C2001/348, Transcript of Proceedings [2001] AIRCTrans 3414 (6 December 2001)

AUSCRIPT PTY LTD
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TRANSCRIPT OF PROCEEDINGS

O/N 1413
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

JUSTICE GIUDICE
VICE PRESIDENT ROSS
VICE PRESIDENT McINTYRE
COMMISSIONER GAY
COMMISSIONER FOGGO

C2001/348, 362, 2248, 2251,
2256, 2514, 2515, 2516, 2528,
2648, 2757, 3141, 3356, 3441,
3233, 3234, 3686, 3687 and 3688

COAL MINING INDUSTRY (PRODUCTION AND ENGINEERING)
CONSOLIDATED AWARD 1997

AMBULANCE EMPLOYEES - VICTORIA INTERIM ORDER (1994)

RETAIL AND WHOLESALING INDUSTRY - SHOP EMPLOYEES -
AUSTRALIAN CAPITAL TERRITORY - AWARD 2001

AUSTRALIA POST GENERAL CONDITIONS OF EMPLOYMENT
AWARD 1999

RAILWAY PROFESSIONAL OFFICERS AWARD 1974

TENIX DEFENCE SYSTEMS PTY LTD (DRAUGHTING,
TECHNICAL AND SUPERVISORY EMPLOYEES ) AWARD 2000

SPACE TRACKING INDUSTRY AWARD 1998

HORSE TRAINING INDUSTRY AWARD 1996

AUSTRALIAN PUBLIC SERVICE AWARD 1998

NATIONAL ELECTRICAL, ELECTRONIC AND
COMMUNICATIONS CONTRACTING INDUSTRY AWARD 1998

INSURANCE INDUSTRY AWARD 1998

TEACHERS (VICTORIAN GOVERNMENT SCHOOLS) CONDITIONS OF EMPLOYMENT AWARD 2001

MEDICAL OFFICERS (NORTHERN TERRITORY PUBLIC
SECTOR) AWARD 1994

AIRLINE OPERATIONS - FLIGHT ATTENDANTS LONG
HAUL - QANTAS AIRWAYS LIMITED - AWARD 2000

Applications under section 113 of the Act by the Construction,
Forestry, Mining and Energy Union and Others to vary the above
awards re reasonable hours of work clause

CLERICAL AND ADMINISTRATIVE EMPLOYEES (VICTORIA)
AWARD 1999

RETAIL AND WHOLESALE INDUSTRY - SHOP EMPLOYEES -
AUSTRALIAN CAPITAL TERRITORY AWARD 2000

Applications under section 113 of the Act by the Australian
Chamber of Commerce and Industry to vary the above awards
re reasonable hours of work clause

STORAGE SERVICES - GENERAL - AWARD 1999

CLERICAL AND ADMINISTRATIVE EMPLOYEES (VICTORIA)
AWARD 1999

BUSINESS EQUIPMENT INDUSTRY - TECHNICAL SERVICE -
AWARD 1999

Applications under section 113 of the Act by the Victorian
Employers Chamber of Commerce and Industry and Others to
vary the above award re annualised wages wage rates

MELBOURNE

10.04 AM, MONDAY, 26 NOVEMBER, 2001

Continued from 23.11.01


<IAIN GRAHAM CAMPBELL, ON FORMER AFFIRMATION [10.05am]

<CROSS-EXAMINATION BY MR MOIR

PN4338

JUSTICE GIUDICE: Mr Moir.

PN4339

MR MOIR: Thank you, your Honour.

PN4340

Dr Campbell, prior to the adjournment on Friday, I was leading in to your discussion about the recent regulatory initiatives in France and the United Kingdom, if I could take you to page 24 of your report, this is found in ACTU2, tab 2. Dr Campbell, you make reference on that page to a tripartite committee report which has been delivered, if you like, at a halfway stage. I take it from that, then, that the findings made in the report are by definition, they are not conclusive or definitive?---Yes, yes.

PN4341

And the legislation in effect applies in two parts, doesn't it? I think the first set of provisions came into force on 1 January 2000; is that correct?---Yes.

PN4342

Yes. And those provisions apply only to large businesses beyond a certain employment level; is that right?---Yes, more than 20 employees.

PN4343

More than 20. So the legislation or the 35-hour week, which is the nub of the legislation, that is yet to apply to small businesses of less than 20 employees?---Only the compulsory element of the legislation. I mean, the major thrust of the legislation is to encourage voluntary bargaining at plant level between employee representatives and employers. I guess the point I am making in the report is that even though the compulsory stick element of the legislation has not yet been applied to enterprises with less than 20 employees. The tripartite report suggests that I think the figure is something like more than 40 per cent of small enterprises already have introduced a 35-hour week. So the voluntary component is well advanced; the compulsory element, you are quite right, is only halfway.

PN4344

Yes. And you make reference, back on page 22, to generous financial incentives which have been provided to eligible firms. I take it that those financial incentives include certain reduced levels of so-called security contributions made by French employers; is that correct?---Yes, yes.

**** IAIN GRAHAM CAMPBELL XXN MR MOIR

PN4345

Yes, and are there other financial incentives involved for employers?---No, those are the main ones, as I understand it.

PN4346

I see. And I take it that the purpose of those subsidies, if you like, was to alleviate the financial impact of the new 35-hour week upon French business?---I think that is one of the reasons, although I think the way it was presented initially, the primary reason for the financial incentives was to encourage firms to engage in collective bargaining, and that was building, I guess, on the experience of the Roben initiatives under the previous government, which were purely financial incentives to firms to encourage bargaining around the issue of working time reductions. So I think there was the feeling that that had been reasonably successful, let us keep the encouraging element, the carrot element, but back it up with a stick as well. So I would put both reasons in there.

PN4347

Right, okay. Are you aware - from your research into the French situation, are you aware that it has - the implementation of the 35-hour week, albeit gradual, has it had any impact upon the take-up rate of temporary labour or what you might call - I think described over there as zero hour contracts?---No, no.

PN4348

You are not aware of - - -?---No, I am not aware of it, but that is not to say it did not happen.

PN4349

Right, okay. Are you aware of an active debate which is going on within both French circles and without about the effectiveness of the 35-hour week legislation in meeting its aims?---Yes, I think I am more or less aware of it, yes.

PN4350

Yes. And one side of that debate is, of course, the argument that the new regime will or has led to increased employment growth and improved productivity, but another side of that debate is that employment levels have hardly increased and that it has led to greater irregular work contracts for employees?---Yes, I would not quite put it like that. I mean, it is probably not a two-sided debate; it is probably three or four-sided. The unions, or at least some of the unions, have critical positions. Some of the unions have quite supportive positions, and then

**** IAIN GRAHAM CAMPBELL XXN MR MOIR

there is the employers who themselves split between those who are perhaps more accommodating of the legislation and those who remain vociferously opposed. Now, the argument about employment generation is always, as everyone I guess is aware, is always a hairy one, because how do you determine what the effective of regulation is independent of what the effect of a business cycle upturn is. And I think everyone recognises that in France of course you have had pretty strong business cycle effects over the past couple of years. There have been pretty strong employment growth; partisans of the legislation are saying that really the legislation has helped at least a fair part of that employment growth. Those who are opposed to the legislation perhaps would not quite put it in the sense of saying there is no employment growth. They are saying there is employment growth, sure, but it is not due to the legislation. And then really the unions have got quite complex positions as well, and they tend to complain perhaps a little bit more, or at least those that are critical, they tend to complain a little bit more about the effects on the employees.

[10.10am]

PN4351

So, what are the nature of those concerns that you understand those unions have about the effects on employees?---Well, it was always the intent of those who designed the legislation that the working time reductions would be in exchange - well, the working time reductions would be achieved through plant level or industry level collective bargaining. And there were a series of complex aims associated with that. One aim was to encourage collective bargaining, full stop, so that was pretty straightforward. But the other aim was to encourage trade-offs. The workers were going to get benefits in the form of reduced hours, but there were to be, in the eyes of the Government, certain trade-offs. Now, the trade-offs would be, (a) wage moderation in the short to medium term. Now, this is the conventional, of course, European way of doing work sharing, with trade-off reductions for wage moderation. And then, secondly, there would be some kind of exchanges on flexible working time arrangements. Some of the unions, even from the start, were very, very hesitant about the idea of having to be encouraged to trade-off flexible working time arrangements against reduced working hours. And, as I understand it, that is particularly true of the Force-Ouvrier unions, and to some extent also of the CJT, the more mainstream Communist union.

**** IAIN GRAHAM CAMPBELL XXN MR MOIR

PN4352

And what are the nature of these flexible working arrangements that you are talking about, that some unions have had concerns about as being involved in the trade-off?---Well, there is a sort of panoply of things. I am just trying to think of perhaps some examples. There is always the problem, of course, around averaging hours. This is always a component, and a growing component of working time practices in many countries.

PN4353

Right?---Now, the general feeling seems to be, you know, there is nothing wrong with them in principle, but they need to be fairly carefully controlled. So at plant level there tends to be a fairly - concern about averaging hours arrangements if they are not adequately guided and controlled.

PN4354

Would one example be working outside of what are traditionally regarded as standard hours, 9 to 5, Monday to Friday?---I mean, possibly. I just can't remember the concrete examples, but it is an opportunity for the employers and the employer associations in France to put forward whatever they feel would be good flexible working time arrangements, and then it is to be bargained out with the unions.

PN4355

So is it fair to say, then, that the debates which you have said are multi-faceted, the debates over the impact of the 35 hour week in France, they are likely to persist long into the future?---No, I think we are getting a kind of preliminary assessment, and we are likely in the next couple of years to get a reasonably final assessment. As I stress in the report, the preliminary assessment is significant, in the sense that when the legislation was introduced or being designed and debated in France in '97/98, the predecessor to MEDEF, the main employer confederation, argued very vociferously that this would destroy jobs, and would destroy productivity in French industry. Now, it is pretty clear that that has not happened. And their position, I guess, has shifted a little bit to say, well, okay, the legislation has been saved by the economic upturn: otherwise if there had not been an economic upturn, maybe it would have done more damage. But I think you can say pretty certainly now that those early dramatically pessimistic prognoses about the effects of the legislation are quite clearly wrong.

**** IAIN GRAHAM CAMPBELL XXN MR MOIR

PN4356

I wasn't putting that issue to you. Rather, I was simply putting the question whether the debates over the impact are likely to persist well into the future. Given that you have acknowledged the legislation is yet to flow on to the majority of small businesses, given that the tripartite committee's findings, as you said, were not conclusive or definitive, and given that you are aware of the ongoing debate, surely then the debates about the impact, the precise impact will persist well into the future?---Debates in certain issues will persist, probably for ever and ever. The debate on the employment effects will probably go on for ever and ever, as indeed they have over the previous ones. But we can make some conclusions.

[10.15am]

PN4357

If I could turn now to the section on the United Kingdom, which begins on page 26, the working time regulations in the UK, they came into force I understand on 1 October 1998?---Yes.

PN4358

So they have been in place now for over three years. That is somewhat longer than the Aubry legislation in France, you would agree?---Yes.

PN4359

And I think like the situation in France there is a - or there was - no, sorry, I withdraw that. The legislation came into force across the board, didn't it, in the UK? I don't think there was a grace period for small businesses?---No, not that I am aware of. That is an interesting issue.

PN4360

All right. So, given that the legislation in the UK, it has been in place for over three years now, when it came into force it applied across the board, would you agree that you should be able to assess the impact of that new regulation in the United Kingdom better than say the legislation in France, given all of those factors I have identified?---I am not quite sure - I mean, I suppose the difference between France and the UK in this respect is that the French and perhaps as a result of a tradition in France, tend to bring in the legislation and enforce it pretty well straight away. The British have a much more softer, softer approach to regulation with a lot of consultation, a lot of sort of, I guess, urging on of firms,

**** IAIN GRAHAM CAMPBELL XXN MR MOIR

making sure that they understand the legislation, guiding them in the right direction, so there is not very much, as I understand it in the UK, much enforcement activity in the first couple of years of the working time regulations, and indeed, this has been a bit of a complaint on the part of many of the people who looked forward to the results of that legislation, is that it hasn't been properly enforced, the British are taking this very softly, softly regulatory approach.

PN4361

Yes, but there is - as I understand it there is an active inspectorate engaged in France to police the new legislation. There is nothing of that kind, is there - - -?---No.

PN4362

- - - in the United Kingdom, is there?---No. In fact I am not quite sure who has the responsibility for enforcement.

PN4363

All right. But just coming back to my question earlier on then, given that the laws in the United Kingdom have obviously been in place for a degree longer than those in France, just on that dimension alone, it is fair to say that we should be able to assess their impact better than the new regulations in France?---No, not really. I guess I am arguing it as a de facto transition period, even if there is not a de jour transition period in the UK, there is the intent that there will be a transition period in the UK, and in fact it is probably still going on in my opinion, so it is a pretty protracted transition period.

PN4364

Okay. Now, you seem to be on page 26 of the report, Dr Campbell, and correct me if this is not a fair characterisation, but you seem to be quite explicit there about what the impact of the UK working time regulations has been so far. For example, you make reference to surveys of employers which in general tend to indicate that the new regulations have so far had little impact. Do you see that?---Yes, yes. I am summarising a recent report from the Department of Trade and Industry.

PN4365

Yes. And then you go on to proffer a number of reasons for the reported lack of impact. One of those reasons is the use of individual opt-out agreements - - -?---Yes.

**** IAIN GRAHAM CAMPBELL XXN MR MOIR

PN4366

- - - United Kingdom. Now, these individual opt-outs, if I could use that expression, they are allowed for under the European Union Working Time Directive, aren't they?---Yes, although the UK was the only country in the European Union to pick up that opportunity to use them, but it is allowed.

PN4367

And these opt-outs function in a fairly informal manner, don't they? They are based purely upon a simple written agreement between the parties. The agreement, for example, doesn't have to be registered, does it, or approved by any external body?---I would have to check, but as I understood it, it did have to be registered.

PN4368

What, it had to be - - -?---But you may very well be right, but I am just not sure - - -

PN4369

You are not sure?---No.

PN4370

VICE PRESIDENT McINTYRE: Mr Moir, isn't this the point we raised last week? What the UK legislation says must just be a matter of record, mustn't it, that you can direct our attention to?

PN4371

MR MOIR: That is right, your Honour. I am just leading up to another point. I won't be too much longer.

PN4372

And you go on to say, Dr Campbell, that in areas where workers - this is on the same page, 26:

PN4373

In areas where workers are on low wage base rates and are dependent on very long hours of paid overtime in order to achieve a satisfactory income, there would, indeed, be pressure from employees to use individual opt outs.

**** IAIN GRAHAM CAMPBELL XXN MR MOIR

PN4374

So you are suggesting that employees in the United Kingdom have actively sought out such individual opt out agreements?---I am suggesting that it is likely in at least some cases of individual opt outs.

PN4375

Yes. And those areas where the workers are on low wage base rates, do you know what areas of British industry you are talking about there, or are being talked about there?---Well, sections of manufacturing industry, sections of the transport industry.

PN4376

Now, further down that page, page 26, you say that - - -

PN4377

JUSTICE GIUDICE: Just pardon me for a moment. Dr Campbell, I thought transport were exempted, or some parts of transport?---Some bits, you know, long distance lorry drivers I am referring to, I guess.

PN4378

Long distance. I see, yes. Not the whole industry. Sorry for the interruption.

PN4379

MR MOIR: Thank you, your Honour.

PN4380

And then further down that page you go on to say, Dr Campbell, that:

PN4381

The regulations have not been designed to tackle the entrenched British culture of long hours of paid overtime.

PN4382

When you make reference to that entrenched British culture are you referring to Britain generally, or particular industries?---Well, I think it is heavily concentrated in particular industries.

PN4383

Right. But nevertheless it is a pervasive element of British culture. Is that also what you are suggesting, a strong work - - -?---Yes, a workplace culture, yes.

**** IAIN GRAHAM CAMPBELL XXN MR MOIR

PN4384

All right. And given that obviously the working time regulations in the UK have had little impact, you know, according to all the evidence so far, do you think that was, in fact, deliberately intended by the UK parliament?---I think there was the intention to make it a reasonably cushioned impact, but I suppose - I mean, as I say in the report, I am reasonably - - -

PN4385

JUSTICE GIUDICE: Mr Moir - sorry, Dr Campbell. I am not sure the witness can really help us with what the UK parliament intended. I suppose you can ask the question, but I don't think it is going to shed much light on anything.

PN4386

MR MOIR: Yes, I take your point, your Honour.

PN4387

VICE PRESIDENT McINTYRE: They have second reading speeches and explanatory memos too.

PN4388

MR MOIR: Yes, that is right, your Honour, certainly.

PN4389

All right. So you are saying that the regulations have deliberately, or they have had a cushioning impact, they have not been designed to deliberately tackle the entrenched overtime culture. Does that somewhat contradict what you say earlier on in the report, Dr Campbell, about the various regulatory initiatives? And I am referring in particular to page 3 and also page 2?---I am sorry, you will have to direct me.

PN4390

Yes. At the bottom of page 2, you say there that:

PN4391

Other countries have successfully avoided lengthening work hours through regulatory initiatives.

**** IAIN GRAHAM CAMPBELL XXN MR MOIR

PN4392

And then you nominate France and the UK, and you say that those initiatives have been successful. Given that the UK regulations have clearly had very limited impact, it is not quite fair to say that, is it, to make such a broad sweeping statement?---Well, I argue that they have had a limited impact so far, and that even the limited impact that they have is the sort of seed of what is likely to happen in the future. And I think I am in accordance probably with the majority of British researchers in that respect, in that they say, look, individual opt outs are not a long term solution for employers or employees in the UK. We are going to have a tougher enforcement regime in the future. Employers are starting to think, well, long hours are probably a little bit illegitimate, let us look at sort of how we can re-organise work at the workplace in order to abide by the spirit as well as the letter of this legislation. I mean, I say limited impact so far, but there is still an impact, and we are likely to see a broader impact in the future. So successful, yes, I take your point. Maybe I should have said successful more in prospect rather than in present.

[10.25am]

PN4393

So where you say, at the end of the third paragraph on that same page:

PN4394

It is likely that the trend towards increases in extended hours will soon be reversed in the United Kingdom.

PN4395

That also has to be taken with some significant qualification?---Well, that is my judgment.

PN4396

Yes. So you believe that sentence should be qualified now; is that what you are saying?---No. No, I am not. Sorry, just show me the sentence again, will you?

PN4397

It is the end of the third paragraph on page 2?---Page 2.

PN4398

Final sentence?---Yes. I am saying that it is likely that the trend toward increases in extended hours will soon be reversed in the UK. Yes. No, that is my judgment.

**** IAIN GRAHAM CAMPBELL XXN MR MOIR

PN4399

That is your judgment?---Yes.

PN4400

Despite all the evidence about the limited impact and the regulations not tackling the entrenched culture?---Yes.

PN4401

Okay. Wouldn't you say that the UK experience so far, surely doesn't that tell us that a prescriptive approach to working hours is unlikely to be either successful or workable in the face of an entrenched culture of overtime, whether that be within particular sectors or throughout the economy?---No, for those very reasons that I have already pointed to. Although I see, and most researchers in the UK see, a limited impact so far. I and most researchers in the UK expect a broader impact in the near future.

PN4402

Now, Just going back to the survey data which you rely upon, Dr Campbell, to undertake your various comparisons. During examination-in-chief from Mr Marles you were asked about the difference between the establishment based surveys and the household surveys. And it is a point which is made by Professor Wooden, of course, and your response about that difference was that you didn't think there was anything in it at all, those different types of survey sets. Yet I am just curious, Dr Campbell, because it appears to me that when you were critiquing, if you like, the witness statement by Mr Pensabene, and you were critiquing his comparisons across the various countries, and you were using somewhat colourful language, such as doozey and outrageous, I think were the words used, you yourself were criticising the analysis undertaken by Mr Pensabene, in part at least, because the data he relied upon was based upon in some cases establishment surveys, and in other cases household surveys. So surely that criticism which you have directed at the analysis of Mr Pensabene applies equally to yours?---I thought when I gave a number of reasons why I thought there was nothing in Professor Wooden's comment, and my first point, as I understood it, was that the OECD data does not involve a choice between household and establishment surveys. It involves in the main household surveys, and then there is a minority of countries which use household surveys plus establishment surveys. So that kind of problem, it seemed to me, that was one reason why it didn't arise in the case of this data. The problem, whether it is significant or not so significant, does arise in the case of Mr Pensabene's data,

**** IAIN GRAHAM CAMPBELL XXN MR MOIR

because if there is a clear division there between data which is based on establishment surveys, and data which is based on household surveys. There is no attempt to correct for the difficulties of establishment data and Mr Pensabene's data by supplementing with household data. It is either a brutal choice between establishment data or household data in his case, but not, I am arguing, in the case of the data with which I am concerned.

[10.30am]

PN4403

Doesn't the data relating to Japan, for example, doesn't that come exclusively from establishment-based surveys?---No.

PN4404

You are quite sure about that, are you?---Well, let us check, let us look at the footnote, and - in the OECD table, you have got it there. Is it the right - what does it say about Japan?

PN4405

Well, I am looking at - - -?---I haven't, I am sorry, got it. Could I have a look at the relevant table from the OECD Employment Outlook?

PN4406

All right. Well, I am looking at page 30 of the report, the Occasional Paper Number 45, which you use as a basis for - - -?---Okay, yes, I haven't unfortunately got a copy of that.

