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TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009 1049880-1
JUSTICE ROSS, PRESIDENT
VICE PRESIDENT HATCHER
VICE PRESIDENT CATANZARITI
SENIOR DEPUTY PRESIDENT HARRISON
C2013/5139 & C2013/6333
s.302 - Application for an equal remuneration order by United Voice; Australian Education Union
(C2013/5139)
and
s.302 - Application for an equal remuneration order by the Independent Education Union of Australia
(C2013/6333)
Sydney
10.05AM, TUESDAY, 22 APRIL 2014
Continued from 19/11/2013
PN672
JUSTICE ROSS: Can I take the appearances, please? Firstly in Sydney.
PN673
MS C. HOWELL: May it please the commission, I appear for United Voice and the Australian Education Union.
PN674
JUSTICE ROSS: Thank you, Ms Howell.
PN675
MR I. TAYLOR: May it please the commission, Taylor, initial I. I appear with MS L. ANDELMAN for the Independent Education Union.
PN676
JUSTICE ROSS: Mr Taylor.
PN677
MS K. EASTMAN: If the commission pleases, Ms Eastman, with MS E. RAPER, appearing for the Commonwealth.
PN678
JUSTICE ROSS: Thanks, Ms Eastman.
PN679
MS R. GRAYCAR: May it please the commission, Graycar for the New South Wales Minister for Industrial Relations.
PN680
JUSTICE ROSS: Thanks, Ms Graycar.
PN681
MR N. WARD: Your Honour, I continue my appearance for the Australian Chamber of Commerce and Industry, the Australian Business Industrial, the New South Wales Business Chamber, Tasmanian Chamber of Commerce and Industry, and I appear with Mr C. McELROY for the State and Territory Local Government Association.
PN682
JUSTICE ROSS: Thanks, Mr Ward.
PN683
MR B. FERGUSON: If the commission pleases, my name is Ferguson, initial B, and I appear on behalf of the Australia Industry Group.
PN684
JUSTICE ROSS: Thanks, Mr Ferguson.
PN685
MR S. FORSTER: If it please the commission, Foster, initial S, for the Australian Federation of Employers and Industries.
PN686
JUSTICE ROSS: Thanks, Mr Forster. Nobody else in Sydney? Can I take the appearances in Melbourne, please?
PN687
MR J. SHINGLES: If it please the commission, Shingles, initial J, of Livingstones on behalf of the Australian Childcare Alliance and Childcare Centres Association and Creche and Kindergarten Association Limited.
PN688
JUSTICE ROSS: Thank you. Would you mind just making sure speak into the microphone? It's a little hard to hear you at this end.
PN689
MR SHINGLES: Your Honour, do I need to repeat my appearance?
PN690
JUSTICE ROSS: Yes, if you wouldn't mind.
PN691
MR SHINGLES: Certainly. So Shingles, initial J, of Livingstones on behalf of the Australian Childcare Alliance, Australian Child Care Centres Association and Creche and Kindergarten Association Limited.
PN692
JUSTICE ROSS: Thanks, Mr Shingles.
PN693
MR P. O'GRADY: Yes. If the commission pleases, I appear for the Victorian Minister for Industrial Relations.
PN694
JUSTICE ROSS: Thanks, Mr O'Grady.
PN695
MR O'GRADY: Thank you, sir.
PN696
JUSTICE ROSS: I don't think there are any other appearances in any other state that has a link. I think there are some observers. Is that right? Does anyone else wish to announce an appearance? No. I had rather worked on the assumption that the applicants would go first. I want to make some observations before I get you, Ms Howell. Is there any discussion about what happens next after that?
PN697
MR FORSTER: Your Honour, if I could just make one suggestion?
PN698
JUSTICE ROSS: Sure, Mr Forster.
PN699
MR FORSTER: It just concerns my location here at the bar table. I wonder if a direction could be issued to the other states to put their microphones on mute because there's quite a degree of feedback at my end.
PN700
JUSTICE ROSS: Certainly.
PN701
MR FORSTER: Thank you, your Honour.
PN702
JUSTICE ROSS: Can everyone that's interstate just put your microphone on mute for the moment? Well, you've found the microphone, so that's a good thing. Okay, thanks very much. Mr Ward, if you end up having trouble, and Mr Forster, just let us know and we'll sort it out.
PN703
MR WARD: Yes.
PN704
JUSTICE ROSS: Is there any discussion about what would happen next? Normally - well, not normally I suppose - we'd hear from the governments and then the employers. Is that - and then anyone - it will be - it doesn't matter much because ultimately if you want to say something, I'll ask everyone at the end of the process, "Does anyone else have anything they want to say," so you will get a fair opportunity to respond. Have you had a chance to think about that - the order?
PN705
MR WARD: That would be fine, your Honour.
PN706
JUSTICE ROSS: Ms Eastman, you happy with that?
PN707
MS EASTMAN: I'm happy with that, your Honour. There's probably very little the Commonwealth wants to say as - - -
PN708
JUSTICE ROSS: No, I've got some questions for the Commonwealth.
PN709
MS EASTMAN: So apart perhaps from getting the questions, but there's very little that we want to add, if anything, to our written submissions.
PN710
JUSTICE ROSS: Okay.
PN711
MS GRAYCAR: I've nothing to add to the written submissions, unless the commission - - -
PN712
JUSTICE ROSS: Think we've got some questions for you too, thanks, Ms Graycar. Okay.
PN713
MR SHINGLES: Your Honour, if I might ask of one thing? Being at the outer reaches down here in Melbourne today, if anyone who does address the commission, if they would mind just indicating at the outset of their address as to who they are and who they are representing, and I apologise for that, but the only camera angle we have of Sydney is of the four members of the bench.
PN714
JUSTICE ROSS: Don't sound so disappointed, Mr Shingles. No. Look, certainly if each of the parties can take that on board and just announce here from. Can I make an opening observation? It's directed at the applicants and it's a broad - there are a number of other questions I have of you that we can deal with during the course of it, but I wanted to make sure there were two issues in particular that at some point in your own time you deal with and, at least speaking for myself, I'm seeking some assistance and elaboration on those.
PN715
The first is this: how you posit the test, and it's the undervaluation proposition, if I can put it that way. United Voice puts this at paragraph 35 of its initial submission. It says that in order to establish a proper basis for an order under section 302(1) the applicant must establish that the work of the employees in question is undervalued and that the undervaluation is gender based. So it's a two-component test.
PN716
The Independent Education Union puts a similar proposition at paragraph 60, although they frame it in terms of an order would follow if workers were remunerated below the true value of their work. It's said against you primarily, but not exclusively, by those that Mr Ward represents that the concept of undervaluation doesn't appear in Part 2-7 and that the words equal or comparable and by comparison with another group. So there's that broad question about the framing.
PN717
The second is what I'll characterise as the discounting issue. That seems to be the other key conceptual issue in it. The United Voice deals with this at paragraph 60, and in its reply submissions at paragraphs 22 to 30, and especially at paragraph 28, and the IEU's reply submissions at 46, and then 64 and following deal with that issue. I just wanted to make sure that I raised the points with you at the beginning lest I forget as the day wears on. Okay? Ms Howell?
PN718
MS HOWELL: Thank you, your Honour. If it please the commission - - -
PN719
JUSTICE ROSS: Sorry, Mr Shingles, this is Ms - - -
PN720
MS HOWELL: Sorry.
PN721
JUSTICE ROSS: - - - Howell for the applicant, United Voice.
PN722
MS HOWELL: If it please the commission, my clients rely on the written submissions, and what I had proposed to do was try to address the issues which seem to have generated the most controversy in the submissions of the various parties, and your Honour has identified obviously two of the most contentious, and I will try to address those and a few other issues which seem to have arisen, and then really rest on our written submissions beyond that.
PN723
The issues I do propose to address orally are the general construction issues in brief, the issue concerning the two different approaches of direct comparators versus the undervaluation approach, which is a matter your Honour has raised, if one accepts the undervaluation approach, how does one determine that work is undervalued, and whether that undervaluation is gender based, and then say some things about how one would then establish the level of remuneration that is required in order to provide for equal remuneration under the statutory test, and that will involve some touching on the issue of whether a discounting approach is appropriate to the statutory test.
PN724
So it would seem that there are two fundamentally different approaches to what needs to be demonstrated to satisfy the statutory test and in short the two approaches are obviously an approach which focuses first on undervaluation, then on whether that undervaluation is gender based, and thirdly if undervaluation on a gender basis is established, it then falls to be determined what level of remuneration represents equal remuneration for work of equal or comparable value, and of course it is put against us by most of the employer groups that the proper starting point is a binary comparison between two groups of workers.
PN725
That's essentially what the employer groups say. You pick two groups. The group which is covered or would be covered by a potential order, and another group which on the employer's case has to have or has to undertake closely comparable work, and if the comparison is close enough you can then assess whether there is equal remuneration with those two groups. The employer approach necessarily follows that step with an approach which says you then eliminate all elements of the differential which are not caused by gender, and it's really, I emphasise, from the employer submissions a causative test which is applied. If the gender remuneration gap is not caused by gender, then that part of the gap at least is irrelevant on the employer case.
PN726
The difference in approach really starts at the basic level statutory construction of section 302 and, as we observe in our submissions, what is required within the context of the statute and the words used is a beneficial approach and that is not the approach taken by the employer. I don't pause to analyse all of the authorities on beneficial construction of legislation or provisions such as Part 2-7, but clearly to the extent possible within the framework of the statute, that is the appropriate approach.
PN727
JUSTICE ROSS: I take it you accept the proposition that there are limits - - -
PN728
MS HOWELL: Yes.
PN729
JUSTICE ROSS: - - - to a beneficial construction.
PN730
MS HOWELL: Yes, your Honour.
PN731
JUSTICE ROSS: You're still caught by the language of the provision.
PN732
MS HOWELL: Yes, your Honour, we do. Having said that, as we endeavour to show in our written submissions, to the extent that conflict or tension is identified with other parts of the Act, it's our submission that these remedial provisions would, generally speaking, be given priority or treated, in the words of the High Court in the Blue Sky cases, the leading provisions generally speaking, and at the very least they would be given substantial weight when one is trying to harmonise the different parts of the Act, including the safety net provisions.
PN733
So if I can just ask the commission to go briefly to section 302, which is probably a good place to start. Section 302(2) relevantly defines the meaning of "equal remuneration for work of equal or comparable value" and that is the term means "equal remuneration for men and women workers for work of equal or comparable value", and the only threshold test which must be satisfied in order for the commission to have discretion to make an order under this part is that found under subsection (5):
PN734
PN735
The first point I would make is that subsection (5) directs attention to the employees to whom the order would apply. So then of course one must show that for those employees equal remuneration as defined in subsection (2) is not applicable.
PN736
VICE PRESIDENT HATCHER: If one applies a mathematical analogy, equal is something, is the same as something else.
PN737
MS HOWELL: Yes, that applies to the remunerations. I was looking at whether the remuneration is equal but of course to the value of the work a different test applies.
PN738
VICE PRESIDENT HATCHER: So the question is equal to what or unequal to what?
PN739
MS HOWELL: Well, essentially the approach that we take, sir, is that, first of all, you look at, is the work undervalued? If it is then you can say there is not equal remuneration, we say, unless you assume that all of the comparable work performed by men is also undervalued. If you have one group of women predominantly, although we concede it can apply to men, generally speaking if one has a group of predominantly women workers, and it's identified that the value of that work is not properly valued, then it will follow from that conclusion that there is not equal remuneration for work of comparable value, equal or comparable value but - - -
PN740
JUSTICE ROSS: That's so, is it, whether you have got an identified comparator or not. It's a logic proposition.
PN741
MS HOWELL: Yes, unless - - -
PN742
VICE PRESIDENT HATCHER: That involves the assumption that any comparable male work is properly valued.
PN743
MS HOWELL: Yes, or not undervalued at least. If one had a reason to think that all of the comparable male work or substantial parts of it was undervalued, then that might raise some different issues, but there's no basis to take that step. There are essentially two elements. Is the remuneration equal and is the work comparable in value? And I stress "in value". The meaning of "equal remuneration", and I don't think there's a lot of controversy about, there was firstly a little bit around the edges, but essentially the parties are in agreement as is summarised in the commission's draft discussion document that it will apply to all benefits in broad terms which are received by the employee in exchange for the performance of work. So the key question really is how do you establish that work is of - the work under consideration is undervalued compared with work of comparable value.
We submit that in most cases that will be shown by showing that women work as to whom the order would apply are receiving less remuneration than male workers, or indeed other workers, whose work is properly valued, would receive for performing work of the same or comparable value. The essence of the difference really is not that you can't use comparators but that we say it's not a necessary step for a number of reasons which I'll elaborate on, and what we say fundamentally is how you satisfy the test of showing that there is not equal remuneration for men and women workers for work of equal or comparable value, is essentially an evidentiary question, not a jurisdictional hurdle in terms of comparators.
PN744
JUSTICE ROSS: As I understood your submission, it was that we ought not proscribe how that evidentiary test is met. That's a matter for an applicant to put their case, following on whatever material they want to draw on. At the end of it, in order to grant the relief we would have to be satisfied as to the matter in subsection (5), and you put it that to adopt a requirement for comparators et cetera is to constrain the statutory provision and erect what is an evidentiary question into a jurisdictional one.
PN745
MS HOWELL: Yes, your Honour. That's an essential part, and we go further and say it's clear that there are a number of - once one accepts that undervaluation is an appropriate test, then it's clear that there's a number of different ways one can show undervaluation without reference to a comparator, and when we talk about comparators, it tends to be used in different senses, but the sensing which we understand it to be used mainly is a comparison in the sense that it details a valuation of two different groups in respect of the work they're doing. So you effectively have two different work evaluation exercises, and it's really that binary exercise that evaluating both and comparing which we say is certainly not a necessary part of the statutory test.
PN746
JUSTICE ROSS: It might be a convenient point now to put some of the other parties on notice. A number of them have expressed the view that the legislative framework doesn't evince an intention to move away from retaining a requirement for a male comparator. It's that word "retain" the requirements for a male comparator, and I wanted to put to those parties that if you look at the 72 equal pay principles, there was no requirement for a comparator, a male comparator, so I'm not sure on what basis it's put that somehow their proposition is bolstered by the fact that it's really maintaining the status quo, as it were, the retention of an existing test that was well accepted. That seems to be the basis on which it's put. It's not the only basis clearly but I wanted you to address that when we come to it. Thanks, Ms Howell. Sorry to interrupt.
PN747
MS HOWELL: Thank you, your Honour. If our understanding of how the other parties advanced the need for a comparator is correct then, getting back to the statutory test, we say that the employer groups are reading the statutory test as if subsection (5) said, "However, the Fair Work Commission may make the equal remuneration order only if it's satisfied that the employees to whom the order will apply, there is not equal remuneration for equal or comparable work." So in other words, the emphasis on - goes straight to comparison of the work of two groups, doesn't give sufficient weight to the term "work value" and the comparison of the value of work. So even if what was involved at the first stage was a comparative process, it's not a comparison of work. It's a comparison of the value of work, and there's a whole different range of ways in which the value of work can be, and has been, evaluated even, for example, by reference to the modern award safety net. The employers very jealously guard the sanctity of relativities under the modern award safety net, and the relativities of course are relativities in terms of the value of work right across a whole spectrum of different types of work.
PN748
One might say, if one was going to look at a comparison, "Well, there's a readymade framework." Now, of course we don't necessarily accept that modern awards will always be gender neutral in the way that they have established rates, but prima facie there's just an example where the value of work has been determined on a rational basis. So even if one says, "Well, you start with a comparison," you don't necessarily have to start with a comparison which involves a detailed job evaluation. You're looking at the value of work, not the nature of the work, and that can, depending on what the particular facts of the case, raise a lot of different types of evidence which would be sufficient to satisfy the statutory test.
PN749
JUSTICE ROSS: I'm sorry, isn't there a logical connection between the value of the work and its nature?
PN750
MS HOWELL: There is, your Honour, but what I'm saying is you can make a comparison of a value without going to the detailed job evaluation if there are other indicators, and just one of those, for example, might involve the way in which work has been valued under the safety net rather than saying, "Well, we have to find a comparator which involves similar work or comparable work, which is effectively, we say, the wrong test.
PN751
JUSTICE ROSS: So how that might work, is it this: that you might see two groups of employees that the safety net system values their work at the same level?
PN752
MS HOWELL: Yes.
PN753
JUSTICE ROSS: But their remuneration is different?
PN754
MS HOWELL: That's exactly how it might work, your Honour. I was going to come to that in a little bit more detail in terms of how one assesses undervaluation but that's the kind of thing. That's just one example of how you could approach the question of undervaluation, even on a comparative basis, without the binary job evaluation process which seems to be favoured. So that's the first way in which we submit that the employer groups have really put a gloss on the statute and that is to say you're looking at equal or comparable work rather than work of equal or comparable value. The second major gloss which we submit has been put onto the statute is that the employer groups generally impose an additional requirement in addition to unequal remuneration, and that is a causal requirement that the inequity arises because of gender.
PN755
Indeed, questions 8 and 14 of the questions which the parties addressed actually specifically refer to differential pay because of gender, and that also directs attention towards a binary comparison-type approach, and it also leads to an excessive focus in our submission on the exclusion of non-gender related factors because the strict "because of" test is then applied inappropriately, in our submission, when considering the extent to which undervaluation is gender based, and I'll come to it in a little bit more detail, but in our submission, there is a very big difference between gender-based undervaluation and undervaluation which is caused by gender.
PN756
So from that starting point of how the statute is approached, the two different approaches really develop, and the first point, in our submission, is that the undervaluation approach should be accepted as the first step in determining whether the statutory test is met, and essentially as I have indicated, if it can be shown that the work is undervalued on a gender basis, then prima facie there is not equal remuneration because one group is guessing - the work of one group is undervalued whereas, as a general proposition, the work of other employees, whether that's considered across the board or by reference to a cross-section of comparable value, is properly valued.
PN757
VICE PRESIDENT HATCHER: So when you refer to undervaluation on a gender basis, is it sufficient for that purpose you say that the group of workers you're considering as female dominated or is something more required?
PN758
MS HOWELL: In an appropriate case that may be sufficient but it would be our submission that generally one would find other indicia which would confirm that. So we would certainly - what is essentially required is a relationship between gender and undervaluation. On a strict and literal reading you could say you don't need that at all. All you need is to show that a group which are predominantly women or indeed predominantly male, their work is undervalued, so on a literal reading that would be sufficient. I think the approach of the full bench in the SACS case was really to show that there has to be some gender basis to the undervaluation, and one would look for more than simply that the group is entirely or predominantly women, but it would be our submission that that test is easily satisfied, and there's an authority which I do want to take the commission to on that issue as to the nature of the relationship between undervaluation and gender that needs to be shown.
