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TRANSCRIPT OF PROCEEDINGS


Fair Work Act 2009���������������������������������������������������� 1051471-1

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VICE PRESIDENT HATCHER
SENIOR DEPUTY PRESIDENT HAMBERGER
COMMISSIONER BISSETT
COMMISSIONER BULL

 

AM2014/1

 

s.156 - Four yearly review of modern awards

Four yearly review of modern awards
(AM2014/1)
Black Coal Mining Industry Award 2010

(ODN AM2008/2)
[MA000001CRV Print PR985111]]

Sydney

 

10.27 AM, THURSDAY, 26 FEBRUARY 2015


PN1          

VICE PRESIDENT HATCHER:  Can I start by indicating that President Ross J is unable to sit with us this morning.  He has the pleasure of attending a Senate Estimates Committee today, but he will obviously read the transcript and participate in the decision‑making process. 

PN2          

Can I take the appearances firstly in Sydney and, before I do so, can I indicate for those people who are towards the back of the room, you won't be caught on the microphone.  If you want to say something, you'll need to probably come forward, unless you speak very loudly, to say something to one of the microphones.  Yes, Sydney.

PN3          

MR S MAXWELL:  If the commission pleases, my name is Maxwell, initial S.  I appear on behalf of the CFMEU Construction and General Division.

PN4          

MS S TAYLOR:  If the commission pleases, Taylor, initial S, for the Australian Manufacturing Workers Union.

PN5          

MS S SCHREIER-JOFFE:  If the commission pleases, Shana Schreier‑Joffe for the Ski Industry Association.

PN6          

MR L IZZO:  Izzo, initial L, seeking permission to appear on behalf of the Australian Chamber of Commerce and Industry, New South Wales Business Chamber and Australian Business Industrial.

PN7          

MR B FERGUSON:  If the commission pleases, my name is Ferguson, initial B, for the Australian Industry Group.  With me at the bar table is MS R BHATT.

PN8          

MS O VALAIR:  If the commission pleases, Valair, initial O, for the Master Plumbers Association, New South Wales.

PN9          

MS M ADLER:  If it pleases, Adler, initial M, for the Housing Industry Association.

PN10        

MR G THOMAS:  As the commission pleases, Thomas, initial G.  I appear for Master Builders Australia.

PN11        

MS S McKINNON:  May it please the commission, McKinnon, initial S, for the National Farmers Federation.

PN12        

MR K SCOTT:  If the commission pleases, Scott, initial K, seeking permission to appear with my colleague Mr Izzo, on behalf of Australian Business Industrial, Australian Chamber of Commerce and Industry, and the New South Wales Business Chamber.

PN13        

MS S CRAWFORD:  If it pleases the commission, Crawford, initial S, for the Australian Workers Union.

PN14        

MS W CARR:  If it pleases the commission, Carr, initial W, for the Transport Workers Union.

PN15        

MR G NORRIS:  If it pleases the commission, Norris, initial G, from Australian Licensed Aircraft Engineers Association.

PN16        

VICE PRESIDENT HATCHER:  Is that all the appearances in Sydney?  All right.  Melbourne?

PN17        

MS PATENA:  If it pleases the commission, Patena, initial R, for the Shop Distributive and Allied Employees Association.

PN18        

MS V WILES:  If it pleases the commission, Wiles, initial V, for the Textile Clothing and Footwear Union of Australia.

PN19        

MS A MOUSSA:  If it pleases the commission, Moussa, initial A, for the Australian Manufacturing Workers Union, Vehicle Division.

PN20        

MR S ELLIFFE:  May it please the commission, Elliffe, initial S, appearing for the Hair and Beauty Industry Association.

PN21        

VICE PRESIDENT HATCHER:  Adelaide?

PN22        

MR H WALLGREN:  If it pleases the commission, appearing for the South Australian Wine Industry Association, Wallgren, initial H.

PN23        

VICE PRESIDENT HATCHER:  Can I confirm we have no appearances in Canberra.

PN24        

UNIDENTIFIED SPEAKER:  No appearances in Canberra.  Just the department observing.

PN25        

VICE PRESIDENT HATCHER:  Thank you.  In relation to the lawyers who have sought permission to appear, is there any opposition to that?

PN26        

MR FERGUSON:  No opposition.

PN27        

VICE PRESIDENT HATCHER:  Those applications are granted.  Insofar as how we proceed this morning, firstly we can indicate that we've had the opportunity to read the written submissions, so this morning's hearing is not simply an opportunity to repeat or rehearse what is in the written submissions, although if there is some point you want to clarify or elaborate upon, you may do so.  Obviously if you want to reply to submissions that have been made to other parties, you may do so.

PN28        

In terms of how we deal with the matters, I think the number of matters is too many and too complicated to try to segment the hearing, so we'll simply go through and hear each party in turn in Sydney, Melbourne and Adelaide in that order.  Can we simply ask the parties to, so far as it's convenient, address the issues arising from the draft determinations first in their submissions and then turn to the further possible inconsistencies in the stage 5 awards second.  Unless anybody is keen to go first, I might simply start with you, Mr Maxwell, as being left of the bar table.

PN29        

MR MAXWELL:  Thank you, your Honour.  My submissions this morning will be relatively brief - or very brief in fact.  In regard to the draft determinations issued by the commission, we don't make any submissions.

PN30        

VICE PRESIDENT HATCHER:  All right.

PN31        

MR MAXWELL:  In regard to the stage 5 issues, we filed a written submission on 23 January.  We rely on that submission.  It mainly addressed the issue of clause 5.2(c)(i) of the Mobile Crane Hiring Award and clause 17.7 of the Building and Construction General On-site Award 2010.  I should point out that there's actually an error in our written submission.  I think we refer to clause 26.2(c)(i) and the correct clause is 25.2(c)(i).

PN32        

In regard to the general issue of inconsistency, we would rely on that submission and the submission of the other unions.  In particular, the reply submission of the AMIEU.  I don't say any more on that at this stage.  In regard to the Mobile Crane Hiring Industry Award, there is general agreement that the second sentence of clause 25.2(c)(i) is inconsistent with the NES and we suggested that that sentence be removed.  The only other party, we understand, that have addressed that issue, is the ABI and there is a slight difference in how we address the issue.

PN33        

They have suggested that the whole of 25.2(c)(i) be deleted and replaced with clause 41.7 of the Manufacturing Award.  The problem we have with that is that clause 25.2(c)(ii) actually addresses the issue that clause 41.7 of the Manufacturing Award addresses, so you would then have a doubling up of the clauses.  Our submission is that the simplest method of dealing with it is to remove the second sentence.  Any final changing of that award clause could then be dealt with when the Mobile Crane Hiring Award is considered in stage 4 of the award review process.

PN34        

If I can turn briefly to the Building and Construction General On-site Award, the issue there is clause 17.7 of the award.  We note that the MBA and HIA have filed submissions in which they identify that clause 17.7 is part of the redundancy clause in that award.  The redundancy clause in that award is an industry specific redundancy scheme.  In accordance with section 123(4), the NES redundancy provision in subdivision B of division 11 of the Fair Work Act doesn't apply.

PN35        

We concur with the submissions of the MBA and HIA in regard to the basis in which 17.7 is contained within the award and just, I suppose, to go back through the history, that provision was first inserted into the National Building Trades Construction Award 1975 by Palmer C on 24 October 1990, during what some people have deemed the tortuous history of redundancy in the building and construction industry, and that is found in Print J5115.

PN36        

Clearly the transmission of business provision in the Construction Award in clause 17.7 was inserted as part of the redundancy clause and only related to redundancy.  On the basis of section 123(4), it doesn't offend the provisions of the National Employment Standards and therefore the clause can remain within the award.  Unless there are any questions, they are the brief submissions we wish to make.

PN37        

VICE PRESIDENT HATCHER:  Mr Maxwell, taking into account the byzantine structure of the CFMEU, are you in a position to address the submission that was made in relation to the Timber Award?

PN38        

MR MAXWELL:  I am not, your Honour.  I have no instructions in regard to that submission.

PN39        

VICE PRESIDENT HATCHER:  Thank you.  Ms Taylor?

PN40        

MS TAYLOR:  Thank you, your Honour.  I will turn first to the additional leave for shift workers.  That is clause 41.3(b) of the Manufacturing Award and our submission of 29 September identified we have an interest in nine other awards with a similar provision.  The AMWU has made submissions in relation to this matter on 9 May, 29 September, 15 October and submissions in reply of 21 December 2014.  Our correspondence of 13 February confirmed that we supported the commission's draft determinations in those awards.

PN41        

If I can just turn first to the AIG's submission of 13 February.  What we say in relation to that is that the submission was lodged six days out of time and we say this is unfair to other parties, and in the light of the extensive review proceedings could create a disturbing precedent with such a maverick disregard of the directions that were before the commission.  As we understand it, no formal application for extension was sought or granted.

PN42        

VICE PRESIDENT HATCHER:  Are you in a position to deal with the submission, in any event?

PN43        

MS TAYLOR:  No, your Honour.  Our submission would be that the AIG's submissions go far beyond commenting on the draft determination and whether it in fact implements appropriately the commission's decision of 23 December, and goes to matters of merit on a clause which was virtually in front of all parties by virtue of the AMWU's proposal contained in our submission of 15 October.  We say that if the commission is of a mind to consider the AIG's new submissions, then we would require additional time to make comment on those submissions.

PN44        

VICE PRESIDENT HATCHER:  I haven't checked.  How long do you say they were overdue by?

PN45        

MS TAYLOR:  Six days.

PN46        

VICE PRESIDENT HATCHER:  So if we gave you a further six days to put a response in writing, that would give you the period to respond that you missed?

PN47        

MS TAYLOR:  Yes, your Honour.

PN48        

VICE PRESIDENT HATCHER:  All right.  We'll allow you seven days to file a written submission in response to the AIG submission, as to that specific matter.

PN49        

MS TAYLOR:  Thank you, your Honour.

PN50        

VICE PRESIDENT HATCHER:  Is there any other matter you want to deal with today?

PN51        

MS TAYLOR:  Yes, your Honour.  The submission in relation to the additional leave for shift workers, the submissions of Business South Australia of 13 February claimed that clause C of the draft determination extends the entitlements for workers who regularly work shift work on Sunday and public holidays to those who irregularly work a seven‑day shift roster.  That submission we say is misconceived, as the current provision at 41.3(b) already covers seven‑day shift workers who, due to the length of their engagement on shift work, do not meet the regular test.

PN52        

VICE PRESIDENT HATCHER:  So if they don't meet the test for being a seven‑day shift worker, the provision for pro rata payment a month has no work to do if, for example, you simply worked two weekends in a row.

PN53        

MS TAYLOR:  Sorry, your Honour.  Could you repeat that?

PN54        

VICE PRESIDENT HATCHER:  Yes, I went a bit fast.  Is your point that unless you're a person who meets the definition in the award of being a seven‑day shift worker which requires the regular working of requisite days, the proposed new provision which provides for pro rata-ing on a part month basis would have no work to do?

PN55        

MS TAYLOR:  That's right, your Honour, yes.  We also say that that provision which recognises a month or part month or workers who do not meet the regular test, has been in the award since 1935.  I have the CAR citation, if that would assist the commission.

PN56        

VICE PRESIDENT HATCHER:  Yes.

PN57        

MS TAYLOR:  In 1935, the Metal Trades Award at clause 8 provided that:

PN58        

Further provided that such shift workers ceasing to be employed on a shift before the completion of any year shall be paid one day's pay for each month or part of a month's service in lieu of the fortnightly holiday herein.

PN59        

At that point in time it was a fortnight holiday.  The CAR reference is [1935] 34 CAR 475 to 476.  This was followed on with a subsequent consideration of the matter for continuous shift workers who work on Sundays by consideration of the matter in 1937, where it was determined that:

PN60        

Some form of compensation readily applicable for short periods of service on continuous shifts must be devised.

PN61        

That is [1937] 37 CAR at 246.

PN62        

VICE PRESIDENT HATCHER:  Does that mean you can have a short period of service as a continuous?  That's a contradiction in terms, isn't it?  That is, for example, if you work two or three weekends in a row doing weekend work, that doesn't make you a seven‑day shift worker, does it?

PN63        

MS TAYLOR:  If you're on a seven‑day shift roster, then the award provision since 1935 has recognised that you should get some compensation if that shift roster did carry some sort of Sundays or work on public holidays with it.  If you are on the roster - the seven‑day continuous shift work roster.

PN64        

VICE PRESIDENT HATCHER:  Even though looked at over the course of, say, a calendar year, you haven't regularly worked Saturdays or Sundays, for example?

PN65        

MS TAYLOR:  That's correct, your Honour.  The whole provision was for those who irregularly met the test.

PN66        

VICE PRESIDENT HATCHER:  All right.  Thank you.

PN67        

MS TAYLOR:  So we say, your Honour, that a pro rata entitlement has since 1935 been recognised within the award and recognises an entitlement to additional leave does not expire due to the duration of the shift work not enabling the regular working of Sundays and public holidays.  It is our submission that the modern award objective is not met by deleting such a long-standing entitlement, but to redraft the entitlement ensuring consistency with the NES and the scheme of the Act.

PN68        

Your Honour, I'll move to the category 5 matters, in particular the leave in advance.  We have an interest in the Airlines Operations - Ground Staff Award, clause 34.2.  We have made submissions in relation to that matter on 23 January and 20 February this year, and we rely on those submissions.  The ABI have argued in their submission on category 5 matters that the annual leave in advance clause is inconsistent with the National Employment Standards section 88 and section 93, and operates in a manner unsupported by section 55.

PN69        

The AIG have argued that there is no change required to the current expression of the clause.  The AMWU supports the FWO's view that the clause is misleading as it implies a 12‑month period of continuous service is required before an employee who has accessed annual leave in advance may access further leave in advance.  That is clearly inconsistent with section 88 and the accrual provisions of 87.  The FWO also found that the clause restricted the making of agreements as to when annual leave would be taken via section 88 of the NES.

PN70        

The AMWU proposed a remedy to fix the NES inconsistency, in our submission, on 29 September.  That submission was that we should incorporate the appropriate clause from the Manufacturing Award.  We note that the ABI's submission in reply to the category 5 matters, at 2.1(d) to (f), concedes that if the commission is not of a mind to delete the clause - this long‑standing safety net entitlement - then the AMWU's proposal is "clearly articulated without any unnecessary complexity."  Other than those points, we rely on our written submissions.

PN71        

VICE PRESIDENT HATCHER:  Thank you.

PN72        

MS TAYLOR:  Your Honour and Commissioners, if I turn now to the transfer of employment matter that was first raised by the NFF.  We have an interest in the Airport Employees Award; the Manufacturing Award; the Food, Beverage and Tobacco Manufacturing Award; the Seafood Processing Award; and the Timber Industry Award.  The particular clause is at 41.9 of the Manufacturing Award.  We address this issue in our submissions of 23 January and 13 February.

PN73        

Essentially our submission is that the transfer of employment provisions are enabled by, firstly, section 55(4) as their provisions are supplementary to section 91(1).  Supplementary terms do not contravene section 55(1), which is the primary submission of the AIG and the ABI in relation to this matter.  Matters enabled by section 55(4) do not contravene section 55(4) by the effect of 55(7), which clearly states that to the extent that the matters are supplementary, they do not contravene section 55(1).

PN74        

VICE PRESIDENT HATCHER:  How is it supplementary?  I think the point that's raised against you is that section 91 gives the employer the option to choose whether to count previous - the transmitted services service for the purpose of leave, whereas the award requires the service to count.  That's not just a supplementation, that's a contradiction, isn't it?

PN75        

MS TAYLOR:  It could be considered as that, but it also could be considered that it's supplementary, in that the decision the employer is making has the effect on an employee's ability to reach an agreement to take their annual leave or to have that leave paid out.  We say it's supplementary to the decision regarding the impact of the taking of leave.  We don't rely entirely on 55.4.  We also say that the provisions are enabled by section 55(2) and we say that because they are enabled through section 93(4) which allows for awards to contain terms otherwise dealing with the taking of annual leave.

PN76        

An award provision enabled by section 55(2) subjugates the effect of the NES by virtue of section 55(3) of the Act.  Without the transfer of employment award provisions, employees would not be able to enter into an agreement under section 88(1) to take their annual leave due to the operation of section 91(1) in circumstances where the second employer chose not to recognise service.

PN77        

In further support of our argument, we submit that section 55(2) does not require award terms to be expressly provided for line by line by provision of Part 2-2, but must be capable of falling within the scope of a Part 2-2 term.  The transfer provisions, we say, fall within section 93(4) because it enables an employee to actually choose to take their annual leave.  They are our submissions, your Honours, Commissioner, unless there's anything else.

PN78        

VICE PRESIDENT HATCHER:  No, thank you.  Ms Schreier‑Joffe, are you going next?

PN79        

MS SCHREIER-JOFFE:  Thank you.  I am for the Australian Ski Industry Association and, unfortunately, the association was not represented when the determination was made on 23 December regarding the inconsistency between the Alpine Ski Award and the NES annual leave provision.  We submit that that decision was in error and that we should actually be in category 5 where there is no agreement as to the award inconsistency.  At the moment, we are placed in category 4 and thus there was a draft determination varying the award.

PN80        

VICE PRESIDENT HATCHER:  There is no error about it.  Those parties who appeared in the proceedings and made submissions about it, agreed that it was inconsistent with the NES.  Further, we have now - whether it was by consent or not - made a determination that that submission is correct, so why should we hear you about that now?

PN81        

MS SCHREIER-JOFFE:  As a matter of natural justice, the parties most affected by the decision made on the 23rd in relation to this are the Australian Ski Industry Association members and the employees who are employed at the ski fields.  It is a very unique industry with very unique employment conditions, which were not taken into account in that decision.

PN82        

VICE PRESIDENT HATCHER:  Are you suggesting you were denied procedural fairness?

PN83        

MS SCHREIER-JOFFE:  In circumstances where those issues were not aired and the decision was made, yes, we would have.  We weren't heard on the matter.

PN84        

VICE PRESIDENT HATCHER:  Modern awards are not respondency based.  The commission publishes all relevant information on its web site and, further, it sends all relevant information to all those who are on our subscriber service.  How in those circumstances could there have been a denial of procedural fairness?

PN85        

MS SCHREIER-JOFFE:  In the circumstances, for whatever reasons - and I can't explain them.  I don't have instructions as to why the association missed this particular issue.  It wasn't aware that the NES inconsistency issue was affecting the Alpine Award.  They were very active and have been very active in relation to all issues regarding the review of that award and, for whatever reason, missed this issue.  That being said, it remains that they were not heard on the issue, a position that - - -

PN86        

VICE PRESIDENT HATCHER:  They may not have made a submission.  That doesn't mean they were denied procedural fairness, does it?  That is, a failure to take proper advantage of an opportunity to make submissions - which your client may have done - is not a denial of procedural fairness.

PN87        

MS SCHREIER-JOFFE:  With respect, I submit that in the circumstances in these proceedings in the manner in which - and I note that there was a process in place, but because of the myriad of different award reviews taking place, the different groups and the nature in which this had occurred, the notice was not given directly - and I appreciate that's not the process - to the association.  They were not included in any notices.  Therefore, in these circumstances we would suggest because they are the primary party involved with this award other than the employees, that there was a failure in natural justice because I didn't get that opportunity.

PN88        

That being said, if the commission is not minded to accept that submission, we say that in any event we would like to make submissions on the correctness of the inconsistency in the light of category 5 rather than making submissions only on the draft determination.

PN89        

VICE PRESIDENT HATCHER:  Anyway, so you want to submit that the early decision was simply wrong as a matter of law?

PN90        

MS SCHREIER-JOFFE:  We're submitting that the NES provision and clause 11.5 of the award are not inconsistent, yes.

PN91        

VICE PRESIDENT HATCHER:  All right.  You've heard what I've had to say.  We've read your written submission.  You don't need to repeat it, but if there's anything you want to emphasise or elaborate upon, we'll allow you to do so.

PN92        

MS SCHREIER-JOFFE:  Thank you.  I think the very first point I'd like to make is that we're talking about a very unique industry, being the ski industry.  We're talking about employees who, for the most part, are not employed for more than a period of 12 weeks, at the maximum 16 weeks, at a period of between three to four months.  In those circumstances, based on the decision in Canavan - which is the purported basis on which the decision on 23 December by the full bench was made - we say it is entirely distinguishable.