PN4407

All right. Well, I can read out to you what it says, for example. In relation to - it is under the heading: Sources and Definitions, Japan:

PN4408

Japan. Data for total employment are Secretariat estimates.

PN4409

I notice the word "Secretariat estimates":

PN4410

..based on data from the monthly labour survey of establishments extended to agricultural and government sectors and to the self-employed by means of the labour force survey.

**** IAIN GRAHAM CAMPBELL XXN MR MOIR

PN4411

?---Exactly. This is precisely my point. This is a mix of establishment survey data and household survey data.

PN4412

JUSTICE GIUDICE: Yes?---Carefully - - -

PN4413

MS BISSETT: Sorry, your Honour, could we just clarify what document is being read from?

PN4414

MR MOIR: Yes, certainly. It is the OECD Occasional Paper Number 45.

PN4415

MS BISSETT: Has that been provided?

PN4416

MR MOIR: Well, it is cited by Dr Campbell in his report and it is the basis for the first table which is attached to his report. Attachment C, table 1?---But surely you concede that my point is exactly right, this is a mix of establishment-based data and household survey-based data, on exactly that reading that you have given me of the Japanese data. I mean, the other thing to keep in mind is of course the OECD is continually tinkering with this data. It is trying to make a set of series which are sort of broadly comparable over time, and this is why it sort of tries to put together where in countries where there is establishment data it tries to put it together with household survey data. This is not the case with the ILO manufacturing sector data, so if it is a problem it is much more of a problem in the case of the ILO data.

PN4417

Right. So you don't agree that even if there is on the one hand household surveys being used and then on the other hand a mixture of household and establishment-based surveys being used, you don't concede that that in itself would give rise to data inconsistency?---It might. It is a question of the what the size of the inconsistency is.

**** IAIN GRAHAM CAMPBELL XXN MR MOIR

PN4418

Yes?---And I am saying that the effect of supplementing establishment level data with household survey data narrows that inconsistency as we can see in the case of Finland. My stronger point, of course, is the point that this is only a problem, of course, in the case of unpaid overtime, and so, you know, I am suggesting that those countries which do use establishment level data or have at least a component of establishment level data in the OECD tables are not those countries in which you would expect significant amounts of unpaid overtime.

PN4419

Yes. So you are saying that it might, that it is possible, and you don't know exactly what the degree of inconsistency is introduced through the

PN4420

various survey methodologies?---No. I suggested to Mr Marles I hope relatively clearly that we have got a test of that, you know, just in the case of Finland, where you have got two series of data in one table, one if which is constructed according to a household survey data and one of which is constructed according to this mix of establishment level data and household level data. Now, I could cite a number of other examples as well, because you can get data on different series, but I just thought, let us stick with that, there is an example of Finland of the difference that it makes in the case of one of those countries. It is a difference of on average about two per cent. It is true, establishment level data supplemented by household level data in the case of Finland does underestimate, but it underestimates by two per cent. It is not a serious point. Now, we could do the same, I think, with at least some of those other countries. Sweden I think has got a mix of household level data and establishment level data. I haven't bothered to check up, but I know that Eurostat produces figures which would be purely household survey based. We could maybe make a comparison on those and measure the difference. But, you know, I am just making the point that there is no reason to really taken Professor Wooden's point seriously in the case of these data, or sorry, we should take it seriously of course, because he is raising a serious suggestion of distortion or bias, but I am trying to argue through the reasons why it doesn't apply in this case.

PN4421

Yes, but you really don't know the degree of inconsistency which is being introduced, and really you are just seeking to rationalise that, Dr Campbell, aren't you?---I do.

**** IAIN GRAHAM CAMPBELL XXN MR MOIR

PN4422

By saying that it is of no moment, it is of no significance at all, completely discarding or rejecting Professor Wooden's point?---I reckon I can get closer to what the inconsistency is than Professor Wooden did with his estimates of 20 per cent or 8 per cent or whatever they were.

PN4423

Yes. Well, I am not sure that answers my question, but I will leave it there. Thanks, Dr Campbell.

[10.35am]

PN4424

JUSTICE GIUDICE: Yes, Mr Bates.

PN4425

MR BATES: Thank you, your Honour

<CROSS-EXAMINATION BY MR BATES [10.35am]

PN4426

Dr Campbell, I represent the Australian Chamber of Commerce and Industry, just so you know where I am coming from?---Thank you.

PN4427

First of all, I would like to refer to your paper, Cross-National Comparisons, as contained in ACTU exhibit 2, tag 2. In that document, I would like to take you to page 3, in the final paragraph, where you say:

PN4428

In Australia, as in most other advanced capitalist societies, average working hours declined up until the end of the early 1980s.

PN4429

Is that correct?---I think - I mean, I am trying to insist all the time that I am interested in average working hours of full time persons. Can we argue, as I do there, that average working hours for all persons declined up until the early 1980s. I suspect so, yes. I would have to, I think - I would double check, I think, with - I would have to double check. But, you know, that is my understanding.

**** IAIN GRAHAM CAMPBELL XXN MR BATES

PN4430

But you understand the reason I ask you - - -?---No, I don't.

PN4431

- - - because it does appear to be confusing?---In what sense, I am sorry?

PN4432

Well, what it refers to, and you have just alluded to that?---Yes.

PN4433

Okay, thank you. Can I take you to page 7. There you have suggested, or in your view, that Australia has experienced a significant increase in average hours for full time employees from a period beginning in the early 1980s?---I am sorry, beginning of paragraph?

PN4434

Page 7. It looks like it is the last paragraph - the beginning of the last paragraph?---"Australia appears to have by far" - I am sorry, can you - - -

PN4435

In comparison with all other OECD countries, Australia appears to have by far the largest increase in average hours for full time employees since the early 1980s.

PN4436

?---Yes.

PN4437

Now, you say "appears to have had"?---Mm.

PN4438

Could you be more certain than that?---In my judgment, based on the limited data that we have, and given that I am comparing us with the UK and the US, those two other countries. The problem, why I am saying "appears", is that we haven't got adequate data on New Zealand. And New Zealand, to me, is probably in that small camp of countries, together with Australia, the UK and the US, which do have this experience of increasing average full time hours since the early 1980s. I am almost certain that is probably the case. And if we compare Australia just with the UK and the US, for which we can get reasonably good data, then I think Australia has the largest increase. But I just have this worry at the back of my mind that perhaps if we incorporated New Zealand into the comparison, it might be up there with Australia as well.

**** IAIN GRAHAM CAMPBELL XXN MR BATES

PN4439

But you don't actually put that limitation into - - -?---I allude to it throughout the report, where I say that Australia is a member of the small group of countries, and I say the UK and the US, and probably New Zealand.

PN4440

I would like to take you to your paper, attachment F, which is entitled, Labour Deregulation in Australia, and to page 1 where you are talking about:

PN4441

Since the beginning of the 1990s, Australia has experienced a gradual but far reaching process of labour market deregulation.

PN4442

Correct?---Yes.

PN4443

You continue to indicate that this labour market deregulation, understood as a removal of external protected forms of labour regulations has proceeded through the dismantling of the distinctive system of award, the main avenue of external protected regulation in Australia for much of the 20th Century?---Yes.

PN4444

On the one hand, you identify growth in full time working hours commencing in the early 1980s: is that not correct?---I am sorry, where are we?

PN4445

On the same document. And I am saying that, on the one hand, then, you identify growth in full time working hours commencing in the early 1980s: is that - - -?---Yes, yes. In average full time hours.

PN4446

You also point to a process of labour market deregulation beginning in the early 1990s?---Yes.

PN4447

If your analysis is correct, does this also indicate that separate forces are at work?---Oh, yes, I think that is right. I have gone into that issue, probably in that paper itself; certainly in a lot of work that I have written, where I have tried to talk about what is happening in Australia in the 1990s, and how does it link up with what was happening in the 1980s.

**** IAIN GRAHAM CAMPBELL XXN MR BATES

PN4448

So, the increases in working hours that you maintain have occurred were already in train before your suggested slow combustion changes: is that correct?---Yes, yes. As indeed I insist on. I am always very careful to say this. These changes went back to the early 1980s. They are not a phenomenon just of the 1990s, which is, I guess, the instinctive response maybe from people on the left of the political spectrum, as to think, well, it is really all the fault of a coalition government, or labour market deregulation in general. I have always been very careful to say that we are dealing here with a phenomenon that goes back to the early 1980s: as indeed we are with casual employment, which is one of the other areas of my research.

PN4449

Can I take you now to attachment D, and in particular to page 221. I think that document is entitled, Working Time: Comparing Australia and Germany. You refer to the patchwork system of awards, and you indicate in particular the extent of the damage done to it so far, was as well as what can be expected from a Coalition Federal Government elected in 1996. And you suggest that the traditional - - -?---This is - sorry - the third paragraph, is it?

PN4450

Yes?---Right, yes.

PN4451

It is actually the - it is the last couple of sentences in the paragraph that starts, "Employer pressures in Australia are expressed"?---Yes.

PN4452

JUSTICE GIUDICE: What sentences are you referring to, Mr Bates?

PN4453

MR BATES: I am referring to the sentences on page 221, your Honour. The first reference I make, "Employer pressures in Australia are expressed" - it is the second new paragraph.

PN4454

JUSTICE GIUDICE: Yes, I have it, thank you. That is the sentence you are referring to at the moment, is it?

**** IAIN GRAHAM CAMPBELL XXN MR BATES

PN4455

MR BATES: I am referring to, in particular, the sentence that starts, "The extent of the damage done to it so far", which is the - - -

PN4456

JUSTICE GIUDICE: Yes, I see it. Thank you.

PN4457

MR BATES: And you are suggesting, are you not, that the traditional system of external protection regulation through a patchwork of awards will not be revived?---Yes. I wonder if that was a bit too premature. That was a bold prediction, wasn't it?

PN4458

You also indicate at page 2 and 3 of your paper that a well designed regulation, parallel regulatory initiatives in Australia are urgently needed, do you not?---Yes, I am sure I do.

PN4459

Are you familiar with the nature of the ACTUs proposed variation to awards in the present proceedings?---I can't claim to be aware of it in detail, but I have perused their claim.

PN4460

You have?---And I have had a look at the - yes.

PN4461

Well, would you be able to offer a view as to whether you believe it is capable of delivering the outcomes that you believe are necessary, given your views about the current nature of the existing award system?---No - well, yes, I am quite happy to do it. I suppose my general feeling is that it is a very modest claim which won't achieve what I would desire from a new set of working time regulations. But nevertheless I think it could be a good step in the right direction. Perhaps, even if only in terms of its symbolic or, I guess, cultural impact, in putting the issue of long hours and the need for regulatory initiatives back on the agenda. And I am sure there is actually substantive bits in there that I would probably give a good tick to as well.

**** IAIN GRAHAM CAMPBELL XXN MR BATES

PN4462

Could I now take you to attachment J, Puzzles of Unpaid Overtime, where you describe an elusive phenomenon, I think are the words you use. You also indicate that this phenomenon is marked by diverse meetings in different countries I presume you are getting to how it is defined: would that be correct?---I am not quite sure. I know I am thinking of the effort I had to undertake to chase up the notion of unpaid overtime in the United States. It involved lengthy correspondence, and Web searches, etcetera. There is actually a term, unpaid overtime, in the United States: but what it means is those people who are illegally being deprived of their rights to paid overtime. It is not unpaid overtime, in the sense that we perhaps use it here in Australia. So I am probably thinking, certainly at the front of my mind, of that kind of effort that I had to put in.

PN4463

VICE PRESIDENT McINTYRE: Sorry, Dr Campbell, how do you say we use it in Australia?---Well, in the sense of extra hours on top of standard hours, but in this case not compensated for directly with a monetary payment.

PN4464

Covered in an annual salary, or something like that?---Yes. This, of course, can get tricky as to what extent an annual salary does actually involve paid overtime or not. But, yes.

[10.50am]

PN4465

Can I take you to page 15 of that paper, where you indicate:

PN4466

One in four full-time employees are indicating in ABS surveys that they usually undertook overtime - - -

PN4467

?---I am sorry, I cannot find this on page 15. Are we in my attachment F?

**** IAIN GRAHAM CAMPBELL XXN MR BATES

PN4468

I do not think it is page 15 actually. I think I have missed it. I will leave that one where it is for the moment. I am actually keen to explore more how you feel about the concept of unpaid overtime and what it really means. And I think it is at page 12 and at page 13 of that document that indicates that employees or in this unpaid or not paid overtime category are in fact those respondents who ticked the box indicating a category other than paid; is that correct?---I am sorry, you will have to direct me to the relevant passage.

PN4469

I think I have actually brought the unmarked copy, so I am not going to be able to persist with that particular quote. But would you agree that the unpaid overtime is also referred to as not paid?---Yes, by me, yes.

PN4470

I want to take you now to right near the end of your paper and ask you a couple of questions first before I get to a question I think that you raise yourself in your paper?---I am sorry, which paper? Is this attachment F?

PN4471

This is the same paper?---Okay.

PN4472

JUSTICE GIUDICE: Is this the puzzles paper?

PN4473

MR BATES: Correct, your Honour. And I will be coming to page 19 of that particular paper in a minute. Would you agree that people who are in the not paid or unpaid category do receive other forms of compensation, or can receive other forms of compensation?---Yes, other rewards or other - - -

PN4474

So time off in lieu would be one of them?---Yes, although I think if that is formalised, I would prefer to say that it is pretty much like paid overtime.

PN4475

Okay. And having payments included in salary packages might be another one of those?---Yes, or faster promotion prospects.

**** IAIN GRAHAM CAMPBELL XXN MR BATES

PN4476

And extra annual leave?---All this is possible, yes.

PN4477

Right. And if I take you to page 19 of your document, right to the last sentence at the bottom of the page, if I can quote:

PN4478

Moreover, there are good reasons for trade unions to be hesitant about any action that would increase paid overtime. Insofar as there is a need for compensation for additional hours alternatives based on TOIL should be available. Indeed there is a general need for action around TOIL to generalise well-designed formal systems, to introduce rules and rights into many variants and to install TOIL as a genuine alternative to paid overtime.

PN4479

Is it correct to say that in that statement you are in fact advocating the enhanced use of alternative to paid overtime which could fall into the unpaid or not paid overtime category?---Well, see, what I am advocating of course if formalised systems of TOIL rather than an informal one. I am sort of saying that those informal ones that we have got around, let us tighten them up, let us introduce rights and rules and, as I suggested to you earlier, I see such TOIL systems, if they are formal, as being more or less the same as paid overtime.

PN4480

Are there not already existing in some award time off in lieu provisions?---I think that is right, yes.

PN4481

And they are also in a number of certified agreements; would you agree with that?---Yes.

PN4482

No further questions, your Honour.

PN4483

JUSTICE GIUDICE: Thank you, Mr Bates. Mr Cole.

<CROSS-EXAMINATION BY MR COLE [10.56am]

**** IAIN GRAHAM CAMPBELL XXN MR COLE

PN4484

MR COLE: Dr Campbell, there are a few questions from the Commonwealth. Firstly, could I ask you to refer to exhibit COMMONWEALTH1. Do you have a copy of that, or can I pass a copy to you?---I am sorry, were they to the two pages of statistics?

PN4485

Yes?---Yes, I should have them here. Yes.

PN4486

Looking at the figures in the right-hand column of COMMONWEALTH1, would you agree that average weekly hours for full-time employees have been fairly flat in the seven years since 1994?---Yes, well, this is - I mean, as I said earlier, I welcome these data - - -

PN4487

Well, do you agree they have been fairly flat since 1994?---No, because this is the point I guess Professor Wooden raises, so we have got to be a little bit careful what sort of adjectives we use. I think the issue here is is there a continuing increase or is there a sort of flatness in that? And I think the only - my feeling would be that if you tested this rigorously - in other words, if you did not take arbitrary starting points, but actually used a line of best fit, perhaps with all sort of caveats and cautions, my suspicion would be that you would find a continuing increase since the early 1980s, perhaps a little bit slower in the late 1990s. So a little bit flatter but not what I would call necessarily flat. And the problem here, taking '94, of course, as the base year - - -

PN4488

Well, we will come to that?---Okay.

PN4489

Now, do you recall in your paper, I am talking about the Cross National Comparisons paper, do you recall at page 7 describing the change from 1998 to 2000?---Yes.

PN4490

And these figures as - and I am looking at the third-last line of the second paragraph - as an astonishing phenomenon?---Where is this?

**** IAIN GRAHAM CAMPBELL XXN MR COLE

PN4491

The second paragraph on page 7 and the third-last line. I will read it to you - in fact the sentence prior to that:

PN4492

On the contrary, as attachment C table 3 indicates, in the two years from 1998 to 2000 an extra 48 minutes was added to the weekly working time schedule of the average full-time employee. This is an astonishing phenomenon.

PN4493

Do you recall describing that change of an increase of .8 of an hour, or 48 minutes over those two years as "an astonishing phenomenon"?---No. I think you are selectively quoting there without giving the rest of the sentence which makes it quite clear that I am referring to the entire trend of increase since the 1980s, rather than that short period of increase during two years. I certainly would not ever refer to an increase of 2 years or a decrease or anything that happens over two years as an astonishing phenomenon. My interest as a researcher is in the long-term rather than in what happens in one or two years, that can be affected of course by quite short-term movements and aberrant background factors.

PN4494

So you would agree that, for example, looking at the trend over, say, a period of seven years would be far more relevant than looking at changes in the last couple of years?---Yes, the best think - I mean, I am stuck a little bit with that data because I only had data for '82 - I in fact had data for '85, which I have not included here - '88, '98, '99 and 2000. And that is what I am working with and that is on which I base my arguments here. It is terrific that the Commonwealth has got annual data and indeed we should work from that now that we have got it.

PN4495

Now, a moment or two - - -

PN4496

JUSTICE GIUDICE: Dr Campbell - just before you leave that, Mr Cole - the "astonishing phenomenon", you say that refers effectively to the whole of the paragraph, the period - - -?---Yes, the lengthening process.

**** IAIN GRAHAM CAMPBELL XXN MR COLE

PN4497

- - - from '82 to 2000, which I think you have dealt with in the first sentence. Is that - - -?---Yes.

PN4498

Yes, thank you. Thank you, Mr Cole?---Because we do not know. I mean, it could have been two years of increase in some other OECD countries. I am making the point about Australians - - -

PN4499

No, no, I just wanted to understand what the paragraph was saying?---Okay.

PN4500

MR COLE: Now, Dr Campbell, just a moment ago you emphasised the importance of the starting date from which comparisons are made?---Sure.

PN4501

In my reading of Cross National Comparisons and in the other papers that you have authored or co-authored, you do not appear to discuss any possible issues concerning the choice of 1982 as a starting point for your analysis. Is that correct, that you do not actually discuss the choice of 1982 anywhere in your work?---I do, but not in this particular paper. I do certainly when I use the data on casual employment. I mean, I am quite happy to go into it, but I think you have probably got a fair point there, that given that I do use '82, I should have justified why I did, and I am happy to do that.

PN4502

Now, are you - these figures in COMMONWEALTH1 and the corresponding figures in Cross National Comparisons for these various years, they are for the month of August; is that correct?---Yes.

PN4503

And August is in the middle of the September quarter, you would agree?---Yes.

PN4504

Are you aware that in the September quarter 1982 gross national product fell by 1.7 per cent?---No.

**** IAIN GRAHAM CAMPBELL XXN MR COLE

PN4505

Are you aware that Australia went into a recession in 1982, indeed a recession that was described in the 1982 National Wage Case decision as:

PN4506

Australia is experiencing the worst economic recession since the 1930s.

PN4507

?---Yes.

PN4508

So you are aware that 1982 was a period of recession?---Yes.

PN4509

Do you think it is methodologically sound when analysing trends in full-time hours to start the analysis from a time of economic recession?---Yes.

PN4510

And would you care to explain - do you think it is also sound to complete the analysis at a time of fairly strong economic growth?---Yes.

PN4511

And would you agree that in an economic recession one of the first changes that typically businesses make in terms of their pattern of utilisation of employees is to reduce overtime?---I think that is probably fair enough; reduce paid overtime.

PN4512

So notwithstanding that you agree that it is likely in a recession that employers will reduce overtime, you still think that starting this analysis in the - at a time of recession in 1982 is appropriate?---Yes.

PN4513

And could you explain your reasons for that view?---Well, I mean, it is a problem if we are confined within the one economic cycle, but given this is a reasonably long time series from '82 to 2001, I do not think - and given that we keep in mind the sort of points that you are raising, I do not think it is a major problem. There are of course quite good reasons why I chose 1982 as the base year. This is the year in which, if you look at the data, the data on full-time hours, this is the year in which we get the turn from the declining full-time hours to rising full-time

**** IAIN GRAHAM CAMPBELL XXN MR COLE

hours. And there is also another reason, that insofar as I cold tell from the UK data, this is exactly the year as well, in which the UK get that turn from a trend of declining full-time hours to a trend of rising full-time hours. So I am not too fussed about the fact that it is a recession, although that might very well have contributed to it being the turning point. But what is interesting, of course, is that you have got a consistent trend since then of rising hours for full-time employees.

[11.05am]

PN4514

Can you point to the data in your material that establishes that 1982 in Australia was, in fact, a turning point for average hours for full-time employees?---It is in there somewhere, not necessarily in the cross national comparisons, but I can't think of it off-hand. In fact, I think it is in the - there was a discussion of this in, I think, one of Professor Wooden's early papers, you know, which is partly why I haven't bothered to reproduce. But anyway, I am sorry. I am thrashing around trying to remember where I have discussed this, or where someone has discussed it.

