C2002/5346, Transcript of Proceedings [2003] AIRCTrans 622 (25 February 2003)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER LARKIN

C2002/5346

MEDIA, ENTERTAINMENT AND ARTS ALLIANCE

and

SEVEN NETWORK (OPERATIONS) LIMITED

Application under section 170LW of the Act
for settlement of dispute re employment status
for journalists

SYDNEY

10.15 AM, FRIDAY, 7 FEBRUARY 2003

Continued from 30.1.03

Hearing continuing

PN614

THE COMMISSIONER: Could I have the appearances, please.

PN615

MR M. RYAN: I appear for the Media, Entertainment and Arts Alliance and with me is MR J. PEACOCK.

PN616

MR J. LUNNY: Commissioner I confirm a change in appearance from when the matter was last before you on Thursday, 30 January, Commissioner. My understanding is given the nature of the proceedings, leave to appear has been granted in this matter. If the Commission pleases.

PN617

THE COMMISSIONER: Mr Lunny, you are saying you have Mr Blackman with you, I presume.

PN618

MR LUNNY: I have.

PN619

THE COMMISSIONER: Mr Ryan, do you agree with that?

PN620

MR RYAN: I don't oppose leave being granted in any way on this occasions, Commissioner.

PN621

THE COMMISSIONER: Thank you, Mr Ryan. Leave is granted, Mr Lunny. Mr Ryan, on the last occasion when an application for an adjournment was sought and it was granted, Mr Peacock tendered the draft order that MEAA sought in proceedings before me, do you have that?

PN622

MR RYAN: I have spoken to Mr Peacock.

PN623

THE COMMISSIONER: I marked it MEAA1.

PN624

MR RYAN: Yes, I do, Commissioner.

PN625

THE COMMISSIONER: So that is the order, there is no change?

PN626

MR RYAN: No change, Commissioner.

PN627

THE COMMISSIONER: All right. Well, I will hear your submissions, thank you, Mr Ryan.

PN628

MR RYAN: I firstly thank you for the later starting time today because of my appearance before Senior Deputy President Drake at the same time.

PN629

THE COMMISSIONER: I hope that did not inconvenience anyway.

PN630

MR RYAN: No, it didn't, Commissioner. Commissioner, if I could refer you to the enterprise agreement and that particular part where there is disagreement between the parties, you will find that is in schedule A to the certified agreement.

PN631

THE COMMISSIONER: Schedule A?

PN632

MR RYAN: Yes, it is, which is the redundancy agreement. Just by way of background, Commissioner, the redundancy agreement was entered into by both my union and the CPSU and Network 7 some years prior to the certified agreement coming into being but was incorporated into the certified agreement. Commissioner, clause 1.5, for want of a better term is the redundancy agreement. It says:

PN633

7 Network Operations acknowledge employees issued with employment contracts under provisions of the Journalist Television Award 1998 may elect ...(reads)... this amount will be adjusted by safety net adjustments.

PN634

So you can see there, Commissioner, we need to refer back briefly to the award just to show what is an employment contract under the provisions of the award. You can see what comes on the plate is an election. The point to be there are possibly two pots of money to such an employee, one that is on a fixed term contract pursuant to the award based on that person's actual salary or, alternatively, if one looks at annexure A to the redundancy agreement, Commissioner, you will find a not uncommon schedule there which bases both notice payments and severance pay to employees made redundant based on the length of service with the company and you sill see there is a sliding scale. Obviously, the longer you are there, the more you get in redundancy pay.

PN635

So just, for example, after 10 years service, Commissioner, you are entitled to 30 weeks severance pay, 4 weeks notice or pay in lieu and an additional week's notice if you are 45 or over and the final column is the totality of the payment, both severance pay and the notice. So for a 10 year person, the total payment is 34 weeks combined notice and severance pay or 35 weeks if the employee is aged over 45.

PN636

THE COMMISSIONER: What is the notice for bracket 1, Mr Ryan?

PN637

MR RYAN: The (1) is the additional payment, Commissioner.

PN638

THE COMMISSIONER: Additional notice?

PN639

MR RYAN: Additional notice payment to somebody who is aged over 45.

PN640

THE COMMISSIONER: Yes, of course, logical.

PN641

MR RYAN: In some cases you will see that if you get an additional 2 weeks notice if you are aged over 45.

PN642

THE COMMISSIONER: With so many years service?

PN643

MR RYAN: With 15 years or more service or 3 extra weeks if you are aged over 55 with 15 years service. Those brackets reflect that, in that second column. You will see from 15 years onwards, Commissioner, you will see 4 weeks, then brackets 2 weeks, brackets 3 weeks reflecting 45 year age people with 15 years service, the second bracket is for 55 year-old people with 15 years service.

PN644

THE COMMISSIONER: So annexure A is the redundancy scale for any employee not on a specific contract, you say?

PN645

MR RYAN: That can apply to them but it is based on the - - -

PN646

THE COMMISSIONER: Their choice, you are saying to me?

PN647

MR RYAN: Their choice, yes.

PN648

THE COMMISSIONER: Yes, I see what you mean.

PN649

MR RYAN: Assuming somebody - this covers people other than journalists, it covers everybody employed by the company covered by the certified agreement so let us take an employee who is a technician, for example, if they are made redundant then their actual salary will be the trigger, the base on which they are paid out those weeks of redundancy notice on their actual salary. So somebody with 10 years service will get a total of 34 or 35 weeks redundancy and notice pay based on their salary. It is just a sliding scale which caps out at 25 years and over at 80 week severance pay plus either 4, 6 or 7 week's notice or pay in lieu of notice, so that is the cap.

PN650

So that is then referring to those employees who have the right of an election and they are those employees who have employment contract pursuant to the award and if I can just take you to the award, Commissioner, and show who these people are and what flows from that.

PN651

5.2 of the award, Commissioner, sets out exemptions to the award. Can I say as well that you may have some familiarity with awards covering journalists both in the electronic and print media. It will come as no surprise that the awards governing radio and television came after awards covering people in the newspapers and magazines. So the concept of exemptions is a standard feature of journalism awards.

PN652

The first sort of exemption is set out in 5.2.1, News Editors, so we have a situation where that very senior person in newsrooms is not covered at all by the award, Commissioner. That equates to people, for example, such as editors, chiefs-of-staff, you know, pictorial managers and the like in newspapers where those very senior editorial people are not covered by the award at all. Then we have in 5.2.2 a limited exemption for certain people and again this a common feature of journalism awards where in the print awards there is a 10 grade structure, Commissioner, or 9 grade structure in a minority of awards.

PN653

The extent being that a journalist who was classified at grade 9 or grade 10 under print awards is exempt from overtime payments and shift penalty payments provided they are not forced to work more than five days per week. That form of limited exemption is slightly different under this award but the underlying principle is not dissimilar in that more highly paid people - and you can see that the rate of exemption increases with the safety net applying to the award.

PN654

So if you look at 5.2.2(c) you will see that the figure, Commissioner, with the 2001 safety net increased that amount to $68,618. That is consistent with the wording of the agreement where the annual minimum figure which allows a fixed term employment contract to be entered into is increased and in line with the decisions of the Full Bench and in the wage case. The impact of a journalist being on a fixed term contract is such that you will see in clause 5.2.4 that certain provisions of the award do not apply.

PN655

In the main they relate to certain rates of pay. For example, shift penalties don't apply to somebody on the fixed term contract. The VDT rate which is the 5 per cent allowance does not apply as well. Termination of services and various other terms of the award don't apply. 5.2.5 sets out the terms of the award that do apply. So the first trigger is to be on an award fixed term contract is you must have a salary which is not less than the buy out rate, therein $68,618. The second aspect is that you have to have your contract of employment in terms which include the provisions of schedule 3 to the award.

PN656

THE COMMISSIONER: I think your clause 5.2.5 is missing a word, Mr Ryan. Apply.

PN657

MR RYAN: Yes, you are right there, Commissioner. Would it be appropriate in some due course to send in a correction order?

PN658

THE COMMISSIONER: No. I think we have got enough on our plate, Mr Ryan.

PN659

MR RYAN: I might refer them to the head of the panel.

PN660

THE COMMISSIONER: But I think - I don't think it would be disputed.

PN661

MR RYAN: No, the first - - -

PN662

THE COMMISSIONER: Missing word.