PN759
JUSTICE ROSS: The test that you put on undervaluation, that's advanced on the basis of the language in subsection (5), is it? As I understand it - - -
PN760
MS HOWELL: And subsection (2), your Honour, yes.
PN761
JUSTICE ROSS: Yes, and it's put there that that's because the jurisdictional prerequisite is framed in terms of the value of the work.
PN762
MS HOWELL: Yes, your Honour.
PN763
JUSTICE ROSS: Yes.
PN764
MS HOWELL: There are a number of reasons we say the undervaluation approach should be accepted as a primary approach to satisfying the statutory test. The first is that it has been adopted by this commission in the SACS case and by tribunals, and particularly the New South Wales and Queensland tribunals, who have given detailed and thorough consideration to the issues in similar statutory contexts, and the first SACS case, FWAFB 2700, at paragraphs 232 to 234, unanimously accept the undervaluation test, and it's important to emphasise that this approach was taken unanimously, and that the commission would not depart from that approach unless there was compelling reason to do so. And to the contrary we say the commission would have no reason to depart from that approach.
PN765
I don't pause to take the commission to all of the discussion which has been addressed to that issue in the state tribunals, but it is referred to in the Equal Remuneration Report in some detail, and that process of course was a process of inquiries followed by determinations by the respective tribunals, and particularly in the case of the Queensland legislation, there is no material difference whatsoever between these provisions under the Fair Work Act and those that were there considered. So that section 232 in particular of the first SACS case reinforces our submission that essentially this is a question of evidence, and that the question is whether and how gender-based undervaluation is to be established, and of course the commission goes on in that part to express its view, again unanimously, that there was no need for a male comparator, so that one has a five-person full bench advancing or accepting those two propositions.
PN766
So as I think some of the employer groups have pointed out, that the commission is not of course bound by the SACS case, but would, in my submission, follow that reasoning unless there was strong reason not to do so. Your Honour the President made reference to the fact that there hasn't necessarily always been a comparator requirement explicitly in the legislation. I think the only provision which actually had any reference to comparators was section 622 of the Work Choices legislation which did make reference to comparators. However, that provision has been removed, so to the extent that there ever was any reference to comparators, made a brief appearance and then disappeared again. The fundamental reason we say undervaluation is the correct starting point, embracing the reasoning of the full bench in the SACS case and the New South Wales and Queensland tribunals, is the focus on the value of work in the statutory test. So that the attention is directed to whether work is equal or comparable in value rather that equal or comparable in nature, and it's our submission that once that is assessed, one considers the extent of the undervaluation and that may or may not require comparisons of some form, and I'll get to that.
PN767
But then the question is; why is this approach preferable to a binary comparison where you start by saying, "Here's our group, we're going to pick this group and make a comparison between the two," and that's the essence of the claim. In our submission, that approach is really a discrimination based approach and, as a number of parties have identified in their submissions, the statute has moved away from an approach which focuses on discrimination between two groups.
PN768
Because essentially what you're doing there is purely a relative exercise which only tells you about the relative value of the two groups or the relative comparison of the work of the two groups, and there is nothing in that approach which tells you necessarily whether the work is properly valued or not, and intuitively that approach is unappealing. You've got an evidentiary case and indeed a jurisdictional - something which the employer groups say is both a necessity and a sufficient test. But it doesn't tell you anything about whether the work of either group is properly valued. It's simply saying, how do these two groups relate to each other, and there are obvious limitations in that approach, in my submission.
PN769
VICE PRESIDENT HATCHER: Am I right in recalling that in the Green J report there was a comparison with geoscientists, being male comparison, and the conclusion was that the male comparator itself was also undervalued.
PN770
MS HOWELL: I think that's right, yes. But certainly, as is noted in the equal remuneration report, there's been a lot of consideration of the difficulty of those kind of comparisons, and I don't take the commission through all of that. But we do say that that focus, on the relationship between two groups, and effectively is one treated more favourably than the other, can actually divert attention away from the proper statutory test of equal remuneration for work of equal or comparable value, and of course there are a number of practical difficulties in addition to that in principle difficulty with a binary comparison approach.
PN771
The first and most obvious is there may not be a suitable comparator at all. The employer groups have gone to a lot of trouble to emphasise that, you have to choose the closest possible work, preferably even work which is identical, and the further away the work is from similarity, the more difficult it is on the employer case. Again, that is a mistaken focus on the type of work rather than the value of work.
PN772
But in some cases obviously, there simply may not be a comparator which involves similar work, and the New South Wales commission did observe that, in the case of child care in particular, there simply wasn't a particularly useful comparator because the skills involved in the child care industry and the occupations which were under consideration do not have any ready comparison essentially that can be found in predominantly male work.
PN773
The reference to that is found in the Equal Remuneration Report at page 107 where the relevant commission decision is cited. So that's the first problem, there may not be an appropriate comparator in the first place and bang, you're in the territory of because it's essentially a discrimination based approach, you're then in the territory of a hypothetical comparator which is the approach that would be taken in discrimination law, if there isn't a sufficiently close comparator and - - -
PN774
SENIOR DEPUTY PRESIDENT HARRISON: How do you - I know it's establishing a negative - but how does that work? You assert there is no appropriate male comparator, and is that your job over and then is it for someone else to say, "Of course there is, look at these groups"? How does that actually work, to persuade us to accept that very first step, "No, well, there is no appropriate male comparator," and I know these are the practical problems rather than your first submission.
PN775
MS HOWELL: Yes, these are really by way of illustrating. But it's difficult to see how else one could - I think one of the ways one would approach that is looking at the authorities which have dealt with - many of the industries under consideration have been dealt with in the past, in terms of either specifically gender based evaluations such as - particularly the New South Wales commission and child care, librarians and - the others escape me, but there's a pretty long list of different occupations.
PN776
So there has been discussion in those cases. So I suppose one would also look at, "Well, what is the nature of the skills? Where do you find something which compares to caring for an infant, caring for a small infant? Where in the world of male skills does one actually locate something which you can squarely compare with the level of responsibility, the dirty work, et cetera."
PN777
VICE PRESIDENT HATCHER: But does that imply that there's no suitable comparator because there's no work of a similar nature or type, as distinct from a similar value?
PN778
MS HOWELL: Well, the question of the value is obviously different, and that's why we urge the position that first of all you look at what is the value of the work, and as I will come to there are a lot of different ways that you can approach that other than by reference to a comparator. I'm not sure if that answered the question. It probably didn't.
PN779
VICE PRESIDENT HATCHER: Well, the point I was trying to make was that in the case of child care, the exclusion of a comparator, of a suitable male comparator on the basis that there was no male dominated work of a similar type or nature, not that there was no male dominated work of a similar value, which is the contradiction you were putting earlier.
PN780
MS HOWELL: I think the employer position is essentially you compare the work and that's what the comparison is. So if one accepts that position, there is a difficulty. If one says, "Well, you are doing a comparison, but it's a more broad, value based comparison," then obviously there is more scope to find work which is of comparable value, and I've already alluded to the fact that you've got a safety net award system which may or may not be a starting point for saying, "Well, here's work at the C10 level lined up for a good reason, so we can proceed on the basis that prima facie the work is of a comparable value, so let's look at what the actual remuneration is."
PN781
But the focus on the work doesn't allow you to do that, because it requires detailed analysis of similar skills, similar attributes for work. Even if one can find work which is sufficiently similar to justify comparison, then the other problem which I've alluded to is the possibility that the comparator group is not properly valued. So what would be the point of doing an equal remuneration exercise where neither group is properly valued, and just assuming that an applicant chose a comparator group which was very well remunerated, as one well might, and shows that the work is comparable, then the employer can come along with another group which is also comparable which gets paid a lot less relatively.
PN782
So on one comparison of comparable work you can say, "Well, the remuneration is not equal," and on the other you could show either it's equal or even that the applicant group gets paid better. So then you have a position of, "Well, which comparator do you say is the correct one," and you get into a lot of difficult consequential arguments about particularly where the reasons for the higher or lower rates of the comparator groups are not easily identifiable. You then get into secondary arguments which are really as big as the first argument, which are about whether the comparator group is itself properly valued.
PN783
SENIOR DEPUTY PRESIDENT HARRISON: Is that an argument in favour of their not requiring a comparator group, or is that an argument that requires us to make a judgment about the suitable comparator?
PN784
MS HOWELL: Well, it's really in support of the argument that it's a better starting point to say, "Is the work undervalued or not," and really that in some cases it may well be that you can say, "Here's a comparator which we can all agree is properly valued and we can proceed without difficulty." What I'm really emphasising, I suppose, is that that's not necessarily the best approach in every case, and certainly shouldn't be made into a jurisdictional necessity, as it were.
PN785
VICE PRESIDENT HATCHER: When the starting point is, "Is the work undervalued," are you assessing that by reference to actual remuneration paid out in the market place or the award rate?
PN786
MS HOWELL: By reference to actual remuneration, yes. In many cases, such as the present, that will be the award rates. But I am going to come to how you ought - in fact the next thing I come to is how you show that work is undervalued if you don't have a comparator group.
PN787
VICE PRESIDENT HATCHER: Is there any basis to consider that payments made by the market place in excess of the award rate have anything to do with work value?
PN788
MS HOWELL: When we come to the issue of how you value work, you certainly would have to make some effort to exclude factors which don't relate to the intrinsic value of the work, and so if there is - an obvious example would be a Certificate III or C10 person working in the mining industry, where there's a shortage and where they get probably more money than I do. We wouldn't say that that would be a fair comparison of remuneration with child care workers, because obviously there is a premium based on the shortage which is not based on the intrinsic value of the work. So there are going to be difficult questions, but the way that we approach it minimises those difficulties whereas, as I'm going to endeavour to submit, the way the employer groups approach the binary comparison will multiply the difficulties of identifying those factors which go to the market rates but don't really reflect value.
PN789
VICE PRESIDENT HATCHER: So when is any payment over the award based on work value?
PN790
MS HOWELL: Well, once one has shown that there is undervaluation, which I will come to, then the question does become a relative one. But again, it's how you show what's relative remuneration for work of comparable value. The test is obviously directed to the actual remuneration. So again, on the literal interpretation of that, you could compare the miner, the tradesperson in the Pilbara with the Certificate III in a child care centre.
PN791
In theory you could, but we say that the sensible approach is to look at the actual value and we accept that once undervaluation is shown and once it's shown that there is a gender basis, you have to have some reference point by way of comparison to say, "Well, this is how work which is of comparable value is ordinarily valued absent factors such as market premiums and other considerations which are not related to the value."
PN792
VICE PRESIDENT HATCHER: Anyway, you're going to explain how you assess undervaluation?
PN793
MS HOWELL: Yes. Well, all we say on undervaluation is, if that's your starting point there are a large number of different ways in which it can be established, and I just give some examples really to show that one wouldn't be limited to comparison in establishing undervaluation. One is of course looking at the value of work, and a useful definition of that and an old definition is set out in the equal remuneration report at page 143.
PN794
VICE PRESIDENT HATCHER: What was the page reference, I'm sorry?
PN795
MS HOWELL: 143, your Honour.
PN796
VICE PRESIDENT HATCHER: 143?
PN797
MS HOWELL: Yes. At the top of page 143, there is a reference to the 1962 case of the Crown Employees (Scientific Officers), which is at (1962) AR 250, and the passage set out is a very broad definition of what work value is:
PN798
The function truly understood is consider all the relevant features of the work, to take into account all relevant material, including such as will furnish a guide to a fair valuation, to bear in mind the contentions of the parties, et cetera, and to fix amounts which the tribunal itself deems to be just and reasonable to meet the circumstances of the case. The amount so fixed will represent the tribunal's view of the value of the work.
PN799
So in broad terms, that's a useful concept of work value. Of course, content has to be given to that, particularly by insuring that the particular valuation techniques are gender neutral. So in terms of whether a male comparator is required, I think obviously the SACS case determined that it wasn't, and I've taken the commission to that passage. In the first SACS case the commission, or Fair Work Australia, didn't really address the question of whether you need a comparator at all, because it wasn't called upon to do so.
PN800
It wasn't setting any principles and in that particular case there were comparators, albeit not male comparators, and a substantial number of the parties present, and particularly I think the Commonwealth, the Victorian government and so reluctantly the New South Wales government, have accepted that a male comparator is not essential. But it follows from acceptance of that proposition, in our submission, that you don't need a comparator necessarily.
PN801
Because the requirement for a male comparator is urged on the basis of the terms of the statute, which is equal remuneration for men and women workers. But once one accepts that a male comparator is not a necessity arising from the statute, then again it really puts the issue of comparators in its proper place as an evidentiary issue. So there is an intuitive difficulty, I think, with the proposition that you don't need a comparator.
PN802
But more closely analysed, it actually is a matter of common sense when one has regard to the definition of work value, which is generally accepted. The approach which was urged in the SACS case was obviously an indicia based approach and that was - as a number of parties have pointed out, the tribunal expressed some reservation about the indicia approach, but it's a framework within which gender based evaluation - gender based undervaluation can be evaluated and we both - all of the union parties say that's the proper approach, it's framework.
PN803
It's also necessary to emphasise though that when one talks about indicia in global terms, there are a lot of different facts listed in different decisions which might be indicia of gender based undervaluation. They're not all in the same category. You get issues like undervaluation of qualifications and undervaluation of skills which go to the heart of the gender based undervaluation and do tend to demonstrate undervaluation directly, and then you get other types of indicia such as the size of the workplace, the degree of unionisation, the degree of casual labour, and they are more the type of indicia which are generally associated with gender based undervaluation but may or may not have a direct causal relationship.
PN804
So one can well understand caution about certain types of indicia being used to demonstrate undervaluation per se, but the same criticism can't be made of all of them. Some of them do go direct to the heart of the valuation of the work and the qualifications and the skills and whether there has been undervaluation of skills which are particularly feminised or, in the case of the SACS case, identified as Karen work.
PN805
So one can understand some caution about the indicia approach, but it really depends what indicia you're looking at. Some of them may directly demonstrate undervaluation but just to step back and think about other ways one can demonstrate undervaluation, first of all there might be some problem with the modern award relativities. Now, for an award reliant group such as child care workers this would obviously impact directly on the remuneration levels.
PN806
Now, I think one of the employer groups, I think it was ABL, gave an example that this could give rise to inequity of remuneration which met the statutory test. Now, it may be unlikely. The employer groups certainly advance that it's unlikely that such inequities in the award system had arisen, but ABL accepted, well, if you could find such an inequity in the award system, that would of itself demonstrate undervaluation and that conclusion is difficult to resist. So that is the example where you say, well, you don't need a comparator, you can see that that work is undervalued.
PN807
The second example, and these are just the type of things which might demonstrate undervaluation - - -
PN808
JUSTICE ROSS: So that first example would (indistinct)
PN809
MS HOWELL: It may extend to another industry if it could be - an industry that wasn't award dependent if it could be shown that the undervaluation in the award was also reflected in the level of over award payments. Another example which might arise from the award system would be if you had an award where the C10 rate was lined up as it should be, but above that level there was a compressed or flat structure which didn't reflect the level of qualifications which the employees had which justified differentials from the C10, whether that be the certificate 4 diploma, advanced diploma, bachelors, et cetera.
PN810
If those qualifications were really necessary for the job but the internal relativities of the award didn't reflect the qualifications then one could say simply by looking at that award itself, those higher levels which require higher qualifications are not properly valued, there's undervaluation of some classifications.
PN811
VICE PRESIDENT HATCHER: I suppose given the approach the parties have taken to remuneration, that that sort of comparison would have to go beyond just the minimum rate but it takes into account other things such as, for example, penalty rates, shift loadings and the like.
PN812
MS HOWELL: If one is looking simply at whether the higher levels are undervalued relative to the C10 level, then in my submission you wouldn't necessarily need to look at penalty rates. If one is looking at a comparative exercise with other awards then one may - if you're looking at internal award issues then presumably they would all get the same penalty rates, if they didn't - most often it's the higher levels that don't get the penalty rates, so they might be doubling (indistinct) in this case.
PN813
VICE PRESIDENT HATCHER: The cross award comparison you might have the rates directly aligned but other differences condition would produce different outcomes in terms of remuneration.
PN814
MS HOWELL: Yes, that's certainly possible, your Honour, but that's simply some of the evidentiary considerations that you would be looking at. Another way in which undervaluation can be shown would be if there have been changes to the value of work which haven't been reflected in any change to the remuneration. Now, true it is the employers might say, "Well, you've got an alternative remedy, take a work value case," but often it's not that simple because the factors are combined and not easily separated. So accepting there might be an argument, nonetheless, that is way in which undervaluation can be shown and indeed it's one of the matters we rely on in this case in combination with other factors.
PN815
So those are some examples. Others would be where one looks at the award history and the history of the award itself discloses, for example, a work value case which is not appropriately valued skills which at that time were not valued because of their feminised nature. Again, you don't need a comparison with another group of workers to show that that kind of thing may lead to undervaluation or alternatively if the skills have never been properly valued in a work value exercise it may still be possible to show by reference to expert evidence particularly that those skills have not been properly valued.
PN816
Focusing on remuneration, there are also - you might look at the rates of remuneration and in certain circumstances deduce from that that there is undervaluation of a particular group. So by way of example, the average male hourly earnings for a degree qualified professional were $50 an hour, and the average female dominated professional occupation requiring the same qualification was $25 an hour. That kind of evidence may, in an appropriate case, of itself lead to a conclusion that there is undervaluation of women workers.
PN817
So another example would be where a group has been valued on the basis of equal remuneration principles by a state tribunal but has subsequently lost the benefit of those orders by translation into the federal award system. Another example would be where there is an acute shortage of qualified staff in the particular occupation. That may of itself be a sound indication that work is undervalued. So all I'm really advancing here is there is a multitude of different ways, either separately or in combination, that those kind of factors can lead to a conclusion of undervaluation, without actually considering the work that someone else does but simply considering the work done by the group in question.
PN818
VICE PRESIDENT HATCHER: Just going slightly off topic. Subsection (2) uses the word "workers" instead of "employees". Is that of any significance?
PN819
MS HOWELL: I'm not sure if it's intended to make a distinction, I have to say, your Honour, but as Mr Taylor points out, theoretically you could compare with persons performing work who weren't actually employees.
PN820
VICE PRESIDENT HATCHER: For example, solicitors versus barristers.
PN821
MS HOWELL: Yes.
PN822
VICE PRESIDENT HATCHER: Which I think one is female dominated and one is male dominated.
PN823
MS HOWELL: I think the solicitors get paid more, your Honour. I'm not sure what that would prove. Maybe barristers could bring a work remuneration case.
PN824
JUSTICE ROSS: I would like to sit on that case.
