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TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009 1057227
VICE PRESIDENT HATCHER
DEPUTY PRESIDENT KOVACIC
DEPUTY PRESIDENT BULL
AM2017/51
s.156 - 4 yearly review of modern awards
Four yearly review of modern awards
(AM2017/51)
Common Issue – Overtime for Casual Employees
Sydney
10.06 AM, MONDAY, 29 JULY 2019
Continued from 12/07/2019
PN338
VICE PRESIDENT HATCHER: Yes, I'll take the appearances, starting in Sydney. So Mr Barlow, you appear for the CPSU?
PN339
MR K BARLOW: Barlow, initial K, CPSU, your Honour.
PN340
VICE PRESIDENT HATCHER: Mr Bull, you appear for the United Voice?
PN341
MR S BULL: If the Commission pleases.
PN342
VICE PRESIDENT HATCHER: Mr Clarke, you appear for the ACTU?
PN343
MR T CLARKE: Yes, that's right.
PN344
VICE PRESIDENT HATCHER: Mr Ferguson, you appear for AiG with Mr Harrington?
PN345
MR B FERGUSON: Yes, your Honour.
PN346
VICE PRESIDENT HATCHER: Mr Izzo, you appear with Ms Hamberger for Australian Business Industrial and the New South Wales Business Chamber?
PN347
MR l IZZO: Yes, your Honour. And with the Commission's permission.
PN348
VICE PRESIDENT HATCHER: Yes, right. Mr Crawford, you appear for the AWU?
PN349
MR S CRAWFORD: Yes, your Honour.
PN350
VICE PRESIDENT HATCHER: Yes. What are the appearances for the CFMMEU?
PN351
MR S MAXWELL: Your Honour, Maxwell, initial S, for the Construction and General Division.
PN352
VICE PRESIDENT HATCHER: And you're appearing with whom?
PN353
MR MAXWELL: With Ms Wiles for the Manufacturing Division.
PN354
MS E SARLOS: Ms Sarlos for the Mining and Energy Division.
PN355
VICE PRESIDENT HATCHER: All right. So I note those appearances for the CFMMEU. Ms Ambihaipahar, you appear for the CPU?
PN356
MS A AMBIHAIPAHAR: May it please the Commission.
PN357
VICE PRESIDENT HATCHER: Mr Ryan, you appear for the AHA?
PN358
MR P RYAN: Yes, your Honour.
PN359
VICE PRESIDENT HATCHER: Mr Moore, you appear for the Clubs Australia?
PN360
MR R MOORE: I do, your Honour.
PN361
VICE PRESIDENT HATCHER: And Mr Odgers you appear for the IEU?
PN362
MR A ODGERS: Yes, your Honour.
PN363
VICE PRESIDENT HATCHER: Is that all the appearances in Sydney?
PN364
MR C BAILEY: Bailey, initial C, Association of Independent Schools for New South Wales. Also on behalf of Independent Schools Victoria, Independent Schools Tasmania, the Association of Independent Schools Victoria, the Associations of Independent Schools WA and Independent Schools Queensland.
PN365
VICE PRESIDENT HATCHER: All right.
PN366
MR M NGUYEN: Yes, Mr Nguyen, initial M, for the
PN367
Flight Attendants Association.
PN368
MR G MILLER: And Miller, initial G, for the AMWU.
PN369
VICE PRESIDENT HATCHER: All right. That's everyone in Sydney. So in Melbourne, Mr Pill, you appear for the G8 Universities?
PN370
MR S PILL: Yes, your Honour.
PN371
VICE PRESIDENT HATCHER: Yes, all right. Mr Cupido, you appear for the NTEU?
PN372
MR W CUPIDO: Yes.
PN373
VICE PRESIDENT HATCHER: And Ms Pugsley, you appear for the AHEIA?
PN374
MS C PUGSLEY: Yes, your Honour.
PN375
VICE PRESIDENT HATCHER: Yes, all right. Brisbane, is that Ms Regan for the HIA?
PN376
MS L REGAN: Yes, your Honour.
PN377
VICE PRESIDENT HATCHER: Adelaide, Ms Rogers for the AMIEU?
PN378
MS E ROGERS: Yes, your Honour, good morning.
PN379
VICE PRESIDENT HATCHER: And in Canberra, Mr Rogers, you appear for the NFF?
PN380
MR E ROGERS: Yes, your Honour.
PN381
VICE PRESIDENT HATCHER: And Ms Sostarko for the MBA?
PN382
MS R SOSTARKO: Yes, your Honour.
PN383
VICE PRESIDENT HATCHER: All right. So Mr Izzo, I might start with you. So what's the position of the 46 Awards?
PN384
MR IZZO: So, your Honour, firstly, if I could, just for the sake of completeness, confirmed that we filed some correspondence on 24 July clarifying our client's position with respect to those Awards.
PN385
VICE PRESIDENT HATCHER: So I can just summarise my understanding? Unlike what was represented on the last occasion, it's not the intention to present a merits case for substantive variations. The variations are to clarify what your clients understand to be the existing position. Is that correct?
PN386
MR IZZO: That's correct, your Honour.
PN387
VICE PRESIDENT HATCHER: All right. Okay, go on.
PN388
MR IZZO: So that is our ‑ ‑ ‑
PN389
VICE PRESIDENT HATCHER: I'm sorry, Mr Izzo, I should have said this before.
PN390
Does anybody object to the legal representatives here today being granted permission?
PN391
MR MOORE: No.
PN392
VICE PRESIDENT HATCHER: No, all right. That's Mr Moore.
PN393
Mr Izzo, that's granted, so.
PN394
MR IZZO: Your Honour, in relation to those Awards, we had a meeting with a number of Union and employer parties last Wednesday. That meeting was relatively constructive in terms of narrowing some issues, but also discussing programming. What we would propose – and I understand the Union and employer parties consent to this position – is that, with respect to the 46 Awards, they are stood over from being considered for a period of about eight weeks, during which two things may happen.
PN395
One, the exposure drafts – or the next round of exposure drafts may be released, and the operation of those Awards may – well, there might be some further light shed on the operation of those Awards. But secondly, there will be an opportunity for the Union and employer parties to continue to narrow their respective positions. Because it may be – we've given the issue, at least, of 46 Awards – but it might be that, following further discussions with the Union parties, that list can get shorter and shorter in terms of disputes regarding incorrect interpretation of those Awards. So ‑ ‑ ‑
PN396
VICE PRESIDENT HATCHER: That would be end of September.
PN397
MR IZZO: That's correct. And I'm instructed that a directions hearing after 24 September – because I understand the parties have a bit of a conflict on the 23rd. So anytime from 24 September onwards might be a suitable time to have a report backlisted.
PN398
VICE PRESIDENT HATCHER: All right. And in the event that there's outstanding Awards, or outstanding issues, to be resolved as and around that date, how long will it take to program the thing and have it heard? Because at some stage, the guillotine is going to come down and destroy your review. It's already hovering – I know we all enjoy, but the fun has to end at some stage.
PN399
MR IZZO: Well, your Honour, with respect to the position of my clients, the submissions and material that would likely be prepared and filed is likely to be similar to materials that have already been prepared. So we would necessarily require a significant period, it's just if there's some industry‑specific consideration in one or two, or a handful, of Awards.
PN400
So I'd be hopeful it's not an extensive period of time. Something like four weeks would, I think, be something that we'd seek in order to file materials, if that were to be necessary ‑ ‑ ‑
PN401
VICE PRESIDENT HATCHER: All right.
PN402
MR IZZO: ‑ ‑ ‑ on behalf of our client.
PN403
VICE PRESIDENT HATCHER: All right. Well, I might hear from AIG and the ACTU next, Mr Ferguson.
PN404
MR FERGUSON: We support that cause of action, in particular because it enables us to potentially given consideration to anything that flows from the exposure draft process. We think some of these issues have already been ventilated between the parties and we can be productive.
PN405
VICE PRESIDENT HATCHER: All right.
PN406
Mr Clarke?
PN407
MR CLARKE: There's no opposition for us for having time to talk to narrow the issues in relation to specific Awards, but we still want to proceed with our procedural argument, which will probably cut – if successful, cut that last very short indeed.
PN408
VICE PRESIDENT HATCHER: All right. Did the clarification that these applications are concerned with correcting the drafting to make clear the regional intent, rather than substantive merits for every action, does that assuage the ACTUs concerns at all?
PN409
MR CLARKE: It doesn't, your Honour.
PN410
VICE PRESIDENT HATCHER: All right. All right. Okay. Well, we can hear further about that on the report backdate about that position if there's still issues outstanding.
PN411
MR CLARKE: The complication with that, your Honour, is that the substance of the argument is intended – that we object to, is intended to be run, as I'd say, both as a sword and a shield in different proceedings. So the intention, as disclosed in the 5 July document, from the ABI New South Wales Business Chamber is to raise it as a defence, effectively, given the claims made by United Voice (indistinct) today. So that's ‑ ‑ ‑
PN412
VICE PRESIDENT HATCHER: Yes.
PN413
MR CLARKE: ‑ ‑ ‑ the basis upon which I wanted to be heard on the procedural ‑ ‑ ‑
PN414
VICE PRESIDENT HATCHER: Yes, right.
PN415
All right. In respect of the ABI's list of 46 Awards, does any party wish to – before I turn to specific Awards, wish to advocate for a different course other than that proposed by Mr Izzo?
PN416
MR BULL: No, your Honour, we don't.
PN417
VICE PRESIDENT HATCHER: No. All right. Well, I'll take silence as assent. Then I'll now turn to the specific Awards adverted to in the last set of directions. Firstly, Mr Maxwell, the Building and Construction General On-site Award, what's the position there?
PN418
MR MAXWELL: Your Honour, I must admit I'm at a bit of a loss as to why it's listed.
PN419
VICE PRESIDENT HATCHER: All right. Well, somebody raised it at the last occasion. I can't remember who. In any event, you understand there to be no dispute about that Award, that we need to do?
PN420
MR MAXWELL: Your Honour, after the discussions with ABI, we understand there's no issues in that Award in regard to the overtime rates for casuals.
PN421
VICE PRESIDENT HATCHER: All right.
PN422
Ms Sostarko, do you agree with that?
PN423
MS SOSTARKO: Yes, your Honour. Certainly, the Joinery Award is incorporated into that table that has been filed by Mr Izzo and his colleagues. We would agree with the revised version with respect to the interpretation of that division in the Joinery Award. I think, as Mr Maxwell said, I'm not entirely sure why the On‑site Award has been listed for discussion this morning.
PN424
I know that there is a claim before the Construction Awards Full Bench with respect to casuals and the On‑site Award, however, I'm of the view that there's nothing further that we need to address before this Bench with respect to the On‑site Award this morning.
PN425
VICE PRESIDENT HATCHER: All right.
PN426
Does anyone else take a different view? All right. Well, I'll strike that out from the list of Awards.
PN427
Ms Sostarko, I didn't understand the Joinery Award to be on ABI's list. Is that in your list, Mr Izzo?
PN428
MR IZZO: In relation to the Joinery Award, it would have been because there was an error in the table, but we've since rectified that position and we now believe the interpretation of the Joinery Award is clear, and our interpretation accords with that of the CFMMEU, MBA and HIA. So I think that ‑ ‑ ‑
PN429
VICE PRESIDENT HATCHER: So I can strike that from the list of ‑ ‑ ‑
PN430
MR IZZO: Yes.
PN431
VICE PRESIDENT HATCHER: ‑ ‑ ‑ Awards. Right.
PN432
MR IZZO: I believe that's right.
PN433
VICE PRESIDENT HATCHER: Right.
PN434
Now, Ms Rogers in Adelaide, you've sent through correspondence with respect to the Meat Industry Award and the Poultry Industry Award?
PN435
MS ROGERS: That's correct, your Honour.
PN436
VICE PRESIDENT HATCHER: So the outstanding issue is what?
PN437
MS ROGERS: Thank you, your Honour. Where we had previously had a difficulty with the Meat Industry Award and its lack of clarity, quite conveniently that's been fixed up in the exposure draft process. The opposite is true for the Poultry Processing Award. So that Award has become less clear in the exposure draft process. Without wanting to anticipate the views of the Full Bench, it's possible that we can remove ourselves from these proceedings and instead focus on the exposure drafting process instead.
PN438
VICE PRESIDENT HATCHER: All right. Does the AMIEU have a proposal as to the how the relevant provision should read?
PN439
MS ROGERS: We can certainly file a draft determination in terms of the Poultry Processing Award. Ideally, it would simply revert back to the previous – well, the current language, as opposed to that proposed in the exposure draft.
PN440
VICE PRESIDENT HATCHER: Okay. So I'm not quite following this. The release of the exposure draft for that Award, does that envisage some process for responses?
PN441
MS ROGERS: There have been some process for responses. I think we're awaiting further revisions for the exposure draft process.
PN442
VICE PRESIDENT HATCHER: All right. Well, what I think I'll simply ask you to do is, we'll obviously set a report backdate arising out of this directions hearing. So I'm going to ask you to return and report back about the position on some further occasion towards the end of September. Is that acceptable?
PN443
MS ROGERS: It is, thank you, your Honour.
PN444
VICE PRESIDENT HATCHER: All right.
PN445
Mr Nguyen, the Aircraft Cabin Crew Award?
PN446
MR NGUYEN: Your Honour, we haven't seen any response from any employer party to our submission that we filed on the 25th. We've only been in discussions with ABI about the general issue of the casual overtime, but not about the Award history issues that we raised in our submission. So it might be beneficial for us to continue discussions with the employers.
PN447
VICE PRESIDENT HATCHER: All right. So are you, likewise, happy to report back in eight weeks?
PN448
MR NGUYEN: Yes.
PN449
VICE PRESIDENT HATCHER: Yes.
PN450
MR NGUYEN: Or earlier, if the Commission prefers.
PN451
VICE PRESIDENT HATCHER: All right, thank you.
PN452
The Children's Services Award, Mr Bull, is there any need for any different approach to be taken with that Award?
PN453
MR BULL: No, that's one where we don't think there's a lack of clarity, so we've made our position known.
PN454
VICE PRESIDENT HATCHER: All right.
PN455
The Higher Education Industry General Staff Award, where are we up to with that Award? That is, it was left on the basis to see whether a consent position could be reached.
PN456
MR PILL: Yes. Vice President Hatcher, Mr Pill in Melbourne. And I'm here, physically, with Ms Pugsley and Mr Cupido from the NTEU.
PN457
VICE PRESIDENT HATCHER: Yes.
PN458
MR PILL: Sorry, excuse my voice, your Honour. Your Honour, I can indicate that there is substantive, in principle, consent position that's been reached. Could I indicate very briefly that it reflects the pre‑reform Award revisions which did deal with when casuals were entitled to overtime and the relevant rate. And there was a common submission at the time, at the making of the Award, that that should be adopted.
PN459
And unfortunately, for whatever reason, it was not included in the modern Award, together with a clause that makes clear that, where a casual employee is entitled to more than one rate, they will be eligible for the highest single applicable penalty rate or loading. Can I indicate, subject to the Bench's views, the parties were intending to finalise some drafting on that and to provide it to your Chambers by the end of the week. So accordingly, whilst we're mentioned in the list of 46 Awards, there are separately applications for variation by the parties who actually have an interest in that Award. My clients – indeed, no universities are members of Australian Business Limited or the New South Wales Chamber, and we'd be proposing that the Award issue be resolved on that basis.
PN460
VICE PRESIDENT HATCHER: All right. Is Mr Izzo and ABI aware of that position? That is, the consent position reached?
PN461
MR PILL: I don't believe so, your Honour. And it was, in part, the product of some discussion this morning.
PN462
VICE PRESIDENT HATCHER: All right.
PN463
So, Mr Izzo, what's ABI's interest in this award?
PN464
MR IZZO: So I think – I'd have to check, but I believe we would have members covered by the Award. But in relation to this Award, the drafting of the Award provision, in our view, operates such that the casual loading is not payable during overtime, and we've identified that that language might better be improved. Now, if there has been some development in terms of that Award, I think the sensible course of action would be for us to have some discussions with Mr Pill and the NTEU. And if we can all come to an agreed position as to how that Award operates, then it would probably come off our list.
PN465
VICE PRESIDENT HATCHER: All right. Well, can I leave it on this basis?
PN466
Mr Pill, if a draft determination reflecting the consent position could be filed within seven days, and served on the ABI?
PN467
And then, Mr Izzo, I'll allow ABI a further seven days to indicate whether it has any remaining issue with the draft determination. If it does not, we'll finalise that matter on the papers. If there is any issue, we'll have the matter on for report back on the eight-week period.
PN468
All right. Is there any other specific Awards anybody wishes to report on?
PN469
MR ROGERS: Mr Rogers from the NFF in Canberra.
PN470
VICE PRESIDENT HATCHER: Yes.
PN471
MR ROGERS: I assume the discussions which took place between the employer and the Union parties affected the Pastoral Award and the Sugar Industry Award. But I wasn't included in those discussions, so just to note I'd like to be included in the future in those discussions and the exchange of correspondence, if possible.
PN472
VICE PRESIDENT HATCHER: Yes, all right.
PN473
Well, you heard that, Mr Izzo. The expectation is that any further discussions will involve all the interested parties to the Awards listed in your submission.
PN474
MR IZZO: Yes, it's noted, your Honour.
PN475
VICE PRESIDENT HATCHER: All right.
PN476
All right. Well, if there's no further issue, we'll adjourn and as soon as practical, issue a listing for the directions hearing, which will be at some date after 24 September.
PN477
MR IZZO: Your Honour, if I could, for the sake of completeness and just to remove one further party from the proceedings, the Waste Management Award ‑ ‑ ‑
PN478
VICE PRESIDENT HATCHER: Yes.
PN479
MR IZZO: ‑ ‑ ‑ there was an error in our table. We have circulated to the TWU a revised interpretation of how that Award operates. We say it is clear. Our understanding now accords with that for the TWU. And so I think that can come off the list as well.
PN480
VICE PRESIDENT HATCHER: All right.
PN481
MR IZZO: Now, I know there's no representative of the TWU here, but I think we have reached an agreed position with them.
PN482
VICE PRESIDENT HATCHER: All right. Thank you.
PN483
All right, we'll now adjourn, and then we'll resume at a ‑ ‑ ‑
PN484
MR CLARKE: Your Honour, I'm here appearing for (indistinct).
PN485
VICE PRESIDENT HATCHER: Mr Clarke?
PN486
MR CLARKE: Did you want to hear me address you on a procedural argument I wish to raise in relation to that submission that's made about these Awards and also ‑ ‑ ‑
PN487
VICE PRESIDENT HATCHER: Well, is there anything you want to raise in addition to the correspondence?
PN488
MR CLARKE: Yes, there is.
PN489
VICE PRESIDENT HATCHER: All right. Go ahead.
PN490
MR CLARKE: Yes. Now, so that correspondence put up two alternative proposals. The second issue, (indistinct) a primary position, was that the argument not be heard at all. And the first argument was that there would be some time allowed to respond to that, and that the Bench not proceed to hearing on the matters listed – not proceed to issue a separate decision about that point in the proceedings commencing at 11 o'clock and defer it (indistinct) to make submissions about that. Now, I recognise that – can I assist you with a copy of the letter, your Honour, or is that ‑ ‑ ‑
PN491
VICE PRESIDENT HATCHER: No, no, we've got it. We're just turning to it now. Yes, we have it.
PN492
MR CLARKE: Yes. This type of a task could be a lot easier if section 111(1)(g) of the Workplace Relations Act was still around. But our submission is – and we don't think it's controversial – that sections 577, 589, 590 and 591 of the Fair Work Act provide the Commission with the capacity to control its process and ensure procedural fairness. I say that having regard to, for example, Buchanan J's observations at paragraphs 21 to 25 of Coal & Allied. That's [2011] FCAFC 54. In paragraphs 21 to 26 of E Allen v Fluor Construction [2014] FWCFB 174.
PN493
So we're seeking, under issue one of our correspondence, to provide a proper and fair opportunity for the parties potentially impacted by the adoption of what we've described in the letter as the ABI New South Wales BC position. To provide them with an opportunity to resist that position being adopted. And what we're seeking under issue two is that the position not be permitted to be argued at all.
PN494
The latest correspondence from the ABI New South Wales Business Chamber on 24 July – well, it seeks to sort of throw Mr (indistinct) under a bus and counts all of this, in part, as an entirely rudimentary defensive submission. And for the other part, there's some kind of dispute about some ambiguity in particular Awards.
PN495
VICE PRESIDENT HATCHER: That's what unclear to me now, Mr Clarke. It's unclear to me whether ABI is, in fact, seeking that any of the Awards be varied on the basis of that statement of purported principle.
PN496
MR CLARKE: Yes.
PN497
VICE PRESIDENT HATCHER: And that's why I think this might be a bit premature.
PN498
MR CLARKE: Well, can I shortcut all of this?
PN499
VICE PRESIDENT HATCHER: Yes.
PN500
MR CLARKE: The reason they say that, in my view, is because they anticipate that the position that they're taking is under attack, on the basis that it requires a work value argument to justify it, unless it's advanced on the basis of ambiguity or uncertainty. For that reason, they say, "We've had a brilliant idea about how the casual loading works, therefore all these Awards must be ambiguous. Therefore, this must be the true meaning".
PN501
Because any reasonable employer, looking at these casual Awards, would be terribly confused, because they will know the 100‑year history of industrial arbitration of casual loadings, they'll look at the (indistinct) in 2000 and the most recent decision, and they'll do all of these sums to figure out how casual loading is calculated. And they'll go, "My goodness, this casual's been overcompensated during overtime, it can't possibly work that way".
PN502
So the point of the matter is, they're trying to find a way in to raise this argument without being confined by the restrictions in the Act. And those of you who work (indistinct) for (indistinct) might know what I have to say about that. And it's the tail waving the dog.
PN503
The asserted ambiguity, or the need for the Business Chamber to change its view of the interpretation of the entitlements and the Award it identifies in its table is solely the product of the broad proposition that it now wants to agitate. It's a mischaracterisation in an effort to open up an opportunity that shouldn't be allowed to be opened up. And it needs to be remembered, in the context of all of this, how broad the proposition is and the context that it's being raised in the four‑yearly review.
PN504
So, I mean, facially, the argument's been raised, in part, in the submission in response to Union demands or applicant's claims. And there were directions for them to make a response and they complied with them. But it's a generic point. It's a contention that there's no justification for a casual loading to be paid to anyone when they work overtime or outside what would otherwise be defined as ordinary hours. It has that broad application.
PN505
And it doesn't matter that they don't propose to make it in relation to all Awards, and it doesn't matter that they say it's all about ambiguity, because this is the four‑yearly review. And it's been common experience that an issue that's raised in one context, or about one Award, or a small number of Awards, can be broadened at the Commission's own initiative to involve many more. And that's precisely what the genesis of this particular common issue Full Bench was.
PN506
VICE PRESIDENT HATCHER: Well, to be clear, the genesis of this common issue Full Bench was to resolved ambiguities that were identified in a certain number of Awards. It was not to explore the merits or the principles attached to the notion of casuals receiving overtime, vis à vis the casual loading. Now, one can see that, if a provision is truly ambiguous and there's no material which would suggest what the Award was intended to originally mean, there might be some resort to questions of principle. But that was not the purpose for these proceedings.
PN507
MR CLARKE: Well, that may partially deal with the issue. But, you know, the position that's been taken is akin to hypothetically saying, at some point in the review - let's say it's the issue of meal allowances, where there was a common issue to do with meal allowances and there had been a whole load of cases about meal allowances and consent to terminations, uncontroversial determinations.
PN508
The ABI New South Wales Business Chambers could come along and say, "Look, we don't have any problem with what you've done with the Manufacturing Award or the Retail Award, we don't have a problem with the consent deal in relation to the Clerks Award, that's entirely unambiguous. No, we don't want to disrupt any industry‑specific arrangements in those Awards. But in relation to the Hospitality Award, we oppose those variations because there is no Hospitality Award, because the Fair Work Act is unconstitutional". And where does that leave you?
PN509
And as I said before, the fact that they raise it as a sword in relation to the Awards included in the table and as a shield in relation to the ones that are listed at 11 o'clock today doesn't make a difference. And we're concerned about the lack of protection, if this argument is allowed to run, to re‑agitate matters that could have been agitated before. And, you know, the squarest examples of that arose as we referred to in the correspondence in relation to the as yet undetermined matters before this Bench, in relation to the Hospitality Awards.
PN510
But, more pointedly, in relation to the way the SDA's claims were dealt with in the casual and part‑time employment Full Bench, where the ABI and New South Wales Business Chamber did make submissions, and the SDA did make submissions, the SDA sought for the casual loading and overtime to be paid at the same time. And the ABI's response to that, as referred to in paragraph 666 of the decision - make of that what you will – the ABI submitted the composition of the casual loading should be considered on an Award‑by‑Award basis to determine whether any other penalty rates or loadings had been absorbed.
PN511
Now, out of an abundance of caution, I cross‑checked the relevant submissions themselves, which were dated 18 October 2016. And what they say at paragraph 5.15 is:
PN512
What is or isn't included in a casual loading payment must be determined on an Award‑by‑Award basis.
PN513
So not only did they have the opportunity to raise then, and in relation to the Hospitality Awards, the point that they want to raise now in this continuing four‑yearly review, but they raised an entirely inconsistent one. And, of course, you know, the SDA's claim was granted and the reasons for granting that are contained in paragraph 677 and 678 of the July 2017 decision:
PN514
You know, overtime penalty rates for casuals should be the same as the overtime penalty rates for permanent employees, and the overtime rates are to be applied to ordinary hourly rate with the casual loading also to be applied to the ordinary rate.
PN515
With the Bench observing along the way that the casual loading doesn't compensate for the disabilities for working overtime. And those disabilities are to valued equally for both classes of workers. So is that to be overturned now, or re‑examined, or reviewed again, merely because an idea flew into someone's head two years down the track?
PN516
Now, the protection, we say, against that type of a result must either lie in the Commission's power to control its procedure, or in its discretion to decline to make determinations, varying Awards in the review. Now, I can't point – getting to the law‑y end of it - to an Anshun point being run successfully in the Fair Work Commission.
PN517
All I can is that, during this review, in the proceedings concerning our accident pay, an argument of that type of nature was run against me, funnily enough, [2015] FWCFB 3523. You dealt with, at paragraphs 148 to 154. All I can say, the argument wasn't dismissed on the basis that the principles weren't applicable. The argument was dealt with on the basis the principles were applicable, but the argument itself was unsuccessful on the facts.
PN518
Now, I recognise that there are clearly difficulties with adopting some sort of (indistinct) or Anshun‑type estoppel in proceedings which aren't strictly interparty proceedings in the ordinary sense. All I can about that is that the reality is that the perpetual parties to these reviews are far from strangers to one another.
PN519
But more importantly, the absence of a strict inter partes litigation framework doesn't alter the fact that, as all the authorities will tell you, the categories of abuse or misuse of process are not closed. And a Commission's power to control its own processes can't be a dead letter just because this is a four‑yearly review. It must extent to preventing a misuse of procedure in these reviews. And if that's not the case, then this review could potentially not finish before the two‑year cut‑off date mandated in the transitional provisions that we're operating under.
PN520
So to put it into that Anshun‑type framework, closest as we can, they're asserting a position that's inconsistent with the position they've asserted in the earlier review proceedings, including those which have proceeded to judgment. Secondly, the casual overtime proceedings in the casual and part‑time common issue and the Health Awards matters in this common issue required the parties to bring forward their whole case, and the ABI and New South Wales Business Chamber did bring forward a case, but they didn't run this argument.
PN521
And thirdly, the point that they want to agitate now is one which is so relevant to those prior matters in this review that it would be expected that it would have been raised defensively. It would be unreasonable for them not to have done so.
