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TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009 1049160-1
SENIOR DEPUTY PRESIDENT DRAKE
AM2013/15
s.160 - Application to vary a modern award to remove ambiguity or uncertainty or correct error
Application by Australian Industry Group, The
(AM2013/15)
Joinery and Building Trades Award 2010
(ODN AM2008/15)
[MA000029 Print PR986370]]
Sydney
10.15AM, TUESDAY, 12 NOVEMBER 2013
Continued from 16/10/2013
Reserved for Decision
PN20
THE SENIOR DEPUTY PRESIDENT: I do apologise for having kept you waiting. Yes, who is first?
PN21
MR S.SMITH: Would you like to take appearances, your Honour?
PN22
THE SENIOR DEPUTY PRESIDENT: Beg your pardon? I know your appearances from last occasion, but I'm happy - I'll just confirm that they are Mr Borg from the CFMEU, Mr Smith from the AIG, Mr Calver from the Master Builders and Ms Baxter from ABI.
PN23
MR R. CALVER: Yes, your Honour, it's a change of appearance from Ms Adam Chevich who appeared on the last occasion. If it please the commission.
PN24
THE SENIOR DEPUTY PRESIDENT: Okay.
PN25
MR SMITH: Yes, thank you, your Honour.
PN26
THE SENIOR DEPUTY PRESIDENT: Thank you. Yes?
PN27
MR SMITH: This is an application, as your Honour is aware, under section 160 of the Act to vary the Joinery and Building Trades Award, to remove ambiguity and uncertainty. We submit that paragraph 32.2(b) of the award is both ambiguous and uncertain, and that that ambiguity and uncertainty should be addressed through the proposed variation in our application to paragraph 32.2(c). Your Honour, this issue isn't academic; in AI Group's experience, employers are not typically paying shift loading on top of annual leave loading under this award. Recently, the CFMEU made a number of claims for the payments of the shift loading on top of the annual leave loading, which employers have not typically agreed with; hence why we found it necessary to make this application to remove the ambiguity and uncertainty. If I could tender two decisions which are referred to in our outline of submission that go to the jurisdictional issues.
PN28
THE SENIOR DEPUTY PRESIDENT: Yes, I've marked your submission AIG1, I don't think it's necessary to mark the decisions but I'll attach them to your submission. Thank you.
MR SMITH: Thanks, your Honour.
EXHIBIT #AIG1 WRITTEN SUBMISSIONS OF AIG
PN30
MR SMITH: The first authority is the key one in the Tenix case, which goes to the issue of the test that the tribunal typically applies in dealing with arguments about ambiguity or uncertainty in awards or enterprise agreements. In that case, at paragraphs 28 to 32 of the decision, the test is such that the party must first identify, and the commission must find that there exists an ambiguity or uncertainty, and then, secondly, if there is an ambiguity or uncertainty identified, then the commission may exercise its discretion to vary the instrument to remove that ambiguity or uncertainty. As highlighted in paragraph 29 of that decision, the decision cites some comments of Munro J in a case involving Linfox, where his Honour said:
PN31
The identification of whether or not a provision in an instrument can be said to contain an ambiguity, requires a judgment to be made of whether on its proper construction, the wording of the relevant provision is susceptible to more than one meaning. Essentially the task requires that the words used in the provision be construed in their context.
PN32
The Tenix decision, at paragraph 31, makes it clear that the commission will generally err on the side of finding an ambiguity or uncertainty, where there are rival contentions advanced and an arguable case made out for more than one contention. Your Honour, we submit that that clearly applies here, where AI Group and the other employers have identified one construction of the relevant provisions, and the CFMEU has argued strongly for a different construction. So we would say that there is an ambiguity and I'll come to the specifics of that in a moment. But we also submit that there is uncertainty in the provisions, and in the other decision that we've handed up. It's an order relating to the public service non-executive staff Victoria section 170MX award, an order issued by Senior Deputy President Polites. In that matter, his Honour adopted an interpretation of the word "uncertainty" to mean:
PN33
The quality of being uncertain in respect of duration, continuance, occurrence, liability to chance or accident; or the state of not being definitely known or perfectly clear; doubtfulness or vagueness.
PN34
THE SENIOR DEPUTY PRESIDENT: Where is that, Mr Smith?
