C2005/5139, Transcript of Proceedings [2005] AIRCTrans 2407 (25 November 2005)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 13426-1

COMMISSIONER LAWSON

C2005/5139

APPLICATION BY LIQUOR, HOSPITALITY AND MISCELLANEOUS UNION-NORTHERN TERRITORY BRANCH
s.113 - Application to vary an Award
(C2005/5139)

DARWIN

3.34PM, MONDAY, 14 NOVEMBER 2005

THE FOLLOWING PROCEEDINGS WERE CONDUCTED VIA VIDEO CONFERENCE AND RECORDED IN DARWIN

PN1

MR G HULL: I appear on behalf of the LHMU.

PN2

MS ROBERTS: I appear for the Chamber of Commerce Northern Territory.

PN3

MR MALONEY: I seek leave to appear as agent on behalf of the Australian Child Care Centres Association Registered Industrial Organisation of Employers.

PN4

THE COMMISSIONER: Thank you, Mr Maloney. Is there any objection to
Mr Maloney appearing, Ms Roberts, Mr Hull?

PN5

MS ROBERTS: No.

PN6

MR HULL: No.

PN7

THE COMMISSIONER: No objection, then leave is granted, Mr Maloney.

PN8

MR MALONEY: Thank you.

PN9

THE COMMISSIONER: The application before the Commission is an application filed by the LHMU pursuant to section 113 of the Workplace Relations Act. It seeks to vary the Child Care Industry (NT) Award 2003 concerning the safety net review 2005 decision, classification schedules and to retain a nexus with the ACT equivalent award and classification structure. The variations that are sought are consistent with Commission decisions that are printed in PR954938, 957259 and 957914. The application seeks to retain a historic nexus between the Northern Territory award and the comparable award covering children services and child care employees in the ACT.

PN10

By faxed letter to the Commission dated 10 November, Mr Maloney of Livingtons Australia on behalf of the Australian Child Care Centres Association Industrial Organisation of Employers, sought to participate in today’s hearing by video link. I note for the record receipt of covering letter from the LHMUs national office from Mr Swancott to the Commission dated 2 November 2005, giving a brief outline of the application together with a relevant extract from the Full Bench test case decision in PR954938 of 13 January 2005 together with a further revised draft order. Well, Mr Hull, you’re representing the applicant in these proceedings. What do you have to say about it?

PN11

MR HULL: Thank you, Commissioner. Just a point of clarification. The revised draft order that you have, Commissioner, is it dated 11 November?

PN12

THE COMMISSIONER: It hasn’t a date on the front page.

PN13

MR HULL: I have a further revised.

PN14

THE COMMISSIONER: Well this is titled Further Revised Attachment A and it’s attached to Mr Swancott’s correspondence to myself dated 7 November.

PN15

MR HULL: Yes. Very good, Commissioner. The new draft order contains, after some extensive discussions and negotiations with the chamber, some changes.

PN16

THE COMMISSIONER: All right. Well, let me put to one side the further revised attachment A. That’s replaced by a document which is titled Revised Attachment A 11 November 2005. Mr Maloney, do you have that document that I’ve just referred to?

PN17

MR MALONEY: Yes, Commissioner, courtesy of favour of Ms Roberts I do, thank you.

PN18

THE COMMISSIONER: Okay. Well, what I'll do for identity purposes, are you tendering this document or are you just going to address it at this stage? It’s a draft order.

PN19

MR HULL: It is a draft order.

PN20

THE COMMISSIONER: Do you want me to mark it?

PN21

MR HULL: Yes, I think that’s appropriate.

PN22

THE COMMISSIONER: I'll mark the document which is now identified as Revised Attachment A 11 November 2005 and is a draft order with respect to this matter.

EXHIBIT #LHMU1 REVISED ATTACHMENT A 11 - DRAFT ORDER DATED NOVEMBER 2005

PN23

MR HULL: Thank you, Commissioner. Commissioner, this is an application to flow to the Child Care Industry (NT) Award 2003, a new classification structure and properly fixed rates of pay determined by a Full Bench of the Commission as appropriate for child care workers in the Australian Capital Territory of Victoria. The NT award has had a historical nexus with the Child Care Industry (ACT) Award. In fact the two awards were considered together for structural efficiency principal purposes by a Full Bench of the Commission in 1994. A new common classification structure was inserted into the NT and ACT awards as part of the matter which can be seen at print J4316.

