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Fair Work Act 2009                                                    




s.156 - 4 yearly review of modern awards


Four yearly review of modern awards





9.30 AM, TUESDAY, 11 APRIL 2017


Continued from 10/04/2017



VICE PRESIDENT HATCHER:  All right.  The next issue is fares and travel?


MR SCHMITKE:  Yes.  Your Honour, if I just might raise a couple of housekeeping matters first to begin with.




MR SCHMITKE:  The first is in relation to the draft determination that Master Builders has provided to the Commission.  It occurred to me last night there's a spelling error consistently in all of them with respect to the spelling of Commissioner Harper-Greenwell's last name and if I can just have that corrected and, of course, apologise unreservedly for making that error.


The second matter that I would just wish to raise is in relation to a matter which we may get to today.  I think it's item 12 and it deals with an application by the AMWU.  Master Builder's position at this point, or up to this point, has been to not oppose that particular ‑ ‑ ‑


VICE PRESIDENT HATCHER:  Which item was this again?


MR SCHMITKE:  It's item 12.




MR SCHMITKE:  It deals with forepersons and supervisors.  We indicated that we do not oppose it.  I've got revised instructions last night, and that is that we no longer wish to make any submission in respect of that, and to that end, that position we would seek to have withdrawn.


VICE PRESIDENT HATCHER:  So you've gone from not opposed to make no submissions?


MR SCHMITKE:  Correct.


VICE PRESIDENT HATCHER:  What's the difference?


MR SCHMITKE:  They are my instructions.




MR SCHMITKE:  Lastly, in terms of the junior rates claim, which we're likely to get to this morning, again in light of the comments from the Commission in the earlier stages of the proceeding, we've had cause to seek some additional advice with respect to the question that was raised.  I'm now instructed that in light of that advice, which is uncertain and unclear, that we would not intend to press that particular application in the context of this proceeding.  That is not to say that it is not our view that the insertion in to the award of junior rates is something that we wouldn't be desirous to achieve.  We do think it would better to achieve the modern awards objective, however, in the context of this proceeding we wouldn't be in a position to address the Commission on that point, and to that end we would not proceed with that claim at this point.


VICE PRESIDENT HATCHER:  Were you the only claimant for that variation?


MR SCHMITKE:  Your Honour, no.  I'm aware that my colleagues from the CCF ‑ ‑ ‑








DEPUTY PRESIDENT HAMILTON:  What page is this from the issues paper?








MR SCHMITKE:  Page ‑ ‑ ‑




VICE PRESIDENT HATCHER:  Right.  Anything else?


MR SCHMITKE:  Mostly, your Honour, we raised, I think, earlier in the proceedings the question of the national training wage item, and I don't recall there being any view expressed by the Bench with respect to that inquiry which was in the context that it is the clause, that is, we seek to delete is the subject of submissions made by the CFMEU and others in this matter.  The clause that we seek to delete is consistent with what has been, I suppose, proposed in another Bench before his Honour the President.  That particular Bench is proceeding along the basis that we had proposed in this matter; that being to delete the relevant provision from the award and have a standardised provision attached to a schedule to the Miscellaneous Award.  The union have made submissions in that matter.  We've appeared in that other matter as well.  But there is a cross-app to the extent in this particular proceeding, so if it is ‑ ‑ ‑


VICE PRESIDENT HATCHER:  As I understand it – I was waiting for you to explain at some stage precisely the variation you sought, but if it's the same variation as is being discussed in that matter then that will be governed by what happens in that matter.


MR SCHMITKE:  Yes.  It is essentially the same variation.  The difficulty is that in that matter there has been an invitation by the parties to address whether or not there is a need for a tailored schedule for particular sectors.  That is the position that has been advanced by the CFMEU, and, of course, they are also making changes to clause 28 more broadly in the context of this matter, so it may well be that this matter determines an issue in a clause which is subsequently deleted and that's where the confusion arises, so it is nothing more than an administrative complexity and we just seek to utilise the Commission's time most effectively.


VICE PRESIDENT HATCHER:  Right.  Thank you.  Are there any other administrative matters to deal with?


MR MAXWELL:  Sorry, your Honour.  I'm reluctant to stand up but just in regard to that last matter that was raised by Mr Schmitke the issue for the Full Bench in the national training wage matter is a discrete matter as to whether modern awards should include the schedule or they should include a reference to the schedule being contained in the Miscellaneous Award.  That is that discrete matter that's before them.


In these proceedings the MBA is seeking to delete a separate clause in the construction award which is clause 28 which contains higher rates of pay to be paid to civil construction trainees and has other rates of pays to be paid to trainees.  They seek to delete that provision.  That matter is not before the other Full Bench.


VICE PRESIDENT HATCHER:  All right.  Let's deal with that when we come to it.  As I said, I was waiting for a clear explanation of what the change was to form a view as to whether it is the same as the one being dealt with in the other matter or not, so we'll deal with that in order.


All right.  So fares and travel.  Is that you, Ms Adler?


MS ADLER:  Yes, thank you, your Honour.  So part 6 of our December submission deals with our proposed variation to the daily fares and travel allowance which is clause 25 of the on-site award.  The draft determination is at attachment J to those submissions also.


There are three aspects to our proposed variation.  The first is to delete the reference to radial areas which is throughout clause 25.  The second is to change the circumstances under which the daily fares allowance set out in clause 25.10 will be paid.  The final proposal is to amend the current distant work provision noting that that's different from the living away from home allowances that have been dealt with separately.


So I understand that the Bench has copies of some documents that we sent in over the weekend and one of those documents is a comparison.  It's called HIA fares and travel patterns allowance claim comparison of current provision and HIA's proposed provision.  I've just provided this to the Commission to assist in understanding how and what we propose to change and how that either retains an existing provision or changes that.




MS ADLER:  I won't go through it in detail at this point, but just by way of example on the left column I've extracted the current provision, the right column either extracts or references the provision of our proposed determination so that it's clearer as to what we're actually seeking to change and what we would retain in our proposed variation.  So, as I said, I will come back to that and it's just something I've provided to assist the Bench in getting greater clarity over our claim.


Firstly, I would just deal with the change in relation to radial areas.  As I said, we propose to delete the notion altogether, so it's littered throughout the provision, and the radial areas they use to determine when the entitlement is payable and in what circumstances it arises depending on the distance from the GPO or principal post office in a regional area.


We rely on the evidence of Kristie Burt which is marked exhibit 28 and is at attachment K to our submission, and we submit that her evidence shows that the provision is confusing; that the use of those radial areas is difficult to apply and understand.  Annexure A to that statement attaches what we call an information sheet which is a document that HIA has put together to provide to members to help explain different aspects of the award in this case.  This one deals with the fares and travelling allowance under the on-site award.  That document is four pages long, has a number of charts and diagrams to explain how the radial areas work, and when the entitlements arise and what they are.  We say that that statement and that information sheet shows how confusing the provision is; that it's not easy to understand; and that there are actually eight different circumstances contemplated by clause 25 and that's set out in that information sheet.  I'll come back to that information sheet as well.


The other point that I'd like to make about the use of the radial areas is they depend on the post office, the GPO in the capital city or, as I said, the principal post office in a regional area.  There was another document that has been provided to the Bench I understand.  It's a senate committee inquiry into the performance, importance and role of Australia Post in Australian communities and its operations in relation licensed post offices, and I provide this document simply to provide some context within which the maintenance of the use of the post office could easily become outdated and outmoded.  Under our proposed provision we say that you should use the employee's usual place of residence as the sort of central point in which to measure the distances from, and largely that comes down to simplicity firstly, and, secondly, this document indicates that the use of postal services is declining.  There have been closures of post offices and we just don't know what's going to happen with Australia Post, and how many post offices are going to remain.


In that document I draw the Bench's attention to paragraph 3 in the foreword and it says that:


The committee believes the future of postal services in Australia is at a crossroads.  As a consequence there are a number of significant far-reaching issues that need to be addressed.  These include the type and scale of the postal network that can be sustained into the future, the funding options available to maintain the network, and how, and to what extent, the current community service obligations can be preserved.


There's also information there about post office closures at page 77 and 78.  They talk about the closures of licensed post offices which I know are not the GPOs, which is what's referenced in the award, but it definitely indicates that post offices are closing, so in light of the modern awards objectives and making sure that the award is relevant and modern there's definitely a context within which we need to consider this provision.  That's as far as I'll take that document.


Moving to the proposals in relation to when the allowance is paid.  So as I mentioned, we submit that – or our proposed variation seeks to amend the current clause in two ways; the first is to change the provision so the allowance is not paid on a rostered day off which it currently is; the second aspect is that the daily fares allowance would not be paid to an employee who is provided with a company vehicle, and those changes are outlined in our draft determination.


Again, the statement of Ms Burt outlines the unfairness experienced by members of the current provision, particularly where a company car is provided and the employer is also required to pay the daily fares allowance under the award despite providing that company vehicle.


VICE PRESIDENT HATCHER:  Ms Adler, yes, I understand those two aspects, but in terms of the abolition of the radial areas, how does your proposal work in terms of the payment of the entitlement?


MS ADLER:  So if I take you to the comparison document that might be the easiest place to start.  So 25.1(a) of our proposal we'd say that an employee is to be paid an allowance of $17.43 per day where the employee starts and finishes work on a construction site.  It's just paid when you start and cease work on a construction site.


What we have done is insert clause 25.3 which is on the bottom of page 2 to deal with travel that's more than 50 kilometres from the employee's usual place of residence and we say that that deals with a number of other travel related provisions which I'll come to explain in more detail but instead of the radial area I guess the bottom line is we use the employee's usual place of residence as the, I guess, the distance measurer, for lack of a better word, instead of the radial areas.


VICE PRESIDENT HATCHER:  So that distance measurement is measured how?  By road or by radius or by what?


MS ADLER:  I mean, that is a question that the unions have put in their reply submission, and is not currently dealt with in the current provision, so we haven't sought to deal with it.


VICE PRESIDENT HATCHER:  It seems to me that you could easily travel in excess of 50 kilometres by road and stay within a radial area of one of the metropolitan cities.


MS ADLER:  That may very well be the case but the current provision doesn't deal with that either.


VICE PRESIDENT HATCHER:  I thought the effect of the current provision was if you stayed within the radial area you didn't get the distant work payment?  I might be wrong about that.


MS ADLER:  Under 25.2 of the current clause the employee is entitled to the allowance when the construction site is located within a radius of 50 kilometres from the GPO, so that's sort of the first limb, and then once you start travelling beyond the 50 kilometres or between different radial areas, depending on where the post offices are, that's when you start trying to calculate further entitlements and allowances depending on those travel arrangements.




MS ADLER:  So coming to the distant work provision that we propose and it may assist to go back to that information sheet that's attached to annexure A of Ms Burt's statement.  We say that the current provisions are unwieldy.  There are about five provisions that deal with travelling between construction sites between different radial areas on top of the sort of base line entitlement which is dealt with in 25.5.  So clauses 25.4, 25.5, 25.6, 25.7 and 25.9 we say deal with situations that involve travelling between a radial area between constructions sites, so I think it might assist if, with the patience of the Bench, I just talk through a few of those provisions.


So the first is clause 25.4, and that deals with a situation in which an employee makes their own way to work from a country area and they are entitled to the daily fares allowance under 25.2, and that's described in annexure A at point 3 of that document.


The next provision, clause 25.5 provides an entitlement for when an employee is travelling outside a radial area outlined under clause 25.2, .3 or .4 or between radial areas, and that's described at point 4 of annexure A and there's a diagram over the page explaining our view anyway of how that provision operates.


Clause 25.6 provides that when an employee who lives outside of a radial area described in the earlier provisions, and they cross a radial area to attend a construction site, is entitled to the daily fares allowance but will not be paid for the time spent in travelling between the radial area and the construction, and again that is explained at point 8 of our information sheet.  Clause 25.7 provides that an employee is entitled to the allowances prescribed by clause 25.5 which deals with travelling outside of a radial area and that's dealt with by point 4 of annexure A.


Finally, clause 25.9 provides that if an employee makes their own way to work, and then is transferred to another construction site, the employee is entitled to either the reasonable cost of the fare for public transport between sites where transport is not provided then they are entitled to 78 cents per kilometre where the employee uses their own vehicle, and that's outlined at point 6 of annexure A


So what we've attempted to do with our proposed variation, which is proposed 25.3 for distant work is to condense all of those into one simple straight forward provision that basically says where an employee is required to travel to a construction site more than 50 kilometres from the employee's usual place of residence ‑ ‑ ‑


VICE PRESIDENT HATCHER:  Sorry, I've lost that.  What was your numbering?


MS ADLER:  25.3, so on page 2 ‑ ‑ ‑




MS ADLER:  ‑ ‑ ‑ of the comparison document is the easiest place to find it.




MS ADLER:  Sorry, 25.3.  I beg your pardon.




MS ADLER:  Yes.  So I'm attempting to show where that clause 25.3 we say addresses the existing provisions.


DEPUTY PRESIDENT HAMILTON:  So as I understand it instead of a multiple source of calculations you just use one; is that right?


MS ADLER:  That's what we propose, yes.


DEPUTY PRESIDENT HAMILTON:  And it's the 50 kay from home measure?






VICE PRESIDENT HATCHER:  So does that actually affect anybody's current entitlement is the question?


MS ADLER:  I think we would concede that it would.


VICE PRESIDENT HATCHER:  How does it do that?


MS ADLER:  I guess the approach we've taken is one that swings around abouts.  So that under the current provision there might be circumstances where an employee would or wouldn't be entitled to an allowance and similarly under our proposal there would be circumstances where an employee would or wouldn't be entitled to an allowance depending on the radial areas, and particularly given that we've shifted from the 50 kilometres from the post office to the employee's usual place of residence that's obviously going to have some sort of impact.


Going to the reply submissions of the CFMEU ‑ ‑ ‑


VICE PRESIDENT HATCHER:  Just as an example, so if I currently live at Blacktown and I travel to the Blue Mountains, I'm travelling outside a radial area ‑ ‑ ‑




VICE PRESIDENT HATCHER:  ‑ ‑ ‑ so I'll get, what, some sort of distant work?




VICE PRESIDENT HATCHER:  Under your provision if it's Lower Mountains you may still be within the 50 kilometre radius of your home, so you just get the daily fares allowance; is that the way it works?


MS ADLER:  That same situation could occur under the current provision.  So if you stay within the 50 kays from the GPO similar to if you stay within the 50 kays from your usual place of residence.


VICE PRESIDENT HATCHER:  Yes.  So just stay with this example.  This is a case where you're not travelling 50 kays but you're going outside the radial area.


MS ADLER:  Okay.


VICE PRESIDENT HATCHER:  Under the current award, because you live outer metropolitan you're going to a site outside the 50 kay radius ‑ ‑ ‑




VICE PRESIDENT HATCHER:  ‑ ‑ ‑ under the current award you get, what, a distant – what do you get ‑ ‑ ‑


MS ADLER:  You would get the daily fares entitlement and then I would suggest that clause 25.3 of the current provision would apply.


VICE PRESIDENT HATCHER:  So you'd get distant work as well?


MS ADLER:  There's another provision about travelling outside radial areas as well, 25.5.


DEPUTY PRESIDENT HAMILTON:  Does anyone actually apply these provisions successfully or is it one endless debate?


MS ADLER:  I'm hesitant to provide you with an answer, your Honour, and that's why we rely on the information sheet that we provided with the diagrams – well, our members find those quite useful in order to work out exactly what their employees are entitled to notwithstanding that you can actually work out what the 50 kays from the GPO is in the first place.


DEPUTY PRESIDENT HAMILTON:  How would the Fair Work Ombudsman enforce such a provision?


MS ADLER:  I don't know, your Honour.  So I think ‑ ‑ ‑


VICE PRESIDENT HATCHER:  Your 50 kays is by road, is it?


MS ADLER:  Again, we don't specify.  The current provision doesn't specify, so we haven't sought to.


VICE PRESIDENT HATCHER:  Yes.  But what does your provision say?  I mean, I was just ‑ ‑ ‑


MS ADLER:  We don't attempt to do that because that would be very different from what's currently in the award.


DEPUTY PRESIDENT HAMILTON:  So you just adopt the award approach?


MS ADLER:  That's right.  Aside from replacing the radial area with the employee's usual place of residence.


DEPUTY PRESIDENT HAMILTON:  Is it as the crow flies or by road?


MS ADLER:  I guess – yes, I ‑ ‑ ‑


VICE PRESIDENT HATCHER:  If you travel from Penrith to a Sydney city construction site that is more than 50 kays by road.




VICE PRESIDENT HATCHER:  And there's, I know from experience, a lot of construction workers live out at Penrith, so it's an important question.


MS ADLER:  I agree, and your current award is silent.


VICE PRESIDENT HATCHER:  Currently they might squeeze into the radial area because it's just a straight line, but on your proposal if it's not a radial area it might make a difference.


MS ADLER:  It may.  I mean, Mr Maxwell may have a different view about that, but from our perspective the current award is silent on how you actually – you know, what mode of transport is the measurement, so we haven't attempted to articulate that in our proposed variation.




COMMISSIONER GREGORY:  What advice to provide to your members about that then?


MS ADLER:  We provide them the information sheet.




MS ADLER:  And I guess probably cautiously assume that they're driving, given that most would – well, I don't even want to say most.  Some would catch public transport.  I guess it just depends on what sort of construction work is being undertaken and whether or not they've got a Ute full of tools or not.


COMMISSIONER GREGORY:  So you advise them it's the distance travelled rather than as the crow flies?


MS ADLER:  That's right.  So if I can just ‑ ‑ ‑


COMMISSIONER GREGORY:  So that would be the logical measure to take then, would it?


MS ADLER:  Just the distance travelled?






COMMISSIONER GREGORY:  By road or by rail?






MS ADLER:  I guess each business would probably – again, I don't want to try and provide evidence from the Bar table, but, you know, if you're employees are catching the train, then that may be the measure that you use, whereas if your employees are driving that may be the measure you use.  Not that that's correct or incorrect.


DEPUTY PRESIDENT HAMILTON:  It seems to me if you want to simplify it you need to deal with that issue one way or another.




DEPUTY PRESIDENT HAMILTON:  If you're advising your members that it's distance travelled ‑ ‑ ‑




DEPUTY PRESIDENT HAMILTON:  ‑ ‑ ‑ then that presumably is the measure you'd adopt.




VICE PRESIDENT HATCHER:  So your proposal for the people in metropolitan areas then moves to an individualised approach, that is, you'd have to have a measurement for every single worker's residence to worksite?




DEPUTY PRESIDENT HAMILTON:  You can do that by computers and maths, can't you?


MS ADLER:  Yes.  Yes.




MS ADLER:  I assume that that is used now.


DEPUTY PRESIDENT HAMILTON:  You'd have a printout of a map ‑ ‑ ‑




DEPUTY PRESIDENT HAMILTON:  ‑ ‑ ‑ and that would give you the ‑ ‑ ‑






MS ADLER:  You can get the distance to certain locations.


DEPUTY PRESIDENT HAMILTON:  By various means.  Yes.


MS ADLER:  Yes.  Yes.  I do note that the union did raise an issue with the administrative costs associated for keeping track of where employees live, and I guess my response to that would be the current provision is significantly more onerous than any need to keep track of where your employees are located.  That's a much simpler administrative job than trying to apply and understand the current provisions.


If I can just deal with a couple of other matters raised in the CFMEU's submission.  At paragraph 187 of their submission they talk about the history of the radial areas not surprisingly hasn't had a long history, and I guess the two points that I would make in response to that is that the use of these radial areas seems to have been a largely settled issue since disputes in 1988 to 1990, and that dispute led to a decision about that matter in 1990.  So, again, we're dealing with a dispute and we're dealing with a provision that's over 27 years old.  My understanding is that again these were part of a package of changes agreed to by the parties.  So from our perspective these provisions actually haven't fully been re-assessed for a very, very long time.


The CFMEU also make a number of assertions at paragraph 186 about the distant work provision that we were discussing.  Again, you know, some of the matters are not specified in the current clause such as the mode of transport.  There's a question about how the provisions would apply to a casual employee.  The current provision doesn't deal with that as it is now, so we didn't try and deal with things which were outside the scope of the current clause, and I've addressed the other matters that I sought to raise in reply to those matters raised.


VICE PRESIDENT HATCHER:  So just that point, so is there some doubt about the application of the current clause for casuals, is there?


MS ADLER:  I don't think there's doubt about it.  I think that the provision applies and casuals are not excluded from its application, so I was sort of surprised a little bit about the question in the union reply submission about how it would work for casual employees.


Just finally we say that our proposed variation helps the award better meet the modern award objectives.  What we propose is simpler.  It's easy to understand.  It reflects more modern work practices and, as opposed to some assertions in the union's submission that we're simply trying to find a way out of paying the allowance that's not the case at all.  We want our members to comply with the provisions, and we submit that our variation would assist them in doing that better.  They're all the submissions that I wish to make.


VICE PRESIDENT HATCHER:  You said that currently the allowance is payable on rostered days off, is it?






MS ADLER:  It is clause 25.10 off the top of my head;. 26.10(a)(ii).




MS ADLER:  So I guess the other observation about the provisions compared to what we propose is that we have all in one provision listed the circumstances in which the allowance is paid and is not paid.  Under the current provision working that out you need to read all 10 sub-clauses.  So at our proposed variation, 25.1(c) we list – well, sorry (a) and (c) we say when it is paid and then all of the circumstances in which is not paid in the one provision.  So it is very clear on the face of the award what the entitlements are and when they are applicable.


VICE PRESIDENT HATCHER:  There's no exclusion where the employer provides transport?


MS ADLER:  No, there is not.  If you have a look at current clause 25.8 part (a) talks about where an employer provides or offers to provide transport free of charge the employee is not entitled to the allowance, however under sub-clause (b) the daily fares allowance will be payable despite the employer providing a vehicle free of charge.  That is a source of confusion for members and one of the aspects of our variation is to change sub-clause (b).


DEPUTY PRESIDENT GOSTENCNIK:  You're also proposing to change the current provision so that the allowances are not taken into account in calculation of annual leave loading?


MS ADLER:  That's right, your Honour.  Yes.


COMMISSIONER GREGORY:  How do you reconcile 25.8(a) and (b)?


MS ADLER:  In a practical sense we read each sub-clause on its own, but obviously we see that there's an issue on the face of the provisions in that even in circumstances where – well, the underlying proposition behind the provision is that the allowance recognises travel patterns and costs peculiar to the industry whereas 25.8 says that despite the fact you are travelling if the employer provides a vehicle you don't get the allowance which, to me, seems to contradict the underlying intent of what the fares allowance is about as described in the award compared to 25.8(b) which says, "Well, we'll give you a car but you still get the allowance".


VICE PRESIDENT HATCHER:  Is the allowance purely expense related or does it have some element of disability associated with having to change from workplaces, from one project to the next, and the hassles associated with that?


MS ADLER:  I guess I'd probably say two things in response to that, your Honour; the first is that 25.1 of the current provisions says that the fares and travel patterns allowance recognises travel patterns and costs peculiar to the industry which include mobility in employment, and the nature of employment on construction work, so sort of got that proposition sitting there within the award.  On the other hand, we would also say that there is obviously an expense component to the allowance to cover the cost of that travel involved in working in construction work and that where you are provided a vehicle you're not incurring that expense, but under the current provision the employer is still required to pay the allowance.




MS ADLER:  Thank you, your Honour.




MR SCHMITKE:  Thank you, your Honour.  There are three items relevant to this particular provision about which we've made a claim.  They deal with the clarification of the application of this clause, an extension of the radial areas to 75 kilometres, and a clarification of one of the allowances to which Ms Adler was just referring with respect to the employee's use of the vehicle where provided by the employer.


I might just deal firstly with the first aspect.  I should mention that these matters are canvassed in our submissions on pages 18 through to 24, and they're relevant to items 10 through to 13 in the draft determination that was provided to the Commission on Friday.  I should just clarify from the outset that in relation to that draft determination, item 10, which clarifies the particular provision we're talking about regarding the application of the clause, the draft determination makes reference to a radius of 75 kilometres.  It's currently 50 in the actual award, so it sort of reflects the second item which I will deal with.


In terms of this particular provision, clause 25.2 is the relevant clause.  The existing provision talks about:


An employee, other than an employee in the metal and engineering and construction sector who's required to cease work at the employer's workshop, yard or depot other than on a construction site must be paid an allowance of –


And the allowance is spelt out.  There's some history in terms of this particular provision between the parties which I will attempt to summarise.  It's more detailed in our submission, but essentially the clause is derived from two previous clauses in the National Building Construction Industry Award 2000 and the National Metals Engineering On-site Construction Award 2002.  Those two particular awards were, I suppose, combined or provisions that were common were combined in the modernisation process.  But the clause that is reflected in the award currently was reflected in the NBCIA award, and in terms of the equivalent provision in the metals award, National Metals Award, there was a particular exemption that was provided with respect to those individuals undertaking work in that sector, and that exemption was that they wouldn't receive the allowance for any day that the employee started and ceased work at the employer's workshop, yard or depot.  So in other words, they would travel to their normal place of work, they'd start work, and then in working hours travel to the construction site, and then return back to the depot at the end of the day, and in that situation they didn't receive the allowance.


The result of ‑ ‑ ‑


VICE PRESIDENT HATCHER:  So they're travelling to the construction site in paid time?


MR SCHMITKE:  Correct, yes.  Unlike being required to travel directly to the site, and of course that particular provision was covered.


It got lost during the modernisation process and, as a result, the combination of those clauses, and I can firstly fully appreciate how this could have occurred, meant that the distinction between those two types of employees was lost.  It now means that the employees in that sector get the allowance even though they're starting at their normal place of business and finishing at their normal place of business.


We've tried to resolve this matter on a number of occasions.  There is a case that we referred to in our submissions which is [2011] FWA 6966.  It was a matter before Watson SDP.  The long and short of it is that – I refer to it as the comma case.  The adjustment of a comma within the particular provision had led to problem regarding how it's to be interpreted.  Watson SDP sought to fix it and to clarify its operation and we say that it didn't clarify the operation.


VICE PRESIDENT HATCHER:  So why doesn't it clarify it?


MR SCHMITKE:  The existing provision essentially operates to the effect of that employees get the allowance except for those who are in the sector who are required to commence and cease at the employer's workshop, yard or depot other than on a construction site.  That's still unclear.  We say that's unclear.


VICE PRESIDENT HATCHER:  What's unclear about it?


MR SCHMITKE:  It's interpreted to mean that employees get the allowance unless they're working in the metal and engineering construction sector, and they're required to commence or cease work at their workshop or depot, and that that depot is other than on a construction site.


VICE PRESIDENT HATCHER:  What should it say?




VICE PRESIDENT HATCHER:  What do you say it should say?


MR SCHMITKE:  Our determination is just makes it very simple and says – leaves the existing provisions as they are but has a sub-clause that says, "Clause 25.2(a) does not apply to employees in the metal and engineering sector who begin and cease work at the employer's workshop yard".  So this is merely a clarification provision.


VICE PRESIDENT HATCHER:  I'm not grasping the difference.




DEPUTY PRESIDENT GOSTENCNIK:  Is it suggested that there are some employer workshop yards or depots that are on the construction site; is that the point?


MR SCHMITKE:  There's a number of problems.


