AM2008/2, Transcript of Proceedings [2008] AIRCTrans 695 (3 November 2008)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996

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

AM2008/2 AM2008/3 AM2008/4 AM2008/5 AM2008/6 AM2008/7 AM2008/8 AM2008/9 AM2008/10 AM2008/11 AM2008/12

s.576E - Award modernisation

Award Modernisation
(AM2008/5)

Sydney

10.11AM, MONDAY, 20 OCTOBER 2008

PN1

JUSTICE GIUDICE: Good morning everybody. It might be useful to take appearances so we know at least who is here, and perhaps you might indicate how long you think your submission or contribution might take, and we'll try and get some assessment of how much time we're going to need. We'll start with the bar table.

PN2

MR C HARRIS: I appear for the Australian Chamber of Commerce and Industry.

PN3

JUSTICE GIUDICE: Yes. How long do you think you'll be, Mr Harris?

PN4

MR C HARRIS: Your Honour, I expect about 40 minutes.

PN5

MR M MEAD: I appear on behalf of Australian Industry Group and Engineering Employers Association of South Australia, together with MR S SMITH. I anticipate I'll be approximately 40 minutes as well.

PN6

MR R WARREN: I appear by leave for the Australian Federation of Employers and Industries. Your Honour, we will be short and we'll make seven short points.

PN7

MR M BISSETT: I appear on behalf of the ACTU, together with MR M GAYNOR. I anticipate, your Honour, that we will be about an hour.

PN8

MR S MAXWELL: I appear on behalf of the Construction, Forestry, Mining and Energy Union, Construction and General Dvision.

PN9

JUSTICE GIUDICE: Yes, you'll get your chance later on, Mr Maxwell, I think.

PN10

MR A HERBERT: I appear instructed by two parties. One is the Australian Meat Industry Council, and the other is Sun Super Pty Ltd, a superannuation provider, and submissions in total should occupy no more than five or six minutes.

PN11

MR A MORRIS: I appear on behalf of the Coal Mining Industry Employer Group. We expect to be very short. If any submissions are required I think we're all here to be ready to deal with matters that are raised, if the Commission pleases.

PN12

MR H SKENE: I appear on behalf of the Australian Mines and Metals Association. We too hope to be short today.

MR B LAWRENCE: I appear on behalf of the Australian Catholic Council for Employment Relations, together with MR E LEAHY. We will take no more than 10 minutes.

PN13

MS S BURNLEY: I appear on behalf of the Shop, Distributive and Allied Employees Association. I am hoping I will be making submissions today.

PN14

JUSTICE GIUDICE: In relation to the Retail Award, yes.

PN15

MR S WOOD: I seek leave to appear on behalf of two parties, NECA and the CEPU to make a joint submission on their behalf in relation to one issue, a question of overlap, and I imagine I'll be no longer than five minutes.

PN16

MR L BENFELL: I appear on behalf of the Communications, Electrical and Plumbing Union.

PN17

MR A SLEVIN: I seek leave so far as it's necessary to appear on behalf of the CFMEU Mining and Energy Division. I expect I'll be about 15 minutes. I'm instructed by MS J GRAY, who is at the bar table with me.

PN18

MS .....: I seek leave .....

PN19

MR S MEEHAN: I seek leave to appear as counsel for two clients, namely, Investment and Financial Services Association Ltd, and Financial Planning Association of Australia. I will be 10 minutes.

PN20

MR D BROANDA: I appear on behalf of the AWU and the AWUEQ. Your Honours, I'll be no more than five minutes.

PN21

MR R WATTS: I appear on behalf of the Industry Super Network. We expect that our submissions would last no more than 10 minutes.

PN22

MR T MCDONALD: I seek leave to appear on behalf of Restaurant and Catering Australia and Hotel, Motel and Accommodation Association. My submissions will be very brief.

PN23

MS P VAMOS: I appear on behalf of the Association Superannuation Fund of Australia. I'll be five minutes.

PN24

MR R NASSIF: I appear on behalf of the Local Government Association of New South Wales and the Shires Association of New South Wales. Your Honour, to the extent that submissions are required we intended to rely upon our written submissions.

PN25

JUSTICE GIUDICE: Commendable, thank you.

PN26

MR S NANCE: I appear on behalf of the Queensland Chamber of Commerce and Industry. And after that last remark I'll follow the last gentleman.

PN27

MS D CARSTENS: I appear on behalf of Asian Women at Work, together with MS A ZHANG. We expect to be about 15 to 20 minutes.

PN28

MR A WOODS: I appear on behalf of Rail Skills Career Council; five minutes, if at all.

PN29

MS P NOWACKI: I seek leave to appear on behalf of two clients, the Civil Construction Federation and the Recruitment Consulting Services Association. Both will be relying on their written submissions today. If it necessary to provide any verbal submissions they will be very, very brief.

PN30

MS FUSITUA: I appear on behalf of the Australian Film, Television and Radio School. I imagine it would be unlikely that we'll be making submissions.

PN31

MS D RALSTON: I appear on behalf of the Queensland Council of Unions. The submissions today will probably take no longer than five minutes.

PN32

MS B MYERS: I appear on behalf of the Textile, Clothing and Footwear Union of Australia. We don't intend presenting any oral submissions today. We'll save those for next week.

PN33

JUSTICE GIUDICE: Are there any appearances in Melbourne?

PN34

MR M BROMBERG: I appear on behalf of State Superannuation Pty Ltd. I'll be a few minutes.

PN35

JUSTICE GIUDICE: Well, I should indicate that all of the applications for leave are granted. I think people should feel free to arrive and depart as they see necessary or according to their interests without seeking any permission in that respect. So to that extent we'll try and keep the proceedings reasonably informal. However, in order to get through and make sure everybody gets a chance to say what they want to say we'll probably observe the usual Commission submission practice of hearing people in the normal way.

PN36

Before we go any further, there is an issue about programming. Perhaps just before lunch I might ask for any suggestions about how we deal with the individual exposure draft. We've reserved today for consideration of the general issues that might arise in relation to modernisation, and we intend to deal with the individual exposure drafts in the order in which they appear on the notice of listing. There are some specified for tomorrow, and then the three days next week we intended to go through the order in which they appear.

PN37

However, we understand that some parties have some commitments on 29 October, so it may be desirable to rearrange the program to some extent to accommodate that. So perhaps we might deal with that just before we adjourn for lunch or just after lunch so that that can be dealt with. Yes, now, is there any agreement on the starting order?

PN38

MR HARRIS: Your Honour, I understand I'll go first.

PN39

JUSTICE GIUDICE: Yes, very well, Mr Harris, thank you.

PN40

MR HARRIS: The ACCI has provided some written submissions to the Full Bench in response to the exposure drafts in the early stages of the process and will continue to rely on those submissions. Today I merely wish to address you on some matters of general principle and approach, primarily those that arise out of the submissions of other parties, mainly the ACTU contentions and the submission of the Commonwealth. By starting I'd like to briefly put these proceedings in an economic context.

PN41

Clearly the world has changed so much since the award modernisation and we're entering a period of some economic uncertainty and turbulence. In a recent statement by the Prime Minister on 14 October, where he said, to quote him, that "Tough times have arrived," and likewise the governor of the Reserve Bank in a statement of 7 October 2008 gave some warning about the expected slow downs of the Australian economy and changes to the conditions to national ..... parts of Asia. The situation obviously is changing rapidly and we'll have a better picture of where we might be in 2009 when the mid year economic forecast is released. Already some industry sectors are reporting new or difficult market conditions.

PN42

I understand that before you, you do have some material and submissions from some of the industry parties that goes to these - that they are a starting base. In our submission this reinforces the necessity for this process to not result in any substantial cost increases for employers, in particular the industry sectors and that is the one key message that ACCI wishes to convey today. With that introduction I'd like to turn to the written submission of the ACTU.

PN43

The submission in response to the exposure drafts, award modernisation exposure draft submission in October 2008, and I wanted to press, your Honour, a limited number of issues that arise out of the ACTUs submission. And the first issue, and from our perspective as a peak employer group that we have most concern with is the issue of award content and the approach that will be taken for award content discussed in chapter 3 of the ACTUs submission.

PN44

Essentially what we understand the ACTU are proposing is that the content of an award that was present before the commencement of the WorkChoices amendments to be considered as being the standards that would be in modern awards, enable as a safety net minimum working conditions, and the ACTU have emphasised what they thought the reintroduction of fairness and this is at paragraph 51 in their submission.

PN45

What we've said in response in our written submissions and what I wish to reiterate as our firm approach today is that the starting for the content must be existing and extant content of the pre reform awards and other instruments. The ACTU rely on, and in their submission they refer to the content that is included in Part 10A of the Act. It's their submission that Part 10A demonstrates a clear intention of the Parliament to provide a safety net that differs in every respect to this in Part 10. I'll say a bit more about that Part.

PN46

Our reading of the Act in relation to the award modernisation process is that it requires the Commission to undertake a balancing act between a range of competing factors. Any process that results in substantial new content being included in awards that would have coverage over employees will not be a balancing act unless other measures are considered to ameliorate those costs impacts. For that reason we think that having regard to section 576(2)(c) states that modern awards must be economically sustainable.

PN47

The starting point and the only sensible approach is to consider the extant content constitutes the existing entitlements of employers and the obligations of employees. It's our submission the ACTU arguments in relation to Part 10A may go to what we might call the allowability of content, but they do not go to the overall judgment which must be brought to bear on the content of modern awards, which must be based on the balance of considerations I've referred to.

PN48

Amplifying section 576(2)(c) of the Award Modernisation Request states that this process is not intending to increase costs for employers. Clearly the introduction of substantial new content or approaches of entitlements that increase those entitlements, that enhance them, even where they may be provisions or entitlements that, however, are endorsed by a Full Bench in the test case are likely to have the effect of increase in labour costs. For that reason we urge the Full Bench to take a cautious approach in relation to the inclusion of allowable content.

PN49

Further, it's our submission that what is required in relation to each of the modern awards is an assessment of whether a draft modern award, particularly taken as a whole, would have an effect of increasing labour costs in relation to particular employers where a modern award doesn't include in new content in several matters, enhancements to entitlements, and increase in labour costs involving shifting from existing instruments to a modern award that start to mount.

PN50

Several ACCI members have now started to undertake this kind of analysis in relation to both the existing instruments that employers are covered by in the modern awards, and we would put those detailed matters to you. It's our submission that if an analysis does support a conclusion that, and the transition from existing instruments to a modern award, there are significant labour cost increases to employers, this would provide a basis for further review of the content of the award and consideration of additional measures to ensure those impacts are ameliorated and modified.

PN51

And clearly there are various options open to the Commission to achieve that aim, and they should be further discussed with the industry parties who are most close to both their industries and issues of awards. I'd now like to turn to the issue of small business redundancy, which is discussed in the ACTU submission at paragraph 59. And the ACTUs position is that small business redundancies be included in all modern awards and we would urge the Commission not to take that approach, except for the exposure drafts ..... modern award claim but would be ..... by including small business redundancy provisions. None of the existing pre reform awards will have small business redundancy pay except we understand where redundancy provisions are provisions that were carried over prior to the legislative changes that introduced section 513(1)(k) and it is acknowledged at paragraph 65 of the submission.

PN52

Our primary submission is that the position of small business redundancy could be a major cost and therefore we oppose the inclusion in modern awards, but where a two player role we would see that role as being in those industries where the small business redundancy is an existing entitlement. And this would be very limited number of modern awards it would appear.

PN53

The next issue I wanted to touch on and give submissions, the issue of industry differences, and I talk about that in light of our submission in terms of adopting what we'd call model content. That's discussed at chapter 5 of the ACTU submissions where the ACTU in chapter 5 urges that the process of award modernisation will not be about the development of monochrome standard conditions of employment. I just wanted to clarify the submission that we make somewhat. It's my submission - - -

PN54

JUSTICE GIUDICE: You prefer technicolour do you?

PN55

MR HARRIS: Sorry?

PN56

JUSTICE GIUDICE: You prefer technicolour?

PN57

MR HARRIS: Indeed I do, your Honour. It's my submission essentially that the two views of the ACTU and ourselves are reconcilable. We describe the model, the ideal model content ..... bunch, and that a model formulation be adopted, simply those covered by awards provide a basis for ..... of content, and that, in our submission, will not be particularly different from what used to occur for the test cases.

PN58

But we also wish to acknowledge that there is scope for industry differences and they should be acknowledged and reflected in awards. So where there was no intention to apply the standard formulation where no industry party presented a basis for that to happen, there might be some regulatory advantages to having multiple content to apply across it and obviously there are a limited number of provisions where that would be the case. It is our submission of course that a number of these awards need to be guided by the specific conditions and requirements of particular industries and particularly in respect of conditions which go towards ensuring the economic sustainability of that industry, and in our submission evidence from industry on cost impacts and other operation impacts should clearly guide the creation of any provisions that are going to make up the modern awards.

PN59

In that context I would also just like to refer to the submission made by Master Builders Australia. I'll just read out their submission where they describe in their submission at paragraph 3.12 where they say in the middle of that paragraph - essentially the point they're trying to make is that the Commission should have regard to appropriate levels of aggregation, applying for a criteria to permit the reduction of the number of awards but which also deliver industry level regulation consistent with the precepts and the aims of modernisation.

PN60

There are submissions from various ACCI members that provide information on operation and economic impacts for their industry being included in particular modern award groupings and our submission is that the material should be given substantial weight and in particular highlight the issues raised by the Pharmacy Guild of Australia in their submission in relation to exposure of the modern Retail Awards being material of that kind. The ACTU states at paragraph 105 of conflicting differences within the industries of the modern award are warranted, particularly from their perspective of the alternatives to disadvantage employees or unjustifiably increase costs for employees.

PN61

It's a proposition that ACCI would support and the way we've expressed it in our submission is that we'd be prepared to wear some complexity in awards if the result was an avoidance of additional labour costs and we submit that would be consequent with the Request and it may be that there is some industries, some modern awards where creation of those awards by reference to the underlying instruments is relatively straight forward but it may be that now we're in the middle of this you can see that there's going to be quite a challenge in other areas and an obvious way to reduce the level of challenge in meeting the request would be to provide differentiated conditions for industry groups where otherwise the consequence might occur.

PN62

JUSTICE GIUDICE: Isn't this all just, without wanting to trivialise the point you're making at all, but isn't this really a question of the degree to which existing differences can be rationalised and the degree to which they have to be maintained and there seem to be countless points at which one encounters that issue and a judgment has to be made about it?

PN63

MR HARRIS: We take your Honour's point. It's a very difficult process and if you look at the Act and if you look at the Request that requires this balancing act to being made and for a judgment for it to be made about where you rely on it.

PN64

JUSTICE GIUDICE: Yes.

PN65

MR HARRIS: Quite clearly the Commission is required to have regards to the desirability of reducing the number of awards. Yes, it's our submission that where the evidence is presented or the evidence now receiving exposure drafts where industry parties are able to provide evidence of substantial labour cost increases or other difficulties in that industry is that it gives us opportunity to realise that perhaps that level of aggregation has not worked in relation to that industry and that it is time to figure out what can be done to ameliorate those impacts. Clearly there are a range of measures open to the Commission and some of them could be - and I recognise that there are limits on this, but one of them obviously is some further delay for additional conferences of gathering of further evidence.

PN66

But I'm mindful of the timeframe that's pressed on it and splitting obviously the briefing of work has unintended consequences. Additional transitional measures and the industry parties have a much better sense of what transitional measures would be appropriate to the issues, savings clauses or additional measures to balance out as overall swings and roundabouts. But it's merely my submission, your Honour, is that where you have the evidence before you that arrive at it as substantial labour cost impacts that should be caused.

PN67

JUSTICE GIUDICE: Yes, thank you.

PN68

MR HARRIS: I just wanted to briefly address the Commission on dispute resolution and consultation and in particular the ACTU raised this at paragraph 194 of their submission, and I read from the ACTU submission where they say:

PN69

ACCI submitted that any term of consultation and representation should only impose a duty or obligation on the employer to consult with employees and possibly the relevant union.

PN70

Just to clarify that, I don't propose involving the union where that is requested by the employee and we say as regards the formulation and this is the approach that where requested by the employee, there will be consultation with the union but we do oppose the employer to directly notify the relevant union whether or not that is a request for the employee. I just now wanted to briefly turn to the issue of accident make up pay which is at page 55 of our submission. The Commonwealth - there is some argument that make up pay in the award based on a reading of section 576J(2)(g). The ACTU are relying on the formulation of that section, allowances, including for any of the following. I take the submission as almost saying that the matters specified in 576(2)(g) are really examples. We would say that there's a presumption that they are the matters that would normally constitute allowances and provide guidance on the matters that normally provides an allowance being provided for under an award. But in any event, our submission remains that accident make up pay not extend to pre reform clause, although it is subject to some debate.

PN71

The inclusion would result in additional labour costs to employers, once again they would be contrary to the principles of award modernisation. But I wanted to make a further point that we think that as a principle the level of entitlements provided to employees to workers compensation are governed by the Accident Compensation Legislation jurisdiction, it being a matter for that legislation to consider the appropriate level of benefit set down for those purposes or those injury management systems. I would now like to briefly to the award flexibility provisions which is addressed chapter 15 of the ACTU submission. Once again I'm not surprised the ACTU by supporting the view they express in paragraph 2.15 that the inclusion of a number of different mechanisms with different procedures for introducing flexibilities is likely to cause confusion and inconsistencies, we want to know which procedure to follow in order to bring on the new arrangement or whether the award will be breached.

PN72

Our conclusion on that is a bit different to the ACTUs. While we acknowledge that this is something you would need to have further discussions with industry parties ultimately because there are structures in the modern awards and in the underlying instruments in relation to facilitation, we submit that the majority of provisions would be subject to further examination. Clearly they can simplify, modify any system or decision, we need to actually have the award flexibility clause, particularly if there are any - if there is scope to remedy clauses that have been effectively done.

PN73

I now just want to deal with the issue of superannuation which I understand will be discussed by various parties today some issues raised by the various parties in their submissions. In my submission I wanted to primarily addressing on default funds. Once again we're in somewhat agreement with the ACTU in their submission with, as I understand, rival support default funds being included in the modern awards from all the existing instruments that underpin those awards including NAPSAs. We would also agree with that happening. Primarily it's our submissions that measures included in modern awards that ensure that employers will not be forced to undergo any switching from their existing default funds.

PN74

In some of the clauses in the penalty award exposure such as hospitality for them to achieve that goal. It's our submission, and I know it's a little bit problematic that we guide superannuation in relation to these matters, but given that that is what the Act allows for, we would urge the Commission to adopt a form of course that does not disturb existing arrangements that are in place.

PN75

JUSTICE GIUDICE: I suspect that the ACTU submission might go a little bit further and suggests that, I think this is right but I'll be corrected if it's not, that the existing default funds might continue to be available for new employees.

PN76

MR HARRIS: Yes.

PN77

JUSTICE GIUDICE: So it's not just a question of existing contributions to being continued.

PN78

MR HARRIS: Yes, thank you, your Honour. I didn't mean to characterise the submission - - -

PN79

JUSTICE GIUDICE: No, that's all right. But do you have a view about that broader suggestion? I think in 269 there's a suggestion that there should be schedules which set out all of the existing default funds by reference to the area in which they've been available in the past. It might be something you can come back to if you want to.

PN80

MR HARRIS: Yes. Now, primarily our submission is, your Honour, some ongoing - some provision that allowed an ongoing capacity for employees in some circumstances to select the default fund would be our primary position but in the alternative provisions that had the effect and by having that effect of not requiring switching in relation to default funds would be what we were seeking.

PN81

JUSTICE GIUDICE: Yes.

PN82

MR HARRIS: I just want to now briefly to address the issue of annual leave, the cashing out of annual leave proposed by the ACTU at paragraph 70 I can agree that the underlying legal - the regulation of this issue, if I put it that way, is not clear at this stage but it is contemplated that it will have these common provisions. Contrary to what the ACTU say, it's our submission that it's probably better to have some award regulation for these practices than to not have it. It would only be facilitated and provide a framework that would address the process where the employee requested cashing out to take place. We don't accept the ACTUs view that fewer employers or employees are at the end of this matter, it's our submission that based on the feedback we've received that on the Request the employers received and of course there is some existing capacity under the Act as it is now.

PN83

It would therefore be thought if there was some award regulation that would address the matter to provide guidance to the parties about how that would occur and the appropriate safeguards or whatever it might be in some respects. The next issue I wanted to raise in our submission was casual conversion which is page 73 of the submissions. The Commission seems to say that there's no express exclusion provided in Part 10A of the Act. Once again I'm going to provide the same point that it's not extant award content and no test case decision supporting it's inclusion in particular awards and is a provision that carries with it potential costs for industry and operation in some areas.

PN84

Once again I understand that the submissions of industry parties will address you in more detail on that matter. Similar to our submissions relating to redundancy, casual emergent clauses are to be included in awards, it is our submission that consideration including award areas where such clauses may previously have had some operation. The final thing I just wanted to address the Commission on was the National Training Wage Award, just merely to say that we confirm that we've have some initial discussions with the ACTU on that matter. There's a long history of that award or that area being dealt with cooperatively, a meeting has been arranged very shortly to consider some proposals that we've addressed the National Training Wage Award and the issue of training and we are confident that we will have something to provide to the Full Bench by way of a brief proposal.

PN85

JUSTICE GIUDICE: Thanks, Mr Harris.

PN86

MR HARRIS: They're my submissions, thank you.

PN87

JUSTICE GIUDICE: Thank you. Yes, Mr Mead.

PN88

MR MEAD: Thank you, your Honour. Members of the Bench, in our introductory comments made in submissions prior to these proceedings AI Group identify this process of award modernisation for the 14 priority listed occupations. This presented substantial challenges for not only the Commission but also professional industry parties that have involved themselves in this process. These challenges have been occasioned by a range of factors including the new timeframes, the rationalisation in some instances of large numbers of awards and NAPSAs, the balancing of seemingly competing legislative objectives and also considerations of some issues within a legislative vacuum as a result of the substantive legislation being available.

PN89

Against this backdrop AI Group commends the Commission on what has been achieved to date and for its part welcomes the opportunity for providing this forum to further express its views in relation to matters of principle and detail that affect the creation of modern awards. Including the most recent submissions of 10 October that AI Group provided to the Commission we have submitted six written submissions pertaining to award modernisation. In addition we would appear before to this Commission to advance further oral submissions in proceedings that have been heard in May and August this year. We continue to seek to rely on all of those submissions previously advanced, however not for today's purposes seek to rearticulate any proposition previously advanced. That being said, the Commission has allocated today's proceedings for the purpose of ventilating issues of a general nature that relate to the award modernisation process.

PN90

Such an opportunity has not been available to the parties since proceedings in May of this year where general issues in relation to the identification of priority industries, the timetable for completion of priority industries and in terms of the award flexibility clause were argued. In such a context there are a range of issues that must be canvassed. On occasion this may require repetition of the arguments already advanced at earlier stages of the process and will attempt to keep any such repetition brief. Additionally a number of the parties have provided submissions related to general issues in the most recent round of submissions.

