EM2009/3, Transcript of Proceedings [2010] FWATrans 1752 (13 December 2010)

TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 32777-2

VICE PRESIDENT WATSON
DEPUTY PRESIDENT IVES
COMMISSIONER ROBERTS

EM2009/3 C2009/11424

Sch. 6, Item 4 – Application to make a modern award to replace an enterprise instrument.
Sch. 6, Item 5 - Application to terminate an enterprise instrument.

Yum Restaurants Australia Pty Ltd
(EM2009/3)

Shop, Distributive and Allied Employees Association
(C2009/11424)


Pizza Hut - SDA National Employee Relations Award 2000

(ODN C NO. 21897 OF 1991)
[AP792506 Print ]]




Sydney

10.09AM, TUESDAY, 30 NOVEMBER 2010

Continued from 29/11/2010

Reserved for Decision

PN1

VICE PRESIDENT WATSON: Mr Kite.

PN2

MR KITE: If the tribunal please. Could I begin by giving the references in relation to those cases that deal with likely effect, likely impact and so on. I apologise we don't have copies of these. If the tribunal needs copies, by all means let us know through your staff and we'll provide them. The first is TNT v Brooks 23 ALR 345. It's in the High Court. It's a negligence case. At page 349 at line 40, Gibbs J, with whom the majority agreed, refers to the difference between criminal and civil standard, and the absence of direct evidence of the fact, and facts from which inferences can be drawn. I'll attempt to be brief with the quotes, but he says:

PN3

In questions of this sort where direct proof is not available, it is enough if the circumstances appearing in evidence give rise to a reasonable and definite inference, and must do more than give rise to conflicting inferences and equal degrees of probability so that the choice between them is a mere matter of conjecture. But if circumstances are proved in which it is reasonable to find a balance of probabilities in favour of the conclusion sought, then though the conclusion may fall short of certainty, it is not to be regarded as mere conjecture or surmise.

PN4

That's at 350, point 6. Next is another High Court decision, West v Government Insurance Office of New South Wales [1981] HCA 38; (1981) 148 CLR 62. Again it's a negligence case. At page 66 commencing at the top of the page, their Honours refer to the absence of evidence of an expert nature as to the cause of the collision - motor vehicle case. They say at about line 6:

PN5

To arrive at conclusions as to relative speeds on impact, bearing in mind all the variable factors, including the masses involved, the angle of impact, the movements of the cars from first impact until they came to rest and the friction forces at work throughout, seems more akin to conjecture than to inference. It is not insignificant that members of the Court of Appeal, in attempting to draw inferences from these facts, reached opposing conclusions.

PN6

His Honour then refers to an extract from the judgment of Dixon CJ in Jones v Dunkel, and a further quote to the effect that:

PN7

The law "does not authorise a court to choose between guesses, where the possibilities are not unlimited, on the ground that one guess seems more likely than another or the others. The facts proved must form a reasonable basis for a definite conclusion affirmatively drawn".

PN8

In terms of industrial applications of those principles, and the cases I'm about to refer to illustrate again different circumstances require different considerations as to the level of proof. They've drawn a distinction between speculation and reasonable inference from proved facts. The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Luxottica Retail Australia Pty Ltd [2009] FCA 608; (2009) 185 IR 164. It's a decision of the Federal Court, single judge. It's concerns a ballot to implement a workplace agreement, and whether or not the employees had a reasonable opportunity to sign and whether there were breaches of civil penalty provisions under the act in relation to the provision of misleading statements by the employer.

PN9

At paragraphs 31 to 34, his Honour refers to Jones v Dunkel, West v Government Insurance Office and seeks to apply those principles, and in paragraph 34 he says:

PN10

In short, the court is, on the evidence, unable to find that "there is information available to the employee which has the capacity to distract him or her on voting on the agreement and from considering its actual effect" without knowing whether the employees knew of the content of the award. More than mere conjecture is required to establish the facts relied upon in order that the court might grant relief.

PN11

His Honour then refers to TNT Management v Brooks and West v Government Insurance Office.

