C2004/149, Transcript of Proceedings [2004] AIRCTrans 3195 (16 August 2004)

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TRANSCRIPT OF PROCEEDINGS


O/N 12874
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER HARRISON

C2004/149
C2004/5329

NATIONAL BUILDING AND CONSTRUCTION
INDUSTRY AWARD 2000

Application under section 113 of the Act
by the Construction, Forestry, Mining
and Energy Union to vary the above award
re subparagraph 24.4.3(b) - multi storey allowance
allowance

NATIONAL ELECTRICAL, ELECTRONIC AND
COMMUNICATIONS CONTRACTING INDUSTRY AWARD
1998

Application under section 113 of the Act
by the Communications, Electrical, Electronic,
Energy,Information, Postal, Plumbing and
Allied Services Union of Australia to vary
the above award re multi-storey allowance

SYDNEY

10.10 AM, THURSDAY, 5 AUGUST 2004

PN1

THE COMMISSIONER: Good morning, can I have the appearances, please?

PN2

MR S.MAXWELL: If the Commission pleases, I appear on behalf of the Construction, Forestry, Mining and Energy Union.

PN3

MR L.BENFELL: If it please the Commission, I appear on behalf of the electrical division of the CEPU in relation to C2004/5329 and I also seek leave to intervene on behalf the plumbing division of the CEPU in relation to C2004/5392 which is an application made by the union yesterday but is not before the Commission at the moment.

PN4

MR R. CALVER: If the Commission pleases this morning I appear for Master Builders Australia Inc and with me today is MR P. GLOVER from the Master Builders Association of New South Wales. I appear in matter 2004/149 and this morning I also make an appearance for MR P. RYAN from Employers First in all matters. Mr Ryan was delayed with another dispute and telephoned me and asked me to make an appearance on behalf of Employers First as they have an interest in this matter but he's unavoidably detained. If it please the Commission.

PN5

MR I. WARREN: If the Commission pleases, I am from the Building Industry Specialist Contractors Organisation of New South Wales. I appear today on behalf of the Master Painters Australia, New South Wales association and I seek leave to intervene on behalf of the respondent members of the association of ball and ..... industries of New South Wales. I also seek leave to intervene on behalf of the Master Plumbers and Mechanical Services Association of Australia and that relates to the matter Mr Benfell just mentioned to you. I have a written authority to appear, Commissioner, if I may pass that up. That matter will be joined I understand in the near future.

PN6

MR G. BOYCE: If the Commission pleases, appearing for the National Electrical Contractors Association in matter No C2004/5329.

PN7

MR S.SHERMAN: If the Commission pleases from the Australian Industry Group, appearing in matter No 149 of 2004, Commissioner.

PN8

MR S.MARRIOTT: If it please the Commission, solicitor, seeking leave to appear for the respondent members of Australian Business Industrial in C2004/149.

PN9

MR J. ELDER: If the Commission pleases I seek leave to appear on behalf of the respondent members of the Master Plumbers and Mechanical Contractors Association of New South Wales and I seek leave to appear in the matters I think that Mr Warren identified, so we do have an interest in all matters.

PN10

THE COMMISSIONER: I've called both applications on and I understand there is a foreshadowed application in the plumbing sector. Is there any objection to it being dealt with in that way? Thank you. Mr Maxwell?

PN11

MR MAXWELL: Thank you, Commissioner. Commissioner, this is an application to vary the National Building and Construction Industry Award in regard to the multi-storey allowance found in clause 24.4.3 of the award and I understand that some applications have been made in regard to the NEEC Award and the plumbing award.

PN12

Commissioner, the award clause currently provides for an allowance to compensate for disabilities involved in multi-storey allowances up to the 61st floor, the top rates as from 61st floor onwards. That scale was introduced into the award in 1980 through an order made by Alley J, found in print E1597. I won't take you to that at this stage, Commissioner, but just to give you the background to the application.

