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TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009 1035462-1
COMMISSIONER GOOLEY
AM2012/53 AM2012/108 AM2012/205 AM2012/224 AM2012/247
Sch. 5, Item 6 - Review of all modern awards (other than modern enterprise and State PS awards) after first 2 years
Applications to vary the Vehicle Manufacturing, Repair, Services and Retail Award 2010
Melbourne
10.27AM, THURSDAY, 10 JANUARY 2013
THE FOLLOWING PROCEEDINGS WERE CONDUCTED VIA
VIDEO CONFERENCE AND RECORDED IN MELBOURNE
PN1
THE COMMISSIONER: Good morning everyone. Thank you, I will take the appearances.
PN2
MR A. BAUMGARTNER: I appear for the Motor Traders Association of New South Wales and also today for the Motor Traders Association of Western Australia, and the Motor Traders Association of Queensland.
PN3
MR W. CHESTERMAN: I appear for the VACC.
PN4
MS J. FOX: I appear on behalf of the Shop Distribute and Allied Employees Association.
PN5
MS A. WEBER: I appear for the Australian Manufacturing Workers Union vehicle division.
PN6
THE COMMISSIONER: Thank you. In Adelaide?
PN7
MS S. WEST: I represent the South Australian Employees Chamber of Commerce and Industry trading as Business SA. In attendance with me is my colleague, H. Walbrun, who will be representing some aspects of our submission.
PN8
MR M. SHEEHAN: I appear on behalf of the MTA SA and with me is MR P. EBLAN, also from the MTA SA.
PN9
THE COMMISSIONER: Thank you. Sydney? Is anybody present in Sydney?
PN10
MR J. WIMALARATNA: I appear on behalf of the Australian Federation of Employers and Industries.
PN11
MS VACCARO: I appear for the Australian Industry Group.
PN12
MR A. VERNER: I seek permission to appear on behalf of Australian Business Industrial. And with me I have Lindy Baxter (indistinct).
PN13
THE COMMISSIONER: Is there any objection to Mr Verner appearing? Thank you, permission is granted. Has there been any discussion amongst the parties to how you wish this matter to proceed this morning?
PN14
MR BAUMGARTNER: Maybe I can comment, Commissioner. Hopefully we can shortcut some of the proceeds. There's a fair few applications, and quite a few variations. Last week (indistinct) New South Wales contacted the AMWU and the SDA and proposed a meeting of the parties to try to narrow the issues a bit, which fortunately we met yesterday afternoon and most of the other parties here today were involved in that meeting via our teleconference that took place. In relation to the AMWU application, and my friend can correct me if I'm wrong, the issue of the additional classifications at R7 and R8 in the vehicle repair service and retail section of the award was discussed. We have arrived at an accommodation witness your approval to continue those consultations for a little bit longer, not for an extended period.
PN15
THE COMMISSIONER: Certainly, it doesn't take what appears to be from 1993 to present time.
PN16
MR BAUMGARTNER: Yes. Well, we are working the long term. Certainly, I think at this stage there is quite a bit of good will to establish one additional classification. You will note that the MTA New South Wales on behalf of us and the Motor Traders Association put in detailed reply submissions with an alternative proposition there. So there is an agreement, I guess, in principle to adopt one additional level. We are not (indistinct) more than that at this stage. But the important fact is that the automotive training package has been endorsed with appropriate variations leading to the position where the R7 role is quite clearly defined now. So we can see that there is value in having that. So what we are saying is there should be a short period of additional consultation, and we are not agreed on the period, but it looks like we are (indistinct) that will be six weeks.
PN17
We would be seeking a listing to hopefully put forward and agreed variation in that regard.
PN18
THE COMMISSIONER: And are you seeing that as part of the review process? Or are you seeing that as a separate application to vary the award?
PN19
MR BAUMGARTNER: We have got the application on foot from the AMWU. So in regards to whether it's part of this or not, we would like to resolved contemporaneously. We don't want to have a separate application because if we do that, it might be another 20 years before we get around to it. So anyway, it would probably be next week, and then after that we will define the differences that we may have in relation to the role. And it may be that we will need some short hearing to resolve that.
PN20
THE COMMISSIONER: And one of the things that you will need to consider what is apparent from the material that you put in, that if you reach an agreed position you may be able to provide an explanation for me, is the relativity position in relation to the cert 4 level position. If it is a cert 4 level position, obviously there are other awards of the tribunal that have set relativities for cert 4 qualifications. And it will be useful for me in terms of that for you to address the justification for the relativity that you would propose for that classification, bearing in mind that there have been decisions of this tribunal that have set certain levels. I think, for example, in the Metal Award when that was done, the cert 4 level there I think was 115 per cent. And so you will need to address that when you come back, when you reach an agreement about what the justification for the relativity you are proposition in this award.
PN21
MR BAUMGARTNER: Yes. We will definitely have a look at that, Commissioner. At the mean time at the moment for our purposes, we just looked at what they did in the past and put forward 108 per cent. But we are obviously prepared to relook at that if things have moved on from that, and it was a long time ago. So I think that's where we are with that stage. I don't know whether you want to comment in relation to that?
PN22
MS WEBER: That's broadly correct. There are significant points of agreement between the parties. We are apart in some respects including on the issue of relativities, however we think we are in a position to at least indicate to the Commission within six weeks that what agreed on – and that will largely be the technical matters and the structure of the classification – and what we have not agreed on, to at least confine down what needs to be determined by the tribunal. But my friend is correct, we think we can do that in six weeks. In terms of whether it remains part of this 2012 review process or as a separate application, to my mind this is a matter that shouldn't artificially be confined to the time limits that are set out to, for example, the first stage of the 2012 review.
PN23
Because it is a matter that was foreshadowed in a Part 10A decision, and because it's a matter which links to things that have been happening with the skills Commission. My understanding is that the cert 4 will come into effect in tafes at the start of next year, and in other independent training organisations that are certified in the middle of this year. So there is a bit of time to play with if we need it. But at this stage, we think that six weeks should be sufficient.
PN24
THE COMMISSIONER: So if I simply have a mention in six weeks, you could let me know where you are up to?
PN25
MS WEBER: The way I envisaged it, Commissioner, is to if possible for a joint submission which sets out our common claims and points agreed, and identify if we need to what we don't agree on. And then at that mention we can determine how to deal with those matters.
PN26
THE COMMISSIONER: And is that an agreed position of all the parties?
PN27
MR BAUMGARTNER: Well, because of the difficulties of meeting just yesterday, I haven't had an opportunity to consult with every organisation. But that is the position that Mr Chesterman – maybe Mr Sheehan could indicate his view, but they haven't had an opportunity to think about it. But they could comment themselves, or Mr Eblan could comment in relation to that. I think that's where we sit. Rather than have an all-out grand fight about it today, would it be easier I think to try to resolve it. Because there is a bit of goodwill, I think, shown by both sides at this stage. If I might just carry on and just give the rest of the MTA application, MTA New South Wales application, as to things that seem to be either agreed or there is no opposition arising as to (indistinct).
PN28
In relation to the MTA New South Wales application, it appears, and correct me if I'm wrong, but there is agreement or no opposition to item 1, 3, 4, 6, 7, 9, 10, 11, 12, 15, 16, 17, 18, 19. So it's a lot of items.
PN29
THE COMMISSIONER: More the point in the application. Just let me see if there I an amended application. Of course there is, I was on the wrong page. So it was 15?
PN30
MR BAUMGARTNER: Yes, 15, 16, 17, 18 and 19.
PN31
THE COMMISSIONER: I thought there was opposition to - - -
PN32
MS WEBER: Commissioner, we oppose item 15 which relates to the tow truck classification.
PN33
THE COMMISSIONER: Does the SDA agree that those are the matters that have been agreed? Do you just need a few minutes?
PN34
MS WEBER: We just need a few minutes yes sorry, Commissioner. Commissioner, in relation to item 18, we don't oppose it, so to speak, but we question the necessity of the words.
PN35
THE COMMISSIONER: Can you just – was 13 and 14 – they're not agreed, are they? Sorry, what was the AMWU?
PN36
MS WEBER: It's by no means a significant matter, Commissioner, in relation to item 18 which seeks to insert two weeks of award coverage into the heading of the provision. We don't oppose it, but we don’t think it's particularly necessary either. And the same with item 20 and 21.
PN37
MR BAUMGARTNER: All right. Mr Chesterman informed me just a moment ago that the AMWU didn't suppose 20 and 21. We saw those as important changes to clarify the coverage of section 2, as I understand it.
PN38
THE COMMISSIONER: I think they're saying they don't think it's necessary as opposed to don't oppose it.
PN39
MR BAUMGARTNER: It's more of a clarification really. I take it then that they have accepted item 19, is that right?
PN40
MS WEBER: You are right, Commissioner, when you say that I (indistinct) vigorous opposition to these variations. But by the same token, we say that the award coverage is already quite clear and in that respect, they are unnecessary. In relation to item 20 and 21, the main concern is that might artificially limit sections in circumstances where the best way to determine whether the award covers someone is by reference to the classifications at the back of the award. But I don't take my submissions any further than that. I simply say that they are not necessary in order to read the award in a clear manner.
PN41
MR BAUMGARTNER: We wouldn't agree with that actually, because the history of the award is section 234 were all relating to the predecessor Manufacturing Award that was a separate award. Those particular sections, they have had application to the vehicle repair service and retail section 1. And the reason we have sought them is to avoid problems that have arisen with understanding the award, and also from the Fair Work Ombudsman taking a view that those supervisory provisions apply to section 1. And these are simple variations to make it very clear what parts of the coverage clause are relevant to the various sections of the award.
PN42
The award, because it's a combination of two awards, is probably not as simple and easy to understand as we'd all want the modern awards to be.
PN43
THE COMMISSIONER: I don't disagree with you having come to this award and having been relocated into this panel. To try and understand it is not always easy.
PN44
MR BAUMGARTNER: Yes. And I think part of the complication has been that combination. Obviously, we were supportive of a number of awards, but it does make it more complicated because of the combining of the awards. But we say those changes are necessary so that it is clear that the supervisory roles are only pertaining to the manufacturing section. Under the repair services retail section, the supervisory level is really only a leading hand role. There is no supervisory roles within the classification structure in relation to the vehicle repair service and retail section. That is why we have sought those changes. So maybe Ms Weber might reconsider the position there. If I could continue on then.
PN45
Item 2 is an area of disagreement, but this morning there was a measure of potential accommodation in that area. And I am happy to leave that to other parties to confirm, but essentially what we are looking at is including another line in the clause rather than the word 'unpaid'. But something along the lines that, for avoidance of doubt, where a morning and afternoon break is provided, one of such breaks may be unpaid. And I am putting that forward today without other parties having an opportunity to fully consider that. But we feel that may be an avenue for resolution of the matter. And we would be asking that that item be stood over for a short period so that we can put together some wording to go into the award and then provide that to the other parties for consideration, and maybe there could be another listing just to deal with these issues.
PN46
Also, there is item 5 which is the exclusion of clauses 28.8 and 28.9 in clause 28.5(b) of the overtime provision. That's a very important issue from our point of view. But again, we would seek to stand that over for further discussions. As I said, circumstances have been against us a little in getting the consultation completed, but what we think is it's preferable for us to try and sort that one out with the other parties and come back to the tribunal.
PN47
THE COMMISSIONER: Item 6 is agreed, isn't it?
