C2007/458, Transcript of Proceedings [2007] AIRCTrans 402 (15 August 2007)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 17265-1

JUSTICE GIUDICE, PRESIDENT
VICE PRESIDENT LAWLER
VICE PRESIDENT WATSON
SENIOR DEPUTY PRESIDENT WATSON
SENIOR DEPUTY PRESIDENT HARRISON
SENIOR DEPUTY PRESIDENT ACTON
COMMISSIONER SMITH

C2007/495 C2007/458 C2007/2902 C2007/2903 C2007/2904 C2007/2905 C2007/2906 C2007/2907 C2007/459 C2007/463 C2007/462 C2007/461 C2007/460 C2007/2915 C2007/2917 C2007/2918 C2007/467 C2007/468 C2007/469 C2007/466 C2007/2919 C2007/2921 C2007/2922 C2007/2923 C2007/2924 C2007/496

s.553(1) - Appl’n for variation of award (maintain min. safety net entitlements)
Application by The Australian Workers’ Union
(C2007/495)

MELBOURNE

9.58AM, MONDAY, 13 AUGUST 2007

PN1

MR R WATTS: I appear with MS M GAYNOR of the ACTU and the applicant unions also with MR N SWANCOTT from the LHMU.

PN2

MR P O'GRADY: I appear pursuant to leave granted at the directions hearing for the Australian Catholic Council for Employment Relations.

PN3

MR T COLE: I appear with MR W LA administer for the Employment of Workplace Relations on behalf of the Commonwealth.

PN4

MR M MEAD: I appear on behalf of the Australian Industry Group.

PN5

MS D WAWN: I appear with MR C HENNINGS from the National Farmers Federation. We also represent our member organisations respondent to the Horticulture Industry Award. Thank you.

PN6

MR D MAMMONE: I continue my appearance for ACCI, a number of respondents in this matter. Also with me today is MR P EBERHARD. There are two changes to those respondents we act for. Further to exhibit ACCI1 we also appear and act for the Queensland Chamber of Commerce and Industry, Pharmacy Guild of Australia and the Master Plumbers and Mechanical Services Association of Australia. The Commission will note that the MPMSAA was given leave to intervene at the directions hearing. And with regard to the Queensland Chamber of Commerce and the Pharmacy Guild our office received authorities to Act after the directions hearing. If it please the Commission.

PN7

MS L YILMAZ: I appear for the Victorian Automobile Chamber of Commerce in matter C2007/2906 and C2007/2902.

PN8

MR T KLEMIS: I appear on behalf of the Bread Manufactures Industrial Association of Australia and also on behalf of the Australia Meat Industry Council.

PN9

MR J HARGRAVES: I appear on behalf of the Industry Association of Australia.

PN10

MR M FELLE: I appear on behalf of Jobs Australia.

PN11

MR A LESZCZYNSKI: I appear on behalf of Finance Sector Union of Australia.

PN12

JUSTICE GIUDICE: Are there any objections to any of the applications for leave to appear or intervene? They are all granted. Mr Watts.

PN13

MR WATTS: Thank you, your Honour. Your Honour, it might be appropriate with leave from you whether we formally tendered our submissions. It might be appropriate to.

PN14

JUSTICE GIUDICE: Yes, very well. Are there any ACTU exhibits as yet?

PN15

MR WATTS: No, there’s only the submissions.

PN16

JUSTICE GIUDICE: Very well.

EXHIBIT #ACTU1 SUBMISSIONS OF ACTU DATED 08/08/2007

PN17

MR WATTS: Thank you, your Honour. Your Honour, the ACTU seeks to flow on the Australian Fair Pay decision to increase rates by 10.26 or $5.30 per week. We do so with some reluctance in the sense that we understand that there is a statutory regime and the Commission itself has recognised that the Australian Fair Pay Commission in terms of the matter of setting minimum wages is the
pre-eminent body, I think they’re the words used, of the Commission in a previous decision. We say reluctantly in the sense that the Australian Fair Pay Commission decision in this particular occasion is far from a generous decision and we put it in the context of the current rate of inflation and we understand today that the Reserve Bank statement of monetary policy is to be released this morning.

PN18

It’s anticipated that there be a further upwards forecast of inflationary trends in the statement. So our reluctance is compounded by that, but nevertheless we seek a flow on of the decision. The economy are strong. The material that we have provided to the Commission as a party we believe supports that increase that we sought. It is an increase that is more than manageable. There appears to be no objections to the increase from any of the parties, whether it be employers or the commonwealth. There are a few issues of difference between us in terms of the way we’ve come to our conclusions and how we put them, but in the end I think you have a unanimous view before you, as I understand it, in relation to the flow on of the AFPC’s latest decision to the Awards that are before you.

PN19

There are a couple of issues, your Honour. We go to them in our submissions. One of those is rounding. We have sought a rounding in similar terms to previous Commission’s decision. Once again I don’t think there’s any difference between the parties in relation to that. That is a difference from the AFPC’s decision. They have failed to round despite, I think, numerous requests from various parties that they do so. They’ve made it be that there are statutory limitations on their ability to do so. The ACTU has a view that there is no limitation, but there may be a view within the AFPC that rounding was not possible. However, for the sake of - - -

PN20

JUSTICE GIUDICE: Does the AFPC decision address the rounding issue?

PN21

MR WATTS: Not that I understand it does, your Honour, although I'll get back to you on that. My understanding is that it fails to address that issue.

PN22

JUSTICE GIUDICE: Yes. I think that a number of parties had raised the issue, hadn’t they, in their submissions?

PN23

MR WATTS: I think just about all the major parties certainly raised it.

PN24

JUSTICE GIUDICE: Yes.

PN25

MR WATTS: And my understanding at length. So it is a surprise that the AFPC has not addressed the issue at any length. It’s certainly not rounding.

PN26

JUSTICE GIUDICE: You indicated that there might be a view that there was some legal constraint. That doesn’t flow from anything in the wage setting decision itself?

PN27

MR WATTS: That is not something that flows from the decision itself.

PN28

JUSTICE GIUDICE: No.

PN29

MR WATTS: It is a view that’s been expressed.

PN30

JUSTICE GIUDICE: Yes.

PN31

MR WATTS: But not formally, yes. Your Honour, there’s a couple of issues we should address where there are differences between the parties before you. One is the operative date. I think there’s been some confusion as what the nature of the ACTU’s position is in relation to operative date. We are not seeking a retrospective application to be the increase. What we - to clarify the matter - what we say is that in the context of employers being well and truly forewarned of an increase the nature of the increase not being subject to a decision of the Commission, of course, not being particularly contentious and therefore unlikely to change from the AFPC’s position, in the context of that we believe that it’s appropriate that should there be properly formed applications before the Commission received in an appropriate manner, and they be received prior to
1 October this year, that the operative date for those applications should be on or after 1 October, the first pay period on or after 1 October 2007.

PN32

We believe that it’s good policy to attempt to align the increases with the AFPC decision.

PN33

VICE PRESIDENT LAWLER: What if the application is filed on 30 September?

PN34

MR WATTS: If the application is filed on 30 September we believe it’s still appropriate that the increase should apply if the applications are in proper form. If the application is associated with draft orders are in proper form and there appropriate orders in appropriate form including, if necessary, applications for orders for substituted service and the service be provided, we believe it would be appropriate. It’s our view that employers have been well and truly forewarned that the policy clearly should be that there be a common operative date where possible. We believe it’s possible in those circumstances for the matters to be dealt with expeditiously.

PN35

We believe that there will be, the vast bulk of applications we hope, will be in proper form and be provided well and truly in advance to 1 October, subject to the date of the decision. However, we believe that any applications that are received by the Commission in proper form with necessary orders for substituted service being available, we believe that the operative date should still be 1 October. However, if an application comes to the Commission on 2 October the operative date will be subsequent to 1 October. We are not seeking any retrospective operation of any applications that were not appropriately provided to the Commission. Indeed if there is an application to the Commission prior to
1 October and its not in appropriate form we don’t believe that unless there are exceptional circumstances and an argument is put and accepted by the Commission that there be exceptional circumstances, that a retrospective operation should apply. We do not believe that should apply.

PN36

SENIOR DEPUTY PRESIDENT HARRISON: Is that likely to give rise to preliminary arguments between employers and unions as to what constitutes a proper form or what the component parts are of what falls on the proper form and what falls on the other side? Personally I know there’s been arguments about substituted service orders, for example, in the context of the 2006 variations.

PN37

MR WATTS: Indeed that does raise those issues. I think that there’s some discretion there that needs to be, those circumstances to be examined by the Commission, where I’m only guessing is to what all the variety of circumstances might arise. However, I can, I do believe that there’s less likely to be issues arise in this occasion than on the last occasion when people were feeling their own way and there were unique circumstances. Some of the issues, and particularly in relation to the adjustment of allowances, have been resolved in the last round. I am not saying that there won’t be issues that arise and I think that there’ll be certainly less than arose in the last occasion.

PN38

Certainly to not grant an increase on 1 October when it is available, when the employers have been forewarned, when the applications are received by the Commission in proper form, it is not good policy.

PN39

VICE PRESIDENT LAWLER: Mr Watts, sorry to be a pain in the neck about this, but it’s not a question of policy, is it? If an application is filed on
30 September without an accompanying consent to an order from the employer, just the ordinary practical administrative processes in the chambers and the registry will mean that the Commission will not be in a position to make an order until some time after 1 October. If you want us to say that those applications that fall under that category should operate from 1 October, the orders will need to be retrospective and legislation requires there to be exceptional circumstances in respect of any such orders. Isn’t that right?

PN40

MR WATTS: Yes, your Honour, I think that there could - - -

PN41

VICE PRESIDENT LAWLER: And you say the exceptional circumstances in those examples are constituted by the very significant notice that’s available to the employers ..... put forward?

PN42

MR WATTS: That and if the application is in appropriate form so that upon investigation there is in fact, it reflects the decision of the Commission. Then we believe that those circumstances are met. Having said that in the alternative if it’s the view of the Commission that there needs to be and should be appropriate for administrative purposes that there be a gap, we’d certainly have no opposition to a small window that allow proper order and processes for the Commission for the registry to actually adjust, to no periods of notice to be provided, parties to be notified if need. We would suggest that given the notice, given the circumstances, that it be a short period. We certainly wouldn’t have any objection to that period being adopted by the Commission or registry if the Commission deems that appropriate.

PN43

VICE PRESIDENT LAWLER: Thank you.

PN44

MR WATTS: The second area where there is substantial difference between the parties is the decision of the AFPC to defer an increase in the horticultural, agriculture and pastoral industries. Now, in our submissions we deal with this matter and I won’t repeat them in full, but there are, we believe, some serious concerns here and particularly in relation to what we believe is the evidentiary onus that falls upon those seeking to claim what in fact are exceptional incapacity to pay. But the AFPC has come to the view that at least for a period of 12 months there is a blanket incapacity to pay in the agricultural, horticultural and pastoral industries. Notwithstanding the fact that in certain areas, including the Northern Territory, they are clearly of the view that there is a capacity to pay, but they’ve taken a blanket approach.

PN45

Obviously it would be our contention that in any industry there’d be some employers who are doing quite well and others that aren’t doing well. There is a view that those employers that are receiving interest rate subsidies in agricultural, horticultural and pastoral industries would not be capable of providing wage increases, moderate as they might be, to workers in those industries. We dispute that. We don’t believe that there’s a blanket incapacity to pay in those industries, or indeed a blanket incapacity to pay for wage increases to any employee or any employer in those industries.

PN46

Indeed we are a little disturbed to now discover that the AFPC has in fact written to employers in, and I think it’s in the South Australian wine industry, indicating that there are exceptions that apply in the federal sector and that there are advantages that flow from that. Now, it appears as if this exemption may be wider than or the scope of this exemption may be wider that as first raised. The scope is, on an industry basis and it appears as if horticultural includes at least the wine industry, agricultural is something that we can’t define in any great certainty. I guess all we can do here today is to deal with those awards that are in those industries, and they are numerous.

PN47

So in fact what we’re dealing with here is an exemption that applies to the employees who work in those industries rather than the awards that might apply. If you have an award that is not an industry based award it relates to an occupation, then that particular person who is employed within that award who works in the agricultural, horticultural, pastoral industries, perhaps the wine industry, would not necessarily be entitled to this increase if you follow the logic of the AFPC’s decision. So we have some concerns about how this is workable. If the intention is that there be an exclusion for any increase for employees, exceptional circumstance employees as the AFPC describes them, then this exception would apply to most, if not all, awards, certainly other than those awards that are employer specific outside the industries.

PN48

We outline why we’re opposed to the exception. Once again we think that it would cause confusion and uncertainty. It would certainly cause confusion and uncertainty if the Commission adopts the proposal of the NFF and that’s simply to take their word for it than an employer’s exempt. An employer is exempt if they receive an interest rate subsidy. It’s their statement, it’s their word that must be taken. If an employer tells an employee that they receive interest rate subsidies or they’re not, therefore not entitled to the AFPC or the Commission’s decision in terms of flowing on these amounts, that they must take a wage freeze for at least a year, or a year.

PN49

What’s put to us is that employers simply have to cop that. There’s no recourse. There’s just a blanket exemption and there’s no recourse other than going outside to another body that may or may not have the ability to deal with the matter. It’s suggested by the National Farmers Federation that the commonwealth government has a role in relation to this outside of the Commission. In particular the workplace ombudsman has a role. Now, we say that it may be that the workplace ombudsman or others have a role in investigating whether there’ve been breaches of awards. We’re not suggesting that the Commission force its own awards.

PN50

However, what we do suggest is that there’s an evidentiary onus. And we put in the alternative to our primary position that an increase does in fact flow on to the agricultural, horticultural and pastoral industries. In the alternative what we argue is that there should be an evidentiary basis for any exclusion that is granted and that that evidentiary basis should be based on a list of respondents who in fact are in receipt of interest rate subsidies, except in the circumstance interest rate subsidies from the commonwealth. In our submissions we state and we reiterate that we accept that there may be some sensitivity about the nature of those subsidies and we have no objection to that list be provided, that it be provided on a confidential basis, provided that the Commission has resource to it should it be required.

