C2001/2647, Transcript of Proceedings [2002] AIRCTrans 138 (7 January 2002)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 4, 179 Queen St MELBOURNE Vic 3000
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TRANSCRIPT OF PROCEEDINGS


O/N VT01845
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT LACY

C2001/2647

PERSONS BOUND BY AWARDS

Application under section 149 of the Act
by RANS Management Group Pty Limited for
mention and programming re the entertainment
and broadcasting industry

MELBOURNE

10.17 AM, TUESDAY, 18 DECEMBER 2001

Continued from 7.12.01

PN1126

THE SENIOR DEPUTY PRESIDENT: Is there any change in appearances? No. Look, before we get under way could I just deal with a couple of housekeeping matters to do with the electronic facilities. The first thing I went to emphasise is that it is being conducted on a trial basis, and the parties are not obligated or obliged to use it if they don't feel comfortable with it at all, in other words, just conduct your case as you normally would.

PN1127

However, the Commission would be grateful, or I would be grateful if you would, to the extent that you are able to use the facility, use it along the way, and perhaps we could get some feedback at the end of the hearing about any difficulties that you find in using the facilities. One of the issues that has arisen as a result of the trial is the fact that there is confidential material on the website, and that is restricted to the parties and the counsel who are involved in the matter.

PN1128

And the reason that we have not issued to the parties a password for accessing the website is the necessity to obtain from counsel on behalf of the four people that will be issued with a password, an undertaking that those passwords will not be given to anybody else, only the people who are issued with the passwords. That is to protect the confidentiality and the integrity of the material that is on the website itself.

PN1129

So the site has been opened this morning by my associate using a single password, and this evening my associate will sign off with that password and provide each of the users at that time with the password so that they may have access to the material back in chambers or away from the Commission. It is important to remember that if you use the website and when you finish using it that you sign off yourself, because if you don't sign off, anybody else who comes along will be able to use the website.

PN1130

I think that is about all I wanted to say at this stage. And I apologise for the delay in getting started, but that has been due, of course, to the technical problems associated with the electronic facilities. So could I ask you, first of all, Ms Doyle, do you give an undertaking that the passwords that are given to you and your instructing solicitor will be restricted to you and your instructing solicitor?

PN1131

MS DOYLE: Yes, I give that undertaking.

PN1132

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN1133

MR DOUGLAS: And we give the same undertaking, your Honour.

PN1134

THE SENIOR DEPUTY PRESIDENT: Yes, thank you very much. Very well.

PN1135

MR DOUGLAS: Your Honour, Simon Arnold, who is here for cross-examination may go in the witness box. Could I indicate to your Honour that we requested that Mr Nichol not be in the courtroom during the cross-examination, but my learned friend indicated that she needs his presence for instructions purposes. I accept that. So I don't ask the Commission to make any ruling.

PN1136

THE SENIOR DEPUTY PRESIDENT: Very well, thank you, Mr Douglas. Could I indicate too that the witness statements will be displayed by my associate on the wall during the course of the proceedings.

<SIMON NICHOLAS ARNOLD, SWORN [10.20am]

<EXAMINATION-IN-CHIEF BY MR DOUGLAS

PN1137

MR DOUGLAS: Mr Arnold, your full name is Simon Arnold?---Correct.

PN1138

And your business address is the corner of Dorcas and Moray Streets, South Melbourne?---That is correct.

PN1139

And you are the managing director of RANS?---That is right.

PN1140

You have prepared a statement of evidence for the purpose of these proceedings, together with attachments?---That is correct.

PN1141

Yes. Is that statement, to your knowledge, true and correct?---It is.

PN1142

Could I tender that, your Honour?

PN1143

THE SENIOR DEPUTY PRESIDENT: Yes. I will mark that RANS17.

EXHIBIT #RANS17 STATEMENT OF SIMON ARNOLD, WITH ATTACHMENTS

PN1144

MR DOUGLAS: And as I indicated the other day, your Honour, I don't ask any further questions in-chief.

PN1145

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Douglas. Ms Doyle?

PN1146

MS DOYLE: I just confirmed, your Honour, that it was intended that Mr Arnold's reply statement to be tendered with that bundle, and I have assumed that as well.

**** SIMON NICHOLAS ARNOLD XN MR DOUGLAS

PN1147

THE SENIOR DEPUTY PRESIDENT: I understood that was the statement that was being - - -

PN1148

MR DOUGLAS: Yes.

<CROSS-EXAMINATION BY MS DOYLE [10.22am]

PN1149

MS DOYLE: Now, Mr Arnold, you were here for part of the first day of proceedings in early October, weren't you?---That is correct.

PN1150

All right. And I didn't actually see, but I gather you left at some stage during the morning of the proceedings?---That is correct.

PN1151

All right. And have you read the transcript of that first day of proceedings?---I have.

PN1152

Okay. Now, the witness who was here on the first day employed by RANS was a Ms Assuni, and she explained that she had been working in HR with the company, I think it was since July this year; is that right?---That is correct.

PN1153

All right. And my understanding is she went straight into her position in HR, she hadn't, if you like, worked her way up through the ranks of RANS?---That is also correct.

PN1154

Now, it transpired she had, understandably, little knowledge of the history of RANS involvement in local government contracting, but she did say that a file had been prepared for her at the time she commenced employment with RANS. Were you involved in preparing a file of documents for Ms Assuni to read and study before she came to the Commission in October?---Well, naturally that is how we induct all senior staff, is to prepare a bundle of information in terms of events that have occurred in the last few years, pending events, the likely issues that are on the table at the time that they join us.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1155

But you prepared a file for her, didn't you, specifically in preparation for this proceeding?---No, I didn't.

PN1156

Her predecessor, as far as I understand, was a Michelle Osborne-Smith. When did she leave RANS?---I am not sure precisely. Several months prior to that, I estimate March.

PN1157

Well, Ms Assuni said that she had had a look at a file in preparation for the proceedings, and that various people within RANS had helped her with research and preparation for giving evidence. Were you involved in helping her with research and preparation?---Naturally we had some discussions about it, naturally.

PN1158

Now, your statement explains that RANS is divided into what you would call, I think, four divisions or four streams; leisure and sports, sports venue management, arts and entertainment venue management, events and programs and consulting and staffing services. I just want to ask you a couple of questions about at least two of those divisions. You say that the leisure and sports division comprises approximately 45 per cent of RANS' revenue. Would it be fair to say that the bulk of the revenue for RANS comes from the first two divisions, leisure and sport, and arts and entertainment combined?---Yes, that is correct.

PN1159

And it seems that conducting events and programs and consulting are at this stage combined is 10 per cent of RANS' work?---Well, that is actually fairly arbitrary, because, you know, we teach, for instance, 40,000 children to learn to swim a year. Whether you attribute the income from those swim lessons to the sport and recreation venue management side or to the programming and event side, and all those decisions you make about the programming income that is within the venue management side would probably then have a significant impact on, does that revenue sit within the programming side or does it, in fact, sit within the two divisions you nominated as being the predominant income earners? So the way we approach it at the moment in terms of how we split our revenue, is that all of that programming revenue actually sits within the venue side. But you could equally argue that, well, there is a programming division that provides programming services to the venue side. So it is pretty arbitrary from our point of view really.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1160

So the figures you give in, I think it is - yes, it is paragraph 14 of your principal statement - the figures you give, as you say, are to an extent arbitrary and based on the RANS group accounting method of the day, and whether or not particular funds are assigned to one stream or the other?---Sure.

PN1161

All right. Now, within the leisure and sports division, if I can concentrate on recreation centres where there are swimming pools, whether it be indoor or outdoor, as far as I understand the evidence from both sides of the bar table in this matter, the staff at those swimming pools are going to include people of these kinds. There is going to be swimming teachers and coaches; you agree?---Yes.

PN1162

As well as the lifeguards?---Yes.

PN1163

There will at a lot of these places also be what you might call people performing gym instructing classes, there might be aqua aerobics, there might be the provision of gym classes?---Yes.

PN1164

Even massage facilities made available?---Yes.

PN1165

And many of the facilities will also have available kiosk or cafes for refreshments?---Yes.

PN1166

There will also be - I think your organisation also calls them customer service officers, performing ticketing and membership and sales, and the like?---Correct.

PN1167

THE SENIOR DEPUTY PRESIDENT: Sorry, was it customer services you said?

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1168

MS DOYLE: Yes.

PN1169

And there will also be at each centre one or more duty managers; is that right?---Correct.

PN1170

As well as a centre manager who is, if you like, the head of operations at any particular recreation centre?---That is right.

PN1171

Now, among your centres - I am just concentrating on those in Victoria for a start, and those where RANS has a management contract with the local council, local government - at each of those centres do you have one duty manager, or does that depend on the size of the venue, as to whether there are one, two or more?---It very much depends on the size. The size of the venues are dramatically different.

PN1172

I understand that at Harold Holt, from what I have seen in the attachments to Ms Assuni's statement, there is one person designated duty manager; is that correct?---No, that is not correct.

PN1173

How many are there?---Well, there is probably one duty manager in a venue at any one time, but there may be up to - and it would vary, depending on the slight change in the staff structure as time changes - but there may be up to five or six people within the venue who are designated as available to duty manage, and that depends a lot on rostering and so on in terms of - - -

PN1174

Well, that is the distinction I am trying to draw. There is a person who is the duty manager per se, but obviously given the opening hours of pools they can't be there throughout the entire period. So I just want to explore that in relation to the Harold Holt pool. My understanding is there is a person called duty manager, but as you say, five or six who are able to or viewed as being able to fulfil that duty out of the duty manager's hours or while they are on leave; is that right?---That is correct.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1175

Okay. Now, those five or six who are not the duty manager, but able to perform those duties, can you explain, do they get the duty manager rate for the hours they perform those extended duties?---Well, they are, I think almost without exception, they are a senior full-time staff member within the facility and they are paid an annual salary which includes, from our perspective, built into that salary the opportunity that they may be used as a duty manager, in fact, will be used as a duty manager.

PN1176

I see. So it is not casuals who, from time to time, perform duty manager roles?---They may from time to time. I am not really in a position to say precisely at the Holt over the last six and a half, seven years, how often that has happened, but it is common from time to time within the venues for a casual staff member to also be a duty manager.

PN1177

And if they do, if the casual staff member were a senior lifeguard, for example, who, from what I see in the AWAs, would be likely to be earning something in the order of $14.10 an hour?---Mm.

PN1178

If they were a lifeguard would they get the 15.10 or 15.50 that a duty manager gets for the hours they perform in that role?---Yes. As my understanding would be, that they would get a duty manager casual hourly rate if they were duty managing.

PN1179

All right. And as for the others, if someone were a full-time lifeguard - and I can't remember off hand what the salary applicable to that is, but I seem to recall somewhere in the mid 20,000s - if someone were receiving that income and they were asked to do the duty manager shift from five till 10 one night, that would all be bound up in their overall salary package, would it?---That is right. The full-time staff who would duty manage, that would be just part of their hours that they were being paid a salary for. The duty managing hours that, in fact, a full-time staff member may undertake may vary quite significantly, including, depending a little on whether they liked to duty manage or not, as well as whether we think they are a good duty manager or not, those sort of.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1180

And presumably whether or not they have demonstrated some skill and aptitude in supervision, because for the hours they are there are duty manager they are in charge, if you like, aren't they?---Mm.

PN1181

When Ms Assuni was giving evidence she suggested that although there were certain rates applied to the various classifications within RANS, there were staff who received bonuses and commissions, but Ms Assuni wasn't sure what they were, and she suggested they were under review. Can I ask you what bonuses or commissions are available to a lifeguard employed at the Harold Holt, for example?---Well, the main way that terms and conditions are altered within a company is on an annual performance review process. All full-time staff go through a fairly detailed performance assessment against the criteria of their job description and also some other criteria that we develop. They rate themselves and provide a commentary on how they have performed. Then their direct supervisor does the same thing. They go through each of those key parts of the job description, rates how they have performed, and looks at their rating versus the rating that their supervisors should, or believes they should have. And then the supervisor's supervisor walks through the review as well. That then - the person then is given an overall rating for their performance, and that is then - all full-time staff within the company are then referred to a committee, a senior staff committee internally, which - - -

PN1182

Sorry, I might just pause you there. Is your answer all about full-time staff?---Sorry?

PN1183

The answer you are giving presently, is that referable to full-time staff?---Yes, correct.

PN1184

All right. Well, I will let you finish that, although my focus was casual, but continue your answer?---Well, you just said - sorry, but I think you just said lifeguards. And because there have been - - -

PN1185

I understood that as the staff are predominantly casual, but in any event go on. You are describing the performance review procedure, yes?---Correct.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1186

It goes to this - - -?---So then it goes to a committee. That committee has been given a total amount of remuneration pool that is available to be split across all full-time staff across all the sites, and then that committee actually looks at a range of increases that are available to different levels of staff, and on their performance.

PN1187

When you say increases, do you mean salary increase for the next year? This review takes place in 2001, for example?---Mm.

PN1188

Is the increase you are describing an improvement that may be made on the lifeguards salary for 2002?---Well, I am actually trying to answer your question about the bonuses, so I am still working towards that. And then what happens is, any increase that someone might be entitled to is then split across potentially a salary increase or a bonus or, in fact, both. And then, in fact, the way that that may be paid is different too. So there is a whole lot of variables that come into play. It is a fairly complicated system, but it is a robust system that anyone can look at and see where they sit, I guess, in terms of how they have been reviewed and so on.

PN1189

So you say a lifeguard who does a good year's work at Harold Holt, and goes through this process may find that they get a percentage increase on their salary for the following year?---Mm.

PN1190

And or what, some kind of once off bonus payment?---Yes, or both.

PN1191

Which may be referable to what, the percentage of revenue derived at the site they work at, or the degree to which they have excelled themselves in their role?---Both.

PN1192

I see. What about a casual lifeguard, what bonuses or commissions, as Ms Assuni described, are available to a casual lifeguard?---I don't think there is any bonuses or commissions available to a casual lifeguard.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1193

Would you say the same about casuals who are swimming teachers, swimming coaches, about kiosk attendants, etcetera?---Well, what Henrietta was probably referring to was that there is a system under development which is going to apply for the current financial year, so from 1 July 2001, which actually is separate to the performance management system I just described, and provides a bonus pool back to venues who meet budget or do better than budget, and then there is some mechanisms of how that is split, and some guidelines of how it should be split, and about 30 per cent of that it is recommended is made available to the casual staff pool, but that is new, as I say, from 1 July.

PN1194

So that has not been implemented as yet?---It has been introduced to the staff as a concept, so they are aware that it is applying for the current financial year, but it hasn't actually - there has never been a distribution yet.

PN1195

Now, I just want to ask you a little about one of the other divisions you mentioned, the arts and entertainment division. As far as I understand it, the staff who might work in that division for RANS would be pretty diverse. There may be at an entertainment centre, for example, counter staff who deal with reservations and sales of tickets and events?---Yes.

PN1196

There may also be people you might call ushers or ticket collectors, etcetera?---Correct.

PN1197

I presume there would also be at some venues bar staff and food staff?---Yes.

PN1198

Would there also be people dealing with entry to car parks and car park attendants, etcetera?---Yes.

PN1199

Are there any other kinds of staff who are employed at the venues where you run arts and entertainment facilities?---There are many other kinds of staff, but there are many other kinds of staff in the leisure and sports you didn't ask me about as well. So there is a whole plethora of staff that we employ directly, contract staff, that are performing.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1200

Do you employ security guards or crowd control staff directly at arts and entertainment facilities?---Yes.

PN1201

Do you employ your cleaners and maintenance people directly at arts and entertainment centres?---Yes. Although I should add that with a lot of the different kind of staff you have mentioned there is a mix of those employed directly and those employed as contractors, in fact, even within the same site there might be some that are contractors and some that are direct employees.

PN1202

All right. Well, can I go back to sports and leisure again, and ask you again specifically about the Harold Holt pool. Cleaners, maintenance, gardening people, are they employed directly by RANS or through contractors?---Well, there is a mix. Can we take one at a time?

PN1203

Well, are you able to give a broad description? I mean, is it a group of people which are employed by you or - - -?---Well, for instance, it is quite common within our facilities, and again, at the Holt this is what exists, that there is a contract cleaning company that does the major clean every night, but there is some cleaning duties that are performed by some staff as part of their just normal daily duties. And that kind of an approach doesn't apply necessarily just to cleaning. It could also apply to gardening, it could apply to a number of those sort of tasks.

PN1204

You say during the course of the ordinary duties; what kind of staff do cleaning? Is it just cafe staff, customer service?---No. It may well be all the staff.

PN1205

What about gardening? I mean, if there are substantial outdoor areas to be tidied and/or physical gardening work performed, who does that?---Over the years the whole contract, that has actually, I think, I believe to the best of my knowledge, that it has actually moved from time to time to being contracted out to being done ourselves, when you are talking about significant gardening work. Right at the moment I am not sure but I think we are doing it internally,

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

but I think a couple of times it has moved from being externally and internally done.

[10.40am]

PN1206

During the periods that it has been contracted out by RANS, has RANS required that any particular rates be paid to those gardeners, or require that any particular industrial instrument or agreements apply to them?---No, not specifically.

PN1207

And during the time that it has been done in-house have those gardening staff been employed on AWAs?---Yes.

PN1208

With your staff who haven't signed AWAs, you might want to answer this question first about Harold Holt and then more generally. With staff who haven't signed them, do they nonetheless get paid the rate applicable to an AWA for their job description at the same site?---Yes.

PN1209

Does that apply to Harold Holt as well as the other sports centres?---Yes.

PN1210

Now, in your statement at paragraph 13, if you can just have a look at that.

PN1211

THE SENIOR DEPUTY PRESIDENT: Which statement was that?

PN1212

MS DOYLE: Mr Arnold's principal statement, the first statement of Mr Arnold.

PN1213

In fact, paragraph 13 sends you straight off to attachment SA2, so I might go to that directly, attachment SA2. Just to put it in context, Mr Arnold, SA2 you have described in the body of your statement as a complete list of the clients with whom RANS has contracts within its various business streams. Now, I just want to ask you about those under the heading, venue managements, leisure. Of the list there, as far as I understand it, if we can start with the top one, Australian Rugby Union, and then the second one, Centennial Park and Moore Park Trust. Other than those two - - -

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1214

THE SENIOR DEPUTY PRESIDENT: Sorry, could I just clarify something. I don't think the attachments to the first statement are actually on the website.

PN1215

MS DOYLE: Okay. In that case, for those looking at the hard copy, this is, I said, exhibit - attachment SA2.

PN1216

THE SENIOR DEPUTY PRESIDENT: Yes, thank you very much.

PN1217

MS DOYLE: On that list there, Mr Arnold, apart from the first two entries there, and if I can jump down, there is a reference to Crown Limited and Essendon Football Club, apart from those, these are all management contracts that RANS has with local government; is that correct?---With the exception of Contract Control Constructions.

PN1218

It is the case, isn't it, that Contract Control Constructions, is that the company that built the Wyndham Leisure Centre?---That is right.

PN1219

All right. Is that company not owned or at least partly owned by the Wyndham Council?---No, it is not.

PN1220

Who are they; are they contractors in between RANS and Wyndham Council?---Yes. Well, our contract is with them, and they may have a head contract with the council.

PN1221

All right. And the contract pertains to what, the Wyndham Leisure Centre, or are there any other - - -?---Yes, it is the Wyndham Leisure and Events Centre.

PN1222

All right, I understand what you say about Contract Control Constructions, and other than that it was the four I mentioned which are not contracts with local government; is that a fair summary?---That is correct.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1223

THE SENIOR DEPUTY PRESIDENT: Are contracts with local government?

PN1224

MS DOYLE: The others are, yes.

PN1225

Now, you go on at paragraph 22 of your statement to list RANS as competitors of the area, as you describe them, and you have provided some attachments to that as well. If I can just take you to paragraph 22. You say there are a large number of organisations with which RANS competes across its business streams, and then paragraph 2 goes through a number of those. Under the heading of leisure and sports venue management you mention, first of all, YMCA and Leisure Code. Those are both non profit organisations, aren't they?---This is a very complicated area, and I am going to give you my opinion, because that is what you are asking for, I guess. The YMCA is a national federation made up of a variety of state offices. Those state offices in the national federation are a non profit group. The YMCA, however, does own a number of private proprietary limited companies which hold the management contracts in many cases and actually do make profits which are then distributed to the state office and to the national federation.

PN1226

So distributed to the entities you have described as non profit?---Yes. And there are also YMCAs at a local level, incorporated bodies, which in their own right hold contracts and, again, make a profit on those contracts. And my understanding is with some of those local YMCAs, in fact, there is not necessarily a link to the state office or the head office or, for that matter, any appropriation of funds. In relation to Leisure Code, Leisure Code is actually made up of two separate companies, one is a profit making entity and one is a non profit making entity. The profit making entity provides services to the non profit making entity under contract. And I am not sure under their ownership structure what happens to the profits that the profit making entity makes that are providing services to the non profit making entity.

PN1227

I see. And the information you have about these two companies is derived from the attachments you have provided, namely 13 and 14, which are print-outs from those companies own websites?---No, no. My knowledge of those two organisations is much more substantial than what is on those two websites, but again, that is only my understanding of how the two structures of those organisations work.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1228

Now, under Leisure Code there is reference to Leisure Management and Marketing, and as you say, they are a smaller organisation than RANS, and you refer to predominantly Victorian leisure and caravan park operations. Now, that entity, Leisure Management and Marketing, does that compete with RANS in the area of tenders for local government contracts in the leisure stream?---It does.

PN1229

Has it succeeded in obtaining any tenders in that area?---Certainly.

PN1230

Which?---Which, contractors at one in the local government?

PN1231

Yes?---Well, it operates about 30, I believe, local government contracts.

PN1232

In what areas?---Well, a whole range of areas.

PN1233

Well, in what areas? I mean, this is a very detailed statement where you have referred to your competitors interests and the areas in which they operate?---Yes.

PN1234

Do they run pools, for example, do they run cricket grounds, football grounds, or do they run, as you say here, caravan park operations?---Well, they primarily run leisure and caravan park operations, as I have said.

PN1235

But is leisure there intended to indicate something different from the facilities you might find at a caravan park?---Leisure is a term that is used in the industry to mean recreation, aquatic, sport, gymnastics, pretty much anything that fits into what the government actually call community recreation, which separates it from competitive sport, if you like. So community recreation venue management, for whatever reason, has become known as leisure management.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1236

Sure. But which pools in Victoria does Leisure Management and Marketing operate through a contract with a local government in Victoria?---Well, a number of them.

PN1237

Which?---Well, I know that they operate two for the City of Monash, they operate one for the City of Springvale, they operate a number for - sorry, it is now the City of Greater Dandenong, but it is in Springvale, they operate a number for Yarra Ranges Shire Council. I could provide you a comprehensive list if you gave me time to think about it properly.

