C2002/2592, Transcript of Proceedings [2003] AIRCTrans 2278 (12 June 2003)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT CARTWRIGHT

C2002/2592

GLASS INDUSTRY - GLASS
PRODUCTION - AWARD 1998

Application under section 113 of the Act
by Australian Workers Union to vary the above
award re deleting contents of clause 13.4

SYDNEY

10.00 AM, THURSDAY, 22 MAY 2003

PN1

SENIOR DEPUTY PRESIDENT: Good morning, ladies, I note there is no change to the appearances from last time. As the directions which I sent out indicated I've referred this matter to the President who has decided that he is content for me to continue to deal with the matter. So you might like to bring me up to date on what's happened since we were last together.

PN2

MS PIERCY: Your Honour, I have had discussions with Ms Brooks in relation to our application. There are a few problems at the moment in regard to consent. There are some members of the Australian business that are still deciding on the matter. I've prepared the following if I may, your Honour, present it.

PN3

I have a witness statement from Mr Paul Curry who is the secretary of the Glass in Glass Production - Glass Container Industry branch of the union. I'd like to hand that up for the Commission's files. Your Honour, the union relies on the evidence of Mr Curry. Mr Curry couldn't be here today as he is interstate on union business. The statement sets out that across the glass industry there are approximately 1500 full time employees and approximately 10 casuals which the number fluctuates with the demands of the employers.

PN4

Also that the current casuals are currently being paid the casual rate of 20 per cent of the rates contained in certified agreements applied at each site. Therefore the financial impact would be nominal. Mr Curry also states that there are casuals working under the Metal and Engineering and Associated Industries Award receiving the 25 per cent casual entitlement working at the same site as the glass industry casuals.

PN5

Your Honour, many awards have had the 25 per cent applied for and approved by the Commission, some of which are the Metal and Engineering Associated Industry Award, Pastoral Industry Award, AWU Construction and Maintenance Industry Award, Graphic Arts Award. It was found that 20 per cent does not cover increases since the 1970s. That principle is contained within the decisions of those awards.

PN6

Your Honour, if I could draw your attention to those decisions previously mentioned. There is a reference in each of them at section 3 and section 88 contained in the Act. It is the general thrust and principle of these decisions that the union is relying on today. The union believes that the current loading of 20 per cent does not adequately compensate a casual employee in comparison with a full time employee. Casuals employees are not entitled to receive annual leave, sick leave, severance pay or public holidays, termination of employment, time off during notice period or bereavement leave and other areas of disadvantage relate to irregularities of work and income. Lack of career path, reduced training opportunities, entrance and lost time associated with casual work.

PN7

Your Honour, I would like to hand you another document which is a comparison of entitlements applying to full time and casual employees.

PN8

THE SENIOR DEPUTY PRESIDENT: Given that you are handing up a number of documents I will mark them for ease of identification. We will mark as A1 the witness statement of Paul Curry. We will mark as AS2 what you've just handed up namely Glass Industry - Glass Production Award 1998 entitlements for full time and casual employees.

EXHIBIT #A1 WITNESS STATEMENT OF PAUL CURRY

EXHIBIT #A2 GLASS INDUSTRY - GLASS PRODUCTION AWARD 1998 ENTITLEMENTS FOR FULL TIME AND CASUAL EMPLOYEES

PN9

MS PIERCY: Your Honour, the calculations in this schedule are based on the calculation schedule contained within the Metal and Engineering and Associated Industries Award decision T4991. It shows the comparison of entitlements applying to full time and casual employees over a 12 month period. If the Commission please.

PN10

THE SENIOR DEPUTY PRESIDENT: You might like to take me through why you say that supports your application.

PN11

MS PIERCY: Well, the comparison between the full time and the casual employees is marked in days. 260 days over the 12 month period. The schedule shows the entitlements to full time employees in regard to public holidays, sick leave, personal leave, which is deducted from the casuals rate of 260.

PN12

THE SENIOR DEPUTY PRESIDENT: Why is it 8 days in this table?

PN13

MS PIERCY: Because the award allows 8 days, your Honour.

PN14

THE SENIOR DEPUTY PRESIDENT: Now, you will note that in the metals decision, if I recollect correctly, the award allowed 10 days leave but the bench use 6 days leave being the average on the evidence presented of sick leave taken. So you're working on the simple maximum, are you, by comparison with what was used in the Full Bench case?

PN15

MS PIERCY: Working on the days that were mentioned in the award, allocated through the award.

