C0074/698, Transcript of Proceedings [2002] AIRCTrans 3076 (9 August 2002)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER CARGILL

C No 00746 of 1998

JOURNALISTS (FAIRFAX COMMUNITY
NEWSPAPERS NEW SOUTH WALES) AWARD 1996

Review under Item 51, Schedule 5,
Transitional WROLA Act 1996 re
conditions of employment

SYDNEY

10.28 AM, FRIDAY, 26 JULY 2002

PN1

THE COMMISSIONER: Can I have the appearances please because I'm not sure how long it is since this has actually formally been on the record so perhaps it might be best if we take appearances.

PN2

MR M. RYAN: If the Commission pleases, I appear for Entertainment and Arts Alliance.

PN3

MR J. TAMPLIN: If the Commission pleases, I appear for the Printing Industries Association of Australia and member company, Fairfax Community Newspaper Pty Limited and with me is MR P. ALLEN, Editor-in-Chief.

PN4

THE COMMISSIONER: Thank you, Mr Tamplin. The matters listed today for hearing of the outstanding issues that are between the parties so I think Mr Tamplin probably in view of the material you filed did you want to go first?

PN5

MR TAMPLIN: Thank you, Commissioner. We have had some brief discussions which we thank the Commission for facilitating. There are some, as a result of that, there are some areas of agreement and we've managed to narrow those areas of disagreement down to approximately three being the meal break in clause 16.8.2, the classification table and the rate for a part time employee at subclause 9.3.3 and we seek that that grade be grade 1, the MEAA, the union, seeks to have it maintained at grade 2C.

PN6

There are some points that we've agreed that Mr Ryan would put on the record for clarity for us as to the interpretation to be applied to the clauses and following the satisfaction of that issue then we can probably move on to the outstanding three matters. If the Commission, pleases.

PN7

THE COMMISSIONER: Thank you. Yes, Mr Ryan?

PN8

MR RYAN: Commissioner, as you're aware this matter has been on foot for some time and following the discussions I've redrafted the simplified award which has sought to address some of the points raised with Mr Tamplin earlier so maybe if I can tender a copy of that revised draft.

PN9

THE COMMISSIONER: Thank you, because I think we have several drafts from both sides here.

PN10

MR RYAN: Maybe it would be best to outline the changes, Commissioner, and also to give the explanations that should satisfy Mr Tamplin.

PN11

THE COMMISSIONER: Mr Ryan, just before you start. I don't I think I've actually ever marked anything in relation to this because I think it only has been on the record for a mention and since that it has all been conference. Would it be appropriate perhaps if I mark this as MEAA 1, it just means we then know, you know, when we're talking about a particular draft because otherwise the concern is, you know, I'll be talking about one draft and you'll be talking another and Mr Tamplin will be talking about yet another. So if I mark it MEAA 1.

EXHIBIT #MEAA1 REDRAFTED SIMPLIFIED AWARD

PN12

THE COMMISSIONER: Yes?

PN13

MR RYAN: If I could just take you to clause 5, parties bound, which was previously an issue before us as to wording. The wording has been altered to make it clear that the award is binding both upon the company and the Alliance and its members in respect of all employees whether they are members of the Alliance or perform duties described in the classification's award for the employer in the State of New South Wales. So the initial wording for the employer makes it clear that it is only for those employees in New South Wales working for FCN.

PN14

In relation to clause 8, Commissioner, the disputes settlement procedure, there was an issue between the parties and that's been resolved by the addition of clause 8.5 which is contained within the current award, namely, that while the procedure is being followed normal work is continuing and no party shall be prejudiced as to the final settlement by the continuation of normal work. In relation to 9.2, Commissioner, just to clarify the last two words agreed between the parties, the parties in that clause means between the employee or the employees and the company, not between the company and the Alliance as to length of engagement.

PN15

9.4, is a clarification, Commissioner. There are three ways a casual can be engaged, one for a minimum engagement of a half day which as defined the three and three quarter hours. Secondly, for the day, which is a day of seven and a half hours, and those two methods of engagement are the standard forms of engagement amongst all the Federal Journalism Awards. Some time ago we reached agreement with the company in relation to other forms of engagement which are contained in clause 9.4.1(c) which is engagement by the hour for an engagement in excess of four hours in two circumstances where an employee seeks such a casual employment or another occasion where the work is offered for a limited duration of up to three months on a special project.

PN16

Now, Commissioner, there is in relation to that if one needs look at clause 9.4.5 as to what happens and normally in journalism awards if you're engaged for a half day and the time that you actually work exceeds that you are then paid for the full day, seven and a half hours. In relation to somebody engaged for a full day they work tasks that they get into overtime payments. Now, that clause doesn't relate to those people who are engaged for say six hours as a casual they don't get paid for the full day if they go past it they just get paid for six hours and the overtime, so it is not as though they get a full day's pay if they exceed the engagement.

PN17

That reference to being paid for the full day only relates to those casuals who are engaged for half day and the time that work exceeds the three and three quarter hours so those ones who are engaged for something other than a half day or a full day don't pick up the 5.3.5 and that is the reason why the word subject to 9.4.1(c), at the start of that clause. In relation to some other changes to this draft the completion, Commissioner, just to say this matter has been on foot for some time and in clause 12.1 I have inserted the current rates of pay including the 2002 safety net in relation to the agreed classification structure and relativities to levels at C10 and the earlier drafts contained I think the 98 and 99 rates. My understanding is that at this point in time Mr Tamplin hasn't got instructions to consent to that but without putting words in his mouth I understand that may well not be a problem and he might just need some time to clarify that, Commissioner.

PN18

There were some minor alterations in relation to redundancy. In relation to redundancy there was a clause missing which makes it clear that it doesn't relate to people who were employed for less than the 12 months. In relation to 12.3.1 there is a reference there to an allowance of six percent, Commissioner, and until fairly recently there were two columns in a lot of journalism awards and one which was the non VDT rate of pay and the second was the VDT column which is six percent higher than the non-VDT rate.