PN825
MS HOWELL: I don't think I'd like (indistinct) so it's the applicant's submissions that in many cases those kind of considerations will be more compelling and more persuasive in terms of showing undervaluation than the binary comparison of two groups for the reasons I've referred to. We don't say that you can't satisfy the test by reference to direct comparisons. We simply say some portion has to be applied to that approach because of the difficulty of establishing what the proper value of the work is and that as a matter of principle it's wrong to limit how one can demonstrate undervaluation as the employer groups seek to do.
PN826
The next question which is a distinct question is really if you've shown undervaluation, to what extent do you have to show that it's gender based and, as I've indicated, on a literal reading of the statute, the fact that the work is predominantly performed by women might be sufficient, but the general approach of the commission in the SACS case and also state tribunals is to say, well, you have to show some gender basis for that undervaluation.
PN827
JUSTICE ROSS: Do you accept that's the correct approach in this framework?
PN828
MS HOWELL: We do, your Honour. We do. But as I've indicated, once one does show that the work is predominantly performed by women we do say that the test is easily satisfied. I do have an authority which I want to hand up on this point, or more accurately an extract from a very long authority. If I could hand that up. I apologise for not referring to it in the written submissions. I didn't photocopy the whole case, partly because of the number of people who are going to require it. We do rely on the full analysis by Weinberg J in this case which is Macedonian Teachers Association of Victoria v Human Rights and Equal Opportunity Commission, which is reported at 1998 91 FCR page 8.
PN829
His Honour was considering the racial discrimination legislation, the Commonwealth Act, and the definition in section 9(1), the critical words of which are, "Based on a protected characteristic," so it's unlawful to do an act involving a distinction based on ethnic origin, et cetera. It fell to be decided what the words "based on", what meaning should be given to those words, whether they gave rise to a causal relationship so that you had to show that the discrimination was because of the protected characteristic and we note at the outset that the test in the equal remuneration provisions is even lower.
PN830
There's nothing in the Act that says some discrimination law or unequal remuneration has to be because of or even based on gender. It simply has to be shown that there is not equal remuneration for men and women. So the statute itself doesn't engage with causation or relationship directly at all. In any event, we say that the way that his Honour Weinberg J has approached the issue, particularly the passage set out at page 30, merely illustrates how wrong it is to approach these provisions as if they say "because of gender." At line 5 his Honour says - - -
PN831
VICE PRESIDENT HATCHER: Sorry, what page?
PN832
MS HOWELL: Page 30. His Honour says:
PN833
It is obvious the phrase "based on" is capable of bearing different shades of meaning which should not, in my opinion, be read in a manner which would tend to defeat the objectives which underlie the statutes. Those objectives are to be ascertained from its nature, its scope, its terms.
PN834
His Honour then cites Kirby J's decision in IW v City of Perth and refers to Banovich, and then about halfway down the page:
PN835
I am fortified in my view that the phrase "based on" in section 9(1) of the Act should be construed as encompassing the broader not necessarily causative relationship expressed in the phrase "by reference to" because the words "based on" are taken directly from the definition of racial discrimination -
PN836
et cetera.
PN837
The case, I must say, does involve some lengthy analysis of discrimination legislation but the essential conclusion that the relationship contemplated is one essentially captured by the words "be reference to" is something which, in my submission, is useful in construing part 2(7) and certainly highlights the inappropriateness of using a because test or a causation test as a requirement for establishing gender based discrimination. So there is no causative test, in our submission, and the use of the words "because of gender" are inappropriate in considering whether the test is satisfied.
PN838
At it's highest what one needs to show is that there's a relationship between gender and undervaluation and the exact nature and extent of the relationship, in my submission, can be demonstrated - or a sufficient relationship can be demonstrated by reference to the indicia of factors which are commonly associated with undervaluation of women's work. So the indicia approach is equally important in determining whether there is a relationship between the undervaluation and the fact of gender.
PN839
VICE PRESIDENT HATCHER: So what words in the statue give rise to that submission?
PN840
MS HOWELL: Well, if one reads it literally there are no words, causation or even relationship, one simply has to show that men and women are not receiving equal remuneration for work of equal value. So in one sense that fact is sufficient. But we have accepted the approach of the state tribunals and Fair Work Australia in the SACS case of saying, well, the mere fact that there's a group of women who are not being equally remunerated is not necessarily sufficient, but if you can show that kind of relationship between gender and undervaluation then that certainly is sufficient. So I suppose that submission is really, in a sense, made against ourselves, but that's how the authorities have proceeded, but there needs to be some relationship which is something which is significantly short of a causal relationship but nevertheless is a relationship.
PN841
VICE PRESIDENT HATCHER: Is that consideration relevant to the statutory criteria in subsection (5), or is it relevant to the circumstances in which the discretion might be exercised to men and women?
PN842
MS HOWELL: It may be relevant to the discretion. I must say, your Honour, that unencumbered by previous decisions, we may well have just said that showing us a group of women, the work of those women as undervalued, would be sufficient. That proposition is not really consistent with the approach of the state tribunals and the tribunal in the SACS case, which essentially said, "Well, you need to show undervaluation which is gender based," and "gender based" was taken to mean more than simply coinciding with a group of women. However, I can certainly see the force of the argument that if the group which is undervalued is women, and it's highly or overwhelmingly, then the statutory test is met.
PN843
If that proposition is not accepted, we say certainly you don't look at the cost test, you look at, is the undervaluation referable in the relevant sense to gender? That's really what gender based - when the tribunal says, "You have to show undervaluation which is gender based," that phrase has generally been taken to mean, I think, referable to gender. So I suppose in short we say, once one has shown undervaluation, the bar of showing a gender relation referable to gender would not be high and certainly wouldn't involve a causative test.
PN844
Then one comes to - I'll be pretty brief with this - setting the value of the work once one has established undervaluation which is gender based. We do accept that the costing statute talks about equal remuneration for men and women, that there is a point here where comparisons of some sort are going to be necessary. However, not in the sense, again, of the comparison of the work which is favoured by the employer groups. For all of the reasons I have already identified, that's not necessarily reliable, and certainly not a necessary approach.
PN845
The binary test has the same problems as it would do in the context of determining whether undervaluation exists. Again, the existing relativities in awards may provide a pointer, the type of demonstration you might need of the actual value of the work, or more broadly, the same issue arises, but there are many different ways in which you can establish what the remuneration applying to males performing work of comparable value would be. It might be qualifications, it might be consideration of the award rates, or it might be a comparison which is more detailed.
PN846
Then when one is considering the appropriate remuneration which properly values the work, one comes up against the issue of discounting for non gender based considerations, which is advanced by, I think, all of the employer groups, and possibly some of the governments too. The essential proposition is that to the extent that the gap in remuneration is not caused by gender, it should be discounted. That's really the proposition that's put against us. It's of course not part of the statutory test, that approach, and indeed, in my submission, it's contrary to the statutory test for the making of an order. Subsection 302(1) provides that an order must "ensure that, for employees to whom the order will apply, there will be equal remuneration for work of equal or comparable value". So, in my submission, again the focus is on proper and consistent remuneration for work of similar comparable value, and - - -
PN847
JUSTICE ROSS: It doesn't necessarily mean, in making that assessment about what's comparable value, that you don't exclude certain factors.
PN848
MS HOWELL: No, your Honour. We accept that some factors would be excluded properly, and the factors that we say would properly be excluded are those that don't reflect the intrinsic value of the work, and that would be the market shortages and things of that nature. There may be other considerations which would lead to discounting in an appropriate case which did relate to the nature of the work. For example, we know that in some awards you have a lot of service increments because experience is highly valued, such as teaching and nursing. That tends to point to the fact that length of service might be a relevant consideration in assessing the relative value. But those are essentially things that go to the intrinsic value of the work.
PN849
What the employers and those who advance this argument say, which goes beyond that, is regardless of whether it goes to the intrinsic value of the work or not, if you can't show that a consideration is gender-related or because of gender, even, then you have to discount any order, because that part of the remuneration gap is not caused by gender. So part of the difficulty of this approach is that it really emphasises causation in a way which is not contemplated, in our submission, by the statutory test. The commission is not instructed to make an order which will create partial equality of remuneration to the extent that the gap is demonstrated to have been caused by gender. That's not what the commission is asked to do. The commission is asked to make orders in an appropriate case which will ensure equal remuneration for work of equal or comparable value.
PN850
VICE PRESIDENT HATCHER: So just explain how that links to your proposition that you exclude everything not related to the intrinsic value to the work? Isn't that what the award does?
PN851
MS HOWELL: There may be reasons why the award doesn't do that. That's obviously - - -
PN852
VICE PRESIDENT HATCHER: Let's assume the award exercise has been properly carried out. Isn't the intrinsic value of work fully accommodated by the rates set by the award?
PN853
MS HOWELL: What we would say, your Honour, is that one is comparing the remuneration for the work. What the awards do is show the relative intrinsic value in that situation. So they show that essentially a C10 child care worker and a C10 in the retail industry or any other industry are deemed to perform work of comparable value.
PN854
VICE PRESIDENT HATCHER: They do more than that. They set the rate of pay which is meant to be the appropriate minimum rate of pay for work of that intrinsic value.
PN855
MS HOWELL: Yes. The statutory test is directed towards actual remuneration. So essentially our case would be, you have two occupations which are deemed by the award to be of equal value, you might have one group, say the child care workers who have no over-award payments by way of agreement or private individual contract or anything, and you might have the other group, which has an average of $300 a week in over-award payments, so you can say clearly in that scenario there is not equal remuneration for work of equal value.
PN856
VICE PRESIDENT HATCHER: I understand that. But on the logic of that submission, I don't understand why you say that you're excluding.
PN857
MS HOWELL: Well, if it could be shown that part of that $300 was essentially a component which was based on shortage only, or remote location or some other factor that I suppose didn't relate to the criteria which are normally used in the work value exercise, then - - -
PN858
VICE PRESIDENT HATCHER: See, I think employers would say that by definition any over-award payment is market-related and it's not related to the intrinsic value of work, and by definition, if it's an over-award payment, it's produced by the market, not by any assessment of intrinsic value.
PN859
MS HOWELL: I don't think one could say that any over-award payment is market-related. There are a whole range of different considerations which contribute to the difference between minimum rates and actual rates. Certainly the fact that the act - the statutory test is correct, it's a remuneration, and it's directed and has the effect of overriding any agreements to the extent that the agreement is less beneficial, clearly suggests, in my submission, that the act is directed to looking at the actual remuneration on the presumption that it can't all be explained away by reference to factors which don't reflect the value of the work.
PN860
VICE PRESIDENT HATCHER: It seems to me the difference then becomes one of onus; that is, you say that an employer would have to demonstrate that the difference was not caused by some sort of genuine market-related consideration, and the employers say you need to prove that the difference is explained by some gender-related consideration.
PN861
MS HOWELL: I think the parties are certainly - it would certainly be our position that if the employer asserts market based or non-value-related components, then they would have to demonstrate - that's certainly our position, because the statutory starting point says you don't have equal remuneration for work of equal value, and clearly, in that scenario where the child care workers are at award rates and the other group is $200 above, then on its face, the statutory test is met.
PN862
I think what we would take issue with is the proposition that the fact that something is market based per se means that it doesn't fall within the statutory test or should be excluded. I mean, there's a lot of different factors which the employers say should be taken into account. Most of them are more specific than simply saying "market based", because the fact that something is market based doesn't stop it from being gender-related. So I think what you've really got to analyse, amongst other things, is whether the factors relied upon really take the pay differential out of the realm of being gender based. One can say in the case of shortages, for example, one can understand the argument that that's not really gender based, but simply to say it's market based, that and many of the other criteria identified by the employer, in our submission, wouldn't exclude the differential being gender based.
PN863
So, for example, one of the employer groups, if not more, says, "Well, you have to take into account funding arrangements in determining what discounting should apply, and you should discount the funding arrangements." The problem is the same: funding arrangements may be different in the industry under consideration, but that doesn't exclude the fact that they have some gender basis. The funding might be low because the wages are low; the wages are low because it's women's work. So you can't just say, "Well, these are the factors that you're going to discount for."
PN864
The ABL lists a whole range of factors, including the profitability of the industry, the level of regulation of the industry et cetera. Again, they're not factors which exclude gender based considerations, prima facie at least. So what that sort of approach envisages is a massive exercise in analysing the industry in which the work is performed, which really in the end would lead to no useful conclusions at all, because those factors prima facie wouldn't exclude the proposition that the undervaluation is gender based.
PN865
JUSTICE ROSS: Ms Howell, we were contemplating taking a 10 or 15-minute break at some point. Is now convenient to you?
PN866
MS HOWELL: Yes. I've almost finished, your Honour, really, in terms of the time.
PN867
JUSTICE ROSS: I probably haven't.
PN868
MS HOWELL: I was hoping your Honour wouldn't say that.
PN869
JUSTICE ROSS: No, I just want to make sure - I've got some questions that go throughout your submission. I just want to make sure I cover them. So do you want to complete yours, we'll break and then come back?
PN870
MS HOWELL: A break is convenient for me, your Honour.
PN871
JUSTICE ROSS: All right. We'll adjourn now. Thank you.
<SHORT ADJOURNMENT [11.36AM]
<RESUMED [12.01PM]
PN872
JUSTICE ROSS: Thank you, Ms Howell.
PN873
MS HOWELL: Thank you, your Honour. Really winding up my submissions on what we at least have identified as the most contentious issues, and dealing with the difficulties of the so-called discounting approach, and clearly that approach has the potential to defeat the purpose of the statute which is focused on equal remuneration, particularly when one introduces factors such as those urged by the employer groups, but the important issue, in our submission, is to ensure that the work is properly valued and the extent of the gender-based undervaluation is assessed by reference to properly valued work, and that does extend to exclusion of any factors which would have the effect that work is overvalued, that is, the work to which comparison is made, but this issue also points again to the difficulty of a simple binary approach of saying, "One group gets X and the other group gets Y," because then one, at least on the employer case, has to try and deconstruct the gap, that's really the essential approach taken by the employers, and try and label different components as having different causes, which, even in principle sounds difficult when you actually try and do it in practice.
PN874
And in some ways one can see the advantage of broader-based comparisons because, at the very least, the broader comparisons will have a tendency to average out the exceptional factors which might have the effect that some work is overvalued, and it might lead to a false comparison. Those are really the issues I wanted to address in my oral submissions, if it please the commission.
PN875
JUSTICE ROSS: Thanks, Ms Howell. Can I just go to your preliminary or your first submission. Look, a number of these points you have addressed so we needn't repeat. Paragraph 34, your second sentence there, "The term invites consideration of male workers and female workers as a whole as much as smaller subgroups."
PN876
MS HOWELL: Yes.
PN877
JUSTICE ROSS: Can you just expand on what you mean by that.
PN878
MS HOWELL: Yes. It's really a response to the comparator issue, and it's to say that in principle the statute doesn't dictate that you find another group of comparable work. It is equally open to say, "This group to whom the order would apply, for example, having a certificate 3, gets paid $500 a week." When one looks at male workers with that qualification as a whole, they get $800 a week, for example, so that type of exercise is just as available on the statute as what's advocated in terms of precise comparison of the work. So it could be even average male earnings as whole in an appropriate case or it could be by reference to a particular qualification or some other characteristic which is a much more broad-based comparison.
PN879
JUSTICE ROSS: At para 39, second sentence, you say, "The traditional work value or valuations have not generally required any comparator." You will have noted ABI's reply to that that work value in an award context has usually had a datum point comparator. So it's the same group of workers.
PN880
MS HOWELL: Yes.
PN881
JUSTICE ROSS: Not always but often, and it's identifying a change in their work. So there's a comparator in that sense, and as I understand, your submission is that work value principles or that framework is relevant and available but not in a datum point sense, it's not looking at changes necessarily, but it's a consideration in assessing the value of the work.
PN882
MS HOWELL: Yes, your Honour.
PN883
JUSTICE ROSS: Para 60, conceptually are you putting the proposition this way; that the jurisdiction to make the order doesn't require an assessment or a delineation between gender and non-gender based factors?
PN884
MS HOWELL: Yes, your Honour.
PN885
JUSTICE ROSS: The discretionary consideration as to how one - the form of the order et cetera, it's at that point that those factors, having regard to what you have said about them and the intrinsic nature of work, it's at that point that those factors come to bear, because when I read this I thought - prior to your oral submissions I thought that it was being put that there was no consideration of any of the sort of factors that you have been referring to; that is, those that don't go to the intrinsic nature of the work.
PN886
MS HOWELL: Yes. I think the proposition in 60 is fairly unqualified and I think as a - literally read, that is how you would approach. The only qualifier that we put on that is when you're looking at whether there is equal remuneration you do compare with properly valued work. That's really where we say some limitation applies, not necessarily at the step of discretion, because the order has to ensure that there is equal remuneration, albeit it may be phased in. Those considerations, in my submission, would really come in when one was assessing either whether there was equal remuneration or the extent of the gender pay gap, but once you have established that there is not equal remuneration by reference to properly valued work, then an order is required to ensure equal remuneration so I suppose I'm saying it comes in at a step before the discretion of the - - -
PN887
VICE PRESIDENT HATCHER: Right. I see. And what provision gives life to that proposition?
PN888
MS HOWELL: I'm sorry, your Honour?
PN889
VICE PRESIDENT HATCHER: What provision in the section gives life to that proposition; that is, has to be a comparison with properly valued work. What's the text that supports that proposition?
PN890
MS HOWELL: I think when one is looking at whether there is equal remuneration for work of equal or comparable value, when one is looking at whether the remuneration is equal or not, and the question is with what - by reference to what do you compare that to make that assessment, as a matter of logic we would say it has to be with properly valued work, and generally speaking, we would proceed on the basis that comparable work is properly valued unless shown not to be, unless shown to be, for some reason, either inflated or undervalued.
PN891
VICE PRESIDENT HATCHER: So it's subsection (2), is it?
PN892
MS HOWELL: Yes, your Honour.
PN893
JUSTICE ROSS: All right. I take you to paragraph 85. It's this proposition that it's seeking to make the various parts of the Act work harmoniously and, you know, I checked clearly it's a principle of construction, you're reading it in context and you are seeking to interpret the Act as a whole. I'm struggling a bit with the proposition that the modern award objective has any bearing on Part 2-7. I say that because, on its face, an equal remuneration order is something quite separate from an award, and you can see the inconsistency provisions in Part 2-7. It also overrides an enterprise agreement.
PN894
MS HOWELL: Yes, your Honour.
PN895
JUSTICE ROSS: A modern award objective, by the terms of the statute, is we're directed to apply it when we're exercising modern award powers.
PN896
MS HOWELL: Yes.
