C0036/398, Transcript of Proceedings [2003] AIRCTrans 1535 (28 April 2003)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 4, 179 Queen St MELBOURNE Vic 3000
(GPO Box 1114 MELBOURNE Vic 3001)
DX 305 Melbourne Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS


O/N VT10327
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER REDMOND

C No 00363 of 1998

AUSTRALIAN AIR EXPRESS
CONSOLIDATED AWARD 1994

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

MELBOURNE

10.12 AM, WEDNESDAY, 9 APRIL 2003

Continued from 12.2.03 (Not transcribed)

PN1

MS F. FIELD: I appear from the Australian Industry Group on behalf of Australian Air Express. Also appearing with me is MR D. ANDREACCHIO from the company.

PN2

MR K. HARVEY: Again on this occasion I appear on behalf of the Australian Services Union.

PN3

MS J. TISDALE: I appear for the Transport Workers Union. Appearing with me is MR W. NOONAN also from the TWU.

PN4

MR E. KEANE: I appear for the CEPU Communications Division.

PN5

THE COMMISSIONER: Yes, Ms Field.

PN6

MS FIELD: Thank you, Commissioner. Commissioner, before I commence I think Mr Keane would like to make a short submission. That is my understanding, so if you would grant that indulgence.

PN7

THE COMMISSIONER: Yes, Mr Keane.

PN8

MR KEANE: Thank you, Commissioner. Commissioner, the CEPU has not submitted by the due date, 28 March, a written submission in support of the retention of an incremental - of increments in the proposed award. The union has had previous discussions with AAE regarding - what should be regarded as accurate descriptors for the work carried out by our members. We note the stance as put forward in their written submissions by the ASU and the TWU and we are generally in support of their submissions on this point. Our membership in this area is of a small degree and we would - our attitude in this matter is that we will abide by the outcome of the proceedings.

PN9

THE COMMISSIONER: Yes.

PN10

MR KEANE: Commissioner, if I may request to take my leave in this matter.

PN11

THE COMMISSIONER: Yes, thank you, Mr Keane. Ms Field.

PN12

MS FIELD: Thank you, Commissioner. Commissioner, if I could start by perhaps handing up some documents which I have principally put in a folder which I thought might be the easiest way of referring to the exhibits and our submissions.

PN13

THE COMMISSIONER: Thank you. Yes.

PN14

MS FIELD: Thank you, Commissioner. In the folder there are numerous documents which I will be referring to during my submission and also separately I have given you a copy of the draft simplified award which is what AAE submits should become the new simplified award and it is agreed in large part but I will address the Commission on the issues that are not agreed and I have also handed up a copy of the existing consolidated award.

PN15

THE COMMISSIONER: Yes, thank you.

PN16

MS FIELD: Thank you, Commissioner. Commissioner, the matter before you today is an application for the making of a simplified award to replace the existing Australian Air Express Consolidated Award 1994 and in accordance with directions we have submitted written outlines to you on 28 March and we would seek to rely on those submissions in the course of our presentation today.

PN17

Commissioner, if I could just draw to your attention that our written submission is part of the folder at tab number 1. So I don't need to refer to that any further at this stage but it is there. The application is at the end of a long process of negotiation between Australian Air Express, the ASU, the TWU and the CEPU over the last three years. My instructions are that the matter was brought on at the Commission's own motion in March 2000 as a matter to be dealt with under Item 51, Schedule 5 of the WROLA Act 1996.

PN18

Since then we have had a number of conferences under your chairmanship and a lengthy series of discussions between the parties over the content and the form of a simplified award. The end result has been that agreement has been reached by the parties on the terms of the award in respect of all but two items and those are, firstly, the removal of increments in the current award as it is converted from a paid to a minimum rates award and, secondly, the form of the classification structure which should apply to administrative customer service and salaried staff under the simplified award.

PN19

Commissioner, you will be aware of the legislative requirements in relation to the simplification of awards much better than I am, I am sure, and as I have addressed these in the written submissions I was not proposing to expand on them, if that is all right. Rather I would like to move on to give you an overview of the form of the award as far as it is agreed between the parties and how that has been arrived at. Commissioner, I did e-mail a copy of the award to you on 28 March. It did have a couple of typos in it which I have subsequently corrected and that is in fact the document that I just handed up.

PN20

THE COMMISSIONER: Just handed up is the correct one?

PN21

MS FIELD: Yes, yes, is the correct one. Commissioner, in order to show what has happened to the provisions of the Australian Air Express Consolidated Award I have prepared a table which summarises this and that is at tab 3. Commissioner, I think the chart is pretty straightforward really. The column headed, Comments, is the one which is, I guess, relevant for tracking what has happened to the clauses in the existing award and given that the parties have been mindful of the provisions of the Act in relation to retaining only which - those issues which are allowable, we have done our best to comply with the Commission's requirements in that regard.

PN22

Commissioner, would you like me to run through why we have retained certain things and under what section of the Act we believe they are allowable or - - -

PN23

THE COMMISSIONER: Not if they are agreed.

PN24

MS FIELD: Great; thank you. Commissioner, in addition to having deleted non-allowable matters we have reviewed the provisions and we believe that modifications, updates and deletions of part or all of whole clauses have occurred as a result. The award simplification unit reviewed a draft of the award in 2001, I think it was, Commissioner, and it has made comments on the draft as it stood then. Most of those comments have been incorporated into the document that you have before you but there are a few things that I really do need to address with you.

PN25

Commissioner, if I could take you to clause 14.1.5 in the new draft in front of you.

PN26

THE COMMISSIONER: 14.1.5?

PN27

MS FIELD: 1.5, yes.

PN28

THE COMMISSIONER: Summary dismissal?

PN29

MS FIELD: Summary dismissal, yes. The award simplification unit suggested that we should add some extra words in there that said that a person could be summarily dismissed for inefficiency within the first 14 days. Now as that was not part of the or is not part of the 1994 consolidated award the parties felt that that was inappropriate to incorporate and, in fact, it is not something that I am award of as being part of a test case standard so that has not been included in that provision. If I could take you to clause 15 which is redundancy.

PN30

THE COMMISSIONER: Yes.

PN31

MS FIELD: That again is not the, I guess, test case standard in relation to redundancy, however it does reflect the existing clause 38 in the consolidated award and we would say that it is appropriate that it is inserted into the simplified award because in line with Item 51(3) there is a requirement that when varying awards the Commission may vary them so that an allowable award matter is expressed in a way that reasonably represents the entitlements of employees who are covered by the award which is being simplified and we would say that this provision clearly or this clause clearly fits into that category.

PN32

I guess the key issue is that the period of notice is different under the redundancy provision than the standard period of notice elsewhere in the award in that it is more beneficial and that it incorporates at 15.12 through to 15.14 some extra benefits that are payable in the event that somebody is made redundant and certainly those provisions also exist in the existing 1994 consolidated award. So, Commissioner, those are the - and at 15.4 also, I am sorry, there is an enhanced quantum of severance pay also included and again that reflects the existing award.

PN33

THE COMMISSIONER: But is agreed to by the - - -

PN34

MS FIELD: But it is also agreed, yes.

PN35

THE COMMISSIONER: Yes. Well, provided I allow it, of course.

PN36

MS FIELD: Exactly, yes.

PN37

THE COMMISSIONER: I take it the parties won't be appealing - - -

PN38

MS FIELD: I would think it is unlikely, Commissioner.

PN39

THE COMMISSIONER: The only way it then would be reviewed by a Full Bench would be if someone does appeal by decision in the end on the wage question, I guess?

PN40

MS FIELD: Yes, I guess that - - -

PN41

THE COMMISSIONER: Then the Full Bench would look at it all.

PN42

MS FIELD: Yes, that is right.

PN43

THE COMMISSIONER: Yes.

PN44

MS FIELD: And we might come totally unstuck; I don't know. Personal leave clause at clause 25 is also something that was looked at by the award simplification unit but which we did not or - we did not adopt their suggestions in relation to personal leave principally because what they were suggesting was that the personal leave should reflect a situation where the standard for sick leave was five days and the standard for bereavement leave was three days and all the calculations about entitlements that they suggested were predicated on that provision.

PN45

However, this award does in fact have better provisions currently and so what we have done again is to incorporate the existing provisions into the personal leave clause. Commissioner, those are really the only issues that I wanted to draw to your attention in relation to things that we have not adopted which the unit identified. What we would also like to just draw your attention to is that we have inserted additional clauses into the award. Those are at the end of the table identified as enterprise flexibility, facilitative clauses and the supported wage clause and they were all agreed and they basically follow test case provisions so I don't think there should be any issue in relation to those.

PN46

Commission, in relation to complying with the other requirements of the WROLA Act at clause 51(7)(b) we would say that there are facilitative provisions, there has been an incorporation of part-time employment in the award, the award has been structured in the preferred way, it is expressed in plain English and it has been reviewed for obsolete provisions in our submission. The anti-discrimination test case provision has been inserted. So, Commissioner, that really, I think, covers what is agreed between the parties in the draft in front of you.

PN47

If I could perhaps now address the two issues that are not agreed. The first of those derives from the conversion of the award from a paid rates to a minimum rates award. Perhaps a brief history of AAE and its precursor awards might be of assistance to the Commission. Australian Air Express came into being in May 1992 formed as a joint venture between Australia Post and Australian Airlines. The owners of the business are Australia Post and Qantas which is the successor to Australian Airlines as you would be award.

PN48

There were four foundation awards that were used to - as the basis for the AAE Consolidated Award 1994. Those are the Salaried Staff (Australian Airlines) Award 1990, the Clerks Domestic Airlines Award 1982, the Australia Post Postal Workers Award and the Transport Workers Airlines Award 1992. Commissioner, all of these were paid rates awards and when the Australian Air Express Consolidated Award it too became a paid rates award.

PN49

I think there is no disagreement about that so there is probably no point or no need for me to make further submissions on that point. In our submission the Australian Air Express Award must be converted from a paid to a minimum rates award in order to comply with the terms of the Full Bench's decision in the paid rates review which is print Q7661 and, Commissioner, there is a copy of that decision in the folder at tab 4. I would particularly, I guess, draw your attention to part 13 which is on page 14 of that decision.

PN50

THE COMMISSIONER: Yes.

PN51

MS FIELD: And would say that where the - sorry, Commissioner - sorry, section 14 on page 17, which talks about awards needing to be examined to ascertain whether they equate to rates in other awards and the necessity for awards which contain - don't have rates which have been adjusted in line with the minimum rates adjustment principle need to be so adjusted. I think it is appropriate to look at the conversion of this award in the light of the Commission's decision and, Commissioner, I would therefore like to take you through the principles and tell you how, in our view, they have been complied with.

PN52

Commissioner, these principles are the ones that are outlined at point 14 on page 17 of the paid rates review decision, if you want to follow them. Principle 1(a) and 1(b) of the Full Bench paid rates decision refer to the requirement to review awards which haven't been operating as minimum rates awards or awards that have been adjusted in accordance with the '89 minimum rates adjustment principle but which have been varied and we would submit to you that the Australian Air Express Award has not been adjusted in line with that principle.

PN53

Principle 2 requires that the rates in the award under review should be examined to determine whether they equate to rates in other awards that have been adjusted in line with the '89 principles and where they don't equate then they will require conversion and the key point for determining how that conversation should take place is to look at the relationship between the key classification in the award under review and the Metal Industry fitter as the starting point.

PN54

Commissioner, in this award, because it was made from four separate awards and covers five different streams of work there is not just one key classification, in our submission, and I think that the parties would agree that that is the case. It is our submission that there are in fact three key classifications which have relevance for the different salary structures in the award. Firstly, one for express couriers who came from the Australia Post Award; secondly, one for the customer service administrative and salaried staff which came from the Clerks Domestic Airlines and the Salaried Staff Award; and the final one, the airline services operator stream which came from the Transport Workers Airlines Award.

PN55

I think there is a need for us to examine these separately, Commissioner, and so I would like to take you through that. Commissioner, as a model at tab 5 we have prepared a history of the identification of key classifications for express couriers and how that has tracked through in determining what we believe are appropriate or properly fixed minimum rates in the draft award which we have handed up this morning. This came from the Australia Post Postal Workers Award into the Australian Air Express Award and the Australia Post Postal Workers Award has subsequently been converted to minimum rates and is now known as the Australia Post Operations Award.

PN56

We submit that the key classification, Commissioner, is the postal transport officer and if I could perhaps just highlight on the first page of the exhibit, that is at tab 5, the relevance of that. If you have a look at the first chart which has been developed to show the postal transport officer classification and the express courier classifications as they existed in the Australia Post Postal Workers Award 1985 as at September 1992 it is pretty easy to see that there was parity of salaries between the postal transport officer classification and the express courier classification at that point and we would submit that that parity continues through.

PN57

Commissioner, the wage rate for the postal transport officer, we submit, is 92 per cent of the trade rate, the Metal Industry trade rate, which applied at the time of conversion in 1991. Commissioner, if I could then take you to the second page of the exhibit. We would say that there was parity established between the postal transport officer and also the airline operators at that time so there was some properly fixed basis of comparison between streams albeit that they had come from different awards.

PN58

The postal transport officer rate of 92 per cent of the trade rate has been determined by using the properly established minimum rates in the original award and then comparing the rate for the postal transport officer with the fitter's rate of $465.20 in 1998 and that is, I think, fairly clearly spelt out on the second page of the exhibit that I have handed up. The relativities in the Australia Post Operations Award, which is the simplified award in the Australia Post area, have been used in aligning the rates for express couriers in the structure that we have inserted into the draft award which you have.

PN59

It would seem that that was appropriate given that there had been parity between the two classification streams in earlier awards and those are the relativities that went into the Australia Post Operations Award when it became a simplified document. If I could take you through that chart on the second page, Commissioner, you can see that the properly fixed minimum rate has been determined to be $22,255 as at 1998 and that the paid rates - the properly fixed minimum rate has been calculated for 1999, 2000, 2001 and 2002 if you look at the columns to the right of the properly fixed minimum rate at 1998.