PN19

With the use of digital cameras in most workplaces now like photographers who were last area who weren't using VDTs since every staff and man uses a VDT, the non-VDT rate is obsolete and has been done away with and the reference there is just to make it clear to people that those rates have been struck on the basis that is contained within the VDT allowance of six percent. So for the future when a safety net increase is granted it will go directly on to those existing rates whereas previously it was put on the non-VDT rate and a further six percent added to that non-VDT rate so a great saving to the company there over many years, Commissioner, at 60 cents per grade per safety net.

PN20

In relation to personal carers leave there were some matters which weren't contained in the earlier draft and I think the reason for that, Commissioner, was that the clause was cut and pasted from another journalists award which has a different sick leave regime where there was no accumulation of sick leave but the 20 days full, 20 days half, 20 days quarter were contained and with that there need to be some changes made and those changes have been made to reflect the existing entitlements, for example, in 21.3.2 on page 21 of the exhibit sets out the entitlement which is five days in the first year and thereafter eight days sick leave and any sick leave not taken may be accumulated up to a period of 12 years accumulation, Commissioner, that was missing and it has now been inserted.

PN21

21.3.3, picks up the existing award provision as to the right of the employer to require production of a medical certificate or other satisfactory evidence as to illness or incapacity, also a requirement that an employee wherever practical within 24 hours of commencement inform the employer of the inability to attend for work and also as far as practical state the nature of the illness or injury and the estimated duration of the absence, as I said, that was an existing provision. Similarly with 23.3.4 which talks about substituted leave being granted where a person is either hospitalised or unable if they were at work to attend for work to have that sick leave, annual leave recredited and taken as sick leave and 21.3.5 sets out the pre-requisites for that to happen, Commissioner, and again that's an existing entitlement under the award.

PN22

In relation to 17, which is the clause dealing with the rostering of work, by way of explanation, Commissioner, this clause is a standard clause in our awards. It arose out of a decision of a five-person Full Bench, an arbitration in 1988-1999 dealing with the hours of work, moving to a variety of methods by which the 38-hour week could be worked. Just to make it clear what the regime does with the rostering, Commissioner, as you can see in clause 17.2, the span of ordinary hours is between four and eleven to allow flexibility for the production side of the papers.

PN23

Clause 17.1 says that rosters must be posted 14 days in advance and the starting and finishing times as well as the length are to be included on that roster. Obviously when both the starting times and finishing times and the length of the shifts are determined by the employer as to when various employees commence work, the idea is because there is flexibility when people work on the days which people work, that 14 days is appropriate so that people can plan their lives around that in the knowledge that their starting times and their working days may vary but the days they work and the times they work are determined by the employer as long as 14 days notice is given and 17.3 obviously in the nature of news-gathering allows alterations to rosters in unforeseen circumstances with the proviso that the employer should give as much notice as possible.

PN24

Commissioner, they are the alterations to previous drafts which I think you have sighted, they also are the explanations of what they mean in reality should there be any confusion, though I doubt there would be. As Mr Tamplin has correctly pointed out, in relation to his submissions there are three issues between us. One is the minimum rate of pay applicable to a part-time employee, one goes to the nature of the meal break, its length and whether it is paid or unpaid time, and the third issues goes to proportions as to the numbers of employees who have to be in each of the grades.

PN25

We would say that on all three points in exhibit MEAA 1 the wording reflects the current award provisions in those matters, so I think the process that Mr Tamplin outlined earlier, that he should now seek to make his case for an alteration to existing entitlements should fall on him and I would respond, if the Commission pleases.

PN26

THE COMMISSIONER: Mr Ryan, could I just clarify, exhibit MEAA 1 you say reflects the current award provision in relation to each of those three matters.

PN27

MR RYAN: Yes.

PN28

THE COMMISSIONER: I take it that they are the provisions that the Alliance is seeking to have inserted in the award.

PN29

MR RYAN: Yes, maintained, Commissioner.

PN30

THE COMMISSIONER: The company is seeking the changes as outlined in Mr Tamplin's submissions and obviously you will go to that, Mr Tamplin.

PN31

MR RYAN: Yes, that's the situation, Commissioner.

PN32

THE COMMISSIONER: Thank you, I just thought I would check. Yes, Mr Tamplin.

PN33

MR TAMPLIN: Thank you, Commissioner. First as to the rates of pay for part-time employment, they are set out in our document which was filed with the Commission on the 19th. For ease and possibly for time consumption we would rely significantly on page 17, half way down, where it addresses that clause and that rate. Consequently we would seek to have that document marked.

PN34

THE COMMISSIONER: I will mark the whole document, will I, Mr Tamplin, but note that because of the areas of disagreement being narrowed some of these submissions you are not going to be seeking to rely on.

PN35

MR TAMPLIN: That's correct.

PN36

THE COMMISSIONER: I will mark that as FCN 1 and it's page 17, half way down, because I think that the actual clause starts off at page 11,

PN37

MR TAMPLIN: That's correct, yes, and all our submissions go to the current award, not what has been put forward by my colleague.

EXHIBIT #FCN1 DOCUMENT RE RATES OF PAY FOR PART TIME EMPLOYMENT

PN38

MR TAMPLIN: I should just make the point, too, Commissioner, there may well be Mr Allen's statement attached. That should not be part of that exhibit.

PN39

THE COMMISSIONER: No, I should mark that separately when he gives evidence. So it's that part of the document, I think there are 45 pages of your submissions, is that right, Mr Tamplin?

PN40

MR TAMPLIN: That's correct. In essence, Commissioner, we say that the capacity of the employee to elect to become a part-time employee and reach agreement at the enterprise as to that type of engagement should not be limited to a level of grade 2, the rate of pay should be subject to agreement at the enterprise as well. We say that is consistent with Item 51(6)a) and 51(7). We submit that in the outline we have put forward in the documentation for consideration by the Commission.

PN41

The other one which I will deal with quickly is the meal break, Commissioner, set out in page 39 in our submissions for variation. We say what occurs is that the employees take a shorter period than one hour and then get paid for the entire day, whereas the employer wants some facility to say, you will take a meal break, you will take it for 30 minutes and it will be unpaid or in the alternative you will take an unpaid one-hour meal break.