PN91

In responding to some of these assertions it may necessary for us to rearticulate propositions advanced in our written submissions so as to provide a context to the critique or the views advanced by others. Once again in such circumstances we will attempt to keep that repetition to a minimum also. AI Group also notes this most recent round of submissions has for the first time in this process elicited submissions from the Commonwealth. On our AI Group's reading of these submissions a number of critical propositions are advanced. We intend to canvass these issues in some detail and in particular we note that in our assessment there are two discrete types of submissions within the Commonwealth's written materials.

PN92

These two type of contentions we say are first contentions of an explanatory nature and in respect of the explanatory contentions we say that they are advanced both in relation to the explanation of intent that underlies such matters to the Act in a Modernisation Request but also an explanation of what may be on the horizon in the context of substantive legislation. The other major contentions that are advanced in the Commonwealth's submissions we say are expressions of the preferred outcome and as we will be revealed further in these submissions we intend to make today, the distinction between these two discrete propositions we say are relevant and go to the amount of weight which you give to the Commonwealth's submissions in these proceedings.

PN93

In the Commission's statement of 12 September 2008 19 general issues are identified by the Commission as matters of relevance across all of the exposed drafts. In relation to today's proceedings we would seek to advance further arguments in relation to 12 of those matters, namely application, rules for avoiding overlap, award flexibility, dispute resolution, casual employment, redundancy in particular as it applies to small businesses, annualised wage and salary arrangements, allowances, annual leave, accident pay and transitional provisions.

PN94

Additionally there is another matter, a point to be made by AI Group through the submissions of the CFMEU relating to accrediting of personal leave, which we also seek to address at some point through today's submissions. In turning firstly then to the issue of application, it is AI Group's view that we need objectives for award modernisation and include the creation of a certain stable model award system. The approach to be adopted in the drafting of the application provision for modern awards is one that is difficult to be achieved with such an objective. Within our written submission of 10 October we have generally endorsed the approach adopted by the Commission in relation to the drafting of the application provisions for the exposed drafts. Such endorsement, however, was qualified by a number of exceptions and areas where we believe there to be further value in the Commission adopting consideration of a more general application provision than is already adopted in relation to some of the exposure drafts.

PN95

A matter that falls into this latter category is in relation to the proposition we have advanced relating to whether our application falls for a modern award it is phrased both positively and negatively, is appropriate for general consideration in all modern awards. Within the exposed drafts for the mining industry, the coal mining industry, hospitality industry, rail industry and security industry, the Commission has elected, in defining industry to which the award applies, to also include a clause clarifying what areas it doesn't apply to. This negative subclause is usually prefaced with the statement "to avoid doubt. Now, we would contend that that is precisely what it does, by providing greater clarity and certainty over coverage of a specific modern award.

PN96

Paragraph 9 of the modernisation request requires that the Commission is to have regard to the desirability of avoiding overlap of awards. Where there is any overlap or potential overlap in the coverage of modern awards the Commission will as far as practicable include clear rules that identify which award applies. We would submit that an application clause that is framed positively for describing who a modern award applies to, combined with a provision that also equates negatively, clearly minimises the amount of potential overlap between modern awards and therefore accords with this aspect of the modernisation request.

PN97

We also note that this is a principle that is supported by ACCI in its submissions at paragraphs 41 through 51, and their support for this proposition is advanced by similar reasons which we advance. Now, whilst such a provision may not be necessary for each modern award, we would contend the Commission should be open to it's inclusion. Indeed, given the possibility for revision that has been foreshadowed in relation to the scope provisions for modern awards settled at earlier stages in this process as subsequent stages evolve. It may be a case that where a modern award considered either in priority industry or the second stage did not on it's face need such a negative proposition within a scope clause. But as subsequent modern awards are created a utility for such a provision is revealed. In such circumstances we contend that it should be open for the Commission to include such a clause clarifying the operation of a modern award.

PN98

Now, one such area where we submit that such a clause would be of obvious value, even at this early stage, is in relation to the Manufacturing and Associated Industries and Occupations Award. Within our written submissions at paragraph 31 through 37, and in the section specifically relating to this exposure draft, we identified a range of issues that we say affect the manner in which the scope clause for this award is being drafted. I will elaborate on these issues further in relation to consultation specifically directed at that award, but in essence one of our primary concerns relates to the residual character given not only to the occupational aspects of the award but also the industry aspects of the award so that it could be overridden whenever there is overlap with another modern award.

PN99

However, surmising, in the drafting of this, was the Full Bench had in mind the occupational character of the modern Manufacturing Award, and was focusing on maintenance people, drafts people, engine drivers and the like, employed in other industries, and whether or not awards as such does currently include or should include classifications to cover these, these types of employees. The way in which the application clause, however, in the exposed draft is drafted goes far beyond addressing that issue. AI Group and the union parties to the federal Metal Industry Award have revised the wording of clause 4 application as set out in annexure A to our submissions. The important part of this re-draft is the inclusion of exemptions to the award reflected at clause 4.5 of our re-draft. We would submit that this is an illustrative example of the benefits of including such exclusion provisions within modern awards as the alternative would be to substantially and unnecessarily disrupt the traditional industrial arrangements that may apply.

PN100

JUSTICE GIUDICE: Mr Mead, this is pretty much a re-statement of your submission, is it not? I'm not stopping you, but in order to maximise the opportunity to deal with what other parties might have put you might be better advised to deal with other parties' submissions and suggestions. I mean, we have read the material you have filed.

PN101

MR MEAD: Yes, your Honour. Well, perhaps then I will move to the issue of application and parties bound as it effects registered organisations. In that regard we say that there are submissions advanced by the Commonwealth that do provide support for some of the contentions that we have advanced in our written submissions. The principles that underpin our contention in relation to - - -

PN102

VICE PRESIDENT LAWLER: Which category do they fall into, explanatory or preferred?

PN103

MR MEAD: We would say that they fall into the category of explanatory.

PN104

VICE PRESIDENT LAWLER: Thank you.

PN105

MR MEAD: And insofar as why they fall into that category, we see that the submissions that the Commonwealth have advanced in relation to coverage of modern awards and coverage as it affects registered organisations seeks to impart some information to the parties and the Commission in relation to the manner in which the substantive legislation will ultimately deal with that issue.

PN106

JUSTICE GIUDICE: Usually when the Commission is required to consider the meaning that should be given to an award or a piece of legislation, one looks to the objective indications of intention. On one view of it, the submission from the Minister is explanatory of a subjective intention as to what the terms of the Request meant. That seems to involve a slightly different approach to interpretation of instruments than the one we would normally apply. I am not really asking for a response, unless you want to give one, but it is an unusual situation I think.

PN107

MR MEAD: Indeed it is, your Honour, and perhaps if I just reply in this vein. The award modernisation process as is conceived by the Act and also the Modernisation Request we would say is not traditional or common like it deals with some of these issues.

PN108

JUSTICE GIUDICE: Yes, I think there will be general agreement about that.

PN109

MR MEAD: Perhaps a more non-conventional then reading of the submissions of the Commonwealth is appropriate in that area.

PN110

JUSTICE GIUDICE: Yes, I see, yes.

PN111

MR MEAD: Your Honour, just in turning then to our submission on the issue of the appropriate application of modern awards for registered organisations, it is necessary with some brevity just to deal with some of the contentions that we advance in our written submissions and how they are further informed by the Commonwealth submissions. Essentially what we said in our written submissions was that there are a number of entitlements under the current formulation of the Act that hung off the idea of a registered organisation that responded to a modern award. These matters included right entry, to hold discussions with employees, right of entry to investigate breaches and the like.

PN112

We were forced to concede in our written submissions that whilst we assumed those matters would be dealt with in a similar fashion under the substantive legislation we were in no way assured of that outcome. What we can say in that regard now we believe on the basis of the Commonwealth submissions is that they have provided some surety in relation to how such propositions are willing to act with award coverage to modern awards.

PN113

JUSTICE GIUDICE: It would be nice to think that were the case, but isn't this ultimately a question for Parliament? I am not trying to be obstructive, but I am pointing to what seems to me to be a practical problem when a government states it's legislative program, which must necessarily be subject to the Parliament. I suspect it's a problem we have all got but we can't simply rely on what the Commonwealth says it intends to do, can we, or can we?

PN114

MR MEAD: Undoubtedly, your Honour those ..... We would say though that in the context of these proceedings some substantial weight can be given to the Commonwealth submission in that regard. Our alternate submission, and one that we did advance within our written submissions, was that even if those propositions about representation don't hang off coverage of a registered organisation to a modern award, the objects of award modernisation or the Act are not offended by including representation rights to registered organisations, but we actually identified that there are some instances where we believe they are enhanced.

PN115

So our primary submission is that the Commonwealth's written submissions should be given some substantial weight, however if, based on your Honour's comments, the Bench was to determine that these are ultimately matters that are for legislation and not something that needs to be considered purely on the weight of the Commonwealth's submissions, we would advance our secondary proposition that there is nothing that offends the objects of the Act in relation to binding registered organisations, and on that basis such representation should be reflected.

PN116

JUSTICE GIUDICE: Yes Well, I take it that from your perspective, or AIG's perspective, it would be acceptable for the Commission to act on the basis of the indications from the Minister about the legislation with the possibility that in any event before 1 January 2010, if necessary, changes could be made which reflected any differences in the legislation as it actually emerges.

PN117

MR MEAD: Absolutely, your Honour, and indeed that is perhaps a proposition that affects a number of aspects of this process. I think most relevantly perhaps dispute resolution would be one other aspect where the Commonwealth has advanced a view, AI Group for its part, supports that view advanced by the Commonwealth, but if ultimately in the wash up the substantive legislation puts something different in it's terms then subsequently it will flow forward.

PN118

JUSTICE GIUDICE: Yes, thank you.

PN119

MR MEAD: Your Honour, just dealing briefly with the issue of maintenance trade classifications. And I appreciate that this is a matter that we have dealt with in some detail in our written submissions also, specifically the notion that maintenance trade classifications that are expressed in the federal Metal Industry Award as it currently stands needs somewhat to be flowing in all circumstances to industry awards more broadly. As is clear from our written submissions we oppose such a course of action, and we rely on a range of principles in relation to not disadvantaging employees, development skills, national and international competitiveness, matters that we say are finished off, what we have detailed for the Commission in our annexure A, the statement of Mr David Tiller, which identifies the range of conditions that would need to be included in an industry award including such classifications.

PN120

The Commonwealth's submissions in this regard we say also support the approach that we have outlined in annexure A, because at paragraph 7 in their submissions they state that:


Where the Commission is to include the same occupation in more than one industrial is desirable so far as practical with the terms and conditions of that occupation are different across the industry awards.

PN121

We would say that this supports contentions that we have made already in our submissions in relation to those conditions which would need to be reflected. We also note the ACTU and AMWU in their submissions at paragraphs 124 and 26 respectively identify a similar range of matters that we have identified at attachment 1. We say that on the basis of the support of the ACTU, the Commonwealth and the AMWU, as we understand it, that there is no substantial basis for including such provisions within industry awards as a general proposition.

PN122

The issue of award flexibility is one that I just want to deal with briefly now if I may, your Honour, because there is material within the ACTUs submissions that we respectfully take issue with it. And the Commission will note that in relation to our written submissions filed on 10 October we dealt with the issue of award flexibility in a fairly brief matter. The basis upon which our submissions were so brief in that regard is that in our view the Commission, in its decision of 20 June, largely determined the appropriate terms for the award flexibility clause and the scope with which it should operate.

PN123

On that basis we felt that the revised provisions that the Commission had put in, i.e. the insertion based on the understanding of the provision of this award, the commencement of sub-clause 1, it was a matter we endorse and don't require any further detailed analysis of. We do have a concern, however, in relation to the ACTUs submissions, and these are found in section 15, insofar as those submissions seek in our view to re-open issues relating to the scope of the flexibility clause and the matters that it may affect. The ACTU contends there is a lack of clarity in relation to the manner in which the award flexibility clause interacts with facilitative provisions within a modern award. It's our submission respectfully that there is no such confusion.

PN124

The Commission's decision of 20 June made it abundantly clear how the flexibility clause may interact with individual facilitative provisions where they have the same material. And the relevant section that we seek to rely on is section 190 of that decision, where the Bench noted, firstly, in relation to other types of flexibility contained potentially in modern awards, that there was a possibility for other flexibility arrangements that might be in modern awards. They then went on to talk about the type of flexibilities that may be enshrined by the allowable award matters, section 576J, and then said the second type of award term would be an individual flexibility provision in relation to a specific matter which is already contained in the pre-reform award which carries over for a modern award.

PN125

It is our intention that the model clause should not cut across the operation of modern award terms of this type. Now, AI Group's interpretation of this statement is that where an individual facilitative provision covers the same matters as a flexibility arrangement, the process of reaching agreement should be through the facilitative provision, as opposed to utilisation of the flexibility clause. In circumstances where a modern award contains an majority facilitative provision, our understanding of that extract is that individual arrangements may be sought and utilised through the award flexibility provision.

PN126

Now, we would submit that the ACTUs assertion that is advanced at paragraph 259, that the flexibility clause should not be available in any circumstances where there is a facilitative provision in existence, is contrary to that statement within the Commission's 20 June decision. In our view that matter has been considered and determined. This is not to re-open such a lot of argument. Your Honours, if I could turn now just to the issue of dispute resolution. And I appreciate the interaction that we have already had regarding the Commonwealth's submissions on the issue of dispute resolution and whether in fact there is a need for amendment at some subsequent time of any provision that may be included in a modern award once the terms of legislation are expressed.

PN127

We say at this juncture though that what is reflected within the Commonwealth's submissions as a matter of principle is one that should be adopted in the finalisation of the modern awards for the private industries at this stage. We say that what is clear from the Commonwealth's submissions is that consent arbitration will be the only arbitration that is available or is to be intended within the substantive legislation for disputes that arise under modern awards. We say that this is clear from the Commonwealth's submissions.

PN128

Now, this accords with the submissions that AI Group have advanced, and we say that there are particular merits in this approach. We commend the Government, if this is ultimately the matter on which their dispute resolution procedures for modern awards are reflected. We commend the Government for such an approach as we believe it will do all that is possible to ensure that disputes are resolved at the workplace level. There is just one matter that I want to seek to have clarification in relation to, in relation to the Commission's model dispute resolution procedure, and that matter relates to what is identified at subclause 6 of the dispute resolution provisions. Now, sub-clause 6 relevantly provides that:

PN129

While the dispute resolution procedure is being conducted work does continue normally unless the employee had a reasonable concern about imminent risk to his health or safety.

PN130

Now, AI Group understands the use of the term "normally" to accord with the current concepts that are found within dispute clauses of federal awards, namely, that employees will continue to work in accordance with the award and their contract of employment. For examples of this proposition we note that the current federal Metal Industry Award at clause 3.2.3, and also Victorian Clerks Award at 12.1.3 reflect language of an identical nature. Now, AI Group in relation to its re-drafts of the exposed drafts for TCF and Clerks have included language of this ilk. But what we note in relation to a review of the ACTU submissions is that there seems to be an implication that utilisation of the word "normally" within a disputes clause is one that implies a status quo proposition whilst proceedings enter a dispute resolution procedure around the table.

PN131

Now, AI Group opposes such an approach because not only do we believe it goes well beyond the established provisions within federal awards, but furthermore and more practically, in a forum where there is only arbitration by consent it could allow a party, particularly in disputes around introduction of change, to notify a dispute, invoke the status quo and effectively prevent the change from ever being implemented. Such a situation we say is clearly untenable and would allow a party opposing change to achieve their goal merely by notifying a dispute and then refusing by consent to arbitration. We would therefore submit that if subclause 6 is not amended so as to insert the more traditional wording that we have outlined, that the Commission, in it's decision pertaining to the priority awards, should clarify the word "normally" in subclause 6 of the disputes clause, carries no additional restrictions analogous to a status quo obligation.

PN132

The only other matter in relation to dispute resolution that AI Group seek to address is a matter in relation to a dispute resolution framework. And this is a matter that is advanced in the Commonwealth's submissions at paragraph 40, where they express a view that inclusion of dispute resolutions framework provisions are a matter that they support for inclusion within modern awards.

PN133

Now, AI Group respectfully disagrees with this view advanced by the Commonwealth, and submits that even prior to the subject matter becoming by way of Workchoices, it was not a standard provision within federal awards. Awards in the clerical industry, retail industry and food industry being examples that such provision is not found. Therefore we would say that not only are employees not disadvantaged by it's omission, but further, employers' costs clearly increase if it was introduced as a clause of general application. We submit that the notion of what is an existing entitlement, it's an important benchmark, not only in relation to this issue but also in relation to propositions that re-emerge repeatedly in relation to such matters as small business redundancy, casual conversion of annual leave.

PN134

It is a notion that AI Group is continually repeating within it's various submissions but it is also a proposition we say is reflected in the Commonwealth's submissions when explaining in relation to the basis of not an attraction to small business redundancy as a general proposition within modern awards, they state at paragraph 24:

PN135

In balancing the cost to employers and entitlements of employees within the award modernisation process, the Government urges the Commission to as far as possible maintain existing levels of entitlements, not creating new ones.

PN136

We would submit this is the clearest possible articulation of what the government intended by the requirements that are within the Modernisation Request that modern awards not disadvantage employees, nor increase costs for employees. We respectfully submit that this should guide the Commission's determination, the appropriateness of including amongst other things training leave within modern awards. In turning now to the issue of small business redundancy, we would say that whilst the Commonwealth's submissions are highly instructive and capable of providing valuable insight into the approach the Commission should take in relation to a range of matters through extrapolation of the logic that underpins their submission, the entitlements sought as redundancy as a general entitlement within modern awards is a matter that requires no such contemplation.

PN137

The Commonwealth's submissions in our view in this regard are intended to provide clear direction, respectfully, to the Commission as to how the Government intended this matter to be dealt with. We respectfully submit there is unequivocally clear that the approach of including small business redundancy in any modern award exposure draft is not one the Government intended when it drafted the Modernisation Request. This, we say, is clear from paragraph 6 of the Commonwealth's submissions, in paragraph 32 of the request it states,

PN138

The intent underpinning these elements of the Request is that the creation of modern awards should not be seen as otherwise reflecting existing provisions in awards and NAPSAs as opposed to including entitlements which extend beyond those existing provisions.

PN139

We say the use of the word "intent" in paragraph 6 is highly significant, and we respectfully submit that the Commission should have regard to such intent. If one looks at the prevalence of existing entitlements as it is identified within the Commonwealth;s submissions and as it relates to small business redundancy, we would say that on our analysis there are very limited jurisdictions where such a provision is available. Accordingly, it is our strong intention, and one that is identified in our written submissions, that small business redundancy should have no general application within modern awards. In dealing with the issue of existing entitlements - - -

PN140

VICE PRESIDENT LAWLER: Even though it was a test case standard established before WorkChoices was commenced, and the Government would have us believe it's engaged in a program of tearing up WorkChoices, even though it was an established standard and was there for the asking to be included in any federal award?

PN141

MR MEAD: Yes, your Honour. And the reason why we make that contention is we say that the Modernisation Request is quite clear in relation to the issue of supplementing the NES. Supplementing the NES should occur where it is necessary first of all to ensure a fair minimum safety net, but secondly, in relation to assessing that necessity regard should be had to the existing entitlements within pre reform awards and NAPSAs. Now, the construction that we - - -

PN142

VICE PRESIDENT LAWLER: Well, how is it fair for a 20 year employee of a business with 20 employees to have a redundancy entitlement, and a 20 year employee with a business with 12 employees not to have a redundancy entitlement?

PN143

MR MEAD: Well, in respect of the issue of fairness, one of the matters that quite clearly is in the Commonwealth's submissions is the issue that small business numbers can substantially affect and create a substantial cost to employers who have small businesses. That seems to be quite clearly an issue that was squarely in the Government's mind when it considered the appropriateness of having redundancy apply as an NES entitlement to employers who engaged in a business with more than 15 employees. We also say the Modernisation Request, the language that's used quite clearly on a plain reading of it requires that regard is had to what are the existing entitlements as at today's date, not existing entitlements as the ACTU advanced in their submissions of a period pre WorkChoices and post roll-up, but the notion that this entitlement should be given it's ordinary meaning in accordance with the Request.

PN144

Your Honours, just in relation to this notion of existing entitlements before I move off it. There are some matters identified within the CFMEUs written submissions that I also seek to address. And I foreshadowed that the CFMEUs intention in relation to carer and personal leave is a the matter we would seek to advance in relation to those submissions. Now, at clause 2.6 of the CFMEUs submissions, they advance the view, on our reading, that personal leave in modern awards be credited as an upfront entitlement in lieu of the accrual methodology that is reflected in the NES. They say, as I read it, that such a proposition for supplementing the NES, in their view supplementing it appropriately. We would reject such an approach.

PN145

We say that not only is it inconsistent with the accrual method in NES, but it is also inconsistent with the current accrual propositions that exist in the AFPC standard and apply to the vast number of constitutional corporations in relation to the accrual of leave. Reverting back to this notion of existing entitlements, we say that crediting personal leave as an upfront entitlement is not something that is in an existing entitlement and that accordingly in the manner in which the CFMEU has sought a supplementation to this matter, it is not appropriate.

PN146

The issue of accident pay and allowances is a matter that needs to be dealt with, albeit briefly, as well, as it also has some work to do on this notion of existing entitlements. Now, the Commonwealth in it's submissions advanced a view that accident pay was a matter that fell within allowable award matters as identified in 576J(1)(g) insofar as it was an allowance. We don't seek to make a contrary submission, but we would say though that even if the Commission was to find that accident payment is an allowable matter, this did not necessarily and automatically mean eventually include it in modern awards.

PN147

I want to go back to this notion of existing entitlements, that we would say that the touchstone needs to be whether it is an existing entitlement in the pre-existing instruments. Paragraph 76 of the Commonwealth's submissions reflect such a notion, but we say there's an important qualification to paragraph 76 of the Commonwealth's submissions, and that qualification is this; that paragraph 76, whilst referencing the existence of accident pay in a pre-existing modern award or pre-reform or NAPSA as giving rise to whether existing entitlement, we say should not be read so narrowly as support for the proposition that if one single NAPSA or one single pre-reform award where there are a large range of pre-reform awards and NAPSAs that don't have the provision are amalgamated, the existence of one such entitlement is support for the notion that it is an existing entitlement and therefore have application across the board.

PN148

The circumstances that are present in the Manufacturing and Associated Industries and Occupations Award, I would probably say are an example of this notion. The Rubber, Plastic and Cablemaking Industry Award is a current existing federal award that has accident pay and it applies the general provision. The federal Metal Industry Award does not have such a general provision but rather there is a splinter award that applies only in respect of Victorian employers and employees conferring an entitlement to accident pay. Now, on this basis AI Group opposes the inclusion of accident pay as a general proposition to all employees who will be ultimately covered by the Manufacturing and Associated Industries Award. Now, the reason we oppose it is that whilst it is a pre-existing condition in some awards, but a vast majority of awards and employees that are covered by this new modern award, it is not an existing entitlement. And we say that that essentially is the relevant test.

