C2001/3506, Transcript of Proceedings [2001] AIRCTrans 3034 (9 November 2001)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT HARRISON

C2001/3506

APPEAL UNDER SECTION 45 OF THE ACT
BY MASTER BUILDERS ASSOCIATION OF NEW SOUTH WALES
AND OTHERS AGAINST THE DECISION OF COMMISSIONER JONES ISSUED ON 9 OCTOBER 2001 IN C22880 OF 1997, C23710 OF 1997, C23711 OF 1997 AND C23712 OF 1997
RE ORDINARY TIME EARNINGS AND SUPERANNUATION APPLICATION FOR STAY ORDER

SYDNEY

10.05 AM, THURSDAY, 25 OCTOBER 2001

PN1

THE SENIOR DEPUTY PRESIDENT: May I have appearances in this matter?

PN2

MR B.D. HODGKINSON: If the Commission pleases, I seek leave to appear on behalf of all of the named appellants, and indeed, on behalf of two corporations who seek to join that list: the Australian Industry Group, and Australian Business Limited.

PN3

THE SENIOR DEPUTY PRESIDENT: Yes, thank you.

PN4

MR P. RYAN: If it pleases the Commission, Ryan, initial P, for Employers First.

PN5

THE SENIOR DEPUTY PRESIDENT: Mr Ryan.

PN6

MR S. MAXWELL: If the Commission pleases, my name is Maxwell, initial S. I appear on behalf of the Construction Forestry Mining and Energy Union.

PN7

THE SENIOR DEPUTY PRESIDENT: Yes, thanks, Mr Maxwell. Any difficulty with leave being granted to Mr Hodgkinson to appear for the appellants?

PN8

MR MAXWELL: No, your Honour.

PN9

THE SENIOR DEPUTY PRESIDENT: And his adding to the list of the appellants, the AIG and ABL. Do you want to be heard on that?

PN10

MR MAXWELL: Well, your Honour, yes, we do. We believe that Mr Hodgkinson should provide the proper authorities from those organisations to say that he has the authority to represent them. We are also concerned about the matter of joining parties to an appeal who haven't actually made an appeal application.

PN11

THE SENIOR DEPUTY PRESIDENT: Yes. Well, I suppose I can put this to one side, at least for today's purposes, but Mr Hodgkinson, do you want to say anything about that?

PN12

MR HODGKINSON: We would be content that your Honour put it to one side for today's purposes if it is not going to alter the course of the present matter.

PN13

THE SENIOR DEPUTY PRESIDENT: Yes, all right, I will do that, Mr Maxwell. Mr Hodgkinson?

PN14

PN15

MR HODGKINSON: Thank you, your Honour. Your Honour, it is our understanding today that the application for a stay of the operation of the decision and orders is being heard, and as such we won't address except so far as is necessary to that issue, either the issues going to leave or the issues going to the substantive appeal. Your Honour, we would like to commence by making some comments of a general nature in relation to the decision, and then take you to certain areas which we say supports the issue of a stay in this case, in that there is an arguable case. Secondly, the balance of convenience in these circumstances we say not only is in favour of the granting of the stay, but all but requires it.

PN16

And thirdly, we respectfully submit that the granting of the stay will, as it ought properly do, allow no more than the proper determination of the question raised by the appeal; that is, it won't cause any particular prejudice as a consequence of its granting. Now, the general comments that we want to make about the decision - I am sorry - before I commence those submissions, there are two housekeeping matters, as it were. We notified my learned friend only yesterday afternoon, and I hope a copy of the letter was received by the Commission, that we would seek to amend today the particulars of ground 2 of the appeal.

PN17

THE SENIOR DEPUTY PRESIDENT: Yes.

PN18

MR HODGKINSON: As you will see from the letter, the terms of the amendment that we seek are that the Commissioner failed to consider or apply the test required by the operation of section 113. Now, we had taken the view that the particulars that we have provided in 2.1 to 2.4 were sufficient, but rather than leave it as a matter of uncertainty at all, we thought it better to clarify it by seeking to amend the particulars in that way, and I make the formal application for amendment now.

PN19

THE SENIOR DEPUTY PRESIDENT: Yes. Does that cause you any difficulties, Mr Maxwell?

PN20

MR MAXWELL: No, your Honour.

PN21

THE SENIOR DEPUTY PRESIDENT: The notice of appeal will be amended in the terms notified in the correspondence to the CFMEU, and I should indicate that the amendment will introduce a particular 2.5 to ground 2, which will read:

PN22

The Commissioner failed to consider or apply the test required by the operation of section 113.

PN23

MR HODGKINSON: Thank you. Your Honour, the other is a matter of apology. Your Honour, if your Honour would go to page 143 of the Appeal Book, it is in the first of the volumes, your Honour will see there commences what was exhibit B13 below. It commences with a letter from the Australian Tax Office dated 9 March 1999 addressed to the Construction Forestry Mining Energy Union. Your Honour, it has attached to it the substance of what the ATO was conveying to the union, but in my copy of the Appeal Book, and I have checked with Mr Maxwell this morning in his copy of the Appeal Book, it has only been reproduced as to every second page.

PN24

THE SENIOR DEPUTY PRESIDENT: Yes.

PN25

MR HODGKINSON: That is a matter of significant inconvenience. It is an exhibit that the Commissioner dealt with extensively in the course of his decision. Those instructing me have attempted this morning to locate a full copy of B13; they have been unable to do so.

PN26

THE SENIOR DEPUTY PRESIDENT: Do you happen to know, Mr Hodgkinson, the date - I think the handwriting next to B13 reads 25 March 19 - - -

PN27

MR HODGKINSON: 99, your Honour.

PN28

THE SENIOR DEPUTY PRESIDENT: 99. Yes.

PN29

MR HODGKINSON: I can just check for your Honour as to that. It was - indeed, your Honour, B13 was tendered on that day, and it is at page 448 of the Appeal Book, that is the second volume, your Honour.

PN30

THE SENIOR DEPUTY PRESIDENT: Yes, all right. Well, I think we have all of the files at first instance in Court with us, and we will see if we can locate that exhibit.

PN31

MR HODGKINSON: As I say, your Honour, it occurs to me, having regard to the approach that the Commissioner took, that your Honour may very well need to go to B13.

PN32

THE SENIOR DEPUTY PRESIDENT: Yes.

PN33

MR HODGKINSON: And of course it would be inappropriate to go to part only of the exhibit.

PN34

THE SENIOR DEPUTY PRESIDENT: Yes.

PN35

MR HODGKINSON: Even for the purpose of dealing with today's application.

PN36

THE SENIOR DEPUTY PRESIDENT: All right. Just pause for a moment, would you? I think we have located it, but it might take a while to retrieve just that exhibit from the bundle of exhibits.

PN37

MR MAXWELL: Your Honour, perhaps whilst we are dealing with, I suppose, the documents contained in the Appeal Book, I should raise a number of other matters in regard to the Appeal Book.

PN38

THE SENIOR DEPUTY PRESIDENT: Yes,

PN39

MR MAXWELL: First of all, in regard to Volume 2, there is a section containing correspondence. Now, as this is not required under the rules, and also because it is incomplete, we say that this part of the Appeals Book to be struck out. We note that these are obviously just the copies of the correspondence held by the MBA and the Employers, but I can assure the Commission that this is not a complete list or a copy of all the correspondence that have occurred in this matter over the past three and half years or more. I should also raise - - -

PN40

THE SENIOR DEPUTY PRESIDENT: Just pause there. I take it that nothing in volume 2 became an exhibit before the Commissioner?

PN41

MR MAXWELL: Not in regards to the correspondence, no.

PN42

THE SENIOR DEPUTY PRESIDENT: No. Thank you.

PN43

MR MAXWELL: Any correspondence that was an exhibit is marked as an exhibit - - -

PN44

THE SENIOR DEPUTY PRESIDENT: Is in the other folder presumably.

PN45

MR MAXWELL: - - - and it's in the other folder. We further wish to point out that the exhibits in volume 1 are incomplete, particular exhibit B14 and this needs to be corrected. Your Honour, this is exhibit B14 from the proceedings which was the CFMEU written submission in reply. The copy in the appeal book only contains the written submission; it doesn't contain all the attachments that were contained within that exhibits and which will have a bearing on this matter.

PN46

THE SENIOR DEPUTY PRESIDENT: What do you propose should therefore be done about exhibit B14, the incomplete exhibit in the volume; do you want to - - -

PN47

MR MAXWELL: Well, your Honour, we believe that it should be replaced and a complete exhibit B14 included.

PN48

THE SENIOR DEPUTY PRESIDENT: Yes. Well, if the appellants have any difficulty with locating a complete exhibit, you have one in your possession?

PN49

MR MAXWELL: I do, your Honour, yes.

PN50

THE SENIOR DEPUTY PRESIDENT: Yes, all right.

PN51

MR MAXWELL: The other matter I wish to raise is that in regard to the section on decisions and orders of the Commission, the orders dated 30 July 1998 are wrong. These were actually replaced on 24 August 1998 but they - they are the orders attached to the decision of 30 July 1998. Although they were the original orders attached to the decision, the subsequent orders made were changed on 24 August 1998.

PN52

THE SENIOR DEPUTY PRESIDENT: Well, what do you propose should occur about that? You can talk to the appellants, can you, and ensure that I and subsequently a Full Bench will have the correct orders before us?

PN53

MR MAXWELL: Yes, your Honour.

PN54

THE SENIOR DEPUTY PRESIDENT: Yes. Should I do anything about that today other than you having noted - - -

PN55

MR MAXWELL: I don't think it's pertinent to today's proceedings.

PN56

THE SENIOR DEPUTY PRESIDENT: All right. Thanks. All right. Well, I assume between today's date and the date this matter proceeds to a hearing, that would be able to be agreed between the parties and the Full Bench will have accurate documents in the appeal books.

PN57

MR MAXWELL: Yes, your Honour. Your Honour, the final issue with regard to the appeal book, again deals with a section on decisions and orders. Included in that section is the notice of appeal by the HIA, and that's found at page 22 of the appeal book. Well, we point out that this was not a decision of the Commission; it was just an appeal application by the HIA but more importantly, the appeal book doesn't contain the decision of the Full Bench arising from that appeal. Now, that decision is found in Print Q8495 dated 11 November 1998 and we believe that should be included in the appeal book as it is a relevant decision to these applications.

PN58

THE SENIOR DEPUTY PRESIDENT: Yes. Again - - -

PN59

MR HODGKINSON: Your Honour, could I - - -

PN60

THE SENIOR DEPUTY PRESIDENT: Yes, Mr Hodgkinson.

PN61

MR HODGKINSON: - - - just say about that last matter, your Honour, firstly I don't disagree with my friend at all. The appeal book ought to be accurate and as a matter of fixing it up, it ought to be attended to as quickly as possible.

PN62

THE SENIOR DEPUTY PRESIDENT: Yes.

PN63

MR HODGKINSON: So there's no dispute between the parties as to that. As to the last matter, we did, in fact, refer to your Honour's associate that print reference for the appeal decision which dismissed the application made by the HIA. I apologise to my friend. Apparently we didn't send to him a copy of the notification to your Honour that that print ought be before you but certainly, I'm not sure that it's a matter for the appeal book but I am certain that it is a matter that ought properly be before the Full Bench.

PN64

THE SENIOR DEPUTY PRESIDENT: Yes, all right. Well - - -

PN65

MR HODGKINSON: And we - and therefore we don't have any disagreement with my friend about that process either.

PN66

MR MAXWELL: Your Honour, I can inform the Commission that I do have a copy of that decision with me here today.

PN67

THE SENIOR DEPUTY PRESIDENT: Yes, all right. Well, yes, I have it with me. Yes, well, obviously anything that is missing from the appeal book that should be in it, just ensure that that's all attended to as soon as possible, those instructing you, Mr Hodgkinson.

PN68

MR HODGKINSON: I think we might try and have a conference with my learned friend at an appropriate time and get a consent position in relation to the appeal books.

PN69

THE SENIOR DEPUTY PRESIDENT: Yes. Now, I was then dealing with matters raised by Mr Maxwell whilst we were locating exhibit B13 before the Commissioner, and we have now done so and I have a complete - well, I'll identify what I have. I have a letter from the ATO to the CFMEU dated 9 March 1999 containing some eight pages.

PN70

MR HODGKINSON: If your Honour has the odd-numbered pages, your Honour is in advance of everybody else.

PN71

THE SENIOR DEPUTY PRESIDENT: Oh, right. Shall we make a few copies of that then? Oh, yes - - -

PN72

MR HODGKINSON: It would be appreciated, I think, by all if that's possible.

PN73

THE SENIOR DEPUTY PRESIDENT: All right. Yes, well, that can be done now. Do we need to wait until that is done, Mr Hodgkinson, or is there something else that can be usefully attended to?

PN74

MR HODGKINSON: No, your Honour, provided your Honour doesn't mind that we approach. The next housekeeping matter, as it were, is that your Honour will need to have, although only in respect of brief references, a copy of the Superannuation Guarantee Administration Act 1992 and we hand up a copy of that, your Honour.

PN75

THE SENIOR DEPUTY PRESIDENT: Yes. Thank you.

PN76

MR HODGKINSON: Your Honour, the only other matter - your Honour will note in paragraph 4.4 of the appeal notice, and I suppose 4.3, we've referred to cost impact. There is something said by the Commissioner as to cost impact but what we've dealt with here is the actual figures extrapolated to some extent by access to some statistical information which was originally drawn from the Bureau of Statistics. We don't say that the information that we presented to the Commission is other than a guide.

PN77

We can't assert and we don't assert as to its single dollar accuracy but we do say that the cost impact in this industry of an increase in excess of $5 a week or put another way, an additional cost burden of $5 a week in respect of each employee covered by the awards is very significant and we didn't want to just leave your Honour on that basis although I've no doubt that your Honour has extensive knowledge from which you're entitled in this Commission to draw as to the size of the industry. In that respect, what we've done is prepare a very short affidavit of Daniel Murray which affidavit annexes a more lengthy document.

PN78

The only relevance of that document for present purposes is to establish the statistical information which is to be found at page 10 and 17 of the annexure and I seek to tender that.

PN79

THE SENIOR DEPUTY PRESIDENT: Well, presumably this is really round 2 of evidence relating to the same matter that was before the Commissioner.

PN80

MR HODGKINSON: It takes the actual order made by the Commission and extrapolates the figures based on the statistics. We don't suggest that your Honour ought rule in relation to its acceptance on the basis of a Full Bench. What we would suggest is that it's appropriate for your Honour to deal with it only for this purpose, that is the purpose of the stay.

PN81

THE SENIOR DEPUTY PRESIDENT: But presumably the cost impact of the variation to the definition of ordinary time earnings was before the Commissioner.

PN82

MR HODGKINSON: There is some limited information.

PN83

THE SENIOR DEPUTY PRESIDENT: Well, why should I accept this now if that was not seriously put as one of the discretionary reasons why he should not grant either the definition that was sought or the retrospectivity, for example.

PN84

MR HODGKINSON: It was argued on that basis, that is, the issue was raised before him that there would be a substantial cost impact as a consequence of the decision. He didn't have the same extrapolation that we seek to advance to the Commission today as to that issue, but the issue was squarely raised.

PN85

THE SENIOR DEPUTY PRESIDENT: Well, what was the evidence that was put before the Commissioner; do you have either the witness evidence or the exhibit that was before the Commissioner?

PN86

MR HODGKINSON: There was no exhibit before the Commission in relation to the cost impact. There was an extrapolation by my learned friend which is referred to in the Commissioner's decision and no other.

PN87

THE SENIOR DEPUTY PRESIDENT: Is this the point 8 - or the point 1.8?

PN88

MR HODGKINSON: That's point 1.8.

PN89

THE SENIOR DEPUTY PRESIDENT: Yes. And what was your reply?

PN90

MR HODGKINSON: There was no evidentiary reply on behalf of the employees.

PN91

THE SENIOR DEPUTY PRESIDENT: Well, why should you now be able to use this for the purposes of the stay?

PN92

MR HODGKINSON: Because the Commission's role in the purpose of the stay is to balance an additional question; that is the balance of convenience. That was not a question before the Commissioner, nor could it have been a question before the Commissioner. And as I say, I don't advance this information on the basis that we seek a ruling from your Honour that it be received by the Full Bench; I advance in on the basis that your Honour is dealing with this stay application, and for that purpose only.

PN93

THE SENIOR DEPUTY PRESIDENT: Yes. Have you seen this document, Mr Maxwell?

PN94

MR MAXWELL: Your Honour, I was handed a copy of this document this morning just before we started, and I seriously question a lot of the figures and calculations contained within it. We believe it - it's just misleading; it contains inaccurate information, and I don't think it will assist the Commission in determining the matter this morning.

PN95

THE SENIOR DEPUTY PRESIDENT: Well, it is accepted by you that there will be a cost impact, or even if it isn't accepted by you, that was a finding made by the Commissioner in part, or wholly on evidence you led. I take it that you wouldn't accept that it's a significant, I think, a significant cost impact, whatever that might mean, in terms of the arithmetic?

PN96

MR MAXWELL: No, your Honour. I mean, I should point out that in the proceedings before Commissioner Jones we did provide - in seeking retrospectivity we did provide a cost breakdown on what the losses were to employees, and that's why I raised the issue of exhibit B14, because that was part of exhibit B14, but none of the employees raise an issue as to the cost impact on the employers apart from in general terms. However, the whole issue is complicated on the basis that, I mean, I've seen the figures that the MBA sought produced today, and that takes into account the total number of employees in the industry. However it doesn't take into account the number of - the number of workers, I should say, who are self-employed, who are subcontractors, to whom the award doesn't apply. It doesn't take into account those people who are provided with transport, in which case the fares allowance doesn't apply. So there's a whole range of factors that aren't covered in the affidavit.

PN97

In regard to the cost impact, we recognise there is a cost impact, however we believe it is of the vicinity of an increase of 0.81 per cent for those employees who actually receive the allowance, because the allowance is not paid to every worker in the industry.

PN98

THE SENIOR DEPUTY PRESIDENT: Yes. Mr Hodgkinson, what I'm thinking about at the moment is the basis upon which it can be - there can be some agreed position that there is a cost impact on employers, and perhaps more accurately it should be there as an additional cost as a result of the variation to the definition of ordinary time earnings upon employers. The Commissioner made a finding on the evidence before him as to what that is likely to be. The employers before the Full Bench may wish to lead fresh evidence as to what it is. It's likely that will be challenged by the union. But for the purposes of the stay I accept there is a cost impact.

PN99

Would my decision on the stay be any likely to be different one way or the other if the cost impact - I'm sorry, I'm not putting this well. I am not going to be able to make any decision. Indeed, I don't even know if I'm going to be able to be persuaded today what the ballpark is of the cost impact, but I would accept today that there's a cost impact. That's what the Commissioner found. Do I need today to be persuaded that it's a big one, or a medium sized one, or a small one?

PN100

MR HODGKINSON: I think in reality your Honour only needs to be comfortable, and I use that word in the sense that I'm not even sure your Honour needs to be persuaded, comfortable that it is a not insignificant one. If it was an insignificant one that may be a factor going to balance of convenience. If your Honour though is comfortable that it is something other than that categorisation, then that's as far as one really needs to go, because that's the - becomes a balancing factor.

PN101

THE SENIOR DEPUTY PRESIDENT: Mr Maxwell, do you accept that the cost implications of the variation to the definition of what's comprised in ordinary time earnings, is not insignificant? Could we categorise it as not insignificant?

