PN1

JUSTICE ROSS: Could I have the appearances, please. Firstly, in Sydney.

PN2

MR M NGUYEN: Your Honour, Mr Nguyen, initial M. I am from the Australian Manufacturing Workers Union.

PN3

JUSTICE ROSS: Thank you, Mr Nguyen. You might just keep your seat so that the camera and microphone can track you.

PN4

MR B FERGUSON: Your Honour, Ferguson, initial B, for the Australian Industry Group.

PN5

MS K THOMSON: Your Honour, Thomson, initial K, seeking permission to appear on behalf of ABI and the New South Wales Business Chamber.

PN6

JUSTICE ROSS: Thank you. In Melbourne?

PN7

MR T CLARKE: Trevor Clarke, ACTU.

PN8

MS K BIDDLESTONE: Biddlestone, initial K, for the SDA.

PN9

MS V WILES: Wiles, initial V, for the Textile, Clothing and Footwear Union of Australia.

PN10

JUSTICE ROSS: Thank you. In Canberra?

PN11

MR S HARRIS: Yes, your Honour. Harris, S, for the Pharmacy Guild of Australia.

PN12

JUSTICE ROSS: Thank you. We have had the opportunity to read the written submissions and the summary of those submissions has been published. What I would propose to do, subject to any objection, is to go through each of the standard clauses, clarify where matters seem to be agreed and there's no need to deal with those, then to raise the matters about which there are either no comments by other parties or about which seem to be in contention.

PN13

Can I also indicate at the beginning that the CFMEU and the TCFUA note that in a number of awards there are already deviations from the standard term. I just want to make it clear that in those instances, consistent with the approach we have taken not seeking to change the substantive legal effect of a provision, those particular clauses would be the subject of some modification reflecting their current level of difference with the standard term when we finally come to settle these matters, so you don't need to raise that point.

PN14

Can I go through then the matters in respect of the award flexibility clause and there are, I think, seven issues. The first issue is the note at A1. Correct me if I'm wrong about this, but there is no opposition to the removal of the note. Secondly, there is a provisional view that clause A4 be deleted and that also seems to be agreed. There is general agreement as to the variation of clause A1.

PN15

The only difference here is that the ACTU and some of the unions propose to insert the word "both" before the word "employee". In the expression "in order to meet the genuine needs of" it would read, on the ACTU's submission, "both employer and employee". Can we just deal with that point. Mr Clarke, I note the language you propose is different to the language in the Act. That would be the first observation.

PN16

MR CLARKE: It's just an effort to highlight that genuine agreement is a requirement and highlight that in a way that ensures it's likely to be understood by users of the award. If it doesn't meet the genuine needs of both parties, then perhaps contrary to the situation under section 145(2), it isn't an IFA and never was, so it's probably important just to ensure that it's highlighted. I mean, it's not a die in a ditch issue. We just thought it made it a little bit more explicit.

PN17

JUSTICE ROSS: What are the views of the employer organisations?

PN18

MR FERGUSON: We were largely indifferent to it, apart from the point that you just raised about it being different to the Act - - -

PN19

JUSTICE ROSS: All right.

PN20

MR FERGUSON: Whether it's necessary in that context.

PN21

JUSTICE ROSS: Well, I just want to know whether you oppose, support or indifferent.

PN22

MR FERGUSON: We're not opposed. We're indifferent.

PN23

MS THOMSON: Indifferent.

PN24

JUSTICE ROSS: NFF? Mr Harris?

PN25

MR HARRIS: Nothing, your Honour, on that side.

PN26

JUSTICE ROSS: I'm sorry, what was that? I can't hear you. You will need to � I don't know where the microphone is.

PN27

MR HARRIS: We're indifferent to that one, your Honour.

PN28

JUSTICE ROSS: Can you repeat it? I still can't hear you.

PN29

MR HARRIS: Indifferent to the comments.

PN30

JUSTICE ROSS: Okay. All right. Thank you. The next item was the deletion of clause A.5; a provisional view that it be deleted. There didn't appear to be any opposition to that course. The retention of A.6, that was originally proposed by ACCI. They were invited to confirm their view. We have not heard anything from them. Ai Group has indicated that they no longer support the deletion and other parties support the retention. Anything else on that? No?

PN31

The amalgamation of clauses A.7 to A.9, that also was initially an ACCI proposition. They were provided with an opportunity to advise as to whether they wish to pursue it. No submission was received and the proposal does not appear to be supported by any other party. The next, item 6, is the proposed amendment to A.8(d). There was a provisional view "show how" in A.8(d) be replaced by "state how". That was supported by some organisations.

PN32

The ACTU propose that "set out how" be inserted into A.8(c) and (d), arguing that's consistent with the usage in the Act and within the section. That position is supported by the AMWU, TCF and CFMEU. Can I just test that proposition. Does anyone oppose the ACTU's proposal that it say "set out how"?

PN33

MR FERGUSON: No.

PN34

JUSTICE ROSS: No?

PN35

MS THOMSON: No, your Honour.

PN36

JUSTICE ROSS: Everyone content with that? All right. Let's move on to the next, which is probably really the only one of much contention in this space. That is the inclusion of A.14 as a clause or a note. There is some contention about whether it remain as a clause. That is mainly agitated by the ACTU and I'll come to that. The issue where there is a clearer difference is around the language of the note itself.

PN37

Let me deal with what the ACTU contends is a technical difficulty, Mr Clarke. I'm having a bit of difficulty, speaking for myself, following that argument because the Act requires that relevantly the term must set out how the flexibility arrangement may be terminated by the employer and employee. Well, the standard term at clause A.11 expressly deals with how the arrangement may be terminated, so that seems to be in compliance with that, but moreover the termination provisions in section 145(4) are incorporated into the term, in any event, by force of that provision.

PN38

So to the extent that you say the term has to include expressly the provisions in 145(4), well if that was right why would 145(4) say that they're incorporated by reference - by force of the provision?

PN39

MR CLARKE: Well, that's raised, in our submission, as a - you know, in all candour as a point that goes against our construction. The construction point was not raised out of any, you know, desire on the need of substantive merits to put it there but it was just an observation when we were going through it that that may be a requirement and there's an argument in favour of that construction and an argument against that transaction - that construction.

PN40

JUSTICE ROSS: So is it put more that it's a matter you're bringing to our attention rather than you're advancing an affirmative submission that we're not able to proceed with it as a note, as opposed to a substantive term?

PN41

MR CLARKE: No, we're not urging that course but we thought it appropriate having gone through it to bring the construction point to your attention.

PN42

JUSTICE ROSS: Right. Is there anything else anyone wishes to say about the construction point before we go to the note issue? No? Right. Let's then go to the note and here we're comparing - if I take you to the statement of 20 July, there's a note at paragraph 50 which is the note under the current provision and there is the provisionally expressed note under 62. There seemed to be two points raised about the note. The first is that some of the unions contend that they want to - I think this might be the SDA. They want to retain that part of the current note which says:

PN43

If any of the requirements of section 144(4) -

PN44

And then goes onto say:

PN45

Which are reflected in the requirements of this clause are not met.

PN46

They prefer that to the note at 62, which simply says:

PN47

If the arrangement does not meet a requirement set out in section 144 then the particular termination provisions in 145(4) apply.