PN93        

We're talking about a circumstance where employees agree up‑front to be employed for a very short period of time and, in accordance with the NES, an employer and an employee are entitled to agree on the taking of annual leave and an employer is entitled to refuse annual leave on a reasonable basis.   Because of the ski industry and the manner in which the ski season operates for that very short period, three months, it is unlikely that employees are going to want to take annual leave.

PN94        

It is more than likely that it would be unreasonable in the circumstances for them to do so where they get days off during the week.  They don't work seven days a week and they get normal time off.

PN95        

VICE PRESIDENT HATCHER:  If someone is engaged for four months and, say, after a three‑month period they want to take a week's accrued annual leave and they're in the ski fields and they need to go back to wherever they came from to deal with some personal issue - - -

PN96        

MS SCHREIER-JOFFE:  They're entitled to take leave, so there's no suggestion that - and it does happen on occasion.  If a person requests leave for whatever reason, it's not - and again we haven't heard evidence on this, and we can if that would be helpful.  That very, very, very, very seldom happens because of the very short nature of the industry, of the season, but, that being said, leave is permitted.

PN97        

VICE PRESIDENT HATCHER:  But not paid for?

PN98        

MS SCHREIER-JOFFE:  We would submit in the circumstances it has been paid for, because it's paid for in advance.

PN99        

VICE PRESIDENT HATCHER:  That's just Canavan, isn't it?

PN100      

MS SCHREIER-JOFFE:  No, it's not Canavan, because in Canavan the issues that I would submit led the commission to making the decision that it was contrary to the NES were (1) that it was an ongoing employment and that arguably in those circumstances someone could agree up‑front in the employment for the next, you know, however many years, to pay up‑front where in those circumstances it would be entirely a disincentive - one of the major reasons why in that decision it was determined inconsistent with the NES - for that employee to take annual leave.

PN101      

It also is different in those circumstances because, in our circumstance, what we are saying is that these employees are entitled to annual leave.  That is contained in the award as it is at the moment.  The provision for the taking of annual leave applies to all employees, but what will happen and what happens and has happened over the last, you know, however many years the ski season has been going, is that employees come, they work for three months, they've accrued a whole bunch of leave and then they have to get it paid out.

PN102      

We're saying for their benefit we'll pay that in advance.  It's not that we're denying them annual leave, but because we know we're going to have to pay them out annual leave after three months, we're paying that up‑front.  That's very different to Canavan.  We also suggest that it is very beneficial to the employees because - - -

PN103      

VICE PRESIDENT HATCHER:  There's no question of whether it's beneficial to the employees or whether they want it or don't want it.  It's simply a question of whether the provision is inconsistent with the NES statutory provision, because we're not here dealing with an issue of merit.  It's an issue of law.

PN104      

MS SCHREIER-JOFFE:  I understand that.  I note the decision in Hull‑Moody, which was departed from in Canavan, but in our circumstances we say three things about that.  Firstly, there is no requirement to make payment at the time the leave is taken, as drafted in the Act.  There is an ability for an employer and an employee - - -

PN105      

VICE PRESIDENT HATCHER:  So that submission suggests Canavan is wrong.

PN106      

MS SCHREIER-JOFFE:  I appreciate that.

PN107      

VICE PRESIDENT HATCHER:  You're arguing that, as well?

PN108      

MS SCHREIER-JOFFE:  I am arguing that.  I'm arguing that there is no requirement in the Act that says payment for annual leave has to apply and occur at the time of the annual leave.  In fact there are circumstances where payment in advance has been approved by this commission.  In circumstances where it has been referrable to that annual leave, that kind of payment in advance has been approved.  We'd say because of the very short nature of this season and the industry, it's more in that nature of a payment than the Canavan nature of a payment.

PN109      

In circumstances where an employer is entitled under the Act - section 88 allows employers and employees to agree the taking of leave and an employer is entitled to refuse leave.  That's a provision of the Act.  In these circumstances the operation of the loading in 11.5 doesn't operate inconsistently with the provision of the Act because the employer, in accordance with the Act, is entitled to refuse reasonably annual leave.

PN110      

We're not saying that that will always occur, but in a very short period of time they're entitled to - which would then mean that all the annual leave is accrued and paid at the end as required by the Act, and we're just saying we'll pay that up‑front.

PN111      

VICE PRESIDENT HATCHER:  That last submission just said the annual leave otherwise will be payable at the end of the employment as required by the Act.  That's the very point, isn't it?

PN112      

MS SCHREIER-JOFFE:  No.

PN113      

VICE PRESIDENT HATCHER:  It's not a question of what you want to do.  It's what the Act requires.

PN114      

MS SCHREIER-JOFFE:  The Act requires that any accrued unpaid annual leave at the end of employment is paid out.  It doesn't say when you have to pay that out.  It just has to be paid.  We're saying why can't we, and we're saying it's not inconsistent.  It's an ancillary provision.  It's more beneficial to the employees.  It's not detrimental to the employees, so it complies with section 55 of the Act.  Why can't you pay that up‑front - well, not up‑front.  It's actually as the employee continues his employment for that very short period of time.

PN115      

In the circumstances, we would submit that for all those reasons - and they're far more extensively set out in our submissions - the employees benefit.  From a section 55 provision point of view, these provisions are not detrimental.  They conform with the Act's provisions about reasonable agreement as to the taking of annual leave or non‑taking of annual leave.

PN116      

In terms of the actual occurrence of what happens in this industry, the reality is that these employees don't take annual leave and then, at the end of the period, they would get a payment for annual leave.  We're just saying there's nothing in the Act that says they can't be paid up‑front - not up‑front, but in advance.

PN117      

VICE PRESIDENT HATCHER:  Do you want to make an alternative submission about the draft determination?

PN118      

MS SCHREIER-JOFFE:  Yes.  In terms of the draft determination, we submit that in fact the submission, I think, by - apologies, I think it was the AIG, about the deletion of clause 11.5 would probably be more appropriate because the award already provides for annual leave in accordance with the NES for all employees.  My difficulty with any determination at this moment is the fact that any change would actually affect the rates of pay for these employees, because at the moment the standard rate of pay for seasonal employees is the loaded rate.

PN119      

If there is a change made to that provision, clause 11.5, in effect, without any other changes made to the award at the same time, employees will be getting the benefit of the loaded rate plus an entitlement to the taking of that payment when they're - - -

PN120      

VICE PRESIDENT HATCHER:  That won't happen.  I can assure you there will be no single alteration to any modern award taking effect separately in advance of the modern award.  That is, when a modern award is made, all the provisions will take effect at the same time, not at different times.  To the extent - which is probably the case - that the draft determination will have consequences for the remuneration structure in the award, the parties will have an opportunity to make submissions about that when the Ski Industry Award comes up in the stage process.  Once that's dealt with, the new award as a whole will take effect.

PN121      

This is not going to take effect in advance of any of that, so why can't the consequential effects of a remuneration structure simply be dealt with by the parties when the Ski Industry Award comes on for its full review?

PN122      

MS SCHREIER-JOFFE:  Arguably, if there is a decision made that the provision is inconsistent, then the provision in the award doesn't operate and actually comes - the NES applies now, which has that effect regardless of any changes that you suggest might be taken at the end of the review process.  I suppose I raise that as an issue, because obviously it would have a direct issue in relation to this matter, but I'm mindful of what you've said.  We would suggest that the amendment to the award be the deletion of clause 11.5.

PN123      

VICE PRESIDENT HATCHER:  All right.  Thank you.  Mr Izzo?

PN124      

MR IZZO:  Your Honour, as a matter of process, do I assume you are happy for the employer and union parties to be interspersed?

PN125      

VICE PRESIDENT HATCHER:  Yes.

PN126      

MR IZZO:  Okay.  Your Honour, we don't propose to make any submissions regarding the draft determinations.  We're just dealing with the category 5 award issues.  There are about three or four particular issues of concern that I'd like to address.  The first one relates to the transfer of business provisions, if I could call them that, which appear in 11 awards.  The specific awards are set out in the background paper that the commission has published.

PN127      

The first of those is the Airline Operations Award.  Given that the clauses are relatively similar, if I could focus on that clause and direct your attention to that.  That's probably the simplest way.  I think the first thing I have to say is it's actually the Airport Employees Award, I apologise, not the Airline Operations.  If I could draw your Honour's attention - because I'll ultimately take you to it - in the Airport Employees Award, it's clause 31.10.

PN128      

VICE PRESIDENT HATCHER:  Yes.

PN129      

MR IZZO:  That clause is similar throughout the other 10 awards.  Your Honour, the starting point for the analysis of the award in these proceedings is section 55(1) of the Act.  This has been set out in the submissions, so I won't go any further other than to say section 55(1) of the Fair Work Act prescribes that an award provision cannot exclude the National Employment Standards or any provision of the National Employment Standards.

PN130      

If there is any confusion as to what constitutes the National Employment Standards, that is clarified by section 61 of the Act.  Section 61 makes it clear that the NES constitutes divisions 3 to 12 of Part 2‑2 of the Fair Work Act.  When we talk about the NES or any provisions of the NES, we're talking about any of the provisions that fall between division 3 and division 12 of Part 2‑2 of the Act.  That's the starting point for our analysis.

PN131      

The second thing I'd like to say before we turn to the relevant annual leave provisions, is that section 22(5) of the Act relates to service and its operation is uncontroversial.  What section 22(5) does is it sets up an automatic process whereby in every transfer of employment situation, an employee's service with an old employer is counted as service with a new employer.  That is the automatic effect of 22(5).

PN132      

We then come, your Honours, to the subsection that is really the issue in these proceedings, which is section 91(1).  As I'm sure your Honours are aware, the subsection provides that if an employer does not recognise a transferring employee's service from a non‑associated entity, then in those circumstances the employer does not have to recognise continuity of service and section 22(5) has no effect.

PN133      

The effect of this provision is to entitle an employer to refuse to recognise continuity of service in transfer of business situations.  Again, we say the operation of 91(1) is unambiguous.  That is its plain effect.  This is echoed by the explanatory memorandum to the Act and if I could just give your Honours the reference to paragraphs 374 and 375 of the explanatory memorandum, it states:

PN134      

The intention of this subclause -

PN135      

that is 91(1) -

PN136      

is that an employee's service with the first employer does not have to be recognised by the second employer in relation to the employee's untaken paid annual leave entitlements where there is a transfer of business between two non‑associated employers.

PN137      

It then goes on to say:

PN138      

The old employer will be required to pay out an employee�s untaken paid annual leave where the new employer does not agree to recognise service.

PN139      

The final thing we say about these provisions is that as a matter of practice we, therefore, have a situation where in some transfer of employment scenarios employees will have their service recognised, but in other transfer of employment scenarios employees will have their entitlements paid out and they start with a new employer afresh.  This is a provision, 91(1), which cannot be excluded for the reasons I've mentioned earlier.

PN140      

We then turn to what the award says.  The award clearly mandates that a new employer must recognise service in all transfer of employment situations.  That's very clear by the use of the express word "must" in the clause.  We say this directly conflicts with the discretion that has been conferred by 91(1).  As I said earlier, the effect of 91(1) was to create an entitlement for the employer to refuse to recognise service.  This is entirely inconsistent with that.

PN141      

If an employer was to purport not to recognise service - so that is they send a letter of offer to an employee in a transfer of employment scenario and say, "We won't be recognising your service" - they will be purporting to breach the award provision.  What we say, in conclusion, is that the effect of the award is to disentitle the employer to the discretion and that therefore results in an exclusion of section 91(1).

PN142      

If the commission accepts our argument on that, the only way that the award term can then be included is if it is permitted by section 54(4) of the Fair Work Act.  55(4) talks about ancillary and supplementary terms that may be included in modern awards.  We say this is not an incidental or ancillary provision.  It's not a machinery provision that's necessary to make the NES operate.  Rather, it expressly nullifies an NES provision.  We say it's a substantive clause and I don't think anyone in these proceedings has contended that it's an incidental or ancillary clause.

PN143      

That then brings us to the question of whether it's supplementary.  The term "supplement" connotes adding to something.  The 5th edition of the Macquarie Dictionary talks about "something added to complete a thing; to complete, add to, or extend."  We say to supplement the safety net, you must add to the safety net.  The effect of this award term though is to simply extinguish a discretion that exists within the safety net regarding refusal to recognise service in a particular scenario.  It deletes a section of the safety net and replaces it with an entirely different provision.  It's not supplementation.  It's wholesale change.  In those circumstances, the commission couldn't be satisfied that the safety net has actually been added to.

PN144      

The next thing that we'd like to say is even if the commission were to form a different view on that very point and the commission was to find against our submission that this is not a supplementary term, there is another fatal flaw to the term.  That is, 55(4) provides that supplementary terms can only be excluded to the extent that those terms are not detrimental to an employee in any respect.

PN145      

Those words "in any respect" are particularly important.  They appear in 55(4), but they do not appear in other sections of the Act.  I'll have to give your Honours the reference at the end, but, for instance, section 44(1) talks about, "An employer must not contravene a provision of the National Employment Standards."  It doesn't say "in any respect".  There are a number of provisions within the Act that talk about the NES not being derogated from, but this is the only one that includes a reference "in any respect".

PN146      

The effect of the award terms as they presently stand is to require employers to recognise service in all circumstances.  This means that all transferring employee annual leave accruals must transfer to the new employers.  Section 91(2) of the Act does not permit the accruals to be paid out by the old employer where 22(5) operates and service is recognised.

PN147      

If we then look at what the effect of that is, we can see that in some circumstances it may be desirable for employees to keep their service and for it to go across.  I think we have to concede that.  Equally, in other circumstances there will be situations where employees will prefer to have their annual leave paid out.  The desirability of having leave paid out for some employees is evident in the negotiation of cash out clauses in the enterprise agreements and it's also evident in the utilisation of cash out clauses under the Fair Work Act's own provisions.

PN148      

We don't have evidence in these proceedings demonstrating the extent to which cash out clauses are used, but I think the commission can take it as a given that cash out clauses are present in enterprise agreements and have been utilised.  Therefore, there is a level of benefit that has been derived by employees from the payout of cash out.

PN149      

What I think it comes down to is this:  I don't think there is anything exceptional in stating that some employees might like to have their leave paid to from time to time.  If the commission accepts that simple contention that some employees might like to have their leave paid out from time to time, then the award's compulsion for leave to be carried across in all circumstances is detrimental in some respects because it means employees lose the opportunity in some circumstances to have leave paid out; to have what you might call a windfall payment from time to time.

PN150      

Section 91(1), on the other hand, as it presently exists, does preserve the ability for there to be some circumstances where leave is paid out.  The effect of these submissions is that employees are in a worse position or in a more detrimental position in some respects with the award clause than they would be if we just relied on 91(1).  If that's the case, then section 55(4) cannot save the award provision.  It is inconsistent with the NES and should, therefore, not be in the award.

PN151      

COMMISSIONER BISSETT:  Mr Izzo, it's not the employee making the choice though, is it?

PN152      

MR IZZO:  That's right, Commissioner.

PN153      

COMMISSIONER BISSETT:  So it's actually quite different to the cashing out provisions that exist in enterprise agreements.

PN154      

MR IZZO:  That's correct.  In 91(1), we have to accept that the discretion is vested in the employer, but I think where we're coming from is that under the award provision there will be no circumstances in which an employee can ever be paid out, because the award requires service to be recognised and 91(2) says you can't have your leave paid out in those circumstances.  If there are employees out there - and we say there are - who from time to time might want a payout, well, they've still got a better chance under 91(1) than they do under the award, which just simply disallows it in total.

PN155      

COMMISSIONER BISSETT:  What about the employees who have a substantial amount of accrued leave because they were planning a trip of a lifetime next year?

PN156      

MR IZZO:  As I said, there are some employees in that circumstance.  The safety net is what the safety net is.  It has been drafted by parliament and it has already conferred that discretion to not recognise service.  If there are employees that are in that circumstance, it's unfortunately not for the award to rectify that.  It's a question of whether the safety net - whether 91(1) - if they're unhappy with the drafting, well, that's what the safety net says and their problem would really be with section 91(1), which is part of the NES and which we say cannot be excluded.

PN157      

Your Honours if there are no further questions on that transfer of business issue, that's all we had to say on that point.

PN158      

VICE PRESIDENT HATCHER:  Do you want to respond to Ms Taylor's submission which, as I understood it, said the inconsistency was saved under section 55(2) by reference to - I've lost it now.

PN159      

MR IZZO:  92(3).

PN160      

VICE PRESIDENT HATCHER:  93(4), I thought it was.

PN161      

MR IZZO:  Yes, I did, your Honour.  I apologise for that.  We disagree with that contention for this reason:  section 93(4) permits a modern award or enterprise agreement to include terms about the taking of paid annual leave.  This term is not about the taking of paid annual leave.  That's the first thing I'd like to say.  It's about accrual of annual leave.  It's about service and how one recognises service, which really is a matter not dealt with in the NES.  Service is generally dealt with by section 22.

PN162      

If one was to characterise what this modern award term is about, it is about accrual and service.  It says nothing about taking.  It doesn't prescribe rules for when it can be taken, when it cannot be taken.  It simply doesn't go to that issue.  Ms Taylor's reliance upon 93(4), we say, is not available.  For that reason, we say that it shouldn't influence the decision‑making of the bench.

PN163      

Your Honours, the next issue that I wished to discuss was the three awards which have clauses in them which relate to annual leave in advance.  One of the awards to which that relates is the Mobile Crane Award.  I'm just pulling up the provision.  It's clause 25.2(c).  The parties have raised some jurisdictional arguments regarding whether the clause as it appears is in conflict with the National Employment Standards or not.

PN164      

My understanding is that AIG will be making some jurisdictional arguments regarding the fact that it is not inconsistent to the National Employment Standards.  I don't propose to deal with jurisdictional arguments on this clause.  What I propose to deal with, however, is the merit for the clause being included or not included in the three awards.

PN165      

VICE PRESIDENT HATCHER:  Yes.  At this stage we're only dealing with the question of whether these provisions are inconsistent with the NES.  Merit issues will be dealt with at the full review of each award.

PN166      

MR IZZO:  If that's the case, your Honour, I'm happy to not make those submissions now.  The submission was a relatively simple one, that - - -

PN167      

VICE PRESIDENT HATCHER:  Except to the point that I think there's a flavour in the submissions perhaps arising from the Fair Work Ombudsman's point that it may not be directly inconsistent, but it may be expressed in a way which might be misunderstood and applied in a way which would be inconsistent with the NES.  Is that the point you want to make?

PN168      

MR IZZO:  I suppose in response to that, your Honour, we view the clause as saying that an employee - on its literal terms - and this is, we say from a merit perspective, obviously problematic.  The clause provides that once they have taken leave in advance, they are not to take a period of annual leave for a further 12 months.

PN169      

We think there's a whole series of reasons why drafted in that manner it's problematic.  What if the employer wants the employee to take leave over a close down period?  What if there's agreement?  There are any number of reasons why both parties would want to take leave and, on a literal reading of the award provision, it says that the leave must‑

PN170      

not commence until the expiration of 12 months, in respect of which the leave so allowed was taken.

PN171      

VICE PRESIDENT HATCHER:  Of 12 months' service.

PN172      

MR IZZO:  Your Honour, the unfortunate thing is it doesn't reference service.  It just says:

PN173      

The qualifying period of further annual leave will not commence until the expiration of 12 months in respect of which the leave so allowed was taken.

PN174      

VICE PRESIDENT HATCHER:  Sorry.  Yes, all right.

PN175      

MR IZZO:  For our part, we suspect this clause has arisen by virtue of the Annual Holidays Act in New South Wales, equivalent provisions in Victoria, where the way leave used to be accrued was that you would serve for 12 months and then at that point in time you would have your entire accrual crystallise, and at that point you can take the leave.

PN176      

It seems to be that this is a hangover from those days, for want of a better phrase, and that the way the clause would have operated in the past was to say that the employee, after taking leave in advance, does not get the opportunity to take leave again until they crystallise a leave entitlement after 12 months of continuous service.  That all seems to have been lost and, in any event, it's just not consistent with the regime that we now have in place.

PN177      

If I'm literally reading this clause - and that's what an employee might do or a small business employer - I read it and I say, well, if they've taken annual leave in advance, they're not to take annual leave again for 12 months.  That's certainly available.  If that's an available interpretation, we say it's one that leads to some very absurd outcomes and one which the commission should seek to strike down.

