C2004/265, Transcript of Proceedings [2005] AIRCTrans 151 (20 January 2005)

1800 534 258

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 10011

COMMISSIONER LEWIN

C2004/265

s.113 - application to vary an award

APPLICATION BY TRANSPORT WORKERS' UNION OF AUSTRALIA
(C2004/265)
Transport Workers' (Superannuation) Consolidated Award 2004

MELBOURNE

12.51PM, TUESDAY, 11 JANUARY 2005

Continued from 17/11/2004

PN606

THE COMMISSIONER: Good morning. My apologies for the late start. Unfortunately a number of industrial disputes have conspired to delay my commencement of this hearing this morning. I understand Mr Ryan you are going to now commence the reply on behalf of the employers. Is that right?

PN607

MR RYAN: I'm wish to commence first Commissioner, but it is not on behalf of all of the employers.

PN608

THE COMMISSIONER: I appreciate that, but you will be the one who will commence the reply.

PN609

MR RYAN: If I could simply seek your indulgence. I need to leave by about 12. I will be finished by then but I don't want the commission to take any disrespect from the fact that I have to leave.

PN610

THE COMMISSIONER: I will only take your submissions into account Mr Ryan. You are excused from 12.

PN611

MR RYAN: Thank you Commissioner. I have also let my colleague Mr Moore know - not to take offence if I am not here for his closing. He indicated that he wouldn't take it personally.

PN612

Commissioner as you are aware, this is about an application by the Transport Workers Union to vary the superannuation award, to effectively redefine ordinary hours for the purposes of casual employees. Much of their submission is based around the fact that the casuals are currently disadvantaged in the way the superannuation award is currently structured. There are a couple of points that I think are important to make at the outset, and I simply want to do that. In Mr Moore's submissions he indicated, at the end of the hearing and reiterated that in the written submissions that were filed, that quite a few employer organisations, or employers, had not responded directly to the TWU application, and he was seeking, in my submission Commissioner, to make something of that. I simply want the record to reflect that the Chamber of Commerce and Industry in Western Australia have indicated that they support the positions, and indicate we support the views expressed by the Australian industry group, as ARTIO did in its initial submissions. Business South Australia has also forwarded a letter to that effect. The South Australian Road Transport Association, an esteemed body of employers in South Australia, have also indicated that they are supporting the positions put forward by the Australian industry group and ARTIO, and Nat Road is also doing that. More particularly Mr Moore specifically mentioned TNT. TNT are a member of ARTIO and as such ARTIO is here representing them in these proceedings. I think it is simply an important point that these matters be noted, and noted for the record. I think it was Sir Thomas Moore who lost his head through silence. I don't think silence creates consent, and if that was Mr Moore's position - - -

PN613

THE COMMISSIONER: He probably didn't consent to having his head chopped off.

PN614

MR RYAN: I am not sure whether it was consent to that Commissioner.

PN615

THE COMMISSIONER: If that is the point.

PN616

MR RYAN: I simply want to put those issues on the record. In terms of the substantive issues in this particular case, and Mr Moore took us through various court decisions and put forward very cogent arguments Commissioner on why casual employees are disadvantaged, and suffer inequity from the way that superannuation is structured for casuals.

PN617

THE COMMISSIONER: Not so much how superannuation is constructed, but the effect of the court's recent determination of the current legal effect of the terms of the award, in relation to their superannuation entitlements.

PN618

MR RYAN: Commissioner it would be my submission that the court has simply clarified everything, and as clearly indicated now what most of us thought was the law. That superannuation is payable on ordinary time earnings, as defined. The High Court has simply reiterated the definition of ordinary time earnings to one that I have always thought to be the case, and one that I will show the transport industry has always thought to be the case, by tabling some documents shortly.

PN619

THE COMMISSIONER: How can we establish as a matter of fact what the thoughts of the transport industry were?

PN620

MR RYAN: When I use the transport industry I use that in the very broad sense Commissioner, and for the purposes of today's hearing I will table some documents that have been distributed by the Victorian Transport Association, which is the Victorian arm of the Australian Road Transport Industrial Organisation, dating from July 1998, advising employers as to what their obligations are with respect to superannuation, and as to what their obligations are to make those contributions based on ordinary time earnings. If the commission pleases I will table this document.

EXHIBIT #ARTIO1

PN621

MR RYAN: I table this document and some further, shortly Commissioner, simply to show that as at July 1998 a circular that went out to all members dealing with superannuation and how it is paid. It shows some of the history of it, but particularly about six lines up from the bottom, just above the subheading of subcontractors it says:

PN622

Attached a definition of ordinary time earnings for the purposes of determining what superannuation is payable on.

PN623

THE COMMISSIONER: What does that mean?

PN624

MR RYAN: I beg your pardon Commissioner?

PN625

THE COMMISSIONER: What do you think that means?

PN626

MR RYAN: This circular shows that for companies with payrolls less than $1m it deals with the legal obligations, and more than $1m.

PN627

THE COMMISSIONER: Does it deal with the question of casual employees?

PN628

MR RYAN: It deals with the question of ordinary time earnings. It doesn't distinguish between casuals or permanent or part timers. It simply deals with the question of what is ordinary time earnings, which is the issue that we are dealing with at hand here, and it says that overtime is not a part of ordinary time earnings.

PN629

THE COMMISSIONER: Is that the issue before us?

PN630

MR RYAN: That is part of the issue before us Commissioner, because casuals - - -

PN631

THE COMMISSIONER: Isn't the issue before us what constitutes ordinary time and overtime for a casual employee?

PN632

MR RYAN: The issue before us is an application by the TWU to seek to extend the definition of ordinary time earnings for casuals to include payments made outside a span of hours. In the transport industry - - -

PN633

THE COMMISSIONER: In respect of which?

PN634

MR RYAN: In respect of which the Victorian Transport Association circulated this to its members back in July 1998, six and a half years ago, advising them that overtime payments were not a part of ordinary time earnings. Whether it is casual or whether it is permanent it does not matter. Overtime is not a part of ordinary time earnings. The TWU's application is seeking to change that with respect to casuals. So that any casual who works outside the span of hours which, in the 1998 award is 5.30 a.m. to 6.30 p.m. Monday to Friday. If they work outside those span of hours then they would be entitled to have superannuation contributions made on their behalf to a complying fund, pursuant to the superannuation guarantee legislation. The point I wish to make on this particular issue Commissioner is that in his submission Mr Moore indicated that, and I can't - Mr Moore indicated that the industry's general behaviour was that superannuation was paid on those payments to casuals outside the span of hours. The point I am trying to show at this stage is that that has not been the advice given by industry associations to their members, on this particular issue.

PN635

THE COMMISSIONER: But it is inferred from this, not expressed in this. That issue is not dealt with directly in this matter is it - in this exhibit? It is an inference that you say should be drawn.

PN636

MR RYAN: It is a clear inference that should be drawn from the fact that a circular has been sent around saying what is included in ordinary time earnings, here is advice. Overtime is excluded. I would now like to table Commissioner a ruling from the Australian Taxation Office superannuation guarantee ruling 94/4.

EXHIBIT #ARTIO2 AUSTRALIAN TAXATION OFFICE RULING94/4

PN637

MR RYAN: Commissioner this is a ruling that was issued back in 1994 by the Australian Taxation Office. It still is a valid interpretation of the law, as it hasn't been superseded or overridden. It defines ordinary times earnings, and if I can refer to the ruling down the bottom of the first page:

PN638

Ordinary time earnings means earnings in respect of ordinary hours of work.

PN639

Then over the page, in roman ii, it talks about earnings consisting of over award payments, shift loading or commission. Then still on page 2 under ordinary hours of work, paragraph 7:

PN640

The ordinary hours of work may be specified in a statute or under an industrial award. If so the ordinary hours specified are also the ordinary hours of work under the Superannuation Guarantee Administration Act.

PN641

So it is very clear that where an award, or in these days an enterprise agreement specifies ordinary hours, then they are the ordinary hours for the purposes of determining ordinary time earnings.

PN642

THE COMMISSIONER: Has paragraph 9 ever been considered by the courts, under ordinary hours of work?

PN643

MR RYAN: Not to my knowledge Commissioner.

PN644

THE COMMISSIONER: I have some vague recollection that it has been. I don't know whether it has been dealt with in any of the decisions referred to in this matter. Because the legislation has to be given a meaning. So there is a delegation of the meaning in relation to persons covered by the award, but the meaning in paragraph 9 is a statutory meaning in relation to persons who are not covered by awards isn't it?

PN645

MR RYAN: Who are not covered by an award or who may be covered by an award that does not specify ordinary hours of work. Then - - -

PN646

THE COMMISSIONER: Or if they are not agreed?

PN647

MS WRIGHT: Commissioner I might be able to help?

PN648

THE COMMISSIONER: You will be dealing with that. No, it is all right. You can deal with it when you come to it.

PN649

MR RYAN: Then Commissioner if I can take you over to explanations, which is the fourth page in there, under explanations:

PN650

What is included in ordinary time earnings.

PN651

Then under types of earnings, the fifth one down is casual loading, and that is included as payments for ordinary hours of work to reflect the lack of formal benefits associated with employment such as sick leave, annual leave, et cetera and there hasn't been any argument about casual loading. Then over the page to what is excluded from ordinary time earnings. 19, overtime payments:

PN652

These are paid for work performed outside ordinary hours of work. It makes no difference how often the employee works overtime.

PN653

That makes it crystal clear, in my submission Commissioner, that overtime payments are not to be included. In fact, are to be excluded from ordinary time earnings, and that is exactly what the High Court decided in the Australian Communications Exchange decision based on an award regime, to quote my learned friend, on all fours, with the one we are dealing with in this situation.

PN654

THE COMMISSIONER: There is no doubt that overtime payments are not superannuable. The real question is whether or not the award should change, insofar as casual employees are concerned, isn't it?

PN655

MR RYAN: Yes Commissioner. All of the two documents that have been tabled in my submission go to show that by extending the definition of ordinary time earnings, which is what we would in effect be doing, by extending the definition of ordinary time earnings to something that is well established, clearly determined, would create more confusion, more difficulty and is against, in my submission, the public policy regime set up under the superannuation guarantee legislation.

PN656

THE COMMISSIONER: But isn't the public policy that whatever the award says is the ordinary hours?

PN657

MR RYAN: The public policy is that if the award determines what are ordinary hours then that is what superannuation contributions shall be payable under.

PN658

THE COMMISSIONER: So the public policy is that it delegates to the award making tribunal?

PN659

MR RYAN: That's correct Commissioner.

PN660

THE COMMISSIONER: The definition of ordinary hours, for the purposes of employees who are to be covered by awards.

