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TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009                                       1055690

 

VICE PRESIDENT HATCHER
DEPUTY PRESIDENT BOOTH
COMMISSIONER CAMBRIDGE

 

AM2014/286

 

s.156 - 4 yearly review of modern awards

 

Four yearly review of modern awards

(AM2014/286)

Supported Employment Services Award

 

Sydney

 

10.07 AM, THURSDAY, 15 FEBRUARY 2018

 

Continued from 14/02/2018

 


PN4905    

VICE PRESIDENT HATCHER:  I understand there is one additional appearance.  Mr Wilson, you're going to appear on your own behalf and make submissions, is that correct?

PN4906    

MR WILSON:  Yes.  Yes, thanks, your Honour.

PN4907    

VICE PRESIDENT HATCHER:  Sorry?

PN4908    

MR WILSON:  Yes.

PN4909    

VICE PRESIDENT HATCHER:  Yes, all right.  Have the parties determined an order of submissions?

PN4910    

MR HARDING:  Yes, we have, your Honour.  What we are proposing is that my client go first, followed by the HSU, and then United Voice, with Mr Wilson and then followed by the employee parties, commencing with ABI.

PN4911    

VICE PRESIDENT HATCHER:  All right.  But I think, Ms Zadel, you have to make your submissions today, is that right?

PN4912    

MS ZADEL:  Yes, I'm unavailable tomorrow, so yes.

PN4913    

VICE PRESIDENT HATCHER:  So will the order of submissions accommodate that?

PN4914    

MR HARDING:  I'm sure they would.

PN4915    

MR WARD:  What we might do is, after I finish we'll let Ms Zadel go straight away.

PN4916    

VICE PRESIDENT HATCHER:  Right.

PN4917    

MR BULL:  I have a problem tomorrow morning in that I've got to be elsewhere.

PN4918    

VICE PRESIDENT HATCHER:  Sorry?

PN4919    

MR BULL:  I've got a problem tomorrow morning.

PN4920    

VICE PRESIDENT HATCHER:  You've got a problem tomorrow morning?

PN4921    

MR BULL:  Yes.

PN4922    

VICE PRESIDENT HATCHER:  Yes, all right.  Well, let's go.  So, Mr Harding?

PN4923    

MR HARDING:  Your Honour, perhaps if I can start by handing up some documents as I endeavoured to yesterday.  There was a number of documents that Mr Cain referred to in his cross-examination and I'll just hand those up now.  I've had a conversation with my friend and they're not objected to.

PN4924    

VICE PRESIDENT HATCHER:  So you tender these, Mr Harding?

PN4925    

MR HARDING:  I do.

PN4926    

VICE PRESIDENT HATCHER:  The article connecting employers with people who have an intellectual disability, by Richard D. Luking will be marked as exhibit 179.

EXHIBIT #179 ARTICLE BY RICHARD LUKING RE CONNECTING PEOPLE WITH DISABILITIES TO EMPLOYERS

PN4927    

VICE PRESIDENT HATCHER:  And the document entitled, "Employing people with intellectual and developmental disabilities, report by the Institute for Corporate Productivity", will be marked exhibit 180.

EXHIBIT #180 DOCUMENT ENTITLED "EMPLOYING PEOPLE WITH INTELLECTUAL AND DEVELOPMENTAL DISABILITIES, REPORT BY THE INSTITUTE FOR CORPORATE PRODUCTIVITY.

PN4928    

MR HARDING:  Your Honour, if I could hand up another document which is a table, and I'll provide a copy to our friends.  In opening, your Honour, I identified a number of the assessment tools in clause 14.4(b) that were no longer relevant and that row can be deleted by consent.  This table expands upon that by indicating two things, which of the tools there had been a submission in support of, and/or evidence supplied in support of.  Can I just indicate there's an error in the fourth column referable to the SkillsMaster wage assessment tool.  I am instructed that a submission has been filed but not evidence, so the cross can come out of the "Evidence" column.  And then you will see about half way down, starting with "Waverley Helpmates",

PN4929    

no submission has been filed in respect of those tools.

PN4930    

VICE PRESIDENT HATCHER:  Didn't we have some evidence about the Mai-Wel assessment tool with Mr Rohr?

PN4931    

MR HARDING:  Yes, of course.  That needs to be amended.

PN4932    

COMMISSIONER CAMBRIDGE:  I see, there should be a cross in that.

PN4933    

MR HARDING:  There should be a cross, cross-examined Mr Rohr about it.

PN4934    

VICE PRESIDENT HATCHER:  And BlueLine?

PN4935    

MR HARDING:  Yes.  And yes, BlueLine.

PN4936    

VICE PRESIDENT HATCHER:  Anything else?

PN4937    

MR WARD:  Sorry, your Honour, I think Mr Packard's evidence wasn't the subject of cross-examination and relates to the Valmar Support Services wage system.

PN4938    

VICE PRESIDENT HATCHER:  So whose evidence?

PN4939    

MR WARD:  Packard.  Hugh Packard, yes.

PN4940    

VICE PRESIDENT HATCHER:  That was Valmar, was it?

PN4941    

MR HARDING:  Yes.

PN4942    

VICE PRESIDENT HATCHER:  That was the evidence?

PN4943    

MR HARDING:  That was the evidence.

PN4944    

VICE PRESIDENT HATCHER:  Yes, all right.

PN4945    

MR HARDING:  With those corrections I think that there doesn't seem to be any contention anyway, in relation to those that haven't filed any submission for attention.

PN4946    

VICE PRESIDENT HATCHER:  Yes, all right, thank you.

PN4947    

MR HARDING:  Thank you.  Your Honours and Commissioner, perhaps if I can start with the ABI tool and work my way through from that point.  Mr Ward opened ABI's case on Monday of last week by telling the Full Bench that the motivation that ABI had in proposing the tool that it did, or has, is that it wants the actual work in ADE's examined and valued in an attempt to start a process of stabilisation.  He also went on to talk about at PN262, urging the Full Bench to value the work on proper principles.  The submission of ABI relies on section 156 sub-section 3 of the Act which restrains the Commission from varying modern award minimum rates unless there are work value changes of the kind identified in sub-section 4.  That's where we started when the case began on Monday last week.

PN4948    

On Tuesday this week Mr Zevari conceded that the ABI tool is a bad individual assessment and there was a - - -

PN4949    

MR WARD:  I'll be correcting that.  That was in error.  I will be correcting that.

PN4950    

VICE PRESIDENT HATCHER:  That's all right.  You don't need to remind us.  You can just do that when you get to your feet.

PN4951    

MR WARD:  Yes.

PN4952    

MR HARDING:  So there might be a correction.  Notwithstanding the concession it plainly is about individual assessment.  And that is plain from the way in which the classification descriptors described in annexure A of the proposal.  Level A, for instance, is in the chapeau to the classification, it tells us that an employee at this level has rudimentary basic skills.  It is referring to the individual.  And therein that assessment is conducted on a number of criteria, only one of which, the last, is referable to the performance of work.  That way of describing the classifications continues all the way through them up to level D.  Then in Annexure C, at c.1, there's a very long description of what are said to be indicative tasks in the second and third sentence of that paragraph:

PN4953    

In many cases it's said employees with a disability can carry out only some tasks of a whole duty.

PN4954    

There has been a lot of evidence about this concept of a task versus a duty.  But there in my submission has not been any proper identification of what a "duty" is, as distinct from a "task", other than the evidence of Mr Christodoulou, which seems to be predicated on the notion that if an employer has an expectation of work through perhaps a job description, that that can be the basis upon which modern award wages are paid.  Well, they're not.  Wages are paid for the performance of work.  That is the way in which the award operates.  There is a fundamental misconception lying at the heart of this proposal that a duty statement that an employer may have represents the basis upon which minimum award wages would be payable.

PN4955    

Minimum award wages are payable for the work required of the employee at the time it's performed, not on the basis of some possible work that might be performed or might not be in the future.  That misconception is apparent in c.1.

PN4956    

It gets worse because the c.1 in the second last sentence says:

PN4957    

Each employer will hold a register of tasks relevant to their enterprise which are consistent with the definitions below.  These tasks were reviewed from time to time by the employer.

PN4958    

The way I read that is that the tasks are entirely hypothetical or theoretical, at least for the purposes of award valuation.  In the end an employee might have a variety of tasks and classify the employee according to a classification system for work they may never ask that employee to perform.

PN4959    

VICE PRESIDENT HATCHER:  So you just take a step back to what I understand to be the basic concept of the ABI proposal and that is this, that the current award effectively outsources the determination of wages to a variety of tools which I think the evidence fairly clearly shows, produced different results.

PN4960    

MR HARDING:  Yes.

PN4961    

VICE PRESIDENT HATCHER:  So the starting point of the ABI proposal seems to me to be that perhaps we should move away from that approach and move to the more usual approach where the award itself prescribes in some way what the wage to be paid is for the work performed.

PN4962    

MR HARDING:  I understand that that's his proposal, but the problem with that proposal, your Honour, is that the proposal is not a work value proposal.

PN4963    

VICE PRESIDENT HATCHER:  I understand you've made that point but if – do you see any benefit in the award being modified to go down a more traditional path, that is, to actually prescribe as a percentage of a full award wage, what the percentage is to be for work of a given value?

PN4964    

MR HARDING:  No.  And I'll explain the reasons why.

PN4965    

VICE PRESIDENT HATCHER:  All right.

PN4966    

MR HARDING:  In fact, I might turn to that now, your Honour, because I think the point you raise is of great significance to the case that the AED presents.  The fundamental proposition put by AED is that the modern award has already dealt with the valuation of the work, and that the tasks that it identifies in schedule 2 in schedule B of the award already do the job.  And accordingly there is no need for a separate classification system for employees with a disability.  That's linked to the concept that the SWS then takes that value as declared by the Commission in schedule B and then assesses the individual and their output and then allocates the value according to the output of the employee, on the same basis, we say, as it would be applied to a person without a disability who has output that is equivalent to the award wage.  And in that sense there's a comparability between the two individuals for which award wages are paid.

PN4967    

If I can take you to schedule B to illustrate that point - - -

PN4968    

VICE PRESIDENT HATCHER:  Schedule B of what?

PN4969    

MR HARDING:  The award.

PN4970    

VICE PRESIDENT HATCHER:  Yes.

PN4971    

MR HARDING:  Which starts on page 35.  The first point to illustrate about the award is that grade 2 represents, apart from the training grade, the base level of very basic tasks that an employer could require an employee to perform in order to generate the wage.  And you'll note B.2.1:

PN4972    

An employee who has completed at least three months structured change so as to enable them to perform work within the scope of this level.

PN4973    

That is the point of distinction that I averted to earlier in relation to Mr Christodoulou's evidence.  This is not about the expectation of some future performance, this is about the actual performance.  And then there's in B.2.3, a number of indicative tasks and it's described in the award as "tasks."  And so they are.  The indicative tasks have a heading, such as, for instance, "Clerical support, at the bottom of page 36 and they describe a range of tasks which conclude with "and/or."  Likewise, "Timberwork", has a list of tasks.  In the penultimate dot point there's an "and/or."  Thus on the plain reading of the award, if you perform the task of sorting or packing, and only the task of sorting or packing, you are entitled to the full award rate if you are a person without a disability within the definition of the award.

PN4974    

VICE PRESIDENT HATCHER:  Normally if you saw something like this in another award, whether or not the employee was doing all the indicative tasks within a given area of work, it's implicit, is it, that the employer could, subject to the provision of training, require them to perform any of those tasks - - -

PN4975    

MR HARDING:  Yes - - -

PN4976    

VICE PRESIDENT HATCHER:  And expect that they could be performed?  If you take the clerical one, for example, if you looked at the Clerks Award it may not be the case at a given time, or even over a long period, that a person may be doing all those duties but it would be taken for granted, would it not, even if not explicitly stated, that the person is capable of doing all those duties and can be required to do so if necessary?

PN4977    

MR HARDING:  No, your Honour.  I don't think that's the way the award works.  It's not implicit in the language of the award.  What it says is, if you perform work within the scope of it then you're entitled to the rate of pay.  Now it might be in the ordinary course that a person could be expected by the employer to perform duties within the scope of all these indicative tasks with appropriate training, and of course the remedy for the employer in the event that the employee doesn't, or can't do it, is to end the employment.  But that's not required by the award.  That's in the hands of the employer.  The text of the award tells us that if you perform the work within the scope of the level then you're entitled to the award rate.  If the employer instructs a worker to perform a task within the scope of the level and accepts the work of that employee at that level, then the award rate is payable.

PN4978    

It might be the employer would like the employee to perform more than that, and if the employee can't then it has a remedy.  But if it only asks the employee to perform the task that's covered by the level then the legal obligation of the employer in that event is to pay the award rate.  That's a plain reading of the award.  Otherwise the words, "and/or", would be superflute(sic) and there would be an "and."

PN4979    

VICE PRESIDENT HATCHER:  I understand that submission as a matter of construction of the existing award but it may point to underlying problems with the way these classifications are defined.  I mean, if you look at grade 2, beyond the fact that it says it's more than grade 1, it's difficult to actually find a description that actually encaptures who is meant to be covered by grate 2.

PN4980    

MR HARDING:  Yes, well I read that as being the default classification, your Honour, which is that anyone who is not classified by the other levels falls into grade 2 if they're performing work within 30.2.2.

PN4981    

COMMISSIONER CAMBRIDGE:  But if we use that description to have had a broader application in, say, some outside industry context, and we've seen clear evidence where you can't translate that into what has effectively been a deconstructed series of tasks which have no relevance to what would be in an outside industry context.  It is an invalid comparison, isn't it?  So the benchmark is wrong.

PN4982    

MR HARDING:  No, I don't accept that, Commissioner.  I think the evidence shows that in relation to the comparison there is a direct comparison to be made between those with intellectual disabilities who work in open employment and who perform basic tasks in open employment in circumstances in which the job is made up for them and customised to deal with their particular limitations arising from their disabilities.  Certainly the submission of the ADE's is that the ADE world is so different from the rest of the world that it should be treated as an exception.  But in my submission that's not what the evidence shows at all.  When you examine the evidence what it tells us is that there are, true, a deconstruction to the extent that employees might be expected to only perform one task, or they might be expected or required to perform more than one task.  But the tasks are all described in the same terms or similar terms to those described in the award.  And there are illustrations in the evidence I can take you to, to make that point good.

PN4983    

One example that springs to mind is that – you might have heard my cross-examination of Ms Fitze yesterday in which I asked her to - questions about the types of tasks that employees in her organisation would perform.  And when I did, I read from the list of tasks under the heading, "Specialist packing", one by one, and she agreed with all of them.  They were tasks that she could expect should we require an employee to perform them.  That employee might perform one, or that employee might perform more than one.  I also asked her some questions about the tasks that appear under the "Gardening" subheading.  Basic labouring was a function that she identified as a task that she identified as a task that would be performed by an employee.

PN4984    

Now in those circumstances I don't accept that there is that much of a distinction.  True it is the work is basic.  But grade 2 is basic.  True it is that sometimes on the evidence an employee might only perform one task.  But there are examples of that occurring outside ADE's.  But in terms of open employment or – you know, one can spring – if you go an airport and there's a man who holds a sign saying, "stop", in relation to traffic as it comes up the road, that's one single function, one task that that employee is required to perform.  It doesn't matter whether it's performed in an ADE environment or a non ADE environment in order to attract the labelled work, and then to attract the operation of schedule B.

PN4985    

COMMISSIONER CAMBRIDGE:  If you use that analysis though.

PN4986    

MR HARDING:  Yes.

PN4987    

COMMISSIONER CAMBRIDGE:  You might see a subdivision again of the functions of the stop/slow technician.  That is, that in a deconstructed arrangement a particular individual would be given a task of just holding the stop sign and not making a decision as to when it should be turned to be "slow."

PN4988    

MR HARDING:  I suppose that's possible.

PN4989    

COMMISSIONER CAMBRIDGE:  That's the sort of thing that – I think there's evidence, and certainly we saw plenty of this, of that sort of subdivision, or deconstruction if that's the right word, of the very basic tasks that are identified at, say, the grade 2 level.

PN4990    

MR HARDING:  The evidence that was contained in the witness statement and I can take you to some of those as an illustration, contains lists of tasks said to be performed in an ADE environment and those tasks in most cases correspond with a task in the award.

PN4991    

VICE PRESIDENT HATCHER:  I think what's been raised with you is that if the award classification descriptors lead to that result there may be something wrong with the descriptors.

PN4992    

MR HARDING:  I understand that contention but in my submission there isn't because the descriptors are intended to cover work at the basic level.  In other words, we're talking here about minimum rates of pay.  We're not talking about agreements, rates at a paid rates circumstance where an employer makes an assessment of what additional value might be obtained by providing higher rates of pay to employees.  These are minimum rates that represent the minimum amount that this Commission has determined ought to be paid to an employee for the work that the award covers.  At grade 2 the work is basic.  Now that's not my observation.  That's an observation made by his Honour Buchanan J in the Nojin case.  I can hand up a copy of the Nojin case if it would assist the Commission and there's a couple of paragraphs that I want to refer to.

PN4993    

VICE PRESIDENT HATCHER:  Yes.

PN4994    

MR HARDING:  Does the Full Bench require copies?  We've got copies, if that assists.

PN4995    

VICE PRESIDENT HATCHER:  No, I had thought it was in the materials somewhere but - - -

PN4996    

MR HARDING:  Paragraph 41 is where I want to draw your attention to.  Mind you, I might say that throughout the case their Honours refer to grade 1 of the award under consideration there.  The modern award inserts a training grade at grade 1.  As I understand the position grade 1, the considered note, is equivalent to grade 2 in this award.  And 41, his Honour Buchanan J said:

PN4997    

It might be noted at this point that testing for, measuring or assessing competence is not the same thing as testing for or measuring – assessing competencies at any given task.  The latter endeavour relates to skills and the application of those skills.  It may be expected to be reflected in some aspect of – - -

PN4998    

In some aspect of - - -

PN4999    

Or conclusion about productivity.

PN5000    

In paragraph 42 the follows:

PN5001    

However, worthwhile as such an exercise may or may not be in considering work value over a range of tasks of increasing importance, complexity or seniority on one view, the present case does not ever enter that territory, at least so far as it applies in ordinary wage fixing terms.  The present case is about the payment of a fraction only of the minimum possible wage rate in an award that is linked to the performance of the most basic tasks.

PN5002    

That's what schedule B, grade 2, is, the most basic of tasks where this Commission has said the minimum rate of pay payable for the most basic of tasks is X figure.

PN5003    

DEPUTY PRESIDENT BOOTH:  Mr Harding, can I just ask you on that very point, and really, going to the point of whether or not the descriptors in the classification structure are perfect and if not, could perhaps use a little bit of thought and revision, if you look at A.1.1, then A.1.2, it says, "An employee at this level of performance, basic routine duties essentially of a manual nature.  And the level of training then goes on, "exercises minimal judgement, works under direct supervision", et cetera, whilst undergoing structured training.

PN5004    

MR HARDING:  Sorry, Deputy President Booth, can you tell me which page you're on?

PN5005    

DEPUTY PRESIDENT BOOTH:  Sorry, I beg your pardon.  I was in the Award and - - -

PN5006    

MR HARDING:  Yes.

PN5007    

DEPUTY PRESIDENT BOOTH:  I knew you were in the award so I thought you'd be with me.  I'm on the schedule A of the SESA award classification definitions.

PN5008    

MR HARDING:  Yes.

PN5009    

VICE PRESIDENT HATCHER:  So just to repeat the – I'm drawing this to your attention and I'm going to ask you a question about it because it goes to the question of whether or not the descriptors in the current award could use some work, for whatever reason.  And if you look at A.1.2 and you see what the – I beg your pardon, I'm apparently using the exposure draft of the award and not the current award, thank you - - -

PN5010    

MR HARDING:  My copy of the award in schedule A has transitional provisions.

PN5011    

DEPUTY PRESIDENT BOOTH:  Yes.  I beg your pardon.  My question may no longer be relevant because I was looking at that.  And I was really struggling with how grade 2 helps you distinguish, actually, the work between the basic routine duties, essentially, of a manual nature, and then what would be performing work above and beyond the skills of an employee at grade 1.  That was really my struggle with just that aspect.  I mean there may be many other examples I could give but I just wondered if you'd comment on that, and now I am looking at the schedule B of the current award and not the exposure draft - - -

PN5012    

MR HARDING:  Yes.

PN5013    

DEPUTY PRESIDENT BOOTH:  It's B, rather than A.  And it seems that one is, in order to locate a person in grade 2, to be satisfied that they can perform work above and beyond the skills of an employee at grade 1.  And yet the skills of an employee at grade 1, which we understand is the training grade, are basic routine duties, essentially of a manual nature.  I'm just wondering whether you think that could be improved.

PN5014    

MR HARDING:  If your point, your Honour, is that grade 1 refers to basic duties and that grade 2 seems to imply something beyond basic - - -

PN5015    

DEPUTY PRESIDENT BOOTH:  It seems to imply that the person has got to be able to work above and beyond the skills of grade 1, and yet it also seems to imply that they're exercising the same skills that are described in grade 1.

PN5016    

MR HARDING:  Yes, but I think what that means, your Honour, is that at the training grade, at the training level, they're performing tasks consistent with it being training.  And that once the training is complete that the tasks they then performed have then assumed a different character, namely tasks one performs after one has been trained to perform them.  And in that sense it corresponds with the phrase, "above grade 1."

PN5017    

DEPUTY PRESIDENT BOOTH:  I guess – well, I - - -

PN5018    

MR HARDING:  Insofar as the language could be improved to reflect that distinction and that there might be ambiguity in the language, I accept that there's ambiguity.  But on its proper construction that must be what it's about, otherwise there would be no work for grade 1 to do as a training grade.  There has to be some work given to the concept of it being training.  And I could rarely imagine a situation in which someone is asked to do a task for the first time and they don't do it very well because they've never done it before, and the supervisor says, "No, no, you've got to do it this way, or that way, in order to perform the task that we want you to perform."  That's the application of the training.  Then after the training's complete and the employer chooses at that point to employ the person on an ongoing basis then they're no longer obliged to provide training at the level that grade 1 anticipates.  And if they continue to employ the worker to perform the tasks of grade 2, then they are entitled to a higher rate of pay, simple as that.

PN5019    

DEPUTY PRESIDENT BOOTH:  But don't we see that many of the employees who we observed in inspections and heard evidence in relation to, at grade 2, require constant training and retraining, and direction and redirection?

PN5020    

MR HARDING:  I think the evidence is that they might require, depending on the employee, redirection and direction.  And the DMI levels anticipate that.  As for constant training and retraining I think the evidence says that training is an aspect of the observations that a supervisor may make about an employee and additional training opportunities may be identified through that and further training provided.  In my submission that's qualitatively different in that it's not a situation in which an employee is constantly being retrained to perform the same task.  But there is - - -

PN5021    

DEPUTY PRESIDENT BOOTH:  And if they were being constantly retrained to perform the same task?

PN5022    

MR HARDING:  If they were in that situation and the employer keeps accepting the performance of that work then it would seem to me the problem the employer has is why are they asking that employer to perform work they simply cannot do?  And it might be that the worker is simply unsuitable for that task.

PN5023    

VICE PRESIDENT HATCHER:  They can do it provided they're given constant support.

PN5024    

MR HARDING:  But the constant support is not an aspect of value.  That in my submission is just an additional cost that these ADE's bear.  Insofar as the supervision is provided to keep the worker on track then provided that the worker is producing in the sense of providing the work at the level that the employer expects, then they are producing and the task is being performed.  It might be the case that it's being performed with help.  But the evidence in my submission doesn't go so far as to say that the supervisors are actually going to perform the task.  The evidence is the supervisors might be assisting the worker to remain on track at the coalface, and we heard evidence about workers who wander off task or who get distracted easily or who might have an episode associated with their disability which distracts them from the work.  And I accept that that's what the evidence tells us.