PN51

Now, don’t think that in the course we obviously recognise the Commission will not be in a position in enforcing its own awards, however there may be circumstances that arise, other than what we say is an evidentiary onus, that may arise in relation to those particular industries that are affected by the exception where the Commission is best informing itself by viewing whether or not the employer is in fact entitled to that exemption or not.

PN52

JUSTICE GIUDICE: There must be a list somewhere.

PN53

MR WATTS: Well indeed we’re informed that there is a list. It’s in the - the commonwealth has a list and that it is readily obtainable. We haven’t obviously seen that list and nor have we asked for it. Your Honour, the concern is that I’m sure that if we’re not sure where a list is, where to obtain that list, an agricultural employee or a horticultural employee is even less likely to be aware of where to look for that list and to obtain that information to establish whether or not they are entitled to a wage increase. So it’s a grave concern of ours for some of the lowest paid workers in this country who have difficulty accessing information of this nature who are under represented in many areas. We find it to be a burden upon them which they’re unlikely to meet easily.

PN54

We believe it’s a burden which can be readily met by the employers, whether that list be provided by the commonwealth, be provided by the National Farmers Federation, whether it be provided by employers individuals. We have no view on other than obviously of the easier, we would assume, that the commonwealth would provide a list. The position we’ve come to generally in these matters, your Honour, is that we have accepted the Commission’s stated view in relation to the AFPC’s pre-eminence in the setting of minimum wages. We have done so reluctantly generally and we do so particularly reluctantly given the nature of the recent decision.

PN55

But we do so and we understand the statutory regime. We don’t believe that the Commission is restricted in relation to that regime. That regime restricts the Commission to such a degree that the Commission is unable to come to a different view in relation to the agricultural, horticultural and pastoral industries. Should the Commission feel that it, by necessity, must adopt the AFPC’s decision to defer, certainly given the nature or the different nature of these proceedings, the different nature, the different Acts or the different components of the Act that we deal with here today, the nature of the awards and the despondency of awards, we believe it be appropriate that there be an evidentiary onus on employers that the Commission require that evidence to be provided and that it be accessible in the future.

PN56

Certainly we’re not going so far as to ask that the Commission apply the incapacity to pay principle in this matter. It is a, believe that the incapacity to pay principle would be a guidance for the Commission in relation to it. We are asking for a set of circumstances that simply allows for an expedition of the process where there be a checking process. We do object to an exemption, but should the Commission grant an exemption we believe it be appropriate that there be that list and that list is accessible in circumstances that warrant it.

PN57

We are mindful that the Commission has a very different role to the AFPC and there is a different process. We are also mindful that the process nonetheless is steered towards an adoption of the AFPC’s quantum outcomes. Having said that, the processes may differ and the process by necessity has to differ and we argue that the processes in this particular occasion should differ. There’s just one more thing we note, I think, and that’s in relation to once again to the application for an exemption for a deferral of an increase. The Commission to simply blindly follow the AFPC’s outcome in relation to this, their decision, would be the case of the tail wagging the dog.

PN58

This is an area where by the NFF’s own submissions in the past approximately 90 per cent plus of employees are covered by this jurisdiction, not by the AFPC’s jurisdiction. And in those circumstances we think - - -

PN59

JUSTICE GIUDICE: I’m sorry, are covered by which jurisdiction?

PN60

MR WATTS: Sorry, this jurisdiction, sorry.

PN61

JUSTICE GIUDICE: Yes. They’re not incorporated employers.

PN62

MR WATTS: So as a result we think that it will be appropriate for this Commission to take a lead in relation to those matters and certainly if there is an evidentiary onus, it should be met here particularly as this is a noting process. If the Commission pleases.

PN63

JUSTICE GIUDICE: Yes. Thanks, Mr Watts. Well, normally perhaps we’d call on any supporters, as it were, from the union side of the ACTU before turning to the employers. Are there any other union submissions? Yes. Well, it might be appropriate, Mr O’Grady, if you’ll address us now. Has there been discussion about order by the way?

PN64

MR O'GRADY: I’m happy to go next and I expected to go next, but I wasn’t certain as to whether any of the other unions were going to say anything.

PN65

JUSTICE GIUDICE: Yes, very well. Well, you proceed, Mr O’Grady.

PN66

MR O'GRADY: Thank you, your Honour. I should first of all tender the submission of the Australian Catholic Council for Employment Relations dated
8 August 2007.

EXHIBIT #ACCER1 SUBMISSIONS OF ACCER DATED 08/08/2007

PN67

JUSTICE GIUDICE: Yes, thanks Mr O’Grady.

PN68

MR O'GRADY: If your Honour pleases. Your Honour, we earmarked the issue that we were going to be putting before the Commission when we were last before you for directions about two weeks ago.

PN69

JUSTICE GIUDICE: Yes.

PN70

MR O'GRADY: The lack of response is deafening. The ACCI say something, but what they do say is that because ACCER is an intervener, they’re not a major player in this proceeding, then the Commission ought not afford as much weight to the submission as others who are major players. Well, that sort of submission, of course might warrant a pretty robust response, but the fact is of course if a submission carries some merit, then weight that’s afforded to that submission will be given to it regardless of who makes it. And of course the Commission’s obligation to act according to equity, good conscience and the substantial merits of the case support that position.

PN71

Our position is this. This Commission must consider for itself the applications that are before it and we put up front and centre the issue of whether or not it is appropriate to include in the mix a factor which accounts for the Newstart allowance. And I'll come to how that issue comes up. But unfortunately for this Commission the ACCI submission and others really doesn’t help at all. It doesn’t address the merits of what we say. ACCI really has chosen to play the man, not the ball and one can only hope that they provide you with greater assistance when they’re on their feet today. This Commission ought not feel constrained by the decision of the AFPC to grant an increase of $10.26. One of the essential elements to the upholding of the constitutional basis for schedule 6 in the Work Choices case was the fact that by requiring this Commission to have regard to particular matters in making its decisions under schedule 6 the parliament was not mandating that a particular outcome should be accepted and that’s at paragraph 305 of the Work Choices decision in the majority judgment.

PN72

There is much from the AFPC 2007 decision that this Commission can adopt, but where we draw the line is the inclusion of the Newstart allowance in accessing a disposal income available to a family of four with a sole breadwinner. In the AFPC 2006 decision the AFPC, when determining the fair safety net for the low paid, identifies the need for the safety net to be adequate and in order to achieve - sorry, that is on the AFPC definition something which gives people the ability to enjoy a reasonable or decent standard of living. Now, in order to achieve that the AFPC says that minimum wages should, in combination with transfer payments, provide an income well above poverty. That’s effectively the goal that the AFPC sets.

PN73

Achieving a disposable income well above poverty when one takes into account not just wages but available transfer payments. Now, conscious of the statutory injunct to have regard to the principles in the family responsibilities convention and of course to avoid discrimination against those with family responsibilities, the AFPC actually measured adequacy in terms of whether workers with family responsibilities are able to rely solely on a single wage to support their family so as to enable them to compete with others who are not in the same position for available jobs. And the AFPC endeavoured to do that through table 1.10 of its 2007 decision and we’ve replicated that in our submissions at paragraph 25.

PN74

You’ll see there that there are a number of different family units identified and then the Henderson poverty line and disposable income available to those family units at particular levels of the federal minimum wage and then there’s an apportioning, if you like, of the disposable income as against the Henderson poverty line. It is interesting to note that apart from the last couple of entries, in the column which is second from the right, the disposal income as a proportion of the Henderson poverty line, most of those figures are at or about 130 per cent of the Henderson poverty line.

PN75

Now, one can only discern from the AFP decision that that is what it regards as being well in excess of the Henderson poverty line or well above poverty. And the footnote to the table states that the AFPC has assumed that any entitlement to income support has been taken up. Now, that includes the Newstart allowance. Now, the Newstart allowance is not something that’s payable to either partner who elects to stay at home to look after the family. It’s not something which in combination with other income allows people with family responsibilities to rely solely on the single wage to support their families. This is about choice. Partners choosing who out of the partnership stays at home to look after the family, who goes to work.

PN76

Those who seek the Newstart allowance are required as a condition of the entitlement to enter into an activity agreement which requires people to make an effort to look for suitable work and take up any reasonable job offer or training opportunity. It might include a minimum number of job contacts or a requirement to attend some sort of job network agency or a requirement to undertake a mutual obligation activity such as working for the dole or attending a particular training program. None of those things of course are consistent with the conferral of a choice amongst a couple as to who might stay home and look after the family.

PN77

We say it is inappropriate to take into account in assessing the disposal income available to families a payment which is directed at getting the non-employed parent back into the workforce, particularly in circumstances where the family chooses the role for the non employed parent to look after the family. And as a consequence of that we say the AFPC overstates the available disposable income. Now, we’ve endeavoured to explain other impact of that over statement by establishing our own table which is at paragraph 32 of the submission. And on the basis of what’s in this table, we say it is apparent that the inclusion of the Newstart allowance impacts upon the families’ disposal income on the capacity of families to choose to live on one income so that one parent is able to care for the children and further on the ability of the single income earner supporting the family to compete for jobs on a more equal footing with those who do not have family responsibilities.

PN78

Assume you have a family of four with two children aged between eight and 12. Next door there might be a single person. If I can take you to the table at paragraph 32 at item 2(a) the federal minimum wage for a single person is there set out at the right-hand side, October 2007, following the AFPC decision the figure is $467.85. And immediately below that is the relevant Henderson poverty line figure which we have had to draw estimates based on historical data and we’ve explained that in the notes to the table. And you’ll see that the single person is about $104.75 above the Henderson poverty line, that is it’s about 128.9 per cent of the Henderson poverty line.

PN79

Now, if I can go down to part 3 of the table we have there identified the relevant disposable income based on the AFPC table 1.10, which includes the Newstart allowance, and you’ll see there that the family disposable income including the Newstart allowance as at October ’07 will exceed the family Henderson poverty line by $177.90. It’s entry 3(c) right-hand column. That is about 126.1 per cent of the Henderson poverty line. To part 4 of the table and we take out the Newstart allowance. And the family disposable income without Newstart comes down to $755.17. That’s item 4(b) at the right-hand side.

PN80

That exceeds the relevant Henderson poverty line by a mere $73.15, leaving the family of four who choose to have one parent at home taking care of the children at a mere 10.7 per cent above the relevant Henderson poverty line. It can not be said that that family is achieving a disposable income which is well above poverty or well in excess of the relevant Henderson poverty line. So where does that leave that particular family? It leaves them in a position where their choices are very unpalatable. Either the partner who is at home has to undertake the steps to secure a Newstart allowance which, of course, involved the very things that I set out before about the activity agreement, inconsistent with caring for the children.

PN81

The alternative is, of course, that the sole income earner in the family has to do something more in order to get his or her family into the same position as everyone else living well above poverty. They have to get a better job or a better paying job or maybe even a second job. So what we say is that the discrimination really arises on two fronts. Compared with the position of a single income earner, the single income family is proportionately worse off. Secondly, those with family responsibilities who are in the workforce can not exercise their right of free choice in employment without conflict between their employment and their family responsibilities which is contrary to the principles which underline or underpin the family responsibilities convention.

PN82

In order to security higher paid employment it prevents the person from competing with others who can accept employment on a lesser rate in the workforce. In our submission we also have a go at the Henderson poverty line as the tool which measures poverty. We have addressed that at paragraphs 36 to 38 of our submission and I don’t wish to expand upon that. It’s a measure which has never really found favour in this Commission or with wage fixing tribunals. But what we say is that even if you put that issue to one side, that is the adequacy of the Henderson poverty line as a measure, even if you put that to one side the discrimination still exists because the level of income of the family exceeds poverty to a lesser extent than those without family responsibilities.

PN83

At the end of the day we say that there is a deficiency that needs to be remedies in order to avoid this discrimination continuing. We put a figure of $27 in our submission and we understand that others say well, that’s way too much and that will put people on transitional awards out of kilter with the others. We understand that submission, but at the end of the day the removal of the discrimination has to start somewhere.

PN84

VICE PRESIDENT LAWLER: But it doesn’t remove discrimination. The Newstart allowance will continue to be available, won’t it, to part of the target group you’re directing your submissions?

PN85

MR O'GRADY: That’s exactly right, your Honour.

PN86

VICE PRESIDENT LAWLER: It’s just going to shift the discrimination upwards a little bit.

PN87

MR O'GRADY: Well, no because proportionately it puts them in a better position when compared with poverty. At the end of the day the measure is whether the family is living well above poverty and so it takes out the need to go and get a higher paid job again because the family can live well upon poverty on existing payments.

PN88

SENIOR DEPUTY PRESIDENT WATSON: But it doesn’t put them in a relatively better position than persons without families or persons who do have families where two people are on employment ......

PN89

MR O'GRADY: They get more as well, your Honour.

PN90

SENIOR DEPUTY PRESIDENT WATSON: That's correct, yes.

PN91

MR O'GRADY: Yes, they get more as well. But it removes the imperative. The imperative is driven by the closeness to which the family is living in poverty.

PN92

SENIOR DEPUTY PRESIDENT WATSON: But that’s an absolute rather than a relative measure. It’s not really an issue of discrimination. It’s more addressing the discrimination.

PN93

MR O'GRADY: But the need to secure higher paid work arises from the closeness with which the family is living to poverty. And if you elevate them it removes that need. Others also go up, if you like, but when competing for jobs they’re still at the same level. Those with family responsibilities don’t have the need to get a better job or a higher paid job to ensure that their family continues to live well above poverty. Now, the arithmetic behind the 27 per cent is explained in our submission to the AFPC. In essence there is a bit of averaging that’s gone on to account for the fact that some people who would not be entitled to the Newstart allowance who have younger families would pick up some of the differential by reason of the partner parenting payment.

PN94

But that works out at about half the family. So in terms of the figures we say that the shortfall at the end it averages out at about $54 and the first step in the process of remedying that deficiency would be a $27 increase. It’s a very short and discrete point that we make. Nevertheless it’s one that’s very important having regard to the landscape of relevant considerations that this Commission needs to have regard to when coming to a conclusion. Others will tell you that you have to adopt what the AFPC says. Well, that’s not right. You have to have regard to the desirability of consistency with what the AFPC says.

