C2005/418, Transcript of Proceedings [2006] AIRCTrans 56 (5 January 2006)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 13794-1

JUSTICE GIUDICE, PRESIDENT
VICE PRESIDENT ROSS
VICE PRESIDENT LAWLER
SENIOR DEPUTY PRESIDENT MARSH
SENIOR DEPUTY PRESIDENT KAUFMAN
COMMISSIONER HINGLEY
COMMISSIONER GRAINGER

C2005/4801 C2005/4797 C2005/4798 C2005/4799 C2005/4800 C2005/4802 C2005/4803 C2005/4804 C2005/4805 C2005/4806 C2005/3345 C2005/3347 C2005/3348 C2005/3349 C2005/4869 C2005/4966 C2005/5014 C2005/4586 C2005/4587 C2005/418

APPLICATION BY TRANSPORT WORKERS’ UNION OF AUSTRALIA
s.113 - Application to vary an Award
(C2005/4801)

APPLICATION BY SHOP, DISTRIBUTIVE AND ALLIED EMPLOYEES ASSOCIATION
s.113 - Application to vary an Award
(C2005/4797)

APPLICATION BY AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION
s.113 - Application to vary an Award
(C2005/4798)

APPLICATION BY AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION
s.113 - Application to vary an Award
(C2005/4799)

APPLICATION BY AUSTRALIAN MUNICIPAL, ADMINISTRATIVE, CLERICAL AND SERVICES UNION
s.113 - Application to vary an Award
(C2005/4800)

APPLICATION BY AUSTRALIAN MUNICIPAL, ADMINISTRATIVE, CLERICAL AND SERVICES UNION
s.113 - Application to vary an Award
(C2005/4802)

APPLICATION BY NATIONAL UNION OF WORKERS
s.113 - Application to vary an Award
(C2005/4803)

APPLICATION BY NATIONAL UNION OF WORKERS
s.113 - Application to vary an Award
(C2005/4804)

APPLICATION BY NATIONAL UNION OF WORKERS
s.113 - Application to vary an Award
(C2005/4805)

APPLICATION BY NATIONAL UNION OF WORKERS
s.113 - Application to vary an Award
(C2005/4806)

APPLICATION BY LIQUOR, HOSPITALITY AND MISCELLANEOUS UNION
s.113 - Application to vary an Award
(C2005/3345)

APPLICATION BY LIQUOR, HOSPITALITY AND MISCELLANEOUS UNION
s.113 - Application to vary an Award
(C2005/3347)

APPLICATION BY LIQUOR, HOSPITALITY AND MISCELLANEOUS UNION
s.113 - Application to vary an Award
(C2005/3348)

APPLICATION BY TEXTILE, CLOTHING AND FOOTWEAR UNION OF AUSTRALIA
s.113 - Application to vary an Award
(C2005/3349)

APPLICATION BY HEALTH SERVICES UNION OF AUSTRALIA
s.113 - Application to vary an Award
(C2005/4869)

APPLICATION BY THE AUSTRALIAN WORKERS’ UNION
s.113 - Application to vary an Award
(C2005/4966)

APPLICATION BY LIQUOR, HOSPITALITY AND MISCELLANEOUS UNION
s.113 - Application to vary an Award
(C2005/5014)

APPLICATION BY AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION
s.113 - Application to vary an Award
(C2005/4586)

APPLICATION BY AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION
s.113 - Application to vary an Award
(C2005/4587)

APPLICATION BY CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
s.113 - Application to vary an Award
(C2005/418)

MELBOURNE

10.02AM, MONDAY, 19 DECEMBER 2005

Continued from 16/11/2005

Reserved for Decision

PN224

JUSTICE GIUDICE: Any changes to appearances?

PN225

MR HARRIS : Thank you, your Honour, I wish to vary my appearance to include MR S BARKLAMB, who also appears with me today for ACCI, if the Commission pleases.

PN226

JUSTICE GIUDICE: Thank you. Yes, Mr Watts?

PN227

MR WATTS: Your Honour, in regard to our appearances, Mr Combet is here in spirit only. Other than that our appearances remain unchanged. Your Honour, I don't have anything to add to my previous submissions to the Commission at this stage. I await with some eagerness as to what Mr Cole will say, if the Commission pleases.

PN228

JUSTICE GIUDICE: Yes. Is it agreed you're next, Mr Cole?

PN229

MR COLE: Yes, your Honour. If the Commission pleases, on 17 November, the Full Bench issued provisional directions in relation to the present applications. As the Bench is aware, those directions did not set dates for a hearing but did set due dates for written submissions similar to the corresponding dates for the 2005 Safety Net Review. This morning the Commonwealth proposes that the provisional directions be vacated and that the hearing of the applications be deferred until after the Fair Pay Commission's first determination in Spring of 2006.

PN230

I refer the Bench to paragraph 6 of the provisional directions. If I may, I will just quote from that paragraph. The Bench said:

PN231

Assuming the Bill is passed into law and becomes operative in its current form it appears that the relevant provisions of the Workplace Relations Act 1996 will cease to apply and the Commission's power to fix minimum wages will be confined to transitional employees. Should that occur further questions may arise in relation to these proceedings. It is inappropriate to simply disregard our current statutory responsibilities and adjourn these proceedings until a new legislative scheme has commenced to operate. On the other hand it will also be inappropriate to issue directions which do not take account of the proposed legislation.

PN232

That's the end of the quote. The Commission will be aware that the Work Choices Bill passed the Parliament on 8 December 2005. What is in fact schedule 1A of the Act regarding the establishment of the Australian Fair Pay Commission commenced on 14 December and in the Commonwealth's submission, this is a significant relevance since the previous directions hearing. It means that the Fair Pay Commission's establishment has occurred and that it's consultations with stakeholders can begin as soon as the Fair Pay Commission deems that appropriate.

PN233

Now, I am instructed to inform the Full Bench that the government's intention is that the other main provisions of the Act will commence on a date to be proclaimed in March 2006. Given this, the Commission's earlier statement, and again I refer to the paragraph quoted from the statement of 17 November, the earlier statement that, "Further questions may arise in relation to these proceedings", in our submission is apposite, particularly having regard to the fact that from the commencement date, further variations to award rates of pay for employees in constitutional corporations will be of no effect.

PN234

The Commonwealth - - -

PN235

VICE PRESIDENT LAWLER: Prohibited or - - -

PN236

MR COLE: Well, the Commission will have no power in respect of such employees and State tribunal decisions would be of no effect. I had truncated that concept, your Honour. So the Commonwealth proposes that in the light of these developments the Full Bench now reconsider the provisional directions and not proceed with them. In doing so, we acknowledge that the current Workplace Relations Act will continue to be the operative legislation in respect of the Commission until March 2006 in most respects. However, under the current Act the Commission has a wide ranging discretion regarding the timing and other arrangements for the hearing of applications and in our submission that discretionary power clearly extends to having regard to the public interest.

PN237

I will be developing three main grounds as to why, in the public interest, the Commonwealth submits that it is appropriate and indeed, necessary, with respect to the Commission to defer the case until after the Fair Pay Commission's first determination in the Spring of 2006.

PN238

SENIOR DEPUTY PRESIDENT KAUFMAN: Is this an application under 111(1)(g)?

PN239

MR COLE: Well, to the extent that it may be formally necessary to bring the proposed deferral under that section, section 111(1)(g)(iii), the Commonwealth does make application accordingly. So as I said, there are three main public interest grounds in our submission to defer the case until after the Fair Pay Commission's first determination in the Spring of 2006. The first is that the passage of the Work Choices legislation establishes and means that it is the will of Parliament that a new statutory body, the Australian Fair Pay Commission, should be the lead body in determining any increase in minimum or award classification wages.

PN240

We say that conclusion follows inexorably from the limitations on the Industrial Relation Commission's wage fixing powers and the requirement for the Industrial Relations Commission to have regard to the statements and decisions of the Fair Pay Commission and to the desirability of consistency with the Fair Pay Commission's decisions. Now, clearly it is in the public interest that the Industrial Relations Commission should deal with the present application, that is applications by the unions for the four per cent award wage increases, only at a time when, as intended by a Parliament, this Commission has had regard to such a decision of the Fair Pay Commission and obviously has had the benefit of the outcome of the Fair Pay Commission's decision.