PN5025    

But the purpose of supervision is then to enhance the productive value of the worker by assisting them to remain at the coalface and producing, which is different from a situation in which we're essentially assuming that the supervisor is the one who's actually performing the work.  And I don't think the evidence goes so far as to say that, and in fact there was plenty of evidence to the contrary, particularly at the higher wage levels that were being discussed in some of the evidence yesterday and the day before.  So in my submission there's two things to say about that.  The first thing is that the impact of supervisory responsibility or application is covered by the Commonwealth contribution and that's a cost factor, not a work factor.  The second thing to say in relation to that is that the employer, the ADE employer, gets the benefit of the effect of needing to have additional support through the SWS assessment because on the evidence the impact of supervision is excluded from the assessment.

PN5026    

On the evidence the fact that an employee's disability manifests in an employee going off task, having episodes, wandering away and being distracted, are all things that are incorporated into the assessment of productivity.  And if therefore their output, their productive output is affected adversely by those manifestations then the employer doesn't have to pay them the full award rate.  But that's a different thing from whether they're performing the task.

PN5027    

VICE PRESIDENT HATCHER:  That ignores the basic concept of productivity which is measure output against the input.  If it's necessary to achieve the output, to have an input not just of the disabled worker but somebody providing constant supervision, as a basic measure of productivity that is different from somebody who can produce the same output without any supervision.  That is, there's another labour input going into the process by which the product is produced.  Whether it's subsidised by the government is a different question but just as a measure of productivity, that must be right, mustn't it?

PN5028    

MR HARDING:  No, I don't accept that, your Honour.  And the reason I don't accept it is because of the distinction I've vetted to you between the function of the supervision, and performance of the work.  It would be right if the supervisor was performing the work because that's the input.  If you have someone sweeping a floor the input is the labour associated with sweeping the floor.  If the supervisor is assisting the employee to sweep the floor, perhaps the supervisor's got a broom out, as well, and sweeping the floor with the worker, that is an input into that task and I would accept your proposition if that was occurring.  But if the worker is the one performing the task, that is the input.  The output is the performance of the task.

PN5029    

In a situation where we don't have a disabled employee and that non-disabled worker is sweeping the floor, and doesn't have the level of supervision and support that the disabled worker has, I accept that the condition of the performance is different to the extent that there was no one helping that person stay on track.  But it's comparable because there's no supervisor assisting that non-disabled worker sweeping the floor.  Both workers in that situation are still performing the particular tasks the employer wants them to perform.  And when we're looking at it in terms of a productivity assessment, the productivity assessment then would only assess the sweeping.  And if the supervisor came in and lent a hand, that deducts from the productivity output.  That's the way the evidence goes.  And in those situations there is a proper measure of the productivity because we we're only focussing on the output of the input, namely the labour that the worker injects into the production process.

PN5030    

VICE PRESIDENT HATCHER:  Right.

PN5031    

MR HARDING:  I've sort of skipped ahead of what I was intending to say on that subject but in my submission there is a direct comparison to be made between the position of workers in open employment who have an intellectual disability, and those in ADE employment.  I accept there is a difference in scale in the sense that we've got in ADE employment, a larger part of the workforce comprising people with disabilities, as opposed to, say, in non ADE employment.  But the evidence of Mr McFarlane, the evidence of Mr Cain, which you ought to accept, and in fact the evidence of Mr Smith was that in open employment jobs are customised in order to meet the particular requirements of the individual.

PN5032    

The additional documents that I handed up today illustrate that very well and I encourage the Full Bench to read those articles.  I accept that they're in the American context but at the end of the day we're talking about how we deal with work and the evidence of Mr McFarlane was particularly instructive on this question.  His evidence was that often these jobs don't exist and there has to be someone who goes out to persuade the employer that there is work that the employee can do, and the work is then identified.  Often that work is work that is being performed by other employees who could be doing other things.  And specific tasks are carved out of a job role that might be performed by other employees.  And those tasks are then performed by the intellectually disabled worker.

PN5033    

It is in this Commission the SWS has been accepted in all modern awards as the standard by which to determine pro rata wages for that cohort of disabled worker.  There has been considerable effort that has gone into modifying the SWS to deal with the particular circumstances of ADE's.  If you have a worker in open employment who's performing a sweeping task, who's performing the task of emptying the bins, who's performing the task of cleaning and tidying, in a work value sense there is no difference between that and a person who's performing similar tasks in an ADE setting, no difference whatsoever in a work value sense.  In which case, if that proposition is accepted by the Full Bench there is no justification for the Full Bench to accept a different standard for the performance of the same work value in ADE settings.

PN5034    

VICE PRESIDENT HATCHER:  The problem with that is that we're not reviewing the operation of the SWS in other awards.

PN5035    

MR HARDING:  No, in which case the Full Bench has to accept that the standard that applies in modern awards is what the Commission has prescribed, and that's the SWS.  We can't look behind that fact.  So if you're pursuing a relativities arrangement, if we're trying to work out the relative work value as between awards, then the starting point has to be that the relative work value for open employment is established by the SWS.  That's the benchmark.  And if that's the case then there can't be the application of a different standard for ADE's, at least in relation to work value, unless there are specific circumstances that throw up different work value considerations for that cohort of workers.  And in my submission there isn't.  My friends will probably say there are several, one of which the fact that ADE's operate differently from commercial enterprises.  Perhaps they might also say that there's the addition of support available in ADE's that may not be to the same extent as in open employment.  Well, I drew attention to the fact that in open employment, I think it was Annexure (i) of Mr Cain's second statement, in fact there is support provided to intellectually disabled workers and other disabled workers in open employment.

PN5036    

DEPUTY PRESIDENT BOOTH:  Yes - - -

PN5037    

MR HARDING:  You have a question, your Honour - - -

PN5038    

DEPUTY PRESIDENT BOOTH:  Well, it's an observation and these things are obviously random in some senses and trying out ideas on you, if you'll permit that sort of exchange.  But it seems like there's a continuum and I struggle to see how the classification descriptor in a single classification in a modern award, say the Clerical Award, for example, and I don't have it in front of me but let's take a theoretical, hypothetical, level 2 in a clerical modern – in the (indistinct) award, and then level 2 in the SESA - - -

PN5039    

MR HARDING:  Yes.

PN5040    

DEPUTY PRESIDENT BOOTH:  And underneath the clerical modern award there might be a person working in an office environment in level 2, doing the full range of tasks which might be typical of an administrative assistant, that might involve some very basic tasks, as well as some slightly more complex tasks.  So the person might be operating at reception, answering the telephone and directing calls, they might be then also going to the post office to collect the mail and going back to the office and scanning the mail, they might be cleaning the boardrooms and doing some filing.

PN5041    

And then into that workplace comes a person with a disability underneath the supported wage system and they have their job customised, and out of that overall office assistant job we take out the job of reception and answering the phone and we perhaps take out the job of filing because both of those jobs require some judgement or some numerical skills, in the case of filing or recognising in alphabetical order, or in terms of answering the phone, making a judgement about the nature of the call and where to direct it.  And we leave the tasks of going to the post office and scanning the mail and cleaning the boardroom.  So we still have that person in level 2 but we apply the supported wage system to the level of performance that is considered to be a hundred per cent of performance of those tasks and conclude a percentage of the wage.  And then moving towards down and continuing to more elementary or more deconstructed roles in an ADE, a person might only be scanning, just scanning.

PN5042    

MR HARDING:  Yes.

PN5043    

DEPUTY PRESIDENT BOOTH:  And they might be scanning work that's given to them to scan, so they're not making a judgement about who to scan it to or which document to pick up now, that there might be a system by which there's no choice to be made.  And that would also, under the SESA Award, sit in level 2, and yet there's a vast difference between the customised job in open employment and the scanning job in the ADE, and it just seems to me that somewhere along the way we've tried to adapt an award system that was designed for people who were able to work, earn the full award wage, for those who couldn't, and we've done a reasonably good job at doing that in open employment but in an ADE setting we've tried to sort of fit the ADE into that framework and it's, to pick up a point of someone who said this yesterday, fitting a square peg into a round hole.

PN5044    

MR HARDING:  Your Honour, I can only go on what the evidence tells us about the extent of the customisation and in open employment and I would caution against assumptions being made about the extent of the customisation.  In other words, one shouldn't assume the customisation stops in open employment at a particular point.  Using your example of the scanner it might be the case in an open employment setting that there is some judgment utilised by the employee with the disability in relation to how to use the scanner.  But there's no evidence before the Commission that says that necessarily has to be so, or always is so.  It's equally possible that a person is directed to perform a particular task in open employment.  What we know is that the level of customisation on the evidence of Mr McFarlane and Mr Cain can be considerable.

PN5045    

The Commission can only, in my submission – or that I should also say the Commission has inspected ADE's but hasn't inspected any open employment.  So you've had the benefit of seeing ADE employment in action but you haven't had the benefit of seeing open employment in action.  So I urge caution in terms of making assumptions that necessarily open employment ought to be assumed to be of a higher standard of work or require more of the worker necessarily than might be open in ADE employment.  What we are left with at the end of the day is an award system that says, if you're doing work in open employment, leaving aside the SESA for a moment, and you're a person with a disability then the SWS can be applied to assess the output that you perform in the work the employer gives you, corresponding with the grade.  That's as far as it goes.  And I'll readily accept there could be a range of outcomes depending on what that work is, and I think there was some evidence and Mr Cain that – particularly, Mr McFarlane, there's a negotiation that does occur between the assessor and the employer about identifying the duties that are being assessed.

PN5046    

In the end the award system does not reach down so far to actually precisely identify the particular tasks that might be performed in every employment situation and then say, that's the benchmark, compare it on that basis and then fix a rate under the SWS.  It leaves that ultimately to the employer and to the assessor on the basis of what's actually done.  So all the Commission can do in my submission on the evidence is to accept that as a proposition there is customisation that goes on in open employment where tasks are carved out and those tasks could be equivalent to, and it's my submission are in many cases equivalent to, the tasks that an ADE might require of an employee.  If that standard is good for open employment there's just simply no justification for the standard to be different in relation to ADE's, because then you're effecting – (a), the relativity is not the same, and (b), you run the risk of imposing an inferior wage on ADE employees than would be acceptable in open employment without a proper evidentiary basis to do so.

PN5047    

VICE PRESIDENT HATCHER:  So just, I just want to test some basic work value propositions.  I mean, if you had a production process which was, from go to whoa, done by seven people performing a discrete basic task - - -

PN5048    

MR HARDING:  Yes.

PN5049    

VICE PRESIDENT HATCHER:  And the employer says, well, I'm not satisfied with this, I'm going to get rid of all of them except one.  I'm going to get the one person to work flexibly and do all the basic tasks themselves, and they implement that and they succeed, any union representing that person would say there's been a massive increase in work value, wouldn't they?

PN5050    

MR HARDING:  On the basis that the quantity of the work has increased?

PN5051    

VICE PRESIDENT HATCHER:  Well, you've gone person who because of their multitasking and the fact that they're performing a wider range of tasks, is now doing the work that was previously done by seven people.

PN5052    

MR HARDING:  I suppose that's a change in the circumstance.  But the nature of the work might not be different.

PN5053    

VICE PRESIDENT HATCHER:  That's the point.  It's not the fact that a particular task had become more complex, it's the fact that one person can do all of them by working flexibly, perhaps with the benefit of training.

PN5054    

MR HARDING:  It's possible, your Honour, that that could be an argument around the circumstance in using that criteria, which leads to an increase in the value of the work because now we've got one person performing the same work as seven.  But if in - - -

PN5055    

VICE PRESIDENT HATCHER:  But what if the reverse applied?

PN5056    

MR HARDING:  If the reverse applied and you had seven people performing one task each then you've got basic work.

PN5057    

VICE PRESIDENT HATCHER:  Even though in another enterprise you might have a non-disabled person who can run the whole production process themselves, the seven people get the same wage as the one person in the other enterprise?

PN5058    

MR HARDING:  But in your example, your Honour, they might get a higher wage because the work value has increased.  But in my example they get the same wage.  In your example the fact that one person is now performing all those tasks leads to an increase in value which it tips the balance in favour of a higher rate of pay.

PN5059    

COMMISSIONER CAMBRIDGE:  But doesn't the reverse also operate?

PN5060    

MR HARDING:  In my submission the reverse supports my proposition because if you've got one individual who's performing a task, provided that it fits within the grade that I say it does, which is grade 2, then the work value is the same if each individual in the seven person team were performing that task.  They're each giving the same amount of work value.  The work value doesn't change.  Under the conception that the award has articulated the work value is embodied in the task that it describes at the relevant classification.  That's where the value lies.  It doesn't lie in the accumulation of tasks.  There is this conception about the job on the one hand and the task on the other, and there's an assumption made about what the job might involve.  In one enterprise the job might be comprised of a range of tasks where in a production process a worker could be expected to perform all the range of tasks in what might be described as a job.  There needs to be an analysis made about which grade the worker fits in because by virtue of all that accumulation they might go upwards.  They might go upwards.

PN5061    

But what the award tells us is there's got to be a base.  There's got to be a flaw and – because that's the way minimum wages work.  It's the basic standard upon which the Commissioner judges one can live on the basis of a rate of pay.  There's got to be a base.  And the base of the award is, if you do the task then you get the rate.  And it's up to the employer to decide how it wants that work performed.  If the employer says in an open employment situation, if the employer says in a packing example, all I want you to do every day is fill, nothing more, no one could argue that that person in that situation would be entitled to the full award wage for filling.  If the argument was the reverse then we are undermining the minimum wage system because the standard doesn't mean anything anymore.  We don't have a standard because we are in any particular enterprise making an analysis about what represents value to the employer.  And therein lies a flaw that's been exposed, I think, in the evidence.  Mr Smith is the most obvious example of that but there are other examples in the evidence where employers are talking about the value of the work that's delivered.  And when you read it it's clear it's value to the employer that they are referring to.

PN5062    

Of course, that concept has been rejected by this Commission since 1969 in the equal pay case, and was rejected recently in the equal remuneration case.  It's seductive, and it's seductive because it does invite the Commission to speculate about what represents a real job and what doesn't represent a real job.  It invites comparisons from other experiences that are not represented in the evidence, based on experiences that individuals might have had themselves and then looking at how it is that it works in another enterprise where they haven't had experience.  And it also invites invalid comparisons between different enterprises because the value to one employer might be substantially different to the value to a different employer.

PN5063    

So in the production example I gave about filling, there might be a perfectly valid reason why an employer in open employment decides it wants one worker to fill and another worker to pack, and that's the way it wishes its production process to be organised.  The Commission doesn't second guess that and doesn't say, well, you know, it should be done differently, or it doesn't say, that's not a real job.  It is a real job.  They have contracted with that employee to perform that work and the work has been performed.  The output, the fact of performance in purely contractual terms, the fact of performance invokes the obligation to pay.  Under this award the fact of performance at the level the employer chooses to have that work performed invokes the obligation to pay under the award.

PN5064    

VICE PRESIDENT HATCHER:  Well, if you have a non-disabled employee the award doesn't contemplate any account being taken of their productivity output, does it?  That is, you have a series of award prescribed rates for a series of tasks, as I say, and in a given enterprise for a non-disabled person if they can't meet reasonable expectations they face dismissal.  They don't have access to a lower rate of pay.

PN5065    

MR HARDING:  No, that's right.  That is the - - -

PN5066    

VICE PRESIDENT HATCHER:  The system is structured to treat disabled differently from non-disabled people.

PN5067    

MR HARDING:  Yes.

PN5068    

VICE PRESIDENT HATCHER:  That's just a given in this system we've got here.

PN5069    

MR HARDING:  Yes, it is.  And that's accepted.  Clearly the fact of disability implies that there is a difference that the Act which says legitimately can be dealt with by an inferior rate of pay.  I accept that.  The real measure in my submission is this.  Accepting the fact that the Act accepts that the discrimination can occur in terms of rates of pay, the question really then becomes how best to apply the award in the least discriminatory fashion.  There is a statement by Katzmann J in the Nojin case that in my view encapsulates that and it is at 268 of her Honour's judgment at her Honour's reasons.  She says:

PN5070    

The BSWAT may be fair in its application to some disabled employees.  Powerful evidence was given in these cases however it was unfairly skewed against the intellectually disabled.  If competencies must be measured independently of productivity consistently with the objects of the Act that should be done in a way as to eliminate as far as possible its inequitable aspects.

PN5071    

So the search here is for the least discriminatory method, the least discriminatory method of applying rates of pay to a disabled workforce where the effect of their disability is that their productivity is affected adversely.  That shouldn't be left in the hands of the employer as clause 14.4 currently does.  That clause essentially says, you, the employer, or I'll back a step – 14.4 purports to say, here's a discriminatory regime for providing for rates of pay for disabled workers, but we'll allow you as an employer to choose from any one of these different ways to pay rates of pay on a discriminatory basis, all of which produce different wage outcomes as your Honour observed, quite significant differences.  We have got multiple minimum rates based on different standards of application.  Now where's the standard in that?  How can the Commission ensure, and I use that word specifically because that word appears in section 134(1) in relation to the minimum wage objective.

PN5072    

This Commission must ensure there is a fair and reasonable standard, a fair and reasonable safety net.  How can the Commission ensure there is a fair and reasonable safety net if there are so many different ways of assessing discriminatory wages for disabled workers?  There must be a principle that underlies the imposition of discriminatory wages on disabled workers.  In my submission that principle is embodied in what Katzmann J said which is, we've got to find a way of producing the least inequity in delivering the benefit that the modern award confers on workers.  And in relation to wages in my submission it's plain the safety net is intended to benefit workers.  That's its real object.  It's not saying to employers, look, you know, go willy-nilly out there and fix rates of pay as you see fit.  The Act says the Commission can set a standard in relation to minimum rates that represents a fair and reasonable standard which all employers have to pay regardless of whether or not it's viable for them to do so.  There are considerations relevant to 134 which I'll get to, but at a basic proposition that's what section 134 says.

PN5073    

So if we are looking at a beneficial standard, intended to benefit workers it necessarily follows in my submission that the Commission must apply one that has the least discriminatory impact. That's the first proposition.  The second proposition that follows from that is where there is in the award system already, a discriminatory standard applicable to disabled workers in a different context (indistinct), open employment.  It should not choose an inferior standard to that unless there are specific reasons that justify it consistent with the principle that I have articulated.  And in my submission the evidence simply does not allow those distinctions to be made in respect of open employment versus - - -

PN5074    

VICE PRESIDENT HATCHER:  In that case why do we have the supported employment award, at all?   I mean, the fact is an award was created presumably to be tailored for the needs of a specific sector but on your approach we could just abolish it and people can just apply the ordinary industry award and ISWS, and that would be the end of it.

PN5075    

MR HARDING:  Well, the supported employment award applies to non-disabled workers, too.  It applies to workers in supported employment whether they're disabled or non-disabled - - -

PN5076    

VICE PRESIDENT HATCHER:  Yes.

PN5077    

MR HARDING:  14.4 as a carve-out for disabled workers.  That's all it does.  So presumably the Commission thought that it was sensible to have an award that covered supported employment.  In my submission the mere fact that there is one doesn't necessarily support the proposition that supported employment is different enough to justify it but in any event if those differences existed they're only different at the disabled worker level, yet the award covers non-disabled workers.  Whilst my instructor is trying to find the decision that I want to refer to – I'm just going to hand up a document – in relation to the appropriateness of the SWS, it's not just our view.  It's surprising that the DSS hasn't brought this to the full Bench's attention.  But nonetheless it hasn't, so we will.  The committee on the rights of persons with disabilities, considering Australia's situation as a signatory to the treaty on the convention has dealt with a range of issues it's asking Australia to consider.  And at paragraph 50, and I might add this opinion was issued in 2013 – at paragraph 50 the committee recommends that the state party do the three things that are set out in (a), (b) and (c), and I draw attention to (b).

PN5078    

VICE PRESIDENT HATCHER:  Sorry, where is it?

PN5079    

MR HARDING:  Paragraph 50 on page 7.  I should add that in paragraph 62 the committee has required Australia to submit its response to this opinion by 17 July of this year.  In my submission the committee on the rights of the disabled lend clear support to the proposition that the supported wage system with modifications, and of course, it was speaking at a time when those modifications hadn't been devised, apply to persons in supported employment.

PN5080    

VICE PRESIDENT HATCHER:  Yes, well I would read these, in effect, stating that the supported wage system as it was at that time did not secure a correct assessment of the wages of persons in supported employment.  That's the only way to read that, isn't it?

PN5081    

MR HARDING:  It is.  And now it's been modified.

PN5082    

VICE PRESIDENT HATCHER:  It has been modified.  Whether it achieves that objective as another question but it has been modified.

PN5083    

MR HARDING:  Yes, but it's urging the supported wages system to be modified to secure correct assessment of the wages of the persons in supported employment.  That's the way I read it.

PN5084    

COMMISSIONER CAMBRIDGE:  I wonder what "correct" means.

PN5085    

MR HARDING:  Your Honour, I mean, it says what it says. What it's telling us, I think, is that on the committee's view the supported wages system with modifications is an appropriate system to apply to supported employment, as opposed to BSWAT.

PN5086    

VICE PRESIDENT HATCHER:  It's pretty clear about BSWAT but it doesn't say what the modifications would be that would secure that objective, does it?

PN5087    

MR HARDING:  No, it doesn't.

PN5088    

VICE PRESIDENT HATCHER:  I mean, we don't have the power simply to make an award which, leaving aside what's already been done, which modifies SWS further.

PN5089    

MR HARDING:  You have - - -

PN5090    

VICE PRESIDENT HATCHER:  I mean, we don't own it.  It belongs to the Department.  We can't simply alter it by way of any decision we make, can we?

PN5091    

MR HARDING:  You have altered it by way of the Commission's decision.  The modifications that have been approved by the Commission are modifications of the supported wage system for ADE's.

PN5092    

VICE PRESIDENT HATCHER:  But that was done consensually with the involvement of the Department.

PN5093    

MR HARDING:  Yes.  I accept that.  What I'm suggesting is though that there is, at the committee of the rights of the disabled, a recognition that the supported wages system should apply to supported employment and that - - -

PN5094    

VICE PRESIDENT HATCHER:  With appropriate modifications.

PN5095    

MR HARDING:  With the appropriate modifications, and - - -

PN5096    

VICE PRESIDENT HATCHER:  The question I'm asking you is, can we make the appropriate modifications?

PN5097    

MR HARDING:  Yes.

PN5098    

VICE PRESIDENT HATCHER:  That is, if we said the consent variation to date hasn't addressed all the issues and further modifications need to be done, can we do that by way of an award variation?

PN5099    

MR HARDING:  I don't see why not.  If the Commission was to form a view that the supported wages system wished to insert in the award should look like this, then it does.  The status of the DSS as the (indistinct) of the tool doesn't change the power of the Commission to make an award as it determines subject to its satisfaction that it will meet the object in section 134.

PN5100    

VICE PRESIDENT HATCHER:  The difficulty is that one of the great benefits of the SWS is that it's supported by a structure of independent assessors funded by the Commonwealth.

PN5101    

MR HARDING:  Yes.

PN5102    

VICE PRESIDENT HATCHER:  But we can't guarantee that that will continue if we make a variation that doesn't have the support of the Commonwealth.

PN5103    

MR HARDING:  That's right, you can't.  But you can take into account the fact that that is the situation when you're making an award and if the situation changes that might be an appropriate reason to vary the award.  But the Commission can take the SWS as it finds it.  The evidence is that that is the way in which it's structured and it can rely on it.  If the Commission was to take the view that for various reasons the SWS required further modification to ensure its appropriate application to supported employment it has the power to make the change.  Whether the Commonwealth steps in if there is funding required to fund the change is a different question, and might be a reason why the Commission might be slow to do that but it's not a reason why it doesn't have the power to do it.

PN5104    

VICE PRESIDENT HATCHER:  All right.  Hopefully the Department might have something to say about that in due course.

