PN300

ACTING PRESIDENT HATCHER: I'll take the appearances. Mr Saunders, you appear for Professionals Australia?

PN301

MR L SAUNDERS: Yes, your Honour.

PN302

ACTING PRESIDENT HATCHER: Ms Bhatt, you appear for the Australian Industry Group?

PN303

MS R BHATT: Yes, I do.

PN304

ACTING PRESIDENT HATCHER: Ms Thompson, you appear for Australian Business Industrial and the New South Wales Business Chamber?

PN305

MS K THOMPSON: Yes.

PN306

ACTING PRESIDENT HATCHER: Does anybody want to say anything before we take the evidence?

PN307

MR SAUNDERS: Not from us.

PN308

MS BHATT: No, thank you.

PN309

ACTING PRESIDENT HATCHER: All right. Just give me one second. So, Mr Saunders, in respect of Ms Baulch and Mr Simovic, I understand they're not required for cross‑examination.

PN310

MR SAUNDERS: That's right.

PN311

ACTING PRESIDENT HATCHER: Ms Bhatt, we've noted that you have filed a number of objections which we've looked at. We propose to admit the statements subject to any submissions about weight.

PN312

MS BHATT: If it pleases.

PN313

ACTING PRESIDENT HATCHER: The statement of Jacki Baulch � what is the date on that, Mr Saunders?

PN314

MR SAUNDERS: 13 September 2022.

PN315

ACTING PRESIDENT HATCHER: Dated 13 September 2022, will be marked exhibit 1.

EXHIBIT #1 WITNESS STATEMENT OF JACKI BAULCH DATED 13/09/2022

PN316

ACTING PRESIDENT HATCHER: The statement of Mateja Simovic - - -

PN317

MR SAUNDERS: Which is 14 September.

PN318

ACTING PRESIDENT HATCHER: - - - dated 14 September 2022, will be marked exhibit 2.

EXHIBIT #2 WITNESS STATEMENT OF MATEJA SIMOVIC DATED 14/09/2022

PN319

MR SAUNDERS: Thank you, your Honour. Mr Crowther is in the Teams waiting room. Before he is called I should indicate that there was a request by AiG for some documents arising out of his statement. It turned out to be a very sensible request and those documents appear likely to assist the Bench, so I intend to tender them through him.

PN320

ACTING PRESIDENT HATCHER: Right.

PN321

MR SAUNDERS: If I could provide that bundle. I will have Mr Crowther identify them, but just to ensure that I've handed the right ones up it's an email setting out some question results from the survey. The most recent, Professional Engineers Remuneration Report, effectively an update, and the most recent Professional Scientists Report, again an update, which I understand weren't available when he was preparing his statement.

PN322

ACTING PRESIDENT HATCHER: All right. So are we ready to proceed with Mr Crowther?

PN323

MR SAUNDERS: Yes.

PN324

MS BHATT: Can I first just say we had not intended to take Mr Crowther to the survey results or the email that Mr Saunders has just handed up. We had asked to see copies, but we have not intended to tender those documents today. This is, in effect, fresh material that has been put to the Commission because until now the full survey results have not been in the material that has been advanced.

PN325

I won't object to the material being tendered or handed up, but depending on what Mr Saunders has to say about them in his submissions, if we require a further opportunity to respond we might seek that in due course.

PN326

ACTING PRESIDENT HATCHER: All right. That's noted. Let's get Mr Crowther in.

PN327

THE ASSOCIATE: Mr Crowther, it's the associate speaking in Sydney. Are you able to hear us? If you can, just turn on your camera, please. Would you like to take an oath or an affirmation today, Mr Crowther? I think for the purposes of Teams an affirmation might be a bit more straightforward.

PN328

MR CROWTHER: Sure.

PN329

THE ASSOCIATE: Could you first please state your name and address for the record.

PN330

MR CROWTHER: My name is Alex John Crowther. My address is (address supplied).

<ALEX JOHN CROWTHER, AFFIRMED�� [9.32 AM]

EXAMINATION-IN-CHIEF BY MR SAUNDERS�� [9.33 AM]

PN331

MR SAUNDERS: Mr Crowther, could you state your full name for the record, please?‑‑‑Alex John Crowther.

PN332

Your address?‑‑‑It is (address supplied).

PN333

What is your occupation, Mr Crowther?‑‑‑I am the surveys manager for Professionals Australia. I am also currently the acting director of research.

PN334

You have prepared a statement in these proceedings dated 19 September 2022. Do you have a copy of that with you?‑‑‑I do. I don't have that document open yet, but I do have a copy.

***�� ALEX JOHN CROWTHER�� XN MR SAUNDERS

PN335

Perhaps open it?‑‑‑Yes.

PN336

Does that have all the annexures?‑‑‑I have here � it looks like - - -

PN337

I think he is frozen or standing very still?‑‑‑I'm just opening each file right now. Once it has all caught up - so I have here the witness statement you refer to and annexures A, B and C, then also the Time For Action Report which I believe was included in the annex, as well.

PN338

Thank you. Is everything in that statement true and correct to the best of your knowledge?‑‑‑Yes.

PN339

I tender the statement.

PN340

ACTING PRESIDENT HATCHER: All right. The statement of Alex Crowther, dated 19 September 2022, will be marked exhibit 3.

EXHIBIT #3 WITNESS STATEMENT OF ALEX CROWTHER DATED 19/09/2022 PLUS ANNEXURES

PN341

MR SAUNDERS: Mr Crowther, you should also have three other documents with you. One is an email from Margaret Buchanan, dated 22 November at 2.27 pm, to Ms Bhatt containing some survey results. Do you have that in front of you?‑‑‑I have three emails. I'm just making sure I have the correct one. So they're dated the - could you repeat that.

PN342

22 November at 2.27 pm and it forwards an email from you?‑‑‑Sorry, the dates on these are not aligning, but I think it may be a feature of how they get re‑dated.

PN343

The subject line is 'Hours of work survey'?‑‑‑Yes, I do have that.

PN344

Terrific. Can you scroll down in that so you can see the graphs?‑‑‑Yes.

PN345

Is it right that those graphs record your analysis of the answers to the question, 'Do you record how many hours you work each week?' in the 2022 survey?‑‑‑No, these record the answer to the question, 'Do you record how many hours you work each week?' in our 2018 additional hours survey which was part of the evidence that was submitted previously. I believe this question, 'Do you record how many hours you work each week?' � I don't believe this was in the 2022 survey, was it?

***�� ALEX JOHN CROWTHER�� XN MR SAUNDERS

PN346

So it's the 2018 survey results; is that right?‑‑‑Yes, this comes in the 2018 survey.

PN347

Yes?‑‑‑And it's not the 2018 remuneration survey, it's the 2018 additional hours survey that we ran. The survey ran specifically to ask questions that would be relevant for the hearing that was held back then.

PN348

I tender the document.

PN349

ACTING PRESIDENT HATCHER: All right. We will just call it the Professionals Australia email, dated 22 November 2022, which will be marked exhibit 4.

EXHIBIT #4 EMAIL FROM PROFESSIONALS AUSTRALIA DATED 22/11/2022

PN350

MR SAUNDERS: Mr Crowther, you should also have a document headed 'Professional Engineers Employment and Remuneration Report 2021‑2022'?‑‑‑I do.

PN351

Is this the most recent Engineers Remuneration Report conducted by APESMA?‑‑‑This is the most recent report we have published. I am in the process of completing this year's edition.

PN352

I tender the document?‑‑‑So in the evidence submitted there was unpublished data from that work as it was at a point in analysis where it would be possible to extract limited data for the witness statement.

PN353

Certainly. I tender the document.

PN354

ACTING PRESIDENT HATCHER: All right. The Professional Engineers Employment Remuneration Report 2021‑2022 will be marked exhibit 5.

EXHIBIT #5 PROFESSIONAL ENGINEERS EMPLOYMENT REMUNERATION REPORT 2021-2022

PN355

MR SAUNDERS: Finally, Mr Crowther, you should have a document titled 'Professional Scientists Employment and Remuneration Report 2021‑2022'?‑‑‑I do.

***�� ALEX JOHN CROWTHER�� XN MR SAUNDERS

PN356

I take it that's the most recently published Scientists Employment and Remuneration Report?‑‑‑It is.

PN357

I tender the document.

PN358

ACTING PRESIDENT HATCHER: The Professional Scientists Employment and Remuneration Report 2021‑2022 will be marked exhibit 6.

EXHIBIT #6 PROFESSIONAL SCIENTISTS EMPLOYMENT AND REMUNERATION REPORT 2021-2022

PN359

MR SAUNDERS: I have nothing further.

CROSS-EXAMINATION BY MS BHATT�� [9.38 AM]

PN360

MS BHATT: Mr Crowther, can you hear and see me?‑‑‑I can hear you. I think I can see you.

PN361

That's all right. Mr Crowther, my name is Ms Bhatt. I appear in these proceedings on behalf of the Australian Industry Group. I understand that by email this morning Ms Buchanan of the union has sent you four documents. Can you confirm that you have that email?‑‑‑I do have that email which contained four questionnaires.

