PN69

JUSTICE ROSS: The first matter before us this morning is an issue arising in relation to the Educational Services Teachers Award. Can I have the appearances, please, firstly in Sydney and then in Melbourne?

PN70

MR A ODGERS: If the Commission pleases, my name is Odgers, initial A, and I appear on behalf of the Independent Education Union.

PN71

JUSTICE ROSS: Thanks, Mr Odgers. And in Melbourne?

PN72

MR J MONROE: If the Commission pleases, my name is Monroe, initial J, I appear for the Associations in this matter, being Independent Schools Victoria, Independent Schools Tasmania and the Associations of Independent Schools of NSW in South Australia.

PN73

JUSTICE ROSS: Thank you, Mr Monroe. There is a witness, a Miss Knopp, that you wanted to cross-examine; is that right?

PN74

MR ODGERS: Yes, that's right, your Honour.

PN75

JUSTICE ROSS: We might deal with the witness evidence first. If you can swear the witness.

PN76

THE ASSOCIATE: Please state your full name and address.

PN77

MS KNOPP: My name is Kerry Knopp, (address supplied).

<KERRY KNOPP, SWORN�� [9.43 AM]

EXAMINATION-IN-CHIEF BY MR MONROE�� [9.43 AM]

PN78

JUSTICE ROSS: Mr Monroe, do you want to swear Ms Knopp up to her statement?

PN79

MR MONROE: Sure, your Honour, thank you.

PN80

Ms Knopp, could you just repeat your full name?‑‑‑Kerry Knopp.

***�� KERRY KNOPP�� XN MR MONROE

PN81

Your occupation?‑‑‑I am the director of strategic relations at Independent Schools Victoria.

PN82

Have you made a statement in these proceedings?‑‑‑I have.

PN83

Is that a statement of 66 paragraphs?‑‑‑It is.

PN84

Dated 25 January 2019?‑‑‑It is.

PN85

Do you have any changes to make to that statement?‑‑‑I have no changes to make.

PN86

Are you comfortable with the evidence given in that statement?‑‑‑I am.

PN87

Your Honour, would you like to mark that statement?

PN88

JUSTICE ROSS: Sure. We will mark it exhibit ISV1.

EXHIBIT #ISV1 STATEMENT OF KERRY KNOPP

PN89

MR MONROE: Thank you, your Honour.

PN90

JUSTICE ROSS: Thank you, Mr Monroe. Cross-examination?

PN91

MR ODGERS: Thanks, your Honour.

CROSS-EXAMINATION BY MR ODGERS�� [9.44 AM]

PN92

Ms Knopp, to assist the Commission, I intend, as best I can, to work through your statement from the beginning. You say that you commenced employment with the ISV in 1992?‑‑‑That is correct.

PN93

Do you know what percentage of the employer workforce covered by this award, the associations represented in this proceeding, represent?

PN94

JUSTICE ROSS: I don't understand the question. Are you talking about ISV or are you talking about all of the associations?

***�� KERRY KNOPP�� XXN MR ODGERS

PN95

MR ODGERS: Firstly, your Honour - - -

PN96

JUSTICE ROSS: Let me rephrase it. Is the question: of all of the schools covered by this award, what proportion of those schools are represented by the associations? Is that it?

PN97

MR ODGERS: That's a much better way of putting it, your Honour.

PN98

JUSTICE ROSS: All right. Ms Knopp, do you understand the question?‑‑‑I think I do. It's not a question that I can answer without notice. If I was to - I can talk about Victoria. If I need to answer the number of schools that are covered by the awards throughout Australia, it's not a question that I can answer without undertaking some research. With respect to Victoria, there are around about 220 schools - it depends on how you count them - and around about 50 per cent of those would respond directly to the award. Around about another 50 per cent would have enterprise agreements that are very, very similar to the award and would contain most of the provisions, including the one that is at issue today, which is the notice of termination provision. I don't know whether I have answered the question sufficiently or whether I need to take it on notice.

PN99

I don't think you have. How many schools are there in Victoria? Don't disaggregate between those who are covered by an agreement or not. Those who are within the scope of the award, whether they are covered by an agreement or not, how many schools fall into that category in Victoria - not that you represent - how many schools?‑‑‑We have close to 100 per cent membership. Our membership is 219 schools. Some schools have their campuses registered as separate schools, so it's somewhere between 219 and 222, whichever way you want to count them.

PN100

Yes, but you represent independent schools, don't you, not state schools?‑‑‑I do.

PN101

Are state schools within the scope of the award?‑‑‑My understanding is no.

PN102

Why do you say that?‑‑‑Well, they've never been part of the proceedings, to my knowledge. Someone else might be able to answer that question.

PN103

All right, I don't think it's going to get much further than that, unless you have some information about how many - - -

***�� KERRY KNOPP�� XXN MR ODGERS

PN104

MR ODGERS: Thanks, your Honour. To the extent that there will be some brief time for summation, I will address that issue then.

PN105

JUSTICE ROSS: All right.

PN106

MR ODGERS: Ms Knopp, did you represent the AIS in proceedings wherein the Commission determined to make a first, final federal award, pre-reform award, as opposed to interim federal award?‑‑‑Are you talking about the Victorian Independent Schools Teachers Award 1998 or the 1994 award?

PN107

Yes, I am, and, in particular, proceedings before Frawley C at that time?‑‑‑Well, yes, I was in those proceedings, I did represent Independent Schools Victoria.

PN108

Thank you. Were the provisions in respect to notice and withholdings in the event of short notice in the same form as they appear in the modern award?‑‑‑No, they were not. Well, they were - no, they were not, they were different.

PN109

In what way were they different?‑‑‑No, sorry, the withholding provisions were the same. I do apologise, I was thinking about the amount of notice that an employer was required to give. That changed between 1998 and the making of the modern award for 2010.

PN110

Okay?‑‑‑So the withholding provisions have always been full withholding.

PN111

What was the change in respect of notice itself?‑‑‑In respect of teachers giving notice, previously it was seven weeks wholly within one school term, so effectively term weeks, and from 2010, it became seven term weeks' notice, and for employers, it was originally one full term where an employer had been employed for - where a teacher had been employed for five or more years and seven weeks wholly within one school term where a teacher had been employed for less than five years.

PN112

Thank you. When that award was made, was it made on a consent basis following what were then first award principles?‑‑‑You are referring to the 1998 award?

PN113

Yes?‑‑‑To my knowledge, it was.

***�� KERRY KNOPP�� XXN MR ODGERS

PN114

So the provisions were derived from the previous state award?‑‑‑Yes. There was a federal award prior to that, which was an interim federal award in 1994 and 1996, before the 1998 awards were made as a result of the award simplification process, but, yes, it reflected exactly what was in the Victorian awards prior to that time.

PN115

With respect to respondency, what was the scope of the Victorian award at the time of the making of the final federal award?

PN116

MR MONROE: Your Honours, I'm not quite sure what the relevance of going back that far into the history of the respondency of proof on awards is.

PN117

JUSTICE ROSS: Neither am I. Yes, thanks, Mr Monroe, neither am I.

PN118

MR ODGERS: Well - - -

PN119

JUSTICE ROSS: It is not in dispute, the history of it.

PN120

MR ODGERS: Your Honour, fine, no problem at all.

PN121

JUSTICE ROSS: In any event, we have looked at the issue since then. The history was similar in a number of other awards which provided a withholding amount and deductions from the NES and all the rest of it and we have reviewed all that in the past couple of decisions.

PN122

MR ODGERS: No problem, your Honour.

PN123

JUSTICE ROSS: Yes.

PN124

MR ODGERS: Ms Knopp, is the only part of your evidence that goes to Tasmania that which is contained at paragraphs 27 to 30?‑‑‑Yes, it is.

PN125

The same goes for South Australia and New South Wales in respect of the statements you make on pages 4 and 5?‑‑‑Yes, it is.

PN126

At paragraph 23 of your statement, you indicate that, in Victoria, the circumstance is that there's some variation in enterprise agreements in respect of notice. Is there also some variation between agreements in respect of withholding?‑‑‑There can be because individual employers and the employees at that particular school will make a decision about what their notice periods will be and what the withholding provision will be, so there can be some variation.

***�� KERRY KNOPP�� XXN MR ODGERS

PN127

I'm sorry, I'm just not clear. Are there provisions in enterprise agreements which do not provide for either seven weeks' notice of resignation and/or the capacity to withhold seven weeks in the event of short notice?‑‑‑To my knowledge, I have no knowledge of any enterprise agreement that has a notice period for a teacher that is less than seven weeks. In some cases, it can be more. I am aware of one agreement that doesn't have a withholding provision, only because I happened to look at the agreement recently. I don't have an understanding, or I haven't looked at nearly 100 agreements to work out whether they do or whether they don't have a withholding provision prior to this proceeding. I can look at it, but I don't think there will be very many. I am aware of one.

PN128

Going to paragraph 32 of your statement and the first sentence therein, you say:

PN129

Teachers view the potential loss of entitlements in relation to notice as an incentive for teachers to provide the appropriate required notice.

PN130

In terms of how this information was derived, is it right to say that you were informed by employees of the AIS New South Wales, who were informed by AIS contacts in schools, who had formed a view about the views of teachers in those schools in respect of this subject?‑‑‑In respect of that paragraph in the statement, that is accurate, but I would point out that my colleagues in New South Wales have worked in the area for a very long time and have been responsible for working with their member schools in the same way that I have here in Victoria. So, we actually do understand how the notice provision works and why teachers resign, the amount of notice they give or they don't give.

PN131

I conducted a survey in January of this year as a result of the decision in this matter being made by the Fair Work Commission in December and, over a week, I have received responses from, I think, 97 schools - it's here somewhere, it's in here - and they very - they do believe that the ability to withhold moneys in the event of short notice being given is an incentive for teachers to give notice, and the survey was only answered by those employers who rely on the award.

PN132

Those who have enterprise agreements in place were excluded from the survey, so that was from - those responses were from potentially about 120 schools very strongly in favour of retaining the ability to withhold moneys in the event of short notice, given the effect that it has on student learning, on other teachers in schools, the ability to obtain a replacement teacher at short notice part way through the year.

***�� KERRY KNOPP�� XXN MR ODGERS

PN133

For example, yesterday I had two telephone calls from schools about staff members who have given short notice. One resigned on 17 September, which was two days, three day if you like, before the end of term on 20 September. So, that was two days' notice. That teacher has another role in another school starting on Monday 7 October. So, that school is spending its time over the break scrambling to find a teacher to replace that staff member because, in Victoria, like every other State, if a teacher is away for any reason or has resigned, whether it's personal carer's leave, compassionate leave, leave without pay, parental leave, anything at all, just even leave for the day, the school has to have - - -

PN134

MR ODGERS: I am sorry to interrupt you, Ms Knopp - - -?‑‑‑a registered teacher in front of that class.

PN135

I am sorry to interrupt you.

PN136

JUSTICE ROSS: Ms Knopp, just - - -

PN137

MR ODGERS: But my question doesn't - I am going to go on and ask you some questions about the survey and about matters in Victoria. My question was simply as to how you were informed that the potential loss of entitlements in relation to notice was an incentive for teachers to provide the appropriate required notice in New South Wales, and it is a fact, isn't it, that you were informed by employees of the AIS, who were informed by employers of the schools who have anecdotal evidence?‑‑‑Yes.

PN138

Thank you. Going to your survey, you didn't send that survey to all independent schools in Victoria, you just stated that you excluded those who were covered by agreements?‑‑‑I actually sent the survey to all member schools and I asked them a question, "Are you a respondent to the award or do you have an enterprise agreement?" If they said that they had an enterprise agreement, they then didn't answer any more of the questions, although quite a number of them contacted me to provide their views because their enterprise agreement clauses are the same. I thought it would not be fair to send the survey to those who have had the opportunity to put in a different notice of termination provision into an enterprise agreement, so it was purely focused on award-based schools.

PN139

You say you sent it to all member schools in Victoria, but you also sent it to non-members, did you not?‑‑‑There are almost none. It might only be one independent school in Victoria.

PN140

Going to paragraph 33 of your statement and the second sentence therein, you say:

PN141

103 survey responses, representing 90 member schools.

***�� KERRY KNOPP�� XXN MR ODGERS

PN142

?‑‑‑Mm-hm.

PN143

So you sent it, did you - is an explanation, or a possible explanation, for this that you sent it to different campuses of the same school?‑‑‑No, I sent it out to principals and I sent it out to the - we have a human resource managers network and I sent it out to those. Can I just remind you that schools were on leave during that time. I returned to work on 8 January, I sent the survey out, it was a one-week survey period, 14 to 21 January, and schools were effectively closed, they close down from mid‑December - - -

PN144

Yes, Ms Knopp, you make that point - - -?‑‑‑ - - - through until around about Australia Day.

PN145

JUSTICE ROSS: Ms Knopp, if you just confine your responses to answering the questions, we will get through it quicker.

PN146

MR ODGERS: Thank you, your Honour.

PN147

You make that point in paragraph 33 of your statement. All I am trying to determine is, if all, or almost all bar one, independent schools in Victoria are said to be members, why is it that there are 103 survey responses of which only 90 represent member schools?

PN148

JUSTICE ROSS: I think you have got the answer. The survey was sent to both the principal and the HR person.

PN149

MR ODGERS: Sorry, I didn't understand that, your Honour.

PN150

JUSTICE ROSS: Yes.

PN151

MR ODGERS: Was there, accompanying the survey, any correspondence from the AIS?‑‑‑There was a covering email, yes.

PN152

In what terms did that email describe the purpose of the survey of schools?‑‑‑It was to ascertain what their views were in relation to the Commission's provisional view for the withholding provision for the notice of termination clause to be equivalent to one week's wages, and I asked - the survey asked them their views about that. There were a number of questions in the survey.

***�� KERRY KNOPP�� XXN MR ODGERS

PN153

Thank you. So the employers who responded were able to be identified?‑‑‑I could identify them.

PN154

Yes. So what can you tell the Commission about those who responded to the survey? Was the proportion of high fee schools greater than it would be statistically?‑‑‑I would need to go back to the survey to be able to answer your question accurately, but my recollection is that it covered, effectively, the full gamut of our membership, from those who are low fee schools to those who are high.