PN102

MR MAXWELL: Well, your Honour, we believe the figure quoted by Commissioner Jones is accurate in regard to the cost impact. I suppose the question of whether you believe that cost impact to be significant or insignificant is a matter of opinion. All I can say is that the cost impact in regard to this would be less than the impact of the increase in the fares allowance which was consented to by all the employer organisations in the industry when it was read in August. Now, just to explain that, the fares allowance per day increased, I believe, from 12.60 a day to 13.30, or I think it's 13.60. And that applied to all those who received the fares allowance, and that was of the same magnitude as the increase in the superannuation contributions. Given that the employers had no problem consenting to that, we don't believe that the cost impact is that significant in the general scheme of things.

PN103

THE SENIOR DEPUTY PRESIDENT: Yes.

PN104

MR HODGKINSON: Your Honour, could I just say one more thing? Can I invite your Honour to consider this approach? It may be best if we make our submissions absent the evidence. If, however, at the end of those submissions your Honour feels that your Honour needs to be addressed directly on that particular issue because your Honour feels that it may have some weight in the overall consideration, then it could be readdressed at that time.

PN105

THE SENIOR DEPUTY PRESIDENT: Yes, I think so, although I must say I am not far off thinking that the approach probably would be that the cost impact is not insignificant, because that is how I would categorise the findings - that is what I think is reflected by the findings of the Commissioner, but I agree that if you probably need to, at least on balance of convenience, establish that it's something more than that, you can return to it and attempt to show me that not insignificant is a bit of an under-estimation in your view.

PN106

MR HODGKINSON: Yes, your Honour. Yes. We're happy to deal with that. Can I just say one more thing about the approach just so that my learned friend can know about it? Your Honour, we do not accept that there is any validity at all in the comparison of the movement of an allowance, even the fares and travelling allowance and its quantum, and the cost impact of the Commissioner's determination. By analogy that would be the same as saying, if you consented to a wage increase you ought to consent to any other increase that is of a lesser individual magnitude, and that's certainly not the case.

PN107

The other problem with the approach articulated by my friend is that it's inconsistent with the principles in any event. I mean, the very purpose of wage fixation is to weigh up the very - the various components within the wage structure and determine whether some or none of those components, having regard to their wider economic circumstances, ought to be moved. Now, that doesn't mean that you compare one with the other as to individual magnitude. So I just put my friend on notice that if that submission is made that will be our attitude.

PN108

THE SENIOR DEPUTY PRESIDENT: Now, so I don't forget it, volume 2 of the Appeal Books is said to be inappropriate to be before the Members of the Full Bench. Do you intend to take me to any part of volume 2, the folder described as correspondence today?

PN109

MR HODGKINSON: Yes. I think my friend - my friend, with respect, your Honour, didn't describe the whole of the volume as dealing with correspondence. It has correspondence and transcript in it - - -

PN110

THE SENIOR DEPUTY PRESIDENT: I see.

PN111

MR HODGKINSON: - - - and he only raised the issue as to correspondence.

PN112

THE SENIOR DEPUTY PRESIDENT: All right.

PN113

MR HODGKINSON: Your Honour, I accept for today's purpose his assertion that none of that correspondence was before the Commissioner if - and it's not my intention in any event to refer to any of that correspondence for the purpose of today's submissions.

PN114

THE SENIOR DEPUTY PRESIDENT: All right.

PN115

MR HODGKINSON: On that basis what I would suggest is that that issue be taken to this further consideration that will happen post today's proceedings of the Appeal Books in general, and if it wasn't before the Commissioner I concede openly now it is not appropriate for an Appeal Book.

PN116

THE SENIOR DEPUTY PRESIDENT: All right. Yes, thank you.

PN117

MR HODGKINSON: Your Honour, can I then deal with - in a global sense, firstly, this decision that's made by the Commissioner. Your Honour will now be apprised of the fact that the first decision was made on 30 July 1998 wherein, essentially - and that commences at page 62 of the Appeal Book - essentially what was there dealt with, under section 113 of the Workplace Relations Act, were consent positions between the majority of employers and the union. There was no consent to that position by HIA and, indeed, they articulated an adversarial position which was not accepted by the Commissioner.

PN118

They sought to appeal, as my friend has already pointed out. That attempt was completely unsuccessful and orders were made in accordance with the consent which had been identified to the Commission by the majority of employers and by the union. Thereafter the issue that remained between the parties was the inclusion or otherwise in the definition of over - sorry, ordinary time earnings in the award - and I refer to - if I might just refer to the award meaning all of the four awards that were before the Commission - whether or not fares and travelling allowance ought be included in it.

PN119

Now, the impact of including an allowance into the definition of ordinary time earnings is to increase, for the purposes of calculating superannuation payments to be made by an employer, the basis from which you calculate that entitlement. Now, pursuant to the superannuation legislation, a percentage of ordinary time earnings must be paid by an employer as a superannuation contribution. So by increasing the basis, or the base, being ordinary time earnings itself, one increases the percentage that - or sorry, the dollar figure that the percentage ultimately calculates. So that question was the question that remained between the parties. The union clearly advocating that it ought be included and the employers advocating that it ought not.

PN120

In terms of the decision then, which was made on that issue, it's decision of 30 July 2001 commencing at page 25 of the Appeal Book, and that's the substance of the decision which gave rise to the orders the subject of the appeal. There is a subsequent decision which is included in the Appeal Book, commencing at page 4, but that decision goes to form of orders not to the question of whether or not the orders ought be made, it already having been determined that orders ought be made by the Commissioner as at 30 July 2001.

PN121

THE SENIOR DEPUTY PRESIDENT: Was there any agreement reached or anything said by the employers at that time which may explain why an appeal was not lodged following 30 July 2001 decision?

PN122

MR HODGKINSON: Well, yes there was, and the Commissioner refers to it in his subsequent decision. That is the MBA put on notice at an early time that they would anticipate in the making of the orders, but on the basis that they had already notified everybody that they were going to appeal. And we'll go to page 16, which is page 13 of the latest of the judgments, the judgment of the 9th of the 10th. The Commissioner in paragraph 66 is there dealing with an HIA submission, not a submission made by the MBA, but he says this, he says:

PN123

Perhaps it is more -

PN124

he talks firstly of the HIA submission really being in the nature of an appeal from his earlier decision, and then says:

PN125

Perhaps it is more illustrative than at paragraph 848 of transcript where other employers' spokespersons put -

PN126

and the first part of it is not terribly relevant to this particular question but one then sees, about half-way down:

PN127

The MBA has already notified the Commission in writing it does intend to lodge an appeal as it has the right and I believe that, well, Bisco certainly is supporting that appeal.

PN128

Now, your Honour, there is another forensic reason. There is no appeal from the decision of 30 July. The power in respect of appeal is found in section 45 of the Workplace Relations Act, and if you go then to 45.1:

PN129

Subject to this Act an appeal lodged to the Full Bench will leave the Full Bench against -

PN130

(a) is a decision in relation to an industrial dispute. It is clear, and the Commissioner makes it clear at the commencement of his decision, that this is an application under section 113 to vary, not a decision in relation to a dispute. But then if one goes to (b):

PN131

An award or order made by a member of the Commission other than an award or order made by consent of the parties to an industrial dispute.

PN132

THE SENIOR DEPUTY PRESIDENT: Oh, well, look, I can short circuit you here. I had in mind either a challenge under (c) or (g) because (g) in particular, it seems, might be said to permeate some of your grounds. But in any event, it is not a matter that I need concern myself about.

PN133

MR HODGKINSON: No, with respect, the view was taken that until the orders - - -

PN134

THE SENIOR DEPUTY PRESIDENT: I understand.

PN135

MR HODGKINSON: - - - no right of appeal, but people were, in a sense of fairness, told that this was what was happening. What we say in a general sense is this that, the Commissioner then in his decision, purports to exercise a power under section 113 of the Act to vary the award. What he doesn't tell us anywhere in his decision is how he exercises that power, other than to provide us with the result. That is, he doesn't deal with the discretionary aspects of section 113 of the Act to tell us whether firstly, he thinks that he is making - is varying the award per se, or he has determined that it's desirable for the purpose of removing ambiguity or uncertainty, that he vary the award.

PN136

So at no point, in our respectful submission, in the decision are you able to discern other than the fact that you get a result which we would say is not sufficient, that he finds as a matter of discretion that he ought properly vary this award. The closest he comes is to say at page 58 of the Appeal Book, paragraph 133 of his decision, this: I have concluded that the claim in the manner tabled does not sufficiently offend the areas mentioned above nor those overall. Now, I pause there. With respect to the Commissioner, it's not clear to what he's referring there, but I'll come back to that part of the submission at a later time. He then goes on to say:

PN137

It does not have connotations which unduly would affect the public interest equation ...(reads)... therefore am prepared to grant the union's claim.

PN138

Now, with respect to the Commissioner, that expression does not appear to be the - firstly the defining of the discretion under Section 113 in light of the factual circumstances presented to him, nor does it appear to be, or provide a reason, that that discretion ought be exercised. If anything it appears to have proceeded on an incorrect basis, that basis either being incorrect for the reasons that whatever it is that he has referred to in the first sentence in paragraph 133 is misleading unless it is confined to the principles, the wage-fixing principles, and secondly and independently of that first grounds, this concept of incongruity is not a matter that would be a proper basis in the circumstances of this case for an exercise of discretion in favour of an application to amend the definition of ordinary time earnings.

PN139

THE SENIOR DEPUTY PRESIDENT: Mr Hodgkinson, I take it that you don't read Section 113(2) as allowing the Commission to vary an award.

PN140

MR HODGKINSON: I'm sorry?

PN141

THE SENIOR DEPUTY PRESIDENT: 113(2). "The Commission may vary an award."

PN142

MR HODGKINSON: Yes.

PN143

THE SENIOR DEPUTY PRESIDENT: But it shall vary it if the member needs to remove ambiguity or uncertainty. So this is not an ambiguity of uncertainty case. It's a discretion as to whether it's appropriate to vary an aware. There's power to do so.

PN144

MR HODGKINSON: Well, my first point is that you need to make an assumption in order to say, "This is not an ambiguity or uncertainty case," because the Commissioner never tells you. He never tells you what discretion he exercises.

PN145

THE SENIOR DEPUTY PRESIDENT: Well, you were never putting it up as an ambiguity or uncertainty. You were putting up a competing version of what you wanted. So it didn't seem to bother those instructing you before the Commission or at all, did it? It only seems now to be an additional point on appeal. Is that being unduly harsh?

PN146

MR HODGKINSON: No. With respect, that though characterises the proposition that I tried to advance in a way that I didn't seek to advance it. What I say is that Section 113 is a discretionary section. The exercise of the Commissioner's discretion cannot be discerned, or if it is it's to be found in that paragraph 133 and on that basis it is wrongly exercised because the criteria that he poses for it are not criteria that in the circumstances allowed the exercise of the discretion conferred by Section 113. Now, I have to make the point, though, that he doesn't say he's not exercising the power to remove ambiguity or uncertainty, otherwise I haven't addressed the totality of the discretion conferred by Section 113.

PN147

We don't say that this appeal ought be allowed to go forward on the basis that he didn't deal with that. What we say though is that because he didn't deal with it it will make it more difficult when one goes through the total review of this matter to discern what it is that he did do, or probably a little more fairly to the Commissioner the basis upon what he did is difficult to discern.

PN148

THE SENIOR DEPUTY PRESIDENT: Isn't a basis for his motivation clear at least to this extent: he was persuaded to include in the definition of ordinary time earnings the reference to - I'm still trying to pick up the acronym. I don't think I've yet done that. Fares - - -

PN149

MR HODGKINSON: Fares and travelling allowance I think.

PN150

THE SENIOR DEPUTY PRESIDENT: Fares and travelling allowance. There's some acronym that's given. And one of his considerations - in fact, it might be a significant one - was that it seemed to be consistent with a ruling or advice given by the ATO. Now, I know that's another ground of appeal that you raise, but isn't that his motivation? Isn't that clear enough?

PN151

MR HODGKINSON: Your Honour, if that's his motivation then he falls into two other areas of error, but what it does appear is that he looked at this issue of whether or not the definition under the Act, the Superannuation Guarantee Act, was different to the definition under the Award. What he does not seem to have taken into account is two very important factors in terms of the tax office position. One, they accept that it is valid for an award to have a different definition of ordinary time earnings to that which they promulgate in the Act. Secondly, that if there is a different definition of ordinary time earnings in the award, that takes precedence over and fulfils completely the requirements of the Act. And then thirdly he didn't have regard to the fact that the rulings to which he was - or his attention was drawn was said by the tax office to be the subject of further review.

PN152

Now, that's important because what he's done is base a standard in an award upon a ruling that could be changed at any time without regard either to the Commission, to the award, to the parties to the award or to the circumstances in the industry. And we say that that is - him not having waived those factors up is a very significant reason why you would look closely at the exercise of his discretion here and say, in our submission, that it as wrong. The Commissioner - if I could go then to some particular parts of the decision, the Commissioner - and I point this out rather than read it - repeats a submission - the Commissioner's decision takes two parts.

PN153

The first 75 paragraphs are dealing with the facts and the submissions that are put to him. Thereafter, he deals with his decision starting at paragraph 76, which is to be found on page 42 of the Appeal Book, referring when he felt necessary again to some of the propositions advanced to him in relation to the points that he was determining. It's important to see that so that one understands the context in which those - the matters that he raises in the first 75 paragraphs are put. Essentially he is repeating propositions of factual material that has been advanced to him and he identifies the competition between the various positions in that way.

PN154

At page 28 of the Appeal Book, paragraph 8, the Commissioner deals with the submission, and sets out at about point 3 on the page the proposition that starts:

PN155

The main thrust of our argument is that if it wasn't for the current definition of ordinary time earnings in the award, then the employers would be required to...

PN156

THE SENIOR DEPUTY PRESIDENT: Yes.

PN157

MR HODGKINSON: That's point 3 on the page, page 28. I don't - I'm just identifying some of the things the Commissioner - was put to him so that one can see in the context of the debate. At page 30, paragraph 18, he sets out a summary of what he discerns as the fundamental objection on the part of the employers.

PN158

THE SENIOR DEPUTY PRESIDENT: Is that what the fundamental objection of the employers was?

PN159

MR HODGKINSON: I think, with respect to the Commissioner, it's an oversimplification. It embodies in part that which was advanced by the employers, but - I don't mean this critically - by attempting to distil down to one or two lines the propositions that have become essentially too broad. But that can't be said to be a criticism, because if you look at paragraph 12 and 13 and you look indeed at paragraph 17, he has set out in broader terms the employers' positions. So we don't - that's why I don't make any particular submission about it. I just identify it as - then I think importantly, at page 38, he sets out again an extract, as I read it, from the union's final submission. At the third dot point there:

PN160

The issue to be determined here...

PN161

Now, the characterisation, we say, by the union in that way draws attention to the fact that what is here being asked of the Commission is an exercise which will seek - which must have for its proper discharge by the Commission regard to the wage fixing principles, and ultimately the Commissioner either misdirected himself on those principles or misapplied them. And can I develop that just in a broad sense, your Honour: if you found, as the Commissioner appears to have done, an incongruity between the award provision and the provision in the Act - that is, the Superannuation Act - and you are aware that the Superannuation Act, by its provisions, does not impose an obligation on the award or the Commission to meet its particular standard, then you are forced, with respect, to go back and determine what it is that you're looking at - and in this case, you're looking at effectively an increase in entitlement to those covered by the award, which will be borne by the employers; and having determined that, you then have to satisfy yourself - that is, the Commission has to satisfy itself - that that increase fits within the wage fixing principles. Otherwise there is the real potential to fall, one, outside the principles; and two, outside the proper area for the exercise of the discretion conferred in section 113.

PN162

And can I give an example? The Commissioner, under section 113, even though it may be said has got a broad based discretion to vary an award, could not vary an award under the present legislative regime so as to institute in that award a wage regime that was excessive in terms of the safety net approach. So they couldn't - the Commission can't just come, look at a variation application, and say, "Well, look, in respect of this particular class of labourer, we're going to order a variation to the wages clause to pay them $1000 a week." And that's as a consequence of the other provisions of the Act that require the safety net approach to be adopted by the Commission and limit the Commission's power to deal with applications to vary in light of those other principles.

PN163

So that whilst there appears to be this discretion, it has to be exercised within the confines of the legislative framework. And that seems, with respect, to have been recognised on many occasions when various applications have been made to the Commission. Here, the Commissioner misdirects himself because he doesn't go through that exercise; or, if he does go through it, then he gets it wrong, with respect to him. That then takes us to the commencement of his decision, and he talks in paragraph 78 of the Act, being the Workplace Relations Act, and he says that he is to - he looks at several pertinent guides which he says:

PN164

...I see the Commission need to consider, while addressing the remaining outstanding claim.

PN165

The first of the guides he says comes from section 90A, and that is that:

PN166

The Commission is to have regard to the operation of superannuation guarantee legislation when making national wage case decisions.

PN167

Well, with respect to the Commissioner, that gives him no guide at all. In fact, it has the potential to mislead him, because it's a direction of a legislative nature to the National Wage Bench. So that if that were truly something that was to act upon the Commissioner's consideration, what it would mean is that the question before him had to be referred to the National Wage Bench. Now, we don't make that submission, but he seems to have had regard to the mere fact that the legislation - superannuation guarantee legislation - was mentioned is enough, without taking the context in which it's mentioned, and more particularly, the context that the legislation has provided in terms of to whom it's directed that attention, being the National Wage Bench.

PN168

He then says sections 91 and 92, for all intents and purposes of the current claim, are considered applied and met. With respect to the Commissioner, we don't really know what it is that he means by that, and we have to go to the legislation itself:

PN169

The Commission to encourage agreement on procedure -

PN170

section 91, sorry, your Honour -

PN171

The Commission to encourage agreement on procedures for preventing and settling ...(reads)... by discussion and agreement.

PN172

Now, your Honour, what we say about that is yes, that is a direction to the Commission with which it must comply. It must encourage, as it has always, in its manifestations throughout - since its creation - encourage resolution by agreement of industrial disputes. In this case, the Commission - if the Commissioner is saying that that's a requirement and we have done that up to the point of 1998, where we had identified the one issue that couldn't be resolved by agreement - well, that's an observation available to him, but it is not an observation relevant to a consideration necessary for addressing the remaining - that which remains outstanding in the claim, as he had proposed in paragraph 78 of the decision.

PN173

It's just an irrelevant consideration. He wasn't saying to the parties, "Well, you ought to go away and talk about this before I make this decision". It becomes an irrelevant matter. Section 92 then says the Commission have regard of compliance with dispute procedures.

PN174

Where the parties to an industrial dispute are bound by an award that provides procedures ...(reads)... if applicable to the industrial dispute have been complied with.

PN175

Now, I don't want to repeat what I said about Section 91 but it's equally applicable to Section 92. This is a misdirection, because this has nothing to do with the exercise that he is being asked to undertake, and in that he says that it impacts upon his discretion to grant this application, then he has been guided by irrelevant and inappropriate considerations, and we would say that one could then be comfortable that there is a need for a review of the exercise of that discretion.

PN176

He then goes back to Section 90 which, as we know, is a direction to the Commission to have regard to the objects of the Act, the state of the economy, and he says:

PN177

...and a need to take into account public interest. I have attended to this aspect.

PN178

And he does, so I won't deal with it further in those paragraphs - paragraphs 120 to 105. And the he refers to 89A which also has been read, particularly sub-sections 2 and 5. 2, we take it, is a reference to the fact that 2S appears - superannuation; and 5 is hours worked, that is 89A(5), and that says:

PN179

Paragraph 4(b) does not prevent the Commission from including ...(reads)... hours worked by regular part-time employees.

PN180

Now, your Honour, that can't have anything to do with this case. But I - with respect to the Commissioner - am unable to read his reference to, particularly, sub-sections 2 and 5, in any other way. 2, as I've conceded - we can see why that might be said to be referred to; but 5 becomes something in relation to part - the setting of hours and regular hours for part-time employees.

