C2003/2469, Transcript of Proceedings [2003] AIRCTrans 3647 (21 August 2003)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER ROBERTS

C2003/2469

COAL MINING INDUSTRY
(SUPERVISION AND ADMINISTRATION)
CONSENT AWARD, 1999, QUEENSLAND

Application under section 113 of the Act by
The Association of Professional Engineers,
Scientists and Managers, Australia to vary the
above award re Safety Net Review - Wages -
May 2002

SYDNEY

11.08 AM, THURSDAY, 7 AUGUST 2003

PN1

THE COMMISSIONER: Good morning, I will take the appearances please.

PN2

MR J. SHEATHER: If the Commission pleases, I appear for the Association of Professional Engineers, Scientists and Managers Australia.

PN3

THE COMMISSIONER: Thank you.

PN4

MR G. GILLESPIE: Good morning, Commissioner. I seek leave to appear as agent of behalf of some 17 companies, a list of which I have provided to your associate.

PN5

THE COMMISSIONER: Good, thank you. We might make that an exhibit. The list of companies represented by Mr Gillespie today subject to leave being granted is to become exhibit R1.

EXHIBIT #R1 LIST OF COMPANIES REPRESENTED BY MR GILLESPIE

PN6

THE COMMISSIONER: Mr Sheather, do you oppose leave?

PN7

MR SHEATHER: Yes, Mr Commissioner, there is no problem with that.

PN8

THE COMMISSIONER: You don't oppose leave?

PN9

MR SHEATHER: No, sorry, no. I answered the question in the wrong context.

PN10

THE COMMISSIONER: Leave is granted. Mr Sheather?

PN11

MR SHEATHER: While we are in the mood for this, Mr Commissioner, and probably before I begin my submissions if I can hand up a copy of a facsimile I have received from McCullough Robertson Lawyers.

PN12

THE COMMISSIONER: I take it Mr Gillespie has got a copy of this?

PN13

MR SHEATHER: He has, Mr Commissioner.

PN14

THE COMMISSIONER: Do you wish this marked, Mr Sheather?

PN15

MR SHEATHER: Well, on the basis of conversations I have had with McCullough Robertson and as your will note, Mr Commissioner, in the paragraph second sentence, they act for Thiese Pty Ltd. So yes, I would request that it be marked.

PN16

THE COMMISSIONER: A letter from McCullough Robertson Lawyers addressed to Mr Sheather signed by Mr Copeland and dated 25 July 2003 becomes exhibit A1 in these proceedings.

EXHIBIT #A1 LETTER FROM McCULLOUGH ROBERTSON DATED 25.7.03

PN17

MR SHEATHER: Thank you, Mr Commissioner.

PN18

THE COMMISSIONER: What does this letter say?

PN19

MR SHEATHER: This letter basically is advice in response to the service of the application to Thiese Pty Ltd and indicates that McCullough Robertson Lawyers have been employed to act on behalf of Thiese in relation to this matter. It seeks clarification as to the basis of our application and indicates that they will not be attending this hearing today. I have had conversations with McCullough Robertsons as recently as today to confirm with them that the matter before the Commission is purely the application of the 2002 safety net adjustment to the appropriate award.

PN20

THE COMMISSIONER: I take it this implies consent to your application, does it?

PN21

MR SHEATHER: We certainly would appreciate if that was to be the case but I haven't been able to confirm that with them at this point. Clearly from the letter and in my conversations they have had with me, they haven't given any indication of what their position is other than they are unable to attend today.

PN22

THE COMMISSIONER: Well, it's a helpful letter, isn't it?

PN23

MR SHEATHER: Well, I must admit it took me somewhat of a surprise that they would go to the trouble of doing that and then indicate that they weren't going to be here but they did request if I could put this matter to the Commission and in the spirit of advising the Commission of their intent I agreed to do so.

PN24

THE COMMISSIONER: All right. You have done so.

PN25

MR SHEATHER: Thank you. Just briefly in relation to this matter, Mr Commissioner, is that I am in somewhat of a quandary or uncertainty as to how this matter is to be progressed. Originally it was the intention of the association to have this matter referred to the President under Principle 10 but I must apologise to the Commission in this regard in that once I started to research the application it became apparent that the date of the 2001 application of the safety net review wages made 2001 before or by Commissioner Bacon was effective from 26 August 2002. So we are almost at the anniversary date.