PN155

So, it was a representative cross section?‑‑‑I can say it was representative; I can't tell you whether there were a higher number of schools from different SES bands or different fee bands. The survey data wasn't analysed from that perspective.

PN156

Moving on, at paragraph 34 in your statement, you say:

PN157

In Victoria, teachers must be registered with the Victorian Institute of Teaching.

PN158

Are you sure that's the case?‑‑‑Yes.

PN159

Are teachers with permission to teach registered?‑‑‑Look, to me, we regard a teacher - we think about registration in terms of someone who can teach. A teacher either has provisional registration or full registration with the Victorian Institute of Teaching or they will have permission to teach.

PN160

The answer is you regard teachers with permission to teach as registered, but they are not, in fact, registered, are they?‑‑‑That's correct, they are not registered but they have the right to teach in the school as granted by the Victorian Institute of Teaching. They're equivalent in terms of their ability to step in front of a class and take the class and teach. They have been given - - -

PN161

In paragraph 35, you say:

PN162

Classroom teaching may only be delivered by a teacher registered with the VIT.

PN163

But there are non-classroom teachers, aren't there?‑‑‑I'm sorry, I don't understand what is mean by a non-classroom teacher.

***�� KERRY KNOPP�� XXN MR ODGERS

PN164

Is an instrumental music teacher a classroom teacher?‑‑‑No.

PN165

Is an instrumental music teacher required to be registered?‑‑‑No, they're not classroom teachers, they're not permitted to take a class, they're only - - -

PN166

That's my question. They are not classroom teachers?‑‑‑No.

PN167

Do you know how many teachers there are that currently have permission to teach in Victoria?‑‑‑I'm sorry, I have not reviewed the statistics on the Victorian Institute of Teaching website.

PN168

Does being registered as a teacher necessarily mean that you have completed the relevant university degree?‑‑‑I think - I'm sorry, but I think that's a question for the Victorian Institute of Teaching in terms of their registration practices. I'm not able to - I'm not able to state exactly what the qualifications of a teacher would be. The Victorian Institute of Teaching has teachers that were deemed to be qualified when they were first registered, even if they may not be able to be registered now.

PN169

I will ask you - - -?‑‑‑There's a whole series of - - -

PN170

JUSTICE ROSS: No, no, just a minute, Ms Knopp. How is it going to help us decide whether you have a cap and, if so, at what amount?

PN171

MR ODGERS: In this instance, your Honour, through the course of the statement, a number of assertions are made about the difficulty in filling teacher positions and the availability of suitable teachers. All those assertions, I suggest, in terms of the way the statement flows, are premised on the broad statements that are made in paragraphs 34, 35, and 36 and I am simply trying to point out that teaching is a somewhat more polyglot, a somewhat wider constituency than that that's referred to in this statement.

PN172

JUSTICE ROSS: Okay.

PN173

MR ODGERS: I will conclude my questioning by asking you, in that case, Ms Knopp, do teachers in schools who are part of the Australian Government's Teach for Australia program have a relevant university education qualification?‑‑‑I have not researched that particular program or looked at it for many years. It's not part of my standard - - -

***�� KERRY KNOPP�� XXN MR ODGERS

PN174

So the answer is you don't know?‑‑‑I have not found it necessary to know, so the answer is no.

PN175

You don't know? I will ask you the same question in relation to the hundreds of community language schools in Victoria. Do teachers who work in community language schools have a relevant university degree? Do you know?‑‑‑My understanding is that they may only be a native speaker, particularly if it's an unusual language in Australia, but can I point out they are not a registered primary, secondary or early childhood - - -

PN176

That is not the question I am asking, Ms Knopp.

PN177

MR MONROE: Your Honour, I'm not sure what the relevance of language schools is in this proceeding. I'm not sure how they fall within the - I'm not sure of the relevance, your Honour.

PN178

MR ODGERS: It doesn't matter. Sufficient for me to waste the Commission's - - -

PN179

JUSTICE ROSS: The award excludes from coverage in 4.6(a) those schools.

PN180

MR ODGERS: Thank you, your Honour.

PN181

Ms Knopp, going to paragraph 36(c) of your statement, just because a school has a religious affiliation doesn't necessarily confine its recruitment of teachers to the adherence of the relevant faith, does it?‑‑‑No, it doesn't.

PN182

There are secular schools and schools that don't offer religious education? Are there secular schools and schools that don't offer religious education within the independent school population in Victoria?‑‑‑There are schools that don't offer religious education, yes.

PN183

Is it true to say that the considerable majority of schools in Victoria don't stipulate in their advertising that it's a necessary prerequisite of employment that applicants are practicing members of the religious denomination under which the school is established?‑‑‑For many schools, the religion of a staff member is of not a significant concern.

PN184

Thank you. You say, in paragraph 39, that:

***�� KERRY KNOPP�� XXN MR ODGERS

PN185

At least three respondents to the survey identified themselves as regional or country schools and commented on recruitment difficulties.

PN186

Can you identify those three respondents?‑‑‑I would have to go back and look at the survey. I'm sorry, the survey was done in January, I didn't think I would be asked questions to name specific schools.

PN187

At paragraph 48 and following, you go to the direct recruitment costs and in the first sentence of paragraph 48, you say:

PN188

It may take some length of time to recruit an appropriate replacement.

PN189

But there is no shortage of teachers in Victoria, is there?‑‑‑According to schools who recruit, it depends on who you are recruiting, when you are recruiting. There's a range of factors involved. So, they say that there are shortages.

PN190

Your responsibilities, do they include the negotiation and oversight of agreement making in independent schools?‑‑‑They do. If the member schools would like to involve us in the negotiation of an enterprise agreement, then we will be involved.

PN191

How long have you had those responsibilities?‑‑‑Since the time that enterprise bargaining started, I think. Are we talking mid-90s?

PN192

You are familiar with the rates in agreements in the industry generally?‑‑‑I am aware of the diversity of the rates of pay in this industry.

PN193

Are the rates of pay for Catholic and government schools in Victoria, leaving aside payments for positions of responsibility, identical?‑‑‑They are.

PN194

But those in independent schools differ?‑‑‑That's correct.

PN195

Is it the case that the majority of agreements in independent schools offer a small premium on prevailing industry rates to assist independent schools in recruiting teachers?‑‑‑Yes.

PN196

To some - - -?‑‑‑But I would say that it's not for that purpose; it's because they choose to pay a slightly higher salary to their staff, not for the purpose of recruiting, but choose to pay a higher salary to their staff.

***�� KERRY KNOPP�� XXN MR ODGERS

PN197

Yes, thank you, and do some independent schools provide for school holidays without deduction of pay in excess of those provided by Catholic and government schools?‑‑‑Yes, they do.

PN198

Would it be fair to say that, generally, independent schools are a more attractive proposition for teachers seeking better rates of pay and conditions?‑‑‑I think it would depend on the school and I think it would depend on the teacher because someone may not wish to teach in a school of a particular religious denomination or may not have the qualifications to teach in a Montessori or a Steiner school. So, I think it's like any recruitment exercise, it's a matching of the employer and the employee with respect to what they're each seeking from the employment relationship.

PN199

I will ask the question again. If you were a teacher seeking work and you were simply seeking a better rate of pay than the market rate, would independent schools be a more attractive proposition?‑‑‑I don't think I can answer that question. If the only thing that the teacher wants is a higher rate of pay, then possibly, for that particular teacher, the answer is "Yes".

PN200

That is the question that is being asked?‑‑‑Well, the answer is "Yes" in that case.

PN201

In most circumstances, do schools have an interest in reducing or keeping to a minimum the cost of replacing employees?‑‑‑I would assume that would be good business practice.

PN202

In this industry, how do employers seek to reduce or minimise their cost of replacing employees?‑‑‑I am not an HR manager in a school, so, therefore, I can only repeat to you what they tell me or the process that they go through when they seek to replace a staff member who has resigned. Is that the process that I should be outlining in response to the question?

PN203

My question is: do you agree with me that schools have an interest in reducing or keeping to a minimum the cost of replacing employees and you have said "Yes" and I have said, "Well, how do they do that typically"?‑‑‑First of all, they would look to see whether or not there are any staff members currently employed who could actually pick up a load. That can be quite difficult with a situation where a staff member might be under-allocated by one or two periods, which is one or two 50-minute lessons in a week, because if the person needs to pick up a year 8 maths class and there are five 50-minute lessons in the week, that person won't have that capacity.

***�� KERRY KNOPP�� XXN MR ODGERS

PN204

Yes, but my question doesn't go to the difficulties that employers have in reducing or keeping to a minimum the costs of replacing employees. Your statement deals with that. My question is: how do schools, in the ordinary course of events, seek to reduce or keep to a minimum the cost of replacing employees?‑‑‑I'm sorry but I don't actually understand the answer that you're seeking from me. I don't understand the question. I don't know how it needs to be answered. I do apologise.

PN205

Can schools offer vacant positions that are part time to existing employees?‑‑‑They can.

PN206

Can positions be filled by offering work to current and former replacement employees?‑‑‑They could, yes.

PN207

Can positions be filled by appointing satisfactory, if unsuccessful, applicants for previous vacancies?‑‑‑If those applicants are still available and accept an offer of employment.

PN208

Are there schools in Victoria that have been granted a system status for funding purposes?‑‑‑Yes, there are.

PN209

Do those schools have a higher degree of interdependence and cooperation?‑‑‑That's one of the conditions of being a system of employers.

PN210

To your knowledge, are they able to use this advantage to alleviate costs when they replace staff?‑‑‑I have not heard of that being a situation or a process that they use.

PN211

Which systems of schools in Victoria in the independent sector have been granted system status for funding purposes?‑‑‑There is a Lutheran school system, there's an Ecumenical school system and there is a Seventh Day Adventist school system.

PN212

And you don't know anything about any systems of internal redeployment?‑‑‑If I speak about the Seventh Day Adventist school systems, they are a central employer. The individual school does not - and I think there's five schools - the individual school does not employ their own staff, they are all employed centrally by the Victorian Conference of the Seventh Day Adventists. Each of the other - the other two systems, each school employs their own staff.

***�� KERRY KNOPP�� XXN MR ODGERS

PN213

But in the case of Lutheran schools, is the agreement a school by school agreement? Are the agreements that have been - - -?‑‑‑I'm sorry?

PN214

Are the agreements - - -?‑‑‑I don't know what's meant by that.

PN215

Are the agreements that have been struck in relation to Lutheran schools in Victoria agreements with individual schools or agreements with the system, a multi-employer agreement?‑‑‑It's a multi enterprise agreement, but each of the schools is an individual employer. They operate separately but under the - with the support and guidance of the Lutheran Schools Office.

PN216

Going to paragraph 49 of your statement in respect of casual replacement teachers, does the award contain a cap on the period a casual teacher can be employed?‑‑‑It does.

PN217

What is that cap?‑‑‑A casual teacher may be employed for up to 20 consecutive days or one school term, by mutual agreement between the casual teacher and the employer.

PN218

In respect of paragraph 50 of your statement, why would the cost of engaging a CRT teacher in circumstances of short notice be greater than the standard cost of doing so?‑‑‑The reference to the $430 in paragraph 50 will be from a school where they use an agency. So, if the school does not have a bank of CRTs or does not have a suitable CRT, e.g. it might be a physics vacancy, they will approach an agency. The agencies charge a fee on top of what the agency provides to the casual teacher engaged by that agency. So, that's the reason for that higher figure of $430. I might also point out that these were the rates that schools provided back in January 2019.

PN219

But it is open, as you say, to schools to maintain their own lists and avoid agency costs?‑‑‑If that's at all possible. If you are a school in Hamilton in Victoria - - -

PN220

Is the answer "Yes" or "No"?‑‑‑Yes.

PN221

Many schools have gone to a great deal of time and trouble over many years to assemble their own pool of casual and replacement staff.

PN222

JUSTICE ROSS: Are you asking a question or are you making a statement.

PN223

MR ODGERS: Yes, sorry, your Honour.

***�� KERRY KNOPP�� XXN MR ODGERS

PN224

Is it true that many schools have expended considerable energy in assembling their own pool of casual and replacement staff?‑‑‑I think a school would have to answer that question. I apologise for not being able to answer it.

PN225

Is it true that country schools, because of the difficulty in recruiting teachers, would typically maintain their own pool of casual and replacement staff?‑‑‑That might be the case. Again, it would be an individual school answer on that question.

PN226

At paragraph 53, you point to the difference between spending $300 advertising on SEEK and $3000 advertising in The Age, but that's a discretionary decision for schools, is it not?‑‑‑If there's no one in the bank, if there was no one in a teacher agency that supplies a casual teacher or a fixed term teacher and the school therefore needs to advertise, it will advertise on its own website as a rule and then, if that doesn't generate an appropriate or suitable applicant/person for the position, then the next option is to advertise, using The Age or using a recruitment website.

PN227

Suitability is a question of subjective judgment, is it not?‑‑‑Yes.

PN228

So it may be that any number of teachers applied but an employer considers none of them suitable?‑‑‑As with any advertisement for any job, that could well be the case.

PN229

Yes. Going to paragraph 54 of your statement, are you implying in paragraph 54 that replacement teaching staff, fixed term employees, would be the subject of an induction?‑‑‑It's essential to induct any person into a school. It's necessary for them to be inducted into the school's child-safe policy, child-safe standards, anaphylaxis, they need to have ASPA management, they need to know how to use an AIT system, they need to know how to use the school's disciplinary process with students. There is an induction for any staff member who steps into a school, particularly if they are going to take on the role of a teacher for more than a day.

PN230

So the financial costs, which you say could be up to $2000 per new employee, could you tell the Commission how that $2000 figure would be spent, how it would be apportioned?‑‑‑The $2000 was provided to me from respondents to the surveys. It's not a figure that I have made up, it's not a figure that I can pull apart either. I think they have looked at the - - -

PN231

JUSTICE ROSS: No, that's fine, Ms Knopp. If you don't know the basis of it, then don't speculate?‑‑‑Thank you.