PN4515

Yes. It is just, Dr Campbell, that I understood your evidence to be that working with certain financial constraints - my words - you were limited in the years for which you purchased data and for which you actually went back to 1982, and I understood you hadn't actually purchased data prior to 1982?---No, no. The data for full-time employees is freely available prior to, I think, 1984, or maybe it is '83. So, in fact, I am just looking at a table here that I drew up the other day. I have got '80 and '81 data, and I am sure you can take about '79, 78, 77. That is all published data, and I think the catalogue number 6204.0. The problem is that since whatever it was, '83 or 84, the ABS, like it did with a lot of data, withdrew several series from publication, and you then had to pay for it. So you are quite wrong. I think the data is freely and publicly available prior to - and, in fact, maybe prior to '82.

PN4516

Well, with that assurance I am sure the parties will look at this matter further in submissions, Dr Campbell. In COMMONWEALTH1, on the second page, you were asked by Mr Marles some questions about those two tables?---Which page are we on, I am sorry?

**** IAIN GRAHAM CAMPBELL XXN MR COLE

PN4517

The second page of exhibit COMMONWEALTH1. And do you recall making a point about the second table, being the table at the bottom of the page, that it would have been better if some analysis had been done about full-time employees in that regard, full-time employees working unpaid overtime rather than all employees?---And I also suggested it would be better if more fundamentally my definition of unpaid overtime was adopted, and we could do the data on that basis. But yes, both points.

PN4518

You would agree that the figures in COMMONWEALTH1 indicate that, taking all employees, that the proportion of all employees working overtime on a regular basis but paid - but working unpaid overtime has slightly declined from 1995 to 2000?---You are referring to the first comment there, are you, in the second table?

PN4519

Yes?---Yes. With your definition of unpaid overtime rather than mine.

PN4520

No. On the same definition of unpaid overtime, which is the ABS category of unpaid. Would you expect a similar declining trend to be evidenced in respect of full-time employees, that is, would you expect, based on your knowledge of developments over this period, that full-time employees as a proportion of - full-time employees working unpaid overtime would have declined as a proportion of all full-time employees working regular overtime?---Accepting that definition of unpaid overtime, yes. I think the probability would probably lie with that, yes, and you would get much the same sort of decline if you looked just at full-time employees.

PN4521

I think you would agree, wouldn't you, Dr Campbell, it would be a matter for submissions in due course, but statistics do indicate that there is also a declining trend for full-time employees.

PN4522

Just coming back to the developments in average hours since 1994, I think you have conceded some flattening in the trend over that period?---Yes. I would want to test it. But my guess would be getting probably a flattening of the rate of increase.

**** IAIN GRAHAM CAMPBELL XXN MR COLE

PN4523

And you would agree that that flattening has coincided with the period that enterprise bargaining has consolidated its position in Australia as the focal point of the wages system?---Yes. Well, that is just a matter of fact, isn't it, yes. We talk about the period since '94 as the period in which - I actually have got a - - -

PN4524

So do you agree with the question I put to you?---No. Well, in fact, I don't, because I have written a recent paper on this questioning the notion that we, in our regime of enterprise bargaining, so it would be very silly for me to agree with that. But I can see the point that you are making. You are making a point here about change in the regulatory system since 1994, and, of course, you know, that is the case. But I certainly wouldn't say that that is a regime of enterprise bargaining that we are in at the moment. And if you like I can refer you to that recent paper that I have given on this topic.

PN4525

Do you mean you characterise the system over the last several years as something other, do you, than enterprise bargaining, you characterise it differently?---I do, yes. I suggest that, you know, really probably in the 1980s we had more enterprise bargaining than we had in the 1990s.

PN4526

Now, Dr Campbell, you were asked some questions by Mr Moir about the changes in the structure of industry over the last 20 years or so. Do you recall those questions?---Yes. Very vaguely, yes.

PN4527

I want to put to you another dimension of compositional change. Would you agree that the last 20 years have been a significant period in terms of changing technology and its impact on the nature of work?---No. In my reading of that literature it is quite clear that despite all the hype of the technological revolution, in fact, if you measure according to different measures of technological innovation, the rate of innovation was much stronger in the 60s and 70s than it was in the 80s and 90s, although obviously we were bedazzled, of course, by new computer technologies which are very good with entertainment purposes.

PN4528

Would you agree or not agree that there have been changes, significant changes in the occupational structure of the work force in the last 20 years?---I think so, yes.

**** IAIN GRAHAM CAMPBELL XXN MR COLE

PN4529

Do you concede that changes in the occupational structure of the work force could be a relevant factor explaining trends in working hours?---I mean, in principle, yes, it is always important to try and get an idea of those compositional effects.

PN4530

In your - it wasn't the purpose, was it, in your paper, Cross National Comparisons, to really look at this issue, that is, the extent to which changes in the occupational structure of the work force might be a factor explaining trends and working hours, that was not the purpose of that paper?---No.

PN4531

And you don't discuss that issue in the paper, do you?---I think I allude to occupational differences, don't I, especially when it comes to overtime? I thought I fairly carefully at last alluded to the fact that you have got concentrations of both paid and unpaid overtime in different parts of the occupational structure.

PN4532

Well, more generally, Dr Campbell, it doesn't appear to me in your material that there is anything other than a brief mention of the issue of compositional change in terms of the occupational structure of the work force in connection with your analysis of trends and working hours. You make only a brief mention of this issue. You haven't carried out detailed analysis, have you, on this issue?---It depends what you mean by detailed. But I am sure there is material in some of those papers in the attachments.

PN4533

Well, have you or have you not examined the extent to which any trend to extended hours is accounted for or may be accounted for by changes in the occupational structure of the work force?---Yes, I always have a bit of a look at that.

PN4534

And where do we find that?---I would have to look around and see if it is any of these papers or perhaps in a different paper. We can make a rough stab if we have got good occupational data, which we should have in one of these papers.

**** IAIN GRAHAM CAMPBELL XXN MR COLE

PN4535

Well, I am content to leave it on the basis that we can search your papers. There may be further references. You would agree that it is a relevant factor to consider, it is a relevant issue to consider in seeking explanations for any trend or extended hours?---Yes, I would check for compositional changes associated with occupation.

PN4536

I think you alluded a moment or two ago to provisions affecting the entitlement to people depending on their level in particular employment structures, as to whether they are entitled or not entitled to payment for overtime?---I am sorry, where is - - -

PN4537

You do refer to that in your paper, don't you, that you were aware that under some awards or agreements in Australia, beyond a certain point in the hierarchy employees ceased to be entitled to payment on an as incurred basis for overtime?---You will have to direct me to the relevant passage. I am sure I allude to it somewhere.

PN4538

But are you aware that there are such barriers in awards? For example, are you aware that in the Australian Public Service, which is one of the awards before the Commission, that there is a barrier in the award, and that people above the barrier are not entitled, except on an exceptional basis, to payment for overtime?---Yes, I am sure I discussed this in that Puzzles of Unpaid Overtime paper, where, indeed, I think that is one of the categories I single out as one of the forms of unpaid overtime.

PN4539

Would you agree that in general terms if there has been a change in the occupational structure of the work force, one way that might be manifest would be that there would be a higher proportion of people above an overtime barrier now than perhaps 20 years ago?---It is entirely possible, and it would be all the more true if that overtime barrier was couched in terms of a flat salary rate, as I believe is the case in at least some awards. And unless that is updated, of course, to take into account real increases in wages, then it is quite possible that even without occupational compositional change you might have more and more people falling above that barrier.

**** IAIN GRAHAM CAMPBELL XXN MR COLE

PN4540

But you would agree that if the barrier itself is updated in a manner commensurate with salaries generally, then if a higher proportion of employees are now above the barrier than below the barrier, say over the last 20 years, that would be an illustration as to how occupational changes may be apparent?---You would have to measure it pretty carefully to make sure there was no - what the barrier was and, indeed, probably there had been no change perhaps in the regulatory mechanism itself. But yes. No, that is - I mean, in principle, if you measure it carefully, then you are entirely right.

[11.20am]

PN4541

Mr Blake took you to appendix J, which is the Puzzles of Unpaid Overtime paper?---Mm.

PN4542

You provide some discussion of time off in lieu arrangements at page 13 of that paper. That is attachment J to tab 2 of ACTU2, and if I could read to you the first couple of sentences of the first complete paragraph on that page, it says:

PN4543

TOIL, that is, time off in lieu, means that additional hours are subject to a promise of compensation with equivalent or perhaps enhanced time off in a future period. Such arrangements are themselves highly diverse and can range from formalised systems in which hours are indeed measured and compensation is indeed likely to be taken to very informal arrangements.

PN4544

And it goes on. Now, Mr Blake directed your attention and you agreed you were aware that there are TOIL arrangements in a number of the Commission's awards. You confirm that?---Yes.

PN4545

You would agree then that if the arrangement is in the award it should probably be considered as a formalised arrangement?---No, I wouldn't necessarily, although that is a good, I guess, presumption. But I would want to look at it pretty closely, what the terms of that provision were.

**** IAIN GRAHAM CAMPBELL XXN MR COLE

PN4546

If I put to you that of the 11 - sorry, of the 14 awards that are the subject of these proceedings 11 contain a TOIL clause and that 10 of the 11 provide for the employee to be paid out if the time off is not taken within a period specified in the award, you would generally commend that situation, would you?---I would like to look at - fairly closely at the provisions themselves.

PN4547

But you would generally support firstly the inclusion of TOIL clauses in awards, you would generally support that?---Yes, as I think I was suggesting in my reply to Mr Blake.

PN4548

And you would be supportive of arrangements that at least at the award level provided for employees to be paid out if they were not able to take the actual time off within a specified period, you would be supportive of that?---I am not quite sure. I mean, I am in favour, as indeed I think the overseas literature is in favour, of having good procedures which allow people to claim that actual time off, have access to it, rather than it just being a sort of a kind of an entitlement which can then be converted into money, I am in favour of it as a working time reduction which people can - are guaranteed the right to be able to claim, and that then starts to of course get into issues of staffing in particular enterprises.

PN4549

So you would be equally supportive at least of TOIL clauses that provide for people to take time off provided in practice people got the relevant amount of time off, you would be equally supportive of those sorts of clauses provided they got the time off as you would be of clauses that allow for the payout if the employee cannot take the time off?---I am not so keen on the clauses which allow a payout, and this is a big issue in Germany where they do have very large formalised TOIL systems and they are finding that people are not able to claim the time off that they accrue, even if it is then paid out, it is not of the benefit to the employee that the time off might have been.

**** IAIN GRAHAM CAMPBELL XXN MR COLE

PN4550

Would you agree with me that on the fact of it a TOIL clause that allows for a payout effectively gives the employee the choice, that is, in the absence of such a clause the employee would have to be paid for the overtime worked. If there is such a clause there is at least the possibility that the employee may achieve a period of time off work?---No. My understanding is that there are persistent complaints even under good formalised TOIL systems that staffing levels are so low in some workplaces and the pressure on the employees is so hard that even though they manage to accrue certain entitlements in terms of rights to time off they feel themselves unable or are in practice unable to claim those rights because of the pressure of work, and that is what I am a bit concerned about.

PN4551

Dr Campbell, at least at the level of the award, isn't it obvious that if the award does not contain a TOIL clause, remuneration for working overtime is going to be by way of payment?---Presuming people are below a barrier?

PN4552

Well - - -?---Overtime barrier?

PN4553

Yes?---I presume so. I would have to have a look at the - - -

PN4554

So there is one, there is one option. If there is a TOIL clause at least at the level of the award it is likely that there will be two options?---You are pressing me a little bit here. I would like to have a look at the particular award provisions.

PN4555

It may be a matter for submissions. A number of people have taken you to the comparison between Australia and Japan in terms of average hours actually worked by employees, and for example, at page 8 you say in the second-last paragraph - well, before we get to the second-last paragraph, you say at the second paragraph what the various figures are for various countries drawn from table 1 in your attachment C?---Mm.

PN4556

And you provide a figure for Japan of 1842 hours? If you refer to attachment C, Dr Campbell, can you look at attachment C?---All right, yes.

**** IAIN GRAHAM CAMPBELL XXN MR COLE

PN4557

Do you see there is no figure for Japan in the column headed: 1999?---No, although there is data now.

PN4558

So you agree there is no figure for Japan in the 1999 - - -?---Not in my tables, although we now know what the figure is according to the OECD.

PN4559

I suggest to you that what you have actually quoted there is the figure for Japan for 1998?---Right, okay, yes, which I haven't included in the table.

PN4560

And so the observations you make regarding the comparison between Australia and Japan in the most recent period are actually for different years. You would agree with that?---I would say so, yes.

PN4561

If the Commission pleases, we have no further questions.

PN4562

JUSTICE GIUDICE: You have cross-examination, Mr Watson, do you?

PN4563

MR WATSON: I do, your Honour.

PN4564

JUSTICE GIUDICE: Yes. We might adjourn for a couple of moments.

SHORT ADJOURNMENT [11.30am]

RESUMED [11.40am]

PN4565

JUSTICE GIUDICE: Mr Watson.

<CROSS-EXAMINATION BY MR WATSON [11.40am]

**** IAIN GRAHAM CAMPBELL XXN MR WATSON

PN4566

MR WATSON: Thank you, your Honour. Dr Campbell, I want to ask you some questions about annualised salaries. You are aware that certain jobs for a very lengthy period of time would have been on the basis of - employment on the basis of an annualised salary rather than a base weekly amount plus overtime?---Yes.

PN4567

Thank you. And you are aware that especially in the last 10 to 20 years there has been a trend to change jobs which have been based on a base rate plus overtime to an annualised salary basis?---Yes.

PN4568

And are you aware that that has been a significant trend in Australian workplaces?---I must admit I just don't know. I mean, this is a really important area of research, and when I was at Monash University about three years ago I tried to get a research project going on averaged hours arrangements or annualised hours arrangements and I tried to keep a pretty close track on whatever evidence we have about Australian workplaces, and it is not very, very much, although we desperately do need some research and some evidence.

PN4569

But your knowledge is based on what you can glean from published research papers?---Yes, plus I have got a Masters student who is doing a project on averaged hours arrangements, and I try to keep in touch with what she is able to dredge up or dig up, and that is often texts of agreements. She has sort of gone through the Adam data base and tried to look at all those sort of things.

PN4570

Well, you would understand that those of us such as those in this room who have practice in the area would commonly come across those sort of concepts in the course of our work?---Yes.

PN4571

Are you aware that where there is a change from a base rate plus overtime regime to an annualised salary regime there is often a calculation made as to the incidence of overtime in the past and an amount negotiated in respect to that knowledge of overtime utilisation incorporated into the annualised salary so that employees are paid the annualised salary regardless of how much hours they actually work, whether they actually work that many hours or not. Are you aware of that?---Yes.

**** IAIN GRAHAM CAMPBELL XXN MR WATSON

PN4572

And would you accept, or are you aware that the rationale of those sort of changes includes attempting to give benefits to the employer and employees?---No, I am not quite sure about that.

PN4573

Well, are you aware for example that the underlying notion is to attempt to change the position where overtime may act as an incentive for employees to work less efficiently so that they may perform their duties and receive overtime payments to an incentive for people to work more efficiently during their normal hours so they can finish the work that needs to be done and still receive the payment that is incorporated into their annualised salary, but spend less time on the job?---Yes, I have heard that argument before, yes.

PN4574

Yes. And that if it is successful in achieving these objectives would obviously benefit the employer in the work that is performed, the efficiency of work performed during working time, and provide benefits to the employees by less hours without necessarily a reduction in pay?---Yes. I am not - I am just not convinced about the long-term benefits for employees under those sorts of arrangements, and there is lengthy literature overseas about what sort of procedures you would need in order to make sure that such arrangements do actually benefit employees, and my understanding about what we tend to see in Australia is that they lack those kinds of - those guidelines or those sort of framework conditions, so I am - - -

PN4575

Are you aware that - are you aware that the trend in relation to the translation that I have been talking about appears to be in one direction, appears to be changing the direction I have described, are you aware of any examples where people have translated back from annualised salary back to base plus overtime arrangements?---I think there are examples of that overseas, but I mean, I think we lack the research in Australia to be able to say one way or the other.

PN4576

Would you accept that in the example that I have given to say that an employee who may work some hours in excess of the nominal hours it would be an inappropriate description to say that that work was unpaid?---In that - I mean, could you perhaps specify that case, where you have got a guaranteed number of hours being paid for at overtime rates incorporated into the loaded base salary?

**** IAIN GRAHAM CAMPBELL XXN MR WATSON

PN4577

Let me give you a specific example. In the course of establishing an annualised salary based on previous overtime trends, 10 per cent overtime has been built into the annualised salary. 10 per cent of hours paid each and every week, say in the order of four hours, something of that nature. In one particular week an employee works two hours overtime. Now, in that example I would suggest to you the employee is paid for that overtime. In fact he is paid more than he would have been paid under the previous regime, so it is somewhat misleading, would you not agree, to describe that as unpaid overtime?---I think you have got a strong point there. I am just not quite sure how far I would go down that road, but I mean, I do signal it in my paper, of course, that the OECD when it noted the increase in unpaid overtime in countries like Australia or in particular Australia did put a little footnote in saying, well, it is possible that annualised salaries are partly responsible for this increase, and certainly when I have given discussions overseas about unpaid overtime in Australia this has always been a point that has been debated out in the audience as to, well, what effect would you expect from annualised or averaged hours arrangements, and I suppose my answer has always been that I do think it is a good point, and it should always be signalled, and we desperately need more research on it. My sentiment or my judgment is that it is not a major component of what we see in Australia as this rise in volume of unpaid overtime.

PN4578

But you are aware of the trend - - -?---Yes.

PN4579

- - - for translation in the sort of example I have given?---Yes.

PN4580

And are you aware also that in the changing composition of the workforce there could well be more jobs of an annualised salary nature and less jobs of a base rate plus overtime nature?---Yes. It wouldn't be due to occupational changes. It is due to - it is a regulatory change, isn't it, at the workplace.

**** IAIN GRAHAM CAMPBELL XXN MR WATSON

PN4581

Well, it could be based on occupational changes as well. If manufacturing jobs for example have traditionally been more based on base rate plus overtime and a lot of those jobs have disappeared, and if other jobs have been created which are more of an annualised salary type, then that would account for some change in the incidence of annualised salaries?---If that is the case. But we know from the UK of course that annualised or averaged hours arrangements are concentrated in fact in manufacturing, so this is a very I guess - I mean, I think it is an important area. It is a very murky area in which, you know, we would want to have figures for, okay, how many employees are under an averaged hours arrangement, and what exactly are the provisions of those arrangements in terms of hours that they are obliged to work?

PN4582

You mentioned the UK. If you have got - the sort of example I have given you of a change in the nature of payments from base plus overtime to annualised salary, and you have got someone in the UK is asked as part of the survey that is conducted there about overtime how many paid hours of overtime did they work last week, I think you said was the question they are asked, depending on how much they understand as to the makeup of their annualised salary, and they may say that yes, they worked two hours and it was paid, because my annual salary pays me for any overtime I work?---Then my understanding of the forms of averaged hours arrangements that you get in the UK is that they tend to be a bit different from what you get here, that there is no assumption that the - there is usually a standard to the number of annual hours that you do. It is not with overtime built in. It is a standard, and then there is a fluctuation from week to week. The employer gets the right to vary those hours from week to week, but then there is still a measuring of the extra hours over the course of the period and they are paid at overtime rates, so the employee can pretty much look at extra hours that he or she is doing and actually can say, yes, those are extra hours, and yes, they will be paid for as overtime. They are not the annualised salaries that we tend to get here. They are more sort of simple - I mean, there is a guarantee of a salary, but they are more simple averaged hours arrangements.

PN4583

Are you saying that is the only incidence of - that is the only type of annualised arrangements that exist in the UK, are you?---No. I am saying that in the UK there is more of those than what we are discussing here.

**** IAIN GRAHAM CAMPBELL XXN MR WATSON

PN4584

If I were to suggest to you that the type of annualised salary arrangement that I have described where employees receive the annualised salary regardless of the hours they work including the translation from a base plus overtime arrangement is prevalent internationally, including the UK, do you have any basis to suggest that that is not true?---I would like to see the evidence for that.

PN4585

Yes?---It is certainly not true in France, and I would like to see your evidence for the UK.

PN4586

Yes. Do you have any basis to say it is not true in the UK?---No, no.

PN4587

If you took that example, you took the example that I am giving you and you had an employee completing the survey as conducted by the survey authorities, depending on the understanding the employee has of the rationale for payment, the employee may say, those hours I worked last week were paid. If it were I suppose the translation was a long time ago and it has faded into memory they may say, well, it is unpaid, mightn't they?---I basically concede your point. There is just maybe an argument about how significant it is in the context either of Australia or of the UK.

PN4588

Well, it just shows that all of these figures, regardless of the questions that are asked, have to use your word, a murky aspect to it, do they not?---Yes, and the test of a researcher is always to work out, well, how significant is the murky factor?

[11.55am]

PN4589

JUSTICE GIUDICE: That is a point that you make in your paper, the Puzzles paper, and which you have maintained fairly consistently, you know, over the period you have been cross-examined?---Thank you.