PN48

I think the difficulty with the proposition in the current note or the inclusion of the expression which are reflected in the requirements of this clause, is that that goes beyond the particular circumstances which enliven the termination provisions in 145(4). 145(4), those termination arrangements operate if the arrangement does not meet a requirement set out in 144. What the current note would have you look at - well, it can work both ways. It actually might be narrower or broader because if some - I don't think this is the case but if some of the requirements of 144 are not reflected in the model term then you would not be able to terminate or the note would suggest you can't terminate under 145(4), and that can't be right either.

PN49

It's really that those words which are reflected in the requirements of this clause don't find their way into the statute at all, and they don't condition the termination provisions. So I think that's a difficulty with that proposition. The second proposition is one ABI raises that suffers from a similar difficulty on its face at least. They say that the reference in the provisional note to section 144, rather than the reference to section 144(4) expands the operation of the termination provisions.

PN50

Well, speaking for myself, I'm not sure I follow that because section 145, if I take you to section 145, the operation of the section including the termination provisions in (4) is governed by subsection (1). It says:

PN51

The section applies if -

PN52

and relevantly -

PN53

the arrangement does not meet a requirement set out in section 144.

PN54

So that's what governs the operation of the section. The reference to 144(4) is in subsection (3) and it seems to me to be dealing with a different point, not with the scope and operation of the termination provisions.

PN55

Can I invite you to respond to those propositions, perhaps dealing with the last first. What does ABI say about that point?

PN56

MS THOMSON: I take your point, your Honour. The proposed wording's not opposed at paragraph 62 of the judgment.

PN57

JUSTICE ROSS: Thank you. Then let's go back to the earlier proposition about the inclusion of the expression which are reflected in the requirements of this clause. Ms Biddlestone, was that an SDA point? Was I right about that?

PN58

MS THOMSON: Yes. Your Honour, I understand the point you're making. The submissions I made were in relation to what the current award actually says, which are reflected in the requirements of this clause. Sorry, that's why we made the suggestion that those words should stay in the redrafting of the clause.

PN59

JUSTICE ROSS: I mean I take it you - it might be putting it too hard, but you accept the point I'm making that I think the retention of those words creates a difficulty that may advantage an employee or may not, but in either case it goes beyond the circumstances in which the termination provisions in 145(4) operate. This is really a note which is just intended to reflect - draw your attention to those provisions and it may be misleading to include the additional words in that context.

PN60

MS THOMSON: Yes. No, I understand that.

PN61

JUSTICE ROSS: Right. Let's then go to B, which has excited quite a bit of interest, and am I right in characterising the position this way that there doesn't seem to be any support for the proposed changes, on the basis that they variously add complexity and they also may change the substantive effect of the current term. Is that the general consensus?

PN62

MR FERGUSON: Yes.

PN63

MS THOMSON: Yes, your Honour.

PN64

JUSTICE ROSS: Yes, all right. Then I don't think we need to hear from your further about that. Then we go to C, consultation about changes to rosters or hours of work. There was a proposed change to clause C.3(b) at paragraph 78 of the July statement. It seems to be the case that that was generally supported or not opposed and on that basis I don't think we need to spend any further time on that.

PN65

In relation to clause D, dispute resolution, there were three matters. The first I'll come back to, this is about the terminology of "party" and "parties" or "employer" and "employee" and there is a clear division of view about that. The second is the insertion of the word "process" in clause D7, and that was generally agreed. The third was ABI's proposal that I just want to perhaps go to first because it faces a fairly short point.

PN66

You were proposing that the words "Fair Work Commission" go in front of the word "process" in D7. Before I invite comment from others, the only apprehension I had about that was that the parties can, of course, agree on a process which may or may not be a process before the Commission. They may agree to an independent arbitrator or some separate body from a statutory body. If you add "Fair Work Commission process" in front of it, that may limit their capacity to be represented to that sort of process. I didn't apprehend that that was the intention, you were just seeking to clarify and the linkage with the earlier provision. But having brought that to your attention, do you still press the insertion of the words?

PN67

MS THOMSON: I think, generally, your Honour, the apprehension that I have is that process is a - not an introduction but a concept in that context, which might not have broad understanding if you're picking the award up, just as a lay person. Practitioners will understand that that means a process either under the auspices of the Commission's powers or, as otherwise you've suggested, some other formal process. I appreciate the principles and those kinds of things not using unnecessary language or unnecessary words to say what you could say in one. If the Commission is minded not to - - -

PN68

JUSTICE ROSS: It was really just trying to identify that by seeking to provide the clarity you might actually be confining the term. An alternative, and I'm not advocating any particular change, but an alternative that would address at least that point would be, "Fair Work Commission or other process". But if really then gets to the point you've just raised about are the additional words worth the extent of the clarity.

PN69

VICE PRESIDENT HATCHER: But there's no doubt, is there, that currently D7 allows representation at any step, carried out pursuant to the clause at any stage?

PN70

MS THOMSON: Yes, and I think read in the context of the current clause, the process and the situation to which the representation is available is clearer. Again, it's not something we're going to die in a ditch over, your Honour, so if you've taken a view, and I share your concerns and appreciate your concerns on that point, it's something we can move on from.

PN71

JUSTICE ROSS: Let's hear from the others, if anyone else has a view about that. Anyone in Sydney?

PN72

MR FERGUSON: We're largely indifferent, apart from the concern that you've just raised.

PN73

JUSTICE ROSS: Okay.

PN74

MR NGUYEN: I agree with the position that a party should be entitled to represented at any stage of a process.

PN75

JUSTICE ROSS: All right. In Melbourne?

PN76

MR CLARKE: I think, just inserting the word "process" I think covers for the eventualities. It covers the concern of ensuring it applies to the Fair Work Commission process but also continues the current position about representation for any purpose under the clause. You could have some kind of rostering dispute which involved some kind of mediation, any process other than a straight discussion might come before a matter going before the Fair Work Commission and it should be clear that the clause applies to all such processes that might occur.

PN77

JUSTICE ROSS: All right. Anyone in Melbourne with a different view?

PN78

MS WILES: No, your Honour.

PN79

JUSTICE ROSS: The NFF? I'm sorry, the Pharmacy Guild?

PN80

MR HARRIS: Nothing, your Honour. We acknowledge your concerns about making it too close or too streamlined.

PN81

JUSTICE ROSS: All right. Then let's get to the more vexed issue of the change in terminology. There are a couple of issues about this. The first is, I'd ask, perhaps, the employers to reflect on the fact that the current standard term does refer to "parties" and we'll come back to that. But if I can to go to some of the particular concerns or issues raised by the ACTU and the unions. Firstly to you, Mr Clarke, you've called, in aide of your position, section 739 and I just wasn't sure how that helped you.

PN82

MR CLARKE: Well, it's just that section 739 refers to - understands a dispute being brought to the Commission by parties and I don't place - - -

PN83

JUSTICE ROSS: Just take me to the section and identify where you're relying on all that?

PN84

MR CLARKE: Okay, 739(4).

PN85

JUSTICE ROSS: Yes?

PN86

MR CLARKE: And 739(6) and 739(5) I should say. (4), (5) and (6).

PN87

JUSTICE ROSS: Okay, so it talks about - it's really (6), in a way:

PN88

May deal with a dispute only on application by a party to the dispute.

PN89

Then the parties can agree, in accordance with the relevant term, about the scope of the Commission's powers, including by arbitration. All right. The SDA raises a different point and you're talking about the insertion of "and/or". This is at paragraphs 23 and following. Why do you need "and"? "You can support or represent." It's not suggested that you can only do one or the other.