PN362

That's right. Can I ask you to turn to your witness statement in order to assist with identifying these documents?‑‑‑Okay.

PN363

Paragraph 5 of your statement, please?‑‑‑Yes, I am looking at paragraph 5.

PN364

At paragraph 5 you refer to surveys conducted by Professionals Australia of professional engineers regarding their remuneration in 2019, 2020, 2021 and 2022; do you see that?‑‑‑Yes.

PN365

Mr Crowther, can I ask you to open one of the documents attached to that email from Ms Buchanan. That document should be titled '2021 professional engineer remuneration and employment survey' � and can I have copies of these handed to the Bench, please?‑‑‑To confirm, this is the document titled '2021engineersurveyqs.pdf?

PN366

That's right. If you open the document - - -?‑‑‑Yes.

***�� ALEX JOHN CROWTHER�� XXN MS BHATT

PN367

- - - do you see a heading that says '2021 professional engineer remuneration and employment survey'?‑‑‑I do.

PN368

These are the questions that were asked in the union's survey of engineers in 2021?‑‑‑Yes, in 2021.

PN369

I tender that document.

PN370

MR SAUNDERS: There is no objection.

PN371

ACTING PRESIDENT HATCHER: All right. The 2021 professional engineer remuneration and employment survey will be marked exhibit 7.

EXHIBIT #7 2021 PROFESSIONAL ENGINEER REMUNERATION AND EMPLOYMENT SURVEY

PN372

MS BHATT: Mr Crowther, can I then ask you to go to a document that is headed '2022 professional engineer remuneration and employment survey' � and can I ask that copies of that are handed to the Bench please?‑‑‑I am on that document.

PN373

Just bear with us one moment, Mr Crowther, the documents are being handed to the Bench. Can you confirm that these are the questions that were asked in the union's survey of professional engineers in 2022?‑‑‑I believe so. I will note that when I opened this in the email this morning this format didn't look like it had been extracted by me. This looks like it had been screen‑shotted out. I haven't had a chance to review entirely the contents of this, but it doesn't look like � but I have to go back and confirm if it is the file. It's just it � you will note the different format to what the extracts normally look like.

PN374

Bear with me one moment, Mr Crowther, please. Can I then take you to a document that is titled '2021 professional scientists employment and remuneration survey'?‑‑‑Yes.

PN375

Can I have copies of that handed to the Bench, please. Mr Crowther, can you confirm that these questions were asked in the annual survey of scientists in 2021?‑‑‑Just because of the title, I want to confirm we're looking at the 2021‑22 professional scientists employment and remuneration survey.

PN376

That's the one?‑‑‑Yes, I can confirm this is the survey that was used in 2021.

***�� ALEX JOHN CROWTHER�� XXN MS BHATT

PN377

I tender that.

PN378

MR SAUNDERS: No objection.

PN379

ACTING PRESIDENT HATCHER: The 2021‑22 professional scientists employment and remuneration survey will be marked exhibit 8.

EXHIBIT #8 2021‑22 PROFESSIONAL SCIENTISTS EMPLOYMENT AND REMUNERATION SURVEY

PN380

MS BHATT: Then can I ask you to turn to the final attachment to that email, which should be the 2022‑2023 professional scientists employment and remuneration survey � and can I ask that copies of that document be handed to the Bench?‑‑‑Yes.

PN381

Mr Crowther, can you confirm that these were the questions that were asked in the union's annual remuneration survey of scientists in 2022?‑‑‑I can confirm.

PN382

Thank you. I tender that document.

PN383

MR SAUNDERS: No objection.

PN384

ACTING PRESIDENT HATCHER: 2022‑23 professional scientists employment and remuneration survey will be marked exhibit 9.

EXHIBIT #9 2022-23 PROFESSIONAL SCIENTISTS EMPLOYMENT AND REMUNERATION SURVEY

PN385

MS BHATT: Mr Crowther, can I ask you to turn to annexure C of your witness statement, please?‑‑‑Yes.

PN386

As I understand it these are the questions that were asked in a survey conducted by Professionals Australia in 2018; is that correct?‑‑‑Yes, that's correct. I'm reasonably sure it was 2018.

PN387

To be clear, it's that survey that resulted in the publication of the report that is annexure D to your statement; is that right?‑‑‑It's one of the main sources that the report that is annexure D uses. Annexure D is the sole place where we published results from the survey at annexure C.

***�� ALEX JOHN CROWTHER�� XXN MS BHATT

PN388

I understand. Thank you. Can I take you to the first page of annexure C, please?‑‑‑Yes.

PN389

I'm just wanting to read from the top of that page the introduction that appears there, Mr Crowther?‑‑‑Mm‑hm.

PN390

It says:

PN391

Are you paid fairly for working long hours? Professionals Australia is conducting a survey to find out if you are working additional hours and whether you are being properly rewarded and recognised for your efforts. Your contribution will assist the association in the upcoming review of the Professional Employees Award (the award) which Professionals Australia is actively involved in.

PN392

We are seeking to have the award amended as it is currently unclear as to whether your employer is adequately compensating you for working more than 38 hours per week. Please help us tackle this issue by completing this short survey regarding additional hours and related compensation within your workplace.

PN393

I can leave that there. Mr Crowther, having read that introduction you would agree that it revealed that the union was seeking variations to the Professional Employees Award?‑‑‑Yes.

PN394

The introduction suggested, didn't it, that those variations concerned the manner in which employees are compensated for working more than 38 hours in a week?‑‑‑Yes.

PN395

You would agree that as a result an employee who was concerned about that issue, concerned about whether they were being compensated appropriately for working additional hours, was more likely to complete the survey than someone who is not concerned about that issue?‑‑‑It's possible.

PN396

So you would agree that it's at least possible that the survey results disproportionately reflect the employee's views who consider that they weren't properly compensated for working additional hours?‑‑‑It is possible that the survey respondents are those who were more concerned with this issue.

***�� ALEX JOHN CROWTHER�� XXN MS BHATT

PN397

Thank you. Mr Crowther, were you involved in crafting the questions that were asked in this survey?‑‑‑Yes.

PN398

Can I take you to page 4, please, of annexure C?‑‑‑Yes.

PN399

Reading the second question on that page it says:

PN400

Which of the following forms of compensation do you receive in recognition of additional hours you work?

PN401

Do you see that?‑‑‑I do.

PN402

If we jump to the third option that was posed to respondents it says:

PN403

My annual salary takes into account additional hours worked.

PN404

?‑‑‑Mm‑hm.

PN405

Mr Crowther, do you understand that the Professional Employees Award prescribes minimum salaries that are payable to full‑time employees?‑‑‑Yes.

PN406

You understand that an employer is allowed to pay an employee a salary that exceeds or is higher than those minimum salaries?‑‑‑Yes.

PN407

Are you aware that in those circumstances the award doesn't require an employer to tell the employee what their salary compensates them for?‑‑‑I believe so. I'm not certain about whether or not there is a requirement to inform the employee.

PN408

Can I ask you for the purposes of this next question to just assume that that's the case. I appreciate that you don't know what the award says in this regard, but if you just assume that there is no requirement in the award to provide that information to employees?‑‑‑Mm‑hm.

PN409

You would accept, wouldn't you, that an employee receiving a salary that takes into account their additional hours of work might not actually know that that's the case?‑‑‑For some that could be true.

***�� ALEX JOHN CROWTHER�� XXN MS BHATT

PN410

Thank you. Mr Crowther, can I ask you to go back to your witness statement and if you turn to paragraph 11, please?‑‑‑Yes.

PN411

You have there given evidence about the proportion of respondents to the 2022 remuneration survey of engineers who reported rates of pay that are less than the award rate of pay if the award rate of pay is paid for all hours worked?‑‑‑Mm‑hm.

PN412

I'm reading from the last sentence in that paragraph.

PN413

ACTING PRESIDENT HATCHER: Sorry, Ms Bhatt, what paragraph?

PN414

MS BHATT: Sorry, paragraph 11.

PN415

ACTING PRESIDENT HATCHER: Yes, go on.

PN416

THE WITNESS: I'm looking at 11, as well.

PN417

MS BHATT: Thank you. Am I right in understanding that you undertook various calculations in order to derive the figures that are set out in this paragraph of your evidence?‑‑‑That's correct.

PN418

Those calculations were based on the results of the 2022 remuneration survey of professional employees; is that right?‑‑‑That's correct.

PN419

In order to get these figures, Mr Crowther, put simply did you divide the employee's base salary by the number of hours worked by that employee as they reported in the survey?‑‑‑Yes, roughly that's the equation used. There is, you know, a bit of looking at how they report compensation, so it's not just dividing � it's not just a division of annual salary by hours worked and annualised, but that is roughly what the equation is.

PN420

You indicated that you looked at the way in which they're compensated or you look at the compensation that they receive. Can you explain that answer further?‑‑‑Would you like me to step through the script - like, all the logic in it � or would you like me to give a rough description of how it works?

