C2002/1770, Transcript of Proceedings [2002] AIRCTrans 2444 (2 July 2002)

AUSCRIPT PTY LTD
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TRANSCRIPT OF PROCEEDINGS


O/N VT04504
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT ACTON
SENIOR DEPUTY PRESIDENT LACY
COMMISSIONER LEWIN

C2002/1770

APPEAL UNDER SECTION 45 OF THE ACT
BY CHISHOLM INSTITUTE OF TRAINING
AND FURTHER EDUCATION AGAINST THE
DECISION (PR 915845) OF COMMISSIONER
HOLMES AT MELBOURNE ON 25 MARCH 2002
IN U2001/6087

MELBOURNE

10.10 AM, MONDAY, 17 JUNE 2002

PN1

MR B. SHAW: I seek leave to appear in this matter for the appellant.

PN2

MR R. MILLAR: I seek leave to appear on behalf of the respondent, the applicant in the initial application.

PN3

SENIOR DEPUTY PRESIDENT ACTON: Leave is granted in both instances. Mr Shaw.

PN4

MR SHAW: Thank you, your Honour. The appellant's position in this matter is that the Commissioner erred in finding that the applicant in the original matter, Mr Rowlands, employment fell within the scope of section 170CB of the Act and subsequently the jurisdiction of the Commission. In his decision of 25 March 2002 the Commissioner at first instance found that based on the construction essentially of the award and the contract, and I will come to this in much more detail later, that the appellant's position fell within section 170CB of the Act and did not fall within the scope of section 170CC(3) and regulation 30B(1)(f) of the Act.

PN5

Now, in my submission the first premise is incorrect but in any event I also submit and will submit that the second premise is also incorrect, that is, that if in some way either the salary or conditions of employment or any of the conditions of employment, as is used in the Act, fall within the scope of the award then the more stringent test under section 170CC(3) is not met or not satisfied and therefore the Commission does not have jurisdiction. In fact of course there probably isn't any need for the Commission to have made the finding that he made in dealing with a Victorian employee.

PN6

As I read the construction of the Act, 170CB, and certainly in my submission, sets out the application of the unfair dismissal jurisdiction and sections of the Workplace Relations Act 1996. It finds - or it determines I should say, that subdivision B of the Act applies in respect of certain employees as regards to the termination of their employment and it defines those people being a Commonwealth Public Sector employee, a Territory employee, or a Federal Award employee who was employed by a constitutional corporation and goes on to define others that needn't concern us. It then defines a Federal Award employee as meaning an employee any of whose terms and conditions of employment are governed an award, a certified agreement or an AWA.

PN7

Now, probably the leading case on that point is Desmani Pty Ltd trading as Sales Resort v Thorn and I have copies. I am sure the Commission is familiar with it but I have copies that came off my printer, so for ease of referring to it. Now, in that case the Full Bench of the Commission found that Mr Thorn was a person who was a Federal Award employee in that some of his conditions of employment were governed - well, not governed, it is the wrong word to use - yes, governed by an award.

PN8

However, that case concerned an employment situation in the State of New South Wales where the first point that had to be satisfied was whether a person was called by a Federal Award in order to obtain and attract the jurisdiction of this Commission or whether they should indeed have been in the State system. That case clearly did not deal with a situation where the employer at least had alleged that the salary of the employee exceeded the cap allowed by the Act and the regulations. Indeed in a very important point in my submission, certainly an important point in dealing with the second string of our argument when we come to that, at page 5 of 8 of the document that I have handed up, where the Bench deals with the arguments in that case advanced on behalf of the appellant, at (iv) the Bench then says:

PN9

Resort to 170CD(3) does not assist in construing the expression Federal Award employee. Section 170CD(3) ...(reads)... and a different meaning was intended.

PN10

Now, that certainly has been accepted, as I understand it, by this Commission subsequently and stands as the general principle in regards the definition of Federal Award employee and drawing the distinction between a Federal Award employee and a person employed under award conditions. Now, I do that effectively by way of introduction but I will deal with the first point which is whether Mr Rowlands was indeed a Federal Award employee first and it remains the submission of the appellant in this matter that he was not.

PN11

Mr Rowlands had executed a contract with his employer which was one of the exhibits in the matter below and which I presume the Commission has.

PN12

SENIOR DEPUTY PRESIDENT ACTON: C1, I think.

PN13

MR SHAW: C1. I would assume it was C1. It was part of it and then re-appeared as R4.

PN14

SENIOR DEPUTY PRESIDENT ACTON: Yes, Mr Shaw.

PN15

MR SHAW: That contract clearly was a common law contract in written form. It made no mention of an award. Without repeating the submissions below, indeed my submissions are summarised in the Commission at the first instance's decision at paragraph 13 where he summarising my submissions then said:

PN16

Examination of the contract of employment reveals that it contains no reference to the award and moreover, that the ...(reads).... of employment of Mr Rowlands.

PN17

Now, that remains the submission of the appellant, that the contract was indeed exclusive, that it covered the field and that there was certainly no need for any award provision. The contract provided in it is schedule A it had a commencement date of 26 November 2000 and an expiry date of 25 November 2003. It provided in clause 2 the terms of employment, that that was the period for which it would apply and at that point the appointment would end. There is no possible contemplation of that point, the contract would end and the employment would continue and perhaps some sort of award provision would take over. The appointment ended on the day the contract ended.

PN18

SENIOR DEPUTY PRESIDENT LACY: But that is subject, isn't it, to provision in the agreement or contract for an extension of the agreement or an extension of the employment?

PN19

MR SHAW: It provides, your Honour - it probably makes it confusing. It does provide that if at the expiry - it provides firstly that there is a capacity for conferring, the parties confer four weeks before the expiration of the contract with a view to reaching agreement as to whether the employee will be offered further appointment and then if at the expiry of the appointment under the contract no further position was offered the institute's redeployment processes would apply and then in at 2.4 the contact states that it contains the entire agreement between the parties as regards the employment.

PN20

The contract also provides - attached to it, which was also separately tendered by my learned friend as exhibit R4, what is headed A Competency and Accountability Profile. Now, that appears to be jargon which is presumably of some significance to the Institute but what it sets out really is a position description with the responsibilities of the applicant set out in some detail. It is clear from that, certainly clear in my submission, that the position is a senior one. Indeed in his decision Commissioner Holmes at paragraph 22, in dealing with the contract of employment and essentially with both the description of the title of the job and with the competency and accountability profile he concludes:

PN21

Thus it could be fairly adjudged the position is one of senior management. The position is at the third level of ...(reads)... chief executive of the Institute.

PN22

Sorry, that will probably read better in the transcript, when I said it I had the emphasis in the wrong place. But essentially Mr Rowlands reported to somebody who reported directly to the chief executive and he had a very senior position to fulfil. Now, in his submissions before the Commissioner at first instance my learned friend raised two particular matters which it is not clear from the decision as to whether they were in fact taken into account by Commissioner Holmes or not.

PN23

He raised the issue of - and referred to the case and I don't have spare copies of that one. It is probably on the file, but the case of Heywood v Mitsui O.S.K. Lines. My learned friend has copies. That was a decision of the Industrial Relations Court of Australia by Judicial Registrar Linkenbach, that court at the time having had the jurisdiction for the determination of unfair dismissals pursuant to the Industrial Relations Act 1988. Now, the provisions of the Act were slightly different but the net effect was that the test that had to be satisfied was very similar to that which is in the present Act under section 170CB.