PN5105    

MR HARDING:  One can only hope, your Honour.  There has been some evidence about the distinction between simple and complex jobs and I think that's been touched on in the conversation that we've been having, and an asserted deficit of the SWS is that it might lead to a situation in which someone performing a simple job is paid more than someone performing a complex job by virtue of the nature of the work.  With respect, when the SWS was tested as it was in the demonstration project, which I think is exhibit 2, the reverse position applies.  The project identified in a number of workplaces quite palpably that there was a correlation between the capacity of the worker to perform more than one task and their output.  It wasn't a situation in which if you had less capacity you performed work faster, and if you had more capacity you would work slower because the employer would ask you to do complex tasks.

PN5106    

On the analysis that was undertaken on the demonstration project the correlation went the other way.  And there was a good example in the evidence about why that might be so, if I can just refer to that.  I'm referring to exhibit 2, the demonstration project.  And there are a number of occasions when the assessors identified the correlation that I have just spoken about, page 39 at Mai-Wel, the penultimate paragraph, and then on page 61 at DSS on the paragraph that comes immediately before the subheading, "Production lines", and on page 85, about half way down, again above the subheading, "Production lines."  On page 86 there was an analysis of the impact to support levels and I draw your attention to the description for an employee for employee 4 where significant physical limitations are observed and that "as a result her work was consistently slow and laboured and assessors observed observations indicating it is likely they were working at capacity."

PN5107    

VICE PRESIDENT HATCHER:  It's not a question of increasing support, it's probably a question of if the support they had was removed, they probably couldn't do the job at all.  That is, applying those examples to - - -

PN5108    

MR HARDING:  No, I think the way I read that, your Honour is that if they were working at capacity, that if there was an increase in support they wouldn't have increased their productivity.

PN5109    

VICE PRESIDENT HATCHER:  Yes.

PN5110    

MR HARDING:  But I don't know whether it's suggested that if the support was removed they couldn't do it.  In fact, the fact that they're doing it implies that they can, it's just they're doing it very slowly.  And this is what Buchanan J said in paragraph 42.  There is a distinction between competence which is the competence that you see in the Greenacres tool, or the Flagstaff tool where competence is assessed as an abstract thing.  And then there's the competence that comes from the performance, the fact the job's being performed and that work is being accepted by the employer implies that the person is competent to perform it.

PN5111    

In the case of employee 4, the number of tasks an employee can perform might be seen as a proxy for their capacity.  And in that case the significant physical limitations of the worker directly affected the output that they could produce.  Disability is not something that's fixed, obviously, and disability is something one shouldn't assume implies any particular level of limitation.

PN5112    

In many cases, and this was the evidence of Mr McFarlane, you don't know until you try.  Often it's the case it might be suggested by someone who hasn't got a disability, "Well, of course you can't do that", which often is no more than an observation that that person is making an assumption about the person's capacity, in an employment without actual evidence that that is in fact the limit of their abilities.  Whether the person can do it is ultimately a matter of trying and seeing whether they can.  If they can't, then there is evidence of the incapacity.  If an employer says, we want you to do the job, and the job's being done, in my submission it's clear there is competence to do the job and one ought not make an assumption about the limitations that might then flow from their ability to do other jobs.

PN5113    

VICE PRESIDENT HATCHER:  Mr Harding, if you've just finished that one, we might take a short morning tea break.

PN5114    

MR HARDING:  Yes.

SHORT ADJOURNMENT                                                                  [11.35 PM]

RESUMED                                                                                             [11.58 AM]

PN5115    

VICE PRESIDENT HATCHER:  Mr Harding?

PN5116    

MR HARDING:  Thank you, your Honour.  I want to say four more things.  I realise I've consumed a fair bit of the morning already.  In relation to the point about the comparability between open employment and ADE employment I do wish to draw attention to Annexure A of the second statement of Mr Cain, which is exhibit 16, which is a piece of research done by Evolution Research, some time ago I accept.  But there's no evidence that undermines the veracity of that now, and I rely on page 3 of that document which first talks about the observations between the difference between what might be required as in terms of a job description and what was actually performed both in open employment and business services.

PN5117    

And the observation from the research is that in open employment the average number of competencies performed was 2.8, and that's on page 4, and in business services the average competencies performed were 2.38, which is on page 6, and the point there is that when we're talking about the kind of tasks that might be performed in open employment and ADE employment this research suggests there isn't that much difference between those two scenarios.  Without wishing to go to the particular evidence I just draw attention to a number of things arising from the comparison I have made between the evidence about what tasks are performed and how they then line up with grade 2.

PN5118    

Can I draw attention to paragraph 15 of Mr Burgess' statement, exhibit 22, and also paragraph 20 of his statement and also paragraph 34.  There is a list of tasks that he says are performed in his ADE and I invite the Commission to compare those with grade 2.  And likewise the statement of Mr Burgess from Centacare at paragraph 6 and the evidence of Mr Dickens, exhibit 31, where he gives evidence about the function of inserting pepper and salt into packets that are then used for the airline industry.  Again I invite the Commission to compare that with the list of packing duties set out in the award.

PN5119    

I do wish to turn to the issue of viability and then what I propose to do is to talk briefly about some of the other tools for which there has been some evidence collected and where cross‑examination occurred, and to conclude on that basis.  There is an assertion in the evidence from ADE employers that the adoption of the SWS will lead to terrible consequences resulting in the closure of ADEs holus bolus.  There is, in my submission, no concrete evidence that the Commission can rely on that would support that proposition, and the Commission has the benefit of at least a statement from the secretary of the DSS speaking for the Commonwealth, which is exhibit 8, that states that:

PN5120    

The Commonwealth

PN5121    

That is the government:

PN5122    

will ensure future policy settings allow for the ongoing viability of ADEs.

PN5123    

Now I think the Commission can take that at face value.

PN5124    

VICE PRESIDENT HATCHER:  But it's just talking about its own policy settings not ours, isn't it?

PN5125    

MR HARDING:  It's talking about policy settings that it will apply to ensure viability of ADEs regardless of what decision this Commission makes about clause 14.4.

PN5126    

VICE PRESIDENT HATCHER:  So we should treat that as a blank cheque should we?

PN5127    

MR HARDING:  You should treat it, your Honour, as it says, which is that the policy settings will be adjusted in a way to correspond with the decision of this Full Bench.  Now I can't say the government is going to say "Well, here's another 50 million bucks to fund ADEs".  But the submission has been prepared on the basis that this Commission is assessing whether or not the SWS should be the only tool in the award or whether it should retain the current list or some other list, and what the secretary is clearly saying is that whatever the decision of this Full Bench, the government will have policy settings that ensure viability.

PN5128    

There's been evidence given about the increase in ADE costs should there be a change to the Supported Wage System only and in my submission none of that evidence enables the Commission to draw any concrete conclusions about the extent of the increase.  There's been a lot of speculation about what it might be and some rather wild guesses and some figures plucked out of the air, as I think some of the evidence shows.  The most concrete evidence that I can find is the annexure of Mr Burgess to his statement which contains a table that shows the change from BSWAT to the Supported Wage System.

PN5129    

Unfortunately Centacare has been applying the Supported Wage System wrongly and the inference is that the Supported Wage Bill that came as a result is inflated.  Therefore there really isn't any evidence of any concrete nature the Commission can rely on that would say that if it was to adopt the Supported Wages System only there will be an increase of X in the wages bill of ADE employers and in fact - - -

PN5130    

VICE PRESIDENT HATCHER:  You put to a number of the witnesses that cost that the SWS had been applied incorrectly.

PN5131    

MR HARDING:  Yes.

PN5132    

VICE PRESIDENT HATCHER:  At the end of the day if we have trained SWS assessors going out and a certain result pertained, why wouldn't we assume that if we did it for everybody the same result would pertain?  I mean what they do is just baked into the SWS system isn't it?

PN5133    

MR HARDING:  Yes, in the end.  But of course they asserted there was a particular outcome from the SWS.  But the short point is it's an evaluation system of an individual and so whatever the output is results in the wage.  So really in the end one can't hypothesise about what wage outcome there will be until the output is determined for each individual.

PN5134    

VICE PRESIDENT HATCHER:  Well, that's true but doesn't the evidence clearly demonstrate that SWS ADEs are paying substantially higher average wages than the ones that aren't?

PN5135    

MR HARDING:  I think the evidence demonstrates that there is an increase in wages if the SWS is adopted.

PN5136    

VICE PRESIDENT HATCHER:  So Mr Brantingham's evidence for example is fairly clear about that.

PN5137    

MR HARDING:  Well, I think his evidence was that there was particular number but he didn't provide any concrete basis for it.

PN5138    

VICE PRESIDENT HATCHER:  Well, he provided his average hourly rate didn't he?

PN5139    

MR HARDING:  I can't recall, your Honour, off the top of my head.

PN5140    

VICE PRESIDENT HATCHER:  I thought I wrote that down.  Yes, all right.

PN5141    

MR HARDING:  Suffice to say what I'm suggesting is that there will be an increase.  We accept that, and I suppose implicit in our case is that the other tools undervalue or underpay workers for the work they're performed so, necessarily there will be an increase due to the adoption of the SWS, because we think that's a fairer system.  We accept that.

PN5142    

VICE PRESIDENT HATCHER:  So Mr Brantingham had his own tool but he said it was about the same as for SWS enterprises which was substantially higher than others.

PN5143    

MR HARDING:  Yes.

PN5144    

VICE PRESIDENT HATCHER:  In the event that we favoured the removal of wage assessment tools and a move to some new uniform system whatever that might be, do you accept that there would have to be a substantial phase out period?

PN5145    

MR HARDING:  Yes.

PN5146    

VICE PRESIDENT HATCHER:  So have you got any proposals to that extent?

PN5147    

MR HARDING:  We don't but we accept there should be.  There needs to be a period of adjustment.  Can I say that there's two other pieces of evidence that are relevant in this respect.  At least two of the witnesses, Mr Braddy being one that springs to mind, who was in fact calling for an equal playing field so that there was a singular basis upon which wages were determined for the workforce supports, in my submission, the contention that my client advances.  An SWS would provide a level playing field as opposed to the myriad of different tools that are currently available.

PN5148    

COMMISSIONER CAMBRIDGE:  But that's a strange thing in itself because if there's a valid criticism of the fact that there was a myriad of other tools producing inconsistent outcomes, don't we see evidence now of individual assessors coming out and doing this individual assessment and producing once again inconsistent outcomes?

PN5149    

MR HARDING:  I don't accept that - that's such a broad ranging statement, Commissioner.  I accept that there is some evidence of ADE employers who had some criticisms of the way some assessors have gone about the task of performing those assessments.

PN5150    

COMMISSIONER CAMBRIDGE:  Some of the assessments are done by way of some individual negotiation with an employer and so forth.  It seems to me to be you leave open the prospect of these things establishing inconsistent outcomes.  We don't do that for the rest of the population, do we?

PN5151    

MR HARDING:  No.

PN5152    

COMMISSIONER CAMBRIDGE:  We don't set wages on the basis that someone is going to go out and look at your personal circumstances and you'll get X outcome.  We fix them differently.

PN5153    

MR HARDING:  Yes.

PN5154    

COMMISSIONER CAMBRIDGE:  With an attempt to provide for equity in terms of the outcomes, don't we?

PN5155    

MR HARDING:  But the problem is though, Commissioner, that we fix minimum wages according to a class of worker and we say if you fall into that class you get X, and if the employer doesn't pay that then the employee has a right to sue.  In this case we're talking about people with disabilities whose abilities vary depending on the individual, and so under all of the tools there is an individual assessment that takes place and so the necessary result of that is there will be variation.  The problem, the issue is in the end does the tool provide a proper basis by which that individual assessment can occur.  There might be criticisms of how an individual assessor has gone about the task of setting a benchmark and then assessing, and if the employer has a problem with that then it can raise a dispute under the award or under the modifications agreed to by the Commission.

PN5156    

VICE PRESIDENT HATCHER:  The current award and the modified version are predicated on there being some sort of agreement which is then lodged with the Commission.

PN5157    

MR HARDING:  That's the ultimate result, yes.

PN5158    

VICE PRESIDENT HATCHER:  And it seems to me that, following on from what the Commissioner said, that the whole process of benchmarking means that it's determined not by some objective or uniform standard but by what happens to be agreed between the assessor, the employer and the employee.

PN5159    

MR HARDING:  That is the evidence about how the benchmark is established, true.  I can't offer you a way of objectifying that for every individual.  What I can say is that if there's an agreement reached about what the tasks are that the employer requires then there are means by which - and then the assessment occurs, the result is lodging of an agreement which I suppose is evidence that there has been a consensual approach to the assessment.  But if there's a dispute about it then there is a process that's available to have that dispute dealt with, including by this Commission.

PN5160    

VICE PRESIDENT HATCHER:  You can see the different possibilities of a range of outcomes.  If you've got open employment where you've got an employer with 99 non‑disabled persons being paid the award rate, they've agreed to take on one person and have an adjusted job.  It may not matter all that much to them whether the rate comes out at 40 or 50 or 60 per cent, but if you've got an ADE where everyone is disabled and the cost of - and the assessment affects the whole cost of the business, they're going to negotiate a lot harder about benchmarks and those sort of things with a possibility of a quite different result.

PN5161    

MR HARDING:  Indeed they might negotiate more - it might be the case that there is a more intensive negotiation around benchmarks and I could accept that that might lead to unfairness in circumstances where there's no means by which that can be dealt with by way of a dispute.  But there is, in which case if the employer doesn't accept the - if there's no agreement about what those duties ought to be, there is a means by which that can be dealt with in an individual case, which is the whole purpose of having dispute resolution procedures in the award.

PN5162    

VICE PRESIDENT HATCHER:  Yes, although we can't arbitrate under those procedures as I understand the position.

PN5163    

MR HARDING:  I thought the Commission could in relation to clause 9 of the award.  But anyway, that's a matter for what the clause says.  Maybe that's something that could be attended to.

PN5164    

VICE PRESIDENT HATCHER:  I think it's from the Act not the - - -

PN5165    

COMMISSIONER CAMBRIDGE:  Yes, it's a broader problem than that.

PN5166    

MR HARDING:  But you're talking about 738 which says that if there's a - which requires the instrument to allow the Commission to arbitrate.

PN5167    

COMMISSIONER CAMBRIDGE:  Yes, so that's a standard dispute resolution procedure clause that doesn't provide for anything other than consent arbitration.  They're all written the same way.

PN5168    

MR HARDING:  Yes, well I don't have the modifications in front of me but I thought there was a means by which the Commission could arbitrate.  But it seems to me that in these circumstances if that's a problem there ought to be the capacity to arbitrate, and if that is put into the modern award then the Commission has the power under the Act to arbitrate.

PN5169    

VICE PRESIDENT HATCHER:  Well, I think the problem is - I'll try to find the section - is that we don't have - - -

PN5170    

COMMISSIONER CAMBRIDGE:  I don't think we can put it in a modern award.

PN5171    

VICE PRESIDENT HATCHER:  - - - that we have the power to do that.

PN5172    

MR HARDING:  I see what you mean.

PN5173    

COMMISSIONER CAMBRIDGE:  In fact I'm sure we can't put it in a modern award.

PN5174    

MR HARDING:  738:

PN5175    

The Division applies if a modern award includes a term that provides a procedure for dealing with disputes -

PN5176    

This is in (a):

PN5177    

- including a term in accordance with section 146.

PN5178    

And 146 requires the Commission:

PN5179    

to include a term that provides a procedure for settling disputes about any matters arising under the award and in relation to the National Employment Standards.

PN5180    

COMMISSIONER CAMBRIDGE:  Yes.

PN5181    

MR HARDING:  Perhaps I'm wrong but 146 doesn't seem to exclude the possibility of arbitration powers.

PN5182    

VICE PRESIDENT HATCHER:  So go on, Mr Harding, and we'll come back when we find the section.

PN5183    

MR HARDING:  Yes, okay.  Can I say that D.5.6 of the modifications, B of the modifications to the award entitle"

PN5184    

an employee or an employer to raise a dispute in accordance with the dispute processes outlined in the Supported Wage System handbook.

PN5185    

And then after exhausting those processes:

PN5186    

raise a dispute in relation to the assessment of the employee's assessed productive capacity in accordance with clause 9.

PN5187    

Clause 9 being of the award.

PN5188    

COMMISSIONER CAMBRIDGE:  Clause 9 only provides for consent arbitration.

PN5189    

MR HARDING:  "The parties" - in 9.3:

PN5190    

...may agree on a process but -

PN5191    

in 9.4:

PN5192    

- where the matter remains in dispute the Commission may exercise any method of dispute resolution.

PN5193    

COMMISSIONER CAMBRIDGE:  But not unless it's specifically empowered to arbitrate.

PN5194    

MR HARDING:  But it is by virtue of D.5.6, Commissioner.

PN5195    

VICE PRESIDENT HATCHER:  It has to be specifically authorised by the Act.

PN5196    

MR HARDING:  Yes.

PN5197    

VICE PRESIDENT HATCHER:  Anyway I'll come back to that.  I'll just have to find the section.  I thought it was five hundred and something.

PN5198    

MR HARDING:  Anyway.  Just to conclude on the viability issue, our submission is in any event that if the Commission was to form the view that the SWS provides a fair and reasonable safety net of conditions that it would be wrong for it to conclude that an inferior process ought to be adopted simply on the basis of an assessment of capacity to pay.  If that was to be the case there would have to be strong evidence, in my submission, but more particularly it would undermine the safety net if the Commission were to take that path and would preclude it from satisfying the statutory obligation to ensure a fair and reasonable safety net.

PN5199    

VICE PRESIDENT HATCHER:  It's section 595, Mr Harding.

PN5200    

MR HARDING:  595(1) says:

PN5201    

The Commission may deal with a dispute if it is authorised under another provision of this Act.

PN5202    

739 says - 738 says it may arbitrate:

PN5203    

if a modern award includes a term that provides a procedure for dealing with disputes.

PN5204    

And section 739(1):

PN5205    

This section applies if the term referred to in section 738 requires or allows the Commission to deal with a dispute.

PN5206    

And of course it must allow for arbitration.  D.5.6 appears to allow the Commission to deal with disputes pertaining to productive capacity.  I accept the clause in terms does not state "including by arbitration" save that clause 9 seems to authorise the Commission to apply any dispute resolution method that it deems appropriate.

PN5207    

VICE PRESIDENT HATCHER:  I think the problem arises that 739(4) only allows for arbitration where the parties have agreed that it occur.

PN5208    

MR HARDING:  So that's not my reading of clause 9, but maybe I'm wrong.  9.4, that seems to me to say that the Commission can exercise any method "if the matter remains unresolved at step 9.3".  But can I - - -

PN5209    

COMMISSIONER CAMBRIDGE:  But specifically - - -

PN5210    

VICE PRESIDENT HATCHER:  I think that was a fudge adopted in the award modernisation process.

PN5211    

MR HARDING:  The fudge.  We can have arguments about construction and jurisdiction.  Doubtless that will be fun.  But I can - my point really is this, that if there is a lacuna in the award and there isn't proper provision for arbitration by the Commission to deal with disputes of the kind we've been discussing, there ought to be because clearly that resolves the problem.  That will resolve the problem.  Otherwise the Commission is in a position where it's going to have to descend into each individual assessment.  How it goes about that task I don't know, and in relation to Commissioner Cambridge's question, that represents a fundamental difference between the way in which an award ordinarily operates and the way in which it must operate in an SWS assessment, be it in open employment or be it in ADE employment.

PN5212    

I just wanted to deal briefly with the wage tools for which there was some evidence in cross‑examination and those specifically were the Greenacres tool, the Mai‑Wel tool, the Yomaro tool and the Blueline Laundry tool.  And it's important to note that the Greenacres tool is of some significance because the largest employer of supported employees in this industry utilises that tool, that's Endeavour.  Importantly the second-largest employer in this industry, which is Bedford, has consented to the deletion of its tool and at least on the evidence of its former CEO seems agnostic as to which tool ought to be utilised in the award.

PN5213    

I accept that under its agreement it has - under an enterprise agreement it has the benefit I think of a tool that's different, but in relation to the award level that was the evidence that the Commission was given.  And I think Greenacres is the third-largest employer but I might stand corrected if I'm wrong on that subject.  The problem that each of these tools have is an absence of clear and - of a transparent means by which assessment can occur and that's a fundamental problem in light of the object in section 134(1)(g).  It's important to understand the context here.

PN5214    

We're talking about the application of a complex wage assessment tool to a group of vulnerable people and notwithstanding what Mr Ward said in opening about the fact that there will be many - that employees with intellectual disabilities will have available the Ombudsman to help them, advocates to help them and potentially unions to help them, the Commission doesn't set wage instruments on the basis of an assumption about what help an employee might have available.  At the end it sets instruments on the basis of whether they're transparent and easy to understand for the employee to whom they will apply, and the Commission does need to take recognition of the fact that these tools are complex and are applying to a vulnerable group of people who have in some cases limited cognition.

PN5215    

Secondly there is evidence at least on the case that we advance that the Greenacres tool in particular does not properly assess the work that it requires the worker to perform.  There was an example that was given by Mr Donne for instance that springs to mind of the forklift driver.  Now he conceded in cross‑examination that even if that work - a worker that it required to perform the work of a forklift driver was doing the work, it could still discount their wages and put them at a lower wage level by reference to an assessment of their underlying work skills, and that's fundamentally unfair.

PN5216    

If they want that worker to do the work and the work is being performed, it ought to pay for the work that it requires to be performed, not discount by reference to other things unrelated to that work as it's performed.  The same vice is apparent in the Blueline Laundry tool.  The evidence of Mr Fraser was that there was a productivity assessment that was one part of the tool and then secondly there was a competency assessment based on an assessment of what the employer might require of the employee but did not always require at any particular time.

PN5217    

This is the kind of problem that is evident in this misconception in Mr Christodoulou's evidence between the job the employer might expect through a statement of duties that it could require at some future point, as distinct from the work that it actually requires at any particular point in time.  The Yomaro tool in my submission - a particular difficulty with the Yomaro tool is the adoption of abstract undescribed percentages of the award.  I think it picked 40 per cent as a rate that would limit each wage level.  There was absolutely no explanation for why that 40 per cent was picked.  Who knows?  The witness wasn't able to tell us.

PN5218    

The Civic Industries tool was another from which you heard evidence from Ms Fitze.  It took us about an hour to get a proper explanation of how that tool worked with all its complex formulas, and as a singular example of the complexity of that tool if it took us an hour to get a proper explanation of how it worked, how is it going to work in a circumstance where it's being applied to a person with limited cognition, perhaps even people who can't read?  And that was Ms Fitze's evidence, that they employ people who can't read.  Now they've got, she says, some flyers that help explain it.  Those flyers weren't in evidence.  We can't assess them, but in my submission that simply can't make up for the complexity of that tool.

PN5219    

That's the first criticism.  The second criticism is that it seems to adopt ranges with arbitrary numbers.  There was no explanation for why minus 45 had to be applied to a person with high support needs once you fell into the range.  It's just a deduction, and in those circumstances the tool simply can't stand as a proper assessment of wages.  That tool in many ways is a useful way of comparing, a useful comparison to, say, the Greenacres tool because that tool, the Civic Industries tool, regulates wages all the way up to a hundred per cent of the award rate and it applies a particular formula with particular arbitrary deductions.  The Greenacres tool applies a completely different formula and, significantly, above 55 per cent it utilises the SWS.

PN5220    

Now there is no explanation in the evidence about why it's good to utilise the SWS above 55 per cent and why it isn't good to do it below 55 per cent, other than the fact that most of its employees would fall at a sub 55 per cent level.  The Flagstaff tool which I think is contained in an enterprise agreement, and we got some evidence about that, applies 45 per cent as a threshold above which the SWS applies.  We have two ADE employers who utilise the SWS for grade 2 work at different thresholds without any explanation for why those thresholds should apply.

PN5221    

In the case of the Greenacres tool there was evidence about level E work which had elements that corresponded with grade 3, particularly the supervisory components.  No explanation for why such a devaluation should be justified in circumstances where the award sets an entirely different value for it.  Mr Christodoulou's evidence in relation to the Greenacres tool is he accepts it has some difficulties with its transparency and he uses, I think in paragraph 12 of his second statement, a definition of superior and his evidence was that if there's a better tool - that there is some problems with the Greenacres tool which he'd like to fix, but if there's a better tool out there, he's prepared to adopt it.  Coming from Greenacres, that's a significant admission.