***�� ALEX JOHN CROWTHER�� XXN MS BHATT

PN421

Let's start with a rough description, please?‑‑‑Okay, sure. So the equation in trying to determine under certain conditions, it looks at money received and hours spent, but, let's say, for example, someone had responded that they get time off in lieu which is one of the options some will provide to the answer of how they're compensated for working additional hours - for someone in that case it would be assumed that no matter what they reported working in terms of hours, their hours of work were 38 and the reason being that we haven't asked them how much time in lieu they had taken so it has to assumed that all additional hours are compensated in the fashion that they have stated. So for each of the different methods of overtime compensation that we ask about, there is an adjustment taken in good faith what the respondent said.

PN422

I understand. Am I right in understanding that these calculations were based on the respondent's indication of the total number of hours worked, including any overtime or additional hours?‑‑‑So the denominator that you're referring to is to help with this. The hours of work figure that is taken is � if we look at � we'll look at the 2022 engineer survey that you pointed me to. It's question � the response to question 10 where they're asked:

PN423

How many hours per week do you normally work, including paid or unpaid overtime?

PN424

It's the response that is used to determine their self‑reported hours.

PN425

Mr Crowther, staying with that document, the 2022 survey questions, can I ask you, please, to turn to question 38?‑‑‑Mm‑hm.

PN426

It asks:

PN427

Is your salary subject to performance based incentives.

PN428

Do you see that?‑‑‑Mm‑hm.

PN429

If we go to question 39, it asks the respondent whether they receive various other benefits such as award allowances and overtime payments?‑‑‑Mm‑hm.

PN430

Then if we look at question 40, it asks whether the employee has access to an employer‑provided vehicle?‑‑‑Mm‑hm.

***�� ALEX JOHN CROWTHER�� XXN MS BHATT

PN431

Mr Crowther, were the results in relation to any of these questions taken into account in your calculations set out at paragraph 11?‑‑‑What was taken into consideration was the overtime payments value and that was only taken into consideration where someone indicated that they receive monetary payment � like, an hourly rate, I believe that's the wording used � for hours worked in excess of 38. Well, for the unpaid additional hours, so that payment is factored in. I will note looking at this now, I can say with certainty that this is not the full questionnaire, what has been submitted here, and I don't believe this is what I would have submitted to AiG because it is missing the conditional questions. Like, for example, if you answer, 'Yes', to question 38 you would presented questions that are not here.

PN432

I understand. Thank you for that, Mr Crowther?‑‑‑Yes, so I can tell you the overtime payment item is factored in. The other items are not factored in and the value of a vehicle is not factored in.

PN433

Okay. Thank you. If you go to paragraph 12, those calculations relate to the remuneration survey for professional engineers in 2021?‑‑‑Paragraph 12. I'm just getting back to the correct document. Yes, on paragraph 12.

PN434

Mr Crowther, am I right to assume that those calculations were undertaken in the same way that the calculations at paragraph 11 were undertaken?‑‑‑I'll just re‑read it to guarantee that that's true. Yes.

PN435

Is that also true of the results that have been derived at paragraph 13?‑‑‑Except that in paragraph 13 the equation is adjusted to have consideration for if there was a loading applied to additional hours.

PN436

I understand. Can the same be said in relation to paragraph 14?‑‑‑Yes, with the adjustment for a consideration of loadings.

PN437

Turning then to paragraph 18, these results relate to the remuneration survey of professional scientists in 2021?‑‑‑Mm‑hm.

PN438

And I take it that these calculations were undertaken in the same way as you did in relation to the professional engineers survey?‑‑‑I'm just re‑reading through this. The results in paragraph 18 apply the same methodology as those of paragraphs 11 and 12.

PN439

All right. That's also true, I take it, of paragraph 19?‑‑‑Yes, where 19 has consideration of the loading.

PN440

Can I take you back to paragraph 15 of your statement, please, Mr Crowther?‑‑‑Mm‑hm.

***�� ALEX JOHN CROWTHER�� XXN MS BHATT

PN441

You describe the rates that you have recorded there as the median base hourly rate?‑‑‑Mm‑hm.

PN442

I take it by 'base hourly rate' you mean an hourly rate that does not include any separate amount such as overtime payments or any allowances?‑‑‑That is correct. So the results described in paragraph 15 are only to have consideration to responses from the question in the 2022 survey document � responses to question 34 where we asked someone to put in their annual base salary and we prompt to inform them it excludes superannuation allowances, bonuses and before any salary sacrifice.

PN443

Can I take it the results that you have provided at paragraph 16 also relate only to a base hourly rate that does not include any other component?‑‑‑16, yes.

PN444

Then finally to paragraph 20 of your statement?‑‑‑I'm on 20.

PN445

In the first part of that paragraph you give evidence again about the median base hourly rate, this time in relation to professional scientists. Is the meaning of the base hourly rate there the same as what you previously described in relation to paragraph 15?‑‑‑Yes, and reports the results from a similar question in the scientist questionnaire.

PN446

Thank you. Then, Mr Crowther, if you look at the second part of paragraph 20 which starts with:

PN447

The most recently published remuneration survey for professional scientists show that �

PN448

and then it goes on to report a series of rates; you see that?‑‑‑Yes.

PN449

Those rates are again the base hourly rate?‑‑‑Base hourly rate, yes.

PN450

I have no further questions for this witness. Thank you, Mr Crowther.

PN451

MR SAUNDERS: No re‑examination.

PN452

ACTING PRESIDENT HATCHER: Ms Thompson, do you have any questions?

***�� ALEX JOHN CROWTHER�� XXN MS BHATT

PN453

MS THOMPSON: No, thank you.

PN454

ACTING PRESIDENT HATCHER: Thanks for your evidence, Mr Crowther. You're excused?‑‑‑Thank you.

<THE WITNESS WITHDREW�� [10.02 AM]

PN455

MR SAUNDERS: That concludes the union's case. Could I have a moment to discuss the issue of the 2022 survey with my friend?

PN456

ACTING PRESIDENT HATCHER: Yes.

PN457

MS BHATT: We would seek to tender the document that's titled '2022 professional engineer remuneration and employment survey'. I'm told that it looks a little different to what Mr Crowther is perhaps accustomed to, but there's no objection as I understand it to it being tendered.

PN458

MR SAUNDERS: I confirm it is in fact the survey.

PN459

ACTING PRESIDENT HATCHER: All right. The document entitled '2022 professional engineer remuneration and employment survey' will be marked exhibit 10.

EXHIBIT #10 2022 PROFESSIONAL ENGINEER REMUNERATION EMPLOYMENT SURVEY

PN460

All right, submissions. Who wants to go first?

PN461

MR SAUNDERS: I suppose me. Can I start with the question of coverage, Vice President?

PN462

ACTING PRESIDENT HATCHER: Yes.

PN463

MR SAUNDERS: The Bench would have received yesterday afternoon some supplementary submissions. Really they are things I would have said today, but given the detail and the award history it seems more efficient to provide them in writing. To that end can I hand up a bundle which is just the relevant awards � or extracts in some cases.

***�� ALEX JOHN CROWTHER�� XXN MS BHATT

PN464

As the union understands it, this matter has been brought on in respect of coverage to address the issue identified by the Full Bench in Zhang, which really is that there is a degree of uncertainty as to how the coverage of this award operates such that it's the subject of a disproportionately high amount of litigation. The issue seems to be that the approach that is conventionally taken � the way the principal purpose test is being applied and when it's being applied � doesn't really work when one looks at the classification structure in the award which is leading to a degree of instability in the award's current operation.

PN465

ACTING PRESIDENT HATCHER: I think there are two related problems.

PN466

MR SAUNDERS: Yes.

PN467

ACTING PRESIDENT HATCHER: The first is that in terms of the way the coverage of the award is expressed, it's clearly expressed in terms which don't relate to principal purpose because it only requires that part of your duties have to be professional in nature to get in the award.

PN468

MR SAUNDERS: Indeed.

PN469

ACTING PRESIDENT HATCHER: That's the first step. The second step is you have to be in the classification structure. There is a series of Full Benches which say we you apply the principal purpose test and the problem is twofold. First of all, the principal purpose test at that level contradicts the coverage clause which is not based on principal purpose.

PN470

MR SAUNDERS: Yes.

PN471

ACTING PRESIDENT HATCHER: Secondly, because the classifications describe skill and responsibility levels rather than occupational functions, it's impossible to determine what the principal purpose of those classifications is.

PN472

MR SAUNDERS: Yes, and that's simply because it's not an occupational classification structure.

PN473

ACTING PRESIDENT HATCHER: Yes.

PN474

MR SAUNDERS: It's not quite as dramatic as saying those series of Full Bench decisions are wrong. It's simply that the question hasn't clearly arisen. Either they're matters where the problem doesn't arise because there's a concession as to classification (indistinct) is the example there, or it's just assumed, which is what happens in McFarlane.

PN475

Both parties appear to have proceeded on the basis that this was the correct approach and the Bench certainly doesn't deal with the question, or they refer to principally Carpenter v Corona which does apply the principal purpose test and says as a general proposition that's how you ascertain award classification coverage but is dealing with a completely different award and dealing with an award that, for one thing, didn't have a two‑stage test. It was sales - sales soliciting, sales orders - where that is perfectly appropriate.

