BP2002/591, Transcript of Proceedings [2003] AIRCTrans 20 (6 January 2003)

AUSCRIPT PTY LTD
ABN 76 082 664 220

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

TRANSCRIPT OF PROCEEDINGS

O/N VT10117
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT MARSH
SENIOR DEPUTY PRESIDENT CARTWRIGHT
COMMISSIONER BLAIR

BP2002/591-726, 1175, 1290,
1327-1348, 1422, 1443, 1583,
1733, 1767, 1889, 4774,
4837-4850 and 4481

HEALTH SERVICES UNION OF AUSTRALIA
(VICTORIA - PRIVATE SECTOR) INTERIM
AWARD 1993

Applications under section 170MX of the Act
by the Health Services Union of Australia -
Victoria Number 3 Branch for arbitration
following termination of bargaining periods
re health and welfare services

APPLICATION FOR TERMINATION
OF BARGAINING PERIOD

Application under section 170MW of the Act
by Salvation Army Eastcare for orders to
suspend or terminate a bargaining period

MELBOURNE

10.09 AM, FRIDAY, 13 DECEMBER 2002

Continued from 21.11.02

PN5027

SENIOR DEPUTY PRESIDENT MARSH: We have received submissions from all the parties, written submissions, and thank you for complying with the directions. I think it is probably more convenient to mark those written submissions as exhibits in due course, as submissions are being made, but if anyone has got a different view, I will take that into consideration. We can also proceed on the basis that we have all read the written submissions. We don't require them to be read again. Are there any threshold matters before we proceed?

PN5028

MR WHITE: I think, only to increase the paper, but we have given - these are further authorities which have been referred to, and there is a new index for the authorities which have previously been provided.

PN5029

SENIOR DEPUTY PRESIDENT MARSH: Thank you. I probably for the record, should also indicate from the HSUA, we received a copy of a letter received from the Minister, Amanda Vanstone, dated 2 December in respect of Commonwealth funding. I don't propose to mark that, but that will be on the file. I assume all parties have got a copy of that letter. Commissioner Blair did, so it appears. So, Mr Langmead, is it over to you?

PN5030

MR LANGMEAD: Thank you, your Honour.

PN5031

SENIOR DEPUTY PRESIDENT MARSH: Yes, before you start, can I just indicate that having read the written submissions, I am a little concerned that the submission doesn't seem to cover some of the ground that we anticipated, particularly following a discussion when the evidence was being given, with respect to - particularly some specific arguments going to the conditions that are being sought to be included in the award. I recall raising that with you on an earlier occasion and you did indicate that that would be dealt within submissions. And if you are relying on your general parity argument, I understand that argument, but there is nothing - with some exceptions, but in the main there are very specific conditions that are being sought, haven't been particularised in terms of the submission and the merit underpinning them.

PN5032

MR LANGMEAD: Your Honour, your Honour is correct in characterising one approach being comparability argument.

PN5033

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5034

MR LANGMEAD: And we do say that, and we do say that in the written submissions. Beyond that, as to specific conditions, in attachment B to the submissions, there is an analysis of the evidence.

PN5035

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5036

MR LANGMEAD: And it does so, claim by claim.

PN5037

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5038

MR LANGMEAD: For matters such as a claim that there be no AWAs, there is no evidence about that.

PN5039

SENIOR DEPUTY PRESIDENT MARSH: No.

PN5040

MR LANGMEAD: And in that - is just a matter of argument on comparability. But for a matter such as a justification for a classification as Case Manager, for example, there is a reference to a witness statement, and as well as the comparability.

PN5041

SENIOR DEPUTY PRESIDENT MARSH: Yes, thank you. The Union is seeking the same conditions across all sectors regardless of comparability.

PN5042

MR LANGMEAD: Well - - -

PN5043

SENIOR DEPUTY PRESIDENT MARSH: It is not seeking therapist conditions for Therapists and residential worker conditions for Residential Workers. It seems to me, with a number of conditions, it is seeking to choose from a particular instrument, a recommendation or a provision in an agreement or an award provision. And that be common to all sectors that you wish to have covered by the award?

PN5044

MR LANGMEAD: That certainly isn't the case with the original draft.

PN5045

SENIOR DEPUTY PRESIDENT MARSH: For example, parental leave.

PN5046

MR LANGMEAD: Sorry, your Honour?

PN5047

SENIOR DEPUTY PRESIDENT MARSH: For example, parental leave.

PN5048

MR LANGMEAD: Yes. Certainly the case for - in the original attachment A to our outline of submissions. The Commission will note that we have an alternate draft award.

PN5049

SENIOR DEPUTY PRESIDENT MARSH: Yes, that is a fall back position, yes.

PN5050

MR LANGMEAD: Which has attempted to separate out those conditions which are peculiar to health professionals, for example. And necessarily they are attributable to the instruments covering health professionals - - -

PN5051

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5052

MR LANGMEAD: - - - and the same with direct care workers and support staff. The provisions which are sought to be made as common provisions are sufficiently, in our submission, generically similar, or the language used is in practical effect the same, whether it is described in the terms of one particular instrument, or in fact none of them.

PN5053

SENIOR DEPUTY PRESIDENT MARSH: I see. They are common anyway, yes.

PN5054

MR LANGMEAD: The principle is the same, we say, in each of the relevant instruments.

PN5055

SENIOR DEPUTY PRESIDENT MARSH: Yes, yes, I understand, thank you.

PN5056

MR LANGMEAD: We have attempted to do it on that basis to perhaps assist in answering questions about which instrument sourced which particular condition.

PN5057

SENIOR DEPUTY PRESIDENT MARSH: Yes. Ye,s thank you, Mr Langmead.

PN5058

MR LANGMEAD: If the Commission pleases, this matter has come before the Commission arising from what is not really a particularly common course of events. If I may, with respect, remind the Commission of the history of this matter, the matter is before the Commission for determination by arbitration under section 170MX because the Commission determined that the industrial action that the employees in question were taking was such that it was threatening to injure persons - to endanger the life, the personal safety or health of the welfare of the population or part of it.

PN5059

It isn't a case which is brought under section 170MW(7) where it is a paid rates situation and the parties just can't reach agreement. It is a situation where the members of the HSUA took, and we say, unprecedented industrial action, in all of the employer workplaces that are covered by the terminations, and it did so in circumstances where the employees took that action because they could not, up to that point, obtain agreement from employers to agree to the conditions and wages that they sought.

PN5060

It wasn't the first time they found themselves in this situation. In 2001 they did something similar, and embarked upon a campaign of industrial action, because the employers had not been able to reach agreement with the Union over the terms and conditions of proposed industrial agreements. At that stage the Commission intervened. It terminated the bargaining periods. For the same reason, namely that the industrial action was threatening to endanger the life, the personal safety or health or welfare of part of the population, being the clients, who the employees are responsible for.

PN5061

The DHS appealed that termination and the effects of that appeal and what emerged from it, prevented the Commission from dealing with the matter under section 170MX for some months. Eventually HSUA re-initiated bargaining periods, which led in turn to the campaign of industrial action which led to these terminations. The matter has been going on by way of negotiation and industrial action for almost two years. The terminations this year were terminated - took place in March. There was some months of conciliation, which was unsuccessful.

PN5062

And I don't think I am putting it too highly when I say that the employees, members of the HSUA, are at the end of their tether in terms of seeking to improve their wages and conditions to the point where they have comparable wages and conditions to those workers in the public sector doing exactly the same work. There is that frustration that drove them to take unprecedented industrial action. And they now look to the Commission, and have been looking to the Commission, in accordance with the Act, to have their matters dealt with, and to achieve a fair and equitable outcome.

PN5063

If the Commission were to not accede to the HSUA's claims, the evidence is that this sector of the NGO employers will be faced with massive problems of retaining staff, recruiting staff. They are going to vote with their feet. They are going to leave either the sector, or at least - I say the disability sector - or at least go to the Government and get employment with the Government. The real threat to viability of the NGOs as employers in the disability sector is from the lack of comparability of wages and conditions.

PN5064

If I could turn to the particular issues raised and canvassed in our submission, and in passing I will address some of the matters raised in employers and DHS's submissions, but there are some particular items which I would seek to deal with in reply after I have heard from Mr White - - -

PN5065

SENIOR DEPUTY PRESIDENT MARSH: Yes. Yes. No, I think that is reasonable.

PN5066

MR LANGMEAD: - - - and the other parties.

PN5067

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5068

MR LANGMEAD: In respect of the matters in issue there has been some debate as to whether the abolition of the half day model was an issue. The claim made by the Union in its particulars the initiation of bargaining period sought penalty rates on weekends for those who worked the 24 hour modelling. It was the evidence of Ms Cresshull that during negotiations which took place she thought at the same time as conciliation was taking place, the abolition of the 24 model was raised, and it was a position that the Union then embraced.

PN5069

SENIOR DEPUTY PRESIDENT MARSH: Yes, have you got a transcript reference to that? At a convenient time when - - -

PN5070

MR LANGMEAD: I think it is in the written submissions, your Honour.

PN5071

SENIOR DEPUTY PRESIDENT MARSH: Yes, I think it is too, from memory.

PN5072

SENIOR DEPUTY PRESIDENT CARTWRIGHT: 276 to 277, I think it is.

PN5073

MR LANGMEAD: DHS in particular, I think, queries - - -

PN5074

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5075

MR LANGMEAD: - - - whether that was - I am sorry, and the employers do too. It queries whether that - - -

PN5076

SENIOR DEPUTY PRESIDENT MARSH: Yes, both do, yes.

PN5077

MR LANGMEAD: - - - fell within the period of the bargaining period. In other words, before it was terminated.

PN5078

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5079

MR LANGMEAD: And whilst Ms Cresshull was not certain about when those events took place, she acknowledged that the conciliations took place with Deputy President Ross, not later than February, I think were her words. And - as put to her by Mr White. That is within the bargaining period for most of the bargaining periods.

PN5080

COMMISSIONER BLAIR: Was there not a gap between the decision to terminate the first bargaining periods, and the appeal process, and the establishment of the second lot of bargaining periods, and in that process VP Ross conducted conciliation proceedings in relation to the first bargaining periods?

PN5081

MR LANGMEAD: Deputy President Ross, Commissioner - - -

PN5082

COMMISSIONER BLAIR: You have just demoted him; Vice President Ross.

PN5083

MR LANGMEAD: Sorry, Vice President.

PN5084

COMMISSIONER BLAIR: I am sure he wouldn't want that.

PN5085

MR LANGMEAD: I left off the Senior, because I knew he was something more than just a - - -

PN5086

COMMISSIONER BLAIR: You can promote me, if you wish.

PN5087

MR LANGMEAD: Certainly, your Honour.

PN5088

COMMISSIONER BLAIR: Thank you, you will get anything you want. Keep going like that.

PN5089

MR LANGMEAD: Vice President Ross conducted conciliation including in February, which was after the initiation of further bargaining periods by the HSUA. He had initiated a large number of bargaining periods on 29 and 30 January. And it was, I think, only about three or four of the bargaining periods were initiated substantially later than that, sometime in March, and all of them were terminated by either you, in respect of most of them, or by Commissioner Roberts in respect to some. So there was an overlap, Commissioner.

PN5090

COMMISSIONER BLAIR: Right.

PN5091

SENIOR DEPUTY PRESIDENT MARSH: Was that overlap with all the respondents or - - -

PN5092

MR LANGMEAD: No, it doesn't.

PN5093

SENIOR DEPUTY PRESIDENT MARSH: No.

PN5094

MR LANGMEAD: It doesn't overlap with Jewish Care, Jewish Welfare Society, Moira Residential Service, Statewide Autistic Service and Golden Valley Disability Service. It does all the rest.

PN5095

COMMISSIONER BLAIR: So which bargaining period was VP Ross conciliating for? I don't think - - -

PN5096

SENIOR DEPUTY PRESIDENT MARSH: The first one - - -

PN5097

COMMISSIONER BLAIR: - - - open for the second one.

PN5098

SENIOR DEPUTY PRESIDENT MARSH: No, the first.

PN5099

MR LANGMEAD: Well, your Honour, I don't - I think he was conciliating in respect of the terminated first bargaining periods.

PN5100

COMMISSIONER BLAIR: Yes.

PN5101

MR LANGMEAD: Yes. But if the in the meantime the HSUA had initiated bargaining periods, and those issues were then alive, and discussions took place which resulted in the HSUA taking a different position in relation to 24 hour model, being its abolition rather than simply seeking an increase in the penalty rates. That, in our submission, is therefore a matter which arose during the second bargaining periods. Because they were matters in issue between the parties during that second bargaining period.

PN5102

COMMISSIONER BLAIR: Thank you.

PN5103

SENIOR DEPUTY PRESIDENT CARTWRIGHT: That was the question that was actually put to Ms Cresshull by Mr Eberhard, just looking up paragraph 276 of the transcript, which you referred to. It says, and this is Mr Eberhard asking a question:

PN5104

It states that the union seeks the abolition of the half day model. Can I now take you to HSUA3A. Can you tell me where in the claim contained in HSUA3A, the basis of the ...(reads)... comes from, please?

PN5105

And the answer is:

PN5106

I believe it came out of discussions surrounding wages, which was the first claim. Is that clear to you, Mr Eberhard?

PN5107

Mr Eberhard continues:

PN5108

Can you recall when that discussion occurred?---I believe it occurred during the course of negotiations. I can't put an exact date on it. But there is no ...(reads)... but they would be in conjunction with conciliation dates.

PN5109

It doesn't put a very strong time on when this was discussed, does it?

PN5110

MR LANGMEAD: No, it doesn't, your Honour.

PN5111

SENIOR DEPUTY PRESIDENT CARTWRIGHT: And that is the evidence you are relying on?

PN5112

MR LANGMEAD: There is no other evidence, your Honour. Mr White says he thinks there is some other evidence, and I leave it to him to draw that to the Commission's attention. I don't have it presently before me. But we also say that - about this that even if the Commission were not satisfied the abolition of the half day model was a matter specifically in issue during the bargaining period, it would be open to the Commission in dealing with the matter that was indisputably in issue, at least on the initiation of the bargaining period when it was said in the particulars, namely the increase in the penalty rates, that the Commission would be able to make an award which did abolish the half day model.

PN5113

SENIOR DEPUTY PRESIDENT MARSH: So a claim under penalty payments, weekend penalties to apply to employees working on the half day model, could be settled by abolishing the half day model?

PN5114

MR LANGMEAD: Yes, your Honour.

PN5115

SENIOR DEPUTY PRESIDENT MARSH: Yes, that is your submission?

PN5116

MR LANGMEAD: Yes.

PN5117

SENIOR DEPUTY PRESIDENT MARSH: Yes, yes.

PN5118

MR LANGMEAD: So, as I say, even if you were not satisfied that the abolition itself were a matter that was in issue, it is our submission that you would have the power to nevertheless go on and, you know, decide in relation to the matter that was in issue, that you would do away with the half day model completely.

PN5119

SENIOR DEPUTY PRESIDENT MARSH: Because the half day model was an issue - clearly an issue?

PN5120

MR LANGMEAD: Yes.

PN5121

SENIOR DEPUTY PRESIDENT MARSH: Yes, I understand the submission.

PN5122

SENIOR DEPUTY PRESIDENT CARTWRIGHT: If we were going to do that, we would have wanted that argued in some detail though, wouldn't we? And to have some considerable evidence on it?

PN5123

MR LANGMEAD: Well, yes, your Honour, and I will - it is dealt with specifically in the written submissions, and I will come to it, because I want to make a brief reference to it. But we have devoted a number of paragraphs and an attachment to it.

[10.32am]

PN5124

Now, the union has submitted that the results of relevant enterprise bargaining arbitration are the recent results in the section 111AA arbitration conducted by Commissioner Blair in respect of health professionals in the Public Sector. Those are health professionals employed by public hospitals and community health care centres. The agreement which the government itself, DHS itself, made with the direct care employees in disability who are employed by DHS, by the government and the administrative and support staff who are covered by the recent multi-employer agreement which is yet to be certified and is exhibited to the - it was tendered as an exhibit by the HSUA, I don't have the number readily at hand.

PN5125

The point that we do make about that is that these rates and conditions in those instruments, they were able to be offered, negotiated about, and dealt with in respect of the agreements reached by the fact of government funding. Now, obviously DHS itself was dealing with its own employees, it had to have government funding in order to come to that agreement. The public hospitals and public - community health care centres are also publicly-funded through DHS funding, as I understand it.

PN5126

In respect of the section 111AA arbitration, DHS was an intervener, actively participated, was the subject of specific recommendations and included in actions to be taken as a result of that arbitration. It has of course as an intervener the status of a party under section 43 of the Act, but in any event, it was there and it clearly acquiesced in the arbitrating of that outcome, and by inference was making government funding available for it. So, in respect of all of those outcomes in the Public Sector, the government itself did put either itself when it was the employer or the employers when it wasn't, put them in a position where they could negotiate or could agree to a process of section 111AA arbitration which in itself is an agreed process, and necessarily so.

PN5127

It enables those agreements including the agreement to the arbitration to go ahead, whereas here the employers couldn't go beyond the position that they were funded to. The work of these employees in each group, and we have grouped them into health professionals, direct care employees and administrative and other support staff, is shown in our submission, in our written submission, by reference to the evidence to be identical.

PN5128

We do ask the Commission to infer that the evidence that it did hear did demonstrate that the work of all the employees in this sector is identical to the work of the workers in the Public Sector. The area where there was very little evidence was in relation to administrative and support staff, and we have, however, demonstrated by reference to classification descriptions from the industrial instruments that the classification descriptions are identical, and we would invite the Commission to conclude from that that the positions are in fact directly comparable.

PN5129

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Sorry, whereabouts have you done that?

PN5130

MR LANGMEAD: They are attached to the submission, your Honour. They are attachment C and attachment D.

PN5131

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Yes, thank you.

PN5132

MR LANGMEAD: It is the level 4 - - -

PN5133

SENIOR DEPUTY PRESIDENT CARTWRIGHT: There is no heading on attachment D.

PN5134

MR LANGMEAD: Sorry, your Honour?

PN5135

SENIOR DEPUTY PRESIDENT CARTWRIGHT: There is no heading on attachment D.

PN5136

MR LANGMEAD: On attachment D?

PN5137

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5138

MR LANGMEAD: No, there isn't, your Honour. You will see the award number is reproduced at the bottom and it is identified in the submission as to its origins.

PN5139

SENIOR DEPUTY PRESIDENT CARTWRIGHT: So, what are we comparing?

PN5140

MR LANGMEAD: Level 4, your Honour. Pardon me a moment. I was in error in referring to level 4 before, your Honour; it is level 5 that is the - I think. Your Honour, it may be that we have to check those.

PN5141

SENIOR DEPUTY PRESIDENT MARSH: Yes. Well, level 5 seem to be identical in their wording for attachment C and D, but I am not sure where that feeds into the classification structure that you are asking us to make.

PN5142

MR LANGMEAD: I am not confident myself now, your Honour, that we have got a comprehensive enough attachment.

PN5143

SENIOR DEPUTY PRESIDENT MARSH: Well, do you want to come back to that, Mr Langmead?

PN5144

MR LANGMEAD: If I may, your Honour.

PN5145

SENIOR DEPUTY PRESIDENT MARSH: Yes, certainly.

PN5146

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Essentially, the evidence that you rely on in relation to administrative staff is the comparability of wage grades - of their classification structures as demonstrated by these two awards.

PN5147

MR LANGMEAD: Well, as I hoped was demonstrated by those, your Honour. They are identical; I am just not confident now that the two attachments that we have in front of us are the ones that I was looking at when I wrote the submission. But if one takes the excerpt of the description, and perhaps I will go to the - - -

PN5148

SENIOR DEPUTY PRESIDENT MARSH: Is the union only seeking one level of - because this only - the attachments only go to level 5.

PN5149

MR LANGMEAD: No, that was just by example, your Honour.

PN5150

SENIOR DEPUTY PRESIDENT MARSH: I see. You see, the history of clerical wage fixation historically has been fairly perplexing, and not without its peculiar history, I mean, between Tribunals there has been different approaches taken to the same classifications. For example, when the Victorian Tribunal was in existence the clerical level was struck at a different relativity to metal trades than in the Federal Tribunal, and the Northern Territory had something to say, though.

PN5151

It is a fairly exacting exercise if I can put it that way, with a lot of history attaching to it, and I think we probably need more material than what you have given us to enable us to even consider an argument that we should introduce a certain level of rate because the classification definitions are the same. But if you could look at that and come back to us and show us how the levels feed into the classification structure you are seeking to have inserted into the award I think that would help us, Mr Langmead.

PN5152

MR LANGMEAD: Yes. I will come back to that, your Honour.

PN5153

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Relevant to that is that there are a number of awards that do deal with clerical salaries. For example, there is the Victorian Clerks Award which has properly fixed minimum rates.

PN5154

SENIOR DEPUTY PRESIDENT MARSH: That is right.

PN5155

SENIOR DEPUTY PRESIDENT CARTWRIGHT: There is the Social and Community Services Victoria - I have forgotten the exact name - it is one that I dealt with earlier this year that covers this area, but there is a number of awards with properly-fixed minimum rates that apply to the clerical area and therefore as her Honour suggested a more exacting look at this would probably be necessary if we are to do anything substantive in that area.

PN5156

MR LANGMEAD: Well, your Honour, the area which we seek comparability with is the area covered by the HASA Public Sector Award, and those employees have recently - or will receive the increase flowing from the multi-employer agreement, and it is that work which we say is directly comparable and can be shown to be by reference to the skill level groups. If the extracts themselves don't demonstrate that we will provide the Commission with copies of the two awards which set out that, and in our submission do make out that case.

PN5157

SENIOR DEPUTY PRESIDENT CARTWRIGHT: When you refer to the HASA Public Sector Award, that is the Health and Allied Services Private Sector Victoria Consolidated Award 1998?

PN5158

MR LANGMEAD: Yes.

PN5159

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Which has been through item 51 - I would assume from the date it has.

PN5160

MR LANGMEAD: I am instructed it has, your Honour.

PN5161

SENIOR DEPUTY PRESIDENT MARSH: So are you seeking those wage rates or the agreement, the multi-business agreement wage rates?

PN5162

MR LANGMEAD: The agreement wage rates, your Honour.

PN5163

SENIOR DEPUTY PRESIDENT MARSH: Yes, that is what I thought. But the classification structure goes back to the award.

PN5164

MR LANGMEAD: Yes, and we say the classification structures are relevantly identical.

PN5165

SENIOR DEPUTY PRESIDENT MARSH: Yes, but the wage rates are found in the multi-business agreement that is not yet certified but will be certified shortly. Is that right?

PN5166

MR LANGMEAD: Yes, that is right, yes.

PN5167

SENIOR DEPUTY PRESIDENT MARSH: Has that been lodged yet?

PN5168

MR LANGMEAD: Pardon me one moment. I am instructed it has not. It has been signed, but it hasn't been filed.

PN5169

SENIOR DEPUTY PRESIDENT MARSH: I thought that was probably the status, yes. No, I understand now, thank you.

PN5170

MR LANGMEAD: In relation to the relatively identical nature of the work of the employees, the subject of the terminations, we do note that the employers don't take issue with our characterisation of it. Now, in relation to the negotiations between the parties, we note that in its submissions, DHS continues to contend that effectively the employers had a capacity to pay and they base this on their analysis of the unit price, unit cost document. Now, that scenario was put to the employer witnesses.

PN5171

None of them accepted the proposition that was put to them and all of them said that they did not have the capacity to offer anything more than that which the Government had funded. They did so fairly firmly. There is no doubt in our submission that the evidence was overwhelmingly that that is the case. Nevertheless, we say DHS continue to seem to suggest that there is a capacity to pay. Now, HSUA was told during negotiations that that was the case. It did, in fact, believe it, but where we depart from DHSs characterisation of it is to say that we accepted it, because HSUA didn't accept the fact that the employer said that they couldn't increase their offer.

PN5172

The HSUA members developed a campaign of industrial action and took that action, implemented it. That was not acceptance of the employer saying that they couldn't do it. The HSUA took the view that it still wanted to reach agreements with the employers that did provide the wages and conditions that were sought and it didn't matter if the employer said that they didn't have the funds available. From the HSUAs point of view, they had to go and get it. We didn't care if they held a sausage sizzle outside Nauru House to raise the money, but the HSUAs position was that it was going to continue to press for it and it did so.

PN5173

We do say that the NGOs are proxies of the Government in providing these services and we do so for the reasons spelt out in our written submission, but particularly draw attention to the fact that if it wasn't the NGOs where were providing the services, DHS itself would be providing the services. They are DHS clients which are placed with outside providers and with the department's providers. We draw attention to the legislation and the analysis contained in our submission and also DHSs own documents which describe the services as DHS services.