**** IAIN GRAHAM CAMPBELL XXN MR WATSON

PN4590

MR WATSON: And I think you say in the Puzzles paper, which I think is attachment K - no, I think it might be the one after attachment K - sorry, the one before. Sorry, it is attachment K, but that is not the Puzzles paper, that is the clarification paper. The pages don't seem to be numbered, but the third page, the bottom paragraph, you say:

PN4591

Direct data on paid and not paid overtime is only available in a few countries, eg, UK and Australia, and even in these cases the data are not entirely transparent.

PN4592

JUSTICE GIUDICE: Sorry, Mr Watson, I don't know which one you are looking at.

PN4593

MR WATSON: Sorry, your Honour. It is attachment K, document headed Clarification of Concepts and Discussion of Data Sources, the third page, final paragraph.

PN4594

JUSTICE GIUDICE: What is the paper called?

PN4595

MR WATSON: Attachment K, Clarification of Concepts and Discussion of Data Sources. It is after attachment J, your Honour.

PN4596

Indeed, apart from the UK and Australia that you identify, the two countries where there is at least some data, are there any others that you are aware of where data exists?---Germany, where there is data in what is called the socio-economic panel, which is a longitudinal survey in Germany.

PN4597

Now, when you say that overtime is not paid or unpaid, you don't use that in a pejorative sense, do you, in the sense that something is outstanding or owing by the employer to the employee in respect of this overtime?---No, not necessarily. It is an analytical distinction in the first instance.

**** IAIN GRAHAM CAMPBELL XXN MR WATSON

PN4598

And it may, indeed, be paid or recognised, may be paid with money or recognised in some other way, and it is simply, you attempt to try to categorise different working arrangements rather than use it in a pejorative sense?---Yes. My first - especially in that Puzzles of Unpaid Overtime paper, my first task is really just to try and sort of clarify the concept and discuss the different forms of unpaid overtime, and then we can get - I mean, the evaluation is a fair way down the track.

PN4599

Now, in a number of areas of your paper you are critical of the lack of regulation of working hours in Australia. Do you accept that that on your part involves value judgments being made about that particular topic?---I am sure it does. Just, you know, I don't steer clear of policy discussion which involves saying one alternative is better than another alternative. So in that sense, you know, we have all got a bit of a responsibility of citizens as well as researchers to get eventually to a stage of evaluation. When I say though that the regulatory system in Australia is porous, I mean, I see that more as a kind of analytical point. It is something that we contest. I mean, perhaps people might argue that porosity is precisely a virtue, that this is something that allows employers to determine wages and conditions according to competitive pressures, and will enhance the long term prosperity of Australia.

PN4600

If you look at the second last paragraph, page 21 of your primary report, cross national comparisons. So the problem with the Australian system is not only to do with its inherited weaknesses, it is also a result of a striking failure to modernise the system in the past 20 years.

PN4601

Australia together with its trans Tasman neighbour appears unusual in cross national comparison in the extent to which it succumbs to neo liberal notions of labour market deregulation. Policy makers in Australia have grafted on to an inadequate inherited system of awards and even more inadequate system that fosters small islands or single employer collective agreements and a sea of individual contracting. The effect is to widen the gaps within which very extended hours can emerge.

**** IAIN GRAHAM CAMPBELL XXN MR WATSON

PN4602

May I suggest to you that paragraph indicates a number of value judgments as to the matters that are addressed there?---It sure does, yes. I am pretty - I have stuck my flag in the ground there, haven't I?

PN4603

Yes. But other academics or researchers may look at the issue of longer hours, they may have a different view as to whether the trends insofar as they can be identified and analysed, whether they constitute a problem or not?---Mm.

PN4604

That was a yes?---Yes.

PN4605

And they may have different views as to what factors need to be considered in terms of the adequacy of regulation?---I would fully expect there to be a debate on that.

PN4606

Now, at page 19, if you turn back one page, the second paragraph, right in the middle of the paragraph there you say:

PN4607

However, the trends in Australia appear much stronger than the trends in these other two countries.

PN4608

And you are talking about the US and the UK there?---Yes.

PN4609

Now, I just wondered, by reference to table 2, which is in attachment C of that paper, and I understand from your evidence your point is that it is important to focus on full-time employees rather than employees generally?---Yes.

**** IAIN GRAHAM CAMPBELL XXN MR WATSON

PN4610

If I look at the UK there, and I just want to understand that I am reading this correctly, if I look at the change attributed to the change in hours of full-timers, which is the second column with numbers in it, the UK has figures for 1983 to 1993, a period of some 10 years, and it appears there is a change there in that 10 year period of 3.8, which does appear to be more significant than the change in Australia, more significant number, where Australia also involves a more significant period. Do you accept that?---No. I am not quite sure - it is a - I would have - could you perhaps go over that?

PN4611

Yes?---Why do you think 3.8 is more than what we have in Australia?

PN4612

Well, the figures you received from the Commonwealth that you said were a valuable new piece of information which must supersede the consideration of figures in Australia that you had previously identified, have for full-time employees an increase in the 19 years from 1982 to 2001 of 38.2 to 41.3, which is - my calculations - 3.1 hours increase over a period of 19 years isn't an increase - if I am reading this correctly - of 3.8 hours in 10 years in the UK, a more significant change?---No, no. Isn't this a percentage change in table 2? I mean, I have to - and we have got something close to 10 per cent over that long period as an increase in Australia. This is - sorry, this is annual hours, the average changes in hours from year to year. I have checked all this and I think I probably need to go back and re-work exactly what it is. But when I made that assertion I was precisely looking at our table and looking at the, you know, parallel figures to the Commonwealth, and I think my point holds.

PN4613

Rather than weekly hours?---Yes, the weekly hours. This is annual hours. But I still think it is just - - -

PN4614

It does seem to be small figures if they are annual hours, looking across the board?---I think what they are, a percentage drops from year to year - from the beginning of that period to the end of that period. But, I mean, you are right. I don't know why my brain is not working and telling me exactly what those figures are. But in my opinion, and I have checked this out before, and I made the calculation for Australia that it is more significant than that change that you pointed to for the United Kingdom.

**** IAIN GRAHAM CAMPBELL XXN MR WATSON

PN4615

Now, would you accept that in relation to all of this data trends, the more one generalises about the concepts involved, the harder it is to draw inferences about anything in particular?---I am sorry, you will have to repeat the - - -

PN4616

The more one generalises about concepts and trends - - -?---Everyone generalises?

PN4617

The more one generalises the harder it is to draw any meaningful inferences from the generalised data. Do you accept that?---I am not quite sure what you are saying, but certainly there are limited - limitations in the data, and we have always got to be very cautious.

PN4618

But you might start from something specific and you might be able to draw something from that, but if you generalise you may not be able to draw the same inferences from generalised data. Do you accept that as a general proposition?---Well, there is always - I mean, there is the standard fallacies that you can fall into. I mean, there is an ecological fallacy whereby you think that what is true of the average is true of every particular member of the group that the averages is made up of, and that is why, you know, looking at average changes is always a bit misleading in this case, and why you need to complement the figures on the average with the figures about the dispersion of people around the average. When we say that people, full-time employees in Australia work an average of 41.3 hours, of course, what is also interesting is the dispersion. And if there is an increase, what is interesting is, well, what proportion of the people are leading that increase?

PN4619

Well, would you accept another example. If you have got in your category, for measurement purposes, of not paid or unpaid overtime, that involves a whole raft of different circumstances, some which are very formalised and regulated a the certain number of hours are specified, some of which an amount is incorporated into the annualised salary but never specifically referred to or measured or counted from there on in, such as the example I gave you before, or there may be time off in lieu arrangements. These are all differences which, when one groups together the class of, in your measurement and definitions, unpaid or not paid overtime, there may be different implications from each of the subgroups which

**** IAIN GRAHAM CAMPBELL XXN MR WATSON

are not true across the board if you lump it all together?---I think I fully agree. I think there is a discussion in the literature about the notion of chaotic concepts, that are concepts which bundle together things which shouldn't be bundled together. And it is very important that social science, particularly in this area, also pays attention not just to data but to the conceptualisation of that data.

PN4620

Yes. An example of that may be in your attachment J, Puzzles of Unpaid Overtime. At the bottom of page 5, you say:

PN4621

There are several important labour market issues which unpaid overtime may impinge upon.

PN4622

?---I am sorry, where it this?

[12.10pm]

PN4623

Page 5, attachment J, bottom of the page?---Mm.

PN4624

And you go over and you list - which appears to be drawing from perhaps other research and academic writing - some of the implications. Those implications may point in one direction if the overtime is genuinely not paid, compared to where it genuinely is paid, but by incorporation in the annualised salary or something of that nature. That is true, isn't it?---I am sure it is, yes.

PN4625

Thank you, Dr Campbell, nothing further.

PN4626

JUSTICE GIUDICE: Thank you, Mr Watson. Is there any re-examination?

PN4627

MR MARLES: Yes, your Honour. I just have a couple of questions.

<RE-EXAMINATION BY MR MARLES [12.12pm]

**** IAIN GRAHAM CAMPBELL RXN MR MARLES

PN4628

MR MARLES: Dr Campbell, at the end of Mr Cole's cross-examination, he referred to a figure that you have used for the number of hours in Japan as being I think 1842, and he put it to you that that was the figure for 1998. I have a copy of the 1999 figure, which I could hand to you, or tell you that it is 1840. My question is does that make any difference to your analysis?---No, and the reason why I was quite happy to use '98 data is that I am conscious of - I am not in the business of comparing for a given year. I am in the business of making a rough comparison. We know that the Japanese trend series is down, and it is just unfortunate that the Japanese data has always lagged. This is true for most years, so that now we have got the 1999 data but we have not got the 2000 data, whereas for other countries we have got the 2000 data. But (a) the figure is no different of course from 1999, and (b) it seems a quite legitimate thing to do. It is a sort of reflection of the fact that I am not in the business of trying to sort of get a careful silly comparison of year to year, for a given year, sorry.

PN4629

Thank you. In Mr Watson's cross-examination, Mr Watson asked you a number of questions about annualised salaries and the effect that that might have on the incidence of unpaid overtime. Have you read the paper prepared by Dr Buchanan for these proceedings, entitled Working Time?---I have gone through, yes, one paper by Dr Buchanan. I am not sure if it is quite the one that you are referring to.

PN4630

Well, there is just one matter within that paper that I would like to refer you to. Again I can hand you this page, it is table 16 on page 43 of Dr Buchanan's paper. And that is - sorry, your Honours and Commissioners - is ACTU tab 1. Sorry, ACTU2, tab 1.

PN4631

JUSTICE GIUDICE: Table 16, was it?

PN4632

MR MARLES: Yes, table 16 on page 43. This is a - based on the ADAM data base and it is an attempt to detail the proportion of agreements which contain particular clauses. You will see there that there is a general feature described as wages annualised, and the proportion of agreements containing such provisions, 6 per cent. Now, is that consistent with - would that be consistent with the view that you would have about the preponderance of those kinds of agreements?---I am surprised it is that high. I know these are figures that my Master's student has also produced. But, yes, to me it is a small number.

**** IAIN GRAHAM CAMPBELL RXN MR MARLES

PN4633

Yes. Mr Watson asked you a question about whether or not, in your analysis of unpaid overtime, whether you were using that in a pejorative way, I think was the word that Mr Watson used, or whether you were simply characterising these things in an analytical way, and I think your response was that in the first instance you were simply going through an analytical exercise and that evaluation was a fair way down the track. Do you have a view about the evaluation of that issue to the extent to which overtime is compensated for?---I think there has to be a presumption that there is a possible problem when you have got overtime that is unpaid. I am not sure that it is the unpaid nature of it that is really the problem. To me, it is just sort of a symptom of the general lack of regulation of those extra hours that people have to do. I have not got any clearly defined position beyond that that I have already spelt out in the Puzzles of Unpaid Overtime paper.

PN4634

And finally, Dr Campbell, Mr Watson referred you to table 2 in your paper, and I think there was some confusion in comparing the United Kingdom with Australia in relation to the increase in annual hours for full-time workers over a period of time, whether that table was a percentage change or not. Can I refer you to page 7 of your report proper. In the first sentence of the second full paragraph which starts:

PN4635

The strength of the increased average weekly working hours for full-time employees revealed in the Australian data is rather startling. It amounts to an extra 3.7 hours.

PN4636

That now seems to be uncontested. Down the bottom of that page, third sentence:

PN4637

There does seem to be a statistic which refers to the comparison in relation to the UK.

PN4638

Does that explain the issue from your point of view?---No, but it gives an indication of how I double-checked my evaluation of the significance of the increase in Australia in the 3.7 hours over a period since the early 1980s, and I did in fact dig up the data, as we are suggesting there, for the increase in the UK, which was 1.4 hours. So that clearly shows, I guess, that so long as we are confident they are comparable data, that we have got an increase in Australia that is much sharper than the increase in the UK.

**** IAIN GRAHAM CAMPBELL RXN MR MARLES

PN4639

Yes?---But must admit, I am sorry that I cannot give you a better account of table 2. My mind has just gone totally blank on that. But I could very quickly find out.

PN4640

Well, we might attempt to provide that for the Commission, I think. Your Honour, I have no further questions.

PN4641

JUSTICE GIUDICE: Yes, thank you, Mr Marles. Thank you for your assistance, Dr Campbell. You are free to go or stay as you please?---Thank you very much.

<THE WITNESS WITHDREW [12.20pm]

PN4642

JUSTICE GIUDICE: Can we have an update on the program, Mr Marles?

PN4643

MR MARLES: Well, yes, your Honour. In a sense that finishes our schedule of expert witnesses. In a way, I am in the hands of Mr Bates now. We do have some witnesses lined up later in the week, but perhaps Mr Bates can - - -

PN4644

JUSTICE GIUDICE: Yes, so am I right in assuming that we are still adhering to the original order, even though the program has been slowed somewhat?

PN4645

MR MARLES: Yes, that is actually right.

PN4646

JUSTICE GIUDICE: Yes, all right, thank you. Yes, Mr Bates.

PN4647

MR BATES: Yes, your Honour. You could be confused by thinking that you are at a committee of meetings experts in Geneva; I have had that thought once or twice. But our expert is the next witness. I did take the opportunity on Friday to make arrangements for Dr Wooden to be here at 2.15 today, and prior - just prior to him going in the witness box, I intend to outline the case of the ACCI in this matter. So Dr Wooden will be available at 2.15.

PN4648

JUSTICE GIUDICE: Yes. You do not intend to open your case now?

PN4649

MR BATES: Your Honour, unfortunately it was a work in progress until this morning, and it is being redone at the moment as we speak.

PN4650

JUSTICE GIUDICE: Yes, so are you suggesting we adjourn?

PN4651

MR BATES: Yes, your Honour.

PN4652

JUSTICE GIUDICE: Our original program showed that there was an AIG opening as well, Mr Moir. Is that - or are they combined?

PN4653

MR MOIR: No, your Honour. We would intend to give a separate opening. That would - as we envisage it, that would follow Professor Wooden's evidence being heard.

PN4654

JUSTICE GIUDICE: I see. All right.

PN4655

MR MOIR: In other words, some time tomorrow.

PN4656

JUSTICE GIUDICE: Yes, all right, it is unfortunate that we are going to lose some time, but - yes, Mr Watson.

PN4657

MR G. WATSON: Your Honour, can I just raise one other point for clarification. It is not our intention to open any case until the case of the unions is complete, and could we flag that it is our intention to call evidence from Professor Wooden, and we have filed a written statement of his in relation to the coal industry. But it is agreed that Professor Wooden would not be cross-examined in relation to that statement today; he would return when we formally tender that evidence, and he would be available for cross-examination at that time. I thought we should make that clear.

PN4658

JUSTICE GIUDICE: Yes. Seeing we have a few moments, we have been considering our diaries and when this case might resume next year and how much time will be required. It may be difficult to be definitive about that until we get closer to the end of this week, but I would ask you all to bear in mind that reserving dates next year is a significant issue for us, and so we will have to get some clarity before very long, otherwise we will find that dates are becoming quite difficult to fix.

PN4659

MR MARLES: Your Honour, I might be able to say something about that, because I think we can kind of see how this week is going to pan out, and where I think we will get up to is that not all the employee witnesses will be heard this week for reasons largely of logistics, that one is having a baby and a couple are unable to come and so forth. So there will be, I think, three, I think, who ..... to next year. I imagine that we will probably do one union secretary. That is not far off the - it is actually not far off the kind of timetable that we imagined when we had the meeting a couple of weeks ago, and at that point we were thinking that if we managed to complete that timetable we might be looking at something like two weeks next year. I think that is probably still a reasonable estimate.

PN4660

VICE PRESIDENT McINTYRE: Two weeks for evidence or for evidence and submissions?

PN4661

MR MARLES: No, I must say I was actually thinking of evidence, but again - and we are kind of going a bit - well, we are not actually going further than what we discussed. What I think is imagined is that having completed the evidence we would then be filing some written submissions, and that there might be a day or two days, at the most, for oral submissions. But I hope my colleagues will back me up when I say that it was our intention to do as much of this in writing, and there was some allusion to the fact that if the US Supreme Court can hear cases in an hour, then maybe this could be heard in a day, in terms of final oral submissions.

PN4662

VICE PRESIDENT McINTYRE: We may have some questions, Mr Marles.

PN4663

MR MARLES: Yes, indeed.

PN4664

JUSTICE GIUDICE: They do not have academics appearing before them either. Yes. Are there any other contributions on the length of time that might be required?

PN4665

MR COLE: I might simply acknowledge that the Commonwealth has circulated statements of 10 or so witnesses, so we are unaware at this stage what length they may be in cross-examination.

PN4666

JUSTICE GIUDICE: Yes.

PN4667

MR COLE: There would be very little by way of any additional evidence in chief, but there might be a few matters. Could I also say while I am on my feet that although we were not party to the understanding about the written submissions. We are happy to comply with the consensus of the parties at the bar table in that regard.

PN4668

JUSTICE GIUDICE: Yes, thank you.

PN4669

MR COLE: But we would like an opportunity to at least briefly verbally address those submissions before the end of the case. So we visualise, from our point of view, that after a period allocated for evidence next year, there would be some break during which the parties would prepare or complete preparation of their full written submissions, and a short period sufficient to allow parties and the bench to assimilate the content of that and then a final relisting of the matter for the final oral submissions. If the Commission pleases.

PN4670

MR BATES: Your Honour, when we were contemplating the program for these proceedings, we of course at that point did not have the benefit of the knowledge of what the Commonwealth might or might not be doing, so we were really looking at that timetable in terms of our witnesses and our procedures rather than the Commonwealth being included.

PN4671

JUSTICE GIUDICE: What is the nature of the evidence? Do you say there are some 10 witnesses, Mr Cole?

PN4672

MR COLE: Yes. They are representatives from a range of Commonwealth agencies, and the Commission is aware that the Australian Public Service Award is one of the vehicles for this case. Generally I think on the latest count there are about 119 agencies, separate agencies - - -

PN4673

JUSTICE GIUDICE: Yes. No, I just want to know the nature of it. It is not expert academic evidence?

PN4674

MR COLE: No, no, it is from people who are senior in the Human Resource management areas and they are describing the experience of those agencies in relation to working time issues, and a number of them are actually commenting on the claim and what they see as the impact of the claim, your Honour.

[12.27pm]

PN4675

MR MOIR: Your Honour, I might just indicate that we have some 13 witnesses: 10 of those are persons from member companies. We would envisage that 2 of those witnesses would have their evidence heard this week, but that would then leave the remaining 11. Now, some of those witnesses are based in New South Wales, in particular the Hunter Valley. I have spoken with my friend, Mr Marles, and other parties about the possibility of the Commission hearing their evidence in Sydney.

PN4676

I would just raise that for the bench's consideration. Obviously it is a matter for the bench to determine.

PN4677

JUSTICE GIUDICE: Yes, it won't be just Vice President McIntyre.

PN4678

VICE PRESIDENT McINTYRE: I thought you were going to say Singleton, instead of Sydney.

PN4679

MR MOIR: Yes. I am comforted that at least one member of the bench is from Sydney.

PN4680

JUSTICE GIUDICE: How many of those witnesses are there, from Sydney?

PN4681

MR MOIR: From Sydney? There are at least 3. I understand that other parties may seek the opportunity to slot in others, to make a full day of it.

PN4682

JUSTICE GIUDICE: Yes, all right. Well, that is something we can work out in due course.

PN4683

MR MASSON: The only comment I would like to add, your Honour, is that we have 4 witnesses, 3 of whom are based in Perth. Now, I am not suggesting that we conduct a hearing in Perth, although I am sure they would appreciate that: but the understanding we have with Mr Marles is that we would attempt to allocate a day, or a block of time where we would plan to deal with particular industry witnesses, and just reinforce that it will cause considerable dislocation for the 3 people coming from Perth. But I am sure we can deal with that with Mr Marles prior to the hearings next year.

PN4684

JUSTICE GIUDICE: Yes. Well, any refinement of the indications that have been given this morning over the next couple of days would be welcome. Perhaps we could deal with it on Thursday, after the luncheon adjournment, and see if we can get some more clarity on how much time we will need to set aside. Thank you for that. We will adjourn until 2.15.

LUNCHEON ADJOURNMENT [12.31pm]

RESUMED [2.19pm]

PN4685

JUSTICE GIUDICE: Mr Bates.