PN24

Now, in that decision Judicial Registrar Linkenbach found effectively that an over award payment did not exclude somebody from the provisions of the then Industrial Relations Act. Now, I think that is a bit like motherhood and apple pie and cream. It is fairly obvious that an over award payment couldn't exclude somebody because by the very definition to be an over award payment there must be an award applying to one of the basic conditions to the wages themselves.

PN25

Now, in this instance, for reasons which I will come to in a moment, the appellant says that there is no award applying and that the salary being paid does not in any form take the characteristics of an over award payment. It is clear a salary pursuant to a common law contract of employment that is not in any way subject to the terms of an award. Judicial Registrar Linkenbach then went on in terms which were adopted by my learned friend and referred to in paragraph 20 of Commissioner Holmes decision to deal with the meaning of administrative and executive and he referred in particular to the decision of the then Kelly CJ in the Wool Selling Brokers Officers Association of Australia v the Employers Association of Wool Selling Brokers and Others which was determined (194) [1950] CthArbRp 316; 67 CAR 224. Now, Sir Raymond Kelly held that:

PN26

Administrative is universally acknowledged to mean simply and exhaustively of all pertaining to administration ...(reads)... institution or establishment.

PN27

Now, with the greatest respect to his Honour, it is my submission that this Bench need not in any way feel constrained to adopt a definition that was determined some 53 years ago at a time when it was easy to pick managers from the rest because managers had fountain pens and everybody else had a nib and inkwell. The simple fact is that those distinctions can't apply in the year 2002, probably haven't applied since - indeed one could suggest that Judicial Registrar Linkenbach was probably in error in the 1980s or in the 1990s making such a determination.

PN28

In this day and age the chief executive of BHP Billiton could with his laptop computer whilst flying between London and Melbourne perform functions which somebody might regard as administrative. He could type out a memo and have it printed when he got to the other end. But there is no suggestion that a person at that level would presumably fall under, well, I have never heard it suggested, under an award. Now, I refer the Commission to a decision of the Federal Court of Australia in the matter of Spalding v Cantarin Pty Ltd. This is a decision of the Full Court of the Federal Court made on 3 September 1999. The Bench was Wilcox, Marshall and Dowsett JJ.

PN29

Now, in fact this dealt not with the definitions that we are dealing with at all, as it was dealing with a claim by an employee for entitlement to particular award benefits and indeed quite a senior employee. Wilcox Marshall JJ found that the employee was indeed entitled to the benefits of the award notwithstanding her position. They each came to their conclusion for quite different reasons, Marshall J relying on an exercise in legal history and quoting some fairly well known cases I am sure to all of us, the De Havilland Aircraft Pty Ltd v Boyd and the Re Graphic Arts Award which were followed in some later cases in the '50s and '60s.

PN30

Of course in Marshall Js decision he relied on an award classification all others not provided for, which had been done in those previous cases, and in Wilcox Js decision he looked at different aspects of the somewhat more modified award but still found that there were classifications which applied to the employee concerned. Now, the reason I am raising that, your Honour, you are looking puzzled there, is not to assist my learned friend in his case but to draw the Commission's attention to the dissenting judgment of Dowsett J.

PN31

In my submission the learned judge has, perhaps daringly, but hit the nail on the head as to the way these sorts of vague awards should be interpreted. In my submission also the appellant's case in this matter is somewhat stronger for reasons which I will come to in the award itself. But the approach here is the judge at paragraph 64, and I apologise the pages here aren't numbered. It is five pages from the back. In that case the judge considers the meaning of the word employed and employee and at paragraph 64 the following is said:

PN32

The word employed might well encompass the appellant's relationship with the respondent but there is a more ...(reads)... or non manual work.

PN33

The next paragraph is the one that I wish to more strongly refer to:

PN34

He has frequently during industrial disputes of the stance taken by "management" which appears generally ...(reads)... respondent submits that the word is used in that narrow context in the presence sense.

PN35

Now, I raise that not because I necessarily with the judges views about whether all salaried people are management but that the issue that is before the Commission today is one where there is a need to distinguish in the common sense approach to industrial relations between people who are very senior and management and people who are award covered employees.

PN36

Now, in that case Dowsett J had to contend with an award which did indeed have particular classifications. In this instance the award which is, I presume from the Commission's file, has no classifications at all - sorry, I correct that. It has classifications but it has no definitions. Clause 16 is the relevant clause. The only assistance the award gives as to how people might be classified is in clause 14.1 where it says:

PN37

A member of the professional, administrative, clerical computing and technical staff of a institute of ...(reads)... or position in the table.

PN38

And 14.2 goes on to say:

PN39

A member of the professional, administrative, clerical, computing and technical staff of a institute of ..(reads)... will not be paid in accordance with this award.

[10.40am]

PN40

Now, that document referred to in clause 14.2 was not available to the Commission at first instance and I now have copies of it. I appreciate there is a possible objection to admissibility. It doesn't do much I might say. It in fact refers off to another process for classification and it simply is a classic, dare I say it, 1988 4 per cent second tier document which has lots of lines drawn between classifications to decide where people from an old structure went into a new structure. It doesn't help us, as I see it, as to how you define what a classification's duties might be.

PN41

Subject to my learned friend's - obviously subject to the Bench and any objection of my learned friend I can tender it. It certainly gave me nightmares remembering those glorious days with the 4 per cent. It may give those of you who were directly involved in it yourselves the same pleasant feeling if it is tendered.

PN42

MR MILLAR: My learned friend was good enough to provide me with a copy of the document before we started this morning. I share my learned friend's observation that it appears to be of limited assistance in any event but I would maintain an objection that this material was not before the Commissioner at first instance. There was no basis on which the Commissioner could decide on the material before him that the applicant was excluded from the operation of the award pursuant to the provisions of this document. In my submission it was not before the Commissioner at first instance and would be improper to be considered on appeal.

PN43

SENIOR DEPUTY PRESIDENT ACTON: We will allow its tender, Mr Shaw.

EXHIBIT #A1 CIRCULAR NUMBER 35 OF 88 PACCT SECOND TIER AGREEMENT IMPLEMENTATION ARRANGEMENTS

PN44

MR SHAW: Thank you, your Honour. As I said, the document represents the so called second tier agreement, as they were known at the time, between the parties referred to in clause 14.2 of the award. It sets out a process for the broadbanding of the award, particularly at schedule B - appendix B, I am sorry. It does in the covering letter refer to - I apologise for that. Yes, sorry. On the second page in point number 1 it refers to the then PACCT Staff Conciliation and Arbitration Board Award which would have been an award of the State, Victorian Industrial Relations Commission and I am afraid my research hasn't enabled me to get a copy of that. The public library didn't seem to have it, somebody must have stolen it, the State Library of Victoria, and I didn't check the Commission's library here.

PN45

But simply suffice it to say that this is a document which the current award relies upon and refers to in clause 14.2. It certainly doesn't provide any greater enlightenment as to what particular classifications of employees should do or should be required to do. Presumably that was a process which - I shouldn't presumably. I don't know so I won't say any more. It simply doesn't add to it.

PN46

SENIOR DEPUTY PRESIDENT LACY: Can I just clarify, in relation to clause 14.2 you rely on that as an exclusion clause, is that right?

PN47

MR SHAW: Well, to an extent, your Honour. There is a bit more to be said yet. But it certainly says clearly will not be paid in accordance with this award.

PN48

SENIOR DEPUTY PRESIDENT LACY: But that is a pretty limited exclusion, isn't it?

PN49

MR SHAW: It is a limited exclusion but the - in fact if I move on now. The Commissioner in his decision in fact relied on some provisions of the award to provide - or to determine, to assist him determine that the contract was in some way contemplated by the award and therefore was covered by the award. Now, he refers in particular to clause 12.5.2 of the award which provides that:

PN50

A contract employee employed full time will be entitled to all of the provisions of this award.

