PN1

JUSTICE ROSS: Can I have the appearances please?

PN2

MR K BARLOW: If it please the Commission, Barlow, initial K, for the CPSU.

PN3

JUSTICE ROSS: Thank you.

PN4

MR M CHESHER: If it please the Commission, Chester, initial M, for the MEAA.

PN5

JUSTICE ROSS: Thanks, Mr Chesher.

PN6

MR K ANDERSON: Mr Anderson, initial K, for the Australian Directors' Guild.

PN7

MR JE MURDOCH: If it please, your Honour, Murdoch, initials JE, for Birch Carroll and Coyle Ltd, the Hoyts Corporation Pty Ltd, the Greater Union Organisation Pty Ltd, Village Cinemas Ltd and Independent Cinemas Association of Australia and its employer members.

PN8

JUSTICE ROSS: Thanks, Ms Murdoch.

PN9

MR D HAMILTON: If your Honour pleases, Hamilton, Australian Entertainment Industry Association, trading as Live Performance Australia.

PN10

JUSTICE ROSS: Thank you.

PN11

MR S FORSTER: If the Commission pleases, Forster, initial S, for Seven Network Operations Ltd, Nine Network Pty Ltd and Network 10 Pty Ltd and their related entities.

PN12

JUSTICE ROSS: Thank you. In Darwin?

PN13

MR G BUTLER: Gerard Butler, your Honour, for the Australian Directors' Guild together with Mr Anderson.

PN14

JUSTICE ROSS: Thanks, Mr Butler. It might be easier if you keep your seat rather than standing because we're just having trouble getting you on the microphone. In Newcastle?

PN15

MR S BURKE: Mr Burke initial S appearing for Commercial Radio Australia.

PN16

JUSTICE ROSS: Thank you. Have each of you got a copy of the background paper that was published on 10 August to facilitate the conference?

PN17

MR BARLOW: Yes, thank you, yes.

PN18

JUSTICE ROSS: Let's just go through those issues. The first deals with the calculation of overtime. The Australian Directors' Guild made a number of observations about this issue which is set out in the background paper. What we're not clear about is what you want to do about this. That's the short point. You've raised the issue in general terms, but it's not clear to the Bench as to whether or not you're proposing a particular amendment and how you want to prosecute that claim. Mr Butler?

PN19

MR BUTLER: Yes, thanks your Honour. Essentially, your Honour what we're looking for and I must say, making it very clear, we're talking about directors in the motion picture production area of the award and motion picture production only of which there are only two classifications. There may be some residual flow-on into television broadcasting as well, but essentially your Honour, what's happened is, and if you follow it through logically, this essentially dates back to the introduction of the 38 hour week, many years ago, as I'm sure you'd recall.

PN20

But in reality, what's happened in the industry is that directors, if you like, are the ultimate example of the gig economy. They come in, they direct an episode or a series and then they exit. Now the way in which they work and traditionally have worked, is that they don't actually work a 38 hour week. They usually work a 50 hour week. To get to that 50 hour week the industry practice is to say that they have a system of so-called scheduled overtime which can either be, depending on what the base hourly rate - the base hours a week are, was either 38 hours or 40 hours.

PN21

Now the scheduled overtime component therefore consists of either 12 hours a week if you're working on the basis of a 38 hour week, or in the previous regime, when we had a 40 hour week, to get to the 50 hour week, you needed 10 hours a week of scheduled overtime. That became, if you like, for a better description, the all-purpose rate. The industry calculates the base rate of pay for a director on the basis of a 50 hour week. They then apply that 50 hour week rate to calculate entitlements, so irrespective of whether the scheduled overtime - - -

PN22

JUSTICE ROSS: Sorry, just step me through that. Does it work - I understand what you say about the 50 hour week proposition. Do you calculate then what you've described as the base rate, so the deal essentially is that you'll work 50 hours a week and this is the base rate of pay you'll get for the 50 hours, do you calculate that on the basis of 38 hours at ordinary time and 12 hours at an overtime rate?

PN23

MR BUTLER: Well, Commissioner, it's patchy because that's what should be happening but in some cases, we're aware of employers are still calculating it on the basis of a 10 hour rate, so it all comes back to how many hours pre‑scheduled overtime do you need to get to 50 hours. In the current national employment system and national employment standards, it's obviously 38 plus 12 is what you need to get to 50.

PN24

Again, the performance has been fairly patchy, in some areas and some companies have actually applied either a 55 hour week diviser or, in some cases, even a 58 hour week diviser to come up with yet another hourly rate that they use for some purposes.

