TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009
JUSTICE ROSS, PRESIDENT
DEPUTY PRESIDENT GOOLEY
s.156 - 4 yearly review of modern awards
AM2015/2 – Family friendly work arrangements
10.06 AM, THURSDAY, 21 DECEMBER 2017
Continued from 14/12/2017
JUSTICE ROSS: Any changes in the appearances?
MR WARD: Commission pleases, and I think I've appeared for them previously but I announce an appearance for today's proceedings for the Pharmacy Guild of Australia and I appear for the Pharmacy Guild with Mr Arndt and Mr Harris, initial S. If the Commission please.
JUSTICE ROSS: Thank you. Can we deal with a couple of matters and then go to the running of today. We received correspondence from Ai Group about various inaccuracies in the transcript of Thursday 14 December. There is also the changes raised by the ACTU, so there are two bits of correspondence from Ai Group dated 14 and 15 December. Look, where are we up to with all of these corrections on the transcript. Does anyone have a simple answer?
MR WARD: Can I just say this, we've listened to the tape in relation to the one Ms Burke identified. We believe Ms Burke's understanding of what's on the tape was correct. As to the AiG's we haven't listened to the tape in relation to that and once again we would - - -
JUSTICE ROSS: Look, I think some of Ai Group's are fairly clear. For example, there's the examination-in-chief of Ms Toth. It says on the transcript it was done by you when it was in fact done by Mr Ferguson.
MR WARD: I don't want to cavil with that, your Honour.
JUSTICE ROSS: Yes, so there's that, I think that's the main one on that one. I just encourage the principal parties to discuss those and let us know what changes are to be made. A composite response would be helpful because it's just a bit hard to follow who's responded to what, that's all.
MS BURKE: Your Honour, I think - - -
JUSTICE ROSS: Yes.
MS BURKE: - - - and I'll be corrected if I'm wrong but I think I can tell you that all of the main corrections are agreed, there's no issue with any of that including spellings, identification. I'm pleased that Mr Ward has listened to the tape and agreed that it was pejorative not pleasant, and I understand there were no other corrections outstanding. So I think that we're agreed.
JUSTICE ROSS: Right.
MR FERGUSON: Yes, and I think the ACTU agrees with the other change we raised in relation to - - -
JUSTICE ROSS: Yes, so everyone's in agreement about all those changes?
MR WARD: Yes.
JUSTICE ROSS: We'll ensure that they're made to the transcript and a revised transcript's posted. Then in terms of the running, I think we've received correspondence from (indistinct) copied to the others that we'll deal with the further cross-examination of Ms Toth at 10, and then 10.30 the ACTU will commence its closing submissions, oral submissions. 12.30 Ai Group, 1.30 to 2.30 the lunch break, 2.30 ACCI, 4 pm NRA and NFF if required, 4.30 the ACTU reply.
MR WARD: Can I just say, your Honour, I don't require the amount of time that's been allocated to ACCI.
JUSTICE ROSS: We'll shift it up if - that's fine.
MR WARD: Yes.
JUSTICE ROSS: That's fine. No, I don't want you to feel the need to take an hour and a half, Mr Ward, let me assure of that but I think they're indicative. It's more a not before type proposition.
MS BURKE: They're all indicative, your Honour, and we're all - I think all very hopeful and both aspirationally and actually that they can be done in shorter time, and the cross-examination of Ms Toth I don't expect to take more than 10 minutes.
JUSTICE ROSS: Right. There are some other issues I want to talk to you about after we hear - we deal with Ms Toth's cross-examination. Before I forget though, if parties haven't already, and I think some have and some haven't, provided each of their submissions in a Word document and the witness statements that they've filed in a Word document, if they could attend to that as soon as they can. Shall we bring Ms Toth back?
MS BURKE: Just one administrative matter that I should raise.
JUSTICE ROSS: Yes, certainly.
MS BURKE: That's in relation to the statement of Mr Anderson. That statement does need to be withdraw by the ACTU. Mr Anderson is not a national system employee.
JUSTICE ROSS: Has that already been marked as an exhibit?
MS BURKE: It has and I'm afraid I don't have the exhibit list to hand but I'll find out what that is and let you know at the appropriate moment.
JUSTICE ROSS: Thank you. Ms Toth. It's exhibit ACTU15. We'll note for the record that exhibit ACTU15 will be withdrawn. We'll renumber exhibits ACTU16 and 17 which are respectively the statement of witness 1 and the statement of Ms Ashlee Czerkesow as exhibits 15 and 16.
MS BURKE: Then I think there was an ACTU18 which was the Ernst & Young Report that was tendered.
JUSTICE ROSS: You're right, that will be re-marked as ACTU17.
MS BURKE: Thank you, your Honour.
JUSTICE ROSS: Thank you.
MR FERGUSON: I call Ms Toth at this point.
THE ASSOCIATE: Please state your full name and address.
MS TOTH: Julie Christina Toth, 441 St Kilda Road, Melbourne.
<JULIE CHRISTINA TOTH, AFFIRMED [10.12 AM]
CROSS-EXAMINATION BY MS BURKE [10.12 AM]
JUSTICE ROSS: Yes, Ms Burke.
*** JULIE CHRISTINA TOTH XXN MS BURKE
MS BURKE: Ms Toth, that's your witness statement you've just got with you there in the witness box?‑‑‑Yes.
When you gave evidence last week, you said that were asked to present a statement based on your views and that you were given written instructions about what your statement should address. You said three times that there was a written request, didn't you?‑‑‑I don't know whether it was three times but we did - - -
I'm happy to show you?‑‑‑We did discuss it.
Yes, all right. You haven't been able to find that written request - - -
JUSTICE ROSS: Just bear with us for a moment, what's happened? What was that?
THE ASSOCIATE: It just disconnected.
JUSTICE ROSS: Can you just be a bit careful interstate when you're near the microphone because we're getting a bit of feedback. Thanks. Just a bit, what's that noise? What's the one on the bottom right?
THE ASSOCIATE: That's Hobart.
JUSTICE ROSS: Let's get rid of Hobart. That was easy. Thank you, Ms Burke.
MS BURKE: If everything was all that easy, your Honour.
JUSTICE ROSS: Yes.
MS BURKE: I'm sorry, Ms Toth, I asked you, you hadn't been able to find a written letter of instructions have you?‑‑‑No, I haven't.
Do you still - is it your understanding that there was one that you haven't been able to find or now that there wasn't one?‑‑‑No, I haven't been able to find a letter for this case and I'm now of the view that there actually wasn't one.
*** JULIE CHRISTINA TOTH XXN MS BURKE
Who asked you to prepare your statement then for this case?‑‑‑My legal colleagues, so I think the first person who spoke to me but I'm really actually not sure who first asked me but it would have either been Nicola Street or Richie Bhatt, who are both part of our legal team. Apologies for not being able to give you a clear answer on that.
That's all right. Were they - Ms Street and Ms Bhatt, were they the two people that you spoke to about your evidence for this matter or were there others?‑‑‑No, they were the two people that I spoke to.
You were asked to address specific questions for the - in your statement?‑‑‑Well, initially it was a discussion about whether I should do a statement at all and did I know enough about what was being discussed to do a statement.
Specifically, what was the discussion around whether you knew enough about - - -?‑‑‑It was about the data. Most of our discussions were about ABS data which I do have access to and the HILDA data set which I have fairly limited access to, but it is possible to arrange it.
In respect of what topics?‑‑‑Mainly women's participation and work histories, demographics and work experiences because my understanding of the case at the time was that it was mainly about women's participation but of course it is much broader than that.
Where did you derive that understanding of the case from? Were you told that by Ms Bhatt or Ms Street?‑‑‑Well, it was really initially their questions about, you know, what ABS data should they look at and access to HILDA data for a case that they told me was about to commence. So it wasn't so much my understanding of what might be relevant but them asking what was available that they thought might be relevant.
So they were discussing or consulting with you, if you like, about what material they may use in their preparation for the case?‑‑‑Initially, yes.
Then at some point it became – a decision was made that you would prepare a statement?‑‑‑Well, I – yes. Yes.
Whose decision was that?‑‑‑I'm really not sure to be honest, and the reason I say that is that I was initially dealing with Nichola and then later with Richie and most of this was verbal discussions. I didn't keep notes because I wasn't expecting to be doing this to be honest.
*** JULIE CHRISTINA TOTH XXN MS BURKE
So is it fair to describe the process between the three of you as the collaborative process about what evidence was necessary for the Ai Group's defence of the claim?‑‑‑Not really. I didn't see what else they were preparing. Their discussions were really about the data because that is the area that I know best.
At some point though a decision organically, if you like, emerged that you would prepare a statement?‑‑‑From my memory I offered to do it.
Right?‑‑‑I said that, you know, "I'm happy to explain the ABS data in my own words". The HILDA data, as I said, I do have fairly limited access as I'm not an academic.
The content of your report though goes beyond, or your statement goes beyond the HILDA and the ABS data on labour force participation, doesn't it?‑‑‑Well, it looks at some studies that use that data.
Yes?‑‑‑And that explains it in what I thought was better words than my own which is why I quoted fairly extensively from both of them.
There you're referring to the Reserve Bank quarterly bulletin?‑‑‑Yes, because it's recent and, you know, I thought it was a pretty good summary of the current data as available.
Who then made the decision, for your statement, to address matters like productivity and allocative efficiency?‑‑‑That was me. I put that in because they're the sorts of questions that have come up for me in the past in various Fair Work Commission hearings.
In what sorts of hearings?‑‑‑In the – there was a casuals case, and in the minimum wages discussions as well that often comes up.
You formed the view that these matters were relevant to this case?‑‑‑I did, yes.
Were you given a copy of the ACTU's clause at any stage?‑‑‑I looked it up on the Commission website.
*** JULIE CHRISTINA TOTH XXN MS BURKE
Right. Did you discuss the operation of it with anyone at work?‑‑‑Not the operation of it, but I did ask if – asked my colleagues if these words had particular legal meaning because I'm not a legal expert, so just checking that my lay reading of the clause was what was going on.
Were you asked to make any assumptions about how the clause would operate when you were preparing your statement?‑‑‑No, I wasn't.
So, for example, no one asked you to assume that the ACTU's clause would have an impact on productivity?‑‑‑Well, that's one of the questions that needs to be considered.
But that's a question that you determined needed to be considered?‑‑‑Yes, I think it's relevant, yes.
Yes. Were you asked to conduct any research?‑‑‑No.
Were you given any other material or did you look up any other material yourself filed by the ACTU in this proceeding?‑‑‑I looked up some of the statements that were already available. At the time there were a couple of statements available on the website that I looked at, yes.
You're referring there, because you've mentioned these in your statement, Dr Watson's report and Professor Austen's report?‑‑‑Yes, I think they were the two that I read at the time, and there were a couple that I read later that I didn't comment on them.
Which were the other two that you read later and didn't comment on?‑‑‑There was one by Professor Stanford.
Yes?‑‑‑And I think there was a second statement by Professor Watson.
Yes?‑‑‑But I certainly didn't read every piece of evidence. I was looking at really just the ones that are using the data because that's what I'm familiar with.
Did anyone direct you to do this, or you did this yourself?‑‑‑No, I wasn't directed.
You understood at the time that you were preparing this statement that the Ai Group opposes the ACTU's application?‑‑‑Yes.
*** JULIE CHRISTINA TOTH XXN MS BURKE
You understood that your statement would be used as evidence in support of that opposition?‑‑‑Yes.
Did you discuss the contents of your statement with anyone before it was finished?‑‑‑Yes, I did.
Who did you discuss it with?‑‑‑With Nicola Street and Richie Bart.
What was the content of those discussions?‑‑‑They were asking me mainly about the data; whether there was any more data that we could include, and whether there's more recent data. That's particularly relevant for the ABS because it does get updated and revised very regularly.
Sure. Did you discuss the contents of your statement with regard to productivity of flexible work?‑‑‑Yes, we did talk about that. They asked whether there was, you know, other economics principles that would be relevant, and, yes, there are, but I guess it just comes down to how much, you know, material you need to look at that you haven't already got. I didn't want to be duplicating material that you already had from other people.
So is it fair to say that you formed the view there was a gap in the evidence, and your statement addressed that gap?‑‑‑From what I'd seen of the witness statements that I'd read in detail which, to be honest, was only those two, I didn't have time to read all of the material, it looked like they were focusing very much on productivity at the individual worker level and the firm level, but not necessarily an aggregated industry or economy wide level.
There you're referring, just so I understand, you're referring to multi-factor productivity?‑‑‑That's one aspect of it, yes.
Were you asked to make any changes to your statement as you were working on it?‑‑‑Not really.
So you discussed it with Ms Bart and Ms Street?‑‑‑Mm.
And when it was finished you handed it to them and that was that?‑‑‑Yes.
It was filed?‑‑‑Yes. It was a fairly short process. I think it was only a few weeks altogether.
*** JULIE CHRISTINA TOTH XXN MS BURKE
Is it fair to describe the process as one involving a bit of back and forth and conversations between yourself and the lawyers of the Australian Industry Group?‑‑‑Yes, there were conversations about what data might be available to us to look at, either for them to look at, or for me to provide to them.
Ms Toth, you prepared this evidence for the purpose of assisting your employer to defeat this claim, didn't you?‑‑‑Not really, no.
What do you mean by not really?‑‑‑Well, that wasn't my intention when I wrote it. It was to provide some data and to fill what I saw as a small gap in the evidence that I'd read.
But the evidence in your statement is that, in your opinion, the ACTU's claim if made will have a negative effect on productivity and the allocation of labour and so forth?‑‑‑Yes, that is my opinion.
You formed that opinion because you knew that it would be used to assist the Ai Group in their defence of the claim?‑‑‑No, I think it's the other way around; they've asked me because that is my opinion. It's not me forming my opinion because that's the claim; it's they've asked me to provide a statement because that's my opinion.
Because they knew that was your opinion before you put it into the statement?‑‑‑Yes, we did discuss it.
Thank you. I don't have any more questions.
MR FERGUSON: Nothing arising.
JUSTICE ROSS: Thank you for your evidence, Ms Toth. You're excused?‑‑‑Thank you.
<THE WITNESS WITHDREW [10.25 AM]
JUSTICE ROSS: We're proposing to stand down for about 15 minutes. My associate is just handing you a document that I want to explain. A copy will be provided for those parties who are interstate. I should make it clear at the beginning that this is some draft propositions that I'd written out earlier this morning.
*** JULIE CHRISTINA TOTH XXN MS BURKE
In reviewing all of the submissions and the material it did seem that there were some broad propositions that weren't the subject of much contest, and they're set out on the first page, and ACCI had sort of provided, what I thought was, a useful framework within which to look at the matters that we have to decide. Then if you go over the page really the issue in contest is the framework within which discussions about flexible workplace arrangements take place; the ACTU characterising section 65 in a particular way; identifying what it sees as its deficiencies and the claim that's put is opposed by the employers on jurisdiction and merit grounds. That's probably neatly described by ACCI as inviting the Commission to cross a Rubicon as they put it, and to change the paradigm in which employers operate their business.
What I'd ask each of you to do is to have a look at the document. If you take issue what are provisionally advanced as being uncontested areas, then say so; preferably when we come back so everyone knows that there's no need to cover these issues when you come to your submission, you can focus on what are the issues between you. If you have any thoughts about the set of questions posed by ACCI then, let's deal with that as well, so we're clear about what the issues are before us.
In relation to the question of jurisdiction, no doubt we'll come to that in a little bit more detail in your oral arguments, but it really seems to come down to the proposition that if granted, would the ACTU claim have the effect of excluding the NES or part of it. The ACTU says not, for a couple of reasons. That's because it's put through the prism of the NES bringing beneficial provisions to benefit employees and to the extent that granting the claim would remove or diminish an employer's capacity to refuse, that's not said to exclude the NES.
In the alternative, it's put that it can be regarded as supplementary and therefore doesn't have the effect of contravening section 55(1). The employers take a different view, but it's really focussed on those issues. They say it exclude the NES because to use the language of the employers, it fundamentally changes the character of the right to request in section 65 and that it goes - I'm broadly paraphrasing, but just a bridge too far in terms of supplementing.
Supplementing is characterised in various ways in the employer submission and to some extent the ACTU adopts that characterisation, but it applies it differently. It says, well even if you accept what the employers say about supplementing, that's what the claim does and that seems to be the area of dispute between you on that issue.
Whilst we will no doubt hear from you about it, I don't think it gets much more complicated than that, and that's complicated enough, really. No one really takes issue with Canavan and it's really, what does it mean in practice here? Does the claim have the effect of negating? Well, that really turns on how you characterise section 65.
It's not intended to stop you saying something about it; I'm just not sure that saying any more about it, is going to make the decision any easier. The issues seem fairly clear and that's really the purpose behind trying to characterise what seems to be uncontested and what really is the issue to try and focus the discussion we've got today on those issues.
I also want to hand you a document that raises some questions for the ACTU that it just would be easier, because you're the one advancing the proposition; you can expect that you'll get most of the questions. There are some issues, which speaking for myself, I'm having difficulty linking broad evidentiary propositions with the claim.
If I can take you through the points here. For example, you talk about relying on Professor Austen's evidence about employment transitions et cetera, and that there's a lot rate of full time work for women. Well, I don't think there's a contest about that statistical fact, but I don't really see how that granting the claim is going to address that issue, necessarily. It's a bit like the gender patterns of caring responsibilities; how is the claim - if you advance that as a proposition, but I don't really see the linkage with the claim.