PN241

Now, the second main ground in the public interest in support of our proposal is that in any safety net review case before this Commission, given the importance of what is at stake it is imperative in the public interest that all parties are clear from the outset regarding the legislative criteria which the tribunal will apply to determine the applications. This need for certainty cannot be met if the Commission makes directions to begin to hear a case under the current legislation. We say that because it is clear that on any plausible and realistic timetable, the case will not be finalised under the current legislation. This would simply be a recipe for creating confusion and uncertainty in our submission.

PN242

Parliament has made clear that the legislative criteria which in future will guide the Commission in determining applications for transitional employees, those criteria have changed. For example, in the light of the changes, the Commission's interpretation in previous decisions that it must focus particular attention on low paid employees, excluding the unemployed, clearly will no longer be tenable. A changed approach to considering the employment impact of any wage claim where the Commission has jurisdiction and responsibility, will clearly be necessary. That's just one example. We say it would be absurd if the directions produce a situation where at a later stage in the proceedings the parties and the Full Bench have to forensically comb through the evidence and submissions to determine what remains relevant and what additions and qualifications need to be made to submissions.

PN243

So the need for certainty for all parties from the commencement of the case in terms of the legislative criteria that will be applied to determination of the outcome is the second of the interest grounds that we commend. I turn to the third ground. Now, in regard to the present applications, the public interest in our submission demands that the arrangements for the case should ensure that the Full Bench is fully informed about the circumstances of businesses which do employ transitional employees. These are the only employees who remain within the Commission's jurisdiction. They are not simply a cross-section of all employees covered by the awards and industries which are the subject of the present applications.

PN244

Transitional employees tend to be concentrated in particular industries and the setting and adjusting of their minimum award wages must have significant regard to the economic circumstances of the industries and the employers who will be mainly affected. Parties who have not previously appeared or sought to intervene in safety net reviews may wish to do so as a result of the change to the legislation. The make-up of the possible intervenors and additional parties under these circumstances is simply not clear at this time, but the Commission will depend on the information and view such parties can contribute to make its decision.

PN245

Now, were the Commission to proceed ahead of the Fair Pay Commission's determination, contrary we say to the clear intention of the legislation. Many unincorporated businesses potentially affected are unlikely to be fully cognisant of the way in which they may be relatively disadvantaged in a competitive sense if a further increase for transitional employees is decided ahead of and unrelated to the Fair Pay Commission's determination. So the only sensible and realistic course of action is for the Commission to defer the case until after the Fair Pay Commission's determination.

PN246

It is essential for the public interest to ensure the fullest possible informed input from unincorporated businesses. Such input will be essential to enable the Commission to focus on the key issue at stake. That is, who will be affected and how any further wage increase will impact on these particular businesses and their employees. In the three most award reliant industries there is a broad split between workers employed in incorporated and unincorporated enterprises and drawing on unpublished EEH data we can inform the Commission that in 2004 in retail 57 per cent of workers are employed in incorporated businesses and 43 per cent in unincorporated.

PN247

In accommodation, cafes and restaurants, the split is 62 per cent in incorporated and 38 per cent in unincorporated, and in health and community services it's 31 per cent in incorporated and 69 per cent in unincorporated. Overall 55 per cent of award reliant workers work in incorporated businesses, while 45 per cent work in unincorporated businesses.

PN248

COMMISSIONER GRAINGER: Mr Cole, what were the numbers again for retail?

PN249

MR COLE: For retail, 57 per cent of workers are employed in incorporated enterprises and 43 per cent in unincorporated.

PN250

COMMISSIONER GRAINGER: Thank you.

PN251

JUSTICE GIUDICE: Is that covered by Federal awards or generally, regardless of award coverage?

PN252

MR COLE: That is generally, your Honour.

PN253

JUSTICE GIUDICE: Do you know what percentages of those are covered by Federal awards?

PN254

MR COLE: No, we're not able to estimate that, your Honour. Until the Fair Pay Commission decision in Spring of 2006 is known, it will be impossible to test the extent to which the ACTUs claim may or may not place employers of unincorporated businesses at a competitive disadvantage, or their employees for that matter, at a disadvantage. Contrary to the clear legislative intent, if this Commission were to award an increase before the Fair Pay Commission it will be highly likely that workers in the same industry with the same skills working in businesses sometimes situated on the same strength will be paid different amounts as minimum award wages.

PN255

They will be paid different amounts, not because of different levels of productivity, nor because of different levels of business profitability of that their needs are different, but simply because of the legal status of the business of the business in which they are employed. We say this is an absurd situation, this would threaten the jobs of such workers or creating equities - - -

PN256

VICE PRESIDENT ROSS: That might be the position that arises irrespective of the timing of this new - - -

PN257

MR COLE: Well, if it were to arise as a result of the decision made by this Commission and to a decision of the Fair Pay Commission, presumably it will have been a decision made for some compelling reason in the view of this Commission overtaking the emphasis the legislation itself puts on the desirability of - - -

PN258

VICE PRESIDENT ROSS: I understand the force of your argument about the differences in the statutory criteria of the matters to which we have to have regard. But it's not a jurisdictional issue. It would become a discretionary issue.

PN259

MR COLE: Yes, I don't disagree with your Honour's observation.

PN260

JUSTICE GIUDICE: Mr Cole, I don't want to interrupt you unduly, but if we conclude, could you let me know quite specifically what parts of the Act have come into operation? You don't need to do it now.

PN261

MR COLE: Yes.

PN262

JUSTICE GIUDICE: I think it's relevant to some of the issues.

PN263

MR COLE: Yes. So I was sketching that scenario as to the uneven result that certainly would follow from a decision by this Commission to award an increase ahead of a decision of the Fair Pay Commission.

PN264

SENIOR DEPUTY PRESIDENT KAUFMAN: Mr Cole, under section 7J of the ..... I think it is, the Fair Pay Commission would have to have regard under subsection (b) to employment and competitiveness across the economy. If we were to rule against you and hand down a decision involving non-constitutional employees, would the Fair Pay Commission have regard to our decision?

PN265

MR COLE: I can't speak for the Fair Pay Commission and I think your Honour is asking me whether that would be consistent with the statutory criteria of the Fair Pay Commission.

PN266

SENIOR DEPUTY PRESIDENT KAUFMAN: Particularly having regard to the one to which I drew your attention.

PN267

MR COLE: Yes. I think competitiveness may take on in the context to which your Honour refers, it may have a wider meaning similar to the competitiveness of Australian industry, vis-à-vis its competitiveness and that may be reference to competitiveness of all elements of industry and the economy, but the Fair Pay Commission would be cognisant of a decision by this Commission and doubtless would give it consideration.

PN268

JUSTICE GIUDICE: Mr Cole, just on that point, it's actually one of the issues I was going to come back to and ask you about the Act. Somewhere in this legislation there's a provision that the Fair Pay Commission would update award rates in looking at the minimum wage standards by reference to this year's Safety Net decision, which seems to suggest that the base for any future movement would be award rates as at June 2005, assuming 2005 safety net reply. I think the Senior Deputy President's question perhaps prompts me to ask that question directly, but I was going to come to it later. Firstly, what is the provision and secondly is it operative?

PN269

MR COLE: Your Honour, I may need to take specific advice on that point.

PN270

JUSTICE GIUDICE: Yes.

PN271

MR COLE: The two sets of provisions that are already operative, as I understand it, your Honour, are the provisions dealing with the establishment of the Fair Pay Commission.

PN272

JUSTICE GIUDICE: Is that subdivision A of Division 2 of Schedule 1?

PN273

MR COLE: That is now Schedule 1A.

PN274

JUSTICE GIUDICE: Schedule 1A, is it?

PN275

MR COLE: Of the Act.

PN276

JUSTICE GIUDICE: Yes, I don't think we've been furnished with copies of the Act as published by anybody.

PN277

MR COLE: No, I don't think there is any official compilation, your Honour. No, there are various unofficial compilations.

PN278

VICE PRESIDENT LAWLER: Are they available to the public, the unofficial ones?

PN279

MR COLE: I'm sorry, your Honour?

PN280

VICE PRESIDENT LAWLER: Are any of those unofficial ones available?

PN281

MR COLE: I'll check that, your Honour. I think the unofficial compilation - I'll check whether it is available on the Workplace Relations website.

PN282

VICE PRESIDENT ROSS: Mr Cole, do you know if that's been renumbered, the last Schedule?