PN12

Another decision of the Federal Court also dealing with reasonable opportunity to sign and reasonable or likely effect of misleading material is the Shop Distributive and Allied Employees Association v Karellas Investments Pty Ltd No 2, again a decision of a single judge of the Federal Court Graham J. I refer the tribunal to page 62, paragraph 54.

PN13

DEPUTY PRESIDENT IVES: What was the reference?

PN14

MR KITE: I'm sorry[2007] FCA 1425; , (2007) 166 IR 51, and at page 62, paragraph 54, his Honour refer to the issue, reasonable opportunity to decide, likely effect. At 63, paragraph 56, he refers to the submission about absence of evidence and the strength of that. At page 71, paragraph 97 he says:

PN15

In my opinion, absent any evidence that the making of any false or misleading statement to another person or persons caused that other person or persons to vote to approve the 2007 agreement, a "fair inference of fact" that the making of the false or misleading statement or statements relied upon caused the person or persons to approve the 2007 agreement would not be available.

PN16

His Honour then goes on to say it's quite possible the causal link is lacking and so on. That matter was the subject of appeal or that decision was the subject of appeal and cross-appeal, and the Full Federal Court dealt with it in Allied Employees Association v Karellas Investments Pty Ltd [2008] FCAFC 42; (2008) 166 FCR 562, in particular at paragraph 40 of that decision where their Honours deal with the appropriateness of the conclusion as to likely effect and the absence of evidence. They again make the point that circumstances will vary from case to case and the level of proof, I should also on that perspective refer the tribunal to paragraph 54 on page 577 in which their Honours held that in another context, it was reasonable to infer that the material had an impact of the requisite kind. So in one circumstance not, in the other circumstance, it was enough.

PN17

They vary of course, and it's a matter of considering the nature of the jurisdiction obviously, the nature of the question that the tribunal in this case has to consider, that is that the impact on the competitiveness of the parties, and the nature of the evidence which exists which may allow the tribunal to draw inferences one way or the other. Our submission is there's really no evidence that allows the tribunal to draw an inference that the making of this award will have an unfair competitive effect on other people, employers, regulated by the Fast Food Industry Award.

PN18

VICE PRESIDENT WATSON: The High Court dealt with significant impact in the Coal and Allied litigation in relation to the Workplace Relations Act; significant impact on the economy was an important part of it, but the assessments made at first instance and the approach on appeal and the interpretation of similar phrases are there, but these are not terms of art. These terms exist in the legislation and are interpreted in their context as they relate to the evidence before the tribunal.

PN19

MR KITE: Indeed so. The point of that is to say that although the level will vary, there has to be at some point some evidence which allows the tribunal to come to a satisfactory affirmative conclusion none way or the other. If there isn't, then it's a choice between competing alternatives which is no proof at all. It's mere conjecture.

PN20

VICE PRESIDENT WATSON: It's one of the considerations to be taken into account to the extent that there is material to base any - - -

PN21

MR KITE: Yes, it's a balance.

PN22

VICE PRESIDENT WATSON: - - - conclusions.

PN23

MR KITE: It's a balancing proposition, but as we see the case being run against us, there are really two points. One is that to make this modern enterprise award would give Pizza Hut a competitive advantage in the fast food industry. We may debate the extent of the fast food industry in which Pizza Hut operates and what its true competitors are, and I'll come back to that, that's one point. That's made against us, and the other seems to be that the fast food industry sets a safety net of minimum rates and conditions, and that safety net should apply to everybody. They're really the two points that are made, and the second underpins the first in terms of making out the point about competitive advantage. If there is a different safety net, then there must be a competitive advantage. It doesn't follow. I'll say why dealing with those submissions.

PN24

Could I deal first with document B to Ms De Martino's statement, exhibit F9. There are two copies of document B1 dated 1 August, and the other 10 October. Could I deal with I think the 1 August document, because that was I think the one my learned friend referred to in his submissions. In any event, one can find the comparative paragraphs in both documents. He referred to paragraph 6 to indicate that the submission was made on behalf of a number of entities, including Yum Restaurants Australia. One would also note Eagle Boys Dial-A-Pizza and Hungry Jack's, and Australian Fast Foods, and other operators within the fast food industry.