PN51

SENIOR DEPUTY PRESIDENT LACY: Well, clause 12.5.1 as well, by implication limits the right of the employer to employ people on contracts, doesn't it, or in some way grants the employer a right to employ people on contracts because the clause which says the parties bound simply says the award will be binding on the respondents listed in schedule A of this award? Now, the respondent in this case is one of the respondents listed in the schedule A and it seems that the award covers all of the aspects of employment relationships that the employer might be able to enter into.

PN52

MR SHAW: Well, it would certainly, your Honour, prevent an employer from offering contracts at rates and under conditions that were less favourable than the award. It would clearly do that and there are obvious industrial reasons now and at the time when contract employees were all the rage that presumably led to that to be put in the award. But in my submission the Commissioner at first instance didn't properly construe, and possibly partly a fault of the advocates in front of him didn't properly put it before him, but didn't properly look at clause 12.5 that deals with contract employee.

PN53

It is quite clear from reading 12.5 in its entirety that it is referring to contract employees who are performing jobs the same as the classifications of persons within the award because clause 12.5.4 requires that a contract employee of engagement is given certain advice and that is, the date on which the employment is to commence, the date of which the employment is to terminate, the classification of the employee, the wage rate of the employee, the terms and conditions of employment applicable to the employee.

PN54

Now, in my submission nothing could be more clear than the fact that this award envisages that - or it limits its protections to persons who would otherwise be performing work which is already covered by the award but would be award covered employees as opposed to contract employees. Now, an examination of Mr Rowlands contract shows that it complies with those requirements except for obvious reasons it doesn't include a classification, simply because he was not ever likely - wasn't regarded as was never likely to be regarded as an award employee, an award covered employee. In my submission that is a fundamental point as regards whether Mr Rowlands is a Federal Award employee or not.

PN55

COMMISSIONER LEWIN: Whether he was regarded by the contract.

PN56

MR SHAW: Yes, but to quote the famous submission of Michael Black, as he then was, you can't create something that has all the characteristics of a rooster and call it a duck and expect everybody to regard it as a duck. I mean clearly the parties entered into a common law contract of employment which provided conditions well in excess of those required by the award. It was not anything to do with any classification in the award. It was for duties that are set out in the CAP, the competency and proficiencies documents, and it did not in any way, in my submission, resemble anything that could be construed as being covered by an award.

PN57

It covers the field. It declares itself to cover the field. The exclusive arrangements between the parties, signed off by both of them, and yet at this stage the applicant says that he is an award employee and for reasons which I say are flawed the Commissioner found that he was as well.

PN58

SENIOR DEPUTY PRESIDENT LACY: But the fact that the agreement purports to cover the field, or even if it does cover the field, it would not take the employment outside the award if the award otherwise applied, would it?

PN59

COMMISSIONER LEWIN: No, that is true.

PN60

SENIOR DEPUTY PRESIDENT LACY: So to start with a contract is really to start the role in a process. You should start in the award and determine whether or not it covers that person - - -

PN61

MR SHAW: Well, the award in my submission doesn't - we don't know. But there are certainly no all others classification. There is A10, it has got a range within it. There is nothing in this award to suggest that it fits within the sorts of principles that courts and the Commission have used in the past to determine that a person is award covered.

PN62

SENIOR DEPUTY PRESIDENT LACY: But the parties bound clause, for example, doesn't have that restriction on it. It doesn't say that it binds the respondent in respect of the classifications set out in the award and the only apparent exclusion is that clause 15.2 which - or 14.2 which says that the award won't apply - sorry. Where the classification is something above the level for officer 10 then it won't be paid in accordance with this award.

PN63

MR SHAW: Yes.

PN64

SENIOR DEPUTY PRESIDENT LACY: There is no other limitation in the award itself, is there?

PN65

MR SHAW: Well, there is a limitation in the sense that the award itself refers to a contract employee employed full time will be entitled to all of the provisions of this award. It then goes on to define a contract employee, which is in the definition. It then goes on in clause 12.5 to set out in greater detail what qualifies as a contract. Now, in my submission there is clearly an implied exclusion in reading all those things together.

PN66

SENIOR DEPUTY PRESIDENT LACY: Wilcox J in the case that you referred to earlier says, doesn't he, that if an award is to exclude any particular classes then it should be very clear in the award itself?

PN67

MR SHAW: Well, that may be say provided a person could be covered by it in any event. Now, what your Honour is presumably saying is that the applicant fits into the definition of 3.2, the National Tertiary Education Industry Union, its members and persons eligible to be members of this union, which indeed is very board and I am not sure any particular evidence was led in the matter below as to eligibility rules of that union in any event.

PN68

SENIOR DEPUTY PRESIDENT LACY: But his entitlement to be a member of that union wasn't challenged, was it?

PN69

MR SHAW: No, it wasn't. But in my submission the position must be read in the light of the practicalities of the situation that the - - -

PN70

COMMISSIONER LEWIN: It is a legal question, isn't it, that we are faced with?

PN71

MR SHAW: It is a legal question but if one is to look at the law and the areas that I have covered, particularly in the issue of administrative and particularly in the question of the issue of status of the contract employee, then that also needs to be considered too in determining the issue.

PN72

COMMISSIONER LEWIN: It is the nature of the instrument is also relevant too, isn't it? The award.

PN73

MR SHAW: Well, the nature of the award but then equally the nature of the contract is relevant as well.

PN74

COMMISSIONER LEWIN: Yes, but isn't the award a statutory instrument that conditions the making of contracts?

PN75

MR SHAW: I don't believe so. I can't see any basis on which that could be said.

PN76

COMMISSIONER LEWIN: Well, in the sense that it simply provides that terms inconsistent with the statutory force of the award are not legally enforceable.

PN77

MR SHAW: Yes, it does. It does but then I mean that is in my submission of absolutely no relevance whatsoever in that - - -

PN78

COMMISSIONER LEWIN: Well, doesn't it go to the question of the scope of the award, which is the issue that you are raising? You are saying that Mr Rowlands was an employee whose employment didn't fall within the scope of the award.

PN79

MR SHAW: Yes, I am saying that in regards section 170CB. Yes, I am.

PN80

COMMISSIONER LEWIN: If that is right the terms of any contract between him and the employer are irrelevant.

PN81

MR SHAW: Well, except it does - - -

PN82

COMMISSIONER LEWIN: For the purpose of whether or not he was an award employee.

PN83

MR SHAW: Well, the Act requires that any of his conditions of employment need to be governed by an award. Now, in my submission none of his employment conditions are governed by an award.

PN84

COMMISSIONER LEWIN: Yes. Well, I think you are agreeing with me, with respect, that if the scope of the award does not apply to the employment then the contractual relationships between the parties are irrelevant.

PN85

MR SHAW: Well, that is correct.

PN86

COMMISSIONER LEWIN: So this award was presumably made on the basis of a finding of dispute and it was an award designed to condition the employment of certain persons. You say Mr Rowlands is not one of those. Isn't that where we really will find the answer to the question as to whether or not the scope of the award is wide enough to cover the employment?

PN87

MR SHAW: Well, yes, but - - -

PN88

COMMISSIONER LEWIN: Or at least the beginning of the answer.

PN89

MR SHAW: Well, it is the beginning of the question I think in the sense that the question raised is whether - I mean clearly if - well, not clearly. It would appear, certainly from looking at clause 3 of the award, that if Mr Rowlands did not have a contract, that if he didn't have an award, if that contract was silent on many issues, then the award would presumably be the minimum which the employer could deal with him, assuming he was eligible and as Senior Deputy President Lacy has pointed out, the issue of his eligibility wasn't the subject of debate before Commissioner Holmes, so let us assume that he is eligible to belong, then in those situations clearly some of his conditions of employment are enough to meet the word any in any event, would be governed by an award. But in my submission one has to look at the contract and indeed Commissioner Holmes did.