PN5174

The NGOs are providing these services as proxies for the Government because as Mr Wallace said in his evidence, if the NGOs didn't provide the services, the Government would and they had developed this sharing with the NGO sector of the provision of disability services and retained the overall control and responsibility for it. Now, in respect of recruitment and retention, we say that there is - - -

PN5175

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Just before you go on to a new topic, can we just go back to the administrative wages for a moment?

PN5176

MR LANGMEAD: Yes.

PN5177

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Can you take me to where abouts in HSUA3A claim is made for salaries for administrative staff?

PN5178

MR LANGMEAD: It arises from the covering letter, your Honour.

PN5179

SENIOR DEPUTY PRESIDENT MARSH: Do we have the covering letter?

PN5180

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Do we have the covering letter?

PN5181

MR LANGMEAD: I do. I thought you did.

PN5182

SENIOR DEPUTY PRESIDENT MARSH: Well, I don't.

PN5183

SENIOR DEPUTY PRESIDENT CARTWRIGHT: If we do, it is not as part of HSUA - - -

PN5184

COMMISSIONER BLAIR: You can guarantee that the Commissioner won't have it.

PN5185

MR LANGMEAD: Well, it seems you haven't been singled out this time, Commissioner.

PN5186

SENIOR DEPUTY PRESIDENT MARSH: It is certainly not part of HSUA3A. Now, it may have been tendered separately.

PN5187

MR LANGMEAD: No. Your Honour, the letters which accompany these notices of initiation - sorry, these particulars, reads as follows:

PN5188

The notice of initiation of bargaining period. The Health Services Union of Australia seeks to reach an agreement ...(reads)... please find enclosed the notice of initiation of bargaining period attaching the claims -

PN5189

etcetera. That particular letter that I am holding is a letter addressed to Glastonbury Child and Family Services - - -

[10.58am]

PN5190

SENIOR DEPUTY PRESIDENT CARTWRIGHT: I mean, HSUA3A was the actual claim.

PN5191

MR LANGMEAD: They are the particulars, your Honour, yes, but the letter limited it to employees who are covered by those three awards and it is the Health and Allied Services Private Sector - Victoria - Consolidated Award 1998 which is the relevant award. I don't think this is contested by any of the parties at the bar table or the intervener. Indeed, it has been the subject of some considerable discussion in relation to the omission of the Attendant Carers Award. I think all the parties have accepted that it is those three awards which were the subject of the claim and the reason is that the covering letter delineated it so.

PN5192

SENIOR DEPUTY PRESIDENT CARTWRIGHT: But the claim itself is headed HSUA Disability/Early Intervention/Residential Care Salaries and Conditions Claim 2002.

PN5193

MR LANGMEAD: Your Honour, perhaps I can just refer to the letter again. In the second paragraph it says:

PN5194

Please find enclosed a notice of an initiation of bargaining period attaching the claims made by the union in respect of these employees -

PN5195

And "these" refers to the employees in the previous paragraph, which are the employees covered by the three awards.

PN5196

SENIOR DEPUTY PRESIDENT CARTWRIGHT: But the claim itself doesn't appear to make a claim in relation to the administrative staff.

PN5197

MR LANGMEAD: Well, with respect, your Honour, if they are employed in those disability, early intervention, residential care areas, yes, it does and they are.

PN5198

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Well, the letter makes a reference to employees in that award but the claim itself refers to HSUA Disability/Early Intervention/Residential Care Salaries and Conditions and what I am asking is are we to take it that that should be extended to include administrative as well.

PN5199

MR LANGMEAD: No, your Honour, the description of Disability/Early Intervention/Residential Care encompasses the administrative staff who work for the employers in those areas.

PN5200

SENIOR DEPUTY PRESIDENT CARTWRIGHT: I see. The reason I ask is I don't remember this being the subject of any evidence at all during the hearing. I am sure you will be able to take me to some but - - -

PN5201

MR LANGMEAD: No, your Honour. The only evidence - - -

PN5202

SENIOR DEPUTY PRESIDENT CARTWRIGHT: In all of the evidence we appear to have dealt with therapist and the residential care workers. Any substantial piece on administrative staff salaries for the moment eludes me.

PN5203

MR LANGMEAD: The only evidence about administrative staff is that of Ms Balshaw, who said that the admin staff perform the same sort of work as other admin staff elsewhere but were Yooralla specific, of course. That is, I think, referred to in our written submissions, your Honour.

PN5204

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Yes, it is.

PN5205

MR LANGMEAD: And beyond that, we do it on the basis of a clerk is a clerk is a clerk and particularly the two clerks in the public sector award and the private sector award are identically described.

PN5206

SENIOR DEPUTY PRESIDENT CARTWRIGHT: That was the question I wanted to raise with you. I did note that you only referred to the evidence of - or that statement of Ms Balshaw and I was wanting to ask you is there other evidence on which you rely.

PN5207

MR LANGMEAD: No, there isn't, your Honour.

PN5208

SENIOR DEPUTY PRESIDENT CARTWRIGHT: It is a fairly substantial re-rating, is it not, of administrative salaries that the union is claiming?

PN5209

MR LANGMEAD: Sorry, your Honour?

PN5210

SENIOR DEPUTY PRESIDENT CARTWRIGHT: It is a fairly substantial re-rating of administrative salaries - that is probably not the right word but - - -

PN5211

MR LANGMEAD: It is a considerable increase, yes.

PN5212

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Yes, and the only evidence on which you rely is the statement of Ms Balshaw, attachments C and D and that is the evidence. And the submission is that the rates should be comparable.

PN5213

MR LANGMEAD: Yes, your Honour.

PN5214

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Thank you.

PN5215

MR LANGMEAD: We say that on the basis that the attachments will demonstrate that comparability and if they don't in their present state, as I said, we will remedy that and provide the Commissioner with a sufficiently comprehensive attachment.

PN5216

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Can I just venture the observation that you are asking the Bench to make a large decision on relatively small evidence.

PN5217

MR LANGMEAD: Your Honour, there are very few people engaged in this type of classification in this sector. It is not a large sector. But to answer your Honour's question directly, yes, we are.

PN5218

SENIOR DEPUTY PRESIDENT CARTWRIGHT: It is not too late to particularise how many there are and what the cost might be and what the impact might be.

PN5219

MR LANGMEAD: We are not in a position to know that, your Honour.

PN5220

SENIOR DEPUTY PRESIDENT CARTWRIGHT: It is the sort of thing that would normally be the subject of considerable evidence, is it not?

PN5221

MR LANGMEAD: Well, your Honour, as we say, a clerk is a clerk and, relevantly, they are identical in terms of the award, the instruments which describe them.

PN5222

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Well, there are lots of clerks awards that we could look to for rates.

PN5223

MR LANGMEAD: Yes, there are, your Honour. If the Commission pleases, I was going to deal with the recruitment and retention issue. We say in brief the overwhelming evidence as indicated in attachment B to the written submissions demonstrates that there is a real problem in this sector. We say that you can infer from the evidence of - the widespread evidence that you did receive that it is a problem throughout the sector and we say that conclusion is supported by the documentary evidence to which reference is made in the submission. But we particularly draw attention to the fears expressed by the employers - and the quotations are referred to in the submission - about their fears that employees will simply leave the NGOs if they don't achieve a comparable outcome in this case.

PN5224

COMMISSIONER BLAIR: Has the union formed a view as to what may happen, for instance, if the Bench says, well, okay, we recognise your arguments that there is a recruitment and retention problem, there is an inequity between the private and public sector; therefore, we make an award in the terms sought, and DHS says, well, that is fine but they are not going to get one cent more out of what has been put on the table in terms of funding, so everything over and above that will have to be funded directly by the individual employers?

PN5225

Now, some employers do fly by the seat of their pants; no question about that. They rely entirely on 100 per cent government funding. But there are other employers that might be able to but, for whatever reason, choose not to make some other offers in terms of improvement in other terms and conditions. What happens if those employers overall say we have no additional funding to fund this award and therefore we are going to have to make dramatic changes to the delivery of services, the type of services, cut back on services and possibly make redundancies? Has the union given any thought to what it may do in that instance or the repercussions of that?

PN5226

MR LANGMEAD: Can we start off by saying, Commissioner, and we say this in our submissions, that that is, with respect, not a realistic forecast. The realities are that if an NGO couldn't continue to provide the service because the costs were too great, it would hand it back to the government. The government would either have to find another service provider. If it wanted to contract it out, it presumably wouldn't be able to do so on the basis that it wouldn't - if it refused to increase its funding, so it would have to continue to do it itself and it would continue to do it itself. Mr Wallace said so.

PN5227

In that situation, Commissioner, the government would be paying up to 31 per cent more for the provision of services, and that figure comes from the Auditor-General's report. So it clearly is extremely unlikely that the government would ever go to that position because it is going to cost it more to take the services back and run it themselves than it is to have the NGOs running them even at a higher fund rate.

PN5228

COMMISSIONER BLAIR: But no one knows for sure what the outcome would be if the award was made in the terms sought. You assume but no one knows for sure.

PN5229

SENIOR DEPUTY PRESIDENT MARSH: Yes, and we are obliged to go a little bit deeper than assertion or assumption about what realistic forecasts there are because it is really a dilemma. You have just put a submission that there is a fear on the evidence that employees in this sector will leave NGOs because of recruitment and retention problems. The dilemma is that if we meet the claim those people may leave the sector anyway because the NGOs or the structure of that sector may be altered in such a way that it does mean the NGO sector as we know it is not embraced and is, in fact, diminished.

PN5230

So, either way, there may be people leaving the NGO sector that is a dilemma that we have to balance in the competing submissions that are put to us. You put one submission that the services will be retained in one form or the other. There is no guarantee of that. We have not been guaranteed of that by the government and Mr White might assure us that that will happen. It is possible we will have a smaller sector but even if they are funded directly, it will still mean the NGO sector doesn't stay at the same size with the same service provisions that it currently does, and that is something we do have to take into account. There is 150-odd employers that we are dealing with as well as your members in this claim.

PN5231

MR LANGMEAD: Your Honour, we have referred to Senior Deputy President Riordan's comments in one of the teachers cases about how the Commission should regard this situation and it is to the effect that, well, if the Commission considers that as a matter of merit and equity something should be awarded and that happens to fall outside the budgetary parameters of the government, well, so be it, but that shouldn't stay the Commission's hand, and that is certainly what we say here, particularly - - -

PN5232

SENIOR DEPUTY PRESIDENT MARSH: Well, I have just asked you to answer a question, Mr Langmead, and that is not answering it.

PN5233

MR LANGMEAD: I am sorry, your Honour, would you mind - - -

PN5234

SENIOR DEPUTY PRESIDENT MARSH: How we resolve the dilemma that the NGO sector and the employees that form that sector may alter as a result of our decision, because if we grant your application in full it may mean there are consequential changes to the structure of the sector, the number, the size, the parameters of the NGO sector. If we don't, we are faced with the situation that employees may leave the sector anyway and hence the sector is diminished, it is changed because without increased funding some of the NGOs, and the evidence says overwhelmingly, have not got other sources to fund the claim that you seek. So either way there could be restructuring of the sector and impacts on employees and employers. That is the question I have asked you to answer, not to tell me what Deputy President Riordan said in a teachers case a decade ago.

PN5235

MR LANGMEAD: Well, with respect, your Honour, that is our answer. That is what the Commission should do - - -

PN5236

SENIOR DEPUTY PRESIDENT MARSH: All right. Thank you, Mr Langmead.

PN5237

MR LANGMEAD: - - - in respect of that - - -

PN5238

SENIOR DEPUTY PRESIDENT MARSH: If that is your answer, I understand your answer. I just want to be clear to you and to the union the dilemma that we are facing in terms of what the impact of the relative positions might be as a result of this case on 158 employers and as a consequence upon employees in that sector. It is just not a circular argument to say if they don't work here, they will work there. It may be more far reaching than that and that is something that we have to weigh up in the balance.

PN5239

It would be remiss of me not to raise it with you because that is certainly probably the fundamental concern I have got, speaking only for myself, in terms of that dilemma, what happens if we don't meet your claim, what happens if we do meet it, in terms of the impact on the sector. It is a very far reaching application. It is not Vision Australia. It is a sector. It is all employees in a sector and the ramifications are much greater than if we are looking at one or two employers where it can be measured, there can be other considerations taken into place.

PN5240

So I understand the union's position but equally you must understand that there are concerns of just making assertions grant the claim because the funding will be met one way or the other. It is something that we have to take very, very seriously before we could reach that conclusion that you are relying on from Deputy President Riordan and you may convince me, but at this stage I am just saying this is the dilemma we are facing in terms of the potential restructuring of the sector.

PN5241

COMMISSIONER BLAIR: I must say, Mr Langmead, I have the same concerns as her Honour and I am sure that her Honour has raised the issue about integrity of any award that this Commission makes. What is the point in making an award in the terms sought by the union if at the end of the day, the award covers no-one, because no-one is in the industry in that particular sector any more, they have moved out, non-Government organisations have either reduced their services or cut them down because they are simply unable to provide the services because of lack of funding? All that has got to be weighed up in the minds of the members of the bench and I would have to say from a personal point of view that it is simply not good enough to say to this bench, well, look, it will be fixed.

PN5242

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5243

COMMISSIONER BLAIR: It will be fixed. One way or the other, either the Government is going to have to pick up the services and there is no proof of that at all. Now, the Government may change their policy. The Government may say, okay, we won't provide some of the services that we provide now, we will in fact provide some form of allowance for families to take over and try and do some of the things that institutions are doing now. We don't know what the Government is going to do. You don't know what the Government is going to do.

PN5244

MR LANGMEAD: No, Commissioner, but we do know what the Government's present policy is.

PN5245

COMMISSIONER BLAIR: Right, and that may change, policy may change.

PN5246

MR LANGMEAD: Well, we can't deal with imponderables, with respect, Commissioner. How can we possibly - - -

PN5247

COMMISSIONER BLAIR: That is what you are asking us to do.

PN5248

MR LANGMEAD: Well, we are not, with respect. We have a situation where the Government has failed to indicate to the Commission because it hasn't made a decision about what it will do. Now, on the material that we have presented to the Commission and the evidence of the Government witness, Mr Wallace, we say that you can safely conclude that funding is going to happen and we do so on the material provided I have referred to in our written submissions, on the evidence referred to in our written submissions. It is not as, with respect, your Honour, just an assertion. It is argumentative, but based on the evidence that we have put forward and we say that you can safely conclude that that is the most likely outcome.

PN5249

COMMISSIONER BLAIR: Mr Langmead, the only things that will make me happy and that will give me any peace of mind is if one or two things happen, that the Government stands up and says, (a) we will fund the outcome of any MX decision by this bench or, (b) we are not going to fund it, but if you make the order in the terms sought by the union and there is a mass exodus from the non-Government sector and that non-Government organisations reduce the services that they are providing to these people in the community, we will pick it up. Those are the only two things that would make me happy.

PN5250

MR LANGMEAD: Well, with respect, Commissioner, you already have the latter from Mr Wallace.

PN5251

COMMISSIONER BLAIR: Well, I would prefer - I heard Mr Wallace's evidence and I would prefer the Government confirm that evidence in their submissions, that they confirm what Mr Wallace says, that they would pick up whatever the non-Government sector is prepared to discard.

PN5252

SENIOR DEPUTY PRESIDENT MARSH: And if the Government make that submission today, well, I agree with the Commissioner, I would be a lot more content than I am at the moment in terms of what the options for this sector are, so I guess it is an issue that Mr White is on notice - - -

PN5253

MR LANGMEAD: Well, we won't hold our breath on that issue, your Honour.

PN5254

SENIOR DEPUTY PRESIDENT MARSH: Well, if it has been put in the evidence in that way that you put it, I think it should be a very simple submission for the Government to put and it would certainly make me a lot, lot happier than I feel at the moment in terms of weighing up the evidence that is before us on this matter.

PN5255

MR LANGMEAD: If I could just briefly address the other side of the coin that the Commission has been discussing with me, is the effects if the Commission doesn't concede the claim.

PN5256

SENIOR DEPUTY PRESIDENT MARSH: And that is the dilemma.

PN5257

MR LANGMEAD: Yes.

PN5258

SENIOR DEPUTY PRESIDENT MARSH: That is why it is described quite simply as a dilemma. If we don't do something, we have got the evidence that you have put and you have put the fear of leaving NGOs and that is the other side of the coin, absolutely, so, yes, address that.

PN5259

MR LANGMEAD: And not only a desertion by employees, but those that remain are going to be very disgruntled and you are going to have an ongoing festering industrial sore which in our submission is much more likely on the material you have before you to cause - to adversely affect the viability of the NGO sector than any fear and we say, with respect, unreasonably held fear that the Government might not come to the party.

PN5260

SENIOR DEPUTY PRESIDENT MARSH: So you on my description of a dilemma, the balance of the evidence, the weight of the evidence would be that it would be better to grant the claim in terms of stability for the sector than to not do anything because of a concern expressed about the consequences of granting the claim where there is not funding or a commitment to maintain the level of the services and the level of employment?

PN5261

MR LANGMEAD: Yes, your Honour, and you can do that by assessing the likelihood of the two scenarios or perhaps the three scenarios, Commissioner, that would result and in our submission they are as we say and that is also, we submit, based on the witness evidence and the documentary material that is referred to the written submissions.

PN5262

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Is there anything further you want to say on the retention issue?

PN5263

MR LANGMEAD: No, your Honour. I did refer to attachment B and the extensive evidence that is canvassed there. It is in summary form, but the references are contained within it.

PN5264

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Well, let me raise with you one issue. From my own knowledge of this area, I have a difficulty. When people talk about retention, it is always the easy path to look at salaries or wages and it is very common that people do that. In fact, the academic literature in this area reveals that on a consistent basis, salary is one of the second order issues that comes into play in decisions about retention, etcetera, etcetera. Most of the evidence that we have been presented with in these proceedings has really been opinion or hearsay evidence.

PN5265

Is there any hard evidence you are able to present on the effect of a relatively small adjustment in salaries feeding through to retention? And I say relatively small because let's just take for argument's sake the celebrated - I think it is W1, isn't it, Mr White, the table for therapists where the Government's numbers indicate that in order to achieve parity, there is something like a 10 per cent adjustment required in salaries. I think it is nine point something, but let us say 10 per cent. Is there any hard evidence to indicate that a relatively small adjustment of 10 per cent is actually going to have any real impact on retention?

PN5266

MR LANGMEAD: Your Honour, we don't have any technical study of that nature. What we do have is the consistent evidence that the employees concerned are in a somewhat unusual situation, your Honour, in that there is somebody just across the corridor in some instances, but just up the road, getting that 10 per cent now and another three per cent in March, so it is not just the figures that are in W1, it is a bigger margin than that.

PN5267

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Yes, I mean, those sort of things are taken into account in the sort of rigorous studies that are being done on these sorts of surveys?

PN5268

MR LANGMEAD: Well, your Honour, those surveys may say that. They are not in evidence and with respect, I can't comment any further on them, but we do say that the evidence here and it is the only evidence is that it is a very material factor and the employees are acutely aware of the salaries that are paid and wages that are paid in the comparable public sector and they don't think it is fair and they want it remedied and if they don't, then a lot of them are going to do something about it, or are likely to do something about it.

PN5269

SENIOR DEPUTY PRESIDENT CARTWRIGHT: The evidence that we have on that is mainly opinion evidence and hearsay.

PN5270

MR LANGMEAD: Well, to the extent that it is hearsay evidence, that is so, but inevitably so it would be any survey results are hearsay. They are just on what people have told them and what people believe. So - - -

[11.22am]

PN5271

SENIOR DEPUTY PRESIDENT CARTWRIGHT: I mean, that is why there has been certain rigorous academic work in this area because, you know, the easy answer is to refer to salaries, and people often do it. And therefore in understanding the real dynamics of retention, it is a difficult issue to get to grips with, because the easy - or the service answers are not necessarily the actual answers. And consequently there is quite a body of evidence in this area. And as I say, the evidence consistently indicates that salaries generally are second order issue.

PN5272

MR LANGMEAD: As I say, that may or may not be so, your Honour, and it is not in evidence in this case, and I can't deal with it any further, your Honour. But I can I say that there is a further dimension in this case and that is the industrial reality. And the industrial reality is that these employees were prepared to take industrial action - in respect of the direct care workers, I believe that was unprecedented industrial action - in order to seek to achieve what their evidence has been, was a fair outcome.

PN5273

And whilst it may in some survey that might have been undertaken, salary may have come out as a different option, different priority. In this case it has been very much the subject of, we say, specific evidence and as I say, in the industrial context in which it is being pursued, is clearly very much a major concern of the employees concerned.

PN5274

SENIOR DEPUTY PRESIDENT CARTWRIGHT: It is also in evidence before us, isn't it, that the employees, particularly in therapist areas, probably acted with a wrong understanding of what the Government's actual offer was, because the Union's arithmetic was wrong?

PN5275

MR LANGMEAD: Well, with respect, your Honour, I don't think that they did concede that the Union's arithmetic was wrong. And what they did in some cases concede, as they hadn't worked out exactly what the Government's offer was worth, but they knew it was less, and when one has regard to the fact that there is a further 3 per cent coming March, the discrepancy is more than the $300 or $400 that Mr White was putting to witnesses, which of course, is quite valid, as of now. But it is not valid as of March.

PN5276

SENIOR DEPUTY PRESIDENT CARTWRIGHT: But you wouldn't dispute, would you, that they acted with an inaccurate understanding of the actual offer?

PN5277

MR LANGMEAD: No, they said that they didn't - either hadn't or didn't know the exact calculation, your Honour. I don't - I do with respect dispute that they had an inaccurate perception.

PN5278

SENIOR DEPUTY PRESIDENT CARTWRIGHT: And again this is one of those complex and difficult areas, and to make a substantive case, we would generally be looking at a much more rigorous approach than you have taken us to. But that is an observation. Carry on.

PN5279

MR LANGMEAD: In response to that, your Honour, can I say that these sort of factors were factors taken into account by the Full Bench in Vision Australia and the Full Bench in Tracey Lodge, I think, and the ANF and Airon cases, where - and indeed - - -

PN5280

SENIOR DEPUTY PRESIDENT CARTWRIGHT: I am familiar with the sort of evidence that is often advanced in MX arbitrations. I mean, the last MX arbitration I was on, it was a similar issue discussed equally poorly. You know, so Full Benches make observations, but they are hamstrung by the sort of evidence that is before them.

PN5281

MR LANGMEAD: Yes, your Honour. In respect of any basis for a differential between the rates, it is our submission that ultimately no reason was put forward of any validity - or no reason remained, I should say, other than Mr Wallace's proposition that salary packaging in fringe benefits tax made the sectors different, or the work is different. When one analyses the material as we do section on the basis of the differential from pages 16 onwards, through to page 21, we say that the end result of that is that that is the only thing which stands as something which can be pointed to as a differential. And we say that is not a proper basis for a differential as to wage rates. It is not a differential that has been taken into account in the past with the exception of the factoring in of the loss of fringe benefits tax, salary packaging benefits in the public hospitals, which Commissioner Blair took into account in his section 111AA recommendation decision. And I will come to that in due course.

PN5282

In terms of the interests of parties, we refer to the interests of the parties in maintaining the viability by overcoming the recruitment and retention problems. In terms of public interest, we draw attention to the public interest game by providing proper services to clients and to the importance of the principle of equity. In relation to productivity, again we refer to the recruitment and retention benefits granting the claims. The reduction in the use of agency and casual staff and the potential reduction in turnover.

PN5283

In respect of the conduct of the negotiations, these were long drawn out negotiations. The positions of the parties were entrenched. The employers consistently maintained that they could only do that which they were funded to do. And that they had nothing else left. And only were able to modify their position when the Government made more funding available. And I think they have made two funding offers, one coming in about May of this year.

PN5284

The HSUA maintained its position for a very long time. However it, when Commissioner Blair - and it had regarded the prospects for reaching agreement as having been exhausted, and asked Commissioner Blair to so find, and have the matter referred to a full bench for arbitration. Commissioner Blair said, no, we will give it a last shot. Commissioner Blair said, we will give it another - a last shot, convened a conference for a short time after that.

PN5285

The Union did draw up an amended proposal which it forwarded to the employers. And the Union in that document did make significant concessions from its previous position. It has been criticised for doing that, because it said in a letter, please respond in two days. It didn't demand a response, by the say, it sought a response. That is understandable, given that - Commissioner Blair heard the matter on 29 July and he said, so the Commission is prepared to give it one more go despite the fact he doesn't hold up much hope, but is prepared to give it one more go, and it was set down on 8 August for a conciliation conference.

PN5286

So it was some eight days - nine days later. It is HSUA53, which was the letter outlining - attaching the agreement. And that is the letter which was written on 6 August, and we were criticised for asking for a response by 8 August, which was the day of the conciliation. So that was the purpose of asking for a response by 8 August. It was the date upon which we were going to attempt to conciliate it. Now - - -

PN5287

COMMISSIONER BLAIR: I think that is the same letter that actually demanded that the Commission respond within two days to the log of claims as well, and I didn't employ anybody, so I didn't respond.