PN661

MR RYAN: Yes, and we have and always have had a very clear direction and understanding on what are ordinary hours, in this industry, and those hours are always very clearly - - -

PN662

THE COMMISSIONER: Yes, I don't think there is any issue about that. But the award, as it stands at the present time, whether that is consistent with earlier views or whether it has arisen after the decision of the High Court has made it clear, is such that the current situation is that those hours outside the spread of hours are overtime for the purposes - at least they are not superannuable. The real question is whether or not there is any merit in changing that, isn't there?

PN663

MR RYAN: I will come back and address that, I hope Commissioner, before I have to leave. But there are still some issues - I don't think it would benefit the industry to have, in effect, two definitions of ordinary hours of work or ordinary time earnings. If we have one for casual employees who, on the evidence led by my friend, constitute somewhere between 10 and 15 per cent of the workforce, and a different set of ordinary time earnings for every other - the other 85 per cent of the workforce. Because that would be the potential result of any decision that would extend the definition of ordinary time earnings to casuals. I would like to table now a - - -

PN664

THE COMMISSIONER: I am sorry, when you say 10 or 15 per cent of the workforce, which workforce are you referring to?

PN665

MR RYAN: The transport workforce, and that figure comes from Mr Moore's submissions and used as the ACERT material relied upon.

PN666

THE COMMISSIONER: I just wanted to be clear. So you are saying that your submission is that the effect of many variations on the application would affect a minority of employees in the transport industry?

PN667

MR RYAN: Would affect the minority. If you accept ACERT's evidence, about 15 per cent of employees in the transport industry are casual, and I will come back to that and deal with how some of that might be made up. I would make the submission that - - -

PN668

THE COMMISSIONER: But let us accept that the ratio is correct for the sake of discussion. How does it make it less meritorious that the other employees would miss out, if it is a good idea?

PN669

MR RYAN: Because a casual - if the variation as sought by the Transport Workers Union is granted, a casual would receive superannuation contributions based on the first 7.6 hours of work on any day of the week. That means a casual who is working part of his hours on a Saturday or Sunday would have superannuation payable on those hours. A part time employee would not.

PN670

THE COMMISSIONER: I understand that, I understand what the consequence of the variation would be. I am really just investigating and arguing the submission that you are making, that it shouldn't be granted as a matter of discretion because it will only effect 15 per cent of the transport workforce.

PN671

MR RYAN: It will affect, at a maximum, at a maximum, 15 per cent of the workforce.

PN672

THE COMMISSIONER: Up to 15 per cent.

PN673

MR RYAN: Up to 15 per cent.

PN674

THE COMMISSIONER: Let us say up to 15 per cent. What makes - - -

PN675

MR RYAN: That is casuals - - -

PN676

THE COMMISSIONER: How does that lessen the merit of the application, if it does have any merit?

PN677

MR RYAN: It doesn't necessarily lessen the merit of the application, but when reasons advanced in support of that application are industrial equity and fairness, that is when it becomes relevant. Because if you then treat this group "fairly", in quotes, if I can use that, or "more fairly" you must - you will have a flow on effect of creating a shortfall, or a problem for another area of the workforce.

PN678

THE COMMISSIONER: It is not a problem that lacks opportunity of remedy
is it?

PN679

MR RYAN: It could lead to further applications to this Tribunal to deal with those further issues Commissioner.

PN680

THE COMMISSIONER: Isn't that public policy, that if there is an issue it should be dealt with by the Tribunal, if it can't be resolved by agreement between the parties, at least at the award leave, when and if it is appropriate as a fair minimum?

PN681

MR RYAN: I don't have an issue with that. But the superannuation regime says that superannuation is payable on ordinary time earnings. If we start altering the definition of ordinary time earnings to suit up to a maximum of 15 per cent I, in my submission, closer to five to eight per cent, we are fixing the tail not the dog, and all we are doing is then creating an opportunity to come back and extend the definition of ordinary time earnings across the board. This application can be dealt with by extending the spread of hours, or by removing the spread of hours clause from the award. Because then all hours worked are ordinary time earnings, are ordinary hours, and by definition any earnings from that period of time are ordinary time earnings and would be superannuable.

PN682

THE COMMISSIONER: So for instance if one was to determine that the ordinary hours of work could be performed between a wider spread of hours - - -

PN683

MR RYAN: If the spread of hours was increased, and I am using the '98
award - - -

PN684

THE COMMISSIONER: That would - - -

PN685

MR RYAN: That would then mean that casuals - - -

PN686

THE COMMISSIONER: Are you suggesting that that is an appropriate alternative?

PN687

MR RYAN: I am suggesting that is - it is up to the TWU as to whether it is an appropriate alternative, and I am sure they have considered it. But I am also
sure - - -

PN688

THE COMMISSIONER: I am not learned to the relief sought by the parties, so you are raising an issue here that I will need to give consideration to, obviously. If I see that there is some prima facie proposition there ought to be a variation the question then becomes what variation?

PN689

MR RYAN: Another - - -

PN690

THE COMMISSIONER: Or is it simply the application, the variation sought by the application, or do I - having regard to the reasoning for why there might be merit in it, variations start to consider alternatives.

PN691

MR RYAN: Another alternative to fix the problem is to allow these casuals to work shift work. And then any earnings whilst working under a shift system are a part of ordinary time earnings, and - - -

PN692

THE COMMISSIONER: So you could have a sort of a regime of hours for casuals that looked like the hours of work for shift workers?

PN693

MR RYAN: If they were working outside the span of hours on a shift system and being paid shift allowance Commissioner then that is, again, ordinary time earnings, and superannuable. My colleague Ms Wright will delve into that in more depth. But I think it is important - - -

PN694

THE COMMISSIONER: Is that because you have got to leave as 12 o'clock?

PN695

MR RYAN: No Commissioner. Because she has researched that and has particular expertise in the metals area.

PN696

THE COMMISSIONER: Don't take that too seriously, I was trying to join in the spirit of your opening submission. I will hear from Ms Wright about that. But essentially, whatever the permutation of any alternative might be, what you are suggesting, really, is that even if there is merit in the idea of some sort of disadvantage experienced by casual employees, in terms of accessing employer contributions to superannuation, the form of the application is inappropriate. Is that right? That is what you are saying?

PN697

MR RYAN: There are - - -

PN698

THE COMMISSIONER: If I was to go down the path of saying I think these casuals are getting a bit of a raw deal because they are working a lot of hours but they are not getting any superannuation - - -

PN699

MR RYAN: There are other methods of dealing with that, yes.

PN700

THE COMMISSIONER: And you are saying that the form of the application is inappropriate. The remedy, if there is to be any remedy, and this is an alternative submission, ought to look more broadly at the question of what the remedy ought to be?

PN701

MR RYAN: If you were to take the view that there is an issue that - - -

PN702

THE COMMISSIONER: Equity issue.

PN703

MR RYAN: An equity issue that you believe needs to be addressed, I would then seek an opportunity to further address you that.

PN704

THE COMMISSIONER: And you give as examples, not necessarily conclusive or asserted by you as appropriate, but as examples of matters which could be considered?

PN705

MR RYAN: Yes.

PN706

THE COMMISSIONER: All right.

PN707

MR RYAN: Again, I just wanted to quickly take you to an extract from the tax office Web site Commissioner.

EXHIBIT #ARTIO3 EXTRACT FROM TAX OFFICE WEB SITE

PN708

MR RYAN: If we can turn over the page, the bit under casual employees is relevant in my submission, and I am starting from the third paragraph under casual employees:

PN709

The decision by the High Court in ACE has further clarified the ordinary hours of work for casuals employed under the Clerical Employees Award state of Queensland. As the judgment in this case is specific to this award this decision will only impact on ordinary time earnings for employees under this award, or like awards and certified agreements.

PN710

Again, it was conceded by Mr Moore that the situation we are dealing with is identical to that which existed in the Australian Communication - - -

PN711

THE COMMISSIONER: It is but the first paragraph is an interesting introduction.

PN712

MR RYAN: Yes it is an interesting spin on it, and the tax office - that view, I guess, is consistent with the argument that the tax office took to the High Court and received the support of Mr Justice Kirby only. The rest of the parts under the dot points make it very clear that payments of overtime rates are to be considered overtime, and not included in the employee's ordinary time earnings. I mean again we are dealing with the situation, as it currently exists, has been clearly established and, again, it sets a foundation, in my submission, that this commission needs to take into account, if it is going to move forward to the next step, which is extending the spread of ordinary - or extending the definition of ordinary hours, for the purposes of casuals.

PN713

There are a couple of other salient points that need to be made at this stage Commissioner. One is that there are a suite of about 40 transport awards, not simply the Transport Workers Award 1998. Now it has its spread of hours. The Refuse Award, or the Refuse Recycling and Waste Management Award has a slightly different spread of hours. Its spread of hours are 5 a.m. to 6 p.m. The long distance award, Commissioner, has no set spread of hours.

PN714

THE COMMISSIONER: So would casual employees in that industry receive superannuation contributions on each hour worked, in accordance with the ATO's circular?

PN715

MR RYAN: In my submission Commissioner the general acceptable standard in the long distance industry is that the base award rate multiplied the 30 per cent disability allowance is the appropriate figure upon which superannuation contributions are made. And that is generally accepted by - - -

PN716

THE COMMISSIONER: That is a practice.

PN717

MR RYAN: That is the practice, because - - -

PN718

THE COMMISSIONER: If you interpreted exhibit ARTIO3 in that situation what would the tax office's requirements be?

PN719

MR RYAN: The tax office - if I can table another circular that was distributed by the Victorian Transport Association.

EXHIBIT #ARTIO4 CIRCULAR OF VICTORIAN TRANSPORT ASSOCIATION

PN720

MR RYAN: Again Commissioner this is dated 1 July 2000. Again, it is a circular to all members, and it deals with the specific issue that you raised. What are the ..... obligations and how to calculate contribution rates for transport workers employed under the Long Distance Driver's Award, and under ordinary time earnings the tax office has confirmed that 40 hours per week are considered the ordinary hours of work for long distance drivers employed under the Transport Workers Award 1993. That award is now a 2000 award.

PN721

THE COMMISSIONER: So whenever the hours are worked, any employee, whether they be casual or not will have super contributions equal to the percentage required by the legislation on 40 hours pay?

PN722

MR RYAN: Multiplied by the disability allowance, yes. Because the disability allowance is a part of ordinary time earnings.

PN723

THE COMMISSIONER: Including the disability allowance.

PN724

MR RYAN: Including the disability allowance.

PN725

THE COMMISSIONER: But the point is, isn't it, that casual employees in that industry are already enjoying a greater superannuation contributions than are sought by this application, in certain circumstances?