PN181

My friend says - and I'm grateful for the assistance - that he thinks he is referring to 2S. I've already conceded that I thought that that's probably he was referring to when he was saying - oh, I see. You think the "5" is an "S". Well, I'm sorry, that might be the case. I look at it, because it does say sub-sections. It is plural; not sub-section. So it looked at it as 2 and 5, and I did it because of the word, "sub-sections".

PN182

THE SENIOR DEPUTY PRESIDENT: I understand your point, Mr Hodgkinson.

PN183

MR HODGKINSON: The point we make is irrelevant. Your Honour, the next reference in 82 - in a real sense, by the various activities along the way, Sections 10 to 103 are seen as having been applied by specified intent. I am - again, with great respect to the Commissioner, a little at a loss as to what that really means. Section 100:

PN184

Disputes to be dealt with by conciliation where possible.

PN185

Well, I've already made that same point. Yes, back before 1998 certainly, but if it's going to be a factor that influences the exercise of the discretion in the arbitral proceedings before him, then he has misdirected himself. Section 101:

PN186

Findings as to an industrial dispute.

PN187

Well, he doesn't make those findings. They are, of course, very specific findings as to the parties, the matters in dispute and the record of finds. That - being as generous as I can, with respect to the Commissioner, to him, could only be a reference to the fact that the original log of claims contained a reference to superannuation. We don't advocate that it didn't. Indeed, I think it's exhibit B1, and it clearly does. That's all I could ascertain though, by reference, that otherwise it's a misdirection. (2):

PN188

Action to be taken where dispute referred for conciliation.

PN189

I've already made the point about conciliation and it applies to Section 102. And then completion of conciliation proceedings - Section 103. Again, if those are factors, they might have been factors in 1998, but not proper factors to which he ought have had regard in relation to the matter he was asked to determine by way of arbitral process.

PN190

Now, he then refers to Section 104 and 105. That - 104 and 105 - is just the exercise of the arbitral process. The fact that he refers to those is not extraordinary. He is just merely telling us, I think, that - "Well, I am exercising those arbitral powers"; which, of course, is what he had been asked to do. He then says - or it comes to Section - and I'm now reading from paragraph 83 of the decision - comes to Sections 106 and 107:

PN191

And so, unlike previous points in time during the claim's progress -

PN192

for this particular claim -

PN193

and through its final presentation of argument, I find that no reference was forcefully made by either party.

PN194

I am unable to read the word "forcefully" into Section 106 or 107: that is, misdirecting himself. He has proposed a test not found in the legislation, and it is clear that because in his view, something wasn't done forcefully, then it wasn't sufficiently done before him. And what he doesn't say is it wasn't done. And indeed, when one goes to the submissions, it is clear, in the MBAs submission, that the MBA had asked him, as an alternative - this is the other part of the Commissioner's approach to this area in which he is wrong. What he says is:

PN195

...not forcefully made by either party, to have this particular matter again referred to a Full Bench via the President.

PN196

It was only advanced indirectly and more by such oblique employer statements like "They believed it should". Now, what the Commissioner wasn't recognising in coming to that conclusion is that what was being put to him was an alternative.

PN197

You see, you didn't need ever to refer this matter, as a special case under the principles and under Section 107, if you accepted the primary argument of the employers; that is, that the overtimes earnings clause ought not be varied. There was no need - in fact, no basis - if that was going to be your finding. And that, of course, was the primary position. But as an alternative what was put to him is: if you are going to find that there ought be an amendment, then you have got to look at the reference under Section 107 to the President. But what the Commissioner has misdirected himself as to: firstly, he hasn't recognised that it's an alternative; secondly, he's proposed this test of "forcefully" which doesn't exist.

PN198

I don't seek to take you to them at this stage, your Honour, but the references in the MBA submissions can be found in Appeal Book page 207 and Appeal Book 209 to this - - -

PN199

THE SENIOR DEPUTY PRESIDENT: Weren't there applications made from time to time that were refused by the President?

PN200

MR HODGKINSON: An application - yes, there were, your Honour, but no application was made other than the alternative being put at the relevant time. The relevant - you see as I've already advanced, if the Commissioner found in favour of the primary argument of the employers, there was no basis for a referral because there was no special case argument. If, on the other hand, he found that there was a basis for the exercise of the discretion in his view then what he was saying is there is a special case.

PN201

That is, I'm looking at this saying, well, there is now a movement and I'll come to the special case principles very quickly, but there's a movement warranted by this application. At that point it became a special case because within the principles the Commissioner didn't have the power to grant that application so he had to refer it with respect to the Full Bench and he may have made - he may have or he may not have in the circumstances made a decision to dismiss the primary point and then said, "But, now, having looked at that, there's clearly a special case and it's been put to me that a section 107 application ought to be made".

PN202

And he was within his rights to call the parties back and say, "Well, that's my approach to it, what do you want to do", but rather than that he proposes this forcefully test and then doesn't appear to appreciate the alternative nature of the argument. The President was never asked to consider an application under section 107 arising from that proposition. He was asked after the decision was made, which with respect was too late, by the HIA to look to consider a section 107 application but at that point the decision had been made to vary the award by the inclusion of the clause. It couldn't have possibly been dealt with by the President under section 107.

PN203

THE SENIOR DEPUTY PRESIDENT: When were the submissions made that you mentioned? You mentioned where they are to be found, but I didn't go to them, where the MBA had suggested this alternative?

PN204

MR HODGKINSON: They're the written submissions that were produced to the Commission by the MBA. They are the two references and those written submissions were very briefly addressed. Because they've been put in writing - - -

PN205

THE SENIOR DEPUTY PRESIDENT: Where are they though?

PN206

MR HODGKINSON: Sorry. They commence at Appeal Book 206. The reference to section 107 or to special case is to be found in paragraph numbered 5 on 207 and again on 209 at about point 6.

PN207

THE SENIOR DEPUTY PRESIDENT: And what date are thee?

PN208

MR HODGKINSON: Sorry, your Honour?

PN209

THE SENIOR DEPUTY PRESIDENT: What is the date of all of these submissions? 23 March.

PN210

MR HODGKINSON: Yes.

PN211

THE SENIOR DEPUTY PRESIDENT: So these are before the July decisions?

PN212

MR HODGKINSON: Yes.

PN213

THE SENIOR DEPUTY PRESIDENT: The final submissions in - - -

PN214

MR HODGKINSON: Yes. So what has been put to the Commissioner is, "Well, if you find that it ought to be varied then what you've got is a special case. If you don't find that it ought to be varied, you haven't got a special case."

PN215

THE SENIOR DEPUTY PRESIDENT: I just can't understand why it would have been left that late. The competing positions before the Commissioner were at least clear enough, weren't they? Well and truly by March 2001, if not earlier, what the union wanted included in the definition and what the employers wanted which I think is pretty close to no variation to the existing definition.

PN216

MR HODGKINSON: I just missed the very last part of what your Honour said, I'm sorry.

PN217

THE SENIOR DEPUTY PRESIDENT: No variation to the existing definition.

PN218

MR HODGKINSON: Yes.

PN219

THE SENIOR DEPUTY PRESIDENT: Yes. No surprises in - - -

PN220

MR HODGKINSON: That position was - - -

PN221

THE SENIOR DEPUTY PRESIDENT: That's clear enough.

PN222

MR HODGKINSON: Yes, your Honour.

PN223

THE SENIOR DEPUTY PRESIDENT: There's no surprises that the Commission is going to do one of the two most likely, not something in between. It's not one of those arbitral results that you would exercise under the Act your power to grant an award relief that is not consistent with - well, it should be consistent but what is not what you are being asked. It wasn't that sort of case.

PN224

MR HODGKINSON: I wouldn't - - -

PN225

THE SENIOR DEPUTY PRESIDENT: It was clear enough they were going to have the variation made sought by the union or there will be no variation made. Why would you in this pretty - it's not really oblique, it's there in black and white, but why would you leave it that late to make your application?

PN226

MR HODGKINSON: Would you just excuse me one moment?

PN227

THE SENIOR DEPUTY PRESIDENT: Yes.

PN228

MR HODGKINSON: Your Honour, I am not sure that I can discern from the paper work the answer to your Honour's question other than it may - your Honour will note that in 1998 the decision in respect to the consent matters is made; then there's the appeal in relation to those matters. The matter is then called on but adjourned indefinitely and that's on 25 March 1999; that's called on at page 446 of the Appeal Book. The Commission adjourns it indefinitely at 456. It's called on again then in December 2000 so that there's a very significant gap and I think I'm right in saying that that was to allow the appeal process to take place.

PN229

MR MAXWELL: Your Honour, perhaps if I can help Mr Hodgkinson: the significant gap in the proceedings was due to the fact of the building awards being referred to a Full Bench dealing with the allowability of superannuation provisions and award, and on that basis the matters before Commissioner Jones were put on hold and just to assist Mr Hodgkinson again he will recall that in the Appeal Books there is - there was an earlier reference to the President seeking a Full Bench by the HIA that was made prior to their appeal, and the President refused to grant a Full Bench on the grounds that it didn't meet the needs - sorry, the interests - the public interest test.

PN230

It was then - this was prior to Commissioner Jones issuing his first decision and I think it has to be put in context that there was one application to vary the awards and the definitions of ordinary time limits in the awards to include a range of allowances. A number of those allowances the major of employers consented to apart from the HIA. During those early proceedings, the HIA sought a reference to the Full Bench and this was on 17 March 1998 which is found in pages 473 to 478 to the Appeal Book and that was on the basis and ordered in to ensure that the variation does not offend the guidelines established in the superannuation test case. On 27 April 1998 the President refused the application pursuant to section 107 on the grounds that:

PN231

I am not of the opinion that a part of the industrial dispute is of such importance that in the public interest it should be dealt with by a Full Bench.

PN232

And that is included at page 76 of the exhibit book.

PN233

MR HODGKINSON: I am indebted to my friend and I agree with what he has just put. Can I just say a couple of things about it? Just coming back if I might just finish off the area I was dealing with? So that what you had then was that the matter is brought back in December 2000; by March 2001 written submissions are to be put in. They were put in and they raised the issue. So, yes, it appears on one basis that there is a very long gap, but having regard to the other explanations, their effect is not a significant gap and, your Honour, identified in the transcript is the fact that the MBA representative who was in the process of preparing submissions and looking after the matter, in fact suffered an injury which put him in hospital at the very relevant time.

PN234

The file had to be transferred and that transfer in fact caused a short delay, but a delay that everybody understood in the circumstances in the preparation of and presentation of the MBA submission. So the first point is that when one looks at the totality of it, it's not such a significant gap. Secondly, as I say, I accept what my friend says, and I in effect had the process that he more correctly identified in my mind, which shows that he's more familiar with what happened than I. The process of the HIA referral, though, is irrelevant, in my submission, to the present proposition because it was made out of time prior to the issue of the Commissioner's first decision in July of 1998, and it was made on the basis, as far as I understand it, and I don't want to go too far into it, that the issue ought be referred to the Full Bench under Section 107.

PN235

It wasn't made either in light of the July '98 decision or in light of the proposition that was being advanced in early 2001, that is, being processed - when I say advanced, being processed by the Commission in early 2001, so that that application had dissipated for other reasons. Now, when it's made - you see the HIA making an application for referral to a Full Bench when the majority of employers and the union had a consent position that they wanted to advance to the Commissioner seeking to do it in the public interest.

PN236

THE SENIOR DEPUTY PRESIDENT: Well, what did the MBA - the matter came on again before the Commissioner subsequent to the written submissions having been lodged in March 2001.

PN237

MR HODGKINSON: Yes.

PN238

THE SENIOR DEPUTY PRESIDENT: Where in the transcript did the MBA refer to its requests for a Section 107 reference?

PN239

MR HODGKINSON: Mr Murray commenced the submissions on behalf of the MBA at page 370 of the transcript and largely relies on, or takes the Commission though, if you like, that written submission and at page 370 at the last sentence he says this:

PN240

Further, or in the alternative, the allowance is an expense based allowance ...(reads)... for those reasons the application ought be dismissed.

PN241

That's the first point that I made a little earlier.

PN242

In the alternative it should be treated as an application which falls above the award safety net of wages and conditions and should be referred to the President as a special case.

PN243

So he's clearly putting this proposition on an alternative basis. But, as I've already referred to in the Commissioner's decision, he doesn't treat it that way and he doesn't because he misdirects himself on this question of forcefully.

PN244

THE SENIOR DEPUTY PRESIDENT: So the first occasion the MBA raised the matter being referred as the special case was in March of 2001?

PN245

MR HODGKINSON: Yes, your Honour, but when one looks at the history of the way the case went, that really - in December there was a time-table in proposal, December 2000, and I don't seek to go to it in any sense, but that's at page 430 - commences at page 433, then on 19 March 2001 submissions are commenced in the proceedings but on that occasion Mr Murray tells the Commissioner at page 399 with apologies that he's been unable to meet that time-table because of this accident that had happened to Mr Thomas, who had carriage of the matter, and it had happened to him only the week-end before last. And that's at 399.

PN246
And the Commissioner accepts that. That's at page 400, PN100, and there's an acceptance that the submissions will be presented by the MBA, and they're the submissions that I've taken you to. Mr Maxwell makes his submissions on that day, he having also, as he's earlier identified, produced a written submission, and he essentially speaks to that. Your Honour, this alternative proposal was also advanced on that day by Mr Warren for Bisco. Mr Warren advances the alternate proposal at 430, and what he says is this at PN329:

PN247

We simply say that what the union is doing is asking for an additional allowance ...(reads)... to decide whether he wants to have a Full Bench or not.

PN248

We would argue that there is no justification for taking what the tax department says applies if there is no award, and taking bits of it and putting it into an award. The Commissioner says this:

PN249

What you're saying is you are not directly asking for a section 107 reference, you're asking me to decide.

PN250

Yes, in accordance with as I read the test case provision.

PN251

And then he refers to it. So what he said to the Commissioner there is, "look, if you decide that this is a matter where an additional allowance is to be paid we accept that that's within your purview. And if you decide it's not to be paid that's an end to the matter. If you decide it is to be paid then it raises this concept of reference to the President". And the Commissioner seems to be, at that point, apprised of it.

PN252

Firstly, he identifies section 107, so he understands what it is that's being referred to, even though the section number hadn't been mentioned, and secondly he seems to be accepting that there's this proposition that there is something for him to determine properly within his purview and that as a consequence of that he can make a determination. But what he then doesn't do is give any weight to what Mr Warren puts as the alternative. If you decide this matter in one particular way then we have to look at this question of section 107.

PN253

And the Commissioner falls into an error because he says that's not forcefully put. But it doesn't have to be forcefully put. That's not what the Act says. It's raised - is raised for consideration and it needs to be, we say, then properly dealt with otherwise there's a miscarriage of the discretion conferred by section 113 as well as the fact that it can't be dealt with by a single Commissioner. So on either one of those bases the Commissioner's decision, we say, falls. If I can then return to the Commissioner's decision at page 44 of the Appeal Book.

PN254

THE SENIOR DEPUTY PRESIDENT: Mr Hodgkinson, do you say that the Commissioner found that the requirements of the relevant legislation would have required, in the calculation of ordinary time earnings, the taking into account of fares and travel patterns' allowance?

PN255

MR HODGKINSON: I don't know that he makes a finding. He seems to accept, and I can't put it higher than this, he seems to accept that the Australian Tax Office's position is that if there were no award provisions as to ordinary time earnings at all then they would consider the fares and travelling allowance or possibly part of it to fall within the definition within the Act. But it's very important in dealing with that concept, in my respectful submission, your Honour, to identify that the Australian Tax Office only say that on the basis that there is no award definition of ordinary time earnings.

PN256

They premise their advice or their opinion on that basis. They say if there was not an award provision then they move and say, well, it's likely that it would fit in or part of it would fit in to the statutory definition. And with respect to the Commissioner he never really weighs that up. He never really comes to grips with that in terms of the discretion. You see, in a sense what he's doing is in circumstances where Parliament have specifically reserved to this Commission a right to override their statutory prescription he has deferred to the statutory prescription as though it were binding upon him.

PN257

And that's an error. The Parliament specifically made - or it acted this piece of legislation identifying that this very Commission could make an award provision that was inconsistent with, and then it dealt with two specific kinds, flat rates and averaging. And said, "well, look, flat rates and averaging, unless they have existed for a long time they're not going to be accurate enough for our purposes. So we're not going to allow you to do that. But other than that we're going to say to the Australian Industrial Relations Commission you are at large, you have a discretion".

PN258

And you might choose not to. It may be that the competition between parties appearing before the Commission is to whether or not there ought to be an award definition of ordinary time earnings. Or should you simply rely on the statutory definition. That would be a legitimate contest but that's not the contest here. The contest here is we've got ordinary time earnings, the legislation recognises the Commission's power to have that, but the Commissioner then deferred as though this other statute bound him in some way to a - - -

PN259

THE SENIOR DEPUTY PRESIDENT: Do you say that was the discretionary motivation to ensure that the definition in the award reflected all the component parts that otherwise would have been taken into account in an ordinary time earning definition in so far as, at least, the Tax Office applied that definition? Is that what seems to be his motivation?

PN260

MR HODGKINSON: Your Honour, I must say - it's the question of motivation. I think that's the result. I think that's the result.

PN261

THE SENIOR DEPUTY PRESIDENT: Yes, that's probably a better way to put it. Is that the - yes.

PN262

MR HODGKINSON: I'm just a little uncomfortable with motivation because I must say I have some difficulty understanding how he gets to his final result.

PN263

THE SENIOR DEPUTY PRESIDENT: Yes, well, with that change to my question. Yes.

PN264

MR HODGKINSON: Yes, then, as I say, what he seems to have done is said there's a statutory approach. He doesn't recognise in doing that that the ATOs say that that is one - there's consideration being given to review of it. And (2) it could be reviewed at any time. He doesn't weigh those in the balance in taking this approach. And he then says, "well, there's a statutory approach. I'm going to defer to the statutory approach", without weighing in balance that the statute and the ATO have already deferred to him as the Commission by saying, "if you have an ordinary time earning clause in your award our prescription doesn't apply. Ours is merely a default one or one that operates in circumstances where there is no other prescription for ordinary time earning.

PN265

And he doesn't weigh that up. Why would there be an exercise of discretion to meet a standard that the standard bearer itself says is subject to you, the Commission? And, of course, there's good sense for that. I mean, in a public sense there's good sense for it because the Commission, unlike the legislature in terms of superannuation legislation, is able to deal with specific industries or specific industry groupings and have regard to the circumstances within those groupings or industries that the legislature can't have regard to.

PN266

It can't have a different superannuation guarantee approach for one industry to another, although it may well be justified. And the way they have accommodated that problem is by saying, "well, we've already got the Australian Industrial Relations Commission that's set up to do exactly that". So in a public policy sense one can see the good purpose in allowing the Australian Industrial Relations Commission the ultimate discretion as to the determination of ordinary time earnings. But the Commissioner hasn't gone through that, with respect. All he's done is deferred, so far as I can discern, your Honour. Could I then go to the safety net principles that he appears to deal with commencing at page 44. Those - - -

PN267

THE SENIOR DEPUTY PRESIDENT: Sorry, page 44 of the Appeal Book?

PN268

MR HODGKINSON: Page 44 of the Appeal Book.

PN269

THE SENIOR DEPUTY PRESIDENT: Yes.

PN270

MR HODGKINSON: Your Honour, the safety net review is recorded and I hope your Honour received the reference, 104 IR at 314. It may that the print number has been referred - - -

PN271

THE SENIOR DEPUTY PRESIDENT: Was this the 2001 decision?

PN272

MR HODGKINSON: Yes, your Honour.

PN273

THE SENIOR DEPUTY PRESIDENT: Yes, I would suspect that we would have located the print number.