DEPUTY PRESIDENT GOSTENCNIK:  And therefore they don't get the benefit of the exclusions; is that ‑ ‑ ‑


MR SCHMITKE:  There's that aspect.  There's also the aspect of the industry itself, this is a common clause which members make inquiries about in terms of how it's to be read, and that is because when you look at that particular clause the sector is used to the provisions that existed in the pre-modern awards and it is a source of uncertainty and it's unclear.


Again, we ask that the Commission consider this particular proposal in the context of clarity; simple to understand provision.  We're not seeking to change anything.  It's just simply seeking to resolve an issue which has been a longstanding source of contention for no reason other than how it's to be read in a practical sense.  I do not ‑ ‑ ‑


VICE PRESIDENT HATCHER:  So if it simply said, "An employee is required to start and finish work at a construction site is entitled to", would that do the job?


MR SCHMITKE:  The problem is that that then doesn't necessarily cover off the metal and engineering sector, so that's the distinction.


DEPUTY PRESIDENT HAMILTON:  The problem with 25.2 is it has about four or five different operative conditions all of which interrelate.


MR SCHMITKE:  Yes, you're right, your Honour, and in fact ‑ ‑ ‑


DEPUTY PRESIDENT HAMILTON:  And I can't follow it.


MR SCHMITKE:  Of course ‑ ‑ ‑


DEPUTY PRESIDENT HAMILTON:  Maybe I'm a bit slow but I actually can't follow it.


MR SCHMITKE:  In a matter before Watson SDP it was noted that in one case the comma fell off as an administrative oversight.  Then the comma was re-inserted as an administrative correction and, as I said, Master Builders and the CFMEU have arbitrated this case over the location of the comma.  I'm glad there's no exclamation marks in this instrument we'd be in a High Court.  We're just simply seeking to provide some clarity.


DEPUTY PRESIDENT GOSTENCNIK:  But doesn't Ms Adler's proposal have that effect?


MR SCHMITKE:  We would prefer our solution because we cover off on the same areas in many respects.


DEPUTY PRESIDENT HAMILTON:  Do you think Ms Adler's solution is simpler than the current clause?


MR SCHMITKE:  To the extent that – look, actually we would prefer our clause.  That is not to say that the HIA's clause is not an improvement on the current situation, but we think ours is much simpler.  Given the history of this, given that we're arbitrating over where a comma is we do think that our provision is much more sensible.


MR MAXWELL:  Your Honour, from my recollection, I was involved in that case regarding the comma.  I don't believe it was by arbitration.  My understanding was it was by consent of the MBA and CFMEU.




MR SCHMITKE:  If I might just deal with the next aspect of our claim which is to extend the operation of radial areas provision.  What we seek to do here is simply to change the existing radial area of 50 kilometres to 75 kilometres and make that consistent throughout the award.


Again, there is a long history in terms of the radial areas.  I won't seek to traverse the grounds that are covered by Ms Adler to the extent that it was common, but simply is this; the pre-reform award used to utilise particular different ways to measure what a radial area was in terms of location.  So within New South Wales, for example, there's references to the County of Cumberland, Country of Camden and so forth.  There were also references to particular geographic areas in the pre-reform award in Victoria, for example, Bendigo and so forth.  Within other States there was a simple reference to a 30 kilometre or other defined by kilometre type of arrangement.  Obviously through the modernisation process this was considered to be a State difference and the 50 kilometres was adopted and established consistently throughout the award.


Our essential submission here, or the base line submission is that we think times have changed; the 50 kilometres was set up at a point in time where there wasn't necessarily the infrastructure that exists now.  I am aware that the provision was in an award from 1972, and as a result we just think that if we're going to use the instrument of 50 kilometres then to define a radial area it should be expanded to take account of things like Penrith, for example.  So right now I could travel, as your Honour pointed out before, from this ‑ ‑ ‑


VICE PRESIDENT HATCHER:  Nothing has changed about the trains from Penrith since the 1970s I can assure you.


MR SCHMITKE:  Yes.  But we have the M4 and the M7, your Honour.


VICE PRESIDENT HATCHER:  No construction worker drives to work in the city, I can tell you that.


MR SCHMITKE:  But this is not necessarily specific to Sydney.  This is of course a change across the board.  Essentially, as I say, it's about modern infrastructure.  It's the fact that I, as an individual employee myself, drive between Canberra and Sydney every week.  I go through three traffic lights and I do it in less than three hours.  That is not something that used to occur.  We've got all sorts of new ways ‑ ‑ ‑


DEPUTY PRESIDENT GOSTENCNIK:  We'll let the police know about that shall we?


VICE PRESIDENT HATCHER:  You obviously don't do it in peak hour that's for sure.


MR SCHMITKE:  I leave at 5.30 on Friday night from Canberra.


MR CRAWSHAW:  Or when they're doing roadworks.


MR SCHMITKE:  Just keeping people's members employed.  But I suppose the simple facts are that we need to make sure that this particular provision hasn't been adjusted for a while, it needs to keep up with what's taking place these days within the sector.  It is not unusual for employees to travel in excess of that 50 kilometres.  In fact, you can't drive, as your Honour pointed out, to Penrith without getting through it.  You go from one bottom end of Sydney to the top, and given that we have new cars; we've got utes; we've got different infrastructure; we do have better public transport; for all of those reasons we say that it's a sound basis to make the adjustment that we seek.  The evidence of Mr Glover I would also refer the Commission to.


If there's no other questions on that then I would move to the third aspect, which is the provision of transport.  We provide a different solution to the same issue that Ms Adler outlined being that we make it clear by seeking to insert the words that the employee is provided with a vehicle and is done so for no other private use.  The only ‑ ‑ ‑


VICE PRESIDENT HATCHER:  Sorry, I missed that.  What did you say?


MR SCHMITKE:  I'm sorry?


VICE PRESIDENT HATCHER:  I just missed that last bit.  What did you say again?


MR SCHMITKE:  And for no other private use.




MR SCHMITKE:  So that's reflected in our determination.  It's additional words to be added in at the end of existing clause 25.8 sub-clause (b).


The only other thing I would add to Ms Adler's submission is to refer the Commission to the earlier part of that particular clause that says that the allowance prescribed as payable on any day the employer provides a vehicle free of charge to the employee for a purpose related to their contract of employment.  They're the words I emphasise; "related to their contract of employment".  And the employee is required by the employer to drive their vehicle from home to their place of work and return.


So we would say that that adds additional weight to the basis for clarification.  It is clear that the provision of the vehicle was only done so for the purpose related to an employee's duties and arising under their contract of employment, and we would seek that the clarification be made on that basis.


DEPUTY PRESIDENT GOSTENCNIK:  Sorry, what precisely is the clarification?  That is, that such employees are not entitled to the allowance; is that the ‑ ‑ ‑


MR SCHMITKE:  Yes.  So this particular one says that it's – sorry, it is payable; the allowance is payable.


DEPUTY PRESIDENT GOSTENCNIK:  Yes.  The clarification you seek is that it not be payable?


MR SCHMITKE:  The clarification is that they're not to use the vehicle for private use in receipt of it.


DEPUTY PRESIDENT GOSTENCNIK:  I see.  Is there any magic in the words that the employee is required by the employer to drive the vehicle?  As opposed to being provided with a vehicle?


MR SCHMITKE:  There is to the extent that it relates to the rest of the clause being required to drive it to their home and, you know, and back, so ‑ ‑ ‑


DEPUTY PRESIDENT GOSTENCNIK:  As opposed to being permitted to do so.


MR SCHMITKE:  Correct.  Indeed it's also provided in the context of a purpose related to their contract of employment.




MR SCHMITKE:  So there's two aspects to that clause.  If it pleases.


VICE PRESIDENT HATCHER:  Thank you.  Any other employer submissions?  Mr Boanza?


MR BOANZA:  Yes.  Thank you, your Honour.  The CCF has put two applications to vary the provisions of transport in this award.  Our first application very similar to Housing Industry and Master Builders, we are seeking to have the provision where the employer pays the travel allowance to an employee who is provided with a company vehicle, for very similar reasons to those already exposed.  There is an inconsistency between two employees; one with a company vehicle; one without a company vehicle both being paid the same travel allowance.  We also say that those decisions were made some years ago, and that it's perhaps now for the Commission to re-consider the basis upon which the travel allowanced is paid to an employee who already has a company vehicle and does not incur any cost in coming to and from work.


VICE PRESIDENT HATCHER:  So does that assume the employer is paying for the fuel as well?


MR BOANZA:  Yes.  The employer pays for the fuel as well, and full maintenance of the vehicle.  The employee simply drives it.




MR BOANZA:  And insurance absolutely.  Yes.  So it's a full maintained company vehicle, usually it's a utility and is used by the employee.  Where it's the same employee or a different employee in the same company catching a bus to work every day is entitled to the same allowance.  We say there's some inconsistency there and needs to be addressed.


The second part of our changes to the travel allowance is in relation to employees who do not work on a building site, or do not work on a building site regularly.  There is confusion in the award in relation to whether those employees are entitled to the daily travel allowance or not.  There is an inconsistency in a difficulty in reading the award.  This has already been exposed in clause 25.2 where the award says that:


An employee other than an employee in the metal and engineering construction sector who is required to commence or cease work at the employer's workshop, yard or depot other than a construction site must be paid an allowance.


We say there's an inconsistency with clause 25.10, early entitlement, which says that:


The travel allowance as prescribed in this clause will be payable any day upon which the employee performs or reports for duty or allocation of work.


In the civil construction industry because of the extensive use of heavy machinery there is quite a number of employees who perform maintenance work on those vehicles, and do not work on a building site on a regular basis if at all.  But on the reading of this award many employees and many employee associations have advised that the daily travel allowance is payable to those employees.


In this response to our claim the CFMEU said on their response that in paragraph 153 and 154 of its response the CFMEU says that those employees are not covered by the Building and Construction Award and therefore the allowance is not payable, and we agree with that, and we're not seeking to change that.  What we are saying is that an employer or an employee reading these travel provisions in the award would not be crystal clear about that, so ‑ ‑ ‑


VICE PRESIDENT HATCHER:  Someone maintaining a vehicle?


MR BOANZA:  No ‑ ‑ ‑


VICE PRESIDENT HATCHER:  Your example was someone maintaining a company vehicle, wasn't it?


MR BOANZA:  No, my example is very simple; a diesel mechanic, if he works on the employer's depot and yard ‑ ‑ ‑


VICE PRESIDENT HATCHER:  That's not even covered by this award, is it?


MR BOANZA:  Sorry?


VICE PRESIDENT HATCHER:  That person wouldn't' even be covered by this award, would they?


MR BOANZA:  That's right.  But what we are saying, your Honour, is that that is not clear in this award, and there has been a number of occasions where employers have been required to pay, or believe that they are required to pay, this allowance because of the provisions of 25.10.


VICE PRESIDENT HATCHER:  But they're just looking at the wrong award.




MR BOANZA:  Sorry?


DEPUTY PRESIDENT HAMILTON:  You said employers have been required; required by whom?


MR BOANZA:  By employee organisations.  So what we are simply seeking to do is to make it crystal clear that those employees are not covered in this award.  If one goes to schedule B of this award, diesel mechanics and fitter and turners are covered in the schedule B.  They're mentioned as a CW3 as tradespeople working in the industry.


VICE PRESIDENT HATCHER:  But are these people you're talking about on a construction site?


MR BOANZA:  Not all the time.  On occasions.  On occasions they work on construction sites because machinery breaks down.  On occasions they do no work on the building site because they're not required to.  They're doing maintenance on the yards or depots or garages, and this is where the confusion arises.




MR BOANZA:  So our intent is not to change in any way how it operates or deny anyone who is entitled to the travel allowance.  What we're seeking to do is to make it very clear that an employee who occasionally works on a building site is not entitled to the travel allowance all the time.




MR BOANZA:  Thank you.


VICE PRESIDENT HATCHER:  Thank you.  Any other employer submissions?  Mr Crawshaw?  Mr Maxwell?


MR MAXWELL:  Thanks, your Honour.  Bear with me for a moment while I just move folders.  Your Honours and Commissioners, in regard to the fares and travel matter the CFMEU reply deals with the various proposed variations by the employers in paragraphs 151 to paragraphs 198 which starts on page 64 and goes through to page 79.


The only evidence provided by employers in these proceedings to support the variations that they seek there is a brief reference in the HIA survey which I know Ms Adler didn't take you to but deals with the extent to which employers in the residential construction industry provide their employees with vehicles, and when you actually look at the survey the overwhelming majority do not provide their employees with vehicles.  There is evidence of Mr Kristie Burt, which is exhibit 28, and then we have the evidence of Peter Glover from the MBA who was cross-examined by the CFMEU last week.


In regard to the HIA survey, the statements of Kristie Burt, and the statements of Peter Glover we rely on the objections to that evidence that was contained in our written submission that was dealt with earlier in these proceedings, and I won't return to that.


In regard to the evidence of Ms Burt, it is pertinent that she has only spoken to 50 members out of 1300 members in the region that she covers over this clause since May 2013.  So we submit this is not a major issue of controversy.  In regard to the Glover evidence, under cross-examination, Mr Glover agreed that in regard to the history of the radial areas and what radial areas apply prior to the making of the modern award in 2009, that he was unaware that the radial areas were Adelaide, Tasmania under the ACT Act and the NT Award, and that's dealt with in the transcript in PN2418 through to PN2422.


Mr Glover also accepted that the majority of metropolitan areas were not based on the 50 kilometre radius prior to the making of the modern award and that's found in PN2423.  Mr Glover did not have any evidence to support his claim to reduce travel time, and that is dealt with in PN2426, nor could he refer to any studies.  Mr Glover agreed that the increased congestion has led to increased travel times.  That's in PN2431, and that when presented with the Austroads congestion reliability survey he conceded that travel times have not reduced within the major capital cities and that's found in PN2441.  Mr Glover only had anecdotal evidence in regard to New South Wales regional areas and that's dealt with in PN2443.


If I can then turn to our written submissions.  In paragraph 152 and 153 and 154 I deal with the CCF claim in regard to the employees who do not work on construction sites; the employees that the CCF can claim about; diesel fitters and mechanics, and we submit that if they only report to the depot and perform work at the depot, if it is not on a construction site then they are not covered by the award and so the fares and travel doesn't apply.


Mr Boanza made some unsubstantiated claims that some employee organisations have made claims on employees working at the workshop.  He's provided no evidence of any claims and we are unaware of any claims being made applying to the CFMEU noting that we don't cover diesel mechanics or mechanics.


In regard to the issue that Mr Schmitke raised in regard to the comma or the decision regarding the comma, that's dealt with in paragraph 155 of our written submission, and I will just take you to the – I've included an extract from the decision of his Honour, and if I can just take you to paragraph 10 of that decision which is found at the bottom of page 66 of our written submission and Watson SDP found that:


However, it is now clear that there is a common position between the major parties - the CFMEU and the MBA - that the inclusion of the comma reverses the intended effect of the exclusion within clause 25.2 and reverses the historical position reflected in clause 20.3.4 of the National Metal and Engineering On-Site Construction Award 2002. There is now agreement between the parties as to the form of the variation required - the removal of the comma following the word 'sector'.


So just to dispel with the suggestion by Mr Schmitke that this was somehow arbitrated it is clear that there is a consent position reached between the CFMEU and the MBA and that was reflected in the decision for the variation that was done by his Honour Watson SDP.


VICE PRESIDENT HATCHER:  So does the HIA draft have the same effect?  Just simply says it's payable for each worker when the employee starts and finishes on a construction site?


DEPUTY PRESIDENT GOSTENCNIK:  Which would include a depot located on a construction site.


MR MAXWELL:  Yes, to that extent it would.  It would address that discrete issue.


VICE PRESIDENT HATCHER:  It would perhaps, on one view, give it to people who might not currently have it, but, that is, on your organisation's perspective, does the HIA draft in that respect involve any detriment to any employee?


MR MAXWELL:  It wouldn't deal with all situations because you can have a situation under the award for example with employees, and I suppose canvassing issues that will be dealt with later in the distant work provisions, but if employees are on distant work and they are living on a camp or accommodation away from the site, and they are required to go to a central point for pick up to then travel to the site that the HIA proposal wouldn't cover those people because essentially they all start at the pick up rather than necessarily on the construction site.


DEPUTY PRESIDENT GOSTENCNIK:  But wouldn't they ‑ ‑ ‑


VICE PRESIDENT HATCHER:  They're getting picked up from their accommodation.


DEPUTY PRESIDENT GOSTENCNIK:  Wouldn't that be caught by the exclusion about provision of transport.


MR MAXWELL:  The provision of transport doesn't take them from the accommodation to the central pick up point.


VICE PRESIDENT HATCHER:  So what's an example where that occurs?  As a pick up point that's not at the place of accommodation?


MR MAXWELL:  My understanding is on some of the major projects in the north-west shelf ‑ ‑ ‑




MR MAXWELL:  ‑ ‑ ‑ that the employees are accommodated in various camps, and I think in Barrow Island they're actually accommodated on a ship; that those employees then – the ship obviously because that is adjacent to the site, but there are employees that may be around the Burrup Peninsula that may be accommodated in Port Headland, they will be required to travel from Port Headland to a central pick up and they're then transported to the site.  So for the time they travel from the accommodation to the pick up they would be entitled to the fares and travel.




MR MAXWELL:  The ‑ ‑ ‑


VICE PRESIDENT HATCHER:  So they currently get the daily fares allowance, do they?


DEPUTY PRESIDENT GOSTENCNIK:  Sorry, how would that employee not get the daily fares allowance under (a) of Ms Adler's proposal?  Are they being paid when they get picked up or are they getting paid when they get dropped off at the site?  Because if they get paid when they're dropped off at the site that's where they start work, and they'd be entitled to the allowance.


MR MAXWELL:  I suppose it depends whether the pick up point would be considered the construction site.


VICE PRESIDENT HATCHER:  It doesn't matter.  If they're starting work on a construction site then it doesn't matter about the pick up point, does it?


MR SCHMITKE:  Your Honour, if I might just draw the Commission's attention to clause 24.7 sub-clause (d) which potentially is relevant to the discussion you're having with Mr Maxwell.


VICE PRESIDENT HATCHER:  So what was it?  Twenty-four?






MR SCHMITKE:  Sub-clause (d).  I should indicate that's a matter we seek to clarify at a later point in these proceedings but it's perhaps relevant to the circumstances.


VICE PRESIDENT HATCHER:  Thank you.  Mr Maxwell, I'm not sure you've given yet an example under which the HIA proposal would cause any detriment to anyone.


MR MAXWELL:  Your Honour, perhaps if I can take that mater on notice and ‑ ‑ ‑


VICE PRESIDENT HATCHER:  All right.  Thank you.


MR MAXWELL:  Your Honours and Commissioner, in regard to the further variation proposed by the CCF which is in regard to delete clause 25.8(b), which is also an issue raised by the HIA, and indeed the MBA seeks the variation to clause 25.8(b).  This is the issue about the provision of the vehicle.  On our view of the award, the award is clear, and it's been a well understood practice that the allowance is only paid to an employee who is provided with a company vehicle if the company vehicle is provided under that contract of employment and they are required by the employer to drive the vehicle to and from work.


VICE PRESIDENT HATCHER:  The requirement being because it's a vehicle which can be used for work purposes.


MR MAXWELL:  That's right.


VICE PRESIDENT HATCHER:  So if it's just a company car in the normal sense they're not entitled to the allowance?


MR MAXWELL:  They're not entitled to it, no.


DEPUTY PRESIDENT GOSTENCNIK:  Why do you say provided under the contract of employment?  The relevant provision says that it's provided to the employer for a purpose related to their contract of employment.


MR MAXWELL:  Sorry, it does say related, but it's then a requirement of the employer that they are required to travel to and from work in the company vehicle.




MR MAXWELL:  Just to give some background to this, this matter was dealt with to some extent in a Federal Court decision that's referred to in both the HIA written submission and our own written submission which relates back to 1981, a dispute involving Builders Labourers Federation and the Master Builders in Victoria.  The issue there was whether the provision of a vehicle was considered transport, and the ‑ ‑ ‑


VICE PRESIDENT HATCHER:  Yes.  What paragraph does that refer to?


MR MAXWELL:  This is referred to in ‑ ‑ ‑




MR MAXWELL:  Paragraph 1-7-6 and we go on and deal with that in 1-7-8 – sorry, in 1-7-7 we provide an extract from the decision and in 1-7-8 we say what we believe to be the importance of that decision and that is that it confirms if an employee was provided with a vehicle and was required to drive to and from home to the construction site then the time spent so driving was work time.  The issue is under this award that the payment of the allowance was then to obviate the need for the employer – because it was paid in compensation for that travel time, then the employee was not required to calculate the travel time on each day and if anything ‑ ‑ ‑


VICE PRESIDENT HATCHER:  So they get the fares allowance as a trade-off for the working time for driving to work?


MR MAXWELL:  That's correct.  So we submit that if the fares allowance is removed from being paid or to the employees provided with a vehicle well then the award should reflect that it's being considered travel time and they be paid accordingly.  So we submit that there is more to the variation than meets the eye.


VICE PRESIDENT HATCHER:  Why do you get the payment on an RDO?


MR MAXWELL:  You get the payment on the RDO.  First of all that was the decision when they introduced the 38 hour week to get the payment on the RDO.  It was on the basis that the time for the RDO is reflected in the time that the people worked on the other days, and ‑ ‑ ‑


DEPUTY PRESIDENT GOSTENCNIK:  For which they'd already received a fare and travel allowance.


MR MAXWELL:  Which they have already received, but it was on the basis that when they introduced the 38 hour week the intent was not to disadvantage employees in regard to their entitlements, and so because of the two hours then making up the RDO it was decided that the employees would be paid the fares and travel on the RDO, and there's a reference to the decision in the written submission.


DEPUTY PRESIDENT HAMILTON:  That's treating the allowance not as some sort of compensation for an expense or disability but as something else, isn't it?  It's like automatic payment of sick leave or something.  It's confusing the two issues.


MR MAXWELL:  To some extent it may be.  Your Honours, I deal with this issue in paragraph 181 of our written submission, and you'll see that the payment of the fares and travel on the RDO was part of an arbitrated decision of the Full Bench of the Australian Industrial Relations Commission.  We've said that on the RDO they're also paid for travel time.


VICE PRESIDENT HATCHER:  There's something about that in that decision, is there?


MR MAXWELL:  Unfortunately that is the only reference in that decision but it was part of a package that was arbitrated by the Commission at the time.


DEPUTY PRESIDENT HAMILTON:  Thirty-eight hour a week packages were notoriously opaque and not every one of them bore close analysis to (indistinct).  I'm sure this one does, but ‑ ‑ ‑


MR MAXWELL:  Yes, your Honour.  I ‑ ‑ ‑


DEPUTY PRESIDENT HAMILTON:  Perhaps you should leave that one alone is what I'm saying.


MR MAXWELL:  Yes.  Our submission is that it's a reduction in the existing entitlements.  There's no proper evidence to suggest it should be changed.  There's just the submissions at the Bar table and we say it should be retained.


VICE PRESIDENT HATCHER:  In the CFMEU's enterprise agreements how is the issue of daily fares allowance dealt with?  Is it dealt with in this amount of detail or is there some other approach taken?


MR MAXWELL:  The enterprise agreements rely on the raw provision generally.  They do have variations in regard to the payments; the daily fares and travel payments is significantly higher in our enterprise agreements, and I think in something like over 200 agreements if you go out of the 50 kilometre radius that the payment is doubled up to a certain radius because after that distance it is then not reasonable to expect people to return home each day and then it's considered living away from home.  But generally the agreement provisions follow the award.


Your Honour, perhaps if I, rather than going through the rest of our submissions, deal with this issue of the areas that seems to create so much confusion amongst the employer parties but which we believe is a well-settled issue within the industry and as far as we're aware there have been no disputes over this since 1989.  The dispute in 1989 was not small.  The dispute that led to the arbitration by Commissioner Grimshaw involved employers having to pay millions of dollars because of a certain interpretation of what the award clause meant, so we would stress that the Commission should be very cautious in regard to changing entitlements which may lead to substantial wage claims which, I think, you'll get a great understanding from when I just hand up two exhibits which show the 50 kilometre radial areas of Melbourne and Sydney.  Given that Members of the Bench are from Melbourne and Sydney I assume you'd have a greater understanding of those radial areas.


So I seek to hand up copies of these maps.


VICE PRESIDENT HATCHER:  So if there's no objection I'll mark these.  So the radial map for Sydney will be exhibit 45.



VICE PRESIDENT HATCHER:  The radial map for Melbourne will be exhibit 46.



MR MAXWELL:  Thank you, your Honour.  Your Honour, if I can start with the radial map of Sydney.  Ms Adler said that it's not clear how the radial areas are calculated; whether it's based on travel by road or some other measurements.  That's clearly incorrect.  The award talks about a radial area, so you use a radius of 50 kilometres from the GPO in Sydney and you move it around in a circle and that gives you the area within which the fares and travel allowance is paid.


So if you look at the map of Sydney, if an employee works at Castle Hill or at Parramatta or Bankstown or Liverpool or at Helensburgh or Umina Beach up in the north they were all paid the same $17.43.  There is no other calculation that an employer is required to do.  They just have to work out is the construction site within that 50 kay radius.  Similarly if you were ‑ ‑ ‑


VICE PRESIDENT HATCHER:  If I live at Penrith which is just outside the radial area ‑ ‑ ‑


MR MAXWELL:  You live outside the radial area, and this was the issue that was dealt with in the 1989 case, because if you live outside the area, unless you're specifically required by your employer to cross the boundary area, and you just apply for the job in Sydney, for example, then you are only paid the 17.43.




MR MAXWELL:  If an employer lives at Penrith ‑ ‑ ‑




MR MAXWELL:  ‑ ‑ ‑ and they apply for a job in Sydney and they get the job then they're only paid the 17.43.




MR MAXWELL:  Because the ‑ ‑ ‑


DEPUTY PRESIDENT HAMILTON:  If they're outside the 50 radius?


MR MAXWELL:  Because if you look in the wording of the award it says if the employee is required to cross the boundary area.  So in that situation the employee has applied for work, they're not being required.  It's different, for example, if the employee is working on an existing project in Sydney, and then is required, for example, to go and work on the central coast, which is outside a 50 kilometre radius, then they would be entitled to the fares and travel and the distance from the radial area up at Gosford to the job on the central coast.


VICE PRESIDENT HATCHER:  So if I live at St Marys ‑ ‑ ‑


MR MAXWELL:  If you live at St Marys ‑ ‑ ‑


VICE PRESIDENT HATCHER:  ‑ ‑ ‑ and I've got a construction job at Penrith.


MR MAXWELL:  At Penrith.


VICE PRESIDENT HATCHER:  There's a lot going on at the moment.








VICE PRESIDENT HATCHER:  What do I get then?


MR MAXWELL:  If you live at St Marys and you go – perhaps if I say Emu Plains, because the map runs – the radial area runs through Penrith.


DEPUTY PRESIDENT HAMILTON:  Is Penrith outside or inside?


MR MAXWELL:  Part of Penrith is inside and part of Penrith is outside.








MR MAXWELL:  To be fair, prior to the 50 kay radius when it was based on the County of Cumberland is the Hawkesbury was the boundary.


VICE PRESIDENT HATCHER:  Nepean River that is.


MR MAXWELL:  Sorry, the Nepean River.  So in that case if they're required to work outside the radial area then they'd be entitled to the fares of 17.43 and then the additional provisions of the time and kilometres.


VICE PRESIDENT HATCHER:  So you get a different amount depending on which way you're travelling?