Similarly, in relation to the gender pay gap, you seek to rely on the equal remuneration proposition in the modern award objective; various employer parties take issue with that and for myself, I join them in that I'm not sure how the gender pay gap arises under section 35(1)(e) and I've referred you there to a penalty rate decision which said a similar thing. There's a proposition that increased female participate provides an economic and social benefit, and I don't think that's contested, but I would appreciate some elaboration on that point.
The parental leave test case is an issue between the parties about what that means and its implications. I wanted you to elaborate on your submission that it was not intended that the right to request would not be an enforceable award right. I wasn't sure what you meant about that proposition. You will have seen from the employer's submission, they quote different parts of the parental leave test case.
In relation to the claim, for myself, I didn't particularly want to get into what is a largely arid exercise between all the parties about what the claim does and potentially permits and doesn't.
MS BURKE: I'm glad to hear that, your Honour.
JUSTICE ROSS: I accept that there's likely to be an element of exaggeration at the extreme end of what it might mean and you'll seek to minimise that and we could hear from all you endlessly about that, but there was one aspect of the claim that you say you envisaged disputes would be dealt with in the usual way. What I wasn't following is that well, the scope of any award dispute settlement term is necessarily limited and I wasn't sure whether you were envisaging some change to that. If so, then how that would sit with the statutory framework.
MR WARD: Your Honour, can I just clarify, do you mere there where you're referring to the limits, are you referring to the limits in section 739?
JUSTICE ROSS: No, I'm referring to the limits in the current award dispute settlement term. 739, look may or may not be relevant to it, but depending on how any clause was framed, but the existing model terms would seem to provide that limit.
Then on jurisdiction, as I understood your argument, it was that the power to vary awards to include the clause came from - that should be section 139(1)(b), but I take it that you also accept that a modern award must not include terms that contravene section 55. So, an award term must not exclude the NES or a provision of it; that's how we get to the 55 point. I don't think any of the dot points propositions at the bottom of the page are in contest, but it was really to try and get an understanding of how you're putting the jurisdictional proposition, that's all.
MS BURKE: Yes, your Honour, I can tell you know in relation to the jurisdiction proposition there, that I accept what you've set out there as accurate.
JUSTICE ROSS: I just thought it would save me raising the questions as I went through, and also make sure that I covered each of them. I'd rather give them to you up front.
MS BURKE: Thank you, your Honour.
JUSTICE ROSS: Look, if we can stand down - - -
MR FERGUSON: Just in relation to that, just at a glance the uncontested matters. I think there would be a small number that may be contested - the position would be we'd probably need to look at the material briefly.
JUSTICE ROSS: No, that's fine, I'm going to stand it down for 15 minutes to let you have a look at it, and to let you have a discussion amongst yourselves. Desirably there's some agreed resolution. If there is, if you like tweaking, then I'd suggest you talk about it amongst yourselves rather than as - I don't plan to spend a lot of time. I'll withdraw the document if it's going to be an issue. I don't want to spend half the day settling something - - -
MR FERGUSON: No, I was just coming to, if we needed an extra five minutes or something we'll speak to your associate.
JUSTICE ROSS: No, that's fine. We'll come back at quarter to.
SHORT ADJOURNMENT [10.36 AM]
RESUMED [11.06 AM]
MS BURKE: Thank you for this material and for the Full Bench's time. If I can turn first to the uncontested matters document, everything above the question, the ACTU agrees with all of propositions. I understand the position of the employers is not uniform either with the ACTU and they can be addressed now if that's convenient or as the submissions go on.
JUSTICE ROSS: Sure. Yes, we'll probably deal with it now.
MS BURKE: Right.
JUSTICE ROSS: What do you want to say about the question?
MS BURKE: The question - sorry, this is just in respect of the - I agree that each of these steps needs to be taken but in my view, and it's not a big point, the first step is (a) and (b) should be reversed. First to assess whether the proposed variation is allowable within 130, within the meaning of 136 and then you in effect test it against section 55 restrictions.
JUSTICE ROSS: Yes, I see.
MS BURKE: But as I say it's not - in this case - - -
JUSTICE ROSS: Yes, you go to 136 first because that doesn't allow you to have a term that's - - -
MS BURKE: Exactly.
JUSTICE ROSS: Yes.
MS BURKE: If you don't get over 136 then you don't need to go to 55.
JUSTICE ROSS: Yes.
MS BURKE: Over the page then onto the contested matters, there's just some slight tweaking to the first point.
JUSTICE ROSS: Yes.
MS BURKE: In the second line it's not limited to employees with primary care, it's just care. It contemplates perhaps aspirationally the model of shared care.
JUSTICE ROSS: Yes.
MS BURKE: It's for a child or school age or younger not under school age. That's just the language of the clause. In relation to the second point, I think the way that the ACTU would frame this is slightly differently. We agree that the ACTU's clause is seeking to alter the paradigm - - -
JUSTICE ROSS: No, I don't think you need to worry about the second point. That's just descriptive of what the employers say.
MS BURKE: Yes, all right. In that case I won't touch it. The issue in contest then is put as the framework within which discussions about flexible working arrangements take place. It's a little more refined than that from the ACTU's perspective. It's about - not about whether or not there's a discussion because what the ACTU's claim aims to do is make the starting point that the employee in those circumstances has a right to reduced hours. So the discussion is about the incorporation and accommodation of that, but the starting point is you are entitled to this to accommodate your parenting caring responsibilities.
JUSTICE ROSS: No, I understand that. I mean I really see that as part of the framework.
MS BURKE: Yes.
JUSTICE ROSS: Any discussions take place from your perspective in a context in which the employee has the right.
MS BURKE: That's right.
JUSTICE ROSS: The employer said any discussions take place in a context where an employer has a right to refuse on et cetera.
MS BURKE: It's about what the starting point is.
JUSTICE ROSS: Yes. No, no, that's exactly - that's what is meant by framework. It's the where do you start and what are the parameters around it.
MS BURKE: Now in terms of the - is it convenient now to hear from the employers about this or - - -
JUSTICE ROSS: Yes, I think so.
MS BURKE: Right.
JUSTICE ROSS: Look, there's no difficulty with your amendments to the first arrow point on contested, that's really how you frame your position.
MS BURKE: Yes.
JUSTICE ROSS: Similarly as a second point is how the - how it's put by the some of the employers - - -
MS BURKE: The employer's position.
JUSTICE ROSS: Yes.
MS BURKE: Yes.
JUSTICE ROSS: Well, let's go through the uncontested matters then.
MR FERGUSON: Yes, your Honour. It's not available - I think points 2 and 3 we would regard as uncontested but in essence it stops there. Just to speak to some of the issues. In relation to point 1, we don't think that it is established in the material that the experience of lower labour force participation is linked to a lack of access to flexible work arrangements now. There is some small number of lay witnesses that make that connection but we don't accept that they're in any way representative of the experiences of errors generally. I think when we look at some of the expert evidence, and I'm not sure if you want to go through it, there's a correlation - - -
JUSTICE ROSS: Which bits do you agree to? Which of the arrow points?
MR FERGUSON: Two and three. The second and third, parents predominantly - - -
JUSTICE ROSS: Right. No, that's fine. What do you say, Mr Ward?
MR WARD: Your Honour, can I say what I agree to then can I say some very, very brief submissions in relation to what's left. We're comfortable with 2, 3, 5 and 6 and I'm just hoping I've got my 2, 3, 5 and 6 right.
JUSTICE ROSS: So you don't agree that the principles governing the task of the Commission in conducting the review are largely uncontroversial?
MR WARD: You mean the second page?
JUSTICE ROSS: No, no, I'm dealing with the uncontested matters on the first page.
MR WARD: Sorry, so no, that's uncontroversial:
The principles governing the task of the Commission in conducting the review alone -
JUSTICE ROSS: Yes.
MR WARD: I think so. I think this is the first time - - -
JUSTICE ROSS: Well, I don't see any difference between your submissions and the union's submissions about the principles.
MR WARD: Various parties approbate and reprobate on that but on this occasion we seem to actually have all agreed on what the review's about. Can I just say this in relation to the first one, we don't cavil with the fact that some parents and carers experience lower workforce participation for those reasons but we wouldn't necessarily advance it as a - sort of a universal proposition and of course we would remind the Commission that there are other reasons why some parents and carers don't participate in the workforce; one being preference.
JUSTICE ROSS: Yes, it's not - - -
MR WARD: But it's an exhaustive statement as we see it.
JUSTICE ROSS: So if it said some parents and carers experience lower - - -
MR WARD: We've not issue with it.
JUSTICE ROSS: Yes.
MR WARD: In relation to 1, 2, 3, 4, can I just say that we might be cavilling about what the word "significant" means - - -
JUSTICE ROSS: No, absolutely.
MR WARD: So - - -
JUSTICE ROSS: Yes. Well, if "significant" is out and it just says "but a proportion", and I know that that seems to be - - -
MR WARD: Yes, and as long as there's no judgment taken as to why they can't negotiate we would be comfortable with that as well.
JUSTICE ROSS: Well, it's said for various reasons, yes, for that reason.
MR WARD: Yes, we'd be comfortable with that.
JUSTICE ROSS: So with those amendments if you added in the first dot point "some parents", and then if you took out the word "significant", then - - -
MR WARD: My clients would be content, your Honour. I think that reflects our submission.
JUSTICE ROSS: Yes. Well, given it's a subset of what you've already agreed to, Ms Burke, I don't think - - -
MS BURKE: No, there's no objection to those amendments. Our agreement may take - - -
JUSTICE ROSS: Right. Then with those changes where are we left with the other employers? Where's Ai Group?
MR FERGUSON: Well, just one point, in relation to the principles governing the task, we don't take issue with the points in (a) to (d). There is one small issue between the ACTU and us in relation - - -
JUSTICE ROSS: Well, let's just not go to the question and those questions at the bottom for the moment. I want to look at the arrow points above that. The six what are said to be uncontested, which of those do you contest?
MR FERGUSON: Two and 3 are uncontested.
JUSTICE ROSS: So you contest the proposition that some parents and carers experience lower labour force participation?
MR FERGUSON: I think with "some", and perhaps for the fact there are other factors as well beyond just childcare.
JUSTICE ROSS: Well, it doesn't - it's not suggested that those factors are the only factors.
MR FERGUSON: Well, then if it's premised with "some" I don't think I can contest that. In relation to point 4, I don't think - we can't accept that a significant portion of employees are not - - -
JUSTICE ROSS: Well, "significant" is out. I've just mentioned that.
MR FERGUSON: No, I understand that but we can't accept there's a portion of employees are not able to negotiate. Now there's some that don't but the reason why they're not able to negotiate it, isn't that for argument because - - -
JUSTICE ROSS: Well, that's what it says. It says "for various reasons". It's plainly a fact that a proportion of employees are not able to negotiate suitable flexible working arrangements. That's the evidence.
MR FERGUSON: A proportion that don't, the extent to which they've exhausted all - and this is maybe an argument about the wording, but the extent to which they've exhausted all of their options, some of them don't and they make a decision - - -
JUSTICE ROSS: Well, you didn't cross-examine some of the lay witnesses around that point.
MR FERGUSON: Yes, but the extent to which that reflects - the evidence of a small handful of people reflects many employees is not accepted.
JUSTICE ROSS: Where does it say many employees?
MR FERGUSON: I apologise, I withdraw. I suppose if it's just, "a proportion of employees are not able to", I can't object.
JUSTICE ROSS: Right. What about the next point down? The next two arrow points, the last two.
MR FERGUSON: Just bear with me. We don't agree with the objective underlying the claim is one that we would agree with. Now it might be argument about what the objective of the claim is but we comprehend it to be almost flipping the onus so that it starts from the basis that employees have a right - - -
JUSTICE ROSS: No, the underlying the claim is to provide a facility, leave aside the mechanism, but it's to provide a facility for employers and employees to reach agreement on - - -
MR FERGUSON: We don't think this claim is in any way about a mechanism for agreement.
JUSTICE ROSS: So the first sentence you don't agree with. What about the rest?
MR FERGUSON: We agree that it's desirable that people reach agreement in relation to those matters. I think the issue is, and I'm sorry to be cavilling with this, we obviously say not at any cost, but it's obviously good if things are by agreement.
JUSTICE ROSS: So if the first sentence goes from the arrow point, you don't object to the balance?
MR FERGUSON: No.
JUSTICE ROSS: And the last point?
MR FERGUSON: This was a matter I was going to raise in the submissions but we don't agree to that. In essence it's a small point that we raise, is that we say that these proceedings are looking at a specific claim in relation to - that the ACTU has advanced. Now we say it's not a general inquiry into the efficacy if you will of section 65 or people's access to flexibility.
JUSTICE ROSS: We're not confined by the ACTU's claim.
MR FERGUSON: I understand entirely you're not confined.
JUSTICE ROSS: And it is a review proceeding.
MR FERGUSON: I understand it's a review proceeding and you're not confined. The issue we take is obviously the way this review proceeding is conducted is through the prism of a specific claim. The way the evidence is dealt with and the way we've treated it is in that context. We've made decisions about cross-examination that covers all of that evidence, but I ‑ ‑ ‑
JUSTICE ROSS: Yes, but you were told during the jurisdictional, the preliminary hearing, that it was made clear in the decision there as well that we're not confined to the claim, subject to providing procedural fairness. So in what sense do you say the principles governing the Commission's task in conducting the review are controversial?
MR FERGUSON: I believe there's a contest between ourselves and the ACTU.
JUSTICE ROSS: About what?
MR FERGUSON: About the extent to which this is a general inquiry into the efficacy if you will of section ‑ ‑ ‑
JUSTICE ROSS: What does a general inquiry mean though? We have the ACTU's claim. We're looking broadly at the issue of family flexible working arrangements, and if we decide on a different outcome than the ACTU's we'll tell you what it is in a provisional way, and you can comment on it.
MR FERGUSON: I understand the process. I think it's a submission about what we say the Commission should do in relation to these claims.
JUSTICE ROSS: That's not an issue about the principles governing the task.
MR FERGUSON: No.
JUSTICE ROSS: It's about the outcome. No, that's fine. No.
MR FERGUSON: No, no, I understand what you're saying, and it ‑ ‑ ‑
JUSTICE ROSS: No, no, we'll take it out. You can argue whatever you think the principles are. It's not apparent from your written submission that there's a difference, but you can take the opportunity in oral argument to highlight the difference.
MR FERGUSON: I think the point might be quite slender.
JUSTICE ROSS: Yes. It sounds like it.
MR FERGUSON: Yes.
JUSTICE ROSS: Anybody else? Anyone interstate? Then with the addition of the word "some" in the first arrow point, and the removal of the word "significant" in the fourth arrow point, the removal of the first sentence in the fifth arrow point, that is, "The objective underlining the claim", et cetera, and the removal of the last arrow point, it seems that the matters remaining are uncontested. Does anyone take issue with that proposition? No?
I don't think we need to trouble the parties about the way ACCI has framed the point. I think the difference that's been highlighted by Ms Burke doesn't detract from the fact those issues need to be considered. It's really the order in which one might come to them.
MR FERGUSON: Yes.
JUSTICE ROSS: We'll make the amendments that the ACTU sought as to the contested matters the way that their claim had been framed. Okay? Anything else in relation to that? Are you ready to go, then?
MS BURKE: Yes, your Honour.
JUSTICE ROSS: Okay. Let's ‑ ‑ ‑
MS BURKE: Can I just start by addressing some of the matters in the questions to the ACTU. In fact, there might be some other questions that fall out of those, and I'll attend to those over lunch. But the first point raised by the Full Bench is this question of low rate of full-time work for women, and if I understand the question properly it's how is the ACTU's claim aimed at dealing with this problem.
JUSTICE ROSS: It's really I don't understand the linkage between that general proposition and what you're seeking.
MS BURKE: Yes. Yes, all right. It's not the ACTU's position that its clause would immediately change the rate of full-time work for women. It's much more directed to ensuring that when women do, and parents, sorry, do work on reduced hours they would have a path back to full-time work, and so it's for long view in that sense.
In relation to the gender pay gap, our position is that women dropping out of the workforce or taking on lesser work, so moving from a managerial position to a non-managerial position because that's the only part-time work or reduced hours work that's available does contribute to the gender pay gap, again, in that broad sense, and I accept in terms of the principle of equal remuneration for work or equal comparable value I understand the comments about that in the penalty rates case. I can't add to that. I accept that that's what it is. But these questions of the gender pay gap and equal remuneration for work – equal and comparable value more broadly linked to the Commission's role in reducing discrimination and that includes indirect discrimination which includes structural discrimination, and so there is a thematic link there. In my submission, the absence of a clear path to reduced hours and then back to full-time hours, if that's what the employee wants, is an area that is relevant to considerations of structural discrimination.
The next point down which is about the increased female participation leading to economic and social benefits, I understand that's now not a contested matter.
JUSTICE ROSS: Yes.
MS BURKE: In respect of the parental leave test case question, perhaps what that should say is "would not be an enforceable award right", but that it wouldn't be a reviewable award right. My understanding of – that there was no carve out in the clause that the Full Bench drafted.
JUSTICE ROSS: I see. So it ‑ ‑ ‑
MS BURKE: In the way that there is a carve out of section 65(5) in the NES.
JUSTICE ROSS: Right. Is it put that at that time there was a dispute resolution mechanism in the award that provided access to arbitration?
MS BURKE: Absolutely. Absolutely.
JUSTICE ROSS: I see. Yes.