PN726

MR RYAN: In some circumstances they may be Commissioner. The casual employees who tend to work in the long distance industry are probably working on a more regular and a first job basis.

PN727

THE COMMISSIONER: However they working they are entitled, under this circular, to greater superannuation contributions than employees working under the 1998 award, in certain circumstances, as are the circumstances - - -

PN728

MR RYAN: No. No, Commissioner, they are entitled to exactly the same treatment as employees working either under the '98 award or the long distance award. They get superannuation paid on ordinary time earnings. Ordinary time earnings is defined in this award as 40 hours per week.

PN729

THE COMMISSIONER: I understand that, but as a matter of practice, regardless of when they work their hours those hours will count towards the 40, won't they?

PN730

MR RYAN: Yes.

PN731

THE COMMISSIONER: I am sure that the employer is not going to pay a superannuation contribution of nine per cent of 40 hours plus the disability allowance to someone who has worked for 10 hours.

PN732

MR RYAN: I am sure they wouldn't Commissioner.

PN733

THE COMMISSIONER: But what if the casual works for 10 hours?

PN734

MR RYAN: In the '98 award?

PN735

THE COMMISSIONER: No, in the long distance award.

PN736

MR RYAN: Providing they don't fall - - -

PN737

THE COMMISSIONER: They would get a quarter of it wouldn't they?

PN738

MR RYAN: Providing they don't fall within any other exclusions, such as you have to earn a minimum in a monthly period, then it would be payable on - - -

PN739

THE COMMISSIONER: Unless worked 10 hours a week.

PN740

MR RYAN: Yes.

PN741

THE COMMISSIONER: They will cross the minimum threshold, and they will get superannuation paid on that 10 hours, as a quarter of 40, which would be a greater amount than this application, because it is 7.6 hours per day. And they could work those hours at any time, couldn't they?

PN742

MR RYAN: Yes.

PN743

THE COMMISSIONER: As a casual employee?

PN744

MR RYAN: Yes Commissioner.

PN745

THE COMMISSIONER: So doesn't the comparison work against the casual employee, employed under the '98 award? They can't access what a casual employee on this circular, under the Long Distance Drivers' Award is entitled to.

PN746

MR RYAN: They can access exactly the same. If they chose to work their hours outside a normal span - - -

PN747

THE COMMISSIONER: But they may not have a choice. They may be engaged - - -

PN748

MR RYAN: They may not have a choice, in my submission, Commissioner, and I have nothing substantive to back this up, but anecdotally and from person experience, there are many, many casual who work in the transport industry as a second job, and they chose to do it at overtime rates of pay.

PN749

THE COMMISSIONER: Regardless of the choice - - -

PN750

MR RYAN: No, the choice is critical.

PN751

THE COMMISSIONER: That is what I am saying, regardless of the choice - I don't know. Surely we are going to have a mix aren't we? Some people are engaged to work particular hours, and some people have a preference for that engagement, and it is somewhat oblique isn't it, because at the end of the day if you are employed under the Long Distance Drivers' Award as a casual you are going to get nine per cent of the proportion of 40 hours that you work in any week.

PN752

MR RYAN: Yes, and simply - - -

PN753

THE COMMISSIONER: But that is not going to be the case under the '98 award is it?

PN754

MR RYAN: No. You don't get overtime penalties under this award either Commissioner. Secondly, your casual loading under this award is 10 per cent. Your casual loading under '98 award is 25 per cent.

PN755

THE COMMISSIONER: Why don't you get overtime under the Long Distance Drivers' Award?

PN756

MR RYAN: Because there is no set of ordinary hours, and there is a disability allowance in place to compensate employs for - there are 10 matters listed in the disability column, and I suspect we may - - -

PN757

THE COMMISSIONER: Does that include overtime?

PN758

MR RYAN: No. There is an overtime component built in the cents per kilometre rate that drivers receive under the Long Distance Drivers' Award.

PN759

THE COMMISSIONER: So they are receiving compensation for the overtime component?

PN760

MR RYAN: They receive, in the cents per kilometre rate, they receive a component for overtime and if I could take you to this circular - - -

PN761

THE COMMISSIONER: So that will be included in their 40 hour rate?

PN762

MR RYAN: No. It would no Commissioner. It would be included in their cents per kilometre rate, but it is not included in the base award rate, for the purposes of superannuation, and that was the point I wished to make then. Was that if you go to the penultimate paragraph on this page, the overtime allowance of 1.2 times the ordinary rate is not part of ordinary time earnings.

PN763

THE COMMISSIONER: Good point. It raises the question, does it not, as to whether or not, if there was an inequity, there needs to be some consideration of the calculation of the contribution?

PN764

MR RYAN: I am sorry Commissioner?

PN765

THE COMMISSIONER: It may raise the point comparatively that you have to look at the issue of - the calculation of contribution.

PN766

MR RYAN: Yes. But - - -

PN767

THE COMMISSIONER: In other words, you could count the hours worked but the contribution wouldn't be a percentage of the remuneration received. It might be a contribution equal to what would have been earned if the ordinary time rate of pay had applied for the hours worked.

PN768

MR RYAN: This award, the Long Distance Award, is unique and that - - -

PN769

THE COMMISSIONER: Well that is what this award does, doesn't it?

PN770

MR RYAN: Yes.

PN771

THE COMMISSIONER: It says you get paid in your kilometre rate a component that compensates for overtime, which is evened out.

PN772

MR RYAN: Yes.

PN773

THE COMMISSIONER: But that is not counted when you calculate superannuation contributions.

PN774

MR RYAN: That's correct Commissioner.

PN775

THE COMMISSIONER: But you do get superannuation contributions for every hour worked, up to 40?

PN776

MR RYAN: That's correct.

PN777

THE COMMISSIONER: Whether it be defined, and which is simply not defined as overtime or ordinary time. It is just deemed to be ordinary time for the purposes of - - -

PN778

MR RYAN: And the tax office has confirmed that the 40 hours are considered the ordinary hours.

PN779

THE COMMISSIONER: It is a deeming process isn't it?

PN780

MR RYAN: It is a deeming process, and - - -

PN781

THE COMMISSIONER: Because if you applied ARTIO3, and the first paragraph thereof, if you are a casual employee under the Long Distance Drivers' Award, since there is no ordinary time definition - - -

PN782

MR RYAN: There is - - -

PN783

THE COMMISSIONER: The High Court decision depends upon this bifurcation of the hours of work into categories. Ordinary time, outside spread of hours, overtime, all of that sort of thing. It is an analysis of the way in which categorisation of the hours that are worked affect the employers' responsibility to make contributions. So because the Long Distance Drivers' Award doesn't have that ordinary hours categorisation, on the face of it, it would seem that the first paragraph of ARTIO3 is public policy?

PN784

MR RYAN: The long distance award has ordinary hours of 40 per week. It does not say when they can be worked. ..... ordinary hours clause of 40 per week.

PN785

THE COMMISSIONER: But it doesn't have an overtime provision either.

PN786

MR RYAN: No, because there is overtime built in to the system. But there
are - - -

PN787

THE COMMISSIONER: So all I am driving at Mr Ryan is that ARTIO4 is a deeming process.

PN788

MR RYAN: Yes. There are and there always will be inequities between the various transport workers awards. As I have said the long distance award casuals get 10 per cent. Under the '98 award they get 25 per cent, as from 1 January.

PN789

THE COMMISSIONER: But those compensations have to be considered, having regard to the reasons for which they are enacted. Or not enacted, but awarded? I mean the 25 per cent has been awarded by reason of the commission's satisfaction that there are benefits that accrue to continuing employees, that do not accrue to casual employees. It certainly doesn't include superannuation, perhaps - - -

PN790

MR RYAN: In the test case the Full Bench specifically excluded superannuation.

PN791

THE COMMISSIONER: That's right. I don't think it does - - -

PN792

MR RYAN: But however, the flow on of the casuals test case into the transport suite of awards was done through negotiation and consent.

PN793

THE COMMISSIONER: Nevertheless it is a decision of the commission, and I think in each case, having had some involvement, the reasons which were given were those which I have just expressed. Namely, that there are sufficient differences in the benefits conferred upon continuing employees, and those who are engaged as casual employees, to warrant the specific amount of loading which is prescribed by the award. And reference I think has been made in the decisions that I have issued to the metal industry decision, although I don't think that is a test case, and I think it is settled now that it is not a test case. But notwithstanding that, that decision insofar as it was persuasive rules out superannuation as a component in the calculation of appropriate casual loading. So the difference is in the loading. It is hard to bring them to bear isn't it?

PN794

MR RYAN: With respect Commissioner I don't think the Full Bench ever considered that this issue of whether a casual's earnings on overtime would be superannuable was ever considered by that Full Bench in its deliberations on the casuals issue. Because most of the other - - -

PN795

THE COMMISSIONER: That doesn't take us very far though, does it?

PN796

MR RYAN: Most of the other awards, casuals who work outside the span of hours are often doing it on a shift system. And again that is the point that Ms Wright will cover.

PN797

THE COMMISSIONER: The essence of what the shift alternative is about is, once again, really about, if you think about it conceptually, it is really about the calculation of any contribution.

PN798

MR RYAN: Yes.

PN799

THE COMMISSIONER: That is what it distils to. If the award provided, for instance, that casual employees could work shift work, and that they could work ordinary hours, they would be entitled to a shift allowance. They would also be entitled to a superannuation contribution wouldn't they?

PN800

MR RYAN: Yes.

PN801

THE COMMISSIONER: So really you could take a casual employee, in the sorts of circumstances that Mr Moore has pointed to, and you could simply create new categorisations within the award that enabled them to work ordinary hours.

PN802

MR RYAN: We could extend the spread of hours for casuals.

PN803

THE COMMISSIONER: There are solutions, but what that means is that they would have access to superannuation.

PN804

MR RYAN: I am sorry Commissioner?

PN805

THE COMMISSIONER: It means that they would have access to superannuation.

PN806

MR RYAN: They wouldn't have access?

PN807

THE COMMISSIONER: They would have - - -

PN808

MR RYAN: Yes.

PN809

THE COMMISSIONER: - - - during hours of work.

PN810

MR RYAN: Yes, during hours within - - -

PN811

THE COMMISSIONER: At which present time they do not.

PN812

MR RYAN: They do not, for which they receive overtime payment, at either 150 per cent or 200 per cent, plus the additional casual loading.

PN813

THE COMMISSIONER: A lot of what was filed, I think by AIG, really relies upon this incidence of overtime payments. There is a reason why it is not appropriate to have casual employees being paid overtime and demonstrating the rate of income that they receive for that work, and having them access to superannuation. But once again I come back to the idea - this is really about calculation isn't it? Because if - there is no reason why you couldn't have a provision that casuals could work their ordinary hours at a particular time, and if they did work at a particular time then consider what the rate of pay should be during those times.