PN1238

No, that will suffice. Moving on to the next one, MRW, I should say, their operations, as you say, are predominantly in Victoria, aquatic and leisure facilities. Do they operate management contracts for local government in those areas?---That is right.

PN1239

All right. Again, a similar number to Leisure Management and Marketing, or a smaller number?---My intelligence is that MRW operate probably 15 to 20 venues, and Leisure Management and Marketing about 30.

PN1240

All for local government?---Well, no. Both MRW and Leisure Management and Marketing both run significant venues that are not local government.

PN1241

Right. So with MRW, how many of the aquatic of leisure facilities they run would you estimate are run through a contract with the local government?---My estimation with both companies would be 75 per cent of the number of venues in terms of the number of staff or the revenue, or whatever; it might be quite different.

PN1242

So perhaps it is better if you stick to bare numbers, because then you are saying, are you, 75 per cent of 30 by Leisure Management and Marketing, and 75 per cent of, I forget how many you gave for MRW?---15 to 20.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1243

THE SENIOR DEPUTY PRESIDENT: Is that what you mean, that 75 per cent of those numbers?---Yes. But that is just my estimation.

PN1244

MS DOYLE: And Splash Leisure, you say they operate primarily in Queensland. Does that company have any contracts with local government in Victoria to run leisure centres?---Not in Victoria, no.

PN1245

Okay. Now, I want to ask you about the tender for the Harold Holt pool. In earlier proceedings, exhibit ASU4 - perhaps Mr Arnold could be shown a copy of that. ASU4 is the document which is the contract between RANS and Stonnington. Do you have that with you, Mr Arnold?---Yes, thank you.

PN1246

The way this document works, and you would be more familiar with it than most of us, I assume, is that it sets out some of the tender specifications, and then goes into the body of the terms of the agreement between your company and the council. My understanding is that at the time of this tender, as this document indicates, tenders were called to operate the Harold Holt pool and/or the Prahran pool, and your company tendered for both?---No. We only tendered for the operation of the Harold Holt Swim Centre.

PN1247

And the Prahran pool, as you would be aware, has remained run by the in-house team?---Sorry, let me correct myself. No, we did tender for both; you are right.

PN1248

And the Prahran in-house team though succeeded in that tender, and have continued to run the Prahran?---That is right.

PN1249

So as far as I read this document, someone has made relevant amendments to make it clear that in relation to RANS this relates to the Harold Holt pool?---Yes. The council decided to, for some reason in this particular case, to execute, as you can see, a marked up copy. But that is a marked up copy that has a whole lot of changes in it, not just changes relating to the Prahran pool being deleted from it.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1250

Now, what the contract offered was council, if I recall, it was a contract to run a pool which initially was to run for three years with an option for the council to renew it for a further two, and, in, fact, that renewal has happened twice; is that right?---No. There was an initial three year term, then there was a two year renewal, then there has been two subsequent extensions since then which cover a total of about a 10 month period, which were primarily under this contract but with slightly different commercial terms, but still with both parties operating under this contract, and then there is a new contract being let which notionally started on 1 August.

PN1251

And what is the duration of that?---That is another three plus two years.

PN1252

All right?---So all that way through there we have been operating the facility for Stonnington from '95.

PN1253

Now, this contract gives a number of different options for the basic structure, in other words whether or not RANS will pay a fee to the council, or vice versa, and it is a little unclear. Can you explain in brief how does the contract operate. Is there a fixed fee paid to or by RANS; can you explain that?---Yes. The council bid the contract in such a way that it said, tell us if you are prepared to pay us a fee or if we have to pay you a fee to subsidise the operation of either the Harold Holt pool or the Prahran pool, or both. The Harold Holt pool, not surprisingly, several organisations offered a rental to be paid to the council for occupation or use of the facility and management of the facility, whereas Prahran required a subsidy to operate it, which really reflects the nature of the business of the two. So we currently pay a rental on, I think, a monthly or a quarterly - no, quarterly basis to Stonnington.

PN1254

All right. Now, your company collects the membership money, the ticket money as people come in the gate. What happens to that?---We retain that.

PN1255

All right. And your company provides cafe services and perhaps membership deals, gym classes, etcetera?

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PN1256

Again, your company retains all the income from that?---Yes.

PN1257

All right. And the rental fee you referred to, is that fixed throughout the life of the contract or in the circumstances in which it is reviewed?---It is fixed for the life of the contract, although it would be reviewable at the option period, and certainly was reviewable in that 10 month period I talked about, where we really had it in two different blocks of time within that 10 months.

PN1258

I see. Now, if I can just ask you about a couple of the more specific terms of the contract. If you go into the body of the contract, the numbering, I seem to recall, repeats itself over and over again, but the first time that page 4.9 appears - and I am looking at clause 4.4 - clause 4.4 is headed defaults and termination, and it is at the bottom of page 4.9. You have that clause?---Yes.

PN1259

Now, this clause indicates that if there is a default by a management agency, which throughout this document is RANS, if there is a default by the management agency under this contract the council may give notice, it may require RANS to show cause as to why a particular event has occurred or not occurred, and then the next step is that the council may suspend and ultimately terminate the contract. Is that your understanding of the way that the obligation between council and RANS can work in some circumstances?---Yes.

PN1260

All right. And if you just look down at page 4.10, in clause 4.4.3, it would seem to indicate that obviously if that occurs RANS just gets paid out, if you like, the accrued - of any accrued money it is owed, or, from what you have explained it, it probably just means you wouldn't be liable for any more rent from then on?---Yes.

PN1261

If you can go further into the document, at page 4.13, and this is a clause headed 4.5, subcontractors and employees. You have that clause, clause 4.5?---Yes.

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PN1262

Again, there is some requirements here, general conditions of subcontracting, it explains that management agency shall not accept pursuant to the clauses set out thereunder subcontractor or assign its rights under the contract. And then down the page at 4.5.2 it says that RANS shall engage sufficient employees with adequate skills and training to carry out the services in an efficient manner?---That is correct.

PN1263

You are aware of RANS' obligations of that kind. Now, if you can move forward quite a way through the document to page - it is 3.6, but it is virtually halfway through the bundle of pages there. And in the second part of the document that deals with service specifications. Unfortunately it repeats itself. Clause 3.3 is headed service. This appears about three quarters of the way down page 3.6 in the service specifications part of the document. It then explains a series of minimum services required. And under that heading there of target groups there is a reference to the people who it is intended to encourage to use the centre. Now, do you understand this to be a reflection, if you like, of that local government's commitment to the groups that might be in its community?---Yes, that is how I would understand it.

PN1264

And then it says that you must provide programs targeted at, and there is a whole series of people, older adults, people from a non English speaking background, schools, community groups, etcetera. Under 3.3.1.2, programs, there is then a list of specific programs that must be offered. Do you understand that RANS is required to provide those within the specification set out there?---Yes.

PN1265

All right. And then there are quite detailed requirements in terms of pool space being made available to the public. There is requirements in terms of recreational swimming and the like further down on page 3.7?---Yes.

PN1266

Then in clause 3.3.1.4 there is a list of fees, and there is a table that gives you the fees for Harold Holt, and then the fees for Prahran pool. Now, this is a maximum fee, and I assume RANS - this may well increase over time - but RANS charges those ticket prices as set out in the contract?---Well, we did initially. As you say, the prices have changed since 1995.

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PN1267

And then there is a right obviously given under that table for RANS to sell multiple entry ticket, goods, etcetera, as long as that price structure is reflected?---Yes.

PN1268

That cap on fees, that cap on ticket prices, that has been retained in the new form of the contract you have signed?---No. There is a cap on certain categories, some broad categories, particularly casual swimming, for instance. So adults, children, schools, and so on, casual swimming is capped for the first contract year, and then there is a whole lot of other services and products that aren't capped at all, and then there is a mechanism for review after the first year of those that are capped.

PN1269

I see. Over the next page there is a reference to opening hours, 3.3.1.5, and for Harold Holt Memorial Swim Centre there is a reference to, first of all, a broad obligation. The pool has to be open every day except Christmas Day and Good Friday. And then there is a more specific statement of opening hours that are required during ordinary weeks. Again, has that, regardless of whether the hours have changed a little, has that broad structure remained in your current contract?---Yes.

[11.00am]

PN1270

And then in 3.3.1.6 there is a reference to the requirement to accommodate non profit, like community groups who have been used to using the pool for particular purposes. Now, if I can take you through to page 3.13 in this section, there is a reference at clause 3.4, financial conditions, to RANS' basic obligations in terms of collecting admission moneys, etcetera. And as you have explained, due to the structure you have adopted RANS keeps those admissions, but I assume you have to report to the council as to the income that has been generated at the centre?---Yes, there is some broad reporting requirements. The basic financial model works that we receive the income, we pay out all the expenses, we pay the council the rent, if there is anything left that is our return from the contract, which is certainly not the only model applied, but it is one that is fairly common in running these sort of venues.

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PN1271

Then over at page 3.19 there is a reference to staffing. The general obligation under 3.7.1 is that RANS must employ sufficient numbers of suitably qualified and experienced staff to ensure the reliable provision of the customer services and supervision and safety. There is then a list of various acts that RANS must make sure that it adheres to in doing so. You are aware of those obligations?---Yes.

PN1272

Then there is some specific requirements given in relation to managers at 3.7.2.2. There is a reference to managers needing to have a degree of experience as well as first aid qualifications. The reference to managers there, is that someone we should understand to be the duty manager or the centre manager?---No. I think what they are calling a manger here is, in fact, the centre manager.

PN1273

I see. Now, if I can take you back to the first part of the contract finally, there is something in the first half of the contract I wanted to draw to your attention. Back at page 4.9, in fact, where I took you to the clause about defaults and termination of the contract, can you see the clause above the one we are looking at, clause 4.3, statutory and award obligations. There is a general obligation given in 4.3.1, RANS shall obey and ensure that its employees, etcetera, obey the Acts, regulations, etcetera, pretty standard. There is then a reference to award rates of wages in 4.3.2. It says there that RANS shall comply with the terms of any relevant federal and state awards in respect of its employees and subsequently amending awards, including enterprise agreements, and ensure that agents and subcontractors so comply. Now, with reference to that clause, I couldn't see any awards listed in the contract document. Did council draw any to your attention at the time of entering into this contract?---Not that I am aware of, no.

PN1274

And are there any awards or enterprise agreements that RANS has treated as attaching to it by virtue of that clause?---Well, RANS generally have seen themselves as being award free.

PN1275

Do I take it that is a no?---Well, I was going to go on, but you can take it as a no if you like.

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PN1276

Well, is there something you want to add to that?---No, that is fine.

PN1277

Now, given the structure of that contract, as you have explained, you have paid what you might call rent, but then retain entrance fees, etcetera. The way that RANS derives a profit under this contract, I assume, is by levels of staffing and rates of pay to staff, in other words, running it more cheaply than council may have or a competitor might have been able to tender for?---Well, no, that is incorrect. It is a popular misconception within the industry, but it is quite incorrect. I would estimate in the vast majority of contracts that RANS actually operates, the only way we actually make a return for the organisation is, in fact, by generating more revenue. If you looked across virtually all of the contracts that we have been in over the last 10 years, you will find that the expense structure is probably relatively similar to what it was run previously by another agency or by, in fact, an in-house team. In fact, in many cases you will actually find that expenditure has increased slightly in the order of something up to about 10 per cent. It is really growing in revenue, is what we focus on, and we - - -

PN1278

I see. But your - - -?---If I can just finish. And we do that for a whole range of strategies, increased marketing, increased programming, better service levels, often providing a whole range of products that haven't been offered before, taking more risks, quite often making a capital injection ourselves or together with the client partnering a capital injection.

PN1279

But I was asking you about this contract. Now, your ticket prices and admission fees, etcetera are capped, perhaps with some open endedness on the casual rates; right?---Mm.

PN1280

And to some extent staffing levels have to at least be above a minimum level. I mean, you have got to have a lifeguard there, I assume, you have got to have swimming coaches there. Within that structure the room to make a profit, as far as I understand it, is it would be in two principal areas, cutting your costs, and principally your costs of running the centre through staff, and perhaps in getting more people through the door. They are the two key ways that this

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contract would allow that to happen?---Well, the two key ways in deriving a better return from the contract would always be in maintaining expenditure control or increased revenue, but that is not how you first put your question, no.

PN1281

Do you know whether or not you employ more people to run Harold Holt pool in an ordinary week than the council did previously? I mean, have you looked at that comparison?---No, I haven't looked at it, but I suspect that in EFT hours we would be significantly up on what theirs were, if you look at the total number of hours employed.

PN1282

Whether or not it is more people, you have got more hours?---Yes.

PN1283

All right. But it doesn't cost significantly more, does it, because you are paying less per hour than the council pay for its person hours?---Well, no. We have never had a detailed look at what the pay rates were that they were paying versus the pay rates that we were paying. I mean, interestingly enough, and this is quite common in tendering, and I clearly remember the Harold Holt example, we weren't actually supplied with what was currently paid, nor would they have provided us with what was currently paid. So there wouldn't even be that opportunity post contract, winning the contract, to go back and review, okay, a year down the track, this is what was paid, and that is what that costs, and this is what we pay, and that is what that cost is. There is not that opportunity there.

PN1284

I understand that would be a pretty empty exercise, except, of course, you have done it in preparation of this case, haven't you? I mean, otherwise what is the fuss about?---Well, no, we haven't. I am really not sure what - when you say what the fuss is about, what is your question?

PN1285

Well, you understand, Mr Arnold, that the entire purpose of this application is to establish that RANS be allowed to maintain its position as being award free, a phrase you have just used a moment ago, and the focus of the application is on the Local Authorities Award?---Mm.

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PN1286

Are you suggesting that you are not familiar with the rates or the structure provided under that award for employees?---No. But I am answering your question, which is, have we evaluated whether the cost of us employing our total number of hours at the Harold Holt under our arrangement costs us the same or less than the same number of hours under the internal management structure that was used prior to 1995. And all I said to you simply was, well, I am not sure because we have never done that exercise, nor were we ever provided with the information in order to do that exercise if we chose to do that exercise.

PN1287

But you are aware, aren't you, that hour for hour the RANS rates are lower than those applicable under the Local Authorities Award?---Well, we haven't had a serious look at the Local Government Award. There has been no need or no purpose for us to look at the Local Government Award.

PN1288

I see?---Sorry?

PN1289

I see. Can I ask you then about a couple of the specific other contracts that RANS has been involved in, leaving aside Harold Holt for a moment. There has been reference in some of your materials to the Coburg pool. Now, that is a pool run by the Moreland Council, and that was tendered out to RANS in 1997; is that right?---Well, there is three facilities within Moreland. We have run all of them at different times during the years. It depends which one you are talking about.

PN1290

The Coburg pool?---Well, the Coburg pool we were running prior to 1997. We started running Coburg Leisure Centre, I believe, in 1997. If I can just correct you too, you said it is operated by the City of Moreland. It is actually operated now by - all three pools are now operated by the YMCA. So they are owned by the Moreland City Council, but they are operated now by the YMCA.

PN1291

I see. So the Coburg pool, which is under the auspices of Moreland Council, was tendered out to RANS for a period?---Yes.

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PN1292

It then was offered up again, and RANS didn't succeed or RANS didn't participate or compete against?---We held a contract for a number of years. It was then re-bid to the market, we won it again, ran it for several more years, and then it was bid again, and we didn't bid on it.

PN1293

And was that the occasion on which the YMCA succeeded in getting the tender?---Yes.

PN1294

All right. Now, then there is the La Trobe Council. I understand that RANS has for a period run its Morwell Leisure Centre?---That is right.

PN1295

Was that from 1994 or until 1994?---No. From 1994.

PN1296

All right. And at the end of that contract it was taken back in-house by the council; is that right?---That is correct.

PN1297

All right. Are there any other contracts that RANS has operated in Victoria where, at the end of the contract or during the contract the running of the centre has been taken back in-house by council?---Not that I am aware of, not that spring to mind.

PN1298

All right. The staff at the Coburg pool and the Morwell Leisure Centre, the ones we have just described, Coburg going back, or being tendered out to the YMCA at the end, and Morwell going back in-house, the staff that RANS employed, what happened to them? Were they given - those who were full-time were they given redundancy packages by RANS, or were they found other positions?---It really does vary person to person, case to case. There were certainly some Coburg staff who were retained by the organisation and were redeployed elsewhere. Morwell, there were some discussions along those lines, but I don't think actually any of those occasions occurred, probably primarily because it is a regional venue and most of those people obviously live within the La Trobe Valley.

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PN1299

Unless opportunity to come down here and work at one of your other centres?---Yes.

PN1300

And so what happened to those people? If they were full-time did they get any redundancy or notice?---Well, my understanding is that all of those staff at Morwell were retained by the La Trobe Council to continue to operate the Morwell centre, and that was that its contract where in any degree the actual operating costs of the centre were underwritten by the council. So if there were any liabilities, redundancies and so on, the council would have met them anyway.

PN1301

The council would have met them?---Yes.

PN1302

So do we have a picture at Morwell Leisure Centre of the council contracting out. Did you pick up a lot of their staff?---No. It was a brand new centre.

PN1303

I see. And then when it was taken back in, people had to be let go, the council paid for it?---Well, no. The council paid for, unlike the Harold Holt, and so on, in the Morwell example the council actually underwrite any loss. So we run the business day to day, but if there is a loss at the end of a year they underwrite it. So if there were some redundancies to be paid hypothetically, they may be paid out of profits. But then if the centre went from, you know, a profit to a loss situation, then the council would pay for those indirectly, I guess.

PN1304

I see. Now, in Queensland, I understand that RANS had some local government contracts, but is the position that you no longer have them?---We had one for five years with Red Cliff City Council.

PN1305

Which city, sorry?---Red Cliff.

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PN1306

I see, yes. And what happened there? Did that lapse or was taken back in-house, contracted out?---The contract was a five year contract. The council didn't re-bid it, they were actually going to sell the centre to the local school, then they were going to employ the local school to run it, and my latest understanding is that the council may run it themselves but may put the school in as a major tenant, and the school may help them run it.

PN1307

I see. Can I ask you about upgrades at some of the sites you mention in paragraph 15 of your statement. This is Mr Arnold's principal statement still. You describe there a number of upgrades to centres. First of all you refer to the Harold Holt centre, and you say there that you have introduced some new programs and major events, etcetera, and you refer to upgrades and refurbishments. Can I just clarify, was the upgrading in nature, was it in the canteen area or the reception area, or have there been upgrades to the swimming pool itself?---Well, there was a significant upgrade to the entry area, the reception, the cafe area and so on, which we funded. I will also add that there was significant upgrade to the plant by us in the early days because the old City of Malvern hadn't really spent a great deal on the plant in the last five years probably before we entered into that contract.

PN1308

What do you mean by plant? Equipment or viewing facilities?---No. The actual plant room which filters and cleans and heats the water.

PN1309

I see. Was that part - was the second part of the upgrade the canteen area, the reception area, was that part of the terms of the renewal of the tender, or was that something that RANS undertook of its own motion?---It was part of our initial bid was that commitment, so part of our tender bid was that commitment to do that.

PN1310

I see. And did you set, in your communications with council, did you say we will spend X dollars?---Yes.

PN1311

Or did you refer to the result; did you say, we will upgrade?---Both.

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PN1312

I see. Would the same go for Altona? You refer there to an $800,000 development of the gym, admin area, spa, etcetera. Again, was that part of the terms of your tender to the City of Hobsons Bay?---Yes, it was part of the offer.

PN1313

You refer to the gym there. Is that a fit out of the gym, or is it purchase of equipment for the gym?---It is doubling the size of the gym actually in terms of the footprint of the gym, completely refurbishing the internals of it, new carpet, new walls and so on, new lighting and completely new equipment as well.

PN1314

Now, in terms of the way that you apply your casual staff to positions and sites within the operation of RANS, can I ask you as a general proposition, I take it there are a number of casuals in the employment of RANS who might do lifeguard duties at two pools within Melbourne metropolitan area. They might do one pool in the morning, another one at night, go back to the first one for the weekend shift, that kind of scenario?---Sure, yes.

PN1315

People who do aerobics instruction, for example, might similarly go from one pool to a leisure centre equally in the course of a day?---Yes, that is correct.

PN1316

And in both those scenarios, the lifeguards and the aerobics instructor, their individual shifts might be relatively short, three or four hours here and there. Is that a fair summary?---At times, yes.

PN1317

The same goes for swimming teachers and swimming coaches, they might be coaching at the same time at a couple of different pools on different days of the week?---Possibly.

PN1318

And then there are also, I assume, people who are customer service officers or even duty managers who might get approached by RANS and told, you are doing quite well, that we would like to promote you to duty manager at such and such a centre; does that kind of thing go on?---Yes.

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PN1319

Of the examples that Ms Assuni gave of staff movement, I am referring to her, I think it was exhibit RANS16. There is no need to go to it, but you recall the exhibit that was created to show what you called a sample of staff movement. In terms of the staff movement at RANS, there is not much between divisions, is there? There is a degree of activity within leisure and sports, and a degree within arts and entertainment, but there is only isolated examples of transfer across those divisions, isn't there?---No. There is quite a lot of transfer between divisions, but it does depend on the sites and their geographic location to one another.

PN1320

And on skills, I assume. I mean, do you often get the lifeguard from Coburg pool becoming a car park attendant at an entertainment centre?---Absolutely.

PN1321

You do?---Yes. Quite common. I mean, in Melbourne we see it quite commonly with staff at some of our aquatic centres working at the Royal Exhibition Building, in Tasmania where we were running both the Derwent Entertainment Centre and at one stage the Hobart International Aquatic Centre, we got an extraordinary amount of cross fertilisation of staff, if you like, between the two centres.

PN1322

Where that occurs does the pay rate under the AWA or, as you say, regardless of whether it has been signed, that is what you get, does the pay rate differ? In the scenario you gave, if there is a lifeguard who is doing a shift at a pool in the morning and a shift in a car park in entertainment centre at night, do they have two AWAs that apply to them?---They normally wouldn't have two AWAs, but they would have two pay rates.

PN1323

I see. Which would be dependent on the facility, not on the individual?---It would be dependent on the facility and the role they were undertaking at that facility.

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PN1324

You don't though have a pool of casuals, do you, in this sense? You don't, on Monday mornings, ring up everyone that you think you will need to do lifeguard duties at Coburg pool and draw them in from all over the metropolitan area. There are people who work at Coburg, there are people who work at Altona, there are people who work at Werribee, etcetera?---Well, yes and no. That is a difficult question to answer. I would say in some - if you look at a standard RANS week, what you have just described is probably true. But, for instance, if you look at the, again, the Tasmanian example, the Derwent Entertainment Centre, where we have about 60 casual staff, those staff were deployed for 10 Days on the Island, which is a large festival there, which uses something like 21 different venues, so those 60 staff were distributed across 21 different venues over 10 days. Likewise when the AC/DC concert was there most of those 60 staff were used at a different council owned venue, but working for a private company, to provide services there. So all the time they have been working for RANS but then working in different venues, and they have been in a way almost subcontracted through the different people.