PN90

MS BIDDLESTONE: No, the current wording uses the term "and/or" and I think maybe that's to reflect that over the course of the process the role that the representative plays might change.

PN91

JUSTICE ROSS: Ms Biddlestone, does the current - the current standard clause says "and/or" or is it the current clause in the Pharmacy Award?

PN92

MS BIDDLESTONE: The current clause in the Pharmacy Award.

PN93

JUSTICE ROSS: Well, as I say, where it's an existing provision in a current term in an award then, consistent with the approach we've taken, we wouldn't propose to change that in the Pharmacy Award. But here we're looking at what do we put in the standard term, and I don't think - well, correct me if I'm wrong, but does "and/or" appear in the standard term in other awards?

PN94

MR NGUYEN: Yes, it does, your Honour.

PN95

JUSTICE ROSS: I see, okay. So it's really then been changed as a result of plain language and not giving rise to any difference. What does everyone else say about "and/or"? Sorry, Ms Biddlestone, I understood your concern to be related only to the Pharmacy Award, but it seems broader.

PN96

MS BIDDLESTONE: No, your Honour. All of the SDA awards have the same provision, "and/or".

PN97

MR CLARKE: In the miscellaneous - I just brought the Miscellaneous Award because I presumed - - -

PN98

JUSTICE ROSS: Yes, that's a good idea.

PN99

MR CLARKE: - - - it was going to have the bog standard clauses, and it says:

PN100

Organisation or association to accompany and/or represent them for the purposes of this clause.

PN101

JUSTICE ROSS: Yes, but "accompany" is sort of a weird - what does that mean? That's why "support" is probably a better - and support person is also the language used elsewhere, in termination - - -

PN102

MR CLARKE: "And/or" is definitely there.

PN103

JUSTICE ROSS: Yes, all right. Anyone feel particularly strongly about this issue, the other way?

PN104

MR FERGUSON: No.

PN105

JUSTICE ROSS: No?

PN106

MS THOMSON: I think, your Honour, that might be one of the plain language things that the drafter really doesn't like.

PN107

JUSTICE ROSS: It is, yes. It's consistent with the plain language principles but I take it no one disputes the - or no one is contending that if it simply said support or represent that you could only do one or the other.

PN108

MS WILES: Your Honour, it's Ms Wiles here from the TCFUA. Look, unfortunately with some of our employers my view is that will read it that way because we have had disputes and these ridiculous arguments in the past about you can only support but you can't represent, which means you can't say anything in a meeting, you can only just be there. So I think - - -

PN109

JUSTICE ROSS: I see.

PN110

MS WILES: I understand what you're saying and yes, in a perfect world I think obviously I would agree but on the ground unfortunately if there's a point to be taken about what a representative can do it often is taken - - -

PN111

JUSTICE ROSS: Right.

PN112

MS BIDDLESTONE: Your Honour, sorry, it's Ms Biddlestone again. Just to support the point that was just made. We at the SDA actually have to print out and laminate some points for our organisers to use when they're going into represent our members, because they are constantly told that they can only support the member. So taking out and/or representation could have a significant impact.

PN113

JUSTICE ROSS: Right. Let's then go to the terminology issue, party/party and employer/employees. What do the employer organisations say about the fact that the current standard term does use the language of party, and consistent with what Mr Clarke said, 739 talks about a party to a dispute bringing the matter to the Commission.

PN114

MR FERGUSON: I think I take that point, your Honour, but the first point we'd raise is that 9.5, the current clause, does use the term employer and employee but I think more tellingly if you look at the substance of the clause in totality, and particularly at 9.1, it's really dealing with disputes between employer and employees or employer and an employee, and that's clear from 9.1 where it talks about the dispute firstly trying to resolve it through discussions between employees and the supervisor. There's no mention of any other potential party.

PN115

JUSTICE ROSS: Given that an organisation can represent an employee in a dispute, and that doesn't seem to be - are you suggesting that an organisation cannot initiate a dispute at the request of an employee?

PN116

MR FERGUSON: As their representative they can initiate the dispute but I think the difficulty is this clause is purporting to place obligations on parties to the dispute as well.

PN117

JUSTICE ROSS: Yes.

PN118

MR FERGUSON: I don't think it can impose an obligation on a union necessarily if they're not covered by the award as such. It might pose obligations the way parties deal with those unions, but certainly it's clear to me that the only parties involved would be unions. There's nothing in here to say who the parties are to the dispute as such. So it just struck us when we looked at the clause that really this is about disputes between employers and employees, and the role of others is covered by 9.5. Really, if we're trying to make it simple and easy to understand we should say that, otherwise where do the organisation stop? Can anyone be a party to the dispute if they have an interest in it?

PN119

JUSTICE ROSS: Any other views?

PN120

MR HARRIS: I just say that the obligation in the Act in section 146, dealing with dispute settlement terms, is a mandatory one which is for awards to include a term that provides a procedure for settling disputes about any matters arising under the award. You'll note that appearing immediately above that section is section 145A which is a mandatory requirement in relation to consultation about changes to rosters or hours of work, which mandates that such terms allow for representation. There are also the standard consultation provisions in the awards that allow for representation. Now if we went through this process to limit the role of the representatives we'd cease to have a term that provides for a procedure for the settling of disputes about any matters arising under the award.

PN121

JUSTICE ROSS: Yes. So your point is that the dispute resolution standard term has to sit conformably with the other provisions dealing with consultation generally and consultation around rosters, and how they might operate?

PN122

MR HARRIS: Yes, that - - -

PN123

JUSTICE ROSS: Let me put that proposition to you, Mr Ferguson. What if there's a dispute about whether or not the consultation provisions in respect of rosters have been properly complied with, are you suggesting that dispute can only be raised by an employee under the standard dispute resolution clause?

PN124

MR FERGUSON: That was our apprehension is that this clause is really only dealing with disputes between employees, employers and the role of unions was - - -

PN125

JUSTICE ROSS: Despite the fact that the employer has obligations in respect to representatives under the roster consultation provision.

PN126

MR FERGUSON: I understand that. Yes, the difficulty is - I come back to 9.1 where the clause purports to put obligations on parties to the dispute. Now I must - I may be wrong but the award obligations can only be imposed upon the employer/employee as I apprehend it. In that context I didn't envisage that they were purporting to put obligations on other parties.

PN127

JUSTICE ROSS: Which obligations are placed on - - -

PN128

MR FERGUSON: 9.1:

PN129

The parties will endeavour to resolve the dispute in a timely manner by discussions between the employer and the employees concerned at more senior levels.

PN130

So the presumably the parties that they're talking about are the employee, employees and the employer.

PN131

JUSTICE ROSS: But what follows from the breach? Has anyone ever been prosecuted for breach of that sort of provision? It just means that well if it doesn't work or it's not working it's usually referred to the Commission.

PN132

MR FERGUSON: I'm not sure that anyone ever has been prosecuted for breach of that and as we know we often come to the Commission without perhaps all of these steps being undertaken.

PN133

JUSTICE ROSS: Yes, quite.

PN134

MR FERGUSON: But in terms of trying to understand what is meant by parties, in the context of this clause, the wording suggests or the structure of that paragraph suggests that the parties that intended to be caught are the employer and the employees.

PN135

JUSTICE ROSS: So at the point that the dispute is notified to the Commission - - -

PN136

MR FERGUSON: Yes.

PN137

JUSTICE ROSS: - - - does a reference - a change from parties to employer/employees then have a consequence that the dispute, if it's an employee dispute, has to be notified and the name of the particular employee or employees?