PN5288

MR LANGMEAD: Well - - -

PN5289

SENIOR DEPUTY PRESIDENT CARTWRIGHT: It is indeed that letter.

PN5290

MR LANGMEAD: It is indeed that letter, Commissioner. We again, says the Union didn't demand a response of anybody. It asked for a response, but it clearly was providing the document to you for your information and erroneously requested your response.

PN5291

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Yes.

PN5292

MR LANGMEAD: If I can retrospectively apologise for that error in correspondence.

PN5293

COMMISSIONER BLAIR: I actually thinking of writing a letter to DHS asking whether they would fund anything that I may acquiesce to.

PN5294

MR LANGMEAD: And I think we know what the answer would have been, Commissioner.

PN5295

COMMISSIONER BLAIR: Hence I didn't write the letter.

PN5296

MR LANGMEAD: Now Mr Sullivan in fact was able to respond on behalf of DHS, and did so by rejecting the claim. Said it was - the difference between the Government funding position and the Union's claim was still too great, and it wasn't worth taking the Union's minimum position back to Government. And that is - transcript reference for that is paragraph number 4848.

PN5297

So what we say about the criticisms of the parties in negotiations is that they are ill-conceived and misdirected. The parties were in difficult positions. They were in entrenched positions, for whatever factors. The negotiations went on for a very long time. They had been going on for some 18 months. Perhaps a bit short of that, but 15 months certainly. And had resulted in DHS amending its funding offer in about May. And then the HSUA modifying its position in May - in August, sorry.

PN5298

In our submission, there is nothing to be made from the conduct of the parties in negotiations. There is nothing which should influence the bench in the determination it would make by the conduct of the parties in negotiations. And indeed, there is nothing remarkable about the conduct of the parties in the negotiations.

PN5299

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Is what you are saying - does that amount to, over a long period of time the parties were so wedded to their positions that they couldn't step back and see the wood for the trees?

PN5300

MR LANGMEAD: No, I am not, your Honour - it doesn't matter why the parties took the positions that they did. They are entitled to take whatever positions they want to, and to seek to maintain those positions. Indeed, whilst it is more unusual, sometimes parties escalate them. So it really was a situation where the parties were saying, well we are going to stick to our guns. And certainly the Union did that for a very long time before it made any concession at all.

PN5301

Our written submissions contains an analysis of this concept of negotiation, and involving concessions. We say that the approach in Sahai was based on the particular legislation that was before it, and that the approach subsequently taken by the EFA Full Bench and then the decision of Commissioner Holmes, reflects a more appropriate approach to the concept of negotiation. But in any event, the various statutory tests about whether or not negotiations are negotiations, they can have different meanings according to which part of the statute you are looking at.

PN5302

For example, the test that Commissioner Blair was looking at was not, with great respect, we say, erroneously so, but the legislative scheme that he was looking at is not the same as what we are now looking at. The legislative scheme relevant here is the extent to which the conduct of the negotiating parties during the bargaining period was reasonable. And again, the negotiating parties, has a particular connotation itself, that you are a negotiating party because you are in a bargaining period. Whether or not your negotiations are fruitful, or pig-headed, you are still a negotiating party. In our submission there is nothing which can be said about - indeed even pig-headedness, not that we would make any concessions in that regard, but that it would necessarily be unreasonable. Parties are entitled to press for the best bargain they can, and to do whatever they can to try and achieve that. And that is what we say happened here.

PN5303

Now, in respect of the half day model we refer in particular to the evidence of Mr Scates, who had worked the half day model at E.W.Tipping, and arising from his evidence we did a calculation, which is attachment E, to the submission, which shows two different shifts worked. And shows the difference in earnings on those shifts. And the difference in earnings is quite considerable, even though the rates for the half day model have a 40 per cent loading. The practical application of those shifts is a stark as is shown in attachment E.

PN5304

And even on a week day shift, there is a dramatic discrepancy. And so that we say that the Union's original proposal to rectify the weekend situation in part by working by paying the higher penalties, paying the penalties, or shift allowances, when one has a look at the figures, that doesn't address the whole problem. And the whole problem is the fact of the model itself. And it provides a very poor salary option or wage option for the employees who have to work it. They are severely disadvantaged.

PN5305

SENIOR DEPUTY PRESIDENT CARTWRIGHT: So the claim in HSUA3A was not - weekend - I think the evidence was, weekend penalties to apply to employees working on half day model.

PN5306

MR LANGMEAD: Yes.

PN5307

SENIOR DEPUTY PRESIDENT CARTWRIGHT: So which one of these boxes is that, in attachment E?

PN5308

MR LANGMEAD: If - in attachment E - if there were penalties of shift allowances on the bottom box, there would be a different result, which we haven't calculated, your Honour.

PN5309

SENIOR DEPUTY PRESIDENT CARTWRIGHT: So attachment E doesn't contain any figures for the claim the Union made?

PN5310

MR LANGMEAD: No, your Honour, it contains figures which show what happens if they don't get them. And compares them with people who are not working that model.

PN5311

SENIOR DEPUTY PRESIDENT MARSH: And that is to justify why it should be abolished, because it is inequitable?

PN5312

MR LANGMEAD: Yes, your Honour.

PN5313

SENIOR DEPUTY PRESIDENT MARSH: Yes. Yes, I follow.

PN5314

MR LANGMEAD: But for the payment of shift allowances and penalties on weekend, they provide some redress but when you look at the figures as a whole, it is so inequitable that it shouldn't be allowed to continue.

PN5315

SENIOR DEPUTY PRESIDENT CARTWRIGHT: And are you able to say what the figures are for the actual claim that was made in HSUA3A?

PN5316

MR LANGMEAD: Not presently, your Honour. I will attempt to have those instructing me do that and we can let the Bench know. In addition, we have made reference to the performance audit, which is VHIA2, which found that the use of 24 hour shifts can mismatch staffing levels for client needs. And the resultant concern from the audit, that the Victorian standards for disability services may not be met. So we say there is an additional reason beyond the inequitability of it - the inequity of - for the employees working it. It also doesn't deliver, or has a detrimental result in service delivery, or can have.

[11.44am]

PN5317

In respect of salary packaging, the union has sought a clause which will enable salary packaging which is clause 14 in attachment A to the written submissions. Now, that clause is intended to have the effect of requiring employers to provide salary packaging without claw back, discount, profit sharing, whatever one wants to call it and ensuring that superannuation is calculated on the pre-packaged wage rate.

PN5318

SENIOR DEPUTY PRESIDENT CARTWRIGHT: It was in evidence, was it not, that employers are not required to calculate superannuation on the pre-packaged rate?

PN5319

MR LANGMEAD: There was that evidence, your Honour. Mr Kolmus I think gave that evidence and he said - I think in effect he was so surprised, he got a second opinion from the Taxation Department about it. It was also the evidence of others that they did not have their superannuation diminished, but assuming that the Taxation Office was correct, then there is a need in providing salary packaging in the union's submission to ensure that the superannuation is calculated at the higher level.

PN5320

SENIOR DEPUTY PRESIDENT CARTWRIGHT: In other words, the evidence was that it is a discretionary matter whether superannuation is calculated on pre or post-packaged?

PN5321

MR LANGMEAD: Yes.

PN5322

SENIOR DEPUTY PRESIDENT CARTWRIGHT: What is the evidence that we have to rely on in making a decision that we should regulate an area that is an area of discretion?

PN5323

MR LANGMEAD: It is not so much a question of evidence, I don't think, your Honour.

PN5324

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Prejudice, perhaps?

PN5325

MR LANGMEAD: Pardon?

PN5326

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Prejudice, perhaps? I mean, on what basis do we make a decision like that, if we don't have evidence?

PN5327

MR LANGMEAD: Well, there is salary packaging available to some. It is applied unevenly, we would say inequitably, even within particular employers. Yooralla, for example, I think only allows it to health professionals and not to direct care workers and takes 50 per cent back. Now, we say that is an inequitable result amongst employees.

PN5328

SENIOR DEPUTY PRESIDENT CARTWRIGHT: That is one example, so do we regulate the whole sector because there are one or two exceptions?

PN5329

MR LANGMEAD: Well, yes, you do, your Honour, but I think there was more than one or two exceptions.

PN5330

SENIOR DEPUTY PRESIDENT CARTWRIGHT: There were two, were there not? There was Yooralla and Scope?

PN5331

MR LANGMEAD: They were the ones who do the 50 per cent trick and Vision Australia I am instructed does also.

PN5332

SENIOR DEPUTY PRESIDENT CARTWRIGHT: I don't think so, on the evidence.

PN5333

MR LANGMEAD: They didn't give any evidence. I think it is probably - - -

PN5334

COMMISSIONER BLAIR: Vision Australia or the Royal Victorian Institute for the Blind and there are a couple of others as well that came out in evidence.

PN5335

MR LANGMEAD: I think it might be in the survey, in fact.

PN5336

COMMISSIONER BLAIR: Yes.

PN5337

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Yes, the only two in the survey taking 50 per cent of the benefit were Scope and Yooralla. There were others deducting administrative expense, etcetera, but the question remains, given that this has traditionally been an area of discretion between employer and employee, why would we regulate an area that has been a discretionary matter traditionally? When I say traditionally, salary packaging - - -

PN5338

MR LANGMEAD: Well, one reason, your Honour, is for comparability. It is something which is available to health professionals in public hospitals the public sector.

PN5339

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Yes, at half the level.

PN5340

MR LANGMEAD: Yes.

PN5341

SENIOR DEPUTY PRESIDENT CARTWRIGHT: In other words, the salary packaging amounts available to people in public hospitals are half what they are in this sector. For the general community, of course, they are zero.

PN5342

MR LANGMEAD: Yes. There was also - I think it might have been the evidence of Mr Chant about the reasons for its introduction, being in part to assist NGOs to attract and retain staff. Now, that is another way of addressing what we say is a very crucial issue in this case, that if all employees had access to salary packaging, then that would make it a more attractive proposition for them to work for NGOs. Indeed, it would probably make it a quite unattractive proposition. Can I hand to the Commission a calculation, some examples of effects of salary packaging.

EXHIBIT #HSUA55 EXAMPLES OF EFFECT OF SALARY PACKAGING

PN5343

MR LANGMEAD: They are two examples of a health professional who is a part-timer at grade 2, year 4, which we say is a fairly typical level and, indeed, if the Commission will recall, Ms Chan who gave evidence and was asked a number of questions about her salary packaging arrangements, she, in fact, is a grade 2, year 4, working part-time of 24 hours a week. I particularly want to draw attention at this point in time to the effect of superannuation and the Commission will see that we have factored that in and in the circumstances where super is paid on the packaged amount - sorry, the after package amount, it makes a considerable difference to the benefit of the package and that we would say is a reason to justify the inclusion in any award clause that retains the superannuation at the pre-packaged level.

PN5344

SENIOR DEPUTY PRESIDENT CARTWRIGHT: You haven't given examples of the other side of the equation, namely the cost to the employer, to be able to work out the impact.

PN5345

MR LANGMEAD: I am sorry, your Honour, I don't - - -

PN5346

SENIOR DEPUTY PRESIDENT CARTWRIGHT: I mean, these figures illustrate something that was quite interesting by-play during the hearing, wasn't it, that these figures clearly indicate that even if the employee was to get half of the salary packaging benefit and the employer half, half of something significant is worth more than what they are getting now, but that was an interesting side issue.

PN5347

MR LANGMEAD: Well, it would be if they were paid at a higher rate, yes.

PN5348

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Sorry?

PN5349

MR LANGMEAD: It would be if they were paid at - yes, it must be so, your Honour. If there is a benefit, half the benefit is better than no benefit at all.

PN5350

SENIOR DEPUTY PRESIDENT CARTWRIGHT: It is just a matter of arithmetic, isn't it?

PN5351

MR LANGMEAD: Yes, but the ultimate size of that benefit may be not necessarily as large as it might otherwise be thought, but for the purposes of supporting our draft award claim, we rely on the effect on salary packaging of calculation of super at the different levels and for a full-time employee, clearly it would be a more dramatic effect again.

PN5352

SENIOR DEPUTY PRESIDENT MARSH: Mr Langmead, wouldn't the insertion into an arbitrated award, the salary packaging along the lines that the union is seeking, wouldn't that strengthen the argument that salary packaging should be taken into account in wage comparisons? It is a very different situation to something prescriptive as sought by the union in the award to something that doesn't exist in the award or exists as a facilitative provision in an award.

PN5353

MR LANGMEAD: Well, we would say no, your Honour, because what we put forward as a factor to provide the attraction and retention, to address the attraction and retention factor - - -

PN5354

SENIOR DEPUTY PRESIDENT CARTWRIGHT: So there should be a special attraction and retention allowance? I mean, because logic is not on your side in your answer. I mean, are you saying that this should be corralled and identified as a special allowance?

PN5355

MR LANGMEAD: No, your Honour, we are just saying that there should be salary packaging made available to employees. Given that it is a facility which is available to some, it ought to be available without - - -

PN5356

SENIOR DEPUTY PRESIDENT MARSH: Without discretion to everybody, so why shouldn't it therefore be taken into account in an argument that looks at comparable wages, because comparability shouldn't be measured simply on one line. As you have stressed, it is a package of wages and conditions, one of which on the HSUAs claim should be a prescriptive salary packaging obligation imposed upon employers to introduce. That is very different from just having a discretionary or even a facilitative clause such as Vision Australia has got in an award. This is going one step further. It is a prescriptive clause.

PN5357

MR LANGMEAD: Yes, it is.

PN5358

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5359

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Which then provides a yardstick which founds other claims.

PN5360

MR LANGMEAD: I am sorry, your Honour?

PN5361

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Which then provides a precedent which founds other claims for comparability.

PN5362

MR LANGMEAD: I am not sure I follow your Honour.

PN5363

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Well, I mean, if we regulate an area that is currently discretionary and as her Honour suggests, logic requires therefore that you take it into account and work out the net benefit for the employee, then everybody else starts doing the same sums, do they not, in saying, well, we are looking for comparable wages and conditions, where conditions deliver net benefits to the employee, therefore we always have to work out the after tax benefit to the employee which means that salary packaging as an area should be regulated. I would like to run an argument like that.

PN5364

MR LANGMEAD: It would be a very difficult argument, your Honour, because the effect - - -

PN5365

SENIOR DEPUTY PRESIDENT CARTWRIGHT: It is logically consistent.

PN5366

MR LANGMEAD: Well, the effect of salary packaging is so disparate, depending on a large number of factors, which include the income of the person. If you are low income, part-time, it may result in no benefit at all. If your income is sufficiently low - - -

PN5367

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Yes, but the significance of that is it determines the marginal tax rate at which you calculate the benefit. I mean, that is the only impact, is it not?

PN5368

MR LANGMEAD: Yes, your Honour, but it may be that there is almost negligible impact, particularly if superannuation isn't remedied.

PN5369

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Well, the tax-free threshold is $6000 and the lowest tax rate is 17 per cent, so once you get over the tax-free threshold, you are paying tax at 17 per cent, then the next tax bracket is 30 per cent, then 42, then 47, to which the Medicare levy is to be added at one and a half per cent, so in other words, you can do the numbers and work out what the net benefit to the individual is, particularly in this sector, because salary packaging is available on virtually anything.

PN5370

MR LANGMEAD: You can certainly do it with individuals, your Honour, of course you can, yes, as we have done with the example which corresponds with Ms Chan, but to do it with - to be able to work out how you would assess that for the purposes of discounting of salary, for example, you would have all sorts of factors involved, including people like Ms Chan who don't take advantage of it, who choose not to take advantage of it, for whatever reason.

PN5371

SENIOR DEPUTY PRESIDENT MARSH: But that is a different issue, that is a different issue. If it is prescribed and somebody doesn't want to take advantage of it, that is a matter for that person. That shouldn't be taken into account in looking at relative or comparable wage rates in different sectors that you are now seeking to compare with as the basis of your claim. If you are seeking a prescriptive salary packaging proposal in the award, logic must follow that that becomes part of the comparator with the people with whom you are seeking parity and I would like to see those figures at an appropriate time on the basis of the classifications set out in exhibit W1.

PN5372

MR LANGMEAD: I am sorry, what figures?

PN5373

SENIOR DEPUTY PRESIDENT MARSH: The figures built in a salary packaging regime such as sought in clause 14 of the award attached to the written submissions that it is prescriptive, on the assumption that employees do volunteer to take advantage of the salary packaging proposal that you are all seeking to have prescribed in the award.

PN5374

SENIOR DEPUTY PRESIDENT CARTWRIGHT: In other words, what is the discount factor that should be applied to the union's claim?

PN5375

SENIOR DEPUTY PRESIDENT MARSH: Yes, because as I said to you, it is no longer voluntary, it is no longer discretionary, it is a prescription. The only way in which you don't apply it is if an individual employee doesn't want to and that is his or her business and no concern of anybody here, for reasons they don't want to avail themselves, such as Ms Chan didn't, but apart from that, there is an obligation that you are seeking to have imposed upon employers that is not facilitative, it is not discretionary.

PN5376

MR LANGMEAD: And which costs them nothing.

PN5377

SENIOR DEPUTY PRESIDENT MARSH: And therefore in terms of comparison, your case is based on comparison with other sectors. What I would like to see if the comparison with the sectors with whom you are comparing yourselves, the wage parity building in salary packaging for the people that you are representing in the application today, because it becomes something that is an obligation on employers, so it is relevant to the comparator. Just as the employer is arguing it shouldn't be prescription, their case for taking into account is weakened, but your case for not taking into account salary packaging is weakened when you want a prescriptive position.

PN5378

There must be some correlation between the degree of compulsion or obligation versus discretion in terms of how relevant it is in a comparison with other sectors in looking at actual wage rates available to a particular classification level and that is what I am asking you, could we have some comparative wage rates, that on the basis that we accept your argument that salary packaging becomes prescriptive, because we don't want counter plans from other sectors saying that sector is now ahead because we don't have the same access to salary packaging. At the end of the day, this would be an award provision that is available to one group. It is relevant to the comparison, because this claim has been brought on the basis of comparisons. That is the claim.

PN5379

MR LANGMEAD: Your Honour, there is, in fact, something which is indicative of the value of salary packaging.

PN5380

SENIOR DEPUTY PRESIDENT MARSH: In Mr Chant's evidence?

PN5381

MR LANGMEAD: There is a number of examples in Mr Chant's evidence, but I was thinking more particularly - there is a document created by Mr Chant for the purposes of making offers to the ANF and the HSUA and the medical officers which is HSUA54.

PN5382

SENIOR DEPUTY PRESIDENT MARSH: 54?

PN5383

MR LANGMEAD: Yes.

PN5384

SENIOR DEPUTY PRESIDENT MARSH: All right, thank you.

PN5385

MR LANGMEAD: And that was the document which Commissioner Blair relied upon in the 111AA proceedings in which he decided to award health professionals, decided that health professionals should have wage parity with medical scientists with whom the traditional nexus had been maintained. But with a distinction in relation to the superannuation. Now that was based on the table which is contained in option 2.

[12.07pm]

PN5386

SENIOR DEPUTY PRESIDENT MARSH: Option 2?

PN5387

MR LANGMEAD: There - - -

PN5388

SENIOR DEPUTY PRESIDENT MARSH: Yes, thanks.

PN5389

MR LANGMEAD: Where these options have been based on the degree of losses, this - it arose from the change to the fringe benefit tax arrangements applying to public hospitals when they lost their partial - lost part of their benefit.

PN5390

SENIOR DEPUTY PRESIDENT MARSH: Yes, yes, yes.

PN5391

MR LANGMEAD: And so the question being examined is whether - what amounts of compensation should be paid by way of salary increases.

PN5392

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5393

MR LANGMEAD: And DHS proposed in relation - proposed this document based on salary level, the degree of full time/part time work force, actual salary, percentage of salary package, percentage of salary package, percentage of staff who adopted packaging. And they came up with those percentages under option 2 and you will see that, in respect of nurses, which is the coverage of the ANF and the HSUA number 2 branch - - -

PN5394

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5395

MR LANGMEAD: - - - it was point 5 percent, and the HSUA number 1 branch, which is the general employees who are relevantly here, the direct care employees and administrative and other staff, nil. So whatever they - they had not lost anything on the Department's calculations. The number 3 branch, which is the health professionals, it was the point 8 which Commissioner Blair should apply by way of compensation. HSUA's number 4 branch, which is the medical scientists, three percent, which - sorry, it is HSUA number 5 branch, the administrative officers and managers, point 7 percent. So those are the factors which the Commission did take into account in awarding increases to compensate for the partial loss of salary packaging.

PN5396

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Isn't that though because for those - for outside of this sect, the only salary packaging benefit is on the employee's superannuation contributions to a fund?

PN5397

MR LANGMEAD: Not in public hospitals and other public sector health employees, your Honour.

PN5398

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Yes, yes, correct, but for the others?

PN5399

MR LANGMEAD: Well, this is only in relation to public sector health employees.

PN5400

SENIOR DEPUTY PRESIDENT MARSH: I see.

PN5401

MR LANGMEAD: So they had the reduction from the 30 to, I think, it is 17-4, or something like that.

PN5402

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Yes.

PN5403

SENIOR DEPUTY PRESIDENT MARSH: Yes, thank you.

PN5404

SENIOR DEPUTY PRESIDENT CARTWRIGHT: In answer to her Honour, you said that the prescriptive clause would have no cost to employers, on the evidence of Mr Kolmus, that is not right, is it? That currently - well, his evidence was that the employer's obligation is to pay superannuation on the post package figure. Now a number, as an exercise of discretion, choose to make contributions based on pre-packaged salary figure, but it is clear from that evidence, is it not, that is a discretionary decision by the employer and what you are seeking is that that discretionary decision be prescriptive and for Mr Kolmus' organisation that would have a very identifiable cost, would it not?

PN5405

MR LANGMEAD: It would be an identifiable cost, yes.

PN5406

SENIOR DEPUTY PRESIDENT CARTWRIGHT: So it is not correct to say it is not of no cost to employers?

PN5407

MR LANGMEAD: On that basis, your Honour is right. Can I say about salary packaging, and I may wish to say some more about it after I have heard what Mr White has to say, but it - in their outline of submissions, no party raised salary packaging as an issue to be taken into account in the calculation of rates or anything similar. Now DHS has done so in its substantive written submission. It wasn't a case which we had been called upon to meet and we did not, as a result, address evidence to things like discretionary factors as to why employees may or may not choose to exercise their options as to salary packaging.

PN5408

SENIOR DEPUTY PRESIDENT MARSH: No, well, this is the first time we have had submissions and the final union position in front of the Bench, that is why we are asking these questions. But I understand what you are saying.

PN5409

MR LANGMEAD: No, no, I don't complain of that, your Honour.

PN5410

SENIOR DEPUTY PRESIDENT MARSH: No, no, I know.

PN5411

MR LANGMEAD: It is just that the way things have evolved, it - whilst there was considerable interest in - during the witness phase and there was Mr Wallace's statement about - reference to it in his witness statement, and Mr Chan's explanation of the effects of salary packaging, there has not been put by any of the parties of the intervener that any wage increase should be influenced by salary packaging. And it has only been in DHS' latest submissions that that has become evident.

PN5412

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5413

MR LANGMEAD: So it is simply a case which we in part have not sought to meet because it wasn't made. And that in part troubles me somewhat in responding to your Honour's questions about what effect it might have and the relevance or otherwise of persons who may or may not utilise salary packaging. There might be many factors as to why they are not done. They are also - the method of salary packaging might cause difficulties to organisations or employees. It is fine if you can package the whole 30 grand, or the attributable factor of that - - -

PN5414

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5415

MR LANGMEAD: - - - and stick it on - going and stick all your groceries on the credit card and get that paid, but that has not really been the subject of any great consideration or evidence so we are somewhat hampered by that.

PN5416

SENIOR DEPUTY PRESIDENT CARTWRIGHT: I think it is fair to say, isn't it, that what came out in evidence, the reason most of the people that we saw before us did not do it, is because they did not understand it.

PN5417

MR LANGMEAD: I think that is right, your Honour, yes. And indeed it is probably not something that those outside the sector know even exists, or very few people outside the sector would know exists. And as your Honour has just correctly, with respect, observed, the employees themselves, a lot of them did not know much about it either. There are - - -

PN5418

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Which of course is what prompted so many questions from the Bench on the subject, and which is why it is assumed such a significant issue when - only for its actual importance perhaps.

PN5419

MR LANGMEAD: Yes, yes, I mean, there is no doubt that there is real benefits to employees from if they are able to and do avail themselves of salary packaging over and - people employed in this sector over and above most other employees, including comparable employees. We necessarily must concede that. But we do say that there should be no discounting of wage increases because of it and, as I say, perhaps I will wait until I have heard from Mr White as to what we might say further about that.

