C2004/4987, Transcript of Proceedings [2006] AIRCTrans 345 (16 March 2006)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 14351-1
14352-1

COMMISSIONER RAFFAELLI

C2004/4987 C2004/4988

INTERCONTINENTAL SHIP MANAGEMENT PTY LTD CSL AUSTRALIA PTY LTD
AND
MARITIME UNION OF AUSTRALIA, THE AUSTRALIAN INSTITUTE OF MARINE AND POWER ENGINEERS, THE AUSTRALIAN MARITIME OFFICERS’ UNION, THE
s.99 - Notification of an industrial dispute - Log of claims
(C2004/4987)

APPLICATION BY INTERCONTINENTAL SHIP MANAGEMENT PTY LTD AND ANOTHER
s.113 - Application to vary an Award
(C2004/4988)

SYDNEY

10.10AM, MONDAY, 27 FEBRUARY 2006

Continued from 20/12/2005

PN2895

MR HATCHER: If it please the Commission. The Commission will have received our written submissions in light in part of what we need to say, we’ve said in those. I would hope to not trouble the Commission to any great length in the time available. Can I first submit, however, that there appears to be a basic misconception in the approach that the respondents bring to these proceedings. The case that our clients have put and have put consistently in these proceedings commences with a proposition. That proposition is the Maritime Industry Seagoing Award is inappropriate to the operations that our clients would wish to conduct in Australia.

PN2896

It’s not a properly fixed minimum award and whilst ever it applies the maritime industry in this country will continue to suffer from that which it has suffered over the last few decades. It will decline, there will be less and less vessels flying the Australian flag, there will be less and less people employed under it’s conditions and where they are employed under its conditions they will only be employed by companies who are serving their own needs. That is there won’t be an independent maritime trade to meet the needs of shippers that flies the Australian flag. On the basis of those propositions we have invited the Commission to exempt our clients from the award.

PN2897

The principal proposition we advance is that that award ought not apply to the operations of our client in order that our clients can compete with the international flagged vessels that are presently providing services to Australian shippers. Our clients have acknowledged that they can’t expect to employ Australian seafarers and operate under the Australian flag without affording appropriate Australian conditions. And they have put forward an award application which they say reflects that. Now, Commissioner, when one travels through the submissions one will see that there are a variety of approaches in response to that.

PN2898

It might be said that the AMOU, for their part, traverse our principal submission, that is the need for an exemption from the MISA in order to compete. The other unions appear to accept that that is the inevitable consequence of earlier decisions of the Commission and indeed the finding of every enquiry that’s looked at the matter. In our respectful submission our principal submission is supported by the evidence that we’ve relied on in our submissions, the findings of the enquiries and the findings of this Commission most recently in the decision of the Commission as presently constituted of 13 February 2006 PR966979, in particular at paragraphs 172, 173, 183, 184 and 186.

PN2899

Indeed some of the submissions of the unions in opposition to our application in these proceedings point to the inappropriateness of the present regulation and rely in its continuation, but I'll deal with that specifically as we go through. Commissioner, the first point of attack of the unions in relation to these proceedings is something that the Commission has already heard and determined. That is the imminence of the Work Choices legislation. We have acknowledged that the application that we press is not an application that we would press were the proceedings regulated by the Work Choices legislation. Proceedings are not regulated by the work choices legislation, they are regulated by the Workplace Relations Act.

PN2900

Paragraph 302 of transcript in these proceedings the Commission was invited to adjourn because of dependency of the Work Choices Act. The Commission said so long as the proceedings go forward under the Workplace Relations Act they will go forward. In other words the Commission will deal with the legislation as it is and react to the legislation if and when it changes. And that is the approach that we continue to urge on the Commission.

PN2901

MR W MCNALLY: Could I just interrupt my while my friend pauses? It seems to me that my friend is replying to the union’s submissions. We wish to speak to ours before he does that.

PN2902

THE COMMISSIONER: Well, he’s entitled to paint the picture, isn’t he, and to anticipate your arguments? Then you’ll correct him, won’t you?

PN2903

MR MCNALLY: He’s entitled to do whatever you direct him to do and the ruling I accept. It just seems to me that the ordinary course is being departed from.

PN2904

MR HATCHER: Well, Commissioner, we have no fixed view about this. We thought that in our written submissions we had clearly and at some length annunciated our principal submissions and we thought that today’s purposes were best served by moving to analyse the differences between the parties. If my friend would wish to go first we have no difficulty with that.

PN2905

THE COMMISSIONER: No, I don’t think he’s saying that. I think he wants you to go first and then while I’ve allowed you to sort of make some general responses to their positions - he’s right, really. You’ll be able to respond to what they say. They may have changed their emphasis between when they filed their submissions and now. But really, the onus is on you to put your case .

PN2906

MR HATCHER: Well, Commissioner - - -

PN2907

THE COMMISSIONER: I know you filed submissions. We haven’t marked them, but we will in due course perhaps. I don’t want to - you’ve obviously prepared a spiel about Mr Hatcher. I don’t want to sort of cut you out, but I think Mr McNally is correct. That it’s not his case, it’s yours.

PN2908

MR HATCHER: Quite, Commissioner. But in our respectful submission the case that we put needs to be understood and with all due respect to our friends we really apprehend from their approach that there has been a misunderstanding of the case that we put. We don’t invite the Commission to go through and pause over MISA. We don’t say to the Commission that MISA can be improved by tweaking that provision or adjusting the other provision. Our case is that MISA is simply inappropriate. If our client is to offer a competitive service with Australian seafarers operating under the Australian flag it needs to have an award which recognises Australian safety net conditions, but does no more.

PN2909

And given the history of this award, given the number of times it has been criticised and identified as an inappropriate award for this industry, the appropriate approach, in our respectful submission, is to start afresh. And to that end, we start afresh. We invite the Commission to exempt our clients from the award, we take standard safety net award prescriptions and we invite the Commission to make an award in those terms. Now, we don’t submit that those terms will make us cost competitive internationally. We acknowledge that Australian conditions, even Australian safety net conditions, in some circumstances well exceed and in many circumstances exceed ITF conditions, the conditions that apply to the vast bulk of shipping that does the shipping task in this national.

PN2910

But we say applying appropriate safety net conditions has the potential to make us competitive, if not cost competitive. There was evidence that we led that was referred to in our written submissions from Mr Gross, Mr Sorensen and Captain Ives that other considerations go into what makes a shipping company competitive other than just cost. The ability to dedicate a vessel, the ability to have industrial harmony, the ability to provide Australian seafarers on an Australian flag all these competitive advantages that assist the company to compete on matters other than simply cost.

PN2911

But one thing is for sure. At two million dollars per annum additional cost per vessel we can not compete. Now, Commissioner, I should say that, as I earlier put, we have put in writing our principal submissions. We don’t see a need, subject to answering any questions that the Commission may have, to do any more in our principal submission. We approach the task at written submissions rather than an outline of the submissions already put and I don’t know that the Commission would be greatly assisted by us reading those written submissions.

PN2912

THE COMMISSIONER: Yes. We perhaps should mark them.

EXHIBIT #INCO14 WRITTEN SUBMISSIONS OF INTERCONTINENTAL SHIP MANAGEMENT PTY LTD

PN2913

THE COMMISSIONER: Yes.

PN2914

MR HATCHER: If it please the Commission they’re our principal submission.

PN2915

THE COMMISSIONER: Well, let me just ask you this. Let me just take you to paragraph 42 of this exhibit. I’ve never understood this. I know there’s a concession the unions seemed to have made but they’re not pressing, but why is this cargo handling allowance at double counting?

PN2916

MR HATCHER: Because cargo handling was incorporated in the award rate. The award rate was expressed to cover all incidents of employment and then once the award rate had been adjusted to include all incidents there was a dispute where the employees refused to handle cargo unless they received some additional increment. The cargo handling allowance came in, second payment for the one incident.

PN2917

THE COMMISSIONER: Yes, okay. Where is there a copy of MISA? Is there an exhibit that gives us MISA somewhere?

PN2918

MR HATCHER: I’m sure there is, Commissioner. It’s an annexure to
Ms Willmot’s affidavit.

PN2919

THE COMMISSIONER: Yes. That’s Jewell, isn’t it?

PN2920

MR HATCHER: No, Willmot I think, Commissioner.

PN2921

THE COMMISSIONER: Willmot, yes.

PN2922

MR HATCHER: MTW3. Annexure MTW3 to Ms Willmot’s affidavit.

PN2923

THE COMMISSIONER: Why is that allowance that cut the - I think is that the one that’s described in clause 19, handling and securing cargo allowances?

PN2924

MR HATCHER: I believe so, Commissioner.

PN2925

THE COMMISSIONER: It looks like it.

PN2926

MR HATCHER: Yes.

PN2927

THE COMMISSIONER: The other allowances in part 4 which is in the canker allowance, disturbing sleep allowance, personal effects allowance, dry docking, study, et cetera, they’re not double counting?

PN2928

MR HATCHER: Well, not on the material we have identified, Commissioner. Commissioner, in the decision that’s I think referred to in our submission cargo allowance was an expressed amount. It was incorporated into the wage rate. We couldn’t point to such an express provision of the other allowances.

PN2929

THE COMMISSIONER: I see. In paragraph 45 it says there the discharge rate was 300 and then with the Ukrainian crew it went to 1200.

PN2930

MR HATCHER: Yes, Commissioner.

PN2931

THE COMMISSIONER: I just want to be clear that I thought I recall one of the ships at some time, either the Yarra or the Torrens, underwent some kind of major capital improvement and I wonder whether that affected the discharge rate?

PN2932

MR HATCHER: That wasn’t Captain Sorensen’s evidence. Mr Sorensen’s evidence was that it was the vessel pre ANL vessel as modified and the Ukrainian crew afterwards.

PN2933

THE COMMISSIONER: I see.

PN2934

MR HATCHER: I accept that one of the vessels did have a major overhaul during the - but if it please the Commission the Commission will recall that the overhaul was to enable it to undertake the cement tray. That was when the self unloading mechanism was put on and the ship was enlarged. In fact the changed conditions, I think, were the subject of a decision of the Commissioner, I just can’t recall whether it’s a decision that’s recorded in the Commission in these proceedings or whether it was in - I believe it was in these proceedings, Commissioner. 1986 is a date that comes to mind, but that wasn’t the comparison that Captain Sorensen was making in paragraph 230.

PN2935

THE COMMISSIONER: What exactly is the leave that you say should apply?

PN2936

MR HATCHER: Well, Commissioner, that was something I was going to deal with in reply. We say it’s four weeks annual leave.

PN2937

THE COMMISSIONER: Yes.

PN2938

MR HATCHER: And that was the application that we made. In their submissions the AMOU point to the fact that we have conceded, as we do and intended to, that officers watch keeping fall within the classic seven day shift workers and as seven day shift workers they would be, in accordance with Australian standards, entitled to five weeks annual leave. All we would say in opposition to that is given their position as part of the overall ships compliment it would introduce a disparity in conditions that would be unfortunate. That’s all we can really say. We acknowledge that we have pressed our application on the basis of the application of Australian standards.

PN2939

The watch keeping officers are within the operation of the classic seven day shift work definition and they would, in ordinary circumstances, accordingly be entitled to five weeks annual leave.

PN2940

THE COMMISSIONER: Yes? And apart from that?

PN2941

MR HATCHER: Apart from that, Commissioner, we’ve asked for the inclusion of a standard bereavement leave clause, a standard sick leave clause, parental leave, we had sought in the application the then test case provision for parental leave, the MUA in their submissions point out that there has been a subsequent decision. We acknowledge that the standard test case provision for parental leave ought to be inserted. Public holidays, we’ve sought 10 days. The only consideration of the quantum of public holidays in a full bench decision that we’ve been able to turn to refers to a Commission standard of 10 public holidays.

PN2942

There’s a case referred to by our friends for the MUA that doesn’t deal with quantum, it deals with substitution. It in turn refers to an earlier decision. That earlier decision picks up a standard of 10 days. And on that basis we’ve formulated our application.

PN2943

THE COMMISSIONER: Yes. But what leave do they get, what absence do they get from the ship for working Saturdays and Sundays, or for working seven days rather than five?

PN2944

MR HATCHER: Well, the award that we propose envisages that they would have a rostered 38 hour week as many industries do. And so they would be rostered for ordinary hours of work for the vessels’ swing and they would be rostered off when they come off their swing on the vessel. So whilst they might work 14 days straight, they would then - well, let’s say 15 days straight - they would then receive six days without the requirement to work, exactly as it applies in any other industry where hours are rostered over greater than a seven day period.

PN2945

THE COMMISSIONER: Why would they have six days off? Why not four? I’m not sure.

PN2946

MR HATCHER: 15 days work, there’s three working weeks, Commissioner.

PN2947

THE COMMISSIONER: I see.

PN2948

MR HATCHER: So for every five days worked, two days off.

PN2949

THE COMMISSIONER: Yes, but you don’t propose that kind of swing, do you?

PN2950

MR HATCHER: Well, we don’t restrict the application to a particular swing, Commissioner. We simply allow flexibility in the award for the employer to operate the most efficient swing and provide the employees with the time off that accommodates that swing.

PN2951

THE COMMISSIONER: Yes. And what about public holidays, what do you say in relation to that?

PN2952

MR HATCHER: We say that they would receive whatever the test case standard is for public holidays. We have inserted 10 days. 10 days is what appears in the Full Bench decision that we’re able to identify that details quantum. If they work on public holidays we say they should be entitled to double time. The reality is for many of the public holidays they would be working, but if the public holidays fall when they’re off swing they would receive an additional day added to their annual leave. What we’ve attempted to do, Commissioner, is simply - - -

PN2953

THE COMMISSIONER: But if they’re working on Anzac Day do they get a penalty for that day, do they?

PN2954

MR HATCHER: Yes.

PN2955

THE COMMISSIONER: Right. In respect of the classifications the difference is this, in my view. With the foreign ships they have a classification structure that presumably, or I think I found, adequately met their needs, but these are ships or these are companies that have engaged labour that have followed the integrated rating concept for a long time. How can we just on the evidence of a few people turn around and say well, we’ll go back and we’ll set in all these trades people, put in bowsen and other ordinary seamen. How can that - catering attendant - how can that be so easily done?