PN138

MR FERGUSON: I'm just thinking through that and I apologise, I rather suspect it might have been a decision dealing with the extent to which - - -

PN139

JUSTICE ROSS: Well, it's come up in terms of enterprise agreements. I'm not sure it's come up in the award context but - - -

PN140

MR FERGUSON: I think that's right and your Honour might have been on that decision, I can't recall but I'm not certain that it flows that for the purposes of the Commission's processes the union would need to identify the particular employees that they were representing if it's not contested that they were representing.

PN141

JUSTICE ROSS: Well, if it's the employee - the clause only empowers the employee to do it. It seems to me there would be fairly strong argument that the employee doing it would have to be identified.

PN142

MR FERGUSON: That's probably right if anyone took issue with the fact that the union is representing employees. I'm just not certain that in order to make good these processes that would have - that step would have to be undertaken if no one disputes that the union or the industrial association represents a party as in an employee.

PN143

JUSTICE ROSS: Then you get to the next step where there's an agreement on a process. Again, does that have to be an agreement with every single employee involved in the dispute, or can it be done collectively through a union? These are the sort of hurdles you get to when you start moving away from collective to individual terminology.

PN144

MR FERGUSON: Yes, I understand but I suppose - - -

PN145

JUSTICE ROSS: It's not difficult to envisage a dispute that applies across a workplace. It might be a change of mealtime or whatever and it applies to a group of employees collectively. If you're driven back to - away from the language of parties then, what, everyone has to agree on the process? What if some don't agree?

PN146

MR FERGUSON: I understand the sort of practical issues that you're raising. We didn't raise this with a view to secure a particular outcome, it's just when we looked at the terminology and the wording of the clauses it seemed to us that the way this actually works is about employees and employers and the role of others is as representatives, whether or not that's uncomfortable or not is another issue. But it struck us that that was the way this clause was intended to work.

PN147

JUSTICE ROSS: Except that currently the clause uses a combination of language, parties and employees and employers.

PN148

MR FERGUSON: I appreciate that, the difficulty being the only meaning you can give to "parties" from the context, appears to be, at least in the context of the clause itself, appears to be "employees" and the "employer". Though maybe different meaning can be given, from the context of the Act in which it operates, and you can say that that includes associations and so forth. But it just struck me is, where does it stop? These are - some of these issues that have been raised now by the Bench hadn't come up in the conferencing process and I think perhaps we had been, just proceeding on this superficial assessment, that it meant "employees" and "employer".

PN149

JUSTICE ROSS: All right. I think we understand how the various issues are dealt with and we'll give some consideration to how we determine that issue. Does anyone else wish to say anything further about the terminology point? No?

PN150

If we go to termination of employment, the issue here is around the proposed change in E.1(c):

PN151

The employer may deduct from any money due to the employee on termination under this award or the NES an amount not exceeding -

PN152

And what's been proposed is that that language go and be inserted instead:

PN153

The amount that the employee would have been paid.

PN154

I think, with the exception of ABI and the SDA, which don't seem to have any difficulty with the change, everyone else opposes it, in part, on the basis that it may only give a binary choice. That is, you can deduct all of it or deduct none of it and not deduct part of it. That seems to be the main point. At the risk of tossing a hand grenade into the debate, how is it a permitted matter for an award provision to permit a deduction from an NES entitlement?

PN155

MS BIDDLESTONE: Your Honour, it's Ms Biddlestone from the SDA, I just wanted to clarify that our submission was actually saying that we were agreeing with the wording that reflected the last conference, not the one proposed.

PN156

JUSTICE ROSS: All right, thank you for that. What do we say about the permitted matter point?

PN157

MR FERGUSON: I'm just thinking this through and I don't know whether this is the reason in a different - - -

PN158

VICE PRESIDENT HATCHER: It came up, incidentally, in the recent proceedings, concerning abandonment of employment as a result of a proposal raised by AiG, but it begs the question as to how, for example, if any annual leave entitlement is involved how an award could authorise that not being paid.

PN159

MR FERGUSON: I say that because I know, internally, we've had a brief discussion about that point but we haven't, as yet, developed, as an organisation, a view about that and I am just reluctant to now launch into that when I know that work is being done on that point. But you're right, it arises and the answer is not immediately clear to me.

PN160

JUSTICE ROSS: All right. Look, perhaps - I don't want to foreclose anyone saying anything about it now, but perhaps we might provide a short, additional opportunity for you to make a submission about that point because, on the face of it, you can include in an award term a term that permits deductions, but you've got a difficulty, I think, in relation to 155, 156 et cetera. Just bear with me a moment. You see, particularly subsection (4)(b):

PN161

A modern award, relevantly, may also include terms that are ancillary or incidental to the operation of an entitlement under the NES or that supplement the NES, but only to the extent that the effect of those terms is not detrimental to an employee in any respect.

PN162

Well, on any view of it, a right to pay less annual leave than the employee would be entitled to, under the NES, would seem to be detrimental to the employee. The question then is, how is the term currently in E.1(c) a permitted term? The difficulty becomes also, can I get you to think about this, lest you come back and say, "We'll just have "under this award" and not "under the NES"" well that might actually create more confusion than clarity. How an employer then distils the two, because the NES operates in respect of accrued leave and notice, so it might not be - it may be conceivable in a particular award where there's a benefit above the NES that you could deduct from the additional benefit, but I don't think it's going to be as simple as just removing NES from the - - -

PN163

MR FERGUSON: You could deduct from - sorry, I'm just thinking this through, you could deduct from any outstanding award derived entitlements.

PN164

JUSTICE ROSS: Provided you're not deducting from - you're not derogating from an NES derived entitlement.

PN165

MR FERGUSON: That's right. So if they was outstanding - - -

PN166

JUSTICE ROSS: Let's pause for a moment, Mr Ferguson and try and think how such a clause might look and whether it's going to assist any employer in trying to understand it. It may be that rather than a general formulation you need to look at each award and say, "What could you possibly deduct from here?" If, in fact, there's nothing because t here's an alignment between the award minimum and the NES entitlements, then including such a provision just adds more confusion than clarity.

PN167

MR FERGUSON: I'm not rushing to suggest it.

PN168

JUSTICE ROSS: No, no, I think not rushing is a good idea.

PN169

MR FERGUSON: The practical benefit of these provisions is, of course, to encourage people to give the requisite - - -

PN170

JUSTICE ROSS: I appreciate that and I'm not - perhaps a note saying, "Employees are", and what their obligations are, but, on the face of it, it's difficult to see how you can derogate from the NES.

PN171

VICE PRESIDENT HATCHER: The other aspect is that the source of power is section 118, which says that:

PN172

A modern award may include terms specified in the period of notice an employee must give, in order to terminate his or her employment.

PN173

So there's no express power to have this further, as it were, penal provision, it depends upon the notion that it's somehow incidental or ancillary to that primary power.

PN174

MR FERGUSON: I was alive to that point and I know we've given thought to that - - -

PN175

JUSTICE ROSS: Well, you could prosecute them for breach, I suppose.

PN176

VICE PRESIDENT HATCHER: If an employer failed to give notice, the employee's remedy is to go to a court. So I have difficulty comprehending how it could be that if an employee breaches the notice that an employer can have a self-enforcing system whereby they can, in effect, not pay somebody for work they've already done.