PN814

MR RYAN: Yes, that could be a - I suspect will be the subject of some interesting discussions between the industry - - -

PN815

THE COMMISSIONER: Certainly as a matter of jurisdiction and - there are plenty of shiftwork provisions in the awards of the commission ..... such an orthodox scenario. Shift workers would get their superannuation contributions calculated by reference to the ordinary rate plus the shift allowance, wouldn't they?

PN816

MR RYAN: Commissioner I think - - -

PN817

THE COMMISSIONER: So what if you put in a night shift allowance in this award, what would be the loading.

PN818

MS WRIGHT: 30 per cent.

PN819

THE COMMISSIONER: It is 30 per cent. So what you would have is you would make a - I am sort of quite interested in exploring this. You would have a situation where a casual would be working night shift, at ordinary time rates of pay, being paid 30 per cent and having a superannuation contribution on top of that. Is it more expensive than the application?

PN820

MR RYAN: More expensive than the application of overtime?

PN821

THE COMMISSIONER: No. Is it more expensive than this application?

PN822

MR RYAN: It would be cheaper.

PN823

THE COMMISSIONER: Have you calculated that have you?

PN824

MR RYAN: I am conscious of the time Commissioner, and - - -

PN825

THE COMMISSIONER: You are raising some interesting potentials.

PN826

MR RYAN: Perhaps we should adjourn and discuss these issues in conference down the track?

PN827

THE COMMISSIONER: You can do that in parallel I think, with the proceedings. I don't want to lose track of all of the matters that are being raised here. I am wanting to keep my mind as fresh as possible. I have got quite a lot of issues to confront in the decision making process.

PN828

MR RYAN: Commissioner my friend made much of the fact that there is - casuals are disadvantaged, and there is industrial inequity in the current arrangements. If the TWU application was to be granted as is that industrial inequity is going to exist, or will continue in simply a different format. Because a casual working on a Saturday as part of ordinary, of the extended ordinary earnings, ordinary hours at casual, would be entitled for the 7.6 hours to have superannuation contributions made on his behalf. A part timer would not. A permanent employee working overtime on a Saturday would not. But a casual employee working overtime during the week, if it is within the first 7.6 hours would. So this is not going to remove these issues associated with industrial inequity. At the moment one gets super and one does not. One gets paid overtime and one does not. One gets a 22 and a half per cent, or 25 per cent loading - - -

PN829

THE COMMISSIONER: Why would a part time employee whose ordinary hours of work might include Saturday not get paid superannuation?

PN830

MR RYAN: Because it is outside the standard hours, unless there is a specific written agreement that that is part of - - -

PN831

THE COMMISSIONER: Because it wouldn't be ordinary time hours?

PN832

MR RYAN: Yes. Unless you can have - - -

PN833

THE COMMISSIONER: So that would be overtime.

PN834

MR RYAN: - - - more than ..... Saturday, Sunday, through - - -

PN835

THE COMMISSIONER: So contributions wouldn't be made in relation to those hours?

PN836

MR RYAN: Unless there was a specific written agreement to that effect Commissioner.

PN837

THE COMMISSIONER: Unless there was a specific written agreement to what effect?

PN838

MR RYAN: To the effect that ordinary works can be worked on Saturday and Sunday.

PN839

THE COMMISSIONER: Does the award permit that?

PN840

MR RYAN: Yes it does. As I said at the outset Commissioner the TWU are seeking to redefine ordinary hours, for the purposes of casual employees. If they want to - and they are doing it through the Superannuation Award. If they want to redefine ordinary hours do it in the Transport Workers Award 1998, or the other awards, so that casuals do have - these are your ordinary hours, this is when you will receive ordinary time earnings, this is what you will be paid superannuation on. As we discussed earlier, it may be useful to talk with the union and consider some of these issues. At the time the ACERT research was done, upon which the TWU have based some of their issues concerning inequity and disadvantage, it would be my submission that the flow on of the casuals test case into the transport suite of awards has overcome many of those issues associated with that disadvantage, in terms of - - -

PN841

THE COMMISSIONER: Aren't we back to the subject of whether I can take the casual loading into account, say that it is some sort of compensation to casual employees for lack of access to superannuation in particular circumstances?

PN842

MR RYAN: No. I wasn't going back to the casual loading Commissioner, but the casual test case provisions create certain obligations on employers now, in the transport industry, that if you employ a casual - - -

PN843

THE COMMISSIONER: You mean the conversion provision?

PN844

MR RYAN: A conversion of permanent employment.

PN845

THE COMMISSIONER: Sorry.

PN846

MR RYAN: So if you have someone as a casual who is engaged in regular hours you have an obligation as an employer to make them aware that after 12 months, and from that flows certain other obligations to follow. Now that deals with some of the issues identified by ACERT about regular, ongoing continuous work. If they become permanent, if they exercise the right to become permanent then they do have it.

PN847

THE COMMISSIONER: What would happen? Let us assume that a casual has a pattern of work outside the spread of hours, because of the business requirements of the employer, and they are converted to ongoing employment, what effect does that have on their remuneration, and what award categories apply to that work?

PN848

MR RYAN: I suspect, and we are dealing with hypotheticals, but I suspect it would come under a shift system, if it is a regular - - -

PN849

THE COMMISSIONER: So they would stop being a casual and become a shift worker?

PN850

MR RYAN: Yes. A permanent - - -

PN851

THE COMMISSIONER: Yes, they would be a continuing employee, an employee on shift work, working the same pattern of hours, being paid the ordinary time rate plus the shifts allowance, and they would get a nine per cent superannuation contribution on their ordinary hours?

PN852

MR RYAN: That's correct.

PN853

THE COMMISSIONER: But if you are a casual employee in the year leading up to that you don't get that?

PN854

MR RYAN: That's correct. As I said, and I have no evidence to support this statement, other than personal knowledge and experience, that many casuals are working in the transport industry on a second job, and they chose to do it at overtime payments. They receive superannuation payments on the ordinary time earnings in their first job. Now if they were to then work overtime in that first job they have no entitlement to superannuation payments, based on that overtime. If we extend the spread of hours here, when they are choosing to be paid overtime rates at a second time they should not then get the free kick of having superannuation payable on top of it.

PN855

THE COMMISSIONER: I can't unravel this knot of people who have two jobs as some sort of industrial relations ethic, can I? So called free kicks. I mean you are sort of saying that there is a whole lot of opportunistic employees out there are working the system and making too much money essentially.

PN856

MR RYAN: I have not said that at all Commissioner.

PN857

THE COMMISSIONER: No, no, I know you didn't say those words, but do you see what I mean? It is a sort of a - - -

PN858

MR RYAN: But it is the reality.

PN859

THE COMMISSIONER: It may be, we don't know for sure, and I am prepared to accept what you say. That there are some employees in this situation, that are working two jobs, but what does it mean? As Gough Whitlam said to Bill Hayden once, when the currently collapsed.

PN860

MR RYAN: You and I are probably the only ones here old enough to remember Mr Whitlam. Mr Duffin, I think, has only ever seen him on TV, in black and white.

PN861

THE COMMISSIONER: I thought you met him the other night, I think.

PN862

MR RYAN: Commissioner I might leave my submissions there. I would ask that you reject the TWU's application, which simply seeks to, as tabled in A3, their draft application to vary. It says:

PN863

Ordinary time earnings shall be as determined by the Australian Tax Office.

PN864

But then we will throw all that out the window and we will extend the spread of hours, and we will extend ordinary time earnings for casuals, to include overtime payments. So we will say what the High Court said, yes, we accept that, but we will throw it out the window for the purposes of casuals in the transport industry. In my submission Commissioner that will create - - -

PN865

THE COMMISSIONER: Anarchy.

PN866

MR RYAN: It won't create anarchy, but it will create more problems and more issues for employers to deal with. Thank you Commissioner.

PN867

THE COMMISSIONER: Thank you Mr Ryan. As I said earlier, I am happy for you to excuse yourself Mr Ryan.

PN868

MR RYAN: Thank you Commissioner.

PN869

THE COMMISSIONER: Ms Wright. Are you going to refer me to what you have filed?

PN870

MS WRIGHT: Yes.

PN871

THE COMMISSIONER: What you have filed has been marked as AIG1? What I am looking at is AIG1, just as an aid to following your submissions.

PN872

MS WRIGHT: Commissioner we submit that the current award provisions that provide for superannuation to be paid on ordinary hours of work , as defined in the relevant award, are fair and reasonable, and consistent with the High Court decision in Australian Communications Exchange v Deputy Commissioner of Taxation. We submit that the majority judgment in that Australian Communications Exchange decision supports our view that casual employees should not be entitled to superannuation on hours worked outside the spread of hours. In particular paragraph 36 of the majority statement, and I think I have quoted this in our - no. If I can take you to paragraph 36 in the majority decision, which was handed up by Mr Moore.

PN873

THE COMMISSIONER: Yes I have that.

PN874

MS WRIGHT: Starting from the second sentence there:

PN875

The award is an award for different categories of employees. Its ..... to define a number of different concepts. For example ordinary hours and overtime hours, and ordinary rates of pay and overtime rates of pay. They contemplated that casual workers would be able to qualify for work in overtime. That is work performed at times beyond any of the relevant spreads of hours and that such work would attract an additional rate of pay, well knowing that superannuation would not be payable to a fund by the appellant in respect of overtime earnings.

PN876

THE COMMISSIONER: Is the court right, as a matter of historical fact, in the sense that is it possible that the overtime provisions and the effect of the spread of hours on casuals actually pre-dates the superannuation guarantee legislation?

PN877

MS WRIGHT: Pre-dates?

PN878

THE COMMISSIONER: Well the superannuation guarantee legislation is made after this award comes - its antecedents come into existence, or is the '98 award a first award?

PN879

MS WRIGHT: I think you are probably right - - -

PN880

THE COMMISSIONER: It is not a first award. I think it is an award ..... award is it not?

PN881

MS WRIGHT: That's right, but I think at that time there would have been some superannuation as an award provision, say a three per cent superannuation - - -

PN882

THE COMMISSIONER: When the award was first made? Or when the relevant overtime provisions were made? I can remember reading this and myself wondering, as a member of the Tribunal described as the award makers, whether or not it was historically accurate, and whether or not the history of the award had actually been put before the court. Because it is quite possible that the spread of hours provisions, they may have been varied in terms of the times, but their effect may well pre-date the making of the superannuation guarantee legislation. If that is the case, then it can't be accurately said that the award makers were informed as to the effect on superannuation contributions, because those particular provisions were made when there were no entitlements to superannuation under the legislation or under the award system. I don't think there is any footnote that elucidates the basis upon which that conclusion is asserted.