PN25

The point of taking the tribunal to this is firstly to indicate what the AI was defining as the fast food industry from its perspective, not necessarily to suggest that their submission was accepted. Indeed the inference is it was not, but the next reference was to paragraph 41. This is on page 14, dealing with the nature of the fast food industry, reference to the range of factors that differentiate the fast food industry from any other industry. Particular submissions seek to distinguish hospitality and retail, and 42 refers to attachment 1, being the IBIS industry report on takeaway food retailing. It's a general industry report on takeaway food retailing. Note the difference in terminology - takeaway food retailing and fast food industry.

PN26

In paragraph 44, my learned friend says that the report identifies salient features, 21,000 enterprises, 250,000 employees across Australia; 32 to 45, the report provides a comprehensive analysis of the major and new entrants. If one goes to pages 32 to 45, one sees McDonald's, 50,000 employees, 750 outlets; Pizza Hut, KFC, Hungry Jack's, Domino's in descending order of size of quick service feature. Paragraph 45 lists a number of common features of the industry: food being served quickly; food able to be consumed on or off the premises; business operate under a common trademark, franchise. Often this means the products, menu, decor, marketing, uniforms, processes are the same for all franchisees. Standardised products and specifications of food, multiple locations, predominantly employing young people, providing entry level training opportunities, providing extensive internal training and opportunities.

PN27

Pausing there, you can see that what the AI is referring to as the fast food industry is the quick service food chains, not Bruno's takeaway food shop on the corner. The features of the industry so described don't apply to Bruno. Paragraph 46, the industry generally cooks and prepares the food it sells, and they refer to the transformation of food and beverages before sale. Some criticism was made that Mr Wallis was seeking to distinguish the Pizza Hut from the fast food industry. That's an incorrect interpretation of Mr Wallis's evidence, in my submission. Mr Wallis is indeed describing many of the features of the quick service food chains. What he's doing is saying, "This is a feature of the quick service food chains industry. It differs from retail shops serving takeaway food in many respects."

PN28

Those respects are in common with what's made out in this submission, because we're both talking about the same sort of industry. That is quick service food chains, and the point that Mr Wallis makes is that the transformation of food - raw materials come into the back of the store, the food is prepared and cooked on the site as opposed to the corner shop, which has delivered from a wholesaler particular types of products which need to be heated at the front of the shop or cooked in some other way at the front of the shop, and immediately sold. There's not all that investment in food preparation on site as there is in the quick service food chains.

PN29

Paragraph 49, the range of functions mean the staff work as a team and are multi-skilled. Again that's a characteristic of the quick service food chains, not of the corner store. Paragraph 50 gives the example of McDonald's, and paragraph 51 refers to the operating requirements and job classifications as being specific to the industry. So this submission throughout draws a distinction between the corner shops or the high street shop and the quick service food chains. When it uses the term "fast food industry", it's referring to quick service food chains. Indeed many of the SDA witnesses used the term in exactly the same way. The tribunal might recall I asked the witnesses when they use the fast food industry, are they referring to the quick service chains. They're the ones they visit most often, they're the ones they service, they're the ones they're talking about. There is a distinction.

PN30

VICE PRESIDENT WATSON: Where does that take you? Most of the quick service food chains seem to be covered by the Fast Food Award.

PN31

MR KITE: I'll come to that. Most of the quick service food chains seem to have their own enterprise instruments indeed or have entities associated with them, that is related companies, who do have them.

PN32

VICE PRESIDENT WATSON: You're going to come to that, are you?

PN33

MR KITE: I am. I won't delay the tribunal by reading all of this, but paragraph 53 again talks about standardised systems, and I'll refer to these paragraphs because they illustrate the point that I'm making. It's concentrating on the quick service food chains, not the fast food industry as ultimately defined under the modern Fast Food Industry Award which encloses both them and others. Paragraph 54, the staffing profile and the opportunities for young people; 55, the peak demand times; 56, the limitation on the ability to increase their prices. Then there's a reference to evidence from fast food operators, and although their statements are not attached, the tribunal will note that Mr Macclure is one of those, the same Mr Macclure who gave evidence in these proceedings.