PN663

MR RYAN: 5.2.4 are the ones which don't apply. 5.2.5 are the clauses which do apply.

PN664

THE COMMISSIONER: Do apply. Schedule 3, I am sorry, you were taking me to.

PN665

MR RYAN: Yes, as I said, there is a couple of triggers before you are actually entitled to access putting a person onto a fixed term contract as proved by the award. One is the salary has got to be at least that of the buy out rate, $68,618 figure. The second one is that the terms in schedule 3 must be included in that fixed term contract and there are certain safeguards there for both sides. One is that it has got to be on full-time basis. You look at clause 1.1 of schedule 3. The period of employment must be for at least one year.

PN666

1.2 then says what happens in a situation where you are coming towards the expiration of that initial term and you would be aware, Commissioner, that the notice provisions for termination for journalists are quite different to all other industries that I am aware of. They are actually quite substantially periods of notice on either side. They are reduced by the operation of fixed term contract obviously. In most - if you look at clause 12.1.2, Commissioner.

PN667

THE COMMISSIONER: Sorry, what clause was that, Mr Ryan?

PN668

MR RYAN: It is in the award proper. 12.1.2 just sets out the standard periods of notice after six months employment. A sliding scale. The more senior graded journalists are grades 5, 6, 7 and 8 are entitled to 12 weeks notice. Grades 3 and 4, eight weeks. 1 and 2, four weeks and cadets, two weeks. The rate - the buy out rate of the pay, Commissioner, of the $68,000 is in excess of the grade 8 rate of pay by some substantial amount but the quid pro quo for a fixed term contract is that four weeks before the expiration of the initial term there is an obligation on the company to do three things.

PN669

One is to say that there will be no further employment after the expiration of the initial period which is not uncommon in a fixed term contract. The parties agree that there is no obligation on either side to go past the initial term and four weeks prior to that the first option is for the company to say: well, at the expiration your term of employment we won't require you. Secondly, they wish to employ the journalists for another specified term. Again, at not less than 12 months duration.

PN670

So again you enter into another fixed term contract with the safe provisions set out in the award. Still got to be on the salary at or above the buy out salary set out in the award and the contract has got to be for no less than 12 months. The third alternative, Commissioner, is for the station to wish to continue the employment of the journalist after the expiration of the initial term but no longer on a fixed term contract just purely under the terms of the award. In the situation of (b) and (c) there is an obligation on the company to set out the salary and other benefits of conditions that will apply with any continuing employment contract.

PN671

THE COMMISSIONER: Are the rates of pay - there is rates of pay in this certified agreement for journalists that aren't under contract?

PN672

MR RYAN: There are rates of pay for journalists regardless whether they are under contract or not, Commissioner. It is just that if you are a journalist then there is different rates of pay for the different levels. The fact that you may or not be under a fixed term contract is neither here nor there in relation to the rate of pay for a journalist. If that makes sense.

PN673

THE COMMISSIONER: I would have thought a contract would be a higher rate of pay.

PN674

MR RYAN: It would be but these are - both the agreement and the award are minimum rates, Commissioner.

PN675

THE COMMISSIONER: So there is minimum rates in the certified agreement for journalists?

PN676

MR RYAN: Yes. At different levels.

PN677

THE COMMISSIONER: What are you - are all journalists put under contract?

PN678

MR RYAN: No.

PN679

THE COMMISSIONER: So if you are not on a contract and you are journalist, then you would receive the minimum rate in this certified agreement?

PN680

MR RYAN: For your level which could be anything.

PN681

THE COMMISSIONER: For your level. Which clause is that, just for my reference?

PN682

MR RYAN: That is clause 6 of the certified agreement, Commissioner, and you will see that there's a 12 grade structure under the agreement.

PN683

THE COMMISSIONER: Yes, I do.

PN684

MR RYAN: You will see that there are actually three streams covered in the agreement - operations, journalism and administration. Not all - - -

PN685

THE COMMISSIONER: Rates of pay, you said, was clause 7?

PN686

MR RYAN: Yes, and you will, of course, although there is a 12 grade structure, not all grades apply to all three streams, so in the case of journalists, we only have, I think, grades 12, 11, 10, 8, 6 and 3.

PN687

THE COMMISSIONER: Sorry, whenever you are ready?

PN688

MR RYAN: So, as I said, Commissioner, at the end of the initial 12 month or longer period of a fixed term contract, the company then has those three options. The first option is not relevant to the matter before you because the company would just exercise its right to say: we don't want to have you employed any longer because your contract has expired, but in the case of the other two, there are two options. One is to enter into another fixed term contract under the auspices of the award, or alternatively, just say: yes, we want you to keep on working here but we are just going to forget about the fixed term contract and you will be engaged under the terms of the award, and we will set out what your actual rates of pay and benefits are which, of course, have got to be equal to or greater than the benefits and conditions set out under the award.

PN689

So the situation is, as we pointed out, in the jurisdictional matter before you, there are a group of journalists who, at one point of time, were on fixed term contracts envisaged by the award, but in accordance with clause 1.2(c) of schedule 3 to the award - - -

PN690

THE COMMISSIONER: 1.2(c)?

PN691

MR RYAN: Yes, which is - - -

PN692

THE COMMISSIONER: Schedule 3?

PN693

MR RYAN: Yes. They were kept on in employment by the company, but none of them were on a fixed term contract basis, just ongoing employment, so there's no end date, if you like, to any contract of employment. It was just a fairly standard method of engagement of people who were employed as a journalist in this sort of job on these terms and conditions.

PN694

THE COMMISSIONER: Is there a pro forma contract attached - I would envisage - it wouldn't be attached to the award, not now. It has been simplified but - - -

PN695

MR RYAN: Well, I must say, this award was subject to the ministerial 109 review, Commissioner, and both Schedule 3 and Annexure A, which sets out, again, things which must be included in the contract were challenged by the Minister and the award has been simplified.

PN696

THE COMMISSIONER: So what you are saying to me then is that schedule 3 and annexure A is an example of a pro forma contract?

PN697

MR RYAN: Yes. They are parts of the contract. You would expect the contract to be more detailed than what is set out there. What the award say is that the contract must include those terms but annexure A basically says - - -

PN698

THE COMMISSIONER: So where you have at - say, for example, 1.2(b):

PN699

At the conclusion of the initial term, if the Station wishes to employ for a further specified...

PN700

The particular contract that journalists would enter into at the Station in regards to that particular point would have specified dates?

PN701

MR RYAN: Yes, because it says it must have a term, a period of employment, which means a beginning date and an end date. The only requirement is that the period of employment must be at least for 1 year.

PN702

THE COMMISSIONER: I can only presume that if I don't have a pro forma contract that a contract would have terms to the effect that at a particular date, which is 4 weeks before the initial - for the expiry of the contract, it would have a date: as at this date, the Station will advise you of your salary and other benefits that will apply to your continued employment etcetera. I mean, I can only presume - - -

PN703

MR RYAN: Yes. Well, indeed, Annexure A has some very basic things which must be put in there, Commissioner. One is your gross salary, and also the frequency of payment. Two, again, there is another, if you like, trade off in regard to what I mentioned before about journalists under the print awards who are exempt from overtime and shift penalties on the basis that they get 2 clear days off per week. That was altered to be that the journalist has to get 2 clear days off on average over the year so you don't have to have - every week you have 2 clear days off but you must, over the life of the agreement, have the same 2 clear days off over the total period for each week of the contract.

PN704

The only other particular thing is a specific matter relating to women who are on fixed term contracts who do take maternity leave during the period of that fixed term contract, so they are fairly basic requirements, Commissioner, as to what must be contained in an individual's contract but they are, pretty basically, what you'd expect an award to contain. You wouldn't expect the award to go into such matters as clothing allowances, the actual duties to be undertaken by the individual but it is just that those particular safeguards on a person on a fixed term contract of at least 12 months duration at a particular minimum salary that they have to receive to be able to be put onto a fixed term contract.

PN705

So that sets out, Commissioner, the background to the sorts of people that we say are the only sorts of people that are covered by clause 1.5 of the redundancy schedule to the certified agreement. The words are quite clear on their face. It is an acknowledgment by 7 that employees issued with an employment contract under the provisions of the award may elect one of the following two options in the case of redundancy, and it makes perfect sense, of course. One is to be paid out the balance of the existing employment contract. That makes sense for this reason, Commissioner, that part of the deal for entering into a fixed term contract is that the company is obliged to pay the person the amount of money under that contract for that period of employment, come what may.

