C2001/2682, Transcript of Proceedings [2001] AIRCTrans 2156 (31 August 2001)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 4, 179 Queen St MELBOURNE Vic 3000
(GPO Box 1114J MELBOURNE Vic 3001)
DX 305 Melbourne Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS

O/N 8845
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

VICE PRESIDENT ROSS
SENIOR DEPUTY PRESIDENT WATSON
COMMISSIONER LEWIN

C2001/2682, 2684, 2683, 2681,
2677, 2678, 2679, 2671, 2685,
2672, 2673, 2674, 2675, 2676
2686, 2687, 2688, 2680, 2752,
2750

APPLICATION FOR MINIMUM WAGE ORDER

Applications under section 501 of
the Act for adjustment of wages in
various minimum wage orders

MELBOURNE

10.30AM, FRIDAY, 10 AUGUST 2001

PN1

MR N. NIVEN: I appear on behalf of the Victorian Trades Hall Council and appearing with me is MR J. MORAN also from the Victorian Trades Hall Council. We appear on behalf of the AMWU, the CEPU, the CPSU, the ANF, the IEUA, the AWU, the ALHMWU and the UFUA, if the Commission pleases.

PN2

MR A. BURKE: I appear on behalf of the Shop Distributive and Allied Employees Association.

PN3

MR J. COONEY: I appear on behalf of the CEPU.

PN4

MR R. WAINWRIGHT: I appear for the Construction, Forestry, Mining and Energy Union.

PN5

MS R. DOYLE: I seek leave to appear for the Victorian government, in place of Mr Corning, today.

PN6

MS P. MURDOCK: I appear on behalf of the Victorian Farmers Federation.

PN7

MR P. EBERHARD: From the Victorian Employers Chamber of Commerce and Industry.

PN8

MR T. FORBES: I appear for the Australian Industry Group.

PN9

MR T. KLEMIS: I appear on behalf of the Bread Manufacturers Industrial Association and I was granted leave to appear on behalf of the Baking Industry Association of Victoria.

PN10

MR W. WADE: On behalf of the Australian Mines and Metals Association.

PN11

MS W. JONES: I appear on behalf of the Restaurant and Catering Association of Victoria.

PN12

MS V. PAUL: I appear for the Australian Retail Association of Victoria.

PN13

VICE PRESIDENT ROSS: Is there any objection from the application for leave to appear. No objection, leave is granted. We hope we won't detain you for very long this morning as we have had the opportunity to read the transcript of this matter when it was before Commissioner Lewin and the exhibits on that occasion. As we understand it, there is no opposition to the quantum proposed but there is opposition in respect of the question of operative date.

PN14

What I propose to do was to briefly summarise what we understand to be the submissions that have been made to date by each of the parties and then ask you to confirm that that still your position, or if there is anything you wish to add by way of supplementation at this time rather than have you repeat to the Full Bench what you have already put to Commissioner Lewin.

PN15

Is there any general objection to that course? If not, well we may start with you, Mr Niven. As I understand it, the VTHC on behalf of the applicants, I think other than the SDA in the proceedings before Commissioner Lewin argued that a consideration of the matters contained in section 501, subsection 4, paragraphs (a) and (b) supported a decision to grant the applications.

PN16

In particular you argued that in the May 2001 decision, that is a safety net review decision, the Commission took account of international, national and regional economic considerations and as part of that it necessarily had regard to the state of the Victorian economy. You also relied on some recent - or recent at that time, economic data which went to, as at May 2001, the unemployment rate in Victoria versus the national average and growth and employment generally in Victoria.

PN17

In relation to the quantum issues and I will come to operative date in a moment, I should also indicate that, as I understand it, the SDA adopted your submissions. In relation to operative date, you contended that in determining a section 501 application the principles established in a safety net review decision were relevant but not determinative and here you were particularly going to what is colloquially known as the 12 month rule and its application to the matter before us.

PN18

You argued that, having regard to the nature of the employees affected by these applications, they should have access to a wages adjustment on different terms as far as operative date was concerned to those applicable to Federal Award employees. The rationale for that approach was the fact that the employees affected by these applications were relatively disadvantaged insofar as their living standards were concerned because of the minimal nature of their conditions of employment and you relied on the Victorian Review Report to support those propositions.

PN19

You also relied on an extract from the 1997 section 501 decision where the Commission then said that they did not think it was necessary at that time to adopt any statement of principles in relation to the treatment of applications under section 501 and the operative date you were seeking is 1 June this year. Does that fairly deal with your position and is it still your position?

PN20

MR NIVEN: Yes, yes, your Honour. It would be - if we had the opportunity though we would expand on the argument in relation to whether or not the principles have - have relevance - - -

PN21

VICE PRESIDENT ROSS: Sure, well - - -

PN22

MR NIVEN: - - - and to the extent that they have relevance.

PN23

VICE PRESIDENT ROSS: Would you prefer to do that in reply or do it now?

PN24

MR NIVEN: I am happy to do that in reply, your Honour.

PN25

VICE PRESIDENT ROSS: Okay. In relation to the employers submissions VECCI advanced the main arguments and Mr Eberhard, as I understand VECCI's position it did not oppose the quantum of the adjustment sought, but it did oppose the operative date proposed by the VTHC and contended that the operative date of the adjustment should be no earlier than 10 September 2001 being 12 months after the rates were adjusted for the 2000 safety net decision and VECCI's position was encapsulated in a letter dated 7 June 2001 from Mr David Gregory of VECCI to the secretary of the VTHC and that material, I think, was exhibited before Commissioner Lewin.

PN26

The other employer representatives essentially adopted the position taken by VECCI. Ms Murdock, you then appeared as you do now, for the VFF. You advanced an additional reason for opposing the operative date, being the operative date in the Federal Pastoral Industry Award and potential administrative problems that might occur if the dates did not coincide between the operative date increases in that award and the operative date of the minimum wage order adjustments.

PN27

The employers also relied obviously as was implicit in the 12 months submission on paragraph 8(c) of the statement of principles determined in the May 2001 decision which provides for the 12 month gap. Mr Eberhard, is that - perhaps if I can start with you, does that encapsulate your position and - - -

PN28

MR EBERHARD: It does, your Honour, yes.

PN29

VICE PRESIDENT ROSS: Yes.

PN30

MR EBERHARD: I think it might be appropriate though that we would expand that somewhat a bit more. It would not take more than 10 or 15 minutes today.

PN31

VICE PRESIDENT ROSS: Okay.

PN32

MR EBERHARD: And we would concentrate on rather than the other aspects reiterating what we have said before, but concentrate on the operative date issues.

PN33

VICE PRESIDENT ROSS: Okay. Essentially in relation to the other employer representatives do they take the same, or a similar position they took on the last occasion, or perhaps if - does anyone have a different view to what was put on the last occasion, subject to what Mr Eberhard might say?

PN34

MR HALLS: Your Honour, we would certainly support that position that we had in the previous hearing, however, we may attempt to also raise additional issues regarding practice in other states and certain operative dates of Federal awards currently in place.

PN35

VICE PRESIDENT ROSS: Okay.

PN36

MS MURDOCK: The VFF has got quite an extensive submission here with regard to the operative date and also with the quantum of the increase there is a little complication with respect to wool harvesters and I want to address that in my submission, if I may.