PN178      

I think you're going to hear jurisdictional submissions from AIG about the fact that if terms are expressly permitted by section 93(4), which is what Ms Taylor referred to earlier, then those terms can - or the NES operates subject to those terms, but I don't actually think it's necessary to go that far because we just say if on a literal reading it seems to have an absurd outcome, then there should be a basis for the commission to vary it.

PN179      

VICE PRESIDENT HATCHER:  Have you proposed an alternative?

PN180      

MR IZZO:  Australian Business Industrial and New South Wales Business Chamber have proposed an alternative.  It's twofold.  The first was to delete - - -

PN181      

VICE PRESIDENT HATCHER:  Is that in your submissions?

PN182      

MR IZZO:  The reply submissions, your Honour.  They're on 20 February.  Those submissions firstly propose the deletion of the second sentence of subclause (c) paragraph 1.  That's one way in which the commission could succinctly and efficiently deal with the matter.  Another approach is to adopt what the AMWU have suggested.  What they effectively have proposed is a clause adopted from the Manufacturing Award.

PN183      

That clause simply said that people can take leave in advance, but it then has a provision that says if at the point of termination they haven't accrued sufficient leave to cover that period, then there's a deduction that can be made.  That clause in the Manufacturing Award basically has the same effect as what's in there now, without this defective 12 months reference.

PN184      

There is a third alternative.  Last year a full bench convened, the annual leave full bench, to hear joint employer claims in respect of approximately 50 - I apologise, I don't have the exact number of awards, but approximately 50 awards that don't have annual leave in advance provisions.  That full bench is considering a claim by ACCI, AIG and other employer groups to include annual leave in advance provisions in those awards.

PN185      

If the commission was not willing to do either our first option which is delete, or our second option which is to adopt the AMWU approach, then another option might be to identify the second sentence in (i) as problematic, delete it and refer the three awards to the annual leave full bench.  The annual leave full bench grants the applications that we've made for annual leave in advance clauses.  The drafting as a result of those proceedings could just simply be applied to these three awards.

PN186      

VICE PRESIDENT HATCHER:  So in those proceedings you propose, in effect, a model clause?

PN187      

MR IZZO:  A model clause for annual leave in advance in awards that didn't have annual leave in advance clauses.  The reason why these awards were left off is because at the time we said, "Oh, well, these already have provisions about annual leave in advance.  They don't need to be the subject of the claim," but now these awards have popped up in the NES inconsistency section.

PN188      

COMMISSIONER BISSETT:  Is that model clause that you proposed in those proceedings substantially different to the Manufacturing Award clause?

PN189      

MR IZZO:  No, Commissioner.  The language won't be exactly the same, but it has two elements.  One is it says if the employee requests to take annual leave in advance, the employer may grant that request.  The second element is a deductions section which says that, however, if at the point of termination they haven't accrued, then so on and so forth.

PN190      

COMMISSIONER BISSETT:  Thank you.

PN191      

MR IZZO:  So that's a third option that's available to the bench.  Just to respond to Mr Maxwell, he raised a point which I think is a fair one, that if you simply delete (i) in its entirety and replace it with the Manufacturing Award, you'll have (i) dealing with deductions on termination and then that subject matter dealt with again at (ii).  That's a deficiency easily rectified.  You either delete (ii) or you don't adopt the part of the Manufacturing Award, you just adopt that part that refers to taking annual leave in advance.

PN192      

We say this is a deficiency that can easily be rectified.  The reason why I'm comfortable saying this - because I know we take a different position to AIG here - is that I don't think it's in any employer's interests to have their hands cuffed for 12 months; that they can't grant leave even if they want to.  That doesn't seem to be an appropriate part of the safety net for our part.  That, your Honours, is the second issue.

PN193      

The third issue is the Educational Services Award.  The clause in the Educational Services (Post‑Secondary Education) Award that is under scrutiny is clause 11.2(a).  That clause provides:

PN194      

The employment of a teaching staff member ... will not be terminated without at least four weeks' notice, inclusive of the notice required under the NES, or the payment of four weeks' salary instead of notice.

PN195      

The argument has been raised, I believe by the Fair Work Ombudsman, that this is potentially inconsistent with section 117 of the Fair Work Act, which provides that employees of up to more than five years' service get four weeks' notice, but if the employee is over the age of 45 they get an additional week's notice, taking them up to five weeks' notice.  We don't dispute that under the NES if you're over 45 and you have five years' service, you get five weeks' notice.

PN196      

What we do dispute is that the clause, as it's presently drafted, is in conflict.  It says that employees are entitled to at least four weeks' notice.  Now, on its face that is not inconsistent.  It talks about, elsewhere in the clause - it says at 11.1 that this clause supplements the NES in relation to termination of employment, so it draws attention to the NES and says this is in addition.

PN197      

It does indeed provide additional entitlements, because if you are in less than five years' service, say an employee of one year's service, the award will give you four weeks instead of one week.  If you're an employee with two years' service, you're going to get four weeks instead of two weeks and so on and so forth.  We see it as a provision which is more beneficial than the NES, so it does supplement, but what we say is that when read in conjunction with the NES - as the clause invites us to do - there is no direct conflict, or even indirect conflict I should add.

PN198      

VICE PRESIDENT HATCHER:  That's 11.2(a) of the Educational Services Award?

PN199      

MR IZZO:  Yes, your Honour.

PN200      

VICE PRESIDENT HATCHER:  What about (b)?

PN201      

MR IZZO:  I take it, your Honour, the concern is with reference to the fact that if the employer cannot give four weeks' notice of termination, notice of at least two weeks will be given.

PN202      

VICE PRESIDENT HATCHER:  Yes.

PN203      

MR IZZO:  In respect of that, your Honour, we would again say that it needs to be read in conjunction with the NES.  I must say that it could probably - I think this is the case with 11.2(a), as well - we are not advocating for any change to the entitlements that a conferred by the award, but there may be an argument for being able to better express the clause.

PN204      

VICE PRESIDENT HATCHER:  So how could you better express that, unless you actually take out the reference to two weeks?

PN205      

MR IZZO:  At present, all I would say is that "two weeks will be given" applies to circumstances where an employee has entitlement to two weeks' notice or less.  If they're entitled already to four weeks' notice of termination, then the NES is going to override.  That's how I'd say the clause operates now.  It's how it must operate.

PN206      

If we're just dealing with "is it inconsistent", I don't say it is because of the reference in the award to saying that it supplements the NES and that what this is directing its attention towards is providing minimum notice where people might not have the "up to two weeks' notice" already.  I think with respect to (b), your Honour, it perhaps could benefit from at least drawing employers' attentions to the fact that if there's an NES entitlement, that might also apply or something to that effect.

PN207      

VICE PRESIDENT HATCHER:  "Provided the minimum NES notice entitlement is paid" or something to that effect.

PN208      

MR IZZO:  Something to that effect.  We're very cautious to ensure that the actual entitlement isn't changed, but, by the same token, no employer organisation wants to see employers somehow misled into mis-paying entitlements.  That's not in the interests of employer organisations either.

PN209      

VICE PRESIDENT HATCHER:  All right.

PN210      

MR IZZO:  The final award is the Hair and Beauty Award that we propose to deal with, your Honours.  The relevant clause is clause 34 of the Hair and Beauty Award.  If I can just start with the title of clause 34.  It states, "Personal/carer's leave and compassionate leave," so it's dealing with three subject matters there:  personal leave, carer's leave and compassionate leave.  That's the heading.  If we go to 34.1, that clause again deals with all three subject matters:

PN211      

Personal leave, carer's leave and compassionate leave are provided for in the NES.

PN212      

If we then go to 34.2, there is a special provision about casual employees.  It says:

PN213      

Casual employees are entitled to be unavailable for work or to leave work to care for a person who is sick and requires care and support or who requires care due to an emergency; and such leave is unpaid.

PN214      

It talks about:

PN215      

A minimum of 48 hours' absence is allowed by right.

PN216      

The first thing I'd like to draw your attention to is that it only relates to carer's leave.  The reason I make this point is because some of the draft determinations appear to travel over a number of areas.  If I could also say this - and I apologise.  I should have said it earlier, your Honours - in respect of this award only, Hair and Beauty, I'm simply making submissions on behalf of the New South Wales Business Chamber and Australian Business Industrial.  I don't have instructions from ACCI in respect to this issue.  It's not that they don't want our position.  It's just that I don't have instruction on this issue.

PN217      

In any event, the difficulty with have - if I can just look at the award clause for the present purposes - with clause 34.2(b) is that the way in which it envisages leave being granted is inconsistent with the way in which leave is to be taken with respect to clause 103.  It provides at section 103(2):

PN218      

An employee may take unpaid carer's leave for a particular permissible occasion as:  (a) a single continuous period of up to 2 days; or (b) any separate periods to which the employee and his or her employer agree.

PN219      

You can have carer's leave broken up.  The way in which clause 34.2 is drafted is that it has to be a minimum of 48 hours' absence.  That envisages that you can't as a casual employee actually take carer's leave for a period of 24 hours.  To us that represents a direct inconsistency with section 103.

PN220      

SENIOR DEPUTY PRESIDENT HAMBERGER:  Have you seen the proposal from the NRA and the SDA, the proposed - - -

PN221      

MR IZZO:  I have, your Honour.

PN222      

SENIOR DEPUTY PRESIDENT HAMBERGER:  What do you think of that?

PN223      

MR IZZO:  I have a couple of concerns about it.  The first is that if you look at clause 34.2, it talks about casual employees are entitled to unpaid personal/carer's leave.  They've actually changed the nature of the entitlement to which clause 34.2 is directed.  If one looks at 34.2, it's only about carer's leave.  If one looks at the draft determination or the draft clause, now this is about personal leave and carer's leave.  This is seeking to create a right for casuals to unpaid personal leave.  That is a right that is not conferred by the NES.

PN224      

Whilst someone could argue it's supplementary - I'm not saying you don't have jurisdiction to put that in, but what I am saying is in an attempt to rectify an NES consistency, the proposal is actually changing the substance of the award entitlement.  You should be loathe to do that unless you hear a merit based argument in favour of that.  That is my first objection.

PN225      

The second objection is a separate one which simply relates to the fact that what the parties have sought to do in 34.2 is really just to reiterate what is in the NES and paraphrase it.  The commission has taken an approach thus far with modern awards to not paraphrase the NES.  The commission's approach has generally been to say, "If the NES deals with the matter, then the NES will deal with the matter.  We will only supplement the NES or provide incidental and ancillary clauses."

PN226      

We don't think there is, from a policy perspective, a good basis to start paraphrasing NES entitlements in the modern awards because it can only lead to possibly different interpretations.  The moment you start changing the words, you start room for debate about what an entitlement needs and why is the language different from what is in the NES.

PN227      

From what I can see, all the NRA and SDA are doing is trying to replicate the NES entitlement.  Other than that reference to personal leave, I don't think they're trying to change anything else, so I don't understand why we can't just say, "Unpaid carer's leave for casuals is provided for in the NES," or you could delete 34.2 in its entirety because the NES entitlement is already called up by 34.1.

PN228      

Your Honours, just on that point, if I could draw your attention to section 55 of the Fair Work Act.  Section 55 talks about:

PN229      

A modern award or enterprise agreement may also include the following kinds of terms:   (a) terms that are ancillary or incidental ... terms that supplement.

PN230      

It doesn't talk about replicating the NES.  If I take your Honours to 55.5 where the Act talks about enterprise agreements, it talks about the fact that:

PN231      

An enterprise agreement may include terms that have the same, or substantially the same, effect as provisions of the National Employment Standards.

PN232      

It says enterprise agreements can replicate the NES, but that same comment isn't made with respect to modern awards.  What we say that shows is somewhat of a legislative bias towards modern awards only building upon the safety net as opposed to re-expressing it.  That's why we have the policy view we have, that we shouldn't be just paraphrasing the NES.

PN233      

VICE PRESIDENT HATCHER:  It's not just a policy point.  You'd say that unless it actually serves a supplementary or incidental ancillary function, it's not permissible.

PN234      

MR IZZO:  The only reason I haven't gone that far, your Honour, is because of section 139 of the Act.  139(1)(h) allows modern awards to include terms about leave.  That's a separate head of power to deal with leave generally and that's why I used the phrase "policy bias", because they haven't expressly prohibited it, but they didn't say - like they did with enterprise agreements - you can have terms that have the same effect.  Your Honours, unless there are any questions, they are the submissions that we would like to make.

PN235      

VICE PRESIDENT HATCHER:  Mr Ferguson?

PN236      

MR FERGUSON:  Thank you, your Honour.  I might start firstly just by pointing out that the AI Group has filed four detailed submissions in relation to these proceedings.  We of course rely on all those submissions.  They're dated 26 September, 15 October, 23 January and 19 February.  Obviously they're comprehensive and I've heard your Honour's comments, and I won't seek to repeat all of that detail.

PN237      

What I might like to do is make a couple of minor corrections to some typographical issues in one of those submissions that make it somewhat difficult to read.  Very briefly, it's the submission of 23 January.  I take the bench to paragraph 4.6, firstly, and in the third last line of that paragraph - - -

PN238      

VICE PRESIDENT HATCHER:  Just hold on a second, Mr Ferguson.  What paragraph?

PN239      

MR FERGUSON:  4.6.  In the third last line, there's a reference to section 22(2).  It should be 22(5).

PN240      

VICE PRESIDENT HATCHER:  Yes.

PN241      

MR FERGUSON:  At paragraph 4.8 in the second line, the second last word "not", that should be crossed out.  That shouldn't be included in there.  That's it.

PN242      

VICE PRESIDENT HATCHER:  Thank you.

PN243      

MR FERGUSON:  If I move firstly to the issues in relation to the draft determinations and our submissions that we put, if I could respond to, I suppose, the class of clauses dealing with what I might describe as leave in advance issues.  It was put by the CFMEU, if I recall correctly, that there's agreement that there's an inconsistency in the Mobile Crane Award.  Our submissions of 26 September indicate we do not accept that that provision is inconsistent with the NES.

PN244      

It's for similar reasons that we advance in the context of the Airline Operations Award.  We've set that our in our submissions, but putting it succinctly we say these clauses are by their nature clauses about the taking of leave and, as such, permitted by section 93(4) of the Act.  Of course we say that section 55(3) of the legislation means that the NES operates subject to those times of expressly permitted clauses.  As such, we say no inconsistency arises.

PN245      

VICE PRESIDENT HATCHER:  So what do the clauses actually mean?  What is their effect?

PN246      

MR FERGUSON:  If you look to the Airline Operations Award, it's clause 34.2 in particular.

PN247      

VICE PRESIDENT HATCHER:  Yes.

PN248      

MR FERGUSON:  It provides an ability for an employer to -

PN249      

allow annual leave to an employee before the right thereto has fully accrued, but where the leave is so taken a further period of annual leave will not commence until the expiration of the 12 months' service in respect of which annual leave was taken.

PN250      

Putting aside any issues about drafting, it seems to limit the ability of an employee, for example, to enforce a right they may otherwise have under the NES to require an employer to grant them some taking of leave where it would be reasonable.  It seems to actually temper that and provide an ability to an employer to restrict or to not have to comply with that provision; so it does seem to restrict the accessing of annual leave.

PN251      

VICE PRESIDENT HATCHER:  So 12 months means a period of 12 months after the leave in advance is taken, does it?

PN252      

MR FERGUSON:  Yes.

PN253      

VICE PRESIDENT HATCHER:  What is the purport of the words "in respect of which annual leave was taken?"

PN254      

MR FERGUSON:  I suppose one difficulty arises.  It may be a throw-back in some sense to a time when the leave accrued based on a full year's entitlement, which - I suppose another difficulty arises about exactly what that means and I would probably need to give that some thought.  We have tackled this very much just from the point of view of is this inconsistent with the NES, rather than is there merit in revisiting the drafting of the clause - - -

PN255      

VICE PRESIDENT HATCHER:  Might it mean, for example, that if you've been with an employer for six months and you want to take four weeks' leave, you're given the four weeks' leave but you can't any further leave until the 12 months' service which relates to the four weeks, i.e. another six months has passed.

PN256      

MR FERGUSON:  I anticipate that that would be right.  It would operate the way, say, for example, New South Wales did.  You may grant leave in a period in advance, given the paradigm there that you didn't get an entitlement until you had the full year.  So if you take two weeks or three weeks or whatever, until you get to the full entitlement, you can't access further leave.  I think your Honour is right in the way you've described it.

PN257      

VICE PRESIDENT HATCHER:  But interpreted that way, there's no accrued NES entitlement that you're not allowed to take.  That is because until you've finished that 12‑month period, you haven't got any accrued entitlement because you've already taken the four weeks for that 12 months.

PN258      

MR FERGUSON:  I accept that there's no entitlement in the sense of, say, the Annual Holidays Act where, you know, you accrue as you go under this legislation.  This seems to import a separate prescription, which is that, well, you have to get to the 12‑month mark.

PN259      

VICE PRESIDENT HATCHER:  If you're accruing as you go, the fact is you've taken it in advance so there's no accrual left until you've used up the period of service to which the leave in advance relates.  My example, if you've had six months' service, you've accrued two weeks.  You want to take four weeks.  You're given four weeks.  Until a further six months has passed which accounts for the other two weeks you've taken, then you can't take a further period of leave.  On one view, that doesn't contradict the NES because you've used up the accrual for the whole of the 12 months.

PN260      

MR FERGUSON:  That's right.  You may have taken some period in advance of however it accrues - and how it accrues is probably not the issue - and then it sort of imports this new 12‑month restriction on it.  As you say, it doesn't necessarily sit comfortably with the NES, but I don't know that it's an inconsistency - - -

PN261      

VICE PRESIDENT HATCHER:  I'm not sure you're comprehending what I'm saying.  Perhaps I'm not either.

PN262      

MR FERGUSON:  I'm happy to give it a little bit further thought perhaps and - - -

PN263      

VICE PRESIDENT HATCHER:  I'll say it again.

PN264      

MR FERGUSON:  Yes.

PN265      

VICE PRESIDENT HATCHER:  You have six months' service.  You've accrued two weeks.

PN266      

MR FERGUSON:  Yes.

PN267      

VICE PRESIDENT HATCHER:  You want to take four weeks.  You're given four weeks, which means two weeks in advance.

PN268      

MR FERGUSON:  Yes.

PN269      

VICE PRESIDENT HATCHER:  So after you come back from your holidays, it's a further six months before you can take any further leave.

PN270      

MR FERGUSON:  Yes.

PN271      

VICE PRESIDENT HATCHER:  That counts as the entire 12 months, to which four weeks' annual leave related.

PN272      

MR FERGUSON:  That's right.

PN273      

VICE PRESIDENT HATCHER:  That doesn't contradict the NES.

PN274      

MR FERGUSON:  No.

PN275      

VICE PRESIDENT HATCHER:  Because in the further six‑month period, you've already taken what would accrue during that period.

PN276      

MR FERGUSON:  That's right.

PN277      

VICE PRESIDENT HATCHER:  So there is no contradiction with the NES, if it's read in that way.

PN278      

MR FERGUSON:  That's right, if it's read that way.

PN279      

VICE PRESIDENT HATCHER:  But if it's read in the way Mr Izzo contends - that is, it's another 12 months - well, there would be a problem.

PN280      

MR FERGUSON:  Yes, that's right.  I don't have submissions to put more broadly in relation to the issues Mr Izzo has raised about the clause.  We had anticipated that would be an issue for the award stage.

PN281      

VICE PRESIDENT HATCHER:  Although Mr Izzo - the one he took us to is drafted somewhat differently, where the ambiguity is more apparent.  I think the word "service" doesn't appear.

PN282      

MR FERGUSON:  In relation to Live Performance?

PN283      

VICE PRESIDENT HATCHER:  He took us to Mobile Crane Hire, I think.

PN284      

MR FERGUSON:  Mobile Crane, yes.

PN285      

VICE PRESIDENT HATCHER:  In Airlines, it has got 12 months' service in respect of which annual leave was taken.  The word "service" doesn't appear in the Mobile Crane Hire one.

PN286      

MR FERGUSON:  No, it doesn't, but we'd still say broadly it's a clause about taking leave and, as such, not inconsistent in a technical sense.  I don't propose to deal any more with that issue, unless there are any further questions.  If I can come to then the point that was raised - or the issue of shift worker provisions and the draft determination there.  We've filed quite detailed submissions arguing our view as to the appropriate course of action that should be taken in that respect.