PN706

The other side of the coin is that the employees should be under no apprehension that his or her employment has to be continued past the period of the fixed term contract. They are guaranteed employment for the period of the contract but there's no obligation and nor, in some cases, would there be any expectation that the company must keep on employment past the expiration of the fixed term contract.

PN707

Then, of course, as part of the overall package is a situation with people who had been with the company for some time on regularly rolled over fixed term employment contracts. So if they have been in a situation where they may have had a number of fixed term contracts Commissioner, hence, getting some years of service, then, they would look at working out a redundancy payment using the annexure to the redundancy agreement, but not based on their actual salary under their fixed term contract, but based on the minimum fixed term contract rate of the $68,618, and they have got an option as the company says, they can elect to have one form of payment or the other. If I could hand up a document, Commissioner, to just give some examples of what that means in practice.

PN708

THE COMMISSIONER: Yes, I think this would be MEAA2.

EXHIBIT #MEAA2 DOCUMENT

PN709

MR RYAN: So what we have done there, Commissioner, is just to take hypothetical salaries of $100,000 per year, $150,000 per year and $200,000 per year and then down the left-hand side on the top group of figures, time left of a fixed term contract, 3 months to go, 6 months to go, 9 months to go, 11 months to go, and shown what those figures would be, just on the magazine. A nice simple one, 3 months left to go on a $100,000 contract is worth $25,000. If you have 6 months to go, obviously, it is $50,000, and similar figures with the salary for $150,000 and $200,000.

PN710

The second group of figures, Commissioner, relate to applying the $68,618 figure, the buy out rate, to the amounts of notice and severance pay a person would get pursuant to the table of redundancy payments under the redundancy agreement and show there what those figures would be. You will see there that the examples that we have chosen, that with 5 years service and above, based on the 3 months, 6 months, 9 months, 11 months examples, it is better for those sort of employees to use the $68,000 option and redundancy scale, rather than being paid out the remainder of their term.

PN711

For example, if you then look at a person who has had 5 years service with the company, but is made redundant with 6 months of their contract to go, it is better for them to be paid out the remainder of their contract, so the circumstance obviously varied for each individual, Commissioner, when comparing the two lots of figures. The two determinants are obviously: how far into a fixed term contract the moment a redundancy arises. The other factor is as well: how much service an individual has had with the company.

PN712

So to give the most glaring example on the $100,000 sum, if you have had 20 years continuous service with the company, using the $68,000 figure, you would be entitled to $115,385, which is much more attractive if you were told you were going to be made redundant. With only 3 months of your contract left to run, you would only be entitled $25,000. The other way around, of course, if you have got 6 months left to run on your contract and you have only been there for 5 years, then the $50,000 option under the remainder of the contract is a much better redundancy payment than using the scale on $68,000, which only gives you just under $29,000.

PN713

That makes sense because redundancy arises at all different times and people have had all different lengths of service and the option is for that employee to elect which payment they want the balance of their contracts term, or using the nominal buy out salary for $68,000 plus, to apply that to the table and see which figure would give them the better pay out. Now, the problem which seems to have arisen is that the company has tried to apply this very simple straightforward approach to a particular group of people, to people who aren't in that situation. Where they are not on a fixed term contract, whereby, there is a known end date and, hence, you can work out a figure for the remainder of the term.

PN714

So what happens is, if you are not on a fixed term contract, Commissioner, then there is no figure to calculate in accordance with 1.5(a) of the redundancy agreement, because there just isn't a balance of their existing employment contract, to work out what is remaining of a fixed term contract. There is no fixed term contract. You just can't get to that situation where you can calculate an amount of money because there is no period in which you say: I'm here this particular date, my written contract says my expiry date is X months down the track, or whatever, because there is no end date. You have not got a fixed term contract by which you can actually work out the balance owing to you if you had worked to the end, as set out and as required by the award, to show the end date.

PN715

So what we say and what the draft orders seek done is just to say what that part of the agreement makes clear anyway, that the only people it applies to are those on the fixed term contracts pursuant to clause 5.2 of the award at the time of redundancy and that is totally in keeping with the starting words of 1.5, where 7 acknowledges that employees issued with an employment contract under the provisions of the Journalists Television Award, may elect one of the following options as a result of a bona fide redundancy.

PN716

You just cannot trigger that at all and it was never meant to be triggered because it can't be triggered. If you haven't got a fixed term contract with a known end date to work out where you are today, when that contract will expire and how much money you would earn between now and the expiry date, and then compare that figure with the weeks per years of service formula set out in the agreement, based on the buy out rate under the award, and then work out whichever gives you the greatest figure, although if you really like - you could actually have the option of taking a lesser figure, but I suspect that option will never be taken in a real sense obviously.

PN717

We cut to what the basic problem is. It is very simple, the words are quite clear. I'm actually gob smacked to see how anybody could seek to interpret this clause any other way, because if you haven't got a fixed term contract with a known end date there is nothing to elect, there is no options, because the only option is my current rate of pay, I could be working for the company for years and years to come, or be terminated at some point of time in the future for a bona fide reason by the company, either for you know misconduct or bona fide redundancy. Well, one thing neither that employee will know, nor will the company, is when that date will be because you are not a fixed term contract.

PN718

That class of employee who may have once been on a fixed term contract but is no longer because the company has exercised its option under clause 1.2(c) of schedule 3 to the award, to keep that employee on but no longer on a fixed term contract, but purely under the terms of the award, is well known - has been well known since those terms were put in there back in the very early nineties, by consent, that there are a group of people who no longer who are on ongoing and renewed fixed term contracts, but just merely on ongoing employment.

PN719

1.5 was never envisaged to cover those people and, more importantly, when you look at the wording of 1.5, can't cover those people for the very simple fact that you can't calculate a particular sum of money to compare it with the award table of weeks of redundancy pay per years of service, based on the artificial buy out salary under the award. So that is why we are here, Commissioner, because it would appear the company has some view and has sought to exercise a view that a person who may once, some years ago, been on a fixed term contract but is no longer, gets paid out in accordance with 1.5(b), rather than paid out according to the table at their actual rate of pay and that in a nutshell, Commissioner, is it.

PN720

As I said, I'm gob smacked that anybody could seek to read the clause to apply to anybody other than those currently on a fixed term contract envisaged by the award at the time of redundancy because, as I said, it is mathematically and logically impossible to have a sum of money based on a known end date to a non-existent fixed term contract. Mathematically and logically impossible. They are our submissions, Commissioner.

PN721

THE COMMISSIONER: Yes, thank you, Mr Ryan. Mr Lunny, whenever you are ready.

PN722

MR LUNNY: Commissioner, we say that there is no justification for you to make the orders sought and a great deal of justification why you should not make the orders sought. You have, of course, a discretion to make, or to decline to make any order. Our submission will be that no order should be made, or in the alternative an order quite different to that being put to you.

PN723

THE COMMISSIONER: But do you have an alternative order?

PN724

MR LUNNY: Well, I will go through that.

PN725

THE COMMISSIONER: You will get to that, thank you.

PN726

MR LUNNY: I apologise if there is some overlapping between our submissions, Commissioner, I will try and avoid that as far as possible, but obviously we prepared them in isolation to each other, so I might go over some ground that has already been covered by my friend, but I will try and avoid that. Employment regulation at the 7 Network is manifest at times by the award, the Journalists Award, in this case as far as relevant. At times by the certified agreement and at times by individual contract, each of which, Commissioner, have their own incidents and I would like to look at each of them in turn.

PN727

If we start with the Journalists Television Award 1996, we can make them following observations. Clause 5.1 on its face would indicate that the award covers all television journalists through our MEAA members. That would again on its face range from humble cadets to the Jana Wendts of this world equally. However, recognising that some journalists are, however, more equal than others - and again we don't dispute Mr Ryan's submissions that this is a common feature in the industry - 5.2 goes on to set out those employees who are described as "exemptions".

PN728

5.2.1, again, talks about:

PN729

News editors being completely exempt.

PN730

5.2.2, provides, Commissioner:

PN731

For a limited exemption from the award regulation for journalists engaged on a fixed term contract.