PN90

He looked at it and said it fits within the award because of these particular provisions of the award. What I am saying is it doesn't because of other provisions of the award.

PN91

SENIOR DEPUTY PRESIDENT ACTON: Are you saying that but for the contract at least some of his terms and conditions of employment would be covered by the award?

PN92

MR SHAW: Well it is obviously not an issue I have addressed in that sense in the thinking but it is certainly on the face of it looking at clause 3 and in particular 3.2 of the award and assuming that he is eligible to belong or that he fits into the category, then I think it goes without saying, that yes, that would be the minimum condition that could be applied.

PN93

SENIOR DEPUTY PRESIDENT LACY: Well, just take annual leave. Under his contract of employment he is entitled to 20 working days accrued on a daily basis. If the award was varied so as to impose on an employer an obligation to provide six weeks annual leave to its employees what would be the situation in respect of Mr Rowlands?

PN94

MR SHAW: Well, that comes down to a whole lot of matters that probably aren't really easy to address today, but it may be, depending on the totality of the contract, that he is entitled to that or not entitled to it.

PN95

SENIOR DEPUTY PRESIDENT LACY: He is entitled to what, sorry?

PN96

MR SHAW: It may be depending on the totality of the conditions in the contract that he is required to be given six weeks annual leave or that he isn't. I mean I - - -

PN97

SENIOR DEPUTY PRESIDENT LACY: Well, the employer can't contract out of the award. If the employer is bound by the award to allow its employees six weeks annual leave then he surely must be entitled to the additional two weeks as well.

PN98

MR SHAW: Well, on the basis on which you put it I presume that is correct. That is not a thing that I have really put my mind to, your Honour. If I might proceed.

PN99

SENIOR DEPUTY PRESIDENT LACY: Yes.

PN100

MR SHAW: There is however another issue here which in my submission is particularly relevant to this matter and I refer the Commission to the decision of Commissioner Deegan in Welsh v Tasman Asia Pacific Pty Ltd, small print thanks to my computer on the left there. I almost couldn't read it myself. Unfortunately this is also before Auscript were numbering paragraphs or whoever started numbering them did that, but at page 4 of 7 on my print. The Commissioner makes the point halfway down the page, just above the quote from Desmani:

PN101

I do not accept that if the applicant satisfies the definition of Federal Award employee in section 170CD he must be taken to have been employed under award conditions.

PN102

It then goes on to quote the passage from Desmani that I referred to in my opening. Now, in my submission this is an important point and Commissioner Holmes at paragraph 24 has taken the opposite view. He says:

PN103

If Mr Rowlands position falls within the scope of either the PACCT Award or the PACCT Agreement then it would mean ...(reads)... the Commission's jurisdiction.

PN104

Now, he does in his final paragraph make a finding that because the contract of employment is consistent with 5.1.5 of the award that Mr Rowlands situation does not fall within the scope of section 170CC(3). Now, his reasoning is not really explained in the decision, as I read it, for coming to that conclusion but it is partly because of that conclusion that I have, perhaps to my own peril in the wrong part of my submissions, on the content of the contract and the references between the award and the contract.

PN105

Now, section 170CC(3) applies a much more stringent test than section 170CB and section 170CD in definitions sets out again a more all encompassing definition of what is required to be classified as being employed under award conditions and it says:

PN106

For the purpose of this division an employee is taken to be employed under award conditions if both wages and ...(reads)... bind the employer of the employee.

PN107

Now, the definition, section 170CD(3), employed under award conditions, of course arises from the section 170CC(2) which empowers regulations to be made that might exclude employees if subsections (3) or (4) of section 170CC apply. This creates a bit of a dilemma in these proceedings because on the one hand it is entirely arguable that the stronger definition that arises from section 170CC(2) only need be applied or be looked at if the person falls within section 170CC(3).

PN108

Now, as Desmani pointed out, the Parliament used quite different language in determining whether a person called be a Federal Award employee, which at the time this Act of course was drafted by its committee in 1996 was done to get people into or out of the Federal system and of course by the time it was proclaimed the Victorian system had been abolished and we didn't really need to worry too much about section 170CB here in Victoria in any event. But we do need to concern ourselves with section 170CC(2) and (3).

PN109

I suppose an issue that arises is whether the tougher definition is only agitated after it has been determined that a person is otherwise above the, for want of a better term, the salary cap. Now, if that is the case then Commissioner Holmes original decision is fundamentally flawed because he has made no determination in respect of that salary issue even though it was raised before him and has simply found that Mr Rowlands is a Federal Award employee. He has applied a section which is but for the salary cap irrelevant here in Victoria, yet not dealt at all with the issue that is raised by section 170CC(2) and (3), other than to say section 170CC(3) needn't apply because of the contract that Mr Rowlands is a Federal Award employee.

PN110

COMMISSIONER LEWIN: Well, do you have a point in relation to this distinction which goes to the question of the decision of the Commissioner that it seems to me anyway and correct me if I am wrong, is to the effect that there are two categories, a Federal Award employee is one of them and Mr Rowlands is a Federal Award employee and that is the end of the matter?

PN111

MR SHAW: Well, it is not the end of the matter if your salary exceeds that allowed by the regulations that are made pursuant to section - I am sorry, wasn't I clear? My apologies, Commissioner.

PN112

COMMISSIONER LEWIN: Well, I just wanted to be clear.

PN113

MR SHAW: Yes.

PN114

COMMISSIONER LEWIN: I thought that might have been what you are suggesting but - - -

PN115

MR SHAW: Well, that is the point I am making there and what I am simply saying is I am not sure actually which triggers what. Does the allegation by an employer immediately mean that the test is required in 170CC(2) is the one applied or does there have to be a determination of the Commission first, or perhaps agreement between the parties of course that a person is otherwise above the salary cap? I don't know the answer to that and I haven't been able to find any decision that has dealt with it.

PN116

COMMISSIONER LEWIN: If there are two categories, as Desmani suggests, how can it be that a person that falls into one is affected by the definitive characteristics of the other?

PN117

MR SHAW: Well, in a sense Desmani is in my submission irrelevant to the State of Victoria. You don't have to be a Federal Award employee to be entitled to the jurisdiction of this Commission. You have to not be on probation, not be casual in certain circumstances and not be earning a salary in excess of a certain amount, but you don't have to be a Federal Award employee.

[11.12am]

PN118

COMMISSIONER LEWIN: Leaving that aside, if Mr Rowlands was properly characterised as a Federal Award employee that is the end of the matter, is it not?

PN119

MR SHAW: If he is properly?

PN120

COMMISSIONER LEWIN: Yes.

PN121

MR SHAW: No, I don't believe so, not if his salary is in excess of the amount specified.

PN122

COMMISSIONER LEWIN: So the reason I - - -

PN123

MR SHAW: Because if your salary is in excess of that then the employed under award conditions situation applies.

PN124

COMMISSIONER LEWIN: But isn't that a different category to a Federal Award employee?

PN125

MR SHAW: It is a different test. It is not a different category though. It would be the category into which he fell - sorry, to answer your question, yes, it is a different category but it would be the category into which he fell.

PN126

COMMISSIONER LEWIN: I hear what you say.

PN127

MR SHAW: And that requires both wages and conditions of employment. Not any conditions of employment but both wages and conditions of employment to be governed.