PN149

We contend that a contrary submission cannot be advanced. And the basis upon which we say that is, that if you look at paragraph 22 of the Commonwealth's submissions in relation to terms of redundancy, although they identify that in South Australia there is an entitlement to small businesses, such a general application of that entitlement within that jurisdiction does not in it's submissions generate an existing entitlement general application across the board. And we say that our contentions in relation to accident pay are consistent with this proposition.

PN150

More generally in dealing with the issue of allowances our written submissions identify support for the approach the Commission has adopted in relation to reflecting work related allowances and procedures at the standard rate. We identify also that there may be some further work to do in relation to expense related allowances is that traditionally they increase by a different formulation.. We note that the CFMEU in their submission at paragraph 2.5.4, advance a proposal as to how expense related work allowances may be dealt with. We have no objection to the principles that underlie the CFMEUs proposal in this regard, although for specific industry awards there may need to be some modification, particularly with issues relating to rounding to reflect traditional approaches.

PN151

Your Honours, all I foreshadow to make comments in relation to both annual leave and annualised wage and salary arrangements, given the Bench's previous views relating to summarising our written materials. Essentially we will just seek to rely on our written materials advanced in those regard. A matter that we would we seek to address the Bench on is in relation to transitional arrangements. Now, what are the most relevant transitional provisions, that should be in play? Now, the ACTU in their submissions have advanced a view that transitional provisions may ultimately need to be determined at the stage that the modern award terms are completed. This is a view that is expressed as paragraph 138 of their submissions.

PN152

AI Group for it's part is not opposed to such a concept, even though in our written materials we have advanced particular conceptions of how we believe certain transitional provisions may operate effectively for modern awards. There are a range of general propositions or principles that we say should underline transitional provisions that are evidenced in the examples that we have advanced, insofar as the utilisation of a five year period for transitional arrangements to operate. But we say that, as we have set out in our written submissions, that it is provision that is available for state based differences. There seems to be a logical thing in maintaining a consistency for all transitional arrangements in this regard.

PN153

The ACTU advances somewhat of a contrary contention though in relation to conditions applying to current employees that fall below conditions as reflected in the modern award. They say that those conditions should be increased as soon as possible. We oppose such an approach and we say that the approach that we have advocated for in our written submissions is one that should be preferred. As the ACTUs proposal could have the potential in our view to substantially increase costs in a very short period of time. What needs to be appreciated is that there is an overlap between not only conditions within the modern award that may be below the modern award conditions, but also there is the notion that they advance regarding savings provisions, and a broad savings provision they say should apply to a range of matters, not including just rates of pay but also a broad range of conditions including accrued entitlements, continuing entitlements and general conditions. We say that that is a matter they deal with at paragraph 140 of their submission.

PN154

AI Group's view in relation to the appropriate terms for a saving provision are essentially that we support the provision where it's appropriative that it is in accordance with terms the Commission drafted for the Clerical and Retail Awards. We say that a savings provision that is ..... to rates of pay is a sensible and practical approach, because if a broader savings provision is similar to that which is advocated by the ACTU were to be adopted, it essentially creates a situation where we have at least two, in some cases more, different classes of employees that have differing conditions that will continue into perpetuity. We say that such a situation not only is a recipe for industrial disharmony but one that is not practical and goes beyond the reasons for the function of not disadvantaging as reflected in the Modernisation Request. Now, your Honours, unless there are any questions those are the submissions we would like to make in relation to those general matters.

PN155

JUSTICE GIUDICE: There is one matter, Mr Mead, that is prompted by your recent reference to the ACTU submissions concerning transitional provisions. There does seem to be a suggestion that the transitional provisions might also be applied in relation to NES matters, where the standard in the NES might be less than a standard otherwise applying, for example, in relation to severance pay. Do you have any comment on the suggestion that transitional provisions might apply in relation to NES standards as well as award standards?

PN156

MR MEAD: Your Honour, our primary view in that regard would be that such transitional provisions are not appropriate. Once again, at the risk of repeating submissions that I feel I have re-articulated a number of times, the relevant test we say in relation to the issue of supplementing NES within any modern award is a question of whether it is an existing entitlement and whether it is necessary to have that entitlement reflected within a modern award to ensure a fair safety net. Our view in relation to NES entitlements would be that if it is appropriate having regard to existing entitlements we have in the modern award reflect such terms on a broader application, and such it would be appropriate, but a general savings provision regarding NES entitlements. We also note that the ACTU submissions in that regard seem to relate to primarily the issue of redundancy provisions. We would have concern whether a savings provision is also appropriate for an entitlement that by it's inherent nature is a contingent entitlement, not one that an employee necessarily has access to as an identifiable benefit at this time. We would respectfully submit that that perhaps goes beyond what is contemplated by the notion of disadvantage in employment.

PN157

JUSTICE GIUDICE: Yes, thank you. Mr Warren, are you next?

PN158

MR WARREN: Yes, thank you your Honour. As indicated earlier, we have seven summary points to make. Firstly, we note that this award modernisation process came out of the Ministerial Request given under section 576C(1) of the Act. We particularly note and emphasise that paragraph 2(d) of that Request stated the intention that in making modern awards it was not the intention to increase costs to employers. It is a fundamental tenet of the AFEI position that in this general submission and indeed in the individual submissions made by AFEI already filed with respect to various draft awards, that award modernisation should not lead to an unintended or otherwise cost increase. And indeed those concerns with respect to costs increases are dealt with in detail in the individual award matters.

PN159

Can I just merely emphasise in two particular areas the concerns on costs. And this is not an exhaustive concern but a highlighting of the concern of the costs flow implications. When one looks at penalty rates on weekends and the standard that has been established in New South Wales over long, many years of a long history of arbitrated test cases, and ultimately by agreement between the parties in later agreements. It is not and it should not be in this award modernisation process a casting aside of those long held industrial standards with respect to weekend penalty rates for example. An award modernisation should not lead to such an event occurring.

PN160

Similarly with night work penalties where, indeed, in some awards of this very Commission night work in the entertainment area, in racing for example, award rates have long contained a provision knowing that there would be night work conducted, knowing that the very industries themselves work at night time and the award rate is thus must be considered to be loaded. To now introduce an additional penalty on top of those award loaded rates without de-loading those rates first would be, we say, an unnecessary and an unreasonable cost impact upon employers in those industries. Indeed, in terms of the current draft awards that is of major concern to employers.

PN161

So we say in summary on that point, it is clear that the intention was not that there be increasing costs to employers arising out of award modernisation. Award modernisation should not be used as a means of award simplification for the sake of simplification which will lead to unintended or intended - depending from which end of the bar table you are coming from - cost increases to employers. Secondly, award modernisation is now being considered against a background of significant economic upheaval. It cannot be ignored. The consequences of what this Commission will do with respect to the cost impacts and the economics of an employer in 2008 and going into 2009, understanding of course that these are meant to take effect from 2010, are clearly the Commission should proceed with extreme caution when considering the dynamic and unfortunate economic circumstances playing out on the world stage.

PN162

Thirdly, with respect to representation and rights. And I note the discussion that has already occurred between the Commission and the bar table with respect to that. In the making of awards under this new national system, one must recognise that it is not the old federal system, it's not the old state system, it's a brand new national system and nothing the Commission should do - and acknowledging that this no doubt will be dealt with in a legislative sense later this year - but nothing the Commission should do in this award modernisation process should in any way prejudice any party who in the past may have been individually represented by an employer or indeed represented by a state organisation or indeed a federal organisation.

PN163

Nothing should be done in this process which would in any way prejudice the representational rights of employers generally and employers who have come before this Commission and other Commissions in the past representing their broad range of members or indeed even individual employees. It no doubt will be dealt with by statute later on, but we merely caution a concern that my client has with respect to anything that this Commission may do here that might act in an exclusionary way prior to legislative intent being clearly expressed.

PN164

Fourthly, transitional arrangements. Clearly transitional arrangements are just that and should not be considered as a panacea to any increases in costs to the future. Increases in costs that occur to employers can only be met or dealt with by an increase in productivity, and increases in costs whether they be over a two year period, a 12 month period or a five year period is still a significant increase, is still, we say, unacceptable if not met with appropriate productivity increases. And merely saying that by phasing in an arrangement which will lead to an employer increasing costs does not solve the problem, and transitional arrangements should not be seen, as I have said before, as a panacea to any increases.

PN165

Fifthly, we say that clearly the Commission is charged with setting fair minimum safety net awards, and awards set under this fair minimum should be just that. Those awards need to be fair minimum in both economically good times and economically bad times. The fair minimum ought not be set taking into account purely good economic conditions and must be sustainable at times when the economy turns in the opposite direction. There has been some discussions in respect to superannuation. The draft clause on superannuation includes payment of superannuation during a period, for example, of workers compensation payments which is not currently required under the superannuation guarantee legislation.

PN166

Apart from the clear significant increase in costs to employers, that to grant superannuation payments during that time would lead, it will also lead at times to double counting. You will have employees absent on approved leave to be in workers compensation, annual leave, long service leave et cetera, and if the draft clause sits as it currently sits on our reading of it, superannuation payments will be required to be made upon workers compensation payments which the employee will be in receipt of, as well as approved leave payments. But in any event there should be no change to the current superannuation deduction as found under the Superannuation Guarantee Act, and therefore it should not include payments for workers compensation.

PN167

Finally, small business and the effect of the redundancy clause. We note, of course, the comments of your Honour Vice President Lawler in questioning the AIG with respect to small business and the redundancy clause. Can we say this; firstly redundancy, when it occurs, occurs at a time when small business is least able to afford such an opportunity to make payments. But most importantly the Commission cannot, with respect, consider some test cases and ignore other test cases. It cannot accept some payments as being properly derived and not accept others as being properly derived.

PN168

In the very example I gave earlier with respect to payments for employees working at night time, when the current award made by this Commission includes rates, must include rates that recognise the late night work of those employees. The Commission cannot then in the same voice say to employers, “Ah but we have a test case on redundancy pay therefore we’ll apply that but we won’t apply something else”.

PN169

This is particularly so when one looks at the need in the charge that has been given by the Minister with respect to these very proceedings. There should be no additional burden on employers as a result. We accept that is a very difficult task that all the parties have to meet. Clearly there are balancing issues but it is not, with respect, a response that employers should need to meet; to say “Well in the past certain things occurred therefore it should continue to occur in future”.

PN170

One has to look at the current circumstances, the current economic circumstances, and the situations that a long history of award making - particularly in New South Wales where there has been a long history of award making by the Industrial Relations Commission of New South Wales, which indeed has been, prior to the new legislation, before the WorkChoices legislation, covering some 20-odd per cent of employers under state awards in Australia. So unless I can be of any further assistance, those are the submissions.

PN171

JUSTICE GIUDICE: Mr Warren, thank you. Ms Bissett.

PN172

MS BISSETT: If the Commission pleases. The ACTU relies on our submissions filed on 10 October with respect to those matters before the Commission today. We also rely on four earlier submissions referenced at paragraph 2 of our October submission. The submissions that we make today are in addition to that material already filed. The ACTU today in our submission, our written material, has sought to deal with the matters before the Bench at the level of principle. Our affiliates will make a range of submissions that go to particulars of specific awards in which they have an interest. They will also respond appropriately to across-the-board issues as they see them.

PN173

The overall approach of the ACTU today is founded on firstly, recognition of the difficulty faced by the Commission in attempting to make modern awards operative from 1 January 2010, without knowing the underlying legislation that will govern those awards. In particular the ACTU is mindful that the Commission is being asked to formally make awards in December of this year, 12 months in advance of their operative date, without any idea as to the content of legislation. This problem is also faced by unions and employers in putting submissions before the Commission, and we may well discover that we’ve spent quite a deal of valuable time dealing with matters that become totally inconsequential once the legislation is known.

PN174

I will in time address the submission of the Australian Government and where that does, albeit in a very limited way, take us. Suffice it to say that while the Government’s submission casts light on the intent of the Government, it does not provide any legislative underpinning that would benefit the parties or the Commission in carrying out their task today. That said, some of our submissions are prefaced on the basis that the Australian Government’s submission will be reflected in legislation.

PN175

Second, our approach is based on the objects of modernisation, the requirements of the Commission in undertaking that modernisation and the intent of award modernisation, including the contents of the Request made by the Minister. Third, our submission is very much founded on the fact that Part 10A of the Workplace Relations Act is the only basis on which we can proceed. We know that Part 10A governs the modern award system and it’s all we have. Pre-reform awards, subject to Part 10, are not modern awards and hence Part 10 has very little to do in the award modernisation process.

PN176

Today the ACTU wishes to take the Commission to a number of matters subject to inclusion in modern awards and to respond to those issues raised in submissions by the parties. As mentioned earlier, what we say today will supplement, and we’ll try not to replicate what we have said in our written material.

PN177

With respect to, if I can call it the shape of modern awards, the ACTU is concerned that the process of developing modern awards for the priority industries is not mistakenly perceived as a process of creating modern awards that must all look the same and be worded the same. As we suggest in our written material, modernisation should not be about monochrome outcomes. In making modern awards 100 years of industrial history can’t be ignored. The development of awards to meet the needs of particular industries has been a real and functioning part of our industrial relations system to date. Modern awards can and must reflect the history of regulation within our industries, and they must now of course reflect the needs of the new broader industries that they cover.

PN178

The ACTU therefore rejects the quote that the ACCI would have you adopt. ACCI, at paragraph 10 of their 10 October material, argue that the Commission should develop standard clauses and that these clauses should be applied to each modern industry, unless there’s a very good reason not to. This is their rebuttal of presumption approach, and in some cases they actually propose that a more severe test than the general tests they asked for a variation from the standard clauses should be applied.

PN179

In particular I refer the Commission to ACCI’s submission at paragraph 56 with respect to the flexibility clause in the proposed Modern Clothing Award. If it had been the intent of the Government to have standard clauses in every award then surely they would have made this clear. In fact we would hardly need awards at all and perhaps this is the not so subtle path that ACCI tries to take us down.

PN180

The National Employment Standards establish the basis entitlement of employees. These are one group of standards from which an array of conditions and awards will develop. The NES is supplemented to meet the specific needs of industry. We submit that in addition to the NES, the appropriate place to start in developing the terms of modern awards is the existing terms and conditions within the industry, as reflected in awards and NAPSAs. This approach recognises the legitimate history of awards within industries and within occupations.

PN181

We say start with the existing award standards and develop the new modern awards from there, while ACCI say develop standard clauses and apply those to everyone. Our approach has the advantage of being fair, in our submission, unlike that proposed by ACCI which involves the development of model clauses that benefit employers, such as cashing out of annual leave and annualisation of salaries; and reject the general entitlements which we propose to benefit employees.

PN182

The ACCI approach will deliver a bland one size fits all outcome that will not meet the needs of particular industries, and in our submission it should be rejected. Again, we say that if this had been the intent of the Parliament and the intent of Government, then it would have been reflected in the Request and other material that has been made available with respect to modernisation. That’s not to say that the ACTU doesn’t support the development of awards that are easy to apply and simple to understand, but we say there must also be a fair safety net.

PN183

We have submitted in our written material that the Commission should recognise industry differences, both within a modern award and between modern awards. This in our submission ensures that an adequate safety net is developed which takes into account the particular needs of employers and the employees in different industries and occupations. What is an appropriate standard in one industry will not necessary constitute a fair safety net in another, and hence it’s critical that industry differences are recognised in relation to the content of awards.

PN184

ACCI, at paragraphs 254(c) and 265 of their 10 October submission argue that modern awards should contain all available flexibility allowed under the National Employment Standards, even where these flexibilities make no sense in a particular industry setting. The logical corollary of that proposition is that employee protection should be included in each and every modern award, regardless of whether or not they’re appropriate to the needs of those particular industries. I don’t think that that is what ACCI are suggesting but it’s the only conclusion that can be drawn from the proposition they put forward.

PN185

An approach that requires the same outcomes in every award, as I’ve said, is neither simple nor fair. Flexibilities, like protections, could be included where they’re appropriate to the needs of particular industries. The recognition of differences between industries can and should be reflected in modern awards and in part will be through supplementation of the National Employment Standards.

PN186

Supplementation of the NES is critical, in our submission, if the employees are not to be disadvantaged. Our submission, at paragraphs 151 to 156, has raised the question of consistency in supplementing the National Employment Standards. This is not an argument of consistency and outcomes of supplementation, but rather consistency of approach to the question of supplementation.

PN187

Industry differences should be reflected in supplementation of the NES as required within each of those industries. At paragraph 155 of our submission we outline a number of circumstances where the draft awards actually failed to adequately supplement the National Employment Standards, to reflect existing industry standards; and affiliates will raise further matters associated with this in their submissions.

PN188

There is one critical area where industry differences and the potential supplementation of the NES comes starkly into play and that’s with respect to small business redundancy. The ACTU made submissions to the effect that awards could retain redundancy pay for small business in our material filed on 1 August 2008, and again in our most recent submissions on 10 October, and we stand by those submissions.

PN189

We note that the Australian Government in their submission seek to limit access to redundancy pay by employees of small business to those awards and NAPSAs in which it is currently contained. They have provided some costings and have proposed that the retention of small business redundancy would cost some $94.9 million in 2014 in the small business sector.

PN190

These costings are based on data taken from the ABS Labour Mobility Survey 2006, of estimates of the number of employees who have ceased a job involuntarily, including through dismissal in the 12 months to February. Of the Government costings, we say that they are unreliable and of no value to a consideration of this particular matter for a number of reasons.

PN191

Firstly, they fail to discount their figures for the number of small businesses who are unincorporated; and approximately 60 per cent of small businesses are unincorporated but there’s no consideration of that in their costings. They fail to discount their figures for the number of employees who are dismissed and hence not eligible for redundancy pay.

PN192

They have a figure of $94.9 million but place it in no context. Compared to my salary it looks pretty high; compared to what has happened to the world financial markets in the last three weeks, it’s probably not very much at all. But those extremes tell us nothing about what $94.9 million means in a small business context. They have failed to provide any analysis of the cost to employees of being made redundant.

PN193

Quite importantly, though, what the Australian Government failed to do, the Commonwealth failed to do, is to identify any barrier to the inclusion of small business redundancy in modern awards. The work of the Government, we say, in this particular area is not of a particularly high standard and should be given little weight.

PN194

The ACTU stands by our submissions on this particular matter. There is little or nothing to suggest that the data has changed or the circumstances of small business have changed since the 2004 redundancy case, such that the small business redundancy provisions should not be applied. The views of the Commission in the redundancy case, at paragraphs 272 and 274, remain valid.

PN195

I note in passing that the Australian Government suggests that their approach to redundancy for small business is consistent with their approach to unfair dismissal for small business. My understanding is that they wish to exclude redundancy pay for small business, but it’s the intent of the Government to actually bring unfair dismissal into play for employees of small business. The consistency in their approach is a bit lost on the ACTU.

PN196

Should, however, the Commission decide that small business redundancy shouldn’t generally be included in modern awards, there does remain the critical issue of those industries that have small business redundancy standards in federal awards prior to the redundancy case of 2004. The ACTU identifies those awards at paragraph 158 of our submissions. In identifying those awards at paragraph 158 I’m not suggesting that that’s an exhaustive list of awards that have small business redundancy prior to the 2004 test case. But it’s what we could come to at this particular point in time.

PN197

These redundancy provisions were inserted into awards by the Commission on the basis of specific industry requirements and needs, following the 1984 TCR case; and in considering all the relevant circumstances the Commission made a positive decision to provide redundancy entitlements to employees of small business in those industries. We should not have to re-run those cases. They have been run and they have been determined.

PN198

Small business redundancy provisions at least must be included in modern awards, must be included in relevant awards for workers in those industries, not as a savings clause but as an ongoing entitlements for workers within the industries. There is no justifiable reason, in our submission, to remove those entitlements and it’s imperative to the retention of the fair safety net that it be retained. We note that the Australian Government does support that quote at paragraph 20 of their submission.

PN199

Small business redundancy entitlements also operate in some state jurisdictions and we submit that these can be retained as supplementation to the NES, even if the Commission does accept the general submission of the Government and the employers, that small business redundancy generally should not be in awards. In justifying their position, the Australian Government suggests at paragraph 6 that the intent of paragraph 32 of the Request of the Minister is that modern awards should reflect existing provisions for redundancy entitlements in awards and NAPSAs, as they exist today, as opposed to entitlements which extend beyond those particular existing provisions.

PN200

In doing so, the Government don’t address the question of the operation of section 576T of the Act, but perhaps it submits that 576 of the Act is not a relevant consideration at this particular time in those circumstances. On this basis we would submit that all existing NAPSA redundancy standards on small business and the superior benefits that are provided should be reflected in modern awards. Should this not be the case, we would argue that carrying small business redundancy in federal awards requires the retention of the state-based small business redundancy provisions, where it has been established as a standard.

PN201

In addition, as detailed in our submission of 10 October, there are transitional provisions that are relevant for the state-based redundancy entitlements. In particular the superior benefits that are available under some of the state-based provisions. With respect to parties bound, the question of parties bound and whether they need to be and exactly who should be, has been the subject of a number of submissions to the Commission, and the ACTU has addressed a number of the matters raised by the Commission in its 12 September statement in our 10 October submission.

PN202

The ACTU’s position has been unwavering from our very first submission, and that is that for over a century unions have played an absolutely crucial role in establishing and maintaining terms and conditions of employment for employees, through their engagement in the award system; and that this engagement is not something that should be lightly cast aside. Our submission is that unions with a legitimate interest in the modern award, by virtue of their interest in the preceding award or NAPSA, should have the right to be bound by the modern award. Of course we accept that for unions to be bound by the modern award they will have to meet whatever the requirements, as specified in the Act, for organisations to actually be bound.

PN203

We have used, though, in our submissions the term unions with an interest in awards or NAPSAs deliberately. State jurisdictions have had a variety of approaches to the naming of parties to their awards. Unions are not universally named or bound to awards in state jurisdictions and hence the NAPSAs. This does not mean that they don’t have a legitimate interest in those particular NAPSAs, or that they haven’t represented their members, or been actively involved in the industry in maintaining awards within those industries.

PN204

On that basis we say that that interest that may have come from their engagement in the industry, their engagement with members, their engagement within the awards, should be recognised in terms of them having a legitimate interest in the modern award; and of course subject to the legislative requirements for organisations. We note that on this matter the Australian Industry Group share our views at paragraph 51 onwards of their submission.

PN205

The Australian Government’s submission has a couple of important things to say on this issue. Firstly at paragraph 61 the Government indicates firstly that they’re going to - it’s their intention at least to do away with the term “parties bound” in an award context. Instead the term “covers” will be used, and will indicate that an employer or employee or organisation falls within the scope of the modern award. The term “applies” will then be used to indicate that the award actually regulates rights and obligations.

PN206

The Government’s submission then sets out some of the rights that will accrue to unions in this modern award system. Firstly at paragraph 64 they say that where a union is entitled to represent the industrial interests of employees they’ll have the right to enforce those entitlements. At paragraph 65 they say that where an employee is covered by a modern award and the union has a right to represent the industrial instruments of the employee, the union will have right of entry for the purpose of holding discussions with the employees.