PN37

VICE PRESIDENT ROSS: All right. Ms Doyle, as I understood the Victorian government's position, they did not oppose the quantum of the increases but, if I could put it this way, were a little vague about the question of operative date preferring that matter to be settled by consent between the parties. Has the Victorian government's position changed?

PN38

MS DOYLE: Look, in principle, your Honour the position has not changed. It remains that, prima facie, 10 september is the appropriate operative date but consistently with the principles - principle 8(c) that your Honour just mentioned in the Federal wage fixing principles, Mr Cooney indicated on the last occasion that that principle opens the door to that operative being brought back if there is consent between the parties and Mr Cooney certainly indicated that the government on that occasion suggested that that might be a good way for the parties to proceed. Now, of course, the government has not participated in any such discussions, not being an employer of any people affected by these minimum rates, and that remains the position of the government.

PN39

VICE PRESIDENT ROSS: Okay. Well, we might start with - with you Mr Niven, if you can deal with any supplementary material. I would encourage you to limit your submissions to just that supplementary material rather than going over the ground we have already covered.

PN40

MR NIVEN: Yes. Thank you, your Honours. I will try and be as brief as I - as I can be without limiting the substantive merit of our arguments. Our position that the operative date for the application of a - of adjusted minimum rates for the various Victorian industry sectors should be 1 June 2001. It takes its genesis from the only outstanding matter from section 501, the section of the Act that you must have first regard for, that is section 501(4)(a), The Needs of Victorian Workers and Their Families, and take into account the general level of wages in Victoria.

PN41

The VTHC submits that the operative date of the adjusted various Victorian industry sectors orders should be 1 June 2001. We submit, that as observed by Vice President Ross in the 1997 decision at page 9 of 14, that there is no jurisdictional impediment to the making of retrospective orders in respect of these matters.

PN42

VICE PRESIDENT ROSS: I think I also said that notwithstanding that it would still be the general principle of the Commission's reluctance to make a retrospective order.

PN43

MR NIVEN: Yes, yes, you also did.

PN44

VICE PRESIDENT ROSS: And I did not make a retrospective order on that occasion.

PN45

MR NIVEN: No. Section 503 provides that in relation to section 143, a decision or determination consisting of an order of the Commission under section 501(a), the order is not an order or an order reflecting an award. Again, as observed by Vice President Ross, section 146 does not apply to matters before me. The Commission also has a discretion to grant a retrospective operative date whether there are exceptional or unusual circumstances, section 146(2). Again, as observed by Vice President Ross, I agree that the Commission will grant retrospectivity in special or exceptional circumstances where the interests of fairness and equity warrant such a course.

PN46

We submit that there are exceptional or unusual circumstances emanating from section 501(4)(a), The Needs of Workers and Their Families. The joint governments of the Commonwealth, the State of South Australia and the Northern Territory's submission to the safety net review, wages 2001, proceedings detailed in chapter 2 the flow-on of the 2000 SNA decision into Federal Awards.

PN47

At point 240, on page 2 of 11, it is stated - at point 2, point 40 on page 2 of 11, it is stated:

PN48

The majority of awards have been varied in the first three months following the decision. At chart (a) 7.2, it is detailed that 62 per cent of Federal awards were varied for the 2000 SNA by the end of June 2000.

PN49

As submitted 67 per cent of Victorian employees have Federal award coverage and the remaining 33 per cent come under schedule 1A. The majority of Victorian workers are subject to a Federal award and the majority of Federal awards are adjusted following the safety net review of wages decision, within three months.

PN50

The general level of wages in Victoria was increased during May and June, while workers subject to the various industry sectors must currently wait until September for any catchup. Any proceedings of the Commission will, of course, always have reference to the objects of the Act found at section 3. Importantly, when considering the adjustment of minimum rates of pay at (d), it states:

PN51

The principal object of this Act is to provide the means:

PN52

(1) for wages and conditions of employment to be determined as far as possible by the agreement of employers and employees at the workplace or enterprise level upon a foundation of minimum standards and;

PN53

(2) to ensure the maintenance of an affective award safety net of fair and enforceable minimum wages and conditions of employment and;

PN54

(e) providing a framework of rights and responsibilities for employees -

PN55

sorry -

PN56

for employers and employees and their organisations which supports fair and effective agreement making and ensures that they abide by awards and agreements applying to them.

PN57

To paraphrase these objects, agreement making based on fair and reasonable minimum standards is given primacy in the Act. For those unable to reach agreement, terms and conditions of employment are regulated by an effective safety net. It is abundantly clear that the minimum standards of the award system are far more generous than that of the various Victorian industry sectors.

PN58

I am unaware of any recent application to the Commission for the certification of an agreement where workers are subject to the terms of the agreement regulated by part 15 of the Act. I suspect that this reflects the lack of bargaining power of such workers and their need for a realistic set of minimum terms and conditions of employment. The fact may also be influenced by the need of the Commission, under part 6E of the Act, to determine an award where workers are not subject to a Federal Award for the purposes of the no disadvantage test.

PN59

We submit that, without an effective and up to date set of minimum standards, part 15 of the Act actually prevents the primary objects of the Act having effect. While it is conceded that it is beyond your jurisdiction to alter the minimum conditions of schedule 1A we can immediately pass on wage increases. It is established that there are legislative differences between the minimum rates adjustments in the award system under part 6 of the Act and minimum adjustments for the various Victorian industry sectors under section 501.

PN60

In December 1997 the Victorian decision print P7 364 at the page marked 9 of 11, the Commission stated the following:

PN61

As has been pointed out earlier in this decision, especially by the Victorian and Commonwealth governments, there are legislative differences between the award system governed by part 6 of the Act and the scheme for minimum rates adjustment contained in section 501.

PN62

While there are legislative differences, the criteria the Commission must take into consideration when adjusting minimum wages under these separate sections of the Act, are similar. Both sections require the Commission to have regard for economic factors and the desirability of attaining a high level of employment in the needs of workers.

PN63

In regards to the various Victorian industry sectors at section 501(4)(a), the Commission must specifically take into consideration the needs of workers and their families, and take into account the general level of wages in Victoria. While minimum rates adjustments in the award system under part 6, and for the various Victorian industry sectors under section 501 are different, the Commission has established the decision regarding the adjustment of award minimum rate are relevant to these proceedings.

PN64

Further, in the 1997 decision, the Commission stated:

PN65

We turn then to consider the applications on their merits.

PN66

We commence this analysis by saying that, in our view, it would be a mis-application of section 501 of the Act to hold that the Commission should, as a result of its decision in a safety net case, automatically flow that decision to minimum wage orders.

PN67

In our view, the scheme of the Act requires an independent assessment by this Commission of any application made to adjust minimum wage orders. That is not to say, however, that a decision by the Commission in a safety net review case, is not a relevant consideration in considering such applications. There are at least two reasons why safety net adjustment decisions would be of relevant consideration for the Commission.

PN68

Firstly, such decisions normally contain a detailed review of the performance of the Australian economy, making specific reference albeit on a national basis, to economic factors such as those expressed in section 501(4)(b) of the Act. Indeed, the most recent safety net decision contains a detailed review of the Australian economy and it is trite to observe that the performance of the Victorian economy is of particular significance in that assessment.