PN522
VICE PRESIDENT HATCHER: It seems to me this submission has (indistinct) obviously of consequences for the 11 o'clock matters. But this concerns the Hospitality Awards, doesn't it?
PN523
MR CLARKE: Yes, it does. The arguments in relation to the Hospitality Awards were unsuccessful in the broad, "They can't run it at all" submission. The secondary position is, well, let's not put anybody to the job of responding to that submission, whether it be Mr Bull and the other Unions concerned in the hearing starting at 11 o'clock or the others listed.
PN524
VICE PRESIDENT HATCHER: I think the implications of that question are somewhat different. That is, we're being asked at 11 o'clock to review provisions which we added to the Awards as a result of a part‑time and casual case. Your submission would have some force in that context, wouldn't it?
PN525
MR CLARKE: Well, these common issue proceedings commenced with an explicit invitation for applications to vary Awards to do with casual overtime. And that might place it in a different category. But if we're unsuccessful in saying that the argument – if we're (a) unsuccessful in saying the argument shouldn't be dealt with at all in this review, and we're also unsuccessful in saying in our submission that nobody should be forced to respond to it until the last group of matters in this common issue comes on, then – well, at least insofar as the ACTU and United Voice are concerned, and I don't know what the other Unions' positions are about this. I'll do the best I can to respond to the merits of the point.
PN526
But we do put, quite forcefully, the other matters that are raised in the correspondence and that I've addressed you in relation to this morning.
PN527
VICE PRESIDENT HATCHER: Yes. All right. Are you content to take that submission as read for the purpose of the 11 o'clock matters?
PN528
MR CLARKE: Insofar as it raises procedural arguments ‑ ‑ ‑
PN529
VICE PRESIDENT HATCHER: Yes.
PN530
MR CLARKE: ‑ ‑ ‑ I am.
PN531
VICE PRESIDENT HATCHER: Yes.
PN532
MR CLARKE: Provided there's nobody else who'd be coming. No, everyone's already here.
PN533
VICE PRESIDENT HATCHER: Well, the clubs and hospitality are here, in any event ‑ ‑ ‑
PN534
MR CLARKE: Yes, yes.
PN535
VICE PRESIDENT HATCHER: ‑ ‑ ‑ so they've heard it.
PN536
MR CLARKE: Of course. Yes, yes. Yes, sir, yes.
PN537
VICE PRESIDENT HATCHER: All right.
PN538
Well, look, I'm not going to ask any other party to respond at this stage to that submission, unless they have a burning desire to. Obviously, we'd speak to ABI's position – I think the position may (indistinct) assess when we have the report back. In respect of the 11 o'clock matters, parties can respond to that submission as they see fit.
PN539
All right, well, we'll adjourn and we'll issue a listing sometime this week for the further report that is being (indistinct). We'll now adjourn.
SHORT ADJOURNMENT [10.43 AM]
RESUMED [11.22 AM]
PN540
MR S BULL: If the Commission pleases, my name is Bull. I appear for United Voice.
PN541
VICE PRESIDENT HATCHER: Mr Clarke, you appear for the ACTU?
PN542
MR T CLARKE: Yes, for the ACTU and also providing such assistance as Mr Bull requires for United Voice, yes.
PN543
VICE PRESIDENT HATCHER: Mr Izzo and Ms Hamberger for ABI?
PN544
MR L IZZO: Yes, your Honour.
PN545
VICE PRESIDENT HATCHER: Mr Ferguson and Mr Harrington for AiG?
PN546
MR B FERGUSON: Yes, your Honour.
PN547
VICE PRESIDENT HATCHER: Mr Moore for Clubs Australia?
PN548
MR R MOORE: Yes.
PN549
VICE PRESIDENT HATCHER: Mr Ryan for AHA?
PN550
MR P RYAN: Yes, your Honour.
PN551
VICE PRESIDENT HATCHER: Ms Wiles for the CFMMEU?
PN552
MS V WILES: Manufacturing division, yes.
PN553
VICE PRESIDENT HATCHER: Yes, all right. Mr Barlow for the CPSU?
PN554
MR K BARLOW: If it pleases.
PN555
VICE PRESIDENT HATCHER: Is anyone in the bleaches appearing? Mr Odgers for the IEU.
PN556
MR A ODGERS: Yes.
PN557
MS C BAILEY: Bailey, initial C, Association (indistinct) New South Wales.
PN558
VICE PRESIDENT HATCHER: Ms Bailey. All right, Mr Bull?
PN559
MR BULL: I'll go first. I did file for this matter some amended variations where the changes were entirely - they're superficial. There was the odd typo and so forth. That was filed on Friday, so they should be before you. There's no substantive difference to what was filed in relation to the directions for this matter.
PN560
I understand that - I was talking to my friend, Mr Izzo, in relation to the broader point made by the ACTU perhaps that would be dealt with at 2 o'clock.
PN561
MR IZZO: Yes, your Honour. It's just we have witnesses waiting including one overseas so we thought if we could move to the evidence and then the objection of the ACTU could be dealt with at 2 that would at least ensure that the witnesses are inconvenienced somewhat less.
PN562
MR BULL: I would perhaps characterise our position in that we're supportive of what the ACTU has said but we might not have made that submission ourselves.
PN563
VICE PRESIDENT HATCHER: Sorry, say that again?
PN564
MR BULL: We're supportive of what they have said but we may not have necessarily made the precise submission ourselves. It's made as a collective submission by a number of unions.
PN565
I was just going to make - I have a very brief opening and I will keep it brief. I'll just indicate that the draft variations that you have before you are, we say, responsive to the directions of this common issue. Those directions of 4 December 2017 where it did call for any parties seeking variations and these were done in accordance with those directions.
PN566
VICE PRESIDENT HATCHER: At least with respect to the Hospitality Award they're not clarificatory, they're substantive changes.
PN567
MR BULL: They're substantive changes. I agree with that.
PN568
VICE PRESIDENT HATCHER: So just to be clear you're asking us to review the provisions which we've ordered in the review.
PN569
MR BULL: I understand that. But also the decision in which the entitlement was created also did appear to leave the door open. It's said that that question wasn't definitively determined and that's where we are, I suppose.
PN570
I was just going to make a very brief opening.
PN571
VICE PRESIDENT HATCHER: Yes.
PN572
MR BULL: It should be I hope clear from the most recent submission document we lodged. Our case is principally that the loading is properly understood as part of a casual employee's paid rate. It's not a penalty. It's not paid to dissuade an employer from engaging a person as a casual. Overtime is best characterised as a penalty and that's notwithstanding the current characterisation of penalties as relating to a disutility which resides with the employee.
PN573
We say the character of overtime lends itself to the traditional industrial characterisation of a penalty as in a device which has a high degree of dissuasion directed to the employer rather than simply compensating the employee for disutility.
PN574
We say there are strong reasons why you can distinguish overtime from, for example, weekend penalty rates in that analysis. They're clearly - they relate to disutility which should not go on forever and the staggered nature of most overtime lends itself to the more traditional industrial analysis which is attached to the notion of a penalty. You tend to have the first two hours or three hours paid at time-and-a-half, then it goes up to double time. That, we say, is indicative of the payment having an element of dissuading an employer.
PN575
Currently under the three Hospitality Awards the loading and overtime and other penalties are captured by the relevant accumulation clauses in each of the awards and at least in terms of payment is figured in the same manner as a penalty. We say that's not strictly appropriate. The loading is and should be part of the paid rate and that's why we say it would be appropriate to revisit that question now and disaggregate it.
PN576
The other issue is - this is obviously evident from the decision. The loading has always been paid during overtime, but the issue with the current way it's treated it's been absorbed.
PN577
VICE PRESIDENT HATCHER: Sorry, say that again?
PN578
MR BULL: Beg your pardon?
PN579
VICE PRESIDENT HATCHER: The loading has always been paid?
PN580
MR BULL: It was never the case - the other issue which we say perhaps distinguishes these claims from another participant making substantive variations is that the relative novelty of overtime in these three awards, it didn't exist till 1 January 2018. What I'm saying is when it was created, and it becomes a bit moot, but it is notionally paid when the employee works overtime, but the manner in which it's configured is that it's absorbed within other penalties. So notionally it disappears because all these three awards all have provisions where they talk about penalties accumulating where you get the highest - you get the penalty which is most beneficial to the employee and all the other ones cut out, and notionally the loading is simply worked over or rather it's there but because of the weekend penalty rate or the overtime penalty will be greater, it disappears, so it is there but it's being absorbed.
PN581
VICE PRESIDENT HATCHER: So are you asking us to resolve these applications on a proposition of general principle?
PN582
MR BULL: Yes, but where there's particular, we say, circumstances in relation to the three awards where it's appropriate to have the loading expressed when the casual employee works overtime. So in a sense it's a principle. It's not necessarily a principle which should apply to every single modern award, and it's within the context where there is significant variation. I think it's - one of the reasons why we're having this common issue is that there's a lack of consistency of treatment. We're not saying that this is a principle which necessarily should apply everywhere but there are sound reasons in relation to these three awards to have casual employees, to have their loading expressed when they work overtime.
PN583
So in that sense, yes, as a matter of principle it's not necessarily a principle which can and should be automatically applied everywhere, and frankly these are three awards where the treatment of the casual employee is frankly some of the poorest in relation to the award system. They're not well paid and the premium that we say they're getting is deficient and an appropriate way to remedy that problem would be to have the loading paid when they work overtime. And the other issue is that there's extremely high rates of casualisation in these three awards, so it's not a - no, it's not a general principle which necessarily applies everywhere, but obviously if there are other awards where there are similar circumstances it's a matter which some other participant may want to revisit. That's the brief opening that I was intending to make.
PN584
VICE PRESIDENT HATCHER: Mr Bull, just to be clear about this, in the part-time casual case on United Voice's application we varied the awards for three Hospitality Awards I'm talking about to provide for overtime on the basis of an application made by United Voice.
PN585
MR BULL: Correct.
PN586
VICE PRESIDENT HATCHER: And we made the variation in the terms we did, subject to some issues about the span of hours, consistent with the application made by United Voice.
PN587
MR BULL: That's correct.
PN588
VICE PRESIDENT HATCHER: And we did so in order that the awards meet the modern awards objective.
PN589
MR BULL: In the sense that every time an award is varied by this place the next day it meets the modern award objective. I have to agree with that.
PN590
VICE PRESIDENT HATCHER: Then you're coming back here as part of the same review and saying that the variations which we granted upon your application did not meet the modern awards objective?
PN591
MR BULL: It's an issue which we did raise belatedly in the casual and part-time common issue proceedings. Our excuse, for want of a better term, is that the issue of making the casual loading distinct from the penalty really came into full view on 23 February 2017, I believe, which was the penalty rates substantive decision, and it quoted, which I've quoted again, the Productivity Commission report where it had an analysis which said that the casual loading should be paid distinctly from other payments which relate to different forms of disability. So in a sense we're progressing that view.
PN592
VICE PRESIDENT HATCHER: That's not a view United Voice held before the Productivity Commission said it?
PN593
MR BULL: We probably did if we'd turned our mind to it. And once again I may be sort of delving into the realm of excuses which I don't know whether that particularly assists you, but with fairness to United Voice we did run a fairly thorough and sophisticated case in relation to the penalty rates review.
PN594
The Productivity Commission report and the particular pages which I'll seek to re-tender in these proceedings was a document which was relied on principally by employers. It was not the subject of any great debate. It was inserted into the proceedings rather late. From my memory it was after the close of evidence and before the commencement of submissions, and in many respects what that Full Bench made of it was a surprise to everyone, so we've made a variation, we say, in line with the directions that this Full Bench have made.
PN595
We believe there is intrinsic merit that makes those variations of substance and real and we're obviously conscious of the risks we take in progressing these variations now and in this process.
PN596
I'll call our first witness. So it's Associate Professor Muurlink.
PN597
VICE PRESIDENT HATCHER: I think Mr Moore wants to say something.
PN598
MR BULL: Sorry.
PN599
VICE PRESIDENT HATCHER: Mr Moore?
PN600
MR MOORE: Excuse the voice today, your Honour. I allowed my friend to make his opening. I must say I'm under a bit of a difficulty, your Honours, for this reason, I understood these proceedings were formed up out of the statement that was issued by the Full Bench on 4 December 2017 where essentially awards generally in relation to clauses that were already existent in regard to casual overtime were to be reviewed as to whether they were, for want of a better way of describing it, ambiguous or otherwise, and then on the basis of whether the ambiguity was found to exist.
PN601
Applications or draft determinations were called for as to how the matter might be resolved. In saying what I've just said to the Full Bench I'm referring to the statement that was issued and in particular the interaction between paragraphs 3 and 4 and what was envisaged at 6 and 7. And, as I understand it, in relation to the award that I am involved in, the Clubs Award, that was subject to a full contested hearing in a set of proceedings before a Full Bench. The Full Bench made variations that were effective in the three Hospitality Awards including the Clubs Award effective from 1 January 2018, and there is in relation to those matters, as I appreciate it at the moment, no one bringing forward any position before this Full Bench that any of those variations that were made were ambiguous. If that is the case, what is the purpose of the proceeding in relation to the three Hospitality Awards, and in particular the award that I've been asked to represent interested parties on, the Clubs Award, because essentially what appeared to have been stated by way of opening was that United Voice in relation to those awards wished to run a full merits case for a variation. With respect, I do not think that arises out of the four year review of the other awards that have not been considered in the same way.
PN602
I rise at this stage, your Honour, because there's issues that flow from that. One is what evidence is common given that the large amount of the evidence has already been put forward in the case involving the three Hospitality Awards and is now being tendered in a case in relation to other awards which were never involved in the former set of proceedings, and I think it's important at the outset for that to be clarified because otherwise I am operating on a misunderstanding of what this case is about because, as I understood what it was about, based on the material that was attached to the statement was whether there was in relation to all of the awards identified there positions surrounding casual employment and casual overtime provisions, and then there was in attachment A3 questions identified; unclear whether overtime is payable to casuals, unclear when overtime commences, and unclear at what rate overtime is payable.
PN603
Reading the provisions within the Clubs Award in relation to clauses 10.5, in relation to 28 and 29 there is none of those three matters extant. There is no ambiguity about what rate is payable. There is no ambiguity when the overtime commences, and when I say that, when an amount over and above a casual loading is payable. And unclear whether overtime is payable to casuals at all because, as my friend just said, the entitlement was created by the former Full Bench and operative from 1 January 2018 on the terms that that Full Bench decided.
PN604
So I think it's important, particularly when the Commission is just going to now move into evidence, which is called common evidence, that we know exactly what evidence that's going to be led today is relevant to the matters involving the award that I represent and also in relation to the other two Hospitality Awards where the evidence was led substantially before another Full Bench and where on the face of it there is no issue arising similar to issues that were identified in the original statement that required intervention in some way by the Full Bench now constituted in carrying out the review of the identified awards.
PN605
I consider what I've just said to the Bench important because it really sets the parameters for the involvement of my clients in terms of the interest it has in the Clubs Award and also by extension, and Mr Ryan can talk for himself, those persons that he represents in relation to the other two Hospitality Awards being the Hospitality Awards and the Restaurant Awards in that regard.
PN606
So I think we need to have the parameters of where there is a commonality because I was looking also at the transcript of the proceedings where Mr Bull identified this to the Bench, at PN395:
PN607
It's not a matter where we'd be proposing to call a great deal of evidence. We'll be essentially asking the Commission to accept as a matter of principle that the casual loading and overtime should be disaggregated because they're directed towards different types of disutility.
PN608
Over the course of the weekend and about a week prior to this hearing a vast amount of material has been filed outside of the timetable commencing on 19 July and if one reads the reply submissions that have been made filed by United Voice those reply submissions I would say to the Bench bring a different type of case to that which was initially contemplated by United Voice in the original submissions that were filed on 13 May 2019.
PN609
My position would just be, your Honours, to get it clarified at the outset exactly what is in issue and what is not in these proceedings and what is currently being considered and where the three Hospitality Awards fit within them, because at the moment there is nothing that would require a review of those matters, in my respectful submission, on the areas that I've just identified to you, the question of ambiguity within the award, and so we're dealing with a merits case for a variation to awards that was made by another Full Bench and have only been operative since 1 January 2018. And I just say that those instructing me in regard to the Clubs Award and others in the hospitality industry would need to know that, because otherwise we cannot make really any sensible position regarding common evidence and the like, your Honour. And, given that the evidence, as I say, has been substantially led in the proceedings before the other Full Bench of which your Honour also headed.
PN610
VICE PRESIDENT HATCHER: All the Members of the Bench were on that Bench, so, look, Mr Moore, all I can say is you've made an accurate statement about the genesis and scope of this aspect of the review as I think I confirmed this morning, but beyond that I propose that we simply get on with the hearing ‑ ‑ ‑
PN611
MR MOORE: Thank you, your Honour.
PN612
VICE PRESIDENT HATCHER: ‑ ‑ ‑and hear what United Voice has to say.
PN613
MR MOORE: Thank you, your Honour.
PN614
MR BULL: I call Professor Muurlink.
PN615
VICE PRESIDENT HATCHER: Professor Muurlink, can you come forward, please?
PN616
MR BULL: I've given him a copy of his statements.
PN617
THE ASSOCIATE: Could you please state your full name and address for the record?
MR MUURLINK: Olav Tetus Muurlink, (address supplied).
<OLAV TETUS MUURLINK, AFFIRMED [11.45 AM]
EXAMINATION-IN-CHIEF BY MR BULL [11.45 AM]
PN619
VICE PRESIDENT HATCHER: Mr Bull?
*** OLAV TETUS MUURLINK XN MR BULL
PN620
MR BULL: Your Associate Professor Olav Muurlink?‑‑‑That's correct.
PN621
Professor, you've made two statements in relation to this matter?‑‑‑Yes.
PN622
The earlier one is a statement made on 29 February 2016?‑‑‑That's correct.
PN623
You got a copy of that with you?‑‑‑I do.
PN624
The main substance of that is that annexes a report you did which is annexure C and that's titled Impact of Intraday or Intraweek Overtime on Physical and Psychological Health?‑‑‑That's correct.
PN625
I might just tender that statement.
PN626
VICE PRESIDENT HATCHER: So this is a statement of 13 May 2019?
PN627
MR BULL: No, there's two. There's a later one.
PN628
VICE PRESIDENT HATCHER: So this is a statement of 29 February 2016?
PN629
MR BULL: Correct.
VICE PRESIDENT HATCHER: So the statement of Olav Muurlink dated 29 February 2016 will be marked exhibit 1.
EXHIBIT #1 WITNESS STATEMENT OF OLAV MUURLINK DATED 29/02/2016
PN631
MR BULL: You've got a further statement. That's dated 13 May this year?‑‑‑That's correct. Yes.
PN632
You've read that again?‑‑‑Yes.
PN633
And it's true and correct. Is there anything you want to amend?‑‑‑No.
PN634
Perhaps that could also be tendered?
*** OLAV TETUS MUURLINK XN MR BULL
VICE PRESIDENT HATCHER: So the statement of Olav Muurlink dated 13 May 2019 will be marked exhibit 2.
EXHIBIT #2 WITNESS STATEMENT OF OLAV MUURLINK DATED 13/05/2019
PN636
MR BULL: That's the evidence-in-chief for this witness.
VICE PRESIDENT HATCHER: Thank you. Who wants to cross-examine this witness? Mr Izzo?
CROSS-EXAMINATION BY MR IZZO [11.47 AM]
PN638
MR IZZO: Yes, your Honour, if I may go first? Professor Muurlink, may I just ask do you have those reports in front of you?‑‑‑I do. Thank you.
PN639
You do, excellent. Thank you. If I can take you to exhibit 2, that's the latter statement?‑‑‑Mm-hm.
PN640
The statement dated 13 May 2019. In that statement you refer to five reports that you have identified as relevant to matters pertaining to overtime and you've given a brief synopsis of each of those five reports. You're aware of that?‑‑‑Yes. That's right.
PN641
The first one being a report by Bani and Tamakoshi, I believe?‑‑‑That's correct. Yes.
PN642
I'd just like to ask you some questions about each of these reports if I could?‑‑‑No problem.
PN643
And I'll start with the first one. The report by Bannai and Tamakoshi do you - I might call it - because you've given us the report, so I might call them studies just for the purposes of understanding what I'm talking to?‑‑‑No problem, yes.
PN644
So the Bannai and Tamakoshi study you accept that this study did not compare the number of overtime hours casuals work versus the number of overtime hours that permanent employees work. Do you accept that?‑‑‑That's correct. Yes.
*** OLAV TETUS MUURLINK XXN MR IZZO
PN645
And do you accept that this study did not consider the differences between the impact of overtime on permanent employee versus the impact of overtime on casual employees?‑‑‑That's correct.
PN646
That it didn't analyse the level of control that casual workers have over overtime hours versus the level of control permanent staff have over working overtime hours?‑‑‑No, control wasn't a variable.
PN647
You accept, do you, that this analysis is aggregated? And what I mean by that is this research doesn't really distinguish between permanents and casuals at all? It's focus is ‑ ‑ ‑?‑‑‑That's correct. Yes.
PN648
If I could then take you to the next report, that is Bernstrom and Hulst. You'll have to apologise - me for some pronunciation but I will give it my best shot. I'm going to ask you some similar questions. Do you accept that this study did not compare the number of overtime hours that casuals worked versus the number of overtime hours that permanent employees worked?‑‑‑That's right.
PN649
Do you accept that this study did not consider the differences between the impact of overtime on permanent employees versus the impact of overtime on casual employees?‑‑‑No, it didn't.
PN650
And it didn't analyse the level of control casual workers have over overtime hours versus the level of control permanent staff have over working overtime hours?‑‑‑No, it did not.
PN651
And indeed in this report it doesn't refer to casual employees at all. It actually only refers to part-time and full-time employees. Are you aware of that?‑‑‑Yes. I mean, it differs between countries, but that's correct, yes.
PN652
The third report is by Kivimki, Jokela and others, I believe?‑‑‑Mm-hm.
PN653
And I think you call this one Study on Stroke and Heart Disease?‑‑‑Yes.
PN654
Do you accept that this study did not compare the number of overtime hours casuals worked versus the number of overtime hours permanent employees worked?‑‑‑No, it did not.
*** OLAV TETUS MUURLINK XXN MR IZZO
PN655
And you accept that this study did not consider the differences between the impact of overtime on permanents versus the impact of overtime on casuals?‑‑‑That's correct, it didn't.
PN656
It didn't analyse the level of control casual workers have over the overtime hours versus the level of control permanent staff - over working overtime hours?‑‑‑No, it did not.
PN657
And, again, do you accept that the analysis in this report is aggregated, that is the research doesn't distinguish between permanent and casuals at all?‑‑‑That's correct That's the nature of the research, yes.
PN658
The fourth one is a study by Virtanen and others about depression?‑‑‑Mm-hm.
PN659
This study did not compare the number of overtime hours casuals work versus the number of overtime hours permanents work?‑‑‑Yes, you're correct.
PN660
And I'll just ask you to speak up a bit for the ‑ ‑ ‑?‑‑‑Yes, correct.
PN661
Thank you. And you accept that this study did not consider the differences between the impact of overtime on permanent employees versus the impact of overtime on casuals?‑‑‑No, it didn't.
PN662
And it didn't analyse the level of control casual workers have over overtime versus the level of control permanent staff - over working overtime hours?‑‑‑It did not.
PN663
You accept that the analysis is aggregated, that is the research doesn't distinguish between permanent and casual employees either?‑‑‑That's correct.
PN664
And the final report is by Virtanen and others about alcohol use. And do you accept that this study did not compare the number of overtime hours casuals worked versus the number of overtime hours permanent employees worked?‑‑‑No, it did not.
PN665
It did not consider the differences between the impact of overtime on permanents versus the impact of overtime on casuals?‑‑‑It did not.
*** OLAV TETUS MUURLINK XXN MR IZZO
PN666
It didn't analyse the level of control casual workers have over overtime versus the level of control permanent staff have over working overtime?‑‑‑No, I don't - control was not a variable.
PN667
And do you accept that the analysis in this report is aggregated by - and what I mean by that is that the research doesn't distinguish between permanents and casual employees?‑‑‑No, it did not.
PN668
Thank you. If I could then take you to exhibit 1, which is your first statement, statement of 29 February 2016, and if I could just ask you to turn to that. I believe this is a statement that was filed in previous proceedings of the Fair Work Commission?‑‑‑Yes. That's correct.
PN669
I apologise for the generalisation and I hope it's - you'll let me know if there's an issue with it, but my sense is that the overarching thesis of this report that you attach to exhibit 1 is that working long hours, whether that be long hours in a day or long hours in a week, gives rise to increased health risks for employees; is that - I appreciate it's a generalisation, but as the general thrust of your thesis?‑‑‑Yes, so the only thing I would add to that - I think that's a very good summary, but the only thing I would add to that is that it also has knock-on effects for those around those working, yes. It's the ‑ ‑ ‑
PN670
So not only health effects for the employees but ‑ ‑ ‑?‑‑‑Not only direct but some indirect effects as well.
PN671
Thank you. If I can ask you to go to page 3 of that report, so it's annexure A, I believe?‑‑‑Yes.
PN672
Maybe not, but at page - sorry, for the record it's not annexure A, but it's page 3 of the substantive report in exhibit 1. Do you have that?‑‑‑I do, yes.
PN673
I believe it might be annexure C. On page 3 you refer to a report about - there's a heading that says Important Note on the Hospitality Industry?‑‑‑That's right.
PN674
Then a few lines down you refer to a study by - do you know how to - is it Bohle?‑‑‑Yes, he's based in Sydney, Bohle.
PN675
Bohle, okay. A study by Bohle, Quinlan, Kennedy and Williamson. Do you see that?‑‑‑Yes.
*** OLAV TETUS MUURLINK XXN MR IZZO
PN676
If we exclude this report, so I'm going to ask you a question but just if we put that report to one side for a moment?‑‑‑You mean the Bohle report?
PN677
Correct?‑‑‑Okay.
PN678
Sorry, I said I was going to use the word study. The Bohle study?‑‑‑Yes.
PN679
We'll put that to one side for a moment. Are you aware of any other studies that you refer to in this exhibit which specifically look at the impact of long hours on casuals specifically?‑‑‑Not casuals - the term "casual" is not used but in a lot of international settings the term part time is equivalent because casual is not necessarily a technical term that is, you know, spread across every study area if you like.
PN680
If they use part time does that mean that the study would likely aggregate results for what we would call permanent part-time employees and casual employees?‑‑‑I think that that would be a fair characterisation.
PN681
So as I understand it then the primary material in this report, exhibit 1, that you refer to regarding the circumstance of casual employees is the Bohle statement?‑‑‑Yes.
PN682
I understand there's a comment in this report - I might call it the Muurlink report again just so we're clear I'm talking about your report?‑‑‑That's all right.
PN683
So there's a comment in this exhibit 1 report that it seems your view is that casuals have a lower sense of control over their hours of work than permanents. That's a view you've expressed?‑‑‑Yes. That's correct.
PN684
And that view is expressed about - that view that they have a lower sense of control refers to working hours generally as opposed to specifically their overtime hours?‑‑‑Yes, it does refer to their working hours generally. The similarity that I would find with workers outside the casual sector would be those who are on-call so effectively casualisation in Australia operates very similar to other professions that are on-call.
PN685
When you make these comments about the casual - you make some comments on page 3 here about casuals?‑‑‑Mm-hm.
*** OLAV TETUS MUURLINK XXN MR IZZO
PN686
Do I take it you didn't specifically turn your mind in this report, exhibit 1, as to whether their sense of control over overtime work was different to their sense of control over ordinary hour of work?‑‑‑No, I didn't make that distinction.
PN687
When you make some comments in relation to casuals and the control over the work your view about that is, I think you've already said, is primarily that the primary material or study you refer to is the Bohle study?‑‑‑Can you repeat that question, please?