PN283

MR COLE: I think that schedule has been renumbered as a result of the - - -

PN284

VICE PRESIDENT ROSS: No, but I mean, has the whole - as I understand it, the last schedule in the Work Choices legislation renumbers the whole of the Workplace Relations Act provisions. I might be wrong about that, but - - -

PN285

JUSTICE GIUDICE: Mr Cole, I don't want to distract too much from your submissions, but in due course, perhaps if you could let me know the answer to that question I asked you and we're also obviously interested to know where we could have a look at the provisions in their final form.

PN286

MR COLE: Yes, your Honour. My understanding is, but I will check this, your Honour, perhaps if we have a brief 10 minute adjournment at an appropriate time, but my understanding is that that particular provision may not have commenced, but also subject to checking it.

PN287

JUSTICE GIUDICE: Yes.

PN288

MR COLE: So I had been painting the uneven outcome, the uneven result of a decision by this Commission to award a further increase in the minimum award wages ahead of the decision of the Fair Pay Commission and in that regard we draw attention to the issue of equity. It's a concept of this Commission. It has put weight on itself in the past and we say that for the Commission to go ahead and award a further increase ahead of the decision of the Fair Pay Commission would certainly throw away for the time being the benefits of the current unified national approach to minimum wage fixing.

PN289

So for those three main public interest reasons, we say there is a compelling case for the Full Bench to defer the hearing of the ACTU applications until shortly after the Fair Pay Commission's first determination in the Spring of 2006 and if there is any concern that such a deferral may unfairly disadvantage employees, we say that should be allayed by the Commission's ability in making its decision in due course to have regard to the elapse of time since its previous Safety Net Review decision became operative in June of 2005 and that ability to have regard to the elapse of time would extend, of course, to having regard to the way in which the Fair Pay Commission itself may deal with that same issue.

PN290

VICE PRESIDENT ROSS: Might that result in different outcomes?

PN291

MR COLE: Well, of course the Act in respect of transitional employees guides. It doesn't direct the Commission. It is ultimately a question of discretion as to how the Commission views and weighs the criteria as to whether there are different outcomes, but clearly Parliament has made clear that emphasis is to be given to the desirability of consistency with decisions of the Fair Pay Commission and its assessments and statements on various economic issues. So at this stage and subject to checking the point raised by your Honour, that concludes what we wish to say in support of the proposal that the provisional directions be vacated and that any further consideration of the ACTU application should be deferred until shortly after the decision anticipated from the Fair Pay Commission in the Spring of 2006. If the Commission pleases.

PN292

JUSTICE GIUDICE: Mr Cole, what is the effect of the provisions which have commenced to operate in relation to the State wage cases which we're told have been initiated at various stages?

PN293

MR COLE: The effect is a prospective effect, your Honour. There is no contemporary impact on the powers. The status of decisions of the State tribunals in respect of employees in constitutional corporations changes from the commencement of the main provisions of the Act which, as I indicated, I have been instructed to inform the Commission, will be in March of 2006.

PN294

JUSTICE GIUDICE: And it's your understanding that once they commence to operate, what jurisdiction will the State Commissions have in relation to minimum wages?

PN295

MR COLE: Well, it is more a question, as I understand it, your Honour, as to what is the status or standing of decisions of the State tribunals in respect of employees in constitutional corporations that, because of the covering of the feel or the character of the Commonwealth legislation that any variation made by a State tribunal to award wage rates on or after the commencement date of the main provisions of the Work Choices Act will be of no effect, and would not be enforceable in respect of those employees.

PN296

VICE PRESIDENT ROSS: So they were still have effect in relation to employees of unincorporated associations that are not within the scope of the Federal award?

PN297

MR COLE: Yes, that’s ..... Now, the Commonwealth is in the process of indicating to the State tribunals the same view it is putting to this Commission, that any consideration of the ..... claims for safety net wage adjustments should be deferred on until after the Fair Pay Commission’s determination.

PN298

SENIOR DEPUTY PRESIDENT MARSH: Mr Cole, what would the standing of part heard cases be? Is that a matter for the regulations?

PN299

MR COLE: Actually, I don’t know, you Honour. I’m indebted to your Honour. As part of my instructions I had to place at risk of what we’re dealing with in light of various other issues. I can, in answer to your Honour - I am actually instructed to advise the Commission that regulations will be made to ensure as a minimum that part heard general paid claims in respect of employees in constitutional corporations are treated as having lapsed in that any notion that when accrued right for such claims to be dealt with under the old - if I can put it that way - Workplace Relations Act is extinguished.

PN300

SENIOR DEPUTY PRESIDENT MARSH: Did you say part heard cases in respect of wage claims generally, or any wage?

PN301

MR COLE: Part heard paid claims.

PN302

SENIOR DEPUTY PRESIDENT MARSH: Paid claims?

PN303

MR COLE: Yes, in respect of employees in constitutional corporations will be treated as having lapsed and that any notion of an accrued right for such claims to be dealt with under the Workplace Relations Act as it presently stands will be extinguished. And the regulations will also be made to ensure that the intended policy intention that the claims are to secure rather the intended policy intention that claims in respect of transitional employees must be dealt with in accordance with the criteria in the new legislation.

PN304

VICE PRESIDENT ROSS: Am I right in thinking that the late amendments to the Bill dealt with part heard MX matters or do MX matters fall within that general Statement?

PN305

MR COLE: I would have to take advice on that one.

PN306

VICE PRESIDENT LAWLER: Do those remarks apply to this application as well?

PN307

MR COLE: Yes, your Honour.

PN308

JUSTICE GIUDICE: It’s desirable to be clarified. I think you have clarified it.

PN309

VICE PRESIDENT LAWLER: But rather it depends on how the regulation is drafted. It rather depends how the regulation is drafted as to whether or not the words caused the whole of these applications to lapse or to cause them to lapse only insofar as they might relate to constitutional corporation of employees.

PN310

MR COLE: I’m sorry, I think we may be at risk of - I may have confused the position. The regulations for the secured two, on my present instructions, will secure two main results. The part heard paid claims in respect of employees of constitutional corporations will be treated as having lapsed and any notion that there’s an approved right to have such claims dealt with under the provisions of the present Workplace Relations Act will be extinguished. That’s claims effecting employees of constitutional corporations in the Federal jurisdiction. However, this will also extend to part heard paid claims in the State tribunals.

PN311

And then the second point is that in respect of claims such as the present claims relating to transitional employees the regulations will secure the intended policy position that these claims, whatever their status, part heard or otherwise, must be dealt with in accordance with criteria in the new Act.

PN312

VICE PRESIDENT LAWLER: Mr Cole, the claims in the present matter do not discriminate or distinguish between the employees of constitutional corporations and transitional employees. They are directed towards employers who are respondent to Federal awards. There’s a series of applications to amend existing awards. Those applications are out to extend the both classes of employees. Is it intended the regulations will preserve applications of the sought that we have in this case to the extent that they extend to transitional employees, or is the answer you just don’t know because they haven’t been drafted yet?

PN313

MR COLE: Well, the notion that the claims might be preserved in respect of transitional employees is certainly not inconsistent with my instructions that the primary intended effect of the regulations is to bring about a result that they must be determined having regard to the criteria in the Work Choices legislation. I suppose the alternative, your Honour, would be that fresh claims would need to be filed. I’m not instructed specifically as to how the regulations will deal with that, but rather that the regulations will secure the policy intention that, if you like, there will be no accrued right to have the claims in respect of transitional employees dealt with under the criteria in the old Act, but they must be determined on reference to the new Act. If the Commission pleases.

PN314

JUSTICE GIUDICE: Thanks, Mr Cole. Mr Harris.

PN315

MR HARRIS: Thank you, your Honour. We strongly support the position the Commonwealth has put by Mr Cole. In our submission this matter should be differed until the first decision of the Australian Fair Pay Commission which is expected in 2006. Further, in our submission the ACTU has presented no basis for advance of its claim on any earlier time table given the scheme of the Act as altered by the Work Choices Bill which was recently given royal assent. Mr Cole has already taken you to the relevant clauses of the Act as amended. I would stress simply- - -

PN316

VICE PRESIDENT LAWLER: No he hasn’t, Mr Harris.

PN317

MR HARRIS: Sorry, your Honour?

PN318

VICE PRESIDENT LAWLER: No, he hasn’t.

PN319

MR HARRIS: I apologise, your Honour.

PN320

VICE PRESIDENT LAWLER: He hasn’t taken us to the relevant clauses in the Act.