PN69

Summarily, and again albeit on a national basis, the safety net review case contains a detailed discussion on the question of the needs of workers and their families. It would inappropriate to ignore such discussions on the basis that their focus was Australia wide rather than in relation to Victoria alone.

PN70

Secondly, we have noted that previous decisions of the ERCV ought to be regarded as relevant. In this context we note the submission of the VTHC that the ERCV did not fail to pass on in relation to the industry sectors previous safety net review decisions. Accordingly, to have regard to the present safety net review decision, would be consistent with the previous practices of the ERCV.

PN71

Put shortly, we think that there is a compelling argument in considering an application under section 501 of the Act to take into account any safety net decision of this Commission. Despite the argument of the Commonwealth of Victoria we do not think that the difference in the legislative scheme, in relation to Victoria, contained in part 15 of the Act from the ordinary award making powers of the Commission or indeed the powers to certify agreements in any way, justifies the approach of not considering that decision on its merits in relation to an application under section 501 of the Act.

PN72

To put this matter bluntly, we do not see that there is anything in the legislative scheme in part 15 of the Act which would require the Commission, in relation to an application under section 501 of the Act to ignore a decision in relation to the award safety net, simply on the basis that it was given pursuant to a different part of the Act.

PN73

At the page marked 9 of 11, the Commission stated the following:

PN74

We do not think it necessary at this time to adopt any statement of principles in relation to treatment of applications under section 501. However, we observe that consistent with our decision to increase rates in accordance with safety net adjustment the statement of principles set out in the April '97 decision will be relevant to any further applications under section 501 of the Act to adjust the minimum wage in any sector.

PN75

In its 1998 decision, regarding these matters Q5101, the Commission was concerned about the lag between the operation of the Federal and State decisions. On the page marked 6 of 10 of that decision, the Commission stated:

PN76

In our view, acceptance of a 12 month delay between the safety net increases applied to the Victorian Minimum Wage Orders would maintain the present lag between the operation of the Federal and State decisions and create a general issue in respect of the operative date at the time of each SNA. An ongoing lag of that kind would be unfair to low paid employees, relying on SNAs to maintain a fair minimum wage level.

PN77

Further, the Commission states:

PN78

Our aim is to bring the adjustment of Victorian minimum wage orders into line with the general operation of SNAs as applied in the Federal Commission.

PN79

Despite the intention of the Full Bench of the Commission in its 1998 decision, that is to eliminate the lag between the Federal and Victorian decisions, the Full Bench made the following comments in its decision in 1999, at point 9 on page 5 of 9:

PN80

In relation to minimum wage orders, the appropriate date of operation is the first pay period to commence on or after 10 September 1999.

PN81

This is consistent with the principles announced by the Commission in the SNR decision. The Full Bench sees no reason to depart from the SNR decision which generally speaking shall be viewed as a package and accordingly orders will operate from that date.

PN82

We submit that the notion that the safety net review of wages decision should only be imported into the Victorian minimum wage adjustment regime only as a pattern, that is, if one accepts the quantum, one must also accept the statement of principles, becomes more tenuous as each year passes. The Commission is well aware that the statement of principles commences by outlining the role of arbitration and the award safety net.

PN83

There is no mention of part 15 of the Act or various Victorian minimum wage orders. The first paragraph of the principles makes the following points:

PN84

Existing wages and conditions in the relevant awards of the Commission constitute the safety net which protects employees who may not be able to reach an enterprise or workplace agreement. The award safety net also provides the bench mark for the no disadvantage test that the WorkPlace Relations Act 1996 requires be applied before agreements are certified.

PN85

A little further:

PN86

This evolving award system, will remain the safety net referred to in the Act.

PN87

I would like to be clear on that point, the evolving award system will remain the safety net referred to in this Act. The principles make it abundantly clear, it is the evolving award system that is established at section 88(b)(2) of the Act that constitute the award safety net. The principles go on:

PN88

It will and is intended by the legislature to change in response to economic, social and industrial circumstances.

PN89

Principle 2 is in the following terms:

PN90

In the following circumstances an award may, on application, be varied or another award made without being regarded as a claim for wages and/or conditions above or below the safety net.

PN91

And then lists the subsequent principles. Again at part 15 of the Act all the various Victorian minimum wage orders are not mentioned. It is again clear that the principles have application to award variations only.

PN92

Principle 3 which relates to the previous national wages cases is unlikely to be utilised in this Commission. Principle 4, Test Case Standards and principle 5, Adjustment of Allowances and Service Increments, and principle 6, Work Value Changes clearly relate to award variations only. Principle 7, Standard Hours, is mitigated by section 501(6), no power re standard hours of an industry sector. It reads:

PN93

Nothing in this section empowers the Commission to make any determination, order or decision in relation to the standard hours of work in a declared industry sector.

PN94

We submit that the current statement of principles has, at best, minimal relevance to the matters before you. Workers subject to part 15 have only five legislated minimums and a rate of pay per hour for each hour worked. These minimums, apart from the rate of pay are not evolving or changing as standards in the award system are, but are set in stone.

PN95

We submit that the only elements of the principles that have any application in the matters currently before you are Principle 9, Federal Minimum Wage and Principle 12, Economic Incapacity. The Commission has acknowledged that there are legislative differences between minimum rates adjustments in the award system and minimum rates adjustments for the Victorian industry sectors and must determine these matters as separate cases.

PN96

The Commission has also acknowledged that, in our view, the scheme of the Act requires an independent assessment by this Commission of any application made to adjust the Victorian minimum wage orders and that a decision by the Commission in a safety net review case is of relevant consideration in considering such applications.

PN97

We submit that this position is clear. The SNA decision is only of relevant consideration in these matters. An automatic flow on of that decision is not a fait accompli. We submit that, just as the Commission is able to consider that the SNA decisions and the accompanying statement of principles has relevance to these matters, the Commission is under no legislated obligation to import either the quantum of the increase or the statement of principles directly into the Victorian regime.

PN98

We submit that as the current statement of principles has only limited relevance to these matters, they should not be part of your considerations today. As a minimum, we submit that the Commission should have consideration to modifying the principles to allow them to be relevant to the Victorian situation.

PN99

VICE PRESIDENT ROSS: I am not clear on why we would need to modify the principles, given that the principles provide for special cases to be processed in any event. I am not suggesting this is necessarily a special case, but that is the mechanism for modifying the principles, as you put it.

PN100

MR NIVEN: Yes, well we are submitting that the principles do not need to be imported, but for it to have - if they are to have - - -

PN101

VICE PRESIDENT ROSS: But even if - even if they were, the principles can be modified by the special case application.

PN102

MR NIVEN: Yes, that - that would be right, yes.

PN103

Does it follow from that, you are arguing this is a special case, if your first argument is unsuccessful?

[11.00am]

PN104

MR NIVEN: Yes, we would argue that it would be a special case.

PN105

VICE PRESIDENT ROSS: Okay.

PN106

MR NIVEN: As submitted, the Commission has for some time been concerned that there is a lag between the SNA decision and the flow on to Victorian workers. The Commission sought to eliminate that lag in 1998, by commencing a process of reducing that lag. The affect of principle 8(b) has been to stop that process dead in its tracks. In its decision, State Wage Case 2001, the Full Bench of the Industrial Commission of New South Wales, considered similar matters regarding awards that lagged behind the Commission's SNA decision and the affect of principle 8(b) on the actual wage rates of the low paid in that state.