PN688
Sorry?‑‑‑Yes.
PN689
I'll withdraw the question. If I can just take you to the Bohle study?‑‑‑Yes.
PN690
That study, is that what supports your views that the casual employees have a lower sense of control than permanent workers?‑‑‑No, it isn't. It's more generally the nature of casualisation and I haven't referred to this because I would've thought that it was to some degree obvious is that in Australia casualisation means being able to be called into work for periods shorter than or longer than and being asked to stay longer and shorter hours. So there's an inherent less control over working hours in the casual employment format.
PN691
In relation to the Bohle report are you aware that this report or this study looked at two hotels in Sydney and spoke to a total of 13 casual employees?‑‑‑Yes, and I'd be happy to say this is not the strongest study that I've referred to. It ‑ ‑ ‑
PN692
And do you say that because of the fact that it's a qualitative study in which you only spoke with 13 employees?‑‑‑That's correct. Yes.
PN693
Are you aware that in relation to the 13 employees they were stretched across various divisions of the hotels including food and beverage, room service, sales, catering, engineering and finance?‑‑‑Yes. Yes, I am aware. I'm quite familiar with the study.
PN694
So it could well be the case that they only spoke to a few casuals or even one casual in each particular area?‑‑‑Absolutely, yes.
PN695
So one could not conclude that the outcome of this survey is what one might call representative of casual employment generally?‑‑‑No.
PN696
Or of casual employment in hospitality?‑‑‑No.
*** OLAV TETUS MUURLINK XXN MR IZZO
PN697
Are you aware that the authors of this report cautioned against this very report being relied upon to make generalised findings about casual employment?‑‑‑I don't recollect that detail but I would agree.
PN698
If I can take you back to exhibit 1 and your report, page 3, you say that:
PN699
In fact I'll go further to suggest the findings arising from research in relation to higher value industries such as medical care likely to be amplified in blue collar settings, even more so in the field of casual as opposed to permanent work. A key find in this regard is that casual employees in five start hotels in Sydney describing experience in markedly lower sense of control and permanence.
PN700
Then you cite the Bohle Report?‑‑‑Yes.
PN701
Isn't this seeking to generalise the outcome of the Bohle Report, in relation to casual employees generally?‑‑‑Look, this research area is, you know, there is a fair bit of research done in Australia but Australia's a smaller market as in there's a smaller number of employees. It's relatively rare to find a report within the Australian context, within the hospitality sector, that relates to casual employment. I think my drawing out that particular example more related to its rarity as evidence of direct nature rather than the strength of the evidence.
PN702
But do you accept that these statements do seek to make some generalised comments about casual employment based on the Bohle Report?‑‑‑Only insofar as it's a specific illustration of this specific context but, you know - - -
PN703
And that context being the two hotels in Sydney?‑‑‑Yes, that's right.
PN704
So that's all we could assume it is good for?‑‑‑Yes.
PN705
But even then, professor, it's not necessarily representative of hotels in Sydney is it?‑‑‑Not necessarily, no. I mean an (indistinct) of 13 is not enough to get very excited about.
PN706
Do you accept the findings of the Bohle Report, such as they are, do you accept there was no specific data presented to identify it regarding the extent of overtime worked by casuals as opposed to the extent of overtime work by permanents?‑‑‑I can't recollect the detail in relation to that.
*** OLAV TETUS MUURLINK XXN MR IZZO
PN707
If I move on from the Bohle Report. Are you aware that because the employment of casuals - I'm going to just put a question to you, you may or may not be aware but I'll ask for your understanding. Are you aware that because the employment of casuals commences and concludes at the beginning of each day, casuals are lawfully able to refuse any shift or any overtime shift offered to them. Is that a proposition that you are aware of?
PN708
MR BULL: I object to that. I don't know whether it's something which is within his competence and - - -
PN709
VICE PRESIDENT HATCHER: I'll allow the question.
PN710
THE WITNESS: I am aware that they are lawfully allowed.
PN711
MR IZZO: In respect of overtime, are you aware that permanents cannot always refuse an overtime shift, unless it's reasonable in the circumstances but that the point I want to put to you is that permanents cannot always refuse an overtime shift that is allocated to them. Are you aware of that?‑‑‑Yes, I was aware of that.
PN712
That's a difference in the regulatory treatment of the two classes of employee. That's not a difference you address in this report, is it?‑‑‑No, that's not.
PN713
Did you turn your mind to that difference?‑‑‑No, I didn't and perhaps that was an oversight of mine. No, I didn't.
PN714
I've no further questions.
VICE PRESIDENT HATCHER: Does anyone else wish to cross-examine this witness? No. Any re-examination, Mr Bull.
RE-EXAMINATION BY MR BULL [12.03 PM]
PN716
MR BULL: Just a few questions. Professor, the recent studies that you've summarised in your second statement. My friend took you to them and broadly, none of those studies made an explicit comparison between casual and permanent work?‑‑‑That's correct, none of them made that distinction.
PN717
Also the data which was in some cases extensive aggregated what would be casual, part-time and permanent work?‑‑‑That's right.
*** OLAV TETUS MUURLINK RXN MR BULL
PN718
Now you were asked about whether there would have been different impacts or whether you couldn't - the studies shouldn't say. From your experience, now you're familiar with this broad body of research and scholarly work concerning long durations of work and their impact?‑‑‑That's my area of expertise, yes.
PN719
MR IZZO: Your Honour, I don't object to that particular question but I do wish to put on record I will be objecting to Mr Bull's intention on intending on asking leading questions in that manner, so I just put him on notice that - - -
PN720
VICE PRESIDENT HATCHER: I think that was introductory and I think we're getting to the question now.
PN721
MR BULL: Well I was just sort of - - -
PN722
MR IZZO: I assume the first two were.
PN723
MR BULL: Well let's talk about control. What's the significance of control in relation to - and control relates to - it's the employee isn't it?‑‑‑Yes, that's right.
PN724
So as a variable in these studies, how is control - and you've seen big studies and there's lots of this work now available and been done, it's been aggregated and there's meta studies. How does control tend to play out?
PN725
VICE PRESIDENT HATCHER: How does this arise in re-examination?
PN726
MR BULL: Well he's asked about - that they haven't disaggregated control in these studies. He should be able to as a witness give us some idea of if they had disaggregated control, what the significance would be.
PN727
VICE PRESIDENT HATCHER: Well you can ask that question but that's not what you asked.
PN728
MR BULL: Okay. If they had - - -
PN729
VICE PRESIDENT HATCHER: The witness might be asked if he knows of any research which talks about a difference in control as between casuals and other types of workers.
*** OLAV TETUS MUURLINK RXN MR BULL
PN730
MR BULL: I'll ask the first one. If they had disaggregated control, from your knowledge of the data and the research, how do you think it would have played out between the casuals and the permanents?
PN731
MR IZZO: If I just note objection to the question on this basis. As I understand it the witness is being asked to speculate as to what the studies would have found if a hypothetical situation had arisen. He's not the author - - -
PN732
VICE PRESIDENT HATCHER: Well he might know the underlying data in which case he could answer but you're right, it might be speculation. Let's see what he says.
PN733
MR BULL: It might be, but he's an expert so to a sense the speculation is - you've been asked the question. How would it potentially if they had - if these studies had disaggregated casuals and permanents or people with full-time jobs and others in relation to control, how do you think that would have played out?‑‑‑There's no need for me to speculate on this issue because control is included in a very large amount of studies, examining exactly this kind of question. So control I would say on its own is the single most important variable that we use to adjust the impact of long working hours. So long working hours that take place in conditions of high levels of control do not tend to have those deleterious effects that those long hours would have if you lacked a sense of control. I have to make the point here that it's not - we're not talking about actual control but the employees sense to which they are in control of the nature of work, which includes hours and timing issues in relation to work. So I couldn't - I could not over-emphasise the importance of control or sense of control.
PN734
Once again, taking into consideration that there are - we're dealing with vastly different cultures of industrial legal cultures, is there any way you can give some assistance in how you would place what we call a casual and a permanent employee on the spectrum of control?‑‑‑Only insofar as control has been mapped in relation to professions and professions that are, you know, more - just to put it crudely - blue collar, tend to be associated with lower sense of control, which is why commonly we find that controlling for everything else, blue collar people die younger than white collar people, doing a similar level of exertion at work.
PN735
You were asked some questions about - this is the Bohle study in your first report and that there was no distinction between casuals - the casual ordinary hours and the casual working overtime. Do you recall those questions?‑‑‑The Bohle study, you know, as I've indicated before, a small qualitative. Phillip Bohle has done a lot of different studies. This particular study is one of the very few that relates to casualisation in the hospitality industry, which is why he's done work relating to other industries that are similar in every context but not in this particular industry.
*** OLAV TETUS MUURLINK RXN MR BULL
PN736
You're familiar with his other work?‑‑‑I'm familiar with his other work.
PN737
I was going to ask you once again a general question where you could draw upon your expertise. In terms of what your understanding of ordinary hours is and overtime, can you tell us whether - where those two categories of work sit on this spectrum of control?‑‑‑No, I can't but I think that the only thing I can say is that there's a tipping point that's now starting to become very well established of around the eight hour mark. It's not precise but eight hours and beyond that you're starting to get into risk - areas of risk both, you know, immediate risk in terms of accidents and longer term risk in relation to health. Particularly in relation to lower sense of control.
PN738
You were asked some questions about a casual's capacity to refuse work?‑‑‑Yes.
PN739
Essentially a casual employee's capacity to refuse work, rest the next day and so forth, now have you any reason - are you able to elaborate on that? Is there any reason you might be able to express that may actual - may limit the actuality of that choice for a casual employee?‑‑‑I would just emphasise that the word control is on its own not particularly useful. A sense of control, the employee's sense that they can refuse is probably a lot more important than the reality of whether they can refuse.
PN740
Are you able to give any opinion as to in what you - in terms of what you've just said, a casual's sense of control in comparison with what we might call a permanent worker's sense of control. Feeling able to refuse or not refuse a request for further hours?‑‑‑No, no, I cannot. No, that's not an area that I have any specific expertise, not that area.
PN741
Thank you, professor.
VICE PRESIDENT HATCHER: Thank you very much, professor, you're excused and you're free to go.
<THE WITNESS WITHDREW [12.12 PM]
PN743
MR BULL: That's all the evidence we were intending to call. So I don't know whether you want to deal with - the rest of our case is just tendering material.
PN744
VICE PRESIDENT HATCHER: Well we should deal with that now.
*** OLAV TETUS MUURLINK RXN MR BULL
PN745
MR IZZO: There's some objections to the material.
PN746
MR BULL: So yes, I gather that it was not going to be as quickly as it perhaps is - we have - there are what I call the roster - - -
PN747
VICE PRESIDENT HATCHER: One minute.
PN748
MR BULL: Sorry.
PN749
MR IZZO: Your Honour, I appreciate this is somewhat unorthodox but could I please request that Mr Frost have his evidence heard now and then we deal with the United Voice materials, just because he's sitting in a hotel room in Malaysia waiting to be called.
PN750
VICE PRESIDENT HATCHER: Well that must be hard for him.
PN751
MR IZZO: Does that present difficulties?
PN752
VICE PRESIDENT HATCHER: As long as the admission or non admission of any of this material doesn't affect what Mr Frost might be asked in cross-examination.
PN753
MR IZZO: No, I think they're separate.
PN754
VICE PRESIDENT HATCHER: Right. What I think we'll do is we'll just adjourn for a short period while we set up the call and then when it's ready we'll resume.
PN755
MR IZZO: Thank you, your Honour.
SHORT ADJOURNMENT [12.13 PM]
RESUMED [12.21 PM]
PN756
VICE PRESIDENT HATCHER: All right. So we have Mr Frost on the phone, is that right? Mr Frost?
PN757
MR FROST: Yes, I am here. Yes, hello.
*** OLAV TETUS MUURLINK RXN MR BULL
PN758
VICE PRESIDENT HATCHER: All right. We'll just have to turn the - just get that a bit louder if we can. All right, Mr Frost, the court officer is going to administer the affirmation to you now.
PN759
THE ASSOCIATE: Mr Frost, could you please state your full name and address for the record.
MR FROST: Mark Andrew Frost, (address supplied).
<MARK ANDREW FROST, AFFIRMED [12.22 PM]
EXAMINATION-IN-CHIEF BY MR IZZO [12.22 PM]
PN761
VICE PRESIDENT HATCHER: All right. Mr Izzo.
PN762
MR IZZO: Luis Izzo here. Do you recall filing or signing a witness statement in these proceedings? It's called the statement of Mark Frost. It was four pages long and it was dated 4 July 2019. Do you recall signing that document?‑‑‑Yes, I do.
PN763
And it annexes a single page annexure MF1, with some calculations. Do you recall that?‑‑‑Yes, I do.
PN764
Is that statement true and correct to the best of your knowledge and belief?‑‑‑Yes, it is.
PN765
So we'd seek to tender that, your Honour.
VICE PRESIDENT HATCHER: All right. The statement of Mark Frost dated 4 July 2019 will be marked exhibit 3.
EXHIBIT #3 WITNESS STATEMENT OF MARK FROST DATED 04/07/2019
PN767
VICE PRESIDENT HATCHER: Mr Bull, do you want to cross-examine this witness?
PN768
MR BULL: A few questions.
*** MARK ANDREW FROST XN MR IZZO
VICE PRESIDENT HATCHER: Yes. Mr Frost, so Mr Bull from United Voice is going to ask you some questions?‑‑‑Sure.
CROSS-EXAMINATION BY MR BULL [12.23 PM]
PN770
MR BULL: Mr Frost, you're a senior employee with the NSW Business Chamber?‑‑‑That's correct.
PN771
And you are currently engaged as their chief economist?‑‑‑That's correct.
PN772
And you're essentially involved in their high level advocacy work in terms of applying your skills as an economist. Is that a reasonable characterisation of what you do?‑‑‑That's correct.
PN773
So you provide advice concerning wages and tax policy with the idea that - to effect change that will have benefit for members of the NSW Business Chamber, is that correct?‑‑‑That's correct.
PN774
The NSW Business Chamber is actually - it's a state registered industrial organisation, is that correct?‑‑‑I'm not too familiar with the legal standings in that regard, so I probably can't be sure on that enough to answer that. But yes, as far as I'm aware, I understand that to be the case.
PN775
Okay. But you're aware that it's an organisation which has members?‑‑‑Yes.
PN776
And that the dominant principal purpose of the organisation is to act and progress views that are in the interest of its members. Do you agree with that?‑‑‑It's one of its purposes.
PN777
Well, would you say it's the dominant purpose of the NSW Business Chamber to progress views that are going to be beneficial to its members?‑‑‑Well, if I refer to our mission statement it would be to, you know, improve outcomes for all Australians. That's the broader view, but via maximising opportunities for Australian businesses.
PN778
Well, you're not going to progress views that are going to be destructive of your business members, are you?‑‑‑No, look I think your general characterisation is correct, but I wouldn't sort of sign up to it being the sole, you know, in a - such a narrowly conceived way. So I - yes. No, look, I think your broad conception is correct.
*** MARK ANDREW FROST XXN MR BULL
PN779
So it's the dominant purpose to progress views that are beneficial to the members of the NSW Business Chamber?‑‑‑Yes.
PN780
Now, today we're interested in, I suppose, a debate, if you like, about the casual loading pay to casual employees and whether it should be expressed when that particular employee works overtime. You understand that?‑‑‑In broad terms, yes.
PN781
All right. Now, there's some suggestion from your employer that were our position to be accepted, which is one where we say it would be appropriate to pay the casual loading distinctly from the overtime penalty, that this would result in a uniform 25 per cent increase in the cost of labour for additional hours for employers in hospitality. Do you understand that broad submission, or point?‑‑‑I wasn't involved in the broader statements and - or case put forward, so I couldn't comment on the details of what's been put forward.
PN782
But you're a professional economist, that's correct?‑‑‑Well, I'd like to think so, yes.
PN783
And you've got - you've done obviously - you've said you've done work in terms of wage and tax policy. You'd agree that in terms of the allocation of labour, one of the main ways that you can change the allocation is through changing the costing of that labour. Would you agree with that?‑‑‑Allocation of labour in which respect?
PN784
Well, I suppose the choice that that employer makes as to whether to engage a permanent worker - - -?‑‑‑Yes.
PN785
- - - or a casual worker to do work. An employer will have fixed - - - ?‑‑‑Yes.
PN786
- - - tasks that need to be done. There are then choices about who that employer gets to do the task. You understand that?‑‑‑Certainly, there'll be a relationship between the price of labour and the demand for labour.
PN787
And all things being equal, if we are hospitality venue and we have a bar, and we need someone to be at work in that bar for 14 or 16 hours in a continuous duration, rationally, the cost of two types of worker at the same level will ultimately inform the employer in terms of who they choose to do the 16-hour shift. You'd agree with that?‑‑‑If they're identical employees and all other things being equal, then it - I would imagine it would weigh into the considerations of an employer.
*** MARK ANDREW FROST XXN MR BULL
PN788
So and that's got a term, that's called substitution. Are you familiar with that term?‑‑‑Yes, I am.
PN789
So if you make one type of labour a bit dearer, or if you make it - if you cost it appropriately, that may cause some substitution?‑‑‑Yes.
PN790
So that may cause the employer, rather than use, for example, a casual, they may choose to utilise a permanent employee to do that work?‑‑‑Well, I think we're jumping from a conversation about the price of labour to whether they're casual or full-time or other aspects. I would - I'm not quite so ready to make that jump at this stage, without the connection of as to how it relates to price.
PN791
Well, let's make the jump and say in hospitality there are casual employees and there are people who are permanent, full-time and part-time employees. You can take that as a given, Mr Frost. Now, and it's also the capacity under the award for a casual employee to be classified, ostensibly at an identical skill level, as a permanent worker. You can also take that as a given, Mr Frost. Now, if the labour costs for the casual employee increases that would tend to lead to substitution. Would you agree with that?‑‑‑If every other parameter remains the same then I would expect there to be some substitution to some extent.
PN792
So that might mean that the employer may decide to utilise the permanent worker for the long shift rather than the casual worker, you'd agree with that?‑‑‑Well, at an individual level, it might depend on a whole range of factors. At a macro level, if all other things are kept the same, that is to say that there are no other ancillary costs and benefits where they're not captured wholly by the wage or the - what's paid to the employee, at a macro level, I would be - I would expect some substitution to some extent.
PN793
Now, the other thing is if a particular category of employee is - provides a cost benefit to the employer, if on analysis the employer can get the same work done by a casual employee and it's manifestly cheaper, that will tend to mean that the employer will utilise and perhaps over utilise the casual employee at the expense of the permanent employee. Do you agree with that proposition?‑‑‑Well, I think over utilise is a subjective proposition. I'd - yes, I'm not sure I would necessarily frame it in that regard, I think there's a whole range of considerations that an individual employer would be giving consideration to and some of those might relate to what they're paid but some might relate to other factors as well, so I don't - yes.
PN794
We're assuming - sorry?‑‑‑It would depend on their - - -
*** MARK ANDREW FROST XXN MR BULL
PN795
Sorry, Mr Frost?‑‑‑I didn't - can you repeat that?
PN796
Sorry, I didn't mean to interrupt you. We're assuming that they're the same classification, they're the same - a bar person but for the fact one's permanent and one's casual. We're also dealing with overtime, which is to a certain extent unanticipated. So it's because the bar is busy, it's because the busload of pensioners have come in from Blayney and the want to eat and continue to drink. So in those situations do you think that a cost deficit, where a casual employee is cheaper, that would tend to mean that the employer would use the casual employee more than the permanent?‑‑‑Well, not necessarily at an individual - for an individual employer, it could depend on a whole range of factors. I think what I've - in answering the questions thus far, I've distinguished between the decisions an individual employer might take and what we might expect over a period of time at an aggregate or macro level view.
PN797
Thank you. Do you think - now, this is just looking at a broad - economists are interested in public benefit, aren't they?‑‑‑Generally I think that that's the case, yes.
PN798
Now, can you make a - and you're a - the chief economist of a major employer advocacy group, would you agree that there's broad public benefit in likely having a greater percentage of a particular workforce as permanent rather than casual employees?
PN799
MR IZZO: I object, your Honour. Mr Frost has given evidence in relation to a specific series of matters. He's not being questioned about them, but to the extent that the matters are relevant, that might be one thing, but if he's now being asked to speculate as to matters generally - over which he hasn't given evidence, hasn't necessarily turned his mind to - it's just pure speculation and I don't understand how it's going to assist the Commission.
PN800
VICE PRESIDENT HATCHER: Well, he might or might not have an expert opinion about these things, but I'll allow the question. If he doesn't - hasn't turned his mind to it, presumably he will say so. Mr Bull?
*** MARK ANDREW FROST XXN MR BULL
PN801
MR BULL: I'll just repeat the question. What I was asking you, this is as an economist, would you agree that there's - is it a consensus or reasonable statement that there's broad public benefit in ensuring a greater proportion of the workforce are engaged as permanents rather than as casual employees?‑‑‑Well, I think there's not necessarily an objection answer to that question. I think ultimately people will demand the type of employment that they seek, and it's not for me or not for an economist to make a judgment about that type of question, I wouldn't have thought.
PN802
So you don't think it's better for someone to have a permanent job with leave entitlements and sick leave?
PN803
VICE PRESIDENT HATCHER: Better for whom?
PN804
MR BULL: The individual, the employee?‑‑‑For a specific individual that might be the case, but I don't know that that generalises in all situations and all circumstances.
PN805
The hospitality sector has around - it has consistently had around 65 per cent of the workforce have been casual. Now, if casuals are cheaper generally for doing a significant part of that work - - -
PN806
VICE PRESIDENT HATCHER: So Mr Bull, why would they be cheaper?
PN807
MR BULL: Well, we say that - particularly under the Restaurants or the Clubs Award - - -
PN808
VICE PRESIDENT HATCHER: Yes.
PN809
MR BULL: - - - that the expression of cost doesn't represent the intended application of the loading. They're not 25 per cent dearer, frequently on weekends, as opposed to permanents.
PN810
VICE PRESIDENT HATCHER: I know you say they're not dearer, but the premise is that they're cheaper.
PN811
MR BULL: Well, they are, effectively, because if they're - in relation to some of these awards - cost equivalent on weekends, they're cheaper. Because you're getting a permanent at the same rate and you don't have to pay any legal entitlements and such.
PN812
VICE PRESIDENT HATCHER: But, Mr Bull, is that in case of ordinary hours?
*** MARK ANDREW FROST XXN MR BULL
PN813
MR BULL: Well, that's the point about these awards, in that a permanent can work ordinary hours on a Saturday or a Sunday, it can be a permanent's ordinary hours.
PN814
VICE PRESIDENT HATCHER: But isn't your application in respect of overtime?
PN815
MR BULL: Correct, and that's the point, in that there's a lack of cost equivalence, and we're saying that our application if agreed will assist in that it will even up some of the cost imbalances that are structurally contained within the structure of the award, and the manner in which the sectors operate.
PN816
VICE PRESIDENT HATCHER: Well, I know you perceive, Mr Bull, but speaking for myself I'm far from clear as to the premise of that question.
PN817
MR BULL: What I was going to suggest is your reply indicated that you're going to the economist's chestnut of choice,: that's it's all a rational choice. If the employer's not offering you a permanent job, you don't really have a choice as to whether you're going to be a permanent or a casual. You'd agree with that?‑‑‑Not necessarily, because you might have an alternative employer that might offer you a job that suits your needs or your preferences or wants with regards to the nature of your employment.
PN818
Well, I put it to you that's just simply not the case. If there's no permanent work and you're a casual - you're a bar person, for example, seeking work, and the only job is hospitality - you don't have a choice. What do you say to that?
PN819
MR IZZO: I object. Mr Frost has just answered that question.
PN820
MR BULL: Well, I'm just putting it to him more distinctly.
PN821
VICE PRESIDENT HATCHER: Yes, can you answer the question if you can, Mr Frost?‑‑‑Well, I think we're entering into thought experiment territory here, because I don't think that's quite the nature of the labour market as it exists.
PN822
MR BULL: Okay. Would you agree that - and this is a position which has been put by your employer, that making as a matter of principle, the casual loading not be paid on overtime hours, would tend to make casual labour significantly less expensive as against permanent labour?‑‑‑Look, I haven't - sorry. Can you repeat the question?
*** MARK ANDREW FROST XXN MR BULL
PN823
Well, if and this award isn't one where this is the case, but there are others where it's uncertain and so forth, that if it was clarified that the casual loading just wasn't as a matter of principle paid on overtime hours, that would make casual labour a more rational choice for an employer wanting an employee to do long hours of work. You'd agree with that?‑‑‑Well, okay, if we get back to the principle of what we're talking about and we started off with a series of discussions on substitution effects. Whenever you make one or something more expensive compared to or relative to another thing, unless we're in a very unique circumstance, there will be substitution. To what extent, that will depend on other factors but typically, ordinarily, you would expect substitution. Now, that's the very general principle that we can use as the heuristic to examine these questions, but I think there are a whole range of other things that perhaps I'm not necessarily fully aware of that might be changing. There might be other aspects to do with the preferences of employers. So I don't know that I could give a sort of a simple straight answer to your question.
PN824
Do you agree that long durations of work, this is beyond let's say, 10 hours a day and 40 hours a week, have some harmful effect on employees?‑‑‑I don't know that I'm qualified to answer a question about that.
PN825
So you're saying you're unable to answer that question?‑‑‑I don't think that's a question that an economist can necessarily - I mean, certainly from an individual's perspective it might be beneficial if it translates to, you know, some impact on their - might be some financial gain from that, but in terms of other effects, I don't think that that's one that I'm comfortable answering, sorry.
PN826
Are you talking about - sorry, the financial gain of the employee or the employer?
PN827
MR IZZO: I object - I object, your Honour. The witness has been asked to express a view about a question which would ordinarily be opinion evidence. He's given the answer that he's not qualified to respond, which means it's not expert evidence, it would just be his opinion. It is not clear how that should be admissible if it's just one person's opinion. If it's not an expert evidence, and my understanding of the witness' response is that he's qualified to answer the question as an economist.
PN828
VICE PRESIDENT HATCHER: I think he's just being asked to clarify a statement he made which is a statement of the obvious, which is if you work longer hours you'll earn more.
PN829
MR BULL: That's what I was - - -
*** MARK ANDREW FROST XXN MR BULL
PN830
VICE PRESIDENT HATCHER: That's what he said.
PN831
MR BULL: So yes. You might have heard the Vice President - - -
PN832
VICE PRESIDENT HATCHER: You've said that, Mr Bull.
PN833
MR BULL: Okay. All right. Nothing further.
PN834
VICE PRESIDENT HATCHER: All right. Any re-examination, Mr Izzo?
PN835
MR MOORE: Can I ask him a question?
PN836
VICE PRESIDENT HATCHER: Well, are you going to cross-examine?
PN837
MR MOORE: Yes.
PN838
VICE PRESIDENT HATCHER: What, you're contesting this witness' evidence, are you?
PN839
MR MOORE: No, I just - I understand he's brought us an expert.
PN840
VICE PRESIDENT HATCHER: Well - - -
PN841
MR MOORE: It's not a matter of contesting the evidence, it's a matter of understanding it.
PN842
VICE PRESIDENT HATCHER: Well, then you should have made that application before Mr Bull cross-examined, because then Mr Bull will - - -
PN843
MR MOORE: All it was - I didn't understand we were in an inter partes matter, I'm sorry, your Honour.
VICE PRESIDENT HATCHER: All right. Go ahead, Mr Moore.
CROSS-EXAMINATION BY MR MOORE [12.44 PM]
*** MARK ANDREW FROST XXN MR MOORE
PN845
MR MOORE: I was just going to ask a clarifying question, I don't think it's contentious. Do you have a copy of your report in front of you, Mr Frost?‑‑‑Just to clarify, when you say report what are we - - -
PN846
There's a statement and then on the back of it there's an MFI1?‑‑‑MF1?