PN2956

MR HATCHER: Well, Commissioner, when you say easily done the evidence is that the integrated rating concept was introduced to a agglomerated number of classifications into one and to accord a significant wage increase for that agglomeration of duties. The duties were all their. They’re traditional classifications and they’re the classifications that are applied in the industry that doesn’t fly the Australian flag. The industry internationally, it’s not regulated under MISA. The unions concede that the trades classifications, I think subject to some demark between the AMOU and the MUA, concede that the trades classifications are useful and ought be on the vessel.

PN2957

The Commission will recall Captain Khosa’s evidence, the AMOU witness, who said how much it improved the efficiency of the Bass Trader. I mean, the trades were re-introduced under that vessel and how useful they were in his experience in international shipping. As to the preferred way our clients would man vessels the decision of Moranbah North says that really it’s up to an employer to decide the best way to man it and for the Commission to then assess what wages should apply to the classifications that the employer has found appropriate. There’s nothing dramatically different about the classifications our client urges other than a back to the future, as it were. The move to integrated ratings only occurred in Australia.

PN2958

It didn’t occur in the international industry. And our client’s experience and their evidence in these proceedings is that it has been of little utility to them. They would wish in order to compete to have classifications that accord with the international industry and accord with history in this country.

PN2959

THE COMMISSIONER: Well, but why should the able seamen be at 89.5 per cent of the relativity?

PN2960

MR HATCHER: Because, Commissioner, we led the evidence from Mr Tiller who’s experiences in making such assessments, he said that is the appropriate comparison to the fitter applying the tests that he applies when he does these things and gives evidence in Commission proceedings. And the union, the MUA, had the benefit of someone with similar training and had similar background, we can argue about their proximity to the coal face, but clearly was in a position to say no, it’s not 89.5 it should be 95.2. And he doesn’t give any evidence as to what it should be, he just says well, we don’t think that that’s a really good way of going about the test.

PN2961

Now, there’s a clear inference to be drawn there that whatever he would go about it, it doesn’t yield the different result.

PN2962

THE COMMISSIONER: Here it says he doesn’t do that sort of thing.

PN2963

MR MCNALLY: The Commission should be aware, I think in fairness, that we did send a person down to Whyalla by arrangement with the - to inspect what ..... does. But when we got there the ship wasn’t there. So we came home again and then the hearing proceeded.

PN2964

MR HATCHER: They were told the ship wasn’t there before they went. The fact that there was a communication problem is unfortunate, but there was a communication problem. Other arrangements were put in place, the union chose not to use them. They were put in place well before the matter came back before the Commission.

PN2965

MR MCNALLY: Anyway, be that as it may the witness my friend refers to isn’t, doesn’t do that sort of testing.

PN2966

THE COMMISSIONER: I guess my concern, Mr Hatcher, is that whenever I made this finding I think I expressed some surprise that a fitter should get as much as an integrated rating - sorry. That an integrated rating should get as much as a tradesperson. But that doesn’t answer the question what an integrated rating, or what a non-trades person on a vessel ought to get. And you say well, there’s evidence from one person, an expert which says it should be 89.5. Then the difficulty I have is that these seamen on Australian vessels have been getting 100 per cent rate for a long time now and to somehow bring that down by over 10 per cent, now you say well, that is the evidence if that is basically accepted.
Well yes, perhaps I do. I’m just - - -

PN2967

MR HATCHER: Commissioner, the valuation of work is always a troubling phenomena. How does one say where a doctor compares with a nurse? How does one say the difference between a boiler maker and an electrician? And in the ultimate the Commission has had to adopt some procedures to do that. On the basis of the way the Commission has approached the valuation task in the past we led certain evidence. That evidence, subject to the contrary evidence of methodology, is unchallenged in the proceedings. Now, we don’t invite the Commission to, because we don’t need, to find that the integrated rating rate prescribed by the Commission was inappropriate because we don’t ask for the classification of integrated rating.

PN2968

But we do know that the integrated rating rate was set at a higher rate than the Seamens rate that was previously in the award. And again in this back to the future submission that we urge the Commission is entitled, in our respectful submission, to infer that when set in a Seamens rate it would be setting a rate for duties less onerous than the integrated ratings rate and when one comes to assess at what level less onerous that might be the evidence is the evidence, the evidence of Mr Tiller that we rely upon. And of course the Commission also has the benefit in these proceedings of the ITF conditions and the Commission sees that the task that we engaged upon in drafting the application commenced with the relativities in the ITF award, but those relativities were far wider spread than one could easily characterise as an Australian standard.

PN2969

So we have attempted to moderate them and have regard to Mr Tiller’s evidence in that process.

PN2970

THE COMMISSIONER: Yes. Where did you get that 15 per cent for the - - -

PN2971

MR HATCHER: Watch keeping?

PN2972

THE COMMISSIONER: Yes.

PN2973

MR HATCHER: It’s an afternoon shift allowance, Commissioner, and it’s purely on the basis that one - and we’re given authority for that rate as a shift allowance - but it appeared to us to be the most appropriate to the work that’s being performed. Because you’re not dealing with an eight hour shift in the out of ordinary hours. You’re dealing with a split shift system to four hour breaks, one period within time, one period without and on a rotating basis. They don’t do the same watch every time. So the 30 per cent that’s urged by our friends is for an exclusive night shift, full shift, exclusive at night. Or I think it’s 25 per cent. It’s just it’s not a common situation in the industry.

PN2974

THE COMMISSIONER: Yes. Well, I must have misunderstood. Those hours are still being paid for at an addition 15 per cent?

PN2975

MR HATCHER: Quite.

PN2976

THE COMMISSIONER: But at one point they get to overtime, don’t they?

PN2977

MR HATCHER: No. The evidence is that the watch keeping officers do two four hour shifts. I mean they may from time to time be called upon to do overtime as well, but their routine work was in two four hour slots.

PN2978

THE COMMISSIONER: Yes. But if they go beyond 38 hours - - -

PN2979

MR HATCHER: They would be entitled to overtime.

PN2980

THE COMMISSIONER: Yes.

PN2981

MR HATCHER: Beyond an average of 38 hours.

PN2982

THE COMMISSIONER: Yes. But at the moment, what’s the difference between that and what currently occurs under MISA?

PN2983

MR HATCHER: Well, because what currently occurs under MISA is an aggregate salary there’s no consideration of what premiums should apply to particular hours worked.

PN2984

THE COMMISSIONER: I thought that under MISA that would just be ordinary hours. Albeit once they go past 38 hours then the penalties start to add up, but there’s no shift, there’s no 15 per cent loading when they move into the night floor hours.

PN2985

MR HATCHER: Well, Commissioner, one assumes that when the aggravate salary, when the salary was aggregated, such matters were taken into account.

PN2986

THE COMMISSIONER: Yes. Sorry, Mr Hatchet, to keep you.

PN2987

MR HATCHER: I’m sorry if the Commission had anticipated us doing something else, but we were at pains to put our submissions in writing to the extent possible because of the time limitations.

PN2988

THE COMMISSIONER: Yes. No, there’s nothing wrong with that. It’s very helpful. What’s the penalty you give on Saturdays and Sundays again?

PN2989

MR HATCHER: That’s to be found, Commissioner, in the application - I’m sorry, Commissioner. Will the Commission bear with me one moment?

PN2990

MR MCNALLY: It’s out of ordinary hours of 6 am to 6 pm Monday to Sunday, no penalties.

PN2991

MR HATCHER: Yes. My friend is right as to that, Commissioner. The Saturdays and Sundays, where they are worked as overtime, are dealt with in clause 21.1.3 where a rate of time and a quarter is prescribed.

PN2992

THE COMMISSIONER: Where are we? 21.1.3?

PN2993

MR HATCHER: Yes, Commissioner.

PN2994

THE COMMISSIONER: Well, how does that stand up with Commission standards?

PN2995

MR HATCHER: Only, Commissioner, on the basis that the Commission has said that in relation to overtime on a vessel it ought not be as a rate prescribed in the industry generally because of the fact, well, as Foster J put it, and one can put it no better:

PN2996

Overtime must be worked and at sea -

PN2997

This is at page 55 of our submission -

PN2998

Overtime must be worked and at sea overtime is far easier to perform than in almost any other industry. It is expected, understood and sought after. At sea the men are on the job, there ...(reads)... leisure in which overtime is worked. So that in these circumstances it is not hard to understand that overtime is, as I have said, sought by all personnel.

PN2999

THE COMMISSIONER: Yes, but the Commission standard is double time - is time and a half for the first two or three hours and double time thereafter. Time and a quarter - - -

PN3000

MR HATCHER: Is certainly below the standard.

PN3001

THE COMMISSIONER: Well below standard. Why should the Commission grant it?

PN3002

MR HATCHER: On the basis only of the distinctions that Foster J made in relation to this industry.

PN3003

THE COMMISSIONER: Yes.

PN3004

MR HATCHER: Commissioner, where we’ve departed from standard we’ve sought to identify it. That’s clearly a departure from the standard. We identify why we’ve departed from standard. The task that our client have embarked upon is to try and find an award that enables them to compete.

PN3005

THE COMMISSIONER: Well, the award you found, I must say, is hardly a pay setter. There must be a reason. Sorry?

PN3006

MR HATCHER: We don’t suggest that we’re out to put in place a pay setter award. The award that we seek to put in place is one that would enable our clients to compete with an industry that has significantly lower costs that Australian awards would permit.

PN3007

THE COMMISSIONER: But how is that the Commission’s task? The Commission’s task is to, it would be foolish to say the Commission has already expressed great reservations about the conditions in MISA. But it has those reservations knowing what really is out there for Australian workers and the Commission has given some importance to the status quo as far as foreign vessels are concerned. But why is it the Commission’s role or the provisions of the Act or the principals to ensure a competitive situation for an Australian employer? It doesn’t do that in the car industry, it certainly doesn’t do that in the clothing industry.

PN3008

MR HATCHER: Well, Commissioner, I think it was the Qantas decision that our friends referred to where the Full Bench say well, there’s these conflicting goals of the Commission - no, I’m sorry, it was the contract call centre one - where the Commission is to have regard to the needs of the industry, flexibility, the public interest. International competitiveness must be a factor in that. At the same time the Commission is bound to ensure that safety net standards are put in place. And I think in the contract call centre the Commission said well, no matter where we fix the wage rate here it’s not going to make the Australian call centre industry cost effective, cost competitive and we acknowledge the force of that.

PN3009

All we’re asking, inviting, the Commission to do is to when it fixes conditions in this industry for our clients, if it is satisfied as we say it ought be satisfied that MISA is an inappropriate vehicle for determining the wage rates and conditions to apply, satisfied of that when it turns to consider what conditions should be put in place, it should put in place a fair safety net standard, and no more.

PN3010

THE COMMISSIONER: Yes, but a fair safety net standard is not necessarily time and a quarter for overtime.

PN3011

MR HATCHER: Not necessarily, Commissioner. But we say based on what this Commission has said about this industry it’s not time and a half for the first two or three hours and double time thereafter. It’s something less than that. Now, we urge time and a quarter.

PN3012

THE COMMISSIONER: Anyway. We started off, of course, by talking about Saturdays and Sundays. There doesn’t seem to be a penalty of that.

PN3013

MR HATCHER: That so, Commissioner.

PN3014

THE COMMISSIONER: Well, even Foster J gave penalties for Saturdays and Sundays. And you’re saying nothing for that?

PN3015

MR HATCHER: Well, Commissioner, we have not inserted anything for that. That’s so. That’s, yes. We should acknowledge that Foster J put in place provisions for time and a quarter for Saturday and time and a half for Sunday work and that those provisions accord with decisions of this Commission in the Retail and Wholesale (ACT) Shop Employees Award for ordinary work on those days and the New South Wales Commission in both that award and the Pastoral Industry Award.

PN3016

THE COMMISSIONER: Yes. Yes, but the Victorian Shop Award by a full bench granted, I think, I actually can’t remember, but I think it was double time for Sunday and time and a half for Saturdays.

PN3017

MR HATCHER: For some shops, Commissioner.

PN3018

THE COMMISSIONER: Well, for - - -

PN3019

MR HATCHER: General shops, I think.

PN3020

THE COMMISSIONER: The overwhelming number of shops that were roped in in recent times. Anyway, I’m just - it’s all over the place perhaps, but to have no penalties for Saturdays and Sundays - - -

PN3021

MR HATCHER: Would make this award somewhat unique.

PN3022

THE COMMISSIONER: Yes.

PN3023

MR HATCHER: I can see that, Commissioner.

PN3024

THE COMMISSIONER: Yes. Thank you, Mr Hatcher.

PN3025

MR HATCHER: If it please the Commission.

PN3026

THE COMMISSIONER: Do the unions want a short break or are you ready to go, Mr Crawshaw, Mr McNally?

PN3027

MR MCNALLY: We’re ready.

PN3028

THE COMMISSIONER: Yes, okay.

PN3029

MR MCNALLY: Could I hand up to the Commission a document which contains - well, not a document, it’s one of those arched lever files - a list of documents and the documents that will be referred to. I don’t guarantee to refer to all of them. Mr Keats was good enough to get them all together.

PN3030

THE COMMISSIONER: Yes.

PN3031

MR MCNALLY: We have also filed written submissions on behalf of the Maritime Union of Australia and the Australian Institute of Marine and Power Engineers dated 20 February 2006.

PN3032

THE COMMISSIONER: Yes.

PN3033

MR MCNALLY: I tender the RC report and the written submissions.

EXHIBIT #MCN11 WRITTEN SUBMISSIONS FOR THE MARITIME UNION OF AUSTRALIA
EXHIBIT #MCN12 BUNDLE OF DOCUMENTS

PN3034

MR MCNALLY: Thank you, Mr Commissioner. Let us say at the outset, first dealing with understanding, the position of the Maritime Union of Australia and the Australian Institute of Marine and Power Engineers is and is very strongly held that the Maritime Industry Seagoing Award together with all its history of development and understanding and application should be maintained as the industry award upon which that the legislation otherwise prescribes, certified agreements and Australian workplace agreements should be based.

PN3035

It has served not only the industry well in that regard, it has served INCO Shipping well in that regard and CSO Australia Pty Ltd, when it did employ maritime employees, well in that regard. It has never let them down. It is surprising actually in this industry just how many certified agreements, that the extent to which certified agreements have covered the whole of the industry. The principal submission to disturb that strongly held belief is that we can not compete with what’s happening overseas.