PN5420

SENIOR DEPUTY PRESIDENT MARSH: Yes, I think that is quite convenient.

PN5421

MR LANGMEAD: Just by way of explanation, and while I have HSUA55 before us, the Commission will also note that we have calculated the impact of the higher education contribution in that, it may be convenient if I do hand to the Commission a copy of the calculator - calculating schedule published by the Taxation Department in relation to that in case the Commission or the parties may wish to check my arithmetic, which is notoriously unreliable. I must have fat fingers and press the wrong buttons on the calculator.

EXHIBIT #HSUA56 AUSTRALIAN TAX OFFICE PAY AS YOU GO TABLE, WEEKLY TAX

PN5422

MR LANGMEAD: Now, and if I can just very briefly say that the effect on HECS, which of course relevantly here, will only affect health professionals. But, well, I suppose it could eventually affect others, but more usually it would only be health professionals. But because the reportable FBT is the grossed up amount, it has quite a dramatic affect on HECS and so the HECS contribution will be a much higher rate. And you see by way of example, it is $57 with packaging against $30 with no packaging.

PN5423

And if you look at the public sector, the impact of their packaging is $45. And so that discrepancy may well be another factor which would affect the decision as to whether somebody - well, not only the decision whether they would avail themselves of salary packaging, but also what its real affect is going to be and for how long. It becomes murkier. And FBT is also taking into account for things like child support and the like, so that is a further complicating factor. I thought we had another taxation document somewhere but we don't appear to have that here.

PN5424

Now in respect of the other conditions, I think I have already addressed those in discussing them with the Bench at an earlier stage of the proceedings, we do seek them on the basis of comparability. And additionally, where the evidence in attachment B refers to them, we rely on that evidence in addition to justify the grounding of the claims. The written submissions are, in our submission, comprehensive and we have, in our submission, substantiated the claims made by HSUA and the Commission ought to grant them. Those are the submissions.

PN5425

SENIOR DEPUTY PRESIDENT MARSH: Thank you. I might mark the written submissions, Mr Langmead. I did not do that. If that is convenient - - -

PN5426

MR LANGMEAD: Yes, your Honour.

EXHIBIT #HSUA57 WRITTEN SUBMISSIONS

PN5427

SENIOR DEPUTY PRESIDENT MARSH: Yes, thank you, Mr Langmead. A member of the Commission has a commitment at 12.30 so it might be convenient to take an early lunch. Does that inconvenience anybody? Can I just ask how we are travelling in terms of time?

PN5428

MR EBERHARD: Can I just say, I suppose subject to the Commission having any questions, our submissions are down to probably about five - or mine are, down to about five minutes, if not even less.

PN5429

SENIOR DEPUTY PRESIDENT MARSH: Good, thank you.

PN5430

MR MALONEY: Well, Ron and I will be just a matter of minutes.

PN5431

MR MEDINA: Similarly with myself, your Honour. I don't think we will keep you around terribly long.

PN5432

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Are you standing up, Mr Medina?

PN5433

MR MEDINA: I beg your pardon?

PN5434

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Are you standing up?

PN5435

MR MEDINA: I believe so. Good of the Commissioner to notice.

PN5436

SENIOR DEPUTY PRESIDENT MARSH: Mr Parsons?

PN5437

MR PARSONS: Yes.

PN5438

SENIOR DEPUTY PRESIDENT MARSH: Mr White?

PN5439

MR WHITE: We had intended to answer some specific matters arising out of the employer's submissions. Our written submissions go and answer - go to and answer a number of, or all of the matters raised in the HSUA's submissions. There are a number of matters raised by Mr Langmead this morning. But it intended to go through, in summary form, what the Department's submissions were. And we would have thought that would be within an hour.

PN5440

SENIOR DEPUTY PRESIDENT MARSH: Yes, so we will comfortably finish this afternoon.

PN5441

MR WHITE: Well, it is - to some extent - - -

PN5442

SENIOR DEPUTY PRESIDENT MARSH: I guess that is the end objective because Mr Langmead has indicated he wishes to respond to some of the Department's material.

PN5443

MR WHITE: Yes, I thought that he might do that after he got them but, I mean, he has had it - we don't understand. We thought that that would be part of the process now.

PN5444

SENIOR DEPUTY PRESIDENT MARSH: But I think he indicated at the outset he chose to do it differently. So he has got the right to respond, if he wishes to.

PN5445

MR WHITE: Yes, whether we did - I mean, we might have to reserve our right. There is a couple of matters on which we do reserve the right, I think that is our position and we might be able to fix those up after - over lunch. We may want to reserve our position on the calculations given to us this morning and we may want to reserve our position in relation to superannuation and the definitions under the Superannuation Guarantee Levy - the Superannuation Guarantee Act.

PN5446

SENIOR DEPUTY PRESIDENT MARSH: Getting more and more complicated, isn't it?

PN5447

MR WHITE: And we may want to reserve our position on HECS. And we certainly do, I think, want to reserve our position on HECS.

PN5448

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5449

MR WHITE: And we don't understand the calculations that have been just given to us.

PN5450

SENIOR DEPUTY PRESIDENT MARSH: Okay. Would quart to two be convenient to everybody? Does that give parties sufficient time to get instructions or whatever? Yes? All right, we will adjourn until quarter to two.

LUNCHEON ADJOURNMENT [12.23pm]

RESUMED [1.47pm]

PN5451

SENIOR DEPUTY PRESIDENT MARSH: Yes, Mr Langmead.

PN5452

MR LANGMEAD: Your Honour, I omitted to hand to the Commission some further tables that we constructed there. Based on the tables produced in the employer's submission but include the March figure relevant to each classification and also expressed in a dollar difference term table. If I could hand those up.

PN5453

SENIOR DEPUTY PRESIDENT MARSH: So it is including the March 2003 figure?

PN5454

MR LANGMEAD: Yes.

PN5455

SENIOR DEPUTY PRESIDENT MARSH: Yes, yes, I am with you, thank you.

EXHIBIT #HSUA58 FURTHER TABLES INCLUDING MARCH 2003

PN5456

SENIOR DEPUTY PRESIDENT MARSH: Are you tendering those tables as one exhibit, Mr Langmead?

PN5457

MR LANGMEAD: If that is convenient to the Commission, yes.

PN5458

SENIOR DEPUTY PRESIDENT MARSH: Yes, it is.

PN5459

MR LANGMEAD: I am informed that an error has already been detected in one of those tables. The increase for residential workers should be from July next year, not March.

PN5460

SENIOR DEPUTY PRESIDENT MARSH: So that is the second table. So is that column 4?

PN5461

MR LANGMEAD: Column 4, your Honour, yes.

PN5462

SENIOR DEPUTY PRESIDENT MARSH: Should be 1 July, not 1 March?

PN5463

MR LANGMEAD: Yes.

PN5464

SENIOR DEPUTY PRESIDENT MARSH: That is the only amendment?

PN5465

MR LANGMEAD: So far. Now Mr Eberhard has drawn our attention to a mistake in HSUA55. Under the - on page 1, under the heading NGO parody and packaging - - -

PN5466

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5467

MR LANGMEAD: - - - there is a figure less package of 296.22 - - -

PN5468

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5469

MR LANGMEAD: - - - the figure there has been interposed. It should be 269.33.

PN5470

SENIOR DEPUTY PRESIDENT MARSH: Sorry?

PN5471

MR LANGMEAD: Sorry, the line below 369.41.

PN5472

SENIOR DEPUTY PRESIDENT MARSH: So it is two - it is less package is 296.33.

PN5473

MR LANGMEAD: Yes.

PN5474

SENIOR DEPUTY PRESIDENT MARSH: That is correct.

PN5475

MR LANGMEAD: Yes.

PN5476

SENIOR DEPUTY PRESIDENT MARSH: And the line under that is what?

PN5477

MR LANGMEAD: 369.41.

PN5478

SENIOR DEPUTY PRESIDENT MARSH: So the nine and the six have been - - -

PN5479

MR LANGMEAD: Yes.

PN5480

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5481

MR LANGMEAD: Now we also have a copy of the Public Sector Consolidated Award, now the Health and Allied Services Public Sector Consolidated Award.

PN5482

SENIOR DEPUTY PRESIDENT MARSH: I won't mark them as exhibits.

PN5483

MR LANGMEAD: We have copies of the Private Sector Award on their way. We do have two copies available at the moment, but it might be more convenient if - - -

PN5484

SENIOR DEPUTY PRESIDENT MARSH: Yes, I think that might be - - -

PN5485

MR LANGMEAD: I am told they will arrive in half an hour or so.

PN5486

SENIOR DEPUTY PRESIDENT MARSH: That is fine, just at an appropriate time.

PN5487

MR LANGMEAD: And one of the difficulties I was having earlier with attachment E - sorry, D, was that the pages are in reverse order. There is 71 and 70, where they should be 70 and 71. And the example I wanted to refer to was under level 4 on page 70 of attachment D, where it describes an admin clerical employee who undertakes a range of etcetera, which is directly or identical to the same provision under level 4 on page 84 in attachment C. I am also told - instructed that the salaries - - -

PN5488

SENIOR DEPUTY PRESIDENT MARSH: I see, yes. I am a bit slow. Yes, I am with you now too, yes, yes.

PN5489

MR LANGMEAD: Yes. So that certainly would have me confused. I am instructed the salary levels which are contained in the awards, which we are - have handed up and are to hand up, may not be current but that the current rates are identical in both awards. And so it is a legitimate direct comparison between the two awards and the two levels and the two classifications and indeed any other similar classification in the award.

PN5490

SENIOR DEPUTY PRESIDENT CARTWRIGHT: So you say the award rates are the same but you are seeking a higher rate based on the multi employer agreement that is to be - for which there will be an application to certify.

PN5491

MR LANGMEAD: Yes, your Honour, exactly, yes. I might say that I think this is correct, the history of these awards is that they were originally one award, the private sector and public sector were one award. I think Mr Medina would probably be an authority on that matter as well. If the Commission pleases.

PN5492

SENIOR DEPUTY PRESIDENT MARSH: Yes, thank you, Mr Langmead. Mr Eberhard.

PN5493

MR EBERHARD: Your Honour, firstly I think in distributing the final submissions, I think when we forwarded the email, I think there was problems with the attachment, in opening it. Can I apologise to the Commission and also to the other parties for any troubles that that may have caused. The final submissions are supported by VECCI, the VHIA, CIDA proactive and Mr Medina, except where they have indicated otherwise.

PN5494

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5495

MR EBERHARD: Should the Commission award the outcome sought by the HSUA in these proceedings, without the consequent funding, the evidence put to the Commission by the employer witnesses demonstrates that the sector would financially implode. Paragraph 57 of the employee representative's final submissions provides tables detailing the HSUA claim, DHS employer indicative rates and the differences between the two for the three awards subject to these proceedings. Mr Langmead has just tabled HSUA58 which transposes that into 2003 in addition to the information that we supplied in our final submissions. The evidence in paragraphs 28 to 40 of the final submissions inclusive clearly demonstrates to the Commission the current financial position of the employers subject to the HSUA claim. It demonstrates that the employers have submitted that they do not have the financial capacity to offer award wages rates that are above those capable of being paid in accordance with the various funding services of the employers. The employer representatives seek the making of an award that reflects the financial capacity of the employers. The employee representatives seek the making of an award in accordance with attachment B to the final submissions. The award contained in attachment B reflects a financially responsible position and response to the HSUA's 2002 - - -

PN5496

SENIOR DEPUTY PRESIDENT MARSH: What do you say about the union's position on that, that if those rates were awarded the attraction or attention reasons that there would be an exodus from the sector.

[1.57pm]

PN5497

MR EBERHARD: I don't think there was actually much evidence put to the Bench in regards to attraction and retention in regards to the percentage figures. I think Ms Balshaw may have spoken at one stage in regards to her evidence that the actual retention rate I think had dropped somewhat from 2001 in 2002, but I would really need to get further instructions on what the employers would view any decision of that to be. The employer representatives submit that the outcome proposed by the employer representatives and reflected in attachment B to the final submissions represents a fair and reasonable outcome and one that can be developed or built upon over a period of time. If the Commission pleases.

PN5498

SENIOR DEPUTY PRESIDENT MARSH: Mr Corboy.

PN5499

MR CORBOY: If the Commission pleases, just something to add to Mr Eberhard's submission.

PN5500

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5501

MR CORBOY: In response to the submission from the Department of Human Services at paragraphs 23, 24 through to 25, 26, they comment on Ms Jackson's testimony, especially in relation to the performance audit by the Victorian Governor General.

PN5502

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5503

MR CORBOY: Unfortunately I don't have that exhibit with me today but I have been instructed that the Commission would find Ms Jackson's evidence is supported in section 516 to 518 inclusive of that report.

PN5504

SENIOR DEPUTY PRESIDENT MARSH: 516 to 518?

PN5505

MR CORBOY: Yes. It is 514, 516, 517, 518.

PN5506

SENIOR DEPUTY PRESIDENT MARSH: And that supports Ms Jackson's position?

PN5507

MR CORBOY: That would support Ms Jackson's view. If the Commission pleases. Thank you.

PN5508

SENIOR DEPUTY PRESIDENT MARSH: Thank you. Yes, Mr Parsons.

PN5509

MR PARSONS: Thank you, your Honour. Your Honour, if I could help a little I hope in that question you asked of my colleague, Mr Eberhard.

PN5510

SENIOR DEPUTY PRESIDENT MARSH: Yes, thank you.

PN5511

MR PARSONS: There is some concern within the employers that I have spoken with but not all of them and it is not a consensual position, but certainly Ashcare for example, as Ms Lloyd gave in her evidence, is concerned that there could be loss of employees to the Government sector should the claim not be granted. Other employers have expressed a view that they don't see that as a great risk. Villa Maria is one that comes to mind on that.

PN5512

SENIOR DEPUTY PRESIDENT MARSH: So it is a disparate position, would that be a fair finding on the evidence?

PN5513

MR PARSONS: I am sorry, your Honour?

PN5514

SENIOR DEPUTY PRESIDENT MARSH: That it is not a uniform position across all the agencies in talking for your clients?

PN5515

MR PARSONS: That is correct. It is not uniform. Certainly concern has been expressed by some and Ms Lloyd from Ashcare is one who is concerned about the attraction and retention argument issue. It may well be that the smaller agencies would feel the impact more so than the larger ones. I want to go very briefly to the issue of how the negotiations occurred and whether in fact they were proper, reasonable and meaningful and it is the employers argument which we run to in our submission around about paragraphs 91 to 101 where we address this particular issue.

PN5516

Your Honours and Commissioner, there were prolonged negotiations. There were many negotiations. The negotiations were held collectively and individually. Individually from the point of view in that each employer representative at times conducted negotiations separately to the others. The claim by the department that the negotiations were not proper, meaningful or reasonable is a claim that cannot be substantiated because frankly the department would not have many of these meetings. The parties, or certainly from the employers point of view, we did want to get a resolution. A resolution and a quick resolution has always been in the best interests of the employers.

PN5517

One of the difficulties the employers have is holding together the cohesion and harmony within the workplace when there is a claim of this nature outstanding and outstanding over such a long period of time. So it is our very strong contention that the negotiations while not successful were certainly directed towards achieving an outcome. That in our essence is our concluding submission. Thank you.

PN5518

SENIOR DEPUTY PRESIDENT MARSH: Yes, thank you.

PN5519

MR EBERHARD: Your Honour, sorry to interrupt. In attachment E to the final submissions there was a statement by Yooralla. Could I just hand to the Bench, it is an exact replica of that except it is in colour rather than in black and white.

PN5520

SENIOR DEPUTY PRESIDENT MARSH: Very sophisticated technology. Yes, we will just replace it. thank you.

PN5521

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Mr Eberhard, while you are on your feet could I raise a question with you and I should have raised it with you before and that is I asked some questions of Mr Langmead this morning about the union's claim in relation to administrative staff and particularly looking at document HSUA3, the heading gave me some reason to wonder whether salaries for administrative staff were a matter at issue between the parties. Is that something the employers put in contest or in your view was it indeed a matter at issue?

PN5522

MR EBERHARD: No, in respect to the comments that Mr Langmead made and in response to the questions I would support what he said that the correspondence that was forwarded to the employers and understood by certainly employers and the employer reps, well, certainly myself, was that the claim by the HSUA was with respect to in the vernacular, the health professionals, the residential and also the administrative arm employees who were employed by these services that we now represent.

PN5523

SENIOR DEPUTY PRESIDENT CARTWRIGHT: So there is no dispute that that was a matter at issue?

PN5524

MR EBERHARD: No.

PN5525

MR MALONEY: Your Honour, if I could just spend a couple of minutes.

PN5526

SENIOR DEPUTY PRESIDENT MARSH: Yes, Mr Maloney.

PN5527

MR MALONEY: The only issue I just want to focus on for a couple of minutes is the Attendant Care Award. It is issue number 2 in my final submission.

PN5528

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5529

MR MALONEY: And I just want to just briefly build on a comment Mr Medina made the last day we were here which is what occurs in the event of the Attendant Care Award being left out of these proceedings in relation to those employers that have those people on board but are not respondents to the Attendant Care Award. According to my reading of the Residential Award, an employer in those circumstances is deemed to provide coverage the Residential Award. So attendant carers, if the employer is not a respondent to that award, are covered by the Residential Award.

PN5530

Now, unless this Commissions puts the Attendant Care Award in there, there is no trigger to create any funds to flow from the department to employers to reflect their position. So employers in that position will have a choice of three things only. They can either find that money themselves and it is not one off money, it is recurrent money which will be very difficult to find; or they can refuse to pass on those wage increases to attendant care workers, or three, they can hand the service back to the department. They are the only three options they have, unless we included the Attendant Care Award.

PN5531

As I said here very early in these proceedings, I think at least one thing that is shared on this bar table is the expectation that what comes out of this hearing will be picked up by the other two employers in terms of enterprise agreements. Of those 200 employers quite a number have attendant care employees but are not respondent to the Attendant Care Award. I would have to say that in any of my dealings with those employers, I would have to say to them, "Think twice about picking up the decision of this Commission as an enterprise agreement because of that problem." If the Commission pleases.

PN5532

SENIOR DEPUTY PRESIDENT MARSH: Yes, Mr Medina.

PN5533

MR MEDINA: If the Commission pleases. I should say at the outset that the - there are only two agencies that Vicraid is representing, they are Golden City Support Services and Moira. Now we have conceded in the submission that we made that we consider that the Government's offer was reasonable in the bargaining context because it was in line with previous Government settlements, offers and settlements, in the Victorian public sector and it was backdated to 1995. But of course that was not going to satisfy the claims made by the union.

PN5534

Now it seemed to us that the union's case in the final analysis rests on the relevance of the Allied Health Professional's case in the matter of Health Services Union of Australia v Vision Australia, which is print S6655, and where parity of course was granted. Now it seems to us that if, and I am speaking with respect to people under the Residential and Support Services Award in this matter, because it would be clear cut, I would think, that it applies to the Allied Health Professionals that are also part of this claim.

PN5535

And if the same facts and circumstances apply then, as we have said, it seems to us to constitute a very powerful precedent to be followed by this Commission, or to be considered by this Commission, and we have made a number of quotes on page 2 as what we consider to be the reasons for decision in that case, the ratio decidendi of that case. And I guess the question arises as to whether those same facts and circumstances apply with respect to people under the Residential and Support Services Award.

PN5536

Now if I may refer to the Government's submission with respect to that, which is I think contained in - if I can find it. Yes, thanks for that. I think it is page 56, paragraph 140. In commenting specifically, and that is under the heading of proxy employees, it is submitted that the concept relied upon in Vision Australia of proxy employees is flawed and should not be followed. Now if that is the case, I am not sure whether the Commission is able to simply ignore it because it is flawed or whether it would be required to distinguish it, because it is after all a decision of the Full Bench of this Commission.

PN5537

But in any event, what seems reasonably certain, we would think, is that if it is not distinguished, then it is a very powerful precedent to be followed in this matter. And as I repeat, notwithstanding that, the Government's offer, we consider, was reasonable in all the circumstances, but - - -

PN5538

SENIOR DEPUTY PRESIDENT MARSH: So how do you reconcile the two positions, Mr Medina?

PN5539

MR MEDINA: Excuse me, your Honour?

PN5540

SENIOR DEPUTY PRESIDENT MARSH: How do you reconcile the two submissions you are making? One, is it a powerful precedent and the other is that the Government's offer was reasonable in all the circumstances.

PN5541

MR MEDINA: Well, all I am really saying is it was reasonable in the circumstances because that is what has been offered in other areas and their settlements have been made on that basis.

PN5542

SENIOR DEPUTY PRESIDENT MARSH: Yes, I understand your submission. I am asking how you reconcile your two submissions, one which says there is a powerful precedent for parity, the other that says the Government's offer is reasonable in all the circumstances and the other does not meet the parity argument. That is what this case is about. So how do you reconcile those two submissions? You say phasing, is that your answer?

PN5543

MR MEDINA: Well, I merely - yes, it is actually, your Honour. I was coming to that. If the Commission should be persuaded that that precedent is one that this Full Bench will follow, then we make the observation that there are quite significant increases of rates of pay involved and that that being the case, the Commission should consider phasing in - - -

PN5544

SENIOR DEPUTY PRESIDENT MARSH: Yes, and how does that overcome the lack of funding issue?

PN5545

MR MEDINA: Yes. I mean much - there has been considerable discussion this morning about what would happen if the Commission were to award rates of pay in excess of what the department was prepared to fund and the consequences that might flow from that. And what we are suggesting is that if the Commission were to follow that precedent, that it should consider phasing in any increases over the number of budget periods, for example, because the gap that still exists even after the Government has offered its three plus three plus three, which it says it has offered to all comparable people, a substantial gap still exists.

PN5546

So our proposal would be that the Commission should therefore consider phasing in the increases because they did not - the gap which exists did not occur say under the present administration of the State.

PN5547

SENIOR DEPUTY PRESIDENT MARSH: So the gap would be met through phasing by Golden City Support Services and Moira to the extent that there is a difference between - to the extent that there is a gap.

PN5548

MR MEDINA: Yes, your Honour.

PN5549

SENIOR DEPUTY PRESIDENT MARSH: Is that your client's position?

PN5550

MR MEDINA: Yes, your Honour.

PN5551

SENIOR DEPUTY PRESIDENT MARSH: That they would be prepared to fund a gap because it is - - -

PN5552

MR MEDINA: Would they be prepared to fund the gap?

PN5553

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5554

MR MEDINA: No, what they are really saying is the Commission should perhaps initially award what the Government will fund - - -

PN5555

SENIOR DEPUTY PRESIDENT MARSH: I see.

PN5556

MR MEDINA: - - - and then phase in the further increases - - -

PN5557

SENIOR DEPUTY PRESIDENT MARSH: Yes, but where is the money coming for the phasing in?

PN5558

MR MEDINA: Sorry?

PN5559

SENIOR DEPUTY PRESIDENT MARSH: Where would the money come for the phased in increases?

PN5560

MR MEDINA: Well, one would - - -

PN5561

SENIOR DEPUTY PRESIDENT MARSH: We would have - we have got the funding - no, it is a serious question.

PN5562

MR MEDINA: Yes.

PN5563

SENIOR DEPUTY PRESIDENT MARSH: It is a serious concept. But I understand what you are saying but I cannot understand where the fundings coming for the - other than the initial instalment if you like, which is the funded part of it. You are saying initially fund - the Government offer - - -

PN5564

MR MEDINA: Yes.

PN5565

SENIOR DEPUTY PRESIDENT MARSH: - - - grant the Government offer and then phase in the rest. I am asking you is your - are your two clients prepared to fund the phased increases. Is that your submission?

PN5566

MR MEDINA: No, what we are saying is that we would consider that in that period of time in another budget period that the Government would - I think what Governments have always done, your Honour, is respect decisions of this Commission and follow them. I am merely saying that it would give them time to make budget revision for it if that were necessary.

PN5567

SENIOR DEPUTY PRESIDENT MARSH: I think we are giving the Government time to sort of put its final position to us.

PN5568

MR MEDINA: I am sorry, I am - - -

PN5569

SENIOR DEPUTY PRESIDENT MARSH: We have given the Government some additional time to allow it to put a final position to us with respect to its attitude to any award that we make.

PN5570

MR MEDINA: Yes, to 23 December this year.

PN5571

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5572

MR MEDINA: Yes. Well, I would hope that they would inform the Commission that it was their practice to pay serious attention to decisions of this Commission.

PN5573

SENIOR DEPUTY PRESIDENT MARSH: Yes, thank you.

PN5574

COMMISSIONER BLAIR: I hope that everybody gives serious consideration to decisions of the Commission, it is whether or not they are prepared to implement it.

PN5575

MR MEDINA: Well, I agree with that, Commissioner. So I think that is our position on that matter. If the Commission should decide that the Allied Health Professionals case is a matter to be - is a precedent that should be followed in this particular case with respect to people covered by the Residential and Support Services Award. If the Commission pleases.