PN5222    

In the end, our position is this.  The Commission hasn't been able to canvass evidence from every single tool that's listed in clause 14.4.  As we've pointed out, for some of the tools, no one has come along to defend them or to explain what they are or what they do.  That might imply an absence of interest in the retention of those tools in the award.  Certainly, in my submission, the Commission should draw that inference.

PN5223    

But the principle position that the AED adopts, is that if the Commission is satisfied that the SWS provides for a fair and reasonable safety net in relation to minimum wages, there's no reason for it to go further and prescribe more tools if it's satisfied that it delivers an appropriate standard of pay for this class of employee.

PN5224    

It might be put against me that there's to do more.  Well, we'll debate about that, but as a matter of industrial merit, if the Commission is satisfied that the obligation to ensure a fair and reasonable standard is embodied in the SWS, it ought to prescribe that tool and go no further.

PN5225    

VICE PRESIDENT HATCHER:  Mr Harding, you accept that we could adopt an outcome that doesn't conform to any of the specific proposal advanced before us?

PN5226    

MR HARDING:  Yes.

PN5227    

VICE PRESIDENT HATCHER:  One option might be that if, for example, we decided that we should remove overtime to a single new system, we could as we provisionally state that conclusion and then ask the parties to assist us in working out the detail.

PN5228    

MR HARDING:  Yes.

PN5229    

VICE PRESIDENT HATCHER:  Then the AED Legal Centre would presumably constructively participate in that exercise.

PN5230    

MR HARDING:  Yes.

PN5231    

VICE PRESIDENT HATCHER:  Yes.  All right, thank you.

PN5232    

MR HARDING:  They are the submissions for the AED.

PN5233    

VICE PRESIDENT HATCHER:  All right, who's next?  Ms Leibhaber?

PN5234    

MS LEIBHABER:  I'll just make a few closing remarks on behalf of the Health Services Union.  As indicated in our opening submission by Ms Svendsen, the HSU supports the proposal by AED Legal Centre to amend clause 14.4 of the Supported Employment Services Award.  It is our view that the Supported Wages System, the SWS ought to be the only method of determining rates of pay below the minimum wage for employees with disabilities.  We also oppose the application by ABI to insert a new so-called Work Value Classification structure into the award.

PN5235    

It is the HSU's view that the SWS is the most appropriate method for determining minimum rates of pay for employees with disabilities in ADEs.  It is the only method which ensures, in accordance with section 134 of the Fair Work Act, the fair and relevant minimum safety net of terms and conditions for employees in ADEs.  It is the only method which does not discriminate against an employee because of their disability which is prohibited by section 153(i).

PN5236    

As stated in the evidence of Mr Cain and MacFarlane the SWS is based on the principle of substantive equality.  That is, it provides an incentive for employers to hire employees who would otherwise have difficulty gaining employment because of their disability.  But importantly, it only discounts their wages to the extent that the employee is unable to work at the level of productivity expected for the award rate of pay.

PN5237    

The SWS assessment process is the only wage assessment method listed in the Supported Employment Services Award, which is conducted by independent assessors.  This removes the conflict of interest inherent in all other wage assessment processes under this award.  Where the employer who has the incentive to reduce costs is also responsible for assessing a vulnerable worker's pro-rata wage.

PN5238    

Mr Cain's evidence showed that compared to the other wage assessment tools under the Supported Employment Services Award, and compared to the ABI's proposal, the SWS has undergone substantial testing, development and implementation in ABEs as well as an open employment.  It is the only wage assessment tool available in all other modern awards.  The modified SWS has shown itself to be adaptable to concerns about how it applies to the unique work environment of ABEs.

PN5239    

In cross-examination, witnesses, including Ms Nicole Fitz from Civil Industries, acknowledged that the modifications allowing ADEs to take into account workplace data concerning an employee's productivity over a period of time would satisfy their concerns around the suitability of SWS in assessing employees who may become distracted or wander away from their work.

PN5240    

ABI has said that SWS was designed for open employment and has repeated this emphatically but has not provided evidence of this.  Its witnesses have simply stated this as a matter of opinion without a basis in fact.  Mr Cain's evidence that while open employment may have been its focus, SWS has been used since the 1990s in what were known as sheltered workshops and continued to be used in ADEs today.

PN5241    

The modifications to the SWS which have been introduced to respond to some of the challenges raised by ADEs reflect the best SWS tool is adaptable to the particular needs of ADEs.

PN5242    

On the question of support and supervision, Mr Cain's statement - his November statement, paragraph 31 outlined that the SWS requires assessment of an employee's performance to be undertaken while receiving the same level of support and supervision that would be reasonably available to other people who do not have a disability.  While the SWS does not bring support and supervision into the assessment, where that supervision or lack thereof, does affect productivity, this is taken into account in the assessment.

PN5243    

The evidence before the Full Bench in this matter has clearly revealed the need for there to be a single tool to assess wages in ADEs.  The award in valuing all the wage assessment tools in clause 14.4(b) equally allows for too broad a degree of choice.  The wage assessment tools can all lead to vastly different wage rates which essentially means that ADE employers can largely pick and choose the wages they wish to pay.

PN5244    

An illustration of this is in the witness statement of Mr Andrew Donne, exhibit 40 at exhibit AD11 to his statement.  He includes the skills master assessment of the employee Ms Kate Last which the document shows arrives at $4.34 per hour.  This is accompanied by a letter to Ms Last explaining that the employer has completed the skills master assessment and her rate will remain at $8.45.

PN5245    

The letter does not explain what the documents show, that is the skills master assessment arrived at a lower rate, approximately half the rate of pay of her previous assessment under BSWAT.  The skills master tool in this case was able to be used by the employer to simply maintain the BSWAT rate of pay, that is, the rate of pay from the tool found to be discriminatory by the Full Federal Court in Nojin.

PN5246    

In Mr Donne's cross-examination he explained that after the transition from BSWAT to Greenacres, average wages increased by 14.9 per cent.  These examples illustrate that the proliferation of tools under the award allow for vastly different wage assessments for the same work performed by the same employees.

PN5247    

Consistency and transparency are essential to providing a fair and relevant minimum safety net.  Ensuring a simple and easy to understand modern award system is one of the considerations of the modern award's objective.  Yet the high variability of the wage rates between the tools is not simply nor transparent, and not fair to employees.

PN5248    

Many of the witnesses from ADEs we heard this week had difficulty explaining to the Full Bench the complex calculations and assumptions involving how their wage assessment tools operate.  Yet, these are the tools which are applied to vulnerable employees at ADEs, many of whom have intellectual disabilities.  We say that it is desirable to have SWS as a single wage assessment tool to eliminate this level of choice and provide greater consistency and transparency for employees under the award.

PN5249    

Many employees in Australia perform low level, unskilled, repetitive work and receive at least the minimum wage.  Their wages are not discounted below the minimum wage because the work is low level.  Under the SWS the productivity assessment ensures that an employee who has a disability that can perform the work at a satisfactory quality and pace is awarded the full award wage.  But under many of these other tools, the employee at an ADE could never receive the full minimum wage, even if they perform the job to an advanced standard.

PN5250    

For example, the evidence of Mr Steve Burgess from Flagstaff, was that an employee folding towels under his application of the Greenacres tool, could never earn more than 22.5 per cent as that is the highest rate which that job is valued in the assessment.  His evidence is no one at Flagstaff earns more than 45 per cent of the minimum wage.  We say that valuing low level work differently, because it is performed by a disabled employee is discriminatory, and these concerns also apply to the problems inherent in ADI's proposal.

PN5251    

Mr Anthony Rohr's evidence in cross-examination was about employees that are assessed against tasks that are not included in their job, meaning their wages are discounted for tasks they do not do.  Mr Robert Fraser's evidence was that employees at Blueline ADE are assessed against ill-defined concepts such as motivation, which also impact their wages.

PN5252    

In cross-examination it appeared that much of the concern for managers of ADEs was not about the distinctions between competency and productivity-based classifications.  Mr Heath Dicken's evidence in cross-examination, for example, was that he did not have a particular preference for the ABI or Greenacres tools or the principles on which they were based.  But the heart of the matter seemed to be the impression that using the SWS tool, would put ADEs at a competitive disadvantage.

PN5253    

Mr Rohan Braddy's evidence was that by using the SWS they struggled to compete with other ADEs, but he acknowledged that if all ADEs were required to use the SWS, this would level the playing field.

PN5254    

VICE PRESIDENT HATCHER:  Well, it might level the playing field but it might reduce the overall size of the labour market, might it not?  That is, even if all the enterprises are charging the same higher price for their work, conventional economic principles will say that the demand for that will reduce and it will reduce the pool of available employment for supported employees, won't it?

PN5255    

MS LEIBHABER:  We don't believe there was evidence before the Commission that showed that the introduction of SWS would have that severe an impact on ADEs.

PN5256    

VICE PRESIDENT HATCHER:  But if the cost to the whole sector to the general economy was increased, that would lessen the commercial incentive for people to use the sector as distinct from other types of businesses, wouldn't it?

PN5257    

MS LEIBHABER:  I think that may be the case, but as Mr Harding said, there wasn't any probative evidence about what the increase of the cost of wages would be with the introduction of SWS.

PN5258    

VICE PRESIDENT HATCHER:  All right.

PN5259    

MS LEIBHABER:  We say that there is much irrelevant and unsubstantiated evidence provided that the traditions for the SWS as the only wage assessment under the award will cause ADEs to close.  Such statements are misleading and inaccurate.  While it is likely that the introduction of SWS will lead to some wage increases, there was also evidence that in some cases, there will be decreases as well.  But there's been no probative evidence that the move of the SWS as the only method of wage assessment will lead to closures.

PN5260    

That said, we do not say that the change should happen overnight.  Any decision for the SWS to become the sole tool, needs to be accompanied by a transitional arrangement.  We envisage this may take up to two years to complete.  This would need to include training of external assessors, training of internal workplace assessors to collect workplace data including training and the application for collection developed by DSS.  For the calculation and storage of data, setting of agreed benchmarks in workplaces, time to allow the collection of historical workplace data and given the large numbers of employees that would need to be transitioned, sufficient time for assessors to physically visit the ADEs and conduct assessments.

PN5261    

I will now turn briefly to ABI's proposal.  ABI is asking the Full Bench to insert a new classification structure for providing minimum wages for people with disabilities that sit below the minimum wage.  This would reduce the value of the job tasks done by workers with a disability.  Under the new classifications in the proposal, the only assessment of productivity is in the levels within each sublevel.  ABI's proposal also includes assessment supervision and personal support requirements in determining the value of work, even though as we've heard in the evidence, support and supervision are costs funded by the government.

PN5262    

Again, we say that valuing work differently because it is performed by an employee with a disability is discriminatory and prohibited by section 153(i).

PN5263    

In his opening submissions about the ABI proposal, Mr Ward stated that the Fair Work Act allows the Full Bench in this matter to set rates of pay for employees with disabilities which are lower than the minimum wage and compared this to the junior rates and apprenticeship rates.  We say this is not a valid or useful comparison.  Rates for juniors and apprentices cannot be equated with the classification structure ABI seeks to include into the award.

PN5264    

We say that there is no basis for ABI's proposal in section 153(3) of the Act which provides that the term of the modern award does not discriminate against an employee merely because it provides for minimum wages for junior employees, employees with a disability or employees to whom training wages apply.  The word 'merely' is important.  It indicates that a term providing for minimum wages for these category of employees is not in itself discriminatory, but that does not mean that any discriminatory term relating to this category of employees are permitted to be included in modern awards.

PN5265    

We say that consideration has to be had for the context of section 153, including the prohibition against discrimination in subsection 1.  The modern award's objective in section 134 and the broader object of the Act in section 3, which includes Australia's international leave obligations.

PN5266    

By comparison with junior rates, junior rates in modern awards are determined objectively, based on an employee's age.  They may be said to have a purpose to provide an incentive for employees to hire young people and that may assist employee in future employment, once they are no longer junior employees, as of course, being a junior is a time limited category of employment.

PN5267    

The wage rates in the National Training Wage, found in clause E.4 in schedule E of the Miscellaneous Award are also determined objectively, based on the highest level of scoring completed, how many years the employee has been out of school, the level of training as determined by the Australian qualifications framework which is a national policy external to the employer.

PN5268    

Again, this is a time limited category.  The employee must be enrolled in a recognised qualification to receive the rate and the training wage ceases to apply to an employee at the end of traineeship.  After that time, the employee will hold a qualification and presumably, as a result, have greater opportunities for employment and higher remuneration.  By contrast, ABI's proposal seeks to set wage rates below the minimum wage in the award for employees working at ADEs who are likely to be in these jobs for all of their working lives.  This is quite different to the junior wage and training wage contexts.  Moreover, under ABI's proposal, the classification of employees is a completely subjective assessment made by the employer.  It lacks the objectivity that applies to how junior wages and training wages are determined and is not suitable for employees with disabilities where a disability will affect every individual differently.

PN5269    

ABI do also not appear to have a sound evidentiary basis for their new structure.  Their proposal has not been tested or costed and ABI's own advocates did not seem to fully understand how the proposal functions; neither did the other parties supporting the proposal.  As Mr Harding mentioned, while the proposal intends to be a work value classification structure, it became clear that the draft provided, provides for an assessment of an individual employee's characteristics and the level of supervision provided to them, rather than the work value.

PN5270    

We believe that it would be a misuse of the Commission's time and that of the parties to have to go through an iterative process, as Mr Ward has suggested in his opening submission, in order to fix the flaws in the ABI's design.

PN5271    

VICE PRESIDENT HATCHER:  You say it is a waste of time?

PN5272    

MS LEIBHABER:  Well, given that the proposal does not seem to be based on evidence and does not appear to be tested or costed, when we have by comparison, the SWS which has been in place for a number of decades, which has the weight of evidence behind it.

PN5273    

VICE PRESIDENT HATCHER:  We have an ARDT report which is inconclusive about its adaptability to the sector, don't we?  I mean, it's a far from lay down misere that it's suitable for the sector, and that's after, as you say, 20 more years of use.

PN5274    

MS LEIBHABER:  But I think the modifications to the SWS has shown that that tool is capable of being - there have been modifications proposed and we would say that these can and should be tried in ADES.  We think that the SWS is the best - it's a difficult task, but the SWS is the best method of measuring wages.

PN5275    

VICE PRESIDENT HATCHER:  If, and it's a big if, if there was a decision to phase out wage assessment tools, it seems to be conceded that that would occur over a fairly long period of time and if there was determined to be a move toward a single new system, whatever that might be, that would give an opportunity to one, work out the details system and trial it before a final decision was made to implement.

PN5276    

MS LEIBHABER:  Yes, but we maintain that we would support the SWS over a new structure.

PN5277    

VICE PRESIDENT HATCHER:  Well, you haven't seen it yet.

PN5278    

DEPUTY PRESIDENT BOOTH:  Excuse me Ms - I'll get the pronunciation of your name correct.  Is it Leibhaber?

PN5279    

MS LEIBHABER:  Yes.

PN5280    

DEPUTY PRESIDENT BOOTH:  If the Commission did indicate a direction that it thought ought to be taken in this award, would the HSU be willing to be constructively engaged in further discussions about that nature of that change?

PN5281    

MS LEIBHABER:  Yes, we would.

PN5282    

DEPUTY PRESIDENT BOOTH:  Thank you.

PN5283    

MS LEIBHABER:  Thank you.

PN5284    

VICE PRESIDENT HATCHER:  All right, so Mr Bull, you want to deal with superannuation now?

PN5285    

MR BULL:  I can - I was going to make some brief comments about wage assessment.  Maybe it would be best if we deal with superannuation after lunch.  I'll have some discussions with the MDS, so Mr Musso might want to also speak when I speak about superannuation.

PN5286    

But I was going to make some very brief comments about wage assessment.  Do you want me to do it now, or - - -

PN5287    

VICE PRESIDENT HATCHER:  Yes, if that's suitable.

PN5288    

MR BULL:  I was just going to indicate, United Voice is broadly supportive of the claim of the ADE.

PN5289    

VICE PRESIDENT HATCHER:  You need to stand near your microphone Mr Bull and not wander about.

PN5290    

MR BULL:  We're broadly supportive of the claim of the ADE Legal Centre to replace the current wage assessment tools with the modified SWS.  I haven't attended every day of hearing, but I've noted some comments from you in relation to Nojin where you've correctly characterised the issue as the judgment held that the use of competency measures weren't reasonable; they were unreasonable in terms of the Discrimination Act and fell foul of that particular piece of legislation.

PN5291    

VICE PRESIDENT HATCHER:  Because they weren't relevant to the classification criteria.

PN5292    

MR BULL:  Because they weren't relevant to the work.  But it was indirect discrimination, was the problem that was identified by the Court, and it wasn't by any means a simple matter.  You had essentially four Federal Court judges reaching different decisions.  But the Full Federal Court, in the end, there is a clear principle which you'd enunciated that the so-called competency measures would appear to not be reasonable in terms of the Disability Discrimination Act.

PN5293    

Nojin, I suppose, put beyond doubt on 15 May 2013, when special leave to appeal to the High Court was refused.  There then - as Booth DP would know, it took some time, before that decision actually had any effect on the award.  Section 153 would appear to be fairly clear and it supplements the modern award objective insofar as when looking at terms of modern awards, terms that could be characterised as offending the human rights or anti-discrimination legislation, shouldn't be contained in modern awards. The majority judgment in Nojin, seemed clear that the so-called competency measures were discriminatory.

PN5294    

It took till 15 June 2015, that was when a consent order was made, deleting the BSWAT from this award.  As I indicated earlier, there were at least more than half a dozen conferences presided over by Booth DP and it was not readily apparent to the proprietors of ADEs, that Nojin presented to them any problem.  Although, it did appear that the Commonwealth was aware of the problem and during this period, a number of administrative exemptions were applied for and granted to the Commonwealth under relevant human rights legislation in relation to the continued use of the BSWAT.

PN5295    

One of the issues, and I'll make this a general impressionistic submission, because I haven't sat through all the evidence.  One of the problems which I think is a real issue in this area is that many of these wage assessment tools are opaque, as I think in an exchange you indicate that the award essentially outsources the determination of wages.

PN5296    

If you attempt to actually look at the industrial instrument to determine how a disabled person in an ADE's remuneration is determined, it's extraordinarily unclear.  If you look at the award, apparently, there's a number of government reports that you look at to determine the guidelines.  I understand the evidence is that there's vastly differing results.  Many of the guidelines and processes evolve over time.  There is no objectivity transparency or certainty.  That, we say is a fundamental problem which it is appropriate for the Commission to address in this review.

PN5297    

I was just looking at the award, and if you look at 14.4(d) they talk about final reports, one on 12 April 2006 and another one where apparently there are the keys to these wage assessment devices.

PN5298    

VICE PRESIDENT HATCHER:  But it no doubt will be said that all those criticisms can equally apply to the SWS.

PN5299    

MR BULL:  Well, less so.  Once again, I'm not an expert in this area, so I don't want to say too much.  At least, there is a schedule and so forth.  It does seem to be a more widely used system and there is greater transparency. It's by no means perfect, but it certainly seems far superior to many of these wage assessment tools that - - -

PN5300    

VICE PRESIDENT HATCHER:  If you look at D.5.1 of the award, what does it mean to say - - -

PN5301    

MR BULL:  I didn't catch the first bit.

PN5302    

VICE PRESIDENT HATCHER:  D.5.1.

PN5303    

MR BULL:  Is that in the schedule for the SWS?

PN5304    

VICE PRESIDENT HATCHER:  Yes.

PN5305    

MR BULL:  As I said, I'm - - -

PN5306    

VICE PRESIDENT HATCHER:  What does it mean when it says the productive test for the employee will be assessed in accordance with the supported wage system?  That, without saying so, suggests that there's some external document not even identified would govern how that was done.

PN5307    

MR BULL:  As I said, I'm not an expert in this area, and it's perhaps the best of the alternatives.  I'm not suggesting it's perfect, but it has greater transparency and certainty than many of the wage assessment tools that are currently available under the award.

PN5308    

VICE PRESIDENT HATCHER:  I'm not sure anyone picking up the award would know what the import of that statement is, or what it actually means.

PN5309    

MR BULL:  Well, it's problematic.  As I noted, the submission I wanted to make was a fairly general one, so I think as has been identified, 134.1(g), is a relevant consideration in that there is, I think, serious work to be done in this four yearly review, because Nojin has identified a significant problem with the manner in which remuneration is determine for employees of ADEs.  This obviously is a review, it's a survey inspection, re-examination, but looking back it's not an inter partes process.  We would be prepared to participate in any further processes that the Commission may consider appropriate.

PN5310    

We don't view that it would be a waste of time for the Commission to further review and engage in an iterative process in trying to solve this problem.  That's all I wanted to say about wage assessment.

PN5311    

VICE PRESIDENT HATCHER:  Are you going to turn to superannuation after lunch, then?

PN5312    

MR BULL:  That's what I was going to, yes.

PN5313    

VICE PRESIDENT HATCHER:  How long will - I mean, it might be easier if we turn straight to Mr Musso so we can hear his reply.

PN5314    

MR BULL:  Well, we've had some discussions, so.

PN5315    

VICE PRESIDENT HATCHER:  What's your position about that, Mr Musso.

PN5316    

MR MUSSO:  Your Honour, I was hoping to just address that in the terms of my closing submission, if I may.  We would like to present a proposal to the Bench, following some discussions with Mr Bull which provides a compromised position on a possible rate of increase in superannuation.

PN5317    

VICE PRESIDENT HATCHER:  If we hear from you straight after Mr Bull after lunch on that issue, is that satisfactory?

PN5318    

MR MUSSO:  That would be very satisfactory, your Honour.

PN5319    

VICE PRESIDENT HATCHER:  Then how long will you be Mr Ward because we need to hear from Ms Zadel today, too?

PN5320    

MR WARD:  Your Honour, I'm going to adopt whatever devices I can to be as efficient as I can. I'll certainly be more than an hour.  I'll be working very hard to be less than two hours.  In that regard, I've prepared some tables directing the Bench to various parts of the evidence which I'll hand up rather than go to in my oral submissions.

PN5321    

VICE PRESIDENT HATCHER:  How long will you need Ms Zadel?

PN5322    

MS ZADEL:  They'll just be short submissions, so 20 minutes should be sufficient.

PN5323    

MR BULL:  Dr Michael Wilson also wants to make a brief statement too.

PN5324    

VICE PRESIDENT HATCHER:  I know that.  All right, we'll now adjourn and resume at 2 o'clock.

LUNCHEON ADJOURNMENT                                                           [1.01 PM]

RESUMED                                                                                               [2.02 PM]

PN5325    

VICE PRESIDENT HATCHER:  Mr Bull.

PN5326    

MR BULL:  I was going to deal with my superannuation claim.  There's some evidence which hasn't formerly been tendered.  So there's a statement of Martin Schutz, there's no 'l' in it, and that's dated 25 September last year, and that's got some - - -

PN5327    

VICE PRESIDENT HATCHER:  Just hold on a second.  What was the date again?

PN5328    

MR BULL:  25 September.  That's the date the statement was made, 2017.  No one apparently had wanted to cross-examine or objected to that statement.

PN5329    

VICE PRESIDENT HATCHER:  The statement of Martin Schutz dated 25 September 2017 will be marked exhibit 181.

PN5330    

MR BULL:  There's also some material - one of the things the statement deposes to is the creation of a no insurance superannuation option and when the statement was made that option was well advanced but not completely public.  I've provided to the Commission some material on 31 January this year and that's been posted on the website.  It should be tendered in these proceedings.  It can be tendered as a bundle.  It's essentially the product disclosure statement for Super Only.  Then there's a two page pamphlet which is super and information for employers a form entitled Employer Application to join Australian Super Only. Could that material perhaps be tendered as a bundle?

PN5331    

VICE PRESIDENT HATCHER:  So we'll just call that bundle Australian super documents.  That will be marked exhibit 182.