PN287      

I might just say in relation to the issues raised by the AMWU, we didn't anticipate that the last proceedings were in any way an opportunity to deal with the remedy that might flow from an inconsistency that was found.  If memory serves me correctly, I think I actually clarified that with the President during the proceedings, so I don't think there should be any criticism for us not at that stage dealing with the issue.  In fact I don't think we were even given an opportunity to.

PN288      

Regardless, we obviously have filed late.  I appreciate that a course of action for dealing with that has already been determined.  The only thing we'd say is we would appreciate an opportunity to reply to what new material might be put by the AMWU.  I don't want to cause this bench the inconvenience of reconvening for that simple matter.  We'd anticipate that we could deal with on the papers and we'd of course be keen to do that as swiftly as possible.  I anticipate, you know, similar periods - seven days or something of that nature - would be sufficient to respond to that.

PN289      

VICE PRESIDENT HATCHER:  All right.  We'll allow you a further seven days to respond to the AMWU's submission in that respect.

PN290      

MR FERGUSON:  The only other broad point I want to make in relation to this issue arises from the material that at one point was put by, I think, the AMWU Vehicle Divisions, where there has been a reliance on past decisions.  I think the Locomotive Engineers decision, which they've helpfully included in their submissions - there has been reliance on those submissions as giving some weight to the proposition that given the outcomes reached there, this bench shouldn't deviate from the existing arrangements in awards in relation to additional leave for shift workers.

PN291      

All we want to say to that is that obviously some portion should be shown to the amount of weight that's put to those past decisions.  They were obviously made a long time ago  I think that decision is from the mid‑40s and they were made in a very different context.  We're obviously operating under an entirely different statutory regime now and that in itself goes to the heart of why we say the appropriate approach to now take in crafting the award terms would be, as far as possible, to align them to the approach adopted within the statute itself and the approach that is broadly applied to other employees.  We say there are a great deal of benefits that could be achieved from having a level of uniformity in relation to those issues.

PN292      

The other point we want to make is of course those decisions were made at a time when we're talking about, you know, additional leave in the context of employees only having two weeks of leave.  Things are very different now and we're not trying to take away holus‑bolus the additional leave for shift workers.  There is just simply a small modification which would mean that provisions are not quite as generous to employees, but we still are accepting that under the statue of course they would have that additional entitlement.

PN293      

What we're not trying to do is change the definition in the awards of who a relevant shift worker would be.  We'd say that those elements of the clause should stay and we don't seek to vary that in any way.

PN294      

VICE PRESIDENT HATCHER:  Ms Taylor said that one effect of the provision is that if for a short period you fill in for somebody else on a seven-day shift roster, you should get the pro rata entitlement for the extra week's leave.  What do you say to that?

PN295      

MR FERGUSON:  I didn't intend to deal with, you know, who specifically would be a seven‑day shift worker under the existing definition, but I think if you look at the award clauses and the second limb of the proposed draft determinations, the second limb of that, as I understand it, still contemplates that the entitlement would only be applicable to people who meet the definition of being a seven‑day shift worker under the award.

PN296      

We'd say all the award really needs to do is provide a definition for who is a relevant seven‑day shift worker for the purposes of the NES and then leave it to the Act itself to deal with how a proportionate entitlement might be calculated.  We don't see in this case, where it's dealing with what is an inconsistency with the NES, really a need to start looking at changing the definition of who is a seven‑day shift worker.  It may be an issue for another day and I know that there has been some judicial consideration of that.  Probably, from memory, in the New South Wales jurisdiction, but it's not an issue we want to deal with in detail today.

PN297      

COMMISSIONER BISSETT:  Sorry, isn't the AMWU's submission though that if we adopted your course, we will actually remove an entitlement to some people?  Adopting your course sounds very nice and neat, but the process of doing so will remove an entitlement that exists at the moment.

PN298      

MR FERGUSON:  Yes.  The way we had contemplated the clause is that the second paragraph - so paragraph (c) as it is in the draft determination.  I'm looking at just the manufacturing definition.  It contemplates still, if you look at that wording, that they be engaged only part of a month as a seven‑day shift worker.  Our reading was that you'd still need to meet the definition of being a seven‑day shift worker to get the proportionate amount.

PN299      

COMMISSIONER BISSETT:  That is where you and the AMWU differ.

PN300      

MR FERGUSON:  Yes.  There may be a contest about who is a seven‑day shift worker.

PN301      

COMMISSIONER BISSETT:  Or whether that last paragraph - whether you have to meet the full definition of a seven‑day shift worker to get that pro rata.

PN302      

MR FERGUSON:  We may be apart on that, as well.  As I said, I'm not trying to advance a view as to who is a seven‑day shift worker, but we'd say it still depends on that.  I'm not going to add anything further to that issue, unless there was a question from the bench.  If I can move on then to the issue of annual leave clauses as they relate to transfer of employment situations.  We've dealt with that in some detail in our submissions; particularly our submissions of 23 January, where you'll recall that we've been quite comprehensive in our view.

PN303      

I don't want to be repetitive because they're there and Mr Izzo has put a number of submissions that are broadly consistently with what we've put in our written submissions, but if I could just elaborate one some small points.  The first is that we say the clauses that we've identified are inconsistent with the NES in the sense that they exclude the NES in a manner prohibited by section 55(1).  We'll come to the AMWU's arguments in a moment.

PN304      

The next point we'd make is that that also enlivens the operation of section 136 of the Act and specifically section 136(2)(b).  That provision provides that a modern award must not include terms that contravene section 55.  We say that if you find a contravention of section 55, then that has to be removed from the award, although we note that section 137 also provides that the term is of no effect - - -

PN305      

VICE PRESIDENT HATCHER:  So what provision on that What provision is that?

PN306      

MR FERGUSON:  Section 136(2)(b).

PN307      

VICE PRESIDENT HATCHER:  Sorry, you said something about being of no effect.

PN308      

MR FERGUSON:  Section 137 provides that a term of a modern award - - -

PN309      

VICE PRESIDENT HATCHER:  137, yes.

PN310      

MR FERGUSON:  Yes, has no effect to the extent that it contravenes section 136.  For completeness, section 56 says essentially the same thing in the context of terms of contravening section 55.  Our view, though, is that they do contravene that section.  Now, the AMWU, as I understand it, and other unions perhaps, put a view that the terms are supplementary and, as a consequence, section 55(7) saves them because they�re taken not to contravene this provision.  We don�t accept that they are supplementary terms for the reasons we have already elaborated on.  We say they are simply directly inconsistent with the provision of the NES and they provide for a different recognition service than what the NES curtails and, really, we haven�t seen any case made out for why they would be considered a supplementary term.  They don�t, as Mr Izzo put it, add anything.  They simply provide for the recognition service to apply different, and we say that is not a sound basis for their exclusion.

PN311      

The AMWU also now advance a different argument which is that the terms are permissible under section 55(2).  That�s the provision that says a modern award enterprise agreement may include any terms of the award or agreement as it�s expressly permitted to include by certain other specified provisions of the Act, and they try and then get that in through section 93(4), which is a provision about enabling awards to include terms dealing with the taking of leave.  On this issue, we don�t cruel with their interpretation of section 55 in relation to this issue, apart from the fact that we say that the interpretation of section 93(4), is far too broad to be acceptable.  Clearly, the terms that we�re talking about do not deal with the taking of leave.  Our contention would be that the taking of leave, or the term �dealing with the taking of leave� would be terms that go to the accessing of leave.  It�s not a term which deals with matter that may in some way touch upon or relate to whether leave is ultimately taken.  Now they seem to adopt a very broad - - -

PN312      

VICE PRESIDENT HATCHER:  Well if may affect that depending upon the way in which it works.

PN313      

MR FERGUSON:  It may affect it, but the heart of the argument seems to be that � well, you�d have no leave to take if the award provision wasn�t there because you�d have no leave accrued, or no leave to which you are entitled to.  We say, if you look at the section in the context of the NES provisions as a whole, it�s quite clear that the provision dealing with taking of leave, is not intended to capture arrangements around accrual or the quantum with the entitlement of leave.  Those are dealt with in section 87.  It is giving far too broad a reading of section 93(4) to say that anything that somehow touches upon it is capable of being dealt with in the award space and it�s significant, because of course, as we�ve said, if that was the proper reading of 93(4) it would mean that all the various other provisions of the NES would operate subject to those sorts of clauses, so you could potentially circumvent provisions in the NES dealing with quantum of leave and provide award terms reducing the quantum of leave.  So, really, the approach adopted by AMWU is one that couldn�t be accepted by this Commission.

PN314      

VICE PRESIDENT HATCHER:  Are you saying this Ms Taylor�s broad approach, for example, on award clause which gave you three weeks� annual leave, is a clause about the taking of leave?

PN315      

MR FERGUSON:  It would be.  Can�t have it both ways, because it is not subject to the same rule about relevant detriment, et cetera, so you don�t get into that issue.  So that�s why we say that approach couldn�t be adopted and, for that reason, you don�t need to get to 55(3) because it isn�t one of those terms.  So we say that the provisions are existent.

PN316      

The only other provision we would probably make is that � we�d say even if these terms are not inconsistent in the sense that if the Commission finds against them, they take the view that they�re not excluding the NES, they are still quite clearly inconsistent with the approach adopted within the NES and the broad framework of the Act and as such we�ve mounted merit based arguments as to why the awards should be modified, to ensure that the rules around and the leave accruals and the context of transfer of employment, are consistent with the broader approach adopted in the Fair Work Act.  We said that was an important reform that was introduced and it�s a sensible reform that acts to promote the retention of employees within a new employer in situations where there is a transfer of employment.  We say that the Commission should act to amend the awards to align them to the legislation and the broader approach in the NES.

PN317      

Unless there are any questions, those are all the submissions I wanted to put.

PN318      

VICE PRESIDENT HATCHER:  All right.

PN319      

COMMISSIONER BISSETT:  You might be the wrong person to ask Mr Ferguson, but do you recall how the ski industry provision arose at the earliest stage?  Who raised that as the inconsistency, was that simply the Fair Work Ombudsman?

PN320      

MR FERGUSON:  I don�t recall.  I suspect it may have been, but I can�t be certain about that.

PN321      

COMMISSIONER BISSETT:  Thank you.

PN322      

VICE PRESIDENT HATCHER:  Ms Valair, were you next?

PN323      

MS VALAIR:  Your Honour, the Master Plumbers Association has only one issue concerning this proceeding in section 80.6, Plumbing and Fire Sprinklers Award, which deals with the transfer of business and a recognition of prior service for annual leave purpose.  We made a submission in a reply on 19 February to support submission of ABI dated 23 January and we also support a submission of ABI in this regard to their submission.

PN324      

We do not intend to add anything else.

PN325      

VICE PRESIDENT HATCHER:  Thank you.  Ms Adler.

PN326      

MS ADLER:  Thank you, your Honour.  I only have one brief submission in relation to the Building and Construction General On-site Award.  The issue relates to clause 17.7 of that award in relation to transfer of business as it relates to redundancy.  We made submissions dated 23 January and I would rely on those and simply add that, given the industry specific nature of clause 17 of that award, within which 17.7 resides, the NES doesn�t apply and therefore there is no inconsistency arises.

PN327      

VICE PRESIDENT HATCHER:  Are you saying it�s an industry specific redundancy scheme?

PN328      

MS ADLER:  We do.

PN329      

COMMISSIONER BISSETT:  So that�s in tandem(?) with the CFMEU.

PN330      

MS ADLER:  Yes.

PN331      

COMMISSIONER BISSETT:  Get that on record.

PN332      

MS ADLER:  It is.  I�m hesitant to put it that directly, Commissioner.

PN333      

VICE PRESIDENT HATCHER:  Tease that bit out, didn�t we.

PN334      

MS ADLER:  Yes.  That�s all I wish to say, thank you.

PN335      

VICE PRESIDENT HATCHER:  All right, thank you.  Mr Ferguson.

PN336      

MR FERGUSON:  To assist the Bench, it was the Fair Work Ombudsman that raised that issue in relation to the alpine industry.

PN337      

VICE PRESIDENT HATCHER:  Mr Thomas.

PN338      

MR THOMAS:  Thank you, your Honour.  Your Honour I adopt the submission made by Master Builders Australia on - - -

PN339      

COMMISSIONER BISSETT:  Excuse me, sorry.  I think you�re going to have to come to the front Bar table.  I think they�re not picking you up.

PN340      

MR THOMAS:  Thank you.

PN341      

COMMISSIONER BISSETT:  We don�t want you to spend all that time speaking and us not have a record of it.

PN342      

MR THOMAS:  Thank you, your Honours.  I adopt the submission provided by Master Builders Australia on 23 January this year.  The CFMEU and the HIA have indicated general agreement with the proposition that there is no inconsistency relating to clause 17.7 of the Building and Construction General On-site Award and I support that view.

PN343      

For us it is simple.  There is a long history of industry specific redundancy provisions in industry awards in the construction industry.  The modern award reflects that practice and, indeed, under the current legislation section 141 of the Act allows the Fair Work Commission to include in modern awards an industry specific redundancy scheme.  They have done that at clause 17 of the Building & Construction General On-site Award and from there, for us, it is simple.  Under section 123(4), if you are benefitting from an industry-specific redundancy scheme, then you cannot have the NES and, if you have the NES, you can�t have the Building and Construction specific scheme, or if you had the NES you can�t have an industry specific scheme.  In those circumstances, you can�t have an inconsistency and for us, the proposition is that simple.

PN344      

As the Commission pleases.

PN345      

VICE PRESIDENT HATCHER:  Thank you.  Ms McKinnon.

PN346      

MS McKINNON:  Thank you, your Honour.  The National Farmers Federation only wishes to deal with the issue of the annual leave and continuity of service issue.  We don�t make any submissions on the draft determination.

PN347      

This issue was raised by us so, in fairness, we should deal with it appropriately.  We filed two submissions in the proceedings on 26 September last year and this year on 23 January.  We see this as a matter of clear and direct inconsistency between the modern awards and the NES, going to whether or not employers have a choice about recognising the service in a transfer of employment situation.  The eight modern awards in question take away that choice and so we say that means that the right of the employer under the Act is excluded, or, put another way, displaced.  We say that contravenes section 55, section 61 of the Act and, for that reason, must be removed from the modern award.

PN348      

We say about section 55(1) that it doesn�t operate subject to section 55(4).  It operates independently and that modern awards can�t exclude the NES, even if the exclusion isn�t detrimental to employees.  That�s a conclusion that has some authority in the Federal Court and I have a decision which I can hand up in the Shop Distributive and Allied Employees Association v Woolworths.  Paragraph 78 of that decision - - -

PN349      

VICE PRESIDENT HATCHER:  What paragraph?

PN350      

MS McKINNON:  78, it is right at the back on page 32.  Barker J, in his decision says that:

PN351      

Either an award or an agreement will, by its terms, be found to exclude the NES or it will not.

PN352      

MS McKINNON:  Then two sentences later, it says:

PN353      

Here, in the case in question, it is not open to conclude that the agreement does not offend the Act simply because other benefits are given in respect of -

PN354      

In that case, a holiday -

PN355      

and the legal basis upon which an employee has an entitlement is important.

PN356      

We say that can be applied in this case so that you can�t just change the rules in the NES if to do so you take away a right conferred under the NES.  If you do that, it�s inconsistent with the NES and it�s an exclusion that can�t be remedied.

PN357      

In our submission, if modern awards were permitted to exclude the NES, as long as they didn�t do so in a detrimental way that the Act could say that, and so what we say is that unions who support the retention of the clause are asking the Commission to read into section 55(1) words that are not there.

PN358      

I just wanted to deal briefly with some cases that the Australian Workers Union relies on in this case in support of the argument that the terms are supplementary and therefore can be included.  We don�t agree that the terms are supplementary in nature.  They don�t add anything, they take something away.  The first decision the AWU deals with is MUA v FBIS International Protective Services.  It�s referred to the AWU�s submission of 23 January.  We think that this decision doesn�t help the AWU and, if anything, it helps our argument.  The discussion relied upon by the AWU in that decision was dealing with the source of redundancy entitlements, that is, whether the source of the entitlement came from the NES or from the enterprise agreement.

PN359      

The term under consideration excluded the NES to the extent that it didn�t require an application to the Commission before turning off the entitlement to redundancy pay.  Under section 120 of the Act, if you are an employer seeking to vary or reduce the obligation to redundancy pay, you must apply to the Commission to seek that order.

PN360      

VICE PRESIDENT HATCHER:  If my memory serves correctly, there�s been an application for judicial review of that decision in the Federal Court.

PN361      

MS McKINNON:  It may well be, but I think in any event, the facts in that case don�t assist in this case because it�s not the same thing.  In that case, the enterprise agreement didn�t require an application to be made, it simply turned off the entitlement to redundancy if alternative employment was found.  We say that the decision actually supports our contention, that is, dealing with an argument that an enterprise agreement term operated to exclude the NES, the Commission confirmed that such a term would have no effect under section 56 and that�s in paragraph 28 of the decision.  What the Commission said in that paragraph was that:

PN362      

Moreover, to the extent that it was submitted that section 120 was excluded by the operation of the agreement clause, the submissions fly in the face of section 55(1) and, if it so operated, has no effect by reason of section 56 of the Act.

PN363      

MS McKINNON:  The paragraph that the AWU relies on in support of its submission in this case is paragraph 32 of the decision.  In that paragraph, the AWU has extracted in its submissions, there�s a phrase used, �the strictures in section 120 of the Act�. The AWU seeks to put the argument that the strictures in the NES can be removed, as long as it�s not detrimental to an employee.  We say that�s too broad a reading of the decision.  The strictures in section 120 that the Commission was talking about have to be seen in light of the example given by the Commission in that same paragraph, where an enterprise agreement provides for redundancy pay, whether or not the employer obtains acceptable or alternative employment.  That

PN364      

s an example and that we say clearly is one that would supplement the NES.  It goes over and above the entitlement in NES and adds something to the employee�s entitlement, doesn�t take anything away.  That�s not the situation that we are dealing with here.

PN365      

VICE PRESIDENT HATCHER:  Sorry, I�m lost.  What has section 120 got to do with this?

PN366      

MS McKINNON:  Why it�s relevant is because it�s the case that the AWU relies on to demonstrate that this supplementary term is relevant to our case.  To add to that, your Honour, section 120 would be relevant if, in the context of this case, if the MUA � if the facts of that case had an enterprise agreement saying to the parties � it had an enterprise agreement term that said �You cannot apply to the Commission, or you must not.� something that took away from or excluded a provision of the NES, but it didn�t.  So the facts in that case simply don�t align with the facts in this case and we say that the case doesn�t support the position.

PN367      

We say the same thing about the other case that the AMWU relies on which is ZL(?) Employment v AMWU and all that decision does in the context of this case, was pull up the arguments made in the MUA case.  Again, we say it doesn�t assist.

PN368      

In summary, the right of an employer to decide whether or not to recognise service is a right that we have agreement on is conferred under the NES but it�s not a stricture that can simply be removed.  Employers have a right to make a choice.  Any modern award term that takes away that right excludes a part of the NES, has no effect under both section 56 and 137 and displaces the NES, contrary to section 61.

PN369      

VICE PRESIDENT HATCHER:  Thank you.  Whose next; Mr Crawford?

PN370      

MR CRAWFORD:  Your Honour and Commissioners, the only two issues that I wish to deal with today are the Alpine Resorts Award, then the issue that the NFF were just referring to.  On the Alpine Resorts Award, our view is consistent with the Full Bench�s previous decision that basically, the provision does offend the NES and is hence invalid in that it basically prescribes for the prepayment of annual leave.  It would appear that the Bench is bound to uphold the (indistinct) decision which basically determined that the prepayment of annual leave is contrary to the NES and the important aspect of that decision was the effect that the payment for the annual leave did not occur in the same pay period.

PN371      

VICE PRESIDENT HATCHER:  Mr Crawford, I know we�ve heard a submission about this, but you don�t really need to make a submission to us that a previous decision was correct.

PN372      

MR CRAWFORD:  Well I mean it�s just because that, subsequent to that decision, obviously there�s been further issues raised.

PN373      

VICE PRESIDENT HATCHER:  I think we�ve said fairly loudly that we�ve made a decision about this.  You don�t need to go through it again.

PN374      

MR CRAWFORD:  Okay.  Another issue we have addressed in our subsequent submissions is the draft determination.  You may recall that we�ve previously indicated that there could be a financial disadvantage for employees but, given your earlier comments, that we�re basically dealing with legal issues here.