PN95

Now, you also have to have regard to these discrimination issues as well. They are all factors in the mix and this is one that we say if overlooked gives rise to harsh discriminatory consequences.

PN96

JUSTICE GIUDICE: Mr O'Grady, I want to ask you a couple of questions that might expose my ignorance about how these allowances work, but just looking at the table in paragraph 32.

PN97

MR O'GRADY: Yes, Your Honour.

PN98

JUSTICE GIUDICE: And looking at the family disposable income, including Newstart, the figure 3A, does the final figure in the column indicate that one member of the family is on the minimum wage and one member of the family is actively seeking employment but is not in employment?

PN99

MR O'GRADY: That's correct, Your Honour. It's the AFPC assumption that families will receive all entitlements that might be available to them.

PN100

JUSTICE GIUDICE: Yes. And then, the difference with the 4B is simply that the Newstart allowance is - - -

PN101

MR O'GRADY: Is removed.

PN102

JUSTICE GIUDICE: - - - is removed and there's one wage earner whose at the minimum wage.

PN103

MR O'GRADY: That's correct. We've endeavoured to display that by - you'll see in the table, for example, entry 4B, beneath that we've got 3A minus 4A and if you go to the figure at 3A, which is the figure that Your Honour identified, take away 4A, which is the relevant Newstart allowance, it gives you 4B.

PN104

JUSTICE GIUDICE: The Newstart allowance, what are the qualifications for the continuing payment of that allowance.

PN105

MR O'GRADY: They are entry into an activity agreement which is along the lines of that which I discussed earlier.

PN106

JUSTICE GIUDICE: Yes.

PN107

MR O'GRADY: They are identified in the attachment to our submission, which is our AFPC submission.

PN108

JUSTICE GIUDICE: Well, perhaps if I could ask another questions. Is there a time limitation on - can a person whose complying with the activity agreement receive the Newstart allowance indefinitely?

PN109

MR O'GRADY: I would have to check that, Your Honour. It's not something that I'm in a position to answer on my feet I'm afraid. But I will do so.

PN110

JUSTICE GIUDICE: Yes, thank you.

PN111

THE SENIOR DEPUTY PRESIDENT: The table in paragraph 32, when you move from the family where the second partner receives Newstart to the family where the second partner does not, are there any additional payments, ..... payments available for the family in that second circumstances, where one partner chooses not to work and if there are, are they taken into account in your table?

PN112

MR O'GRADY: They're not accounted for in the table, Your Honour. It may be that, those with young families - the concept of the Newstart allowance is something that, it imposes itself once the children get to school age, if you like. In order - well, that's the rationale. Pre-school age children, sorry, in respect of families with children younger than school age there is this parenting payment partnered available which is a sum that has equivalence with the Newstart allowance, effectively, depending on circumstances of the family et cetera, but in general terms, it can be equivalent to a Newstart allowance. So, the policy rationale appears to be that, those with children the government will support up until school age. After that, in order to secure the payment parents have to get out there into the workforce or at least enter into arrangements which enable them to do so.

PN113

We've endeavoured to account for that in terms of coming to the $27 figure. It's not displayed in the table, but in terms of coming to the $27 figure, at paragraphs 25 to 50, 52 of the AFPC submission, by apportioning, if you like, the parenting payment in a way which accounts for the number of families who might be entitled to receive the parenting payment because, of course, not all families have children below school age. But it's not accounted for in the table, Your Honour.

PN114

THE DEPUTY PRESIDENT: Yes, very well.

PN115

MR O'GRADY: Those are the submissions for the Australian - - -

PN116

JUSTICE GIUDICE: Yes, thank you, Mr O'Grady.

PN117

MR O'GRADY: Thank you, Your Honour. Any volunteers? Mr Mammone.

PN118

MR MAMMONE: If it pleases the Commission. In accordance with the Commission's directions, ACCI provided a submission to this Commission on Friday 10 August. The Bench should have a bound copy of our submissions which were provided this morning. As a preliminary matter I wish to point out that, there is a typographical error on page 1 of paragraph 4 which refers to the date 1 December 2007, that should be 1 December 2006 and we ask that these submissions be marked as an exhibit.

PN119

JUSTICE GIUDICE: Yes.

EXHIBIT #ACCI2 SUBMISSIONS OF THE ACCI

PN120

MR MAMMONE: I intend to only give a brief overview of the matters raised in our submission and then take the Commission to a number of issues which are in reply to the ACTU and ACCER submissions. In saying that, I'm happy to deal with questions at any stage and while I'll try to outline our submissions in a sequential order, I apologise if I do not stick to the script as some matters overlap somewhat. We would like to say at the outset that, ACCI is pleased that the ACTU and union applicants have this year requested that, in the first instance, a Full Bench be convened to deal with the number of awards and secondly, the panel system be used to deal with implementing a flow on to the vast bulk of awards. ACCI supported this process last year and we support it this year, as we consider that it provides for an orderly and proper way to flow on decisions of the AFPC.

PN121

ACCI does not oppose the flow on to pre-reform and transitional awards of an equivalent quantum as determined by the AFPC in its 2007 wages review. We therefore do not opposed the quantum increase as sought by the ACTU and union applicants on this occasion. To be clear, we do not oppose a quantum increase of $10.30 for pay rates up to $700 per week and $5.30 for pay rates over $700. We also do not oppose commensurate increases to allowances in accordance with established practice in the Furnishing and Glass decision. As the AFPC does not award weekly rates, we have converted the increase to a weekly rate and rounded to the nearest ten cents consistent with last year's decision.

PN122

We do, however, object to the ACTU's arguments on retrospectivity and a
12 month deferral of certain pastoral awards and we advance our own arguments and support the NFF's submissions in this regard. We say that, a proper construction of the Act leads to a strong presumption that this Commission must exercise its powers in a way that is not inconsistent with wage setting decisions of the AFPC. Whilst the Commission has its own discretion as to whether to grant a flow on, we say that overall the legislation creates a presumption that this Commission will flow on decisions of the AFPC not only of quantum but also any applicable exemptions or deferrals.

PN123

On the issue of retrospectivity, we just need - I just want to make a point of clarification. After the ACTU's submissions this morning, I'm not sure whether they are still pressing their contentions in page 28 of their submissions, where they ask the Commission to consider varying the principles to allow for a common dates of effect, for increases in the Federal minimum wage and pay classification scales set by the Fair Pay Commission and adjustments in wages and transitional awards. I'm not clear whether the ACTU are still pressing that in that regard.

PN124

We say that, a proper construction - I apologise, if I can just go back. On the issue of retrospectivity, we reject the ACTU arguments for the principles to be amended to reflect the exceptional circumstances applies whenever an application is made to flow on a decision of the AFPC. ACCI opposes any retrospectivity where an application to vary an award is lodged after 1 October 2007 or when the date of hearing is on or after 1 October 2007. We say that, the unions have been given ample opportunity with a three month implementation date to lodge applications, that will give effect to this decision to vary awards and that there are no exceptional circumstances this year that would justify retrospectivity.

PN125

We contend that, employers still require to see draft orders well in advance of a date of hearing and in all cases, we support the panel system to hear those applications. The small number of awards before this Commission, we believe, will probably be dealt with quite rapidly and will get the 1 October date of effect, but all others should be ..... from the date of hearing in accordance with the Act. With respect to ACCER, we have fundamental objection to the submissions advanced and do no agree that this Commission should adopt their arguments in whole or in part. We say that, they have misconstrued the Act and the role of the family responsibilities convention by asking this Commission, in effect, to reopen the AFPC decision. In short, ACCER say that this Commission should not make the same jurisdictional error that the AFPC strode in to and therefore request this Commission to order an increase two and a half times higher than what the AFPC awarded.

PN126

We believe that the propositions put forth by the ACTU and ACCER are contrary to what this Commission determined in last year's wages and allowances decision and contrary to the statutory considerations this Commission must have regards to when varying pre-reform and transitional awards. Finally, we deal very briefly with the gap filling process of school based trainees, training rates and supportive wage system provisions in transitional awards that was commenced as a result of last year's wages and allowances review. We indicate at part 4 of our submissions that, we continue to support this process where it has not yet been complete.

PN127

Part 1 of our submission, we briefly outline what happened last year with respect to the AFPC's first wage setting decision and highlight the Commission's flow on proceedings and ultimate decision contained in print 002006. We recall that the AFPC announced its headline decision on 26 October 2006 with a date of effect to be 1 December 2006. This only allowed a brief period of one month to implement a decision across all pay scales. As a result of the AFPC's decision an unprecedented number of applications were filed in this Commission to vary over 400 pre-reform and transitional awards. A Full Bench was convened by - and the Commission handed down its decision on 8 December.

PN128

The Commission determined that those applications, which were before it and were filed by 1 December, should obtain a 1 December operative date. At paragraph 38 the Commission determined that, the circumstances on that occasion in their totality were exceptional and justified retrospectivity. Those circumstances were said to be the interaction between the two wage fixation systems, timing considerations and the lead role given to the system administered by the APFC. All other applications were to be dealt with by the panel system and operated prospectively.

PN129

ACCI argued last year that there were no exceptional circumstances within the meaning of section 572 and clause 22 of schedule 6 that would warrant retrospectivity. This Commission rejected those submissions insofar as they applied to applications which were before it and which were lodged before
1 December. As we state at page 2 of our submissions, this year the AFPC's wage setting decisions were announced on 5 July 2007 and what is fundamentally different from last year is a three month implementation period the AFPC has adopted. This implementation period is welcome, particularly in light of the administrative difficulties during last year's flow on proceedings.

PN130

We say that, unions have enough time - should have enough time this year to lodge a large number of applications to vary awards well before 1 October for a
1 October date of effect. The ACTU can not rely on the same arguments that exceptional circumstances exist once again. Whatever time and issues existed last year, do not exist this year. In the circumstances, in their totality, ..... do not justify exceptional circumstances this year. ACCI maintains that, orders should operate prospectively in accordance with the Act absent exceptional circumstances in each specific case. We reiterate the same considerations outlined before this Commission in 2006 with regard to ensuring that employers are properly able to check orders for errors or omissions.

PN131

ACCI is not attempting to delay the flow on of the AFPC decision. We supported a rapid exchange of submissions and early hearing date at the directions hearing in order to give ample time for the unions to lodge subsequent award variations through the panel system. With regard to the principles, ACCI deals with the ACTU's arguments on the principles and its request that it be amended to allow retrospectivity for orders which seek to flow on a decision of the AFPC. We do this in part 3 of our submissions. Firstly, this is contrary to what the Commission determined last year. The Commission determined last year that only those applications which were lodged by 1 December should get that 1 December date of effect and all other applications were to operate prospectively.

PN132

Secondly, the principles have always operated subject to the Act and this remains the case today. We dealt with this last year and attachment C of our submissions deals with these issues raised by the ACTU in this regard. Thirdly, the Commission ruled last year that it did not have the power to issue principles with respect to pre-reform awards. Therefore, potential inconsistency may result if retrospectivity is granted for transitional awards and not for pre-reform awards. If the ACTU's submissions are accepted, unions would be allowed to sit on their hands for an indefinite period of time before it lodged applications to vary awards, which may be one month, six months or X months, backdated to 1 October 2007.

PN133

This clearly does not facilitate certainty and would result in the Commission and registry ..... generating orders of retrospective application. The ACTU must accept that, although pay scales may be very carte blanche by a decision of the AFPC award of this Commission can not be so varied. This is a result of the Act and the constitutional limitations of the AIRC and it has nothing to do with employers not wanting to pass an increase on to transitional employees. In addition, and with respect to transitional awards, clause 40 sub-section 5 of schedule 6 states that, if principles are established under that clause then they must be consistent with and can not be such as to override a provision of this Act that relates to the variation of transitional awards. To adopt the course that the ACTU proposes would be to contravene that clause as the proposed principle would override clause 66.

PN134

Similarly, we reject, as we did last year, the twilight zone argument that it is desirable for a common operative date because there are some employers that are in the twilight zone between a trading corporation and a non-trading corporation. Employers are not in a twilight zone, they are either in or they are out. There may be issues on the margin, such as local government, but there are - there is no twilight zone and it's not a reason for being ..... principle that would allow this Commission to grant retrospective orders in all cases and without a cut off point.

PN135

Finally, it must be presumed that parliament considered that this Commission would vary awards as a result of decisions of the AFPC. Parliament had the opportunity to amend the prohibition on granting retrospective orders in passing the work choices amendments and chose not to do so. It could've exempted the requirement of exceptional circumstances for variations to flow on the AFPC decision. The ACTU can not claim that the very process contemplated by the Act of the AFPC issuing a decision and the AIRC considering giving an effect to it is somehow exceptional for the entire five years that the transitional system is to operate. This would render clause 66 null and void.

PN136

In regards to drought relief, part 2 of our submissions outlines the statutory context and the Commission's powers and functions to vary awards to flow on a decision of the AFPC. It is clear that, the - it is clear from the Act that, the AIRC will exercise its powers in a way that is not inconsistent with wage setting decisions of the Fair Pay Commission. This objective is repeated in similar ways for pre-reform and transitional awards. We refer to two subsequent decisions where this Commission stated its desire to maintain consistency. We conclude that there is a presumption that the Commission will give effect to decisions of the AFPC unless there are substantial reasons for not doing so. While the term inconsistency is not further defined in the Act, in the context of the current proceedings we say that the following should be regarded as a degree or level of inconsistency.

PN137

That is, where parties request this Commission to consider a higher or lower quantum than that awarded by the Fair Pay Commission and where parties ask this Commission to consider imposing further obligations, conditions or administrative burdens on employers which is not required on constitutional corporations. We say that, any part that seeks to vary awards in a manner not consistent with the wage setting decision of the AFPC must rebut this presumption with substantial ..... force. We say that, even if substantial reasons are provided, the Commission should exercise extreme caution and be reticent in not giving full effect to the AFPC's decision.