PN321

MR HARRIS: I apologise for that, your Honour. That was my understanding of the submissions. For my part I would stress the effect of schedule 13 of the Bill and in particular sub-clause 8(iv) which is on page 527 of the Bill which requires the Commission performing its functions at which schedule to have regard to the desirability of its decisions being consistent with wage decisions of the Australian Fair Pay Commission. Beyond this on the statutory requirement, we submit that it’s also strongly desirable and in the public interest in a general sense to maintain consistency of the minimum wage group between what we might now call the incorporated and non-incorporated stream in Federal awards.

PN322

We’re not incorporating employers to have their wages adjusted on a different time table and potentially by differing amounts to incorporated employers. This introduces a new level of complexity into the Federal system and potentially a competitive disadvantage for some employers. In our submission that statutory scheme provides no particular support for the adoption of a differential approach for the setting of minimum wages in the incorporated versus non-incorporated sectors particularly prior to the Australian Fair Pay Commission handing down a decision. Furthermore the ACTU may amend their application so that it only applies to non-incorporated employers.

PN323

It will still be the question of where and who these employers are, what industries they are employed in, their operating conditions and how many staff they employ. From our initial discussions with our members non-incorporated employers appear to be concentrated in particular industries and in particular sub-components of industries, but we can not say exactly where at this stage. A case conducted on this basis would natural be quite a different case from previous safety net proceedings. In particular the role of ACCI employer body would be different. We consider that our role may become one of coordinating or facilitating separate submissions and evidence from those industries which had a high degree of employing members in the non-incorporated sector.

PN324

JUSTICE GIUDICE: Mr Harris, do you anticipate that the Fair Pay Commission will accept submissions and evidence from people? Will it have parties so that in relation to the other half of the equation you will be making submissions to the Fair Pay Commission?

PN325

MR HARRIS: Indeed, your Honour. We expect that it will. We had expected that those submissions would have the character of being the macro basis in relation to the economy in general, although as happened previously in proceedings before the Australian Industrial Relations Commission, some industry level parties may wish to make some issues about particular issues. For example, those in the agricultural sector may continue to make submissions about circumstances such as drought, but we were thinking that those proceedings would have a general focus.

PN326

JUSTICE GIUDICE: Would you anticipate that - and obviously the AACI would make submissions, for example, about the criteria of the Fair Pay Commission is required to follow in fixing minimum wages?

PN327

MR HARRIS: That’s correct, your Honour. I would imagine it would have that role and I wouldn’t want to suggest that we would be vacating our role entirely if proceedings which were to continue before this Full Bench merely to foreshadow that it may be that we have a slightly different role, given the direction of the employers who would be subject to the proceedings.

PN328

JUSTICE GIUDICE: And would you anticipate that other parties would make submissions to the Fair Pay Commission?

PN329

MR HARRIS: Other employer organisations?

PN330

JUSTICE GIUDICE: Anybody.

PN331

MR HARRIS: I would imagine so. That would be a matter of interest to a variety of community organisations including ACTUs. My friend just informs me that I should stress that it may not have the same legal foundations.

PN332

JUSTICE GIUDICE: No, it wouldn’t be adversarial either.

PN333

MR HARRIS: We hope so, your Honour. So our preliminary discussions with members in this matter suggest that separate submissions may be put by a number of employer organisations including in the vehicle repair and retail sector, the retail pharmacy sector, in respect of some components of the restaurant catering sector, some components of the hospitality sector, some components of the retail sector. I would reiterate that we are not in a position to identify exactly where these non-incorporated employers may be located and that significant further work would need to be undertaken by employer organisations to provide a more accurate answer to that key threshold question.

PN334

To return to our primary position the current applications should be deferred until the first Australian Fair Pay Commission decision is handed down. If they are deferred until that date the need to engage in such an exercise of determining the scope of the employers subject to the current applications is diminished. This is because the possibility and capacity of parties in this Full Bench to consider the decision of the Australian Fair Pay Commission in your deliberations regarding non-incorporated employers and of reaching a consistent outcome for all employers who are covered by the Federal system. If the Commission pleases.

PN335

JUSTICE GIUDICE: Thanks, Mr Harris.

PN336

MS PENDLEBURY: Your Honours, Commissioners.

PN337

JUSTICE GIUDICE: Yes, Ms Pendlebury.

PN338

MS PENDLEBURY: The Australian Industry Group also seeks that this Commission vacate the provision or directions that have been set down in the proceedings and the Australian Industry Group also seeks that this Commission await the first decision of the Fair Pay Commission and then schedule hearings for the determining of the minimum wages for the transitional employees. The reasons are those already outlined by the Commonwealth on the ..... chamber. If the Commission pleases.

PN339

JUSTICE GIUDICE: Ms Wawn.

PN340

MS WAWN: Thank you, your Honour. The National Farmers Federation supports the submissions of the Commonwealth in relation to a deferment until the AFPC is handed down and we would like to turn to two components of the Commonwealth’s submissions in respect to the public interest test that we believe the Commission should take into account in determining that deferment. The first is the issue of the intention of Parliament and that is particularly clear in clause 8 of part 2 of schedule 13 that relates to the transitional employees and transitional employers of the Federal award system under the powers of the Commission that will continue after March.

PN341

That is quite clearly spelt out that the AFPC decisions have to be taken into account and it states, for example, the Commission must have regard to wage setting decisions of the AFPC and in particular any statements of the AFPC about the effect of wage increases on productivity, inflation and the levels of employment. It also considers the desirability of consistency between the Commission’s decisions, both Commission’s decisions. We also are particularly interested in the third component of Mr Cole’s public interest test and that relates to who are we actually talking about that will be left in the transitional system.

PN342

The ABS statistics unfortunately doesn’t include agriculture, but it seems that we are probably the ones that will be predominantly left in the system. Our statistics show that on an Australian wide level 90 per cent of farmers are not incorporated, only 10 per cent are. But then we have the State and Federal jurisdictional vagrancies as well as the Victorian referral of powers of the territories being covered by the Federal system. So who have we got left in the Federal system? We’ve obviously got New South Wales, Tasmania, Western Australia and South Australian in agriculture because Queensland doesn’t have any agricultural Federal award coverage. So there’s not only an industry issue to deal with, but also I state economic data analysis. Because we, for example, in the agricultural industry will only be putting evidence up for four states and in the remaining states it won’t cover.

PN343

The question then is which farmers are we talking about? Our initial statistics are showing us that about if 10 per cent are constitutional corporations we believe that the remaining 90 per cent will be around about 60 per cent Federal coverage 30 per cent state coverage, but that’s on initial estimations.

PN344

VICE PRESIDENT ROSS: Does that depend on whether they’re members of yours or not?

PN345

MS PENDLEBURY: That’s correct, your Honour, yes.

PN346

VICE PRESIDENT ROSS: The 90/10 split, is that reflected in the membership of the organisations you represent as well?

PN347

MS PENDLEBURY: We believe so, your Honour. That statistic is an ABS statistic based on some survey work they do. So where the data that our member organisations have, it’s inconclusive as to the split between incorporated and non-incorporated and certainly we believe that we will need to undertake a survey for membership in all states bar Victoria, to have a clearer understanding who is covered and who is not between effectively three systems - Work Choices, the State system and then the transitional system. That may take some time because obviously some are employers and some aren’t as well.

PN348

So it is difficult to determine and hence we believe the time in the deferment will assist organisations such as ours to exactly quantify who we are talking about to then determine what type of evidence we will need to put to the Commission and to a wage decision because obviously we’re looking at a snapshot and a certain component about membership, not all of it. Yet we’ll have probably more of an industry wide snapshot than say some other industries. As Mr Cole said it’s far closer, 50/50 per cent round about in retail. So they’d then have a different snapshot again to us.

PN349

So we believe that there is a need for the Commission to have a clear understanding of who it actually is talking about in considering in any determine of wages. So we will need that time for each industry sector to get that data which will form the basis of that evidence. Thank you, that’s all, your Honour.

PN350

JUSTICE GIUDICE: Mr Lawrence.

PN351

MR LAWRENCE: If the Commission pleases. ACCER’s position was put to the Commission on 16 November. We maintain that position. ACCER is particularly concerned about the position of low paid employees. It’s ACCER’s view that award dependent low paid employees are the most exposed employees under the new system. We say that with some confidence we’ve put our position in relation to the way in which the Commission should go about the matter at paragraphs 103 to 113 of the transcript of 16 November. We take the view that the AIRC should be the lead tribunal this year. We noted the comments of
Mr Cole in relation to the intention of the legislature that the Fair Pay Commission should be the lead body.