PN48
MR BAUMGARTNER: Item 6? Sorry, yes, item 6 is agreed. Item 8, we put in a variation which was similar to one presented in relation to the AIG, with the same effect but in a different clause. And upon review of that, our position is that we will look at just accepting the AIG variation to 41.2 rather than pursuing our variation. So that's another area which some of the other parties may not have been able to have an opportunity to consider, taking about the MTA South Australia, for example. But what we are thinking is that rather in the shift work provision by changing in the way we suggested, as that might raise some concerns in some areas, it might be better just to accept the proposal put forward by the AIG which is a variation to clause 41.2 relating to casuals.
PN49
Our variation to the shift work provision was to extend the existing exclusion which applies to driveway, road-house, and those sorts of employees for more casuals in the shift work provision. However, on reflection we are thinking that it might be better just to amend 41.2 as proposed by the AIG.
PN50
THE COMMISSIONER: And that's the provision that says the AIG's provision about loadings not being cumulative?
PN51
MR BAUMGARTNER: That's correct, yes. In relation to item 13, we have considered a proposition that was put to us yesterday in relation to the windscreen fitter or repair motorcycle assembler. Both roles apply in the ACT only. And our view was that we wanted to delete the reference to "for ACT only". What was put to us yesterday is that the references to those two roles in the ACT should be deleted in B3 because they were in the schedule of classifications, their indicative roles. And we are proposed to accept that now. The other part there that the change, the other change that we seek to B4 is agreed to be made, that is the deletion of the reference "for ACT only".
PN52
THE COMMISSIONER: So it gets deleted entirely from B3?
PN53
MR BAUMGARTNER: That's correct.
PN54
THE COMMISSIONER: And in B4 the reference to "ACT only" gets deleted?
PN55
MR BAUMGARTNER: Yes, that's correct.
PN56
MS WEBER: May I speak very briefly to that, Commissioner, simply because it was my union that put that proposal forward. The distinction between B3 and B4 is a distinction between less than six months experience and over six months experience. So what we proposed is we delete that distinction which applied to the ACT only. So that will have the effect of removing those indicative roles form B3 and leaving them in B4. That means that you would need to delete the words "for ACT only", but it also means you need to delete the words which refer to six months so that people that do that work in all jurisdictions fall under the B4 classification.
PN57
MR BAUMGARTNER: The last item, item 15, which is not agreed, that was discussed briefly yesterday. It may be that we have to deal with that today about that variation that we put forward there. Maybe if I leave my submissions at that point.
PN58
MS WEBER: Commissioner, if I may comment. Would it be preferable to stand or sit, bearing in mind you have video conference?
PN59
THE COMMISSIONER: You can sit down.
PN60
MS WEBER: Thank you, Commissioner. Just in a quick response to the MTA's submissions. Just having had a chance to quickly go through what has been stated so far, the SDA agrees with the variations sought in number 1. In regards to number 2, there has been comments about the interpretation and I think in principle the SDA agrees to the interpretation that it is either the morning or the afternoon. And so I think in principle we have agreement, it's just the wording. And we would say that the variations sought by MTA doesn't achieve the wording that I think we all agree is actually what is supposed to be there. So we would happily have discussions about what wording should be included, but I think we are all on the same page.
PN61
We agree with number 3, number 4. Five is an issue that is outstanding, but the MTA has suggested further discussions taken place. We are happy for that to occur. Six we agree. Seven, my only comment there would be that not sure if it's actually necessary. It's an unfortunate award in the way it's written. It seems to start every clause with who the clause does not apply to, it's always written in the negative. And I think the proposal is to then say you don't apply here, but your conditions are over there. And I think that principle could be applied to every clause in the award, the way it's currently written. So I think it's unnecessary to just put that type of provision in on this particular clause. That is my only comment in regards to that one.
PN62
Eight, we had suggested – that is still in discussion so at this stage, from our submissions, we had not agreed to variation number 8.
PN63
THE COMMISSIONER: As I understand it, the current position of the MTA New South Wales is that they are not pressing that because they have accepted the AIG's amendment to 41.2.
PN64
MS WEBER: Correct. And we have in our submissions agreed to the AIG wording, but not to the MTA wording.
PN65
THE COMMISSIONER: Provided there is not somebody else who wants to pick up the MTA New South Wales's variation now that they are not pushing it, then we don't need to worry about that.
PN66
MS WEBER: That's correct. We agree with 9, we agree with 10, we agree with 11, and we agree with 12. And from 13, 14, and 15 onwards we had no particular view. It doesn't go to the issues of our membership as such, so we had formulated no response in regards to those matters. Thank you, Commissioner.
PN67
THE COMMISSIONER: That's from 13 to 21?
PN68
MS WEBER: Thirteen onwards in regards to the B3, B4 trainees, et cetera. Commissioner, my friend from the MTA has, I think, adequately and appropriately set out what is agreed between our respective organisations. I should say that the AMWU had for the purposes of the timing of this review, although unfortunate staffing issue towards the end of last year, and I do apologise for the fact that we missed the filing deadline for matters in reply. Yesterday afternoon after having had the benefit of meeting with the other parties, I forwarded to your chambers an outline of verbal submissions. If you are amenable to taking that as read, then it might significantly cut down my verbal submissions. But that sets out our position in relation to all of the claims.
PN69
We do think, as with the other matter relating to classifications, that we may be able to make some headway on the issues of meal allowance and on the issue of fallbacks. Our concern for the record in relation to the meal allowance issue is that if the proposed variation is accepted and it's read to mean that breaks must always be unpaid, then a number of our members who currently enjoy paid breaks will have a notice on their notice board next week which says they are now unpaid. And that, as I understand it, was not the intended consequence of the variation proposed. So it was on that basis that we were able to make some progress about what we do agree on, bearing in mind the history of the award and its predecessors in relation to meal breaks.
PN70
So we think that we could assist the tribunal by having time to work through those issues and come back in a period of weeks, I suppose.
PN71
THE COMMISSIONER: Thank you. So if we go to South Australia, who wishes to speak there?
PN72
MR SHEEHAN: We'd like to make some comments, Commissioner. It's Mark Sheehan for the MTA SA. We would support the submissions made by MTA New South Wales this morning. We were not privy to the discussions held between the parties yesterday. And as Mr Baumgartner has indicated, we will have subsequent discussions with them, with the MTA New South Wales, following this hearing today and come up with an agreed position. So for the time being I think the proposal to have those discussions is supported and we will come back in due course, I guess, as MTA New South Wales is making the application in conjunction with all the other MTA associations and also the VACC.
PN73
MR EBLAN: Commissioner, if I could just pass a comment. The original meal breaks morning and afternoon with Ian Ross being on the other side - - -
PN74
THE COMMISSIONER: Excuse me, who is speaking? Because of the quality of the video, it is difficult for me to actually tell who is talking. So if you just state your name.
PN75
MR EBLAN: Paul Eblan. All I am saying is the understanding of the parties on the application of morning and afternoon tea breaks was the very basis on which we agreed that back in 1990-odd, and whilst the wording was very simple in those days, it was clear that if someone was already enjoying paid meal breaks as part of their contract, that would continue. But if it was the business contract to provide unpaid meal breaks, one per day, that was allowed. And of course since then, we have had substantial over award payments creep in the industry and those things have been negotiated. So the intent of both the AMWU and the SDA I think has always been there, but the wording I accept today needs clarification. Thank you.
PN76
THE COMMISSIONER: Thank you.
PN77
MS WEST: Thank you, Commissioner. The SAC is not an applicant in these proceedings, but we have filed submissions in support of applications made by MTA New South Wales, ABI, and the AI Group. We also filed submissions opposing SDA's application, and this was lodged on 13 December. Commissioner, we seek to primarily rely on our written submissions today which are self explanatory. Yesterday there were discussions between the parties to amend a number of applications. We have had the opportunity to review the amended applications for ABI and Business SA does not oppose the amended application. In relation to Business SA's opposing submission to SDA, our submission in this matter now is not relevant given that SDA advises of their intent now of their intention of amending their application in the teleconference yesterday between the parties.
PN78
So we have reviewed the amended application to insert the proposed clause and Business SA does not oppose SDA's amended application. Commissioner, we do want to file a few points in relation to our written submission, and the first point relates to MTA's application for payment of overtime in subclause 28.1(b), which currently this clause will not apply to a person recently employed to performed vehicle sales related duties, (b) casual employees, and (c) employees working at retailing establishments. MTA submitted that this subclause is a drafting error which needs to be corrected, and this is supported by Business SA.
PN79
For someone who is not familiar with the award and who doesn't know that in fact there are other sections of the award that do not provide overtime payments for employees, the current clause as it stands could give the incorrect impression that overtime rates do not apply to any casual employees in the award. So MTA has proposed to rectify the anomaly in subclause 28.1(b) by adding the words 'casual employees' after the words 'casual employees' the words in section 1 vehicle industry repair services and retail employees. So that this variation will exclude casual employees engaged to work in vehicle industry repair services and retail areas in section 1, which already has overtime penalty rates provided by clause 36 and clause 41.
PN80
Overtime payments for casual employees engaged as vehicle manufacturing employees in section 2 is addressed in clause 28 because in clause 47 it does not provide for overtime payments for casual employees. Business SA submits that although we support MTA's variation, we believe that further guidance and clarity could be provided to assist in addressing this anomaly by amending MTA's variation to clause 28.1(b) to include references to clause 36 and 41 so that clause 28.1(b) will read as follows: "Casual employees covered by clause 36, casual rates for driving attendants, roadhouse attendants, and console operators, or clause 41 casual employees".
PN81
In essence, what we seek is to add after the words 'casual employees' in subclause 28.1(b), the words "clause 36 casual rates for driving attendants, roadhouse attendants, and console operators for clause 41 casuals employees". This variation will ensure that the modern award is easier to apply and understanding to both employers and employees. In drafting this amendment, Business SA has liaised with MTA New South Wales and it is our understanding that they wouldn't oppose this amendment. In pursuing this variation, Business SA relies on Item 6(4) Schedule 5 Part 2 of the Fair Work Transitional Provisions and Consequential Amendments Act 2009 which requires the modern award review 2012 to consider whether the modern award has achieved the modern award's objective, and are operating effectively without anomalies or technical problems arising from the Part 10A award modernisation process.
PN82
Business SA submits that the proposed variation is consistent with the modern award's objective in clause 134 of the Fair Work Act 2009. Our variation is purely technical in nature and does not affect the entitlement to overtime payments. Instead, it particularly relies on section 134(g), the need to ensure a simple, easy to understand, simple and sustainable modern award system for Australia that avoids unnecessarily overlap of the awards Commissioner, in relation to the items that MTA indicated that would require more time for discussions with other parties, Business SA would seek an opportunity to reply to those amended variations. Thank you, Commissioner, that concludes our oral submissions.
PN83
THE COMMISSIONER: Thank you. Now, New South Wales, who wishes to go first up there?
PN84
MS VACCARO: Commissioner, we have nothing further to add to what's already been said, other than in respect of those items that the MTA and unions have flagged. Having completed discussions about (indistinct). I apologise, Commissioner, (indistinct). We reserve our position as to whatever the outcome is of those discussions. We would like the opportunity to put submissions to the Commission in respect of those.
PN85
THE COMMISSIONER: Thank you. Has there been any discussion between the parties about the AI Group's proposed amendments to the award?
PN86
MS VACCARO: Commissioner, we understand that each of the parties agree to our variation to clause 41.2, so I don't intend to make submissions today in respect of those, in respect to that proposed variation. But in respect of the variation as paragraph 19.4(e), we understand that the union are opposed to this and so we have submissions (indistinct).
PN87
THE COMMISSIONER: Sorry, I didn't hear the last sentence of what you said about that.