PN5576

SENIOR DEPUTY PRESIDENT MARSH: I should be marking some exhibits.

EXHIBIT #E8 EMPLOYER'S SUBMISSION AS FILED BY VECCI

EXHIBIT #M8 SUBMISSION OF MR MALONEY FOR PROACTIVE

PN5577

SENIOR DEPUTY PRESIDENT MARSH: And, Mr Medina, I think this is your first exhibit.

EXHIBIT #VICRAID 1

PN5578

SENIOR DEPUTY PRESIDENT MARSH: And I think that probably takes us up to the Department.

PN5579

MR WHITE: Although I think your Honour may not have marked those documents handed up by Mr Langmead straight after lunch. Maybe you did and I missed it.

PN5580

SENIOR DEPUTY PRESIDENT MARSH: Yes, I did, yes.

PN5581

MR WHITE: Did you, I missed it.

PN5582

SENIOR DEPUTY PRESIDENT MARSH: He said he wanted one exhibit, and I think it was 58 from memory, the tables.

PN5583

MR WHITE: All right, thank you.

PN5584

SENIOR DEPUTY PRESIDENT MARSH: The tables of rates. Fifty what? Yes, 58. So it is your turn now, Mr White. I might mark your outline - or your written submissions of the Department while I think of it.

EXHIBIT #W18 WRITTEN SUBMISSIONS OF THE DEPARTMENT

PN5585

SENIOR DEPUTY PRESIDENT MARSH: Unless there is any objection.

PN5586

MR WHITE: If your Honour pleases.

PN5587

SENIOR DEPUTY PRESIDENT MARSH: Thank you.

PN5588

MR LANGMEAD: Your Honour?

PN5589

SENIOR DEPUTY PRESIDENT MARSH: Yes, Mr Langmead.

PN5590

MR LANGMEAD: Those copies of the Private Sector Award have arrived and I have handed those to the Commission.
[2.20pm]

PN5591

SENIOR DEPUTY PRESIDENT MARSH: Thanks very much for getting them, Mr Langmead.

PN5592

MR LANGMEAD: I think we are going to have to keep logging the Otways at this rate, though.

PN5593

SENIOR DEPUTY PRESIDENT MARSH: It looks like it, doesn't it? Thank you. Yes, Mr White.

PN5594

MR WHITE: If the Commission please. The order in which I intend to address the Commission is as follows, (1) to address some specific matters in reply to the employer's submissions, thereafter some specific matters in reply to the HSUA submissions and finally to only briefly speak to the department's submissions. As to a number of matters raised by the employer's submissions, a number of matters deserve comment and one of the stark matters seems to be a misapprehension as to the composition of the 20 per cent component of the unit price.

PN5595

One of the fundamental difficulties it is said to be experienced by Yooralla is that the unit price has fallen to such an extent as to put its operations and others by analogy into operational difficulty. The primary component part of the 20 per cent part said to be that which causes difficulty is the WorkCover component. The Commission will see by exhibit W5 that, in fact, the WorkCover component is outside of the 20 per cent component based on the wages. Similarly, the Commission would see that the superannuation and the WorkCover components are both outside the 20 per cent component.

PN5596

The fourth or last page of exhibit W5 contains matters which comprise the funding to the agencies. Direct salaries, penalties and allowances comprise $22.48 cents per hour and if one then takes 20 per cent of that, one gets very close to the figure, the overheads fixed figure for a year of $4.40, so there is an overhead component of 20 per cent on that figure. In addition to that, there are separate allowances made for training, WorkCover and superannuation.

PN5597

SENIOR DEPUTY PRESIDENT CARTWRIGHT: So what you are saying is there is in fact three components. There is the direct salaries, there is the overheads and then there is a category that for simplicity we will call other and in that it allows for WorkCover premium, training and superannuation.

PN5598

MR WHITE: Yes.

PN5599

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Not part of the 20 per cent?

PN5600

MR WHITE: That is right. That is one of the misconceptions which seems to have flowed through the submissions. The second misconception which appears to have flowed through the submissions about the 20 per cent is that the figure, in fact, has been reduced, but if one looks at exhibit W5 and the imputed dollar per hour which is the forthcoming rate to be paid on the Government funding offer, you will see that the figure has in fact increased, albeit not as great as the figures or the indexation would otherwise provide. The basis for that is that the Government across all of its departments and agencies and funded organisations has required a one and a half per cent productivity dividend, but the 20 per cent was increased by two and a half per cent.

PN5601

SENIOR DEPUTY PRESIDENT MARSH: That is the two and a half per cent, is it, on here?

PN5602

MR WHITE: Yes, so there was two and a half per cent indexation, but from that there was deducted the one and a half per cent productivity dividend, so it didn't actually amount to a money reduction, but it wasn't the full flow-on of the indexation. It is, of course, in our submission important to bear in mind the component parts of the Government funding offer and in particular the distinction between the wages, allowances and the like because as far as HSUA is concerned and its demands are relevant to the wages component of the funding offer of the Government.

PN5603

Other components don't go to the HSUA wages claim and by the by, I remind the Commission that in fact the 20 per cent and other component part of the enterprise is currently being assessed in two ways by the department in consultation with the ..... organisations, that is the adequacy of the elements making up the 20 per cent and other component parts and that is an ongoing review which is happening now, as well as a Ministerial review as to the sustainability or otherwise of the productivity dividend applied to the 20 per cent component.

PN5604

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Nevertheless, the point is still valid, isn't it, that if there were to be a WorkCover increase greater than what was allowed for in this table, that is something that would have to be absorbed in the table unit price.

PN5605

MR WHITE: Perhaps in the interim, perhaps in the interim.

PN5606

SENIOR DEPUTY PRESIDENT CARTWRIGHT: So by that answer, are you saying that if there has been an adjustment in WorkCover premiums, then that will flow through to the employers?

PN5607

MR WHITE: I don't have instructions to put that specifically, but Mr Sullivan did give evidence that the component parts of that 20 per cent, (a) is separate from wages and, (b) is under review. I am just told the WorkCover experience issue is germane to - - -

PN5608

SENIOR DEPUTY PRESIDENT CARTWRIGHT: But, now, we started off this by you saying that the WorkCover is not included in the 20 per cent, so I am assuming, therefore, that any adjustment that comes through a change in WorkCover premiums would not be part of that 20 per cent review, given that WorkCover premiums are not part of the 20 per cent.

PN5609

MR WHITE: I think as I understand the evidence, all the component parts are subject to review.

PN5610

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Okay, so it is not a change to the 20 per cent component?

PN5611

MR WHITE: No, the wages component, there has been an amount of evidence before the Commission already as to the basis of that adjustment, slightly different in respect of both therapist and residential workers. That is not part of any ongoing review. Other component parts of the unit price are subject to review.

PN5612

SENIOR DEPUTY PRESIDENT CARTWRIGHT: I am not sure I understand the subtlety of the point you have just made about administrative wages.

PN5613

MR WHITE: I think the unit price comprises the wages component and other super, WorkCover, training and overhead, the 20 per cent as I understand and the review is in respect to all matters other than wages and the wages increase, the subject of the offer, has been explained already to the Commission, slightly different explanations for each of the residential and therapy streams of workers.

PN5614

SENIOR DEPUTY PRESIDENT CARTWRIGHT: But if there were to be an increase in administrative salaries, that would come through in the 20 per cent component, would it not?

PN5615

MR WHITE: Well, 20 off that figure, yes, that seems to be how it is worked out so far, but as I understand, the review is not limited to sticking to the 20 per cent figure. It is looking at the adequacy of those matters.

PN5616

SENIOR DEPUTY PRESIDENT MARSH: If you would just remind me when that review was completed again?

PN5617

MR WHITE: I think it is ongoing.

PN5618

SENIOR DEPUTY PRESIDENT MARSH: I see.

PN5619

MR WHITE: It is happening at the moment. I think discussions have occurred already with the peak organisations. As far as the Ministerial review, on the sustainability of the productivity dividend is concerned, I think the evidence is that one of the large accounting firms, the name of which escapes me, has been commissioned to conduct that review, KPMG.

PN5620

SENIOR DEPUTY PRESIDENT MARSH: Thank you.

PN5621

MR WHITE: I think the hope is that it would certainly report before the next budget year.

PN5622

SENIOR DEPUTY PRESIDENT MARSH: Thank you.

PN5623

MR WHITE: Another general observation we make in relation to the employer submissions - - -

PN5624

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Just before we pass off that, can I just clarify, has there been any Government offer made in relation to administrative staff? If administrative staff wages come into that 20 per cent, all the calculations seem not to touch that 20 per cent.

PN5625

MR WHITE: As I understand, at the moment it hasn't been the subject of any separate offer. The offer made was an increase in the wages component. This is evidence from the bar table now perhaps, but as I understand, the department's position is that to the extent that the administrative component remained an outstanding issue and was an issue between the parties, then that would lead to consideration by the Government of the precise parameters of that issue.

PN5626

SENIOR DEPUTY PRESIDENT CARTWRIGHT: I think your answer highlights that there hasn't really been much said about administrative staff - - -

PN5627

MR WHITE: There has been very little said about it, but if - - -

PN5628

SENIOR DEPUTY PRESIDENT MARSH: I think Mr Sullivan's evidence touched on that point, didn't it?

PN5629

MR WHITE: I think in industrial parlance, if at the end of the day that is all that was between the parties and it needed a fix, it would have been done consistent with the wage outcome and wage offer in the other part of settlement to increasing the unit price. One other recurring theme which has run through the employer's submissions is the inability so called of the employers to negotiate, such an ability being called by restrictions or lack of Government funding, but the department's position is and you can see from the submissions an argument earlier put that the funding offer, not being a wages offer, contains within it flexibility as to how those funds were to be applied.

PN5630

How they were to be applied would of course differ from one organisation to another and the reason it would differ is that there are different staffing profiles between organisations. The department produced exhibit W8 which was reflective of the Yooralla staffing profile at the time that evidence was given. In the employer submissions, there is attached as annexure E a further statement by Ms Balshaw purporting to do the same sums and the same exercise in relation to the staffing profile at Yooralla as at 1 December 2002. We make a number of observations about the annexure E.

PN5631

First of all, it sustains the department's view that there is within the Government funding offer negotiating flexibility, albeit if one was to accept Ms Balshaw's figures, it was negotiating flexibility less than illustrated in exhibit W8. The second observation and perhaps the by the by observation is that despite the intentions of Yooralla to move to employing only certificate or level 4s, the percentage of level 4s between annexure E and W8 has actually fallen and the percentages of levels 2 and 3 has actually increased.

PN5632

Nonetheless, despite those changes in the figures, it still makes the point to the Commission that from one organisation to another, within the Government funding offer there would retain flexibility in negotiation unless it was said and there is no evidence of any organisation such as this before the Commission that the organisation employed persons purely pursuant to the wage formulation or wage funding component, that is one mid-range level, for mid-range level 4.

PN5633

SENIOR DEPUTY PRESIDENT MARSH: Mr White, what conclusions are you asking us to draw from that other than challenging the attachment on the VECCI submission? Is it only relevant to the extent that it is part of the offer in the negotiations that in the department's view wasn't taken up or seized and examined by the individual agencies or has it got relevance to the award we are making now in respect to the 57 or 58 agencies that are part of this award?

PN5634

MR WHITE: Yes, a bit of everything. Can we say it is relevant in this way?

PN5635

SENIOR DEPUTY PRESIDENT MARSH: Can I just explain why I am asking that, because I can understand the submission you are making in respect to the negotiations. That is one matter. We have now moved on. Although we have to take that into account, we have moved on. We are being asked to make an award. We have got 57 or I think it is 58 distinct agencies and you are saying each one may have a different profile of staffing and on the basis of the offer, produce a different outcome in terms of wages, what could be offered. Is that something you are asking us to take into consideration or not?

PN5636

MR WHITE: In a round-about way, yes, in this way, because what we have said is this. There are 58 agencies and the Commission is asked to make 58 awards.

PN5637

SENIOR DEPUTY PRESIDENT MARSH: Yes, that is right.

PN5638

MR WHITE: The difficulty the Commission then faces is to look at the individual circumstances of the individual agencies. By way of illustration, there is flexibility, depending on staff profiles of each of them. Because that exercise has not been done, essentially by any other than three agencies and that was done in the witness box, the Commission is now left in a very poor position in terms of the capacity to make an award, if it was so minded to do so. However, one way around that potential difficulty, not potential, actual difficulty, is what the department has submitted to you and that is that no funding offer outside known funding parameters should be made. The known funding parameters have been, to the best evidence of that in terms of wage outcome are the indicative rates which the department has produced to you.

PN5639

SENIOR DEPUTY PRESIDENT MARSH: So they become a proxy for the overall claim?

PN5640

MR WHITE: Yes. Until or unless - - -

PN5641

SENIOR DEPUTY PRESIDENT MARSH: And beyond that, what happens?

PN5642

MR WHITE: Well, beyond that, depending upon the term, the life of the award - - -

PN5643

SENIOR DEPUTY PRESIDENT MARSH: Well, if we were moved to go further than the claim, what would that mean in terms of the argument you are now advancing with respect to the 58 agencies?

PN5644

MR WHITE: Don't know. We don't know, because it may well be if an agency employs 90 per cent of grade 2 residential workers, any award above may well be able to be met out of the existing funding offer, but you don't know that and we don't know it, because the evidence hasn't been presented.

PN5645

SENIOR DEPUTY PRESIDENT MARSH: Because we don't know the balance for each of the agencies over and above the indicative rates.

PN5646

MR WHITE: Yes. If, for example, an agency only employs a level 1 plus a supervisor, one would imagine that the capacity to meet a higher rise for level 1s above the indicative rates would be greater than an agency who employed predominantly level 3, but there is no evidence before the Commission other than for three agencies as to how it works and for that reason, the known funding parameters translated into affordable wage outcomes is, as the department has submitted, the indicative rates.

PN5647

Now, we have only ever put them as indicative rates and criticism has been made from day 1 almost that the individual agencies haven't gone and applied the funding, said to be complicated, but that is the way that they apply for and submit to receive funding from the department, haven't applied that to their own circumstances, nor has the union, nor has anyone engaged in these negotiations. I understand what your Honour says.

PN5648

That is past history now and how to move forward, but there hasn't been up until now an engagement and the only way - sorry, the only method of engagement matters before the Commission is the indicative rates. In terms of Yooralla, they present or produce a percentage that Yooralla had as negotiating flexibility rates. That percentage might change, depending on the profile and annexure E to some extent illustrates that, but it still nonetheless does illustrate negotiating flexibility.

PN5649

SENIOR DEPUTY PRESIDENT CARTWRIGHT: For practical purposes, though, it means that the negotiating room which I think you have previously characterised the agencies as having, because of their profile differences, now really in practical terms disappears, doesn't it, because what you are saying is essentially we have got to proceed on the assumption that the profile that is either submitted in the department's exhibits or in evidence from the organisations that discussed that matter, that is a given?

PN5650

MR WHITE: It may disappear for the life of the award, if the Commission was to make an award. Thereafter, of course, all those variables are then again up for discussion between the parties.

PN5651

SENIOR DEPUTY PRESIDENT CARTWRIGHT: But in practical terms, doesn't it mean that, well, the assured funding to the agencies is the indicative offer from the Government?

PN5652

MR WHITE: Well, that is the Government offer. We understand the question was earlier raised, then we are coming back on the 23rd, once the new Minister has managed to get their head around all these matters, we will come back on the 23rd and present to you the Government response to the questions asked by the bench, but, yes, that is the Government offer, the rationale of which has been explained.

PN5653

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Yes, so where there was previously some negotiating room, for more practical purposes, there isn't any now.

PN5654

MR WHITE: For the life of the MX award, that is so.

PN5655

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Yes, the reason for that is the Commission has no information, no evidence, on which to make any other assessment.

PN5656

MR WHITE: And that is a fundamental difficulty for the Commission, as annexure A to our submission, a document showing a number of organisations in respect to responses to the survey, there is no evidence in respect of it and that is an issue. It raises another issue in relation to the employer's submissions and it is an issue that we don't fully understand. In the draft award that the employer submits, attachment B to submissions, exhibit E8, in clause 11 are set out the wages which they seek.

PN5657

And without going through each of the exhibits, W1, W2, W2A, or the charts contained within the employers' submissions, it appears to us that the rates that the employers therein seek are lower than the indicative rates that the Department has submitted to the Commission.

[2.46pm]

PN5658

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Sorry, I am a bit behind you, I am looking at the tables that are in the - the begging submissions - - -

PN5659

MR WHITE: Sorry, no, in the annexure, attachment B to the Award.

PN5660

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Yes, I am with you.

PN5661

MR WHITE: Sorry, the draft award, being annexure B to the employer submissions. There is in clause 11, set out, wages which the employers consider fair and reasonable. It appears to us, and without going to the relevant exhibits, but those rates are below the indicative rates. So, for example, in clause 14, are wages in respect of Residential Workers the employers seek this Commission to add. If one transposes next to those, the exhibit W2, for exhibit W2A, you will see some difficulty.

PN5662

I don't know whether there is a ready explanation but, for example, for Residential Support Services Worker Grade 1, the employer seeks a wage rate of $476.20. The current rate is $475.50. The indicative rate in exhibit W2 was $490.50. The indicative rate in exhibit W2A was $506.02. And similarly down the list of wage rates and analysis of exhibit W1, and the wage rates in clause 11, show likewise.

PN5663

And we are unsure as to why it is that the employers even now seek a lower range rate than the indicative offer the Government would sustain. And in the passing, I should note in the wages columns in paragraph 57 of the employers' submissions in respect of Residential Workers, commencing on page 14, a similar error as contained in those charts handed up by Mr Langmead exist in that a further 3 per cent is not part of it on 1 March but rather from 1 July, the public sector. And to make matters more complicated, column 5, are said to contain the indicative rates in exhibit W2A. I think they are in fact indicative rates contained in exhibit W2.

PN5664

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Just remind me what the difference was between W2 and 2A.

PN5665

MR WHITE: Well, they are set out in our submissions, if your Honour please, and I think - and I can turn them up fairly soon, but I think in general the difference was this. I might have had a bit of a confusing explanation during the hearing of the matter. But I think the explanation for the difference is this. If - we will go back a step. The Residential Funding offer intended to pick up 3 per cent in 1995, less the minimum rates adjustments since that period of time. Not all of the minimum rates adjustments were flat amounts, some of them were percentage amounts.

PN5666

And if the percentage amounts were applied directly to the higher wages, then it would amount to a higher weekly money amount for those workers. It meant that the gap between the lower and the higher paid workers increased and if one applied the straight percentage increases since '95, the workers at the bottom would get more than the workers at the - sorry, the workers at the top would get more than the workers at the bottom. And that was exhibit W2, doing that exercise. Exhibit W2A is merely taking the current rate and applying straight percentage increases across. Paragraph 107 of our submissions, I think, explains that.

PN5667

SENIOR DEPUTY PRESIDENT CARTWRIGHT: So which is the current offer?

PN5668

MR WHITE: Well, the funding offer hasn't changed. The funding offer hasn't - - -

PN5669

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Yes, the funding won't change, will it? It is just how it is distributed.

PN5670

MR WHITE: It is how it is applied for wages. Yes. And the indicative rates are merely two different ways of doing that. There may be others, but the Commission hasn't been told about that. There may be others because of different staff profiles, but the Commission hasn't been told about that.

PN5671

MR MEDINA: Excuse me, I was just wondering, and the chronology baffles me a little but, but in the offer that we made, we did put ball park figures on each classification. And as I say, the chronology escapes me a bit, but Mr Sullivan earlier provided a, what I will call,a rough ready reckoner as to how we should calculate the rates. It was later on that specific rates were provided, the indicate rates. And early in the piece we were left - from the ready reckoner - to calculate what the rate - there was a rate that says if the rate is $400 at 1995, $410 at 1995, and you could get the nearest point to that in the actual rates and trace it forward.

PN5672

Now, certainly the rates, specific rates we provided to the Union were ball-park figures of about what could be justified. Now, Mr Sullivan can elaborate on that, but it may well explain the differences in the rates that we might have put in a draft award at that time. I must say I am not quite sure of that, but Mr Sullivan can confirm whether originally we were supplied with a, what I will call a rough ready reckoner as to how we should calculate what their funding offer would translate into rates at each classification level.

PN5673

MR WHITE: As I understand, once again evidence from the bar table, that in relation to the first period of - well, the first lot of bargaining period, there was provided a ready reckoner, but that was superseded, of course, from the second bargaining period with the enhanced offer. But in any event, the rates in the employers' award, what the employer has now put in - yes - today are now before the Commission for its consideration. We don't, for our part, understand the basis upon which the employers have put theirs.

PN5674

SENIOR DEPUTY PRESIDENT MARSH: And for your part, you say that indicative wage rates reflecting the offer could be paid - could be inserted into 58 awards, in the terms of either exhibit W2 or W2A. That is the evidence before us.

PN5675

MR WHITE: Yes.

PN5676

SENIOR DEPUTY PRESIDENT MARSH: There is no other translations of the claim before the Commission.

PN5677

MR WHITE: That is right.

PN5678

SENIOR DEPUTY PRESIDENT MARSH: The only other wage outcomes we have before us, are the Union's rates.

PN5679

MR WHITE: Well, the direct parity wages.

PN5680

SENIOR DEPUTY PRESIDENT MARSH: Yes, the direct parity wages.

PN5681

MR WHITE: Yes.

PN5682

SENIOR DEPUTY PRESIDENT MARSH: So they are the three options we have been given; exhibit W2, W2A, which could translate into each of the Agency awards, we have been asked to make, or the third option, being the parity rates that the Union is seeking.

PN5683

MR WHITE: Yes.

PN5684

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5685

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Mind you, that is only in relation to - - -

PN5686

SENIOR DEPUTY PRESIDENT MARSH: Oh, well, sorry, sorry - - -

PN5687

MR WHITE: W1 is the equivalent - - -

PN5688

SENIOR DEPUTY PRESIDENT MARSH: Sorry, we do have the employers' rates as well. So we actually have four - we have been given four sets of rates from which to choose.

PN5689

MR WHITE: We don't support the employer - well, the employer rates appear to us to be lower than the indicative rates otherwise - - -

PN5690

SENIOR DEPUTY PRESIDENT MARSH: I am just really seriously trying to clarify what is in front of us and what we are being asked to by the respective parties so that there is no - everyone is totally clear on respective positions.

PN5691

MR WHITE: As I understand what your Honour has described - - -

PN5692

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5693

MR WHITE: - - - we agree with, but don't forget exhibit W1 in relation to therapists.

PN5694

SENIOR DEPUTY PRESIDENT MARSH: Yes, yes, I have that - - -

PN5695

MR WHITE: But in relation to residential workers - - -

PN5696

SENIOR DEPUTY PRESIDENT MARSH: Yes. We have W1, W2, W2A.

PN5697

MR WHITE: Yes.

PN5698

SENIOR DEPUTY PRESIDENT MARSH: As indicative rates. In the Department's view that is capable of being inserted into each of the agency awards to overcome problems of an agency basis in terms of evidence. We have got the employer rates in VECCI, attachment E, and we have the Union's parity rates to chose from.

PN5699

MR WHITE: Yes.

PN5700

SENIOR DEPUTY PRESIDENT CARTWRIGHT: And we have got nothing on administrative rates by way of government offer. The only thing we have got is the employers' rates in the submission, and award.

PN5701

MR WHITE: Yes. Yes. And to compound difficulties, no evidence in relation to large numbers of employers. I think Mr Eberhard wants to - - -

PN5702

MR EBERHARD: Can I just clarify, as the drafter of the submissions, I think if you recall during the actual proceedings when Mr White tendered both exhibit W2 and W2A, I didn't indicate at that stage that the indicate rates that were contained therein were different to the rates that we had proposed in the award that we had attached to the outline of submissions. I think, as someone has said, I haven't paid, haven't paid attention to detail, and transposed the rates in W2, W2A into the draft award that we seek as a result of these proceedings in attachment B to the final submissions.

PN5703

I think as I indicated in the previous comments that I made, which were when we were doing our opening, that we would be reflecting the rates that were proposed by DHS in the indicative sense in the award, and that is what we would be proposing. It is just that in preparing the finalising the submissions, what I haven't done is transpose the rates from W2A or W2 into the award itself.

PN5704

SENIOR DEPUTY PRESIDENT MARSH: So we can proceed on the basis that none of the employees are questioning the rationale of the Government's offer being translated into indicative rates as set out exhibits in W1, W2, or W2A?

PN5705

MR EBERHARD: That is correct, yes.

PN5706

SENIOR DEPUTY PRESIDENT MARSH: Yes, thank you. Yes, thank you. Yes, Mr White.