PN4686

MR BATES: Thank you, your Honour. Your Honour, before I give the outline of the ACCI position, I think it is proper that I have a couple of matters dealt with. Firstly, have some of the information that has been put to the Commission marked as exhibits by the Commission. The first one that I would seek to have marked as an exhibit is in relation to the ACCI counterclaim for annualised salaries, and in that regard, the outline of contentions and witness statement that was filed on 3 September of this year.

PN4687

JUSTICE GIUDICE: Yes. That has got a covering letter signed by somebody called Reg Hamilton.

PN4688

MR BATES: That is correct, your Honour: departed from our service.

EXHIBIT #ACCI1 OUTLINE OF CONTENTIONS AND WITNESS STATEMENT FILED ON 03/09/2001

PN4689

MR BATES: The second document is the outline of contentions and the witness statements filed by ACCI on 2 November 2001.

EXHIBIT #ACCI2 OUTLINE OF CONTENTIONS AND WITNESS STATEMENTS FILED ON 02/11/2001

PN4690

JUSTICE GIUDICE: The ACCI1 includes the witness statement of David Gregory?

PN4691

MR BATES: Yes, your Honour.

PN4692

JUSTICE GIUDICE: Which is actually a separate - I think it was filed as a separate document, but nevertheless it goes with the main document which has a blue cover, is that right?

PN4693

MR BATES: Yes, your Honour. From the paperwork that I have got, it would appear that it is all one document.

PN4694

JUSTICE GIUDICE: I see. Thank you.

PN4695

MR BATES: ACCI would argue that rather than granting the misconceived ACTU application, the Commission should grant our applications which are designed to encourage agreement on the development of annualised salaries, incorporating on an agreed basis payment for overtime. ACCI filed an outline of contentions on 2 November 2001 in response to the ACTU, and that is now marked as ACCI2 in this matter.

PN4696

The applications to vary and place a range of restrictions on the capacity of employers to direct an employee to work overtime, and to provide additional paid leave for employees who work so called extreme hours. The current awards provide that an employer to direct an employee to work reasonable overtime. ACCI opposes the ACTU claim in full. The ACCI contends that the proposed ACTU award clauses are unworkable, and would have negative consequences for the economy and labour relations.

PN4697

ACCI also attached a number of attachments in support of its position. One of these attachments concerned economic and costing material which, as these proceedings go into next year, will go out of date, and the ACCI will update this material when the new information becomes available, which I understand will be early in the New Year. Depending on how long this case takes, of course, it may be necessary to update that information at a later date as well.

PN4698

ACCI contends that the proposed clause is not allowable, and fails to meet the test established for allowability in section 89A of the Workplace Relations Act 1996, and the award simplification decision contained in Print P7500.

PN4699

Many of the 15 factors which the ACTU would require employers to take into account in determining whether an employee could work overtime, are clearly not allowable. In particular, I draw the Commission's attention to the OH and S issues. ACCI strongly believes that the ACTU application is contrary to the objects of the Workplace Relations Act 1996, as the Act places a priority on enterprise agreements, which is at odds with its claim.

PN4700

ACCI also contends that average working hours are unchanged overall, and that much of the so called unpaid overtime is worked by managers and professional staff, who in many cases receive the benefit of annualised salaries or time off in lieu arrangements. To categorise unpaid overtime in this way, when clearly many employees receive benefits, misrepresents the position. The continued use of the term unpaid overtime in the way it is being presented creates an impression that misleads the public debate on the reasonable hours issue.

PN4701

ACCI has supplied 9 witness statements, and they provide powerful reinforcement of ACCI arguments that the ACTU claim cannot help but cause considerable damage to productivity and efficiency. These statements also indicate that the proposed clauses would create ambiguity and uncertainty, and would result in a negative business climate.

PN4702

We will demonstrate that the evidence cannot lead to the granting of the ACTU claim. We will also contend that there is little, or no evidence of disputation on the issue of employees being required to work overtime, or hours that are allegedly not reasonable. In that regard, we say that there is a singular lack of disputation, claims, breaches of award applications, or occupational health and safety action that has resulted from any such alleged claim. There is evidence of hours issues being adequately dealt with in the enterprise bargaining process at an enterprise level.

PN4703

We will argue that decisions concerning the working of overtime are best made at the level of the enterprise: either through decisions by management having regard to operational requirements, or, where necessary, through consultation and negotiation between employers and the employees.

PN4704

The approach of the ACTU is to say that once size fits all, when clearly there are significant differences, not only in different industries but also in different enterprises within an industry. I would like to take the Commission to a couple of examples. During Mr Marles opening address he referred to his excitement and that of his son in going to the Olympics. We would say that the Olympics was an international event that certainly put forward the creative and other clear benefits that Australians give to this world.

PN4705

I would make comments in relation to the opening and closing ceremonies, which were both renowned after they occurred for both their creativity and their nature. In fact, I can still recall young Nikki Webster going across those skylines above the Stadium. And the number of hours that those people put in to get that event up was extraordinary, but I think everyone would agree it was something that Australia can be very proud of at a national and an international level.

PN4706

At the moment Nikki Webster about to open in the production of The Wizard of Oz, after an extensive period of rehearsal, and that involved many, many hours work, and that usually is in other people's leisure time. The entertainment industry also has some examples of where they do work very long hours, and because of the type of area it is in, it is absolutely necessary.

PN4707

I take you to the example of Opera Australia, who when they are in repertory, they are basically - the back stage crew come in, and they work a minimum of 50 hours a week, and they work that for periods of up to 12 weeks. Then, of course they are paid: they have a certified agreement which has their pay set at 50 hours per week as their ordinary hours. And there are occasions where they work a lot less than 50 hours a week, for which they are still paid those 50 hours. It is an arrangement that they are very pleased with, both the company and the employees.

PN4708

We also give the example of the fly-in and fly-out crews that operate in the mining industry, particularly in Queensland and Western Australia. There are other areas in the hospitality industry that give examples of the same sort of approach, where you need to take into the account the special requirements of that industry, and in most cases, not just the industry but the enterprise is operating within that industry.

PN4709

As your Honour is aware, in these proceedings the National Farmers Federation has asked for the ACCI to represent their interests in this matter. They too put their claim forward as to the unique needs that their members have in the farming and agricultural industries. I would like to quote from an editorial in the Weekly Times published on 21 November. And I will just quote that, because I think that encapsulates what the Farmers Federation would also put to this Commission if they were here:

PN4710

Because, make no mistake, if ACTU is successful in getting new thresholds for reasonable and extreme hours of work inserted in 14 test case awards, there will be no stopping its wider application. As the National Farmers Federation rightly argues, such standards would be totally inappropriate, impractical and burdensome for producers. Can you imagine a farmer having to question the shearer about his family commitments or social life, as part of 15 criteria that would have to be used in determining what reasonable hours of work were. We back the NFF on this issue. The proposed working hours standards take no account of the realities of agriculture. Yes, there are often legitimate problems arising from longer hours of work, but the one-rule-fits-all approach by the ACTU is not the answer.

PN4711

It is not possible, in our view, to extrapolate the limited material introduced by the ACTU in a way which enables general conclusions to be drawn for all industries, all situations and all workers. The arguments put in support of the ACTU claim are based on emotion rather than logic, and ignore the way industry runs on a day to day basis.

PN4712

We doubt that this application has resulted in support of workers at the enterprise level, and it would, if successful, have an unfavourable impact on workers who have undertaken to work in an occupation of their choice. The only evidence of reasonable hours or related issues being on the discussion agenda is in the enterprise bargaining negotiations process with regard to time off in lieu and annualised salaries.

PN4713

Much of the material adduced by the ACTU is not only emotive, but based on personal opinion and conjecture. There are many sweeping statements made and conclusions drawn by the ACTU which are not sustainable, and we will demonstrate this by the available material and evidence that emerges in this case.

PN4714

We will also demonstrate that given the economic uncertainties facing this country, it is not the time to give favourable consideration to an ACTU claim which would add considerably to the employer costs, and would in addition strike at the heart of the ability of many businesses to operate efficiently and productively.

PN4715

We will argue that for all these reasons the Commission must reject the ACTU claim. Your Honour, that is the outline from the ACCI in this matter. I would next like to move to calling Professor Mark Wooden to give evidence.

PN4716

JUSTICE GIUDICE: Yes, thank you.

<MARK PETER WOODEN, AFFIRMED [2.33pm]

<EXAMINATION-IN-CHIEF BY MR BATES

PN4717

Professor Wooden, could you indicate to the Commission your full name and your address, for the record?---Mark Peter Wooden, 124 Macedon Road, Lower Templestowe.

PN4718

Do you have a copy of the statement that you swore in regards to giving evidence in this matter?---I do.

PN4719

Your Honour, for the purpose of this document, or this statement, which is part of ACCI2, you will note that that particular outline is not tabbed. Now, I have as a result had some extra copies made of the witness statement of Professor Wooden, if people would prefer that.

PN4720

JUSTICE GIUDICE: Yes. Well, where is the statement?

PN4721

MR BATES: It is the last document on ACCI2. It incorporates the witness statement and the document entitled, Working Time Patterns in Australia and the Growth of Unpaid Overtime.

PN4722

JUSTICE GIUDICE: Well, the last document I have got is called Appendix F, supplementary statement of the Australian Industry Association.

PN4723

MR BATES: Sorry, your Honour, it is before the - - -

PN4724

JUSTICE GIUDICE: Before that I have a document called, Working Time Patterns in Australia, which is the one you are obviously referring to.

PN4725

MR BATES: And the witness statement is - - -

PN4726

JUSTICE GIUDICE: Precedes that.

**** MARK PETER WOODEN XN MR BATES

PN4727

MR BATES: Precedes that. As it was not tabbed, I thought it might be easier if we dealt with it separately, but I am in the Commission's hands there.

PN4728

JUSTICE GIUDICE: Yes. If you could hand those up. Somebody might need them. I might say that as filed, my copy of Professor Wooden's paper finished at page 18. I do not know whether anybody else has had the same problem.

[2.35pm]

PN4729

JUSTICE GIUDICE: Yes, thank you, Mr Bates.

PN4730

MR BATES: Have you got that in front of you, Professor?---I do.

PN4731

And that is your statement?---It is.

PN4732

Professor Wooden, in your report "Working Time Patterns in Australia" you make the comment in reference to two reports that I wish - three reports that I wish to refer to. One is by Dr Buchanan?---Yes, "Working Time Arrangements".

PN4733

Dr Wooden, could you tell the Commission what your overall impression of Dr Buchanan's papers are? There are two, but if you could deal with "What about the Bosses?" second?---Okay. On the "Working Time Arrangements" paper, I did not find too much to disagree with. I thought it was a fairly balanced assessment of the existing data, so they cover - traverse similar ground to what I traverse here. So apart from some fairly minor differences, I thought it was very similar. I thought it was fine.

**** MARK PETER WOODEN XN MR BATES

PN4734

And "What about the Bosses"?---Well, "What about the Bosses?" report which I do not make any reference to in this particular statement, because I only saw it a couple of weeks ago perhaps, I would not put a lot of weight on this particular report. It is only a series of - a small number of interviews with a small number of employers, so what weight you can place on those it is very difficult to say. Certainly they reach a number of so-called findings which are very broad-brush big picture findings, which I cannot in all honesty see how they could possibly have reached. They are bunch of interesting hypotheses, I think, and important hypotheses, that I think we would like to know the answers to, but I do not think they are any more than that. There is certainly nothing in that report that can be used to prove or disprove any of them. So I would not put a lot of store by those and, further, the write-ups of the interviews themselves are fairly flimsy. They are just really a series of quotes of different people; so-and-so said this and so-and-so said that, and I thought it was fairly lacking in analytical content.

PN4735

Thank you. And have you read the papers by Dr Iain Campbell, talking about Cross National Comparisons?---Yes, I have.

PN4736

And what is your general impression of that series of papers?---Well, I do comment directly on that in my statement. My bottom line is that I am not sure what the value of any cross national comparisons in this field is, due to the fact that all of the countries collect working time data so differently, unlike, say, the area of measuring employment, unemployment, etcetera, where there now is a common standard basically following the international labour organisation. In working time there has not been anywhere near such a conversion to a standard, so we have a bunch of numbers which, unless you can go and, you know, become very - go and study what these countries actually do, get copies of the questionnaires, get copies of all the documentation to support that, I find these international comparisons very dubious and I am worried that misleading inferences would be drawn on the basis of them.

**** MARK PETER WOODEN XN MR BATES

PN4737

Okay. Could I take you to page 8 of your report and in particular to figure 1 at the top of that page, and ask you what you established or are trying to establish in those figures which you have there?---Well, that figure there was just trying to show the juxtaposition between the trend in paid overtime hours and in total hours worked to try and get at the concept - this is what a lot of people are interested in, this supposed growth in unpaid overtime, so that diagram purportedly suggests that there has been a divergence, because you can see paid overtime going down and hours worked by full-time workers going up.

PN4738

And I will just raise with you one issue there; is the data contained in there, particularly the broken line, average hours worked by full-time employees, is that correct?---No, there is a mistake there. That should be all employed persons. The overtime data are for employees only, so the two series are not totally compatible.

PN4739

And what would that do to your findings in your table?---Well, if you were to replace that with full-time employees and certainly when I first put this graph together, which is probably back in about 1998 now, it has appeared in various fora, this particular chart, but certainly in the last few months the ABS has made more data available through its super table facility on time series service, and you can now get the full-time employees and it makes not a jot of difference. The trend - the level is slightly lower because employees work fewer hours than all employed persons, about an hour difference, but the trend is almost identical.

PN4740

And with respect to another issue raised by Dr Campbell, what are your views about the use of OECD information in looking at this type of area?---Well, as I already said, I think they are very problematic, and you have to know what - how these data are collected, and I think I made it clear that even for the OECD reports for Australia, they do not make it clear how they got those data; they just say obtained from the ABS, and when I went and saw the number there of 1864, I think was the number of hours recorded, Australians working in 1999, and then I got out my ABS data and tried to arrive at the same number, I could not. So I then had to call up the ABS to find out how they put the number together, and after starting off the ..... survey section, and worked my way down, because none of them knew either, we finally got to someone over in sort of national accounts section who was the person at OECD had put the numbers together and found out

**** MARK PETER WOODEN XN MR BATES

the numbers relate only to four months of the year, February, May, August, November, which is a slight problem because it means that they basically are using data from periods when people do not take annual leave, or are less likely to. So the big leave period, you know, December and January, does not appear in these figures. So that does cause an upward bias. So that just gives an example of how difficult it is even to work out what we are doing here. Now, how the hell do we know what is going in Germany, Japan, Korea, whatever? The people over there know, but to make comparisons we have got to know what they are doing. And that means you have got to see the questionnaires, you have got to know the methodology. So it is very, very difficult and dangerous.

PN4741

Okay. Could I now take you to page 33, and table A1, which right near the top of that page?---Sure.

PN4742

And I ask this question for clarity, in terms of your commentary on page 32. Could you just explain to the Commission what you are trying to do there by comparing those two sets of figures?---Okay. Traditionally most of the data that we have from the Australian Bureau of Statistics that runs over time relates to actual hours worked in a particular survey week, and that is what the first column does. It reports the number of hours people actual say they worked last week. Now, the claim can be made and has been made that that is fairly misleading; in any one week people may not work sort of normal hours, so you really need to know about usual hours. And now since April of this year, the ABS and the Labour Force Survey have redesigned it and has now asked the question every month what the usual hours they work are. So that can show you the difference. Now, I should say at the outset that it is not actually obvious that usual hours are better. I mean, what would be best would be to have actual hours for every week in the year, then you can just add them up. But that would require 52 Labour Force Surveys which would get rather hideously expensive, and they do do it monthly, so we have 12 Labour Force Surveys. So if you want to pick one number in a year, then probably usual is better than actual. The interesting thing we find here is that the claim is often made that if you use usual hours you will get more people reporting they work long hours. But what this table shows is that is not true, that the proportion of work 49 and above, for example, is almost exactly the same under the two measures, and in fact under the usual hours measure it is slightly smaller. But it is basically the same. What you do of course get is a lot more people working standard hours, if we call 35 to 40. So there is a regression to the mean, and that is not surprising. So using actual hours does tend to cause a diversity in working arrangements which there is plenty of, and to be overstated. But that is just the point there.

**** MARK PETER WOODEN XN MR BATES

PN4743

Right. And by comparing those two sets of figures, do you get any different result?---Well, not if you want to look at long hours worked, then the incidence is pretty much the same. If you want to focus on people working standard hours and part-time hours, there is a difference.

PN4744

Going back to the OECD information, in terms of Japan do you know what some of the differences might be - well, problems rather than differences might be when comparing with Australia?---Look, I cannot profess to be an expert on what they do in Japan. All I can really do is refer you to the footnotes they have on the bottom of these OECD tables that appear in each wave of the OECD employment outlook or appear in some of their working papers, and you will see that the data there are heavily based on an establishment based survey, which means they are collected from employers. Now, employers are obviously in a good position to tell you how many hours they pay for, how many hours their workers are contracted to do, how many hours they are paid or if they are paid overtime, but I do not know how they could possibly work out how many hours people are putting in at home, etcetera. So there is the first difference. It is said in that footnote that there is data - it is using Labour Force Survey, which is a household survey. But that is really to capture the areas for which they have no data at all. So they mention specifically there agriculture and self employment. So, I mean, I do not know so much about Japan but that footnote does give me great reason to think that it is very different to what we do with the Australian data.

PN4745

I will just take you to one other example to get your view and that is Germany?---Yes, well, Germany I do know something more about, mainly because I have a relationship with people at the German Institute of Economic Research in Berlin, and they basically say that the data for Germany is what they call process-driven; that is it is administrative data, so that is they collect data from employers, which is the establishment connection, and that is again about contracted hours. They collect data from employers about paid overtime hours and then after that what they do is they then make adjustments downwards for things like public holidays, sick leave, annual leave, etcetera. Now, some of that comes from household surveys. If you want the extent to which people use their leave entitlements, you need to do a survey; you cannot just assume everyone takes four weeks a year, or six weeks a year or whatever the number is. The Germans are very clear. Markus Pannenberg at the DIW at Berlin is very clear

**** MARK PETER WOODEN XN MR BATES

that they make really no serious attempt to measure unpaid overtime. Whereas if you do the household survey that they have in Australia, we go to people and we say how many hours did you work last week, and that could include lots of things. It could include time commuting, it could include time for meal breaks, it could include time spent thinking about it in the shower. I mean, you just do not know.

PN4746

Your Honour, I do not have any further questions at this stage.

PN4747

JUSTICE GIUDICE: Yes, thank you, Mr Bates. Ms Doyle.

PN4748

MS DOYLE: I think by agreement I am going to go first.

<CROSS-EXAMINATION BY MS DOYLE [2.49pm]

PN4749

MS DOYLE: Professor Wooden, Rachel Doyle representing a number of the State Governments. I want to ask you some questions about your paper and a couple about the ACIRRT material you have referred to. Can I just ask you first, your paper that is attached to the witness statement, you explain in your covering statement it was first prepared in 1999. I understand it has undergone some revision between then and the form that we find it in now for the purposes of these proceedings. When it was first prepared, was it commissioned by ACCI then?---Yes.

PN4750

All right. And you were paid for its preparation at that time?---Yes, the National Institute of Labour Studies was paid.

[2.50pm]

PN4751

In terms of the process of revision, did you submit it to ACCI for approval before you filed it in this Commission?---Well, I submitted it to them before, and I am glad to see that not one single thing has changed, though I would have hoped they could have improved the pagination of it before it got to here.

**** MARK PETER WOODEN XXN MS DOYLE

PN4752

Was it submitted to the Commonwealth before it was filed in these proceedings, do you know?---Not to my knowledge, not by me.

PN4753

Have you given evidence for ACCI before?---For ACCI before. No.

PN4754

But you have given evidence for the Commonwealth before?---The Commonwealth, yes, just - well, yes, I suppose just recently.

PN4755

Well, the decision was pretty recent, wasn't it?---Yes. I am just trying to work out whether I was representing KFC.

PN4756

Are you referring to the Hamsey decision, Hamsey v Tricon?---That is right, that is correct, that is correct.

PN4757

I want to ask you about some comments made early in the report, first of all the executive summary. Can I take you to page 4?---Mm.

PN4758

JUSTICE GIUDICE: Professor, your testimony is being recorded, so you will have to try and say yes and no rather than - - -?---Yes. Yes. Yes.

PN4759

MS DOYLE: I am referring to page 4 of the executive summary. Obviously the numbering starts again in the body of the - - -?---This is (iv), yes.

PN4760

The second to the last dot point there, you say:

PN4761

It seems almost inconceivable that longer work hours have not impacted adversely on the family life of many workers.

**** MARK PETER WOODEN XXN MS DOYLE

PN4762

You go on to say:

PN4763

There is very little Australian evidence that directly supports this proposition. Indeed, time spent by parents on child-care activities has, if anything, been rising over time. This, however, is clearly an area that deserves much more attention from researchers.

PN4764

Now, have you conducted any research in relation to time spent by Australians, men, women or couples on child-care activities?---No.

PN4765

All right. Now - - -?---I am currently doing some work now, but nothing to report.

PN4766

You don't provide any footnotes there or cite any research, but I gather from the body of the report - perhaps we can go through to page 23?---Yes.

PN4767

Page 23 of the report, there is reference to a couple of different research series. First of all, you refer in the second main paragraph there to employed respondents who responded to a '91/'92 survey conducted by the Australian Institute of Family Studies?---Where is that?