***�� KERRY KNOPP�� XXN MR ODGERS

PN232

MR ODGERS: $2000 is around about the full-time gross weekly salary of a teacher at the top of the scale market rates in Victoria, is it not?‑‑‑It is.

PN233

Thank you. You say, in paragraph 55:

PN234

A number of schools didn't specify individual recruitment costs but indicated that total recruitment costs could be up to $35,000.

PN235

How many schools indicated that total recruitment costs could be up to $35,000?‑‑‑I would have to go back and review the survey to provide an answer to your question.

PN236

Can you remember whether it was a large number?‑‑‑No, it wouldn't have been a large - it wasn't a large number.

PN237

Going to paragraph 60, you say that:

PN238

Schools reported that there would be an effect on teacher morale by the giving of short notice.

PN239

Does it follow that morale would be boosted by advising those teachers who remain in the school that pay has been docked for the employee who gave short notice?‑‑‑I'm not sure I should speculate on that.

PN240

At paragraph 64 of your statement, you indicate that:

PN241

60 per cent of schools indicated that they sometimes, or always, withhold some amount of pay.

PN242

Given your other answers, do you know or can you remember how many schools said they always withhold some amount of pay in the event of short notice?‑‑‑I can't give a percentage. It's not high. They use their discretion, they look at the circumstances, they look at whether the person had the capacity to do so or whether it was beyond the person's capacity to actually provide the seven-term weeks' notice.

PN243

Well, how - - -?‑‑‑My discussions with schools - - -

***�� KERRY KNOPP�� XXN MR ODGERS

PN244

How is the deducting from pay in the event of short notice consistent with the use of a discretion?‑‑‑Sometimes it's discretionary.

PN245

Sometimes is indicative of the use of discretion, but my question is: how is always withholding pay consistent with the use of a discretion?‑‑‑But that always related to 60 per cent, it doesn't relate to the other 40 per cent. So, the other 40 per cent, quite clearly, don't have that view, they are - - -

PN246

That's not my question.

PN247

JUSTICE ROSS: Yes, but, also, it's not your evidence, Ms Knopp. Your evidence is:

PN248

60 per cent of schools indicated they sometimes, or always, withhold some amount of pay.

PN249

You are not talking about the other 40 per cent, you are talking about 60 per cent responded that they sometimes, or always, withhold the required notice, or an amount of pay referable to the notice not given?‑‑‑Yes, I did say that. That was what the survey result was.

PN250

MR ODGERS: In conclusion, that's not what - - -?‑‑‑Can I have the question again?

PN251

Yes. How is "always withholding some amount of pay" consistent with your earlier evidence that employers always exercise discretion as to whether or not there would be a withholding?‑‑‑In terms of the 60 per cent that's there, I can't indicate the "always", what proportion of it was always. The two were combined.

PN252

That's not my question?‑‑‑But, I know - - -

PN253

Just presume that there is a percentage?‑‑‑I know it's not your question. "Always" means that you aren't exercising discretion. I appreciate that.

PN254

Thank you?‑‑‑I understand that.

***�� KERRY KNOPP�� XXN MR ODGERS

PN255

Thank you. So, in conclusion, in relation to paragraph 66 of your statement, you say that the schools do exercise discretion, often do so, for reasons that you list as including, amongst other things, illness, injury or family reasons. Now, is it the case that where an employee gives short notice in respect of illness, injury or family reasons, the successful applicant for the new vacancy will always have to give short notice to their school?‑‑‑That's if they're currently employed by a school.

PN256

Yes. One follows the other, does it not?

PN257

JUSTICE ROSS: Well, only if they are currently employed.

PN258

MR ODGERS: If they are currently employed. So, is the penalty for successfully applying for a job in December or January the loss of a part or a substantial part of the holiday pay from your current employer?

PN259

JUSTICE ROSS: No, because it doesn't extend to holiday pay. We have already dealt with - you can't deduct from the NES. What is in issue here is the - - -

PN260

MR ODGERS: Yes, I understand what - the problem in this instance, your Honour, is, if the Bench looks at the award, and it's not clearly - I should not have used the term "holiday pay" - it's not clear as to when annual leave is taken in this award.

PN261

THE WITNESS: May I provide some information about that?

PN262

MR ODGERS: Of course?‑‑‑The award clause does actually state that, in the case of a teacher who is continuing on into the next school year, that annual leave, the NES annual leave, is taken in the four weeks immediately following Term 4 of the school year. We have an unusual scheme of employment in this award. It is different to almost every other industry sector. Teachers basically attend for 39 or 40 term weeks in a year, they have four weeks of annual leave that falls during the non-term weeks. Teachers are paid for the non-term weeks. The hours of work can be averaged over the school year, which is a period of 12 months. So, in effect, the concept of school holidays for teachers doesn't exist; they actually just are not required to attend the workplace and undertake work during the non-term weeks, including, of course, the weeks that are designated to be annual leave and those days that actually fall as public holidays.

PN263

Ms Knopp, are you saying that employers don't deduct in the event of short notice from any payment that would be made or due to an employee in respect of holiday pay?‑‑‑I'm not sure what you mean by "holiday pay".

***�� KERRY KNOPP�� XXN MR ODGERS

PN264

If someone gives notice, what is the current circumstance? If someone gives notice on 1 January, for example, and they would have been paid their salary for January on 15 January, do employers deduct, if short notice is given in those circumstances, or do they not deduct because that's holiday pay?‑‑‑They probably would deduct.

PN265

Thank you?‑‑‑There's roughly - - -

PN266

I have no further questions, your Honour.

PN267

JUSTICE ROSS: All right, thank you. Any re-examination, Mr Monroe?

PN268

MR MONROE: Just a few short questions, your Honour.

PN269

JUSTICE ROSS: All right.

RE-EXAMINATION BY MR MONROE�� [10.31 AM]

PN270

Ms Knopp, you were asked about your brief evidence in respect of some of the other states. Could you please indicate whether the concerns identified in the remainder of your statement are generally applicable to those states or in what way they may be?‑‑‑There is significant concern in South Australia and Tasmania in relation to the withholding of moneys being reduced to one week. For the schools in New South Wales that follow the award, also there was significant concern raised there.

PN271

Thank you, Ms Knopp. You were asked about - it was put to you, I should say, that there were no shortages of teachers in Australia. Can you speak to any specific shortages of teachers in Australia from your own knowledge?‑‑‑Our schools advise us that it's difficult to recruit for stem subjects, which are science, technology, engineering and maths, difficult to recruit for LOTE subjects - languages other than English - particularly Mandarin, Chinese and Japanese, they find it difficult to recruit for special education teachers and, in some cases, primary teachers, because primary teachers will specialise in teaching either lower levels or upper levels of primary, they don't always want the class that might be available to them.

***�� KERRY KNOPP�� RXN MR MONROE

PN272

The information that has been provided by our schools, Victorian schools, isn't terribly different to the information that is available through the Victorian Department of Education and Training, Teacher Supply and Demand Report, which is produced almost annually. The last report was 2016 and it finds exactly the same, and that report, for many years now, has been referring to shortages in those areas.

PN273

I would also point out that the capacity to recruit is very much dependent upon your location. So, while there might be an understanding that Australia is producing enough teachers, it really depends on where they are and where the vacancies are in order to be able to recruit an appropriately qualified person with appropriate experience for the job that's being advertised.

PN274

MR MONROE: Thank you. Finally, Ms Knopp, it was put to you that there were a number of other ways in which it was possible for schools to reduce the costs of recruitment. It was put to you part time and offering part time work and offering the job to unsuccessful prior applicants. Could you please explain what difficulties there are? You were mentioning difficulties in those arrangements?‑‑‑Okay. If you're attempting to obtain or requiring or asking a current staff member to undertake additional hours, it may be that the part-time teacher, who might be working at, say, point 5 of a full-time load, might be interested in working additional hours.

PN275

It's going to be a question as to whether or not that can fit into the timetable or whether the timetable can be adjusted because it might be that Year 9 English is on five days per week at times when the teacher is already teaching another class, or, alternatively, the timetable cannot be altered because that would affect the employment and the attendance times of part-time teachers and subjects are blocked in timetables. So, it's a fairly difficult exercise to use existing staff members, including those that might only be under allocated by one or two periods in a week, to fit into a timetable to replace a teacher who has resigned at short notice and left a full-time load.

PN276

It may also be that you will not have the subject specialisations that are necessary, if it's a secondary school, to be able to do that. So, it can be quite difficult doing anything more than very, very short term usage of existing staff. Almost always it's necessary to find a casual relief teacher or, preferably, a fixed term teacher, because with a casual relief teacher, it's a day by day engagement, they can decide that they won't turn up on a day that they might have agreed to work, whereas a fixed term teacher might take a role for three weeks or four weeks or a whole term, if that is what is required.

PN277

MR ODGERS: Thank you, Ms Knopp. No further questions, your Honour.

PN278

JUSTICE ROSS: Nothing further for the witness? Thank you, Ms Knopp, you are excused.

***�� KERRY KNOPP�� RXN MR MONROE

<THE WITNESS WITHDREW�� [10.36 AM]

PN279

We have had the opportunity to read the written submissions that have been filed by both parties and you don't need to repeat those to us.

PN280

Mr Monroe, have you got a copy of your submission and of the IEU's written submission?

PN281

MR MONROE: Yes, your Honour.

PN282

JUSTICE ROSS: Can I take you to paragraph 3 of your submission.

PN283

MR MONROE: Yes, your Honour.

PN284

JUSTICE ROSS: You say there that your submission is that:

PN285

It is reasonable, in the circumstances, for schools to be authorised to deduct -

PN286

and it is this expression that I want to take you to -

PN287

from moneys due to a teacher, the full amount of notice not provided.

PN288

You then say that you have attached to your submission the proposed draft determination. When you say "moneys due to a teacher", I have taken it that what you mean there is deduct from the wages due to a teacher under the award, because that's what your draft determination says. Is that right?

PN289

MR MONROE: Yes, your Honour. Could I please draw your Honour's attention to one matter that I believe was foreshadowed by Mr Odgers. In this award, salary - I don't propose to encourage the Bench to depart from its decision about the permissibility of deducting from the NES, but in this award, there is a concept of holiday pay that's distinct from the NES, which is the accrued salary that has been averaged over the worked weeks of a term.

PN290

JUSTICE ROSS: Well, if you are not wanting us to depart from what we have already said about the NES, we don't need to deal with that.

***�� KERRY KNOPP�� RXN MR MONROE

PN291

Can I take you to the IEU's submission. It is really this point that's raised at paragraphs 5 through to 7. The short point is this, that the award provides that wages are paid either fortnightly or every four weeks or every month. Where they are paid every four weeks, you make a payment of two weeks in arrears and two weeks in advance and where it's paid monthly, you pay one half in arrears and one half in advance, so, at any one time, the most wages that could be due to a teacher would be two weeks.

PN292

MR MONROE: With respect, your Honour, that's the point I was trying to make a moment ago, and if I could take you to clause 22 of the Teachers Award, there is provision in that award for the accrual, effectively, of salary, not leave, to be paid during non-term weeks during which an employee is not required to attend. It is not NES, or it is calculated together with the NES entitlement to annual leave.

PN293

JUSTICE ROSS: No, it's not calculated together with it, it incorporates the NES entitlement.

PN294

MR MONROE: Apologies, your Honour, that's correct, but it is specified that there are four weeks of the NES entitlement to annual leave but there are also additional amounts of this leave, if that makes sense, your Honour.

PN295

VICE PRESIDENT HATCHER: Mr Monroe, to be clear, does this award provide for any entitlement to annual leave in excess of the NES?

PN296

MR ODGERS: No, your Honour.

PN297

VICE PRESIDENT HATCHER: So, at any given time, I think you accepted that in terms of wages, the maximum amount owing would be two weeks or maybe two weeks and one day in the case of a monthly salary?

PN298

MR MONROE: Your Honour, with respect, under this clause of the award, the pro rata entitlement for an employee whose employment is terminated prior to the end of a year does allow for a greater amount of salary to be paid out at that time, incorporating, as Your Honour Justice Ross noted, the NES entitlements within that payment, but there is an additional amount that is over and above that NES payment.

PN299

JUSTICE ROSS: So where do we find that?

PN300

MR MONROE: That's at clause 22 of the award.

PN301

JUSTICE ROSS: 22 point?

PN302

MR MONROE: Calculations of payments, 22.3

PN303

JUSTICE ROSS: 22.3.

PN304

MR MONROE: But also clause 22 generally.

PN305

COMMISSIONER HUNT: So is it the case that the April, July and September school holidays, the teacher is being paid wages during those weeks where they are not teaching?

PN306

MR MONROE: That is correct.

PN307

COMMISSIONER HUNT: And the same for most of January because the four weeks - - -

PN308

MR MONROE: Most of the period of time that's not taken, there are four weeks of that time that are attributed or specified as annual leave that I believe is specified in clause 21.

PN309

COMMISSIONER HUNT: Yes, but that's from the last day of school, which would typically be early to mid-December.

PN310

MR MONROE: Yes, that's correct.

PN311

JUSTICE ROSS: Is there anything further, Mr Monroe, that you wanted to add to your written submission?

PN312

MR MONROE: With permission, to just address several points raised in the IEU's submissions in response to our written submissions. Bear with me for one moment. As Ms Knopp's statement makes quite clear, the unique circumstances of the Teachers Award but also the independent school sector required that schools find the right teacher, not just any teacher. As Ms Knopp noted, this means that they must be qualified and not necessarily registered but at least granted permission to teach by an appropriate body, have the appropriate skills and qualifications for the particular classes taught, have experience in the particular teaching methods utilised by the school and experience with the particular cohorts of the school such as Year 12 students, primary students, accelerated students, students with a disability or behavioural issues and match the school's ethos, such as a religious ethos and/or educational philosophy.

PN313

With respect, the IEU's submissions only address these requirements in a limited fashion, dismissing as self‑imposed the need for suitability to a school's ethos and their religion. They ignore the limitations that arise due to short notice. As Ms Knopp noted in her evidence today, when short notice is given, class allocations have been made, a replacement teacher needs to be able to teach the particular class that was taught by a teacher who has given short notice or rearrangements need to be made.