PN16

THE SENIOR DEPUTY PRESIDENT: You would be aware that in both the metals case and also in the Pastoral Industry Award the Full Bench specifically addressed what was the number of leave days to be considered and made particular decisions independent of the full days that were available under the award. So, what's the basis on which you say that the full amount available under the award should be taken into account in this table?

PN17

MS PIERCY: Well, actually there are two rates. As the award states it's worked on an hourly rate because of the continuous shift workers out there, depending on what shift the workers are on it can actually be higher than 8 days. so I've taken the lower of the two rates.

PN18

THE SENIOR DEPUTY PRESIDENT: Is there some evidence that you plan to present on the actual incidence of the use of sick leave by full time employees?

PN19

MS PIERCY: Well, this is the document I've prepared for today. If further evidence is required I would have to present it at a further hearing.

PN20

THE SENIOR DEPUTY PRESIDENT: Certainly. I mean I am just asking you about the document that you've handed up. Carry on.

PN21

MS PIERCY: That leaves a ratio of 7.8 per cent. Then there's the annual leave days 20 days annual leave for full time employees and also the leave loading which calculates at the 3.5 days.

PN22

THE SENIOR DEPUTY PRESIDENT: Now, why do you add those to the 260 days in a case of a full time employee?

PN23

MS PIERCY: Because their entitlement is over and above the working days. Their paid days in comparison to a casual who would be unpaid for those days.

PN24

THE SENIOR DEPUTY PRESIDENT: But the total working days works on 52 weeks and 5 days per week does it no?

PN25

MS PIERCY: That's correct, that's the 260 days.

PN26

THE SENIOR DEPUTY PRESIDENT: So how do you arrive at a figure higher than 260?

PN27

MS PIERCY: I've taken this from the Metal Industry decision, your Honour, and that's how it was calculated in the Metal Industry decision.

PN28

THE SENIOR DEPUTY PRESIDENT: If I recollect it is not made plain in the Metal Industry decision why that's added, is it? I mean isn't the normal situation that a full time employee is employed for 52 weeks but in actual fact only works 48? They work 48 weeks but get paid for 52.

PN29

MS PIERCY: That's correct, yes, they do have those days leave. Their full time employees are paid for those days in comparison to the casuals that aren't paid.

PN30

THE SENIOR DEPUTY PRESIDENT: Yes, I understand that, yes.

PN31

MS PIERCY: Then it goes on to the long service leave. Approved personal leave, which is 5 days. Long service leave is 4.3 which brings it up to 21.4 per cent. Then there's a notice of termination of employment which is a week in lieu and the total coming to 23.5 per cent.

PN32

THE SENIOR DEPUTY PRESIDENT: Now, who are we comparing with here? Are we comparing a casual employee with a long serving full time employee?

PN33

MS PIERCY: Well, a full time employee as such, your Honour.

PN34

There would be varied length of service for - - -

PN35

THE SENIOR DEPUTY PRESIDENT: If you take long service leave for example - this award applies nationally does it not?

PN36

MS PIERCY: Yes.

PN37

THE SENIOR DEPUTY PRESIDENT: If I recall there's no long service leave provision in the award itself?

PN38

MS PIERCY: That's correct.

PN39

THE SENIOR DEPUTY PRESIDENT: So that the long service leave arrangements of each state apply.

PN40

MS PIERCY: That's correct.

PN41

THE SENIOR DEPUTY PRESIDENT: I had cause the other day to look at Queensland and my recollection is that in Queensland one qualifies for long service leave after 15 years I think it is and accrued long service leave can be paid out if employment terminates after 10 years so up until 10 years if an employee leaves the organisation there's no pay out at all for long service leave. After 10 years to 15 years there is a pay out if the employee leaves the organisation and from 15 years on the employee is actually able to take long service leave. So implicit in your table is it not that you are comparing a full time employee who has at least 10 years service?

PN42

MS PIERCY: That's correct. That is worked out on a 15 year service.

PN43

THE SENIOR DEPUTY PRESIDENT: In other words there's no right derived by a full time employee for any sort of payment for long service leave unless that employee works 10 years in the case of Queensland as I've just indicated?

PN44

MS PIERCY: Yes, that's correct, your Honour.

PN45

THE SENIOR DEPUTY PRESIDENT: So, implicitly therefore the underlying comparison is with a long serving full time employee?

