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Fair Work Commission Transcripts |
TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009 1047876-1
COMMISSIONER LEWIN
C2011/5217
s.739 - Application to deal with a dispute
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
and
SPI PowerNet Pty Ltd; SPI Electricity Pty Ltd & SPI PowerNet Pty Ltd
(C2011/5217)
SPI PowerNet & SPI Electricity - ETU Enterprise Agreement 2010-2013
(ODN AG2010/18953)
[AE882041 Print PR503536]]
Melbourne
10.01AM, THURSDAY, 21 FEBRUARY 2013
Continued from 18/09/2012
PN1372
THE COMMISSIONER: Good morning. Do we need to record the appearances again? I don't think so. Mr Borenstein and Mr Brotherson, is there any view as to how we should proceed? I have read the outlines. Will there be openings, or we go straight to the evidence?
PN1373
MR BORENSTEIN: I think we are happy to go straight into the evidence, Commissioner.
PN1374
THE COMMISSIONER: Sounds very efficient to me.
PN1375
MR BORENSTEIN: All right. I will firstly call Mr Hayes.
PN1376
MR BROTHERSON: I think we have also agreed, Commissioner, that the other witnesses should wait outside with the evidence is heard.
THE COMMISSIONER: All right. Anybody who is going to give evidence in this matter, apart from Mr Hayes, should now leave the room.
<WESLEY HAYES, SWORN [10.02AM]
<EXAMINATION-IN-CHIEF BY MR BORENSTEIN [10.02AM]
PN1378
THE COMMISSIONER: Go ahead, Mr Borenstein.
PN1379
MR BORENSTEIN: Now, Mr Hayes, could you please state your full name and address?---Wesley Hayes, (address provided).
PN1380
Thank you. Now, have you for the purposes of these proceedings prepared a witness statement?---Yes.
PN1381
Can I hand up a copy. Is that the witness statement that you have prepared for the purposes of these proceedings?---Yes.
PN1382
Have you read that witness statement recently?---Yes.
PN1383
And minus the – if you could turn to pages 74 to 75 of the document I just provided you.
PN1384
THE COMMISSIONER: I don't think I've even got them.
PN1385
MR BORENSTEIN: Sorry. I think it's on the one that I actually just handed up to Mr Hayes.
PN1386
THE COMMISSIONER: I see.
PN1387
MR BORENSTEIN: They are the ones that were included in his statement and was obviously rectified by the Commission. But minus those two pages, so from pages 1 to 73, are the contents of pages 1 to 73 before you true and correct?---Yes.
PN1388
I seek to tender that document, Commissioner.
**** WESLEY HAYES XN MR BORENSTEIN
PN1389
MR BROTHERSON: Commissioner, the approach I would propose to take is not to object per say to anything in the statement, but put a position that the Commission in the usual way should evaluate weight which should be afforded to any particular paragraphs. As an example, if I could draw your attention to paragraph 20 of the statement. We say that that would be inadmissible in the strict sense on any number of grounds on the basis of hearsay with the submission. It's extremely self-serving where you see in the third line it uses the words:
PN1390
It has been usual and customary for himself.
PN1391
Those words may have a particular meaning which will be drawn out in the submission, and I think their use there is contentious. So I just draw the Commission's attention to that.
PN1392
THE COMMISSIONER: I would interpret that to be that Mr Hayes is giving evidence that that is what Mr Pugh has said.
PN1393
MR BROTHERSON: That's right.
PN1394
THE COMMISSIONER: It goes no further than that. That would be my approach.
PN1395
MR BROTHERSON: The other I would raise at this stage, Commissioner, is I understand that my friend may take a view of objection of certain evidence that the company has put forward on negotiations. I can deal now with that issue if need be.
PN1396
THE COMMISSIONER: No. I think I'd rather deal with each statement as they go.
PN1397
MR BROTHERSON: But obviously the fact that we say that evidence ultimately will be allowed in the proceedings but perhaps on the same basis that I've just explained, we don't take any issue with what Mr Hayes says similarly about negotiations.
**** WESLEY HAYES XN MR BORENSTEIN
PN1398
THE COMMISSIONER: Very well, understood.
EXHIBIT #A8 WITNESS STATEMENT OF WESLEY HAYES
PN1399
MR BORENSTEIN: Thank you, Commissioner. And just on that point, we obviously in our submissions have made submissions that the evidence prime as part the majority is about negotiations and expectations and the like. And we say there is authority that would say that's not relevant. But for the purposes of proceeding, we have all filed evidence already so I'll leave that to submissions.