PN128

COMMISSIONER LEWIN: Is it possible that a Federal Award employee is a type of employee and an employee employed under award conditions is another type of employee?

PN129

MR SHAW: Well, it is possible to the extent that as, for example, in the Welsh case that I have just handed up, Commissioner Deegan was faced with a situation - although it was a Territory problem, wasn't in the same situation, but you have the situation where a person is in all States other than Victoria needs to be a Federal employee just to get in the door, then the other tests may or may not apply. So you can be earning 30,000 a year in New South Wales but if you are not a Federal Award employee you can't come to this place for relief in respect of unfair dismissal.

PN130

In Victoria you have an unfettered right to come to this Commission subject to the exemptions and one of the exemptions is section 170CC(2), which imposes a different test. I accept that. Now, without repeating all of my earlier submissions, applying that test, that stronger test, I say for the reasons that I have already put, that Mr Rowlands clearly did not fit into a category - or the category as defined of employed under award conditions which requires both wages and conditions of employment to be determined.

PN131

Now, without reading too much into the Parliament's intentions, it seems fairly clear to me that what the definition in section 170CD(3) requires is that a person's actual wages and conditions are those that are governed by the award and that sure, you can earn 150,000 a year and come to this place for relief provided that 150,000 is in the award.

PN132

SENIOR DEPUTY PRESIDENT LACY: Wasn't that argument rejected in Stephenson's case?

PN133

MR SHAW: I am sorry, I didn't hear you, your Honour?

PN134

SENIOR DEPUTY PRESIDENT LACY: Wasn't that argument rejected in Stephenson's case?

PN135

MR SHAW: Stephenson's case in my view had a distinction - or in my submission - - -

PN136

SENIOR DEPUTY PRESIDENT LACY: Yes, but wasn't that argument put and rejected in Stephenson's case in any event?

PN137

MR SHAW: Well, it was rejected based on the peculiar circumstances of Stephenson's case. I mean it - and indeed if I might refer your Honours to a decision of Commissioner Holmes in fact in Farmer v Australian and New Zealand Banking Group Limited, on page 13 of 14, particularly at paragraph 55, the Commissioner in my submission on that occasion correctly was able to distinguish Stephenson's case from the particular case that he was dealing with in respect to Mr Farmer and it is obvious that it is also my submission that Mr Rowlands case is similar to that of Mr Farmer's because we are dealing with awards that don't have classifications here whereas in Stephenson's case there was and in the Mornington Racing Club case there were different circumstances.

PN138

COMMISSIONER LEWIN: I understand this submission essentially to be that the wages are not regulated.

PN139

MR SHAW: That is correct.

PN140

COMMISSIONER LEWIN: Or the salary.

PN141

MR SHAW: Well, yes. Yes.

PN142

COMMISSIONER LEWIN: Or a certified agreement.

PN143

MR SHAW: Well, a certified agreement doesn't provide any further assistance. It has just got slightly different rates in it but it doesn't add to - or detract from I suppose the submissions I am making. The only reason I haven't referred to the certified agreement because it is probably a waste of breath and everybody's time. It is there. It is an official document of the Commission but it doesn't make any alteration to the principles that I have annunciated.

PN144

So in summary, your Honours and Commissioner, if you are against me in respect of section 170CB(2) - or CB I should say, in one sense it makes little difference because on my own submission we don't need to even deal with that section here in Victoria. But for the reasons that I have been outlining, as I said, I won't repeat them, it is my view that the position - or my submission that the current situation clearly fails the test provided for employed under award conditions.

PN145

The one qualification there is there indeed was no determination in respect of what the actual salary was and there was argument about it at first instance and a reading of the transcript it becomes a little unclear as to what it may have been. So perhaps that might leave us in a situation where regardless of whether my primary argument is accepted or not the matter still has to refer back to a Commissioner for determination of that issue, which of course if my submission were accepted in total it may well have to be in any event, although that is a matter for the Bench to wrestle with, not for me. Unless there are any questions from your Honours and Commissioner I propose to say nothing more.

PN146

SENIOR DEPUTY PRESIDENT LACY: Which of the regulations do you rely on in support of propositions about section 170CC(2)?

PN147

MR SHAW: Well, 170CC(2) introduces the negative test, not employed under award conditions and to whom subsections (3) and (4) applies. Subsection (3) leads us directly to regulation 30BB.

PN148

SENIOR DEPUTY PRESIDENT LACY: Well, I have misunderstood your point. I thought you were putting that the class of employees covered by CC(2) are different the class of employees covered by CC(3).

PN149

MR SHAW: No, if I said that I apologise.

PN150

SENIOR DEPUTY PRESIDENT LACY: No, I might have misunderstood what you said.

PN151

MR SHAW: It was not my intention to - no, quite the contrary. CC(2) creates the class. CC(3) creates the power to make the regulation and of course CD(3) defines the class.

PN152

SENIOR DEPUTY PRESIDENT LACY: Yes. There was another question following on from that. In the case of Mr Rowlands his agreement on page 7, clause 16, provides for acceptance and formal acceptance is by way of returning a signed document to the institute's organisation development department and then it says:

PN153

Payment under this contract cannot proceed until formal acceptance is received.

PN154

Then if you go to the next page you see that it is signed by a representative of the council on 1 December 2000 and signed by Mr Rowlands on 12 December 2000. Is that the time from which you calculate his earnings for the purpose of section 170CC(3)?

PN155

MR SHAW: Well, certainly on the written documentation it would have to be the case. No evidence was led by either side below as to when his salary actually physically changed, whether it had been, you know, abided, that section 16.2 had been abided by or not.

PN156

SENIOR DEPUTY PRESIDENT LACY: Yes. I think the argument below was that you calculated it from 7 September 2000 for some reason, but that gave a total of 81,595 for the whole of that period up to the time of termination. But if you take it only from the date of the formal acceptance of that agreement then it comes to something about $10,000 less - more, sorry. It comes to $21,000 less.

PN157

MR SHAW: With respect, your Honour, I am not sure where that leads us in the light of regulation 30BC, but presumably if it is not calculated from a particular date then the pro rata calculation formula applies.

PN158

SENIOR DEPUTY PRESIDENT LACY: Well, prior to that contract he was employed on different terms, wasn't he?

PN159

MR SHAW: Yes.

PN160

SENIOR DEPUTY PRESIDENT LACY: And presumably prior to that contract he was employed under award conditions at some particular classification in the award?

PN161

MR SHAW: Look, I would have to say I can't be of assistance to the Commission in regards to that point at this stage.

PN162

SENIOR DEPUTY PRESIDENT LACY: It doesn't.

PN163

MR SHAW: He certainly was employed under other conditions but I can't assist the Commission.

PN164

COMMISSIONER LEWIN: I was just going to ask if it couldn't be said that clause 14.2 regulates the relevant wages or salary, whatever you like to use to describe it - it doesn't need to prescribe the salary. The regulation only requires that the award have a regulatory effect over the subject of an employee's wages or salary. There is a difference between prescribing an amount which will be paid and provisions which purport to be regulatory in nature. One of them can be that those salaries or wages can be a matter of private treaty between the parties.

PN165

MR SHAW: Commissioner, I don't believe that 14.2 can be construed in the same way as the clause was in Stephenson's case. Stephenson's case provided for a particular amount in which money would be in excess of would be paid and below it was clearly - or below that was clearly - or both sides of that amount were clearly regulated by the award.

