C2001/3508, Transcript of Proceedings [2002] AIRCTrans 137 (7 January 2002)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

VICE PRESIDENT McINTYRE
SENIOR DEPUTY PRESIDENT DUNCAN
COMMISSIONER JONES

C2001/3508

APPEAL UNDER SECTION 45 OF THE ACT
BY AUSTRALIAN LIQUOR, HOSPITALITY AND
MISCELLANEOUS WORKERS UNION AGAINST THE
ORDER OF SENIOR DEPUTY PRESIDENT CARTWRIGHT
ISSUED ON 15 OCTOBER 2001

SYDNEY

10.09 AM, TUESDAY, 18 DECEMBER 2001

Reserved for Decision

PN1

VICE PRESIDENT McINTYRE: Could I have the appearances please?

PN2

MR J.W. NOLAN: May it please the Commission, I seek leave to appear for the appellant. With me at the bar table is MR N. SWANCOCK.

PN3

MR P. COLEMAN: Your Honour, I seek leave to appear for the respondent, Spotless Services Australia Limited.

PN4

VICE PRESIDENT McINTYRE: Leave is granted in both cases.

PN5

MR NOLAN: Your Honour, I think the Commission has received copies of an appeal book and outlines of submissions from the respective parties and indeed an outline of submissions from the ACTU.

PN6

VICE PRESIDENT McINTYRE: Yes, maybe I should record that the ACTU have sought leave to intervene in the matter and have put in written submissions. Maybe I should just ask you, Mr Coleman, do you wish to say anything about that application?

PN7

MR COLEMAN: Only that there's no opposition to that proposition, your Honour.

PN8

MR NOLAN: I'm grateful to Mr Coleman for that. Your Honours, Commissioner, I hope not just because it's close to Christmas but in the interests of cutting to the chase and the issue in the appeal, that I can deal with the matter fairly briefly. You've had the benefit of those written submissions to which I've made reference and what I'll endeavour to do is address what I think can be distilled to the essential question in the appeal in brief form and I've prepared for that purpose some additional submissions in reply. I'll hand up copies to the bench and a copy to Mr Coleman.

PN9

VICE PRESIDENT McINTYRE: Mr Nolan, I can indicate that the bench have read the submissions that have been lodged before today. There's just one matter that we'd just like to raise and maybe you could help on this, as to what exactly the order the subject of the appeal does. Have you got a copy of that?

PN10

MR NOLAN: The order the subject of the appeal?

PN11

VICE PRESIDENT McINTYRE: Yes, that's PR910288.

PN12

MR NOLAN: I understood that it gave effect to the stripping back exercise.

PN13

VICE PRESIDENT McINTYRE: Well, can I also indicate that the number at the top, C No 2001/324 is wrong. It should be 328. I think a correction order has either been made or will be made but that's the number of the ALHMWUs section 113 application that was filed in March. The first part of the order, I think changes the contents. Clause 2 deletes clause 16 and inserts in its place the following. Now, I appreciate that there's no dispute that the rates there do not reflect the 2001 safety net increase but is anything new put in there or is it just what's there already?

PN14

MR NOLAN: I'm told that there was an annotation in the award that said that the rates hadn't been reviewed and that was removed. I'm just endeavouring to pick up - it's in the award. The award was issued prior to these proceedings and I anticipate that the award had such a provision because the matter of the rates had not yet been attended to so it would make sense then for the order finally dealing with the rates to delete that annotation.

PN15

It all begins to become clear, if one looks at print PR903289, that was a decision of the Senior Deputy Presidents on 9 April 2001. That dealt with the award with exception of the rates and redundancy and the matter of the rates was still reserved, put into an appendix to that award, that document and the appendix deals with the extent to which the rates of pay were dealt with to include various safety net adjustments and so on. It's schedule one to the award it appears to be.

PN16

Appendix A on page 29 of that document, the print number of which I've given you, says this:

PN17

The following clauses of the Nationwide AWU and LHMU, Australian Defence Services Consent Award 1992 have not yet been reviewed pursuant to item 51 and will be the subject of further proceedings.

PN18

So that was on 9 April 2001. Those further proceedings then resulted in the issue about wages which gave rise to the order against which the appeal is now taken.

PN19

VICE PRESIDENT McINTYRE: So the award as varied by his Honour's order of 15 October represents the simplified award with nothing outstanding.

PN20

MR NOLAN: That was the balance of the exercise that was undertaken and resulted in that 9 April decision.

PN21

VICE PRESIDENT McINTYRE: Sorry, while I've interrupted, could I ask you this? The Miscellaneous Workers application that was filed in March, I think, of this year which is No 328 of 2001, do you submit that's still on foot or has it been determined by his Honour's order or what's the present position?

PN22

MR NOLAN: As we understand what the Senior Deputy President has done is that he's dealt with it on a final basis or proposed to deal with it on a final basis because at paragraph 38 of his decision, he says finally he declines to grant the application as sought by the LHMU. So we believed that we'd come to the end of the road in terms of the application to vary.

PN23

VICE PRESIDENT McINTYRE: Well, if that's the case, how could a 107 application have been made if the matter was no longer before the Commission?

PN24

MR NOLAN: Well, I suppose what he says was subject to the LHMU, subject to the 107 application. That was made, rejected, it came back when he issued his order. So I suppose it really has to be read in that way. I mean, I understand what your Honour says as a matter of English but you might be right.

PN25

VICE PRESIDENT McINTYRE: If the 107 application had been successful, something would have been heard by a Full Bench.

PN26

MR NOLAN: Yes.

PN27

VICE PRESIDENT McINTYRE: What?

PN28

MR NOLAN: Well, what's an interesting question because it may have been something that was the subject of some debate about whether what the union wanted ultimately was proper to be determined by a Full Bench as a special case and whether on reflection it was something that could have been dealt with as we suggest by the Senior Deputy President himself. I suppose the union was trying to keep all its options open by making that application and felt driven to do so and, of course, we don't have the benefit of any reasons from the President as was the usual course with those references. So who knows?