VICE PRESIDENT HATCHER:  So if I go from Emu Plains to St Marys I just get the basic allowance?




VICE PRESIDENT HATCHER:  If I go from St Marys to Emu Plains I get the basic allowance plus distant work?


MR MAXWELL:  Yes.  This was a swings and around abouts that were recognised when radial areas were agreed to.  If we move away from the radial areas and apart from the ABI, I'm not sure that any other employer organisations are actually supporting the HIA's proposal to move away from radial areas, we end up with a different situation.  Perhaps if I can give this example; if an employee lives at Blacktown and they were then required to go and work in Cronulla then, depending on which route you took if you were driving, if you went via the M4 and A3 it would be a distance of 49.2 kilometres so it would be within the 50 kilometre radius.  However, if they went via the M7 and the M5 it would be a distance of 63.3 kilometres which will be outside of the 50 kilometre distance that the HIA seek to use.  So, in that scenario, and there is another provision of the HIA clause, which I'll come to in a second, but on that scenario if the employee travelled by the M7 and the M5, under Ms Adler's proposal, they'd be entitled to the 17.43 fares and travel plus the travel time plus the kilometre rate for the extra 13.3 kilometres that they travelled.


Just to, I suppose, to assist those Members of the Bench that live in Melbourne, if I can give an example in Melbourne, you will see that the 50 kilometre radius from GPO in Melbourne covers Mt Eliza, Cranbourne, Yarra Glen, Wallan, Sunbury, all the way down to Little River, and if you have an employee, for example, that lives in Craigieburn, which you will see in the middle of the radius, north of Melbourne, if they went from Craigieburn to Dandenong, and Dandenong is in the south east corner of the radial area, that depending on which way they go, if you went via the M1 it will be a distance of 64.2 kilometres, and if they went via the M2 and the M1 it would be 71.3 kilometres.


The issue here is that currently we have, what we say is, a simple radial area around the GPO.  It is well understood by the industry that that applies.  Under the HIA's proposal the employer would have to calculate the distance for each employee from their home to their job, and each time the job changed they would have to do the calculation.


DEPUTY PRESIDENT GOSTENCNIK:  Mr Maxwell, can I, so that I understand how all of this works, let's assume we have one of Ms Adler's members who is performing some construction in Caroline Springs on the Melbourne map, and they have engaged an employee who lives in Macedon which is outside the radial map, that employee would be entitled to the initial fares and travel because the location is inside the radial map, that is, the 17.43?




DEPUTY PRESIDENT GOSTENCNIK:  And they would be entitled to the provisions of distant work because the – well, sorry, I'm not sure whether that's 50 kilometres, but let's assume for argument sake, Macedon is 51 kilometres away from Caroline Springs, it's probably not looking at that thing, but for argument sake let's assume that for the moment.  The employer would then be entitled to the distant work provisions as well; is that right?


VICE PRESIDENT HATCHER:  I thought you said no before.


MR MAXWELL:  Sorry, under our provision if the employee lives in Caroline Springs and was required to go over to Mt Macedon, so ‑ ‑ ‑


DEPUTY PRESIDENT GOSTENCNIK:  No, the employee lives in Macedon ‑ ‑ ‑




DEPUTY PRESIDENT GOSTENCNIK:  ‑ ‑ ‑ works in a construction site – well, let's make it clear, so the construction site is in Melbourne.




DEPUTY PRESIDENT GOSTENCNIK:  So the location of the construction site is within the 50 kilometre radius so the initial fares and travel amount is payable; yes?




DEPUTY PRESIDENT GOSTENCNIK:  In addition to that because the employee lives in Macedon, that is more than 15 kilometres from there, they're entitled to the distant work provisions unless the employee lived there at the time that they were employed; is that the way it works?


MR MAXWELL:  Under the existing award provision.




MR MAXWELL:  If they lived at Mt Macedon and worked in Melbourne they would only be paid the 17.43.


VICE PRESIDENT HATCHER:  Even if they're travelling more than 50 kays?






MS ADLER:  Sorry, I beg to differ.




MS ADLER:  Clause 25.6, if the employee is residing outside a radial area and they cross a radial boundary they're entitled to other allowances under the provision, so ‑ ‑ ‑


DEPUTY PRESIDENT GOSTENCNIK:  Yes.  That's my point.  They're entitled to the distant work allowance.  They're entitled to the metropolitan radial allowance, the distant work allowance, and, in appropriate circumstances, the country radial area as well.


MS ADLER:  There's a range of entitlements depending on where the employee lives and where the construction site is.  Not just what the employer required the employee to do.


VICE PRESIDENT HATCHER:  You get the allowance in 25.2.  That's the basic allowance, isn't it?


DEPUTY PRESIDENT HAMILTON:  Yes.  Then they get the distant work one.






VICE PRESIDENT HATCHER:  When does 25.3 come into it?


DEPUTY PRESIDENT GOSTENCNIK:  Because the employee resides outside the radial area, and then 25.6.  You need to go to 25.6 first though.


DEPUTY PRESIDENT HAMILTON:  I think you can conclude that it's a somewhat complex issue.


VICE PRESIDENT HATCHER:  Sorry, just so I understand it.  Ms Adler, can you just explain for me, rather than Bench arguing amongst ourselves?


MS ADLER:  So I think ‑ ‑ ‑


VICE PRESIDENT HATCHER:  They get the allowance – if you're outside the radial area you get the allowance prescribed in clause 25.2.  That's the basic allowance?




VICE PRESIDENT HATCHER:  Where do you get the additional bit from?


MS ADLER:  There's another clause which deals with what happens when you reside outside a radial area.


VICE PRESIDENT HATCHER:  So what clause is that?


MS ADLER:  25.6




VICE PRESIDENT HATCHER:  That's what I'm reading.


MR CRAWFORD:  There's no additional entitlement in 25.6.


VICE PRESIDENT HATCHER:  I'm reading 25.6.  It says if your residence is outside the radial area prescribed and you cross a radial boundary to travel to a construction site you will be entitled to the allowance prescribed in 25.2.  That's the basic allowance.  I don't understand where you get something additional from that.


MS ADLER:  My apologies.  It just says you're not entitled to time reasonably spent in travelling from the radial boundary to the job and return to the radial boundary.  So I apologise.




MR MAXWELL:  Your Honours and Commissioner, the other point I'd make in regard to the HIA clause is that there is then the further provision under the distant work, their 25.3, which is 25.3(b), which Ms Adler has not taken you back to which has a significant effect on people's entitlement under the HIA proposal, and that says that the provisions of 25.3(a) ‑ ‑ ‑


VICE PRESIDENT HATCHER:  Where are you reading from?


MR MAXWELL:  Sorry, this is from the HIA document, their comparison document to the clauses, in page 2, at the bottom of page 2 in the right-hand column.


DEPUTY PRESIDENT GOSTENCNIK:  The case under that proposal would have the effect that I was alluding to?  That is, they'd get their initial allowance plus the distant work allowance; is that ‑ ‑ ‑


MR MAXWELL:  No, my understanding is that if, at the commencement of employment ‑ ‑ ‑




MR MAXWELL:  ‑ ‑ ‑ the employee's usual place of residence was more than 50 kilometres from the construction site ‑ ‑ ‑




MR MAXWELL:  ‑ ‑ ‑ from which the employee was initially engaged then they don't ever be entitled to the 17.43.


DEPUTY PRESIDENT GOSTENCNIK:  They would have been entitled to the distant work provision.  It's ‑ ‑ ‑


MR MAXWELL:  No, because (b) says this provision does not apply.


DEPUTY PRESIDENT GOSTENCNIK:  Yes, but this provision being 25.3.


MS ADLER:  That's right.


DEPUTY PRESIDENT GOSTENCNIK:  That's my reading of it.


MS ADLER:  25.3(a).


DEPUTY PRESIDENT GOSTENCNIK:  The distant work provision, but they would still get the 25.1 allowance?


MS ADLER:  That's right, your Honour.


VICE PRESIDENT HATCHER:  So on your Mt Macedon example that's the same result, isn't it?  The only disadvantage is if you travel in the opposite direction.  That is if you live in Melbourne and you were travelling to Mt Macedon.


MR MAXWELL:  If you were living in Melbourne and ‑ ‑ ‑


VICE PRESIDENT HATCHER:  Just answer the first part.  So that 25.3(b) would make no difference on your Mt Macedon example, or by Gostencnik DP's Mt Macedon.




MR MAXWELL:  Not the employee that's living in Mt Macedon.




DEPUTY PRESIDENT GOSTENCNIK:  It might be Mt Macedon for somebody that lives past Penrith, but in Victoria it's Mt Macedon.


MR MAXWELL:  However, because the employee lives at Mt Macedon and the Melbourne construction site is more than 50 kilometres then for any other job that the employee, who lives in Mt Macedon goes to, that is more than 50 kilometres from their home, they will only be paid the 17.43.


VICE PRESIDENT HATCHER:  If the job is in the radial area that would be the case anyway, wouldn't it?


MR MAXWELL:  If it's within the radial area there would be no change, but it doesn't restrict it to the radial areas under the HIA proposal.


DEPUTY PRESIDENT HAMILTON:  It abolishes radial areas.


MR MAXWELL:  It abolishes the radial areas.  So there's no radial areas to apply.  So what we say, on the HIA's clause, that if an employee lives at Mt Macedon and was originally engaged on a site in Melbourne they would only ever be entitled to the 17.43.


DEPUTY PRESIDENT GOSTENCNIK:  But isn't the limitation in paragraph (b) relevant only to the construction site upon which they were initially engaged?  That is, if, at the commencement of their employment they lived in Macedon and they were engaged initially on the Melbourne site then they wouldn't be entitled there to distant work allowance, or the distant work provisions.  They would nonetheless be entitled to the daily fares allowance.  If they were subsequently relocated to a construction site in South Yarra they would become entitled to a distant work allowance because that would be more than 50 kilometres away.


MS ADLER:  Yes, your Honour.  The mischief, I guess, that the provision is targeted at is an employee knowing that they are beyond 50 kilometres ‑ ‑ ‑


DEPUTY PRESIDENT GOSTENCNIK:  I understand.  From the site on which – yes.


MS ADLER:  ‑ ‑ ‑ from the site when they take the job.


DEPUTY PRESIDENT GOSTENCNIK:  Yes.  But if, after having been employed, and having commenced on site A ‑ ‑ ‑




DEPUTY PRESIDENT GOSTENCNIK:  ‑ ‑ ‑ they shifted to site B, which is also more than 50 kilometres away they would become entitled, as I read it, to the ‑ ‑ ‑


MS ADLER:  That's right, your Honour.  Yes.


DEPUTY PRESIDENT GOSTENCNIK:  Yes.  But in any event they would always be entitled to the initial allowance.


MS ADLER:  Yes.  That's right, your Honour.


VICE PRESIDENT HATCHER:  Is there anything else?


MR MAXWELL:  Your Honours and Commissioner, I'd also point out that in paragraph 186 we deal with the other problems that we've identified with the HIA proposal.  One that I should raise is that their reference to distant work, the industry's understanding of distant work is where employees are required to live away from home.  They are seeking to introduce a new understanding of what distant work is which we say will lead to confusion within the industry, but if you look at the other items I've raised, that if an employee changes their address one week after commencing work with an employer and moves to an address more than 50 kilometres from the construction site that they're still entitled to the additional payments.


The Bench has raised how is the 50 kilometre distance to be calculated.  The HIA have offered no firm view as to how that's to be calculated.


DEPUTY PRESIDENT HAMILTON:  How is it calculated under the current award?


MR MAXWELL:  Under the current award it's quite simple.  It's the 50 kilometre radius.  You get a map, you ‑ ‑ ‑




MR MAXWELL:  As the crow flies 50 kilometres.  There is the issue of what site is to be used for their initial engagement in the case of apprentices, trainees who are engaged by the training companies.  In regard to casuals the issue we raise in regard to casuals is, and if you take the example of labour hire companies, which has been raised in these proceedings, in terms of the question asked of one of our witnesses about whether labour hire is illegal, and of course, it's not, but if you take labour hire employees they have a changing place of employment on a very regular basis, if not, daily.  So a labour hire employee on construction, in the construction industry, you would then have to calculate their travel distances on a daily basis, and if you take a labour hire company with 100 employees engaged on construction sites across Melbourne or across Sydney, the Sydney metropolitan area, those calculations would become a nightmare for those employers and would then impose a significant administrative burden on the employees.


In paragraph 88 we also deal with the effects of the HIA proposal in regard to when the allowances will not be paid, and in regard to the – sorry, I also refer in paragraph 190 that a similar application was brought by the HIA in 2012 award review, and that was refused by His Honour Watson SDP, and we set out the extracts from that decision.


In regard to the variations sought by the MBA to increase the radial areas from 50 kilometres to 75 kilometres, we deal with that in paragraphs 192 to 198 of our written reply submission, and we refer to a number of surveys and documents that relate to the increased traffic congestion.  Those I refer the Full Bench to the previous exhibit that we used in the cross-examination of Mr Glover from the Austroads document.  We submit on the basis of our written submission that there is no justification for the variation sought by the employers in these proceedings, and that the variations to the fares and travel clause should be dismissed.


VICE PRESIDENT HATCHER:  Thank you.  Mr Crawford, do you want to make a submission?


MR CRAWFORD:  No.  We rely on our written submissions, your Honour.


VICE PRESIDENT HATCHER:  Thank you.  Ms Adler?


MS ADLER:  Just two quick points.  Mr Maxwell referred to our survey responses, and indicated an overwhelming majority don't provide company vehicles to their employees.  That's true on the face of the survey.  I'm not attempting to defer from that position.  What I would say though is that there are businesses out there that provide company vehicles and also providing the daily fares allowance at the same time, to provide this incentive to provide a company vehicle hence why the results may be the way they are.


VICE PRESIDENT HATCHER:  So to be clear, if it's a vehicle which the company uses for work purposes during the day, and an employee is allowed to take it home and bring it to work and is required to bring it to work, under your proposal do they get the fares allowance or not?


MS ADLER:  No.  If it's a company vehicle provided they don't get the fares allowances.


VICE PRESIDENT HATCHER:  So Mr Maxwell then raises the issue that removing that may raise the question of whether the travel to and from work is working time, because you're performing a work requirement.


MS ADLER:  We say that it shouldn't be paid; the travel time shouldn't be paid, and, I guess, you know, we'd have to have that argument at that point if that type of provision was being contemplated.  The Federal Court decision, I guess, it's another one of those instances where this notion of a trade-off forms a part of the argument, and I just don't see how that should be a consideration in these current proceedings in relation to the proposal that we put forward.




MS ADLER:  The only other matter that I raise is the discussion about the payment of the daily fares on the RDO.  It seems like it's basically a bonus payment.  There doesn't seem to be any cogent reason as to why the employee gets paid the fares and travel allowance on an RDO.  The employee isn't going anywhere.  Whether or not you say it's an expense related allowance or some sort of disability allowance related to the travel involved in the industry, neither of those things are being incurred on an RDO.  So we would say that the proposal to change the current provision is a sort of a next step in dealing with what has been basically an additional payment to an employee without much foundation.  That's all I wish to say, your Honour.  Thank you.


VICE PRESIDENT HATCHER:  Before you sit down, one of Mr Maxwell's criticisms the proposal would add complexity and the potential disputes because it would require an individual calculation and there might be arguments about the most direct route as distinct from the fastest route and those sort of things.  What do you want to say about that?


MS ADLER:  There's a dispute resolution provision in the award which could deal with those matters.  Our submission would be that those things could be worked out at the workplace.  Otherwise it becomes a dispute like I imagine, you know, some of these provisions may end up being.  If the provision requires more clarification on that point, then we'd be open to reviewing the wording that we've used.  But the central position is that, from our perspective anyway, and our submission is that the use of the radial areas is outdated.  It's confusing, particularly when you're dealing with more than one radial area.  I know Mr Maxwell didn't take you to any examples of where the radial areas interact or travelling from one to another, and the complexities involved in that, and we see that our proposal to use the employee's usual place of residence, while there are, you know, details around individual employees and calculating that distance, what we have now is much more complex than what would be required under what we propose.


DEPUTY PRESIDENT GOSTENCNIK:  Ms Adler, can I just take you to exhibit 46 again just so that I understand how your proposal works?  Let's assume for a moment the relevant construction worker's usual place of residence is Mt Eliza, which is at the bottom right-hand corner of the – well, the bottom right.




DEPUTY PRESIDENT GOSTENCNIK:  Let's assume that the construction site is at Kinglake, which is almost a straight line north right at the top, Kinglake West.




DEPUTY PRESIDENT GOSTENCNIK:  Okay.  The employee would receive an allowance under your 25.1(a).


MS ADLER:  Sorry, did the employer live in Mt ‑ ‑ ‑






DEPUTY PRESIDENT GOSTENCNIK:  Yes.  They would receive the allowance under 25.1, and that distance is more than 50 kilometres from Mt Eliza to Kinglake.


MS ADLER:  Is more than 50 kilometres?




MS ADLER:  Okay.


DEPUTY PRESIDENT GOSTENCNIK:  They would also receive the distance, subject to the exclusion.  Let's assume this is not their first engagement, they would also receive the 25.3 allowance?




DEPUTY PRESIDENT GOSTENCNIK:  Which is more than what the current award provides.


MS ADLER:  Is it more than what the current award ‑ ‑ ‑


DEPUTY PRESIDENT GOSTENCNIK:  It is more than what the current award provides.


MS ADLER:  Okay.  I'd have to take that on notice to double check it, but if that's the proposition that you're putting then on my feet I couldn't disagree with it.


VICE PRESIDENT HATCHER:  It's based on the notion that within the radial area you could easily have a number of radial distances that are more than 50 kays between two locations within the radial area.


MS ADLER:  Using the employee's usual place of residence?






MS ADLER:  As I said in my original comments, and Mr Maxwell used the same terminology, the swings and round abouts in what we propose, you know, if by simplifying and condensing a whole raft of provisions that deal with travelling to and from radial areas there may be instances where an employee will be better off, and there may be instances where they're not.


DEPUTY PRESIDENT HAMILTON:  Do you have any reason to believe that it swings one way or around about the other way, or does it equal out?


MS ADLER:  I couldn't say definitively.  What I would say though is that our proposal is simpler and easier to understand, and in that way is of benefit to all in that both employees and employers are clear on what they are entitled to and what the obligations are.


DEPUTY PRESIDENT GOSTENCNIK:  Okay.  On that point, just Hamilton DP's earlier questions about kilometres on perhaps not as much in Sydney but certainly in Melbourne, if you take, for example, Mt Eliza and then go across the bay to Point Cook as the crow flies that's probably less than 50 kilometres, but driving distance would be more than 50 kilometres.


MS ADLER:  Again, though, and I think his Honour, the Presiding Member raised it with Mr Maxwell before, doesn't it under both the current provision and our provision still ultimately come down to how you ‑ ‑ ‑


DEPUTY PRESIDENT GOSTENCNIK:  No, because what you do under the current award is you just have a look in that blue shaded area.  If it's within that then they get the allowance irrespective of how far they have to travel.


MS ADLER:  I have to concede that.  Unless there's any other questions, that's all I have to say.






MR SCHMITKE:  I'll be very quick.  I should clarify that when I say arbitrated case I meant to convey to the Commission that it was the Commission was forced to issue a determination with respect to the comma case, but notwithstanding that it hasn't solved the problem, so whilst his Honour Watson SDP did seek to do his best and the parties at the time did their best to try and resolve the issue, it still hasn't resolved it and hence why we make the position and advance the claim that we've done.  Can I just note that it's curious that this particular provision within the award is always the subject of much debate and discussion.  I was having a look at the explanation section in the award manual that we provide to our members.  It's longer than the actual award provision itself, and there's a graphic in there which resembles algebra frankly and it just highlights the complications with respect to this issue and that clause in the award.


I should also note that, and I've just consulted copies of the CFMEU pattern agreement in Sydney, the last three rounds, and they all completely override this provision and it's a much simpler provision, and it's no wonder it's not necessarily in which there's easy answers able to be given to the Commission from the Bar table, because we've very rarely consulted about it in terms of metropolitan matters certainly.




MR SCHMITKE:  I haven't had the benefit of handing these to the union but if I can refer to, I think it's, the most recent one.  The clause is written as such:


Employees are entitled to the payment of the daily fares allowance of this agreement for travel to work each day.  This allowance is payable for travel within the counties of Cumberland, Camden and Northumberland whichever is applicable –


And then it's got a map attached.  Then the next words are:


The parties recognise that there is a need for more flexible travel provisions.  The projects located outside the counties of Cumberland, Northumberland and Camden and radial boundary areas.  In an effort to acquire projects outside of these boundaries and utilise the diverse living locations of company employees, who reside close to a county boundary, the parties agree that employees may be required to travel to projects located outside of the boundaries (as stated above) up to 50 kilometres from their place of residence without incurring the excess travel fares and travelling allowance.


I think that is – I have not had an opportunity but I think that's consistent with that.


DEPUTY PRESIDENT GOSTENCNIK:  What's the value of the allowance under the agreement?


MR SCHMITKE:  I should indicate I don't frequently look at this particular document.


DEPUTY PRESIDENT GOSTENCNIK:  Because I suspect simplicity comes with a cost.


MR SCHMITKE:  I think the suspicion might be right.  I might take that on notice if I could, and ‑ ‑ ‑


DEPUTY PRESIDENT GOSTENCNIK:  It's all right.  I will look it up myself.


MR SCHMITKE:  Can I just also note that the reference that Mr Maxwell gave to, I think it was, travelling times between Camden using the M7 and the M5, I did the same calculations myself this morning.  What that does demonstrate though is that infrastructure does have an impact on the amount of time that it takes to travel in between these particular projects and, of course, I think in the existing award, and I stand to be corrected by my colleagues, when we are talking about the moneys payable to employees in particular situations, as calculated either by reference with a per kilometre rate or time spent travelling, whereas insofar as the triggers for the radial areas, they're very hard and fast, so you've just got the set blunt instruments for when an employee is entitled; when an employee is heading out or travelling between it's per kilometre or paid on the time spent travelling, so I think that's just an interesting distinction if it assists the Commission.  I wouldn't seek to add anything further to that comment but I'm happy for the Commission to have the benefit of looking at the relevant provisions in our award manual if that might assist in understanding the provision, but it will need to be photocopied by your Associate, so ‑ ‑ ‑


MR MAXWELL:  Your Honour, could I just inquire whether that was the award manual created by Mr Richard Calver?


MR SCHMITKE:  It's a copyright Master Builders Australia.


VICE PRESIDENT HATCHER:  Mr Boanza, do you have anything in reply?


MR BOANZA:  Just a reply just briefly to Mr Maxwell's comments about the problem of coverage of employees not working on building sites does not exist.  The majority of these issues are dealt with by employers by conciliation.  Most employers are not going to have a full blown dispute with the union and go to arbitration over a travel allowance for a relatively small number of employees.  So that's what the difficulty in identifying, you know, full blown cases in the Commission, but I do assure Mr Maxwell that the problem does exist and we would like to have it addressed.


VICE PRESIDENT HATCHER:  Thank you.  If that's the end of that issue, we might take the morning tea adjournment, and then we'll move on to the next issue after that.

SHORT ADJOURNMENT                                                                  [11.22 AM]

RESUMED                                                                                             [11.42 AM]


VICE PRESIDENT HATCHER:  What is the next issue?  Who's next?


MS ADLER:  I believe it is TOIL.


VICE PRESIDENT HATCHER:  Is that you Ms Adler?


MS ADLER:  Yes.  We deal with time off in lieu of overtime in our written submission at section 3.  The proposal that we seek is to basically insert the model TOIL term that has been developed by the Commission as part of the Award Flexibility proceedings and I understand that, as part of the materials we provided to the Bench, a copy of that decision has been made available to the Bench.  That is the decision of [2015] FWCFB 4466.  In making this claim and in making this application, we firstly rely on that decision and we secondly rely on the HIA member survey, which does deal with this issue.  Obviously the CFMEU have opposed the claim.


DEPUTY PRESIDENT HAMILTON:  What does the survey say about the issue?


MS ADLER:  We deal with overtime at questions 17 through to 20, which are listed in annexure A to the statement of Kirsten Lewis, which is page 66 of those documents.  So they are the questions and then the results of that are dealt with at pages 19 to 22 of the results of the survey.  I guess there's probably two things I would say about the results of the survey.  There's a number of comments that are made in the survey and obviously there's a mixture of views about time off in lieu of overtime.


We are not suggesting that it is suitable for every business, but what we are suggesting is that there are businesses that would find a provision like this useful.  It is not a mandatory provision what we are proposing or what the Commission has determined to be a model term, it is not mandatory, but it provides an option for businesses and their employees to facilitate these sorts of arrangements.


The survey results also indicate that obviously there is overtime worked in the sector and that there are a number of employees who have requested some sort of arrangement to be dealt with over time that doesn't involve payment as per the award.


We would submit that employees request these sorts of arrangements and some employers would find them of benefit.


DEPUTY PRESIDENT HAMILTON:  Is time off in lieu of overtime conceptually compatible with daily hire employment?


MS ADLER:  Conceptually, if you take daily hire as each individual daily engagement standing alone, then potentially not, but we have weekly hire arrangements under the On-site Award also, so there are people employed on weekly hire arrangements to which this sort of term would apply.  We would say that the fact that the award still contains daily hire shouldn't be a bar on providing the option to other businesses that engage employees on other - - -


DEPUTY PRESIDENT HAMILTON:  Is weekly hire the most common form of employment?


MS ADLER:  For our membership, I would say yes.  I can't speak for others, though.  I guess that's all I have to say about the survey results.


In their reply submissions, the unions obviously refer to the arbitral history and the fact that TOIL, they claim, was dealt with and it was determined that it was inappropriate, probably on the basis of daily hire engagement.  In saying that, though, their reply submissions don't actually outline that history, they just simply refer to it as if everybody knows what it is.


The decision that I handed up, the 2015 Award Flexibility decision, does summarise that to some extent at paragraphs 297 onwards.  My summation of that history would be that the notion of inserting TOIL into both the On-site and the Joinery Award, I should say, hasn't been squarely dealt with or properly decided on by an Industrial Tribunal and even if you can say that a decision of Merriman C in 1999 did consider it, that's over 18 years ago now and, as we have already discussed, we now have weekly hire engagement in the award, which we didn't, generally speaking, in 1999.


The other element of that decision that I would just point out is paragraph 307 of that decision, which, basically, there was no view expressed about the merit of including the TOIL term in the awards, it simply said, "Well, there's some unique history and we think it should be dealt with at the award stage."  So there was no determination made or judgment of how that history should be considered, I guess I would say.


There's just three final comments that I would seek to make about this variation application.  Firstly, as I said, it's a facilitative provision, so it's not mandatory; we are seeking the model term which the Commission in another matter has determined to be appropriate to meet the modern awards objectives and to contain the appropriate safeguards that are considered relevant.


There is a comment made by the unions in their reply submission that we are simply seeking to take advantage of employees by inserting this sort of provision and given that we've got a decision of a Full Bench which addresses most of the modern awards objectives, I find that a hard submission for the union to make.  Notwithstanding that, it's largely irrelevant, given what is in that model term and the safeguards that have been incorporated into that provision and, by all accounts, such a provision simply is providing an option to both employees and employers for more flexibility under the current award.


Finally, I would just say that the information and results of the HIA members survey and the decision of the Full Bench provide ample ground for this Commission to insert TOIL arrangements into both the Joinery Award and the On-site Award.