PN34

There is then a summary of the industrial history. Paragraph 62 refers to the SDA's view that the fast food industry - that is as defined by this commission - was a new industry, and those quotes are included. At page 27 commencing at paragraph 68, the submission seeks to draw distinctions between the fast food and other industries, in particular first in retail. I draw the tribunal's attention again to paragraph 70.2 referring to the standardised processes, and 70.3, a significant development in the transformation of food. There's then a contrast with the hospitality industry commencing at page 29. Then under the heading What is an Appropriate Award under paragraph 32, the submission is directed to that topic.

PN35

At page 35, paragraph 90 and following, the submission deals with the origins of the National Fast Food Retail Award, and points to those origins as indicating that - indeed as - in accordance with submissions I made yesterday, it was confined in it is terms, dealt with a limited number of employers, and it ought not be the basis of the modern award. It's to be borne in mind that these submissions as they were in August 2008 and indeed in October 2008 were prior to the amendment of the legislation allowing for the making of modern enterprise awards. So this was the only alternative at the time. Paragraph 102, in particular 102.2, referring to the draft award advanced, it's submitted that in particular it reflects current terms and conditions which apply to the industry, caters for flexibility as required by both employers and employees, and I just remind the tribunal that one of the parties on behalf of whom this submission was made was Eagle Boys, because it was raised in discussion yesterday in particular.

PN36

102.3 refers to the importance of the loaded rate to the industry, and it refers to the agreements in attachment 5 not providing for weekend penalty rates. They incorporated part of the loaded rate, and so on. We don't have those attachments, but 102.4 refers to the intention not to disadvantage employees or increase cost to employers. The disadvantage, it is submitted, needs to be looked at beyond just rates. We embrace that - the submissions made about the employment of young people, the provision of employment opportunities, the provision of training and so on, and indeed the increased costs which distinguished this industry from the balance of the fast food industry.

PN37

They do invest in a lot of training for young people, not typical of the corner shop, even if they do employ. As the SDA evidence indicates, most of them tend to employ older people, whereas the chains have a predominance of youth employment. 102.6 deals with the introduction of penalty rate structures and the difficulty that would have for the fast food industry as defined in this submission. 102.7, the industry based on high-volume, low profit margins; very little scope, offset additional costs.

PN38

So when one looks at document B and compares it to what Mr Wallis says, it has to be seen that document B is dealing with the quick service food chains industry, part of the broader fast food industry as defined in the fast food industry modern award. So there's no inconsistency. We've accepted throughout this that real competitors are the other quick service food chains, but it's apparent from this submission for example that those chains do have similar features in their employment scheme, loaded rate in particular, other flexibilities in relation to part-time employment.

PN39

It is clear that the AI's submission that the draft award that was attached was appropriate to the industry, and that was not successful. We don't really know why, other than that the National Fast Food Retail Award was taken as the base award. It may be that, for example - I don't know - the tribunal have regard to the fact that many of these major chains had enterprise instruments which would allow them to transition over time or - one can't say or move to a modern enterprise award, because the decision was handed down before the amendments were made. But they would have those instruments that would provide a buffer and perhaps on review of the award to consider again the question of things such as loaded rate.

PN40

Document H deals with the proposition that a number of large fast food chains in Australia have come under the Fast Food Industry Award. Ms De Martino I think didn't prepare this. This was prepared by somebody else. She lists Domino's, although in exhibit F18, which is the other submissions on behalf of the SDA at page - - -

PN41

VICE PRESIDENT WATSON: My copy has a line through Domino's. It seems to be crossed out.

PN42

MR KITE: Is it?

PN43

MR FERNON: Domino's was amended.

PN44

MR KITE: Domino's was to be deleted, I see.

PN45

MR FERNON: Not to be deleted, it was deleted.