PN60

This gives us, in our view, the properly fixed minimum rates for 2002 which have been calculated by adding the safety net adjustment to the 1998 properly fixed minimum rate. I would also like to point out on that page the comparison between the actual rates paid at 1998 and the rates that are - sorry, the actual rates paid in 2002 and the properly fixed minimum rates which you can see are not the same and, Commissioner, we have therefore identified that there is a residual amount which will need to be absorbed through future safety net adjustments so that the rates in the award, over time, reflect true minimum rates principles.

PN61

At this stage, obviously, we can't make the award rates lower than they already are by inserting in lieu of the current award rates the properly fixed minimum rates. Commissioner, if I could ask you perhaps to have a look at the - appendix A or the chart that is headed appendix A. This is really just to confirm the alignment of the postal transport officer and the express courier. You will see that the rates in that chart in fact are aligned because it is a two-page chart and if you have a look over the page you can see that there is parity between the rate at 1998, which is I guess the one that we have chosen to use in terms of the postal transport officer and the express courier grades.

PN62

So, Commissioner, I think that we would submit that there has been a proper conversion done in relation to the fixing of the proper minimum rates in this award and that therefore there should be just inserted into the award the structure that we have developed which reflects the conversions in this table. I think, Commissioner, that is all I wanted to say in relation to that. I don't think there are any other issues, thank you. Commissioner, if I could now look at the customer service, the administrative and salaried structures. As I have already said, Commissioner, the foundation awards for these structures are - - -

[10.40am]

PN63

THE COMMISSIONER: That is behind what tab?

PN64

MS FIELD: I am sorry, Commissioner. Well, I am going to go to tab 6 now.

PN65

THE COMMISSIONER: 6, okay.

PN66

MS FIELD: Yes.

PN67

THE COMMISSIONER: Good, thank you.

PN68

MS FIELD: The foundation awards, we would say, for this part of the new award or for the existing award, I should say, are the Clerks Domestic Airlines Award 1980 and the Salaried Staff (Australian Airlines) Award 1990. Both awards have been through the simplification process and now the Airline Operations Clerical and Administrative Award 1999 and the Airline Officers (Qantas Airways Limited) Award 2000. In our submission, Commissioner, the level 3 customer service operator in the existing Australian Air Express Consolidated Award is the key classification and I would just like to spend a little time going through those documents at tab 6 in relation to that.

PN69

We would say, we would submit or we do submit that the sort of work which is performed or the level of work which is performed under the Australian Air Express Consolidated Award by level 3 customer service operators is very similar to that which is covered or done by the level 3 staff under the Airline Operations Clerical and Administrative Award 1999. Commissioner, for purposes of determining where the key classifications should come from we have looked at the Airline Operations Award. We have looked at the Airline Officers (Qantas Airways) Award which is at the - is the second document behind tab 6 and you will note that at 15.8 it talks about classification of positions and says basically that it:

PN70

...will be in accordance with the practices and procedures in operation at the commencement of this award.

PN71

So given that that was the wording in the award we then looked at the precursor award which is the Airline Officers (Qantas Airways Limited) Award 1992 which is the third document in that list, that tab 6, and you will see that under clause 8(a):

PN72

The classification of job positions into a band and the promotion of an officer from one band to another will be in accordance with practices and procedures in operation at the commencement of this award.

PN73

So, Commissioner, we have not in fact been able to track back comprehensively the classification descriptors for the Airline Officers (Qantas Airways) Award. Why we have included them in the discussion of the identification of the key classification in the Australian Air Express Award is because although the Airline Operations Clerical and Admin Award 1999 and the Airline Operations Award have both been simplified we think that the Airline Operations - sorry, the Airline Operations Clerical and Administrative Award was not necessarily converted through adhering to the principles of the Commission in relation to conversation from paid to minimum rates.

PN74

I don't know the full history of that but I suspect that it may have been a consent variation or a consent conversion I should say because the rates in the precursor award to - in other words the Clerks Domestic Airlines Award were very similar to the ones that went straight into the minimum rates award which is the Airline Operations Clerical and Admin Award. So we would say that to use the rates that have been identified in the Clerical and Admin Airline Operations Award is inappropriate because there was that, if you like, doubt about the conversion process that was used.

PN75

However, it is appropriate to look at the actual work that is being done by the level 3 employees under the Airline Operations Clerical and Administrative Award and if you have a look at the first document in tab 6 it talks at level 3 about the sorts of attributes that are required of somebody who is operating at that level. Commissioner, it talks about a person having full knowledge of procedures, detailed knowledge of other sections of the department and their interrelationships, having reasoning and judgment skills, interpreting data from software packages, ability to utilise software packages, keyboard and office machines.

PN76

It also says that the responsibility level entails a person being able to be accountable for actions resulting in customer satisfaction, meeting of deadlines and obviously complying with regulations. If I could take you to the last document in tab 6 could I take you to about - page 62, actually, Commissioner, of that document which talks about the responsibilities and skills for the level 3 customer service officer in the existing Australian Air Express Consolidated Award. What we would say is that there - albeit that the descriptor in the Airline Operations Award is somewhat briefer we would say that there is certainly some significant similarity between the two descriptions.

PN77

Firstly, we would say that the employees are required to, under the technical skills, use software packages which equates directly with 18.4.3(d) which talks about the ability to use software packages, keyboard and office machines. We would also say that there is a requirement under the Airline Operations Award at 18.4.3(a) which is very similar to that under the enterprise industry knowledge skill level identified in level 3 of the customer service stream in the consolidated award in that it is - a person is required to have full knowledge of procedures and detailed knowledge of other sections of the department and their interrelationships.

PN78

We would say that that is very similar to providing advanced detailed advice and information on the organisation's products and services and responding to client and/or supplier problems within their own function areas. In terms of specialist skills which are identified at level 3 I don't think there is any direct comparator with the level 3 Airline Operations Clerical and Admin Award except that it does say - the Airline Operations Award does say that there is a responsibility for ensuring actions - all actions result in customer satisfaction. So I think that there is a requirement that people at level 3 in the Australian Air Express Award would also be required to do that, if you look at the enterprise industry knowledge skill level.

PN79

In terms of supervision there is a requirement under level 3 of the Australian Air Express Customer Service stream that people perform operation and clerical tasks within guidelines under general supervision and the supervision at level 3 in the Airline Operations Award goes to limited supervision which I think would probably be very similar in practical application. So, Commissioner, our rationale for selecting level 3 goes to a comparison of those two extracts from those two awards and we would say is the appropriate key classification or the appropriate classification to be identified as the key in then determining the appropriate minimum rates for clerical - sorry, customer service, administrative and salaried staff within the award.

PN80

Commissioner, we don't, however, believe that the parity of grading should be determined in terms of the salary level. We say that it is appropriate to use - I am sorry, Commissioner, can I just withdraw that. Perhaps if I could take you to the next exhibit which is behind tab 7 and I started with the customer service officer because I thought it was probably easier to work through that structure than the admin and salaried staff structure to explain how we have calculated the properly fixed minimum rates. Commissioner, what we need to obviously do is to determine where the level 3 customer service officer sits in relation to the Metal Industry Award trade rate.

PN81

My instructions are that that rate was fixed as 108 per cent of the trade rate in 1991 and consequently in producing this document that rate has been used and you will see that it has been identified in the middle of the spreadsheet for the customer service classification structure. Relativities to the level 3 are in the first column on the right of that - or the middle of the page, if you like, Commissioner, at the top of the column which identifies the key or the percentages. There should be the words "conversion rate" but unfortunately it seems to have moved across a little in the printing. All the columns to the right of those percentages which - the percentages is the column starting 94.01 - all the columns to the right of that have been determined as properly fixed minimum rates by applying safety net adjustments to the converted 1991 properly fixed minimum which has been calculated as the appropriate percentage of the $23,429.95 which is identified in the centre.

PN82

The columns on the left-hand side of the page, which are headed from 2002 back to 1997 - and I apologise that they all seem to have double 0 on the end of them, I am not quite sure why that occurred - - -

PN83

THE COMMISSIONER: It is the computer.

PN84

MS FIELD: It was the computer, yes.

PN85

THE COMMISSIONER: No one knows what they do.

PN86

MS FIELD: We say are the rates, the award rates which applied at the dates and have been calculated by taking the existing award rate and removing the safety net adjustments. So that is how we say those have been calculated. The extreme left-hand column is the existing award rate, Commissioner, and the extreme right-hand column is the, what we say, is the properly fixed minimum rate for the customer service staff and you can see that the rates in the right-hand column are in fact in excess of those in the left-hand column which means that the properly fixed minimum rates are higher than the current award rates and we would say that in accordance with principle 6 of the paid rates decision those rates need - the properly fixed minimum rates need to be inserted into the draft award and in fact that is what we have done.

PN87

THE COMMISSIONER: That is at part 2 in the draft award wage rates, is that - - -

PN88

MS FIELD: Yes, yes, it is, Commissioner.

PN89

THE COMMISSIONER: That is where that is, yes.

PN90

MS FIELD: Yes, thank you. Commissioner, the next spreadsheet is at tab 8 and this, I guess, is a follow on to the spreadsheet which we developed for customer service staff. Again the level 3 has been identified or the level 3 customer service staff classification has been identified as the key classification and again it is 108 per cent of the trades rate as at 1991 and that is identified in the middle of this spreadsheet. The percentage relativities to level 3 have been identified in the column immediately to the right of that central reference to the key classification level and percentage and those have been calculated obviously using the level 3 as a base.

PN91

We would say that all the rates - well, we submit that all the rates to the right of that have been calculated in a similar way to the ones that were calculated for the customer service staff in the previous exhibit and that is that the appropriate 1991 rate for the trade - sorry, taking into account the trade relativity has been identified and then the safety net adjustments have been added to that resulting in the column on or the second last right-hand column giving what we say are the properly fixed minimum rates for admin and salaried staff under the award. Commissioner, on the left-hand side of the page the award rates have been shown by, again, using the existing award rate and then taking off the safety net adjustments.

PN92

So we have a situation again where the extreme left-hand column represents the existing rates in the award and the second last right-hand column, in our submission, represents the properly fixed minimum rates. In this instance the properly fixed minimum rates are in fact lower than the actual award rates and we therefore say that there is a residual which falls out and we have identified that residual in the extreme right-hand column and that is the award rate, the properly fixed minimum rate and the residual have been inserted into the draft award which you have in front of you. The residual obviously needs to be absorbed against the safety net adjustments or any safety net adjustments that are made in the future.

PN93

In terms of the way in which the relativities have been fixed to the level 3 customer service operator, these have been, I am instructed, done in accordance with the way in which the relativities were fixed when the precursor awards went through the structural efficiency principles many years ago. Commissioner, that is the or that deals with the customer service, the admin and the salaried stream in our submission. The last stream of classifications in the consolidated award is the Airline Service Operators Award. The foundation award for this was the Transport Workers Airlines Award 1992 and during the simplification of this award the key classification was determined to be level 4, airline service operator, which was identified as 96 per cent of the trade rate.

PN94

Commissioner, at tab 9 there is a letter from Qantas to the Transport Workers Federal Secretary John Allen which confirms that that is the or has been identified and agreed as the key classification in the conversion of the Transport Workers Airlines Award and it also indicates that the relativity to the Metal Industry fitter is 96 per cent. So we have used that as the basis for calculating the properly fixed minimum rates for transport workers which have gone into the draft award. If I could take you to the spreadsheet at tab 10, Commissioner, you can see that or there is a note under the table which indicates that the fitter's rate in 1991 was $417.20. That level 4 is 96 per cent of the fitter's rate and that the key classification is identified as level 4.

PN95

If we look at the relativities they have been identified in the second left-hand column or the second column from the left, I should say, and those have been fixed relatives to the level 4 rate. The other columns show the minimum rate, properly fixed minimum rate for 1991 and then for 1997 through to 2002, Commissioner, and those have been obviously calculated by adding the safety net adjustments to the minimum rates or the properly fixed minimum rate in 1991. The table does not show but I can indicate to you that in fact the properly fixed minimum rates for the transport workers are now slightly in excess of the actual award rates in the 1994 consolidated award so in the table in the salary section of the draft award at clause, I think, 15 the properly fixed minimum rates are the rates which are shown and again we would say that that is in accordance with principle 6 of the paid rates review decision.

PN96

Commissioner, if I could now take you back to the principles in the paid rates review decision. I think that what I have done in producing those conversion charts is to apply a number of the principles and perhaps if I could just quickly summarise those. Principle 4 goes to the relationship between the key classification and the Metal Trades fitter using the Metal Trades fitter as the starting point and then the internal relativities are to be maintained. We would say that this has occurred and that the relativities in the foundation awards have been reflected in the conversion process for this new award.

PN97

Principle 5 indicates that residuals above minimum rates are to be identified and not increased and we would say that that is in fact what we have done or aimed to do in our conversion process. Principle 6 indicates that where the properly fixed minimum rates exceed award rates then the award rates must be increased and that has been done in relation to both the customer service stream and the airline operator stream. Principle 7 talks about future increases in award rates being applied only to the minimum rates component and being absorbed against any residual that is outstanding as a result of the conversion process.

PN98

We say that the residuals have been identified in the conversion charts and certainly are gradually being absorbed by the application of the safety net adjustments. Principle 8 which deals with the retention of increments I will come back to a little later, Commissioner. Principle 9 indicates that the Commission can determine rates where they are in contention and at this stage that is perhaps not something that needs to happen although it may by the end of today. Principle 10 indicates that special cases may be mounted in relation to any departure from the Full Bench's decision and we would say at this stage is not applicable.

PN99

Principle 11 we would say also is not applicable. Principle 12 deals with the conversion of the award from paid to minimum rates not being the basis for reducing the entitlements of people covered by the award being simplified and we would say that there is no intention on the part of Australian Air Express to diminish entitlements through this process. Commissioner, if I could now turn to the issue of the increments and if I could take some instruction from the Full Bench paid rates decision in relation to that and that decision, Commissioner, is at tab 4. Commissioner, if I could refer you to what the Full Bench has said.

PN100

THE COMMISSIONER: What page is that?

PN101

MS FIELD: On page 18, sorry, principle 8.

PN102

THE COMMISSIONER: Yes.