VICE PRESIDENT HATCHER:  The HIA survey, in terms of responses, indicates that a number of members actually thought it would have highly negative effects.




VICE PRESIDENT HATCHER:  What do you do about that?  For example, one says:


Disruptive and hard to manage with people wanting time off at inappropriate times in busy periods.


I know it has to be by agreement, but the issue of managing requests and having to say "no" and then probably having a dispute about that.


MS ADLER:  Hopefully not a dispute about it, but, I guess, as I said at the outset, I am not saying that it is appropriate for every business, there is a mix of views in the comments that were provided - we are not trying to hide from that and I think it goes to the fact that we weren't trying to influence the outcomes of the survey, we let members say what they wanted to say about things - and it won't work for all businesses, but the point is that the provision is not mandatory, it's an option for some businesses who do desire that additional flexibility and their employees who wish to use that overtime in another way other than being paid for it at the time.


DEPUTY PRESIDENT HAMILTON:  Is there anything about this industry that makes it more difficult to manage than the rest of the economy?


MS ADLER:  Not in our sector, your Honour, I wouldn't say.  You've still got weekly hire engagement.  You've got to record overtime anyway for payment purposes, so it's the same sort of administrative - - -


DEPUTY PRESIDENT HAMILTON:  What I am saying is it is applied across the economy and supported, it appears, mostly by employers across the economy.  Is there anything about this sector that makes an exception to that other than that they are not used to it?


MS ADLER:  My submission would be that there is not and that these awards shouldn't be treated any differently from others.


VICE PRESIDENT HATCHER:  They are quite strong, the answers, some of them.


MS ADLER:  They are, yes, but equally I think there are strong comments to say that it would be of benefit and the fact that there is a percentage of those who do work overtime of the employees that are requesting these sorts of arrangements also goes to the notion that there's benefit to both parties by having a facilitative provision like this in the award.


DEPUTY PRESIDENT HAMILTON:  You are supporting TOIL notwithstanding some of these comments.  Why is that?  Is it a majority view to support it or is it a minority view?


MS ADLER:  As an association representing the industry in totality, we see that a provision like that would create more flexible outcomes and would help better meet the modern awards objectives and so, in that way, we support such a proposal being inserted into the award.  Notwithstanding that not all of the respondents feel equally the same, our submission is that having it in the award is of no detriment.


That's all the submissions I wish to make.




MS ADLER:  Thank you, your Honour.




MR SCHMITKE:  Thank you, your Honour.  I would simply note Ms Adler's submissions and support them.  We adopt the same view insofar as the insertion of this clause.  It is a clause which is optional.  We do not see that there is any barrier to the insertion of the provision in such a way that would disturb the other provisions of the instrument.  There are enterprise agreements, I recall - I don't have one - which have like provisions.  I recall - I am just trying to find it - there is a section within the existing award for particular categories of employees that has a TOIL provision.


As Ms Adler has indicated, it is by agreement, it is a facilitative provision.  There is nothing that would deny or should deny workers in this sector, almost one million, having access to this if they so desire, and it can be done in such a way as to suit the particular arrangements between the worker and the business, accommodate whatever industry or non-industry issues might exist and the employer can utilise it in such a way as to not disturb normal work patterns.


There are sometimes situations where it is inconvenient for a group of workers potentially to leave a construction site, given that there's all sorts of other processes going on, but that is capable of being accommodated.  It shouldn't necessarily be a reason to deny it to those who could leave and take advantage of this flexible provision.  To that end, we seek that it be inserted.


VICE PRESIDENT HATCHER:  Any other employer group got anything additional to say?


MS PAUL:  No, your Honour.




MR MAXWELL:  In regard to the TOIL issue, that's dealt with in our reply submission starting in paragraph 73 found on page 23 through to paragraph 115 on page 39.


Your Honour and Commissioners, we are opposed to the insertion of a TOIL provision.  We did make detailed submissions before the Award Flexibility Full Bench and in regard to the Award Flexibility decision referred to by Ms Adler, the Building and Construction General On-site Award and the Joinery Building Trades Award 2010 were dealt with in paragraphs 296 through to paragraph 307.  Essentially, in that decision, the Full Bench decided, in paragraph 307, that:


Given the unusual arbitral history and the particular features of the industry covered by the two construction awards (including the operation of daily hire) we think the most expeditious course is to deal with any application to insert a TOIL provision in these awards during the award stage rather than in the settlement of any orders which may arise from our further consideration of the provisional model term.


VICE PRESIDENT HATCHER:  Ms Adler has clarified that it is intended only for weekly employees.


MR MAXWELL:  I didn't take that to be Ms Adler's variation that they seek.


VICE PRESIDENT HATCHER:  Let's assume it is confined to weekly employees.  What is the detriment to employees from adopting the model term?


MR MAXWELL:  In regard to weekly hire employees, we say it would still meet the problems with the nuances of the industry in that we are talking about work that is generally project based.  Our other concern is that this application is being driven by the employers, not by any workers or unions, and when you look at the responses to the HIA survey, and I would like to briefly deal with the HIA survey because I have not responded yet to Ms Adler's reply to our submissions about the survey, but I would wish to come back to that, but if you look at the responses - - -


VICE PRESIDENT HATCHER:  We have read them.


MR MAXWELL:  Yes, but the responses outlined in paragraph 109 from those employers that are opposed to it, and also the reasons why some of them think it would be good and it's mainly so that they don't have to pay overtime rates.


DEPUTY PRESIDENT HAMILTON:  Have you seen the question they asked?  Would that not suggest some alarm amongst some people who didn't understand the award?  It says:


What would be the effect on your business if your employees could accrue overtime worked towards leave taken at another time?


That seems to suggest some sort of right as a possibility, so could the negative comments be a response to the phrasing of the question, as it is in many of these surveys?


MR MAXWELL:  Well, yes, and we have taken issue with the survey, but I want to address this issue of weekly hire.  It has been suggested by Ms Adler that the majority of their members employ people on a weekly hire basis.  There is no evidence provided by the HIA as to how their members do their employment arrangements.  If you look at the survey, the survey says that only 56 per cent of the employees are full time.  It also says that 91 per cent of the businesses engage contractors.  It is our belief, but we don't have the evidence to support it, but it's our belief that the majority of the employees that are covered by this survey that are covered by the Building and Construction General On-site Award, the only employees that are engaged on weekly hire are apprentices.


MS ADLER:  Your Honour, I don't know how Mr Maxwell can make that assertion.  There is nothing in the survey that indicates that and it is just simply - there's no basis for that sort of comment.


VICE PRESIDENT HATCHER:  It is one assertion in response to another, isn't it?


MS ADLER:  Well, we have got data and responses.


VICE PRESIDENT HATCHER:  Was there evidence from your members about the percentage who are on weekly hire?


MS ADLER:  No, there wasn't.


VICE PRESIDENT HATCHER:  Mr Maxwell, can you come back to my question:  assuming the clause is confined to weekly hire, what is the detriment to employees?


MR MAXWELL:  The detriment, we say, to employees is that if they are working overtime, the time that is then taken off under the model term - - -


VICE PRESIDENT HATCHER:  Only if they agree in writing.


MR MAXWELL:  Only if they agree and, unfortunately, in un-unionised workplaces, we do have a concern about the extent to which those agreements may be made.  I take it no further than that.


DEPUTY PRESIDENT HAMILTON:  Why shouldn't employees in this sector be able to request time off in lieu of overtime as they do across the economy?


MR MAXWELL:  We know that under the various awards, there are two different versions of the time off in lieu of overtime provisions.  There's those where the time off in lieu is provided on an hour for hour basis.


DEPUTY PRESIDENT HAMILTON:  Hour by hour or penalty rates, yes.


MR MAXWELL:  And those where it's provided on penalty rates.


DEPUTY PRESIDENT HAMILTON:  Ordinary rates or penalty rates, yes.


MR MAXWELL:  We say that where it's provided on an hour for hour basis, there is a detriment to the employees.




MR MAXWELL:  Because they've worked the time for which they would normally be entitled to be paid penalty rates, so there is clearly a saving to the employer because if they're not paying the employee overtime rates and then allowing them to take time off when they would normally pay ordinary time rates, then there's clearly a financial benefit to the employer for that arrangement.


DEPUTY PRESIDENT GOSTENCNIK:  Save that they're paying an employee who is not being productive to take time off.


MR MAXWELL:  Sorry, your Honour?


DEPUTY PRESIDENT GOSTENCNIK:  Save that the employer is still paying an employee on the day that they have in lieu for performing no work, so they have paid them for ordinary time in circumstances - if they received an overtime benefit, there's a financial benefit for them, but when the employee takes time off, they are paying them for doing no work.


MR MAXWELL:  But under their normal contract of employment, the employer would still be required to pay them for those hours if it's during ordinary hours.


DEPUTY PRESIDENT GOSTENCNIK:  But we are not talking about a stand down, we are talking about an arrangement whereby an employee is substituting the right to be paid an overtime rate for an accrual of some additional leave down the track.


MR MAXWELL:  We still say under those arrangements there is a detriment to the employee and there is a saving for the employer.


VICE PRESIDENT HATCHER:  But that depends upon how the employee values the day off.  That is, if it's by agreement, the employee might assign much greater value to having a particular day off for some personal or domestic reason over getting an overtime payment.


MR MAXWELL:  Yes, they may, but - - -


VICE PRESIDENT HATCHER:  And if they don't value it as the same or more, they won't agree to it, presumably.


MR MAXWELL:  Our concern is that these arrangements will be entered into not at the initiative of the employee.


DEPUTY PRESIDENT HAMILTON:  Why do you say that?


MR MAXWELL:  Because - - -


DEPUTY PRESIDENT HAMILTON:  I know you suspect it, but why do you say it?


MR MAXWELL:  Our members have not expressed a desire for time off in lieu of overtime.


DEPUTY PRESIDENT HAMILTON:  Well then they won't apply for it.


MR MAXWELL:  It is not an issue that has come up amongst our members.  If they want to take a day off, they will use annual leave or they will use accrued RDOs.


Your Honours, in our submissions, we also refer to the decision of Merriman C in the authentication in 2000 when he rejected the inclusion of the time off in lieu of overtime provision and we also make the point that in regard to the Award Flexibility case, the main deponent in those proceedings were the AiG.  The AiG provided extensive evidence and that led to the decision of the Full Bench.  In those proceedings, the MBA and HIA provided no evidence during the Award Flexibility decision and they relied on the evidence of the ABI.


In these proceedings, because that matter wasn't dealt with in the Award Flexibility case, the HIA and MBA have provided very limited evidence.  The main evidence of the HIA is their survey and - sorry, just bear with me for a second.  We refer to the HIA survey in paragraphs 92 through to 100, but we wish to make the point in regard to the survey that the survey was sent to over 23,800 HIA members.  There was only 290 that responded.  That is 1.2 per cent of their members responded to the survey.


The employees of 36 of those 290 were covered by awards other than the Building and Construction General On-site Award and the Joinery and Building Trades Award 2010.  39 respondents only identified the Joinery and Building Trades Award as the relevant award applying to their employees and it is not clear which awards covered another 37 of the respondents as they indicated that either more than one award applied or no award applied.


The HIA has raised the issue that we raised about the introductory paragraphs being incorrect as to what covered the proper entitlements of employees, but we also identified that when you look at the survey, it didn't identify how many employees they actually employed under those awards, which we would have thought would have been a pertinent question.  What classifications were covered by the employees under those awards?  I stand corrected in  paragraph 96 of our submission.  At subparagraph 3, we say that the survey didn't identify how many were full time, part time or casual.  We withdraw that.  That clearly is the case, but they didn't do so in regards to each of the awards that covered the employees.


In note 7, we deal with responses from a number of the companies that are contradictory and we point out that if you look at company 80178, a company with a hundred plus employees that is supposedly covered by the Construction Award, they refer to "contractors" in response to question 16 and in response to the question on payment of wages states:


Senior technical and management staff get paid monthly.  Admin, accounts, clerical staff get paid fortnightly.  This is done based on their general ability to manage money.


There is no reference to any employees covered by the Construction Award such as trades persons or labourers and no reference to the production staff that may be covered by the Joinery and Building Trades Award.  So we say, on that basis, they say they are covered by the Construction Award, but they don't pay anyone in accordance with the requirements of the Construction Award payment of wages, which is weekly payments.


Company 80389 say they are builders with six to 15 employees covered by more than one of the awards, but again in response to the question of the payment of wages question, they state:


One less processing cycle.  They are not hired under the On-site Award as they are office staff.


I won't go to the other examples we give.


VICE PRESIDENT HATCHER:  I understand these criticisms of the survey, but insofar as it connects with the TOIL issue, what's the criticism?  I think there's only a few questions, one, whether people work overtime and to what extent and the answers don't appear to be surprising and, two, there's some qualitative reactions to the concept of TOIL.


MR MAXWELL:  In regard to the survey, when you actually delve into the actual detail, and this is dealt with in paragraph 99 of our submission, of those employers who say they are covered by the Building and Construction Award and the Joinery Award, out of the 290, there was only 142 who say they actually work overtime and, of those 142, there was only 62 that say they had had a request from an employee, but there is no indication of what award covered them, so those 62 may have been within the 39 that are covered by these awards, but, significantly, 43 of the respondents whose employees work overtime, they didn't actually comment about TOIL.  So, generally, there is no support from the actual employers that were covered by the HIA survey.


DEPUTY PRESIDENT HAMILTON:  Is it surprising when you look at the question?  The question seems to suggest it's another RDO system being imposed on them, or that's one possible interpretation of the question, which obviously they would have some concern about.


MR MAXWELL:  Yes, in regard to the overall content of the survey, that's why we say the survey should be given little weight, and I suppose there is a question of the extent to which the HIA is representing its members in regard to the extent to which the application they seek is at odds with the responses of their members in the survey.


VICE PRESIDENT HATCHER:  Have the CFMEU surveyed its members about this issue?


MR MAXWELL:  Not this particular issue, no.  Your Honour, there is one other point I just briefly wish to make and that is in regard to - in her opening submissions before she dealt with the allowances - sorry, the redundancy issue, Ms Adler referred to the research report that was prepared for the Australian Industrial Relations Commission, the research report 6/2013, and she made the claim that on the basis of paragraph 17, 19 per cent of the employers in the industry were award-reliant.


We wish to point out that if you look at page 11 of that research report, in discerning whether a company was award-reliant, it was on the basis whether one employee with the employer was paid in accordance with the award.  So, it wasn't that all employees are award-reliant, it was that maybe one employee of the company - - -


VICE PRESIDENT HATCHER:  So it could be the new entrant?


MR MAXWELL:  Yes.  The other point we would make is - - -


VICE PRESIDENT HATCHER:  But the definition was also based on the notion that they paid the minimum rates in the award.




VICE PRESIDENT HATCHER:  There would presumably be a much greater group who would pay some other conditions derived from the award.


MR MAXWELL:  Yes.  The point we wish to make is in that survey, I think there was 576 construction companies that were part of that survey, and that's found in appendix E, page 128, but there is also included in the survey an ABSEEH survey that is referred to on page 91 of that research report, and according to that survey, there's 12 per cent of employers in the construction industry pay their employees the award rate.  We submit it is not as high as 90 per cent.  We accept there are clearly employees that are - - -


VICE PRESIDENT HATCHER:  What has this got to do with TOIL?


MR MAXWELL:  No, sorry, your Honour, I was responding to the HIA's opening submissions where they dealt with the survey but also the additional material.  I am dealing with that now rather than later.


In regard to TOIL, we say there is no probative evidence, there has been no evidence in these proceedings from the employers, apart from the HIA survey, which we say is of little weight, and we say on that basis that the variation should not be made.


VICE PRESIDENT HATCHER:  Where there is a model clause, it might be submitted that the onus is on a party to demonstrate why an award should not include what has been developed as a model clause.


MR MAXWELL:  Yes, I understand that.  We are opposed to the model clause.  If the Full Bench, I suppose, is mindful of adopting the model clause, we say that the model clause should be varied so that the overtime or the compensation for the overtime worked should be on equivalent - - -


VICE PRESIDENT HATCHER:  That issue was considered by the Full Bench in developing that clause, wasn't it, or not?


MR MAXWELL:  It was and they retained it where those provisions existed in TOIL provisions that were included in awards.


DEPUTY PRESIDENT HAMILTON:  And they don't exist in this award.


MR MAXWELL:  They don't exist in this award, no.


VICE PRESIDENT HATCHER:  Thank you.  Mr Crawford?


MR CRAWFORD:  Just one brief point, your Honour.  If I can turn to page 97 of the HIA survey, I just note that 66 per cent of the respondents indicated that their response regarding TOIL arrangements wouldn't change if the TOIL was taken at the overtime rate, so that indicates that that would not be a major issue for the employers that were surveyed.


The AWU's position is fundamentally we are opposed to the inclusion of the TOIL term, but if the Commission is minded to insert TOIL terms, because there are model terms going in most awards, and that could be the only possible basis really that a TOIL term is inserted in this case, our strong view is that the TOIL should be taken at overtime rates.


VICE PRESIDENT HATCHER:  Thank you.  Anything in reply?


MS ADLER:  Just one quick comment that I just feel I am compelled to make for the record.  We would oppose any suggestion made by the union that there is some sort of underhanded mischief going on on non-unionised construction sites in relation to TOIL or any other sorts of individual arrangements.  Thank you, your Honour.


MR SCHMITKE:  Your Honour, the only comment I would seek to make is just in relation to our membership - it was canvassed obviously by the HIA and CFMEU - but just so it is clear to the Commission, Master Builders Australia has 33,000 companies within our membership, including civil, residential and commercial construction.  Mr Maxwell talked about the project-based nature of the sector.


VICE PRESIDENT HATCHER:  Mr Schmitke, is this based on any evidence?




VICE PRESIDENT HATCHER:  Are you basing this on any evidence?


MR SCHMITKE:  In terms of our membership?




MR SCHMITKE:  I can provide information if you like.


VICE PRESIDENT HATCHER:  No, no, we are in closing submissions.  I think at some point we have got to say that this is not an opportunity to start making factual assertions from the Bar table.


MR SCHMITKE:  Where I was going is the project-based nature of this sector, which is something that Mr Maxwell has raised.  My understanding is the TOIL provision requires employees to take time off within 12 weeks of its accrual and it's not common for projects to cease in that period of time in terms of - - -


VICE PRESIDENT HATCHER:  I think it is within 12 weeks, or something to that effect, in the model.


MR SCHMITKE:  Yes, that's right.  The sector is more than capable of accommodating.


VICE PRESIDENT HATCHER:  Thank you.  Next is junior rates.  That is you, Mr Boanza.


MR BOANZA:  Yes, thank you, your Honour.  CCF has made an application for the insertion of junior rates into the Building and Construction Award.  We have provided the Commission and the parties with our submission in relation to the work value issue.


VICE PRESIDENT HATCHER:  Just hold on while I find that.  Yes?


MR BOANZA:  Thank you.  For the reasons presented in that submission, we do not believe that a work value case is necessary for the Commission to insert junior rates in the award.


VICE PRESIDENT HATCHER:  Why do you say that?


MR BOANZA:  Based on our advice, your Honour, the case presented by CCF in these proceedings has not been based on work value reasons, it is prescribed by section 173, as the expression is defined in section 157(4), the Full Bench has not been asked by the CCF to vary existing minimum rates in the award.  We say that junior rates do not relate to particular kinds of work.  That is the advice that we have received.


VICE PRESIDENT HATCHER:  You are talking about us setting lower rates for somebody who would currently be required to be paid adult rates.  Is that right?


MR BOANZA:  We say, your Honour, that would be based on their age, not on the value of their work as such.


VICE PRESIDENT HATCHER:  I understand that, but what you are doing is to change the award so that somebody who is currently entitled to adult rates will be entitled to a lower rate as a junior rate; is that right?


MR BOANZA:  Yes, that's right.


VICE PRESIDENT HATCHER:  So we are changing the minimum rate?


MR BOANZA:  In introducing junior rates, in our submission, the minimum rate would remain as it is now, which is CW1(a).




MR BOANZA:  In our submission, the minimum rate, which is CW1(a), would remain and there would be junior rates inserted for junior employees based on their age.


VICE PRESIDENT HATCHER:  You are providing a lower rate of pay for people in the age category than it currently is; is that right?


MR BOANZA:  That is right, your Honour.


VICE PRESIDENT HATCHER:  How do we get around 157(3) then?


MR BOANZA:  If we go to 9, the advice that we've got, your Honour, is that in the National Retail Association v Fair Work Commission [2014], the Full Federal Court was dealing with a question relating to the variation by the Commission of junior rates in the General Retail Award 2010 and at 64, the Federal Court said:


There is no basis for any suggestion that the object of establishing and maintaining "a safety net of fair minimum wages" is not a necessary element -


Sorry, I withdraw that, that is not the correct clause.


DEPUTY PRESIDENT HAMILTON:  Do you have work value reasons for inserting junior rates into this award?


MR BOANZA:  No, we don't, your Honour.


VICE PRESIDENT HATCHER:  Mr Boanza, I don't know what advice you have received.  You can show it to us if you wanted to, if it's in writing, so I can understand the reasoning.


MR BOANZA:  Your Honour, I submitted it to all the parties last night and I was of the understanding that it might have been received.


VICE PRESIDENT HATCHER:  I have got the submission.  That is what you are talking about?


MR BOANZA:  That is what I'm talking about, yes, your Honour.


DEPUTY PRESIDENT HAMILTON:  He is referring to the "advice".  You said you got legal advice that there is no barrier to this.




DEPUTY PRESIDENT HAMILTON:  Do you want to show us that legal advice?


MR BOANZA:  It is in that submission, your Honour.


VICE PRESIDENT HATCHER:  That is what he's talking about.


MR MAXWELL:  Sorry, your Honour, I don't think I've seen this document.


MR BOANZA:  I have a copy of it.


VICE PRESIDENT HATCHER:  It was sent by email at 6.48 on Monday, 10 April.


DEPUTY PRESIDENT HAMILTON:  It doesn't appear to have been sent to the CFMEU.


VICE PRESIDENT HATCHER:  So your union colleagues got it, but this doesn't appear to have been sent to the CFMEU.


DEPUTY PRESIDENT GOSTENCNIK:  If Mr Nguyen were here, he could share it with you.


VICE PRESIDENT HATCHER:  Mr Crawford has it.


MR CRAWFORD:  Yes, I've got it.  You didn't seem to send it to the CFMEU.


MR BOANZA:  My apologies for that.  I've got a spare copy to hand to Mr Maxwell.


MR MAXWELL:  Thank you.




MR BOANZA:  That's it, your Honour.




MR BOANZA:  In relation to the work value case, it is.




MR BOANZA:  No, just in relation to the work value case.


VICE PRESIDENT HATCHER:  Is there anything else?


MR BOANZA:  Yes, I would like to make some remarks about the merits of the claim and the reasons why we are making the claim.  Your Honours and Commissioners, the evidence that we have provided to both junior rates and indeed redundancy is substantive but not based on historical studies.  The studies, by their very nature, look backwards to the future needs of the industry and it is from sources who have the credibility to comment on this.


We are not attempting to befuddle the Commission on the issues with anything but a fundamental truism based on a fundamental principle.  The principle is that employers need employees and employees need their employers.  They are not enemies.  The truism is that employers know their industry and they are always looking for ways to improve it.


The CFMEU, however, paints all employers as though they are constantly seeking to promote their industry by doing harm to employees or to profiteer from them.  This is simply not the case and we hope that the Commission sees through this.  Rather, the award is designed to provide, amongst other things, a safety net that reflects society's needs, but it is not a policeman.  For that purpose, other bodies exist.  The award objectives are, in fact, designed to see through this and it is in this that we see the need for our award now to change specifically with the addition of junior rates to improve workplace participation.


I hope now to explain how our evidence informs the Commission in its decision-making and it will then be up to the Commission and to no other party to decide the weight of the evidence.


As an industry body, CCF is highly engaged with and connected to employers in the industry.  The evidence that we have provided is drawn from the input of a multitude of engagements over many years with these employers and the message in recent years on junior rates is getting stronger.  These employers include publicly listed and international-based entities through to small, privately-owned family businesses.  They include regional and metropolitan businesses and they include businesses from across all of Australia.  As we have shown in our submission, the message that they offer on junior rates is the same:  they want junior rates to employ juniors and not having junior rates in our award is inhibiting this.


On 3 April and again yesterday, the Australian Workers' Union argued that the industry is doing very well.  We contend this is the problem with looking backwards, that the statistics can be used to serve one's dogma.  Few industry from Western Australia, South Australia, Queensland, Northern Territory or Tasmania would say that their industry is doing very well right now.  In Victoria, the industry is only just recovering after a number of contract decisions by the State Government.  In New South Wales, (indistinct) volume of work due to massive over supply of companies vying for work at margins that are at record levels, at record low levels.


VICE PRESIDENT HATCHER:  Whose evidence is this based on?


MR BOANZA:  Sorry?


VICE PRESIDENT HATCHER:  What evidence is this based on?


MR BOANZA:  Only our survey.  I will come on to that.


VICE PRESIDENT HATCHER:  What survey was that?  Where do we find that?


MR BOANZA:  The results of that survey were in our submission of 9 December and they start on page 27 through to 36.  That is the question that was asked.


VICE PRESIDENT HATCHER:  So the submission of 9 December?


MR BOANZA:  Yes, Commissioner.




MR BOANZA:  Page 27.  It really starts on page 26, "The View of Industry".  What we are portraying here is the view of the industry.  We say that our members - - -


VICE PRESIDENT HATCHER:  What I was asking you about, you were making a series of factual statements about the state of the construction industry in various States.




VICE PRESIDENT HATCHER:  What is that based on?


MR BOANZA:  That is based on the feedback that we have from our members, your Honour.




MR BOANZA:  No, and from our engagement with them.


VICE PRESIDENT HATCHER:  Is it based on any evidence that has been adduced before the Commission?


MR BOANZA:  No, it's not.


VICE PRESIDENT HATCHER:  As I said to Mr Schmitke, and it probably applies to everybody, these are closing submissions which are meant to be based on the evidence that has been adduced before us, so can parties stop making factual assertions, unless it is in response to a question, that are not based on evidence that is before us.  All right?


MR BOANZA:  Yes, your Honour, thank you.  Our members would like to see junior rates to enable them to give opportunities to younger staff who are not yet trainees or apprentices but who usually require more training.  They feel this would give opportunities to younger people to gain experience in the industry when they are not yet ready or able to begin work as a trainee.  We know this because the industry knows this and we feel obliged to pass this to the Commission.


We accept that our evidence presents what employers are thinking and feeling.  That is the point of it.  We submit that for the Commission to ensure the modern award objectives are met, it needs to hear this.  We have presented, on page 27 of our submissions of 9 December, the results of a survey.  This, like our redundancy survey, is very simple.  It reflected what we were hearing in the industry and we wanted to make sure our view was correct.  We already knew the essence of the issue, having engagement with our members, but we wanted to give you a high volume of responses with company names included.  That is why it is set out like this in our answer and we got that.


That volume is now in two parts:  firstly, 317 employers, over 16 per cent of those who received it, and it is, your Honour, a very high response to any survey, responded.  16 per cent of the industry agreed that the elimination and lack of junior rates has had a profound effect on youth employment and training in the industry because it discourages employment of young people and school leavers.


DEPUTY PRESIDENT GOSTENCNIK:  Is this referring to the survey that is not in evidence?


MR BOANZA:  The survey is in evidence, your Honour, it was submitted at the request of the CFMEU.