PN29

VICE PRESIDENT McINTYRE: Well, he refused the application and therefore the matter has not been referred to a Full Bench.

PN30

MR NOLAN: That's right.

PN31

VICE PRESIDENT McINTYRE: Doesn't it?

PN32

MR NOLAN: Yes.

PN33

VICE PRESIDENT McINTYRE: Is it your submission that it therefore remains before Senior Deputy President Cartwright to be determined or what?

PN34

MR NOLAN: Well, I suppose we could say that that might be a construction that was open, that having happened, but it seemed to us that the decision rather foreclosed the further agitation or re-agitation of any issue before the Senior Deputy President because the only thing that was left was the reference to the President. The reference having been declined, the Deputy President then proceeded to issue his orders, so he was of the view plainly that there was nothing left to be done.

PN35

VICE PRESIDENT McINTYRE: If a Full Bench had been constituted, what submission would the union have made to it? In effect, an appeal from the Senior Deputy President's decision?

PN36

MR NOLAN: Well, I suppose on one view that very charge may be levelled at the union. The Full Bench may have said, well, what are we doing here on a 106 reference? Wouldn't we be more properly constituted as an appeal bench because, on reflection, the Senior Deputy President should really have dealt with this issue himself. It wasn't a matter that was appropriate for a 106 reference, but perhaps all of these possibilities simply lend weight to the contention that we advance: that the matter is one that raises issues of significance and that the dilemma that the union finds itself in with respect to the original establishment of these rates is one that's not really addressed in terms in the various principles and guidelines, albeit it's something we say for which there is a sort of statutory solution evident in section 88B, and in the items. Just give me a moment, and I will see where I've wrong and seek some further instructions on this.

PN37

Mr Swancott has just corrected me on this, and that is that there were two separate issues, and if you look at paragraphs 38 and 39 of the Senior Deputy President's decision.

PN38

SENIOR DEPUTY PRESIDENT DUNCAN: Is that the decision of July 2001?

PN39

MR NOLAN: Yes, 24 July 2001.

PN40

SENIOR DEPUTY PRESIDENT DUNCAN: The copy of the decision in the appeal book doesn't have paragraphs?

PN41

MR NOLAN: You have just reminded me. I have got paginated copies to hand up to you.

PN42

SENIOR DEPUTY PRESIDENT DUNCAN: Yes, that's remarkable, it's removed them, I presume?

PN43

MR NOLAN: I think it's to do with the way they are stored on the Commission's website as it's currently configured, but if you download them in a particular way you get the paragraph numbers, but if you do it another way they seem to drop off, depending on how you do it and they're bullet point substituted, but anyway, that's the least of our worries now, we've got the numbered paragraphs. All I've got to do is try and make some sense out them for you. That's no reflection on the senior deputy president, I should hasten to add, it's only on myself.

PN44

VICE PRESIDENT McINTYRE: 38.

PN45

MR NOLAN: Yes, 38 is where the senior deputy president says that he's decided that:

PN46

The award already receive the MRA in accordance with the 1989 wage case principles.

PN47

and that really is the heart of the issue. He says:

PN48

Accordingly, it is not open to the Commission to vary the award under principle 3 of the statement of principles to adjust the rates in accordance with the MRA, and I decline to grant the application sought by the LHMU.

PN49

So that addresses that aspect of the matter, and then he goes on to say the principles- - -

PN50

VICE PRESIDENT McINTYRE: Well, subject to what follows.

PN51

MR NOLAN: Indeed:

PN52

The principle was designed to establish a stable matrix and minimum rates in awards covering ...(reads)... the LHMU with the opportunity to make an application under section 107 should it wish to do so.

PN53

So, as I understand the sequence of events, the reference was made. The reference having been made and declined, the order was then issued.

PN54

VICE PRESIDENT McINTYRE: Yes, well, the union put in written submissions in support of a reference application, as I understand it, though I haven't seen those, and the matter was the subject of some considerable debate before his Honour on 7 August, for which there's a transcript and I think some further submissions followed that, and then the matter was decided by the President.

PN55

MR NOLAN: Yes. But regardless of the sequence of events, or in spite of the sequence of events, when the matter was decided by the President, that seemed to conclude the matter because the Senior Deputy President then issued his order.

PN56

VICE PRESIDENT McINTYRE: Yes, that is certainly seems to be the view he took of it.

PN57

MR NOLAN: Yes, that's right, and we say that he was wrong.

PN58

VICE PRESIDENT McINTYRE: Wrong in what?

PN59

MR NOLAN: Wrong in his conclusion in paragraph 38:

PN60

The award had already received the MRA in accordance with the 1989 wage case principles. Accordingly, it is not open to the Commission to vary the award under principle 3 and so on.

PN61

Now, I suppose it's a case of many roads leading to Rome, but whichever way you approach it, the fundamental and pointed issue is this issue that the union contended that was addressed in that paragraph, that when you looked at the rates that were in the award it didn't matter which way you approached it, once you engaged a king of comparative exercise and you looked at the important decisions that followed the implementation of the minimum rates adjustment principles in the relevant main industry awards, the rate that was determined in relation to key classifications was out of kilter with the rates that were determined way back when this particular award was made, albeit it was made by consent.

PN62

It was made by consent in circumstances were the Miscellaneous Workers Unions were not a party to the award, they became a party later on, and it was made in circumstances where at the time those who made the award said various things, which I will get to about the award, the rates having been determined in accordance with the relevant principle.

PN63

Now, against all that background, the exercise undertaken by the union in the proceeding before Senior Deputy President Cartwright endeavoured to show, and we say showed quite conclusively that there was at least a prima facie case, that there was a disparity as between the rates that were set back then, not withstanding the claims that were made on their behalf, and what any reasonable person would regard as a properly fixed minimum rate in accordance with the requirements of the Act, and the item, and for that matter the principles, particularly when one has in mind that the principle, one could interpolate the statutory requirement, is the establishment of that stable matrix and minimum rates in awards covering similar work.