MS BURKE: It wasn't intended. Although of course it was the intention as I understand it, and your Honour will know better than I, that the Full ‑ ‑ ‑
JUSTICE ROSS: I wouldn't count on that, Ms Burke. It's been some time since I've looked at it.
MS BURKE: From my reading of the decision it was intended to facilitate discussion.
JUSTICE ROSS: Yes.
MS BURKE: That same rationale obviously was picked up by the government when section 65 was linked to the Fair Work Act, but it wasn't intended that there would be no dispute resolution mechanism for these sorts of discussions, and that's significant.
JUSTICE ROSS: Yes. But that sort of gets us to the nub of the employer argument against your claim, that is, that we can accept that as a proposition for the point of the argument. But in the parental leave test case, yes, there was a framework of discussions. It was put in an award context at the time in which there was a dispute resolution mechanism available. But the current statutory framework, both in the explanatory memorandum of the extrinsic material that's been referred to, continue that part of the proposition that there should be discussions between the parties about this, but they expressly exclude a capacity to review. They expressly provide that it can be refused on certain grounds, and I can understand how you – where your clients may be frustrated about that statutory framework, but that's what they've decided.
MS BURKE: That is what they've decided, your Honour, but, in my submission, that is inconsistent with the broader purpose of the national employment standards, which is a fair and relevant minimum enforceable safety net, and the explanatory material doesn't go to that at all. I don't think that – you can't say based on the explanatory material that that's something that the government on the day considered and turned its mind to.
JUSTICE ROSS: That then becomes the – if you're right about that, well, they may have had the passage of section 65 in those terms with the 739, may not meet the requirements of the NES, but doesn't the solution then come to a statutory amendment rather than an arbitral one?
MS BURKE: No, your Honour, because the NES alone are not the safety net.
JUSTICE ROSS: Yes.
MS BURKE: The modern awards ‑ ‑ ‑
JUSTICE ROSS: No, I follow. Yes. Yes.
MS BURKE: So, in my submission, if there's a gap in the safety net in the statutory component of the safety net, for whatever reason, and I think we can all take note of the fact that it is very difficult to pass legislation at the moment, then the modern awards - and this Commission, plays a role, and it's certainly not intended that modern awards and the terms of modern awards wouldn't fill gaps that are in the national employment standards. There's no carve out there other than the clause with respect to section 55.
JUSTICE ROSS: I suppose that's the nub of the contest. You say it fills the gap, and the employers say, well, it actually negates the intention of 65 ‑ ‑ ‑
MS BURKE: Only with ‑ ‑ ‑
JUSTICE ROSS: ‑ ‑ ‑by removing the right of an employer to refuse.
MS BURKE: Yes, only with respect to that.
JUSTICE ROSS: It's a fairly ‑ ‑ ‑
MS BURKE: I understand. I understand. It is what it is.
JUSTICE ROSS: All right.
MS BURKE: In relation to the question about the dispute resolution clause, yes, the model term, as I understand it, or the model clause only provides for consent arbitration, but nonetheless it does provide for dispute resolution, conciliation and other matters, so ‑ ‑ ‑
JUSTICE ROSS: Yes, okay. I just wasn't sure whether you were seeking to change that in some way. But I understand how it's put now.
MS BURKE: No, it's simply that this actually does provide a mechanism for an employee and employer who can't agree to come to the Commission and resolving it. In respect of the jurisdiction question, I think I address - I agree that those were the relevant principles, and the rest of the document is the extract from the penalty rates decision which I'm familiar with.
JUSTICE ROSS: Thank you.
MS BURKE: If your Honour will bear with me as I work through my notes about the closing submissions.
JUSTICE ROSS: Yes, certainly.
MS BURKE: They will need to be tempered by the issues that have been raised and I'm happy that there were no real surprises is what those issues are. What I intended to address in closing submissions was directed by the fact that many of the matters that have been raised in the employee submissions, we essentially draw issue with, in terms of what findings should be made from the evidence and the arguments of the argument. So, I don't plan on going over those again.
These oral submissions are really directed to jurisdictional matters and then issues arising from the employer submissions with regard to evidentiary matters and in particular, those that go to the witnesses called by the ACTU. I'll deal with lay evidence, survey evidence and the evidence of Dr Murray in the context of this idea that there's a need for reduced hours. I'll deal with the evidence of Professor Austen within the context of the proposition that there's immediate impact of not having access to flexible work and I'll deal with the comments about Dr Stanford's evidence within the framework of the ACTU's proposition that there are positive benefits to part time work, or reduced hours work.
With regard to the jurisdictional question, I think it's helpful to start with a consideration of how to characterise the ACTU's proposed term. The Commission has jurisdiction to vary awards to include terms relating to flexible working arrangements and when work is performed and that's in section 139(1)(b) and (c). This isn't really disputed as I understand it.
Then the jurisdictional issue is really about the interaction of section 55 with the absence of any right of the employer to refuse the employee's claim for reduced hours. We know from Canavan and from alleged NES inconsistencies that exclude, within the meaning of section 55(1), means that the clause would, in its operation result in an outcome where employees do not receive in full or at all, a benefit provided for by the NES or put more broadly, so not just limited to the impact on an employee, whether the clause would negate the effect of an NES provision.
Once we actually work through the issues, it reveals that the jurisdictional question is a very narrow one because the ACTU's clause of course, doesn't negate the effect or exclude the operation of all of section 65. It applies to much narrower circumstances than in that section. It only applies to parents of young children and to carers.
JUSTICE ROSS: Does it have to negate the effect of all of them?
MS BURKE: No, it doesn't.
JUSTICE ROSS: Wouldn't it be sufficient if it negated part?
MS BURKE: It would. With that in mind, the way I understand the jurisdictional question is whether the ACTU's proposed clause excludes the operation of section 65, only insofar as it relates to the rights of the parent of a young child or a carer to seek a reduction in working hours and of the employer's right to refuse that. The ACTU's position is that it doesn't exclude that very narrow purpose because employees can still make a request under section 65.
The ACTU's proposed clause offered better rights to employees than under section 65, but offering better rights, is not equivalent to excluding existing rights and it can't be the case that you can't improve on the rights that are in the NES and that that would have the effect of excluding them. In any event, and bearing in mind what was said in the jurisdictional decision, section 65 is little used.
The Full Bench commented in that decision that:
The extent to which the clause excludes section 65(5) will depend on the evidence as to its use.
The evidence of the low utilisation suggests that the practical operation of section 65 would not be altered. Now you might fairly ask, well isn't that a problem for the ACTU, because the section 65 isn't used much, maybe there isn't much necessity for this clause. But that's not the case.
We don't really know why people aren't using section 65 but what it can't be said is that workers are not making requests and seeking to change their working hours to accommodate their family and caring responsibilities. Some of those requests are still being rejected. So, there is still a necessity for the clause.
An issue was raised in the Ai Group's submissions about whether the clause negates the effect of section 65(3) with regard to the requirement to put the need for the request in writing, and that's at paragraph 31 of the Ai Group's submissions. My understanding is that the clause would not negate the requirement for the employee to put their request in writing or specifically the reasons for the request because employees are still required to set out in writing their request in considerable detail, including without any limitation, information about the proposed days and hours of work, the period of time of the arrangement and the date on which the employee wishes to revert, if she does.
There's nothing to stop the employer for asking for that information, why are you seeking this arrangement. In my respectful submission, it will be obvious from the nature of the request. In any event, if this is the only jurisdictional barrier to the ACTU's claim, then it is easily remedied.
In the alternative to the argument around section 55(1), the ACTU contends that the term is supplementary to the NES and if that is made out, then the plain words of section 55(7) provide that therefore it doesn't contravene section 55(1). We say that the clause is supplementary to section 65 for the reasons set out in our reply submissions dated 27 November at paragraph 13 to 15.
I won't go through them, I just want to address why we say that the term is supplementary and we say that it's supplementary because section 65 is incomplete and deficient for the reasons set out in paragraph 14 of those 27 November submissions.
The Ai Group have attached this, as a value judgment. It's not clear to me how that is a legitimate basis for attack. Value judgments are made all the time in this Commission, and in fact, the assessment of whether or not a proposed variation meets the modern award's objective is expressly identified as exercising a value judgment.
The reason that the incomplete and deficient nature of section 65 is relevant, is because that comes from the Macquarie Dictionary definition of supplement, which is defined as something added to complete a thing, supply deficiency of complete a whole.
The deficiency with section 65 in my submission is that the employer's ability to refuse a request for a flexible working arrangement is not reviewable. And as I said earlier, it's the ACTU's submission this is inconsistent with the underlying purpose and rationale of the National Employment Standards and the safety net. The Ai Group have argued that sections 44(2) and 739(2) which are the sections which prohibit review of the employer's grounds of refusal, are outside the NES (which of course, they are) and therefore they're irrelevant for the purposes of assessing the completeness or deficiency of section 65.
In my submission, this submission can't be followed, because there's no requirement that the deficiency relied upon be contained to the words of the NES entitlement under consideration. The Commission shouldn't read down section 55(4) to confine the matters to which the Commission can have regard when assessing the provision that is said to be supplementary, incidental or ancillary only to other provisions of the NES. There may be something inherent in the NES entitlement that requires a supplementary provision.
The Ai Group also contends that for a term to supplement the NES there must be a connection between the proposed term and the NES term and the argument that is made against us is that there's no meaningful connection between the ACTU's clause and section 65. We say, for the reasons already set out in all of our submissions, that there is an overlap between the two and that that overlap is sufficient to demonstrate a connection.
Finally, with regard to section 84 which was relied on very clearly by the ACTU in the previous direction of its clause that was the subject of consideration in the jurisdictional decision, clearly the ACTU's proposed clause as it's currently before the Full Bench would apply to employees returning from parental leave. Again, in my submission, that is sufficient to demonstrate the connection for the purposes of assessing whether the term is supplementary. Again, if the words, "including an employee returning from parental leave" need to be added to clause X.2.1 to make that even more clear, then they should. That is an easy fix. That's all I wish to say about the jurisdictional point.
I now what to talk about the need for a right to reduced hours. It's not in dispute that decisions about labour force participation made by employees who are parents and carers and influenced by a range of factors, including access to childcare and yes, the quality of that childcare. We don't assert otherwise. The costs and quality of childcare is highly relevant but it's wrong to conclude that because that features so heavily in parents' consideration of when and how to return to work, that there's - that flexible working arrangements are not relevant. The two are closely linked and arguably one without the other is pretty useless.
We also don't dispute that Australia has very high rates of part-time work and that many employees and employers are able to successfully negotiate flexible working arrangements outside section 65 and other formal processes. The evidence supports this, we don't shy away from it. But this case like all policy issues is not directed to people who are satisfied with their work/life arrangements. It can be I think easy to lose sight of this, that the broad purpose of the four yearly review and the reason that parties bring applications for variations to modern awards, is to solve problems with the safety net and of course that is done within the parameters of the statutory framework.
The fact that a significant number of people are able to successfully work outside the system does not mean that the system itself should avoid scrutiny. Put another way, the fact that there are a lot of good managers out there who manage to accommodate employees' caring responsibilities is not evidence by itself that the safety net is adequate. When you look at the safety net, and you look at the system, it's clear that not all refusals are reasonable. The debate about whether employees - sorry, employers are reasonably or unreasonably refusing requests for flexible working arrangements does have an element of artificiality about it. Because as acknowledged in the general manager's report there are real limitations on data collection about the utilisation of section 65, and of course there are no precedents from which we can draw any conclusions about the sorts of problems that arise.
There are examples from the lay evidence of refusals that are not reasonable, and the Commission should not assume that these are isolated incidents of rogue employers, particularly where those employers are employers, for example, in schools and other large organisations. The Australian Industry Group argued that there was no probative evidence establishing that the personal views or attitudes of managers were resulting in requests for flexibility being refused in circumstances where there was otherwise an absence of reasonable business grounds.
We disagree with that and the evidence of Katie Routley who was cross-examined provided an excellent example of the type of request that should and could have been accommodated. Just briefly to remind you of Ms Routley's evidence, she's a teacher in South Australia and at one point she and a colleague put forward a job share arrangement to the principal and it was refused. In my submission, work places should not be permitted to impose a blanket policy of no part-time work. There is no evidence of poor educational outcomes when part-time teachers are engaged and marked differential and parental preference should not be sufficient reason to deny an employee a request to work in a manner that allows her to meet her professional responsibilities and her personal responsibilities. The inability of the Commission to consider the adequacy of the employers' reasons for refusal in a case like that is problematic.
As to the ACTU's lay evidence generally, the NRA in their submissions made the point that many of the witnesses called by the ACTU are not award covered. Now sensibly this criticism was not made by the Australian Industry Group or ACCI because to do so would knock out a significant number of their witnesses as well. But rather, this is a case where award coverage is not a pre-requisite for relevance because the need to engage with flexible work is not just something experienced by award covered employees. ACCI described the ACTU's lay witness evidence as representing the high water mark or the most compelling witnesses the ACTU could source to demonstrate the inadequacy of the safety net.
Now the ACTU's lay witness evidence by no means represented the worst examples of safety net failures. In fact many of these witnesses represent the best case scenario under the safety net, and that's because all of them are union members with access to support and representation. They're all well informed employees and many of them come from work places with strong flexible work provisions in their enterprise agreements, or workplace policies. But even then the evidence showed that about half were missing out on being able to negotiate appropriate flexible work arrangements, and I'll refer the members of the Full Bench to the evidence of Ms Sinclair, Ms Czerkesow, Ms Routley, Ms Jones-Vadala and Ms Ogulin.
The Australian Industry Group also criticised the ACTU's lay evidence because it only related to five industries, and there was no evidence from a number of industries from which the Ai Group's members are drawn. In my submission, this simply misunderstands the purpose of common issue proceedings. It also ignores the fact that of the 122 modern awards and in fact I think there are even more now, every single one of them contains a range of non-full-time work provisions. Further, the fact that the ACTU didn't call lay witnesses that cover all of the Australian Industry Group's industries in which it have an interest did not preclude them from attending to that evidentiary gap if there was one.
Nevertheless, the Ai Group contend that because of the deficiency in the ACTU's lay witness evidence, the only material that might assist the Commission to assess the impact of this claim on all industries is the joint employer survey. Needless to say there is no evidence, and it was not contested, that the industries specific responses in the joint employer survey are representative of employers in those industries.
As to the reliability of the surveys generally, I refer to and repeat the ACTU's submissions dated 7 November, which are the objection submissions, and the final submissions filed on 19 December. There are just some specific comments that I need to make about the surveys that arose from the employers' material. First, in relation to the joint employer survey. The Ai Group has acknowledge that 43 respondents don't employ anyone, 43 out of what was 2094 I think, but go onto say well this doesn't affect the overall results because it's a small number. But this misses the point. The point is that the presentation of the data is unreliable and while it's put forward that LimeSurvey created the response IDs, there was no explanation for the missing 229 responses.
To the extent that both the Australian Chamber and the Australian Industry Group picked out various comments made by survey respondents and put those in their submissions, those comments should be given very little weight indeed. There's no way of assessing whether the responses are rational and well informed, that the respondent is even an employer and in any event even a quick review of those responses that are extracted reveal firstly, that they don't really appear to be addressed to the ACTU's proposed clause at all, but often are just a general commentary on the need for work to be done over a specific time. Second, the feedback about accommodating employees' responsibilities are positive as well as negative, the net effect is very little.
Regarding the Victorian Automobile Chamber of Commerce survey, the VACC haven't made any submissions to the Commission about the findings that should be drawn from that survey. The ACCI submissions don't shed any light on it and moreover the VACC elected to exclude relevant evidence about the survey from Mr Hoang's witness statement. These matters are indicative of serious procedural fairness concerns with how the VACC chose to present this evidence. This alone should be a sufficient basis for the Commission to exclude this evidence or to attribute no weight to it. In case more is needed, the ACTU relies on its submissions dated 19 December at paragraphs 104-5. The highlights include the fact - the strong prospect that members of ACCI and the VACC received both surveys, the inconsistent presentation of data in the Excel spreadsheet with some answers merged by means of a formula that wasn't explained and others left as duplicates with no indication of how the Commission should ascertain what the final set of responses should look like.
I just want to touch briefly on some criticisms made by the Australian Chamber about the evidence of Dr Murray. At paragraph 9.9 the Australian Chamber say that Dr Murray failed to demonstrate a sound understanding of the AWALI report and the general manager's report under cross-examination, and accordingly caution should be exercised when considering her evidence. With respect, this is a most unfair criticism. Regarding the general manager's report the relevant findings from that report are set out in the ACTU's submissions at paragraph 58 to 60.
Regarding AWALI Dr Murray was asked questions about the methodology used in the AWALI work life interference index, and she made it clear that she was not asked to and did not look at that part of the AWALI studies in her report, and you can see that at the transcript at 706 to 726.
Nevertheless the work life interference findings in the AWALI report have been very helpfully summarised by the Australian Chamber at paragraph 9.11 of their submissions, and I note in particular the relevance of the findings at points 5, 7, 9 and 12 of the Australian Chamber's review of the work life interference measures for part-time workers and for parents trying to balance caring and work responsibilities.
Turning now to the evidence of Professor Austen, and her evidence is really central to this concept of occupational downgrading. That's relevant because the economic consequences of parenthood are not just attributable to the time out of the workforce. It's also relevant to look at the job you come back to. One argument that's quite clearly made in the Ai Group's submissions is essentially that to the extent occupational downgrading happens, it's because of cultural matters, which does not explain what that means, or because women are choosing to work in less stressful and demanding roles. Similar argument is made in the context of women's connection to the labour force and child care. It's suggested that women basically are being a bit picky about the quality of child care, and that an employer shouldn't have to accommodate what is described as a matter of preference.