PN35
MR SMITH: That is in the other decision that I handed up, your Honour, and that is - the paragraphs aren't numbered, but it's the third paragraph on the second page. It cites a decision of Commissioner Whelan in a matter relating to Coles Myer. We submit that this circumstance before the commission in these proceedings meets that definition of uncertainty. Therefore, the application meets the relevant jurisdictional arguments. Turning now to the specifics of 32.2(b) and the award; the actual wording from the award is set out in our written submission, but 32.2(a) states that:
PN36
Instead of the base rate of pay as referred to in section 90(1) of the Act, an employee under this award, before going on annual leave, must be paid the wages they would have received in respect of the ordinary hours the employee would have worked had the employee not been on leave during the relevant period.
PN37
Then, paragraph 32.2(b) goes on to clarify what is meant by that, saying:
PN38
Subject to 32.2(c), the wages to be paid must be worked out on the basis of what the employee would have been paid under this award for working ordinary hours during the period of annual leave, including applicable allowances, loadings and penalties paid for all purposes of the award, first aid allowance, if applicable, and any other wages payable under the employee's contract of employment, including any over-award payment.
PN39
32.2(3) is the sub-clause about the annual leave loading, and it sets out that there's a 17 and a half per cent loading, payable on the minimum wages, loadings and allowances prescribed in a list of seven clauses of the award, or six clauses and various subclauses of clause 24. We would submit that it's beyond contention that that particular provision, subclause 32.3, is to be interpreted that the leave loading is calculated on a rate of pay which does not include shift loading, because quite clearly, it's saying that the leave loading is to be calculated on the wages calculated in accordance with specific clauses, so there's a particular starting point for this calculation and the leave loading is payable on a particular rate.
PN40
So the argument, it seems, is not about whether the leave loading is loaded on top of the shift loading, but whether the shift loading and the leave loading are applied to the same starting point, if you like. I don't think the CFMEU are even arguing that the two load on top of each other; the issue, even in the CFMEU's arguments relate to, as we understand it, the issue that the employee should get both loadings. In the joinery award, the shift loadings are found in clause 28, and therefore for the purposes of the leave loading clause, we would submit that wouldn't apply.
PN41
The issue in contention is whether 32.2(b) requires that shift loading is payable during a period of annual leave, so as to entitle the employee to the shift loading as well as the annual leave loading payable on that particular starting rate. We would submit that paragraph 32.2(b) is, as I've said, both ambiguous and uncertain, and that the relevant wording that goes to the argument is the wording in 32.2(b) which talks about applicable allowances, loadings and penalties paid for all purposes of the award. We say that what that must mean, is that it's saying that allowances which are paid for all purposes of the award; loadings which are paid for all purposes of the award and penalties which are paid for all purposes of the award are included, but not other allowances, loadings and penalties.
PN42
We point out in our written submission, that because there is a section of the award entitled All Purpose Allowances, sub-clause 24.1, clearly the reference to "all purposes" in that phrase must be a reference to allowances paid for all purposes, and if the words "all purpose" relate to allowances, then surely they must relate to loadings and penalties, which are in the phrase between the word "allowances" and the words "for all purposes of the award." We cannot see that the intent would be other than an intent that provides that allowances, loadings and penalties paid for all purposes of the award are referred to, and that would mean allowances paid for all purposes, loadings paid for all purposes, and penalties paid for all purposes.
PN43
The shift loadings and allowances in clause 28 are not paid for all purposes of the award, and therefore in our submission, they are not covered by the phrase, "Allowances, loadings and penalties paid for all purposes of the award." Now, the only allowance which is separately identified in 32.2(b) is the first aid allowance, and that's not an all-purpose allowance. If any other loadings, allowances or penalties which are not all-purpose payments were intended to be included, then surely they would have been identified separately like the first aid allowance. If the word "including," was intended to operate in the extremely expansive way that the CFMEU contends, then there would be absolutely no point in singling outall-purpose allowances; all-purpose loadings; and all-purpose penalties; and the first aid allowance separately, because all allowances, all loadings and all penalties would be included if the CFMEU's construction was accepted.