PN25

JUSTICE ROSS: Well, let's just focus for a moment on what you say should occur and as I understand there should be 50 hour scheduled per week for directors. It consists of 38 hours at ordinary time, 12 hours at overtime. You're about to say - so you can calculate what that amount is, you're about to say that that then constitutes the base rate for a director and that informs the various allowances that might apply. Is that right?

PN26

MR BUTLER: Yes, and, your Honour, it's the rate that they are paid for annual leave and sick leave. It is effectively the all-purpose rate.

PN27

JUSTICE ROSS: Right. The award, as presently drafted, and the exposure draft, is your point it doesn't accommodate that circumstance?

PN28

MR BUTLER: Yes, and, your Honour, it doesn't accommodate it for two reasons. One, there's a general calculation issue and the difference between ordinary hourly rate and minimum hourly rate but secondly, there is a prohibition in both the exposure draft and the existing award which limits daily rostered or scheduled overtime to two hours a day.

PN29

JUSTICE ROSS: Right.

PN30

MR BUTLER: If you take the, just off the - - -

PN31

JUSTICE ROSS: Yes, that would only get you to 48 hours and you need 50 is that the - - -

PN32

MR BUTLER: Yes.

PN33

JUSTICE ROSS: Okay.

PN34

MR BUTLER: Frankly, your Honour, it looks like it's a hangover from - and bear in mind that in this award, up until the award modernisation process, and even during the award modernisation process, certainly Screen Producers Australia were suggesting two things. In 2009 they sought the maintenance of the 40 hour week and they sought the exclusion of multiple categories from the overtime provisions and the Full Bench in 2009 rejected that approach.

PN35

We then had a very quickly brought together award that covers television broadcasting, cinema, radio broadcasting, musicians, journalists, actors and I don't think, your Honour, that the parties have actually caught up with, nor has the award caught up with, the fact that there needed to be consequential amendments flowing from the move from the 40 hour week to the 38 hour week. Our organisation hasn't come into existence as a registered entity until, I think it was 2016, Mr Anderson?

PN36

JUSTICE ROSS: Yes.

PN37

MR ANDERSON: That's correct.

PN38

MR BUTLER: That's when we, if you like for a better word, came on the scene and bearing in mind our focus is exclusively on directors.

PN39

JUSTICE ROSS: You were saying before that it's directors in a particular sub-set of the awards coverage?

PN40

MR BUTLER: Yes, it's definitely directors in motion picture production and there may be a similar issue - - -

PN41

JUSTICE ROSS: In television.

PN42

MR BUTLER: - - - in various classifications of directors in television broadcasting.

PN43

JUSTICE ROSS: Do you represent those directors?

PN44

MR BUTLER: We have coverage of those directors, we have some membership of those directors but based on our discussions with some of the media companies who have talked to us, there is a view that our members don't actually fall within the various role descriptors or the classifications that are contained in the television broadcasting section of the award. For instance, we've been seeking with Channel 7 to clarify whether our members are covered by their enterprise agreement or not and Channel 7 advises that we're not covered but declined to do anything further in terms of discussions or confirmation.

PN45

The reality is, your Honour, we're a very small organisation. Certainly we're not trying to influence the broader industry but we are trying to look after directors and that's the issue we have and certainly the bigger players in the industry may do what they wish but, as I said, our purpose is directors only. If we've got members who the television broadcasters say are covered by the award or are covered by the television broadcasting part of the award, similar issues exist but if - - -

PN46

JUSTICE ROSS: Well, let's just - - -

PN47

MR BUTLER: - - - they say they're not covered by the television broadcasting part of the award, they're de facto covered by the motion picture production part of the award. Did that make sense?

PN48

JUSTICE ROSS: Yes. Well, let's not stray beyond the narrow issue for the moment and that is that in relation to directors in motion picture production, there's an issue around the scheduled overtime. There's a general calculation issue and there's an issue associated with the prohibition which limits daily overtime to two hours per day, so if we've got that as an issue, let's just get a reaction from the other parties and then we'll work out a way forward in relation to that issue.

PN49

MR BUTLER: Right, thanks, your Honour.

PN50

JUSTICE ROSS: No, sorry, keep to your seat.

PN51

MR CHESHER: Thanks, your Honour. Further to Mr Butler's comment about directors being affected by this provision, it is the case that all production staff involved in these ventures are affected. The 50 hour week is commonplace across the production sector in live drama television production as well.

PN52

JUSTICE ROSS: How does the two hour limit on overtime ‑ people just ignore it, or?

PN53

MR CHESHER: Generally speaking, your Honour.

PN54

JUSTICE ROSS: Yes.

PN55

MR CHESHER: Large parts of the sector are covered by an unregistered agreement which is binding upon most of the major parties through common law contracts that sit beneath the agreement.