PN847
Yes, MF1?‑‑‑Yes, I have that.
PN848
And in terms of it, the assembly of that is done by a program that you access through the ABS?‑‑‑Yes, so ABS make available a service called TableBuilder, and this table builder service enables a person to compile a customised report based on specific areas of interest that they have. And so MF1 is – because the outputs generated from the table builder service aren't necessarily - -
PN849
Are you still there, Mr Frost?‑‑‑Hello?
PN850
Yes, are you still there?‑‑‑Yes. My headset dropped - - -
PN851
Right. Sorry, yes, just - - -?‑‑‑Sorry about that. My headset just dropped out but I think we're back on now.
PN852
Yes. Yes?‑‑‑So what I was saying was that the outputs generated from the table builder service are not the over – a little bit clunky so they've been put together and summarised in this document you see in F1.
PN853
The other question I was going to ask you, just in terms of the estimate of typical hours usually worked in the main job, that the heading just above paragraph 13 on page 3, do you have that?‑‑‑Sorry, paragraph?
PN854
Paragraph 30, page 3?‑‑‑Thirteen, yes.
PN855
Yes, you talk about identifying the medium person, do you see that in paragraph 13?‑‑‑Yes, I do.
PN856
In terms of just my understanding of it, is that the person that would be – there's 50 per cent above him, 50 per cent below him or her?‑‑‑Correct, ranked by hours usually worked.
*** MARK ANDREW FROST XXN MR MOORE
PN857
Yes, and in terms of the ranking of the hours relevant to the data that you've got in MF1, you've provided an estimate in 17 of 15 hours per week for employees without paid leave entitlements, is that correct?‑‑‑Yes.
PN858
And that would mean that there's 50 per cent below that and 50 per cent above?‑‑‑Well, that's – that is, yes, the estimate is 15 hours per week and that's the number of hours which would have 15 – 50 per cent would work 15 hours per week or less.
PN859
And the balance would work 15 or more?‑‑‑Correct.
PN860
Yes. And in terms of just over the page in (b), 38 hours per week for employees with paid leave entitlements, the same allocation would be described there, 50 per cent person works the full 38 hours, and 50 per cent work hours above that, is that correct?‑‑‑Correct.
PN861
Now the only other question I just want to ask you in terms of MF1, you've identified elsewhere in your report also by notation that where there's an asterisk the data is unreliable?‑‑‑Well, just that caution should be taken with numbers with a relative standard error of more than 25 per cent.
PN862
Yes. Now are you able just to tell us whether or not the fact, and it's in the final table on MF1, group 2, there's three asterisks. Is that because of the size of the sample?‑‑‑Yes. Look, that – that's the case, yes. So with a smaller sample generally the surveys become less reliable.
PN863
Yes, thank you, Mr Frost. I have no further questions, thank you.
PN864
VICE PRESIDENT HATCHER: Mr Bull, do you want to ask any questions arising out of that series of questions?
PN865
MR BULL: Nothing arising.
VICE PRESIDENT HATCHER: All right, any re-examination? Right, thank you for your evidence, Mr Frost. You are excused, which means you can simply hang up the phone.
<THE WITNESS WITHDREW [12.49 PM]
*** MARK ANDREW FROST XXN MR MOORE
PN867
All right, so Mr Bull, tendering documents?
PN868
MR BULL: I'll start with the – I assume I don't need to tender submissions. I did send - - -
PN869
VICE PRESIDENT HATCHER: Only if you haven't got documents in the nature of evidence stapled to the back of them.
PN870
MR BULL: Yes. Well, I haven't.
PN871
VICE PRESIDENT HATCHER: All right.
PN872
MR BULL: I don't do that.
PN873
VICE PRESIDENT HATCHER: All right.
PN874
MR BULL: But we could have a philosophical argument about whether – I sent you three roster patterns for the hospitality industry; the Registered and Licensed Clubs Award and the Restaurant Industry Award, and - - -
PN875
VICE PRESIDENT HATCHER: Are they evidence? I mean, it seems to me that they're simply in the nature of an aide memoir which says that if certain numbers are put in, certain numbers will come out?
PN876
MR BULL: Correct. I wouldn't call them evidence.
PN877
VICE PRESIDENT HATCHER: All right. Does anyone take a different view?
PN878
MR IZZO: Your Honour, we take objection to their tendering while - - -
PN879
VICE PRESIDENT HATCHER: They are not being tendered.
PN880
MR IZZO: Well, we take objection to them being referred to for this reason. The filing of those materials came very, very late in the piece. Not only that, the arguments that those materials tend to support, and it's not entirely apparent to me but the materials tend to be used as support for a contention that it is currently cheaper to engage a casual than it is to engage a permanent. That's an argument that was not raised during the submissions that were filed in these proceedings in accordance with the timetable. It's an argument that appears to have developed at some point late last week. We've had no opportunity to respond to it.
PN881
I haven't had the opportunity and I'm not sure if the other employer parties have had the opportunity to digest the calculations and understand whether they are reflective of the industries or not. So we are not in a position to respond. Certainly I'm not in any position to respond today. But we are effectively prejudiced if they are relied upon because of the late time at which they have been filed.
PN882
VICE PRESIDENT HATCHER: They have been put in as a form of aide memoire in support of a submission. That prejudice is simply cured if we allow you some opportunity timewise to put in a written response?
PN883
MR IZZO: That is a way of curing our primary prejudice I'm concerned about.
PN884
VICE PRESIDENT HATCHER: How long would you need?
PN885
MR MOORE: I probably would need – I think it would be beneficial, your Honour, if there is an opportunity for us to also confer with the other employers, so trying to put that in place - - -
PN886
VICE PRESIDENT HATCHER: Yes.
PN887
MR IZZO: If we had 21 days that would be helpful.
PN888
VICE PRESIDENT HATCHER: Twenty-one days? Will it really take that long?
PN889
MR IZZO: I'm just conscious that there's a number of employer parties, hence the request for 21 days. Because I think what we will likely have to do is, one, check the calculations; two, form a view as to whether they are reflective; and I have to say it is possible we may – I don't know with this case, there might be evidence filed in response. Because this has never been put to us in the running of these proceedings. So I'd hope that's not the case. Hopefully we can respond to the submissions and then maybe that won't be the case. Because this whole argument has risen in the course of the last three or four days.
PN890
VICE PRESIDENT HATCHER: All right, 21 days. Yes.
PN891
MR IZZO: That's - - -
PN892
VICE PRESIDENT HATCHER: Mr Bull, is there anything you wish to tender?
PN893
MR BULL: Well - - -
PN894
VICE PRESIDENT HATCHER: Sorry, Mr Ryan wants to say something.
PN895
MR RYAN: I was just going to say, your Honour, the AHA(?) supports the submissions made on behalf of ABI and the New South Wales Business Chamber.
PN896
VICE PRESIDENT HATCHER: All right. Well, you can assume that if we give the 21 days every party will be afforded the same opportunity. Mr Moore?
PN897
MR MOORE: I was just going to say, your Honour, when we first received the material and we've raised objection about it and raised the basis on which it should properly be brought into the proceedings. If it is not evidence then it should not be referred to, at all in the submissions. Because in a sense, by leading it in submissions even if it's – and in the context of, as Your Honour has described, an aide memoire, it would still be without objection by any of the parties, even if it's been led from the Bar table. And quite frankly we have an entitlement to test it out and we would also have an entitlement to ascertain what instructions were given, who prepared it, how the parameters were chosen, and also to counter any other position that may be put as an alternate method of rostering because there are other submissions made in the submission outline that has been filed which relies on the modelling to make submissions about certain matters about choices, for example, that employers would make and the like. And on that basis we say we should have a proper opportunity to go away and have consideration as to whether there is further evidence we would wish to bring to meet what is essentially a merits case.
PN898
VICE PRESIDENT HATCHER: All right, that's noted. Anything else, Mr Bull?
PN899
MR BULL: The only other evidence I would say is the statement of Damien Oliver. Now that was tendered in the part-time casual common issue proceedings. It was filed because it deals with the Hilda data which we say is probably the most reliable empirical research which is done in this area. The problem you have, and we've also presented some ABS material, the data sets that the Australian Bureau of Statistics does not match the award coverage. They have a Accommodation and Food Services. You can't cut it any finer than what we have. And that means you get fast food, which is probably the Fast Food Award.
PN900
So the ABS material is broadly – it gives you the flavour with the caveat that it's got the fast food industry in there. It also doesn't disaggregate agreement cover, it doesn't particularly look at award reliance. All the ABS material does is give you a broad indication of the industry. It is potentially of some use in hospitality because the areas we're dealing with are highly award reliant but it's the problem. So the Oliver material is useful just – it's background and context, and look, I'm happy to take any abuse about it being filed late. It was filed late but there's one caveat, that the objectors all were involved in the proceedings where it was tendered. So it's not material which is of critical relevance but it gives background and it's got up to date HILDA data. One of the issues is the next lot of HILDA data is actually coming out tomorrow so this is the most recent. And HILDA, as you know, it's a longitudinal study so it's got some pretence of actually being accurate and critical information. I tender it on the basis that it's background.
PN901
VICE PRESIDENT HATCHER: All right. Does any party wish to be heard against that?
PN902
MR IZZO: We do, your Honour, on two grounds. First, it was filed outside the timetable, about a week ago. And we haven't had the opportunity to in any way digest the material and understand whether there's matters that we want to test in the statement. If there were then that might give rise to a request to cross-examine. Secondly, we don't have an assessment as to whether there are submissions that we want to make in response, simply because we haven't been able to get across it. That's the first basis.
PN903
But the second basis is somewhat linked to this, and that is that Mr Bull has not, in the United Voice submissions, provided any indication about the findings that are sought from this material. So he's filed a document which is 26 pages long, has a range of statistical information in it, and we are none the wiser as to which bits, if I can refer to them in that way, are actually relied upon and which bits are actually not relied upon or not relevant to his case. And in the absence of knowing what findings are sought we're very much in the dark. The submissions that have been filed don't in any way address the Oliver statement and so it means that we have to essentially assume that any particular part is relied upon but we don't know why, and that seems to be a particularly prejudicial position to be in, in addition to the fact that it's been filed so late.
PN904
So we're unable to competently deal with this evidence today. If I anticipate Your Honour's query that might come about, well, doesn't time cure our objection - - -
PN905
VICE PRESIDENT HATCHER: Mr Bull - - -
PN906
MR IZZO: That's our objection.
PN907
VICE PRESIDENT HATCHER: With respect to Mr Oliver, there's a summary of the evidence he gave in the part-time casual case at paragraphs 491 to 493.
PN908
MR BULL: That's correct.
PN909
VICE PRESIDENT HATCHER: But do you rely upon it beyond what's already on the record in that decision?
PN910
MR BULL: Not a great deal. I'll just indicate at this point - - -
PN911
VICE PRESIDENT HATCHER: Well, do you or not?
PN912
MR BULL: We do not rely greatly on what is beyond what is already on the record.
PN913
VICE PRESIDENT HATCHER: I don't know what the "greatly" is.
PN914
MR BULL: I've just got to make a point. This wasn't some sort of cunning trick, you know. It wasn't a peapod hidden in a mattress or something mysterious like that. It simply was in an attempt to provide material which is of assistance. As I've indicated it is the Empirical research which is the most accurate. We don't need to rely on what has already been considered relevant in the earlier proceedings.
PN915
VICE PRESIDENT HATCHER: All right, given the late filing we reject the tender but we'd consider it open obviously for United Voice to make submissions on the basis of what's already in the public record about Mr Oliver and his report in the part-time casual decision.
PN916
MR BULL: Thank you. If the Commission pleases. Now that second matter, which once again this is a little bit on the border as to whether it's a submission. It's the industry profile which this organisation generated in January 2017 for accommodation and food services. So I'd like to rely on - - -
PN917
VICE PRESIDENT HATCHER: Which? Your organisation?
PN918
MR BULL: No, we didn't do it, you did. So it was done mainly in aide of the – we don't have the resources to do a document like that. It was done in aide of the penalty rates review and it provides just – once again, it's background general data concerning the structure of accommodation and food services, with the caveat that the fast food's in there.
PN919
VICE PRESIDENT HATCHER: All right. That's a document that already appears on the Commission's website.
PN920
MR BULL: Correct.
PN921
VICE PRESIDENT HATCHER: All right, well, do you really Need to tender it in those circumstances?
PN922
MR BULL: Probably not. But I'm just, you know, where I refer to it I don't want someone objecting to a footnote in the submission.
PN923
MR IZZO: Your Honour, if I could just – because I think that's a very helpful comment that Mr Bull's just made. He says, "If I refer to it I don't want someone taking issue." This is the difficulty I have, that very large materials are being filed and we have no understanding of what is being relied upon. If Mr Bull wants to make a discrete submission and rely on a piece of that report then at the time that that submission is made we can assess whether there's any issue taken. But just tendering large volumes of material that aren't in any way referred to in the submissions puts us in a very disadvantageous position so - - -
PN924
VICE PRESIDENT HATCHER: Mr Izzo, I think you can safely assume that unless we're directed to a specific part of a document like that we will not sit away in our chambers and read it to find something relevant.
PN925
MR IZZO: Well, that's it, we - - -
PN926
VICE PRESIDENT HATCHER: So Mr Bull can identify something specific, otherwise I wouldn't bother myself about it.
PN927
MR IZZO: May it please.
PN928
MR BULL: Okay. This - - -
PN929
VICE PRESIDENT HATCHER: So I think we'll just leave that on the basis that it's already on the public record of the Commission.
PN930
MR BULL: I've got two more, so do – I notice the time.
PN931
VICE PRESIDENT HATCHER: Yes, keep going.
PN932
MR BULL: Okay. This one might be a bit more contentious. This is chapters 9 to 14 of the Productivity Commission's Report into Industrial Framework.
PN933
VICE PRESIDENT HATCHER: Right.
PN934
MR BULL: And it is, in effect, what was an exhibit in the penalty rates review. Once again I don't think this is necessarily evidence. It's like referring to an academic article or the bible. It's something on the – well, it's on the public record so it's there. But we're making appeal book it of it so I thought, you know, why not make it clear and it can go on a list. So I tender that. It's chapters 9 to 14 of the Productivity Commission's report.
PN935
VICE PRESIDENT HATCHER: But are you going to tell us what you actually rely upon?
PN936
MR BULL: Yes, it's in my written document.
PN937
VICE PRESIDENT HATCHER: Why do we need to go beyond that? That is, you've put the reference in your submissions. We can – it's a public document which we can look at.
PN938
MR BULL: Well, they, ABL, objected to the - - -
PN939
VICE PRESIDENT HATCHER: But why do we need to receive, what is it, six chapters of it?
PN940
MR BULL: Well, I don't think we do. I was just trying to be fair and, you know, satisfy everyone's need for what constitutes evidence. I don't - - -
PN941
VICE PRESIDENT HATCHER: Can we leave it on the basis, Mr Bull, that if you've referred to a specific part of it in your submissions we can access that if necessary, since it's a public document?
PN942
MR BULL: Okay. In that case I've provided an aide memoir to the Commission and others if they want to see what it is that I'm referring to, rather than having to beat their way to the Productivity Commission website. So I won't tender that. The other matter is a document which - - -
PN943
MR IZZO: Can I just raise one query, I think, in the Productivity Commission report. So I understand it is being relied upon not as evidence in the proceedings. That's - - -
PN944
VICE PRESIDENT HATCHER: There's a question about its status but I think, for example, the parts relied upon by Mr Bull, you can read in the penalty rates case as being set out in a slab quote somewhere, so – I'd be surprised if there's a decision of the Commission where you can't find the relevant passage.
PN945
MR IZZO: Yes. If I could for the sake of completeness refer this Bench to a decision in the penalty rates case, an interlocutory decision which is Four Yearly Review of Modern Awards Penalty Rates [2016]FWCFB965. In relation to that decision the Full Bench decided that the Productivity Commission report would not have the status of evidence to the extent that it expressed opinions as to what the regulatory regime should be, to the extent that it expressed any opinions, in effect. The only parts they relied upon as evidence was where statistical information had been gathered together. The reason I say that is because I anticipate Mr Bull is only relying on expressions of opinion and so I just want to make it clear that our position is that that does not have the status of evidence. That was the approach taken in the penalty rates case and accordingly should be the approach taken by this Bench, is our submission.
PN946
VICE PRESIDENT HATCHER: All right, thank you.
PN947
MR BULL: I'll get to the next one.
PN948
VICE PRESIDENT HATCHER: Is that the last one, is it?
PN949
MR BULL: I hope so. This is extracts from the Australian Bureau of Statistics which I filed last Tuesday, I believe. It's essentially very similar to the Mark Frost material. It's just a bit more complete. So it's got up to date figures on casuals with leave entitlements as opposed to employee – it's got some data, once again I'd just say more complete data, but hours worked and so forth; hours in main job. And the way it works with the ABS is that it's all there but you can ask them to basically give you bits. So what I did is, I asked them to just cut these numbers. I did actually send an email from the public servant who did it. So I just tender that material, or once again it can be – it probably should be a tender because it's been worked on a bit.
PN950
VICE PRESIDENT HATCHER: Do you have the email on the response, so it's clear what you asked them to do and what they did?
PN951
MR BULL: I've got the response. I did most of it by phone which is my habit with these things. And the email response was just explaining the data. So it comes from – and I've sent it to your chambers, sorry. This is an area where there's census data and there's also – they do a survey which is the workforce survey, which is a survey, it's obviously not as complete as the census material. And once again, it's not going to blow anyone out of the water but it's useful, general information. We say that it's at least consistent with some of the matters we're going to put to you.
PN952
VICE PRESIDENT HATCHER: Is there any objection?
PN953
MR IZZO: Your Honour, we're in the similar situation that we're simply not across the material, not across its relevance, whether there's matters we wish to contest in it, so we object on that basis. If the Bench was minded to let it in we would seek a period of 21 days to confer, understand the material and file any material we would need in response. Because we're simply not across the material.
VICE PRESIDENT HATCHER: All right, what I'll do is, we'll admit the document as exhibit 4. Perhaps we can first reserve to see what Mr Bull makes of it before we start putting the parties to the burden of responses. So we'll leave that to the end of today, I think.
EXHIBIT #4 EXTRACTS FROM AUSTRALIAN BUREAU OF STATISTICS
PN955
Is that your evidentiary case, Mr Bull?
PN956
MR BULL: There's one, and once again this is in the category of literary works. There was an article which I became aware of actually on Sunday morning which is just part of papers from the Reserve Bank. Apparently their most recent seminar was about issues with wage growth and there was a paper which I thought was of interest to the Commission about non standard employment and wages in Australia. It perhaps doesn't need to be tendered but I will refer to it in passing after - - -
PN957
VICE PRESIDENT HATCHER: If you're not going to tender it we don't need to deal with it.
PN958
MR BULL: At two. Thank you.
PN959
VICE PRESIDENT HATCHER: That's your case?
PN960
MR BULL: Just to check – yes.
PN961
VICE PRESIDENT HATCHER: All right, did you have anything further on your side, Mr Izzo?
PN962
MR IZZO: Yes, just bear with me one moment. We've tendered our evidence. There is an annexure to our submissions, so we filed submissions obviously in these proceedings. And just bear with me one moment. I'm not sure if the annexure needs to be separately identified. I tend to recall the annexure is ABS material.
PN963
VICE PRESIDENT HATCHER: But which submission is this attached to?
PN964
MR IZZO: This is a submission dated 5 July 2019. The submission refers to Annexure A. However, I think just due to an administrative oversight the annexure wasn't filed on this date despite being referred to and it was filed some days later. It is on the Commission's website but given that it is a – could you just bear with me one moment, your Honour, and I'm going to just access it and pull it up.
PN965
MR BULL: Just to help my friend, I assumed it was with the statement and I wasn't objecting to it because it's – it's the same species of the material I've just tendered.
PN966
MR IZZO: That's right. It's effectively some ABS statistical information pertaining to duration of casual employment but it's not annexed to the Mark Frost statement, it was separately filed.
PN967
VICE PRESIDENT HATCHER: I have it as an annexure at MF1. This is MF1?
PN968
MR IZZO: No, it's not MF1, your Honour. And I'm just trying to get access to the document and I'll be able to tell you the date on which it was – 22 July. So it's referred to and the inferences we seek to draw from it were referred to in our submissions, but simply due to an administrative oversight it didn't get filed on the date the submissions were filed and it was filed on 22 July.
PN969
VICE PRESIDENT HATCHER: Do you have copies of it?
PN970
MR IZZO: We can certainly provide them. I only have it online but we can arrange to provide them this afternoon.
PN971
VICE PRESIDENT HATCHER: Do you have any objections, Mr Bull?
PN972
MR BULL: No.
VICE PRESIDENT HATCHER: All right, so we'll call that ABI ABS data. That will be exhibit 5.
EXHIBIT #5 ABI ABS DATA
PN974
All right, does any other party have any evidence in relation to the Hospitality Awards? No, all right. All right, we'll now adjourn. I think we'll resume at 2.15 to receive submissions in relation to the Hospitality Awards.
LUNCHEON ADJOURNMENT [1.12 PM]
RESUMED [2.16 PM]
PN975
VICE PRESIDENT HATCHER: Mr Bull?
PN976
MR BULL: I'm happy just to address on my case.
PN977
VICE PRESIDENT HATCHER: Yes.
PN978
MR BULL: If others don't want to make some objection to something or - I'll go. I might as a sort of to get us in the mood so to speak go through the rosters which I filed last week.
PN979
VICE PRESIDENT HATCHER: Yes.
PN980
MR BULL: I don't know whether you have got them before you.
PN981
DEPUTY PRESIDENT KOVACIC: Nothing gets us in the mood better than looking at rosters.
PN982
MR BULL: I don't mind a roster.
PN983
VICE PRESIDENT HATCHER: So when were they filed?
PN984
MR BULL: They were filed on Tuesday, so ‑ ‑ ‑
PN985
VICE PRESIDENT HATCHER: But what date was that?
PN986
MR BULL: Beg your pardon?
PN987
VICE PRESIDENT HATCHER: What date?
PN988
MR BULL: The 24th I think.
PN989
VICE PRESIDENT HATCHER: 24, I see, 24th, yes.
PN990
MR BULL: I'll put my friends out of their misery. They weren't selected through any particular science or because they are the absolute logically most ideal for our case. They were selected - well, they were obviously selected to be work patterns that we think a casual employee under three awards may work. So they weren't selected - they're not typical rosters that a permanent employee would work because our case is about the casual pattern of work as opposed to a full-time pattern of work. So they are not full-time rosters, so if you go and do research about what full-timers work you're not going to find these.
PN991
The other thing I'll say is they're two-weekly rosters in that I tried to do a four-weekly roster for a casual and one of the problems with a four-weekly roster, you can average - in all these three awards you can average the entitlement to overtime, or you can average hours rather over a four-week period, and the problem is if you have a casual employee getting a reasonable amount of overtime in a four-week period it then becomes very difficult to condense enough ordinary hours for a full-time employee into a four-week roster if that makes sense because of the lack of sequencing. You can't sequence a full-timer in four days without them having to have a break and so forth. But I'll get to that in a minute.
PN992
So the first one is simply it's employees working during the week and that's when you would assume there would be relative cost equivalence. And so by cost equivalence I'm taking as a given that the 25 per cent perfectly compensates a casual employee for the absence of entitlements of a permanent employee, and from these calculations, which I checked, I was surprised by the result. The premium that a casual gets isn't 25 per cent, it's only eight per cent more than what the permanent is. And the reason for that - and I'll come back to the submission, is that under all these awards, and there's not a great deal of difference, if you work more than 10 hours a day, it's very difficult to sequence a permanent employee more than about four days in a row because the fourth day for a permanent employee becomes overtime because permanent employees under these awards have essentially rules with breaks. So that's why there's got cost equivalence because the last day for the permanent employee is an overtime day.
PN993
So, similarly roster 2, has got some weekend work ‑ ‑ ‑
PN994
VICE PRESIDENT HATCHER: Yes, but you're comparing ordinary and overtime hours?
PN995
MR BULL: You're always going to have ordinary and overtime hours, because you only get to overtime by working ordinary hours.
PN996
VICE PRESIDENT HATCHER: I know that, but you haven't actually compared the comparative cost of the overtime hours alone. I think they're exactly the same, aren't they?
PN997
MR BULL: The overtime hours are - they're the same hours.
PN998
VICE PRESIDENT HATCHER: They're the same cost, aren't they?
PN999
MR BULL: Yes, but the permanent gets more overtime for the same pattern. So I'll just explain, the roster pattern 1, then there's actually the - if you go to page 2, I'm at the Hospitality Industry General Award, then there's the actual rosters which give you more detail. So that ‑ ‑ ‑
PN1000
VICE PRESIDENT HATCHER: So I'm looking at the Clubs one.
PN1001
MR BULL: Okay, we'll go to the Clubs one.
PN1002
VICE PRESIDENT HATCHER: So, roster ‑ ‑ ‑
PN1003
MR BULL: The Clubs in some ways is the best illustration, because there's ‑ ‑ ‑
PN1004
VICE PRESIDENT HATCHER: So this is the Club's one, roster 1 and roster - on roster 1 ‑ ‑ ‑
PN1005
MR BULL: Roster 1 you start on Wednesday, you work Thursday, Friday, Saturday, Sunday, so that's for a week.
PN1006
VICE PRESIDENT HATCHER: But the overtime costs are the same, aren't they?
PN1007
MR BULL: Beg your pardon?
PN1008
VICE PRESIDENT HATCHER: The overtime costs are the same, aren't they?
PN1009
MR BULL: Well, if you go to - this is why I wanted to explain them, I didn't do them. I checked them. I understand them, but they are logical, but it's not immediately apparent. So if you go to page 3 which is the bigger - it's the roster for the permanent worker. So there's a bit of evening work. So there's six hours on the Wednesday, there's eight hours - 11 hours rather on the Thursday, there's 11 hours again on the Friday, then there's Saturday, which you get the Saturday penalty. And there's Sunday on the Sunday penalty. And effectively there's no overtime because it's a - so, for the first Saturday the overtime is absorbed in the Saturday penalty. This is where it gets confusing, and then the next week you start up again, it's a slow start on Wednesday, six hours, there's a bit of evening penalty which is just an add-on, so the penalty for both casuals and employees is just added on to whatever is their rate. It's cumulative. Then on Thursday there's eight hours ordinary for the permanent, three hours evening penalty. They're all ordinary hours, then same again on Friday, it's only eight hours ordinary. Friday, Saturday and then Sunday it's Sunday.
PN1010
So effectively the permanent is notionally getting overtime but it's absorbed within the weekend penalties. So if you go to the casual employee it's a similar pattern.
PN1011
VICE PRESIDENT HATCHER: So what do you mean - the Saturday and Sunday hours they're ordinary hours, are they?
PN1012
MR BULL: Beg your pardon?
PN1013
VICE PRESIDENT HATCHER: The Saturday and Sunday hours are ordinary hours, are they?
PN1014
MR BULL: Yes. Because under these awards there's no span of hours, so you can roster a permanent employee on a Sunday. As long as you pay the penalty it's an ordinary hour. Many awards have provisions where - and it's structured around a traditional notion of the nine to fiver during the week, so hours outside sort of seven till seven, or whatever, Monday to Friday are deemed to be ordinary hours, and if you're asked to come into work on a Saturday it's overtime or penalty, but ‑ ‑ ‑
PN1015
VICE PRESIDENT HATCHER: Not under this award?
PN1016
MR BULL: Beg your pardon? No.
PN1017
VICE PRESIDENT HATCHER: Not under this award?
PN1018
MR BULL: No, they're all ordinary hours.
PN1019
VICE PRESIDENT HATCHER: Yes.