PN897
JUSTICE ROSS: The exercise of powers under 2-7 is not the exercise of modern award powers. The reason I raise is that it may be an error to have regard to it where the statute makes express the circumstances in which one has regard to it, and this case doesn't fall within that.
PN898
MS HOWELL: Yes.
PN899
JUSTICE ROSS: Now, I appreciate what's said in the SACS case about perhaps indirect relevance. I'm not sure, to be frank, what that means, and nor am I really sure what those who seek to draw attention to the modern award objective, and that's in a number of submissions, well, I want them to perhaps contemplate a question I'm putting to you as well. Why? Why is it relevant when the terms of the statute seem to exclude it, or rather, seem to confine its relevance to certain functions. It doesn't have an ambulatory scope. It's not like an object of the Act.
PN900
MS HOWELL: No, your Honour. I would respectfully accept that proposition. It seems to me that the sense, or one of the senses in which the modern award provisions are relied on, is the proposition that somehow equal remuneration has already been dealt with in that context, and as a matter of discretion, at least as far as the award system is concerned, one ought presume that there's already a framework which reflects the principles of equal remuneration, but beyond that, I must say I'm not really sure how the employers put that there.
PN901
JUSTICE ROSS: Even that proposition can be tested because the modern award objective does not require the commission to give effect to equal remuneration.
PN902
MS HOWELL: That's so, your Honour.
PN903
JUSTICE ROSS: On no view does it do that.
PN904
MS HOWELL: No, your Honour.
PN905
JUSTICE ROSS: It sets out a number of factors which the commission is to take into account, and as the tribunal said on a number of occasions, there's a degree of tension between some of those considerations.
PN906
MS HOWELL: Yes, your Honour.
PN907
JUSTICE ROSS: So it seems to operate in quite a different space, but in any event I thought I would take the opportunity to raise it with you and others can respond. In your proposed principles, I think you identify the female industries and you have that as a - but I take it you accept, as you did in your oral submission, the proposition that these provisions aren't solely directed to female employment, female workers.
PN908
MS HOWELL: We do, your Honour. As a matter of logic that's the case.
PN909
JUSTICE ROSS: Finally I think it's in - you might help me here, Mr Ware, in ABI's written submissions, I think it's para 27, it deals with, or seeks to extract a range of propositions about remuneration. I just want to be clear as to - just bear with me for a sec. Yes, it must be their primary submission.
PN910
MR WARD: I think it's 27, your Honour.
PN911
JUSTICE ROSS: Thank you.
PN912
MR WARD: Page 9.
PN913
JUSTICE ROSS: Do you see those propositions there, Ms Howell?
PN914
MS HOWELL: Yes. I think generally speaking we do, your Honour.
PN915
JUSTICE ROSS: Yes.
PN916
MS HOWELL: The one qualifier, I suppose, would be - well, I think (c) covers it which is if you get, for example, a car which has a dollar value, then that obviously goes beyond monetary. Generally speaking things which can be converted into a monetary benefit would be covered. Beyond that probably not.
PN917
JUSTICE ROSS: All right.
PN918
VICE PRESIDENT HATCHER: What about things like security of employment? It's often said when public sector employees are involved that there's intangible non-monetary factors attaching to public sector employment which give it advantages over private sector employment, perhaps less so these days.
PN919
MS HOWELL: I would say some public servants might not accept that proposition. In my submission there has to be a limit to the term, and the limits which is found in the case law is either the monetary benefits or the benefits that can be easily given a monetary value.
PN920
JUSTICE ROSS: Thank you, Ms Howell.
PN921
MS HOWELL: Thank you. If it please the commission.
PN922
MR TAYLOR: Your Honours, my client, as you will have seen, takes an approach that is not relevantly different to that of Ms Howell. We embrace the submissions that you have just heard and I don't seek to cover the same ground more than necessary, and as a result I can be somewhat shorter. I will, however, attempt to cover the general issue that the President raised at the outset, and also address two other specific matters that arise in effect in reply to matters that were placed in employer reply submissions, but can I start by reminding the commission of that which we say is the starting point when considering the legislation, and a starting point that I think all parties agreed with, that equal remuneration is a right, and that Part 2-7 is providing a mechanism to ensure that right.
PN923
It is not difficult to accept that Part 2-7 was enacted recognising that formal equality, that is, that the laws that are otherwise found in the Act, require all employees to be paid the same minimum rates, isn't sufficient to bring about practical wage equality, and that recognises that there is, in this country, a significant gender pay gap; one that has not decreased but indeed increased over the last 20 years. It's a trend that is unlikely to be reversed unless Part 2-7 is given the work and given an interpretation which we contend allows that gender pay gap to be properly dealt with.
PN924
Now, to interpret Part 2-7 in a manner that the employers - sorry, I'll start that sentence again. It's a reason - that purpose is a reason to reject the employer approach of urging upon the commission that the provisions contained within them, a threshold requirement not apparent we say on the face of the legislation, that there must be a specific comparator group at the outset, and indeed that that must be a male group, and neither of those propositions are found in the legislation, and to accept such an approach imposes requirements that will largely neuter, we say, the capacity of Part 2-7 to address the well-known gender pay gap.
PN925
The ABL submissions in reply at paragraph 9 identify, correctly we say, that in order to accept the employer approach this commission must distance itself from the majority view in the SACS case. Indeed we say it must do more than that, it must depart from the unanimous view in the SACS number 1 case. The second thing ABL correctly say is that for their propositions to be accepted, this commission must depart from the approach taken by state tribunals notwithstanding they are and were adopting - sorry - applying similar legislation, and I want to come back to that at the end dealing specifically with Queensland and the history of the legislation, the federal and Queensland legislation.
PN926
I mean I know Ms Howell has dealt with this, but can I just reiterate the first SACS case is of great utility. It established unanimously, no dissent, that there is no jurisdictional requirement to have a male comparator. It found unanimously that the workers in the SACS industry were undervalued for gender related reasons on a comparison with state and local government employees. It was able to find the necessary jurisdictional fact unanimously without the need for a specific male comparator.
PN927
The existence of the undervaluation based on gender was sufficient to determine that there should be a remedy in the form of an equal remuneration order. Now, at that point the bench then asked the parties for further submissions, but it is clear that there seemed to be no need, contrary to the submissions of the employers, no need for a specific male comparator in order to meet the jurisdictional threshold contained within subsection (5) of section 302.
PN928
The other thing which we say this bench can draw assistance from in determining a proper approach from the first SACS case is the use of indicia, and in particular, and we draw attention to this in our written submissions, paragraph 281 of the decision where the full bench unanimously expressed a view that issues such as bargaining power and funding models are influenced by gender. So this employer approach, and indeed an approach which New South Wales seems to adopt, that bargaining is somehow unrelated to gender, is one which didn't find - which the full bench, we say correctly, didn't accept. It's quite possible in certain fact situations that gender will be a significant factor in determining particular bargaining outcomes, and one wouldn't discount, as the employers suggest should be done, merely because bargaining was able to achieve different outcomes.
PN929
JUSTICE ROSS: I'm sorry, was that paragraph 281?
PN930
MR TAYLOR: It was.
PN931
JUSTICE ROSS: Thanks.
PN932
MR TAYLOR: Now, we note that whilst the government parties all indicate a preference for a male comparator, all of them come to the view that there is no jurisdictional requirement for a male comparator ultimately, and if one reads the submissions of the states of Victoria and New South Wales, there is extensive analysis as to why a male comparator is one that they urge upon the commission, but ultimately they come to the conclusion that where a male comparator is not available another comparator, another benchmark, is appropriate, and on that basis if that argument is accepted, it can't be accepted that there is a jurisdictional requirement for a male comparator.
PN933
Ultimately, as Ms Howell correctly said, it's a matter of - it's an evidentiary question. The commission has to be satisfied of that which is set out in subsection (5) of section 302. It is a matter for the applicant to demonstrate that by evidence. In many cases there will be a male comparator. That will be a good way of doing it. In other cases there will be another method. Ms Howell quite rightly said that there may well be cases where one doesn't need a comparison group at all. She identified circumstances where on the face of the award itself there is an undervaluation, and in the SACS number 1 case it was the Commonwealth, I think, that identified that there may have been an error in translating graduate rates at the time the modern award was made, and that might well have been an example where undervaluation was available on the face of the award without needing a comparison.
PN934
But we have identified an approach that we say is squarely based on the text of the provisions and the legislative history, and your Honours would have read that in respect of the legislative history we have identified three changes which assist further in rejecting the notion that there must be at the outset a specific comparator group and a forensic discounting approach before one can move off what we call step 1. That is, those three indicators are firstly the express removal of the need to find discrimination. Discrimination carrying with it traditionally the need for a comparator group. The legislation no longer refers to comparator groups. Section 622 of the Workplace Relations Act did. It had a specific provision that dealt with and referred specifically to comparator groups. Here the legislation specifically has moved away from that.
PN935
The third indicator is the broadening to compare those with comparable value rather than restricting to notions of equal value, and we say that the broadening to comparative value and the focus on the word "value" is the key to understanding the way in which this provision should be interpreted and which would lead to the three-step approach that we have identified in our submissions being the preferred approach.
PN936
I wanted to identify what that three-step approach is next because we say that the logic that underpins the provisions leads one to this three-step approach, and in dealing with these three steps I want to address some questions that have been raised this morning by the president and Hatcher VP about particularly the third step and the issues of how you assess what is proper work value outside of a - or when you're dealing with above award considerations.
PN937
The first step we say is that which the full bench adopts unanimously in the SACS number 1 case. That is, it had identified that there was a group of workers who were undervalued for reasons that included their gender, and the key word here is "value". The issue is not is there work being done by women that is the same or similar to work being done by men. The words "men and women workers" are not the words qualified by equal or comparable. The question is whether the work being done by women, or predominantly women, is remunerated at a lower level for doing work that is the same or comparable value as work done by men and women because or as a result of gender related reasons.
PN938
So we say it's sufficient to demonstrate that work of a particular value is undervalued, underpaid - for some reason the word "undervalued" seems to be one that some employers have difficulty with - paid less than it should be for gender related reasons, because if it is undervalued then it is by definition lower remuneration than others, men and women workers, would get for that work that is of a comparable value, and so it meets the jurisdictional test.
PN939
VICE PRESIDENT HATCHER: So if the award exercise has been properly carried out, that is there is no defect identifiable in the award process, how is work covered by that award capable of being said to be undervalued?
PN940
MR TAYLOR: Well, what we say this legislation is aimed at is addressing the gender pay gap, and the gender pay gap doesn't arise entirely simply because awards have got undervaluation. Some of them do, but implicit in your Honour's question is let's assume the award doesn't. You've analysed it and you're satisfied the award doesn't, and this case throws up an example of that: my client. In particular my client's case. We bring a case before you seeking to demonstrate that preschool teachers and teachers in long day care centres are being undervalued because of their gender. Teachers in those places are covered by the exact same award as teachers in primary schools and high schools who are paid significantly more, and we point to that as in and of itself as a comparison that will assist the bench to determine that the teachers in the long day care centres are undervalued.
PN941
Now, we don't seek to prove - I should stop and say that the rates of pay in the modern award are the same. Indeed long day care centre teachers are actually paid 4 per cent more, and that's because they don't get the school holidays and they have to work some additional days and so there's a slight 4 per cent differential in their favour. But that still leaves them substantially below what teachers are actually getting.
PN942
VICE PRESIDENT HATCHER: So the word "undervalued" in your submission simply means getting less than somebody else whose work is of equal or comparable value, and nothing more.
PN943
MR TAYLOR: We approach it in this three-step test, but the first step is to say are - the first step starts with what does "remuneration" mean? Once you accept, as I think all parties do, that remuneration, the word "remuneration" includes above award entitlements, then one is no longer simply identifying where people sit vis-a-vis an award. If one is going to address the gender pay gap, one has to look at the actual rates of pay, and that we say is implicit in the fact that the provision clearly requires the commission to address remuneration, not minimum rates of pay.
PN944
VICE PRESIDENT HATCHER: I think that's accepted, but I'm just trying to understand the way in which you use the word "undervalued". It's not a word which appears in the Act.
PN945
MR TAYLOR: No.
PN946
VICE PRESIDENT HATCHER: As I understand the logic of your submission, if an occupation or a group or a profession or whatever is receiving less remuneration than some other group which does work of equal or comparable value, that constitutes undervaluation by itself.
PN947
MR TAYLOR: It does. You're right. That is, it is undervalued. That assumes, and there is an assumption there, that the comparison point there is properly valued, and there is the prospect that that - you've picked an incredibly small sub-group which is wildly overvalued, but you need as an applicant to satisfy the first step, that you have a group of workers who are undervalued, and ordinarily that will involve some level of comparison and, as identified, our application proceeds on the basis of a comparison to other teachers who have already been assessed as having the same work values, there's no doubt about whether the work value is comparable, who are paid considerably more.
PN948
We also identify that our clients are all professionals, and we can compare them to professionals in other industries who have similar levels of educational requirements and ongoing training requirements who are paid considerably more, and so there is points of comparison but, as Ms Howell said, the legislation doesn't require at the outset a strict comparison. What the full bench did in the first SACS case, identify undervaluation as the first step to meet the jurisdictional threshold, was with respect correct. They did not need to identify at that first step the precise dollar figure. That is something that we say does of course need to be done. It occurs at the third step, and I'll come to the third step.
PN949
But the employers say, "Well, it's very hard to ascertain in any particular case the extent to which undervaluation is due to gender at this first step." That is correct. It can be very difficult, but that's not a reason to stop at the point where having identified that there is undervaluation due to gender, it is difficult to work out quite how much of it is due to gender. The commission having satisfied itself that there is a group of workers, to use the definition, whose remuneration is less than that which would be paid to others doing work of similar value which, your Honour, we say is undervaluation, then the jurisdictional threshold is met. The commission then must take two more steps. The first of those two steps is to decide whether or not to make an order.
PN950
VICE PRESIDENT HATCHER: If you could just pause there. You use the phrase "due to gender". Is that in the first step, or in the second and third steps?
PN951
MR TAYLOR: The first step.
PN952
VICE PRESIDENT HATCHER: So how do you work out it's due to gender in the first step?
PN953
MR TAYLOR: Well, it is a matter for the applicant to prove that, and they might prove it a variety of different ways. They might well take a male comparator group. We say that the indicia approach is one that will assist the commission to come to that view. But it is a view the commission will need to come to one way or the other. There is no hard and fast rule that there's only one way it can be done, but the commission would need to be satisfied that there is a group of workers who are not being paid the amount that is appropriate for that value of work for reasons related to gender.
PN954
VICE PRESIDENT HATCHER: What words in the section give rise to this jurisdictional requirement due to gender?
PN955
MR TAYLOR: There are no - - -
PN956
VICE PRESIDENT HATCHER: That's the vibe of the whole thing presumably, but I'm just struggling to find out where one gets the language if it supports that as a jurisdictional threshold.
PN957
MR TAYLOR: Ms Howell similarly said, "Well, if we were dealing with this in a vacuum then one would be saying well it might be sufficient to simply find a group of women who were being paid less than a group of men, that's all you need. You don't need to say it's because of gender." But we say that when one understands from the title of the part, from the history of the legislation, from the expression "men and women workers", it is clear that the intention of the part is to address inequality of remuneration between group of - that arises because of gender, and I accept, your Honour, those words "because of gender" are not there and strictly I shouldn't say "because of gender" but rather for reasons that are related to gender, which is not necessarily the same thing.
PN958
Yes. Ms Andelman reminds me that in the ER report at page 105 there is a discussion of undervaluation. Your Honour the Vice President asked me what we understand by that expression. We move off the basis that what is put there at page 105 is a proper basis for understanding why the legislation gives rise to a concept of undervaluation.
PN959
Harrison SDP at one point asked Ms Howell how it is that an applicant can or should demonstrate that there is no appropriate male comparator group. We say this falls into an area of evidentiary choice for the applicant. There's no onus the Act requires for them to first prove that there is or isn't a male comparator group. There may well be one that they choose not to adopt at their own risk presumably, but it is not a matter for an applicant to first prove that there isn't one, we say, contrary to submissions of other parties which say one can only go outside of the male comparator group if you have satisfied the commission that there isn't a suitable one. We can't find those words in the legislation that would require that approach and we do not accept it.
PN960
VICE PRESIDENT HATCHER: Presumably even if the applicant doesn't rely upon a male comparator, it would be open to the respondent to mount a case in reply which does rely upon a male comparator.
PN961
MR TAYLOR: Indeed. One can readily imagine the capacity for parties to identify a series of comparators and disagree as to whether they were appropriate comparators or not. This is relevant, we say, at the third stage and a reason why at the third step one is determining a rate which equates to the proper value. If you take any particular subgroup, how can you be satisfied that the remuneration that's required by section 302(1) to be equal, is equal to male workers across the board as against a particular slice, and we say you can be so satisfied if you take the approach that we suggest is the appropriate one and actually try and determine the actual rate that reflects the work value at work shorn of the market rates.
PN962
Can I just pause and just deal with the second step first and then come back to that third step. The second step, as the full bench in the SACS number 1 case identified, there is a necessary second step contrary to the submissions that were urged by the applicants in that case, that one doesn't move simply from a finding that there's a group of workers who are undervalued for gender related reasons to the order, the commission must exercise the discretion.
PN963
It's important, we say, to understand what that discretion is and what it isn't. What it is, is a discretion to make or not make an order. In exercising that discretion, which is the second step, the commission is required to take certain things into account by the legislation, they are the matters set out in section 578, the objects of the Act, equity, good conscience, the substantial merits of the case, and matters including the need to respect and value diversity in the workforce and to prevent and eliminate discrimination, as well as the requirement in section 302 subsection (4), any relevant orders and determinations made by the commission in annual wage reviews.
PN964
As to that, our approach is to date there is no orders or determinations made by the commission in annual wage reviews that would be relevant, but the Act would require the commission on each case to turn their mind to whether there are, and to give consideration to them if they exist. Now, I have put in the word "relevant", it isn't in the Act, but we say that if there is an order or determination that has nothing to say on the subject, then the commission would not trouble itself in suggesting that that has something to say in respect of the question of whether an order should be made.
PN965
There are also a range of potential discretionary issues that will arise at the point where the commission is deciding whether to make an order or not, and without wishing to embrace for a moment the employer submission that incapacity to pay is a significant factor, we accept that such arguments will be considered by the commission at this point as to whether to make an order or not. But the discretion does not extend to the question of whether having decided to make an order the order falls short of ensuring equal remuneration and that is simply because of the way the section is drafted. Victoria says - - -
PN966
JUSTICE ROSS: Does that mean that on incapacity grounds you may make no order, but you can't make a partial order?
PN967
MR TAYLOR: Exactly. That is precisely the point. You cannot make a partial order.
PN968
JUSTICE ROSS: It seems like an odd outcome.