PN64

That question, if it was to be addressed at all, by evidence, immediately raised, at least the prima facie position, that such an exercise had not been undertaken, where if it had been undertaken, it had been undertaken erroneously, albeit in the light of later events when these important test cases were - in particular when the decision of Commissioner Merriman's was made in relation to the Hospitality Award, because that established a rate across the hospitality industry for those catering classifications which we pointed out which rate was well out of kilter with the rate that was established in the Nationwide Award.

PN65

So there was a real disparity there, and that had a very practical consequence for workers in this industry because the evidence was that there had been a contract change at Puckapunyal where Serco, I think it was, had had the original contract. The contract had changed over to Nationwide. the only real consequence of that, so far as the poor old workers were concerned, was that they were performing absolutely identical work doing exactly the same job, but under the Nationwide Award received substantially less than they did under the relevant award that applied to the employees who were then engaged by - the same employees, self same employees engaged by Serco.

PN66

Our point was that it can hardly be said that there was a proper safety net established in respect to this work when there was this gross disparity between absolutely identical work, identical rates of pay, and it couldn't be said that the Hospitality Award rates were themselves the subject of some sort of dubious process because they'd been set in that important arbitration undertaken by Commission Merriman in contested proceedings where everything was put into the mix and where it was pointed out in the submissions from the union that established an important rate in hospitality that then flowed to all the related awards in the hospitality industry.

PN67

So this remains at the end of that exercise is the anomaly, and it seems to us that if the anomaly could be addressed by Senior Deputy President Cartwright it may be that the only answer to the union's dilemma is that there is no answer and this disparity just continues on into the never-never. That can't be right in the face of the requirements under section 88B to apply to the Commission to established a properly fixed minimum rate, having regard to all that that entails and having regard in particular to the particular requirement placed upon the Commission under 88B(c) which of course requires the Commission to perform its functions, and it says it must have regard to the following:

PN68

The need for any alterations to wage relativities between awards to be based on skill, responsibility and the conditions under which work is performed.

PN69

Now, that's a statutory obligation cast upon the Commission in emphatic terms. The conundrum in this case is that that's a statutory question that can never be answered if the prior question about the establishment of these rates back in 1989 is answered in the way that the learned Senior Deputy President answered it. In other words, he said, "You're stuck with history" - that's effectively what he said - "the fact that it was made in the way that it was said to be made back in 1989 is the end of the argument. We can't go behind that or look at it in this exercise".

PN70

VICE PRESIDENT McINTYRE: Was that the way it was put before Senior Deputy President Cartwright?

PN71

MR NOLAN: Well, I'm told it was put that way. It might not have been put quite as floridly.

PN72

VICE PRESIDENT McINTYRE: Yes, but Senior Deputy President Cartwright, in paragraph 35, said he was satisfied that the award was adjusted in accordance with the MRA principle as it stood in 1992.

PN73

MR NOLAN: Yes.

PN74

VICE PRESIDENT McINTYRE: As I understand it, you take issue with that?

PN75

MR NOLAN: Yes. We say that he shouldn't have been satisfied with that.

PN76

VICE PRESIDENT McINTYRE: Yes, but having come to that conclusion, he concluded that, firstly, there was nothing for him further to do under the simplification rules.

PN77

MR NOLAN: Yes.

PN78

VICE PRESIDENT McINTYRE: Also, that principle 2 of the Wage Fixing Principles - or maybe principle 3 - did not provide a basis for varying the award.

PN79

MR NOLAN: Yes, and you could understand why he would reach that conclusion if the premise was that the rate had been fixed properly in the first place, you see. We took issue with the premise, with the foundation for the chain of reasoning, because we said what you have to do is look at the rate and you have to look at the rate by reference to, inter alia, the Commissioner Merriman decision. There is, in the appeal book, not just the reference to the Commissioner Merriman decision but the other cognate awards on security and contract cleaning.

PN80

We said if you're going to entertain the exercise that obliges you to fix a rate or be satisfied that a rate is fixed by reference to these relativities that are mentioned in 88B(3), and this idea of the staple matrix of comparing like with like, and so on, you can't just say, "Well, because it was said to be the case back whenever, that's the end of the argument".

PN81

In the face of prima facie evidence that is real and tangible which shows that there's something wrong with that proposition, the Commission is obliged, in our submission, to take the next step and undertake for itself the analysis that it's really required to undertake in each and every case when you look at 88B because it has to be satisfied, under 88B(3) and it's ensuring that a safety net of fair minimum wages and conditions of employment is established and maintained and, of course, that statutory provision must prevail over and against anything else that might emanate from the Commission.

PN82

VICE PRESIDENT McINTYRE: Did the Senior Deputy President refer to section 88B in his decision?

PN83

MR NOLAN: I'll just have to go back - - -

PN84

VICE PRESIDENT McINTYRE: My impression is that he didn't but I could be wrong.

PN85

MR NOLAN: He was certainly referred to section 88B in the course of the various submissions, and so on.

PN86

VICE PRESIDENT McINTYRE: I think it's specifically referred to in the application, isn't it?

PN87

MR NOLAN: Yes, I think it may be.

PN88

VICE PRESIDENT McINTYRE: Yes, "To remove anomaly - - -

PN89

MR NOLAN: That's right.

PN90

VICE PRESIDENT McINTYRE: But he was deciding, as I read it, the threshold issue.

PN91

MR NOLAN: In paragraph 16 Mr Coleman said:

PN92

Because the award rates ...(reads)... previous consent variations.