PN3036

Now, let me say on behalf of two organisations that I represent that something should be done about that. Both unions together with the AMOU have endeavoured to do something about that for years. They have even gone to the extent of radically changing the classification structure for seagoing personnel. They stand ready in the future to do what they can to compete with overseas. But to prescribe an award by the Australian Industrial Relations Commission so as it can compete with overseas is not the wish of the unions and certainly is not the function of the Commission.

PN3037

Textile clothing and footwear industry have similar problems, mainly stemming from Paris and competition overseas. That industry is dying. It’s up to governments to do something about it, it’s not up to the Commission. Let me repeat, the Australian Institute of Marine and Power Engineers and the Maritime Union of Australia hold strongly to the belief that the Maritime Industry Seagoing Award is the appropriate award to govern the Australian shipping industry. The changes that are sought by these two companies bring about the demise of the award, the demise of the whole system prescribed by the award, in respect of these two companies.

PN3038

It’s brought at a time when historically we must recognise that the whole system is about to change. That much of what the Commission has asked to do today is going to be torn up with a matter of days, if not weeks, by a very extensive amendment to the Workplace Relations Act. It has been said, indeed it has been said by you, sir, in these proceedings, that why aren’t they entitled to have an award in place? The award won’t be in place. The award won’t be in place in any relevant sense, and let me demonstrate that to you. INCO Shipping is an employer of maritime employees on the Iron Chieftain in the Bass Trader. I think the Commission will be aware what those ships do.

PN3039

Neither of the ships are owned by INCO. CSL Australia owns the Iron Chieftain. Both of those ships were involved in a constitution of trade and commerce and so the Workplace Relations Act section 5 applied. INCO also employed maritime employees on the Portland and Lindsay Clark. They are about to lose the contract with Alcoa to do so and the future employer will be Australian Ship Management, ASP, associated ASP which are respondents to the award and will continue to be so. The Wunma is not engaged in constitutional trade and commerce.

PN3040

THE COMMISSIONER: What’s that mean? It’s just the intrastate shipping.

PN3041

MR MCNALLY: Yes. That transcript arises at PN454. Now, we’re talking about two ships, because we know CSL haven’t got any. Two ships involved in a tearing up of an award that took over fifty years to develop for reasons that they want to compete with international trade. It’s remarkable to note in passing that the conditions of employment of maritime employees employed by INCO are regulated by certified agreement as are the whole of the Australian maritime industry, and we’ll come to that. We set out on page two of our submissions, particularly of the certified agreement and AWA that bind INCO Shipping in respect of its various ships.

PN3042

Those documents are contained in exhibit MCM12. Beg your pardon, they just disappeared from there, but those documents are available for the Commission’s records. If the Commission needs them they will be supplied. The purpose of referring to them is to indicate that the whole of the fleet of INCO Shipping, more particularly the two that will be affected by this decision for a short period of time, are covered by certified agreements or AWAs. I wanted to refer the Commission to the provision contained in the new legislation at item 360 of schedule 14 part 2 and 3, which is attachment 1? Attachment 1, it’s the third document. Does the Commission have those pages?

PN3043

THE COMMISSIONER: Well, what are the pages again?

PN3044

MR MCNALLY: I’m sorry. It’s attachment 1. If you look down the bottom of each page they’ll have page numbers on them.

PN3045

THE COMMISSIONER: Yes.

PN3046

MR MCNALLY: It’s 1052.

PN3047

THE COMMISSIONER: Yes. 1052, got you.

PN3048

MR MCNALLY: These are a photostat of some consolidation of the .....

PN3049

THE COMMISSIONER: That’s pre-reform certified agreements.

PN3050

MR MCNALLY: Yes. The Act provides in effect that the Workplace Relations Act in its pre-reform may govern certified agreements and the various sections that are repealed, that will be repealed when schedule 1 is proclaimed, schedule 1 of Workplace Relations Amendment Work Choice Act 2005 which will continue to operate in respect of pre-reformed certified agreements. Pre-reformed certified agreements are certified agreements that existed at the time of the proclamation, or the time of the provisions coming into effect. Part 3 of schedule 14 is to be found at page 1058 and that deals with pre-reformed AWAs. The effect of that is that the pre-reformed Workplace Relations Act in respect of the sections there set out will apply to AWAs.

PN3051

So nothing much will change except one matter and that’s to be found in schedule 1 of the Work Choice legislation, item 36 schedule 14, parts 2 section 33.

PN3052

THE COMMISSIONER: Page?

PN3053

MR MCNALLY: Page 1053, which provides that a pre-reformed certified agreement has no effect in relation to an employee whilst an AWA operates in relation to the employees. So far as the status quo is concerned, that is so far as the certified agreements that do exist and the AWAs that do exist, they will continue to exist until terminated by and large pursuant to the current Workplace Relations Act unless, of course, an AWA is put into place.

PN3054

THE COMMISSIONER: So they could continue forever?

PN3055

MR MCNALLY: Forever.

PN3056

THE COMMISSIONER: As now?

PN3057

MR MCNALLY: As now. The likely event, as these submissions will indicate, is that they’ll continue into the future until replaced by whatever the new document replaces them. The only change to that is really two fold. They’ll be replaced by the new system and an AWA now, once the legislation proclaim, can override the certified agreement which of course isn’t the position under the current. Now, the next matter I want to deal with is a prediction as to when these matters, that is when the proclamation’s likely to take effect. Mr Goot in the state wage case when representing the Federal Minister of Employment in the Workplace Relations Act on 14 February stated that it would be mid March.

PN3058

Mr Andrews, who I suppose as his wife has since said, towards the end of March that Mr Goot this morning, when I spoke to him in the park, said that his impression was midnight. So it’s March. I did ask someone else a bit early on. She’s about to descend the finest of all the affected. So as we readily come to the conclusion that the awards will not operate, even existing awards will not operate, in respect of employees whilst workplace agreements, in any of their forms, operate, that’s section 100B, and the awards of course will no longer act as safety nets. It’s 100B at page 407, is it?

PN3059

THE COMMISSIONER: Yes.

PN3060

MR MCNALLY: This prescribes an award, has no effect in relation to an employee whilst a workplace agreement operates in relation to an employee. Some day if Mr Goot’s right, or some day if the Minister’s right, or the unknown source this morning is right in April, whatever happens here will have no effect.

PN3061

THE COMMISSIONER: Unless the employers and the employees decide they don’t want an agreement. Highly unlikely.

PN3062

MR MCNALLY: In that period of time.

PN3063

THE COMMISSIONER: Sorry?

PN3064

MR MCNALLY: In that period of time.

PN3065

THE COMMISSIONER: In that period of time? After that?

PN3066

MR MCNALLY: It doesn’t apply.

PN3067

THE COMMISSIONER: Well, the award will still apply, won’t it?

PN3068

MR MCNALLY: Well, absent of workplace agreements.

PN3069

THE COMMISSIONER: Yes. That’s what I’m saying, it’s highly unlikely.

PN3070

MR MCNALLY: Yes. And in respect of the employers, limited to those employers.

PN3071

THE COMMISSIONER: Yes.

PN3072

MR MCNALLY: Yes. But we’re dealing with it. Well, we’re endeavouring to deal with it in a realistic circumstance here.

PN3073

THE COMMISSIONER: So you’re saying - sorry, Mr McNally - you’re saying you think the Commission makes the award today as they suggest because people on the Bass Trader and people on the Iron Chieftain and for a while people on the - I’m not up to exactly where we are on the Portland and the other ship.

PN3074

MR MCNALLY: I think we’re arguing about redundancy.

PN3075

THE COMMISSIONER: Once the legislation comes in, it doesn’t matter whether it’s MISA or this, they’re under those agreements.

PN3076

MR MCNALLY: Yes.

PN3077

THE COMMISSIONER: Yes, okay.

PN3078

MR MCNALLY: I can that that wasn’t the case on the application’s side. I mean, we were all in the dark. But that’s the reality of the situation. We could emphasise that point by saying that it is more probable than not, but it’s not certain that maritime employees who are employed by INCO will not be required to work under award conditions, now or never, or at least until the Maritime Industry Seagoing Award is rationalised pursuant to the new legislation. Now, the new legislation comes in, in the time frame of the immediate future, salaries go out of the award altogether, the award ceases to operate in any event, leave gets argued about, the award gets rationalised, we’ve got to sort out what leave is.

PN3079

But the salary that currently exist, the wages that they seek to insert, got no orders. It becomes the prerogative of the Fair Pay Commission to set the standard at an hourly rate for the maritime industry or whatever industry’s associated by the task force of the government and disappeared from the award. Just as a matter of emphasis the conditions regulated by AWAs and certified agreement on the Bass Trader, their expiry date is 2008.

PN3080

THE COMMISSIONER: Yes.

PN3081

MR MCNALLY: And the Bass Trader is the end of - I’m story, the Iron Chieftain is the end of 2006 and that’s the time that they will be if not certain, more probably than not negotiations will proceed for a workplace agreement in its various forms, collective, unselective, AWA, which immediately when put in place whatever award exists disappears again. It disappears again. Now, with the risk of being proved wrong in the future, if I’m still about, the fact is that if INCO’s still about they will not be working under the award ever in the future whatever the award is made, whatever form it’s in. They will be working AWAs and certified agreements, the foundations of which will be the fair pay standard.

PN3082

Again at the risk of being proved wrong let me emphasise that it’s unlikely that any award the Commission makes will be made before, or much before, that new order takes effect. Then we say that what about the tradesmen? What about the able seamen for want of employment? What about the ordinary seamen, its unions and the trainees? They’ve asked for an award so we can use those people. Putting the cart before the horse, I would have thought you’d use those people and then under the old law the union would then seek an award, if they have coverage for those people, to put them into an award.

PN3083

But let me say this: there’s nothing to stop INCO Shipping, there is nothing in MICA to stop INCO Shipping, there is nothing anywhere to stop INCO Shipping from employing tradesmen, able seamen, ordinary seamen, juniors, trainees, cadets, wiper uppers or whatever they want to employ on these ships so long as they comply with the standards of safe manning prescribed by MISA pursuant to their duties under the Navigation Act. To emphasise that the position is that on the Iron Chieftain the Commission will be aware tradesmen have been introduced with the agreement of the Maritime Union of Australia to perform the function and they are provided for by the certified agreement. They’re absent the award but provided for by the certified agreement.

PN3084

So the fact that the Commission doesn’t make an award doesn’t interfere with any of the plans of INCO, whatever those plans happen to be at this point of time. If the matter concludes, that is a decision’s given, if before the matter is concluded schedule 1 is proclaimed it’s common ground between the parties that the new Workplace Relations Act, or the Workplace Relations Act as amended by the Work Choices Act, could not succeed. The application could not succeeded under the new legislation. Mr Hatchet confirmed that understanding of the parties at PN592. Now, we’re going to say more that the award for those reasons alone, for that reason alone, shouldn’t be made and these respondents should be excluded from MISA because of the plain history that was taking play.

PN3085

I’d have a lot more to say, but we just confine these remarks to CSL Australia. They don’t employ anyone. They don’t employ any maritime employees. They own a ship, but they have entered into a contract with INCO to employ the labour. So for an added reason any award that is made is unlikely to have any effect. We do say in our written submissions that we don’t concede that the Commission has jurisdiction to make an award or vary the award in respect of CSL Australia Pty Ltd. I have more to say. I want to say a lot more about leave if I can. Would that be a convenient time?

PN3086

THE COMMISSIONER: Yes. We’ll adjourn for 15 minutes.

<SHORT ADJOURNMENT [11.25AM]
<RESUMED [11.47AM]

PN3087

THE COMMISSIONER: Yes, Mr McNally. In the unlikely event, I say, but in the event that the Commission rejects the submissions just made that the application should be dismissed for a very practical reason, in the event that the Commission forms a view that MISA should be departed with, the terms of an alternative award looked at, we rely upon the submissions of the AMOU which we’ve had the advantage of reading. Very excellent submissions prepared by my friend representing that union. We support those submissions and we rely upon the submissions in attachment A to our submissions which deal with comments upon general submissions made by the application. I touch upon those and we also rely upon schedule B which are comments upon each clause of the application which are self explanatory.

PN3088

I want to talk about leave if I can. There’s no real explanation given by the applicant as to why they say leave should be departed from and the leave factor which was introduced during an exercise which took some decades should be discarded other than the fact that it’s part of the picture of not being able to compete overseas and I’ve dealt with that. And to some more livid extent some double counting involved. Now, I want to deal with double counting issues that’s arisen. Before I do that let me point out, as we have in clause 33.2 of attachment B to our submissions, the very extent of spread of the leave factor is the maritime industry generally in Australia. They’re at page 22 of the submissions.

PN3089

We’ve set out the areas where the leave factor has been introduced. Tug boat industry, self propelled barges, floating production facilities, flags and ship boat build, pioneer floating productions, maritime industry off shore oil, ports and harbour services. Those awards were before the Commission and other proceedings were available to the Commission which set out the leave factors that are annexed to those awards. So I don’t think there will be much contest that the leave factor concept is in the maritime industry generally not only the area that we refer to as the bulk cargo area.

PN3090

These applicants seek to depart from that final argument in respect of two vessels. There has been a difference between the shore based industries and the maritime industries in respect of why leave has been prescribed. My friend seeks the shore based system and asks the Commission to object the leave factor system. Of course I suppose by the description of how it would be applied today from my learned friend, Mr Hatcher, Mr Ives and Mr Sorensen in their evidence didn’t really know how that applied. Well, that might be exaggerating. Were unable to express how they would apply it.

PN3091

The system as described by my friend is not dissimilar from the system that Foster J tried to introduce in 1955, an experiment that failed. He produced a concept of weekend leave in port and I'll come to it in detail. As I understand the system the concept was high penalty rates for working on the weekend to encourage employers to give the seamen a weekend off for port. It failed. Because what happened was that, and this is explained in his later judgment, what happened was is that rather than use shore labour they accepted the higher penalty rates - that’s the ship owners - and the employed the crew to do the work in port in order to get quicker turnaround. We’ve heard a lot about quicker turnaround.