PN88
MS VACCARO: Sorry, Commissioner. In respect of the tool allowance, I'll be making submissions today in support of our submission.
PN89
THE COMMISSIONER: Thank you. Is anybody else in Sydney?
PN90
MR VERNER: Yes, Commissioner. Australian Business Industrial has long application in these proceedings. Yesterday we filed further amended application. The application deals with clause 24.4 which is payment of wages on termination. It is a small application. There are other aspects to the application that is in relation to annual leave which have been referred to by the Full Bench, but they are not your worry today, Commissioner.
PN91
THE COMMISSIONER: No, they are my worry later.
PN92
MR VERNER: I couldn't hear that sorry, Commissioner.
PN93
THE COMMISSIONER: I said they are my worry later as I am on that Full Bench.
PN94
MR VERNER: So like I said, don't worry about it. So we as far as the MTA's application, we make no comment. We support AIG's application. And I have submissions to make in relation to ABI's application for the variation to clause 24.4. I'm not sure whether you want me to make those now or later on, Commissioner.
PN95
THE COMMISSIONER: No, that's okay. Let's just deal with the issue of payment on termination. Is that supported or opposed by the unions?
PN96
MS FOX: Commissioner, I haven't received a copy of an amended application at this stage.
PN97
THE COMMISSIONER: There was some confusion in the ABI's material because they filed an application, then they filed an amended application, and then they filed submissions and the submissions continued the reference to the issue of part-time employment. As I understand it now in relation to ABI's further amended application, other than the ones about cashing out of annual leave and the payment of annual leave in advance, which are going to the annual leave Full Bench so we don't have to worry about them. They are not pursuing their part-time variation, they are still pursuing their variation in relation to payment of wages on termination. But the order that they are seeking in relation to that is that it be paid within two business days of the termination which was set out in their submissions but not - - -
PN98
MR VERNER: That's correct, Commissioner. Consistent with the submissions filed on 23 November.
PN99
THE COMMISSIONER: So what they are seeking is a variation to the payment of wages on termination clauses is that the wages be forwarded within two business days after termination, as opposed to as soon as reasonably practical, which I think was the wording before this.
PN100
MS FOX: Thank you, Commissioner.
PN101
THE COMMISSIONER: Do the unions have a position on that?
PN102
MS FOX: Yes. That was in discussion yesterday and there was a debate about working day versus business day, et cetera. So the SDA at this stage would support the two day business day wording proposed.
PN103
MS WEBER: Commissioner, in the written outline which I forwarded to your chambers last night, I indicated that we didn't think that the variation was necessary because there has been no substantive change which justifies cogent reason to vary the award since 2009. But we understand what the intent of the variation is and we don't vigorously oppose it.
PN104
THE COMMISSIONER: Okay. Does the Australian Federation of Employers have anything it wishes to say?
PN105
MR WIMALARATNA: Yes, Commissioner. In regards to the AIG application, we support the variation sought to clause 19.4 (indistinct) workplace. We have made written submissions in this regard and would be seeking to rely on them today. In support of the ABI application in relation to clause 24.4 payment of rates on termination, again we would be relying on our written submissions (indistinct). In relation to the MTA application, there are two variations the Australian Federation of Employers Industry supports, namely item 10 and item 11. Again, we seek to rely on our written submissions made previously. We have had a chance to read the amended clause put through by the SDA regarding amendment to clause 42.2. At this stage we will not be (indistinct) we have got some concerns regarding the drafting of that clause.
PN106
In particular, item 7 relates to the clause does not contain wording to the effect where there are two separate penalties payable, whether there are two penalties in place. This, we note, is a particularly relevant when a public holiday falls on Saturdays where the award provides 100 per cent loading. In that instance (indistinct). Clause 43.3 we would say it would need an amendment to say that the public holiday loading under that clause would apply with the exclusion of any other (indistinct) provided under this award. (indistinct) SDA. And Commissioner, in relation to the other matters which requires the need to have further discussions, we don't object to notice seeking that matter. Thank you, Commissioner.
PN107
THE COMMISSIONER: Thank you. So what does that leave us with? It leaves us with the issue of tool allowances? So all the ones that are outstanding that are not agreed with, yours are going for further discussion? Is that a correct summary of the position?
PN108
MR BAUMGARTNER: Probably item 15 which is the tow truck allowance variation that was sought. We haven't agreed to discuss that separately, although I guess we could, today or some other time. But alternatively, I can put some brief submissions in due course on those.
PN109
THE COMMISSIONER: So am I right in relation to the AIG, it's the tool allowance matter that needs to be addressed today?
PN110
MS VACCARO: Yes, Commissioner.
PN111
THE COMMISSIONER: Then there is the - - -
PN112
MR VERNER: ABI application (indistinct) on termination.
PN113
MS WEBER: If it assists, Commissioner, I don't intend to make any further submissions in relation to that proposed variation.
PN114
THE COMMISSIONER: And there is an issue about the SDA – am I right that the issue in relation to the SDA is that issue of what you get paid for midnight Friday night until the end of the shift?
PN115
MS FOX: The end of the shift of the night shift.
PN116
THE COMMISSIONER: And there is an agreement between the parties that you will continue to get paid what you were being paid until you finish your shift. And what I think I just heard was there was some concern that then the award is not clear enough to make it clear, though, that if that happens to be a public holiday, it's the public holiday penalty rate that applies, and that's higher, and you don't get both? Is that - - -
PN117
MS FOX: Yes, Commissioner, though I haven't yet ascertained the views of ABI and AIG in relation to the proposal that I put to the Commission in chambers yesterday. So I could go through lengthy submissions, but it might be worth just gathering their views first because I think we are not too far apart generally.
PN118
THE COMMISSIONER: I understand that what the employers were saying is, in their submissions, is that currently what happens is somebody continues to get paid the shift penalty that was applicable to them, depending on whether they only work night shifts or whatever the circumstances of the penalty they were getting. That's the current situation. And they have no objections to that being made clear that you continued to get the penalty that you were being paid. If I verballed anybody they can let me know.
PN119
MR BAUMGARTNER: That's our position.
PN120
MS VACCARO: We maintain the position put forward in our submission and we oppose the SDA application, including that variation that was put forward yesterday afternoon, on the basis that the clauses are relevantly clear. And I am happy to go further in detail and reply to SDA today.
PN121
THE COMMISSIONER: All right. So that's an outstanding matter.
PN122
MS FOX: Commissioner, may I just address what was raised by API in terms of the additional wording that they proposed. I was probably of the view – and it is our intention that you don't double-dip so that's not in question, but there are two applications. Well, the MTA has effectively withdrawn theirs, but the AIG application goes to the same issue but it states it in clause 41 and, I think, 42. So I'm not sure whether that would address the issue that API raised about standalone wording. I think the original MTA proposal has that provision written at clause 43.3, the end of clause 43.3 and effectively creating a new (d). So I am not sure, you know, I think there is room to make sure that the issue raised by API is addressed without concern from us.
PN123
MR WIMALARATNA: Commissioner, we (indistinct) proposed by the MTA for 43.3 doesn't specifically address that issue. And I believe (indistinct) 41.2 does not (indistinct) this issue as well. So (indistinct) 43.3 would be needed to say there is no double-dipping, that is.
PN124
THE COMMISSIONER: Can I just ask just one question in relation to 43.3 which is, I understand it, is agreed. The MTA New South Wales's proposal to vary 43.3 and 43.4 are agreed. In 43.3 it says:
PN125
Payments prescribed by this clause will stand alone and will not be included for any other purpose of this award.
PN126
Does that include superannuation?
PN127
MR BAUMGARTNER: No. It wouldn't affect superannuation. It's only for loading.
PN128
THE COMMISSIONER: It just worried me when it said all other purposes, and I thought - - -
PN129
MR BAUMGARTNER: It's a common term in the award.
PN130
THE COMMISSIONER: It's understood that it means that when another penalty is applied, it doesn't get applied on top of it.
PN131
MR BAUMGARTNER: That's correct.
PN132
THE COMMISSIONER: Right. So you are still of the view that there needs to be a further amendment – sorry, this is the Federation – to make it clear that if the SDA's clause is adopted that on a public holiday you get the higher rate. And the AIG is opposed to the clause in its entirety, the proposed amendment in its entirety.
PN133
MR WALDREN: Commissioner, just want to reiterate that we would support API's proposal to amend 42.2. As my colleague, Ms West, indicated we did not oppose SDA's amended version of 42.2. But we do believe that API raised this important point that we need to make it clear that you wouldn't get both, you would get the higher of the shift or the overtime. Thank you.
PN134
THE COMMISSIONER: Can I suggest given that the parties are going to be having some discussions about other clauses, given that you are all in furious agreement about what should actually be paid, that the parties could get together on the wording to ensure that it is clear what people will get paid and address the issue that has been raised by the federation to ensure that it's clear that you don't get the public holiday penalty and the night shift penalty.
PN135
MS FOX: Certainly, Commissioner.
PN136
MR BAUMGARTNER: No problems.
PN137
THE COMMISSIONER: All right. Are there any other matters other than tool allowance, tow truck, and payment of wages on termination, that we need to deal with this morning?
PN138
MR BAUMGARTNER: Well, the other issue which might be resolved or not, is item 20 and 21, the issue of drafting relating to coverage and supervisors and the like in the other sections of the award.
PN139
THE COMMISSIONER: I thought the AMWU indicated in relation to that, that they didn't believe it was necessary because they think it is already clear that presumably that means they don't think the amendments are necessary because they agree with your interpretation. Is that correct? It seems to me that what the employer is saying that that section doesn't apply to section 1 employees.
PN140
MR BAUMGARTNER: That's the simplicity of it, yes.
PN141
THE COMMISSIONER: Yes. You simply say that those provisions, clause 58 for example, and 62 – so 58 says section 3, drafting payment of technical employees, and they say this section has no application to the retail repair services section of the award and they want to make that absolutely clear. I understood that the AMWU's submission was you don't think it is necessary to make the change. I am presuming when you say that, you say it is not necessary because you think it is already clear that it doesn't apply to section 1 of the award.
PN142
MS WEBER: Yes, that's right.
PN143
THE COMMISSIONER: So that is what you're saying? And that's all you intend saying on that point.
PN144
MS WEBER: That's right.
PN145
THE COMMISSIONER: So really, the decision I have to make is whether if it's not clear whether the amendment should be made, to make it clear because the award modernisation process was supposed to give us awards which were easy to understand.
PN146
MR CHESTERMAN: Commissioner, can I make a comment here. Because I have had an issue with this very clause, and basically, I have got to own up and put my hand up that, I was in large degree responsible for the drafting of this award. So I sort of should know something about it, but I've worked out that I really don't know that much listening to everyone today. But I've got to say that where the problem lies – and once again it's a Fair Work Ombudsman issue with me without one of our members. In the coverage clause, clause 4.1, subclauses 4.1(a), (b), (c), (d) effectively refer to businesses that are in the repair services and retail section. Even if we deal with businesses that could be described as fitting under section 2 which is the vehicle manufacturing employees.
PN147
Now, one of our members had a clause which involved a manager of a service station which said that, the Fair Work Ombudsman came to us and said, that the manager of the service station was saying that he really should be covered under section 4 supervisor employees in section 2. Now, service stations have never been paid of the Vehicle Manufacturing Award when it existed as its own independent primary award, nor was it ever intended when these two awards were amalgamated that section 4 supervisory employees, which is clause 62 coverage, 62(a) says section 4 will have coverage set out in clause 4. See, the Fair Work Ombudsman has interpreted clause 4 to mean a reference to not (e) and (f) which is effectively the vehicle manufacturing employees sections, but to everyone. And that has created a problem for us.