PN93

Of course, he goes on to reject that proposition. He doesn't take up the invitation. He says, "No, go back to 1989. It looks as if it was all done according to Hoyle. Because the AWU and the company turned up and made certain statements to Senior Deputy President Polites, therefore it follows that it has to be accepted as having been done" - and done, we would say, on that logic, for all time. So it could never be looked at for ever. It would just go on and on and on and on. Presumably you could have a work value case or something like that if the circumstances changed but, of course, different considerations apply if there's a requirement to examine work value.

PN94

SENIOR DEPUTY PRESIDENT DUNCAN: If you're successful in convincing the bench that the decision is wrong for some reason, would you then be saying that the matter should proceed again under 51(4) and 113, or one or the other? I picked that up

PN95

because of your current reference to 88B(2) and (3).

PN96

MR NOLAN: Yes. Well, 88B would be the primary statutory basis upon which we say what we say but, of course, we c all in aid 51(4) because we say that there's no contradiction between 51(4) and 88B. Section 51(4)(a) requires the Commission to be satisfied that the rates are operating a minimum rates and that can't have - - -

PN97

SENIOR DEPUTY PRESIDENT DUNCAN: Yes. The original application under 113, or raising 113, did set that application in the context of 51.

PN98

MR NOLAN: Yes, that's right. Well, it matters not, in our submission, whether it was characterised that way or characterised in some different way because, as I said before, all roads lead to Rome.

PN99

SENIOR DEPUTY PRESIDENT DUNCAN: I see.

PN100

MR NOLAN: We would say that the idea of a properly fixed minimum rate can't have a different meaning from 51(4) to 88B and you wouldn't regard it as having a different meaning, but 51(4) surely was simply the mechanism to achieve the objective that's then crystallised in section 88B, that is, the ongoing obligation upon the Commission to see to it that when it comes to fixing award rates it does so by reference to the safety net set out in 88B and 51(4) was the means by which 88B was to be achieved - - -

PN101

SENIOR DEPUTY PRESIDENT DUNCAN: Under the WROLA Act.

PN102

MR NOLAN: Yes - in the case of existing awards, the awards which pre-existed the 1996 Act. So 51(4) really provided the occasion, if you like, for scrutiny of all these awards and, as we say in the written submissions, it's not good enough to say, oh, well, that allowed the Commission to look at all those awards that were above or regarded to be in excess of what would, on reflection and having regard to 51(4) and 88B, be regarded as in truth minimum rates but properly established.

PN103

The paid rates review principle was elaborated specifically for the purpose of providing a framework within which the Commission would take awards that found them, have a look, measure them against the requirements of the properly fixed minimum rate and then take certain steps if it found out that they were in excess of them, but the paid rates review principle didn't, in terms, address this situation which really is the obverse of that proposition where the rates are lower than what would be properly regarded as a properly fixed minimum rate.

PN104

Now, we say we're not just left to our fate as a result of that, and we shouldn't be left to our fate, because the supervening requirement is the requirement upon the Commission to make a minimum safety net award regardless of whether what it finds, when it comes to deal with the award in question, is over the odds or under the odds.

PN105

It cannot be, in our submission, consistent with the statutory scheme for somebody who had the misfortune to be under the odds, when all of these approaches that have been accepted as proper for determining whether or not the rate has been properly fixed as a minimum rate, to be under the odds by some quirk in history, it can't be consistent with 88B for you to be just treated as though you're left to your fate and there's nothing you can do. There's no hope for you.

PN106

We say what's in effect sauce for the goose is sauce for the gander. If this machinery of award review and simplification can be adapted and approached to rein in the excesses that have been identified where the minimum rates are not being regarded as properly fixed, surely it's sufficient - and it must be, in terms of 88B - to address the opposite problem where the rates, on reflection and on analysis, are shown to be less than a properly fixed minimum rate.

PN107

That's it in a nutshell. That's a dilemma in a nutshell. So we shouldn't have been left to our fate. The Senior Deputy President should have undertaken the examination but he specifically declined to undertake and that passage that we read to you in paragraph 16 and he should have said well, look, the prima facie position has to be that when the award was set back in 1989 and the parties came along and said certain things about the award, that it appeared that the minimum rates adjustment process had been applied and was in the process of application in accordance with the then principle.

PN108

But on examination and further reflection, having regard especially to the Commissioner Merriman decision and other important decisions that had an impact upon the establishment of this stable matrix as it's so-called in cleaning, security, hospitality, the prima facie position is displaced because the plain facts of the evidence show that there is a gross dollar disparity between these workers, not just between these workers and others doing identical work elsewhere, but in our case, we have exactly the same bunch of workers transferring from employer A to employer B and suffering very significant reductions in wages when they're purportedly working on a minimum safety net award in both cases that's been established in accordance with 88B.

PN109

Now, it just makes a mockery. I mean, if you think through the scheme, it makes a mockery of the idea of a minimum safety net rate and what that then entails in terms of the establishment of the no disadvantage test and the other steps that were then taken in the event that there's enterprise bargaining or workplace agreements and so on. It makes a mockery of the notion of the safety net as the basis for other bargaining to take place when there are competing safety nets in effect because in this industry, you've got people competing for jobs and you've got employer A and employer B competing on different rates of pay, each of which is said to be, establish a minimum safety net for identical work.

PN110

Now, that's in our submission on any view an anomaly that needs to be and must be addressed if the dictates of section 88B(2) are to be paid regard to at all. I'm reminded that LHMU7 which was one of a number of, I think the written submissions that had been put up, it was said at paragraph 34 that:

PN111

The LHMU has foreshadowed its desire to lead evidence on the nature of the work performed by employees and defence ...(reads)... and on different rates of pay. The purpose - - -

PN112

VICE PRESIDENT McINTYRE: Well, isn't that what would have happened had a 107 Full Bench been granted? Evidence would have been called and a case mounted.

PN113

MR NOLAN: It may well have happened but it may equally have been the case that the Full Bench may have said what I said before, well look, why are we dealing with this? The Deputy President should have dealt with this. You're really under the guise of a 107 application. You're really effectively appealing against his decision to decline to hear this matter himself.