PN26

THE COMMISSIONER: So that 26 August 2002 was for which?

PN27

MR SHEATHER: The 2001 safety net adjustment and that was applicable to this award.

PN28

THE COMMISSIONER: And this application covers?

PN29

MR SHEATHER: 2002 safety net adjustment.

PN30

THE COMMISSIONER: Okay. But as we are rapidly approaching the anniversary date and whereas we are fully cognisant that there is no automaticity or golden rule that on the anniversary date it is an automatic right that safety net adjustments will be applied to awards and so therefore we properly should bring this matter before the Commission. Once I became aware that this date approached I, as I said, am in somewhat of a quandary and I haven't had the opportunity of being able to speak with Mr Gillespie about this on behalf of the company up until this time.

PN31

THE COMMISSIONER: One simple way out of it and I always love a simple way out of these things would be to apply for the increases to apply from the first pay period on or after 26 August?

PN32

MR SHEATHER: Absolutely. If that is what we think is the best and the most appropriate outcome that would not be of significant problem for the association.

PN33

THE COMMISSIONER: It might be for the company. I am just floating it. If you haven't had an opportunity to speak to Mr Gillespie you are going to have one now. We will adjourn for five minutes while you discuss it with him.

PN34

MR SHEATHER: Thank you, Mr Commissioner.

SHORT ADJOURNMENT [10.21am]

RESUMES [10.29am]

PN35

THE COMMISSIONER: Just before you go on, Mr Sheather, I just report to the parties that I have discussed this letter of Mr Copeland's of 25 July 2003 with one of his colleagues. Mr Copeland has gone off this week somewhere. I am told that that person believes that the letter is meant to give consent but she is going to send me an email in the next 15 minutes after conferring with her client. SO at least we will know for sure by then. Now, Mr Sheather?

PN36

MR SHEATHER: Thank you, Mr Commissioner. I have had a chance to discuss some of these matters with Mr Gillespie and I am aware that there are a number of other fundamental matters that he wishes to raise in relation to this application that probably need to be dealt with as well. So in this instance it might be worthwhile if Mr Gillespie proceeds.

PN37

THE COMMISSIONER: I think so. Mr Gillespie?

PN38

MR GILLESPIE: Thank you, Commissioner. I appreciate it is a little bit unusual to go to the respondent first but there is a couple of issues that I would just like to raise if I can. The first one is that this award has not yet been reviewed under the terms of the paid rates review decision and consequently the wage rates are old coal industry rates, if I can call them that, which actually include compensation for a number of other things that are now covered by agreements or contracts with the individuals in most cases. The result is that I am aware that there has been at least one decision which said that flow on of safety net adjustments doesn't have to wait until the full item 51 proceedings under the Roller Act have been completed but this is a matter that has gone on for a number of years.

PN39

The paid rates review decision for example was in October '98 and here we are in August 2003 and we still don't have that matter resolved. However - - -

PN40

THE COMMISSIONER: This has a familiar ring to it, the coal matters?

PN41

MR GILLESPIE: That's true and I am aware that the President issued an edict that he wanted all of those matters finished by 30 June this year. Well, we still haven't managed to achieve that. But nevertheless we are getting closer and in fact the matter has been before Commissioner Bacon and although we are having probably a final attempt tomorrow to try and resolve it by agreement, if not there are in place already directions in respect of the hearing of this matter. Those directions provide for the employers to lodge their submissions by Friday, 15 August; the union by Friday, 5 September and any reply then by 11 September and the matter is then set down for hearing on 16 September in Brisbane.

PN42

So there is a process that is currently in place to deal with it so that on that particular issue my submission would be that this matter should be delayed until then. The second issue that I wanted to deal was the question of the actual increases that have been sought. The Commission will notice that in the actual weekly wage rates there is an increase of $19.90, not $18 as applied from the safety net adjustment. This has a long history, Commissioner, and goes back certainly before the, probably the safety net regime came into place, was one of its predecessors. It came about this way, that in the coal industry there was a 35 hour week, 35 ordinary hour week. In fact the industry worked significantly more than that depending on the particular circumstances of shifts and rosters and the like.