PN148
Similarly, I think the issue was raised by Mr Sheehan in South Australia that the same issue arose in that state in relation to clause 58, which has coverage under section 3 rather than (indistinct). Section 3 will have coverage set out in clause 4 coverage in respect to employees engaged in a technical filed "according to the following definitions". Now, once again that was never intended or never intended to apply to repair services and retail people, nor did it apply to Repair Services and Retail Award employees prior to the introduction of the modern award.
PN149
THE COMMISSIONER: And the only provisions of the award that apply to section 4 are part 1 and 2?
PN150
MR CHESTERMAN: In coverage? No, parts - - -
PN151
THE COMMISSIONER: No. When you look down at section 4 here of clause 62, it says 62.3:
PN152
Part 1 and 2 of this award apply to section 4. Other than the provisions of clause 23.5 and 60.2(a), the remaining provisions within this award do not apply to section 4.
PN153
So it appears you get consultation, dispute resolution, something in the (indistinct) allowance, and something in the allowances.
PN154
MR CHESTERMAN: Yes, Commissioner.
PN155
THE COMMISSIONER: Is that all? So in other words if you are a supervisory employee, that's all you get?
PN156
MR CHESTERMAN: Yes, certainly.
PN157
THE COMMISSIONER: And is the issue that arose because once you get anything under the award you then become – well, that can't be the issue.
PN158
MR CHESTERMAN: The issue is that if 62 coverage, 62(a), the real issue agreed, section 4 will have coverage set out in subclauses 4(e) and (f) – coverage. And therefore, it would make it very clear that that only applies to the manufacturing side of this award.
PN159
MR EBLAN: Could I raise a point here? Because this is a matter I have in the industrial court. I will be arguing that 62.3 is very clear and unequivocal and it only applies to the manufacturing sector. But the main advocate who has taken this matter in South Australia involving a very senior managerial employee is arguing that 62(a) section 4 applies to the entire award. It may be a little more definite in believing 62 is clear, but it perhaps could do with some clarification. This matter has taken 12 months already. Thank you.
PN160
THE COMMISSIONER: So the AMWU, which you are the people to this effect, you agree that section 3 only applies to manufacturing.
PN161
UNIDENTIFIED SPEAKER: You mean section 4?
PN162
THE COMMISSIONER: Yes. I mean, I am not sure what anybody gets out of section 4.
PN163
MR CHESTERMAN: Probably higher rates.
PN164
THE COMMISSIONER: But what I mean is – I see. It's the argument about what you get paid, you say, covered by I am entitled to get paid what it says in that section.
PN165
MR CHESTERMAN: Yes.
PN166
THE COMMISSIONER: And the AMWU agrees that in fact only applies to manufacturing employees. Because if that's the case and this is actually not a view shared by the Ombudsman, then it is something that should be clarified in the award. It would not be – I can understand why the Ombudsman has taken the view because it says – well, it's an interesting question. It says:
PN167
Section 4 will have the coverage set out in clause 4 coverage.
PN168
MR BAUMGARTNER: Yes, that's the problem.
PN169
THE COMMISSIONER: It says it. It's not ambiguous. And section 4 covers the entire scope of the award.
PN170
MS WEBER: I think at the risk of invoking the eye of everyone in the room, Commissioner, I would feel uncomfortable saying on behalf of the AMWU now that we agree with that position in view of the wording at the beginning of the section. But I think it's something that I would need to discuss with the national secretary of my union. Because when we had discussed this proposed variation, there was no explicit discussion about manufacturing as opposed to RSNR.
PN171
THE COMMISSIONER: In terms of 58, that does look like it's come out of the manufacturing.
PN172
MR BAUMGARTNER: These sections are pretty much exactly the same as the former manufacturing award, apart from cognitive changes.
PN173
THE COMMISSIONER: Was this a matter of contention, debate, at the time of the making of the award?
PN174
MR CHESTERMAN: No. The only – look, I can say this because once again I was - - -
PN175
THE COMMISSIONER: We know already, I think, you are responsible.
PN176
MR CHESTERMAN: I was the culprit with the award issue. But I've got to say that there were very few, if any, comments made about the application of award provisions during the award modernisation process. And I've got to say since I think Commissioner Gay has retired, he had the enviable task of having five different awards in front of him and he had to make the decision, or make the recommendation for the Full Bench, in terms of which way it went. And what happened with this award and has led to a number of these issues, is that in trying to – the decision was made to have a single vehicle manufacturing repair services and retail award, but at the same time the Commissioner also brought in some provisions and each of the various five exposure drafts that he had before him.
PN177
But apart from coverage there was very little, if any, discussion regarding interpretation of clauses. And there was certainly no argument that in respect to section 2 which was headed vehicle manufacturing employees, and the two sections I have referred to that we see as a concern, the RSNR side of it was to be involved in it, but certainly they were never to be involved in anything associated with section 2.
PN178
MS WEBER: Commissioner, from the perspective of our position would it be satisfactory if I took it on notice and undertook to provide correspondence addressed to the Commission by, say, no later than close of business tomorrow?
PN179
THE COMMISSIONER: Is that acceptable to the parties?
PN180
MR CHESTERMAN: Yes, certainly.
PN181
MR BAUMGARTNER: That's fine.
PN182
THE COMMISSIONER: So, tool allowances. Does the AIG wish to say anything in addition to what is in its current submission?
PN183
MS VACCARO: Yes, Commissioner. I've got a few points to raise and I'm not sure how you would like to structure this. I'm happy to address them (indistinct), and then I have got some other points that I have got in response to what the unions have put in their written submissions. If you prefer I deal with them up front (indistinct) will be saying anything in reply to what I am about to say now?
PN184
THE COMMISSIONER: I think it's easier if you deal with it up front, and if they raise anything additional that you haven't had an opportunity to respond to, when they speak you can have another go.
PN185
MS VACCARO: Thank you, Commissioner. With paragraph 19.4(b) of the modern award, we say that there was an error which by effect amounts to anomaly and technical problem arising from the modern award process. And in that the award itself in 19.4(b) is causing the award to operate ineffectively. In short, and I won't go in detail to what the paragraph says, but it provides that all vehicle manufacturing employees, regardless of not whether they are required to use tools as part of their job, they are entitled to receive a full allowance. This is in despite of what the title of subclause 19.4 actually says. so if you look at the title of the subclause 19.4, it refers to tool allowances for trades persons and apprentices, but then you scroll down to paragraph (b) and the words really applies to everybody in the vehicle manufacturing section of the award, section 2.
PN186
We say that this arises out of the drafting during the award modernisation process. It was intended during the award modernisation process that status quo would be maintained when the amalgamation of, in particular, the Vehicle Industry Award 2000 and the Vehicle Retail Services and Repair Awards were amalgamated as a result of the two year review. In the Vehicle Industry Award in respect to manufacturing employees, the tool allowances only applied to trades persons. But then out of recent drafting, the intent was to maintain the status quo who the word employee was used in paragraph (b) as opposed to the word trades persons. Now, this wasn't anything that was raised as a contentious point during award modernisation so the draft was put forward by the VACC, their intention and their submissions, which were provided to the Commission last night and provided to the parties last night as well.
PN187
The intention that was reflected in their submissions was that when they drafted, when the proposed draft of the award was put together, that in respect of tool allowances, specifically tool allowances, that the status quo would be maintained. So I will just take you to – if you have a copy of those submissions in front of you, Commissioner, I will take you to paragraph 48 of the VACC's submissions back when they were filed on 21 April 2009. If you go to paragraph 48 of those submissions, the VACC there outlined all those conditions between the RSNR award and the Vehicle Industry Award that were the same simply worded. And then we go down to 49, and I emphasise that there was some disparity between the two awards, and where there are disparities, that the status quo would be maintained.
PN188
And the in 50 they specifically address the issue of tool allowances and they set out the differences between the tool allowances in the RSNR award for a trades person and in the Industry Award for a trades person and then refer back to their draft clause, which at that time was 25.4 and now has become paragraph 19.4(b). So it was very clear that at the time of drafting that the status quo was intended to be maintained. When this was provided, and the draft award was provided to the Commission, the Commission accepted the draft award was faceted on the premise that what was in the draft award reflected the status quo. None of the parties identified this as an issue or as an error at the time because the main discussion at that time was about coverage.
PN189
So it was just taken that the VACC draft upheld that position that the status quo would be maintained between those two previous awards. And this is explained by the Full Bench in their decision [2009] AIRC FBA 26, and we extracted the relevant paragraph at paragraph 12 of our 23 November submission. So if we turn to that, it clearly says, and it's in page 5 of the relevant extract in our submission, that referring to the second sentence, it says:
PN190
There has been widespread support for an integrated industry award to apply as reflected in the exposure draft. The exposure draft was taken from the VACC draft. In adopting that clause, we have accepted a number of changes in the exposure draft arising from the party's submission so that the modern award general accords with the structure and content of (indistinct) awards.
PN191
So it was never intended that the tool allowance would apply to all the employees. It was always intended that it would only apply to trades persons. I would also like to make some point. In our application we seek retrospectivity of this variation. We say that it is capable for an application or variation made and enforced for a two year review to apply retrospectively, and that is reflected in the modern award's review 2012 decision by the Full Bench. And they provide that at paragraph 112 or at page 33 specifically of that decision. So I won't take you to the paragraph specifically, but I am sure your Honour is familiar with that decision. But the retrospectivity points are located on page 33.
PN192
It is the general feeling, or what's come out of that Full Bench decision, is that they take that retrospective application could operate if there were exceptional circumstances that warrant a retrospective date. We say exceptional circumstances exist in this case because if variation was made today, it could be taken to imply that between the commencement of the award on 1 January 2010, just say if we use today's date, that tool allowances was payable to all employees and that the change is effective as of now. So there is a possibility that employees that didn't pay that tool allowance for that period could be found to have been in breach of the award for two years. Or there could be claims of back-pay to employees that never received that tool allowance between 1 January 2010 and now.
PN193
This protection, Commissioner, has been provided to employees in two cases which we ratify where a modern award has been varied under section 160 of the Fair Work Act. And I provided these two cases to the Commissioner yesterday and to the parties yesterday. The first one is the Master Plumbers and Mechanical Services Association in the matter of the Plumbing and Fire Sprinklers Award [2011] FWA 4781. At paragraph 4 of that, you see that the Master Plumbers assert that retrospective application in that particular case is necessary to ensure that the protection in section 167 of the Fair Work Act. Now, if you go to in particular subsection 167(3) of the Fair Work Act provides that if a person is engaged in conduct before the determination of a variation that was made, but for the retrospective application the conduct would not have contravened a term of the modern award, a court must not order a person to pay a puniary penalty in relation to that conduct on the ground that the conduct contravened a term of an award.
PN194
On that Watson SDP granted the retrospective application to protect employers exposed to potential non-compliance in relation to the conduct prior to the variation being made. The Senior Deputy President's decision is on the very last page of that decision on page 22 at paragraph 87.
PN195
THE COMMISSIONER: Is there any equivalent provision that would, if your variation were accepted, protect the employees from a claim that the monies that they had already been paid be repaid as they were paid by mistake?
PN196
MS VACCARO: Yes. I was just about to get to that, Commissioner. There is an example of that recently, or in 2010. It's a decision of Lawler VP and they were also provided to your chambers yesterday. In that, that was an application by the Australian Industry Group to vary the Telecommunications Award. In that case, there was a concern that retrospective application would be disadvantageous to those employees that did receive the entitlement prior to the variation being made. And so Lawler VP made the order for retrospectivity to apply, but then made a further order that employees should not be obliged to repay wages and other wage related payments on the variation retrospective date, the retrospective effect.