PN476

The principal purpose test really evolves out of not so much awards as union rules, disputes. The authorities are set out in the written note. It's designed to identify what occupation an employee falls into rather than incidence of award. As I've said, the schedule A classifications aren't on their face � and when one examines the history of how and why they've come into existence, they're not occupational, they're a career path for people who are pursuing a unitary occupation; professional engineer or professional scientist.

PN477

The true position is, as your Honour Acting President Hatcher has said, if an employee is performing as a matter of fact professional engineering, professional scientific duties, they then fall within one of the classifications. Which one it is will matter for some purposes, it won't for others � an unfair dismissal application � but it's not in truth a two‑stage test at that point. The history bears that out. One looks at the development of the various levels, the curious position that university qualified graduate engineers find themselves in being pegged at C5, that developmental aspect, but it's apparent on the text of the award itself.

PN478

What that means - if your Honours have the draft determination handy - the first part of APESMA's note answers the question. There's no need to re‑write the award or re‑write the classification structure. It's just clarification is needed which can be provided in two ways: a decision of this award Full Bench setting out what the correct approach is and, secondly, for convenience, a note in the award saying that.

PN479

I should observe that there was some reluctance in Zhang to interfere with this approach. Of course that matter concerned a single employee, a single employer, a self‑represented employee in that case. It wasn't an immediately appropriate vehicle for this kind of re‑evaluation. These proceedings are quite a different proposition. They have been brought on at the Commission's own motion. All interested parties have been able to participate.

PN480

It was all published on the web site and indeed the industry and union groups representing workers and employers with a particular interest in the industry are in fact here. It is the right vehicle to make this correction. It does not flow in the classification structure. Where it does matter is clause 4.7, the other appropriate award classification. That doesn't lead to people being award‑free, but that doesn't necessarily matter.

PN481

Can I deal now with the issue of managers, which is where this problem often arises. Do your Honours, Commissioner, have the award convenient? It's useful to look at - - -

PN482

ACTING PRESIDENT HATCHER: Yes.

PN483

MR SAUNDERS: - - - level 4 of the classification, which starts at page 36.

PN484

ACTING PRESIDENT HATCHER: This is in schedule A.

PN485

MR SAUNDERS: That's right. The approach that has been historically taken as a matter of practicality is that if someone's 'principal purpose' is to manage people even if they are doing professional or scientific duties as part of their role, they're out. That is wrong. That doesn't flow from the award itself. We see at level 4 an extraordinarily open‑ended top of the career path for professionals and in particular at (e):

PN486

Managerial responsibilities form part of this classification.

PN487

The critical sentence is the final one in (e):

PN488

They continue to engage in the complex engineering and technology applications.

PN489

They're actually doing the work.

PN490

ACTING PRESIDENT HATCHER: I think traditionally there is a distinction that has always been made between supervision and management. That is, they're synonyms.

PN491

MR SAUNDERS: That is possible, but there is very little in it and it doesn't matter because the primary question is, is the person, regardless of whether they're supervising or managing as part of their role, performing the engineering or scientific duties? Inserting the principal purpose test at this point just reads both this classification and the coverage clause down.

PN492

You can easily imagine situations where someone is spending 80 to 90 per cent of their time managing and/or supervising their team but, nevertheless, does engineering as part of that. Project managers are the classic example of that. They fall within this award. They are professional engineers. They are engaged in that occupation.

PN493

ACTING PRESIDENT HATCHER: If you look at level 4, a professional, it's not even clear what function paragraph (e) serves.

PN494

MR SAUNDERS: Classification structures perform a number of different functions. One of them is to identify what duties can be asked of an employee or, to put it a different way, what an employee who is performing particular duties should be paid through what this does.

PN495

ACTING PRESIDENT HATCHER: I mean, if you look at paragraph (a) it says somebody at this level performs that type of work; paragraph (b) also is of the same flavour; paragraph (c) says at this level they do that. Paragraph (e) is just a free-floating sentence. Are we to assume that someone in level 4 does what (e) refers to?

PN496

MR SAUNDERS: Yes, that's how you access that pay point on that language. That said, you wouldn't necessarily read this as a list where every point (a) through (e) needed to be satisfied. There is no 'and'. They are, as your Honour observes, entirely free-floating clauses. It's describing a class of employees who perform various high level tasks. It really strikes you this isn't something that can be approached in a purposive way, and to the extent that that's the approach that's historically been taken, well, people have applied wrong tests historically in the past.

PN497

The example that Your Honour Acting President Hatcher raised, it will just take some time to adjust, and the previous occasion was - - -

PN498

ACTING PRESIDENT HATCHER: Don't worry about it, Mr Saunders.

PN499

MR SAUNDERS: Is the situation we have in a large engineering company, jobs advertised where engineering skills are a bonus, or it's helpful to have that background knowledge. What the question becomes then is: is the employer using them and they are taking advantage of the additional level of skill so as to require that employee to perform those duties? Can the job be performed in full without that qualification? In that sense, that employee, simply because of having the qualification, having the skill, if they are not doing the work, they are not engaged in the occupation of professional engineer or professional scientist within the meaning of this award, notwithstanding that they may be one.

PN500

There remains a two-step test. Are you in fact a professional engineer, which has its discrete definition under the award of having a particular qualification, and are you actually doing that work and required to do that work as the duties of your role? Then one considers what is your principal purpose, what environment now are you working in, such that is there another award that possibly applies?

PN501

ACTING PRESIDENT HATCHER: I think what tends to happen is in business involving professional work and the example you have just posited, the manager may not actually be doing professional work as such, but the professional qualification is regarded as desirable because then they can actually understand what their people are doing - - -

PN502

MR SAUNDERS: Yes, but they don't - - -

PN503

ACTING PRESIDENT HATCHER: - - - without actually having to engage in the work themselves.

PN504

MR SAUNDERS: Yes, it can be helpful to know what your staff are doing, but, at that point, you are not performing duties that require that qualification, remembering that that's the definition, and so it's a different line. It could be done, just not as well, by someone who doesn't understand the work, without contravening any overarching regulation as to this kind of work.

PN505

So, the second part of APESMA's note in that sense, which unhelpfully brings back in the principal purpose test for managers, it isn't actually helpful, it's going to continue to obscure the real question here, so it's a slight reduction in APESMA's proposed variation to the award.

PN506

ACTING PRESIDENT HATCHER: Sorry, where do we find - what is the form now that you are actually proposing? Where do we find that?

PN507

MR SAUNDERS: Is the Bench referring to the PDF bundle of APESMA material or do you have the documents separately?

PN508

ACTING PRESIDENT HATCHER: I have all the documents in separate windows.

PN509

MR SAUNDERS: In the draft determination on page - unhelpfully it's not paginated - on the second-last page of that document - - -

PN510

ACTING PRESIDENT HATCHER: Is this (e)?

PN511

MR SAUNDERS: (e), yes.

PN512

ACTING PRESIDENT HATCHER: That's your current proposal?

PN513

MR SAUNDERS: That's the one. The wording, of course, we're not wedded to it, but the point is that should identify clearly what the real test is, that this principal purpose application has been improperly excluding people from coverage of this award, and put a note in the award that appropriately identifies that. What is dropped is on the next page.

PN514

ACTING PRESIDENT HATCHER: The full clarity bit?

PN515

MR SAUNDERS: Yes.

PN516

ACTING PRESIDENT HATCHER: So that's not pressed?

PN517

MR SAUNDERS: It doesn't in fact clarify anything.

PN518

ACTING PRESIDENT HATCHER: All right, okay.

PN519

MR SAUNDERS: That's all I wanted to say about coverage. As I say, the history is set out in more detail in writing, unless there's anything from the Bench.

PN520

In terms of the employer position, as I understand it, it's that no change should be made to the award and nothing should be done. That is, we would say, unhelpful. The situation as it exists at the moment is unsatisfactory as to the way this award is being applied both in litigation, and that raises an apprehension that that situation shouldn't be allowed to persist, but it doesn't require a rewrite of the classification structure.

PN521

The second reason that this matter has been called on by the Commission is to deal with the situation imposed by now clause 18 of the award, the compensation for additional hours, unsocial hours call-back. I apologise, it is not in fact clause 18, it is clause 13.

PN522

13.3 is the major difficulty. As a separately constituted Bench identified in 2020, this clause does not meet the modern award objective. It must be changed. The reason it doesn't meet the modern award objective is because it does not provide anything except the most aspirational compensation for work performed outside of the 38 hours that the salaries that this award provides for. It is not surprising that Mr Crowther didn't take car allowances into account when working out whether people were compensated for overtime. How on earth could that possibly compensate? The amorphous nature of this clause leads to that kind of thinking.

PN523

APESMA's proposed variation that would introduce overtime penalties, call-back allowances, afternoon, weekend and night shift rates, the Bench has seen in the evidence of Ms Baulch that that work is in fact being performed. It doesn't need to be universal. This isn't a question of degree. There are, as a matter of fact, professional engineers who work shifts. The construction industry is the example that's set out there.