PN103

MS FIELD: It says, and I quote:

PN104

Increments will only be retained where they have been included in the award pursuant to the relevant work value principle or where it can be established that the increments were inserted by the Commission on grounds of structural efficiency and work value.

[11.10am]

PN105

Commissioner, the Full Bench's decision also discussed its view of incremental payments further in its decision and on page 16 it says, three-quarters of the way down the page in the paragraph beginning, "Where the relevant award". It says:

PN106

Where the relevant award does not make progression through the incremental scale dependent on changed work value, the incremental payments cannot be treated as part ...(reads)... work value the retention of such payments is permissible.

PN107

Commissioner, we would say that it is pretty clear from this decision that the Commission is saying that increments have to be work value based or that they have to have been included in an award pursuant to work value principles or on the basis of structural efficiency and work value and, Commissioner, if I could take you now to tab 11 which is the paid rates review supplementary decision print S0105. Paragraph 3 of that decision I think is also relevant in the circumstances we have before us today. This decision was discussing the retention of increments in a number of APS awards including nursing awards and the Bench said that:

PN108

It seems to us -

PN109

I quote -

PN110

It seems to us undeniable that clause 16.1 (formerly clause 17.1 of the award) which until now has governed progression through the salary structure at each level is based essentially ...(reads)... progresses to the next level after 12 months.

PN111

It is our submission that the increments in the Australian Air Express Award are not work value based and should not therefore be retained in the simplified award because they do not meet those requirements that have been set out by the Full Bench in its two paid rates review decisions. If I could perhaps take you to the award itself, Commissioner, the consolidated award itself just to go through to see if there is anything that refers to incremental progression and if I could take you to appendix A which is at the back of the award. Page 59, Commissioner, in my copy, so I hope it is page 59 in yours - appendix E, I beg your pardon.

PN112

THE COMMISSIONER: This is in the old award?

PN113

MS FIELD: Yes, yes.

PN114

THE COMMISSIONER: Page 59.

PN115

MS FIELD: Are there pages on the - - -

PN116

THE COMMISSIONER: Yes. Yes.

PN117

MS FIELD: Okay, is that appendix E in your copy, Commissioner?

PN118

THE COMMISSIONER: Yes.

PN119

MS FIELD: Good. Commissioner, just briefly, if we could have a look at the customer service structure, there are increments in the customer service structure in the existing award in levels 3 to 6 inclusive and if we have a look at levels - the descriptor for level 3, for instance - or level 3 which is on page 62, there is nothing in there which talks about how an employee will move from one level or one pay point to another within level 3. The only reference points that are made to the movement through the classification structure go to wording such as and I quote here at placita 3:

PN120

Customer service officer is an employee who may be required to use all of the skills for which he or she was trained in level 2.

PN121

And in relation to the training provision which one would perhaps think might give us a clue to how a person might progress through it just says that:

PN122

The employee will undertake training by means of inhouse structure and relevant external courses in the skill and skill levels required for level 4.

PN123

But it doesn't actually say that within level 4 there will be certain requirements if one is to progress through each of the pay points within level 4. The point of entry also indicates for the customer service officer level 3 that a person may have completed a period of work and training in level 2 but there is nothing more detailed, we submit, in any of the classification descriptors that indicates that employees, in fact, are required to reach new skill standards in order to move from one pay point to another. Commissioner, if I could also take you back, still in the consolidated award, to the pay rates which are set out in my copy at page 30-5.

PN124

THE COMMISSIONER: Yes.

PN125

MS FIELD: In our submission it is pretty clear that the increments shown in the express post courier are designated by year. There is nothing in part I that indicates that an express post courier needs to attain certain skills and abilities or meet required standards in order to progress from first year to second year to third year and consequently we say that there is no evidence within the existing award that any of the incremental pay points are based on work value principles and consequently, because of that, we believe that there is no case for them to be retained in the existing or in the new award when it is made.

PN126

We would also indicate that the foundation awards from which the Australian Air Express Consolidated Award was made have in fact not retained increments and we would say that that is, I guess, indicative of the fact that - - -

PN127

THE COMMISSIONER: None of the three awards?

PN128

MS FIELD: No, Commissioner. There has been the retention in the - one of the awards has retained the ability for existing staff who are entitled to increments to have them grandfathered, if you like, until such time as they leave but that does not apply for new staff coming into the organisation. Commissioner, that is in the Australia Post Operations Award 1999. Commissioner, I would like to now address the classification structure for customer service administrative and salaried staff which I know Mr Harvey will address in some detail later but it is the other point of contention between the parties.

PN129

We would say that the existing classification structure is allowable when considered in terms of section 89A of the Workplace Relations Act which I am sure you are familiar with and which indicates that rates - sorry, Commissioner, classification for employees and skill based career paths are an allowable matter and that is identified at section 89A(2)(a). We say that the classification structure in the existing award has been properly established, has been able to be stripped back to minimum rates and so it meets the requirements of the WROLA Act governing the simplification of awards with which I am sure you are familiar, Commissioner.

PN130

I guess principally that the WROLA Act provides that the Commission must include in award provisions that ensure overall entitlements to pay provided by the award are not reduced, that the award does not include matters of detail or process that are more appropriately dealt with by agreement at the workplace or enterprise level, doesn't prescribe work practices which restrict or hinder efficient performance of work and doesn't contain provisions that have the effect of restricting or hindering productivity. So we would say that the retention of the existing classification structure in the award is the prima facie, I guess, position that the Commission should look at in considering the positions of the parties in relation to this matter.

PN131

We say that the award simplification exercise should not be used to insert variations into the award of significance and we believe that the position that the ASU are putting or will put is one that is a significant variation to the award. If I could perhaps just address the issues that the ASU has indicated or has foreshadowed it will be talking about in its submissions this morning and there are a number of them and I will just list them off and then address them one by one, Commissioner. The first argument is that the classification structure is no longer in use because it has been superseded by the certified agreement.

PN132

The second one, that there is no proposal that the award structures for customer service administrative and salaried staff should be reverted to. They say that the structures are obsolete. They say that the structures do not provide a safety net because they are not relevant to the way in which work is organised within the organisation. They say they are contrary to the objects of the workplace relations act and Item 51 of the WROLA Act and therefore they shouldn't be retained in the award. They say that the structures and descriptors are meaningless. They say that restructuring the classification structures would be time consuming and for no purpose. They say that there is no simple solution to the conversion process.

PN133

They say that the rates in the enterprise agreement could be converted to appropriately fixed minimum rates in accordance with decisions and principles of the Commission and they also say that the incremental structure in the agreement should be - enterprise agreement, should be retained in any structure dealing or covering customer service administrative and salaried staff in the award because they are not automatic, they are based on the acquisition and use of skills and they are fixed in accordance with principles and decisions of the Commission and the relevant legislation.

PN134

So, Commissioner, I would like to speak to those issues if I could now. The first one is that the classification structure is no longer in use because it has been superseded by the enterprise agreement. Australian Air Express's position is that the thrust of the legislation governing award simplification is that it is to strip back the award to allowable matters, one of which is classifications, and to ensure that there are not matters of detail and process that are more appropriately dealt with by agreement at the workplace or enterprise level contained in it and that reference is to Item 51(6) of the WROLA Act.

PN135

We would say that it is very clear that from the provisions of both the Workplace Relations Act and the WROLA Act that there has been recognised a need for two structures to run in parallel, one being the safety net of minimum terms and conditions and the other being conditions and terms which are fixed at the enterprise to accommodate situations and circumstances which apply in the enterprise at a particular time. We would say that the way in which the classification structure is contained in the enterprise agreement which the company have is entirely appropriate because it does deal with matters of detail and process at the enterprise level and consequently complies with the provision in Item 51(6).

PN136

In relation to the second position or argument that the ASU have put in their argument that the existing award classification structure should not be retained, they have said that there is no proposal to revert to the award classification structure and because it is not used it should be removed. I guess again we would say that the classification structure is allowable. It does provide the foundation for the classification provisions within the enterprise agreement and I don't think that any parties can say definitively that it will not have application in the future.

PN137

My understanding is that it has had application until fairly recently, until the current, in fact, the current round of enterprise agreement negotiations resulted in agreements which contained new classification structures and consequently we would argue that the award classification structure has had application until that time. The third point that the ASU have made in their submissions is that the structures are obsolete. We would suggest to you that they are in fact not obsolete. They are providing an appropriate minimum standard of pay rates for people within Australian Air Express and I would also say to you that it is not unprecedented for there to be big differences between the classification structure in awards and in enterprise agreements and, Commissioner, if I could I would take you to the documents behind tab 13 of the - in the folder.

PN138

THE COMMISSIONER: 13 or 12?

PN139

MS FIELD: 13, I think, Commissioner. No, 12; beg your pardon. Sorry, you are right. Commissioner, these are extracts from the Melbourne Water Award 2000. If you have a look at that document at clause 13 which is on page 13 you can see that the salary or the classification structure is a fairly clearly defined one which deals with administrative and technical employees, plant service technicians, metal trade supervisors and technical professional staff and then other people who look after their treatment plants. If I could ask you to compare that with the structure which is in the Melbourne Water Corporation Enterprise Agreement 1998 which was struck and had application until after the making of the Melbourne Water Conditions Award you can see that the actual classification structure in the enterprise agreement is very different. It is a skill band based structure.

PN140

So while Mr Harvey may argue, and I don't want to pre-empt him, but he may well argue that there should be some change to the structure in the simplified award for customer service admin and salaried staff, we would say that there is no need for that to occur. We would say that in the Melbourne Water Award that did not occur. I am aware that the Melbourne Water Award was made by consent, that a simplified award was made by consent, however Commissioner Simmonds examined the draft of the simplified award very carefully and had he been of the opinion that the salary structure was obsolete then I am sure he would have done something about it and not agreed to have it inserted in the Melbourne Water Award 2000 when it was made.

PN141

The next point that the ASU have foreshadowed is that the structures in the award classification structure do not provide a safety net because they are not relevant to the way in which work is organised. We would say that it does provide a safety net because it continues to be adjusted for safety net increases. Through the simplification process it is being converted to minimum rates which means it more truly is a safety net and consequently, given that it is a true safety net in our view, there is plenty of opportunity for the parties to negotiate arrangements over and above that which suit the enterprise at any given time.

PN142

The next point raised by the ASU in their submissions is that the retention of the salary structure for these three streams of employees at AAE is contrary to the objects and provisions of Item 51 of the WROLA Act and the Workplace Relations Act. We would say it is not contrary to the objects. We would say that it complies with all parts of Item 51(6). As I have already said matters of detail or process are not included in it. In fact those are being dealt with through the enterprise bargaining process at the enterprise level. The classification structure does not hinder or restrict productivity or the efficient performance of work.

PN143

So we would say that retaining this structure within the simplified award is going to have no adverse impact on the operation of the organisation and consequently we say it does in fact comply with Item 51(6). Mr Harvey has also indicated in his submission that he believes that the retention of these structure contravenes Item 51(7) of the WROLA Act, principally in relation to the requirement that any simplified award should be easy to understand in structure and content and we would say that in fact it is not difficult to understand the structure that we have inserted in the draft award. It is very very straightforward.

PN144

Rates have been fixed, properly fixed, for each of the classification levels and it is pretty straightforward. We also say in relation to the argument that it is obsolete that - we have probably already said enough on that point - but we say that there is a need for it to be there in the form that it is in because it is a true safety net for employees operating at Australia Air Express and it is appropriate that it remains in there in its current form because it is in fact indicative of the foundation awards from which the '94 consolidated Australian Air Express Award was made and I think that there needs to be some link between one and the other.

PN145

The next point that the ASU have raised is that the classification structure as it currently stands contains a significant number of classification and job descriptors and levels which are meaningless. We would say that if the ASU feels that that is the case then it has the option to make an application under section 113 of the Workplace Relations Act to vary the award. We say that the simplification process is not an appropriate vehicle to introduce significant new provisions such as a new classification structure, but rather the major focus of the simplification process should be on the removal of non-allowable matters and we would say that that is in fact what we have aimed to do in this process.

PN146

The next point that the ASU have made is that restructuring would be time consuming - restructuring the classification structure would be time consuming and for no purpose and we would agree with that. We believe that there is - that restructuring the classification structure would be extremely time consuming and particularly as there is no need for it to happen because there is a perfectly good classification structure in the award as we have drafted it. The next point they have made is that they believe that the enterprise agreement structure should be inserted into the award.

PN147

We oppose that proposal very strongly. We say that that proposal is contrary to Item 51(6) as I have already outlined above in that it would put into the award things that are much better dealt with at the enterprise level and to me that is a basic contradiction of the principles behind the simplification process and we say that it would therefore be entirely inappropriate. We also - sorry, the next point that the ASU have made is that the rates in the enterprise agreement could be converted to appropriately fixed minimum rates.

PN148

Again we oppose this proposal on the basis that incorporating the EBA classification structure into the award is, firstly, contrary to the principles of the WROLA Act in relation to simplification as I identified a moment or so ago and, secondly, it is not required. The second point is - the second reason for our opposition is that we believe that it is not the purpose for which the simplification exercise was designed. The third point is that we believe that such an action would be contrary to section 95 of the Workplace Relations Act which sets out the limitations on the Commission's powers to include enterprise based terms into an award. We would also say that if one looks at section 95 it says specifically that:

PN149

The Commission does not have power to include terms in an award that are based on the terms of the certified agreement unless the Commission is satisfied that including the terms in the award would not be inconsistent with principles established by a Full Bench that apply in relation to determining wages and conditions of employment.

PN150

And (b):

PN151

Would not be otherwise contrary to the public interest.

[11.40am]

PN152

We would say that if the ASU wished to pursue this matter then because no principles to our knowledge have yet been established in relation to the flow-on of terms from certified agreements into awards we would seek a reference to a Full Bench to deal with the matter. Again we would point out that the ASU always has the option of seeking an award variation through a section 113 application. The final point that the ASU have made in their submission, which I want to comment on, is that the award classification structure should retain the EBA incremental structure.