PN24

THE COMMISSIONER: Just a moment, Mr Hull. There’s not something quite right about that. A new common classification structure between the NT and?

PN25

MR HULL: ACT awards.

PN26

THE COMMISSIONER: And when was that common classification structure introduced? I think you were about to give me a print number.

PN27

MR HULL: 1990, Commissioner.

PN28

THE COMMISSIONER: Thank you. Can you just give me the print number again?

PN29

MR HULL: J4316.

PN30

THE COMMISSIONER: Thank you.

PN31

MR HULL: Commissioner, the LHMU applied in 2003 to vary the ACT award to introduce properly fixed minimum rates. The application made pursuant to section 88A and 88B of the Act and the statement principals was made on the basis of the assertion by the LHMU that the rates agreed to in 1994 under valued the work of child care workers having regard to the nature of the work, appropriate external relativities for the requirements of the work and changes in the value of the work since 1994. A similar application lodged in respect of the Children’s Services (VIC) Award 2004 was joined to the ACT award application.

PN32

A Full Bench comprising VP Ross, SDP Marsh and Commissioner Deegan made three major decisions on the claim. These are set out in PR954938 dated
31 January 2005, PR957259 dated 13 April 2005 and PR957914 dated
10 May 2005. In the first of these discussions after extensive evidence led by the LHMU and by the Private Community Sector Employers the Full Bench made a series of findings. These were summarised in part 6 of the Commission’s decision on 13 January 2005 at paragraph 364 of PR954938.

PN33

In the second decision the Full Bench summarised its January decision as follows:

PN34

In our decision we reached two broad conclusions with respect to the claims before us. The first related to work value. In that regard we concluded that we were satisfied that the changes in the nature of the work detailed in the decision constituted a significant net addition to work value requirements within the meaning of the work value principle.

PN35

It goes on.

PN36

The second broad conclusion concerned the proper fixation of rates for the key classification levels in the child ...(reads)... (and the certificate III level in the Victorian Award ) and the C10 level in the Metal Industry Award.

PN37

In its third decision the Full Bench determined a whole dollar time table for phasing in wage increases that resulted from the new properly fixed minimum rates. This time table is set out in paragraph 105 of PR957914 and was as follows.

PN38

THE COMMISSIONER: What was the paragraph number, I’m sorry?

PN39

MR HULL: 105, Commissioner. The time table was set out as such:

PN40

1 July 2005 up to $20 per week, 1 January 2006 up to a further $20 per week
1 July 2006 up to a further $20 per week, 1 January 2007 the balance of any increase required to achieve the appropriate classification rate.

PN41

THE COMMISSIONER: What was that last date?

PN42

MR HULL: 1 January 2007, Commissioner.

PN43

THE COMMISSIONER: Thank you.

PN44

MR HULL: The Full Bench observed at paragraph 107:

PN45

Under the phase in arrangements we have adopted, the majority of the employees covered by the new ...(reads)... Those classified at Levels 3.4 and above will fully translate to the new properly fixed rates at 1 January 2007.

PN46

Paragraph 109 of the Full Bench decision says:

PN47

The arrangements we have adopted give appropriate priority to those employees classified at the lower end of the classification structure and represent an appropriate balance between the competing public interests.

PN48

As a result of the lengthy case and the three decisions the parties to the ACT and Victorian awards agreed on detailed translation arrangements for employees moving from existing award classification wage structures to the new structures and these were contained in orders issued by Commissioner Deegan in June and July 2005. There’s an example in the submission that says, for example, PR959281 and PR960275 in relation to the Children Services (VIC) Award. Commissioner, the current application seeks to reflect the ACT award variation with one important exception, and the exception results from an agreement reached in South Australia between the LHMU and parties to an award of the South Australian Industrial Relations Commission covering child care workers.