PN883

MS WRIGHT: No. I will take your point Commissioner. I suppose what I would say from this, though, is that the award, and as you have already paraphrased from our submissions - I mean a major point of our submission is that if casuals are entitled to overtime penalties employers shouldn't have to additionally pay superannuation.

PN884

THE COMMISSIONER: I understand that.

PN885

MS WRIGHT: And I suppose by giving casuals to access to overtime penalties, we say that it is clear that that is different to what is known as ordinary time earnings. And even if superannuation wasn't at issue when these provisions were drafted, it was at issue that there is something called ordinary time earnings, and something else that isn't, and when you are not doing ordinary time earnings you get that compensation of overtime penalties.

PN886

THE COMMISSIONER: Implied in that submission is the proposition that the overtime should compensate for the lack of access to superannuation for those people who only work outside the spread of hours, isn't it?

PN887

MS WRIGHT: Yes, and in our submission we say it does, and I will tender some calculations that I have done which show that they are paid well above what ordinary time workers, be it casual or non casual, are paid when working within ordinary hours. Whether they are shift workers or not shift workers. Then at paragraph 39 of this same High Court decision, they say halfway through the paragraph:

PN888

What the award does specify is the spread of hours within which an employee may work for ordinary rates of pay. The fact that no work need necessarily be performed within those hours does not alter their quality as ordinary hours, or the nature of the rates of pay and therefore the earnings that they are attract.

PN889

So that is just reiterating the point that they are different, and because of the different rate of pay we say that should relate to whether they get superannuation or not.

PN890

THE COMMISSIONER: It does, doesn't it? I mean that is the rationale. It is in a nutshell isn't it?

PN891

MS WRIGHT: Yes.

PN892

THE COMMISSIONER: In a way the whole case is decided there? By the - - -

PN893

MS WRIGHT: Yes, and certainly Australian Industry Group - - -

PN894

THE COMMISSIONER: - - - by those performing that particular judgment.

PN895

MS WRIGHT: And Australian Industry Group made submissions in this High Court matter, and it was our submissions and I don't know whether it is particular relevant the practice prior to the decision, but it was always our view along the lines of the submissions made by the ARTIO, that our interpretation of the superannuation guarantee ruling was that overtime payments were not payable on superannuation, and it was not our view that the High Court caused - this decision caused confusion. To us it reiterated what we always understood to be the case. And I think I quoted this in our written submissions, at paragraph 43, the High Court says:

PN896

The flexibility that casual work offers and the desire of workers to engage in it might well have been regarded as recompense for some other advantage foregone either by the - - -

PN897

THE COMMISSIONER: Sorry, what paragraph are you at now?

PN898

MS WRIGHT: Forty three. I am about four lines up from the bottom of the page. They say:

PN899

Either by the employee or employers or both of them. The casual loading - - -

PN900

THE COMMISSIONER: I am sorry, paragraph 43?

PN901

MS WRIGHT: Sorry, paragraph 43, but I have started a fair way into the paragraph, about four lines from the bottom in the middle of the line. The flexibility.

PN902

THE COMMISSIONER: You are in the majority judgment?

PN903

MS WRIGHT: Yes. Page 281.

PN904

THE COMMISSIONER: I am on page 15.

PN905

MS WRIGHT: You are on a different print.

PN906

THE COMMISSIONER: I beg your pardon. I am reading the download.

PN907

MS WRIGHT: Well it is the same. I have quoted it all in paragraph 10.

PN908

THE COMMISSIONER: Are the paragraph numbers the same, they seem to be the same.

PN909

MS WRIGHT: They should be the same. I have also quoted it in paragraph 10 of my outline of submissions if that is easier to follow.

PN910

THE COMMISSIONER: Just a moment. Yes, I see. Thank you.

PN911

MS WRIGHT: Do you want me to just give you a minute?

PN912

THE COMMISSIONER: No, go ahead. You might just read that part again.

PN913

MS WRIGHT: Read it again, okay.

PN914

The flexibility that casual work offers and the desire of workers to engage in it might well have been regarded as recompense for some other advantage foregone either by the employee or the employers or both of them. A casual loading of 19 per cent might have been intended to offset all disadvantages, or may be less than it would be but for the obligations that the appellant pays under the Act. The framing of the definition of ordinary hours in the way that it might itself have been of importance an advantage to casual employees as well as to the appellant.

PN915

I suppose the way I see this is that the framing of ordinary hours under the Transport Workers '98 Award is of an advantage to the casual employees, in that they get the benefit of the overtime penalties.

PN916

THE COMMISSIONER: I think you might be reading a little bit too much into this, with all due respect. I think it just mis-characterises the nature of this reasoning. This is really going to the method of the Full Court of the Federal Court's approach to the problem. There is a certain concession about the plausibility of these sorts of considerations which weighed on the Full Court's mind, but the High Court takes a very different approach. Essentially what they say is you simply read the words, forget about the rest, forget about all of that stuff. That is what paragraph 39 says, isn't it, in essence?

PN917

What the award does specify is the spread of hours within which an employee may work for ordinary rates of pay. The fact that no work need necessarily be performed within those hours does not alter their quality as ordinary hours.

PN918

What I think the correct reading of paragraph 43 is, is a disagreement in the approach of the High Court with that of the Federal Court. I don't think the High Court is reaching these conclusions, or even the probability or possibility of them. It is admitting the plausibility of them but rejecting those considerations, for the purposes of its decision, with all due respect. If you follow what I mean? I am saying it is contra the submission that you are putting to me, the correct reading. What are you putting to me exactly? That the High Court is entertaining these considerations as facts or probable facts?

PN919

MS WRIGHT: I suppose what I am saying is that the High Court is highlighting that the award has these definitions of ordinary hours and overtime as two separate concepts, and it is not by accident that the way that they are defined, and the way that you are compensated for working the overtime earnings, and that therefore when you sit the superannuation beside it and it talks about ordinary time earnings, that it is not by accident that the terminology matches a definition in the award.

PN920

THE COMMISSIONER: What does that mean exactly?

PN921

MS WRIGHT: Well, that the intention of ordinary - to me if you change the definition of ordinary time earnings as the union is proposing to do, then you are changing the definition of ordinary time earnings just for one purpose, for superannuation, and that the way the award is written with ordinary time earnings and any work done outside of that paid at overtime rates, is a fundamental - a concept in the award that we submit shouldn't be tampered with.

PN922

THE COMMISSIONER: Yes, I know that. I was really just wondering though what you would have me make of particular 43. You see, what I am trying to do is to outline my reading of it, which is that it is about the reasoning of the Full Court.

PN923

MS WRIGHT: Yes, well the Full Court was saying that - - -

PN924

THE COMMISSIONER: You see, what follows tells you the story. The reason why paragraph 43 is there is as the precursor to paragraph 44, in which the first sentence is the correct approach is not, with respect, that adopted by the Full Court.

PN925

MS WRIGHT: Yes.

PN926

THE COMMISSIONER: You have got to bracket paragraph 43 between paragraph 42 and paragraph 44. And it is for the purpose of interpreting the award. When you read paragraph 43 you have got to read it by reference to the approach which the Full Court took. So to make a submission based on those specific components of the test of paragraph 43 you would have to link it to the Federal Court. But in any event it is dismissed by the High Court.

PN927

MS WRIGHT: That's right

PN928

THE COMMISSIONER: And it is dismissed in total. It is not dismissed partially or provisionally. All of those things that are referred to there are things which were taking into account by the Full Court for the purpose of reaching its conclusion that it was only the overtime penalty that was to be regarded as overtime earnings.

PN929

MS WRIGHT: Yes.

PN930

THE COMMISSIONER: That was what was being rejected. So that in other words what the High Court is saying is - the Federal Court took the view that you could look at what a casual employee earned outside the spread of hours, and you could say there was an ordinary time component, equal to the ordinary time rate, and there was an overtime component which was the penalty at time and a half for instance, and therefore the ordinary time component was superannuable. And they make a few observations about this that and the other. It might have led to that conclusion, it might have illustrated or informed the Full Court's approach but it is wrong. In other words, what they were saying is that the Full Court was ..... itself into an arbitration commission and it ought to take a black ..... law approach. So I don't know how I can rely on things like flexibility, the loading, or anything of that nature arising out of these references to them. Because that is what I think you are asking me to do isn't it? To say that the High Court has said that, for instance, the casual loading is an offset. Isn't that what you want to put to me?

PN931

MS WRIGHT: Well they are saying that it is possible that it is, yes. And I think that they are saying that by having a definition of ordinary time and overtime in the award there are certain advantages to that which would need to be taken into consideration, in determining - - -

PN932

THE COMMISSIONER: With respect I don't think they say anything about what should be taken into consideration by an arbitral tribunal. It is not appropriate for the court to do so. It has no jurisdiction of that kind. It says:

PN933

It is not for this court to reach a compromise of those compromises.

PN934

That is in line eight. The court specifically says it is not for us to worry about those things. That is what I have got to worry about now, isn't it, on this application? That is what you are saying. But I can't - the court hasn't told me what to do.

PN935

MS WRIGHT: No.

PN936

THE COMMISSIONER: I don't think it was its function. That is the point that I am trying to make. I don't think I can arbitral conclusions from a judicial interpretation of an award.

PN937

MS WRIGHT: Okay. It is our submission that it would not be fair for employers to have make compulsory superannuation contributions in situations where they are paying overtime penalties. We submit that the award currently provides a fair safety net whereby employees are paid superannuation for ordinary time earnings, and when they are not entitled to superannuation that they are paid overtime penalties.

PN938

We reject Mr Moore's submission that the safety net for a substantial number of casuals is non existence. For this to be the case such casuals would have to work all their hours outside the spread of ordinary hours, and be paid overtime for such work. In such cases they would be paid substantially at double time penalties, which is substantially more than employees engaged during ordinary hours. Overtime penalties in the Transport Workers Award 1998 are time and a half for the first two hours, and double time thereafter. This is significant compensation for work done outside the spread of hours. Significantly more than the amount paid to employees when they work within the spread of hours, and we submit it is ample compensation for the disadvantage of not being entitled to superannuation for such hours.

PN939

In paragraph 13 of the AI Group submissions, AIG1, we have stated in there that the union gives, in paragraph 13 of its submission. In the example that it gives it fails to state that casual employees who commence work after 6.30 p.m. - I should go back and explain what I am talking about. The union has said in their submissions that it is an anomaly that employees who work in the transport industry in the morning and do a shift in the morning, casuals, get superannuation, and employees who work in the evening, substantially outside, or outside of the spread of hours, don't get superannuation. But we say it is no an anomaly, given the different in the amount of money they would receive, and I have a document that shows an example of a comparison between morning work and an afternoon shift.