PN46

MR KITE: Was deleted. Eagle Boys is included, but of course Eagle Boys bought Pizza Haven, and Pizza Haven have, on the evidence, an enterprise instrument which is transitional. I suppose that will bring me to the argument between - my apologies.

PN47

DEPUTY PRESIDENT IVES: Your shout, Mr Kite.

PN48

MR KITE: It is, your Honour. Doing too many things at once. I was about to advert to the proposition that I'll come to about the submission made yesterday as to the extendability, as it were, of the enterprise instrument to employees not covered by - that is extension to Queensland not being open as a matter of jurisdiction. In my submission, it is obviously, and similarly organisations such as Eagle Boys who have acquired entities such as Pizza Haven become related companies and are in a position to extend their enterprise instruments or at least make application to extend; similarly Red Rooster and Chicken Treat.

PN49

So it's not entirely clear why what document H does in that these other entities for example have the opportunity to apply for modern enterprise awards. It's also apparent that Eagle Boys was part of a submission applicating for the loaded rate being common to the industry. So document H needs to be seen in the light of both the list in F18 and the list in K27, and indeed in K31, but in K27 at page 15 through to 20 of various industrial instruments reliant on standards under which employees engage in the industry, and in particular in relation to penalty rates.

PN50

So if not all of the industry, a very large proportion of it have the benefit of instruments which allow them at least during the transition period to maintain their loaded rate. If this instrument is not modernised, then except for those who have the benefit of industrial agreements which persist, operators in Pizza Hut will lose that advantage which they've enjoyed for many years. That will undoubtedly put them at a competitive disadvantage, because these terms and conditions as the evidence shows were tailored to meet the nature of the enterprise, which is Pizza Hut.

PN51

VICE PRESIDENT WATSON: Who is covered by the award, but not by an enterprise agreement?

PN52

MR KITE: The current award?

PN53

VICE PRESIDENT WATSON: The current enterprise award?

PN54

MR KITE: There would be transitions or transfers of business. Some outlets who have applied post-Work Choices wouldn't be covered by the award. They may have been roped in under section 558, they may have had an opportunity to get an industrial agreement, but not all of them have. Queensland is the prime example, but it's not covered by the award at the moment. There may be some additional outlets. I can't give your Honour numbers on that. But if a new outlet were to open tomorrow, it would be regulated by the Fast Food Industry Award, and it's obviously a factor - you can make up your mind whether that outlet is going to vote. If it doesn't, then employment opportunities and growth opportunities are lost.

PN55

That really impacts upon what your Honour was raising with our learned friend yesterday afternoon about the 2012 review. The intervening period is going to be a period without those advantages for Pizza Hut, notwithstanding that they've had them or 15, 20 years through their collaborative negotiation with - - -

PN56

VICE PRESIDENT WATSON: That franchisee doesn't; hasn't had those advantages. It's a new employer operating a new franchise. He's in the same position as a franchisee of Crust.

PN57

MR KITE: That's true. Pizza Hut as an enterprise has operated in that way, and if up until this point a new franchise would have been covered by these instruments, depending on where it was located of course, but the fact that it can't be covered by these instruments, if the instruments are terminated, then given the complexities of the BOOT test for this type of flexibility, we're not in a position to negotiate those sorts of conditions and have to operate under different conditions to every other Pizza Hut franchise.

PN58

VICE PRESIDENT WATSON: Lower hourly rates during the week for one thing.

PN59

MR KITE: Yes, that's true, which will give them a competitive advantage over other Pizza Huts and maybe over other quick service food chains during the week when the volume of trade is much less. There can't be any doubt that Pizza Hut regards this sort of regulation as of advantage to them. They argue it's also of advantage to the employees; not simply confined to rates, but taking into account the employment opportunities it creates, the training which goes into this type of industry to the employees, training which is in many respects portable and needs certificate II, III, IV qualifications as detailed in Mr Wallis's evidence, and indeed evidence from the SDA witnesses.