PN13

At that time most of the buildings under construction in Australia were less than 61 storeys. For your information the Collins Place Tower in Melbourne in 1981 was 50 storeys. The, I suppose more relevance to the Commission the Nauru House in Melbourne was 52 storeys and in 1985 the Railto Towers in Melbourne were 63 storeys. However, since then there have been a number of attempts in Australia by various developers to build I suppose skyscrapers of ever increasing heights. If you look at the original proposal from the Grollo Brothers in Melbourne that was for 116 storey project. The current projects in Melbourne, the Eureka Tower project which is under construction, is planned to be a 92 storey building and we believe that the disabilities associated with working on buildings of that size are not adequately compensated for in the award and what we are seeking is an extension in the scale of the allowances in the award.

PN14

Commissioner, it might be helpful to the parties if I just hand up how we calculated the new rates that we are seeking in the application.

PN15

THE COMMISSIONER: Do you want this marked, Mr Maxwell?

PN16

MR MAXWELL: It would be preferable, Commissioner.

PN17

THE COMMISSIONER: I will mark this CFMEU1.

EXHIBIT #CFMEU1

PN18

MR MAXWELL: Commissioner, just to briefly take you through this document. When the new scale was inserted into the award by Alley J it was effective from 1 September 1979 and the scale had five rates from the commencement to the 15th floor, from the 16th floor to the 30th floor, from the 31st to the 45th, from the 46th to the 60th and from the 61st floor level onwards. So the scale was based on an increase every 15 floors. If you look at the rates that were set it was 15 cents per hour for the first rates and then the rates above that increased, apart from the increase in the 16th to the 30th which was a 5 cents increase, the rates of that then increased by 10 cents, so in other words above the 30th floor the increase every 15th floors was a flat 10 cents increase.

PN19

Now, if you then look at the next grouping, which is the current rates in the award, you will see that the differential has gone out of wax so to speak in that through the percentage increases through national wage increases then the flat differential has waivers. However, if you took an average from the rates from the 31st floor onwards you will see that the differential is 25 cents, then 20 cents, then 23 cents. What we've done is taken an average of those three rates which gives a figure of 23 cents and then in the application we've made today we are seeking to set new rates from the 76th floor onwards which is an increase of 23 cents every 15 floors. So we believe that is consistent with when the current arrangements were solicited in September 1979.

PN20

Now, Commissioner, obviously there hasn't been a great deal of discussion between the parties at this stage. I have had some brief discussions with a number of the employer organisations and they've informed they're yet to determine their position in regard to the claim. However, to be abundantly cautious in regard to the national wage case principles we would argue that all we are seeking is an extension to an existing allowance contained within the award.

PN21

On this issue we believe that the national wage case principles aren't that clear because principle 5 deals with adjustment of allowances and service increments.

PN22

If you go back to principle 2, which deals with when an award may be varied or another award made without the claim being regarded as above or below the safety net, it says that:

PN23

In the following circumstances an award may on application be varied or another ...(reads)... below the award safety net.

PN24

It then sets out a number of situations. 2(c) says:

PN25

To adjustments for allowances and service increments in accordance with principle 5.

PN26

And principle 5 deals with adjustments for allowances and service increments.

PN27

However, when you turn to principle 5, if you go to principle 5(g) it states:

PN28

Where changes in the work have occurred or new work and conditions have arisen ...(reads)... extension to an existing award.

PN29

Now, we would argue that this is really an extension to an existing award and that we are seeking to extend the scale of the allowance.

PN30

Principle 10 of the National Wage Case principles deals with first award an extension to existing award and that says, and I quote:

PN31

Any first award and extension to an existing award must be consistent with the ...(reads)... Part 6 of the Act.

PN32

It then goes on in dealing with determining the context of a first award and sets a number of principles. However, nothing more is really said in regard to the extension to an existing award.

PN33

So, Commissioner, we have a situation where principle 2 of the statement of principles says that if you're varying an allowance in accordance with principle 5 then it is not seen as an application above or below the safety net. Principle 5(g) says well if it is new conditions then it has to be dealt with under principle 6 or principle 10. So we get to a bit of a circular argument about which ones apply. So to be abundantly cautious it points out that principle 10 deals with making an award above or below the safety net and it states:

PN34

Any application to make or vary an award for wages or conditions above or below the ...(reads)... Full Bench.

PN35

So to be abundantly cautious in regard to this application, Commissioner, we will seek that you refer the matter to the President as a first step to consider whether he considers it should be dealt with by a Full Bench or whether it is appropriate to be dealt with by a single member of the Commission.