PN56

JUSTICE ROSS: Yes, it probably wouldn't - it's probably - assuming that that's the case, I think it would be desirable to fix the award to better reflect the practice, otherwise employers are going to be exposed to breach claims and the problem is these things always work well when everyone's getting along swimmingly, but then when something goes pear-shaped, they tend to come to the fore. So if there's an issue - and your point is that the issue is broader than directors, it applies to which parts of the award?

PN57

MR CHESHER: It applies in terms of the exposure draft, your Honour, it applies arguably as Mr Butler said to television broadcasting. It applies to motion picture production, it applies to actors, those are the key parts of the award's discreet coverage that this matter covers. I just wish to place on the record and I don't expect your Honour to have a copy of this but MEAA did raise this issue in its first submission in March 2015, that the two hour per day cap was unsuitable. We have since said that we don't query that the convention is a 50 hour week, there's a lot of capital utilisation that people just accept that these are intense working periods. But there is a disjuncture I guess between the national employment standard as the minimum - of the weekly week definition and conventional practice within the film and television production sector. So in our - - -

PN58

JUSTICE ROSS: The NES permits reasonable overtime and that's really a contextual question, and this industry at the heart of the proposition you're putting is that reasonable overtime's around the - is something that results in a 50 hour working week.

PN59

MR CHESHER: Yes, it's sometimes calculated in a fairly bicentenary way but people tend to get there in the end. So the key issue for us has been that it's two hours versus 2.4 hours per day and if that is to be pursued through a distinctive additional clause to the award, MEAA would be open to that. In our first submission in 2015 we submitted that the clauses applying to overtime and its calculation be amended to clarify the days of up to 10 hours each includes 7.6 ordinary hours and 2.4 hours of scheduled overtime. Now it's a bit ago and I'd need to refresh my memory on what the most elegant solution might be. But that is the essence of the issue.

PN60

JUSTICE ROSS: Will that deal with the - as you say you'll get an opportunity to reflect on whether that's a variation in those terms or there's a different solution. That would deal with one element of what's been raised this morning. What about the other element about the calculation issue and how that works?

PN61

MR CHESHER: I'd need to conduct a further analysis on that, your Honour.

PN62

JUSTICE ROSS: No, that's fine.

PN63

MR CHESHER: This is a matter that MEAA initially proposed but did not press.

PN64

JUSTICE ROSS: Right.

PN65

MR CHESHER: Due to its complexity in part.

PN66

JUSTICE ROSS: Well, that might be a reason for us not getting too much into it but certainly the issue around the overtime limitation, not I suppose being updated with the introduction of the 38 hour week is something that probably should be addressed. I'll hear from the others in a moment but how long would you like to consider the solution to that issue, that is you put something forward then everyone else have an opportunity to comment on it and we could - but I imagine that could be resolved fairly quickly.

PN67

MR CHESHER: Yes, I believe so. A matter of weeks or a month for the initial stage to craft a proposal and to distribute it to affected parties. I should just sound one other note of caution, your Honour, and that is part of our reasoning for not pressing this clarification was that we don't want to de facto impose a 50 hour per week standard on the industry either. So it's not entirely in one direction.

PN68

JUSTICE ROSS: No, I understand the issue with it. I think though it's unsatisfactory whichever way you look at it really, that there is the practice at the moment of the 50 hour week and the scheduled overtime in at least this part of the sector. That logically follows from that that the parties are all acquiescing in a breach of the current award, and to the extent there's agreement, it would be better to avoid that outcome is really the direction I'm looking at it from.

PN69

MR CHESHER: Yes, your Honour.

PN70

JUSTICE ROSS: All right, well anyone else with an interest in this particular issue?

PN71

MR MURDOCH: No, thank you.

PN72

JUSTICE ROSS: Very wise, Mr Murdoch, yes.

PN73

MR FORSTER: Your Honour, I think that leaves me for the television networks.

PN74

JUSTICE ROSS: Yes.

PN75

MR FORSTER: For today's purposes I can say that I act for the television networks in relation to the directors employed on their own in-house productions and those directors - - -

PN76

SPEAKER: Your Honour, I can't hear.

PN77

JUSTICE ROSS: Yes.

PN78

MR FORSTER: I apologise, is that better?

PN79

SPEAKER: Yes.

PN80

MR FORSTER: I'll repeat myself briefly. For today's purposes we do appear for the television networks in relation to their directors who are employed on in-house productions. They are covered by the television broadcasting stream of the award not the motion picture production stream of the award, although there is some possibility that the related entities of my clients might have some interest in the motion picture production stream. So our position in relation to both aspects is we really need to see what is going to be proposed in order to respond in relation to the issues in connection with both streams.