PN177

MR FERGUSON: We'll come back to the origins of that and the merit of it, and we'd certainly have something to say to that. But the point I - - -

PN178

JUSTICE ROSS: Bear in mind, the origins and merit, whilst that's of some historical interest, fundamentally we've got to act within power and conformably with the other provisions of the Act, which brings up the point the Vice President has just raised. So I think it is something we're conscious we have raised with you now and we think it does require a bit more thought.

PN179

What we have got in mind is we'll also publish a statement identifying that this issue has been raised and providing the directions with it. Perhaps today fortnight for the filing of any submissions about that issue and then we will provide a period for submissions in reply. We would work on the assumption that we would deal with the matters on the papers unless a party requests an oral hearing. All right.

PN180

MR FERGUSON: Yes.

PN181

JUSTICE ROSS: There will be liberty to apply in the event that some catastrophe befalls some of you.

PN182

MR FERGUSON: I would seek one point of clarification and tell me if it's not appropriate.

PN183

JUSTICE ROSS: Yes.

PN184

MR FERGUSON: Is there a perception or a concern, provisionally at least, that there might be a difficulty from a power perspective of including a clause that permitted deductions from wages payable under the Award? Put aside the practically utility of that.

PN185

JUSTICE ROSS: I don't want to confine what the parties want to say about it. There is a clear issue, it seems to me � speaking for myself at least � in relation to accrued annual leave. When you go beyond that or an NES accrued entitlement, then that raises a question of utility and clarity and practical application in each award. The broader question you raise or that you put about accrued wages may not be one of power, but it might be one of merit. You should address both.

PN186

I don't want to confine you. It's just if we are to have a deduction clause, to what extent can it be permitted and what should be its scope?

PN187

MR FERGUSON: I would say I suppose we would approach this process on the basis that we weren't necessarily on merit grounds looking at - - -

PN188

JUSTICE ROSS: Well, you're going to be on merit now. It's not strictly merit on one view because it's dealing with a section of the Act that the Vice President has referred to, but you're on notice that we're looking at the provision so let's see where we land on it. Any questions about any of that? No? All right. In clause F there seem to be no outstanding issues. That's the redundancy clause.

PN189

Clause G, "Transfer to lower pay job on redundancy", there are three issues. There are the changes to clause G.1. This is from duties to job, et cetera. I will come back to that. There is a proposed amendment to clause G.2 to reference section 117 of the Act. That proposition is generally not opposed, as I understand it. There is the ordinary rate of pay issue primarily raised by Ai Group, but responded to by the AMWU and others.

PN190

VICE PRESIDENT HATCHER: Mr Ferguson, in relation to G.3, it has been submitted that these clauses can be directly traced back to the TCR cases and they indicate that the intention was that you either receive notice of the transfer to lower paid duties or receive, in effect, income that you would have received had you been given notice. What do you say about that?

PN191

MR FERGUSON: I think when go back to those cases - certainly if you go back to the first TCR case, the 1984 decision, the first decision � it seems less clear that it was necessarily contemplated that it would be sort of all amounts of income that you would have received in relation to ordinary hours of work. Now, we have obviously - - -

PN192

VICE PRESIDENT HATCHER: It uses the phrase "income maintenance".

PN193

MR FERGUSON: It does. It talks about �

PN194

employee maintenance of income payments calculated so as to ring the employee's wages up to the rate applicable to his/her former classification.

PN195

Then I think, if memory serves, you go to the original claim � or the claim advanced in final terms from the ACTU, they again put it in that in terms of the classification. Now, it's not abundantly clear what that might mean. On one view you would say it really is intended to bring it to what I might call the award classification rate, the minimum rate of pay attaching to that, rather than the rate that might attach to the particular work that is actually undertaken or that might apply based on the time at which that work is undertaken. I don't think it's clear, as the unions put, that it's somehow intended to capture everything that's payable.

PN196

When you look at some of the wording in those decisions, yes, they have regard, for example, to the Metals Award, I think as it was down there. If you go back to those provisions, they're actually quite complicated and they have all sorts of definitions. Now, in saying that, I'm not sure that this necessarily � in that decision I think there may have been � it might have been the first or second decision in 1984, the contemplation that it might need to differ in different awards. I'm not sure it ever has, but it then raises problems, well, how does it actually apply in the context of different awards and that's where I must confess our interest was first sparked.

PN197

I mean, this came out of the change that I think the bench potentially proposed to make in the context of the exposure draft process, but the question came up is this somewhat uncertain or ambiguous as to how it applies. If, as the unions say, you just pay every single amount that would be payable during � or by reference to ordinary hours if you were to take that approach, well, what happens in awards where there is the capacity for the employer to change shifts and so forth during the following period of time? How would you actually apply it?

PN198

How would you apply it in the context of, you know, more obscure awards like the Road Transport (Long Distance) Award, where people are paid by reference to CPK rates? I think where you would deviate from an assumption that it's the minimum award rate, you start to run into real issues of ambiguity or uncertainty as to how it applies.

PN199

VICE PRESIDENT HATCHER: Why doesn't it simply be read as the ordinary amounts payable at the time the notice is given or the payment in lieu of notice as provided? Why does that place complexity?

PN200

MR FERGUSON: Sorry, I'm not sure I'm apprehending what you - - -

PN201

JUSTICE ROSS: Well, I mean, you have said, for example, there is power to move people from one shift to another, but if they're working a night shift at the time, either you're considering whether to provide actual notice of the transfer to the lower paid position or you're going to make a payment in lieu and transfer them immediately. Why wouldn't you just measure it at that time?

PN202

MR FERGUSON: The difficulty that applies then is, well, that assumes there is a set and understood weekly rate at that time, whereas there may not be in some context. I am using the example of the Long Distance Award, perhaps unhelpfully, because it's not a time based payment, but there might be other instances where there is a weekly wage that is set and the clause contemplates a weekly payment, but that there are separate amounts that might be payable based on the particular type of work, even in a given week when the transfer is made. It doesn't seem to provide a clear mechanism for making that assessment.

PN203

As I said, we obviously had pointed to elements of that first TCR decision which suggests the approach we have adopted, but I think in more candour when read through it, it's not abundantly clear that there was a great deal of clarity around how this would apply in the context of every award. Now, I'm not suggesting this is necessarily out there causing a lot of problems. I'm not sure necessarily what the practice is in every award. It's not a provision that I'm sure arises all that often, but if you're trying to look at it, it does seem uncertain and ambiguous.

PN204

We didn't take the view of saying, well, let's just push for the minimum award rate. We accepted that in the context of exposure drafts, the better way forward might be to adopt the ordinary hourly rate and pick up the all‑purpose allowances, as well, even though I suppose on one view we were looking at the classification rate and thinking, well, that's the minimum rate.

PN205

VICE PRESIDENT HATCHER: I was going to raise this for all the parties. It then begs the question if it does include things like penalty rates on ordinary time and shift allowances, whether the phrase "ordinary hourly rate of pay" actually covers those or whether it merely covers all purpose allowances. Mr Clarke, do you want to comment on that?

PN206

MR CLARKE: Look, I mean, there are a delineation in awards between additional payments that are made during ordinary hours and additional payments that are made for work outside of ordinary hours. Certainly one would expect that an income maintenance provision would at the very least capture all the payments that were made for working ordinary hours.

PN207

VICE PRESIDENT HATCHER: My question was really directed at the form of words you would use to do that. That is, does the phrase "ordinary rate of pay" or "ordinarily hourly rate of pay", particularly having regard to our, I think, July 2015 decision, actually capture things like ordinary, time weekend penalties and shift allowances, as distinct from all-purpose allowances.