PN4768

I think further down, just above the heading:

PN4769

The health consequences of long working hours.

PN4770

You refer to a study by Bitman and one by Bitman and Pixley. I have looked at the footnotes. I understand that is an Australian research?---That is using the time use survey data from the ABS.

**** MARK PETER WOODEN XXN MS DOYLE

PN4771

All right. Now, you say there:

PN4772

Time spent by both fathers and mothers on child care-related activities actually rose between '74 and '92.-

PN4773

?---That is right.

PN4774

..before falling slightly between '92 and '97.

PN4775

?---That was my reading of it, yes.

PN4776

But they are two different sources there, are they? The ABS data is the raw data from '99 and the Bitman report is one of interpretation of that?---Bitman, yes, that is right. Bitman and Pixley I don't think had the '97 data so I had to use the original - well, not even original source, the ABS description of the original source.

PN4777

Did you have regard to the ABS figures as at '99 in order to make the statement you have made there, because it is just that you only refer to the period - well, '74 to '92 and '92 to '97?---Yes, that is right. The survey was conducted in '97. It was reported on in '99. It takes them that long to get their act together.

PN4778

All right. And you don't provide any information in relation to time spent on child care-related activities post '97?---No. They do the time use survey every 10 years, I think, so, unfortunately for us.

PN4779

And is the question asked in that survey general? Does it just ask people how much time is spent, or does it - - -?---That is a time diary, so what they do is they actually get people to minute; it is very onerous, to actually minute every minute they spend in a day doing various activities, so arguably it is the - and I think it is arguable, one of the best sources of time use in the world.

**** MARK PETER WOODEN XXN MS DOYLE

PN4780

My question is really how is that question posed? Does it just ask people to record what they spend on child care-related activities, or is there any greater explanation of what that might entail?---It is actually fairly detailed. I think they actually have time spent, you know, bathing the children, and then you have got to put them together. So, my general point is there hasn't been a lot of research done in this area, and what we have got is just few little snippets, and certainly these data don't relate to employed people, they are just all people.

PN4781

So it is a very general figure that might include people who are working part-time?---Many of them not working at all, because it doesn't get us very far, and the data is there, could be analysed as great scope for more research.

PN4782

I do notice there in the paragraph above the one which starts:

PN4783

Very differently in the survey conducted by UMR Research 2001 -

PN4784

people were asked about how they thought about the balance between work and family and it was recorded that 60 per cent of paid workers reported they were having more trouble than they thought the position had been five years previously. Is it just that material I have taken you to on page 23 that underpins your statement in the executive summary about child care-related activities increasing over time?---Well, pretty much. That is all I have got. I mean, I don't think we want to overstate this. My reasoning here is there isn't much being done, okay, so let us not read too much into it.

PN4785

Nonetheless it finds its way into your executive summary as one of the indicators or one of the important factors based on your research into the area of working time?---Well, all I am doing is reviewing the evidence.

PN4786

All right. Now, I want to ask you a little about the methodology or what you say about the methodology, I should say. Can I take you to page 5 in the body of your report. Page 5 just above table 2, the paragraph that starts:

**** MARK PETER WOODEN XXN MS DOYLE

PN4787

Overall the data presented in table 1 suggests that the claims often made about the extension of working hours are exaggerated.

PN4788

Now, if we turn back to table 1, table 1 is a set of data at various points from the period 1970 through to 2001. Are you saying that the presentation in this manner, the presentation of this data, reveals that claims made about extension in working hours are exaggerated?---Well, the main difference probably has got to do with the view that the trend has continued unabated pretty well continuously, so I would not dispute the claim that (a) hours have increased, or the proportion of people working long house has increased, is an important thing. I wouldn't dispute that at all, but what I would dispute is that it is - that it is a linear trend that has basically continued since the early 1980s onward. I think there is pretty good evidence that the trend comes to a halt and arguably that it is all in the eyes of the beholder, arguably the growth perhaps isn't as great as what some people believe, but I don't really take it.

PN4789

There is no reference here to which people or who is exaggerating. Do you mean the people who answer the surveys or the ACTU, or who?---Only - well, lots of people, I mean, the researchers for a start in my profession, so - - -

PN4790

But you go on to say as far as I read that paragraph, if you are looking at the last line of it really, or the last two sentences:

PN4791

Moreover, there are good reasons to suspect that survey-based data may overstate long hours working, especially as a result of over-reporting.

PN4792

Now, I haven't read the report you refer to there by Robinson and Bostrom. Is that Australian?---No, it is the US.

**** MARK PETER WOODEN XXN MS DOYLE

PN4793

Okay. Does that indicate that what, there are a certain percentage of people who tend to lie or exaggerate when filling out these surveys?---Yes. What that suggests is that in any - the problem with the data that we collect via households is that it is not like time diaries where you are minuting everything you do; you are just asked to say how many hours you work, so in a society where maybe there is a badge of honour attached to long hours which is often assumed about Australia, there will be a tendency for people to slightly inflate the hours given.

PN4794

But has the methodology of collecting or measuring time worked in Australia changed? It hasn't changed from the diary process to - - -?---Not at all, not at all.

PN4795

All right?---The methodology has not changed. No. Any increase in the bias, and I would stress, this is totally speculative - - -

PN4796

Yes?---And it is totally my own - - -

PN4797

I understand that?--- - - - own view, and again, hasn't been tested, and it is very hard to test, would come out because of the changing nature of work. So my hypothesis would be that as more and more workplaces move away from time clocks, from very rigorous, close monitoring of work time, then people, more and more people are now less - it is less clear exactly how many hours they are supposed to be working, so - - -

PN4798

But is that a personal theory, Professor Wooden?---Yes, that is right. It is speculation. It is hypothesis.

PN4799

Because you don't provide any empirical data - - -?---No.

PN4800

- - - to support the proposition that there is either a certain level of bias among Australian respondents or that it has increased over time?---No.

**** MARK PETER WOODEN XXN MS DOYLE

PN4801

But you go on to say:

PN4802

More importantly, with the increased prevalence and acceptance of so-called unpaid overtime, any upward bias in the self-reporting of hours worked can be expected to have increased over time.

PN4803

Again, we have got to understand this is your theory?---Well, there is a little - slight more basis to this, and it also is a theory; if we accept that unpaid overtime - if unpaid overtime hasn't changed, then this theory goes down the gurgler, that one goes down the toilet, so to speak, but if unpaid overtime has been trending upwards then of course there are more people doing things like working from home where the division between work time and other activities is much more blurred, at which point it is very difficult for them to separate the two activities, and so you start conflating the two.

PN4804

Again, this is your theory, you don't provide - - -?---Yes.

PN4805

- - - any proof or data to support that?---No.

PN4806

I just asked you earlier, Professor Wooden, about the evidence you gave in the Hamsey case. For the bench's convenience that decision is a decision of the full Federal Court reported at 2001 FCC at 1589. Professor Wooden, you submitted an affidavit in those proceedings on behalf of the Commonwealth as intervenor. Is that right?---Yes.

PN4807

And you were cross-examined in those proceedings?---I guess so, yes.

PN4808

Well?---It was very short cross-examination.

PN4809

Yes. And have you read the decision?---Yes.

**** MARK PETER WOODEN XXN MS DOYLE

PN4810

And are you aware of the fact that the full Federal Court judgment made a comment about your evidence in that proceeding at paragraph 60 of that decision, the full Federal Court said:

PN4811

Professor Wooden did not offer any empirical evidence to support his view. He was unable to do so.

PN4812

Have you read that paragraph of the judgment?---Yes.

PN4813

And in the same paragraph it is said of your view with respect to the impact of unfair dismissal laws on employment practices:

PN4814

Professor Wooden's view was an entirely theoretical construction.

PN4815

You have read that criticism?---Yes.

PN4816

All right?---Is that a criticism; sorry, I thought that was - - -

PN4817

You have read that statement?---Yes.

PN4818

In table 2 - have you still got page 5 in front of you?---Yes, I do.

PN4819

In table 2 you pluck out figures from '86, '95, '96 and 2000, and you have controlled for occupation there?---That is right.

PN4820

You have indicated what percentage of people fall into the different groups?---Yes.

**** MARK PETER WOODEN XXN MS DOYLE

PN4821

As far as I read this table, because although you control there is a total given for each of those years?---Yes.

PN4822

It is a little hard to read, because the table flows over two pages?---I know, I know; sorry about that.

PN4823

But as far as the total goes for '86, it says that there are 22.9 per cent, and I took that to be per cent of the employed work force, is that right?---That is right.

PN4824

Who are working - and is it supposed to be more than 44 hours?---That is correct; 45 hours or more.

PN4825

All right. Then in '95 that figure goes up to 27.9?---That is correct.

PN4826

In '96 it goes to 27.4?---That is correct.

PN4827

And in 2000 it goes to 28.4?---Correct.

PN4828

All right. Why is it then that you say on page 6 under that heading: Changing Trends, page 6, the last sentence in the first paragraph under the table:

PN4829

In contrast and despite the spread of enterprise and individual level agreements the period since '95 has actually been associated with a decrease in the proportion of the work-force working very long hours.

PN4830

Is that supposed to refer back to table 2, or is there some other information we should understand?---Well, there is definitely some other information. The issue here is that it obviously is problematic choosing a first point and an end point. What you actually have to look at is the complete series, and so similarly by using August we have a slight - it is convenient to do so because there is lots of labour force information about in August, and certainly - - -

**** MARK PETER WOODEN XXN MS DOYLE

PN4831

But it leaves out part of the story, doesn't it, because there is lots of activity - - -?---Yes, but you don't have occupation - you only have occupation in February, May, August, November, so if you want to use all 12 months you can do so and what you will find there is you will find, you know, sort of a trend like that. This every quarter - I can't see it here, but you will see a trend and then it goes flat. Now, that is for employees.

PN4832

Is that in your paper, Professor Wooden?---No, because it doesn't have to be.

PN4833

Well, I am just asking where it is that your comment on page 6 about the period since '95 - - -?---It is there in table 3, and it is very clear in table 3.

PN4834

Well - - -?---So in - and also you slightly misquoted me, I think. I said "almost no growth". So, you take the period '94 to 2000, and what we now have here is annual hours, so the first thing we have done is annualise them. That means we have calculated it for 12 months, and we have taken '94 to 2000. It wouldn't make much difference if you chose '95 to 2000 or '96 to 2000. It makes a little bit of difference if you choose '93. It makes a bit more difference if you choose '92. It makes a big difference if you choose 1983. What you see there is the change in hours of full-time workers, and what it shows is that per year over that period it has increased by 3 tenths of an hour per year, and that is annual hours you are talking, which I regard as very little change. But over the period 1983 to '94 the increase is 10 hours per year per worker.

PN4835

Well, you used the word "choice" a number of times, and I guess it is up to as a researcher, it is up to you which tables or series of data you use to support your proposition. I just wanted to - - -?---No, I wouldn't say that, wouldn't say that.

PN4836

I just wanted to ask you with respect to table 2 - - -?---Yes.

**** MARK PETER WOODEN XXN MS DOYLE

PN4837

Regardless of how or why you have made the choices there are four times, points in time chosen, and they indicate that there is a greater proportion of the work force working 45 hours or more in 2000 as opposed to '96, '95 and '86. Agree?---Yes.

[3.05pm]

PN4838

Now, you say at page 4 - can you go back to page 4 of your report. You were just asked a couple of questions about this, but I want to clarify something about the distinction between actual and usual hours. Now, you make the point on page 4 that there is a trend away from the standard hours when one looks at actual hours report?---That is right.

PN4839

And I understand the evidence you have given about that. And you say here that when you can actually compare ABS data, actual and usual hours, you will find that usual hours, standard hours goes up by 10 per cent when you can have reference to usual hours; is that right?---Yes. 10 per cent is quite something, that is right.

PN4840

And now we can now make that comparison because the ABS has started to collect both sets of data; is that right?---Well, they have always collected usual hours in sort of one off surveys, surveys like the survey of education, which has been repeated. But in the labour force survey which happens every month they didn't collect usual hours until April this year.

PN4841

I see. Now, in the first paragraph under table 1, you say:

PN4842

There is one important qualification that needs to be made at this point. The data reported in table 1 are based on hours actually worked rather than hours usually work, which would tend to cause the incidence of both the number of short hours workers and long hours workers to be overstated.

**** MARK PETER WOODEN XXN MS DOYLE

PN4843

That is not correct, is it, with respect to long hours workers?---Well, the over-statement was very small.

PN4844

About 1.5 per cent, is that right?---Yes, it was small.

PN4845

Which we can see if we look at your table A1 on page 33?---Yes.

PN4846

Because if we look at table A1 on 33 we have precisely the comparison I was just asking you about?---Yes.

PN4847

And I am certainly not a mathematician, but when I added up under the columns actual hours and usual hours for people in the group 41 to 44, 45 to 48, and 49 plus, you get 31.6 under actual hours, and 30.1 under usual hours?---It sounds fine. I trust your mathematics.

PN4848

Although we do see, as you say, a big difference in terms of standard hours?---Yes.

PN4849

So we have seen that the bias is really in favour of short hours?---Yes.

PN4850

And that would probably be because when one is doing actual hours surveys you will get people who are on leave or who are unwell, etcetera?---That is correct.

PN4851

Now, I want to ask you about the section of your report that deals with preference. Now, you make the point in your report that the data on preference, that is, those who want to work more hours or fewer hours, is not entirely satisfactory; would that be a fair summary?---That is correct.

**** MARK PETER WOODEN XXN MS DOYLE

PN4852

And if I understand correctly, the research in Australia predominantly, or at least that in your report is quantitative in nature in terms of preference?---Well, everything in this report is basically quantitative because that is the ambit of what I was looking at. So if there is other evidence out there which is qualitative, I wouldn't have covered it. So it may exist, I don't know.

PN4853

Very well. Now, at page 20, table 13, you deal with some of the quantitative evidence about this topic?---Yes.

PN4854

When we look at table 13 - this is from the 2000 SEAS data, and there are four columns indicated there: more hours, more pay, etcetera. Now, I understand, I think you make this point in the body of the page 20, but I just want to make sure we understand. With respect to those four columns, as far as I understand it, the column dealing with fewer hours for same pay was what you might call a writing, that was not a coded option?---No, that is not quite right. It was definitely coded option, it is in the questionnaire, but it wasn't on the showcard. So when the employee, when the respondent gets it they can't choose that option, sort of like, it is not an obvious selection to them. So it is a very bizarre way of doing it.

PN4855

What do you mean on the showcard?---What happens is, when they come and give the question, the interviewer has the questionnaire, the script, so to speak, he has a list of things he can code to, but then they hold up a showcard and they say to people, you know, which one of these arches sort of fits - I don't know the exact wording. I have got the questionnaire, I could pull it out for you - and they can tick. And then so a bunch of people obviously said, well, hang on a minute, I don't want to tick any of those options, I want to choose fewer hours for the same pay - well, wouldn't we all? Now, the ABS were obviously aware of this because they this as an explicitly coded option, and so they put it in. So it was a pretty bizarre way of doing it, I would have thought.

PN4856

Have you had a look at the glossary, the ABS glossary with respect to this question or series of codes?---Yes, I would have. I suspect I would have. I have got the actual questionnaire and the cards that go with them.

**** MARK PETER WOODEN XXN MS DOYLE

PN4857

Okay. Can I just ask that the witness be shown a copy of exhibit JS6. If there is none handy I have one here. This is just a page from the glossary, Professor Wooden. There is a box around the section dealing with this part of their data. Have you seen that before?---Well, I probably have, yes. I have certainly seen that page.

PN4858

It says there that people are indicated or recorded as preferring fewer hours for the same pay, if they insisted on it being written in. Are you familiar with that?---The bottom line here is that the ABS are totally confused. So you actually get their questionnaire, and I have actually got a master of the actual questions, and the option is there. That is why it is very bizarre. So I think the ABS are trying to do some fast talking to try and explain their way out of a silly question in some sense.

PN4859

Why do you say it is a silly question?---Well, if you knew that people were going to give this as an option, why wouldn't you have asked a slightly different question? You see, the question I would have asked was something like, taking into account how your income may be affected, what are your hours preferences, more, less, the same?

PN4860

Not before our responses at least?---I wouldn't have given this set.

PN4861

I see?---No, no, you would never give people the option, fewer hours, the same pay, because I would expect 100 per cent. Who is not going to choose that? Some people who love their work so much will choose it. But that is bizarre.

PN4862

Well, have you done any qualitative research on that with respect to how many people would be likely to say that? Is this an area that you have pursued yourself?---Well, we do have a question of this type in the HILDA survey. Well, I am speaking generically. I am director of something called the HILDA Survey Project, which is commissioned by the Department of Family and Community Services, and it is a panel data survey. Because the ABS has effectively vacated the area of panel data, they commissioned another group to do this work, so I am

**** MARK PETER WOODEN XXN MS DOYLE

in charge of that. And so we, the consortium, a whole range of people involved, academics around Australia, have put together a whole series of questions on all sorts of issues, and working time preferences. I managed to sneak in there. It is not exactly core to the whole survey. And so we have a question - so that is what I mean by we.

PN4863

All right. Well, I guess we will look forward to those results. But would you agree that this area of preference is a complicated area, in the sense that there are a number of assumptions that go into the questions, or a number of factors that might take preference?---Absolutely. I totally agree.

PN4864

So when you say you would expect maybe 100 per cent would say they would like to work a few hours for the same pay, does that acknowledge, I suppose, the fact that it is a loaded question. It depends on your income, whether you have children, the stage of your working career you are in, how close you are to promotion, etcetera?---I wouldn't disagree with that. A lot of those things, of course, you can potentially analyse in a good model, but it hasn't been done, and I know of no one who has used the unit record data involved here. But I don't think this question is very good.

PN4865

But you are aware of the research, aren't you, that controls for whether or not people have dependent children? One finds that the preference for fewer hours, whether it be for the same pay or less pay, increases when a family has children?---I am not aware of any research you are referring to in Australia, but I would totally - that is the sort of result I would totally expect.

PN4866

Do you have a copy of the ACIRRT paper in front of you? I think you were taken to that a little earlier?---No, I don't.

PN4867

Could the witness be shown a copy of the report which is attached to JS2, and if there is not a copy available I will give one out. There is a copy here if there is any difficulty locating that.

**** MARK PETER WOODEN XXN MS DOYLE

PN4868

I am handing to you a copy of the ACIRRT paper that deals with working time in Australia and Victoria. It is part of this folder, and I have just opened it up at chapter 2 for you. But I am actually going to ask you to go through to page 41, and there is a table 15A provided there. You have seen that before, haven't you, the table that breaks down working time preferences of employees with children under 12 years?---Well, if it was in the original submission, I suppose I have. It doesn't look familiar.

PN4869

And although that may not be as detailed as the forthcoming research that you have just referred to, that you are going to take part in, it does control for the presence of dependent children within a family; you agree with that?---Yes, sure, sure.

PN4870

And I think at page 23 of your report, if you can just look back at page 23 of your report, where you deal with this issue?---Yes. This is an interesting question, this working time arrangement survey.

PN4871

I haven't told you what the interesting question is yet, Professor Wooden. At page 23, the last paragraph above the health consequences of long working hours, the paragraph that starts, "The issue of the balance between work and family life," can you see that?---Yes.

PN4872

There is also one were the AWIS data are mostly silent. You go on to say:

PN4873

Perhaps the best we can do is compare how preferences for fewer hours among persons working long work weeks vary with the presence of dependent children.

PN4874

I must say, I assumed that you were referring to the very research I have just taken you to. But is there something else there?---No. Those numbers quoted there come straight from the AWIS data, okay, so they are my own little analysis of AWIS data. These come from somewhere else, I take it.

**** MARK PETER WOODEN XXN MS DOYLE

PN4875

Okay. Now, I want to ask you about table 14 in your report. I think that turns up at page 21, yes. Again, it goes over two pages, 21 to 22?---Yes.

PN4876

Now, here you haven't controlled for occupation or income, you have controlled for what we might broadly call job satisfaction. Is that a fair description? And style of job, whether or not there is influence over - whether or not the person concerned has flexibility at work, control, etcetera?---I mean, I don't understand your version of the word control. I haven't done a lot of controlling at all. These are just reporting some outcomes. What we have controlled for is sort of working hours and, indeed, working hours preferences.

PN4877

Well, what I mean is, there is no cross-reference here to occupational groupings or income?---In that particular analysis, no, because I was trying to be - well, I have done the analysis.

PN4878

Except that right at the end you have got hourly pay. How did you devise the hourly pay rate right at the end?---Took the total earnings and divided by the total number of hours, including what they said, it includes overtime hours, or unpaid, extra hours as they call it in AWIS.

PN4879

And I just want to make this clear. This is '95 material?---That is right.

PN4880

From the AWIS employees survey?---That is correct.

PN4881

Okay. Now, when you put this together you have included information, or you have broken it up into people working 35 to 44, and 45 or more?---Yes. Just for ease of exposition.

PN4882

And then within that we get the two columns, prefers fewer hours, or, does not prefer fewer hours?---That is right.

**** MARK PETER WOODEN XXN MS DOYLE

PN4883

Now, with respect to job satisfaction, you make the finding that there are 73.3 per cent of people who work 45 hours or more who do not prefer fewer hours, who are pretty satisfied with their work?---Yes. Whatever the answer is there, I suppose, yes.