PN524

The Bench's observations has previously observed, and I think it was again on the last occasion, that most of the comments that we made in respect of overtime, one needs to set a rate for overtime, whatever it is, before we can move to questions of salary packaging, annual salary arrangements and annual averaging. The same is of course true for the rest of the clause: (b) and (c), call-backs; (d), being bothered in your personal life because you've got a mobile phone; and, importantly, (e), shift.

PN525

APESMA's proposal, which is set out in the draft determination - takes up most of it - reflects an amalgam of the rates that were being paid under some of the predecessor awards. There's a detailed analysis of those predecessor awards at annexure A to Ms Baulch's statement. One of those is illustrative. If one goes to annexure A, again this document is unhelpfully unpaginated, but at the second page of annexure A, the Scientific Services Professional Scientists Award 1998, which was one of the primary awards, what one sees there is that amendment which brings in the current clause is dealt with in - was inserted in December 2002.

PN526

That variation was made following the 2002 Excess Hours case, which set what are now the standard overtime rates. It wasn't included - the 150 per cent for the first three hours, double time thereafter, it wasn't included in this award for reasons lost to history and the determination itself doesn't explain this, but what it reflects is an intention in these underlying awards to pick up the concepts set out in that case.

PN527

Going through that annexure, the second column, what your Honours will see is there's a lot of variation, but several of the underpinning awards did include payment for overtime at penalty rates. The same is true of shift loading; it's a mix.

PN528

At annexure B, there's an analysis of other modern awards with professional classifications and the overtime rates there. Unsurprisingly, one sees overwhelmingly - and there's a dispute between us as to whether it's 23 or 25 of the 30 awards - but the overwhelming majority contain those standard overtime clauses which the union seeks to be inserted. The same with shift loading. That's not surprising. These rates, these levels, these percentages were all set historically as part of test cases and one would need some reason to depart from what is otherwise a unitary standard.

PN529

As to differences, the AiG submissions identify some of the professional awards that don't capture, for some professionals, overtime. It's always at the higher level. One of the examples given is the Medical Practitioners Award in which senior doctors don't get overtime. Can I provide the Bench a copy of that award. It's one example; it's been picked, effectively at random, from the list of six or seven in the AiG submissions, but what it demonstrates is caution should be exercised before accepting the general proposition that professionals are all highly compensated and don't get rates.

PN530

The starting point for it to all make sense is at page 4 where we see the definition of senior doctor. It's quite senior classifications; it's post university training, I would think. It is right, if we go along to - sorry, it is useful to look at, firstly, the wage rates under that award, starting at 13. One sees it goes from intern through to community medical practitioner, so fully trained, fully qualified. Senior career medical practitioner is slightly before that, but doctor until we get to specialist. These are very high rates for the work of senior doctors that do not receive overtime payments, capping out at $140,000 for a director of medical services. Quite different to the scale one sees in the Professionals Award, which reaches 90 at level 4, but at the lower levels is significantly below that.

PN531

More importantly, at page 22, clause 20.2, 'Overtime', the AiG is quite right that senior doctors are exempted, but that doesn't mean that there's not a wide scale of professionals in almost directly comparable levels of qualification that aren't receiving overtime and weekend rates at precisely the rates that APESMA seeks.

PN532

ACTING PRESIDENT HATCHER: Excuse me, Mr Saunders, my laptop is demanding facial recognition. It's one of our security features.

PN533

MR SAUNDERS: It's always alarming when it doesn't work.

PN534

ACTING PRESIDENT HATCHER: No, it needs my phone to do it, unfortunately. Go on.

PN535

MR SAUNDERS: Certainly. What we see at page 24, clause 1, 'Shift Penalty Rates' - described as outrageous for professionals by the employer groups - - -

PN536

ACTING PRESIDENT HATCHER: Sorry, what clause?

PN537

MR SAUNDERS: 21.1, starting at page 24, but if we go over to page 25, senior doctors get them. It seems an odd situation where a director of medical services earning $140,000 who works on Sunday - and the odds of one of them being employed as a casual seems rare, but it's possible - who works on Sunday gets a penalty rate and yet the graduate engineer/construction engineer who has been rostered on with the workers he supervises does not. There's no principal basis for that and there's no principal basis to depart from these test case-established standards.

PN538

I don't propose to repeat the detailed written submissions that have been filed by my client in respect of why the APESMA proposal meets the modern award objectives. We know that there are workers working these patterns of work under the award. One knows from the evidence that's before the Commission, detailed and rigorous survey evidence, the evidence of a union official who has worked in the industry for 42 years and whose entire job is speaking to people who are covered by this award, the work is there. We know it's not being compensated. The proposal before the Commission is the only suggestion that in fact fixes the problem and it aligns it with, effectively, the rest of the modern awards scheme.

PN539

I did want to say a few things about the various AiG proposals. The first is the introduction of a six-month averaging scheme which appears to be the annualised salary regime that was previously rejected by the Bench with the alteration being a shorter time period. It shouldn't be adopted for the same reason and it can't be adopted without the value of the excess on sociable hours being quantified.

PN540

In fact, do your Honours have the AiG proposal convenient? It's probably more useful to look at it. What I was talking about there is the proposal at A. I withdraw the previous submission, I must have conflated two different proposals. It appears identical to the previous proposal that was rejected and it's averaging over 12 months. No mechanism for review, no mechanism of ensuring that the �it's an extraordinarily long period for particularly if one considers the evidence that's before the Commission as to Game's workers and the undesirability of (indistinct) and there's no attempt to justify it.

PN541

The second change that's proposed is at 5. This is purportedly directed at the Bench's concern as to clause 13, that's why we're here. We see that the proposal is that for every single incident, excess work, call-backs, effectively standby and night, afternoon or weekend shift, the compensation will be payable at the applicable minimum hourly rate.

PN542

There is no attempt to say why that ought be so for level 1, why they shouldn't get a penalty for working excess hours, like almost every other award-covered employee and certainly every other award-covered employee paid at their rates, and it involves no compensation for working shift. It doesn't even make sense for 14.3B(5). It's just if you work on that you don't get a loading. It doesn't address the issue and it appears just to be ambit claim.

PN543

We also see at D another proposal that was the subject of criticism by the previous Bench which is the introduction of a global set-off clause. Regardless of any existing contractual rights that might or might not exist to absorb over-award payments, the proposal is simply to allow employers to absorb any over-award payment, a completely unrelated car allowance for example, into this overtime. It should be rejected for the reasons it was before.

PN544

The proposal for level 2 to 5 employees, so everyone who isn't a graduate, the bulk of the workforce, in other words, is to not identify any form of compensation. A slightly more rigorous process including a review for what exists currently. Obviously for the same reason, that proposed clause couldn't possibly satisfy the Modern Awards objective. It's already been rejected and it is not clear why it is being reproposed and on what basis it could be.

PN545

The time in lieu clause appears to be standard. In the AiG reply submissions � does the Bench have those convenient? There's a further variation sought at page 33 of the submissions at paragraph 98. As I understand it, it's put that if the APESMA variation is accepted in full or in part, again it's reiterated that this global set-off clause should be introduced.

PN546

Again, no engagement on previous criticisms of this precise proposal. Again, it's a wholesale introduction of a brand new right of set-off which may not exist in employees' contracts, they may not have bargained for. These above-award payments may have been negotiated in a completely different way. It should not be made.

PN547

Finally, the clause is explained at paragraph 103. There is an attempt to address the issue that such a set-off clause is not, in fact, an allowable award matter, it's the same submissions that have been made and rejected before but the point is it's not � even if one gets there, it's not appropriate.

PN548

There's something said about interfering with common law rights. That's what these awards do, that's the point of them and the clause itself, in any event, does that by granting a new one for at least some employers who don't presently enjoy such a global set-off.

PN549

The final substantive proposal put by AiG is at 113 to 115 which is that any implementation be delayed for at least 12 months. The difficulty with this submission is the same as the global difficulty with AiG and ABI's submission in that it relies on a series of factual propositions about the scope of the effect that various people have these problems, that it will cause chaos across all industry, that throughout both sets of submissions their members have views and have said things, none of which is supported by a scrap of evidence.

PN550

There has been no effort to put forward anything. We don't even know what employers these groups are here to represent. The Bench in the 2020 decision made it very clear that the approach by both unions and employer associations of simply turning up, relying on historical involvement in the award and historical standing as a representative group without more is no longer available.

PN551

It shouldn't be entertained in these proceedings, particularly when the Union has set out in some detail in what is reliable and probative evidence, the extent of the problem and the difficulties that the current clause is causing, and on the AiG proposal which I should say is supported by ABL, would continue. Did the Bench have any question about the hours of work variation?

PN552

ACTING PRESIDENT HATCHER: Yes, just give me a second, Mr Saunders. One of the issues in this award which hasn't been taken up is whether the minimum salary rates were being properly fixed.

PN553

MR SAUNDERS: Yes.

PN554

ACTING PRESIDENT HATCHER: So I'm just looking at a four/five year degree qualified graduate professional has a minimum salary of fifty-seven-something thousand dollars. In the Teachers Award which you're familiar with, Mr Saunders, the equivalent number is 72,000.