PN375      

VICE PRESIDENT HATCHER:  There was a practical problem raised in that, to the extent that we�ve made a finding that the provision is inconsistent with the NES, that may be taken by some people to mean that it has no effect and, if we don�t complete our review of the Ski Industry Award before the ski industry season starts, that may mean that there is at least confusion about the issue and at the worst it may mean there�s double dipping, that is, employers may feel they have to pay any leave on termination and pay the loading at the same time.

PN376      

MR CRAWFORD:  Yes.

PN377      

VICE PRESIDENT HATCHER:  I should know this, but do you know what stage the Ski Industry Award is in?

PN378      

MR CRAWFORD:  It�s in group 2 and we are pursuing annual leave loading as a claim in relation to that particular award, but there are a number of flow-on effects from this issue, because for example in that award, the standard rate is defined with reference to a seasonal employment rate which obviously at the moment includes the loading.  Perhaps it may assist if a relatively urgent conference is convened to talk about � I guess if the decision stays as is, to talk about flow-on issues that need to be corrected in relation to that award.  Obviously, we would ideally like to have our annual leave loading claim determined before the - - -

PN379      

VICE PRESIDENT HATCHER:  So what�s the nature of that claim?

PN380      

MR CRAWFORD:  At the moment, there is no annual leave loading in the Alpine Resorts Award.  We are saying that is unusual.  I think there is only four or five awards that do not contain annual leave loading.  So basically we are seeking the insertion of 17.5 per cent loading for all permanent employees.  In our view, that would mitigate the disadvantage that seasonal employees may otherwise suffer, if they simply just lose that 8.3 per cent loading.

PN381      

VICE PRESIDENT HATCHER:  I understand.

PN382      

COMMISSIONER BISSETT:  Just from the practical perspective, what is the situation of bargaining in the Alpine Resorts Area?

PN383      

MR CRAWFORD:  Do you mean are there enterprise agreements?

PN384      

S COMMISSIONER BISSETT:  Yes.

PN385      

MR CRAWFORD:  I can�t answer that definitively.  I believe there are some enterprise agreements, but I understand that there would be employees relying on the award.

PN386      

VICE PRESIDENT HATCHER:  If I recall correctly, there�s also a major issue about the coverage of the award, is there not, that needs to be resolved?

PN387      

MR CRAWFORD:  There certainly is and basically there is an application by some employees to some extent expand the coverage of the existing award.

PN388      

VICE PRESIDENT HATCHER:  Which won�t affect the Victorian resorts, was it?

PN389      

MR CRAWFORD:  I think it mainly is Victoria.  Basically, I think the argument is that at the moment, as an employee you have to operate an alpine lift to be covered, and I think the application is to extend that to employees who work in resorts, but don�t necessarily operate a lift.

PN390      

VICE PRESIDENT HATCHER:  Your immediate response is that there should be an urgent conference of the parties as a starting point?

PN391      

MR CRAWFORD:  Yes, I think that would be a good idea.  The only other issue that I wanted to address is the transfer of employment annual leave situation.  I don�t really have a lot to add to my written submissions on that.  We do say that the current award provisions supplement the NES.  We say they provide an additional benefit to employees above the minimum standard in the NES, hence section 55.  Basically, we say that they�re supplementary terms under section 55(4) and hence section 55(7) has work to do because, whilst ordinarily section 55(1) may pose problems for those particular provisions, section 55(7) makes it clear that if the Bench determines that these are supplementary provisions as allowed for under section 55(4), well then basically the work of section 55(1) is modified by section 55(7), so we say they can be included on that basis.

PN392      

The point I was trying to make in referring to the cases that do concern redundancy in the NES provisions, was that ordinarily in the NES redundancy provisions there are exclusions from the obligation to pay redundancy, for example for small business employees, for example when there is determination issued to the ordinary and customary turnover of labour.  Pretty clearly, under the NES, an employee would not have to pay redundancy pay in those situations, but a number of Full Benches have now determined that � I think they�re all to do with enterprise agreements, but basically an enterprise agreement can supplement the minimum NES entitlement as long as it�s not detrimental to any employee and that has basically been in the context of saying enterprise agreements can remove those exclusions which would otherwise apply.

PN393      

VICE PRESIDENT HATCHER:  Yes, but that�s in the context of very specific provisions which apply to redundancy.  I�m not sure how that applies itself to this situation.

PN394      

MR CRAWFORD:  Well I think it�s the argument that I think the NFF are making, that basically the NES, they say, has rights to employers and employees.  We say that�s not the case.  The NES is a statutory minimum standard and awards and agreements can supplement that minimum standard by basically providing more beneficial conditions for employees.  It�s not all that complicated and we just say that is exactly what these provisions are doing.  Under the NES the employer would be entitled to not recognise previous service.  The effect of the award provisions is that an employee is guaranteed the benefit of having their previous service recognised by the new employer.  So we say that�s an additional benefit.

PN395      

SENIOR DEPUTY PRESIDENT HAMBERGER:  What do you put to the argument that in some situations the employee would actually prefer to have their leave cashed out when they change jobs?

PN396      

MR CRAWFORD:  Well, I mean it�s difficult, because obviously - and this isn�t a criticism, but there�s no evidence to that effect.

PN397      

SENIOR DEPUTY PRESIDENT HAMBERGER:  Well, it does seem to be true in some circumstances.

PN398      

MR CRAWFORD:  My response is the employee is not disadvantaged, they are basically in the same situation that they were prior to the transfer of business.  Prior to the transfer they had accrued so many hours of annual leave.  With the effect of the award provisions after the transfer, they still have those hours.  We say there is no disadvantage there, they�re not losing out.  Unless there�s any other questions.

PN399      

VICE PRESIDENT HATCHER:  Right, thank you, Mr Crawford.  Ms Carr.

PN400      

MS CARR:  Thank you, your Honours and Commissioners.  Firstly, dealing with the draft determinations, there are three determinations that have been issued in relation to awards the TWU is interested in and that�s the Road Transport and Distribution Award, Transport Cash and Transit Award and also the Waste Management Award.  The TWU has, in correspondence to the Commission, indicated that we support those proposed determinations, so I have no further submissions to be made in relation to those.

PN401      

Moving on to the category 5.  We have made a number of submissions in relation to inconsistencies.  There were those that the Fair Work Ombudsman had identified and we agreed with.  There are also additional inconsistencies that we identified in relation to redundancy.  Initially, in our original submission, I think it was 22 November, since that time on 23 January and also further correspondence on 23 February, we have indicated that we don�t press those as submissions and that there is no inconsistency with those provisions, so originally we had indicated there was an inconsistency with 120.  We�ve now considered that and probably a not very well thought out submission at the time, but we withdraw those, your Honours and Commissioners, and given that there are no parties that agree there�s an inconsistency, then we propose that they be withdrawn from category 5.

PN402      

THE PRESIDENT:  What awards are they?

PN403      

MS CARR:  They were in relation to - there were various awards and if I can take you to the correspondence -the submissions on 22 November, they are in relation to the Waste Management Award, the Road Transport Long Distance Operations Award, Passenger Vehicle Transportation Award, Airline Operations Ground Staff Award and Transport - [indistinct] Award.  Essentially all the awards that the TWU has an interest in, had provisions in relation to transfer to lower paid duties by reason of redundancy.

PN404      

Turning to the only other issue that we have in relation to the NES relates to annual leave in advance.  Much has been said today.  Well, probably all that needs to be said today has been said in relation to that issue.  We support and adopt the submissions made by the AMWU which have been filed and said today and also in relation to those submissions that have been filed by ALAEA.

PN405      

In the AMWU's submissions, they propose an alternative clause to remedy the issue.  I note that ABI also submitted that the provision was inconsistent with the NES and propose that it be deleted in its entirety.  However, they have said that if the Commission's minded to insert, or change that clause, then they support that proposed by the AMWU.  We also note that ALAEA - - -

PN406      

THE VICE PRESIDENT:  You support the AMWU proposal?

PN407      

MS CARR:  Yes, we do.  We also note that ALAEA have also proposed some wording changes to the current clauses, that's 34.2 and 34.3.  They really have the same practical effect as that proposed by the AMWU, so whilst they do have a similar effect or the same effect, we still support that proposed by the AMWU. Unless, there's anything further, that's all I have to say.

PN408      

THE PRESIDENT:  Thank you, Ms Carr.

PN409      

MS CARR:  Thank you.

PN410      

THE PRESIDENT:  Mr Norris.

PN411      

MR NORRIS:  Thank you.  Your Honour, I'll be very brief.  Your Honour, the ALAEA has lodged a submission in this matter and if I could just go to paragraph 23 of that submission on page 5 of 6.  I omitted in the last sentence the words "after clause" - I omitted the words inadvertently of "37 public holidays".  So just for the sake of completeness, if you could take those - - -

PN412      

COMMISSIONER BISSETT:  Sorry, which paragraph?

PN413      

THE PRESIDENT:  I was just going to say, what paragraph?

PN414      

MR NORRIS:  It's paragraph 23 on page 5 of 6.  It's at the bottom of the page in italics, it says - the words say, "Leave will not accrue which amount will not include any sums paid for any of the holidays prescribed by clause" and it should say, "37 public holidays".

PN415      

COMMISSIONER BISSETT:  Not 37 public holidays, but yes.

PN416      

MR NORRIS:  Yes.

PN417      

COMMISSIONER BISSETT:  There's 37 dash.

PN418      

MR NORRIS:  Yes, sorry about that.  Just in regard to the - it probably has no practical effect, but I think, can I just say briefly that we oppose the submission by AEG to delete the clause. We say that the clause 34 does supplement the NES and that it does give employees an entitlement that is above the NES standard.

PN419      

Historically, in the GA Award, the period of service prior to the NES was based on 12 months service and your annual leave being granted after 12 months service.  With the NES being implemented on a pro rata basis, the impact of clause 34.2 was overlooked, we say, as an administrative error and wasn't written in the context of the change in the NES at the time the award was made and was missed by most parties.

PN420      

We also say that in looking at the words of - just in their bare meanings, sometimes overlooks the practical circumstances on which these clauses are supposed to apply on a practical workplace basis.  Taking leave in advance, it's notorious in the industry that such granting of leave by an employer, and it is discretionary, is usually for a pressing domestic need, a family responsibility or an extension of bereavement leave or in circumstances where sick leave runs out.  And if the employer is sympathetic and compassionate, would grant that leave in advance to assist the employee maintain their employment.

PN421      

The anomaly then for an employee who has those circumstances repeat and hasn't accrued leave, that they be denied then that opportunity to meet that pressing domestic need or family responsibility by the use of leave in advance.  We say that the intention of the NES in pro rata‑ing in the first instance, was designed to enable an access to employees use leave in a flexible manner that can cater for those other circumstances.

PN422      

Even though, in the NES's provision for personal and carer's leave and there's also provision for bereavement leave, sometimes in the death in a family, an employee may be appointed as the executor of an estate for that matter and it would take a week or so to sort these things out.  Two or three days of bereavement leave doesn't meet that.  So leave in advance, looking at it in practical circumstances, in particular in keeping that sort of clause in as an additional entitlement is very important to employees.

PN423      

I think there was a submission made by ABI in regards to transmission of business and I think the Airline Operations Ground Staff Award was mentioned, but I can't see any transmission of business provisions in the Airline Ground Staff Award, so I won't make any comment on that submission.  Thank you, your Honour.

PN424      

THE PRESIDENT:  Right, thank you.  All right, turning to Melbourne, Ms Patena, is it?

PN425      

MS PATENA:  Yes, if the Commission pleases, Patena, initial R for the SGA.  Your Honours, Commissioners, is it suitable - - -

PN426      

THE PRESIDENT:  If it's easier to remain seated, please do so.  In fact, it's probably easier, I think.

PN427      

MS PATENA:  Thank you.  I will speak briefly in relation to our submissions made by 16 January and 20 February.  I'm addressing the alleged inconsistencies identified by the Fair Work Ombudsman relating to the NES and the compassionate leave entitlement for casual employees, as prescribed in clause 34.2B of the Hair and Beauty Award.  And reply to the submissions made today by the ABI and the New South Wales Business Chamber, represented by Mr Izzo.

PN428      

For ease of reference, I'll again note the current clause 34.2B reads as:

PN429      

Such leave is unpaid.  A minimum of 48 hours absence is allowed by right with additional absence by agreement.

PN430      

<i> </i>

PN431      

Firstly, I'd like to note that 34.2B, reading the full context of 32.4 relates only to unpaid carer's leave, not unpaid compassionate leave.  It appears that following the research document have identified inconsistencies in relation to unpaid compassionate leave only, which is not actually prescribed in clause 34.2B.

PN432      

The SDA submits that the Hair and Beauty Award should prescribe entitlements to both unpaid leave types, which would be consistent with the heading of the clause 34 "Personal Carers and compassionate leave".  We note that the submissions of the NRA, representing the Hair and Beauty Industry Association, the ABI and the New South Wales Business Chamber and the AWU all support the view that the clause 34.2B should be revised to address the inconsistencies with the NES in relation to casual employees and entitlements to these leave types.

PN433      

We agree with the first identification of the inconsistency with clause 34.2B to the extent that the use of the phrase, "A minimum of 48 hours" in the clause is not consistent with the NES.  The NES is, per sections 102 and 104, expresses the quantum of the entitlement to unpaid leave in days, not hours.  That is, two days of unpaid carer's leave and two days of compassionate leave.  The note under section 106 states compassionate leave is unpaid for casuals.

PN434      

We also note the ombudsman's concern with the phrase, "Allowed by right" and as outlined in our submissions, the SDA have no objections to this phrase being retained as it is.  The phrase, "Allowed by right", is an expression of entitlement and in this case, to unpaid carer's leave, which cannot be interpreted as leave which is granted at the discretion of the employer and consistent with the NES.

PN435      

In response to the submissions made by the ABI and the New South Wales Business Chamber, we do not support the view that clause 34.2B is contrary to subsection 105(2)(c) which prescribes how a casual employee may take periods of unpaid compassionate leave.  Clause 34.2B in its current form, doesn't provide any prescriptions as to how an employee may take unpaid compassionate leave or unpaid carer's leave, but states the quantum of leave a casual employee is entitled to access which is in accordance with, and not contrary to sections 102 and 104 of the Act.

PN436      

In response to the ABI and the New South Wales Business Chamber this morning, represented by Mr Izzo, we'll just note that the comments in relation to personal leave in the title and the SDA draft clause weren't raised in their submissions, they were raised at the Bar table today and we therefore haven't had time to properly consider a response in our submissions.  But we agree the NES does not provide an entitlement to personal leave for casuals.

PN437      

The term "Personal/Carer's Leave", sometimes they are used interchangeably, but noting the issue and potential inconsistencies, we're happy for the Commission to consider the revision of our draft wording, which we've proposed in our submission on 20 February.  And this is also on the basis that we understand the Hair and Beauty Industry Association, represented by the NRA are happy to support (indistinct) the word "Personal" and leave the rest of the clause as is.

PN438      

And in further response, the SDA is not seeking to change the nature of the entitlement for casuals seeking to remedy - we're just simply seeking to remedy the inconsistency identified and clarify casual employees' entitlements to both unpaid carer's leave and unpaid compassionate leave.

PN439      

In the submissions of the ABI and New South Wales Business Chamber on 29 September, note the wording of the clause at 34.2B is problematic.  It should be revised to make it clear that casual employees are entitled to take up to two days paid carer's leave or unpaid compassionate leave and that such further unpaid leave may be provided by agreement with the employer.  And in their reply submission of 20 February and today, they've respectively disagreed with the SDA's proposed wording to address the inconsistency and clause 34.2B and maintain that the clause should be deleted in its entirety.  Or in the alternative, simply state that casual employees are entitled to unpaid carer's leave in accordance with the NES.

PN440      

With due respect to the ABI and the New South Wales Business Chamber, the SDA remains unclear as to what remedy they're proposing in order to address the inconsistencies identified by the Fair Work Ombudsman and other parties in relation to both unpaid carer's leave and unpaid compassionate leave.  As we understand it, there is a proposal to delete 34.2 or 34.2B with a referral to the NES in relation to casual employees' entitlement to unpaid carer's leave only and for the award to remain silent on unpaid compassionate leave.

PN441      

The SDA strongly maintains it's not advantageous for employees or employers, under the Hair and Beauty Award, if the clause either 34.2 or just 34.2B is deleted entirely. We also submit the clause should include reference to both unpaid compassionate leave and unpaid carer's leave, not one or the other.  As we've stated in our submissions, the wording proposed for clause 34.2 by the SDA on 20 February addresses any inconsistencies with a clear, simple and easily accessible outline of casual employees' entitlements to both unpaid leave types and employer obligations under the Hair and Beauty Award, without the need to refer to another instrument, which is consistent with the Modern Award objective, section 134G:

PN442      

Ensuring a simple, easy to understand, stable Modern Award system and is allowable under sections 55.2A and sections 55.4, ancillary and supplementary terms may be included.

PN443      

Again, we note the SDA, being the primary party to this process, representing the employees in the Hair and Beauty Industry, together with the primary employer representative of the Hair and Beauty Industry Association, represented here today by the NRA, have reached agreement on the proposed wording which is contained in both of our submissions noting that a possible amendment to that, relating to the issues raised today.

PN444      

The SDA does acknowledge the primary concern of the ABI and the New South Wales Business Chamber in relation to our proposed drafting, as stated in the reply submission on 20 February, that it does not accurately reflect sections 103(2) and 105(2) of the Act.  (g) the proposed SDA drafting provides that two days' absence is allowed by right however the NES provisions are now up to two days' leave, to be taken in a variety of ways such as a single instance of two days' leave, two periods of one day each or any other separate periods as agreed between the employer and the employee.

PN445      

And while we respect the concerns raised by the ABI and the New South Wales Business Chamber, the SDA is of the view that our proposed clause 34.2, specifically 34.2C, does not attempt to summarise the NES in relation to how the leave can be taken, as per sections 103(2) and sections 105(2), but it does accurately and correctly express the quantum of unpaid carer's leave and unpaid compassionate leave that a casual employee is entitled to take under this award, which is not in conflict with the NES.

PN446      

However, in order to address the ABI and New South Wales Business Chamber concerns, we suggest that sections 103(2) and 105(2) can be incorporated in an annotated version of the award.  We note the recent decision of the Commission on 23 December and the SDA supports the approach the Commission has proposed to take.  We advocate a cautious and consultative approach to the drafting of the annotated versions of the Modern Award and would seek to be a party to this process for the Hair and Beauty Award.  If the Commission pleases, I have nothing further.

PN447      

THE PRESIDENT:  Right, thank you.  Ms Wiles?

PN448      

MS MOUSSA:  Your Honour, if I may, I might provide some oral submissions before Ms Wiles, because we will be considering the same issue, but Ms Wiles has asked if I can go first, if that's okay.

PN449      

THE PRESIDENT:  So that's Ms Moussa, is it?

PN450      

MS MOUSSA:  It is.

PN451      

THE PRESIDENT:  Yes, all right.

PN452      

MS MOUSSA:  I appear on behalf of the AMWU Vehicle Division in relation to the Vehicle Manufacturing Repair, Service and Retail Award and the draft determination published by the Commission in respect of the inconsistency identified in relation to the Shift Worker leave accrual provision.  So we've purposely filed submissions in respect of this inconsistency on 29 September, 16 October 2014, 21 November 2014 and more recently, 13 February of this year and we continue to rely on those submissions.

PN453      

In our submission of 13 February, we supported the terms of the draft determination that was published by the Commission to remedy the inconsistency identified between clause 29.5B of our award and section 87.2 of the Act.  We support the submissions made by the AMWU today about the position that the lateness of filing of the AIG's submissions, as put our union.  While we are in a position to respond today to those submissions of the AIG, I would ask if it would be okay if we reserved our position to make further written submissions after today, as the opportunity was afforded to the AMWU and AIG - - -

PN454      

THE PRESIDENT:  Well, we've already granted leave to the AMWU to make further submissions in seven days' time, so I don't think it's necessary for you to ask again.

PN455      

MS MOUSSA:  Okay.  Thank you, your Honour.  So I might then just step through what our response is to the AIG's submissions, and while the AIG submissions focus on the relevant clause in the Manufacturing Award, the terms of the draft determination apply in the same vein to the Vehicle Award.  And so we say the issues raised by them are similarly experienced in our award.