PN1325

But if we can bring the discussion back to Victoria. As I said, there may well be a lifeguard who is working at two pools every week, months on end, but you don't have a scenario where you call up your metropolitan lifeguards at the beginning of each week and say, this week you are at Altona, next week you are at Werribee, the week after you are at Windy Hill, etcetera. You don't run like a labour hire company?---No, we don't do that. But it is very common, and it is important to make the distinction, we don't do that, but it is very common if a facility is caught short from a staff point of view, needs some backup in a particular way, that will be facilitated, in fact, essentially quite commonly actually at the start of the week when people are looking at their rosters and comparing their needs, and what the weather is doing, and so on. So it doesn't operate formally as a labour hire type example, but it is quite common for staff to be asked to actually go and do some extra hours somewhere because someone is short, or whatever it might be.

PN1326

I see. When I looked at RANS16, which is the chart I referred to a moment ago, it indicated that two out of, I think it was 1000-plus staff had changed divisions. Now, your answer, I assume, is saying, well, that is just a sample; is that right?---Absolutely.

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PN1327

I see. And who prepared RANS16; was that Ms Assuni or was that you?---Is that the big chart you are talking about?

PN1328

Yes?---A number of us had input into that.

PN1329

I want to ask you about the Australian Workplace Agreements that your company has devised.

PN1330

THE SENIOR DEPUTY PRESIDENT: Sorry, did you want him to go to the - - -

PN1331

MS DOYLE: No. But he may as well keep it there; I may be asking questions about it.

PN1332

The Australian Workplace Agreements that your company has devised, was it Michelle Osborne-Smith who had principal responsibility for dealing with those in Victoria, or have you had a hands on role in that regard?---No. It was primarily Michelle who introduced those.

PN1333

They were introduced at Harold Holt pool in March last year; is that right?---That is right.

PN1334

And obviously a number of staff have signed them or accepted them, and others haven't, and from what you have said earlier, if you haven't, nonetheless the rate in your classification will apply to you?---Yes.

PN1335

Okay. And your attachments indicate that the Fitness Industry Award Victoria has been used as the basis for devising those that apply to the swimming pools and leisure centres in Victoria?---That is my understanding, yes.

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PN1336

All right. And I also see from the attachments you have provided that the Office of the Employment Advocate has used that award to apply the no disadvantage test?---That is my understanding.

PN1337

Do you know which came first? By which I mean, did your organisation hit upon that award and use it to structure the AWA, or did you seek advice about that?---I don't know, but I know from other experiences, I know that the Employment Advocate reserves it right to determine which awards it is going to refer to, and also in the past sometimes it is the client who actually tell us which awards they have used at times in terms of applying the no disadvantage test. But I can't - it is your chicken or egg question - I can't tell you which maybe came first.

PN1338

You explain elsewhere in your statement that RANS has been a member of VECCI and then more recently a member of Australian Chamber of Manufactures. Did you not seek advice from them prior to offering RANS at Victorian pools as to what rates should apply?---I would say it is quite likely that we did.

PN1339

You say in your statement, while I am on that topic, at paragraphs 18 and 19 - this is where you are referring to your organisation's membership of VECCI and ACM, you say that you had not received advice from those organisations about the risk of transmission of business. When did you transfer your membership to ACM? Was that in 1997?---I think that is correct, yes.

PN1340

And I am just assuming, but I am reading between the lines, you then maintained your membership of ACM since then?---That is my understanding.

PN1341

And you have not received advice from them about the implications of transmission of business in the local government area?---No.

PN1342

And perhaps while I am asking you about that, another contract that your company has been involved in recently is the contract for the Werribee pool, or tendered for that, to operate that for the City of Wyndham, haven't you?---That is right.

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PN1343

And when did that contract commence, or when is it to commence?---It commenced early October 2001.

PN1344

Are staff, they are being paid under AWAs by RANS?---That is right.

PN1345

And what award has been used to apply the no disadvantage test at that site?---I am not exactly sure, but I can presume it is probably the Fitness Award again.

PN1346

I see. Can I just ask you about the tender process for that pool, the Werribee pool. I am going to ask you to have a look at an attachment to Mr Nichol's statement, it is attachment SN12, which is found in ASU2, and it is the very last attachment to that. Yes, attachment SN12, if it tagged, hopefully it should be the last attachment in that bound volume. That is part of agenda of council, of the relevant council meeting at the City of Wyndham. You may not have seen this before, Mr Arnold, but what it refers to is the council's evaluation of the tenders that it received for its pool, and it is referring to the various benefits of its place there. I just want to ask you about - or perhaps if we look at clause 3.2 for a start, under the heading of tenders. It says tenders were invited, and it refers to RANS and YMCA tendering, and presumably you are aware that your competitor there was the YMCA?---Mm.

PN1347

If I take you through to - there is a whole lot of valuation of the tenders made there - can I take you through to clause 3.6, towards the end of the document, under the heading other issues, 3.6, transmission of business. It says:

PN1348

Council officers have identified that there are potentially transmission of business associated with this contract. This issue has been specifically addressed in the tender documentation and has been raised with the tenderers during the interview process. Written confirmation of council's position on this matter has been sent to tenderers.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1349

Now, you may not have seen this agenda item, but did you receive communication from the council about the concerns referred to in that agenda item?---It is quite common these days for tender documents to say words to the effect, and it was the same in the Werribee example, tenderers should be aware of the implications of transmission of business in relation to this contract, take their own advice and make their own decisions in this regard. I am paraphrasing that, but that is quite common these days, and it was those sort of words that were in the specification for Werribee.

PN1350

And when you say these days, that is what, since developments in the law of transmission of business in - - -?---Yes. I would estimate probably, particularly in the last six months, six to nine months, we have seen a lot more of that.

PN1351

And when you saw that changed wording, whether in the Werribee contract or an earlier one, what did do, get advice from ACM or advice, if VECCI was still the relevant entity then?---Yes. No. By that stage I think we were well aware of the issue and we were starting to get legal advice in relation to transmission of business.

PN1352

In relation to Werribee, I don't want to know your advice, but in relation to Werribee did you conduct costings of what if, if you like, what if it transpires that transmission of business does occur as some councils are suggesting, how much more would that cost us if we were lumped with it?---No, we didn't.

PN1353

I see. And was Werribee the first contract or tender documents to have that warning, if you like, or what was the first one that RANS encountered having that rider?---I don't know. We received an extraordinary amount of tender documents. You know, a lot of tenders we receive we actually don't bid on, but it is certainly, as I say, starting to appear in the majority probably of contracts that we are seeing.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1354

And you refer to riders or warnings in the contract. That agenda item does say that councils or councillors views have been forwarded to tenderers. Are you aware of any separate communication requiring any undertakings or commitments from RANS to deal with transmission?---There was a subsequent letter during the process which was probably about the time the report was written to council, which I think nominated us as the preferred tenderer subject to a number of conditions, and I think one of the conditions was really just reiterating that if there happened to be a transmission of business that the council didn't see itself in any way responsible for that, and that, you know, RANS should have made its own determinations in regard to that.

PN1355

In other words, buyer beware, I suppose?---Yes.

PN1356

And at that time or any time since then has ACM given you specific advice about how to deal with transmission of business in the area of local government?---No.

PN1357

I see. Sorry, I diverted you from the topic. I was asking you about Australian Workplace Agreements as they apply throughout RANS, and the use of the Fitness Industry Award. You have provided voluminous attachments to your statement that, as far as I can see, were a number of full-time AWAs, and then a vast number of casual AWAs for different states and different positions. Now, as far as I can see in relation to those that relate to Victoria, and here I am just focusing on casual AWAs, these are the classifications that RANS has throughout its leisure centres in Victoria. You have a classification you call recreation leader, creche attendant, customer service officer, and then a team leader in some of those areas, you can have a team leader in customer service, cafe or creche, lifeguard, gym instructor, learn to swim instructor, and, again, a team leader in those areas, and duty manager. Are there any classifications I have omitted there in relation to your leisure and aquatic centres?---No. That is my understanding of what the casual would be.

PN1358

And, again, there were voluminous examples of casual AWAs, but on my reading of it a recreation leader would be paid on the AWAs you supplied $13.50 an hour, as would a creche attendant and a customer service officer. Does that sound right to you?---That sounds right.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1359

Then a team leader in those areas would be paid $14 an hour?---Yes, if that is what it says.

PN1360

As far as team leader goes, how does one become a team leader in the CSO area, creche or cafe? Is it years experience or skills demonstrated on the job?---Skills demonstrated. It is really a - it is a first step towards potentially a coordinator position or a manager position. It is someone who is maybe very good at that particular job, so they might be a good customer service officer, may also show some leadership ability or some interest in developing some leadership skills, and so it is an opportunity for them to sort of put their foot in the water, if you like, in terms of first step, maybe towards management.

PN1361

And they might be supervising those more junior to them in those areas?---Yes. They may have either direct supervision responsibilities, or they may just have some reporting responsibilities or some planning responsibilities, something that is above and beyond just the day to day, I guess, of that job.

PN1362

Okay. So that would see your pay go up from 13.50 to 14 if you were elevated to team leader?---That is correct.

PN1363

Then a lifeguard gets - a lifeguard and a gym instructor get 14.10 in most of the AWAs that I saw?---Right.

PN1364

And then a learn to swim instructor 14.30 an hour?---That sounds right.

PN1365

And then a team leader in the area of gym and learn to swim and lifeguard gets $15 an hour?---Mm.

PN1366

And then the duty manager in most AWAs 15.10, or I think there are a couple of instances of 15.50; does that sound about right?---Yes.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1367

All right. Now, these were all casual rates, but as far as I understand at these aquatic centres and pools a large number of the staff are casuals?---That is right.

PN1368

At Harold Holt, for example, what proportion are casual staff?---I don't know. When you talk proportion, there is a number of ways you can gauge that, but there is about nine full-time staff and about 80 casual staff.

PN1369

All right. Now, other than being promoted from, let us say, customer service officer to team leader, and then perhaps even from there to duty manager, other than that is there any scope for improvement of your hour - for example, if you have been - in your hourly rate - if you have been a lifeguard at 14.10 for 10 years, and you haven't been given the nod for team leader, do you nonetheless get any kind of incremental increase over the period of time?---Well, you may well get incremental increase in the casual base rate, but it would be fair to say that you would only enjoy that if the casual lifeguard rate at the Holt went up.

PN1370

I see?---Having said that, I would say it would be highly unusual for anybody to be a casual lifeguard for 10 years at the Harold Holt.

PN1371

THE SENIOR DEPUTY PRESIDENT: Well, as a general rule is a general manager engaged directly, or is that normally the result of people progressing through the various stages in the organisation?---Both. We get significant internal promotion up to the area of a middle manager, coordinator, duty manager level, but then it is still a fair step from there to being the centre manager or a venue manager. So it is particularly at that level where we tend to get a mix of internal and external recruitment at that centre manager, venue manager level.

PN1372

MS DOYLE: Now, I know you say you are not overly familiar with the rates under the Local Authorities Award, so I guess from this perspective you will have to take my word for these figures, but if I explained to you that the award is set up in this, there are various bands, one, two, three and four are probably the ones relevant to us.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1373

MR DOUGLAS: Could my learned friend identify which award please?

PN1374

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1375

MS DOYLE: The Local Authorities Interim Award. Given that you are not familiar with it, then you probably won't know that it has since been made a final award. But I am referring to the interim award as at the rates in that award as at 27 May last year, and then as at 28 June this year. I am not going to be taking to a very complicated analysis. I just want to tell you about a couple of the rates in it. That award operates, as I said, principally in relation to bands, and within the bands there are levels. So you can have 1A, B, C and D, and you can have 2A, B, C and D. All I want to put to you is this. If I explained to you that in May last year the lowest rate paid under that award, namely, 1A, for an hourly casual employee was $16.43 an hour, and the lowest rate from 28 June this year was 16.95 an hour, and both of those are 1A rates, given the analysis we have just gone through in terms of AWAs that RANS applies, not even your duty manager gets paid as much as 16.43 per hour; you would agree with that?---Well, I wasn't aware of it until you just pointed it out, but as I did mention earlier, there is a number of ways that we come to determine those rates and - - -

PN1376

Yes. I am not interested in the methodology, just bare figures?---Well, as you pointed out, that is what the bare figures would say.

PN1377

Now, the next band up is two, and it goes A, B, C, D, as I explained, and the rate at 2A as at May last year was $18.05 an hour, and the rate as at the end of June this year was $18.56 an hour. Again, there is no one across RANS' aquatic leisure division who is a casual employee who earns as much as a 2A under the award, is there?---Well, there is. But, I mean, some aerobics instructors we pay $20 an hour, some aerobics instructors we pay $35 an hour.

PN1378

Aerobics instructors?---Yes.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1379

All right?---Now, I don't know how the Local Government Award, for instance, addresses the issue of an in demand aerobics instructor, and I don't know whether there is any provision within that for them to pay 35 an hour, or whether they are paying $18, and that is what a two - - -

PN1380

When you say in demand, you mean aerobics instructors who get a bit of a following in the area?---Sure. And I don't know whether that is, what a 2B is, and that is the top of that, or whatever.

PN1381

Sure. But we are talking about the key staff involved at swimming pools, do you pay any - - -?---Sorry to interrupt, but there is - if you talk about key staff, there is 20 good aerobics instructors at the Harold Holt, so they are key staff.

PN1382

All right. Are they paid an AWA rate?---Well, there is a rate within - - -

PN1383

Are they paid the gym instructor rate?---No, no.

PN1384

MR DOUGLAS: Can he answer the question. Will you let him answer the question.

PN1385

MS DOYLE: Go again, Mr Arnold?---The aerobics instructors at the Harold Holt, the vast majority of those would be on AWAs. The rate that they are actually paid, I think, would vary depending on their experience, their following, those sort of things, but there would be a minimum rate that they would be paid, yes.

PN1386

But which classification are aerobics instructors? I am sorry, I had assumed they were gym instructors?---Yes. Well, their probably minimum rate is the gym instructor AWA rate, but I think in reality you see very few of them are probably paid at that. So that is, in fact, the minimum rate that we would pay someone.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1387

I am sorry, Mr Arnold, it is just that you did provide five volumes of AWAs, and we have been through them, it has taken some time, and I haven't found these in demand aerobics instructors. Are they people that may have a different arrangement and you haven't included the example of their AWA?---Well, as I said, I haven't gone through and analysed of the aerobics instructors how many of them are on AWAs and how many of those have we provided to you, how many copies of those AWAs we have provided to you. We could do that as an exercise.

PN1388

Say they are not an in demand aerobics instructor, they are a novice, would they get gym instructor rate of 14.10 under an AWA?---They may. I think the intent of the AWA would be to say that the minimum they would be paid would be 14.10. I don't think there is that many aerobics instructors within RANS who is probably being paid 14.10.

PN1389

Now, the schedules that you have provided to the AWAs, even for the full-timers, the ones provided in your volumes, didn't have any details in terms of the other terms and conditions of employment. Are there redundancy provisions for full-timers, notice, hours of work requirements, all those kinds of things that you might find in terms and conditions of employment?---Yes.

PN1390

All right. What about the casual employees, is there a body of terms and conditions that are traditionally applied to them?---Yes.

PN1391

All right. And where is that? That is not attached in your documentation?---No.

PN1392

But you house them in the HR department of RANS, do you?---Yes. There is - the employee gets a complete copy, and we keep a complete copy of each AWA.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1393

You suggest in your statement - I think it is, yes, at paragraph 25, you say that there may be different rates across Victoria within the same classification, and there were a couple of examples of that in those attachments. And you say the reason may be the size and complexity of the facility, level of experience, nature of other staff roles and nature of the customer base. And can I ask - and I think you have given an example, the in demand aerobics instructor may get a little more. But you don't get more simply by dent of experience, do you, or simply by dent of the number of people you are supervising on your shift?---You may. There is - and that is reflected, for instance, when we talk about the size of the facility. There are some facilities where the hourly rate for a particular task is more, and that is primarily because of the requirement to supervise more people.

PN1394

I see. In relation to the Victorian Fitness Industry Award, are you familiar with that at all, are you familiar with the fact that it provides for four classifications?---Yes.

PN1395

Instructor qualified, instructor other, masseur and attendant. Can you just do this exercise for me, cross reference that to the classifications we have been talking about. For example, a lifeguard, are they instructor qualified other, or presumably not masseur, or attendant?---Well, I am really not sure. I mean, the way that we determine our pay rates, as I said before, we consider ourselves to be award free. The main way we determine our pay rates, at market rates, because we have good staff and they do a good job. So if I know that the staff at Harold Holt are doing a good job, and the customer base is satisfied, the client base is satisfied, and we are achieving the corporate result that we need, then the chances are that the pay rates that we are paying are around the market rate, because otherwise we wouldn't be able to achieve that. So then what we do is say to the Employment Advocate that we want to offer an AWA to these staff, this is what we think are the appropriate rates to offer. It is really the Employment Advocate's business, of course, what award they choose to actually apply for the no disadvantage test. So I certainly don't have the expertise to start matching up our pay rates with the pay rates within any particular award.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1396

Okay. So you don't know which of those four classifications the Employment Advocate applied to your broader range of classifications to satisfy him or herself as to the no disadvantage test?---No. But I also might add that I am aware that a number of our competitors also use the award as their primary point of reference, and I believe that the Employment Advocate has also used the Fitness Award in determining AWAs for some of our competitors as well.

PN1397

Right. So you don't have access to the details as to how that was cross matched, if you like?---No.

PN1398

And the Fitness Industry Award also has traditional award provisions in relation to redundancy and notice, etcetera, and it makes some provision for span of hours or ordinary hours. Now, again, there was a broad range of AWAs provided, attached to your statement. Can you make any generalisations about what is the span of hours for a casual employed by RANS in Victoria?---Well, no, I wouldn't want to make any generalisations, but I know that the Employment Advocate is quite interested in the span of hours that are going to be worked, and that is certainly one of the key things that an Employment Advocate looks at in terms of determining no disadvantage, in fact, span of hours.

PN1399

Well, the Fitness Industry Award at clause 3.1 provides that the ordinary hours under that award are 38 hours a week to be worked in a way that means that there is no more than 7.6 a day over five days a week between 9 am and 8.30 pm Monday to Sunday. There was a huge diversity in the AWAs you provided, but it would be fair to say, wouldn't it, that in comparison the spread there was often as broad as 5.30 am till 10.30 pm Monday to Sunday?---Well, there is quite a spread, but as I say, it is up to the - yes, we rely in this regard on the Employment Advocate to say what is or isn't appropriate.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1400

Did the Employment Advocate require amendments to any of your spread of hours?---Sure. You know, there is - particularly in the early days when we were originally framing up the AWAs, as you could imagine, there was a number of discussions backwards and forwards in terms of what was and wasn't reasonable, what is and isn't appropriate. I wasn't involved in most of that detail, but there was certainly - and there still is at times. There is times when, as you can imagine, the Employment Advocate will sign off a whole lot of AWAs with very little correspondence, and then for whatever reason will put one up for a new state, for a new employee at a new centre, and there will be an extraordinary amount of backwards and forwarding, as you would imagine, in terms of them convincing themselves that what is being offered is appropriate.

PN1401

As far as I understand the spread of hours in those AWA schedules, all it really means in the context of RANS AWAs is the hours at which you can be asked to work, because you don't get a penalty rate for working more than those hours or outside those hours, do you?---No, that is right.

PN1402

You say in your reply statement at paragraph 10, in your reply statement you say:

PN1403

I state that RANS does not pay a flat rate of pay.

PN1404

I am not sure whether I understand, Mr Arnold, in light of what you have just said about penalty rates. Is that a reference there to the potential for bonus or commissions?---I don't have paragraph 18 of Mr Nichols in front of me, because that is in direct response to that.

[11.45am]

PN1405

Now, perhaps I can remind you what Mr Nichols said at his paragraph 18. This is Mr Nichol's reply statement. The difficulty is that Mr Nichol was referring to your earlier paragraph 40?---Right.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1406

But he says:

PN1407

I say that factors such as the size of the facility and the level of experience of employees is precisely why the band pay structure contained in the Local Authorities Award is more appropriate than a flat rate of pay.

PN1408

From the context I am now reminded that this is, if you like, in the debate between the two of you about whether or not instructor under the Local Authorities Award, which provides for the bans I have described, is or is not more appropriate, hence you used the phrase, flat rate of pay. You then say in your paragraph 10, RANS does not pay a flat rate of pay, and you refer to the items that you say are taken into account. It was just your use of the word, flat rate of pay, that I wanted to clarify. You are not suggesting, are you, that there is some other penalty rates regime that we haven't been made aware of?---No. I simply, as you say, replying to Nichol in terms of saying, well, no, in fact, there is a variance in pay rates at times depending on the size and the perplexity and so on, as has been noted earlier in my first statement and then subsequently in this one.

PN1409

A couple of other questions I wanted to ask you about the Harold Holt pool before we move on. The evidence seems to indicate that when RANS took up the contract at Harold Holt, only about eight employees moved over from council, and it seems that only a very small number, I think it is between one and three of those people still at the pool. Does that sound right to you?---I am actually not sure of those figures, because it is a highly casualised staff there, and I know that, in fact, some people left for a couple of years and came back, and have subsequently left again, and so on. And so I would say that certainly it is a minority, but I wouldn't want to actually speculate on actual numbers. There have been - literally people have come and gone, and some of those people who have come and gone have been back again have been from the original in-house team, and so on, so that sort of stuff happens quite regularly.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1410

But RANS had no obligation to take on any or all of the council employees at the time of taking up the contract?---No. There was an expectation that we would be welcoming in terms of current staff who are interested in staying on, and we certainly try to create that environment. We were, for instance, there when the council actually announced to the staff that they had been unsuccessful in their bid. We helped to brief them on what our arrangements were going to be. I remember we gave them a form to fill out if they were interested in either staying in their current job or moving to a different job within the structure or even a different job within RANS. There was a two page form of filling out the sort of things they were interested in, and so on. I think we guaranteed everybody an interview from the in-house team who applied some of those sort of things just to try and engage them in that.

PN1411

And did you understand that the previous employees of the council were going to be made redundant, namely, whatever their arrangement was with the council under that award they would get the applicable redundancy payment?---Yes. I mean, we would anticipate that it would be up to the council to look after their current staff.

PN1412

There was an agreement or an understanding though, wasn't there, between RANS and the council that those who came over from the council to RANS would only be entitled to a portion of their redundancy package from the council?---That wasn't my understanding.

PN1413

Did you have discussions with the council about that arrangement or about how that would be handled?---No.

PN1414

Now, the final matter I want to ask you about; have you had a look at the statements of Mark Murphy and Melanie Every?---Yes.