PN274

MR HODGKINSON: I have to apologise. It appears my learned friend wasn't given the reference, your Honour.

PN275

THE SENIOR DEPUTY PRESIDENT: Oh, all right. Well, despite the fact I said that would have been one we would have obtained it's not actually with me, but I have to say that I am fully appraised of that decision, having been a member of the Bench. I can't say anything else, can I?

PN276

MR HODGKINSON: No, no, I didn't notice your Honour's dissent so that I - - -

PN277

THE SENIOR DEPUTY PRESIDENT: No.

PN278

MR HODGKINSON: - - - took it as - - -

PN279

THE SENIOR DEPUTY PRESIDENT: Yes, but I was looking at it last night. I don't know why it hasn't followed me into Court. That's my omission.

PN280

MR HODGKINSON: Yes, I don't need to go into great detail to it.

PN281

THE SENIOR DEPUTY PRESIDENT: No.

PN282

MR HODGKINSON: I mean, essentially the principles have been set out and the Commissioner purports to look at those principles, but what I really want to point out is that what he does with them is not consistent with them. He goes then in 87, he says:

PN283

What is found to then follow -

PN284

is this, he says - he makes the statement in paragraph 86, to which I will return, and then in 87 he says:

PN285

What is found then is following the principles are a set of listed circumstances. By selection I choose the following warranting of closer examination.

PN286

THE SENIOR DEPUTY PRESIDENT: Sorry, I was - - -

PN287

MR HODGKINSON: This is page 44 of the Appeal Book.

PN288

THE SENIOR DEPUTY PRESIDENT: Yes. Paragraph number?

PN289

MR HODGKINSON: 87.

PN290

THE SENIOR DEPUTY PRESIDENT: 87. Yes, thanks.

PN291

MR HODGKINSON: And you see that he identifies certain principles as warranting of closer examination? That is, he is at least looking at them or, if not, having regard to them, and he first says:

PN292

(b) incorporate test case standards in accordance with principle 4.

PN293

Now, what he is referring to is then set out in paragraph 88. He sets out this - and again, he seems to be - it's a little difficult following through the principles exactly where he draws his numbering from, but he refers to test case standards and he sets it out in paragraph 88. Now, there are two problems with the way he's approached it: firstly, there is no test case standard that says a definition of ordinary time earnings ought include the fares and travelling allowance in any industry. So, it can't be said that he can operate pursuant to that principle by the application of such a test case standing. My friend says the superannuation test case. It specifically doesn't say that fares and allowance clause is to be included in ordinary time earnings.

PN294

THE SENIOR DEPUTY PRESIDENT: Well, it says that the Commission can arbitrate about what might be included in ordinary time earnings clause. Or maybe it says that the method by which the, what was then this moving percentage over a period of years - the base rate by reference to which the percentage is applied, can be a matter that can be arbitrated by the Commission. Maybe that's all he's meaning.

PN295

MR HODGKINSON: Well, yes. I'll address - firstly if we're just talking about the percentages then that's no part of this debate anyway.

PN296

THE SENIOR DEPUTY PRESIDENT: No, I understand that.

PN297

MR HODGKINSON: Secondly, if we're talking about the fact that the ordinary time earnings can be a matter included in an award, that's not part of this debate either because it's already there.

PN298

THE SENIOR DEPUTY PRESIDENT: Yes, I understand that, and survives simplification, so that can't be an argument.

PN299

MR HODGKINSON: That's so, and indeed, in this case, it had gone to a Full Bench, as my learned friend referred us to earlier, to say yes, in its form, that is, without fares and travelling, it was one, as your Honour says, survives award simplification and an appropriate matter under the Act to be included in the award. So in terms of test case standards, all of the criteria had already been discharged. They weren't part of this debate. The test case standard does not say, "You should include either globally or in identified circumstances fares and travelling". And then one looks at the balance of principle 4:

PN300

Where disagreement exists as to whether a claim involves a test case standard ...(reads)... then be a matter for the President to decide.

PN301

So that unless you can find the direction within the test case standard to include it, what you've got here is before you, that is, the Commissioner had before him, this should be a special case. He identifies again in his decision the test case standard but then doesn't, with respect, apply it. Nowhere do we say - nowhere does he then say, "Well, as a consequence of that standard, I can do X or Y". Going back then to paragraph 87, he then refers to "adjust wages for arbitrated safety net adjustments in accordance with principle 8". Principle 8 he deals with, over the page on page 45, and what he sets out there is the opening words of principle 8, and then says:

PN302

What then follows is the principal range of subjects. These nevertheless should still hold a ...(reads)... parties' view of safety net elements.

PN303

So he says, in accordance with this - he repeats from the principle:

PN304

In accordance with the safety new review, Wages May 2001 decision, awards may ...(reads)... subject to the following.

PN305

But the following impact then on what he does. The first of them is the operative date will be no earlier than the date of the variation to the award. Well, that affects his retrospectively argument, but he never returns to that, that at least 12 months have elapsed since the rates in the award were increased in accordance with the safety net review.

PN306

THE SENIOR DEPUTY PRESIDENT: Yes, but these are - this is about the arbitrated safety net adjustment. I understand the argument that it's hard - the submission that it is probably not necessary or perhaps not even relevant to the task he was undertaking, but in any event had he set out the whole of the wage fixation principle, the retrospectivity relates to safety net adjustments, not to variation of an award under section 113 and/or 11.

PN307

MR HODGKINSON: Quite so, your Honour.

PN308

THE SENIOR DEPUTY PRESIDENT: Yes, but I - - -

PN309

MR HODGKINSON: Quite so.

PN310

THE SENIOR DEPUTY PRESIDENT: I understand.

PN311

MR HODGKINSON: So he misdirects himself in terms of what he looks at again put two ways. We say, firstly, he means he acts outside the principles themselves; secondly, and used independently of that first proposition, it serves to misdirect his discretion under section 113. Strangely, he doesn't refer to principle 5, Adjustment of Allowances, Service Increments. You would have thought that if he was going to look at these principles, that that might have been something that he did look at, but he doesn't seem to have had regard to it.

PN312

Then, your Honour, we'll see in paragraph 89, largely - and, your Honour, can I for short form adopt the formulation your Honour just put to me. Essentially, these are irrelevant matters to the task in front of you and in that he had regard to them, they firstly served to misdirect his discretion and secondly, serve to identify that he acts outside the principles themselves. Now, your Honour, paragraph 90 is problematic in this sense. He says this:

PN313

The union when advancing a consistency of principles argument ...(reads)... calls for Full Bench intervention.

PN314

So he says he's considered it:

PN315

I have already indicated at paragraph 83 above that their final argument ...(reads)... of firmness, a more powder dry approach.

PN316

That is, what he is doing is reinforcing this test which doesn't exist being the forceful test that he identified in paragraph 83. So he reconfirms to us that he is misdirecting himself in terms of what it is that is before him. Then, if you go on, he deals with allowable matters - I don't need to take you specifically to that - and to award simplification, and then to previous decisions reliance. Your Honour, it goes over - paragraph 101 on page 47, he says this:

PN317

As employers have place it, however, the award provisions are seen ...(reads)... to the susceptible legislative prescription.

PN318

As best I can read it, he has reversed the employers' submission. What they did say to him, arising from the Tax Office rulings, is that if there was - if there was an award provision, then the Tax Office rulings make it clear that their provision doesn't operate. But he seems to have reversed that approach. He goes on then in the same paragraph to say:

PN319

Endeavours to establish Superannuation Guarantee Act consistency ...(reads)... this view is accepted in principle.

PN320

Now, your Honour, with respect, it's difficult to know what he is saying there, but if he is saying, well, we ought to defer to the legislative approach, he is, with respect, wrong and inconsistent with the information that was before him. Now, it goes on then to say:

PN321

Apart from the above, I find on review that I cannot effectively prescribe to other areas of the employers' position.

PN322

And then says:

PN323

For example, apart from possible legal advice, and there is some evidence ...(reads)... for the details I was seeking.

PN324

Now, your Honour, what he seems to be saying is what is in the legislative prescription, because we know he needed to have expert evidence in accordance with the superannuation test case, and so he seems to be saying, well, looking at what is in this legislation, that, we say - if that's right, then he has misdirected himself, because he hasn't accepted that that is a default provision. Secondly, by saying "apart from possible legal advice," with respect to him, he fell into a trap. It's not a trap that, in the confines of the Commission, creates some form of estoppel or the like, but by not raising this proposition with the parties, he didn't allow it to be addressed, and the answers are very simple. I mean, what about a tax accountant, for instance? What about asking somebody from the Tax Office? What about having just a look at the clause in the award?

PN325

There are many answers to the propositions that he advances, but he didn't advance it to the parties, so was never addressed on it. And as I say, that's not in this jurisdiction fundamental in the sense that it has overall very significant impact, but it does mean that either one, he has misdirected himself, as I've already put; or two, he has just posed a question which has served to mislead himself. Again, it undermines the wrongful exercise of the discretion under section 113.

PN326

THE SENIOR DEPUTY PRESIDENT: We might take a short break down, Mr Hodgkinson. How much longer will you be? For example, what other grounds of appeal will you be seeking to persuade me that there is an arguable case?

PN327

MR HODGKINSON: I have to deal with this question in relation to the retrospectivity.

PN328

THE SENIOR DEPUTY PRESIDENT: Yes, and then you'll be going to balance of convenience, will you?

PN329

MR HODGKINSON: Yes.

PN330

THE SENIOR DEPUTY PRESIDENT: All right.

PN331

MR HODGKINSON: And they will largely tie up, your Honour, so that they could be put more or less simultaneously.

PN332

THE SENIOR DEPUTY PRESIDENT: Yes, all right. So how much longer; what is your best guess?

PN333

MR HODGKINSON: Half an hour - maybe a fraction longer, but that sort of time.

PN334

THE SENIOR DEPUTY PRESIDENT: Yes. And Mr Maxwell?

PN335

MR MAXWELL: Your Honour, I think I'll be less than half an hour in reply.

PN336

THE SENIOR DEPUTY PRESIDENT: All right. Well, we'll take a break now, probably 10 minutes. We'll resume at 10 past 12.

SHORT ADJOURNMENT [12.03pm]

RESUMED [12.15pm]

PN337

THE SENIOR DEPUTY PRESIDENT: Mr Hodgkinson.

PN338

MR HODGKINSON: Thank you, your Honour. Your Honour, I was down in page 48 of the Appeal Book, and paragraph 101 of the decision. If I could just go to the second dot point there. What is said there by the Commission is this, or relevantly this:

PN339

I view this cannot be taken wholly as a criteria for alleged SGAA compliance ...(reads)... sufficiently different to what the union portrays.

PN340

Now, if what the Commissioner is saying there is that in fact, on the sites, what is being done is ignoring the award clause and applying the legislation, then there are a number of problems with it. Firstly, there is no evidence as to that. Secondly, there is no basis in any of the material upon which he could form that view. And thirdly, it was not a matter that was urged upon him, as I read the material. It goes, though, to the question I earlier identified: that is, deferring to the legislation and effectively, in so doing, confining in an inappropriate way the discretion that he otherwise had under Section 113.

PN341

The next dot point deals with B13, and it might be an appropriate time to look quickly at that exhibit which, of course, your Honour has provided us with a fully copy of this morning. Importantly, one goes to page numbered 1 - - -

PN342

THE SENIOR DEPUTY PRESIDENT: Yes, I see.

PN343

MR HODGKINSON: It is the first page because the next page is numbered 2 - - -

PN344

THE SENIOR DEPUTY PRESIDENT: B13.

PN345

MR HODGKINSON: - - - but it's not itself numbered.

PN346

THE SENIOR DEPUTY PRESIDENT: Yes.

PN347

MR HODGKINSON: And that's headed Expense Allowance and OTE under the SGAA. So it's dealing with the Superannuation Guarantee Act, but then down towards the bottom, where you see the heading Award Earnings Basis?

PN348

THE SENIOR DEPUTY PRESIDENT: Yes.

PN349

MR HODGKINSON: It says this:

PN350

Employers should determine their liability to pay the Superannuation Guarantee charge ...(reads)... earnings base relates to the actual earnings of the employee in question.

PN351

Then over the page:

PN352

For the purpose of this advice we understand that it is not in dispute that the relevant awards contain valid earnings basis for the purpose of the SGAA.

PN353

Now, all they're saying here is that which is clear from the material, and that is that the existing award term was in compliance with the legislation. It wasn't out of step in the sense that it didn't properly reflect the criteria that allowed that first paragraph to operate. So that what is made clear through the ATO, which ultimately your Honour will note, the Commissioner relied as the expert opinion; we don't concede that necessarily that was the appropriate characterisation, but without arguing that at the moment, let us accept for the present submission that it was. What the expert was telling him is that if you've got an award provision, that's the end of the matter. And he just doesn't, with respect to him, weigh that up at all.

PN354

And then, your Honour, I don't need to read it but I identify for you the next paragraph on page 2 of B13. And can I just, in reference to a point that I've already made, show your Honour where it comes from. If your Honour will go to page 8 of that exhibit, and I'm now using the page numbers as a reference, your Honour, because it's the separate production. Your Honour will see that this superannuation guarantee ruling 94/4 and 94/5 are dealt with. And what's there said is:

PN355

Paragraphs 20 and 21 in the superannuation guarantee ruling 94/4 ...(reads)... These do form part of the salary or wages and OTE.

PN356

And then very importantly this is said:

PN357

Superannuation guarantee rulings 94/4 and 94/5 will be revised in line with this approach.

PN358

And then going on to the example provided in the next paragraph:

PN359

For example, a travel allowance for fares would be an expense allowance, but a travel allowance for travelling time would not be an expense allowance.

PN360

Now, your Honour knows, and if it's of assistance I can hand up a print of a decision of the Commission, but this allowance, within this award structure, is treated as an expense allowance. Historically there are components to it, but certainly some if not all of the components fall within the definition provided there of expense allowance. So what the Commissioner was told by the ATO is: you'd look at that, those two criteria, which are broad criteria, you'd apply it and in any event we tell you that the superannuation guarantee rulings will be revised.

PN361

So what he's now determining, what he's now basing his determination on, is something that, with respect to him, without influence from the Commission, the parties or the industry, can be re-determined. And, better than that, the ATO says they are considering this re-determination. So that the standard on which he ultimately bases the decision that he makes, is itself transitory; may not exist in the life of the award, and may not therefore serve to support the determination that he ultimately came to.

PN362

If I return then to the decision, your Honour will see that at paragraph 102 he does deal with SGA 94/4 as playing a significant role in the arguments. He goes on, particularly - and one sees over the page, I don't read it but page 49 he analyses parts of that ruling. And then he says at paragraph 103, still dealing with the same ruling as I read the decision, and on page 50 of the Appeal Book he says:

PN363

The ordinary hours -

PN364

he quotes -

PN365

The ordinary hours of work may be specified in a statute or under an industrial award. If so ordinary hours specified are also the ordinary hours of work under the SGAA.

PN366

Now, what's clear is that you don't get fares and travelling allowance under this award for your ordinary hours of work. You get it for turning up to work; that is for doing something before the ordinary hours commence. There's then a quotation in paragraph 105 of the decision which appears to - well, which is firstly consistent with what we've put, and that is if appropriate ensure that award contains a specification of the employee's earnings, ordinary time earnings, which for the purpose of the SGA Act will operate to provide a notional earnings basis. He quotes from 55IR. Well, that's what he had. That was in the award. He doesn't tell us, then, with respect him, what the purpose of that quotation is or how it may impact upon the capacity to make the determination or exercise the discretion that he was dealing with.

PN367

He does identify in paragraph 106 a quotation from a decision of Munro J, the relevant bit of which appears on page 51 of the Appeal Book. The rulings, there referring to taxation office rulings, are not law and are not legally binding on the parties per se. They are binding in certain circumstances on the Commission. Now, all that is a reflection of the fact that the ATO has a capacity which it had already told us about to vary these rulings. And then he returns to the ruling 94/4 in the same paragraph, and going over the page he deals with the additional background material that the ATO supplied and is part of exhibit B3 commencing at page 187 of the Appeal Book.

PN368

It's important - he quotes certain paragraphs of it, but if I could just ask you to go to 187, this document is produced in answer to a request by the union made in 1997 in relation to a number of allowances. Your Honour will remember them in their historical sense. There were a number of different allowances being considered. And in the explanatory notes which do not form part of the advice, as is clear from the heading, page 187 says this:

PN369

Under the current award the ATO does not require that an employer pay superannuation on any allowance other than those allowances specifically included in the earnings base.

PN370

Well, that's not dealt with either. You see, he purports to be saying, "Well, this legislation and the expert, the ATO, would in some way require -" because in other circumstances it might itself consider an allowance of this kind to be caught. But he doesn't weigh up - technology is a terrible thing, your Honour. He doesn't weigh up what he's being told by the ATO. They themselves recognise the pre-eminence of the award provision, the accept its validity - that is, they've looked at it and they've accepted the validity of it. It is of the kind that is appropriate under their legislation. Does your Honour need some further technological assistance?

PN371

THE SENIOR DEPUTY PRESIDENT: No, I'm right now.

PN372

MR HODGKINSON: And yet he doesn't - you see, he purports to go to those notes, but he doesn't weigh that proposition up at all. He looks at some other part of it. But here the ATO in it's explanation has actually said, "Look, you've got a clause, that clause is okay. We'd accept that under that you wouldn't pay superannuation on anything that's not specifically mentioned." Well, with respect, that's an end of the consideration that the legislation in some way required some amendment to the award provision. Yet that seems to have motivated him.

PN373

Now, the Commissioner deals with exhibit B13 commencing at paragraph 112. Importantly, at paragraph 118 in the third dot point he identifies what's contained with these words:

PN374

If there was no award earnings base -

PN375

but he's now by this time been told by the ATO on two occasions that there is satisfactory base, and that it overrides any other prescription. There's then a quotation commencing on the last dot point of page 54 from the Commission's decision, and with respect to him he seems to misuse this. What he does is he quotes from print 5100 which is also - it's the superannuation test case to be found 55IR. But I don't need to go to it specifically. The quotation is set out. You see it just above paragraph 119 on page 55 of the Appeal Book. He quotes:

PN376

Before any different provisions are awarded either by consent or arbitration ...(reads)... imposed by the SGA Act.

PN377

Now, it's difficult to see how he's used that, but there are three ways with respect to him that he may have. Firstly, it's merely to say, "Well, it's not inconsistent," and I'm not sure that one can be as generous to the Commissioner as that from the decision itself, but that is at least a broad possibility. The second is that what he's actually done is say, "Well -" that he's misconstrued this proposition of expert evidence and said, "Well, the ATO says that they would, if they were at large," which they are legislatively not, "they would try and include this allowance, so I should go the same way. That is, I should defer to the SGA Act." And if he has done that he is with respect wrong and as a consequence he has miscarried in terms of his approach.

PN378

It's not easy to understand what the relevance of the quotations from Section 111 of the Workplace Relations Act are in paragraph 121, given that he was dealing with an exercise of discretion conferred by 113. It just doesn't seem to fit in comfortably with the approach required, but again it's hard to see where it influences the Commissioner, him having quoted it, it doesn't appear to me that any significant weight was put on it by the parties. But he quotes - he says at 123 on page 56:

PN379

I have of absolute need delved into this public interest area and by way of summary I reiterate ...(reads)... the most appropriate environment available to them to form an agreement.

PN380

I've already made this point at the beginning of his decision. That's an irrelevant consideration. And even though it impacts upon his ultimate determination, it misguides - he then says:

PN381

Being unable to do so they have finally sought arbitration as a path for resolving their differences.