PN1020
MR BULL: And one of the problems we say, and this is why there's a bit of a special case, we'd love you to say there's a general principle but you don't need to go that far. We say there are quite sector specific and award specific reasons why you might be minded on the basis of merit to consider our claims. And I just thought the rosters were a useful way to see the problem in practice.
PN1021
VICE PRESIDENT HATCHER: I'm not seeing what you're seeing. I'm seeing four hours - on roster 1 the permanent has four hours overtime for which he or she gets 158.90 and the casual numbers are exactly the same.
PN1022
MR BULL: Yes, but they shouldn't be because they're not paid the same. The hours -it doesn't matter in a sense. These are going to - we're having the same - the permanent and the casual working the same pattern. What we say is of significance is the money they get. So in relation to roster 1 the cost difference between the permanent and the casual, the casual is only getting 10 per cent more, and there's not a significant - so if we accept the ABL and the employer's argument that the 25 per cent loading is of no utility when you work overtime, well, it doesn't seem to be the case, because they're getting nowhere near what we say should be the appropriate cost premium which is one-quarter more than the permanent and that's assuming that the loading is properly set which we say is not contestable in these proceedings.
PN1023
It becomes more extreme if you look at roster 3 in the Clubs rosters. So you've got a permanent and a casual and they're both doing long durations of work on Saturday and Sunday. They cost the employer the same amount of money and that means effectively that the casual is a much cheaper proposition than the permanent worker, because you're getting someone who you don't have to pay any holidays to, any of the, you know, entitlements associated with permanent work for exactly the same price, and these are for durations of work where there is a consensus that there's disutility. So you're working somebody at the unsocial time of the weekend. You're also working them for long durations of work and we say there's an inappropriate cost bias which favours the utilisation of casuals. And one way that you can overcome that is by at least having the expression of the 25 per cent loading.
PN1024
DEPUTY PRESIDENT KOVACIC: But doesn't roster 3 throw up a different issue.
PN1025
MR BULL: Beg your pardon?
PN1026
DEPUTY PRESIDENT KOVACIC: It doesn't relate to overtime, does it?
PN1027
MR BULL: Sorry, I didn't hear that.
PN1028
DEPUTY PRESIDENT KOVACIC: The results in terms of roster 3 of the one you've just taken to us that's not the result of overtime, is it?
PN1029
MR BULL: No, it's the result of the - exactly, it's not the result of overtime, it's the result of the absorption of overtime in other penalties and the fact that there's no difference.
PN1030
DEPUTY PRESIDENT KOVACIC: Sorry, I don't understand that point. It's kind of illogical, isn't it?
PN1031
MR BULL: All these awards have absorption provisions.
PN1032
DEPUTY PRESIDENT KOVACIC: Yes, but what I see in roster 3 is employees working a shift on a Saturday and a shift on a Sunday which arguably, given the point you've made before about the award not having a span of hours, would be ordinary hours.
PN1033
MR BULL: If you look at roster 3, I'm looking at page 7 and 8, there is some overtime. And the point is - well, my submission is that you would expect that there would be some cost difference. These two categories of employment are identically - cost the same in terms of the what the employer has to pay them and this is assuming that the permanent - and it's not quite possible, it'd have to be a permanent/part timer. That's what they do, they work on Saturday and Sunday and then the casual comes in. There's a little bit of overtime, and the only thing that's actually expressed is a bit of the 100 per cent penalty which is the third hour. So the second hour is absorbed - the first two hours rather of overtime in both cases is absorbed within the weekend penalty. And it would become grosser if the permanent had other shifts, for example had to work on Monday and then Tuesday. The Tuesday for the permanent would be a pure overtime shift. So they'd be getting, you know, for the first two hours 150 per cent and all work after that 200 per cent.
PN1034
Sorry, I just thought I'd go through these to try and assist. I might just go - I'll go through my most written submission and I'll go through it briefly. I have responded and most - and it was intended to be responsive. Some of it may be able to be characterised as fresh material but it is principally responsive to the employer's submission and the quite unexpected arguments that were put by the ABL and I've gone into some detail about the 25 per cent loading and I make perhaps the uncontestable statement that the last time the 25 per cent loading was arbitrated in any meaningful sense was in 2000 when the predecessor of this place set it in relation to what's known as the Metals Award and since then it hasn't been reconsidered.
PN1035
There's obviously been significant events that have occurred since 2000, the main one being the enactment of the Fair Work Act, and I note that the broad submission that the 25 per cent loading in some way isn't referable to overtime hours in that the argument that it is only referable to ordinary hours worked by a permanent employee is a problematic submission and one that doesn't really stand up to any sort of scrutiny, and I quote well known parts of the metals decision where the 25 per cent loading is seen as consideration for itineracy, lost time and deterrence and it also was seen as well relevant lost training opportunities and industrial citizenship, although those components weren't strictly loaded into the rate.
PN1036
I make the general point that that particular decision had a number of complex value judgments and it's perhaps inappropriate to reduce what occurred in that particular case to calculations because the calculations were on the basis of these complex value judgments and the merging of considerations and entitlements which then were used to produce (indistinct) results. I've also quoted, this is a New South Wales case, the Registered Clubs case which, Vice President, you may be familiar with but principally because we say it's got a useful analysis of what a loading is and what a penalty is and our claims are put to you on the basis that properly understood, the casual loading is part of a casual employee's paid rate.
PN1037
It's not something which is there to stop or dissuade an employer from engaging a casual but it's properly understood as something which is what they get paid, so it shouldn't cut out at any point because that's what they get paid when they do work. Overtime, and there is some - the characterisation of penalties as having some element of dissuading an employer to do something, I don't know whether it's completely gone out of fashion, the penalty rates review seemed to concentrate on the concept of disutility and that may well be sort of six of one, half a dozen of the other.
PN1038
It's a different side to the same point, so at least in terms of the premium paid for unsocial work on Saturdays, Sundays and public holidays and, to a lesser extent, the early morning and the evening, the most recent decisions of this place have configured that payment as essentially compensation for the disutility that the employee experiences from doing that work. We say there's a sound industrial basis to treat overtime in a different category.
PN1039
There is inherent disutility, which resides with the employee, but the traditional notion of dissuasion, of putting a price on something in order to limit choices, is also particularly relevant to overtime and that aspect of this penalty is apparent from - we've had the evidence of Professor Muurlink and his evidence is broadly - it's put on the basis of it's not specific to the New South Wales or the Australian hospitality sector.
PN1040
As he indicated, these are broad longitudinal studies from all sorts of places across the world and the disutility or the unattractiveness or the odious part of overtime is that it's physiologically destructive and the AiG, I think, has misread our submission. We never used the term psychologically destructive. It was always been premised on the idea that there were adverse physiological outcomes that come from effective overtime and the point about overtime is there will be employees who want to work as much overtime as they can get, that's not an uncommon phenomena.
PN1041
But there should be, we say, there's sound reasons, the first one's, if you like, the physiological argument, it's just unhealthy to work beyond a certain point, and the subsidiary argument is one really which relates to employer choice, that in order to cost the work appropriately, will create a situation where rational proper choices will be made in terms of engaging appropriate categories of work for firms.
PN1042
VICE PRESIDENT HATCHER: Mr Bull, we've already heard this case. You ran this case in the part-time casual case and there was an outcome - - -
PN1043
MR BULL: Well - - -
PN1044
VICE PRESIDENT HATCHER: - - - and it was the outcome you asked for. I still don't understand, with respect, speaking for myself, how in a four year review of modern awards, we're not now reviewing the modern award as it was before the review, we're now reviewing the award as it's already been reviewed in a major case which went for many, many months and heard many, many witnesses, and then you got the outcome you asked for and then in the same review asking us to review the outcome of that case and come up with a different outcome.
PN1045
MR BULL: Well, with respect, we did ask for this outcome in the part-time and casual common issue. You - and we were grateful that you did create this entitlement - - -
PN1046
VICE PRESIDENT HATCHER: Well let's assume you did ask for it, I don't think that's right, but let's assume you did ask for it, there was an outcome. That is, we heard this case and there was an outcome.
PN1047
MR BULL: All right.
PN1048
VICE PRESIDENT HATCHER: How do you get to run this again in the four year review?
PN1049
MR BULL: Well if that's your position maybe we don't.
PN1050
VICE PRESIDENT HATCHER: Well I'm asking you a question. I'm just waiting for an answer to it.
PN1051
MR BULL: Well - - -
PN1052
VICE PRESIDENT HATCHER: How can you get to run the same case twice within the same four year review?
PN1053
MR BULL: We haven't completely run the same case twice in that - and the submission about - our original claims in relation to an entitlement to overtime were based on absorption. We say some things have changed, that - - -
PN1054
VICE PRESIDENT HATCHER: What's changed since 1 January 2018?
PN1055
MR BULL: Well what's changed is that there's been an entitlement to overtime for well over a year. There has been - at the time this entitlement was created, we weren't in a position to properly run this case and my understanding of the resolution of, I suppose, the issue of the creation of the entitlement was that the door had been left open, to some extent, and then this process commenced and it did seem an invitation to explore this issue because it's squarely within the frame of what this proceeding seems to be doing.
PN1056
Back to the issue of have things changed. What's changed, we would say, is that you've had, if you like, a transition period, you've had a year of, more than a year of - a year and a half effectively of casuals in a sector who previously had almost a 18 year history of not having access to overtime, having had overtime. There does not appear to have been any destructive effect from that. They're frankly at the bottom of the barrel in terms of their remuneration, their terms and conditions, and I suppose it's our job to do this.
PN1057
We have coverage of this area, we have members in this area. We don't expect to win everything but we've got some responsibility as an industrial organisation to progress and ask for things that will be for the benefit of our members, so that's the reason. There's nothing funny about that.
PN1058
VICE PRESIDENT HATCHER: We haven't heard any evidence at all about what's since this entitlement was introduced.
PN1059
MR BULL: Well - - -
PN1060
VICE PRESIDENT HATCHER: For example, it might be interesting to find out whether that change together with the change to part-time conditions had the intended effect of increasing part-time employment but we haven't heard anything - - -
PN1061
MR BULL: We don't know.
PN1062
VICE PRESIDENT HATCHER: - - - from that. There was some evidence in the Coles penalty rate case which suggest it had no effect. In fact, it had a reverse effect but beyond that - but we don't know.
PN1063
MR BULL: You're correct. There's a potential for a natural experiment and we don't know. I suppose we would say that you've got to deal with the award as a sort of somewhat abstract document and there are provisions within it which we say are appropriate to change on a merit basis. One thing we don't have, and sometimes not having evidence says something, you don't have before you any particular evidence that the insertion of an entitlement to overtime has been particularly destructive or caused problems.
PN1064
There's one submission on the web page, I think, from Chefs on the Run, who are a contract catering business that provide cooks and so forth to mines, and that's the overtime has somewhat restricted their operations in the sense that they had a FIFO model where the catering staff would go and work extraordinarily long hours for short periods. If that's the biggest problem, it's probably not a problem. We are principally - we are on the understanding that, if you like, that the opportunity was there, we should progress it because it did seem to be something where there was some merit and that's why we're not suggesting that there's been a fundamental change of circumstances in the sector in the last year and a half but it simply - in relation to this award, this sector and the employees where we're concerned with, it would be an appropriate merit change for overtime to be expressed - I withdraw that.
PN1065
For the casual loading to be expressed when they work overtime because there is, frankly, not - and cost equivalence, we say, means that something close to 125 per cent is the cost of a casual with a permanent because of the way rostering and so forth happens and the pattern of work, we're nowhere near that. I might just return to my submission. This is paragraph 17 and so forth, and a lot of this is responsive to what the ABL particularly has put concerning what they say is their default position.
PN1066
We've sought to narrow down our claims as claims relating to three particular awards and I simply go over the fact that there's quite a few decisions which are supportive of different views about the expressions of the casual loading and penalties. There's very few that you find are supportive of a view that the casual loading should be, as a matter of principle, completely suppressed or not paid once you get to what could be termed additional hours.
PN1067
I go through, this is paragraph 24, and this is just going ‑ looking at some of the basic entitlements that are said to comprise the casual loading. I suppose the fundamental point we try to make is that it's a bit narrow just to try and confine leave, personal leave, long service leave, simply to ordinary hours.
PN1068
Those entitlements actually, and this is not a pedantic distinction, relate to the service of a permanent employee which is quite different from their ordinary hours and the example is annual leave where annual leave accumulates and when you take annual leave you get paid its value according to the ordinary hour rate that you're paid when you take the leave, so saying it's referable to ordinary hours worked, which is essentially their argument, we say doesn't stand up to scrutiny and there are situations where with annual leave, for example, the Act contemplates annual leave accruing when you don't work.
PN1069
It's simply wrong to say that annual leave is referable to ordinary hours worked. There are situations where you'll accrue it when you're on other forms of paid leave. There are at least two jurisdictions where you'll accrue annual leave when you're on workers compensation payments and so forth. In relation to the hospitality establishments, it's not drawing a long bow to say that there will be plenty of casuals who work a pattern of work, which if they were permanent they'd be classified as shift workers. There are 24 hour continuously operating establishments.
PN1070
Frequently the work takes place on the weekend. They're also at a deficit there. We make the broad point, this is at paragraph 36 of our submission, that the argument which has been principally raised by the ABL is, at best, a rhetorical one in this process. It's an argument which is about what the Act deems to be minimum wages. If you're going to say that the 25 per cent over compensates, that's not an argument which you can, we say, properly make out here because it's something which should occur within the minimum wage process in terms of the structure of the Act.
PN1071
I've described the argument as a tourist in this process. The 25 per cent is what it is but we say it's at least adequate and when you look at its application in relation to the structure, at the patterns of work in these three awards, it's not delivering an appropriate outcome in terms of properly compensating a casual employee and the comparison always has to be against a permanent worker. Paragraph 41, I'm elaborating on the overtime as a penalty and that's where I draw upon the Productivity Commission report. They had a number of chapters dealing with ‑ chapter nine was overtime, then the other ones were mainly - did focus, rather, on weekend penalties.
PN1072
The basis of this claim is from an extract which was deliberate, which was directed to weekend penalties, which appeared in the penalty rates review and concerned, for us at least the reductions in the Hospitality Award because what happened in that award in relation to weekend penalties, the Saturday penalties went down, as did the Sunday penalty. The casuals effectively stayed at the level they are at so there was a reduction and the reduction was configured as an across the - a broad reduction.
PN1073
That it was said well we'll express the casual loading because it's appropriate because the Productivity Commission said we'll do it. There were actually no reductions in the weekend rates in the Restaurant and the Clubs Award hence the amounts paid for a casual and a permanent for that weekend work still effectively is the same and in relation to our claims, they're probably strongest in relation to the Clubs and the Restaurants Award because there's the actuality of work on the weekends where casuals are currently cost equivalent.
PN1074
VICE PRESIDENT HATCHER: United Voice did not ask us to embrace the Productivity Commission report in the recent weekend penalty rates case for the Clubs Award.
PN1075
MR BULL: Beg your pardon?
PN1076
VICE PRESIDENT HATCHER: United Voice did not ask us to embrace the Productivity Commission report in the recent case concerning - - -
PN1077
MR BULL: Well that was about - - -
PN1078
VICE PRESIDENT HATCHER: - - - weekend penalty rates case for the Clubs Award.
PN1079
MR BULL: That was about revoking a modern award. It wasn't traversing penalty rates.
PN1080
VICE PRESIDENT HATCHER: Well it was a case about penalty rates, Mr Bull, as I think you well know.
PN1081
MR BULL: Well we say it was, it was by default and - but we weren't - it perhaps wasn't appropriate for us to go there in that particular proceedings because we're quite happy with the penalty rates at a global sense in the sense that they're high and we were - our claims in relation to this were on foot at the time so we did have, if you like, and it wasn't even up our sleeve because we've made these claims - and this is, look - one of the - we expressed, in response to directions made by this Commission in relation to this process, we expressed our intention to make this claim in, I think, December 2017 and it's no criticism of anyone but it's been going that long so it's traversed the existence of our claim, has traversed the comings and goings of the application to revoke the Clubs Award.
PN1082
That's all I might say on that matter. Anyway, at paragraph 41 I discuss the Productivity Commission report. The point that we would make is that if you read the relevant chapters, they clearly, we say, treat overtime in the same category as weekend penalties. A fair reading of what they say is that the argument for the maintenance of overtime and possible expansion is stronger than that for weekend penalties. I've put a chunk of a quotation on top of my paragraph 41 and they use the bureaucratic language of 'given the health costs associated with long hours and night work and a lack of bargaining power of many employees, there is a strong case for retaining a policy response' and that, to me, is language saying that the market isn't going to fix it and that some regulation is appropriate and needs to, at the very least, be maintained and we say in terms of their analysis that appropriate regulation is that the casual loading is at least expressed in relation to overtime.
PN1083
That's a policy response which we say is consistent with the broad findings of the Productivity Commission and that particular body is not always our friend. They tend to search for solutions which involve markets regulating themselves and I'd suggest that it's of note that they've said that overtime is something that requires a policy response. It's not going to be fixed by bargaining and that is something which I'd say is of particular reference to hospitality where you're dealing with low paid, award reliant employees, and they do - they also have the principle of (indistinct).
PN1084
The aim is to deliver full cost neutrality between permanent and casual rates. We say the current situation is you don't have anywhere approaching full cost neutrality. The casuals are still objectively a cheaper proposition on the weekend particularly and particularly in relation to the Clubs and the Restaurants Award. That's an undesirable thing. One way you can fix that is by having the 25 per cent paid. I now turn to what's called merit considerations.
PN1085
I've traversed that a little bit so far. The point perhaps I'll make is that you can't - it's difficult to compare overtime between a casual and a permanent employee in relation to these three awards because the entitlement is fundamentally different. There's also a broad conceptual problem saying that a casual employee has ordinary hours when a casual employee, by definition, can work nothing or 50 hours a week, and it's not a sort of pedantic distinction. It's a difficult one, we say, to make with any honesty, and if you look at, for example, the intra-day on that it varies.
PN1086
The general structure of these three awards is that you can roster a full-timer five days, seven hours and 36 minutes and you can roster them five days in a row. If a full‑timer works certain sequences, and typically it's more than three days of 10 hours, then the fourth day has to be overtime. With a casual, you can sequence them effectively much greater durations and then you'll start generating intra-week overtime, and most of the permanents, the maximum shift length which I've put on paragraph 56, which is another diagram, or a table rather, in all these awards the casual intra-day overtime commences after 12 hours of work.
PN1087
All these awards have effectively a half hour paid break. For a casual, it appears that that adds on a half hour for the engagement because you only get the overtime if you work 12 hours. Some of these awards have two hours of paid breaks but what it means is even if the permanent's working the longest shift possible in a day, they're still accruing overtime well before the casual employee gets that overtime, and we say that overtime - well is the way, the only effective way, for a casual employee that you can demarcate additional hours from ordinary or other hours and you do have to use the language perhaps of ordinary hours but with the warning that with a casual employee, particularly under these awards where the patterns for casuals can be haphazard there's seasonality, there's all sorts of issues, the term ordinary is - you're forced to use that language because that's the dichotomy that you get into, but it's problematic but the way to demarcate it and the best and the merit way to do it is through durations that become physiologically or in comparison are unhealthy is through the payment of overtime and currently, once again, the expression isn't as - it should be with the complete rate they're paid.
PN1088
If you look at paragraph 60, I've tried to summarise what we say are some of the structural problems in the three awards that make casual employees under-valued and give rise to, we say, the merit basis for you to accept the variations that we've proposed and the first is the intrinsic unpredictability of a casual employee working patterns accentuated by the unpredictable patterns of work in the hospitality sector, so it's precarious employee working in a sector which is also, in a sense, precarious and there's - you don't necessarily know how busy, whether it rains on a Friday, whether people go out to the restaurant and so forth, whether the busload of pensioners from Blayney decides to stay in the pub and have dinner that night rather than go back to Blayney, assuming you're in Bathurst.
PN1089
The other thing is that the intra-day duration for the casual employee in all three awards, you need to work more to get there and there's also issues where the casuals ‑ and we're not traversing this in this award, where overtime for casuals can be averaged over a four week roster. That interacts unhelpfully in terms of the fact that permanent employees in all three awards have fairly rigid and beneficial restrictions on sequencing in that you can't work a permanent for an intra-day duration, a long intra-day duration, without them getting a break and that, we say, is to the benefit of a permanent worker.
PN1090
VICE PRESIDENT HATCHER: Sorry, so the break provisions after working overtime don't apply to casuals?
PN1091
MR BULL: They do.
PN1092
VICE PRESIDENT HATCHER: They do?
PN1093
MR BULL: Yes. They do, but what we say is that it doesn't appear - if you have a half‑hour break, that's not work. You still have an engagement where you have to be there for 12 hours and 30 minutes, but you won't get overtime, because when you have your half‑hour break that's not work so you're entitlement hasn't - you haven't reached the point where you start to get overtime.
PN1094
There is an argument with - I think it's the Restaurants - if you work durations of more than 10 hours, you get a 30‑minute unpaid break and I think two 20‑minute paid breaks. That's in the Hospitality and the Clerks Awards. It's at least tolerably arguable that that doesn't count as work, so the casual employee will have to have an engagement of 13 hours and 10 minutes and they won't accrue any overtime.
PN1095
You can say we're being a little bit abstract and pedantic, but from our experience, you know, we now live in the world of roster wrangling and roster wizardry. We're dealing with the Security Industry Award tomorrow and these sort of fine details of cost benefit are real. They're particularly real in larger businesses where there is ability to - well, first of all, the larger ones tend to have to pay by the award by sheer size. They can't avoid because they have to have to payroll systems and so forth, but there then becomes these incentives to slice amounts off the payroll however you can.
PN1096
So these issues, we say, are of relevance and we say are - claims would materially improve the lives of casual employees and have, you know, broad social benefit consistent with the modern awards objective in that it would create rational choices for employers to engage more employees as full‑time or part‑time permanent employees. If you've got a workforce where the casualisation rate is hovering around 65 per cent - in some establishments such as pubs almost the entire workforce bar the assistant manager, the chef and maybe the front of house person are permanents, then the rest are all casuals. It's not a destructive thing to force the employer to engage more casuals, because it creates permanency and - - -
PN1097
VICE PRESIDENT HATCHER: Engage less casuals you mean?
PN1098
MR BULL: Less casuals, sorry. Our argument is a simple one: if there is a casual employee working as the head barman or one of the chefs and they're working 45 hours a week, that person probably should be provided with a permanent job. At 65, I revisit the penalty rates which just show you that there is this cost equivalence, particularly in the Clubs and the Restaurants Award on weekends. At 67, I go through what the employers have said are the destructive financial impacts of our variations potentially being agreed to.
PN1099
The point I make is that it has been over‑egged. It is not going to cause in the long run a 25 per cent increase in wages for overtime. There will be, we say, beneficial substitution. There will be still some absorption and I've quoted something in the part‑time common issue, which is just basically highlighting the issue of substitution which we say is a desirable thing. We're not trying to stop people from working, but there is a point where wage regulation should stop individuals working 16, 17 hours a day consecutively. The appropriate way to do that is to add an appropriate cost premium that has to be paid for that work.
PN1100
At 73, I talk once again about the minimum wage objective and the AiG which says this is about work value. We say it's not. The argument that this is about work value is a bit like saying minimum rates of pay in a particular award are too high and that's a reason why you should reduce a meal allowance or weekend penalty rates. The system doesn't work that way. The Act says there are particular pathways for decision‑making and they're relatively rigid.
PN1101
At 74, it talks about the fact that this is essentially one review. This issue has been looked at and traversed in other proceedings. It's appropriate to use some of the findings. I'm not asking you to use findings that are not appropriate; it's mainly in the context of background and what is known about this sector. It's a low income sector. It has got a high proportion of casual labour and so forth. Those are my submissions. Thank you for hearing me.
PN1102
VICE PRESIDENT HATCHER: Thank you. Mr Izzo, are you going next?
PN1103
MR IZZO: Yes. I assume there no other union party - - -
PN1104
VICE PRESIDENT HATCHER: Do you want say something, Mr Clarke?
PN1105
MR CLARKE: If I may. There was some discussion around the basis upon which United Voice could come back here and say, 'We wanted the casual loading to be clearly expressed separately in this award." I just refer back to the decision of the casual and part‑time Full Bench in November of 2017; that is (2017) FWCFB 6181. In paragraph 3 - and I'll just quote from that:
PN1106
United Voice, in its draft determination, sought that the casual loading should be payable in addition, but the various employer interests took the position that United Voice had initially applied and run its case on the basis that overtime penalty rates would be inclusive of the casual loading. We accept, as ultimately did United Voice, that our decision had proceeded on the basis of the application and case advanced by United Voice.
PN1107
Accordingly, the variation to be made to the awards to extend overtime penalty rates to casual employees will provide that those penalty rates will be payable inclusive of the casual loading. We emphasise that this does not represent any decision of principle about this issue which may be revisited at a future time upon application.
PN1108
It was only two weeks after that, if that, that the statement issued from predominantly the same Bench - minus Hamberger SDP - enclosed a list of awards and said effectively:
PN1109
Here is a list of awards. There has been some concern about ambiguity. Interested parties can provide any written response, including about the accuracy of the list of the awards -
PN1110
which, as you will recall, says is it ambiguous about this and ambiguous about that.
PN1111
You can provide that by Monday, 11 December 2017; send a response about that.
PN1112
Then in a separate paragraph:
PN1113
Further, any interested party that seeks a variation to any of the modern awards identified in attachment A in respect of overtime entitlements should lodge a draft determination.
PN1114
That's what United Voice did. You had one decision that said if there is no decision about principle of this issue it may be revisited at a future time upon application and then a statement came that said, "If you want to vary any modern awards dealing with casual overtime, please do it, and let us know your determination before 18 December" - different date - "2017." As I understand it, that's what the union did in fact do.
PN1115
If they were to be criticised for that or told that that wasn't an avenue that was open to them, it's a bit difficult to have that sort of presented now when if it was - what they had sought to do way back then was out of scope, it perhaps ought to have been raised as an objection back then.
PN1116
VICE PRESIDENT HATCHER: Mr Izzo?
PN1117
MR IZZO: Thank you, your Honour. We filed detailed submissions in response to the United Voice application and I assume that the Bench has had the opportunity to review those submissions so we don't propose to re‑read them, which I am sure will please the Bench. There are effectively six matters which I wish to address today. The first is that the history of casual loading supports the contention that the casual loading should not be paid during overtime as a matter of principle.
PN1118
The second is that each element that the casual loading compensates for is entirely satisfied or compensated for during a casual's ordinary hours of work. The casual loading is directed at putting a casual in the same position as that of a permanent. That is all achieved satisfactorily during the ordinary hours of work. The third matter I wish to address is that the cases that have been relied upon by United Voice have in many cases been misconstrued. The cases they rely upon do not invalidate the arguments that we put forward and we're going to have to take you through to show you why.
PN1119
The fourth contention is that United Voice has misread and misapplied the comments in the Productivity Commission report. It simply does not stand for what Mr Bull repeatedly says it stands for. It's talking about a very different concept, which is weekend penalty rates. It's not talking about overtime. I wish to make that proposition good. The fifth matter is that I wish to identify that as United Voice are seeking to vary the substantive entitlements in these awards, they should advance a merit case with evidence and they have not done so.
PN1120
The evidence filed - particularly the evidence of Professor Muurlink - absolutely takes us nowhere. It, at its highest, is evidence that where someone works long hours they should be entitled to overtime penalties. That's all you could derive from the Muurlink evidence. It does not have anything to do with the casual loadings and we'll seek to make that proposition good. Finally, I would like to respond to a variety of isolated, discrete United Voice contentions which hopefully I can dispense with in short order.
PN1121
VICE PRESIDENT HATCHER: Mr Izzo, you want us to decide this case on the level of principle, too, do you?