PN3092

And of course by getting quicker turnaround the opportunity to take the leave failed. Now, that as I understand it is what my friend is seeking to introduce. I’m not sure what he’s seeking to introduce, but we know that on the other ships you increase the crew, you pay them less. I’m not sure whether that’s what’s in mind or what is in mind. Anyway, I point out that the system has been described as an experiment that failed, an experiment that was introduced in 1955. Could I refer to tab 14 or 15? 15 of the exhibit MCM12 where we find a copy of the decision of his Honour Foster J and a summary of the proceedings. Could I hand up a copy of the award that was subsequently made because it wasn’t included in the original.

PN3093

THE COMMISSIONER: Yes.

PN3094

MR MCNALLY: It hasn’t been the practice of the Commission to mark these exhibits. I'll refer to it as the 1960 award, I'll refer to it as that.

PN3095

THE COMMISSIONER: Okay.

PN3096

MR MCNALLY: Just before going into the decision what the Commission will be aware of is my learned Justice awarded to correct his own error after direction from the Full Bench there was intervals of leave, 52 intervals of leave every six months, unpaid leave to compensate for weekend. That’s at page 335 of the award dealing with intervals of leave and it was unpaid. But annual leave was awarded at page 337 under the clause headed Annual Leave. 12 months continuous service with one employer or his successor, two weeks paid leave per year. The only difference between then and now is of course standards have changed. The two weeks have become four weeks and five weeks for shift workers.

PN3097

Whilst I’m on the question of shift workers if my friend did distinguish between the position of officers and the position of seamen being a total of four or five weeks leave by shore standards, there’s no difference, they’re all seven day shift workers and that’s the evidence.

PN3098

THE COMMISSIONER: Sorry, Mr McNally. That clause 34.1 says:

PN3099

Every employee shall be entitled to 52 intervals of leave from his vessel in a port without loss of pay in its calendar month.

PN3100

You said without pay.

PN3101

MR MCNALLY: Yes.

PN3102

THE COMMISSIONER: Is says without loss of pay.

PN3103

MR MCNALLY: They were on wages and overtime at that time. There’s no salary.

PN3104

THE COMMISSIONER: Yes.

PN3105

MR MCNALLY: Yes, no salary. This is better demonstrated by the decision.

PN3106

THE COMMISSIONER: Okay.

PN3107

MR MCNALLY: The decision is tab 15. It was a notification of dispute, the first page 819 indicates, pursuant to the Conciliation and Arbitration Act by Broken Hill Pty Ltd, the Commonwealth Steam Ship Owners Association, the Colonial Sugar Refining Company Ltd, Burns Philp & Company and the Seamens Union of Australia, William Hollingman & Sons and Australian Coastal Shipping Commission, that’s ANL, and Indepednent Steam Ship Owners Association. They came on before his Honour Foster J and the member appeared of part of these scene.

PN3108

On 15 June 1958 almost six months ago the tribunal which was described as a full bench of the Commission delivered a judgment -

PN3109

And I’m reading from 820 -

PN3110

- in the matter which has been debated here for some time. The matter arose in this way. By an award which I made as a judge of the Arbitration Court in 1955 commonly called ...(reads)... which I had set for the operation of the award had not continued for a sufficiently long time to enable me to determine whether what I had provided was practical.

PN3111

Then he traces the applications that were made, which we won’t go into in any detail, and he points out at the foot of page 820 that a full bench of the Commission was convened on an application made to the president pursuant to the then section 34 and the Full Bench dealt with the matter by prescribing the principals that should be put in place and then referring the matter back to his Honour Kirby J. At page 822 he goes again, he’s criticised his earlier decision where he says:

PN3112

That has been the subject matter of debate which has taken place in the courts in the last few years. Obviously the matter of weekend leave is no longer in my hands at all. I am bound, as are all parties, by the decision of the Full Bench -

PN3113

That’s the Full Bench in this matter -

PN3114

- and my own task in these present proceedings is what to do, what do the principals mean and how they are to be applied. One other thing that should be noted that when we ...(reads)... problems such as margins, industry loadings, the Seamens Union claim, amongst other things, that Saturday morning ordinary time be paid at overtime rates.

PN3115

And he then points out that he’s only dealing with the Seamens Union application at that stage. Over at page 825 he traces the history of the proceedings. He points out that the award that he made in 1955 in a period of operation of two years. He points out again that some new and experimental provisions were included and the parties were invited to watch carefully their operations in practice and if necessary to apply for any variation that might be suggested by experience. That’s an application in May of 1956 by the Commonwealth Steam Ship Owners Association in relation to weekend leave problem.

PN3116

And on 11 December 1956 was, on the petition of the applicant, withdrawn and struck out. Meantime logs of claim have been served on the ship owners by each of the Merchant Service Guild of Australia, the Australian Institute of Marine and Power Engineers, the Federated Marine Stewards and Pantrymens Association of Australia, the PREI, and the Seamens Union of Australia.

PN3117

The ship owners had all served logs of demand on the Seamens Union of Australia. None of the demands were proceeded. And tracing the matter down, the matter was referred to a full bench and at page 826 his Honour refers the Full Bench decision of 18 June 1958 in Sydney where the Full Bench set down eight principals as follows:

PN3118

Firstly the wages were to be fixed on the basis of basic wage and margins to cover 40 hour per week, overtime to be paid for work in excess of eight hours in any one day. A considerable ...(reads)... are generally applicable to each of the awards under consideration, but having regard to the differences and the nature and conditions of employment covered. Their application need not be uniformed.

PN3119

Then the history is traced which I’d like the Commission to read through in leisure to emphasise that the exercise was a complete exercise involving the Commissioner’s various form. Then we go right to the reasons for the decision at page 830, half way down the page.

PN3120

The present award is a variation of that made in 1955 which was the first complete award since the Deathridge award of 1935. But the industrial position of seamen ...(reads)... will be able now to enjoy the leave he can not and should not expect to be paid for it. Clearly the 123 days leave was unpaid leave and that is still the position.

PN3121

The point that we proceed to demonstrate to the Commission. The matter proceeded in this way. That in the intervening period between 1960 and the proceedings before Ludeke J in 1973 which led to the first industry award, the infant, if you like, of the Maritime Industry Seagoing Award, ship owners, BHP and Western Australian state ships, by negotiation brought about a situation where seamen work 32 weeks per year and leave was taken for 20 weeks. That was during a period, which I'll come to in respect of salaries, where salaries by process of arbitration in the case of Masters Mates and Engineers and by process of consent in the case of Maritime Union members salaries were introduced over a period of time.

PN3122

So that leave was increased by agreement, salaries was increased by arbitration and by agreement. If we just go briefly to Ludeke J’s decision which is tab 12. There were many, many parties in those proceedings and the proceedings commenced in November 1972 and concluded in July 1973. At page 206, I won’t read it, but there was a process there described of conciliation very much with the involvement of the Industrial Relations Commission. I might just have a moment. Page 206, next page:

PN3123

The parties continue their efforts to resolve the disputes by conciliation. From the outset the unions were unanimous in pressing claims that there should be an increase in the provision ...(reads)... of all unions of the existing levels of manning of vessels in the industry and existing categories of grouping the vessels for salary purposes and agreement on the award commencement date to all unions.

PN3124

In other words the common award of common commencement date.

PN3125

I am becoming obvious that negotiations were deadlocked to these point. I was required by the parties to chair their conferences in making their request. The parties expressed their ...(reads)... namely the introduction of the 35 hour working week and the addition of a fourth week of annual leave in the industry generally.

PN3126

That was at page 207. So just tracing that history Foster J experimented, Foster J granted unpaid leave, negotiations took place between BHP and Western Australian State Ships which brought about an increase of leave to 20, negotiations under the very heavy chairmanship of his Honour Ludeke J settled a number of issues including the leave issue where two weeks were added, phased in and a program for the granting of two further weeks was outlined, two further weeks being stiff sea, fourth week of annual leave came in and if a 35 hour week came in generally. The fourth week of course did come in, the 35 hour week never did.

PN3127

No payment for leave. But salaries were then in operation. So salaries being in operation and we’ll look at how the salaries were developed. Salaries were developed by working out what a seaman or a seafarer earned and spreading it out over the year. It’s was more an aggregate wage. Salaries came in and the leave increased. There’s no payment for leave, but of course a person is entitled to be paid aggregate wage throughout 52 weeks of the year. Now, what happened after that of course was the - sorry. The annual leave clause is the leave clause in the award, which is attached to the decision, is clause 9.

PN3128

THE COMMISSIONER: Yes.

PN3129

MR MCNALLY: It must be going to rain some more, my arthritis is pretty bad today, sir.

PN3130

THE COMMISSIONER: 231.

PN3131

MR MCNALLY: It’s page 231 following the award which is attached to the decision.

PN3132

THE COMMISSIONER: Yes.

PN3133

MR MCNALLY:

PN3134

The employees shall accrue an entitlement to intervals of leave from a vessel in a port without loss of pay for each day of duty during employment as follows. For a period of one year ...(reads)... provide in relation to leave entitlements of point 793 intervals and point 875 intervals in accordance with the decision of the Commission dated 4 May 1973 in matter number -

PN3135

That of course is the 35 hour week being granted, or the fourth week annual leave. Then they set out the method in which the leave is taken. To be taken by mutual agreement. Notification in respect for leave. Leave shall be correlated with the running of the vessel. That in the 13 weeks:

PN3136

If after 13 weeks service an employee is entitled to not less than 21 intervals of leave then the vessel will not return to the home port within one month thereafter. The employer and the employee shall, upon request to the employer and subject to the availability of placements, returning to his home port.

PN3137

Et cetera.

PN3138

The intervals of leave to which the employee’s entitled under this cluse shall, unless otherwise mutually agreed, be granted by the employer and taken by the employer not later than eight months after its crew.

PN3139

Then there’s deeding days. There’s no provision for the payment of leave, payment in respect of leave, other than the fact that the employee was on an aggregate wage. It’s been brought about by arbitration in the case of the officer ranks and negotiations in respect to the Maritime Union’s members, or the Seamens Union of Australia members as they then were. The clause of course, if you look at the MISA clause now, has been significantly simplified, probably at the risk of introducing some ambiguity, but significant simplified by the award restructure process that took place under the guidance of Commissioner Tony Wilks.

PN3140

The next exercise is the proceedings before McKenzie J - was he a Justice, he was wasn’t he? Deputy President, sorry. McKenzie DP which is tab 16 in the book, MCM12. There was a range of issues before the Deputy President, all of which had been settled. The parties sought the Commission’s approval for their agreed position, determination that was more a number of outstanding issues than the variation of award to give effect to the changes. He commences in the normal way of congratulating the parties for reaching agreement and then at page 537, at the top of page 537 he points out that it’s a total settlement. He then turns to the various matters. First there were a range of issues which were to be subject to further discussion between the parties and he found it unnecessary to comment upon those.

PN3141

The third paragraph, the second full paragraph.

PN3142

The second there was proposed increase for the rates and allowances and the like it has been pointed out that they reflect changes in money, values, changes in rates of pay and ...(reads)... the implementation of the additional week’s leave provided for in the 1973 agreement between the parties and approved by the Commission.

PN3143

That’s the two weeks, one dealing with the five hour week and one dealing with the fourth week of annual leave.

PN3144

I have no doubt that consistent with section 31.1 of the Conciliation Arbitration Act this can be dealt with by the Commission as presently constituted. Next there ...(reads)... additional leave which I regard as an integral part of what is proposed. Finally there are the conditions attaching to the additional leave which I regard as an integral part of what is proposed.

PN3145

I'll come back to that.

PN3146

The fourth issue relates to sub-clause 14(a) and 14(b) detailing the remuneration. Fifth, there is a limited number of matters agreed such as trade union, training, maternity leave, the make up of pay on compensation which reflects standards adopted elsewhere and are like clause 32 as past ports related. There are remaining matters which the Commission is asked to determine.

PN3147

Page 538:

PN3148

The parties are more overstressed. The bargaining character of the package. It involves for the unions in response to the claims a significant increase in the quantum of leave, increases in remuneration, updating of rates and other improvements and conditions. For the employers there are changes in work arrangements and some other conditions. In all the circumstances I am prepared to vary the Maritime Industry Seagoing Award in terms of the agreement between the parties and the following determinations.

PN3149

Attached to the decision and a preference in the award that was handed down are the terms of settlement. They’re attached with a tab reference. Clause 2 of the terms of settlement point out that:

PN3150

The settlement is in full settlement of all union claims for a 35 hour week or increases in leave including the two crew system, a leave accruement rate of one day of leave for each day of duty and/or one on one off duty system, sick leave, compassionate leave, maternity leave, paternity leave and all other claims made by the union in these disputes unless otherwise carried within the terms.

PN3151

So the settlement was in full settlement of all those claims, whether they were granted in the normal form or not. They all disappear. Those claims all went with this terms of settlement. And more specifically the terms of settlement in relation to leave are set out on page two. Paragraph 1 of the terms of settlement:

PN3152

The agreement made between the employer and the union and approved by the Commission in matter number -

PN3153

The number is given -

PN3154

- on 4 May 1973 provides for the increase of entitlement to intervals of leave from point 793 to point 857 in the circumstances herein described. The unions, or some of them ...(reads)... leave with pay for weekends and public holidays, annual leave with pay or five weeks per annum, sick leave, subject to paragraph 11 of these terms compassionate leave and leave in lieu of 35 hour week.

PN3155

None of those matters were granted, but they were all surrendered in the terms of settlement.

PN3156

Upon the coming into operation of leave intervals at point 926 the employer may by agreement with the relevant union give effect to the leave entitlement under 9(a) by the ...(reads)... or otherwise of the application of two crew system to the particular vessel and the details of the appropriate leave system that apply to particular vessels.

PN3157

And then there’s an understanding in respect of leave in advance.

PN3158

The resolution of the above matters will proceed upon the understanding between the parties that the period of leave in advance be limited to 14 days with the regular working pattern. The number of the vessel make them unsuitable for a two crew system.

PN3159

So what has happened in respect to leave in the proceedings leading to the decision of McKenzie DP on 12 October is the two leave that reserved by the negotiations before his Honour Ludeke J were granted, one of which was in respect o the 35 hour week and all claims including a claim for 104 days pay for weekends were surrendered. Now, from that people have been heard to say that leave is paid for. Quite the contrary. Leave is not paid for. Extra leave is given so that the claim for payment for leave is forfeited. As was the claim for 35 hour week, as was the claim for compassionate leave and the other various forms of leave.