PN1415

And they both attest to the periods of time they have worked for RANS at particular places; Mr Murphy at Harold Holt over a longer period, and Ms Every. I am not asking you to agree with all of the contents of their statements, but so far as you can ascertain do you agree with what they say about what their rates were during the relevant periods they were employed by RANS?---No. I have read their - - -

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1416

MR DOUGLAS: Your Honour, could I just interrupt? We have indicated that we don't wish to cross-examine Mr Murphy, and therefore that evidence in-chief is accepted.

PN1417

MS DOYLE: I will confine the question to Ms Every then. She had a more complex history, she had worked from centre to centre. But did you find yourself in disagreement with what she had said about her rates at RANS?---Well, I didn't go back and compare what she quoted with what was being paid at the time for those rates. I read her statement, but I didn't do any analysis on what she had said versus what our records indicated.

PN1418

I see. There was one other statement, that of Ms Kuenen, and again the situation applies where Mr Douglas has indicated he doesn't require her for cross-examination, but there is one matter I want to ask you about, the Local Area Workplace Agreement she attests to. Did you read her statement? She has obviously never been an employee of yours, but she described her life working at a council facility. Did you see the reference in her agreement to, in her statement, to what she called Local Area Work Agreements, certified agreements entered into that were pool specific?---Yes.

PN1419

And she talked there of the various changes or glosses, I suppose, put on the award at her pool. There was a mention of level freezing, a form of wage fixing for a period, and an expansion of averaging of hours over a period. You have seen in her statement how those kinds of flexibilities can be entered into, superimposed on an award. Is that something that RANS has ever considered, working from the award and then bargaining at each site to deal with the relevant circumstances of the pool?---Well, we haven't really seen the need. As I said before, we have generally seen ourselves as award free and we have generally had a particularly harmonious relationship with our employees, and our employees are a pretty satisfied lot, and I honestly don't think that we would have had overall more than 90 per cent of the employees sign the AWAs. In this one they thought the AWAs were worthwhile, and two, that they thought they had a reasonable relationship with us and the conditions that they were enjoying. So there hasn't really been the need to do that sort of thing from our point of view.

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1420

As far as I understand your statements and, indeed, the submissions that have been put, one of RANS' claims is that being made a respondent to the Local Authorities Interim Award and/or the final award, would reduce RANS' flexibility, and I think it is also said it would reduce its capacity to bargain. You don't see the flexibilities referred to in the Local Area Work Agreement in Ms Kuenen's statement as being capable of accommodating RANS' needs at swimming pools?---Well, my personal opinion is no.

PN1421

You have seen reference in her statement to the capacity to talk about the spread of hours, wage rates themselves, other compromises suitable to the particular pool. RANS isn't interested in that kind of bargaining?---Well, I mean, that is just her experience of one particular site. I don't know to what degree it is really going to achieve anything to debate that, but I guess the short answer is no.

PN1422

And when the comment is made that it would reduce flexibility and the capacity to bargain, is it simply that RANS isn't interested in collective bargaining; is that the difficulty?---No, it is not a difficulty at all. As I said, we have an excellent relationship with our staff, so collective bargaining is not something that would concern us in the slightest.

PN1423

I have no further questions of Mr Arnold.

PN1424

THE SENIOR DEPUTY PRESIDENT: Thank you, Ms Doyle. Any re-examination, Mr Douglas?

PN1425

MR DOUGLAS: Yes, there is, your Honour. One thing I will have to do, your Honour, is to change the size of the bar tables if we are going to have this equipment.

PN1426

THE SENIOR DEPUTY PRESIDENT: Yes. With the equipment you mean?

**** SIMON NICHOLAS ARNOLD XXN MS DOYLE

PN1427

MR DOUGLAS: Yes.

PN1428

THE SENIOR DEPUTY PRESIDENT: Yes. I apologise for that.

<RE-EXAMINATION BY MR DOUGLAS [11.53am]

PN1429

MR DOUGLAS: Mr Arnold, some questions were put to you about contracts that RANS has at various leisure centres, contracts with local government councils and various leisure centres in Victoria. Where do you have at the moment contracts with local councils outside Victoria as to leisure centres, if at all?---Well, we have several contracts in Western Australia, we have approximately eight contracts in New South Wales, and we have other contracts in both South Australia and Tasmania that aren't in leisure, and we are about to enter into a new contract in South Australia in leisure.

PN1430

And the ones in South Australia are they with local authorities, local council?---Yes, all those ones I nominated.

PN1431

And in Victoria, very quickly, can you list the local councils that you currently have contracts with in addition to Stonnington?---Yes. We work with Hobsons Bay City Council, we work with the City of Monash, City of Greater Dandenong, the - I have gone blank. Where is that list? I think it is here somewhere. City of Glen Eira, City of Mildura and Wyndham City Council.

PN1432

Yes. Are you looking at what? What is that attachment?---It is SA2, and I am just referring to the Victorian local government.

PN1433

So all of the contracts with councils in Victoria in relation to the leisure stream are listed in SA2?---That is correct.

PN1434

Now, you had contracts with other councils in the past which are not listed there, the same business stream?---That is right.

**** SIMON NICHOLAS ARNOLD RXN MR DOUGLAS

PN1435

And they include, I think, La Trobe, you have mentioned La Trobe, and Coburg, I think you have mentioned Coburg. Is there any others?---Yes, there is quite a few. Delatite, East Gippsland, Essendon, and then subsequently Moonee Valley, Shepparton, it became Greater Shepparton, Maryborough, a whole range.

PN1436

Yes. Can you recollect in relation to any one of those where RANS had a contract at a local council and that contract came to an end, where the leisure operation, leisure facility continued to be outsourced but went to another private enterprise operator?---Virtually all did.

PN1437

Yes. Without the council in any case, to your knowledge, actually taking over the operation between the end of your contract and the taking up of a contract by another private enterprise operator?---Yes. I think La Trobe, which we touched on before, was the only one that I actually recall going back to the in-house council.

PN1438

Went back in-house?---I might add, the only - I think the only reason they did that was because the vast majority of their other facilities have continued to be run in-house.

PN1439

You were asked a number of questions about AWAs, and questions about your approach to the payment of casuals at pools. What you said in relation to wage rates for casuals and how those wage rates are structured by reference to the market, is that answer also applicable to the way in which you approach casuals in other business streams?---Absolutely, yes.

PN1440

And just so I - I think it was clear - but as I understood what you were saying about AWAs, was that you treat the rate in the AWA as being the minimum rate for the particular classification named in the AWA, and that it is your practice to pay and in some cases pay considerably above that AWA rate to a person who is on an AWA; is that what you were saying?---That is correct, we treat the AWA rates as the minimum rates for each of those.

**** SIMON NICHOLAS ARNOLD RXN MR DOUGLAS

PN1441

THE SENIOR DEPUTY PRESIDENT: So you don't amend the AWA for an individual if you increase their rate from that specified in the AWA?---It does vary. It is a little complicated actually, because it is not clear what mechanism, in fact, from a paperwork point of view, should apply if one increases an AWA employee's rates several times over a year as they get better and better at their job, or whatever, it is actually not quite clear what mechanism one should use. We tend to issue a letter saying that your rate is going to change from this date to this amount and then attach that to the AWA. We don't actually go back and change the AWA each time.

PN1442

MR DOUGLAS: Can I just say, your Honour, the legislation, of course, does not require the employer to pay the rate that is in the AWA, the requirement is not to pay less.

PN1443

THE SENIOR DEPUTY PRESIDENT: No, no, I wasn't suggesting that. I just wanted to know what the practice was in those circumstances.

PN1444

MR DOUGLAS: You were taken through a list of classifications that you use for team leaders and so on in the leisure stream area. Do you use those very same classifications in the leisure stream area whether the contract is with a local authority or a private sector interest?---Definitely. They are the same classifications and the same minimum rates, as I say, allowing for differences maybe between venues, but, you know, a mid size venue in leisure, it wouldn't matter whether it was private company owned, public company owned, local government, state government, it would be the same classifications, the same rates.

PN1445

For instance, what sort of classifications do you use at Windy Hill?---Yes. Well, I think Windy Hill you would find would be very similar, or the same, I am sorry, as Altona, which would be the same probably as Wyndham.

PN1446

Yes. And those classifications in the leisure area, do you use them outside Victoria?---Yes.

**** SIMON NICHOLAS ARNOLD RXN MR DOUGLAS

PN1447

And what is the - what sort of classifications do you have in the other streams, the other business streams?---Well, similar in terms of there is, in entertainment there is, I think, six to eight key casual classifications, there is a minimum rate for those, and, again, you will find the classifications and the hourly rates were pretty similar between sites, if not the same.

PN1448

Yes. And how do you identify those sort of classifications by name?---Well, again, not only do the rates tend to be market driven, but the general understanding of the prospective employees and the actual employees are around those sort of classifications. You know, the concept of a team leader, for instance, in leisure is not a RANS invention, it is not an Australian leisure invention, in fact, it is almost a world wide term in the recreation industry.

PN1449

And in all business streams do you have employees handling cash?---Yes.

PN1450

Looking after customers, serving customers?---Certainly.

PN1451

Attending box offices?---Selling tickets or memberships, all that sort of thing, certainly.

PN1452

Working in cafe type facilities?---Yes.

PN1453

Performing cleaning operations?---Yes.

PN1454

Do you have any technical people working in other business streams?---Yes. The operations managers at our bigger leisure centres and the operations managers, for instance, at our bigger entertainment centres, the technical requirements of that position and the position descriptions of that position are actually quite similar.

**** SIMON NICHOLAS ARNOLD RXN MR DOUGLAS

PN1455

What is the name of the cleaning contractor that is a subcontractor to you in relation to the Stonnington contract?---I am not aware. In fact, it has just changed in the last few weeks from one company to another.

PN1456

And do you make use of cleaning contractors with respect to other contracts?---Yes. Yes, it is quite common.

PN1457

Are those contracts confined to local council leisure stream contracts?---No. In fact, we have, just to follow on, on that, we have a contractor who cleans Windy Hill Fitness Centre, and the same contractor cleans Wyndham Leisure Events Centre, and that is quite common to share contractors across sites.

PN1458

Could I take you to SA2 again. In the three non leisure streams can you identify any clients in those streams that are not local councils or local government authorities?---Well, under the entertainment venue management stream usually in Victoria is clearly not a local government entity, and Lambton Harbour Management Limited is not local government either, under consulting the ARU are clearly not, and then the bottom five clients in the consulting area aren't, and in staffing none of those are with the exception of the City of Melbourne would be the only local government client.

PN1459

So in the consulting services area from Octagon down you say are not local government?---That is right.

PN1460

Now, looking at the list as a whole can you identify those clients where you have contracts that are operating not in Victoria?---Going through the lists?

**** SIMON NICHOLAS ARNOLD RXN MR DOUGLAS

PN1461

Yes please?---Yes. The Australian Rugby Union contract operates both in Victoria and in New South Wales, Centennial Park is New South Wales, Armadale is Western Australia, Joondalup is Western Australia, Sydney is naturally Sydney, Randwick is Sydney, New South Wales, Ryde is New South Wales, Shoalhaven is New South Wales, Albury is New South Wales, Glenorchy is Tasmania, Lambton Harbour is actually in New Zealand, Marion is South Australia, Willoughby is New South Wales, Hobart is naturally Tasmania, Marion again South Australia, most of those other contracts were - the non government ones were either national or were New South Wales based, Perth was obviously Western Australia, Genesis was primarily Victoria but also outside Victoria, AC/DC was Tasmania and Canberra, 10 Days on the Island was Tasmania.

PN1462

Now, you were asked some questions about the Fitness Industry Award. Can I show you a copy of that award and the respondents list there. I have a copy of the respondents list, your Honour, I could hand up. I don't know whether it is on the - - -

PN1463

THE SENIOR DEPUTY PRESIDENT: The Fitness Industry Award, yes, it is on the - - -

PN1464

MR DOUGLAS: Could you, if possible, go through this list and very quickly identify whether, to your knowledge, the particular employer named in each case has - whether or not the particular facility is a local authority facility or not?---Yes, sure - is local government.

[12.12pm]

PN1465

What city?---Sorry, City of Moonee Valley.

PN1466

Yes?---Do you just want the name of the city?

**** SIMON NICHOLAS ARNOLD RXN MR DOUGLAS

PN1467

Yes please?---Benalla is the City of Benalla. Broadmeadows, I am not sure what city it is, but that is definitely local government. Doncaster and Templestowe is local government. Manningham, I think.

PN1468

That's the city - - -?---City of Manningham.

PN1469

Over the page, Dandenong Oasis is the City of Greater Dandenong.

PN1470

Yes?---Echuca, that is local government, but I don't know the actual - - -

PN1471

City of Echuca?---City of the Port of Echuca or something, yes. King Club, Sandringham, that is the City of Bayside.

PN1472

Lakeside Centre no longer exists, as I understand it?---No longer exists, correct.

PN1473

Life Be In It Health Club?---That is City of Monash.

PN1474

Kew Recreation Centre?---That is the City of Kew, or whatever they are called these days.

PN1475

Yes. Did - just stopping there?---Yes.

PN1476

Ms Every says in her statement that she worked at that centre when employed by you. Is that correct?---No, it would have been - maybe she was employed by the YMCA. They have been running that since it was built.

PN1477

Yes, the next - - -?---Northcote, can't remember what city that is, but that is local government.

**** SIMON NICHOLAS ARNOLD RXN MR DOUGLAS

PN1478

The City of Northcote. There is one?---Yes.

PN1479

Portland?---Yes, that is the City of Portland and likewise, at the bottom of the page, City of Warrnambool. City of Wangaratta, second one on the next page.

PN1480

Williamstown?---Williamstown is the City of Hobson's Bay. Mornington is the Mornington Shire Council. Ararat is the City of Greater Ararat, I think it is. ..... Bacchus Marsh is Bacchus Marsh City Council. City of Ballarat. City of Bendigo. Middle of the page, I think the YMCA of Coburg, I think that is Moreland City Council.

PN1481

What about the YMCA of Brunswick?---I am not sure. I think that is also Moreland City Council, if it is the Brunswick City Baths, which is what I think it is, but I am just not absolutely sure that is what that is.

PN1482

Yes?---Nothing else on that page.

PN1483

You were asked some questions about the '95 contract with Stonnington. As I understand it from ASU4, the contract commenced on 2 October 1995?---That is correct.

PN1484

And from what you said, it, in fact, operated continuously until when?---It would have operated for the five years of this contract, which would have seen it operate to 1 October 2000, and then we continued to operate the facility for another approximately 10 months, under the same contract, and then a new contract was let which was re-bid, we won, and which notionally commenced on 1 August this year. Although, actually, that contract isn't signed yet. We are still negotiating our finer points of that one.

PN1485

So, are you saying that even though you have been told that RANS is to receive a new contract, that it hasn't commenced formally?---Correct.

**** SIMON NICHOLAS ARNOLD RXN MR DOUGLAS

PN1486

And as I understand it, what you are saying in relation to the '95 contract is that it ran for the three plus two years that is referred to in the document, and then for a further four years on the same basis?---No, a further 10 months on the same basis.

PN1487

No, no - three plus two years?---Yes.

PN1488

And then a further two lots of two years, on the same basis?---No, another three plus two years.

PN1489

Another three plus two?---Yes.

PN1490

So, that took it to when, 1 October of last year?---No, sorry. It started in October '95. The first three years took us to '98. The next two years took us to 2000, then 10 months of interim management under the same contract, and then a new three plus two year contract, but all running continuously.

PN1491

All running continuously? Okay, does that - does your Honour?

PN1492

THE SENIOR DEPUTY PRESIDENT: I am clear on that, yes.

PN1493

MR DOUGLAS: When do you expect the new contract to formally commence?---I would suggest February some time, February 2002.

PN1494

And what are you operating under at the moment? Is it a combination of what was in the '95 contract, up to - during this - as it is at the moment, or under that contract, together with some of the conditions that will come into existence when the new contract is formally signed?---Well, we clearly operate under this contract, the original contract, up until 31 July of this year. With the new period, yes, it is probably a bit of hybrid between the old contract and the new one, I suggest. There are some differences between the two contracts, but it is actually some of the differences that are being negotiated currently.

**** SIMON NICHOLAS ARNOLD RXN MR DOUGLAS

PN1495

Yes, okay. When did you - when did RANS - the contract that you had in relation to the Coburg Pool, that is what, the Moreland City Council is it?---That is right.

PN1496

Yes. When did that contract initially commence, about when?---Our first contract with Coburg was, I think, 1994.

PN1497

Yes, and when did it come to an end, roughly?---The last contract we operated with Coburg, I think, came to an end in '99.

PN1498

Thank you. I have no further questions, your Honour. Could Mr Arnold be excused?

PN1499

THE SENIOR DEPUTY PRESIDENT: Yes, thank you, Mr Douglas. You are excused, Mr Arnold. Thank you for your evidence?---Thanks.

PN1500

MR DOUGLAS: Yes, just one matter, your Honour. Your Honour asked Ms Assuni whether RANS runs the Monash Aquatic and Leisure Centre in partnership with the council.

PN1501

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1502

MR DOUGLAS: And we - she was unable to answer that, your Honour, and we informed your Honour that we would provide the answer, and maybe if I could ask Mr Arnold that?

PN1503

THE SENIOR DEPUTY PRESIDENT: Yes, certainly.

PN1504

MR DOUGLAS: Is the Monash Aquatic and Leisure Centre run in partnership with the Monash Council?---That is right.

**** SIMON NICHOLAS ARNOLD RXN MR DOUGLAS

PN1505

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Douglas.

<THE WITNESS WITHDREW [12.15pm]

PN1506

MR DOUGLAS: That is our evidence, your Honour. As I understand it, Mr Nichol is available for cross-examination.

PN1507

MS DOYLE: I was going to do opening submissions first.

PN1508

MR DOUGLAS: Okay, do that then.

PN1509

THE SENIOR DEPUTY PRESIDENT: Yes, carry on. I can indicate, by the way of the parties, I have read most of the material. I haven't read all of the exhibits, but - - -

PN1510

MS DOYLE: Now, your Honour, the ASU has filed quite substantial written submissions, and in a sense, they obviously stand as our argument to this proceeding, but as the evidence has unfolded, and indeed, in light of Mr Douglas' opening, I think it is probably just as well that I reiterate some matters that are important out of those submissions, and explain some other aspects of the evidence, and the argument the ASU wishes to put.

PN1511

It will be clear from our submissions that the union's primary submission is that the Commission ought not make the order sought by RANS, and the primary reasons that the order, at least in the form sought, is one the effect of which would be to immunise RANS against the operation of part of the Workplace Relations Act for all time. Now, perhaps necessarily, a lot of the argument, a lot of the evidence has focussed on immunising RANS from the Local Authorities Award, in its interim form and its final form, but the order sought by RANS is, in fact, one that it be immunised retrospectively since 1992, and it would seem, for all time, from the operation of the transmission of business regime in the Act, which is an extraordinary order to seek indeed.

PN1512

True it is that there is a rider in section 149(1)(d) which permits this Commission to otherwise order, and it is also clear from the examples that are in the decided cases of the Commission, and some of the orders put forward by way of example by Mr Douglas, that this Commission has, on occasion, made such orders where it is demonstrated on the facts, and in light of industrial merit at the site, or in relation to the employer concerned, that there is industrial merit, which justifies diverging from the usual course.

PN1513

When I say "the usual course" I mean the transmission of business regime laid out in the Act, in section 149(1)(d), and of course, its mirror provision in relation to certified agreements, 170MB, and your Honour would be aware that, strangely perhaps, that section 170MB does not contain the same rider. So, it would seem that, in any event, even if this order in the form sought by RANS is granted, there remains that potential that the certified agreements will transmit the ordinary course, and I keep emphasising the phrase "ordinary course" because the RANS application and its submissions proceed on the basis that asserting that a company has always viewed itself as award free, and would like to remain so, is somehow justification for taking it outside of the ordinary operation of the Act, and in my submission, that is certainly not the case.

PN1514

Not in light of the authorities in this Commission, and not in light of the matters of substance and merit that I want to put for your Honour. It is obvious, in the submissions and the evidence put together by the union, that a key plank of our submission is that the industry in which RANS operates includes, in Victoria, that of local government recreation. We have read all the voluminous materials about the other areas in which they operate, but as far as my client is concerned, we are dealing with the industry of local government recreation.

PN1515

That includes, at least in Victoria, centres where there are pools, some centres that are called recreation centres, community centres, etcetera, and they are examples of facilities that councils have certain obligations and powers in relation to, under the Local Government Act in Victoria, and the terms of the contract we have looked at today, your Honour, the exhibit ASU4, indicate that, where a council contracts out the running of or the management of its community centre, and that is what they are after all, it maintains very strict and detailed control over opening hours, provision of special programmes, and one finds very detailed clauses about capping of ticket prices, keeping even certain lanes of the pool open for the elderly or the young, or for community groups.

PN1516

It is another feature of the running of these kinds of facilities in Victoria, and this comes through in Mr Nichols' evidence, that it seems to be the case that in Victoria, the vast majority of Victoria councils own a pool, and it may be that the running of it is contracted out from time to time, and Mr Nichols explains the history, namely that on the back of the olympic games, most local governments throughout Victoria found the cash to construct those kinds of community centres.

PN1517

Then again, as Mr Nichols' statement indicates, the compulsory competitive tendering regime was introduced in Victoria, in 1994. Now, I understand it hasn't existed formally perhaps in other states, but nonetheless, a lot of local governments do go through a procedure which mirrors the very strict, structured form of compulsory tendering under the Victorian Act. What that means is that, throughout this large number of pools and community centres operating in Victoria, some are owned and operated by the council, and others are owned by the council but operated, from time to time, by private interests like RANS, and/or its main competitor, YMCA which is, principally, a non-profit organisation, and there are other, smaller players in the industry.

PN1518

But the evidence, in my submission, indicates that in Victoria they are the two key players, and the result of that in turn, is that throughout recreation centres in Victoria, there are numbers of people who are paid according to the Local Authorities Interim Award, and now the final award, and certified agreements or local area agreements, entered into at particular pools, and then there are other people who are paid according to RANS AWA rates, and then there are some who are paid, it would seem, by the YMCA under the Victorian Fitness Industry Award, and/or other arrangements that they think are appropriate for their staff.

PN1519

The clear picture that emerges, when one looks at the RANS rates of pay, is that they are significantly lower than that applicable under the Local Authorities Award. You would have seen, your Honour, in my questions to Mr Arnold, that leaving aside all complicated debates about who should be classified as what, even if one takes the two lowest rungs of the Local Authorities Award, one finds a difference, depending on classification, of between two and several dollars for the each hours work performed, and that, if you like, is what we see as underpinning this application.