PN382

Well, with respect to him, since 1998 interrupted by other circumstances certainly, but since 1998 the parties had reached a consent position, identified that which they couldn't reach a consent position and moved, in light of those other developments, to resolve it. So that in that it impacts upon his ultimate determination, it really is him misleading himself as to what he ought consider for the purpose of the exercise of his discretion. At page 57 under, Conclusions to the Claim, paragraph 126, he says:

PN383

After reviewing all the material and information made available by the parties ...(reads)... inconsistency existing side by side to SGA requirements.

PN384

Now, with respect, that's not the employer's position at all. The employer's position is we've got an ordinary times earning clause, the ATO have told you that the Superannuation Guarantee Act only applies in default of a clause. They have also told you that the clause we have is appropriate - there is no need - but that doesn't seem to be what he has looked at. And then he says for the union:

PN385

The issue to be determined by the Commission is what award conditions should be included in the earning space to fulfil Act obligations.

PN386

It may be, and I'll leave this to my learned friend as to whether or not he characterises the union's claim in that way, but with respect, if that is the characterisation it is a manifestation of the way he has misguided himself in terms of the exercise of his discretion because he has looked at the Act obligations. There are no Act obligations. None relevant because of the existence of the ordinary time earning clause. They are only relevant if there isn't such a clause. Then he goes on in 6 at 127 to say this:

PN387

Following on from my review of matters submitted, including and in particular ...(reads)... expressed views indicated in paragraph 126 above.

PN388

Well, with respect to him, what it rested on is the exercise of his discretion properly determined within the confines of the various prescriptions effecting the type of application that he had before him, but he seems to have gone off on some other approach which is not the appropriate approach under section 113. In section 128 it actually picks up some of those matters that are going to expert advice to which I've already drawn attention, and suffers from the same problem as a consequence. Going on to 130 at page 58 of the Appeal Book:

PN389

In deference to various employer statements, as I see it, the union's claim ...(reads)... whether it is warranted, properly based or excessive.

PN390

Now, with respect to the Commissioner, what one discerns from there is the proposition that your Honour advanced very early this morning; there is a cost associated with the granting of the union's claim. And the cost, it is agreed, is in excess of $5 a week for all those affected by the allowance. What we would say about it is when you look at the scope of this award and drawing upon the general industrial knowledge that you are entitled to draw upon in relation to that scope and it's operation, it covers a very significant number of people. If you just take a very simple mathematical equation and multiply it out by $5 plus per week for "X" number of people, being a significant number of people, it's a large cost to employers as a combined group which will be - or which is imposed as a consequence of granting the union application.

PN391

For present purposes we are happy to rest on that sort of approach, subject only to that question that was raised earlier. And that is, really, if your Honour feels that look, you really do need some further information in order - because that's an issue that is going to tip the balance, then we'll renew applications. And it goes on then in paragraph 131 to further deal with it. I don't, with respect, see that what he says there is any - in any way compromises what I've put. He says it's a cost rise. He accepts the union figures cost rise of .18 per cent. Well, a cost rise of .18 per cent of $100 is not a very significant amount of money over a wages bill of $100 million it is.

PN392

I've already taken your Honour to paragraph 133. I don't go back to it, I've made the points I want to make about it. So that's the general propositions we want to advance about the decision. Your Honour, in terms of retrospectivity can we make these propositions. Firstly, on the basis that we will advance the approach to retrospectivity is enough to grant not only the stay but to found for present purposes the relevant attach on the decision such as to make it one that there is an arguable case in respect to it. That is, even in isolation of our substantive points, the retrospectivity aspect itself is sufficient, we say, ultimately for the Full Bench to grant leave and to uphold the appeal.

PN393

Now, your Honour, can I just ask your Honour to quickly go through the various paragraphs, being 135 to 145, only to satisfy yourself that I'm right in making this submission; that he doesn't there refer to the penalty provisions in any reasonable detail that apply.

PN394

THE SENIOR DEPUTY PRESIDENT: What? What are you speaking of in that respect; what penalty provisions?

PN395

MR HODGKINSON: The penalty provisions that apply under the Superannuation Guarantee Act.

PN396

THE SENIOR DEPUTY PRESIDENT: I see. Yes.

PN397

MR HODGKINSON: He also does not, with respect to him, refer to any relevant reference in the superannuation test case in relation to this aspect of retrospectivity, and he doesn't refer to the principles which we already looked at under principle 8, again in relation to this issue. Now, we have made the general proposition about principle 8, but it may have had an impact on this discretionary question of retrospectivity. What he looks at is section 146(2), and identifies that there have got to be exceptional circumstances. Ultimately, he determines that the exceptional circumstances, without weighing the other matters in balance, are what he determines is some delay on the part of the employers. And he starts that in paragraph 136. He says this at page 137:

PN398

I believe that the employers at varying stages ...(reads)... not to at least consider retrospectivity in some form.

PN399

Well, really, what he is saying is there is delay. Now, if one looks at it, from 1998, when he makes his decision, what happens is there is a Full Bench proceedings at which time the parties, including the union, agree that this matter ought to go off the Commission's active list, if I can put it that way, whilst a relevant determination is made by the Full Bench. One might see that as: (1) a matter of co-operation between the parties; and (2) very sensible in terms of the utilisation of the Commission's time, but hardly a delay in exercising rights.

PN400

He doesn't tell us why, in exercising the right, if it takes some time to do it you should pay a penalty for it. But that is essentially what he does by making this retrospective; insert a penalty. And then - - -

PN401

THE SENIOR DEPUTY PRESIDENT: Yes, well, in July the penalty was two months, three months.

PN402

MR HODGKINSON: When he handed down his - - -

PN403

THE SENIOR DEPUTY PRESIDENT: That was the penalty when he handed down his decision. In July 2000, the penalty was three months.

PN404

MR HODGKINSON: Well, the direct penalty, that is so. But he doesn't explain to us why there is a need - if we go then quickly through the balance of his decision, he says, 138, he refers to the ATO - ATO and its own hierarchal structure. Some of the initial experienced delays by employers no doubt could also be attributed from the ATOs prioritising. Why would that, in any way, justify the exercise of discretion, when that has to be done in light of exceptional circumstances?

PN405

You see, he is not now exercising a general discretion; he has got to find an exceptional circumstance in order to impose this retrospectivity. He then goes on and says:

PN406

The union I believe however can in fact as it did be somewhat critical of the employers for their persistence of an appearance to only want an ATO response which they alone could accept.

PN407

Well, but really, that doesn't appear to be the case, but that is what he says. He says then, at the bottom of that paragraph:

PN408

Given the circumstances of employer union actions I view the employers to have virtually nullified these misleading accusations.

PN409

With respect to him, that is drawn out of not very much. Paragraph 140:

PN410

I am firmly of the opinion the approach the employers generally was one of fettering wherever possible progress the unions claim.

PN411

Now, can I just pause there, your Honour. Fettering the union's claim - the majority of employers reached consent on the majority of matters that the union raised so much so that a decision on it could be issued by the Commission, by consent, in 1998. An issue remained outstanding. So the employers didn't seek to hold up the whole thing on some package argument or the like. An intervening process involving a Full Bench of the Commission creates a delay whilst a relevant matter is sorted out co-operative between the parties. The matter gets called back on in December of 2000, moves through so much so that the submissions are received by the Commission in March 2001.

PN412

THE SENIOR DEPUTY PRESIDENT: The Commissioner has been in and around this industry a lot longer than I have. It would take a very persuasive submission for me to be inclined to think that if the discretion has properly been exercised, to interfere with it. He wasn't too impressed with the way the employers moved this matter along, and you say there is no reason for him to have said that. You say that the delays, such that they were, were in part because the matter went off to a Full Bench, and it was with the consent of the union. can understand that, but the retrospectivity was three months; it wasn't two and a half years, three years, that was sought by the union, it was three months.

PN413

MR HODGKINSON: As at the date of the decision, that is quite right.

PN414

THE SENIOR DEPUTY PRESIDENT: As at the date of the decision, yes.

PN415

MR HODGKINSON: But, your Honour, with respect, you have got to come back to what he was doing. He had to find an exceptional circumstance.

PN416

THE SENIOR DEPUTY PRESIDENT: Yes.

PN417

MR HODGKINSON: Well, nowhere does he identify exceptional circumstance. Your Honour characterised it as he wasn't impressed. Well, with respect to the Commission, that is not an exceptional circumstance. But that probably is a proper feeling that one can get from his approach to retrospectivity, but it is not an exceptional circumstance. You see, it is very specific discretion, and it is a very tough discretion. And it is supposed to be so. It is supposed to be so because the standard approach of the Commission is no retrospectivity. And there are very sound reasons, even more so in this case than most.

PN418

And then we come to those. Firstly, what we are talking about is superannuation contribution. This is not, and there have been many arguments in terms of stays and the like, about wage increases and if you are right in terms of the appeal, will you ever be able to recover. This is not that case because this is not paid to an employee, or from somebody from whom you can recover; it is paid to a trustee under a trust fund. The trustee under the trust fund can't, either as a matter of the terms of the fund, or as a matter of the legislation, release the money once it has received it.

PN419

Now, the Commissioner just doesn't consider that issue. See, what he doesn't ever do is balance what the impact of the retrospectivity is against this feeling that the employers haven't acted as quickly as he would like them to. But that is the first significant impact which can come - which one can discern merely from the fact that we are dealing with superannuation. Once you pay it into that trust fund you can't get it back. The Commission can't order it back; it has got no capacity to direct the trustees of the fund.

PN420

Secondly, the date of this decision - sorry - this decision contemplates that as the Commissioner did, at paragraph 134, the draft orders would have to be made. Draft orders are of course the order varying the award. They are made in October - in October, my friend says from the Bar Table, "Why?" Well, in part the reason why is - - -

PN421

THE SENIOR DEPUTY PRESIDENT: Could I just ask you to pause there. Why was it so hard to draft the order to include a new component to the definition of ordinary time earnings?

PN422

MR HODGKINSON: Well, with respect, your Honour has to ask my friend that, because ultimately it wasn't his order that - his draft that was accepted.

PN423

THE SENIOR DEPUTY PRESIDENT: What was it that the Commissioner did in - he directed in his decision in July 2001 - - -

PN424

MR HODGKINSON: Yes.

PN425

THE SENIOR DEPUTY PRESIDENT: - - - for who to draw up the orders?

PN426

MR HODGKINSON: To my learned friend, I think.

PN427

THE SENIOR DEPUTY PRESIDENT: Right.

PN428

MR HODGKINSON: Let me just - it's 134.

PN429

THE SENIOR DEPUTY PRESIDENT: 134. I was looking right at the end. Yes:

PN430

The union should prepare draft orders.

PN431

MR HODGKINSON: Yes. At page 58.

PN432

THE SENIOR DEPUTY PRESIDENT: Yes. All right. Well, I'll maybe as Mr Maxwell, but putting to one side the orders that issued in relation to the awards other than the National Building and Construction Award, the difference is in the definitions there, and it's a matter that you can just - I'll take - I'll ask you about in a moment. Just staying with the National Building and Construction Industry Award, I just don't understand the hold-up. What are your instructions? Isn't it just a case of inserting a small change to the definition of ordinary time earnings?

PN433

MR HODGKINSON: Yes. But, having been invited to take instructions, I will.

PN434

THE SENIOR DEPUTY PRESIDENT: Whilst you're there would you also - if you need to take instructions on this, you may know the answer, but the orders that issued and were attached to the decision of the Commissioner on 9 October, I must say thus far I've only really been looking at the first order, the one made to the National Building Construction Industry Award, but I noticed that the others are in different terms. Can I assume though the only reason for the different terms is the cross-referencing that needs to be made in each of the relevant awards to pick up the equivalent of the fares and travel patents allowance and references? And if it's something else, well let me know because otherwise I'll only, for the purposes of dealing with the arguments, concern myself with what issued in relation to the first award.

PN435

MR HODGKINSON: Your Honour, the chronology in terms of the process, was - is set out in the decision, but can I say, in answer to the second question your Honour asked, that's my understanding: that there's nothing of significance for the purpose of the debate in the different formulations. They are only because of differing award provisions, particularly in terms of numbering and the like that needed to be dealt with.

PN436

But, your Honour, if we could just, in answer to your first question, go to the Commissioner's decision on the issue of the orders. And can I just - I don't ask your Honour to go back to it, but would your Honour just note that the Commissioner in paragraph 134 of the July decision provided a time-frame of one month; that is he just:

PN437

It will be carried out within one month from the date of this decision.

PN438

Then he gives us a preamble, I don't need to take you to, and then you'll see a hearing - on page 5 of the Appeal Book: hearing 10 September 2001. Putting aside the HIA for the moment because it's not a relevant consideration, in my respectful submission, to what we're talking about, your Honour sees in paragraph 5:

PN439

Adding to this hearing was a comparison of other draft orders submitted by the remaining parties.

PN440

That is the parties had complied - the union had provided a draft. That draft didn't appear to be appropriate to other parties. They provided a draft. The Commission had brought the matter on, on 10 September, which - in order to deal with what remained as the competition.

PN441

The HIH approach is referred to, but really doesn't - then there's another hearing seven days later. That's referred to on page 6 of the Appeal Book. The HIH position is dealt with there, but relevantly for my client, or my clients, what's being dealt with there is a debate raised by the HIA; my friend's response to the debate. And then if we go over in the decision, a further hearing on 26 September, page 8. Your Honour there representations. MBA are not there but it had advised the Commission on a range for alternative representation:

PN442

Due to the nature of the course which the order hearings of 10 and 17 September ...(reads)... relative provisions of their own submitted draft orders.

PN443

So he's identified two aspects:

PN444

As a result of the parties presenting their respective submissions I add by summary the following from the hearing...

PN445

And I go then to paragraph 15:

PN446

The union put that the employers seem to be implying that the ordinary hours shiftworked are Monday to Friday while weekend shifts are overtime. There is nothing however -

PN447

and so on:

PN448

And it was put by the union the award does not say except as provided elsewhere ...(reads)... I will do that as quickly as possible and I will advise the parties accordingly.

PN449

Then under the heading Parties' Contentions he says:

PN450

I have compiled a summary of submissions made by the parties during the hearings -

PN451

and your Honour will recall that this is as a consequence of the last hearing on 26 September -

PN452

union employers excluding HIA are free so I intend to reference all four contemplated orders as one. The employers' position of draft orders can best be summarised by the 24 August 2001 MBA letter -

PN453

important, with respect, your Honour notes that that's considerably before this consideration -

PN454

to the CFMEU and forwarded to all representative employer bodies including HIA. This read on a without prejudice basis.

PN455

And it identifies:

PN456

The view of those organisations to the amended draft orders attached thereto are wider than in their scope ...(reads)... it made out in another MBA letter of September, however at the September hearing the employers mentioned -

PN457

and he sets that out -

PN458

One reason advanced for this was the employers' understanding the Commission's decision ...(reads)... and within certain limitations of being for compensation for travel patents.

PN459

The union in response says their draft orders are accurate and should be the orders. However, the union does not oppose the inclusion of the note contained in their latest version of the draft orders, and then the HIA and union is dealt with and I don't go back - - -

PN460

THE SENIOR DEPUTY PRESIDENT: Could you just pause there for a moment, Mr - I don't think we're going to finish this.

PN461

MR HODGKINSON: I'm sorry, I didn't realise the time.

PN462

THE SENIOR DEPUTY PRESIDENT: No, no, no need for apology but given that obviously Mr Maxwell hasn't even started yet, and even though a lot of the ground work has been set as is often the case by the appellant, there's still, in my assessment, a fair way to run on this stay, so I think we will have a luncheon break, and now is as convenient as any other time. Can we resume at 2 pm?

PN463

MR HODGKINSON: I'm happy to do so, thank you.

PN464

THE SENIOR DEPUTY PRESIDENT: Yes, we'll adjourn until then.

LUNCHEON ADJOURNMENT [1.07pm]

RESUMED [2.07pm]

PN465

THE SENIOR DEPUTY PRESIDENT: Mr Hodgkinson?

PN466

MR HODGKINSON: Your Honour, I was, immediately prior to the break, addressing the proposition that your Honour advanced as to why they've taken until October to issue the orders, and I'd pointed out that the Commissioner's decision of 9 October provides for us the process of several hearings through which the making of the orders went. I have skated over the HIA position because I don't seek to draw anything from that relevant to the answer. It's clear that as at the last hearing on 26 September, the union were advocating in support of its draft order the employers had a different draft order and that they were advocating the appropriateness of that order.

PN467

Now, your Honour prefaced, I think, the proposition of why would it take so long, wasn't it just a matter of simply inserting into the proposed clause. Well, clearly the parties didn't think so and clearly the Commissioner doesn't, in his decision, draw any criticism of the parties for the processes that they'd undertaken up to that point in time. He doesn't say, "Well, look, you know, this is all just window dressing of some kind. You should be able to come to this in 10 seconds", and then importantly though, your Honour, at paragraph 62 on page 15 of the decision, he says this:

PN468

Anxious to avoid that situation however while it remains in force ...(reads)... via an award prescription.

PN469

So that if there is any question as to delay, it can't be put on the employers, my clients because ultimately what they had put up within the one month given originally, was accepted by the Commissioner. Now, the fact that the union sought to advocate a different view equally I don't see rains upon them any particular criticism. They took a view based on their understanding or interpretation of the decision; the Commissioner ultimately found that they were wrong, but the fact that it took some few months, two or three months to do it was merely a reflection of the process through which the arguments went.

PN470

It wasn't a matter that, in my respectful submission, any - or from which any adverse conclusion could be reached and indeed, the Commissioner doesn't suggest so. He doesn't suggest any adverse conclusion as to - as a consequence of the approach to the drafting of orders made between my client and the union, or my clients and the union. Now, your Honour, can I then go back to the primary topic that I'm dealing with and that this question of retrospectivity.

PN471

I've taken your Honour through the majority of the paragraphs in which the Commissioner deals with this and your Honour will recall in part to show your Honour that he doesn't deal with the counter-balancing considerations. He doesn't deal with the matters that need to be considered, in my respectful submission, in relation to why he ought to exercise this particular and confined discretion but what he does do is pose for himself the wrong test in the ultimate exercise, and that can be found at page 60 of the appeal book in paragraph 143. He says this:

PN472

Though contrary to what has been mentioned above, it is my view that where sufficient ...(reads)... I find unsustainable given the circumstances.

PN473

I just pause there. Your Honour, going back to the identification in paragraph 135 of the Commissioner's decision, he does not identify the test in 135 as being peculiar circumstances or procrastination or blocking aspects. What he does is properly identify the test as being exceptional circumstances, but he doesn't make a finding that there are any such exceptional circumstances and it would be inappropriate at this stage in a process of appeal for the Commission to rewrite, as it were, the words utilised by the Commissioner to say what he really meant was "these things amounted to exceptional circumstances".

PN474

That may ultimately be a consideration that the Full Bench entertains in the deliberation in relation to an appeal, but it wouldn't be appropriate because it must be arguable the Commissioner having himself used the words "sufficient peculiar circumstances", that he in fact applied the wrong test and that as a consequence of that, it is, in my respectful submission, supportive of both the arms that we're addressing, that is, that the - there is an arguable case that he got at least that aspect of this decision wrong, and secondly, that he, in terms of the position that ought to be adopted, in terms of retrospectivity one ought to then see that it's appropriate to order the stay.

PN475

Now, your Honour, he did not consider the impact, notwithstanding that he was aware of the impact of the Superannuation Guarantee Administration Act 1992. Can I just remind your Honour that the decision with which he did deal, that is - or one of the decisions with which he did deal, the superannuation test case which can be found in (1994) 55 IR 447. Itself, in the course of the Full Bench consideration, there identifies that the Superannuation Guarantee Act does provide penalties where there is late payments of a charge.