These questions are simply wrong because they ignore the fact that choices that parents make about what job to come back and about child care are heavily influenced by the surrounding context of gender and quality including lower pay, and including stereotypes about who should be the primary carer, or whether there should be a primary carer at all.
Professor Austen's work on occupational downgrading is criticised for not drawing or showing a causal link between women's high levels of work transition and the need for appropriate flexible working arrangements. Once you actually unpick this it's a disingenuous proposition, because the same life events happen to men and women. Men and women enter the workforce in equal numbers, and when they do women have slightly better levels of educational qualifications than men. All of the reasons identified in the Ai Group's submissions about the factors that impact on labour force participation including education, career aspirations, health, age, et cetera, all apply equally to women and men.
The only real difference is responsibility for caring. And the clearest impact of that difference is in figure 25 of Professor Austen's report. You probably can tell by the number of times it pops up in the ACTU's submissions, but I love this figure, because what it shows is that for women their transitions over the life cycle of work is all over the place, and for men it is completely static, and given the points I just made about the difference between men and women, really there being only one key difference, the same people in both of these charts will age, will have educational qualifications, might have health problems, will have career ambitions, the difference, the only difference that explains this is responsibility for caring. So to say that there's no evidence of responsibility for caring which is of course highly relevant to the need for flexible working arrangements, and women's high levels of transition, in my respectful submission, misses what is very obvious from the data.
The evidence that men and women's rates of employment and the nature of their employment travel along pretty consistently until children arrive, and then when it does women's connection to the labour force takes a hit and it never really recovers to the same level as men, and this is what Professor Austen has described as the return to experience. Her research shows that the disruption caused by the arrival of children and the responsibility for their primary care contributes to large gender gaps in long-term wage and career outcomes.
So that's all I need to say about Professor Austen and I just need to say something very briefly about Dr Watson, and this is in respect of something that was raised by the NRA in their submissions. The NRA have accused Dr Watson of using deceptive language and making manifestly false statements. That's in paragraphs 28 and 35. These are very serious accusations and it is, in my submission, completely inappropriate for the NRA to make that submission without having put those matters to Dr Watson in cross-examination. They should be disregarded entirely.
Turning now to the evidence of Dr Stanford and the impact of flexible work or less than full-time work on productivity, the ACTU relies on the evidence of Dr Stanford in support of the proposition that flexible working arrangements including part-time work are associated with the productivity benefits for employers, and in addition of course is Dr Stanford's evidence that the ACTU also relies on the material set out in paragraph 68 and 69 of the submissions.
The question of productivity should be viewed in the context of what the ACTU is required to prove to establish that the modern awards objective is not being met. We're not required to demonstrate that productivity will increase as a result of more part-time work; rather the effect of the variation on productivity is one factor that the Commission should take into account when considering this application, and the inference is clearly available to be drawn that part-time workers are not less productive than full-time workers and that they contribute overall to increased productivity. The basis for this conclusion is not just studies like the Ernst & Young study and those cited by Dr Stanford, but from the fact that industrial regulation over many years has been expressly directed to increasing the amount of less than full-time work for reasons that are explicitly linked to productivity. That's at paragraph 69 of the ACTU's submissions. We say that labour productivity is not just something that's contained at the individual or the firm level; it's relevant to the economic outlook, and it's certainly treated as such in the annual wage reviews.
The Australian Chamber have raised the question of the meaning of flexible work within the context of section 134(1)(d) of the act which says that the Commission should take into account the need to promote flexible modern work practices and the efficient and productive performance of work; ACCI's submissions that the reference here to flexible work is a reference to flexible work from the perspective of the employer, and they cite the penalty rates decision at paragraph 117 in support of that. While you can certainly look at flexibility at an employer focused and employee focused, they're not binary concepts, and 34(1)(b) and (1)(d), in my submission, should not be construed as an employer only provision. The better way to consider flexibility and the efficient and productive form of work is by taking a sort of Venn diagram approach to the question, so it should be possible to achieve flexibility in a way that meets the needs of both employers and employees. The ACTU's position is that currently there is no meaningful way in which the employee's need for flexible work is met. The balance is too focused on employer driven concepts of flexibility.
I need to address several matters raised by the employer parties regarding Dr Stanford's evidence, and the first of those is that in the ACCI's submissions at 9.15(c) it's stated that Dr Stanford attempted to quantify the benefit and cost to family friendly work schedules. He didn't do that. Dr Stanford repeatedly stated that formal models and precise quantitative simulations are not possible but that the literature confirms that the benefits are positive and significant, and you can see that in Dr Stanford's report at paragraph 6, 12 and 53.
ACCI also criticised Dr Stanford for presenting a jaundiced view of Australian employers and businesses. I don't understand the Australian Chamber to be suggesting that offering any criticism of Australian businesses and employers is somehow an indication of bias. The Australian Chamber's submissions criticised Dr Stanford for being unable to identify any employer or business in Australia that is ill-informed and poor at managing.
I'm happy to give my learned friends a list, but for now, I think 7-Eleven, Caltex and the Retail Food Group are a pretty good start.
JUSTICE ROSS: Do you want to ask a question?
MS BURKE: In any event, it's quite wrong to present Dr Stanford as holding a jaundiced view of Australian business and that's because during cross-examination, he appropriately accepted that sourcing labour is a complex, multi-dimensional exercise that employers engage in. He said that not all employers will seek cheap labour, but some will and he says that many employers work to retain high quality labour, but some deliberately accept high and rapid turnover.
In my submission, this is self-evident. Fast food and takeaway outlets are a good example of a business model that is based on regular turnover of junior labour. The transcript references for all of those are at PN889, 891 and 897. I don't need to go through in detail each of the criticisms that Dr Stanford made by the Australian Chamber in 9.17 of their submissions, suffice it to say, resub paragraph (c), that Dr Stanford wasn't asked about the Canadian system or any specific system by Mr Ward, nor was he asked to look at international labour regulation by the ACTU.
Regarding subparagraph (e), well I suppose that reasonable minds can differ on whether the example put by Mr Ward was a very simple and basic example. But the real point is that Dr Stanford's opinion about whether a hypothetical employer can reasonably decline a request, just doesn't assist the Commission.
The Australian Industry Group argued that the literature review in Dr Stanford's report should be given very little weight for three reasons. First, it's focussed on or contains international studies. Second, it doesn't consider the specific ACTU clause, and third, the authors of the works haven't been called to give evidence. We'll address these grounds in reverse order.
Dr Stanford was called to give evidence about the contents of his report and he was cross-examined, including about certain articles referred to in that report. To content that his evidence is unreliable because the ACTU did not call the authors of each article to give evidence is to impose a degree of evidentiary rigour that was certainly not met by the Ai Group with respect to material referred to by Ms Toth and would also preclude the Commission from relying on anything in the recent report without giving all parties the opportunity to cross-examine each of the authors. I don't need to say any more about that.
I'll pass over the second ground; clearly there are no studies of the ACTU's cause. But regarding the first ground about international literature, as a general proposition, the Ai Group haven't explained why international studies are completely irrelevant to the Australian context. It is simplistic, and with respect, blinkered to assert, that as Ai Group do, that an article which relates exclusively to Britain is automatically irrelevant. Rather, the relevance of international literature will depend on the context in which it's examined.
So, for example, in a minimum wages setting, wage setting mechanisms differ widely from country to country. Studies about the impact of changes to minimum wage and the effect on employment, might rightly be viewed with a degree of caution. But here, in this case, the question is specifically about the benefits to business arising from flexible working arrangements. Just a reminder, that the question that was put to Dr Stanford was picked up from the 2005 decision and put to him. It was identified by the AIRC as an evidence gap.
A part time worker is a part time worker, regardless of the industrial context in which they perform work. Equally, productivity is productivity, regardless of the country in which the assessment is made. There are a number of specific criticisms in the Ai Group's submissions of certain articles in the literature review. It's important to note at the outset that criticisms of these articles were not put to Dr Stanford. Further, the attack on this material in the AiG submissions proceeds from a series of faulty assumptions. Unfortunately, because they are so extensive, I do need to address them.
I'm looking at paragraph 103 of the Ai Group's submissions. Paragraph 103(a) attacks the Lee and DeVoe study. It's said to be based on the sub-selection of employers who identified that they'd adopted flexible working hours. That study is careful not to only study employers who volunteer information. It used data from a nationally representative survey with government mandated participation as a comparator. The authors noted that the absence of representative data can lead to selection bias and they say that it's critical to observe the whole population and that's why they had regard to the nationally representative survey. You can see that at pages 299, 300, 303 and 306 of the article.
At paragraph 103(b), there's criticism of the Klein Neck article on the basis that it doesn't support the proposition that work input contributes to the success of firms as a consequence of flexible working arrangements. All I need to say about that is that the reference to that study in paragraph 29 of Dr Stanford's report needs to be read in conjunction with the preceding sentence, which talks about the difference between internal and external labour flexibility. Once you do that, it's clear that that proposition is consistent with findings in the Klein Neck article.
With regard to the criticism of the Skinner and Chapman material - that's referred to in 103(c). The criticism is that it's not clear that the schedule control contemplated in those articles permitted an employee to dictate their hours absent any employee influence or discretion. But the three articles referred to there, looked at this organisational change program at Best Buy which is sort of a JB Hi-Fi in the United States. That program introduced changes to work practices, supervision styles and organisational culture.
The focus of the results was on the achievement of tasks, goals, deliverables with workers given complete control over where and when they did their work, as long as it was done efficiently. Now, if that's not an employee having a significant degree of control over their hours, I'm not really sure what is.
Finally, at 103(c)(i)(d), there's criticism of the Brough and O'Driscoll article on the basis that it's not clear of whether any of the 13 articles reviewed relate to the Australian context. I've said what I want to say about the relevance of international material, but I'll just note that one of the very first articles discussed by Brough and O'Driscoll is an evaluation of a trial of a compressed work week for a group of Australian construction workers.
I just want to touch briefly on the substitution of labour argument. The absence of perfect substitution of labour - - -
JUSTICE ROSS: Are you leading Professor Standard's evidence?
MS BURKE: I am, your Honour.
JUSTICE ROSS: Can I take you to part of the evidence? He was asked some questions about reciprocity and decision making.
MS BURKE: Yes.
JUSTICE ROSS: And what he meant by that. This is at paragraphs 908 and then 913 to 914.
MS BURKE: No, I recall the cross-examination. 908 of the transcript, that your Honour is referring to?
JUSTICE ROSS: Yes.
MS BURKE: Yes.
JUSTICE ROSS: Then at 913 to 914. He's asked about what does he mean by this concept of reciprocity and decision making and it seems that his answers make it apparent that he's not suggesting an arrangement where either the employer or the employee can dictate the outcome of the discussion about flexible working arrangements. That doesn't seem to support the claim that you're advancing.
MS BURKE: Well, your Honour, that should give you some confidence as to the credibility of Dr Stanford's evidence.
JUSTICE ROSS: Well, I'm grateful for that. But I might say that Ms Toth's evidence to it, is to the same effect at 2042. You may characterise section 65 as providing the employer with an opportunity to dictate the outcome and the employers of course, argue that your claim allows an employee to dictate an outcome of the discussions. So, how do you then deal with Professor Stanford's and Ms Toth's evidence about this proposition when neither of them support a unilateral capacity for either an employer or an employee to determine whether or not flexible working arrangements should be implemented?
MS BURKE: Certainly, your Honour. That is the opinion of those witnesses.
JUSTICE ROSS: Yes.
MS BURKE: The evidence that we rely on of Dr Stanford's is his review of the benefits of flexible work. The ACTU's opinion about what the clause should look like is different and we accept that. It's aimed at addressing what is perceived to be by the ACTU as an imbalance in power and it's hard to see it as anything other than an imbalance in power. The other important point to note is that the ACTU's report - the ACTU's clause does expressly contemplate discussion between the employer and the employee, and that's at - - -
JUSTICE ROSS: Isn't that just the other side of the criticism that you have of section 65? It also envisages discussion but ultimately a party has the employer in respect of section 65, the capacity to refuse on certain grounds.
MS BURKE: Yes, that's right and that's where section 65 sort of ends, the inquiry of it ends. The employer refuses on grounds that they may think are reasonable but the employee doesn't and that's really the end of the discussion. What the ACTU's clause is designed to do is to have that discussion, if agreement can't be reached you come to the Commission. There is an end point that is neutral as it were, because it's not imposed by another party. It certainly restarts the - - -
JUSTICE ROSS: But the ACTU's clause has the discussion take place in the context where the employee has a right to determine the hours.
MS BURKE: It does, your Honour. Well, they have a right to reduced hours.
JUSTICE ROSS: Yes. When you say the matter can come to the Commission and be determined in a neutral way, well except that it can't be determined unless there's consent to the arbitral outcome.
MS BURKE: In the arbitral outcome but there's still the presence of conciliation.
JUSTICE ROSS: Certainly it can be resolved through conciliation.
MS BURKE: Just briefly on the substitution of labour argument that Ms Toth spent some time on. The absence of perfect substitution of labour cannot rationally affect the Commission's assessment of the claim. The invocation of this as an issue disguises some really crucial points. First, I don't understand any party to be suggesting that perfect substitution exists at all. Perhaps at the University of Chicago Economic 101 but not otherwise. The second is that employers deal with labour substitution issues, particularly with respect to part-time and casual workers all the time. The employer parties produced no evidence that an increase in the number of less than full-time workers would change that. The third is that when you're assessing the impact of the claim on labour substitution issues it's important to get the counterfactual right.
An employee who is full-time and wants or needs to work reduced hours and her request is refused may well just leave her job. So in that sense the employer doesn't avoid a situation where they need to replace labour. Really, the only scenario in which an employer avoids the substitution issue is where the employee wants to work reduced hours, that's refused and she stays in her position. The evidence is that just doesn't happen very often.
Your Honour, those are the evidentiary issues that I wanted to address that arose from the employers' submissions. I just want to briefly say something about what is not really an elephant in the room because we're all very conscious of it, and that is why should the employers not have the capacity to refuse a request.
The ACTU's proposal in this clause is put in the context of an existing power imbalance between employers and employees. In the current regulatory environment employees have no power at all when it comes to flexible work. The ACTU's clause is not without balance. It does require employees to provide reasonable and detailed notice to their employer, including evidence where required. It confines the entitlement to a clear and targeted section of the community and the evidence shows that in practice, even in unionised workplaces with relatively strong rights and powered employees, employees take a reasonable approach to negotiations. Sasha Hammersley's evidence is a good example of that.
It's certainly not the case that employers are prohibited from putting counter proposals to an employee and negotiating an arrangement that suits both parties. Yes, the parameters in which that discussion takes place are sought to be changed but if the parties are unable to agree then the dispute resolution clause applies.
DEPUTY PRESIDENT GOOLEY: Ultimately, given the nature of the dispute resolution provisions in modern award, it's the employees who would prevail.
MS BURKE: Well, the employee's view as to there being a need to work reduced hours yes, it will.
DEPUTY PRESIDENT GOOLEY: The employee's views of the hours that they wish to work would prevail.
MS BURKE: Yes, that's right, but it's not intended that that take place without discussion. Just as at the moment the employer's view about reasonable refusal prevails. I'm not sure if I beat my estimate or not. I just need to say one more thing, thank you, that arose out of the cross-examination this morning of Ms Toth who was recalled to explore the context in which she'd prepared her evidence, and all I need to say about Ms Toth's evidence is that it's clear that her statement was not prepared in an arm's length way from the Australian Industry Group. It was a product of collaboration with her employer who is one of the principal parties opposing this claim. Her evidence should not be treated or given the same weight as the expert witnesses called by the ACTU. It was clearly prepared for the purposes of assisting her employer to defeat this claim. There's nothing intrinsically wrong with that but it's not expert evidence. Thank you.
JUSTICE ROSS: Thank you, Ms Burke. Mr Ferguson. Did you want a few minutes of - - -
MR FERGUSON: I'm just in discussion, I was just wondering given the time whether - I'm in your hands - it's convenient to take a break now. It might allow me to - - -
JUSTICE ROSS: It's really up to you. Would you prefer that?
MR FERGUSON: It might allow me - I would prefer it, your Honour, it might allow me to rationalise some of this, given what's happened.
JUSTICE ROSS: No, that's fine. Can I raise a couple of - if we're going to do that.
MR FERGUSON: Yes.
JUSTICE ROSS: So we'll come back at what, quarter past one, does that suit everyone?
MR FERGUSON: Yes.
MS BURKE: Sorry, I misread the clock, I thought it was one o'clock. It just feels like one o'clock.
MR FERGUSON: I'm still comfortable with the course of action - - -
JUSTICE ROSS: No, that's fine. So everyone content to come back at quarter past?
MS BURKE: Yes.
JUSTICE ROSS: There were two matters that I wanted you to have a think about, Mr Ferguson, just bear with me for a moment.
MR FERGUSON: Yes.
JUSTICE ROSS: If you look at the ACTU's submission of 9 May it deals with the principles applicable to the review at paragraphs 7 to 20. I just want to see whether you take issue with any of those.
MR FERGUSON: Yes.
JUSTICE ROSS: The last one was I can't recall whether - normally - well, with the other experts they indicated they had read and agreed with the Federal Courts practice note in relation to expert witnesses. I don't think Ms Toth did that.
MR FERGUSON: No, Ms Toth did not.
JUSTICE ROSS: Right. So quarter past. Thank you.