PN732

Or more precisely under 5.2.2(a) and (b):

PN733

Under a contract of employment which includes the terms contained in schedule 3.

PN734

And we say, Commissioner, critically 5.2.2(c):

PN735

The member is paid an annual salary of not less than the adjusted rate. We now concede a $68,618.

PN736

That figure which I believe is known as the "off the time book rate", is in contrast to the revised top rate award of $937.60 per week, or if the employee is required to operate visual display equipment, a top rate of $984 per week. My calculations would project those figures to annual salaries of $48,755 per annum, and $51,168 per annum. If we take that $51,168 per annum and contrast it with the "off the time book rate" of $68,618, Commissioner, that represents an uplift of 34 per cent from the award.

PN737

In other words, if you are prepared to offer a contract of employment of the type described, then you have to do it with a minimum uplift - of course the uplift could in fact be a lot more than that, but you won't be entitled to do so with an uplift of less than 34 per cent. Of course, as we have seen, once a contract of that nature is entered into the quid pro quo is that certain items of the award, certain significant items of the award set out in 5.2.4, no longer apply to the journalists concerned. In other words, there is a clear trade off.

PN738

In return for a salary which represents at least that 34 per cent premium, and no doubt a great deal more in many instances, the journalist loses the benefit of those significant award incidents which would otherwise apply. It could be bought out or rolled into the enhanced salary, and because of that enhanced salary those individual journalists are no longer on a footing with their lesser paid otherwise peers. So out of the window go the shift penalties, overtime, obligation to give and receive notice of payment in lieu, differences in hours, breaks, rosters, a range of allowances, etcetera.

PN739

Now, what we would say is this, Commissioner, it is clear that those journalists on the premium salaries, a minimum of 34 per cent above the award, are a different species industrially - become a different species industrially from those on award rates, not uncommon in this industry, or in other industries, where given suitable compensation, contracting out of the award is expressly permitted and the two elements which distinguish them, the two sides of the same coin are they are on a separate contract from the award and they are on a distinctive dollar figure from the award.

PN740

THE COMMISSIONER: And that is a fixed term contract, Mr Lunny?

PN741

MR LUNNY: Initially, yes. We will come to that shortly, Commissioner. Before leaving the award - Mr Ryan has taken us through the schedule 3, which sets out the terms which must be included in the fixed term contract of employment. Schedule 3 is to be read with annexure A. I note here, Commissioner, that neither the schedule, nor the annexure say anything about redundancy or retrenchment benefits.

PN742

Indeed, where the schedule reads - appears to contemplate that the employment relationship coming to an end through the effluxion of time, if the expiry date is reached and either of the parties, either 7, or the journalist declines to renew. There is no indication in those circumstances that there is any benefit paid to the employee. 1.2(c), which we had some debate about, we say, provides an option to return employees to the award rate, no more than that. Support for that return to the award rate option comes from annexure C, which talks about the expiry of a fixed term contract during maternity leave, and that is the only section which actually gives any indication what the intention of the parties would be if a fixed term contract expires.

PN743

THE COMMISSIONER: I'm sorry, you are on annexure A, point 3, Mr Lunny? I thought you said annexure 3.

PN744

MR LUNNY: No, annexure A, and it is the - - -

PN745

THE COMMISSIONER: Point 3?

PN746

MR LUNNY: Yes, the maternity rates.

PN747

THE COMMISSIONER: That is all right, I was just looking for annexure 3, but it is annexure 8.3.

PN748

MR LUNNY: It is the only part of the award which obliquely refers to what would happen if someone who is on a fixed term contract, that contract expires and they resume work. Of course, what it says is that: when she starts back her salary and all other terms will not be as per the expired contract, but shall be as prescribed by the award salary included, unless the woman concerned agrees otherwise.

PN749

THE COMMISSIONER: Is this stated anywhere else?

PN750

MR LUNNY: No. Well, in other words, the default there is to be cast back on to award rates and conditions with, no doubt, applying the logic of the previous arithmetic, at least a 34 per cent diminution in income.

PN751

THE COMMISSIONER: So you are saying that that means, that particular provision there, annexure A3, which you revert back to all the terms and conditions of the award and that includes your weekly or monthly or per annum rate.

PN752

MR LUNNY: Well, I think it says salary does it not, Commissioner?

PN753

THE COMMISSIONER: Sorry?

PN754

MR LUNNY: Does it refer to salary in that annexure?

PN755

THE COMMISSIONER: Well, it says terms and conditions. It does.

PN756

MR LUNNY: Yes, it does.

PN757

THE COMMISSIONER: Thank you but we acknowledge that this particular provision is not stated anywhere else.

PN758

MR LUNNY: No, it is the only reference which seems to directly bear upon the position of a fixed term contract expiring and what happens if someone comes back to work afterwards.

PN759

THE COMMISSIONER: And it says "her."

PN760

MR LUNNY: Yes, but one might argue, Commissioner - - -

PN761

MR RYAN: It is not - - -

PN762

MR LUNNY: - - - that what is sauce for the goose is sauce for the gander. You will have a right of reply.

PN763

MR RYAN: Well, I think it is - - -

PN764

THE COMMISSIONER: No, I think I might have an objection, Mr Lunny. I don't think you determine whether I entertain objection or not. We will rule on that thank you.

PN765

MR LUNNY: Thank you.

PN766

THE COMMISSIONER: Mr Ryan, what is the problem?

PN767

MR RYAN: There's no problem except that clause 1.2(d) of schedule 3 actually does relate to what happens when you revert.

PN768

THE COMMISSIONER: Yes, all right. Well, I think Mr Lunny is correct on this occasion. You have got a right of reply, Mr Ryan.

PN769

MR LUNNY: Thank you.

PN770

THE COMMISSIONER: You take your notes and make sure you address it in reply for me. Please continue, Mr Lunny.

PN771

MR LUNNY: Commissioner, if we then turn to the Seven Network Agreement of 2000, the observations we would then make are as follows and - - -

PN772

THE COMMISSIONER: No. Well, let us just go back to this. So your submission to me is that that is a default position for everyone?

PN773

MR LUNNY: Well, it should be otherwise.

PN774

THE COMMISSIONER: No, no, no. Whether it - well that is what you are saying. That is what you want me to determine, is that what you are saying to me?

PN775

MR LUNNY: I'm saying you should take that into account the way that the parties have intended an expired fixed-term contract in the case of a woman resuming work into account when determining how this matter should be finalised.

PN776

THE COMMISSIONER: So you don't say - do you say to me that is Seven's view that that is a default position and that is what happens with everyone? Or are you saying to me: look we don't necessarily form this view but if you look at that, we think it is open to you to form that view. I mean is that Seven's view or do you want me to have that view? You said for me to consider it but why should I consider it?

PN777

MR LUNNY: Well, you should consider it in terms of equity in the sense that I think what Mr Ryan is saying is that if I'm on one of these, if I can loosely put it, high-roller contracts and it expires, I should get, continue to get the contract terms including the uplifted salary but all of a sudden the award benefits will revert to me. That is what he is saying and he can correct me if I'm wrong in his counter submissions but as I understand it - - -

PN778

THE COMMISSIONER: Well, I don't know that he went that far with his submissions in regards to salary. I don't - and you may be right. I don't remember hearing that you take your contract salary with you. I don't know that that was actually put to me. I don't know what the situation is.

PN779

I think Mr Ryan is saying is you revert back to the terms and conditions of the award and therefore that redundancy scale with notice applies to you and what have you but I don't know that he actually gave me a submission on salary but you could be right but what I would like an answer to is that you want me to consider it in regards to equity.

PN780

MR LUNNY: Yes.

PN781

THE COMMISSIONER: But my question to you, Mr Lunny, was, and you can give me a yes or no, I think a yes or no can go with it. Annexure A3, the last paragraph, is it Channel Seven's view that that is the situation that applies to everyone where a fixed term contract expiry date passes?

PN782

MR LUNNY: It would depend on the individual I would have to say, Commissioner. It depends on whether they got a letter from Channel Seven confirming terms and conditions and here I know we are talking generically here.

PN783

THE COMMISSIONER: No, no, no, but I mean if you get a letter that is part of your - and that would have been another thing I would have asked you, does that occur. You get a letter, that is part, I envisage by schedule 3.1, that that type of information is included in your contract. So therefore there would be something in the contract although I don't necessarily have an exact pro forma contract before me but the submission is that is what it contains. So that is part of the contract.