PN36

We do that, Commissioner, so that we don't get two or three months down the track and then we have an argument about whether it is above or below the safety net and then has to be referred to the President. We believe that the matter can be dealt with by a single member given that all we're seeking is an extension in the scale of the allowances, existing allowances, that is contained in the award. We are attempting to deal with new situations that have arisen that weren't contemplated when the award was made given that there were no multi-storey buildings above 61 storeys I think were even contemplated in 1979. However, we now have a situation where there is a building being constructed in Melbourne at this current time that is 92 storeys and we submit that the multi-storey allowance doesn't compensate for the disabilities experienced once you get up to the 80 or 90 storeys level and it may be further down the track if appropriate where we'd conduct an inspection on that site. I think when people see the conditions being experienced at 80 storeys I am hopeful that they will see the wisdom in supporting this application.

PN37

In regard to where we go to from here, as I said we will submit that the matter be referred to the President in the first instance and in the meantime that the parties be directed to confer on the application and if the President makes a decision fairly quickly and decides to leave the matter with yourself that we then look today to a report back in approximately - well, depending on when the President makes a decision - but hopefully within a two week time frame. If the Commission pleases.

PN38

THE COMMISSIONER: Thanks, Mr Maxwell. Just to go back a moment. Is there any objection to the applications for leave to intervene or to appear? Leave is granted in all cases.

PN39

MR BENFELL: In relation to the National Electrical Electronic and Communications Industry Award C No 5329 I have some documents to show that the hearing notice was served, and the application was served on the parties. I have two documents.

PN40

THE COMMISSIONER: Everybody is exercising a clear abundance of caution today.

PN41

MR BENFELL: Yes. As you will see from those documents, Commissioner - - -

PN42

THE COMMISSIONER: It might have something to do with the calendar note which appears on the loose-leaf calender today, it says: "A moment inside is sometimes worth a life's experience."

PN43

MR BENFELL: The documents I've provided though, Commissioner, is firstly the Winston Mail receipts showing that we served by registered mail on the parties and for substituted service issued by the Commission and they were served on 27 June 2004 and in addition to make sure the parties knew about the hearing in sufficient time we also faxed the application and the hearing notice to the parties on 29 July and you have a fax confirmation sheet as well.

PN44

Commissioner, in relation to the application to vary the Plumbing Trades Southern States Construction Agreement, that is C No 2004/5392, which arrived yesterday in Melbourne which I understand you have not got before you, we would seek that that matter also be joined with these other matters so they can be all dealt with at the same time.

PN45

The application to vary both the plumbing award and the electrical contracting award are on the same terms essentially as the National Building and Construction Industry Award. The scale in the current plumbing and contracting awards are the same scale as found in the National Building and Construction Industry Award and the application if successful will ensure that the rates across the building industry, across those three awards, are the same.

PN46

We adopt the submissions made by the CFMEU in relation to the principles and unless you have any questions, Commissioner, that completes our submissions for the moment.

PN47

THE COMMISSIONER: Thanks, Mr Benfell. Mr Calver?

PN48

MR CALVER: We received the application on 23 July and have had some preliminary discussions with our affiliates, however we are not yet in a position to be fully instructed. We've made Mr Maxwell aware of that and we did have some questions of him this morning in relation to the mathematics that he'd adopted and I thank him for CFMEU1 which makes the methodology he adopted clear.

PN49

Today in that regard does in our view appear to be about threshold matters. The question that Mr Maxwell has raised with you is essentially how can this application proceed under the wage fixing principles. Mr Maxwell says that there is ambiguity. We say that we do not believe there is ambiguity. The application is for an increase in the multi-storey allowance. At present from the 61st floor onwards, emphasising that word onwards, the hourly rate is $1.14. After the application the maximum in respect of the hourly rate will be $2.06. It is clearly an increase in the rate of the allowance above 61 floors. How then do the statement of principles postulate that an application of this kind should proceed?