DEPUTY PRESIDENT HAMILTON:  Even if all this is true, and the points you make are by no means insubstantial, there is still the legal problem.  It all rests on your assumption that we have the power to do this and I have to say I am not sure that is the case.


MR BOANZA:  I guess my view on that would be, your Honour, we say that the Commission does have the power to insert the junior rates.  Whether that is going to require a work value case or not is a separate matter.




MR BOANZA:  I was just going to say, your Honour, that you are quite right, we think the Commission has got the right to insert junior rates and has got the power to do so.  The question is whether that is going to require a work value case or not.  In the case that a work value case was required, then that will be the requirement.


VICE PRESIDENT HATCHER:  That sort of case can be run as a work value case to say that, hypothetically, an inexperienced junior employee performs work of a lesser value than an experienced adult employee.  You could have run that case but you haven't done that.


MR BOANZA:  Yes, and I address that in our submission, your Honour, but going back to the evidence that we presented, though, we also took affidavits from a number of employers from across Australia and offered them as witnesses.  That evidence fully reflects the survey result and it provides more details.  The issue that the survey was not an aberration of CCF's construct could have been explored via cross-examination, but the CFMEU chose not to cross-examine those witnesses, as they did on redundancy.


VICE PRESIDENT HATCHER:  What were their names again?


MR BOANZA:  Our witnesses, your Honour, were Mr David O'Connor from Diona, Mr Middleton, who we have already referred to, Mr Hovey and Mr Peter Middleton, which I've already referred to, plus Mr David Castledine.  So there was a total of four witnesses.


MR MAXWELL:  Your Honour, I am not sure that Mr Middleton dealt with junior wage rates.


VICE PRESIDENT HATCHER:  Mr Hovey, he doesn't deal with it either, does he?


MR MAXWELL:  I think there are two statements from Mr Hovey and one of them does very briefly.


VICE PRESIDENT HATCHER:  Yes, I see, thank you.


MR BOANZA:  What we say, your Honour, is that the CFMEU chose not to cross-examine those witnesses.  In redundancy, with Mr Middleton, who was misquoted yesterday in closing remarks, but even that is not all that we have done.  The evidence of Mr Castledine, a long-serving CCF branch CEO of the biggest estate in Australia, ex apprentice, a qualified engineer with a law degree, has given sworn evidence that these survey results reflect the commonly held views that he has heard from employers that junior rates are needed and because they hinder the employment of juniors.  He has given evidence of this view and, yes, it is opinion, but it is forged following thousands of engagements with employers over his employment period and from regular communications with other branch CEOs that echo this view.  There again, the CFMEU had the chance to cross-examine Mr Castledine but elected not to do so.


The CFMEU has implied that our witnesses are effectively lying about the state of the industry, that they are self-servingly misrepresenting their needs at the expense of the young.  The CFMEU - - -


MR MAXWELL:  Your Honour, I must object to the assertion that we say the CCF witnesses are lying.  We have objected on the basis of hearsay.


VICE PRESIDENT HATCHER:  So what is that about?


MR BOANZA:  It is based on the witnesses' statements and the CFMEU's response.  The implication is that our witnesses and the industry in general are misrepresenting their position in relation to junior rates in order to exploit.


VICE PRESIDENT HATCHER:  Don't worry about implications.  You just respond to what actually has been said.  In paragraph 10 of Mr Castledine's statement, exhibit 23, he talks about the - sorry, I have just lost it now - yes, the re-establishment of junior rates.  What is that referring to?


MR BOANZA:  There were some limited junior rates in the National Building Award.  We acknowledge they were limited.


VICE PRESIDENT HATCHER:  What did they apply to?


MR BOANZA:  They applied to, I think, roof tilers and some other limited circumstances, but we acknowledge that, we acknowledge that part of the union's submission that they were not as widely spread as we thought, they were applied to a couple or to some Western Australian occupations.


DEPUTY PRESIDENT HAMILTON:  So, in most cases, junior rates did not apply in these building awards - in most cases?


MR BOANZA:  It did apply to the National Building Award but not universally to all occupations in that award, and that has been the union's submission and we acknowledge that, but we still maintain that we would like junior rates to be inserted regardless.


In contrast with the volume and quality and consistency of the evidence that we have provided, the CFMEU has provided the opinion of two witnesses, Mr O'Hearn and Mr Cameron.  Mr O'Hearn states in paragraph 7 of his statement:


It is very rare to non-existent that the industry seeks to hire 15 to 16 year olds.


We do not disagree and submit that it is the lack of junior rates that has contributed to this situation and there is no incentive for employers to hire junior workers and, indeed, there is a disincentive, which I will come to shortly.


Mr O'Hearn then states in paragraph 21:


I regularly see young employees paid as apprentices when not signed up and not receiving training as just an attempt to pay low wages.  I have spent a substantial part of my work preparing, settling and negotiating wage underpayments based on young employees being incorrectly paid as apprentices when they are not signed up as apprentices.


This statement appears to be contradictory because the statement in paragraph 7 is that it is very rare to non-existent that the industry seeks to hire 15 and 16 year olds.  Moreover, no evidence has been produced of a single exploitation prosecution against an employer in the industry, nor has any evidence been adduced that the introduction of junior rates will lead to the exploitation of young workers.  Mr O'Hearn's evidence appears dogma.  At best, it is conflicting and unsubstantiated opinion and, as such, it should be given little weight.


DEPUTY PRESIDENT HAMILTON:  If you engage a 16 year old with no prior experience on a building site, what would they actually do?


MR BOANZA:  I am not sure, your Honour.  We would imagine they are engaged as junior employees doing some sort of work experience or practical work and they would be paid at CW1(a) at the moment.


DEPUTY PRESIDENT HAMILTON:  Would they need to be supervised?


MR BOANZA:  Absolutely, your Honour, they will have to get a White Card, and then, as we would say in our submission - - -


DEPUTY PRESIDENT HAMILTON:  Sorry, I mean closely supervised, unlike a general builder's labourer.


MR BOANZA:  That's right, or even another employee with a bit more maturity and a bit more experience.  Building sites are very dangerous.


VICE PRESIDENT HATCHER:  This might be a person without a ticket to operate any piece of equipment?




VICE PRESIDENT HATCHER:  So I am just trying to imagine what they would actually do.


MR BOANZA:  They will have to be basic labouring jobs, I would imagine, your Honour, but I couldn't tell you.  It's not our submission.


VICE PRESIDENT HATCHER:  Well, you are trying to persuade us and I'm just trying to get a picture of what, if this was allowed, these people would actually be doing.


MR BOANZA:  We would say they would start off by being mentored and shown around the worksite and they would be shown as to what the different jobs that are performed at the worksite are and then they would be given, under supervision, the opportunity to do some of these jobs.




MR BOANZA:  In our case, it would be labouring jobs, machine operations, pipeline.  With civil construction there is a lot of subdivisional work being constructed, so that would be what our members would be interested in.


VICE PRESIDENT HATCHER:  The machine work, what is that?


MR BOANZA:  Operating plant, your Honour, excavators, rollers, you know, licensed - - -


VICE PRESIDENT HATCHER:  Can they do that without a ticket?


MR BOANZA:  No, they can't.


VICE PRESIDENT HATCHER:  You are not seriously saying you are going to have a 16 year old operating an excavator, are you?


MR BOANZA:  Our advice is that they can, there's nothing to stop an employer from training an employee, however young they might be.


VICE PRESIDENT HATCHER:  But you are talking about having a 16 year old, who presumably somehow got a ticket, operating an excavator and getting paid junior rates?


MR BOANZA:  No, we are not looking at that at all.  We just want the 16 year olds to have an opportunity to go into a building site for a period of time and obviously they will be doing basic labouring work to start with, they would not be trusted with a 40 tonne excavator, but they will be shown the different jobs around the sites, they will be doing some basic manual work and supporting work, not dissimilar to what's in the job description of a CW1(a) in the award, which is an entrant for the first three months in the industry, and they would be paid, yes, junior rates while they are doing that because, at the moment, despite the limitations of what they can do and the amount of supervision needed, they do not have junior rates.


DEPUTY PRESIDENT HAMILTON:  Are there any basic jobs on your sites which just involve lifting and that sort of thing which doesn't involve equipment and doesn't cause a danger to them?


MR BOANZA:  There is, there's - - -




MR BOANZA:  There are, there are other - - -




MR BOANZA:  Well, with pipeline, for example, your Honour, there are labourers required to, you know, be around and make sure that things are lined up and do basic digging - manual work.


VICE PRESIDENT HATCHER:  You said the CW1 classification already effectively gives a discount for inexperience, that is, you have a rate on commencement, then you have a three-month-rate, then you have a 12-month rate and then you get the full rate when you complete various requirements.  There is already in the structure a recognition of inexperience attracting a lower rate, so why would there be then a further discount for the fact that you are 16 or 17?


MR BOANZA:  That rate, the CW1(a), as we said in our submissions, adds up to nearly $20 an hour.  That is far in excess of the junior rates in any other award.


VICE PRESIDENT HATCHER:  Even assume there is no problem with power, how could we assess a junior rate without having a proper work value case to satisfy us that a junior CW1(a) performs work of a lesser value than an adult CW1(a)?


MR BOANZA:  Your Honour, there are junior rates in other awards and we would say that is the same process that was used in other awards and if that requires a work value case, you know, that's what it will require.  Our advice is that it should not be required, and we have provided that advice, but if the Commission makes that decision - - -


VICE PRESIDENT HATCHER:  I am not talking about power now, I am talking about the merits of the case.




VICE PRESIDENT HATCHER:  Why would we assume that a junior beginner performs work of a less value than an adult beginner for whom there is already a discounted rate?


MR BOANZA:  Because those junior employees, our members tell us, require a lot more supervision than would an adult employee.  They don't employ, you know, very young people because of that reason.  Given the value of the CW1 rate, they prefer to employ a 25 year old to a 16 year old any time of the week because of the maturity and the amount of supervision that a much younger employee requires.


So the reality is there is no evidence has been produced to show that exploitation of young workers is more prevalent in any of the other modern awards that contain junior rates than it is in awards that do not contain junior rates, such as the Building and Construction Award.


The CFMEU has said that we have been biased by presenting the survey and our witnesses and imply that we are somehow failing the Commission by doing so.  Saying such things does not make it so.  Indeed, it is an insult to the whole industry.  The reality is that we are presenting the nail, we are presenting solutions recommended by employers.  It is not an earth-shattering situation to say that young people in their expectations have changed over the last 25 years or over the last 10 years.  We have employers who are all reporting that it is hard to get young people to join the industry and, when they do join, they often do not have the familiarity with the physical workplace.


It is a fact that our industry is high risk, it is a fact that it is a high risk physical industry and people can be very badly hurt very quickly.  What employers know, and we are trying to tell the Commission through our submission, is that in our industry, very young people are more costly to supervise than older adults.  Employers want to hire young people - they were young themselves once and were given a start in the industry - but the reality is that an employer, when faced with the option of hiring a 16 year old or a 25 year old, will pick up the 25 year old.  They need reasonable junior rates to cover the additional costs of safety in hiring and supervising a younger person or else they will not do it.


In conclusion, we have presented significant evidence that is probative, our evidence explains the opinion of our industry on key employment participation, and the opinion is staggeringly consistent.  The CFMEU has chosen not to cross-examine the evidence of our witnesses.  If they believed the evidence was incorrect, then they should have called those witnesses, as they should have called our witnesses for redundancy.  They had the opportunity and they stepped back.  This evidence is probative and we submit that the Commission should give it significant weight.


We submit that the award needs junior rates in order to comply with the award objectives and specifically the need to promote social inclusion through increased work participation.  If it pleases.


DEPUTY PRESIDENT GOSTENCNIK:  Mr Boanza, can I just take you to the submission that you make at paragraph 4 in the written document that you circulated last night.  The suggestion there seems to be that we should exercise power to, you say, rectify omissions.  The provision actually is concerned with removing ambiguity, uncertainty or correcting an error in the award.  What is it that you say is the ambiguity or uncertainty or the error in the award?


MR BOANZA:  We say that the error, your Honour, was that there was no proper consideration given to the junior rates that existed in - - -


DEPUTY PRESIDENT GOSTENCNIK:  That is a criticism of the decision.  Are you suggesting that the Commission did not intend not to - did not intend that this award not have junior rates of pay?


MR BOANZA:  Yes, we say that it wasn't contemplated at the time and that is an error.


DEPUTY PRESIDENT GOSTENCNIK:  So it is a criticism of the decision.  Yes, all right.


VICE PRESIDENT HATCHER:  Thank you.  Any other employer submissions?  No.  Mr Crawshaw, Mr Maxwell, can I start with this question, which may be relevant to the question of power, at least:  in clause 19.1(a) of the award, page 27 - do you have that, Mr Maxwell?




VICE PRESIDENT HATCHER:  In terms of the minimum wages, it refers to an adult employee within this level being paid these rates and then, of course, separately it has got apprentice wages.  On one view, the award doesn't set any rate of pay for a non-adult employee, whatever that is, who is not an apprentice.  Would you treat that as a prohibition on their employment or an omission of a rate for that category or what?


DEPUTY PRESIDENT GOSTENCNIK:  Or perhaps the ambiguity or uncertainty that Mr Boanza is looking for.


VICE PRESIDENT HATCHER:  Or is there some other provision I have missed?


MR MAXWELL:  Your Honour, I haven't turned my mind to that issue, but the intention of the award and the understanding of the award parties is that 19.1(a) applies to all employees other than trainees and apprentices.


VICE PRESIDENT HATCHER:  Where is the evidence of that?


MR MAXWELL:  The understanding on the basis that there's no evidence of any employers employing - sorry - if the employees - if this award only applies to adults and trainees and apprentices, then, I suppose, the junior - any employees that are not an adult, and there is no definition of adult in the award other than for adult apprentices, then there is a question about what award would then apply to people that are not an adult.


VICE PRESIDENT HATCHER:  It is not a question of whether the award applies, it's to whether it sets a rate for them.


MR MAXWELL:  Your Honour, I would like some time to consider that and also to go back through the various decisions leading up to this, but it has always been the case since the recognition in the Junior Rates Inquiry of 1999, which we have referred to extensively in our written submission, that junior rates were not utilised and that employees, irrespective of their age, were paid the adult rates for the industry.


VICE PRESIDENT HATCHER:  Anyway, perhaps between now and 1 o'clock, you can turn to the merits and you will have the lunch break to find anything that you think is relevant.


MR MAXWELL:  Just briefly in regard to the submission of the CCF that we have just received, Mr Boanza seeks to rely on section 160 and refers to section 157.  I just wish to point out to the benefit of the Bench that sections 157 and 160 fall within Division 5 of Part 2-3 of the Act and Division 5 is headed "Exercising modern award powers outside 4 yearly reviews and annual wage reviews".  Therefore, clearly, sections 157 and 160 are not relevant to the four-yearly review and they are covered by the provisions earlier set out in the Act and, in particular, section 156.


DEPUTY PRESIDENT HAMILTON:  So what is the relevant provision?


VICE PRESIDENT HATCHER:  It is 156(3) not 157(3).


MR MAXWELL:  Yes, that is correct, your Honour, and we say that requirement on the Commission is clear, that the Commission may make a determination varying modern award minimum wages only if the Fair Work Commission is satisfied that the variation of modern award minimum wages is justified on work value reasons.


DEPUTY PRESIDENT HAMILTON:  Are you saying that if the minimum wage clause is varied, that varies minimum wages?


MR MAXWELL:  That's correct.  And, your Honours, we would refer to, I think, paragraph 46 of the Federal Court decision that Mr Boanza referred to where they refer back to the Fair Work Commission decision that was being dealt with and, in paragraph 46, says:


Under the heading "Is the Award achieving the modern awards and minimum wages objectives?", the FWC referred to sections 134 and 284 of the FW Act (at [115]).  The FWC stated that in its opinion, because the SDA's claim was for an increase in the minimum rate payable to a 20-year-old, the claim met the description of a variation which "relates" to the Retail Award's minimum wages.


It goes on.  We say this case is the opposite of that in that the CCF are seeking to reduce the wage rate that will apply to a 15, 16, 17 year old.


DEPUTY PRESIDENT HAMILTON:  Well, there is no wage rate that applies to a 15, 16, 17 year old, apparently, on one view.


MR MAXWELL:  Maybe on one view, but, as I say, we will take that on notice and look at that issue.  The point we wish to make is in the Federal Court decision, they accepted that interpretation of the Fair Work Commission that it was a variation to the minimum wages, and we say that then enlivens section 156(3) of the Fair Work Act.


Your Honours, I have made extensive written submissions on the issue of junior wage rates and we have pointed out that, looking at the statistics, the absence of junior wage rates has not harmed the employment of young people in the industry.  The construction industry has the highest level of full-time employees in both the 15 to 19 and 15 to 24 year old age group.  That evidence was confirmed during the cross-examination of Mr Wilson from the MBA.  We also rely on the witness statements of Mr O'Hearn - - -


VICE PRESIDENT HATCHER:  Can you give a transcript reference for that?


MR MAXWELL:  Yes, that is PN1836 and PN1838.


VICE PRESIDENT HATCHER:  What date was that?


MR MAXWELL:  The date escapes me.  It was last Wednesday.




MR MAXWELL:  We also rely on the witness statements of Mr O'Hearn, who discusses the availability of different work experience programs that are currently available, which we say addresses the type of issues that Mr Boanza raised about people getting experience and a look around construction sites, that those programs are currently in place, although they are not generally taken as employees under those arrangements.


We also rely on the witness statements of Mr O'Hearn and Mr Cameron, which we have provided.  Mr Cameron's witness statement is exhibit 17 and Mr O'Hearn's witness statement is exhibit 15.  In those witness statements, they identify their concern that if junior wage rates were introduced, it would undermine the apprenticeship system and traineeship system that currently exist, and particularly in regard to the evidence of Mr Cameron in his witness statement where he deals directly with the civil construction industry where he talks about apprenticeships and traineeships are a more recent introduction and since 2000 they have been growing and his concern that junior wage rates would undermine those arrangements.  Your Honours, we submit that a work value case is required under the Act to provide for junior rates.


The only other point I wish to make is that in regard to the CCF survey, which we say should be given no weight, and we also object to the evidence of Mr Hovey and Mr Castledine and Mr O'Connor, and we have dealt with that in our written submission in regard to the evidence and we rely on those submissions, but in regard to the CCF survey, we note that the survey, to the extent that you can call it a survey, given it was an email question sent out to the CCF membership, the CCF in, I think, the statement of Mr Castledine refers to the 2000 members that they have across the country and there were only 314 responses to that survey on a simple question "yes" or "no", which indicates that approximately 84 per cent of the CCF members are either indifferent or maybe do not support the variation that is being sought.


We say that survey evidence should be given no weight at all.  It is not a proper survey and it was based on a false presumption because the question, when you look at it, says that junior wages rates were - the claim of the CCF is that junior wage rates were extensively used by their members in the building and construction industry.  As our written submission points out, and it was recognised in the junior rates case of 1999, junior wage rates only applied to unapprenticed juniors in South Australia and to junior roof tilers in Western Australia.  We say when you look back through the history of those awards, those areas didn't cover the members of the CCF, that roof-tiling companies are not members of the CCF and people engaging unapprenticed trades are generally not members of the CCF in regard to the building trades.


We point out that the decision in the junior rates case in 1999, they made explicit recognition that junior wage rates were not being utilised in the construction industry and we say there is no evidence that the junior rates Full Bench was incorrect and, if they were used, we would expect there would have been evidence provided to this Commission to show that and it has not occurred.


On the basis of those submissions, and our written submissions, we oppose the variation to include junior wage rates.


VICE PRESIDENT HATCHER:  You can say anything additional you want to say at 2 o'clock and we can wrap this issue up.


MR MAXWELL:  Yes, your Honour.


DEPUTY PRESIDENT GOSTENCNIK:  For no other reason than perhaps your interest in research over lunch, the Plumbers and Fire Sprinklers Award minimum wages provisions opens with the same words, "An adult employee", compared to the Joinery and Building Trades Award, which doesn't and simply provides a classification of minimum wages for employees other than specified in 18.4, which relates to apprentices, trainees and supported wage employees - the relevant minimum wages apply.


VICE PRESIDENT HATCHER:  We will now adjourn and resume at 2 pm.

LUNCHEON ADJOURNMENT                                                           [1.00 PM]

RESUMED                                                                                               [2.01 PM]


VICE PRESIDENT HATCHER:  Mr Maxwell, did you want to add anything to this question?


MR MAXWELL:  Just briefly to address the question, I suppose, we were dealing with prior to the luncheon break in regard to the minimum wages issue.  We say that the award was intended to cover all employees within the classifications contained within the award and all the awards on which this award was based, particularly the National Building and Construction Industry Award 2000 and the AWU Civil and Construction Award, didn't contain that word "adult".


VICE PRESIDENT HATCHER:  So where did it come from?


MR MAXWELL:  From my recollection and the documents I have gone through, it first appeared in the exposure draft released by the Australian Industrial Relations Commission in December, I think it was, 2008 - sorry, January 2009.  From our perusal of the submissions that were made in regard to the exposure draft, a number of submissions were made in regard to junior wage rates, in favour of junior wage rates from the HIA and MBA and opposed to the junior wage rates by the CFMEU.  We deal with those briefly in paragraph 126 of our written submission.


From what we can find, no party made any submissions in regard to that opening paragraph of the wording in 19.1(a).  From my view, it was perhaps an oversight on the parties, but the parties' main intention was to address the issue at the time to ensure that the minimum rates were calculated in accordance with the hourly rate calculation and the weekly hire calculation in clauses 19.3(a) and 19.3(b).


VICE PRESIDENT HATCHER:  Does it follow from that submission that this is something that we should correct, leaving aside the question of junior rates?


MR MAXWELL:  If it needs correcting, yes, we say the Full Bench would correct it.


Your Honour, in paragraph 164 of our submission, we refer to the Award Modernisation decision [2008] AIRCFB 550 at paragraph 12 where the Full Bench said:


In a general sense we consider that these considerations require the Commission to make awards primarily on broad industry lines and, as far as practical, to make those awards applicable to all award-covered employees in the relevant industry.


What we say is that prior to 1 January 2010, the word "adult" wasn't in the pre-reform awards and clearly those awards covered non-adult employees in the building and construction industry, and given it was the intention of both the government and the Fair Work Commission to ensure that the modern awards also covered those employees and others, they weren't award free, then we submit the intention was that that would continue to apply.


On the basis that you now have applications before you that seek to insert junior wage rates is recognition that the industry recognises, or has recognised to date, that the wage rates in clause 19.1(a) and calculated in accordance with 19.3(a) and (b) apply to non-adult employees, particularly the 15, 16 to 20 year olds.


On that basis, we say to now interpret the award as not applying to the non-adult employees would be an absurd outcome and contrary to the intention of the Award Modernisation proceedings.  If the Commission pleases.




MR CRAWFORD:  Your Honour, what is clear is there are currently no junior rates in the award and we certainly say that there has been insufficient evidence presented to justify the insertion of junior rates.  We would say quite a significant case - regardless of the legal issue about whether a work value case strictly has to apply - as a matter of industrial merit, a substantial case would have to be run to justify workers of a certain age being paid lower rates than everyone else in the industry.  The evidence led by the Civil Contractors Federation in terms of what you could call a survey and a few brief witness statements wouldn't get anywhere near justifying this Bench inserting junior rates into the award.


We think the reference to the word "adult" is an error and that this Full Bench should correct it.  Some textual support for that proposition can be found from clause 36.6 of the current award.  That clause refers generally to a restriction on employees under the age of 18 years being required to work overtime or shift work.  That wording is not linked to an apprenticeship or traineeship, it is general wording.  We say that is a textual indication that the reference to "adult" in the minimum wages clause is actually an error and, as the CFMEU pointed out, everyone in the industry is proceeding on the basis that currently the minimum wages in the award apply to people of all ages, aside from apprentices and trainees.


During the lunch break, I noticed that the Fair Work Ombudsman certainly also gives that advice out to the industry.  They have got on their website an indication that under the On-site Award junior employees receive the adult rates.


That is all I wanted to put.


VICE PRESIDENT HATCHER:  Thank you.  Anything in reply, Mr Boanza?


MR BOANZA:  Yes, thank you, your Honour.  Absolutely, yes, we just heard from Mr Maxwell that it is an error in the award the fact that it refers only to adult employees.  Our members proceed on that basis, they proceed on the basis that regardless of the age of an employee, they need to pay adult wages because that's all there is and this is why they have been so strongly requesting that we put submissions in relation to the introduction of junior rates, which we say would address that issue, would correct that error and omission that was made at that time of the making of the award and it would also provide employers with a junior rate in order to ensure that there is inclusion in accordance with the modern award objectives.


On a bona fide reading of this award, there is very little inclusion in accordance with the modern award objectives when there is no type of employment other than adult employees and apprentices and trainees, but there is no employment for any unapprenticed employee.  Thank you.




MR SCHMITKE:  Your Honour, if I could just, at this juncture, reiterate the comment I made this morning about the Master Builders not proceeding with this aspect of our claim in the context of this matter.  I would say no more than that.


VICE PRESIDENT HATCHER:  Thank you.  The next issue, I think, is coverage.  Mr Crawshaw?


MR CRAWSHAW:  The coverage issue we have raised is the first one listed.  I think the first thing I should do in relation to our issue is just to clarify the summary at paragraph 9 of our submission which talked about ensuring the primacy of the Building and Construction Award.  I think the responses of various employer organisations have taken that to mean that we are seeking preferential treatment for the Building and Construction Award.


We submit that it is clear from the amendment we seek and the submissions we have made at paragraphs 162 to 172 that we are not seeking that the Building and Construction Award be given preferential treatment in terms of on-site employees, but trying to remedy the current situation which, through clause 4.2, as interpreted by at least one Full Bench of this Commission, has given priority to other awards listed in clause 4.2 in relation to on-site employees.  In our submission - - -


VICE PRESIDENT HATCHER:  What page is this?


MR CRAWSHAW:  Paragraphs 162 to 172 of our principal submission.




MR CRAWSHAW:  If I could take you to the current provision, clause 4.1 says:


This industry award covers employers throughout Australia in the on-site building, engineering and civil construction industry and their employees in the classifications within Schedule B -


which I just note by the by is consistent with Mr Maxwell's submission just made that the award is meant to cover all employees, whatever age, but coming to subclause 4.2, it provides:


Without limiting the generality of the exclusion -


referring to 4.1 -


this award does not cover employers covered by -


various awards.


VICE PRESIDENT HATCHER:  That does limit the generality of the exclusion.


MR CRAWSHAW:  I am sorry?


VICE PRESIDENT HATCHER:  That does limit the generality of the exclusion.


MR CRAWSHAW:  That is one of the problems with the way it is worded.  The way the two Full Benches have interpreted that is that subclause 4.2 is to be read as a stand-alone and that 4.1, in effect, applies to other awards and, in particular, the way those - particularly the Jarrad decision that we have referred to at paragraphs 167 and 168, has led to a situation where clause 4.8, which is the most appropriate award classification clause that you find in many awards, has no applicability because if you take - perhaps the best way to show it is to go to the Jarrad decision which deals with the Plumbing Award.  I think some copies have been made and, once again, I thank the Commission staff for that.