PN784

This particular provision says that if you are on maternity leave and your contract expires while you are on that leave and in accordance with the provisions of 23 which would be return to work or maternity leave I suppose, 52 weeks or whatever it might be in this particular award, then you resume work so your contract has expired, you are on leave but then after your contract expires you return to work, it says your salary and all terms and conditions when you resume work will not be in accordance with that contract but will be in accordance with the award.

PN785

MR LUNNY: Yes.

PN786

THE COMMISSIONER: Unless, unless the employer does something else. So my question is that is that the situation? Is that what Channel Seven say is the position for everyone?

PN787

MR LUNNY: No. What Channel Seven will be saying however, and I'm getting ahead of my submissions here - - -

PN788

THE COMMISSIONER: Well, my apologies for that. I just wanted an answer to that question.

PN789

MR LUNNY: That is okay, Commissioner, is that when it comes down to equity and fairness, there should be a third election and if somebody wants that election to go back on to the award salary and terms and conditions, if they so want to. And then they won't be uncapped - sorry, then they won't be capped but I hope in the fullness of the submissions that will become clear.

PN790

THE COMMISSIONER: Well, I think what you - well, yes. You are going to have to answer that for me at some stage, Mr Lunny.

PN791

MR LUNNY: Yes.

PN792

THE COMMISSIONER: And what you have just given me is not an answer. You are giving me hypotheticals or you are giving me what you say is equity and fairness. I'm asking you what happens, not what is the position. I'm asking you is that what Channel Seven says should apply.

PN793

MR LUNNY: It should be one of the options that individuals have when their contract expires: I want to go back on to the award. Now, the pregnant - the returning woman from maternity leave does not on its face have a choice unless she negotiates a new deal. She is back on it. Our position would be that once the fixed term contract expires, that fixed term contract will continue with an open-ended element to it and subsequently I will be arguing that there's no mischief if the cap still applies but if you didn't want the cap to apply you could go back on to the award but with a concomitant reduction in salary.

PN794

THE COMMISSIONER: So what you are saying then is that Channel Seven's position is that an expired contract continues?

PN795

MR LUNNY: It does, yes.

PN796

THE COMMISSIONER: Until someone changes it.

PN797

MR LUNNY: Until it is terminated either by the - - -

PN798

THE COMMISSIONER: Like an award, like a certified agreement?

PN799

MR LUNNY: Yes, yes, and that is not an irrelevant parallel indeed, Commissioner.

PN800

THE COMMISSIONER: Okay and of course you will give me something in support for that position? Because I must say it has always been my view that a fixed term contract is a fixed term contract. It has a start date and it has an end date.

PN801

MR LUNNY: Quite.

PN802

THE COMMISSIONER: And then when the end date reaches, it is finished, it is caput until something else is entered into.

PN803

MR LUNNY: There is a new contract, Commissioner. It is a new contract embodying the same terms and conditions as applied previously. I'm not saying it is the same contract. It is a new contract that embodies the same terms and conditions with one exception. It no longer has a fixed term, it no longer has a use-by date.

PN804

THE COMMISSIONER: All right. By a new contract you mean a new contract under the award or the agreement?

PN805

MR LUNNY: Yes, or a - - -

PN806

THE COMMISSIONER: You don't mean a new contract where an offer is made, and acceptance and consideration is given and the parties read and sign that contract? You don't mean that?

PN807

MR LUNNY: No, it is often the case in my experience that fixed term contracts come to an expiration, people continue working without any reference to the use-by date.

PN808

THE COMMISSIONER: Well, I don't know what people do and I don't know that that is what is before me. What is before me is this particular provision and how is it to apply? How does it apply?

PN809

MR LUNNY: And we will turn to that now if I may, Commissioner.

PN810

THE COMMISSIONER: Yes, all right. I will attempt not to interrupt your submissions again, Mr Lunny.

PN811

MR LUNNY: Thank you. If we turn to the enterprise agreement, Commissioner, the critical clause of course is 1.5 but we should not initially - 1.5 of schedule A, but we should not initially - the coverage of the clause - of the agreement the - and those people who are covered - and the classification clause - sorry, the coverage clause is sometimes a little bit difficult to get round, but the classifications contained herein except - and then there is a number of specified employment categories who are expressly not covered, actors, executives, legal and accounting, professionally qualified staff, sales executives or executives secretaries and then finally in the last paragraph of the section, this is clause 4, Commissioner. In the last sentence of the first paragraph:

PN812

And whose salaries on an annualised basis do not exceed the salaries detailed herein.

PN813

Now, it then goes on in the next paragraph to talk about journalists and what it says about journalists. It says:

PN814

Those journalists employed by the company whose annual salary at the relevant date exceeds the top of the salary arranged for a level 12 employee -

PN815

which is a top classification -

PN816

shall not receive the salary outcomes and wages increases provided in this agreement.

PN817

With the added proviso:

PN818

It is acknowledged that such journalists will conduct individual negotiations with the company as to their rates of pay.

PN819

So again, we suggest there is a clear recognition in the certified agreement as well that there is a differentiation between those journalists who are within the classification structures and pay structures of the agreement that those who have negotiated a better deal outside of it. A recognition, Commissioner, that a premium salary puts you into a different environment from those on lesser rates. Now, if we assume that the employment category called "term employees run of the show" is a different animal. There is no cross reference that I can find in the body of agreement relating directly to those fixed term premium salary journalists until we come to schedule A and of course the provisions of 1.5.

PN820

And 1.5 of course goes to those employees issued with an employment contract under the provisions of the Journalist Television Act 1998. I will talk to you shortly about what I think "issued with" means, but clearly it refers to those journalists on a fixed term contract either in fact - and we would say either in fact or historically on a fixed term contract, earning a salary which would be as a minimum higher than 34 per cent of the award.

PN821

Needless to say and quite consistent with them being treated differently as they are under the award as well, the bigger dollar contract has its penalties, it gives those journalists concerned the option of being paid the balance of their existing contract or, as has been pointed out by Mr Ryan, to receive the notice and redundancy weeks per year of service as set out in annexure A that is subject to the cap of $68,618. In other words you either take the balance of the contract or you will get no more than 34 per cent above the award rate for the purpose of calculating a redundancy benefit.

PN822

Now, what is being put to you by way of this order, Commissioner, we think is that the cap should not apply to employs whose fixed term contracts have expired but they have continued to work on on the same significantly and in some cases dramatically enhanced salary. The same at least 34 per cent above the award because, and it would appear, simply because they no longer have an obvious balance of their existing employment contract to elect. In other words they are left only with option B.

PN823

Commissioner, we say this, this provision was put in to protect the Network from facing redundancy payments of a staggering magnitude for employees whose incomes outside the award can be in excess of $100,000, $200,000 and 500 as I am instructed up to half a million dollars a year. Paragraph A, Commissioner, to be scrupulously fair should simply be read as if the words "if any" appear before the word "or" at the end of the sentence. That is how it should be read. What would be the consequences otherwise? What would be the consequences otherwise?

PN824

Assuming the effect of my friend's order that such journalists should have their rate cap removed then the result would be gross unfairness. Not just the Seven Network, but as between those journalists who might be made redundant, some having unexpired fixed term contracts and some with expired fixed term contracts because the latter would gain a massive and undeserved windfall, having the burden which comes from the higher salary rates deftly removed by virtue of the orders sought. And the traditional and industrially recognised demarcation which means that the big salaries do come with a cost, would be eliminated.

PN825

THE COMMISSIONER: Do you say there is an ambiguity in that particular provision?

PN826

MR LUNNY: Yes, it is studied with ambiguity.

PN827

THE COMMISSIONER: Has an application been made?

PN828

MR LUNNY: No, because we think the ambiguity is resolvable in favour - and it is an option we can think about, Commissioner, but is resolvable in favour of the company.

PN829

THE COMMISSIONER: Over the way you say the agreement should apply?

PN830

MR LUNNY: If Mr Ryan was to take this matter to another forum as he could, claiming breach of agreement or breach of contract, breach of award, breach of agreement, then may be we would respond in that way.

PN831

THE COMMISSIONER: You would respond in what way, sorry?

PN832

MR LUNNY: By issuing a section 170MD(6) application or what ever.