PN555

MR SAUNDERS: Indeed, because the Bench commenced the re-valuing process by aligning that to the C1B rate. It's beyond the scope of what we can deal with today, there are historical reasons that these rates are tagged in this particular award. I'm not suggesting they're correct but there is more of a background than in the Teachers Award where it just happened.

PN556

As you will recall, Vice President, the level 1 graduate professional is deliberately set at the C5 rate or it was deliberately set at the C5 rate in the 90s and it's to do with the � one of the differences, in fact, between training engineers and teachers, it's to do with the existence of graduate programs. These submissions are at a very high level and I would need to put more thought and, indeed, bring these decisions through and some analysis should be undertaken of whether that remains appropriate given the broader coverage of this award and now that it strays into information technology, in particular, which doesn't work in that way, and medical science (indistinct).

PN557

The idea is that notwithstanding they have a degree they're working under quite significant supervision and learning on the job. So that was, as I understand it, the justification for putting them there. So as I say, whether that's right or not and whether that should be maintained in this award is an open question but there is some historical background to it that would need to be explored first.

PN558

Of course there is the persisting issue of compression, in any event, given that the percentage rates don't align in any event. The grad engineer is different to teachers in that respect because you don't have trainee children. So once you are teaching a classroom, it's the same process and you would recall, Hatcher VP, that was explored in the pay equity aspect of those proceedings.

PN559

ACTING PRESIDENT HATCHER: I mean, even, I assume 8.1.4 is � what � that's four years' experience, is it?

PN560

MR SAUNDERS: That's right.

PN561

ACTING PRESIDENT HATCHER: So even at four years' experience you're still only at 64.

PN562

MR SAUNDERS: I agree. There's a visible issue but it is a more complicated question than simple realignment in the ACT childcare teachers approach way.

PN563

ACTING PRESIDENT HATCHER: I think the other thing is of course that a teacher does not have overtime.

PN564

MR SAUNDERS: I now can't recall; I think that's right.

PN565

ACTING PRESIDENT HATCHER: That is a proper � I mean, one view might be that a proper review of salaries might dispose of the issue.

PN566

MR SAUNDERS: It could quite sensibly be said that a full-scale review of the entire external relativity system is now required, 30 years having elapsed since it was set and the dominant industry perhaps no longer being metal trades. It does seem, I have to say, the kind of question that touches multiple awards and may be better approached on a global basis. But I can say without instructions that my client would be very pleased to see it happen.

PN567

ACTING PRESIDENT HATCHER: In the award as it currently stands, clause 14 - - -

PN568

MR SAUNDERS: Yes.

PN569

ACTING PRESIDENT HATCHER: - - - and I think, tell me if I'm wrong but this is a fairly recent innovation, gives both an annual salary that's described as an annual wage but also a minimum hourly rate.

PN570

MR SAUNDERS: Yes.

PN571

ACTING PRESIDENT HATCHER: What function does the specification of a minimum hourly rate for full-time employees serve? Is that suggesting that that's paid for all hours worked?

PN572

MR SAUNDERS: No because one gets that figure, the minimum hourly figure by simply dividing the annual salary by 52 and 38, possibly 52.12. Would your Honour bear with me one second?

PN573

ACTING PRESIDENT HATCHER: I think it may have been unintended because certainly clause 13 seems to assume - - -

PN574

MR SAUNDERS: Yes.

PN575

ACTING PRESIDENT HATCHER: - - - that that is the only mechanism by which you might be paid something in addition to the annual salary.

PN576

MR SAUNDERS: Yes and it assumes that you won't necessarily be paid for every hour worked.

PN577

ACTING PRESIDENT HATCHER: Yes.

PN578

MR SAUNDERS: I suspect that is just � that the introduction of that table is just a flow-on from part of the plain language re-drafting processes. I don't think that it has been considered in that way but this award doesn't presently guarantee you get paid for all hours you work and that's the problem we're here to fix today.

PN579

ACTING PRESIDENT HATCHER: All right.

PN580

MR SAUNDERS: It does mean, however, there's a handy mechanism for calculating what overtime is, so that is convenient.

PN581

ACTING PRESIDENT HATCHER: Yes, all right.

PN582

MR SAUNDERS: Thank you.

PN583

ACTING PRESIDENT HATCHER: Ms Bhatt.

PN584

MS BHATT: Yes, thank you. Can I just start by trying to answer that question that's been put to Mr Saunders. It is my understanding that the minimum hourly rates were introduced as a product of the redrafting process undertaken during the four-yearly review. It's also relevant that clause 10.2 of the award which relates to part-time employees and clause 11.1A which relates to casual employees - - -

PN585

ACTING PRESIDENT HATCHER: Yes.

PN586

MS BHATT: - - - requires the payment of those hourly rates to such employees.

PN587

ACTING PRESIDENT HATCHER: With respect to a casual - - -

PN588

MS BHATT: Yes.

PN589

ACTING PRESIDENT HATCHER: - - - if a casual works 50 hours, they will be paid for 50 hours, is that right?

PN590

MS BHATT: That appears to be the case, yes.

PN591

ACTING PRESIDENT HATCHER: So what's the rationale for a full-timer to be paid 38 hours for working a 50-hour week but a casual gets paid 50 hours work in a 50-hour week?

PN592

MS BHATT: We would say that the award expressly requires an employer to provide some form of additional compensation to all employees for working additional hours. Whilst that's not in the form of an hourly rate that's prescribed by the award, it expressly contemplates various forms of compensation including an additional monetary entitlement.

PN593

ACTING PRESIDENT HATCHER: I mean, it's not even clear that it needs to be monetary, is it?

PN594

MS BHATT: No, it does not have to be monetary.

PN595

ACTING PRESIDENT HATCHER: You can buy them a pizza and call that compensation?

PN596

MS BHATT: It does not exhaustively describe the forms of compensation that can be provided to an employee.

PN597

ACTING PRESIDENT HATCHER: We have no evidence before us that anybody actually does any of this, do we? I mean I would be very surprised if they do.

PN598

MS BHATT: I think that the survey results that have been tendered in full today might indicate that employees are being provided with other forms of compensation. Some of those questions were asked in those surveys, 'Do you receive any of these other types of compensation?' And my recollection is that some employees did but without looking at the reports again I can't take that any further as to the extent to which that's the case or the prevalence of that practice in the evidence.

PN599

ACTING PRESIDENT HATCHER: Right.

PN600

MS BHATT: As the members of the Bench are aware, we've filed two submissions, 19 September and 9 November, which deal comprehensively with the key issues in the proceeding, so we continue to rely on those and I won't repeat them today. For the purposes of our submissions today, in relation to the hours of work and remuneration issues I'll deal with the Union's evidence and some of the submissions that have been made by counsel today.

PN601

In relation to the coverage of the award, our intention had been to rely on our written submissions and to deal with any questions that the Bench might have. In relation to the supplementary submission that's been filed by the Union yesterday, I mean, at the very least it is an elaboration on what's been put before or perhaps a slight shift in position to what's been advanced in the past. I'm not in a position to deal with all of the detail that is in there, so we would seek the Commission's leave to further consider those submissions and if we wished to put anything in reply, then to do so by the end of next week.

PN602

ACTING PRESIDENT HATCHER: All right.

PN603

MS BHATT: Thank you. Turning then to the issues concerning hours of work and remuneration and the evidence of Mr Crowther and Ms Baulch. Starting with Mr Crowther's evidence it relates to three types of surveys. The annual remuneration surveys conducted by the Union of engineers, of scientists and the survey that was conducted for the purposes of the four-yearly review.

PN604

We would make the following salient points about Mr Crowther's evidence and the surveys. The evidence about hours worked by employees is, in our submission, unreliable and should be given little, if any, weight. The annual remuneration surveys in relation to both engineers and scientists did not ask respondents whether they actually keep any records of their hours.

PN605

We don't know if any of the respondents who completed the survey did so by reference to any records, and that can be seen from the survey questions that have been tendered today. Whilst the survey conducted during the four-yearly review did ask that question, it didn't direct respondents to review or consider those records when responding to questions about how many hours they work.

PN606

The net effect of all of this is that the survey data essentially reflects nothing more than an employee perceptions about how much they might have worked. It's not based on a forensic examination of records documenting hours worked and it's, therefore, not evidence of actual hours worked. There's also been no other evidence that's been tendered in these proceedings about hours worked. There's no timesheets that have been advanced through direct evidence from individual employees or any other evidence of that nature.

PN607

ACTING PRESIDENT HATCHER: There's no reason to think that any such records exist, is there? I mean, if the award doesn't have an overtime requirement why would anybody be keeping those records?

PN608

MS BHATT: We anticipate that it is very unlikely that such records are being created and/or maintained where that's not required and we certainly think it's not likely that employees keep those sorts of records for their own purposes. I mean, as I say, that question was asked in one of the surveys but in the others the question was not even put. In any event, even if it was it's not clear that anyone looked back at any such records, even if they existed.

PN609

ACTING PRESIDENT HATCHER: I mean, the point is, I think, that it's not a criticism to say that they weren't asked for these records when you've conceded in all likelihood there are not records.