PN1520

RANS, with respect, has lost sight of the fact that it must demonstrate that the Commission should otherwise order. That the Commission should find that there is industrial merit in making an order which will preserve the position that RANS is, as it would like to be, award free, and which releases RANS from the operation of the Act in the ordinary course of events, and to demonstrate that there is such industrial merit, one would expect RANS to demonstrate either that lifeguards aren't worth any more than $14.10 an hour, or that it is not unfair that some lifeguards are paid 14.10, and others are paid upwards of $16, $17 or $18 an hour.

PN1521

That, or those are the criteria with which the Commission must be concerned before it hives off RANS from the regime of the Act forever, and indeed, the order that RANS seeks is, on my reading, so broad it would even obviate the need for RANS to comply with Victorian minimum wages orders, which are made by this Commission in order to keep the safety net alive in Victoria, and that would be an extraordinary result indeed.

PN1522

The effect of this hybrid system if you like. of council pools being run partly in-house and partly by private operators, is, as Mr Nichols attests in his statement, that you may find in neighbouring councils, one pool being run in-house, and one being run by a private operator, or within the same council. The classic example is, of course, Stonnington. There is a Prahran in-house ..... , and then the Harold Holt Pool. Both owned by the council, one run in-house, one run by RANS. Kilometres apart, yet very different rates of pay and conditions pertaining at those two facilities, and that is really the classical example, if you like, that RANS has failed to meet head on.

PN1523

It has not, and cannot explain why someone a few kilometres down the road, performing the same duties as a lifeguard or a learn to swim instructor, merits several dollars in hour less than their colleague up the road, and it also is a feature, as the evidence has unfolded, your Honour, that it is fortuitous whether an employee is employed directly by the council, or by RANS or one of its private competitors, because Mr Arnold and Ms Assuni have attested to this flux.

PN1524

That is, that some contracts go out, and occasionally, go back in. Some go out to RANS and then are transferred to the YMCA, but it is nothing to do with the original employee whether or not their pay cut, if they choose to stay at a pool, goes down as a result of the tendering out situation, and there has been no evidence educed by RANS that the work is different. There has been no evidence educed that lifeguards at a RANS pool do less or are less qualified than those up at the road at Prahran, and the same can be said in relation to swimming instructors, kiosk attendants, administrative staff, etcetera.

PN1525

If we leave aside the somewhat unusual example of the in demand aerobics instructor, there has been no indication that there is a different set of skills or experience of workers in this industry. So, it is central to the union's submissions that RANS bears the onus of demonstrating that there is some sound and fair reason for permitting license to pay rates lower than those which would apply if transmission of business is demonstrated. Of course, I pause there to say that none has, as yet, been demonstrated.

PN1526

It is no secret that the union asserts it and wishes it, but of course, that is a question for the Federal Court, and a question that the Court would, if asked, would determine in light of the authorities as they apply at the time, but there is an important feature of the way in which the Court would address the question if it were asked. The Court would look in a very detailed way at the kind of work performed by Stonnington Council employees when the Harold Holt Pool was run by the council, and compare it with the work now down by employees now that it is run by RANS.

PN1527

It would look at the terms of the contract in more detail than I have done in my questioning of Mr Arnold. It would look at substantial identity of the work performed under each entity, and it is also likely to look at the role of compulsory competitive tendering and the obligations of a local council. I will go to this in detail a little more later, but it is my submission that, while transmission of business has been in flux in the Federal Court and High Court, decisions every which way, there is a theme emerging, most recently in the Employment National case, and in the Australian Rail Authority case, the South Australian decision by MANSFIELD J, that government entities may be treated a little differently in the application of the PP consultants test, and I will return to that a little later in my submissions.

PN1528

THE SENIOR DEPUTY PRESIDENT: I think that was suggested in the PP consultants as well, wasn't it?

PN1529

MS DOYLE: Yes, it was, and significantly, in Employment National, the Full Court said that they were of the view that the High Court had left open at least, this question of whether there may be slightly different considerations. Principally because one can't so easily look at notions of profit when dealing with, as they were, the successor to the CES. Now, I will develop that argument a little later.

PN1530

Now, your Honour, our written submissions are in five main parts. We deal with the power, breadth of the application by RANS, whether it is inappropriate to make the order, industrial fairness, and merit which I have already touched on, and the scope of the order. There are just some matters under each of those headings I want to draw to your Honour's attention. I might just first deal with the question of the award. I did say at the report back of this matter, your Honour, that the interim award had been made final, and we will provide to your Honour, if not today during Mr Nichols' evidence, then at the end of the day, copies of that.

PN1531

The award has been finalised and simplified pursuant to the item 41 review provided for in the Act, and Mr Douglas has made it clear that his client sees it as a real question, which of the two awards, or whether both would bind it if a transmission of business occurred. I have said that that is a matter for the Court, but I have no difficulty in putting some submissions about that. There are no detailed authorities from the Court about what happens in the event when an award variation - - -

PN1532

THE SENIOR DEPUTY PRESIDENT: Is that an issue though, that I need to examine? Whether - - -

PN1533

MS DOYLE: It is not one your Honour needs or can determine, in my submission, but I am happy to put briefly, what, in my submission, would be the position.

PN1534

THE SENIOR DEPUTY PRESIDENT: I would be grateful for any assistance if you are giving it.

PN1535

MS DOYLE: I haven't found the authorities that deal with the position of variations post transmission of business, but it does seem to me to be fair to say that the decisions proceed on the basis, or perhaps even the assumption, I am prepared to agree, that awards transmit as varied from time to time, and in my submission, there is a sound reason for that, and the case may be different in relation to certified agreements, but in my submission, where awards are concerned, awards are demonstrably not static documents. They are varied from time to time, but they are also varied by different means, and it may be the means that it is important because they are arbitrated documents and because section 149(1)(d) is about disputes after all - it says in the dispute finding and the result of a dispute the award is binding on the successor. It therefore logical to see that - - -

[12.31pm]

PN1536

THE SENIOR DEPUTY PRESIDENT: So are you just confining your - your submission then to an arbitrated award?

PN1537

MS DOYLE: Yes, that is right.

PN1538

THE SENIOR DEPUTY PRESIDENT: Yes, right.

PN1539

MS DOYLE: I can see there might be differences and even difficulties with certified agreements but where an award is concerned, variations are arbitrated. Now there are different species of variations, there is the 113 style variation which may just be something that occurs inter-parties, but a variation like that which has just occurred to the Local Authorities award is one mandated by the Act, carried out pursuant to statutory pre-conditions and criteria and it is an arbitrated result. That being the case it is my simple submission that that award - it has been renamed, it has been simplified and re-checked in a number of ways but it is really just a new version of the former award.

PN1540

THE SENIOR DEPUTY PRESIDENT: Some variations are by consent though, even in the item 51 face of proceedings - - -

PN1541

MS DOYLE: Yes.

PN1542

THE SENIOR DEPUTY PRESIDENT: - - - there can consent about the whole variation.

PN1543

MS DOYLE: They are. But the result would be pursuant to that regime, as I have said, it is not - one of RANS' key submissions seems to be how would you ever know. How would you know whether this award was changing and growing as a document. Apart from the obvious answer which is the contract actually requires you to keep abreast of those changes, I would also say if the award is varied by the Commission, it is an arbitrated public document that affects a number of people who all have varying degrees of familiarity with it and access to it.

PN1544

But it is a sort of difficult task, in my respectful submission and, it is clear from the scheme of the Act that if a settlement is going to be binding and into the future and be a successful settlement of a dispute then it couldn't have been intended by section 149 that an award would transmit say in 1995 and grow and change and be varied as between the principal parties, but be frozen in time as between the union and the transmittee.

PN1545

THE SENIOR DEPUTY PRESIDENT: Would there be any possibility of it offending against the principle of common rules not being applicable in the States?

PN1546

MS DOYLE: Would it be sorry, your Honour?

PN1547

THE SENIOR DEPUTY PRESIDENT: Would it offend the principle of common rules - the requirement that there be no common rule, other than in the territories, of course?

PN1548

MS DOYLE: No, your Honour, because it would simply be an example of a broadly applying Federal Award to which this person has become bound since the transmission of business. If they are aware of it, and they ought to be, they might on the occasion of an application for a variation say, "We don't want that variation, we oppose it even if the others are consenting to it". There might be an arbitration on that.

PN1549

Or they might say, "We don't want to participate in award simplification", or they might say, "We do want to and we will come to conferences about it", and that is just because of the way the awards work. But there is no great difficulty in accepting an understanding that awards transmit as varied from time to time because although they have parties to them they are not an inter-parties creation. The Commission has a role in that.

PN1550

If there be any doubt though, your Honour, then the other possibility is that what happened was the Local Authorities Interim Award, transmitted in 1995, and for some reason is frozen in that State, these are being RANS. As I said there is no transmission of business proceeding on foot so the question hasn't been posed to the Court. But I guess that is one answer it could give.

PN1551

But I put forward what in my submission is a coherent way of looking at the way 149(1)(d) might work. Now, Mr Nichol explains in his statement that the substance of the Local Authorities Award - and I won't go into that in detail, in paragraphs 6-8 he deals with where employees generally fall in the classifications in local government and explains that casuals get a 20 per cent loading and they also get another 25 per cent loading because of their employment as employees in special engagement.

PN1552

Mr Nichols will explain this, but the way you get to the casual rate on under the Local Authorities Award is, if you go to classification 2(a) for example, to find out what a casual would be paid per hour you divide it by 38 and then you add 20 per cent and then 25 per cent. The award also has obviously a number of traditional clauses dealing with the spread of hours and the like and it also acknowledges with those loadings the particular disadvantages suffered by employees who work the unsociable hours that attach to the leisure aspects of Council employees.

PN1553

Can I turn to the question of power briefly, your Honour. I have addressed this in some detail in our submissions and you would have seen that it is our submission that section 149(1)(d) is not a source of power for the Commission per se. Rather, it is an interpretative provision, or the rider is an interpretative provision, I should say.

PN1554

Section 149 sets out a regime for the preservation of settlement of industrial disputes and one of these is that success is about but it then explains how to read different industrial instruments and events together and it explains that subject to another order of this Commission, this is what will happen. RANS seems to hear that rider as itself granting a free standing power to the Commission to immunise a company like RANS from the operation of the Act, not even just an award or a list of awards of the Act and in my submission that is simply not something provided by section 149(1)(d).

PN1555

It is like a traditional interpretative phrase that you might find in any set of legislation, your Honour. It is basically saying, "This is what happens. Awards transmit to successors unless there is another particular award or order of the Commission which tells you it won't in this case". And so the kinds of cases where the rider kicks in are these. One example would be an order within the body of an award. Mr Douglas provided some examples in exhibit, I think it was RANS7 - that was a typed list of examples of award clauses.

PN1556

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1557

MS DOYLE: And there are a couple in there which said things like, "This award will only bind the parties thereto and never bind successors". I can recall another example, I think it related to South Australian Government Health. And it said, "This award will only bind successors if they are working specifically in South Australian Government Health". That is an example of the Commission otherwise ordering - saying, "Look, this is the transmission of business regime, but for particular reasons of industrial merit this time we are not going to bind successors. This award will only have a life as between the two parties before the Commission today".

PN1558

That makes sense and in that scenario the Commission's power has been enlivened by an application by one side or the other for an award. Another example of the Commission having the power to otherwise order is where there is a clause in an award which says, "The employer is bound by this award to the exclusion of any other award which it might be argued a place, such as in another transmitted award". Or it might expressly state, "This award binds RANS", for example. "And no other award, including the local government award will bind it".

PN1559

There are clauses like that - quite specific clauses. If they are inserted it is because in the process of making that award the employer has put a submission which merits it. It has said, "Look we are happy to be engaged in the process of an award, but we want it to be clear that this is the award that will bind us". And, indeed the Employment National case, the Commission decisions in the authorities, is an example of just that. There, Employment National, came to regularise their position with the unions and with their employees.

PN1560

They wanted an award which would say, "This is the terms and conditions for our employees and just to make it absolutely clear we are not also bound by the Australian Public Service raft of awards". They didn't do that by coming here and asking the Commission to order that they be exempt from the Act. They came here and sought an award governing the terms and conditions between them and their employees.

PN1561

MR DOUGLAS: That is not so, your Honour. I was in that case and there was a section 114 - section 149(1) application very similar in form to the current one filed first. And that was filed long before any award proceedings occurred.

PN1562

MS DOYLE: All right. Well, I will bow to Mr Douglas' pure experience with the history of the proceedings, but I read the decisions and what the Commission said was that it would proceed to arbitrate on the merits based on a presumption as it described it, that the various public service awards did apply although it knew that Employment National wanted a ruling about that and indeed, it sought a ruling about that from the Federal Court, and it then went on in print R2508 to undertake a detailed consideration of the circumstances of the public service regime of awards and determined that that regime was not appropriate for Employment National and arbitrated a new safety net award for Employment National.

PN1563

The process was very different. I take Mr Douglas' point that there may have been a separate application. I thought they were together but Employment National sought the creation of and the arbitration of a new award, covering all of the terms and conditions that would apply between it and its employees. It didn't get, even if it sought it, an abstract immunisation from the operation of the Act.

PN1564

Another example where the Commission might otherwise order is where an employer opposes an application to vary an existing award or to rope them in to an existing as fitted to the transmittee. And in that circumstance the employer is there as albeit a reluctant respondent but a reluctant respondent to an application who then seeks that they not be added to the award in question.

PN1565

Those three examples I have given you are examples where the Commission's jurisdictional power has been activated, whether by the employer or by a union group. In that situation the rider to section 149(1)(d) provides, if you like, a way of interpreting what is to happen thereafter. If the Commission makes an order that would seem to oust a transmitted award in that expressly or by sheer fact that it has made whole new award covering a putative transmittee, then 149(1)(d) tells you what to do. It tells you that it is that other award of the Commission that is superior, that will prevail.

PN1566

It is - it is in the vein of an interpretative or inconsistency clause and which tells you how to read co-existing orders or awards of the Commission. But RANS isn't here seeking to vary an existing award, it is not proposing any alternative award. Indeed, the most common refrain has been, "But we view ourselves as award free". And that makes it very different from the examples of the cases before the Commission in the past.

PN1567

The EDS decision by Senior Deputy President Polites obviously I am bound to submit that we, in our submission, part of that decision is incorrect and the reason is that his Honour seemed to base his decision on the fact that, or the view that, unless he found that the rider in section 149 gave rise to some free standing power in the Commission to otherwise order, then that would leave an employer who wasn't a part of the original dispute with their hands tied because they wouldn't be able to come here and seek the benefit of the rider and in my submission his Honour is just not correct about that.

PN1568

The putative transmittee who wants to say, "I am not bound by that award", has this forum in which he can say it, when it applies for its own safety net award with different terms and conditions, when it opposes a roping in application or a variation, because in those circumstances the power of the Commission has already been engaged.

PN1569

What is cannot do is latch onto the rider and use that as a source of power. 149(1)9d) is not the Commission's source of power. 149(1)(d) is what the Act says about how awards are settled. The Commission's source of power is in section 89 or 89(a) or 100, 101, 102, 104 or 6, 120(a) - the making of an exceptional matters order, 111, 113 or 114. Those are the power provisions. 149(1)(d) is an Act provision which tells unions and the community and the Commission that this is how it will work in practice.

PN1570

So it is to that extent that we submit that Senior Deputy President Polites is incorrect in the EDS decision insofar as that decision pertains to power. I should for completeness mention that the Financial Sector Union case which is also in our materials, and I think Mr Douglas referred to it in his opening - again it is a slightly different case because there an interim award was sought where the relevant employers wanted what Senior Deputy President Drake described as a "comfort" clause. A clause which would, if you like, say that this award could not by any successor of the relevant employee - and it was quite broad in its terms and that was refused in that case and I may refer to Senior Deputy President Drake's reasons later.

PN1571

But again that is an example of the power having been properly activated in a free-standing way and I think in that case it was at the union's application. So far as the breadth of the application is concerned, really a fundamental matter for your Honour is, what is the breadth of any order that will be made even if it is appropriate to make one. There have been voluminous materials submitted by RANS about the areas in which it works and its competitors and the kinds of contracts it has got, but there has been only detailed evidence in terms of the mode of work performed and the particular pay rates and the contract relevant with - in relation to the Harold Holt pool.

PN1572

It is our submission that the application ought to be treated as pertaining only to the circumstances arising out of the RANS management contract with Stonnington City Council in relation to the Harold Holt pool. If these matters were being argued out like in the Federal Court in the context of a transmission of business proceeding, as I have said, that - that is the approach that would be taken.

PN1573

If the unions sought to have transmission of business resolved in relation to RANS it couldn't and wouldn't do in a global sense because there would be a different answer in every case. It would depend on the terms of the contract, it would depend on the identity of the work force, it would depend on the way in which the tendering out occurred and whether or not there would be any great changes to the mode of work or staffing structure since.

PN1574

There is a great difficulty in the way in which this application has been brought on. We originally did, in our submissions, make the point about natural justice and the terms of advising other employers, advising other unions but while that has been in form complied with it does remain the case that there would be a vast body of employees right across the country affected by a type of ordered that RANS seeks from you.

PN1575

And it is of course not within my brief to address your Honour on the terms and conditions of people who might be members of the Miscellaneous Workers Union or not at various entertainment venues around the entire country or those who might work at football clubs or equestrian events or rock concerts. But your Honour, of course, must be mindful of the very broad import such an order would have and the capacity it would have to tie this Commission's hands with respect to the terms and conditions of employment of those people for ever in terms of the order in the form that it is sought.

PN1576

Even if your Honour treats this application as going more broadly than the circumstance of the Harold Holt pool - you have just heard in evidence from Mr Arnold this in relation to his exhibit SA2 which contracts RANS presently have in Victoria, in the local government leisure area and my alternative submission is, at its highest, that is the only kind of order your Honour should be contemplating, namely one that looks at that limited set of circumstances where there is at least sufficient material before your Honour to make a judgment about the industrial merit of giving the imprimatur to RANS to operate award free even free from minimum wage orders, safety net increases, into the future.

PN1577

And the requirements of natural justice though as I said, met in form, have not been met in substance because I don't speak for employees in other states and I don't speak for employees in other divisions, but obviously their interests will be intimately affected by any decision your Honour makes in that regard.

PN1578

THE SENIOR DEPUTY PRESIDENT: Do you have much more to go in your - - -

PN1579

MS DOYLE: I do, your Honour. Probably a good 15 to 20 minutes. Would it now be a convenient time?

PN1580

THE SENIOR DEPUTY PRESIDENT: Yes, if that is convenient for you and I will resume at 2.15.

LUNCHEON ADJOURNMENT [12.50pm]

RESUMED [2.19am]

PN1581

THE SENIOR DEPUTY PRESIDENT: Yes. Ms Doyle.

PN1582

MS DOYLE: Yes, thank you, your Honour. I was just before the break going to part 3 of our submissions, the part that deals with whether it would inappropriate to make the order.

PN1583

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1584

MS DOYLE: And in the written submissions that is the section from paragraph 23 onwards and, your Honour, it appears to me on reading the application of submissions or at least the written submissions filed by RANS that one of their principal grounds in support of their application is that uncertainty exists by reason of the fact that the union has by correspondence and through meetings suggested that a transmission of business may have occurred in relation to the Harold Holt pool.

PN1585

Indeed that ground features very prominently in the application. They refer to correspondence they received in relation to potential under payment claim, etcetera. One of the other grounds that features in the application is that if the Federal Court determined that a transmission of business had occurred at Harold Holt, for example, then this might lead to a assertions, presumably by the union, in relation to other management contracts to which RANS is a party and one of the other grounds, this features in the submissions at least, at paragraph 4 of the RANS submissions, is that uncertainty exists as to the operational scope and affect of section 149 itself.

PN1586

Now in my submission, your Honour, those grounds in combination, while they may point to the genuine difficulties in the area of transmission of business, being a difficult area anyway, but also having gone through some flux in the Federal Court and the High Court, that uncertainty or even inconvenience does not represent a ground for making an order of the kind sought by RANS. True it is that there has been, as I have said, change in this area and true it is that even if there was finding by a Federal Court in relation to the Harold Holt pool, one, it would not then be an open and shut case as to whether or not the same applied in other sites for the reasons I explained this morning because it would all depend on the facts and the contract relevant to each site.

PN1587

But that somewhat inconvenient result, I guess if you are RANS shoes, is simply a result of the operation of the transmission business regime in the Act. There are guidelines set; there are principles that have been established and perhaps re-visited over time by the Courts and in each case where those principles raised, it is a question of the Court going to the particular facts and the particular circumstances of making a determination. It is not - RANS goes on the assert in its application of submissions that it would be contrary to the objects of the Act and contrary to the public interest to leave RANS in this situation of uncertainty.

PN1588

In my submission the reverse is the reality. The Act although it now has a focus on bargaining and workplace agreements and even individual agreements, still recognises that awards operate as a safety net and what

PN1589

RANS is saying is that they don't appreciate the possibility of the application to them, a local government regime. The order they seek goes even further though, it says we don't want to ever be subject to any award safety net, we don't want any regime created under the auspices of the Commission to apply to us and that is an incredibly dramatic result of the order that they seek.

PN1590

In talking about transmission of business in any event, I mentioned this morning, your Honour, that it was possible that one could see a theme coming out of some of the decisions that suggested a different role in relation to government transmissions of business. In that context, I suggested that the Employment National decision and the Australian Round Travel Authority decision from South Australia do indicate a slightly different approach by the Court to applying PP consultants in the government area.

PN1591

These authorities are in the volume of authorities we have supplied and I just wanted to make a couple of comments about the Employment National decision by the full Federal Court. If your Honour recalls in that case the circumstances which had arisen were that the former CES was split, some of the former employees of the Commonwealth CES were absorbed into Centrelink, others remained with the Department and others were going to become employees of Employment National which was created under the Corporations law.

PN1592

Not that was an entity wholly owned by the Commonwealth and it in turn owned ENA, the company that then employed people to do the job finding tasks that used to be performed by CES. Their Honours, in the Full Court, and I am referring principally to paragraphs 156 and 157 of that decisions, found that Employment National was another government agency and that the CES had been a government authority within the meaning of that phrase in the PP consultants.

PN1593

They also went on to find at paragraph 158 that even if their Honours were wrong about that and Employment National ought to really be regarded as a non-government body, they would have nonetheless formed the view that PP consultants in the High Court's test allowed them to adopt a different approach when dealing with the transfer of business of this kind because notions of profit and competition might not be as applicable as they would in a purely private, commercial sphere.

PN1594

And the point I want to emphasise for the Commission's purposes is that at paragraphs 172 to 175 of that judgment, their Honours went on the emphasise some of the factors at play in forming the basis of their conclusion that a transmission had taken place. One of the factors their Honours point to is that the Commonwealth had sought tenders from various private entities for agencies to take over Centrelink clients. Another factor they emphasised is that the Commonwealth had transferred leases and property to Employment National to enable it to conduct the former business of the CES.