PN1400
THE COMMISSIONER: Well, it's what, as I understand it, lawyers would refer to as parole evidence. Is it not? In other words, evidence that would on the circumstances of a matter such as this only be taken into account if one couldn't find the meaning from the text. Using the purposive approach of the interpretation of the instrument.
PN1401
MR BORENSTEIN: We say it goes outside of what's allowed would take into account to interpret the document. I will go deeper into that in negotiations, but we say you can take into account historical contents and objective circumstances, but to take into account different parties' expectations, and intentions, and the negotiations has been held that's off limits. But I will go into it my later.
PN1402
THE COMMISSIONER: That particular question might still lend itself to a little bit more perfection. It seems to me that the issue imbedded within it is the difference between an objective evaluation of what occurs during a negotiating process, and the subjective views of individuals who may have been exposed to it. Which in my mind is a finer distinction. You can't even think about it. That might become relevant when we come to some of the submissions made by the company.
PN1403
MR BORENSTEIN: Absolutely, yes.
**** WESLEY HAYES XN MR BORENSTEIN
PN1404
THE COMMISSIONER: Because you obviously will be aware that they refer to some historical circumstances, which no doubt they would say can be taken in an objective view rather than a personal view.
PN1405
MR BORENSTEIN: We have tendered Mr Hayes' statement.
PN1406
THE COMMISSIONER: No supplementary questions?
MR BORENSTEIN: No.
<CROSS-EXAMINATION BY MR BROTHERSON [10.08AM]
PN1408
MR BROTHERSON: Mr Hayes, in paragraphs 9 and 10 of your statement you refer to negotiations for the 2007 agreement and the common law agreement. Can I put to you that in paragraph 10 you are referring there to I understand what is the proposed then clause 4.10 to go into the common law agreement?---Sorry, I'm just reading.
PN1409
Where you refer in paragraph 10 to the new clause, the new clause you are referring to there is to what became clause 4.10 of the common law agreement. Sorry, I'm taking you to paragraph 10 of your own statement. You say:
PN1410
This time I did not concede at any stage that the new clause was to operate in the same way as the previous clause 3.6.
PN1411
Now, when you refer to the new clause you're talking about the clause that went into the common law agreement in 2007?---At that stage yes, yes.
PN1412
And you say that at that time you didn't concede it would only compensate for the availability allowance only. And you go on to say that you told the respondent negotiators that the words speak for themselves. What did you say at that time that those words meant?---Well, they meant more than limiting any compensation to availability only.
**** WESLEY HAYES XXN MR BROTHERSON
PN1413
And did you ever tell anybody at the company that that was your intention?---In the context – I suppose in boasting about it, no. I mean, if words change in respect of from one agreement to another, I wouldn't be openly saying guess what, you know, there's a whole new set of words therefore this has opened up a whole new definition. I would have responded in respect of questions asked and I would have indicated the words speak for themselves. I wasn't going to put words in the company's mouth in terms of questions. I wouldn't negotiate like that.
PN1414
And nor did you put anything in writing about what you believe that clause to mean, did you?---No. Not that I can recall, no.
PN1415
And if I can take you then to paragraph 19 of your statement?---Yes.
PN1416
You are talking here about the 2010 agreement and the making of that, but you're talking about those words that now form clause 12 of the current agreement, correct?---Yes.
PN1417
And those words are identical to the words that were in the common law agreement on that issue?---My recollection is yes.
PN1418
So again, can I put to you about two thirds of the way through that paragraph, you say:
PN1419
My intention at all times was that the clause would operate to a particular situation according to the plain meaning of its terms.
PN1420
So again you have avoided, can I put it that way, actually stating what the clause means, haven't you?---Not avoid it. Certainly not. I mean, there are many situations in how you can interpret the clause and I would apply an interpretation to that depending on the situation. I mean, I couldn't guess back then 50 different examples of how the clause might apply. I couldn't do that. It's as simple as that.
**** WESLEY HAYES XXN MR BROTHERSON
PN1421
Well, can I take you then back to paragraph 11 of yours, and you deal there with the fact that you recall seeing a letter from Ms Russell of Clayton Utz which set out certain understandings as to the proposed clause 4.10 in common law agreement. You accept that's what that paragraph reads?---I can recall an email, something along those lines, yes.