PN44
The CFMEU in its submission endeavours to place huge weight on a heading in paragraph 28.3(d), which refers toShift Rates, and the CFMEU argues that the use of that heading above the shift loading somehow or other means that that's not a loading; but in our view, the payments in 28.3(d) are loadings, and if they're not loadings, then, undoubtedly they are penalties, how could they be anything other than a penalty - these are higher amounts that are paid for working on shifts, and in some awards those higher amounts are referred to as loadings; in other awards, they are referred to as allowances; in others, they are referred to as penalties, but the nature of them, of course, is that it is a higher loading or penalty for the purposes of the disability that an employee experiences by working at times which are outside the normal day work hours.
PN45
Under the Fair Work Act, quite clearly the relevant rate is the base rate of pay as set out in section 91, even though we of course accept that the clause in the award supplements that by saying that the provision in section 91 does not apply, but rather the provision in 32.2 applies in lieu of that. Notwithstanding that, we would submit that given the legislative provision, which does provide for the base rate pay to be paid as a matter of the tribunal's discretion and working out what should be provided in this area, and what do these words mean, the commission should err on the cautious side before accepting the union's argument that this extremely generous payment should apply for the purposes of annual leave, where someone on the union's argument would get not only the leave loading on annual leave, but also the very generous shift loadings that are payable under this award. Given the parliament has determined that the rate that employees should generally receive on annual leave is the base rate of pay without loadings, as I've said, we would urge the commission to take this cautious approach.
PN46
We would not be fair to require employers to pay both of those loadings; we would submit that that would not be consistent with the modern awards objective; in particular section 134(1)(f). Employees are not typically entitled to shift loadings as well as leave loadings during a period of annual leave. The history of leave loadings goes back to the 70s, and there was a major case, as your Honour is no doubt aware in the 70s relating to annual leave, where the unions pushed for leave loading. What came out of that case, was acceptance of a provision in the metal industry award for annual leave loading.
PN47
That clause - and it's still there today, in largely similar terms, has the same effect - provides that people get either the annual leave loading of 17 and a half percent, or they get a higher annual leave loading equivalent to the relevant shift loading, but they don't get the shift loading and the annual leave loading. That clause went into the metal industry award - I think it was the 1971 version from memory - but then it went into the 84 version of the metals award, in the Metal Engineering and Associated Industries Award 1998, and it's still there in the modern manufacturing award in clause 41.5.
PN48
The joinery award takes a different approach, where a worker is only entitled to the annual leave loading, rather than this idea of being entitled to the higher of the two, but that, in our submission, would be due to the fact that the shift loadings are extremely generous in this award and it's not unreasonable for an employee to only receive the annual leave loading on a period of annual leave. It would be completely unfair to employers to expect an employer to pay both of those loadings on a period of annual leave.
PN49
The purpose of annual leave loading, as was considered in those old cases, was to compensate employees for additional payments that they don't receive while on annual leave, like overtime, for example. But to give an employee the annual leave loading and the shift loading would amount to clear double-dipping. So in conclusion, we submit that paragraph 32.2(b) of the joinery modern award is ambiguous and uncertain, and the best way of addressing that ambiguity and uncertainty would be through the variation that we've proposed that would make the issue quite clear and would be consistent, as I've said, with our experience as to what employers are typically doing at the present time. If the commission pleases.
PN50
THE SENIOR DEPUTY PRESIDENT: Mr Calver?
PN51
MR CALVER: Thank you, your Honour - - -
THE SENIOR DEPUTY PRESIDENT: I don't think it's necessary for you to read your submission. I've marked it exhibit MBA1. I'd be happy - - -
EXHIBIT #MBA1 WRITTEN SUBMISSIONS OF MBA
PN53
MR CALVER: Thank you, your Honour. I won't be taking up much time of the commission and you marked my submission so, thank you. As expressed in MBA1, your Honour, the AIG variation seeks to remove any ambiguity or uncertainty as to whether an employee's rate of pay during annual leave incorporates shift loadings. We submit that an employee, whilst on annual leave, is not entitled to be paid for shift loadings. Inter alia, as Mr Smith said, they're already compensated for these amounts through the payment of annual leave loading.
PN54
So my submission is - and that's summed up in our submission - my submissions go to the argument that CFMEU has made. In response to that argument, CFMEU indicates, amongst other things, that the provisions of clause 32.2(b), because they are expressed non-exhaustively, mean that shift allowance is payable in addition to the amounts specifically listed in clause 32.2(b). Master Builders submits that provisions of clause 32.2(b) are able by their own terms to be construed as exhaustive. This is because of the manner of expression in that clause. It articulates that an employee is entitled to be paid wages, whilst on annual leave, which include applicable allowances, loadings and penalties paid for all purposes of the award; first aid allowance is applicable, and any other wages payable under the employee's contract of employment, including any over-award payment.