PN107

It must be noted that in that jurisdiction the legislative provisions allow that the principles of the national decision may be adopted and varied for the state decision. Previously, the industrial commissioner of New South Wales had fashioned the federal principle 8(b), to allow for previous state wage cases to be phased in, where awards had not previously been adjusted. This proviso correlates with the new federal principle 8(c). At point 122 of its decision, the New South Wales Full Bench stated:

PN108

In this matter, the Labour Council proposed the continuation of the existing proviso to principle 8(b), together with - - -

PN109

VICE PRESIDENT ROSS: I am sorry, what page of the decision is that on?

PN110

MR NIVEN: 33 of 47.

PN111

VICE PRESIDENT ROSS: Yes, thanks.

PN112

MR NIVEN:

PN113

In this matter, the Labour Council proposed the continuation of the existing proviso to principle 8(b), together with the new federal principle 8(c), however the Labour Council also proposed that outstanding safety adjustments may be obtained without the 12 months delay occasioned by principle 8(b) by way of a special case. It was submitted that it was neither fair nor just that an award or awards could be indefinitely lagged behind in wages, because of previous oversights in making applications. Further, at point 124, the minister submitted that principle 8(c) of the federal principles, was of limited effect and did not address the problem where there occurred a lag in safety net adjustments for awards containing actual rates.

PN114

The Full Bench of the New South Wales Commission then goes on to state at point 130:

PN115

In these circumstances, it is appropriate for the Commission to continue to fashion the provisions of principle 8, so as to rectify lagging awards in the New South Wales system, which by their nature, in not being merely minimum rates awards, require special attention for the low paid.

PN116

Point 131:

PN117

In these circumstances, principle 8(c) of the federal principles, is not appropriate and provides far too restrictive an approach to remedy the problem we have identified.

PN118

Point 132:

PN119

We propose therefore, to amend principle 8(g), so as to provide adequate scope to deal with awards, which, by dint of delinquent approach to earlier applications, have been unable to access in a reasonable and timely way, safety net adjustments, due to the operation of principle 8(b).

PN120

At the hearing at 12 June, your Honours, as I made reference to a speech recently given by the president of the Commission - - -

PN121

VICE PRESIDENT ROSS: Just before you go to that. No that is fine, I have answered my own question, the principles are attached to that decision. Thank you Mr Niven.

PN122

MR NIVEN: Yes, I won't read from those notes again, as I did on 12 June, but I will hand those notes up, so that you have them.

PN123

At the 12 June hearing, your Honours, these notes formed exhibit A7 and in that speech, the president outlines the nature of the issue in relation to lags and that the existence of lags provides advantages for some and disadvantages for others.

PN124

To summarise our position, today we are seeking to have the quantum of increases from the Safety Net Review Wages Decision 2001 take effect in the various Victorian minimum wage orders from 1 June 2001. Proceedings for these matters are controlled by a separate and discrete part of the Act, 501. At 501(4) you are required to take into consideration the needs of workers and economic factors, when setting the level of minimum wages. Both of these matters formed a major part of the deliberations of the Commission in the SNA case.

PN125

The Commission awarded wage increases in May 2001, that it considered were economically sustainable and would not have serious consequences on the Australian economy as a whole. The quantum of the SNA increase has been agreed by the parties to these proceedings as appropriate and sustainable in the Victorian context and should flow on to the various Victorian minimum wage orders. The majority of awards are varied in the first three months following the SNA decision and 62 per cent of federal awards are varied by the end of June 2000.

PN126

The general level of wages in Victoria has increased since the SNA decision, but workers subject to part 15 of the Act have had no such increase. Workers subject to part 15 of the Act and the various Victorian minimum wage orders, are overly represented among low wage earners. The needs of the low paid is an important part of the decision in the safety net review case and must be an equally important part of your considerations today.

PN127

Due to accidents of industrial political history variations to the various Victorian minimum wage orders currently occur on 10 September, five months after the national decision to award minimum rates adjustments has been determined. The Commission acknowledged in 1998 that this occurrence disadvantaged the low paid and began a process to eliminate this lag. The lesser standards of part 15 and schedule 1A of the Act compared with the award safety net under section 82, prevent employees, subject to these sections, from reaching enterprise or workplace agreements.

PN128

Because of this reduced bargaining position, 356,000 Victorian employees, 23 per cent of the state's employee labour force, will continue to rely almost entirely on the five minimums of schedule 1A for their employment conditions. Although the conditions of employment in schedule 1A are beyond your jurisdiction to alter, you can immediately pass on wage increases. For the first time in proceedings of this nature, we now have a clear picture of the number and employment conditions of workers who are subject to the various Victorian minimum wage orders and schedule 1A.

PN129

Due to the mistakes of industrial and political history, these workers have lesser minimum terms and conditions of employment, than the least around our country and are over represented as low wage earners. These mistakes of history advantage some citizens and disadvantage others. While the limits on the terms and conditions of employment are legislated and beyond your jurisdiction to alter today, you can have regard to the needs of these workers and their families. You have the ability to grant in full the flow on, of the safety net review decision, to the Victorian industry sector wage orders and you have the ability to make those adjusted wage orders take effect from 1 June, which was the intention of the Commission in 1998. If the Commission pleases.

PN130

VICE PRESIDENT ROSS: Thank you Mr Niven. Mr Burke?

PN131

MR BURKE: Thank you. If the Commission pleases, the question today is the question of an appropriate operative date for these minimum wage orders. This is a Full Bench matter as per section 502. The Full Bench has been formed because of a public interest issue, that issue being the appropriate operative date for the safety net adjustment to apply to minimum wage order employees. It is appropriate for an earlier date than 10 September.

PN132

It is necessary, we say, to remedy an unfair and perpetual disadvantage suffered by the employees in question. It is not the fault of these employees that the operative date lags months behind the date given for federal award employees. We must also remember that these are low paid workers. We ask, is it in the public interest for Victorian minimum wage employees to wait three or four months for the wage increase than employees under federal awards, in the same industries, have enjoyed from as early as May or June? Why should these Victorian workers be penalised because they are not covered by federal awards, when all Victorian workers are covered by the Workplace Relations Act.

PN133

Fairness and equity should exist. We say that it is different to other states that have state commissions. Where commissions exist in other states, they are there to cover workers not covered by federal awards or agreements. That is clearly the situation in those cases and where there is a separate commission, the commission meets after the National Wage Case, has a hearing, determines its view, may set operative dates, they may be the same date, they may be a later date, but it is a separate commission.

PN134

In relation to Victoria, though, there is only one Commission and that Commission, when it makes a decision in relation to wages, should not discriminate between groups of employees in the same industry. And we say that is what the Commission does in other areas. In relation to the Northern Territory and the ACT, in those places, all employees covered by federal awards would receive the safety net adjustment on the same date. In other words, employees covered by the Act in the Northern Territory and the ACT receive the safety net adjustment on the same date, there is no lag or discrimination between these workers under common rule awards.

PN135

Finally we would say, employers have been on notice since the first hearing, that an earlier date had been sought. We say there is no disadvantage to them, they would have had the ability to keep records to enable them to adjust wages, if there is an earlier operative date. Similarly, they would have been aware of today's hearing and we would think that they would have advised their members of this. So their members as well would be aware that possibly an earlier date could occur and we would say that we seek an earlier operative date for the minimum wage order employee, because this is in the public interest. If the Commission pleases.