PN114

VICE PRESIDENT McINTYRE: But in your written submissions, not the ones you gave today but the earlier ones, paragraph 3, was that the union was denied the opportunity to further agitate for what it contended were appropriate properly fixed rates and further that the order was issued without reference and without the union having the opportunity to make submissions on options for responding to the refusal.

PN115

MR NOLAN: Well, that's right.

PN116

VICE PRESIDENT McINTYRE: Presumably one of the options would have been that the Senior Deputy President should have then continued dealing with the 113 application and hearing the case.

PN117

MR NOLAN: Yes, on the basis that the 107 reference which was really in terms of this issue about whether the thing was above or below the safety net was really the wrong question to ask. The real question was whether or not the rates were set properly in the first place.

PN118

VICE PRESIDENT McINTYRE: Well, maybe the 107 reference was required under the wage fixing principles because it was on the basis it was or may have been a claim above the safety net but the 107 reference determines who hears it, isn't it? A Full Bench or whether it continues to be heard by a single member and the public interest, if it only affects only employer even with 1000 employees or so, may not have warranted getting a Full Bench together.

PN119

MR NOLAN: Your Honour may well be right but, of course, the union was in this dilemma that on one view, issues of whether it was above or below the safety net in a sense addressed the wrong question as I have indicated so we'd be running around from forum to forum and bashing our head up against a brick wall wherever we went but we've got pretty tough nuts, you know, and that's why we're here and we're here to suggest to the bench that that was probably not necessarily, may not have been necessarily what a union was obliged to do.

PN120

In fact, it may have been covering all bases. Preferably what should have happened was that when the President declined to take up the 107 application, the Deputy President should have addressed the issues that we tried to get him to address but, of course, that invitation had been foreclosed by what he says in section 16.

PN121

VICE PRESIDENT McINTYRE: Yes, well, the order was issued before the union was aware of the -

PN122

MR NOLAN: That's right.

PN123

VICE PRESIDENT McINTYRE: Well, it may have been just after but in any event, the order was issued without further reference.

PN124

MR NOLAN: I think they crossed in the post perhaps and we didn't get a chance to come back. So we think that on reflection, what should have happened, of course, is that the matter should have gone on and been entertained and we should have been given the opportunity to put our best foot forward on the merits on this issue as it were and get the Commission in whatever form, preferably the Senior Deputy President to look at the merits and look at the issues that we raised so that they couldn't be raised simply because he was satisfied that that 1989 process had occurred the way it had occurred, notwithstanding the evidence that we put up to him.

PN125

In the process of answering those questions, I've really dealt with everything I think that I've said in the written submissions but I'd invite the Commission to read the written submissions. Perhaps if we had an anomalies and inequities principle like we did in the old days the matter could have been dealt with more fairly and squarely but it doesn't seem that the principals have really turned their minds at all or paid any attention to this situation which appears to be something of an anomaly where the rate that's set on analysis could be regarded as being under what would ordinarily be regarded as a properly fixed minimum rate for the purposes of the statute and that doesn't seem to have been addressed in any of the principles at all.

PN126

They've been concerned as one would expect with the rates that have been above the minimum safety net rate but we say that doesn't mean that we're without a remedy, that the primary obligation in section 88B must mean that we've got somewhere to go and we should be able to get the matter addressed. We think that notwithstanding what we've said to you about the public interest, the public interest ought not be discounted simply by reason of the fact that it appears to us that this is a relatively rare case.

PN127

We don't know of any other cases where people have come out of the woodwork saying hang on, our rates of pay were never properly fixed as minimum rates but simply because that's a possibility, it's not a reason for denying us a proper opportunity, we would suggest, to have the metes and bounds of 88B explored in terms of what we say was the obligation cast upon the Senior Deputy President.

PN128

All we can say that anecdotal it seems to us there are not many awards, certainly none that we know of in this category. If it was appropriate for so much attention to be paid to those that were above the fixed minimum rate, it's equally appropriate for these poor folk who are employed on a rate which arguably is below the odds to have their situation addressed.

PN129

So we say that notwithstanding that there don't appear to be flood gates that are there bursting ready to open, it's not a reason to say that there's not sufficient public interest in this for the matter to be properly agitated because it truly raises, we would suggest, a question of not just the discretionary approach that ought to be taken but what lies at the heart of the legal framework that establishes the regime of properly fixed minimum rates but there really is a legal question that underlies the particulars in our case and that is whether 88B needs to be addressed having regard to all of the things that we put to the Senior Deputy President and it's not just sufficiently addressed because historically something happened before Deputy President Polites.

PN130

Now, perhaps there was one other particular thing that needs to be said about the '92 proceedings. I think I've said in the written submissions that, of course, we weren't a party to those proceedings. It's erroneous to suggest that we're somehow or other caught by some sort of chain of transmission that ties our consent to the consent that was given back then although it might be said against us that we could have complained earlier and I fully acknowledge that but our underlying point is that if we're right about the statutory point that 88B obliges the Commission to undertake its own exercise of this issue of minimum rates and properly set minimum rates, well, in a sense it doesn't matter what the parties have said, how they've characterised things or what may have been said on account of the way the rates were established back when they were established.

PN131

They were no doubt said conscientiously but if events transpire to call into question the basis upon which the rate was set, well, then it must surely be called into question and that's particularly evident in what I've said to you about the anomaly of having enterprise awards like this that have quite different rates that apply to different employers who were contracting, tendering for exactly the same work. At tab 4 of the LHMU documents in the appeal book at paragraph 10, there's the - - -

PN132

VICE PRESIDENT McINTYRE: Sorry, what's tab 4?