PN476

Now, I don't need to take you to that, but it's to be found at page 452 of the Report and at about point 5. Can I then take you to the Superannuation Guarantee Administration Act itself and, your Honour, we only need to go to two references fortunately in this Act. The first is at page 55, section 33. An employer who has superannuation guarantee shortfall for the year must lodge a superannuation guarantee statement for the year on or before 14 August in the following year. Now, the following year is, of course, the financial year, so that is 14 days after - sorry - 14 August following 30 June. Or relevant to this case, it is 14 days after the issue of the decision granting the union's application on 30 July. Now, your Honour will remember that the Commissioner, in paragraph 134 of that decision, provided one month from the date of the decision for the formulation of orders.

PN477

With respect, he could not have possibly contemplated this provision and, your Honour, what he certainly - when we looked at his retrospectivity considerations, he certainly didn't go back to this. So that compliance with that direction made at paragraph 134 of the decision would have put employers, as a consequence even if the order had been made at the end of the month, behind the statutory requirements of this Act. And then, your Honour, if we go to - - -

PN478

THE SENIOR DEPUTY PRESIDENT: And this was put to the Commissioner?

PN479

MR HODGKINSON: It was put to the Commissioner that they would be exposed to penalties. That can be found in the written submissions at page 221. It is also, as I have pointed out, without reading it, the proposition that it is contained within the superannuation test case.

PN480

THE SENIOR DEPUTY PRESIDENT: Well, I see your reference about the '97, '98, '99, 2000 financial years.

PN481

MR HODGKINSON: Yes.

PN482

THE SENIOR DEPUTY PRESIDENT: This relates to something that would fall within the 2001/2002 financial year?

PN483

MR HODGKINSON: No, the 2000 financial year. Because of the retrospectivity order, it was put back - the year finishing on 30 June - it is put back - - -

PN484

THE SENIOR DEPUTY PRESIDENT: Sorry - I asked that in light of the July/August calendar days.

PN485

MR HODGKINSON: Yes.

PN486

THE SENIOR DEPUTY PRESIDENT: The April 1991?

PN487

MR HODGKINSON: It goes back to April 2000, which - - -

PN488

THE SENIOR DEPUTY PRESIDENT: I am sorry - yes.

PN489

MR HODGKINSON: Which puts compliance with the then decision later ordered into the preceding year, preceding financial year.

PN490

THE SENIOR DEPUTY PRESIDENT: All right. We better both get this clear. It goes back to April 2001, which puts it into the - - -

PN491

MR HODGKINSON: Your Honour is quite right.

PN492

THE SENIOR DEPUTY PRESIDENT: - - - preceding year, yes.

PN493

MR HODGKINSON: Yes.

PN494

THE SENIOR DEPUTY PRESIDENT: Yes, I understand.

PN495

MR HODGKINSON: Yes. And the requirement of the Act is by 14 April 2001, if you have got such a shortfall, you have got to report it in the appropriate form, and then, your Honour, if you go to page 64 of that Act, collection and recovery of charge, superannuation guarantee charge for the year is - - -

PN496

THE SENIOR DEPUTY PRESIDENT: Sorry - what was the section again?

PN497

MR HODGKINSON: It was section 46, on page 64.

PN498

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN499

MR HODGKINSON: Superannuation guarantee charge for a year is payable if on or before 14 August in the following year the employer lodges a superannuation guarantee statement or statement under section 34 indicating a superannuation guarantee shortfall for the year. I just pause there. The consequence of the order is that there is, as a matter of law, or a matter enforceable in law, a superannuation shortfall, because the order makes payable from April an additional amount. So that has to be the case.

PN500

Now, if your Honour then goes to section 49 on the same page, if any of the superannuation guarantee charge which an employer is liable to pay remains unpaid after the time by which it is due to be paid, the employer is liable to pay the greater - the general interest charge on the unpaid amount. So we have now got an interest charge as a consequence of it being post-14 August. Then there is some administrative reductions allowed by subsection (2); liable to pay general interest charge, etcetera, in (3).

PN501

And, your Honour, then finally, if I could take your Honour to page 76, section 59 of the same Act, failure to provide statement or information it is entitled:

PN502

If an employer other than a government body refuses or fails to ...(reads)... relation to the year fails to keep record -

PN503

etcetera -

PN504

refuses or fails -

PN505

sorry -

PN506

produce -

PN507

and then - so your Honour, there is then a penalty in terms of the doubling. Now, your Honour, with respect, sitting as the Commission hearing this application, your Honour, you cannot operate or determine any question on the basis that there might be a discretionary waiver by the Tax Office of its right to recover the penalty given the circumstances because to do so would be to, as it were, make a determination based upon what you assumed the Tax Office would do. You must, with respect, operate pursuant to the terms of the legislation, which in terms, says:

PN508

The employer is liable to pay by way of penalty.

PN509

THE SENIOR DEPUTY PRESIDENT: Well, I must say, Mr Hodgkinson, if there is a discretion, it is probably one of the best occasions where I might be bold enough to go where you tell me I should not.

PN510

MR HODGKINSON: But with respect, your Honour, it wouldn't be a proper utilisation of the role that your Honour has in the assessment at this stage of the case. We are talking about the question of stay. Your Honour couldn't, with respect, second-guess the Tax Office. Now, can I give your Honour an example? It may be that the Tax Office was, and we know that the Taxation Office operates in terms of individuals, so it rarely makes a global waiver of penalty; it operates in respect of individuals.

PN511

It may be that they say, well, look, we have been after this person for ages; here is finally our chance to get them; we are going to penalise that person. But importantly, at this point in the consideration, the Commissioner didn't even consider this. The Commissioner weighed nothing in balance in terms of retrospective operation of his award other than his perception that there were peculiar circumstances, evidence of procrastination and blocking. In order to determine that there were exceptional circumstances, and to exercise a discretion on that basis, it would be a requirement, and I put it that highly, your Honour, that these important statutory considerations be weighed in balance.

PN512

Because to even purport to put, as a consequence of the order of the Court; that is, the Commission, a person or persons in breach of other legislative prescriptions is a very, very serious step. Even if that is a possibility. On the terms of the Act, it is not a possibility. But even if you take the approach that well, it is likely - with respect, you couldn't go higher than that - then you are still potentially exposing persons bound by this award as employers to a penalty prescribed by other legislation.

PN513

Now, your Honour, with respect, that is a very serious matter that one has to weigh up when one is talking about retrospectivity, that is departure from the norm - or one is trying to work out that there are exceptional circumstances supporting retrospectivity and you don't even contemplate this question. Your Honour, I'm reminded by Mr Warren who undertook all this below, that at page 429 in the transcript of the proceedings in PN 317 and PN 321 that submissions were made that the superannuation guarantee charge comes in soon, as we don't pay the right amount of superannuation, and referred the Commissioner to the Act. And then he said as he understood the operation of the Act - the charge cuts in the moment you haven't paid the right amount.

PN514

The Commissioner said, but it's not a case if you haven't paid delivery it's a case of being awarded by a member of the Commission, you don't get a double whammy out of that. Well, with respect to the Commissioner, he's got no capacity to direct the tax office in the way it discharges it's legislative function. And as a Commissioner, he cannot make that assumption. He could seek some undertaking from the Tax Office, I suppose, but he didn't do that. So that it was raised in the oral submissions, it was raised in the written submissions. In any event, the problem that the Commissioner had was that he only looked at one side of the equation.

PN515

He didn't take any of these balancing factors into consideration and when one is looking at a very confined discretion which can only be exercised in exceptional circumstances, the very nature of exceptional circumstances means you have to weigh up the circumstances both before and against before you could possibly make a determination that's exceptional. That, with respect, your Honour, is another reason for attack on the decision and a significant reason as to why a stay ought be granted.

PN516

If we have presented submissions which have convinced your Honour on any of the points that we've made, that there is an arguable case, then the concept of leaving exposed employers to; one, be required at law to make payments in respect of which there is no capacity to recover should the appeal be successful; and two, be exposed as a consequence of the existence of the order and the variation of the award to potential penalty are very, very substantive matters that weigh in the balance of convenience to the payment - to the granting of the stay.

PN517

On the other hand, what will be said is well, this is a benefit that has now been awarded by the Commission to employees, that must be the case. It's a benefit of an indirect nature to the employees - direct burden on an employer, indirect benefit to the employee in that it goes into superannuation and the majority of employees will not have an entitlement to draw upon the superannuation prior to the ultimate determination of the questions raised in the appeal. So that in terms of balance of convenience, with respect, it all flows one way and there ought, for those reasons, be the stay granted as sought.

PN518

THE SENIOR DEPUTY PRESIDENT: Mr Hodgkinson, on the - I understand the - well, assuming there is no challenge made by Mr Maxwell about the discretionary powers of the trustees under the trust deed and by reference to that you say that moneys that are paid in cannot be paid out again - or can't be paid out again to the employer. So let's assume that is right, subject to what Mr Maxwell says. The other matter that does concern me is this argument that I should not let the order stand as it is exposed from 30 April the employers to a penalty - that's only going to get worse isn't it between now and when this matter is finally disposed of? Is that a burden that the employers - well, presumably it is a burden that the employees have considered and accept?

PN519

MR HODGKINSON: Undoubtedly so, your Honour, because if we're successful there is no exposure to penalty.

PN520

THE SENIOR DEPUTY PRESIDENT: I understand that. If you are not - - -

PN521

MR HODGKINSON: If we are not successful in respect of all aspects, that is, not successful in relation to substantive issues and the retrospectivity issue, then there will be an exposure to penalty but there won't have been penalties paid in the meantime, which employers might then have to seek to recover. That will be an additional burden that they would have to bear. For instance, if they - as we stand today, without the issue of the stay then absent anything else that this industrial commission does, the employers have to comply with the superannuation guarantee.

PN522

They have to provide the statement, in so doing acknowledge to the tax office that they are late in compliance and they have to identify the amount that they have to pay in addition to that which they had already paid. Having done all of that, if the tax office exercises its right to impose a burden they will do that and they would have to pay the burden - the penalty. Then if they are successful in the appeal, all of that would be recoverable, if it's actually able to be recovered. I'm now, in particular, addressing the penalty. So that by far the preferable course is to grant the stay - and let me turn as it were one of the Commissioner's approaches I identified with that page of the transcript where Mr Warren was addressing; the double whammy approach.

PN523

Well, if the tax office were going to accept that no burden would be applicable - no penalty applicable - as a consequence of the action they took in relation to the fact that the orders were only made and became legally binding on 9 October, they are going to accept a submission that an appeal was lodged within good time and that application was made for a stay within good time and that it was heard. So that if that has any validity at all, and I have submitted that in terms of your Honour's consideration it has no validity, then the position really isn't any worse for the employer than it is and has been since 9 October.

PN524

THE SENIOR DEPUTY PRESIDENT: Mr Hodgkinson, how long will this appeal take?

PN525

MR HODGKINSON: Your Honour, I've actually been agonising to some extent over this question.

PN526

THE SENIOR DEPUTY PRESIDENT: It's not easy is it?

PN527

MR HODGKINSON: It's no longer - it's probably - if I was being safe, it's a day plus appeal. It is no longer than a two day appeal and it may be completable within a day but - - -

PN528

THE SENIOR DEPUTY PRESIDENT: Well, presumably, you would be at least as long again before the Full Bench, so let's say - but no longer than a day.

PN529

MR HODGKINSON: Oh, yes. In part, your Honour, because of the elapse of time we would commit, at least in outline form, our submissions to writing in an effort to facilitate the process of the appeal and that being the case it may be possible to in fact be a little quicker. But it certainly wouldn't take - it's going to take a day, it won't in my view take more than two days.

PN530

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. Mr Maxwell?

PN531

MR MAXWELL: Your Honour, in response to the application for a stay the union wishes to take you to four issues. The first is in regard to the form of the appeal. The second issue is the standing of the appellants. The third issue is the issue of an arguable case and the fourth is a balance of convenience. Dealing first with the form of the appeal. At first instance the union seeks to raise the issue of the form of the appeal and whether or not it has been lodged in accordance with the rules of the Australian Industrial Relations Commission.

PN532

Now, your Honour, I've already taken you to the issue of the Appeal Book and the added information in there that is not required under the rules. More importantly however is the fact that the appeal is not in accordance with form R1. Now, form R1 requires that the appellant must detail the particulars of the matters being appealed by specific reference to the categories listed in subsection 45(1) of the Act. Now, your Honour, we submit that this has not been complied with. Mr Hodgkinson today has not indicated specifically which grounds under 45(1) the employer organisation is repealing under nor, more importantly, in the appeal now it is lodged with the Commission have they indicated by specific reference to the paragraphs under 45(1) the basis of the appeal.

PN533

We also note that the notice of appeal is signed by P. Glover, however there is no indication in what capacity he signs the notice of appeal or on what authority.

PN534

THE SENIOR DEPUTY PRESIDENT: My notice of appeal isn't. Where - let me just look at the file. I've just been looking at the Appeal Book. Yes, it's not the notice of appeal, is it, Mr Maxwell, it's a letter that accompanied the notice when it was filed, I think. Is that what you mean?

PN535

MR MAXWELL: Well, your Honour, we've not received any copy of any covering letter. All we've received - - -

PN536

THE SENIOR DEPUTY PRESIDENT: Oh, I see. Yes.

PN537

MR MAXWELL: All we've received from the MBA was the notice of appeal.

PN538

THE SENIOR DEPUTY PRESIDENT: Yes. Well, mine isn't signed.

PN539

MR MAXWELL: And the one that we received was signed by Mr P. Glover, dated 15 October 2001.

PN540

THE SENIOR DEPUTY PRESIDENT: Yes. Well, then, I think I should indicate that the Commission's file reflects a notice of appeal having been lodged on 15 October 2001 and it is unsigned. Accompanying that notice there was a letter from the MBA dated the same date signed by Mr Glover indicating that:

PN541

In addition to the notice of the appeal that was being filed ...(reads)... I would be grateful if the Commission make arrangements for it to be heard.

PN542

You can have a copy of that letter in due course, Mr Maxwell, if you want it.

PN543

MR MAXWELL: Thank you, your Honour. Well, your Honour, the issue we raise there is that (1) the notice of appeal itself has not been signed - that's a requirement for form R1 - but also that it's our understanding that Mr Glover is an employee of the MBA New South Wales. He is not an employee of any of the other organisations listed in the notice of appeal. So given these facts the union raises the question as to whether or not the appeal has been validly made.

PN544

THE SENIOR DEPUTY PRESIDENT: Sorry, who is Mr - your understanding is Mr Glover is an employee of one of the appellants?

PN545

MR MAXWELL: That's correct.

PN546

THE SENIOR DEPUTY PRESIDENT: Yes, I see. Well, what, are you challenging Mr Hodgkinson to ask those instructing him to establish the authority of Mr Glover to lodge this document on behalf of each of the appellants?

PN547

MR MAXWELL: That's correct.

PN548

THE SENIOR DEPUTY PRESIDENT: What, now?

PN549

MR MAXWELL: Well, we raise this on the basis that - - -

PN550

THE SENIOR DEPUTY PRESIDENT: Let us assume that at least I have an appeal before me by one of the appellants. Is that not sufficient for us to dispose of the stay?

PN551

MR MAXWELL: Well, it's sufficient in regard to the appeal by the MBA New South Wales but we raise the validity of the appeals by the other organisations.

PN552

THE SENIOR DEPUTY PRESIDENT: Well, I suppose before me I have a document putting to one side any other deficiencies it might have, that is, I would have thought sufficient to commence an appeal under section 45. It would certainly be insufficient for it to have given rise to a Full Bench being constituted and the stay being referred to me today. So generally I would not go behind that but if it is raised that you challenge the authority of Mr Glover to have lodged this appeal on behalf of the appellants other than the Master Builders Association of New South Wales I think that's all you do, you just alert them to that and revisit it before the Full Bench.

PN553

MR MAXWELL: Yes, your Honour.

PN554

THE SENIOR DEPUTY PRESIDENT: But it won't stop me hearing and disposing of the stay, I think, Mr Maxwell.

PN555

MR MAXWELL: I understand that, your Honour.

PN556

THE SENIOR DEPUTY PRESIDENT: Right.

PN557

MR MAXWELL: I'm just raising it at this point of time.

PN558

THE SENIOR DEPUTY PRESIDENT: Yes.

PN559

MR MAXWELL: The second question is in regards to the standing of appellants and we believe this does have ramifications for the stay. Now, the union submits there are a number of the organisations seeking to appeal the orders of Commissioner Jones are not competent to make the appeal. Under 45(3) of the Workplace Relations Act an appeal under subsection (1) may be instituted (a) in the case of an appeal under paragraph 1(b) which is not against an order under part 6A by an organisation or person bound by the award or order.

PN560

THE SENIOR DEPUTY PRESIDENT: Yes.

PN561

MR MAXWELL: Now, the union submits that the following organisations are not federally registered nor are they respondent employer organisation parties to any of the awards in question. Those organisations are the Master Builders Association of Queensland - - -

PN562

THE SENIOR DEPUTY PRESIDENT: Just a moment. Yes?

PN563

MR MAXWELL: The Master Builders Association of Western Australia and Newcastle Master Builders Association. Your Honour, I seek to hand up a copy of the list of organisations registered under the Workplace Relations Act taken from the Commission's web-site.

PN564

THE SENIOR DEPUTY PRESIDENT: I take it this really establishes - by looking at this, this establishes what you put - - -

PN565

MR MAXWELL: That's right, your Honour.

PN566

THE SENIOR DEPUTY PRESIDENT: - - - by their absence to be on this.

PN567

MR MAXWELL: That's right.

PN568

THE SENIOR DEPUTY PRESIDENT: Yes, all right. Well, let us assume that's right unless Mr Hodgkinson says anything else I won't check through. I will accept what you say.

PN569

MR MAXWELL: Thank you, your Honour.

PN570

MR HODGKINSON: I was going to do the same, your Honour.

PN571

THE SENIOR DEPUTY PRESIDENT: Do you want to - - -

PN572

MR HODGKINSON: At this stage of the appeal if my friend says they are not there I am not going to - - -

PN573

THE SENIOR DEPUTY PRESIDENT: Yes, I accept they're not there. Do you want to say anything else though, Mr Hodgkinson, about the consequences of them not being there?

PN574

MR HODGKINSON: Your Honour, my understanding is all these parties were parties to the proceedings.

PN575

THE SENIOR DEPUTY PRESIDENT: Yes. Well, they're not going to be - - -

PN576

MR HODGKINSON: But in any event, your Honour, the same proposition that your Honour advanced in relation to the first point made, that is, provided represented here are properly parties to the appeal, that is sufficient for the present time. Now, my friend has put us on notice as to this point. It will have to be investigated. If there is some substance - I mean, frankly, your Honour, we don't want to argue points that are just - are clear on the face of it. If that's the case well we will notify my friend that his points are right in respect of X, Y and Z parties and we will notify the Commission accordingly. If it's wrong, we will notify my friend why it's wrong.

PN577

THE SENIOR DEPUTY PRESIDENT: Yes.

PN578

MR HODGKINSON: But it still doesn't change the fact that he doesn't say that there are no parties here and your Honour is apprised of an appeal; your Honour is apprised of an argument in relation to a stay and really required, with respect, to rule on it.

PN579

MR MAXWELL: Your Honour, I am not arguing against the stay application in total but what I am arguing is that there are no valid employer organisations or respondents to at least one of the awards who have appealed so - - -

PN580

THE SENIOR DEPUTY PRESIDENT: Well, I think that's relevant.

PN581

MR MAXWELL: So if there are no - - -

PN582

THE SENIOR DEPUTY PRESIDENT: Which one?

PN583

MR MAXWELL: This is the Roof Slaters and Tilers Award Victoria.

PN584

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN585

MR MAXWELL: Your Honour, just on that point I would seek to hand up a copy of the parties bound clause and the schedule of respondents.