PN3160

Nothing has happened since in respect to leave other than the Commission, pursuant to the - I mean, respondents have been added and disappeared, but nothing has happened in respect of instruction for leave other than the award simplification process before Commissioner Wilks where he held that the leave in the form prescribed, now prescribed in the 1999 award, was an allowable matter and an appropriate matter to pass the award simplification process. What we do with it in the rationalisation to come, I don't know.

PN3161

If I could hand up the award that resulted from the proceedings before Deputy President McKenzie, it's the 1981 award. Salaries were then provided. Clause 6, remuneration provides for salaries:

PN3162

An employee shall be paid at the rate of his annual salary specified in the tabled salary attached. Then there's allowances and additions:

PN3163

When leave is provided for -

PN3164

page 786, clause 9 -

PN3165

an employee shall accrue an entitlement to intervals of leave from his vessel in a port without loss of pay at the rate of -

PN3166

875 intervals for each day duty during the employment, on the date of making the award of 926 on 4 May.

PN3167

Paragraph 9(a)(ii)(bb) repeats the terms of settlement. Point 926, intervals of leave factor provided hearing shall and shall be deemed to give effect to, amongst other things, leave with pay for weekends and public holidays, working annual leave without pay, five weeks annual leave, sick leave and subject to paragraph 11 of exhibit 8, in the matter of professional leave. They're the claims that were surrendered. So an extra two weeks' leave and a forfeiture of all those matters including 104 days pay for leave.

PN3168

I wanted to talk a little bit about salaries and remind the Commission of the history of development of salaries. Salaries will disappear out of the award in the next couple of weeks or so and the Fair Pay Commission will prescribe an hourly rate, but nevertheless it's important to look at salaries because of the inter-relationship that seemed to exist between salaries and leave in the context of award simplification and minimum rate adjustments.

PN3169

At tab 10 of exhibit MCN12 there is a decision of his Honour, Galley J, of 1 October 1970 which traces the history of the development of salaries and the history commences at page 36, award salary fixation history relating thereto and salary agreements. Page 37:

PN3170

The practicability of providing salaries for Masters was debated before Mr Justice Foster in 1955 in proceeding concerning officers serving on ships operated by Western Australian government, the State Government Shipping Service. When the question of salaries came to be debated in those proceedings -

PN3171

said his Honour in the course of judgment -

PN3172

it occurred to me that Masters holding such high executive office in the industry in which they are engaged they should be rewarded not by wages but by overall salary.

PN3173

He then went on to state it had been his suggestion that a salary could be estimated for each particular shift, the suggestion which was apparently acted upon because there eventuated an award which provided salaries applicable to the Master on the five vessels operating in the service.

PN3174

On 14 August 1956 Mr Justice Foster bought down a further decision in which he provided for salaries for Masters on vessels generally engaged in the Australian coasting trade:

PN3175

The basis of the idea of salary -

PN3176

he said -

PN3177

has been that the salary should include, and in the appending award does include payment and recognition with the excepted noted in the award of every service in every situation that arose affecting the duties of a Master is an overall payment and no longer is it necessary for the Master with a stop watch ...(reads)... he is his employer's representative and the manager of all of the multifarious tasks that make the successful operation of the ship and in this his status is recognised by the payment of the salary, not a wage, margin or a penalty.

PN3178

Over the page at 38:

PN3179

I've dealt with briefly of the award history relating to seagoing Masters. It was not until 1963 that an award was brought down exclusively for Chief Engineers. Consistently with the attitude towards the Masters, Foster J had impressed upon the parties ...(reads)... the principle has been accepted and the parties are still negotiating as to the actual salaries.

PN3180

Later in the same decision he expressed the hope that:

PN3181

Ultimately salaries in an agreed rate will be arrived at for all Chief Engineers and so place the two shipboard executives upon the true industrial relationship with the employers. Marine Engineers, Chief Engineers Award 1963, which was made by consent ...(reads)... in August last year the company laid before the Guild and the Institute a proposed salary structure for all vessels which divided the fleet into five categories, each with graduated salary scales whereupon deck and engineer officers of equivalent rank were to be paid the same amount.

PN3182

Then he goes on to explain that in respect to particular shifts. Then he subsequently considers the position in respect of the State Shipping Service, that's the Western Australian State Shipping Service, at page 40. Page 41 his Honour states that:

PN3183

I am satisfied that salary fixation for Masters, Chief Engineers, Deck Officers and Engineers Officers have become a common feature in the industry, there has been created a standard of payment provided as a basis for the existence of a comparative wage structure.

PN3184

So that salaries to that stage had been introduced in respect to the Engineers, all engineers and Chief Engineers, Masters and Mates and Deck Officers.

PN3185

Thereafter salaries were progressively introduced in respect to the other ranks on the ships, by agreement. An example of that is the decision of Gallagher J at tab 11 which introduced salaries in respect of cooks. So you had developing in the time commencing in 1955 the concept of leave factor and the concept of salaries, both of which were put into place. As my friend has pointed out, there was a degree of negotiation and agreement in that process. There was also a process of arbitration.

PN3186

The salaries, it became necessary to convert those salaries into minimum rates. That was not a simple exercise because of the historical development of salaries over a period of time. That's the function that Commissioner Wilkes was confronted with. Due to, I suppose, the ingenuity or the genius of Mr Umansky a common approach was adopted in relation to the award simplification process. But there's nothing in that exercise, be it right or be it wrong, that justifies, as my friend suggests, any interference with leave if the Commission had jurisdiction to do so and re-open the award simplification process. It would do it in respect of salaries but not in respect of leave.

PN3187

So we're left with this. We're left with the concept of it's too expensive, we can't compete with overseas, so throw the baby out with the bath water and let's start again. Would that be a convenient time, sir?

PN3188

THE COMMISSIONER: Yes. We'll resume at 2.15, thank you.

<LUNCHEON ADJOURNMENT [12.59PM]
<RESUMED [2.20PM]

PN3189

THE COMMISSIONER: Yes, Mr McNally?

PN3190

MR MCNALLY: If the Commission pleases, I just wanted to deal with a few sundry points before handing over to Senior Counsel for the AMOU whose submissions we support. We've touched upon sundry matters in annexure A to the submissions which no doubt the Commission will consider, which commence at page 6 of the submissions on behalf of the MUA and the AIMPE. We've pointed out on the second page that the onus, of course, I think as you've observed yourself, sir, on more than one occasion, rest for the applicant companies to demonstrate that they should have the onus of establishing that there's justifiable reasons to warrant their removal as respondents from the MISA, firstly, and secondly, for the making of any new award to replace MISA so far as their concerned.

PN3191

The other points on that page I've dealt with. I did want to say something about the consent. My friend, Mr Hatcher, emphasised that MISA was an award based upon consent. Mr Keats asked of Jewell about the degree of consent. At page 8 of the submissions we set out her answer which was given by Mr Hatcher, reading from a paper prepared by her which had typographical errors in it, I understand:

PN3192

If it pleases, Commissioner, I'm happy to report that Ms Jewell has done her homework. I'm asked to provide a report on her homework, not a report by way of assessment, so much as a repetition of the result. It's agreed that if I repeat the result faithfully she will not be required for further cross-examination. What she tells us is this, of those awards and award variations discussed in her affidavit of 9 May 2005 it appears that 11 were made by consent, eight were not, two were partially by consent and partially arbitrated and it's not clear whether a further two were got by consent or arbitration. It therefore appears -

PN3193

then -

PN3194

A slight majority of those awards or award variations examined in my affidavit of 9 May 2005 were made by consent, the extent to which the awards and variations were negotiated or discussed prior to them being made was not discussed in all decisions or all awards. I therefore do not know whether the majority of these awards and award variations were made after extensive discussions or negotiations.

PN3195

Now, the picture painted, particularly this morning in those decisions we went through in relation to leave or to a progression in relation to leave, I'm sorry, paints the pattern of how things used to operate there in the '60s and the '70s in respect of this industry. There were lengthy negotiations, lengthy discussions and decisions. All of those processes involved the Commission and the parties. The Commission involved in conciliation, the Commission involved in arbitration:

PN3196

It was a supervised conciliation to a large extent which produced a result which could not be described as a sweet heart deal or any such arrangement. Consent arrangements between a union and one employer is one thing. Consent arrangements between those unions representing the industry and those employers representing their side of the industry are different matters.

PN3197

What did result was an industry award that has stood the test of time and has resulted in a circumstance where the Workplace Relations Act has continued to operate as it was intended to operate. Now, contrasting that in paragraph 13 with a base award, the base award upon which my friend relies, that's the Service Industry Award 2002, is an entirely consent award, almost, Mr Keats added. The only matters that were arbitrated were redundancy, operative date and whether or not two awards in the same industry should be set aside. The rest was all by consent.

PN3198

If I could add to that what's said in paragraph 18 of the written submissions, we point out that the claim is said to move from standard provisions in awards that have been reviewed at Full Bench level. The claim does not bear this out. Each and every one of the Full Bench model clauses sought by the introduction in substitution for MISA or into MISA has been altered in a manner favourable to the applicant and to the disadvantage of employees. There's not one standard provision in the award attached to the schedule that is indeed a standard in the industry generally.

PN3199

So contrast that situation with an award that's made entirely by consent, that departs from standard provisions of the Commission with an award that had an historical development for this particular industry to cater for all its peculiarities and differences. I wanted to say something about changes to cabotage and we've pointed out in paragraphs 15, 16 and 17 of the schedule that:

PN3200

The government's decision to alter to the competitive environment of maritime seagoing award does not alter the role of the Commission in respect of awards.

PN3201

That goes without saying.

PN3202

The objects of the Act have to be complied with. The changes to cabotage may provide the applicant motivation for the application and cannot form a basis for the Commission to grant the application.

PN3203

I think that had been distinguished in earlier proceedings involving similar parties where your observations were that the government policy is not relevant to considering these matters. At paragraph 23 of our submissions we deal with the criticism that had been directed at MISA in relation to productivity. We have directed the Commission's attention to the evidence given by numerous witnesses at paragraph 24 where we point out:

PN3204

The examination of the performance of maintenance by employees of INCAR and the four ships that could be affected by the application reveals -

PN3205

and then we've quoted Mr Ives' evidence -

PN3206

There is no problem with work performed by engineers. There is no issue as to performance of maintenance by the ratings on the Iron Chieftain.

PN3207

Mr Schubert's unchallenged evidence as to the rating on the Iron Chieftain performing maintenance. Mr Brazel's unchallenged evidence as to the engineers on the Iron Chieftain performing maintenance. There is no issue of performing maintenance by the ratings on ANL Bass Trader. The ratings on ANL Bass Trader work an average of 11 hours a day, seven days a week. Mr Kennedy's unchallenged evidence was that the maintenance was performed on the ANL Bass Trader. Mr Culpepper's unchallenged evidence was that engineers on the Lindsay Clarke performed maintenance. On the Lindsay Clarke there is a problem which has needed address with union cooperation.

PN3208

Mr Rich's unchallenged evidence was the ratings on the MV Portland performed maintenance. The list of his duties performed on the swings from 20 July to 4 September is unchallenged. His hours of work are in accordance with the main shipboard manual with the MV Port an issue by INCO. Mr Dunn's unchallenged evidence was that the ratings on the MV Lindsay Clarke perform maintenance. His hours of work are in accordance with the main shipboard manual for the MV Port and issued by INCO. Mr Culpepper's unchallenged evidence was that engineers on the MV Lindsay Clarke perform maintenance. Mr Bowden's unchallenged evidence was the engineers on the Portland perform maintenance. In respect of dig outs and the evidence is there set out in the paragraphs 25 and 26.

PN3209

The rest of the annexure I'll leave for your consideration, sir. We have set out, as I've said before in a separate annexure, separate comment on each of the clauses claimed. I'll leave that to the Commission to compare with the claims made by the other union. That's annexure B. I dealt with the principal matters this morning, leave and hours of work. There's one comment I'd like to make in respect of what was announced by Senior Counsel, Senior Counsel representing the applicants. My friend chose to address, by relying on his written submissions, and dealt with matters that we'd raised in our written submissions. It wasn't until in response to questions from the Commission that my friend outlined a procedure for using the hours of work and leave provisions should the award be made as asked.

PN3210

For the first time we had an indication that the employees would be required to work 15 days straight and then have six days off. Nowhere in the evidence, nowhere in the evidence was there any evidence given by any employee of the company, there's a lack of evidence as to how the system would be utilised, no doubt because, at least for the foreseeable future, certified agreements will operate. The only evidence that was given by any witness as to how a proposed award would be utilised was Mr Ives.

PN3211

After he had been asked to have a look at the schedule to the award application, he was asked in the transcript at PN627, but I'll read it slowly:

PN3212

Before the new legislation bites in, what do you see the practical effect of it is so far as regulation of working conditions on the Iron Chieftain, the Bass Strait and the Accolade II.

PN3213

The Accolade II, sir, is involved in the intra-state trade also.

PN3214

I see the introduction of more classifications on those vessels as being the biggest practical effect we have had, introducing a junior rate of pay, getting younger people back to sea, introducing apprentices. I see that to be the biggest significant change in the short term.

PN3215

Now, over at PN637 on the next page in response to the questions:

PN3216

So the main object of getting this award to apply to the Accolade, the Iron Chieftain and the Bass Trader or whatever other ship might come along is on the issue of technical employees?---And also apprentices.

PN3217

And apprentices?---Deck boys, ordinary seamen. We would like to see some form of career progression through the industry and not such a flat scale.

PN3218

And get away from the one classification?---That's right. One size fits all does work in this industry.

PN3219

Now, let me hasten to point out, as I did this morning, that there's no need, there's no impediment to doing those things in MISA. They can be done and were it not for the new order about to descent upon us, no doubt those issues would be addressed in awards at the union's application. Absent is any explanation from any company or representative as to how these provisions would be used so as to better make use of the ships, having regard to the current circumstance in MISA. The only explanation given for a decommissioning of MISA and a commissioning of a new award is so they can compete with overseas labour.

PN3220

We have said earlier this morning, we've expressed a view about the lack of involvement of the Commission in that process. If the Commission pleases, the application should be dismissed.