PN1595

And a third matter they emphasised was that a large number of employees had transferred from the CES to the new entity. At least two of those features are identical here. The calling for tenders and not so much the transfer of leases but obviously the permission to RANS to use government owned infrastructure and sites from which to conduct business pursuant to a contract. Whether or not the employees transferred, it seemed to me from Mr Arnold's evidence, differs on a case by case basis and is probably influenced by the highly casualised nature of this industry as opposed to the public service in any event.

PN1596

THE SENIOR DEPUTY PRESIDENT: That - sorry, the people that were employed by the Council are not - - -

PN1597

MS DOYLE: Whether they get taken - - -

PN1598

THE SENIOR DEPUTY PRESIDENT: - - - primarily casual though, were they?

PN1599

MS DOYLE: I understand there were still a high number of casuals but probably not as high as is the case with RANS. I emphasise those features of that decision, your Honour, because it seems on my reading of it that the Full Court viewed those features, in combination with the government and non-profit focus of that industry or that particular workplace, as justifying a slightly different approach, a more narrow approach to the PP consultant's test and similar themes come out in Mansfield Js decision as I have alluded to before.

PN1600

In that case it was a case of partial contracting out and I would suppose you would call it of public transport in South Australia but his Honour was at pains to trace through the statutory change and the way in which the new entities conducted business. In light of that background of the applicable transmission of business law, as I have also mentioned, of course, it remains the case that section 170MB would apply and operate in relation to certified agreements even if your Honour made an order of the kind sought by RANS and in this vein in the materials, I think it is attached to Mr Nicol's statement, is the three certified agreements that operate at Stonnington.

PN1601

They are obviously, as their name would suggest, they build on the bedrock of the local government award but make some particular provisions appropriate to that council's operations. In addition there may be a local area workplace agreement such as that referred to in Ms Kuenen's affidavit, that is even smaller in scope in that it just applies to that particular pool, that Footscray pool where she works. That local area work agreement, the LAWAs referred to Ms Kuenen, demonstrates that even within an award structure, certain flexibilities, even changes to wage levels and spread abouts can be accommodated through the LAWA regime that RANS has made it clear in this application in the material support for it that it is not interested in pursuing flexibilities in that way.

PN1602

Indeed its application seems to rest on that the fact that the only way you can be flexible enough is to use an AWA regime and I have to say the AWA has provided are incredibly flexible in one sense in that they provide for spreads of hours as broad as 5 am to 10 pm, 6 am to 10 pm, etcetera and a flat rate of pay with no penalty rates, no limitations on length of shifts, shortness of shifts, etcetera, etcetera. And if that represents flexibility well and good but what it also represents is a circumstance in which casual employees have very little prospect of increasing their pay rate.

PN1603

Mr Arnold has explained that unless there is a decision by RANS management to up the AWA rate or unless you are promoted to team leader which brings a princely sum of a 50 cent increase per hour basically you are stuck with that rate and even though there is a spread of hours clause contained in those AWA schedules, they don't really seem to have any effect. If one looks at it this way there are no penalties that are attached for work performed outside of the spread of hours and no limitations on the numbers of hours performed outside the spread of hours so they would seem to of very little import.

PN1604

I should, while I am talking about the appropriateness of the order, just make some points about Senior Deputy President Polites decision in EDS. I have talked about that case in the context of power to make the application. Now in this context of whether or not it is appropriate to make the order sought, can I highlight some aspects of the evidence that Senior Deputy President Polites thought were important in the EDS case in justifying the order made there. This is the decision which is print T3529 as it is also in the bundle of authorities.

PN1605

In that decision his Honour referred to some key aspects of the evidence which are very different from the situation applying to RANS. At page 8 of the print that is in the form of authorities, his Honour points out that EDS had sought in the circumstances where it had taken over employment of employees from other organisations to ensure that they weren't disadvantaged. His Honour also points out that EDS performed work for a large number of clients and contrary to the RANS positions, the EDS employees were not integrated into the client's workforce so what would happen is employees working for EDS would work from project to project and they wouldn't necessarily be devoted to a particular client, project or site.

PN1606

Now RANS has made much of what they say is this capacity to transfer from site to site and division to division within their industry but in my submission all that has really been demonstrated through RANS16, the exhibit in which some staff movement is given and in the evidence generally is that in isolated instances some staff have transferred within the division they are in, within arts and entertainment and within leisure and in even more isolated circumstances from division to division but when one starts to look at the leisure centres or recreation centres listed it became clear and Mrs Soony agreed that a number of those people on that list were people who were working at two leisure centres at the same time perhaps doing a lifeguard shift in the morning at one and in the another centre in the afternoon.

PN1607

Even if one accepts that there is a degree of movement and calling in for shifts on special occasions, the overwhelming picture of the RANS workforce is that they are designated to a particular recreation centre or designated to two particular recreation centres where they perform some shifts in one part of the week and other shifts in another part of the week. But what we don't have is a labour hire company drawing on a pool of a casuals and assigning them to different sites every day of the week.

PN1608

And what we don't have is a company like EDS where there are in-house staff who perform a project for a council, for example, from time to time and then a project for another council. They work at the pool to which they have applied for a position as a lifeguard or swimming instructor until the RANS contract ends at which point in time it also seemed from Mr Arnold's evidence their future is uncertain. They certainly don't tend to get any redundancy payout from RANS. They may or may not get a job with the new service provider whether it is in-house or a new provider.

PN1609

The other distinguishing factor about EDS as referred to by Senior Deputy President Polites was that it was already covered by a certified agreement and it hadn't been suggested in its dealings that another award was an appropriate one for the application of the no disadvantage test when it went through the certification process with that agreement. I note that his Honour wasn't in any event prepared to make the order in the form sought EDS, that is a global order exempting them from all awards but what he did do was list the specific awards in relation to which he was prepared to make an order, that they wouldn't be bound by virtue of transmission and granted liberty to apply in the future.

PN1610

Now admittedly that is a broad order and in any event I have made the submission that in our submission his Honour was mistaken as to the power existing there to make that order but even though that order is broad it is certainly not as broad as that being sought by RANS now. It was limited to a list of award and limited to the circumstances before his Honour and his Honour made the specific order that those awards would not bind EDS by way of transmission. So we would say insofar as RANS relies heavily on that EDS decision, even with the caveat about power, the circumstances that his Honour relied on there as justifying the order simply aren't present here.

PN1611

Another decision I have mentioned this morning, your Honour, is that finance sector union decision, print S8850, and I have made mention of some of Senior Deputy President Drake's comments there. That was in the context of an application for the making of an interim award under section 111(1)(b) of the Act and again I am hiking back to my submissions on power but again obviously an example of the case where the Commission's power had been enlivened and then the question arose in a defensive way if you like as to whether or not the employer could have a clause inserted in the award that would make it clear that the award only bound them and not successors.

PN1612

I just want to highlight that at page, it must be at paragraph 72 of that decision, Senior Deputy President Drake decided it wasn't appropriate to resolve the entitlements of any party arising out of an apprehended transmission of business which may or may not occur and there is an important point there where her Honour says:

PN1613

Natural justice and the ordinary processes of the Commission require a hearing to allow any SSF -

PN1614

which would be the punitive transportee in that case -

PN1615

to ventilate this opposition to an application affecting them by the FSU or by any other organisation ...(reads)... unnecessary or ineffective for the sole purpose of adding to the comfort zone of any party.

PN1616

And I mention that because the same is true here. The order that RANS seeks whilst it is a pretty comfortable comfort in my respectful submission, it is an order that RANS be award-free forever even if it takes over every swimming pool in Victoria. If RANS achieve the market penetration I am sure it would enjoy and achieve that position, then the hands the Commission would be tied forever.

PN1617

As I have said, no safety net increase, no minimum wage order, no possibility of arbitrating as to the appropriate safety net in that industry could ever be countenanced because that company being dominant in that industry, would have always the shield of any order made by this Commission of the kind it seeks. Again in the context of whether it is appropriate to make the order in the form sought, in opening Mr Douglas drew your Honour's attention to separate examples of other section 149 orders.

PN1618

I just want to go to that for a moment, this is exhibit RANS7 if your Honour has that available. This is the list of sample award clauses. Your Honour this was provided as I understand it by way of example of other instances in which the Commission has made order of this kind. In my submission this shows up some of the points I have made about power apart from anything else but it also shows up that the circumstances in which the Commission has made these kinds of orders have been quite limited. The first example there, the Appliance Retail Division of the Gas Award, we are given clause 4.1 and it says:

PN1619

The provisions of paragraph D of subsection 131 of the Act shall not apply to this award.

PN1620

It is interesting to note that what that clause does is exempts the award from the operation of the Act, not the employer and I am harking on this issue of power a lot, your Honour, but it does underscore the fact that RANS has got it wrong in terms of the source of the power to immunise it. The next example is the Nurses Mental Health Award and this is the example I referred to earlier. This is a limitation on the ordinary circumstances of transmission of business:

PN1621

Notwithstanding the provisions of section 149, this award shall not be binding in respect of employment by a successor unless the successor is exclusively engaged in or in connection with the delivery of public sector mental health services.

PN1622

In my submission a probably quite appropriate order in the circumstances. No doubt the Commission had before it evidence about in what circumstances the South Australian Government had been contracting out or was likely to and made a decision on the merits that really this award was only appropriate for particular kinds of transmittees. The next example, the Coles Myer Award, there is a clause there:

PN1623

The award operate to the exclusion of any other awards containing provisions relating to occupational superannuation.

PN1624

I am at a loss there, I have to say, I don't see what that has to do with section 149. It is possible though that if there an alleged transmit of the award that the import of clause 3 there was just to make it clear that only this new award would apply but again if that was the circumstances in which the award was made it would again be an example of a proper indication of the Commission's power and would be an order that was made after hearing evidence on the merits about the occupational superannuation regime that Coles Myer was applying. As for the next example, Austrapay Award, without seeing that clause in context, I am bound to say that it seems to me that is simply a normal interpretative clause. It says:

PN1625

This award prevails over and operates to the exclusion of any other award.

PN1626

Probably not a clause that was inserted after any consideration of section 149 although it may have in some cases the effect of giving this award power to over-ride some transmitted award that it is alleged transmitted prior to it being made.

PN1627

THE SENIOR DEPUTY PRESIDENT: Unless otherwise provided in the other award.

PN1628

MS DOYLE: Yes. That is right. And the same can be said of the next couple of examples. They seem to me to be quite traditional interpretative clauses that operate in relation to transmitted awards as well as disputed awards. I mean if another union is advocating that some other award applies, perhaps this is an attempt to make it clear that the latest award will be the one that will operate at a particular site. I would say the same about clause 5 of the CFMEU Linfox example that is given there.

PN1629

This award operates to the exclusion of any other award.

PN1630

Same to the Marine Industry:

PN1631

This award unless a contrary intention appears properly operates to the exclusion and shall supersede all prior awards.

PN1632

Of course it is possible that is trying to deal with or aimed at dealing with an alleged transmitted award but also it is quite a traditional interpretive clause. Same goes for the Masters and Deckhands Award. If I can just over to halfway down the next page. Here we see, of course, the Employment National Administration Award and at clause 4.4 it is given:

PN1633

This award supersedes any award that might otherwise apply.

PN1634

That, as I said, may have the effect of ousting the operation of the alleged transmitted awards. Then again it would also clarify any other uncertainty which may have existed about which award applied. The same can really be said about all the examples in here your Honour. Some of them are award clauses that seem to have been made after a direct consideration of section 149. Others seem to be very traditional, supersessional interpretation of clauses. I am thinking here in particular of the last example given, the Australian Prudential Regulation Authority Award, clause 4.4:

PN1635

Provided this award supersedes and prevails over ...(reads)... but does not affect accrued obligations.

PN1636

That is quite traditional. In some circumstances it will have nothing to do with transmission of business, in others it will clarify a situation that might apply in relation to transmission of business. But none of those examples there go to bolster RANS' argument about a free-standing power that somehow comes from the ride into section 149(1)(d). Another assertion made by RANS is that it will be extremely difficult, they say in their submissions at paragraph 7, if not impossible:

PN1637

To ascertain with certainty which Federal awards bind and will in the future bind and to what extent clients of RANS or contractors to RANS -

PN1638

etcetera. In my submission that is demonstrably untrue. As RANS itself asserts, a great deal of its business comes from tenders of local government. We have heard from Mr Arnold that if there was ever any doubt those tender documentation and processes now expressly advert the problem of transmission of business. That being the case it is easy enough, if RANS is tendering for business, to satisfy itself and to its obligations by asking the council who is letting the contract and/or seeking its own industry advice and legal advice.

PN1639

That being the case the terms of the contract then bite, the contract says you must pay the award rate and you must ensure that your subcontractors or your clients do the same. That may be inconvenient to RANS but that is the result of venturing into the tender process in the way in which they have. The other point made by RANS in Mr Douglas' opening was that they claim there would be some confusion or lack of clarity about what would happen when the contract with RANS comes to an end.

PN1640

They asked whether or not, when RANS hands back the contract say at the Coburg pool, for example, as happened, whether RANS remains bound by the award. Well the answer is yes and no. No, with respect to the Coburg pool, of course. But, yes, if there has been some other transmission of business and in respect of that site whether transmission of business has occurred.

[2.45pm]

PN1641

With respect, some of the hypothetical questions posed by RANS are unnecessarily complicated. RANS remains bound as an employer with respect to the businesses in relation to which it is a transmittee under the Act. Yes, that answer may admit of different answers and, yes, it is ultimately a question for a Court, but it is not the case that when RANS loses contracts, it remains bound by the award with respect to a business that no longer exists.

PN1642

In this context RANS referred to the Newslink decision and suggested that it gave rise to the possibility that awards could infect RANS, if you like, that the Local Government Award, if it attached to it as Coburg, would stick with RANS across the country, including entertainment venues. Well, in my submission that is not what Newslink stands for. It is quite a limited case about Newslink buying into airport operations or agencies at airports and there is no suggestion in that decision that awards have that sort of viral effect, that they attach to an employer and travel through all arms of the business.

PN1643

The application of the award, as Newslink itself says, is found in the application or the operation and incidence clauses of the award itself. If you don't employ someone who can sensibly be seen as being related to the business in which you are a successor within classifications which can be sensibly seen as related to the original business, then you have no problem. If you are a successor, then the award attaches to you so far as is relevant.

PN1644

It is really not as complicated or as confusing as RANS would have the Commission accept. Can I turn finally, your Honour, to the issue of industrial fairness and merit? I have really dealt with that in the course of my submissions as I have gone through them, but as I have hopefully made clear, our primary contention is that this is in one sense a work value case which RANS has not addressed.

PN1645

It hasn't established why objectively its pay rates of between 14 and $15 are fair for people performing that work in the industry and it hasn't demonstrated why it is fair that those people should receive so much less than their colleagues who work at pools still run by local government. In addition, RANS hasn't demonstrated how or why it cannot pay the rates under the Local Government Award.

PN1646

Strangely, Mr Arnold claimed to have very little knowledge of those rates at all, yet his company has spent an awful lot of time and money attempting to ensure that they don't attach to him. RANS hasn't demonstrated which parts of the award it will find impossible to make flexible enough for its workplace. It hasn't demonstrated how it is that the rates will price it out of the market or make its operations untenable.

PN1647

It hasn't done any of that, so it hasn't addressed either side of the coin of industrial merit, neither the work value of the tasks performed by these people, nor why it is in such a privileged position that it ought to be exempted from the operation of the award and the industry. RANS also says that if this award has transmitted or in the future is found to transmit, this will discourage and inhibit the making of agreements, including Australian workplace agreements.

PN1648

This point is made by RANS in their application at paragraph 10. I am not sure that I wholly understand that submission. I guess in one sense the making of Australian workplace agreements may be inhibited if one considers that the no disadvantage test will be applied as against a different benchmark. That is not so much an inhibition as raising the benchmark, if your Honour pleases.

PN1649

It won't change the process. One is still able to enter into them and, indeed, they would override any award if they were entered into thereafter. I can't see with respect how it will discourage or inhibit the making of agreements. There is no problem with entering into a certified agreement after any final transmission is made. Perhaps it is really just the case that RANS doesn't want to enter into agreements and doesn't want to, as it has stressed a number of times in its application, to be bound by an award.

PN1650

RANS has exhibited no interest in bargaining under the auspices of the Commission and Mr Arnold in his evidence today said that they have a good relationship with their employees, which means that they wouldn't want to enter into certified agreements. Well, with respect, the two things simply don't follow one from the other. As far as the scope or the operation of any order, if your Honour were of a mind to make any order, I will address you in relation to this principally in closing, but I just want to note these matters.

PN1651

Obviously your Honour is aware the application seeks that the order be made as and from 1992. In the first place, a retrospective order of that kind would be extraordinary indeed. While the Commission does have power, obviously, to make retrospective awards, the typical circumstance in which that is made is in improving people's position and that is in back-dating a pay rate or back-dating some improvement under an award.

PN1652

If a retrospective order of that kind were made, it would, of course, cut across any transmission of business or any under-payment claim that any employee may want to bring at any stage relating to an alleged transmission of business. In other words, it would affect accrued rights for a number of employees in relation to a number of awards across the country, so it really would be an extraordinary order, indeed, knocking off those rights on and from 1992.

PN1653

It is also unlimited as to time in the future. It seems to operate into the future for all time, with no limitations as to sites or locations or employees or types of management and, again, as I have said on a number of occasions, that therefore ties the hands of the Commission. It can never make an award about this employer and it can never make an award about the industries in which it operates, so far as it will attach to them.

PN1654

So even if the Commission is of a mind to make any kind of order of this kind that deals with transmission of business vis a vis RANS, it is our submission that it ought to be very limited, indeed. We say there is no power to make it. If there is, it ought be limited to the Harold Holt scenario and perhaps one might then look at Senior Deputy President Polites means of allowing liberty to apply if there are other circumstances in which transmission of business looms as a problem, but there is certainly not a sufficient foundation of evidence here for RANS to justify making the order in the form that they seek.

PN1655

It ought to be very carefully limited as to the parties and the workplace it affects and limited as to any awards that it affects, rather than global in nature and unlimited as to time. Now, your Honour will have seen that in terms of what I have called the work value case, the kinds of pay rates received by people in this area, we have filed three statements, that of Barbara Kuenen, Melanie Every and Mark Murphy.

PN1656

As Mr Douglas has indicated, RANS has told me that they are happy for those statements of Kuenen and Murphy simply to be tendered and at this stage we do anticipate Ms Every being required for cross-examination and Mr Nichol, obviously, who gives more general evidence about the operation of the award and the like, so I won't dwell on the evidence at this stage. We intend to first of all call Mr Nichol and make him available for cross-examination.

PN1657

THE SENIOR DEPUTY PRESIDENT: Yes. Have I admitted the witness statements of Kuenen and - - -

PN1658

MS DOYLE: They are actually in ASU1.

PN1659

THE SENIOR DEPUTY PRESIDENT: Yes, but I haven't marked them, have I?

PN1660

MS DOYLE: No. I am in your Honour's hands, whether that is appropriate.

PN1661

THE SENIOR DEPUTY PRESIDENT: Yes. Well, if they are admitted without objection, then I will mark Kuenen as ASU7.

EXHIBIT #ASU7 STATEMENT OF B. KUENEN

PN1662

THE SENIOR DEPUTY PRESIDENT: And whose was the other statement that is not objected to? Mr Murphy, is it?

PN1663

MS DOYLE: That is right, your Honour.

EXHIBIT #ASU8 STATEMENT OF M. MURPHY

PN1664

MS DOYLE: Thank you, your Honour. In that case, then, I will move to the evidence of Mr Nichol.

PN1665

THE SENIOR DEPUTY PRESIDENT: Yes, thank you, Ms Doyle.

<STEVEN NICHOL, AFFIRMED [2.53pm]

<EXAMINATION-IN-CHIEF BY MS DOYLE

PN1666

MS DOYLE: Take a seat, Mr Nichol. Your full name is Steven Nichol and you are an organiser for the Municipal Employees Branch of the Australian Services Union?---Yes.

PN1667

And you have filed one primary statement in this matter with a number of attachments and a reply statement?---Yes.

PN1668

Can I just ask you to - I gather you want to correct something in the reply statement?---Yes.

PN1669

This is the document headed second statement of Steven Nichol, your Honour.

PN1670

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1671

MS DOYLE: Paragraph 8 in that statement, can you just explain the clarification you want to make there?---Yes, four or five lines in I give the dates for the compulsory competitive tendering legislation in Victoria and I say I am aware that the CCT regime existed in Victoria between '94 and '95 and then at the end of '99. That should read it existed in Victoria and I have the actual date. It came into place on 1 October 1994 up to the end of 1999, up to December 1999.

PN1672

Now, with that amendment, are the contents of that statement and the principal statement true and correct?---Yes.

PN1673

Your Honour, did you want to mark the two of those as one?

PN1674

THE SENIOR DEPUTY PRESIDENT: Yes.

EXHIBIT #ASU9 STATEMENT AND REPLY STATEMENT OF MR NICHOL

**** STEVEN NICHOL XN MS DOYLE

PN1675

MS DOYLE: Thank you, your Honour.

PN1676

Now, Mr Nichol, throughout both of those statements you refer to the Local Authorities Interim Award. If I understand correctly, that award, since you made those statements, has been made final and simplified?---It has recently been finalised and simplified.

PN1677

Can I just hand to Mr Nichol a delegate's copy of the award? I will provide photocopies.

PN1678

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1679

MS DOYLE: Just so we are reading off the same throughout, I will hand to the bench a copy.

PN1680

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN1681

MS DOYLE: And the document you have now, Mr Nichol, is that the final and simplified version of the Local Authorities Award?---Yes.

PN1682

And certainly without going to it clause by clause, are you able to say in general terms whether any significant changes have been made to the structure of the award or the way in which it applies to local government employees?---There would be nothing that would be radically different between this and the old award, especially in the areas of community recreation.

PN1683

And in order to work out what pay rates and classifications operate under this award, the paid rates, where are they found, for local government people working in leisure?---Well, they derive from the classifications which then lead you to the rates from band 1 to 8 and, as was mentioned earlier, predominantly we are speaking about bands 1, 2, 3 and 4.

**** STEVEN NICHOL XN MS DOYLE

PN1684

Can you look at clause 22.2 of the final award in front of you?---Yes.

PN1685

Are they the bands you were talking about, the bands and the levels applicable to people employed in leisure in local government?---Bands 1 to 8 generally running from level 1A to level 8D.

PN1686

All right, and in order to get the hourly rate for a casual employee, how do you get that from the weekly rate set out here?---You divide that weekly rate by 38, being hours worked per week and come up with a base rate. You then add a loading on for the casual of 20 per cent and you would then factor in the special engagement loading of 25 per cent for those people working in recreation.

PN1687

So it is divide by 38, add 20 per cent and then add a further 25?---Sorry, just clarifying that, you would add the 20 per cent casual loading first and then multiply it by the 25 per cent special engagement, not the other way around.

PN1688

And where is special engagement dealt with?---Well, in the interim award it was in part D, clause 71. I am not familiar with the clause in the new award, but I can look through.