PN138

We say that, the threshold is high particularly given the repeated desire for consistency in the objects provisions for both pre-reform and transitional awards. With regard to the ACTU's objections to flow on ..... 12 month deferral for a number of ..... pastoral industry employers, ACCI rejects this and submits that the Act requires consistency to wage setting decisions of the AFPC. We say that, it's clear that this Commission must have regard to wage setting decisions and it is a primary consideration. It is also clear that wage setting decision number 2, 2007, which grants the 12 months deferral from the main wage setting decision number 3, is a decision that this Commission must have regard to. That is why we go to some extent to set out the actual decisions of the Fair Pay Commission in our submission.

PN139

To the extent argued by the NFF, ACCI supports scope for the 12 month deferral of a 2007 increase when employers in receipt of the ECIRS and have employees who work in ..... declared area. We consider as a fundamental principle that an employer party to a transitional or pre-reform award should be able to benefit from the deferral without any additional obligations or evidence beyond those determined by the AFPC. Constitutional corporations do not have to provide further evidence or proof and we say that, opposing additional hurdles would create inconsistency. Furthermore, ..... should be accorded to the - in the interests of ensuring that constitutional corporations eligible for a deferral for pay scales also receives a deferral of allowances contained in pre-reform awards. We say that, the ACTU arguments would lead to an inequitable situation if the AIRC places restrictions on the same constitutional corporations in this process.

PN140

In regards to the actual AFPC process, we say that, quite simply there is nothing to suggest that the Fair Pay Commission should be disturbed or not followed in these proceedings. At page 29 we say that, the ACTU have not offered any substantial reasons and it appears that the Fair Pay Commission offered procedural fairness and a fair go to all. The AFPC in its reasons for decisions sets out summary of its considerations and after taking in to account all submissions, including those of the ACTU and AMWU, it made its decision accordingly.

PN141

Finally, we say that the concerns of the ACTU with respect to proof and compliance should be rejected. They say at page 34 that they do not believe it is acceptable that employees should take the word of the employer and that wage adjustments will not apply to them. We say this. An employee can always initiate their own inquiries with or without the assistance of unions to the workplace ombudsman for both pre reform and transitional awards as they do for pay scales.

PN142

Quite simply an employer would be in breach of the award if it was not entitled to the 12 month deferral and failed to pass on those increased rates. A prudent employer would always have evidence that they are in receipt of ECIRS if they wish to defer the increase. With respect to ACCERs submissions ACCI rejects in whole or in part ACCERs submissions that this Commission should award the highest quantum in the order of $27 per week. We say that ACCER has fundamentally misconstrued the role of the Family Responsibilities Convention and that there was no ostensible error on the part of the AFPC when it came to making its wage setting decisions.

PN143

If this Commission accepts those submissions we say that it should reject them on the basis that to award anything other than equivalent amount on this occasion would be inconsistent.

PN144

ACCER argues that the AFPC did not have proper regard to the Family Responsibilities Convention under section 222 of the Act. We therefore ask this Commission not to make the same apparent error when it considers this convention. In our submission we say that there is no reason to suggest that the AFPC did not consider the convention, nor the submissions of other parties including ACCER. At page 103 of AFPCs reasons for their decision the AFPC explicitly states that they have had regard to the Family Responsibilities Convention.

PN145

We also point out that this Commission over a number of years also had to have regard to section 93A as it then was under the Act. However it is clear that it is for this AFPC and this Commission to determine what those principles are and how it will take them into account along with its other statutory considerations. Finally, we say that this is not a forum to reopen the 2007 AFPC review and revisit these matters as ACCER contends. If ACCER disagrees with AFPC outcome it has the opportunity to again raise it next year with AFPC.

PN146

We also do not support that these proceedings be lengthened in order for ACCER to provide further submissions. This will delay the determination of these proceedings, and we say that no substantial reason has been offered to even consider to disturb AFPCs findings. To do anything other than award an equivalent quantum would be inconsistent, as we have said. Finally, our submission at part 4 deals with trainees and apprentices, a gap filling process that was commenced in 2006. And to the extent that this has not been completed ACCER continues to support this process.

PN147

We also repeat our support for the gap filling process for the support of wage system clause, and at page 42 we deal briefly with AFPCs wage setting decision number 5 which was issued subsequent to the main 2007 decision. We have no opposition in support of flow on of an increase to the minimum amount payable under the supported wage system to bring it up to $66. We say this should follow on to all award variations.

PN148

One point I'd like to briefly comment on was the contention made by ACCER this morning of the weight of evidence and our submissions. Just to clarify, at page 34 of our submissions at paragraph 169 it is clear we say that the submissions of ACCER should therefore be seen in such light and should not be able to carry such force as to outweigh the submissions of the major parties that represent actual employees and employers. We do not say that this Commission should not give due consideration to the merit of the ACCERs submissions. All we say is that they should be taken into account in accordance with the weight of the other parties' submissions in this matter.

PN149

If it pleases the Commission, unless I can be of further assistance that concludes the submissions of ACCI in this matter.

PN150

JUSTICE GIUDICE: Mr Mammone, somewhere in the ACTUs submission I think it's suggested, if my memory's not failing me, that it may not be necessary to have hearings in relation to further applications that would be dealt with as presently envisaged I think by everybody through the normal panel allocation. Do you have a submission to make about that?

PN151

MR MAMMONE: We support the - the way we anticipated this case would flow is that essential decision of this Full Bench can subsequently be used by individual members in the panel system. ACCI has always supported applications to flow through the panel system in the normal way it has in previous national wage cases.

PN152

VICE PRESIDENT LAWLER: But the specific suggestion is that the flow on applications, the ones that go through the process through the panel system would be dealt with on the papers unless there was some pressing circumstance that made it necessary to have a hearing.

PN153

MR MAMMONE: Our understanding was that that was with respect to the small number of awards before this Full Bench, namely the 25 or 26 awards.

PN154

VICE PRESIDENT LAWLER: No, it's for the hundreds of other awards that are not before this Bench.

PN155

MR MAMMONE: I apologise, but we did not take it to mean all of the other awards.

PN156

JUSTICE GIUDICE: Well, in any event there is an issue as to whether it would be necessary to have hearings in relation to matters where there's, through correspondence, agreement on a draft order. But anyway, if there's anything that you wish to submit about that, do so.

PN157

MR MAMMONE: Yes, if I could have a moment?

PN158

JUSTICE GIUDICE: Yes.

PN159

MR MAMMONE: Your Honour, thank you. ACCIs submission in this regard is that if there is no contention to the draft order then no hearing is necessary. However if there is opposition to the draft order then - - -

PN160

JUSTICE GIUDICE: Yes, where there's agreement you would not raise any objection to the order being finalised by email or mail?

PN161

MR MAMMONE: If there was no objection then yes. Electronic means is probably the quickest way to resolve it.

PN162

JUSTICE GIUDICE: Yes, very well. The only question I had was in relation to ACCERs submission. It seems to be open to conclude that the AFPC calculations in relation to the income, disposable income of families in relation to the poverty line discriminates against single income families because of the bringing into account of the Newstart allowance. If we were to ultimately reach that conclusion do you think we should do anything about it?

PN163

MR MAMMONE: ACCIs submission with respect to ACCERs main contentions were quite narrow, in that we limited our arguments to the considerations that this Commission should have and the considerations that the AFPC did have. We don't - and I don't have instructions on this - but we limited our submissions to that respect because that is what the Commission should have regard to. If you were to probe further into the reasons, conclusions that the AFPC did, and reached different conclusions, nonetheless we would say that it would be inconsistent to award anything other than what the AFPC awarded.

PN164

JUSTICE GIUDICE: Thank you. Yes, thanks Mr Mammone.

PN165

MR MAMMONE: If it please the Commission.

PN166

JUSTICE GIUDICE: Mr Mead?

PN167

MR MEAD: Thank you, your Honour. Just before I commence it may be appropriate to have my submission tendered and marked.

EXHIBIT #AIG1 WRITTEN SUBMISSIONS OF AIG

PN168

MR MEAD: Your Honour, it was my intention this morning to be somewhat brief with my submissions and rely fundamentally upon the written submissions that we tender. The one issue that I did want to deal with at some length and form the body of my submission today was on this issue of - and it's generally been identified at retrospectivity issue as proposed by the ACTU. Your Honour, it's AI Group's position that we fundamentally oppose the proposal advanced by the ACTU in respect of conferring upon applications that are filed by 1 October 2007 with a 1 October 2007 operative date irrespective of whether those orders have been settled.

PN169

Now, the basis upon which we oppose the position advanced by the ACTU is twofold. Firstly, we say that such an approach is not consistent with the decision of the AFPC, and secondly we say that the approach as advanced by the ACTU does not accord with either the provisions of the Workplace Relations Act or the law of arbitral authority on the issue of retrospectivity of orders. Now, in the context or the decision of the AFPC what we say is that we put significant substantial submissions to the AFPC on the interplay between the function of this Commission and the AFPC in its wage fixing responsibilities.

PN170

Now, the context with which we put that submission to the AFPC was specifically in relation to seeking an advanced prospectivity between the date of decision of the AFPCs decision and its implementation date. Now, these submissions are extracted at point 31 of the submissions that we filed in these proceedings, but once again the basis upon we sought greater prospectivity than five weeks originally provided in the first AFPC wage fixing decision was directly as a result of what we identify as complications, impractical complications in the implementation of the decision.

PN171

Now, those complications were in essence as a result of this Commission's decision based on the circumstances of the previous wage fixing case to grant retrospective operation to the relevant increases. Now, what we sought in our submission to the Fair Pay Commission was at the very least a lead time of three months to account for the complications that we experienced as a result of the 2006 decision.

PN172

Now, we submit that by the AFPC granting the three month prospectivity that we sought, it's implicit in the decision that they were mindful of the practical difficulties associated with retrospectivity and the possible retrospectivity of this Commission's decision, and that to grant the ACTUs claim as they sought it for a 1 October 2007 operative date for applications that are filed but not yet orders issued, we say that was contrary to the Australian Fair Pay Commission's decision.

PN173

Now, the second issue that we've identified as the basis upon which we oppose the proposal advanced by the ACTU is that in essence what it seeks to do we say is apply a one size fits all approach to this question of extraordinary circumstances. Now, the relevant sections of the Act deal with the Commission's power to provide for retrospective operation of awards is section 572 of the pre reform awards and pertaining to Schedule 6 for the transitional instruments.

PN174

Now, the terms of those sections are largely similar to section 146 of the pre reform Act. And what we say in relation to the operation of section 146 is that there's a long line of arbitral authority that says that exceptional circumstances should be construed on the basis of what are circumstances that are so rare and singular to warrant retrospectivity. Now, we respectfully submit that the circumstances that gave rise to this Commission's 2006 wage and allowances review decision in respect of the question of acceptable circumstances are not present in this present application.

PN175

Now, the issue of timing we say is fundamental to that submission. We're now in a position that far from having almost only a month to have these applications processed and finalised, as it was the case between the AFPCs decision and its implementation date in the 2006 decision, that the Fair Pay Commission has given the parties three months with which to have the decision implemented. Now, this significant amount of prospectivity we say is relevant because ultimately it means that in our view should the relevant unions be diligent in having their applications filed in a timely fashion, there should be no problems in having the orders settled and issued well in advance of the 1 October 2007 date.

PN176

Now, the proposal as advanced by the ACTU we say is ultimately reducing the question that's before the Commission, and which is a question which is ultimately a discretionary decision to a singular decision, and that is were the applications filed before 1 October 2007? That really becomes the only test for the proposition as advanced by the ACTU. Now, as I said, our view is really that this is a one size fits all approach that is inappropriate.

PN177

The basis upon which we make this submission also is that in the 2003 national wage case AI Group made a submission to the Commission that we say was not dissimilar to, at least in principle, the approach the ACTU is asking this Commission to take in this instance. Now, in the 2003 national wage case what AI Group sought was a statement from the Bench identifying the delays in having a matter determined and orders issued as a result of the ebbs and flows of the Commission's work load did not constitute exceptional circumstances, therefore warranting retrospectivity.

PN178

Now, in declining to grant our request the Bench identified that the determination of what constitutes exceptional circumstances is a discretionary decision and must be considered by individual members of the Commission, and it's not appropriate to circumscribe this discretion. Now, with respect, what we say is that the proposal as advanced by the ACTU is designed exactly to do that, to circumscribe that discretion, as I said, by reducing it to a very simple test.

PN179

Now, we say that if the Commission were to grant the ACTUs request it also sets a very dangerous precedent on the issue of retrospectivity, because what we say their claim was predicated on is that a date between filing the application and having the orders issued, any delay of that nature constitutes exceptional circumstances. Once again we would say that this principle does not accord with previous decisions of the Commission on this issue. And the relevant judgment I'd draw the Bench's attention to is extracted at paragraph 62 of our submissions, and that deals with the Full Bench decision in re Victorian Shops Interim Award 2000.

PN180

I didn't propose to take the Bench to the quoted passages, although we say that the passages we've emphasised at point 62 are discretely relevant to our submission. In terms of the way in which the ACTU, at least in oral submissions today, have advanced their request for retrospectivity, it seems to be fundamentally based on this notion that the employers have had notice or have been forewarned of the prospective increase and therefore that forewarning should be sufficient to justify any exceptional circumstances determination.

PN181

Now, our submission on that is that employers, whilst they have been forewarned about the general increase that the AFPC has awarded and its potential to flow on, whilst that has occurred, what is distinctly relevant is the specifics of the content of the orders. The difficulties that are ordinarily faced by employers in the context of retrospective variations to matters such as rates and allowances are increasing administrative costs as a result of processing back pay and also in some context, particularly in the labour hire sector, difficulties in being able to recoup the costs via the fact that they made a quote at a lower price for their service than that which they actually have to pay.

PN182

Now, employers being generally aware of the possible flow on costs of a wage increase we say is just purely insufficient. That what is required is the certainty of the actual rates that they're required to pay, and that certainty can only stem from the orders being settled and issued subsequent to discussions between the parties and consent to an agreement.