EXHIBIT #AIG2 COMPARISON BETWEEN MORNING WORK AND AFTERNOON SHIFT WORK EARNINGS

PN940

MS WRIGHT: Commissioner this is based on a grade three with an hourly rate of $13.79, for a 6.30 a.m. start working a six hour shift. The casual working the morning would be entitled to $103.44 in wages, and an additional $9.30 in superannuation, which would be a total of $112.75. An employee working a six hour shift with a 7 p.m. start, so being fully outside the spread of hours, would be paid at time and a half for the first two hours and double time after that. The casual loading in this particular award does drop with overtime, to 10 per cent rather than 25 per cent, but that employee for the shift would get $159.98, excluding superannuation. So we say that is a significant difference in the amount they are paid, and if they were to be paid superannuation as well that would further increase the cost to employers.

PN941

If you look at that over a five day week obviously the difference is even greater, being for a five day week $236.15 more paid to the person working outside the spread of hours. So we reject the union's submission that they say there is no sound basis for the differential treatment between these two groups of casuals, and we say that that sound basis is the payment of the overtime penalties.

PN942

We submit the union's application, if granted, would create an anomaly, whereby casuals would be entitled to superannuation, for example on a weekend, where full time and part time employees working overtime alongside those casuals, would not be entitled to superannuation contributions for the same work. This would also be the case for employees working outside the spread of hours. So if you had a part time employee who starts work at 4 p.m. and works till 8 p.m. alongside a casual working the same hours the casual would be entitled to superannuation, where the part time employee would not be, after the spread of hours, entitled to superannuation.

PN943

The union have submitted that no other category of employee can be denied employer funded superannuation merely because of the time of day or the day of the week on which they work, except for casuals. That they are the only category the employee denied this right. However I would submit that full time and part time employees are equally denied superannuation contributions for work performed on weekends or outside the spread of ordinary hours. And shift workers are also denied superannuation for work done outside their defined shift. I will go on to make further submissions about the fact that I don't see any reason why the shift work provisions in the current Transport Workers '98 Award, that shift work there is accessible to casual employees. I have given an example - - -

PN944

THE COMMISSIONER: Is it, or does that depend upon their engagement?

PN945

MS WRIGHT: Yes, I can talk about that, about their engagement. Just before I get to that though I have given an example at paragraph 18 of our written submissions, that demonstrates how - if the union's application was granted it will cause an anomaly whereby part time employees would be unfairly disadvantaged to casual employees, and that is just talking about when they work outside the spread of hours or on the weekend.

PN946

In the labour hire industry it is not uncommon for casuals to perform work for more than one employer, and if the union's application is granted a casual employee could work for several different employers in one week and receive superannuation for more than 38 hours worked in that work.

PN947

THE COMMISSIONER: Is there any reason why they shouldn't if they are ordinary hours?

PN948

MS WRIGHT: The union's application says that they get - they will be paid superannuation contributions for the first 7.6 hours per day, or 38 hours per week, regardless of when it is worked. So if they were working for several different employers they would be working more than 7.6 hours a day and 38 hours a week. However - - -

PN949

THE COMMISSIONER: That is not inconsistent with ARTIO3, is it, if they are no covered by an award? If someone work - - -

PN950

MS WRIGHT: If they are no covered by an award, no. If there is no award - - -

PN951

THE COMMISSIONER: If they were not covered by an award, and they were working for a labour hire company, and they were working as a casual for that labour hire company they would be entitled to nine per cent for each worked, wouldn't they?

PN952

MS WRIGHT: That's right, and they wouldn't - - -

PN953

THE COMMISSIONER: Whether it be 60, 70, 80.

PN954

MS WRIGHT: They wouldn't be entitled to any overtime for any of those hours though. They could, with no award, they could work 60 hours a week on a flat hourly rate. You did ask earlier in the proceedings about paragraph 9 of ARTIO2, the super guarantee ruling, about non award covered people, and I think that was covered in the Quest decision, which I will address. But the Quest Federal Court decision in the Quest Personnel matter, that referred to non award employees.

PN955

THE COMMISSIONER: I thought the court had actually - - -

PN956

MS WRIGHT: It was about non award employees, and the employer had written, as I understand it, like a letter of offer saying these are the minimum hours that you may be required to work, and then the employer was trying to argue that if people worked beyond those hours it was not ordinary hours and they didn't have to pay super on it. Which is - - -

PN957

THE COMMISSIONER: What was the result?

PN958

MS WRIGHT: The Federal Court said no, you can't do that in a letter of offer. So they said for that particular work, I think all of the hours super was payable on. But their concern, and I will go to that, was employers setting minimum hours to avoid their obligation to pay superannuation, and I don't think in that case that they were paid time and a half and double time overtime penalties when they worked beyond the minimum hours. Which I think is significant, and I think it is quite different to an award situation.

PN959

Going onto the issue of shift work, under the '98 award, as outlined in our written submissions from paragraph 21 to 28 we submit that casual employees are able to work shift work under the '98 award. Do you want me to take you through those paragraphs?

PN960

THE COMMISSIONER: Yes please.

PN961

MS WRIGHT: I am at paragraph 22.

PN962

The provisions for shift work under the Transport Workers 1998 Award are not substantially different to the shift provisions in other major awards, where casuals work shift work.

PN963

Clause 12.5.1 defines:

PN964

A casual employee as an employee engaged as such and paid by the hour.

PN965

Clause 12.5 does not preclude casual employees working shift work. It does exclude benefits of a number of clauses but clause 34, the shift work provision, is not one of them. The '98 award provides that shift work must extend for at least two weeks, and our submission is that the work must extend must extend for at least two weeks, and that this does not mean that the same employee has to do the work for two weeks. I don't know whether this is - - -

PN966

THE COMMISSIONER: What does that mean?

PN967

MS WRIGHT: That for the work to be shift work, defined as shift work, it has to run, so the shift has to run for at least two weeks. That is so that you don't use - - -

PN968

THE COMMISSIONER: That is what I thought.

PN969

MS WRIGHT: - - - avoid overtime. But it doesn't mean that person A has to work each of those shifts for two weeks. Just so long as the shift as a - - -

PN970

THE COMMISSIONER: I don't know that that is necessarily important.

PN971

MS WRIGHT: I have got a case that does refer to that principle - - -

PN972

THE COMMISSIONER: One interprets the award accordingly?

PN973

MS WRIGHT: It is based on the Metal Industry Award, but it is talking about interpretation of a provision in there about short shifts.

PN974

THE COMMISSIONER: Who made that decision?

PN975

MS WRIGHT: It is very old. It is the decision of the chairman of the Board of Reference, in relation to the Metal Industry Award.

PN976

THE COMMISSIONER: I don't think it is all that high up the food chain, though, in terms of reasoning isn't it?

PN977

MS WRIGHT: I mean our organisation hasn't found anything more recent on the point, and it has always been our interpretation in talking about shifts - - -

PN978

THE COMMISSIONER: So that the chairman of the Board of Reference didn't take any notice of the Act's interpretation, I think which was an award is to be interpreted as meaning the singular and the plural so that - it is a bit of a dodgy decision isn't it?

PN979

MS WRIGHT: Well to me it makes sense, because the purpose - my understanding of the purpose of these provisions is to avoid using - it is to
avoid - - -

PN980

THE COMMISSIONER: I beg your pardon, I am going to have to break in to go back to one of these industrial disputes that I have placed into a sort of limbo situation in a video link in another room briefly, and then rejoin. It is only going to take me about five or ten minutes. Is it convenient to adjourn and have an earlier lunch, and return at that time?

PN981

MS WRIGHT: At what time sorry?

PN982

THE COMMISSIONER: Let us say a quarter to two, or something of that nature. Why I immediately baulked at the chairman of the Board of Reference's decision was that it seems to me that if you - from what I recollect you have recited a clause that said casual employees can be employed on shift work but for not less than two weeks, and I understand what you are saying is that the chairman decided that that didn't mean any particular employee. That meant any employee could be employed on a shift of two weeks' duration. Which meant that if you had - if it was every day you could have 14 different employees work on that shift.

PN983

MS WRIGHT: And it would still be a shift.

PN984

THE COMMISSIONER: It would still comply with the award.

PN985

MS WRIGHT: Yes, but the way it is written in the award - you may have misunderstood me. The bit about the two weeks is under the definition of shift work, not under the issue to do with casuals working shift work.

PN986

THE COMMISSIONER: Yes but isn't the award to be read both singularly and plurally? So in relation to an individual employee, how does the award apply?

PN987

MS WRIGHT: In relation to what defines a shift worker, I better just look at the wording.

PN988

]THE COMMISSIONER: But the clause applies to an employee, does it not?

PN989

MS WRIGHT: The clause, let me just look at that. Sorry, clause 34.

PN990

THE COMMISSIONER: This is the Metal Industry Award is it?

PN991

MS WRIGHT: No, no. The Transport Workers Award.

PN992

THE COMMISSIONER: But you are drawing - - -

PN993

MS WRIGHT: I am drawing - - -

PN994

THE COMMISSIONER: You are drawing the interpretation from - - -

PN995

MS WRIGHT: The metal award, yes, because of the wording.

PN996

THE COMMISSIONER: Which clause?

PN997

MS WRIGHT: But in the Transport Workers Award, 34.1.7 says:

PN998

Shift work means work extending for at least two weeks and performed either in daily recurrent periods wholly or partly between the hours of 6.30 p.m. and 8.30 a.m.

PN999

THE COMMISSIONER: Then you insert that into the context of what? That is a definition isn't it?

PN1000

MS WRIGHT: That's a definition for shift - - -

PN1001

THE COMMISSIONER: So you have got to put that into a clause now, to make it meaningful, haven't you?

PN1002

MS WRIGHT: For work to be shift work the work has to extend for at least two weeks, within that spread of hours. But my submission is that that doesn't mean that the work has to be done by the same individual employee - - -

PN1003

THE COMMISSIONER: I think that is the issue, because you have to go put the definition into a context haven't you? The purpose of the definition is to give those words a particular meaning when they are used in context within the award. That is a primary function isn't it? So we go back to the casual employee. What are the relevant terms? Are there terms that say casual employees can be employed on shift work?

PN1004

MS WRIGHT: It doesn't talk about casual employees at all, under the shift work clause, but under the casual employment clause it excludes them from certain provisions, and it doesn't exclude them from the shift work provision.

PN1005

THE COMMISSIONER: What are the shift provisions which are relevant then? There must be a provision in the award that says an employee may be employed on shift work. Isn't that right?

PN1006

MS WRIGHT: Yes.