PN46

MS PIERCY: Well, it could be that so, your Honour, but it is just an average calculation. There are some people that wouldn't work obviously that long but there are people that serve even longer than 15 years.

PN47

THE SENIOR DEPUTY PRESIDENT: You don't have any evidence on the probability of employees in this industry working for 10 years or longer?

PN48

MS PIERCY: I haven't, not with me, your Honour.

PN49

THE SENIOR DEPUTY PRESIDENT: So, when we do the comparison who are we comparing?

PN50

MS PIERCY: We are comparing full time employees with casual employees.

PN51

THE SENIOR DEPUTY PRESIDENT: Are we comparing people of the same length of service, if you see what I mean? The question I am raising is well if no right derives to a full time employee for any payment for long service leave unless they serve 10 years in the case of Queensland, are we also comparing in the right-hand side, a casual who works for 10 years?

PN52

MS PIERCY: Well, it could be said that that is possible as some casuals do work for the same employer but not on a continuous basis.

PN53

THE SENIOR DEPUTY PRESIDENT: In this comparison, are you proposing that one can think of a variety of approaches and one would be that we do the comparison with a long serving full time employee or we recognise that long service leave is what the Full Bench in Metals referred to as a contingent payment. It may arise or it may not arise in which case another approach would be to attach some probability to the fact that it might be paid out. Some probability determined by looking at the distribution of the years of service of the employees covered by the award. Which do you say would be - - - ?

PN54

MS PIERCY: I'd say, your Honour, that would be the probability that the full time employee would be entitled to long service leave. There would be some who would and some who wouldn't.

PN55

THE SENIOR DEPUTY PRESIDENT: So, if that were the case, what does 4.3 represent?

PN56

MS PIERCY: 4.3 represents the long service leave days in days that would be worked out as days for a year for a full time employee as opposed to a casual who wouldn't be entitled.

PN57

THE SENIOR DEPUTY PRESIDENT: Just going to page 1 of A2:

PN58

An employee is entitled to long service leave under the Act ...(reads)... 4.3 -

PN59

So basically you've worked on the full benefit after 15 years divided by 15.

PN60

MS PIERCY: That's correct.

PN61

THE SENIOR DEPUTY PRESIDENT: To come up with 4.3. When it says "under the Act" which Act is that? Is that the New South Wales Act or - - - ?

PN62

MS PIERCY: That's correct, that's the New South Wales Long Service Leave Act.

PN63

THE SENIOR DEPUTY PRESIDENT: If as you've said you need to work on some probability that a full time employee may work for 15 years then that probability factor would be a multiplier on 4.3, wouldn't it? In other words if there was a 50 per cent probability that an employee might work for 15 years you would therefore multiply 4.3 by the probability of .5 on what you've proposed?

PN64

MS PIERCY: I'm not quite following you, your Honour. Do you mean that that would be the amount of years that the full-time employee would be entitled?

PN65

THE SENIOR DEPUTY PRESIDENT: No. What you said is that in looking at long service leave one should take the probability of a full-time employee working for the period to qualify for long service leave; and you've used 4.3 as the maximum amount they qualify for after 15 years.

PN66

So, taking what you've said, I'm assuming that if we're to take account of the full-time employee working for 15 years then you're looking at the distribution of service of the employees in an industry, working out what is the probability that a full-time employee will work that long and applying that as the factor to 4.3. Now, in principle at the moment this table is worked on 100 per cent probability that a full-time employee will qualify for long service leave after 15 years - - -

PN67

MS PIERCY: Yes, that's correct.

PN68

THE SENIOR DEPUTY PRESIDENT: - - - which clearly can't be the case.

PN69

MS PIERCY: It wouldn't be in all cases, your Honour. It would be applied to some people and not others as their years of service would vary.

PN70

THE SENIOR DEPUTY PRESIDENT: If I recall, the Full Bench in Metals said that on a stand-alone basis they could attach no more than .65 to long service leave, wasn't it?

PN71

MS PIERCY: I'm not sure, your Honour.

PN72

THE SENIOR DEPUTY PRESIDENT: All right. So basically what you're putting to me is that long service leave should be worked on the basis that someone can qualify after 15 years and we should attach the probability of a full-time employee working for 15 years.

PN73

MS PIERCY: That's correct, your Honour.

PN74

THE SENIOR DEPUTY PRESIDENT: All right. Just before we leave long service leave: you've taken the New South Wales Act. Do we have information on the number of employees covered in each state?

PN75

MS PIERCY: I don't have that with me, your Honour, but I believe that the majority would be in New South Wales.