PN136

VICE PRESIDENT ROSS: What earlier date are you seeking Mr Burke?

PN137

MR BURKE: I would support the submissions of the Trades Hall in this matter.

PN138

VICE PRESIDENT ROSS: Okay. Do you have anything to add Mr Cooney, Mr Wainwright? No, thanks. Mr Eberhard?

PN139

MR EBERHARD: Your Honour, there have been four applications that the Commission has dealt with, that have involved an application for the adjustment of the industry sector rates. The decisions were granted in December of 1997, August of '98, August of '99 and September of 2000. VECCI would submit that there have been a number of common themes that have run through those decisions, but we will just take you to one of those common themes and expand upon that. And that is, that the safety net decisions are a relevant consideration for the Commission in an application under section 501, because such decisions normally contain a detailed review of the performance of the Australian economy, making specific reference on a national basis, to economic factors, such as those expressed in section 501(4) and secondly the ERCV did not fail to pass on, in relation to industry sectors, previous safety net adjustments.

PN140

VECCI submits that the Commission needs to consider this application against that background. With respect to the safety net review decision, there are a number of extract that we would like to take the Commission to. The first is from paragraphs 7 and 8 of the actual statement that was made, with respect to the decision and we quote from there, and it says:

PN141

Furthermore, the result is consistent with the obligations upon us to have regard to economic factors including the desirability of attaining a high level of employment and to have regard to the needs of the low paid. The adjustment will be the following:

PN142

And then the Bench sets out the adjustment. In paragraph 8 they specify that:

PN143

We have decided to modify the requirement that safety net adjustments increases not be available within 12 months of the previous safety net adjustment ...(reads)... adjustment provided for in this decision, will be subject to the usual conditions.

PN144

Again, in the actual body of the main decision from the Full Bench, the Bench specifies that at paragraph 143 on page 46:

PN145

As we indicate later in dealing with amendments in the statement of principles, we have decided ...(reads)... to cases in which the parties consent and there is no cost impact arising from the adjustment...- - -

PN146

VICE PRESIDENT ROSS: You don't need to read that to us, Mr Eberhard, we are familiar with the debate as it occurred in the safety net review decision.

PN147

MR EBERHARD: What we would say though is that the safety net review decision should be seen as a total package and is considered the outcome of a claim against the economic circumstances facing Australia, it has balanced its decision against the requirements of section 88A, section 88B(2) and 90B of the Act, and it should be seen as a package. It should not be capable of being dissected one piece by one piece, rather it should be looked at as a whole. The Commission, in determining the amounts provided in the decision, considered all of the legislative requirements it is required to consider and determined a package, a package that provided for those three increases that we already talked about.

PN148

However, the Commission, in considering the legislative requirements, determined that these increases were available on application by a party, at least 12 months away from the May 2000 decision and we would submit, only in exceptional circumstances where the award has not been adjusted for the April 1999, May 2000 or May 2001 safety net review decisions and where there is consent and the insertion of such rates, does not result in an increase in the wage rates actually paid to employees or increase the wage costs for any employer, any applicable 12 months delay between variations may be waived.

PN149

Now, the 12 month variation was actually first introduced in the April '99 decision, at paragraph 88 and I quote from that and state that:

PN150

The date at which increases flowing from this decision should be available was a matter of debate during the case. The joint governments and some employers ...(reads)... decision, before the award is varied, as provided for in this decision.

PN151

Again, in the May 2000 decision, the Full Bench found that and I quote from paragraph 122 on page 41:

PN152

We also intend to maintain the requirement introduced in the April 1999 decision, that at least 12 months have elapsed since the rates in the award were increased ...(reads)... than one safety net adjustment is implemented within a 12 months period.

PN153

VECCI submits that there is strong presumption that Members of the Commission should exercise their powers in a manner consistent with the statement or principles, issued by a seven member Full Bench in a national wage case decision. Additionally VECCI would submit that departure from the statement of principles is justified only when special reasons exist, which distinguish the grounds upon which the statement of principles was determined.

PN154

In finality, there are only two points that we would wish to make and that is that the Commission should read 501(4) as a whole, not just 501(4)(a), which Trades Hall took the Commission to. And we would also submit that with respect to the decision of the New South Wales Industrial Commission, I haven't read this fully, but I would certainly submit that they too, like the Australian Industrial Relations Commission, provided a principle that where previous safety net adjustments had not been provided for in an award, there was a capacity for those adjustments to be brought forward to an earlier operative date. We would submit the statement that principle C of the statement of principles at 8C, does not actually allow the application made by Trades Hall here today.

PN155

What it does allow though, is for previous national wage case decisions that haven't been implemented into an award, to come through with an earlier operative date, rather than the 12 month lag that actually is required through the 1999 and the 2000 decision. If the Commission pleases.

PN156

VICE PRESIDENT ROSS: So, you say that they are not dealing with circumstances where for example, an award was varied for the 2000 safety net review decision, say in December of last year and then they are dealing with the 2001 adjustment in November. In those circumstances they would still provide a December date, but it is where there was no adjustment for the 2000 and they are considering both together, as it were?

PN157

MR EBERHARD: I think it could be in both instances, actually, where there has been an adjustment in December of 2000 and then there has been another application. If there is consent and there is no cost impact to an employer - - -

PN158

VICE PRESIDENT ROSS: Yes, no, no, sure.

PN159

MR EBERHARD: - - - then that can flow through.

PN160

VICE PRESIDENT ROSS: Yes.

PN161

MR EBERHARD: But also, if there was failure to apply for the April '99, the 2000 or 2001 decision, then they could actually be increased basically all at the one time and the award rate reflecting that increase.

PN162

COMMISSIONER LEWIN: So you are saying that it is the same effect as that generated by the principle determined by this Commission?

PN163

MR EBERHARD: Which is the same effect, sorry Commissioner?

PN164

COMMISSIONER LEWIN: In relation to the safety net - more than one safety net adjustment.

PN165

MR EBERHARD: What we are submitting is that the principle, as being spoken about by the Trades Hall in this application is - we are saying that they are misinterpreting what the intent of the Full Bench is and the intent of the Full Bench - - -

PN166

COMMISSIONER LEWIN: The New South Wales Commission?

PN167

MR EBERHARD: And the New South Wales Commission. I would submit that the New South Wales decision effectively reflects the national wage decision, yes.

PN168

COMMISSIONER LEWIN: Yes, that is what I said, that that is your submission, that there is no distinction to be made.

PN169

MR EBERHARD: No, that is correct.

PN170

COMMISSIONER LEWIN: Okay.

PN171

MR HALLS: If the Commission pleases, the only additional issues that the Australian Industry Group would seek to raise is just in respect of current practices operating in other states and also in regard to particular federal awards, I notice that Tony Burke from the SDA certainly put forward that there has been a three to four month lag, as far as the industry sectors are concerned and that Victorian employees are disadvantaged when compared to employees possibly covered under federal awards and also those in other states.