PN1422
And you then say in paragraph 12 that at no time was that interpretation of clause 4.10 set out in exhibit A7 a mutual understanding. You say that?---Mm hmm.
PN1423
But you recall receiving the letter from Ms Russell?---Yes.
PN1424
Can I just show you a copy of that letter from Ms Russell. Actually, Commissioner, could I ask if Mr Hayes could be shown the Commission's copy of that letter? I just realised I have marked copy. So Mr Hayes, you will see in the first paragraph of the letter from Ms Russell, she says:
PN1425
Enclosed is the latest draft of the proposed common law agreement.
PN1426
So it's still a draft document, you accept that?---Look, if that's her language, look, I can't recall whether it was a rubber stamp version or what. If she says it's a draft, it's a draft.
PN1427
Can I then take you to the third paragraph there. I put to you that it says:
PN1428
We are instructed that there are a number of other terms which our client believes should be defined to ensure there is no misunderstanding between the parties about how a particular provision will apply. The union was concerned that including these additional definitions now after the negotiations have substantially concluded may delay finalising the approval of the collective agreement and this agreement. The union requested as an alternative our client set out the agreed practice on how these provisions will apply. This is set out below.
PN1429
**** WESLEY HAYES XXN MR BROTHERSON
So, Mr Hayes, was it the case that the union had requested that the company set out an agreed practice on how those provisions would apply?---It's not my recollection. I can recall a discussion in respect of having a chapter in agreements around interpretations, but it wasn't to take the shape of how this was put to us.
PN1430
But you received this letter, or Mr Borenstein receives it from Clayton Utz?---Yes.
PN1431
Mr Borenstein shows you the letter?---Yes.
PN1432
It's an important part of the negotiations at that time?---Yes.
PN1433
And the company's lawyers are putting to you that there has been a request to set out an agreed practice. You'd accept that an agreed practice would be something of a mutual understanding of how something would work in the ordinary sense of the words, wouldn't you?---Well, it might be the company's interpretation of that. It doesn't mean we agreed with the words.
PN1434
Well, that's not what I put to you. I put to you that in the ordinary sense of the words an agreed practice would be a mutual understanding between parties of how something is going to work?---But that wasn't an agreed document.
PN1435
I'm just putting to you a hypothetical proposition and you'd have to agree that makes sense, doesn't it? An agreed practice is a mutual understanding of what parties mean?
PN1436
MR BORENSTEIN: Commissioner, I object.
PN1437
THE WITNESS: I'm not trying to avoid the question. The history of the – sorry.
PN1438
MR BORENSTEIN: I just don't understand the relevance of what Mr Hayes' interpretation - - -
**** WESLEY HAYES XXN MR BROTHERSON
PN1439
THE COMMISSIONER: Well, it is a hypothetical proposition and ultimately a matter for me to determine.
PN1440
MR BORENSTEIN: Exactly.
PN1441
MR BROTHERSON: Now, you will see then that the company sets out in that letter 4.10 availability and allowances?---Yes.
PN1442
And it sets out there what it understands that clause to mean?---Yes.
PN1443
And it does so, you'd accept in the context of the letter, as being in answer to a request from the union as to the agreed practice of how those provisions would apply?---I disagree with the request from the union. And I'm simply not clear on that. I recall a discussion around interpretations of words, you know, practices and there were general conversations throughout all agreements we do in this industry.
PN1444
THE COMMISSIONER: Sorry. When you say you disagree, you disagree in the sense that you deny there was any request?---No. Leading up, during the negotiations, and of all the agreements I've been involved in in the power industry, there has always been question marks over some interpretations. And most the time they get settled, other times they don't. And sometimes in negotiations you have this well we read it this way, you read it that way. And other times you just leave it and let it take its natural course. In this respect I can recall conversations around clauses, and discussions about how clauses might apply, and we disagreed with the company on some interpretations on how they put it. So once we completed the agreement and then we had the deed, when we received the letter I can recall conversations around well, they're just trying to rewrite what was agreed. We agreed to a set of words, and now the company are trying to rewrite that by self by giving us this letter.