In that decision, you will see that for the purposes of the BOOT test, there was an argument as to whether the Building and Construction Award or the Plumbing Award applied.  The Plumbing Award provisions - you have probably got them before you for the purpose of the review anyway - but they are also set out at paragraphs 17 through to 21 of the decision and, in particular, clause 4.1 says:


This industry and occupational award covers:  (a) employers throughout Australia in the industry -


et cetera - that is (a) - and (b) employers with respect to employees engaged in the various occupations.  So it goes to both the industry and occupations.


The way the Full Bench read that clause in combination with clause 4.2 of the On-site Award is set out at paragraph 38 where the Full Bench said:


Clause 4.2 of the On-site Award provides that "without limiting the generality of the exclusion, this award does not cover employers covered by: ... the Plumbing and Fire Sprinklers Award 2010".  Given the finding that the Company is covered by the Plumbing Award, it follows that the On-site Award does not cover the Company.  In these circumstances, it is not necessary to consider the operation of clause 4.6 of the Plumbing Award and clause 4.8 of the On-site Award and, in particular, which award contains the classifications most appropriate.


Clause 4.6 of the Plumbers Award, I think, has a similar provision to clause 4.8, namely the most appropriate classification test.  The long and the short of it is that under that Full Bench decision, once an employer falls within any of the awards set out in subclause 4.2 of the Building and Construction Award, the Building and Construction Award is, in effect, excluded and there's no room for the most appropriate test that is found at subclause 4.8 of the Building and Construction Award and a similar test is found in these other awards because that's the general prescription that the Commission put in, or Fair Work Australia, as it then was.


VICE PRESIDENT HATCHER:  What would the result of the Jarrad case be if your variation was granted?


MR CRAWSHAW:  The result would be that subclause 4.2 would not apply and because both awards applied, subclause 4.8 would apply and the award classification which is most appropriate would apply, and that would apply whether you applied the Plumbing Award or the - - -


VICE PRESIDENT HATCHER:  In Jarrad, what award would end up applying?


MR CRAWSHAW:  Under Jarrad, as you can see, in paragraph 38, by way of obiter, I suppose, the Full Bench went on to say, "If we'd applied clause 4.6 or 4.8, we would have found that the Plumbing Award had the most appropriate classification."  We are not suggesting it would have changed the result in the Jarrad case, what we are saying is that the Full Bench decision in the Jarrad case exposes a real practical problem with clause 4.2 of the Construction Award.


VICE PRESIDENT HATCHER:  Does clause 4.8 of the Construction Award have any operation?


MR CRAWSHAW:  Not in relation to those awards, that's the point, and that's the matter that we're trying to remedy and, as I say, we are not trying to give the Construction Award preferential treatment, we are trying to give it equal treatment with these other awards in respect of employers who are employing employees on site.


VICE PRESIDENT HATCHER:  I don't understand how the cause of certainty is advanced by placing greater reliance upon clause 4.8.  I would have thought 4.8 is a last resort clause, not something you would use in the ordinary course  of determining coverage of an award, because you can never tell what the actual answer will be.


MR CRAWSHAW:  It's the normal method for dealing with overlapping coverage.


VICE PRESIDENT HATCHER:  I know, but it's not a desirable method because no employer can know with certainty what the answer will be.


MR CRAWSHAW:  When your Honour says it is not a desirable method, it's the method that has been inserted in all the modern awards and, as we set out in paragraph 171, when Watson SDP dealt with another application relating to clause 4.2, he says it is:


a mechanism applied generally across modern awards for deciding which modern award applies in the case of overlap or potential overlap.


Then he goes on to talk about clause 4.8 being the appropriate mechanism and, with respect, there is nothing remarkable about that.


DEPUTY PRESIDENT GOSTENCNIK:  But the current provision brings about more certainty than your provision, does it not?


MR CRAWSHAW:  I am sorry?


DEPUTY PRESIDENT GOSTENCNIK:  The current provision brings about more certainty than your provision.


MR CRAWSHAW:  Yes, it may bring about certainty, but it doesn't conform with the principle that is set out in paragraph 164, which Mr Maxwell just read to you in the context of the junior rates argument, that the Commission is to make awards primarily on broad industry lines and, as far as practical, to make those awards applicable to all award-covered employees in the relevant industry.  Here there is a big carve-out of a whole lot of employees.


An argument may arise, and I think we put it in Jarrad, that despite the exclusion of the Plumbing Award, when you come to the Plumbing Award, you have got to still look at clause 4.6, which talks about if another award applies.  The effect of the Full Bench decision is 4.26 has no application, but in the Coffey decision, which we have also set out, it appears that a slightly different approach was taken to the Manufacturing Award in this sense, that the clause - do you have the Coffey decision before you?  One of your Associates suggested - - -


VICE PRESIDENT HATCHER:  It is here somewhere.


MR CRAWSHAW:  It has been provided earlier.  It is dealt with at paragraphs 22 to 24.  Once again, in that case, it made no practical difference in that there was a finding that the Manufacturing Award was more appropriate, but in the Coffey decision, it was found there was a priority for the Manufacturing Award, as is obvious from clause 4.2, so then the provisions of the Manufacturing Award were looked at and then there was a comparison made under the more appropriate classification provision in that award between the On-site Award and the Manufacturing Award, so the attitude wasn't taken that the effect of 4.2 was to automatically take the On-site Award out of the picture.


VICE PRESIDENT HATCHER:  It was decided on the more appropriate basis, not on the basis that there was an exclusion.  If I'm a labourer employed by a plumbing company that does on-site construction work, does it make any difference to my pay and conditions whether I am under the Plumbing Award or the On-site Construction Award?


MR CRAWSHAW:  I think we went through that exercise with Jarrad and it would depend on the particular classification.


VICE PRESIDENT HATCHER:  I am not a plumber, I am just a labourer.


MR CRAWSHAW:  It did make a difference.  They classifications, insofar as they line up, do not line up on exactly the same wage rates and that's why it was relevant for the BOOT test.


VICE PRESIDENT HATCHER:  Which has the higher rates?


MR CRAWSHAW:  I think there were some classifications higher in one award and some classifications higher in another award.


VICE PRESIDENT HATCHER:  Are there plumbing classifications in the On-site Construction Award?


MR CRAWSHAW:  I think the company in question was doing pipeline and they said that was part of plumbing and the CFMEU - - -


VICE PRESIDENT HATCHER:  Obviously, if you were a plumber, you would be under the Plumbing Award, but I'm just wondering whether the effect of your variation would be that, say, a trades assistant would thereby be under the Construction Award and end up being covered by two awards.


MR CRAWSHAW:  I don't think - are you saying the one employer might have employees under different awards?


VICE PRESIDENT HATCHER:  I am wondering whether your variation leads to the result that if there is somebody covered by a classification that's in both awards, for example a trades assistant or a labourer, whether the effect of your variation is to put the labourer under the On-site Construction Award so the employer ends up being covered by two awards.


MR CRAWSHAW:  The employer?  Yes.




MR CRAWSHAW:  But that would not be necessarily an unusual situation.


VICE PRESIDENT HATCHER:  I am just asking, is that the result?


MR CRAWSHAW:  It could happen, I would imagine, though the effect of clause 4.8 might have something to say about that because that may be a consideration that is taken into account in determining which is more appropriate.


VICE PRESIDENT HATCHER:  If it doesn't change somebody's coverage, I'm just wondering what the point of the variation is.  Presumably you are seeking the variation because you want to change somebody's coverage from one award to another.


MR CRAWSHAW:  We are seeking to have the On-Site Award cover the whole industry, subject to the normal overlapping coverage criteria, as is meant to be the intent of these awards.


Can I just say briefly, because there's been replies on this and we are going to hear from them, I think the AiG submission in reply suggests that there was vigorous debate about this issue and has mentioned certain documents.  We would submit that those documents, without going into them, dealt with this matter rather cursorily and, indeed, the Full Bench decision didn't really come to grips with this particular matter.


In summary, what we are saying is we are seeking not preference for one award or the other but a sensible middle ground that is the norm in modern awards.  If the Commission pleases.


VICE PRESIDENT HATCHER:  Mr Crawford, do you want to say anything about this?


MR CRAWFORD:  No, your Honour, we support the variation.


VICE PRESIDENT HATCHER:  Who wants to go first on the employer's side?  Ms Paul?


MS PAUL:  Yes, your Honour.  Your Honour, could I just first take you to the actual union's submission, the new words that they are proposing at 163.  Notwithstanding Mr Crawshaw's claim that this is not going to provide some sort of primacy, in effect, it actually does, it neuters the effect of 4.2 in relation to creating any sort of exemption which was intended by virtue of that particular provision.  In effect, it's basically "employers of employees engaged on-site performing work in the classifications".


If you happened to be a manufacturer, for example, and, as it would be, there may be from time to time that you might find an employee who generally does off-site work ends up on-site for whatever reason, the question is, wouldn't that employee, who would then be engaged on-site performing work within potentially one of the classifications, get captured by the On-site Award as opposed to being appropriately covered by the Manufacturing Award?


In light of the argument this is somehow not trying to give primacy to the Building Award, we say that, in effect, the very drafting actually does and reinstates the actual claim that the CFMEU brought before the Award Modernisation Bench on the issue of wanting to have primacy given to the Building Awards.  I don't intend to go through that because we have dealt with that because we have dealt with that in our submissions and referred the Bench to the relevant documentation.


I think what is useful, your Honour, is in relation to looking at the case which was referred to again by the CFMEU, being His Honour Watson SDP's decision in Application by Master Builders Australia Limited [2013] FWC 4576.  This is the claim that was brought by a number of parties, the MBA, HIA and ABI, for a variety of claims.  Again, I don't intend to take you through all of that, I just wanted to highlight that the extraction at 171 of the specific paragraphs of that decision omits to put it within context.


What I say is really around the context that this was around looking at what was being sought as an HIA application for an extension of 4.2, but, interestingly enough, as part of that particular decision, which can be found at 131 of the decision, there is a submission that was made by the AWU in relation to the Premixed Concrete Award and Asphalt Award and, at 131, there is an extract of the Award Modernisation Full Bench statement and the relevant extract reads:


It appears that premixed concrete batch plants are predominantly operated by employers in the premixed concrete industry, servicing customers in a variety of industries including the on-site building, engineering and civil construction industry.  There are, however, some employers in the on-site building, engineering and civil construction industry who have purchased and operate their own plant, principally in relation to road-making.


It then goes on to say:


We think that batch plant operators and associated premixed concrete classifications should fall within the coverage of the modern award covering the employer – the Premixed Concrete Award 2010 in the case of employers within that industry and the Building and Construction General On-site Award 2010 in relation to employers in that industry.


His Honour Watson SDCP effectively made the amendment to the award by adding the exclusion of the Premixed Concrete Award at 4.2, but essentially that paragraph, we say, outlines how 4.2 is to operate.  If an employer is covered by the industry, which we will use the premixed concrete as an example, then that is the appropriate award and that is the classification to be looked at and that's where the question starts and ends.


Clause 4.8 only has application if the employer is found to be operating in two different industries, at which point there is an issue about whether or not there is an overlapping award and then you look at what the employee is actually doing.


What the CFMEU is seeking as support is the cases that they have raised.  The first one is the Jarrad decision, which was mentioned earlier.  We say the Jarrad decision effectively is not an issue about - to use a better term, it doesn't nullify the effect of 4.8.  4.8, as your Honour quite rightly pointed out, is a last resort clause to utilise, but the Jarrad decision was notably on the basis that a decision was made based on the evidence provided to the Bench at that point in time as to what the employees actually did and which award they should more appropriately fall under.  There was no evidence put by the CFMEU at that juncture in relation to the work the employees did, the classifications or any other evidence for the Commission to make up its mind.


The Commissioner, at first instance, made the determination based on the evidence put by the employer that the nature of what the employer did and the nature of what the employees did in that circumstance was actually covered by the Plumbing Award.  There was no issue around the interaction of 4.2 to 4.8 and we say that carried through in terms of the Full Bench decision, which effectively said that the Commissioner at first instance made the right decision in relation to finding of the Plumbing Award.  Once that was done, there was no necessity to look at 4.8.  This is not an issue about 4.2 creating some sort of problem.


Similarly, in relation to the MBA decision I referred to earlier, that, too, is a matter that did not highlight any contradiction between 4.2 and 4.8.  4.2 creates and preserves, for example, in manufacturing, the ability for manufacturing employers to pay and be covered by the Manufacturing Award while undertaking some work off-site, for example, that may fall within classifications that fit within the Building Industry Award.  But, if they are covered by the Manufacturing Award, that is the most appropriate award that would apply.


Finally, your Honour, the final decision, I think, that the CFMEU have sought to rely upon was obviously the Coffey decision.  Similarly to the other matters, they weren't issues on point.  To make the amendments being sought, there has to be a problem or some change or some error.  None of that has been established by the CFMEU in relation to this matter.


There is the overarching principle that was raised at paragraph 164 of the CFMEU's submission that somehow there was this intent by the Commission in terms of the Award Modernisation Bench, that the general intent of the Commission and its predecessors, it says, is to make awards applicable to all award-covered employees in the relevant industry.


To put that into context, your Honour, that was the initial statement made by the Award Modernisation Bench in relation to the allocation of priority awards and how they were intending to run.  This is not some statement that is set in stone where, clearly, as decisions that were made subsequently, and particularly the evolution of clauses 4.1, 4.2 and 4.8 in the Building and Construction Award evolved to move away from what the union is attempting to claim is this sort of intent of creating an industry award.  Clearly the awards have been created on both industry and occupational grounds.


We say simply that, firstly, the claim by the CFMEU is to create priority, which was clearly not an intention, and we argue that that has been well and truly argued and determined by the Full Bench.  Secondly, we say they have proven there is no issue or error or that there's no reason for this Bench to make any change as suggested.


If the Commission has no questions in relation to that, that's all the submissions I seek to make.


VICE PRESIDENT HATCHER:  Thank you, Ms Paul.  Is there anything else that any other employer party wants to say in addition to what Ms Paul has said?


MS ADLER:  Only to highlight in our written submissions in reply that we deal with this issue at section 3.1 and we address the two cases that have been relied on by the union and, within that written submission, we express serious concern with what is being proposed.  We say it would upset the industry coverage of the award and would, in fact, confuse that intended industry coverage by referring to what the employees' work or classification is within clause 4.2.  We say it would create more confusion and there has been no evidence provided as to any issue with the way the current provision is operating.  Thank you.


VICE PRESIDENT HATCHER:  Anything in reply?


MR CRAWSHAW:  No, nothing in reply.


VICE PRESIDENT HATCHER:  All right.  The next issue is "Other MBA Matters".  Mr Schmitke?  Perhaps we can just deal with all these matters conjointly.


MR SCHMITKE:  Yes, your Honour.  I thought CCF had a matter in relation to coverage?


MR BOANZA:  Yes, we have.




MR BOANZA:  Yes, your Honour, we do, we have an application in relation to the overlap between the Building and Construction Award and the Asphalt Industry Award.




MR BOANZA:  We have a claim in relation to the overlap between the Building and Construction Award and the Asphalt Award and the coverage of that particular award.


VICE PRESIDENT HATCHER:  Which submission?


MR BOANZA:  It is in our submission on 9 December 2016.


VICE PRESIDENT HATCHER:  Thank you.  So you seek the deletion of 4.10(b)(ii) in its entirety?


MR BOANZA:  Yes, we do, your Honour.  The basis of our submission is the fact that we say there is still considerable doubt and misunderstanding among employers who are going to perform asphalt work as to which award is going to cover that particular work and we say that is contrary to the modern award objectives to have this overlap between those two awards.


There is a situation in the industry where a company could be having a couple of excavators and doing some earthmoving and also doing some asphalt work to build roads or to do subdivisions and because of the use of excavators and earthmoving equipment, that company would be covered by the Building and Construction Award and would have to pay for the Asphalt Award according to that award.  On the other hand, there are other companies that would not necessarily be doing any earthmoving, they would simply be doing the same asphalt work and they will be covered by the Asphalt Award and that award is very different in terms of the wages and conditions that employers have to pay.  We say it creates an uneven marketplace and an unfair advantage.


VICE PRESIDENT HATCHER:  You are saying road-making would no longer be civil construction?


MR BOANZA:  That is right, or it will be civil construction but it would be covered by the Asphalt Award where it was formerly before the making of this modern award.


VICE PRESIDENT HATCHER:  So a freeway construction project would not be civil construction any more?


MR BOANZA:  It would be up to the point where the asphalt  needs to be laid.  Once the asphalt needs to be laid, it would be laid by companies operating under the Asphalt Award.


VICE PRESIDENT HATCHER:  Is the expression "road-making" defined?


MR BOANZA:  It is, your Honour.


VICE PRESIDENT HATCHER:  It is not in the definitions.  Where is it defined?


MR BOANZA:  Bear with me, your Honour, I'll find it.  So if we go to clause 4.10 of the Building and Construction Award and we go to (b)(ii), it says:


Road-making and the manufacture or preparation, applying, laying or fixing of bitumen emulsion, asphalt emulsion -


et cetera.  That is pretty much the same definition that is found in the Asphalt Award.


VICE PRESIDENT HATCHER:  I was really just concerned with the expression "road-making" at the beginning of that clause.  What does that mean?


MR BOANZA:  Road-making means laying the asphalt on the top.


VICE PRESIDENT HATCHER:  So that's all, it doesn't require - - -


MR BOANZA:  It doesn't require earthmoving.  So, prior to the making of this modern award, there was the earthmoving side of road-making or construction, which was done under the National Building Award, and then the asphalt work was covered by the Asphalt Award.  With the making of the Building and Construction Award, that definition in the Asphalt Award was put into the definition of "civil work" in the Building and Construction Award in clause 4 under "Coverage" and we say that is where the overlap of the two awards does occur and we say that it should be deleted and that work should be returned to the Asphalt Award.


DEPUTY PRESIDENT GOSTENCNIK:  So does the Asphalt Award apply to the laying or application of asphalt to road-making?


MR BOANZA:  Yes, it does.


DEPUTY PRESIDENT GOSTENCNIK:  Because as I read paragraph (b)(ii), there is road making and those other things.




DEPUTY PRESIDENT GOSTENCNIK:  Road making being something distinct from bitumen emulsion, asphalt emulsion, et cetera.  Otherwise the punctuation, the comma and the "and" would be superfluous.


MR BOANZA:  It's exactly the same definition that is in coverage under 4.2 of the Asphalt Award.




MR BOANZA:  Exactly the same reference in 4.2 of the Asphalt Award which was submitted with the CCF papers, in clause - - -


DEPUTY PRESIDENT HAMILTON:  At page 60, you quote the definition of "asphalt industry" in the Asphalt Industry Award.  Is that what you are referring to?


MR BOANZA:  That is what I am referring to, your Honour, yes, and it talks about road-making and the manufacture, preparation and laying or fixing of bitumen emulsion, asphalt emulsion, bitumen, et cetera, which is essentially exactly the same as what is contained in the Building and Construction Award at 4.10(b)(ii).


DEPUTY PRESIDENT HAMILTON:  So it is dealt with under clause 4.8 then of the Construction Award?


MR BOANZA:  It is 4.10, sorry, of the Building and Construction Award, 4.10(b).


DEPUTY PRESIDENT HAMILTON:  Sorry, both awards seem to apply and overlap, therefore does 4.8 determine coverage?


MR BOANZA:  I don't know, your Honour, I don't know.  That's what we are trying to clarify.


DEPUTY PRESIDENT HAMILTON:  Sorry, 4.10(b)(ii), isn't that roughly the same as paragraph (a) at page 60 of the Asphalt Industry Award?


MR BOANZA:  It is.


DEPUTY PRESIDENT HAMILTON:  So therefore both awards apply and therefore 4.8 of the Construction Award determines which is the most appropriate award.  Is that right?


MR BOANZA:  Well, I don't know, your Honour, we're not sure and our employers are not sure when they register awards which one they should be applying.  That is the point we are making.  It is very confusing for employers to be able to work out which award to apply given that they are doing the same work, road-making, asphalt laying and so on.


DEPUTY PRESIDENT HAMILTON:  Fair enough, you have made your point, thank you.


MR BOANZA:  Thank you, your Honour.


VICE PRESIDENT HATCHER:  Thank you.  Mr Crawford?


MR CRAWFORD:  There's no other employers?


VICE PRESIDENT HATCHER:  I think they have got nothing to add.


MR CRAWFORD:  Can I please refer the Bench to our reply submissions dated 10 March.  We deal with this issue from paragraph 113 to 121.


VICE PRESIDENT HATCHER:  How do these provisions work, Mr Crawford?


MR CRAWFORD:  Your Honour, the Award Modernisation Full Bench attempted to explain the interaction in the paragraph I have cited at paragraph 119 of our submission.


DEPUTY PRESIDENT HAMILTON:  So it's all about asphalt?




DEPUTY PRESIDENT HAMILTON:  It's all about asphalt?


MR CRAWFORD:  Or the industry perhaps.


DEPUTY PRESIDENT HAMILTON:  Yes.  That's the difference.


VICE PRESIDENT HATCHER:  It's what industry the employer falls within.


MR CRAWFORD:  That appears to be the indication from that paragraph, your Honour.


VICE PRESIDENT HATCHER:  So you look at 4.1 and you find out whether the employer is located in, relevantly, the civil construction industry and that depends upon the character of the employer?


MR CRAWFORD:  Yes.  I think, for example, if Lendlease, a big civil construction company, was doing the relevant work, they are an employer in the civil construction industry and they would remain under the On-site Award for all of that work and, hence, that work is included within the definition of "civil construction" in the On-site Award.  I guess the issue may be different if the employer only performs asphalt work.  That is my reading of what the - - -


DEPUTY PRESIDENT GOSTENCNIK:  Isn't that the reality, that Lendlease would tender for somebody who engages in asphalt work to lay the asphalt?  Lendlease itself wouldn't lay the asphalt.


MR CRAWFORD:  That may be correct, your Honour, but my recollection in reading the award modernisation documents is that they did consider that and were obviously under the impression, for whatever reason, that there were civil construction companies that did perform that work themselves, and there were a couple of additional points that might reiterate that.


Importantly, the Civil Contractors Federation say that the creation of the On-site Award brought asphalt work into this industry for the first time.  Now, that is not right at all.  The old AWU Construction and Maintenance Award 2002 also covered road-making.  It had specific classifications in that award for bitumen sprayer, a CW1, CW3 and CW4 level, so it's not correct that the On-site Award brought asphalt road-making work within the industry for the first time; it has always been considered part of the civil construction industry, so that is simply not correct.


An initial point I was intending to make was there is no evidence of any actual problems here.  It is the submission from the Civil Contractors Federation that there's all this confusion about which award applies.  There's no actual evidence of any confusion, there's no evidence from any employers of any issues.  At paragraph 121 of our reply submission, we indicate that pretty much the same claim arose before Watson SDP in the 2012 Transitional Review and he - you will see I have quoted from his decision in our reply submission.  He stated:


The distinction between the two modern awards in respect of roadmaking is clear from the decision of the Award Modernisation Full Bench.


DEPUTY PRESIDENT GOSTENCNIK:  Mr Crawford, if one looks at the definition of "asphalt industry", for the purposes of this clause, "asphalt industry" means road-making and also means the manufacture, et cetera.  When Lendlease wins a contract to build a road, it is engaged in road-making; yes?




DEPUTY PRESIDENT GOSTENCNIK:  But it is not covered by the Asphalt Industry Award.


MR CRAWFORD:  If employees of Lendlease are performing work within the classifications in the On-site Award, which includes bitumen sprayer, they are covered by the On-site Award.


DEPUTY PRESIDENT GOSTENCNIK:  That is because Lendlease is involved in civil construction work.


MR CRAWFORD:  Correct.


DEPUTY PRESIDENT GOSTENCNIK:  Which is defined to include road-making.




DEPUTY PRESIDENT GOSTENCNIK:  And the definition of the Asphalt Industry Award, the asphalt industry means road-making.


MR CRAWFORD:  There is no doubt the definition is the same in both awards.  There is also no doubt that was quite deliberate and that the Award Modernisation Full Bench did turn their mind to the issue and, in their minds, it seems they thought they were clearly outlining how the distinction is meant to work in that paragraph I have cited.


VICE PRESIDENT HATCHER:  If you fall within the definition that is contained in 4.10(b)(ii), that definition is a definition of asphalt industry which brings you under the Asphalt Industry Award; is that right?


MR CRAWFORD:  The definition is the same, yes.


VICE PRESIDENT HATCHER:  So if I'm a business that does that function, I'm in the asphalt industry and I'm covered by the Asphalt Award; is that right?


MR CRAWFORD:  You can fall within the coverage of both awards.  That's why you have to - - -


VICE PRESIDENT HATCHER:  I am just trying to understand this.  It seems to me that the definition under the Asphalt Industry Award means that an employer who does those things is in the asphalt industry and therefore covered by the Asphalt Industry Award, but the same definition here means that you are in the civil construction industry doing the very same function and therefore you are covered by this award as well.


MR CRAWFORD:  Yes, but aren't there - yes.


DEPUTY PRESIDENT GOSTENCNIK:  And then you go to 4.8 to determine the most appropriate classification?


MR CRAWFORD:  Correct.




DEPUTY PRESIDENT HAMILTON:  That was a question I asked CCF and they weren't sure, but you are sure that that's how it works?  There will be dual coverage and, since there's dual coverage, you then go to 4.8; is that correct?




DEPUTY PRESIDENT HAMILTON:  So they are uncertain about that and you are not; all right?


VICE PRESIDENT HATCHER:  But the passage you quote in 119 of your submissions doesn't suggest the Award Modernisation Bench, unless there's more context, thought that this was an issue to be resolved by clause 4.8, does it?


MR CRAWFORD:  I agree, the indication from - - -


VICE PRESIDENT HATCHER:  For example, if you fell within 4.10(b)(i) and, in addition to that, as part of carrying out civil mechanical engineering projects, you did some road-making, I can understand the point, but where simply doing asphalt making brings you within the civil construction industry, then you are left with the unavoidable problem that you are under two awards.


MR CRAWFORD:  There is that provision regarding overlap that can assist.


VICE PRESIDENT HATCHER:  Again, that's meant to be the last resort, not the first resort.  This makes that the first resort.


MR CRAWFORD:  There are also, as your Honour would be aware, historical cases that go to how you categorise the industry.


DEPUTY PRESIDENT HAMILTON:  Is it the case in applying 4.8, you then apply the Award Modernisation Full Bench decision at paragraph 119?  Is that how it works?  Namely, you look at the industry of the employer?


DEPUTY PRESIDENT GOSTENCNIK:  The difficulty with that paragraph you have quoted is that it suggests that road-making is an element of the asphalt industry whereas the definition "road-making" by itself is in the asphalt industry.  That's the definition of "asphalt industry":


For the purposes of this award "asphalt industry" means road-making.


It also means a number of other things.


MR CRAWFORD:  Yes, I don't think there is any doubt that road-making can fall within the industry definitions of both awards, the Asphalt Award and the On-site Award.  The wording is identical, so that must be the case.


VICE PRESIDENT HATCHER:  Road-making is almost always part of a civil mechanical engineering project, isn't it?


MR CRAWFORD:  Correct, because it's not just asphalt work; obviously you've got to do clearing work and often concrete work.


VICE PRESIDENT HATCHER:  What asphalt work is not done within the context of a civil mechanical engineering project, except maybe doing a driveway?


MR CRAWFORD:  Yes, I guess it could be.  It could even be school playgrounds and, plus, there's a manufacture element as well.  I think the Asphalt Industry Award can cover the manufacture of - - -




MR CRAWFORD:  The On-site Award as well.