PN352

He did say on 16 November that we saw the way the system would developed would be such that the Fair Pay Commission would become the lead tribunal, but we don’t see that as being the position in 2006. The first point that Mr Cole raised today was the public interest question and the intention of Parliament. I make the comment that Parliament knew in the course of debating this matter, this Bill which has now passed into law, that there were proceedings before the Commission. Parliament has not done anything, to our knowledge, to stop the Commission proceeding before the Fair Pay Commission and that’s a matter that the Commission can take into consideration, in my submission.

PN353

The second point that Mr Cole raised was that we wouldn’t be certain - in fact it would be uncertain as to what the criteria would be when the Commission comes to hear this case. In my submission we’ll be under no uncertainty in this matter. We will know as from some date in March new criteria will apply. So it’s not a matter of starting off under the current provisions and then switching and causing uncertainty and confusion at some point in time. Rather we know now what the new criteria will be. Mr Cole’s third point was that the Commission will find itself with a whole new set of circumstances that it will have to determine in order to come to the conclusion.

PN354

That is the particular circumstances of the unincorporated employers. This was a theme taken up by supporters of the Commonwealth’s position and it’s been foreshadowed that the employers would seek to identify particular industries, look at particular circumstances and undertake an enquiry that would be very different to the kind of enquiry that’s been taken in the past. I ask the Commission to consider the implications of what is being put. We’ve been told that the Fair Pay Commission will make a decision in spring of 2006. Spring ends on
30 November in most peoples’ diaries. So some time towards the end of November we might get a decision from the Fair Pay Commission.

PN355

If the employers and the Commonwealth are right or their position is adopted by the Commission then at the end of 2006 applications can be lodged and from then on there’ll be a new process which will take some time, a very long time I would submit, to exhaust. So over November, December, January, February there will be a new process for the unincorporated employees and in my submission it’s quite likely from what the Commission has been told today that it will be March, April of 2007 before the employees who are still within the jurisdiction of this Commission will get an increase. Now, that’s a matter that should bear very heavily in the Commission’s consideration.

PN356

What we also know from what Mr Cole told us about this third aspect is that - as I recall his figures - of the award dependent employees 55 per cent are employees of corporations and 45 of unincorporated employers. Last year it was accepted by the Commission that 20 per cent of employees in Australia are award dependent. That means that the 20 per cent at the moment under the current system are spread between the Federal Commission and the State Commissions. From the start of the new system 11 per cent of award dependent employees will be covered by the Fair Pay Commission, nine per cent by this Commission and the State Commissions.

PN357

The Commission may speculate as to what the State Commissions will do in respect of their proportion of the nine per cent, but as we put forward last time the State Commissions can be expected to proceed in relation to their award dependent employees and it doesn’t matter whether they’re award dependent being employed by a corporation or an unincorporated employer, but we can expect that that will continue. Our position is that the nine per cent is a very significant proportion. It’s nine per cent of the workforce. And if the Commonwealth and the employers positions as taken up by this Commission and by State Commissions nine per cent of the most vulnerable workers in this country - nine per cent of the total workforce being amongst the most vulnerable
workers - will have to wait until early 2007 for a pay increase and we don’t think that is appropriate.

PN358

As I said we would expect that the State Commissions, perhaps less influenced by changes in legislation, would continue, but we think for the reasons that we gave on the last occasion there’s every reason for this Commission to continue. Can I just say one other thing in relation to the utility of what might come out of the Fair Pay Commission. As the Commission will be well aware the legislation includes a provision for a classification review and the classification review is, as we understand it, underway and at some stage the classification review will get to the Fair Pay Commission with or without directions and the Fair Pay Commission will then set about collapsing all of the

PN359

award classifications into a number of new classifications in a similar way to the way in which the Victorian Employee Relations Commission turned classifications in old State awards into new pay classification levels in the minimum wages orders. We would expect that that would be a very substantial task to do properly. That’s another reason why we think the Fair Pay Commission will not be in a position to hand down a position until later in the year if it’s to do the integration properly. So at the end of the year we would expect that the Fair Pay Commission would have looked at the Federal minimum wage and have adjusted that.

PN360

Secondly the Fair Pay Commission would have considered the whole classification structure and brought in new rates of pay for that. It may be the case that the Fair Pay Commission will not strike an increase for a classification above the Federal minimum wage. It may be that in the translation of existing award classification into the new classification system that the Fair Pay Commission will have to take into account that there will be ups and downs, pluses and minuses and will use an increase in pay as a means of ensuring that no one will be worse off.

PN361

JUSTICE GIUDICE: Well, what if the Fair Pay Commission decided that wages should go down? It seems quite possible having regard to the criteria that they’d have to apply.

PN362

MR LAWRENCE: With a Federal minimum wage, as I read the Act, it wouldn’t be able to do that. It’s stuck with that and it may decide for one reason or another to not move the Federal minimum wage. It could also decide in looking at the development of the new classification structure that there would simply be a translation and if some people were worse off under the new structure there’d be a no disadvantage provision which would maintain their rates of pay until such time as the classification structure - that is it would not be obliged to give anyone an increase in pay during 2006.

PN363

Now, if that was the outcome or any of those aspects that I’ve alerted to occurred in the Fair Pay Commission then the Commission is not going to get any guidance from the Fair Pay Commission. It’s going to get a classification structure that will be different to the traditional award classification structured and it might not even get a pay increase. We would say in those circumstances it would be absurd that the Commission in continuing it’s statutory function would be inhibited by the initial adjustment by the Fair Pay Commission to the award structure in fulfilling it’s initial obligations under the Act.

PN364

That’s why we say that it makes a lot more sense to continue to system as it has been for 2006, it would give the Fair Pay Commission the opportunity of reviewing the classification structures and translating to a new system without the need to quickly bring down a decision. And as we’ve said previously, there’s no reason why the Fair Pay Commission could not - following on from a decision of this Commission, and we would expect State Commissions - increase the classification rates as they exist at the moment and the Federal minimum wage to enable increases to be given prior to the proper integration or proper translation to the new system.

PN365

So we say that there are a number of difficulties that confront the Commission and potential detriment that confronts the low paid if the Commission simply waits until the Fair Pay Commission has made its decision.

PN366

JUSTICE GIUDICE: Mr Lawrence, I wonder if you could have a look at something which I think is section 8 of schedule 13. It may have been section 8 of schedule 1 at some stage in its life. It may not even be 13 now, but it’s headed Performance of Commission’s Functions Under This Schedule. It’s the Commission’s responsibilities in relation to transitional employees, as they’re called.

PN367

MR LAWRENCE: Yes.

PN368

JUSTICE GIUDICE: I’m referring in particular to - it’s probably section 8(ii) now, I’m not sure, but it was once - which contains three criteria, (a), (b) and (c). The matters that the Commission is to have regard to in maintaining a safety net. I want to draw your attention to (b) and (c) in particular which suggests that there should be a relationship between the minimum wages and other entitlements of transitional employees and those covered by the Fair Pay Commission. Doesn’t that pose a problem for the submission that you’re making, at least from March?

PN369

MR LAWRENCE: The intention of Parliament is to seek to avoid, so far as it is entitled to do, different rates of pay. Now, this raises the question of whether or not the constitution would permit that sort of inhibition. We made some submissions on the last occasion about the way in which these provisions have been drafted. It’s clear that the drafts person has been aware of the limitations that are imposed on in Parliament in relation to the restrictions on the Commission.

PN370

JUSTICE GIUDICE: Well, it’s thought there’s no power to fix wages directly in relation to employees covered by 5135 powers.

PN371

MR LAWRENCE: Yes. And it would mean, in our submission, that if the provision said the AIRC in exercising its functions under this schedule shall apply, the decisions of the Fair Pay Commission then, that would be unconstitutional, that would be going too far. What the drafts person has done here is to try to work out ways in which there would be a limitation on the power of the Commission. Now, we would accept that it’s undesirable to have different rates of pay in various areas of employment. You can have them for a short time. We’ve lived with inconsistencies, transitional inconsistencies in the past.

PN372

For example, Federal award employees can sometimes get their increases before State award employees. The concern that the Commission should have in looking at this factor is not to engage in a situation that will be expected to have the result that there will be inconsistencies on a medium to long term basis. It’s partly because of that consideration that we said on the last occasion that we would intend, if the Commission went ahead and made a decision in this matter, we would intend going to the Fair Pay Commission and putting to it that there should be increases in pay to bring about some uniformity in rates of pay between the State jurisdictions, the schedule 13 employers and employees and the corporations area.