LUNCHEON ADJOURNMENT [12.15 PM]
RESUMED [1.19 PM]
MR GUNZBURG: Excuse me, your Honour. Your Honour, having heard the closing submissions of the ACTU there's nothing that I need to add to the written submissions that we'd put in, and I was wondering unless there was some matter that you wanted to ask me, or some matter I needed to address you on that I could be excused from the rest of the hearing?
JUSTICE ROSS: No, that's fine. As you wish, yes.
MR GUNZBURG: Thank you.
MR FERGUSON: Thank you, your Honour. Just before I move into the submissions proper, just if I can respond to the outstanding question; we don't take issue with anything in the relevant paragraphs from the submissions dated 9 May as they pertain to the principles governing this review. We don't accept though, there's one – or paragraph 19 raises an issue where the ACTU comment on the concepts of the safety net.
JUSTICE ROSS: Just bear with me for one moment.
MR FERGUSON: I don't think it's an issue that's relevant.
JUSTICE ROSS: I see. Yes.
MR FERGUSON: Obviously to the extent that they say that it's an inherent component, the concept of the safety net, that the conditions be guaranteed and enforceable, that's not an issue that we necessarily accept, and it obviously goes to part of the argument that we're having now about the enforceability of section 65. But I don't think that's relevant to your question, your Honour.
JUSTICE ROSS: No. No. No, I had missed that bit. Yes, okay.
MR FERGUSON: That then just takes me to our submissions proper. Ai Group, as the Bench would be aware, prepared two sets of detailed written submissions dealing with the substance of the ACTU claim; the first dated 1 October 2017; the second is our final submission filed on Tuesday. The two submissions do need to be read together; one doesn't replace the other.
JUSTICE ROSS: No, I saw that. Yes.
DEPUTY PRESIDENT GOOLEY: Very disappointed to see that.
MR FERGUSON: To be honest though we thought it might be better than annotating the 300 page something submission as a faster way home.
JUSTICE ROSS: No, it's a difficult decision. Yes.
MR FERGUSON: Yes.
JUSTICE ROSS: No, but when I raised it it was more in hope than expectation, Mr Ferguson, so ‑ ‑ ‑
MR FERGUSON: Timeframes, your Honour, as well.
JUSTICE ROSS: Yes.
MR FERGUSON: For clarity though we filed that third submission dealing with the survey as well, dealing with the objections.
JUSTICE ROSS: Yes. Yes. Yes.
MR FERGUSON: Just I suppose to assist the decision we rely on that to the extent that it refines our position in relation to the reliance we place on the survey.
JUSTICE ROSS: Yes.
MR FERGUSON: To the extent that there's any inconsistency with our previous submissions that overrides it. That brings it to all I intend to do today. The Bench will be pleased to know, I don't intend to traverse the full detail of our respective submissions, and I note the smiles.
What I want to do is briefly characterise the claim that's been advanced; (2) and then address the jurisdictional objection that we've raised, and then (3) deal with some of what's been put against us in the final submissions, and in doing that amplify some of our key overarching arguments that we put in opposition to the claim. In doing that of course I don't intend to demur from any of the detail that we've put forward.
So turning to the claim, the claim obviously has had various iterations. In its final form the claim does various things, and at page 11 of our October submissions we've summarised the key elements of the claim as we understand it. But I think it's fair to say that at its core the claim attempts to insert a mechanism into awards that affords employees an absolute right to modify their hours so that they are working on a part time or reduced hours basis to accommodate their parenting and caring responsibilities.
As we read the clause it appears to enable employees to access a unilateral right to dictate their days and hours of work. There appears to be a bit of a tension between the parties as to how the clause is interpreted. I think the ACTU suggests that there is some fetter on employees' rights to do that. I must say when we read the clause we can't see in the words how that arises, or how it could sensibly be applied, and we've addressed that in some detail. But we're obviously responding to the claim and the terms that we see rather it rather than ‑ ‑ ‑
JUSTICE ROSS: I suppose that depends how you characterise different parts of it. There's a requirement for notice; it's about reduced hours, et cetera. But I think it's common ground that at the end of the day it would be an employee's right to access reduced hours if they see fit within the qualification requirements and subject to the provision of the notice.
MR FERGUSON: I think that's right. I think the argument is about the extent to which we say the clause permits people to access any hours, and, look, I think part of that turns on the argument around the word "position" and the way that's defined, and we make the point that it probably proceeds on assumption that people have certain guaranteed set parameters around their hours. And it's one that we say it simply does not hold true across the award system or the way in which work in Australia is actually structured, and it's a very significant assumption, but it goes to one of the clear objections we raise, is that, look, obviously this clause, if read the way we say, and it's the only way we say available to the Commission to read it, it would give rise to a whole raft of problematic outcomes, and I won't take you through them, but we've obviously listed them in our submissions.
DEPUTY PRESIDENT GOOLEY: Certainly in relation to that the ACTU attempted to explain that, but I certainly understood the claim is to mean that, for example, to meet my caring responsibilities or child care responsibilities if I was on a rotating shift and that no longer worked that I could elect not to be on a rotating shift and say, for example, go on to afternoon shift or day shift because that's when child care was available.
MR FERGUSON: That's the way we've seen it, and that's part of the sort of issue we've raised, and the problems that would flow, and I think some of our witnesses have dealt with, is that people, for example particularly potentially selecting, you know, shifts that attract penalty rates or, you know, selecting hours outside of the operational ‑ ‑ ‑
DEPUTY PRESIDENT GOOLEY: I thought the selecting hours outside of when the business was operating was probably an argument going too far.
MR FERGUSON: I think if you take into respect that it seems to be a ludicrous outcome that's right, but the difficulty is that we see that it's available on the words, and this isn't trying to be just a cute point, obviously wording can be amended, but the problem is it's hard to identify what other sensible parameters there are on the clause, and the submissions just don't get you there.
Again, obviously what we say is particularly striking about the proposal is that it's fundamentally unfair in our view, and unworkable in the sense that it doesn't provide an employer any capacity to refuse a claim. There is no requirement for agreement in any sense. That, is the element we say, gives rise to the possibility that it could result in various unfair and as I put, unworkable outcomes for businesses.
Obviously, the introduction of an award clause that simply allows employees the capacity to pick what hours they will work, is in our view, a radical departure from the way awards currently regulate hours of work. Indeed, we say it's a fundamental shift in the way work is commonly structured in Australia and has the very significant potential to disrupt employers.
We have in our submissions, particularly at chapter 8, set out the very good reasons why employers need to retain a degree of control, or prerogative over the hours that work is performed by the employees. At pages 65 to 67 we have also addressed the traditional reluctance of the Commission and its predecessor institutions to unnecessarily intrude in such matters.
These are the kinds of considerations that we say weigh in favour of the Commission taking a very cautious approach to considering the kind of claim that's being here advanced. Obviously, we say that the arrangement of work is a complex matter for many employees; there are various competing considerations that need to be taken into account. Things like allocating work to a pool of labour when rostering people effectively. Complying with occupational health and safety regulations and other regulations that may apply. We say there are very good reasons why managers of businesses need to have some ability to manage the hours worked by their staff in order to accommodate all of those sorts of complex considerations.
I just want to comment briefly on the nature of the proceedings. At paragraph 2 of the ACTU's final submissions, they indicate that the submissions are, and I'll quote:
Limited to addressing matters raised by the employer parties that participated in the evidentiary (common issues) stage. The ACTU reserves its rights to address award specific matters at a later stage of proceedings.
Now, I might be jumping the jazz here, but we're concerned that what the ACTU is seeking to do is invite the Commission to conduct further proceedings to consider whether the extent to which their claim might be workable within the context of particular awards.
In essence, we say the time for that is now. The ACTU, as the proponent of the claim should shoulder the burden of establishing for the Full Bench that a merit case is made out for its variation to each of the awards that it claims should be varied. We say part of that should be bringing sufficient evidence to establish that the claim would be workable in the context of each of the awards, the subject of the claim.
We say what it should have done, or the Commission should expect of it, is that it would bring evidence, for example, about the operation of all of the relevant industries that are the subject of their claim so that the Commission can make an assessment amount the workability or the proposal. In the event that they don't meet the threshold or bring in sufficient evidence to enable the Commission to make an assessment that it is necessary to vary the awards in the terms sought, then the proper course of action is to dismiss the claim.
JUSTICE ROSS: As you say, you may be jumping at shadows. It depends what's being put really. It would be consistent with other review proceedings if we adopted a sequential approach of determining, for example, the domestic violence leave matter of determining an outcome, and then providing draft variation determinations and then there's an opportunity for the parties interested in particular awards to raise an objection as to why that matter shouldn't apply to them.
I'm thinking also of the annual leave proceedings. There are - well excessive leave is a good example. That there's a broad proposition adopted but for various reasons, it may not apply with the same effect or may not apply at all, or may need to be modified to suit the circumstances of a particular sector.
But from what you're suggesting, that's not how you've understood what the ACTU is putting. They're putting a different proposition, is that right?
MR FERGUSON: As I understand it, I think they're not necessarily proposing to respond to all industry-specific submissions and so forth. I think it's perhaps a disagreement over the nature of common issues proceedings. We say the fact that it's been listed as a common issue, doesn't relieve them of the role as to the proponent of the claim for making out a case in justification to the variation.
I take your point, your Honour, about the way all these review proceedings have unfolded, but it is not the case that there's necessarily been a second opportunity if you will, for the parties to make good their claim. If you think back to the annual leave case, for example - - -
JUSTICE ROSS: More than one opportunity in the annual leave case; I think it took us about three years to finalise it, so.
MR FERGUSON: I can't forget it.
JUSTICE ROSS: Look, I mean with the other side of it inasmuch as a number of employers chose not to run any argument in the first tranche of decision and the hearings leading up to it. If anything, they took a contrary position, that is, they supported the general employer claim and then they would come along later during the award process and mount an argument as to why it shouldn't apply in areas.
MR FERGUSON: I think the issue is - the difference is that here, in the annual leave of course, what unfolded is not that a claim of the parties was the subject necessarily, of subsequent proceedings, the Commission formed a view that something should be done.
JUSTICE ROSS: Well, that's true. No, I follow, yes. I mean if we formed a view in this case that was a provisional view, not within the contemplation of any of the parties then, that might be the process. But you're saying here, the ACTU is contemplating something different. It's another bite of their claim on an individual basis.
MR FERGUSON: Yes, assuming there's going to be an award by award process and I don't think that that assumption can be made.
JUSTICE ROSS: I see, yes.
MR FERGUSON: We say that it's the proponents of the claim, and - - -
JUSTICE ROSS: Yes, you'd only get to an award by award or an examination if there was a determination in your favour or some sort.
MR FERGUSON: Yes, that's right.
JUSTICE ROSS: No, I follow.
MR FERGUSON: I tread carefully.
JUSTICE ROSS: Yes, so having run the case here, they're not then going to have the option of mounting a case against the individual awards.
MR FERGUSON: Or simply saying well, look we think - it seems to be a plea almost for a decision that in principle they might be right, but let's see whether that's workable in the individual industries. In practice the way that then sort of flows is that it puts the onus, to a degree, back on the employer parties to say why it's not, in practical terms. And there is a real difficulty with that, because people do have finite resources and so forth, and this is a review, it's not a party/party matter in the traditional sense. That, in our sense, puts a greater emphasis on the need for the ACTU to make out their case, as the proponents of the claim.
Now when I raise that, I make the point that there is essentially no evidence about the nature of operations in almost all of the awards, the subject of these claims. The difficulty for the Full Bench is that it's not able to assess the impact of the claim in all of these industries. We say, an inevitable conclusion should be that a case hasn't been made out and then therefore the proper process is to reject the claim.
I suppose that decision is what partly informed the exchange I had with yourself, your Honour, earlier this morning. I accept that the Commission is bound to grant a remedy in the terms sought, but we say that it should be wary about necessarily accepting a proposition that something fundamentally different is warranted and going down that path.
We say that if the material - if the case just hasn't been made out, the option available and the option you should take is to reject the claim, because, as I've stated before and I don't wish to labour this point to any great degree, the way the material has been dealt with, the evidence and so forth, is coloured by the nature of the claim that's advanced. You can't necessarily place a particular weight on all of that in justifying some fundamentally different proposition.
But I accept that we could go round the merry go round again, if the Full Bench decided that that's something it was inclined to do. We just urge it not to.
That then takes me to the jurisdictional objection that we've advanced and we have set that out carefully in our written material and the Bench has obviously grappled with it so I won't go through all of that in detail. Look, our case is, in essence, that we say pursuant to section 55 or as contemplated under section 55(1) the clause proposed would exclude part of the NES.
JUSTICE ROSS: The relevant part is the employer's right to refuse.
MR FERGUSON: Well, more than that. Obviously the Bench has already been taken to two of the key decisions in relation to this issue, the NES inconsistencies decision which contemplated an award clause - sorry, an agreement - in the award clause including the NES in circumstances where it's practical operation negates the effect of the provision of the NES. Now we say that decision or the circumstances of that decision are squarely analogous to what we're dealing with here. I think if the Bench recalls, that was a situation where we were looking at an award clause that dealt with annual leave entitlements and the recognition of service for that purpose for transferring employees, and the clause had the effect of requiring the new employer to recognise prior service, but an element of the NES in effect and I'm simplifying, allowed the new employer to choose not to. That decision was that in practical effect the operation of the NES was negated. Now we say that's very similar to what happens here and the starting point for that consideration is really what does section 65 do.
We say that what section 65 does is create a framework if you will by which employees can seek to access a change in their working arrangements, it affords them in that context a right to request and then it regulates the way that request is dealt with. Now - - -
JUSTICE ROSS: Is that the fundamental difference between the position you put and the position the ACTU puts, that you see the right to request is not to be seen in isolation, rather it's to be seen as a conditioned right within the framework of section 65. So you look at the NES provision as a whole and you characterise it that way, then you ask the question is that provision negated by what is being done in the award. Whereas the ACTU focuses on the nature of the right to request, that is what does the employee get out of section 65, and characterising it that way that forms the basis of their submission that their building on that right to request by - well either - depending on your objectives, strengthening it or making it an absolute right. Is that the point of difference how you characterise 65?
MR FERGUSON: I think that's right. It is essentially but we will come to the point about exclusion of a right as well but we say the first and primary position is that you have to have regard to the totality of what section 65 achieves, and what the policy intend underpinning that - - -
JUSTICE ROSS: Just on your other point about the nature of the right, do I take it that there you would contend that when you look at the exclusion of an NES provision or part of it, you're not simply looking at that part of the NES that confers a benefit on an employee. You're looking at it more broadly including those parts of the NES that confer obligations on employees to provide evidence, for example, or on rights of employers to require evidence, or in this case the right to refuse on reasonable grounds.
MR FERGUSON: Yes, if it negates the operation of any of those elements then it falls foul of the - - -
JUSTICE ROSS: Yes. Is there any - I don't - well, I think the answer to this might be no, but any of the - I don't think it came up in the NES inconsistency case, Canavan probably wasn't dealing with it but is there any decision that deals with that aspect where the negation of the NES has been in whole or part a negation of an employer right?
MR FERGUSON: I'm thinking through the award flexibility provision on just how that landed.
JUSTICE ROSS: That was really dealt with by noting the interaction between the two and yes, I think that's touched on in either your submission or ACCI's.
MR FERGUSON: I think ACCI raises the point.
JUSTICE ROSS: Yes.
MR FERGUSON: But the point is, is all those proceedings there was a course of action that was pursued which I think there was no serious argument about the proceedings, because we found the fastest way home but - and this is the point ACCI would take up in that it's readily different to this one in the sense that once you - and they advanced this as well I think in a way - once you go down the path of applying the clauses that they're proposing, you never get to the request situation. So you can't think of some sort of another way around it. An employee in practical terms is never going to make the request if they can just issue the notice, and so you would completely circumvent the scheme of the Act.
JUSTICE ROSS: Yes. No, no, I follow. Yes.
MR FERGUSON: But then we say if you circumvent any element and on the negate adopting the logic of the NES inconsistencies decision, we say look it negates the scheme but it also negates section 65 in terms of the right, and we characterise it in our submissions as a right of an employer. Then there is the Canavan approach if you will which you know was focusing there on the extent to which it was a matter of form only in which they had to exclude or whether removing a benefit or an entitlement - - -
JUSTICE ROSS: Yes, whether it was directly or indirectly.
MR FERGUSON: It was a slightly different issue that we were focusing on if I recall that case.
JUSTICE ROSS: Yes.
MR FERGUSON: But the issue there was we say the logic would still hold true and this is perhaps more contentious, in that we say that there are certain benefits that (indistinct) employers from this section of the NES, and we say that there is a right if you will to refuse, and we tried to develop that in our written submissions, and I won't take it much further. The other point is we say there is some credible benefit flows from the obligation in 65(3) that talks about the content of the notice. So it requires that the employer be given an explanation of the reason why they seek the change.
Now we say there is a real benefit in that for employers because they can potentially identify another course of action or agreed outcome that is amenable to both, and I think the evidence bears that out. Under the clause proposed, if you go down the ACTU's clause, there is no obligation to provide that relevant information. They need to provide some evidence, and it's close, but it doesn't go to that and in that sense we say that benefit is also excluded, but it's a smaller point obviously, your Honour.