PN42

We wish to have the flexibility to be able to agree between the two but as it stands at the moment, we are locked into anything less unless the employee elects, but we say that is not an agreement and we say that doesn't coincide with 51(6)(a), it impacts on 51(6)(b). We submit that it should coincide with 51(7)(a) items and we rely upon what we have set out in those points.

PN43

Commissioner, we would now like to turn to the classification structure and its impact and I would like to call Mr Peter Allen to the stand, if I may.

<PETER ROBERT ALLEN, SWORN [10.48am]

<EXAMINATION BY MR TAMPLIN

PN44

MR TAMPLIN: Mr Allen, would you state your full name and work address for the record?---Peter Robert Allen, and my work address is Level 1, 33 Moore Street, Liverpool.

PN45

You have a document in front of you marked Statement of Peter Allen?---Yes, I do.

PN46

Is that your signature at the end of that document?---Yes, it is.

PN47

Dated 19 July 2002?---That's correct.

PN48

Is there anything in that document you wish to change or vary?---No, there is not.

PN49

We tender the document, Commissioner.

PN50

THE COMMISSIONER: I will mark that as FCN 2.

EXHIBIT #FCN 2 STATEMENT OF MR P. ALLEN

PN51

MR TAMPLIN: Mr Allen, you state in point 4 - you have that document there in front of you?---Yes, I do.

**** PETER ROBERT ALLEN XN MR TAMPLIN

PN52

You state in point 4 that you've held the position for a period of three years. What other experience in the editorial industry, journalism, have you had?---In summary, I've been a journalist for 45 years. I have had extremely wide experience in both metropolitan and regional and suburban newspapers. I started my career basically as a writer, worked for various organisations including Time Magazine, The Sydney Morning Herald. I was one of the senior writers on The Sydney Morning Herald for a number of years. I've also worked with the Brisbane Courier Mail. For about the last 20 years I've been involved in relatively senior management. I was editor of the Sun-Herald for six years. I left Fairfax two or three occasions during my career. In 1992, I left and became the chief editorial consultant for Australian Provincial Newspapers. There are 13 daily papers in Queensland and their various free papers. I was for a couple of years editor-in-chief of Eastern Suburbs Newspapers, currently group editor or editor-in-chief of Fairfax Community Newspapers. My career at senior level came to somewhat of a halt in the late 1980s when I had quite a series of serious heart attacks and made a quite conscious decision to get off the executive ladder at the most senior level.

PN53

One would say that's possibly a reasonable explanation?---Yes, it was, otherwise I probably wouldn't be here. That was in the late 1980s after the takeover at Fairfax when at that stage, I was actually on the board of Fairfax Community Newspapers and had just stood down as editor of the Sun-Herald.

PN54

Reasonably extensive experience. Is there something distinct about community newspapers that would lead you to make this statement?---Yes. There is certainly a substantial difference between the operation of suburban newspapers and other newspapers, both regional dailies and metropolitan dailies, in that the requirements of suburban newspapers are different, not necessarily less important because suburban newspapers are extremely important in the functions that they have in the community. But the operations are different in the sense that metropolitan newspapers are driven by page circulation among other things and very high advertising rates. Suburban newspapers, such as the ones that FCN operate, are free papers. Consequently, the basis of operation has to be different. The scales of revenues are different and also, in editorial terms, the types, the type of material that we run in suburban papers is obviously different to the major papers, both regional and daily. They are very much community focussed. Consequently the type of news that you see in the papers that we produce is what some journalists might call the parish pump variety, but that's their nature.

**** PETER ROBERT ALLEN XN MR TAMPLIN

PN55

Is there some form of a hierarchy, given your experience?---In what sense, Mr Tamplin?

PN56

Well, I can imagine somebody being a television presenter being well up within the status of a journalist. Well, I'm only passing my view. Is that correct? Is that fair, that there is some form of hierarchy through it? Is there a learning curve that people go on?---There's certainly a hierarchy within any organisation and FCN is no different. The hierarchy begins at the bottom with young people we employ as trainee cadet journalists and goes through, in the editorial sense, to myself. I'm the most senior editorial person and the same thing applies in all other parts of the company, both advertising and marketing. Yes, so certainly there's a hierarchy.

PN57

You refer in your statement as journalists passing through and moving on to higher rates of pay. Is that what you're referring to there?---Yes. Well, certainly there's a large and recognised difference between rates of pay in suburban newspapers and, say, metropolitan and regional dailies. That comes about basically because of the different skill levels that are required. Not all the way through, let me say, but in most levels of suburban newspapers, the skill levels are somewhat less because of the nature of the tasks. Clearly, if you're covering, if you're a reporter covering for The Sydney Morning Herald, the State Parliament, your skill level needs to be greater than if you're the senior reporter covering the Baulkham Hills Shire Council meeting.

PN58

If you feel like a drink of water, take one?---No, that's okay. I must apologise, Commissioner. Like half the world, I'm suffering from the flu at the moment.

PN59

THE COMMISSIONER: You've got the dreadful lurgy.

PN60

MR TAMPLIN: Can you explain to me how Fairfax Community Newspapers actually operates?---In the editorial area?

**** PETER ROBERT ALLEN XN MR TAMPLIN

PN61

Yes?---Well, very quickly, we have 10 papers which range from the St George Leader which is the largest suburban paper in Australia to the smaller papers such as the Camden Wollondilly Advertiser. Essentially, the staff on each of those papers varies obviously because of the size. The Leader has a much larger staff. It's in fact a bi-weekly whereas all of the others are weekly. Essentially, I suppose, on average the papers would have about three reporters, plus an editor.

PN62

On site?---On site, yes. The sub-editing of the papers is done centrally.

PN63

At Liverpool?---No, no. The sub-editing is basically done centrally at Liverpool. The other papers are produced on site in the various locations which range from Castle Hill in the north to Campbelltown in the south and those reporters work to the editors and the editors then report to me. The staff is - the reporters and the photographers work to the editor who assigns the various stories on a day-by-day basis. That's essentially how it works.