PN3221

THE COMMISSIONER: Thanks, Mr McNally. Mr Crawshaw?

PN3222

MR CRAWSHAW: Can I say at the outset that we support the written and oral submissions of Mr McNally and Mr Keats and we discern no difference in basic approach. Mr Hatcher's attempts to suggest otherwise this morning should be rejected and treated in the same way as his suggestion in the written submissions that the only contentious provision in the application is the question of leave which we have dealt with in our written submission and we deal with that proposition at paragraph 7.

PN3223

Mr Commissioner, I don't intend to detain you and the parties for any length period of time, but I'll try to summarise our essential arguments and in doing so won't repeat or hope not to repeat the oral submissions of Mr McNally, and I'll do this by reference to our written submissions. Perhaps it's a convenient time for them to be marked.

EXHIBIT #AMOU4 SUBMISSIONS OF MR CRAWSHAW

PN3224

MR CRAWSHAW: As we say in paragraph 1 of those written submissions, it's important to remember in this case that the onus is on the applicants and in particular the applicants have failed to make out a case warranting any variation being made to MISA so far as it applies to their operations, let alone the replacement of MISA by the schedule of conditions proposed. In summary we say there that the Commission would not grant an application seeking very significant alterations to the award conditions of maritime workers in circumstances in which the application is unlikely to ever have any practical effect in relation to the applicant companies and where those companies do not even plan to implement the provisions sought and where no compelling case has been made out to the diminution of waivers and conditions of employment.

PN3225

Then in paragraph 2 we point out that the evidence is clear that the employment of officers and crew on the ships covered by the application are presently governed not in practice by the terms of the award, the MISA award, but by certified agreements and AWAs. We also point out in paragraph 4 that it's undoubtedly the case that any variation to the award made by the Commission in these proceedings would have strictly limited operation given the impending commencement of the Work Choices legislation. Mr McNally has already addressed on some of those matters.

PN3226

Mr Hatcher, this morning, suggested that this area was covered by your earlier ruling. However that ruling was a ruling by the Commission to proceed with hearing this case. The argument that we are putting now doesn't cavil with that ruling. The argument we're putting now assumes in fact that you might be able to carry out the role of decision maker of the century and deliver a decision before Work Choices takes effect. But the point we're making is that even if you do that, even if you manage to make a decision before that takes effect, whether that be two weeks or four weeks or whatever, the restructuring required by the legislation, the Work Choices legislation, will in any event be carried out.

PN3227

Now, in paragraph 6 we point out that the evidence also appears to be that the applicants appear to be asking the Commission to make significant alterations to award conditions applying generally in the industry, which, as I've already mentioned, they don't plan to implement. That factor in itself rather gives a lie to passionate submissions about the need to compete in matters such as that when this is going to make no practical difference.

PN3228

We then, commencing at paragraph 8, deal with the proper approach of the Commission, particularly to the safety net. Paragraph 10 we say:

PN3229

Considerations in the nature of efficiency and productivity cannot be pursued without regard for the maintenance of safety net standards.

PN3230

And we set out the principles. Paragraph 12 we point out the existing award conditions contained in MISA reflect the appropriate safety net for application in the maritime industry and my learned friend, Mr McNally, has referred to the long process of consent arrangements approved by the Commissions as well as arbitrated outcomes.

PN3231

As we submit there, this does not prevent the set of conditions contained in the award being regarded as a proper safety net. Now, the applicants, through their counsel, rely on various previous decisions and inquiries. Firstly, in doing so, my learned friends have largely turned what have been called expressions of concern in such decisions and inquiries, into findings. Because some government report expresses concern about something, doesn't make it a finding, and certainly not a finding that this Commission should follow.

PN3232

In any event those decisions and inquiries pale into insignificance when compared with the exercise that was carried out, not that long ago, by this Commission under the auspices of Commissioner Wilkes. When the Commission was charged by statute to go through the award simplification process, and in doing so consider each and every provision in the MISA award as it applied to the industry as a whole. That was the exercise that was carried out and you will know from your own experience in relation to other awards, Mr Commissioner, that that was not an exercise in rubber stamping the consent of the parties, that the Commission had its own legislative function to carry out irrespective of the consent of the parties. I'll return to this point later when we return to it later in the written submissions.

PN3233

What we say at paragraph 14 is that the applicants bear a considerable onus in those circumstances to bring evidence justifying a departure from existing and long standing industry standards and that the Commission will not likely set aside existing award conditions and will require proper evidence rather than general argumentative evidence to support assertions that alterations are necessitated by efficiency or productivity considerations. That onus, of course, hasn't been satisfied in our submission.

PN3234

As we say at paragraph 17 there's a lack of evidence from the - and this is after we start dealing with the question of international competitiveness - there's a lack of evidence from the applicants as to the actual competitive position of the applicants themselves. Rather, the approach of the applicants is to suggest all employers bound by MISA are uncompetitive and as we point out before in this approach is that if the applicants are successful. The other employer respondents to MISA, other than the applicants, will continue to be bound by MISA and on the applicant's own argument they will then be at a competitive disadvantage with the applicants.

PN3235

So they're right about this competition argument. They're going to be put at a competitive advantage over the other respondents. Now, Mr Hatcher this morning, as indeed in the whole case, makes a plaintive plea about the maritime industry continuing to suffer if the application is not granted. The fact of the matter is if this new award or this variation to the award would alleviate this alleged suffering, it would not do so for the industry. It will only do it for the applicants. I think this is what my learned friend said this morning and it's a rather oxymoronic terminology, he said it will fix the conditions in this industry for our clients. Think about that. Fix the conditions in this industry for our clients.

PN3236

That summarises the case. It purports to be argued on behalf of the industry that anything, any outcome that is sought is only for his particular clients. Now I'll leave the Commission to read the rest of what we say about competition. We deal next with the competitiveness of the Australian industry. We just note at paragraph 19, and we provide the evidence or the lack of evidence, the applicants have provided no evidence or even opinion as to whether or to what extent changes in award conditions have affected or would affect their competitive position.

PN3237

Paragraph 21 we say that the applicants also present their submissions as if competition within the shipping industry is uniform and undifferentiated across the industry and in fact, the evidence indicates that in relation to contract work, Australian shipping has a competitive advantage. In paragraph 23 the Commission has nothing before it to indicate the applicants are at a competitive disadvantage in terms of freight rates when compared with foreign flagged vessels generally or in the markets in which the applicants seek to operate.

PN3238

Furthermore, no evidence has been placed before the Commission which would permit any conclusion to be drawn as to whether any alteration in award conditions to in any way alter the competitive position of the applicants. Then we deal with restrictions on competition in coastal shipping pointing out that the assumption that Australian licensed shipping faces unfettered competition is not correct and we give details of that.

PN3239

Then, at the beginning of paragraph 29 we deal with the question of the impact of the application on the competitive position of the applicants and at paragraph 31, and we've referred earlier to the Contract Call Centre decision, we say it is unlikely that even dramatic reductions in the wages and conditions afforded to Australian workers in the coastal shipping industry would have any substantial effect on the competitive position of the applicants against flag of convenience ships utilising labour from developing nations. For these reasons we submit that international competitiveness is not a matter that should weigh heavily in the Commission's considerations.

PN3240

We next deal with the alleged inefficiencies in the Australian shipping industry and I'll leave that to you to read, Mr Commissioner. Coming to paragraph 40 we return to the question of the award simplification process and the criticism by the applicants of MISA and that process. Commencing at paragraph 41 under the heading, "The Commission should not deal with the submissions," we point out two reasons why the Commission shouldn't even commence to examine these aspects of the applicant's submissions.

PN3241

Firstly, that the award simplification process and minimum rates review was required to be undertaken following the commencement of the 1996 Act. The Act didn't intend that that process be repeated again and again whenever an individual employer should be chose to dispute the prior decision of the Commission. An aggrieved party may appeal the decision, but otherwise the award made is final. Of course, there was no appeal. Rather there were joint submissions by the parties, including INCO ships and we point out the statutory duty that I've already referred to that resided in the Commission.

PN3242

Paragraph 43 we refer to the second reason and that is something that I've already touched on and Mr McNally has touched on, that following the commencement of the Work Choices legislation the Commission will be required to undertake an award rationalised process and an award simplification process. I think I've somehow lost the paragraphs. I hope that hasn't been happening all through. It has.

PN3243

THE COMMISSIONER: No, it was all right earlier.

PN3244

MR CRAWSHAW: I won't try and revisit it, Commissioner, but the two reasons - well, they had at the beginning of paragraph 42 and I'll just take you to paragraphs 41, 42, 43, 44 and then finally at paragraph 46. Finally at paragraph 46 we say that even if, as the applicants contend, the returns contained in MISA which cannot properly be included in an award or the rates are not properly set, that is a matter which will be required to be considered by a Full Bench of the Commission in the context of the industry as a whole and involving the industry as a whole. We come back to that question.

PN3245

In circumstances in which this process is imminent it is not appropriate for a single member of the Commission to proceed to consider the very same questions in dealing with an application by two respondents to the award and we also point out that the applicant's can't claim any urgency in dealing with the application because their operations are covered by certified agreements and AWAs which do not expire for a considerable period.

PN3246

Then we go on to deal with problems with particular clauses in the proposed award of the applicants and I don't intend to take you through all of that. Can I just say this, that if contrary to our submission the Commission decides to get into the minutiae of the award provisions, it's apparent that the stance taken by the unions is not to put up an alternative award. In other words, the unions are putting up MISA. Mr Hatcher's clients are putting up the variations. In those circumstances, if you get into the minutiae and you reject MISA and you also reject Mr Hatcher's award, in our submission you should not exercise your discretion to come up with a third option.

PN3247

Of course, under the Act under section 120 you have the jurisdiction to come up with a third option. I noticed in that recent decision involving the foreign crews you didn't exercise that power, but rather exercised your discretion in a way similar to what I'm really suggesting now. But, if contrary to that decision, Mr Commissioner, you're minded to go down the third option path, I was going to say the third way, but it's more of a political term, but if you're minded to go down that third option path the rules of procedural fairness have to apply, of course, if you exercise section 120, and in other words, if you're going to go down that path, Mr Commissioner, you should put the parties on notice as to the details of any path that you're thinking of embarking upon.

PN3248

That's very much an alternate submission. I put that as an alternate to our primary proposition that you won't get into the minutiae at all. As I said, I don't intend going into the criticism that we make of each of the clauses and our submission should be read together with the submissions of the NUA and AIMPE. We, as you might expect, had a look at each other's submissions before filing them, so the criticisms that are made there are in that sense joined, but there's one matter that I should emphasise because it's peculiar to our submissions, and that's the question of the claim in the application for the deletion from the award of the classification of Master.

PN3249

We deal with that at paragraph 74 of our written submission and the context of this is that the submissions of the applicants on this topic are found at paragraphs 142 and 143 and my learned friend didn't deign to elaborate orally on that particular matter today, so really, you've got a rather minimalist submission that's put for what is, certainly from my client's view, an incredibly important topic. I suppose our basic position is, given the evidence and the lack of cogent submission for the proposition, there's not much to answer, but we have dealt with that proposition at paragraphs 74 through to 85, and it appears in 74 why the proposition is incredibly important to our client, because if the application was successful the Masters employed by the applicants would become award free with no safety net award conditions.

PN3250

Actually some of the history in my learned friend Mr McNally, in going to the question of salaries, took you to this morning, but there is a long history which we summarise in paragraph 75 of award application to Masters and in essence the proposition that's put in paragraph 142 for the deletion is, well, you've got two words in there, they're accountable or that there may be a conflict of interest. Well, of course, all workers are accountable and the evidence for the accountable argument we deal with at paragraph 77 and indeed, the evidence is a perceived conflict of interest. Paragraph 78 we point out how the award coverage doesn't detract from the accountability of Masters and how they, like any other employee, are made accountable and subject to discipline or dismissal, and we quote at some length from the evidence in paragraph 79 on that point.

PN3251

As to the conflict of interest, we submit at paragraph 81 that the idea that the Master, being covered by the award, results in any conflict of interest is logically unsound and again not supported by the evidence. We invite you to look at that evidence. Once again you've got to bear in mind of course that the Masters that are supposedly the subject of that evidence are in turn covered at the moment by AWAs and certified agreements.

PN3252

But the bottom line in this is this, that any worker in this country, including all the public servants that are in supervisory conditions, could be, on my learned friend's argument, could be in a conflict of interest position and the rationale that really is put forward would have none of them covered by an award. Now, no doubt there'd be many employers throughout the country cheering about that, but the approach of this Commission, at least the current approach, who knows how it might change under Work Choices or after the Award Task Force reports and matters of that kind come in, but the current approach, as we set out at paragraph 84 is the Commission does not adopt a general approach of refusing to make awards covering senior or managerial employees.

PN3253

So I just wanted to address that particular aspect of the application because it does particularly affect the AMOU. But our basic submission, or our principle submission, as I've already said, is that you shouldn't entertain the applications for the reasons we've set out and, in any event, even if you do, the applications should be dismissed.

PN3254

THE COMMISSIONER: Mr Crawshaw, I just want to ask you one thing that I didn't know. In your paragraph 85 there used to be a person called a shipwright officer, was there?

PN3255

MR CRAWSHAW: Yes, it appears so, that's what we've said. I don't know much about it, though.

PN3256

MR MCNALLY: Yes, there was. There was a - - -

PN3257

THE COMMISSIONER: Was that the person that supervised shipwrights, because there used to be a shipwrights union. I don't know whether that's a shore union or a vessel union or both, but - - -

PN3258

MR CRAWSHAW: Mr McNally seems to know more about this than we do.

PN3259

MR MCNALLY: I did the amalgamation. There was a shipwright and George Campbell was the secretary of the union. Half the shipwrights went to the Guild. The other half went to the Metals, as did George Campbell, and the shipwright was the person who actually performed the task. There were no supervising shipwrights.

PN3260

THE COMMISSIONER: Yes, but they were regarded as Officers?

PN3261

MR MCNALLY: Yes.

PN3262

THE COMMISSIONER: I see. But there - - -

PN3263

MR MCNALLY: I assume from that that the Officer Shipwrights went to the Guild.

PN3264

THE COMMISSIONER: Yes.