PN969
MR TAYLOR: That's the outcome that the legislation urges. It wants the gender pay gap removed, not partially removed, as employers would seem to think should be done, this idea that you have got to maintain some gap for bargaining purposes is entirely contrary to what the section says.
PN970
JUSTICE ROSS: How does that assist in remedying what is said to be the mischief. If the mischief is the pay equity gap, in broad terms, if that's what's said, then a construction which says it's an all or nothing proposition, how does that sit with - you say that even giving full effect to the mischief, the beneficial construction, we're stuck with the words, and the words say, "It's either you grant the remedy in full, or you don't grant it at all."
PN971
MR TAYLOR: It addresses it, because it - true it is that the purpose of the commission in that binary position where it might not address the gender pay gap at all because of factors which it considers so overwhelming, we find it hard to imagine a case where the commission having found a gender pay gap would think as a matter of discretion it should make no order - - -
PN972
JUSTICE ROSS: Incapacity might be a case.
PN973
MR TAYLOR: Yes. But we say that you cannot get away from the terms which say that having decided to make an order, the order must be - is such order as it considers appropriate to ensure that there will be equal remuneration. It's very hard to read the word "ensure" as providing for some discretion that stops short of actual equal remuneration.
PN974
VICE PRESIDENT HATCHER: So does it follow from that, that contrary to Ms Howell's submissions, there can't be discounting for anything?
PN975
MR TAYLOR: No. Ms Howell's submissions and ours are on all fours. The discounting - it's not an expression we embrace - but that approach of taking into account matters which might lead the commission to set a rate above what is actually the fair - sorry, the actual work value, the actual rate reflecting work value, does come in at step 3.
PN976
JUSTICE ROSS: Does it come in earlier though? It comes in at the undervaluation step in your analysis, doesn't it? That's as I understood Ms Howell's submission.
PN977
MR TAYLOR: There is a need to demonstrate undervaluation. There isn't a need to demonstrate the exact dollar figure at the first step, but you do need to establish undervaluation.
PN978
JUSTICE ROSS: When you come to the step, however one characterises it, at which you determine the extent of undervaluation or the extent of the issue that needs to be rectified by an order, in determining that extent, that's the point at which - however one phrases it - you discount or, on Ms Howell's submission, you confine the analysis to the factors that go to the intrinsic value of the work.
PN979
MR TAYLOR: Yes.
PN980
JUSTICE ROSS: That's the point at which you do that, not the discretion and the framing of the order. Subsection (5) is a curiously structured provision. It uses the word "may" and then sets out the jurisdictional prerequisite.
PN981
MR TAYLOR: The word "may", your Honour, is also found at the outset of the section which, as Victoria says, provides a power not a duty. We say there's somewhat of a mixture. It provides a power to make an order, but having decided to make an order it must be an order that ensures there will be equal remuneration. That's how we say it should be read, and indeed that's how the full bench in the SACS case, as we read it, would similarly suggest it should be read. I can't turn the paragraph numbers up directly.
PN982
JUSTICE ROSS: Yes. the language at 303(1), that's what you're taking us to.
PN983
MR TAYLOR: 302(1), yes.
PN984
JUSTICE ROSS: Yes.
PN985
MR TAYLOR: When it comes to the form of the order, whether it should be phased in, whether it should be an order that effects the award rate directly by varying the award or sits above the award, whether it's an order directed in a particular way to specific individuals or in some broader sense, they are all things within the discretion of the commission as long as the commission, by whatever order it considers appropriate, ensures that the totality of the wage gap is removed. It could be done over time, but the totality must be removed.
PN986
The relevant paragraph from the full bench decision in SACS, the first case, is paragraph 227, in particular, the last sentence where the full bench said:
PN987
But if an order is to be made, the tribunal is required to be satisfied that for the employees concerned the order will lead to equal remuneration for work of equal or comparative value.
PN988
We say that they were expressly embracing the notion that it's not some partial gap that's closed but the totality of it.
PN989
VICE PRESIDENT HATCHER: So if the function is to close the gap, what does intrinsic value have to do with it? There seems to me a confusion of two different concepts. One is simply closing a pay gap between two groups, occupations, professions, whatever, which pay different rates but have the same value, and that seems to be confused with a separate concept from award making where you set an award rate which reflects intrinsic value of the work being performed. It seems to me they're two quite different concepts.
PN990
MR TAYLOR: We say that at the award setting level, whether it's the federal tribunal setting an award rate that is the minimum rate that reflects the work value, whether it's a state tribunal that by its award sets a rate which reflects the proper work value, and which I might interpose traditionally it was quite common for state award rates to be above the federal award rates yet both of those rates reflected the proper work value. It's not the case that any dollar amount above a federal award isn't reflecting work value, it's a market rate. It's not the case that all state awards have a market rate component in them. They reflected the work value.
PN991
Now, it is difficult. I'm not suggesting otherwise. It will be difficult to the third step to identify what is the appropriate rate to properly reflect the value of that work to ensure a rate of pay that has shorn agenda of undervaluation, that is also shorn of issues such as shortage that might have inflated a particular group. That is not an easy task, but it is a task the legislature has said that this body is the place, if anyone is going to do it, this body is going to be able to do it.
PN992
That is the task that has been given, but we say it's not, you can't suggest that teachers at primary schools and high schools who are getting thousands of dollars more per year for work that is valued the same, are getting market rates, and are being paid well above their worth. Certainly my client would have great difficulty with a suggestion that they're getting paid a dollar more than they're worth. They are getting an actual rate that reflects worth, and the teachers in pre-schools and long day care centres are getting undervalued for the work they're doing because they are not being paid more than the minimum under the award. That doesn't require us to satisfy you that the award rate is undervalued. It requires us to satisfy you that this group of workers are undervalued when compared to others who have work of the same value.
PN993
VICE PRESIDENT HATCHER: That analysis suggests the answer is simply to close the gap. Why do we need to consider more than that?
PN994
MR TAYLOR: It is necessary to close the gap. You need to close the gap across - you need to do so in a manner which is capable of the commission being satisfied is equal remuneration for work of that boundary. We actually depart - we accept we depart from the full bench majority in SACS number 2 who took at this point an approach of saying, "Well, there is a gap. Now, how much of that is due to gender." We say that that is an available approach. It's not one the legislation says can't be done, but we say as a matter of discretion as to choosing what's the best approach, it's not the best approach.
PN995
It carries with it risk that you will discount the factors like funding arrangements or bargaining that are actually tied up with gender and you might then still end up with a rate of pay that's not reflecting the value of the work for gender purposes, and that's why we urge upon the commission something more along the lines of a traditional work value exercise of saying, "This work is worth this amount of money," albeit we have to make a comparison at this point with other rates that are being found in industry for doing work of comparable value and that will close the gap.
PN996
Because if you just take a sliver of employees, particular male comparison group as is urged upon us, that male comparison group might not be - you might end up with an order that closes that gap, but that gap might not be the whole gap, or it might be more than the gap for men and women workers generally and you want to be satisfied that you come up with a rate of pay that provides equal remuneration for those workers, you've removed entirely the gender pay gap for that particular group of workers, and to only do so by a sliver of the male workforce runs a risk, and it's a risk that is avoided by actually setting a rate which reflects the proper work value.
PN997
JUSTICE ROSS: Mr Taylor, at some point your submissions I'd like you to return to this issue about where you depart from the SACS case in relation to the gap and how much is due to gender, take us to the bit in the case and why you say we should adopt a different view.
PN998
MR TAYLOR: Let me deal with two other issues as quickly as I can and then deal with matter after lunch if that's convenient.
PN999
JUSTICE ROSS: Certainly.
PN1000
MR TAYLOR: The first thing I wanted to address was to return to the submission made by ABL that one needs to depart from previous state decisions. Can we just note that the Queensland legislation enacted in 1999 in sections 59, 60 and 62, used language which is on all fours the language adopted by the 2009 federal Act. So one finds there in section 59 of the 1999 Queensland Act that the expression "Equal remuneration for work of equal or comparable value," being defined to mean equal remuneration for men and women employees for work of equal or comparable value.
PN1001
JUSTICE ROSS: Is there a convenient place we can turn that up?
PN1002
MR TAYLOR: I tell you where I found it, your Honour, in the submissions of Ms Doyle made to the SACS number 1 case which is available through the web site. It's the first state Victorian decision.
PN1003
JUSTICE ROSS: Can't we just get it printed out.
PN1004
MR TAYLOR: Of course. I'm sure your Honours will be able to find it otherwise, but in those submissions - - -
PN1005
JUSTICE ROSS: I'm all for making you do the work, Mr Taylor.
PN1006
MR TAYLOR: Yes, of course. We'll provide it to you. We'll have no difficulty providing to you those sections, and which also in section 60 subsection (1) required an order if it considers appropriate to ensure employees covered by the order received equal remuneration for work of equal or comparable value, and in section 62 have the same threshold requirement in section 302 subsection (5). So it would appear, we say, that the 2009 federal legislation is something which, at the very least, follows the Queensland model, if not actually modelled on it.
PN1007
The Queensland SACS decision was not determined until after 2009, but well before 2009 Queensland's commission had adopted the principles that flow from its legislation and we say that this commission can accordingly draw some comfort from the fact that legislation enacted by the federal parliament in 2009 was enacted in circumstances where it would have known that legislation in those terms is going to lead to principles in the terms adopted by the Queensland commission and that there is accordingly, contrary to the suggestion that one disregards state decisions as being under different legislation, indeed to the contrary, there's actually some comfort that can be gained from examining those provisions in the context of the legislative history.
PN1008
The other point I wanted to address and the last point other than the one the President raised with me, arises in the context of the issue that was raised by the President with Ms Howell about how other parts of the Act are said by the employers to have to be read in a manner to ensure that this part is harmonious with them and, in particular, the arguments that the rest of the Act is an Act which requires minimum conditions overplayed by enterprise agreements, so one has got to interpret this in a manner that's harmonious to that.
PN1009
JUSTICE ROSS: Perhaps you might come to that at 2.15. Can I also just alert you to a question. In your initial submissions at paragraph 98, this is the adequate alternative remedy issue. Your starting proposition is that for there to be an adequate alternative remedy, there needs to be a right created by statute which an applicant can enforce to bring about the same result. I want you to develop that relationship between the remedy and the statutory right point, and I raise it because I'm interested in the views of the other parties as well about that proposition.
PN1010
SENIOR DEPUTY PRESIDENT HARRISON: May I also raise a question about at what of your three stages incapacity to pay may be a relevant fact or consideration. I had understood it would be at stage 2. Now, if that's the case, at stage 2, you don't know what the value of the gap is but you know it's there, I'm just wondering then how that all works in a practical way, and if you can't then look at it in 3, well, where do you actually figure out how much money is necessary to address the gap and so you can then address whether an incapacity to pay case is a meritorious case.
PN1011
JUSTICE ROSS: Right. 2.15.
<LUNCHEON ADJOURNMENT [1.01PM]
<RESUMED [2.16PM]
PN1012
JUSTICE ROSS: Just before you launch off, Mr Taylor, I should indicate that the video-link to Perth is gone, but we've been advised by CCIWA that they did not intend to make any oral submissions and relied on their written submission in any event. I think that's (indistinct) anything else? No?
PN1013
MR TAYLOR: Thank you, your Honours. I was identifying, at the time we broke for lunch, a provision that the employers had put that one needs to read Part 2-7 in the context of the act as a whole, which otherwise provides minimum conditions overlaid by enterprise bargaining, and the submission that they put that that approach otherwise taken by the act should inform in some way an approach to Part 2-7. There's no doubt that Part 2-7 takes a different approach, in that it provides a power to set actual rates of remuneration, not minimum rates of remuneration. It's a different approach. It's an intentionally different approach.
PN1014
We adopt the submission put by Ms Howell that this part would be seen as a leading provision, to use the expression, a provision which is intentionally intended to override and sit on top of other provisions. There are two legislative provisions which assist to come to that conclusion. The first is subsection (1) of section 302, which places, we say, an obligation on the commission, having decided to make an order at all, to make an order which requires equal remuneration, with that word "remuneration" used in its broad sense, that all parties adopt. It's a provision which makes clear an intention that the commission is not being given a discretion to maintain a safety net or a minimum rate subject to enterprise bargaining, but rather it's to completely address the undervaluation.
PN1015
The second legislative provision which makes it clear that this is a leading provision is section 306. That is the provision which makes clear that an order made under Part 2-7 overrides all other orders, awards, or enterprise agreements. That extends, clearly, to enterprise agreements made after an ERO is made. So one can distinguish that, for example, from the provisions that deal with the high income guarantee, where an employee can enter into such an arrangement that if an enterprise agreement is made, it then overrides the provision. Here is an intention that this order will override everything, including a later-made enterprise agreement.
PN1016
That points, we say, to a clear legislative intention that the removal of gender based undervaluation is the pre-eminent consideration intended to override what would otherwise be an object of the act to encourage collective bargaining, to encourage enterprise bargaining. Where the commission identifies there is undervaluation based on gender, that is the pre-eminent consideration that must be then dealt with, and there is no capacity, we say, for the commission to in a sense reserve the margin for future enterprise bargaining.
PN1017
VICE PRESIDENT HATCHER: I want to check this: does the better off overall test make any reference to equal remuneration orders?
PN1018
JUSTICE ROSS: I don't think so. I think one of the submissions canvasses that.
PN1019
MR TAYLOR: Yes. It's not something I've looked at, but I think the president is right in saying it doesn't. But given that the order would override any such enterprise agreement, that might be the reason why it doesn't need to. We also make the point that, given that the purpose and the clear legislative intent to address the gender pay gap, the commission would never, we say, proceed on the basis that the parliament intended the commission, having determined that there are a group of workers who are being underpaid because of reasons related to their gender, to permit that to continue. That relates to this issue that Harrison SDP raised with me as to when one considers the issue of incapacity to pay.
PN1020
We have identified three steps, but we're not suggesting that in any particular case there will be three cases. It happened to be in the SACS case that they finished step 1 and then asked the parties for further submissions. That was seen as appropriate in that case. But ordinarily, steps 2 and 3, whether to make an order at all, and if so, the quantum, will be heard together, and inevitably, any argument about incapacity to pay will arise as part of the consideration of what we would suggest would be steps both 2 and 3. Clearly the two are linked. If the commission determines a particular amount is an amount necessary to ensure equal remuneration, what that amount is will impact upon whether incapacity to pay is an argument of any force.
PN1021
We have to say, though, certainly my clients are of the view that it's very hard to imagine that any circumstance where the commission will determine that there are a group of workers who are being underpaid for reasons related to their gender, and that it is appropriate to make no order, but to rather allow that to continue, in circumstances where there is a capacity to phase in changes. While there is an obligation to remove that gender pay gap, it doesn't have to be done overnight, and if the incapacity to pay argument had any force, we can't imagine it would have force once you've taken into account the capacity to phase these things over time, and to the extent to which it had force, it would impact upon how long the phasing period is. We, for our part, find it hard to imagine it would lead to a position where the commission would think no order at all should be granted.
PN1022
VICE PRESIDENT HATCHER: What about a situation where it's private providers that rely substantially or wholly on government funding over which they have no control?
PN1023
MR TAYLOR: Yes. It's an argument that's often been run in work value cases, where employers who, based on funding, identify that even if the work value has increased, they still don't have the capacity to pay. The commission has taken those things into account, but usually proceeds on the basis that it is appropriate to require, in this case, gender undervaluation to be removed, perhaps phased in over time, and that the private provider and the funder will then have to grapple with the consequences of that position, and by phasing it in, that can then be dealt with. But the thought that an employer can say, "Well, because our funding has been routinely based on what it costs to run our business, which in turn is based on the fact that we are, you have so found, undervaluing our employees because of their gender, we should be allowed to continue," is sufficiently a difficulty of thinking the commission would never accept.
PN1024
VICE PRESIDENT HATCHER: Well, except that the Commonwealth might simply appear before us and say, "We are not going to fund this." Are we allowed to take them at their word, or take the chance that they might not (indistinct)
PN1025
MR TAYLOR: I accept that hypothetical possibility, and I say that the commission in that situation would then have to determine - step 2, whether it's going to make an order at all, is one of the relevant factors. But for any government - and I don't suggest this is a submission that we've read so far from any of the governments at the bar table - for any government to say, "We will not fund sufficient to ensure that people are not being underpaid for their gender," seems an unlikely position for a government to take. But hypothetically I can imagine it's possible, and then the commission would have to grapple with that situation.
PN1026
Your Honour the President asked me to address something I said about the approach we take to step 3, an approach of determining what is a rate of remuneration which reflects the actual value of the work, that that differed from the approach taken by the full bench in the SACS cases, and asked me to identify exactly how that difference arises by reference to the decision. Can I say from the outset that perhaps it would have been better or more accurate if I had said that the approach that we suggest that this commission will adopt is one that is different to the approach urged upon the full bench and the majority by the parties. The parties asked the commission to proceed on the basis that there was a gap between SACS workers and rates found in state and local government, and that the appropriate approach was to then identify how much of that gap related to gender, and they relied on expert testimony to try and establish that.
PN1027
As I said before lunch, the bench adopted that approach, it adopted that approach in circumstances where we don't suggest (indistinct) available as a potential approach that met the statutory test. We say it has risks attached to it. Having accepted the approach that the parties asked it to take, at paragraphs 62 and 63 of the second decision, which is found at volume 208 of the industrial reports from 446 - (2012) FWAFB 1000 is the initial citation - in that second decision at paragraphs 62 and 63, the full bench identified reservations about the methods that were proposed to be used in what was referred to as the joint submission, and one finds the word "reservations" both in the very first sentence of paragraph 62 and the very last sentence of paragraph 63. It identified reservations, and yet ultimately chose to apply that approach of taking the gap and then seeking to identify how much of that gap was based on gender.
PN1028
We, for our part, suggest a better approach, one that does not run the risk of discounting matters which are themselves bound up with gender, is to take an approach of firstly determining, at step 1, that there is a group of worker who are undervalued, and then seeking to determine what is an appropriate remuneration if one takes that work value to determine what is an actual amount of remuneration that should be awarded, without this discounting approach, without starting with a gap and discounting. Because there are risks not only of discounting for features bound up with gender, but it tends to take one into an area where one starts getting caught up with causation and trying to identify precisely how it has come about that there is a particular gap. It is a risk that the comparison group themselves might not be properly valued.
PN1029
So we say, yes, there is something that the employers might call discounting, which means that you do take into account factors such as shortage and the like, but you come up with what is a proper, appropriate rate for the value of work, an actual rate as against the minimum award rate, and once you've done that you would then set a rate which is going to be equal to men and women doing work at that rate. You've no longer got a gender evaluation. You don't have to go into a causation analysis to try and work out how much of any particular gap has been caused by gender.