PN133

MR NOLAN: Tab 4, the documents that were exhibits in the proceedings. If you look at LHMU4 - I'm sorry, LHMU5, the general submissions concerning relativities, what occurred there was that the whole of that passage from the transcript before Deputy President Polites is quoted where Mr Hampton for the employer makes his submissions and you will see there he said:

PN134

It is essentially a first award. It is not possible to say what are established rates and conditions for the entire depth of coverage ...(reads)... approval by the Commission -

PN135

and so on. So doing the best he could, he said, well, look, we've done the things that he describes there but we say that that's not sufficient to say that the matter is engraved in staying for all time. Upon analysis, if it transpires that the rate is significantly out of kilter with a properly set minimum rate that's set in accordance with these principles to which you've been referred, well, then, frankly it doesn't matter what was said back in 1992.

PN136

The primary obligation is to see that these employees have the benefit of a properly set minimum rate now, not that they're the victims of some historical event over which they have no control and which is visited upon them ad infinitum if the reasoning of the Senior Deputy President, with respect to him, is adopted. So we say that it wouldn't really matter as I indicated what was said or what concessions were made back when the award was made.

PN137

Looking at the position now a decade later, it can hardly be said that those ghosts should still be walking when one looks at the statutory scheme as it exists now. So, your Honours and Commissioner, I think I can conclude my remarks unless there are some questions.

PN138

VICE PRESIDENT McINTYRE: Could you just tell us please what remedy you seek in these proceedings assuming we were minded -

PN139

MR NOLAN: Well, the remedy we sought in the appeal documents is that the matter be remitted to a member of the Full Bench to be dealt with on the merits.

PN140

VICE PRESIDENT McINTYRE: There's several remedies set out, I think in your submissions. There's a remedy immediately following paragraph 3 that the order be quashed and a member of this bench hear the application.

PN141

MR NOLAN: Yes, be directed and determine the application on the merits in effect and we say that because the learned Senior Deputy President has already made a decision against us and we think it would be inappropriate to send it back to him in the circumstances, him having made the decision.

PN142

VICE PRESIDENT McINTYRE: I think the ACTU submission was that it should either be referred back to either the Senior Deputy President or the Full Bench for consideration, that's the last paragraph of their written submission.

PN143

MR NOLAN: Well, ordinarily, I mean, it becomes a matter of judgment whether you send the matter back to the person who dealt with it in the first instance or whether you send it elsewhere and I suppose the only difficulty that always arises in these cases is if the decision has been made, it's been adverse to the appellant and it's decided that they merit another go, it's always a little awkward to send it back to the person who made an unequivocal decision against their interests that was the subject of the appeal.

PN144

VICE PRESIDENT McINTYRE: Yes, but on one point, not having heard evidence or anything like that.

PN145

MR NOLAN: That's true. I don't want to be overly precious about it but I suppose the preference would be to have somebody who is completely divorced from the antecedent proceedings to hear the matter. May it please the Commission.

PN146

VICE PRESIDENT McINTYRE: Thanks, Mr Nolan. Mr Coleman?

PN147

MR COLEMAN: Your Honour, I've filed fairly comprehensive written submissions. I rely on those.

PN148

VICE PRESIDENT McINTYRE: Yes, we've got those, thanks.

PN149

MR COLEMAN: Perhaps in oral submissions, I'll just focus on the areas that Mr Nolan has focussed on and that is essentially whether the minimum rates adjustment process should be gone into again. Your Honours, just on the last point, the Senior Deputy President essentially decided the matter on the basis of jurisdiction in the context of section 106 of the Act and the two sets of relevant principles and that has bearing on should the appeal be allowed in part of full and it is necessary for the Commission to look further into these matters. Of course, we don't suggest that's the appropriate outcome.

PN150

It must be born in mind that Senior Deputy President Cartwright only looked at the question of do I have jurisdiction to hear and determine the union's claim? He answered that, no. If he was wrong in that, it's most appropriate that the matter go back to him for further determination. Your Honours, section 106 is an important and very relevant section of the statute because it substantially restricts the power of the Commission when not constituted by a Full Bench.

PN151

It prevents awards being varied or made by other than the Commission as constituted by a Full Bench except to give effect to determinations of a Full Bench made after the commencement of this section or are consistent with principles established by a Full Bench after the commencement of a section. So his Honour was correct in looking at the matter from the perspective of jurisdiction and his Honour had two sets of principles to consider. They were the principles emanating from the paid rates review decision and his Honour set that out in the written decision of July.

PN152

The second set of principles were the principles emanating from the safety net reviews, that is principle one and two. To determine whether he had power under either of those sets of principles to vary the award as sought by the union, central to both sets of principles was the question of whether the minimum rates adjustment principle had been finalised or the process emanating from the 1989 principle had been finalised.

PN153

To answer that question, his Honour had a number of pieces of evidence and material before him and in our submission he was manifestly correct in deciding that the process was exhausted. I think it's important, your Honour, in view of the oral submissions that my friend go to that material. Mr Nolan took the Commission a few moments ago to the extracts of the transcript for 1992 and I don't go back to that except to make the submission that as opposed to what was submitted to his Honour and submitted in the first set of written submissions, there was really nothing equivocal about the assurances given to the Commission at that time.

PN154

So there were those assurances given to his Honour Deputy President Polites in 1992, bearing in mind it was an application for a consent award under the then section 112 of the Act that required his Honour to take into account the public interest and involved in the public interest considerations was the question of whether the proposed consent award took into account the structural efficiency principle and the minimum rates adjustment principle. The assurances given by both parties at the time that it did are a very important material in his Honour's consideration and now in consideration on appeal.

PN155

The material on that question went further than that. The appellant accepted that the award was appropriate when it was made a party to that award some two years later. That comes by way of a properly made admission which is in one of their written submissions at tab 4 of the appeal book and exhibit LHMU5 paragraph 18 on page 5 where the union says:

PN156

As part of the agreed settlement ...(reads)... to the award -

PN157

and this variation to the award is reflected and a print number is given:

PN158

- issued in May 1996. As part of that settlement ...(reads)... then prevailing.