PN76

THE SENIOR DEPUTY PRESIDENT: Right; and, relevant to that, from my recollection of the Queensland Act, casuals are not excluded from long service leave in Queensland and qualify. I haven't had cause to look at others but it may well be that there are different arrangements for the various states. So I'm looking at this table and saying, "Well, what evidence do we have that is relevant to what is the factor to be taken into account for long service leave?"

PN77

MS PIERCY: Well, I've actually only just had a look at the New South Wales Act. That number may vary if we do an average of all the states.

PN78

THE SENIOR DEPUTY PRESIDENT: So in some states it might be zero because casuals are able to qualify; in other states casuals may not be able to qualify and, therefore, it would be a different number.

PN79

MS PIERCY: That's correct.

PN80

THE SENIOR DEPUTY PRESIDENT: It may even be a higher number in states - and there are some occasions where one qualifies for long service leave after 10 years rather than after 15 years.

PN81

MS PIERCY: That's correct.

PN82

THE SENIOR DEPUTY PRESIDENT: All right. So then you get to Notice of Termination and Employment by the Hour Effect.

PN83

MS PIERCY: Your Honour, this is a week in lieu, or payment in lieu, which full-time employees are entitled to, as compared with casuals who don't enjoy that entitlement. This brings the ratio that I've calculated to 23.5 per cent.

PN84

THE SENIOR DEPUTY PRESIDENT: How do you deal with the fact that that's a one-off event? In other words, if we take a long-term full-time employee and, by inference, it's someone who has worked at least 10 years - and on these figures would appear to be someone who has worked 15 years - termination of employment, and it has got to be termination of employment at the initiative of the employer, it occurs only once not every year - - -

PN85

MS PIERCY: That's correct, your Honour.

PN86

THE SENIOR DEPUTY PRESIDENT: - - - how do you deal with the fact that you've got a one-off event?

PN87

MS PIERCY: Well, each employee is entitled to that. Each full-time employee is entitle to that one-week payment in lieu - that's 1500 full-time employees compared with, say, on an average 100 employees.

PN88

THE SENIOR DEPUTY PRESIDENT: It's only once over that period. If we're talking about an employee who qualifies for the full amount of long service leave being someone who has worked for 15 years, termination can only occur once over the 15 years; but you work out a loading based on the benefit being paid every year.

PN89

MS PIERCY: That is correct, your Honour.

PN90

THE SENIOR DEPUTY PRESIDENT: How do you deal with those one-off events; it only happens once?

PN91

MS PIERCY: My logic was that each full-time employee is entitled to that even though it is a one-off entitlement.

PN92

THE SENIOR DEPUTY PRESIDENT: It's also termination at the initiative of the employer, isn't it?

PN93

MS PIERCY: Yes, that would be correct.

PN94

THE SENIOR DEPUTY PRESIDENT: What's the probability in this industry of a full-time employee, or a part-time employee, being terminated at the initiative of the employer?

PN95

MS PIERCY: Not very probable in these times but it can happen and it is a benefit that that full-time employee has.

PN96

THE SENIOR DEPUTY PRESIDENT: Yes. I'm conscious that the Full Bench in the Metals case indicated that valuing these sorts of benefits is highly problematical, isn't it?

PN97

MS PIERCY: Yes, I would say so, your Honour.

PN98

THE SENIOR DEPUTY PRESIDENT: Can I just ask then the other question. In the case of the full-time employee why do you add all the numbers? In other words, why does the total become more than 260?

PN99

MS PIERCY: Because they're added as benefits; they're calculated as benefits to full-time employees.

PN100

THE SENIOR DEPUTY PRESIDENT: Isn't the situation that a full-time employee is employed for 52 weeks five days a week - and we're talking about a long run over a period of many years - and from that an employee is able to take time off for 20 days but get paid for them, an employee is able to take time off for sick leave and but gets paid for them, an employee is able to take time off for sick leave but gets paid for them; he may take time off for public holidays but gets paid for them, and even long service leave, you take time off but you get paid for it. It's only in the case of termination of employment, isn't it, that you get paid for extra days?

PN101

MS PIERCY: That's correct. These rates that are added on are applied to - say, full-time employees, they are paid for them whereas the casuals are not paid for them.

PN102

THE SENIOR DEPUTY PRESIDENT: Yes.

PN103

MS PIERCY: That's the comparison.

PN104

THE SENIOR DEPUTY PRESIDENT: Anything further you would like to add on A2?