PN49

The agreement largely flowed the federal decision to the state sector on the basis of evidence led by the LHMU that the circumstances giving rise to the conclusions and findings of the Full Bench in the ACT, Victoria child care case were largely replicated in that state. The agreement included agreement on recognition in the state award of AQF certificate IV qualifications fixed at 115 per cent rate of the metal trades as in the Metal Industry Award. Application applicable in that state to the out of hours school care workers. The matter of certificate IV recognition was placed on the equivalent of a leave reserved list by the Full Bench, see paragraph 139 and 140 of the decision of 10 May 2005 which is PR957914.

PN50

In its April decision which is PR957259 the Full Bench also referred to the matter in the following terms, paragraph 92:

PN51

Finally, we turn to consider the LHMUs proposal for a Level 3.4 (at 115 per cent or $621.80) to apply to ...(reads)... fully implemented the Union may make application to insert a classification of the type sought.

PN52

The LHMU has identified certificate IV qualified workers who are currently employed in the Northern Territory and seeks to insert a classification description and rate of pay for the levels similar to that agreed in South Australia. It will place sufficient material before the Commission in relation to the Northern Territory to justify the inclusion of the classification relativity and rate of pay. Another difference, Commissioner, between the NT application and the decisions applying to Victoria and the ACT is the timing of the wage increase instalments resulting from the granting of the NT application.

PN53

The LHMU revised draft orders follows the scheme of the phasing in and translation arrangements approved by the Full Bench for the Victorian and ACT awards, but there is commencement dates for each. The time table set out in the LHMUs revised draft order provides for prospective operation of the first instalment and staggered further instalments to align the end dates before the implementation of the new structure in the Northern Territory. There’s still some debate and discussion going on around this.

PN54

THE COMMISSIONER: I note in exhibit LHMU1 which is the draft award there doesn’t appear to be a copy of the schedule D Translation Arrangements. It’s described as attachment 1 hereto and it’s not attached. I was aware that there was a schedule D attached to earlier draft orders, but not to the one that you’ve handed up today.

PN55

MR HULL: You’re quite right, yes. I apologise for that, Commissioner. I don’t know what’s happened to that.

PN56

THE COMMISSIONER: We’ll just go off the record for the moment, but you stay hooked in with us, Mr Maloney.

OFF THE RECORD

PN57

THE COMMISSIONER: Whilst off the record I’ve been conferring with the parties about the attachment to exhibit LHMU1 referred to in item 5. The reference is to a “schedule D Translation Arrangements in terms of attachment 1 hereto”. In other words attachment 1 to what will be the ultimate order varying the award. I’ve been handed up a document now which is titled Schedule D Translation Arrangements (attachment 1) New Wages and Classification Structure Children Services (NT) Award 2005. I will mark that document as exhibit LHMU2 and I’d ask you, Mr Hull, if you could ensure at the conclusion of these proceedings that all parties have the same document, the same corrected document, and I invite you to forward those documents to both Mr Maloney,
Ms Roberts and my office at the earliest opportunity and that can be done electronically I would have thought.

EXHIBIT #LHMU2 SCHEDULE D TRANSLATION ARRANGEMENTS (ATTACHMENT 1) NEW WAGES AND CLASSIFICATION STRUCTURE CHILDREN SERVICES (NT) AWARD 2005

PN58

MR HULL: Yes, absolutely.

PN59

THE COMMISSIONER: Okay.

PN60

MR HULL: Thank you, Commissioner. Commissioner, another difference between the NT application and the decision applying to Victoria and the ACT is the timing of the wage increase. I spoke a little bit earlier about this. We’re still in some discussion with the employer representative about the phasing in procedures, but it’s proposed that 1 December 2005, 1 April 2006, 1 August 2006 and 1 January 2007. There are still some discussion to take place on this. It’s one of, I think, only two outstanding matters. In each case in relation to the phasing in, except for the final instalment date, these dates are after the equivalent dates in the ACT.

PN61

The LHMU is in the process of finalising witness statement aimed at justifying the maintenance of the nexus between the NT award and the ACT award by reference to the skills and responsibilities of child care workers in the NT and by reference to the Full Bench conclusions in the Victoria, ACT case extracted in the attachment to those submissions. These submissions will be filed and served at the earliest possible date. We intend to have our witness statements to you, Commissioner, by next Monday and any other documents that we need to prepare. We’d be looking for a date for a report back to you and we’d also be looking for a date for the employer to supply evidence if any was so desired. If it please the Commission.