PN153

Again we would oppose that. We say that no incremental structure should be included in the safety net award which is what we are aiming to make as a result of this process. We would say that if there is a basis for increments to be developed and used at the enterprise level then that is a perfect example of the sorts of issues which should be dealt with at the enterprise level and that they are therefore inappropriate to be incorporated in an award. The introduction of increments on the basis suggested by the ASU we say would be enhancing the award provisions and again that is not the object of the simplification exercise in our submission.

PN154

We believe that the exercise is there to make the award as simple as possible. We would also say that the suggestion that the incremental structure be included in the simplified award for customer service officers administrative staff and salaried staff differs from the situation dealt with in the paid rates supplementary decision, print SO105 where the Bench was looking at the retention of increments for nurses but in that case the Full Bench decided to retain increments for nurses on the basis that their view was that the increments were based on work value.

PN155

So we would say that the ASUs argument in relation to, firstly, the insertion of the EBA classification structure into the award and, secondly, their desire to have it also include increments really goes against both - well, two principles laid down by the Full Bench. Firstly, that there shouldn't be increments in awards unless they are work value based and, secondly, that the provisions of the Workplace Relations Act really are going to be, I guess, undermined by such or the incorporation of such a structure in that it puts back into the award detail which currently doesn't exist in the award and that is dealt with in the WROLA Act.

PN156

Commissioner, that, I think, brings me to the conclusion of my submissions in relation to the ASUs position. The TWU have also flagged a number of issues in their submission to you and, no doubt, Ms Tisdale will expand on those. The ones that I wanted to comment on are, firstly, that they have submitted that the increments are part of an integrated classification structure which is part of a comprehensive reward structure based on recognition of work value. Now I am not quite sure where they derive the evidence for that but we would say that as far as we can see there is no evidence in the airline operators structure that in fact indicates that the pay points are or moving - employees' ability to move from one pay point to another is dependent on the achievement of certain goals, certain targets, acquisition of certain skills.

PN157

So we say that that point really is not founded on any evidence. The next point that I wanted to comment on was - sorry, Commissioner, I just need to have a quick look at it - that they have drawn some comparison between the classification structure in the enterprise agreement and what should occur in the award and we would say that that really isn't the issue at hand. We are here to address the form of award that should be made as a result of the simplification process and we don't really see how the EBA incremental structure is linked to the award, any award incremental structure. As far as I am aware the award incremental structure is there and is progressed through by expiration of time and consequently is a structure that should be removed because it is not work value based.

PN158

At point 9 of their submission the TWU have said that increments within - that increments are based on recognition of employees' overall capacity - I am sorry, competency level during each 12 month period and I am not sure that I can actually agree with that because within the award, as I have already said, there appears to me to be no relationship between the salary points and achievement of goals and acquisition of skills. At point 10 of their submission they have indicated that the increments reflect the company's requirements in respect of training and career progression.

PN159

We would say that that is not directly linked to work value and consequently we don't believe that that is a valid argument to raise in relation to why increments should be retained within the simplified award. At point 11 they have indicated that the removal of an incremental salary structure would mean substantial reduction in wage rates associated with the work value as it is reflected currently in the rates of pay. We would say that in fact the rates of pay which are applicable to employees at Australian Air Express in the airline operators area are fixed through an enterprise agreement and so that the award rates really are not an issue.

PN160

People are already earning in excess of what is contained in the award and the award is consequently a proper safety net for those people but in terms of arguing that there is going to be some disadvantage to employees by the removal of increments, we would reject that position. The final point of theirs that I would like to comment on is that the TWU have said that the award simplification principle is not intended to result in a reduction in terms and conditions of employment under the award and we would say that we certainly - there will be no intention that that will happen. We have already made the commitment this morning that the intention from AAEs point of view of the simplification process is that it will be a true and proper safety net and that people will not be disadvantaged as a result of the process.

PN161

In addition apart from our, I guess, commitment in relation to that we would say that the EBA is the instrument that actually governs the terms and conditions of employment on a day-to-day basis for people in Australian Air Express. Commissioner, that brings me almost to the conclusion of my submission in relation to the simplification of the Australian Air Express Award. We would say that there is every argument for the Commission to remove the increments as they exist in the award currently because there is no evidence that they are work value based and because the guidance provided by the Commission's Full Benches in this matter says that those should not be retained - increments should not be retained unless they are work value based.

PN162

In relation to the classification structure we would say that it is inappropriate for any new classification structure to be inserted in the award as part of this simplification process. We do not agree with the position that the ASU have outlined that they believe that it is an inappropriate and obsolete structure. We say that it still has relevance as a safety net and consequently should be retained. We would also say that the simplification process should not be used for major changes to the award. Consequently I would be asking that you make the award in the terms sought as contained in the draft award which we handed up earlier this morning. If the Commission pleases.

PN163

THE COMMISSIONER: Thank you, Ms Field. I think we might at this stage take a 10 minute break. The Commission stands adjourned.

SHORT ADJOURNMENT [11.53am]

RESUMED [12.08pm]

PN164

THE COMMISSIONER: Mr Harvey, how long do you expect to be? I wouldn't want to stop you in full flight, you see. I am happy to have an early lunch break if that would suit the unions, that is all.

PN165

MR HARVEY: When would you be thinking of doing that, Commissioner, because - - -

PN166

THE COMMISSIONER: Well, I can have it now till one o'clock or 1.15, it doesn't matter.

PN167

MR HARVEY: Well, I am easy, Commissioner, but I will certainly take - I will be going over the lunch break for sure.

PN168

THE COMMISSIONER: Then I think we might have an early lunch break and I can finish the unions together. So we might adjourn now until 1.15 and go from there. The Commission stands adjourned.

LUNCHEON ADJOURNMENT [12.09pm]

RESUMED [1.16pm]

PN169

MR HARVEY: Yes, thank you, Commissioner. Sorry, Ms Field wants to say one thing.

PN170

THE COMMISSIONER: I am sorry.

PN171

MS FIELD: That is all right, Commissioner. Commissioner, could I just flag that Mr Andreacchio has to leave at 2 o'clock and so would you mind if he slips out at that time?

PN172

THE COMMISSIONER: No, not at all. He can go now if he wants.

PN173

MR ANDREACCHIO: No, I wouldn't miss it for quids.

PN174

THE COMMISSIONER: Yes, Mr Harvey.

PN175

MR HARVEY: Yes, thank you, Commissioner. I have handed your Associate a bundle of documents which I think she has given to you. If everybody would mind not looking at that just for a minute and in just a minute I will take everybody through it at the same time. So just we know what we have in front of us and I apologise for being not quite as organised as Ms Field and putting it all in a folder and suitably tabbed but having had the opportunity of an early lunch break, Commissioner, I have sort of organised myself a little better and I hope as a result of that I will get through this as speedily as possible.

PN176

THE COMMISSIONER: Your workload has increased, has it? You haven't got enough time?

PN177

MR HARVEY: Yes, well, Commissioner, award simplifications are a mixed blessing - it is a mixed curse; it is one of those. I know lots of this is not very exciting or interesting to the Commission or the parties even and if Mr Reith had a reason for it I still can't figure it out. It is ideologically inspired drudgery in the most case which doesn't have much meaning or result for employees or enterprises. But I think, Commissioner, and what I want to do in opening these submissions is just to say, though, that I think that we have an opportunity here to actually, you know, do something worthwhile with the award simplification process as it applies to the Australian Air Express Award because - so this is something perhaps we could get a little excited about and stay awake all of us for the afternoon or much earlier than that if we can.

PN178

There is really - the Commission is really only being asked to effectively decide two or three fundamental issues but unfortunately, Commissioner, you are, I think, as a result of the submissions that are being put that you are going to be asked to decide these issues but even though the detail, which we will go to in a minute, is complicated in some respects I think the fundamental issues, as the ASU sees them, and I think the TWU shares the same point of view, is this or are these, Commissioner. Firstly, should we retain in this award the existing classification structures (plural) or not. So that is the first question because what the ASU has said and the TWU as well is that we think that we shouldn't retain the existing structure, we should insert a new structure and our proposal is that we should insert the structure that currently operates in the agreements which support this award rather than retain the existing ones.

PN179

So that is the first and relatively simple issue and that is the question which I think we could, you know, probably get a bit excited about, Commissioner, because we think, and I hope it will emerge as we go through, we think there is some good reasons to ditch the existing structure. If it had a purpose it has served that purpose and we need to move on with a modern structure which serves the needs of both employees and the employer in this case so we have something positive and useful that we believe that we could do.

PN180

The second question would be, Commissioner, if you decide that, you know, the existing structures for whatever reason need to be retained then there is one or two subsidiary questions which would need to be dealt with in any such decision. That is, firstly, as far as the clerical admin and salaried structures go, Commissioner, is what is the key classification rate in this award for determining what the properly fixed minimum rates of pay would be and again here we have a reasonably clear cut choice to make. Ms Field, on behalf of the company this morning and in her written submissions, has said it should be level 3 and the Australian Services Union says it should be level 2 and I will go to that in a minute.

PN181

Once the key classification rate is established we then have to work out how those minimum rates are to be determined. Ms Field has taken you to some extensive tables on that this morning and I hope to do that also briefly this afternoon. The other issue in either case, if a new structure is to be inserted or if the old structure is to be retained there is a third issue which will need to be determined by this Commission and that is whether increments that are in the existing structure, existing award, should be retained or if a new structure is inserted whether that new structure should also have increments and if so on what basis.

PN182

We would say, and what we have said in our written submissions, Commissioner, is that it is appropriate - sorry, it would be appropriate I think for the Commission if it makes a decision, as we suggested it should, to go with a new classification structure we would think it would then be appropriate for you to indicate that to us by way of an interim decision if you like and direct us to go away and think about how properly fixed minimum rates of pay might be attached to that structure because we would say it is within your power - it is within the power of the Commission to update this award by putting in a new classification structure appropriate to the needs of the enterprise and the employees but if that was your decision, Commissioner, I think the parties would probably appreciate an opportunity to confer and do a minimum rates type process on the agreement structure if that is the way we go at the end.

PN183

There may be also a possibility that you might want to direct us, Commissioner, to sort of consider further the minimum rates or the fixing of the appropriately fixed minimum rates process depending on how you rule on either level 2 or level 3, at least as far as the ASU classifications go, particularly because of the sort of complicated nature of the process of three classification structures as I will go into in the ASU areas and some at least doubt I have in my mind about the processes that Ms Field has outlined today about how in those spreadsheets that she has handed up how it all actually operates and on what basis it has operated.

PN184

So those are the key issues that we need to grapple with or unfortunately, Commissioner, you are going to need to grapple with in your decision but I think the parties remain willing to assist either today or a later date to try and narrow any areas of agreement if the Commission can give us further guidance on how you see this matter. Now, Commissioner, if I could turn to that bundle of documents just briefly and what I thought I might do, Commissioner, is just go through and just sort of say what they are and basically why they are there and then I will refer back to them as we go but some things will become obvious as we go through.

PN185

Commissioner, the first document in your bundle should be award 768636 which is the Airline Operations Clerical and Administrative Award 1999. Ms Field has already provided you with an extract of this this morning, Commissioner. Now this is, this used to be known in the trade, Commissioner, as the Ansett Award even though it is configured as the, sort of, airline operations generally. Well, by now there are effectively only two organisations covered by it. One was Ansett Airlines before its unfortunate demise and the second one is and still remains a somewhat obscure organisation called the Society Internationale de Telecommunication Aeronautique - which just proves that I am working on my French, Commissioner.

PN186

They were a respondent and are a respondent to the award but the award has had a number of other respondents in the past, one of which was of course Australian Airlines and this award was also previously known effectively and by name, I think, as the Clerks Domestic Airlines Award and covered by Ansett and Australian Airlines - TAA then Australian Airlines before Australian Airlines merged with Qantas. So this is the award which previously covered employees of Australian Airlines who went over to Australian Air Express when that organisation was created in the early 90s.

PN187

Now the only really significant thing about this award for current purposes, Commissioner, is to point out to you that it has two classification structures in it. The first one appears at clause 18, which is on page 11, and if you look at that, Commissioner, you will notice the very first line says:

PN188

The following classification structure applies to Ansett Australia and Ansett Air Freight.

PN189

As I said Ms Field has given you an extract of that - I think it is page 13 that she effectively gave you - but the full classification structure there as it applied to Ansett is in it. The second classification structure appears at schedule A which, on my copy, Commissioner, is page 46-2, it says - yes, page 46, which is the provisions applicable to SITA but the classification there is actually the old Australian Airlines classification structure. It doesn't say that any more but that is it because - - -

PN190

THE COMMISSIONER: Who were they?

PN191

MR HARVEY: Sorry?

PN192

THE COMMISSIONER: Who were they?

PN193

MR HARVEY: Which? SETA?

PN194

THE COMMISSIONER: Yes.

PN195

MR HARVEY: You see it on the side of some buses but it is not them; it is - no, it is not a "who were they". This organisation still exists. As far as I can understand, Commissioner, they are some sort of worldwide sort of inter-airline reservations booking company which is how they managed to get roped into the domestic airlines award. They still exist; they are based in Sydney and every time we vary this award we usually forget to tell them but they are still there. The only point is about this, Commissioner, is that that classification structure applies to them now and nobody else but that is, as you will see in a minute, the old Australian Airlines classification structure.

PN196

It was brought into this award as a special appendix at the time and applied to Australian Airlines and then that classification structure got picked up by the Australian Air Express Award as applying to the customer service and admin staff in the Australian Air Express Award. So that is the relevance of that particular bit of history.

[1.30pm]

PN197

The second document in the bundle is simply the award simplification decision in what was still then known as the Clerks Domestic Airlines Award. It is the heading - so the award is now the, as I said before, the Airline Operations Clerical Administrative Award 1999 but this decision, I hope I am right, is the review of the award as far as - or a couple of things: obviously part-time work or - there is a couple of outstanding matters: part-time work which is referred to in the early pages and on the last page it goes to, at paragraph 12 it mentions that:

PN198

The review has also been conducted under the paid rates decision.

PN199

And then at the last paragraph, paragraph 13, it says in the last sentence:

PN200

When varied the rates contained in this award will be properly fixed minimum rates.