PN586

THE SENIOR DEPUTY PRESIDENT: Thank you. Just a moment. Again, I won't spend too much time looking at it; I will accept what you say it establishes and if that's put in issue, we will return to it but in relation to the Roof Slaters and Tilers Award, none of the appellants are respondent to that award.

PN587

MR MAXWELL: That's correct.

PN588

THE SENIOR DEPUTY PRESIDENT: Yes.

PN589

MR MAXWELL: Your Honour, on that point, I just seek to hand up copies of authorities in regard to that.

PN590

THE SENIOR DEPUTY PRESIDENT: Don't worry about that at the moment, Mr Maxwell.

PN591

MR MAXWELL: Well, I just - the first is the appeal by the FMWU relating to the Rubber, Plastic, and Cable Making Award 1972 found in Print C7283 and the Full Bench of the Australian Commission, Coldham J, Riordan DP and Cox C, C number 5412 of 1985 found in Print G2692 and the authority in regard to - that less authorities also are relevant to the Roof Slaters and Tilers Award issue.

PN592

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN593

MR MAXWELL: Your Honour, turning to the issue of the arguable case, in regard to the main arguments in support of the appeal, the union submits that there is no arguable case, that there is little merit in the notice of appeal, and more importantly, there is no justification for the appeal on the grounds of public interest. In regard to the first ground of appeal, that the Commissioner lacked jurisdiction to make the orders in that the orders confer a financial benefit above the award safety net and that the orders have the effect of conferring superannuation and entitlements above the Superannuation Guarantee Administration Act requirement, we say the following.

PN594

During the history of the applications by the CFMEU to vary the awards in question, there have been two section 107 references to the President, both by the Housing Industry Association, or HIA. The first was made by the HIA on 17 March 1998 and I would refer you to pages 473 to 478 of the appeal book where that issue is raised, I believe, by Mr Moses on behalf of the HIA and the basis of that reference was in order to ensure that the variation does not offend the guidelines established in the superannuation test case. On the - - -

PN595

THE SENIOR DEPUTY PRESIDENT: Just a moment, where were you reading from there, Mr Maxwell, at 473, were you?

PN596

MR MAXWELL: This was 473 to 478.

PN597

THE SENIOR DEPUTY PRESIDENT: All right. Have you got that page in front of you or not?

PN598

MR MAXWELL: No, I just - - -

PN599

THE SENIOR DEPUTY PRESIDENT: I should have raised this earlier because Mr Hodgkinson too took me to those pages and at the time, I only looked at them quickly and I didn't readily identify where the application was made. Those - I'm sorry, I wonder if I'm looking at - no, I'm looking at the transcript, page 473.

PN600

MR MAXWELL: Yes. Your Honour, that is the start of Mr Moses' submissions, and - - -

PN601

THE SENIOR DEPUTY PRESIDENT: Yes. 476, is it? Yes, I see, right down the bottom of the page.

PN602

MR MAXWELL: Right down the bottom, your Honour, yes.

PN603

THE SENIOR DEPUTY PRESIDENT: Yes, thank you.

PN604

MR MAXWELL: Yes, your Honour. It says that - yes, your Honour, it reads, starting in the middle of the last paragraph of page 476 of the appeal book:

PN605

For those reasons, Commissioner, the orders that the HIA seek in relation to this application ...(reads)... guidelines as established in the superannuation test case.

PN606

Now, your Honour, on 27 April 1998, his Honour the President refused the application pursuant to section 107 on the grounds that:

PN607

I am not of the opinion that the part of the industrial dispute is of such importance that in the public interest it should be dealt with by a Full Bench.

PN608

And I'd refer you to page 76 of the appeal book where that decision is found. The second 107 reference application by the HIA was made in their written submission dated 27 September 2001. That's found in exhibit HIA1 which is page 112 of the appeal book. Page 112 is the start of correspondence sent to the Commissioner by the HIA and if I could take you to page 115 where in the letter in the fourth paragraph, it states:

PN609

In the alternative, we submit that the orders sought, if granted, will constitute ...(reads)... section 107 as a special case.

PN610

Now, on 26 September 2001, his Honour the President again refused the section 107 application stating:

PN611

Having regard to the subject matter and the reasons for the application ...(reads)... should be constituted to deal with the matters.

PN612

And that's found at page 61 of the appeal book. Now, your Honour, in addition to these decisions of the President, we also have the decision of the Full Bench found in Print Q8495 which dealt with the appeal by the HIA against the decision of Commissioner Jones to vary the awards in question to include a number of other allowances in the definition of ordinary time earnings for superannuation purposes. Your Honour, this was the decision I was referring to earlier that they'd included in the decisions the HIA appeal, but not the actual decision, and I'd just seek to hand up a copy of that decision.

PN613

THE SENIOR DEPUTY PRESIDENT: Yes.

PN614

MR MAXWELL: Now, your Honour, in this decision, the Full Bench rejected the submissions that Commissioner Jones gave an impermissible interpretation of the definition of ordinary time earnings in sections 6 of the Superannuation Guarantee Administration Act, and they also rejected the appellant's argument that the variations were contrary to the superannuation test case and that's found in the last two paragraphs at the bottom of page 2, where they state:

PN615

We reject the submissions that John C gave an impermissible interpretation ...(reads)... will operate to provide a notional earnings base.

PN616

They then go on:

PN617

For these reasons we've decided to refuse leave to appeal.

PN618

So, your Honour, we submit it is therefore quite clear from the two decisions of the President, and the decisions of the Full Bench, that Commissioner Jones had jurisdiction to make the orders that he did.

PN619

THE SENIOR DEPUTY PRESIDENT: Power? Power to - I don't think anyone has put his jurisdiction in issue. I know it's pleaded, but I have not yet - - -

PN620

MR MAXWELL: Well, there's not been the argument that - today.

PN621

THE SENIOR DEPUTY PRESIDENT: - - - heard a jurisdiction argument, but I have heard power arguments.

PN622

MR MAXWELL: But - - -

PN623

MR HODGKINSON: We concede that, your Honour.

PN624

THE SENIOR DEPUTY PRESIDENT: Yes, thanks, Mr - I assumed I was properly reading the grounds of appeal for a new submission.

PN625

MR HODGKINSON: Yes.

PN626

THE SENIOR DEPUTY PRESIDENT: Yes.

PN627

MR MAXWELL: Well, your Honour, in regard to ground 2 of the appeal notice, that the Commissioner was in error in that he based his decision in the orders on the advice of the ATO, or the Australian Taxation Office, we say the following. The union submits that the Commissioner was not in error and that he was within his rights to make the decision based on the information before him, and as stated in paragraph 128 of the decision. Sorry, your Honour, I'm just finding paragraph 128. This is found at page 57 of the Appeal Book. And if I can take you to about two-thirds of the way down that paragraph, he states:

PN628

In fact although employers have advanced that there was a need for it, that is expertise, no suggestion was forthcoming of where employers saw this alternative source of expertise evolving from.

PN629

THE SENIOR DEPUTY PRESIDENT: Sorry, where are you at? What paragraph?

PN630

MR MAXWELL: Sorry, this is paragraph 128.

PN631

THE SENIOR DEPUTY PRESIDENT: 128. Thank you.

PN632

MR MAXWELL: On page 57 of the Appeal Book. And it's about two-thirds of the way down paragraph 128. And he said:

PN633

...no ..... suggestion was forthcoming of where employers saw this alternative source of expertise ...(reads)... for the purpose of arriving at the conclusion sought, and which it did.

PN634

On this issue, your Honour, we further say that there was nothing stopping the employers seeking to subpoena the writer of the advice from the ATO if they wished to challenge the evidence of the authors of the correspondence.

PN635

Now, in regard to the method of how the Commission treats the fares and travel patents allowance, which is the proper name of the award clause, we say this is immaterial. It is quite clear that there is a difference interpretation of ordinary time earnings under the Superannuation Guarantee Act and by the Australian Taxation Office in calculating ordinary time earnings for superannuation purposes. We would also point out that the award definition already includes a number of allowances that are treated as expense related allowances by the Commission, such as the tool allowance and the direct location allowance.

PN636

Now, your Honour, on this point I perhaps should take you to exhibit B13, which Mr Hodgkinson took you through earlier. Now, in regard to the award earnings base, he took you to the bottom of page 1 and the top of page 2 and made reference to the second paragraph at the top of page 2, that the Commission should be aware of it. However, we think the Commission should do - should quite clearly look at the second paragraph which states the following:

PN637

It is important to highlight that any examination of the interpretation of OTE ...(reads)... using the default definition of OTE under the SGAA.

PN638

Now, your Honour, that's important because that was the basis on which we sought the advice from the ATO.

PN639

THE SENIOR DEPUTY PRESIDENT: I'm so sorry, Mr Maxwell. Was it in this document again?

PN640

MR MAXWELL: I'm sorry, this is exhibit B13, the page with the number 2 at the top.

PN641

THE SENIOR DEPUTY PRESIDENT: Yes.

PN642

MR MAXWELL: The second paragraph from the top.

PN643

THE SENIOR DEPUTY PRESIDENT: "It is important"?

PN644

MR MAXWELL: Yes. Now, your Honour, in regard to exhibit B13, Mr Hodgkinson took you to page 8 and - where he made reference to the Superannuation Guarantee Rulings 94/4 and 94/5, and these are being reviewed. Well, your Honour, whilst that may be the case, the issue is that the ATO has provided this specific advice dealing with the issue of the fares and travel patents allowance applicable to the building industry, D, and that the most pertinent part of the advice is actually found on, I suppose what would have been page 1, but which - where they deal with specific expense allowances. And it states:

PN645

We have received specific requests for clarification of whether fares and travel allowances should be included in the definition of ordinary time earnings under the Superannuation Guarantee Administration Act 1992 SGAA.

PN646

They then list a number of allowances. They say:

PN647

The allowances referred to by the various parties appear to be a mixture of -

PN648

and they go down to number 5 -

PN649

a fixed rate allowance paid on a daily basis to compensate for excess fares and travelling time ...(reads)... on which the fares and travel patents allowance is paid under the building awards.

PN650

If you then go further down that page, because they then deal with the various types of allowances, they say:

PN651

Allowance type 5 does not relate wholly to expenses and should therefore be included ...(reads)... and salary then the expense component could be excluded from OTE.

PN652

Well, your Honour, the allowance under the NBCIA and the other building awards is paid for fares and travel patents, and it has a long history before this Commission, but it is not just an expense allowance. Now, although the parties have used movements in CPI to move the allowance, the issue is: what is the allowance paid for. And it's paid to compensate not just for the fares component, but also the excess travelling required.

PN653

Now, in regard to ground 3, that the Commissioner was in error in that he made the operative date of the orders retrospective, we say there was no error. The Commissioner was perfectly within his rights to make the order retrospective. The issues now raised in the appeal were raised during the hearing. The issue in regard to employers not being able to comply with their obligations under the superannuation legislation is, we submit, a Furphy. Although the date of operation of the order is backdated to 30 April 2001 this legal obligation did not apply under the orders were actually issued. Therefore the employers could not be in breach of their obligations under the superannuation legislation as at 1 July 2001 as there was no obligation at that time to include the fares and travel patents allowance as part of ordinary time earnings.

PN654

Now, further, Attachment E of exhibit B14 quite clearly shows that the law allows for reduction based on the facts and the reasons why an employer did not meet their superannuation guarantee obligations. Now, your Honour, as stated previously, exhibits B14 in the Appeal Book is not a complete copy. I do have a copy of the Attachment E, which I would seek to hand up.

PN655

THE SENIOR DEPUTY PRESIDENT: I just might mention that at some stage we might have those instructing you, Mr Hodgkinson, have reference access to these documents. The reasons being that the exhibits aren't in order, sequential order, and the problem is that I would not confidently rearrange them myself, because I would be concerned that I mightn't be taking the whole of an exhibit and putting it in the right place, because the exhibits aren't stapled together; they comprise several loose pages.

PN656

MR HODGKINSON: I accept, as a result of the earlier discussion we had this morning, that the entire Appeal Book has to be gone from start to finish carefully through, in consultation with my friend, to make sure that the proper material in proper order is before the Commission.

PN657

THE SENIOR DEPUTY PRESIDENT: Thank you. Yes.

PN658

MR MAXWELL: Now, your Honour, this was attachment E to exhibit B14.

PN659

THE SENIOR DEPUTY PRESIDENT: Yes, well, I can't even find that at the moment. That gave rise to my earlier observation.

PN660

MR MAXWELL: Exhibit B14 was the CFMEU written submission in reply before Commissioner Jones.

PN661

THE SENIOR DEPUTY PRESIDENT: Yes. Yes, but I can't find it. Do you have a page number of the Appeal Book that it - - -

PN662

MR HODGKINSON: It is 226.

PN663

THE SENIOR DEPUTY PRESIDENT: 226, thank you.

PN664

MR MAXWELL: But my friend has made the point, and he is right; that the annexures are not attached to it.

PN665

THE SENIOR DEPUTY PRESIDENT: All right. Yes, I have that now.

PN666

MR MAXWELL: Your Honour, the importance of this attachment E was that this information was put before Commissioner Jones; that can a Part 7 penalty be reduced? And this is from the ATO assist web site of the Australian Taxation Office, and it is in regard to frequently-asked questions. And it says:

PN667

Yes, the law allows for reduction based on the facts ...(reads)... guarantee charge before the ATO contacts you.

PN668

So your Honour, in regards to the issue of any penalties: (1) we believe that there will be no penalties imposed because as at 1 July 2001, which was prior to the decision and the orders of Commissioner Jones, there was no legal obligation at that time to pay superannuation contributions based on the fares and travel allowance; that that obligation only came into effect from 9 October, which was the date the award was varied by the Commission, although it had a retrospective date of operation.

PN669

THE SENIOR DEPUTY PRESIDENT: I think the problem is, Mr Maxwell, this: everything you say may well be right, and I have some attraction to it in terms of trying to do something that is dangerous, and that is place myself in the shoes of a tax officer who has a discretion, but that is not what the complaint is. The Commissioner didn't refer to this submission, and it formed one of the submissions made by the employer as to why retrospectivity should not be granted, and that, I understand, is the complaint that is made.

PN670

MR MAXWELL: Well, your Honour, in regard to that issue, although there isn't specific reference to that issue - - -

PN671

THE SENIOR DEPUTY PRESIDENT: I don't think there is - I don't want to do the Commissioner an injustice, but I think - I don't recall that I noticed that that submission was weighed by him when he exercised his discretion to grant retrospectivity of three months.

PN672

MR MAXWELL: Well, your Honour, we would say that there is recognition of that, although oblique reference to that in paragraph 136, where he dealt with the issues of retrospectivity. He says:

PN673

... and from the employers no justification for it occurring, that circumstances are ...(reads)... and the ATO response delays.

PN674

We would say that that would come within the issue of the nature of taxation laws. Finally, your Honour, in regard to the matters raised which are supposed to be in the public interest, we say the following. The President and the Full Bench has already determined that the Commissioner had jurisdiction to deal with this type of variation. Further, the President has also determined twice that there is no public interest requiring a Full Bench to deal with the subject matter. It has already been decided in a number of cases that the retrospective operation of orders and awards does not raise matters in the public interest.

PN675

Now, your Honour, on this issue I would seek to refer you to three authorities, which I seek to hand up. Your Honour, I just handed up an extract of those three authorities. The first is that re The Municipal Officers New South Wales Interim Award 1956 found in [1956] CthArbRp 283; 85 CAR 111, and if I can take you to page 112 - if I can take you to the beginning of the second paragraph, it reads:

PN676

As a result of these negotiations salary rates were agreed upon by the parties ...(reads)... matter of such importance that leave to appeal should, in the public interest, be granted.

PN677

The next authority is the Journalist Sydney Newspapers Award 1959 found in [1959] CthArbRp 453; 92 CAR 453, and again, this was in a part of the appeal that dealt with the issue of retrospectivity. And if I can take you to page 490, which dealt with the judgment delivered by the Commission. Ashburner J stated in the - I think, the fifth paragraph:

PN678

Mr Wootten submitted that the principles on which retrospectivity should be granted ...(reads)... that the matter raised is of such importance that in the public interest an appeal should lie.

PN679

And Gallagher J and Commissioner Austin agreed with the decision of Ashburner J. The third authority is the appeal by the Australian Wool Selling Brokers Employers Federation found in (1983) AILR at 101. Again, this was an appeal with regard to an operative date. If I can take you to the second page of that in the first column where it deals with a decision of William J Hastings C:

PN680

The majority stated on the question of public interest the parties referred to various decisions ...(reads)... and discharge the order of the Commission staying the part of the order that is subject to the appeal.

PN681

And this Staples J reached the same conclusion in a separate decision. So your Honour, we say that in regard to the issue of retrospectivity based on the three authorities referred to, make it quite clear that the Commission has taken a general attitude that the issue of retrospectivity does not give rise to a public interest ground. Now, as to the cost impact of the orders made by Commissioner Jones we submit that the Commission was well aware of the cost impact when making the decision. And that's found in paragraph 131 of his decision which is found at page 58 of the Appeal Book. We would also seek to hand up attachment A of exhibit B14, which unfortunately was not included in the Appeal Book.

PN682

Your Honour, this was a calculation of lost superannuation contributions drawn up by the union in its written submission in reply. Now, in this we went through going back - because we, at that stage, sought retrospectivity to 18 May 1998. We then showed what the fares and travel patterns allowance was on a daily basis, how much it was per week, what the superannuation contribution rate was and what the addition to the superannuation amounts would be on a weekly basis. We also included the CBus crediting rates given that the majority of employees covered by these awards are in the CBus scheme. We then did the calculations to show what the loss of superannuation contributions was for the period beginning 20 May 1998 up until 9 April 2001.

PN683

And this gave a total of $732.05 in lost contributions and interest. We also, in that attachment, provided a table to show the potential loss in superannuation entitlements based on a further 15 years employment and an interest of 9 per cent. Now, your Honour, from that it can be seen that given that this matter was not finalised back in 1998 which was when the other matters were finally resolved following the Full Bench proceedings, the potential loss to employees in this industry is a loss of some $2266.47 per employee if they remained in the industry for another 15 years. And we did this on the basis to show that the failure in dealing with this matter quickly has led to a loss in the potential retirement incomes of our members and other workers in the building industry.

PN684

So this information was before the Commissioner when he made his decision, however, as he stated he was not persuaded to grant the retrospectivity that the union sought but granted the retrospectivity to 30 April 2001 due to the issue of exceptional circumstances. Your Honour, perhaps on that point I should take you to his decision and paragraph 144 which is found on page 60 of the appeal book. Now, paragraph 144 deals with the retrospectivity conclusions and I should point out that the union supplied a number of authorities to the Commissioner that dealt with the issue of retrospectivity and one of them in particular is referred to in his decision at paragraph 144 where he states:

PN685

I do see what has happened with the progress of this claim does fit to some extent ...(reads)... Painters and Dockers Union of Australia v AWA Steamship Coal Limited and others [1960] CthArbRp 182; (1960) 94 CAR 579 at 619.

PN686

And despite arguments of ATOs views - and your Honour, perhaps I should take you back to an earlier issue that was raised about the subject of penalties. We believe that that issue also addresses that issue of penalties although again in an oblique way he states:

PN687

And despite arguments of ATOs views, I have been persuaded to granting retrospectivity in this matter which is one in line with the cases considered, peculiar and protected circumstances including the timetable arrangements.

PN688

So your Honour, it's quite clear that the reasoning for the retrospectivity was given in this decision. Your Honour, as for the issue of flow on to other awards which is raised in the notice of appeal, we say that any applicable dates will be subject to the date of application in regard to any other awards. Therefore, the economic effects of this decision and order are hard to calculate. Further, it has also been recognised that the fact that an award is a parent award, does not give rise to the public interest. And your Honour, we would seek to refer you to two authorities on that issue.