PN50

As Mr Maxwell indicated you start with principle 2. Principle 2(c) says that you can adjust allowances and service increments which are not relevant but you can adjust allowances in accordance with principle 5. You then turn to principle 5. Mr Maxwell jumped to principle 5, little paragraph (g) which deals with changes in the work which have occurred, or new work in conditions having arisen. However, we believe that paragraph 5(e) should govern the matter before you, that says:

PN51

Existing allowances...

PN52

which is the nature of the current allowance:

PN53

...for which an increase is claimed because of changes in the work or conditions...

PN54

Mr Maxwell himself says that the application has been motivated by buildings becoming taller and this is one instance where I can characterise his narrative is full of tall stories without being contradicted; 5(e) says:

PN55

...because of changes in the work or conditions, the matter will be determined...

PN56

It does not give a discretion:

PN57

...in accordance with the relevant provisions of the work value changes principle of this statement of principles.

PN58

So if you determine, Commissioner, I submit, that this is an existing allowance for which an increase is claimed because of changes in the work or conditions, then the matter is quite categorise, it will be determined in accordance with the relevant provisions of the work value changes principle of this statement of principles.

PN59

You then go to paragraph 6, work value changes to determine whether or not there are provisions which govern the matter and essentially there are two paragraphs which are highly relevant to the matter before you, that is, 6(d) and 6(g), 6(d) says:

PN60

The time from which work value changes in an award should be measured is the date of operation ...(reads)... the August 1989 national wage case decision.

PN61

Motivated by the fact that allowances should not be increased unless the structural efficiency principle has been applied to awards as an introduction to that. The question then is, when was the National Building and Construction Industry Award modified in respect of the 1989 structural sufficiency principle? The answer is August 2003 limiting the time period within the CFMEU could argue that the work value changes applied.

PN62

Then 6(d) arises, the expression:

PN63

The conditions under which the work is performed.

PN64

Which is a matter that relates to work value, work or conditions being referred to, as I said, in paragraph 5(e) of the wage fixing principles; (g) says:

PN65

The expression, the conditions under which the work is performed relates to the environment in which the work is done.

PN66

So arguments can only be adduced in relation to changes in the work environment. So again, that would be something that would need to constrain the extent of the CFMEU application and the other applications in this matter. Now, if that argument is considered by you to be not applicable, we say that the matter then clearly falls within principle 10 without ambiguity and that the matter does need to be referred to the president in terms of principle 10 along the lines that Mr Maxwell put, so in other words, I am putting that in the alternative.

PN67

I am unaware, Commissioner, of any decision where the threshold matter of the nature you before you has to be determined in the manner that we have put but it is quite critical to the manner in which the wage fixing principles operate, in other words, even though principle 2 says:

PN68

In the following circumstances an award may on application be varied or another award made without the application being regarded as a claim for wages and/or conditions.

PN69

Once that application is made and is clearly an application before you, do the mandatory terms upon which the principles which I have discussed then subsume the right of the applicant to seek to have the president make the matter a matter above the safety net for determination under principle 10. Now, that is a technical legal question which we say, sir, you have as a threshold matter to determine and we would seek your determination upon that point.

PN70

If the application proceeds as an application above the safety net, the factors which govern the application obviously will be of a different complexion and the manner in which the conduct of the application is run will be different. So it is an extremely important threshold question. Beyond that, as I said, we are very grateful for Mr Maxwell for running through the maths for us, there were a number of ways in which he could have reached the conclusions he did and the CFMEU1 sets it out well.

PN71

We intend to have further discussions with Mr Maxwell about a number of other issues and we thank him for the discussions we have already had, we think there is real value in further conciliating on this matter. As to the issue of Melbourne, whether or not an inspection is or is not warranted will depend, as I articulated, upon whether or not the threshold question is answered in either the manner that principle 10 can be invoked or the other route that I set out has to be taken.

PN72

If the Commission pleases, as I said, Master Builders has yet to get complete instructions from its affiliates, that process will be enlivened now by the material that is on transcript and the material provided by the CFMEU and we look forward to conciliating this matter with the CFMEU before matters are put to a hearing. I think a fortnight is a little difficult, I would propose that we do not report back here until at least 21 days have elapsed. This is not a matter that is simple as on the face of it appears and the threshold issue does bring into account the very nature an application of the wage fixing principles. If it please the Commission.