PN833

THE COMMISSIONER: Why do you need - why do you need somebody to go and lodge something in some other jurisdiction before you make application under 170MD(6)?

PN834

MR LUNNY: I would suggest that it is those who are trying to avail themselves of the benefit of some interpretation of the provision who would make that application.

PN835

THE COMMISSIONER: But you have just said to me that that provision is ambiguous.

PN836

MR LUNNY: It is arguably ambiguous.

PN837

THE COMMISSIONER: Well, why does not Channel Seven seek clarity under - why didn't they seek some clarity under 170MD? How do Channel Seven actually apply that provision, Mr Lunny?

PN838

MR LUNNY: Channel Seven applies that provision consistently, but if the contract is expired I'm instructed - if the contract has expired the payment is made under option B and although we do not wish to dwell upon Mr Darcy's position, he is the only person who has ever challenged that, I'm instructed.

PN839

THE COMMISSIONER: But he wouldn't be the only person who has ever had option B apply to them, no?

PN840

MR LUNNY: My instructions are he would not be the only person. If I can just go back on that. I was putting to you that manifestly the order would provide an undeserved windfall, the demarcation would have gone. Now by interpreting it instead to be read with an implied if any, Commissioner, we say there is no injustice or mischief. Why? Because for many weeks or even months before the expiry date of the contract, a journalist would have had no realistic option under A to make anyway. An expired contract journalist will lose an election which was really only ever a Clayton's election, as his contract proceeded in time to diminish in balance. Do you follow my reasoning there?

PN841

THE COMMISSIONER: No, I do follow your reasoning but I don't - I must say I can't - I can't follow the reasoning that Channel Seven hasn't attempted to rectify what it says is number one in ambiguity or in the alternative that it is completely and utterly unfair. This agreement was made or certified on 15 August 2001. We are now February 2003. I mean if what you say as a matter of equity - and I will consider of course what you have put to me.

PN842

You are saying to me as a matter of merit, as a matter of equity: we want you, Commissioner, to put extra words in there because this is just to apply it, just - there is an unfairness, not to mention the amount of dollars that may have to be paid out in any particular situation. If that is the consequence for Seven, I must say I find it quite surprising that Seven hasn't attempted to rectify that position.

PN843

MR LUNNY: Commissioner, the matter has only arisen since the notification of the section 170LW in November and it is a novel application, it has never been challenged before and that probably explains why it has never been activated, but we reserve our rights in that regard. But if I could continue my submissions?

PN844

THE COMMISSIONER: Yes, yes, I'm sorry, Mr Lunny. I mean I've got to put these things to you, you need to know what is in my mind. I can't sit here mute, I've got to put these things to you because that gives you an opportunity then to formulate an address to that issue.

PN845

MR LUNNY: Commissioner, thank you. Which is concluded on is that this loss of election which my friend made so much fuss about, for many, many months before someone's actual expiry was never real an election anyway and we can give you some examples. I mean, the count down to what is ultimately a negligible balance and then a zero balance starts from the day the fixed term contract is entered into. So from day one, one of the pots of money that Mr Ryan referred to is being constantly depleted until such time as you get to the stage where it is on a par with option B and then steadily as - depending on length of service, etcetera, as a contract goes along, option A does not really become a meaningful option any way, 2 years left, 1 year left, 6 months left, 6 weeks left, 6 days left, 1 day left.

PN846

At some stage well before the expiry date depending on years of service the election under A becomes meaningless. It is not there anyway really. So if you consider the position of a fixed term employee who is, for example, made redundant with 2 weeks balance left on his contract. Compare that to someone who's contract expired 2 weeks previously. And let us say that the MEAA is order issued and let us give them 10 years service and let us put them on $3000 a week, nearly 150,000, or slightly over $150,000 a year.

PN847

The first journalist options are 2 weeks pay, $6000, or 34 weeks at the cut rate which would give him, by my calculations, $44,865. That is the fellow or the woman who has still got 2 weeks to go on their contract, all agreed to of course those penalties and those caps, all agreed to by the unions and employees when they voted on the agreement. Now, which option are you going to opt for, obviously he is going to opt for B which gives 44 as opposed to 6. Forty-four, you can calculate it on $3000 per week. His option A ceased to exist 15 weeks before his contract expired in reality, because 14 weeks out you get 42, 13 weeks out you 39 and so on.

PN848

Not a meaningful election. Option A was capped as 15 weeks before the expiry date. His colleague on the other hand, he can say, according to Mr Ryan: well, I don't have the change to elect for the balance, although I'm still receiving the premium salary in dollars, I will put my hand up for my 34 weeks uncapped, thank you very much, $102,000. Now, we say, Commissioner, that is like winning Tatts lotto without having to buy a ticket compared to the other redundant journalists.

PN849

He is better off, once the contract is expired, than at any time if it has 3 months or less to run, and we say, how fair is that? It would be a travesty, Commissioner. The reality of an election had been lost 3 months out. So there is no mischief, we say, to be reviewed or remedied. Again, we would just simply say contrast the proposal for a woman on maternity leave when her contract expires by calling the award Salary and Conditions, and echoing what we said earlier we don't have a problem if the interpretation should be A, B, or alternatively C, the award rates uncapped, but these people aren't on award rates.

PN850

THE COMMISSIONER: Mr Lunny, these journalists that have been under contract that have expired, do the exemptions still apply to them?

PN851

MR LUNNY: We would say, yes.

PN852

THE COMMISSIONER: Well, I just want to know, does that happen?

PN853

MR LUNNY: Yes, it does.

PN854

THE COMMISSIONER: You can seek instruction - it does. For all intent and purposes on your instructions, the contracts just continue?

PN855

MR LUNNY: Except they are open ended as opposed to having a used by date.

PN856

THE COMMISSIONER: All right. So the exemptions apply, the contract salary applies?

PN857

MR LUNNY: Yes.

PN858

THE COMMISSIONER: How many - I'm just wondering, the contracts that have expired and I know there are some, how long ago did most of them - what is the longest period of an expiry, is it 12 months, 2 years, 3 years, 4 years, 6 months?

PN859

MR LUNNY: I don't think it is as long as that, Commissioner. I'll seek some instructions. My instructions are that it is really just an negotiation phase that goes through rarely extending beyond 1 or 2 months.

PN860

THE COMMISSIONER: So the contracts that have expired and journalists are ongoing, that has only happened in the last, it would only be 2 months, 3 months. See I don't - all right, I will ask a question rather than say what I think the situation is. I would rather know what the situation is. There's a number of journalists, I think nationally there's about 80 or 90, 100 journalists, something like that nationally. About, from my understanding, about two thirds of them are now working on ongoing employment because their fixed term contract expired.

PN861

MR LUNNY: Commissioner, that was a regrettable misunderstanding in the evidence that Mr Blackman gave.

PN862

MR RYAN: Well, with respect - - -

PN863

THE COMMISSIONER: Well, Mr Lunny, I don't know that it was a misunderstanding. I mean, if you look at transcript, paragraph numbers 271, 269, 272 and 452 it is quite plain to me that that is what was put to me. Well, let us move along. You tell me what the situation is on your instructions and we can adjourn while you seek these instructions if you like.

PN864

MR LUNNY: I have spoken to Mr Blackman this morning, he confirmed I think that there is something in the region of four contracts still being negotiated between the last one expiring and the new one being entered into. There's four, and if you like, that limbo stage between the expiry of the last one and the entering into a new one.

PN865

THE COMMISSIONER: So what you are saying to me is that apart from four journalists, apart from four journalists are you saying to me that all journalists who have worked under fixed term contracts that expired at different periods of time now have new fixed term contracts except for four that we are in the process of negotiating.

PN866

MR LUNNY: That is correct, Commissioner.

PN867

THE COMMISSIONER: That is on your instructions?

PN868

MR LUNNY: Yes.

PN869

THE COMMISSIONER: Is that recent, Mr Lunny, or has there been a situation, has there been a situation where journalists have reached the end of their date on their contract and no negotiations have taken place for a period of time and if that is the situation what would be that period of time?

PN870

MR LUNNY: Commissioner, my instructions are, it depends on the individual. It depends on the protracted nature of the negotiations. So I can only give you a rough estimate, but ultimately if an impasse is reached they will be issued a letter telling them what their terms and conditions are and presumably giving them the option of working onwards or not.

PN871

THE COMMISSIONER: So you can't give me an answer to the question?