PN64

You refer in your statement to the effect of an enterprise agreement and automatic upgrading. How would that have an effect? Why go to that?---I'm sorry, Mr Tamplin? Could you just repeat that?

PN65

You refer in your statement to the effect of an enterprise agreement and automatic upgradings within that agreement, but that doesn't go to the clause that you are seeking to change?---No, no, it doesn't. The only reason for including that in there was to indicate that no longer can rapacious employees - if that's the word that you could use - use the classification system to hold journalists into various classifications. For example, when suburban papers themselves first started, just because of the very nature of them, because you had to run suburbans on a shoestring and in some ways still do, the employers tended to take into the craft of journalism people whom they underpaid and also kept on very low grades and quite rightly, the classification system was introduced to prevent companies or individual employers from keeping people at low grades. So on balance, there had to be a career progression path for journalists which is quite appropriate and that's where the classification system

**** PETER ROBERT ALLEN XN MR TAMPLIN

originated. However, I think that times have moved on whereby the classification system has been overtaken to some extent by other factors, including the now agreed sections within the FCN agreement that junior reporters and by that I mean reporters in grade 1 and grade 2, can no longer be kept in those grades longer than a period of two years. That in itself means that you can't have a grade 1 sit in grade 1 for three, four or five years which, not necessarily within FCN, but I know that in other companies it certainly did happen. So the only reason for referring to that is here on the one hand you have the automatic progression through the ranks in grades 1 and 2, which is the area of my main concern and it doesn't mean because of that provisions within the agreement, it doesn't mean that employees won't be treated fairly if there is a change in the classification. The main reason for, I believe, that it's necessary to have a look at the classification structure is that because there are quite distinct restrictions on the number of young people that we can now employ.

PN66

THE COMMISSIONER: Can I just ask, Mr Allen, which paragraph of your statement that' in or maybe Mr Tamplin can - - -?---Yes, certainly. Yes, it's paragraph 20. In that section of the statement I call it a catch 22 situation which I believe it is.

PN67

Thank you.

PN68

MR TAMPLIN: You then refer to putting grade 7 into the structure as well as increasing the proportion percentage at grades 1 and 2 and you have just dealt with some of those parts. Do you have any practical examples of the effect?---Yes, I do, Mr Tamplin. Let me just first of all say that in looking at the current gradings across our editorial - - -

PN69

Have you got a document there?---Yes, I do.

PN70

Have you got other copies of that document because it may help us?---Yes, I have. This is just a document that I put together last night. It might just help, help explain the situation.

**** PETER ROBERT ALLEN XN MR TAMPLIN

PN71

My document has percentages marked on it. Is that your original?---There are percentages on page 3, yes.

PN72

I have it on page 1 and page 2. Are these personal notes that you - - -?---No. Well, on page 1 and page 2 - - -

PN73

Do you want this back for those references, that's what - - - ?---Yes, it's necessary to look at pages 1 and 2 in relation to page 3 as well, but they're all there together. That's, are we talking about the same thing? I am sorry, my notes, I'm sorry, my apologies. I'm sorry, Mr Tamplin, I misunderstood what you're asking. I'm easily confused.

PN74

Aren't we all?---When I was much younger I wasn't but now towards the end of my career, it's not quite so clear. Let me just explain what this document is. On pages 1 and 2 is in fact our current classification situation ranging from myself as group editor down to, right down to casuals by name and by grade. On page 3 - - -

PN75

Can I just ask, just for clarity - - -?---Yes, certainly, yes.

PN76

You have on page 1, editor off the time book, being a Mr Contos and so forth?---Yes.

PN77

Then you've got grade 7 underneath and if I understood the award, an editor off the time book is a grade 7 plus 10 per cent. Is that the distinction there?---The grade 7, the people are noted here as grade 7, there are four of them, are people we in fact pay at a grade 7 rate, but they're not editors. Now, the reason this has come about is that when I first joined the company three years ago, there were quite clearly some people in my view who deserved to be paid and graded at a higher level. As a consequence of that over the past three years and if I could just give you this as an example, the number of journalists employed by FCN, putting aside the editors off the time book, the number of journalists

**** PETER ROBERT ALLEN XN MR TAMPLIN

employed by FCN at the level of grade 6 when I joined the company were five. There are now 13 at grade 6 or above. So what that indicates is that FCN has made an adjustment at the senior level in terms of pay. However, that's also created a problem for us in that four of the people whom we now pay above the grade 6 level who aren't editors, are no longer entitled to be included in our classification structure which affects the percentages and numbers.

PN78

In what way?---If you go to page 3 - - -

PN79

Perhaps we need to take the Commission to schedule A of MEAA 1, it may assist. It's at the very last two pages, Commissioner.

PN80

THE COMMISSIONER: I think Mr Allen is looking a page 3 of his document.

PN81

THE WITNESS: Yes.

PN82

MR TAMPLIN: Yes, I understand that, but I think he is going to go to how the grading, classification grading works in his particular circumstances.

PN83

THE WITNESS: If you look at page 3, what I have set out there is the current situation as applied by the award and that is, we have 46 classified staff but that figure excludes the editors off the time book but it also excludes those people who are currently on grade 7 that we have promoted and paid extra money over the last three years and just in respect of that, we believe that that's is unfair because they should be part of the overall classification structure. In the far right hand side column where I've got the word Actual, and again I am talking about the top 46 classified, it gives you first of all only the award, the actual percentages, in the first column, so under the award 20 per cent of our people have to be grade 5 or 6 which equals 9.20. We, in fact, have 39 per cent so we're way above. So any argument, I believe, that can be put that we'll use the classification system unfairly, no longer applies. If you go down to the next line which says "if 50 classifies", the calculation there is if you included the grade 7 non editors off the time book, who are the four who have in fact been