PN166

COMMISSIONER LEWIN: Well, assuming the facts - - -

PN167

MR SHAW: This one seems to me to be much stronger - - -

PN168

COMMISSIONER LEWIN: Assuming the facts are distinguishable, as a general principle however insofar as the interpretation of the word regulates or regulated, the word regulated is to be interpreted in the - - -

PN169

MR SHAW: Well, that is a question of interpretation which ultimately becomes a subjective matter for - - -

PN170

COMMISSIONER LEWIN: But isn't it the essence of what you are putting to us?

PN171

MR SHAW: Yes, but in my submission - well, my submission is no, to answer your question. I believe the words will not be paid in accordance with this award are not very clear and mean exactly what they say.

PN172

COMMISSIONER LEWIN: Yes, that is right.

PN173

MR SHAW: And it doesn't - - -

PN174

COMMISSIONER LEWIN: What I am suggesting to you is - - -

PN175

MR SHAW: And doesn't mean and therefore there is no regulation of the rates.

PN176

COMMISSIONER LEWIN: So is it only where rates are actually prescribed by an award is there a regulatory effect?

PN177

MR SHAW: Or a formal over award payment could easily fit into that category.

PN178

COMMISSIONER LEWIN: All right.

PN179

MR SHAW: Thank you.

PN180

SENIOR DEPUTY PRESIDENT ACTON: Thank you, Mr Shaw. Mr Millar.

PN181

MR MILLAR: Your Honour, might it be convenient to have a short break of a couple of minutes now before I start?

PN182

SENIOR DEPUTY PRESIDENT ACTON: Yes, certainly.

SHORT ADJOURNMENT [11.28am]

RESUMED [11.36am]

PN183

SENIOR DEPUTY PRESIDENT ACTON: Mr Millar.

PN184

MR MILLAR: If the Commission pleases, I have an outline of submissions which I will hand up. The first ground of appeal taken by the appellant in this matter is that the Commissioner erred in his finding that the applicant, respondent by appeal, was a person who was employed under award conditions and there are, as I understand it, two parts of that analysis. The first is whether Mr Rowlands was a person covered by the terms of the relevant award and/or certified agreement and the second part is whether the operation of that award and certified agreement was such as to mean that he was employed under award conditions in the terms of the Act and regulations.

PN185

Now, the Commissioner seems to have followed two lines of reasoning in his decision in concluding that Mr Rowlands was covered by the PACCT Award and the relevant certified agreement. The first line of reasoning is that Mr Rowlands position was administrative in nature, that it was within the concept of a PACCT employee and the submissions on that point were fully set out by the Commissioner in his decision. The second line of reasons is quite apart from Mr Rowlands as a PACCT employee, quite separately the answer to that, Mr Rowlands was a contract employee within the terms of the award and the award was not limited to PACCT employees in that sense, upon Mr Rowlands being a employee of a respondent to the award and being a contract employee within the terms of the definition, then that was sufficient to ensure award coverage.

PN186

Now, both lines of reasoning in my submission seem to have been adopted by the Commissioner in his decision. The Commissioner seems to have concluded that Mr Rowlands was a PACCT employee as in paragraph 33 he has referred to the - paragraph 33 of the Commissioner's decision he has referred to Mr Rowlands employment being underpinned by the PACCT Award and also the PACCT Agreement. He seems to have related his reasoning upon a finding that Mr Rowlands was a PACCT employee.

PN187

He has also relied upon the finding that Mr Rowlands was a contract employee. Indeed in paragraph 33 again the Commissioner has referred to clause 5.1.5 of the award dealing with contract employees. Now, on either limb of reasoning there, whether it is the PACCT employee reasoning or whether it is the contract employee reasoning, in my submission there is no reason to doubt that the Commissioner was correct in the view that he took. The views that he reached were reasonably open to him on the evidence before him which he was in the best position to assess and there is no reason to believe that he was in error. There is no reason for the Full Bench to intrude upon the Commissioner's decision at first instance.

PN188

The primary submission of the respondent is that he is covered by the terms of both the relevant award and the relevant certified agreement. The relevant award as the Commissioner concluded is expressed to apply to employees generally of respondents and the specific coverage of Mr Rowlands circumstances within the concept of a contract employee seems to put the matter beyond doubt. But in addition to that we say it is also within the concept of a PACCT employee as covered by that award.

PN189

My learned friend submits that the existence of an over award component in the award somehow strips the award - I will take that back - the existence of an over award component in the terms on which an employee is engaged strips the award of its regulatory effect. My friend submitted that an employee earning 150,000 would be only within the jurisdiction of the Commission if that amount is specified in the award. Well, it is my submission that that approach overlooks the minimum rates system that an employer and employee may well agree to a higher rate above that specified in the award but the award still underpins that contract of employment.

PN190

The award still regulates the relationship between employer and employee because the employer is unable to pay less than the amount specified in the award. This issue of whether the contract can effectively take the employee outside of award coverage is one which has been dealt with on a number of occasions and it seems abundantly clear from the starting proposition that parties can't contract out of award coverage, that an agreement to pay a rate higher than that specified in the award can't take the employee outside of the scope of being bound by award terms.

PN191

Now, an argument along similar lines was considered in Mornington Racing Club v Bell Chambers which I will hand up to the Commission. At paragraph 39 on page 9 of this print the Full Bench considers this question, the issue of whether the award may effectively be displaced by agreement between the parties and the Full Bench effectively dismisses the argument that the terms of the agreement between the parties left the arrangement outside of award regulation. After considering the decision in Amalgamated Collieries of Western Australia v True and the remarks and Latham CJ at paragraph 40 the Full Bench says:

PN192

While an employer party bound by an award may agree with an employee to terms and conditions of employment ...(reads)... at the time of the termination of his employment.

PN193

That reasoning seems to be on all fours with the present case before the Commission. It is of no significance that the parties had a contract of employment executed as between them that covered many aspects of the employment relationship. That can in no way derogate from the regulatory impact upon the award which remained binding upon the parties by the operation of law.

PN194

Now, in my submission I don't believe I don't need to dwell on the point. Mr Rowlands position was an administrative position within the scope of the provisions of the PACCT Award. That matter was dealt with in the submissions before the Commissioner at first instance and the Commissioner has recounted those submissions in his decision, suffice to say many of the earlier decisions on the question of whether an employee was a clerical employee revolve around two issues which aren't before the Commission in this matter. One issue is the eligibility rules of essentially the various clerical unions, the ASU and its predecessors. That is not an issue here today but many of the cases on the concept of what is a clerical employee are tied up with eligibility rules of unions.

PN195

Secondly, many of the cases are tied up with the distinction between managerial and clerical employees. Again a distinction that does not need to play any part in the reasoning for the Commission today. There is no reason in principle or practice why the PACCT Award cannot apply to employees who hold a position which is nominally or in my submission even actually of a managerial nature and a careful examination of the terms of the relevant award lends support to that proposition, that it is anticipated that the concept of PACCT employees, Professional, Administrative, Clerical, Computing and Technical staff, will extend well up the ladder within the organisation because if you go to the clause that is relied upon by my learned friend, clause 14.2, the reference is to a member of the PACCT staff of an Institute of Technical and Further Education in performance duties at a level higher than administrative officer 10.

PN196

Now, that is quite clear acknowledgment in the terms of the award that there will be PACCT employees who are operating at a higher level within the organisation. It in now way supports a contention that the concept of PACCT employee is limited to more junior ranks or those who perform, shall we say, clerical duties or duties of a like status within the other classifications of professional and clerical and technical employees. PACCT employees can extend well up the organisation well beyond the level 10 classification which is the upper end of the wage regulation classifications under that system.