PN1007

THE COMMISSIONER: Can you see the point that I am making? If the clause says an employee may be employed on shift work it is shift work as defined by the award, and it is the words:

PN1008

an employee - - -

PN1009

MS WRIGHT: Well it doesn't say - - -

PN1010

THE COMMISSIONER: Where are the shift work provisions?

PN1011

MS WRIGHT: Clause 34.

PN1012

THE COMMISSIONER: Which page of the award? In any event let me just explain to you what I mean by why I am so leery of that particular conclusion that you have mentioned that the Board of Reference came to. The purpose of the definition is for use within the context of the clauses of the award which prescribe the terms and conditions of employment. If there is a term that says an employee may be employed as a shift worker, the operative words are an employee, that I am drawing your attention to. So that the employee may be employed on a shift extending for bla, bla, bla. It is an employee, it is not 14 employees on each day of the two weeks of the shift.

PN1013

MS WRIGHT: But it talks about an employee may be engaged on a shift, but then the definition is of shift work. Now for the shift work to be defined as shift work, the work has to run for at least two weeks.

PN1014

THE COMMISSIONER: Yes, well, what I would say to you is that the use of the words, an employee, are compelling reason to suggest that that definition of shift work is to be considered in relation to an employee.

PN1015

MS WRIGHT: Commissioner with respect - - -

PN1016

THE COMMISSIONER: Not any number of employees.

PN1017

MS WRIGHT: With respect. For example, part time employees, I would argue, could access shift work, and it may be that they may work an afternoon shift on Monday, Tuesday, Wednesday each week. My submission is that the award doesn't require that the individual employee has to work every day of the week for it to be shift work.

PN1018

THE COMMISSIONER: I am only concerning myself with the purpose of an employee, who is employed on shift work, and if the award says an employee may be employed on shift work then it means an employee, that is a specific employee.

PN1019

MS WRIGHT: But it does have - - -

PN1020

THE COMMISSIONER: Doesn't it use those words?

PN1021

MS WRIGHT: It doesn't have those words.

PN1022

THE COMMISSIONER: I thought that is what you just said, an employee?

PN1023

MS WRIGHT: No.

PN1024

THE COMMISSIONER: What does it say? Does it say employees?

PN1025

MS WRIGHT: Yes.

PN1026

THE COMMISSIONER: Well then it is to be read in the singular as the plural.

PN1027

MS WRIGHT: Sorry, I am just not sure where - - -

PN1028

THE COMMISSIONER: Anyway, best deal with this after lunch.

<LUNCHEON ADJOURNMENT [12.52 PM]
<RESUMED [1.47 PM]

PN1029

THE COMMISSIONER: Ms Wright.

PN1030

MS WRIGHT: Commissioner Lewin over the adjournment I have had a chance to think about this and I wonder whether it is necessary to go into the detail of the shift work provisions. I mean I am happy if you think it is necessary, but I suppose - in Mr Moore's submission he has stated that more than 60 per cent of casual employees have been in their employment for in excess of 12 months, and that of these employees half work set days. And at paragraph 52 of the summary of the union's submissions they state:

PN1031

That this evidence is of assistance in the present matter as it identifies or confirms- - -

PN1032

And I am quoting from their summary of written submissions:

PN1033

The likelihood that a considerable number of casual employees work regular shifts outside of the award spread of hours.

PN1034

So on that basis, regardless of our difference of opinion about the interpretation of the shift provisions, if casuals are working a regular shift outside the spread of hours I don't think the union would disagree that there would be access there to the shift provisions. And I am not sure whether, for the purpose of what we are here for, the union's application that debating the ins and outs of how the shift work provisions apply may not be necessary.

PN1035

THE COMMISSIONER: It is up to you. I will leave it to you.

PN1036

MS WRIGHT: I just don't want to get caught up in technical arguments about that when it may not be necessary, for the purpose of this application. Because on the basis of the union's own submissions they have said that there are a lot of regular casual workers working regular hours, and our submission is that there is access to shift work provisions under the award. And as we have indicated, that if there is an anomaly where there is a group of casual employees who are working regular shifts outside the spread of hours, then we say that the shift work provisions should be utilised and if the award is deficient in its shift work provisions, in allowing access to casual employees then I would submit that a better way to deal with this issue would be to increase the access to casual employees of the shift work provisions, and thereby allowing casuals to work within the ordinary spread of hours as shift workers, and in turn they would be entitled to superannuation payments.

PN1037

I have done some calculations to compare the difference between a worker working outside the spread of hours on shift work, and working outside the spread of hour on overtime.

EXHIBIT #AIG3 WAGE CALCULATIONS

PN1038

MS WRIGHT: This is an example of the rate of pay for a casual working on an afternoon shift, and the rate of pay for a casual working on a night shift, and then a comparison of those shifts compared with if they are paid overtime rates. If you look towards the bottom of the first page, where it says example of afternoon shift compared to overtime rates, a casual working from 6.30 p.m. till 12 midnight would be paid, on a shift, would be paid five hours at $19.65, which is the - up the top it shows the hourly rate plus the casual loading, plus an afternoon shift loading. They would also get nine per cent super on that total rate. So the total for the shift would be $107.09. Doing the same hours on overtime they would be paid $130.97 without super. Over the page with a night shift. Again, a five hour shift from 12.30 a.m. to 6.00 a.m. Five hours on a night shift penalty would, including super, be $116.52, whereas on overtime without super would cost an employer, or receive to the employee $130.97. So what I am trying to show here is that it is more expensive for employers to pay overtime penalties than shift penalties. And accordingly we submit that it is unfair for them to, in addition to overtime penalties, to be paying superannuation on those hours. My primary submission is that the access is already there under the shift provisions, for these regular casuals to work shift work. But, alternatively, if the award needs to be made more accessible to casuals to access shift provisions, we submit that that is a better way to deal with the issue of casuals having access to superannuation.

PN1039

Just in relation to the Quest decision, and I am not sure that I need to go into this in any great detail, but Mr Moore did refer to the decision of Quest Personnel Temping Pty Ltd v The Commissioner of Taxation, and I just wanted to say that I think the Quest case was quite a distinct - different circumstances that are before the commission today, because it was about award-free employees, and Justice Gray differentiated the circumstances upon which the Quest case was based, from the interpretation which would most likely apply in other cases, where employees are covered by awards which prescribe a specific number of ordinary hours. I can quote from that if you like, but basically his concern was with employers, where there is no award, setting ordinary hours of work, setting an artificially low minimum hours to avoid paying superannuation beyond those hours, and it wasn't a case where overtime penalties were paid for those additional hours. It was just a case where the employees agreed to work minimum hours and could agree to work more hours beyond that.

PN1040

In relation to the effect of the union's application, if granted, we say it would be an increase in cost to employers, of engaging casual employees, and this increase would be on top of substantial recent cost increases arising from the variations to casual loadings in most of the transport workers awards, up to the 25 per cent casual loading. We say this would significantly reduce the ability of employees to utilise this legitimate form of labour flexibility. We say the impact of such costs would be particularly heavy on small business, and on the labour hire sector. Because the labour hire sector employs a much higher percentage of casual employees than most, if not all industries. Labour hire companies have provided labour to their clients based upon superannuation costs they understood would be incurred, and the labour hire industry operates on very low margins. We submit that granting the union's application - - -

PN1041

THE COMMISSIONER: Have those labour hire companies responded to this award?

PN1042

MS WRIGHT: Skilled Engineering is one of the companies that I am representing, and - - -

PN1043

THE COMMISSIONER: They are a respondent by virtue of their membership of the organisation.

PN1044

MS WRIGHT: Yes. My understanding, I think, is that labour hire - they do follow the award. I am just not sure if they are individually sited or if it is through membership.

PN1045

THE COMMISSIONER: I don't think a lot of labour hire companies are sited as respondents to this award?

PN1046

MR MOORE: I don't think so separately.

PN1047

THE COMMISSIONER: No. I think if there is any respondency it is more than likely through their membership of employer organisations.

PN1048

MS WRIGHT: I am no sure, off the top of my head.

PN1049

THE COMMISSIONER: Which is, of course, a matter within their control.

PN1050

MS WRIGHT: I would have to check if they are individually sited, I don't know. Granting the union's application, we say, would create anomalies between the remuneration of casual and permanent employees. We say many casual employees earn more than their full time counterparts by virtue of the number and spread of hours worked, and the casual loadings which apply under awards. We say the union's proposed variation would widen the gap.

PN1051

Finally, if the union's application is granted it could set a precedent for similar variations in other awards, and this would have enormous cost implications for employers, which could have negative effects on employment levels.

PN1052

THE COMMISSIONER: It would be impossible to establish parity between casual and full time employees, in terms of income, wouldn't it? I mean there is always going to be a differentiation. Somebody works 38 hours as a full time employee, and a casual works 38 hours, a casual is going to get 25 per cent more. There is always going to be anomalies in terms of the actual pay slip, aren't there?

PN1053

MS WRIGHT: That's right. I guess we are just saying that if you were to pay superannuation on hours where they are already getting overtime penalties that that would create further advantage to the casual employment, compared with the permanent.

PN1054

THE COMMISSIONER: Which employees are you referring to, in that situation? Let us take employee A and employee B. Employee A is an employee who is an ordinary time continuing employee who works, say, a night shift and enjoys all of the terms and conditions of employment, of full time employment such as paid annual leave, presuming that they have been there for three months, protection under the Workplace Relations Act against - well at least a right to make an application for unfair dismissal. I mean there is a long list of benefits aren't there. But then on the other hand there is the casual employee, instead of receiving those benefits, receives a higher income - - -

PN1055

MS WRIGHT: Yes, I am not talking about really - well that is true. The employee B, the casual employee, receives the loading. When they work outside the ordinary hours they receive the overtime penalty. Whereas a shift worker gets a 30 per cent penalty. So they are getting a greater penalty, and if you look across other awards, the Transport Award is a little bit different, in that when they work overtime their casual loading goes from 25 per cent down to 10 per cent, but in a number of awards that doesn't happen. So you have got a - - -

PN1056

THE COMMISSIONER: But we have to concern ourselves with this award?

PN1057

MS WRIGHT: Yes. Okay, with this award the casual employee is getting an overtime penalty in addition to their casual loading and then getting superannuation - - -

PN1058

THE COMMISSIONER: So if the full time employee is working overtime there is already an anomaly isn't there?

PN1059

MS WRIGHT: Well - - -

PN1060

THE COMMISSIONER: Of 10 per cent.

PN1061

MS WRIGHT: Yes. There already is the anomaly of the casual loading, that's right, and this would add - - -

PN1062

THE COMMISSIONER: If you describe it as an anomaly, in a strict sense of equity, as opposed to a simple difference. That type of anomaly.