**** PETER ROBERT ALLEN XN MR TAMPLIN

given pay rises and you'll see that immediately, and if you compare it with the column immediately above, that under the award in grades 5 and 6, the numbers of people that we would employ would go from 9.20 to 10. But more importantly, down in the lower column which is again the area that concerns me most of all in grades 1 and 2, these are the young people that we would like to try and get into the industry. Again, just by including those four grade 7s who are currently not in the award, you immediately put it up by an extra person effectively. Then if you go to the bottom line and include the grade 7s plus the editors off the time book, that percentage in grade 1 and 2 goes to 11.40. In other words by including all of our editorial people in the equation, not just limiting it to grades 1 to 6, it effectively gives the company within limitation of the grading system at the lower level, grades 1 and 2, this is where we're locked into the situation that we have to turn around. If we want to put more people, hire more young journalists into the grade 1 level, we automatically have to grade somebody upwards if we're in excess of our current percentage which is 9.20. Now, on the face of current operation, we're pretty well off and if again you go to page 3 to the right hand column of actual you will see that at the grade 1 level, we only have 6.50 per cent of people in that grade. Now, let me just explain that. Clearly you might say, well, the company has the opportunity straight away to employ extra people in that grade to take it up to the 20 per cent allowed. This situation has only come about because the company has quite specifically gone out of its way to recognise an award. Numbers of other journalists have the higher grade, so that's why the increase all the way through the grades, we now have many more people at the senior level than we had before, but we will pay the penalty for this in that in this current year and if you go to page 2 of the document and go down to cadets, you will see that we have six cadets currently employed, all of whom in the current financial year will automatically go up to become grade 1 as an award requirement, assuming they all do the right thing which they will. They're all excellent kids. That then means on the current situation that within the next 12 months, the actuals on page 3 will go from three employed to nine and at nine employed, that puts us right on the threshold our 20 per cent and the three who are currently in there, are not entitled to be graded to grade 2 until they pass all of our requirements and nor should they be, quite frankly. So at the end of this current financial year, we will be in the position, the real position, that we'll be right on our 20 per cent threshold. That then means that we as a company don't have the flexibility to then take on more young people without doing one or two things. Under the current situation, we will automatically have to take, say we want to employ, or just say for example, and this is very much a likelihood. In my own case, I am seriously considering

**** PETER ROBERT ALLEN XN MR TAMPLIN

staying in the industry only for one more year. I have had this discussion both with my employer and with my family. So it is possible that come June 30 next year, I will retire. Let's assume then, in my view, and my view is the one that will be taken into account. Assuming that I'm replaced and I may not be, but assuming that I am, we would take say $5000 of my salary to elevate somebody from within the company to become the new editor-in-chief or group editor. That would leave let's say $50,000 for us to spend to employ somebody else. Quite clearly my recommendation will be that I want to go and employ two kids to get them into the industry. We have enough senior people now, I'd like to go and employ some juniors, but on that current structure, if I did that and this doesn't also take into account the company's desire to take on more cadets who will spend one year as a cadet and then they go into this bottom end of the system, but if the scenario that I've just painted to you comes about, or even if it comes about within two years, we're still in the same situation and I can assure you I'm now 62 and I'm not staying in the industry not longer than two years anyway. So this will come about within that period of time, but just go back and focus on the year. If I want to employ two D grades within that 12 months span and we're right up against our percentages at the lower grade 1, we automatically have to put up two people into grade 2. However, on the face of it, that might seem to be quite a simple task, but in fact, we would have three people there who were not entitled to be, to go up to grade 2 at that stage. If we're forced into doing it, that would then leave me with the choice of picking two out of the three and that in itself is unfair because they are all of equal merit and I don't believe that that is an appropriate way to run a business and I don't believe that we have the flexibility. In asking for grades 1 and 2 to be amalgamated so that we have a 40 per cent, percentage across the two, it gives the company the flexibility. It doesn't give us ultimate flexibility in any way shape or form but gives us much greater flexibility to manage it across two grades as distinct from one and I think we will finish up with a better outcome because we're better able to manage our business in the way that we think we should given all the constraints. I mean, quite obviously the easy answer to all this, we pay everybody a lot of money and we employ large numbers of people and we don't care about the percentages but in the real world, that's not the way that it works. We have budgets to work to, as much as I don't like them. Everyone has to work to budgets but there is a limit in fact at these lower levels that just concerns me somewhat.

**** PETER ROBERT ALLEN XN MR TAMPLIN

PN84

MR TAMPLIN: Are you proposing any variation in your proposal to pay rates?---No. No, this doesn't impact on pay rates at all. It doesn't impact, again going back to my reference to the agreement and my reference to the automatic upgradings, that takes care of young journalists being given progression through the grades automatically. I mean, we can't control that any more other than to say well, if people don't do, if the journalist doesn't do their job well obviously we have the right to say, but if we train them properly and look after them properly that's not going to happen anyway. So there's no effect on pay. There's no effect on career paths. It's simply allowing us to manage our juniors in particular better than we do.

PN85

When you say juniors and you referred earlier to kids, how old are these people and what qualifications do they have?---Generally speaking, the industry trend these days is to take on communications graduates. I think there's actually going to be a change in that at some stage but at the moment we tend to look at communications graduates as our main source of juniors and they come in at a third year level. There used to be a cadetship when I was there, when I was a young reporter or cadet there used to be a four year cadetship where you came straight from high school and you were trained by the newspaper concerned, but now it's, the university degree is regarded as the first two years, then you come in as a third year cadet. Essentially they're in their 20s, 21, 22 age bracket and quite frankly, I feel sorry for them because the universities are churning these kids out by the truck load and, you know, the limitations on getting jobs is very, very severe. I currently have something like 50 CVs sitting on my desk from kids who, all very good kids, but there's just no work for them.

PN86

I have nothing further to add, Commissioner, to Mr Allen.

PN87

THE COMMISSIONER: Thank you. Mr Ryan, did you want to cross-examine Mr Allen at all?

PN88

MR RYAN: I thought I would, Commissioner.

**** PETER ROBERT ALLEN XN MR TAMPLIN

PN89

MR TAMPLIN: I'd be very surprised if he didn't, Commissioner.

<CROSS-EXAMINATION BY MR RYAN [11.16am]

PN90

MR RYAN: Mr Allen, assume for the moment I accept that you say there are differences between suburban newspapers and metropolitan newspapers?---Yes.