PN159

So it became party to the award some two years or so after it was made, several years after it was made, and accepted that it was an appropriate award. Now, implied in that is an acceptance of the minimum rates adjustment and the associated structural efficiency principle exercises had been placed into the award, contemplated in it.

PN160

It goes further than that. His Honour also gave consideration to further assurances that were given in 1994, some two years after the award was made and this material is apparent from the transcript of proceedings of 19 June at tab 3 of the appeal book, at PN283. His Honour had before him then, it seems, an extract of transcript from 1994 and I quote - and this was in the context of questions of the advocate for the appellant:

PN161

In terms of the record ...(reads)... it became a party to the award.

PN162

In addition to that his Honour, of course, had the existing wages clause before him and that showed all the hallmarks of a completed minimum rates adjustment process and, indeed, a completion of the structural efficiency exercise as well

PN163

VICE PRESIDENT McINTYRE: There's no issue that the process went through, is there? The only issue is whether it can now be agitated that it started off on the wrong foot.

PN164

MR COLEMAN: Well, when you look at the order itself which sets out the existing rates of pay, it's apparent on the face of the document that the process has been gone through and also gone through in an appropriate way.

PN165

VICE PRESIDENT McINTYRE: Yes, yes.

PN166

MR COLEMAN: You have the qualified cook, the apprentice qualified cook, having completed an apprenticeship, level pegging with the metal industry fitter, and the other classifications bearing appropriate relativities up and down from that.

PN167

Your Honour, just touching on the merits of the appellant's case, in the Paid Rates Review decision the Full Bench there said the emphasis, at least from that time on, is not external relativities but internal relativities. I can give a reference to that. I can hand up a copy of the Paid Rates Review decision. Page 13 of 20 in this print I've handed up - it comes under part 13 of the part headed "Decision" and there the Full Bench is dealing with relativities at about the middle of page 13. There Honours say this:

PN168

We now turn to the method of establishing ...(reads)... maintenance of internal relativities -

PN169

and they then outline the approach and setting a rate equivalent to the metal industry fitter's rate:

PN170

Adjusting the rate for the key classification ...(reads)... enterprise or similar basis.

PN171

Here the award has the appropriate classification pegged with the metal industry fitter and traditional relativity set. Even if the union got to argue the merits of its case there is really in substance no case there, in our submission.

PN172

VICE PRESIDENT McINTYRE: All they're seeking is to be able to argue it. They may well fail but, as I understand it, their complaint is that they've been denied the opportunity to present a case they want to present and that's it.

PN173

MR COLEMAN: It comes back to his Honour's power under section 106 of the Act and the two sets of principles.

PN174

VICE PRESIDENT McINTYRE: Well, under 106(2) it would be open to the Full Bench, wouldn't it, to hear the merits because if it does involve a change outside the principles the Full Bench has the power to do that, doesn't it, under 106(2)?

PN175

MR COLEMAN: A Full Bench would, but via the route of principle 10, an application under section 107 pursuant to principle 10 to the President, who would then, if he accepts the application, refer the matter to a Full Bench. The route isn't an appeal from his Honour's decision declining to hear the case on the basis of jurisdiction and then the Appeal Bench hearing a claim outside of the safety yet, and the appellant having made that application to the President back in August - - -

PN176

VICE PRESIDENT McINTYRE: I'm just wondering, is the only route via 107, now that it's in the statute, I mean, prior to this it no doubt was, but if an application is made that falls within 106(2), doesn't the statute of itself require it to be heard by a Full Bench? I just raise it, I've never had to think about it before?

PN177

MR COLEMAN: A Full Bench constituted after a successful application under section 107 to the President, not a Full Bench constituted to hear an appeal which is essentially an appeal from a single member who determined that he didn't have jurisdiction. What is important to bear in mind is that the application was made under section 107, and if it would assist, we are able to hand up the written submissions that the appellant made to his Honour at that time, but essentially it was an application made pursuant to principle 10 for an increase above the safety net.

PN178

VICE PRESIDENT McINTYRE: Yes, and the principles require a 107 reference.

PN179

MR COLEMAN: Yes, and that was declined. There's no appeal now before your Honours from the President's decision, but there would probably - I mean, as I think conceded in a different context in my written submissions, res judicata issue estoppel don't apply in these type of proceedings. It would be open to the appellant to make a further application under section 107, particularly if it had a different basis in which to put the application, and even if that involved having to make a further application to vary to then base that on.

PN180

VICE PRESIDENT McINTYRE: Under 113.

PN181

MR COLEMAN: Yes, and that can be done. It's not as my friend, Mr Nolan, put it, necessarily the end of the road for the union. The appellant does have further opportunities open to it, but its appeal from the decision of the Senior Deputy President, a decision where the Senior Deputy President essentially said, look, I don't have power under the principles in section 106 to hear it. That appeal is not the appropriate forum or context for a Full Bench to hear the merits of its case. It has other routes to take. It's not the end of the line if this appeal is declined.

PN182

Your Honours, Mr Commissioner, I made some written submissions which I put under the heading of discretionary considerations, bearing in mind his Honour did essentially decide the matter on the question of jurisdiction. In that it is important to bear in mind that the award made in 1992 was made by consent. It included, as has already been covered, it included the submission, that award was made on the basis of the submission of the parties that the minimum rates adjustment process was completed and reflected in the award.

PN183

Minimum rates adjustment was a one-off exercise in the contest of wage fixation in recent history. It's not a situation where a consent award at the end of its life can then be re-opened and subject to arbitration for further claims, and that's the normal process at the end of its life, that can happen. This was a one-off exercise pursuant to the 1989 national wage case, and it was completed, it's not appropriate some nine years later for one of the parties to the award to seek to disturb what was a consent arrangements made back many years before.