PN60

I referred to Mr Wallis's evidence in relation to document B. I won't go back to it, but paragraphs 12 to 20 are the particular paragraphs that one should look to, and see in the context of what he's distinguishing. He's not distinguishing Pizza Hut from other quick service food chains. He's distinguishing Pizza Hut in particular from other aspects of the retail fast food industry.

PN61

The submission was made at the outset yesterday that there was a restriction on the jurisdiction of the commission under schedule 6. The debate that occurred between the bench and our learned friend made most of the points that we would make as to the structure of schedule 6; that is the instrument qualifies as an enterprise instrument as found by the bench, and the fact that it applies to only part of an enterprise doesn't prevent it from being modernised, and the coverage provisions extending to the whole of that enterprise. There's nothing in item 8 for example of schedule 6 to suggest that the coverage provisions must be limited to the current employers. Indeed the fact that a specified class of employer may never know which coverage provision is expressed contemplates different employers may be embraced by the instrument; both at the time of making and afterwards.

PN62

But I wanted to go back to exhibit K33, the explanatory memorandum. Your Honour the vice-president asked my learned friend as to the context in which one was to see or understand the modern enterprise award's objective, and that context is made clear in our respectful submission by reference to the explanatory memorandum. There was also a submission that it would be absurd to have two minimum safety nets in one industry. Perhaps the term "industry" is going to vary, but the modern enterprise award objective in our respectful submission acknowledges that there may well be different minimum safety nets. Far from being an absurdity, it's an intention

PN63

The enterprise instrument modernisation process in paragraph 221 refers to the modern award's objective and the minimum wages objective applying; 222, the need of Fair Work Australia to recognise the particular role and nature of enterprise awards, and refers to item 6. 223 refers to the capacity of Fair Work Australia to inform itself as it sees fit, and its capacity to seek and consider submissions not only from those with direct interest, but also other interested parties. Then at 236, paragraph under the heading The Enterprise Instrument Modernisation Process, the intention to produce a new self-contained modern award that can operate effectively in the new workplace relations system, and such instruments are referred to as modern awards within the bill; 242, the need to balance all of the relevant criteria; 243:

PN64

For example, the criteria for Fair Work Australia to consider the circumstances that led to the making of the enterprise instrument and the extent to which the instrument provides enterprise-specific terms and conditions of employment.

PN65

Your Honour put to our learned friend yesterday the history, the involvement of the SDA and the change of the SDA's position of whether that was a relevant circumstance, he submitted not. We submit the contrary. It is a relevant circumstance indeed. It's what distinguishes these sorts of enterprises, those that have invested in developing tailor-made enterprise instruments in the past from other enterprises; a distinction that's found between schedule 6 and the act. One can't apply other than under schedule 6 for the making of a modern enterprise award. So it's the history which is a fundamental discriminating factor, and it is a very relevant factor for the tribunal to take into account that this instrument has been produced by collaborative negotiation over many years.

PN66

246 of course says that:

PN67

This means, for example, that Fair Work Australia is to give consideration to whether an enterprise instrument should be modified if it would otherwise provide the enterprise covered by it with a significant cost advantage or disadvantage compared to other employers in the industry, and so less than the competitiveness of that enterprise or of other enterprise or of other enterprises in the industry.

PN68

What that makes clear is that the word "replace" doesn't mean "replace" other than "That one has gone, this is the instrument that now applies." That's what "replace" means in the context of schedule 6. It doesn't mean that the tribunal is bound to adopt all of the terms and conditions of the existing instrument if it's to be modernised. It can be modified. There are other elements of the schedule which point to that, including item 7, which allows for increases to be phased in. Indeed in this particular case, what the tribunal has is a case on one side that postulates the modernising of an instrument, and the content of that instrument, including submissions as to increasing certain rates and conditions; for example, the loaded rate going to 8 per cent and the casual rate going to 25. That's different from the existing instrument, but it's open under this process.