**** WESLEY HAYES XXN MR BROTHERSON
PN1445
Perhaps we could just make a distinction of my understanding and the meaning and purpose of my question. What is said to be sought by the union, by the author of the letter, is a description not of a meeting of minds in a conversation, but rather a description of the practice that is – quote – agreed. Do you follow the distinction?---I think what the company was trying to apply in terms of the definition of the clause, was the old words, not the new words that have been agreed.
PN1446
With respect, what I am interrogating on, and I understand you say that, is not the states of mind of the parties as to the proper interpretation of the contents of a document, but rather the letter should be construed as what the agreed practice was. i.e. what is the practical situation that has been – quote – agreed? Not something that's been agreed by the exchange of letters, or some sort of verbal consensus which describes what effect the agreement has, but what the practical situation is that has arisen under the circumstances to which the common law agreement applies. Perhaps if I just explain to you the origins of my question, that is something you have alluded to in your evidence. And that is in negotiations in the power industry there is always a lot of issues about what the position is of certain things. Now, correct me if I'm wrong – and please, if the representatives think this is something that shouldn't be brought into the picture – this idea of custom and practice or the agreed position around certain terms and conditions of employment in the industry basically goes back to its privatisation. And it goes back to the point where industrial instruments commonly included express terms to preserve existing custom and practice. Now, it may not be exactly as I have stated in there in terms of the words that are being used, but they are of a general nature and they were intended to deal with things that were in operation that weren't expressly catered for in industrial instruments?---That's correct, yes.
PN1447
Prior to privatisation that may well have been in parts of policies and procedures which the SECV had followed, or in some cases custom and practice that was very well understood in the industry. Is that correct?---Yes, that would be a correct statement.
**** WESLEY HAYES XXN MR BROTHERSON
PN1448
That's correct? That's my experience of my exposure to the industry over the years from the time of the privatisation of the SECV in Victoria?---Yes, yes.
PN1449
Now, as a consequence from time to time, you've said it has been necessary to try and address what the situation actually is?---Yes.
PN1450
In other words, what the parties have been prepared to live with by an agreement that may not necessarily have been documented, but it has been accepted, if you like, as a proper preservation of these particular matters that are not expressly provided for. Would that be true?---Yes.
PN1451
What I read that letter as saying, is you asked for what was actually happening on a consensual basis in the workplace in relation to this subject, i.e. the agreed position. Not as an agreed position that you personally or some other negotiator had reached with the company, but the status quo of agreement in relation to this subject matter. That's what I read that letter to say: that you wanted a record of what the actual state of agreement was in practical terms in relation to this question. Now, do you deny that you requested that?---No I don't, but what I say is – because I can recall, you won't get anyone more passionate about having things documented in the agreements because I went through the, I suppose, the Work Choices legislation, and there was ambiguity and all sorts of stuff written in agreements. So I was always stating throughout negotiations things have to be documented, things have to be documented. Now, at times during negotiations you didn't always get an agreement on how a clause might apply with the company. So sometimes you just left it and thought well look, we're just going to have to agree to disagree and we move forward without ripping up the whole clause. The company wouldn't agree to a set of words, we wouldn't, so we'd just leave the existing words. But this agreement in respect of this letter, and we obviously didn't reply in writing but verbally, we just got sick of keeping on saying well hang on, that's your view of the world, it's not our view of the world. And you can put it in a covering letter in attaching it to a deed, but the words in the deed are what we've agreed. And to come over the top and put a two page letter and say guess what, in respect of availability and allowances, we're going to interpret it this way. They're not incorrect in saying, you know, if the company says I've requested it, I would have requested a whole range of issues.
**** WESLEY HAYES XXN MR BROTHERSON
PN1452
I think it's a little bit further. My enquiry was really simply directed to whether or not you made a request to have the existing situation that was "agreed" described?---I don't disagree with the request part. You know, I would have requested a whole range of issues in the context of negotiations. I would disagree that how they interpret that new clause.
PN1453
I understand the distinction you're making. You say you may have requested it, but you don't accept that that was an accurate description of the agreed position?---Yes, that's correct.
PN1454
Mr Brotherson can cross-examine you on the second part of that.
PN1455
MR BROTHERSON: Mr Hayes, if I'd ask you to just look again at the third paragraph of the Clayton Utz letter. You will see in the second last sentence in the second last line it's worded as:
PN1456
Our client set out the agreed practice on how these provisions will apply.
PN1457
Now, you would have read that as into the new agreement, wouldn't you? Third paragraph on the first page, setting out how these provisions will apply. So it's not what's applied in the past, it's their view of the agreed practice going forward. You'd accept that's what is stated there?---That's how it reads to me, yes.