PN81

What I can say about the television broadcasting stream is that the practices do vary from production to production, not all productions are manufactured in the same intensive style as productions are in the motion picture production stream, and that is because there are some seasonal dramas that spring readily to mind that have been running in Australia for a long, long time, decades in some cases that are shot over much longer periods and it's not always the case that a 50 hour week or a 55 hour week or some other minimum number of hours is required. We'd be very keen to ensure in the television broadcasting stream that there's just sufficient flexibility for our clients to manage their productions, and that there's not any sort of residual consequences from what's proposed.

PN82

Coming to the immediate issue of the motion picture production stream and the issue of overtime and the capacity to schedule a certain number of overtime hours, I'll say this. That it's only a couple of schedule overtime, so there is still the capacity to work overtime in excess of that provided that it is reasonable. The issue is about scheduling and I have to say I agree that there is a 50 hour standard in that stream and so 2.4 hours does seem sensible. We will need to consider the point though, which is that the 50 hour rate that is paid to people constitutes an all-purpose rate. That seems to me quite a different proposition.

PN83

JUSTICE ROSS: Sure.

PN84

MR FORSTER: Thinking about what was put about 55 hours and 58 hours being used as a devisor to calculate a base rate. If we contextualise this issue that - it has been put as a hangover issue from the 40‑hour week - it's quite easy to see how a 55‑hour divisor comes about. If you work 40 ordinary hours in a week and 10 hours of overtime, comprising two hours each day calculated at time and a half, that's another 15 hours pay per week. So if you use a 55‑hour divisor, that brings you back down in fact to your base rate. That's pretty simple I think in mathematical terms, and that's because for the purposes of entitlements like annual leave, personal carers leave, et cetera, these instruments are minimum rates instruments, minimum terms and conditions, and it's appropriate to bring it back down to that standard. So we'll need to very carefully consider anything that would change the prevailing position in relation to modern awards, which is that they're minimum rates instruments.

PN85

JUSTICE ROSS: Yes. I'm not really at the moment delving too much into the calculation issue. I think we'll chew it off one bit at a time.

PN86

MR FORSTER: Thanks, your Honour.

PN87

JUSTICE ROSS: All right. Well, then can MEAA, perhaps in discussion with the ADG, give further consideration to the overtime issue and file its proposal by 4 pm Friday, 14 September? So that gives you about four weeks, and then everyone will have an opportunity to consider that, and then we'll see what the next step is in relation to that issue. The next issue is the loaded minimum hourly rate.

PN88

MR BURKE: Excuse me, your Honour?

PN89

JUSTICE ROSS: Yes?

PN90

MR BURKE: Mr Burke here. Before you move off issue 1, could I raise a separate matter?

PN91

JUSTICE ROSS: Sure.

PN92

MR BURKE: The matters we've been discussing now have been raised specifically in relation to provisions relating to Part 7 of the award for television broadcasting. These don't affect commercial radio. Its members are covered by Part 8, which deals with radio broadcasting. However, there are references to the minimum hourly rates in Part 8 of the exposure draft and other parts, and Commercial Radio Australia is keen to understand if there's going to be a change to the provisional view that's expressed in paragraph 137 of the 7 August decision, which is that overtime should be calculated by reference to the ordinary hourly rate rather than the minimum hourly rate; whether there's an intention to amend the references to minimum hourly rates in other parts of the award flowing from this consideration.

PN93

JUSTICE ROSS: Okay. I'll note your interest but - - -

PN94

SPEAKER: Sorry, can I just respond to that?

PN95

JUSTICE ROSS: No, because I'm not really going to give you an answer, so there's not much point in pursuing it any further at this stage. You've noted your interest and what you want to know, and I'll provide the transcript to the rest of the members of the Bench and we'll see where the matter goes from there. But everyone will have - if there's to be a change, everyone will have an opportunity to comment on it.

PN96

MR BURKE: Thank you, your Honour.

PN97

JUSTICE ROSS: Let's move to the loaded minimum hourly rate. This issue started with a request to provide submissions about how the matter is calculated and it's still not clear to the Full Bench whether or not the loading is cumulative or compounding. A number of you have raised various issues about the loading and how it operates. In its submission, MEAA proposed an amendment to clause 13.4. This is at paragraph 16 of the background document, and the issue at the moment is whether MEAA intends to - if they can confirm what they want to do with this proposed variation, and then we'll hear from the other parties about whether there's any opposition to it.

PN98

MR CHESHER: Thank you, your Honour. The answer is yes, that MEAA would seek to press that variation to clause 13.4, as it appears in the exposure draft.

PN99

JUSTICE ROSS: Okay.