EXHIBIT #182 AUSTRALIAN SUPER DOCUMENTS

PN5332    

MR BULL:  I've made a written submission in relation to our claim. I briefly - when I opened I sought to summarise that submission.  I seek to rely on that submission and hopefully that explains the claim.  There have been some discussions with the - the only participant in this review that has addressed our claim is the NDS and they have addressed it in a submission.  There's no evidence which has been directed towards the claim other than the evidence that I've just tendered.  So the contrary view is that put by the NDS in their submission dated November 2017.  Mr Musso can perhaps speak for that organisation but my summary - they're objecting to it on the basis that this is not a specifically funded - the increase wouldn't be a specifically funded matter and therefore the Commission shouldn't approve of it because there is a specific line of funding.

PN5333    

The point I would make in relation to that is that we have the - the funder is at least observing these proceedings and we've alluded to transitional arrangements in that the Commission has the power to make any increase staged over a period of time, and it would be appropriate if you're minded to approve our variation to the superannuation clause to perhaps have a transitional arrangement which will allow two things for funding to be adjusted to accommodate what I would say is not a significant increase. But also there's the matter of organisation's internal management.

PN5334    

The only evidence other than the evidence of Martin Schutz was some of my cross-examination of Chris Christodoulou and the effect of that cross-examination - - -

PN5335    

VICE PRESIDENT HATCHER:  Christodoulou.

PN5336    

MR BULL:  Christodoulou, sorry.  Too many Chrises.  And the effect of that cross-examination was that Greenacres is an ADE which doesn't have exceptional funding arrangements and it has managed in its management of its employees to pay to them a super contribution which is in excess of the award.  Their percentage is, from memory, if you go their agreement which is in the second statement.  Sorry.  I've got the wrong statement.

PN5337    

If you look at Mr Christodoulou's statement dated 15 November last year, in the current enterprise agreement they pay 9.5 - they have a formulation which mirrors the award, so for people earning less than $450 a month they get either 9.5 per cent of their ordinary earnings or $9.87 per week.  The percentage amount will generally be the operative amount because it will generally be higher than the dollar amount.  The point being is that they don't have exceptional arrangements. They've made a decision to structure their budgets in order to pay that extra amount which provides to meaningful superannuation outcomes.

PN5338    

One other brief matter which I might elaborate on which is alluded to in the submission is that it's a bit uncertain as to what exactly the effect of the NDIS will be on super arrangements.  The NDIS apparently will not apply to people over the age of 65, although I am informed that there are arrangements where people currently in the NDIS will - there will be some transitional arrangement where whatever support or assistance they're receiving that will then - they'll continue to get that after they turn 65.  It's apparently quite uncertain as to whether that will be the case and as with a lot to do with the NDIS, the details are not settled and it's uncertain as to what the precise conditions and entitlements will be.

PN5339    

The stated intention of that scheme is that it won't provide for people over the age of 65.  I would say that that uncertainty is something in support of increased superannuation.  It appears a likely outcome that the government - the expectation is that disabled people will have the support and the wider assistance of an NDIS and then when they turn 65 they go on the aged pension, which has diminished support and so forth.  So that I say is an argument in favour of more effective superannuation entitlements, because they will need it when they turn 65 because the other supports and so forth may not be available.

PN5340    

The discussions I've had with Mr Musso really involve the numbers. I don't know whether Mr Musso wants to address what - they were in conflict (indistinct) without prejudice discussions but there was a bit of argy bargy with numbers so perhaps if Mr Musso addresses that.  The issue we had is that - - -

PN5341    

VICE PRESIDENT HATCHER:  Just so I'm clear, have you reached an agreement or what's happened?

PN5342    

MR BULL:  No.

PN5343    

MR MUSSO:  No, your Honour.

PN5344    

MR BULL:  But I understand Mr Musso is going to distribute his figures.  I didn't want to do it because they're his to provide.

PN5345    

VICE PRESIDENT HATCHER:  Well, why don't you just finish your submission and then we'll hear from Mr Musso.

PN5346    

MR BULL:  My basic submission is look, it's a matter for you in terms of where you land in terms of numbers and so forth.  My principal concern is that our claim has 9.5 as the relevant percentage and that is derived from the fact that 9.5 is the percentage of ordinary income that applies generally in relation to superannuation.  I don't mean to be sort of difficult but it seems to me that that's an appropriate number to maintain in that it reflects what the general community expectation is in relation to superannuation.  The problem is that if you have 9.5, the percentage will generally be the greater amount and will be the amount paid.  So if you're earning $100 a week and you earn $400 a month, 9.5 of that is more than $15.  I would be hesitant to drop below 9.5.

PN5347    

We've outlined in our submission the principal reason for review and change is that the current figures are hopelessly outdated. They essentially haven't been changed since 1991.  With the no super option or no insurance option rather which doesn't - the advice I've received is that there's no need to change the award because the no insurance option can be accessed administratively, and Australian - provided that Australian Super remains the default fund for this award, employers basically indicate which sort of silo they want their employees to go into and they get administratively placed in divisions and so forth.  Without any change to the award, the superannuation situation of disabled workers will be better because they won't be paying for superfluous insurance, but we say that it is appropriate to have the percentage reflect the general obligation in relation to superannuation.  That's all perhaps I want to say.

PN5348    

VICE PRESIDENT HATCHER:  Thank you.  Mr Musso.

PN5349    

MR MUSSO:  Thank you, your Honour.  If I may, I wanted to provide a bit more detail on NDS's traditional position on this matter, and provide some of the relevant social policy background as well.  Now as we know, when the superannuation provisions that exist at the moment were included in the award, they were over and above the existing low income earner provisions for workers in the Australian economy, and in regards to some historical context, when the government initially established the current superannuation system, they did so in order to keep people who earned an adequate income during their working lives from accessing the social welfare safety net in their retirement.  So it was designed basically to keep people who could make arrangements for their own retirement out of the social welfare safety net.

PN5350    

VICE PRESIDENT HATCHER:  That's not really the way it turned out.

PN5351    

MR MUSSO:  Pardon me, your Honour?

PN5352    

VICE PRESIDENT HATCHER:  That's not really the way it turned out.

PN5353    

MR MUSSO:  Well, I think sometimes people's best intentions don't always come to fruition but I digress.  Consequently, because the existing arrangements were over and above the existing low income earner provisions which I would remind the Commission still do exist and they relate to people earning less than $450 a month not being subject to superannuation contributions.  In order to attempt to negotiate with United Voice in respect of the requested superannuation increase, we traditionally opposed their original application because it basically sought or it would have basically resulted in an additional impost on our members as employers, and I also have my own particular view on the utility of the rate of increase as well.  Which again comes back to Mr Schutz's figures provided in his role as actuary with Australian Super.

PN5354    

We didn't raise anything about his figures because there really wasn't any reason to question them.  I'm an economist and I have to say his figures stood up to scrutiny.  The only thing I would say is that they were slightly misleading in that they placed an emphasis on the future value of current payments and if you go back and look at his evidence, you'll see that he's got a line that mentions the current value of those payments in current dollars.

PN5355    

Now again, what we have done is in addition to try and - we would like to advocate a compromised position on an increase to the super rate.  This position sets out what we consider to be a more reasonable rate for employers and one which will allow supported employees to accumulate more superannuation for their use in their retirements.  Should the Commission make a decision that increases the superannuation contribution rate, NDS would strongly advocate that the compromised rate advocated by us and the employer parties be adopted.  We would also advocate, as Mr Bull has already indicated, that it would make sense for any increase to be phased in and I would like to provide detail on the compromised position for the Commission's consideration.  I developed a table yesterday afternoon.  It sets out the current superannuation provisions and compares them to the United Voice proposal and the NDS proposal.

PN5356    

In a nutshell, the existing rate, 3 per cent or six bucks, whichever is more, the United Voice proposal 9.5 per cent or $15, whichever is more and our NDS compromise proposal which is 6.25 per cent or $10.50 which would be phased in over a period of three and a quarter years.  I've got some comparison figures there for a supported employee who receives the average hourly rate and works the average weekly hours, and a supported employee who earns that average rate who works full-time, and I'd like to provide that to the Commission if I may.  It is lacking significant explanatory detail but I'm more than happy to provide that to you.  I might leave it at that if that's all right.

PN5357    

VICE PRESIDENT HATCHER:  Let's have a look at this first.  So just to be clear, to understand this correctly, your primary position is no change.

PN5358    

MR MUSSO:  It originally was but we've accepted that the Commission may make a decision to increase the rate.

PN5359    

VICE PRESIDENT HATCHER:  If we do that you want it done in accordance with this proposal.

PN5360    

MR MUSSO:  We would like it to, yes.

PN5361    

VICE PRESIDENT HATCHER:  Right, can I just understand this.

PN5362    

DEPUTY PRESIDENT BOOTH:  May I ask a question while you're trying to understand?  Just a quick question.  In general awards and enterprise agreements and as I ask that - as I make that distinction I realise there might be a distinction.  Where the provision refers back to the SGC amount, it's usually the same provision that indicates the default award, do you know what happens when a worker's income temporarily falls below the 450 threshold in a month?  Perhaps a part-time worker.  Does the employer's obligation to pay 9.5 per cent super on that amount go away or does it remain?

PN5363    

MR MUSSO:  My understanding, your Honour, is that it's dependent on the amount of income the person earns in a month, the contribution, and if it was to fall below that amount my - I would believe that that low income earner provision would kick in and if the income didn't exceed $450 there would be no superannuation contributed on that employee's behalf.

PN5364    

VICE PRESIDENT HATCHER:  Is there any - sorry.

PN5365    

DEPUTY PRESIDENT BOOTH:  This is a different question entirely.  Nobody's mentioned yet - no one's mentioned the effect of the change in the modification to the supported wage system which has been adopted in the award and comes into effect on 1 July and the change from the $84 to the 12.5 per cent, and the fact that that might result in some people earning even less than $84 a week, I imagine that the threshold and the provision that was inserted some time ago had some reference to the $84 multiplied by 4, did it or no relevance at all?

PN5366    

MR MUSSO:  No, I don't believe it did, your Honour.  If you have a look at the award, the existing clause is very clear.  It just specifies the 3 per cent or the $6, whichever is greater.

PN5367    

DEPUTY PRESIDENT BOOTH:  Yes, but to people who earn less than $450 a week.

PN5368    

MR BULL:  Yes.

PN5369    

MR MUSSO:  No, no, it applies regardless of what they earn.  It was designed to ensure that the supported employees who were, say, earning 100 bucks a week would still be having super contributed on their behalf.

PN5370    

DEPUTY PRESIDENT BOOTH:  So you mean to say that employees who earn more than $450 a week under this award would also only now be entitled to less than the superannuation guarantee.

PN5371    

MR MUSSO:  No, they would be paying at the existing rate specified in the award.

PN5372    

DEPUTY PRESIDENT BOOTH:  In the award?

PN5373    

MR MUSSO:  Yes, that would be my understanding, yes.  The clause in the award applied over and above the existing low income earner provisions. That's why it was introduced.

PN5374    

DEPUTY PRESIDENT BOOTH:  There's a number of features to this then.  Thank you.

PN5375    

VICE PRESIDENT HATCHER:  Just to be clear, the 6.25 per cent, is that just a figure halfway between the current 3 and the proposed 9.5 is it?

PN5376    

MR MUSSO:  You're very observant, your Honour, yes.

PN5377    

VICE PRESIDENT HATCHER:  Right.  Mr Christodoulou, were you going to assist us in some fashion?

PN5378    

MR CHRISTODOULOU:  I hope I can.  I was the designer of the original clause that's been left unchanged.  It actually went into the flagstaff award which is an exhibit in my - in one of my statements.  So the intention clearly was at that point in time back in 1991, there was only a 3 per cent superannuation guarantee and we said at that point in time the minimum someone with a disability should receive is $6 irrespective of the $450 threshold. So that's the way it's intended.  So now that it's 9.5 per cent, the award has not reflected the 9.5 per cent.  So really the award needs to be updated I think in that respect.  So really it should apply in this way, that a person would get 9.5 per cent or if they earn less than $450, either one of the flat amounts that are being put forward by United Voice but obviously we support the compromised flat amount that's being put forward by NDS.  So it should - the award should really be 9.5 per cent or the flat amount if you don't - if you earn whatever is greater, if you're earning less than $450.

PN5379    

VICE PRESIDENT HATCHER:  So what's the flat amount in the Greenacres agreement?

PN5380    

MR CHRISTODOULOU:  I think it's $9.89 at the moment.

PN5381    

DEPUTY PRESIDENT BOOTH:  The reason why that should occur in this award as compared to all other awards where people's wages may fall below the low income threshold at any one point in time or permanently, is because of the special nature of supported employment and the likelihood that wages would be very low.

PN5382    

MR CHRISTODOULOU:  That's right, and we do have situations where people's wages can fluctuate from week to week and month to month, so when they do and they fall below the $450, well in our case we still pay the $9.89.

PN5383    

DEPUTY PRESIDENT BOOTH:  Thank you.

PN5384    

MR BULL:  I was going to just indicate - - -

PN5385    

VICE PRESIDENT HATCHER:  Just a moment.

PN5386    

MR BULL:  Sorry.

PN5387    

VICE PRESIDENT HATCHER:  Have you got anything else you want to add, Mr Musso?

PN5388    

MR MUSSO:  Not at this point, your Honour.

PN5389    

VICE PRESIDENT HATCHER:  Right.  Mr Bull?

PN5390    

MR BULL:  Just something which may interest which is actually part of the Deputy President's question.  There's a provision in the hospitality award where there's an obligation to make contributions if the employee earns less than 350 a month.  So there are other provisions in the modern awards.

PN5391    

VICE PRESIDENT HATCHER:  Is that a flat amount?

PN5392    

MR BULL:  That's what it says, yes.

PN5393    

VICE PRESIDENT HATCHER:  What is it?

PN5394    

MR BULL:  If they earn more than 350 per month there's an obligation to make superannuation contributions.

PN5395    

DEPUTY PRESIDENT BOOTH:  You mean in other words the 100 - the difference between 450 and - they've changed the low income threshold, they've lowered the threshold.

PN5396    

MR BULL:  It's not threshold, it's not - yes, they've lowered it.  So - - -

PN5397    

DEPUTY PRESIDENT BOOTH:  In light of again the low paid nature of that sector.

PN5398    

MR BULL:  The episodic nature of the work in that particular sector.  So there are other terms in modern awards that - - -

PN5399    

DEPUTY PRESIDENT BOOTH:  There are examples of tailored arrangements, yes.

PN5400    

MR BULL:  I note that in my submission at paragraph 35.

PN5401    

DEPUTY PRESIDENT BOOTH:  Thank you.

PN5402    

VICE PRESIDENT HATCHER:  Thank you.  Mr Ward.

PN5403    

MR WARD:  I don't think it's me, your Honour.

PN5404    

VICE PRESIDENT HATCHER:  Who's next?  Mr Wilson.

PN5405    

MR WILSON:  Thank you, your Honour.  To start with I should say that until this morning I didn't know I needed to actually appear to have my submission that I wrote on 22 December considered as part of your final decision.

PN5406    

VICE PRESIDENT HATCHER:  Well, I don't know who told you that but you didn't, we would have considered your submission but since you're here, go ahead.

PN5407    

MR WILSON:  No worries.  I'll be very, very brief and obviously my submission would provide some information and support the approach taken by AED Legal.  I should also say just quickly that I am here of my own volition, I'm not part of anyone here at all.  I'm self-funding last week in Melbourne, this week in Sydney and my wife is contributing as well as she regularly reminds me.  Very regularly.  I just would like to say that what I've heard over the last two weeks has all been around ADE viability.  Let me go back one step.

PN5408    

First of all there is no greater supporter in this room of ADE's I should also say.  I am, as my submission says, and I won't rehash it but I am product of an ADE and I'm very, very thankful for the opportunities that it's provided me.  I've been involved with the sector in various forms and different angles right through my life including right now, and I had the opportunity - it was presented a few years ago but to actually do a doctorate and I thought this is a great opportunity for me to actually try and give back to the sector.  The topic of that doctorate, my thesis, which resulted in me becoming a doctor of business administration, was the viability of ADEs.  I only took it from the perspective of ADEs, I didn't look at what government could do and so forth, so I only looked at what ADEs could do to help themselves.

PN5409    

I had 18 findings, they had to be restricted.  Again that was self-funded as well, that study, so I had to both for academic purposes and for my own pockets purposes, I had to restrict the amount of findings I had.  There was 18.  There could have been many, many more and each one of the 18 findings I had to do some further research, but what I'm trying to say here is there are a number of factors including the wage rates of supported employees that contribute to the viability of ADEs.  The wage rate is just one factor, a relatively small factor from my findings, and there's a lot that the ADEs themselves could be doing themselves but there's a lot of stuff that's completely out of their control.  It does need and I had to dob my ex-department colleagues in, it does need a lot of government support, not necessarily funding as such but a lot of support.  So that's my statement really.  Thank you for your time.

PN5410    

VICE PRESIDENT HATCHER:  Thank you.  Mr Ward.

PN5411    

MR WARD:  Thank you.  Can I explain the flow of our submissions this afternoon first.  I want to first of all start on a happy note.  There actually is a point of universal agreement between everybody and I think it's worth stating.  I then would like to examine the pros and cons of all of the existing tools and I'm going to attempt to try and paint a balanced perspective from the evidence rather than a partisan perspective.  I'm then going to discuss our claim under three headings. The first is can you grant the claim.  The second is should you and the third is how should you.  After that I intend to discuss the claim to remove all existing tools other than the SWS.  I'll then deal with what has been described as the tension in our position between asking to put something in the award and still supporting the existing tools.  I'll wrap up my making a very small number of comments in reply to specific matters rates by those to my left today.

PN5412    

VICE PRESIDENT HATCHER:  Just to be clear, you're making a positive submission that leaving aside your application existing tools to the extent they're used should remain permanently in the award?

PN5413    

MR WARD:  Well, your Honour, can you wait to hear how I put it, it will be crafted with some nuance, I can assure you.

PN5414    

VICE PRESIDENT HATCHER:  Right.

PN5415    

MR WARD:  The point of universal agreement I don't think should be lost and that is that it appears that everybody who's represented at the Bar table accepts that in some circumstances persons with a disability should be paid less than classifications applicable in modern awards today, and that seems to be universally agreed and it shouldn't be lost sight of.

PN5416    

There obviously is a great deal of debate about how one arrives at that proposition.  When I examine the tools that operate today and I'm going to talk first of all about what all of the tools have in common in terms of their positive and negatives, including the SWS, and then I'll talk briefly about what I think are positives and negatives of the SWS are.  The rest I'm going to categorise because the rest predominantly seem to fall into one big lump of what I call hybrid tools.  That is they are competency and output based, with one exception which seems to be the AMORO tool, which I'll come to right at the end.

PN5417    

I think in terms of the positives, the Bench shouldn't lost sight of this proposition, all of them including the SWS seek to assist people with disabilities access employment and that is whether or not it's in an ADE or open employment.  That is a fundamentally important issue for the Bench to consider, particularly in the context of section 134(1)(c) which requires the Bench in setting the safety net to have regard to workforce participation.  That is a very, very important issue.

PN5418    

As far as the evidence goes, none of them involve a question and answer format which was one of the major criticisms with BSWAT.  I haven't seen any evidence in these proceedings to suggest otherwise. They all involve some form of observed assessment. They all appear to set a floor below which nobody can fall. Some of those floors are a little higher than others but they all at least set a floor.  None appear to arbitrarily prevent an employee being paid the current full award wage, that is they all allow somebody at some point, if they're competent to get there.

PN5419    

None of the tools appear to link to the AQF certification framework in relation to their competencies which was again another major criticism of BSWAT, particularly my McKenna J.  None of the tools appear to score employees for work competencies they will not be using, which again was another issue in BSWAT and in Nojin.  I just pause there.  There's a very difference between saying I'm going to score you against a competency you'll never use versus I'm going to pay you for competencies you hold but might only be required to use occasionally.  The latter should be entirely uncontroversial and entirely acceptable to this Commission. This Commission's long moved away from saying you simply get paid for the task you're doing this minute, you get paid for the suite of capability you bring into the workplace and you use that capability as required by the employer.

PN5420    

The controversy - - -

PN5421    

VICE PRESIDENT HATCHER:  So just to understand the submission.  You've established between BSWAT, which actually gave you a score of zero for competencies not used but you've turned that on its head and said there's nothing wrong with paying you extra for competencies which you are capable of using and might be required to use?

PN5422    

MR WARD:  From time to time, yes.  There seems to be some view that you only get paid for what you're doing this minute and I just wanted to disavow that concept.  There's nothing wrong with paying you for the capabilities you hold.  You might only use one irregularly and you might do others a lot.  The converse of that which was the evil in BSWAT was that you had competencies that were irrelevant, never going to be used but you still got scored against them which automatically dragged you down.  I don't see any of that in the tools we've seen in this case.

PN5423    

Now all of the tools suffer from some negatives.  All of them, including SWS, including Greenacres, all of them, can give rise to similar work in different organisations being paid at different rates.  That would seem to be quite a challenging concept against the notion of setting a fair and relevant minimum safety net that is simple and stable.  I acknowledge straight away that that really does present a challenge to the very foundation stain of what 134 in the modern award's objectives all about, but they are all infected by that to some degree, in some circumstances.

PN5424    

None of them involve a valuation of work contemplated in the traditional sense by a tribunal.  All this tribunal, its predecessors have allowed these things to evolve.  There's never been a forensic examination of the work they've performed and a value attributed to it, and they all suffer from that.  Importantly, none of them are in the award requiring interested parties to locate them and that does seem again to create a challenge in relation to 134(f) in relation to simplicity and the like.  I'll come back to that a little later in our submissions in relation to an authority on that.

PN5425    

If I turn to the SWS, it has a serious of negative features. They should be uncontroversial.  They came very much out of the evidence from Mr MacFarlane.  The first one is the so-called benchmark is negotiated.  It's haggled.  It can be haggled for the same work differently in one place to another.  As Mr MacFarlane says sometimes he has to convince the employer, who knows how that leads into the negotiation, one can only wonder.  But it's a negotiation and Mr Cain accepted that as a proposition as well.  Obviously, the problem with that is it means that I could haggle a different benchmark for the same work in lots of places and I could end up with a different rate of pay for the same work.

PN5426    

We say that one of the strange inequities of the SWS is also this.  That having negotiated the benchmark and having accepted that you're going to have your rate of pay determined on output, you can go down from 100 per cent but if you beat 100 per cent you can't go up.  That just seems to be almost unfair.  If I say to an employee, I'm going to pay you based on how you go against this benchmark, it seems strange that if you go below you get less, but if I'm actually more productive, which is what output's all about, it just seems strange I'm not going to pay you more. That seems to be a real inequity in the way the SWS operates.

PN5427    

Lastly, and I acknowledge that this is not uniformly coming through in the evidence, there is some competing views on this, but there is a question in the SWS about how effectively it comparatively assesses complex work against simple work.  Now  there is clearly some evidence before you which says that you don't need to worry about that, but you have evidence from a number of the operators giving you practical experience that they have legitimate concerns that a person doing complex work could do it slower, compared to a person doing simple work doing it faster and therefore somebody doing simple work could end up being paid more than somebody doing complex work.

PN5428    

VICE PRESIDENT HATCHER:  Well, the same question might arise between someone who can do one simple task as against somebody who can do a range of simple tasks and it's not about complexity, it's about the multitasking aspect.

PN5429    

MR WARD:  I agree, your Honour, it has a number of facets to it.  Lastly, and this came out of the cross-examination of Mr MacFarlane, Mr MacFarlane said in his evidence that if I'm assessing people on a production line, you turn the production line down first to the ability of the slowest performer and then you do the assessment based against that.  That seems to build in an entirely artificial factor for those workers who are more capable.  That seems to be quite a strange proposition because it artificially inflates the rates of faster workers because if you slow the line down they can get to 100 per cent a lot easier, than if you actually ran the line at the speed they can cope with.  That does seem to be a challenge for the way the SWS operates.