PN197

So the primary submission is the fact that Mr Rowlands had a nominally managerial role and had duties which went beyond those that are traditionally within the concept of a clerk in no way prevents him being a PACCT employee, particularly given the use of the word administrative which must add something to the term clerical which is also used in the PACCT concept and given the definition of the term administrative which was quoted by the Commissioner as meaning pertaining to management.

PN198

There is no reason whatsoever, as I say, in principle or in practice why Mr Rowlands employment could not be considered to be within the concept of PACCT employees. The Commissioner was in a sound position to evaluate the evidence before him and to make a finding on that issue and in my submission the Full Bench should not likely intrude upon that. But then the issues come to whether Mr Rowlands wages and conditions were regulated by award or certified agreement and that naturally leads to concentration upon the terms of clause 14.2 which provides for PACCT employees to be above level 10 to not be paid in accordance with the award.

PN199

There was nothing before the Commissioner at first instance and nothing before the Full Bench today which would justify a view that Mr Rowlands duties were such as to take him outside the terms of that award. The agreement that has been tendered today adds nothing to the analysis. There is no material on which it can be concluded either by the Commissioner before or by you today that Mr Rowlands is excluded under clause 14.2. The evidence to support that objection, to support this contention on the operation of the award simply was not there and is not there today.

PN200

But even if the view is taken that Mr Rowlands duties are above the level 10 classification then the award simply provides that he will not be paid in accordance with this award. Now, in my submission the reasoning in Stephenson's case is applicable on that ground and the employer was bound by the award terms in the requisite sense, but it did bind the employer as to the payment of wages, notwithstanding the fact that the engagement above a certain level effectively lifted the employee outside the scope of the wage regulation terms of the award.

[11.54am]

PN201

The reasoning in Stephenson's case in my submission is directly applicable here and the provision in clause 14.2 of the award still leaves Mr Rowlands employment bound by the terms of the award, regulated by the terms of the award as to both wages and conditions of employment. But taking the matter in my submission beyond all doubt is the added significance of the certified agreement. The Commissioner concluded in the final paragraph of his decision that Mr Rowlands employment was underpinned by both the PACCT Award and the PACCT Agreement and the PACCT Agreement which has a separate life, it is a certified agreement pursuant to the terms of division 2, certified under 170LJ, it is an agreement which operates quite independently from the award and that agreement applies to the employment of Mr Rowlands.

PN202

I will hand up a copy of the agreement. It may be on the Commission's file but I will hand up a further copy now. Now, I am not going to take the Commission to any particular provision of this agreement because it is not what is in here that matters, it is what is not in here. There is no exclusion from the terms of this agreement drafted in a similar fashion to clause 14.2 of the award. The agreement applies to PACCT employees of the appellant and there is no suggestion in here that once an employee reaches a certain level then the person is elevated beyond the regulatory impact of the terms of that agreement.

PN203

That agreement ensures that Mr Rowlands wages and conditions were regulated by the terms of a certified agreement and of course the present certified agreement regulating those terms is sufficient to ensure that the Commission has jurisdiction over the termination of employment. Now, that PACCT Agreement does refer to PACCT staff and the Commissioner in his decision considered the operation of the agreement but found no reason to limit the coverage of the agreement in such a way as to exclude Mr Rowlands.

PN204

The Commissioner considers the operation of the agreement in paragraph 31 of his decision and given the consideration there and the finding in paragraph 33 that Mr Rowlands employment was underpinned by the PACCT agreement, it seems in my submission to put it beyond doubt that Mr Rowlands employment was governed by the terms of the certified agreement as to both wages and terms of employment irrespective of the question of whether the award in the requisite sense governed his employment.

PN205

Now, I see no reason to get into a debate over the question of the Act versus the regulations, which concept of award conditions applies and whether there is any distinction between awards which regulate the terms and conditions and awards which bind the employer. For present purposes no matter which concept is applied in my submission the result is the same, that Mr Rowlands was within the jurisdiction of the Commission, that the exclusion was not attracted on the facts and the factual findings made by the Commissioner should be left intact.

PN206

SENIOR DEPUTY PRESIDENT ACTON: Sorry, Mr Millar, what clause is it in the agreement that you say regulates Mr Rowlands wages?

PN207

MR MILLAR: Well, clause 8 of the agreement, your Honour, refers to rates of pay and refers to the schedules which are attached which set out the various applicable rates of pay. Now, none of those rates admittedly extends to the level of the full package which Mr Rowlands was receiving, although his salary was in fact only at a level in the evidence before the Commission of 44,000 per annum, 44,692, and there were various non salary components of the remuneration package. But whether it is the actual salary rate that one looks for here, or the full remuneration package rate becomes in my submission unimportant because there is nothing in the certified agreement that prevents the employer paying above the employer's obligations under that certified agreement.

PN208

That is what happened here. In the event that Mr Rowlands classification under the certified agreement attracted a lesser rate of pay than that which he was receiving then there was the ability for the parties to add an over agreement component to what was being paid without in any way impacting upon the regulatory impact of this certified agreement.

PN209

SENIOR DEPUTY PRESIDENT LACY: Mr Millar, is there any evidence about whether or not the increases, in clause 8 were applied to Mr Rowlands salary?

PN210

MR MILLAR: I don't believe there was any evidence on that issue, your Honour, and it may be that such an increase would have been as a matter of analysis absorbed into whatever over agreement component was being provided for Mr Rowlands. But that in no way meant that he wasn't entitled as a matter of industrial law to receive at least the minimum amount specified in that agreement. And the added complicating factor of course is the fact that the annual rate of monetary compensation, the actual salary provided was 44,000, something over 44,000 per annum which is well within the scales that you see reflected in the certified agreement rates in the schedule at the back. It may - I am sorry, your Honour.

PN211

SENIOR DEPUTY PRESIDENT ACTON: Doesn't it just raise the question again of whether Mr Rowlands was an administrative officer 1 through to 10, because this seems to regulate the wages of, amongst others, administrative officers 1 through to 10?

PN212

MR MILLAR: Well, it regulates PACCT staff generally in my submission and unlike the award which excludes those above level 10 there is nothing in here which does this. So in my submission someone operating at a level beyond where the classification system runs out beyond level 10 would remain entitled as a minimum to the amount specified in the agreement. It may be that as between the parties a higher amount is agreed but that doesn't impact on the regulatory operation of this document.

PN213

SENIOR DEPUTY PRESIDENT ACTON: I see. So are you saying that if it is assumed for the purpose of this discussion that Mr Rowlands was an administrative officer then even if he was performing above the duties of a level 10 he couldn't get paid any less than a level 10 under this agreement?

PN214

MR MILLAR: Essentially that is right, that if his position was operating above the highest classification here then he would be entitled to be paid no less than that classification.

PN215

COMMISSIONER LEWIN: It may be a little more fundamental than that. There might be a question as to whether or not the certified agreement did apply to Mr Rowlands having regard to the definition of an employee in clause 5 of the agreement.

PN216

MR MILLAR: A person employed under this certified agreement.

PN217

COMMISSIONER LEWIN: This certified agreement, not unlike many others, often proceeds on apparently various assumptions, having defined an employee for the purposes of all of the terms of the agreement as a person who is employed under the agreement. It seems to me that the agreement doesn't specify how such employment actually arises how you determine whether a person is employed under the agreement or not.

PN218

MR MILLAR: Well, in my submission the relevant concept under this agreement is PACCT staff which is referred to throughout the agreement and as I have already addressed, the award contemplates that PACCT staff may well be - in fact it does more than contemplate it. It expressly acknowledges that there will be PACCT staff above level 10.

PN219

COMMISSIONER LEWIN: But with all due respect, isn't that PACCT staff employed under the agreement?