PN872

MR LUNNY: No.

PN873

THE COMMISSIONER: Mr Lunny, if what you say to me is correct that at the moment all journalists who are on fixed term contracts which have been recently negotiated or which are still within the terms of their previous contract because it hasn't expired, except for four, does not that poke some holes in your equity argument in relation to the amount of money that Channel 7 would have to pay out if I accepted the MEAA position?

PN874

MR LUNNY: The equity argument applies whether there was four or there was 40, Commissioner.

PN875

THE COMMISSIONER: Well, the amount of money would be different though, wouldn't it?

PN876

MR LUNNY: The amount of money would be different but it would be inequitable for one person to receive the windfall unfairly as opposed to - - -

PN877

THE COMMISSIONER: Well, no, I wasn't thinking so much the windfall argument, yes, that would apply in regards the individual. I was thinking more along the lines, your argument of the cost to Channel 7?

PN878

MR LUNNY: Well, who knows what might happen further down the track, Commissioner. The situation is for now but it could be like campaign 2003, they all expire at the same time perhaps or a lot of them might do and you have a situation - - -

PN879

THE COMMISSIONER: Well, I don't know that. That is information that only Channel Seven has. I don't have that information before me so I don't know that. I don't know dates.

PN880

MR LUNNY: No, and I have no instructions on that but I'm merely speculating how the mischief is not removed simply because at the moment the vast majority of them have their contracts renewed. That is a status quo which might not be maintained into perpetuity, Commissioner. So the exposure would stay continued.

PN881

THE COMMISSIONER: See I must say when you gave me the submission in regards to the cost, I was taking that to be a position of: if you do this tomorrow then we are telling you that there's an unbelievable cost to Channel Seven. Now, what you have just told me, at this point time if I granted MEAAs application tomorrow, then the cost to Channel Seven may possibly be associated with four individual journalists.

PN882

MR LUNNY: Right now it might.

PN883

THE COMMISSIONER: That is right. Well, you must clarify submissions for me then because when you gave me the original submission I was operating on the basis that that submission was made to me because the vast majority of journalists that were on fixed term are now on ongoing employment and therefore the cost to Seven would be astronomical. So either I've misunderstood your submission or you have now had different instructions that at this point in time there's only four journalists.

PN884

MR LUNNY: Well, we would emphasise at this point in time. It could be a considerable exposure further down the track and if only one journalist - - -

PN885

THE COMMISSIONER: That is not the submission that was originally made to me but - - -

PN886

MR LUNNY: I don't think I made any submission about huge amount of costs.

PN887

THE COMMISSIONER: Well, they might not have been the words but I must say that was the impression I've given but I will read transcript, Mr Lunny, I will read transcript. Yes, please, please continue.

PN888

MR LUNNY: Thank you. Now, you see what the application we say, Commissioner, fails to appreciate that it is really the income level, Commissioner, not the technicality of the contract, fixed term or otherwise, which is the true differentiator here.

PN889

It is the income level significantly and frequently dramatically higher than the award levels which provides the justification for treating those journalists manifestly less favourably in terms of award and agreement provisions. It is the dollar figure which is we say of far more importance than the type of contract anyone is under.

PN890

We say of course unless that excess income is disturbed, unless that income is disturbed, ratcheted back to the award rates, there's no justification for relieving the recipients of that increased income, of those penalty trade-offs, they and their union have otherwise consented to.

PN891

One of those trade-offs is the capped redundancy rate. Now, we also say as a matter of interpretation clause 15 - sorry, clause 1.5 would apply not just to those journalists whose contract is unexpired, and there's no contention there, but equally to those whose contract has expired, their expiry date has been reached and indeed passed.

PN892

The introductory words of the paragraph, Commissioner, say that:

PN893

Seven Network Operations Limited acknowledges that employees issued with an employment contract under the provisions of the Journalists Television Award 1998.

PN894

We say that means issued with at any time. To be issued is to have been in receipt of, to have received. It does not mean to be in possession of any current time. I think my friend wants to clear his throat. To be issued with, we say is a matter of historical fact.

PN895

Either you have been so issued, and of course that means elevated in income levels way beyond the rest of the pack, or you haven't been issued. Once you have been issued, elevated as it were, you stay elevated. You stay issued. You can't be unissued.

PN896

You are up there, unless of course you happen to be an expectant mother who has a baby and returns to work which is the only clear example of being unissued and without being flippant, Commissioner, there is a parallel in a sense of the observation "you can't be a little bit pregnant." Either you have been issued or you haven't been.

PN897

The mere passing of time does not mean to say you have never been issued with a fixed term contract and of course the other side of the fixed term contract coin is the big dollars. That clause therefore we say applies fairly, properly and legally whether the contract issued has reached its expiry date or passed it, assuming of course the journalist concerned continues to receive the inflated salary benefits under the contract vis-a-vis the award rates.

PN898

Now, the application before you, Commissioner, would see those who are on that significantly higher rate receive for no consideration whatsoever a potentially massive double dip, the big dollar salary and the uncapped retrenchment benefit, and we say that would be an outcome which would be odious in the extreme.

PN899

We submit that pursuant to section 110(2)(c), Commissioner, of the Act your powers should only be exercised consistent with the principles of equity, good conscience and the substantial merits of the case and further, Commissioner, without regard to technicalities and legal forms.

PN900

Mr Ryan's case is only about technicalities and legal forms. Technicalities and legal forms is what the MEAA is hanging its gob-smacked hat on but we say that that is a very flimsy nail, Commissioner. The order they seek by introducing different outcomes, for example for someone whose contract has got 2 weeks to run as opposed to someone whose contract expired 2 weeks ago delivers inequity.

PN901

It does not deliver equity, it delivers inequity. By contemplating that those on the elevated salary levels through the mere effluxion of time could be relieved of the offset in penalties that they have been fairly and industrially shouldered with, with no compensating benefit of any description to Seven Network is unconscionable, not conscionable.

PN902

We say the absence of merit is clear. Mr Blackman has given evidence with respect to the operation of the clause never being agitated except before Mr Darcy and we would ask you to take that into consideration when you exercise your discretion. We say the application should be rejected.

PN903

The clear and historic demarcation between those who might be described as the high rollers and others, which has been recognised as valid industrially, should be firmly maintained and we say that no order should issue.

PN904

THE COMMISSIONER: So can I just clarify, Mr Lunny, is your primary position that I should do absolutely nothing and just dismiss the application and then your alternative is that I should not accept the order but I should make an order to insert the words "if any" before "all" in (a)?

PN905

MR LUNNY: Yes.

PN906

THE COMMISSIONER: I just want to know what is the submission?

PN907

MR LUNNY: That would be our position, either no order issues whatsoever and the application is dismissed and if the MEAA or an agreed member wishes to run their highly technical legal argument they can do that in another forum but this Commission should not give them a free kick the way they are seeking it to have and if the matter otherwise continues to haunt the MEAA, then it can be put on the agenda for the enterprise bargaining negotiations which I think are currently taking place.

PN908

If contrary to what we think are the compelling arguments on equity, conscionability and substantial merits, if you do find against us on the issue we would say that any order should be made unequivocally clear that it has no retrospective effect and should be for the duration of the existing agreement only. If the Commission pleases.

PN909

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

PN910

MR RYAN: Thank you, Commissioner. If being able to read a document properly is running a highly typical legal argument, then I plead guilty. Can I just take you to where Mr Lunny has misled you in relation to - - -

PN911

MR LUNNY: I object to that, Commissioner.

PN912

THE COMMISSIONER: I'm sorry, I missed what was said.

PN913

MR LUNNY: He suggested that I have misled you and I object to that.

PN914

THE COMMISSIONER: Yes, Mr Ryan?

PN915

MR LUNNY: You can tell me where I've got it wrong but don't say I misled the Commission.

PN916

MR RYAN: Mr Lunny had read to you in full and he made great play of what happens to female members coming back when their fixed term contract expires when they are taking maternity leave. He would not have misled you. Three things happened or happen - - -

PN917

MR LUNNY: I still maintain that objection.

PN918

THE COMMISSIONER: Yes, Mr Ryan.

PN919

MR LUNNY: That is offensive language.

PN920

THE COMMISSIONER: I will ask you to remove that please.