PN207

Then further at paragraph 65 they say that where a union is covered by an award and is entitled to represent the industrial interests of employees, the union will have right of entry for the purpose of investigating a breach of the award. The Government it seems are clearly indicating that it’s their intent, at least in developing the legislation and introducing it into Parliament, that there will be rights that specifically accrue to a union by being covered by a modern award. Right of entry, as everyone would appreciate, is no minor matter. Ensuring the appropriate unions have coverage under an award is important because of their right of entry rights at least beyond the broader issues that we say are of importance.

PN208

Clearly, as I said though, even with the Minister’s information that the Government have provided on this particular matter, unions will still of course be required to meet whatever other requirements are established by the legislation. We recognise that the Commission may not be able to finalise this aspect of modern awards until we know the full form of the union regulations, as well as knowing the full form of what rights will accrue by being covered by an award.

PN209

This is a matter that we believe will have to be revisited once the final form of the legislation is known, both with respect to the regulation of organisations and to the rights that accrue. The mindset, we say however, in approaching the issue, even now should be determining who will be covered by awards in terms of organisations, not whether or not they should be covered by those awards.

PN210

I would now like to turn to the issue of superannuation and the ACTU notes the very high number of submissions that have been made to the Commission, from a vast array of parties, with respect to the superannuation issue. It’s our very strong submission that this is not the time to re-open the superannuation case. Our submission is that the status quo with respect to the organisation of default funds should be retained by the recognition of default funds that currently exist in federal awards and NAPSAs; assuming of course that those funds continue to meet prudential and regulatory requirements for a fund.

PN211

The naming of default funds in awards shouldn’t be confused with where the superannuation funds might be drawing their membership from at any particular time. The operation of the Choice legislation means that anyone anywhere can virtually, depending on agreement regulation, clearly make decisions about where their superannuation moneys should be going.

PN212

This debate is about the naming of default funds and the extent to which those default funds should be named in modern awards. The ACTU’s proposition is the retention of the status quo. The submissions that have come in on superannuation appear to fall into three general groups. There are those who say that the Commission should not be sending default funds in awards, and the employer should be free to choose the default funds for superannuation.

PN213

There are those who are named, in particular if the default funds in NAPSAs today, who seek to be named in default funds without prescription in the modern award. There are those who, like the ACTU, argue that this is not the time to reopen the superannuation issue, but to retain the status quo. Saying that the submissions tend to fall into those three general categories, there are obviously variations on the theme that come through in a variety of submissions.

PN214

Of those who say let the employer decide the default fund, we say that that’s not the appropriate approach for the Commission to take. We believe that there is a critical role for the naming of default funds in awards. Superannuation money is not the employer’s money and it should not be for them to decide which fund they will put the money into. We don’t believe that that is the appropriate approach.

PN215

Of those who are a default fund in a NAPSA today, and seek to be named as a default fund in a modern award, our submission is that the NAPSA default funds could continue to operate and should be named as default funds in the modern award, but only to the extent that they operate today. So if a default fund is named with respect to a geographic area ie. a state or a region, or if it operates only with respect to particular groups of workers or occupations, then we say it should be named as a default fund but with those restrictions on it. In our submission, such an arrangement doesn’t offend section 576T of the Workplace Relations Act, and we address that at paragraph 272 of our submission.

PN216

With respect to dispute settlement procedures, the ACTU has put in our material that there are a number of principles that we believe must underpin an adequate dispute resolution procedure, if the procedure is to be effective in settling disputes. These principles were set out at paragraph 180 of our submission.

PN217

The ACTU does not believe that the dispute resolution procedure set out in the exposure drafts are linked to the principles that we believe need to apply. In developing our principles we were cognisant of the Award Modernisation Request of the Minister at paragraph 11, where the Commission was requested:

PN218

To ensure that each modern award includes a clause that sets out a process or processes to ensure the settlement of disputes in relation to matters arising under the award. The process should also be suitable -

PN219

The Request goes on to say:

PN220

- for matters arising under the National Employment Standards.

PN221

The ACTU notes that the submission of the Government at paragraph 44 onwards on the matter of dispute procedures, the powers that they say will be given or that they intend to give to Fair Work Australia and to the role of the court with respect to industrial disputes. While we note that the Government framework is as it is, this does not make the dispute resolution procedure that may be included in awards under their framework an acceptable dispute resolution procedure for the ACTU.

PN222

We accept and we don’t take issue with the Government’s submissions with respect to the Boilermakers’ case and the separating of powers, however we are concerned that where matters are non-judicial, and where there is some discretion, Fair Work Australia or the Commission or whoever the Commission’s successor might be, should be given the capacity to deal with the matter in dispute to finality, in the interests of a speedy and fair resolution of the matter.

PN223

We appreciate, however, that the legislative framework is not a matter that the Commission can resolve. It’s clearly in the purview of the Parliament as to what ends up in the legislation with respect to dispute resolution procedures. Despite the limitations on what we can and can’t address here because of the lack of knowledge of the legislation, there are two matters that in particular we do believe need to be addressed and can be addressed to the dispute resolution procedure developed by the Commission. The first is the capacity of the Commission to bring the disputed parties together in the process and what we believe is a reasonable requirement placed on the parties to participate in the dispute resolution procedure in good faith.

PN224

The second issue that we believe can be resident in the dispute resolution procedure is the right of an organisation who has the right to represent employees under the award to notify and bring matters in dispute to the Commission, or Fair Work Australia, whoever it maybe. This is, in our submission, a critical component of the dispute settlement procedure in modern awards. We have made substantial submissions with respect to this particular matter, but again it’s one of those issues that we may have to come back and address again, once the form of the legislation is known.

PN225

Can I just say that with respect to a submission that’s made by OneSteel, they suggest that the dispute resolution procedure placed in awards is constrained by section 514(2) of the Workplace Relations Act. We say that section 514 is in Part 10 of the Act and it applies to pre-reform awards and is not a relevant consideration in looking at modern awards. With respect to consultation, the ACTU support the inclusion in modern awards of a consultation force and the clause proposed by the Commission is in our view an adequate clause. If the clause were to be amended in the form proposed by the Australian Industry Group at paragraph 29 of their submissions, the ACTU would suggest that what needs also to be included in awards is a clause similar to the redundancy disputes procedure that was finalised in the 2004 redundancy case, but formulated into a consultative provision.

PN226

The AI Group proposal, in our view, is too limited in its application and doesn’t ensure that matters that will affect employees in the workplace are actually subject to consultation between the employer and their employees. It certainly requires that a process be put in place but doesn’t take, in our submission, that process anywhere.

PN227

The ACCI at paragraph 72 to 86 of their submission argue for the inclusion of the words “if any” after reference to employee representatives in the consultation clause. Thos words are, in our view, redundant and they add nothing to the clause. In fact they detract, in our submission, from the intent of the clause. We believe that the inclusion of those words will just divert attention away from the need to actually undertake the consultation and into a debate about the representation and the right to be represented.

PN228

If any affected employee is a union member then they must have, in our submission, the right to be represented and their representatives consulted in accordance with the clause. If there are no union members then those workers may well retain the right to nominate a representative should they so choose. Comments from the ACCI with respect to levels of union membership, I submit, add nothing to their arguments on this particular matter.

PN229

The question of broad representation rights under the award we say are a related but separate matter that should be addressed in a modern award. Our written submissions at paragraph 197 to 202 deal with the question of representation. We argue that the representation issues are a matter at large, under the award, and the inclusion of representational provisions in awards should not be restricted just to the right to be represented in dispute settlement procedures and consultation.

PN230

We say that there is a need for general representation and that this should be in addition to representation rights that might be specified in the dispute settlement provisions. The repetition, we say, is necessary and will give effect to the capacity for employees to be represented in matters under the award, should they so choose. To not include a general right to representation, in our submission, will result in the increase of disputation over the question of the right to representation, and we believe that a representation clause puts the issue to rest.

PN231

Also associated with the issue of dispute resolution is the question of a dispute resolution training leave provision. Included in a number of the draft modern awards is an entitlement associated with dispute resolution process which we believe should appropriately be reflected in all the modern awards, and that is namely the leave to undertake training in the dispute resolution process.

PN232

In our submission there’s no legislative bar to the inclusion of such leave in modern awards. Section 576J(2)(h) provides that an award may contain matters dealing with leave, leave loading and arrangements for taking leave, and does not limit the leave in any way. There’s nothing in the wording of this particular paragraph of the Act to suggest that this provision is restrictive in any way of leave arrangements, as distinct from the provisions that existed under section 89A(2) of the Workplace Relations Act prior to WorkChoices, which wrote allowable leave matters down into a number of distinct provisions ie. annual leave and leave loading, personal carers leave, bereavement leave, compassionate leave, cultural leave and like forms of leave, and parental leave. Section 576J(2)(h) just talks of leave and doesn’t restrict it.

PN233

We say that it’s in the interests of both employees and employers that employees have access to training that will assist them in participating in dispute resolution proceedings, such that matters in dispute have a much greater chance of being resolved at the workplace level. As the majority of the leave allowability case, at PR QN9399 at 39 said:

PN234

The evidence demonstrated that it’s desirable to provide relevant training for those who may be required to participate in dispute settlement procedures. We are fortified in our view by the submission of the Commonwealth at paragraph 40 and we endorse the submissions of the Commonwealth on that particular point.

PN235

We don’t say that there’s necessarily a single standard clause that should be inserted into awards, but rather that a provision should reflect the specific industry needs.

PN236

There has been suggestion by the employers, by some employers, that the inclusion of dispute resolution training leave will be an additional cost burden to employers. On this we submit that the savings that will accrue to an employer, in having potential disputes resolved effectively and efficiently at the workplace level, offsets any additional cost with respect to the provision of leave.

PN237

I would now like to turn to the question of cashing out of annual leave and personal leave provisions. The National Employment Standards establish standards for annual leave. The condition that the NES allows that a modern award may include provisions going to the cashing out of paid annual leave. The NES does not establish cashing out of paid annual leave as an employment standard, but rather a matter that may be included in awards.

PN238

We would argue therefore that there's no basis to include the cashing out of annual leave in all modern awards as a matter of course. There is nothing to indicate that cashing out of annual leave should be a standard provision requiring union employee. If the intent was the cashing out of leave - if it was the intent that the cashing out of leave was to apply to all employees and all employers in all awards, we submit that the matter would have been included in the NES and not listed as a matter that could have been addressed in awards.

PN239

In our submission cashing out is a matter for bargaining at the enterprise level. The Australian Industry Group, at paragraph 179 of their submission, concedes that cashing out of annual is a matter they say has prevalence in bargaining. I'm not sure how prevalent it is, but we concede that it is a matter that is addressed in bargaining. Bargaining occurs at the enterprise level. This is matter that was bargained at the enterprise level and may be reflected in bargain in agreements at this point in time, but is not in fact that's an industry standard or that's a workforce standard nor that it should be included in each and every modern award.

PN240

ACCI, at paragraph 247 to 248 of their written material, argue that cashing out of annual leave is a flexibility that the NES allows, and that section 36 of the proposed NES is a blueprint for award content on the matter. Section 36 specifies what may be included in modern awards as opposed to what must be included in modern awards. Again we argue that if it had been the intent of the Government that cashing out of annual leave be a standard across the country they would have included it in the NES itself and not listed it as a matter that may be addressed in modern awards.

PN241

Those matters that are allowed but not mandated by the NES for inclusion in awards are no more than that patchwork of matters that we say have relevance, may have relevance in some industries but don't necessarily have relevance in all industries. As such, there are matters that may supplement the NES. As the Australian Government, at paragraph 17 of their submissions, suggest in considering whether to supplement the NES, the consideration should be whether the entitlement considered for inclusion commonly exists within the pre-existing awards and NAPSAs.

PN242

Cashing out of annual leave we say does not commonly exist in award NAPSAs, and that the decision, any decision to include cashing out of annual leave in modern awards must be based on those existing awards, pre-existing awards and NAPSAs. Given a cashing out of annual leave is not a general provision in awards and NAPSAs we say that it should not be a general provision in modern awards.

PN243

With respect to the cashing out of personal leave the matters are very similar, though the AI Group we note make no specific submissions about this matter in their submissions of 10 October. In their submission of 1 August however, at paragraph 84, they argue that the same rationale for cashing out of annual leave applies to the cashing out of personal carer's leave. The ACCI, at paragraphs 257 to 261 of their October submission express concern that the flexibilities provided for in the NES personal carer's leave arrangements are not reflected in all awards.

PN244

In addition they complain that modern awards do not take a standard approach to personal carer's leave. Their complaint, it seems to the ACTU, is that the award provisions as set out in the exposure drafts at this point in time actually reflect industry standards. For the same reasons that we oppose the inclusion of cashing out of annual leave as a general proposition in all awards so we oppose the inclusion of the cashing out of personal leave. Again, it's not a matter that's generally contained within the pre-existing awards and NAPSAs.

PN245

With respect to annualised salaries, consistent with our earlier submissions, the ACTU is of a strong view that annualised salaries and awards should be a matter considered on a case by case basis. We support the approach that's been taken by the Commission in this matter as reflected in paragraph 26 of the September statement issued by the Commission.

PN246

The AI Group argues strongly for the inclusion of an annualised salary clause in each and every modern award of the Commission regardless of the award history. They say that more recent awards contain such provisions for employees at higher classifications, but then propose that such provisions should exist at all levels in all awards. ACCI, at paragraph 149 to 154, rely on their argument that all awards should contain all of the flexibilities contemplated by the Act, the Request and the NES to argue for the inclusion of annualised salary arrangements in awards.

PN247

The ACTU rejects the approach of both ACCI and the AI Group. Both seem to substantially alter the safety net by the automatic inclusion in awards of matters that have not existed within the relevant industry awards in the past. Where such provisions have existed we do not oppose their inclusion, but we note the approach that's been taken to supervisors in the exposure draft to the Manufacturing Award. As such we won't oppose the retention of annualised salary arrangements where they currently exist for specified classifications in modern awards. We don't support, however, any general extension to this provision.

PN248

Where annualised salary provisions do not exist in awards then arguments on the merit need to be put forward as to why they should be included, and there should be, in our submission, no presumption of inclusion. On many of these matters we say it's not enough to argue that the matter can be included in an award and hence it should be included in the award. There must be merit and there must be justification.

PN249

With respect to occupational awards and the maintenance classifications in industries we have already made substantial submissions to the Commission in most of our written material with respect to the role of occupational awards in the modern award, but also with respect to the issue of the inclusion of maintenance classifications in industry awards, and our submissions at paragraphs 113 to 127 apply.

PN250

We note however that the Australian Government, in their submission at paragraph 40, say that the Commission should have regard to the views of the parties with respect to occupational awards, and we endorse that position. We say where's there support for the retention of occupational awards then the occupational awards should be retained.

PN251

With respect to the overlap clause, in relation to the issue of the overlapping clause it seems that independently of each other the ACCI, the AI Group and the ACTU have actually come to very similar positions, and that is, that the scope of modern awards need to be clarified to avoid confusion and minimise the potential for overlap. Each of the parties propose independently that the best way for this to be done is put scope clauses of awards to incorporate the specific inclusions and exclusions, and that those inclusions and exclusions will in the first instance make it much easier to identify an applicable award.

PN252

This benefits, in our submission, both employees and employers, and fulfils the principles of award modernisation. Detailed inclusions and exclusions from the scope of the modern award will also assist in the auditing process that we submitted needs to take place towards the latter part of the award modernisation process to ensure that industries have not been inadvertently overlooked in the process of determining the scope of modern awards.

PN253

The detail in the inclusions and exclusions will also assist the parties in determining the scope of future modern awards and may reduce some of the disagreement between the parties that's arisen on the existing or proposed scope with respect to the priority industries. The parties also appear to agree that the overlap clause itself is unclear and needs to be redrafted.

PN254

In our submission the overlap clause needs to do two things. Firstly, it should operate subject to the scope of the award itself. In other words the overlap clause doesn't come into play unless the application of the award is unclear in particular circumstances, but also that the overlap clause needs to recognise that the appropriate classification of the employees may actually be found in an occupational award, so the operation of the overlap clause should not be restricted to industry awards alone.

PN255

The ACTU doesn't have a proposition on what the overlap clause should look like. We appreciate very much those difficulties involved in trying to draft such, but not sought to put one forward. With respect to the supported wage system, the ACTU notes that the Australian Government have provided, attached to their submission, a proposed model supported wage system clause. The Commonwealth, at paragraphs 83 to 87 of their submission, propose changes to the supported wage system model clause.

PN256

It needs to be remembered in dealing with the supported system that it actually has two arms. Firstly, it has the administrative arrangements that are managed by the Department of Employment, Education and Workplace Relations, and it has an industrial instrument which is the SWS clause to be inserted in modern awards. The history of the supported wage system is one of development through consultation between key groups; Government, employers, unions represented by the ACTU, and disability groups.

PN257

In its original decision on the supported wage system clause the Full Bench, in print L5723, noted that the Commission is conscious of the fact that the consent applications before it are an historic initiative which has attracted unanimous support from all of the parties involved and has been the result of extensive consultative processes.

PN258

The ACTU believes that the benefits which derive from approaching any amendments to the SWS and, in particular, amendments to the industrial instrument, that a consultative process should not be discounted. The ACTU notes that the change to subclause 4 of the supported wage system model clause proposed by the Commonwealth changes the role of employers and the relevant unions under the SWS from one where they were actively engaged in the process to one where they are intended to play the role of note taker only.

PN259

That the Government may have changed their administrative sectors and arrangements does not, in our submission, automate a change to industrial arrangements. Should the Government seek to change industrial arrangements they should, as has been the practice, consult with the relevant parties on the matter. The ACTU doesn't accept the change in administrative arrangements that the Government may have put in place or into the award provision. We therefore do not accept those changes put forward by the Government to subclause 4 of the supported wage system clause.

PN260

The rights to representation inherent in the award provisions as they existed support the ACTUs submission on the rights of workers to be represented by their union and has supported their union in all matters under the award should they so choose. The ACTU will seek to consult with the Commonwealth and the employer parties on the wording to subclause 4, which provide for the possible involvement of the employer and union in the assessment processes at a level beyond any documentation. The ACTU does not object to other changes proposed by the Government.

PN261

With respect to the National Training Wage Award, I think my colleague from ACCI advised the Commission that the parties would be meeting soon with respect to discussing the reflection of the National Training Wage Award, and we will come back to the Commission as soon as possible if we can sort that particular problem out.

PN262

There are a number of matters that have been raised - just before I come to the final general matters that I wish to go to, there are some particular matters that have been raised by OneSteel in submissions that they have made to the Commission which the ACTU believes need to be addressed. Well, some of the issues - while OneSteel's submissions are specific to the Manufacturing Award, the issues that they raise are actually broader and in the ACTUs submission need to be placed on the table, or placed on the record at this level.

PN263

The first is a matter of OneSteel subsidiaries being named specifically as excluded from the operation of the Manufacturing Award, and OneSteel, in their submission, support them being excluded but being specifically named as excluded from the operation of that award. The ACTU does not support that modern awards should exclude any employer by name unless it is absolutely essential to resolving a coverage issue that cannot otherwise be dealt with.

PN264

If OneSteel or any other employer is subject to an enterprise award, then by virtue of the general exclusion they will be excluded from the operation of the modern award. Modern awards will apply to the classifications contained with them and will also exclude certain employees by virtue of the legislation. OneSteel's submission, it seems to the ACTU, however, is not that there is some other modern award that should form the safety net in their case, nor that they have federal enterprise awards, but rather it seems, in my submission, is that they should not be subject to a modern award at all.

PN265

OneSteel argue that by virtue of the operation of the New South Wales Industrial Relations Act Amendments, state enterprise awards, which they say their instruments were, were deemed to be preserved state agreements, and that it's now OneSteel's intention in concert with the relevant union to extend or vary those PSAs in accordance with clause 16(a) of Schedule A to the Workplace Relations Act. They also argued that the PSAs should be used as the basis for applying a no disadvantage test. Now, this, we submit, is a matter for the legislation and not necessarily a matter for OneSteel to determine.

PN266

That OneSteel's New South Wales enterprise awards might now be PSAs, or that they might be extended in operation by virtue of the Workplace Relations Act is not at issue here. What is at issue is that the employees of OneSteel, in our submission, have traditionally been covered by an award and that they are entitled to and must have ongoing award coverage and the benefit of a safety net of fair and enforceable terms and conditions. Opting out of award coverage is not for OneSteel to choose.

PN267

It is, however, imperative that workers traditionally covered by awards should continue to be so covered. The fact that OneSteel workers are covered by PSAs does not obviate their need to have a safety net, and this applies, in our submission, to all PSA covered employers and employees. In any event, if the Government's submissions are to come to fruition in legislation, without a safety net award there will be restrictions on the capacity of unions to actually access those workplaces.

PN268

The last matter that I seek to address before the Commission goes to the question of transition issues. The transitional issues with respect to the making of modern awards are obviously complex, and the fact that there is a five year rule with respect to state differences, puts another layer of complexity, in our submission, on the whole transition issue. There's the general transition issues that need to be dealt with, but there are also the five year section 576T issues, if I can refer to them as that, with respect to state based differences.

PN269

The ACTU submits that the objects of award modernisation, and in particular the intent that there be no cost to employers and no disadvantage to employees principle requires the Commission to include transitional arrangements in modern awards. Transitional provisions need to address state based differences as well as differences between existing awards and the modern awards. It's our submission that where existing awards contain a lot of standards, employees should be transitioned to the modern award as quickly as possible. If not, then we say what is the point of a safety net and calling the award safety net if we're not transitioning people to that safety net in the shortest possible time?

PN270

We recognise that an exception to that does exist in the area in particular of wages, where we believe that it's reasonable to set a level of increase over and above national wage case increases that should apply to transition people through. Where existing awards contain a higher standard than the proposed modern award, our submission is that those employees should remain on those better terms and conditions as long as they remain with their current employer, but must continue to also receive any national wage cases increases or improvements in the safety net that are generated from time to time.

PN271

The ACTU believes that there are a range of differences that would come up in a range of different areas that should be addressed in transitional provisions. These go to the question of wages, allowances, loadings, penalty rates, continue and accrue entitlements. However, we believe that it's also critical the Commission include transitional provisions which address changes in what may appear to be non monetary related matters.

PN272

Changes in the span of hours, for example, may actually have an impact on the penalties and therefore the wages that a person takes home on a weekly basis, but may also severely impact on the capacity of the employee to balance work and family responsibilities. And we believe that these matters need to be addressed and should not be overlooked.

PN273

These differences are admittedly harder to address, but it's fundamentally important, in our submission, that they be addressed. The ACTU note in their submissions that ACCI state that complexity in transitional arrangements is preferable to employers being required to cope immediately with the full impact of award modernisation, at paragraph 278. In other words, ACCI recognise that from the employer perspective simplicity is secondary to considerations of fairness. This principle we say is equally applicable to employees.

PN274

The Australian Industry Group propose generally a five year transitional period, and I assume that they picked this up because there is a five year transitional period for state based differences, or a five year retention period, if I can call it that, for state based differences. While the ACTU accepts that an appropriate phasing in period will be warranted in some circumstances, we say that a set period may not be warranted across all industries and should not be set as the transitional period.