PN1458
And if we go to the back page of the letter, page 2 of the letter, the final paragraph:
PN1459
Please let us know if you have any issues with the content of the enclosed agreement or the practices set out above.
PN1460
Now, can I just ask you this first. There were some further discussions about the deed before it was finalised after this date?---Sorry, there were some further?
**** WESLEY HAYES XXN MR BROTHERSON
PN1461
Discussions about this document, the common law agreement, before it was finalised?---I'm assuming there would have been.
PN1462
But if we look at clause 4.10 of the document attached to the Clayton Utz letter, it doesn't change from what goes into the final version of the common law agreement, does it?---The letter attached to this and the letter that's in the final one?
PN1463
Clause 4.10 of the attached version of the document, the draft, is the same as the final version that goes into the actual common law agreement?---I'll just have a look at the final agreement, sorry.
PN1464
THE COMMISSIONER: It's uncontentious.
PN1465
MR BROTHERSON: I withdraw the question. Mr Hayes, in respect to the request in the final paragraph of the letter, did you let the company or Clayton Utz know of any issues you had with the enclosed agreement?---We would have verbally. I can see it if it's not in writing, it's not in writing. And I can recall this issue and I only say that, Ken, because if I said it once I said it a million times. When we had this discussion about getting things documented and making it clear, and we just had different positions all the way along. And we let the words speak for themselves at the end of the day. And look, I don't want to make it up, but I was just tired of keeping saying to the company well hang on, that's your view of the world again, we've got the words, you put a covering letter, but that's how I would say it now and I would have said it then. But obviously it's not in writing.
PN1466
So if we then go back to paragraph 11 of your statement. You say in the second sentence there:
PN1467
I do recall that after the content of the CLE was agreed to, Ms Butler was trying to add definitions to the CLE as well as other forms of interpretation aids.
PN1468
**** WESLEY HAYES XXN MR BROTHERSON
Now, you would accept that the Clayton Utz letter pre-dates the finalisation or agreement on the content of the common law agreement, doesn't it?---The one I've got here is 4 September. If the common law deed is dated after that, then you'd be correct. You don't have to prove it, I'm not doubting you. But if it say it's after 4 September, it is.
PN1469
Excuse me a moment, Commissioner. Mr Hayes, could I show you a document. Mr Hayes, this is an email from you to Ms Butler on 10 September 2007?---Yes.
PN1470
So this is six days or so after the Clayton Utz letter where you are referring to:
PN1471
Here is the commercial agreement that Geoff looked at a minute ago.
PN1472
Can I just ask you to confirm that where you refer to the commercial agreement, it's what we now are otherwise refereeing to the common law agreement?---Yes that's what I would have meant, yes.
PN1473
And you say:
PN1474
It has changed the name of the union to reflect what it is.
PN1475
And we can see that there are some mark-ups in the party section of the agreement where there has been some amendment made in that regard?---Yes.
PN1476
So you'd accept that this confirms that by 10 September the agreement is still subject to finalisation, isn't it?---Yes.
PN1477
And you will see in the second paragraph:
PN1478
I will send a set of words around the area centre issue in a minute.
PN1479
**** WESLEY HAYES XXN MR BROTHERSON
?---Yes.
PN1480
Now, the area centre issue is also an issue dealt with in the common law agreement, isn't it?---If it's listed in there.
PN1481
And if we look at clause 4.2 of the attached document, you will see in sub-clause (b) there:
PN1482
Only one shop steward per discipline per area centre shall be permitted to attend such meetings.
PN1483
So can I put it to you that on 10 September you in fact are still trying to add definition to what the common law agreement may mean, correct?---Yes. Based on that, yes.
PN1484
And you're attempting to do that in writing?---Yes.
I tender that, Commissioner.
EXHIBIT #A9 DRAFT COMMON LAW AGREEMENT
PN1486
MR BROTHERSON: In negotiating the 2010 agreement, it is a claim of the union that what was clause 4.10 of the common law agreement titled Availability and Allowances should be included in the next enterprise agreement, correct?---I think we wanted all the clauses in that, including that, in the EBA.
PN1487
And the union claim was that there should be no change to that clause 4.10?---If that's what we've written. I haven't got my claims in front of me, I don't think. But whatever we wrote would have been the claims.