PN1122
MR IZZO: Yes.
PN1123
VICE PRESIDENT HATCHER: Then, if we're against you, what follows from that?
PN1124
MR IZZO: If you're against us - - -
PN1125
VICE PRESIDENT HATCHER: That we need to root out each award which doesn't comply with the principle we decide and vary them? I mean, that - I'm putting that with respect - is a dangerous course, isn't it?
PN1126
MR IZZO: It is, but if I can perhaps explain the way in which our position in these proceedings evolved and it relates to all awards. We set out to respond solely to United Voice's application. In doing so, we filed the submissions that we did. Most of our arguments rely on concepts of general principle. That's right. What we envisage occurring is that this matter will be determined one way or the other.
PN1127
When we come to the other awards - because we are not seeking to make a substantive change to those awards - the question will firstly be is it clear how the entitlement operates? If it does, we're happy to assume they're industry specific considerations that gave rise to the relevant award provisions, but if it is unclear how the award operates or if it's not specified and if there is nothing that we can turn to to understand how the award operates, then naturally the general principle should be regarded and may well be determinative in the interpretation.
PN1128
Now, I accept that if we are unsuccessful in our defence of this claim and as a Bench you make findings that don't accept the general principles that we propose or propound, that may have adverse consequences for our position later. I can't avoid that.
PN1129
VICE PRESIDENT HATCHER: And in this case, notwithstanding the peculiar history of how labour time got into this award, which was adverted to in a previous discussion, if you go down on this issue of principle, Mr Bull wins. Is that the way it works?
PN1130
MR IZZO: Sorry, Mr Bull wins?
PN1131
VICE PRESIDENT HATCHER: Yes, notwithstanding the peculiar history of how this has developed. You want to argue this at the level of principle.
PN1132
MR IZZO: Yes.
PN1133
VICE PRESIDENT HATCHER: Does it follow then that if you lose on the level of principle, Mr Bull wins, notwithstanding everything that has happened in the part‑time casual case? I'm just wondering why we're engaging in the case at this level.
PN1134
MR IZZO: Well, because, your Honour, we see this as the most compelling reason why you would not apply casual loading in relation to overtime. We could refer to other reasons. There is an inability to pay in this particular industry; the employees are sufficiently compensated in this industry. We could have chosen that path. I suspect some of the other employer groups may have chosen that path and those submissions will stand, but for us the most compelling argument is the general principle because we see it as being quite clear‑cut.
PN1135
If I can start, your Honour, with the first contention and that is the history of casual loading supports the contention that the loading should not be paid during overtime. Our submissions address this at paragraphs 5.1 to 5.27. I don't propose to go through all those cases. We have effectively sought to look at all the seminal decisions that have considered the casual loading and what it entails, what it is for.
PN1136
At paragraph 5.28 of our submissions we actually then summarise what those cases say and the historical analysis, we say, leads to an overwhelming inference. That overwhelming inference that I have not seen disputed in any of the materials filed is that unless there is some specific contraindication in a particular award, the casual loading has a particular purpose.
PN1137
That purpose is to compensate casual employees for the loss of the following permanent employment entitlements: annual leave, personal leave, public holidays, notice of termination, the possibility of redundancy pay and some level of compensation for the unreliability or intermittency of the work offered. That is the purpose of the casual loading. We consider that the cases identified in paragraphs 5.1 to 5.27 uncontroversially lead to that outcome, so that is the first proposition.
PN1138
There is one entitlement that I have left off and that relates to long service leave. Some of the earlier cases did talk about long service leave being compensated for in the casual loading, although it is notably absent from some of the later considerations. We say there is good reason for that. Every long service leave statute in Australia now entitles casual employees to long service leave if they hit the relevant entitlement duration.
PN1139
We do not understand why casual loading would need to compensate for long service leave, so our contention in respect of that is we have to acknowledge it is mentioned in some parts of history about being a matter that is compensated for, but that is no longer relevant so that does fall away, in our submission, so it is those entitlements that I referred to earlier. They are all entitlements that a permanent gets that a casual does not.
PN1140
The next question then that the Bench really does need to turn its mind to is, well, now that we know what the loading is for - it's there to compensate casuals for certain entitlements that permanents get that the casual doesn't - is it necessary for it to be paid during overtime? Under the three awards we're considering the loading is not currently payable. If the Bench is to make the loading payable, will it overcompensate? Will it put the casual employees in a position that there is a windfall gain; they are getting a loading for something they are not in need of being compensated for. Our submission is most definitely that is what will happen and that is a compelling reason to not add it.
PN1141
That really then brings me to the second contention, which is that each element of the casual loading is entirely compensated for, broadly speaking, during ordinary time. Now, the first and the easiest of these to deal with is annual leave and personal leave, despite submissions from United Voice that I find somewhat incredible. It is not controversial that annual leave and personal leave are accrued by reference to ordinary hours of work. The reason that is not controversial is because that is specifically identified in the Fair Work Act and I'll give you the relevant section - - -
PN1142
VICE PRESIDENT HATCHER: But that operates on an assumption of a guarantee of hours and therefore a guaranteed amount of annual leave. They are premises which have no application to casual employment.
PN1143
MR IZZO: That's correct - - -
PN1144
VICE PRESIDENT HATCHER: When a casual exceeds 38 hours in a week and they go into overtime, they don't proceed upon an assumption like a full‑timer that they're going to get 38 hours the next week, the week after and the week after that. There is no such assumption, so I'm just wondering whether the premise of that argument might be misconceived, speaking for myself.
PN1145
MR IZZO: I'm not sure for this reason, your Honour: if we are to understand the position the casual is in with respect to certain hours of work and compare that to the permanent, if you take a month or a six‑month period and you look at what the permanent - what leave they would accrue, it will only be during the first 38 hours or the first eight hours in a day; their usual ordinary hours.
PN1146
So when you get to the end of the six months - let's say a full‑time permanent - they will have two weeks' annual leave accrued. If you're going to put the casual in the same position as the full‑time permanent, you would give them two weeks. You wouldn't give them more.
PN1147
VICE PRESIDENT HATCHER: That's not, with respect, a valid comparison, because Skene would tell us that that person is then not a casual. I mean, it's not comparing the true position of a casual which is based on a different premise to that of a full‑time or part‑time employee. There is no guarantee of hours and, if there is, Skene would tell us they're not a casual in the first place.
PN1148
MR IZZO: Well, in relation to Skene what I would say is that regardless of the outcome in Skene - and I'm not saying that the Commission is not bound by it - it goes without saying - and there are significant findings with part‑time casual proceedings about this - that there are a large number of casuals at the moment engaged relatively regularly for long periods of time. Now, whether every individual is a casual or not, you would have to look at all the individual circumstances. I don't think we can simply say, well, they're not casuals, anyway, because one would need to look at the representations, the contract, all sorts of things. I'm not sure I accept that proposition.
PN1149
I accept that the casuals are in a different position because there is no certainty over their hours, but there is a different element of a casual loading that compensates for that. That's the element that compensates for intermittency of work. That's the element that compensates for the essence of being a casual. That is the last component of the casual loading and is referred to in the Metals case in 2000, and they compensate for that.
PN1150
If you double compensate, if you try and compensate for that when you deal with annual leave and personal leave, well, you're also compensating for that later on during the casual loading, as well, so I do have a difficulty with saying that we can't just look at the hours and work out what a permanent would have accrued; particularly also when it's paid out, the annual leave and personal leave, it's only paid out for the ordinary time earnings during the ordinary hours of work.
PN1151
There is no overtime payments made. The payment that is made is strictly referable to ordinary hours, as well. I do accept that they're different breeds and that the casual doesn't have guarantees hours, but I still think if they have both worked for six months and you're trying to give the casual the leave that the permanent got, the exercise is to look at the ordinary hours, in my submission.
PN1152
The next element of the entitlement is notice of termination and redundancy. Now, we have made the point in our submissions that this is a little bit more difficult to qualify because notice of termination entitlements will vary by reference to their service. Sometimes redundancy will be payable, sometimes it won't. It depends on the circumstances of the termination, but that does not make it impossible to assess on an aggregate basis the value of those entitlements. The Commission in the Metals casual case made an attempt at quantifying those entitlements and we have said that the Commission, by reference to some limited statistical information, can do the same.
PN1153
I'm not saying what have filed is limited. What I'm saying is you don't actually need to look a lot to form a view on an aggregate basis. You really just need to know - and we point this out in our submission. You just need have a sense of the proportion of casuals whose employment is terminated at the employer's initiative, you need to have a sense of the proportion of casuals whose employment is terminated by reason of redundancy and you need to have a sense of the average hours that casuals usually work and their average duration. All that information is available. Statistical information has been filed in relation to all of those four assumptions, if you like, that you need to form with respect to both casuals generally and these awards.
PN1154
What we have identified is that the average hours the causal works is about 16 and the average duration is about four years, so we've done some calculations on that basis, but to satisfy the Commission about other common types of engagements we've also looked at casuals who work a lot more than 38 hours and we've looked at casuals who are only engaged for 12 months. We've said if you take these four different scenarios - and they're outlined in figure ABI 1 which starts at page 24 of our submissions. If you take each of those four scenarios you can get a sense as to what entitlement they're missing out on.
PN1155
We have done that and if I can just - I've been informed there is a typographical error in figure ABI 1, so I may as well take you to that, as well. You will see at page 24 of our submissions we have done a table of casuals who have a four‑year engagement, 16 hours a week. We have compared what they would earn in notice of termination and redundancy to the permanent. Obviously they get nothing. We have worked out what the permanent gets. We have done that same exercise over four different scenarios.
PN1156
Now, if I can perhaps just make the correction first. Table C at the bottom of page 26, there are some totals there. The figure 188,930.68 at the bottom should actually read 19,905.93; so that's 188,930.68 changes to 19,905.93. The next figure involved, 158,643.93, is incorrect. It should read 16,433.97, but the difference remains the same; the percentage difference is the same.
PN1157
What our tables identify is that when you look at - and I'm just dealing with notice of termination and redundancy at the moment, but it brings me to the table so I'll address them generally. When you take into account each of these four scenarios and you work out what the casual has foregone, broadly speaking the casual is receiving about 19 to 21 per cent less than the permanent in monetary entitlements. It stands to reason that's why we end up with the 25 per cent loading. I'll come to how we get to 25, but at the end of the day once you factor in what they should get in notice of termination, what they should get in redundancy on an aggregate basis, you can flood those figures into the table.
PN1158
There are two comments I'll make about notice of termination and redundancy. We had to make some assumptions as to how commonly those events arise. We relied on ABS stats for that and I think we landed at - notice of termination, we assumed 40 per cent of scenarios resulted in employer termination. Now, that's not taking into account serious misconduct or not. We have just filed stats that showed 40 per cent of employment relationships end at the employer's initiative and so we've said, okay, well, then to the aggregate equation we should assume that 40 per cent of the permanent entitlement should be what's used in the calculation.
PN1159
The same with redundancy. We have assumed that - and this is quite generous for the employee - half of all of those terminations are redundancies. Again that's somewhat higher than we think is actually the case, but it's in order to ensure that we can defend the calculations. Once we have made those assumptions we can actually say, okay, well, this is an average of what the permanent gets, this is how commonly it arises, therefore this is what we need to put into the casual loading. In doing that, we say we have with the best precision possible identified what has been foregone with respect to notice of termination and redundancy.
PN1160
Public holidays. This is much easier to ascribe the monetary value to because there are a set number of public holidays a year. In the 38 hours' calculation, we just added up all the public holidays and assumed the casual didn't get them. For the employee working only 16 hours per year (sic), we pro rata'd it. Again, on an aggregate basis we say that's the most logical and rational approach to adopt.
PN1161
Then you come to the only other element - so once you have stopped there, our table has addressed everything that historically casuals got under the casual loading, but for one thing, and that is the compensation for the intermittency of the work, the unreliable hours, et cetera, and we say that if you look at what the casual misses out on at the moment, it's either 19 or 21 per cent; so it stands to reason that the final 4 per cent or 5 per cent is the compensation for the intermittency or unreliability of the work. As it so happens, that aligns quite well with what the AIRC decided in the Metals decision.
PN1162
In the Metals decision - and I may as well hand up some authorities to your Honours because we'll need to take you to the United Voice cases that we say have been erroneously relied upon. In relation to the Metals casuals decision, I think it's tab 2 behind your Honours' folders, but I think your tabs are different to mine - it's tab 5, I'm told; tab 5 of your folders. If I can take you to page 84 of that decision. At the top of page 84 is a table. That table represents the summary of the Commission's reasoning in relation to ascribing values to various elements of concluding what the casual loading should entail.
PN1163
I must say I spent considerable time with this table and it's a little difficult to follow, but they start at the top with a reference to lost public holidays, sick and personal days. You'll see in the far right column, because of what has been lost, they get 6.5 per cent loading. They compound the loading each time. Then they go to a loss of entitlements payable on the completion of 260 days.
PN1164
Now, I think that is a reference to leave and leave loading, because back then I think leave was only accrued once you had worked the year and not progressively. That's why there is the reference to completion of 260 days. They identify what the leave component is and you'll see that's the biggest. It's about 10 per cent, so they add - from 106.5 they jump to 116.6. They then talk about contingent benefits, being personal leave and long service leave and they add another 3 per cent.
PN1165
They then get to notice of termination and employment by the hour effects. That is because in these cases the employees are employed by the hour and therefore they can be terminated without notice. They add another couple of per cent and they get to a loading of 121.6. So they're saying that before you get to the difference between casuals and permanents about the intermittency of the work, the lack of certainty of hours, the loading should be 121.6.
PN1166
Then when they take in the final factor, which is what they call here "short time worked or paid hours differential determinate", they get to 125.88. They add about 4 and a half per cent. We say that is the element that is a deterrent - not a deterrent, that is an element that is designed towards compensating for the intermittency of the work so on and so forth.
PN1167
They refer to that more broadly - I'll just give you the paragraph references. It starts at paragraph 184 of the decision, on page 79, where they start talking about itinerance and lost time, et cetera. They effectively land at the position that because of all of this, a full‑time casual only ever works about 95 per cent of the hours that a full‑time permanent would and that's why they ultimately land on the decision that, "What we're going to give in relation to itinerance, lost time, deterrents, et cetera, is around about 5 per cent." That aligns with how we presented the entitlements. What we say is once you deconstructed the loading, you can see that it is all satisfied during the ordinary hours of work.
PN1168
VICE PRESIDENT HATCHER: Was the casual loading determined in that case then applied to the overtime rate or not?
PN1169
MR IZZO: In that case the Metals Award had a pre-existing provision that talked about the loading being payable effectively as an all‑purpose rate, I believe. So in that award, following the Metals decision, they would still have gotten a loading during overtime.
PN1170
VICE PRESIDENT HATCHER: We can be reasonably confident that that would have been known to the Bench when they made their decision?
PN1171
MR IZZO: One might say that, yes, but their decision in no way, when they talk about what it should be, has any reference to compensating in any way overtime hours. When they talk about what the casual loading is comprised of, their focus is exclusively on the ordinary hours of work, it seems. Now, they do say - and I think Mr Bull has made this point - that their decision shouldn't be - this is the irony of it; they say their decision shouldn't necessarily be extrapolated out over awards, but that in practice is effectively what happened and other awards picked up the same loading.
PN1172
The reason I rely on this Metals decision, I don't rely on it for the purposes of all the calculations about what is being lost because we can do that ourselves. I rely on it because there is one calculation that's difficult to do mathematically and that is, well, what do you give for just the essence of being casual, the itinerancy, et cetera? That's the only bit I rely on that decision for, because this is not the only decision that talks about the casual loading. Our submissions refer to decisions going all the way back to the 1920s. We can very easily discern what the purpose of it is. We can do our own calculations. The only bit that it helps to have the Metals decision for is to understand what you might give for the unreliability of the hours, et cetera, and that's primarily why we rely on the Metals decision.
PN1173
Having conducted this exercise over four sample roster scenarios that we say are relatively common - so you've got your casual working lots of hours, you've got your casual working a medium number of hours - we land at a position at paragraph 6.29 of our submissions where we actually conclude with some confidence that if you now go and apply the casual loading to overtime, you will now be over‑compensating for each of these entitlements. You will be compensating again on each and every overtime hour. Not just for the intermittency of the work, for all of those other features, and that is why we are urging the Bench not to undertake the course of action.
PN1174
The other thing I will say is the purpose of the Frost statement is actually very discrete. It is simply to show that the four scenarios we plucked in terms of casual hours generally, they were plucked based on ABS statistical data pertaining to casual employees generally, but the Frost analysis has identified that that is actually pretty much the same for casual employees in these awards, as well. The Frost evidence simply makes the ABS data also relevant to these three awards because his analysis shows casuals tend to work the same type of hours that we have identified in these tables.
PN1175
Now, while I'm on the reference to the data, the ABS data we relied upon was annexed as annexure A to our submissions. I would tender that separately. I can just hand up to the Bench the relevant printed out annexure A - not for the purpose of going through it now, but just so you've got a copy of it. It's just the raw data that was relied on in the tables.
PN1176
Now, I suppose just to close off this point, if the Commission accepts the submission that applying a casual loading during overtime will compensate casual employees by paying amounts that are not required to put them in the same position as the permanents - if the Commission accepts that submission but nevertheless wishes to accede to the United Voice's application, we would say that has two ramifications. One, it would mean that the purpose for which the loading has been included is now a departure from all the historical cases and that would be a significant step to depart in terms of why you're applying a casual loading.
PN1177
Secondly, it would start to offend a number of modern awards objectives because you start to bring into account questions about, well, there's a regulatory impact in terms of cost on the employer, it's not necessary in terms of remuneration required to address the needs of the employee because the permanent employees aren't getting these moneys, so why all of a sudden the casuals get these extra payments? We would say there are significant merit concerns start to arise if you accept that the loading will overcompensate once it kicks into overtime hours.
PN1178
The third contention that I feel compelled to address is that the unions have asserted that there is case law to support applying casual loading to overtime, so they say that what we're submitting is out of step with the existing industrial cases. We don't accept that at all and there's no way I can deal with that other than to go through each case, unfortunately.
PN1179
If I can start with the first case relied upon by United Voice; that is Registered Clubs Association v LHMU. That is behind tab 8 of the materials that you have been provided. This case was ostensibly about whether a casual employee when they reach their 10 years' service - whether they are entitled to long service leave payments based on their ordinary time rate with the casual loading or the ordinary time rate without the casual loading.
PN1180
The employer party, which was the Registered Clubs Association, argued that the causal loading was what the Long Service Leave Act describes as a penalty and they are to be excluded from long service leave payments. The union - which was I note represented by Vice President Hatcher, I believe - contended that the casual loading should be paid during long service leave because it's the money that they ordinarily get when they work their ordinary hours.
PN1181
To me that's not really a controversial suggestion. The casual is ordinarily paid their wages plus 25 per cent when they work their ordinary hours, so when they took their long service leave I see it as a rather uncontroversial suggestion that they should also get paid that amount, which was what was being advocated by the union. If I can take your Honours to paragraph 120 of that decision. It's about halfway through and that is the paragraph that actually outlines the relevant provision of the Long Service Leave Act - - -
PN1182
VICE PRESIDENT HATCHER: What tab is this?
PN1183
MR IZZO: What tab?
PN1184
VICE PRESIDENT HATCHER: Tab 8?
PN1185
MR IZZO: Tab 8. It's paragraph 120. Unfortunately, paragraph 120 goes over a few pages. It's not the first page that 120 appears on, nor the second. I wanted to take you to the third page. It's just before paragraph 121. The Commission is considering what the definition of "ordinary pay" means in the Long Service Leave Act. At subparagraph (b) I think it's noteworthy that it says:
PN1186
Ordinary remuneration in relation to "worker" means rem for that worker's normal weekly number of hours of work calculated at the time rate of pay fixed by the terms of that worker's employment.
PN1187
The Bench ultimately acceded to the union's view that the way this provision operated is that when you took leave you got your ordinary pay in casual loading, but that's uncontroversial because the relevant statute said you get the amount of money, rem, that you're meant to get for your weekly number of hours. Well, the casual would usually get their casual loading, so all that this case stands for is the proposition that under the Long Service Leave Act they usually get a casual loading during ordinary hours so therefore when they take long service leave, by reference to ordinary hours, they should get the casual loading. That's reinforced at paragraph 156 where they say:
PN1188
The intention of the Long Service Leave Act is to benefit employees. In my view a general reading of the Act overall manifests an intention that an employee during a period of long service leave shall not for that period of leave be financially disadvantaged when or as compared with the moneys actually received for 38 hours of work per week.
PN1189
There's nothing contentious in any of that, so what we say is the decision, whilst it may be good authority for the interpretation of the Long Service Leave Act, it says nothing about whether they should get a casual loading during overtime work. It just doesn't address that point and so we say that that decision is just not relevant. Indeed, my understanding is long service leave isn't payable on overtime hours, in any event.
PN1190
That's the first decision they've relied upon and we just say it has no application. The next decision relied upon is the AIRC award modernisation decision with respect to the Miscellaneous Award. That's behind tab 7 of your materials and they rely on one paragraph of this decision and that is paragraph 154 and it appears at page 24 of that decision, behind tab 7. All that the Bench said in this case was:
PN1191
We've decided not to make any alteration in the part‑time provisions or casual loadings despite suggestion from employers we should do so. The part‑time provision permits alteration in agreed hours by consent or on notice. We do think it is appropriate to exempt casual employees from weekend and other penalties applicable to full-time employees.
PN1192
That's a reference to whether casuals should get weekend penalties. It says nothing of the casual loading. Again, so it cannot be relied upon as being any authority for the propositions which United Voice now seek to advance. The next decision, and this is relied upon in a couple of respects, is actually the part-time casuals decision of which all three current members of these proceedings were on that part-time casuals decision. Didn't express that very well but I take it you understand.
PN1193
Have we extracted? We have. We've extracted the relevant provisions at tabs 1 and 2 of your folder of authorities. The first section I'd like to take you to is actually behind tab 2 and it starts at paragraph 881 of that decision. This section has been - this part of the decision's been quoted by both the ACTU and United Voice and we say it's just misconstrued. At 881 and following, the Full Bench was considering a claim by employers, effectively - well an attempt to vary - I withdraw that.
PN1194
It was an attempt to vary the award by the RTBU to make it clear how the loading was to be paid. In that award, the provisions set out at paragraph 881. That award said a casual employee receives a loading of 25 per cent. It then went on to say the loading constitutes part of the casual employee's all purpose rate. We say in that circumstance, that drafting is very clear. If it's part of the all purpose rate, then it is going to apply when penalties are applied to the rate of any kind and so that was the pre‑existing scenario considered.
PN1195
Some employers tried to argue the loading isn't payable during overtime. We say the Full Bench correctly pointed out well that's not right because it's part of their all purpose rate and at paragraph 890 the Full Bench said:
PN1196
The description of the loading as being part of a casual's all purpose rate can only be taken to mean the loading remains payable in all circumstances when a casual employee performs work, including overtime work, weekend work, public holidays.
PN1197
Again, I see that as entirely uncontroversial proposition. 891, the Bench goes on to say:
PN1198
We therefore reject the rail employer's submission that the Rail Industry Award does not currently provide for a casual loading to be payable in situations where a penalty rate is also payable.
PN1199
Then at the bottom of that paragraph, the Bench says 'No party's submissions' - sorry, the Bench said that:
PN1200
Interpreting the casual loading as an all purpose rate might be interpreting it as meaning the penalty rates to be calculated cumulatively on the casual loaded rate not on the base rate
PN1201
and a kind of compounding approach, they're my words, and then the Bench goes on:
PN1202
No party submitted that this was the correct approach and the award variations proposed by the RTBU and the rail employers both involved the casual loading and penalty rates being separately calculated. We consider as a matter of general principle that this is the correct approach.
PN1203
I don't take issue with any of those comments because they are all referable to an award which made it very clear that the loading's part of the all purpose rate. It cannot be relied upon as authority more generally for how loadings are to be paid at large. That wasn't the focus of the Bench. The Bench was looking at very specific drafting, so again we say that the reliance on this Rail Award is misplaced and doesn't take the United Voice's case any further.
PN1204
We then come to, I think, the final case referred to which is, again, part-time casuals. It's behind tab 1 of your materials and it relates to the General Retail, Hair and Beauty, Fast Food Casual Awards and it starts at paragraph 646. In relation to this award, there was a claim by the SDA to introduce overtime in the Retail Award, Fast Food Award and Hair and Beauty Award where employees worked in excess of certain number of ordinary hours in a day or week, so it's a new overtime provision.
PN1205
It was resisted by employer parties, including employer parties here today, for instance NSWBC, Ai Group, but ultimately it was successful. The Full Bench decided to apply the overtime entitlement to intra-day/intra-week overtime. In making that decision, the Full Bench awarded the overtime entitlement. It noted at paragraph 674:
PN1206
As with the Hospitality Awards, the three awards in question here all provide for overtime penalty rates to be paid to full-time and part-time employees. There's no submission that the provision of overtime penalty rates for full-time and part-time is not necessary to meet the modern award's objective. There's no evidence nor has it been submitted that casual employees under the awards are not subject to the same disabilities.
PN1207
The Bench made a principal decision that if a permanent suffers a disability working overtime it appears to be the same as the type of disability suffered by the casual so why shouldn't they get the same penalty. That appears to be the inference and so the same penalty was applied. Again, I have no issue with any of that reasoning. It all seems relatively uncontroversial and so it is not - and none of that's inconsistent with our case. There's one ‑ ‑ ‑
PN1208
VICE PRESIDENT HATCHER: Well in the part-time casual case in respect of the Retail, Fast Food and Hair and Beauty Awards, we said explicitly at 677 that they would get overtime penalty rates and the casual loading and they ‑ ‑ ‑
PN1209
MR IZZO: That's correct.
PN1210
VICE PRESIDENT HATCHER: Are you inviting us to re-visit that are you on a question of - - -
PN1211
MR IZZO: Paragraph 677 is the only section of the decision that addresses the issue that we're now currently ventilating, if you like, which is that the Bench decided in this case to apply the loading to the overtime rate. What I would say about that is a number of things. (1) The arguments that we're advancing today were not advanced in relation to those three awards. (2) The decision in part‑time and casual was about these three awards and these awards only and accordingly - and sorry, (3) the resistance, as I understood it primarily - there was a lot of focus on whether they should or shouldn't get overtime as opposed to how the loading should be applied but in any event, paragraph 677 could only really stand for the proposition that that's how those three awards are to work.
PN1212
It does not appear the Bench sought to make some general statement about casual loadings or some general espoused ‑ espoused some general principle about loading should always be paid on overtime.
PN1213
VICE PRESIDENT HATCHER: Well that's undoubtedly true but the approach you're raising with us at the level of principle would require that to be re-visited surely.
PN1214
MR IZZO: Well I think - - -
PN1215
VICE PRESIDENT HATCHER: If this is a hard and fast principle which needs to be established - - -
PN1216
MR IZZO: I think the principle you're - - -
PN1217
VICE PRESIDENT HATCHER: - - - as well as the Metals Award one would presume.
PN1218
MR IZZO: If this is a principle that you accept with respect to these three awards, then firstly it really relates to these three awards and they're the awards you're currently considering. Whether any party wishes to make an application to vary the other three, at this stage there's no application. They've already been reviewed in the four yearly review. I'm not necessarily sure it follows that we have to go and open up all those other awards and as I've said about our position more generally, where there are industry specific reasons why an award's named in a particular way we're not proposing to change that but where it's currently not payable or where it's just not addressed, we think that regard should be had to these principles.
PN1219
VICE PRESIDENT HATCHER: Well in paragraph 198 of the Metals Casuals decision, this is immediately after the table you took us to, the Full Bench having set out a table then specifically eschewed that approach and said it's not to be dealt with on the basis of an exact or precise quantification of different components. That is, you're advancing approach which, having looked at, they specifically reject it.