PN1030
So we don't say that the full bench - the approach there was not available to it. But it clearly was an approach which ultimately - one that troubled the commission as being the best approach, and we think for our part that we've put forward an alternative approach which improves on the one that was urged upon the commission by the parties in that case. Now, your Honour the President asked me to address paragraph 98 of our primary submissions, which dealt with adequate alternative meaning, and it was a submission that addressed paragraph 721 of the Act.
PN1031
The first thing I should say, having reread that paragraph, that the word "enforce" should perhaps have been and should be "exercise". It's an exercise of a right rather than an enforcement of a right in this case. What Part 2-7 does is provide a right for a party to make an application to obtain an order that would ensure equal remuneration for work of equal or comparable value. That is a right to make an application to entirely close what the applicants would identify as the gender pay gap in their particular workplace or industry.
PN1032
We say to be an adequate alternative remedy, there must be some other provision that would bring about that same result, because that is the way one reads, we say, section 724 subsection (1). It's only going to be such an adequate alternative remedy if it not only ensures equal remuneration for work of equal or comparative value - sorry, it must do that, it must ensure equal remuneration for work of equal or comparative value, and it's only where there's another remedy that's going to bring about that result that one is going to find it to be an adequate alternative remedy.
PN1033
Now, it's hard, in our submission we can't identify anything else in the Fair Work Act that's going to ensure - 721 subsection (b) - ensure equal remuneration for work of equal or comparable value for those employees. An application to vary the award is, given the definition of remuneration, is unlikely to ever do that unless the application is somehow only focused on award rates, and similarly enterprise bargaining is unlikely to ensure equal remuneration.
PN1034
It would appear that if there was no longer a Commonwealth, which is an adequate alternative remedy, it's going to be one found in different legislation dealing with discrimination, and perhaps the section imagines a particular individual employee who is able to bring some alternative case based on their particular facts, based on a discrimination law, which would give them the right to the equal remuneration.
PN1035
JUSTICE ROSS: I was really going to whether there's any authority for the proposition that - for there to be an adequate alternative remedy there needs to be a statutory right that can be exercised to bring about the same result. That's your position of principle.
PN1036
MR TAYLOR: I'm sorry, your Honour, maybe I didn't understand the question. That is, we say - we are effectively paraphrasing subsection (a) of 721(1). It's got to be a remedy that is found - that is a statutory remedy - it's got to be a remedy found under a law of the Commonwealth or a law of a state or territory.
PN1037
JUSTICE ROSS: And it has to bring about the same result?
PN1038
MR TAYLOR: It has to bring about the same results as what subsection (b) effectively tells us.
PN1039
VICE PRESIDENT HATCHER: Well, if the problem is one caused by a defect in the award, then there might be remedy under the Fair Work Act, alternative remedy.
PN1040
MR TAYLOR: Yes. You could identify the only remuneration that is sought to be made equal is an alteration in an award rate. Then I can conceive that there could be an argument in a particular situation that that particular remedy that's being sought, a variation to a modern award, could meet section 721. Your Honours, I'm indebted to your Honour the President's staff, notwithstanding identifying this as a matter for us to deal with.
PN1041
We've been handed over lunch an extract of the Industrial Relations Act 1999 Queensland, and in particular sections 58 and following. I think the bench now has access to that. The sections that I had identified when I was on my feet earlier as providing what would appear to be somewhat of a model, or at least a previous incarnation, of what is now Part 2-7 of the Federal Act, those sections are sections 59, 60 and 62, and one can see immediately that the language of those sections is very close to the language of Part 2-7.
PN1042
A notable difference being the opening words of section 62, which goes further and actually provides, in effect, no discretion for the commission not to make an order. It must make the order if it finds there is employees who are not receiving equal remuneration for work of equal or comparable value. So the point I was making earlier is if these provisions led to the principles that the Queensland commission adopted and those principles being adopted in 2002, that this commission can proceed on the basis that the Federal parliament, when adopting very similar provisions, had in mind that it would lead to principles or an approach of the sort reflected in that Queensland decision.
PN1043
You will have seen that in our submissions we have not only urged upon the commission that it should make principles, but we have attempted to assist in drafting principles which in many respects reflect and are modelled on those Queensland principles. Altered - the main reason for the alterations are that in Queensland like in New South Wales, the provisions were directed at award rates, and here it's directed at remuneration.
PN1044
So history of award provisions is relevant, but also more generally history of changes in remuneration is relevant. So it's a slightly different focus, and the other aspect of change is that the Federal Act has a different, similar but different objects, and we recognise that in applying any principles in any particular case the commission will of course have regard, pursuant to section 578, to the objects in the Federal Act which are not exactly the same as the ones of the Queensland Act. They were the matters that we wished to put by way of oral submissions.
PN1045
JUSTICE ROSS: Thanks, Mr Taylor. Ms Eastman?
PN1046
MS EASTMAN: Your Honour, I'll probably be very brief today. The Commonwealth's role in this issue, as we've seen in the submissions, is limited at this stage and the Commonwealth defers it's rights to more or less to what role it may ultimately take in this proceeding.
PN1047
JUSTICE ROSS: Could I invite you just to go to the lectern, only because the recording might not pick it up and those interstate may not be able to hear you.
PN1048
MS EASTMAN: It will just involve a slight shuffle.
PN1049
JUSTICE ROSS: No, that's fine.
PN1050
MS EASTMAN: I hope that's of assistance to the other parties interstate. Your Honours, what we propose to do today is to address the questions that were posed for the Commonwealth in the draft working document provided to the parties on 16 April. At page 12 of the document, there are a number of questions raised with respect to the Commonwealth's submissions on the question of the development of equal remuneration principles.
PN1051
Perhaps if I can start with those matters. So page 12 of the working document. The first question that you've asked of the Commonwealth is whether the Commonwealth is submitting that guiding principles should never be adopted and the answer to that question is no. The second question is the commission said it's implicit in our submissions that the development and application of any guiding principles would bind the commission into the future, noting the role of the commission and the extent to which the commission might follow previous decisions.
PN1052
The Commonwealth's contentions, as set out in paragraph 27 of our submission, was just to raise our concern that a court is quote, "To be adopted at a fairly early stage in the development of the equal remuneration applications." There's only been the SACS case to date and now the present application, and the Commonwealth's concern was the concern raised by the full bench in the SACS case, that that was not an appropriate vehicle in which to develop guiding principles, because it is, as they say, early days in the process.
PN1053
The Commonwealth's view is that this application may not be the appropriate application to development guiding principles. It may well be that the consideration of matters on a case by case basis would allow the principles to develop over time and that there may reach a point in time where the development of guiding principles - and we assume on the former principles perhaps developed in Queensland and in New South Wales might be appropriate.
PN1054
But we raised our concern about the principles being binding, and I think we used the expression, "Fettering the discretion open to the commission," will be that one would expect if the commission spent a great deal of time and work in developing general principles that future parties would be expected to abide by such guiding principles, and in that respect (indistinct) indicated a concern about the commission developing principles that might be, by expectation, binding on the current case.
PN1055
JUSTICE ROSS: But they're not binding.
PN1056
MS EASTMAN: No, but - - -
PN1057
JUSTICE ROSS: In no legal sense would it - if it would in fact fetter the discretion, it may be an error. There's no prospect that principles fetter the commission's discretion of a subsequent case, at least not at full bench level.
PN1058
MS EASTMAN: I agree, your Honour. Our concern was also the somewhat abstract nature in which this question is being posed at this stage. One only needs to look at the 1969 and 1972 cases to see that the initial approach in early days in 1969 was to develop a principle, but by 1972 the view was that it might need to be a little broader. All the Commonwealth says is that a cautious approach should be adopted and it may be too early or premature at this stage to adopt a set of guiding principles.
PN1059
JUSTICE ROSS: I suppose the risk you run in not providing guidance is inconsistency, and there will be different outcomes at first instance level and - how is that a desirable path?
PN1060
MS EASTMAN: It's not desirable at all, but one would hope that on a case by case basis, as the question of proper construction of section 302 is considered by full benches, that the guidance would come out of decisions made by the tribunal from time to time rather than fixing them as a sort of set of checklists, and our concern is that it's not just a matter of ticking boxes or having a checklist that would, in a sense, answer the way in which section 302 might apply. That - - -
PN1061
VICE PRESIDENT HATCHER: Well, principles might fall into two categories. The first might be resolving any issues of interpretation of part 2.7, and the second may be providing guidance as to the exercise of the discretion, to the extent there is a discretion. Why shouldn't we at least do the first, that is, to the extent that there's differences in the interpretation of the visions, it's best views as to how they should be properly interpreted.
PN1062
MS EASTMAN: Well, on one view, your Honour, that task of the proper construction and interpretation of the provisions in Part 2-7 doesn't necessarily need the development of principles to achieve a proper interpretation. We had read on the Commonwealth side all of the respective parties to have slightly different views as to what principles might achieve, and in addition to the two matters that your Honour has identified there might be a third, and that seems to be the need for a consistent and coherent approach which I think is the question raised in number 4 about the Victorian government's submission.
PN1063
That seemed to be a very laudable objective and in our submissions we've indicated that perhaps that objective can be achieved by good, perhaps, tight case management of applications of this kind. Because the provision of evidence, the order in which the parties might present their evidence, the order in which matters might be dealt with, whether expert witnesses go first or second; those things might have quite a significant bearing on the way in which an application might be considered, and those are matters where each case should be determined on the merits of a particular case, taking into account the issues that the parties wish to raise and the manner in which the matters could be determined in an orderly, efficient manner.
PN1064
VICE PRESIDENT HATCHER: Well, the issue might intersect with proper case management. For example, if there were no principles, a party might present extensive evidence based upon the notion of there needs to be a male comparator, only to find at the end of the day that it was totally unnecessary. That's the sort of potential guidance, for case management purposes at least, that the principles could provide.
PN1065
MS EASTMAN: It may be. At this stage I think the Commonwealth's concern is that we're dealing with the question in abstract. That leads to the third question and - - -
PN1066
JUSTICE ROSS: Well, not really. The male comparator question arises on construction.
PN1067
MS EASTMAN: Well, we've dealt with this - and perhaps I can deal with one issue that I wanted to raise in terms of a point raised by both of the applicants today - it is not the Commonwealth's submission that there does not need to be a male comparator. I think there might have been perhaps a misapprehension on the reading of paragraph 43 of our submission, and so I'll make it abundantly plain, the Commonwealth's - - -
PN1068
JUSTICE ROSS: So if we take out the negatives, there has to be a male comparator?
PN1069
MS EASTMAN: That's right, there has to be a male comparator.
PN1070
JUSTICE ROSS: Okay, thank you.
PN1071
MS EASTMAN: Paragraph 43 of our submission was leaving open that there may be an occasion where an Equal Remuneration Application Report with respect to men seeking equal remuneration with respect to women, and so it may well be that with respect to our learned friends that they have misconstrued our submission as leaving open the possibility of a straight comparison between women workers. That wasn't the Commonwealth's intention. The Commonwealth's submissions are that a male comparator is a necessary component. But - - -
PN1072
JUSTICE ROSS: To that extent, we should not follow the SACS decision.
PN1073
MS EASTMAN: No. But we think - it's a matter we've dealt with in our own submissions, I don't wish to say anything more. I'll leave it at that, your Honour, today. Coming back to the questions, the commission has asked what alternate methodology the Commonwealth is advancing. We don't have an alternate methodology in terms of saying, in the absence of the development of the guiding principles, this is what we submit the commission should do.
PN1074
Our position I hope is clear, that effective case management principles will assist in achieving what Victoria identifies as coherency and consistency in decision-making. But ultimately, the question of an alternate methodology is not a matter that the Commonwealth wishes to be heard on, and I hope I've been addressing those matters that I've dealt with question 4 which is our response to the Victorian minister's submissions.
PN1075
I think then the only other matter that the commission has raised is the question with respect to issue 2 on page 28 of the commission's draft document, and that is a question posed generally to all parties with respect to the concept of remuneration, and the commission has asked whether all parties accept the characterisation advanced by United Voice and AEU, and the Commonwealth's answer to that question is yes. Those are the only matters that I wish to be heard on.
PN1076
JUSTICE ROSS: Does the Commonwealth agree with the State of Victoria and the applicants that Part 2-7 is beneficial legislation - - -
PN1077
MS EASTMAN: Yes, it does.
PN1078
JUSTICE ROSS: - - - and it should be construed liberally?
PN1079
MS EASTMAN: Yes. But, as your Honour has already observed, liberal interpretation does not mean substituting the text and the plain words is that a beneficial construction is one that is open, but it doesn't involve a substitution of the legislative text.
PN1080
JUSTICE ROSS: Can I take you to paragraph 18 of your submission? This raises the comparable value point, and this may be something you want to take on notice, Ms Eastman, because it also may be something the other parties - we might provide them with an opportunity to say something about. This issue about what does comparable value add to the proposition, look in a different context that issue was addressed in the private hospitals case by the full bench there, and that's at [1986] 18 Industrial Reports 455. There the commission was being urged to effectively amend the then equal pay principles to add the notion of comparable work or comparable value, and at page 461 about halfway down the page the full bench expresses a view about what this idea of comparable work would add to the concept. They say:
PN1081
At its widest comparable worth is capable of being applied to any classification regarded as having been improperly valued without limitation on the kind of classification to which it is applied, with no requirement that the work performed is related or similar. It is capable of being applied to work which is essentially or usually performed by males, as well as to work which is essentially or usually performed by females. Such an approach would strike at the heart of long accepted methods of wage fixation in this country.
PN1082
Et cetera. So they're painting a picture of a particular scope of operation of these words, and I'd invite you either now or by all means take it on notice because I'll be providing that opportunity to everybody else, and perhaps if anyone wants to avail themselves of that opportunity they can do so by 4 o'clock next Wednesday, that's Wednesday of next week. Anyone needs more time just make application. But it's a relatively short point. But that's as far as I can tell the only place where there's an exposition of what this difference in language might mean. All the parties refer to it as being a point of difference between this legislative framework and the predecessor's, and then rely on that to advance their submissions. But I'm interested in what the Commonwealth and the other parties say comparable value adds.
PN1083
MS EASTMAN: Your Honour, we've dealt with that question very briefly at paragraphs 32 to 35 of those written submissions, but I'll avail myself of the opportunity to look carefully at the decision and perhaps we can provide the full bench with a short written submission addressing the application of that case, the matters considered by the bench in that case, to the meaning of comparable value for the purpose of section 302.
PN1084
JUSTICE ROSS: Thank you. Can I take you to paragraph 45 of your written submissions, the first one? It's the reference here to the identified date point and the change in work value. Are you suggesting that that's necessary in the Part 2-7 task? Why would we need to look at a particular datum point? Aren't we really - on your submission we would be doing a comparison at a point in time, but why does it matter what the datum point might be?
PN1085
MS EASTMAN: I think, your Honour, at a high level of generality it might depend on the circumstances of the particular case, and my recollection in the New South Wales pay equity inquiry was a concern to identify a relevant temporal period so that the inquiry was not directed to wholly historical matters as to what might have been reasons or causes of undervaluation in the past. I think the language used in the Act is one of present tense rather than past tense. I think we were trying to reflect those concerns, but it would be a matter for the parties to work out whether or not an examination of historical factors was at all relevant to the assessment of any gender undervaluation, and what circumstances might exist for a particular sector or industry might have a bearing on what date or what period of time one starts that assessment.
PN1086
JUSTICE ROSS: So it's not a jurisdictional issue, it's a contextual one.
PN1087
MS EASTMAN: I agree, yes.
PN1088
JUSTICE ROSS: Yes, okay. Can I take you to paragraph 52?
PN1089
MS EASTMAN: This might touch on your Honour's question earlier today about the relevance of considering modern awards.
PN1090
JUSTICE ROSS: Well, two things. There's that one, and the second is the adequate alternative remedy point.
PN1091
MS EASTMAN: In terms of the relevance of modern awards, your Honour will see that we have raised the reference to modern awards as one factor that might be taken into account in considering an alternative remedy for the matters that your Honour Hatcher J has indicated earlier in exchanges with Mr Taylor. I think we also say that looking at section 302(4)(a) and (b) that the consideration of the annual wages review might necessarily take one to consideration of modern awards. So it's only one factor.
PN1092
As to the existence of an adequate alternate remedy, there is nothing, your Honour, that the Commonwealth wish to add in addition to the matters that are set out there in the written submissions. If there is any particular matters that your Honour would like us to perhaps consider and take some further instructions, then I can provide a short note for next Wednesday on those matters as well.
PN1093
JUSTICE ROSS: Well, do you agree with the proposition - the exchange with Mr Taylor, the proposition that to be an adequate alternative remedy it has to be a statutory right which you can access which would provide the same outcome?
PN1094
MS EASTMAN: Looking at the language of section 721 and the reference to a Commonwealth or state law, that would rather point to the existence of a relevant statutory remedy, but I think, and subject to confirming any instructions of the Commonwealth on this proposition, the Commonwealth wouldn't go so far to say that it must be the same remedy. The language used there is an adequate alternative remedy and that there may be a range of remedies that don't necessarily result in something that looks like an equal remuneration order that may in a sense remedy the mischief to which the section is directed.
PN1095
JUSTICE ROSS: It may not look like an equal remuneration order, but does it have to have the same outcome? That is, that it rectifies the undervaluation.
PN1096
MS EASTMAN: Your Honour, that would be a matter that I would like an opportunity to take some instructions on.
PN1097
JUSTICE ROSS: That's fine.
PN1098
MS EASTMAN: But just standing here there have been examples used, for example in the state and federal discrimination laws, where the question of remedy to deal with discrimination based on single expert in a pay equity context has resulted in a remedy for the complainant. The nature of that remedy is very different to an equal remuneration order. It might be a remedy that's a one-off remedy so that there - the case I'm thinking of was a lump sum type payment to the aggrieved complainants to redress a historical disadvantage.
PN1099
But in the application of Part 2-7 one is really looking at a remedy into the future. The language of Part 2-7, particularly 302(1), is that the commission must ensure equal remuneration, and so that expression "ensure" has got some work to do which may inform the question of what is an adequate alternative remedy as to whether one is looking at a remedy to address a past pay inequity, or whether one is looking at a remedy that's comparable to deal with remedy in equity into the future. Your Honour, could we give some further consideration - - -
PN1100
JUSTICE ROSS: No, no. Certainly.
PN1101
MS EASTMAN: - - - to that question and perhaps provide the bench with some relevant authorities - - -
PN1102
JUSTICE ROSS: Certainly.
PN1103
MS EASTMAN: - - - from the discrimination jurisdiction that might assist on a consideration of that question?