PN275

For example, if you accepted the AI Group argument for a fixed five year transition period, a very small amount of money for the transition might end up being spread over five years when it could just as easily be dealt with in one or two years. And the capacity for transitioning periods shorter than five years, as proposed by AI Group, we say should not be discounted.

PN276

It's the ACTUs submission that transitional provisions should be finalised once the differences between the pre-existing instruments and the modern awards are fully known. This does obviously require a second round of discussion and a revisiting of awards after they have been finalised, but we believe that's the only appropriate mechanism by which it can be dealt with. We also believe that transitional provisions must formally be annexed to the modern award, and that transitional provisions should establish the periods during which the transition will occur.

PN277

With respect to state based differences we rely on our written submissions at paragraphs 72 to 93, but just mention the following in particular. It's our submission that where state based differences exist and they're in excess of the modern award then that standard should be retained for the five year period allowed under the Act. It's our submission that all employees of the employer in the state should be entitled to receive, regardless of the date of their employment, those better state standards, otherwise the retention of state based differences is meaningless.

PN278

Employees on commissions better than the safety net because of those state based differences should receive any improvements in the safety net so that they're not disadvantaged. And employees on the state based differences which are less than the safety net we'd say should be transitioned to the safety net level. If the safety net is to be recognised as such we believe there should be little or no delay in transitioning workers to those levels.

PN279

JUSTICE GIUDICE: Can I just ask a question about that submission in the context of NES matters and, particularly, the ACTUs submission about severance payments or redundancy benefits? If I can just explain. What's the basis on which we would create transitional provisions in relation to NES matters?

PN280

MS BISSETT: Redundancy pay sits in a very interesting place in terms of the legislative framework for awards, in that it is actually not an allowable award matter. The only way redundancy pay can stay in awards, in our view, is as a supplementation to the NES, so while it might not be an allowable award matter it means it can supplement the NES quite clearly. So the improvements in redundancy pay we say, and sit in awards as a supplementation.

PN281

The problem of course then is that if those differences - our primary submission would be that where the differences come from isn't relevant, that if they are state based, if the differentials in redundancy pay are state based that they supplement the NES to actually allow them to stay in awards on an ongoing basis beyond the five year period. But if that submission is not accepted, or rejected by the Commission, then we say the state based differences can sit there for the five year period, but then section 576 of the Act comes into play and we run out of the five year time period, and they would then need to go.

PN282

What we say is, that if that's the case then there needs to be a mechanism of recognising, in effect, while it is a contingent entitlement, a bank that may have been built up by those employees under the more generous entitlements in the state.

PN283

JUSTICE GIUDICE: What do you say about the submission that was made earlier this morning that it's a different kind of entitlement because it's a contingency?

PN284

MS BISSETT: Certainly we don't see it as a different type of entitlement because it is a contingent entitlement, and your Honour may recall the debates that were had in the 2004 redundancy case about how that affected employers in terms of having to account for redundancy pay and so on. In our submission we recognise that it is a contingent entitlement, but our submission is that redundancy pay is an important issue, an important safety net issue for workers. The employees would have the better than NES standards, obviously rely on those, should they be made redundant.

PN285

And while it's a contingent entitlement, your Honour, we say that the process that we propose of banking effectively what would have been the entitlement at the end of the five years actually doesn't increase costs for the employer at all, because if the modern awards hadn't come into effect then they were to make those employees redundant they would have paid at the higher entitlement level anyway. I think that we are - well, I don't think, I know that we argue that redundancy is a special matter, and what employees' view as their safety net should their business close, it is an important safety net in that respect, albeit a contingent one.

PN286

And we believe that you can actually develop the bank, it's not particularly difficult to do, but would provide some confidence for employees who had access to that improved contingent entitlement for quite some time. On all other matters we rely on our written material, if the Commission pleases.

PN287

JUSTICE GIUDICE: Thanks Ms Bissett. Well, just before adjourning, the question of programming next week. Are the parties, or at least the main parties who might be concerned with other matters on Wednesday the 29th had an opportunity to discuss their view of the order in which we should deal with the exposure draft?

PN288

MS BISSETT: Your Honour, perhaps I could. I've had discussions with ACCI and AI Group, who have also had some discussions with people involved in and the preamble to the Clerical Award as well.

PN289

JUSTICE GIUDICE: Yes.

PN290

MS BISSETT: Because some matters have been called on again by the Government next week, just for Wednesday the 29th it would take some key people out of the picture who need to be involved in the modernisation matters. We propose that the order of matters on Wednesday the 29th be higher education followed by racing, followed by the clothing industry, and if there is any time left on Wednesday the 29th we would move on to clerical, and then hospitality, metals and retail. The only union I have not had an opportunity to consult with is the AWU with respect to the racing industries. But that's agreed between the main parties as reasonable. If the Commission pleases.

PN291

JUSTICE GIUDICE: Yes. Well, we can of course agree with that, but we're unsure what other people might be affected by it, and so if I could just reiterate what you've said, and people who are here or in Melbourne might give some consideration to it and let us know later in the afternoon if there are any problems. The order after tomorrow, so that's the order for the 29th, 30th and 31 October in which we deal with the exposure drafts currently proposed as higher education, racing, clothing industry et cetera, the Private Sector Clerical Award, the hospitality group, metals, and then finishing with retail, and that it's anticipated that we would not get beyond clerical, if indeed we got to clerical on Wednesday the 29th. I think that reflects what you said, Ms Bissett.

PN292

We'll tentatively adopt that as the order in which we'll deal with the exposure drafts next week. We'll be open to any pleas for a different approach if people feel they're going to be disadvantaged by that. If there's nothing else on that we'll adjourn now until 2 o'clock.

<LUNCHEON ADJOURNMENT [12.54PM]
<RESUMED [2.00PM]

PN293

JUSTICE GIUDICE: Yes, Mr Maxwell?

PN294

MR MAXWELL: Thank you, your Honour. My submissions will be fairly brief. We will seek to rely on our written submission. There are a number of key points that I wish to make. Firstly, the way in which we approach the award modernisation is that we seek to protect the existing conditions that we have fought for long and hard over the years and which we currently have in both federal awards and NAPSAs. We're concerned that a number of the submissions that the parties have made in these proceedings where they seek to attack conditions that aren't applicable to their industries may be applicable to the building and construction industry.

PN295

In particular I would refer to the redundancy pay, the payment of redundancy pay to employers with less than 15 has been a standard feature of the building and construction industry and, indeed, a number of the awards identified in paragraph 158 of the ACTUs submission identify some of those awards. In regard to superannuation an issue has risen in regard to the payment from contributions when people are absent on leave and when on workers' compensation. Again we point out that that has been a standard feature of the superannuation clauses of the Building and Construction Industry Awards and has not created any major problems that we're aware of in the 17 years that it has been a standard feature of those awards.

PN296

The other standard features are in relation to issues such as accident makeup pay and training leave. Your Honour, I just wish to deal with the issue of apprentices and trainees. The Commission has raised the issue of less applicable schedule in force that deals with the national training wage arrangements. Our position is that any training arrangements relevant to an industry should be contained within an industry award and they should be tailored to the specifics of that industry.

PN297

Now, I note that the Queensland Department of Education, Training and the Arts has put in a submission in which they put forward that a model apprenticeship clause be considered by the Full Bench for inclusion in awards. Whilst we recognise the attempt to provide some common provisions we would ask that the Commission proceed with caution in this regard as the arrangements across the state vary to a substantial degree. And we've gone through a proposal where we've sought to introduce competency based training arrangements into a state award in New South Wales, and the problem is that in that case identified is an issue of competency based arrangements isn't sort of as well established as people may thing.

PN298

Our general position is that existing training arrangements will go in as they stand, and that perhaps that be for Fair Work Australia once they are established, they should look at how the training arrangements could be harmonised across the states and dealt with in modern awards. Your Honour, in regard to the issue of the application of the clause which is an issue raised by the AIG, whilst we definitely support the submissions of the ACCIG and ACCU, that the application of awards should be as precise as possible and that that be dealt with by way of those inclusions and exclusions. We would prefer it if the AIG had put into practice what they preach.

PN299

We know that in regard to the modern Manufacturing Award today the AIG has not sought to include an exclusion for the construction industry even though the Manufacturing Award has not covered construction work since the Mechanical and Engineering On Site Construction Award was brought in by the Commission as far back I believe as 1989. So we just wish there was some consistency in the view of the attitude of the parties.

PN300

Your Honour, the final matter I'd wish to address the Commission on is the issue of personal leave that was raised, or a response was raised by the Australian Industry Group. The issue that we have raised in our written submission goes to the extent that in a number of awards of the Commission personal leave, with personal leave there was an automatic entitlement on an employee's anniversary date. So, for example, if you took the Building Industry Awards, whilst those joined the first year from their anniversary date of appointment they then received an automatic entitlement to 10 days sick leave.

PN301

However, under the NES you only have an entitlement to sick leave based on an accrual basis. That would mean that at the end of your anniversary date - sorry, on your anniversary date and in the second and subsequent years you would still only accrue sick leave on a monthly or appropriate basis. Now, we say that it is a lesser entitlement than existing award standards that provide for an automatic entitlement on your anniversary date.

PN302

I think that the AIG may have been confused with our submission where they raised the issue of an automatic entitlement on appointment. If you look at our submission, the issue we're raising there is that under the enterprise requirement ACT Award there is an automatic entitlement to yearly entitlement active on one's service. And the point we were trying to make was that there are different conditions that apply in different awards, and in ensuring that employees are not disadvantaged you need to take into account those existing different provisions that may apply. Your Honour, at this stage that's all the submissions we wish to make in addition to our written submission. If the Commission pleases.

PN303

JUSTICE GIUDICE: Thanks Mr Maxwell. Mr Herbert?

PN304

MR HERBERT: Your Honour, if pleases the Commission, can I first address my submissions to those matters which have been submitted upon by the Australian Meat Industry Council, the first of the two clients I represent today. There is a written submission that has been put in, and that's divided into matters which are of general importance, which are matters addressed today, and matters of specific importance in relation to the proposed exposure draft Retail Award. I only propose to address today those matters which are of general importance, and they are two so far as the AMIC is concerned.

PN305

The first is the debate which was canvassed in the Commission's statement of 12 September, and in paragraphs 8 to about 11, that is, dealing with the question of registered organisations and the extent to which they should be expressed as being bound by all parties to relevant awards. It's a matter of particular concern at this juncture to the AMIC as it has been a registered employer organisation in effectively what was always considered to be a discrete single industry, namely the meat industry.

PN306

As a result of provisional decisions that have been made in relation to this process the retail meat, which has always been treated by this Commission as being a part of the meat industry, and specifically industry award are in existence to cover that activity. The retailing of meat in a certain context has now been determined that it will be transferred to the retail industry and will be covered by the modern Retail Award. The AMIC has some 3000 members involved in that activity. A number of them will be the subject of a transfer to the retail industry, but that number is as yet unknown because of the vagaries of the way the application clause may or may not apply.

PN307

And the AMIC of course is very concerned to be able to follow its members in that regard because they engage in a form of meat processing activity which is precisely analogous to meat processing which will continue to be regulated by a modern Meat Award when it is made, I think about the third round of the current exercise. The capacity to follow the members in to a Retail Award when they have been considered to be a meat industry employer organisation is of very great concern, and it would appropriate, it is submitted, for the Commission, when engaged in this process now, given that there will be a significant lead time until the awards themselves come into effect, and given that the Minister has now indicated a clear legislative intention to give a capacity to Fair Australia, if not this Commission, the ability to make orders in relation to such demarcations within awards as might be required in order to, as it were, map out the turf with respect to organisations.

PN308

Whilst the Commission is engaged in the process of putting together the various awards, or in the case of my clients, splitting them apart and separating their coverage into two different industries in accordance with the new world order, in my submission it would be appropriate for the Commission to turn its mind now to the question of which organisations as opposed to my client, that particular employer organisations ought to be designated as having a relevant interest in those awards. Now, whether the terminology used is bound by, covered by, applies to, one sees in the Minister's submission, in that sense probably doesn't matter much.

PN309

What is far more important is that the capacity of registered organisations who have stewarded those industries for very many years but retain their capacity to do so and that there be no issue about that. Back in the old days, if I can call them that at this stage in history, the question of eligibility was generally determined up front at the point of a dispute finding proceedings. All of those now are consigned to history, those processes will not be done. What appears to be now proposed is that employer organisations in particular carry their eligibility rules and they with them in their back pocket in order to establish from time to time perhaps or from award to award or industry to industry whether they have a capacity to represent parties to those awards.

PN310

It is submitted in answer to the debate or the issues that were thrown up in debate by the Commission in the September statement that the appropriate time to address those questions would be now and that the organisations whose interests are being either split up or conflated or otherwise dealt with, that their interests be identified now and that they be identified as being parties who have whatever description might be applied to a relevant interest in the award. So that one can minimise immediately at the outset the prospects of any future or ongoing debate about the locus standi of registered organisations to be involved in any litigation and applications which might subsequently follow the making of these awards. I would say that it will inevitably follow the making of these awards. To that extent the AMIC submits the Commission should address that issue now and not be constrained by the possibility that legislation down the track may attach certain consequences to that identification. It is far more important that the identities of the organisations with a relevant interest be identified at the point when awards are being split up or put together, or NAPSAs are being absorbed and all of those other world-changing exercises that are being undertaken.

PN311

The other matter in effect of which I wish to make a submission on behalf of the AMIC very briefly is to support the submissions of the Minister in relation to the question of small business redundancy. Of the 3000-odd members the AMIC has engaged in retailing in one form or another, by far the vast majority of them would fall into that category. There is also a number that would fall into the category of being unincorporated employers and would not be touched by these arrangements at all. It is when one gets down to the so-called corporate business with five employees and the unincorporated entity with five employees, one of which may have the imposition of a redundancy regime and the other which if they were in the State of Queensland or the State of New South Wales would not be so imposed, then in creates significant cost anomalies and creates impetus for parties to seek to remove themselves from this jurisdiction and remove themselves from the coverage of this award where they have the capacity to do so.

PN312

As I say, that capacity exists far more at the lower end small business in the chain. But other than to point out those matters and to say in answer to a matter that was raised by Vice President Lawler earlier, it is in the nature of the drawing of arbitrary lines of distinction between when a benefit applies or it does not apply, that there will be perceived anomalies and injustices whenever one comes to the line. But if one accepts, as the Minister apparently does, and as my clients do, that there reaches a point in the critical mass of a business where the imposition of a cost of this kind affects the security of employment of everybody else in the business because it affects the very viability of the business, there becomes a point at which a line needs to be drawn and there will always be difficulties associated with doing so and no one runs away from that.

PN313

But that doesn't mean that the hard decisions ought not be taken in relation to such matters and it's, as I say, the AMIC supports the submissions of the Minister that this would be a cost, albeit a contingent cost imposition on small business, on the many thousands of small businesses other than those for whom my client represents, which is not acceptable and would be a cost over and above the current costs which apply to them, bearing in mind what the Minister has said that the research done by the department, confirmed by my client, is that the incidence of small business redundancy obligations throughout Australia in the State and federal jurisdictions is very low as we speak. So that for most of the members of my client it will be a significant added cost.

PN314

Other than that those are - other than the other matters which will be addressed when one comes to the Retail Award submissions, that is all I have to say in support of the submissions by the Australian Meat Industry Council. The balance of the submissions I wish to make if it please the Commission are on behalf of Sun Super Pty Ltd. There is a letter of submissions that was delivered to the Commission from that organisation. I won't go into the content of that letter other than to very briefly indicate to the Commission that that material you have in that submission discloses that Sun Super is the third biggest industry superannuation fund in Australia. It has almost a million members throughout Australia. It has under management of $30 billion. Its membership mostly exists in Queensland but there are, for example, 65,000 members in the State of New South Wales alone.

PN315

There are in the order of 67,000 employers actively contributing on behalf of some 100,000 active existing employee members. It is by no means a medium sized or small player, it is one of the very biggest, and it derives the vast majority to date - has derived the vast majority of that size and its success from being the main default employer in approximately 132 NAPSAs within the State of Queensland. In many cases the sole default employer, in some cases in conjunction with other funds. That circumstance has led to, as I say, its success. The submissions that will be made in these proceedings in relation to the question of superannuation, my client read with some little concern the observations or the statement made by the Full Bench in paragraph 29 of the statement in September in which the Commission said or the Commission was prepared to accept a fund or funds agreed by parties providing of course the fund meets relevant legislative criteria.

PN316

Sun Super was concerned to understand who the parties might be whose agreement was required in order for that to occur, given the debate of course about the awards. It would appear the awards no longer have parties and it was taken to mean perhaps the industrial parties. And there was also great concern about how many of the industrial parties were required to give their consent before the entitlement be named as a default industry fund would be enabled to be afforded to a fund of the obvious magnitude and size of Sun Super. It does appear the debate following that observation by the Commission has come down to this, that the submissions one has heard from both ACCI and the ACTU representing perhaps both sides of the debate are ad idem that this is not the time nor the occasion for the Commission to shake up the superannuation industry and who cause a rationalisation or consolidation or anything else of that kind, and that given the fact that there are 700,000 existing employees in Queensland who today are having their superannuation moneys paid into my client, there would need to be an extraordinarily good reason why this Commission would do anything that would interfere with the financial relationships that are in existence in relation to all of those persons.

PN317

And that the only - it again appears to be ad idem that on both ends of this Bar table that what the Commission should do is to put in place arrangements that would not upset or alter or cause employers or employees to change their current arrangements in relation to superannuation. Where I heard the debate go this morning as to the departure of the propositions that are put that as I understand the matters that were put by ACCI for example, the submission is that the existing arrangements should and must be kept but that the capacity for an employer to make an election or for an employer to choose a default fund into which then the employees who have made no specific election are to have their superannuation contributions paid, that capacity on behalf of existing employees is stopped in effect straight away, and there is, as I read the submission, there is not to be the capacity for employers to pay into those funds - new employers to pay into those funds after today. Although if you were paying before the cut off date you could continue to do so.

PN318

Of course that would create a very substantial anomaly as I think all the material the Commission has suggests that the vast majority of employees accepts the choice that has been put to them by the employer or simply don’t care, as a result of which being in a default fund and available for an employer to pay on the relevant industrial instrument can be the source of a very substantial amount of contributions indeed in relation to superannuation funds generally. So that the fact of being named as a default fund in an award is an exceptionally important matter. It is in effect life or death for funds such as my client.

PN319

So that the cut off for the future, so that no more employers can come on board in relation to areas as was proposed by ACCI one would have thought was a proposal that this Commission would need some very substantial explanation and evidence and justification before it was adopted. Because of course funds, particularly large funds of the size of my client, in order to maintain the quality and standard of services that the members are entitled to as an industry fund, then it needs them to have the capacity to grow and expand and to take on new business as and when it arises and not to be as it were shackled to the business that they have already secured. So that the ACCI proposal in my submission is not, simply not acceptable. There should be no constraints of that kind.

PN320

Similarly the ACTU proposals suggests that whilst the status quo should be maintained which my client accepts as being the correct position, the ACTU proposal suggests that there should be industry or geographical constraints put around the capacity of employers to choose that fund as a default fund for the future. One wonders how that could possibly work in practice. It doesn't appear to be a practical way to deal with the matter because one would have to say it cuts both ways. It applies both to default funds that are named in existing federal awards and default funds such as my client that are only named in a massive number of existing state NAPSAs. Both of them would need to have geographical constraints put around them.

PN321

I can give you a very quick example, the hospitality and tourism industry in Queensland, for example, which is obviously a massive industry. The federal award which has had coverage in Queensland only applies in the south-east corner, essentially the Sunshine Coast, Gold Coast and Brisbane. The rest of the State of Queensland is covered by a State Hotels Award with another union in tow and a different default superannuation fund, namely my client and I think one other, than the one which applies under the federal award. The new modern Hospitality Award which is one of the priority awards will apply to the whole of the State of Queensland. It will take over all the area previously covered by the existing federal award and the other seven eighths of Queensland which is not covered by that award, it would mean that if the ACTU proposal is accepted it would mean that the constraints would need to be imposed onto the existing named fund within the federal award so that it could not extend geographically outside south-east Queensland and impose constraints on my client, for example, so that it could not extend into south-east Queensland in relation to that industry. In other industries of course where state awards apply within the south-east corner where it is the default fund, it could continue to accept contributions from employers within the south-east corner of Queensland.

PN322

JUSTICE GIUDICE: Mr Herbert, without wishing to trespass on your five minute estimate, could I ask a question about - - -

PN323

MR HERBERT: Yes, your Honour, I was warned about that by Commissioner Smith and I'm expecting trouble from that end of the Bench.

PN324

JUSTICE GIUDICE: Yes, well, I won't repeat myself. But does your client favour the nomination of a default fund?

PN325

MR HERBERT: Yes.

PN326

JUSTICE GIUDICE: So there should be a fund or funds specified?

PN327

MR HERBERT: Yes, that's as a matter of principle, yes.

PN328

JUSTICE GIUDICE: On what basis would we exclude any fund?

PN329

MR HERBERT: Your Honour, it would be more a case of the basis upon which funds would be included and of course I don't have the brief from any of those other funds, nor does my client, but I am sure they will speak for themselves, but that they should be included if they are named as a default fund in awards or NAPSAs the scope and coverage of which is to be absorbed into the new modern awards, and if they qualify in that regard then they should be entitled and it should not be a matter of agreement of the industry parties or anything of that kind. It should be that alone. It should be enough to qualify them to be named as a default fund, because to do anything else - - -

PN330

VICE PRESIDENT LAWLER: In respect only of the area where the underlying instrument operated?

PN331

MR HERBERT: For practical reasons, your Honour, that would be extraordinarily difficult.

PN332

VICE PRESIDENT LAWLER: That means if your client has been named in an award that applies on the Sunshine Coast, and that award is going to be, let's say, sucked into the Metals Award, it's now going to be named in the Metals Award nationally?

PN333

MR HERBERT: It is, and that will cut both ways with an organisation which is named in a federal award which doesn't apply to north Queensland it will have the capacity, because the modern award will apply to north Queensland, it will have the capacity to go there. It becomes very difficult to implement otherwise because the geographical description in Queensland is legendary and it's almost a navigational exercise in having to trawl through the pieces in order to work out what your latitude and longitude is, and it would be necessary to do that in relation to superannuation funds to do anything else. And it becomes extremely difficult to do it any other way. So those federal awards, federal named funds, original funds, will be able to piggy back into other areas as much as other funds will be able to travel into other areas.

PN334

But that wouldn't involve, with respect, from a practical point of view a wholesale takeover of other funds area or a war of the funds on the basis that the natural constituency of those funds would be employers in respect of whom there had been a previous history and other areas of those industries where the word could be got around, but it would not necessarily mean those funds would get on their bikes around Australia. Can I say also that if there is a question, and I gather it's implicit in what your Honour has said, that there may be a question of policy in relation to competition between the funds. If there is such a question and a philosophical or a political question in relation to competition between funds, in my submission that is a matter to be addressed at a legislative level given the otherwise stringent legislative regulation or superannuation. If it were thought at a political level that competition between funds was not desirable at the level it might be generated by that sort of a development, then it would be an easy matter for legislatively somebody else to do something else about that.