That's all I was going to say on exclusion but I was going to move then to supplementation, unless there are any questions. In relation to supplementation we obviously make the point that there is a sentence in the NES inconsistencies decision that suggests that in effect, and I'm paraphrasing now, that wherever it detracts from an entitlement in the NES then that can't be supplementary. I don't want to take that too far. Obviously there is potentially a significance it throws in 55(7) which is that if a term is supplementary, in effect it doesn't contravene subsection 55(1), but there obviously seems to a tension with the Full Bench's decision in the NES inconsistencies in relation to that point.
We say it's not supplementary anyway, so we don't really get there.
JUSTICE ROSS: Your submission is more that it doesn't supplement so much as change the entire character of the provision.
MR FERGUSON: That's right and we try to reference that in terms of the interpretation that should be put on the word supplement. Obviously we engage with the ordinary meaning and so forth of the words and we accept that notions of building on and completing a whole, if you will, might be consistent with the word supplement as used in that context but we also point to the scheme of the Act and we point in particular to the notes, and the second note in particular below section 55(4), which I'll go to briefly.
The note there sets out examples of supplementary terms or terms to be included as supplementary terms. What we say there is that lends some potential support for the proposition that it's intended to be a connection between the supplementary term and the provision of the NES. I'm pausing for a moment while your Honour turns to that. I know it's a note that's included and I can only make so much of that. Our primary submission is of course that the word supplement when read in the context - - -
JUSTICE ROSS: Yes.
MR FERGUSON: And in light of the ordinary meaning people propose is it includes that there needs to be a connection and it's not - it doesn't capture a provision which would detract from the NES.
Now what we say in this regard is clearly the clause proposed by the ACTU is not completing the NES, it is not actually rectifying a deficiency in the sense of filling a gap in the NES. It's intending to wholly replace the NES. They've proposed their own independent scheme and that's the crux of the argument and in part that's why we - what we use to rebut the arguments around their reliance on the term deficiency in the dictionary. We don't say that - well firstly we say that there is a value judgment or a merit based argument about whether the NES is deficient and we obviously say that it is not. It is different to the outcome that they say should apply but we say that is proper and it is an appropriate outcome but it's not deficient so it's enlivened that word. But that's just one word plucked from the dictionary.
JUSTICE ROSS: Yes.
MR FERGUSON: And taken out of context in our view.
JUSTICE ROSS: You say it's not so much a deficiency as it reflects the Parliamentary intention.
MR FERGUSON: It's a difference.
JUSTICE ROSS: Whether one agrees with it or not is a different question.
MR FERGUSON: It's a difference, and you can't characterise it as a deficiency. That's all I was going to put about the jurisdiction unless the Full Bench had any questions?
JUSTICE ROSS: No, that's all right.
MR FERGUSON: Now I just want to make some comments in response to what we see to be one of the key arguments of the ACTU in support of their proposition, and that's there are deficiencies in the current safety net. As I said, the central tenor of their justification for the claim is that existing regulation regarding family friendly working arrangement is inadequate and is failing to assist employees to balance their work and family responsibilities.
We say that the first difficulty with this is that it is not borne out in the evidence. We've dealt with that evidence in detail in our written submissions and I won't hope to deal with all of that on my feet, but we say that what renders the argument particularly hollow is the statistics relating to the operation and utilisation of section 65. Most pertinently we refer to the employee survey which forms part of the AWIRS study and it is referred to in particular by Professor Murray. That indicated that 85.8 per cent of section 65 requests were granted in full. A further 12.1 per cent of requests were granted with changes, and only approximately two per cent of employees who had made a section 65 request had their request refused. Obviously that is a very small amount.
It's also Dr Murray's evidence that the vast majority of all requests for flexibility including section 65 requests and informal requests are granted as well. And there's no evidence that we can see in these proceedings of some kind of prevalent and systematic practise by employers of failing to meet the requirements of section 65. That just isn't evident from the material. We can't identify in the evidence any situation where an employee has had their formal request refused in the absence of reasonable business grounds, and there might be an argument about the business grounds, but we can't see that that's clear in the evidence at all.
Given that context we say that it simply cannot be held that it's necessary in the relevant sense to amend all awards to address some kind of perceived deficiency in the operation of section 65. It might be put that section 65, I think it is, is inadequate because a proportion of employees aren't successful in obtaining the precise form of change to their working arrangements that they were initially seeking. In response we say that it simply can't be reasonable or fair to expect the safety net will accommodate every employee preference in relation to their working hours, and the fact that it doesn't necessarily result in that isn't evidence or it doesn't establish that there's some deficiency in the safety net.
We say the real benefit of the approach adopted under section 65 is that there is a capacity for the needs of an employee and the employer to be taken into account. It balances the interest of both parties and fosters a degree of discussion and indeed we say cooperation in relation to such matters.
We've addressed the merits of section 65 in chapter 10 of our October submissions and more specifically at pages 90 through to 125, so I won't go through those in detail, but I make the point that this degree to which it balances the interests of the parties or creates a mechanism which balances the interests of the parties we say is entirely consistent with the modern awards objective and that consideration of fairness under that objective which requires a balance of interests of both employers and employees.
That then takes me to another key major criticism that's levelled against the scheme of section 65 and that it's not a real right, because it's not enforceable, as the ACTU puts it. We deal with this issue at pages 104 to 106 of our October submissions. The essential short point is that the legislature has made a deliberate effort to limit the extent to which employers should be subject to penalties in relation to the decisions they make in relation to the application of section 65(5), and also limits their exposure to dispute proceedings. And I say limit their exposure to dispute proceedings deliberately because of course when we look at, I think it's, section 739 from memory, there is still a capacity for the tribunal to deal with disputes in relation to these issues. It's just that it's tempered in some respects by certain things. One is that the parties have to agree to a contract of employment, enterprise agreement or other written agreement. But the legislature has quite clearly turned its mind to this issue, and we say it is highly inappropriate for this tribunal to now try and seek a way to circumvent the operation of the scheme of the act as it's been established, and it's not something that this tribunal would entertain.
I think it's put that there is some kind of gap in the NES. The point I'd make is there isn't a gap in the NES; this is a provision of the broader scheme of the legislation about how disputes and so forth should be dealt with. That's not a gap in entitlements of the safety net per se, and we say in any event that it's quite relevant for the Full Bench to have regard to the broader scheme of the act in its consideration of what is a fair and relevant safety net, and we say that when you do that it tells a view that, well, nothing further is required and that matters should operate as they're contemplated by the legislature.
But in any event I think the Full Bench has already raised the issue effectively with the ACTU that if you look at the dispute resolution provisions within awards that doesn't deliver what they did historically in any event. It doesn't deliver a capacity for an arbitrated outcome in all instances, and I think that goes to what they make of the parental leave test case in 2005. Yes, that operated in a different context; one where there were mandatory dispute resolutions, but the reality is that the statute has changed, and that colours what is an appropriate remedy now. That is one element of it, but the other elements of it, and I'll come to that, is that of course there are now a raft of enhanced entitlements for employees compared to what there were at that stage.
That really brings me to the next point that I want to raise, which is that any assessment of the adequacy of section 65 can't be considered in isolation. You can't just look at the way section 65 operates to make an assessment as to whether it's an appropriate answer to the need for people to balance their work and family life. The modern awards objective requires the Commission to ensure that the awards together with the NES constitute a fair and relevant minimum safety net. Accordingly, we say regard must be had to the terms of modern awards within the system and NES as a whole in considering this application.
For that reason at chapter 10 commencing at page 89 we set out various aspects of the modern award system together with NES which operate to assist employees to reconcile their work and family commitments. That commences with a consideration, a very detailed consideration, of the legislative scheme associated with section 65 and in part we say that that section is a complete answer to the claim but we nonetheless go on to identify all of the other elements of the safety net that assist employees to balance their work and personal lives, and, look, without labouring the point, it includes the availability of individual flexibility arrangements under awards; the existing award regulation of hours of work, the protections regarding maximum hours of work under section 62 of the NES; the model consultation clause regarding changes to hours of work and regular rosters; the nature of award provisions regulating part-time employment and some of the historical reasons for their evolution; the availability of casual employment; time off in lieu of overtime; make up time; entitlement to annual leave; personal carer's leave; compassionate leave; parental leave and return to work guarantee. And we include also long service leave.
I just want to make the point that when consideration has been given about the extent to which the ACTU is trying to restore something they've lost from the parental leave case as a consequence of the statutory changes, many of these entitlements exceed those which employees had access to previously. So it's not that they're just trying to restore what was there in the past; they're just trying to select one element to restore if you will.
Beyond that we also say that there are a raft of additional regulatory protections that can benefit employees with parenting and caring responsibilities that the Commission should take into account when it's considering the claim. We point in particular to the unfair dismissal regime, the general protections regime, and also anti-discrimination legislation, and at page 177 of our submissions we set out the relevant utility of all of those sorts of protections for the purpose of this case.
In response to what was put by the ACTU in their final submissions, obviously there is a bit of a contest about the extent to which these regimes have deterrent effect. We contend and our experience is that they do. They guide employers' approach to responses for request of flexibility. The ACTU obviously take a more pessimistic view about those things but in any event, the fact that there are some claims brought under these sorts of jurisdictions doesn't mean that they're failing inherently. It simply means that obviously some employers may fall foul of what's required but the same could be said if the award safety net is regulated. It may be that some employers still fall foul of it. It doesn't detract from the (indistinct) the regulation of various (indistinct). The potential is we say it's relevant to consider all of these matters in deciding whether or not it's necessary to include the proposed clause in the safety net.
The other point we make is that some of these mechanisms should provide part of the answer to the ACTU's alleged problem with discontented non-requesters. Now they have forward protections which should be some comfort to those persons. Now if they're not, if employees still feel that they're not able to come forward, and we don't accept that there's necessarily a significant portion who feel that way, but the answer isn't to establish any right. The answer is education in relation to the existing regime so that that concern is overcome.
That then brings me to a response to part 5 of the ACTU's final submissions which dealt with economic considerations. The ACTU there seeks to set out the benefits of family-friendly working arrangements to employees, firms and the national economy. They rely very heavily on the evidence of Dr Stanford. We dealt with his evidence in our final submissions at paragraphs 99 to 127. I don't propose to go through all that detail but will note that Dr Stanford's evidence did not involve any detail in consideration of the impact of the specific claim advanced by the ACTU and none of the research that he relied upon related to the ACTU's proposed clause, and he himself had not undertaken any modelling or analysis based on that clause. For those reasons we say significantly less weight can be given to his evidence.
His evidence or the weight that can be attached to his evidence is further undermined by the fact that while his evidence makes reference to notions of family-friendly work arrangements, it's not defined anywhere in his report. We don't know precisely what he is actually referring to and whether or not he is referring to arrangements of the type contemplated in the ACTU clause or some sort of other arrangement that might require agreement with the employer.
I just want to deal with two other propositions put by the ACTU in chapter 5 of its final submissions. The first is the extent to which the ACTU relies on the National Wage Case of 1991 in which the ARC dealt with the application of the structural efficiency (indistinct). The ACTU asserts in effect that that decision demonstrates the correlation between flexible working arrangements and improved productivity. But as we said at pages 29 to 30 of our (indistinct) submissions, that decision did not contemplate part-time employment in the form here sought by the ACTU. That is - - -
RECORDING MUTED [1.59 PM]
The ACTU consequently appears to suggest in their final submissions that therefore Ms Toth's evidence about the imperfect substitution of labour and the detrimental impact that this will have on allocated efficiency, misses the point.
The fact is that just because an employer might presently be faced with an imperfect substitution of labour currently, that doesn't support the grant of a claim which would only compound that problem. It doesn't really take them anywhere in that sense. We say for that reason, Ms Toth's evidence regarding the complexities underpinning labour substitutability should not be disregarded for the purposes of these proceedings.
That then just takes me to some final remarks I want to make around the problematic nature of the operation of the clause. Again, we've set that out in great detail in, I think chapters 13 of our submissions, pages 385 through to 313. Most of that, or large parts of that have been ignored and we think that is a real problem for the ACTU in terms of the claim they've advanced. Obviously chief amongst our concerns is the possibility that it could result I unreasonable outcomes for employers and I don't think I need to labour this point.
We've set out in our submissions some examples of that. Obviously, we say the survey also provides some insight to the Commission as to the sorts of problems that could arise. We've already put submissions about the extent to which we rely on that, but it does give you some really relevant matters for consideration of some sectors where there is evidently a problem for some employers.
DEPUTY PRESIDENT GOOLEY: This might be a question for Mr Ward too, bearing in mind what Ms Burke has submitted about the VACC survey; I know you're dealing with the joint employer survey at the moment, but does anyone rely on that?
MR FERGUSON: The VACC survey? Well we don't.
DEPUTY PRESIDENT GOOLEY: All right, well that's fine. That's all I need you to say. I guess if anyone else does rely on it, they'll say something about it.
MR FERGUSON: I don't want to say a lot about the survey. Obviously, we've undertaken that in an attempt to gauge the views of employers about this, and to provide some material to the Full Bench in a context where very little has been put before it about the practical operation of this. We've sought to do that in the most efficient way that we could and within our resources.
We say that to the extent that we particularly rely on the qualitative data, there is no reason why the Commission can't have regard to that, and it is useful information about the sorts of problems, but it's also useful information about employer perceptions of the claim. That is also a relevant consideration.
JUSTICE ROSS: Do you accept that if you look at the nature of the material we have before us, there's the lay evidence which also provides some insight into the particular issues encountered, both on the employee and the employer side? Then there's the - it's still regarded anecdotal insofar as it's the view of one individual or business or - but nevertheless provides some assistance. The survey evidence can similarly be characterised as anecdotal of descriptive, but on the face of it, we may apply less weight to that material than to lay evidence, because the lay evidence was capable of being cross-examined and questioned.
You're sort of looking at it as a, I suppose, levels of probative value. Do you accept that as a general proposition?
MR FERGUSON: I think I have to accept that because of the facts that - - -
JUSTICE ROSS: Because that's what's put again.
MR FERGUSON: I don't quibble with that.
JUSTICE ROSS: The ACTU puts it more strongly; they say we should have no regard to it, but leave that aside for the moment. At the heart of that proposition is well, some issues around the design of the survey and it's put that we couldn't be satisfied that the responses were in relation to employers. Leave that aside for the moment. The proposition that did resonate, at least with me, is the idea that well, it's accepted that's what they've said, but of course there wasn't the opportunity to test them on that as to the context in which they made it and that seems to be a fair enough point.
MR FERGUSON: I think that's a point that's raised in many of these proceedings around the use of surveys. I mean, I note that some of the other proceedings - and I don't want to go down this path to any great length, but there's been surveys advanced where frankly no one who even conducted the survey has been put forward and they've been relied on by previous Full Benches to some extent. I think for example, in the casuals' case in the ACTU survey that was advanced.
JUSTICE ROSS: I think this is the danger of all parties sort of engaging in a bit of rock throwing, if I can put it that way.
MR FERGUSON: And I won't take it further.
JUSTICE ROSS: I don't say that with a criticism of the ACTU, but similarly, if we take the point about looking at literature reviews, if you haven't call the authors of a particular article, then what do you do with that? Well, I think no one would escape scrutiny, if that was the test.
MR FERGUSON: But I think some of the same issues, and it's not to say that any of this material is of no weight. I mean, it's the nature of the Commission in these proceedings, that it's afforded a broad right to inform itself in various ways, and we might some to that in relation to Ms Toth. It's entitled to have regard to all of this material and it's of some weight, but we accept some of the criticisms, or limitations that are raised in relation to the surveys and them not being available for cross-examination. But it at least must raise the spectre of these problems for the Commission where there's no evidence to the contrary to suggest that it's workable.
It is a relevant consideration and I come back to that perception point. It probably shows to a greater degree the perception of employers, even if to an extent, the views about how (indistinct) is currently questioned, perception is relevant. Because if we think about the evidence of Professor Stanford. He talked about the extent to which employers look at various flexible forms of work, if I can call it that, in order to avoid the scripture - and I'm paraphrasing - of award regulation.
If you're faced with a survey with a very large number of employers who are livid about the prospect, one might say that they will take obvious and logical steps to avoid that regulation, if it were in place. That is a real concern.
COMMISSIONER SPENCER: The difficulty with that is, is it's likely that we would have presented exactly the same kind of evidence when the parental leave case - the maternity leave case, there was a perception that people couldn't deal with the idea of pregnant women going off and being able to have a right to return to work. I'm not sure how far it takes us.
MR FERGUSON: I'll confess I can't recall - - -
JUSTICE ROSS: It's probably before your time, Mr Ferguson, thankfully. Maybe Mr Ward can assist.
MR FERGUSON: I don't think these things should just be lightly ignored. I mean this point came up in the casual's case and perhaps we have this view because we engage with employers and we know the reality, but I don't suspect you'll accept that from the Bar table, but these are real issues for the Commission to grapple with. In the absence of evidence that it won't be a problem, is a problem, and it's also Professor Stanford's evidence that employers are using these forms in order to avoid some of the strictures of award regulation.
It's squarely on all fours with the logic, but that only takes me so far; I'm not making that point.
JUSTICE ROSS: I think we can accept that the ACTU's proposal amounts to a significant shift in the safety net and the way these issues are dealt with. One of the questions becomes whether it's a shift which we can't make because of 55 on, or on your submission we shouldn't make for the reasons you've advanced.
MR FERGUSON: In additional to the jurisdictional objection. That's right. That then takes me just to a very brief comment in relation to the academic literature and so forth. There is a real limitation on the extent to which that can be relied upon because of the reasons we've said. I don't wish to be cute on this, but we can't go behind and cross-examine people who've undertake this sort of research. Yes, experts were proffered, but often their evidence did no more than cite the academic literature and proffered no opinions about it.