PN373

JUSTICE GIUDICE: You’d have a potential for leap frog in that mixture.

PN374

MR LAWRENCE: In my submission no, your Honour. The State Commissions presumably are going to go ahead with theirs. There’d be different rates of pay. It would be an interest of the whole of the economy if there could be some consistency in rates of pay. Now, it’s interesting in this day when we talk about doing away with general prescriptions, but the Commonwealth in putting its submissions today said there shouldn’t be inconsistencies and I think the comment was made you should have different rates of pay for shops that are next to each other. That’s the substance of what was put anyway.

PN375

We would say that it’s in the interest of all tribunals and in the interest of the economy as a whole that there be some consistency between State decisions regarding the unincorporated or those employers who are beyond the constitutional reach of the Commonwealth, schedule 13 parties and those that fall clearly within the scope of the Fair Pay Commission. We think that the way in which we’ve put forward the way of resolving it is best to do that. So to answer your question in short, your Honour, we don’t see that as an inhibition - that particular paragraph that you pointed to - as an inhibition on the cause of action that we have put past.

PN376

If I might say this in relation to the next provision where reference is made to the Fair Pay Commission. Again this is support for the view that the primary function of the legislation is not to require the Commission to give effect to the Fair Pay Commission decisions. That’s constitutional, but also it’s apparent in the drafting. And if it turns out in this first year that there isn’t a decision of the Fair Pay Commission then that should not be a limitation of this Commission exercising the powers that you’ve drawn attention to, your Honour. They’re all the submissions that I wish to put on behalf of ACCER.

PN377

JUSTICE GIUDICE: Thanks, Mr Lawrence. Mr Harnath.

PN378

MR HARNATH: Thank you, your Honour. If the Commission pleases we take a similar view to that expressed by Mr Harris on behalf of ACCI in supporting the Commonwealth’s submission.

PN379

JUSTICE GIUDICE: Thanks, Mr Harnath. Any other submissions?
Mr Bancroft, do you wish to make any submissions?

PN380

MR BANCROFT: Your Honour, if I could refer to Mr Watts. If I may hear what he has to say then at that stage we’ll make a submission.

PN381

JUSTICE GIUDICE: Yes, all right. Mr Cole, just a couple of questions. We’re just considering whether we should adjourn to enable to you check those sections before Mr Watts makes his submission. It might make it easier, but is that going to be practical for you to get the answer on a couple of those things?

PN382

MR COLE: I would expect so, your Honour. An adjournment of perhaps 20 minutes?

PN383

JUSTICE GIUDICE: Yes. Very well. We’ll resume at 25 to 12.

PN384

VICE PRESIDENT LAWLER: Just before you go, Mr Cole. Am I right in saying on my reading of the Act there’s nothing in the Act that requires the Australian Fair Pay Commission to hand down at first place their view in the spring of 2006?

PN385

MR COLE: That is correct, your Honour.

PN386

VICE PRESIDENT LAWLER: That’s something that’s been said as a wish or a desire or a goal by the government, that the Commission’s, at least ..... into the government, is it not?

PN387

MR COLE: Yes, that is right. The government has, that’s a publicly announced expectation of the government. It is not a legal obligation on the Fair Pay Commission.

PN388

VICE PRESIDENT LAWLER: Is there anything in the explanatory memorandum or the second reading speech that you can point me too as well? See, one of the things that strikes me in relation to this suggestion that it’s intended the Parliament is clear, is that it would have been the simplest thing for the Parliament to say that the AIRC shall not conduct any general review of wages for transitional employees until the Australian Fair Pay Commission has made its first wage determination. But it hasn’t done so. And the language of the Act is just as apt, it seems to me, to apply to a circumstance where, for example, theoretically the Fair Pay Commission never makes a decision.

PN389

MR COLE: Yes.

PN390

VICE PRESIDENT LAWLER: In any event, my question was is there something in the extensive materials that you’ve pointed to that supports the obstruction that you say is clear and obvious?

PN391

VICE PRESIDENT ROSS: Perhaps you’ll consider that, Mr Cole.

PN392

MR COLE: Yes.

PN393

VICE PRESIDENT ROSS: Very well. We’ll adjourn until 20 to 12.

<SHORT ADJOURNMENT [11.16AM]
<RESUMED [11.39AM]

PN394

JUSTICE GIUDICE: Mr Cole.

PN395

MR COLE: Thank you, your Honour. I am in a position to respond, I think, to all questions that were asked. If I may first respond to your Honour, Lawler VP’s question. We’re not aware of anything in the extrinsic materials, your Honour, in respect of the expectation about the Fair Pay Commission bringing down its first determination in the spring of 2006. I could make some brief further comments. In the way your Honour asked the question, I think your Honour posited that it would have been open to the parliament to have in effect, and this is my word, imposed an embargo in effect on the Commission’s powers, temporary embargo on the Commission’s powers in respect of transition and employees pending such a determination by the Fair Pay Commission.

PN396

Well, with respect, that would assume that there were no constitutional issues perhaps in respect of the position of such a constraint. In any event, it was not considered appropriate, noting that the Commission’s jurisdiction relates to prevention and settlement of disputes, so it’s not considered appropriate to seek to impose such a restraint assuming - - -

PN397

VICE PRESIDENT LAWLER: Are you speaking for the parliament at the moment, when you say it was not considered appropriate?

PN398

MR COLE: Well, by the government too, in terms of the bill that the government introduced. It was not considered appropriate by the government to seek to impose such a blanket restraint on the Commission, given the Commission’s role to prevent and settle disputes. However, that in no way detracts from our strong submission that as a matter of discretion in the public interest, the Commission itself, with respect, should observe what we say is the clear policy intent of the legislation, that the Commission should not make a further general wage determination ahead of the decision of the Fair Pay Commission.

PN399

Of course, the burden of our submissions this morning was to try to expose the public interest grounds that we say the Commission should be cognisant of and indeed should regard as decisive in regards of the appropriate exercise of its jurisdiction. I come back to the point that the Commission has a wide jurisdiction in respect of the timing and other arrangements for exercising its power. Now, the question was raised as to the status of part-heard section 170MX matters. As I understand it, and as I am instructed, that is a matter that would be dealt with in regulations and those instructing me did not understand that there is anything presently in the Act that deals explicitly with that issue.

PN400

But there is a strong argument that even in the absence of regulations and on the authority of the High Court Dawallin decision, that part-heard matters in the nature of arbitration and claims would lapse. Now, I should just emphasise, again on my instructions, that as to the regulations that will be made and I’m instructed that as a minimum, they will ensure that part-heard and the operative word is general pay claims in respect of employees and constitutional corporations are treated as having lapsed. Now, the reference to part-heard and general pay claims would certainly cover claims such as those currently before the Full Bench.

PN401

But as the detail of what may be otherwise dealt with in regulations has not necessarily been finalised, I don’t wish to be taken to making an exhaustive comment about every conceivable type of pay claim, but as to part-heard general pay claims explicitly such as those presently before the Bench, the regulations will ensure that they are treated as having lapsed. Your Honour, the President, asked whether the provision in the Act, that in effect ensures that for the purposes of the Fair Pay Commission’s operations - if I can put it this way, the base on which they are to operate is award rates of pay including the 2005 safety net decision. Your Honour, the President asked whether that is presently in operation and the answer to that, your Honour, is no. That is dealt within section 90ZN.

PN402

JUSTICE GIUDICE: 90ZN?

PN403

MR COLE: Of the Act. I was asked more generally what provisions have commenced and they are the schedule 1A that relates to the establishment and operation of the Fair Pay Commission, schedule 3 that relates to school-based apprentices and trainees, schedule 3A that deals with the question of redundancy pay in small business, and section 4 that provides more generally for transitional provisions.

PN404

JUSTICE GIUDICE: Mr Cole, could I just get some clarification on schedule 1A?

PN405

MR COLE: Yes, your Honour.

PN406

JUSTICE GIUDICE: What sections are they?

PN407

MR COLE: This is the new schedule 1A to the Act. It’s a schedule to the Act rather than a section of the Act, your Honour, as I understand it.

PN408

JUSTICE GIUDICE: Well, it will have sections in it, though.

PN409

MR COLE: It does comprise a number of sections.