PN610

MS BHATT: No, I accept that and we don't advance that as a criticism of the survey that the question was not asked.

PN611

ACTING PRESIDENT HATCHER: I mean, I think Mr Crowther readily accepted the survey has limitations, it's union members only, to a certain extent it's self-selecting.

PN612

MS BHATT: Yes.

PN613

ACTING PRESIDENT HATCHER: It may attract those who have an issue about hours but nonetheless it must be taken as an indicative that where the percentage is correct that there is a proportion of people covered by this award who work additional hours for no additional compensation.

PN614

MS BHATT: Certainly we would not quibble with the proposition that some employees work additional hours. That's uncontroversial. I think what is contested is the extent to which employees work additional hours without appropriate compensation. The second point I was going to make has just been mentioned by the Acting President which is, as Mr Crowther conceded, that the survey conducted in the four-yearly review was more likely to have been completed by those who had a concern about their working hours.

PN615

We say that potentially skews the survey results. The evidence provided at paragraphs 11 to 20 of Mr Crowther's evidence is confined to the base rates of pay for professional employees, except that in some cases it also took into account overtime payments that were being made to the employee. But it means that it doesn't account for any other monetary or non-monetary forms of compensation that were being provided to the employees.

PN616

The evidence, therefore, potentially understates the level of compensation that's being afforded to employees and it's of limited value to the Commission because it doesn't provide a complete picture of what is, in fact, being reported to this cohort. Despite that, what the evidence does show is that in practice professional employees are well-paid and we make this point in our written submissions at paragraph 28B in November.

PN617

We would supplement that material by the evidence of Mr Crowther. At paragraph 15 of his statement he says that the median � he identifies the median base hourly rate paid to engineers for ordinary hours of work. When one compares those to the base rates prescribed by the award they range from being 11 per cent higher for level 1 through to 73 per cent higher for level 4. In respect of level 2 it's 40 per cent higher. In respect of level 3 it's 60 per cent higher.

PN618

In relation to the evidence of Ms Baulch, we'd start by saying that various parts of the evidence clearly constitutes hearsay evidence which can necessarily be given limited weight. We've filed a document yesterday that identifies by underlining the relevant parts of the evidence. Does the Bench have that document? Otherwise, I can hand it up.

PN619

ACTING PRESIDENT HATCHER: Yes, I have it.

PN620

MS BHATT: Thank you.

PN621

ACTING PRESIDENT HATCHER: In a tribunal we're not bound by the Rules of Evidence. It doesn't get you very far by saying that the evidence is hearsay.

PN622

MS BHATT: We say that the evidence should be given limited weight. We've not sought to object to the admission of the evidence, the statement's been tendered, but we say that the nature of the evidence limits its probative value. In addition to it being hearsay in nature it's about unidentified employees. We don't know who they work for, we don't know what their employment arrangements are, we don't know how many employees Ms Baulch is referring to.

PN623

It is impracticable in the circumstances for the veracity of that evidence to be tested by anyone who seeks to cross-examine her. Before I move on from that points I would also say that the evidence that was identified in the document that identified the objections that we'd advanced, should also be given limited weight for the reasons set out in that document.

PN624

Most of the evidence that we have identified as being hearsay in nature in Ms Baulch's statement, appears to relate to hours worked by employees and, in particular, the number of hours that are worked by those employees. At paragraphs 20 to 40 of her statement she then gives evidence about different categories of engineers and essentially this evidence deals with two key propositions.

PN625

The number of hours worked which, as we've said earlier, that evidence is of limited probative value; and how employees are compensated, that is the forms of compensation that they receive. And the recurring theme in this evidence is that professional employees are paid by way of a salary and they do not receive other separate forms of compensation typically such as overtime payments or shift penalties.

PN626

To that extent there seems to be some common ground between the parties. We don't dispute that professional employees are commonly remunerated by way of a salary in the absence of separate monetary entitlements. As we've set out in our written submissions, this is a matter that's relevant to the impact that the proposed changes would have on employers.

PN627

Dealing with the analysis undertaken by Ms Baulch at annexure A of pre-modern awards, there are 21 pre-modern awards that are identified there and we will summarise that evidence in this way. Only 10 of the 21 awards stipulated a span of hours. However, two of those awards contemplated compensation for additional hours in the same manner as the modern award, so it didn't necessarily follow that work outside the span of hours attracted an overtime rate.

PN628

On our analysis, none of the awards prescribed an overtime rate that was required to be paid without exception to all employees covered by it. Of the awards that did prescribe an overtime rate, they all created at least some exception to the circumstances in which they were payable. For example, some awards contained an exemption rate, if you're paid in excess of a certain amount above the salary, certain parts of the award didn't apply, including overtime entitlements.

PN629

Others excluded employees classified at higher levels from the application of those overtime provisions and in some cases although the award prescribed an overtime rate, it nonetheless afforded employers the discretion to remunerate employees in some other way or allowed the employer and employee to reach agreement about another form of compensation.

PN630

Most of those 21 awards adopted a similar model to that which is contained in the pre-modern award � in the modern award. Only four awards prescribed specific entitlements for being recalled to work or standing by and only three contained detailed shift work provisions. We say that this history supports the following propositions.

PN631

That the current award provisions concerning hours of work and remuneration have, in at least some context, applied for well over 12 years and the application for those terms and conditions is, therefore, long-standing. This is again a matter that goes to the significance of the changes that have been proposed by the Union and the impact that they would have on employers who have, in effect, applied the current regime for many years, albeit to some extent under predecessor instruments.

PN632

In relation to the submissions that have been made by counsel today, there has with respect been some mischaracterisation of our submissions to the extent that it's been advanced that we've not, for instance, grappled with some of the complexities associated with the proposed absorption clause or not sought to justify certain elements of our proposal in the September submission but that's not the case.

PN633

Each element of that proposal has been dealt with in writing in our September submission. I don't need to take the Bench through all of that. I'll just deal with the submissions that have been made today about the absence of evidence that's been called by the employer parties. As the Bench would recall, we sought an extension of time in part for the purposes of endeavouring to file evidence in these proceedings and despite our best efforts we were unable to do so.

PN634

Although members are deeply concerned about what's been proposed, there is reluctance, as there so often is, to give evidence in public proceedings like these. As I say, it's unfortunately not uncommon. We also conducted a survey of our members and the survey told us what we expected that it would but it didn't generate the number of responses that we had hoped for, such that we thought that it would be or it might be reflective of a broader cohort of employers and, therefore, of assistance to the Commission and it's for that reason in part that that evidence was not filed.

PN635

ACTING PRESIDENT HATCHER: Speaking for myself, I've got no understanding why an employer would have a concern about giving evidence before the Commission. It happens in award cases all the time and I have never encountered the slightest difficulty as a result.

PN636

MS BHATT: It's unfortunately a very common experience that we encounter when engaging with our members and I think that there are many and varied complex reasons why employers elect not to participate in these proceedings by way of giving evidence. I think it's also relevant that many of the propositions that we've advanced in support of our submissions are not controversial or they're self-evident.

PN637

It's uncontroversial that most employees are not paid by the hour under this award. Uncontroversial that most employees are paid by way of a salary that exceeds the base salary prescribed by the award and it's therefore self-evident that the proposed changes are substantial and will, therefore, have a substantial bearing on the arrangements that are in place in practice.

PN638

I am not sure that it's necessary for evidence to be put before the Commission in order to establish a lot of what we have advanced.

PN639

ACTING PRESIDENT HATCHER: Well, the evidence seems to suggest that the large majority of employees under this award are paid well above award rates. It may mean then inclusion may mean then that the variations would have no impact whatsoever except for a minority.

PN640

MS BHATT: Well, I think that at least one of the implications would be in relation to employees who are paid well above the award. The extent to which employers have or don't have an ability to absorb those new entitlements into over award payments that have been made, which is something that we have sought to canvas in some - - -

PN641

ACTING PRESIDENT HATCHER: Why is there any doubt about that? It's not a question of absorption. It's a question of whether you paid the amount that the award requires to be paid. And if you're paid an amount that's more than that well you've complied.

PN642

MS BHATT: Well, it might be that there is no underpayment that arises in those circumstances. But, ultimately, as I understand it it will turn on the manner in which that salary has been characterised and whether there is an ability to rely on it to set off one's award obligations. And in circumstances where such award obligations have not to date existed we have a concern that arrangements that are currently in place don't contemplate an ability to set off or to absorb however one characterises it.

PN643

There's also the issue as the Acting President identified earlier of the award permitting employers to compensate employees in ways other than monetary entitlements. The award expressly allows for that. And in circumstances where the award then introduces new monetary entitlements and an employer has agreed contractually to provide the other non-monetary benefits, there would appear to be potentially a windfall gain. To what extent does an employer then have an ability to alter those arrangements unilaterally? They might not have one and there is very clearly an unfairness that we say would arise from all of that now.