PN197
So we would be seeking, your Honour, something similar to that order if you sought that it is necessary. And that's a very short decision, so you're looking specifically at paragraph 4 where Lawler VP sets out his rationale for making that two-pronged order protecting the employer and employees. And finally, I would just like to touch on some of the issues that were raised by the unions in their written submissions. The SDA and AMWU in their written submissions say that the AI Group's application cannot be validly heard as part of a two year review because we characterise the tool allowance error an error, and not as an anomaly or a technical problem. We say that I guess that's neither here nor there.
PN198
In our view, an error is akin to an anomaly or technical problem. We refer specifically to the general meaning of the word anomaly and error. So the Macquarie Dictionary defines anomaly as a deviation from the common rule or analogy. The SDA in its written submissions at paragraph 10 provides a similar definition but refers to the Oxford Dictionary definition, which defines anomaly as an irregularity of condition. So we say it's those definitions that are relevantly similar. And then if we turn back to the Macquarie Dictionary and find error, error is defined as deviation from accuracy or correctness.
PN199
Now, the terms accurate and correct are defined as, in effect, a comment, or acknowledged or an accepted standard. So if you turn back to the definition of anomaly as we understand it as the dictionaries have put, it could be said that the error is a deviation from a comment, acknowledged or accepted standard. So we would say that our application is capable of being dealt with as part of the review by your Honour, and does feel that paragraph 62(b) of schedule 5 of the Transitional Act because an error and anomaly are one and the same. Furthermore, the Full Bench preliminary issues decisions doesn't minute the matters that the Commission had regard to in undertaking the review of the modern award.
PN200
For example, at paragraph 48 of that decision the Full Bench fell short of deciding that the review is limited by specific matters mentioned in sub-item 620 of schedule 5 of the Transitions Act. And it follows that he understood from that sub-item 6(2) is not exhaustive. Nonetheless, and despite the subjects we have just put, Commissioner, to the extent that the Commission may decide that an error is identified but is not (indistinct), then we request that the Commission deals with the proposed variation on its own motion. This is possible because of what the Full Bench says in the preliminary issue decision at paragraph 41, and there they say:
PN201
In the event that the review of the modern award identifies an ambiguity, or uncertainty, or an error, or there is a need to update or omit the name of an entity mentioned in the award, and there is some doubt as to whether the matter falls within the scope of sub-item 6(2)(e), then the tribunal may exercise its powers under section 159 or 160 on its own initiative.
PN202
So we say that nonetheless, that applies. The SDA also in their submissions refers to a decision K1059 and we say that it's relevant to the AI Group application. And in that decision, that piece in particular concerns a clause which was inserted by consent into the Vehicle Industry Repair Services and Retail Award 1983. It was a clause that incidentally dealt with meal allowance and rest clauses, so an issue that we are still debating now. A clause meaning by consent that the parties from the decision can be ascertained that the union parties and the employee parties had a different understanding of how that clause that was inserted by consent was to apply in a practical sense.
PN203
The Commission decided not to make the variation that was sought by the union at that time because the intention, they say, does not meet the variation despite there was a misunderstanding or a non-alignment of how that consent clause was meant to apply. We say that this case can be clearly differentiated from the modern award, and simply the most obvious reason is because paragraph 19.4(b) was inserted into the modern award not by consent of the parties, but it was proposed to the Commission by one of the parties and thereby adopted by the Commission on the premise that the status quo in respect of tool allowance would be maintained. And decided by the other parties during the award modernisation in respect of the tool allowance provisions (indistinct) to consent.
PN204
So just because it wasn't raised at that time doesn't suggest that the parties consented to it going in. A further differentiating factor is that the parties in the VBEF case had a different understanding and intent on how the tea break clause or rest break clause inserted by consent was to operate. And this matched intention doesn't feature here in respect of 19.4(b). The unions haven't made a submission that they never intended for the status quo to not be maintained in respect of tool allowances during the making of the modern award. It was an understanding by the parties that the status quo would be maintained. The Commission understood that, that that was the intention of the Commission as well, and it just happened that in drafting it was not.
PN205
And the final point I would like to raise is a proposition put forward by the AMWU in submissions they filed last night. They argue that paragraph 19.4(b) should remain regardless that it was included by error because non-trades persons are required to sometimes use tools as part of their job, and we don't agree with that proposition. The difficulty with that proposition is that there is no evidence before the Commission that makes this opposition good. So we would say that we can't rely on that assertion just based on what was put by the union's submission and the fact that there was no further evidence provided to support it. Commissioner, unless there are any further questions, they are my submissions in respect of the tool allowance provision.
PN206
THE COMMISSIONER: Thank you. Do any of the other employer parties wish to make any submissions in support of the AIG's application, apart from what they have already put in their submissions?
PN207
MR CHESTERMAN: Commissioner, I would like to. And once again, I would have to say that what my friend from AIG has said in a number of respects is what I was going to say. That as I indicated earlier, it was always the intention that the status quo would be maintained in respect to the application of award provisions, and none of these were ever seriously discussed or there was no dissent as to what went in the award subsequent to the Full Bench issuing the new Vehicle Manufacturing Repair Services and Retail Award. The other thing I would say is it was an error on my behalf and I can actually prove that because I had some documentation here that I would like to tender to the Commission if I can.
PN208
Unfortunately I can't, obviously I haven't provided it to everybody. It will give the Commission an idea of how this error occurred.
PN209
THE COMMISSIONER: Thank you. You can tender them. Would you like to explain what they are?
PN210
MR CHESTERMAN: Thanks, Commissioner. Commissioner, you have a document which is Commission print T3920, a decision of Commissioner Lewin in Melbourne in 2000. That is actually the outcome of the award simplification process. Now, it is an extract of the award. I have provided the index, but not all of it, except the clause relevant to tool allowance, trades and apprentices, which is shown on page 40 at 5.1.2(a)(iii). And in that is what's headed the same clause as I believe went into the final modern award, Tool Allowance, Trades Persons and Apprentices. Now, when I drafted the award that combined both the Vehicle Industry Award and the Vehicle Industry Repair Services and Retail Award, on 21 April 2009 I sent the award in its draft form to Commissioner Gay.
PN211
In that draft you will see at the bottom of page 25, 25.4, headed Tool Allowance For Trades Persons and Apprentices. I had started the provision with:
PN212
A trades person required by an employer to provide their own hand tools should be paid in addition to rates where a prescribed allowance of $10.60 per week to supplying and maintaining tools ordinarily required in the performance of their work as a trades person.
PN213
Subclause (b) I then said:
PN214
An employee employed in any of the vehicle industry classifications in section 1 - vehicle industry manufacturing – shall be paid a tool allowance of $13.70 per week to differentiate between the two allowances.
PN215
If I take the Commissioner back to the original Vehicle Industry Award extract, then it can be seen that it's quite clear from 5.2.1(a)(iii)(A) that:
PN216
A trades person required by his or her employer to provide his/her own hand tools shall be paid in addition to the rates already prescribed and allows for $10.50 per week for supplying and maintaining tools that are ordinarily required in the performance of work as a trades person.
PN217
And then when the new award was issued, as my friend from AIG quite rightly pointed out, in 19.4.1, despite the fact that the heading was Tool Allowance for Trades Persons and Apprentices, (b) then says:
PN218
An apprentice employed in any of the vehicle industry classifications.
PN219
In section 2:
PN220
Vehicle manufacturing employees will be paid a tool allowance of $13.70 per week.
PN221
And it was plainly in error that I had not put a trade's person and instead I put an employee employed. I have read the comments made by the AMWU in their submission that they filed last night about the fact that cogent evidence would be required to demonstrate that there should be a change as a result of the variation sought by one of the parties. In my view, I totally support the view put by AIG in respect to the fact that a mid-term review does cover anomalies and technical issues. I would say that it's an anomaly as far as I'm concerned and it was my drafting error that created this problem. I would also say that in the decision - - -
PN222
THE COMMISSIONER: Well, it's anomalous, isn't it, that the current award allows somebody to get a tool allowance even though they don't have to provide their own tools. I mean, that's an anomaly in itself, isn't it? That you get an allowance under this award for being at work.
PN223
MR BAUMGARTNER: That's right, regardless.
PN224
THE COMMISSIONER: Because tool allowances were normally paid because you supplied your own tools.
PN225
MR CHESTERMAN: Yes, correct.
PN226
THE COMMISSIONER: And I'm right, aren't I, that the way it's actually worded here, everybody should get it.
PN227
MR CHESTERMAN: My provision?
PN228
THE COMMISSIONER: No. The provision in the current award - - -
PN229
MS WEBER: Commissioner, I realise it's not my turn to speak right now. I am aware that that would be anomalous. And what I put to the AI Group yesterday in Mr Chesterman's presence was a proposal that the clause be amended to specify, as it is with to the preceding clause, that the allowance apply to the manufacturing employees where they are required to provide their own tools.
PN230
MR CHESTERMAN: As far as I'm concerned, Commissioner, that was never the intention.
PN231
THE COMMISSIONER: No. I appreciate that that's your submission, but if the argument is going to be run that the clause is not anomalous, I'm not sure how you could run an argument that it's not an anomaly when it's paying an allowance in circumstances where you don't even have to provide their own tools, you just get it. And that strikes me in that old sense of the word used in the industrial parlance, an anomaly, as being an anomaly that you would get paid a tool allowance when you are not required, whoever you are, to supply your own tools. What am I getting the allowance for?
PN232
MR CHESTERMAN: Correct.
PN233
THE COMMISSIONER: But I appreciate that your point is that that proposal isn't sufficient because you say it was never intended to extend the availability of the tool allowance to people who were not entitled to it under the predecessor award.
PN234
MR CHESTERMAN: Yes. Correct, Commissioner. And we would say, one of the other things I would say, is that if this matter had been raised during award modernisation, then there might be some issue as to whether there should be grounds for AIG raising the application, and VACC supporting it. But I would say in our submission under the decision handed down by the Full Bench on 29 June 2012 headed by his Honour Ross J, [2012] FWA FB 5600. At page 89 the Full Bench said in relation to matters that would be discussed and reviewed in the mid-term review:
PN235
In circumstances where a party seeks a variation to a modern award in the review, and the substance of the variations sought has already been dealt with by the tribunal in a Part 10A process, the applicant will have to show that there are cogent reasons from departing from the previous Full Bench decision, such as a significant change in circumstances which warrant a different outcome.
PN236
MR WALDREN: Sorry to interrupt. I wonder if Mr Chesterman could adjust the microphone please.
PN237
MR CHESTERMAN: Can you hear me now?
PN238
Mr WALDREN: Yes, thank you.
PN239
MR CHESTERMAN: Thank you.
PN240
THE COMMISSIONER: You're effectively saying there was never any debate about it, it was not an issue, the parties had always agreed that the status quo in relation to these allowances would be maintained and therefore is not an example of where you already had one bite of the cherry and lost, and you're coming back to have another one.
PN241
MR CHESTERMAN: That's our position entirely, Commissioner. Thanks, Commissioner, that's all I need to add.
PN242
MR BAUMGARTNER: Commissioner, just in support. I think the case that the AIG has put forward in their application is correct and we would support it. And also, the comments of Mr Chesterman. It was the intention to maintain such allowances as they were. This was a departure from that, clearly in error, and it ought be corrected to what it should have been. That is the simple position we would take.
PN243
THE COMMISSIONER: Thank you. Does anybody in South Australia wish to make any comment about the submissions that have been made?