PN335

But this Commission doesn't have the material or the information in my submission to pick winners in relation to who should be where or to divide or guide the application or constituency of funds up in that way. The other practical problem with all of that would be that if an employer that was based in Sydney decided to move it's base of operations to Melbourne or Brisbane and there was a border that it crossed in relation to funds, it may well be that it has got to close down all it's existing arrangements and open up a new set of arrangements the new state funds or because of the fact that there was a State boader crossed or some other geographical line Within Queensland you don't even have to cross the border to encounter those sorts of difficulties and you do what you do but you don't if it's not necessary.

PN336

So there would be a raft of difficulties associated with it. Can I conclude by saying this about the whole question, one would need a very good reason to stop a development like that occurring in the new modern era of these awards and the standards that are supposed to apply nationally, one would need a very good justification for the ACCI proposition and the ACTU proposition that any of these funds should be corralled into their original patch. Nobody, as I read the submissions, has said why it should be so, other than things should stay where they are. Well if anything else is evident from the whole of these proceedings nothing else is ever stable of course, and there should be no reason in my submission why Sun Super should be required to be corralled into it's existing coincidental geographical area when the awards which moved it into that area are all being dispensed with and a new award is being brought in over the top. The new world order in that regard should also allow superannuation funds to ride in whatever direction the - - -

PN337

SENIOR DEPUTY PRESIDENT ACTON: Mr Herbert, the attachment to the submission of Sun Super lists eight industries.

PN338

MR HERBERT: Excuse me, I'm sorry your Honour?

PN339

SENIOR DEPUTY PRESIDENT ACTON: The attachment to the submission of Sun Super lists eight industries where NAPSA's are recorded.

PN340

MR HERBERT: Yes.

PN341

SENIOR DEPUTY PRESIDENT ACTON: Am I correct in understanding that your submission is it should be named as the default fund in those eight industries?

PN342

MR HERBERT: Yes, yes, my instructions are it does not seek to be named the default fund in industries where it - as part of this process in industries where it has had no prior presence, so they have unidentified industries in the submission, yes, thank you your Honour. I think that was five and a half minutes.

PN343

JUSTICE GIUDICE: Thank you Mr Herbert. Yes, Mr Morris.

PN344

MR MORRIS: Thank you. If the Commission pleases I would like to deal very briefly with just two matters. The first is the matter of application of clauses. It has received a lot of attention in written submissions and again today. Can I say that the Coal Mining Industry Award, I think we are on common ground with the industry unions that we do not wish to deal with that as a general issue, we think it doesn't lend itself to our adding to the debate to resolve it. We think that it must of necessity be dealt with in the context of the award, the Coal Mining Industry Award itself, rather than in some general way.

PN345

JUSTICE GIUDICE: You just want to be left alone do you, is that the - - -

PN346

MR MORRIS: Pretty well.

PN347

JUSTICE GIUDICE: Yes, you have an agreed provision.

PN348

MR MORRIS: We do, and there are submissions that have been made about that both by Australian Industry Group and others. We think we can deal with that adequately tomorrow, I just really wanted to make that clear. We are interested in the issue but we think we can deal with it in the industry consultations tomorrow.

PN349

JUSTICE GIUDICE: Yes.

PN350

MR MORRIS: The second matter we raise concerns dispute resolution procedures. The Australian Government's submission includes an indication of intent so far as the powers of the Tribunal Fair Work Australia to resolve disputes, and in particular contemplates that arbitral determination would not be available other than where there is consent of the parties. That involves a departure or a difference from the outcome that we had assumed when we were making submissions earlier about dispute resolution in the Coal Mining Industry Award. It may well be that others have done the same. If I can illustrate what we mean.

PN351

There are some four or five or perhaps even six points in the exposure draft award which includes both - or which generally includes the provisions that the main coal mining industry parties have agreed to, where it is contemplated that in the event of non-agreement the matter would go to the disputes resolution procedures and that it had been assumed by the parties would enable the Commission to ultimately determine matters whether there was consent from the particular parties to that or not. If I can just give one illustration which your Honour the President may well recall from the award simplification process as far back as 2000, May 2000. One of the issues there was whether employers could require shifts of more than 10 hours to be worked in the coal mining industry.

PN352

The Commission determined that employers could unilaterally determine shift lengths up to 10 hours, but shift lengths more than 10 hours would in the absence of agreement be determined by the Commission. That is just an illustration of where the coal mining industry parties had assumed that that regime that has been there in the Coal Mining Industry Awards now for some eight years would be able to be maintained. There are other illustrations I can give tomorrow but I really give them as illustrations of the issue that will be faced in this Coal Mining Industry Award and I suspect other awards where the parties had assumed that they would not be deadlocked and require the consent of parties for an arbitration to occur.

PN353

We don't know what necessarily the solution will be, we may not know that until we see the legislation, I suspect we won't. We have turned our minds to how the Commission might proceed at this stage, as far as possible to give effect to the consensual approach of the parties and not in fact produce a situation where the balancing of rights of the parties are severely changed or is severely changed by reason of legislation and what it ultimately says. I should say, with respect, that paragraph 47 of the Australian Government's submission which says what powers Fair Work Australia will have or will not have is expressed very briefly, raises lots of issues, with respect. We really wanted to raise that today because as I say we daresay other parties will be concerned about it, we will certainly be addressing it in detail tomorrow. If the Commission pleases. That’s all we wish to deal with today.

PN354

JUSTICE GIUDICE: Yes, thank you Mr Morris.

PN355

MR SLEVIN: I'm just wondering, given the coal employees have spoken, it might be appropriate that the coal union - - -

PN356

JUSTICE GIUDICE: Of course.

PN357

MR SLEVIN: There are only three issues that we wanted to raise. I don't mean to push in on my friend. There are only three issues that we wanted to raise, one of them goes to this application clause, the other is the binding of registered organisations, and the third is the accident pay issue. The first issue in relation to application, I can confirm that my clients would like to be left alone with
Mr Morris, well, his clients in terms of the industry, to the overlapping rule for industry. The issues arise in the AMWU and the AIG submission about this question, and they also arise in the NECA and CEPU submissions. In relation to the AMWU, a rather eloquent submission is made by Mr Terzic about tradespersons applying their trade from industry to industry.

PN358

Tradespersons have always been looked after in the mining industry, they have been catered for by specific classifications of the mining industry, both coal and general mining. So as these journeymen travel though they will be looked after in our award and there is no need for the Commission to give precedence to the occupational nature of the Metals Award in that sense is the position that my client takes. In relation to the AIG issue which seems to be a little different and it is more about contractors, there is a proposal that there be an exclusion for contractors generally. We say that is not necessary. Contractors are not contractors, there are different types of contracts, they are controlled by the arrangements between the two employers. It is not appropriate in a modern award that there be exclusions simply based on the fact that a contract exists with a supply of labour and some are given in the AIG submission and some stat decs provided giving examples of contractors. We don't intend on making any detailed submissions about those individual employers.

PN359

It is a case that there will always be differences. There have always been differences about whether someone is in or out of an industry, particularly the mining industry. Poon Brothers, there are Argyle Diamonds, there are a number of cases in a number of contexts. No doubt this is a new context where arguments will arise again and there is no reason that the Commission should in this exercise be trying to pre-empt any argument that contractors may like to raise in the future. So we have that to say about the AIG argument. In relation to the NECA and CEPU issue it is difficult to respond at this time and this point has been made I think by our friends in the construction and general division that this issue about overlap is something that may well need to be revisited later. It is very difficult to see what this electrical contracting industry is and what impact it will have on the mining industry, both general and coal, on the basis of material available so far.

PN360

The second issue is the binding of registered organisations. I think we're in a position where we agree with Mr Warren and Mr Herbert about this and that the registered organisations, albeit Mr Herbert and Mr Warren speaking on behalf of employer organisations should not be constrained in terms of their representation under modern awards. We agree with the ACTU position as well. The argument arises in relation to the General Mining Award from the AMMA proposal that first saw the light of day in the Commission in it's 1 August submission, supported by the AWU and this is a proposal that AMMA puts that the AWU be bound generally, that the other unions be constrained or restricted in the manner in which they are bound to the award, based on various historical factors.

PN361

Those various factors have been described both in statements to the Commission in these proceedings and parties who have made submissions in various ways. Historical representation, existing representation, existing union demarcations, historical boundaries, their constitutional coverage, membership levels, history of organisation's involvement with predecessor awards. They are the various terms that we have been able to glean from the various submissions and statements. Our submission on it is that these factors are nebulous, that the Commission needs to ground its award clauses in the Act, and in particular in relation to registered organisations there are mechanisms by which this can be done and that is by reference to eligibility rules of unions and demarcation orders that have been made under the previous regime section 118A or under the current regime which is chapter 4 of R2 of schedule 1 of the Act, in particular section 133, and it should go no further than that.

PN362

The unions who are bound or registered organisations who are bound to the awards will have constraints and those constraints should come from other provisions of the Act, other provisions under the Act to circumscribe their eligibility or ability to exempt their members under the awards. The third issue is accident pay and I will be very brief on this because I don't think anyone is putting a contrary position to the question as to whether the Commission has power to award accident pay provisions. It seems that all submissions are based on the assumption that there is power.

PN363

The ACTU puts that it is an allowance. The Minister supports that. In relation to the Minister's submissions and the comment made by the presiding member, Your Honour, this morning we submit the position that if the Minister who asks for the consultation to occur makes submissions during the consultation, then those submissions should be given much weight.

PN364

JUSTICE GIUDICE: On all issues?

PN365

MR SLEVIN: We don't seem to disagree with the Minister anywhere, your Honour, so I can probably agree with you there. It's certainly a question of weight. We do not say that it's determinative but certainly a weighty submission in the proceedings.

PN366

JUSTICE GIUDICE: Yes.

PN367

VICEPRESIDENT LAWLER: You are happy there is no compulsory arbitration?

PN368

MR SLEVIN: In relation to compulsory arbitration?

PN369

VICEPRESIDENT LAWLER: No compulsory arbitration?

PN370

MR SLEVIN: We agree with what Mr Morris said and we will have something to say about that tomorrow in relation to the industry award, your Honour, but thank you for alerting me to that and I will ensure I am well ready to respond tomorrow on that. We posit in our submission that the question of accident pay - and I will go back, the ACTU and the Minister have said it's an allowance. We say it can also be considered as part of minimum payments in the coal industry and we provide you with a reference to a decision of the New South Wales Industrial Relations Commission from 2005I that dealt with accident pay in the industry quite comprehensively, and we say that what arises from the analysis in that decision is that for the coal industry in particular the accident pay provision can be regarded as part of minimum wages and so is allowable, as it were, under 576J(1)(a) and if not as the minimum wage then certainly incidental to minimum wages for the purposes of section 576N(1). It sets in essence the minimum pay of employees who are absent from work due to work related injury or illness. The only other thing your Honours and Mr Commissioner is Ms Doust who was representing APESMA wasn't available after lunch and she has asked that I pass on that APESMA supports our submission in respect to accident pay and we will not doubt hear about the other matters tomorrow. If the Commission pleases, thank you.

PN371

JUSTICE GIUDICE: Thank you Mr Slevin. Mr Skene was it?

PN372

MR SKENE: Thank you, your Honour. Your Honour, AMMA has made written submissions on the general matters in the submission filed in the award modernisation in the mining industry. In a range of ways general matters turn on industry circumstances and where industry circumstances are relevant and how the relevant matters are to be dealt with AMMA intends to deal with it tomorrow in the session on the Mining Industry Award exposure draft. But there are some brief matters that I seek to touch on today in a general way. The first is the application overlap and here I am anticipating the submission that will be made by the CEPU and NECA where they seem keen to keep humpty dumpty sitting on the wall in respect of one issue, that is how overlap should be dealt with between the Electrical Contracting Award should that eventuate and the Mining Industry Award and other matters in other awards as well.

PN373

In its submissions, in AMMAs submissions that were filed on 10 October we've set out our - it proposes what they have dealt with at paragraph 13 and I won't repeat that, but suffice to say the objective is that given the unique circumstances of the mining industry and where the mining work is performed, it is appropriate that work is performed my employers and employees that are engaged in that industry be covered by a single award for the mining industry, and that includes employees covered by major classifications. Now there are a number of potential industry workers in the section between mining and those other industries, and I will deal with them in more detail tomorrow because that turns more directly on particular industry circumstances.

PN374

However, what is proposed under the Mining Award is a two part test, an assessment about whether the employer is engaged in the industry and then consideration about whether the employee is covered by a classification in the award. In short, AMMA proposes that two mechanisms be considered that deal with overlap, some have been touched on by parties this morning. The first is that there be a priority award by way of a specific exclusion as to coverage. That can manifest itself in different ways. The current form of clause 4.1 of the exposed draft for the Manufacturing Industry Award there is a general exclusion that says that that award doesn't apply where any other modern award applies and that may be appropriate in certain circumstances.

PN375

In the Rail Industry Award there is an example given where work that deals with mining industry rail cannot be covered by the Rail Industry Award that's moreave a more specific or limited form of priority exclusion. We say that that type of exclusion is appropriate where there is capacity for more than one employer to be covered for work and there is a classification for those employees. So where that is the case it is appropriate for the Commission to consider the priority to put this issue beyond doubt to ensure that there isn't disputation about which award should apply. There is capacity for overlap that might go beyond that direct conflict and that is where AMMA submits that a relative assessment along the lines of the one proposed by the Commission in clause 4.4 is appropriate.

PN376

AMMA has one rider to that submission and that is that the mechanism for resolving of conflict relatively should be the same in all the clauses. So we would submit the same form of words and the same test that permits consideration in industry circumstances of the work performed by employees should be taken into account. The other aspect of the submission that is jointly made by NECA and the CEPU is that this issue should be delayed, that humpty dumpty should stay on the wall. AMMA opposes that submission for precisely the reasons that the mining industry has put forward authorities. It is appropriate that people in priority industries have ..... now about which awards are going to apply to work of a particular scope. The question of overlap, in our submission, is clearly before the Commission, regardless of whether the Electrical Contracting Award is made or not. The overlap is where the parties both put submissions in some detail of the nature of that overlap and how it should work. So in our submission the question clearly before the Commission, should an electrical contractor ..... it can do so but it involves the resolution of the question around that issue now.

PN377

The second issue I wish to briefly touch on is consultation and resolution and there are two issues here. The first is the submissions that have been made concerning representation rights. In particular, the right that's proposed by the ACTU that a union should be able to initiate a dispute in its own capacity without necessarily being requested to do so by employees. AMMA makes two points in respect of representation. The first is that the current wording of the clause that suggests that an employer is obliged to consult with union representatives or consult with employee representatives in any is unclear. Potentially it is open to the possibility for an employer be helped in circumstances where that is not specifically requested by the industrial parties ..... It is a primary object of the Act that disputes be resolved as far as possible directly between the industrial parties. The government has made clear in paragraph 40 of the submissions that it remains government policy. Now, to the extent that the Commission can take that into account, I would suggest that at least that that aspect of legislation is not going to change.

PN378

So in our submission it is appropriate that a dispute resolution process first require the parties to engage at a workplace level and the third party representation will only be involved if that is specifically requested in the context of a particular dispute by the employees or employer involved in that dispute. Suggestions for amended drafting included in the AMMA submission give effect to that position. The second issue is the submission that was made this morning concerning the status quo, and this is the meaning of the words "work normally". To the extent that there is any uncertainty about the words "work normally" AMMA would seek that the Commission make clear that "work normally" means work normally in accordance with the employer's contracts of employment under the normal direction of their employer and it doesn't in any way preserve the status quo prior to the dispute. AMMA supports the submissions made by the AMWU concerning the consequences of a status quo as to the Commission in circumstances where there is only access to consent arbitration in the current framework.

PN379

Two final matters very briefly. The first concerns superannuation and in this respect AMMA makes the submission from the perspective of an industry where there is not a superannuation clause in the award. Certain superannuation interests have been advanced in submissions before the Commission that they have members in the mining industry, funds that are seeking to either alter default status or obtain default status. Superannuation in the mining industry is fragmented, this is a matter that was dealt with in earlier submissions. There aren't prevailing default funds and there aren't regulations under the existingNAPSAs that apply that deal with superannuation. So AMMA wishes to make clear that in those circumstances it would support the approach of the Commission not to include superannuation in the current framework and shouldn’t be attracted to the submissions seeking to alter the arrangements that are in place now.

PN380

The final note to make is concerning the submission made this morning by the ACTU about cashing out annual leave. The submission was made that this should be a matter submitted by bargaining. That submission is flawed. The reason is because cashing out leave is regulated under the NES. In those circumstances at least until legislation appears that permits bargaining over these matters, it is not possible for the parties to agree about dealing with them in a different way from that proscribed by the NES through a workplace agreement for a contract or otherwise. In these circumstances what the NES proscribes is the appropriate place it is to be dealt with is under a modern award. There are a range of industry circumstances in the mining industry. The prevailing one is that mining industry employees as a result of their roster systems often seek significant periods of time off work anyway, so cashing out of leave is a very common practice in the mining industry. But putting those industry circumstances which will be addressed tomorrow to one side, for modern awards to not contain cash out leave out risks the capacity that it will not be available at all to do so and that plainly was not the intention enabling the Commission to include such provisions in awards.

PN381

Just as a final final matter, the submissions that were made a moment ago by the CFMEU and the coal unions concerning the parties bound, AMMA has made submissions already about the appropriate approach to be taken to parties bound and why it's appropriate that historical representation under awards be maintained under modern awards, and those representation rights not be extended, that will lead to demarcation and disputation. Suffice it to say we repeat those submissions, although we intend to for the purposes of schedule 4 or what we propose to be schedule 4 of the exposure draft we intend to provide some further detail tomorrow about exactly what the existing pattern of representation and what that would actually require, so I just foreshadow that. Unless you have any questions, your Honour?.

PN382

JUSTICE GIUDICE: Thank you Mr Skene. Mr Lawrence.

PN383

MR LAWRENCE: If the Commission pleases. Two sets of submissions have been filed by ACCER, the first dated 1 August deals with an overview of submissions and it was concerned with the federal minimum wage and relevant award rates and it also dealt with some broad issues which put forward as being relevant to a rational, comprehensive and modern award system. On 10 October we dealt with some more specific matters, especially in regard to the decisions of the Australian Fair Pay Commission, including the 2008 decision of the Fair Pay Commission in which we demonstrate that the Commission failed to take into account the real costs of housing and failed to take into account at all childcare costs when determining what the safety net requirements are of low paid workers.

PN384

The general comments in that second submission were pages 1 to 6 and the reference to the 2008 decision at pages 7 to 33. We have got some substantial matters to raise in relation to the way in which the Fair Pay Commission has taken the federal minimum wage in the last few years. The second set of submissions referred to the national debate about pension rates. It refers to them because it concentrates the mind on the issue, as we point out in the written submissions, the use of the Henderson Poverty Line was central in setting up the Fair Pay Commission and the Fair Pay Commission found that as at December 2007 that a federal minimum wage dependent family of four was only 8 per cent above the Henderson Poverty Line.

PN385

By way of contrast, as at the March quarter of 2008, which is the most recent publication of the Melbourne Institute, the single pensioner was 4.9 per cent above the Henderson Poverty Line and a couple of pensions 14.9 per cent above the Henderson Poverty Line. So there is a very significant advantage that the pensioners have in terms of their overall income over the FMW dependent family. As we say in the submission, if the single pensioner rate was increased by $30 a week which a lot of people have argued for and no one seems to be contradicting, that would take the margin of the single pensioner to 14.7 per cent above the Henderson Poverty Line as compared with 8 per cent in the FMW dependent family.

PN386

We say these matters concentrate the mind and they cause us to ask the question can a family live on the federal minimum wage less taxes plus transfers, and we say that the answer to that is no. Our concern is primarily with low paid workers receiving less than about $600 per week or about $31,000 a year. Our primary obligation, as we see it in the new legislation, is for the Commission to set a fair minimum safety net wage and we say that the current federal minimum wage at $543.90 per week is manifestly inadequate to support the family of four with two school age children and that is even despite substantial transfer payments.

PN387

Of course it has been pointed out in the past and we well know this that federal minimum wage is not the lowest rate that is fixed in some awards or is proposed in some awards. Referred in the written submissions to what ACCI has put forward in the past as the effective minimum wage in Australia, and that using their figures would be about $580 a week at the moment. In the Higher Education General Staff Exposure Award the rate for cleaners and labourers is $584 per week. In retail the lowest rate in the exposure award is $600 per week and that includes directly employed learners, for example, and in other awards we find similar rates around about the $585 to even over $600 per week. For example in Health and Allied Services the figure is $597.60 at the moment.

PN388

We put it that these are strong indicators that the current federal minimum wage is not appropriate. We have also referred to the differences between the State and the federal minimum wage in relation to the lowest rate payable to employees, and as we point out the unweighted average of the states is $7.19 more than the federal minimum wage, that is a significant matter in our submission. In our submission the Commission can have no confidence that the federal minimum wage as it is currently fixed is an appropriate fair minimum safety net wage. We also made some reference to the relativities question in the first set of submissions and we pointed out that over a period of time there has been a substantial reduction in relativities. This is not our primary concern but nevertheless it does highlight a particular aspect of the changes in award rates of pay over recent times.

PN389

Interestingly this was raised by part of the exposure draft of manufacturing and associated industries where at page 26 the rates of pay are set out and in
schedule A there is a reference to the classification structure and the wage relativities to the C10 classification, and the Commission and many others would be well aware of this, but the C14 rate, this is at page 69 of the document, is 78 per cent of the C10 rate. Well as we all know, over a period of time the relativities have changed and $78 is an historical figure, the current relativity is 85.3 per cent. That means that if we look at the original C10 rate it was 28.2 per cent higher than the C14 rate, whereas now it's only 17.2 per cent higher.

PN390

Now as we said in relation to that we don't see award modernisation as re-establishing old relativities or questioning these relativities but it is an issue that should be recognised and one which we think is appropriate to deal with or for Fair Work Australlia to deal with. But nevertheless it is a matter that does highlight the way in which award relativities have changed. Could we just add in relation to that, a point that develops a comment made by the ACTU, the ACTU made a submission that when working out the fair minimum safety net that reference should be made to the pre WorkChoices position rather than matters that are raised under WorkChoices, as I understand on the basis that those matters were not necessarily or ordinarily fair. We have drawn attention to the fact in our submissions that the Fair Pay Commission was not obliged to accept a safety net wage for employees other than the low paid, let alone a fair safety net wage.

PN391

Indeed, the question of whether for the low paid the safety net wages were meant to be fair or not is a vexed one. But we just illustrate what has happened in the last couple of years by reference to the current rates of C4, C6 and C10 when comparing New South Wales with the Australian Fair Pay Commission rates. There has been a divergence over what we might call the WorkChoices period and now at the C10 rate, as we calculate it, the New South Wales rate is $6.30 a head of the federal rate. At C6 the New South Wales rate is $14.40 ahead of the federal rate and at C4 the difference is $21.50. Now a major reason for that is that in 2007 the Fair Pay Commission increased the award rates of pay for those earning over $700 per week by $5 or thereabouts a week, whereas the New South Wales rate was as I recall $20, but that was the main reason and it highlights the point that what the Fair Pay Commission has done over the last couple of years hasn't had to be fair and hasn't necessarily been fair, and we would submit that when the Commission looks at the way in which it ought to deal with these questions, that it should take into account this recent history in this regard.