PN201

So that award has actually been through the simplification process and the paid rates conversion process and although it doesn't sort of say so on the face of that document, Commissioner, that is the award which is now the Airline Operations Award which I will just tender. So Commissioner Wilks has done the exercise for that award. Just going back to the history lesson, Commissioner, the next document in the bundle - the next bundle should be a bundle of photocopies with a paperclip on them.

PN202

THE COMMISSIONER: Yes.

PN203

MR HARVEY: Which is the - the first one of those is the original roping-in award which roped Australian Air Express as you can see in clause 2, parties bound, into the Salaried Staff Australian Airlines Award 1990. So that is one of the - this is one of the awards that was superseded by the Australian Air Express Award when it was made. The second part of that bundle is, at least in mine, it is the one dated 4 May '92. Is that right?

PN204

THE COMMISSIONER: Yes.

PN205

MR HARVEY: Commissioner, that is that Salaried Staff Award as it appeared in '92 when it was still called TAA Award although it changed its name by that order to Australian Airlines Salaried Staff and I just note or draw the Commission's attention to clause 6 of that special provisions as to salaries and increments and at 6(b) the award reads:

PN206

Notwithstanding any other provisions of this award the employer may, for reasonable cause, withhold any increment or portion thereof from any officer on completion of any year of service in the salary range to which he has been appointed provided that notice of such intention and the reason therefore shall be given to the officer affected in writing within 14 days after such increment or portion thereof would have otherwise become due.

PN207

And there is a dispute settling procedure. So that - the other thing to note in there, Commissioner, just for the record seeing it looks like you are going to have to decide this is that the - clause 7 just sets out the salaries of the salaried officers covered by this award. There is no descriptors there and at appendix A which we have also attached there is five levels, (a) to (e), of departmental managers, again no classification descriptors. The last part of that bundle of documents, Commissioner, is a previous decision by Commissioner McDonald and it is headed up there, Wages - National Wage April 1991, Structural Efficiency Principle, which at point 4 there inserted a new structure for grades 1 to 6 and three senior officer grades and then again on the last page of that there is the branch and departmental managers structure.

PN208

So that is how they appeared in the original award which was then imported as we will see in a tick into the Australian Air Express Award. There is also a little folded - the next one should be a little folded document, Commissioner.

PN209

THE COMMISSIONER: Yes.

PN210

MR HARVEY: Which is the 1991 decision by Commissioner Maher which again relates back to the Clerks Domestic Airlines Award which is the structural efficiency decision in this award of '91 inserting a new appendix part 4 or in appendix part 4 which is the one that applied to Australian Airlines. It deleted clause 3 and inserted a new classification structure and rates of pay and the rates of pay are on pages 1 and 2 and then a classification structure has been inserted there. It goes over several levels and there is two of them. The first one starting on the bottom of page 2 is the customer service structure and the second one is the administration classification structure which starts on page 13.

PN211

That is the structural efficiency decision in the old Australian Airlines structure in a Clerks Domestic Airlines Award and it is a skills-based structure and goes through all the skills that people would be required to use at various levels. There is one thing I particularly want to draw your attention to, Commissioner, and that is at page 28 which is right towards the back of this. That particular variation also inserted a new clause 3(a), performance increments, which says:

PN212

Performance increments will be available within levels 3, 4, 5 and 6 of the customer service salary structure and levels 1 to 6 in the administration salary structure.

PN213

It says at (b):

PN214

Increments shall be paid to employees who have completed 12 months of satisfactory performance within an eligible level. (c) Satisfactory performance will be assessed by means ...(reads)... or monetary value thereof shall not apply.

PN215

I am not sure what that means but it does indicate reasonably strongly, Commissioner, that the performance increments which were built into the original classification structure applying at Australian Airlines and which was imported into the Australian Air Express Award was (a) based on the structural efficiency principle which I think Ms Field has already mentioned this morning but, secondly, the performance increments were not automatic in any way shape or form at all and not only could they be withheld, they could be withdrawn, and they were based on satisfactory performance measured by individual staff appraisals which we think is significant.

PN216

The next item in the bundle, Commissioner, is simply the existing Airline Officers Qantas Airways Limited Award 2000, clause 15, classifications and rates of pay. Now just a word of explanation, I think it has been mentioned this morning, but the Airline Officers Qantas Airways Limited Award is relevant for this reason, Commissioner. This is where you would now go to find obviously the Qantas classification structure but it is where the old salaried, Australian Airlines salaried structure effectively ended up as well because when Australian Airlines and Qantas merged ultimately one award was created to cover both the clerical and the salaried staff employed by the combined airline and so the Airline Officers Qantas Airways Limited Award was created which brought together the clerks and the salaried employees.

PN217

Ms Field has taken you to what is otherwise said in that award this morning about how people got classified which was basically not much and talks about what was in place prior to the classification structures coming in and being continued to be used and I won't repeat what Ms Field said about that but it is also in this extract at 15.8, I think, and 15.8.2 in particular says:

PN218

Provision of the continued appliance of this award has been varied to include appropriate definitions which describe the qualifications, experience, duties and responsibilities.

PN219

So a bit of an odd situation but we have had one or two odd situations in industrial relations, Commissioner, where this award was actually restructured, simplified, converted to minimum rates with no descriptors in it but I will come back to that but what Ms Field said about what it tells you about how somebody got into it is there and it is not much. The next document in the bundle which should be the, what I am calling the Qantas structure, the airline officers structure, and I have to say I discovered this at about 7 o'clock this morning, Commissioner, and I gave a copy of it to Ms Field before we commenced this morning but this is apparently the structure which has now, in March this year, just a few weeks ago, been put into the Airline Officers Award, the Qantas Award, which provides the grading structure which people have been working on in the ASU and Qantas since 1996 in fact and they have finally done it.

PN220

But I would say right here and now, Commissioner, that if Ms Field wants to check this I would be happy for her to have the time to do it. I know Qantas is one of the owners of Australian Air Express and this information has probably been available to the company if they wanted it but it is not on the - I can't give anybody a Commission print of this, it is just from our internal records, and I believe it to be the case. But they have just done it and it should hit the official records any time and I will come back and just make one small point about it and I am happy for Ms Field to say whatever she would like to say about it as well.

PN221

The next item in the bundle, Commissioner, is just a decision, Clerks Breweries Award, an award simplification decision of his Honour Vice President Ross from 1999. I will come back to this in a minute, Commissioner, but it is - I use it not only because I was a witness in this case so I remember it with fond memory, but his Honour Vice President Ross did a couple of things in that decision. One, he set out in a very easy to read and understand way how to go through the paid rates conversion process but he also considered in detail what the key classification was in that particular award and used a methodology which I am going to use myself in a minute with regard to the award we have got in front of us.

PN222

So I will rely on that but also on his method of fixing properly fixed minimum rates. The next document, Commissioner, which again I will come back to is - it is headed up, Admin Structure Reworked, in my handwriting which is an attempt I had to rework the figures that Ms Field has provided and taken us to this morning with regard to the administration part of the structure in the award under review and which I think follows precisely Vice President Ross's procedure and I will come back to that. The second last document is simply the Victorian Clerical and Administrative Employees Victoria Award 1999, an award of this Commission which has been simplified, and has an extensive classification structure in it at clause 16 at page 17 which is a skills based classification structure approved originally by the Victorian Industrial Relations Commission and subsequently adopted by this Commission.

PN223

I just point out at the moment that at 16.2.3 the grade 3 clerical officer appears and the "after six months experience at this grade" rate so there is an increment in it is 525.20 which, as we all know, is the C10 or the 100 per cent rate from the Metals Award. I will come back and say how the skills at grade 3 relate to the skills in the Australian Air Express Award. The final document, Commissioner, is simply the current enterprise agreement which I referred to in outline of submissions submitted by the union and which contains a classification structure that we propose should be inserted into the award. That is towards the back of the document, appendix A.

PN224

Now, and just one other thing, perhaps by opening submissions, Commissioner, Ms Field handed you a copy this morning of the Australian Air Express Consolidated Award 1994, that is as it exists prior to being simplified and I just want to draw your attention to a couple of things in that if you have got that, Commissioner, handy.

PN225

THE COMMISSIONER: Yes.

PN226

MR HARVEY: The first thing which I think Ms Field may have taken you to anyway, but clause 9 on page 6 in my copy - - -

PN227

THE COMMISSIONER: Yes.

PN228

MR HARVEY: The thing I just want to draw the Commission's attention to is subclause (a):

PN229

Positions shall be classified within the appropriate one of the structures applicable to the work prior to the making of this award.

PN230

And then when you go up the back of that award, Commissioner, to the appendixes which - - -

PN231

THE COMMISSIONER: Appendix what?

PN232

MR HARVEY: Well, the first one is appendix A, Commissioner, which is at page 30.

PN233

THE COMMISSIONER: Yes.

PN234

MR HARVEY: I think Ms Field probably took you through this but the first one there, part 1, is obviously the express courier classification structure. The part 2, which is on page 32 up the top, it says what I have already said in effect where it comes from:

PN235

The following classification structure is based on the definitions contained in appendix E part 1 which were contained previously in part 4 of the Clerks Domestic Airlines Award 1980.

PN236

C0027, which is the award which I handed up earlier as part of that bundle, Commissioner, and then half-way down again - that is for the customer service structure up the top and then sort of towards the bottom of the page we have got the administration structure and it also says:

PN237

The following classification structure is based on the definitions contained in appendix E part 2 which were previously in the Clerks Domestic Airlines Award.

PN238

Then if you turn over, Commissioner, to part 3, again it has just got the salaried staff classifications which again says are based on those applicable under the Salaried Staff Airlines Award 1990 but no - I point out on the way through that there is no definitions or anything there but if you continue over a considerable way, Commissioner, to - and you have already seen this this morning - but appendix E on page 59 has a full classification structure for customer service and later administration staff which is the one from the Australian Airlines structure. I think all of them pretty familiar by now.

PN239

So turning to our detailed submissions, Commissioner, trying to draw these threads together, Commissioner. I should say at the outset that obviously the Australian Services Union supports the part of the submissions that Ms Field has put on behalf of the company today that is with regard to all the rest of the award other than the classification structure and the rates of pay. Ms Field also mentioned a few - took you to a few particular clauses in the award and indicated why the parties had taken a particular view on those - that is clauses 14.1.5 regarding summary dismissal, clause 15 regarding redundancy, clause 25 on personal leave and we support her submissions on that and we support the making of a new award in all respects in accordance with the document that Ms Field has handed up except obviously that bit about the classification structures.

PN240

In fact, if you look at Ms Field's submissions which have been supplied to the Commission and to the parties I think it is fair to say that the ASU has little or no disagreement with those submissions until paragraph 23, Commissioner, so all the early parts are agreed but at paragraph 23 the submissions say that the key classification rate for, and now I am only talking about the classification structures in what I am going to call the ASU areas, Commissioner, I am making no submissions about the express courier ones or the TWU - Ms Tisdale will deal with those if necessary - but the company's submissions say that the key classification for the three salary structures in the ASU areas, that is the CSO structure, the administration structure and the salaried structure, is level 3, I think in the CSO structure.

PN241

However, Commissioner, I think it is fair to say that there is no evidence for this proposition that the key classification is level 3 and we say that it is wrong. I have taken you through what is in the existing award about classification structures, Commissioner, so you are aware of where they came from but what the company has said today in their written submissions at paragraph 23 is that the skills in the level 3 Airline Operations Clerical and Administrative Award which is the first one I drew your attention to and the level 3 in the Airline Officers Award and in the Australian Air Express Award are similar.

PN242

Ms Field expanded on that a little this morning and said the sort of the work or the type of work - the sort of work that was being done under those three different levels or, sorry, the level 3 in those three different awards are similar. But even if that was the case, Commissioner, that certainly doesn't prove that that is the key classification rate and in any case we believe that the company's submissions are wrong on both points, on the point (a) that the work is similar between those three awards and, secondly, that level 3 in this award is the key classification rate.

PN243

Now the Airline Operations Award, the old Ansett Award, as we have just seen, Commissioner, has two different classification structures. One which is as I have mentioned at clause 18 applied to Ansett and is - and at level 3 but the whole classification structure, if we need to go back and look at it but I am not suggesting we do, it is totally dissimilar from any other sort of classification structure. It is very generic, very very sort of loosely sort of skills based but the skills are so generic that it is very difficult to work out what anything means at any level of it and I know that from experience having tried to do a reclassification case based on that restructure.

PN244

So it is really quite unique, quite distinct and it was an outcome of a particular process. But we would say that the Ansett level 2, or, sorry, the old Airline Operations or Ansett Award level 2 is not similar to level 3 in either the Airline Officers, the Qantas Award or the Australian Air Express but the level, the - sorry, it not only is not similar to those other levels but it doesn't equate to the trade rate, the C10 rate; rather, level 2 does as I will show hopefully shortly. My second point was going to be, when I wrote this yesterday, Commissioner, that the Airline Officers Qantas Award doesn't have any descriptors and therefore, you know, yesterday's point, which is still somewhat valid today, is that no comparison could be drawn between what was in the Australian Air Express at level 3 and what was in the Qantas Award at level 3 because there were no descriptors absolutely so we are not sure how the company came up with that comparison.

PN245

There are now some descriptors which I am happy to go to and have a look at briefly later. The second point to make, Commissioner, about that is that the salary structure had no descriptors either so - not in the old award, not in the new award, not in anything - so no comparison was possible with work performed by salaried employees because there wasn't then any. So we say that we - that the claim that has been made by the company at paragraph 23 that the work is all similar simply can't be based on anything that is before the Commission because there are no comparisons that we can make with the Qantas Award or with regard to salary structure and with regard to the Airline Operations, if you are talking about the old Ansett structure, it is very difficult to make any comparisons with that at all but I will come back and say something about that in a moment.

PN246

But, Commissioner, we say, and to sort of try and demonstrate my case as to why we say that level 2 should be the key classification, I would like to start with the Victorian Clerical and Administrative Employees Award which we had a look at briefly earlier, Commissioner. So that is in that award at - if you have got that one - at page 19.

PN247

THE COMMISSIONER: I should have marked them, shouldn't I?

PN248

MR HARVEY: Yes, I know, sorry. It was about the second last one I handed up.

PN249

THE COMMISSIONER: Yes. Yes, I have it.