PN4884

As far as I understood your analysis of table 14, it amounted to you saying there are high proportions of people who work in long hours jobs who are satisfied with their work, in the sense that they are satisfied with the fact that they have reasonable job security, chances of promotion, overall job satisfaction high; agree with that?---Yes.

PN4885

All right. Does that not amount, Professor Wooden, to essentially saying there are people who work long hours, they like their work, so therefore they like working long hours? It is as simple as that, isn't it?---The bottom line is yes. There are lots of people who work long hours who are very happy doing so. So what we should be focusing on, I suppose, is the people who aren't so happy.

PN4886

Right. Well, the same group of people aren't very happy with their pay, are they? If you go to the fairness of pay column, we get 52.4 per cent in the column of long hours workers who don't prefer fewer hours, and 30.4 per cent of people in the column of long hours workers who do want fewer hours?---Yes. I am not quite sure what you are asking, but just to paraphrase. If you want to focus on the group who is a problem, it is all these people who prefer to work fewer hours in the AWIS data. So that is the 38 - they are a minority of long hours workers, I think 30 per cent, and those people - but the interesting thing here is though, is that when you compare them with people working less than 35 hours, who also prefer shorter hours, the percentages aren't very different.

PN4887

So is that why you reason in the last sentence - this is page 22, the last sentence of the first paragraph, that is why you conclude:

PN4888

Indeed, one might question whether it is long hours that is the source of job dissatisfaction, or whether it is job dissatisfaction that is the reason for the preference for fewer working hours.

**** MARK PETER WOODEN XXN MS DOYLE

PN4889

?---Yes, correct.

PN4890

So reading between the lines, you are saying, when these people say they are dissatisfied, they are the very kind of people that you would think would want to work fewer hours. Is that the way you are analysing this information?---Yes. If you are not happy with your job you are not going to want to work - you are going to wish you didn't work so many hours in this job, you probably wished you didn't have the job, you wished you could change. But as I said, that is something we can conjecture about. There is nothing here.

PN4891

Again, it is one of your personal theories, right?---Well, no. I have presented some numbers, okay, and to help illustrate the case I leave it up to the readers to make some views about it. I presented some evidence, it is not totally evidence free, and make your own - - -

PN4892

Not totally evidence free?---It is not totally evidence free. There is plenty of evidence here, okay. But, of course, you might want to exploit this further. So run, for example, a multi model of job satisfaction. I have done that in other places which are published, which are listed in the - you can do that. The interesting thing you find when you do that is that the long hours work comes out with a positive position on job satisfaction, controlling for occupation, education, children, firm characteristics, that is what it comes up with. I mean, that is interesting.

[3.20pm]

PN4893

Can I ask you, see the hourly pay column there?---Yes.

PN4894

Is one able to do the reverse of the task you have just described? If we take these people who are earning 17.30 an hour, in other words the long hours workers who would like to work fewer hours, can we do the reverse? Can we times that by - to take the lowest possibility, can you times that by 45 hours a week and work out what those people are getting over the year? Or is it not that simple in terms of the division that you have done?---Well, no, they are all working 45 or more, aren't they, so - - -

**** MARK PETER WOODEN XXN MS DOYLE

PN4895

Well, I am taking the lowest possible in order to make it as rosy as possible?---The - - -

PN4896

So if we assume it is just 45 or 46?---I mean, I do not know that you can do that - can you do that multiplication? Can you multiply two averages by averages. I am not sure you can do that.

PN4897

Do not know. Well, perhaps we should look at the hard data on what these people are actually earning. Have you still got the ACIRRT report in front of you?---Sure.

PN4898

Can you go to page 85 of that. There is a table at the back. Source table 3A, and the heading across the top says: All employed persons in Australia April to June 2000 ..... percentages. You can see there is an entry there for annual income, and running across the top it tells you how many hours people are working. Can you see that, Professor Wooden?---Yes.

PN4899

Now, if we drew a line across under the entry for 40,000 to less than 50,000 and looked at all the people earning less than 50,000 - do you see that?---Yes.

PN4900

In the group of people who are working 41 to 50 hours a week, would you agree with me that the way of reading this table would be as follows: if we added 2.2 plus 4.8 - can you see where I am?---Yes, I can.

PN4901

Where I am going? 15.0, 22.2 and 19.5, again trust my maths, but feel free to check it?---Yes, sure.

PN4902

We will get 63.7 people in that group earning below 50,000?---Sure.

PN4903

Right?---Yes.

**** MARK PETER WOODEN XXN MS DOYLE

PN4904

Can you jump over a column and there are people working 51 hours or more?---That is correct, yes.

PN4905

Undertake the same analysis, we will get 49.8 per cent of people earning less than 50,000?---Yes.

PN4906

Okay?---Could we choose another four categories and just choose less than 40?

PN4907

Well, just out of interest, while you are there, look at how many are earning over 100,000. 3.9 and 9.0?---Yes.

PN4908

I just ask you that because you do say elsewhere in your report that - or you ask rhetorically whether or not we should feel sorry for people who are working these hours in order to get a beach house or trade-in for the latest model BMW?---Yes.

PN4909

Is that your personal theory or - - -?---Sorry. No, I was asking the question. It is a simple question. The question is should we feel sorry about people who work long hours to gain, you know, increased material wealth. And I think we should not feel sorry obviously. That was the reason I made it. The point about - this is not to say that there is not incredible diversity within this group. So yes, there are; there are people on low incomes who work long hours. But the point is on average, the average of course - the average income earned by this group is much higher. But I accept the point, very well taken, that there is diversity.

PN4910

Perhaps you could turn over to page 87 while we are there, and just have a look at the information there, page 87. It is the same table, all employed persons in Australia. There is an entry for family type?---Yes.

**** MARK PETER WOODEN XXN MS DOYLE

PN4911

And you will see that there is a category of couple, family with children under 15, couple, family with dependent students. If you jump down a few lines, one-parent family with children under 15, one-parent family with dependent students. Now, if you add up those four categories for people working 41 to 50 hours a week, again you will have to trust me, it comes to 42.4 per cent. And if you do the same exercise with the 51 plus column, you will get 46.5 per cent. In other words, I am adding up the categories of families, whether they are headed by one or two parents, with children under 15 or with children defined as dependent students?---Right.

PN4912

All right?---Yes.

PN4913

You make the same comment, do you, with respect to the beach house, holiday house owner and the BMW driver?---I do not understand the question.

[3.25pm]

PN4914

The family with dependent children. There is a high incidence of people in the long hours columns with dependent children, families of - - -?---That is exactly what I would expect. People with lots of children have a higher income need, they are going to want to work long hours to make - they are trying to make as much money as they can, I would have thought. This is not a surprising result to me. This wasn't in the first report, was it, because I don't think I have seen this before.

PN4915

Well, you may be right, that table may not be in the first report?---Sorry, I just - they are interesting data.

PN4916

I thought you meant your first report. You did make the point in your first report, didn't you, with respect to the BMW, but I am quoting from the version of your paper that appeared in Economic Papers March 2001. This is a reported version, or a paper version of part of this document, isn't it?---Well, obviously there is similarity, and it came before this version. I hope there is some similarity.

**** MARK PETER WOODEN XXN MS DOYLE

PN4917

There are. The beach house comment, and the BMW comment are there. But it is just of interest that at page 37 of that document, and for the bench's benefit, this is Professor Wooden's paper, or an extract of it, reported in Economic Papers, volume 20, number 1, March 2001. That is an Australian journal, just for the bench's information. At page 37 there, Professor Wooden, you deal with this topic of, are long hours jobs, bad jobs: which is a topic you also visit in this version of the report. And you ask, should we feel sorry for persons who feel compelled to work long hours in order to maintain a beach house, and a comment about the BMW. But you make one extra comment that has not made its way into this report. You say:

PN4918

Moreover, ACIRRT ignore the possibility that hours may be used as a vehicle not to maintain a worker's standard of living, but to raise it.

PN4919

Is that what you were getting at there, when you said there may be people with children who want to improve - - -?---What I am say is, that hours are one way to get more money, okay. Just the money aspect of it. It may not get you more money immediately, but if it improves your job prospects, either be it security, or be it promotion prospects, it is a possibility.

PN4920

It is clear from some of the comments made in your report that you had read Dr Campbell's work before you filed the revised version of this paper. And it is clear that you had referred to some ACIRRT research, but had you had regard to the more recent report of ACIRRT? Not the one - you said that you have had a look at the other one, the Australian one, the first version of it?---Working time arrangements in Victoria, yes.

PN4921

Had you seen that before you finalised this report?---I had seen it, yes.

PN4922

It is just that - correct me if I am wrong, but it seemed to me that there were references throughout your paper to earlier work of ACIRRT- - -?---Sure.

**** MARK PETER WOODEN XXN MS DOYLE

PN4923

- - - from '95, '96, '97, but none from 2000?---No, correct. I didn't think it was appropriate that I do a review of one of the other submissions. That didn't seem a very smart thing to do. So I explicitly did not make reference to that later work, which I think is far more balanced than some of their earlier work.

PN4924

Now, I just finally want to ask you a little more about the characteristics of people working longer hours. You deal in part with this at page 16 of your report, if you can have a look at that. The second paragraph on page 16, and it was already highlighted in table 2:

PN4925

Long work weeks are closely associated with occupational status.

PN4926

Now, you go on to say that it would not necessarily, or you cannot necessarily draw distinctions between blue collar and white collar in that regard. And you say that there is a likelihood:

PN4927

The likelihood of working more than 44 hours in a week is extremely high among persons employed in managerial and administrative occupations.

PN4928

Now, I just want to ask you about that, Professor Wooden. Are you simply saying that among the group of managers and administrators there is a high incidence of people who work long hours?---Correct.

PN4929

Because when one looks at the data overall, there are also a high number of people in traditional blue collar occupations, as well as white collar occupations like nursing, teaching, etcetera, who fall into this category, aren't there?---Long hours working appears in all occupations.

[3.30pm]

PN4930

If you can just look back at table 2, which is what you are actually referring to in that paragraph, table 2. Again, it is that one that travels over pages 5 and 6?---Yes.

**** MARK PETER WOODEN XXN MS DOYLE

PN4931

Perhaps if we concentrate on page 6, which is dealing with the August 2000 figures. Sure enough we get a high percentage, 59.4 per cent of managers, administrators working 45 hours or more, but you would have noted and no doubt had in mind that associate professionals come in at 43.3?---Correct.

PN4932

That is why even then professionals on that table?---It is, yes.

PN4933

And you are aware of the ABS coding in terms of those occupational groups, how broad the category of professional is?---Very broad, yes.

PN4934

And you are aware that it includes, as I said, nurses, teachers?---Yes, it does.

PN4935

Many, sales managers, etcetera?---Yes.

PN4936

There is also a high incidence of intermediate production and transport workers. That comes in at 35.4?---That is correct.

PN4937

Are we to take from table 2 then this picture? That the incidence among those groups has gone up and down. We find - - -?---That has mostly gone up.

PN4938

- - - groups like intermediate production and transport workers increasing over the period, and others might go down?---Yes. In the '86 to '95 period I think you may find that it has increased for every single occupation group. In the '96 to 2000 it is a much more muddy story, and there is some ups and some downs there.

PN4939

Can I ask you about the distinction you draw in occupational groupings between overtime and hours per se? I am asking about a comment you make in the executive summary, back on (iii) executive summary, the second dot point from the bottom. Have you got that?---Yes.

**** MARK PETER WOODEN XXN MS DOYLE

PN4940

There is a paragraph that starts:

PN4941

The incidence and extent of overtime working varies with a number of worker characteristics. In particular, overtime is much more common among employers and the self employed than among employees.

PN4942

Now, if I can just pause there. Did you really mean overtime per se, or did you mean long working hours, which often are comprised of hours of overtime?---Yes. Presumably - - -

PN4943

The latter?---Presumably the latter, because a bit later on I got to incidence of so called unpaid overtime. So I was talking - presumably that reflects in the report which talks about - - -

PN4944

Well, it is just that overtime is a difficult concept?---Okay. But in general when I talk about overtime working here, I am including all additional hours, and then try to distinguish between paid overtime and unpaid overtime.

PN4945

Well, that is really my point, first of all. And you have just used the phrase, additional hours. But when one is talking of a white collar worker, or even the manager and administrator that you referred to, there may well be a notion of usual hours - and I don't mean that as a term of art - the hours you usually work, but there may not be that strict distinction between usual hours and overtime or additional hours that you have just referred to; would you agree with that?---Yes, there is no - yes, I agree.

PN4946

But despite what you say there about overtime, even if we do understand overtime to mean extra hours, to try and use a neutral term, is much more common among employers and the self employed than among employees. You don't dispute, do you, that there are, as a percentage of the work force, more employees who work extended hours than owner/managers, self employed, whatever you want to call them?---You are just saying that there are many more employees than there are self employed in the work force. Yes, absolutely.

**** MARK PETER WOODEN XXN MS DOYLE

PN4947

But also as a percentage the group of people who work more than 41 hours a week, there is a higher incidence of employees in that group than the people you are talking about here, employers and the self employed?---I would be surprised if that is so. Certainly for the percentage working more than 44, the managers has the highest incidence. We just saw that.

PN4948

Perhaps we are using the words in different ways?---Yes, perhaps we are.

PN4949

I will ask you be reference to the ACIRRT table. You have still got JS2 in front of you. Can you go to page 7 of their report. At page 7 of the ACIRRT report there is diagram 2?---Okay. I see where this is going.

PN4950

What this depicts is all employed persons?---Yes.

PN4951

And I am referring to the percentages that involve, that run along the bottom. And in the group of people who work 41 hours or more, which, for the purposes of this flow chart, is divided into 41 to 50 and 51 plus, we get, of employees; employees represent 17.3 plus 8.4, so more than 25 per cent of the work force. When I say work force I mean everyone who works, the total population, 8.7 million?---Yes.

PN4952

Whereas owner managers are only 4.8 plus 7.8, which is 12.6?---Of course. Yes. Because employees far out-number the number of owner managers.

PN4953

Right. So your comment was about - first of all, to understand your comment - - -?---Percentages within groups rather than percentage in the work force, yes.

**** MARK PETER WOODEN XXN MS DOYLE

PN4954

So I am just trying to understand - I mean, it is the executive summary. What you really mean there is that the extent of long hours, not overtime as a term of art, one will find, if one looks at the group of people who work those long hours, that high numbers of employers and self employed work long hours. That is the only point you are making there?---I was talking about the incidence, which means amongst that group what proportion were. But they are a much smaller group, so the point taken in terms of the global picture, if you just want to focus on sheer thousands of people, yes, employees are far more numerous, of course.

[3.35pm]

PN4955

And you go on in that same paragraph to talk, as you were saying, about the incidence of unpaid overtime, and you say:

PN4956

It is particularly marked among white-collar employees, especially those in the more skilled occupations, in contrast with blue-collar employees tend to only work overtime where they receive additional wages for each additional hour worked.

PN4957

I take it that is just a generalisation?---Yes, I use the word tend. Of course, blue-collar workers, some work paid overtime, some work salaries - - -

PN4958

Some have annualised salaries?---Some have annualised. Some get time off in lieu. All of the particular arrangements apply to all of the groups.

PN4959

And vice versa because of course you can - - -?---And vice versa.

PN4960

- - - think of white-collar professionals like nurses who get paid overtime?---Get paid overtime. Absolutely.

**** MARK PETER WOODEN XXN MS DOYLE

PN4961

Is it fair to say then that the real question might really be what is the hourly value of the work done? You add up all the hours you do and, regardless of the model of payment, whether it is an annualised salary or a salary with overtime or a salary with a bonus for having worked long hours, one thing you can do that is at least in greater respects neutral is just divide the annual salary or income by the hours worked and get an hourly value?---You can do that, but - and I would do it. I do not think I would have any problems doing that - - -

PN4962

Indeed you did that in the table we are looking - - -?---Indeed I did do it. Absolutely. Though there is a danger here and that is that all hours are not the same. So, for example, I personally would place a much greater - a different value on hours worked in the workplace than hours spent on my computer at home. But the reason is I can break off when my little one walks in and play with her for a few minutes. So it is a different - they are different hours.

PN4963

I agree with you, Professor Wooden, when you say all hours are not the same; it works the other way, doesn't it? Because hours worked between, say, midnight and 3 am might have a different value - - -?---Absolutely.

PN4964

- - - to an employee as well?---Absolutely.

PN4965

Or to an employer?---Absolutely.

PN4966

I have no further questions for Professor Wooden.

PN4967

JUSTICE GIUDICE: Mr Marles.

<CROSS-EXAMINATION BY MR MARLES [3.37pm]

**** MARK PETER WOODEN XXN MR MARLES

PN4968

MR MARLES: Professor Wooden, the Commission has seen a fair amount of material in this matter which is based upon a small number of participants that has produced that material. Would you accept in general terms that no quantitative results can be drawn from samples of 12 or 30 participants when you are talking about a very large population?---If you want to extend to the whole population, yes, I would say that is - I would agree with that.

PN4969

And based on a large population, such as a population of Australian workplaces as we are discussing here, would it be fair to say that even amongst 200 participants the standard errors involved in that kind of analysis would be too large to get any meaningful results?---Not necessarily, but if it is 200 and you want to extend the whole of the Australian population, yes, I would think that is probably true.

PN4970

Yes?---Yes.

PN4971

Now, Professor Wooden, have you read a piece by Professor John Benson from the University of Melbourne, entitled: A Report on a Survey of the AI Group on hours of work and the implications of the ACTU claim for changes to the terms and conditions governing overtime?---No, I have not.

PN4972

Could I ask the witness to be given a copy of that. Professor, this is a study which has been submitted in these proceedings and I want to refer you to page number 6, under the heading 3. Have you got that in front of you?---Yes, I have.

PN4973

You will see there that the paper annualises 189 responses from Federal award employers. Given your answer previously, would it be fair to say that 189 responses is not enough to give results of any significant confidence across the entire workforce?---I - - -

**** MARK PETER WOODEN XXN MR MARLES

PN4974

MR MOIR: Well, I object to that. My friend is misrepresenting the nature of the report. As its very title suggests, it is a report dealing with particular areas of Australian industry, survey companies within those industries. It does not lay claim in that sense to generalisations which can be applied across the whole of the economy.

[3.40pm]

PN4975

JUSTICE GIUDICE: That means the question cannot be asked. I think it is a submission, really, Mr Moir.

PN4976

MR MOIR: Yes. I will leave it at that, then.

PN4977

MR MARLES: Well, Professor, can I ask you - do you want me to repeat the question?---No, I think the answer is I agree with you. I think that you would need a bigger sample than that to generate - it depends on the size of the sector, but I presume there are many thousands of employees, in which case this would not be a big enough sample.

PN4978

Now, of those who participated in this piece of research, of the 189 responses, the report says that 72.3 per cent from manufacturing, 11.2 per cent are from high education, 5.3 per cent are from construction. Professor Wooden, that only three industries are used in this research, that would not give you a representative cross-section of the Australian workforce, would it?---No.

PN4979

And it is fair to say that those industries, construction, manufacturing, higher education, are very different, both in terms of the size of the employers and the kinds of employees working for them?---I agree.

PN4980

So is it also fair to say that in terms of giving answers to the questions that the survey asked, to give any kind of meaningful result which had any utility, you would expect the survey to control for each industry?---Yes, if we have got enough - it doesn't look like we have got that many cases from - one of them you said had a very small percentage.

**** MARK PETER WOODEN XXN MR MARLES

PN4981

Yes?---Yes, I would think that there would be some value in doing that: unless, of course, you found out that all the answers were very similar.

PN4982

But given the - - -?---I think you would need to test for differences.

PN4983

Yes. One small question. In your experience, Professor Wooden, you work in higher education. Would the Melbourne University personnel department know how many hours you work?---Not a clue.

PN4984

Now, Professor Wooden, is it fair to say you have dealt with a lot of survey material in the work that you do?---That is true.

PN4985

And you have a sense of what data can be given what weight in surveys? You have a feel for that?---I hope I do.

PN4986

You know what are well designed surveys, and what are not?---I hope I do.

PN4987

Is it fair to say that a mail-out survey would typically have response rates of, say, around 25 per cent, whereas phone surveys might have 40 percent, or even sometimes up to 70 per cent response rates: would that be a fair summary?---Depends who you are surveying. I take it you were surveying firms?

PN4988

Yes?---Yes. In terms of firms, mail-out surveys are notoriously getting poor response, and so 25 to 35 is quite common. Sorry, do you want me to comment on telephone surveys?

PN4989

Yes?---A telephone survey, I think it is again well established, you can get high response rates. I am not quite sure whether the numbers are as high as the numbers you said, but certainly you would be working - you would be trying to take 50 per cent.

**** MARK PETER WOODEN XXN MR MARLES

PN4990

Indeed. And the response rate is important, is it not, in terms of giving weight to the results of a survey?---Response rate is important if you are trying to say this sample is representative of whatever it is representative of. So if the non-respondents differ from the respondents, you have a problem. So any non-response is a problem, but the bigger the non-response, the more worried you get, I suppose.

PN4991

Would it be fair to say the response rate of less than 19 per cent is a very low response rate?---Yes, it is pretty poor. If it went to CEOs, though, that wouldn't surprise me. The response rates for CEOs, I don't know if it was meant to, but - - -

PN4992

But if it did not go to CEOs?---I would expect better from say, you know, Human Resource Managers at a workplace.