PN1689

No, that is all right. Now, in terms of the swimming pools to which this award applies, the interim award or the final award, can I just have you clarify something about those bands that we have looked at there, 1 through to 8? Someone who is called a lifeguard, what classification would you expect them to turn up in in this award?---Predominantly bands 2 to 3.

PN1690

All right, and how would you know what level they should be at, whether it is A through to D?---That would depend on their period of service. There is an annual review clause which allows employees to progress through the bands and it also may depend on the employer. The employer may appoint someone at band 2A or 2B or 2C upon starting. It is at their discretion and that is often based on the skills and experience that the employee would have.

**** STEVEN NICHOL XN MS DOYLE

PN1691

And what about a learn to swim teacher or a learn to swim instructor, what band?---Predominantly band 3.

PN1692

And what about a cafe or kiosk attendant?---Predominantly band 2.

PN1693

What about someone providing aerobics instruction or gym instruction?---The gym instruction would be someone in band 3. The aerobics instruction would often - because the award is a minimum rates award, the aerobics instruction would often be at a higher rate that may even sit outside bands 1 to 8.

PN1694

And what about someone in customer service or administration?---Bands 2 to 3.

PN1695

And what about the duty manager?---Bands 3 to 4, again depending on their responsibilities and skills asked of them.

PN1696

In the RANS AWAs provided in Mr Arnold's evidence, he mentioned people called team leaders. Is that something that you can cross-reference to the award?---Yes.

PN1697

And how does that work?---They would be people who were responsible for staff and would therefore generally sit in bands 3 to 4 because of the responsibilities required.

PN1698

Your Honour, I think we should mark this final version of the award.

PN1699

THE SENIOR DEPUTY PRESIDENT: Is it necessary to mark it, do you think?

**** STEVEN NICHOL XN MS DOYLE

PN1700

MS DOYLE: No, I am not fussed. I just thought that - - -

PN1701

THE SENIOR DEPUTY PRESIDENT: Well, I suppose it is the document we are working off and for that purpose I will mark it.

EXHIBIT #ASU10 VICTORIAN LOCAL AUTHORITIES AWARD 2001, DELEGATES COPY

PN1702

MS DOYLE: Thank you, your Honour.

PN1703

One other matter about those classifications, Mr Nichol. Under the award, someone who is employed as a casual lifeguard, if they are asked to do a shift as a duty manager, does their pay rate change? How is that dealt with?---There is a clause for higher duties which would say that if they were requested to do that for more than so many hours or for more than one day, they would be paid at the bottom of the band of the particular classification.

[3.02pm]

PN1704

THE SENIOR DEPUTY PRESIDENT: Sorry, is it hours or one day, or does it vary?---It talks about a period of one day and we sometimes dispute as to whether that is 7.6 hours, eight hours or - - -

PN1705

I see. Yes, all right.

PN1706

MS DOYLE: And, finally, Mr Nichol, Mr Arnold this morning was shown a schedule of respondents to the Fitness Industry Award, the Federal award that applies in Victoria and he went through them, if you recall and indicated which of those employers operated local government facilities and if you recall, a high number of those were the YMCA and it was said that they are respondent to the Fitness Industry Award. First of all, does that fit with your understanding of the industry?---Largely, yes.

**** STEVEN NICHOL XN MS DOYLE

PN1707

The YMCA at the facilities that were indicated in Mr Arnold's list, do you know whether or not the Victorian Fitness Industry Award is the only industrial instrument that governs the YMCAs operations at those sites?---Many of the sites mentioned this morning for both the YMCA and Leisure Management and Marketing would have certified agreements with the LHMU.

PN1708

I have no further questions in chief. Just wait there, Mr Nichol. There will be some questions in cross-examination for you.

<CROSS-EXAMINATION BY MR DOUGLAS [3.04pm]

PN1709

MR DOUGLAS: Do you know what a rogue is?---Yes. Are you looking for a definition of a rogue?

PN1710

Yes?---A rebellious person.

PN1711

Is it any different if a person is called a fly-by-night rogue?---It could be.

PN1712

How?---I would think a fly-by-night rogue and a rogue are I suppose on reflection probably pretty similar.

PN1713

What, somebody who is dishonest?---Not necessarily.

PN1714

Somebody who is honest?---Not necessarily.

PN1715

Well, is there something in between?---If you would like to be more explicit, I will try and help. I am not sure where we are going, that is all.

PN1716

MS DOYLE: Your Honour, I am sure Mr Douglas will enlighten us, but at this stage it doesn't seem helpful.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1717

MR DOUGLAS: Yes, I will.

PN1718

Have you ever used the words fly-by-night rogue?---I can't remember. I may have, I may not have.

PN1719

Did you ever call RANS a fly-by-night rogue?---I can't recollect.

PN1720

Can't you? Do you know what a rort is?---Yes.

PN1721

What is it?---A rort would be a means of acting duplicitously.

PN1722

Being dishonest?---It may be.

PN1723

Being dishonest financially?---It may be.

PN1724

What is a scam?---Something similar.

PN1725

Do you remember suggesting in a publication that RANS is involved in perpetrating rorts and scams?---I can't recollect that. If you show me the publication, I could comment.

PN1726

You have no recollection whatsoever of ever writing that RANS and other like contractors are fly-by-night rogues?---As I said, I can't recollect that, but if you would show me a document, I could comment.

PN1727

Who are the dodgy brothers?---The dodgy brothers?

**** STEVEN NICHOL XXN MR DOUGLAS

PN1728

Yes?---The only dodgy brothers I can recollect was part of an Australian comedy segment on ABC TV where they would cross to the dodgy brothers who would be a comedy duo.

PN1729

Are you an organiser of the ASU?---I am.

PN1730

How long have you been an organiser?---Three years.

PN1731

Did you write that?---Yes, I would have written that.

PN1732

Yes?---My photo is blacked out, that is all.

PN1733

This was written some time last year?---I can't read the date on it. I can't see the date on it.

PN1734

Have you got any recollection?---It could well have been written last year. It may have been written this year. I am not sure.

PN1735

Where is the branch where you circulated it?---There isn't a circulation of branch news. I think this article has come from the ASU MEU PS journal which would be circulated to members three to four times a year.

PN1736

Australia-wide?---No.

PN1737

Victoria only?---Well, it would be circulated to members of the Victorian branch.

PN1738

Never go interstate?---Well, if a member lived interstate, it may well go interstate, but it is unlikely a member would live interstate.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1739

It is a Victorian branch publication?---Yes.

PN1740

Are you responsible for this article?---No, my secretary would be responsible for this article. I wrote the article.

PN1741

So why do you say you are not responsible? How come she would be responsible for it, if you wrote it?---No, my branch secretary.

PN1742

I see?---Mr Cochrane.

PN1743

If you would have a look at the first column. You agree that it is a publication that you wrote and you think it was last year?---It could well have been written last year or this year. You don't have the date.

PN1744

Do you remember when a demand was put on RANS for back pay on the basis that there had been a transmission of business in relation to Harold Holt Pool?---Yes.

PN1745

When was that?---That was earlier this year. I can't remember the exact date.

PN1746

Earlier this year? I have a copy of a letter of demand here dated 16 June from Maurice Blackburn to the managing director of RANS?---2001?

PN1747

2000, 16 June last year?---Last year?

PN1748

Do you see in this article you say in the middle column:

PN1749

As I said, we are also pursuing the RANS company through the Courts in a similar legal move to our actions against Silver Circle and the City of Greater Dandenong.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1750

Do you see that?---Yes.

PN1751

That legal move there, was that the legal move in relation to alleging transmission of business?---That could well have been.

PN1752

Are you aware of any other legal move that has been taken with respect to RANS by your union?---Well, we have certainly had discussions our law firms about RANS. As far as defining a legal move, I am comfortable in saying that there has been no further transmission of business case formally taken against RANS at this stage.

PN1753

No case has been taken?---No further case.

PN1754

Well, what case has been taken? Is there a case in a Court?---No, I thought you were asking me if there were any further similar legal moves in the Courts.

PN1755

Yes, all that has happened in relation to the ASU and RANS and the Harold Holt Pool is a letter of demand and a bunch of correspondence, where the union has threatened to take legal action. Isn't that correct?---Yes, that is our legal move at this stage.

PN1756

Yes, it hasn't gone beyond that?---Well, I think that is one of the reasons we are here today, but, I mean, I don't want to nit-pick over that.

PN1757

But it hasn't gone beyond that?---Well, as far as proceeding in the Courts, no.

PN1758

Well, let's not go around in circles. In any event, you agree with me that this article would have been written some time after 16 June of last year and the likelihood is that it is an article that was published last year, rather than this year?---As I said, I can't recollect exactly when it was written, but the date should be on one of the blacked out pieces of those pages. The date would normally be on the bottom left corner. I can come back to you with more information date, if that is important.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1759

No, don't worry. Can you tell me now who are the dodgy brothers?---Well, as I said, it is a reference to a comedy clip from ABC TV several years back. It was a comedy duo who would be running market stalls, flogging things off cheaply, performing a number of acts like that, so they are a fictitious duo.

PN1760

Who is the comedy duo in this article?---There could be a number of them operating at councils across Victoria. I don't think I name any particular group. I am just reading back through it. It is a while since I have seen this. It could be a number of contractors.

PN1761

Well, let's look at just the first column, about eight or 10 lines in. You say:

PN1762

Contractors such as the YMCA and RANS, LM and M, MRW and Leisure Australia.

PN1763

They are the ones that you are referring to?---And Healthlands.

PN1764

Healthlands?---Yes.

PN1765

That is the South African company?---Yes.

PN1766

And you say:

PN1767

Many of these groups are fly-by-night rogues.

PN1768

Now, who did you mean? Did you mean RANS?---I am just reading to see where I say many of these groups are fly-by-night rogues who are lining their pockets by paying well under the award. Many of those groups in my view were fly-by-night rogues who were lining their pockets by paying well under the award, because just before I had written that article, Healthlands went belly up in a gymnasium they were running in metropolitan Melbourne, leaving people without their pay and redundancies.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1769

So you only meant Healthlands?---I think back at the time I was concerned about a number of the operators in recreation, particularly Healthlands, yes.

PN1770

All right, I will ask you again. Did you mean RANS was one of the groups who were fly-by-night rogues in your view?---No, I wasn't inferring any particular group.

PN1771

Weren't you?---And I don't do that. I say many of them.

PN1772

Well, what about LM and M? Were you referring to them?---As I said, I wasn't referring specifically to a company. I was generalising.

PN1773

So you weren't referring to any of the companies you named there when you said many of these groups are fly-by-night rogues?---In my view there are some groups there who are fly-by-night rogues.

PN1774

Which ones?---Healthlands in particular.

PN1775

Any other?---No, I will leave it at that, I think.

PN1776

Only Healthlands? Okay. Well, why did you write it in that form, if you meant only Healthlands? Why didn't you say Healthlands is a fly-by-night rogue, the others are not?---I can't recollect.

PN1777

Were you suggesting that the YMCA was paying well under the award? The award I take it is your award, Victorian Local Authorities Interim Award?---Yes, this article was written for members, so they would have been aware that we were speaking of the Local Authorities Interim Award '91.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1778

Yes, but you are aware at that time, weren't you, that the YMCA was covered by an award of this Commission, not your award, a different award?---In some workplaces they were, yes.

PN1779

Well, many of their operations in the leisure field, where services are provided to local councils, YMCA was then covered by an award of this Commission?---In some workplaces they were, yes.

PN1780

What are the rorts and scams perpetrated by many of these groups? I take it where you say that, after you tell the members that you are going to go to the Bracks Government and the ACTU to highlight the need to regulate this industry, who are the groups you are referring to there, the ones involved in rorts and scams?---Which paragraph are we at there?

PN1781

The middle column, the second last paragraph, just after Silver Circle and City of Dandenong?---We are talking about encouraging staff to seek collective agreements, reduce the rorts and scams perpetrated by many of these groups. Well, I mean, I could highlight a lot of individual rorts and scams that have happened through compulsory competitive tendering that have affected our members.

PN1782

I am not asking you that. I am asking you who are many of these groups?---Well, as I said, Healthlands is one.

PN1783

Okay, but immediately before that, you single out RANS, don't you?---Silver Circle and RANS are both spoken about and City of Greater Dandenong in that paragraph, yes.

PN1784

Well, you say you are also pursuing RANS through the Courts, like you did with Silver Circle and the City of Dandenong:

**** STEVEN NICHOL XXN MR DOUGLAS

PN1785

In other cases, we intend to approach the Government and the ACTU to highlight the need to regulate this industry and reduce the rorts and scams perpetrated by many of these groups.

PN1786

And I want to know who are many of these groups? Did you mean RANS?---Well, as I said, Healthlands is one of them and I haven't specifically identified any others, but I talk at the start about contractors such as and I name a number of them and there are a number of contractors also not named there as well.

PN1787

Yes, but this article is about naming people, specific people, isn't it?---But if we go back to paragraph 2, I speak about contractors such as.

PN1788

Yes, and they all happen to be competing against each other in one industry, aren't they?---And there are a number of other contractors who also compete in the industry.

PN1789

Yes, well, why do you talk about these companies and name them, if you are meaning that other companies are involved in rorts and scams?---I have had concerns and I have concerns that there are a number of rorts and scams performed across the industry and this is an article attempting to highlight that and to let our members know that we are doing something about it by attempting to regulate the local government community recreation industry.

PN1790

Well, it would be fair to say that a member reading this would believe that you are taking action in the Court against RANS because it is in your view involved in rorts and scams. Do you agree with that?---No, I disagree with that. I haven't had that comment from a single member.

PN1791

Didn't you intend people to get that impression?---The intention of the article was to let members know that we were taking action in community recreation and we intended to attempt to regulate the industry in the local government area by a number of means and we talk about approaching the Government, we talk about proceeding through the Courts, we talk about seeking certified agreements.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1792

Well, can his Honour safely take it that you are not suggesting in this article or now that RANS is a company that is involved in rorts and scams?---Would you ask that again?

PN1793

Is his Honour able to proceed on the basis that this article, in this article and now you do not suggest that RANS is a company that is involved in rorts and scams?

PN1794

MS DOYLE: With respect, your Honour, I have let this go on and allowed some latitude. To an extent the document speaks for itself, but I have allowed Mr Douglas to pursue intention, publication and the like and it would seem something that might be more relevant to a different kind of legal proceeding, but Mr Nichol's personal view now or him looking back in time and trying to elucidate what he meant when this was put together is not really relevant to the section 149 application on foot.

PN1795

THE SENIOR DEPUTY PRESIDENT: What do you say, Mr Douglas, about that?

PN1796

MR DOUGLAS: Well, your Honour, I press the question. It is legitimate. The union in the case it puts to the Commission suggests at least by implication that RANS is doing the wrong thing by not paying the rates of pay as prescribed by the award that this union has in the local authority sector. Now, your Honour, I am entitled, I would submit, to put this question to him.

PN1797

THE SENIOR DEPUTY PRESIDENT: Yes, I think I will allow that question, Ms Doyle. Could I just indicate to the parties there is reference in that article - I haven't seen the article - I hear it being mentioned, about Dandenong City Council and I fear that I might have been involved in that particular matter that it refers to. I only say I fear that might be the case, because I don't really know what it is about, but I know, Ms Doyle, you are aware of that and again I don't even know if it means anything if they do refer to Dandenong, but so long as the parties are aware that I had some involvement in a Dandenong matter regarding the ASU and do you take any objection to me continuing in that?

**** STEVEN NICHOL XXN MR DOUGLAS

PN1798

MS DOYLE: No, I don't, your Honour. I should say I wouldn't object if Mr Douglas's question was Mr Nichol's view of the failure to pay Local Authority Interim Award rates, but the question that was just put to Mr Nichol was not that and I fear that drifting into a discussion of people's view of compulsory competitive tendering and whether or not particular operators have been involved in these activities is drifting away from the section 149 issues.

PN1799

MR DOUGLAS: I promise your Honour I won't go to compulsory competitive tendering because it plays no part in this case.

PN1800

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1801

MR DOUGLAS: Maybe if I could tender that document.

PN1802

THE SENIOR DEPUTY PRESIDENT: How shall I describe that? It is an excerpt, is it?

PN1803

MR DOUGLAS: An excerpt from the Victorian Branch News some time after June of 2000.

PN1804

THE SENIOR DEPUTY PRESIDENT: Thank you.

EXHIBIT #RANS18 EXCERPT FROM ARTICLE IN VICTORIAN BRANCH NEWS

PN1805

MR DOUGLAS: Now, just so that we understand each other, Mr Nichol, I will put the question in two parts. Did you believe at the time you wrote this article that RANS was involved in rorts and scams?---No.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1806

Do you now believe that RANS is involved in rorts and scams?---Do I now believe?

PN1807

Yes?---No.

PN1808

At the time you wrote this article, did you believe that RANS was a fly-by-night rogue?---No.

PN1809

Do you now believe that RANS is a fly-by-night rogue?---No.

PN1810

At any time between the writing of this article and now, did you ever believe that RANS was a fly-by-night rogue?---No.

PN1811

Did you have some responsibility, Mr Nichol, for the transmission of business demand being made on RANS?---Yes, I had some involvement in that.

PN1812

Did it arise from a suggestion made by you?---No, no, that wouldn't be a correct summary of it. It would more be at the direction of my branch secretary.

PN1813

Did he consult with you and ask whether it was something that should be done, or did you raise it with him as something that the union should look at as to whether it should take steps against RANS?---I think it probably evolved out of a meeting with some legal firms and my branch secretary and some members of the national office and the Australian Services Union.

PN1814

Did it arise because you were having difficulties in gaining right of entry to employees employed at the Holt pool?---No.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1815

Why did it arise?---We reviewed a number of areas of coverage for our union and sought to find cases that may be successful in transmission of business, so that would include child care, home care, community recreation, parks and gardens, by-laws, across the board.

PN1816

Was this part of a membership drive, a mechanism?---No more than any attempt by the Australian Services Union to encourage people to become members of our union.

PN1817

Yes, but in taking this step, you believed that it would result in some people joining the union?---No, not specifically.

PN1818

Did any people join a union as a result of you threatening to take legal action against RANS?---Look, I don't know. There is nothing really on the membership form which says I joined because of, so people fill the form in and join. I would imagine some did. I would imagine some others joined for a number of reasons. If I could just continue. I would say that the aspect of transmission of business in local government has resulted in an increase in membership in some areas, but certainly not specifically with RANS at any particular centre or even in community recreation.

PN1819

The demand for back pay amounts to, what, something between 400 and $500,000 on RANS?---I understand as of the date of the letter being sent, yes.

PN1820

You say right at the outset of your first statement that you are responsible for local government employees in the recreation area?---Yes.

PN1821

Is that across Victoria?---Yes.

PN1822

How many locations would that involve?---There's 78 councils across Victoria and our coverage is reasonably strictly in local government only and just about all of those councils would have some community recreation, whether it is a swimming pool or a gymnasium or a combination.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1823

And through that work you would have a fair idea as to which councils have contracted out the management or running of their recreational facilities and those that haven't?---I would be much happier if I did have a clearer idea than I do, but I do have some idea.

PN1824

You mightn't have an idea as to which ones are presently coming up, but you have a fair idea as to which ones are, in fact, now out on contract?---I have some idea, although, I mean, I just recently at a council discovered a swimming pool built back in the 1950s that no-one really seemed to know existed except the few staff who were working there that had been contracted out by council, so I don't put my hand up and say I know what is happening at every facility as far as who runs it, no.

PN1825

But just in round terms, is it just based on the knowledge that you have, with those qualifications, out of the 78 councils that would have swimming pools, about how many of those would be out on contract now?---Well, through compulsory competitive tendering, almost all of them. Recreation was one of the first areas to be contracted out by councils, along with libraries, so just about all of those facilities would have been put through the CCT wringer at some stage, either on a re-tender or on an initial tender.

PN1826

So you are saying that almost all of the 78 council swimming pools are now being managed and run by private sector operators?---Oh, no, many of those facilities were retained in-house, run by the council.

PN1827

But on contract in-house?---Well, it isn't a contract, as you well know, but they are run by the in-house recreation team.

PN1828

All right, well, that is the figure I want to know. How many are managed and run by outside contractors, private sector contractors?---I don't know the list off hand, but I could get back to you fairly quickly with it. It is probably in here.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1829

But would it be in broad terms 50 per cent of them, two-thirds?---I think I mention in one of these statements that it is around half, but please don't hold me to that. I can give you a more accurate figure. Just to clarify, in case someone thinks - a lot of the rural facilities would be run by committees of management. In our view, they would be directly employed by council, because council would provide the funds to a committee of management which sat at a local level at Nhill or Rupanyup or Rainbow or wherever. Some people may say that that has been contracted out and it is being run by a committee of management. We say that that is, in fact, still being run directly by council, so there's a number of those seasonal swimming pools which could swing the figure either way, depending on who is arguing the - - -

PN1830

THE SENIOR DEPUTY PRESIDENT: But roughly you say it is about 50 per cent?---Yes, your Honour.

PN1831

MR DOUGLAS: And do you see anything on the horizon at the moment that is going to change that position?---Yes.

PN1832

What?---The local government best value legislation, which was recently introduced in Victoria.

PN1833

So you see, what, most of them coming back in-house?---I have seen facilities come back in-house as a result of best value and I have it on good account from a number of senior council staff that more will be returning.

PN1834

But quite a number of those that are outsourced at the moment are on contracts that have got some considerable time to run, aren't they?---There are some contracts Mr Arnold spoke about this morning with a three-year contract and an option of two years which may be renewable if council wishes.

PN1835

Yes, well, it is an option that the contractor can take up, isn't it?---It can be with either party.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1836

You are fairly familiar with the Harold Holt contract, at least the one that is exhibited here, the one that has been operating from '95 up to now effectively?---I am not overly familiar with the contract, but I know something of the details of the tendering process.

PN1837

Would you agree with me that that contract in the broad is very similar to other contracts that are let by other councils to other private sector contractors?---No, they do vary. I have seen different contracts which require different returns. Some might require the contractor to actually pay some moneys quarterly, as the Harold Holt one does and some may require the council to pay the contractor some money to run the facility, as the Prahran pool at Stonnington did.

PN1838

Depending, as Mr Arnold said today, on whether the basic facility is capable of running at a profit or not, in any event?---There is an element of that involved. There are a number of other versions of contracts in local government tendering that apply to recreation.

PN1839

But virtually all of the contracts that currently exist are management contracts, contracts with a private supplier to run and manage a particular facility?---Yes, mostly.

PN1840

As I understand what the ASU is alleging with respect to the Harold Holt pool and the transmission of business is that a transmission of business occurred when the contract was entered into, that is to say, I am sorry, when the contract commenced and that is on 2 October '95?---Yes.

PN1841

And as a consequence of that, you say in your statement that RANS is bound by the interim award now updated as a simplified award?---That is what I understand from legal advice, yes.