PN244
MR SHEEHAN: Yes, Commissioner. We would support the submissions made by the AIG which were endorsed by the VACC and the MTA New South Wales. We would support that completely. Thank you.
PN245
THE COMMISSIONER: Thank you.
PN246
MR WALDREN: Commissioner, as indicated by my colleague, Mr West, we support AIG's application in this issue, but we also support Mr Chesterman's views and explanation on why this occurred in the first place. Thank you.
PN247
THE COMMISSIONER: Thank you. New South Wales?
PN248
MR WIMALARATNA: Yes, Commissioner. As we stated in our written submission, we do support the application by AIG. In addition, what we'd like to just mention is the Australian Industrial Relations Commission in polishing the draft award has stated that it was not the intention of the Commission to depart (indistinct) provisions of previous awards in that industry. And we submit that the tool allowance now applies to all employees. And also, the fact that the allowance applies to irrespective of whether the person is a boss or provide their own tools, this is (indistinct) awards and it was the intentions of the Australian Industrial Relations Commission.
PN249
As such, we submit that this provision is certainly in error and should be granted in the terms sought by the Australian Industry Group. Thank you, Commissioner.
PN250
THE COMMISSIONER: Thank you.
PN251
MR VERNER: We support the application of AIG. We wish to say we make no further submission.
PN252
THE COMMISSIONER: Thank you. Do you wish to say anything? Sorry, no. Now, AMWU?
PN253
MS WEBER: Thank you, Commissioner. There are a few paragraphs which are paragraphs 16 to 24 of our outline that I forwarded to your chambers last night. I will take those as read and I don't wish to repeat them if that's amenable to you. What I do wish to say, however, is that in my submission the real question here, notwithstanding what anybody's intention was in 2009, is whether or not it's necessary by reference to the modern award's objective that a tool allowance be able to in non-trades employees in manufacturing who are required to use their own tools. We recognise that on the face of the current provision there is an anomaly in that there may be employees, for example driver classifications in manufacturing who don't require tools or don't use tools, and then it would be anomalous to provide to them an allowance for something that they don't do.
PN254
That is why I propose that the more appropriate way to fix that anomaly would be to insert words into 19.4(b) so that the provision reads, 'An employee employed in any of the vehicle industry classifications in section 2 vehicle manufacturing employees who are required by an employer to provide their own tools, will be paid the tool allowance'. That deals with the apparent anomaly on the face of the provision. My submission is simply that what we are talking about here is a fair and relevant safety net for employees. The employees were talking about people who were in vehicle manufacturing. It is, on my submission, pretty obvious that people who work in manufacturing shops use tools, and it's a matter of basic fairness that if they are required to bring their own tools, that they be compensated for that, which is the very basis of having the allowance at all.
PN255
The mere fact that predecessor awards didn't contain an allowance for that discrete category of employees shouldn't stymie the Commission from considering at this point whether or not a fair and relevant safety net for these employees mandates that they be compensated. And the basis of the allowance is self evident. To say now that the manufacturing employees shouldn't be entitled to compensation for using their own tools simply because historically somebody said something else is, in my view, insufficient to take away an allowance. And the point of fact is that since 2009, since this award was published, the award is unambiguous. They have been paid this allowance. They should have been paid this allowance. So the real question is whether it is necessary for a relevant safety net having dealt with the anomaly issue. And it's on that basis that we say the variation should be rejected, but the clause should be amended to deal with that.
PN256
THE COMMISSIONER: Do you agree that it's an error?
PN257
MS WEBER: I don't have the benefit of having been there at the time. Coming from a background of not having been part of the award modernisation process with this award, this particular award, my view is that if Mr Chesterman wasn't in the room, the documents that are provided aren't conclusive either way. It's clear that there was an anomaly about people who don't use tools, but all these documents show is that there were various drafts produced not by the tribunal, but by an interested party, which may or may not have had an error in them.
PN258
THE COMMISSIONER: Did the AMWU produce a draft?
PN259
MR CHESTERMAN: The AMWU produced an award, yes they did.
PN260
THE COMMISSIONER: And what did that award say about tools allowance?
PN261
MS WEBER: I have to take that on notice, Commissioner.
PN262
MR CHESTERMAN: I'm pressure sure that predominantly it would have been exactly the same as what would have been in the award, I would presume. Because as I said, there was just award clauses weren't comprehensively discussed. In fact, they were hardly discussed at all.
PN263
MS WEBER: But on my submission, I say that that shouldn't be determinative in this matter.
PN264
THE COMMISSIONER: But it would be if I was to use my own powers to vary the award to correct an error, because I have that power. And it would be relevant if it was agreed that in fact it is the AMWU's view as to whether it is an error or not is relevant because, as you saw in that case that I think the SDA took you to, if you had different intentions at the time, you had an intention that everybody was going to get the tool allowance, and you had the intention that the status quo was going to be there, then there's a different situation to a situation where in fact it was the intention of both parties that he tool allowance provision be maintained as the status quo, and by error that didn't happen. And I have got the power under the Act to amend that error because there's an argument about assists both the common law and here, that you don't take advantage of another party's error.
PN265
MS WEBER: I recognise that the Commission has the powers as set out in the preliminary decision at paragraph 41. I don't quibble with that. In terms of whether or not it was an error, what I would say is that it simply wasn't discussed at the time of the Part 10A process. And that's something quite different to an error, in my submission.
PN266
MR BAUMGARTNER: I should say, though, it was discussed that we would maintain all the allowances as they were. There was never any suggestion during that process – because I was involved in it – that we would alter a clause in a fundamental way. So I mean, that's the simple fact of the matter at the time.
PN267
THE COMMISSIONER: And in relation to the suggestion that you put forward, which is that it simply provides that anybody who is required by their employer to provide their own tools is paid an allowance, wouldn't that simply create another anomaly in the award, which was that if I am in the repair services section of the award I've got to be a trades person, but if I'm in the manufacturing part of the award I don't? There may be a case that says the historical basis of these provisions, the situation has changed, now other people are required to provide their own tools, and they should get an allowance for it. But simply making the change that you are proposing would end up with a situation whereas a tradie in the repair services I get it, if I'm not a tradie I don't, but in the manufacturing sector I do. I mean, that just creates another anomaly.
PN268
MS WEBER: The other way of dealing with that particular problem would be to insert a sub-provision which says that if a manufacturing employee is required to use tools, then those tools would be provided by the employer to avoid the situation where a non-trades person employee is required to use their own tools without compensation.
PN269
MR CHESTERMAN: Look, in all honesty, Commissioner, as we have said on a number of occasions, this tool allowance has historically both in respect to the RSNR Award and the Vehicle Industry Award been confined to trades persons and apprentices. Now, if the substantial evidence before a Commissioner demonstrates that other people, maybe trades persons, assistants, are required to bring and use their own tools, then there may be a case for this. But in my submission, what we are looking at – and I openly admitted that it's an error on my behalf – is to amend an anomaly by the mid-term review of an issue that I don't see which should be an issue.
PN270
THE COMMISSIONER: Does the AMWU have any further submissions they wish to make on this point?
PN271
MS WEBER: Only very quickly two things. I have already made submissions which I won't repeat, but as an alternate I would propose that if the Commission is minded to make that variation, then it may be appropriate to insert some provision along the lines of what I just referred to, which is that if employees under the manufacturing classifications are non-trades employees, are required to use tools, then those tools must be provided by an employer, the underlying rationale for which should be obvious on its face. In relation to retrospectivity, the concern of the AMWU simply is, as something which has already been discussed, which is an employee who has been receiving this allowance may be in a situation where they need to pay a wage claim to an employer, and we say that's unfair in circumstances where the award rightly or wrongly currently grants them an allowance.
PN272
So if that order is made, then steps need to be taken to ensure that those sort of wage claims against the employees cannot proceed. Other than that, Commissioner, I have no further submissions.
PN273
THE COMMISSIONER: SDA?
PN274
MS FOX: Thank you, Commissioner. I guess we would – I am not in a position to comment in regards to the aspect of error and the intentions. I wasn't part of the award modernisation process at that time. But I can seek the comments of the industrial officer in our office who was, and maybe provide some feedback. The only other issue would be the retrospectivity, and again I rely on our submissions made in regards to that matter, and simply say that there has been two and a half years in which a section 160 application to vary could have been made by AIG, or VACC, or MTA in regards to this matter. So the issue of disadvantaging employees who had been receiving something for that period of time is concerning to the SDA.
PN275
And I would just state that if it had been such a concern, then maybe they should have approached them in that manner in regards to an anomaly, to an error, ambiguity, et cetera. That's all, Commissioner, thank you.
PN276
THE COMMISSIONER: Does the AIG wish to response to anything that has been said?
PN277
MS VACCARO: Yes, Commissioner. There's just a few points. In respect of the proposition put by the AMWU, it has made its point pretty clear that the (indistinct) it's mainly on the basis that it's not a matter of history, but it's moreso much the committing of their attention of what the Commission intended (indistinct) time. The intention clearly wasn't to extend the tool allowance beyond trades persons and it's simply clear as that. In respect of the AMWU's draft award at the time of the making of the modern award, I have just had the opportunity – and thank you to my friend from ABI for assisting me in bringing it up – I have just had the opportunity to check the AMWU's draft award that was filed on 6 March 2009 and it appears to us just on a very quick reading – I have to provide this to the Commission later today when I get back to the office – but it appears that on the AMWU draft filed on 6 March that no tool allowance appeared in the allowances clause.
PN278
So I'm not sure if that takes us anyway, but I thought I would just make that point. And in respect of the SDA's claim that we had two years, we have been waiting for the review to raise issues such as this, and we thought the two year review is the most appropriate time to raise issues with those anomalies and technical problems. And that was the view of the then tribunal that a lot of these matters should be, I guess, referred to review, or we should wait until the two year review. Also in respect to section 160, it wasn't until 1 January this year that the employer organisation, such as AI Group, and I know that there are some exceptions that it fell through the net, but it wasn't until 1 January that employee organisation were able to bring matters on the basis of 160.
PN279
So that submission by the MTA doesn't hold much weight. That is all, Commissioner.
PN280
THE COMMISSIONER: Thank you. All right, tow truck?
PN281
MR BAUMGARTNER: Yes. Look, not being aware that there was opposition to that provision, I haven't prepared anything additional today. We would be relying on the submissions that we made in our initial submissions in support of our application and that item 15 is found on page 9 of our submissions. At paragraph 43 it reproduces the provision that was in the predecessor award at clause 8(c). Have you got it there, Commissioner?
PN282
THE COMMISSIONER: Yes.
PN283
MR BAUMGARTNER: Yes. So what that says is that, and it quotes the clause, it starts with the driver tow truck and has the different classes and the rates, and over the page on page 10 of our submission it's reproduced, and it says that:
PN284
An employee employed as a driver of a tow truck shall be paid in addition to the appropriate rate set out above, the amount of $16.05, which shall not be subject to penalty additions.
PN285
So the old award has that in there, but in the drafting of the final award that came out, those additional words "which shall not be subject to penalty additions" disappeared. This was always meant to be a flat money allowance. I guess for the exigencies of the work of a tow truck, maybe some of the disabilities they suffer with the nature of the work that they perform, this was an allowance that has always been paid in the award. But it wasn't something based on skills and ability and it's distinguished from the rates at clause 33.5(a) and (b) which are the skill based issues where allowances which are treated different in the award. And in some cases they may be subject or treated as a rate pay per week and be subject to penalty additions in that way.