PN410

JUSTICE GIUDICE: Well, it’s a stand-alone schedule?

PN411

MR COLE: It’s a stand-alone schedule. If the Commission pleases.

PN412

JUSTICE GIUDICE: You don’t have copies of that, I suppose, Mr Cole?

PN413

MR COLE: Of that schedule, your Honour? No, but I can undertake to make them available to the Commission during the course of the remainder of the day.

PN414

JUSTICE GIUDICE: Yes. Are they available somewhere? I know we had this discussion before. Look, I don’t want to be difficult about this, Mr Cole, we just want to make sure we have the right document.

PN415

MR COLE: Well, they are in the amendments, your Honour, that were introduced, the government amendments in the senate, which are available on the Employment and Workplace Relations website. I have omitted to check whether the whole consolidated - unofficial consolidated Act is available, but I will make sure, through your Honour’s associate, that we identify whether we - - -

PN416

JUSTICE GIUDICE: Yes.

PN417

VICE PRESIDENT LAWLER: So schedule 1 of the Provisional Work Choices Bill was amended to extract the Australian Fair Pay Commission provisions and they were inserted in a new schedule 1A to the bill?

PN418

MR COLE: That is essentially as I understand it, your Honour.

PN419

VICE PRESIDENT LAWLER: And then the commencement table in section 2 was amended accordingly, presumably?

PN420

MR COLE: Yes. If the Commission pleases.

PN421

JUSTICE GIUDICE: So those provisions are Part 1A, are they, of the original bill?

PN422

MR COLE: Sorry, your Honour, I don’t actually have the bill - - -

PN423

JUSTICE GIUDICE: Yes, very well.

PN424

MR COLE: - - - with me at this point.

PN425

JUSTICE GIUDICE: Perhaps if you could just do as you indicated you would?

PN426

MR COLE: Yes.

PN427

JUSTICE GIUDICE: Yes. Thank you. Yes, Mr Watts?

PN428

MR WATTS: Thank you, your Honour. What is being asked of you is that you in fact do what parliament could not do; that you go further, but that you exercise your discretion to not hear a matter the parliament was given power to hear, exercise your discretion to in fact follow the Fair Pay Commission’s determination rather than to run a procedure as required under the what will be the new section 8 of schedule 13. Now, your Honour, I think that there’s a couple of concessions we need to make; one is that there will be no resolution between now and 1 March, and we expect that we will be operating under a new environment, and that it is our intention once in fact these laws become operative, to make application to vary the awards that we seek to have varied as part of this application.

PN429

We note that there are a couple of awards at the very least which we’ve made application to vary which apply only to the state of Victoria, or other territories. We would submit that unless the Act is changed, that it’s likely that the Commission will have limited power to deal with those employees covered by those awards and that they will have no exclusion employees within schedule 13, employees within them. We don’t see it’s appropriate to do anything other than flag those changes at this point in time. It’s our expectation in fact that we do make submissions to the Commission, should the Commission feel it be appropriate for us to continue to do so, that we will make submissions taking into account those matters that you took Mr Lawrence to in schedule 13(8)(2)(a), (b) and (c).

PN430

They will be matters that will be core to our submissions. What we say in relation to (b) in particular - and I think you took Mr Lawrence to the issue of, an important issue I think, to the Commission’s considerations, having regard to when looking at maintaining a minimum safety net entitlement for transitional employees, looking at the principle of wages and other monetary entitlements, when looking at those, not placing them at a disadvantage compared to the entitlements of employees within the meaning of subsection 4AA(A1), that being a definition of constitutional corporations - sorry, employees of constitutional corporations, and then further in (c) it goes to 4AB(1) which is in fact the definition of constitutional corporation.

PN431

What we say is that those are matters that should be dealt with in our submissions as a whole. We, as part of all the things that we put to the Commission, we look at the relative wages of employees, in other determinations and through other monetary wage setting processes, and not just those decisions of this Commission. We believe that in these submissions, we should be looking at this issue, and will be required to look at the issue of whether or not the claims that are before the Commission place the entitlements of employees at a comparative disadvantage. Now, that will be a requirement, that’s something we say should be addressed in the submissions before the Commission in these matters.

PN432

The question that’s been put to you, you should exercise your discretion to ensure that fact, that you have regard rather than go - rather than just have regard to the determination of the Fair Pay Commission, whenever they may be, that in fact you have an obligation to exercise your discretion to wait until the Fair Pay Commission makes its determination. Now, as Lawler VP said, there is no requirement, it’s been conceded by the commonwealth, there is no requirement that the Fair Pay Commission make a determination in the spring of next year. The only requirement on the Fair Pay Commission in schedule 1A, as you’ll see when you finally receive a copy of schedule 1A, is that they make a determination at some stage as to whether they will in fact go ahead with making a determination.

PN433

They need their first stage of preparations to ensure - is to decide whether in fact they will make the determination at all, let alone what that determination be. We say that the Commission is being asked to go further than parliament could to exercise a discretion. It’s not in the public interest that the Commission exercise its discretion in so far as it has any discretion. Now, I can go to Mr Cole’s three points that are in support of his section 111(1)(g) application. The first point goes to the will of parliament. That being the will of parliament that the Australian Fair Pay Commission should be the lead body in establishing minimum wages. Well, it can’t do any more, give to the Australian Fair Pay Commission, any more than it has the power to give the Fair Pay Commission.

PN434

The Fair Pay Commission no doubt will take into account a whole range of considerations, one of which may be this Commission’s determination. Failing that, the State Commission’s determination, the wage price index, other issues. But the Australian Fair Pay Commission has a role to do and this Commission has a role to do and they are distinctly separate. The Act clarifies and makes it clear that whilst the Commission must have regard to wage settling decisions of the Australian Fair Pay Commission, it is not bound to do so. The second point Mr Cole makes - - -

PN435

JUSTICE GIUDICE: It is bound to have regard to it, isn’t it?

PN436

MR WATTS: It’s bound to have regard to - - -

PN437

JUSTICE GIUDICE: Yes.

PN438

MR WATTS: If indeed, if they had made any determination at all, your Honour. It does not say, and the Act does not say, that the Commission - and of course leaving aside constitutional limitations, the Act does not say that the Commission shall not. Just that it must have regard to a determination. Now, it’s quite clear that as of March the Commission must have regard to the wage setting decisions of the Australian Fair Pay Commission. There will be, we would suspect, no wage setting decisions of the Australian Fair Pay Commission until some stage late next year. Now, there is no requirement that the Commission stay any hearing, delay any process or not proceed with any process the cases currently before it, only that it have regard to, and have regard to a whole range of other factors, including those factors in schedule 13A(2)(a), (b) and (c).

PN439

Now, those matters all will be needed to be considered by the Commission and indeed, any decision, if in fact there is a decision of the Australian Fair Pay Commission, that will also need to be considered. If there is one. Now, at point 2 Mr Cole goes to the recipe for confusion, what he says is the - it’s clear from the outset that the legislative scheme will change. I think what I said earlier is that we concede that it will change, that there will be change. It’s our intention that if the provisional directions continue in the non-provisional form, then we’d make submissions to the Commission on the basis that we take into consideration all factors be required by the new legislative scheme.

PN440

Now, as regards possible regulatory change, there may be a whole range of regulatory matters which may or may not be brought into effect under various powers of the Commission - the minister has under transitional and other provisions where the minister can make regulation. We haven’t seen any draft of any regulations at this stage and we’d be second-guessing. We’re happy to work under the assumption that the Act will come into place in March. Our submissions to the Commission during February will assume that to be the case. We don’t see that there be any confusion or any delay or any need for any delay.

PN441

The third point Mr Coles makes is that the Bench should be fully informed about those employees which are transitional employees. It is those employees that we’ve incorporated, associations, who are currently covered by federal awards. Mr Cole says that the Commission must have regard to looking at the circumstances of transitional employees. It’s no different to what we do, the ACTU, it’s no different to what we do in all cases. We detail who we are talking about. This year, and we suspect subsequent years, investigate changes, reporting methods pretty quickly. There will be some difficulty in identifying who transitional employees are with a great deal of certainty.

PN442

We’re indebted to Mr Cole, though, for providing us with some level of detail of the industries we’re talking about. We don’t necessarily disagree, we’re talking about retail, hospitality and health and community services and agriculture as being some of the major employees of unincorporated bodies. What we - and Mr Lawrence went to this in part - say though with most of those employees in unincorporated bodies, that they remain within the state jurisdiction. Establishing exactly how many are currently covered by the federal jurisdiction, and there will be transitional employees, schedule 13 employees and how many will remain with the state - or continue to work within the state jurisdiction is a little unclear.