PN250

MR HARVEY: Clerical and Administrative Employees Victorian Award 1999 - the classification structure with regard to grade 3 starts at paragraph 19, clause 16.2.3, and I have already mentioned there, Commissioner, that the after six months rate there is 525.20 which is the C10 rate and we would submit that one of but not the only - that one of the key skill identifiers to establish the C10 rate in this award and all other - I am prepared to go out on a limb and say all other simplified and restructured clerical awards - is the skill which is listed over the page at 16.2.3(e), word processing, skill level 1, which starts off:

PN251

Use one or more software packages to create, format, edit, proof read, spell check -

PN252

blah, blah, blah -

PN253

and save text documents, eg, standard correspondence and business documents.

PN254

When this award was originally restructured the old Commercial Clerks Award in Victoria as it was had a sort of a mail room clerk, a general clerk and a stenographer type classification. In the first three levels of this award that sort of equates roughly to grade 1, 2 and 3. The grade 2 rate was a sort of a copy typist and a general clerk. It was the skill for word processing and stenography and what have you which got the C10 equivalent and you can see the secretarial skill there listed under the word processing one, Commissioner.

[2.00pm]

PN255

So we would say that that is the sort of - one of the key skill identifiers which establishes what the C10 rate is. But in addition to that if you then turn, Commissioner, and this is where it becomes slightly complicated, but I will try and - - -

PN256

THE COMMISSIONER: I think it is already.

PN257

MR HARVEY: It is. You can see why we need to get rid of this classification structure already, Commissioner.

PN258

THE COMMISSIONER: I can see that is your argument.

PN259

MR HARVEY: Yes, I am trying to bamboozle myself and everybody else just to prove that we need something else. If we go to - I don't really mind which one it is but we need to use the award that Ms Field proposes to put in - perhaps that would be, perhaps that will confuse everybody, Commissioner, but if I go - if we go back to the '94 award - - -

PN260

THE COMMISSIONER: The '94 - - -

PN261

MR HARVEY: Yes, this is the Australian Air Express Limited Consolidated Award '94.

PN262

THE COMMISSIONER: Yes, Consolidated Award '94.

PN263

MR HARVEY: Then we go to that classification structure I just took you to a few minutes ago, Commissioner, which was at page 59 from memory.

PN264

THE COMMISSIONER: Yes.

PN265

MR HARVEY: But first we need to go through - so the first one there is customer service skills and then we need to go through to find the administration structure which starts at page 70 and then we turn over to level 2, right - Commissioner, I have got this right fortunately, level 2, if we go down to - at the bottom of that we see word processing, skill level - - -

PN266

THE COMMISSIONER: Yes.

PN267

MR HARVEY: And it has got:

PN268

Able to use software packages to create, format, proof read, correct, print and save text documents, eg, standard correspondence and business documents -

PN269

which in effect the identical words that appear at 16.2.3(e) in the Victorian Clerical and Administrative Employees Award. In the Victorian Award there is some additional - there is an additional set of words but if you also go on to the next one, Commissioner, secretarial skill level, it says:

PN270

Able to take shorthand notes at 70 wpm transcribed with 95 per cent accuracy.

PN271

And if you look back at the Victorian Clerical Award as well it says:

PN272

Take shorthand notes at 70 wpm and transcribe with 95 per cent accuracy.

PN273

So it is the identical skill level. So on those two skills, if on nothing else, Commissioner, it shows that the grade 3 in the Victorian Award, on a skills basis, equals level 2 in the administration structure for Australian Air Express Award. It is not just those two skills, Commissioner, because if we look at machine operation which is the first one in level 2 of AAE Award, you know, operate micro personal computer, printing devices, etcetera, etcetera, it is very similar if not identical in its effective meaning to the Victorian Clerical and Administrative Employees Award. The only thing that is missing from there is computerised radio equipment. It is the - the keyboard typing which the AAE Award says:

PN274

Touch type at 40 wpm with 98 per cent accuracy.

PN275

The AAE Award says:

PN276

40 wpm with 90(sic) per cent accuracy.

PN277

The computer one is similar - I won't go through it all. The secretarial one, as I mentioned, is identical. The enterprise skills are identical which is:

PN278

Apply a working knowledge of the organisation's products and services -

PN279

etcetera, etcetera, that is identical. Info handling I would say was similar but in a slightly different context and business financial skills are similar. So I think, Commissioner, that if you line those two sets of skills up as Vice President Ross did in the breweries decision I think the Commission will find that on a skills basis that grade 3 in the Victorian Clerical and Administrative Employees Award equals very clearly without really any doubt at all grade 2 in the administration structure of the Australian Air Express Award. Now I should say that we shouldn't be surprised to find that there is this level of similarity between the two awards, Commissioner, because the Australian Air Express Award classification structure was a particular application of the structure that appeared in the old Commercial Clerks Clerical Employee Administrative Employees Victorian Award which is now the Federal award.

PN280

They took that structure and applied it to the airline industry in the case of Australian Airlines. They then tweaked it and added some things, as you can see, Commissioner, that it has got specialist airline skills in the AAE Award which don't apply obviously in the Victorian General Award because there were no airlines respondent to it but they have fleshed it out a bit for airlines but they haven't fundamentally changed the sort of - the other skills; they have added to it. So I think it is clearly demonstrated that grade 2 in the AAE Award is grade 3 in the big C and A Award on a skills relativity basis.

PN281

The comparison I have to say, Commissioner, with the customer service structure is not so easily done but - because, if we go back to that structure which is at page - sorry, the level 2 starts at page 60 of the Australian Air Express Consolidated Award. It is a very much sort of truncated structure. It has got just two - and on page 61 it has got two sort of main or two generic skills. One is a technical skill machine operation one which is able to operate micro personal computer, blah, blah, blah, and an industry knowledge skill, industry enterprise knowledge skill level and then you have just got one specialist one and then said something about point of entry and training but the only thing that I would really particularly draw your attention to at this point, Commissioner, is actually the bit in the specialist airlines skill levels where it says in the third paragraph there:

PN282

Carry out established procedures for baggage acceptance, passenger check-in and seat allocation and end of line transfers.

PN283

So in the airline industry obviously one job which is, sort of, absolutely common around the place, is passenger check-in and that is a sort of a key indicator of where that - where you can sort of align awards against passenger check-in. There is also specific stuff there which we can look up with regard to cargo acceptance as well which is more applicable to Australian Air. But that tells me that the level 2 in the customer service structure is a grade 3 job in the airline industry and, in fact, Commissioner, if you look at it - I won't go to it now, I am happy to do it if people want me to but if you go and have a look at that Qantas structure then you find that in that particular structure with the new skills and jobs and what have you that were put into that award that in that case grade 3 is the 100 per cent rate because that is where you will find that very same check-in function there which is grade 2 in the Australian Air Express Award.

PN284

But I would say that even though the comparison with the customer service structure is not as absolutely precise as I hope I have been able to show it is for the administration structure we would still maintain that the CSO structure at grade 2 is the equivalent of the key classification - is the key classification rate and the equivalent to C10. Therefore the ASU strongly submits in this matter, Commissioner, that level 3 can't be the key classification rate in this award. Level 2 is the only credible candidate and it is absolutely clear, I think, for administration and reasonably clear for customer service.

PN285

What it is for salaried I can't really say because there is no descriptors. I mean, I just can't say anything about that. So therefore we say that the parity should be between the level 2 rate and the fitter's rate in 1991 and that should be the basis of the comparison and any therefore exercise to properly fix minimum rates of pay, not level 3 as claimed in paragraph 25 in the company's submissions. There is a comment made by the company at paragraph 24 of their submissions also that - in the second half of paragraph 24 and I will quote it in full, talking about the minimum rates - sorry, the paid rates conversion process with regard to the Airline Officers Award, Qantas Award, and it says that that was done as it was by Commissioner Wilks and then goes on to say:

PN286

This does not appear to have occurred with the Airline Operations Clerical and Administrative Award 1999 and consequently that award is inappropriate to use as a comparator when we are seeking a correct alignment with a trades grade for customer service administrative and salary classifications in the AAE Award.

PN287

And I have already handed up the decision of Commissioner Wilks where he said he had done that process, but I am not - we are not hanging our hat on whether the - with one little exception, something I will say later on, Commissioner - with regard to the comparison with the Airline Operations Award rates as such. There is one thing that I would just note while I am on the subject of the - talking about the Qantas Award, that the grade 3 rate there which we can see is where the - where customer check-in occurs if we need to go to that, the full descriptors.

PN288

The properly fixed minimum rate in that area as fixed by Commissioner Wilks, I think it was, is $29,046 and I will come back and mention that figure later. So we say, Commissioner, if you go through the exercise which I have done in sort of shorthand fashion that follows precisely the skills based type comparison that his Honour Vice President Ross did in the Clerks Breweries Award you will end up with a view, we believe, that the grade 2 rate is the C10 rate and that is where the anchor should be. Now Ms Field this morning and in her submissions says that some 108 per cent parity was established back in 1991 or at some point but we don't actually have any evidence of that and I am not exactly sure what that means, Commissioner.

PN289

I think Ms Field said this morning that it was her instructions that that parity was established. Part of me seems to like that figure of 108 per cent because it seems to be more than 100 per cent but I am not exactly sure and I can't support and nor can I sort of prove that it is not right. But I should say at this point that having gone through in some detail the material presented by Ms Field this morning I don't understand it to be perfectly honest, Commissioner, and if I do understand it I think it is wrong; to the extent I do understand it I think it is wrong. There is one significant thing, I think, worth noting at the outset but if you look at Ms Field's submissions, Commissioner, and in particular tab 7 or especially tab 7 - - -

PN290

THE COMMISSIONER: Yes.

PN291

MR HARVEY: The first one of those - the first document under that is the customer service classification conversion from paid minimum rates and this may well be okay except that we are saying obviously that the comparator and the key classification level is 2, not 3, and that would of course change all the figures upwards but apart from that it appears to be more or less right inasmuch as, you know, the 100 per cent level is shown there and if the figure on the far right-hand side, 29,045, you know, is right - it actually is $1 out from the level 3 in the Qantas Airline Officers Award although I must say - no, that has the 2002 rates in it - so there is an alignment there but we would still say that it is - on the basis of both a comparison with the Qantas Award and what is in the Australian Air Express Award the level should be level 2 therefore those sums should be re-done with that 100 per cent level showing against the level 2.

PN292

The more confusing or difficult to follow document is the second one which is the conversion of the administrative and salaried staff classification structure because if you look at that, Commissioner - well, for a start there is no 100 per cent level. There appears to be a 99.96 figure at level 3, if you are looking at the very middle column. It says a relativity to level 3 but I am not sure why it is that but the fact is that if you take that level 3 rate, you know, out to the right-hand side the appropriate level 3 rate is said to be 27,302 whereas on the previous document the level 3 rate is $29,045. So I am not exactly sure what the company's submission on that point is.

PN293

That if all these - if the key classification level is 3 as they say how can you have an outcome for the two level 3s which are, whatever that is, nearly $2000 apart. So I think, as I said, to the extent that I understand it the first one doesn't look too bad in terms of its logic; the second one somehow appears to be wrong and I don't think it is an outcome that the Commission could endorse to have two rates which are said to be the same or similar work and to be the key classification rates and to be $2000 different. So there is something there that I simply don't understand, Commissioner, and I suspect there is some flaw in those masses of figures on that second page.

PN294

The other thing I should say about all that is of course the logic behind the second half of that big table which is all the salaried classifications is that they are just apparently somehow related back to that level 3 and I am not exactly sure whether that is right either but there is no sort of independent anchoring point on that. I presume it is just the old rates converted by a percentage but again given that we don't know exactly how the salaried classifications were established we don't really know whether that is a valid way of doing it or not and given that it was a different structure from a different award I am not sure that we can just extrapolate from the Domestic Airlines Award straight into the Salaried Award.

PN295

Anyway there is that issue and the other thing that I am not sure about, Commissioner, is that those figures that have been used at tab 7 by the company for the 1991 rates don't appear to exactly line up with what is in the - for the admin and CSO rates with what is in print J8302 which was the decision of Commissioner Maher with regard to structural efficiency and rates of pay back in 1991. So to the extent that the figures on the left-hand side of the page starting off with the - going outwards are the 1991 figures, they don't appear to be the same as the 1991 figures in this document so I am not sure exactly how that was arrived at and I don't think we can rely on that table.

PN296

We would need, I think, at the very least, Commissioner, if you were minded to continue to use these rates of pay, to revisit that. Not only we would say for fixing the proper key classification of 2 not 3, but also to re-work that and make sure that we are all happy with the way that works because there seems to be a fundamental difference between that and the customer service outcomes. The customer service outcomes of course have no residuals because, as Ms Field pointed out this morning quite correctly, that that process that she has entered into or the company has entered into have raised the minimum rates but in the other structure they have significant residuals. So we would need to work that out if we were going to go down that path.

PN297

So in order to try and get my head around this hopefully and hopefully yours, Commissioner - - -

PN298

THE COMMISSIONER: You have had a lot longer than I have to get your head around it.

PN299

MR HARVEY: Yes, I know.

PN300

THE COMMISSIONER: The amount of times it has been in conferences.

PN301

MR HARVEY: Yes, well, that is true but we couldn't reach agreement on this bit, Commissioner, so perhaps we haven't spent as much time in conference on this as we should have but - on this part of it anyway. Can I just - I am going to submit my effort at doing the admin structure, Commissioner, and to do it I just want to refer briefly to the Clerks Breweries decision of his Honour Vice President Ross from September 1999 because he has a useful four step process. Sorry, he has got a three step process which is on - sorry, Commissioner, it doesn't have page numbers. Paragraph 33 summarises the steps required. So the three steps are:

PN302

The key classification rate in the award is to be fixed by reference to the minimum rate for a fitter in the Metal Industry Award -

PN303

at that time 477.20 -

PN304

Once the key classification rate has been properly fixed the other rates in the award are adjusted applying the internal award relativities which have been established, agreed or maintained and then any residual is identified.