PN69

Indeed on the other side, the argument is really the award shouldn't be made for two reasons which I referred to. No real submission on the content other than to underpin those two reasons; no alternative propositions apply. It's just to what would be appropriate. That's not to say if the tribunal was minded to modernise this instrument, but had concerns about one or two aspects of the proposal as advanced, it could not come back to the parties or seek further submissions on other modifications if the tribunal was truly concerned about whether it formed a safety net. Then once the parties are heard on that, the tribunal can then complete its decision-making process. Indeed as we understand it from F18, that was the SDA's position.

PN70

Can I next direct the tribunal's attention to the memorandum in relation to item 6 the modern enterprise award's objective. Paragraphs 254 embraces the objective itself. 256 requires Fair Work Australia to recognise that the instruments may have tailored terms, and 257 draws together the modern award's objective, the minimum rates objection, and the modern enterprise award's objective in that in the last sentence it says:

PN71

However, the minimum terms and conditions for a modern enterprise award may not necessarily be the same as those that apply in an industry or occupation-based modern enterprise award.

PN72

So the introduction of this amendment to the legislation and the introduction of these transitional provisions was done with the full knowledge and intent that there may be different minimum standards. 258 reiterates the concept of the developed employment arrangements, again the history, and 259 and 260 provided examples of where different conclusions might arise. So the legislation contemplates two different standards might exist. The question is in the light of all the factors, is the standard postulated by the modern enterprise award fair and appropriate. The fact that it's different is not a disqualifying feature. The case against us seems to be premised on that basis.

As I indicated, if the tribunal were otherwise minded to modernise the award but were concerned about a particular aspect, it is open to invite the parties to make further submissions on that aspect; including for example increasing rates or changing the minimum hours for part-timers or casuals or whatever. It's not necessarily the end of the exercise. It's not a take it or leave it proposition. It's certainly appropriate to balance all of those factors.

PN73

I know that the tribunal advanced those propositions, but when one looks at the case put against us, an inferential competitive advantage proposition, which really, we submit, leads only to conjecture and if one simply looks at breaks as opposed to the other aspects of the quick service food chains, in particular Pizza Hut, the investment and training and development of those people, provision of opportunities for employment for those people and the like, and the costs that are associated with that, they're costs that the retail fast food industry generally don't bear because of the nature of their operations. If they do employ, they tend to employ far fewer people. They don't have 40 or 50 employees in an outlet.

PN74

Otherwise it's simply said against us that the Fast Food Industry Award has been made. It's a level playing field, and that should be a disqualifying factor. If that were the case, that would be putting an end to the modern enterprise awards' objective. One needs to balance that factor with all of these other factors. It's clearly not a disqualifying factor. The legislature intended that there would be departures, differences in terms of the minimum rates and standards for modern enterprises as opposed to the industry or occupation award. That's to be looked at in the content of the industry, including in this particular case, its training and employment opportunities for young people.

PN75

We've prepared another document related to document A where there appears to be some errors of calculation. The tribunal might recall that I cross-examined Ms De Martino about her rostered hours calculation in respect of a roster associated with one of Mr Hosking's stores. We've discovered some errors in those calculations. Can we provide the tribunal with a recalculated page that I'll just indicate - - -

PN76

MR FERNON: I should indicate that I've just received this. So we wouldn't want the tribunal to be accepting it on the basis that there are errors.

PN77

MR KITE: It's intended to move it to like with like. The tables have been calculated for the various employees, including the last minimum rates adjustment for the modern Fast Food Award, but not the last minimum rates adjustment for Pizza Hut Award which has been put in place. So the differences are slightly different, as one can see from the amended calculations. The tribunal will also recall that there was speculation as to the grades of people. They are not necessarily the grades in which they're employed and should only be regarded as illustrative for those grades, not necessarily for those people. They're our submissions in reply.

PN78

VICE PRESIDENT WATSON: We might mark this, Mr Kite, exhibit K38.

EXHIBIT #K38 SUPPLEMENTARY SUBMISSIONS

PN79

MR KITE: If the tribunal pleases.

PN80

VICE PRESIDENT WATSON: Thank you for those submissions. We'll reserve our decision in that matter.

<ADJOURNED INDEFINITELY [11.04AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #K38 SUPPLEMENTARY SUBMISSIONS PN79