PN91

Would you be able to inform me in which way the awards reflect those differences?---Do you mean the difference between our suburban award and the award as applied to say the Sydney Morning Herald?

PN92

Yes?---I can't answer that because I haven't seen the Sydney Morning Herald Award.

PN93

Well, let me help you. Do you know there's a 10 grade structure at Fairfax at Darling Park?---I'm not aware of that, no.

PN94

Well, do you accept if I put it to you there is a 10 grade structure?---Of course, of course, without question.

PN95

Would you also accept that the rates of pay and the relativities are higher except for the grade 1 at Fairfax?---Yes, I'd accept that.

PN96

And thirdly, that the proportions are different?---If that's what you tell me, Mr Ryan, I'll accept that too.

PN97

So is it then true to say that the current award reflects the difference between metropolitan daily newspapers and suburban newspapers?---I can see where you're coming from. I'm going to disagree with you at a point here but let me just accept that, yes.

**** PETER ROBERT ALLEN XXN MR RYAN

PN98

I also put to you, your mathematics are a bit dodgy?---It wouldn't surprise me. I'm a journalist, not a mathematician but I, if you feel I'm wrong, please tell me.

PN99

Well, it's not a question of you being honest, it's a question of your mathematics being wrong. Could I take you to page 3 attached to the list of existing staff?---Yes.

PN100

Where I think your assertion is that, if I'm not mistaken, that with the six cadets having to become graded - - -?---Yes.

PN101

- - - then they would become grade ones, go up to 9?---I'm sorry, if they become graded?

PN102

So my understanding is your concerns seem to be based on the fact that you have six cadets currently?---Yes.

PN103

At the completion of their 12 month cadetship - - -?---Yes.

PN104

- - - they will have to be graded as grade 1?---That's correct.

PN105

And that would then take you, the number of grade ones to 9?---Yes.

PN106

And you say that would put you right on the border?---Yes.

PN107

Well, if I can put out a few problems with that. Firstly, the figures are based on 46 staff?---Yes.

**** PETER ROBERT ALLEN XXN MR RYAN

PN108

In fact, that would make the staff 52. Well, simply put, if you add six cadets - - -?---Yes, yes, I agree with that, yes.

PN109

So on the basis of having - - -?---Yes, that's one flaw.

PN110

Well, it's a fairly major flaw, isn't it, because those figures set out the first column on 46 relating to 9.2, 18.4 and 9.2 and 9.2. They're no longer operative are they when you have 52 staff?---They're only operative in a sense, only not operative in a sense that I have miscalculated, not including the six on the classified list but it doesn't change in any way, shape or form my basic argument. I mean, you can do anything you like with figures. You could have 146 classified, you could have any number of ramifications, Mr Ryan, but it doesn't change the basic element or my basic belief that the structure as we have to work with it is restricted. I mean - - -

PN111

Well, was it - - -?---Just let me finish. You've raised the question of what the Sydney Morning Herald does or doesn't do. I mean, let me point out to you that they have a cast of thousands. I mean, they've got so many journalists running round their corridors that if you wanted to use your basis of mathematical calculations to prove something, you could prove anything that you like, but I don't accept for one moment, I accept that I've made an error here and thank you for pointing it out, but I could sit down and if you give me five minutes with my calculator, I'll do the recalculations for you correctly and I'll sit here and I'll still give you the same argument why the classification structure should be changed.

PN112

Well, if you just step back for a second?---Sure.

PN113

Look what you've said in evidence-in-chief?---Yes.

PN114

And that was with the six cadets having to be graded - - -?---Yes.

**** PETER ROBERT ALLEN XXN MR RYAN

PN115

- - - you would be forced to upgrade, forced to upgrade two of the existing grade ones to grade 2?---Well, very well. Seeing, let me say this, seeing that you - - -

PN116

No, that's what you said, wasn't it?---That's what I said on the basis of the original calculations which you have now pointed out are incorrect which I accept. I therefore accept that what I have said in evidence is incorrect.

PN117

And there's a third error as well. You're aware that the award says that any excess in a higher grade can be used to make up a shortfall in the lower grades?---Absolutely.

PN118

On those figures, the percentages that you're required to have for grades 5 and 6 is only 20 per cent?---Yes, I'd accept that.

PN119

And you almost doubled that?---I'd accept that but I don't agree with where you're coming from again because what you're talking about is current circumstance and let me point out to you again that the only reason those existing percentages are where they are is because the company has gone out of its way to do exactly what the union has asked us, has raised with me on many occasions and that is the pay levels of senior staff and other staff. So on one hand, I mean, we're dammed if we do and dammed if we don't. We've adjusted the pay levels for people that the union has for a number of years says they're under paid. So we've done that. We've done what we've considered to be the right thing and now we're paying the penalty for it with you coming here and saying to me that on a mathematical basis, we now have all this allowance under the award to do X, Y and Z at the lower levels. That may well be true at the moment, that's, that's the history of it, that's the reason why it's happened but let me tell you, it won't always be that way. I mean, surely what this discussion has to be about is where we're going in the future and how we can best manage our business both in terms of what FCN needs to achieve and also what your journalists need to achieve or our journalists need to achieve and the simple fact of the - the simple fact there is that nothing stays the same. At the moment on our current graded list, those people that were put up in the wage structure and are now, we are now top heavy in grade 6, grade 7 - grade 6 and grade 7 in particular.

**** PETER ROBERT ALLEN XXN MR RYAN

PN120

Well, that was by a management decision?---Yes, by management decree but what I'm saying to you is that those people have now been rewarded. It doesn't necessarily follow that in five years time when those people leave, we're automatically going to look at people below them and say well, you know, this person deserves to be, he's now a B grade, he deserves to be grade 7. We may do it or we may not. So in a couple of years time, the circumstances could be completely different and the very fact that, as I've already pointed out that we have six cadets about to come through into the system, into our graded system, will start to upset the balances of the percentages anyway and that will continue to be so. I'd like to be able to crystal ball it for you.

PN121

But Mr Allen, that is mathematically incorrect?---I've already agreed to that.