[3.45pm]

PN4993

Where you have a low response rate like that, and I think you have alluded to it, would it be important to understand why the rate was so low, why there was not a high response rate?---Well, it is obviously nice to know. It is not always easy to find out, because the fact is the non respondents didn't respond. So you don't know even about them. But yes, it is nice to try and figure it out, maybe hypothesise about what factors were at play.

PN4994

Would you agree that attempting at least an analysis of the non respondents, in terms of who they are, would be important in understanding the results of the survey?---Yes. If you have any information - for example, if you start from a sampling frame you then might know something about, well, certainly their industry, they would presumably know that, and maybe their size. Maybe they have some information about the non respondents. And then I would present how they differ from the respondents. But you are going to have limited information obviously.

**** MARK PETER WOODEN XXN MR MARLES

PN4995

Now, if a survey is being done of the same population, if you do a survey for a second time of the same population, would it be important to compare the results of the earlier survey with the later survey in terms of responses, who the non respondents are, who the respondents are, and so forth?---I am not sure I followed the question. I mean, obviously if your aim is to look at changes over time, you want to compare. But you talked about changes in response rates.

PN4996

Well, I suppose in terms of methodology?---Well, if the intent is to make comparisons over time, you want to keep methodological differences to a minimum. Of course, if the first time that a few things that perhaps weren't as good as they could have been, that is no excuse for not making a few changes to improve it the second time around. But yes, you do need to factor in whatever methodological changes occurred over the period and take that into account when you are summarising what you have done.

PN4997

Indeed. Now, on page 24 of this report, if I can refer you to that; do you have that page?---Yes.

PN4998

Table 28 on that page, you will see that there are answers that have been given in relation to the cost of the ACTU claim. In response to the first question, which is the cost per company, the number of responses is 23, and in response to the second question, which is the cost per employee, the number of responses is 16. Again, given your previous answers, not much confidence could be placed on those responses?---Yes, they would have very large standard errors attached to them.

PN4999

Yes. Now, you will see that that table there is not controlled for industry. That too reduces the utility of those results. We don't know which number of those companies are higher education institutions, or which companies are small manufacturing firms?---Well, given the size I wouldn't want to break it down any further. So that would present that. Again, whether you want to break it down by industry depends on whether you expect the differences. If there is good reasons to expect big differences, you have a problem. If you think the answers to these things, industry doesn't matter, it is not so problematic.

**** MARK PETER WOODEN XXN MR MARLES

PN5000

Well, if you are comparing a middle shop with, say, five or 10 employees, with Melbourne University, would you expect that those two things compared would give rise to big differences?---No. I think they would be very different.

PN5001

Professor Wooden, in general terms - I want to know whether or not you agree with this proposition about quantitative research. Quantitative research it seems seeks to get data which represents an accurate estimation of a fact within a population, for example, how many people will vote Labor or how many people will vote Liberal in an election. Is that a fair description of what quantitative research is?---Only part of it, okay, but a very important part and one that is often used; population estimates. So, that is one part, but it is not the only thing quantitative research does.

PN5002

Well perhaps - what else would it do?---The other, the other main thing is to study, to look at relationships between variables.

PN5003

Yes?---Okay, so you may not, it may not be a great population in terms of its representativeness [sic] but you can then model behaviours within this group and elicit information sort of in the same way qualitative research would do, but perhaps in a way that it is far more transparent and open to scrutiny and etcetera.

PN5004

And more representative, so that I mean if I understand what you are saying, to use the sort of political analogy, you might be comparing not just how many people are voting Labor, but how many over the age of 50 are voting Labor, that they are - - -?---Well, you can control for that factor, yes, you could say, well, I want to look at whether - that is right, whether - - -

PN5005

Sorry, I interrupted?---Like I say, things like age, gender, demographics, in this case it would be firm characteristics etcetera. If you had a - if you wanted to do an analysis of cost per company, what would the factors influencing it. If you had enough cases, and 23 clearly is not enough, if you had in the hundreds, maybe 100 to 200 at least, even though you don't have a fantastic representative sample you may be able to have a look, does education in industry make a difference,

**** MARK PETER WOODEN XXN MR MARLES

does size of firm make a difference etcetera, and hold those characteristics as constant.

[3.50pm]

PN5006

But in general terms, in terms of quantitative researchers, as I understood what your answer to the notion of comparing variables, comparing major quota, gender of voter and location of voter, it is that kind of thing that you were talking about?---Yes. I think I agree with what you are saying, yes.

PN5007

Well then I ask you to agree or disagree with this proposition, that qualitative research aims to provide in-depth insights into the kind of issues which produce effects such as, to use this analogy, why do people vote Labor?---Okay. I agree with what you are saying. Where I sort of disagree was the assumption that quantitative research can't do that as well, okay? That was my point. The other part of quantitative research is to look at behaviour and to look at - do exactly what you have just described, okay? But the difference with quantitative and qualitative is with quantitative you are basically stuck with a script, okay? If you get your script wrong you can't do anything about it, okay? The questionnaire is it. If you have tested it, you know, over and over again, you have run many pre-tests etcetera, it will be a great script. If you haven't you have got a problem. With qualitative research you always have the option of following different paths of opening as they arise. If it is a good researcher, I never thought of that, pursue that line of inquiry. You may uncover things that you hadn't thought of when you started your research. So that is the, I think the big advantage that qualitative research has got going for it.

PN5008

It actually allows you to interact with the participant that you are - - -?---It does allow you to do that. That of course has a danger, and this of course is the bit down side to qualitative research, is that it is much more open to interviewers contaminating the process. Now, you do that in qualitative research too, but the difference is it is not - - -

**** MARK PETER WOODEN XXN MR MARLES

PN5009

In quantitative research?---Sorry, in quantitative research too, but the difference in quantitative research is very transparent. In qualitative research, unless you listen to all the records of interview, you know, you as an outsider can never be convinced necessarily if you don't want to be convinced that what was said, what is recorded, is a true reflection of what happens. Also, you don't know the extent to which the interviewer's biases and priors may have guided the research, so it - qualitative research in many ways is far more difficult than quantitative research.

PN5010

Yes. Well, based on that, would it be fair to say that mail surveys are not an appropriate way in which to do qualitative research?---Qualitative research?

PN5011

Yes?---Well, then, mail surveys is a quantitative approach and quite - that is non sequitur. You can't do a mail survey to do a qualitative research project. It doesn't make sense, but - - -

PN5012

Professor Wooden, where different segments of a population may produce a different result it is useful to control for that segment when presenting data. Is that fair to say?---Yes, it is very useful.

PN5013

And in table 16 of your report which is on page 24, you have that, Professor Wooden?---Yes, table 6 - sorry, what table was it again?

PN5014

Sorry, table 16 on page 24?---Sorry, I went to - - -

PN5015

And it actually does go over the page to page 25?---Table 16, yes.

PN5016

Controlling, for example, in this table, controlling for gender is exactly what you have done, because two different results come up. Is that fair to say?---That is right.

**** MARK PETER WOODEN XXN MR MARLES

PN5017

And in table 2 of your report - sorry, I am jumping around everywhere here - which is on pages 5 and 6, for example, in that table you have controlled for occupation again for similar reasons?---Correct.

[3.55pm]

PN5018

Now, according to table, Professor Wooden, managers and administrators proportionately work longer hours or very long hours compared to other occupations; is that fair to say?---That is correct.

PN5019

Yes. Is it also fair to say that that as an occupation, managers and administrators, they would not have a high rate of work-related injury?---I do not know, but I would be surprised if they did.

PN5020

Yes. So if I can take you to table 15, in that table which deals with the incidence of work-related injury and illness by hours usually worked, and by gender, wouldn't it have also been useful in that table to control that for occupation?---Yes, I would have to agree with that.

PN5021

Is it fair to - - -?---Hold on a minute. I have done that. That is the point. That is footnote 16, isn't it? Okay, sorry - I wrote this a long time ago. Footnote 16 is in fact a test of that, which just provides a simple analysis of variants with occupation, and you can see, hey presto, occupation is highly significant. But the bottom line is that the - - -

PN5022

Occupation is highly significant?---Yes, it is highly significant.

**** MARK PETER WOODEN XXN MR MARLES

PN5023

Yes. Well, could I ask you, Professor Wooden, does it make sense to say then that if different occupations have different hours profiles and different work injuries, stress and illness profiles, then wouldn't you get better information if you control for occupation when comparing that with hours?---Well, I have done exactly that. I have done exactly that. So the bottom line is what I have done is, for expositional purposes, instead of having a table with, you know, whatever it is, 12 by 3 by 10 cells, which would be fairly hard to follow, I presented the simple table and then in footnote 16 I have run a three-way analysis of variants, which basically, what it tries to do is it puts sex, hours and occupation together. The results are recorded in that little funny box at the bottom of page 24. But the key conclusion is that - and I have said this - to quote from the bottom of page 23, I said:

PN5024

Illness and injury rates, however, are likely to be affected by a great many other factors apart from working hours. Most obvious is the nature of the job.

PN5025

So what - it is Richard, is it?

PN5026

Yes?---What Richard just said -

PN5027

And the extent to which it involves exposure to workers to hazardous working conditions. Nevertheless, after taking into account differences in the occupation and distribution of employment, there is still no evidence of any significant association between the hours worked by full-time employees and their injury and illness rate.

PN5028

So what you can see in the main effects occupation is significant, sex and hours worked are completely insignificant, and you can see that from the F test that is reported there. Sorry about the statistical jargon.

PN5029

Is it fair to say that it totals - or is it fair to say that totals 15, 16 and 17, none of those control for occupation?---In the tables presented, where I said I have done the analysis and it is reported in the footnote - - -

**** MARK PETER WOODEN XXN MR MARLES

PN5030

Yes, I understand that, but in the tables presented it is not controlled for occupation and the analysis that you did came up with the conclusion that occupation is highly significant; is that what I understand you to say?---Highly significant, but it does not interact with hours and sex in this case, so the hours and sex relationship which appears to be - sorry, the hours relationship seems to be insignificant. Now, what you are suggesting, I think, is that if you control for occupation, we would find a significant effect, and what we have done is done that and we did find a significant effect. So there is a three-way analysis of variants. You have three variables in the analysis. It is footnote - - -

PN5031

Well, let me understand this; you are saying that it would make - that these issues do not vary significantly by occupation?---What I am trying to say is occupation has a big impact on the incidence of work-related illness and injury, but it does not change the relationship we see there with the rate of illness and injury changing much with hours of work, which is surprising, I agree, it is totally surprising, but that is what we found.

PN5032

Well, I think all you are saying is that people who work long hours have those particular rates of illness and injury, but correct me if I am wrong, you are saying that different occupations have very different injury profiles; am I right in saying that?---You are correct.

PN5033

And different occupations have very different working hours profiles?---They do, but they do not correlate with the hours of work in the way you think. So, as I said, what we have done, just pretend a three-way analysis of variants is like a very simple regression, it is just simpler, where we have three variables, gender, hours of work and occupation. You can control for occupation and the sort of sex effect there disappears, if there was one; is there one? No, not really. Well, a little one. That disappears, but the hours effect does not change. The hours appear to be unrelated in this admittedly rather weak measure. But the hours - occupation effect very strong, but it does not change what you see in table 15. And because it did not change, I did not think it was worth pursuing by reporting tables with, you know, occupation appearing everywhere. Just was not worth it.

[4.00pm]

**** MARK PETER WOODEN XXN MR MARLES

PN5034

Are you saying that if you control for occupation, and you just looked at a particular occupation, and, for example, the incidence of work related injury and illness throughout the various hours categories within that occupation, you would have the same general trends as what is happening here?---Exactly.

PN5035

On page 25, Professor Wooden, at point 5 of that page, you say:

PN5036

With respect to some of the illness conditions often thought to be stress related, such as ulcers, recent medical research has demonstrated that other factors are far more significant.

PN5037

Do you see that quote?---Yes.

PN5038

I suppose the first question is, do you have any qualifications in the health related industry?---I have as many qualifications in health as I have in industrial relations: none.

PN5039

I am not sure what to make of that. Well, let me then ask you - - -?---Depends what you mean by qualifications. If you mean, do I have any University qualifications, no, but I have published in Social Science and Medicine, and the journal Preventative Health in America. But it doesn't mean - - -

PN5040

Would you accept that stress acerbates stomach ulcers if you already have one?---Sounds a fair assumption to me.

PN5041

Is that something you know?---I wouldn't claim to be an expert in stress. So, on stress related ulcers, no. But it sounds fair to me.

PN5042

JUSTICE GIUDICE: I thought somebody told us it was the helicobacter virus?---That's the one.

**** MARK PETER WOODEN XXN MR MARLES

PN5043

MR MARLES: Well, I think we understood that to be the cause. I am not sure whether we understood that to be the total effect. On page - same page, on page 25, in the paragraph below the heading, Summary. About half-way through that paragraph, you say:

PN5044

Stress per se, though, is not necessarily harmful to individuals. Instead, the consequences of stress depend on how individuals cope with it.

PN5045

Do I understand your last question to mean that you are not an expert in stress?---Well, I don't think I am an expert in it, no, but I have published a paper on it. So, define that. Work that out.

PN5046

Yes?---But I certainly don't go in and look at the, sort of, medical related conditions. So, I have looked at how stress impacts on injury rates, for example, but I don't have any clinical explanation for it.

PN5047

Academic literature talks about there being good stress and bad stress. For example, good stress prevents boredom, makes things interesting. Bad stress causes anxiety?---Yes.

PN5048

Is that the distinction that you are referring to here?---Yes, what I am trying to say is that, you know, just identifying stress isn't enough. What you want to know is, how do people react to that stress. And what you have just described there, I think, quite simply states that there are different types of stresses. Again, you need to control for that, and there is nothing done of that in here. There is no control for the different types of stresses in these figures.

PN5049

Would it be fair to say that outside the academic literature, stress is colloquially understood as being what we have just described as bad stress?---Yes, I think it is.

PN5050

Professor Wooden, could I refer you to figure 1 on page 8. Is this data in figure 1 - is based on May figures: that is correct?---That is right. It is one observation a year. Again, presumably to make the graph a little easier to follow. And that is all, just May.

**** MARK PETER WOODEN XXN MR MARLES

PN5051

In table 1 and table 2, you base your figures on August figures?---That is correct.

PN5052

And that would be true in table 4, 5, 6 and 9, excluding the 2000 figure: they are all based on August figures?---That is correct.

[4.05pm]

PN5053

Can I show you the August graph that would correspond to the graph that you have put in figure 1 for May?---Sure.

PN5054

Could I tender that, your Honour?

PN5055

JUSTICE GIUDICE: What is it?

PN5056

MR MARLES: It is the equivalent figure to figure 1 on page 8 of Professor Wooden's statement, only rather than based on the May figures it is based on the August figures?---Sure.

PN5057

JUSTICE GIUDICE: When you say it is the equivalent?

PN5058

MR MARLES: Well, it is the equivalent to the dotted line which is in figure 1?---It is average weekly hours worked by full-time employed persons for August. Is that correct?

PN5059

Yes.

PN5060

JUSTICE GIUDICE: Yes. Thank you. ACTU8.

EXHIBIT #ACTU8 DOCUMENT

**** MARK PETER WOODEN XXN MR MARLES

PN5061

MR MARLES: I think we have got out of order at some point.

PN5062

JUSTICE GIUDICE: We have. I think we are now back where we should have been. I think we went 7, 9, 8.

PN5063

MR MARLES: Yes. Professor Wooden, I suppose the first question in relation to that graph is, it is - it does look different, does it not, to the dotted line in your figure 1?---Well, there is a bit more - a bit more of a spike - a bit more of a rise in the early 90s, but it looks pretty similar to me otherwise.

PN5064

You are saying it looks similar to your document?---Well, I would - there is not a big difference, but it obviously is not the same, that is for sure.

PN5065

Well, perhaps could I show you in a more clearer version your dotted line graph, so this is the same figures are only for May. Your Honour, I would seek to tender this, but it is only the dotted line that appears in figure 1 of Professor Wooden's - - -

PN5066

JUSTICE GIUDICE: Yes. We will make that ACTU8A.

EXHIBIT #ACTU8A DOCUMENT

PN5067

MR MARLES: So, Professor Wooden, are you saying these look the same?---Well, they are not the same of course, but - so let us just clarify that. That looks pretty similar to me, yes. Just hold them up to the light and transpose them, and all that happens is in the August number in the - you get a bit of a blip in the August '94 which is one of the problems with choosing any old month, and the same problem holds for May, which is why I think you really need to do things like this, get all the months in there. You will get a better picture, which I apologise that I didn't do that either.

**** MARK PETER WOODEN XXN MR MARLES

PN5068

Well, can I just ask, in the May figures, it is your point I think that from 1994 through 2001 there is a flattening - - -?---Yes.

PN5069

- - - in the graph. Can I suggest to you that the flattening since 1994 in relation to the August figures is much harder to discern?---Well, no, it is - I would have - it waggles a bit, but I would have thought when you had August '94 in there it - you could even argue it has declined, but I wouldn't come to that conclusion. It just - August '94 is the highest, highest observation in the period.

[4.10pm]

PN5070

Yes. Well, I think I might run with your answer that it waggles a bit. You are prepared to say that, are you?---It waggles a bit. I would prefer you use data like this, and admittedly I didn't do it. I was being lazy, choosing the one month a year, and of course it has only got easier for us to do data like this in the last few months. The bottom line is, it is very, very flat, no matter what. If you take an honest assessment of all the available data, and this is presumably why I am here, to give the court some advice as to what the relevant data is, all this using one month a year - the reason we are doing it here is just the researches are just lazy. And that is me included, right. I chose May, probably because it was the most recent mid-month quarter. If I had waited a bit longer, we would have chosen August. I don't think it matters too much, as long as you as the researcher have a fairly good understanding of what the underlying trend is, okay? And because people cannot make much sense of that. That is a very horrible picture. But that is every month, okay? So you try and smooth it out, choosing one per year, sort of does that.

PN5071

It is the only set of figures in your report which refers to May, though, is it not?---Yes, it is. I apologise for that. I should not have done that. As I said, this draft was written - came from an earlier report, and I was just being really, really lazy.

**** MARK PETER WOODEN XXN MR MARLES

PN5072

Could I just ask, as a bit of an aside: you are aware - I think you mentioned it in your examination, that the ABS changed the labour force survey in April this year, in a way which would include more employees in the zero hours category: are you aware of that?---I am aware of it. Don't ask me to recount exactly what they did. I was aware of some change when it happened, but it is in one ear and out the other.

PN5073

Well, your table 1 - can I refer you to that - would seem to support that proposition, in that there is a big jump in the zero hours category from the year 2000 through to 2001?---There is a jump there.

PN5074

And that would have the effect, would it not, of reducing the average number of hours?---On actual hours worked, yes.

PN5075

Are you aware that the ABS has specifically warned about making comparisons pre and post April 2001?---The ABS always does that. The change to basic aggregates from this April change is incredibly minimal. It is a very small change. It is not like - and they did the same thing in 1978. They have had about four labour force redesigns, all of a fairly minor nature. We keep extending, doing these time trends. It won't have much effect, I can assure you. This redesign is very minor.

PN5076

But you are aware of the warning?---As I said, that is a standard procedure

PN5077

I take it that is a yes. Now, I think you have conceded in your examination that your figure, in figure 1 on page 8, is actually measuring full time employed persons, rather than full time employees?---That is correct. That is correct.

PN5078

Professor Wooden, employed persons - correct me if I am wrong - include owner-managers, self-employed and other non-award workers?---Absolutely.

**** MARK PETER WOODEN XXN MR MARLES

PN5079

And to be a full time aware worker, one would need to be a full time employee?---I would think that is normally the case.

PN5080

So you would accept, Professor Wooden, that in a case about award workers, full time employees is a more relevant measure?---Yes.

PN5081

Professor Wooden, do you have a copy of Commonwealth 1? If I could perhaps have that handed to Professor Wooden.

PN5082

JUSTICE GIUDICE: Mr Marles, I think we might finish there for the day.

PN5083

MS DOYLE: Could I just indicate to the bench, out of courtesy, that as far as the joint States are concerned, we will still be appearing generally. There may be occasions, depending on which witnesses are up next, on which I do not appear. Just out of courtesy to the bench.

PN5084

JUSTICE GIUDICE: Thank you, Ms Doyle. We will adjourn now until 10 o'clock in the morning.

ADJOURNED UNTIL TUESDAY, 27 NOVEMBER 2001 [4.15pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

IAIN GRAHAM CAMPBELL, ON FORMER AFFIRMATION PN4338
CROSS-EXAMINATION BY MR MOIR PN4338
CROSS-EXAMINATION BY MR BATES PN4426
CROSS-EXAMINATION BY MR COLE PN4484
CROSS-EXAMINATION BY MR WATSON PN4566
RE-EXAMINATION BY MR MARLES PN4628
WITNESS WITHDREW PN4642
EXHIBIT #ACCI1 OUTLINE OF CONTENTIONS AND WITNESS STATEMENT FILED ON 03/09/2001 PN4689
EXHIBIT #ACCI2 OUTLINE OF CONTENTIONS AND WITNESS STATEMENTS FILED ON 02/11/2001 PN4690
MARK PETER WOODEN, AFFIRMED PN4717
EXAMINATION-IN-CHIEF BY MR BATES PN4717
CROSS-EXAMINATION BY MS DOYLE PN4749
CROSS-EXAMINATION BY MR MARLES PN4968
EXHIBIT #ACTU8 DOCUMENT PN5061
EXHIBIT #ACTU8A DOCUMENT PN5067