PN5707

MR WHITE: To some extent those submissions have covered a number of specific items, which I was going to address in the employers' response when, in paragraph 34, submissions are made about the submissions are made about the efficiency dividend, the reduction of the administrative component, seriously threatening the viability of the organisation. I think that paragraph 2167, I think was to reduce - says in fact, to reduce that. It may well do it. It is not evidence before the Commission now that any of these organisations are operating at a deficit on the level of current government funding.

PN5708

There was, however, implicit evidence, and referred to in paragraphs 35 and 36 of the employers' submissions, that the organisations had to self-fund a number of programs. Yooralla, it was said, had to self-fund a therapy program, but those programs aren't identified at all, and no detail of what shortfall is said to arise, is provided to the Commission. The Commission should also note that Yooralla were one of the organisations bound by the previous MX award, and not only that, in terms of the therapists wages, the subject of the Government offer. It is difficult to see, and in the absence of specific evidence, the Commission should not find that any government funding is insufficient to fund particular - or any identified or non-identified therapy program.

PN5709

Ashcare, it is said, in the submissions, has to meet the unfunded costs to provided the services provided. You will recall that the evidence of Ms Lloyd is that there were queries in relation to a couple of houses run by them, as to the intensive care, or intensive needs of residents at night time. That a study was done by Ashcare in conjunction with the Department, but as a matter of choice, despite the findings of the inquiry or review, Ashcare chose nonetheless to retain the level of service provided across both houses, despite the fact the level of intensive care in one of them was much less than in the other.

PN5710

It is said a considerable burden was placed on the parents and families. I think there is probably, in my submission, overstating the effect of paragraph 2563, referred to in paragraph 36. But to some extent in the absence of specific evidence going to show that current Government funding is failing to meet the existing needs of these people, is probably irrelevant in any event.

PN5711

One of the matters to which we directed some attention in our submissions, was the evidence of Ms Jackson, or the description of that evidence. Mr Corboy devoted his submissions to that this afternoon. In our submissions, commencing paragraph 23, we made the observation that the Auditor-General's report, in our view, did not support Ms Jackson's evidence. Mr Corboy today indicated a number of paragraphs which it said - which it is said do support that view.

PN5712

The paragraphs I think that are referred to were in fact referred to and in part set out in part of the DHS submissions. We stick with or adhere to the submissions made in relation to Ms Jackson's evidence, and in the absence of specific parts of the Auditor-General's report to which reference hasn't been made, being pointed out - and to put it more bluntly, in our submission, the Auditor-General did not find that there are serious doubts as to whether the current funding adequately reflects the real costs of providing services.

PN5713

Now it may well be that we misread the Auditor-General's report, but in the absence of specific reference to specific finding, then we adhere to our submissions. Mr Parsons, on behalf of SIAG, and I know, your Honour, the presiding member has said, well, to some extent negotiations are now matters in the past. But Mr Parsons says, well, we did negotiate, but the fact of the matter is, even on a cursory view, that is not sustainable.

PN5714

There are still matters before the Commission which are of no cost, or extremely low cost, and yet there was no coming together of minds. We had evidence on the part of Yooralla, and on the other employers who appeared, that they didn't actually cost the range of the conditions which were sought. And I have made submissions earlier in relation to the difficulties encountered in relation to the translation of the funding offer. It is tolerably clear, in our submission, that particularly therapists weren't made aware that had the Government offer been picked up and applied to their wages, then absent the 0.8 per cent compensation in the public sector, they probably would have been better off in actual money amounts, not even taking into account the other benefits they could obtain and in fact most enjoyed, being the salary packaging benefits, which would put them substantially in front.

PN5715

An inability to grasp and grapple with the issues, in our submission, makes it clear that neither of these parties engaged properly in trying to resolve the issues before them. It is true that employers and employees, in negotiations and bargaining, can take hard line views. They can be immovable. But the effect of the Sahai decision, and in our submission, a proper approach to negotiation, is that it is incumbent upon the parties to engage, as we say in our submissions, to engage with the issues and try and do it.

PN5716

It is absolutely clear there are a whole range of issues which haven't even been grappled with, or the parties have chosen for some reason to ignore. We would make a submission that we know the reason, and the reason is that both the union and the employers' positions was well suited by saying, we will pay if the Government pays. And beyond that it didn't really know or they didn't really need to do anything. The well-trodden path, as Mr Langmead described it.

PN5717

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Essentially what you are putting is the almost inevitable conclusion is that the cost of the delay in finalising this matter will not be recovered by any award made by this Commission.

PN5718

MR WHITE: No, it won't. Certainly not, particularly not with therapists. I might just say at this time, I wasn't going to raise this issue now, but I raise it now. It is - - -

PN5719

SENIOR DEPUTY PRESIDENT CARTWRIGHT: And in my comment, by the way - sorry - in my question, I was not really reflecting on retrospectivity, if that is what you were going to go to.

PN5720

MR WHITE: That is what I was going to go to, because you will note from the Union draft award, a number of dates from which increases are sought, some being retrospective. But the Commission has had no submissions at all as to what the exceptional circumstances are for retrospectivity and by reason of that, we - - -

PN5721

SENIOR DEPUTY PRESIDENT CARTWRIGHT: But either way, it would have to be a big - either a very large award over and above what the Government is proposing to fund, or an approach to retrospectivity which full benches have not generally taken an MX to go anywhere near recovering what could have been gained from an earlier agreement?

PN5722

MR WHITE: Look, we haven't done the sums as to substantiate that. But what we do say in - - -

PN5723

SENIOR DEPUTY PRESIDENT CARTWRIGHT: It doesn't take very long.

PN5724

MR WHITE: Yes. But what we do say is that no exceptional circumstances - no exceptional circumstances have been shown, and that is really required under section 146. Can I now go to some specific matters raised by Mr Langmead in his submissions this morning? One of the first matters on which there was debate was whether or not the abolition of the half day model was a matter in issue. And Mr Langmead took you to some evidence of Ms Cresshull in relation to that matter.

PN5725

Can I direct the Commission to paragraph 58 and following of our submissions, and the paragraphs of the evidence referred to, particularly in paragraph 60. Ms Cresshull's evidence that we direct the Commission to, commences at paragraph 275 - 279. Mr Eberhard is still questioning Ms Cresshull at that time at 279, she is unable to recall the dates.

PN5726

We then move forward to the paragraphs which Mr Langmead did not go to this morning, and they commence in paragraph 461. And on 461, I am questioning Ms Cresshull now. I say:

PN5727

Right, Ms Cresshull, you said it a minute or so ago you had read Mr Sullivan's statement. Therefore I remind you in paragraphs 26-29 ...(reads)... before Vice President Ross on 24 December.

PN5728

She believes she attended that. Paragraph 28, he talks of a further conciliation conference. She is unsure whether or not she has attended both or one. At 467:

PN5729

It was after the February 2002 conciliation presided over by Vice President Ross that the new bargaining periods which were cancelled ...(reads)... That is right, in March.

PN5730

So the dates might be confusing, but the order of events, Ms Cresshull appears to be agreeing that the second lot of bargaining periods were commenced after Vice President Ross conciliation. Just to make things absolutely clear, 468:

PN5731

... You see, prior to lunch you said you were unable to recall when the Aged Care or Attendant Care - sorry - matters had been raised.

PN5732

I think I have just now confused myself and gone to Attendant Care matters.

PN5733

COMMISSIONER BLAIR: So you are you saying, Mr White, that the bargaining period, second of - bargaining periods, commenced after the conciliation proceedings before VP Ross?

PN5734

MR WHITE: That seems to be the chronology agreed to by Ms Cresshull.

PN5735

COMMISSIONER BLAIR: Yes.

[3.13pm]

PN5736

MR WHITE: Sorry, and in relation to the half day model, 468, just to make things absolutely clear, see prior to lunch you said you were are unable to recall when the aged care or attendant care matters. I have just gone back, I am now completely and utterly confused. It was suggested by Mr Langmead that the - and I infer, because of the Commission's power to make matters incidental for subject of awards, incidental to matters in issue, that the Commission could make a claim for the abolition of the half day model in this award.

PN5737

In our submission, a claim for penalty rates does not and cannot sustain a claim for abolition. That is, put it positively, abolition is not a matter incidental to penalty rates and the claim in the union's log, if we say that, or the attachments to the opening of the bargaining periods, was for penalty rates and they are matters, according to Ms Cresshull, which were perused. That is, the union pursued penalty rates. But in any event, the evidentiary basis for the abolition of the half day model is, in our submission, extraordinarily scant.

PN5738

It is only a year or so after a Full Bench restructuring the award, decided not to, after hearing full evidence, abolish the half day model for smaller agencies, that is, those with fewer than nine clients. That was the Full Bench award restructuring, if you like, the Residential Public Sector Carers Award. I was going to make some submissions about the administrative staff but I think the early submissions have been - have clarified that. But we would say that there is no evidence.

PN5739

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Just on the half day model. Sorry, I know you have referred to this before, I just do not remember the details. Now, what was the decision that where you said that award had been restructured?

PN5740

MR WHITE: We have handed you a copy of it this morning. So behind tabs 19 and 21, they are Health Services Union v Kindilan Society, print P738, a decision of December '97 and 21 when the award in fact was formulated in May, being Health Services Union v Kindilan, print S1 - sorry, S1841, 16 December 1999.

PN5741

SENIOR DEPUTY PRESIDENT CARTWRIGHT: S - - -

PN5742

MR WHITE: S1841 in tab 21. We are just going back to try and retrieve the dates that I got confused on before. There were two conciliation periods, one was before Vice President Ross, and we know from the evidence that that was before the bargaining periods, in our submissions, clearly before the bargaining period instituted by - the second lot instituted by the HSUA. And they were the latter part of the paragraphs that I took you to. The second lot of conciliation was before Commissioner Blair and we know that that conciliation was after the termination of the second set of bargaining periods.

PN5743

So to the extent that it is asserted by Ms Cresshull, in a very unidentified date fashion, that the half day model, in its abolition, was considered in conjunction with conciliation dates, then either group of the conciliation dates is either before or after the termination or creation of the bargaining periods. One of the difficulties - can you just bear with me a moment. One of the difficulties which has been the subject of discussion already is the absence of evidence in relation to a large number of employers. And can I remind the Commission, right at the beginning of the case, in paragraph 197, I said this, that:

PN5744

One of the reasons why the Department's list of required witnesses is so short is that we sought and obtained, or did seek and obtain, undertakings from my learned friend that the witness statements would be used only in respect of the employer organisations that the evidence of witnesses not called only goes to those witnesses' places of work or identified previous places of employment.

PN5745

It is a difficulty faced - that the Commission faces. On the one hand, the Commission must know that there is a large sector of many thousands of employees and hundreds of employees, but the evidence before the Commission is limited - limited in terms, and is the basis upon which a lot of it was put before the Commission, to those actual employees. So it makes it difficult for the Commission to extrapolate. And that feeds back to the earlier discussion we had about the indicative rates being certainly within the known funding perimeters.

PN5746

It may of course cause problems beyond that, as to whether you make an award at all, but that would be a very difficult position. Well, it is a difficult position the Commission has been put into.

PN5747

SENIOR DEPUTY PRESIDENT CARTWRIGHT: So what do you say we should do?

PN5748

MR WHITE: The reality is that the Department has made the funding offer it made available to every employer in the sector, not only those the subject of these proceedings. Now that funding offer remains open to all of the employers within the sector. If the Commission had to extrapolate, or was to extrapolate, across the whole sector, then that is a further reasoning, in our submission, that the Commission should certainly not move beyond the known funding perimeters.

PN5749

MR LANGMEAD: Your Honour, I have difficulty with Mr White providing this information to the Commission in this manner. It is not something which has been said before in its written submissions. There is no evidence of payments of other employers other than Mr Wallace's statement when he was considering the Government's position on this and making recommendations to Government. He took into account the non-Government employees with which the Department dealt generally and not just the providers of the services that are the subject of this application.

PN5750

SENIOR DEPUTY PRESIDENT MARSH: Yes, I think Mr Maloney referred to other employers and what he may or may not recommend, according to what we do.

PN5751

MR WHITE: He also did, and I was going to take issue with his ultimately.

PN5752

SENIOR DEPUTY PRESIDENT MARSH: Can I just indicate that our concern, and it is a concern defined by the statute, is if we need to widen it. I think we have had enough difficulties with this case without going beyond the 58 organisations before us. Certainly that is the perimeters of this case, and they are the organisations we are concerned with.

PN5753

MR WHITE: Yes.

PN5754

SENIOR DEPUTY PRESIDENT MARSH: And necessarily, by the statute and by the terms of the MX arbitration.

PN5755

MR WHITE: And indeed, it is our submission it cannot go beyond that.

PN5756

SENIOR DEPUTY PRESIDENT MARSH: No, it cannot. But then there is a concern within those organisations that are part of this arbitration, and I would ask Mr White to focus on those organisations. What we do with respect to those organisations as distinct from widening it to other organisations which, quite frankly, were not - we are not and cannot be, concerned about.

PN5757

MR WHITE: I understand that. And - - -

PN5758

SENIOR DEPUTY PRESIDENT MARSH: But I mean, if I look at your attachment A, are you really saying on the - that there is a necessary constraint upon the Commission because of the way in which the case is being conducted, and that is that, that constraint being, that the indicative - the translation of the offer into indicative rates. Go beyond that, and you are in territory that you might find yourself in trouble over. Is that what you are putting?

PN5759

MR WHITE: Yes, in short.

PN5760

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5761

MR WHITE: The problems may be greater. That depends on the view of the evidence the Commission takes because annexure A says in respect of a large number of these organisations there is just no evidence.

PN5762

SENIOR DEPUTY PRESIDENT MARSH: But you have got requirements under 170MX, you know, including MX(5) - - -

PN5763

MR WHITE: Yes.

PN5764

SENIOR DEPUTY PRESIDENT MARSH: - - - and we have got to make 58 awards.

PN5765

MR WHITE: Well - - -

PN5766

SENIOR DEPUTY PRESIDENT MARSH: We have been asked to make 58 awards.

PN5767

MR WHITE: Yes.

PN5768

SENIOR DEPUTY PRESIDENT CARTWRIGHT: So you are not raising this as a jurisdictional point, that under MX(5), because we have no information we cannot judge the merits of the case in relation to those employers?

PN5769

MR WHITE: We do not put it that highly. It has created difficulties for the Commission however. Even if it was minded, contrary to the Department's submissions, that any funding was insufficient in the Commission's view to go beyond that because of the paucity of evidence.

PN5770

SENIOR DEPUTY PRESIDENT MARSH: That is a matter of discretion.

PN5771

MR WHITE: Well, as a matter of evidence as well, yes.

PN5772

SENIOR DEPUTY PRESIDENT MARSH: As a matter of fact, yes, but not jurisdiction.

PN5773

MR WHITE: Well, it is just a matter of evidence and whether or not the evidence is sufficient to - well, the Commission only acts on evidence and we say that has caused grave difficulties in the running of this case as far as the HSUA is concerned. Yes, my learned friend says we do not say the Commission has no jurisdiction to make awards in respect of the 58 employers, the subject of the applications. Mr Wallace gave evidence, in cross-examination by Mr Langmead, in paragraph 4226, as to what might the Government's position be in a hypothetical situation. What Mr Wallace said in that paragraph, in answer to this question:

PN5774

If an NGO were unable to continue operating for financial reasons and handed back the service to the Government, the Government would have two choices, would not it? It would either have to operate the service itself or find someone else who would operate it on its behalf.

PN5775

The answer to that is:

PN5776

Yes, you know, we would not allow vulnerable clients to remain without services.

PN5777

That of course is the position of the Government. This Government, and you will have seen in the submissions, provides more per head of funding than any other state for these services. How those services might be provided of course is always, as Commissioner Blair observed, a matter for review and Government policy. In my submission, a statement by a departmental official, on giving evidence on behalf of the Department, that vulnerable clients would not be allowed to suffer is not a statement the Commission can rely on in the way in which Mr Langmead submits.

PN5778

That is, if you hand them back you take them over and run them yourself at - in whatever theoretic or hypothetical position. But it does say, and it does illustrate, I think, in my submission, that the Government's position is in relation to provision of services in an adequate way to these vulnerable people, although how that is to be delivered is always a matter for Government policy. It is interesting however, in our submission, to analyse that submission of Mr Langmead because, in our submission, it reflects accurately that the position adopted by the union and the employers during negotiations.

PN5779

That is, it does not matter because whatever you agree to the Government will fund. And that is the fundamental position of each of the employer and union groups, in our submission, during the whole of the negotiations. A document was tendered by Mr Langmead illustrating the discrepancies between wages received by someone working a half day model compared with those working an eight day model and we will not spend too much time on that but can I say that, once again, that is a purely theoretical position.

PN5780

And that is, it is theoretical because you have eight day - eight hour workers in that example, working substantial overtime. But in any event, in relation to the half day model, we repeat our earlier submissions that a Full Bench has already looked at this matter and the references we have given earlier. I don't think it was put as highly as this by Mr Langmead and if it was then we would be assisted by specific reference. But in our submission, we are not unaware of any finding by the Auditor General that the application of the 24 model, or half day model, has impacted adversely on client care. I think the highest it was put that it might possibly in some circumstances.

PN5781

MR LANGMEAD: I think it said may.

PN5782

MR WHITE: Yes, Mr Langmead says may and I think that is as high as the Auditor-General put it. They might say on a theoretical hypothetical reference in our submission does not support the altering of an award particularly one where it has been looked at in relatively recent times by another Full Bench. We were provided this morning by Mr Langmead with examples of the effect of salary packaging and we make the following comments in relation to - it is exhibit 55. Salary packaging has been the subject of some discussion and perhaps it is - I won't go there.

PN5783

In relation to HSUA55 there are wages rates set out purportedly Grade 2 Year 4 and thereafter. It appears to us that those rates of 665.74 for example include the .8 per cent allowance for the reduction in salary packaging in the public sector so it is not a true example in any event. Secondly, in our submission the superannuation position is this. We understand that there is supposedly employer provided advice from the Taxation Department. But the obligation under the Superannuation Guarantee Levy Act is to pay on ordinary time earnings.

PN5784

As we understand - and we can provide later the Commission with copies of this - a ruling of the Taxation Commissioner has said that benefits subject to the fringe benefit tax do not form part of ordinary time earnings and are not salary or wages. It would stand, we say, to reason therefore the benefits which were subject to the fringe benefit tax would be part of ordinary time earnings - sorry - which were not subject to the fringe benefits tax that is. The Commissioner says benefits subject to FBT are not part of ordinary time earnings and therefore the percentage of superannuation - the figure for superannuation is diminished.

PN5785

The benefits we say not subject to FBT, which is the case for these non-government organisations, based on that ruling we would say would be part of ordinary time earnings and the percentage required under the Superannuation Guarantee Act would be the full grossed up salary.

PN5786

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Well, that is an interesting point, isn't it, because has the Commissioner in the ruling taken account of the fact that there are some sectors where there is an FBT exemption for the employer. I mean - - -

PN5787

MR WHITE: Well, we haven't got the detail on that ruling but we are just looking at the summary of the rulings here. The question, however, is what are the ordinary time earnings of employees and - yes, the ruling - as I understand the ordinary time earnings for an employee is the default earnings base and so the FBT and the like is part of the default earnings base. But you don't get to the default earnings base if there is an acceptable alternative earnings base and in our submission the acceptable alternative earnings base is the award rate. That is, you don't get to any alternative, you don't get to a default definition if there is in an industrial instrument a rate for workers to be paid. With due respect, any employer we think who is paying superannuation other than on the full gross amount in our submission would be potentially at risk and to that extent, the figures contained in HSUA55 we don't accept as accurate where it provides that lesser amounts of superannuation are received.

PN5788

SENIOR DEPUTY PRESIDENT CARTWRIGHT: It is the normal situation that packaged superannuation contributions would be reportable FBT items and therefore taken into account and I presume that the Tax Office would make any rulings on that basis. Nevertheless, you are directing us as a separate issue to the question as to whether there is a default earnings base identified and you say there is in - - -

PN5789

MR WHITE: We say you don't get to a default earnings base where there is a proper alternative.

PN5790

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Sorry, yes, I am with you.

PN5791

MR WHITE: That is the industrial instrument. The industrial instrument says this is your ordinary time earnings.

PN5792

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Yes. My question is you are saying that there is a superannuation clause in each of the applicable awards that defines what the ordinary time earnings are for the superannuation calculation purpose?

PN5793

MR WHITE: Yes, without going to the clauses, the awards say what ordinary time earnings are and once that is done, then that is the basis on which superannuation is paid. Yes, so from the Health and Allied Services Private Sector Victoria Award, clause 24.2.2:

PN5794

Ordinary time earnings for the purposes of this clause, which is occupational superannuation ...(reads)... number of hours worked calculated at the ordinary time rate of pay.

PN5795

And then a number of other matters as well, cash value and lodging and the like, but the rate for ordinary hours forms the ordinary time earnings.

PN5796

SENIOR DEPUTY PRESIDENT CARTWRIGHT: So the question is whether ordinary time earnings is defined in each of the applicable awards.

PN5797

MR WHITE: And if it wasn't - - -

PN5798

SENIOR DEPUTY PRESIDENT CARTWRIGHT: If it is not, then there is a default basis which has also been the subject of rulings by the Commission.

PN5799

MR WHITE: I am sorry?

PN5800

SENIOR DEPUTY PRESIDENT CARTWRIGHT: If there is not, there a default earnings base which the ATO provides?

PN5801

MR WHITE: Yes, and on top of that, we say the indicative rates available or achievable by the department's funding offer give those ordinary time earnings on which superannuation we say should be paid.

PN5802

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Well, that is a matter of fact that is easily checked, isn't it, because it is a question of whether that is a defined term in the awards?

PN5803

MR WHITE: Yes.

PN5804

SENIOR DEPUTY PRESIDENT CARTWRIGHT: It is not routinely in there. It is a matter of discretion. In some cases, the awards have it, in other cases they don't, so it is just a matter of looking at these particular awards.

PN5805

MR WHITE: Commonly awards have ordinary time earnings.

PN5806

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Having simplified 43 awards, I can assure you that there is wide variation.

PN5807

MR WHITE: The next matter that I wish to address raised by Mr Langmead this morning goes to HSUA54 and that was the letter which was prepared by Mr Chant in another time in relation to another matter and I think Mr Langmead relied on this letter in response to questions by her Honour, the presiding member, as to, well, what is the rate that you seek in the event that you were to take into account salary packaging and by way of example, I think Mr Langmead went to HSUA54.

PN5808

That is a letter which in our submission provides absolutely no assistance to it. HSUA54 was the letter prepared by Mr Chant for the department at a time when the fringe benefit tax arrangements in the public hospitals was changed from a grossed up value of 30,000 to approximately half that amount and the subject matter for discussion before the Commission constituted then by Commissioner Blair was whether or not there was and should be and if so, what should be the appropriate compensation for that in the award rate?

PN5809

What then happened in that case is at stark odds with this, because what happened was an actual survey and if one reads HSUA54, it is tolerably clear that the percentages or the numbers of people who are taking advantage of the fringe benefits in excess of the 15,000 - not totally clear that the percentages or the numbers of people who are taking advantage of the fringe benefits in excess of the 15,000 was measured in relation to each category and the value of those benefits assessed and averaged. It was a purely objective study of the application of the fringe benefits and to that extent, in our submission, HSUA54 can be of no assistance to the Commission in this case, because there is no equivalent objective study and so the Commission once again is left in the difficult position of not having any substantive evidence to operate on and once again we say that supports our contention that it should not move out of the known funding parameters.

[3.44pm]

PN5810

SENIOR DEPUTY PRESIDENT MARSH: Yes, I follow the submission. Thank you.

PN5811

MR WHITE: The other matter and perhaps we might come back to this and perhaps while we don't fully understand the submission as it was put in relation to HECS fees, but I am not sure how that submission is put. Once again, in any event, whatever the calculations are, there is no objective study of the number of persons who are paying it or the extent of it or anything of that nature. Can I speak briefly to the department's submissions?

PN5812

We understand what the Commission said earlier this morning, that it had had an opportunity and had, in fact, read the submissions, though we don't intend to go to them in any detail, but we do want to highlight some matters. The history of disability services and the provision of disability services in Victoria is set out. It has changed since the mid-80s from essentially in large part institutionalised care to the de-institutionalisation process of the mid-80s.

PN5813

As part of that process, there occurred a significant change in the way in which the provision of services needed to be regulated and it was in 1986 that the Mental Disability Services Act was passed and it provided for, for the first time, a range of objective standards both in the quality and type of care, as well as standards, fiscal and financial responsibility standards, for those persons who were providing that care. Up until that time, the State had funded in a block fashion a number of persons or organisations providing it.

PN5814

The basis of that funding changed and that is set out in our submissions, but it is relevant to this extent. The mere fact and we deal with this in a couple of places, in particular in relation to that part of our submissions about proxy employees, the mere fact that the Government then took responsibility of having an overt fashion of funding and overt standards and requirement for organisations in receipt of Government funds to account for them properly did not make and does not make persons who are employed by those organisations proxy employers.