PN183

JUSTICE GIUDICE: Mr Mead, there's no certainty of that character in relation to the rates under the jurisdiction of the Fair Pay Commission is there?

PN184

MR MEAD: Well, in the 2006 decision there was precisely that issue, that the AFPC did not publish their rates. Now, there were submissions from AI Group, ACCI and the ACTU that went precisely to that issue in the 2007 matter. And what the AFPC determined was that for this increase and for future increases they would publish the rates in the pay scales to provide that certainty.

PN185

JUSTICE GIUDICE: Has that been done?

PN186

MR MEAD: At this point it's my understanding that the AFPC - sorry, the classifications have not yet been published, but it is the definite intent that that is to occur, and it's my understanding that it's to occur - - -

PN187

VICE PRESIDENT LAWLER: The short answer is no.

PN188

MR MEAD: No, not at this stage.

PN189

JUSTICE GIUDICE: Will it occur before 1 October?

PN190

MR MEAD: I don't have any definite instructions on that, your Honour. But the issue of clarity and certainty in the rates that are to apply is something the Fair Pay Commission has turned its mind to, and it's turned its mind to that issue on the basis of submissions put by all the major parties before you today. And we say that there is a connection between those submissions put to the Fair Pay Commission and what is required or what should be required as a matter of principle in the Commission's increase to wages and allowances in this matter.

PN191

In conclusion, your Honour, the final position of AI Group is that in respect to this issue of retrospectivity that it should not be granted on the basis that it cannot be said to accord with the decision of the Fair Pay Commission, nor can it be said to accord with the terms of the Act more, what we say is persuasive arbitral authority on the notion of retrospectivity and the concept of exceptional circumstances. We therefore seek that in terms of the operative dates that the general principle which would flow from this decision is that operative date should be 1 October 2007 for any applications that are filed and for which orders were issued prior to that date, and for any other application it should be date of issue of the order. Those are submissions, if it pleases.

PN192

JUSTICE GIUDICE: Thanks, Mr Mead. Ms Wawn?

PN193

MS WAWN: Thank you, your Honour. The National Farmers Federation has provided the Commission with its submissions on Friday 10 August, and we seek these formally tendered as an exhibit.

EXHIBIT #NFF1 WRITTEN SUBMISSIONS OF NATIONAL FARMERS FEDERATION

PN194

MS WAWN: Thank you, your Honour. The National Farmers Federation seeks that the Australian Fair Pay Commission decision in its entirety is to apply to the relevant transitional awards under the auspices of this Commission, and in particular that the component of the decision relating to a deferral of wages to those specifically identified except eligible employers applies in respect to those pay classifications other than those in federal minimum wage level in three federal awards, the Horticultural Award, the Pastoral Industry Award and the Woolclassers Award. I'll speak about those awards - - -

PN195

VICE PRESIDENT LAWLER: So it's three awards, not three industries?

PN196

MS WAWN: It's three awards, your Honour, yes, that's correct, and they are specified in the AFPC decision which I'll come to detail shortly. Before I get to the actual decision of the AFPC, NFF makes it clear that the AFPC of our understanding has taken significant evidence to determine its decision to defer. The NFF provided four submissions to the Fair Pay Commission. We understand that the ACTU and the AWU both provided submissions to the Fair Pay Commission in response to the original NFF submission, and further, that there was significant research undertaken by the Secretary of the AFPC in discussions with the Commonwealth Department of Agriculture.

PN197

Further, the AFPC also took up the offer of the NFF to undertake farm visits, and two farm visits were conducted in Queensland and also in New South Wales for them to have first hand experiences in respect to the issues affecting the farming sector during drought.

PN198

JUSTICE GIUDICE: Who was present at those visits, do you know?

PN199

MS WAWN: At the Queensland - - -

PN200

JUSTICE GIUDICE: I mean just in terms of the bodies.

PN201

MS WAWN: Certainly. The Fair Pay Commissioners were present, as was representatives from the NFF, and we had organised some farmers to attend to discuss things with the Fair Pay Commission, but no other bodies were party to those particular visits. The decision, and I understand obviously the Commission has a copy of the decision of the Fair Pay Commission as it was attached to the ACTUs submission. The decision outlines very clearly its reasoning for the deferral, and the deferral applies to those pay classifications specified in schedule - an appendix, sorry, appendix B of the decision which appears at page 121 of the publication by the AFPC, and it specifies three federal awards and the pay scales that are derived from those three awards, the Pastoral Industry Award, the Horticultural Industry Award and the Woolclassers Industry Award.

PN202

So they are very clear, and this is again outlined in its more detail in section 2 of the decision and at page 81, that its decision to defer the pay increase for classifications above the federal minimum wage was only related to those pay scales as specified in appendix B. As to the wine industry issue that Mr Watts raised, NFF hasn't been privy to that issue but is aware that the matter has been raised by representatives of the wine industry, that in particular the federal Wine Industry Award could have respondents to that award that would otherwise be eligible employers. And I understand they have made submissions seeking a supplementary decision so that appendix B is extended to include the Wine Industry Award so long as they meet the other eligibility criteria, but I'm not privy to any further determinations of the Fair Pay Commission in respect to those representations by the wine sector.

PN203

SENIOR DEPUTY PRESIDENT WATSON: How do we deal with that in the absence of any supplementary order or supplementary, what do they call it, decision of the Fair Pay Commission?

PN204

MS WAWN: As far as the NFFs submission would be is that it's up to this Commission purely on the submissions of those parties present in respect to the three awards that we seek a flow on of the decision to the three awards that the NFF is seeking that flow on for those transitional awards. Obviously it would be up to the parties involved in any other award that is successful in seeking a supplementary decision that they then put those relevant submissions to this Commission.

PN205

SENIOR DEPUTY PRESIDENT WATSON: When an application is made.

PN206

MS WAWN: When an application is made. And certainly the only award that is currently before these proceedings is the Horticultural Award, which is one of the three awards named in the decision of the Fair Pay Commission.

PN207

SENIOR DEPUTY PRESIDENT WATSON: Yes, thank you.

PN208

MS WAWN: The Fair Pay Commission specifically states that the deferral only relates to those working in exceptional circumstance drought declared areas, and the detail of that are in our submission, and that they work for employers that are in receipt of EC interest rate subsidy. Those who are in receipt of interest rate subsidy as quoted by the Fair Pay Commission are those most severely affected by the drought. We are talking of approximately 13,000 farming businesses are currently in receipt of the interest rate subsidy across the country, and there are approximately 130,000 farming business in Australia, so 13,000 that may well be eligible for this deferral out of 130,000 farming businesses.

PN209

The vast bulk of those in receipt of interest rate subsidies are in New South Wales and Victoria, which has got the vast bulk of the issue in respect to drought declared areas. In terms of the AFPCs decision there is some confusion as to whether or not the eligible employers actually have to be identified, and it's raised in particular by the ACTU that we need to identify those who are in receipt of interest rate subsidies.

PN210

In turning specifically to the intent of the Fair Pay Commission's decision on how this would practically evolve once of the decision comes into effect on 1 October, we have been in receipt of correspondence by the Fair Pay Commission and seek to tender that this morning just for clarity.

PN211

JUSTICE GIUDICE: This is a letter from the Chairman of the Fair Pay Commission dated 3 August 2007.

EXHIBIT #NFF2 LETTER FROM CHAIRMAN OF FAIR PAY COMMISSION DATED 03/08/2007

PN212

MS WAWN: Thank you, your Honour. I just refer specifically to two specific paragraphs of this letter. The first one is paragraph 5 of the first page, and Professor Harper states:

PN213

The wage setting decision of 3/2007 is clear that in order to be eligible for this deferral the farm business must be in receipt of the ECIRS and engage employees subject to the pay scale specified in the decision. No application to the Commission for deferral is necessary.

PN214

And then I also refer specifically to the fourth paragraph on page 2:

PN215

If a dispute were to arise as to whether an employer was entitled to defer the general wage increase awarded by the Commission in the wage setting decision it would be for a court of competent jurisdiction to determine the evidence an employer would be required to produce to defeat such a claim. However it is the Commission's view that an employer would be required to prove that they were in receipt of the ECIRS and produce the relevant documentation to that effect.

PN216

So it is our understanding from that correspondence from the Commission, the Fair Pay Commission, that the decision applies, and if an issue arises as to eligibility or not then the appropriate agency or court would simply seek evidence to justify its position in making that decision.

PN217

VICE PRESIDENT LAWLER: Ms Wawn, why shouldn't employees know from time to time what they're entitled to be paid?

PN218

MS WAWN: I don't disagree with that concept, your Honour. Nevertheless there are - - -

PN219

VICE PRESIDENT LAWLER: Why shouldn't the employer be obliged to, if it's purporting to claim a benefit for deferral produce the document to the employee or the employee's representative to demonstrate entitlement to rely upon it?

PN220

MS WAWN: Your Honour, I think we've set out in our submission that we think it's appropriate for the award provision to have words to the effect that if an eligible employer chooses to defer the wage increase then they should advise their employee accordingly before they do so. Then they would provide evidence to the employee if it's questioned. The normal dispute resolution processes should therefore apply if that decision is questioned as to eligibility. I guess it would be no different for example as an employer saying, well, I'm paying you under the Pastoral Industry Award, and the employee saying, well, I also think I can go under the Wine Industry Award, which we can.

PN221

So there is then an issue of evidentiary requirement to determine which award you actually are legally respondent to. The same with the small business exemption from a redundancy, an employer may state, I don't have to pay you redundancy because it's a small business exemption, the employee then has to say, well, I dispute that fact, and evidence is required to establish whether or not that exemption from small business redundancy actually is in effect applicable to that particular business.

PN222

We don't see the issue of deferral any different to the contention of what award am I, or whether I'm a small business by virtue of redundancy provisions. And in fact it is much clearer as an employer to show evidence of the interest rate subsidy relief because they have documentation to show that they are in fact eligible for it.

PN223

VICE PRESIDENT LAWLER: Well, if it's so clear cut and simple why shouldn't employers be required to produce copies of the ECIRS acceptance to the employee or employee's representative if they wish to claim the benefit of the deferral?

PN224

MS WAWN: As we have specified in our submission, that if an employee - - -

PN225

VICE PRESIDENT LAWLER: I didn't think you'd gone quite that far.

PN226

MS WAWN: I mean, it would obviously make sense that you've got to provide evidence to show it if it is raised as an issue. And if the Commission believes that is an additional perspective that is required in the provision the NFF would not oppose that, but we would see that as just a normal requirement in the course of dispute resolution that evidence is obviously required to satisfy people's concern if a concern is raised.

PN227

The NFF however does object strongly to a centralised list. I mean, for starters we don't have a list, we've never seen a list of who is eligible, and our understanding from the Department of Agriculture is that a list will not be provided to the NFF if we so requested it. So obviously if the parties at the workplace believe that there is a requirement, evidentiary requirement to satisfy an employee's concerns then that letter should be produced as evidence, no different from any other process of evidentiary requirement to show who you are respondent to for an award, which award you're respondent to or whether or not you're exempt from small business redundancy provision.

PN228

VICE PRESIDENT LAWLER: Thank you.

PN229

JUSTICE GIUDICE: Ms Wawn, where's the proposal in your written submissions, the proposal for how this should be dealt with?

PN230

MS WAWN: Sorry, your Honour, it's actually in a document - I do apologise, it's actually in a document that was subject to some discussions with the ACTU.

PN231

VICE PRESIDENT LAWLER: I thought it was implicit in paragraphs 28 and 29.

PN232

MS WAWN: Yes, we do at paragraph 28 and certainly in paragraph 30. Paragraph 28 we - - -

PN233

VICE PRESIDENT LAWLER: In any event your position is as you've articulated it here today.

PN234

MS WAWN: Yes.

PN235

VICE PRESIDENT LAWLER: You've got no difficulties with employers being required to produce documentation in the event that employees challenge the employer's asserted coverage under the benefits of the deferral that the Fair Pay Commission has given?

PN236

MS WAWN: That's correct, your Honour.

PN237

VICE PRESIDENT LAWLER: And which we're being asked to extend.

PN238

MS WAWN: Sorry, I assumed it was in there clearly, but it's another document that was produced for discussions between us and the ACTU. But certainly from an NFF perspective we believe obviously it's (a) appropriate the employer advises the employee that they seek to utilise the deferral. While we don't necessarily see that it needs to be specifically outlined we would not object to a secondary position, that if requested evidence should be provided to the employee to confirm that they are in fact eligible if so sought by the employee or the employee's representative.

PN239

SENIOR DEPUTY PRESIDENT WATSON: What is the difficulty of the traditional order of the Commission which actually specifies clearly in the legal instrument who the deferral applies to? For example in a number of awards you'll find will find specific provisions for example in terms of the named employers in superannuation provisions.

PN240

MS WAWN: Certainly. There are two, I guess aspects to our position in respect to objecting to such a concept. One is that that would be inconsistent with the decision of the Fair Pay Commission, simply that the eligibility deferral is there because you are eligible and you don't need to have separate individual application.

PN241

SENIOR DEPUTY PRESIDENT WATSON: But the Fair Pay Commission position reflected in NFF2 leaves the parties in a position where there is no legal instrument clearly setting out who the exemption applies to, which is a similar situation, is it not, to a failure to provide or provide classification scales which all of the major parties here seem to raise some objection with, with the Fair Pay Commission?

PN242

MS WAWN: Certainly there has been a contention with the pay scales, but NFF believes that it's an issue about - it's under their jurisdiction and it's a separate issue. The issue here is whether or not there should be some identification of an individual applicant as to whether or not they are eligible. Now, first of all we believe that the only way to identify whether or not someone is eligible is providing a list that we as parties are not privy to, otherwise they would have to make individual application.

PN243

We have gone down that track previously and have failed dismally because the process that was applied in those circumstances in 2003 required the evidence of the individual farmer being put to the Commission and assessed by third parties. And the NFF is very much opposed to any of the reopening of that process given the problems associated with the previous attempts to identify people individually and establish their claims.