PN314

Some or all of these difficulties are relevant to all independent schools, but they are exacerbated when schools are in a regional location and, as Ms Knopp noted on re-examination, there are a number of particular subjects and particular types of teaches who are in short supply, regardless of the Department of Jobs figures that are quoted by the IEU.

PN315

In respect of the cost of recruitment for short notice, the IEU has made a number of submissions regarding these costs. I don't propose to deal with each in turn, but, as a general comment, we note that the IEU suggests, without evidence, that schools could incur fewer costs and that some schools do. This submission ignores the practical reality of the business of an independent school that was spelt out by Ms Knopp. The submissions effectively suggest that if an employee teacher leaves a school with short notice, the school, students and school community should accept any available teacher, regardless of experience, qualifications in the appropriate subject and understanding of the school's pedagogy and/or ethos. They suggest that all options which are illegally permitted under the award are practically available to the school.

PN316

The Associations do not suggest that all schools will incur all of the costs that are referred to by Ms Knopp at all times. What is submitted is that the concern that was held by the Full Bench in its decisions of June 2018 and December 2018 that a deductions clause would allow for deductions that are disproportionate to the amount of loss suffered by an employer is not relevant in this industry, that the evidence given demonstrates that it is common and foreseeable that schools will incur those costs and, indeed, costs in excess of that amount.

PN317

Finally, I would just like to address the fairness and proportionality concerns raised by the IEU. The Associations' submissions regarding the one-week cap do not assume that employees will only give one week's notice, but they note the difficulties in enforcing the seven-week notice period against those who do give short notice and they note circumstances where there are real and significant cost consequences for schools when this occurs. The IEU submits that those who cannot give the full period of notice almost always fail to do so because of factors beyond their control such as illness, caring responsibilities or a forced change in residence. Those submissions are again unsupported by the evidence. The Associations note Ms Knopp's evidence that schools exercise their discretion when they do so and there were several examples where schools did not withhold pay in such circumstances despite significant costs.

PN318

In conclusion, the Associations submit that the one-week cap would be a disproportionate limitation within the context of the Teachers Award specifically. The specific circumstances of independent schools, the need to, by virtue of regulation, have a registered or permitted to teach teacher in front of every class, effectively confines schools to a set FTE that they must meet in terms of classroom time.

PN319

The particular requirements of parents in the school community and students in independent schools requires that schools have the right teacher and it's not sufficient to just take any teacher, and the notice requirements in the award and the specific requirements of the pro rata salary arrangements in clause 22 of the award provide reasons to diverge from the standard clause notice of termination in the Teachers Award specifically.

PN320

As it please the Commission.

PN321

JUSTICE ROSS: Thank you, Mr Monroe. Mr Odgers, is there anything you want to add to your written submission?

PN322

MR ODGERS: Very briefly. Your Honour, more than 70 per cent of the employers whose employees are covered by this award have expressed no opposition to the Commission's provisional views. Today's proceedings went substantially to Ms Knopp's evidence in respect of a survey that was distributed. That survey was clearly commissioned in response to the Commission's provisional findings in this matter. Ms Knopp's evidence is that the respondents were advised of this fact in advance. Neither that correspondence, the survey questions or the responses were provided to the Commission.

PN323

It is very difficult for us to interrogate that survey data in relation to the claims that are made without specifics as to who the respondents are. There is no evidence as to any comparison with the costs of recruiting professional employees elsewhere.

PN324

The gist of our submissions is that the vast majority of the factors that are said to be particular to this particular sector of industry would apply anywhere and that the majority of the decisions taken in recruitment that incur additional costs are discretionary decisions.

PN325

Apart from that, we rely on our submissions and, in that particular respect, I restate our preparedness contained within those submissions to accept an extension of the withholding period on a pro rata basis given that the Commission would not have examined the appropriate period of withholding in respect of any award with a notice period of seven weeks. That preparedness remains, your Honour.

PN326

If the Commission pleases.

PN327

JUSTICE ROSS: Thank you, Mr Odgers, thank you both for your submissions and, Ms Knopp, for your evidence. We will reserve our decision in respect of this matter. We will adjourn until 11 am when the next matter is due to be heard.

SHORT ADJOURNMENT�� [10.51 AM]

RESUMED�� [11.06 AM]

PN328

JUSTICE ROSS: Can I have the appearances, please.

PN329

MR S BULL: If the Commission pleases, my name is Bull, initial S, and I appear with my colleague, Ms Dabarera.

PN330

MR B FERGUSON: If the Commission pleases, Ferguson, initial B, for the Australian Industry Group.

PN331

JUSTICE ROSS: Thank you. I take it from the material filed recently - do we have anyone interstate?

PN332

MS K THOMSON: Yes, sorry, your Honour, in Newcastle.

PN333

JUSTICE ROSS: Thanks, Ms Thomson.

PN334

MS THOMSON: Thank you.

PN335

JUSTICE ROSS: Anybody else? No? All right. Mr Bull, you've withdrawn your earlier objection to the deletion of clause 24.3(c), is that right?

PN336

MR BULL: That's correct.

PN337

JUSTICE ROSS: All right.

PN338

MR BULL: Do you want me to sort of walk you through what is now our position?

PN339

JUSTICE ROSS: Yes, what - well I'm sort of more interested in what's the issue between the two of you and I understand ABI supports Ai Group's submission, so what's - where are we now about this matter?

PN340

MR BULL: I think we may have agreement in relation to termination, is that - - -

PN341

MR FERGUSON: We do in relation to termination because you've withdrawn. We both say leave it to the NES.

PN342

JUSTICE ROSS: You both agree we delete (c).

PN343

MR FERGUSON: Yes.

PN344

JUSTICE ROSS: Yes, and leave it to the NES, okay. What's the nub of the contest?

PN345

MR BULL: Well we've expressed a position in relation to ‑ ‑ ‑

PN346

JUSTICE ROSS: No, no, I know that but - - -

PN347

MR BULL: Maybe it's for my friend to express his position.

PN348

JUSTICE ROSS: Sure.

PN349

MR FERGUSON: It may be that I'm not entirely comprehending United Voice's position that they particularly - - -

PN350

JUSTICE ROSS: Well I'm not entirely apprehending - - -

PN351

VICE PRESIDENT HATCHER: I'm not either, so.

PN352

JUSTICE ROSS: - - - either of them about where you are up to now because the thing's been going on for years.

PN353

MR FERGUSON: No, no. It's evolved and there are layers to it and every time you look at it another problem raises its head.

PN354

JUSTICE ROSS: No, well that's exactly right that's why I've asked the question.

PN355

MR FERGUSON: I think, and we've tried to have some discussions, but I'm not sure I'm clearer in light of those so let me try and deal with it this way, I think - - -

PN356

JUSTICE ROSS: Yes.

PN357

VICE PRESIDENT HATCHER: Does AiG agree with the exposure draft?

PN358

MR FERGUSON: Yes, we did.

PN359

VICE PRESIDENT HATCHER: You did?

PN360

MR FERGUSON: Apart from one issue that's now raised it's head in relation to how you calculate the 17 and a half per cent loading. Well let me say this, does the members at the Bench have the exposure draft there?

PN361

JUSTICE ROSS: Yes.

PN362

MR FERGUSON: As you go to it, the first issue is how you calculate the payment absent any 17 and a half per cent loading or any additional obligations under 25.3(b). What we had said is look, we accept that you get effectively a payment which must include the payments in (a)(i), (ii) and (iv) which is the allowances and the part - well the leading hand and first aid allowance and the part-time allowance. We said you should delete (iii) because it includes penalty rate payments and shift loadings.

PN363

JUSTICE ROSS: That's the shift work and the roster ordinary hours, yes.

PN364

MR FERGUSON: That's right, yes, and what we say is that the way you calculate that is you apply either the 17.5 per cent loading or those various penalties, whichever is the greater.

PN365

JUSTICE ROSS: All right, so you accept that the ordinary rate upon which you would apply the 17.5 per cent includes the classification rate - - -

PN366

MR FERGUSON: Yes.

PN367

JUSTICE ROSS: - - - leading hand, first aid and the part‑time allowance which is an unusual feature of this award.

PN368

MR FERGUSON: That seems to be the status quo.

PN369

JUSTICE ROSS: Yes, okay, so you accept that so there's no dispute that 17 and a half per cent applies to that amount. The issue then is what do you do with shift work penalties and penalties associated with ordinary hours on weekends and the essence of your position is well consistent with other awards you wouldn't get both the shift work loading and the 17 and a half per cent loading. You would get one or the other depending on which one's the higher.

PN370

MR FERGUSON: That's right but there's one leap in that which is how you apply the 17 and a half per cent loading which I think it wasn't until I saw Mr Bull's submissions that - I think we may have addressed it earlier on and then it might have fallen off the radar but the 17 and a half per cent loading is phrased in his submissions as being applied to the ordinary hourly rate. The ordinary hourly rate will have a meaning in modern awards going forward and in terms of including all purpose allowances or any other allowance which is said to be part of that. I don't know that there are any such allowances.

PN371

JUSTICE ROSS: Well I accept the - here, depending on how you characterise it, the part-time allowance would be such an allowance.

PN372

MR FERGUSON: Which is said, I think, to be payable in relation to ordinary hours worked rather than for all purposes of the award. There may be a history to that that I'm not familiar with but we'll have that argument anyway as we go through the plain language process undoubtedly but I think when you go back to the Cleaning Services Award, as it's currently framed, the 17 and a half per cent loading is - well it's dealt with inconsistently through the clause but it's, in various places, said to be payable on the ordinary time rate of pay.

PN373

The ordinary time rate of pay is contemplated as something separate to a rate which includes those allowances. The 29.3 of the current award says that for annual leave purposes you get the ordinary time rate of pay and addition it specifies those amounts there, so it contemplates the ordinary time rate of pay as being something that does not include those allowances so when you then look at 29.4, as I said to you, it says that the 17.5 per cent is calculated on the ordinary time rate of pay and then to add further context, at paragraph 29.4(b) it contemplates it being calculated on the minimum rates in the award.

PN374

It seems looking at the context, this is the document and the words, that the loading historically has just been applied to the award rates, if you will. The classification rates using that short language, so I think the only issue we then say with the exposure draft is you delete 25.3 so that you don't have this double dipping in relation to penalty rates and loadings and you delete the bracketed words in 25.3(b). That will then mean that at some point there will have to be work done on what ordinary hourly rate means in this award and that might include an argument about whether there are any all purpose allowances or allowances that should - - -

PN375

VICE PRESIDENT HATCHER: I didn't print out the whole of the exposure draft but does it set out in the schedules what the ordinary hourly rates are?

PN376

MR FERGUSON: No, and I think that's because it's going ‑ well there is not necessarily agreement that there's any all purpose allowances and so where awards don't have an all purpose allowance there's no definition for ordinary hourly rate. I don't know whether a shorter way of doing that would be to just reference the minimum rates, 17.5 - - -

PN377

VICE PRESIDENT HATCHER: But you say the ordinary hourly rate is the minimum rate.

PN378

MR FERGUSON: Yes.

PN379

VICE PRESIDENT HATCHER: From your perspective, if we just said minimum hourly rate and remove the words in the brackets that would be perfectly clear?

PN380

MR FERGUSON: Yes, your Honour, that's the accurate way forward, and that removes the double dipping but adds clarity to everything.

PN381

JUSTICE ROSS: We're still left with the problem about what do you do with the 17 and a half per cent. Seventeen and a half per cent of what?

PN382

MR FERGUSON: Well taking the Vice President's approach, it'd be 17 and a half percent of the minimum rates would be our position. We'd left ordinary hourly - well I hadn't proposed to prosecute that position just in case there was an argument about whether there was an all purpose allowance but I can't see that there is.

PN383

JUSTICE ROSS: All right.

PN384

MR FERGUSON: I don't know if there's a disagreement about that position from the United Voice submissions or not.

PN385

MR BULL: Are we contemplating substituting minimum hourly rate for what's ordinary hours of work?

PN386

VICE PRESIDENT HATCHER: Well what I was talking about in 24.3(b)(i) of the exposure draft, it could be varied to say 17.5 per cent of the employee's minimum hourly rate, full stop, or semicolon, so.

PN387

MR BULL: We'd say that'd be a reduction.

PN388

VICE PRESIDENT HATCHER: Why's that?

PN389

MR BULL: Beg your pardon?

PN390

VICE PRESIDENT HATCHER: Why's that?

PN391

MR BULL: At the least, the 17.5 per cent should be calculated on the basis of the specific definition which the current award has for ordinary time so - - -

PN392

VICE PRESIDENT HATCHER: You mean the 24.3(a) definition?

PN393

MR BULL: Correct.

PN394

VICE PRESIDENT HATCHER: But that's not an ordinary ‑ that's not defined in the ordinary hourly rate as defining the base rate for the purpose of the NES.

PN395

JUSTICE ROSS: You mean 29.3 of the Cleaning Award?

PN396

MR BULL: Yes, I'm just looking - getting it - it's confusing but, yes, and there's separate clauses in the current award so - and I need to preface any - - -

PN397

JUSTICE ROSS: Yes, I see.

PN398

MR BULL: - - - comments I make in relation to the provisions of this award concerning annual leave. In a tolerable sense, they are extraordinarily complex and different outcomes can be gleaned by looking at the various provisions and attempting to fit them together. We say that - - -

PN399

VICE PRESIDENT HATCHER: You've got - just so I understand this, so the current award, 29.3 - - -

PN400

MR BULL: It's got a definition of ordinary pay.

PN401

VICE PRESIDENT HATCHER: - - - defines ordinary pay and then where's the leave loading provision?

PN402

MR BULL: Well we say that that - - -

PN403

VICE PRESIDENT HATCHER: No, what numbered clause is the leave loading provision?

PN404

MR BULL: Sorry. If you look at the next one it's 29.4.

PN405

VICE PRESIDENT HATCHER: Right. I see.