PN55
Shift loadings are not paid, as Mr Smith outlined, for for all purposes of the award. So for two reasons, one based on authority which I'll hand up, and secondly, the words, "All purposes of the award," needing some work to do in that provision, we believe the list is exhaustive. On the contrary, in paragraph 12 of the CFMEU's submission, which we believe was uploaded to the commission's web site on 4 October, the CFMEU invokes, in support of its argument, a non-exhaustive interpretation - some wording that we've provided to the commission in the context of the waste management award.
PN56
Now, we believe that whilst that reference was pertinent to the waste management award, it doesn't shed the light on the current matter. We say, that prima facie yes, the word, "includes", in a particular form of drafting, means that a provision is not intended to be exhaustive. However, in respect of the interpretation of awards, it's made clear by the chief industrial magistrate of New South Wales Magistrates Court, that the more items and the more particularity given to them included in a definition of a particular matter, the more likely it is that the definition is meant to be exhaustive. Your Honour, I'll just, if I may, hand up - I've already given it to my colleagues - a decision in Harris v The City of Botany Bay Council, and on page 20 of that decision, I've highlighted the relevant - would you like another transcript of - I've highlighted a paragraph on page 20 that is there in yellow texta. Do you have that - - -
PN57
THE SENIOR DEPUTY PRESIDENT: I haven't heard it called a texta for years.
PN58
MR CALVER: Showing my age, again.
PN59
THE SENIOR DEPUTY PRESIDENT: Yes, and mine.
PN60
MR CALVER: It says the general position in statutory award interpretation is that the word "include" is to enlarge the ordinary meaning of the words. Here, the expression "Significant effects" - and this decision related to the provision about technological change, that's found its way into modern awards as well; is now the subject of separate proceedings for rosters and hours of work in the lead-up to the insertion of section 149A into modern awards. So, it's quite pertinent in another context, but this is a general watch word, as it were. Here, the expression "significant effects" is given a very broad definition within the expression embracing job protection.
PN61
However, the more items included in the definition of a particular matter, present a proposition that the definition is meant to be exhaustive. So that, in addition, it would make no sense, in a non-exhaustive definition, to highlight that there was a distinction between all-purpose payments and other payments, as that distinction would, in effect not be relevant in a non-exhaustive definition. So the other mainstay of award interpretation, encapsulated in the authority that I have handed to you, your Honour, is that the plain words need to be looked at show the intention when a list appears in the manner that it does in clause 32.2(b).
PN62
Why would there be a distinction between all-purpose payments and other payments, if that distinction meant nothing? The presumption is that words have an effective meaning that should be taken on the face in that regard. Hence, Master Builders submits that clause 32.2(b) should be construed to be exhaustive, as it provides a comprehensive list of inclusions; 32.2(c) is there as a cautionary measure and would benefit by making explicit that which we say is already implicit. The application is therefore pertinent, as it seeks to make manifest an appropriate exclusion, one that is now only implicit. We also argue in our written submission, and I reiterate, that there would be an element of double-dipping if the amount payable on taking annual leave is construed to be inclusive of the shift loading.
PN63
Paragraph 3.3 of MBA1, we compare the position with regards to the payment of shift loading in these circumstances. Under the sister award of the Joinery award: that is the Building and Construction General On-site Award. In clause 38.2(c) of the Building award, there is a clear reference to ensuring that the 17.5 per cent loading is to be offset by any shift loading that would be payable. Workers in these conjoined industries should be treated the same, we say. That provision is to avoid double-dipping, and hence is mentioned as a fact favouring the interpretation in support of the current application. In conclusion then, your Honour, we submit that the provisions of clause 32.2(b) should be treated as exhaustive, and the proposed variation to clause 32.2(c) would ensure the clarity that should be evident when payments of this kind are expressed, if it please the commission.
PN64
THE SENIOR DEPUTY PRESIDENT: Thank you.
PN65
MS BAXTER: Thank you, your Honour.
THE SENIOR DEPUTY PRESIDENT: I'll mark your submission ABI1.