PN62

THE COMMISSIONER: Ms Roberts, your responses.

PN63

MS ROBERTS: Thank you, Commissioner. As the application is mainly in line with the Full Bench decisions as already outlined by the LHMU in its submissions the Chamber of Commerce does not object to the application in principle, however do have some concerns regarding the content in some aspects. There were some typographical errors which had been corrected in the new exhibit LHMU1, the final draft that we have, but we do have originally the certificate IV issue was brought up. I’d like to see, obviously, I think the LHMU are going to bring evidence regarding why they should introduce another pay rate for certificate IV, which I'll have to take back to my members, of course.

PN64

Originally the original draft order mentioned a certificate for in food handling. I’ve sort of discovered that there’s really no certificate for in food handling in the Northern Territory or Australia so therefore the LHMU have changed their draft to a more generic clause at 17.3.3 and it says:

PN65

An employee at this level will hold a relevant AQF certificate IV or equivalent and who exercises skills and competencies beyond those required for AQF certificate III in the ongoing performance of the work must be paid no less than the rate prescribed for pay level 3.5.

PN66

So they’ve made it quite generic now and it doesn’t just relate to out of school hours care as it does in South Australia. On the surface of it you’d probably say there’s nothing wrong with that, however for example in level 2 you have gardeners and cleaners. There might be certificate IV in cleaning and gardening. Would that then apply to those particular skills and levels? So I think we’ll probably have to discuss that a little bit further. Maybe we might have to narrow it down to out of school hours care. I’m not sure how you want to do that. Also it’s just come to my attention this morning, unfortunately, we were negotiating on a part time in the Northern Territory Child Care Award at clause 14 there’s actually an additional payment for part timers in the Northern Territory.

PN67

Historically this was a 10 per cent loading that dates back to the beginning of the 1982 award, I think.

PN68

THE COMMISSIONER: Which award is that? It’s not this award, it’s a different award?

PN69

MS ROBERTS: No, it’s the grandparent award, I suppose if you want to call it.

PN70

THE COMMISSIONER: The predecessor, is it?

PN71

MS ROBERTS: Yes. I was just going back to the history on how it happened. So it seems to be there from the beginning. However, I found a decision this morning, it was print K6752 dated 23 February 1993 and it was by Commissioner Lange in Perth and it actually discussed, I believe just on quick reading, that the employers at the time were tyring to remove the 10 per cent loading for part timers for several reasons and it says in the end the decision was, in short, the 10 per cent loading should be converted to the cash equivalent within the award, however it should not be subject of future wage adjustments so that over an extended period of time it will constitute a decreasing proportion of total wages.

PN72

So therefore the 10 per cent loading was then converted to a table format and now in the draft order we negotiated to put it back to the 10 per cent. But now seeing on this decision we are going to have to review that again and maybe put it back to the table format at least and discuss that. So maybe not go towards that 10 per cent, we’ll go back to the table as it was intended by Commissioner Lange in his decision, or her decision, to phase it out. The decision, actually it’s just come to our attention, that even though the decision said that it should not be subject to future wage adjustments it actually has been subject to future wage adjustments from every year since 1997 to 2005. So I think it’s just been a huge mistake that’s been accumulated over the years, unfortunately.

PN73

I’ve emailed the union this morning in regards to that so I haven’t really got into major discussion yet regarding that one. Then lastly with regards to the phasing in periods I’d just like to mention that the ACT award and Victorian award, they had both phasing in periods of 18 months, the South Australian award had a phasing period of 17, the LHMU are proposing the Northern Territory award to be phased in over 13 months. My initial feedback from members have been that they would obviously prefer the phasing period of 18 months due to the cost burden of their organisation. One member had indicated that there’d be an increase of $20,000 to their organisation.

PN74

So I suggested that the phasing period by over 18 months instead of 13 as suggested by the union.

PN75

THE COMMISSIONER: I think Mr Hull recognised that that was a matter that had yet to be finalised.

PN76

MS ROBERTS: Yes. I have no further comments at this stage.

PN77

THE COMMISSIONER: All right. Thank you, Ms Roberts. Do you envisage following the filing and serving of statements from the LHMU that you would need time to respond to those in kind or with similar affidavits or other evidence and if so what sort of period of time would you need for that?