PN1842

Yes, but the ASU has adopted a position on legal advice and I am not seeking to know what is in the legal advice, although I could presume, but the ASUs position is that the transmission of business occurred on 2 October '95?---Yes.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1843

That caused the award to be binding on RANS?---Yes.

PN1844

Do you say only in relation to the Harold Holt pool or beyond?---Only in relation to the Harold Holt pool or beyond, meaning other pools?

PN1845

Other parts of RANS business?---My understanding is that we are pursuing transmission of business only on the Harold Holt Memorial Pool.

PN1846

THE SENIOR DEPUTY PRESIDENT: In respect to RANS only, you mean?---In respect to RANS only, your Honour.

PN1847

MR DOUGLAS: Right, so I am just asking you what your understanding of the ASU position is. Does that mean that the ASU holds a position that if there was a transmission of business on 2 October '95, that transmission resulted in the award being binding on RANS only in relation to the Harold Holt pool and not beyond?---Yes.

PN1848

Not beyond - to any other pool that it might be managing for a local council?---No. That is, my understanding of the transmission of business we are pursuing is we are speaking specifically about RANS at Harold Holt from '95.

PN1849

Okay, and certainly not beyond Harold Holt into RANS entertainment area or its other business streams?---I am not aware of any coverage we have in the RANS entertainment area or other business streams beyond their community recreation area, but there may be some connection there. I am not sure.

PN1850

Coverage, you mean union eligibility?---Well, would our members be asking us to pursue such a thing and why?

**** STEVEN NICHOL XXN MR DOUGLAS

PN1851

Do you understand that - does the ASU have a position that, with respect to membership eligibility entitlements, you are entitled to enrol employees of RANS employed at Harold Holt?---Yes.

PN1852

Does it go further than that? Employees of RANS employed at any other council pool?---In community recreation, yes.

PN1853

Employees of RANS employed at a private pool such as the Essendon Football Club's pool?---No.

PN1854

Employees of RANS working in some other business stream, for instance working at the Derwent Entertainment Centre?---I would have to check the rules of our union and speak to the people in the Tasmanian office on that. I am not familiar with the Derwent Convention Centre.

PN1855

Okay, so the ASUs position is that it says that it has eligibility at least with respect to RANS employees who work at council owned pools?---Council owned or financed pools, yes.

PN1856

And that is not confined to Victoria, anywhere in Australia?---That is not the interest of my branch, anywhere else in Australia, so I am only speaking on behalf of the Victorian branch.

PN1857

Yes, but the eligibility of your union derives from the Federal eligibility rule, the description of industry rule and not the rules of your branch, correct?---Yes.

PN1858

Yes, so if eligibility goes to employees of RANS at council-owned or financed pools in Victoria, then it would also go to council-owned and financed pools elsewhere in Australia?---Yes, and just to add to that, it clearly does allow coverage for contractors. That is something that I was reading just recently.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1859

Contractors to who?---Contractors to local government.

PN1860

Are those words in the rule, are they?---Sorry?

PN1861

Are those words in the rule?---Yes. I don't have that with me, but again I can produce that if you wish. There is a copy of that in my office.

PN1862

When did you become aware of those rules?---Last Wednesday.

PN1863

Who pointed that out to you?---I read them.

PN1864

Is that because I said in those other proceedings that we were going to argue that you have no eligibility entitlement?---No, it wasn't, actually. It was to do with another contractor in another area of interest.

PN1865

Well, that interests me, too. Are you aware that Stonnington has over 130 contractors at the moment?---No. I am surprised at the number, extremely surprised. Stonnington is one of those councils which has been returning a lot of work to direct council, directly back to council, under best value, which I was speaking about before.

PN1866

But it is a fact that councils contract out a whole range of their activities?---Yes, but as I said, I am extremely surprised at the number at Stonnington; 130 is far more than I would have guessed at.

PN1867

Are you aware whether the City of Stonnington contracts out the management and running of its libraries?---No, it is not an area that I work directly in.

PN1868

Are you aware whether that council contracts out certain of its financial functions?---I am not aware, but I would imagine that there are some areas that they do contract out.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1869

Do you know whether the ASU has a view as to whether or not it has eligibility over employees of those types of contractors?---I am not aware.

PN1870

So we know what the union says about 2 October '95 and its position is that RANS is covered by the award as simplified, right, which is ASU10?---Yes.

PN1871

Does that mean that the union has a view that RANS has been bound by every variation that has ever occurred to the award between 2 October '95 and now?---Yes.

PN1872

And does it mean that the ASUs position is that RANS will be bound by any variation to the award that occurs after today?---Yes, it is certainly what we would be seeking.

PN1873

Did your union - were you involved in the simplification proceedings?---No.

PN1874

Did the award come about in its simplified form as a result of consent, or was there some form of arbitration?---I wasn't involved directly, but I have a recollection there was some arbitration on a couple of clauses, senior executive officers and I think permanent part-time employees, but don't hold me to that, please.

PN1875

Did either the ASU or the councils or any one of the councils or authorities bound by the interim award seek a special case before a Full Bench of the Commission pursuant to the wage principles with respect to the simplifying of this award?---I don't know.

PN1876

You were here in the Court room this afternoon when the ASUs counsel completed her opening address?---Yes.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1877

Did you understand what she said about this case really being a work value case?---I understood some elements of that, yes.

PN1878

What do you think she meant by that?

PN1879

MS DOYLE: Your Honour, with respect, that is not really going to be useful. It might be interesting for me to hear whether or not my submissions made an impression on anybody, but it is not going to be useful in terms of an answer from this witness.

PN1880

THE SENIOR DEPUTY PRESIDENT: Yes. Mr Douglas, what he might think about that, really, probably has no bearing on - - -

PN1881

MR DOUGLAS: Well, I will put it another way, your Honour.

PN1882

What do you understand to be work value in terms of this Commission's functions?---My knowledge of the functions of the Commission is reasonably limited. As I think you raised before, I have been an official with the ASU for about three years, but if you are interested in my limited views on it, then I would imagine it is the relation between what you are paid and the sort of work you do.

PN1883

Yes, I understand the ASUs complaint here is that you have got some council people, council employees in Stonnington working at - what is it, the Prahran pool?---Yes.

PN1884

And you have got people down at the Holt centre working for RANS who you perceive to be on lower rates than the people at Prahran?---Are you asking me to agree with that?

**** STEVEN NICHOL XXN MR DOUGLAS

PN1885

Yes?---I think that is simplifying it. I think there's a number of people working at facilities across neighbouring councils or even across metropolitan Melbourne or across Victoria who perform similar work at reasonably similar community recreation centres.

PN1886

Yes, as the people at Prahran?---Prahran is one example.

PN1887

Yes, and then you have got right across Victoria in 50 per cent of the councils, employees working for various private sector people, getting what you understand to be lesser rates of pay?---In some examples, yes.

PN1888

Some examples, and you say, well, they are doing the same work, the council employees and the private sector employees, albeit that is wrong, the private sector people should be paid what the council sector people are being paid. That is the ASUs complaint, isn't it?---Well, just to elaborate on what I was saying, we have just recently been involved in a council which has contracted out its recreation to one of the groups we were talking about today, Leisure Management and Marketing, but it is an agreed transmission of business as in the award and the relevant EBs will be paid to those staff, so, in effect, they have gone from being council employees with Yarra Ranges to becoming LM and M employees with Leisure Management and Marketing, with no change in pay and conditions and, in effect, the recent enterprise bargaining agreement for Yarra Ranges which was certified about three weeks ago will be passed on to those employees of LM and M, so it is not just the Prahran pool is the point I am trying to make when we talk about the value of the work.

PN1889

Yes, well, you are not suggesting that the Prahran people should get a reduction in pay, are you?---No, I am not suggesting that.

PN1890

Well, you are saying that in terms of comparison, the people employed by RANS at the Holt centre should have a wage increase and that should bring them up to the Prahran people, whatever that increase needs to be, that that is where the final position should be?---Well, simply we are seeking regulation in the local community recreation area and we would comfortably negotiate with employers to be respondent to our award and negotiate it from there.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1891

Yes, so that all of these people are on the same rates of pay?---And that may well in turn lead to improved pay and conditions for our members at Harold Holt pool. I would imagine it would.

PN1892

How many members have you got at Harold Holt?---I can't recall.

PN1893

Two?---I honestly can't recall.

PN1894

Ten?---I don't have the figures with me. I could ask my branch secretary if he would be interested in providing them.

PN1895

Isn't one of the organiser's functions to make sure that the people are signed up and the dues are paid?---No, it is not one of my functions.

PN1896

Isn't it?---No.

PN1897

But you would have a fair idea whether Harold Holt pool is returning some income for the union or not, wouldn't you?---I could say more than one and less than the total number of staff there.

PN1898

What is the total number of staff?---I think Mr Arnold said about 87.

PN1899

Well, I would agree with that. You can do better than that, can't you? At least one and maybe 86?---I don't think the manager is a member, so, yes, 86, but I can't - I honestly can't tell you offhand.

PN1900

You don't know. You don't know whether there is three or six or 26?---I know there is membership there.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1901

Okay, can I take you to your first statement? I want to go to paragraph 23.

PN1902

THE SENIOR DEPUTY PRESIDENT: I am sorry, what was that in, Mr Douglas?

PN1903

MR DOUGLAS: Paragraph 23.

PN1904

THE SENIOR DEPUTY PRESIDENT: Of what?

PN1905

MR DOUGLAS: Mr Nichol's first statement. I am not sure what its exhibit number is. Exhibit 9.

PN1906

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN1907

MR DOUGLAS: Now, in 23.1, well, in the following three subparagraphs you refer to three Stonnington certified agreements, the '94, '97 and '99 agreements?---Yes.

[3.53pm]

PN1908

And in paragraph 24 you set out a bunch of wage rates?---Yes.

PN1909

According to the various bands and what are we to take from that table in paragraph 24?---Which column?

PN1910

Well, let's look at the first column, EBA1, 9 August '94 through to 9 April '95. Do we take it that what you are saying is that it is the ASUs position that RANS should have been paying those rates during that period?---Yes, where applicable. I am not agreeing that everyone - yes.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1911

But RANS - the contract hadn't occurred at that stage, had it? It didn't occur until 2 October '95?---My mistake, yes. I assumed we were speaking about a relevant period.

PN1912

Yes, but we can draw a line through column 1 of EBA1, can't we, because the contract - 2 October 1995 hadn't occurred? There had been no transmission?---There had been no transmission. I think the intent of the figures there are to show the progression from the base award rates as of '94 on through the negotiated first certified agreement, number 2, number 3.

PN1913

All right, we will leave them in on that basis, but they don't impact on RANS?---I agree.

PN1914

The transmission occurred if it, in fact, occurred during the period covered by the second column, April '95 to - - -?---The date was October '95.

PN1915

2 October '95, halfway through that period?---Yes.

PN1916

Now, Mr Arnold in his evidence today - you were here then, weren't you?---Yes.

PN1917

Made it pretty clear that the contract that commenced on 2 October '95 ran on until at least June/July of this year and maybe it is still running on because the new contract hasn't been formally signed, but that is a different issue?---I was interested to hear that, yes.

PN1918

Yes, so from at least up until the middle of this year, let's forget what might or might not have happened in relation to the new contract, at least up until the middle of this year there had been no other transmission, had there, if one happened on 2 October '95?---The same employer performing relatively similar duties from 2 October '95 on, until this year.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1919

Yes, under the same contract. I mean, it was rolled over?---Yes. Well, I wasn't quite clear on what Mr Arnold said there as to whether there had been some interim alterations to the contract or not. At some stage he seemed - I got the impression, anyway, that there had been some variations to the contract.

PN1920

There might have been some variations to the contract, but his evidence was the contract ran on. In any event, you are not aware that the ASU alleges that there has been any other transmission of business in relation to the Harold Holt pool and contracts obtained by RANS, other than the one that you talk about in relation to 2 October '95?---Can you say that again, please?

PN1921

Yes. I mean, the ASU doesn't allege, apart from what you say as to 2 October 1995, that there has been any other transmission of business from the Stonnington Council to RANS?---At Harold Holt pool, no, not to my knowledge.

PN1922

Yes, and I am not suggesting that you have to include the new contract, if the new contract is in existence. Why do you say that - how is the first, what you call EBA1, how is that involved? As I understood it, EBA1 didn't come into existence until after 2 October '95?---Yes, it wasn't certified until a date later than that, I understand.

PN1923

Yes, 1996. That is right, isn't it?---I can go to the date. I think we have got the EBA there.

PN1924

Absolutely. We will both go to it. It is SN2, your Honour.

PN1925

THE SENIOR DEPUTY PRESIDENT: Yes, thank you?---I think certified in September '96.

PN1926

MR DOUGLAS: No, you are wrong, 26 August, the hearing. The decision was given in September '96?---26 August, yes, correct.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1927

In fact, have a look at when the document was signed, 29 May '96?---Yes.

PN1928

Do you know whether the ASU has ever considered how it could possibly be that a certified agreement that never existed at the time of the transmission of business could possibly bind RANS?---Yes, the agreement clearly says that payments negotiated through the EB will apply from 17 October 1994 and shall remain in force for two years. That is page 2 of the certified agreement and clause 27, quantum and timing, states that wage increases shall apply as follows, that three per cent increase in wages as from August 1994, a further three per cent, eight months subsequent to the first instalment.

PN1929

And so you are saying that it is the ASUs position, is it, that because there was a retrospective operation of this agreement back, what, 18 months before its certification, that it actually transmitted to RANS on 2 October '96?---We would be seeking that, yes.

PN1930

That is what would be argued?---Yes.

PN1931

That RANS is bound by something on 3 October 1995, bound by something on 3 October 1995, that something not coming into existence until almost 12 months later. How can that be?---Well, as per the certified agreement. We would argue that the certified agreement applies as well.

PN1932

All right, well, tell me, then, how is it that the 1997 certified agreement applies, if there was no further transmission?---My legal understanding of the matter is reasonably limited, but I understood that it was a document that replaced EB1, as we call it.

PN1933

How do you have that understanding?---That is my understanding. I stand to be corrected.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1934

Were you aware that the legislation says that a time expired certified agreement is replaced, comes to an end, when a new certified agreement is made?---There are often clauses in certified agreements which do state that, yes. That is my understanding.

PN1935

No, I am talking about the legislation. Are you aware what the legislation says?---No.

PN1936

And the '97 certified agreement says nothing about wage rates, does it?---I don't know.

PN1937

Haven't you had a look at it? I mean, you set out wage rates in that column, paragraph 24. Isn't his Honour to presume from EBA2, the heading there in that column, that the '97 agreement has wage rates in it?---That the '97 agreement has wage rates in it?

PN1938

Yes?---The '97 agreement, clause 6, has quantum and timing increases, yes.

PN1939

Yes, but where do you get the hourly rates from the '97 agreement?---By progressing from the '95 agreement.

PN1940

Oh, you say that the '94 agreement is still alive, not replaced?---The clause simply says that subject to clauses 6.2 and 6.3, all permanent employees - - -

PN1941

THE SENIOR DEPUTY PRESIDENT: Sorry, what clause are you reading from?---Sorry, your Honour?

PN1942

What clause are you reading from? 1997?---Yes, EB2, which is SM3, 1997, clause 6.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1943

Right?---Quantum and timing, an increase of 17.50 per week from 17 October, a further increase of 17.50 per week from 17 October '97 and then there is a clause there LAWAs, there is another subsection that talks about part-time and casuals being entitled to pro rata increases.

PN1944

MR DOUGLAS: Yes, but I am asking you where does the 1997 agreement have band 2A, 2B, 2C, 3A, 3B, 3C and 3D with hourly rates set for it?---It doesn't.

PN1945

It doesn't?---And many agreements didn't. They do now.

PN1946

Well, even if there had been a transmission that brought this agreement across, how is it that you can say what you say in column 2 there in relation to EBA2, if it doesn't have those bands in it?---We have agreement with City of Stonnington. We have never had a discrepancy with council as to what wage rates apply. There was an understanding that that rate would then factor in on top of the previous rate, divide by 38, come out with the hourly rate.

PN1947

But I thought the ASUs position is that RANS is bound by the law to pay these rates, not by some gentlemen's agreement that you might have with the council?---I don't know if it is a gentlemen's agreement. It is worked across 78 councils in Victoria.

PN1948

Well, let's call it a deal, a hard done deal?---Well, I wouldn't call it that either. My legal knowledge again is reasonably limited on this, but I have never had the discussion where anyone has disputed that the rate in EB2 doesn't add on to the rate in EB1, until now.

PN1949

But what if the legislation says that EB1 dies, when EB2 is certified and EB2 has no classifications? How can you then say that RANS is bound to pay those rates that you have got in those clauses?

**** STEVEN NICHOL XXN MR DOUGLAS

PN1950

MS DOYLE: Your Honour, again I have allowed a lot of latitude, but we are talking about highly technical transmission of business issues. There has been a lot of questions - - -

PN1951

MR DOUGLAS: Yes, and I would take issue with you saying you have allowed me latitude. The Commission allows me latitude, not you.

PN1952

MS DOYLE: Well, your Honour, when I use that phrase, I mean I have not stood up because I don't want to interrupt the flow of cross-examination and, of course, Mr Douglas is entitled to put his case, but a lot of the questions to Mr Nichol have talked about does the ASU - does it have a position and it seems to me there is a difficulty arising because if all Mr Douglas means is whether the ASU alleged in the letter of demand to which he has referred, that is a fair enough question, but if one is talking about a transmission of business proceeding which has not been commenced, let alone pleaded, it seems to me that the questions at the moment are asking Mr Nichol a lot of detail about how if this happened, then that might happen under the Act and it seems to me that it is straying from the topic. This is not, after all, the ASUs transmission of business application with pleadings about those certified agreements.

PN1953

THE SENIOR DEPUTY PRESIDENT: Yes, Mr Douglas, is this a matter you could deal with in submissions? I mean, you have shown me the points you are trying to make. I think you have demonstrated that very clearly. I don't know whether you need to take it any further.

PN1954

MR DOUGLAS: Yes, well, partly it is, your Honour, but I am entitled to ask the witness, I submit, some questions about this because, after all, by setting out this table and looking at what he says about the three certified agreements, he is saying to your Honour in an attempt, or the union is, in an attempt to prevent our application being granted, that RANS was legally obliged to pay these rates. Now, I am entitled to explore why he says that RANS was legally bound to pay these rates.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1955

THE SENIOR DEPUTY PRESIDENT: But he says he doesn't really understand the technicalities. Well, this is as I understand it. He doesn't understand the technicalities of it and he assumes by the sound of it that because the 1997 agreement specifies that it adds on to EBA1, then you simply apply it that way. Now, you have picked up the point, well, the Act suggests that EBA1 dies when EBA2 was certified, but can this witness assist in any way?

PN1956

MR DOUGLAS: Well, maybe not any further, your Honour.

PN1957

THE SENIOR DEPUTY PRESIDENT: If it is something important to your case, by all means pursue it, but if that is the point you are making, well, I can see the point.

PN1958

MR DOUGLAS: Yes.

PN1959

Can I take you to the 1991 award, please, the interim award, which I think is SN1? Have you got that?---Yes.

PN1960

Do you know where this award originated from?---No.

PN1961

Do you know whether it is made by arbitration or by consent?---No.

PN1962

Are you aware that it was made in a sense to consolidate three awards that have previously existed in the local government sector in Victoria?---I have some understanding of that, yes.

PN1963

Are you aware that there has been a Local Government Authorities Employees Victoria Award 1984, which was one of the three predecessor awards?---I have some understanding of that, but very little knowledge of it.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1964

Your union currently is a result of the amalgamation of a number of unions, including the MEU and the MOA?---Yes.

PN1965

And the MEU and you refer to the MEU in your statement as if it exists as a registered organisation, but I presume that that is the way the union views itself internally?---No. I mean, if you have taken me to make that inference, that is accidental. As a Victorian State - in Victoria we are known as the ASU and there is an MEU division and a services and energy division, occupying separate floors in the same building.

PN1966

But, in any event, what I am suggesting is that the MEU prior to amalgamation was bound by the Local Authorities Employees Award in Victoria. Do you have any knowledge of that?---No.

PN1967

THE SENIOR DEPUTY PRESIDENT: Mr Douglas, are you going to spend long on this point? I have another matter at 4.30, that is all.

PN1968

MR DOUGLAS: Yes, your Honour, that is an appropriate time. I was wondering if - - -

PN1969

THE SENIOR DEPUTY PRESIDENT: Is it convenient to break at this point?

PN1970

MR DOUGLAS: Yes, it is, and it would be more than convenient to start early tomorrow, if your Honour can spend a bit more time.

PN1971

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1972

MR DOUGLAS: I think we have got a chance of getting pretty close to finish by lunch time on Thursday, I think.

**** STEVEN NICHOL XXN MR DOUGLAS

PN1973

MS DOYLE: Yes, I spoke to Mr Douglas and I could easily arrange to have Ms Every to be available Thursday and while we tried to bring her back, we can't, due to her work commitments, but Mr Douglas is agreeable to us actually doing in substance our closing submissions before she gives evidence, if that is required, because of the fairly limited scope of that evidence, so that will mean, certainly even if she comes first thing Thursday, we would still be well away by Thursday lunch time.

PN1974

THE SENIOR DEPUTY PRESIDENT: I will just have a look at my diary. Yes, nine o'clock in the morning, is that all right?

PN1975

MR DOUGLAS: Yes.

PN1976

THE SENIOR DEPUTY PRESIDENT: I won't be able to start early Thursday morning, but perhaps we can sit a bit longer tomorrow, if necessary. Very well, thank you.

ADJOURNED UNTIL WEDNESDAY, 19 DECEMBER 2001 [4.13pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

SIMON NICHOLAS ARNOLD, SWORN PN1137
EXAMINATION-IN-CHIEF BY MR DOUGLAS PN1137
EXHIBIT #RANS17 STATEMENT OF SIMON ARNOLD, WITH ATTACHMENTS PN1144
CROSS-EXAMINATION BY MS DOYLE PN1149
RE-EXAMINATION BY MR DOUGLAS PN1429
WITNESS WITHDREW PN1506
EXHIBIT #ASU7 STATEMENT OF B. KUENEN PN1662
EXHIBIT #ASU8 STATEMENT OF M. MURPHY PN1664
STEVEN NICHOL, AFFIRMED PN1666
EXAMINATION-IN-CHIEF BY MS DOYLE PN1666
EXHIBIT #ASU9 STATEMENT AND REPLY STATEMENT OF MR NICHOL PN1675
EXHIBIT #ASU10 VICTORIAN LOCAL AUTHORITIES AWARD 2001, DELEGATES COPY PN1702
CROSS-EXAMINATION BY MR DOUGLAS PN1709
EXHIBIT #RANS18 EXCERPT FROM ARTICLE IN VICTORIAN BRANCH NEWS PN1805