PN1488
Can I put it to you that you had known since the receipt of the Clayton Utz letter in 2007 what the company understood and intended that clause to mean, correct?---Yes, based on their letter.
**** WESLEY HAYES XXN MR BROTHERSON
PN1489
Did you do anything to disavow the company that you disagreed with its intention or understanding of that clause?---Look, I don't tape meetings. But if I've said something at a meeting, that would have been the only time. I can't recall anything in writing.
PN1490
In paragraph 17 of your statement you refer to the eventual agreement that clause 4.10 of the common law agreement would go into the 2010 enterprise agreement as a standalone clause, correct?---Yes.
PN1491
And you refer to WH3 as setting out the in principle terms, correct?---What page is that sorry?
PN1492
Can I take you then to page 37 of 75, which is your annexure WH3?---Yes.
PN1493
And on the second page of that document, page 39, part 7 availability?---Yes.
PN1494
That sets out the broader agreement of the parties which in turn in (a) refers to an attachment 2, correct?---Yes.
PN1495
And you will see in 7(d) there was also an understanding that the parties would consolidate the availability clauses which were scattered throughout various places. They would consolidate those in the new agreement, correct?---That's what it says, yes.
PN1496
And then if we look at attachment 2, which begins on page 41 of the statement, and then – sorry, begins on page 43 of your statement – if we look about two-thirds of the way down the page, that's where it indicates clause 4.10 of the deed would form part of the agreement as a separate clause, correct?---Yes.
PN1497
And you will see there's a number of footnotes. On the second one there is:
**** WESLEY HAYES XXN MR BROTHERSON
PN1498
People currently in receipt of payout of availability times two and times three will continue to be paid out in full.
PN1499
Now, can I get you to confirm that by that you are referencing what they would have been getting under at that stage clause 4.10 of the common law agreement?---I'm only hesitating, Ken. I'm just trying to remember the discussion. I can remember a discussion around it. How it was paid out, or the formula used... look, I'm not 100 per cent sure on that to be honest. I can recall this issue being raised, and I'm just trying to think what we agreed would have been the payout. I mean, I nearly have to rely on what the guys received as what was agreed, to be honest.
PN1500
THE COMMISSIONER: I'm sorry, can I just understand this a little bit better. It's coded obviously as between the parties, it's not immediately transparent the meaning of this. But obviously it had a meaning to the parties. Let's just start at the beginning. People currently in receipt of payout of availability, who were those people?---I remember this discussion taking place with the stewards probably more than myself in terms of understanding a local arrangement. Now, I would have piped in on the conversation and put my position on it, but I just can't recall.
PN1501
My question is was anybody being paid? I mean, who was receiving? It says currently in receipt. Do you know of the facts of anybody at that time currently in receipt of payments?---Not now. At the time it would have been brought to my attention and I would have answered it, but I can't - - -
PN1502
Somebody was actually receiving payments?---They must have been. They must have been.
PN1503
Let's assume they were. What's times two and times three? What's the differentiator?---My understanding is whether you're on a one in four. You work one week in four, or one week in two, or one week in three, and you'd be rostered on that basis. Every second week you work one week, you're on availability. That's how I understand it.
**** WESLEY HAYES XXN MR BROTHERSON
PN1504
So should I properly construe this as the people who were currently in receipt of payout of availability allowance were receiving it according to their roster?---Yes. That's how I would interpret that, yes.
PN1505
And according to their roster they received either times two or times three?---Mm hmm.
PN1506
And what does times two stand for?---So they'd be rostered on every second week and they'd be paid an availability allowance every second week.
PN1507
So what would they be paid out?---I don't understand to be honest. I mean, in terms of that - - -
PN1508
No, it's all right. If you don't understand?---I honestly don't understand. I can recall a discussion, and I can't remember the detail of it, and I don't want to make it up.
PN1509
MR BROTHERSON: Perhaps if I can ask some further questions on that of Mr Hayes to try and draw that out further. Mr Hayes, you'd accept that where the reference there is to people currently in receipt of payout of availability, the reference to payout of availability would mean people receiving entitlements under clause 4.10 at that time of the common law agreement?---Look, Ken, I honestly can't recall it. In that context I can't recall it.
PN1510
Can you think of what else it could possibly mean by payout of availability?---I can recall discussions around availability. Look, I can't. I mean, I could make it up out loud, but really it wouldn't - - -
PN1511
I wasn't asking you to make anything up.