VICE PRESIDENT HATCHER:  If I manufacture asphalt, I am in the civil construction industry.


DEPUTY PRESIDENT HAMILTON:  CCF has proposed a solution to dual coverage, namely, removing the On-site Award coverage.  Is there a problem with doing that?




DEPUTY PRESIDENT HAMILTON:  What is the problem?


MR CRAWFORD:  The On-site Award was always intended to cover road-making, the predecessor AWU award covered road-making, and if there's an employer in the civil construction industry performing road-making work, the clear intent is for them to be covered by the On-site Award.


VICE PRESIDENT HATCHER:  Is that what actually happens?


MR CRAWFORD:  Yes, our understanding is it is, and there are important practical consequences here because if you look at the CCF's submission, they go through a range of conditions in the Asphalt Award and the On-site Award and generally the conditions in the On-site Award are far superior, so a simple change will - so a change here can have quite dramatic consequences.


DEPUTY PRESIDENT HAMILTON:  What is your solution to the problem of dual coverage, if it is a problem - if it is a problem.


MR CRAWFORD:  Mr Crawshaw said go the other way.


MR CRAWSHAW:  That's what I'm going to submit, having heard what your Honour says about clause 4.8 being the last resort.


VICE PRESIDENT HATCHER:  For example, who owns that asphalt plant at Rosehill these days?


MR CRAWFORD:  I'm not sure, your Honour, if it's Boral.


VICE PRESIDENT HATCHER:  It's Boral or CSR, something like that, whatever they're called, but let's assume they have the contract to supply asphalt to the Westconnex, the widening project for the employer, they manufacture it and they are supplying the asphalt for it, a civil construction project, which award applies to the manufacture?


MR CRAWFORD:  What the facility - if it's not a construction site, I would have previously said that's probably not under the On-site Award, although I do notice the definition does include the manufacture of asphalt in the On-site Award.


VICE PRESIDENT HATCHER:  That's right, so if they are manufacturing it at Rosehill and they then cart it just up the road to the M4, is the manufacturing process, the actual manufacturing plant, then covered by the On-site Award?


MR CRAWFORD:  I would say "no", that would be the Asphalt Award.




MR CRAWFORD:  Because it's not a construction site and the On-site Award is strictly confined - I have the clause in front of me - clause 4.9 of the On-site Award confines its coverage at all times to on-site work.


VICE PRESIDENT HATCHER:  So manufacturing could only be - I've never heard of one - a theoretical on-site asphalt  manufacturing plant?  Has there ever been such a thing?


MR CRAWFORD:  I don't know.


DEPUTY PRESIDENT HAMILTON:  So your solution is to remove road-making from the Asphalt Award?  Is that what you said or was that Mr Crawshaw?


MR CRAWSHAW:  That's my idea.


DEPUTY PRESIDENT HAMILTON:  That's the CFMEU - sorry.  What is your solution?


MR CRAWFORD:  Bear in mind it's not my case - I'm not asking for a variation - my case was there's no evidence presented of any practical problems.  The AWU has not experienced any practical problems of - - -


DEPUTY PRESIDENT HAMILTON:  So you are happy to use clause 4.8 to resolve the dual coverage?


MR CRAWFORD:  Well, yes, but also other aspects like, you know, is the work done on site, what is the industry of the employer, et cetera.  We fundamentally say if it's an employer in the civil construction industry like Lendlease doing the work themselves, it was always intended that work would be under the On-site Award.


VICE PRESIDENT HATCHER:  Are there any practical problems from your point of view?


MR CRAWFORD:  No, none whatsoever.


VICE PRESIDENT HATCHER:  All right.  Mr Crawshaw?


MR CRAWSHAW:  This, with respect, shows the problem with 4.2.  The HIA made an application before Watson SDP which was refused.  Now we've got another application in relation to the asphalt industry.  Very soon you'll have no On-site Award left because it will all be excluded by - - -


DEPUTY PRESIDENT HAMILTON:  Very hard to do road-making other than on-site.


MR CRAWSHAW:  I'm not sure about that.


DEPUTY PRESIDENT HAMILTON:  You can pre-fab the bridge work, you just have to put it together on site.


MR CRAWSHAW:  That's why I facetiously said - well, perhaps I will come first to your question regarding subclause 4.8.  Obviously it must apply in this situation and it is a problem.  Of course, as Mr Crawford said, there's no evidence of any problems.


VICE PRESIDENT HATCHER:  Road-making, interpreted narrowly, simply means laying the surface of the road, it's not meant to convey - - -


MR CRAWSHAW:  No, we would say that it includes preparing the road through earthworks and the like on civil construction sites.


VICE PRESIDENT HATCHER:  If you are building a freeway, it just get in (b)(i) as a civil mechanical engineering project, doesn't it?


MR CRAWSHAW:  Well, you probably don't need it from that point of view.


DEPUTY PRESIDENT HAMILTON:  Do you agree with the description of clause 4.8 as a last resort?  Is that consistent with your understanding?


MR CRAWSHAW:  No, as I put in relation to our variation, we don't see it as a last resort but the normal, sensible method of resolving a situation where two awards apply, which is inevitable.


DEPUTY PRESIDENT HAMILTON:  Is it used across the award system or - - -


MR CRAWSHAW:  Yes, it is.  Just coming back to the question of whether there's any evidence of any problems, no, there's no evidence of any problems; in particular, there's no evidence of any demarcation disputes, which is what is alleged in the CCF's submission, and the CCF's submission firstly says that it wasn't covered by the National Building Trades Award - National Building and Construction Award - but that overlooks, as Mr Crawford said, that it was covered by the Civil Construction Award pre modernisation.  So, these higher rates of all those applied, the way the CCF submission suggests is that this has somehow led to higher rates applying, but the higher rates have always applied pre modernisation and post modernisation and, as my learned friend Mr Crawford says, what would be the result of this application would be a diminution in rates for those working on-site.


If, contrary to what we suggested in relation to our coverage and clause 4.8 is a sensible way of dealing with things and there's no evidence it hasn't worked here, the Bench is going to take an attitude, "Well, let's be clear cut about this, let's make one award apply or another", that's why - - -


VICE PRESIDENT HATCHER:  What if (b)(ii) was modified to say that the work described had to be performed on a construction site?


MR CRAWSHAW:  That's already the case because of subclause 4.9.




MR CRAWSHAW:  So there would be no problem in making it clearer, I suppose, but it seems to be otiose.


VICE PRESIDENT HATCHER:  Perhaps I put that badly.  What if the problem was resolved by modifying the Asphalt Award to say that it applied to all asphalt functions except when performed on a construction site?


MR CRAWSHAW:  If you are going to take the exclusionary approach, I would suggest that would be the best approach and it's more in line with what the Full Bench said in that quote which is at paragraph 119 of the AWU's submissions.  The clear intent of the Full Bench was if it's on-site, it's meant to be covered by the On-site Award, and I think someone said to Mr Crawford - I can't remember which Member of the Bench - "That doesn't seem to be reflected in the award coverage because it's been left, in effect, legally speaking, to subclause 4.8" - and when I say subclause 4.8, there's an equivalent provision in the Asphalt Award which is subclause 4.7 - but if those overlapping coverages of clauses don't find favour with this Bench, and I hear some sentiment to that effect, well, if there's an award to be given priority or primacy, it should be the On-site Award.


They are our submissions.


VICE PRESIDENT HATCHER:  Anything in reply, Mr Boanza?


MR BOANZA:  Yes, very quickly, your Honour, thank you.  We have just identified how difficult it is for an employer reading the awards to work out what to do.


VICE PRESIDENT HATCHER:  Can I advance the same suggestion to you:  would it be resolved if the Construction Award applies where those functions are performed on a construction site and the Construction Award does not apply and the Asphalt Award applies where they are not performed on a construction site?  Would that clear it up?


MR BOANZA:  I will have to have a think about that.  The difficulty that we have, your Honour, is that in going to the Lendlease example, if I can go to that, in reality what happens is that a civil contractor who operates machinery as in excavators usually misses out on the asphalt work because there would be another company which only does asphalting work who will tender under the Asphalt Award for that work and our member will miss out because under the Building and Construction Award, he has no chance of competing.


DEPUTY PRESIDENT GOSTENCNIK:  But that work would be performed on site.


MR BOANZA:  It would be performed on site.


DEPUTY PRESIDENT GOSTENCNIK:  In which case, under the proposal, the On-site Construction Award would apply.


MR BOANZA:  But that, unfortunately, is not how it works out in reality.  No one prints those distinctions because they are not - - -


DEPUTY PRESIDENT HAMILTON:  No, but if the award was varied to provide that, wouldn't that protect you?


MR BOANZA:  That would protect them to some extent, yes, absolutely, and if I can just - and that is really the basis or the reason for our claim.  We say that this situation has created an uneven playing field when companies are competing for particular work.  We have put a proposed draft determination because, frankly, we thought that would be less traumatic to change one clause in the Building and Construction Award than it would be to eliminate the entire Asphalt Award, but if other solutions are put forward by the parties that are different to our draft submission, we are certainly willing to look at that.




MR BOANZA:  Thank you.




MS PAUL:  Your Honour, if I may just make some comments in relation to the proposition put forward about adding the words "on-site" to subclause (2).  We would have some concern in relation to that, and I am just checking - - -


VICE PRESIDENT HATCHER:  That part of it is already done by 4.9, isn't it?


MS PAUL:  Sorry, your Honour, it's more on the basis of the suggestion that clarifying that in (b)(ii) might somehow inadvertently create a situation where an employer who is covered ordinarily by a different award suddenly gets captured for a small component of that work when undertaking it on an on-site basis, and whilst I'm speaking, your Honour, I'm having a look and the Asphalt is not one of the exclusion clauses in 4.2, but we wouldn't want to somehow see that principle applied in relation to, say, manufacturing, for example, and we say - - -


VICE PRESIDENT HATCHER:  Can I say this, Ms Paul, you can assume that if the Full Bench prefers some variation which is not one of the ones actually advanced by the parties, it will give the parties a further opportunity to be heard about that, rather than deal with it hypothetically.


MS PAUL:  Thank you, your Honour.


VICE PRESIDENT HATCHER:  Obviously, if that proposal was advanced, there would then need to be some notice given to the parties which consider themselves bound by the Asphalt Award.


MS PAUL:  Yes, your Honour, that was our concern.  Thank you, your Honour.


VICE PRESIDENT HATCHER:  Thank you.  Mr Schmitke?


MR SCHMITKE:  Thank you, your Honour.  I note earlier you made reference to moving on to item 6, but I should just bring the Commission's attention to a claim in this related area as well and that is in relation to the Joinery and Building Trades Award and it seeks to deal with the definitional matter and it is related but unrelated to the other issues that have been just ventilated.


Essentially, the determination that we seek is at item 2 of our joinery-related determinations filed last Friday and it's covered in pages 26 to 27 of our submission.  Essentially - and I will get straight to the chase in terms of the omission we are seeking to fix - there is a problem in terms of the people covered by the Joinery Award.  They are performing work in the joinery shop, that is their principal place of employment, that is the principal work they are performing, they then go on-site to install the work that they have done off-site and there's an overlap or a potential problem or uncertainty with respect to which award is applicable.


Our solution is to replace or alter clause 3.1 and the definition of "joinery work" in the Joinery Award to make it clear that joinery work includes the on-site installation, so it's not any actual work being performed other than the installation.


DEPUTY PRESIDENT GOSTENCNIK:  Why is that necessary in light of 4.2 of the On-site Construction Award?


MR SCHMITKE:  Because 4.1 of the On-site Award talks about the classifications and the types of - - -


DEPUTY PRESIDENT GOSTENCNIK:  I am talking about 4.2.


MR SCHMITKE:  That is the case.  This is a clarification.  So 4.2 does apply, in fact - - -


DEPUTY PRESIDENT GOSTENCNIK:  Clarification on an absolute exclusion?


MR SCHMITKE:  It's not an absolute exclusion, no, certainly not.




MR SCHMITKE:  At the moment, there is essentially - - -


DEPUTY PRESIDENT GOSTENCNIK:  If that employer who sends the employee out is covered by the Joinery Award, how does the On-site Construction Award apply to that employer in the circumstance you have indicated?


MR SCHMITKE:  In the circumstances, it is unclear and it is unclear in terms to the sector, so again this is to - - -


VICE PRESIDENT HATCHER:  Why is it unclear?


MR SCHMITKE:  Because of the question of what is joinery work, the definition of what is joinery work and where it's performed.


VICE PRESIDENT HATCHER:  Does the work you have described fall within the coverage clause of the Joinery and Building Trades Award?


MR SCHMITKE:  It does.


VICE PRESIDENT HATCHER:  Then the exclusion of 4.2(b) then must apply.


MR SCHMITKE:  I agree.


VICE PRESIDENT HATCHER:  So what is the uncertainty?


MR SCHMITKE:  This is a clarification, this is, once again - and Mr Glover made reference to this in his evidence - there is uncertainty, he gets a lot of enquiries about this question - and we say that the best way to solve that confusion is to clarify the definition of joinery work.  So, it doesn't extend, it doesn't exclude, it just simply clarifies it.


VICE PRESIDENT HATCHER:  I just notice in the Issues document there was a submission by T Walsh about schedule - - -


MR CRAWSHAW:  Sorry, is this dealing with this topic?


VICE PRESIDENT HATCHER:  It is dealing with the issue of coverage but - - -


MR CRAWSHAW:  Okay.  I haven't finished.  Can I deal with this issue before - - -


VICE PRESIDENT HATCHER:  Yes.  Do you say there is any uncertainty or not?


MR CRAWSHAW:  We say there is no evidence of any uncertainty.  Indeed, the only evidence on this issue - - -


VICE PRESIDENT HATCHER:  It is not a matter of evidence, it is whether there is any textual uncertainty.


MR CRAWSHAW:  No, because if you go to - well, Mr Schmitke agreed that there wasn't any uncertainty at one point, but if you go to - so there's the exclusion in subclause 4.2 of the Construction Award, so you've then got to go to the coverage clause of the Joinery and Building Trades Award and, in particular - and Mr Maxwell took Mr Glover to this - subclause 4.8 refers to the following industries, including joinery work, and the definition of "joinery work" in the definitions clause, clause 3.3, has a qualification to - - -


VICE PRESIDENT HATCHER:  Joinery work, by definition, is off-site.




VICE PRESIDENT HATCHER:  So if you do joinery work in a joinery shop then, for some reason, you have to go on site, you are no longer performing joinery work?




VICE PRESIDENT HATCHER:  With the result - what - that you fall within the On-site Award?






MR CRAWSHAW:  And 4.1(a) says that an employer who is outside the scope of clause 4.8(a), which includes joinery work, unless such employer employs an employee covered by clause 4.8(b), the employer is not covered by another modern award containing a classification which is more appropriate.  So 4.8(b) could have some role to play theoretically, but the evidence of Mr Glover, which I was going to take you to, was that it is not uncommon, that it is common for different parts of the workforce to work on-site from those off-site, so the only question that arises is, as Mr Glover says at paragraph 48, different entitlements applying depending on whether an employee is employed on or off site.  He doesn't suggest any problem akin to that suggested by the MBA's submission at paragraph - - -


DEPUTY PRESIDENT HAMILTON:  Your submission is there is no ambiguity and no problem.


MR CRAWSHAW:  No problem, but, more than that, if you introduce their definition, which, in effect, makes joinery work on-site work, it would make its way into 4.8(a) as joinery work and wouldn't be excluded or would be included in 4.1(a), which means it would, in turn, be excluded from the On-site Construction Award by virtue of that subclause 4.2 that we have asked be amended.


They are our submissions and Mr Maxwell is going to do the rest of our submissions, so could I be given leave to leave you all to it?


VICE PRESIDENT HATCHER:  Are you coming back tomorrow?


MR CRAWSHAW:  I wasn't intending to, no.


VICE PRESIDENT HATCHER:  All right.  Yes, you have leave to go, Mr Crawshaw.


MR CRAWSHAW:  Thank you, your Honour.


VICE PRESIDENT HATCHER:  Mr Nguyen, you have leave to return.  In reply, Mr Schmitke?


MR SCHMITKE:  Your Honour, essentially the cross-examination that the union made of Mr Glover, and I won't go into detail but I'll just refer you to the transcript of that section at PN2499 and PN2515.  If there is no problem, and we are simply saying it is confusing and complex, you have an experienced advocate talking to Mr Glover, experienced in the industry, to take him to 4.1, 4.8, 4.8(a), 4.1(a), 4.1, 4.8(a), 4.8(b) in order to resolve the issue.  So, if there's no issue, it's very complicated.


VICE PRESIDENT HATCHER:  I am not sure it is confusing on the text of it.  It seems to me your variation just wants to change the result.


MR SCHMITKE:  That is not the intent of the variation.  The variation is seeking to make it very clear what the existing arrangements are.


VICE PRESIDENT HATCHER:  Well, joinery work does not apply to on-site work.


MR SCHMITKE:  It does, or it can be read to be that way by virtue of the existing definition because if it is only work that is performed in a joinery shop, that's the confusion.  So, you might build a particular type of product off-site and then you go on-site simply to install it and then get off-site again, and that's the confusion, so by saying it includes on-site installation of the work performed in a joinery shop, that's the definitional change that we seek to apply and that would resolve that problem.


VICE PRESIDENT HATCHER:  If the principal purpose of employment is to work in a joinery shop, then you would be under the Joinery Award.


MR SCHMITKE:  Correct, but what I am saying is that there is some confusion in terms of when people do go on-site.


VICE PRESIDENT HATCHER:  If your principal work is to do joinery work on-site, you are covered by the Construction Award.


MR SCHMITKE:  Correct, but joinery work is defined as work in a joinery shop.






VICE PRESIDENT HATCHER:  So what's the problem?


MR SCHMITKE:  The problem is as soon as you install the work you performed in a joinery shop on-site, there is a question and confusion insofar as which award would apply.


VICE PRESIDENT HATCHER:  There are long-established principles which deal with these situations, that is, that an award usually only applies to an employee - only one award applies for an employee's employment and if they do a mixture of work across two awards, you apply the principal purpose test.


MR SCHMITKE:  Yes, I accept that.  We are not seeking to undermine or disturb any of the existing arrangements, we just simply want to make it clear that definition of joinery work allows employees to perform that work off-site.


DEPUTY PRESIDENT HAMILTON:  I think we are going around in circles here.


VICE PRESIDENT HATCHER:  That's right.  You have made your point.  All right, random issues, Mr Schmitke?


MR SCHMITKE:  Random issues - - -


MR MAXWELL:  Sorry, your Honour, I don't wish to delay the proceedings, but I think your Honour did refer that there was another submission in this section, Mr Walsh's submission.


VICE PRESIDENT HATCHER:  Mr Walsh, yes.  Does anybody wish to be heard in support of that submission?  No?  In that case, there is no need for reply submissions, apart from what has been put in writing.  Mr Schmitke?


MR SCHMITKE:  Thank you, your Honour, I will be very quick here.  The rest of the matters that I am going to address in this section are essentially clarification matters.


The first matter that I would like to deal with involves a clause regarding the calculation of a mobile crane allowance.  That is dealt with in paragraphs 14 to 15 of our submissions.  The nature of the concern that we raise is with respect to the particular rate that is referenced with respect to the calculation of the particular allowance and the formula that is applied.


This has been a matter that we have previously raised before the Commission in front of Watson SDP.  The decision reference and the comments of his Honour are contained at item 8.3 on page 14.  Essentially, he decided that there was a way to calculate the rate and that was with reference to the hourly rate in accordance with clause 13.2.  The change that we seek is simply to insert his Honour's clarification into the award so that it is abundantly clear to the sector and that there is no confusion.


VICE PRESIDENT HATCHER:  All right.  Perhaps I will go straight to Mr Maxwell.  Is this opposed, is it?


MR MAXWELL:  It is opposed because we say it is not necessary.  Also, if you look - - -


VICE PRESIDENT HATCHER:  It may not be necessary but does it change the effect of the award?


MR MAXWELL:  It does because clause 13.2 doesn't deal with the wage rates for the mobile crane drivers.  Clause 13.2, in my version of the award, I think, relates to part-time work.


VICE PRESIDENT HATCHER:  Is that the right reference, Mr Schmitke?


MR SCHMITKE:  I am quoting from his Honour's decision which specifies that particular outcome.  The reason for the reference to calculating part-time rate is simply because that's a mechanism within the award which is the best one to point to to determine how a particular rate might be calculated in the absence of any other guidance.  So, essentially, the way you calculate a part-time rate for classifications that might ordinarily be defined weekly or allowances that might be applied weekly is you refer it back to that provision.  I think he simply says that's the same way in which you calculate this particular allowance.


VICE PRESIDENT HATCHER:  I just don't see the connection.  Can you explain that?


DEPUTY PRESIDENT GOSTENCNIK:  "Standard rate" is defined, is it not, in the award?


MR SCHMITKE:  Sorry, your Honour?


DEPUTY PRESIDENT GOSTENCNIK:  The standard rate is defined in the award.  It means either the weekly or hourly rate as stated for the level 3, blah, blah, blah.


MR SCHMITKE:  Yes, that is the case, but the mischief, I suppose, was that the particular provision was, in fact, originally enlivened when we sought to vary clause 19.5 to work out what the standard hourly rate might be for this particular provision, and the result of that was that his Honour said, "No, no, no, it's the weekly rate", so in order to take the weekly rate to establish what it would be for an hourly purpose, you should have regard to that particular provision, the hourly rate in accordance with clause 13.2.


DEPUTY PRESIDENT HAMILTON:  If it's already decided, why do we need to vary the award?


MR SCHMITKE:  Essentially, it was an issue which we advanced in front of Watson SDP to say that there was some confusion about that and that it required resolution.  Whilst he resolved the matter, it doesn't necessarily translate to the award.


VICE PRESIDENT HATCHER:  So is 19.5 an hourly or a weekly allowance?


MR SCHMITKE:  It's a weekly.  Well, it essentially talks about 2.4 per cent of the weekly standard rate.


DEPUTY PRESIDENT HAMILTON:  And the weekly standard rate, is that rate described for the week for a level 3 employee in 19.1?


MR SCHMITKE:  Yes, it is.


MR MAXWELL:  Your Honour, perhaps if I may assist the Commission on this point.  We oppose it, but due to the time constraints of writing submissions, but a very simple solution to this would be to add that the mobile crane adjustment formula - - -


VICE PRESIDENT HATCHER:  What are we solving?


MR MAXWELL:  The perceived problem of Mr Schmitke, and that is how the mobile crane adjustment allowance should be put into the hourly rate.  If you look at - the mobile crane adjustment formula only applies to crane drivers and their operators that are on a weekly hire, so if the - - -


VICE PRESIDENT HATCHER:  But does it result in an hourly incremental allowance or a weekly allowance?


MR MAXWELL:  It's a weekly - it's a payment of a weekly amount.  So, if that weekly amount in 19.5 was referenced in clause 19.3(b), so it's then included in the calculation of the hourly rate based on adding all the weekly amounts and then dividing by 38, that would be a cleaner way of addressing the concerns of the MBA.


MR SCHMITKE:  I understand that that was a position that Mr Maxwell advanced in the context of this earlier matter before His Honour Watson DP, but I think the other thing that is worth bearing in mind is that this particular formula refers to things that are going to change in a practical sense.  So, it essentially says that for each additional 40 tonnes over a maximum lifting capacity of 100 tonnes, an amount of 2.4 per cent of the standard weekly rate must be added to the base rate.  You might have that going up 40 times over the base rate on one day, it might be 80 tonnes the next day, so, there's a necessity to look at it from an hourly perspective.


VICE PRESIDENT HATCHER:  Well, you divide it by 38, don't you?


MR SCHMITKE:  That is exactly what we would like, which is to clarify that the standard rate or the rate is divided by 38 and multiplied by the number of actual - - -


DEPUTY PRESIDENT GOSTENCNIK:  Doesn't that happen at the end?  You add it first, it becomes then the adjusted rate in 19.3(b), you add up all those amounts and then you divide it to get the hourly rate.  Isn't that the way it's supposed to work?






MR SCHMITKE:  We simply just want the clarification by adding into that particular clause how to calculate an hourly rate and we do so with reference to the findings of Watson SDP.


DEPUTY PRESIDENT HAMILTON:  Why would you use 13.2 when 19.3(b) refers to how the hourly rate will be calculated?  Surely that's the cleaner way to do it.


MR SCHMITKE:  It might be the cleaner way.  However, there is always a nuance, and we are going to get to, I think, 19.3(a) and 19.3(b) later on in these proceedings, but suffice to say that, to the extent possible, we think it is cleaner to refer back to the method used to calculate a part-time rate.


DEPUTY PRESIDENT HAMILTON:  Well, (b) doesn't have a method, 13.2 does.




DEPUTY PRESIDENT HAMILTON:  How else could you do (b) but divide by 38?


MR SCHMITKE:  Well - - -




MR SCHMITKE:  There is no other way to do that, but there is contention in the sector about - - -


DEPUTY PRESIDENT GOSTENCNIK:  Helpfully it tells you that at the bottom:  "And divide the total by 38."


MR SCHMITKE:  I am sorry, your Honour?


DEPUTY PRESIDENT GOSTENCNIK:  Helpfully, 19.3(b) tells you at the bottom of it - - -


MR SCHMITKE:  Yes, your Honour.


DEPUTY PRESIDENT HAMILTON:  Doesn't that meet your concerns?


MR SCHMITKE:  Well, there's always this issue we have in terms of daily hire, weekly hire and the calculation of the rate of pay for the purpose of base rate of pay for the purposes of that particular classification, or not that classification but its impact and interaction with the casual provisions and the base hourly rate for casuals.  I would suggest to you that there is a benefit in referring back to the part-time provision, as we would seek, rather than any other provision.


DEPUTY PRESIDENT GOSTENCNIK:  But wouldn't it work this way, that on a given day - put aside whether the person is casual or daily hire - if they are operating a mobile crane and on that day the (indistinct) exceeds the provision, then the weekly rate for that classification with the standard rate, an amount of 2.4 per cent is added to that, that becomes the minimum weekly wage for the purposes of 19.1, you add up all the other things that would be payable on that day to that person and then you divide the figure by 38 and that would give you the hourly rate for that day.  Granted the hourly rate for the next day might be different.


MR SCHMITKE:  Your Honour, I take your point.  I suppose there is always, as I said, contention and there's a particular contention with respect to which rates are all purpose and so on and so forth, so that is why we would seek it just be referred back to the part-time provision.


DEPUTY PRESIDENT HAMILTON:  I think you have made your point and I think we are going in circles again.


MR SCHMITKE:  The next item we seek to address is with respect to the piece rate provisions in the On-site Award.  This is a very simple matter.  The piece rates provision contains, at the moment, a provision that requires that if you are entering into a piece rates arrangement, it needs to be done so without coercion or duress.  This is outlined on page 73 of our 2 December submission.  We just simply seek that those words be removed.  We say they are unnecessary in the context of this particular proceeding and, in the context of making the award simpler, we would simply say it is unnecessary and certainly it doesn't add, it reflects common law and it's a complete replication of what the common law provides and we would just seek it be deleted.




MR SCHMITKE:  Then if I could move on to the next item, which is in relation to shift work, this is a particularly, again, difficult sort of matter to take the Commission through, but I will endeavour to do so as succinctly as I can.  Essentially what we say is that - and this is attached to our submission as attachment B, attached to the submission of 2 December.


VICE PRESIDENT HATCHER:  Which clause in the award?