PN689

THE SENIOR DEPUTY PRESIDENT: I'm not going to make any finding on flow on, Mr Maxwell.

PN690

MR MAXWELL: Well, your Honour, it's in regard to the issue of parent awards and flow on, but there are authorities that deal with that issue. One dealt with the Builders Labourers Construction On-Site Award and one dealt with a Carpet and Joiners Award.

PN691

THE SENIOR DEPUTY PRESIDENT: It's not a new argument in your industry, is that what you're telling me?

PN692

MR MAXWELL: That's correct, your Honour.

PN693

THE SENIOR DEPUTY PRESIDENT: I'm not going to make any finding on that in the stay.

PN694

MR MAXWELL: Your Honour, in regard to the issue of balance of convenience, whilst Mr Hodgkinson has raised the issue that the employers cannot claim the money back because it's paid to a trustee of the superannuation fund. Whilst the money may not be able to be claimed back from the superannuation fund, there is nothing stopping an employer adjusting any contributions where an overpayment has been made. And therefore, they can adjust any future payments in recognition of any overpayments previously made.

PN695

THE SENIOR DEPUTY PRESIDENT: Well, both, in relation to Mr Hodgkinson's submission and yours, I am accepting what you both say is the legal effect of the trust deed, at least if not any other documents that must be read in connection with that. I just don't know. I'll accept what you say but - that you can do a balancing act at some time consistent with the obligations under the trust deed to make payments and there would be no reason why the trustees would interfere with that.

PN696

MR MAXWELL: Yes, your Honour. I mean, we can provide evidence to that, subject to further hearings of the appeal, but in regards to the balance of convenience there, I mean, you'd have to weigh up both sides of the situation. Now, Mr Hodgkinson has talked about the cost impact on employers and the problem of claiming the money back, but there's also the issue of the loss to employees of interest earned on superannuation contributions, and as you will be aware, that with superannuation, one of the biggest impacts on increasing their account balances in a superannuation fund is the compound interest that is paid over time.

PN697

So that factor needs to be taken into consideration. A second consideration is the problem of chasing entitlements from employers who are no longer in business since 30 April 2001. As your Honour will be aware, that there have been a number of bankruptcies in Australia, or an increase in the number of bankruptcies over the past 12 months. A number of those have been in the building and construction industry and we have grave concern that if a stay application is made, that any employer who then goes out of business should the appeal be lost, there will be a problem in chasing up the entitlements of employees that should have been made by those employers.

PN698

Coupled with that is the issue of the mobility of labour. As you will be aware, the building and construction industry - in the building and construction industry, a significant majority of the employees are mobile in that they are employed by one company one day and employed by another company another day, especially where you have daily hire employment for trades-persons and labourers and you also have casuals who are engaged on a daily basis. So, your Honour, we believe that in weighing up the balance of convenience, you should also take into account the effect of granting a stay on the potential loss of entitlements of employees.

PN699

Now, your Honour, if the Commission is of the view to grant the stay, then the union submits that conditions should be imposed. We do that based on the arguments we've just raised about the tracking of employee entitlements and we believe those conditions should be two-fold.

PN700

THE SENIOR DEPUTY PRESIDENT: Just hold off on that just for the time being, Mr Maxwell, I might come back to you on that.

PN701

MR MAXWELL: Okay. Well, your Honour, the only other issues I seek to raise is in regard to some of the issues raised by Mr Hodgkinson. We disagree that - or we submit that Commissioner Jones did not misdirect himself as to the discretions under section 113. Whilst we recognise that perhaps some of the issues included in his decision are not necessarily relevant to his final decision, we believe that the main issue of acting on expert advice that - being the advice of the Australian Taxation Office, the fact that he was within his powers to vary the award based on the decisions of the Full Bench, and also the decisions of the President, the issue of the fact that the superannuation guarantee rulings can change at any time, we believe is immaterial and was not raised at first instance in the hearings before Commissioner Jones.

PN702

However, I should point out that the union did raise the fact that the requirements under the Superannuation Guarantee Act recognised that there could be changes in the contributions required by employers in that if an employee received $800 a week and then had received an increase to receive $850 per week, then the Superannuation Guarantee Act allows for variations in superannuation contributions to reflect that at a certain point in time. Your Honour, in regard to - I'm, sorry, I've dealt with that issue.

PN703

Your Honour, the submissions that we make is that we submit that the employers have failed to make an arguable case both on the issue of merits and public interest which should be a pre-requisite for any stay application to be successful and that in regard to the issue of retrospectivity that a number of Full Benches have already determined the issue of retrospectivity does not give rise to public interest and that therefore no stay should be granted by the Commission. If the Commission pleases.

PN704

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. Mr Hodgkinson.

PN705

MR HODGKINSON: Thank you, your Honour. I will attempt to be brief. Your Honour, the first proposition that we want to make is - or raise is that this - the proposition that my friend advances is that there have been two applications under section 107. It is, with respect, to him irrelevant because of the circumstances of the applications. It is not able to be properly put that - or that which was invited of the Commissioner in the submissions has ever been considered by the President. The first application was made, as my learned friend made clear, at a time prior to the issue of the Commissioner's first decision in July 1998.

PN706

So at that time, as is clear from page 63 which is an extract from the Commission's decision, the circumstances were that the Commissioner had, as a consequence of the process of conciliation, been told by the majority of the parties appearing in the processes before him, that there was agreement on the majority of the issues. HIA took a different view on all issues, so invited the President to consider whether under section 107, notwithstanding the consent of the majority of employer parties, there ought to be a consideration by a Full Bench, and the President determined in the public interest there ought not be.

PN707

That is, in the public interest, he said, "Well, why would I ask a Full Bench to go behind consent, achieved in the course of proceedings before the Commission where there's no suggestion that the consent is otherwise than bona fide". I mean, with respect, that is hardly an unusual circumstance for the President to make a decision of that kind, and it would in fact be somewhat surprising if he made a different decision.

PN708

But what he wasn't being asked to do is consider that if Commissioner Jones came to the point of view that notwithstanding the other arguments being advanced to him, he ought to include the fares and travelling pattern allowance or allowance into the ordinary time earnings definition, that that in fact was a burden in the nature of an increased cost to employers in respect of which there was no consent. He wasn't asked that. Secondly, my friend says the issue goes to the Full Bench. Well, the issue didn't go to the Full Bench, with respect. That is not the issue that the Commissioner was asked to deal with.

PN709

It didn't go to the Full Bench. What went to the Full Bench, as can be seen from the decision that my friend took you to, was an appeal from the substantially consent position adopted by the Commissioner in the determination of his - of the matter before him as at July 1998. So he accepts the consent. The President says, "No public interest given the consent", and the HIA appeal that position. Now, the Full Bench really said to them that there is no basis for leave to appeal.

PN710

I mean, it wasn't a question where the parties were saying, "We've withdrawn our consent, or we were in some way compromised our consent, or we were compromised in the giving of our consent;" rather what was put, rather what was done was a very technical argument was advanced by Mr Moses, then appearing on behalf of the HIA which they sought to again advance the Commissioner not having accepted it in terms of this consent position. So again the Full Bench wasn't asked to consider the issue. Had the Full Bench been asked to, then there would have been nothing left for Commissioner Jones to have considered in 2001 because it would have been dealt with but it was never an issue before the Full Bench. It was never a matter that went to the Full Bench. It was always a matter left to him by the parties in the course of the process.

PN711

My friend then says well, you've got a submission in September of 2001 again from the HIA saying, "The question of the issue of orders ought to go as a matter under 107." It was too late. The Commissioner, therefore the Commission, had made a decision which had told the parties that the orders would be issued in terms identified within the confines of the decision. Now, HIA advanced this proposition to the Commissioner. The Commissioner quite properly put to them, look, this is in the nature of appeal. If you want to appeal from me you go ahead and appeal but I can't accept these submissions, having made my decision of 30 July 2001, now review that decision and determine in accordance with your proposition something different. I have made my decision, said the Commissioner, quite properly. If you want to appeal, you go and appeal.

PN712

In those circumstances, HIA go off under section 107 and the President says, "I'm not going to do it." Well, what was there to do with, with respect? I mean, the President could have come to no other conclusion. The Commission had already made its decision. The only way of reviewing that decision within the confines of the process was to take the matter on appeal as the Commissioner had told HIA. So that when in September the President - September this year after the decision is made the President deals with the section 107 application, he is not dealing with the same matter that was advanced to the Commissioner. He couldn't be because it had already been determined.

PN713

And with respect, he couldn't have then superimposed a process under section 107 in lieu of the appeal process. To do so would have created all sorts of legal difficulties which I've no doubt motivated the President to make his decision to say "Look, we're not going to do it" so that with respect to my friend's submission there is no substance in this asserted position that the section 107 position had been dealt with. It hadn't been dealt with in respect of the relevant aspect of the matter before the Commissioner but he was apprised of the need to do so in the course of the submissions that were made to him.

PN714

The next matter that I wish to deal with is that - sorry, just one further point on that. The paragraph to which my friend took you at the bottom of page 2 of the decision of the Full Bench really identifies that the issue we're talking about, and the Commissioner dealt with in July of 2001 was not a question before them. It just wasn't a matter before them. What they were dealing with is can you make orders in light of a decision or this technical argument that had been raised as to section 6 of the Superannuation Guarantee Act.

PN715

Can I next deal with the proposition in relation to B13? I do it very briefly. The paragraph to which my learned friend took you I also took you in my submissions in chief so I don't go back to it at page 2 of that. What we say is though the Tax Office says clearly, as I pointed out in my submissions in chief, this position only exists if there is no award ordinary time earnings provision. And if that were the case, says the Tax Office, this would be our view. Now, my friend in his submission fell with respect to him into the same trip the Commissioner did.

PN716

He then substituted that approach, that is, this question of expert evidence even for present purposes accepting that the ATO advice was such evidence. That was only required to establish that there was no inconsistency in what was proposed but it's been converted by my friend and by the Commissioner into this proposal that because the ATO says it can be done it ought be done, that is, that the Commissioner has not accepted what the Tax Office asserts and that is that he really has the power to decide which one is which and he has just deferred to the legislative scheme.

PN717

Can I then deal with the question that was raised earlier? That's the Roof Slaters and Tilers (Victoria) Award. Your Honour, I'm not dealing with the other propositions in (1) and (2) that my friend raised on the basis that I earlier addressed and that is that we are on notice. If they are going to become matters of substance in the appeal we will have to address them but this was a slightly different point, and that is he said nobody here, and that would have, we concede, significance in terms of the viability of an appeal because if you haven't got an appellant before you we're not going to advocate that you've got an appeal. You have, however, got an appellant before you.

PN718

Can I take your Honour to the document that my friend handed up? It's headed AW794966, Roof Slaters and Tilers (Victoria) Award 1995 five parties bound and if your Honour would go then to the first page starting with Boral Montaro. Would your Honour go down to about point 7? You will see Australian Chamber of Manufacturers, 380 St Kilda Road. That organisation is now the Australian Industry Group for whom I announced an appearance this morning and if your Honour would go then to the organisations registered under the Workplace Relations Act 1996. On the first page your Honour will see this, the document my friend handed up, the fourth last entry, AIG, Australian Industry Group.

PN719

Now, I accept your Honour that there is an assumption that I can make out that the name change has happened but with respect we would ask, given the way this is raised for your Honour to accept that for present purposes and again if it's to remain an issue then we will address it more formally because in a formal sense it would have to be, unless accepted from the Bar Table by evidence, before the Appeal Bench.

PN720

THE SENIOR DEPUTY PRESIDENT: Well, they're still not appellants at the moment though, are they, Mr Hodgkinson? What did you say at the beginning of this hearing?

PN721

MR HODGKINSON: I sought leave to appear for them.

PN722

THE SENIOR DEPUTY PRESIDENT: Yes.

PN723

MR HODGKINSON: And my friend didn't object.

PN724

THE SENIOR DEPUTY PRESIDENT: Yes, but I didn't understand you - well, that's one thing. Was that leave to amend the notice of appeal to make them an appellant? If it was I didn't understand that to be so.

PN725

MR HODGKINSON: Well, I'm sorry, my understanding - sorry, that would clearly be my fault, your Honour, if I haven't made the position clear. I didn't seek to have them introduced as interveners. I did seek to have them, and if I didn't make it clear, as parties.

PN726

THE SENIOR DEPUTY PRESIDENT: Yes. Yes, let us just deal with this now. Mr Maxwell, what you say about that, there are two matters now; on the basis that ACM that's become AIG and that AIG is a respondent to Roof Slaters and Tilers it is said that they would have standing and then working backwards it is said that they now wish to associate themselves with and become an appellant.

PN727

MR MAXWELL: Well, your Honour, we say that there has been no appeal lodged, no formal appeal in accordance with rule 21 and section 45 lodged by the Australian Industry Group in these proceedings and we would question whether it is open to an agent or counsel for any party to seek to stand up to the Commission and say that we now wish to lodge an appeal or be part of an appeal without any proper paper work being lodged. We recognise that the - - -

PN728

THE SENIOR DEPUTY PRESIDENT: I don't have a difficulty with that. I accept when people indicate that they're instructed by certain organisations, particularly counsel, that that is exactly it but if you want to challenge in the same way as you did earlier Mr Glover, this authority point, would that go to the AIG?

PN729

MR MAXWELL: Well, I suppose we don't challenge the position of counsel that he now seeks to represent the AIG. I suppose the issue we're taken to is whether the Commission accepts that people can be seen to be formally making an appeal to the Commission without meeting the requirements of the Act in regard to the lodging of such an appeal. We recognise that the AIG has an - or the MTIA has an amalgamation with the Australian Chamber of Manufacturers and they are now part of the AIG; we accept that, but we challenge whether the AIG can seek to be included in an appeal, and especially in regard to an award where they are the only party, employer party in these proceedings that are bound by that award without making a formal application in accordance with the requirements of the Act.

PN730

I should also point out that when I didn't object to leave to appeal by Mr Hodgkinson, it was on the basis of appearing as legal counsel; it wasn't on the basis of him being able to represent the other organisations that he sought to represent, being the Australian Industry Group and Australian Business.

PN731

THE SENIOR DEPUTY PRESIDENT: Yes. We'll come to that in a moment. Mr Ryan, I completely forgot to call on you.

PN732

MR RYAN: And, your Honour, I have nothing to add to the proceedings.

PN733

THE SENIOR DEPUTY PRESIDENT: Excellent.

PN734

MR HODGKINSON: I'm sorry, I probably jumped up too quickly, your Honour.

PN735

THE SENIOR DEPUTY PRESIDENT: Yes, it was your fault, Mr Hodgkinson. Well, I have to say I - it's not ideal procedurally, but it will not - I will not be persuaded to decline to make an order, a roof-slaters' award; that will be whatever order issues in the orders. But AIG needs to regularise that which should have already been attended to and make it clear that their standing relates to that one award and they appeal in relation to that award but they may associate themselves with the same grounds of appeal.

PN736

MR HODGKINSON: Yes. I accept - essentially I was going to suggest that if your Honour were happy with that, that it could be approached the same way; that is we take it on-board as an issue that has to be dealt with for the appeal Bench.

PN737

THE SENIOR DEPUTY PRESIDENT: Yes. All right.

PN738

MR HODGKINSON: Your Honour, can I just refer to this analysis that my friend produces as annexure A to B14. That I refer to on this basis: B14 was introduced to the proceedings on the last day of the proceedings, and that it's introduced at page 377. Now, I accept - my friend says that's annexure A; I accept that it's annexure A, and it should have been in the Appeal Book, as I've already indicated. But in terms of the matter, it was introduced in-reply by the union, not objected to as I see the transcript, your Honour, but it's in those circumstances that one has got to look at it, at least for present purposes. And, your Honour, the figures have altered in that there's been an increase in the allowance from the $12.00 figure there quoted to the $13.30 figure that my friend, or $13.60 figure that my friend wrote.

PN739

And, your Honour, can we just extrapolate on this basis. My friend's document, attachment A, shows $5.04 per week. Now, I said in my submission $5-plus per week, per person, affected by this allowance in the award is substantial. We don't resile from that, and indeed if anything attachment A demonstrates that that's the case. The only thing that attachment A doesn't have is how many people are affected by this allowance. But we've asked the Commission to rely upon, and I didn't hear my friend to suggest differently, that it does apply to a significant number of people within this very large industry.

PN740

Can I just then briefly deal with attachment E, again which my friend handed up. What he says there is this penalty regime. Firstly, attachment E only talks about reduction; it doesn't talk about waiver. Secondly, it makes it clear that it's a discretionary reduction, by the use of the word "may". So that all of the points we've made are supported by this. In any event, as I've put in our primary submission, it wouldn't be appropriate to second-guess, as it were, the Tax Office as to the exercise of its discretion, and as your Honour rightly put to my friend when he introduced this, the position we've advanced is that the Commissioner had to consider, had to weigh it in balance, when he was applying the test under the Act.

PN741

Now, my friend in the development of this part of his submission referred to that part of the Commissioner's decision, paragraph 144 at page 66 - page 60, I'm sorry, your Honour, that referred to the Federated Ship Painter and Dockers Union v Adelaide Steamship. And then referred to this quotation:

PN742

I have been persuaded to granting retrospectivity in this matter, which is one in line with the cases considered peculiar and protracted circumstances, including the timetable arrangements.

PN743

Now, your Honour, with respect, that supports the submission that I made arising out of paragraph 143; that is he just applied the wrong test. You see, he articulated the test in paragraph 135 by correctly setting out in that paragraph subsection (2) of section 146 of the Workplace Relations Act: Exceptional Circumstances. He set that out, but then in paragraph 143 and again in 144 he talks about peculiar circumstances. And he does it on the basis of a determination made in 1960, not a determination made pursuant to the provisions of the Workplace Relations Act, and the tests there prescribed by the legislature. So, with respect, what he does is highlight the fact that the test applied is wrong. It's not compliance with the Act at all.

PN744

Now, I've said most of what I want to say on balance of convenience, and I don't repeat it. There is some - my friend raises interest; there is some consideration in respect of interest in the Superannuation Guarantee Administration Act in paragraph - in part, or section 33(2)(d), that is that the employer has to nominate, or have a nominal interest component for the year in the return in respect of this amount that's not paid. So that there is some consideration given to the question of interest by the Act itself, which accommodates this.

PN745

Your Honour, I don't understand, with respect to my friend, how the mobility of the industry can weigh in the balance in this question. Really what we're here talking about is whether a sum of money has to be paid by employers into superannuation arrangements, and if it does, when should it be paid from. Now, I would respectfully submit that if your Honour is convinced that there's an arguable case in respect of any or all of the parts of the matter that we've raised, then because of those other factors that I've earlier referred to, it really is a matter where a stay ought to be issued, because there's no other way of protecting one side of the ledger's interest. There's no other way of protecting the employer interest.

PN746

I must say I don't know, but I don't challenge my friend's assertion that adjustments can be made, but even if there is, there is then significant difficulties in terms of interest that had accrued and entitlement and the like. Superannuation regulations is a fairly complex area. The concept of putting into it for a period of time and then withdrawing it over a relatively quick period of time - an obligation on employers to make payments which are backdated is only going to add to that complexity. Unless there is any other matter, your Honour, those would be the matters we would raise in reply.

PN747

THE SENIOR DEPUTY PRESIDENT: I think what I'm going to do is adjourn for a short time, probably resume in conference, and then I may go back on to transcript or adjourn, and by a short time I think you can both assume we'll have an adjournment for 10 minutes.

PN748

MR HODGKINSON: Thank you, your Honour.

SHORT ADJOURNMENT [3.56pm]

NO FURTHER PROCEEDINGS RECORDED