PN1512
THE COMMISSIONER: No. I think the question really is if these payments weren't being made pursuant to a common law agreement, what were they made pursuant to? Can you think of any obligation on the company derived either from an individual instrument or some sort of agreement, either exchange of letters, or some other document whereby these people would be able to access these payments or would be in receipt of them?---My limited recollection of it, and it's not going to help anyone, probably won't even help me to be honest, but I can recall the discussion around red circling guys, and I can recall a discussion around what about these guys on this, the one in two and one in threes. And that's in the context of some other discussion. And that's all I can recall because it was news to me when I heard guys were on that roster arrangement.
**** WESLEY HAYES XXN MR BROTHERSON
PN1513
The question is not so much as to what was actually happening at the time. The question is actually directed as to why it was happening. And it's been put to you that it was happening because the common law agreement obliged the company to make these payments and that they were being made pursuant to that agreement. Do you have an answer for that?---I just can't recall. I'd like to.
PN1514
If we were to assume that it wasn't the common law agreement but that there were some other obligation on the company to make these payments, how could that obligation arise? Do you have any knowledge that could illuminate that question?---I can't. And I don't want to put Kyle in the deep end, but he might have a better answer than me in terms of local arrangements and whatever agreement might have been struck there. I just can't recall it.
PN1515
MR BROTHERSON: My Hayes, could I ask you this. Clause 4.10 of the common law deed from 2010, the first paragraph, provides:
PN1516
Where an employee is moved by the employer from the availability roster, or the roster alters to reduce the availability allowances, or --
PN1517
And then it goes on to deal with some other things. Can we just focus on these words "or the roster alters to reduce the availability allowance". If somebody has been on a one in two roster, so that is they are rostered for availability work every two weeks, but the roster changes to, say, a one in four pattern, then they're getting their availability allowance less often, correct? They're getting it every fourth week instead of every second week?---On that example, yes that would be correct.
PN1518
And that is exactly what those words in clause 4.10 of the common law agreement I took to you deal with, isn't it?---One example, yes.
PN1519
Yes. And clause 4.10 of the common law agreement then provides that those persons would be entitled to two years of compensation for the income that they would have ordinarily earned, correct?---If that's what it says, yes.
**** WESLEY HAYES XXN MR BROTHERSON
PN1520
So your memory is sketchy, but if we look at that just in a general sense, can I put to you the question if we had an example in 2010 of someone who was in receipt of a payment on availability two, then the company would had to have applied the common law agreement, correct?---Yes.
PN1521
And the same if somebody had been in a one in three roster, that is every third week, and move to, say, a one in four roster, they would have attracted a payment under clause 4.10 of the common law agreement, correct?---Yes. We would have argued that, yes.
PN1522
And those payouts would continue across a two year period under that clause?---Yes.
PN1523
THE COMMISSIONER: Did anybody ever receive any payments of lost overtime under the common law agreement?---Not that I'm aware of, no. Not arising out of the availability, or another example I can think of off the top of my head.
PN1524
MR BROTHERSON: Mr Hayes, you would be aware from your role as an official of the union that over the period since the making of the common law agreement and under the 2010 agreement, which use the same words that we're looking at here, a number of employees have had their availability arrangements changed?---Sometimes I didn't know, Ken, and other times – and I'm trying to think of the times in the areas I looked after who would have had availability changed, and I'm struggling in the area I looked after. I've been made aware there has been occasions. Sometimes you don't know that as an official.
PN1525
Are you aware that those employees have been compensated on the basis of two years of the value of the availability allowance only?---Well, Ms Butler – sorry. Maryann makes that statement. I wasn't aware of that.
**** WESLEY HAYES XXN MR BROTHERSON
PN1526
So you had no knowledge of what the employees since 2007 that have attracted an entitlement under this clause, firstly 4.10 of the common law agreement and now 12 of the 2010 agreement, how they'd actually been paid out?---If they weren't in my area I wouldn't know.
PN1527
All right. Can I ask you to look at paragraph 21 of Ms Butler's statement.
PN1528
THE COMMISSIONER: Twenty one, is it?
PN1529
MR BROTHERSON: Yes, Commissioner. You will see at paragraph 21 Ms Butler sets out a number of examples of where the company has utilised the clause we are considering applying the interpretation or practice the company applies to it. You have read that paragraph in preparation for these proceedings?---Yes.