PN43

So far as the members of the now APESMA, their wage rates and hours of work were changed from 35 to 37.5 and to arrive at those new wage rates the adjustment was done by saying, well, that's an extra two and a half hours at time and a half which makes a total paid hours if you like for 37.5 work of 38.75 and consequently the arrangements was that the increases that flowed from the safety net adjustment or previous regimes was divided by 35 and multiplied by 38.75 So that is how you get from the $18 to the $19.90. However, with the paid rates decision and the fact that if we continued that process we would have set the rates as properly fixed minimum but then would continue to distort the figures from then on on the basis of that mathematical calculation.

PN44

On the last occasion when we were doing the safety net adjustment, namely the 2001 adjustment, the matter was before Commissioner Bacon and at that time he questioned in fact whether he had the ability to grant increases that were not in line with the safety net adjustment, namely - I can't remember what the figures were on that occasion but doing that mathematical calculation again - - -

PN45

THE COMMISSIONER: In simpliciter more than $18?

PN46

MR GILLESPIE: Exactly.

PN47

THE COMMISSIONER: I think I would share his concern.

PN48

MR GILLESPIE: Yes. On that occasion he decided to let the matter go through and suggested the parties needed to look at it and of course he was able to do that because the parties actually consented although he still had that reservation. So with the pending approach of the adjustment and the setting of properly fixed minimum rates through this arbitration process before Commissioner Bacon, we think it is time that we stop making these inflated adjustments based on the hours, particularly when you think about it that most industries work 38 hours, which is in fact more than 37.5 that applies in Queensland. So that they are getting a higher increase even if you look at it that way, based on the fact that they are working slightly less hours.

PN49

So that that of course then probably comes within the ambit of principle 10 of the Wage Fixing Principles and is probably a matter that also needs to be referred to the President to see whether it should be heard by a Full Bench or not. So that is why I thought it was worthwhile if I just outlined those two issues before we dealt with the other one, which I guess pales into insignificance because if these weren't here then we would have no trouble in consenting to the operative date of 26 August. But because of these two other issues we have that problem and think that they should be decided first. Is there anything else I can?

PN50

THE COMMISSIONER: No, I will hear from Mr Sheather in response to you now and we might ping pong this a bit.

PN51

MR GILLESPIE: All right.

PN52

MR SHEATHER: Thank you, Mr Commissioner. I should preface my remarks by saying that I am aware of the issue of the safety net adjustment and paid rates review and how those two co-exist, if I can use that term, because it is a matter that has been raised in previous matters before you, Mr Commissioner, in regards to the NSW variation for safety net adjustments by the employer. So I did expect that this matter would be raised. Certainly the issue of the rate adjustment and the actual methodology of how the safety net adjustment is applied to these rates in the award and the mathematical approaches by which we calculate that. The way Mr Gillespie has described it is accurate.

PN53

The calculation that I undertook myself to convert if you like the safety net adjustment to give it proper effect to what has become, I guess, custom and usage within this industry over many year, was exactly as Mr Gillespie indicates to the Commission. If I can deal with the paid rates issue. As Mr Gillespie has referred there is a judgment of the Full Bench. Unfortunately I can give - I can either give a copy or I can give you a reference for that, whichever - - -

PN54

THE COMMISSIONER: If you have the copy there it will be useful to me.

PN55

MR SHEATHER: Yes. I don't know, Mr Commissioner, if you want to mark that?

PN56

THE COMMISSIONER: I will just mark it for information.

PN57

MR SHEATHER: Yes. This is a matter or a decision by the Full Bench in a series of matters relating to I guess you would call it nursing homes on the basis of an appeal against the application of the safety net adjustments to six awards operating in the health, cleaning and aged cares sectors of the health and welfare industry in Western Australia. At paragraph 2 the matter is raised or a summary is given if you like of the basis for the appeals and that is the last sentence which says:

PN58

Each appeal raises the issue of whether the safety net adjustment should be applied to rates in awards which have not been converted to minimum rates in terms provided for in the paid rates review decision.

PN59

Mr Commissioner, if you go to paragraph 7 which is probably the part where their Honours deal with the matter and I will quote:

PN60

We do not accept the appellant's submission that the paid rates review decision disclosed an intention to limit the application of safety net adjustments to awards which contained properly fixed minimum rates.