PN1063

MS WRIGHT: The main anomaly, if you like, or inequity, that we are talking about is when you have two people working side by side, they both work beyond the spread of hours side by side, whether it be on a Saturday or in the evening, or early, early in the morning, they both get time and a half and double time. The casual gets the casual loading, but then the casual gets super for those hours but the permanent employee doesn't.

PN1064

THE COMMISSIONER: But the permanent employee gets 38 hours worth of super that the casual employee does not get any of. Isn't that right?

PN1065

MS WRIGHT: Depending on what hours they work.

PN1066

THE COMMISSIONER: I mean that is the sort of anomaly from the other perspective isn't it?

PN1067

MS WRIGHT: Yes, and I guess, again, we come back to that argument that the 38 hours that they work doesn't attract any overtime penalty. Whereas if the casual is working theirs outside the spread of hours they are getting double time and a half and double time, which is far greater than the nine per cent super.

PN1068

THE COMMISSIONER: If the weekly hire employee was engaged exclusively outside the spread of hours but was not engaged on the shift work, then that employee would receive both the superannuation benefits and the overtime rate would they not?

PN1069

MS WRIGHT: Well, if the weekly employee was full time they would have to be given 38 hours, within the ordinary spread.

PN1070

THE COMMISSIONER: If we take employee A and employee B once again, and employee A is the weekly paid employee engaged on a weekly contract of employment with an entitlement to payment for 38 hours ordinary time. But if those 38 hours were rostered outside the spread of hours they would be entitled to the overtime penalty in addition, would they not? And they would be entitled, would they not, to superannuation, or would they?

PN1071

MS WRIGHT: It is a difficult question Commissioner. I don't know the answer. Because if they were a part time employee they wouldn't get super for the work outside the spread, and you know with this conversion of permanence to casuals that issue has arisen, where a casual might work their regular hours outside the spread and then the company saying how do we offer them permanent work if it is outside the spread. And if it is regular fixed hours then it can be shift work, and then it is ordinary hours and they will get their super, but - - -

PN1072

THE COMMISSIONER: So the practice is to convert casual employees, where they are converted, to shift employees? Say, night shift employees for example.

PN1073

MS WRIGHT: It would have to be regular work. But if you had a weekly employee being part time working outside the spread of hours, and you are not engaging them on shift work, then they wouldn't be - I would say they wouldn't be entitled to super.

PN1074

THE COMMISSIONER: They wouldn't be entitled to superannuation.

PN1075

MS WRIGHT: I would say not, because it is overtime. Weekly is a bit more difficult because weekly has to get - - -

PN1076

THE COMMISSIONER: Isn't that really an illustration of what the spread of hours is really all about, and that is to define what are sociable hours of work and what are not?

PN1077

MS WRIGHT: Yes.

PN1078

THE COMMISSIONER: That it is a little bit problematic to actually bring into the question of access to superannuation the question of whether or not you work sociable or unsociable hours.

PN1079

MS WRIGHT: But that is where - we would argue that unsociable hours worked on a regular basis is compensated by shift penalty which is a lesser cost to employers than overtime penalties. That is what we would say. It is not just because they work unsociable hours that they are not getting superannuation, it is because the way they are working them is as overtime, at that higher penalty.

PN1080

THE COMMISSIONER: I appreciate you say that, really, it is appropriate to say that the amount of overtime penalty for the unsociable hours should also be considered, in addition to compensation for those unsociable hours, compensation for non access to superannuation. That is about 80 per cent of your case isn't it?

PN1081

MS WRIGHT: Yes, yes. Because there is provision in the award for unsociable hours to be compensated by a shift penalty, and no one is dispute that in those circumstances there is entitlement to superannuation.

PN1082

THE COMMISSIONER: But we have got to deal with a situation, have we not, where employees are not engaged as shift workers, they are engaged as casual workers, working unsociable hours and being paid a part of the casual loading and the overtime penalty. That is the category of employee that is affected by this application isn't it? But why should they not have access to superannuation because they are working unsociable hours?

PN1083

MS WRIGHT: Commissioner I don't think that they shouldn't have access because they are working unsociable hours. I think they shouldn't have access because they are getting overtime penalties.

PN1084

THE COMMISSIONER: But aren't they getting overtime penalties for working the unsociable hours?

PN1085

MS WRIGHT: Well, no, not exclusively I would say, because - - -

PN1086

THE COMMISSIONER: So do you say that there is some sort basis upon which I can conclude that the overtime penalty does comprehend compensation for superannuation foregone? Or are you saying that I should say that it will, or does?

PN1087

MS WRIGHT: Yes, yes.

PN1088

THE COMMISSIONER: The latter?

PN1089

MS WRIGHT: Given that the way that things unfolded in the award, as you have stated, that if the provision for ordinary hours and overtime came before superannuation, then I couldn't say that when that was drafted it was considered that - superannuation wasn't a consideration. But I would say - - -

PN1090

THE COMMISSIONER: Let us say I was wrong about that, for example, and that in fact the overtime penalty applicable to work performed outside the spread of hours by casual employees actually post dates award superannuation in the first instance, is there - have you had the opportunity to look at any decisions, or the history of the award in relation to the reasons, if any, that were ever expressed for the inclusion of the overtime rates? What they were designed to compensate for? Such as to enable you to make a submission that they were designed to provide compensation for lack of access to superannuation.

PN1091

MS WRIGHT: No, I haven't done that research. I don't know the answer to that. I suppose what I am looking at is, there seems to be a standard in this award, of 30 per cent for night shift, and 15 per cent for afternoon shift. Sorry. It might be slightly different in this award. I think it 17 and a half per cent. But there are percentage amounts that compensate people for the disability of working unsociable hours, in the form of a shift, and overtime penalties are greater than those. And I think that that is significant costs on employers, and I think in determining that additional expense to employers, or benefit to employees should be provided, given that weekly employees don't have that entitlement. I think the additional costs of overtime penalties is a significant issue.

PN1092

THE COMMISSIONER: In effect what you are saying is that it is not possible to establish that as an explicit consideration in the determination of the existing overtime penalties of time and a half for certain scenarios outside the spread of hours, and double time for certain other scenarios, it is not possible to establish that these were necessarily explicitly designed to compensate for lack of access to superannuation. You are not putting that before me.

PN1093

MS WRIGHT: I haven't got any - - -

PN1094

THE COMMISSIONER: You don't necessarily say there is anything upon which I could infer that that was true. Can you point to anything upon which I could infer that that was true, that was the case?

PN1095

MS WRIGHT: It would seem to me that when the super guarantee charge legislation was drafted, and it referred to ordinary time earnings, my understanding of what that means is not earnings upon which overtime payments are made, and my reading and Australian Industry Group's reading of the super guarantee charge ruling, which is ARTIO2, was that the intention of the legislation was not to include overtime.

PN1096

THE COMMISSIONER: I think you are addressing a different point. If I just revise the question. Is there anything that you can refer to, from which I could infer that the overtime provisions of the award, the penalties prescribed for work outside the spread of hours, is designed to compensate for lack of access to superannuation?

PN1097

MS WRIGHT: I haven't researched it, so I am not aware of any specific background to the award - - -

PN1098

THE COMMISSIONER: So there is no material, no concrete material that you can point to, and there is no basis for an inference of that kind that you can point to. It follows, doesn't it, that what you are really asking me to do is to say that because the employees receive time and a half and double time for their hours outside the spread of hours, as casual employees, that that should be seen as enough to compensate both for the unsociable hours and, among other things, or perhaps exclusively, lack of access to superannuation?

PN1099

MS WRIGHT: Yes, and I think that that is the case given the context, and the fact that all other employees, weekly employees, when they work overtime outside the spread of hours they also get time and a half and double time, and don't get superannuation, and the way that the superannuation legislation refers to ordinary hours.

PN1100

THE COMMISSIONER: The difference of course is that they already have the superannuation by the time they start working the overtime.

PN1101

MS WRIGHT: In the case of full time employees they would have 38 hours. In the case of part time employees they may not have as much as the casual may get. If you are - - -

PN1102

THE COMMISSIONER: They will have superannuation in relation to those ordinary times - - -

PN1103

MS WRIGHT: Ordinary hours, yes.

PN1104

THE COMMISSIONER: - - - hours of their part time employment engagement?

PN1105

MS WRIGHT: But you could have a casual and a part time employee working the same hours. They may work four ordinary hours per day, and two outside the spread. In that situation a casual employee is going to get, if the union's application is granted, they are going to get six hours worth of superannuation per day, and the part time employee will only get four hours a day. Which I think creates a further inequity.

PN1106

THE COMMISSIONER: Yes I understand that.

PN1107

MS WRIGHT: That concludes my submissions. I did want to also point out the support of the other employer bodies, but the ARTIO has done that. And I understand since we were last before you Commissioner that you would have received something from the Western Australian Chamber of Commerce and Industry.

PN1108

THE COMMISSIONER: I have.

PN1109

MS WRIGHT: They sent a fax saying, yes, saying that they support our submissions.

PN1110

THE COMMISSIONER: Thank you Ms Wright. Mr Moore do you want to do it now, or would you be amenable to doing it in writing?

PN1111

MR MOORE: I am amenable to either course Commissioner.

PN1112

THE COMMISSIONER: Do you have any objection to the union's reply being filed in writing?

PN1113

MS WRIGHT: No Commissioner.

PN1114

THE COMMISSIONER: Very well. Thank you Mr Moore. I will provisionally reserve my decision, unless there is anything you want to put to me right now.

PN1115

MR MOORE: The only question is what timeframe would you like the - - -

PN1116

THE COMMISSIONER: I think am pretty much in your hands really, in the circumstances. I don't think the employers are any hurry.

PN1117

MR MOORE: I might get the benefit of looking over the transcript before I finalise the submission.

PN1118

THE COMMISSIONER: Do you want to do it by the end of the month?

PN1119

MR MOORE: Certainly.

PN1120

THE COMMISSIONER: Would you have any objection to it taking that long?

PN1121

MS WRIGHT: No.

PN1122

THE COMMISSIONER: Any time between now and the end of the month. Thank you Mr Moore.

<ADJOURNED INDEFINITELY [2.15 PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #ARTIO1 PN620
EXHIBIT #ARTIO2 AUSTRALIAN TAXATION OFFICE RULING94/4 PN636
EXHIBIT #ARTIO3 EXTRACT FROM TAX OFFICE WEB SITE PN707
EXHIBIT #ARTIO4 CIRCULAR OF VICTORIAN TRANSPORT ASSOCIATION PN719
EXHIBIT #AIG2 COMPARISON BETWEEN MORNING WORK AND AFTERNOON SHIFT WORK EARNINGS PN939
EXHIBIT #AIG3 WAGE CALCULATIONS PN1037