PN78

MS ROBERTS: Hopefully we can sort most of it out between each other and hopefully we won’t have to, but a week after there if it need be a week after their submission? If we require a week or two, but hopefully we’ll be able to sort these things out.

PN79

THE COMMISSIONER: All right. Thank you, Ms Roberts. Mr Maloney, you obviously have an interest in this through your registered organisation of employers. What’s their position with regard to the application?

PN80

MR MALONEY: Yes. Thank you, Commissioner. Commissioner, this is the first time this matter’s been before the Commission?

PN81

THE COMMISSIONER: Yes, it is. Well, certainly the first time it’s been before me and I’m not aware that it’s been before any other member of the Commission.

PN82

MR MALONEY: Commissioner, the organisation that we represent, the Australian Child Care Centres Association, has its members under the federal Workplace Relations Act, for those employers who operate in the private child care sector and its - sorry, it’s members are employers who operate long day care centres. They’re not the typical community kindergartens or pre-schools per say. We certainly do have an interest in this matter as we have had an interest in all of the cases both before the AIRC and the various state tribunals as the applications have moved around the countryside.

PN83

I think to put it fairly bluntly, Commissioner, we can probably accept in principal that the ACT and Northern Territory awards had previously had some form of link, or call it nexus. Certainly that was the case back in 1989, 1990 when there was a significant change to the ACT and Northern Territory awards which then precipitated a whole change in various awards around the countryside including the Victorian and other state awards at the time. Now as I say we can probably accept that in principal. I would envisage that the union, in a similar fashion to what Mr Hull’s counterpart in South Australia did, is probably be able to provide the Commission with sufficient information, evidence and witness statement to support the claims and we’d probably be in a position then of acknowledging that
that meets the test and it probably meets the standards that were found by the Full Bench in its series of decisions in Victoria and ACT matters.

PN84

There certainly is a slight change in the classification structure. If I can address that firstly. The AQF certificate IV level only appeared in South Australia as a result of a regulatory requirement in that state for person who charge for outside of school hours care service which is run as a discrete dedicated service, usually obviously in a school or other locations and those persons had to hold that qualification. That was the only reason why it was put into the South Australian award and the variation that was issued by Commissioner Dangerfield, the classification descriptor purely relates to certificate IV in outside school hours care.

PN85

So we’d probably argue that it may be inappropriate to include that for all other holders of AQF certificate IV and I think Ms Roberts has already addressed that question anyway. We don’t have any real difficulty with the proposal by the LHMU to provide the Commission with witness statements and material by Monday the 21st. We would probably say we would like an opportunity to consider that, get some instructions and respond without dragging our feet too much. We’d also seek an opportunity to put submissions to the Commission relating to operative date and phasing in. And those two issues are reasonably critical, Commissioner, because this is a relatively highly competitive industry, but also extremely price sensitive.

PN86

The Commission may or may not be aware but the federal government pours a lot of money into this industry by way of subsidy to the parents for child care benefit, or CCB. That’s administered by the centres on behalf of the parents and on behalf of the government and that pays a significant amount of the fees for persons who are lower to middle income earnings, but serving off the higher income earners. And the gap then is between what the CCB gives and what the centre actually charges for its fees. Our estimation of the ACT, Victorian case was that there were going to be some significant increases and we’ll put argument to the Full Bench about that and we would probably seek to put not as much information, but similar information to yourself, Commissioner, about that particular issue.

PN87

I’d refer the Commission initially to a document, which I think Ms Roberts might have a copy of, and viable from the parties which is a LHMU discussion paper. It was actually produced before the Full Bench before Ross VP and the other members of the Full Bench which it was a discussion paper dated March of this year and that in fact said that by accepted calculations the union claim was going to cost $25 a week per child per place and the employers indicated that on their costings, which were not disputed, fees were going to go up by $4 to $6 per child per day. Average fees, Commissioner, are somewhere around about $50 a day mark. So that’s reasonably significant.

PN88

THE COMMISSIONER: I’m sorry, who’s estimate was it that the fees would increase by $25 per child per day?

PN89

MR MALONEY: The LHMU.