PN1220
MR IZZO: Well I'd say two things about that, your Honour. If you just bear with me one moment and I'll just bring up the paragraph. The first thing I would say is that, and this accords with what I've just said earlier, at paragraph 199, which is the next paragraph on, the Full Bench sought to be clear that they did not necessarily view that their reasoning in this case should be applied at large to the award system. They were just dealing with the Metals Award, so that's the first thing, so there is a limitation or there should be some constraint on the extent of weight we give to this one decision which said don't rely on this as a general principle.
PN1221
(2) What I would say is when you deal with the question of the casual loading, you should actually form a view as to what it's for and we say, based on our submissions, it's very clear what it's for. It's for essentially compensating these four or five permanent entitlements casuals don't get and we say once you know what it's for, it is actually quite easy to do a calculation to work out what their value is so once you've done that, you are in a position to try and ascertain what it should be and so ‑ ‑ ‑
PN1222
VICE PRESIDENT HATCHER: Just as a thought experiment, if you have a full-time employee who works 38 hours a week over a four week period, they've accrued, what, 152 hours towards their annual leave entitlement, correct?
PN1223
MR IZZO: Yes.
PN1224
VICE PRESIDENT HATCHER: That's a guarantee by the NES.
PN1225
MR IZZO: That's right. Once they've worked the month there's a certain entitlement that they have accrued, yes.
PN1226
VICE PRESIDENT HATCHER: Under these awards, and assume a casual's just working irregular hours, they're not rostered, if they - - -
PN1227
MR IZZO: Sorry, irregular hours?
PN1228
VICE PRESIDENT HATCHER: Irregular hours, so all sorts of hours they're called in for long days or sent home, if in three they work 152 hours, that is 51 hours a week, and then on the fourth week they work nothing then under your preferred approach and under the way the award works now, as I understand it and tell me if I'm wrong, they would accrue three lots of 38 ordinary hours towards a - - -
PN1229
MR IZZO: Yes, but they would accrue three lots of three weeks because their ordinary hours are less but they would be getting overtime, more overtime than a permanent.
PN1230
VICE PRESIDENT HATCHER: Yes, but the overtime's - I think we agreed the overtime's not there to compensate for lack of annual leave. It's there to compensate for unsociable hours.
PN1231
MR IZZO: Well that's right, that's right.
PN1232
VICE PRESIDENT HATCHER: They work the same number of hours but they get a lesser entitlement to annual leave notionally.
PN1233
MR IZZO: Well not necessarily, your Honour. That's the difficulty with how annual leave's paid, to be honest, because when it comes to taking it, if they were working that same pattern they get - the permanent who works 38 each week over four weeks would get a certain payment over those four weeks, that would effectively reflect four weeks pay. The casual, if they were to get the leave entitlement, when one looks at what payments they usually get over three weeks, that would be the same as what the permanent got over the four, so I think if they were theoretically to take the leave they'd eventually get paid out a broadly similar amount. I'm just trying to - - -
PN1234
VICE PRESIDENT HATCHER: Why is that?
PN1235
MR IZZO: What's that, sorry?
PN1236
VICE PRESIDENT HATCHER: But on your analysis they should only get paid out for ordinary hours.
PN1237
MR IZZO: That's right and you're saying they work less ordinary hours in three weeks, they must because the spread of hours presumably constricts because they're working on 38.
PN1238
VICE PRESIDENT HATCHER: That is, the general point that sort of little example illustrates is that the amount which a casual accrues towards annual leave, on your approach, would vary depending upon the way in which the hours are worked and the pattern in which they're worked. You could have a casual could work the same hours as the permanent, 30 hour week, and they'd get notionally the same annual leaves that they're loading but if they worked a different pattern which involved more overtime hours and less ordinary hours they'd get less.
PN1239
MR IZZO: Yes, but they'll - well my response to that would be - - -
PN1240
VICE PRESIDENT HATCHER: Just to finish the question, as we've discussed, the overtime is not there to compensate them for the loss of the annual leave.
PN1241
MR IZZO: Yes. I may need to take this on notice but my initial response is look, if you were going to exactly look at - I have two responses to it but the first is if you're going to look at that specific scenario, the casual employee, because the loading is pre‑determined, in actual fact now, if that happens now, they won't get less because the loading's effectively going to overcompensate them in that scenario because we've already worked out they're getting the same leave as the permanent. We're paying it to them so the fact the casual theoretically should get less, well they don't and so that's just a windfall gain to the casual in the way the loading is paid currently.
PN1242
I think the second thing I would say is that, and I see your Honour's reaction, the reason I'm saying that is if right now a casual works three weeks - - -
PN1243
VICE PRESIDENT HATCHER: Well currently they don't get on overtime so it's not a - - -
PN1244
MR IZZO: In another award where they're getting a casual loading. If they work three weeks condensed, your Honour points out that if they had access to annual leave, the amount of leave they get would be less because they're doing less ordinary hours but the loading's been pre‑calculated, it's been pre-paid and so the fact that they've worked a more condensed pattern, no one goes and says 'We're now going to give you 24 per cent', so in that scenario what is actually happening now is they're probably getting even more than they would need but I suppose the second submission I would make is that absolutely you're going to probably be able to pick individualised examples which might have some divergence which is why for some of this you need to do it on an aggregate basis and that is what we have sought to do because if you're going to apply a loading to an industry, you can only ever deal with issues in aggregate because there might be a variety of different individual scenarios that arise, much like Mr Bull's calculations that we need to address at some point, but I think on aggregate, when you consider the concepts, giving them, broadly speaking, an amount to satisfy the leave that they would get if they work 16 ordinary hours or 38 and being satisfied that's about what the permanent would get, we think that's the best you can do and the best logical and rational approach available.
PN1245
VICE PRESIDENT HATCHER: It's an approach which also suggests that annual leave is only a purely monetary benefit. That is, it is a benefit needed only in dollars and cents and not in terms of the capacity to have four weeks rest and recreation with a guarantee that when you come back your job will still be there.
PN1246
MR IZZO: But I think the reason we take this approach though, your Honour, is we've gone through the cases back to the 1920s and that's the approach they seem to adopt. They look at the monetary value and it was five shillings and they said 'We don't think that's enough because if you look at the amount the permanent would get they should be 10 shillings', so on and so forth. That appears to be how it's always been done and, again, that's why I say if we're going to take a different approach well the Bench needs to conscious it's a divergence from the authorities because my understanding of the authorities, and we've quoted them in the submissions, is that they looked at what the value of entitlements lost was just in a monetary sense and sought to compensate that and do no further.
PN1247
VICE PRESIDENT HATCHER: Well that may be true to a certain extent but as we've pointed out, the Metals Casuals decision is the foundational decision for remunerating casuals in the modern era and it, as we've gone through, eschewed that mathematical approach - - -
PN1248
MR IZZO: Well it's interesting you say they - - -
PN1249
VICE PRESIDENT HATCHER: - - - and resulted in an outcome where they got it on overtime.
PN1250
MR IZZO: But your Honour, it's one thing to say it was eschewed but that's exactly what they did. They went and did the mathematical calculation, that's how they got to 25 per cent so in each - if we go through and the Bench, in due course, looks - the analysis starts at page 59. It's headed subject to - heading 12, The Claim for a Casual Loading of 30 Per Cent, it was obviously sought, 30 per cent was sought. They go through each entitlement, work out the mathematical amount then land at what component it should be in the loading and that's exactly what they did and that's how they go to 25 so I think their comments need to be understood in the context that they said 'Well, we're not saying that the exact or precise quantification should be welded onto the determination' but that doesn't mean that's not what they did.
PN1251
That's exactly what they did and the analysis starts at page 59 and it goes all the way through to page 84 and that's how they get the number so I don't think too much can be read into that because that's the very process they took and, as I say, the only element I say which involves an evaluative, more qualitative assessment is the last bit which is compensation for intermittency and that's really the main part that I rely on in this decision because I can't point to anywhere else where they ascribe a value to that intermittency, itinerant work type disability but the Metals Casuals certainly does. It gives it a value of about 4 per cent.
PN1252
VICE PRESIDENT HATCHER: Mr Izzo, we need to move on because there's other parties who want to make submissions.
PN1253
MR IZZO: I'm conscious of that, your Honour. What I would say about the part-time casuals decision and specifically paragraph 677 is this, of all the authorities that you've been taken to by both the ACT(sic) and United Voice, there is - when you go through all the white noise there's actually only one that even touches upon this issue and it's actually part-time casuals paragraph 677 and we say that's not a detailed consideration of the general principle and that we didn't advance this argument in that hearing and so it shouldn't stand for a general principle that outweighs the history of the provision that we've taken the Bench to.
PN1254
There is one other decision, I apologise, that I have to address and that is Australian Nursing and Midwifery Federation v Domain Aged Care. That decision is behind tab 6 of your materials and that decision was a decision of a different Full Bench in an enterprise agreement approval scenario. In that case, at paragraph 19, the Commission formed a view that in the Nurses Award overtime penalties are paid on the loaded casual rate.
PN1255
It's quite clear from that decision that the Commission formed that view based only on the drafting of the language of that particular award, the Nurses Award. There was no principle analysis conducted. There was no general principles argued. The employer in that case actually articulated a view that the casual loading - - -
PN1256
VICE PRESIDENT HATCHER: Mr Izzo, has someone cited this case against you?
PN1257
MR IZZO: Yes.
PN1258
VICE PRESIDENT HATCHER: Okay.
PN1259
MR IZZO: I believe United Voice have and ACTU. The employer in that case actually argued that the casual loading should be added accumulated to, or added onto, the overtime penalty whereas the employee or the union argued that should be compounded. The Full Bench formed a view that it should be compounded based on the natural drafting of the Nurses Award. We disagree with both that it should be compounded and perhaps whether it's payable at all. That's the language of the Nurses Award. We think that it can't stand for analysis as any point of general principle and, indeed, given that there wasn't significant consideration at all of how the award provisions came to be, it was simply analysis of the language of one clause.
PN1260
I'm not sure it stands as any general proposition and we say it doesn't constrain the Bench in this case and that's what we say about that Domain Aged Care case. If I can then come to the fourth contention, which is that the Productivity Commission report has been misunderstood. It is clearly being relied upon and so I do wish to take the Bench to the specific section that has been misread. Am I correct in understanding you might have copies of it?
PN1261
VICE PRESIDENT HATCHER: I'm not sure. We could cut this short. The section from memory was addressing what happened in the Restaurants Award on Sundays.
PN1262
MR IZZO: I think they called them the - the self services award, the Hospitality, Retail, they called the HEREEC, there was about four or five of them.
PN1263
VICE PRESIDENT HATCHER: Yes, but I thought that comment was made in reference to the adjustment to Sunday penalty rates in the Restaurant Award whereby for certain classifications it was absorbed into the Sunday penalty rate. Am I wrong?
PN1264
MR IZZO: I think it's - I'm not sure that's quite the extent of the comments. The comments were, and I don't need to take you to it, I can just give you the references, but the specific comment was this, and much has been made of it, 'The representation of casual weekend penalty rates in awards can be confusing because they're often described as inclusive of casual loadings despite significant difference between a casual loading and a premium for asocial times of working. Conflation of casual loading and premium rate for weekend work can hide the anonymous treatment of weekend rates for casuals in some awards'.
PN1265
They then go on to say 'For neutrality of treatment' and this is the sentence that the United Voice sings from the hill tops with, 'For neutrality of treatment, the casual loading should be added to the penalty rate of a permanent employee when calculating the premium rate of pay over the basic wage rates for weekend work. This would make an employer indifferent at the margin between hiring a permanent employee over a casual employee'. That opinion is relating to ordinary hours of work on weekends. It does not relate to overtime.
PN1266
They are talking about ordinary hours and to make that proposition good, one needs to have reference to a different section of the Productivity Commission report and it's the beginning of chapter 9 which Mr Bull has helpfully provided to the Bench, I believe. Chapter 9's the beginning of the penalty rates discussion and they say penalty rates can be - the second page of it says shift loadings, weekend and evening pay premiums, penalty rates sometimes are also called overtime rates and they talk about how you need to be very clear what you mean when you mean a penalty rate.
PN1267
They say 'This chapter' - so this is page 380 of the Productivity Commission, 'This chapter', that is chapter 9, 'focusses on penalty rates for long hours and night work' and explains why the Productivity Commission concludes that preserving the status quo is largely justified. The next six chapters have a quite distinct orientation. They concentrate on 'Daytime penalty rates on weekends for customer focussed industries such as retailing and restaurants where social changes and consumer preferences have increasingly prompted weekend trading. The application of penalty rates for weekend rates requires the assessment of quite separate empirical, analytical and policy issues'.
PN1268
What they're saying is we're comfortable with the overtime rates, that's what chapter 9 deals with, but when you get to chapter 10 onwards that's about weekend penalties for ordinary hours and we think they ultimately think that they're too high so they draw a distinction and then this is absolutely made definitively clear on page 381 because they put a table in, in a multi-coloured table, which shows the different types of penalties and they say in this multi‑coloured table at page 381, ordinary daytime work on the weekend is given a code which is code B and what they say is - and sorry, work, overtime work, is given code A.
PN1269
What they then say at table 9.1 is 'A describes the focus of this chapter', chapter 9, 'premium rates that relate to overtime work at any time of the week', so chapter 9's about overtime. 'B', which is where we're talking about weekend ordinary time, 'describes the focus of the following chapters, penalty rates that relate to normal daytime hours worked on a weekend'. They're making it very clear that the chapters that follow chapter 9 dealing with ordinary hours on weekends and that's where the recommendation arises.
PN1270
The recommendation is not about overtime rates at all and the United Voice has completely misconstrued that recommendation. It doesn't support them at all. What's more than that, that recommendation is then referred to in the penalty rates Full Bench decision. The penalty rates Full Bench decision, and I can give you the reference, I might give you the reference in a moment, that decision is dealing with only applications to change weekend penalty rates for ordinary hours on weekends.
PN1271
It is in that context that they varied some of the penalty rates and it is in that context that they refer to the Productivity Commission but, again, it's not about overtime at all and the reference for the penalty rates comments, where they didn't really endorse the Productivity Commission view I might add, they just simply said 'Well their view might go towards simplicity of understanding that modern awards framework', they didn't say that they agree with the view, but their comments are at (2017) FWCFB 1001 paragraphs 308 to 351.
PN1272
Nowhere in penalty rates, nowhere in Productivity Commission report did they actually say casuals to get a loading as well as the overtime rate. That's just a fiction and that's how we dispense with that particular argument. The fifth contention which we wish to raise is that there has been no evidence filed in support of this claim to actually now add the loading. We heard from Professor Muurlink and whilst the professor's report deals with some substantive matters, and we don't challenge that, it is entirely 100 per cent unhelpful for these proceedings.
PN1273
His evidence stands for the proposition that long hours of work give rise to adverse social and health consequences, predominantly health I should say, and that therefore one could extrapolate there should be some kind of compensation for long hours of work, i.e., overtime. His evidence supports a claim for overtime, but it doesn't deal with casual employees at all, and certainly not the casual loading.
PN1274
There is only one sentence in all of the evidence that was filed by Professor Muurlink about casuals, one sentence. And that sentence was a sentence that said casuals appear to have less of a sense of control. He confirmed that he was talking about working hours generally, not overtime hours. He confirms that the study he relied upon is effectively not worth the paper it's written on. Now, I am using a bit of poetic licence, but even the Professor conceded and I don't have the exact words, very small sample, very difficult to rely on it. He conceded you cannot generalise the findings of that study for hospitality in general, for casual employees in general. The professor made it very clear that when he was preparing his report he didn't specifically consider the notion of casual overtime versus permanent overtime. He was just generically commenting on casual hours.
PN1275
So in essence what you have is a report that really stands for this proposition, if you work long hours it gives rise to disabilities and the only thing you can draw from that is that you might have an overtime rate. You cannot draw some conclusion about whether casual employees should get loadings. And, again, I don't have all of the professor's responses, but I think any analysis of his cross-examination will reveal his evidence, it doesn't stand for anything in relation to casual employment.
PN1276
I think that's all I had to say about that. The last matter I wish to address is effectively a miscellaneous number of discrete propositions that have been advanced. I'm hoping to deal with them very briefly. One though is - I mean, and this is not surprising given the way this case has been run, but there is now quite clearly a new basis for the United Voice claim that was not apparent seven days ago. It is very apparent from how Mr Bull opened his submissions that the essence of their case, and I really do have to point out this wasn't heard of seven days ago but the essence of their case appears to be this, if you look at some tables you will see that because when casuals work weekends they sometimes don't get the casual loading, these are ordinary hours, mind you, because they don't sometimes get the casual loading when they work weekends when you look at a roster cycle we need to bump up the casual pay to ensure they get the loading during overtime because they're not getting the loading during weekends and if you look at Mr Bull's tables what that will show is they're not getting 25 per cent more than the permanent, because if you look at some of his rosters their loading has been absorbed on the ordinary time weekend rate. That's how I understand his latest submission.
PN1277
The first position, what I understand to be all the employees, is we want to have a very good look at these rosters, because I don't know if they're reflective and I think, even Mr Bull put that one of his rosters they only did it over four days because that's when permanent kicked into overtime, so I think there has been some level of selection in the rosters, but we will need the opportunity to respond to that.
PN1278
But in essence, I mean, this Bench has been concerned about him re-litigating the part-time/casuals case. He's not re-litigating that case. He's re-litigating the penalty rates case, because what he's saying is the penalty rates for casual in ordinary time aren't sufficient, so you need to go and over-compensate somewhere else. Well, that is definitely something that's been determined. There was a three year hearing and a 500-page judgment on what the penalty rates during ordinary time should be. And if Mr Bull is advancing a contention that they are insufficient that is not a matter that should be ventilated before this Bench. Given the extreme effort, the considerable costs, time, effort that went into the penalty rates case it is not appropriate to re-litigate the penalty rates for ordinary time worked which is effectively what Mr Bull is doing. So that would be the first thing I have to say to this roster analysis, but we will in 21 days come back with anything further.
PN1279
The second thing that has been advanced that I would like to clarify is that - just on the first point I think I would like to correct, there's an error in Mr Bull's submissions in any event. So part of Mr Bull's thesis is that the casuals don't get their loading during ordinary weekend times. He's actually misconstrued the restaurant award, I believe. So if one looks at page 15 ‑ ‑ ‑
PN1280
VICE PRESIDENT HATCHER: You can deal with this in your response if one is required, Mr Izzo.
PN1281
MR IZZO: Yes, okay. The next point I have quite helpfully dealt with there is some suggestion that I wish to clarify in the United Voice submissions that ABI and NSWBC are seeking to lower causal loading and that we shouldn't be allowed to do so. There is no position advanced by our clients that the loading should be lowered. We're simply saying it adequately compensates so don't increase when it applies.
PN1282
The roster modelling we're going to deal with. The Reserve Bank report I believe I do have to make submissions about. It was filed last night but there's a few things that are obvious on the face of this that mean it's entirely ‑ ‑ ‑
PN1283
VICE PRESIDENT HATCHER: Mr Izzo, does it contain anything in it that's relevant to the issue of casual loading and overtime?
PN1284
MR BULL: Yes.
PN1285
VICE PRESIDENT HATCHER: No, well, I want to know what Mr Izzo's is, because, see if the answer is no then we can move on, can't we?
PN1286
MR IZZO: They certainly don't deal with that, but I think they deal with the difference between what casuals get paid and what - I'm trying to see if I can respond to your question without making a brief submission. I think I have to. The essence of the report is this, casuals, when you look at what they get paid, their take-home pay, they only end up with about nine per cent - I don't know what the figure is, but it's roughly nine per cent more than permanents something like that, but that's because of what they've looked at. They've looked at workers across all industries, workers who are award covered and not award covered. They haven't looked at any employees under the age of 21 which is where all your casuals in hospitality are.
PN1287
As I said they've not limited it to award wages. They've limited it to all wages and they've said, what do casuals get. The data sample is just so far removed from the people being considered. It's no surprise they're coming up with a different outcome. I mean, everyone paid above award, the casuals might get the same as a permanent, I don't know.
PN1288
VICE PRESIDENT HATCHER: There's been studies previously which has shown exactly the same thing, so that's not new.
PN1289
MR IZZO: Yes, but it ‑ ‑ ‑
PN1290
VICE PRESIDENT HATCHER: I'm not arguing with you, Mr Izzo.
PN1291
MR IZZO: Yes.
PN1292
VICE PRESIDENT HATCHER: I'm just telling you that for example there's previous studies which show, for example, that permanent employees tend to get paid over awards more than casual employees which is the substantial reason for the difference ‑ ‑ ‑
PN1293
MR IZZO: So what ‑ ‑ ‑
PN1294
VICE PRESIDENT HATCHER: ‑ ‑ ‑or the lack of difference.
PN1295
MR IZZO: Precisely. And they've done this aggregate analysis across the whole Australian workforce. It's just - I mean, our - I was going to object, but it's now not being not as evidence, but I just think it is so far removed from these proceedings that it shouldn't be considered on the basis of relevance. That was what my submission would've been had it been tendered. It's now just in the ether as something that United Voice is referring to, but we just say it's irrelevant.
PN1296
That is everything that I wanted to say, and I appreciate I've taken a bit of the Bench's time, save for one comment, and that is that both Mr Bull and the ACTU are saying that our arguments of general principle should not be made in these proceedings. As I understand it, I need to respond to that.
PN1297
VICE PRESIDENT HATCHER: Yes, all right.
PN1298
MR IZZO: Unless it's been withdrawn by Mr Clarke which I don't think it is, I think I - I haven't yet responded so would need to. What I would say in relation to that submission is to just draw the picture of what we are actually doing as NSWBC, ABI.
PN1299
VICE PRESIDENT HATCHER: I thought your short answer was you're responding to the case mounted by United Voice, that is, you've raised the contention in response to the specific case mounted by United Voice.
PN1300
MR IZZO: And we've raised it within the timetable in accordance with the directions.
PN1301
VICE PRESIDENT HATCHER: Yes, all right.
PN1302
MR IZZO: That is our response. Your Honour has done a far more concise job than I was going to. The only other thing I would say is there's some reference of the issues estoppel and action estoppel. We've not agitated this argument before in the award review. We can't see it being agitated previously in the award review. As I said of all the authorities there's one paragraph of the parts of the casual decision. We're very far from where an issue of estoppel or action estoppel would apply even if that's available in the four-yearly review.
PN1303
There's one final thing, there's a submission by the ACTU that says our position is inconsistent with what we've previously said because we previously said that casual loading should be viewed on a case by case basis or an award by award basis. I don't resile from that. I think that's a very good idea to review on award by award basis, but we are able to raise matters of general principle in dealing with the awards, particularly where something new is being sought or where the award doesn't specify how the casual loading is to be applied. They're our submissions.
PN1304
VICE PRESIDENT HATCHER: How long do you think the remaining parties will take to make their submissions?
PN1305
SPEAKER: I'll be very brief. Mainly why I have written submissions and ‑ ‑ ‑
PN1306
VICE PRESIDENT HATCHER: Mr Moore?
PN1307
MR RYAN: I'll be about five minutes, your Honour.
PN1308
VICE PRESIDENT HATCHER: Mr Moore?
PN1309
MR MOORE: I think I'm probably going to be half an hour to 45 minutes.
PN1310
VICE PRESIDENT HATCHER: We might have a short break for about 10 minutes then we'll resume to complete the submissions.
SHORT ADJOURNMENT [4.26 PM]
RESUMED [4.44 PM]
PN1311
VICE PRESIDENT HATCHER: All right. Are you next, Mr Ferguson?
PN1312
MR FERGUSON: As my group has already filed comprehensive submissions I won't need to summarise or take you through those submissions. I want to just emphasise one point and then clarify an issue, unless there are any other questions. In terms of the point of emphasis, and I know it's come up already from the Bench's perspective and amongst the parties, is that obviously in the course of the Casual Employment Common Issues proceedings, or as a consequence of it, the Commission has already made quite profound changes to the way the overtime provisions in this award work and apply to casual employees.
PN1313
Now, we say in that context the Full Bench ought not form a view that its assessment of what was a fair and relevant safety net necessitates it now further amending the outcome it reached, when it reached an outcome which was effectively granting the union's claim. And the element of the modern award's objective that reinforces that submission is, firstly, the need to take into account, or the need for a stable modern award system, which we say quite powerfully speaks against the proposition that within the course of the same review the award could be changed to deal with the same sort of subject matter in different ways.
PN1314
And we say that that's particularly the case when regard is had to the sort of case that has been advanced and in particular the evidentiary case that has been advanced now, and this has already come up. We don't have evidentiary material that has been led to say how the new provisions that came into effect on 1 January 2018 are actually operating in practise. And that's the sort of issue that we say the Full Bench would want to give detailed consideration to before it got reviewed the conclusion it has already reached about what constitutes a fair and relevant safety net.
PN1315
And we say that absent that sort of material, the proper course of action would be to form a view that's it is not necessary to now further amend the award in order to be satisfied that it meets the modern award's objective, and for that reason, reject United Voice's claim.
PN1316
VICE PRESIDENT HATCHER: All right. And does that necessitate instilling within it the level of principle, as some of the parties have abdicated?
PN1317
MR FERGUSON: Well, that doesn't necessitate that. We say that - if you're satisfied on that basis alone then you don't need to rule on all of those issues of principle, because the circumstances of this award warrant you not making a further variation, and you don't need to get into all of that examination, and that - and as I said, that would completely conclude the issue. And we do feel there is a need to look at this on an award by award basis and the context of each individual industry.
PN1318
Because this is the perfect example, there are relevant circumstances that perhaps warrant a different approach being taken at the moment. Look, the point of clarification, just to make it easier for the Bench is in relation to paragraphs 104/106 of our written submissions. We there raise the spectre of the role of section 156(3), which is the limitation on the Full Bench varying minimum award rates and the context of the 4 Yearly Review unless a case is made out on work value grounds for such a variation.
PN1319
Now, and we criticise United Voice for not dealing with the work value reasons justifying their claim. I'll say this: I think there might have been some misunderstanding of what the union was seeking to achieve through this variation as the clause sits in the award. We had thought that what the union was seeking to do was to increase the casual loading, which is part of the minimum award rates for the purpose of our relevant section, so that they were payable on overtime in circumstances where they were not otherwise payable under the instrument.
PN1320
But we accept the point that the Full Bench has already said in the Common Issues proceedings that the intent is that the penalty rates are inclusive of the casual loadings, and in effect, the casual loading has always been payable, and at least the intent behind that decision was that it continues to be payable. And what we now understand is that in effect what the union are seeking to do is increase the overtime penalty rate for casuals. Now, if that's what they're actually seeking to do then no work value issue needs to arise pursuant to that section. There's no sort of technical reason why the claim couldn't be granted, but still there's the merit-based objection. Look, that's all I was go through. We trust the Bench will go through the detail of our material otherwise. Unless there are any further questions?
PN1321
VICE PRESIDENT HATCHER: No, thank you. Mr Moore, were you next? Mr Ryan?
PN1322
MR CLARKE: If it please. In the morning session I raised an issue as to what was the parameters, if I can put it that simply, of the statement that was issued by the Full Bench on 4 December 2017. And I raised that because at the time that the statement came out, there was also the matters going on leading to the finalisation of the determinations on the variations to the three Hospitality Awards arising from the earlier case.
PN1323
What was understood by my client when it filed its submissions was that one of the issues, and one of the questions were those questions that I raised this morning, that is, whether or not the provisions of the award as they currently stand were ambiguous in those three respects. I think the word that was used in attachment A to the statement was unclear. Well, there can be no lack of clarity in relation to the three Hospitality Awards - and I'll restrict my comments in the main to the Clubs Award - because the Full Bench that determined the new entitlement determined quite clearly when the entitlement was to apply, and what was to be the payments to be made.