PN286
So essentially what we have done in the proposed variation, is pick up on those words and standardise them in a way which are similar across the award by slightly amending them to read those words to read which will stand alone and not be subject to penalty additions. So it is, in a sense, similar to again, I guess, to an error similar to the tool allowance that in the drafting of the award that we have outed it. So we don't want a situation where that benefit is subject to penalty additions in the future, and certainly in the past. I mean, we have indicated a view on retrospectivity in our submissions. And in relation to this proposed variation it should also be retrospective because it could have been a situation where someone claims that it should be treated in the way of the penalty additions.
PN287
We haven't had such a claim, but potentially that's available and so it should be retrospective. Apart from that provision, I should mention that the Business South Australia adjustment of our wording at 28.1(b) has been considered by the MTA New South Wales, but they are remiss in not passing that on to the other organisations in the country. So I cannot comment on their behalf. But we have no problem with the variation or the suggested change in that regard to the wording that we put forward in relation to that clause in their submissions. I'll point you to where that is. That's on page 8 of the Business South Australia's submissions. It's the wording at 28.1(b) where they distinguished the clauses quite precisely by saying paid employees covered by clause 36.
PN288
THE COMMISSIONER: Page 8?
PN289
MR BAUMGARTNER: Sorry, page 8.
PN290
THE COMMISSIONER: Page 8, 28.1(b)?
PN291
MR BAUMGARTNER: Yes. The MTA New South Wales has no problems with that specific delineation of the relevant clauses that are excluded.
PN292
THE COMMISSIONER: Sorry, I was looking for something relating to tow trucks and I couldn't see it.
PN293
MR BAUMGARTNER: No. I've moved on from tow trucks, I'm sorry. Yes, on the tow trucks there's nothing more that I would add. We think it's a simple error. In relation to the Business South Australia issue, we indicate – and I didn't do it earlier – that we do support that change of wording. Just dealing with a couple of things while I'm on my feet. The coverage issue has been dealt with, I think. So I think we are probably at the end of it. The only other issue that we would deal with is the issue of retrospectivity. I probably don't say more than what's in our submissions anyway on that.
PN294
THE COMMISSIONER: If I were minded to, for example, grant your application in relation to the tow truck drivers and, for example, grant the AIG's application in regard to the tool allowance, if I was going to do that, would you have any objection if I also made an order that no claim for overpayment could be made against any employee who had been paid in the case of the tow truck driver had that amount included in their base rate of pay and had their penalties calculated on top of it.
PN295
MR BAUMGARTNER: We would have no problem with that, no problem. I mean, I deal with retrospectivity at paragraphs 52 and 53 of our submission. That's pages 11 and 12. And really, it's those items within our proposed amendments that really correct errors, omissions, or ambiguity and ought to properly be made retrospectively. That's the extent of it. I mean, from our point of view really, only two items, items 3 and 16 of our application, would need to be prospective. Three and 16 in my submission would need to be prospective; everything else would need to be retrospective, in my submission.
PN296
THE COMMISSIONER: Do any of the other employee organisations have any submissions they wish to make in relation to the tow truck issue? No, okay. SDA?
PN297
MS FOX: No, I have nothing on that.
PN298
THE COMMISSIONER: AMWU?
PN299
MS WEBER: Only very briefly. Notwithstanding the wording in the previous federal award, it is unclear to us on the face of the MTA's application and on their submissions, what the basis is for the distinction between tow truck drivers and drivers of commercial vehicles and articulated vehicle drivers, which are the two provisions above it, which are treated differently if the variation is allowed.
PN300
THE COMMISSIONER: Isn't it because for the commercial vehicle drivers, they get the additional allowance because they drive? So you've got a rate for the driver, and then for each additional tonne - so you get the rate for driving up to 8 tonnes, and then for every tonnage over that you get an extra amount, and that's what you're getting paid for: your ordinary work.
PN301
MR BAUMGARTNER: Yes, that's correct.
PN302
THE COMMISSIONER: So it is directly related to the size of the truck you are driving. And so instead of having a rate for going up to heaven's knows what the triple things are going to be weighing, in the award it just provides an increasing rate of pay the bigger the truck you drive.
PN303
MR BAUMGARTNER: That's correct.
PN304
THE COMMISSIONER: So it is different in that sense to the tow truck driver because there is no – all tow truck drivers get this allowance.
PN305
MS WEBER: It may be that that's the reason. It just wasn't clear to us on the face of the application or submissions, and that indeed wasn't in the submissions.
PN306
THE COMMISSIONER: I just need you to look at the award clause.
PN307
MS WEBER: If you look at the work that they're actually doing, then no doubt tow truck drivers have different tasks which require them to make assessments and retain skills that aren't possessed by other categories of drivers.
PN308
THE COMMISSIONER: If that were the case it would be in the base rate of pay, wouldn't it?
PN309
MR BAUMGARTNER: That sort of thing wouldn't be done by a tow truck driver generally speaking.
PN310
THE COMMISSIONER: What I mean is if this was related to the skill and the work that they were doing, then that doesn't get paid as – well, when this allowance was first put in, it was clearly not intended that it apply for all purposes. So the question, I suppose, is was there any evidence that when the modern award was made it was attended that it apply for all purposes?
PN311
MS WEBER: The factor on this application is that there is no evidence about what any intention was during the Part 10A process.
PN312
MR BAUMGARTNER: No. I think it was the intention to maintain the status quo on these allowances. I mean, that's the intention of the parties.
PN313
THE COMMISSIONER: And you would be saying that if it’s not something that is specifically permissible by the review, then it's permissible under the Act for me to amend the error.
PN314
MR BAUMGARTNER: That's correct.
PN315
MR EBLAN: At an appropriate time, could I make a comment about this issue?
PN316
THE COMMISSIONER: Certainly. You can do that now if you like.
PN317
MR EBLAN: My memory, and I'm relying on memory now, is that this additional amount for a tow truck driver was for having lift, carry, and tow, putting props up and doing all that sort of thing that's needed, collecting money in another section of the driving award. It was an additional allowance for a specific purpose, an additional duty such as money, such as insuring. You have to lift, carry and tow. I'll leave it at that. Thank you.
PN318
THE COMMISSIONER: Thank you.
PN319
MS WEBER: Commissioner, all I can say is that had it been made clear on the face of the submissions what the rationale for that loading is, we may have approached it differently. But as it is, there is no evidence about what the difference is and the effect of the variation would be to differentiate tow truck drivers from other drivers in the classifications.
PN320
MR BAUMGARTNER: I can't comment. If the union had put in replies, then we might have been able to respond.
PN321
MS WEBER: Clearly I can't comment on that.
PN322
THE COMMISSIONER: No. Silent would be best. All right - payment of wages on termination? The AMWU doesn't have anything further to say in relation to that?
PN323
MS WEBER: No, Commissioner.
PN324
THE COMMISSIONER: Does the SDA have anything to say in relation to that? This is you get your payment on termination. The latest you can get it is two business days after.
PN325
MS FOX: Commissioner, we'd probably only say it's not a huge issue for us, but really whether it fits into this review doesn't seem to be any cogent reason for requiring such a change. We have had no-one raise the issue with us. I don't think it's been raised by the ombudsman in any issue, so I am not sure what the great urgency is about this. I think it's probably a desirable request as opposed to a necessary one.
PN326
THE COMMISSIONER: So is there anything else that is wanting to be said in relation to this matter that is not in the current submissions?
PN327
MR VERNER: I have some additional submissions to make, Commissioner. We are seeking obviously the change. The issue is the reference to working day. Under this particular award, a working day can be and often is Saturday, Sunday, or even a public holiday. The award has a number of provisions where ordinary hours of work can be worked on Saturday, Sunday, or public holiday. And if someone is terminated, say, on the Saturday, it could be virtually impossible to meet the current payment of wages on termination. That is paid on the day or within the next working day, because the next working day would be the Sunday. And as far as payment by electronic funds transfer which is probably the most common way which payments are made this day that would be impossible to meet. So employers would be in breach of the award in that respect. When you look through the award there are a number of ordinary hours of provisions and for many employees that would include Saturdays, Sundays, and public holidays.
PN328
What we are seeking is obviously to change the reference to by forwarding such wages to the employee within two business days after termination, by business day we mean and we adopt the definition from the Act's Interpretation Act 1901, and business day means a day that is not Saturday, a Sunday, or a public holiday in the place concerned. And that is our understanding of the word business day, that's why we chose that particular word. Further, reference to the word forwarding, we would like a broad reference to that so it's not just forwarding by post. It could be by post, or electronic funds transfer.
PN329
By way of an example in the Graphic Arts Award itself, there is a reference in there to the payment of wages on termination that all monies are to be forwarded to the employee by post or electronic funds transfer. So we are not limiting the reference to forwarding just by post so if there are new technologies in the future, then they will apply as well. We had a quick look at the AMWU's submissions in response to our application, and basically, the submissions at paragraph 51 refer to the fact that we are revisiting a decision of the Full Bench under the Part 10A process that ABI had shown no cogent reasons.
PN330
From what I understand, there was one particular decision made by the Full Bench of the AIRC and it made the actual award, and that decision is award modernisation [2009] AIRC FB 826. From paragraphs 270 to 274 the Full Bench of the Commission discussed this Vehicle Manufacturing Award. At no point during that decision is there any mention of payment of wages on termination. So really, the role of the Commission in this matter is obviously to take into account what is required under item 6 of schedule 5 of the Transitional Act, and that is you have to consider whether the modern award's objective has been met and whether the award is operating effectively without anomalies. But that's not the only thing that you can consider. It's what you must consider, and you must obviously make that consideration in your decision.
PN331
But then when it comes to the variations that the Commission can make, under item 6, or sub-item 6(3) of schedule 5 of the transitional provision, it says that the Commission may make a determination bearing any of the modern awards in any way that the Commission considers appropriate to remedy any issues identified in the review. So there is no limitation on those awards that you can make, Commissioner, in this process. The only limitation might be in sub-item 6(4) which says the modern award's objective applies to the Commission making a variation under this item. In other words, we have no limitations. Now, as far as the cogent reasons test is concerned, the tribunal is not bound by any previous decisions made by a Full Bench.
PN332
The principle of (indistinct) doesn't actually apply to the tribunal. What we have is that for reasons of comment, we normally do follow previous decisions unless you have got a cogent reason not to do so. In this case, here, we don't have a decision dealing with the payment of wages on termination. We have a decision that makes the award, and part of the award is clause 24.4. But that is not a decision that would be subject to what the Full Bench described in its guidelines as requiring cogent reasons. In the guidelines judgement, that's the decision of 29 June 2012, at paragraph 89, it basically says:
PN333
In circumstances where a party seeks a variation from a modern award in a review, and the substance of the variation sought has already been dealt with by the tribunal in the Part 10A process, the applicant will have to show there are cogent reasons for departing from the previous Full Bench decision.
PN334
The substance of our application was not dealt with by a Full Bench in any way whatsoever. In support of that, we also looked at probably I think the first decision that was delivered under this particular review, and that was in the oil and gas industry by Watson VP. The citation is [2012] FWA 7212. At paragraph 20 of that decision, his Honour says:
PN335
Where an evidentiary case has been presented, direct submissions have been made and the Tribunal has made a determination about the relevant award provision on the basis of that material, cogent reasons will need to be advanced for departing from the award provision.
PN336
Further in paragraph 27 of the same decision by Watson VP, his Honour says:
PN337
It is necessary to show that there are cogent reasons for departing from a previous Full Bench decision. I do not take the 2012 Review Full Bench to be extending that proposition to all award conditions - otherwise the review would be of little utility and it would be doubtful that the Tribunal would be carrying out its statutory obligation to consider at the time of the review and on the material presented at the time, whether the Award achieves the modern awards objective.