PN392

Now that is a comment made about people who were not in our primary interest area, those under $600 per week. In our submission the issues in relation to the low pay require a process to consider - so that they might be considered, so that the Commission can have a closer look at the relevant issues. We've pointed out that research is needed, contemporary research. The Henderson Poverty Line, we have argued, is something that needs to be reconsidered in particular in relation to housing costs and we have asked that the Commission research which would be directed at updating the Henderson Poverty Line information in regard to housing costs and also in the written submissions a proposal that there be research commissioned by the Social Policy Research Centre and we have pointed out the statutory basis upon which that can be done.

PN393

The other important point we raise is that the Commission should ask the parties to address it on these matters. We have made comment in the past in wages and allowances review cases in August of this year that although we have raised these issues on a number of occasions over a period of time we are met with silence. The parties don't engage in the debate for one reason or another. We think that they should engage in the debate, we think the Commission should ask the parties to express their views on the requirements of a safety net wage and we think the Commission, and we would submit this, the Commission has a statutory obligation to inquire into the requirements of the safety net wage and to ask itself the question, the same sort of question that has been asked in relation to the single pensioners, put only upon that or could people be reasonably expected to live on that wage plus the transfer payments that go with it. In our submission that's an essential part of the process that the Commission is involved in, in this function.

PN394

We are not asking the Commission at this stage to make a substantive decision, we are simply asking that the Commission establish a process by which the issues can be considered and determined. In the course of that process we expect that we would have a basis for putting forward a proposal that there be a modest income, the federal minimum wage would be equivalent to the federal minimum wage in these modern awards, but that is not our primary concern today, our concern is for a process that will explore these issues. They are all the matters that I wish to put to the Commission, if the Commission pleases.

PN395

JUSTICE GIUDICE: Thank you, Mr Lawrence. Are there any other employer submissions? Yes, Mr Wood.

PN396

MR WOOD: I have a submission on behalf of an employer association and the union, your Honour, if that qualifies.

PN397

JUSTICE GIUDICE: Well you are not disqualified.

PN398

MR WOOD: I have four points, your Honour, on behalf of NECA and the CEPU. The first is that NECA and the CEPU seek an Electrical Contracting Award. The Commission will decide whether such an award can be made, if at all, during stage 2. It might make such an award, might make it an industry award, might make it as an occupational award or it mightn't make it and if it does make it in the form that we ask it will cover about 150,000 employees and not cover directly employed electricians.

PN399

The second point is there is likely to be interaction between a subsequent award and the Manufacturing Award, the Mining Award and the Coal Mining Award and 33 other awards that are likely to be made as part of stages 2, 3 and 4. Our third point is that like those other parties at the Bar table we would also like to be left alone, that is we would like such an award to have primacy. But we recognise that that issue can't be determined until the issue of whether or not such an award is made is itself determined. That leads to the fourth point that in relation to working out this question of primacy there are four broad ways in which the Commission might proceed.

PN400

The first is to do what the AIG and the ACTU have suggested and that is we would use the words positive and negative in regard who did or talk about specific inclusions and exclusions as the ACTU did. One can look at this issue as a question of the application covering the scope clause and that question will be determined at least for the Coal Mining Awards and the Mining Awards tomorrow, at least on a preliminary basis and that's not much I can say about that having regard to the fact that the determination of whether or not the Electrical Contracting Award will be made has not yet been determined.

PN401

The second way that one could to proceed is to deal with the matter in the way in which the Metals Award has been treated. Clause 4.1(a) which makes the Metals Award supportive to other awards. A third way in which it can be treated is to make any future award predominant, that is do the reverse, draft a clause in exactly the opposite manner to the way clause 4.1(a) in the Metals Award has been drafted. Those first three ways of dealing with the question of primacy are really all drafting exercises and our main submission is the Commission should not be saying to itself now in determining the ..... determining the scope of the ..... clauses tomorrow for mining and coal mining and coming back ..... and revisiting that question of primacy by reference to the application clause.

PN402

A fourth way in which the issue could be determined is through the methods of clause 4.4 of the Mining Award and clause 4.5 of the Coal Mining Award for the purposes of having an Electrical Contracting Award, such a process or such a clause would not be effective because the real question of where the employee normally performs work would be answered in a circular fashion, that is an example raised for VicePresident Lawler in Coal Mining Award. There's an example in their submissions about an employee of electrical contracting terms of work at Hammersley Iron and then on a bridge in Brisbane and the question of where the employee is at say Hammersley Iron as to where the employee performs work is entirely circular. It depends what you define the employee as normally peforming, or what type of work you define the employee as normally performing in the circumstance of employees who in the electrical contracting industry move from job to job to job.

PN403

To give that example, to give some numbers about that, the estimate is there are between 1000 and 10,000, perhaps 3000 employees who work in electrical contracting in the mining industry, that is mining and coal mining. Perhaps half of those were employed by electrical contracting and they will move from job to job that is in and out of mining from time to time and it falls on clause 4.4, could not resolve the issue of which award will apply from time to time but a more direct drafting exercises would of the type set out in sub-clause 4.1(a) of the award or its converse for specific inclusions or exclusions. That is all I wish to say to the Bench.

PN404

JUSTICE GIUDICE: Thank you, Mr Wood. Yes.

PN405

MR S. NANCE: If the Commission pleases, Stephen Nance from the Chamber of Commerce and Industry. We have filed our submission. Just very briefly I would just like to touch on a few items that have been raised today, I'm not going to repeat what's in the submissions. The first issue is in respect to the parties bound. It is our submission that we believe that the view of the Commission not to include employer parties is the correct position. By including registered employer organisations into a new modernised award is superfluous because it is not dependent upon whether you are a member of that organisation or not, it is dependent upon whether you are satisfied the definition under the Act, whether you would be covered by that award or not.

PN406

In respect of the small business redundancy, in Queensland we had that exemption was imposed after a ruling by the Queensland Industrial Relations Commission by overturning that and by including small business severance provisions into the modernised award could result in increased costs for 27 employers and therefore we endorse the submissions that have been made earlier this morning by the various other employer parties and the government to exclude it. In the issue of a particular question that was raised by the Bench in respect to how you deal with redundancy provisions coming from the national employment scheme, that is a little bit more difficult one because are we preparing the National Employment Standards as a whole or are we tackling it as a line by line case.

PN407

What I mean by that, for example, under the National Employment Standards, they determined that 15 employees, whereas under the Queensland termination change in redundancy it is determined by hours of 550 hours, which one would override which. The entitlements up to 10 years or nine years under the national employment standards I think was 16 weeks. 10 years it reduces to 12. Under the State provisions 10 years is 12 weeks, 11 years 13 weeks, 14 weeks and goes up to 16 weeks. So there are certain differences between the two provisions and which one would override the other would be a question mark. I think from a simplistic point of view and trying to resolve a lot of these issues, it would be our submission that the National Employment Standards would be the only standards that would apply from 1 January.

PN408

In respect to the ACTUs submission where they talk about should maintenance trades be included in industry awards, I would expand that rather than just leaving it to maintenance any sort of peripheral classifications should they be included in modernised awards. I think the answer is yes. If we're going to go through this whole process of trying to modernise awards and trying to reduce the number of awards in workplaces don't think we can look at what has happened historically and say well historically the maintenance awards were not included in this industry award so therefore should not be included. If you use that philosophy then you could say that every award should be included. I think this is the process at the time where we have to look at making some hard decisions and start to include some of these peripheral classifications into industry awards so that it will allow the employers having one set of conditions applying across the whole workplace, rather than operating out of two, three, four different awards, having different conditions applying to the same workplace.

PN409

In respect to the district allowances that were raised in the ACTU submission, in Queensland it's a little bit different, we have very low district allowances depending on where you live. In Mackay you get 90 cents a week, if you live in Cairns you get $1.05 a week extra, if you live in Mount Isa you get $3.25 a week extra. What the ACTU is saying is that those district allowances should be retained and then added onto what the new rates are. It is our submission that those district allowances should be absorbed in any of the new rates that are made, and if by chance those district allowances would exceed the new rates then as part of the transition they would just be phased out over a period of time. I think part of our concern is that we are only looking from Queensland, there are other district allowances or locality allowances in other states or territories that actually increase those rates that have come out under the draft awards and would therefore incur greater costs to companies and employers.

PN410

In respect to just the final point, it is to do with the default fund under the superannuation. I think my submission is mostly a little bit difference to everyone else's because I simply say that this Commission should not actually make any default fund. Currently in the economy is that we will operate under legislation. The legislation has been here for quite a while, the employers have elected to put default funds in there, employees have accepted those default funds and in reality about 85 per cent of employees elect their default fund rather than choose their fund. By starting to nominate funds or default funds in awards could have a serious impact on both the administration of the employers and also via the employees. If we only name one or two funds and those funds are not the default funds that are already in existence, then come 1 January 2010 or more appropriately April 2010 when the first payments are made, those entitlements will go across into another fund. So the employers will be left with administration charges on their old funds.

PN411

They will also have to be paying into a new fund starting from scratch. We don't think that's fair. We also believe that as a result of changing default funds the employers will have to go back and issue their choice of fund form again and go through the whole administration process because under the legislation when you seek the change in the default fund you have got to go back to the first stages of issuing the employees the notice, letting them choose, if they don't choose then the employers will then comply with whatever default funds they are.

PN412

One thing that we have heard today is there have really been no reasons why this Commission should grant named default funds. We have heard a lot of arguments in what should go in there, what shouldn’t go in there, NAPSAs or anything like that, but the reality of the situation is that default funds are there, they are currently in existence and they should be maintained. By seeking to limit to certain named funds under NAPSAs or pre reform agreements will inhibit organisations or businesses that have elected to take other default funds or approved industry funds.

PN413

In Queensland we certainly did have default funds named but we also had a motherhood statement which stated "or any other approved industry fund", and a number of church-based organisations elected to set up their own funds and that's where the default funds for those church-based organisations go to, not to Sun Super or Australian Super, they go into the church-based because that is the named default fund. So it is our submission that if the Commission is looking at this question, which they are, then they should not actually name any default fund. If you are in turn naming default funds, then it should be an industry fund that is currently contained without any restrictions, without any geographical restrictions, without saying employees that are employed at 8 September 2010, they are the ones that you can apply to but any new ones you have to use another fund, that is just another administrative burden.

PN414

Any new organisations that are set up in those industries after that date should be able to be given the choice of whether the Sun Super or whatever funds should be the default funds, rather than this Commission imposing a rule saying well you've got a choice A or B because I don't think that's your role. Just finally in respect to that, I have to say in Queensland if you are submitting a fund then we would strongly recommend that Sun Super for the reasons advanced by Andrew Herbert. I had to put that one. Just finally in respect to the submissions about the facilitative provisions, it would be our view, and we support the submissions made by the AIG, that the facilitative provisions must also allow for individual agreements to be made, just not a collective agreement. So on that basis if the Commission pleases I have noting further to add.

PN415

JUSTICE GIUDICE: Yes, thank you Mr Nance. Yes.

PN416

MR MEEHAN: Yes, if it pleases the Commission. I represent two clients, the first IFSA, Investment and Financial Services Association, and the second is the Financial Planning Association of Australia. IFSA is a not for profit organisation representing retail and wholesale fund management superannuation and life insurance industries. It has over 140 members. The FPA is the peak professional body in the financial planning sector in Australia, it has approximately 12,000 members, comprising qualified financial planners who manage the financial affairs of over five million Australians. Members of both clients provide superannuation and related services in respect to employers and employees in the industries to which the modern awards will apply.

PN417

Their interest is confined to advancing a submission in relation to one aspect of the superannuation clause and that relates to the default superannuation debate. The position I respectfully advance is the Commission should not nominate a specific superannuation fund or funds as a default fund in a modern award. That is our primary submission. A secondary position we advance if that is not adopted is that there ought be a grandfathering provision which preserves existing arrangements so far as default superannuation contributions are concerned. The basis upon which I contend for that position is firstly it is not necessary to establish a minimum safety net of conditions for there to be a specified default fund.

PN418

The Bench will be familiar with the suite of superannuation legislation, including the guarantee legislation and the superannuation industries supervision legislation which deals with, so far as supervision is concerned, operating standards, risk management, licensing of trustees, in house asset rules, governing rules and the like. It is comprehensive. That is the, I submit, essential safety net and it is legislated. By entering into the arena of specifying default superannuation funds the Commission is really being asked to regulate in the area of superannuation. I submit what that will do is to remove a prevailing flexibility in respect of non union members.

PN419

True it is that there are industry parties represented here today who have reached agreement as to appropriate specification of funds. My client share the concerns of Mr Herbert's client that the Commission would be prepared to accept what those industry parties agree between themselves and proffer as an appropriate industry based default fund. Those parties historically represented parties with antecedent industrial disputes. The underpinning regulation has changed now. The Commission is contemplating modern awards, the provisions of which will apply to employees who are union members and non-union members, employers who have not been in the past covered by federal awards and new employers. The goal posts have changed. In my submission it is not appropriate to simply accept what parties to antecedent industrial disputes agreed between themselves as appropriate funds.

PN420

The second platform really amounts to public interest grounds, and the essence of those grounds are based on competition. In my submission it is undesirable to reduce competition in the provision of superannuation services in the arena of the default contributions. At the moment there are default funds which contributions are being made in respect of non union employees and union employees. The effect of specifying the fund that is a pre-existing industry fund will be to curtail that choice and to confine the choice as it were or to remove choice and confine the contributions to specified funds, and that is undesirable on public interest grounds.

PN421

There can be no doubt that by specifying those funds there is a layer of choice automatically being reduced to the exclusion of other complying funds. My clients advocate the position that competition within the funds industry, superannuation funds industry has driven innovative customer service offerings, reduced pricing, diverse product offerings, and the letter submission forwarded to the Commission on 10 October elaborates on some of those propositions. A restriction on thecompetition within that area of the superannuation industry would potentially reduce those innovations and those offerings.

PN422

In the current economic client it would be in my submission an area that the Commission ought be very cautious of entering into, namely, to single out by reference to what industry parties have put forward, a single or a number of specified funds to apply across an industry as a compulsory default fund. The Commission is not in a position, nor is anyone in the prevailing climate, could foreshadow how any particular fund will perform. I think the Commission has indicated in its 12 September statement that it doesn't intend being an independent assessor of comparative performance. But I respectfully invite the Commission to take on board the real possibility of that by specifying in an award a specific fund that is taking on the endorsement of the Commission as an appropriate and safe fund for investment purposes. Those are my submissions.

PN423

JUSTICE GIUDICE: Thank you. Yes, go ahead.

PN424

MS A ZHANG: I am a committee worker with Asian Women at Work. Before come to Asian Women at Work I have worked in a number of different jobs. I have worked in the clothing factory and as a clothing outworker. I have worked as process worker in factory making fuel filter, putting them together and do quality check, and I have worked in home based aged care. In China I was a journalist for many years but I did not work in that job in Australia because my English is not good enough and I couldn't find a good job. I was lucky to be able to get this committee work job. Our Asian Women at Work Action Group have asked that Debbie Carstens and I to speak on their behalf today.

PN425

Many of them were not able to take time off work to come today but some have done so to show you how concerned they are about this award modernisation process. They have asked me to speak because they do not have enough English to express themselves here and do not feel comfort. We have been trying to follow what is happening with this award modernisation process as best we can. Long ago Asian woman workers need a strong and clear protection. We are concerned that award cover and some important protections are being lost. We would like to outline some of our main concerns. We would like to acknowledge at first that the task that the Industrial Relations Commission has been given is extremely difficult.

PN426

We are confused about some of the instructions you have been giving. We do not understand how it's possible for you to compound such a large number of awards into one while protect the workers right and not in some - include some great cost to some employer. As the minimum standard in award are general very low and we encourage that the Commission to maintain minimum protection for workers. Workers should not have to suffer because of this ..... process the Government believe was important. The first concern I want to talk about is the flexibility agreement that can be made around those new awards. Our women are very scared if they are even called to go to the boss's office. They don't know what will happen, what it will be about, what the boss will say.

PN427

If the boss asks them to say something or do something they are more scared. They don't know if they can say no to the boss so they usually say yes even if they don't understand what they are being asked. They are worried if they say no they will have lost their job. One of our more confident members recently got a job in a nursing home. She went for an interview and the boss decided to give her a job straight away and at the interview he give her a bunch of papers and asked her to sign. She didn't have time to read it and understand the document. She was told to just sign it. She feel if she say no or asked for time to take away and read them she may miss this opportunity to get the job.

PN428

These are just some stories that have help explain. Why aren't we sent to someone external, should be checked to explain the agreement that the worker has signed to be sure they are safe and fit in respect of them. Even AWA will check by someone. I know it seems we are confused about this. Can we say no to a flexibility agreement that a boss may be give us to sign? What are the consequences of saying no? Are there law to protect us if we want to say no to agreement, the boss of us? It would be good if the award clear say employee cannot be sacked if they don't want to sign a flexibility agreement. For those women who do have the confidence to speak up to their boss, because then the Commission had included in the drafted TCF Award is excellent flexibility agreement for non English speaking background workers.

PN429

Should it be translated to allow us to understand the contents. The specifics in our written submission give you a beginning idea of the significant member of labour women work in different industry being considered in those priority awards. Also it would be kind to take them away to read slowly and carefully in our own time and to get advance before we have to sign them. We want this for all non English speaking background workers, not just TCF workers. The second concern I wanted to talk about is training. In addition to some work agreements another important way to assist women workers to protect themselves is through training, training about their rights at work, training about agreement and negotiation in the workplace, and the training about how to deal with problem, and the disputes when they arise.

PN430

We welcome the training level incorporated in some of the draft priority awards, but migrant woman in all industry need access to this training, not just some of them. The draft awards also only allow for training for a limited number of the percentage, not the whole workforce. All workers should have access to training about their rights. With new industrial relation law and the new system being introduced all workers should have chance to training about their rights and the system. It should be built into their award entitlement with the view all workers should have access to two days of training about their rights at work, and another issue I will write about, and that it should it be clear standard in awards.

PN431

One of the bigger areas of discussion in our Asian Women Workers Action Group has been about redundancy. Many of our members work in the workplace of less than 15 people and many of our members work in the manufacturing which is general ..... everyone know everyone, everyone knows someone who has been made redundant because their factory is reduced in size or closing altogether. Our Asian Action Group, we are very excited to see redundancy scheme for small business workers included in the draft award. Many of Australian workers are affected by this important entitlement, and it's not acceptable that those hard working people are discriminated against.

PN432

We pay the same tax as larger business workers. We work very hard. Why should we not receive the same entitlement? It's not our fault that we work in a small company. Why should we be punished? Our pay levels are very low. When we lose our job there is a huge financial burden and we do not have lot of savings. As non English speaking workers it can take us a while to find alternative employment. This, the covering law of rights, are important rights. Redundancy pay and a scheme allowing us to start looking for work in the lead up to the redundancy taking effect gives us at least the chance of some continuing of income.

PN433

The Government has spoke out against the redundancy scheme because they said that they promised to protect small business. We are very disappointed in this. How about protecting those millions of workers who are working in the small business? If the Government wanted to protect the small business then we believe the Government can look at some form of redundancy scheme to assist the small business to manage its responsibility rather than removing this right form workers. Another issue I would like to address is long service leave. We have had many cases of women being sacked just before they are due to get long service leave. How can these workers be protected through awards? Every worker should have a right to long service leave after five years as protection against this kind of abuse.

PN434

Finally I would like to talk briefly about the union rights and into the union representation. Before the election last year our action group ..... one of the job ..... and a barrister to talking about WorkChoices and how it had caused so much hardship for migrant women workers. ..... talking of how it increased the number of industrial relations inspectors to 300 to cover the whole of Australia. Our action group are almost laughing at him. How can 300 inspectors cover all the workplaces in Australia? How can they possibly replace the enormous, the thousands of union organisers undertake and checking up our workplace across Australia on a regular basis?

PN435

Our members see the union role in Australia as very important to protect them and support them. They are very concerned if they reduce role of the union in recent years and many of directly feel the consequences in their workplace show that reduced pay, reduced conditions and ..... issue of the are most severe in their workplace. Bosses feel they don't have to answer to anyone and are not being checked by anyone and they can do what they like. Maybe we will talk about this further. Thank you very much.

PN436

JUSTICE GIUDICE: Thank you, Ms Zhang.

PN437

MR BROMBERG: If the Commission pleases, might I fight my way to the microphone at least at the Melbourne end?

PN438

JUSTICE GIUDICE: Yes, you go ahead, Mr Bromberg.

PN439

MS CARSTENS: I'm sorry, your Honour, we're halfway through our Asian Women at Work submission. Is it possible for me to complete the Asian Women at Work submission first?

PN440

JUSTICE GIUDICE: Yes, I'm sorry.

PN441

MR BROMBERG: I'm sorry, your Honour.

PN442

JUSTICE GIUDICE: Yes, I don't think either of us realised that there was more to come.

PN443

MS CARSTENS: I'm sorry, your Honour. Angela has practiced her speech but it's obviously very difficult for her to speak clearly in English as you heard. I wanted to continue on this theme of our concerns around union representation for migrant women workers, that basically we find a huge difference in workplaces. Our members describe a huge difference in their workplaces dependent on whether or not there's a union presence or not in that workplace, that many of our members experience below award wages and conditions in workplaces where there is no union presence. The atmosphere of bullying and harassment is quite significant in places where there is no union presence, and so this issue is of great significance to our members.

PN444

In fact some of our members thought that after the election result in November of last year the unions would immediately have more power in their workplaces. They were hugely disappointed when this was not the case. While this is naïve and unrealistic it actually represents the - is representative of the intensive desire these women have for an improved union presence in their workplaces. We therefore have a general concern that there seems to be a reduction of clear reference to the union's right of - the right of union representation and union activity in various processes in these draft awards.

PN445

Awards should be clear that workers can access their union for information, training, support and solving problems. We want to see clear reference to unions being bound to relevant awards, unions being involved in consultation processes, unions' involvement in dispute resolution and so on.

PN446

We support the union's submissions that they should be able to take disputes on behalf of workers. As Angela has described to you, the intense fear that many migrant women feel about dealing with their boss directly, many of our members may wish the union to take a case but don't want to be the ones putting themselves forward saying we're requesting the union to be involved in taking up this dispute for us or taking up this issue for us. Just a story to illustrate that, one of members, Mae, was elected as a union delegate. She's a Chinese woman and she was elected as a union delegate in her section. It was a particularly difficult section with a particularly difficult supervisor in this metal work factory and from the time that she was elected she was continually harassed by her supervisor. She was given the most difficult tasks.