PN305

And he goes through that. As I said in the next part of the decision he does that skills based comparison which I attempted verbally before and then, at page - sorry, at paragraph 50 - so the step two - fix the key classification rate. Step two goes to the, having fixed that he says that the other rates are to be fixed having regard to established internal award relativities and then he sets them out, they are at page 51, and mentions what the relativities were at that particular time. He applies that to the award as at November 1991 at paragraph 54 using the tradespersons rate of 417.20 at that time and then at paragraph 55 he added $60 which was necessary at that time to bring it up-to-date.

PN306

Then at paragraph 56 applies the new awards and identifies over the page at step three some residuals. So I have attempted to do that, Commissioner, in that little document that I handed up, Admin Structure Re-worked, and I didn't use the award rates in the print, I decided to go with the rates, despite some misgivings about them, that Ms Field had used so I was using the 1991 rates. So if you look at my little one-pager and the big spreadsheet, Commissioner, I started off with the 1991 figures exactly as they were shown by Ms Field in her immediate left-hand side column. I got a bit tired last night and didn't use them all, which is nothing to say about any submissions we might say about increments later, but I - so using those 1991 award rates as set out by the company and fixing the 100 per cent rate at the level 2, the first level of level 2, which then was - the 100 per cent rate was 417, I have then calculated the relativities as they applied in the award at 1991, that is the fourth column headed up, Relativities.

PN307

So they are the, I would say, the 1991 relativities and the next substantial column I think are the 1991 rates which would have been calculated against the 100 per cent rate or the $417 at the time and - so they are all there and then I have just added, as his Honour Vice President Ross did, instead of $60 back then it is now $108, so I have just added $108 to the lot of them and multiplied it by 52 - see in the second last column, Commissioner - and come out with those sets of rates. Now the interesting thing obviously from my point of view is that they are all higher than what the company has worked out on that big spreadsheet and there is no residuals in that area either, just the same as there is no residuals in the company's customer service officer structure.

PN308

Now, Commissioner, I think that methodology, and I stand to be corrected, but I think that is the methodology that his Honour Vice President Ross used and he didn't make it up, he just explained it quite well I thought, but I think that is the methodology that has been applied and if that is the case that is what the admin rates ought to be. Now they are not exactly the same as what is in the Qantas Award either or anything else but I think that is at least a correct way of doing it which again throws doubt on the second of the two sets of calculations that the company has submitted. Now that is all I really want to say at this point, Commissioner, but I think - on the question of the key classification rates and the adjustment process and what I would say is that if, you know, when the Commission determines what the key classification rate is it might be a good idea to sort of refer it back to us and see if we can put some more decent numbers in that we all agree to.

[2.30pm]

PN309

Unless, Commissioner, you want to do it yourself and we would obviously be happy - - -

PN310

THE COMMISSIONER: I might come up with figures neither of you like.

PN311

MR HARVEY: Yes, well, that is always possible, Commissioner, but that is all I really want to say about that except, you know, to say that obviously I think there is some doubt about all those figures that have been put forward. The other key question then, Commissioner, just comes down to this question of what structure we ought to use. What I have just been doing is sort of saying that if you are going to use the existing award structure then we say that the company's submissions about what the rates should be are wrong because the key classification rate is wrong and the mathematics arising from that we think are wrong as well.

PN312

So that is what we say about that. The other issue then we come to, Commissioner, is what we say about the structure and I was sort of only facetiously suggesting earlier, half facetiously suggesting earlier, Commissioner, that it is all so complicated that it is a really good reason for getting rid of it in the first place and starting again but I think the other, the serious part behind that, Commissioner, is that we now, I think, have from Ms Field's submissions and my submissions about this award is we now have a fairly good picture about how not only this company came about, how the award came about and how in creating this award all that was effectively done was pull in, in our case, the ASU case, three different classification structures from two other awards - the clerical and the admin and the salaried structure - and all we have done, and all the award at the moment says that we have done is that we have based it on the pre-existing award classification structures and that is it and if you look at the awards it just says, well, we are going to classify people according to how they classified, you know, effectively 10 years or more ago.

PN313

So, and yet the other really significant factor in all this I think, Commissioner, is that the awards that those structures were based on have changed radically. I mean, some of them don't exist any more. In the case of the sort of salaried staff one it has gone and it is totally subsumed, it looks totally different in the Qantas Airline Officers Award which has got, I think it is a 13 level structure from go to whoa, from the junior clerk to managers, in effect. So that looks totally different. The Airline Operations Award, the old Domestic Airlines Award, applying to Ansett and Australian Airlines has also gone through some fairly substantial restructuring as well.

PN314

There are different levels, there are new levels, in that classification structure, in the old Ansett structure. The Australian Airlines one is still there more or less intact applying to SITA but everything else seems to have changed. So the issue is why should we be satisfied with just doing a repeat of what we did 10 years ago to create the award, just pluck it from here, there and somewhere else and shove it into this award and spend all our time thinking about how we should, you know, what is the key classification rate and how we should convert it.

PN315

What we think should be done, Commissioner, is to give effect to the, you know, there was good spirit to the Workplace Relations Act and the WROLA Act, give some serious attention to putting in a classification structure in this award which meets the needs of the employees and the employer. Now the - it has been said a number of times this morning by Ms Field that but we don't have to do that, you know, it is allowable, it is there, we can convert it, we can do all those things but the question in our mind is simply why, why would you bother.

PN316

Particularly the - I mean, the salaried structure is extremely detailed; it doesn't appear to be being used by anybody. The other two clerical structures aren't quite so complicated or extensive but the fact is, as has been conceded by the company today so we don't need to go to the evidence on it, the structures are not used. The organisation came to a point in its history where it said, well, we don't need those three old structures any more. You know, they might have served their purpose, gave everybody satisfaction and security at the time when people were brought over from two previous organisations: Australian Airlines and Australia Post, but we don't need it any more.

PN317

Let us go for a classification structure which really meets the needs of Australian Air Express, not pre-existing parties, and they have done that and they have put up a classification structure in the enterprise agreement. In our case one which combines the customer service structure and the administration structure and, you know, doesn't talk much about salaried staff either but that is another issue. So we think that is a useful thing to do. Now there are some issues which Ms Field has properly sort of raised this morning about whether we are allowed to do that in accordance with the law and the principles but, you know, I would argue initially that we should do it on grounds of merit, think about the merit first, and then see if we can work it into the principles and the law which obviously any decision would have to do but not to start from the other way and just say, well, what does the law require us to do, what does its process require us to do and let us just do the minimum. But, no, let us do something which is useful.

PN318

We say that the useful thing would be to bring in the structure, not the rates but the structure, from the enterprise agreement. Now in one sense, Commissioner, there is absolutely nothing in it for us to say this. Obviously the structure in the award is not being used at the present time. It is the structure in the agreement that is being used. That agreement has increment, has all the sorts of things that we like and it has a method of progressing through the structure. So we stand to gain absolutely nothing out of this but the award does stand to gain a modern classification structure which would meet the needs of the company.

PN319

Ms Field has sort of gone through this morning at some length the arguments I used in the outline of submissions, Commissioner, so I don't intend to go over them all again and repeat it but the - I think the key issue remains and which hasn't been touched on much and that is even if we did look at the issue from the point of what the law is we would be going to the WROLA legislation and we would be going to Item 51(6) and (7) which says - Item 51(6) says that:

PN320

The Commission must, if it considers appropriate, review the award to determine whether it meets the following criteria -

PN321

some of which Ms Field has mentioned this morning -

PN322

It does not include matters of detail or process all appropriately dealt with by agreement at the workplace or enterprise level. It does not prescribe work practices ...(reads)... having regard to fairness to employees.

PN323

And then in particular Item 51(7) says:

PN324

The Commission must also review the award to determine whether or not it meets the following criteria -

PN325

and two criteria are relevant, we think, in this case and that is that (c), 51(7)(c) -

PN326

It is expressed in plain English and is easy to understand in both structure and content; and (d) it does not contain provisions that are obsolete or need updating.

PN327

And it is particularly the last one that we would say, Commissioner, that not only gives this Commission the power to either determine or at least say to the parties, look, that classification structure in that award is clearly obsolete or needs updating and Ms Tisdale earlier today reminded me that the award simplification decision, that is print P7500, which I don't have a copy with me, defines at page 41 what an obsolete provision would be but it is effectively the same as the language of Item 51(7), that is a provision that is obsolete or that needs updating and we would say that this classification structure that is in this award is clearly in need of updating.

PN328

You know, life seems to have moved on everywhere for this company, for the industry, for the awards that underpin it, everywhere except with regard to classification structure. In our outline of submissions we did deal with the issue of why we think the ASUs proposed course of action is the appropriate one and I will just pluck out a couple of points from that without going over what Ms Field mentioned this morning but the - as I said, Commissioner, the three ASU classification structures are no longer in use since they have been superseded in practice by the operation of the certified agreement.

PN329

The current agreement which I have handed the Commission a copy of contains a new classification structure which, as I said, combines the customer service and admin structures from the consolidated award into a single structure with two streams. The structure is a competency and skills based structure. Progression through the structure is not automatic or based on years of service but is based on business needs according to that structure. The top and bottom levels of the structure contain only one pay point but the others contain two or more.

PN330

We say that the parties value this classification structure and it is a structure that is used in practice. The award structures are not used and there is no proposal to revert to the award structures. One of the things that, apart from the general updating and deletion of obsolete provisions of awards, Commissioner, is that - to say that, is to ensure that awards provide an appropriate safety net for employees and we say in this case in particular that the current classification structure cannot now or conceivably in the future provide a proper safety net for employees since the employees are not now and won't be classified in accordance with them and if the enterprise agreement did fall over we think it would be extremely difficult, if not impossible, to go back and reclassify people against that classification structure since the structure is no longer relevant to the way work is organised in the company, in our submission.

PN331

So we would say that it is actually contrary, clearly contrary to the objects of the Act and the provisions of both Item 51 of the Wrola Act and the Workplace Relations Act to retain these obsolete structures in the award which have no meaning. I think - Ms Field disagreed with me this morning about this but I said or we said in the submissions that we submitted that there was no simple solution to the conversion process which could be adopted and Ms Field suggested that there was and it was a simple structure that the company had proposed to put in the award but I think the issue there is the, there is no simple solution to the conversion process given that we have been attempting to, you know, understand the process of how we are going to convert these classification structures given that in some cases we don't know what their basis was, particularly for example with regard to the salaried structure.

PN332

Therefore we believe that if the Commission were so minded to adopt the course of action to put in a new classification structure we believe that it would be fully in accordance with the objects and the intentions of the relevant Acts and it would provide a proper safety net of properly fixed minimum rates of pay in the award. It would provide a modern and relevant classification structure based on the needs of the business and the employees. It would eliminate obsolete provisions from the award. It would, were it done correctly, meet the terms of relevant Commission decisions with regard to minimum rates and provide the basis and further incentive for agreement-making at the enterprise level.

PN333

We say, Commissioner - I suppose our primary submission is that we put in the enterprise agreement classification structure but not with the rates but if the Commission is also of the same view that, you know, this classification structure does need updating we believe that it would be appropriate for the Commission to tell the parties that and perhaps to say, advise the parties to come back to the Commission with a structure and set of rates that should be used. Now Ms Field has said, you know, that it is not open - paragraph 44 of her submissions, outline of submissions, she said that:

PN334

Under the award simplification provisions it is not open to a party to seek variations at large for an award to satisfy some purpose outside the requirements of Item 51.

PN335

I am actually in a sense happy to agree with that submission, Commissioner. All I would say in response to that is that we don't say that this is outside the purposes of the requirements of Item 51. We actually say that it is completely in accordance with the requirements of Item 51. It has been suggested that if we want to do this we should make a separate application to vary the award under section 113 of the Act which is of course possible at any time but this matter comes before this Commission not by virtue of an application by any of the unions or by the company but it has been brought on by the Commission's own motion and, you know, in conformity with the Act and Item 51 of the WROLA Act in particular so we say that it is completely consistent with the requirements of Item 51 and therefore doable by this Commission. At paragraph 45 Ms Field and the company says:

PN336

A further test exists if the union was to pursue this position under Item 51 or even if it makes a separate application under section 113.

PN337

And quotes section 95 of the Act which provides no automatic flow-on of terms of certified agreement and I think as Ms Field read out this morning that section of the Act says:

PN338

The Commission does not have the power to include terms in an award that are based on the terms of a certified agreement unless the Commission is satisfied that including ...(reads)... be contrary to the public interest.

PN339

And Ms Field has gone on to say what she said this morning, that there is no principles yet around that but we would say that, you know, to say the Commission doesn't have the power to include terms in an award that are based on - sorry, I withdraw that. The Act doesn't say that the Commission doesn't have the power to include terms in an award based on the terms of the certified agreement, it says it does effectively if the Commission is satisfied that doing so wouldn't be inconsistent with any principles established by the Full Bench and would not otherwise be contrary to the public interest.

PN340

Well, we would submit on that point that it clearly means that there is power to include something out of a certified agreement in the award and that - and it wouldn't be inconsistent with the principles established by the Full Bench because we believe that the structure is certainly allowable, no difficulties at all with the structure. The only issue would be with regard to wages and we would have to be committed to obviously putting our minds to what the appropriate properly fixed minimum rates of pay to attach to that structure should be and they will obviously not be the ones in the agreement now, it would be less than those, and we don't see that it could be contrary to the public interest to do so. It affects only one company and the company is obviously clearly happy with the classification structure because it is in the agreement.

PN341

So we would say that there is no difficulty and in fact we would suggest that there is an obligation on us in accordance with the Act to do something about updating this classification structure and I think I have probably laboured that point enough, Commissioner. The only other thing I want to say something about therefore is increments and there is increments - sorry, I should say one other thing, Commissioner. I don't have the decisions with me but it could be provided but obviously where employees and employers have consented as part of the simplification process enterprise-based classification structures have been brought into awards with properly fixed minimum rates. I think Ms Tisdale may be able to - - -

PN342

THE COMMISSIONER: That is by consent?

PN343

MR HARVEY: Yes, by consent, Commissioner; certainly by consent only. Well - - -

PN344

THE COMMISSIONER: To my knowledge only by consent. If you can show me where it has been done other than by consent I would be happy to read those decisions.