EXHIBIT #ABI1 WRITTEN SUBMISSIONS OF ABI
PN67
MS BAXTER: Thank you. ABI supports the submissions of AIG and the MBA, in respect to there being an uncertainty or an ambiguity in the wording of clause 32.2. We submit that these words are unclear and give rise to an ambiguity or uncertainty as to the applicability of shift loading for a shift worker who is on annual leave. Clause 32.2(a) creates a rule whereby an employee is paid the wages they would have received had they not been on leave. Clause 32.2(b) then goes on to explain the rule, by defining the wages they would not have received, as those which include applicable allowances, loadings and penalties paid for all purposes of the award. There are some other inclusions, but for these purposes, they are critical words of this clause. In the written submissions the CFMEU puts that because of the word "includes" what follows is not an exhaustive list of what may be paid when an employee is on annual leave. We put that if the list is found not to be exhaustive by the commission as put by the MBA, that any other items that are to be included are limited to the class that is created by clause 32.2(b). And we say that the class that is created are those payments that are paid for all purposes of the award.
PN68
The shift rates are contained in clause 28.3(d) and they are not paid for purposes of the award. There are separate provisions in the award which outline which payments are paid for purposes, and shift rates are not included in those. On that reading then the shift loadings are not captured by clause 32.2(b) because they are not paid for purposes of the award and not listed at all in that section as something that would be payable above the base rate of pay. Clause 32.2(c) then seeks to further explain the rule in clause 32.2(a) by excluding certain payments such as overtime.
PN69
We note that currently shift loadings are not excluded from overtime, or shift rates as they are defined in this award, are not excluded from clause 32.2(c), and we submit that the award would benefit from clarification that these shift loadings are excluded for the reason that they are not included in clause 32.2(b) as explained in the rule in 32.2(a). As has already been submitted by AIG, historically an employee who is a shift worker would receive either their shift loading or the annual leave loading but not both.
PN70
In the modern joinery award the current position is that they receive the annual leave loading which is prescribed in clause 32.3. The 17.5 per cent loading is already in place in the award to remedy any potential unfairness that might result from a reduction in the rate of pay or the remuneration an employee received when on annual leave. We seek to further rely on our written submissions in this respect.
PN71
THE SENIOR DEPUTY PRESIDENT: Mr Borg, are you ready?
PN72
MR BORG: Thank you, your Honour. Of course, the CFMEU has provided written submissions in relation - - -
THE SENIOR DEPUTY PRESIDENT: I'll mark those as well CFMEU1.
EXHIBIT #CFMEU1 WRITTEN SUBMISSIONS OF CFMEU
PN74
MR BORG: Thank you, your Honour. Your Honour, (indistinct) application which is so obviously without merit either in terms of evidence or in terms of submission, this might be it. Indeed there is no evidence other than what Mr Smith came very close to putting across the bar table in relation to wage claims. Given that that wasn't addressed in the submissions from the outset it's a little bit difficult to respond to those things. If I could turn to the submissions, however, what is interesting and what is of particular note is throughout the submissions written or oral on behalf of the employer group is that there is no proper analysis, no proper analysis of clause 32.2(a).
PN75
Now this is the key to understanding payments for annual leave under the award. If I could just turn to 32.2(a) it says instead of the base rate of pay as referred to in section 90(1) of the Act:
PN76
An employee under this award before going on annual leave must be paid the wages they would have received in respect of the ordinary hours the employee would have worked had the employee not been on leave during that relevant period.
PN77
Now I note that explicitly, explicitly that clause excludes the operation of section 90(1) of the Fair Work Act, which the employers seem to make much of.
That's an important consideration because in 32.2(a) we talk about instead of being the base rate of pay, the wages they would have received in respect of the ordinary hours that the employee would have worked had the employee not been on leave during the relevant period. I note that that's why he then illuminates under clause 18 of the award. It's important because it talks about the wages they would have received in respect to ordinary hours, so what are our ordinary hours under this award. It's an important inquiry for the purposes of this application. There is an answer to that in respect of shift workers and that's in clause 28.3 which makes explicit reference to ordinary hours.
It says the ordinary hours, this is 28.3 paragraph (b):
PN78
The ordinary hours for a shift worker are eight hours per day inclusive of meal breaks Monday to Friday.