PN406

MR BULL: If you were a full-time employee and you weren't getting the leading hand allowance, you weren't getting the first aid allowance, you weren't working morning or evenings or on the weekend, then, yes, you would get 100 per cent multiplied by 17.5 per cent.

PN407

JUSTICE ROSS: 100 per cent of what?

PN408

MR BULL: Beg your pardon?

PN409

JUSTICE ROSS: 100 per cent of what?

PN410

MR BULL: The base rate, in terms of the minimum rate that the classification - - -

PN411

JUSTICE ROSS: The minimum classification rate?

PN412

MR BULL: Correct.

PN413

JUSTICE ROSS: Yes.

PN414

MR BULL: But the point is that's the - that's, if you like, the bottom and if you get a leading hand allowance, if you get the first aid allowance and so forth, we say that the multiplier of 17.5 per cent includes those amounts and that is, frankly we would submit, a more than tolerable interpretation of the current provisions of the instrument.

PN415

JUSTICE ROSS: Is that what employers are actually doing now?

PN416

MR BULL: Having had a little bit of experience in this area, some do, some don't. We have an active dispute concerning this and I've got evidence indicating some do, some don't. But I have seen, for example, a major employer cleaning contractor does routinely include the leading hand allowance and so forth, and the first aid allowance, when the employees take leave. Just returning to the submission, and it was an attempt to try and unravel and present what we say is the logic of these provisions, the problem with the plain English draft, and it has, frankly, made it clearer but it doesn't completely unravel some of the problems, and obviously the brief, so to speak, is translated into plain language and that doesn't necessarily eliminate complexity or possible ambiguity, we - the fundamental issue is that the entitlement to leave, in terms of what you get, is significantly above the NES so you're always going to get more than the base rate when you go on leave.

PN417

There's an (a) and a (b) method and the (b) method, I'll get to that in a minute, but the (a) method is essentially a calculation where you get something called the employee's ordinary pay and we say then the employee gets 17.5 per cent of that when they take leave.

PN418

JUSTICE ROSS: What do you mean by the (a) and the (b) method? Does the award set out two methods or you're ‑ ‑ ‑

PN419

MR BULL: Yes, that's correct.

PN420

JUSTICE ROSS: Right.

PN421

MR BULL: They're called usefully 29.4(a) and 29.4(b).

PN422

JUSTICE ROSS: I see.

PN423

MR BULL: The logical problem, if you like, in the plain English draft is that there is a specific definition for ordinary time but logically it has no work to do with the (b) method. It only is there to supplement the (a) method and, if you like, the - and these things are very reasonable to happen. What has occurred with the plain English draft is that, that's syntactically or whatever, it's been - that definition's been connected to the (b) method. It shouldn't be.

PN424

The (a) method is we get this slightly deemed rate of ordinary pay which is according to the earlier definition which provides a definition for annual leave and that applies to the same method and then you multiply what you get by 17.5 per cent and that gives you what you get when you go on leave. The (b) method, we say, is if you happen to work when you take the leave, if your roster pattern is such that you would have gotten more than the (a) method, you get the (b) amount and it's likely that the (b) amount probably applies only to - if you're working particularly unsocial hours and so forth and probably sort of Easter and Christmas and so forth where people will take leave and your roster pattern would traverse a number of public holidays and so forth.

PN425

The (b) method will be probably seldom used and that's how we say the provisions function and the sort of - the logical problem is that in the plain English draft, rather than having the methods completely distinct they're connected and that creates confusion.

PN426

VICE PRESIDENT HATCHER: Well what's the confusion?

PN427

MR BULL: Well in the drafting - well if you look at the plain English drafting, these two methods are in (b) and there's sub-section (i) and (ii) and you've got the first bit and it's just not necessary - you shouldn't have them as part of the same sentence, so to speak.

PN428

VICE PRESIDENT HATCHER: Why not?

PN429

MR BULL: Because they're not. Because they're completely distinct, so it's about syntax, and because you see the (b) one functions completely by itself. It doesn't need to go anywhere near this peculiar definition of ordinary time but the (a) method does require this definition.

PN430

VICE PRESIDENT HATCHER: Sorry, but if you're a leading hand, why couldn't you get leading hand as part of your base annual leave pay and then if you're doing shift work and public holidays you get the (b) method?

PN431

MR BULL: Yes, if it all adds up. Because the point about the - it's - the (b) method - - -

PN432

JUSTICE ROSS: If it's greater, yes.

PN433

MR BULL: The (b) method would necessarily be the base rate, so 100 per cent, and then every separately identifiable amount, to use the jargon of the Act, that you're going to be paid for the period you're taking leave, so if you're getting - the leading hand allowance is, frankly, not that generous, I think it's $12 a fortnight or something so it's - you're not going to - it's not going to trip you into the (b) method by itself but, yes, certainly you'll get 100 per cent the leading hand allowance, the public holiday penalty, the evening - you do have evening and morning shift penalties which are up to 30 per cent and the nature of this work is that it's contract cleaning work. The people who come in and clean our offices and so forth often - when we're not there and some of that work takes place in the later evening and early morning.

PN434

JUSTICE ROSS: The (a) method is where you don't get any shift, weekend or public holiday penalties. You're not counting those?

PN435

MR BULL: Well no. We say that what - the reason why we say that you need to retain the penalty rates for shift work or rostered ordinary hours of work is that it's an established feature of the award - - -

PN436

JUSTICE ROSS: Sure, but I'm just looking at paragraph 7 of your submission, the third sentence there, and you talk about the two methods.

PN437

MR BULL: Just grab the document. Here it is, sorry. Sorry, your Honour.

PN438

JUSTICE ROSS: Just the third sentence, 'The 17 and a half per cent applies to the ordinary hourly rate of work not', that should be including I assume.

PN439

MR BULL: We're at paragraph 7, sir?

PN440

JUSTICE ROSS: Yes.

PN441

MR BULL: Sorry.

PN442

JUSTICE ROSS: The third sentence.

PN443

MR BULL: The first clause is 24.3(b)(i) which applies at the 17.5 per cent.

PN444

JUSTICE ROSS: The 17 and a half per cent loading is applied to the ordinary hourly rate of work not including any shift - - -

PN445

MR BULL: Yes, that's not - that's just where it doesn't make sense and there are - you could get a shopping list of sort of this doesn't go with that. The current award, if you try and do a logical analysis of it, it doesn't make sense, frankly, for anyone. Employers are - - -

PN446

JUSTICE ROSS: Well let's cut the rhetoric.

PN447

MR BULL: Well - - -

PN448

VICE PRESIDENT HATCHER: The seven that you say, the 17.5 per cent is applied to the amount that is derived from (a).

PN449

MR BULL: Correct.

PN450

VICE PRESIDENT HATCHER: I understand that. Now what's the (b) - what's the problem with the second?

PN451

MR BULL: The (b) method?

PN452

VICE PRESIDENT HATCHER: Yes.

PN453

MR BULL: The (b) method's quite clear, we say, because it's just if you happen to be rostered in a pattern that would be particularly, I suppose, advantageous in terms of penalty rates and so forth, you get what you would have got had you done the work.

PN454

VICE PRESIDENT HATCHER: But what's the problem with the exposure draft?

PN455

MR BULL: It's - well we think that in relation to - I don't think you should get rid of - in 24.3(a)(iii) there is a reason why that clause is there and it does actually supplement the entitlement because it'll increase the ordinary hours of work or what that is worth for the benefit of the (a) rate and it's problematic the way it's drafted because it does - the 24.3(a) definition, we say, is not connected to what I'll call the (b) method and there is a - - -

PN456

JUSTICE ROSS: Sorry, if I get a leading hand allowance and I work shifts, weekends and public holidays what do I get under the (b) method?

PN457

MR BULL: If - you probably don't get the (b) method unless ‑ because the (a) method's going to give you more because you're going to get 17.5 per cent of it.

PN458

VICE PRESIDENT HATCHER: Now they'll get the (b) method.

PN459

MR BULL: You will occasionally because the definition doesn't include public holiday penalties, so in the example I gave you, Easter and Christmas, you would potentially, on those - if you took the Easter off, Good Friday and so forth, and Christmas and New Year, you might find that you're in the (b) method.

PN460

VICE PRESIDENT HATCHER: If I'm in the (b) method and I'm a leading hand, do I get the leading hand allowance?

PN461

MR BULL: Yes, because that's just part of - that's one of the separately identifiable amounts that's going to make up your remuneration because that's a fortnightly - but you get that if you're just - leading hand, you get it every fortnight until you stop being the leading hand.

PN462

VICE PRESIDENT HATCHER: Yes, but I get that under (a).

PN463

MR BULL: It is factored into (a) because it will comprise the amount which then the 17.5 per cent is applied to.

PN464

VICE PRESIDENT HATCHER: No, I'm talking about the (b) method.

PN465

MR BULL: Yes, you get it in the (b) method too because the (b) method is just what you would have got, so there's no sort of 17.5 per cent. It's just - and it logically probably only applies in relation to periods where there's significant public holidays and also conceivably perhaps not shift workers, shift work covers evenings and mornings, so frankly probably where there's a few public holidays in a period of annual leave.

PN466

VICE PRESIDENT HATCHER: I'm still not understanding what the problem that you're identifying is with respect to the (b) method.

PN467

MR BULL: Well there is no problem with the (b) method because - - -

PN468

VICE PRESIDENT HATCHER: No, with the way it's expressed in the exposure draft. I'm still not understanding what is the problem.

PN469

MR BULL: Well there is no problem with the (b) method because - - -

PN470

VICE PRESIDENT HATCHER: No, with the way it's expressed in the exposure draft. I'm still not understanding what is the problem. I understand your point about the (a) method but I can't get what you're saying about the (b) method. Is it because (a)(iii) then doubles up with (b)(ii), is that the point?

PN471

MR BULL: Yes, well this was my - look, my friend used the term double dipping.

PN472

VICE PRESIDENT HATCHER: Is that the point?

PN473

MR BULL: Yes, and the only double dipping I could see was potentially because you've got a definition at the beginning, talking about ordinary hours of work, and that definition includes penalty rates, shift, blah, blah, blah, rostered hours, then you're getting that and then there's further talk of shift, weekend and public holiday rates.

PN474

VICE PRESIDENT HATCHER: All right, so - - -

PN475

MR BULL: That was what I perceived as the so called double dipping.

PN476

VICE PRESIDENT HATCHER: Right, okay, but is that the problem you're raising?

PN477

MR BULL: Partly.

PN478

VICE PRESIDENT HATCHER: What else is it?

PN479

MR BULL: Well it would be clearer if the two methods were more distinct because - - -

PN480

VICE PRESIDENT HATCHER: But what's the problem with the (b) method as it's expressed?

PN481

MR BULL: There is no problem because quite - apart from the fact that it's a bit confusing because it looks like you're applying the ordinary hours which already includes penalty rates and so forth then it asks you then further calculate shift, weekend and public holiday penalties. It includes two types of penalty which notionally seem to be already included in the ordinary hours.

PN482

VICE PRESIDENT HATCHER: It's the overlap between (a)(iii) and (b)(ii), is that the problem?

PN483

MR BULL: Not completely. It's - yes, it's the overlap between ‑ yes, sorry, I withdraw that. Yes, it's the overlap between this definition for ordinary hours which includes shift work and rostered Saturday and Sunday weekend penalties - - -

PN484

VICE PRESIDENT HATCHER: But that's been deleted in the exposure draft.

PN485

MR BULL: We don't - well we don't think it should be deleted because it actually does apply to the (a) method and it applies to the (a) method distinctly because it increases the amount, if you work these particular unsocial hours, on which the 17.5 per cent is calculated.

PN486

VICE PRESIDENT HATCHER: All right, so you want (a)(iii) back in?

PN487

MR BULL: Yes.

PN488

VICE PRESIDENT HATCHER: Right.

PN489

MR BULL: Well that's - we were asked to give a view about this because I perceive from the last decision that obviously there was some identified - there were issues with it and that - we were trying to provide what was some sort of solution to the problem.

PN490

VICE PRESIDENT HATCHER: Are you saying that the current provisions, you can get the penalty rates for shift work and weekend work and you get the annual leave loading on top of that?

PN491

MR BULL: If you regularly work those hours, and I don't know - it's not rhetoric but it's just reality, this will be typically maybe a part-time worker who was working 6 am, 5.30 to 9.30 doing a cleaning job and that's the remuneration they get, they get the morning penalty and so forth and it's, we say, a feature of the safety net that that then is reflected in what they get when they take annual leave.

PN492

VICE PRESIDENT HATCHER: Well how's that position consistent with what was stated in paragraph 55 of the decision of 8 November last year? You're asking us to depart from the provisional view, are you?

PN493

MR BULL: Beg your pardon?

PN494

VICE PRESIDENT HATCHER: Are you asking us to depart from the provisional view?

PN495

MR BULL: Well I understood that that was the whole - you asked us for our views about the provisional view.

PN496

VICE PRESIDENT HATCHER: All right.

PN497

MR BULL: The - look, the only sense in which we're suggesting that this Full Bench should depart from its provisional view is in relation to the 23(a)(iii). The suggestion we've made in relation to the 24.3(b) is meant to explain why there is justification, we say, in departing from the provisional view because there is a reasonable view that there's this sort of confusion or double dipping but if you clarify the (a) and the (b) method it becomes apparent that there's a reason why 24.(a)(iii)(sic) should remain.

PN498

VICE PRESIDENT HATCHER: Just going back to first principles, if you're getting your penalty rates in your annual leave payment, then what's the annual leave loading compensating you for?

PN499

MR BULL: Annual leave loading is essentially supplementation of leave, so I'm not aware of whether it's ever been arbitrated or where there's any attempt to rationally say exactly what comprises the 17.5 per cent. There's all sorts of - you could make things up at the bar ‑ it's encouraging people to take leave, it's whatever. Probably it's a bargained or it's an artefact of industrial history.