PN100

MR CHESHER: Unfortunately, your Honour, this is a matter that tends to generate several questions, including in this instance - and I note the Commission's question about compound and cumulative, and I think there's a difference of opinion between the parties in a pre‑conference, short conversation today, your Honour. MEAA's view is that the 8 per cent is a loading that is absorbed. It becomes part of the minimum rate, and once that 8 per cent is loaded, so for example, $20 per hour as the base rate, that you add $1.60, being 8 per cent of $20, to that rate and then the new minimum rate is $21.60, and it is from that amount that casual loadings, for example, are added. I have any number of historical documents. I don't wish to put my friends in the cinema industry on the spot where that has been the basis of calculations over years. I believe - and they'll speak for themselves - that their view is different, and that is that the discrete loadings are added to the bare base rate, so that for $20 an hour, 8 per cent of that is obviously $1.60, but 25 per cent of that base rate is $5, and that ends up with a figure of $26.60 per hour versus the MEAA formulation of $27 per hour. We could talk about these ad nauseam and unhelpfully, but that has always been MEAA's position, that this was a trade‑off long ago for dispensation of penalty rates over weekend periods and the benefit was accrued particularly to those employees who worked Monday to Friday within the cinema sector. So that is MEAA's position that the loaded rate, which has been expressed as the minimum rate in past Commission decisions, is the rate upon which you then calculate additional entitlements.

PN101

JUSTICE ROSS: Okay. You also make some observations about - you query the equity of the rate, the 8 per cent. I wasn't sure what you were intending to do, if anything, about that. Do I understand from what you're currently saying that you want clarification that it's compounding and it operates in the way you've articulated, and you want a variation to clause 13.4 along the lines you've identified, but are you pursuing anything else in relation to the 8 per cent?

PN102

MR CHESHER: Your Honour, the sector has changed quite a bit in 20 years, and the level of casual and junior employment, and you will see appended to our 20 April submission, has increased, and I dare say since 2015 when those figures were produced by the employers that those rates have risen. It did appear to contrast unfavourably with the Full Bench's recent determinations on penalty rates for Saturday and Sunday work. It's not without potential downside, but as a matter of conventional comparison it did appear that in comparison to like modern awards for fast food and the retail industry that cinema employees, whose work is fundamentally centred on Fridays, Saturday and Sundays, that they would earn substantially less. We've drawn some bare bones comparisons in our submission, your Honour, to the applicable rates across those modern awards, in paragraph 24 of our 20 April submission for example. So, the answer to your question is that we would be supportive of the Commission considering an exercise of its powers under section 590 of the Fair Work Act to conduct an analysis aided by the parties to discern the relative equity of these arrangements.

PN103

For the reasons outlined in our submission there's been ongoing discussion of the so-called PUB test, your Honour, over a long period and I think MEAA is no longer satisfied that the eight per cent that was agreed in 1997 and affirmed by the Industrial Relations Commission no longer sits as an entirely equitable arrangement and indeed, could be incompatible with the modern award's objective covering persons who work irregular and socially unfriendly hours. Notwithstanding that there are a high number of genuine employees these days.

PN104

Given the trend within the cinema workforce toward casualisation to junior employees to ever diminishing levels of permanent employment, be it full time or part time, I think that there is a credible question for the Commission to consider. But beyond our suggestion of the Commission exercising its powers under section 590, we really would be in your hands.

PN105

Just to finally backtrack on the issue of the eight per cent loading, given that I'd not fully understood the different approach that some employers take to whether it's compound or cumulative, I think depending on the outcome - depending on consideration of that issue that clause 13.4 would maybe assisted by a further small clarification. That can be affected in the minimum wages part of the award, your Honour.

PN106

JUSTICE ROSS: Well, I mean absent a proposal to change the eight per cent in some way, I'm not sure that we would be launching our own enquiry. There would be at least three possible outcomes from such an enquiry that I think you'd need to reflect on. One is a status quo position with no change. The second would be an adjustment to the eight per cent up or down. The third would be the elimination of the eight per cent and the establishment of penalty payments for work in evenings and on the weekend.

PN107

MR CHESHER: Yes, I agree, your Honour.

PN108

JUSTICE ROSS: It's just that we might start stumbling down the path and it might end up in a destination that may have consequences for your members. That's why doing it of our own motion is a little fraught.

PN109

MR CHESHER: There's a long history of unintended consequences, your Honour.

PN110

JUSTICE ROSS: No, indeed and I don't want to sort of add to it.

PN111

MR CHESHER: No.

PN112

JUSTICE ROSS: I think it's something that your organisation might wish to reflect on and if you do with to pursue a variation in whatever form, then if you could indicate by the date that I'd suggested for issue one, 14 September and then we'll have an idea about where we go with it.