PN1324
And as I raised this morning, your Honours, in terms of paragraph 7 it became a matter of interpretation of paragraph 7 of the statement as to whether the applications that were to be made in terms of this review were basically at large, or whether they were conditioned by the approach in attachment A, that is, that if there were clauses that were considered to be unclear in various respects, I'd be satisfying one or more of those conditions in attachment A.
PN1325
There was then the ability to make an application if those matters could not be agreed otherwise, if I can put it that way, by way of a consent variation to come before this Full Bench as part of the review process and to have those matters determined. And in determining those matters what would have been a relevant consideration would have been the history of the award, and when I say that I have in mind what occurred in the earlier case in relation to the rail provisions where both of the parties had views which were neither of them were correct and that then there was essentially an approach that was determined by that Full Bench to what would be the appropriate way in which those provisions would apply within that particular award.
PN1326
I start the submissions this way because if you compare the submissions that were filed by Uniting Voice on 13 May 2019 with those that were provided late on Friday, a quite different case is presented, in our respectful submission. What the case is, is essentially as was just described by the representative of the AIG, that it is really a case that is brought to increase the casual overtime rates within the awards, which have just been determined not more than about 18 months before and operative from 1 January 2018.
PN1327
Now, why do we say it's a different case, your Honours, to the Bench? It's a different case because of the amount of material that has been filed, because the original directions were that all submissions and all material that was to be relied upon were to be presented by Uniting Voice in relation to the three awards, and the other awards that it seeks variation to on 14 May 2019. Once the submissions had been forthcoming from a number of the employer parties, there seems to have been a recasting of the case, which is demonstrated by the amount of additional material that has been filed in the period, essentially from 19 July and right up to yesterday afternoon.
PN1328
And so what has really happened in relation to the employers, and particularly the hospitality employers, is that their prior submissions have largely been rendered otiose, and they are now facing a different type of case. And I heard, with terms of the rosters, are they just examples or not, there are propositions put in the submissions or the outline by Uniting Voice repeated today, that say as a result of an acceptance or an acceding to the claim, matters will be ameliorated in certain ways because the employers will act in certain ways.
PN1329
Now, none of that was foreshadowed in relation to any aspect of this particular review of the three awards in question. If I was to use somewhat dated terminology, the essential way in which the Uniting Voice case can be conceived of, given the way in which the Fair Work Act applies, we start with a position under section 284, and that is the casual loading is found in there as part of the minimum wage setting arrangement.
PN1330
And so far as an argument that was being put forward, that there was some challenge to the existing level of casual loading, that is an impossibility in these proceedings. And any of the arguments brought forward as to whether the 25 per cent is the casual loading or not and what comprises it is somewhat redundant, because all of the decisions we would say that would be relevant to this Full Bench in terms of following it, is that the 25 per cent loading has been, since the introduction of the modern award systems, the standard and uniform loading. And that if there ever is going to be a challenge to that loading it would be brought in minimum wage case proceedings either upwards or downwards.
PN1331
And so to just sort of paraphrase the position, the casual loading becomes a given. The casual loading, we could say, is compensary. It is designed to compensate a person who is a particular type of employee, a casual employee, for detriments when measured against another type or class of employee, principally, full-time employees but also in certain circumstances, part-time employees. And so in terms of the approach that I just started overall, without there being any award provisions that would require any greater amounts of pay to be made at different times or on different days, a person who is a part-time or a full-time employee will get their base rate assessed out of the minimum wage determination in terms of base rate, and the casual employee for all hours worked will get the base rate plus a casual loading.
PN1332
And if one views it as simple as that, wherever there are going to be increases made to compensate for other disabilities, and I think it would fair to say that in relation to the system of awards that are now put in place, there is no deterrence element in terms of a strict penalty, the Full Bench has appeared to say that all of the elements in terms of it are disability type of payments, even penalty payments, to make sure that any adverse consequence - and I use that term just as a catch-all - are properly compensated for when one considers what work can be required to be performed by people of the types of employment, being either full-time, part-time or casual.
PN1333
The simple proposition, I suppose, that arise as I listen to the submissions put to the Full Bench on behalf of ABL and the addressing of what is and what is not in the casual loading, the position that is fundamental, I suppose, is this: is that given the casual loading is a constant, it is designed to compensate for various matters of disability.
PN1334
And if I jump now to, without labouring the point because I know there's limited time, if you go to the position that was reached in the case of my particular client with the interest in the Clubs Award, what the Full Bench determined there was that the appropriate balance of disability, taking into account the casual loading as between full-time and part-time employees, resulted in all of those types of employees being paid the same amount when working hours that were to be remunerated by overtime rates. And if I can go specifically to the Award provision that was put into place it is the award provision that one finds in 10.5 of the Registered Licenced Clubs Award, and it reads:
PN1335
A casual employee shall be paid at the overtime rates specified in clause 28.3 for any work in excess of - - -
PN1336
And there are only two requirements which give rise to the payment; where a person would work 12 hours or more on a day or shift, or in excess of 38 hours per week subject to a further proviso where the employee works in accordance with a roster, the average of 38, over the cycle which may not exceed four weeks.
PN1337
If you like this is a simple way of looking at that provision. It's in accordance with the decision of the Commission made in the Full Bench at 550, and that is it was determined that when persons work at those times they would get overtime rates, and those rates by way of further clarification when there were issues about the draft determinations were clarified by the Full Bench that heard the matter by saying they were inclusive of casual loading.
PN1338
In other words the Commission must have formed the view after hearing the evidence and in exercise of the modern award objective and the parameters and the various considerations, that in order to provide an appropriate compensation to all types of employees in this particular award all employees would be paid equally where they were working time that was considered to be either additional hours or warranting an additional compensation because of the manner in which it was worked.
PN1339
In looking at the position that applied immediately prior to that variation a casual employee who had worked up to 12 hours was paid his base rate plus his casual loading Monday to Friday, and then after he progressed to the 13th hour continued to be paid the casual loading and base rate. The view that was taken by the Full Bench in the case was that after the working of 12 hours on a day or a shift it was appropriate for there to be a higher rate of penalty, and the Bench determined what that higher rate of penalty was and they made it inclusive of the casual loading. Why did they make it inclusive of the casual loading? Because the casual loading is a constant. If you look at the way in which loadings were applied within this award it was consistent.
PN1340
In this award when one looks at clause 29 there are two identified types of employment recognised by way of loading; part-time and full-time and casual, and the casual carries a notation that includes the casual loading. In other words everything about this award in terms of penalty rates demonstrated that in relation to rates that were designed to compensate the casual loading in terms of the compensation given to the casual was inclusive, and it leads to this conclusion, if you go to what's called in the case disaggregation.
PN1341
If the rate, and let's just for simplicity say it is 175 per cent inclusive of casual loading, the balance of the disabilities once the casual loading is brought to bear on it must give rise to the other 150 per cent. If the other group of people being part-time and full-time also received 175 per cent then the considerations that have applied to the setting of that rate must be different to the considerations that applied in terms of the casual employee. In other words assessing the benefits and detriments between types of employees the Full Bench in exercise of a task under award review, this is the former Full Bench dealing with the variations to this award, had to have engaged in the exercise and determine that they were appropriate rates.
PN1342
What the Uniting Voice case really comes down to is this; if you take the casual loading out you are actually saying that the other penalty is different. It is different in relation to this, that if you disaggregate you still finish up with the same result, you don't get 175 plus 25, you get 150 plus 25 and that's the same as 175 inclusive. If that submission was accepted by this Full Bench the argument that's being presented by Uniting Voice in these proceedings is a complete nonsense. There is no disaggregation because in my particular award with my particular client they're included.
PN1343
The only way that there was a derogation from that came out of the history of the awards. That's conceded by Uniting Voice in its outline and submissions in reply where it makes reference to the fact that the different results come from the text and the history of the instruments that are being discussed.
PN1344
The one thing that we know about the three hospitality awards there were no provisions that allowed for overtime of casuals until it was created by the prior Full Bench, and there has been no justification brought, which is the primary submission of the employer bodies, for that to be reviewed in these proceedings. There is not one bit of relevant evidence that Uniting Voice has led in these proceedings that would lead to a different result, and in terms of that it is a case totally devoid of merit and made in the absence of evidence. In fact when this matter first came before the Commission I referred to it this morning. Mr Bull said it's not about a whole lot of evidence, it's basically we're going to do a more sophisticated submission. I won't be calling bartenders and the like, it's a matter of principle.
PN1345
The matter of principle is in terms of the particular award I am addressing, the matter of principle always in that award is that in terms of penalty rates the rates have been assessed, vis-à-vis with different types of employees with the casual loading included. It was quite a different position to the three retail awards that were dealt with in the part-time and casual case. They had a recondition separate to it, and indeed if we look at the way in which the matters do go together one of the clearest examples of the principles that are involved is in fact the penalty rates case involving the three hospitality awards where two of the awards were found to have made out sufficient case to warrant variation, and that variation must mean that the disabilities that were originally created for full-time employees were now not as accent as they were, and that the casual loading should be paid separate to delineate between the disabilities of full-time and part-time employees, vis-à-vis casual employees working the same hours.
PN1346
If that is the matter of principle, and it is a case about principle as opposed to merits, the principles that had been applied both in the two prior Full Benches both dealing with penalty rates and dealing with casual and part-time employment, but specifically casual employment and specifically the hospitality awards, are exactly as I have just stated to the Full Bench. There is no warrant to interfere in any way with the decision that was made in creating the entitlement to overtime in the three hospitality awards.
PN1347
I then turn now to the question of merit and this is where the objections came to the rosters that were put together, and the other submissions that are made by Uniting Voice in their reply based upon those rosters or drawn from the Productivity Commission report, and those passages of the reply submission are extensive. They start at paragraph 46 and run from 61 almost to the end of the submissions. The submissions run for about 18 or 19 pages, it comprises half. That is why the employers in hospitality, including my client, in relation to the clubs award objected to the modern awards being brought forward - sorry, those modern rosters or putative rosters - it's not the proper way of bringing forward that evidence.
PN1348
That evidence should have been brought forward on witness statement. It should have had the assumptions that were involved in it clearly stated, and what is not clear even at the outset of them, because I think it was an observation the Vice President made when questioning Mr Bull about them, is that the rosters appeared to be identical as between a full-time employee, I think that was roster 1, and the casual employee where we know there are a myriad of arrangements that can be applied and one of the most interesting things which is not referred to in the Uniting Voice submissions is the recent Full Federal Court case in Wilson Security where indeed in the rostering of the arrangements and concerning overtime and where overtimes are worked in excess of 38 hours overtime can be allocated at any point in time in the cycle or the roster, including before or after the work is performed.
PN1349
The other thing that arises from, and I know we have got limited time and I am willing to send a further note down to the Full Bench if required, because I think we are also going to get leave to address the issues of the rosters if need be over the next 21 days, it was referred to in the Wilson Security case, a decision of the High Court, concerning casual loadings in relation to the then superannuation guarantee, and if your Honours can just bear with me I will get the citation. It's Australian Communication Exchange Limited v Deputy Commissioner of Taxation [2003] HCA 55. Also found at 77 ALJR 1806 and it relates to a statement made by his Honour Justice Kirby concerning casual employees. What his Honour says is this:
PN1350
The concept of overtime arises from the provisions of the award.
PN1351
I will just paraphrase this until we get to the salient parts. He says:
PN1352
The award provision constitutes a reference to work performed beyond ordinary hours that incidentally attracts a special (greater) rate of pay, typical time and a half or double time. However the whole point of casual employment is to distinguish it from this normal aspect of weekly employment whether full-time or part-time, except to the extent that the award makes special and particular provisions for overtime for casual employees they would usually fall outside the normal provisions for overtime hours and overtime rates.
PN1353
Then a little further on:
PN1354
Overtime payments for employees paid by reference to set hours of work are made by reference to the working of hours that truly characterises overtime hours. Casual employees by way of contrast are paid for working ordinary hours of work. Casual employees receive an hourly rate loaded for the incidents of casual employment. The only overtime rates that a casual employee receives are those specifically provided - in this particular case - clause 4.7 of the award. Such rates are paid for time worked outside the spread of ordinary working hours in excess of eight in any one day or 38 in any one week. No part of the other times that a casual employee works can properly be characterised as overtime.
PN1355
If that is a correct statement of the law, and we would submit it is, then the case is directly on point in relation to 10.5E of the clubs award. It specifies when overtime rates are paid, and then no other times that a casual employee works can properly be characterised as overtime. In other words in this particular award all that was done was to substitute one set of penalties for a single penalty, because that's the way I have to describe it given that casual loading is a constant. What the Bench did was quite simply this; up to 12 hours you have got your base rate plus casual loading. After 12 hours you've got your base rate casual loading which was included in a further penalty being overtime rates, and it's as simple as that.
PN1356
I know the other hospitality awards are a little different but can I just say this, that when one looks at the variation that was made in the clubs award and the decision made by the Full Bench at 550 of the part-time employment and casual employment decision, that is exactly what was decided. We say that if the Full Bench was satisfied with that submission, it would immediately now move to dismiss the application made by United Voice at least in relation to my client and possibly in relation to the other two hospitality awards.
PN1357
If not - and we have definitely got a case that is proceeding on merits - there would be then no issue that in order to afford procedural fairness to my client and the other hospitality employers in relation to the other two hospitality awards, that they be given time and any other interested party time to put on the case to meet what is on all fours at the moment a merits case to lift the rate of the disability compensation involved in the overtime rates by 25 per cent.
PN1358
Now, it really comes back to that issue I raised this morning, your Honours, as to what is the purview of this review. If the review did not intend that it would be - and I hate to use the expression - open slather, that anyone could put any determination on that they wished and run the case that they want, again no matter how recent the matter had been resolved, well, then we know we've got a merits case and we should be allowed to meet it.
PN1359
If it is, however, as was put forward to the Bench by Mr Bull - in July I think it was - in transcript that it was essentially a principle case that did not require any evidence at all, on the basis of the submissions I've just made to the Full Bench the principle is, in relation to the Clubs Award, the penalty rates or compensations for detriment related to the two conditions identified within the award for casuals at 10.5(b) as being satisfied - there is no principle involved of altering those rates. There is nothing to warrant a revisiting of the prior decision and indeed in one of the decisions that were made in the outline in reply, Mr Bull even said essentially it's the same case being run again.
PN1360
As your Honour pointed out this morning, Vice President, to Mr Bull, they got what they asked for in the proceedings below. It was their case that they only wanted the same rates as everyone else and, dissatisfied with that, they've come back now under the guise of what is a review ostensibly first created to avoid ambiguities arising in other awards and eliminating that to now say, "We want to run our case again."
PN1361
The principal statement that was made by your Honour the Vice President and others in the statement on 4 December was directed towards curing matters that were unclear as part of this review, not creating new standards or new rights and there was nothing unclear about anything to do with the three hospitality awards. They had been determined by a Full Bench through proper process in terms of the application that was made, or variation, and the Full Bench in accordance with its statutory task approached it in the proper way and dealt with it. It's as simple as that.
PN1362
Quite frankly, it shouldn't be allowed, in my respectful submission, that an inquiry that's being undertaken under the modern review to see whether or not any areas of uncertainty can be removed in the operation of existing casual overtime conditions, becomes a vehicle to basically run merit cases. As the Full Bench stated in the prior case, the part‑time and casual case, they did not make a principle; they determined the case that was before them. If the principle for those rates were to be challenged, it was to be challenged in the proper way by way of application, which I must say I read to be an application not of the Commission of its own motion, but by an interested party seeking variation of the award in a proper merits based case.
PN1363
There are a number of other aspects to the submissions I could deal with, but I know that we've got a shortage of time. Can I say I've just touched on what we would say would be the salient submissions we would wish to make. I have described to the Full Bench that we essentially see that the case was re‑cast making a number of the submissions we made before redundant and I know there is a further period of putting on material contemplated in relation to at least the rosters if we get past this point today.
PN1364
Rather than hold everyone up further today, I think I have touched on the central points that we would wish to raise in this proceeding and I would ask the Commission if it would permit for us to expand upon that by further submission filed or further material filed in the proceedings within the next 21 days with any further material we may wish to put on.
PN1365
The primary submission I would make today to the Full Bench is that if this review was never designed to be a merits based review setting new rights, then the decision is quite simple today; the Full Bench can dismiss the application by United Voice in relation to the three hospitality awards and, if they are not satisfied with that position, they can make the proper application as envisaged under section 158, I think it is, if I remember my sections, and the parties can then join in a proper merits review for variation of the award, if the Commission pleases.
PN1366
VICE PRESIDENT HATCHER: Mr Ryan?
PN1367
MR RYAN: Thank you, your Honours. Just touching on the point that Mr Moore, my learned friend, raised at the end about the purview of this matter, if the Full Bench is of the view that the purview of this matter is whether or not the relevant awards were ambiguous as to whether overtime is payable to casuals, when overtime commences and what rate overtime is payable, then in our submission both the Hospitality Award and the Restaurant Industry Award are unambiguous in relation to each of those matters.
PN1368
The AHA addressed this in correspondence dated 18 September 2017. We also raised it at a directions hearing on 25 February, that the matter was absolutely clear and was devoid of any lack of clarity. The reference in the transcript for the directions hearing was PN382 to 389 and the determinations which you've heard earlier in the proceedings today giving effect to those entitlements commenced from 1 January 2018.
PN1369
The issue in these proceedings relevant to the Hospitality Award and the Restaurant Award is the increase in the rate of pay of the casual employees for work characterised as overtime. This is not a case about whether or not penalty rates should apply or overtime penalty rates should apply or what thresholds will trigger those. This is a case about the overtime penalty rate that should apply.
PN1370
The current overtime penalty rates in the Hospitality Award and the Restaurants Award are in dollar terms the same as the overtime rates for full‑time and part‑time employees. In determining the issue of rate, the casual and part‑time employment Full Bench felt that the overtime penalty rates for casual employees will be payable inclusive of the casual loading. The reference for that is (2017) FWCFB 6181 at 3. That is also referenced in the submissions of United Voice dated 25 July 2019 at paragraphs 39 to 40. There was no suggestion at the time that the outcome sought by United Voice and determined by the Full Bench did not meet the modern awards objective.
PN1371
Now, in these proceedings United Voice has submitted that the issue of rate wasn't determined appropriately and at paragraph 32 of the submissions dated 13 May 2019, they said:
PN1372
In light of the chronology and the manner in which the default approach issue was expressed, there was no -possibility that the issue could have been considered appropriately within the context of the proceedings that dealt with the creation of an overtime entitlement for casual employees within the hospitality awards.
PN1373
We deal with that in our submissions - and we filed submissions, I should say, your Honours, on 5 July 2019. We dealt with that at paragraph 24 where we say:
PN1374
Contrary to the submissions...the overtime rate which was determined by the Commission was based on the application and case advanced by United Voice.
PN1375
Now, part of the case advanced by United Voice in the proceedings before the part‑time and casual Full Bench was that United Voice wanted the decision by employers to engage employees to work additional hours to be cost neutral, and that's what it is. Notwithstanding that it is cost neutral, the Full Bench decided that the overtime rate penalty that would be applicable to casual employees would be inclusive of the casual loading.
PN1376
If there was any doubt about that, Mr Bull for United Voice was asked the question directly in an exchange on 16 August 2016 in those proceedings by his Honour Deputy President Bull about whether or not the rate would include the casual loading or be in addition, and he said it would be 150 and then 200 and it would not be cumulative.
PN1377
VICE PRESIDENT HATCHER: What was the date of that?
PN1378
MR RYAN: The transcript reference is 16 August 2016 at PN1229. In our submissions dated 5 July we address the onus in terms of applicants to the proceedings and it's clear in our submissions at paragraphs 17 to 19 that the proponent of any variation must advance a merit argument in support of a proposed variation. Our reference there is the jurisdictional issues decision. We also reference in that section of our submissions the Security Services Industry Award decision (2015) FWCFB 620.
PN1379
More recently there has been decisions in the clubs sector with penalty rates and the proposed merger of the awards, where various Full Benches have said in relation to issues which related to rates for particular work on particular days that a merit based case wasn't made out. The reference there in relation to the merger case is (2019) FWCFB 349 at 116 and 117. That also picks up the reference in the penalty rates decision of 2017. In terms of the casual and part‑time case, and setting the rate and the entitlement for casual employees, the Full Bench said:
PN1380
We are satisfied, having regard to the matters we are required to take into account under 134(1), that a fair and relevant minimum safety net for casual employees covered by the three awards in question requires that casual employees receive the benefit of overtime penalty rates. On the basis of the factual conclusion we have set out, it is apparent that casual employees who work long hours in the course of a day or week are subject to significant disabilities.
PN1381
The Full Bench went on to say that:
PN1382
Those disabilities are essentially the same as those applying to permanent employees who work lengthy hours and review overtime penalty rates for doing so.
PN1383
The Full Bench went on to say:
PN1384
We see no good reason for the different treatment of casual employees, nor was any convincing rationale for this advanced by any interested employer party.
PN1385
We would say that applicable threshold is what United Voice now has to meet in relation to their case. In terms of the evidence, we agree with the submissions put in relation to the relevance of the evidence of Olav Muurlink. That was by ABI and the New South Wales Business Chamber. We also agree with their submissions and support their submissions on the characterisation of the penalty rates case, and the Productivity Commission references in respect of default rate. We agree with the submission and support the submission of Ai Group in relation to a staple award system.
PN1386
I would lastly finish off in terms of the entitlement to overtime over the last 12 months. Your Honours, there is not a skerrick of evidence from United Voice the proponent of a variation about the operation of casual overtime rates over the 12 months prior to them making this application. Those entitlements commenced on 1 January 2018. The directions were issued for this proceeding in early 2019. They had a full seasonal and calendar year cycle to adduce evidence and put that before this tribunal if that wasn't working, and they haven't done so.
PN1387
In our submission, the application by United Voice - not only for the reason of seeking to reagitate matters that have already been determined in support of the review - should be dismissed. Unless there is anything further, they are the submissions of the AHA.
PN1388
VICE PRESIDENT HATCHER: Thank you. Anything briefly in reply, Mr Bull?
PN1389
MR BULL: No, I've got nothing to say. It's covered in our written submissions.
PN1390
VICE PRESIDENT HATCHER: Mr Clarke, did you want to say something?
PN1391
MR CLARKE: Yes, I did, your Honour. I'm still unclear as to the position in relation to our alternate procedural submissions. One was that the particular argument by ABI, New South Wales Business Chamber, not be entertained. The other was that we be permitted with some time to deal with it. If both of those applications are to be refused, then I'll do my best to deal with it now, but I'm just reminding the Bench that that was where we left things this morning. I would like perhaps some clarity about what is to happen next in that regard.
PN1392
VICE PRESIDENT HATCHER: What do you want to happen? What precisely do you want to happen? Do you want some further opportunity for a written submission or - - -
PN1393
MR CLARKE: Well, that was the alternative position that we put.
PN1394
VICE PRESIDENT HATCHER: How long do you need to do that?
PN1395
MR CLARKE: Well, the point as it was raised was that the generic argument affects not only these three awards but also others. We had suggested that the Bench not reserve separately in relation to these group of awards, but allow - - -
PN1396
VICE PRESIDENT HATCHER: Let me put it this way, Mr Clarke: would I take it that if we were able to determine this application without reference to the ABI submission, then there is no need for you to be heard further about it? Is that accurate?
PN1397
MR CLARKE: I think that that is probably right, although if it is still advanced at a later stage in relation to other awards, then we would need to contend with it then.
PN1398
VICE PRESIDENT HATCHER: In those other awards, but in relation to these awards - - -
PN1399
MR CLARKE: Yes.
PN1400
VICE PRESIDENT HATCHER: - - - if the submission for one reason for another is not necessary to be determined in order to determine the outcome - - -
PN1401
MR CLARKE: Yes.
PN1402
VICE PRESIDENT HATCHER: - - - then there's no need for us to hear you further in these three awards.
PN1403
MR CLARKE: I think that's right, your Honour. I just didn't want to leave here with having misunderstood that the Bench had dismissed my application and then not at least have made some effort to reply to the point that was raised.
PN1404
VICE PRESIDENT HATCHER: Yes. The Full Bench intends to just adjourn for a brief period, so can the parties stay in Court. It shouldn't take too long.
SHORT ADJOURNMENT [5.32 PM]
RESUMED [5.36 PM]
PN1405
VICE PRESIDENT HATCHER: The Full Bench wishes only to say this: we thank the parties for their submissions. At this point we simply propose to consider what has been put to date by the parties and then decide the next step forward. If we consider it is necessary to receive any further submissions or perhaps evidence in relation to any issue that has been raised, we will communicate that to the parties and make directions for the filing of further submissions and/or evidence.
PN1406
At this stage it is not our immediate view that we would be assisted by any further submissions on any point that has been raised, but if we change our mind or we consider that it is necessary to take some further step to accord procedural fairness to any party, we will do that. Subject to those matters, we will now adjourn without making any further directions. Mr Clarke?
PN1407
MR CLARKE: In relation to the other awards where this argument has advanced to the list for tomorrow and Wednesday - - -
PN1408
VICE PRESIDENT HATCHER: Well, I think I simply have to wait to see the extent to which it is advanced and whether it is advanced on the same basis.
PN1409
MR CLARKE: Yes.
PN1410
VICE PRESIDENT HATCHER: The parties have had the opportunity to see how the case has progressed today and they may maintain their approach or change their approach on the basis of what they've observed.
PN1411
MR CLARKE: I deeply apologise for this, but I have some personal family commitments tomorrow. I was wondering, if the argument must be raised this week, if I'd be permitted to do that on Wednesday rather than Tuesday.
PN1412
VICE PRESIDENT HATCHER: Let me put it this way, Mr Clarke: if we consider that it is again necessary for you to be heard on that question, then we will make sure that you have an opportunity to do so, whether it's on Wednesday or at some future occasion. We will ensure that that happens.
PN1413
MR CLARKE: Thank you very much.
PN1414
MR MOORE: Your Honour, can I just raise one quick point of clarification?
PN1415
VICE PRESIDENT HATCHER: Yes, Mr Moore.
PN1416
MR MOORE: The comments that you just made, I take it that also applies to the materials that we were envisaging filing within 21 days?
PN1417
VICE PRESIDENT HATCHER: Yes, and that applies to the roster material. At this stage we simply wish to consider what has been put. If we think that we would be assisted by any response to that roster material, we will advise the parties. That is not our view at the current time. We will now adjourn.
ADJOURNED UNTIL TUESDAY, 30 JULY 2019 [5.39 PM]
LIST OF WITNESSES, EXHIBITS AND MFIs
OLAV TETUS MUURLINK, AFFIRMED....................................................... PN618
EXAMINATION-IN-CHIEF BY MR BULL..................................................... PN618
EXHIBIT #1 WITNESS STATEMENT OF OLAV MUURLINK DATED 29/02/2016 PN630
EXHIBIT #2 WITNESS STATEMENT OF OLAV MUURLINK DATED 13/05/2019 PN635
CROSS-EXAMINATION BY MR IZZO........................................................... PN637
RE-EXAMINATION BY MR BULL................................................................. PN715
THE WITNESS WITHDREW............................................................................ PN742
MARK ANDREW FROST, AFFIRMED.......................................................... PN760
EXAMINATION-IN-CHIEF BY MR IZZO...................................................... PN760
EXHIBIT #3 WITNESS STATEMENT OF MARK FROST DATED 04/07/2019 PN766
CROSS-EXAMINATION BY MR BULL.......................................................... PN769
CROSS-EXAMINATION BY MR MOORE..................................................... PN844
THE WITNESS WITHDREW............................................................................ PN866
EXHIBIT #4 EXTRACTS FROM AUSTRALIAN BUREAU OF STATISTICS PN954
EXHIBIT #5 ABI ABS DATA............................................................................. PN973