PN644

ACTING PRESIDENT HATCHER: Is one solution to all of this something like this? That if we decided to require some additional rate for overtime work whether a single time, time and a half, double time � whatever � that we have an exemption rate that you can get paid 'X' per cent above the minimum rates if you're exempt from the clause? That would seem to one encompass all those employers who paid salaries higher than the award; and/or two save the need to keep records and, three, deal with the issues you've raised, Ms Bhatt about whether current contractual arrangements encompass all award entitlements.

PN645

MS BHATT: Vice-President, I think, certainly we deal with a lot of the concerns that we have raised. It would alleviate what we say are some of the consequences that would flow. I think that careful consideration would need to be given to how that exemption rate is struck and what it is. Does it relate to certain classification levels? Does it require the application of a certain percentage above the minimum salary that's been prescribed? Is there a dollar amount that is set? I think those are all questions that we would need to grapple with. But, yes, is the short answer. Unless there are any other questions those are our submissions.

PN646

ACTING PRESIDENT HATCHER: Right, thank you.

PN647

MS BHATT: Thank you.

PN648

ACTING PRESIDENT HATCHER: Ms Thompson?

PN649

MS THOMPSON: Thank you, Acting President. Unless there's anything from the Bench, I propose just to rely on our written submissions, suffice to say counsel seem to have suggested today with respect to the coverage provision that perhaps the employer parties haven't grappled with that. With respect I think that's a slight mischaracterisation. Whilst we haven't grappled with it in as much detail as our friends with the union, I think there is generally accepted and certainly on behalf of my clients that � you know � the issue identified by the Bench is real and should be the subject of some kind of rectification. It's just to the extent that we differ in that behalf. So, thank you.

PN650

ACTING PRESIDENT HATCHER: Right, thank you. Anything in reply, Mr Saunders?

PN651

MR SAUNDERS: Yes. I don't think I quite said that the employer parties hadn't grappled with the coverage issue. What I said was that they haven't proposed anything to fix it which is undoubtedly correct. All the submissions go as to say that the Bench shouldn't do what APESMA has suggested. There's a bit of a different proposition.

PN652

Your Honour, Vice President Hatcher, asked me a question about the education or had the opportunity to check. It doesn't contain overtime but that is a very specific industry and the Commission would recall the hours of work clause in that award which are now lost. The ordinary hours of work are said to be variable because of the school term and employees are � the trade-off for that variability, working on a day by day basis perhaps over the week to week 38 is that they're not required to attend when the students aren't there. That extra time encompasses teachers' leave entitlements which is 20 days � sorry, let me step that back. The way that works is that teachers are only allowed to be required to attend work � 205 days of the year � 55 days less than a normal full-time Monday to Friday employee � 35 once you deduct the annual leave is option with that. So it is a peculiarity of this industry that doesn't exist here.

PN653

ACTING PRESIDENT HATCHER: Except that the figure I quoted is $72,000 is actually the figure for a long day-care centres. So they don't do that.

PN654

MR SAUNDERS: Yes.

PN655

ACTING PRESIDENT HATCHER: They - - -

PN656

MR SAUNDERS: Yes. And they have accordingly the percentage uplift. That perhaps is an issue with the further review of the Educational Services Teachers Award is required.

PN657

ACTING PRESIDENT HATCHER: Well, I mean I think it's been accepted with teachers that their salaries comprehend additional work which they perform out of school hours.

PN658

MR SAUNDERS: That's right. And which this award doesn't. It's never been fixed and they're not set bands so it doesn't appear that they were ever fixed in that way. Ms Bhatt drew the Bench's attention to the part time and casual provisions of the award which does appear to be where the hourly rate is specifically used. It does lead to � it was the casual worker � it does lead to this situation. Consider two employees in a game development studio. One is engaged for 21 hours a week and one is engaged full time. Crunch shifts � which we now from the evidence � the technical term and they work 60 hours one week. Part time worker appears to be paid under the award 60 hours and the full time worker 38. It just demonstrates the nonsense of the current clause 13.

PN659

In terms of the impact it is a matter that the evidence needs to be led. Of course, there's an impact of any change. It's degree is a question that requires evidentiary support which we just don't have. The idea that there is some obstacle to employers turning up and putting their case and putting their case forward seems difficult, given every other award modernisation or work value case that's been conducted here.

PN660

Could I, however, ask the Bench to go to APESMA's determination. The submission alerted me to an issue. One sees that the second page of that item (b) � this is the text of the overtime claim, and it's expressed as time and a half for the first three hours and double time thereafter. An issue arises as to what time means.

PN661

We see at the � a little further along, I'm sorry. At the proposed 13(b) and (c) at page � I think - six of that document.

PN662

ACTING PRESIDENT HATCHER: Thirteen what?

PN663

MR SAUNDERS: It's the proposed 13(b) penalty rates.

PN664

ACTING PRESIDENT HATCHER: 13(b).

PN665

MR SAUNDERS: The Bench will see a table there that sets out the standard penalty rates for afternoon nightshift and Saturday/Sunday public holidays, expressed in the more � what's now the more conventional Modern Award way of percentage of the minimum hourly rate prescribed by the Award. And that formulation I mean the claim is the claim. I am not instructed to walk you back but in terms of the issue that was being explored as to persons � the frankly unlikely situation where someone is being paid a significantly above award salary that contractually is expressed as relating to 38 hours only but is nevertheless being required to work more. I say it's unlikely.

PN666

ACTING PRESIDENT HATCHER: That might be a breach of contract.

PN667

MR SAUNDERS: Indeed. I admit this is - it's very abstract. But that minimum hourly rate expression is a safer way of avoiding unintended underpayments in those circumstances where persons are paid significantly above the award. As I say it seems like another thing if that employment practise was real. Some evidence could have been put forward but the notional issue has been raised.

PN668

As to the proposition as to an exemption rate it's conceptually similar to a high income threshold. The question, of course, would be what that rate is and whether it's high enough to avoid people, in fact, working for free. If it's directed at ensuring that nobody is working hours that they're not, in fact, paid for or covered by the award, some issues could arise. But I suspect that that is more a question of the level that it's set. It's certainly one option available for exploration. That's much more suitable than a generalised set-off clause.

PN669

ACTING PRESIDENT HATCHER: I mean one issue is that we wouldn't want to put employees who are paying high salaries to the task of having the key records of hours just to prove that they're paying very high salaries.

PN670

MR SAUNDERS: Yes. And it's not really what the union is seeking to achieve either. This is directed at the cohort of employees that Mr Crowther has identified that as a matter of fact when one looks at the hours they're working and what they're paid at or close to Award minimum a drop in the like the minimum rate. That's the target here. And the first step is probably that expression of percentage minimum hourly rate rather than time and a half.

PN671

The final proposition, some submissions have been made about the weight that ought be given to APESMA's evidence both in terms of the surveys, which have been designed and conducted by someone who is trained and qualified to do so. It's not a petition that's been circulated around a lunchroom. It's a proper and rigorous analysis. The reports on which are relied on by industry to determine market rates for engineers and Ms Baulch's long-term observations. I mean one questions the utility of submissions as to weight when it's all that the Commission has.

PN672

And certainly, Ms Baulch's views are more probative than submissions about a survey that the Commission hasn't seen. Unless there's anything further that's the reply.

PN673

ACTING PRESIDENT HATCHER: Right. All right. We thank the parties for their submissions. We propose to reserve our decision subject to the receipt of the further submission from AiG. And we'll now adjourn.

ADJOURNED INDEFINITELY�� [11.09 AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #1 WITNESS STATEMENT OF JACKI BAULCH DATED 13/09/2022 PN315

EXHIBIT #2 WITNESS STATEMENT OF MATEJA SIMOVIC DATED 14/09/2022�� PN318

ALEX JOHN CROWTHER, AFFIRMED......................................................... PN330

EXAMINATION-IN-CHIEF BY MR SAUNDERS........................................... PN330

EXHIBIT #3 WITNESS STATEMENT OF ALEX CROWTHER DATED 19/09/2022 PLUS ANNEXURES......................................................................................................... PN340

EXHIBIT #4 EMAIL FROM PROFESSIONALS AUSTRALIA DATED 22/11/2022 PN349

EXHIBIT #5 PROFESSIONAL ENGINEERS EMPLOYMENT REMUNERATION REPORT 2021-2022................................................................................................................ PN354

EXHIBIT #6 PROFESSIONAL SCIENTISTS EMPLOYMENT AND REMUNERATION REPORT 2021-2022.............................................................................................. PN358

CROSS-EXAMINATION BY MS BHATT........................................................ PN359

EXHIBIT #7 2021 PROFESSIONAL ENGINEER REMUNERATION AND EMPLOYMENT SURVEY................................................................................................................. PN371

EXHIBIT #8 2021‑22 PROFESSIONAL SCIENTISTS EMPLOYMENT AND REMUNERATION SURVEY.............................................................................. PN379

EXHIBIT #9 2022-23 PROFESSIONAL SCIENTISTS EMPLOYMENT AND REMUNERATION SURVEY.............................................................................. PN384

THE WITNESS WITHDREW............................................................................. PN454

EXHIBIT #10 2022 PROFESSIONAL ENGINEER REMUNERATION EMPLOYMENT SURVEY................................................................................................................. PN459