MR SCHMITKE:  There is a history in terms of the way in which shift work has been performed in the sector.  It is long and torturous.  Suffice to say that we would say as a result of the award modernisation process, there was a gap in terms of the shifts created and this is because the shifts in the past were defined with reference to when they finished rather than when they started.  That was addressed and, as a result, we say it left a gap in between a shift that would now commence between 11 pm and 4.30 am.  We therefore seek to insert into the award a definition of early morning shifts provides a 50 per cent loading, and that is consistent with how it used to be under the previous award which did cover this particular period of time.  It is simply a gap that exists.


Watson SDP, who had heard a dispute or had heard an application to fill this gap, which was in matter number [2013] FWC 4576, he effectively decided that whilst there might be a gap, there was no evidence to say that the work was actually being performed or commencing at that time.  What we would say is that the award previously, prior to it being modernised, contained a shift that covered that period, and we are not seeking to do anything other than reinsert that shift.


VICE PRESIDENT HATCHER:  What is this decision you are referring to?


MR SCHMITKE:  Sorry, your Honour, it is [2013] FWC 4576.


VICE PRESIDENT HATCHER:  It is a decision of the Senior Deputy President and you just want to do it again?


MR SCHMITKE:  Well, the decision of the Senior Deputy President made reference to an absence of a shift in that time and, in fact, specifically noted with respect to the CFMEU's application at that time to cover that gap, that it is something that should be given consideration in the context of this review.


VICE PRESIDENT HATCHER:  But, in a sense, you are being told, "Bring some evidence that this is a gap that needs to be filled."


MR SCHMITKE:  It is very difficult to bring evidence in relation to the gap because, as I've mentioned earlier, there's a lot of enterprise agreements that apply in this particular sector, but what should be obvious to the Commission and what we would say is that it had previously been covered, it is now a gap that's there, we are not proposing to do anything other than to fill that gap with the shift definition which puts back in the previous arrangements.


DEPUTY PRESIDENT GOSTENCNIK:  What were the hours of work for that shift arrangement?


MR SCHMITKE:  It would be commencing between 11 pm and finishing - or commencing between 11 pm and 4.30 am.


DEPUTY PRESIDENT HAMILTON:  Are those the words from the National Building Trades Construction Award?


MR SCHMITKE:  That was the difficulty, is that they used to define shifts with reference to when they finished rather than when they commenced.


DEPUTY PRESIDENT GOSTENCNIK:  That would be a night shift in the civil construction sector?




DEPUTY PRESIDENT GOSTENCNIK:  Which is covered.  You say there is no similar provision for the building - - -


MR SCHMITKE:  That's correct, yes.


VICE PRESIDENT HATCHER:  What is the night shift allowance?


MR SCHMITKE:  50 per cent.  It's exactly the same.


VICE PRESIDENT HATCHER:  The night shift allowance for the civil construction sector is 50 per cent?




VICE PRESIDENT HATCHER:  Is this opposed, Mr Maxwell?


MR MAXWELL:  Your Honour, we deal with it in paragraphs 246 to 249 of our written submission.  We oppose it on the basis that the matter was dealt with by Watson SDP in a further supplementary decision which the MBA have not identified and which is [2013] FWC 7478 and he rejected the MBA application in 2012 on the basis there was no evidence.  Again we have no evidence of people actually working the hours that are claimed by the MBA and we believe that's the case, but we have put an alternative position in paragraph 2.49 that the more economical way of dealing with this is just to extend the hours of the night shift.


VICE PRESIDENT HATCHER:  It is the same result then?


MR MAXWELL:  The same result.


VICE PRESIDENT HATCHER:  50 per cent loading?




VICE PRESIDENT HATCHER:  Mr Crawford, do you have a view about this?


MR CRAWFORD:  No, it's not in the civil construction sector, but there are different night shift loadings in the civil construction sector, there's a 15 per cent one, a permanent night shift rate of 30 per cent and a less than five successive shift rate.


VICE PRESIDENT HATCHER:  This is 50 per cent that is being proposed.


MR CRAWFORD:  Yes, this isn't - I am just correcting what was said before because it's not correct that the night shift rate for the civil construction sector is always 50 per cent.


DEPUTY PRESIDENT GOSTENCNIK:  So, for example, if the night shift were changed, a shift commencing after 3 pm, at or after 3 pm, it's a question of nominating the time before which that shift would need to commence?


MR MAXWELL:  That's right, your Honour, so if you changed the night shift to mean a shift commencing at or after 3 pm and before 4.30 am - - -




MR MAXWELL:  No, commencing before 4.30.


DEPUTY PRESIDENT GOSTENCNIK:  Yes, I understand that, but if you say the night shift would be one commencing after and - - -


VICE PRESIDENT HATCHER:  Can't you liaise with Mr Schmitke overnight and just give us a form of words in the morning?




VICE PRESIDENT HATCHER:  I am not detecting any substantive disagreement.


MR MAXWELL:  We will endeavour to do that, your Honour.




MR SCHMITKE:  Your Honour, the next item is in relation to overtime for trainees and apprentices.  This is again a technical drafting error.  It is dealt with on page 25 of our submission.  Essentially, there are two provisions in the On-site Award, which is clause 15.3(b) and 15.3(c), and then subsequently, at clause 31.7, a similar clause, the same type of clause.  It deals with the overtime for apprentices at 15.3(b) and 15.3(c) and overtime for trainees at clause 31.7.


We saw some utility in combining those two just for the purposes of providing some clarity and reducing the work within the operation of the instrument.  We have advanced this position on the basis that it would have no material effect.  We don't see that would have any material effect; we just think it's an exercise in consistency and would assist award users to better meet the modern award objective.


VICE PRESIDENT HATCHER:  Mr Maxwell, what is the problem with this?


MR MAXWELL:  Your Honour, in regards to this issue, the clause 15.3 was determined by the Full Bench in the 2012 Apprentices case.  Whilst we have some sympathy for the issue that is raised by the MBA, we have a concern that if it is removed from the apprentices clause in clause 15, then people may miss the provision that is contained in clause 36, and given the particular circumstances surrounding apprenticeships, we believe it's best left in clause 15.


DEPUTY PRESIDENT HAMILTON:  So there is no substantive difference between you, it's just a question of where in the award?


MR MAXWELL:  That's correct, your Honour.


VICE PRESIDENT HATCHER:  All right, the next one?


MR MAXWELL:  Sorry, your Honour, before you go on to the next one, just in regards to the piece rates issues that Mr Schmitke addressed you on earlier, we weren't given the opportunity to respond.  I just seek to rely on our written submissions at paragraph 242 in opposing it.


VICE PRESIDENT HATCHER:  If it is entered into under duress or by coercion, it's not an agreement, is it?


MR MAXWELL:  It's not, your Honour.


VICE PRESIDENT HATCHER:  There is no meaning of the word agreement which accompanies concepts of coercion and duress.


MR MAXWELL:  Your Honour, we just point out that those provisions were specifically inserted by the ARC Full Bench and are common to other piece rate clauses in modern awards.


MR CRAWFORD:  Can I just add, your Honour, that in our reply submissions, we cited a case for the horticultural industry where there was basically the same claim to remove those words or words to that effect and the claim was rejected by a Full Bench, so we would say that decision should be followed by this Full Bench.


VICE PRESIDENT HATCHER:  All right, thank you.  Alternative working arrangements?


MR SCHMITKE:  Yes, this is simply an application with respect to the Joinery Award and it is in item 4 in the determinations that we filed.  It deals with clause 31.1.  Essentially, we would say, it is a technical, on its face, clause that would require adjustment.  Essentially, it requires that there be alternative working arrangements agreed by 60 per cent of the employees.  That is a bit of an anomaly.  We seek to simply replace the 60 per cent with the word "majority".  That's the only change that we seek.


VICE PRESIDENT HATCHER:  Is there any evidence of ballots which have got, say, 55 per cent and failed for that reason?  Any evidence of that nature?


MR SCHMITKE:  If they were secret ballots, perhaps not, but I'm unsure, your Honour, I have no evidence to that effect.


DEPUTY PRESIDENT GOSTENCNIK:  Or you don't have the name of the people to count them.




VICE PRESIDENT HATCHER:  What is the history of this?  When was this made?


MR SCHMITKE:  I can't answer that question - I can take it on notice but - - -


VICE PRESIDENT HATCHER:  Mr Maxwell will tell us, no doubt.


MR SCHMITKE:  Yes, of course, but I always like to double check what he would say.  Simply, if for no other reason, we do not see why there is no reason why we just can't have "majority".  It's completely out of step, it's a bit odd.  We wouldn't see it necessarily as - we have had a look to see if we can find a basis for its existence.  We can't find that, but we just don't think that it meets the objectives and, to some extent, it is a disincentive or doesn't allow flexibility to be achieved in a workplace by having what we would see as an artificial percentage.


DEPUTY PRESIDENT HAMILTON:  Could the 40 per cent enter into an IFA to do the same thing?


MR SCHMITKE:  The answer to that question is not necessarily.


VICE PRESIDENT HATCHER:  All right.  Mr Maxwell, why is that there?


MR MAXWELL:  Your Honour, I wasn't expecting to deal with that matter next, but my understanding is that that relates back to when the 38-hour week was introduced in the National Joinery and Building Trades Products - sorry, I withdraw that.  Back in 1982, there would have been the various carpenter and joiners awards.


DEPUTY PRESIDENT HAMILTON:  Was it a costs offset?


MR MAXWELL:  It was a costs offset and it was to give the protection to the employees to ensure that it was a majority decision.


DEPUTY PRESIDENT HAMILTON:  Why a special majority?


MR MAXWELL:  I would have to take this on notice to find out, your Honour.  I can't recollect.


DEPUTY PRESIDENT HAMILTON:  I doubt if you will.  It was certainly done that way by agreement, was it?




DEPUTY PRESIDENT HAMILTON:  By agreement, no arbitration?


MR MAXWELL:  I would have to check in regard to the off-site awards.


VICE PRESIDENT HATCHER:  Clause 7.1 allows IFAs for arrangements for when work is performed.  Wouldn't that overcome any lack of majority?


MR SCHMITKE:  Except that the clause refers to "by written agreement between the employer and the employees" and it applies to ordinary hours of work.  So, essentially, this is a provision where you don't want to necessarily have individual employees operating at different times.


VICE PRESIDENT HATCHER:  So we have finished that item 6 now?  All right.  Dirty work, Mr Boanza?


MR BOANZA:  Thank you, your Honour.  The variation that we are seeking in our document dated 9 December 2016 is to simply - well, I should go back.  There was originally some thought as to whether this allowance was going to be captured by the MBA's application to rationalise allowances, but it appears after the events of this week that that particular allowance is not captured.


That allowance is in clause 22.2(h) of the current award and our complaint is, your Honour, that there is nowhere in the award a definition of what unusually dirty work is and that has created a number of difficulties for our members and I have been involved in a number of disputes.  Essentially, as the situation stands now, any employer or employee or union or employer representative can go into a worksite and make this subjective opinion of what dirty work is and make a claim for the allowance.


VICE PRESIDENT HATCHER:  What is your proposed definition?


MR BOANZA:  We have a proposed definition, your Honour, which I will find.  Our proposal is that:


Unusually dirty work is defined as a situation where the employee is required to work on a site with dirty or contaminated substances or materials not commonly found on building and construction sites, and these substances or materials not covered by any other disability allowances paid under this award.


Having said that, your Honour, we are very open to working with other parties to come up with an agreed definition if that can be done, but our point is that under the objectives of the modern award, it seems bizarre that in this day and age we have got an allowance payable to employees for which there is no definition anywhere.  That is simply our claim.


VICE PRESIDENT HATCHER:  Is that one of those things where you know it when you see it?


MR BOANZA:  I'm not too sure that if I went into a building site that I wasn't covered by three or four different allowances besides - you know, there is a sewage allowance and fumes allowance and other things in the award.


DEPUTY PRESIDENT GOSTENCNIK:  I need one of those allowances every time I enter my kids' rooms.


MR BOANZA:  As I do, your Honour.


VICE PRESIDENT HATCHER:  Mr Maxwell, what is unusually dirty work?


DEPUTY PRESIDENT GOSTENCNIK:  What you're about to do now?


MR MAXWELL:  Your Honours and the Full Bench, dirty work would be - there is no definition of dirty work that I'm aware of that has been used by the parties.  It has mainly dealt with work that is not covered by other allowances under the special rates.


DEPUTY PRESIDENT HAMILTON:  So it's substances not commonly found on a building site, which is what this proposed definition refers to.


MR MAXWELL:  No, I wouldn't say it is material not commonly found on a building site.  I think it would cover situations on a building site - I don't know - I admit I am speaking off the top of my head here - but you can have a situation, let's say, where a construction site has been affected because of high winds where there's soil and other materials that have been blown on the site.  Workers would then be required to remove that material and that may be then considered to be dirty work.


DEPUTY PRESIDENT HAMILTON:  What is your proposal?  Leave it as it is?


MR MAXWELL:  Our proposal is to leave it as it is.


VICE PRESIDENT HATCHER:  There's no enforcement cases about this allowance?


MR MAXWELL:  Not that I'm aware of where there's ever been a dispute about it.  It has normally been resolved between the parties on the ground about whether it is dirty work or not.


MR SCHMITKE:  If I might just make mention, this particular allowance was the subject of the draft or captured in our draft determination.  What I did do, and it may well be a middle ground, is I actually renamed the subclause 22.2(h) to read "Unusually dirty work to reflect the provisions" underneath.  That was done so because if we go back to clause 21.2, which is the general industry allowance, that has got a general rate to compensate for the following disabilities associated with construction work:  climatic conditions, disability of having dust blowing in the wind, brick dust, sloppy and muddy conditions, et cetera, which is, I think, some of the work that Mr Maxwell just described.  So if we at least had this subclause - - -


VICE PRESIDENT HATCHER:  That would be usually dirty work.


MR SCHMITKE:  Yes, as opposed to unusually, yes.


VICE PRESIDENT HATCHER:  Mr Maxwell, on your proposal for an optional roll-up of allowances, was this included in that?


MR MAXWELL:  Yes, it was.  Sorry, I had better check that, your Honour, but I believe it was.


VICE PRESIDENT HATCHER:  Anything else on this issue?  Mr Crawford?


MR CRAWFORD:  I was just going to mention, your Honour, that we did propose an alternative definition at paragraph 130 of our reply submissions.  The definition was basically just linked to duties that involve an employee being exposed to dirtier conditions than they would ordinarily experience in their regular duties.


VICE PRESIDENT HATCHER:  That doesn't really add much, does it?


MR CRAWFORD:  I thought it did.


DEPUTY PRESIDENT HAMILTON:  That would be dirty work, not unusually dirty work.


VICE PRESIDENT HATCHER:  Can I indicate we intend to sit until 4.15 and, unless anyone objects, we will commence at 9 am tomorrow.  All right, can we move on to the next issue, tool and employee protection allowance.  Ms Adler?


MS ADLER:  Yes, your Honour, thank you.  We have a proposed variation in relation to clause 20.1(a) and that proposed variation is attached to our December submission at attachment I.  What we propose would have two effects.  Firstly, it would place a positive obligation on an employee to provide and maintain tools and protective equipment in order to receive the allowance, and the second aspect is that it would expressly provide that the allowance will not be paid to an employee if the employer provides all the tools and protective boots.  The additional words that we propose to add to clause 20.1(a) would read:


The allowance would be payable except where the employer provides the employee with all tools and protective boots necessary to carry out the work or if the employee fails to bring tools to work or to maintain tools so they are safe and suitable for use.


There are four reasons why we say the Commission should grant our variation.  The first is that we say the allowance is an expense related allowance so should only be payable where there's an expense incurred on behalf of the employee.  In saying that, I would note that the allowance is located within the award in the section entitled "Expense related allowances" in clause 20.1 and that, further to that, it is adjusted in accordance with clause 20.4, which talks about adjustments of expense related allowances.


I would also say that the other allowances outlined within clause 20 are only payable where the expense is incurred, so the current operation of clause 20.1(a) differs from the other allowances within that clause.


We also outline in our written submissions the history associated with this allowance.  We say that it was considered as a reimbursement for an expense historically.




MS ADLER:  Sorry, in our written submissions.  It is at section 5 of our written submissions.  Specifically sections 5.3 and 5.4, which is pages 31 and 32 of our written submissions, set out that history.  There are, I guess, three things I would highlight to the Bench arising out of those written submissions.


Firstly, our interpretation of the history indicates that the provision hasn't been dealt with since at least 1983 and, at that time, it was clear that the allowance was one directed at the reimbursement of an expense.  Secondly, we would submit that the purpose and intent of the tool allowance was not considered during award simplification or award modernisation.  Finally, we deal with the decision during the two-yearly review in the written submissions and our submission is that that decision did not properly comment on or consider the proper construction or the purpose of the allowance.


Our survey does deal with this issue.  We asked members if they provide tools to their employees.  That is dealt with at question 30.


VICE PRESIDENT HATCHER:  Did it ask it with respect to trades people specifically?


MS ADLER:  It just said:


Do you provide your employees with all the tools and protective equipment necessary to carry out the work?


It was a "yes" or "no" question and there was an opportunity to provide other responses.  The result of that was that 52 per cent said that, yes, they did and 36 per cent said, no, they didn't, and there's a range of, I guess, variations on a theme outlined in the comments.  We say that on the basis that in order for the allowance to truly be an expense related allowance, our variation be adopted.


VICE PRESIDENT HATCHER:  What page is the individual responses of the survey?


MS ADLER:  Page 43 of 45.  I think what comes out of those responses is that a one size fits all approach doesn't necessarily apply and the way that the provision is currently drafted, for those who are entitled to the allowance, it is payable irrespective of the individual circumstances of that business, or what, if any, tools are to be provided.  So we are not taking away an entitlement for those employees who provide their own tools, it is simply ensuring that the provision is operating in the way that we say it was intended to, which is to be an expense related allowance.


VICE PRESIDENT HATCHER:  How does it work where a lot of these answers suggest it's an intermediate position, that some tools are provided, some tools aren't, some bring their boots but no tools, some bring tools and no boots?


MS ADLER:  I guess we would have to read that within the context of how the provision operates and the list of things specified within the clause, and I guess that's as far as I could take it, but, like I said, I think the prescription within the current provision doesn't accommodate the variability in what actually happens on the ground.


VICE PRESIDENT HATCHER:  The award clause doesn't actually, except in relation to the exclusions, specify what tools you actually have to bring.




VICE PRESIDENT HATCHER:  And it says it doesn't include various tools described in (b), but, in terms of getting the allowance in (a), it doesn't say what, if any, tools you actually have to bring.


MS ADLER:  Yes, your Honour.




MS ADLER:  I don't know if that was a question or a statement, your Honour.


DEPUTY PRESIDENT HAMILTON:  I am asking you is there anything else?


MS ADLER:  Oh, any responses.


VICE PRESIDENT HATCHER:  Only that insofar as you want to make it a provision which says that you don't get the allowance unless you bring the tools, that begs the question "What tools?"


MS ADLER:  What the tools are, yes, your Honour.  I would submit that they would be the tools of the trade of those trades persons listed in the classifications in order to perform their job.


DEPUTY PRESIDENT GOSTENCNIK:  For example, in relation to a bricklayer, the allowance of $21.61 is payable or, alternatively, the relevant tools are those set out in (b)(i)?  Is that right?  Sorry, they are the excluded tools.


MS ADLER:  Yes, they are.  We would say that the tools of the trade required by a bricklayer, if they bring those to the job, then they should be reimbursed for the costs associated with those tools, whereas if the employer provides whatever is necessary for that bricklayer to do their job - - -


VICE PRESIDENT HATCHER:  So what does a bricklayer need to have?


DEPUTY PRESIDENT GOSTENCNIK:  And if a bricklayer brings half his or her tools?


MS ADLER:  Well, I don't know that there would be a circumstance where a bricklayer would bring half their tools.


DEPUTY PRESIDENT GOSTENCNIK:  They don't have to bring a wheelbarrow (indistinct) plenty of circumstances.


MS ADLER:  I don't know, your Honour.  The amount of times  that I've been on site laying bricks is not many.  I know that doesn't assist.


VICE PRESIDENT HATCHER:  But, seriously, don't they have a barrow to move bricks on?


MS ADLER:  A wheelbarrow?






VICE PRESIDENT HATCHER:  I am just curious, is that a tool that they would have to bring to earn the allowance?


DEPUTY PRESIDENT HAMILTON:  So some employers provide full tools and also pay the allowance?




DEPUTY PRESIDENT HAMILTON:  Why?  Why do they do that?


MS ADLER:  Because they are required to under the award.






DEPUTY PRESIDENT HAMILTON:  But why would they provide tools if they also have to pay the allowance?  I don't understand.  It may be specialist tools, perhaps, I suppose.


MS ADLER:  Well, because they are a carpenter themselves as the employer and they have those tools and they provide them for use to their employees.


DEPUTY PRESIDENT HAMILTON:  All right, thank you.


VICE PRESIDENT HATCHER:  If you are in a city construction project and your workers are getting in on public transport, the ability to carry tools with them, particularly if it's a wheelbarrow with pneumatic tyres, would be difficult, I assume.


MS ADLER:  Yes, your Honour, it would be.  In those circumstances, I imagine there would be a place to house the tools at the site and, in those circumstances, again, I wouldn't want to assume, but I would suspect an employer would provide those tools as they would remain on site.




MS ADLER:  There is nothing further, your Honour.


VICE PRESIDENT HATCHER:  Does any other employer want to say anything about this?  No?  Mr Maxwell?


MR MAXWELL:  Thank you, your Honour.  Your Honours and Commissioners, we oppose this variation.  We deal with it in paragraphs 232 to 239 of our written submission.  We say that the only evidence that employers provide tools is the HIA survey.  Just in regard to that HIA survey, we have already pointed out that a number of the respondents to that survey say they are not covered by the Construction Award and when you look at the responses contained on pages 43 to 45, not many of them seek to deal with tools.  A lot of them deal with PPE and with the provision of boots, and clearly the provision of boots isn't what the tool allowance is paid for.


VICE PRESIDENT HATCHER:  What paragraphs of your submission was it?


MR MAXWELL:  This is in paragraphs - - -




MR MAXWELL:  From page 87 through to page 90.


VICE PRESIDENT HATCHER:  What is the allowance actually for in the first place?


MR MAXWELL:  The allowance is paid to trades people for the provision of tools and the maintenance of their toolkit, so it's not something where you pay just for the tools they may use on a particular day, it is for having a range of tools in a toolkit and maintaining that toolkit.


VICE PRESIDENT HATCHER:  So if there's a case where a trades person is not required to provide them and the employer provides everything, why would you get the allowance, or do you just say that never happens?


MR MAXWELL:  To take one step back, in terms of the nature of employment in this industry where people go from job to job and employer to employer, the tool allowance is actually part of your hourly rate, so it's part of the all-purpose rates of an employee.  If they go onto the site where the employer provides the tools - and, to be honest, we are unaware of any site on-site where the employer provides all the tools required - whilst they may - if they didn't receive the allowance then, then they would have less money over the year to maintain their tools, so therefore it is a reduction of their overall entitlement.


As we say, we are unaware of any real evidence of an employer employing a person on-site that provides all their tools.  The only exception to that would be to an apprentice because there is normally an obligation on the employer to provide the toolkit for an apprentice when they start.


VICE PRESIDENT HATCHER:  Do employers typically define what tools they expect to be provided?  Is there something which sets out what any given trades person is expected to bring with them?


MR MAXWELL:  In some States there is actually a list of those tools to be provided to an apprentice which are expected to be part of a trades person's toolkit.


DEPUTY PRESIDENT GOSTENCNIK:  If we go back to a small business that HIA might represent, a contractor, a small bricklaying contractor might be constituted by himself or herself as the principal and one other bricklaying employee and, as part of the business, they buy a van and a bunch of tools and there's a bricklaying job to be done and he sends his employee in the truck/van with all of the tools to the job to undertake bricklaying.  What tools does that employee in that circumstance have to maintain?


MR MAXWELL:  In that hypothetical circumstance, which we submit - - -


DEPUTY PRESIDENT GOSTENCNIK:  I suspect it's more than hypothetical.


MR MAXWELL:  Your Honour, I beg to differ.  In terms of my experience of the building industry, that is very rare.


DEPUTY PRESIDENT GOSTENCNIK:  In the domestic housing industry.


MR MAXWELL:  In the domestic housing industry and in all other sites.


DEPUTY PRESIDENT GOSTENCNIK:  I am happy to compare our experiences.


MR MAXWELL:  A trades person's tools are the tools of their trade.  They are the tools that they are expected to have with them wherever they go to do a job.


DEPUTY PRESIDENT GOSTENCNIK:  And this person does, he has his employer's tools and he's gone off to the job.


MR MAXWELL:  In our experience, the tools that are provided by the employer are not necessarily of the standard that a trades person would - sorry, I withdraw that.  There are always issues with tools that are provided about whether they are up to the job required, then there are issues about what happens when the tools break and when the tools become blunt in terms of a carpenter, and if tools are stolen, who is liable for the theft.  Our view on this clause is that it would create disputation in the industry over whether the tools are adequate for the job and, as we say, when you look at the responses to the HIA survey, most of them deal with protective equipment, they don't deal with tools.


VICE PRESIDENT HATCHER:  Their response is persons who answered "other", I think, isn't it?  Is that right, Ms Adler?


MS ADLER:  Yes, your Honour.


VICE PRESIDENT HATCHER:  They are not responses given by those who answered "yes" or "no".


DEPUTY PRESIDENT HAMILTON:  Where is the provision which requires a bricklayer to provide his or her own tools for receipt of the tool allowance?  Where is that in the award?


MR MAXWELL:  This is not within the award, but the way, I suppose, the industry is operated and, if need be, I can refer to previous decisions where the issue was resolved, but a trades person is expected to have the tools of the trade required by them to perform their work.  That is why they are paid the tool allowance and that is why it is part of their ordinary hourly rate.


DEPUTY PRESIDENT HAMILTON:  Aren't apprentices subsidised to buy a box of tools, or they used to be?


MR MAXWELL:  It depends on the award.  In some States - - -


VICE PRESIDENT HATCHER:  Sorry, a Commonwealth subsidy, I think it was.


MR MAXWELL:  There was a Commonwealth subsidy for tools of the trade, which I believe no longer exists, but there was a subsidy.  In Queensland, there is a provision of tools general order which put an obligation on the employer to provide the tools for apprentices.


DEPUTY PRESIDENT HAMILTON:  All right.  You agree there is no obligation in the award to provide tools, but you say it has got a wider scope than simply an expense related?


MR MAXWELL:  Yes, and we also rely on the fact that this matter was dealt with in the 2012 Award Review by Watson SDP, who rejected a similar application by the HIA.  That is our submission.


VICE PRESIDENT HATCHER:  Anything brief in reply, Ms Adler?


MS ADLER:  Only to say that I would urge the Bench to take a cautious approach when Mr Maxwell makes submissions about his experience of the industry, particularly on non-unionised residential construction sites.  Mr Maxwell also made the submission that it is expected in the industry and the question that comes to my mind is "Expected by who?"  and some sort of broad industry kind of understanding or agreement as to how this provision works eludes me.  That is all I would say in response.


VICE PRESIDENT HATCHER:  We will now adjourn and resume at 9 am tomorrow morning.

ADJOURNED UNTIL WEDNESDAY, 12 APRIL 2017                   [4.13 PM]



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