PN244

Effectively the 2003 process established by Vice President Ross said prima facie if you're under EC assistance then you can get a deferral, but if objected to by the unions then the evidence was required to be reopened before the Commission. And the farmers overwhelmingly said we do not want our private financial records being opened up to the union, particularly when we don't have a union membership on site. Given that process the farmers determined not to pursue that avenue available to them, hence the reason why we believed it was appropriate of the Fair Pay Commission to simply say you as farmers to get the interest rate subsidy have gone through quite a vigorous process of establishing your financial difficulty already, we accept that, and so therefore you automatically get a deferral.

PN245

And with that actually is a document that we believe may be of assistance, the background to the Commission, is a document from the New South Wales Rural Assistance Authority in terms of policing the - or compliance with the industrial interest rate subsidy. Sorry, I'll just hand that up. While I'm talking, this document, in terms of process what happens is the areas declared EC drought declared area, the applicant then applies for interest rate subsidy relief, and then the actual compliance to ensure that they are eligible for interest rate subsidy relief is actually undertaken by relevant state agencies, and in regards to New South Wales it's the New South Wales Rural Assistance Authority. Before I refer to that, your Honour, perhaps I should formally tender that. It's entitled Exceptional Circumstances and Information Bulletin from the New South Wales Rural Assistance Authority in relation to interest rate subsidy assistance.

EXHIBIT #NFF3 EXCEPTIONAL CIRCUMSTANCES AND INFORMATION BULLETIN, NSW RURAL ASSISTANCE AUTHORITY RE INTEREST RATE SUBSIDY ASSISTANCE

PN246

MS WAWN: Simply, and I won't go into the detail, but page 3 of that document which is headed up Assessment Criteria, it outlines in quite detail what the authority has to be satisfied with before it determines the farmer's eligibility in receipt of interest rate subsidy. I won't go to that in detail but simply there for the information of the Commission in the background as to, we believe, the reasoning of the Fair Pay Commission to allow the deferral to apply to these particular individuals given their assessment that has already been undertaken by the state authority.

PN247

We understand once that process has been undertaken then the Commonwealth is advised of the fact that someone has been assessed successfully, and a letter then comes from Centrelink to advise them that they are in fact eligible for interest rate subsidy. So that's the actual process. I just wanted to put that point of clarification as to the process that the Fair Pay Commission considered in terms of selecting those particular individuals.

PN248

SENIOR DEPUTY PRESIDENT WATSON: Ms Wawn, my question didn't go to the appropriateness of that criteria, but rather to the ability of an employee to look at the relevant industrial instrument and determine what their entitlements under it were.

PN249

MS WAWN: Your Honour, it's simply the NFF objects to any individual businesses being named in an award where it is eligible. We believe the appropriate circumstance is that the deferment applies and that it is an issue more appropriately dealt with at the workplace to determine whether eligibility is in fact being correctly applied at that individual workplace with the caveats that Vice President Lawler identified in our discourse earlier.

PN250

SENIOR DEPUTY PRESIDENT HARRISON: Ms Wawn, what is the nominated period that's referred to in the first dot point in paragraph 1?

PN251

MS WAWN: It's no more than 12 months.

PN252

SENIOR DEPUTY PRESIDENT HARRISON: Starting from?

PN253

MS WAWN: It depends on when they've applied. So for example in some instances, say for New South Wales, an area may have been - in many instances areas have been declared exceptional circumstance for up to five years, and you have to apply for an interest rate subsidy relief every 12 months, so it's reassessed despite the fact that the EC area continues - an EC area I think can be declared for a period up to three years. So therefore someone may currently have an EC interest rate subsidy period that may expire on 1 March next year. If they are not successful in having that extended for another 12 months then in accordance with the Fair Pay Commission decision they would then have to commence the rates of pay as of 1 March. They don't wait until the next decision. The Fair Pay Commission says whatever is the earlier, the time upon which you no longer are eligible for the interest rate subsidy or, alternatively, no later than 30 September 2008.

PN254

SENIOR DEPUTY PRESIDENT HARRISON: Is it possible for an employer under the Horticultural Award to become on, for example, 1 November of this year?

PN255

MS WAWN: Yes, they could well be.

PN256

SENIOR DEPUTY PRESIDENT HARRISON: How will that play itself out given they would be obliged, assuming the award is varied from the first pay period on or after 1 October? I'm assuming you accept they'd be obliged to pay for the period 1 October until the date the subsidy status is granted to them?

PN257

MS WAWN: That's correct, yes.

PN258

SENIOR DEPUTY PRESIDENT HARRISON: And couldn't revisit that?

PN259

MS WAWN: Correct. In terms of the role of the Industrial Relations Commission and the interrelationship with the Fair Pay Commission, the ACCI referred to that in some level of detail, and we certainly refer to it at pages 2 through to the top of page 5 in our written submissions. I don't intend to reiterate those submissions other than the importance, the intent the legislation provides in terms of consistency between the Fair Pay Commission's decision and the wages that are contained in the transitional awards. And certainly NFF submits that the decision as a whole by the Fair Pay Commission, including the deferral, is required, is obviously is not - if the decision is not applied in its entirety and the deferral is not part of the transitional awards in terms of pay classifications included then that would again be inconsistent with the provisions of the Act given the fact that it would place employers who are unincorporated, they would be at a different situation than those who are constitutional corporations, and hence we believe that would be inappropriate and inconsistent with the intent of the legislation.

PN260

JUSTICE GIUDICE: I'll just ask another question about this issue of certainty as to whether someone, a particular business qualifies for the exemption. The Centrelink document, does that indicate the date on which the assistance commenced and the date on which it finishes?

PN261

MS WAWN: Yes, it does.

PN262

JUSTICE GIUDICE: It specifies the term of the subsidy?

PN263

MS WAWN: It does, your Honour. And perhaps for assistance - we haven't put that specifically in our documents, but are happy to provide the Commission and parties a copy of that letter to ensure that people are - - -

PN264

JUSTICE GIUDICE: It might be useful to see a specimen document.

PN265

MS WAWN: Certainly. We'll undertake to provide that to the Commission as soon as possible.

PN266

JUSTICE GIUDICE: Thank you.

PN267

MS WAWN: That concludes our submissions, thank you, your Honour.

PN268

JUSTICE GIUDICE: Yes, thanks, Ms Wawn.

PN269

SENIOR DEPUTY PRESIDENT WATSON: Sorry, Ms Wawn, I have one further question that's totally unrelated to what was being discussed. In page 40 of your submission, paragraph 13.4 dealing with shearing and crutching rates, you refer to a recent acceptance of a certain proposition.

PN270

MS WAWN: Sorry, which page was it, sir?

PN271

SENIOR DEPUTY PRESIDENT WATSON: Page 40. Sorry, 28. There's two page numbers on it. Page 28, 13.4. What is that recent acceptance you're referring to?

PN272

MS WAWN: Sorry, the?

PN273

SENIOR DEPUTY PRESIDENT WATSON: Paragraph 13.4.

PN274

MS WAWN: Yes. It's in relation - - -

PN275

SENIOR DEPUTY PRESIDENT WATSON: Shearing and crutching.

PN276

MS WAWN: Shearing and crutching, that's in relation to the formula. The determination of the pay scales for the Pastoral Industry Award has meant that the formula is, and the components within the formula are no longer considered, but rather the end pay rate has been determined as the piece rate for the purposes of the pay scale. So simply prior to the legislative changes the formula was determined on increases to each of the individual components within the formula, including allowances, minimum wages and casual loading to derive a per hundred rate. It has been determined for the purposes of the pay scale that the per 100 rate is simply increased by the percentage increase of the Fair Pay Commission decision without - - -

PN277

SENIOR DEPUTY PRESIDENT WATSON: Determined by whom?

PN278

MS WAWN: The Fair Pay Commission.

PN279

SENIOR DEPUTY PRESIDENT WATSON: By the Fair Pay Commission?

PN280

MS WAWN: The Fair Pay Commission, and it's been agreed to by the parties to the award that that is the appropriate way in which the Act should be interpreted for the determination of how to vary the piece rate for shearing.

PN281

SENIOR DEPUTY PRESIDENT WATSON: And it's the subject of some decision?

PN282

MS WAWN: It's not the subject of a decision. Rather the parties were in discussion with the Department of Employment and Workplace Relations when they were publicising pay scales, and it was a consensus arrangement agreed as to how the Act should be interpreted on considering that formula. But it hasn't been subject to a decision other than a, I guess an administrative decision. And we understand given that pay scales will now be published by the Fair Pay Commission, they will be in discussion with again the parties to that award as to ensuring that we are satisfied that that pay scale is now appropriate given our circumstances. It has been rather confusing because we don't use hourly rates in that award either, and so there has been some difficulty in conversion.

PN283

SENIOR DEPUTY PRESIDENT WATSON: Thank you, Ms Wawn.

PN284

MS WAWN: Thank you.

PN285

JUSTICE GIUDICE: Yes, thanks, Ms Wawn. Ms Yilmaz?

PN286

MS YILMAZ: If it please the Commission. On Friday 10 August VACC also filed and served on the parties the submission of VACC. If you don't have a copy I'm happy to hand up another copy, your Honour.

PN287

JUSTICE GIUDICE: Yes. Are you tendering that?

PN288

MS YILMAZ: Yes.

EXHIBIT #VACC1 WRITTEN SUBMISSIONS OF VACC

PN289

MR WATTS: Your Honour, it might be appropriate to point out that like the NFF, who we have just received a copy of their submission, and we need to receive one for the VACC.

PN290

MS YILMAZ: My apologies.

PN291

JUSTICE GIUDICE: I'm sure that can be remedied.

PN292

MS YILMAZ: We did forward that on to them. VACC in general supports and relies on the submission of the Australian Chamber of Commerce and Industry. Our written submissions are very brief and I propose that my oral submissions will be very brief as well. VACC represents some 5000 businesses predominantly in Victoria and Tasmania. Our members generally are both constitutionally incorporated as well as unincorporated. Our sister organisations, the Motor Trade Associations in other states and territories similarly represent employers that are both constitutionally incorporated and unincorporated. Nationally our organisations collectively represent more than 15,000 businesses.

PN293

The current system is one that requires our organisations to disseminate wage advice pending both the AFPC decision as well as the decision of the Australian Industrial Relations Commission, and in relation to pre reform awards, transitional awards and obviously allowances. The retail motor industry, like a number of other industries, is heavily award reliant. Award rates of pay are relevant to both certain classifications which do pay on award rates, but also for a range of employers in classifications where they do pay above award rates, and previously before the Commission we have tendered evidence of flow on of wage adjustments to over award payments.

PN294

Allowances obviously are very common in our industry and hence the need for us to disseminate accurate and timely wage advice. Failure to disseminate that information does create financial hardship, and we appeal to the Commission to be conscious of that, particularly, as I said, most of our members are small employers and in some respects micro size employers, in the majority of cases with less than 10 employees.

PN295

Whilst we support in principle a common date of affect consistent with the decision of the Australian Fair Pay Commission, however in our view the resolution of orders is integral to the practicality of a common date. Invariably what has happened over the years, there are sometimes errors made in draft orders, there are sometimes differences of views. In the past the success in resolving those differences has been through the use of the panel system before this Commission. It is our submission that it is beneficial to use that panel system to resolve any differences that may arise in the draft orders.

PN296

I note the submissions this morning by the ACTU that there shouldn't be any particular issues given that they should be in the proper form, however it is unclear to us what that proper form may be. It is quite common that we do often have disagreements over rounding off for instance or the historical basis of formulas within awards. For this reason, as I mentioned earlier, it is in our view integral that the panel system is utilised, but also to ensure that the relevant parties, that is the parties that are respondent to the relevant awards, are in fact consulted and do confer. When the 2006 decision was awarded we noted that there were parties that were involved in the process, some parties that are not respondent to the award, and I think in many respects that may have added to the delay in the resolution of orders.

PN297

The final comment I wish to make is that with the Australian Fair Pay Commission decision, I note in our written submission I make point of the fact that the AFPC had identified our two principal awards, the Vehicle Industry Award and the Vehicle Industry Repair Service Retail Award as being awards that are important and need to be dealt with promptly. Whilst those two awards are not subject to these proceedings, my comments in relation to the resolution of draft orders are very relevant to the resolution of those two orders so that we can in fact hand down and disseminate appropriate advice accordingly. If it pleases the Commission.

PN298

JUSTICE GIUDICE: Thank you, Ms Yilmaz. Mr Hargrave?

PN299

MR HARGRAVE: If the Commission pleases. The printing industries in supporting the ACCI submission, we refer particularly to ACCIs rejection of the ACTU in relation to retrospectivity. However we also note, your Honour, that in particular the consideration of a secondary issue which may arise, particularly in relation to this. In that we refer to the ACCI submission at paragraph 47 which relates to where the unions make an application for an increase plus outstanding any pre 2007 increases, that employees should be able to have the scope to argue appropriate introductory levels with any of those pre issue matters. But in toto we support ACCIs submission in this matter.

PN300

JUSTICE GIUDICE: Thanks Mr Hargrave. I don't think you can put it off any longer Mr Cole. Perhaps you can, yes. Mr Felle, yes?

PN301

MR FELLE: I'll be very brief, y our Honour. Jobs Australia filed and served its brief submission on 10 August, and we don't wish to add anything further to that submission other than to comment that ACCIs reference to our members living in the twilight zone was a matter that we raised, that there is and continues to be issues pertaining to the trading preparation status of small employers, particularly in the community sector, and that forms the basis of our comments that are briefly outlined in our submission. If the Commission pleases.

PN302

JUSTICE GIUDICE: That supports consistency between the decisions of the two Commissions?

PN303

MR FELLE: That's correct.

PN304

JUSTICE GIUDICE: Yes.

PN305

MR FELLE: If the Commission pleases.

PN306

JUSTICE GIUDICE: Yes, Mr Cole?

PN307

MR COLE: If the Commission pleases, the Commonwealth has provided a written submission. Could that be marked as an exhibit, your Honour?