PN1104
JUSTICE ROSS: No, no. Certainly. Look, it would also assist, there's a suggestion in some of the submissions that it falls to the applicants to bear the burden and satisfy us that there is no adequate alternative remedy. I would seek the Commonwealth's views as to that proposition.
PN1105
MS EASTMAN: We'll address that, your Honour.
PN1106
JUSTICE ROSS: Thank you. At 54 and 55 you say that the incentive to enterprise bargaining of the relevant industry (indistinct) removes any incentive must be a relevant consideration. The incentive to bargain issue has been the subject of consideration in the context of annual wage review proceedings and it's a complex issue. On one view if wages are kept at the award minimum, there may be seen to be no incentive upon an employer to bargain if there is no increase on an annual basis. These arguments are usually run. The unions will advance the same argument each year, and the employers will advance the counter-argument each year, and the proposition put in the alternative is well if too big an increase is provided in annual wage proceedings, then there will be no incentive on employees to bargain.
PN1107
So I'm not sure it's necessarily a one-way street. If you move wages or you keep them the same, you may impact the incentive to bargain on a particular party. It's not that you're going to impact on it generally. Your proposition seems to be advanced on the basis that if you make an equal remuneration order, you are going to impact on the incentive to bargain, but it would only impact on the incentive to bargain in the way this proposition has usually been advanced in that it would remove the employees' incentive to bargain.
PN1108
MS EASTMAN: I think, your Honour, what we were concerned to do was to identify some practical considerations that probably have a bearing on two factors. One is the question of an adequate alternative remedy, and the other factor that it may bear on is the discretionary matters that might inform the making of an order. We, on the Commonwealth's part, were attracted to the concerns raised by Watson VP in his dissent in the SACS number 2 case and the concern that he had to have set out in paragraph 55 of the possible impact on enterprise bargaining. So I don't think we'd put it any higher than adopting the language of his Honour about the possible impact as a factor taken into account.
PN1109
My recollection is that the applicant unions in the SACS case indicated that the concerns might be overcome by the form of the order and if, for example, as there was in the SACS case, a phasing in process, the contention made by the applicant unions in that matter was that phasing in would allow the commission to have a degree of oversight and to monitor and perhaps watch whether or not any concerns about the impact on enterprise bargaining were in fact realised. So these might be matters that have some practical significance both in terms of adequate alternative remedy, but probably more so the discretionary factors, and also the nature of any order if the commission was minded to make an equal remuneration order.
PN1110
JUSTICE ROSS: I don't think his Honour was raising it as a possibility. He was making a finding that it would happen.
PN1111
MS EASTMAN: Well, we - - -
PN1112
JUSTICE ROSS: Can I take you to paragraph 119 of the second SACS decision?
PN1113
MS EASTMAN: We perhaps tempered it. Your Honour will see in paragraph 55 that I referred to a possible - - -
PN1114
JUSTICE ROSS: Yes. No. I just want to see what you - you will see in the first sentence his Honour says - - -
PN1115
MS EASTMAN: The consequence.
PN1116
JUSTICE ROSS: - - - "The consequences of this are clear. If the claim in this matter is granted, it is inevitable that there will be very little or no enterprise bargaining in the entire SACS industry for very many years, probably decades." Can you assist as to what - was there an evidentiary case put on any of that?
PN1117
MS EASTMAN: Your Honour is testing my memory.
PN1118
JUSTICE ROSS: That's something you can perhaps come back to.
PN1119
MS EASTMAN: I might come back to that in terms of just looking at if there was any evidence. I think some of the employer parties, some of whom are here in this application, might have advised a submission to that effect, but I'll just need to check that. So if I can add that to my list of matters.
PN1120
JUSTICE ROSS: Well, I was really asking about evidence rather than submission, but yes.
PN1121
MS EASTMAN: But I think there might have been - I'm trying to recall whether there was any evidence given by the four experts who were called in that case on that issue and whether there was any cross-examination, so I might just need to check - - -
PN1122
JUSTICE ROSS: No, no, no. Absolutely.
PN1123
MS EASTMAN: - - - that matter, and I can provide your Honours with some specific references to the evidence as to that matter.
PN1124
VICE PRESIDENT HATCHER: (indistinct) sector concerned had historically had little or no enterprise bargaining, the prospect of a future disincentive would weigh very slightly I - - -
PN1125
MS EASTMAN: That was a very significant factor that was taken into account in the SACS case, was the fact that there was evidence before the commission that as a sector that had had a very low union take-up or presence, and there hadn't been a strong history of any bargaining in the workplaces either because of the nature of the workplace or the manner in which they were organised. But I can turn up the evidence about that, and I certainly know one of the experts addressed that matter specifically in terms of the profile of the SACS sector. So my recollection is that that would be in the context of those matters, but I'll find you the precise references which might assist better than me trying to remember the evidence from a few years ago.
PN1126
JUSTICE ROSS: No, that's okay. Yes. Thank you, Ms Eastman.
PN1127
MS EASTMAN: Thank you, your Honour.
PN1128
MS GRAYCAR: May it please the commission, I just would like to reiterate that my instructions are that we have nothing to add to what's in the written submissions, and I understand from a comment the president made earlier that you might have some questions of New South Wales, and I'd seek the commission's indulgence to take those on notice and - - -
PN1129
JUSTICE ROSS: No, that's fine, Ms Graycar. It's not an unusual circumstance for those representing government to need to take something back. I can go through the short points I have.
PN1130
MS GRAYCAR: Thank you.
PN1131
JUSTICE ROSS: Of course if the matters that have been raised of concern, if any party wants to say anything about those, then they should take the same opportunity to do so. The first is at paragraph 18 you say, "Notably there's no specific reference to the principle of equal remuneration in the objects." Well, the question is really well it's notable, but what flows from it? What do you seek to draw from that, bearing in mind other objects talk about protecting against unfair treatment and the like which might on one view of it extend to equal remuneration. At paragraph 42 - - -
PN1132
MS GRAYCAR: Yes.
PN1133
JUSTICE ROSS: - - - New South Wales says about halfway through that paragraph, "There is no basis for discerning in the statutory text or legislative history any parliamentary intention to remove the need to undertake a comparative exercise by reference to a male comparator group." I had read that as suggesting that prior to the introduction of Part 2-7 there was a need to undertake a comparative exercise by reference to a male comparator group, and I'm struggling as to where that proposition would come from given the 72 principles make no reference to it.
PN1134
MS GRAYCAR: Yes.
PN1135
JUSTICE ROSS: The statutory test, as has been mentioned, under the Workplace Relations Act, at a point in time did, but I would have thought that if they did it expressly then and then that express requirement doesn't appear, I'm not sure how that makes good the proposition that's set out at 42, that's all.
PN1136
MS GRAYCAR: Your Honour, I can just point out at the moment that that was not intended to be a reference to any specific statutory requirement, and I think it's perhaps not expressed as clearly as it might be, but I would be happy to address that in more detail perhaps later - - -
PN1137
JUSTICE ROSS: Look, I did want to take issue with you but you wouldn't be the only one so there's probably no need to, but I can vent some frustration in the meantime. A number of the submissions referred to the need to adopt a careful and rigorous approach. Look, I'm not sure if the implication is that doing something other than Part 2-7 we can be careless and carefree, but whatever section the provision of the Act we're looking at, we're bound by the statute and I would think we would be careful in all cases. I'm not sure that a decision from us saying, "We're going to adopt a careful and rigorous approach is going to provide much guidance to anyone," but you don't need to come back to me on that one, Ms Graycar.
PN1138
MS GRAYCAR: Thank you, your Honour.
PN1139
JUSTICE ROSS: Thanks very much. The same time frame suit you? Close of business next Wednesday?
PN1140
MS GRAYCAR: Yes.
PN1141
JUSTICE ROSS: Thank you. Victoria.
PN1142
MR O'GRADY: Yes. If the commission pleases, the approach that the Victorian minister has taken for the purposes of today is to use the draft working document. No doubt a lot of care and rigour has been brought to putting that together. The starting point - I should say there are essentially four issues, really three issues, which the state of Victoria is just wishing to address on today, dealing with some issues that arise from the reply submissions of the United Voice AEU's submission and also the IEU's submission, in relation to the concept of work value. Also, secondly, submissions concerning discrimination. Thirdly, we just want to say a couple of things about the equal remuneration principles. So those are the three areas that I wish to address.
PN1143
The starting point for that is the summary document, pages 54 and 55. It's at those pages that there is the quotation from the IEU submission in relation to issue 5. Now, I think the matters that are quoted in this passage in the summary go beyond issue 5, and it's really the convenience of having it in this place that I go to this part of the document. It's really the IEU's submission that I wish to address, and it was a matter, the subject of some submissions by Mr Taylor earlier. If I can start by taking you to page 55. At about point 7 of the page you'll see there are two single line paragraphs and then the next paragraph starts, "Part 2-7: it was intended to ensure." It's that paragraph, which is paragraph 43, I think, in the IEU reply submission, and it says that, "Part 2-7 is intended to ensure that remuneration for women is lifted to a point which accurately reflects the value of their work."
PN1144
If I now take you back to the three-step process that Mr Taylor walked you through earlier, and what we say about that is that the first step in the process actually rolls up two steps, and we urge upon the commission a dissection of what is identified as step 1 into two separate steps, and it comes from the words of the legislation. If I can take you to subsection (5), because that's the starting point. We say the starting point is to identify what is work of equal or comparable value. So that's the first exercise that faces the commission in one of these cases. Is it dealing with work of equal or comparable value? It's then, once it is satisfied that it is dealing with work of equal or comparable value, that it asks the question, "Am I in a situation where there is not equal pay for that work for men and women workers?"
PN1145
Now, if I can go back. I'm just directing the commission's attention to the first step in the three-step process identified by the IEU at page 54 of the summary document. Then going over to the top of page 55, and the first paragraph which starts with the words:
PN1146
However, for the first step, a specific comparator is not essential if an applicant can demonstrate that a group of employees are receiving remuneration that is below the true value of that work for reasons which include gender-related reasons, then the commission can be satisfied that group of employees does not have equal or comparable remuneration to others including men.
PN1147
The next sentence goes on:
PN1148
That is so because generally employees do receive remuneration equal to their work value, and so any female-dominated area of work which is not being paid for their true work value is not being paid remuneration that is equal or comparable to other employees.
PN1149
Now, there is just some slippage in words there because the remuneration of course must be remuneration that is equal; not equal or comparable. It's the value of the work that must be equal or comparable, for what we say arises from this passage is too great a focus on the value of the work as the driver for the setting of the remuneration. It's the position of the Victorian minister for industrial relations that, "Yes, one does need to assess the value of work," but one only needs to do so for the purposes of identifying whether the work is of equal or comparable value. It is not from the point of view of an endeavour to set a rate of pay that accurately reflects the value of the work. That's in Part 2-3, the work value part of the Act. Just while I think of it, there is an exchange, and I'm sorry if I get the commission member wrong here, I think it was between Hatcher VP and Mr Taylor in relation to the BOOT test. I think someone on the bench said that one of the submissions identified the BOOT test. It's in paragraph 69 of the submissions of the Victorian minister.
PN1150
Another point I just note in passing is a point of statutory interpretation. The position of the Victorian minister is this: yes, it is a beneficial provision and it ought be interpreted liberally, but one must also heed the warning issued by the High Court in the Mammoet case and the citation is CFMEU v Mammoet (2013) HCA 36. That was the case concerning the issue of whether board and lodging was paid for the purposes of the strike pay provisions, and the High Court there said at paragraphs 40 to 41 and 46 - sorry, the High Court set out some principles of statutory interpretation, and whilst acknowledging the importance to attach a meaning to the words of a statutory provision which is consistent with the purpose of the provision, and which is not divorced from the context, one needs to be careful not to interpret them in a way which assumes pursuit of that purpose at all costs.
PN1151
So here we are, in part of the Act, which deals with the ability of the commission to make orders for equal pay for work of equal value. It's not that part of the Act which deals with making orders increasing award minimum rates of pay to ensure that they provide remuneration which is based on the value of the work. We further emphasise that point by drawing attention to subsection (5) of section 302, and also the definition in subsection (2) of section 302, which clearly emphasise the role of this part of the Act in ensuring that there be equal remuneration for men and women workers for work of equal and comparable value.
PN1152
If I can take the commission now to page 166 of the summary. My reason for going to this page is just to address a point which is made in the IEU reply submission which the Victorian minister says misinterprets his position in relation to this issue of work value. The IEU says that the minister contends that the making of an order does not turn on an assessment of the value of the work but on a comparison of remuneration paid to one gender compared to one remuneration paid to the other gender for work of equal or comparable value. What we say is that the issue of work value is relevant to the commission's assessment but it is relevant to that issue of making the assessment of whether particular work is work of equal or comparable value.
PN1153
To that extent there needs to be an assessment made against work value criteria; that is, in relation to each of the two types of work. The work that is the subject of the claim and the work that is said to be work of equal and comparable value. The Commonwealth, in its submission, which is quoted at page 84 of the summary document, it's paragraph 86 of the commission's summary document, identifies the definition of "work value reasons" in subsection (4) of section 156 of the Act. Now, section 156 is in Part 2-3 which deals with the limited ability of the commission to vary award minimum rates of pay where there is a work value claim made. The Commonwealth notes at about point 6 of page 84 of the commission's summary document:
PN1154
Whilst the focus in an equal remuneration application is different, the factors identified in section 156(4) are of assistance.
PN1155
The Victorian minister adopts that submission and also notes that it's consistent with the position in the Equal Remuneration Report. Earlier I think that was the AEU took the commission to page 143 of the Equal Remuneration Report, and that was a quotation from the Crown Employees case in 1962. This was a passage which considered the meaning of the value of work. Now, the paragraph that leads into that quotation starts at the bottom of page 142 of the report, and is dealing with the cases under the 1993 provisions. This is at the bottom of page 142 of the Equal Remuneration Report. It says:
PN1156
Cases arising from the 1993 provisions consistently support the use of work value to assess whether different work was of equal value.
PN1157
Back in those days of course there was not "or comparable" in the definition:
PN1158
Work value has a particular place in Australian labour law and is typically defined to include examination of the nature of the work. Secondly, the skill and responsibility required.
PN1159
JUSTICE ROSS: Mr O'Grady, you have just gone into a tunnel. Can you just move to the microphone?
PN1160
MR O'GRADY: I can assure you I'm standing where I was, your Honour.
PN1161
JUSTICE ROSS: It's just how it sounds.
PN1162
MR O'GRADY: I'll repeat what I have just said, your Honour.
PN1163
JUSTICE ROSS: If you wouldn't mind, thank you.
PN1164
MR O'GRADY: Thank you. I'm at the bottom of page 142 and the top of page 143 of the Equal Remuneration Report which is identifying some meaning to the concept of work value with reference to the cases arising from the 1993 provisions, but there the report goes on more generally to say that:
PN1165
Work value has a particular place in Australian labour law and is typically defined to include examination of, firstly, the nature of the work; secondly, the skill and responsibility required to perform the work, and thirdly, the conditions under which the work is performed.
PN1166
Now, those are the three matters which are identified in the definition of "work value reasons" in subsection (4) of section 156 of the current act. So what the minister says in relation to that is that when one comes to the question of what is work of equal or comparable value, being the first step or the first stage of the first step in Mr Taylor's three-step process, one needs to find work which is truly of equal or comparable value. It's not the position of the Victorian minister that there is a comparison between the work, it's the position of the Victorian minister that there is a comparison between the value of the work and guidance in determining the value of the work can be gained from subsection 156(4) of the Act. That provides an avenue through which some of what might have been referred to as extrinsic factors such as geography and the like, but extracted to determine whether or not the work is truly work of comparable value, or equal or comparable value. This first step is still at the stage where the commission is determining jurisdiction. It's in subsection (5) of section 302.
PN1167
VICE PRESIDENT HATCHER: Mr O'Grady, how does geography go to a question of work value?
PN1168
MR O'GRADY: Because it's one of the matters that goes to the conditions under which the work is done, your Honour. So it's paragraph (c) of the definition in 165(4) identifies the conditions in which the work is done, and those conditions may well include geographical conditions.
PN1169
VICE PRESIDENT HATCHER: Thank you.
PN1170
MR O'GRADY: Now, we don't adhere to the definition and seek that it be picked up and brought into part 2-7. We adopt the same position as the Commonwealth that it may provide some guidance, but what we endeavour to do is to bring about an avenue whereby the commission can address the very question that this part revolves around, and that is whether or not the employees to whom an order might apply if made, receive equal remuneration for work of equal or comparable value by going to what we say is the first step, and that is determining whether or not the relevant work is work of equal or comparable value.
PN1171
VICE PRESIDENT HATCHER: So, Mr O'Grady, other you finish your first two steps as you describe them, that is, if you get a positive answer to both of them, what happens after that?
PN1172
MR O'GRADY: Then you get into the territory of the exercise of the discretion, and what we say about the difference between step 1 and step 3 still sticking with Mr Taylor's dissection, although I say there are two stages to step 1, the difference is this, at the stage of step 1, one only needs to reach the view as to whether or not there is equal remuneration for the two types of work. When one gets to step 3 one needs to actually go further and quantify the difference between the rates of remuneration for the work of equal value. In identifying the work of equal value and quantifying the different remuneration that is the avenue through which other factors can be brought into account.
PN1173
JUSTICE ROSS: Mr O'Grady, just on the discretion point, you would have herd the debate and the proposition that it's an all or nothing discretion, that is, that if the commission decides to make an order then it must make an order, the outcome of which is equal remuneration. What do you say in relation to that proposition?
PN1174
MR O'GRADY: What I'm endeavouring to do is to give the commission a platform - sorry, or a foundation upon which it can accept that submission but bring into account other factors, because it's the determination of whether the work is work of equal or comparable value that gives the commission the ability to bring into account extrinsic factors, because it needs to reach the view that any order will ensure that there will be equal remuneration but equal remuneration only for work of equal or comparable value.
PN1175
So if the actual rate of pay paid to an employee in the other work is higher but the work is not strictly of equal or comparable value because there are geographical considerations or climactic considerations, it's the determination of the work of equal or comparable value that provides the avenue for which those matters can be brought into account.
PN1176
VICE PRESIDENT HATCHER: Mr O'Grady, in the step 1 as you've characterised it, once you've satisfied yourself that you're comparing work of equal or comparable value, that's step 1, step 2 once you've satisfied yourself there's a difference in remuneration, but on your analysis, doesn't it follow that on the remedy step the only remaining task is to equalise the remuneration?
PN1177
MR O'GRADY: Yes, but it has to be equalised with the work of equal or comparable value, the remuneration for the work of equal or comparable value.
PN1178
VICE PRESIDENT HATCHER: Yes. But your analysis has that satisfied at step 1 already. Correct?