PN5815

We go briefly to the history of industrial regulation and you will see that a number of awards have gone through. The relevance of that is that at least in all of those awards, different rates have been applicable and raised at different times. For example, in the Government residential award, the raise granted by Senior Deputy President Riordan of 10 per cent in two lots of six per cent and four per cent was only granted by him after he had found serious or substantial changes in productivity in the Government residential care services.

PN5816

We deal at page 19, paragraphs 58 and onwards with the matters in issue. We have dealt in part already with the half day model and I had got confused and went to the other paragraphs in relation to the attendant care model, but the point is the same and that is the attendant care model, if it was raised at all, was prior to the institution of the second lot of bargaining periods and the evidence of Ms Cresshull in our submission is clear in respect of that.

PN5817

Paragraph 76 and following, we set out two approaches the Commission has taken to MX arbitrations. To a certain extent, we don't say fundamentally they are terribly different, perhaps a slight difference in emphasis, but in this case, the Commission is spectacularly badly placed to stand in the position of the bargain makers because of what we say were the deficiencies in the bargaining process, but, nonetheless, we say - well, I think the submissions of all other parties, that it approaches its task in a way conducive to equity and the like and that then comes to one of the bedevilling aspects of this case and part of the case that the Commission needs to grapple with and in our submission the HSUA has not grappled with and the conundrum is this.

PN5818

No-one is submitting to this Commission that there not be fairness and equity. It is a question of what it is. In our submission, a repetition by the HSUA of that doesn't make the case, that absolute parity in wages equals fairness and equity and to some extent, that is where the parties' cases diverge. It is the department's submission that fairness and equity, comparability, movement in base wages, the base rates, the like phrases used in previous section 170MX cases is capable and, in fact, is provided for in the department's funding model.

PN5819

In our submission, the HSUA claim is properly characterised as seeking parity, not comparability or not somehow fair in relation to one another, but exactly the same. As a matter of fact, as a matter of fact, when one deducts the .8 per cent allowance for the loss of salary packaging arrangements in public hospitals, the therapists are virtually there in any event under the current Government funding offer and exhibit W1 goes to those figures.

PN5820

The position as we have earlier submitted is more difficult in relation to residential workers, largely because of the differences in staffing profiles and the differences in the organisations. Parity or comparability are not synonymous terms in our submission. What is fair and reasonable to some extent is also - and the Commission has taken into account in other cases - what happens elsewhere in Australia and the Tasmanian teachers case, whilst the Commission did not accept that it should provide a particular rate Australia-wide, did take into account what was paid in other States and Mr Watts gave evidence and there are charts and tables annexed to his statement that compared with other States, Victorian rates, both in the Government and non-Government sectors, are higher than all except possibly, with a number of exceptions, New South Wales.

PN5821

What is fair and reasonable in our submission also depends on equity of treatment and the department's offer, as has been explained, has provided the same wage outcomes in percentage terms as across the whole of the public sector since 1995, save that in relation to the residential workers in this case, no offsets or productivity bargains or the like have been sought. The question of recruitment and retention is a vexed issue and one, we say, in respect of which there is insufficient evidence before the Commission for the Commission to find that the increase as sought by the HSUA is warranted.

PN5822

We set out in our submissions a range of reasons that a number of witnesses gave, ranging from - well, it was difficult in Geelong because it was a country area - to personal reasons as to wages and a whole gamut of reasons in between, but if the Commission please, even assuming, even assuming that problems in retention and recruitment were solely related to wages, the gap in the evidence is this. There is no evidence about the effect of the Government funding offer and wages payable under it on that issue, certainly in relation to residential workers.

PN5823

I think a number of therapists were asked whether two or $300 would affect recruitment and retention and I think they weren't prepared to say that it would or would not, but the Commission in my submission should find that two or $300 a year is not going to affect seriously retention and recruitment of therapists who are earning 40 to $50,000 a year. The impact of the Government offer in terms of residential workers and consequently recruitment and retention isn't the subject of any analysis or evidence before the Commission. There is a lack of objective qualitative or quantitative evidence at all in relation to this issue.

PN5824

Those matters are complicated when one does bear in mind the availability of alternative benefits such as salary packaging and I direct the Commission's attention to those tables prepared by Mr Chant and annexed to his statement. Whilst the figures in relation to residential workers isn't as stark as it is with therapists, the tables do show that packaging of a variety of amounts certainly would fix up and close the gap and put people in front in certain circumstances.

PN5825

SENIOR DEPUTY PRESIDENT MARSH: Mr White, one of the problems with the therapists is the three per cent is due to be paid in March next year, so that would put them behind.

PN5826

MR WHITE: Potentially - - -

PN5827

SENIOR DEPUTY PRESIDENT MARSH: Yes, potentially.

PN5828

MR WHITE: Mr Sullivan was asked about this I think in his evidence.

PN5829

SENIOR DEPUTY PRESIDENT MARSH: Yes, he was.

PN5830

MR WHITE: And I got a paragraph reference before lunch. The effect of his evidence was this, that he was unable, (a) to speak for the Government which was in caretaker mode in any event, but, secondly, he was unable to speak as to what the Government might do into the future.

PN5831

SENIOR DEPUTY PRESIDENT MARSH: In terms of matching that extra - - -

PN5832

MR WHITE: But he did say that the Government of a variety of persuasions over recent years had supported wage outcomes of three per cent in the public sector. Now, that is speculation - I am sorry, Mr Sullivan or the Government at this stage is unable to speculate as to what his wages outcome might be for the next financial year. As I understand, that is the period the Governments work from, but Mr Sullivan in paragraph 4933 said in answer to this question:

PN5833

In relation to the Government's position in the NGO sector, does the Government as a whole ...(reads)... in terms of what its intentions are. We don't have a Government at the moment.

PN5834

So we are unable to make submissions as to what the Government wage outcome will be in the next financial year. Historically it has been three per cent over recent years and historically in each financial year, the Government does adopt a funding position. That doesn't mean between March and 1 July that there may not be a discrepancy, but - - -

PN5835

SENIOR DEPUTY PRESIDENT MARSH: The therapists' increase is due in March, isn't it?

PN5836

MR WHITE: Therapists in March.

PN5837

SENIOR DEPUTY PRESIDENT MARSH: And the others in July.

PN5838

MR WHITE: And the residential workers in July.

PN5839

SENIOR DEPUTY PRESIDENT MARSH: Yes, that is what I thought.

PN5840

MR WHITE: Yes, So in relation to therapists, from March to July, if they pick up the Government offer or an award in similar terms, then there would be a three month gap before the new Government funding wage offer was made and I emphasise, so that I am not blamed for committing the Government to anything, we can't say what the Government funding position will be in the 2003/4 financial year. Mr Sullivan reminds me it is a question which was asked same time last year by VP Ross, but there is that three-months and that is as far as we can take that.

PN5841

SENIOR DEPUTY PRESIDENT CARTWRIGHT: We went through and corrected a whole bunch of tables this morning and the consistent correction should be that the residential and support services and health and allied services movement will be on 1 July 2003.

PN5842

MR WHITE: Yes.

PN5843

SENIOR DEPUTY PRESIDENT CARTWRIGHT: But the tables are correct when they say the health professionals move on 1 March 2003?

PN5844

MR WHITE: Yes.

PN5845

SENIOR DEPUTY PRESIDENT CARTWRIGHT: So we are absolutely clear on that?

PN5846

MR WHITE: Yes, and I think those different types operate from the time when different agreements have been entered. We were going to make some submissions in relation to the administrative workers, but I think that has been covered in discussion in the Commission already. Our submission in short is that there is once again a direct lack of evidence, but the discussion we had earlier in my submissions I think would satisfy the Commission perhaps in relation to those matters.

PN5847

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Does the thrust of what you put before really mean that the funding offer would wear an increase of 6.67 per cent for the administrative staff?

PN5848

MR WHITE: For the?

PN5849

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Administrative staff.

PN5850

MR WHITE: On the current funding model, the 20 per cent component in relation to administrative staff would increase sufficiently if that was what was between the parties.

PN5851

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Yes, I was wanting to be clear on what you were saying, so you are saying you will wear anything?

PN5852

MR WHITE: In paragraph 209 - before I get to that, I had raised earlier the absence of any submissions and evidence in relation to exceptional matters for retrospectivity. By reason of the absence of that evidence and any submissions to respond to, we make no submissions other than to say in our submission there are no exceptional matters which would warrant the making of a retrospective award, but in the event that further submissions or evidence was to be put, we would want to reserve our rights to respond to that.

PN5853

In our submission, the department's funding offer and the wage outcomes which are possible by application of that funding offer give a fair, reasonable and comparable wage outcome for the workers, the subject of these applications. In our submission, comparability does not equate to parity. In our submission, the residential sector comprised of organisations providing services to different types of persons with different intensity of need has different staffing profiles which can be applied to the funding offer in a way to deliver suitable outcomes.

PN5854

In our submission, the factual basis in this case is substantially different from that considered by the Commission in Vision Australia and other MX cases where there was no appearance by the Government and no explanation by the Government of a funding position. In fact, in Vision Australia, there had been no funding made available by the Government at all and it was on that basis that the Commission made its criticism. In this case, funding has been made available in an explicable and overt way which would have enabled the parties had they so chosen to negotiate rational, fair and equitable outcomes.

PN5855

There have been a number of factors raised within the case about matters easily fixed which could move towards better concepts of fairness. The department would support the facilitative clause for salary packaging and one which prohibited the claw-back or sharing or whatever term. We don't agree with Senior Deputy President Cartwright that that would impose a cost on the employer. We don't agree that it would impose a cost in relation to superannuation because in any event, in our submission, the employer has to pay it.

PN5856

In our submission, whilst the department has not produced to the Commission a draft award which it seeks, we have produced indicative rates which fit within the known funding parameters. In relation to conditions, we say the evidence is scant, not costed, absent in relation to a large number of employers in any event and as a non-employer in this sector, the Government can't apply its conditions obtained through bargaining with offsets to another sector of the industry. Unless the Commission has particular questions in relation to any of the matters in my submissions, they are the submissions of the department.

PN5857

SENIOR DEPUTY PRESIDENT MARSH: No, thank you, Mr White. Yes.

[4.06pm]

PN5858

MR LANGMEAD: Perhaps I will deal with these in terms of I had some specific issues in particular paragraphs of the Government DHS submission.

PN5859

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5860

MR LANGMEAD: Perhaps if I go through that first and then return to some of the things which are made in the oral submissions. Some of them overlap to some extent but I hope I will adequately deal with them.

PN5861

SENIOR DEPUTY PRESIDENT MARSH: Yes, that is fine. That is fine.

PN5862

MR LANGMEAD: Yes. In paragraph 23 the DHS takes issue with the evidence of Ms Jackson and Mr Corboy provided a reference to the performance audits to which she was speaking of. I think the difficulty here is that the performance audit that was tendered as the exhibit in these proceedings is an extract only. The paragraphs which Mr Corboy referred to are not in that extract. Ms Jackson's evidence was not challenged or it wasn't put to her that she was wrong on that point and I think my recollection is correct that Mr White reserved his right to come back on any question arising from those documents.

PN5863

But there is no basis for challenging what she says and indeed Mr Corboy has provided the reference in the actual document.

PN5864

MR WHITE: Well, this seems to be something that really should be easily worked out.

PN5865

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN5866

MR WHITE: The paragraphs referred to by Mr Corboy were paragraph 5.16, which is on page 58 of the exhibit - page 59 of the exhibit, 14, 15, 16, 17 and 18 I think.

PN5867

MR CORBOY: I believe the references were 5.1.6, 5.1.4, 5.1.7 and 5.1.8. I did explain that I didn't have a copy with me but it is not 5.16, it is 5.1.6.

PN5868

MR LANGMEAD: I don't have 5.1. Are you talking about the Auditor General's report?

PN5869

MR CORBOY: We are talking about the Auditor General's report, yes, as I have been instructed.

PN5870

MR LANGMEAD: Can we have a copy?

PN5871

MR CORBOY: I said I don't have a copy with me.

PN5872

MR LANGMEAD: Well, there is no 5.1.6 on the - - -

PN5873

MR WHITE: We have exhibit VHIA1. Part 5 is providing resources for services. It commences paragraph 5.1. 5.1 doesn't have any sub parts.

PN5874

MR CORBOY: If it would assist the Commission when I return to the office I could provide the extract to all parties. It was provided to me by Ms Jackson during the lunch break when she accessed her copy that was available on the internet. So I apologise there is an error there.

PN5875

SENIOR DEPUTY PRESIDENT MARSH: All right. Well, if you can make that available to the Commission and to the parties and then if anybody wishes to put a short response in writing they can do so. I don't think we can take that any more further today without having the relevant documentation in front of us.

PN5876

MR LANGMEAD: In paragraph 50 the DHS takes the statement that the Commission shouldn't have some cross-examination of the history of the reasons of the differences in the underpinning instruments, attempt to remove such differences in section 170MX proceedings. The history has in fact been canvassed, canvassed indeed in DHSs own submissions. The position in relation to all of these instruments to which we seek parity and the underlying instruments is that there have been rates struck for DHS direct care employees over the years. For example, the PP arbitration conducted by Senior Deputy President Riordan at which rates were set having regard to changes in work value and the like.

PN5877

The work is identical on the evidence and so therefore any questions of whether work value considerations were taken into account at some point does not come into it in our submission. The minimum rates award which was made in 1999 by the full bench in relation to residential care workers is just that, a minimum rates award, based on an assessment of the classifications against the metal trades classifications and the Health Professionals Award has been the subject of detailed arbitral consideration for many years and contains an ongoing work assessment and those rates are properly set also.

PN5878

The Commission has enough information about the history of these matters. Paragraph 54, the department claims there is no evidence that each of the matters referred to in the document wasn't in issue between the HSUA and each organisation and say that the HSUA negotiated a central level of employer bodies. The employers were represented by their peak bodies, the representatives of which are here today. It is just, in our submission, quite clear that all of those matters were the subject of negotiations between the parties.

PN5879

In relation to the half day model, I think we have canvassed that considerably but it may be a convenient time for me to just refer to some of the observations which were made about it. In particular Ms Cresshull's evidence at paragraph number 467. Now, Mr White concludes from that that it is clear that Ms Cresshull was saying that the conciliations took place after the new bargaining periods - I am sorry - that the new bargaining periods were instituted after. In my submission that is not at all clear on that answer because he confuses the matter inadvertently by putting to Ms Cresshull that it was in March 2002.

PN5880

Now, that was certainly when the bargaining periods were cancelled, but in my submission you cannot glean from that question and answer that Ms Cresshull was clearly saying at all that the conciliation conference was before the institution of the new bargaining periods. The new bargaining periods, and this is a matter of reference to the Commission's files, in all but I think three instances were instituted in January, 29th and 30 January. So even if Ms Cresshull did agree to that proposition it wouldn't be true of any conference that took place in February before Vice President Ross. But in my submission she, in answering that question, was dealing with the March 2002 termination, or at the very least it was a confused question and answer session.

PN5881

The decision of the full bench about the half day model was said to be some 18 months ago by my friend. In fact the decision was in 1997. But anyway, it was in 1997, it was print 7638, and the full bench did decline to abolish the 24 hour model and said, and this is at page 5 of the decision. I am not sure whether the Commission has this decision?

PN5882

SENIOR DEPUTY PRESIDENT MARSH: Yes. Yes, we do in the Government's authorities. Yes.

PN5883

MR LANGMEAD: On the internet that I have got it is page 5 and it is the paragraph beginning, "We have decided". It is about point 9 of the page:

PN5884

Having regard for existing rates the determination we make as to a classification range rates for sleepover -

PN5885

etcetera -

PN5886

we have decided that the fair safety net of minimum wages for workers engaged under a 24 hour roster ...(reads).... and standard roster.

PN5887

Now, that is what the bench did determine. It wasn't implemented, it appears, until 16 December 1999, in print S1841, but if the bench - well, the bench did make that conclusion then. As we have illustrated in attachment E, the Bench's presumption that a 40 per cent loading would deliver an equitable outcome is in my submission, with the benefit of experience, erroneous and the example given based on actual rosters worked by Mr Skates, not hypothetical, demonstrates it is no longer equitable to maintain them all, and with respect, the bench's expectations in that regard have been shown to be wrong.

PN5888

I think ultimately the parties probably agree on the approach that should be taken by the bench in these proceedings but suffice to say that we do embrace the comments of the full bench in the Caro Mining case reproduced at paragraph 78 of DHSs submissions and in view of what Westrail was doing, which was not that it was any way attempting to undergo some form of subjective prognostication as to the outcome of negotiations.

PN5889

Now, in relation to paragraphs 83 through to 89, we don't accept that the Commission is restrained at all by section 95 and is certainly not precluded from including terms in the award that are sourced from a certified agreement. We don't accept that section 4 doesn't operate in respect of section 95 and that means that section 95 does not apply to MX awards. So as a matter of construction we reject what the department says there. By way of showing the Commission which would exist if section 95 was to operate, or said to be operate, the matters which the full bench must have regard to are set out of course in MX(5) and they include the merits of the case and the public interest, amongst other things, and of course any relevant principles formulated by a full bench for the purpose of that subsection.

PN5890

That seems very much at odds with section 95 which speaks of being inconsistent with principles established by a full bench that apply in relation to determining wages and conditions of employment in relation to other awards of the Commission and would not be otherwise contrary to the public interest. It seems to be applying, if section 95 applied, two public interest tests to the same arbitration and we say that can't possibly the desired effect of the draftsperson of the legislation.

PN5891

We do comment that the Queensland Health case and the DEET case were examining whether or not an interim award could be made and particularly relied on the operation of MZ in coming to that conclusion. But having said that it doesn't apply and we pressed that view, we say in any event even if it did apply it would have no bearing on this case because there are no principles within the meaning of section 95A which would apply in relation to an MX arbitration, and we have addressed the public interest in our submissions about public interest. So we say there are no principles which would - or what we ask the bench to do would be inconsistent with and we do say it would not be contrary to the public interest and indeed is in the public interest to make the awards that we seek.

PN5892

In paragraph 97 there is a reference to industrial regulation of award history containing both enterprise bargaining outcomes as well as considerations of productivity and the like matters. I am not sure how that is being put. If it is intended to suggest that you should go behind how those enterprise agreements were arrived at, then the Tasmanian teachers decision says that one should not do that, and that appears at page 7 of print Q00785, at about point 6 of the page:

PN5893

In determining the salaries claim we have had regard to teachers salaries reached by agreement elsewhere ...(reads)... is the result.

PN5894

And one of the last things Mr White said was that the Government in conducting its bargaining, he made some reference to offsets. Now, there was no evidence of that that I can recall and in any event, consistent with the decision of the Tasmanian teachers, they would not be taken into account, the reasons, merely the outcome, and it is the outcome of the public sector comparable employees that we ask the Commission to have regard to and grant us parity with.

PN5895

With salary packaging, as I noted this morning, in paragraph 98 the DHS asks that salary packaging be taken into account, effectively on the basis that they would deliver outcomes in excessive wages in the public service. In line what I said this morning about salary packaging but we do go on to say that the Commission shouldn't have regard to salary packaging particularly in circumstances where it is not universally available and in circumstances it is available on a lesser basis to employees, where there are a myriad of factors, including factors such as part time employment, eligibility of casuals, effect of ex payments, effect of superannuation, which despite DHSs reference to the tax ruling still seems to be very much a grey area.

PN5896

I can inform the Commission that the union's advice has been, and not from me, that the superannuation position is as Mr Kolmus described it and I am further instructed it has got something to do with the peculiarities of the industrial instruments concerned. Perhaps when we see the ruling from the DHS then we will be able to explore that further if necessary. But as it presently stands I think it is still very much a grey area as to what the position is in relation to superannuation.

PN5897

A further factor to take into account in relation to salary packaging is that it remains at the whim of the Federal Government. It can take it away at the stroke of a legislative pen and unless some account was given to that in any taking into consideration of salary packaging, then any reliance upon it might be undone by legislative action. I note that the DHS submission keeps going to health professionals and saying, well, what the figures you should be looking at is the public sector less the point 8 that they got for compensation by way of salary packaging.

PN5898

That is only a valid proposition if salary packaging is available and utilised, because it was a compensatory package. So we don't accept that that is the automatic matching rate that should be looked at at all. If there was universally available salary packaging and without restriction and the Commission decided that it should be taken into account, then it would be logically consistent with Commissioner Blair's decision to apply that factor but not otherwise.

PN5899

We note that the factor that applied to the areas of coverage of the HSUA Number 1 Branch, which is the direct care workers concerned here and the administrative clerical workers, the factor applied was a zero adjustment, presumably on the basis that it had - well, on the face of the document, because it had little effect on those earning under 40,000 K, which is the group in question. In paragraph 102 there is a reference to exhibit 1 and the percentage increases of 12.8 and 26.8 per cent. Those figures I think became evidence, resulted in a calculation which didn't match either that which the union was seeking and it is certainly not what it is presently seeking and has been seeking since the commencement of these proceedings.

PN5900

The differences, as the Commission has noted, haven't included the 3 per cent adjustment in March or July respectively and those figures are shown in HSUA58. When one takes those into account the figures in our submission become quite considerable, differences of $58 a week. The differences seem to range from amounts of about $23 up to as high as $120, depending on the classifications looked at, but those are set out in those exhibits. Those exhibits do include the point 8 per cent. They are based on absolute parity with the public sector. That is in respect of health professionals.

PN5901

In paragraph 116, again there is a reference to past reasons for increases in Senior Deputy President Riordan's decision. We again say that that has no bearing because the work is the same. The paragraph also laments that a number of the HSUA witnesses have not been informed of the effect of the Government offer. What they had been informed by the union is of the shortfall which included of course the 3 per cent. The Tasmanian teachers case referred to in paragraph 123 did have regard to salaries in other parts in Australia but this should be contrasted with the decision of the nurses case where a national approach was rejected.

[4.35pm]

PN5902

In paragraph 129 the DHS complains that the union doesn't make claims for salary packaging and as I indicated this morning, we do. In paragraph 129 is a reference to the number of therapists employed by schools funded by Department of Education. We just emphasise to the Commission that paragraph number 2279 Ms Sheridan that in respect of those contracts they included adjustments for wage increases.

PN5903

MR WHITE: Just while 129/130 was next, should have corrected, I take this from employers submissions, we said funded from DHS ranged from 98 per cent. I think it should be 100 per cent. I think someone else found that out and 22.9 per cent. But they are just minor corrections.

PN5904

MR LANGMEAD: I might just say in respect of that, it was also the evidence of the employer witnesses that in respect of the disability services that it was almost entirely, if not all, funded through DHS and the survey results it became clear in part that some of the respondents were describing the entirety of their activities and not just disability services. Some of those activities being activities well outside the scope of this matter.

PN5905

In paragraph 152 it is correct to assert that the reason for staff leaving NGOs is because of the higher wages offered in the public sector. That was specifically recorded in the performance report. It has presumably specifically recorded higher pay and Government as a reason. It is a minor point perhaps, but at 158 there is a reference to paragraph number 1356 which doesn't appear to be relevant to the point being made.

PN5906

In relation to paragraph 168 we simply make the point that the Commission did in Vision Australia exactly equate the wages of health professionals in the disability sector with health professionals in the public sector and the employers covered by that application constituted the employers of the vast majority of health professionals employed in the sector.

PN5907

SENIOR DEPUTY PRESIDENT CARTWRIGHT: There were only eight employers covered by that decision.

PN5908

MR LANGMEAD: Sorry, your Honour?

PN5909

SENIOR DEPUTY PRESIDENT CARTWRIGHT: There were only eight employers covered by that award.

PN5910

MR LANGMEAD: Yes, your Honour. Those are the very large employers in the sector. I was very pleased in paragraph 170, being a crossword fan, to acquire a new word in the lexicon being elision. I am not sure, having checked the Oxford Dictionary, that its precise meaning is accurately used in this one but it was a joy to see the word. Paragraph 174 invites the Commission to take into the account the independent nature and history of the organisations including the fact that alternative funding to the Government funding hasn't historically been the norm. We say that that is not a conclusion that is supported by the evidence in this case in relation to these services.

PN5911

In paragraph 178 there is a reference to print S9958, which is the decision of Commissioner Blair in relation to nurses and a suggestion that sustained the proposition that the HSUA and the organisations should jointly have been able to take steps to minimise the use of casual and agency employees. Whilst that decision had some suggestions and recommendations about how that might be implemented by those parties it, in our submission, isn't a matter which should be used to criticise the HSUA in these proceedings. We have proposed as a way of failing to increase productivity because we have proposed an award which we say will minimise, on the evidence, minimise the use of agency staff and casual employees.