EXHIBIT #COMMONWEALTH 1 WRITTEN SUBMISSION OF THE COMMONWEALTH

PN308

MR COLE: The Bench will see from COMMONWEALTH1 that the Commonwealth is supporting the flow on of the Fair Pay Commission's decision, that is the minimum wage decision of 5 July 2007 to wage rates and wage related allowances in transitional awards and also to wage related allowances in other awards of the Commission. The Fair Pay Commission decision of course provides minimum wage increases for the majority of employees reliant on minimum award rates of pay or minimum rates of pay and in the light of that the Commonwealth strongly submits that it's fair and reasonable that the residual group of employees who are reliant on minimum rates in transitional awards of this Commission should receive the same pay increases.

PN309

As we have indicated in the case last year, we submit that a decision to flow on the Fair Pay Commission increases is fully consistent with the relevant objects and other detailed provisions of the Workplace Relations Act relating to the Commission's powers to vary transitional awards. We believe there are no valid or sufficient grounds to not approve the flow on and we say this Commission can support the flow on of the Fair Pay Commission decision confident in the knowledge that to do so is entirely consistent with the requirements of the Workplace Relations Act.

PN310

Now, on a few matters of detail. As to operative date there is broad agreement, subject to submissions by various parties around the edges, that awards of the Commission should be varied prospectively if possible before 1 October. Now, what the Commonwealth says in respect of awards that are not varied before
1 October is that consistent with the requirements of the Act the onus will be on the applicants to demonstrate exceptional circumstances if at that stage they seek effectively retrospective application to 1 October. On the exceptional circumstances interest rate subsidy arrangement we support the adoption of the outcome from the Fair Pay Commission in the same terms or on the same basis as it has been provided by the Fair Pay Commission.

PN311

My friend Mr Watts asserted that he had been informed that the Commonwealth had a list of employers or businesses to whom the exceptional circumstances interest rate subsidy had been granted, or for whom it had been approved. Now, my instructions are that in fact the Commonwealth does not have such a list and that - - -

PN312

VICE PRESIDENT LAWLER: You have the capacity to prepare such a list very easily presumably?

PN313

MR COLE: Well, what the - - -

PN314

VICE PRESIDENT LAWLER: You are paying people who presumably keep track of people that you pay in a particular category? When I say you, the Commonwealth.

PN315

MR COLE: Well, the scheme, your Honour, is administered by, as I think has become clear, by the relevant state primary industry.

PN316

VICE PRESIDENT LAWLER: Okay. In that case then you don't have a list and you can't get it?

PN317

MR COLE: Well, I'm responding to my friend's submission. As to your Honour's question, it may be possible for the Commonwealth to seek through the Department of Agriculture, Forestry and Fisheries to a list. But, if this Commission pleases, we see no intrinsic benefit or value in the preparation of such a list. We consider that to minimise any confusion the best approach, with respect, is to not set up some alternative arrangement from what has emerged from the Fair Pay Commission decision, but to produce a result whereby whether the business be an incorporated business or an unincorporated business, the exemption operates on the same basis. We do not see value in setting up a dual track arrangement for unincorporated businesses different from the arrangement that would apply to incorporated business.

PN318

It's difficult to see what utility, if any, would be gained and we think that would be conducive to possible confusion. Now, it is true that businesses in receipt of, or for whom the interest rate subsidy has been approved, will have documentation obviously informing them to that affect, attesting in other words, to the fact that they are an eligible business. I've heard what the NNF has had to say here this morning. We would say that in most circumstances it would be expected in close knit farming communities that people could deal reasonably with one another to establish what the facts are. The NNF has gone further and appears not to raise any objection and we certainly raise no objection to the notion that on request a business entitled to the exemption might be requested to produce something that attests to that fact.

PN319

We do note however, that the standard - or if I could put it this way. Template forms of advice that the state authorities provide to farmers and pastoralists and so on, does include what some may regard as confidential information. For example the quantum of the actual subsidy which has been approved in respect of the approval period, and obviously there may be privacy considerations surrounding the disclosure of that sort of financial detail, so the only qualification that we would wish to raise in respect of the NNF proposal is that it would seem that if a farmer or pastoralist is requested to produce the template, the document which they are in possession of, that establishes their eligibility, it would not be incumbent upon them to disclose that type of financial detail which they may
not - - -

PN320

COMMISSIONER SMITH: That's not a consistent subsidy is it Mr Cole? It's not a consistent level of subsidy?

PN321

MR COLE: Well, it varies according to a range of considerations. Among other things it's related to the size of the loans which the business has taken out in connection with the purchase of farm assets.

PN322

COMMISSIONER SMITH: Thank you.

PN323

MR COLE: So the size of the subsidy will say something, or could say something about the size of the loan and so on. So it seems on the face of it not unreasonable that a financial detail like that need not be revealed as part of any process of the business otherwise providing documentation to attest to the fact that it is in fact in receipt of the subsidy.

PN324

JUSTICE GIUDICE: So the NNF, not really a proposal, but something that emerged in the discussion this morning with Ms Wawn were to be adopted, that is that the employee could seek the Centrelink document, your suggestion would be that there would be some kind of limitation or masking of the document so as not to provide any information about the extent of the subsidy.

PN325

MR COLE: Yes, that is so, your Honour. And while your Honour mentions, and it's been previously mentioned, Centrelink's documentation, I'm not sure that in this connection we are actually talking about Centrelink documentation.

PN326

JUSTICE GIUDICE: Yes, I think Ms Wawn was going to get the document anyway but it seems an odd agency to be involved in it.

PN327

MR COLE: There is a different scheme which is actually alluded to cryptically in NNF3 was it? On the first page the Commission will see that there are two schemes. There's the exceptional circumstances interest rate subsidy, and what's described here as an exceptional circumstance is relief payment. Now, I'm sure
Mrs Wawn, given her role, is more familiar than I am with these two schemes, but my understanding is that the Fair Pay Commission decision is in fact limited to the first scheme and that Centrelink's role only crops up in connection with the administration of the second scheme.

PN328

MS WAWN: I can clarify as from our understanding. Our understanding is that the state agencies determine eligibility for interest rate subsidy and determine how much as a consequence they are entitled to, but the funding for that interest rate subsidy we understand actually resides with the Commonwealth, so therefore there is two documentations that go to the farmers. One is from the state agency advising that yes they have been successful and how much they are eligible for, but there is also a letter from Centrelink that states a certain amount of moneys will be paid to them. So there's two pieces of correspondence, but as per our original indication, your Honour, for point of clarification, we will get one or not both documents to resolve the actual process.

PN329

But needless to say I think the important context is that there is documentation from a government agency to advise them that they are eligible, that they will be receiving payment and the period upon which that interest rate subsidy is to apply.

PN330

JUSTICE GIUDICE: Yes, I see.

PN331

MS WAWN: So we will ensure that there is clear documentation to resolve any concerns in regard to that. Certainly in respect to marking private - we would simply see the issue of any financial disclosure to be simply marked where appropriate so the intent of the letter can still be shown to the employees but private information is not disclosed, and I don't think there is any inconsistencies with undertaking that process that would - it still would show that they are actually eligible and the period upon which they are eligible to resolve the concerns discussed earlier between Vice President Lawler and myself.

PN332

JUSTICE GIUDICE: Is it possible that assistance having been given for a particular period, to change in circumstances that period might be altered?

PN333

MS WAWN: I'd have to take that question on notice your Honour. I believe that simply once you've been assessed under that criteria that we've provided to you this morning and that the period is provided in the correspondence, that that applies regardless.

PN334

JUSTICE GIUDICE: Yes. In any event I think the terms of the Fair Pay Commission decision indicate that if the assistance ceases then the adjustment becomes payable.

PN335

MS WAWN: That's correct, yes. So it is quite clear that once the period upon which the correspondence advises you, if that comes earlier than 1 October 2008, then the deferral was lifted, sort of what ever is the earlier. As I said, we will ensure that - so therefore in some respects a list provided to you is only going to be relevant at that point in time as opposed to - otherwise it would have to specify periods of when people come off the list or are put on to the list as the case may be, and hence individual identification will be obviously more appropriate than a centralised list that won't be static.

PN336

JUSTICE GIUDICE: Yes.

PN337

MS WAWN: Thank you, your Honour. Sorry Mr Cole.

PN338

MR COLE: Through you, President, I thank Ms Wawn for that clarification, helpful clarification. Just on the issue as to whether the subsidy might - whether eligibility for the subsidy may cease during a predetermined period, my understanding is that it may well cease for example if the subsidised loan is itself repaid during the period for which the interest rate subsidy has otherwise been provided. Then there are requirements on the business to in fact notify the state authority according to our documentation. So as to the enforcement of the applicable wage in respect of businesses to whom the subsidy applies, we say that obviously there can be access to the workplace ombudsman. The workplace ombudsman will be able to follow standard procedures to establish the actual entitlement of the employees, and enforcement can flow from that in the ordinary manner. Now, that may involve the ombudsman in liaison with the relevant state authorities, depending on the circumstances, to confirm the eligibility of the business to the subsidy in a disputed case.

PN339

SENIOR DEPUTY PRESIDENT WATSON: But, Mr Cole, the ombudsman can't determine where your entitlements - we wouldn't want to have a situation where a vague exemption in a legal instrument led to any disputes being resolved by application of the Federal Court or the Federal Magistrates' Court would we?

PN340

MR COLE: Well, it's simply a question of whether the condition precedent to a payment is or is not applicable. It seems a simple factual question as to whether the business does or does not have the subsidy applicable to it. The ombudsman is not - - -

PN341

SENIOR DEPUTY PRESIDENT WATSON: Which ultimately could only be determined by a court of competent jurisdiction.

PN342

MR COLE: Well, ultimately that may be the case, but most disputes it could be anticipated in the practical situation issues could be expected to be resolved once it is in fact established between the parties with the assistance of the ombudsman whether the business does or does not have eligibility that's been conferred on it in respect of the subsidy, which will turn on whether it does or does not have the paperwork from the relevant State authority that attests to the fact that it's in receipt of the subsidy and, of course, on the other issues about whether the employees are covered by one of the currently three stipulated awards.

PN343

If the Commission pleases, if I could turn briefly to the other issue that's been raised by ACCER. With respect to ACCER we say that the submissions that have been put fall a very, very long way short of establishing any sort of arguable case that the Fair Pay Commission decision is flawed in some way for the reason that the Fair Pay Commission did not have regard or did not have proper regard to the principles embodied in the Family Responsibilities Convention. Now, the Commonwealth does not support the proposal that the federal minimum wage should be further increased in the manner suggested by ACCER. Now, we say that it is clear on the face of the Fair Pay Commission decision that the Fair Pay Commission did take into account, among other things, the Family Responsibilities Convention.

PN344

The ACCER, in our submission, faces an insurmountable, in our submission, hurdle in seeking to advance its case. It really has to, on our submission, persuade this Full Bench that the discretion of the Fair Pay Commission miscarried. Now, clearly the Fair Pay Commission is vested with a discretionary decision making power and it is required of course to have regard to a range of criteria spelled out in the Act and to the objects that apply to it. Now, the ACCER has effectively looked narrowly at one of the criteria. One aspect of one of the criteria to wit the criterion relating to the safety net. The Fair Pay Commission decision of course has regard to all of the stipulated criteria, and that's apparent from section 1.5 which appears at page 72 of the printed decision.

PN345

So the discussion about the Henderson Poverty Line and so on appears in the preceding section 1.4 which deals with providing a safety net for the low paid. In 1.5, setting out the conclusion the Fair Pay Commission makes clear that for example in the second paragraph, that it, the Fair Pay Commission, has considered the impact of its decision on, and without reading them out, each of the statutory criteria to which it's required to have regard, of which the safety net for the low paid is but one criteria. So the real issue with respect to ACCER is whether it can in any way be demonstrated that in balancing all these factors as it clearly was required to do and did do, whether that resulted in a miscarriage of the Commission's discretion. And we say that the ACCER has not demonstrated any sort of arguable case to that effect.

PN346

JUSTICE GIUDICE: Mr Cole, isn't it arguable that the material concerning the poverty line indicates that the Fair Pay Commission's looked at the provision of a safety net in a way which has ignored the position of two adults in the same household where one chooses not to work in order to attend to family responsibilities?

PN347

MR COLE: With respect, your Honour, I don't think it can be concluded from the set of scenarios that are set out that other possible scenarios are ignored. Indeed the very wording of the decision makes it clear that the Fair Pay Commission did not regard the listing of those scenarios as in any way exhaustive or as indicative of the parameters, if I can put it that way, of its own consideration. I'd also like to draw the Commission's attention, and I can best do this by reference to ACCER's submission, to an important aspect of the wording of parts of the convention. If the Commission could refer to the ACCER submission. Have you got ACCER1, your Honour?

PN348

JUSTICE GIUDICE: Yes.

PN349

MR COLE: And perhaps at page 6. And the burden of the particular references to which I wish to draw attention is really to say that on my submission they would actually tend to support rather than detract from the inclusion of Newstart in the calculation. Firstly, in paragraph 14 there is a reference to, quoted by - an extract quoted by ACCER and it refers to, "Enable persons with family responsibilities" and these are the words I emphasise, "who are engaged or wish to engage in employment." And then if the Commission could refer to a couple of the articles that are actually referred to at the bottom of the page in the sections that have not been emphasised by ACCER, article 3 starts:

PN350

With a view to creating effective equality of opportunity and treatment for men and women workers.

PN351

And article 4 commences with the same preamble:

PN352

With a view to creating effective equality of opportunity and treatment for men and women workers.

PN353

Now, clearly important - - -

PN354

VICE PRESIDENT LAWLER: Mr Cole, I don't think the ACCER makes any sexist assumption about which of the parents is remaining home to look after the children. What it's arguing is that the approach of the Fair Pay Commission has ignored the right of couples to make a choice that one of the parents will not work for paid employment or rather assume family responsibilities and work without pay looking after the family.