PN447

She was put in a situation where she was always on her own to minimise her interaction with other workers and in fact she was even followed to the toilet and on a regular basis. I think the supervisor seemed to believe that she was collecting union dues in the toilet or something, as the justification for it. If anyone who actually started having conversations with Mae in the workplace was also bullied and harassed and also given more difficult jobs, so increasingly she was isolated and made to feel uncomfortable around other people and eventually Mae chose to leave that workplace as her personal way of resolving that difficulty. This is a story that illustrates the difficulty that migrant women find to speak up and stand out and they are keen for unions to be involved in taking disputes on their behalf.

PN448

In terms of superannuation we have a few things to say. We don't want to enter in to the active debate here happening about default funds. We just want to be sure that superannuation is actually paid. We are commonly contacted by workers who have not been paid their superannuation entitlement. Recently there we've had some seven or eight cases who have actually referred people on to get assistance from the superannuation regulating body to complain about the fact that they haven't been paid their super. In those cases we were disappointed to find that while the employer was fined for not paying superannuation, the worker still didn't receive their superannuation entitlement.

PN449

Also in industries like the textile, clothing and footwear industries where factory closures are common, we're concerned that workers can lose entitlements if the payment is actually occurring on a quarterly basis as is the statutory requirement. In the context of the non compliance, we argue that the current award requirement for monthly payment of superannuation entitlements in the current TCF awards and in other awards should be retained rather than referring to the quarterly statutory requirement. As we've said elsewhere in our submissions, for any SB women workers, the less left to negotiation the better for them because they have a limited capacity to negotiate for themselves.

PN450

We are therefore concerned about the overlap between facilitative provisions and flexibility clauses. In these migrant women workers need maximum protection and they also need no confusion about what in fact they're eligible for. Matters covered by ongoing facilitative provisions should not be the subject of flexibility agreements in our belief. We also think the safeguards in the current TCF awards for facilitative provisions should be carried over into the facilitative provisions in the new TCF draft award, and in fact those safeguards represent a good model to protect migrant women workers under all awards.

PN451

I'd like to close with some general reflections telling you a story about some workers that we have met in our community work. The Adult Migrant English Program offers 510 hours of free English for new migrants that arrive here in Australia and Asian Woman at Work over the last three to four years has been regularly visiting these AMEP classes and offering information sessions to assist migrants to settle in Australia, and one of the topics that we've been covering is talking with them about their rights at work.

PN452

We start our discussions with these migrants talking about, "Well, how are wages and conditions set in the countries that you've come from, how are they determined?" The majority of migrants have replied that they're set by the boss, that there's actually no negotiation that occurs at all. When we asked them what the laws have said many of them have said, "Well, the laws aren't really relevant to us. The laws don't have any relationship to what we're paid. Only the government workers get that," or in some case the trans-national workers or in other places it was the overseas aid agency workers were the ones that got the legal minimums, but the general population of workers didn't. Another discussion that we've had in these sessions with workers has been around, "Okay, it's great that you've told us that these are our rights and entitlements, but if I've accepted this job, I accepted this job for $8 an hour, so I have to live with that, don't I?" That's what - "because I accepted those conditions. Then I have to live with that," and we've had to have discussions about that in terms of the Australian context.

PN453

Another discussion that we've had in these sessions has been students in the classes saying to us, "This presentation about rights of workers is really depressing, because now we just know how badly we're being ripped off, but there's nothing we can actually do about it. There are no other jobs. If we ask the boss to pay us better we'll get sacked. So all this information does is make us feel depressed." Is this the kind of society we want to have where the law is irrelevant, where the best you're able to get is what you can negotiate with what you have? Do you have to accept this minimum because it's what you agreed to at the beginning, or do we want an environment where we have strong minimums in place, access to information, support, training and other things from our unions and someone who's checking up that the agreements that we have signed up to are really complying with the minimum laws of this country? Thank you.

PN454

JUSTICE GIUDICE: Thanks very much. Mr Bromberg?

PN455

MR BROMBERG: Thank you, your Honour. Your Honour, I've got a small contribution to make in relation to the default subclause of the draft superannuation clause. I appear for State Superannuation Pty Ltd. It is a South Australian based not for profit industry fund jointly owned by Business South Australia and SA William. If the Commission pleases, my client has filed a submission and in its submission it has indicated that it is interested in the exposure drafts that are listed in paragraph 2 of its submission, namely clerks, hospitality, manufacturing, racing, retail and then the superannuation clause is included in the Coal Mining Industry Award. It would also be interested in that award.

PN456

As I say, my client's concern is in relation to the default subclause to the superannuation fund clause. State Superannuation is named in at least 30 common rule awards in the industrial awards of South Australia as a default fund. Most of its 25,000 contributing employers are covered by NAPSAs based on those common rule awards. A failure to provide for State Superannuation to continue as a default fund will substantially alter the status quo and prejudice the interests of both employers and employees concerned.

PN457

The nub of my submission is centred upon the wisdom of preserving the status quo. I think that that is the general approach behind both the ACCI submission, the ACTUs submission and also the submission of the AIG, although they take a somewhat different approach to the form of the clause. We would urge the Commission to resist resiling from the status quo to any significant degree. If that is to occur, it ought not to occur at this juncture and if it is to occur, it should only occur by some later variation, should such a later variation be considered appropriate after a full and proper hearing of all relevant matters.

PN458

In other words, this is not the time and place at which potentially weighty public policy and public interest arguments should be ventilated. If they are to be ventilated they ought be ventilated properly and fully and that might require consideration of those matters at an award by award level. My client does not seek to be either advantaged or disadvantaged by this process. It says that its position as a default superannuation fund is a position which it has gained after considered decision and its basic position is that that position ought not be altered without a further considered decision being made and some proper basis being established that it will not relevantly continue as the default fund in relation to those workplaces in which it is currently the default fund.

PN459

Now, we look at the ACTU draft and, save for one exception that I want to go to, it would seem to my client that the ACTU draft and in particular subclause (3) of the ACTUs draft is preferable and preferable to those that are put up by other bodies who also, in essence, support the status quo because we think the ACTU draft better reflects a provision that would maintain the status quo. We don't take the position adopted by Sun Super, for instance. We agree with the ACTU position that the status quo be reflective and ought be reflected as precisely as possible, including with the patience that would come with the ACTUs proposal being both the geographical and occupation or industry based limitations that we've set out in the schedule.

PN460

That from our perspective is a logical and consistent basis. It would affect the approach of the Commission in analogous situations and in our respectful submission the long standing approach of the Commission's situation analogous to this take a cautious and conservation position based on the status quo and allow for any change to be dealt fully by arguments at a later time, and I have in mind, for instance, the award principles of the Commission and other long standing principles of that kind which from time to time have had a role to play. Just before I leave the ACTU draft, can I make one comment about one matter that we disagree with and that is the requirement in the opening paragraph of the superannuation fund clause which would require the employer to make application to join the superannuation, the default superannuation fund concerned.

PN461

My instructions is that, at least insofar as my client is concerned, there is no necessity for an employer to make such an application and we think that that provision or that part of the provision is superfluous, but we're certainly willing to be involved in further consultations if further clarity is required. Now, in order to maintain the status quo and obtain it on a proper basis, it's our position that the existing default fund should be named and my client has a very strong preference for the naming of the schedule of the default funds as opposed to a clause that simply says, all those default funds to which an employer was contributing before a particular date should continue to be a default fund.

PN462

The current position, the status quo, as that those defaults are named ..... there was an advantage, an advantage in relation to new employers and also an advantage in relation to new employees whom are, to some extent at least, may leave the choice of the fund to the employer, but do so in the knowledge that the default funds are named and on a proper understanding of who those default funds are, those employees, they will be happy to leave the appropriate choice as between default funds to the employer. Default funds aren't named. That capacity is removed and default funds are affected by a grandfathering clause that does not deal with new employers and the status quo does deal with new employers. The status quo should be maintained in full and in that respect, as I've said, the best way of doing that is by adopting subparagraph (c) of the ACTUs draft.

PN463

Finally, we would also agree with the ACTU that a clause in the form that it has proffered would not offend section 576T of the Act. That section insofar as it's talking about terms and conditions of employment, in our respectful submission, is not dealing with the matter ancillary to those terms and conditions of employment such as the nomination of an employee's agent either for purposes of superannuation or for the purposes of payment of wages into a bank or some other agency arrangement of that sort. The underlying policy is that substantive terms and conditions ought to have a national basis and the creation of a schedule such as that identified by the ACTU, despite the fact that it may refer to geographical areas, does not in any shape or form in our respectful submission infringe upon section 576T is directed to. In any event we note that 576T(2) allows for an exemption for up to five years.

PN464

Unless there are any other matters, those are the submissions my client seeks to put, if the Commission pleases.

PN465

JUSTICE GIUDICE: Thank you, Mr Bromberg. Yes?

PN466

MR CLARE: If the Commission pleases, I represent ASFA, for the Association of Superannuation Funds of Australia.

PN467

JUSTICE GIUDICE: Yes.

PN468

MR CLARE: My name is Ross Clare and I'm director of research at ASFA. Amongst our membership we have all categories of superannuation funds, public sector funds, industry funds, corporate funds, retail funds and service providers to them. So in effect our association represents all current and future default funds. I'll keep my comments brief as we rely on our previous written submission of 10 October and today the issue of default funds and superannuation has been something in their current form.

PN469

We believe that it's in the best interests of all parties for either employers and employees to be free to make their own arrangements in relation to default funds, or that the status quo of current default funds be maintained. The reasons why we consider this to be the case is that changes to default arrangements will almost certainly disrupt arrangements within individual workplaces and this will happen on a number of levels. Default arrangements have come out of past negotiations between industrial parties and shouldn't be revisited lightly. On a practical level, as has already been mentioned this afternoon, their necessity to hand out choice forms if a new default came into effect for an employer, the experience with defaults is that a large majority go with defaults. It is unrealistic in respect of high levels of exercise of choice by employees and it would be quite likely that existing employees would have their already existing superannuation account, and through new default arrangements contributions would be made to another default fund.

PN470

We already have too many duplicate accounts within the Australian superannuation system, too many lost accounts, and having an arrangement where there could be some hundreds of thousands, perhaps up to a million new accounts created through changes to super arrangements would lead to less satisfactory outcomes for all employees. They would end up paying two lots of fees, potentially losing contact with one of the funds; there would be increased administrative burdens on employers from making multiple payments and also handing out the Choice forms and dealing with that process.

PN471

We also think that the regime of the status quo should apply to both existing and new employees, in that if a fund is appropriate for an existing employee it should also be appropriate to any new employee of that employer.

PN472

We also say that an employer should be able to make use of one default fund in a primary sense, rather than default funds relating to pre and post 12 September of this year. Similar to the other reasons that I’ve put forward, this will help reduce costs for both employers and employees; it will enable funds to better tailor their services to that employer, and that can be done through a variety of ways including the provision of seminars, educational material, even general advice provisions in some circumstances. It may also allow the employer to negotiate more effective group life insurance arrangements for the employees concerned.

PN473

So in summary, ASFA is very supportive of the proposals that have been put forward to the Commission today for the effective maintenance of the status quo in the area of the superannuation default funds. As people and organisations have worked thorough the implications of changes to the default arrangements, as would occur with the majority of the draft superannuation clauses within the exposure awards, the more it becomes clear that there would be difficulties, cost inefficiencies and potential disputation within the industrial setting through such changes. So unless you have any questions, that’s our submission.

PN474

JUSTICE GIUDICE: Yes, thank you. Are there any other employer submissions? No? Yes, Mr Broanda

PN475

MR BROANDA: Thank you, your Honours, I shall be brief.

PN476

JUSTICE GIUDICE: Thank you.

PN477

MR BROANDA: I appear for both the Australian Workers Union and the Australian Workers Union of Employees Queensland. Your Honours, there are just a couple of things that I wish to touch on very briefly. The first, in relation to the superannuation issue that has been canvassed today, both the AWU and the AWUEQ support the submissions of Sunsuper through Mr Herbert unreservedly. I can’t take it any further than Mr Herbert has.

PN478

In relation to the issue of, there was a matter raised by Mr Slevin on behalf of the CFMEU in relation to parties’ names in documents, particularly in relation to the General Mining Award. I don’t wish to take that matter too far in relation to that specified award because that’s a matter that will be dealt with tomorrow, but in general terms there was an issue raised about union rules and representation orders arising under section 133 of schedule 1.

PN479

We reject that proposition. However if the Commission were to give weight to it, we would simply remind the Commission that there are representation orders available under other areas of the legislation, which many of the members of the current panel would be familiar with as a result of proceedings over the last 18 months.

PN480

Your Honours, finally in relation to apprenticeships and traineeships, the AWU has submitted some draft clauses for the panel’s consideration. There have been comments this afternoon from the CFMEU as well about whether competency based training arrangements should be included or whether alternate, outdated, in my submission, provisions should be included.

PN481

The reality is, your Honours, that competency based training has been a central part of the training arrangements in Australia for more than a dozen years now. It was a concept introduced in the early 90s. It is a concept that is supported on both sides of the political divide. It is a concept that is supported by both unions and employer associations.

PN482

It is, in my submission, almost ludicrous to seek to continue to apply outdated wage progression arrangements and entitlements for apprentices and trainees, in light of more than a dozen years of competency based training arrangements being not only prevalent, but almost exclusive in Australia.

PN483

There are very, very few training arrangements that are non-competency based training and where they are, they are applied in a very small geographical or industry based manner. The overwhelming majority of training that is conducted in the country, no matter where you are these days, is competency based training.

PN484

The AWU, as well as the Queensland Department of Education and Training and the Arts, has presented a draft clause that might be applied and adapted, where necessary, across all of the awards; not just the priority awards, but in each of the awards.

PN485

In the AWUs submission there is no time like the present to update the apprenticeship and traineeship industrial entitlements. In terms of award modernisation, as I’ve outlined, competency based training has been around for more than a decade and it’s time that the industrial arrangements acknowledge that and support that. It’s a very simple way of achieving that through those clauses that have been submitted.

PN486

As I said at the outset, I won’t take up too much of the Commission’s time. Otherwise the AWU, save for those matters that I’ve touched on now, supports in general terms the submissions of the ACTU and can assist the Commission no further.

PN487

SENIOR DEPUTY PRESIDENT ACTON: Mr Broanda, do you intend to make submissions in respect of the Manufacturing Award?

PN488

MR BROANDA: Thank you, your Honour. There are a couple of matters - - -

PN489

SENIOR DEPUTY PRESIDENT ACTON: I’m not asking you to do so now. I’m just asking whether you’re going to when we get to it.

PN490

MR BROANDA: There will be some submissions. I don’t believe that the AMWU and the AIG are proposing their draft apprenticeship and traineeship clauses for that award apply universally. In the event that I’m wrong on that and they are proposing that, there are significant problems with the clauses.

PN491

There is outdated terminology. There’s a reference, for example - and these are agreed clauses - in the definitions to Queensland State Training Council, then called the Vocational Education and Training Employment Commission. That entity hasn’t existed since 1991 so there are problems within this clause, problems that can be addressed by the parties fairly quickly.

PN492

In terms of whether we will provide in depth apprenticeship and traineeship comments in relation to the Metals and Engineering Award, there’s another official, there’s another advocate of the AWU that will be present during those proceedings. I’ll certainly be having discussions with that person.

PN493

Unfortunately apprenticeships and traineeships in terms of priorities usually find their way down the line and other matters generally take precedence over those issues, but I’ll certainly be having discussions internally within the union to ensure that those matters are raised. Does that answer the question, your Honour?

PN494

SENIOR DEPUTY PRESIDENT ACTON: Is it your proposal that the general competency based training clause that you’ve drafted replace the apprenticeship provisions in the current Manufacturing Award and proposed by AIG?

PN495

MR BROANDA: Sorry, yes it is, your Honour. In those awards in which we have a presence, that is the preferred clause that the AWU has presented. It’s certainly not necessarily agreed as amongst all the parties. There needs to be discussions in relation to apprenticeship and traineeship issues, which haven’t occurred yet.

PN496

Your Honours may be familiar with some submissions from the AIG in writing and I believe again today, that discussions are scheduled as between the peak councils but not until the first week of November. So I’m probably not speaking out of school in saying it’s a matter that the parties really haven’t sat down and discussed in any great detail.

PN497

The AWU raises it as an issue in light of the comments from the Full Bench about whether or not there should be external training arrangements by way of a national training wage award, or whether industry-specific arrangements should form perhaps a schedule to each of the modern awards. We say the latter is appropriate in that in adopting the approach that I’ve presented to a couple of the members in various industries over the last few months, of the AWUs approach being that the award should be as much as possible a one stop shop.

PN498

The AWUs position is that apprenticeship arrangements should form part of that industry award and in terms of the manufacturing industry award, we propose our draft clause as being a preferable clause to that presented by the AIG and the AMWU. But I don’t wish to dwell and to go into that industry specifically, given this is a matter for general importance, but there are other problems with it in that for example, the clause provides what wage rates are to be paid post-apprenticeship, which the AWUs position is that once the apprenticeship ceases then the general body of the award otherwise takes over.

PN499

It would be inappropriate to have post apprenticeship industrial arrangements contained within apprenticeship clauses. Again, these are matters that will need to be developed during the metals and engineering specific day. But hopefully I’ve answered your Honour’s question.

PN500

SENIOR DEPUTY PRESIDENT ACTON: Thank you.

PN501

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

PN502

MR WATTS: Thank you, your Honour. Your Honour, the Industry Super Network, they jointly have 38 industry super funds who aren't . superannuation funds, and I just want to address the issue of default funds exclusively if I may. On 1 August the Industry Super Network provided written submissions to the Commission. These submissions supported the continuation of named default funds and raised a number of policy issues. In addition the submissions highlighted the relevant performance of industry super funds relative to other performance of funds and I won't go into that any further today. In short, I know that we're running a little short of time, the Industry Super Network supports the submission of the ACTU in regards to these matters and in particular the proposed clause that's found in annexure B in the ACTU submissions.

PN503

We note that the submissions of the AI Group at paragraphs 170 onwards are consistent with our views. Before we go any further I just want to clarify, I think there's one issue I think regarding the terminology that's been used by some of the parties today. Just to clarify, when people are using the term default funds I think there's a number of - there's some confusion in some people's minds as to what a default fund is, and when I'm using the term default fund at this point in time I'm using it in the context of the industrial context, that is, the named fund within an award or a NAPSA. Others might be referring to it as a default fund in the context of these superannuation - the legislation that's been referred to. It might refer to a default fund that's nominated by an employer as a result of an employee not exercising their choice within the Act.

PN504

So there is some confusion and I think it's an important point to make. There will be I think some clarification from some parties of what their views may be. We believe it's entirely appropriate that default funds be nominated and named within modern awards. We believe that the default fund should be named and should reflect the status quo, and our submissions are not too dissimilar in terms of the submissions that Mr Bromberg made a little while ago. What we believe is appropriate is that the status quo, that is the industrial status quo regarding the nomination of default funds within existing federal awards and the NAPSAs should be reflected within modern awards, and consistent with the ACTU and others I believe that they should be named in the schedule or whatever form is appropriate.

PN505

But importantly, that the jurisdictional limits and boundaries that currently apply should continue to apply. We recognise the submissions of Sun Super. We recognise and support a lot of what they've said. In relation to the ability or otherwise of the difficulties associated with geographic or occupational limitations being recognised within an appendix to awards, we don't believe would face significant difficulty. But certainly while there might be some ambiguity, no more so than applying to the current jurisdictional limits that would apply to respective industrial instruments that currently provide a default fund given the current rights.

PN506

Our submission also should be taken in another context of the existence of choice. The choices, the rights for an employee to choose a fund as long as it's a complying fund still applies. We do have a recognised - the fact that most people tend to agree to that, whether it's 85, 90 or 95 per cent, and we'll get various figures of people that do not exercise that choice and that's important to note. We understand that a lot of employees are disengaged from choice from the issue of superannuation particularly when they're initially employed. We also support the general principle that the choice of the default fund named in the modern award principally is a matter for the industrial parties, that those parties have in the past played an active concern and interest over what would be an appropriate fund for the industry. Historically they have named funds within those Metal Awards that have performed relatively well.

PN507

The Commission has received a number of submissions in particular from Retail Master Trusts and others representing the interests of retail funds, and you've heard from representatives of the financial services industry. I just note that there is on all sides some self interest in these matters, and I think what is important is that we say that the existing arrangements which in part should continue to apply, that we believe they are in the best interests for the members of those funds, the employees and indeed anticipated employers. There has also been an issue raised about account duplication, that there's a possibility of the naming of funds in an arrangement where employees have chosen a different fund and the naming in a new modern award a new fund might cause duplication of accounts.

PN508

We don't believe that the existing status quo was reflected, including ..... that shouldn't be a problem. Insofar as it is, the Commission should be aware that the federal government has made certain announcements regarding its intention to introduce auto consolidation on funds, that is, non active superannuation funds in the future. The exact process and means by which that occurs hasn't been finalised as yet, but the government has certainly made its intention clear that where there are multiple superannuation accounts there will be a process of auto consolidation to the most active recent account. They've announced today that they were using ..... That process itself should dramatically reduce the number of multiple superannuation accounts.

PN509

The Investment Financial Services Association and Financial Planning Associations consider the claim to be in the public interest. We say that that submission is contrary to the case, but also surprised because those submissions go to the question of fund performance. Insofar that fund performance is relevant to these matters, the Commission should take account of the regulator in relation to this and the regulator in recent days, APRA, has released a study which deals with the relative under performance of Retail Market Trusts going to other types of funds. What they found in that study is that it's a systemic problem within the Retail Master Trusts, that being high fees and commissions, and those have affected the net performance and benefit to employees.

PN510

But we say that the best way to recognise that is to not delve into those issues but to continue with the existing arrangements which do by and large in terms of naming the default fund, name those funds which the industrial parties agree would be appropriate. We do say that in the event - reflecting Mr Bromberg's submissions, that in the event that the Commission is mindful of the change in existing arrangements this isn't the time or the place, that there are indeed, as been put by a couple of people, these are the main issues that need to be considered. We believe that they are matters for another time and place. But what this Commission should do is reflect the existing status quo, at least done in the context that it is an option for an employee to choose something other than those named default funds through the exercise of choice, and that is available to them.

PN511

That is indeed why some of the funds have made representations to you today that members outside their jurisdictional fund do not ostensibly exercise choice. At this point I - - -

PN512

SENIOR DEPUTY PRESIDENT ACTON: Mr Watts, the ACTU has a provision about the employer making application to join the fund. Is that necessary?

PN513

MR WATTS: We believe it provides certain benefits to the as we have detailed in our submissions. It's not strictly necessary for the fund but there are administrative advantages both for the employee and the employer if they do so. So in that sense we support the clause that accommodates, that does require .....

PN514

SENIOR DEPUTY PRESIDENT ACTON: Thank you.

PN515

JUSTICE GIUDICE: Yes. Are there any other contributions? Very well. In that event we shall - just before we do adjourn, I take it that no one here at least wishes to raise anything in relation with the program that I tentatively outlined earlier? Very well, that's the program that we will maintain. We'll adjourn now until 10 in the morning.

<ADJOURNED UNTIL TUESDAY 21 OCTOBER 2008 [4.40PM]