PN172

But we would certainly submit that certainly for recent years other states, such as Queensland for example, have an operative date for their state awards as has been presented in some documentation as at 1 September. I mean that is only nine days earlier than the current Victorian system. There are also a number of particular federal awards which contain operative dates later than those granted for Victorian employees. In particular, there is an award that applies in the ACT, the Transport Workers Australian Capital Territory Award 1982, which currently has an operative date of 18 September 2000.

PN173

Many other awards, which I don't intend to list, however I can certainly forward a list to the Commission at a later date, also contain operative dates pertaining to August leading up as late as October and we would certainly hope the Commission would take that into consideration when making a decision on the operative date. The only other submission we would care to make in respect to that is that our members of course, employers have not budgeted for an operative date of 1 June, they were under the impression that it would be on 10 September 2000 and not only of course will that impact across as far as wages are concerned, but also in respect to superannuation contributions. And we hope the Commission will take that into consideration in making their decision.

PN174

VICE PRESIDENT ROSS: Yes, Ms Murdock?

PN175

MS MURDOCK: I will address the issue of the operative date, the 1st and then I will turn to the wage rates in the agricultural, forestry and fishing industry sector. With respect to the operative date, the VFF submits that any increase to the wage classifications in the agricultural, forestry and fishing and wholesale trade industry sectors, should be subject to the statement of principles outlined by the Australian Industrial Relations Commission in the Safety Net Review Wages Decision in May 2001.

PN176

More specifically, principle 8B, found in the statement of principles, should be applied by the Commission in this instance. Principle 8B Arbitrated Safety Net, and I will just give you - I know you are all familiar with it, but I will just give you the statement of principles - - -

PN177

VICE PRESIDENT ROSS: That is all right, we have that in front of us, Ms Murdock, thank you.

PN178

MS MURDOCK: Good. On page 41 of my copy, but your copy might be different:

PN179

In accordance with the Safety Net Review Wages May 2000 Decision, awards may on application be varied to include an arbitrated safety net adjustment...

PN180

And it goes on to list B, A, B, C, D up to H. B is the one that we are supporting. With respect to the other sub clauses listed under principle 8, namely 8A, C, D, E, F, G and H, the VFF agrees with principle 8A, that the operative date will be no earlier than the date of the variation of the award. With respect to 8C, this principle allows an early operative date where the decision is by consent and does not result in any increase in the wage rates actually paid to the employees or increase the wage costs for an employer.

PN181

The VFF has not consent to vary the safety net adjustment, since there would be significant cost for employers. The other sub-clauses listed above are not in issue in this instance. The Full Bench of the Australian Industrial Relations Commission has since the April '99 safety net review wages decision, enforced and maintained the principle that at least 12 month period must have elapsed since the rates in the award were increased, in accordance with the last safety net adjustment, before the award is varied.

PN182

The reason for this principle, which VECCI has also announced, was enunciated in the May 2000 Safety Net Review Decision and I have got that extract, if you would like that. At page 1, paragraph 122, line 9, it states:

PN183

The purpose of this requirement is to avoid the cost pressures which might arise if more than one safety net adjustment is implemented within a 12 month period.

PN184

The VFF submits that the 12 month period should be maintained between the increase granted in the Safety Net Review Wages May 2000 Decision and the increases granted in the Safety Net Review Wages May 2001 Decision. And the statement of principles should not be distinguished or departed from. If an earlier date were to be granted then employers in the various industry sectors would have to implement two safety net adjustments, that is a $15 increase from 10 September 2000 and a further increase of $13 to $17, from 1 June 2001, totalling $28 to $32 per week increase.

PN185

These increases to the various sectors, including the agriculture, forestry and fishing industry sector, would be significant cost pressures for employers. The Commission has recognised the cost impact on employers, if more than one safety net adjustment applies in a 12 month period and that is why principle 8B remains in the current Safety Net Review Wages May 2001 Decision. The VFF submits that the statement of principles should not be viewed as a shopping list. The authority for this is found in print R8216 - - -

PN186

VICE PRESIDENT ROSS: Is this the reference at paragraph 9?

PN187

MS MURDOCK: Beg your pardon, yes. Have you got that?

PN188

VICE PRESIDENT ROSS: Yes, I do.

PN189

MS MURDOCK: Good.

PN190

VICE PRESIDENT ROSS: I was going to ask Mr Niven about it shortly, but - - -

PN191

MS MURDOCK: All right.

PN192

VICE PRESIDENT ROSS: I take it you are referring us to that part of the decision where - - -

PN193

MS MURDOCK: It states:

PN194

This was the course proposed by all parties...

PN195

And it finished with the words:

PN196

...to above, will operate from that date.

PN197

VICE PRESIDENT ROSS: Yes, and presumably particularly where they say:

PN198

The Full Bench sees no reason to depart from the SNA decision... - - -

PN199

MS MURDOCK: That is right.

PN200

VICE PRESIDENT ROSS: - - -

PN201

...which generally speaking shall be viewed as a package.

PN202

MS MURDOCK: That is right. Now, I will go on to discuss the issue of retrospectivity. The Victorian Trades Hall Council submits that the variations to the minimum wages orders in the various Victorian industry sectors should take effect on 1 June 2001. This date of 1 June 2001 would therefore mean that employers would have to back pay and adjust employees wages because the date applies retrospectively. The VFF submits that there is a general presumption against retrospectivity. The Commission's principles, in relation to retrospective operation awards, are set out in the Federated Ship Painters and Dockers Union of Australia and the Adelaide Steamship Company and others - I have got that case, would you like it?

PN203

VICE PRESIDENT ROSS: Thank you.

[10.30am]

PN204

VICE PRESIDENT ROSS: Do you have a citation for that case, Ms Murdock?

PN205

MS MURDOCK: Yes, it is 19960 - I don't know if this is correct. It doesn't look correct to me. But[1960] CthArbRp 182; , 94 CAR 579 at page 619, is what I am referring to. And these principles have been applied in other decisions and they are in - - -

PN206

VICE PRESIDENT ROSS: Just before you - - -

PN207

MS MURDOCK: Yes.

PN208

VICE PRESIDENT ROSS: Mine is not page numbered, so just give me a moment to turn up the - - -

PN209

MS MURDOCK: I think 619 is.

PN210

VICE PRESIDENT ROSS: Oh, right.

PN211

MS MURDOCK: Yes. I am going to refer you to a summary of all of this later in another case.

PN212

VICE PRESIDENT ROSS: Okay.

PN213

MS MURDOCK: So - and there have been other decisions and I will just - they are in SO239 and print 0458 and I will just give you those too, if I may. You might want to hold on to the print 0458. No, sorry, that is wrong. The print SO239. The principles applicable to retrospective payments are to be gathered from a number of cases, which I have given you some, of which the following passages are illustrations. In this regard we rely in part upon an excellent summary contained in print SO239, a decision of Senior Deputy Polites on 3 November 1999 at page 9 and 10. Now, I really don't want to read these out, but if you - - -

PN214

VICE PRESIDENT ROSS: No, that is all right, I don't really want you to do that either, so - - -

PN215

MS MURDOCK: All right.

PN216

VICE PRESIDENT ROSS: I understand the sections you are putting. Perhaps if you just - - -

PN217

MS MURDOCK: Yes, well, commencing - - -

PN218

VICE PRESIDENT ROSS: Just take us to the paragraph numbers and we can read them.