PN5430    

The SWS has some features that are positive and I don't say this is a facetious sense. The first one clearly is it's funded, that is the assessment is funded.  And it would appear to be a reasonably high cost.  I think the evidence with Mr MacFarlane was he gets $600 for his three or four hours.  He gets a top up payment on top of that so it's not a cheap exercise.  The other one is this.  It seems very well suited to open employment dealing with a person who has a physical disability and I'll explain what I mean by that.  I note that I think Mr Cain and a lot of other people have already said that only about 4 per cent of people with intellectual disability are in open employment.  So the primary focus, I think, is - yes, your Honour, I think that's the case.

PN5431    

VICE PRESIDENT HATCHER:  I though the figure was 11 per cent.

PN5432    

MR WARD:  Your Honour, I'll go with 11.  It's a small number.  It's a small number.  But let me put this to the Bench.  You could see a situation where somebody might go to an open employment employer who has a disability that's physical in nature.  Let's say they've lost an arm, a quite serious disability.  They're capable of doing the whole of the job of the retail worker but because of that actual disability there are some functions that they just perform simply slower.  You might see in that circumstance where the SWS has some acceptable logic to it, in that the employer might say well, I'm prepared to make some reasonable adjustments but I'm not prepared to go as far as accommodating you because for A and B you're just that slow, and the SWS creates this compromised arrangement that the employee otherwise does the whole of the job.

PN5433    

VICE PRESIDENT HATCHER:  So was there a figure about proportion of disabled people in open employment who did not have an intellectual disability?

PN5434    

MR WARD:  Your Honour, can I take that on notice and I'll get Mr Zevari to pick that up.  Now when you look at what I call the proprietary tools, which are the tools such as the Greenacres tool and the like, they based on the evidence in these proceedings appear to be hybrid in nature, they have some competency classification structure evaluation and within that you can be more or less proficient based on output and you'll give an additional reward.  They all - I'll just pause, your Honour.  They have some negative features and I don't want to try and pretend they don't. They're complex, there's no doubt about it, they're complex.  Any time you have a multi-feature way of determining something, it's complex, you can't hide from that.  Some clearly based on the evidence have some elements of discretion, requiring a very considered exercise of judgment.  That just adds some negativity, it's a bit like a negotiation from the benchmark in SWS.

PN5435    

Some of those tools have been borrowed from their designers and put into other places.  The simple reason I raise that as a potential negative is simply this.  Where a tool evolves in a particular enterprise that enterprise develops a very strong understanding of how to effectively implement it and when you move it into a new setting, somebody borrows it and puts it into their workplace, it does raise questions of how effective the training and application is by comparison.

PN5436    

Probably lastly, it should be said that for those tools that create classification bands and attributed value of wages to them, simply put those wages and those values haven't been blessed by this tribunal for work value reasons.  They've evolved out in the market place.  Your Honour asked me earlier about - - -

PN5437    

VICE PRESIDENT HATCHER:  So really apart from the starting point of the wages that came from the award, those really don't bear any real relationship to the award at all.  That is they're sort of like a home grown classification structure by themselves.

PN5438    

MR WARD:  Yes, and they probably are akin to two scenarios.  One might say they have some features similar to say an enterprise agreement might have.  The other one simply would be that they - - -

PN5439    

VICE PRESIDENT HATCHER:  Except there's no BOOT.

PN5440    

MR WARD:  Sorry?

PN5441    

VICE PRESIDENT HATCHER:  Except there's no BOOT involved.

PN5442    

MR WARD:  That's true, your Honour.  Having said that of course, some are actually in enterprise agreements that have gone through the BOOT.  The Greenacres tool's a good example.  The other thing - the other way to put it and I'll come to this when I come to the can you do what we're asking.  It's really an industry who's involvement in wage fixation is very, very immature.  Most Australian workers have been involved in wage fixation in some form or another for over 100 years now.  Given the slow worker regime and the Ronalds Report goes to this and it's in evidence.  Given the slow worker regime that existed for many years in this country, most of these employees were actually legally outside of the industrial relations system.

PN5443    

So you've got to understand that this is a group of employers and employees who their industrial relations journey is probably only as old as perhaps the early - mid 1980s, 1990s.  So it's a bit like an industry presenting itself for the first time when a Commission makes a first award.  It's sort of found its own way through a whole variety of ways, regulation, union involvement and you're looking at it for the first time and it kind of presents very much like that, it has that feel.  I'm going to come back to that later on.

PN5444    

The positive features of the proprietary tools are that they develop themselves through application to actual work performed and as such the competences in them are more likely to be relevant to the work being undertaken.  I won't go to this but can I just give some quick references.  The statement of Rob Kirkham, the statement of Tanya O'Shea, Anthony Rohr, Chris Christodoulou and those statements respectively are 25 of the 9th, 25 of the 10th, 21 of the 9th and 21 of the 9th and then Mr Rohr's second statement which is 21 November 2017.  Those statements talk about the application of competencies in the tools as they relate to actual work performed.  That's a positive.

PN5445    

The other positive is they've been tested over time in situ.  Many of them pre-BSWAT, so there is a level of applied understanding and knowledge in those workplaces as to how they operate.  Some have the support of unions.  Now I'm an old fashioned guy, I think that's a good thing.  What it tells you is that the people who under the industrial relations system are empowered to look after the industrial interests of people, have been involved. That's clearly the case of Greenacres at Yomaro.  We heard that the union appeared to even design the tool on behalf of the employer and it was the case also at Bedfords.  That's a good thing because it reinforces industrial harmony in those workplaces.

PN5446    

They're positive because they're very, very strongly supported by employees and their guardians and families, and we'll come to that later but there's a wealth of evidence been put on about how families and guardians support and value their charges and children working in ADEs.  It is relevant to note that no union member has appeared here to say otherwise.  In fact it's almost a unique four yearly review proceeding.  It's the only proceeding I've been involved in where no union member has come forward to give evidence.  We say the voice of the employees, their guardians and families are very important to the notion of fairness in section 134.  They provide for a more proficient employee within a classification to receive additional payments and while that notion might be very novel in the context of setting minimum rates, at least it's a positive proposition. That is when classified somebody who's more proficient can get paid more.

PN5447    

Separate to the hybrid models, there is the Yomaro tool and EA, and I have to say that when you read that - sorry, bear with me - it's exhibit 46.  I won't take you to it for time reasons, but when you read that enterprise agreement which as I understand encapsulates their tool, it reads in a way that's industrially quite common place.  It identifies tasks based on their complexity, it gives the rate of pay and that seems to be a far more industrially accessible model than all the other models.

PN5448    

So those are the pros and cons of the models before you and let me come now to the question about claim and can you include it in modern award.  Our answers is yes, you can and it is necessary for me to explain given the submissions against me, particularly by the HSU why that is the case.  There are a number of sections in the Act which bear upon your ability to include what we ask in a modern award.  They must be read harmoniously and I'll just refer to them and then take you to them if I can.

PN5449    

Sections 136, 139, 284, 153(1), 153(3) and 578, and if I can ask you to go to the Act. Some of this will be entirely uncontroversial but I'll do it for completeness.  If you start at section 136.  Section 136 deals with what is permitted or required for modern awards and our focus in section 136 should be termed to section 136(1)(a) referencing Subdivision B, and it should also be termed to section 136(2)(a), referencing Subdivision D.  Subdivision B deals with terms that may be included in modern awards and Subdivision D deals with terms that must not be included in modern awards.

PN5450    

If we turn firstly then to section 139.  Section 139(1)(a) is in the following terms:

PN5451    

A modern award may include terms about any of the following matters: (a) minimum wages (including minimum rates for junior employees, employees with a disability and employees to whom training arrangements apply).

PN5452    

Pause there.  It's expressly anticipated that modern awards will include terms - I'll come back to the use of the word "terms" later on - for minimum wages and it's expressly acknowledged that those minimum wages can differentiate people with a disability, as they can juniors and people in training arrangements such as apprentices and the like.

PN5453    

If I ask the Bench then to jump to section 284.  We start relevantly with what is described as the minimum wages objective.  Can I say straight away that the minimum wages objective is relevant by force of 284(2)(b).  284(2)(b) says that:

PN5454    

The minimum wages objective applies to the performance or exercise of: (b) the FWC's functions or powers under part 2-3 -

PN5455    

As the Bench would be aware part 2-3 includes 139 et cetera -

PN5456    

so far as they relate -

PN5457    

and these words are important -

PN5458    

setting varying or revoking modern award minimum wages.

PN5459    

The minimum wages objective itself gives us some very clear guidance as to what must be done and that arises in relation to 284(1)(e), and that is that:

PN5460    

The Fair Work Commission must establish and maintain a safe net of fair minimum wages, taking into account: (e) providing a comprehensive range of fair minimum wages to junior employees, employees to whom training arrangements apply and employees with a disability.

PN5461    

That objective colours the exercise of your discretion we say in these proceedings.

PN5462    

If I ask you then to turn to - - -

PN5463    

VICE PRESIDENT HATCHER:  Before you move on, paragraph (d) in this section, does that have the same gender meaning as it does in relation to equal remuneration orders or is it simply "equal remuneration for work of equal or comparable value", full-stop, regardless of gender, disability, anything?

PN5464    

MR WARD:  Your Honour, I apologise, I don't have the authorities in front of me but I think this matter's been subject to some consideration by quite a number of Full Benches.  Our view is that phrase as it appears in 284 as it appears in 134, gains its relevance from vehicle remuneration provisions in the Act, and I think that's been held by well over half a dozen Benches already.  That's our view.

PN5465    

VICE PRESIDENT HATCHER:  Right.

PN5466    

MR WARD:  If one goes to 284(3) - - -

PN5467    

VICE PRESIDENT HATCHER:  When you get a chance, can you just send me a note to that effect?

PN5468    

MR WARD:  Yes, the references?

PN5469    

VICE PRESIDENT HATCHER:  Yes.

PN5470    

MR WARD:  Yes, your Honour.  You then get in (3) the meaning of modern award minimum wages.  It says:

PN5471    

Modern award minimum wages are the rates of minimum wages in modern awards, including: wage rates for junior employees, employees to whom training arrangements apply and employees with a disability.

PN5472    

This is again reinforcing the proposition in 139 that rates can actually be provided in modern awards dealing with people with a disability separately to others.  284(4) is relevant and I'm going to raise this and what it means even though it causes me something of a niggle in our position, not one that causes any major difficulty but it's important to say.  (4) says this:

PN5473    

Setting modern award minimum wages is the initial setting of one or more new modern award minimum wages in a modern award, either in the award as originally made or by a later variation of the award.  Varying  modern award minimum wages is varying the current rate of one or more modern award minimum wages.

PN5474    

I simply need to go to that for this reason.  I think properly put, what our claim asks to be done, it asks you to set minimum wages for people with disabilities in an ADE, rather than varying the existing minimum wage.

PN5475    

I just need to put that as a point of distinction.  If one then turns to section 156 and in particular 156(3), this is the section dealing with work value reasons in a four yearly review.  Section 156(3) is in these terms:

PN5476    

In a four yearly review of modern awards, the FWC may make a determination varying modern award minimum wages only if the FWC is satisfied that the variation of modern award minimum wages is justified by work value reasons.

PN5477    

It could be said that work value reasons are only invoked when you're varying rather than setting, it could be argued they're actually invoked on both occasions.  I think our submission in relation to that would simply be this.  If you are setting and you form a view that work value reasons are not relevant, then what you should consider are the historical approach to setting, that is the first award principle's approach, and the primary consideration there is the rates actually existing in the marketplace at that time. But we are comfortable for the Commission to take an approach where it applies work value reasons to valuing the work in an ADE when you look at our claim, and I'll talk about this a little later on, when you look at our claim we've probably done a little bit of both in the sense that we have tried to calibrate some of our rates against what is there now but we've also tried to make sure that we've probably equated value.  As Mr Christodoulou said he's done some rudimentary modelling of that which suggested his wage costs would go up modestly.

PN5478    

VICE PRESIDENT HATCHER:  Just to pin you - sorry.

PN5479    

DEPUTY PRESIDENT BOOTH:  No, you go.

PN5480    

VICE PRESIDENT HATCHER:  Just to pin you down.  Has the current award - does it set rates for disabled persons or not?

PN5481    

MR WARD:  Not at all, no.

PN5482    

VICE PRESIDENT HATCHER:  In which case it must follow that it doesn't conform with the minimum wages objective.

PN5483    

MR WARD:  Actually, I think that must be the case in this sense.  I think the phrase "set" is very much akin to the phrase "fix" and particularly so concerning the old New South Wales legislation, the phrase "fix" was very common place.  What the current award does is it sets rates of pay by its nature contemplated to be applied to people without disabilities at large. But then it has a term in it which is contained in clause 14, providing for an entirely different set of machinery to arrive at a wage.  I have to say in all candour I don't think it sets a minimum wage for a person with a disability working in an ADE.

PN5484    

VICE PRESIDENT HATCHER:  It must follow from that that it doesn't conform with the minimum wages objective.

PN5485    

MR WARD:  Your Honour, I have to say I think that's correct.

PN5486    

VICE PRESIDENT HATCHER:  It must follow from that that that system cannot be retained.

PN5487    

MR WARD:  Your Honour, that is one of the reasons we've filed our application.

PN5488    

DEPUTY PRESIDENT BOOTH:  I think my question's probably been overtaken but I was interested to know whether you thought, Mr Ward, work value reasons meant change in work value?

PN5489    

MR WARD:  Your Honour, there's been - his Honour the Vice President who's a member of this Bench but when we ran the original jurisdictional case in the childcare equal remuneration and I'll get the authority, this question was touched on by that Bench.  I think the Bench formed the view there that the language in 156(3) and (4) is different to the old work value wage fixation principle.  It appears the language in 156(3) and (4) simply draws your attention at that moment in time to assessing the value of the work, and I think that's correct.  It doesn't suggest what used to be the case in the wage fixation principles that you go back and find the last time the work was assessed and then understand whether or not there's been any change to it.  I think it's a different proposition and my recollection is the childcare equal remuneration Full Bench commented on that and we'll find that authority for the Bench.

PN5490    

DEPUTY PRESIDENT BOOTH:  That would be helpful, thanks.

PN5491    

VICE PRESIDENT HATCHER:  Even if the award has set minimum wages for disabled persons, those wages bear no relationship to work value.  That would be a sufficient reason to change them wouldn't it?

PN5492    

MR WARD:  Yes, your Honour, indeed it would be.

PN5493    

VICE PRESIDENT HATCHER:  Regardless of whether there's been a change or not.

PN5494    

MR WARD:  Yes, and it should be a concern for the Commission they haven't.  Now that then brings us to 153, because we were told earlier by the HSU we can't do any of this.  153(1) tells us that:

PN5495    

A modern award must not include terms that discriminate against an employee because of -

PN5496    

and in the second line one finds physical or mental disability.  Can you please note that the thing that can't discriminate is the term and the term of the modern award for our consideration as it stands today is clause 14, and that is the clause that simply referentially refers you off somewhere.

PN5497    

Now that term very clearly does discriminate in the sense that that term only applies to people with disabilities and doesn't apply to anybody else.  So without getting into a lengthy debate about discrimination law, it's reasonable to say that 153(1) is seemingly invoked as the award stands today.  It certainly would be invoked by what we're asking for as well, that is a term that is a classification structure (indistinct) purely for people with disabilities in an ADE.  Now we don't have to panic about that because section 153(3) saves us and it saves the award in its current form.  It says:

PN5498    

A term of a modern award does not discriminate against an employee merely because it provides for minimum wages for:

PN5499    

Then it goes on and talks about people with disability or a class of those people.  Please don't get caught up in the word "merely", I haven't placed it in our written submissions, it appears about 15 times in the Act.  It's not particularly necessarily but it means simply or just. The phrase "provides" is important, "provides for". It doesn't say set, so this seems to be a broader proposition than simply setting.

PN5500    

VICE PRESIDENT HATCHER:  It's got to provide for minimum wage.  Now remarkably it doesn't provide for minimum wage if it has a facility which allows an employer to set all sorts of different wages.

PN5501    

MR WARD:  Well, can I say this, it doesn't set a minimum wage.  It might very well provide for it, in the sense that we see the phrase "provide" as a much broader proposition that set, and when one looks practically at the award as it stands today, even though the actual term is referential to other instruments, it could be said that that term ultimately provides for a minimum wage.

PN5502    

VICE PRESIDENT HATCHER:  Well, the concept of minimum wage is something that's uniform.

PN5503    

MR WARD:  Your Honour, I'm not suggesting it isn't without some difficulty.

PN5504    

VICE PRESIDENT HATCHER:  The only thing that's uniform about it currently is the $84.

PN5505    

MR WARD:  Yes, well the difficulty we've got is this, and I'm trying to traverse this with some care.  If one formed the view that clause 14, the current award, couldn't receive the protection of 153(3), then the SWS has got to (indistinct) for all awards, and I'm loathe to say that as a matter of practicality so I'm working hard to draw a distinction between the phrase "provides" and "sets".

PN5506    

VICE PRESIDENT HATCHER:  Well, arguably whether it's SWS or something else, arguably if you only had one tool, and the tool operated in a consistent fashion, then it would set a minimum wage because it would yield a single result. The problem is because there's a multiplicity of tools no single result is (indistinct) across the industry for a person with a given level of capacity.

PN5507    

MR WARD:  Well, there's two problems.  One is the tools don't set a minimum wage and I think we agree on that. The other one is this, that none of the tools even the SWS can guarantee the same result. So the SWS has all the failings that all the others do as well.  But can we just simply say this, that we do believe that 153(3) is sufficient to allow you to place in the modern award a description of work undertaken in the ADEs, classifications relevant to it, and setting minimum rates against those classifications.  You can get that from the plain wording of 153(3), you can get it from attempting to read it harmoniously with 139 and 284, and we say that the reference to a class of employees with a disability is read broadly and can include those people with a disability working in an ADE.  That is a class in its own right.  It doesn't have to be a class related to the disability.

PN5508    

So our submissions are subject to one thing, that we're entitled to ask for what we have and you can include it in the modern award.  In fact, for the reasons we've explained, it should be fairly compelling to do what we want in some form.

PN5509    

VICE PRESIDENT HATCHER:  Do we draw any implication from the fact that the Act provides for a national minimum wage?

PN5510    

MR WARD:  Well, it doesn't cause me any anxiety, your Honour.  I don't think it defeats what we're trying to do. There's a clear understanding in the statute that you can and perhaps should have comprehensive range of rates of pay for people with a disability performing work.  It doesn't cause our argument any difficulty.

PN5511    

It might cause a difficulty for somebody not covered by an award, who has a disability if the employer tried to discount their wage.  That might cause a very real difficulty.  I'm not aware of that ever occurring but.  Can I just say for completeness there is a provision in section 587 that needs to just be commented on, lest it be forgotten.  I'll withdraw that.

PN5512    

VICE PRESIDENT HATCHER:  Sorry, just before we move on that point, I think it is a fact that no - leaving aside special percentages for juniors, no award has set a rate below the national minimum wage.  That's right.

PN5513    

MR WARD:  That's correct.  139, 284, 153(3) identify three classes that that could happen for; juniors, people under training arrangements, people with disabilities, absent that you can't do that.  Absolutely, yes.  Yes, they are three very special cases in the statute.  Sorry, I apologise I gave you the wrong sections.  It's 578.  This is a section that the Bench discussed at some modest length in the Black Coal Four Yearly Review Award which your Honour the Vice President would be aware of.  578(c) says this, that in the exercise of functions and powers the Commission says:

PN5514    

The need to respect and value the diversity of the work force by helping to prevent and eliminate discrimination on the basis of -

PN5515    

and then it reads the traditional list.

PN5516    

That is a condition placed on the exercise of all your functions and powers including exercising your modern award review powers under section 156.  It is with respect a general provision and gives way to the very specific provisions in section 139, 284, 155(3)(sic), and that's how it should be read.  But it does otherwise colour - perhaps that's a very poor choice of term.  It does otherwise condition the exercise of your functions and powers.

PN5517    

So I hope that's answered can we.  I'm going to say should we.  I think, and I won't go to this in detail, I think the conversation I've already had with the Bench concerning a minimum wages objective and setting, 284, we perhaps are at a point where not only should you, you have to.  I think that that is a very reasonable reading of the statute.  As I've already said it's questionable whether or not any of the tools actually set minimum wages.  In any event, it's wholly desirable for the award to set rates specifically for employees in disability - with a disability in an ADE. It's consistent in our submission with the very notion of a fair and relevant minimum safety net. It's entirely consistent with section 134(g), which encourages you to consider questions of simplicity, stability and the like.

PN5518    

It also would ensure importantly that where work of the same nature is being performed, the same rates of pay will apply as a minimum, and that is as we said a cornerstone of what the safety net should be about.  Adopting the SWS as the only tool will not achieve that.  It will fail.

PN5519    

VICE PRESIDENT HATCHER:  Well, one of the - one of what you  describe as a benefit to the SWS was the fact that it's backed by a Commonwealth funded system of independent assessors.  Is there some way to marry that facility to a provision which sets rates for the disabled in the way you've described?

PN5520    

MR WARD:  Your Honour, I'm not very good at politics. I'm going to struggle to answer that. That's sounds facetious but I just don't know.  Can I say two things about that - - -

PN5521    

VICE PRESIDENT HATCHER:  Let's assume the Commonwealth was prepared to do that, so that - - -

PN5522    

MR WARD:  Well, that would be good up to a point, which I'll come to a little later about whether or not these assessors are truly independent but obviously it would be desirable but the members of ABI and the New South Wales Business Chamber, many of whom are - obviously have given evidence in these proceedings.  They're very aware that if they ultimately had to move to adopt a classification structure in the award there would be transition costs.  That hasn't dissuaded them from telling us not to press this claim.  I think that's probably all in the implementation.  But wouldn't it be lovely if the Commonwealth came on board to help with that, that would be great but let's be candid.  It's a bit like my learned friend saying don't panic the Commonwealth will underwrite everything.  Well, with respect to the Commonwealth, it's as good as the next federal election, so would it be nice for the Commonwealth to help?  Yes.  I can't answer whether or not they would, I certainly couldn't answer whether or not they would post the next election.  I don't know.

PN5523    

DEPUTY PRESIDENT BOOTH:  Mr Ward, am I hearing you correctly saying that your members would have no disagreement with an external assessor determining which classification each employee fell into, should a classification structure be developed?

PN5524    

MR WARD:  Yes, your Honour, I haven't asked that question.  I think - - -

PN5525    

VICE PRESIDENT HATCHER:  That was really my questions.

PN5526    

MR WARD:  Sorry?

PN5527    

VICE PRESIDENT HATCHER:  It's put more clearly the question I intended to ask.

PN5528    

MR WARD:  Sorry, your Honour.  I understood her Honour's question slightly better than yours. I haven't got an answer to that question. All I could say is based on my knowledge of what's going on at the moment, they've obviously expended a fair amount of money putting people in their business doing assessment work.  I suspect that they would be quite comfortable classifying people if they had to do it.  Some of my client's members, as the evidence has shown have had experience with the SWS.  I haven't heard any anecdotal observations about problems with assessors but I'm happy to take some instructions on that, if that would help.

PN5529    

DEPUTY PRESIDENT BOOTH:  It would be helpful if you would, thank you.

PN5530    

MR WARD:  Yes, your Honour, I will.

PN5531    

VICE PRESIDENT HATCHER:  I mean speaking for myself the evidence seemed to demonstrated that while employers had various issues with the methodology used, I didn't see any criticism of the integrity or independence of the assessors personally.

PN5532    

MR WARD:  No.  The only - and you hate to cavil in these proceedings because credit's really not a hugely important issue but you - in an SWS setting I suppose the anxiety is that if you'd had to convince the employer to create the job in the first place, you kind of wonder what then happens in the negotiations setting the benchmark.  It could be the case that in convincing the employer you've kind of gone don't worry Bob, it won't come out above that, and there's no evidence of that but as a matter of sheer logic if, as Mr MacFarlane said, you convince somebody to do it and then as Mr MacFarlane said you negotiate the benchmark, you do raise the question, I don't know.