PN105

MS PIERCY: No, that' fine, thank you, your Honour.

PN106

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Brooks?

PN107

MS BROOKS: Thank you, your Honour. Unfortunately I haven't been able to get the views of each of our members who are respondent to this award. On the last occasion we were before you I anticipated being able to ascertain their views in relation to the application in this short period. Unfortunately that hasn't been able to occur. I have the views of a number of members in relation to the application but I haven't been able to confirm the position of two significant companies within the industry. That doesn't mean to say that they are objecting to the application or consenting to it; merely that I haven't been able to confirm their position.

PN108

So, firstly, that's where I am today in terms of the position that I'm able to put before the Commission. A number of things, I think, arise from the materials that have been handed up this morning by Ms Piercy. I don't have a copy of those so I'm not able to respond - - -

PN109

THE SENIOR DEPUTY PRESIDENT: Sorry - you didn't get A1 and A2?

PN110

MS BROOKS: No, but Ms Piercy said that she would fax them to me so that's fine. In relation to the long service leave discussion that you had earlier: I think, from my recollection, that there's the ability in New South Wales for casuals to accumulate time towards long service leave in a similar fashion to the one you referred to in Queensland. I'm not sure about the other states but in New South Wales it's my recollection that long-term casuals become entitled to long service leave in the same way that full-time employees do in New South Wales if they've been employed since May 1985, I think is the date. So that's really the only thing I can add in relation to that part of the detail that was put this morning.

PN111

THE SENIOR DEPUTY PRESIDENT: Sorry - did you say May 1995 or 1985

PN112

MS BROOKS: 1985, I think. I'll be able to confirm that information at some point in the future, your Honour.

PN113

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN114

MS BROOKS: In relation to that, I would be asking if we could have another date in a number of weeks in order for me to confirm the views of the members that I haven't yet been able to confirm, and I apologise for the delay that's been caused to the Commission and the union in this matter. I had anticipated that we would be able to sort it out either way by today's date but I haven't been able to do so.

PN115

THE SENIOR DEPUTY PRESIDENT: I see. Ms Piercy, is there anything you would like to say in relation to that?

PN116

MS PIERCY: No, nothing to add. If Ms Brooks requires a further hearing and it's agreeable to your Honour, we will - - -

PN117

THE SENIOR DEPUTY PRESIDENT: So you don't oppose the proposition that we adjourn today and reconvene at some later time?

PN118

MS PIERCY: No, that's correct.

PN119

THE SENIOR DEPUTY PRESIDENT: All right; and doing that gives both of you the opportunity, when we're together next, to present any further evidence or material that you would wish particularly in view of the fact that I've raised some questions this morning based on having done my homework. There are some intriguing issues in dealing with this which are rather difficult for the bench to decide and, therefore, having some material that is helpful would really assist.

PN120

Well, now, Ms Brooks, how long are you actually asking for?

PN121

MS BROOKS: I think a period of two weeks, your Honour. I don't want to drag it out too much longer. Based on the discussions that I've been having with the companies concerned, I have informed them that it's likely there will be a reasonably short time-frame, because o the period of time that this matter has essentially been on the Commission's books, so they are aware of the time-frames involved. So two weeks, I think, would be suitable, depending on your availability.

PN122

THE SENIOR DEPUTY PRESIDENT: It's now 22 May. So, for example, if we were to look at Tuesday, 17 June, which is a bit longer than two weeks because there's a long weekend in the meantime but it certainly gives everybody the opportunity to do whatever homework they need to do, whether it's discussion of whatever.

PN123

MS BROOKS: That's suitable from my point of view. Yes, thank you, your Honour.

PN124

THE SENIOR DEPUTY PRESIDENT: Ms Piercy, do you have a comment on that?

PN125

MS PIERCY: That's fine, thank you.

PN126

THE SENIOR DEPUTY PRESIDENT: So we'll say 10 am on Tuesday, 17 June, and I thank you both this morning too. On that basis we'll adjourn.

PN127

MS PIERCY: Thank you.

PN128

MS BROOKS: Thank you.

ADJOURNED UNTIL TUESDAY, 17 JUNE 2003 [10.37am]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #A1 WITNESS STATEMENT OF PAUL CURRY PN9
EXHIBIT #A2 GLASS INDUSTRY - GLASS PRODUCTION AWARD 1998 ENTITLEMENTS FOR FULL TIME AND CASUAL EMPLOYEES PN9