PN79
Now that's not just because of the drafting of the award which describes shift rates as opposed to shift loadings, which we submitted on the formative. But it simply matches up the wording in clause 28.3 with the language of 32.2(a). So we talk about ordinary hours and in both contexts they import the same meaning. This is distinct however from the language in 32.2(3) which deals with the way in which one calculates the annual loading itself. That clause talks about clause 18 the classifications and minimum wages, which would otherwise match up with, or translate to, what is in section 90(1) of the Fair Work Act.
PN80
Now that's quite a deliberate distinction. On the one hand the award talks about the wages they would have received for ordinary hours et cetera, and on the other hand it makes explicit reference to the minimum wage rates. Now this argument about double dipping is just a nonsense. If we are to look at clause 32.3 the important thing to take away is that we're not double dipping in any respect in that shift workers get their annual leave loading calculated on their shift rates which they had already received. What our argument basically is is that for ordinary pay, a shift worker gets shift rates, and then for the purposes of annual leave loading they would get their leave loading calculated on their base rat and it would appear that there isn't much contention in that regard.
PN81
So, that's in relation to 32.28 but that's obviously not the end of the story. The employees have also spoken about 32.2(b) which I'll point out again, notwithstanding the other evidence that the employees have spoken about, they have glossed over the fact that it does refer to the wages they would have been paid for ordinary hours. The same applies in 32.2(b) as it applies in 32.2(a). So shift workers that would work their ordinary hours as shift workers would receive their shift rates, and then on top of that they would get their annual leave loading based on the day's rate of pay. It does then go on to say, "Including applicable allowances, loadings and penalties paid for purposes of the award, and the first aid allowances," et cetera.
PN82
It would appear that the employees can persist with this argument that this is in some way restrictive in that subparagraph. But, the real limitation that is in 32.2(b) is the very part of that clause, which says subject to paragraph (c). Now whether or not it then says including applicable allowances, loadings and penalties paid for all purposes we would say that's not restrictive, indeed it's expansive. It refers to any of those things that are found in the award, they should also be included in the calculation. It then goes on to talk about over-award payments and so on and so forth so as to be expansive in its essence. Indeed we deal with that point in paragraph 12 of our submission if I could just call that up, won't be a second.
PN83
In which we refer to a submission in another matter in relation to another award in which the MBA seemed to accept that explanation, that the word "including" as a drafting tool isn't a limitation, it's actually an expansion of definitions. So, I'll cite for the purposes of transcript and record what the MBA said in another matter, they said:
PN84
Whilst the Master Builders supports the clarification which stems from the AIG's proposed definition, we recommend the deletion of the word "including" from subclause (a) and the replacement with the term "that is". This would limit the scope of the voice management industry rather than enlarge it.
PN85
So it would appear that the MBA have differing views in relation to that but, we would say that in any event even if we are to accept the argument that the wording including for the purposes of the Joinery and Building Trades Award is a limitation rather than an expansion of that definition. We would say that that doesn't really matter anyway. We still need to look back at 32.2(a) which describes the wages they would have been paid had they been working during that period of annual leave, their ordinary hours, which were also defined in clause 28.3 which for the purposes of shift workers. So, whether or not it's expansive or a matter of limitation is neither here really nor there.
PN86
Indeed, as I said before, the only explicit limitation which appears in that provision is the reference to clause 32.2(c). Now 32.2(c) is quite clear in what is in and what is out in terms of calculating what should be payable during a period of annual leave, and it says:
PN87
The employee is not entitled to payments in respect of overtime, special rates, or any other payment which might have been payable to the employee as a reimbursement for expenses incurred.
PN88
There's no mention of shift rates or shift loadings or however they might be described, which I might add for the purpose of the Joinery and Building Trades Award described the shift rates rather than shift loadings. So I'll just make a few further comments about this clause and how it came to be in the Joinery and Building Trades Award. Whilst the Joinery and Building Trades Award, the 2010 modern award, it was based on the National Joinery and Building Trades Products Award. Now this doesn't, the 2002 award, and I'll refer your Honour to the decision which establishes that as part of the award modernisation process. The citation is [2009] AIRCFB 345. If I could then - this is trite so I haven't included it in my submissions, but whilst I'm here I may as well go through it. It would be at paragraphs 112 to 113 in which the full bench decided that the terms and conditions in the award largely reflect those of the National Joinery and Building Trades Products Award (2002).