PN219

MS MURDOCK: Yes. Well, commencing from, "The Court does not make awards or variations - "

PN220

VICE PRESIDENT ROSS: Yes.

PN221

MS MURDOCK: In italics. And then it finishes, after the paragraph that starts with, "After careful consideration of what we accept as the well established and firmly entrenched principles."

PN222

VICE PRESIDENT ROSS: Yes.

PN223

MS MURDOCK: Okay. Moreover in a section - do you want time to read that or - I will just go on.

PN224

VICE PRESIDENT ROSS: No, no, which - - -

PN225

MS MURDOCK: No, I just - all of these statements apply to retrospective payments, so you might - - -

PN226

VICE PRESIDENT ROSS: Yes. No, no, so far I have got that part of his Honour's decision from paragraph 11 to paragraph 16 - - -

PN227

MS MURDOCK: Right.

PN228

VICE PRESIDENT ROSS: Deals with retrospectivity.

PN229

MS MURDOCK: Right.

PN230

VICE PRESIDENT ROSS: Yes, is there any other part of this decision you want to take us to?

PN231

MS MURDOCK: No.

PN232

VICE PRESIDENT ROSS: Okay.

PN233

MS MURDOCK: Moreover, in a section 501 application for a minimum wage order for certain Victorian employees, print 0458, Vice President Ross - I have given you that one.

PN234

VICE PRESIDENT ROSS: Yes.

PN235

MS MURDOCK: Indicated at page 12 that there is a general presumption against retrospectivity and that the Commission will grant retrospectivity in special or exceptional circumstances where the interest of fairness and equity warrant such a course. The VFF submits that there are no special or exceptional circumstances where the interests of fairness and equity warrant such a course. The employers in the agriculture, forestry and fishing industry sector have an expectation that a 12 month gap will occur between wage increases and employers have relied on and budgeted for the 10 September increase.

PN236

Not an increase applying retrospectively on 1 June. The VFF submits that 1 June is impractical as 1 June is one month prior to the end of the 2000/2001 financial year. This date may affect superannuation payments, group certificates, Workcover and taxation payments. Also there is the additional administrative burden imposed on employers to backpay all their employees who fall within their industry sectors. In the horticultural industry and in other industries there is a high turnover of workers especially casual workers.

PN237

There would be added difficulties in tracing some casual workers especially the backpacker and the working holiday maker workforce which now numbers approximately 76,570 in Australia each year. And I have got the DIMA fact sheet that indicates those numbers.

EXHIBIT #VFF2 DIMA FACT SHEET

PN238

VICE PRESIDENT ROSS: I don't mark the others because they are decisions.

PN239

MS MURDOCK: Yes. The VFF has consulted with some of its members about the possibility of a retrospective operation date and they have indicated that it would be an administrative nightmare. Moreover, the administrative costs would be substantial in back paying employees and issuing amended documentation compounded by the fact that it would cover two financial years. The VFF submits that the operative date should be the first pay period on or after 10 September because - we also mentioned this previously at the other hearing.

PN240

Because the principle Federal award that operates in the agricultural sector is the Pastoral Industry Award and the operative date for the Safety Net Review Wages May 2001 decision is approximately 7 September. This will eliminate difficulties with the procedural and administrative - administration of the increases because for the Pastoral Industry Award and the agricultural, forestry and fishing sector, the operative dates will coincide.

PN241

I now want to turn to the wage orders that I mentioned before. The VFF has reviewed the draft orders with respect to the agricultural, forestry and fishing industry sector and the wholesale trade industry sector and there have been a number of discrepancies found in the above orders and a letter dated 26 June 2001 was forwarded to the Commission listing the discrepancies. Have you - - -

PN242

VICE PRESIDENT ROSS: Just bear with us for a moment. Ms Murdock rather than go - because I suspected we go through the order that you have raised - we will need to go through each order. It would be our present intention to delegate the settlement of the orders to a single member of this bench after we have determined the question of operative date. That member would be provided with copies of your correspondence and no doubt would have a further hearing to provide you with an opportunity to put those matters and it can be dealt with at that time.

PN243

MS MURDOCK: Okay - - -

PN244

VICE PRESIDENT ROSS: Yes, does that suit your convenience?

PN245

MS MURDOCK: - - - because it is a bit of a complex issue.

PN246

VICE PRESIDENT ROSS: I thought it might be.

PN247

MS MURDOCK: Yes, that would suit.

PN248

VICE PRESIDENT ROSS: That would be fine?

PN249

MS MURDOCK: Yes.

PN250

VICE PRESIDENT ROSS: Okay, thank you.

PN251

MS MURDOCK: Yes. And that ends my submission. I have got my submission here if - - -

PN252

VICE PRESIDENT ROSS: Thank you.

EXHIBIT #VFF3 SUBMISSION OF MS MURDOCK

PN253

VICE PRESIDENT ROSS: Thank you, Ms Murdock. I have just been advised there is already an exhibit VFF1 in the matter before Commissioner Lewin. I will alter the DIMA fact sheet to make that VFF2 and the written submission, exhibit VFF3. Are there any other employer submissions? Yes?

PN254

MS PAUL: Our submissions are fairly short insofar as we support the previous submissions by VECCI - the FF and G. We would like to deal with the issues with respect to the retail industry per se, particularly, Mr Burke's submissions. It seems that the submissions were very much on the case of there was some disadvantage being suffered by those workers under schedule 1A. With respect, award workers because of labour time. We would like to highlight for the purposes of the retail industry, certainly, we don't see there being any discrimination or disadvantage as both sets of workers are getting a pay increase within the 12 month span. So in effect there is no delay being currently suffered. The issues of - - -

PN255

VICE PRESIDENT ROSS: So you are not - well, you are saying that the operative date for the Federal award is applying in the retail industry?

PN256

MS PAUL: Yes.

PN257

VICE PRESIDENT ROSS: Is 10 September - - -

PN258

MS PAUL: No, sir, I - - -

PN259

VICE PRESIDENT ROSS: - - - or are you simply saying there is a 12 month space.

PN260

MS PAUL: There is a 12 month space - - -

PN261

VICE PRESIDENT ROSS: Yes, okay.

PN262

MS PAUL: - - - between it. So in effect we have realistically, factored this, there is no disadvantage being suffered. And in fact to bring an operative date earlier is going to cause a disadvantage to the employers as they will effectively be paying two lots of pay increases. But that disadvantage, particularly in the retail industry, is very difficult because of a low cost environment and the type of retailers that we are talking about here would have difficulty in meeting these additional payments and they would be additional payments if an operative date is put earlier.

PN263

VICE PRESIDENT ROSS: What type of retailers is that?

PN264

MS PAUL: We are talking about small retailers generally, sir, who would be employing less than 20 employees on an average. Most of the larger retailers would be under an award system of some sort - - -

PN265

VICE PRESIDENT ROSS: Yes.

PN266

MS PAUL: - - - or under some enterprise agreement. So the impact of this - of an earlier operative date is actually going to be on those employers who can least afford to make additional payments. To some extent the Association has done a survey only of its members and we are finding that employers with less than 10 employees on an average are effectively only earning $9.60 an hour and working on an average of 60 hours a week. These are not employers that can afford to take these impose upon them.