PN113

MR CHESHER: Thanks, your Honour.

PN114

JUSTICE ROSS: But let's for the moment focus on the other two issues, the cumulative versus compounding and the proposed amendment to 13.4. What do you want to say about that Mr Murdoch?

PN115

MR MURDOCH: Yes, thank you. So far as the union's proposed draft that's set out in paragraph 16 of the background paper, my clients agree to that clause going in as set out in paragraph 16.

PN116

JUSTICE ROSS: All right. This issue around the way you calculate or apply the eight per cent, is it as Mr Chesher has indicated that one, if you take $20 one applies the eight per cent to that and then $21.60 becomes the minimum rate for that employee? Then if there are casuals, you apply the 25 per cent loading to that $21.60 rate? Or is it done differently?

PN117

MR MURDOCH: Your Honour, within the industry there are different views and those views seem to have persisted for a long time. Those who instruct me, instruct me that their view is that it's cumulative in the sense that for a casual hourly rate to be calculated, one starts with the hourly base rate and does two calculations.

PN118

JUSTICE ROSS: Yes, I follow.

PN119

MR MURDOCH: Then one does the addition. Now there are respected people in the industry who have a different view. Ultimately, it would seem to be a matter where if the union says that some employers are non-compliant, then the union ought to, we would respectfully submit, get a declaration from court in relation to the current wording.

PN120

JUSTICE ROSS: Well, we're reviewing the award though and part of that process is to clarify how a provision is intended to operate. We're confronted with different views about how it's intended to operate. How we would resolve that is to determine the question in the redrafted award to reflect the views of either your clients of MEAA's. It's really how do we resolve that issue. There's not much point in declaratory relief on the current award which is in the process of review anyway. We will deal with the matter as a matter of merit.

PN121

The issue then becomes what's the process for that? It is a matter in your view that can be dealt with my written submissions, or is it a matter that would involve any evidence?

PN122

MR MURDOCH: Potentially it's a matter that could be dealt with by written submissions.

PN123

JUSTICE ROSS: Perhaps supplemented by an oral hearing, that's fine. I was really just trying to see whether it's something that would be submission based or is it something that evidence is likely to be called in?

PN124

MR MURDOCH: Well, look it's difficult in the sense that there have been practices and it was accepted by the parties that some people do it, some people don't. It would then be a question of the Commission if it was its will to build on which camp was to be the preferred view, to put it lightly.

PN125

JUSTICE ROSS: Yes. No, no, I think that's right, yes. I think that is likely to be where it would get to.

PN126

MR MURDOCH: That would essentially relate to examination of some fundamental principles in relation to how one applies penalty rates and the old never-solved issues of do you put casual rates on top of penalty rates. They're really matters of principles. That is why I link to the view we could start by trying to deal with it by means of submissions, but if factual differences emerge, then evidence might be necessary.

PN127

JUSTICE ROSS: It may also go to the unusual history and what was the intent at the time the eight percent was arrived at and whether there's anything that would assist us on that, but okay, all right. What do you say about it, Mr Chesher?

PN128

MR CHESHER: Your Honour, the statement by Mr Murdoch that there's a diversity of opinion about how to interpret a provision of a modern award, I think answers the question of whether some further analysis is required. I don't know where one heads from that particular problem in that from an employer perspective, not verballing my friend but, it seems permissible to apply two sets of rules depending on the workplace and the employer so that is, of itself, unsatisfactory.

PN129

JUSTICE ROSS: Well, in any event, there's an issue between you about whether it's cumulative or compounding and there is agreement to vary clause 13.4 in the manner outlined in the background document, so the other issue would be referred to a Bench that's dealing with any of the substantive issues arising from the award.

PN130

MR CHESHER: I - - -

PN131

MR MURDOCH: Your Honour, I'm sorry - - -

PN132

JUSTICE ROSS: Yes, that's all right, Mr Murdoch.

PN133

MR MURDOCH: Just to finish off on the other matter that you traversed, namely the equity issue that the union raised in relation to having an eight percent penalty loading, our view was that it is a matter that has arisen very late in the modern award review. We don't dodge the issue. If the union proposed to bring an application, they've got the right but it really, with respect, should be a separate case not tacked on belatedly to this long running review of the modern award.

PN134

JUSTICE ROSS: Well, we'll see what they want to do with it and in any event it may not make much difference. It would have to be heard and, well, I think at this stage, it's a bit premature. We'll wait and see what the union wants to do with it. Can I go to issue three, the directors loading. This is also an issue for Mr Anderson.

PN135

MR HAMILTON: Excuse me, your Honour.

PN136

JUSTICE ROSS: Yes.