PN61

They talk about to some degree paragraph 16 is ambiguous if you read it in conjunction with principle 8F but then probably the most important and salient point is at paragraph 8 about half-way through that paragraph where it says- it talks about the Commission:

PN62

It further found that it would be inappropriate for the implementation of safety net adjustment to be delayed pending the conclusion of item 51 proceedings whether item 51.4 is dealt with separately or not.

PN63

Then their Honours went on to dismiss the appeal and allow the safety net adjustment to be applied. We would say that is sufficient precedent to deal with the matter raised by Mr Gillespie in terms of whether or not the Commission has discretion to deal with the question of safety net adjustments to awards which may be argued and have not been the subject of paid rates review. In terms of the calculation process, I can indicate that this - I must admit I am finding it difficult in terms of what actually I should be saying on the part of the association other than this practice has been going on for a long time. It pre-dates my involvement with the association. It is similar to the process we use in calculating the application, the proper application as we would submit, of safety net adjustments of the intention of the Commission to coal mining industry awards both in New South Wales and Queensland - I should say New South Wales, Tasmania and Queensland.

PN64

As I said, it is a practice that has been followed for many years. I note the concerns expressed by the employers. I was not aware of the reservations of Commissioner Bacon until today. I note your concerns or your comments in relation to similar concerns that you may have of those.

PN65

THE COMMISSIONER: Prima facie it could be a problem.

PN66

MR SHEATHER: Certainly and whereas we would suggest that on the basis of this practice has occurred for many years, there is probably no need to change it on the basis that irrespective of the basis of the calculation the net impact for employers in paying these rates is nil or negligible because there are so few if any employees covered by this award who are paid in accordance with the award rates of pay. That being said, we are cognisant of the fact that whereas we wouldn't necessarily agree that the matter should be dealt with on that basis we recognise that this could pose problems for the Commission and obviously has implications for other applications that are before the Commission and before you, Mr Commissioner.

PN67

So whereas we are unable to consent that yes, we agree this matter should be referred to the President, I guess what I am saying is we are cognisant that that is a strong possibility and recognise that this is an issue that may need to be cleared up.

PN68

THE COMMISSIONER: What you haven't covered in your submission is what about the idea of just awaiting the finalisation of the matter before Commissioner Bacon? If your answer to that was yes, that is the end of it for the moment.

PN69

MR SHEATHER: It still doesn't deal with, in our submission, the issue that Mr Gillespie raises that it is these safety net adjustment, should that be applied just simply to minimum rates of pay within the award irrespective of the number of hours worked, does that mean that there needs to be a pro-rata or a calculation process for those employees in this award. All of them, the ordinary rates of pay, as Mr Gillespie indicates, are 37.5, not 35. I guess there needs to be some clarity or some discussion between the parties. I think the thing that is missing from the issue raised, as my friend has indicated, from the concerns of Commissioner Bacon, is that the parties at this stage, certainly not involving me, have not got together after that last judgment nearly 12 months ago and said well, how are we going to look at the basis for the calculation or the application of the safety net adjustments to award rates.

PN70

THE COMMISSIONER: With respect, you should have.

PN71

MR SHEATHER: You are absolutely right.

PN72

THE COMMISSIONER: This is the cart before the horse in my book. Can we try and make it again a bit simpler. You need time to talk to the employer, the employer has to speak to you.

PN73

MR SHEATHER: Absolutely.

PN74

THE COMMISSIONER: Possibly you are asking me to deal with matters which might be able to just be sorted out.

PN75

MR SHEATHER: Absolutely.

PN76

THE COMMISSIONER: I am now going to see in my diary and we will talk about another date.

SHORT ADJOURNMENT [11.40am]

RESUMES [11.47am]

PN77

THE COMMISSIONER: Having discussed the intriguing ins and outs of this matter with the parties in private conference, it has been agreed that this matter will be adjourned until 10am on Monday, 18 August 2003 in Sydney.

ADJOURNED UNTIL MONDAY, 18 AUGUST 2003 [11.48am]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #R1 LIST OF COMPANIES REPRESENTED BY MR GILLESPIE PN6
EXHIBIT #A1 LETTER FROM McCULLOUGH ROBERTSON DATED 25.7.03 PN17