PN73

THE COMMISSIONER: Thank you, Mr Calver.

PN74

Mr Warren?

PN75

MR WARREN: Thank you, Commissioner. I would support the position put to you by Mr Calver, I would also support the application by Mr Benfell to join the plumbing industry, that is on behalf of the Master Plumbers and Mechanical Service Association would support that application that the matter be joined. I think Mr Calver has put the position quite well and there are many matters regarding the environment in which the work is performed which will have to be looked at if this matter is to proceed.

PN76

The difference between nice height of 61 storeys and 100 storeys is obviously a matter that is going to be quite germane to the argument but there have been quite considerable changes in a number of matter affecting work at heights and the way in which buildings are often partly completed and people are receiving allowances whilst working in quite normal everyday conditions, all those matters will probably come before you but I think they are for down the track after the threshold issues have been resolved. If the Commission pleases.

PN77

THE COMMISSIONER: I thought you might be more optimistic with the outcome of conciliation.

PN78

MR WARREN: I am not sure, Commissioner.

PN79

THE COMMISSIONER: Mr Boyce?

PN80

MR BOYCE: Thank you, Commissioner. We received the application by fax on 29 July and in the mail on 30 July and we have not had a chance to get instructions either as to our position on the joinder and we would also reserve our position to make some submissions on the threshold issues. We would simply seek that the matter be stood over for probably at least 28 days in order for us to get some instructions and also, to possibly make some further submissions on those threshold issues.

PN81

THE COMMISSIONER: Thank you, Mr Boyce.

PN82

Mr Sherman?

PN83

MR SHERMAN: Yes, thank you, Commissioner. Commissioner, very briefly we support the submissions put forward by the Master Builders this morning. I can also inform the Commission we are yet to receive firm instructions from our members and we are doing so or are in the process of doing so, Commissioner and we would have no objection firstly, the matters being joined and secondly, to you conciliating the matter, Commissioner.

PN84

THE COMMISSIONER: Thank you, Mr Sherman.

PN85

Mr Marriott?

PN86

MR MARRIOTT: Yes, Commissioner, I also agree with Mr Calver that 14 days will be a little difficult, I think that either 21 or 28 days would be more appropriate an adjournment, so that we can seek instructions from our members. We are in the process of consulting with them on the proposal at the moment. We have not come to any conclusion as yet.

PN87

THE COMMISSIONER: All right, thank you, Mr Marriott.

PN88

Mr Elder?

PN89

MR ELDER: Commissioner, we would seek to support Mr Calver in his submissions, we also are grateful that we have been granted intervention i n these matters which we believe there is a lot of use in having them joined together. Thank you, Commissioner.

PN90

THE COMMISSIONER: Thank you, Mr Elder.

PN91

Mr Maxwell?

PN92

MR MAXWELL: Thank you, Commissioner. Commissioner, at this stage I do not think there is a great deal I would wish to say however, I would point out that I think Mr Calver needs to go back and check through the history of this award because he referred you to principle 6(d) of the National Wage Case Principles and 6(d) states:

PN93

The time from which work value changes in an award should be measured is the date of operation of the second structural efficiency adjustment allowable under the August 1989 National Wage Case decision.

PN94

If you go back through the history of this award you will find that the second structural efficiency adjustment was actually payable in the early 1990s, I would suggest around 1991 so I think Mr Calver perhaps needs to check, as I said, the history of the award and when the award was varied in regard to the wage rates.

PN95

Commissioner, obviously there can be an argument about whether the matter should be dealt with under the work value principles or principle 10 or principle 5 but, as I said, to be abundantly cautious we believe that to stop any issue arising further down the track that if we refer to the present now then all parties can accept that either the matter has been dealt with by someone else or it's going to be dealt with by you and we can proceed on that basis. We believe that will assist in the efficient running of the Commission and we would also, I think, need to point out that there is a time issue involved in this application.

PN96

There is currently a building under construction where this application, if it succeeds, can have application and if the matter is unduly delayed which I am sure is not the intention of the employer organisations sitting around this table then given that - well, I wouldn't want to get into an argument about retrospectivity further down the track if it can be avoided and I believe that if the matter is dealt with fairly quickly there will be no need for any such arguments.