PN137

MR HAMILTON: Sorry, your Honour, back to the loading, I was the person that negotiated the eight percent in a similar award back in 1997 in front of Commissioner McDonald.

PN138

MR BUTLER: Your Honour, can I just the parties to speak up. I'm really having difficulty hearing them.

PN139

MR HAMILTON: Sorry. Is that better?

PN140

MR BUTLER: Yes.

PN141

MR HAMILTON: We've been consistent in our submissions to the Commission back in the award modernisation process in 2009 when the eight percent was inadvertently left out, that the eight percent formed part of the minimum rate and that was agreed to by the Full Bench in 2009. Just as an aside, your Honour, the pay tables issued by the Fair Work Ombudsman set out the pay rates for cinema workers in the way that Mr Chesher has highlighted this morning, so the minimum rate plus the eight percent casual loading and the Fair Work Ombudsman then states that the employees minimum rate is that rate inclusive of the eight percent.

PN142

In sections of the industry that I represent, that has been the basis for the calculation of the casual rate as per the Fair Work Ombudsman pay rates. The intent of the - and I probably the only one that knows because Commissioner McDonald's no longer here and MEAA's representative is no longer at the union who we negotiated that rate, but that rate was intended to form part of the minimum rate and any casual loading added on top of that.

PN143

With regard to the other issues Mr Chesher has raised, prior to the 1983 Cinema Award, the live performance area and the cinema area were all contained under the one award, the 1947-1978 Theatrical Employees Award. That award provided classifications and pay rate for cinema and live performance and the only rates, only penalty rates, contained in that award and have followed other replacement awards over the years has been double time on Sundays and, of course, overtime after an eight hour day.

PN144

There were no penalty rates for working at night time and there was no penalty rates for working on Saturday and that would probably meet the criteria of our industry where we are providing entertainment for those members of the public that wish to enjoy entertainment at night time. If I remember correctly, your Honour, it was 1976, Commissioner McLaggan(?) had a minimum - not a minimum rates, a work value case and in that case, and I'll stand corrected, your Honour, it's just going back on memory, the rates of pay for ushers and those less than a tradesperson were actually increased to provide an amount in their minimum rate for work at night time because that's what our industry does.

PN145

We would caution any case seeking to go down the path of introducing penalties that have never been involved in this award and we would also question the statements from the union that casual employment has increased in this industry. Our industry, ever since cinema and live performance has operated, has always relied on casual employment more than part time and full time employment and that's because of the nature of the industry.

PN146

Some films work and you need a lot of people in a cinema. Other films don't where you don't need a lot of people in the cinema. We would also question Mr Chesher's claim that there's been an increase in junior employment in the cinema area as well because I'm not sure about your children, your Honour, but I know mine and friends of mine sons and daughters worked in the cinema to get themselves (a) to watch a movie but also to earn extra pocket money when they're at school, so we would also want to challenge those type of arguments from the union. If the Commission pleases.

PN147

JUSTICE ROSS: Thank you, Mr Hamilton. Can I go to the directors' loading issue and the ADG's submission in relation to this and you'll see at paragraph 22 of the background document it sort of reflects the fact we're not clear what exactly you are seeking, and whether you're proposing a variation.

PN148

MR BUTLER: Yes, your Honour, we will be proposing a variation but the reason we were somewhat uncertain about it was, as I said before, the employers or certainly at least one of Mr Murdoch's clients had advised us that our members were not covered by the directors' EBA negotiations or for that matter award issues. Now the issue is really to do with in-house employees of the television broadcasters who are producing product. If you look at the actual provision and even if one goes further back and looks at the quantum of the provision, effectively what it does in television broadcasting is exempt or exclude directors or certain categories of directors as distinct from directors in general terms from the award provisions relating to annual leave, ordinary hours of work and rostering, meal break penalty, overtime shift and weekend penalties.

PN149

It's purportedly done by agreement but there's no reconciliation mechanism to it. So to that extent it's a facilitative provision effectively on an individual basis and consistent or one, your Honour, could almost call it an annualised salary arrangement. Our position is that it should be subject to the expected or normal provisions relating to such matters. There should be a better off overall test applied to it or at least a balancing or calculation to ensure that the actual 25 per cent allowance or loading that is paid actually represents the full value, if you like, of the benefits that are foregone. As I said we'd had some difficulties with some of the television broadcasters in even getting an acknowledgement of our coverage right and even further difficulties when we've sought to participate in their enterprise bargaining arrangements.

PN150

That's kind of the backdrop. So to that extent, in terms of working through the issues there's a need to look at the classifications of director that are identified as being covered by the loading, because if you look at it there's a classification of supervising director, director/specialist - now we don't know what that is, and/or senior director. If you go further back into the detail of the broadcasting section of the award, you'll find that it contains a list of somewhat outdated classification descriptors. That's the second issue.