PN500

VICE PRESIDENT HATCHER: Well I've got a - - -

PN501

MR BULL: This award is more generous. It is clearly in excess of the NES. The NES only requires the base rate to be paid, so you can have a modern award where annual leave just is the base rate. This award, like many others, doesn't do that and obviously our position is that this is an instrument dealing with low paid workers who do reasonably physically arduous work and it's not inappropriate that there is this supplementation and - - -

PN502

VICE PRESIDENT HATCHER: In our early decision, we appeared to have taken the view that the parties agree that you shouldn't get both the penalties and the loading, is that ‑ were we under a misapprehension?

PN503

MR BULL: I understand there was some - that was mainly focussed on the issue of what you get on termination but I won't cavil with what the decision says.

PN504

VICE PRESIDENT HATCHER: I know what it says but if it ‑ ‑ ‑

PN505

MR BULL: But I - - -

PN506

VICE PRESIDENT HATCHER: If we misunderstood, we misunderstood.

PN507

MR BULL: I'm told that we and the Australian Industry Group believe we agreed on something and had some difficulty, and this is not being silly, but then had difficulty reducing it to words, if that makes sense.

PN508

VICE PRESIDENT HATCHER: Well I'm reminded that in your submission of 23 November 2018 you said 'Our characterisation your position was incorrect'.

PN509

MR BULL: Beg your pardon?

PN510

VICE PRESIDENT HATCHER: In paragraph 2 of your submission of 23 November 2018, you said 'Our characterisation your position was incorrect'.

PN511

MR BULL: I understand that there was some misunderstanding where there was only an agreement in relation to annual leave when taken not annual leave on termination. I still think making the two methods distinct might be a useful thing in terms of - - -

PN512

VICE PRESIDENT HATCHER: Well that's premised on (a)(iii) going back in.

PN513

MR BULL: Well we say it should remain there because it's part of the safety net, it's the level at which annual leave has been paid. It can be removed but we say if it's removed, something is lost. The problem with this award, it's a contracting award, bit like the Security Award. It's quite a good award in that by and large the terms and conditions are, in an objective sense, fairly generous. It appears to have potentially achieved that by, as is the case, quite complex provisions, things being tacked on here and tacked on there over the years.

PN514

There is a problem where some fundamental provisions like how you calculate annual leave are very complex and difficult to apply in practice and capable of different interpretations. The plain English draft does improve the readability and the understandability of the award. We've raised an issue because it did seem that the consideration of this matter was narrowing to this issue. You asked us whether that particular sentence should be removed. We've earlier said maybe, yes, but having asked for a final view, we're simply saying there's some utility. Is there any further way I can assist the Commission?

PN515

JUSTICE ROSS: No.

PN516

MR FERGUSON: Just for clarity, I'm not sure I'm entirely clear on what the position is but if I can make our position clear, we agreed with the provisional view as articulated in paragraph 55 of the November decision. The guts of that being, if you will, you shouldn't get the shift and weekend penalties twice. You get them once and that's the effect of the amendment we propose and you get the greater of the 17.5 per cent loading or the relevant penalties.

PN517

What we've otherwise tried to do is translate what we understand to be the existing entitlement and by doing that we've proposed a striking out of that (a)(iii). The live issue is that I don't think the November decision dealt with how you calculate the 17.5 per cent loading, and I'm not sure if the union's position's wavered or not on that, but we say it's on the minimum rates and we rely on the wording of the current award as justification for that and, at risk of repeating myself, 29.3 contemplates the ordinary time rate as being something separate to the other allowances that are contemplated in clause 29.3 and the 17.5 per cent loading is said, under 29.4, to be calculated on that ordinary time rate of pay.

PN518

Otherwise where 29.4 deals with annual leave, it talks about the terms of the NES as prescribed in the payment. It's all a little confusing but there appears to be nothing in the words of the current award to suggest that you apply the 17.5 per cent to some rate which includes various allowances and things. Indeed, at 29.4(b), again, it references it to the minimum award rates for the purpose of articulating the comparison between that and the shift penalties. There's inconsistency in the way it's dealt with, like we accept that, it's far from clear, but nothing seems to support a broader interpretation.

PN519

COMMISSIONER HUNT: 29.3 says 'and in addition will include leading hand allowance, first aid allowance'.

PN520

MR FERGUSON: That's my point. It's the ordinary time rate of pay, so the ordinary pay means the ordinary time rate of pay and in addition will include these things. The ordinary rate of pay is then never used in the clause. Instead when you come to calculating annual leave loading uses the term ordinary time rate of pay. There is nothing in the words to suggest the 17.5 per cent loading is calculated on the leading hand allowances and so forth. I'm not even sure how you would if a period of less than a week was taken, how you would actually do that as a practical sense.

PN521

All we say is you don't need to need double load it and, sorry, Commissioner, but to be clear at 29.4(b), where it contemplates doing a comparison between the 17.5 per cent and the shift penalties, you'll see in the last sentence it talks about the 17.5 per cent being tacked onto rates set out in clause 16 minimum wages. They're rates - - -

PN522

COMMISSIONER HUNT: Yes, but that seems inconsistent to above at 29.4(a) where, on my reading, I speak for myself here, it would - if you go on annual - - -

PN523

MR FERGUSON: Where it says an employee's ordinary time rate of pay, Commissioner?

PN524

COMMISSIONER HUNT: Yes. I think that that means what 29.3 means, ordinary pay means the base plus also those allowances.

PN525

MR FERGUSON: I think though if we were to assume that the phrase ordinary time rate of pay meant the same thing throughout the clause, you'll see in 29.3, well let me read all of it, it says 'For the purposes of payment of annual leave, an employee's ordinary pay means remuneration employees normally work the number of hours worked calculated at the ordinary time rate of pay and in addition' will include these amounts, so those amounts there, (a), (b), (c), (d), are in addition to the ordinary time rate of pay, so when the reference to ordinary time rate of pay, Commissioner, that you took me to at 29.4(a) is utilised, it clearly must there mean something that doesn't include those allowances.

PN526

COMMISSIONER HUNT: It does or doesn't?

PN527

MR FERGUSON: It doesn't.

PN528

COMMISSIONER HUNT: What work does 29.3 do then?

PN529

MR FERGUSON: I'm not sure that it clearly does anything apart from perhaps this, it may be that the structure of the award was intended to be that you get from the 29.3 rate, which is the rate that includes all of these amounts, or you get the NES rate, which is the base rate, of 17.5 per cent, provided that where you would have got more penalties you get the penalties, so I think it might have been saying, when you read it altogether very clumsily, you get a rate which includes all of these allowances and penalties or you get 17.5 per cent and provided that was meaning that you don't get the 17.5 per cent when you would have got more in terms of weekend penalties.

PN530

I mean I'm trying to find clarity that's probably just not there because it's not well written but I just struggle to see anything that could suggest to the industry for the last 10 years that you apply the 17.5 per cent on various allowances. How you would even do that, I don't know because they're weekly allowances, but there is undoubtedly lack of clarity in the current provisions. Does that assist, Commissioner, or?

PN531

COMMISSIONER HUNT: Yes, thank you.

PN532

JUSTICE ROSS: Anything further? No?

PN533

MR FERGUSON: No, thank you.

PN534

JUSTICE ROSS: All right, thank you both. We'll reserve our decision in respect of that matter. We'll now adjourn until 12.00 noon then we'll deal with the Manufacturing Award matter.

SHORT ADJOURNMENT�� [11.48 PM]

RESUMED�� [12.11 PM]

PN535

JUSTICE ROSS: We've got Ms Thomson in Newcastle and in Sydney?

PN536

MS A DEVASIA: Commission pleases, Ms Devasia, for the AMWU.

PN537

JUSTICE ROSS: Thank you.

PN538

MR S MAXWELL: If the Commission pleases, Maxwell, initial S, for the CFMMEU Construction & General Division.

PN539

JUSTICE ROSS: Thanks, Mr Maxwell.

PN540

MR B FERGUSON: If the Commission pleases, Ferguson, initial B, for the Australian Industry Group.

PN541

JUSTICE ROSS: Thank you, and in Melbourne?

PN542

MS B WILES: Your Honour, it's Wiles, initial B, for the CFMMEU Manufacturing Division.

PN543

JUSTICE ROSS: All right, thank you. Who wants to go first? Mr Maxwell?

PN544

MR MAXWELL: Thank you, your Honour. Your Honour, in regard to the issues before the Commission today, which is the small business redundancy provision in the Manufacturing Award involving the furnishing employers, the CFMMEU Construction & General Division made a written submission which was filed on 8 February 2019 which sets out the position of the union. Essentially, the union supports the provisional view expressed by the Full Bench that the small furnishing employer redundancy pay provision is not limited according to the geographical application of the predecessor pre-modern award.

PN545

In our decision(sic), we refer to the - in paragraph 23, that when the Manufacturing Award was made that there was clearly - there was two areas that had a small business redundancy provision. One was the Engine Drivers and Fireman's ACT Award which did have a transitional period attached to it and had an expiry date of December 2014. That wasn't the case with the furnishing employer's small business redundancy.

PN546

Clearly the AIRC Full Bench was of the view that that wasn't necessary and, indeed, in paragraph 165 of the AIRC decision that's referred to, the last sentence there where the Full Bench said 'To provide a consistent approach, the application of the small employer redundancy provisions in modern awards, that concerning the Furnishing Award is not limited to the current respondents to the award'. Clearly, the Full Bench was of the view that the small business redundancy provision should apply broadly to the work covered by the Furnishing Industry Award.

PN547

JUSTICE ROSS: Yes.

PN548

MR MAXWELL: Your Honour, other than really making that point, I think our written submission covers the issues that we wish to take the Full Bench to and we say that the wording of the award is quite clear. It didn't include the preamble which was where the geographical limitation was in the old Furnishing Industry Award and it refers specifically to the work in 6.1 to 6.6.

PN549

JUSTICE ROSS: Which are the classification provisions, yes.

PN550

MR MAXWELL: The other issue we'd raise is that when you look at the work that's covered there, some of that work is now not longer covered by the Manufacturing Award. It's actually covered by the Joinery Award and that's the glass and glazing work and perhaps a (indistinct) which the parties would assist the Commission - - -

PN551

JUSTICE ROSS: Yes, can probably - if we get to that point, it can probably sort that out and rather than referring to a pre-reform award, you could probably set out classifications in a schedule or something like that, yes.

PN552

MR MAXWELL: That's correct, your Honour, yes.

PN553

JUSTICE ROSS: All right.

PN554

MR MAXWELL: Your Honour, unless there's any questions, that's all the submissions we wish to make today.

PN555

JUSTICE ROSS: All right. Thanks, Mr Maxwell. Is the view of the AMWU essentially the same and you're supporting ‑ ‑ ‑

PN556

MS DEVASIA: That would be right, your Honour.

PN557

JUSTICE ROSS: Okay. Is there anything you want to add?

PN558

MS DEVASIA: Nothing at all.

PN559

JUSTICE ROSS: All right, thank you. Ms Wiles, you're in the same position?

PN560

MS WILES: We are, your Honour, yes, and we don't have anything further to add to Mr Maxwell's submissions.

PN561

JUSTICE ROSS: Thank you. Mr Ferguson, anything you want to add to your written submission?

PN562

MR FERGUSON: No, your Honour. The modernisation's been comprehensive in relation to the submissions. I'm content to rely on that. I don't intend to take it further. Just in relation to the specific oral submission that was advanced about the 2009 decision, I think in paragraph 27 of our written submissions we've tried to deal with the perspective we place on that decision and in relation to the last line - - -

PN563

JUSTICE ROSS: Paragraph?

PN564

MR FERGUSON: Paragraph 27 of our 25 January - - -

PN565

JUSTICE ROSS: Just bear with me for a sec.

PN566

MR FERGUSON: I think they're the heart of the perspective modernisation takes is that, yes, the Full Bench refers not including or limiting it to respondents but they don't talk about geographical, removing geographical, limitations but beyond that, I can't take our submissions further than my organisation has advanced them. In relation to the conference, we intend to participate. I know the issues around glass and glazing can be contentious so I don't want to weigh into that today.

PN567

JUSTICE ROSS: No, no, that's fine. Thank you, and Ms Thomson?

PN568

MS THOMSON: Just briefly, your Honour. I think the position is, from my client's perspective, that it's not conceded that there's current and no geographic limitation on the operation of the term but having said that, we accept the operation of section 154 may require some changes in that regard if that is, indeed, the position.

PN569

JUSTICE ROSS: Thank you. Nothing further? All right. We'll adjourn and reserve our decision in respect of this matter. Are the same parties involved in timber?

PN570

MR FERGUSON: Yes.

PN571

MS WILES: Yes.

PN572

JUSTICE ROSS: Is there anyone different or is one of your many manifestations, Mr Maxwell?

PN573

MR MAXWELL: No, your Honour, I understand I think the HIA has an interest in that.

PN574

JUSTICE ROSS: Yes, of course, yes, okay. All right. Thanks very much, we'll adjourn.

SHORT ADJOURNMENT�� [12.18 PM]

RESUMED�� [2.03 PM]

PN575

JUSTICE ROSS: Can we deal firstly with the Joinery and Building Trades Award matter? Can I take the appearances in respect of that matter in Sydney?

PN576

MR S. MAXWELL: If the Commission pleases, my name is Maxwell, initial S. I appear on behalf of the CFMMEU Construction & General Division.

PN577

JUSTICE ROSS: Thank you, Mr Maxwell.

PN578

MS R. SOSTARKO: Thank you, your Honour. It's Sostarko, initial R, appearing for Master Builders Australia.

PN579

JUSTICE ROSS: Thank you, Ms Sostarko.

PN580

MS L. REGAN: If the Commission pleases, Regan, initial L, for the Housing Industry Association, and today I have my colleague here, Adler, initial M, for the Housing Industry Association.

PN581

JUSTICE ROSS: Thank you. Are you in this matter, Ms Thomson?

PN582

MS THOMSON: Yes, your Honour.

PN583

JUSTICE ROSS: Anybody else?

PN584

MS WILES: Your Honour, Ms Wiles in Melbourne for the CFMEU Manufacturing Division.

PN585

JUSTICE ROSS: All right. Ms Sostarko, I think this is an issue that the MBA is pursuing. Is that right? Or there's one issue you're pursuing, there's one for the HIA, but let's go to yours first. You've seen the responses from the unions which, to summarise, basically say the Commission's already determined this issue, and they set out the decisions in which we've decided the question.