PN456      

For the reasons we've advanced in our submissions dated 21 November, we submit the position of the AIG to simply delete the Shift Worker leave provision from the award is not an appropriate course which should be adopted by the Commission to address the inconsistency that has been identified.  These provisions contain a long and legitimate - a longstanding and legitimate safety net entitlement that continues to be part of the minimum safety net for many employees.

PN457      

I might just quickly address the submissions that Mr Fergusson made today about the relevance of including in our submissions of 21 November, case law which illustrated how the provision was inserted into Modern Awards.  While we acknowledge that we are in a different time, the relevance of those decisions is not simply dismissed because of the amount of time that's elapsed between where we are today and when those decisions were published.  Those decisions provide context and demonstrate that the entitlement is still a relevant entitlement and has work to do.

PN458      

The cases show the purpose of the entitlement and why it was included and the effects that will be bestowed upon employees if the AIG submission is adopted by the Commission.  The disadvantage to shift workers who don't work regularly for the purposes of the clause, still exists for those workers and so, we disagree with the position that the AIG has put today about the relevance of those cases does demonstrate the importance of maintaining the award entitlement.

PN459      

Just going now to the AIG submissions of 19 February.  In their submissions at paragraphs 16 to 21, they raise the concern that the draft determination that was published by the Commission expands the current entitlement by deleting the offending terms present in the clause and thereby enabling access to the entitlement for those shift workers who, on a strict interpretation of the award, would not have been entitled to the accrual rate.  With respect, our position is that that submission is not correct.

PN460      

As they pointed out in their submissions at paragraph 23, it's uncontroversial that the annual leave did not accrue progressively under pre Modern Awards as it does now under section 87.2 of the Act.  But with this in mind, it's clear that but for that method of accrual which is set out in the pre Modern Award clauses, this entitlement was always intended to apply to all shift worker employees that worked part of the 12 month period as a seven shift worker under a Modern Award.

PN461      

With the advent of progressive accrual - - -

PN462      

THE PRESIDENT:  Sorry, can I just stop you?  So just to ask you a question about that submission, do you mean by that that any shift worker who works a part of a seven day shift work roster is entitled to pro rata additional annual leave for the period they worked on that roster.  Is that the effect of what you just said?

PN463      

MS MOUSSA:  That's correct, your Honour.

PN464      

THE PRESIDENT:  Yes.

PN465      

MS MOUSSA:  Obviously, with the advent of progressive accrual, those words which provide for the 12 month prerequisite length of service are no longer required.  And so in any event the determination, we say, addresses this issue.  But if an employee claims in today's day and age, entitlement to the higher rate of accrual and pursued the matter through the courts, one would think that the courts would read the provision to the extent that it's consistent with the Act and so would actually bestow this entitlement on an employee, even if they'd performed less than 12 month's service with an employer.

PN466      

So in light of those facts and those considerations we don't think that the submission that there would now be a windfall gain to those employees, because of the removal of the 12 months' continuous service part of the clause by the Commission, has any legs, and therefore should be rejected.

PN467      

In respect of the AIG submission that the provision is no longer relevant, and they make that submission at paragraphs 22 and 25 of their submissions, again we submit that that argument should be rejected by the Commission.  In our submissions of 21 November and in the AMWU submissions that were made here today Ms Taylor, our submissions make it clear that this is, and remains a relevant entitlement.  It was provision that was deliberately inserted into awards to provide those shift workers, who would not be covered by the definition of regular shift worker, with a pro rata entitlement for working unsociable hours for part of 12 month period.

PN468      

And obviously, if you're a regular shift worker, you're able to make accommodations and set up a life(?) so that you were able to regularly work on Sundays and public holidays.  But for those employees who only work part of a 12 month period as a seven day shift worker, the upheaval, we say, is much more obtuse and therefore that's why the pro rata entitlement was inserted into the awards.

PN469      

So I would refer the Full Bench to the AMWU Vehicle Division submissions of 21 November and specifically paragraphs 10 to 21 of those submissions where our argument is made out in full.  So contrary to the assertion of the AIG, the clause continues to serve a purpose in Modern Awards.  It is a permitted term, for the purposes of section 136 of the Act and it's a term that supplements the relevant NES provisions by providing for a higher accrual rate of annual leave than is provided for by the NES.

PN470      

So for these reasons, we say that the submissions of the AIG that the clause is no longer relevant, should be rejected.

PN471      

In respect of the AIG submission that there's an ongoing inconsistency between the draft determination and the NES, we don't agree with that submission.  The clause or the draft determination that's been published does not provide for the method of accrual of annual leave.  It simply prescribes the rate of annual leave that is to be paid to shift workers that work part of a 12 month period as a seven day shift worker.

PN472      

As stated by the AMWU, neither clause provides for a method of accrual to be anything other than progressive, as required by section 82(2) of the Act.  Subclause (c) or paragraph (c) of the draft determination simply makes it clear that the accrual rate expressed in paragraph (b) accrues at the same rate where periods of less than a month are worked.  And this also takes into consideration scenarios where employees may, for example, work a six week period as a seven day shift worker.  In that event, paragraph (c) will come into play to provide that they get the pro rata amount of annual leave for that two week period that they worked as a seven day shift worker. So that's where paragraph (c) has work to do.

PN473      

However, if the Commission were to accept the submission of the AIG in this respect, we submit that the matter can simply be addressed by way of redrafting of the clause.  It would not be appropriate to simply adopt a course where the clause is deleted from the award, for the reasons that I've previously mentioned.

PN474      

At paragraphs 27 to 28 of the AIG submissions, they submit that the appropriate remedy in this case would be to delete the provision and leave the accrual rate to the NES.  Again, this submission must be rejected.  As I've mentioned, this term is a permitted term for the purposes of section 136 of the Act and supplements the NES in accordance with, or as permitted by section 55(4) of the Act.

PN475      

The Commission's amendment to the clause, which is reflected in the draft determination, does not undermine the integrity of the provision, it simply addresses the issue of inconsistency between sections 87(2) and the relevant award provision.

PN476      

I might also take this opportunity to address Business South Australia or Business SA's submission in respect to the draft determination.  Paragraph (c) of the draft determination, we say does not extend the entitlement to employees who were not previously entitled to the entitlement.  It simply makes it clear that those who work part of a month, accrue the entitlement at the same rates as those - as prescribed by paragraph (b).

PN477      

Business SA's view that an employee must regularly work public holidays and Sundays in order to be eligible for the additional leave is incorrect, for the reasons I've previously mentioned, which is that the intent of the provision was to provide an entitlement to those employees who didn't fall within the definition of a regular seven day shift worker.  And for their argument to make sense, you would need to delete the entire clause.  That is, you would have to delete paragraph (b) as well, and this is a submission we cannot accept.

PN478      

Just briefly addressing the Modern Awards objective, because that's something that the AIG have addressed in their submissions, we submit that the terms of the draft determination published by the Commission only include terms to the extent that's necessary to achieve the Modern Awards objective.  A cogent reason for the variation is to address the inconsistency between the provision and the Act and ensure that awards continue to meet the Modern Awards objective.  We think that the variation that's been submitted by the Commission in this case does do just that and it goes no further than addressing this issue.

PN479      

In terms of being fair and relevant, the AIG assert that the term is no longer a relevant term and should therefore be deleted from the Modern Award.  To adopt the course proposed by the AIG, I think I've said already, would strip away Modern Award entitlements that have been present in Modern Awards since at least 1935, as Ms Taylor pointed out today and certainly in the Vehicle Awards since at least 1943.  And that's not the purpose of these proceedings.

PN480      

We need to keep in mind that if there wasn't any inconsistency present in this provision and the ombudsman hadn't alerted everybody's attention to this very fact, then we may not be here today discussing this provision.  So I think that's something that certainly needs to be kept in the minds of the Commission when they're considering the parties' submissions in respect to this issue.

PN481      

We also note that in the preliminary jurisdictional issue decision of the Full Bench of 17 March of last year, the Full Bench noted that the Commission would proceed on the basis that, prima facie, the award being reviewed achieved the Modern Awards objective at the time it was made.  In light of this fact, the Commission cannot accept the argument that the Modern Awards objective is now not being met all of a sudden, because of the presence of a clause which, at the time of award modernisation, was contained in an award which was held to achieve the Modern Awards objective.  For those reasons, we argue that the clause is, and continues to be, a relevant part of the safety net, minimum safety net terms and conditions.

PN482      

We further submit that the draft determination proposed by the Commission meets the Modern Awards objective taking into account the criteria found in section 134(1) of the Act. The draft determination addresses the need to ensure a simple and easy to understand Modern Award system.  By removing the inconsistency identified with the NES, the determination will ensure that the award is simple and easy to understand.  We disagree with the submission - - -

PN483      

THE PRESIDENT:  Sorry, Ms Moussa, do you have much further to go?

PN484      

MS MOUSSA:  No, Your Honour.

PN485      

THE PRESIDENT:  Well, I don't want to stop you, I just note the time, that's all.  Before we go on, how much longer do the other parties need to make submissions for?  I don't want to put any pressure on anybody, but I just note the time.

PN486      

MS WILES:  Your Honour, it's Ms Wiles here for the (indistinct).  I estimate I would be between 10 to 15 minutes.

PN487      

THE PRESIDENT:  All right.  Well, we'll just adjourn till - - -

PN488      

MR NORRIS:  Your Honour, from the NRA's point of view or the ABI's point of view, probably only 5 minutes.

PN489      

THE PRESIDENT:  Well, it's starting to add up.  I see there's some desire for reply lurking back here in Sydney.  All right, I think we'll adjourn now for lunch and resume at 2.15, but can I indicate that any party that either doesn't want to make any further submission or doesn't want to listen to any other submissions be excused from further attendance.

LUNCHEON ADJOURNMENT���������������������������������������������������������� [1.02 PM]

RESUMED���������������������������������������������������������������������������������������������� [2.19 PM]

PN490      

VICE PRESIDENT HATCHER:  Ms Moussa.

PN491      

MS MOUSSA:  Thank you, your Honour.  When we left proceedings, I was just going through how we say the draft determination does meet the modern awards objective, specifically in respect of section 134(1) of the Act.  I was talking about how the draft determination addresses the criteria; namely, that it makes the award simple and easy to understand.

PN492      

The AIG made a submission that keeping the clause would actually do the opposite because it would create more confusion for employers, for them to work out what rate of accrual applies to a particular employee.  We would argue that the existence of different accrual rates that lawfully supplement the NES does not in and of itself mean that the modern award would become difficult to understand or apply.  Only those employees who meet the requirements of the provisions would be entitled to it and, in that sense, it's limited to a specific group of employees.

PN493      

Furthermore, we say the draft determination addresses the criteria to properly provide additional remuneration for those employees working on a weekend and public holidays pursuant to section 134(d)(a) - (3)(i), sorry, of the Act, by amending the provision in the terms proposed.  Obviously for those who are engaged for only part of a 12‑month period, the additional remuneration provided in that clause properly contemplates for the disrupted lifestyle that they would have to lead over that period of time and, if the provision were to be deleted, then this would undermine their safety net of entitlements, so the clause properly remunerates these employees for working irregular shift work.

PN494      

We also would argue that the draft determination is likely to have little impact on business, including productivity and employment costs.  Contrary to what the AIG have argued, the entitlement has been around for many years and shift workers have remained entitled to the higher accrual rate even under the current terms of the provision.  We, therefore, would reject the claim that the proposed determination would result in increasing burden on employers.

PN495      

On the contrary, we would say that making the provision clearer might lead to the improved productivity of employees because they would be confident that they're actually entitled to the higher rate of accrual.  That brings an end to my submissions, your Honour, unless there are any further questions from the bench.

PN496      

VICE PRESIDENT HATCHER:  No, thank you, Ms Moussa.  Ms Wiles, is it convenient for you to go now?

PN497      

MS WILES:  It is, your Honour.  Thank you.  The TCFUA appears in relation to the Dry Cleaning and Laundry Industry Award.  In its decision on 23 December 2014, the full bench found that an NES inconsistency existed in clause 25.3 of the Dry Cleaning Award in relation to the accrual of annual leave for shift workers.

PN498      

In this matter, the TCFUA continues to rely on its previous written submissions.  They were made on 26 September 2014; a submission in response on 15 October 2014; a further submission in response on 20 November 2014; and more recently the submission in response to the draft determination, and that was made on 13 February 2015.  The TCFUA also supports the oral submissions made by the AMWU and the AMWU Vehicle Division made today.

PN499      

The short oral submissions that we'll make today essentially address two sets of issues.  One relates to the specific elements of the draft determination for the Dry Cleaning Award and the second set relates to the submissions made by the Australian Industry Group in its submission of 19 February.

PN500      

Firstly, just going to the draft determination for the Dry Cleaning and Laundry Industry Award, in our submissions of 13 February, we confirmed in‑principle support for the terms of the draft determination, but, however, subject to one technical issue being addressed.  The effect of the draft determination is that an additional subsection (c) would be included in clause 25.3.  Currently there is a clause 25.39(c) in the Dry Cleaning Award and so, therefore, this provision would need to be renumbered as clause 25.3(d).  This is essentially just a consequential variation in order to reflect the current terms of the award.

PN501      

Moving to the AI Group's submission of 19 February.  Similar to the AMWU, we also seek to reserve our position to file written submissions in response, but we are able to deal with some of the matters raised by the AI Group today.  The AI Group have essentially sought to re‑agitate - albeit in greater detail - the principal position which was advanced last year such that the shift worker clauses in the awards should be deleted in their entirety other than retaining any element that defines a shift worker for the purposes of section 87(1)(b).

PN502      

That is, they're seeking that this full bench accede to their proposal to remove current long‑standing entitlements for shift workers from the award safety net in multiple awards.  In our view, this is a substantive claim of the AIG which has already been prosecuted and rejected.  However, they advance it again on the basis of no evidence and no cogent arguments in support.

PN503      

Your Honours and Commissioner, your decision of 23 December 2014 made plain what this process is about.  It's directed squarely to the identification of whether an alleged inconsistency exists in a particular award or awards and, if such an inconsistency exists, to remedy that inconsistency.  In our submission, the draft determinations issued by the commission are consistent with this principle and are an appropriate remedy to the inconsistencies identified by the full bench in relation to the shift worker clauses.

PN504      

In our respectful submission, this process should not be used as an opportunity to seek to strip away substantive entitlements from low paid award‑dependent workers.  There is nothing contained in the AIG's most recent submission which should persuade you that the AIG's proposition should now be entertained.  The AI Group in its submission, concede at paragraph 12 that the current shift worker clauses in the affected awards provide a shift worker with -

PN505      

a greater entitlement to annual leave than what is prescribed by the NES.

PN506      

The AIG calculate that the enhanced benefit equates to approximately one day of annual leave per year in addition.  The TCFUA has previously submitted, in our 15 October 2014 submission, that on our calculation for a shift worker working a 7.6‑hour day with an average 38‑hour week, the additional benefit equates to an additional 0.627 hours of annual leave per month over and above the NES entitlement.  We agree that over a 12‑month period, that would equate to approximately a day's additional annual leave.

PN507      

In today's submissions, the AIG said that under their proposal the shift worker entitlement "won't be as generous."  We say this is a throw‑away dismissal of an important award entitlement.  An additional day's annual leave is not an insignificant benefit for an award‑dependent shift worker working unsociable hours, including on weekends and on public holidays.  We emphasise that this is an existing condition in multiple awards which have applied since modern awards were made and in many cases applied in relevant pre‑modern awards.

PN508      

Dealing with some of the specific arguments that AIG advance, they contend that the proposed clause expands entitlements without justification.  We support the AMWU's submissions in this respect, but we also confirm that from our perspective there is no such expansion of an existing entitlement.  This has effectively been the legal position since the commencement of modern awards on 1/1/2010.  Consequently, the proposed clause provides no windfall for employees with less than 12 months' employment.

PN509      

Another argument that AIG advance is that the proposed variation is no longer relevant.  They say it's no longer relevant because annual leave used to accrue in pre‑modern awards based on length of service.  The annual leave now accrues progressively under the NES, that the rate of accrual is now prescribed by statute and that the clauses are no longer part of the relevant safety net.  In our submission, these contentions are both confusing and misconceived.

PN510      

The entitlement to a greater quantum of annual leave for a shift worker under an award is a separate stand‑alone entitlement to the method of accrual.  Section 53(3) of the Fair Work Act expressly contemplates, provides for and facilitates modern awards including terms which supplement the NES.  Supplementary terms include terms that increase the amount of paid annual leave to which an employee is entitled beyond that provided for in section 87.  That example is found in note 2 to section 53(2).

PN511      

Other union parties have taken you to relevant provisions in the preliminary issues decision for the 2014 award.  At paragraph 28 of that decision, the bench found:

PN512      

In the review the commission will proceed on the basis that prima facie the modern award being reviewed achieved the modern awards objective at the time that it was made.

PN513      

At paragraph 27:

PN514      

Previous full bench decisions should generally be followed in the absence of cogent reasons for not doing so.

PN515      

The AI Group have not provided any submissions or evidence which would warrant a departure from the earlier decisions of the AIRC, who determined that the shift worker provision was necessary for the inclusion in the Dry Cleaning and Laundry Industry Award.  A third argument which the AIG advance is that the accrual of annual leave should be left to the NES.  We say that this contention is no more than an assertion or a desire by the AIG.  The contention is unsustainable for the reasons we've outlined earlier.  The legislation expressly contemplates any supplementation, including in relation to the quantum of annual leave.

PN516      

A fourth argument which AIG advance is that there is a lack of cogent reasons why the variation proposed is necessary.  The variations proposed in the draft determinations are limited to the objective of remedying an inconsistency.  Contrary to the submission made by the AIG, the cogent reason for the variation is the removal of the inconsistency.

PN517      

In that context, the proposed variation is necessary in context to section 138.  The union's representatives in relation to the affected awards have not sought a substantive variation.  They have simply responded to an identified inconsistency and supported a confined variation which remedies that inconsistency.

PN518      

Going now to the modern award's objective, the AI Group's submissions on what is a fair and relevant safety net and the modern award objectives are silent on a number of salient considerations in section 134(1), including 134(1)(a):

PN519      

Relative living standards and the needs of the low paid ‑

PN520      

and section 134(1)(d), which is:

PN521      

The need to provide additional remuneration for employees working unsociable, irregular or unpredictable hours or employees working on weekends or public holidays or employees working shifts.

PN522      

We can only assume that the AI Group have not addressed these considerations in their submissions, because it doesn't assist their arguments.  In our submission, shift workers in the laundry industry are low paid.  By definition, a shift worker in this industry does work unsociable, irregular or unpredictable hours, are required to work on weekends and public holidays, and work shifts.

PN523      

The AI Group assert that the clause is not relevant given the progressive accrual of annual leave under section 87(2).  As outlined earlier, the clause in question provides a modest, more beneficial entitlement over the NES.  It remains a relevant entitlement, as shift workers do work unsociable hours, et cetera.  The half‑day annual leave per month entitlement is relatively small compensation for being required to work these shift arrangements.

PN524      

The AIG also argue in relation to the consideration in section 134(1)(b), which is "the need to encourage collective bargaining."  The best that the AI Group can assert in relation to this consideration is that the deletion of the clause may encourage parties to engage in collective bargaining that specifically deals with the rate of accrual for shift workers.  It is an assertion without any cogent argument and should be considered as no higher than that.

PN525      

In relation to the consideration in section 134(1)(f) - and this is:

PN526      

the likely impact ... on business, including on productivity, employment costs and the regulatory burden.

PN527      

As submitted previously, we reject the AIG's contention that the proposed clause would result in an expansion of current entitlements regarding shift workers.  The regulatory obligations for an employer in dealing with possible different rates of accrual between shift workers and non‑shift workers will be no different than it has been since the modern awards were made.

PN528      

The AI Group argue that there should be greater uniformity of employee entitlements relating to annual leave at the safety net level.  This is simply a wish list from AIG with no supporting arguments as to why this should be the case.  They refer to an example that:

PN529      

There would be a reduced need to apply different standards to award‑covered employees versus award‑free employees.

PN530      

This contention is theoretical only.  It is difficult to identify which non‑award employees would meet the definition of shift worker for the NES.  Who would be these workers in the laundry industry?  For the reasons that we've outlined today, we respectfully request that the full bench reject the submissions of AIG and proceed to make the final variation for the Dry Cleaning Award in the same terms as the draft determination, subject to the consequential variation that I outlined earlier being addressed.