PN1179
MR O'GRADY: The answer to that is no, sorry, Vice President Hatcher, because at step 1, one only needs to make the determination that there is not equal remuneration, whereas step 3 you need to go further and formulate a view as to the differential between the two.
PN1180
VICE PRESIDENT HATCHER: Yes, but once you've done that, that then supplies the remedy, doesn't it, on your analysis?
PN1181
MR O'GRADY: That's at stage 3 though, your Honour.
PN1182
VICE PRESIDENT HATCHER: Yes.
PN1183
MR O'GRADY: At stage 3, yes.
PN1184
JUSTICE ROSS: At stage 3 it's an all or nothing proposition. Is that right? You either provide the remedy in full or you don't in the exercise of the discretion. Is that right?
PN1185
MR O'GRADY: I think we're driven to accept that, that's correct, your Honour. But the all or nothing is done on the comparison of work of equal or comparable value. So by then the other factors such as the geographical factors and the like will already have been taken into account.
PN1186
SENIOR DEPUTY PRESIDENT HARRISON: On your proposal, where do you put in the statement of principles that which you address at paragraph 65? Where does that come in these steps and in the event principles were published? Where would one find the necessity to take into account 64(a), (b), (c)?
PN1187
MR O'GRADY: We would say at stage 3, your Honour, at the exercise of the discretion.
PN1188
SENIOR DEPUTY PRESIDENT HARRISON: But do any of those have anything to do with a finding that you've made by then that the remuneration is not equal, and your finding that you've made by then that the work is of equal or comparable value?
PN1189
MR O'GRADY: I'm sorry, I had difficulty hearing the first part of your Honour's question.
PN1190
SENIOR DEPUTY PRESIDENT HARRISON: I'm just having difficulty given your first findings that you've made, call them both of step 1, parts (a) and (b), or call them step 1 and 2, I'm having difficulty understanding why it would be relevant then to put into the principle that you apply the considerations in 64(a), (b), (c). You say you should, I take it, but I'm having difficulty understanding.
PN1191
MR O'GRADY: Those are the sorts of considerations that can be brought into account in the exercise of the discretion as to whether an order should be made. So I'm sorry, your Honour, I'm just putting in context, those are the considerations that were brought into account in the SACS case in deciding whether to make an order. So on Mr Taylor's analysis, that is at stage 2 rather than stage 3. So 63(a), (b) and (c) would be favourable as being brought into account at stage 2 in the exercise of the commission's discretion as to whether or not an order should be made.
PN1192
SENIOR DEPUTY PRESIDENT HARRISON: At all.
PN1193
MR O'GRADY: At all. The sorts of considerations that I was addressing when jumping from stage 1 to stage 3 were a different set of considerations which relate to the assessment of the value of the work. Now, unless there are any further questions arising from that, I do want to make some brief submissions in relation to the question of discrimination. It's the Victorian minister's position that there is not a need to establish discrimination. Part 2-7 does not adopt a causative approach. The cause of any inequality in pay is not a relevant consideration, it is the fact that pay is not equal that is the relevant consideration.
PN1194
JUSTICE ROSS: Can you just repeat that?
PN1195
MR O'GRADY: Certainly, your Honour. The cause of any inequality, any inequality in the rates of pay is not relevant. It's the fact that pay is not equal is not relevant. It is a comparative approach, not a causative approach. As an aside, that position informs the state's explicit preference for a male comparator. Contrary to the submissions that are put against the state of Victoria, the minister does not overlay a range of qualifications and limitations on part 2-7 which are not found in the words of the Act.
PN1196
The minister adopts a position which is consistent with the plain words - sorry, the ordinary meaning of the words in section 302, and is soundly based on an account of the legislative history and where the part sits in the overall scheme of the Act and is consistent with the principles of statutory interpretation that are set out in more detail in the Victorian minister's submission. But what the Victorian minister says, and it's acknowledged in the New South Wales minister's submission at paragraph 13 that there's no basis for concluding that by removing any requirement to establish discrimination the parliament intended to remove the requirement to demonstrate inequality by reference to a comparator based on the opposite sex.
PN1197
JUSTICE ROSS: When you say there's no intention to remove the requirement for a comparator, what requirement are you referring to there?
PN1198
MR O'GRADY: Sorry, based on the Victorian minister's submission concerning predecessor provisions which explicitly identified a comparator for male and female rates of pay, we say that there's no need to establish discrimination or a cause for the current position, but one does need to compare the rates of pay to identify the fact that there is not equal remuneration for men and women workers.
PN1199
JUSTICE ROSS: I'm struggling with the logic of the submission. I'm not going to the proposition of whether or not part 2-7 requires a comparator, leave that side for the moment. It's the argument you advance in support of that which seems to be that the legislative history doesn't evince or lead to some sort of inference that part 2-7 does not require a comparator. I would have thought the legislative history went the other way. If you have a statutory provision which expressly requires a comparator, you then amend the statute to remove that requirement which is what has happened here. Wouldn't that support an inference that the legislative intent was that as a matter of jurisdiction at least, there was no requirement for a comparator?
PN1200
MR O'GRADY: The minister would accept that position, your Honour, if the concept you were addressing was discrimination.
PN1201
JUSTICE ROSS: Yes, but it's - - -
PN1202
MR O'GRADY: We accept there's a removal (indistinct) to establish discrimination but not removal of the requirement for a comparator.
PN1203
JUSTICE ROSS: Okay. What's the difference conceptually? You had previously a requirement for discrimination and a requirement for a comparator. Under 2-7 there's no explicit requirement for discrimination or a comparator.
PN1204
MR O'GRADY: There's no explicit requirement for discrimination, accept for a moment what your Honour says that there's no explicit requirement for a comparator. The submission of the minister is that when one looks at the words of the legislation, the concept of there not being equal remuneration for men and women workers, the scheme of the Act, the extrinsic material from the explanatory memorandum, we would respond to your Honour's proposition by saying it is at least implicit that there needs to be some sort of comparison between rates of pay for men and women workers, because that's the only way you can come to the conclusion that there is not equal remuneration for men and women workers for work of equal value.
PN1205
But it's a state of fact rather than a reason for arriving at that state of fact. The rates of pay must be different for an order to be made under this part of the Act. That's all the commission needs to be satisfied of. It does not need to be satisfied as to what caused the difference between those rates of pay. So the comparative approach does not equate to a requirement to establish direct or indirect discrimination, but is instead a mechanism by which the commission can be satisfied that there is not equal remuneration for men and women workers.
PN1206
Now, can I turn to part of the Victorian minister's submission. It's at paragraph 50 of the Victorian minister's submission, but it is extracted in context in some detail at page 48 of the commission's summary document. At about point 5 of the page, the paragraph starting with the words "for the reasons set out", that is paragraph 50 of the Victorian minister's submission, and you'll see that sets out the Victorian minister's distinct preference for a comparison to be undertaken. If such a direct comparator is not available, then the minister accepts that it may be sufficient to demonstrate the lack of equality by way of the establishment of a reliable benchmark or comparator group, and the elimination of factors not related to gender. In essence, that is the position that was adopted by Watson VP in the SACS No 2 decision, and that passage is extracted immediately below that paragraph.
PN1207
What the Victorian minister submits is this: absent a reliable comparator, the commission ought really discourage the use of broad based indicia which does not meet the statutory requirement that the commission satisfy itself that there is not equal remuneration for men and women workers for work of equal or comparable value. If one turns at the page to page 49 of the commission's summary document, we say that it is that sort of comparator that provides the foundation upon which the commission can approach the exercise of determining the jurisdictional prerequisite in subsection (5), and it provides a foundation upon which any order the commission ultimately makes would meet the statutory injunction in subsection (1).
PN1208
VICE PRESIDENT HATCHER: Mr O'Grady, in the passage from his Honour's dissenting judgment quoted in paragraph 51 of your submissions, you'll see in the first sentence his Honour refers to "the elimination of factors not related to gender from any comparisons". Do you see that?
PN1209
MR O'GRADY: Yes.
PN1210
VICE PRESIDENT HATCHER: How does that fit in at all with your analysis about step 1 and step 2?
PN1211
MR O'GRADY: We would say that in terms of work value matters, they are capable of being brought into account in step 1 in the exercise of securing an assessment of whether the work is work of equal or comparable value. It may be that there is a gap between a group of considerations which are all non-gender considerations on the one hand, and that group of considerations which ensure a consideration of work of equal or comparable value. I have to accept that, your Honour Hatcher VP.
PN1212
VICE PRESIDENT HATCHER: Just so I understand that, your step 1 simply involved the proper identification of whether the subject group and the comparator group have equal or comparable work value.
PN1213
MR O'GRADY: That's correct.
PN1214
VICE PRESIDENT HATCHER: Where does any issue of causation or gender relation even come into that?
PN1215
MR O'GRADY: Gender may come into it in terms of the question of the conditions under which the work is done, or the nature of the work, in looking at the assessment of the value of the work.
PN1216
VICE PRESIDENT HATCHER: How is that?
PN1217
MR O'GRADY: But I accept, your Honour, that the assessment of the value of the work is not sufficient to cover all non-gender-related considerations which his Honour Watson VP seeks to eliminate. Now, this involves some brief replication, but if I could take the commission to page 68 of the summary document where, at least in part, the same passage of our submission is quoted. I just wish to draw to the commission's attention, you'll see on page 68 it has a reference to the Victorian government's submission at 36 to 39 and 50. That is quoted in paragraph 70.
PN1218
But immediately under the reference to footnotes omitted, beneath that, paragraph 71 is actually the IEUA reply submission, not the Victorian government's submission, and it's the IEUA reply submission at paragraphs 57 to 59 which then follows over the page, paragraphs 71, 72 and 73. Now, the submission of the Victorian minister is that the IEUA reply does not do justice to the Victorian minister's analysis of the history and purpose of the provisions, and it does take somewhat of a leap. But I do want to make clear that it is not the position of the Victorian government that there is a requirement to identify discrimination.
PN1219
The position of the Victorian minister in relation to the limitations of the so-called indicia approach we say were explicitly recognised by the full bench in the SACS case, and I think the commission has already been taken to this passage, but it's the first SACS decision, the May 2011 decision, at paragraphs 249, 253 and 258. I don't need to take the commission to that. It's dealt with in the Victorian minister's submission at paragraph 56.
PN1220
JUSTICE ROSS: Mr O'Grady, are you saying that we should adopt those passages from the SACS decision?
PN1221
MR O'GRADY: Well, the full bench there of course acknowledged the limits of the indicia approach but accepted the position of the parties in that case when the Commonwealth had indicated that it was prepared to accept that there was not equal remuneration. We don't invite you to adopt those paragraphs. What we do urge upon the commission is to exercise the utmost caution in embarking up a broad-based indicia approach.
PN1222
JUSTICE ROSS: Are you putting that as a matter of jurisdiction there can't be reliance on an indicia approach or are you saying that in establishing the evidentiary case in support of an application for an order an indicia approach may be utilised but has inherent limitations? I'm not sure what you're saying; whether you're saying, "They can do it but, you know, it's not the best practice method," or are you saying, "No, get rid of it." I don't know what you mean by "we should discourage".
PN1223
MR O'GRADY: We don't put it as a hurdle to finding the existence of jurisdiction.
PN1224
JUSTICE ROSS: Right.
PN1225
MR O'GRADY: But we do say that it is not a sound foundation upon which to found an order to ensure that there be equal remuneration for work of equal or comparable value.
PN1226
JUSTICE ROSS: Wouldn't that conclusion - I'm sorry.
PN1227
MR O'GRADY: I'm sorry, your Honour. Go on .
PN1228
JUSTICE ROSS: Wouldn't that conclusion depend on the facts of a particular case?
PN1229
MR O'GRADY: I think that's right, your Honour. I think that's right, but at the end of the day the jurisdictional prerequisite is that the commission be satisfied that there is not equal remuneration for work of equal or comparable value. Now, the minister has set out his position in paragraph 50 of his submission, the distinct preference for a comparator, but the minister can't maintain the submission that you could not be satisfied that you have jurisdiction unless there is a comparator because the jurisdictional prerequisite is set out in those words in subsection (5). The position of the Victorian minister is to go back to the words of the Act at each opportunity, your Honour.
PN1230
JUSTICE ROSS: Not a bad approach, Mr O'Grady.
PN1231
MR O'GRADY: It's one that wins favour with the High Court on each occasion that's called upon to interpret a piece of legislation of course, your Honour. I'm in safe territory there. Can I just finish up with a couple of comments about the principles. We rely on our written submissions at paragraphs 84 to 88 and then the subsequent part in relation to the principles themselves. We accept that each case needs to be considered and determined on its own merits; a position that's urged upon you by both New South Wales and the Commonwealth, and we accept that if the commission is mindful to develop a statement of principles then they obviously should act as a guide, not as a fetter, and that's the position with any broad statement of principles which full benches of this commission and its predecessors have issued from time to time; the most obvious example being the longstanding national wage case principles. They operate as a guide, not as a fetter.
PN1232
Those are the submissions of the Victorian minister. Can I say save for this; that if there is anything that arises from the questions which have been put to others who have been on their feet earlier today, the Victorian minister would like to consider his position and if he wishes to say anything on those matters, we'll do so by Wednesday, 30 April.
PN1233
JUSTICE ROSS: Just in relation to that, Mr O'Grady, it occurs to me that parties may wish to comment on what's filed by next Wednesday and they ought to be given an opportunity to do that.
PN1234
MR O'GRADY: Yes.
PN1235
JUSTICE ROSS: And you can think about this over the break as to timing, but they're relatively short points.
PN1236
MR O'GRADY: Yes.
PN1237
JUSTICE ROSS: I would have thought if anyone says what they want to say about them by close of business next Wednesday and anything in reply by close of business that Friday might be sufficient, but give that some thought. I don't think we're at the point of the case where I want to rush you, and if anyone needs more time of course they can ask for it. Mr O'Grady, can I just take you to paragraph 70 of the minister's submission. Do you see there that it's said in the second sentence that:
PN1238
The fact that an equal remuneration order may discourage enterprise bargaining ... would also be relevant to the exercise of the discretion about whether or not to make an order.
PN1239
Can you just expand that proposition a bit. I mean, on one view it will always be taken to discourage enterprise bargaining if there is a significant increase in order to address some undervaluation in the relevant sense. How would you assess that sort of proposition that it may discourage enterprise bargaining? I mean, how would you know, bearing in mind we need to be careful and rigorous?
PN1240
MR O'GRADY: I have no doubt you would be careful and rigorous, your Honour, but it would be a matter based on the evidence before the commission in the particular application. It can only be so.
PN1241
JUSTICE ROSS: I suppose you can envisage a circumstance where it's sort of a combination of capacity and incentive to bargain where, if the Equal Remuneration Order was going to result in a significant increase in remuneration, it may mean that the employer has no capacity to give any other increase, but even in that context, if the bargaining was productivity based, then why wouldn't there be some capacity? And what do you do, when you have got an industry or a sector, that historically hasn't engaged in bargaining anyway? Well, the fact that it may discourage bargaining in the future, what's the opportunity lost there?
PN1242
MR O'GRADY: As I said it would be a matter determined by the evidence before the commission in the particular application. One can think of a range of possible scenarios. Those are two. Another would be where the rate of pay set by the Equal Remuneration Order might mean that any negotiated rates of pay in a proposed enterprise agreement are essentially rendered nugatory because they're less than the Equal Remuneration Order, but all the other matters that are in the enterprise agreement remain valid. I can think of others as well, but I think these are all matters that would be determined by - sorry, the weight of that consideration is a matter that would be determined by the evidence before the commission in any particular application.
PN1243
JUSTICE ROSS: Yes.
PN1244
MR O'GRADY: I don't think I can put it any higher than that, your Honour.
PN1245
JUSTICE ROSS: No, I'm not sure it can be put any higher than that.
PN1246
MR O'GRADY: Yes.
PN1247
JUSTICE ROSS: Can I take you to paragraph 83. A proposition is put in the second sentence that there's a risk of leapfrogging if an Equal Remuneration Order arose or interferes with relativities in modern awards.
PN1248
MR O'GRADY: Yes.
PN1249
JUSTICE ROSS: Bearing in mind the character of an Equal Remuneration Order, at least it appears it's not an award it's an order, it deals with remuneration, not minimum rates, at least potentially, and they may be one and the same in that particular case, it seems to be something that stands outside in that sense both modern award rates and the enterprise bargain rates, and that proposition seems to derive some support from section 306 of the Act.
PN1250
MR O'GRADY: Yes.
PN1251
JUSTICE ROSS: That being the case, I don't see - what's the risk of leapfrogging? What do you mean by that, bearing mind that I would have thought the risk would have been constrained by the fact that if you want to seek to vary minimum rates in a modern award, you're fairly constrained by the statutory framework and the way in which you can do that. You can't just rock up by consent and say, "We want to bump up the rates." If it's outside a four-yearly review you're constrained by the work value considerations.
PN1252
MR O'GRADY: Yes.
PN1253
JUSTICE ROSS: And within a four-yearly review you're constrained by the range of other statutory considerations. So where does this risk come from?
PN1254
MR O'GRADY: Well, I accept everything that your Honour has said about award rates of pay. The practical reality that is referred to is one whereby you have employees in one area who see employees in another area secure a pay rise which may take them above what that employee is earning, whether it be award based or otherwise, and use that as the vehicles by which they endeavour to secure higher rates of pay, whether that be within or outside the award system. I accept what your Honour says about the limitations on securing such pay increase within the award system, but it may well be that it's either within the enterprise bargaining stream, or alternatively, simply pursuing higher rates of pay over and above award rates. That's the practical reality that's referred to. Someone seeing someone else having a higher rate of pay and wanting more.
PN1255
JUSTICE ROSS: Well, okay. Let's assume we can accept as human experience that that might be the case, is that a reason not to make an Equal Remuneration Order?
PN1256
MR O'GRADY: We don't say it's a reason not to make one but it's all part of the mix, your Honour, in the exercise of the discretion. The second sentence is prefaced with the first of course.
PN1257
JUSTICE ROSS: Yes. Thanks, Mr O'Grady. Was there anything else?
PN1258
MR O'GRADY: No, thank you, your Honour.
PN1259
JUSTICE ROSS: Thank you. Is there an agreed batting order on the employers' side? I'm not suggesting you start it now but - - -
PN1260
MR WARD: No, it's me, your Honour, followed by AIG followed by (indistinct)
PN1261
JUSTICE ROSS: Then ACA?
PN1262
MR WARD: Yes, I apologise, yes.
PN1263
JUSTICE ROSS: Yes, the respondents.
PN1264
MR WARD: Well, for some.
PN1265
JUSTICE ROSS: Well, I don't think we'll start you off now. We'll adjourn until 10 am in the morning.
<ADJOURNED UNTIL WEDNESDAY, 23 APRIL 2014 [4.15PM]