JUSTICE ROSS: Look, it's the nature of cases like this, that you're not going to get an academic study that's going to have closely modelled the claim that's before us. The most we can get is studies that have looked at other issues and the question then becomes can we draw an inference from them, or how does it assist? It's not unlike the material in the annual wage review around the employment effects of increases in other systems in other countries. You look for broad indicative material; you try and find material that is of closer relevance to what you're looking at, but it's not a perfect model where - - -
MR FERGUSON: It won't be perfect.
JUSTICE ROSS: - - - we're in - I mean we're in the regulation setting frame and in that you often don't have perfect information, you're trying to make the best of what you can.
MR FERGUSON: I think that's right and we accept that you can have regard to it. The extent to which you can comfortably form sound factual findings about some of that material is probably an issue, especially when you haven't got clear and we say evidentiary basis for establishing for example that there is a problem under section 65. That's why we don't oppose the Commission having regard to it, we accept it but it can't be put as high evidence that's subject to cross-examination, so that's not cured by putting an (indistinct) in the box and saying there are a heap of articles but proffering very few actual opinions. When we look at the case, that's where it's got to a large degree, and then we look at the lay evidence, couple of sectors, that's the totality of it. We want most of the people agreement covered. It's really not a substantial evidentiary case that's advanced. The only point I'll take you to is Ms Toth. We haven't proffered her as an independent expert in the sense that might be required in say legal proceedings of the Federal Court and so forth, but obviously the Commission is given a wide discretion to receive information. Obviously Ms Toth has in our submission expertise and knowledge and experience that would assist the Commission and of course we've tried to proffer her as a witness in part, because we thought it would be greater assistance to the Commission than myself standing here speaking about economic principles. We say some weight can attach to these measures but no, I can't put it that she has the status of an independent expert witness. She's an employee of the Ai Group but her evidence doesn't, in my submissions, reveal that she has prepared her statement improperly in any way or that she's been improperly influenced by her role with Ai Group. She's been quite forthright in her submissions that they reflect her views and the difficulties. She is an employee of ours but there's nothing to suggest in her evidence that she was improperly guided in that sense.
JUSTICE ROSS: I think a difficulty with at least one aspect of her evidence is there's a statement of an opinion that's conclusory without setting out the factual basis on which it's drawn and leave aside whether Ms Toth's to be regarded as an independent expert or an expert in the employer the party, any expert for their opinion to be relied on needs to expose what the reasoning process is to get to that point.
MR FERGUSON: No, no, I understand there is some reasoning. As I said we - - -
JUSTICE ROSS: But I understand the part of her evidence that you're particularly going to in relation to the allocated efficiency et cetera, is more in the way of general economic theory material as well.
MR FERGUSON: That's right and Ms Toth raises those in the sense that we might otherwise raise in our submissions for the person to have regard to.
JUSTICE ROSS: Yes, yes.
MR FERGUSON: And might not give them the weight - or the same weight as evidence. It is still a relevant consideration, the same way all these articles that aren't proffered in the same way are relevant considerations.
That then just - there are couple of concluding remarks about the operation of the clause. I won't labour through all of the bits we've raised but there are a couple of major issues. One is for example the way this clause will deal with remuneration of employees. There is nothing in the clause that enables the remuneration of an employee to be reduced on a proportionate basis reflecting the change in hours that would flow automatically.
Now it might be put that well - and I think it is put, it just gets prorated in the usual way. That there might be some force to that where people are paid by the hour and their remuneration is commensurate with that. But of course it doesn't deal at all with the very common practice in industry of people being paid above award rates of remuneration and potentially annualised salaries that are in no way calculated by reference to limited to the hours people work. If the award clause were to operate so that people had an entitlement to work less hours, there would be nothing in it to relieve the employer of the obligation it has under its contract to continue to pay the higher or greater amount.
Now there are complexities around all of this and the extent to which the awards can deal with these sorts of issues or should, as a minimum safety net entitlement, but the problem we see is that once you start blundering into this in a sense of, you know, giving people an absolute right to change their hours, you need to have regard to what is going in in the broader relationship, when you assess whether or not it's fair. There is obvious capacity for this to act quite unfairly.
Now these things don't operate in section 65 context because ultimately it's by agreement. The remuneration will be a matter that's considered and agreed upon. You don't get into these complexities. But when you have something like this that is an absolute right, you do. No sensible explanation has been put in relation to these sorts of matters.
The final issue relates to is suppose the definition of parental responsibilities or carer responsibilities and the extent to which the clause is said to grant modified hours in order to accommodate those matters. Now we say there is no clarity around parental responsibilities as a term. Now this isn't a clause that we see as being intended to operate just in the context of say a primary carer who is seeking a modification to their hours because they have no other choice but to attend to these parental activities. It is a clause that I think quite unashamedly the ACTU indicates isn't limited to primary carers, and we can't see anything in the clause which places some sort of sensible restriction around what parent responsibilities might be. It seems that it's put as high as anything that a parent - well it's put tis high but it seems that the way it would actually work is that whenever an individual is undertaking some of activity associated with their child, they might be eligible to seek hours in order to accommodate that.
JUSTICE ROSS: Doesn't the same issue arise in section 65(1)(aa)? I mean what's meant by:
The employee has the responsibility for the carer of a child.
MR FERGUSON: Yes, those of situations arise and in our submission we carefully deal with some of the subtleties around the extent to - well why the change in work arrangements has to arise and here it's even a looser test than they're proposing in the sense that I think it just has - I'm struggling to read through it now. It just has to relate to the relevant circumstances. There's no requirement as such that it be necessary that they seek the arrangement in order to, you know, accommodate those circumstances. These are - you know, section 65 has some of these issues too but it's put into a rather sharper focus when you're dealing with a claim these draw an absolute right to pick your days and hours, as opposed to one where an employer's - the impact on an employer is taken into consideration and accommodated. That's the difficulty that we see in all of this.
Because look, it can't be the case that it's necessary in terms of a minimum safety net that people just be given whatever time away from work - I'm going to put it that way - they want in order to do whatever they wish with their children. Now we're not trying to criticise the ACTU for, you know, trying to assist people to balance their rights but we are dealing with a minimum - you know, their competing obligations but we are dealing with a minimum safety net and there is no real rigor around this. We deal with in particular I think in our final written submissions where we talk around all the sorts of extracurricular activities that might be covered, and I think the union says well everything's covered. They certainly don't proffer an invitation. All I'm coming back to is when you use this sort of terminology, sure to an extent it aligns with the Act but it's for a very different entitlement than what the statutory scheme provides. Those are the submissions, your Honour, unless there are any questions.
JUSTICE ROSS: Thank you, Mr Ferguson. Mr Ward.
MR WARD: Your Honour, I'm very conscious I'm standing between a Christmas drink for the Bench probably so I'm going to - - -
DEPUTY PRESIDENT GOOLEY: I don't think.
COMMISSIONER SPENCER: No, I don't think so.
MR WARD: No, well in that case - - -
JUSTICE ROSS: If only Mr Ward.
MR WARD: Your Honour, then I will be ponderous and laborious.
JUSTICE ROSS: Such are the strictures of public service financing.
COMMISSIONER SPENCER: Hang on, it was a good idea.
MR WARD: Twenty years ago we'd have shouted a drink. Can I deal with some housekeeping first and then deal with the VACC, and try and be helpful but probably not end up being too helpful. The question the Bench raised was does anybody rely on the VACC survey?
JUSTICE ROSS: I was really following from a comment that I'd understood Ms Burke to be saying that nobody seemed to be.
MR WARD: Well, can I just say, we only were asked to act for the VACC to lead Mr Hoang's evidence. I noted the VACC is a member of the Australian Chamber, however to the extent that the VACC have made an independent submission in these proceedings, they did so by way of correspondence on 24 November 2017. I'm not instructed to speak to that but to the extent that somebody might be said to rely on that survey I think it would have to come out of the submission of the VACC on that date.
JUSTICE ROSS: Yes. Yes, all right.
MR WARD: Yes.
JUSTICE ROSS: None of the parties presently before us are seeking to rely on it?
MR WARD: No. No my client's written submissions don't go to it.
JUSTICE ROSS: No, okay.
MR WARD: Sorry, we make an observation that it's broadly consistent with the joint employer survey to the extent that we say that we rely on it, but we haven't gone to it in detail.
JUSTICE ROSS: Yes.
MR WARD: Yes. Do you wish me to answer the question put to Mr Ferguson about the ACTU's characterisation of what is involved in the award review process?
JUSTICE ROSS: Certainly, yes.
MR WARD: Can I simply say this; that we're content with the ACTU's characterisation subject to the following three points: we also are not comfortable with the last and second-last sentence in paragraph 19. We think that goes a little too far. We would probably, and we will do in our written submissions, slightly develop what is the second sentence of paragraph 18 following the penalty rates Federal Court decision. So we're not saying it's wrong, we just might add a little bit to it. And the only other thing I would say is just that we would probably, given that this was written some time ago, possibly update it by references to the preliminary issues decision and possibly the Federal Court penalty rates decision as well, but other than that generally speaking we're comfortable with how they've described the process of the review.
Having dealt with those matters can I indicate to the Bench that in the helpful spirit that my client enters these proceedings we filed on 19 December a written submission which is a consolidated submission, and that submission now replaces in full the submission filed and dated 30 October. We played with the approach of final submission referencing parts of the original. It got very complicated. We thought it was best to condense it into one, and so we've done that. So the only document you have to read on behalf of our clients is the one filed 19 December. Can I say for the record that the submission filed on 19 December is the submission of the Australian Chamber, and the Pharmacy Guild of Australia, Australian Business Industrial and the New South Wales Business Chamber adopt and support that submission.
I'd like in closing to make some very limited points on the question of jurisdiction subject to any questions the Bench have. There's a couple of matters I want to reply arising from the ACTU, and then I'm going to just sum up and try and deal with some matters in reply as I sum up, and I tend to be relatively brief in our submissions.
This morning the Bench provided us with the document which identified uncontested matters and the like, and ‑ ‑ ‑
JUSTICE ROSS: That turned out to be a slightly optimistic assessment of ‑ ‑ ‑
MR WARD: No. I wouldn't ‑ ‑ ‑
JUSTICE ROSS: Anyway, nevertheless.
MR WARD: I think your Honour is selling it short. We got a lot further than we thought. I don't think the world turns on this, but it might be appropriate for me to say this; down the bottom where it says:
The Commission in these proceedings is required to determine whether the claim –
And it's got (a) and (b). Can I just say for abundant caution that we probably put it the other way around, in that it's available in our view to say our claim is grounded in, say, 139.
JUSTICE ROSS: Yes.
MR WARD: The question then would be does it offend 55(1). It's also available to say, well, look, what we are actually trying to do here is supplement the NES. We won't hide from that, actually trying to supplement it, so the claim can be grounded in 55(4), and then the question would be, well, is it a proper act of supplementation and is it not offending 55(1). It doesn't have to be 139 and 55(4) together. You could actually get there through either of them. The ACTU sort of have a bit of a bob each way in these proceedings, and say, well, it's grounded in 139 and if you don't like that it's also supplementary. But you can start with 139 or you can start with 55(4) or you can try and say it's a bit of everything.
JUSTICE ROSS: In some ways you might start with 139, which is what the ACTU does, but you then also have to look at 136(2)(b) and look at the inconsistency ‑ ‑ ‑
MR WARD: Yes. Yes. Yes.
JUSTICE ROSS: ‑ ‑ ‑issue with the NES which, whatever the order is, it's inescapable.
MR WARD: Yes.
JUSTICE ROSS: But at some point you have to look at 55.
MR WARD: That's why I've said I don't think anything turns on it.
JUSTICE ROSS: Yes.
MR WARD: It's just we would probably say you'd go (b) first and then (a) rather than (a) first and then (b).
JUSTICE ROSS: Yes.
MR WARD: That's all I'm saying.
JUSTICE ROSS: Yes. No, I follow. Yes.
MR WARD: Yes. Can I make a number of observations in short about section 65 and some of the questions that fell from the Bench earlier today? There seems to have been a fair amount of focus on is the NES for the benefit of employees; is it for the benefit of employees and employers. Can we make these observations: the legislation as a whole regulates employment relationships and it regulates the relationships of national system employers and national system employees, and in doing that it creates a scheme of rights and obligations that relate to those two parties to the employment relationship. The act through its objects reinforces the notion of that, particularly in section 3A. It's not appropriate to concede that the NES is simply there for one party to the employment relationship. The NES, depending on which part you are looking at, creates a set of rights and obligations that might relate to one side, both sides, or the other side.
DEPUTY PRESIDENT GOOLEY: But that's not how the act describes it. I mean, doesn't the act describe the need for minimum standards being applied to employment of employees?
MR WARD: It does describe it as that but when one looks at the rights and obligations that the NES establish it establishes rights and obligations for both parties to the employment relationship. If you take section 65 as the example the right it establishes for the employee is the right to request, and it creates a class of employees who have that right. The obligations it places on the employer is then to receive that request and to consider it and to respond to it, and the obligation it places on the employer conditions how it's allowed to actually answer the request, that is, it can only do so on reasonable business grounds.
So when we say, as we have in our written submissions, I don't take you to them, that the claim negates parts of section 65, we would say it practically negates 65(1), (3), (4), (5) (5)(a) and (6) in that practically speaking if you can demand what hours you work then the very scheme of 65 is negated starting from "I have a right to request. I no longer need to bother with my right to request. Why do so?". So I just wanted to be clear that our anxiety around the notion of negation is not purely about 65(5); it's a broader concept than that.
The last point I wanted to make is simply this; 55(4), and I won't labour this, because it's been dealt with at length in all parties' written submissions, 55(4) allows for some very precise things, and it basically provides two gateways and then a test that has to be applied should you get through the gateway, and it would appear that nobody is arguing that 55(4)(a) is relevant here. It appears that, either as a primary submission or an alternative, the ACTU are relying on 55(4)(b). It seems to us that the Bench in these proceedings are being asked to determine what constitutes supplementation. I don't intend to go into it in any more detail than we already have; we've dealt with that in our written submissions, Mr Ferguson's dealt with it in his. But the question is simply, is this a process that in effect detracts and negates part of the NES, can it properly be said to supplement it?
Obviously, our view is, the answer is no. The ACTU say, well if you only think about the NES from the perspective of the employee, if you only focus on, in particular, 65(5), they say then what we're doing is supplementation. But we think the negation is broader than 65(5) and we think that any act of negation demonstrates that it can't be said to supplement. Can I explain some examples of what would be a valid supplementation of 65?
JUSTICE ROSS: Is this by way of making the distinction between what supplements versus what in your view - or as Ai Group puts it, is really changing the complete character of the provision?
MR WARD: Yes, and I don't do this to try and thrown a bone at my opponent, but one example would be, in addition to the classes of person who accrue a right to request, we're going to add to that a set of classes; we're going to have more people.
JUSTICE ROSS: Yes.
MR WARD: Another one might very well be, well, when the employer is considering the request, we're going to add some additional conditions on the employers, for instance you must request the face to face. You must genuinely consider what they're putting to you. That wouldn't negate in any way shape or form, the process in 65; it would simply build upon it.
JUSTICE ROSS: In some ways you've put in your submission that compliance with 65(6) requires some form of consideration as to whether you're going to grant the request or not.
MR WARD: Yes, yes.
JUSTICE ROSS: A provision that extends on that would be, give serious considerations or however one framed it, provided at the end you're not changing the overall character of it, which gives rise to the refusal on reasonable business grounds.
MR WARD: If one doesn't make a mockery of the right to request itself and the refusal, then you would be able to do that.
JUSTICE ROSS: Yes, no, I follow.
MR WARD: You'd still have to then apply the test in 55(4) and that is you'd have to say to yourself, even if - let's say we said well the employer has got to meet face to face. You still have to say well, if we make that change is there any detriment to an employee in any respect? You still have to challenge yourself about that.
I can't immediately think of one, but you still have to at least do that from a statutory perspective. But it would seem that - - -
JUSTICE ROSS: Well, an example of that is the broadly common position of the parties in the domestic violence leave case, that by extending the circumstances in which one might access personal carer's leave, it actually may be detrimental because it would restrict the scope in others. It's not sort of inconceivable that even something that looks as if it's supplementing, may have the effect of being detrimental.
MR WARD: A good example of that might be you might introduce a process that takes so long, that it actually hampers the employee in securing child care or - you've still got to run that test anyway.
JUSTICE ROSS: Yes.
MR WARD: That's what I wanted to say about that.
JUSTICE ROSS: What's the distinction you draw between supplementation of that character and what the ACTU is seeking in this case? How do you characterise what they're seeking?
MR WARD: Supplementation in our character, leaves 65 intact and builds upon it. Everything in 65 still operates, it still has work to do. What they effectively want to do is they want to throw 65 in the bin and say we're going to use this instead. As a matter of practicality, if I could walk into my employer and say I'm working Monday for three hours, I'm working Tuesday for two, cop it, then the whole of 65 becomes a nullity for that class of person.
We say that if you're going to negate part of the NES in that way, it clearly can't be an act of supplementation. In fact, it's the opposite.
JUSTICE ROSS: You characterise it as an act of abrogation, really?
MR WARD: Absolutely right, yes. I'm going to leave that now. Can I just make two small comments in reply to matters raised in the ACTU written submission and one matter raised today, and then I want to just sum up if I can? The ACTU have made a reasonable - I'll withdraw that.
JUSTICE ROSS: Yes, realised too soon.
