but it seemed to be relatively effortless. There was not a great deal of resistance that I noticed from this institution doing something which on the face of it is not in its immediate financial interest. It seemed to be quite responsive to generating something where it was selling less of something rather than more.
The claim essentially involves changing the numbers. Instead of 3 per cent, which was the superannuation contribution in the early '90s, we have 9.5 and then we have a floor of $15 a week. Effectively the percentage is probably always going to be greater than the 15 per week. If you look at paragraph 6 of my submission, there is some data which I got from the department when I was preparing this submission which indicates as the award is currently configured, there is roughly 20,000 people who would fall within the ambit of this provision.
If you look at paragraph 6 of my submission, in the last financial year the department - it's all to do with who they fund and so forth. They fund some and then the NDIS fund a group. Don't ask me to explain why. That's simply how it is. The group that's funded by the department, they have good data on - has average weekly earnings of about $121.72 a week, so clearly a substantial part of that group is going to be getting its superannuation via 90.5 or whatever the Commission determines it the appropriate clause.
As noted, our claim involves increasing the percentage in the base. I provide some award history. The fundamental reason for the claim is that the clause is obsolete in the sense that it effectively hasn't been varied since the early '90s. The six‑dollar amount was the amount in the original clause and it has never been changed. I give some of the award history. That's all there. I discuss the statutory context under paragraph 29 of the submission. I won't repeat the usual comments about the four‑yearly review, which you're probably aware of.
One issue I would note, there was some dispute in award modernisation about whether it needed such a term; whether it was an appropriate term in a modern award. I'm taking it as a given that that battle has been fought and lost. We have this term and it should be maintained. If you're going to maintain this term, it should be effective. I will address specific parts of the modern award objective, but fundamentally the current term is ineffective.
The evidence of Martin Schutz is that particularly with the current insurance regime, people who have superannuation - as a result of this clause the entire balance gets essentially eaten up by costs and fees. There's no real benefit to the superannuate. The practical effect of our claim is that there actually will be some practical effect, in the sense that at the end of their working lives the superannuate will actually have some amount of money. That would seem to me an appropriate thing that a superannuation clause should do.
Number 36 is titled "Merit considerations" and I seek to talk about the merit of the claim. As I've already noted, the fundamental problem is that the current clause is not appropriately adapted. It just doesn't work, except for the financial services industry. In relation to the modern award objective, I think we can characterise it as our claim is one in relation to relative living standards and the needs of the low paid; (a) the need to promote social inclusion.
I was going to say the principle of equal remuneration for work, but I understand that that is related only to gender discrimination. The fundamental purpose of this clause is to basically give disabled people covered by it some access to the superannuation system and recognise that their participation in work is real, although not necessarily reflected in their remuneration.
At paragraph 40 of the submission, I note the evidence of Martin Schutz where he basically says all superannuation made for the employee over a working life is essentially consumed by costs and fees. A combination of the increase in the contributions of the no insurance option will mean that that will not be the case. There are particular costings within Mr Schutz's submission that these things - it will result in quite a substantial amount at the end of a person's working career.
I have also made a submission in relation to indexation. If you're agreeable to changing the dollar amount, which is the $15 or whatever amount you agree on, there should be some indexation of the amount. The appropriate way to index the amount is through the minimum wage process where it's increased in line with whatever the factor is determined through that process was wage inflation. That avoids us essentially having to deal with a similar problem in 15 years. We have given a draft indexation clause at paragraph 51 of my submission.
Lastly, I've included some - well, there is a heading called "Transitional arrangements". This is before they filed the material. The only material that was responsive to this claim was filed by the NDIS. It was essentially one paragraph in their submissions saying that they're not funded by the government to do this. Therefore, they can't pay any more than what they pay. That's all that is in evidence - it's not even evidence, it's submission. I mean, I'm going to ask some of the witnesses some questions to deal with that issue. That is the opening. There is a statement by Mr Schutz and there are some annexures. I was proposing to tender that.
VICE PRESIDENT HATCHER: We'll deal with that later, Mr Bull.
MR BULL: Deal with that later. There are also some other bits and pieces. That is basically the product information for the no insurance option. That's all I wanted to say.
VICE PRESIDENT HATCHER: All right. Thank you. I thank the parties for their opening submissions - - -
MR HARDING: Your Honour, before we close for the day, just two matters - - -
VICE PRESIDENT HATCHER: Just hold on. We have got someone in Sydney, Mr Harding. Yes, go on.
MR HARDING: I'm sorry.
MR MUSSO: Thanks, your Honour. NDS had lodged a detailed submission opposing the United Voice proposal to increase the superannuation rate and I would like to be heard on that, please.
VICE PRESIDENT HATCHER: You will be. You don't have to be heard on it now, unless you really want to.
MR MUSSO: Well, I just wanted to indicate that we did oppose it.
VICE PRESIDENT HATCHER: All right. I think you had better remind Mr Bull, because he seems not to have seen it.
MR BULL: I thought I had seen it.
VICE PRESIDENT HATCHER: What is the date of that submission, Mr Musso?
MR MUSSO: 21 November.
MR BULL: I thought I had seen it.
VICE PRESIDENT HATCHER: All right. We will proceed on the basis that you have lodged a detailed submission opposing the claim and you'll advance your case about that in due course.
MR MUSSO: Thank you very much, your Honour.
VICE PRESIDENT HATCHER: Yes. All right. Mr Harding, did you have something?
MR HARDING: Two brief matters, your Honour.
VICE PRESIDENT HATCHER: Yes.
MR HARDING: You asked me about the further statement of m of Mr Cain.
VICE PRESIDENT HATCHER: Yes.
MR HARDING: Can I indicate that there have been some redactions to the third statement as filed and those redactions pertain to quotes from what is described as the modified SWS Demonstration Report, which I think is a report that was provided to the conciliation parties.
VICE PRESIDENT HATCHER: All right.
MR HARDING: That is the first thing. The second thing is that Mr Zevari in his submissions indicated that the proposal from ABI was an intuitive proposal and in particular appeared to reserve the right to run a case including a new rate of pay. We're taken by surprise and will oppose that.
VICE PRESIDENT HATCHER: I think what Mr Ward was referring to was the possibility that we could adopt, if we were so minded, some aspects of his proposal in principle and then ask the parties to make further submissions as to how it might be implemented or something to that effect. I think it's a proposal which would necessarily involve parties being given time to consider whatever the Commission was minded to do and be heard on what the next step would be. Is that something that satisfies your concerns?
MR HARDING: Well, at this stage, depending on how that proposal unfolds, your Honour.
VICE PRESIDENT HATCHER: Yes.
MR HARDING: But if it was intended in this proceeding to run a case that included a new rate of pay, then we would have some difficulty.
VICE PRESIDENT HATCHER: I understand Mr Ward was referring in that context to the fact that the percentages contained in the ABI document might simply be converted to dollar amounts. Is that right, Mr Ward?
MR WARD: That's correct, your Honour.
VICE PRESIDENT HATCHER: That is, it's not a new proposition. It's simply a conversion of the calculation.
MR HARDING: We might not have that same concern if that was all it's confined to.
VICE PRESIDENT HATCHER: All right. Anything further? We will now adjourn.
ADJOURNED UNTIL THURSDAY, 08 FEBRUARY 2018 [3.49 PM]