PN89
So the limitations that the employers are seeking to import into the joinery award were nonexistent in the pre-modern award, and we say there is no reason to change any of that settlement. Indeed what has happened, on the other hand, as part of the award modernisation process, this particular clause was just transposed from the model clause arising out of the manufacturing award. So we have a situation in which the wording in the modern Joinery and Building Trades Award, this is clause 32.2, is basically identical to clause 41.4 of the modern manufacturing award. So that's those subparagraphs (a)(b)(c), (a)(b)(c) in basically identical terms except for the word "applicable" appearing in paragraph (b).
PN90
So it says in the modern Joinery and Building Trades Award, "Including applicable allowances, loadings and penalties paid for all purposes," whereas under the modern manufacturing award that word "applicable" doesn't appear. Now the reason why that word "applicable" does appear is because these very clauses were revisited upon application by the MBA to have that included in there. So, firstly we would say that there is no ambiguity in this clause, it's been tried and tested in relation to the manufacturing award.
PN91
Secondly, if ever there was, there was an opportunity for the MBA to raise those issues and have this clause properly examined at the time that it indeed was, and which thought about the change to include the word "applicable" in paragraph (b). But really, them saying that there is ambiguity, uncertainty, is quite extraordinary in the light of that. What their real problem is is that in addition to shift loadings employees get their annual leave loading on top of that. But that's how the award has always worked. It was like that in 2002 upon which it crystallised on the basis of the full bench decision to use that award for the purposes of the modern award and that its distinct from the manufacturing award is neither here nor there.
PN92
Now with the manufacturing award, basically what occurs is that a shift worker would get either their shift rate or their annual leave loading, whichever is the higher. The employers aren't seeking even that much in relation to the Joinery and Building Trades Award. What they want to do is exclude shift rates entirely from the calculation of payment for annual leave. They want everybody to only be on the leave loading based on their base rate of pay.
PN93
THE SENIOR DEPUTY PRESIDENT: Do you say ordinary rate is not the ordinary rate of pay they get, but the ordinary rate without shift penalty that (indistinct)
PN94
MR BORG: What's that, sorry?
PN95
THE SENIOR DEPUTY PRESIDENT: That's what they say, that the ordinary rate is the base rate.
PN96
MR BORG: Is the base rate of pay.
PN97
THE SENIOR DEPUTY PRESIDENT: And not ordinary as in ordinarily paid.
PN98
MR BORG: That's quite correct. Going back all the way to the annual leave cases of the 1970s, it was the case that, I've got it here, I could have included it with my submission but again it was trite and it should have been something that everybody would benefit from looking at. But I've got the annual wage cases here with me, and whilst all awards are decided on their own individual basis, and that being an outcome of the annual leave cases of the 1970s, in that particular case, so that would be at page 544, in that decision the commission said that "the items which should in the general run of cases be included in the payment for annual leave are as follows”. So they go on to say the over award payments for ordinary hours of works.
PN99
Then they go on to say the shift work premiums according to roster or protected roster including Saturday, Sunday or public holiday shifts. This is the point that I raised earlier, we need to have a look at what they're ordinarily paid rather than their sort of base rate of pay. The manufacturing award even anticipates that much. That's why it gives an option between receiving their shift rate or their annual leave loading. If it weren't payable then there wouldn't be that option. So what we would say, your Honour, is that there is no ambiguity or uncertainty. These are tried and tested clauses that don't appear to create problems in other awards. It's just the disgruntlement, if I might say so, in having to pay the leave loading on top of the shift rates, Which they might not do in other contexts but they have to do in this context as a matter of history.
PN100
So we would say it's not simply enough to say that because the CFMEU does not agree with their position that there is somehow a rivalry of contentions. There have to be arguable cases for a rivalry of contentions to occur. It's not enough to simply bowl up a careless argument, wait for others to disagree with you and then point to that disagreement to establish jurisdiction of the commission to vary a modern award. So as I said the rivalry of contentions really has to be genuine, and has to be grounded in consistent and principled analysis of interpretation, not the kind of wanting analysis proffered, or indeed proffered, by the employer groups. Your Honour, unless there is any you might wish me to answer in particular that would be the end of my submissions.
PN101
THE SENIOR DEPUTY PRESIDENT: Thank you. Is there anything shortly in response?