MR WARD: It may be late in the day, but I'm okay. At paragraph 13 the ACTU starts to talk about casual employment. There's a kind of inference that might be drawn from what they say about casual employment that in some way casual employment is an evil thing. We spent a year in front of the Full Bench debating the whole question of casual employment. Can I just for abundant caution, say this, that if the Commission are anxious about the evilness or goodness of casual employment, can I ask them to reflect on paragraph 355 of the Four Yearly Review of Modern Awards Casual Employment and Part Time Employment common matters case.
I'll just briefly read it out - it's very short. It says this:
After a great deal of consideration of all the evidence in that case, (which was voluminous) although quantification of the relevant propositions arising from this data is problematic, it can at least be concluded that a significant proportion of casual employee, probably the majority of them, are satisfied with their current casual employment arrangements and do not want permanent employment or additional working hours.
Equally, a significant proportion of casual employees have accepted their current casual employment because it was the only work available and would prefer permanent employment and/or additional hours.
I'll leave it right there. I think that's an entirely reasonable and balanced observation about casual employment. It suits some; it doesn't suit others. To the extent that this Full Bench want to make any observations about casual employment in the context of this case, we'd urge you to contemplate it in the context of those observations.
The second comment I want to make just in reply it this. It has to be said that there's been very little focus on the reversion element of the claim. I concede that indirectly some of the observations from Professor Austen might be said to go to it, but in truth, there's very little direct evidence; in fact, I'm contemplating there might be no direct evidence before you about the issues associated with reversion back to full time work.
I just make that observation because the focus has been on the front of the claim rather than the back of the claim. But it would be appropriate to ask the Bench to be cautious about the concept of reversion, given the paucity of evidence before it.
JUSTICE ROSS: Do you see the reversion element of the claim working?
MR WARD: As I read it, I see it working simply this way. If I tell my employer that I'm going to move to a certain regime of work, now the way we read the claim, it seems to suggest I might be able to make more than one demand, but let's leave that aside for a minute; I think you could. Let's say I make one demand. I'm assuming that at some point, I'm entitled, subject to the criteria in the claim in terms of the temporal criteria, to say well now I'm going to go back to what I was doing before. It just seems to be what it says.
JUSTICE ROSS: As you say, there doesn't seem to be a limit on if the circumstances change you could seek to vary, further vary or reduce the hours. Maybe that's the restriction.
MR WARD: It seems the way the claim's worded to us and we might have it wrong, that I could come in and say I'm working these - - -
JUSTICE ROSS: I'm sure Ms Burke will point it to you in reply.
MR WARD: With vigour I imagine. I'm going to work these hours, I have a problem with childcare, I come back and say well now I'm going to work these hours and I'm not trying to be petty when I say that but I think the claim possibly would allow that. But I think the ultimate reversion seems to be to, what I might call, the original job you had.
DEPUTY PRESIDENT GOOLEY: Bit like a right to return to your position of - - -
MR WARD: Exactly, exactly right, yes. That seems to be how it works. There hasn't been - all I'm saying is there really hasn't been a lot of evidentiary consideration to that, there hasn't been a lot of thought on that. Most of the case has been about the front end.
Can I just make some summary observations in closing. The ACTU seem to be encouraging the Bench to finish off the work started by the 2005 test case and I ask the Bench not to be seduced into that. It's not what's happening here. As the Bench I think have already agreed in discussions with the Bar table, we're in an award review, the purpose of these proceedings is to ensure that the awards under consideration and the national employment standards represent a fair and relevant minimum safety net.
I think it's unambiguous what our view is about that safety net. We emphasise the phrase minimum but we acknowledge the phrase minimum as conditioned by the phrases fair and relevant. Fairness, as the authorities demonstrate is for both the employer and the employee, and relevance is both a temporal consideration and a contextual one. What is relevant in 2017 may not be relevant in 2030 and what might be relevant in the wine industry might not be relevant in the pastoral industry.
Now a lot of focus in this case is on section 65 and I just want to make a number of observations about section 65 in closing. The first one is the notion of there being a gap is a construct of argument developed by the ACTU. There is no gap in terms of how section 65 was intended to operate from inception to enactment, and the Bench have provided the parties with reference - sorry, withdraw that - research reference list material on 15 December. One of the documents that's referenced, which I think is referenced in the ACTU's evidence or submissions is reference document 123, The Australian Government 2008 National Employment Standards Exposure Draft Discussion Paper. I apologise, I don't have copies - I've only decided to go to this having heard Ms Burke speak this morning.
JUSTICE ROSS: I think it's referred to in your earlier written submission in any event.
MR WARD: I just want to just take the Bench if I can very briefly to part of it. At page 10, paragraphs 58-61, I'll just quickly read that for the Bench:
The government is committed to effective measures that will help all working families balance their work and family responsibilities. The government is also committed to helping business to manage their workplace to encourage greater workforce participation.
The government recognises that working families can find it particularly difficult to balance work and family responsibilities when a child is not old enough to attend school. It is for this reason that the proposed NES will include a right for certain employees to request flexible work arrangements from their employer until their child reaches school age. An employer can only refuse the request on reasonable business grounds.
60. The government considers implementing family friendly arrangements is best dealt with at the workplace level, whether a particular flexible working arrangement requested by an employee can be accommodated by an employer will vary depending on the circumstances of the particular business.
And in 61:
Whether a business has reasonable business grounds for refusing a request for flexible work arrangements will not be subject to third party involvement under the NES. The United Kingdom experience has demonstrated that simply encouraging employers and employees to discuss options for flexible working arrangements has been very successful in promoting arrangements that work for both employers and employees.
I'll leave it there. If the Bench then were to turn their mind to the Explanatory Memorandum to the Fair Work Act, one would find that that theme, and I won't take the Bench to it, that theme is entirely carried through into the Explanatory Memorandum and then into the actual enactment of section 65. It's really a construct to say there's a gap.
Now section 65 is relatively new. It is, in our submission, a contemporary formulation. It was reconsidered by the parliament in 2013 and it was amended. It must therefore be seen as a proper contemporary expression of what the parliament believe is appropriate and by definition what the community believe is appropriate. An employer who takes liberties with section 65 has a raft of anti-discrimination laws sitting on their head like a Sword of Damocles, and very little seems to have been mentioned of that legislation but we have gone to it at length. It is very clear to us that the parliament would have had that in their mind when they structured section 65. They would have known of it and there is a very fine margin of error between an employer doing what they're meant to under section 65 and crossing that line into an act of discrimination.
Now if you take Ms Routley's evidence - - -
COMMISSIONER SPENCER: It's because if there were no reasonable business grounds there might be a presumption
that it's discriminatory.
MR WARD: Yes. You take Ms Routley's evidence, her evidence and I don't say she's right or wrong but her evidence is that I was met by a policy position of the school against part-time employment. Now I don't act for employees but I suspect that that's the very type of objection that would be amenable for some consideration under anti-discrimination law.
One of the witnesses and I'm struggling to remember which one it is right now. I think it might be Jones-Vadala but bear with me. I'll withdraw that, it's the witness from Sussan's, Sinclair. That witness actually spoke to her union about running an anti-discrimination case, it appears her union didn't have the ardour to run it. But again that was a case where the company had a policy position against something. So those cases are not failures of 65, those cases are failures of people not using the remedies that are available.
Now the question is, is 65 working? Now I appreciate that there's very limited evidence available to you about that. The best evidence available however Spartan it is, is the general manager's report from the Fair Work Commission, and that evidence tells us that it is working very, very well. One or 2 per cent decline rate, depending on whether or not you ask the employer or the employee. We also know from AWALI that the awareness of section 65 is growing exponentially between 2012 and 2014, particularly for women, the AWALI report indicated that awareness had almost doubled and that is in our written submissions. It would be interesting to see what the AWALI report says next time about awareness of section 65.
Now balanced against that of course is a raft of employment data you have access to and I would commend you in particular to go to Dr Watson, that shows that businesses largely meeting the needs for flexible work. We didn't have to get into an argument in this case about is it the
supplier side or the demand side, perhaps a little different to the casual and part-time case. The simple fact is if one considers the charts I took Dr Watson to about the growth in permanent part-time for women, and the growth in casual work, which was a lesser order of magnitude it seems fairly clear that there is a very strong take up in the Australian economy of providing flexible part-time work for people who want it, in particular, women with children.
I would also ask you to consider carefully what seems to be a very important piece of work from Dr Watson, and that is the tables that Dr Watson had comparing workforce participation of couples with dependent children and couples without. The importance of that table was its ability to dissect between people who had effectively volunteered out of the workforce, that is, not in the labour force, and people who were out but wanted to be in. That was the marginal not in the labour work force. When you have children, that margin or MILWF group, only modestly increases in terms of the overall aggregate. So we have a view that the evidence shows 65 is working. We have a view that the labour market is being responsive. Now it's not perfect. It can't be perfect; it's a labour market, but it seems to be working quite well. And separate to that the evidence demonstrates this; that even outside of the world of regulation employers and employees seem to be getting this pretty well right. If one looks at the evidence of informal requests, even without the big stick of regulation, most employers and employees are working this out very, very well for themselves.
So that's the environment within which this case is agitated, and when you actually look at the claim, the claim seeks to fundamentally change the safety net. The claim is so self-evidently radical you would have assumed that it's required to remedy a manifest and widespread injustice. It's the proverbial sledge hammer cracking the nut. And there's no evidence in our view that supports that a radical proposition, and of course interestingly enough nobody in the case, even the experts who, at some point, seem to be as such advocates as experts, even they don't seem to be supporting the claim.
If one goes to the Australian Human Rights Commission report which was appendix to one of, I think, Dr Murray from memory, they make a number of recommendations. None of those recommendations go as far as the claim; none. And we would say this; section 138, which has that delightful provision of you only change an award to the extent necessary to meet the modern awards objective. Section 138 is designed specifically to stop claims that are of this radical nature. It's designed to stop it.
We say, in closing, that the current minimum safety net is fair and reasonable. There's been insufficient evidence to prove otherwise and there's been a demonstrable lack of evidence to prove that we need to go where the ACTU want us to go, which, in our written submissions as we've said crosses a Rubicon this tribunal has never crossed, that is, we're now going to take away from the employer, who's taken the risk of establishing their business, take away from that employer the right to deploy labour in their business, and we're going to hand it to the employee, and that is a journey that this tribunal has never taken and, in our respectful submission, in the context of a fair and relevant safety net for employers and employees cannot do on this occasion. If the Commission pleases.
JUSTICE ROSS: Thank you, Mr Ward. Mr Millman from the NRA, do wish to make any oral submissions?
MR MILLMAN: Yes, your Honour. Just let me know if you can't hear me, because of the microphones here. I'll try to be as brief as I possibly can given that my colleagues pretty much covered off most of the matters that need to be addressed, in our view. I will just reiterate that NRA acknowledges the ACTU's nobleness of intention shall we say in bringing this application or this claim and that's acknowledging the issue that it seeks to address, but we fundamentally disagree with the, as Mr Ward put it, the radical departure that it proposed from the status quo. Mainly of course, all the employer parties I think will agree with me that our main sticking point is with that clause X.3 which purports to exclude entirely the employer from any decision making process or discussion about flexible working arrangements, that being the employer says, "This is what I want to work. I don't care if it's reasonable, practical, affordable or indeed even lawful under the award, the clause says that you will grant it".
Turning to section 3 of the Fair Work Act which talks about the objects of the act that talks in very quick terms about fostering cooperation between employers and employees, and providing for flexibility for businesses, and for employees, and in NRA's respectful submission we say that the approach proposed by the ACTU by categorically excluding the employer from having its views considered in any discussion around flexible working arrangements under its proposal is fundamentally contrary to the basic underlying intention of the act.
On a practical point I would just like to add if the Bench is not persuaded by my colleague's arguments on the jurisdictional point there is a certain amount of practicality and regulatory burden that needs to be considered, in that if an employee was to bring a request for flexible working arrangements that could be covered under either section 65 or under the ACTU's proposed provision then the average employer is faced with a bit of a dilemma in that they have an act of Parliament saying they have a right to refuse on reasonable business grounds, but then they have a statutory instrument created by the Fair Work Commission saying that they have no right to refuse whatsoever, and if the Full Bench will allow me the colloquialism the employer may well end up feeling caught between a rock and a hard place and damned if they do and damned if they don't. If they refuse on reasonable business grounds are they breaching the award, and if they comply with the award and just grant the request, are they foregoing a right that they may otherwise have under the national employment standards. And that's a balancing act that needs to be taken into consideration if the Full Bench is persuaded on the jurisdictional point and turns its mind to the provisions of the (indistinct).
In closing we'd just like to re-affirm the point made by my colleagues about the parliamentary intention behind the national employments standards saying that - advising caution if the Full Bench proposes to second guess the parliamentary intention behind section 65 and the national employment standards particularly given that section 65 was considered relatively recently in 2013 as my colleague suggested.
I also would like to note in closing that this is a complicated - or this application is brought with an intention to address what is effectively a very complicated socio-economic issue about the interaction of parenthood and the propagation of the species versus the need to meet the basic fundamentals of human existence in a civilised world, that being the need to earn money. Whilst we acknowledge, as I say, the nobility of the ACTU's intention, we do caution any and all industrial organisations and indeed the Bench, and that's organisations on both sides of the employer and employee divide, about approaching the award variation process, either through the reviews or under section 158, as some sort of panacea for all socio-economic issues in our wider society. It may well be that issues such as this one where the availability and regulation of child care appears to be a significant factor on the basis of all the evidence provided needs to be dealt with more holistically and that great care should be taken when applications of this nature are made to ensure that a more holistic approach is taken rather than focusing on a single element of it that may not be the most appropriate course of action. Unless the Bench has any questions, those are our submissions?
JUSTICE ROSS: Thank you, Mr Millman. Anything from the NFF?
MR ROGERS: No. Thank you, your Honour. I just wanted to reserve the right to respond to anything that might've been raised today, and I don't think that I need to exercise that right. We rely on the submissions that we made on 30 October 2017 and the witness statements that were filed with them. Thank you.
JUSTICE ROSS: We propose to stand down for 10-15 minutes.
MS BURKE: Thank you your Honour, I was about to ask for time to get some instructions.
SHORT ADJOURNMENT [3.00 PM]
RESUMED [3.20 PM]
MS BURKE: Thank you. I only need to address three short matters in reply. The first of those was a matter raised by Mr Ferguson about remuneration and the risk that the operation of the clause would require an employer to pay an employee their full time wages for working part time, as an example. The example of salaries was raised as a complicating factor.
I just draw the Full Bench's attention to the standard annualised salary clause in awards which does provide a very clear way to calculate how much a salary should be - it's 52 time the minimum wage plus 25 per cent. We say that the remuneration point is not a complicated one at all. It is entirely possible, easily done to work out what the pro rata remuneration entitlement would be.
Second, I just want to say something about what the AHRC referended and this was in response to a point by Mr Ward. He said that not even the AHRC recommended a clause like the ACTU's. What they did recommend, if you look at recommendation 3, is to strengthen the right to request provisions by removing the qualification requirements for 12 months' continuous service, introducing a positive duty on employers to reasonably accommodate a request for flexible working arrangements and establishing a procedural appeals process through the Commission for decisions related to the right to request flexible working arrangements. Now yes of course they did not recommend something in similar terms to what the ACTU did but if we're having regard to what the AHRC did and didn't do, recommendation 3 is highly relevant in my submission.
Finally - - -
JUSTICE ROSS: Well, except for the third part of recommendation 3 is not something that there would be power to do under the current statutory framework.
MS BURKE: No, this is a recommendation for government.
JUSTICE ROSS: Yes.
MS BURKE: Finally, just in respect to discrimination law, now we accept that broadly speaking discrimination law has a role to play but it's not a complete answer or even a very good answer to the problems of non-compliance with section 65(5) or poor compliance with it. There are good reasons why employees don't bring discrimination claims. You can take notice of the fact that indirect discrimination claims are attended with significantly more complexities. Employees are exposed to legal costs when they're in the Federal Court and by contrast the Commission is a much more cost effective and bespoke tribunal - sorry, this Commission is a much more cost effective and bespoke tribunal to conciliate, arbitrate or otherwise deal with disputes that relate to employment.
So it's not as simple as saying well they had this avenue of redress, they could have taken it. You do need to think about what is involved in doing that, and if you've got a small child and you want to keep your job, taking your employer to court and paying for it and running an expensive and high risk indirect discrimination claim it's pretty rational to not do that, with respect. So discrimination law has - is part of the big picture but it's by no means an answer or a very good answer at all. Those were the only points that I needed to address in reply. With respect to all the other points we of course join issue.
JUSTICE ROSS: Thank you. Nothing further? We may, I don't put it any higher than that, put out a document seeking to summarise the submissions that have been advanced early in the New Year, mainly because of the - just to make sure that we've got right the emphasis that's been put in the course of oral argument, in particular. If we do do that we'll also provide any update in relation to the research reference list, in the event there is one and we'll provide the parties with an opportunity to comment on any documents that we do publish.
Nothing further? Then thank you very much for your submissions. I hope you and your family have a happy and safe Christmas and I hope I don't see you before Christmas. We'll adjourn.
ADJOURNED INDEFINITELY [3.24 PM]
LIST OF WITNESSES, EXHIBITS AND MFIs
JULIE CHRISTINA TOTH, AFFIRMED....................................................... PN2452
CROSS-EXAMINATION BY MS BURKE..................................................... PN2452
THE WITNESS WITHDREW.......................................................................... PN2517