PN3265

MR MCNALLY: And the others went to the Metals. In the shipyards they went - - -

PN3266

THE COMMISSIONER: The shipyards, like Garden Island, they went to the metal unions.

PN3267

MR MCNALLY: Yes, and on ships they were Officers.

PN3268

THE COMMISSIONER: Yes, I see. So what your point 85 says, Mr Crawshaw, I take it, is the application seems to be condemning the shipwrights to the non-Officer grades, together with the Bosun and the - - -

PN3269

MR CRAWSHAW: Yes, that's correct.

PN3270

THE COMMISSIONER: MUA type people, I use that loosely.

PN3271

MR MCNALLY: I would have chosen another word.

PN3272

THE COMMISSIONER: Yes, thank you, Mr Crawshaw. Yes, Mr Hatcher?

PN3273

MR HATCHER: Commissioner, it wasn't our intention to condemn any member of the crew to MUA membership. We would rather simply identify the class of workers they wish to have on their vessels. Commissioner, a fundamental point in this case is made by Mr McNally and with the greatest respect he really does put the issue very clearly before the Commission as to what is raised by these proceedings. He says the Maritime Industry Seagoing Award has stood the test of time. We ask rhetorically what is the test that this award has withstood? It has seen an industry that had something like 100 vessels a few decades ago plying the coast go down to something less than 20 vessels plying the coast. It's done that in an environment where once upon a time Australian flagged vessels competed for trade all up and down the Australian seaboard and now the only Australian flagged vessels, on the evidence, are those that are dedicated in-house vessels.

PN3274

Our clients do not operate dedicated in-house vessels. They do contract some vessels that were in-house and where the proprietors have decided that they no longer wish to - the proprietors of those businesses have decided that they no longer wish to participate in the maritime industry and are easing themselves out. The evidence of CSL and the way that group of companies came to have an involvement in the Australian maritime industry is instructive. They bought ANL as an active competitor, tendering for work on the Australian coast. ANL had been privatised because the Australian people were losing too much money trying to provide such a service on the Australian coast.

PN3275

After our client bought that and tried to compete, government policy changed, the trans Tasman accord was put into place so that we couldn't compete, we no longer had the benefits that we have in competing with New Zealand vessels, and the cabotage system changed and the Commission's been through the authorities, the Commission knows exactly what happened with that and our client found that it couldn't sustain commercial operations in this country and our client sold its vessels, our client has illustrated.

PN3276

So we do ask the Commission to consider whether MISA has stood the test of time, and we say the conclusion is inevitably it has not, it has failed abysmally. It is failing the industry, it is failing shippers and it might be said it is failing a whole potential generation of seafarers. No one is coming into the industry, no employment is being offered, there is no next generation of Australian seafarers. That is the situation our clients seek to redress with this award application. That is where the evidence establishes that this award would have utility.

PN3277

Now, I don't wish to put before the Commission in issue anything that is not in issue. This application was made at a time when the Workplace Relations Act held sway. It is an application that would not be made in another perhaps one month's, perhaps six months' time. Its simply not an application that could be made under Work Choices. However, it was made before Work Choices. The Commission quite properly asked that those instructing us who attended the directions hearing get specific instructions on whether our clients wish to pursue an application that clearly was going to involve considerable time and expense in the face of Work Choices.

PN3278

Our clients always understood that it would come to this point in time, that is, a matter of chance will dictate whether the Commission - chance in the sense that no one here can control it - whether this Commission makes an award and whether that award will have an effective life. The chance that will dictate that will most likely be, because we acknowledge the force of what's put, that if Work Choices comes in on 16 March we could not reasonably anticipate that the Commission would have handed down a decision by then.

PN3279

That matter of chance will be whether there are regulations made protecting part heard matters. Now, we can't assist the Commission on whether there are or will be such regulations, but our clients have nonetheless been committed to incur the expenditure to prosecute this award application. Now, they don't do that frivolously. They know what's involved. There's been considerable expense, there's been considerable time. But they are nonetheless committed as they displayed, if I might say, through their lawful representatives in their evidence.

PN3280

There is a commitment to attempt to provide employment on Australian flagged vessels on the Australian coast and it is future employment. We acknowledge the force of what's been put about the operation of certified agreements. We do not say that we would immediately go and implement these conditions on vessels that are presently subject to certified agreements in respect to employees who are presently subject to certified agreements. We don't say we could, nor do we say we would. But we say there are opportunities there and the Commission will recall Mr Sorensen's evidence. It's interesting that our friends rely on it for one proposition, but they stop before the real evidence flows.

PN3281

Mr Sorensen, the Commission will recall, was asked whether there were any other vessels that CSL Australia had an intention to operate and he proceeded to answer that he was involved at that time in negotiations about that very prospect and they were commercial, in confidence. Now, those opportunities are there, maybe there. They are clearly affected by whether the vessel is going to be two million dollars per annum more expensive to operate than a foreign flagged vessel or whether it's going to be one million dollars more expensive to operate than a foreign flagged vessel, and those figures come from the evidence, he says. We've done the per berth basis.

PN3282

Now, much has been said in this case by our learned friends about it is no role of the Commission to concern itself with international competitiveness. That, with respect, is not correct. It doesn't flow from the contract course of the case. Can I remind the Commission of the objects of section 3. The principle object is to provide a framework for cooperative workplace relations which promotes the economic prosperity and welfare of the people of Australia by encouraging the pursuit of high employment, improved living standards, low inflation and international competitiveness through higher productivity and a flexible and fair labour market.

PN3283

The very first step along the path, recognition of international competitiveness. Now, the Contract Call Centre case certainly acknowledged that there's a tension between that and paragraph (d) of the objects which refers to ensuring the maintenance of an effective award safety net, a fair and enforceable minimum wages and conditions of employment, and that's a tightrope that we have attempted to walk with our application. There's some criticism of it and we would concede that we have drafted a safety net award with some conservatism. We're not actually promoting the highest level of costs.

PN3284

We are trying, and unashamedly trying, to achieve a safety net award which will still enable our clients to be internationally competitive. But that's the task we've embarked upon. We acknowledge that the Commission's role is to set under the Workplace Relations Act a fair safety net award and we say MISA simply isn't such an award. If there were any need for further support of that, one only need go to the cases that Mr McNally has taken the Commission to this morning. We may easily have taken the Commission to the same passages. The judgment of Gallagher J on wages, where at page 41 of the judgment, this is the 1971 salaries case, page 41 of that judgment, his Honour says, well, ANL have agreed to this and ASP have agreed to this. So the state should be commissioned, you're going to be stuck with it and BHP, you're going to be stuck with it.

PN3285

They've gone off, they've done their deal. Now, we're putting it through the industry. That's the way salaries were fixed. One looks at the way the leave factor was fixed and Mr McNally took the Commission through the decisions. You find the first decision, it's a trade off of the 35 hour week, and you follow that right through till the present award and it is still said to be the dramatic increase in the factor, through all that period, is still a trade off for a 35 hour week. How many times has it been traded off?

PN3286

Now, in our respectful submission the Commission will have no difficulty accepting the submission that we put that this award is inappropriate to regulate our client's operations for the future. If the Commission accepts that the appropriate step for the Commission to take in our respectful submission is to exempt our clients from the award. Now, we're the applicant in that application. We need to satisfy the onus as applicant. The Commission has to be satisfied on the balance of probabilities that this award is an inappropriate instrument for the operations of our client for the future.

PN3287

In our respectful submission, once we satisfy that onus, the Commission would move to exempt our clients from the operation of this award.

PN3288

THE COMMISSIONER: But you're not seeking that, are you? You're actually seeking something in its place?

PN3289

MR HATCHER: Well, Commissioner, it's a two step process. If the Commission doesn't exempt us from the award, there's no need to replace it.

PN3290

THE COMMISSIONER: Yes, but it can't exempt you from an award unless it gives you something else, because otherwise it would be running foul of the obligation to set a minimum standards.

PN3291

MR HATCHER: Well, the Commission has a number of obligations and it meets them as best it can. If the Commission is satisfied that this is not for our client's operations a fair, safety net condition, then it's not meeting its obligation by maintaining our client's coverage under that award.

PN3292

THE COMMISSIONER: Yes, but then we go to the next step and I've already indicated that I've some concerns going as far down as you think we should all go, overtime, weekend penalties, et cetera. But there might be some - the Commission might be able to create an award which better suits - well, an award that reflects better more acceptable provisions. I say, more acceptable in terms of Commission standards. But then we run up against the very arguments the other side makes and that is, quite apart from time, why the hell would you want to do that when the Commission will be looking, or some task force will be looking at classifications which will be translated, ultimately, I think, into hourly rates and they're looking - and there'll also be a simplification, why of all of this?

PN3293

I mean, it's quite possible that MISA may not survive, but it's quite probable that all the other types of maritime awards will disappear and you might only have one industry award. It would be a lot different perhaps than the one we've got here. So why do all of this? This is my - - -

PN3294

MR HATCHER: Well, Commissioner, that, with all due respect to my learned friend, Mr Crawshaw, was a subject that was canvassed previously. I mean, everyone knew back when this case was set down for hearing, and again at the time of the question of whether it should proceed was referred to - - -

PN3295

THE COMMISSIONER: Yes, and you decide to proceed and so the Commission says, yes, you're the applicant, you run it. I'm here, I'll listen to anything, but now that we're here - - -

PN3296

MR HATCHER: Now that we're here and we've run it, we have either satisfied the onus of persuading the Commission on the balance of probabilities that this award is inappropriate to regulate our client's operations, or we haven't. If we have satisfied the Commission as to that, that is, we've satisfied the Commission that this is not a fair safety net award to regulate our client's operations, then the Commission, in our respectful submission, is duty bound to remove that obligation from our clients. Having done that, the Commission would proceed to determine what is a fair safety net award.

PN3297

We have attempted to assist in that process as well. But to say that that process isn't going to be done this week or next week is not to say that the first step along the way hasn't been met and that the Commission wouldn't proceed to deal with that and consider the next step, either straight away if the Commission feels it has sufficient material before it, and we would submit that the Commission does - I mean, we've put our application together, we've explained the origin of every provision in it. We've identified the sources, we've put the evidence on to support them. We have, as we've said from the start, sought to put in place a safety net award with some alteration of conditions recognising that this is in the maritime industry.

PN3298

Now, from some of the Commission's questions, it may be that we haven't satisfied the Commission as to that, but the boundaries of the argument aren't that great, with respect, and I'll come to deal with the specifics in reply.

PN3299

THE COMMISSIONER: Yes.

PN3300

MR HATCHER: Now, if it please the Commission, in our respectful submission there is no basis upon which the Commission would continue to bind us to this award. We have identified that a prospective future award would have limited effect in the sense of it will be there if we secure other work for Australian vessels and for some limited classifications on existing vessels. But to the extent that our clients don't secure work, where is the disadvantage for the union in exempting our clients from this inappropriate provision from putting in place a safety net award that can regulate our client's operations if we do succeed?

PN3301

You see, they say don't make an award because it's not going to affect anyone. Well, where's the harm? If we've satisfied the Commission that this is the appropriate step - and we acknowledge that's what we must do - if we've satisfied the Commission as to that, where is the prejudice to the union in the step we propose? And at least posterity, the Fair Pay Commission of some award review, or perhaps even a future Full Bench, will have the benefit of this Commission's reasoned decision based on a good body of evidence and submission from parties committed to the cause who have, on all sides of the bar table, put considerable money and effort into putting the case fully and fairly before the Commission.

PN3302

Now, if it please the Commission the way in which our learned friends have approached their analysis of the award which we have pressed is by and large to simply say, well, this is different from MISA. I think I've said enough to make it clear, we acknowledge that the award we press is different to MISA. It's intended to be different. We intend to put before the Commission standard test case provisions, we identify the sources, we identify where we've departed from, what we say is the Commission standard, and we invite the Commission to find favour with that based on the evidence.

PN3303

One particular area that's excited attention from our learned friends for the MUA and AIMPE, is the question of whether leave is paid leave. Now, the Commission doesn't really need to resolve that issue. I mean, one thing is clear, whichever approach one takes, it doesn't sustain the present quantum of leave in this industry. If one says it's unpaid leave, then where's the annual leave for these people? Where is the bereavement leave for these people? It just doesn't make sense, nor does the passage from his Honour, Foster J, that was relied on by our learned friend support the proposition.

PN3304

If one reads the passage in context, that is by taking at least three or four paragraphs before it, it's clear that what his Honour was saying is, we tried a system where seafarers were to get the weekends off, because the vessel would be in port on the weekend and they take their time off and shore labour would be used. Didn't work, because the ship owners would prefer to use the labour who know the vessel than to engage shore labour. So the ship owners were engaging the seafarers on overtime on the weekends and his Honour said, well, that's not what it was designed to do.

PN3305

It was designed to give them their weekends off, so we'll try this different system. We'll give them 104 days off to recognise the weekends that they would have otherwise enjoyed. But they can't expect to be paid for it. That's the weekends. That's all his Honour was saying when he made the reference to unpaid leave, and that is readily apparent, reading the decision.

PN3306

The position that our clients have put which is a standard award provision permitting rostering over an extended period has apparently also excited some attention. There's some complaint that it's the first time we've exposed before the Commission the way in which it would operate. Well, the existing provision under MISA doesn't put any - as our learned friend's submissions make clear - any limit on swings. All it says is, an ordinary day is eight hours, and you get .926 days off for every day you work.

PN3307

So you could theoretically under the award presently have someone operate for 183 days continuously, and then send him home for the rest of the year. So there is no real affects to be found in the rostering provisions that we put in place. We put some limits on it, limits that are to be found in standard award provisions. Now, if it please the Commission, the AMOU, in their submissions, have been sufficiently of assistance as to identify the issues in these proceedings that they say are contentious. They identify four issues, and I don't mean to suggest that the whole proceedings aren't contentious. Certainly Mr Crawshaw has made that very clear in his submission, but they point to four matters that are the contentious issues.

PN3308

They are the deletion of the Master classification, the alterations to wage rates, the abolition of the aggregate wage and the introduction of overtime arrangements and the alteration to the keep and accommodation deduction. Can I deal with each of those in reply.

PN3309

MR CRAWSHAW: Perhaps I should just point out, there's not an exhaustive list.