PN102
MR SMITH: Thank you, your Honour. Firstly we'd support the submissions of the MBA - ABI and, in particular, support the interpretation of the word "includes" as submitted by Mr Calver and the significance of that decision of the chief industrial magistrate in the case that Mr Calver referred to. Going to the CFMEU's arguments, Mr Borg sought to give a great deal of weight to the wording in 32.2(a) which is a very brave argument, because 32.2(a) is qualified by 32.2(b). 32.2(a) talks about, "Must be paid the wages they would have received," and then 32.2(b) says, "The wages to be paid must be worked out on the basis of". So whatever 32.2(a) means it's qualified by 32.2(b) and in particular the phrase in 32.2(b) that is being contested which is that phrase beginning "'including applicable allowances, loadings and penalties paid for all purposes of the award," et cetera.
PN103
Mr Borg said that it doesn't matter what "including" might mean in 32.2(b) because 32.2(a) says it all, which cannot possibly be right, in our submission. Yes, there's no mention of shift rates in 32.2 but as I mentioned in our submissions it talks about allowances, loadings and penalties, and shift rates must be aligned with a penalty or a penalty rate. We say it's both a loading and a penalty, but even on Mr Borg's argument that it's a shift rate then surely it is a penalty rate as that term is very commonly understood in industrial matters.
PN104
Shift rates are not paid for all purposes of the award, as the commission is aware there's a lot of cases over the years that have dealt with the issue of shift rates and when they're paid and when they're not. But the argument is not being put that they are paid for all purposes of the award which clearly they're not. Mr Borg helpfully identified the significance of the wording in the Joinery Award and its relationship to the wording in the manufacturing award. If your Honour was to look at the Manufacturing Award in 41.4 the wording in that clause of the Manufacturing Award is almost word-for-word the wording in 32.2. It has the same subclauses (a), (b) and (c) in almost exactly the same terms.
PN105
The difference in 41.4(b) is the addition of that wording that Mr Borg referred to that came out of the MBA case where the word "including" was put before allowance. Here, your Honour, highlights the significance of our arguments and the problems with the CMFEU's arguments. You've got the manufacturing award which was based on the 98 version of the metals award, the 84 version of the metals award and the 71 version of the metals award, which have a provision that deals with payment for a period of annual leave and then another provision about annual leave loading and, as we've all said and Mr Borg admitted, the interpretation of that is people get either an annual leave loading of 17 and a half per cent.
PN106
They don't get a shift loading if it's higher, they get a higher annual leave loading that equates to the shift loading which under the manufacturing award would either be, well it would be a 30 per cent loading because the 15 per cent loading that's also payable under that award clearly is less than the 17 and a half per cent loading. So if they were a permanent night shift worker they get a 30 per cent annual leave loading. Or if they were a day worker, an afternoon shift worker or a rotating night shift worker they get a 17 and a half per cent loading.
PN107
So if the wording in the manufacturing award means what we say it means, and we all admit that it means, means that you get the payment for annual leave without the shift loading and then the other clause in 41.5 gives you an annual leave loading of 17 and a half per cent or higher, then that exact same wording in the joinery award with the addition of just one or two extra words but almost identical wording in the joinery award must mean what we say it means, that the annual leave loading deals with the issue of annual leave loading.
PN108
It doesn't in this case provide for the higher leave loading for shift workers but all of the words that we've been arguing about are the same words in the manufacturing award that have very longstanding meaning, other than the addition of a couple of words that don't go to the arguments in this matter. So in conclusion, your Honour, we think that it's very clear that firstly, the intent of the award clause is as we say it is.
PN109
But we do believe that there is ambiguity and uncertainty and that is being generated by the CFMEU's arguments that you've heard again today that they are running in the field if you like. It's not the first time we've made these comments, as your Honour is aware, right from the very first mention we identified why we were pursuing this particular matter. And we'd urge the tribunal to vary the award as we've identified. If the commission pleases.
PN110
THE SENIOR DEPUTY PRESIDENT: Any further submissions? No? I reserve my decision.
<ADJOURNED INDEFINITELY [11.11AM]
LIST OF WITNESSES, EXHIBITS AND MFIs
EXHIBIT #AIG1 WRITTEN SUBMISSIONS OF AIG PN29
EXHIBIT #MBA1 WRITTEN SUBMISSIONS OF MBA PN52
EXHIBIT #ABI1 WRITTEN SUBMISSIONS OF ABI PN66
EXHIBIT #CFMEU1 WRITTEN SUBMISSIONS OF CFMEU PN73