PN355

MR COLE: Yes, they have made that argument, your Honour, but that, on my submission, is without any further explanation by ACCER who really just look at the literal wording of the Family Responsibilities Convention. They are implicitly attributing a particular meaning to the convention as it operates according to Australian national conditions, whereas they haven't taken this Commission to, explicitly to the issue of the proper interpretation of the Family Responsibilities Convention, and nor is it the burden of my submission to seek to do so, except to point out what I've just said, that ACCER certainly has not attempted to do so itself and, secondly, there are parts of the wording of the convention that suggest that it is open to a more general wide range of interpretation than what seems implicit in the argument that is being delivered by ACCER, because articles 3 and 4 go on to talk about, to put the emphasis on, put the focus on persons with family responsibilities who are engaged or wish to engage in employment. So it's focused on, it appears, on the circumstances of workers, men and women workers who wish to engage in employment rather than - which is a more wide ranging consideration that what seems to exist in ACCERs approach.

PN356

So it's not the burden of our submission to purport to be dissertating here on the full interpretation of the convention, rather to point out that ACCER seems to have shrunk from that objective. It's been pointed out by others that these sorts of issues evidently have been raised by ACCER with the Fair Pay Commission, and it's open to the ACCER to develop a more wide ranging case if it seeks to do so in the future. So concluding on that point, we do not support the argument that has been put. We do not support an additional increase and we say the test should be,
has it been established in any way at all that the discretion of the Fair Pay Commission was carried? And we say that it is impossible for such a contention to be made out. If the Commission pleases.

PN357

JUSTICE GIUDICE: Thank you Mr Cole. Incidentally, I've marked the Jobs Australia submission of 10 August 2007.

EXHIBIT #JA1 JOBS AUSTRALIA SUBMISSION DATED 10/08/2007

PN358

JUSTICE GIUDICE: Mr Watts?

PN359

MR O'GRADY: Your Honour, I'm in a position to respond to your question earlier concerning the continued availability of the Newstart allowance.

PN360

JUSTICE GIUDICE: Yes.

PN361

MR O'GRADY: And also I'd like to add something to a response to a question to is Honour, Senior Deputy President Watson about our table. In relation to the Newstart allowance, the allowance continues to be available so long as the conditions in the activity agreement are continued to be satisfied. We have identified in summary form the conditions attached to an activity agreement at paragraphs 40 and 41 of the ACCER submission to the AFPC which is attached to our submission to this Commission, to add to what's there.

PN362

In essence during the first three months the participant must be actively looking for work. Beyond three months and up to five months there is a period of intensive support during which the participant might participate in an approved course of study as well as continuing to apply for work, or at least seek work. After five months mutual obligations start to enter the ....., such as register for volunteer work other than school assistance or parent helping in the school, as well as work for the dole and continued training. From six to 12 months work for the dole, assisted activities arrangements and further training. From 12 to 18 months mutual obligation arrangements such as work for the dole. So subject to satisfying those matters then the Newstart entitlement is continuing.

PN363

I suspect that it is the case that if a participant doesn't agree to those matters then the payment stops, and one can imagine that there would be administrative arrangements in place to protect against abuse of the entitlement as well. Now, turning to your Honour, Senior Deputy President Watson's question about the table and in particular whether there's anything that our table does not include. We pick up from table 1.10 at the AFPC decision all of the transfer payments and take out the Newstart allowance. Everything else stays in. Now, we don't include the parenting payment in our table because table 1.10 of the AFPC decision is based on a family with two children aged eight to 12 and there is no entitlement to the parenting payment when children are of that age. So I just want to expand and explain why it was that we didn't include in our - - -

PN364

SENIOR DEPUTY PRESIDENT WATSON: There's no more favourable tax threshold in that circumstance?

PN365

MR O'GRADY: There may be an effective marginal tax rate consequence but I doubt whether it would be of any significance, your Honour. Those are the matters that I wanted to respond to. As an intervener I feel constrained from responding to Mr Cole's comments and leave it at that your Honour.

PN366

MR WATTS: A couple of procedural matters if I could?

PN367

JUSTICE GIUDICE: Yes Mr Watts.

PN368

MR WATTS: I neglected to raise the issue of the supported wage. At page 19 of our submissions, we are seeking an increase of supported wage from $64 to $66 per week, and as far as I can see that there are no objections to that application to vary the supported wage amount. The other thing I should note is that not all the applications before you have been rounded. The draft orders have not been rounded in all of them, and I would note that in the Clerical Award, the Crisis Assistance Award, the Victorian Local Authorities Award, the Metals Award, the Graphic Arts and the Horticultural Awards, there has been no rounding by the applicants with the other awards. They've been rounded to the nearest 10 cents, and the same should be afforded to those applications that I've just mentioned, those awards that I've just mentioned.

PN369

VICE PRESIDENT LAWLER: Will your affiliates who are responsible for those awards be submitting amended draft orders?

PN370

MR WATTS: Yes indeed. The ACCI put that the ACTUs position of principle should be amended. And just to clarify that position so there be no uncertainty. The position I stated earlier in fact stands. We're not seeking a variation to the principles, notwithstanding page 28 of our written submissions. On the face of it our position is that there be no need for a variation of the principles in that we're not seeking retrospectivity. We have a concern that ACCI has a view that if the ACTUs position regards operative date is accepted the unions could sit on their hands for six months. In fact that's a complete misreading of what our position is. The application has to be in an appropriate form, and by appropriate form that is that they would be in an appropriate order, appropriate necessary detail and draft orders, if prior to 1 October or some other date in the alternative as close to
1 October as would provide the registry with reasonable notice.

PN371

It's also been put that there's no objection on the part of ACCI to matters being heard on papers. I think that the view that I hear, although that hadn't been said by ACCI, I think that the view here is that the general view that's been put is that the matter should be finalised and that they should be heard and determined. Now, we, that is the draft order, should be heard and determined. But we do in fact put the position that the matters be heard and they be heard on the papers, hence our position that they be in appropriate form capable of being heard. If it's desirable that there be a gap to allow parties to peruse, we think that that might be desirable if the Commission, and particularly the registry, believes that they need an appropriate period for the applications to be submitted prior to the operative date.

PN372

It's also put by ACCI that it's an equitable situation as constitutional corporations don't have to - this is in relation to - sorry, this is in relation to the exemption, the deferral - that constitutional corporations are not required to offer any evidence. What we say to that is that the burden in fact is very small and we're seeking that the evidence is not of any great - no great burden to actually provide that evidence. I'll come to that again in a minute if I may. It's been put by AIG that the 2000 wage case dealt with some of the matters that we're seeking in terms of what they say is retrospective operation. The circumstances under the old Act and the new Act are quite different, as recognised in your decision last year in this matter, that in 2003 there was certainly no AFPC to deal with and the statutory regime was very different indeed. I think that we are in a very different world recognised by last year's decision, where in fact this Bench as previously constituted determined that it would have to be unusual circumstances not to flow on the AFPCs decision.

PN373

It's been put that there's three months to implement this decision. In fact of course there's not three months to implement this decision. This decision hasn't been made yet. Given the period of delay from the AFPCs decision to this hearing, subsequent decision and then the processing of draft orders is certainly something less than three months. But we're quite confident that employee associations, unions, are in a position to file applications in accordance with the decision that this Bench may make in a relatively quick process. We've had discussions with unions to ensure that there is an orderly process for them to do so. Having said that, some unions have an extraordinarily large number of respondents. The normal process of course of discussions, orders for substituted service and the like will take some time. We would think that we would be concerned that any decision of this Bench would provide an incentive to any employers to delay those discussions.

PN374

For some unions those discussions are considerable and can be problematic, they've been proved to be problematic in the past, but we certainly would be, as I said, very concerned that if an operative date of 1 October is - there is an incentive to delay that operative date, that we would hope that that incentive is removed by a process that would allow that operative date to be applied if everything that the unions could do, that the applicant unions could do, has been done. On the deferral for employees in the horticultural, pastoral and agricultural industries, we would urge you to not put any onus on the employees. If indeed you're of a mind to put any onus on the employees to ask for evidence, that you not do anything on that matter, you just grant the deferral and leave it at that. To these employees it's simply a waste of time, the employees are not going to ask for it and they're not going to ask for it for clear reasons, and that is that they'd be fearful of asking for it.

PN375

These are small businesses and we disagree strongly with the Commonwealth's position that people in these sorts of industries should be able to just sort it out amongst themselves. It's not the role of the employee, the onus on the employee to approach their employer on such matters. They're simply not going to do it. They're not in a position to do it. Our relationship dictates that. It's simply not going to happen. So if you're of a mind to do that, we urge you not to. If you don't put the onus on the employer, don't provide an onus at all, forget it, simply not - a waste of time, simply not going to happen. Employers won't do it because they'd be fearful, and the current statutory regime provides remedies to the employee, or if they're not happy, albeit perhaps something that an employee might have remedy on, but if the employer takes action for them taking that initiative, we have certainly concerns.

PN376

We have a concern also of course, and the reason we ask for this list is that the 10 or 11 per cent of employers that might be eligible for such subsidy, we can bet our bottom dollar there's going to be more than 10 or 11 per cent of employers are going to claim that they're eligible for this subsidy. That's our concern. How do we get to the bottom of that without a list? We simply don't because employees aren't going to take that initiative. If a list is provided or if there's a list that is available it should also show who the employer is, the employer of the employees.

PN377

There is a concern that the many farming groups or groups of companies may have very different - they may be in fact as a group eligible for a subsidy, but the employing entity may well be very different. In fact in many cases it is different, and there's a concern there that there's going to be some confusion as to who the subsidy applies to or doesn't apply to. So if 10 per cent of employing groups are in receipt of a subsidy, the employing body being part of the - the employer may well be part of that group, but may not be in receipt of the subsidy. So there is a further complication there. We don't offer a suggestion as to how to resolve it other than that the subsidy, if there is a list that shows a subsidy, should show who the employer is that is in receipt of that subsidy, rather than a group. It's simply not open to employees to take these matters to court, it's not going to happen. Farm hands don't take their employers to court generally.

PN378

JUSTICE GIUDICE: Mr Watts, what about the difficulty which I think emerged of the list altering, the employers coming on and off the list as it were?

PN379

MR WATTS: I think that the only thing we can ask for is a list as it would apply as of 1 October or thereabouts, as near as possible to 1 October. I do understand that that will be a difficulty. It would be a reference document, not one that provides any great certainty into the future. I think that it is certainly possible, and we can see that there are movements in some of the drought declared areas, that there is a review being undertaken as I understand now in some of the drought declared areas, as to whether they will continue to be drought declared zones, I understand, if that declaration is varied.

PN380

It may not vary before the election, but if it is varied that some of the subsidies are no longer applicable and there will be changes as a result. These things will fluctuate and I don't - we don't seek a moving feast, an ongoing change, a list that is capable of alteration at any time. I think though as a reference point, as a starting point we would seek a list so that those employees who do not obtain an increase on 1 October and wish to follow that matter through can do so. Beyond that we understand that there will be some difficulty with an ongoing list and changes to the eligibility. People will come on and come off I dare say.

PN381

We note that the NFF has no objection to an evidentiary requirement of some sort now. We haven't had the opportunity to peruse the NFFs submissions, written submissions we've just received in any great detail, but from what we can see, and from your previous discussions it appears that there indeed is a document, a Centrelink document that we would imagine that there is possible to derive from the Commonwealth a central list. At the very least it is possible, if not that there be provided a central list from the Commonwealth, that in the alternative the onus should be for the employer to provide such a document or evidence of such a document to the employee.

PN382

We would urge that that document clearly indicate that they're in relief, they're in receipt of a subsidy and that it be the employer that is the - the employing body that is in receipt of that subsidy. Beyond that we don't believe that any other information needs to be shown. It is difficult given that we don't have that pro forma before us, but we see that there be no other information that the employee would require. We note the Commonwealth's position that no list exists, and we are of a view that, without knowing the inner workings of the departments, would be very surprised if the department wasn't capable or a department wasn't capable of producing a list at some stage.

PN383

If they weren't then there's certainly other issues there that might need to be investigated. In relation to whether the - what the AFPC has considered or not considered, quite frankly I don't think any of us will ever - we're only guessing as to what the AFPCs final determination, how they came to their final determinations, whether they considered their obligations, their statutory obligations, or didn't consider their statutory obligations, I don't think that any of us can know for certain what they've considered and what detail they've considered. It's an interesting process, a different process to the one that's before us today.

PN384

We would urge the Commission to pass on the increase to Australia's lowest paid employees, but we would urge the Commission to not grant the deferral, but if it be mindful to do so to grant a deferral in the agricultural, horticultural and pastoral industries, that it do so with an evidentiary onus on the employer, not the employee. We ask that an operative date be provided as of 1 October, on the first pay period on or after 1 October, and that there be the applications provided, the applications be received in the proper form, and the draft orders be received in proper form, that the matters be heard on the papers, provided they be heard on the papers prior to 1 October, that those applications be granted. At this stage there's nothing further, if the Commission pleases.

PN385

JUSTICE GIUDICE: Thanks very much Mr Watts. Any other submissions? Thank you all for your assistance. We shall reserve our decision. It may be that we will announce a decision before giving full reasons but we won't do either today. We will now adjourn.

<ADJOURNED INDEFINITELY [1.09PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #ACTU1 SUBMISSIONS OF ACTU DATED 08/08/2007 PN16
EXHIBIT #ACCER1 SUBMISSIONS OF ACCER DATED 08/08/2007 PN66
EXHIBIT #ACCI2 SUBMISSIONS OF THE ACCI PN119
EXHIBIT #AIG1 WRITTEN SUBMISSIONS OF AIG PN167
EXHIBIT #NFF1 WRITTEN SUBMISSIONS OF NATIONAL FARMERS FEDERATION PN193
EXHIBIT #NFF2 LETTER FROM CHAIRMAN OF FAIR PAY COMMISSION DATED 03/08/2007 PN211
EXHIBIT #NFF3 EXCEPTIONAL CIRCUMSTANCES AND INFORMATION BULLETIN, NSW RURAL ASSISTANCE AUTHORITY RE INTEREST RATE SUBSIDY ASSISTANCE PN245
EXHIBIT #VACC1 WRITTEN SUBMISSIONS OF VACC PN288
EXHIBIT #COMMONWEALTH 1 WRITTEN SUBMISSION OF THE COMMONWEALTH PN307
EXHIBIT #JA1 JOBS AUSTRALIA SUBMISSION DATED 10/08/2007 PN357