PN97

In regard to the issue of 21 days or 28 days, I think they were suggesting 28 days, they are pushing the barrow, so to speak, however, I should inform the Commission that I will be on leave between 16 and 20 August so any report back or conciliation in the week beginning 23 August would be not opposed by the union and given that that is an 18 day time frame then we can't see that being a problem for the new employer organisations to get advice from their members. Commissioner, at this stage I think that's all I have to say and we will see what happens. If the Commission pleases.

PN98

THE COMMISSIONER: Thank you. Mr Benfell?

PN99

MR BENFELL: Commissioner, NECA have put to you that they want leave reserved to come back at some future date to make submissions on the application of the wage fixing principles. We would oppose that because that would unduly delay the reference to the President and having this issue sorted out. The issues relating to the wage fixing principles have been enunciated by both the CEPU and the MBA and we would say that if NECA do want to make additional submissions in relation to the wage fixing principles only they should do so within three days in writing to allow the parties to, if the Commission decides, have the matter referred to the President and dealt with.

PN100

As has been put by the CEPU this matter needs to be dealt with without too much delay. I understand the building concerned is at about the 50th level of construction now. If the Commission needed to inspect the disabilities associated with working above the 61st storey obviously we would have to have inspections when they start building the 61st storey not after they've completed the walls and most of the disabilities may have changed. So we would say that NECA should be directed to put any further submissions they wanted to in relation to the wage fixing principles within three days.

PN101

THE COMMISSIONER: Thank you. Mr Boyce?

PN102

MR BOYCE: Commissioner, I would just simply there is no formal application for urgency in this matter that's been put before you. We have been given five days. I am here representing states across Australia. I understand the application is not simply about a 92 storey building in Melbourne but, that said, we need some time to properly consider the wage fixing principles and there's simply no point in the matter proceeding if we haven't had the opportunity to properly get instructions and engage it so we would say we need at least that amount of time to come back and make further submissions.

PN103

THE COMMISSIONER: I don't think we're at the stage where it's essentially a question of whether or not your members agree to the claim or otherwise but as Mr Calver has correctly identified there is a threshold question in regard to the principles; the principles aren't new. In those circumstances it is my view that if you do want to put anything contrary to what has already been put by Mr Calver that you should so within the next seven days to the Registry and also to the parties at the bar table.

PN104

In the meantime I will refer the applications to the President and also provide copy of the transcript to him. I direct the parties to confer and that's already anticipated in any case and I commend that approach. I will re-list the matter for report back, subject to the parties availability, at 2 o'clock on 26 August. Mr Calver, is that convenient?

PN105

MR CALVER: If it please the Commission, yes, that's fine by me.

PN106

THE COMMISSIONER: Thank you.

PN107

MR CALVER: In relation to the matter raised by Mr Maxwell I had believed that the second structural efficiency adjustment was consonant with the introduction of a classification scheme under the National Building and Construction Industry Award; that is why I put the submission in that way. It's not in any sense intended to mislead the Commission. However, now he has raised that matter of doubt I would suggest that I be given the opportunity to check the consonants of that adjustment and the introduction of the classification scheme and notify the Commission and the parties, perhaps through your associate, by filing and serving a letter which details my understanding of that date under paragraph 6D.

PN108

It's unusual, Commissioner, in a sense, that by referring the matter to the President is it not de facto a decision that you have said that principle 10 does or does not apply?

PN109

THE COMMISSIONER: No. I will take on board what you have said about the threshold question in relation to principle 10 but for abundance of caution, that term has already been used today, I will also confer with the President in relation to the applications.

PN110

MR CALVER: I understand, sir, thank you for clarifying the matter, I appreciate it.

PN111

THE COMMISSIONER: Thank you. Nothing further?

PN112

MR BENFELL: Commissioner, may I inquire as to whether you do intend to join the Plumbing Industry Award with the other two applications?

PN113

THE COMMISSIONER: Yes, if there's no objection to that. I think it's the most efficient way of dealing with the matters. These proceedings will stand adjourned until 26 August.

ADJOURNED UNTIL THURSDAY, 26 AUGUST 2004 [10.51am]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #CFMEU1 PN18