PN5533    

VICE PRESIDENT HATCHER:  But that is a problem with the methodology used to benchmark rather than assess a person.

PN5534    

MR WARD:  Yes, your Honour.  I have no basis at this stage to suggest that SWS assessors are anything but professional and have integrity.  Can I just say this that there is a long held principle in industrial relations that it's not desirable to set wages and conditions by reference to an external instrument, and can I take you to a very small authority on that.  Am I that boring?  Don't answer that.  This is a 1928 authority involving the then Industrial Commission of New South Wales.  I won't go into any great detail.  It's a question of a claim for reclassification and the claim was based on a reference to an external document not in the award, and if the Commission turns to the last page which is 308.

PN5535    

VICE PRESIDENT HATCHER:  I'm just looking at Dr (indistinct) and Street J on the first page.

PN5536    

MR WARD:  Well, your Honour, Mr Zevari thought there was some contest about trying to find the oldest authority but at least we didn't know them.  Actually we did know them.  That's aging us.  On the last page it says this:

PN5537    

During the course of the argument, however, the attention of the Commission was drawn to the first paragraph of clause 3(iv) of the award, July 1927, which is in the following terms: the actual salary is to be paid from the date of the operations award shall be in accordance with the statement lodged with the conciliation committee at the time of the making of this award.

PN5538    

Now not many at the Bar table will know what a conciliation committee is but I think the Bench will.  It does on to say this:

PN5539    

DEPUTY PRESIDENT BOOTH:  Is that a comment on our age, Mr Ward?

PN5540    

MR WARD:  No, your Honour, no, your Honour.  It's a comment on your depth of knowledge and wisdom.

PN5541    

COMMISSIONER CAMBRIDGE:  I was a member of one.

PN5542    

MR WARD:  Well, I've been a member too, Commissioner, so I think I can remember sitting on one with you.

PN5543    

DEPUTY PRESIDENT BOOTH:  Very adroit.

PN5544    

MR WARD:  It goes on to say this:

PN5545    

Although for the purposes of this decision it was unnecessary for the Commission to place any reliable upon the contents of this document, it is deemed necessary to point out for the future guidance of committees that the incorporation of a document in an award by reference is an undesirable practice. All provisions intended to have any effect in determining the wages or conditions of employment of the employees in question or imposing any rights or obligations upon employers or employees, should be set out in full in the award, and not left to be gathered from some other instrument whether such instrument be retained for record purposes with the committee papers or not.

PN5546    

I leave the authority there.  I think that's pretty self-evident.  In a world where the modern award requires you from a term of the award to have the award accessible to employees, the notion that you are doing something as important as setting wages by reference to an external document is not industrially desirable at all, and as I said does fly against 134(g) to a large degree, and so we would again say that's a good reason to include something in the award.

PN5547    

Having said all of that, I'll put it another way.  There's no good reason not to.  There's none.  It also might start normalising the industrial relations in this sector and that might allow advocacy groups that AED Legal and Mr Cain to leave the industrial field to the industrial parties.  I don't say mischievously or rudely, but it might allow them to do that.  Now it then comes to how should you and look I'm going to concede straight away that while there is a fair degree of evidence before you go into elements of our claim, there is not sufficient evidence for you to embrace our claim and grant it.  I'm going to concede that.  If only for this reason, there is insufficient evidence, for instance, as to the impact of the rates.  That would be a classic example and I think the Commission would want to know that before it did anything.

PN5548    

Can I just say a number of things about how should you.  When I made my opening I asked you to consider a number of findings.  The first finding was to say:

PN5549    

The Australian Disability Enterprises fundamentally differ from open employment in terms of their goals, purpose and the model they adopt.

PN5550    

PN261 of the transcript.  For speed, because I really want to try and be as quick as I can, can I hand up a document that references the findings, annexed to it references some elements of the evidence.  Which ones are we giving the Bench?  The copies I'm giving the Bench have all names unredacted.  The copies I'm handing out or Mr Zevari's handing out to the parties have some names redacted.  For instance, the carers and the employees' names are redacted.

PN5551    

Now I'm not going to take you to this.  I'm more than content to let the Bench read this at their leisure.  All it does is it identifies those findings as they were in the transcript and then draws you to some evidence.  I'm not suggesting that this is the exhaustive evidence on that issue, we've just in the very short time available to us highlighted some parts of the evidence.

PN5552    

That first finding we think's made out and it's an important one.  Being viable is not the same as maximising profit for shareholder return and the model of an ADE supports the proposition that they exist to employ people with a disability and design work process to suit that, rather than the other way around.  So we think that findings an important one.

PN5553    

We've also identified finding two:

PN5554    

ADEs in distinction to open employment specifically re-engineer work to accommodate the capabilities of a person with a disability rather than determine the most efficient form of work to produce profit and recruit into it.

PN5555    

I think the phrase that's been used on occasions isn't re-engineer but the engineer, and I think the Vice President, I've counted at least three times, has used the phrase "artificial jobs".  And it's very clear in our mind that - and I'll talk about this is a little more detail but it's very clear that there is evidence before you of the artificiality of the work performed in ADEs compared to open employment.  That specifically fits what their purpose is as opposed to Coles, Woolworths and the rest.

PN5556    

Our proposal is to put a default wages structure in the award where people don't choose to use a tool.  Now I understand that is the point of tension in our position and I'm going to come to that close to the end.  We set out finding five which is in the document I've handed up and effectively finding five said - well it said something, if I can find it:

PN5557    

The award should contain a classification structure specifically designed to describe the work performed by employees with a disability in an ADE and that the value of that work should be valued by this Commission on proper principles.

PN5558    

That finding we believe was made out.  We also in our document refer to - in this document refer to findings nine and 10 and we think they're made out.  The relevance of those are these propositions and I say what I'm about to say now with the utmost respect.

PN5559    

The undertaking of most of the working ADE is so elementary that it requires a level of skill, training, schooling and qualification that was never contemplated when the award classification was put in the SESA award, and except in circumstances where an open employer thought social - corporate social responsibility reasons or is convinced, as Mr MacFarlane said, simply wouldn't be found in open - simply wouldn't be found in open employment.  There is a uniqueness to the work environment and work context in an ADE compared to open employment.

PN5560    

If our friends thought they could have shown this Commission a similar environment to an ADE in open employment they'd have taken us there.  But they know it doesn't exist.  It's all very cute constantly saying that we bear some onus about all of this but obviously based on the preliminary issues decision, we don't in relation to defence of the tools.  In comparative terms the people with a disability in an ADE, the people without in open employment, we say it is self-evidence that the work should be valued at a lesser level in an ADE.  It's self-evident.

PN5561    

VICE PRESIDENT HATCHER:  One criticism of your proposal in general terms without descending into detail as that, the classification criteria aren't really talking about work value at all, they're talking about the personal characteristics of individual disabled persons.  What's your response to that?

PN5562    

MR WARD:  Well, your Honour, if they are it's just poor drafting on our part and it wasn't intended to try and do that.  I'll be candid, we had a working committee of ADEs work on this, there's no doubt that shifting their mindset from the world they live in to the industrial world of classification structure might not have been as easy as I'd thought.  That is not our desire.  If that is an obvious failing of how we've drafted it, we would take that failing on the chin and it would need to be redrafted.

PN5563    

VICE PRESIDENT HATCHER:  Well, it does raise this conceptual criticism, and that is - in one particular and that is whether the level of support provided to an individual disabled person is something that is relevant to a proper assessment of value work of the work performed by the person.

PN5564    

MR WARD:  Well, all I can say about that is this, when one reads classification structures in nearly all of this Commission's modern awards, there are descriptions of degrees of or autonomy, supervision, self-regulation, quality control, accountability for own work et cetera.  Those descriptors at varying - using various nomenclature and having various hierarchies tend to be a major feature.  The novelty and I say that respectfully, the novelty of an ADE in a way is you need to use descriptors below that.  That is it's not so much about supervision.  It is about work support and personal support.  So the theory that you find in modern awards is apt, the nomenclature probably has to change.

PN5565    

VICE PRESIDENT HATCHER:  Can you remind me, was supervision in Taylor's SC list of considerations?  I should remember this.

PN5566    

MR WARD:  I don't know if that's a challenge, your Honour.  I can't remember, I can't remember but let me put it a different way - perhaps a different way.  There's no doubt that somebody who performs work autonomously is responsible for the outcomes of their work independently of others, is likely to be doing work of a higher value than somebody who works under direct and constant supervision, who has no accountability for their work themselves, that falls on somebody else.  So perhaps I'm not explaining very well but that concept of how you perform the work in that environment clearly does seem to bear on the valuation of the work.

PN5567    

COMMISSIONER CAMBRIDGE:  Sorry to interrupt you but this goes beyond that, doesn't it?  When you look at what you've got here, you've got the supervision as a category but then you introduce work support and personal support.

PN5568    

MR WARD:  Yes, your Honour.  Because we would say this again the uniqueness of the ADE environment it does go beyond.  It does go beyond.

PN5569    

COMMISSIONER CAMBRIDGE:  Right.

PN5570    

MR WARD:  Yes.  And maybe we haven't done this very well but it surely follows that a person who is independently able to conduct themselves in their workplace in undertaking their work, whatever that work is, is likely to be doing work of a high order to somebody who is incapable of independently conducting themselves in that workplace and requires a very high level or a moderate level - whatever level of intervention support.  It's axiomatic, I would have thought, but in the latter case the tasks that had been performed are probably much lower order tasks.

PN5571    

So as I say we might have scored poorly in how we're expressing this but we're attempting in using these categories and this nomenclature to try and get what is in Modern Awards today.  That is certain things surround work of high value.  Certain things surround work of lesser value.  We try to pick that up and put that into the ADE model and use what is the unique features of the ADE model and that's why those things are in there.

PN5572    

COMMISSIONER CAMBRIDGE:  But you see what I think has been put against you here is even if we accept that the question of job supervision might be directly related to those things and the component that's properly a consideration in work value, the question of personal or other supports is really a matter for the level of funding that comes to the ADE.

PN5573    

MR WARD:  Your Honour - sorry, Commissioner - in one sense I agree with you.  I'll acknowledge that.  In another I might debate that.  To the extent that intervention is support reflects the nature of the work actually being performed it would seem to have some indication on the value of the work.  In terms of the broader management of the organisation I agree it's a funding issue and I shouldn't trouble the Commission with it.

PN5574    

COMMISSIONER CAMBRIDGE:  You think it's just a relevant reference point to look at those work value considerations.

PN5575    

MR WARD:  Yes.  Yes.  And we haven't drafted our claim to sort of shock the tribunal into this conversation but we have drafted our claim to ensure that the tribunal grapples with the conversation in a very textured way and that is why some of those elements are in there.

PN5576    

DEPUTY PRESIDENT BOOTH:  Might I continue that conversation just briefly, Mr Ward?  The classification structure that you have devised, as well as the features that you have just been discussing with Commissioner Cambridge does also have reference to, shall we say productivity as we - - -

PN5577    

MR WARD:  Yes.

PN5578    

DEPUTY PRESIDENT BOOTH:  - - -generally and broadly described as we have discussed the definition.

PN5579    

MR WARD:  I can't talk them out of it, Commissioner.

PN5580    

DEPUTY PRESIDENT BOOTH:  Just how important is the precision with which the productive capacity of an employee in an ADE are measured because of course the supported wage system measures it and, indeed, I think I might be - my correct recollection of this in the modified supported wage system to the percentile - not even to the decile.

PN5581    

MR WARD:  Your Honour I think the answer has to be that if you're going to include something you have to have some level of precision.  There's no doubt about that.  We said in our opening the Bench might be more or less attracted to that concept.  It might be attracted to it because it's got a flavour of what's in the current tools, including the SWS.  It might be less attracted to it because it's complex.  It also might be less attracted to it because it seems to shift a little bit away from the notion of minimum wages.  It seems to shift far more to the notion of paid rates.  So it's in our application.  It's in our claim.  I think it's a very important part of the conversation with the Bench but as the Bench can see I am not strenuously pressing it upon you.

PN5582    

VICE PRESIDENT HATCHER:  Well, I mean I'm just thinking out aloud and speaking only for myself.  One way you might do it is to have a two-step process where, first, do you assess the size of a job relevant to a full award rate of pay having regard to the skills and the tasks required to be done and the condition under which the work is performed.  And then once you have sized the job there's a second step where you do an SWS type productivity assessment as to how a non-disabled person might do that properly sized job compared to the person who is doing it and you get a second percentage.  So, in effect, you're applying a percentage to a percentage.

PN5583    

MR WARD:  Well, all I can say about that, your Honour, is if you were to have an element of output there's probably a number of positives that the SWS is applied, not the least of which it's paid for.  But I think the Bench needs to consider carefully whether or not an output factoring should be part of it because it does raise adding complications.  And as I said in my opening, you know, the Bench might be more persuaded to set the job sizing in the classifications and possibly adopt a slightly more historical approach of, well - you know - year one, year two, year three, in the sense that as the person spends more time in that job and that workplace they're likely to become, generally speaking, more valuable and more experienced and that might be an alternative way which is simply much easier to apply and administer but also have some level of equity in it as well.

PN5584    

DEPUTY PRESIDENT BOOTH:  Well, I asked the question because although there was no evidence that actually said that the productivity wasn't important, it didn't seem to be from either of our observations and inspections or the evidence the key consideration from the point of view of the ADE and being exhorted to not make assumptions, as Mr Harding quite correctly does.  It oughtn't be - I didn't want to assume just because you've included an output in your proposal and an output approach is at least not only available now, it seems to be part of most of the tools, that it was necessarily what ADE has thought was important about the characteristics that a supported employee brought to the employment and if the purpose of the supported employment environment is to provide people with a meaningful - an opportunity for meaningful contribution and given that we have - the evidence, I think, is that a supported employee has very rarely exited, except in the most extreme circumstances where perhaps the safety of others - - -

PN5585    

MR WARD:  I think that Mr Cain agreed with that.

PN5586    

DEPUTY PRESIDENT BOOTH:  - - -is at risk then really what does it matter?

PN5587    

MR WARD:  Well, your Honour, I'm cautious that I haven't turned my mind to whether or not there was any evidence about that debate but you might have observed by what I have been putting to the Bench that it might not matter.  It might not matter to a point.  And I use the phraseology in opening that it's a reward for proficiency and that might be worthwhile considering in that acting on behalf of my client's members who are ADE's, I must say I have adopted that language from being engaged with them.  It's a reward for proficiency rather than what you might find in a commercial sector which is a bonus for pushing hard and beating the benchmark or beating the other people who you work with but I think - - -

PN5588    

VICE PRESIDENT HATCHER:  But it's the other way round isn't it?  That in a normal employer if you don't meet the standard for proficiency - - -

PN5589    

MR WARD:  Is that.

PN5590    

VICE PRESIDENT HATCHER:  Ultimately you'll be dismissed.

PN5591    

MR WARD:  Yes.

PN5592    

VICE PRESIDENT HATCHER:  That that is not the way this sector works and therefore either you ignore it completely or you reflect it in the rate of pay.

PN5593    

MR WARD:  Yes, that's right.  Your Honour that's entirely correct.  Yes.  Can I just - I'm cautious of the time - is your Honour likely to stop at 4.00 or sit on?

PN5594    

VICE PRESIDENT HATCHER:  We can sit on.  We'll certainly get up to including Ms Zadel and then we'll see where we are.

PN5595    

MR WARD:  Does your Honour want me to break or we just keep going as in let Mr - - -

PN5596    

VICE PRESIDENT HATCHER:  How much longer will you be?  We have got two days so there's no - - -

PN5597    

MR WARD:  I could very easily start with the questions from the Bench to press on for an hour.  I'm certainly going to be more than 40 minutes.

PN5598    

VICE PRESIDENT HATCHER:  And you said about Ms Zadel?

PN5599    

MS ZADEL:  Or shorter.  They're brief submissions.

PN5600    

MR WARD:  I'm happy to sit down and let my friend go and if you want to adjourn at 4.00 I'll commence again in the morning.

PN5601    

VICE PRESIDENT HATCHER:  We'll bat on till about 5.00, I think.  So - - -

PN5602    

MR WARD:  Okay.  Thank you very much, your Honour.  I think one of the interesting things which is worth considering is that the Australian workforce has a whole is regulated by awards have sort of, from the late 1980's taken a particular journey, and I just want to make reference to that journey because it's a journey - perhaps somewhat sadly that ADE's haven't gone down, given the nature of what they are.

PN5603    

I just want to quickly make reference to the National wage case in '87 and then in 1988.  And also knocking my water all over the place.  But can I hand up a copy of the National Wage case 1987.  It's an extract from the Industrial Reports of 17 IR's.  I'm only going to take the Commission to one page.

PN5604    

Now, again the Bench will be very familiar with 1987.  This followed the 1986 wage clause and the beginning of the Accord period.  I think we were on to Accord mark two by '87.  And this is the decision which introduced the restructuring and efficiency principle which if the Bench turn from the first page there is a consideration of that principle discussed and for present purposes if I could ask the Bench simply to turn to the very last page of the staple - which is page 80 of the 17 IR's - and about halfway down they discuss that new wage fixation principle.

PN5605    

They say, "The new principle will be in these terms.  Increases in rates of pay or improvements in condition of employment may be justified as a result of measures implemented to improve efficiency in both the public and private sectors.  One, changes to work practises and changes to management practises must be accepted as an integral part of an exercise conducted in accordance with this principle.  Other initiatives may include action to reduce demarcation barriers, advanced multi-skilling, training and retraining and broad banding."  It talks about changes to work plans alike.

PN5606    

That's the beginning of our multi-skilling broad banding journey and we start that journey moving away from awards being fixed by task or the machine or the activity and we start to move into the world where it's now about you're able to do all of these things and you get paid accordingly.

PN5607    

And that is the beginning of the journey where we start to pay you for the competencies you hold and can use rather than simply the ones you're using today.  And that is amplified again in 1988 in the August National Wage case when we have the structural efficiency principle.  Again, I have taken an extract from 25 IR and the purpose of taking the extract was simply to - and I quote I've "brilliantly" done this.  I've actually not copied the right page and I apologise for that.

PN5608    

Can I remedy that overnight?  It actually is on page 179, 25 IR and I don't think I've copied that.  It's simple the structural efficiency principle.  That principle says this - I'll hand this to my learned friend when I have finished.

PN5609    

"Increases in wages and salaries or improvements and conditions allowable under the National Wage Case decision 12 August 1988 shall be justified in the union's party to an award, formally agrees to cooperate positively in a fundamental review of that award when viewed or implementing measures to improve the efficiency of industry and provide workers with access to more varied, fulfilling and better paid jobs.  The measures to be considered should include but are not limited to -

PN5610    

.  establishing skill related career paths which provide an incentive for workers continuing to participate in skill formation.

PN5611    

.  eliminating impediments to multi-skilling and broad banding with a range of tasks which a worker may be required to perform.

PN5612    

.  creating appropriate relativities between different categories of workers within the award and at the enterprise level."

PN5613    

And then it goes on and identifies a number of others.  I simply go to that because it shows that workers without a disability started in the late 1980's on a journey in terms of award regulation which is, in some sense, built into the Modern Awards today.  These notions of paid for competencies held.  These notions of the ability if required by the employer to do the whole job.

PN5614    

And some conversation occurred with my learned friend early today about whether or not the assessor award descriptors as they are today are very well written.  Can I say this?  That if they're read the way ADE Legal want to read them they're appallingly written because they seem to fly in the face of that journey we have been on for the last 30 years and maybe they do need some review.

PN5615    

I think it's self-evident that ADE's never got on that journey.  They weren't even industrially regulated when that journey started and while they attempt to provide as stimulating work and as stimulating environment as they can there are just practicalities as to why that journey will never be one that an ADE will necessarily go down in the same way the rest of the regulated Australian work force has gone down.

PN5616    

VICE PRESIDENT HATCHER:  Do we know what the source of those classifications definitions was?

PN5617    

MR WARD:  Your Honour, I can - I'm happy to do that overnight.  I suspect what we'll find is that some of them may have come from the original LMHU Award which was a Federal Award.  I suspect that as always happened in award modernisation there was a lot of haggling.  Your Honour recently observed in the equal remuneration decision.  I think your Honour used the phrase that the award modernisation was a pragmatic exercise disagreeing with the phrase that I used.

PN5618    

I suspect it was probably some element of the LHMU Award haggling and pragmatism but I can see if we can dig anything up overnight, your Honour.

PN5619    

VICE PRESIDENT HATCHER:  You're going to do some work tonight.  I'm just wondering whether - - -

PN5620    

MR WARD:  What?

PN5621    

VICE PRESIDENT HATCHER:  What do you mean him - you mean you?  I'm just wondering whether the type of structure in the Miscellaneous Award would be of some use in this award, that is, it seems to be of a similar purpose that is to create - to cover a range of functions by way of the general descriptions of some indicative tasks.

PN5622    

MR WARD:  Your Honour I might have a look at that.  Without even intellectualising what your Honour has just said.  It would have some immediate attraction in that it's got four classifications.  There's a reasonable death between clause four.  It has some clarity to it.  It's certainly - when you show small businesses that it's - and it's one they actually understand.  So we might take that on notice.  I think it's a worthy consideration.

PN5623    

Now, we concede that in relation to the rates that we put in our claim we concede they're more art than science in that they have been put together by a working party.  We can't say that we have in any forensic sense tested them.  Yes, Mr Christodoulou has done some rudimentary testing but it is just that, it's rudimentary.  And obviously if the Bench was minded to go down that path considerably more work would need to be done, not the least of which would be that the Bench would have to give us some at an appropriate point a very clear indication as to how it wanted to value the work.

PN5624    

Now viability is a consideration if a first award approach is taken and what I mean by that is if one takes a first award approach to setting these rates then the primary consideration is the rates in the market at this time.  If they seem to be manifestly unfair and you want to increase then viability plays a part but that part might be more about phasing and as we have seen in award modernisation itself and the more recent penalty rates decision this Commission has taken a very cautious approach to phasing, and sometimes that phasing is of the order of five years.

PN5625    

Recently the New South Wales Industrial Relations Commission in introducing new rates for the General Carriers contract determination had and an eight-year phasing period.  So I think that's about phasing.  That's about phasing.

PN5626    

And as we have said already we favour an iterative process which is very common in the award review cases.  Can I just make some quick observations about Mr MacFarlane and Mr Cain and Ms Svendsen's evidence.  I don't cavil with Mr McFarlane being an assessor.  I accept that he is able to speak to an assessor.  I do cavil with his ability to express opinions against our claim and we say no weight should be given to these.  He's not an academic in work structures or valuation per se.  He's an SWS assessor and I don't think his opinion  has much probative value in terms of criticising that claim.  He is also conflicted.  He's conflicted firstly in that a significant part of his income comes from doing SWS assessments.  He's also conflicted because in cross-examination he acknowledged he has been a lifelong campaigner against ADE's and a lifelong campaigner supporting SWS.  So assume he was the best ADE Legal could find - AED Legal could find - but no weight should be given to his evidence criticising our claim.

PN5627    

Now, Mr Cain is a man that we respect but by his own admission he is an advocate.  He simply advocates for policy/ideological positions.  He has got no academic CV and work organisation.  He has never worked in an ADE and lo' and behold I think I am right in saying this under cross-examination from Endeavour he acknowledged he hadn't been in one, I think, since 1980 or the 1980's.

PN5628    

He has not undertaken any qualitative or quantitative research himself into ADE's.  He holds a policy view to support SWS exclusively.  He's not particularly enamoured ideologically with ADE's.  He's not necessarily against them but he certainly has a preference for an alternative model.  And, again, while his evidence about his historical knowledge of the evolution of BSWAT and things I think is probative.  His opinions against our claim should hold no probative weight.

PN5629    

Ms Svendsen, well I don't think she actually said anything of any substance against us.  I think her gripe was largely with Mr Christodoulou and Greenacres and I will let Mr Christodoulou defend himself.  He's a big boy.  So I will say no more about there.