PN208

MR FERGUSON: I think, and I'm sorry, I haven't brought this material before me, but we've used the term "ordinary hourly rate pay" as it was defined in the exposure draft process, which wouldn't include all those different amounts. It would include the classification rate, if I can call it that, and the all-purpose allowance.

PN209

VICE PRESIDENT HATCHER: But that's why I'm raising the issue, that is, to the extent that the ACTU and other unions advance the position, and I know the AMWU have put something different, does the words used in the proposed clause actually capture the type of payments you're talking about and is there some other form of words if that was a view taken that should be used?

PN210

JUSTICE ROSS: Or it may be it's an area where there's a general approach and then tailoring on an award by award basis because if, for example, the view's taken that shift premiums are in, well shift premiums are not paid under every award so that would be unnecessary in those awards where they don't provide for it. So you may specifically set out, rather than a formulation, you might specifically identify which particular payments are in.

PN211

MR FERGUSON: I think if the Bench were not to adopt our approach saying that it's the ordinary hour rate of pay as defined in the exposure drafts to mean the minimum rate plus the all-purpose allowances then you might get to a stage were you need to tailor it for every - and the other thing, without cutting the point, the terminology used here is "the ordinary rate of pay". I'm not sure if that's intended to be confined to award payments or if they're intending to entitle people to over award payments, which I assume is not the approach this Bench would be minded to take. Now, we haven't gone down the approach of just trying to score a point here, the general view had been that, properly interpreted, this meant the award rate.

PN212

JUSTICE ROSS: I suppose that's the proposition, isn't it? That we start from the construction of what the intent of the TCR provision was and that's consistent with, unless the parties are put on notice the intent is not to change substantive legal rights or the current legal effect of a clause, it's to express it in plain language, so that would be our starting point and we'd work forward from there and then see where we end up.

PN213

MR FERGUSON: I must say, I hadn't identified any clear intent to depart from that TCR.

PN214

JUSTICE ROSS: No, no, we'll put you on notice, as we have with the deduction point. That's something that now we want to look at.

PN215

MR FERGUSON: Sorry, I'm just saying, in terms of the interpretation point, we'd gone back to the TCR decisions but we just hadn't identified anything since then, in the 2004 decision or anything else that changes it.

PN216

JUSTICE ROSS: No, sure. All right. Anyone else wish to say anything further on this point, the ordinary rate of pay issue, other than what you've already put?

PN217

MR NGUYEN: Your Honour, if I can just make a point about the current words? If it's retained as "ordinary rate of pay" there would need to be an explanation of what that actually means, because it is a change from "ordinary time rate of pay" and it seems to be very close to what the Commission's used in the exposure drafts and what the AiG is proposing, which is "ordinary hourly rate of pay." So if it's going to change to a new terminology that would need to be defined.

PN218

JUSTICE ROSS: I agree with that. All right.

PN219

MR FERGUSON: The only one point, just in response, the AMWU, I think, I won't take you to it in detail, makes some note of the "full rate of pay", as it's now contained in the Act.

PN220

JUSTICE ROSS: In the NES, yes.

PN221

MR FERGUSON: Obviously that has come in as a new concept in the NES and we say that shouldn't provide any assistance to their interpretation of what it currently means, and then if we move to the second state, we wouldn't accept that there are merit bases for changing it to a flexible NES, which is now more generous than past iterations of the Act.

PN222

JUSTICE ROSS: Can I go then to the controversy around the transfer to a lower paid job, this is clause G1. Look, here are various points agitated about this and I wanted to test with you whether the parties saw in any benefit in a further conference on that issue or whether you're content to have the matter determined, on the basis of what you've put forward?

PN223

MR FERGUSON: I'll jump in. There may be some merit in a conference. I say that because I think we weren't actually trying to get anything out of this situation either, we were looking at the fact that redundancy perhaps is not the clearest term to everyone and we saw merit in perhaps aligning it with the definition in the Act, accepting that it's not necessarily a definition as such, at section 119. But when you look back through the cases it's probably a very hard concept to be clear about.

PN224

JUSTICE ROSS: There's also the point, I think, raised by either the TCFUA or the SDA, that the common law concept of redundancy might be broader than the statutory one. That's another issue for discussion, I suppose.

PN225

MR FERGUSON: Yes, and even the definition of "redundancy" which might, say, the awards adopt, in the context of the TCR decisions and so forth. We looked at the wording that was proposed and thought, well, perhaps that wording is fine. But we've seen the submissions of others saying, perhaps it's necessary to expressly reference "redundancy" and we think there might be some merit to that because there are examples where people transfer to lower paid duties where it's not a redundancy and we don't want that indirectly caught by this. So we think there probably is some merit to giving further thought to it. I think we undertook to prepare some words and then that slipped through the cracks.

PN226

JUSTICE ROSS: Okay. API?

PN227

MS THOMSON: Yes, I think there's further scope, particularly with the complexity of the issues.

PN228

JUSTICE ROSS: All right. In Melbourne?

PN229

MR CLARKE: We wouldn't want our participation in a conference to be seen as a concession.

PN230

JUSTICE ROSS: I never see participation in a conference as a concession, Mr Clarke, it's really whether you think there's at least some capacity for discussion that might advance the issue, and that's without prejudice to the position of any party. If you think there's absolutely no purpose, then just tell us that and we won't persist with it.

PN231

MR CLARKE: I don't understand our affiliates, MEU, desire to use the award to define the concept of redundancy. So if that is what the objective of the conference would be then I would consider it to be fruitful.

PN232

JUSTICE ROSS: All right. Anybody else? In view of the indication, we'll determine the matter on the basis of the material we've got before us. The final areas is in clause (h), an employee leaving during a redundancy notice period. This may also raise this issue of permitted deductions, but Ai Group raises various issues and you say, at paragraph 34, there would be a substantial increase in costs. Can you, Mr Ferguson, just tell me how that arises? How you see the proposal operating and how you say it should operate? So let's assume we've got an employee who's been given notice of termination due to redundancy and they then, of their own volition, decide to end the employment during that notice period. So let's keep the example simple, they're given four weeks' notice of redundancy, two weeks into it they decide to end their employment, what do you say should happen then and what do you say the proposed clause would mean?

PN233

MR FERGUSON: So we say that where they terminate early, if you will, and they don't provide the requisite period of notice, that all the existing clause does is protect the employees entitlement under that redundancy clause. So that would be, and I'll come back to that issue there.

PN234

JUSTICE ROSS: So they'd get their redundancy pay?

PN235

MR FERGUSON: They'd get their redundancy pay, assuming you'd accept that that's under the clause rather than the NES and it's a due point. So the intention is to protect the redundancy pay. That is clear, I think, if you go back to the TCR decision and I'm talking about the 1984 decision. The first decision, I apologise, I've printed it in a format but it's not in the right format but in relation to this issue - - -

PN236

JUSTICE ROSS: Do you have a reference in there?

PN237

MR FERGUSON: Mine is page 40 but - - -

PN238

JUSTICE ROSS: You don't have the IR reference?

PN239

MR FERGUSON: Sorry.

PN240

JUSTICE ROSS: I've got the IR version.

PN241

MR FERGUSON: Print F6230.

PN242

JUSTICE ROSS: You don't have the IR?