PN345

MR HARVEY: But we still say, Commissioner, we think there is - - -

PN346

THE COMMISSIONER: You want me to be a trail-blazer, that is what you are saying, is it?

PN347

MR HARVEY: Yes, Commissioner, we should seize the moment.

PN348

THE COMMISSIONER: Yes.

PN349

MR HARVEY: Make some important history even at the end of this award simplification process. But the other thing just to talk about briefly is the question of increments, whether you look at increments either in terms of retaining them within the existing award structure, Commissioner, or whether we are looking at increments within a new structure based on the enterprise agreement or something else. Ms Field has taken you to, and I haven't bothered to hand up again, obviously the two paid rates review decisions but, and I think she quoted this bit from the first one, the paid rates review print Q7661, but I will read it in full:

PN350

Where the relevant award does not make progression through the incremental scale dependent on changed work value the incremental payments cannot be treated ...(reads)... the retention of such payments is permissible.

PN351

And so in both of those paid rates review decisions, Commissioner, they have sort of knocked out some incremental structures and left them in others and Ms Field has referred to that this morning and also Ms Field drew attention to the fact that it was approved in the case of nurses where it was found that the increments were work value and related to structural efficiency.

PN352

Now I would say firstly - our first submission on that point is, Commissioner, that the long process that I have unfortunately had to take you through about the history of this award does quite clearly show, I think, both in the cases of the salaried structure derived from the old Australian Airlines Salaried Staff Award but also from the old Australian Airlines structure derived from the Clerks Domestic Airlines Award, that both of those structures were inserted as a result of structural efficiency principles and particularly in the case - I can't say clearly about the salaried structure - but there are some words in the salaried structure about how you are classified but they are not particularly strong on this point but certainly the words I read out to you earlier on this afternoon, Commissioner, about how somebody operating under the old Australian Airlines structure, which is the structure in this award, how you got an increment was quite clearly specified in that award and I read it out before so I won't do it again but the award in that particular case clearly made progression through the incremental scale dependent on changed work value.

PN353

It is clear that the incremental payments were included in the award pursuant to the relevant work value principle or on the grounds of structural efficiency, in this case the latter, structural efficiency and work value, and it then it says:

PN354

The retention of such payments is permissible.

PN355

That is what the Full Bench said in the paid rates award. So what we have already seen this afternoon, and I am not going to repeat, is the original, in particular the Australian Airlines, structure from the Domestic Airlines Award. Was the structural efficiency structure based on work value? Clearly based around the skills to be exercised by employees under that award and progression through it was clearly on the basis of acquisition and use of those skills, down to the point where it wasn't just by exemption or anything like that, Commissioner, if you remember, it was by individual staff member performance appraisal was to be put into effect.

PN356

So that is how the award, which was the underpinning award and which this award, as it stands now says it is based on that old structure and not only is it based on that old structure, it says that the classification of somebody under this award will be effectively, you know, continued from the pre-existing system. Now that clause 3(a) that I read out from the Clerks Domestic Airlines Award, print J8302, that clause 3(b) seems to have rocked off the system, it is not in this award, but it is clearly - it was inserted at the same time that that new appendix part 4, rates of pay, classification structure, was inserted, went in the same day as that structure and clearly indicated how somebody was to progress through that structure.

PN357

So we would strongly submit, Commissioner, that that structure is a structural efficiency structure, it is based on work value, the increments moving through the various steps in that award is clearly fully in line with the principles laid down by the Full Bench in the paid rates review that Ms Field has taken you to this morning and I have just reiterated. So we would say that the method of progression in the ASU award is analogous with the provision for the enrolled nurse which was cited with approval in both of those paid rates decisions and those increments were retained and this award says you have to do it the way the old award said so we are going to stick with the old awards. I think we are entitled to say that we are entitled to stick with the increments as well.

PN358

But that is if we are going to be short-sighted or backward looking about this, Commissioner. If we move on to a new era perhaps then we would be doing something that looks like the structure in the - in our case it is called the On Airport Business Development Agreement and - - -

PN359

THE COMMISSIONER: Is that the document you said Ms Field only received this morning and therefore - - -

PN360

MR HARVEY: No, no. This is the certified agreement that applies.

PN361

THE COMMISSIONER: Right.

PN362

MR HARVEY: I think it was the last document I - - -

PN363

THE COMMISSIONER: But you did give her a document from Qantas that she hasn't had a chance to look at yet?

PN364

MR HARVEY: Yes, that is right, Commissioner.

PN365

THE COMMISSIONER: Yes.

PN366

MR HARVEY: That was the classification structure that has gone or in the process of going into the Airline Officers Award.

PN367

THE COMMISSIONER: Yes.

PN368

MR HARVEY: But I just notice, in our case the agreement which I have handed up and which of course now doesn't have page numbers either - no, well, it is attachment A to this agreement so it is about two-thirds of the way through, but this is a definition of classifications and it is - perhaps it is just easier to read the whole thing out and I will - attachment A, definition of classifications, I won't read it all out:

PN369

There are some generic tasks for both customer service and administration.

PN370

And then on the next page, half-way down, Commissioner, it simply says:

PN371

Classification progression -

PN372

because it does have increments within this agreement, and it says -

PN373

Employees will not progress to the next classification level automatically. Any such progression will occur in accordance with the business needs.

PN374

Now that is not exactly obviously the same - just saying that it is, you know, it is a skills based classification structure but it is clear, Commissioner, that it says that it is not automatic and whatever business needs are that would suggest to us quite strongly that, you know, the company would have a fair amount of control over it, they are the ones who are running the business and that obviously people, if it is not automatic, they would only go through that structure if the employer was happy that it met their business needs and I presume that, you know, if the unions had a disagreement with that then we could argue the toss and they have got a dispute settling procedure exercise.

PN375

So again we would say that structure could be inserted with the increments on the basis of progression through that isn't automatic and I won't go through the structure, Commissioner, but you can see, if you look at it, that it is a skills based classification structure which is based on work value and duties performed by employees. So we think either way, Commissioner, if we are sticking with the tired classification structure in the award or whether we are moving to an updated classification structure we believe that increments could be retained in this award. I am just going to stop there, Commissioner, which I know you will be very pleased to know but if you will just allow me to just check to see whether there is anything that Ms Field said this morning that I haven't mentioned already and then I will sit down.

PN376

I should say one other thing, that the foundation awards, as I have mentioned, Commissioner, in particular the Australian Airlines structure, as I said, was based on the old Victorian Clerical and Administrative Employees Award structure which is structural efficiency and work value based and which retains increments and I think that is it, Commissioner, you will be pleased to know.

PN377

THE COMMISSIONER: Yes, thank you, Mr Harvey. We might just go off the record for a few moments.

OFF THE RECORD

PN378

THE COMMISSIONER: Yes, Ms Tisdale.

PN379

MS TISDALE: Thank you, Commissioner. Commissioner, we want to make a primary submission only in relation to the outstanding matters as it impacts on the Transport Workers Union and our members at Australian Air Express and that outstanding matter does crucially revolve around the classification structure in our view and the part of the classification structure that refers or relates to the airline service operators. We submit that this classification structure which is currently set out at clause 16.1 of the draft simplified award and part 3 of schedule A of that draft simplified award, we submit that that classification structure is obsolete and that it requires updating and that it should not be retained in the draft simplified award.

PN380

We say that primarily because it fails the criteria set down in Item 51(7)(e) of the WROLA Act in that it is obsolete and requires updating. There was a further discussion in the award simplification decision which provides a significant amount of guidance for the parties in matters such as these, that is at P7500 at page 41 of the published version of that decision, where they ponder that requirement of the WROLA Act, that awards not contain provisions that are obsolete or need updating a little further and they note that in the third safety net adjustment and section 150A review decision that the Full Bench way back then had cause to consider what an obsolete provision was.

PN381

They reflected that an obsolete provision was one that was designed to cover circumstances that are no longer applicable and we say that is very much the case with these classification structures. The classification structure that I am talking about has been replaced in practice by a new competency-based classification structure that was brought into effect after our current enterprise agreement between the company and ourselves was certified and I can hand up a copy of the new classification structure to the Commission.

PN382

The documents are under cover of a letter signed off by our Federal Secretary and representatives of the company that set out some of the minor issues and interestingly on the third page of those stapled documents is a translation structure which translates the current structure to the old structure so from the point of view of the airline service operators there would be no difficulty for us coming up with minimum rates of pay for the new classification structure because that already forms the basis of an agreement between us and the company.

PN383

You will see on the following page, Commissioner, the second last paragraph on the following page there is a discussion about the way increments function in the new structure and it says progression by way of increment within the relevant levels to be based on an annual anniversary date assessment of performance against agreed key performance indicators and objectives derived from relative tasks and major functions at each level. So clearly a work value based increment structure as part of an overall competency based training structure and this - I think it is crucial to appreciate - this is the structure that is operating in the workplace at the present time. No other structure is.

PN384

For our members the reason why the issue of the new or the old classification structure or the current or the obsolete classification structure forming part of the award does have a direct significance and that is in relation to the question of increments. In the current award classification structure, the obsolete one if I can refer to it in that way for ease - - -

PN385

THE COMMISSIONER: Depending who you are.

PN386

MS TISDALE: Yes, indeed. That classification structure on paper provides for increments that kick in at the anniversary of service. On the face of it it would appear that it is a recognition for years of service rather than for increased work value but we say that it is important to bear in mind that matters aren't always as simple as they appear in the kind of simple meaning of words on paper.

PN387

Firstly, because classification structures such as these where - these meaning the obsolete ones, the current one in the award - where there is no competency-based structure in the workplace there is no proper formal system for training employees, for testing their competency and rewarding their competency, those kind of workplaces are common for our members and they result in an informal appreciation of the skills that our members have and often an under-valuing of those skills because they go along with workplaces where one is expected to learn on the job and to pick the job up through experience.

PN388

So there is in our view quite a rough and ready but a very significant in practice correlation between the effluxion of time that a person spends in a job and the skills and competencies that they pick up over that period of time. We say that workplaces like this shouldn't be disadvantaged when it comes to questions around recognising work value compared to workplaces where there are very formalised training structures and recognition of skills and competencies which are much more common in white collar and professional environments than they are in the more blue collar workplaces where the skills are more related to manual work.

PN389

But this perhaps more academic question or more theoretical question is - it is not necessary for us to pursue at this point in time we say because our primary submission is that we wouldn't be seeking to - in the absence of significant evidence we don't think it would be possible to convince the Commission that the current structure with its increments based on years of service does actually reflect the increasing skills and experience that are picked up over that time and so do in fact recognise an increase in work value. We say that it is most appropriate to side-step that whole question because the current classification structure as put forward by the employer in the draft simplified award doesn't meet the requirements of the WROLA Act and so it is not appropriate that it continues as part of the draft simplified award.

PN390

The situation that we face here is, in our view, somewhat similar to one that faced Commissioner Larkin in the simplification and minimum rates conversion of an award called the Air Services Australia Consolidated Award 1996 and I have a copy of her decision here that I can hand up. This is one of those decisions, Commissioner, that was effectively made by consent but that minor difference aside the facts are very similar to those that we face here.

PN391

THE COMMISSIONER: What was that word again?

PN392

MS TISDALE: In this matter Commissioner Larkin heard submissions in relation to aviation firefighters employed under this award and those submissions went to the fact that although there was no work value criteria for the incremental progression for these aviation firefighters in the award such a structure had been developed and was operating in practice and it was in fact reflected in the enterprise agreement that covered these employees. This had a direct consequence for whether or not the increments could be retained because in practice increments were operating on a work value situation whereas the black letters of the award made no mention of such a thing and so from that perspective if one took a simple approach to it the increments would be removed.

PN393

But rather than taking that approach Commissioner Larkin required the parties to develop a new draft order reflecting the actual situation as was reflected largely in the enterprise agreement and that was put into the award along with the increments which were - it was clearly spelt out the way they actually worked through the appreciation of an increasing work value and we say that Commissioner Larkin's approach in that matter is consistent with the fundamental approach of the Commission, that words as they appear in awards need to be understood in their industrial context, not in isolation from that context or in a strictly formal sense.

PN394

The AI Group have submitted on behalf of the company that it would be outside the principles for the enterprise agreement classification structure to be inserted into the award. We would say that that is not the case. It is clear that the enterprise agreement rates cannot be inserted into the award. To do so would be against the Commission's wage fixing principles. However there is no difficulty inserting the current classification structure into the award along with properly fixed minimum rates of pay. We say there is no practical difficulty in doing this translation because it is clear at least as it impacts on our members what the translation is between the old and the new structure.

PN395

We say there are also significant positive reasons why the classification structure should be updated. For the award to function as an effective safety net it needs to remain directly relevant to the organisation of work at the work place and this also allows the award to play its proper role as a basis on which fair and effective agreement-making can take place. We say it is in no one's interests that an outdated or obsolete provision remains in the award and this is particularly crucial when we are talking about a provision as fundamentally important as the classification structure. We say that preventing the award from reflecting the current classification structure would result in an injustice to the employees and that is because the classification structure actually operating in the workforce and forming part of the enterprise agreement allows for movement between the pay points based on a formal assessment of skills and knowledge that is for an increasing work value and that is something that would be lost if the obsolete classification structure is allowed to stay in the award.

PN396

So we submit that it is appropriate that the classification structure be updated as it relates to airline service officers and we certainly support the ASUs submissions in the analogous matters for their customer service and administrative staff and we think that once that matter is settled about which classification structure is in place then the issue of the increments needs to be revisited so that we can assure ourselves and the Commission that any increments that did form part of that classification structure did properly meet the requirements of the paid rates review decision. If the Commission pleases.

PN397

THE COMMISSIONER: Thank you. All right, well, what I would propose to do now is to ask Ms Field to have a look at the document that was presented to her this morning, which is the Qantas document, and to take note of what has been said today, discuss it with your member who has obviously not been here for the last hour or so and then have a formal discussion with the unions again to see if the parties can come to some agreement. If they can't I will relist the matter here in Melbourne at a date to be fixed where the parties can indicate to me where they have broken down, for want of a better word, and that won't be restricted just to Ms Field. The Commission stands adjourned.

ADJOURNED INDEFINITELY [3.20pm]