PN151

JUSTICE ROSS: Sorry, when you say - when you say supervising - director specialist, is that not a classification that's defined in the award?

PN152

MR BUTLER: Yes, but it's not a classification that's used in relation to our membership.

PN153

JUSTICE ROSS: Right.

PN154

MR BUTLER: Our membership is simply described as director.

PN155

JUSTICE ROSS: Right.

PN156

MR BUTLER: It very much, your Honour, dates back to the days of when live television was using a much different technology to what it has now and in that case you had control desks, usually manned by a director in relation to - that was in relation to television broadcasting, and if you like there was an exemption for the broadcasters from the motion picture production section of the award for their in-house production group. So if they were making a serial or a television series, because those were made by a television broadcaster, the motion picture award exempted those television broadcasters from coverage and said okay, television broadcasters who are involved in motion picture production have their own conditions of employment.

PN157

Those conditions of employment have been very much superseded and your Honour frankly the definitions haven't kept up and the classifications haven't - again haven't kept up with reality, and as I said before there's been considerable reluctance from some of the employers to even engage with us on these issues. So in our view, we've at least got one significant matter clarified today and Mr Murdoch and some of his clients might like to consider that, as to are they purporting that our members are covered by television broadcasting when they're working on in-house motion picture production. If they are then we want to talk to them about the application of the provisions, and the employment arrangements.

PN158

JUSTICE ROSS: Just bear with me for a moment, I just want to - - -

PN159

MR ANDERSON: Could I just add, your Honour, that particularly in the changing technology the director's position has changed radically and on one particular show which has been going for 30 years on the Seven Network, and I think we know which one that is, there were such things as supervising directors et cetera. They don't exist anymore so - - -

PN160

JUSTICE ROSS: So there are issues really. There's the classifications in the awards - in the award dealing with directors, whether that's kept pace with developments in the sectors, and the second is the application of some better off overall test to the director loading.

PN161

MR ANDERSON: Yes.

PN162

JUSTICE ROSS: Yes.

PN163

MR ANDERSON: And obviously one influences the other and that's, you know, as Mr Butler said we've only been in the game a short time but obviously we've had to review everything that we've come across and really what we're, you know, in terms of the review trying to get us to catch up with what's actually going on in the industry now.

PN164

JUSTICE ROSS: Right. I think you've been verballing Mr Murdoch but you should have been directing it at Mr Forster and we'll come to him now. So there are the to issues.

PN165

MR BUTLER: Sorry, your Honour.

PN166

JUSTICE ROSS: There's the question of whether the classifications in the award in relation to directors reflects current reality and there's the second issue of the director loading and the application of a BOOT type test to it.

PN167

MR FORSTER: Your Honour, I'm not in a position to speak to the first issue because it was not something that I had expected to be raised. The background paper and the submission of the ADG I think sort of left my clients in the same position as your Honour and the Full Bench, not really understanding what was being put in relation to this issue. If there is to be a proposal about the inclusion of some sort of reconciliation mechanism or a better off overall type assessment, we'll consider that and respond to it accordingly.

PN168

In relation to some comments that have been made about the reluctance of my clients to engage with the ADG about certain issues relating to their coverage in the television broadcasting stream, can I just say this. I don't think this is the right forum for that to be raised because your Honour will know that my organisation and me in particular, have been coming along to this award review for a number of years now and in that entire time my organisation and me, and I know this was in advertent, but I think it shows by the fact that my friends were directing their comments to another person, have not sought to engage with us about this particular matter. If there are issues about enterprise bargaining and the like, they're quite separate matters. We will happily consider any proposal and come back to the Commission on those matters.

PN169

JUSTICE ROSS: Well, I think probably the best way forward with that is for ADG to be given some time to consider what variations they're seeking, both in relation to the Directors' loading, whether it's a BOOT or reconciliation mechanism. Also, to identify which particular classifications require some variation. If you could do that by 4pm on Friday 14 September, and that gives you about four weeks, the same as has been provided to MEAA. There would be liberty to apply in the event you hit some sort of unforeseen problem, but I think we need to get down to the detail of what's being proposed.

PN170

Now that you're both here, you can discuss directly whatever issue you have about bargaining and recognition. For the moment I just want to focus on what changes are being sought. If you could do that within that timeframe.

PN171

Is there anything else? No? All right.

PN172

Well, as I've indicated, we'll hear from you within those time frames and that will give us a better idea of what issues are being pressed and then we can clarify the views of the parties in respect of those issues. Thanks very much for your attendance.

PN173

I will adjourn.

ADJOURNED INDEFINITELY [11.14 AM]