PN220

MR MILLAR: Well, in my submission the agreement can't be limited in that way that it applies to PACCT staff that it would apply to employees covered by the award in my submission. I mean there has been no material presented in this case on the eligibility rule of the union and the employees covered by the underpinning industrial dispute upon which this agreement was made, but in my submission there is nothing which would enable a conclusion that the employees above level 10 who are contemplated under the PACCT Award are excluded from the operation of this agreement.

PN221

COMMISSIONER LEWIN: Yes. Well, I mean you have to try and work out what that means when you read the terms of the agreement. I appreciate that on just identifying there is a bit of a gap there.

PN222

MR MILLAR: Yes. Well, I suppose in line with many other awards, Commissioner, with many awards that provide for coverage of employees generally and then the classifications don't quite fit particular employees, the fact that there might not be classifications covering an employee doesn't prevent that employee being covered and that is of course the issue that the Full Court of the Federal Court went to in Spalding.

PN223

COMMISSIONER LEWIN: Yes, I appreciate that. I would suggest however we are talking about a different issue. I am not going to whether or not Mr Rowlands was employed in a classification provided for in the agreement but whether or not he was an employee defined by the agreement for its purposes.

PN224

MR MILLAR: Well, in my submission employee, meaning a person employed under this certified agreement, does not evince an intention to limit the scope of the agreement to people who would otherwise be covered by the award in the employment of the appellant. I concede, Commissioner, the reasoning that you are speaking of but the concept of employee here seems to be in my submission drafted in as wide a fashion as possible rather than attempting to limit it. It becomes sequitur essentially. Employee means a person employed under this certified agreement. That is as far as the definition can be taken anyway. It can't purport to regulate the employment of those not covered by the certified agreement.

PN225

SENIOR DEPUTY PRESIDENT LACY: Well, the agreement operates by force of the legislation in any event, doesn't it?

PN226

MR MILLAR: Well, it does. It does, your Honour, and there was nothing put to the Commissioner at first instance which would limit the scope of the operation of the certified agreement here to exclude an employee such as Mr Rowlands even if it is accepted that there was material to support a conclusion that Mr Rowlands was above level 10, and as I have said, that is certainly not common ground. In my submission there was no material on which that conclusion could be based. But even if that view were reached, Mr Rowlands was still a PACCT employee and that seems to be acknowledged by the terms of the award.

PN227

COMMISSIONER LEWIN: I might just lead you back to, if you took the point that I am making, to its logical conclusion that given the existence of the contract that it was the award that was operating as the governing instrument in the sense that if what is being put about the existence of the contract is accepted to an extent that it is consistent with the award at least, that Mr Rowlands was employed under that contract which was governed by the award and not by the agreement. He wasn't employed under the certified agreement. He was employed under a contract which was explicitly provided for by the award.

PN228

MR MILLAR: Well, he was employed on a contract which is underpinned by or operated upon by the award and in my submission the certified agreement is in exactly the same position as the award in terms of its statutory effect.

PN229

SENIOR DEPUTY PRESIDENT ACTON: Unless you take the view that it ruled itself out in relation to persons who are not employed under the certified agreement but employed under contractual arrangements permitted by the award.

PN230

MR MILLAR: Well, in my submission the definition of employee is not expressed to be a limitation on the effect of the certified agreement. Far from it. It is expressed in the widest possible terms and if it were anticipated that only some of the category of PACCT staff were to be covered by this agreement one would expect that to be expressly stated in the agreement. If the starting point is that PACCT staff extend beyond level 10, and that seems in my submission to be unarguable given the terms of clause 14.2, if you take that as the starting point then if this PACCT Certified Agreement is to exclude some of the category of PACCT employees, some of those that are otherwise within the scope of that expression, one would expect that that restriction would be reflected in express terms in the agreement and not reliant upon a construction of the term employee, which in my submission with respect, can't support that restriction.

PN231

COMMISSIONER LEWIN: I understand your submission to be it should be read as meaning PACCT staff.

PN232

MR MILLAR: Well, indeed the reference to - all references to employee within the agreement refer to those employed under the certified agreement and there is nothing in certified agreement in my submission which evinces an intention to exclude some employees who would otherwise be within the scope of PACCT employees. Now, the decision of Judicial Registrar Linkenbach in Heywood Mitsui O.S.K. Lines was handed up earlier.

PN233

I won't go into that in any detail other than to observe that the Judicial Registrar in that case followed a construction of the term administrative which is particularly helpful in the present circumstances. It is a construction which I would support in this case, a construction which extends the concept of administrative in my submission beyond that of simply clerical employees. But the real focus of that decision is the finding that notwithstanding the significant over award component in that case of the employee's remuneration the employee's conditions of employment were regulated by the award.

PN234

That like reasoning again is on all fours with the present case. Whether it is the award or the certified agreement or both, Mr Rowlands employment was government by that document notwithstanding that his remuneration may on one construction have extended beyond the upper limited provided for under those documents. Now, as I mentioned in opening, that essentially relates to the first ground of appeal. There are however a number of grounds of appeal on which some of which little has been said today but I will deal with them very briefly.

PN235

The second ground of appeal is an alleged misdirection in wrongly applying a definition in the award. Perhaps is it worth obtaining guidance from my learned friend whether all of the grounds are maintained before I address them?

PN236

MR SHAW: Your Honour, I think my learned friend can rest assured that only the matters to which I have made submissions which essentially are the first one and then the last one I think are those that are being pursued and need to be addressed.

PN237

MR MILLAR: Thank you, that is very helpful. Paragraph 3 then of the notice of appeal touches upon the ground in paragraph 1 which is the award having no provisions relating to senior management governed the conditions of employment. Well, in my submission the absence of terms specifically dealing with senior management is no way a bar to that award covering the employment of senior executives. The award doesn't need to have separate provisions dealing with those employees. There are a wide range of aspects of the employment relationship which are governed by the award and which would be similarly relevant to junior employees as well as senior executives within the organisation. There is no need for specific provisions dealing with senior executives in order for the award to apply.

PN238

The remaining grounds are grounds 4 and 5. As I have submitted, the parties can't contract out of award coverage. That is clear from the Full Bench in Mornington Racing Club v Bell Chambers. The Commissioner however quite properly took into account the discussions between the parties as to the expectation of what level within the organisation Mr Rowlands would work at and that goes to ground 5 of the grounds of appeal. It was entirely proper for the Commissioner to rely upon the evidence as to those discussions in the manner he did if in fact that is construed as reliance.

PN239

It is my submission that the evidence before the Commissioner supported the view that Mr Rowlands terms and conditions and wages were regulated by award and/or certified agreement and for that reason Mr Rowlands was quite properly within the jurisdiction of the Commission and it is my submission that the appeal should be dismissed. If the Commission pleases.

PN240

SENIOR DEPUTY PRESIDENT ACTON: Mr Miller, I will mark your outline of submissions.

EXHIBIT #M1 OUTLINE OF SUBMISSIONS OF MR MILLAR

PN241

SENIOR DEPUTY PRESIDENT ACTON: Mr Shaw.

PN242

MR SHAW: There is nothing really to say in reply only that it is the appellant's case that Mr Rowlands was simply not a PACCT employee. I hope that came through clearly in my submissions. I have nothing further to add.

PN243

SENIOR DEPUTY PRESIDENT ACTON: Thank you, gentlemen. We will reserve our decision.

ADJOURNED INDEFINITELY [12.22pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #A1 CIRCULAR NUMBER 35 OF 88 PACCT SECOND TIER AGREEMENT IMPLEMENTATION ARRANGEMENTS PN44
EXHIBIT #M1 OUTLINE OF SUBMISSIONS OF MR MILLAR PN241