PN267

If the operative date was to be granted earlier, taking the union's argument, it seemed to be to rebalance the inequities that they are claiming exist under schedule 1A under the Workplace Relations Act. That, sir, is not an issue that can be dealt with by this Commission, with all due respect. That is an issue to be dealt with by Parliament. And to bring forward the operative date is neither going to rebalance any inequity, nor is it going to resolve the issue as to whether there is any inequity or not.

PN268

To that end, sir, when you weigh up the disadvantage to employers who will - and the very clear disadvantages that they would bear because of the additional payment, the administrative burden - in our opinion there should be no earlier operative date. The final point which we would make, sir, which Mr Burke made, was that all employer organisations have been informed about this claim for an earlier operative date. That in itself is fine, sir, except that all the employer organisations here do not represent every employer that is out there.

PN269

And clearly within the retain industry there is some 17,000 employers that are not represented that would be clearly affected by any decision made today. Thank you, sir.

PN270

VICE PRESIDENT ROSS: Mr Klemis?

PN271

MR KLEMIS: Thank you. Your Honour, our approach is a very simplistic one and perhaps if I could just read to you the advice that was sent to our members in May:

PN272

The majority of our members are covered by one of the Victorian industry wage sectors. The increases which should mirror the above increases in the Federal ...(reads)... before 9 September.

PN273

Now, we say that should mirror but will not be operative, and with the greatest respect, we put it to you, sir, that our authority for - in advising our members comes from this very - the guidelines set by this very supreme body in this matter and employer associations, as unions or any other body, are entitled to rely on guidelines set by the Commission. If the Commission pleases.

PN274

MR WADE: Your Honour, my submissions shall be even shorter.

PN275

VICE PRESIDENT ROSS: It is getting better as we go on.

PN276

MR WADE: It certainly is, your Honour. The Australian Mines and Metals Association supports the submissions put forward by VECCI in this matter.

PN277

VICE PRESIDENT ROSS: Thank you.

PN278

MS JONES: If the Commission pleases, the Restaurant and Catering Association of Victoria strongly supports the position put forward by VECCI. If the Commission pleases.

PN279

VICE PRESIDENT ROSS: Anybody else? No. Ms Doyle?

PN280

MS DOYLE: No further submissions.

PN281

VICE PRESIDENT ROSS: Okay. Can I just clarify the Victorian Government's position that - you said in essence that the principle should govern the application and as a consequence of that, in the absence of consent, 10 September should be the operative date?

PN282

MS DOYLE: That is it in a nutshell. The principles are obviously not statutorily imported into 501 applications but have been accepted as being relevant. That being the case the position remained as it was on the last occasion. Prima facie it is the appropriate date but the principles themselves, being relevant, allow for that to be varied by consent and if that happens, no doubt, appropriate approaches will be made to the bench.

PN283

VICE PRESIDENT ROSS: Anything in reply, Mr Niven?

PN284

MR NIVEN: Yes, thank you, your Honours, I will try and keep the reply fairly brief. In the submissions of VECCI the employers - and with the rest of the employer organisations supporting their submissions - they talk about the principles and the quantum being a total package and I would like to accept that there is a total package, however, the minimum wage sector orders are so different from the awards that go to the safety net review that they just must be distinguished. And we don't think it is right nor is it fair to import the quantum and the principles as an entire package.

PN285

VICE PRESIDENT ROSS: Yet in the - - -

PN286

MR NIVEN: Some of those principles have no relevance to these minimum sector orders.

PN287

VICE PRESIDENT ROSS: But in the 1999 section 501 decision, that is effectively what the Full Bench said in that case, that the principles, generally speaking, should be regarded - or rather the Safety Net Review decision, should be regarded as a package.

PN288

MR NIVEN: Yes. And we submit that we think it is difficult to accept that notion because the principles go to - - -

PN289

VICE PRESIDENT ROSS: Well, you might not agree with it but - are you saying that it is wrong and we shouldn't follow it?

PN290

MR NIVEN: We are saying that since - now that we are in 2001, with time having marched on and with the ability now to - in 1999 we did not have a very clear picture of the exact numbers, necessarily, of the jobs or the industries that these people work in. That is the difference between then and now. We now have a clear picture of who these orders affect and the numbers. And I think we have all been surprised that those numbers are so high.

PN291

COMMISSIONER LEWIN: I understood you to say that it is not incompatible for the principles to be treated as a package provided that the nature of the package is understood, that is, that it applies to Federal awards and that the object of this application is not. A set of industrial instruments that are appropriately characterised as either the Federal awards or the same as Federal awards.

PN292

MR NIVEN: Yes, that is right, that is right, your Honour, yes. In relation to the cost impost arguments that were forwarded by the employers, in my submission, we accept that the principles have some relevance. I guess it is the extent of that relevance which is critical. And we accepted that principle 12 has relevance being an economic incapacity argument which employers have - are at liberty to make application under and forward that argument.

PN293

And I note that the VFF have previously forwarded an economic incapacity argument in relation to workers in Gippsland in a previous application here. In relation to those orders we support the Commission's determination to send the orders off to a single member. In relation to VFF number 3 - number 2, sorry, with those stats - with the number of visas - overseas visas - the figure 76,570 is a total figure. It would be interesting to know how many of those actually worked in the agricultural sector.

PN294

I would assume that there would be a great number, however, I would have thought that the largest industries applicable would be the hospitality industry and the retail industry. So, it is - I make that observation in relation to the 76,000. In relation to advice to members indicating that wages won't be increased before 9 September, it is not our fault that an employer association has advised their members, or given their members that advice, one month before the original hearing for this matter. So, they have, perhaps, jumped the gun.

PN295

And the parties would recall that this issue of the lag has been identified as a potential ongoing issue since 1998. So that they should have had some regard that that could be, and continued to be, an issue. I would like to, perhaps, propose a way forward in relation to some of this and accepting some of the submissions of the employers in relation to the impact that a retrospective order to 1 June may have, and that goes to this. If we accept that there is an unnecessary lag within - between the Federal and the state systems - or access to the increases in the safety net minimum wage - then it may be possible for this Commission in this decision to flag, that in future years, that the intention of the Commission would be to have an operative date that moved.

PN296

We could do that either through a phasing-in arrangement, or a statement from the Commission now that, should the living wage case - Federal living wage case, remain currently in April - or March/April as it currently does, then as long as the date of that case does not change, then it maybe possible to flag into the future that future operative dates could move and possibly move back one or two months per staggered increase. If that is a way forward then perhaps today we could go back - we could seek a way forward that would perhaps have an operative date of 10 July and then indicate next year that an operative date could be moved back then, at that stage, to 10 June.

PN297

That then would, I think, assist some of the employer bodies in relation to the administrative difficulties that they may experience in applying any retrospective orders, particularly, in relation to the Australian Taxation Office cut off at 30 June. So I accept that those submissions do have some relevance but we don't think it is a major consideration. And perhaps it is open to the Commission to try and perhaps bring to a finality this question of the operative dates in relation to the Victorian minimum wage sector, as it has been an ongoing issue, as the Commission identified it could be, back in 1998. I will leave it there, if your Honours please.

PN298

VICE PRESIDENT ROSS: Anything else? We will adjourn and reserve our decision in this matter.

ADJOURNED INDEFINITELY [11.55am]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #VFF2 DIMA FACT SHEET PN238
EXHIBIT #VFF3 SUBMISSION OF MS MURDOCK PN253