PN531      

In relation to the submissions made by Business South Australia, we reject their submissions on the same basis as the submissions made by the AMWU and the AMWU Vehicles earlier today, if the commission pleases.

PN532      

VICE PRESIDENT HATCHER:  Thank you.  Mr Elliffe?

PN533      

MR ELLIFFE:  As mentioned earlier, the National Retail Association is acting for the Hair and Beauty Industry Association today.  We rely on the submissions lodged on 20 February - the submissions in reply, I should say.  With regard to some of the points made today, we'd make a few points.  Specifically we refer to the concerns raised by ABI and the New South Wales Business Chamber, as referred to by the SDA, as well, and those concerns relate to the inclusion of the word "personal" in the proposed draft clause.

PN534      

The concerns of ABI seem to be that this could introduce an entitlement to personal leave for casual employees.  As mentioned by the SDA earlier, we would be open to a variation of that draft that we've put forward, if the commission was agreeable to that.  Put simply, that issue could be resolved by removing the word "personal" from the clause.  We believe that that, along with the substantive wording of the clause, would address the issues identified with the clause.

PN535      

Alternatively, we would note that should the commission agree with the proposition that the clause on the whole is problematic, we would actually support the submissions of ABI once again in regard to removing clause 23.2 altogether.  In our submission, that would actually achieve the same outcome and in fact it would mean the clause simply referred to the NES.  Unless the commission has any questions for us, those are our submissions.

PN536      

VICE PRESIDENT HATCHER:  Thank you.  That finishes Melbourne.  Adelaide, Mr Wallgren.

PN537      

MR WALLGREN:  Thank you, your Honour.  I appear for the South Australian Wine Industry Association in relation to the draft determination to vary the Wine Industry Award to address the inconsistency in relation to additional annual leave for shift workers.  I won't be making any submissions in relation to the other aspect, which is the transfer of business in relation to annual leave.

PN538      

We made a written submission on 13 February 2015 outlining some concerns with the proposed clause 31.2(c).  The relevant clause in the modern award is 31.2, which covers the definition of a shift worker for the purposes of additional annual leave.  That clause is similar to clauses in a number of other awards.  It may even be identical, but we say that in relation to the Wine Industry Award, the wine industry is unique in regard to seven‑day shift work.  The issue is that outside the vintage period, the wine industry employers are not using seven‑day shift work at all.

PN539      

VICE PRESIDENT HATCHER:  Outside the what period?

PN540      

MR WALLGREN:  Outside the vintage period.

PN541      

VICE PRESIDENT HATCHER:  The vintage period.

PN542      

MR WALLGREN:  Which is basically the harvest period, which can run from February to June depending on the region and (indistinct) and so on, and obviously weather patterns.  Seven‑day shift work has not been implemented.  Some employers, during vintage, are utilising seven‑day shift work in order to complete the vintage on time.  Maybe, during that time, seven‑day shift work may be implemented between three weeks and 12 weeks.

PN543      

Overall, seven‑day shift work is not common in the industry and it wouldn't run for more than 12 weeks.  As I mentioned, in some instances it wouldn't run for three weeks.  At the completion of vintage, these workers were then transferred to the regular employment pattern.  It could be five‑day shift work or just day work.

PN544      

The concern we have is that the proposed clause 31.2(c), we say, would result in an expansion of the entitlement to additional annual leave.  We note that the unions, and I think the AMWU, have made submissions that in their view it doesn't matter how long an employee is engaged as seven‑day shift workers.  Even if it is for a very brief period of time, they should be entitled to a proportion of the amount of the additional annual leave.

PN545      

We don't accept that claim.  While the award in clause 31.2(a) sets out what a shift worker is for the purposes of annual leave, it refers to an employee being regularly rostered to work on Sundays and public holidays.  While the award does so, it doesn't actually refer to and doesn't define what "regular" is.

PN546      

We say that there have been decisions in the commission to clarify what "regular" means for the purposes of additional annual leave.  One decision is the 1995 decision by a full bench in the Media Entertainment and Arts Alliance application to vary to the Theatrical Employees (Sydney Convention and Exhibition Centre) Award 1989.  That's Print M7325.  There has also been a more recent decision by Mansfield SC in 2004, in relation to the Australian Municipal, Administrative, Clerical and Services Union - Western Australian Branch v Western Power Corporation, which is PR944613.

PN547      

In those two cases, the commission said that in order to qualify for an additional week of annual leave, a shift worker would be required to work 34 Sunday shifts and six public holidays over a year.  However, both cases say that in some circumstances an employee may be entitled to a proportionate amount of additional annual leave.  They provide examples of that.

PN548      

One example is where an employee solely works shift work, but for whatever reason they transfer to, say, five‑day shift for a limited period of time.  In those circumstances the employee would then be entitled to a portion of the additional week of annual leave.  The commission also held that where an employee usually is not working shift work but for a short period of time is working shift work, in those circumstances the employee would not be entitled to a proportionate amount of annual leave.

PN549      

As I mentioned, in the Wine Industry Award seven‑day shift work is not a common feature.  If it happens, it happens for a brief period of time.  Our interpretation of the current clause in the Wine Industry Award is that an employee who would be engaged to work seven‑day shift work for, for example, three weeks, would not qualify for a portion of the additional annual leave.  However, on the proposed clause 31.2(c), an employee seemingly would do so.  We say that that is an unnecessary expansion of the entitlement in order to address the inconsistency.

PN550      

We accept that there is an inconsistency or may be an inconsistency in the current 31.2(b) because it refers to 12 months' continuous service, but in order to address that inconsistency, we don't believe it's necessary to expand the entitlement to an additional week of annual leave.  We say that that inconsistency can be addressed and properly dealt with through other means.  For example, by eliminating - deleting - the current 31.2(b) so that the award contains a definition only or by simply inserting the commission's proposed 31.2(b) whereby the reference to "continuous service" has been removed.

PN551      

We say that inserting the additional clause (c) will expand the entitlement.  It would mean that a wine industry employer who would engage an employee to work seven‑day shift work for a very short period of time suddenly would be required to provide a proportionate amount of the additional week of annual leave.  That concludes my submission, your Honour.

PN552      

VICE PRESIDENT HATCHER:  Thank you, Mr Wallgren.  Does any party in Sydney wish to reply to any oral submissions that have been made in reply to its own submissions?  I think that's the extent of the reply we'll allow.  Ms Taylor, do you want to - - -

PN553      

MS TAYLOR:  Yes, thank you, your Honour.

PN554      

VICE PRESIDENT HATCHER:  So what are you replying to?

PN555      

MS TAYLOR:  I'm replying to several submissions.  If I could start off with Mr Izzo's proposal in relation to the third option for the leave in advance, which has not been before the commission before today.

PN556      

VICE PRESIDENT HATCHER:  All right, yes.

PN557      

MS TAYLOR:  Mr Izzo had, firstly, provided two options.  The second option was to adopt the AMWU's proposal.  Today, Mr Izzo raised a third option which, as I comprehend it, was to leave the determination of the matters before the commission to the annual leave full bench where the matter has been raised in relation to awards which don't currently have an entitlement for leave in advance.

PN558      

VICE PRESIDENT HATCHER:  I think that was on the basis that his organisation had advanced a standard clause which was not dissimilar to the one which you had proposed, in any event.

PN559      

MS TAYLOR:  Yes, your Honour, but we oppose that proposal.  Firstly, because those proceedings have been advanced and the AMWU hasn't had an opportunity to make any submission in that matter in relation to awards which already do have existing provisions, and there may be some differences which we have not had an opportunity to identify.

PN560      

Secondly, in relation to that proposition, Mr Ferguson in relation to this clause proposes that there be no change to the current provision, which is a different proposition, as I understand it, to the one that the AIG is advancing in the annual leave matter where they say that leave in advance should be available unfettered.  That is, it's unfettered by the requirement that 12 months' service must expire in relation to the leave that has been taken in advance before further leave can be accessed.  We see that those two differences, if I'm correct in that position, create an additional complexity to Mr Izzo's third proposition.

PN561      

Just in relation to the submissions made regarding the transfer of employment clause, Mr Izzo submitted that even if section 55(4) was available to support the award transfer clause, it did not pass the test that it was not detrimental to an employee in any respect.  Mr Izzo based his argument on assuming that some employees may wish to cash out their entitlement.

PN562      

We say that argument is misconceived and that section 91(1) does not provide an entitlement or choice for employees.  It provides no choice for an employee.  It provides an entitlement for an employer to choose or otherwise not to recognise service.  If employees wanted to cash out their entitlements, one would expect the NES cashing out arrangements which are enabled under section 92 and section 93 to have been agitated by employees to their representatives and be included in an award or an agreement.  There is no such cashing out provision in the Manufacturing Award.

PN563      

We say that the term "in any respect" must be related to the NES and that the transfer of employment award provisions do not have any negative impact on the cashing out provisions which are enabled by section 92 and section 93.  An argument that relies on the assumption that employees wished to cash out, can only be tested under section 55(4) against the NES cashing out provisions in sections 92 and 93.  Detriment in any respect can only be measured against an employee entitlement.

PN564      

Turning to the AIG's argument that the AMWU's argument regarding section 93(4) is too broad, the AIG submitted that section 93(4) does not go to accrual or quantum.  Your Honours, Commissioner, we totally agree.  Our argument is limited to the transfer provisions being provisions about the taking of leave.  Without the award transfer provisions, transferring employees would not be able to take leave.

PN565      

Attempts to diminish our argument by interpreting it as providing an avenue to diminish quantum or accrual rates must fail, because that's not what our submission went to.  It was totally in relation to section 93(4) and the transfer provisions enabling an employee to take annual leave, which is exactly the content of 93(4).

PN566      

VICE PRESIDENT HATCHER:  That submissions suggests that any provision about the quantum of the entitlement is about taking it.

PN567      

MS TAYLOR:  No, your Honour.  The quantum provisions and accrual provisions are clearly provided for in other sections of the NES.  Section 93(4) refers to:

PN568      

A modern award or enterprise agreement may include terms otherwise dealing with the taking of paid annual leave.

PN569      

"Otherwise" relates to the matters already raised in 93.  It doesn't relate to the other matters already specified about accrual, which is not about the taking of annual leave, it's about the accrual of annual leave.  There is a distinction.  Ms McKinnon tabled the Woolworths decision in support of the contention that section 51(1) acts independently of section 55(4).  Ms McKinnon referred to paragraph 78 of that decision.

PN570      

I haven't had an opportunity to read the decision in totality, but that paragraph referred to by Ms McKinnon does not in any way go to the interaction or discuss sections 55(2), 55(3), 55(4) and 55(7).  Those provisions certainly relate to the application of section 55(1).  The Woolworths decision does not review relationship of those provisions in the paragraph Ms McKinnon took you to.

PN571      

Those particular provisions are referenced in the Woolworths decision at paragraphs 16 to 18.  They're not reviewed in any great detail, but they are summarised and that summary would support the view that section 55(1) does not operate independently, and we say the decision is not relevant to the current matter.

PN572      

Moving now to additional leave for the continuous shift workers, we note we have been given some additional time to make submissions in relation to that.  Ms Moussa and Ms Wiles have made comprehensive submissions regarding that matter and we may not have more to add.

PN573      

VICE PRESIDENT HATCHER:  It seems to me that the AMWU has now made comprehensive submissions in reply to the AIG.  Whether it was you or Ms Moussa, I think is immaterial.  Do you still need leave to make further submissions in light of her very comprehensive response?

PN574      

MS TAYLOR:  We would like to avail ourselves of the opportunity that the commission has, although I would just add one point now and that's in relation to the question that has appeared as to who subsection (c) applies to.  We say that subsection (b) of the provision identifies that the supplementary accrual provisions apply to an employee who is "continuously engaged as a seven‑day shift worker."

PN575      

We would point out that the AMWU's clause on which the FWC's draft determination appears to be based, did not include the word "continuously" and that the FWC has inserted that requirement which does make the subclause operate in a more effective way.  Subsection (c) applies to those people identified in subclause (b) who are those who are continuously engaged on seven‑day shift work.

PN576      

"Continuous shift work" is defined in the award at clause 36.3(a).  We say, for example, employees engaged for three weeks as a continuous shift worker would be entitled to that entitlement.  That is the existing position at the moment if you look at - - -

PN577      

VICE PRESIDENT HATCHER:  Sorry, is the expression "seven‑day shift worker" defined in the award?

PN578      

MS TAYLOR:  "Continuous shift work" is defined in the award.

PN579      

VICE PRESIDENT HATCHER:  I'm asking you - the expression actually used in the proposed clause "seven‑day shift worker".  Is that expression defined in the award?

PN580      

MS TAYLOR:  Seven-day shift worker is defined in clause (a).

PN581      

VICE PRESIDENT HATCHER:  Of which clause?

PN582      

MS TAYLOR:  41.3(a).

PN583      

VICE PRESIDENT HATCHER:  41.3(a).

PN584      

MS TAYLOR:  The first provision in that particular clause in question and the one that relates to the NES requiring definition in an award:

PN585      

A shift worker is a seven‑day shift worker who is regularly rostered to work on Sundays and public holidays.

PN586      

VICE PRESIDENT HATCHER:  In relation to the proposed - what is that clause number again?

PN587      

MS TAYLOR:  That's 41.3(a), but that is for the purposes of the additional week provided for under the NES.  The purpose of subclause (b) is to provide a supplementary accrual entitlement for those workers engaged in continuous shift work who do not meet the regular test and that's the point that Mr Wallgren - - -

PN588      

VICE PRESIDENT HATCHER:  What do you say about when (b) and (c) use the expression "seven‑day shift worker", and the old clause did, as well.

PN589      

MS TAYLOR:  I say a shift worker is defined for the purposes of the additional week in the NES in 41.3(a).  For the purposes of the additional accrual rate, half a day per month, there is no definition of seven‑day shift worker, but there is the requirement that the employee be continuously engaged on continuous shift work.

PN590      

VICE PRESIDENT HATCHER:  Given it's all in the same clause, why wouldn't you read "seven‑day shift worker" in (b) and (c) in the same way as defined in (a)?  It would be odd if you took a different approach, wouldn't it?

PN591      

MS TAYLOR:  Because since 1937, there has been a recognition that some workers in this industry may not meet the test of "regular".  When you go to the 1937 decision, it's quite interesting, because it actually compares workers in the glass working industry with workers in the manufacturing industry, saying workers in the glass industry stay for a very long time in those positions, so will get to access the actual - at that time - 14 days' additional leave, including seven days for the shift work, whereas workers in the metal trades are not characterised by that sort of longevity and therefore we need a system to provide for the short term continuous shift - - -

PN592      

VICE PRESIDENT HATCHER:  I'm not debating the merit of the proposition with you.  All I'm suggesting is at least from one available reading of the draft determination, it doesn't mean perhaps what you think it means.  That is, it doesn't provide the benefit which you say should be provided.

PN593      

MS TAYLOR:  To?

PN594      

VICE PRESIDENT HATCHER:  That is because the provision was drafted by reference to seven‑day shift workers, then as currently drafted they would appear to apply to someone who meets that definition in paragraph (a).  That is, someone who regularly works Sundays.

PN595      

MS TAYLOR:  Your Honour, I will need to certainly consider that proposition and I understand that I do have an additional seven days to do that.

PN596      

VICE PRESIDENT HATCHER:  All right.  Thank you.  Ms Schreier‑Joffe, do you want to respond to anything Mr Crawford said?

PN597      

MS SCHREIER-JOFFE:  Yes.

PN598      

VICE PRESIDENT HATCHER:  You didn't say that much about this, but - - -

PN599      

MS SCHREIER-JOFFE:  I'd address the issue of a conference if the full bench is minded not to revisit the decision of the 23rd and takes the view that there is an inconsistency and, as such, is minded to make a determination in regard to clause 11(5) of the award.  As I raise it, it raises some flow‑on effects.  If am grateful and acknowledge that you said any determination would only take effect once the award itself has been determined in the larger proceedings.  That being the case, there is less urgency in relation to the matter.

PN600      

VICE PRESIDENT HATCHER:  Really I was responding to your submission that the effect of the finding that we have already made last year, without the modern award being completed before the start of this year's ski season, is that it might be thought that the provision that, in effect, excuses payment of leave on termination is ineffective, but the provisions which require the payment of the loading on the pay rate remains effective and that would lead to a double‑dipping situation.

PN601      

MS SCHREIER-JOFFE:  Yes.

PN602      

VICE PRESIDENT HATCHER:  And, therefore, it would be desirable to resolve the whole thing prior to the start of the ski season.  Is that the gravamen of what you were putting before?

PN603      

MS SCHREIER-JOFFE:  That was a concern that I raised and I suppose I should address that issue in this way.  My understanding - and I think our position in relation to this issue should your decision be as I've indicated - given the necessary significance to the industry at large on this issue - and you mentioned were there enterprise agreements in play.  There are.  Certain Victorian enterprises have enterprise agreements in relation to this.

PN604      

VICE PRESIDENT HATCHER:  Does this award apply to any Victorian snowfields?

PN605      

MS SCHREIER-JOFFE:  Yes, it does.

PN606      

VICE PRESIDENT HATCHER:  It does?

PN607      

MS SCHREIER-JOFFE:  It does.  This has significant impact across the industry and so my client would be considering referring the matter to the Federal Court for a determinative decision on that issue of inconsistency.  That being said, my understanding of the impact of your decision on the 23rd is to inform the full bench as to the manner in which to amend awards going forward.  If that is correct, it doesn't have any immediate effect on the existing rights of employees in the industry until the award is actually amended.

PN608      

If that is correct, until the award itself is amended, it wouldn't have that effect that I was concerned about, but I did raise it because of the possible decision by the association to take the matter to the Federal Court.  In that regard, I would be more than willing to have a further conference with the AWU to see if we can narrow this issue, but on that point because there are so many issues involved in this award, the scope of that conference would need to be resolved before it occurs.  I mean, we're not just talking about - - -

PN609      

VICE PRESIDENT HATCHER:  I think Mr Crawford - I might be wrong - was talking about a conference involving the commission.  Is that right, Mr Crawford?

PN610      

MR CRAWFORD:  Yes, your Honour.

PN611      

VICE PRESIDENT HATCHER:  Yes.

PN612      

MS SCHREIER-JOFFE:  And thus I raise the issue because obviously the commission is dealing with a number of different issues that directly impact that award, not only this issue.  I raise it in that context, but in circumstances where if my interpretation of the legalities of the decision on the 23rd is such that it only effectively has an effect on the right of individuals once the award itself is amended, then obviously that issue of timing can be dealt with when decisions about the actual award occur, which will be, no doubt, time lined.  I understand there's a directions hearing in that matter sometime in March.

PN613      

If I'm wrong about that and the actual legality of your decision means that it amends the rights of individuals now - and I don't understand that that is the jurisdiction of the commission - then obviously there is a problem, but, as I see it, I think that more realistically the effect of the decision on the 23rd is to inform the commission as to the manner in which to amend the award, which will only take place when that occurs.

PN614      

VICE PRESIDENT HATCHER:  Yes, all right.  The practical problem may be that our decision of last year creates doubt about the effect of the meaning of the existing provision and I don't think you're going to get any result out of the Federal Court before the start of the ski season.

PN615      

MS SCHREIER-JOFFE:  Precisely.  I agree.  That's all I have.

PN616      

VICE PRESIDENT HATCHER:  Thank you.  Mr Izzo?

PN617      

MR IZZO:  Your Honour, I did just briefly wish to deal with a couple of matters that have been raised.  The first relates to, if I could call it, the transfer of business clauses in 11 different awards.  There are just two matters that I wanted to address.  The first is to respond to something that Mr Crawford said.  He stated in respect of these provisions which serve to mandate that an employer recognise services that comes across from an old employer - Mr Crawford said that in any event it's not the case that the employees are detrimental.

PN618      

He was asked by Hamberger SDP, "Well, what do you say to the proposition that some employees who may have wanted to have their annual leave paid out, won't get to have that opportunity?"  Mr Crawford stated, "Well, the reality is their position hasn't changed at all.  Before the transfer, they had a leave accrual.  When they get to the new employer after the transfer, they have the same leave accrual.  There's no detriment."  I submit that that's not the correct test to apply.