PN122

So for example, your statement at paragraph 22 is incorrect?---I've already agreed to that, too.

PN123

You do agree, don't you, that what I've sought to do in the draft I've handed up is merely maintain the existing award provision?---I understand that.

PN124

So just to be clear, apart from the fact that nobody can crystal gaze five years down the track - - -?---Yes.

PN125

- - - there is no problem caused by the existing proportions when the six cadets get graded?---I've already said that, too. On the face of the current, of current circumstances, clearly, when the six cadets are graded, which they will be in the course of this current financial year, whether we adjust the mathematical proportions or even if we adjust the mathematical proportions to take into account my original error for which I again apologise, it doesn't markedly change the numbers. We are still, we will still be very close to the threshold in those lower grade percentages.

PN126

No, you've got a 20 per cent leeway?---Yes, I hear - yes, so you've told me and I understand that, but what I'm saying is that circumstances will change. If you accept, or do you accept the scenario that I put to you that I may well decide to step down within 12 months?

**** PETER ROBERT ALLEN XXN MR RYAN

PN127

I ask the questions at this time, not yourself?---I understand how the procedure works, but I'm simply saying to you - - -

PN128

There may be a Peter Allen No 2 out there just as generous as yourself. I don't want to crystal ball gaze either?---No, well that's - - -

PN129

Or there might be some evil person. I don't know. We'll deal with that in 12 months' time?---Crystal gazing is a wasteful exercise, I agree, but what I have indicated to the Commission here is that the simple facts are that we don't have to crystal gaze in terms of the next financial year because we know with absolute certainty that there will be six cadets will go into the classified structure and however you want to massage the figures, it will upset the balance. What I'm saying is that that then limits our choices. Even by putting those six in there, that limits our choices as to how many kids, how many young journalists, we can actually take on board. I mean, in current circumstances, if I wanted to, before these six are graded, to use your analogy, we could say, "Okay, we've got 14 per cent here we can fiddle with. I'll go out and hire five kids tomorrow". I mean, that's what you're saying, but you're not taking into account that when you put these other six in there, you upset the percentage balance which is the basis of what we want to be reviewed.

PN130

You're still over graded. Even with those six becoming grade ones you're still over graded because you've got double the amount you need to have in grades 5 and 6. Can I also point out one thing. The enterprise agreement between ourselves, that was freely entered into?---I'm sorry?

PN131

Our current enterprise agreement - - -?---Yes, absolutely.

PN132

- - - was freely entered into?---Yes.

PN133

The current proportions were in existence at the time that EBA was entered into?---Yes.

**** PETER ROBERT ALLEN XXN MR RYAN

PN134

I've no further questions, Commissioner.

PN135

THE COMMISSIONER: Thank you. Mr Tamplin, did you want to re-examine?

PN136

MR TAMPLIN: Just a couple of points, Commissioner.

<RE-EXAMINATION BY MR TAMPLIN [11.27am]

PN137

MR TAMPLIN: You referred there to the balance. What do you mean by that? The balance of what?---Just draw me to which section of the statement.

PN138

No, no, you said, in reply to questions from Mr Ryan, "It will disturb the balance". The balance of what?---The balance in the gradings, in the classifications.

PN139

The percentages?---The percentage, yes.

PN140

And you don't - - -?---I mean, when you have a set of circumstances, it doesn't matter what they are. I mean, here we're talking about a classification structure for journalists but if you have an award or a set of rules that place a ceiling on what you can and can't do and you have to live by that, it means that in our case, we just can't manage our business in the way in which we would like to and we can't manage the input of young people in the industry in the way that we probably would under other circumstances. In other words, a ceiling limits you, no matter what that ceiling is.

PN141

I have no further questions.

PN142

THE COMMISSIONER: Just before you go, Mr Allen, seeing that you're in the box?---Yes.

**** PETER ROBERT ALLEN RXN MR TAMPLIN

PN143

It's not a question for you. I just think maybe I should mark this document.

PN144

Mr Ryan, I note your questions to Mr Allen and his answers about the percentages, but we will still mark it as being what you've put up as your proportions of employees.

PN145

THE WITNESS: Yes.

PN146

THE COMMISSIONER: You don't have any difficulty with that, Mr Ryan, do you?

PN147

MR RYAN: No, no, Commissioner.

PN148

THE WITNESS: With apologies, Commissioner, about my oversight, Mr Ryan is perfectly correct and it's something I should have realised.

PN149

THE COMMISSIONER: That's all right. No, I can understand any faults in relation to mathematics. I have great sympathy.

PN150

THE WITNESS: Yes.

PN151

THE COMMISSIONER: I'll mark that as exhibit FCN3.

EXHIBIT #FCN3 DOCUMENT RE PROPORTIONS OF EMPLOYEES

PN152

THE COMMISSIONER: You can be excused Mr Allen. You can sit back with Mr Tamplin if you would like?---Thank you very much.

<THE WITNESS WITHDREW [11.36am]

PN153

THE COMMISSIONER: Yes, Mr Tamplin?

PN154

MR TAMPLIN: I just close off with a final summation and then Mr Ryan may wish to have his say. We say that the proposal put forward by the company as to the changes in percentages of levels 1 and 2 and the inclusion of level 7 seek to address the processes or work restrictions or procedures that apply to the company and in particular that have the effect of impacting upon young people.

PN155

Now, a young person is in the eye of the beholder. At 21 you may not be regarded as a junior, but we say that prevails to that level, to that category. For those points, we say that our proposal conforms with item 51(7), in particular (6)(a) and 51(7)(ea). If the Commission pleases.

PN156

THE COMMISSIONER: Mr Tamplin, can I just clarify with you. Just in your submissions that you put in, the company proposal, is that set out in there - what the company is putting forward is the proposed clause?

PN157

MR TAMPLIN: Yes, yes.

PN158

THE COMMISSIONER: Yes. That's the union's classification, isn't it, 34 or is that -

PN159

MR TAMPLIN: No, we haven't included the table itself. We have only included the proportions.

PN160

THE COMMISSIONER: Right. Which are?