PN243

MR FERGUSON: No, I apologise. In the second decision they refer to this issue being dealt with at page 51 of their first decision, so I assume that's correct. There's not much put but they say:

PN244

The ACTU also made claims which relate to an employee under notice of termination who wishes to leave, for example where an employee's found a suitable job and is required to take up that job early. It was claimed that such an employee should be granted the benefits of any redundancy provision because to restrict him or her would discourage workers from finding and taking up other employment opportunities, and that the early departure of employees in a redundancy situation will often make little difference to employers. It would also claimed that this would be consistent with the tenure of a number of awards and agreements. Having regard to the reason for our grant of severance pay, subject to the right of an employer to seek a variation if appropriate circumstances exist, we are prepared to grant this part of the ACTU claim.

PN245

It clearly was only ever contemplated as being about protecting the redundancy benefits. Now in terms of the effect, what it means is that the other clause, and it is coloured by the issue the Bench has raised already, that the other clause should still do its work and permit an employer to make deductions from other amounts - - -

PN246

JUSTICE ROSS: I suppose that rises or falls on whether or not that's permitted.

PN247

MR FERGUSON: That's right, in terms of the NES element but then there might also be deductions from award derived entitlements, which we - - -

PN248

JUSTICE ROSS: What would they be?

PN249

MR FERGUSON: Well, there might be outstanding wages not paid when the person leaves. That's the most obvious example. I'm not sure that there's other payment.

PN250

JUSTICE ROSS: You also raise that you say there will be a substantial increase in costs and you seem to be referring there to the fact that let's take my example four weeks' notice is given by the employer of termination due to redundancy. Two weeks into the notice the employee leaves. You seem to be suggesting that the employee would be entitlement to be paid annual that accrues on the four weeks that they're no longer going to be at work. How would that arise, if they've finished their employment, how would there be an entitlement to any accrued annual leave.

PN251

MR FERGUSON: Look, I have been no recalling our submissions correctly because I'm not sure we did apprehend it that you would be accruing entitlements, and I'll revisit.

PN252

JUSTICE ROSS: Well, let me - it's paragraph 34. It's just you use the example:

PN253

Not for example, annual leave that would have accrued if the full notice -

PN254

I wasn't sure if you were suggesting that somehow they would. It's just the way it was framed. I'm not sure - - -

PN255

MR FERGUSON: Yes. No, no.

PN256

COMMISSIONER HUNT: It comes down to what benefits and payments mean, doesn't it?

PN257

MR FERGUSON: Yes, our concern as I had understood it, but I may have misread this was that we were concerned about the loss of the ability to make a deduction.

PN258

JUSTICE ROSS: Deduction?

PN259

MR FERGUSON: If you will, yes. Not - - -

PN260

JUSTICE ROSS: Whether there me an accrual?

PN261

MR FERGUSON: Yes.

PN262

JUSTICE ROSS: Right.

PN263

MR FERGUSON: I think the ACTU had put that that might be how it works. I'm not sure we had engaged with it.

PN264

JUSTICE ROSS: We'll go to Mr Clarke now and - yes. But look, I think this provision's also affected by our earlier discussion about permitted deductions so we'll hear from you about that in due course. Mr Clarke, what do you say - how do you say this provision should operate? So if someone is given notice of termination due to redundancy and the employee elects to leave their employment during the period. What - firstly, do they get the full payment of the notice period? What effect, if any, is there on accrual and what, if any, deductions should the employer be able to make?

PN265

MR CLARKE: Our understanding was that the - that it was the notice and severance pay and redundancy pay calculations weren't prejudiced by the fact that the person chose to leave early, potentially.

PN266

JUSTICE ROSS: So you see the notice and the redundancy pay being part of the compensation for redundancy, and therefore whether they leave early or not they're paid both?

PN267

MR CLARKE: Yes, and then there's a provision in there to deal with the notice period. So the notice - sorry, the notice period is dealt with in the clause itself.

PN268

JUSTICE ROSS: I'm sorry, what was that?

PN269

MR CLARKE: So the remaining period of the notice goes but the redundancy pay stays calculated as at the original end date.

PN270

JUSTICE ROSS: Right, so in my example where they're given four weeks' notice by their employer and they leave after two weeks' notice, then they're not - well, let me give you a simpler example. They're given five weeks' notice by their employer, they leave of their own volition after two weeks. They're entitled to be paid the two weeks' notice but not the balance, the three, because their employment's come to an end by their own action. Is that the proposition?

PN271

MR CLARKE: Yes, however their redundancy remains calculated on the basis of their original termination date.

PN272

JUSTICE ROSS: I see. Is there any dispute about that?

PN273

MR FERGUSON: No, because I think that now raises - - -

PN274

JUSTICE ROSS: Oh.

PN275

MR FERGUSON: Well, let me say this, I think in terms of the date, when you look at the new clause as it's drafted I think there's a concern now as I look at it that the way it's cast it could be purporting to require the calculation of NES entitlements and other award entitlements right up until the date when the notice would have concluded. Whereas I think all that was intended was that the severance pay entitlements not be - - -

PN276

JUSTICE ROSS: All right, well let's just test that. Is that your understanding, Mr Clarke, that you calculate your redundancy entitlement based on the point at which the notice given by the employer expires, but in the example we've used all of your other entitlements are calculated on the basis of when the employee terminates the employment and leaves.

PN277

MR FERGUSON: We've assumed that to be the general position, subject to any sort of award based change.

PN278

JUSTICE ROSS: Yes. No, no, excepting if there's an award difference then we'll deal with that.

PN279

MR FERGUSON: Yes.

PN280

VICE PRESIDENT HATCHER: So take a step back, in this scenario on whose initiative has the employment terminated anybody?

PN281

MR FERGUSON: I think it's still initiated at the employee's - terminated at the employee's initiative once they leave early - once they make that decision.

PN282

VICE PRESIDENT HATCHER: I mean if that's right then it's more than the calculation because the NES entitlement only operates on an employer initiated termination. So if the analysis is that the employee has terminated the employment then you would need the award to create the entitlement in the first place, not just when it's calculated. Mr Clarke, do you say it's still an employer initiated termination or is it terminated by the employee?

PN283

MR CLARKE: The termination of the employment, the decision is initiated by the employer, however the employee has effectively not holding the employer to the requirement to provide that maximum notice period anymore.

PN284

VICE PRESIDENT HATCHER: Yes.

PN285

MR CLARKE: But it's hard to kind of put this kind of contractual overlay to what really is an award operation. I hadn't turned my mind to whether the question of the operation of the award terms would, you know, an employee who left early in those circumstances was therefore forever deprived of running an unfair dismissal claim in relation to the circumstances of their termination. I had not turned my mind - - -

PN286

JUSTICE ROSS: That's another issue. I was more concerned about the interaction with the NES.

PN287

MR CLARKE: Yes.

PN288

COMMISSIONER HUNT: Mr Clarke, during the conference you used the example of somebody who was leaving just shy of nine years.

PN289

MR CLARKE: Yes.

PN290

COMMISSIONER HUNT: So if the employee said well I've got another job and I'm now leaving, please forgive my three weeks' notice, then you say because they would have clicked over to nine years they would be entitled to the nine years of severance pay.

PN291

MR CLARKE: Nine years of redundancy pay, yes. That's my understanding of the operation of the provisions, as they are, Commissioner, yes.

PN292

JUSTICE ROSS: And I don't think that's contested by the employer organisations. The issue becomes what else flows from that early departure.