PN619      

It's not does the employee suffer a detriment before and after the transfer?  What needs to be analysed is when one compares the award provision to the NES provision, is there a detriment that is suffered?  In that case we say yes, for the reasons I mentioned before, which is that under the award provision they will never have the opportunity to have amounts paid out, whereas under the NES provision there will be circumstances where that can occur.  I just wanted to point out the - - -

PN620      

VICE PRESIDENT HATCHER:  I think it has been raised before, but one can understand that submission if it was the employee's election, but it doesn't make a whole lot of sense where it's the employer's election; but if they get what they want, it's only a matter of chance.  It's not a matter of choice.

PN621      

MR IZZO:  I think that's a concern that the AMWU raised, as well.  I concede that they don't have control over when the payment might fall due to them, but all I can say as a matter of absolute certainty is that they still have more opportunity to receive a payment under section 91 than they will under the modern award provision.

PN622      

COMMISSIONER BISSETT:  That might all be a question of perspective, because it's not just about payment.  It's about the leave.  There's a difference between being paid and having access to the leave.

PN623      

MR IZZO:  And having the leave.  Commissioner, that's why early on I conceded that in some cases they might want the leave and they might not get it, but that's just by virtue of the operation of section 91.  That's what the NES says is to occur.

PN624      

COMMISSIONER BISSETT:  No, the NES says that the employer gets to make the choice.

PN625      

MR IZZO:  The employer gets to make the choice.

PN626      

COMMISSIONER BISSETT:  Not the employee.

PN627      

MR IZZO:  That's right, Commissioner.  That's what the NES provides for and when we look at the term of this award - we've already said we don't consider it supplementary, but, even if it were, it needs to not be detrimental in any respect.  What we are identifying is that, yes, there may be some respects in which this award term is beneficial and I think those circumstances are the one that His Honour Vice President Hatcher has referred to and the AMWU. and you yourself now, Commissioner, but there will be other respects, other circumstances, that one could foresee arising where the employee may wish to be paid out, could have been paid out, but that is no longer a possibility.

PN628      

What we need to be satisfied, if we're going to include this term in the modern award, is that it's not detrimental in any respect.  That's where we see a problem with the clause, because it may be detrimental to employees in some respects.  Not all and it doesn't even need to be the majority, but in some respects.  That's the point we wish to make on that front.

PN629      

Just to finish on that point, I mentioned earlier on that the language of section 55(4) is somewhat different to the other provisions of the Act which talk about not contravening the NES.  I gave one example, but I can give just a few to the bench.  Sections 44, 45, 50 and 51(1) are all sections which talk about not excluding the NES, not contravening, things to that effect.  None of them talk about "in any respect".  That term is unique, as I said, to 55(4).

PN630      

VICE PRESIDENT HATCHER:  Section 44, does that make a difference if - you mean if it doesn't say "in any respect", it may be contravened in some respects?

PN631      

MR IZZO:  What I am saying, your Honour, is that the legislature appear to go to particular pains in 55(4) to put beyond doubt that if we are to start supplementing award terms, one must be cautious that in no respect is it detrimental.  That level of caution is not exercised in those other provisions.  I think that's the highest I can put that.

PN632      

COMMISSIONER BISSETT:  It's a bit like being very unique, isn't it?

PN633      

MR IZZO:  Sorry, Commissioner?

PN634      

COMMISSIONER BISSETT:  Do you have degrees of contravention?

PN635      

MR IZZO:  Yes.  There's a question to the extent to which you draw an inference there, but there is a distinction in the language.  The second point in respect of the transfer of business provision, if I could put it that way, relates to this reference by the AMWU to the fact that section 93(4) of the Fair Work Act is about taking annual leave and that that provision of the Fair Work Act provides a separate power to allow the commission to have this type of modern award term in there.

PN636      

I'd just like to draw the commission's attention to the totality of section 93.  93 commences, at 93(1), dealing with cash out.  At 93(2), it still deals with cash out.  93(3) provides that:

PN637      

A modern award may include terms requiring an employee or allowing for an employee to be required to take paid annual leave, but only if the requirement is reasonable.

PN638      

Then 93(4) talks about:

PN639      

A modern award may include terms otherwise dealing with the taking of paid annual leave.

PN640      

Look at 93(4) in that context.  What we say it's clearly about is that 93(3) says you can force someone effectively to take annual leave only if it's reasonable, but an award can have other terms about when the employee is to go and take their leave.  We say, as AIG have said, that's the framework within which 93(4) is operating.  To start now increasing people's accruals or changing how they accrue, is a matter that goes beyond 93(4) so we say that can't be relied upon.  That's all I wish to say on the transfer of business provision in the awards.

PN641      

I just have two separate points, but I'll be mercifully brief.  In relation to the three awards, Mobile Cranes, Airline Operations, I believe it is - there are three awards.  I apologise.  Mobile Cranes, I think Airport Employees and Life Performance - that's the third I was looking for.  There has been a discussion and what I just want to respond to is a question that your Honour actually asked another party with respect to the 12 months.

PN642      

You pointed out that some of the provisions, for instance, refer to 12 months' service, whereas the one I had referred to only referred to 12 months.  Your Honour gave an example where if an employee has six months' service and they take four weeks' leave, then they're going to have to wait another six months before they accrue the requisite period of time to have covered the whole period of leave taken - - -

PN643      

VICE PRESIDENT HATCHER:  Assessing that was the 12 months referred to in the clauses.

PN644      

MR IZZO:  In that circumstance, I think your Honour is right in saying there's no breach of the NES in how it operates.  There are difficulties other circumstances, I think, so if someone takes leave upon the commencement of employment - they've just started, but something happens and they have to go on leave - they go on one week of leave.  Within six months, they will have accrued not only that week they had already taken, but also another week by then.  By that time, they're more than able to take annual leave, but it appears on the face of this clause they'd still have to wait another six months.  In that scenario, we would have an outcome which breaches the NES.

PN645      

I think all this derives from the New South Wales and Victorian legislation which contemplated 12 months' service before you got a right.  If we were in that framework, then this clause may be able to operate without difficulty because in the latter example I just gave, the employee would never have had an entitlement until they'd done 12 months' service.  Under the old framework, it would have been compliant, but again where leave accrues progressively, in that second example I gave, I think we'd have a problem after six months.  That's all I wanted to raise about that.

PN646      

Lastly, just in response to the SDA in respect of the Hair and Beauty Industry Award, I wanted to point out and to make clear - unless it hasn't been made clear already - that in respect of that award, the actual draft clause, if you have it, that has been proposed by the NRA and the SDA - as I've already mentioned, it deals with personal leave.  The award doesn't deal with personal leave.  If your Honours go further to 34.2, the proposed clause also deals with unpaid compassionate leave.  That's not dealt with either by the award.  The award, at 34.2(b), only deals with casual employees taking unpaid carer's leave.

PN647      

This is where I start to have some difficulty with the proposed clause, because we now have 34.2(b) also dealing with compassionate leave, which is something the award hasn't dealt with at all for casuals.

PN648      

VICE PRESIDENT HATCHER:  Just to be clear, you're talking about the SDA's proposed clause in paragraph 19 of its submission?

PN649      

MR IZZO:  I'm referring to the NRA's submissions, but I'm assuming it's the same clause.  Just let me make sure I've got the same document.  I'll pull it up.  I understand there's a joint position, but the clauses that are proposed in the NRA document look slightly different to the clause proposed in the SDA document, which I must say I hadn't appreciated until just now.  It's paragraph 19, as you say, in the SDA document.  It's paragraph 6 in the NRA document.

PN650      

MR ELLIFFE:  Your Honour, apologies.  I believe Mr Izzo may be referring to the first submission from the SDA, not the submission in reply lodged on 20 February.

PN651      

VICE PRESIDENT HATCHER:  I'm looking at the SDA's submission of 16 January.

PN652      

MS PATENA:  Your Honour, it's Ms Patena.  Just to clarify, the wording that was contained in our submission of 20 February, it was a revised version from the wording that appeared in our original submission on 16 January.

PN653      

VICE PRESIDENT HATCHER:  That's identical to the NRA's submission, is it?

PN654      

MR ELLIFFE:  That's correct, your Honour.  We had discussions after the initial submission and came to an agreed clause - - -

PN655      

VICE PRESIDENT HATCHER:  All right.  I understand now.

PN656      

MR ELLIFFE:  - - - which we both put in on the 20th.

PN657      

VICE PRESIDENT HATCHER:  Right.  Thank you.  Sorry for confusing you then.

PN658      

MR IZZO:  No, I appreciate the clarification by the parties.  I think we still, your Honour, have a problem, because 34.2(b) in either of the submissions of 20 February - they're both identical - they both start to talk about casual employees taking unpaid compassionate leave.  That again is an additional matter to what's contained in the award.  I just wanted to draw that to the bench's attention because I made the point about personal leave, but, as the proceedings have developed, it has become apparent they're also dealing with this matter now that the award hadn't dealt with.

PN659      

I think, as your Honour said at the beginning of the proceedings, we're talking about NES inconsistencies.  Now what the parties here seem to be doing is just adding on sections about other aspects of the NES that weren't even referred to in the first place and my position is just that caution should be exercised doing that.  If all that's sought to do is paraphrase, as I've said - and that seems to be the case - then we're better off just sticking with the NES.  If they are seeking to change the entitlement, a merit based case would need to be advanced and that hasn't happened.

PN660      

VICE PRESIDENT HATCHER:  Mr Ferguson, I've just reminded myself, you made a submission about the Ski Award in your written submissions.

PN661      

MR FERGUSON:  I did - the AI Group?  Yes, we did.  I think the submission largely raised some of the consequential amendments that would need to be made, if memory serves correctly, flowing from the finding of inconsistency, so that the rates would need to be addressed.  I think we also picked up the issue about the standard rate needing to be addressed, as well.  We hadn't been certain about how that process would unfold.  We had envisaged that it might be through this proceedings that those matters are resolved.  If not today, at some point - - -

PN662      

VICE PRESIDENT HATCHER:  If we're going to change the rate structure, it may involve some substantial issues of evidence, I would imagine.

PN663      

MR FERGUSON:  It may.

PN664      

VICE PRESIDENT HATCHER:  And it interacts, as Mr Crawford has pointed out, with another application his union has made.

PN665      

MR FERGUSON:  Yes.  I don't know precisely our level of interest in that particular issue, but we would have no difficulty with the course of action that is being foreshadowed.  We just thought it prudent to set those things out now.  I only want to deal with a relatively small number of issues.  The first goes to submissions put by the AWU in relation to the contention that the transfer of employment provisions are supplementary terms and not detrimental to employees.

PN666      

Firstly, I want to make the point that we've dealt with the relevant provisions of the Act at paragraph 4.24 in some detail with our 23 January submissions, but in relation to specifically the interpretation of section 55(4), we note the Act provides that a supplementary term is only permissible -

PN667      

to the extent that the effect of those terms is not detrimental to an  employee in any respect, when compared to the National Employment Standards.

PN668      

We've made the point in our submissions that the wording "an employee" suggests that the assessment must be made in the context of individual employees, but also that the reference to "any respect" in a similar vein - which was raised by Mr Izzo - is very broad in the sense that the detriment can be of a very broad nature.

PN669      

VICE PRESIDENT HATCHER:  It also hints to the broader proposition that the NES is made up of entitlements of employees, not of employers, so that perhaps any question of inconsistency needs to be considered in that light.

PN670      

MR FERGUSON:  I must say I hadn't turned my mind to the broader question about whether employers have rights under the NES.  I've simply put the fact that this specific test is in relation to the relative detriment to an employee in the context of, you know, what may be a valid supplementary term capable of being included in an award.

PN671      

In the context of Mr Izzo's example about employees who may prefer or have a benefit from the leave being cashed out, which would be precluded by - or receiving a payment to be precluded by the operation of the award clause, we make the point that it's not really relevant whether that's a product of the agreement of the employer or just the employee's decision.  If, by happy coincidence, the beneficial outcome - or the detriment is visited upon the employee, rather, then the term is not valid.

PN672      

We also included in our submissions another, and we say more relevant, example.  That is the issue which we say 91 is addressing.  The point of the framework of the Act is that it enables a new employer in a transfer of employment situation to elect not to recognise the prior service.  Now, from a practical perspective the reason for that is it either encourages a new employer to continue the service of those employees and the employment of those employees or removes an obstacle or something that would otherwise discourage them from continuing that employment.

PN673      

The reality is if that right is taken away from the new employer, there's the very real prospect - and we'd say that practical experience suggests it is an issue - the new employers won't want to engage the existing workforce.  That's certainly a detriment being visited upon the current workforce if they lose their employment and it's not a hypothetical issue.  These are the sorts of issues - - -

PN674      

SENIOR DEPUTY PRESIDENT HAMBERGER:  Any condition of employment that's more costly to an employer, that is above the NES, might well have a deterrent effect on employing people, but you wouldn't say that is what was implied by saying that, you know, that was a detriment to the employee.  You know, if you have an award provision that says you get paid three - you know, you've benefits dramatically in excess of the NES, you wouldn't say that was a detriment to the employee.

PN675      

MR FERGUSON:  But this award term itself has a specific effect, in the sense that it removes the ability of the new employer to exercise an agreement not to recognise these issues.  Now, the reality is - - -

PN676      

VICE PRESIDENT HATCHER:  I think it's a comparison of entitlements, isn't it?  55(4) refers to -

PN677      

detrimental to an employee in any respect, when compared to the National Employment Standards.

PN678      

It's a comparison of entitlements under the putative supplementary provision to the entitlement under the NES.  I don't think it's looking to broader economic effects, is it?

PN679      

MR FERGUSON:  Indeed, but the issue of course is the National Employment Standards is where 91 sits, so that is the provision that, in effect, empowers the new employer to not recognise the past service.  The operation of the NES, including that provision, results in a benefit to the employees in that they get to continue on in employment in circumstances where they might otherwise not - - -

PN680      

VICE PRESIDENT HATCHER:  But that's not a benefit conferred by 91(3).

PN681      

MR FERGUSON:  I accept that in one view it's not directly conferred.  It's a product that we'd say flows from that.

PN682      

VICE PRESIDENT HATCHER:  It's not as if you have an entitlement to continued employment if there's a transmission of business and there's no conferral of that.  It's just a possible effect.

PN683      

MR FERGUSON:  That's right.  I must concede that.  I won't take that further.  That's all I wanted to put in relation to transfer of employment issues.  The next is in relation to submissions that were raised against us in the context of the shift worker provisions, if I can call it that.  There were assertions in our material that the proposed determination extends the entitlement of certain shift workers, in that it extends it to people who don't have the full 12 months service.  They've now received the more generous entitlement or the windfall gain, if you will, of the more generous shift worker accrual.

PN684      

As I understood it, there were submissions from the TCFUA - and I think the Vehicle Division of the AMWU also - that that can't be so, because that 12‑month limitation doesn't have any effect because it's inconsistent with the NES.  We doubt that's right, because we accept that this bench has already decided that the effect of those clauses is inconsistent with a specific provision of the NES, but the reality is that the entitlement provided is more generous than the NES entitlement.

PN685      

To the extent it can be argued that this in any way excludes the NES, it's only those provisions or only that element of the entitlement which is equivalent to the NES entitlement to leave which is inconsistent.  There's nothing stopping you having an award term that says there's some limitation to the more generous annual leave entitlement dependent upon the fact that someone has had 12 months' service.  There just isn't it.

PN686      

It's not going to be a provision which contravenes 55 in any way and in fact we'd say this is made clear by 55(6) of the NES itself, which I'll read:

PN687      

To avoid doubt, if a modern award includes terms permitted by subsection (4) -

PN688      

which is the supplementary terms -

PN689      

or an enterprise agreement includes terms permitted by subsection (4) or (5), then, to the extent that the terms give an employee an entitlement - the award or agreement entitlement - that is the same as an entitlement - the NES entitlement - of the employee under the National Employment Standards:  (a) those terms operate in parallel with the employee's NES entitlement, but not so as to give the employee a double benefit; and (b) the provisions of the National Employment Standards relating to the NES entitlement apply, as a minimum standard, to the award or agreement entitlement.

PN690      

Then there is the helpful example.  It says:

PN691      

Note:  For example, if the award or agreement entitlement is to six weeks of paid annual leave per year, the provisions of the National Employment Standards relating to the accrual and taking of paid annual leave will apply, as a minimum standard, to four weeks of that leave.

PN692      

We say there's nothing impermissible about the limitation that someone has to be there for a full 12 months in order to get the more generous provision, so what the new determination is doing is expanding an entitlement that didn't exist in the past.  We've already dealt with why that shouldn't be done and why that's unfair to employers, but the unions have also said that, well, regard has to be given to the fact that these provisions are very long‑standing - I think there was reference to them being in place for 30 years or something to that effect - and regard also has to be given to the fact that when these awards were made, in effect, they were taken to be meeting the modern award's objective or the relevant requirements.

PN693      

I think the point here is, firstly, it seems apparent from these proceedings that perhaps not a lot of attention was paid to the detailed nature of these provisions as they interact with the NES and so we need to be careful about being willing to re-visit those issues.

PN694      

VICE PRESIDENT HATCHER:  Sorry, what was that submission again?

PN695      

MR FERGUSON:  It seems unclear from these submissions about how much attention specifically was given to the detail of these clauses in the making of the awards, in the original award modernisation procedure.  I'm not disagreeing with all the comments made in the preliminary issues decision, but they can only be given so much weight.  We are reviewing the awards, of course.

PN696      

The other point is that what is being advanced in the specific determination is a change to the existing system.  What is being proposed is in part taking away a limitation on the entitlement that previously existed.  The reality is that will impose additional costs on employers, so we are looking at a new proposition being advanced.  We say the onus really rests on those who are saying that specific proposal should be made to make out a case for why the new provision is necessary in order to meet the modern award's objectives, given when the award was made it didn't contain that specific entitlement.

PN697      

We'd say there has been no case made out for that.  Rather, we'd say that in the circumstances given we're dealing with a new legislative regime compared to that which operated historically, there's a compelling case that has been made out - when you have regard to the modern award's objective - to say that a fair and relevant safety net would involve aligning the rules around accrual for these shift workers to the provisions of the current Act, rather than basing them on those that were developed at a different time and under a different legislative regime.  That's all I wanted to put, unless there are any additional questions.

PN698      

VICE PRESIDENT HATCHER:  Thank you.  Anyone else?  Ms McKinnon?

PN699      

MS McKINNON:  I only just had one additional point that I wanted to raise and it's just because I'm not sure where we've ended up to on this point.  I thought it was agreed that employers had rights under the Act and under the NES, and that's certainly case in the AWU's submissions and in ours.  If there's any suggestion that that's not the case, I just wanted to take your Honours to the opening paragraph of section 61 of the Act - section 61(1):

PN700      

This part sets minimum standards that apply to the employment of employees which cannot be displaced.

PN701      

It's about the employment relationship.  It's not just about the employees' entitlements.  It's more broader than that and it deals with the standards that apply to the employment of employees as a minimum.  That's the only point I wanted to make.

PN702      

VICE PRESIDENT HATCHER:  All right.  Ms Crawford, who are you replying to?

PN703      

MR CRAWFORD:  The NFF, just that last point.

PN704      

VICE PRESIDENT HATCHER:  But their submission was before yours.  You're replying to the reply, are you?

PN705      

MR CRAWFORD:  She sort of just quoted me and I want to correct it, so - - -

PN706      

VICE PRESIDENT HATCHER:  I think she was quoting something I raised actually.  Anyway, go ahead.  It's quicker this way, I think.

PN707      

MR CRAWFORD:  I think she was referring to me, because in our submission dated 23 January, we did accept at paragraph 13 that employers do have rights under the Fair Work Act.  That's pretty obvious.  Obviously that Toyota decision talks about the right of an employer to try and have an agreement varied by putting it out to a vote.  Our issue is we don't think there are rights for employees.  Well, there are rights for employees in the NES.  Our point is that awards and agreements can remove those rights as long as the outcome is beneficial for employees.  That's our point.

PN708      

VICE PRESIDENT HATCHER:  Yes.  All right.  Thank you.  I think that's everybody.  Can I just confirm that we will grant leave to the AMWU to respond to paragraphs 7 through to 32 of the AIG's submissions filed on 19 February 2015, but only to the extent that it has not already been addressed in oral submissions made by the AMWU in whatever capacity.

PN709      

We give the AIG a further seven days to reply to anything specifically raised in that written submission.  Otherwise, we thank the parties for their very useful submissions and we will reserve our decision.

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