PN5630    

Now, I am going to move on to whether or not the tools in the award should be deleted.  Does your Honour wish me to proceed or does not - yes, thank you, your Honour.  Now, I seem to have a very different view of Nojin - to my learned friend - but we'll see where that takes us.  I think, and I might have read this wrong, but I think there was a suggestion from our opponents that the tools in the Award were invalid.  Now if I've got that wrong I am going to sincerely apologise.

PN5631    

Can I just say this?  We have already made detailed submissions on the operation of the Act in section 153(3).  We don't believe they could be construed as being invalid.  I want to make two observations about the tools.  One is how difficult it is to fit what you have heard in this case into Nojin.  And the other one is I want to talk about whether or not the abolition or retention of the tools where that sits with section 134 in the Modern Awards objective.

PN5632    

You have a very practical problem in this case in trying to say - "Well, this tool fits into Nojin."  And it's a practical one first and then it's an evidentiary one second.  The practical one is this but please be mindful that when Nojin was run it was run in a different legal context but there was very substantial granular evidence on Mr Nojin and Mr Prior before the court.  The case only concerned two people and there was very detailed evidence about them.

PN5633    

You really don't have that depth of evidence here in relation to anybody working under a tool.  You have got the odd moment.  You have got what my learned friend said in reference to Mr Don's forklift driver and I think there is two or three others but they are odd moments and they're not sufficient to allow you to for some lawful reason - legal reason - condemn a tool and remove it.  So it's very difficult practically to suggest that any of these tools fit Nojin just from a practical perspective.

PN5634    

But I want to take Nojin head on in this sense.  We think that Nojin identified specific frailties with BSWAT.  And those frailties were in the context of comparing the operation of BSWAT between a person with an intellectual disability and a person with a physical disability because we read Nojin.

PN5635    

Some of those issues went to whether or not there was discrimination - indirect discrimination and some of them went to the reasonableness test.  In simple terms though the infaction of BSWAT was firstly the Q and A testing, that is, non-intellectually disabled person here but with a physical disability.  An intellectually disabled person Mr Nojin or Mr Prior.  I think Mr Prior had both.  The idea that you're asking question and answer format clearly was found to be discriminatory between the two groups.

PN5636    

Now, I might be wrong but I don't see that as a feature of any of the tools that are before the Commission today and I mean that in two senses.  One, for those that have given evidence I don't see it as a feature and obviously for those where there is no evidence we don't know.

PN5637    

The next complaint in Nojin was that there were four industry competencies that were to be applied that had no specific relevance in the performance of the work and worse than that even if they weren't relevant to the job you were doing you would get a score in them, and that would by definition bring your rate of pay inequitably.

PN5638    

Separate to that there were then as we read it for core competencies and they suffered from the same infection.  So those were the three cornerstones.  As to the reasonableness question I think Buchanan J went into this in great detail and when you read Nojin again, after so many years, you realise how finely balanced the decision was.

PN5639    

But the real anxiety Buchanan J had around the reasonableness question was he formed the view that those competencies and in particular those industry competencies I think when BSWAT was originally tested they were reliant to Certificate 1 in the Australian Quality Framework.  I think after the first test they were then aligned to Australian Quality Framework Certificate 2, and his Honour Buchanan J had very real reservations about the relevance of that against the grades one and two in the Modern Award.

PN5640    

That is to say, on his reading, the competencies in BSWAT required a higher standard than the standard required by Grade 1 and Grade 2 in the award.  Now, we would roll all of that together and say that that's the disease that infected BSWAT.  With respect when we read the evidence in these proceedings, when we hear it, we would say these things - there isn't any Q and A testing.  It's observable.  I haven't heard or seen in reading them and I concede I might be wrong.  I haven't seen any industry competencies.

PN5641    

It would appear that when you are tested on a competency, under these tools, it's either directly relevant to the work you're doing or the work you might do.  I haven't seen a tool where you get scored on something you're never expected to do and as we have said there doesn't seem to be any certification alignment to the AQF framework.  In fact, quite the contrary.  These seem to be very much home-spun competencies that have evolved out of the work.

PN5642    

Now for those reasons we would just urge the Bench to be very cautious of glibly accepting, with respect, that what you're seeing in this case in some way has some parallel to Nojin.  It really doesn't.  Now that's not to say that the tools can't be improved.  That's not to say that in a given case there might be a problem but you couldn't form the view that there is a uniform problem with the tools in this case of the nature of the problems of BSWAT.

PN5643    

Now, can I do my best to close off quickly, having said that.  When we were talking about our claim, I forgot to hand this up.  Commissioner Cambridge and I were having conversations - as I'd remembered had a conversation about the elements about claimed work support and the like.  I am just going to hand up a document which under those headings provides a reference to the evidence.  So it's under the heading "work support".  We have identified where you can find evidence on that - personal support where there's evidence on that with some examples, process of supervision, validating the quality of work, actual descriptions of the work.  I won't go to those for time purposes but if I could hand that up?  Those are the parts of the evidence we have had time to draw the Commission's attention to.

PN5644    

I apologise.  I should have done that earlier.  I won't take you to that.  In relation to the document I handed up earlier - the findings document - I am now going to turn to findings 3, 4, 6, 7 and 8.  I won't take you to them but those - - -

PN5645    

VICE PRESIDENT HATCHER:  Have you finished with your nuance position about the existing tools?

PN5646    

MR WARD:  No, your Honour.  I am going to come back to that at the end.

PN5647    

VICE PRESIDENT HATCHER:  Right.

PN5648    

MR WARD:  I said I would talk to you about the tension issue and I am going to do that.  I promise I won't leave it.  You wouldn't, with respect, let me I suspect.  In relation to the existing tools we made a number of comments as to findings that we sought you to make.  They're numbered 3, 4, 6, 7 and 8 in our document.  Those findings, in our view, go to questions of section 134 about the tools.

PN5649    

In short, they're these.  The fairness of the current arrangements is demonstrated by the extraordinary support from the ADE's, their employees, their carers and guardians.  And when one reads the evidence from the carers and guardians, there's no doubt that you see that support there.  And we say an inference can be drawn that the arrangements in those ADE's, therefore, should be understood to be fair.

PN5650    

DEPUTY PRESIDENT BOOTH:  It's slightly an unfair question, Mr Ward, but is the current support demonstrated by that material for the existence of the opportunity to work in an ADE?  Or is for the application of the wage assessment tool in particular?

PN5651    

MR WARD:  I suspect that it's probably more the former and less the latter, your Honour.  I will be candid about that.  Yes.  Yes, there's no doubt about that.  But there certainly is no criticism of any kind from a carer or guardian about the operation of those tools.

PN5652    

While the Commission should, on the evidence be cautious about quantifying, we think there's sufficient evidence to understand that the removal of the tools and the imposition of the SWS alone will involve a commercial impact on ADE's.  Now, there is sufficient evidence on that that you can draw the conclusion that there will be a commercial impact.  We're not going to tell you what it is.  We've never sought to tell you that the sky is going to fall in.  But it's there and we would say that's a relevant consideration for how you act under section 134(1)(f) which requires you to consider the impact on business of your decisions.

PN5653    

VICE PRESIDENT HATCHER:  If I remember correctly Mr Cain, himself, said there had been an estimate that it would cost $78,000,000.

PN5654    

MR WARD:  Yes, and I think that's the number.  Mr Cain gave evidence which is a matter of public record before the Administrative Appeals Tribunal on the application to extend the BSWAT exemption from the DDA and in those proceedings there was quite some debate about what the cost was but I think that's the evidence Mr Cain gave in those proceedings as well.

PN5655    

I don't actually have any reason to doubt him.  So all we say is there is a commercial impact and you're obliged under 134(1)(f) to consider that impact.  We think also that the operation of ADE's which we say is assisted by the operation of their wages tools clearly goes to support for finding participation in the workforce for people with disability.  And, again, that is a key consideration in the Modern Awards objective.

PN5656    

The SWS has recently been given an opportunity to improve itself and let's not think that improvement is a bad thing and just as a matter of fairness if there was a view that some of the tools had to improve themselves to survive, whether or not that would survive forever or survive for a period then why wouldn't those tools be given the same benefit the SWS was given and that is, "Well, there might be areas for improvement."

PN5657    

So, again, it seems very strange that we should be knocking them all out based on the evidence in this case, because the evidence in this case, at best, leaves us with some them should be improved.

PN5658    

COMMISSIONER CAMBRIDGE:  But isn't there the simple desirability of having one universal tool?

PN5659    

MR WARD:  Well, I don't think there's a desirability of having one universal tool.  I have to acknowledge that ultimately we would accept that the desirability is to have a classification structure in the award with rates of pay set by the Commission.

PN5660    

COMMISSIONER CAMBRIDGE:  Well, that would then be the only means by which the - - -

PN5661    

MR WARD:  Yes.  Your Honour, I'm not going to - my clients won't sit here today and say that that is not where we ultimately should get to.  It's just not a position we want the Commission to get to tomorrow.

PN5662    

VICE PRESIDENT HATCHER:  All right.  So there needs to be a phase-out period - - -

PN5663    

MR WARD:  I'm going to talk about - - -

PN5664    

VICE PRESIDENT HATCHER:  - - - and we need to talk about how long that is.

PN5665    

MR WARD:  I'm going to and I said I'll come to the nuance.  What we would ask the Commission to be mindful of is that Sally Powell's very powerful evidence about her UK experience.  It's sort of the Damocles sword sitting there and we do need to be mindful that getting this wrong could have very dramatic implications for a very important part of our community.

PN5666    

Now let me just talk about conflict issue.  Our position in these proceedings is one - that we seek the Commission to place a classification structure and minimum rates in the award but out position, also, at this stage - I withdraw that - our position is to support those people who want to retain their tool.

PN5667    

The Bench quite rightly have said to us, "Well there's an inherent tension in that."  We have acknowledged that tension.  I have already said going back to the Ronald's Report that this sector is comparatively in the infancy of its industrial relations journey.  A number of things need to be weighed into the balance in that tension.

PN5668    

The industry has already gone through a very real challenge moving away from BSWAT and understandably the industry craves and needs some respite from change.  It craves it.  It a proper classification and minimum rates are to be included in the award as a default, we think the Commission should at least initially leave the other tools where they are of those people who choose them.  And the Commission can then, as it would normally do revisit where we are progressively.

PN5669    

We have a view that there will be a natural shift to move to the classification structure in the medium term.  Now if the Commission formed the view that it wanted to accelerate or encourage that, that's obviously a matter for the Commission.  It's not a position we advocate for.  We'd like a little bit of - let the market settle and see where it goes.  But we will say this.  If there was to be an ultimate abolition of tools it would not be unreasonable to say that the Commission should be looking at a transition period in the order of five to eight years.

PN5670    

I say that for these reasons.  One, we have just got over the heartache of BSWAT  Two, I think the industry needs to breathe for a little while.  It will then start to turn its mind to the fact it's got to change.  That will give us a period to make sure that whatever has gone in the award is working.  In other words we can have an opportunity over a couple of years to refine and prove what we have put in the award.

PN5671    

We would then need a period of legitimate transition and it is not unreasonable to say a five-year period of transition would be a very reasonable period.  That period is seen - it appears by this Commission to be a reasonable period for major transition.  And the penalty rates is a very, very good example.

PN5672    

So why I say five to eight years is we think there needs to be a period of respite.  We will have to get the classification in the award itself.  That won't necessarily be an easy position, even with the assistance of the Commission.  We have to make sure it's working properly before large scale movement to it.  So then we would - - -

PN5673    

VICE PRESIDENT HATCHER:  Presumably it could be trialled and we'd get an outcome including the cost impact.

PN5674    

MR WARD:  Yes, your Honour we could do that.  But as your Honour would be aware from doing these things in other places that that very quickly could take a year.  So all we're saying is that we advocate strongly for the retention of the tools, perhaps with some improvement today.  We advocate for our position.  We would like the market to take its course but if the Commission wanted to accelerate that as a move away to each classification structure the industry in our view would need a five to eight year transition period for that to be done properly.  Can I - - -

PN5675    

VICE PRESIDENT HATCHER:  So what proportion of the sector was on BSWAT and as transition to something else?

PN5676    

MR WARD:  Well, your Honour I'll get the numbers overnight but my understanding is it's uncontroversial to - - -

PN5677    

MR MUSSO:  Your Honour the problem was at the time was that it was 50 percent of the sector was using the BSWAT at the time of the Nojin decision.

PN5678    

MR WARD:  Yes.  So when I say there's been a lot of upheaval there really has been upheaval and that upheaval isn't just to the employer, it's to the employee of the guardians and carers.

PN5679    

Can I finish, and I'll certainly make 5.00 o'clock.  Can I just finish by making some very quick observations in reply to very specific things raised by those on my left, and I will do this as quickly as I can.  My learned friend, Mr Harding, said you should read the safety net as being for workers.  With the utmost respect, Mr Harding, that is wrong.  Can I ask the Commission to refer to - something - Shop Distributive and Allied Employees' Association v Australian Industry Group [2017] FCAFC 161 53.  This of course is the Full Court Federal Court penalty rates case.  And I apologise I hadn't intended to do this but at that paragraph the court says this -

PN5680    

It cannot be doubted that the perspective of employers and the employees and the contemporary circumstances in which an award operates are circumstances within a permissible conception of a fair and relevant safety net.

PN5681    

It talks about 134.  That is the approach the Federal Court has taken.  That is the approach this tribunal has taken.  It is a fair and relevant safety net for both the employers and the employees.  It is not the custody of employees alone.

PN5682    

My friend from the HSU said there's no evidence before this tribunal that the SWS was intended for open employment.  I thought that that was an uncontroversial issue.  I thought everybody accepted it was.

PN5683    

Paul Cain annexed to his statement the original decision to include SWS in awards of the then Australian Industrial Relations Commission, December 1831/94, Print L5723.  I don't take the Commission to it other than to say that on any proper reading the Commission will form the view that it was originally intended for open employment.

PN5684    

Some mention has been made by my learned friend about the relevance of international conventions.  There is a very clear line of authority about their relevance.  I won't go into it.  It should be uncontroversial but I'd refer the Bench to Fisher v Commonwealth of Australia and Anor (No 2) 67 IR 123.  And it's a decision by the Industrial Relations Court of Australia short-lived as it was, Moore, Beasley and Marshall, and they cite with approval Minister for Immigration v Teo (1995) 183, CLR and there's a quote set out from Mason CJ and Dean J dealing with the relevance of the international treaties to Australian law.  We adopt what is said there.

PN5685    

If we need to provide copies to the Bench we will do that.  Lastly, you were provided with Exhibit 179 and 180 which was meant to be evidence of how employers in Australia are embracing employing intellectually disabled people.

PN5686    

Now we have only had an opportunity to read these in a cursory way but we would say this.  It's interesting - they're both articles about America and as Sally Powell has put into her evidence which was very useful I might add, the American experience is an entirely different experience than the Australian one, and therefore it's unclear what relevance they are but from a gleaning of those exhibits they appear to be talking largely about a negotiated model and a negotiated model at large.

PN5687    

So it's unclear to us what relevance or weight should be placed on those.  Just if I could have a moment?  Just two last points.  Something has been made of Exhibit 8 which is the - I'll call it the Commonwealth letter of comfort.  The letter where the Commonwealth has said, "Hey don't worry.  All's good."  Please don't place too much weight on that.  As his Honour, the presiding member asked, "It not a blank cheque.  It never is."  And in any event the cheque book is only as good as the next Federal election.  And just lastly - - -

PN5688    

VICE PRESIDENT HATCHER:  We will have an opportunity to ask the Department about that in a short while.

PN5689    

MR WARD:  Your Honour I'll sit and listen.  Lastly, Ms Sally Powell was - her evidence was described by my learned friend earlier today is said and remember this is the ex-CEO of Bedford's.  He said that - and perhaps nothing turns on it but he said that her evidence was that she was agnostic about what would happen - that Bedford's was agnostic about what happens with the tool in the award, given they've got an enterprise agreement.  With respect to my learned friend that's not our recollection.  She didn't say she was agnostic.  She said she didn't know the preference because she didn't know what the Board of Director's view was.  I don't think that's agnosticism.  That's "I don't know."

PN5690    

But those are just some small comments on specific matters of reply.  Unless there's anything further from the Bench those are our submissions.

PN5691    

VICE PRESIDENT HATCHER:  Thank you.  Ms Zadel?

PN5692    

MS ZADEL:  Thank you, your Honour.  Again, I intend only to be brief this afternoon.  Members of the Full Bench, once again, Civic Disability Services refers to and relies on its submissions filed on 21 November 2017 in opposition to the proposal by the AED Legal Centre to remove all the wage assessment tools accepting the supported wage assessment tool from the supported employment services award.

PN5693    

In support of Civic Disability Services' position we refer further to and rely on the witness statement of Ms Nicole Fitze whom we've heard from yesterday in cross-examination.  At the commencement of these proceedings we outlined, in summary, the bases specific objection to the AED proposal.  Before addressing those bases and the evidence provided by Ms Fitze in these proceedings as well as some of the comments made by the Bench during the proceedings I wish to just comment briefly on the special nature of the work offered by Civic Disability Services to its supported employees as an AED.

PN5694    

Civic Disability Services is one of a number of ADE's who have led evidence in these proceedings.  The witnesses from Disability Enterprises in these proceedings, including Ms Fitze, have outlined their experience of the special and unique nature of the work offered by these services.  That work is quite different to that performed in commercial enterprises.

PN5695    

Civic Disability Services is a not for profit enterprise.  Its primary purpose is not to build a commercial or robust business.  That is an important matter but it is not the primary purpose of the organisation.  The primary purpose of Civic Disability Services is to provide services to people with intellectual disabilities or mental health conditions.

PN5696    

Civic Disability Enterprise division provides individuals with disabilities or mental health conditions an opportunity to attain goals, skills and independence by performing valuable and meaningful work that they would not otherwise have the opportunity to perform.  The nature of the work provided by Civic and other ADE's involves a sourcing of work designed to fit the person with the disability and we've heard that from a number of witnesses through these proceedings.

PN5697    

The work is constructed around the person with the disability as opposed to the other way around.  The nature of work provided by Civic Disability Services and other ADE's ought to be of primary consideration of the Fair Work Commission in these proceedings.

PN5698    

As I noted earlier we have in these proceedings previously summarised Civic's opposition to the AED Legal Centre's proposal.  We refer to the legislative framework set out in our 21 November submissions.  Firstly, Civic opposes the proposal on the basis that AED Legal Centre has not discharged its onus to demonstrate its claim as justified on the basis of the Modern Award objectives.

PN5699    

In opening we referred to the section 134 factors relating to social inclusion through workforce participation and the impact of business.  Ms Nicole Fitze has now given evidence and has spoken further on the matter in cross-examination, particularly relating to government funding.

PN5700    

Her evidence in these proceedings is that the funding provided via the government to Civic Disabilities Enterprise is insufficient to cover the costs associated with supporting and assisting supported employees.

PN5701    

It's been Civic's evidence in these proceedings that any requirement to use the SWS and the SWS alone will cause a cost impact to Civic Disability Services and will have the effect of limiting in a significant way its ability to engage supported employees with higher levels of support and assistance.

PN5702    

This would, in turn, limit the access of those persons with disabilities to engage in valuable and meaningful work.  It would also limit their ability to access other health and ancillary services and supports provided by Civic Disability Services.

PN5703    

For this reason the Commission should dismiss the AED Legal Centre's application.  We also say the AED Legal Centre has not satisfied the requirement that their proposal to change the Modern Award during this four-yearly review is satisfied on the basis of work value considerations.

PN5704    

We refer to the comprehensive account of the Civic Wage Assessment tool provided by Ms Fitze in yesterday's proceedings.  Ms Fitze spoke in detail regarding the factors assessed in using the tool, including the matters of supervision, behavioural support, breakdown of job tasks and training supports.

PN5705    

Ms Fitze spoke to how the civic tool is applied in practise and was able to provide clear guidance on the factors assessed and the process that is undertaken with people - supported employees in using the tools in the organisation.

PN5706    

She demonstrated the appropriateness of the tool to the work offered by Civic, taking into account the nature of the work performed, the level of skill or responsibility involved in doing the work and the conditions under which the work is done.  The civic - - -

PN5707    

VICE PRESIDENT HATCHER:  Ms Zadel, isn't the substance of that model with the employer is itself determining the wage rate to be paid?  Not the award?

PN5708    

MS ZADEL:  Yes.  And I take those comments on board and I understand that that's been a comment that has been raised through these proceedings and I will address that finally.

PN5709    

VICE PRESIDENT HATCHER:  Fine.

PN5710    

MS ZADEL:  If, having regard to the submissions and evidence before the Commission in these proceedings the Commission is of a view to make a decision to adopt a position that a new system ought to be introduced, Civic would appreciate the opportunity to further comment on that, taking into account the proposals that have been put forward by ABI in the New South Wales Business Chamber.  Other than that - other than what I have just outlined - and we have no further comments on this matter.

PN5711    

VICE PRESIDENT HATCHER:  Right.  Thank you.

PN5712    

MR WARD:  Your Honour, can I just - your Honour has asked me to find some more authorities on the phrase equal remuneration for work of equal - - -

PN5713    

VICE PRESIDENT HATCHER:  I think I've worked out the incident.  It's internal to the Act.

PN5714    

MR WARD:  Yes.  Well, my learned friend did take me to that as well.  So he's trying to help me get some sleep tonight.

PN5715    

VICE PRESIDENT HATCHER:  All right.  So can I just check if what we needed for tomorrow.  Mr Christodoulou, you will be making your submissions?

PN5716    

MR CHRISTODOULOU:  I will, your Honour.

PN5717    

VICE PRESIDENT HATCHER:  How long do you think you'll be?

PN5718    

MR CHRISTODOULOU:  About an hour and a half.

PN5719    

VICE PRESIDENT HATCHER:  All right.  Ms Walsh?  How long do you think you'll be?

PN5720    

MS WALSH:  Probably about an hour - about a three-quarters of an hour or three-quarters of an hour.

PN5721    

VICE PRESIDENT HATCHER:  Right.  Mr Stroppiana.  Mr Stroppiana, you'll be making a submission?

PN5722    

MR STROPPIANA:  I will, your Honour.

PN5723    

VICE PRESIDENT HATCHER:  How long do you think you will be?

PN5724    

MR STROPPIANA:  Approximately an hour - approximately an hour, your Honour.

PN5725    

VICE PRESIDENT HATCHER:  And will the Department be making a submission?

PN5726    

MR THOMPSON:  No, your Honour.

PN5727    

VICE PRESIDENT HATCHER:  All right.  But you'll be here tomorrow in case we want to ask you questions?

PN5728    

MR THOMPSON:  We will be here, yes.

PN5729    

VICE PRESIDENT HATCHER:  Excellent news.

PN5730    

MR MUSSO:  Your Honour - - -

PN5731    

VICE PRESIDENT HATCHER:  Mr - - -

PN5732    

MR MUSSO:  And yes, we'll be making a very brief submission as well.

PN5733    

VICE PRESIDENT HATCHER:  Right.  Now, Mr Harding, you want to reply.

PN5734    

MR HARDING:  Yes.

PN5735    

VICE PRESIDENT HATCHER:  Yes, all right.

PN5736    

MR HARDING:  Another full day.

PN5737    

VICE PRESIDENT HATCHER:  All right.  We will now adjourn and resume at 10 am tomorrow.

ADJOURNED UNTIL FRIDAY, 16 FEBRUARY 2018                    [4.27 PM]


LIST OF WITNESSES, EXHIBITS AND MFIs

 

EXHIBIT #179 ARTICLE BY RICHARD LUKING RE CONNECTING PEOPLE WITH DISABILITIES TO EMPLOYERS.................................................................. PN4926

EXHIBIT #180 DOCUMENT ENTITLED "EMPLOYING PEOPLE WITH INTELLECTUAL AND DEVELOPMENTAL DISABILITIES, REPORT BY THE INSTITUTE FOR CORPORATE PRODUCTIVITY.................................................................... PN4927

EXHIBIT #182 AUSTRALIAN SUPER DOCUMENTS............................... PN5331