PN3310

MR HATCHER: But it is the one that's to be found in the AMOUs submission.

PN3311

THE COMMISSIONER: Anyway - - -

PN3312

MR HATCHER: I'm not being critical in saying that. I think it's been of assistance, quite frankly.

PN3313

MR CRAWSHAW: It was responding to my learned friend's submission - this is the problem with my learned friend now doing his submission in reply without saying anything in-chief - that was in response to the submission that the only contentious provision was leave. This is the point I was making earlier, and we said no, that's not the only contentious provision, this is in our paragraph 7, and by way of illustration included the topics that my learned friend is now - - -

PN3314

THE COMMISSIONER: Yes.

PN3315

MR CRAWSHAW: So now he's coming back and saying, well, they're the topics. So it's really just a continuation of the original submission that's sought to restrict the areas of contention, and of course I didn't take you to them, but there's a whole list of - - -

PN3316

THE COMMISSIONER: Yes, I understand that, yes, Mr Crawshaw.

PN3317

MR HATCHER: If it please the Commissioner, I didn't mean to cause offence or controversy, and indeed - - -

PN3318

THE COMMISSIONER: No, but I understand the situation now. Yes?

PN3319

MR HATCHER: Thank you, Commissioner. As to the deletion of the Master classification we rely on our written submissions. We make it clear that we press for Masters to be freed from the award by reason of their managerial position. We rely on the judgment of Gallagher J in the salaries award that was referred to by our learned friends. At page 35 of that he refers to the history and I think my friend, Mr McNally, read it, of Masters having separate regulation. They had a salary, an all up salary, when everyone else was on wages and overtime. Presumably an award coverage device that was intended to differentiate the Master recognising, as his Honour expressly said, the high degree of managerial control exercised by the Master and remove him from any potential conflict in directing that overtime be worked or not worked. So there is support in that for the position we put on Masters.

PN3320

The other thing that the Commission would bear in mind is the evidence in this case of Captain Matuyeyev, Captain Khosa and the ITF agreement. Masters in Australia are one of the few categories that seafarers, indeed perhaps the only category of seafarer, who can truly say that they are disadvantaged by MISA. Their earnings capacity is significantly less under MISA than it is under the ITF conditions and so they are in a position where, at least for the moment, they have a capacity independent of award coverage to protect their wages and conditions.

PN3321

Now, if it please the Commission, we do seek a set of wages rates which reflect classifications that are not presently regulated by the award. I think I've dealt with that in an exchange with the Commission in our principle submissions. We rely on the evidence. We've done what we can to assist the Commission in terms of the valuation of the work in question and the Commission will have seen from our principle submissions the process that we embarked upon.

PN3322

THE COMMISSIONER: But you not only seek to cover classifications currently covered by the award, but as Mr McNally says, you seek to have classifications for designations or positions that your clients don't have and don't indicate - well, there's no obvious prospect of utilising. I mean, there has been no evidence that juniors have been sought on your ships - I don't know, I can't recall the evidence.

PN3323

MR HATCHER: Well, the evidence of Captain Ives was he does want to get juniors on the ship. He wants to get both juniors and apprentices.

PN3324

THE COMMISSIONER: I understand he says it here, but when has it ever been raised with employees or vessels themselves? I mean, this is - - -

PN3325

MR HATCHER: Well, he doesn't give evidence of it having been raised. It hasn't - - -

PN3326

THE COMMISSIONER: It would probably fall on unreceptive ears, I'm not that naïve, but I just, you know, a lot of the stuff that you - it's true that awards often need to be expanded to cover new areas and unions may not be all that receptive to those changes, but normally it's a case of at least being able to point to classifications and the Commission valuing them if you can't agree. In this instance there's no real meat to look at, is there?

PN3327

MR HATCHER: That's so. We're dealing with a prospective situation, rather than a retrospective situation, there's no doubt about that. But one thing that is curious about this, I expect, is that in the oral submissions previously and in the written submission there has been no opposition by the unions to the concept of juniors or apprentices. In fact, Mr McNally, I think, expressly said that the unions had no difficulty with juniors and apprentices.

PN3328

THE COMMISSIONER: Yes, yes.

PN3329

MR HATCHER: One of those areas of prospective employment, just highlights some of the difficulties in the approach that the MUA and AIMPE have adopted in their submissions, with respect, they say in relation to part time employment that it's a very unusual submission, the submission in relation to part time employment. It seems to run this way. It says you ought not introduce part time employment as the unions, AIMPE and the MUA, have decided that part time employment is inappropriate. Now, there's simply no evidence of the unions dealing with whether part time employment is appropriate or inappropriate. It was always part of our application.

PN3330

They then say you ought not award part time employment because the applicants will have the benefit of it anyway on Work Choices coming into effect. So don't give it to them, because they can have it anyway. And they then go one step further, as we read their submission, and say they can probably do it under the present award. Well, none of that, with respect, seems to be a reason why the Commission wouldn't introduce on an application that part time employment. It's a matter on which Captain Ives gave evidence and there was no real cross-examination of him in relation to that.

PN3331

Now, Commissioner, can I return to four issues highlighted by our friends for the AMOU as being contentious. I've dealt with the question of coverage of Masters and I've dealt with the question of wage rates. Can I next deal with the question of the aggregate wage, and our friends direct the Commission's attention to the decision of his Honour, Vice President Ross, in the Masters and Deckhands' Award. Our friends for the MUA referred to it. And if one turns to that decision one sees in paragraph 15 this observation by his Honour:

PN3332

I note that Mr Watson did not contend that the practical application of the aggregate pay rates in the award had in fact resulted in over or under payment. No evidence was adduced in that regard.

PN3333

His Honour is there dealing with whether the aggregate wage was available in a simplified award.

PN3334

Now, what the Commission clearly has before it in these proceedings is an abundance of evidence that an aggregate wage that includes payment of overtime represents an over payment because the overtime is not being worked. The fourth contentious matter that was highlighted by the AMOUs submission was that keep and accommodation ought not be - or the reimbursement to the employer for keep and accommodation ought not be increased. Now, the submissions of both the MUA and AMOU in relation to keep and accommodation simply do not come to grips with our client's submissions. Our client says keep and accommodation or a provision in the award that requires employees to reimburse their employer for keep and accommodation is a provision that accords with the approach of the income tax regulation in this country.

PN3335

If the employee is responsible for his own keep and accommodation, he will pay a fair assessment of the keep and accommodation. There will be a deduction from his salary. If he is getting a benefit from his employer for free or subsidised keep and accommodation he is bound to disclose it. It is taxable income. The Income Tax Assessment Act has perhaps become the model for the Work Choices legislation.

PN3336

If it please the Commission the approach to his Commission with keep and accommodation in other awards has been to acknowledge that distinction. I mean, public interest considerations alone suggest that the Commission ought not be party to a device to avoid taxation. But can we hand up a copy of the Pastoral Industry Award.

PN3337

THE COMMISSIONER: Yes.

PN3338

MR HATCHER: And the Commission will see in clause 43 a provision called Keep, it's on the last page.

PN3339

THE COMMISSIONER: Yes.

PN3340

MR HATCHER:

PN3341

Where an employee is employed on the with keep as prescribed in this award, keep shall mean good and sufficient living accommodation and good and sufficient rations of sufficient quantities and well cooked, served by the cook or the cook's offsider, but it shall not include -

PN3342

I'm sorry, that's not the provision I was looking for, Commissioner. There's a provision, your Honour, that deals with the deduction for - I should have marked this up before I stood up, I'm sorry, Commissioner.

PN3343

THE COMMISSIONER: 38?

PN3344

MR HATCHER: We'll find it, Commissioner, and I'll come back to it. Essentially it provides for the employer not charging more than the reasonable cost of the item plus the cost of carriage. Yes, clause 38(1).

PN3345

THE COMMISSIONER: Yes.

PN3346

MR HATCHER: Commissioner, I've been reminded, perhaps belatedly, that I didn't earlier hand up our authorities. I should provide those bundle of authorities to the Commission, I'm sorry. We don't ask that they be marked.

PN3347

THE COMMISSIONER: Well, I have to read those. You won't get a decision before - yes, sorry, Mr Hatcher.

PN3348

MR HATCHER: Thank you, Commissioner. Now, if it please the Commission, the MUA in clause 15 of their submissions note in passing that it's inappropriate to remove rates of pay for classifications that are currently utilised by Inco. We assume that the note in passing was intended to be a submission and if it be so, it seems inconsistent with their earlier proposition that maritime employees employed by our client, Inco, will not be required to work under the conditions of this award. Certainly that's our understanding of the operation of the legislation.

PN3349

We are not seeking to bind employees presently covered by certified agreements with this award. We don't contend that this award will cover the employees presently bound by certified agreements, subject to those agreements falling out of time, being terminated and those exigencies that the Commission earlier discussed. The submissions seem to direct their attention to the process of award simplification. The AMOUs submissions seem to be similarly directed by the references that they make.

PN3350

We are not here inviting the Commission to re-simplify MISA, expressly not. I think I've said enough about the task that we invite the Commission to embark upon and it is not that task. If it please the Commission, as regards the payment of overtime, we acknowledge that the rates that we have proposed in our draft award do not reflect the land borne standards of overtime. Our submission is the seafaring industry has never reflected land borne standards of overtime. It's not done so for those peculiarities of overtime at sea that were described by Foster J and which have been canvassed previously before the Commission.

PN3351

The fact is that the overtime that is to be worked does not involve any travel or indeed, near as much inconvenience as might exist for land borne employees. Now, if it please the Commission, we have already, I think, acknowledged that officers with watch keeping duties are seven day shift workers and all that we can responsive to the AMOUs submissions in that regard is that those employees are a minority on the community of the vessel and a minority ought not dictate the standard for the majority.

PN3352

We acknowledge the force of the submission of the AMOU that the provisions for notice of annual leave in our application differ from the base award that be nominated. We further concede that there was no evidence directed to this change. It did not, in the proceedings, appear to be controversial, but that's as much as we can put in regard to it. We further acknowledge that there is no facility for payment in lieu of annual leave in the base award. In our respectful submission, there's no basis to suggest that a facility for payment in lieu is inferior to Australian conditions. It is different to some Australian conditions. There is a facility for payment in lieu in Western Australia under the State legislation there in place.

PN3353

Here in these proceedings Captain Matuyeyev and Captain Khosa both indicated that the practice on international ships was to include the payment for holidays within the wage rates and that was a practice that employees found to afford then significant flexibility in choosing when they would sign on for another swing. That is, they would use it as a means of regulating their own holidays. The AMOU further point to an omission from our application in that we have made no provision for annual leave loading. Recourse to annexure A of our principle submission highlights that omission and indicates that it was an oversight in the drafting of the application.

PN3354

Having said that we submit respectfully that it's unfortunate that an anachronistic provision such as annual leave loading would contribute to the non competitiveness of the Australian seafaring industry, but we cannot, consistent with the submissions that we have put that the Commission is bound to put in place a fair safety net award, point to any difference in the seafaring industry which would warrant a departure from Australian Standards in relation to annual leave loading.

PN3355

So whilst we might put the Australian Standard at issue, we can't point to any feature of the seafaring industry which would justify a departure from it. It's submitted that our application does not reflect the test case standard in relation to parental leave. We acknowledge that there was a subsequent decision by a Full Bench of the Commission that amended the test case standard for parental leave and that is subsequent to our application having been drafted. We would acknowledge, consistent with the basis upon which the application was framed and pressed that any award would need to reflect the present standard. On my understanding there is not a great deal of difference between the present standard and the previous standard, but the award ought reflect the present standard.

PN3356

In relation to public holidays it's suggested that our application is below the standard. As I earlier put, on our submission, it is not, and I hand up a copy of Print L434 which, as I earlier put, is the nearest we've been able to get to the statement by the Full Bench that sets forth the quantum. There's been an unfortunate glitch in photocopying this document, and probably as a result of it having been downloaded from the net, every second page only has one line on it, so it makes it look a rather more intimidating document that it in truth is, and it being one of those test case decisions of the Commission, I think the first 40 pages is the title.

PN3357

THE COMMISSIONER: Yes, it will eventually get to it, I presume.

PN3358

MR HATCHER: If the Commission turns to page 57 of 75 - - -

PN3359

THE COMMISSIONER: It may be what awards look like in the future. We'll know soon. Page?

PN3360

MR HATCHER: 57 of 75, Commissioner.

PN3361

THE COMMISSIONER: Yes, yes.

PN3362

MR HATCHER: The Commission sees at the top of the page there's a reference to Christmas Day, Anzac Day and so forth.

PN3363

THE COMMISSIONER: Yes.

PN3364

MR HATCHER: The Commission continue:

PN3365

Otherwise the specification of days should be seen as variable over time in between States, Territories and even localities. No arguments have been put to us to justify either an expansion or a contraction in the standards which had developed by the early 1990s. Though there are some variations between States, we think that a prescription of 10 days, excluding Easter Saturday, gives reasonable effect to the criteria of minimum change.

PN3366

That's as much assistance as we can give the Commission on that subject.

PN3367

Now, if it please the Commission, I earlier referred to the New South Wales Pastoral Industry Employees State Award, and we have copies of that available and we thought we also had the Retail Wholesale Shop Employees Award which I also referred to, Commissioner, but the Commission will recall I made reference to these provisions in dealing with the question of ordinary rates for - or rates of pay for certain ordinary hours.

PN3368

THE COMMISSIONER: Yes.

PN3369

MR HATCHER: I don't think I need take the Commission to the provisions other than to say that those awards do contemplate additional amounts for those. May it please the Commission, those are the submissions in reply.

PN3370

THE COMMISSIONER: Yes. The Commission will reserve its decision and it may be able to issue a decision before March. I suppose it will be the last time we will be all together in this way for many years perhaps. On that basis, these proceedings are now adjourned.

<ADJOURNED INDEFINITELY [3.56PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #INCO14 WRITTEN SUBMISSIONS OF INTERCONTINENTAL SHIP MANAGEMENT PTY LTD PN2912
EXHIBIT #MCN11 WRITTEN SUBMISSIONS FOR THE MARITIME UNION OF AUSTRALIA PN3033
EXHIBIT #MCN12 BUNDLE OF DOCUMENTS PN3033
EXHIBIT #AMOU4 SUBMISSIONS OF MR CRAWSHAW PN3223