PN161

MR TAMPLIN: Which are under the heading -

PN162

MR RYAN: The top of 36, Commissioner.

PN163

THE COMMISSIONER: Right. So it would read, leaving the other bits there:

PN164

The classification table at schedule B shall be implemented in accordance with the following -

PN165

and then there are the three -

PN166

MR TAMPLIN: Yes, that's it, that proportion.

PN167

THE COMMISSIONER: Right. That's what the company is putting up as opposed to the schedule A classifications that the union is putting forward?

PN168

MR TAMPLIN: That's correct.

PN169

THE COMMISSIONER: All right, thank you, just to clarify the two clauses. I'm sorry, Mr Ryan, if I cut you off there.

PN170

MR RYAN: Commissioner, could I just say, in relation to the starting point for this item 51 review is that the review process as held by a number of Full Benches, particularly hospitality, wasn't to be regarded as a wholesale review of existing working conditions.

PN171

I think you would be aware, Commissioner, because of your time on the journalism panel that there is a fair bit of similarity in a range of conditions of journalism awards and in relation to the situation regarding the minimum rate of pay for a regular part-time employee which is contained in clause 9.3.3 of exhibit MEAA1, that that is a common feature of journalism awards. Such awards have been simplified and maintain such a provision, a number of awards having been done by her Honour Senior Deputy President Marsh.

PN172

We say it's an existing entitlement. It does not restrict in any way what is going forward. If the company was hell bent on seeking to attack that provision, in my view, the appropriate course would have been for the company to apply a section 113 application to vary the award. They haven't sought to do so and indeed, they have not sought to raise this issue in enterprise bargaining talks which I can say have been conducted between ourselves over the last 10 years during which time that provision has been within the award.

PN173

In relation to the meal provision, for the life of me I am somewhat confused as to what the company really seeks on this. It is again a provision which is fairly standard amongst journalism awards, but the company does have an existing advantage over the other awards in that it does allow the ability to take a half hour break, which time the company can deduct half an hour from the total hours worked and that is where the employee requests in writing and the employer agrees.

PN174

Now, that was raised in some earlier enterprise talks between ourselves and in my understanding, that was often the case that employees do make use of that so that they can get home half an hour earlier other than being told by the company to have an hour off without a break. It really is an exiting entitlement. There is flexibility there. I don't really want to go down the path of interaction between item 51(7) in that this is a single employer award, Commissioner. So the processes of detail have to be dealt either by way of the award or by the enterprise agreement and as I pointed out earlier, this hasn't happened and there is that addition flexibility there.

PN175

In relation to the wholesale attack, if you like, that has been mounted on the existing and the long standing grading proportions, can I say that those proportions have been around for many years. They reflect the nature of the skills required in suburban newspapers. So you have 20 per cent for grade 1, 20 per cent for grade 2, 40 per cent for the old B grade and 20 per cent for the old A grade. As can be seen by FCN3, the company is well in excess of those proportions and as conceded by Mr Allen, even with the coming on board of the cadets, they will still be in excess of those requirements under the award.

PN176

Could I say that the actual question of a proportions table was challenged by the minister in the ministerial 109 review which is print R2700. Could I just refer the Commission to paragraph 176 of that decision, Commissioner, where it was argued by the minister that it was not allowable. It was held to be allowable. I do note that they did not go to the question of percentages being appropriate or not as it was a question about allowability.

PN177

Can I say that coupled with the fact that the parties have in place an enterprise agreement as well which talks about automatic progression from grades 1 to 2 and from 2 to 3 and that was only concluded between ourselves late last year, that it seems a bit rich for the company to be seeking to impact on the safety net award provisions that they knew existed, have existed for some time and also they have an agreement by way of the enterprise agreement to allow automatic progression between those bottom grades.

PN178

I don't believe it is appropriate to raise the question of the EBAs as sought to be done by Mr Allen in his witness statement as to say that the EBA operation has an impact on the safety net award. They are two distinct streams. The purpose of this item 51 review is totally different to having anything to do with the interaction of the agreement with the award in any event. We've seen on the figures that the proportions are appropriate and even with those cadets coming on board, they will still be well within their rights as they have doubled the number of people required to be had in the grades 5 and 6.

PN179

So we say, we don't believe a proper case has been made out for a reduction in an existing entitlement which as I said has been held not to be the purpose of item 51 reviews and on that basis, Commissioner, subject to I think that one point whereby Mr Tamplin may need to get instruction as to whether the company consents to insert the current minimum rates pursuant to the May 2002 safety net decision that a new simplified award should be made in terms of exhibit MEAA1. If the Commission pleases.

PN180

THE COMMISSIONER: Thank you, Mr Ryan. Mr Tamplin?

PN181

MR TAMPLIN: Just one clarification, Commissioner. When we referred to the percentages on page 36 of FCN1, I think, those submissions there, we ask that they be taken into consideration too as -

PN182

THE COMMISSIONER: The submissions that follow there?

PN183

MR TAMPLIN: Yes. Other than that, that concludes our position.

PN184

THE COMMISSIONER: Mr Tamplin, just in relation to that safety net matter, you'll be able to get some instructions and -

PN185

MR TAMPLIN: I'll advise Mr Ryan and the Commission in writing of that outcome.

PN186

THE COMMISSIONER: If you could please, Mr Tamplin, thank you. Well, in that case, the matter is now adjourned. Thank you.

ADJOURNED INDEFINITELY [11.42am]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #MEAA1 REDRAFTED SIMPLIFIED AWARD PN12
EXHIBIT #FCN1 DOCUMENT RE RATES OF PAY FOR PART TIME EMPLOYMENT PN38
PETER ROBERT ALLEN, SWORN PN44
EXAMINATION BY MR TAMPLIN PN44
EXHIBIT #FCN 2 STATEMENT OF MR P. ALLEN PN51
CROSS-EXAMINATION BY MR RYAN PN90
RE-EXAMINATION BY MR TAMPLIN PN137
EXHIBIT #FCN3 DOCUMENT RE PROPORTIONS OF EMPLOYEES PN152
WITNESS WITHDREW PN153