PN184

That submission is reinforced by the two further assurances that were given after the original making of the award, which I have taken your Honours to in a different context earlier. Whereas res judicata and issue estoppel don't strictly apply, the policy behind those important principles in the courts apply equally here for the proper administration of justice, in our submission. It's just not appropriate after issue is settled, particularly when it's settled by agreement and relevant assurance is given to then go behind that agreement to see whether that agreement, which at the time concluded the minimum rates adjustment exercise, did in fact do so.

PN185

Your Honours and Mr Commissioner, another important aspect is the objects of this part of the Act, as set out in section 88A. It's to set a safety net from which the parties are free to either collectively or individually to enter into agreements, and I'm instructed that there are some collective agreements in place at some of the sites which reflect higher rates of pay that in this minimum rates award.

PN186

Your Honours and Mr Commissioner, then focusing on section 88B(2) itself, when you have, as in this case, a minimum rates adjustment exercise having been entered into and completed by the parties and processed back in the early 1990s, and all that that implies, and it's clear that that minimum rates adjustment process was done in combination with the structural efficiency principle at the time as the award does reflect broad banding and those type of considerations.

PN187

When that exercise has been completed, clear from the face of the award it's been completed appropriately, and in circumstances where, as is the case here, all safety net increases since have been applied to the award, then in the context of section 88B(2), the Commission has fulfilled its obligations. It can't be said that the requirements of section 88B(2) require a thorough examination in the context of that history. Your Honours, I think I have addressed the areas that have been focused on by my friend, and unless there are any questions, I would just rely on the written submissions that have been filed.

PN188

VICE PRESIDENT McINTYRE: Thank you, Mr Coleman. Mr Nolan?

PN189

MR NOLAN: Perhaps just one thing in reply, may it please the Bench. I forgot to, although notice was given to our friends about this, I forgot to refer to a recent decision of a Full Bench of the Commission, copies of which I will hand up, which was just handed down the other day. It's print 912836. It's a decision handed down on 11 December in the National Building Construction Award, the Full Bench consisting of Vice President Ross, Senior Deputy President Drake and Commissioner Harrison.

PN190

This is not a decision we say is on all fours of our situation, but it's one where there was an examination by the Full Bench of the consideration undertaken by Senior Deputy President Watson of implementation of the 1989 National Wage Case Decision to the National Building Trades Construction Industry Award, and whether or not it had been applied in the way intended by the then existing principles, and it was said by this Full Bench that upon examination when it was determined to Senior Deputy President's satisfaction that the exercise had not been undertaken in accordance with the dictates of the then principles, it was appropriate for the Senior Deputy President himself to go and make the appropriate adjustments to the rates if he was minded to do so. It wasn't something that was necessary to then refer to a Full Bench.

PN191

Now, as I have indicated to you, it's not a matter that's completely on all fours with us, but there is an analogy there with our situation, and I do apologise for not having referred you to that earlier. Perhaps Mr Coleman might want to make some comments on the relevance, if any, of the decision, and we should let him do so. I am reminded of a similar position with the Building Trades Construction Award.

PN192

The union, in this case the ALHMWU put up for consideration to the learned Senior Deputy President the revised classification structure, that is to be found at LHMU8 of the appeal materials, so it wasn't just a bare claim for money as it were, it was something that had some real content to it in the sense that there was a new classification structure advanced before the Senior Deputy President. To that extent there is an analogy to be made with the matter that was before Senior Deputy President Watson in the Building Trades Construction Award.

PN193

Perhaps it would be convenient for me to just address briefly any other matters raised by Mr Coleman. The only thing that hasn't really been canvassed is a response to Mr Coleman's suggestion that there were collective agreements in place elsewhere. We can assume that they were built upon the existing award about which we complain and we see that that is no answer to our complaint about the way the system should be operating because if the rate that has been set in the first place is inappropriate, we said, of course that just compounds itself through the system because it then becomes the basis upon which a no disadvantage test is applied for the term of the collective arrangements or workplace agreements for that matter. That is all I propose to say in reply, if it please the Commission.

PN194

VICE PRESIDENT McINTYRE: Do you wish to say anything, Mr Coleman?

PN195

MR COLEMAN: If I may, I would like to say a couple of things. This was a decision concerning essentially whether the minimum rates that had just been processed had been earlier completed in this award and the Full Bench who heard it in this decision traces the history of the structural efficiency principle, the minimum rates adjustment principle, and then the application of those principles to this award and then at paragraph 45, turn to what is headed Conclusion, their decision.

PN196

It is clear from the history of the way the minimum rates adjustment process was dealt with before Deputy President Watson was that it was implemented on a trial basis, said to be 12 months, and for a limited geographical area, the intention being at the time that after a 12-month trial period the matter would come back to his Honour to determine whether it would then have general application.

PN197

It never came back to his Honour. It seems, from reading the judgment, that the process was overtaken by the new focus onto enterprise bargaining. So the review of the trial never occurred and the minimum rates adjustment exercise never had general application.

PN198

That is in significant contrast to the case now before your Honours where it was concluded, or the Commission was told it was concluded, it was enacted in the 1992 award and has been operating and attracting minimum rates adjustment safety net increases emanating from the reviews on each occasion that that's occurred - a significant contrast to the factual position in this award. Therefore, in our submission, it provides little or no assistance to the appellant in this case.

PN199

VICE PRESIDENT McINTYRE: Thank you, Mr Coleman.

PN200

MR NOLAN: Perhaps I could just say one thing in reply and that is that the thing that needs to be emphasised about the decision is that, notwithstanding what was said, everyone got the MRA increases. It wasn't as if no-one ever got any of the increases as they went along the way, as I read the decision. It was simply whether or not the process resulted in the flow-on of those trialled classifications elsewhere. May it please the Commission.

PN201

VICE PRESIDENT McINTYRE: All right. Well, thank you both for your submissions. We'll reserve our decision.

ADJOURNED INDEFINITELY [11.24am]