PN586

I suppose that raises two issues for you: (1) do you agree that the issue seems to have been previously determined, and secondly, if that's right, what do you want to do about it?

PN587

MS SOSTARKO: Thank you, your Honour. Thank you for raising that point. That's certainly one that we wanted to raise today, and I guess what we would say is that what the CFMMEU failed to understand in its reply is that today obviously we're here to deal with industry specific matters, and therefore we're obliged to raise the issue and we've put forward the submission that there's a material difference in the Commission's proposed provision in terms of its interpretation and how it would be applied.

PN588

We would qualify that by saying we have had no feedback from any of our members that the existing provision is causing any confusion, that there is no issue in terms of how it is interpreted, and we would also seek that the Commission considers that as part of the award stage proceedings.

PN589

At no time have any of the parties sought to vary these provisions, as far as we know, within the joinery award, therefore we would certainly question why at this time the unions would raise this issue. It's unclear to us - other than Mr Maxwell's comments in reply to those submissions that we have made with respect to this provision it has been unclear to date what his views are on the proposed clause overall, but of course we're in the Commission's hands.

PN590

JUSTICE ROSS: All right, thank you. Did you want to say anything about the MBA's proposal before we come to yours?

PN591

MS REGAN: Yes, your Honour, thank you. In principle, we can see some complexities associated in working out the rates that would apply in circumstances if the employee had worked in that first role. So we would say that as it relates to a projected period of time, there may be some complexities associated with those calculations. So we would say, your Honour, this may not be clearly defined or known in certain circumstances, and we can just foresee some particular issues.

PN592

JUSTICE ROSS: Are you supporting the MBA's position or not?

PN593

MS REGAN: To the extent that we can see that some complexities may arise.

PN594

JUSTICE ROSS: All right.

PN595

MS REGAN: Thank you.

PN596

JUSTICE ROSS: Mr Maxwell?

PN597

MR MAXWELL: Thank you, your Honour. Your Honour, my understanding is that here we're talking about model term and what was determined by the Full Bench, the model term, and other than disagreeing with the decision of the Full Bench, I don't think there's anything that's been put forward by the MBA that would warrant a departure from that model term.

PN598

JUSTICE ROSS: Is the model term in other construction awards?

PN599

MR MAXWELL: There is the model term in, I think, the Mobile Crane Hiring Award. This wouldn't be, I think, in the construction - I'll have to check.

PN600

JUSTICE ROSS: No, probably because we've deferred that until ‑ ‑ ‑

PN601

MR MAXWELL: To a determination of the construction awards.

PN602

JUSTICE ROSS: Yes, okay.

PN603

MR MAXWELL: But the only other award - possibly the Mobile Crane Hire Award, and I think it has gone into - I'll need to check that further, but my understanding is it's gone into that award.

PN604

JUSTICE ROSS: All right.

PN605

MR MAXWELL: Your Honour, we'd rely on our written submissions in response to the MBA.

PN606

JUSTICE ROSS: Thank you. Ms Thomson, I forgot to ask whether you had anything you wanted to say in relation to the MBA's proposal?

PN607

MS THOMSON: Nothing further, your Honour, thank you.

PN608

JUSTICE ROSS: Thank you. Ms Wiles, do you have anything to add to Mr Maxwell's submissions?

PN609

MS WILES: No, I don't, thank you, your Honour.

PN610

JUSTICE ROSS: All right. We'll determine that matter on the material that we've got in front of us, and supplemented by your oral argument.

PN611

Can we go to the HIA's point?

PN612

MS REGAN: Yes, thank you, your Honour. Within our submissions of 25 January we proposed some specific amendments for the joinery award.

PN613

JUSTICE ROSS: Yes.

PN614

MS REGAN: It might assist the Bench if I do step you through that specific amendments.

PN615

JUSTICE ROSS: Sure.

PN616

MS REGAN: However, I would just like to note that this amendment that we propose actually sits equally across the timber award as well, so what I do say as it relates to the joinery award would apply also in the context of the timber award.

PN617

JUSTICE ROSS: Okay.

PN618

MS REGAN: So if we turn to the draft determination for the joinery award of 13 December 2018, item 6 particularly proposes the new redundancy clause.

PN619

JUSTICE ROSS: Yes.

PN620

MS REGAN: The amendments HIA propose specifically relate to proposed clause 17.4(f) and (g) of the joinery award.

PN621

JUSTICE ROSS: Is this on the top of page 2 of your submission?

PN622

MS REGAN: Sorry, your Honour.

PN623

JUSTICE ROSS: No, that's all right.

PN624

MS REGAN: The top of page 2 of our submission is the proposed clause within the draft determination.

PN625

JUSTICE ROSS: Yes.

PN626

MS REGAN: The proposals we specifically make for the joinery award are outlined on page 3 of our submission.

PN627

JUSTICE ROSS: Yes, okay.

PN628

MS REGAN: Our understanding is that the proposed clauses 17.4(f) and (g) in the joinery award are intended to clarify that the small business redundancy pay as specified within the clause is the relevant pay to be considered in the context of a small business transfer of employment situation or a variation to redundancy pay is sought.

PN629

We particularly say within our submission that these proposed subclauses are confusing and in our view have the potential to lead to interpretational issues. If we, for example, look at the proposed subclause (f) within the draft determination, an employer or an employee would be required to read section 120 of the Act in full alongside the award.

PN630

In this case, the employer or the employee would be required to find reference to section 119 and section 120 of the Act and then such reference to the - and replace, sorry, such reference to the words - as to the words contained in subclause (c) of the award provision. So in effect we've got an award provision, the Act, being read side by side, an award provision being inserted into the Act.

PN631

We say in the context of both the joinery and timber awards specifically proposed clause 17.4(f) and (g) of the joinery draft determination, and I'll just outline for the timber award that's 15.4(f) and (g).

PN632

JUSTICE ROSS: You say particularly for these awards, but there's nothing that award specific about these. Really the same point would be made generally about the model term.

PN633

MS REGAN: As it relates to the small business part of the model term, yes.

PN634

JUSTICE ROSS: Yes, (f) and (g), you're making a general point about those.

PN635

MS REGAN: Correct.

PN636

JUSTICE ROSS: I suppose that raises the question why didn't you make the general point when we were settling the terms of the model term?

PN637

MS REGAN: Our understanding is the small business redundancy provision - this is the first time it's come up, because it's an industry specific redundancy provision, as it relates to that. It's the small business provision for industry specific awards that have industry specific terms. So it hasn't come up, in our view, until this point of time.

PN638

JUSTICE ROSS: All right.

PN639

MS REGAN: So, your Honour ‑ ‑ ‑

PN640

JUSTICE ROSS: But I suppose the same point - it would apply to every industry specific ‑ ‑ ‑

PN641

MS REGAN: That has these industry specific small business redundancy terms.

PN642

JUSTICE ROSS: Yes.

PN643

MS REGAN: Correct, yes.

PN644

JUSTICE ROSS: How many of them are in that category?

PN645

MS REGAN: I couldn't tell you, unfortunately, your Honour. As I understand, it would be timber and joinery for us and maybe the matters that have been set down for hearing today, perhaps.

PN646

JUSTICE ROSS: No, they raise other issues. I think it's - well, it would come up in manufacturing, presumably, depending on where that lands.

PN647

MR MAXWELL: Clearly I wasn't paying attention at this point.

PN648

JUSTICE ROSS: Yes.

PN649

MS REGAN: Look, I'm happy to look into that and take that on notice, if you'd like.

PN650

JUSTICE ROSS: No, that's fine. That's fine. I can check.

PN651

MS REGAN: But what we would say, your Honours and Commissioner, we haven't seen any particular issue with how this is currently expressed within the provisions of the joinery award and timber award to date. Particularly in the joinery award there is a proposed - this particular wording is dealt with in clause 17.2(b) of the existing award, so what we are suggesting is essentially a revised version of that current provision for the new model term.

PN652

JUSTICE ROSS: All right.

PN653

MS REGAN: Your Honours and Commissioner, if I could also just take the opportunity to respond to what the CFMMEU said in relation to this provision.

PN654

JUSTICE ROSS: Sure.

PN655

MS REGAN: We understand that the submissions of the CFMMEU Construction Division dated 8 February, specifically at paragraph 17, state they don't support our proposed changes to the joinery award. They state they don't find the proposed clause 17.4(f) and (g) to be confusing, and to the extent that the provision requires the Fair Work Act and the award to be read together, submits that is no different to the existing clause 17.2(b), which requires the reader to have knowledge of section 121B and subdivisions (a), (b) and (c) of division 11 of the NES.

PN656

JUSTICE ROSS: Yes.

PN657

MS REGAN: We disagree. Yes, the award and Act are required to be read together, but in this case the reader is required to replace a section of the Act, so section 120 or 122, with a section of the award.

PN658

JUSTICE ROSS: So to be clear, you're not seeking any change in substance in the provision, it's that you think it would be easier for the reader and simpler to understand, et cetera, if the amendment was made.

PN659

MS REGAN: Correct.

PN660

JUSTICE ROSS: Yes, okay.

PN661

MS REGAN: Correct, yes. It's in terms of the readability. At the moment it's the requiring, yes, two instruments to be read, but replacing one section of the Act with a section of the award and then having to go back and apply that in the context of the award. It's quite a difficult exercise to do.

PN662

JUSTICE ROSS: Yes.

PN663

MS REGAN: So, yes, your Honour, we would disagree with the CFMMEU's statements in that regard. It's a complicated exercise for the average modern award reader to undertake.

PN664

JUSTICE ROSS: Yes, all right.

PN665

MS REGAN: That's all. Thank you, your Honour.

PN666

JUSTICE ROSS: Thank you. Mr Maxwell, I just want you to think about this before you say anything. I'm not sure, speaking for myself, it's a particularly compelling argument that, "Well, they have to read other bits of the Act." I'm more interested in whether - leave that aside for the moment, and I think that's true of a lot of provisions in awards, and there's been throughout the review this sort of tension around how much of the NES do you put in, otherwise people have to read two instruments.

PN667

I've always had some sympathy with the view that even though it might be repeating what's in the NES, it would be simpler, if you were the user of an award, if you picked it up and it contained everything you needed to see without going to another document, but I suppose I'm more interested in whether you think there's any difference in the legal effect of what's proposed by the HIA and whether you could give some further thought to that issue.

PN668

I want to then gauge how strongly is your opposition to it, because - well, not to put too fine a point on it, but the construction parties are in the trenches on a whole range of things, and it's not unusual, if someone puts up an idea, for it to be opposed by the other parties in it, and I want to try and encourage you to see past that.

PN669

For myself, I haven't considered the question of whether it gives rise to any legal change, but what HIA is putting is it's not intended to, and if it is just an expression point, then there might be scope for you to give some further thought to that, and if your position is the same, that's fine, and if you want, you know, a week or so to think about those issues and perhaps have a conversation with the HIA about it, then we might be able to resolve it that way rather than it becoming a sort of a larger case than it might need to.

PN670

MR MAXWELL: Your Honour, perhaps if I can put our position this way. At the end of the day, the CFMMEU is not opposed whether we retain the existing provision or have the model term provision. I would have thought, though, if I was - from an employer side, I would prefer the model term provision, because it directs the employer to the fact that you can actually vary the redundancy entitlement.

PN671

JUSTICE ROSS: Yes.

PN672

MR MAXWELL: Whereas just referring to those sections of the Act doesn't direct the employer's attention to that fact.

PN673

JUSTICE ROSS: No. You'd have to know that that's what you can do, yes.

PN674

MR MAXWELL: That's right. So in that regard, from the union's point of view it's not a big issue, but I would have thought that the employers would have a preference for the model clause.

PN675

JUSTICE ROSS: Yes.

PN676

MR MAXWELL: So I think that's our position in a nutshell.

PN677

JUSTICE ROSS: No, that's fine; yes.

PN678

MR MAXWELL: I should just correct - I think I raised before that this issue may arise in regard to the Mobile Crane Hire Award. I just remembered that as there is an industry specific redundancy clause, the Full Bench has decided not to vary those provisions, so it's open to apply.

PN679

JUSTICE ROSS: Yes, okay. Anybody else? Yes, Ms Sostarko?

PN680

MS SOSTARKO: Your Honour - thank you. All we wanted to do is actually have on record that we would actually support the approach of the HIA, for the simple fact that it is clearer and simpler, we think, for award users, and that's obviously an objective that we would all aspire to, but secondly, we're of the view that their proposal is more akin to the existing provision, which as we have said, we're certainly not aware that award users have raised any issue or confusion in terms of its interpretation. Thank you, your Honour.

PN681

JUSTICE ROSS: All right, thanks. So you're putting the same proposition in relation to the timber award?

PN682

MS REGAN: Yes, your Honour. Thank you.

PN683

JUSTICE ROSS: Yes, okay. Is there anything you want to say, Mr Ferguson, about its application to the timber award, or does ABI want to say anything about that?

PN684

MR FERGUSON: Not on the run. Maybe we can be given a short window, just to think on it before I say anything, and I'll put it to you if we do.

PN685

JUSTICE ROSS: All right, then by 4 pm next Tuesday.

PN686

MR FERGUSON: That's more than enough.

PN687

JUSTICE ROSS: Ms Thomson, anything you want to say?

PN688

MS THOMSON: No, thank you, your Honour. Sorry, I just missed what was just said previously.

PN689

JUSTICE ROSS: Mr Ferguson's just ducking the question and wanting until 4 pm next Tuesday so it gives him a chance to review the transcript to see what the question was. So it's around the change to the model term insofar as it deals with the small business employers - sorry, the small business redundancy arrangements, and it's the HIA's proposal to vary both the joinery award and the timber award. Do you want an opportunity to have a look at it as well?

PN690

MS THOMSON: Yes, please, if that's convenient to the Commission.

PN691

JUSTICE ROSS: No, that's fine. 4 pm Tuesday for you as well.

PN692

MS THOMSON: Thank you.

PN693

JUSTICE ROSS: So nothing further in relation to the joinery award. Can we go to the - sorry, yes?