PN90

THE COMMISSIONER: Yes, but then you said something about a lot lesser figure.

PN91

MR MALONEY: No, in that same paper the LHMU accepted the employers figures which said that the fees would increase by $4 to $6 per day. So anywhere between $20 and $30 per week. So in other words our figures didn’t disagree with each other and they are what we say are significant increases which is why we still want to put some submissions to you, Commissioner, about the phasing in.

PN92

THE COMMISSIONER: Well, Mr Maloney, I asked the same question of
Ms Roberts in terms of time to respond to anything that the union might put forward in terms of any directions that I might issue. Do you see yourself being in a position to be able to respond in the type of time that Ms Roberts mentioned, which I think was one to two weeks?

PN93

MR MALONEY: Commissioner, I’m sure we can put some submission to yourself and the applicant and organise our instructions properly within a time frame of two weeks.

PN94

THE COMMISSIONER: Two weeks? Okay.

PN95

MR MALONEY: I’m not anticipating lengthy submissions, Commissioner, given the relative position of the Northern Territory and the ACT award.

PN96

THE COMMISSIONER: Yes, okay. I think it’s not unreasonable in the circumstances once all of the LHMUs material is presented to me including all their supporting witness statements and any other documents that might be relied upon to give all of the employers two weeks in which to respond. What I envisage is that following today’s hearing I will issue some directions which will set some dates and re-list the matter for a report back probably a week after that two week period. Everyone will have had the opportunity of absorbing the union’s fresh material, the employers responses and be in a position to report back their respective positions to the Commission at that time. Is that time table generally acceptable to you, Mr Maloney?

PN97

MR MALONEY: That sounds fine, Commissioner, thank you.

PN98

THE COMMISSIONER: Right, okay. Now, Mr Hull, to a degree the batting re-opens with you indicating that you’d be in a position to provide additional material by close of business next Monday. Is that sufficient time?

PN99

MR HULL: Yes, Commissioner.

PN100

THE COMMISSIONER: Right. All right, well I'll work out the time table after that and I would expect we’re looking probably at all of the material being before the Commission and I would expect a report back hearing date subject to parties respective commitments probably the week or so before Christmas. That’s just a rough time table I have in my mind at the moment. Mr Hull, Ms Roberts handed up to me a copy of the document that Mr Maloney was referring to being the LHMUs Child Care Affordability Funding Wage Justice for Child Care Workers document. Will that be included in the documents you will file with me on Monday or do you want me to acknowledge this document at this time?

PN101

MR HULL: I’d say it would be safe to acknowledge it at this time.

PN102

THE COMMISSIONER: All right.

EXHIBIT #LHMU3 DOCUMENT HEADED A FUNDING DISCUSSION PAPER BY THE LHMU CHILD CARE UNION DATED MARCH 2005

PN103

THE COMMISSIONER: Anything more for the public record today, Mr Hull?

PN104

MR HULL: Not from me, thank you, Commissioner.

PN105

THE COMMISSIONER: Ms Roberts?

PN106

MS ROBERTS: No thank you, Commissioner.

PN107

THE COMMISSIONER: Mr Maloney?

PN108

MR MALONEY: No thank you, Commissioner. Thank you very much for facilitating the video conference.

PN109

THE COMMISSIONER: Thank you for your attendance. I'll adjourn the proceedings now merely to a time and date to be fixed. I intend in the next day or two to issue some instructions, but if you can generally keep in mind the time table that we’ve spoken about on the public record I'll give some fixed dates and we’ll liaise with you about a report back hearing. I'll adjourn now to a time and date to be fixed.

<ADJOURNED INDEFINITELY [4.16PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #LHMU1 REVISED ATTACHMENT A 11 - DRAFT ORDER DATED NOVEMBER 2005 PN22
EXHIBIT #LHMU2 SCHEDULE D TRANSLATION ARRANGEMENTS (ATTACHMENT 1) NEW WAGES AND CLASSIFICATION STRUCTURE CHILDREN SERVICES (NT) AWARD 2005 PN57
EXHIBIT #LHMU3 DOCUMENT HEADED A FUNDING DISCUSSION PAPER BY THE LHMU CHILD CARE UNION DATED MARCH 2005 PN102