PN443

But whilst there might be some confusion in that area, we believe that we can with some level of precision identify who we are talking about. It will be our intention to do that in our submissions. We apparently are undertaking some work in that area. What we do say is that the terms of unincorporated associations and who they employ, it’s our understanding that most of those employees will remain within the state jurisdictions. There will be particular areas that we can identify where transitional employees will be - can be identified. In particular, I think we say that hospitality and retail, it will be submitted, numbers of transitional employees in those areas.

PN444

As I said, your Honour, we would intend to make application to withdraw application for those awards which would have no transitional employees within them. The proposal from Mr Harris and Mrs Wawn, that we have a survey, or that they survey their members, but in any event, given that that will take so long , we might as well wait for the Fair Pay Commission’s decision and then simply flow on whatever their decision is, so it has very little merit to it at all. The Commission has an obligation to proceed and we ask that the Commission proceed and we ask that the Commission proceed. We believe that it’s appropriate to proceed under the assumption the legislation will continue. What we must focus our minds on is whether clause 8 of schedule 13 requires the Commission not to proceed.

PN445

Requires the Commission to wait until the Fair Pay Commission makes its determination, whenever that may be. Whether there is one in 2006, whether there is one in 2007, whenever it happens to be, whether we simply stay these proceedings or not, and we say that it’s not what the Act says. It might be the government’s desire that that might occur, it’s not what the Act says. The Act does not say that the Commission should stay its hand. What the Act says is that the Commission should take into consideration, if in fact there is a decision of the Australian Fair Pay Commission.

PN446

VICE PRESIDENT LAWLER: But that’s not determinative, surely? That simply gives rise to a discretionary situation, whether a range of factors - isn’t it inherently unsatisfactory to do something which is apt to produce a regime of different people covered by the same award will be paid different amounts for doing the same work? That’s the risk with proceeding down this track.

PN447

MR WATTS: Let it be clear what you’re being asked to actually do is to not make a decision and to simply rubber-stamp the Australian Fair Pay Commission’s decision. That’s what you’re being asked to do. That there be some discussion as to the desirability of that, and in any event, whether it be prior to the Australian Fair Pay Commission making a determination or after it makes a determination, if indeed it makes a determination that is applicable to this application at all, if it makes one at all. We say that in the balance of convenience, if there is to be convenience, is that the matter proceed.

PN448

There is no requirement for the Australian Fair Pay Commission to do anything other than to commence its investigations under schedule 1A, to commence those investigations as of - those - that whatever form that process takes and however long it takes is a matter for them. The process is a matter for them. The timing of any decision, if they make a decision at all, is a matter for them. We’d say that the balance of convenience is that the Commission has a statutory obligation, the statutory obligation is that it ensure minimum safety net entitlements are maintained for wages for - minimum safety net entitlements and wages are maintained for transitional employees. It has a clear statutory obligation.

PN449

To wait for never-never land, and for a period that is unspecified, we’d say on the balance of convenience and in terms of exercising its discretion, the Commission should proceed. It is a mess. Part of that mess is that there will be, if the Commission does decide to exercise its discretion, if indeed it does have that discretion and it goes to that extent, if the Commission does exercise what it believes to be its discretion and not proceed, in the interim we’d suspect that there will be determinations at the state tribunals. Those state tribunals overall, in terms of unincorporated employees, will be making decisions that will be of a greater number in terms of employees than the total number of transitional employees that will be considered, that will be part of this Bench’s determination.

PN450

So it’s a mess in any event. We suspect that the figures that are coming out of the states at the moment are that we could have up to two million employees will be covered solely within the state jurisdiction. Now, there will be a significantly smaller number than that, that will flow from any decision of transitional employees as a result of any decision of this Bench. It may well be that it’s a state jurisdiction either operating independently or in some form of coordinated approach, where they believe that’s desirable. They will in fact be setting the lead, but they’ll be setting the lead for a discrete group of employees in discrete industries.

PN451

Now, what they are, the type and nature and character of those employees will be matters for further submissions to this Bench, but what we’d submit is that they’re sufficiently discrete to enable these matters to proceed without undue harm or confusion being caused within the economy. We would submit that it’s contradictory on one hand to say it’s in the public interest not to proceed, and yet it’s still in the public interest to follow the Australian Fair Pay Commission’s decision, whatever that may be and whatever evidence they rely on to make their decision. But we say that it’s not in the public interest for the Commission to exercise its discretion and to proceed, if it has that discretion, that it has a clear role, that that role is to maintain a minimum wage for transitional employees.

PN452

It can’t be put on hold, and there’s no requirement - that requirement, that statutory requirement be put on hold until such time as the Fair Pay Commission decides whether or not it will exercise its statutory obligation to make a determination as to whether it makes a decision in the future, and for whom it makes a decision. Your Honours, just finally, what we say in relation to the proposition by Mr Harris that there shouldn’t be - and I think supporting Mr Cole’s proposition, that there shouldn’t be differential treatment between incorporated and unincorporated bodies. That’s not what the Act says. What it says is it must have regard to a range of factors, but nor does it say who should go first.

PN453

Mr Cole says that the Australian Fair Pay Commission is now the lead body in terms of wage determinations and you should follow their determinations, that is a public policy issue and one you should exercise your discretion in adopting. It’s not what the Act says. The Act does not say that you must wait, you must stay your hand. If the Commission pleases.

PN454

JUSTICE GIUDICE: Thanks, Mr Watts. Mr Cole?

PN455

MR COLE: If the Commission pleases, there’s just one matter that fell from my friend’s lips that we need to comment on. He used the term rubber stamp, that the commonwealth is saying that this Commission should rubber-stamp decisions of the Fair Pay Commission. That may be his interpretation as to what is being put. We have not in any way suggested that the Commission should do anything else than deal with the matters in due course and good faith in light of the criteria in the Act and the submissions of the parties. Perhaps while I am on my feet, I can just say that my friend also made something of the fact that the detail of the regulations is not available.

PN456

If the Commission felt that that were a relevant consideration, of course it is open to the Commission to resume the directions hearing itself in March; let me put that seriously to the Commission as another option that the Commission could consider if the Commission is concerned about the fact that the currently-applicable Act is the Workplace Relations Act and that there are changes not yet in effect. Now, this goes of course to the issue we raised about it being undesirable in the public interest to commence proceedings under one set of legislation, when on any reasonable expectation that they will be concluded under different provisions.

PN457

So we put that for what it’s worth, that it’s also open to the Commission to resume the directions hearing itself shortly after the commencement of legislation in March, if the Commission shared some of my friend’s concerns, and if the Commission is with us in terms of the undesirability in the public interest on starting on one basis and determining the matter on another basis. If the Commission pleases.

PN458

JUSTICE GIUDICE: Yes, Mr Cole. Just taking that point, I know it’s not your proposal, but what would we know then that we don’t know now? I suppose we might know something more about the transitional provisions.

PN459

MR COLE: You would have certainty as to the regulations, your Honour. It would simply be the case that the law as such would be in operation and perhaps it’s not so much a question as to what the Commission would know, but what - and this was part of our submission - other parties understand is the nature of the case and what other parties understand about the different nature of the case compared with the traditional case.

PN460

JUSTICE GIUDICE: Thanks, Mr Cole. Yes?

PN461

MR WATTS: Your Honour, I apologise, I neglected to make one point, and that is that we continue to press the dates and I spoke to those in earlier proceedings, and I don’t wish to repeat myself unless desired, but we continue to press the dates.

PN462

JUSTICE GIUDICE: As originally suggested?

PN463

MR WATTS: As originally suggested.

PN464

JUSTICE GIUDICE: Yes. Mr Bancroft?

PN465

MR BANCROFT: Your Honour, on 16 November, I submitted that the state and territory governments did not oppose the draft directions sought by the ACTU. Our position has not changed in respect to those draft directions. If the Commission pleases.

PN466

JUSTICE GIUDICE: Yes. Thank you, Mr Bancroft. Thank you all for your submissions. We will consider what’s been put and we will publish a decision on the commonwealth’s application, but it won’t be today. I expect it will be before Christmas, and depending upon that decision, we will give consideration to what other directions should be made. We will now adjourn.

<ADJOURNED INDEFINITELY [12.17PM]