PN694

MS SOSTARKO: Apologies, your Honour. I noted in the background paper that there was no reference to the issue that we raised with respect to continuous service. In our submissions we noted that the model term makes reference to - well, introduces a new concept, which is providing a definition of continuous service.

PN695

JUSTICE ROSS: Yes.

PN696

MS SOSTARKO: In our submissions of 25 January we actually raised the point that we were of the view that the signpost to section - I think it is 119 - is that correct?

PN697

JUSTICE ROSS: Yes.

PN698

MS SOSTARKO: It would be more appropriate that if we're talking about the meaning of continuous service, that that reference be made to section 22. Again, we're in the Commission's hands, but we're of the view that certainly section 121 would be appropriate if we're talking about the application, but with respect to the meaning of continuous service we are of the view that section 22 is the more appropriate signpost.

PN699

JUSTICE ROSS: Anything anyone else wants to say about that point?

PN700

MS REGAN: Your Honour, we would say that we're of the view that the proposed wording in clause 17.4(e) is unsuitable due to the issues as raised by Master Builders. In our view, the wording should remain - sorry, if the wording should remain, it should state that it should be applied as per section 119 versus using the words "as the same meaning".

PN701

We'd suggest something along the lines of the words - is changed to, in paragraph (d), "Continuous service is applied as per section 119 of the Act," versus using the words "as the same meaning".

PN702

JUSTICE ROSS: What do you say about the MBA's proposal to take out the reference to 119 and put in section 22?

PN703

MS REGAN: We wouldn't support that. Our view is that it's - we understand the issues and complexities as raised by Master Builders. We would say that it needs - the wording, if it should remain - our primary position would be that it doesn't need to be in there, but if it should remain, that it should have the words "as applied as per section 119 of the Act".

PN704

JUSTICE ROSS: Do you have a view about that, Mr Maxwell?

PN705

MR MAXWELL: Your Honour, I think on this occasion we'd support the submission of the HIA. We don't support the position of the MBA that it should be a reference to section 22, because section 22 deals with more than redundancy, and we think the reference to section 119 should remain, but we're not opposed to the suggested change proposed by the HIA.

PN706

JUSTICE ROSS: All right. Can you just go through the language? I'm not sure I would be attracted to "as per section 119", but ‑ ‑ ‑

PN707

MS REGAN: We suggested that it should state something along the lines of, "In paragraph (d) continuous service is applied as per section 119 of the Act," so versus using the words "the same meaning".

PN708

JUSTICE ROSS: Yes, all right. Nothing else on the joinery award?

PN709

MS SOSTARKO: No, thank you, your Honour.

PN710

JUSTICE ROSS: Then let's go to the timber award, and the issue here is similar to the one raised in relation to the manufacturing award, that is, the response to the provisional views expressed regarding the small employer provisions of this award and redundancy. Who'd like to go first? Mr Ferguson?

PN711

MR FERGUSON: Ai Group's filed comprehensive submissions dealing with this issue as well, and again, I don't intend to elaborate or repeat that material, but if I could respond to one issue that arose from the CFMEU's manufacturing division submissions dated 11 February.

PN712

JUSTICE ROSS: Yes.

PN713

MS WILES: Excuse me, it's Ms Wiles in Melbourne. If Mr Ferguson could just speak up.

PN714

MR FERGUSON: Yes, I've moved the microphone, Ms Wiles. You should be able to hear me now. It's in relation to the manufacturing division submissions, particularly the matter arising at paragraph 29 of those submissions.

PN715

JUSTICE ROSS: Yes.

PN716

MR FERGUSON: As I understand it, I think they're proposing to remove an exemption that's been proposed in relation to employees only performing work under the pulp and paper sector of the award, and I think the logic for the proposed exemption, or removal of the exemption, is that there may have been some predecessor award that provided small business redundancy provisions. In essence, I think they're trying to expand the ‑ ‑ ‑

PN717

JUSTICE ROSS: Yes.

PN718

MR FERGUSON: Which we would oppose on that ground alone.

PN719

JUSTICE ROSS: Yes.

PN720

MR FERGUSON: But the obvious deficiency in the argument is they say that they're all large employers anyway in that sector, so it would have little practical work to do, and if that's the case, then obviously we've separately say there's no necessity to include such a provision in the award, but obviously no case has been made out and it's not appropriate in this kind of proceeding in any event.

PN721

JUSTICE ROSS: Yes.

PN722

MR FERGUSON: But other than that, as I said to you, we've been comprehensive in our submissions, and I don't intend to take them further.

PN723

JUSTICE ROSS: Any of the other employers in Sydney?

PN724

MS REGAN: Your Honour, we don't have a view with respect to the amendments proposed by the CFMMEU manufacturing division.

PN725

JUSTICE ROSS: All right. Any of the unions? Ms Wiles?

PN726

MS WILES: Thank you, your Honour. Look, just in relation to the point raised by Mr Ferguson in respect to paragraph 29 of our submissions, we're not pressing that point, so we're not seeking to expand or to remove the exclusion.

PN727

We did file submissions on 11 February 2019, and I won't repeat them, but just to reiterate our position, we do agree with the provisional view of the Full Bench as outlined at paragraph 40 of the decision of 11 December 2019.

PN728

We do concur with the Full Bench's provisional view that clause 15.7(b) of the timber award limits the application of small business redundancy pay according to the types of work covered by the two predecessor awards. That's in clause 6 of the Timber and Allied Industries Award 1999 and clause of the Furnishing Industry National Award 2003.

PN729

We also concur with the Full Bench's provisional view that clause 15.7(b) of the timber award is not limited on a geographical basis and applies throughout Australia.

PN730

I just wanted to just address one issue raised, or one contention raised, by the Ai Group, and this is the issue in their submissions where they do contend that a geographical limitation does apply to the operation of clause 15.7 and the timber award.

PN731

JUSTICE ROSS: Yes. Which paragraph are you going to in there?

PN732

MS WILES: Sorry, Commissioner, I'll just find their - it's actually a general issue they raised both I think in relation to the manufacturing award and also the timber award. Sorry, Commissioner, I've just temporarily misplaced their submission. Just one moment.

PN733

JUSTICE ROSS: That's all right. I think in relation to timber it's starting at paragraph 6 and then going on.

PN734

MR FERGUSON: I think there are some issues that are dealt with concurrently in the next section.

PN735

JUSTICE ROSS: Yes.

PN736

MS WILES: Yes. So maybe if I could just summarise it this way, that as I understand it, the Ai Group do contend that there is a geographical limitation that applies to clause 15.7 of the timber award, and partly they argue that - specifically in relation to the timber award, because they say that clause 15.7 refers to clause 6 in totality of the predecessor awards, which do include the preambles.

PN737

JUSTICE ROSS: Yes.

PN738

MS WILES: I mean, our view on that is we say that the Ai Group misconstrues the plain meaning of clause 15.7. What we say ‑ ‑ ‑

PN739

JUSTICE ROSS: Is that because it refers to any of the work within the scope?

PN740

MS WILES: That's right. So we say that the relevant nexus for the small business redundancy entitlement to be triggered is actually the work undertaken by the employee by reference to the scope of the current timber award and which was in - that's the words - in one of the two pre‑reform awards.

PN741

So we say that the issue of the preambles in clause 6 of both the predecessor awards, which do relate to state and territory coverage, is actually irrelevant to the exercise which is required to be undertaken under clause 15.7(b) in determining whether an employee is entitled to the small business redundancy.

PN742

So if I could step that out, what we say is that the correct inquiry as to whether the entitlement applies is (1) to consider the work being undertaken by the employee, (2) whether this work is within the scope of the timber award, and then (3) whether this work was in one of the two predecessor awards, and we say having made that inquiry, that's the only way in which the entitlement in clause 15.7(b) is confined or otherwise limited. So we say that the preambles are irrelevant to the issue.

PN743

As we stated in our submissions, and as Mr Maxwell's submissions went into in some detail, in our view, if the award modernisation Full Bench had intended to impose a geographical limitation within clause 15.7, it would have done so expressly either in the wording of clause 15.7 itself or making clear that such provision was transitional if it was to apply to a limited number of states or territories.

PN744

We say that that is persuasive, in our view, in that there is no geographical limitation in the timber award. Other than that, we're content to rely on our written submissions, unless there are any questions from the Bench.

PN745

JUSTICE ROSS: When you say that had they imposed a geographical limitation they would have provided the transitional arrangements, is that based on what they did in relation to the ACT award?

PN746

MS WILES: Yes, but also the approach that the award modernisation Full Bench took in relation to, for example, the - often the superior redundancy provisions in NAPSAs, for example, and division 2B awards, where it was very clearly stated that the - sorry, the lights have just gone out in Melbourne. I'll just keep talking, though.

PN747

JUSTICE ROSS: Yes. No, you need to keep moving, Ms Wiles, otherwise they ‑ ‑ ‑

PN748

MS WILES: Just hang on, yes.

PN749

JUSTICE ROSS: Yes.

PN750

MS WILES: Yes, but just generally in the way that the award modernisation Bench approached a range of matters, but, yes, including the ACTU award that you referred to. So we say that since the award was made there has been no geographical limitation and that to now, you know, nine years on, or nearly 10 years on, argue that there is, we say misconstrues the plain reading of the words as they are today in the timber award.

PN751

JUSTICE ROSS: All right, thank you. Anyone else? No?

PN752

MR FERGUSON: Only very briefly in reply. Look, without demurring from the detail of what we've put in the submissions, I think coming to the issue around the interpretation of the references to work, if you will, obviously a point of distinction in relation to this award from the manufacturing award, for what it's worth, is this obviously calls up the entirety of clause 6, which includes the preamble.

PN753

JUSTICE ROSS: Yes.

PN754

MR FERGUSON: I think it's difficult to see how work in that context wasn't intended to be work performed in Victoria, that which the award actually applies to. It is an issue of detail, perhaps.

PN755

I suppose with all of this it's difficult to decipher the intent of the Full Bench with a great deal of certainty given very little was put in the reasoning around all of it, but clearly on one reading of it you could say that read in the context of the entire provision - and we would say manufacturing is well within the context of the instrument as a whole, there's an argument to be put that the intended work to be caught, and therefore the scope of the scheme, is the work that was covered by the award.

PN756

JUSTICE ROSS: Just refresh my memory about the timber award. So clause 6 of the Timber and Allied Industries Award 1999, what was the geographical coverage of that?

PN757

MR FERGUSON: 1999 ‑ ‑ ‑

PN758

MS WILES: Sorry, your Honour ‑ ‑ ‑

PN759

MR FERGUSON: Sorry. That applied ‑ ‑ ‑

PN760

MS WILES: Sorry, go ahead, Brent, yes.

PN761

MR FERGUSON: Sorry. 6.1 applied throughout the states of New South Wales, Victoria, South Australia, Tasmania, Western Australia and the Australian Capital Territory.

PN762

JUSTICE ROSS: So which states did is miss?

PN763

MR FERGUSON: Queensland it missed. We've got a table at paragraph 47 of our submissions that assists.

PN764

JUSTICE ROSS: Okay.

PN765

MR FERGUSON: In that case it missed Queensland and the Northern Territory, then the Furnishing Industry National Award missed Queensland, Northern Territory and Western Australia. So it's in the majority of states, but not all.

PN766

JUSTICE ROSS: Yes. So your proposition, though, is it provides for an interstate differential, which is precluded, and we should remove the lot rather than extending it to the small number of states that it's not already in.

PN767

MR FERGUSON: Yes. I mean, we mount, for what it's worth, the primary position, which is that there aren't state based differentials.

PN768

JUSTICE ROSS: That they are?

PN769

MR FERGUSON: That there are not state based differentials, on the basis that essentially - and it's got quite a complicated point, but we're trying to draw an analogy to the approach taken by the Full Bench in the accident pay case, where it looked at the fact that the terms and conditions as contained in the award didn't contain any state based differentials.

PN770

It's just, if I could put it this way, when you come to work out what the actual entitlement is, you then have to have reference to some other instrument, which does, we will accept, include reference to state based boundaries, if you will.

PN771

So the modern award, put simply, doesn't have anything in it that limits the entitlement. Everyone gets the entitlement to redundancy pay, it's just whether or not that crystallises into anything depends on whether you're doing this particular work, and the work only was covered by the - now, I've got to say, we were troubled by the Full Bench's logic in the accident pay case, and we ran the opposite line there and said, well, if you have to look in that case at different pieces of legislation but say they only apply in certain states, that's a state based differential.

PN772

JUSTICE ROSS: That's all right, Mr Ferguson, I wasn't on the accident pay case, so ‑ ‑ ‑

PN773

MR FERGUSON: And maybe the frustration has flowed into this.

PN774

JUSTICE ROSS: ‑ ‑ ‑ knock yourself out.

PN775

MR FERGUSON: I'm venting at this point, so I'd better - but I think - look, I don't want to labour this point, because we swiftly went to the alternate, which is if it's limited in its jurisdiction a case hasn't been made for now extending the entitlement to small business redundancy pay entitlements to anyone else.

PN776

That was obviously at the heart of our concern, and the position we've taken is if that's the way it operates now and it's being applied by people, we're obviously concerned about seeing this process generate a new entitlement that may not have been appreciated or that may not have existed at the time.

PN777

JUSTICE ROSS: All right. Nothing further in relation to that matter? Okay. Does that conclude the issues for the timber industry award? All right. Thank you very much. We'll adjourn and reserve our decision in relation to the matter. We'll await your submission, Mr Ferguson and Ms Thomson, in relation to the matter that we dealt with earlier. Thank you. We'll adjourn.

ADJOURNED INDEFINITELY�� [2.41 PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

KERRY KNOPP, SWORN....................................................................................... PN9

EXAMINATION-IN-CHIEF BY MR MONROE.................................................. PN9

EXHIBIT #ISV1 STATEMENT OF KERRY KNOPP....................................... PN20

CROSS-EXAMINATION BY MR ODGERS....................................................... PN23

RE-EXAMINATION BY MR MONROE........................................................... PN201

THE WITNESS WITHDREW............................................................................. PN210