PN5912

In paragraph 182 it is stated that the HSUA simply accepted the assertions of the employer representatives that no cost neutral conditions could be identified in the HSUA claim and there are some paragraph number references to the transcript. I ask the Commission to also examine paragraph numbers 418 to 438 in relation to this point where Ms Cresshull speaks of discussions with the employers about the various conditions and details the union's position about that.

PN5913

In paragraphs 187 it says that through the course of conciliation proceedings the DHS revised its funding offers in order to assist the parties to negotiate an outcome. I think the evidence was that there was only two funding offers made by the Government, one being the initial one and then a subsequent one in May. So throughout the course of conciliation proceedings seems to be putting that a bit too high.

PN5914

In paragraph 189 the DHS claims that a concession made by HSUA that it did not properly analyse the impact of the Government funding offer on wages within each employer. We reject the allegation that we made such a concession. Paragraph 195 to 197 seems to be attacking the employers in respect of not addressing rostering best practice. The findings of the performance audit in VHIA1 at 5.19 which is referred to, that was dealing with meeting clients needs. It wasn't referring to anything else, so that criticism seems, in our respectful submission, misguided.

PN5915

Now, the characterisation of what I described as a well trodden path as being an intention by the HSUA to have an arbitration 170MX rather than negotiated outcome is not something which I said and using my words in that way have taken me out of context. The paragraph number of 1758 was in response to a question from his Honour Senior Deputy President Cartwright about the approach of seeking comparability and his Honour saying that that was a novel approach and my saying, no, it is a well trodden path and it is clearly a reference to the principles that might be applied by full benches. It has got nothing to do with suggesting anything about using arbitration in this way.

PN5916

I am just trying to identify an exhibit number. There seemed to be some debate about what actually happens with the productivity dividend of 1.5 per cent. It is referred to in DHSs submissions at paragraph 226. It also referred to at paragraph 4.2.5 of exhibit HSUA40, being the disability services policy and funding plan and it says:

PN5917

The productivity dividend was applied at the non Government sector at a rate of 1.5 per cent on the overhead component of the ...(reads)... to consider this issue.

PN5918

Now, Mr White in relation to that productivity dividend said he took issue with what Ms Sheridan said about it being eroded and said it hadn't been, yet the exhibit seems to show that the real value of it must have been eroded in that there was an amount of $4.44, I think it was, applied by way of indexation, a factor of $4.34 taken off for the productivity increase, meaning that overall for that year there was an increase of only 4 cents and it seems to us that Ms Sheridan is right in that over time the value of the amount of money paid for administrative component is being eroded because as costs go up the administrative component isn't, or it has gone up by 4 cents, so as a matter of reality it isn't getting there.

PN5919

Your Honour Senior Deputy President Marsh has already noted that Mr Maloney referred to some 200 employers. We say there is no evidence that 200 employers will be picked up by CAs and we certainly don't make any concessions about that and we say it is quite irrelevant to these proceedings. I said this morning and I will say it again because each time the Government comes out with its unit cost calculations the employers nevertheless reject the proposition that there is this spare capacity there and as I did say this morning, they fairly vigorously reject that proposition in their evidence.

PN5920

Now, in relation to the conduct of the parties in the bargaining period, firstly can I say that much of the criticisms made of the parties seem to be directed to the period after the termination of the bargaining periods, namely, during the conciliation and in particular from about May to August, when the bargaining periods of course had been terminated in March. Section 170MX(5)(e) directs the Commission to have regard to the extent to which the conduct of the negotiating parties during the bargaining period was reasonable.

PN5921

I also refer to the Yallourn Energy decision which is contained in the DHS folder at page 10 where having regard to that part of the section MX(5) the full bench said there:

PN5922

The unions allege that the conduct of Yallourn during the negotiating period was not reasonable. There is ample ...(reads)... negotiable components of a bargaining agenda.

PN5923

Then they deal with the delegation that the company had inappropriately not disclosed information. So they certainly weren't phased by the very hard line positions taken by the parties in that case and as reference to Commissioner Lewin's termination decision will disclose, the parties had been attempting to reach agreement for something like, I think it was from memory, two and a half years.

PN5924

SENIOR DEPUTY PRESIDENT MARSH: I don't want to interrupt you, Mr Langmead, but are you going to be very much longer?

PN5925

MR LANGMEAD: I won't, your Honour.

PN5926

SENIOR DEPUTY PRESIDENT MARSH: We may have to take a break if you are.

PN5927

MR LANGMEAD: I notice Mr White has been furiously scribbling and it may be that he will want to say something further.

PN5928

MR WHITE: Well, not furious.

PN5929

MR LANGMEAD: Actively.

PN5930

MR WHITE: There is one matter which will take 10 seconds for me to reply to Mr Langmead's reply.

PN5931

MR LANGMEAD: Well, I am in the Commission's hands.

PN5932

SENIOR DEPUTY PRESIDENT MARSH: All right.

PN5933

MR LANGMEAD: I think perhaps 10 minutes at the outside, your Honour.

PN5934

SENIOR DEPUTY PRESIDENT MARSH: How long?

PN5935

MR LANGMEAD: About 10 minutes at the outside I would be.

PN5936

SENIOR DEPUTY PRESIDENT MARSH: We will take a short break. It will be a five minute break.

SHORT ADJOURNMENT [4.56pm]

RESUMED [5.06pm]

PN5937

SENIOR DEPUTY PRESIDENT MARSH: Yes, Mr Langmead.

PN5938

MR LANGMEAD: Given the Government's position in regards to March 2003, 3 per cent, that it doesn't have a position, if the Commission were to accept the Government's proposition and we urge it not to, but if it were to accept the Government's proposition it should not make an award in those circumstances which operated beyond February 2003 so that the union is in a position to go and bargain further for an adjournment at that point, rather than to have wait cap in hand until the Government makes up its mind by June/July. Of course, if the award is still operated it wouldn't be able to initiate a bargaining period or take protected.

PN5939

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Given it is now 13 December and most of the MX decisions that I have seen run to some pages, is that a practical suggestion?

PN5940

MR LANGMEAD: It is just as practical as the decision in, I think it was Vision Australia - - -

PN5941

SENIOR DEPUTY PRESIDENT CARTWRIGHT: That was a six month duration as I recall.

PN5942

MR LANGMEAD: Yes, and done specifically for that purpose so that the parties could address sooner rather than later the situation which as I recall, was similar to that which is proposed by the department, namely, that someone else was going to get an increase shortly thereafter and that needed to be addressed, as I say, sooner rather than later. So if we are in a situation where there is to be further movement in the comparative areas and the Commission was not persuaded to take account of that now, then any operative date should not preclude the union from seeking in an appropriate time span and that appropriate time span is before that increase comes about in which it can seek to negotiate to obtain that increase.

PN5943

We put it, as I say, very much as an alternative proposition because we urge the Commission to accede to the union claims and make an award which does take account of that future movement in both March and July.

PN5944

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Let me press you on that. Given that we have already got 23 December set down by direction for some response from the Government and that benches don't produce decisions instantly, how long do you think the duration of this award might be?

PN5945

MR LANGMEAD: Your Honour, if the Commission were to accede to what we seek then we would have no problem with an award going some distance into the future and indeed we think that would appropriate, but in the event that it doesn't, then the union shouldn't be constrained from seeking to redress that lack of comparability in the near future in circumstances where there are other directly comparable workers, the very workers who have these increases already and they have had them for some time, where they are going to get another increase in March and July. The employees the subject of this application, that is what they complain of. That is what their evidence is.

PN5946

SENIOR DEPUTY PRESIDENT CARTWRIGHT: But you are not seriously suggesting an award duration of two weeks or something like that, are you?

PN5947

MR LANGMEAD: Well, if necessary we are, your Honour. As I say, very much in the alternative. It is not what we want the Commission to do. Now, in relation to retention and recruitment, it was suggested there was a gap in the evidence - - -

PN5948

SENIOR DEPUTY PRESIDENT MARSH: So you are asking us, I just want to be clear about this, in our decision you want us to give serious consideration to a submission that we make an award that operates until February 2003, even though the decision might be brought down later than that date, or around that date?

PN5949

MR LANGMEAD: If the circumstances were as I have outlined, yes.

PN5950

SENIOR DEPUTY PRESIDENT MARSH: All right. Thank you.

PN5951

COMMISSIONER BLAIR: So if you are happy it will be longer, if you are unhappy it will be shorter?

PN5952

MR LANGMEAD: Yes, your Honour - Commissioner.

PN5953

COMMISSIONER BLAIR: It is all right. Keep going. I mean that is a nonsense argument, Mr Langmead. You know it is. Absolute nonsense argument.

PN5954

SENIOR DEPUTY PRESIDENT MARSH: It is getting a bit exasperated.

PN5955

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Given that it has taken two years and the termination of sets of bargaining periods to get here, I am surprised that you have put that proposition.

PN5956

MR LANGMEAD: Well, that in fact emphasises the very nature of the difficulties that would be faced, your Honour.

PN5957

SENIOR DEPUTY PRESIDENT CARTWRIGHT: But wouldn't those circumstances normally be an argument for having quite a substantial period of duration of the award to provide some stability and some known outcomes given the fuss and aggravation of getting to this point?

PN5958

MR LANGMEAD: That would be if the matters were sufficiently addressed, yes.

PN5959

SENIOR DEPUTY PRESIDENT CARTWRIGHT: But after two years you have given us your best shot.

[5.12pm]

PN5960

MR LANGMEAD: I am just looking to see what the duration sought of the award in this, your Honour. I just haven't been able to - - -

PN5961

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Some time in 2004 as I remember.

PN5962

MR LANGMEAD: March 2004, yes.

PN5963

SENIOR DEPUTY PRESIDENT CARTWRIGHT: And we note there has been no argument on that so, you know, we pick a figure out of the air.

PN5964

MR LANGMEAD: I think March 2004 was selected, your Honour, because that coincides with the expiry of the certified agreements in respect of the health professionals in the public sector, that the principle is similar there in that we would saying if we were to be left to hang out and dry waiting to see what the Government is going to do for us next year and that were the reason for the Commission not wanting to make a determination, then we should be free to bargain for that result, whatever that might be. We shouldn't be constrained by an MX award which would - - -

PN5965

SENIOR DEPUTY PRESIDENT MARSH: Except you have chosen to go the award avenue, not the enterprise bargaining avenue.

PN5966

MR LANGMEAD: With great respect, your Honour, we haven't done anything of the sort. We haven't chosen to be here.

PN5967

SENIOR DEPUTY PRESIDENT MARSH: Well, you chose not to reach agreement.

PN5968

MR LANGMEAD: No, your Honour, we were seeking - - -

PN5969

SENIOR DEPUTY PRESIDENT MARSH: Don't frown at me, Mr Langmead. The facts are there was no agreement reached and therefore the bargaining periods were terminated and an MX award made.

PN5970

MR LANGMEAD: No, no, with respect, your Honour, this isn't MW(7). This is an MW(3) termination. It wasn't because the parties couldn't reach agreement. It was because the industrial action that was being taken was threatening life and limb. So the union hasn't elected to do this at all. It made no application for the termination of the bargaining periods. It was told by the Commission, and it accepts this, that in these areas industrial action can and does have the effect of hurting people.

PN5971

It is taken reluctantly and if there is consequences under the statute that we have our bargaining period terminated and we have to face an arbitration, well, we accept that is the scheme. But it is not something we do of our own volition. It is not something we necessarily are comfortable with. It is a situation we nevertheless have no choice about, that when the bargaining periods are terminated the Commission conciliates and if it can't then get the parties to reach agreement it arbitrates. Rest assured, the union would have been delighted to have reached agreement.

PN5972

COMMISSIONER BLAIR: In the terms, exact terms sought by their log of claims.

PN5973

MR LANGMEAD: It would have been very delighted to have achieved that, Commissioner.

PN5974

COMMISSIONER BLAIR: But there was no movement.

PN5975

SENIOR DEPUTY PRESIDENT MARSH: Well, there is not much evidence of much concession.

PN5976

COMMISSIONER BLAIR: Well, there is no movement in their log.

PN5977

MR LANGMEAD: Ultimately there was.

PN5978

COMMISSIONER BLAIR: Not significant.

PN5979

MR LANGMEAD: Well, with respect, the variation to its position in response to the Commission's initiative to attempt one last attempt was quite significant.

PN5980

COMMISSIONER BLAIR: In the eyes of the beholder, Mr Langmead, I think.

PN5981

MR LANGMEAD: Sorry, your Honour?

PN5982

COMMISSIONER BLAIR: In the eyes of the beholder.

PN5983

MR LANGMEAD: Well, with respect, on an objective basis when the union had been seeking large percentage increases to then quantify those at a substantially lower rate and to suggest operative times for those dates which - - -

PN5984

MR WHITE: This is precisely the document that is not in evidence.

PN5985

MR LANGMEAD: The letter itself I think refers to those themes and that letter is in evidence. I was moving to deal with the recruitment retention and the allegation that there was a gap in the evidence, particularly in relation to what the employees thought about the Government offer and what effect that would have on it. The evidence about this was that the employees concerned were upset about not getting equivalency with the public sector rates, be they health professional rates or DHS direct employee, direct care employee rates in the certified agreement.

PN5986

Now, that in my submission is sufficient evidence about where they stood in relation to matters. That is what they wanted. That is what they were unhappy about and it was the other evidence, including the material in the performance audit, which supports that. Namely, that it is the fact of the biggest player in the labour market in this sector, the disability sector, is the Government and DHS and it is out there paying, in terms of direct care workers, very substantially more. Very substantially more. I think it is some 16 per cent on average. That is why these employees would rather work for the Government, don't like being treated as second class employees who get paid substantially less for doing exactly comparable work and they know that it is exactly comparable work.

PN5987

They mix with the people from DHS. One of the witnesses gave evidence about how the employees from the NGOs were almost ridiculed, you know, the implication being they were stupid for continuing to work for such lower rates. That is what the workers are upset about and that is what the evidence suggests, that that other player out there paying substantially more and it is still going to be paying substantially more on the Government's offer. Those figures from $23 up to $120 a week different come March or July.

PN5988

In relation to the evidence on recruitment and retention we didn't refer in our submission and should have to the exhibit W3, the volume dealing with the survey extractions and I think it is question 12. The response is to question 12 which indicate a large number of employers reporting difficulties with recruitment and retention. Not all of them, we concede that, but some of them didn't make a response at all, but many of them did.

PN5989

Now, one matter that we also wish to refer to in relation to the question of the relationship between the DHS and the service providers and these employees and it goes to this question of Vision Australia decision finding that the NGOs are effectively proxies for the Government and the employees are thereby proxies too, we wish to refer to HSUA 37 which is the departmental duty of care document. In particular page 5 where it is said at the left hand column at about point 8 of the page:

PN5990

The department contracts many agencies and community organisations to delivery many of its services. When ...(reads)... duty of care.

PN5991

SENIOR DEPUTY PRESIDENT CARTWRIGHT: But surely you are not arguing that that supports the proxy status? I mean that is a discussion, is it not, of the non delegable duty of care?

PN5992

MR LANGMEAD: It is, your Honour, but it is - - -

PN5993

SENIOR DEPUTY PRESIDENT CARTWRIGHT: I mean what is the connection between that and the proxy argument?

PN5994

MR LANGMEAD: Well, it is what they say about the nature of the services, your Honour. It is the responsibility of DHS to provide the services to clients and it is exactly as characterised in the Vision Australia decision.

PN5995

SENIOR DEPUTY PRESIDENT CARTWRIGHT: I mean it is talking about the relationship of principal and agents and contractors and all different kinds of legal relationship and having read it, a perfectly reasonable description, I would have thought, of the position and it goes through the fact that there are some duties that cannot be delegated to the contractor. I don't see that that has got any connection with the proxy argument.

PN5996

MR LANGMEAD: Your Honour, with respect, the point is that they say:

PN5997

The department contracts as many agencies and community organisations to deliver many of its services.

PN5998

Now, I have made reference earlier in the written submissions and the presentation this morning to the other departmentally sourced documents which speak of these services as being DHS services. They are DHS services, Government provided services provided to these clients which are provided through the NGOs and their employees and it is in that sense that the Vision Australia full bench made its comments about the proxies, that the organisations are doing them on behalf of Government.

PN5999

They are standing in as it were for the Government in providing those services and that is he sense in which Vision Australia uses the term and in our respectful submission, that is quite clear from the terms of that decision. Of course this dealing is dealing, as your Honour correctly characterises it, with the legal duty of care, but it is the way it addresses its responsibilities to those services. It acknowledges that it is indeed their services and it is yet another document which does in fact do that.

PN6000

SENIOR DEPUTY PRESIDENT CARTWRIGHT: It is just a normal sort of explanation, is it not, of the relationship between principal and contractor?

PN6001

MR LANGMEAD: That might be right, your Honour, but it is exactly the sort of relationship identified by Vision Australia and DHS has sought to distinguish that in some way. We say there is no distinguishing factor. Vision Australia got it right. Finally, a point which we did not raise and it was an oversight, is the question of the retrospectivity sought. We didn't make any submissions about it. The primary special circumstance we say exists in this situation is the very long delays in which this matter has taken to come to fruition.

PN6002

The movements in the comparable sections having taken place a very long time ago, so back to in fact January 2001 when those variations first took effect and so it has been a very long time the comparable sectors have been in front and they have got further in front and the terminations took place in March this year. That is some nine months ago. That, and in particular of course following the decision that arbitration was necessary, that was in August and we don't of course complain about the difficulties of the Commission in hearing these matters and the times frames in which they do. But it nevertheless is a factor of delay, which is beyond the control of the parties, and in particular, beyond the control of the union.

PN6003

SENIOR DEPUTY PRESIDENT MARSH: Are you asking us to take that into account as a special factor, are you, Mr Langmead?

PN6004

MR LANGMEAD: Yes, your Honour.

PN6005

SENIOR DEPUTY PRESIDENT CARTWRIGHT: And do what?

PN6006

MR LANGMEAD: Order as to retrospectivity, your Honour. I think the claim says to 1 January 2001, your Honour.

PN6007

SENIOR DEPUTY PRESIDENT CARTWRIGHT: And at the same time you are arguing that if necessary it shouldn't operate beyond February 2003?

PN6008

MR LANGMEAD: If necessary, your Honour, yes. What we say, your Honour, is that the Commission should try and put these employees in the - - -

PN6009

SENIOR DEPUTY PRESIDENT MARSH: For your two years retrospectivity in an award that may go for a week, that is what you are seeking?

PN6010

MR LANGMEAD: Well, depending on how the Commission sees it as being in relation to the unknown proposition of the Government's stance in relation to further movements next year. We say the Commission should that beyond doubt now and in which case we propose an award which goes to March 2004. But if the Commission - - -

PN6011

SENIOR DEPUTY PRESIDENT MARSH: How do you think the retrospective payment would affect the 58 employers we are dealing with? We haven't got any submissions on that, backdating it for two years. Increases, what did you say the range was?

PN6012

MR LANGMEAD: I have nothing further to put on that question, your Honour.

PN6013

SENIOR DEPUTY PRESIDENT MARSH: Well, I asked the question. I would like an answer to it, Mr Langmead. It is not an insignificant question that I am asking.

PN6014

MR LANGMEAD: I am sorry, your Honour, could you - - -

PN6015

SENIOR DEPUTY PRESIDENT MARSH: Is it something we should take into account, the impact on the viability of the 58 employer organisations if we give retrospectivity of the wage increases for two years?

PN6016

MR LANGMEAD: I think the Commission would take that into account.

PN6017

SENIOR DEPUTY PRESIDENT MARSH: Yes, thank you.

PN6018

COMMISSIONER BLAIR: I don't mean to be facetious, Mr Langmead, but I think I missed the big jolly red fellow in the suit.

PN6019

MR LANGMEAD: Just wait a couple of weeks, Commissioner.

PN6020

COMMISSIONER BLAIR: He must have sprinkled fairy dust on somebody.

PN6021

MR LANGMEAD: Just a couple of weeks, Commissioner. Check your fireplace.

PN6022

SENIOR DEPUTY PRESIDENT CARTWRIGHT: I mean Mr White quite rightly made the comment that the issue of special circumstances had not - sorry, exceptional matters, had not so far been raised. In raising this now in what would otherwise be the very closing submission of the case, you have opened a very significant area where we would looking be submissions from all the parties.

PN6023

SENIOR DEPUTY PRESIDENT MARSH: Yes, certainly.

PN6024

SENIOR DEPUTY PRESIDENT CARTWRIGHT: You are not serious, are you?

PN6025

MR LANGMEAD: Your Honour, we do make the submission. We also acknowledge the practical realities of what the Commission has done in the past in relation to these claims.

PN6026

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Well, if it was significant why didn't you raise it before?

PN6027

MR LANGMEAD: It was an omission, your Honour. I accept that that was the case.

PN6028

SENIOR DEPUTY PRESIDENT CARTWRIGHT: Sorry, what were you saying?

PN6029

MR LANGMEAD: Your Honour, we accept the practicalities of what the Commission does usually do in circumstances of claims of this nature and arbitrations of this nature. We have been unsuccessful in the past in obtaining retrospectivity. We nevertheless make the application.

PN6030

SENIOR DEPUTY PRESIDENT MARSH: Yes, thank you, Mr Langmead.

PN6031

MR LANGMEAD: If the Commission pleases.

PN6032

SENIOR DEPUTY PRESIDENT MARSH: Yes, Mr White.

PN6033

MR WHITE: Other than to say or make the submission that changes in other sector - entitled to run the case don't make exceptional circumstances. We have no further submissions. I mean there are a range of matters, all of which I think are dealt with in our written submissions. We are still not how, in relation to exceptional circumstances, the union puts its case, other than those three matters. There is evidential basis put in relation to any of them.

PN6034

If the Commission was minded to - we hesitate to extend the time that this case has taken. It may involve perhaps a forensic assessment on our part as to the likelihood or otherwise in the event the Commission was to make an award, or awards, that it would make retrospectivity. I would hesitate to make that forensic on my own and half past five. If an assessment was made and if the application is seriously pursued, it might well be the department would seek leave to either lead further evidence or make further submissions.

PN6035

SENIOR DEPUTY PRESIDENT MARSH: I think that might also apply to the employers. So the Government's funding offer doesn't involve a degree of retrospectivity, or does it?

PN6036

MR WHITE: No.

PN6037

SENIOR DEPUTY PRESIDENT MARSH: Yes, thank you. No further submissions?

PN6038

MR CORBOY: If I could just briefly, your Honour.

PN6039

SENIOR DEPUTY PRESIDENT MARSH: Yes, Mr Corboy.

PN6040

MR CORBOY: The issue of retrospectivity would cause our members a degree of extreme concern. Evidence has been given to the Commission that everything has to be fully funded and if it wasn't funded then some of our agencies would not be able to continue in their present form. It is quite clear in the evidence that has been provided. We don't believe exceptional circumstances have been out in this particular matter. If the Commission pleases.

PN6041

SENIOR DEPUTY PRESIDENT MARSH: Thank you.

PN6042

MR PARSONS: One very brief issue, your Honour.

PN6043

SENIOR DEPUTY PRESIDENT MARSH: Yes, Mr Parsons.

PN6044

MR PARSONS: And it goes to something that Mr White said and if I understood Mr White correctly, he said that the employers along with the unions put the position that whatever you decide the Government will fund. Now, if I have understood correctly that is clearly not right, our submission is clearly very different from that as we have spoken to particularly that reference. The position of the employers is not whatever you decide will become ..... that is the position of the HSUA but it is not the position of the employers. Thank you.

PN6045

SENIOR DEPUTY PRESIDENT MARSH: Thank you for the submissions today. In accordance with our directions issued on 25 November 2002, in paragraph 4, the proceedings are listed for comments before Commissioner Blair at 10 am on 23 December 2002. In light of the outcome of that conference we will determine whether or not we need to sit again to hear the parties in respect of the subject matter of that conference or any other matter upon reflection we find that we need further assistance, notwithstanding the HSUAs submission that a factor to be taken into account in retrospectivity should be the timing of this matter to suit the Commission's convenience. Thank you. The Commission stands adjourned.

ADJOURNED INDEFINITELY [5.34pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #HSUA55 EXAMPLES OF EFFECT OF SALARY PACKAGING PN5343
EXHIBIT #HSUA56 AUSTRALIAN TAX OFFICE PAY AS YOU GO TABLE, WEEKLY TAX PN5422
EXHIBIT #HSUA57 WRITTEN SUBMISSIONS PN5427
EXHIBIT #HSUA58 FURTHER TABLES INCLUDING MARCH 2003 PN5456
EXHIBIT #E8 EMPLOYER'S SUBMISSION AS FILED BY VECCI PN5577
EXHIBIT #M8 SUBMISSION OF MR MALONEY FOR PROACTIVE PN5577
EXHIBIT #VICRAID 1 PN5578
EXHIBIT #W18 WRITTEN SUBMISSIONS OF THE DEPARTMENT PN5585