PN338
So the submissions of the AMWU, we say, are erroneous where there is no requirement to provide cogent reasons. It is simply a matter of the Commission considering the sub-item 6(2) of schedule 5 of the Transitional Act, and then the Commission is entitled to make any determination or any variation it considers appropriate to remedy the issue. And the issue that we have raised is the problems faced by employers in making the termination payments in time on the current wording of the award. We also rely on the fact that based on the current wording of the award, we say that the modern award's objective is not being met. If we look at the modern award's objective at section 134(1), the introductory paragraph says:
PN339
PN340
I mean, fair has to be fair to both sides, not fair to one side. And to maintain or to retain the current payment of wages on termination clause would be unfair to many employers because they could technically be in breach of that clause. Further, we say that the modern award's objective is not being met because of the need to promote flexible modern work practices. The amendment that we seek to the award is not a significant amendment, but it does provide a flexible modern work practice which gives the employer, hopefully, sufficient time to make any payments on termination. And finally, if you look at section 134(1)(f), which is part of the modern award's objective which deals with the likely impact of any exercise of the modern award powers on business including the regulatory burden.
PN341
And it would be a burden on employers to have to pay termination pay for say, for example, an employee that has been summarily dismissed late on a Friday, or summarily dismissed on a Saturday where they have to make payment of any outstanding wages on that day or the next working day, which could be the Saturday or a Sunday. And that would be virtually impossible to meet even under modern banking practices. So by including a reference to payment as we had within two business days after termination, we say that that gives employers hopefully sufficient time to make the payment. It would then be a fair term which would meet the modern award's object which we say is not being met at the moment.
PN342
And also by using the word 'forwarding' is not limited to post, but to any other method where you forward a payment to an employee, including electronic funds transfer. We say the Commission is not prohibited in any way in making the variations sought by ABI. It is clear that you have the power to do that under sub-item 6(3) of schedule 5 to the Transitional Act. Certainly, we also say that if you look at sub-item 6(2) which is the things that the Commission must consider, we would say that this is a technical problem with the award, it's a technical problem that arose out of the Part 10A award modernisation process, and a technical problem that you are able to fix up in this review. Commissioner, they are my submissions in short.
PN343
THE COMMISSIONER: Thank you. Anyone else wish to make any submissions in relation to this matter?
PN344
MS FOX: Yes, Commissioner. Can I just quickly and very briefly go to some of the issues just mentioned in the oral submissions by ABI. Firstly, that if an employee is going to be terminated on a Saturday the employer would have had knowledge of that impending termination. I would hope that some thought and preparation would have gone into such a decision to terminate someone and final pay arrangements probably would have been one of those considerations. Also in the issue regarding forwarding, clause 24.1 talks about the arrangements, whether they are paid in cash, or cheque, or direct transfer into a bank account or financial institution. And the reference to clause 24.4 at point 2, by forwarding such wages to the employee on the next working day, the previous award stated by forwarding such wages to him – obviously no women worked in the industry – by post on the next working day.
PN345
So I would believe that the Commission in making this award did actually turn their mind to the flexibility of that provision because they have removed the reference to post, which is quite an out-of-date reference, and amended it otherwise. But in looking at again this wording, the SDA would not object by forwarding such wages to the employee on the next business day as a solution, rather than extending it to two days. But the next business day would still achieve the aim and objective being sought by ABI. Thank you, Commissioner.
PN346
MS WEBER: I simply support the submissions made by the SDA, Commissioner, particularly in relation to the proposition that the word 'working' be changed to 'business' and that should achieve the same result without having to extend the date.
PN347
THE COMMISSIONER: So the difference between you is one day?
PN348
MR BAUMGARTNER: Could I just say if we haven't said it, we support their application. We think it's a good idea. The thing is a bit out of date to be honest, and probably should have been addressed by us before this.
PN349
THE COMMISSIONER: Well, it was addressed in some sense because the bit about the person, if they were required to come back, you had seven days in which to get their wages together, but you had to pay them four hours.
PN350
MR BAUMGARTNER: Yes. All of that was in the concept of people being paid in wages or in cash. So it's never been looked at in the terms of the modern way of paying it.
PN351
THE COMMISSIONER: The issue, I suppose, I have is where is the evidence before me that it's a problem? I mean I'm addressing this to you. You say that it wasn't considered in the modern award process, and therefore there was never a decision, a conscious decision made on it. It wasn't agitated, and the modern award is not meeting the modern award objective, and you say that I can vary it or not restrict it to cogent reasons, but in effect saying I can look at it afresh. But where is the evidence before me if I'm looking at it afresh that says it's a problem?
PN352
MR BAUMGARTNER: It probably (indistinct) and some others have been of the award itself.
PN353
THE COMMISSIONER: Sorry?
PN354
MR BAUMGARTNER: Their ordinary hours can be worked on Saturday, Sunday, or a public holiday. For someone who is, say, summarily terminated on one of those days, it would be very difficult, if not impossible, for an employer to comply with the current wording of the award. That is a technical problem. I don't think I need evidence to show that. I can show you from the wording of the award itself, Commissioner.
PN355
THE COMMISSIONER: But those provisions have been in awards forever more. For over 100 years there has been a requirement that you pay somebody on the day they are going to finish up. And in the case of people that you are terminating on notice, that's not a problem. In the case of people who have given you notice, that's not a problem. It's a problem that arises in the case of summary dismissal only.
PN356
MR BAUMGARTNER: Or if somebody walks out.
PN357
THE COMMISSIONER: Or if somebody walks out. I haven't seen any case that I ever that any employer has ever been prosecuted in relation to this. And I'm sorry, what I am saying is how could I be satisfied that the modern award objective isn't being met when there is, you are saying to me it's just obvious. Well, if it' just obvious, it's been obvious for over 100 years.
PN358
MR BAUMGARTNER: I think probably people have applied it in the common sense and said you can't comply so nobody is prosecuting anybody about it. I think it's probably a good idea to make it more sensible for people rather than the way it is now, and certainly that would help. I mean, even the concept of business day, we shouldn't really be going to the Act's Interpretation Act for what that means. Maybe it should just simply say on the next business day other than a Saturday, Sunday, or a public holiday. Or excluding a Saturday, Sunday, and public holiday is probably a sensible way of writing it so that people understand it a bit better.
PN359
THE COMMISSIONER: Because I mean obviously for a lot of businesses they simply would not have their payroll people working on Saturdays, Sundays, and public holidays and therefore they have somebody in a summary dismissal situation to have to be able to calculate somebody's – is it only the wages that have to be paid?
PN360
MR BAUMGARTNER: Yes.
PN361
THE COMMISSIONER: So it's not the annual leave and long service leave, it's just the wages? Or does that include annual leave and long service leave?
PN362
MR BAUMGARTNER: That's right. No, that's correct, just the wages.
PN363
THE COMMISSIONER: Just the wages.
PN364
MR CHESTERMAN: The VACC would like to make a comment on this, Commissioner, after consideration of what you have said and the submissions made. I will say this, a lot of our members have problems with people walking out and it's a bit of a shock to the system when they walk out and it takes some time for them to organisation on what they have to do to pay out an employee who has walked out, given that there is a clause saying that they can withhold monies. And given that they are predominantly small business, particularly from our membership, and the fact that the Fair Work Ombudsman seems to take up a number of causes which makes us need to protect our members from those sorts of technical issues that I would think, as Ms Baumgartner has said it, it sounds a practical and modern and good idea to vary the award so it's more up to date. That's our only comment.
PN365
THE COMMISSIONER: And simply if you turned your mind to it when you were doing the modern award, you might have dealt with it.
PN366
MR BAUMGARTNER: Yes. It was too big a task, I think, for everybody at the time to deal with every little bit.
PN367
THE COMMISSIONER: I thought that was what the whole modern award process was supposed to do, was in fact this was supposed to be the main opportunity to actually fix up all those things that you wanted to fix up. But then I wasn't involved in the process fortunately. Okay, does anybody else want to say anything? Because really what the argument is about is two days as opposed to one, because everybody is in agreement that one is okay. Really it's an argument about two. Has anybody got anything they want to say about that? No, okay.
PN368
MR BAUMGARTNER: Well, if you put the words excluding Saturday, Sunday, and public holidays, then one day is alright.
PN369
THE COMMISSIONER: What do the other employees say about that?
PN370
MR VERNER: Could you repeat that please (indistinct) considered.
PN371
THE COMMISSIONER: What the MTA New South Wales said was that if it was amended to say one business day which excludes Saturdays, Sundays, and public holidays, that that would be okay.
PN372
MR EBLAN: Obviously that addresses what the parties are talking about. It's a bit wordy, but so be it.
PN373
THE COMMISSIONER: The application actually asks for two business days, and those business days also exclude Saturdays, Sundays, and public holidays.
PN374
MR BAUMGARTNER: Maybe I'll take that back.
PN375
THE COMMISSIONER: Okay. I think that suits. Are there any other specific matters that are not going to be discussed between the parties that I haven't picked up? So as I understand it, the AMWU is going to advise by close of business tomorrow about its response in relation to clauses 58 and 62. In other words, whether they accept that those provisions were only ever intended to apply to the manufacturing section of the award. And the SDA I don't think expressed a view on that, but obviously it in fact also affects your members because it's a question about whether it applies to the first section.
PN376
MS FOX: Commissioner, only historically going through some other issues I remember on this award, I thought it was always our view that there was no supervisory managerial classification in the RSNR Award. I think the SDA put in applications on several occasions to try and amend that proposition. So it is a bit surprising to read it in those terms, whether you call it supervisory or management. I guess I could state it is our understanding that no such classifications did exist, so it would be odd to see them here in the manner that perhaps they are being interpreted as.
PN377
MS WEBER: I doubt this is an issue, Commissioner, but out of an abundance of caution - - -
PN378
THE COMMISSIONER: No, I appreciate that. But if you could let us know by close of business tomorrow, then that will deal with that one as well. Then there are a number of matters which were outlined earlier which are going to be the subject of discussion between the parties, but short discussions because this is not the classification issue. This is simply sorting out the wording. How long do you think you will need to take to sort out those other matters?
PN379
MR BAUMGARTNER: I think we were planning to try to meet late next week. So we could probably discuss these matters then.
PN380
MS WEBER: Perhaps by the close of business Friday week then?
PN381
THE COMMISSIONER: Yes. What is the date Friday week, because I don't have a calendar?
PN382
MS WEBER: I think it's 18 January.
PN383
THE COMMISSIONER: Thank you. All right, so the parties advise what your agreed positions are so then we can at least sort out if there are any outstanding matters that require us to reconvene. Then there is the issue of the classification matters which you say you will take six weeks to consider. When is six weeks? 15 February, is that sufficient time for you to sort out the classification?
PN384
MR BAUMGARTNER: Yes.
PN385
MS WEBER: On that date to be clear, Commissioner, we indicate to you by correspondence, I suppose, what the agreed and non-agreed issues are.
PN386
THE COMMISSIONER: And if you have agreement about the classification and an explanation of the relativity, so that because the relativities issue is – I don't want to be creating any precedents by consent – is a relevant issue in terms of if it's done as part of the modern award review, or in any event. So you need to address that when you come back and provide an explanation or justification for the relativities that if you agree on them, that you have for that relativity. Then after the 15th, if in fact there are outstanding matters that you do not agree on, I will organise a telephone mention the following week for the programming of how we deal with the matters that you disagree on. Are there any other matters? Thank you all for your attendance today and for your submissions. And I will consider the submissions that have been made on those other matters.
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