PN921

MR RYAN: I will withdraw it but I - - -

PN922

THE COMMISSIONER: Well, I think what you are saying to me is that you disagree with Mr Lunny's submissions.

PN923

MR LUNNY: I don't have any problem with that.

PN924

MR RYAN: No, Commissioner, I go further than that. If Mr Lunny had read you the full part of the award, he would have had to show you that three things can happen. His submission was that a woman who comes back to work because she has been on maternity leave and during that period of maternity leave her fixed term contract expired, she came purely back on award conditions, it is not what it says.

PN925

It says her salary and all other terms and conditions of employment with the station on her resumption of work shall not be as described by the expired fixed term contract but shall be prescribed by the award unless the station and the member agree that the member's employment shall either be regulated by a new fixed term contract or by provisions more favourable to the member than provided in the award.

PN926

THE COMMISSIONER: Mr Ryan, I had that discussion with Mr Lunny.

PN927

MR RYAN: Well, I didn't hear that part of it, Commissioner, because he said - - -

PN928

THE COMMISSIONER: All right. Well, what I'm saying to you is Mr Lunny told his interpretation of that clause and I put question to him in regards to: does this mean that X and Y happens unless there is an agreement to do something else. And Mr Lunny said: yes that is right.

PN929

MR RYAN: All right, Commissioner, I will take that on board. Can I take you to where he really has got it wrong and that is what happens when people on fixed term contract are approached at the end of that fixed term contract and the responsibility of the company as to how people will remain in employment.

PN930

Can I take you to 1.2 of schedule 3 of the award which is the terms it must be included in the fixed term contract? We have the situation that at least 4 weeks before the expiration of the initial term the station must advise. (a) it is irrelevant to these persons because it says in that case I don't want you any more.

PN931

(b) is that the company wishes to employ the journalists on a further specified term of not less than 12 months or the station wishes to employ the journalists after the conclusion of the initial term under the provisions of the award and (d) the salary and other benefits and the conditions that will apply to any continued employment contract.

PN932

So what they say is: we want you to keep working with us either on a further fixed term contract or just under the terms of the award and here is our offer of our employment, here is what salary and other benefits and conditions that we are offering to you.

PN933

1.3 then puts the obligation back on the journalist. It says if the journalist is offered further employment the journalist must advise the station as soon as possible before the initial term ends whether that offer is accepted. So we have a situation where the journalist is told the company wants them to continue working for them either on a further fixed term contract or an ongoing basis and the salary and other conditions that the company is offering.

PN934

The journalist then has to say whether - but definitely before the initial term ends whether that offer is accepted. Now, in the situation where the parties can't reach agreement, 1.4(b) says:

PN935

If the station offers further employment which the journalist does not accept, the employment will terminate at the end of the initial term.

PN936

That clause is put there to make is quite clear to both sides that for ongoing employment to continue, obviously the parties have got to reach agreement as to the terms. So we say in the situation whereby people continue to work for Seven after they've been on initial fixed term contract or renewed fixed term contract and continue to work without a further fixed term contract, that is a choice made by Seven.

PN937

The salary that they remain on is a choice made by Seven because if they can't reach agreement as to the terms of ongoing employment then the employment terminates. That is what is required legally to happen under the award. As Mr Lunny says, if you are offered - under the provisions of the award you have a fixed term contract.

PN938

The most ludicrous argument was you once offered something once, that one-off fixed term contract which may have been 10 years ago, will under his so-called interpretation determine how you are paid out, fails to take account of the words: of our agreement freely entered into that the fixed term contract is issued under the provisions of the award.

PN939

And if you don't reach agreement at the end of each term of a fixed term contract, the award makes it quite clear employment ceases. That was the bargain struck between the parties, the journalists and the company, to be employed for at least 12 months on a salary at least equal to the buy-out rate.

PN940

The company then has an obligation, they want them to stay on either on another fixed term contract or on ongoing employment, then they've got to offer that within at least 4 weeks of the contract term to go and has to set up the offer of further ongoing employment or further employment.

PN941

The journalists have got to respond to that but if during that period of negotiation of the terms and conditions no agreement is reached, employment ceases. They are the legal obligations. They are not technical obligations. They are how one is able to enter into further employment, either fixed term or ongoing, where a person is coming to the end of a fixed term contract.

PN942

If the person is still working there and there is no fixed term contract in place, then it is done with consent of the company and that contract continues because both sides wish it to. It is now ongoing employment because the employment has not terminated in accordance with 1.4 because if you don't reach agreement the award makes it quite clear that at the end of that fixed term employment ceases.

PN943

So people who once upon a time went on to fixed term contract are now on ongoing employment, it is perfectly legitimate that they be paid their redundancy at their rate of pay in regard to years of service because the company knows the consequences. Because they cannot rely here on any breach of the award to aid in their assessment of what 1.5 should mean.

PN944

It is just not open to them because as the award says, if you can't reach agreement on a further term of employment, be it ongoing or fixed, after the company has shown the journalists what terms it is offering, the employment will terminate at the end of the initial term.

PN945

So that group of people, however many in number, who once upon a time were on fixed term employment are now on ongoing employment, is done because there was a legally binding contract of employment envisaged by the award between the journalists and Network Seven.

PN946

And why should these people be disadvantaged when Seven has freely entered into ongoing employment at a rate of pay that has been agreed to without it being tied to having a fixed term employment? So I say, Commissioner, in your exercise of your discretion you should not allow any breach of the award or its terms by Seven to underpin a case for the insertions of "if any" into a redundancy agreement.

PN947

We do say, we do accept that that option was put there to strike a fair balance on those on fixed term employment because redundancy can occur any way through a fixed term agreement - sorry, a fixed term contract of employment and that person may or may not have had long service with the company but to recognise the balance struck, to recognise long service at a realistic rate of pay or to recognise that Seven should not have made somebody redundant a short period into a long term contract, that balance was struck.

PN948

We are not talking about those people. We are talking about people that Seven wants to keep on but not on a fixed term contract, at a rate of pay freely agreed and if they are made redundant down the track then they should be paid out according to their years of service on the salary freely entered into and approved under the provisions of the award with Seven, if the Commission pleases.

PN949

THE COMMISSIONER: Yes, thank you, Mr Ryan. So, gentlemen, yes, have you anything further at all?

PN950

MR LUNNY: Commissioner, I would like to put it on the record, Commissioner, that I paused deliberately in my submissions to allow you a copious opportunity, which I think you took advantage of, to read the terms of clause 3 of appendix A dealing with maternity leave and on that basis for the record I would just like to assert that there was no intention as my friend has put it to mislead the Commission.

PN951

MR RYAN: And after the Commission has said, I withdraw that, Commissioner.

PN952

MR LUNNY: With an apology?

PN953

MR RYAN: It is withdrawn, Commissioner.

PN954

MR LUNNY: Thank you.

PN955

THE COMMISSIONER: Mr Lunny, I think I made that clear to Mr Ryan because I remember quite clearly we had a discussion on that and I did not accept his submission to me that I was misled in that regard.

PN956

MR LUNNY: Commissioner, the pause that I had granted would not show on the transcript and I just wanted to make that clear as well.

PN957

THE COMMISSIONER: Yes. No, your point is taken, Mr Lunny.

PN958

MR LUNNY: Commissioner, can I make a few just very brief comments in conclusion?

PN959

THE COMMISSIONER: Look, Mr Ryan, I'm going to allow this but if there's anything further that you wish to add, it is the MEAA application and under normal processes that is what we do but, gentlemen, I find it, sometimes to my detriment, I allow a great deal of flexibility.

PN960

MR LUNNY: I will be excessively brief, Commissioner.

PN961

THE COMMISSIONER: Yes, Mr Lunny.

PN962

MR LUNNY: Commissioner, it is simply to repeat the observation that MEAAs obsession is again with the technicalities of contract and award and you are not required to be unduly concerned with that when there are clear issues of equity, conscience and merit and what did Mr Ryan say about equity, conscience and fairness? Not a great deal and that is why we urge again that his order should be refused, if the Commission pleases.

PN963

MR RYAN: Just briefly, Commissioner, I've been accused of a lot of things in this Commission but never being holistic or technical in my submissions.

PN964

THE COMMISSIONER: Gentlemen, thank you for your submissions. The Commission is adjourned, decision reserved.

ADJOURNED INDEFINITELY [12.13pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #MEAA2 DOCUMENT PN709