PN293

MR CLARKE: So to deal with the section 119 requirement that it's terminated at the initiative of the employer, is that the problem? Without anything in the award you therefore don't have anything to give rise to (indistinct) to participate, is that the issue we're grappling with now?

PN294

JUSTICE ROSS: Well, it's one of them.

PN295

VICE PRESIDENT HATCHER: That's the one I raised, yes.

PN296

MR CLARKE: Well, I'm sorry I didn't notice it but, yes, it's a big one.

PN297

MR FERGUSON: So when you look at the current award I don't think there's anything in that wording that suggests it alters the initiative of the termination. It contemplates, expressly, that the employee may terminate their employment during the notice and then it operates to save the entitlement. Now, we would have a concern if suddenly an award provision was now inserted to alter that situation for general purposes, that would squarely be a new provision and, clearly, whether an award can do that, we'd have to think about that. But I take the point that really this creates an entitlement where there wasn't one. That's what it does. It saves the redundancy pay entitlement. Now, there are probably additional complexities, and I take your Honour's point - - -

PN298

JUSTICE ROSS: Sorry, when you say it creates an additional entitlement, saves the redundancy - - -

PN299

MR FERGUSON: Sorry, it creates an entitlement to redundancy pay when - - -

PN300

JUSTICE ROSS: But wasn't NES - - -

PN301

MR FERGUSON: - - - technically there wouldn't be one under the NES or under the clauses that was previously cast.

PN302

VICE PRESIDENT HATCHER: I don't know about that. I mean the problem is - - -

PN303

JUSTICE ROSS: Yes, it seems to be consistent with what the TCR Bench has to say.

PN304

VICE PRESIDENT HATCHER: There was an integrated TCA clause which worked internally and now they've had bits pulled out and then how that operates with the separately drafted NES.

PN305

MR FERGUSON: That's what I'm getting at. Clearly it doesn't operate because it references only entitlements under clause, for a starting point, and there's nothing in the clause anymore, which has - that's come up in practice. How it would then operate with the other provisions of the NES that, for example, entitlement, to enable an employee to seek to reduce the entitlement in circumstances on application, is a further complexity. But I think all of that could be fixed with drafting that still keeps the inherent nature of this provision, which is that it grants an employee an entitlement where they leave early or it saves that entitlement, in practical terms, where they would otherwise have had it, because now they don't. That's what the TCR decision was intended to do, just give them redundancy pay where they might not otherwise have got it because they'd resigned.

PN306

JUSTICE ROSS: All right. Anything further anyone wishes to say about this?

PN307

MS WILES: Your Honour, it's Ms Wiles in Melbourne, for the TCFUA, the current clause actually says, well at least in the TCF Award, and I think in a number of other awards, it talks about the benefits and payments that would have been received under this clause and in some awards, under the redundancy clause, there's additional entitlements to that of redundancy pay. There's other entitlements around job search entitlements et cetera, so in our view the benefits and payments is broader than just redundancy pay.

PN308

MR FERGUSON: I just note that at paragraph 34 we've suggested words in an endeavour to fix this.

PN309

JUSTICE ROSS: Yes.

PN310

MR FERGUSON: We'd left "clause" for that very reason.

PN311

JUSTICE ROSS: Is there anything further anyone wishes to say about clause (h)? No?

PN312

MR FERGUSON: Only in relation to the secondary issue, which I don't know if that's agreed to by all parties, but we'd say where they're referencing "notice" in that clause, that should be a reference to "notice under the Act", rather than a longer period of notice. We make the argument that in the awards they now do contemplate or they make reference to the NES dealing with notice. In that context, this clause should only be regulating an entitlement that arises during the period of notice the employee would be entitled to, under the - - -

PN313

JUSTICE ROSS: I think the ACTU makes a point, they weren't able to identify awards that have a different period, but if there were we'd need to look at those, on a case by case.

PN314

MR FERGUSON: Yes, but I'm not sure the wording (indistinct) of the clause.

PN315

VICE PRESIDENT HATCHER: So in respect of notice, and I'm looking at your redraft, are we talking about the minimum notice or the actual notice?

PN316

MR FERGUSON: The minimum notice. The notice under the Act, under section 117. I'm not sure we redrafted - we haven't redrafted H.4. Sorry, if you looked at H.4(a), it would be:

PN317

During the period of notice to which they are entitled, under section 117.

PN318

VICE PRESIDENT HATCHER: Where's that?

PN319

MR FERGUSON: I'm looking at the statement, paragraph 124, it contains the clause. At H.4(a) it talks about time off without loss of pay of up to one day per week during the period of notice, but it doesn't say what that notice is. I'm sure the plain English draftsmen would have a view, but I wonder if:

PN320

Allows pay of up to one day per week during the period of notice to which the employee is entitled under section 117.

PN321

VICE PRESIDENT HATCHER: It traces back to H.1, doesn't it? It says - - -

PN322

MR FERGUSON: H.1 doesn't define it. But if you look at the award clauses they do all say that notice is provided for under the NES, so you might read it in that context, but it's not express. We wouldn't want a situation where an employer goes over and above, provides years of notices and the plant shuts down or something like that, that you have an entitlement going for years. I don't know anyone's anticipating that's what the award should provide for.

PN323

COMMISSIONER HUNT: I think, Mr Clarke, you did form a view, didn't you, at the conference, that it should extend beyond that period if there was an extensive period of notice by the employer?

PN324

JUSTICE ROSS: Were you referring to the circumstances where a particular award provided for a notice period above that provided for in the NES?

PN325

MR CLARKE: If the award dealt with the notice period - - -

PN326

JUSTICE ROSS: Can you just speak into the microphone, Mr Clarke, we're just - - -

PN327

MR CLARKE: I'm sorry.

PN328

JUSTICE ROSS: That's all right.

PN329

MR CLARKE: If the award did deal with what the notice periods were, then certainly - and an over-extended notice period, then we'd want to give full effect to the clause throughout that notice period that was stipulated.

PN330

COMMISSIONER HUNT: But if the employer gave six months' notice, you wouldn't press for a day's leave to seek other employment beyond the maximum five weeks, would you?

PN331

MR CLARKE: I haven't approached these standard clauses on the basis that they regulate awards above award entitlements, so I've not - I don't recall putting that position and I haven't - I mean others may have, but I've not considered that.

PN332

JUSTICE ROSS: Okay. So you're really looking at the circumstances where an award might provide a minimum period of notice, which is above that in the NES, then that's relevant. But if an employer decides to voluntarily provide a longer period of notice, well that's in a different category?

PN333

MR CLARKE: That was an assumption on my part, others may have some more informed views about that, but I've just approached this on the basis that it wasn't conceding to regulate any entitlements above the safety net, if you like.

PN334

JUSTICE ROSS: That's generally been the approach we've been taking too. Is there anything further in relation to clause H? No? All right.

PN335

MR CLARKE: There was that issue about, and I think it's inter-related to the issue in relation to which you're seeking some further submissions, and that was whether or not the employee's decision to leave early created any right of deduction.

PN336

JUSTICE ROSS: No, I agree. It does raise that issue as well, that's right, particularly in relation to NES entitlements.

PN337

MR CLARKE: Yes.

PN338

JUSTICE ROSS: All right. As I've indicated, we'll issue a short statement inviting submissions on that permitted and merit point and deal with the other matters on the basis of what you've put. Is there anything else finally anyone wishes to say further? No. Thank you very much for your attendance. We will adjourn.

ADJOURNED INDEFINITELY�� [11.01 AM]