PN1530
Now, you will see the first example in 21(a) involves an employee at the Traralgon depot in 2008. And you would accept that at that time the common law agreement was in place?---Yes.
PN1531
And by that person coming off availability, they would lose their availability allowance in total. They would no longer be rostered to work it, correct?---Look, I'm not aware of the specifics of these, but that's what Maryann is saying. So I believe her if she says that.
PN1532
And when that person comes off availability, they lose the allowance that they get for the week they are rostered, and they lose potentially the opportunity for the call-outs that might arise if they're rostered, correct?---Yes.
PN1533
And you're aware that the company has, on Ms Butler's evidence, been applying at that stage clause 4.10 of the deed to compensate people in accordance with that provision by the payment of two years of availability allowance only. You were aware that that was the way the company was doing it?---I wasn't aware of those, so I wasn't aware of what they paid out those people. But if the company are saying they did it, they did it. But I certainly wasn't aware of those at the time
**** WESLEY HAYES XXN MR BROTHERSON
.
Can I just take you back then. Were you aware prior to the making of the 2007 common law agreement how the company paid out compensation
in all those cases?---Prior to 2007?
PN1534
Yes?---Yes. They paid it out on the availability component of it.
PN1535
But you made no enquiries after that as to how it was being paid out?---No, I didn't. I didn't flag how I would interpret a new set of words if that's what you're asking. If we negotiate a set of words with the company, I might look at that set of words and say I reckon there's some scope here down the track that we could apply an interpretation on this. I wouldn't say that to the company. I wouldn't say to you, Ken, guess what, I reckon we've stitched you up here, you know – being blunt about it. I wouldn't'. I wouldn't do that. You know, I'd just look at the words and think look, they're different, there's some scope here for further application or interpretation, and we'll deal with that at that time.
PN1536
You have drafted what became clause 4.10 of the 2007 common law agreement?---I recall drafting it. I suspect I would have probably grabbed young Geoffrey to help me out.
PN1537
And if we look at an example, the example at 21(a) is a real example, but if we look at it, do you say the company has done anything wrong in the way it has applied what was then clause 4.10 of the deed to that example?---If I'd known about it at the time, I would have asked some further questions around the loss of income and made a judgement on how I would apply the clause.
PN1538
Well, how would you have applied the clause?---Well, I don't know the facts to be honest, Ken. I'm not trying to avoid it, but sitting down with these guys I would be able to make a call on whether or not they – how much income they've lost really.
**** WESLEY HAYES XXN MR BROTHERSON
PN1539
And you will see in 21(c) there's an example of a different type of change where certain employees are moved - this is in March 2010 – from a one in three to either a one in four or one in five roster. This meant that those employees received the availability allowance less frequently. You now are aware that the company has paid those employees out based on their availability allowance earnings only in accordance with their understanding of then the common law agreement?---That's what it says. Well, that's what is being put to me, yes.
PN1540
Do you say that is a wrong approach?---Well, the short answer is yes. But I would like to sit down with those individuals. In hindsight I would have sat down with the individuals and asked them how much income they're losing overall, as opposed to just the availability component.
PN1541
Well, can I put to you March 2010, that's prior to the September 2010 settlement we looked at that is annexure WH3 to your statement?---Yes.
PN1542
And you recall the footnote there referred to payout of availability to people one in two and one in three. You recall that footnote?---Is that the one we just had here, sorry?
PN1543
Yes?---Yes. Sorry, can you ask that again?
PN1544
Well, let me frame the question this way. If you're looking at WH3 of your statement?---Is this page 43?
PN1545
Yes. You will see footnote two. Would you accept that the example Ms Butler sets out at 21(c) there would be an example of the sort of situation that is being referred to there?---Look, that could – yes, you could look at it that way.
PN1546
I think it's really the only sensible way to look at it, isn't it?---Well, again, you can look at words on face value and then sitting down with a guy I can say look, they're taking you off this roster – I'm talking out aloud how I'd deal with it – they're taking you off this roster, what are you losing, the guy might say I'm losing, you know, my avail has been stretched out another week so I don't get it as often, and by the way I had X amount of overtime, that's the question I would probably prompt. I'd ask the guy if that's the case and then put that into the company. Even though the words are how they are in note 2.
**** WESLEY HAYES XXN MR BROTHERSON
PN1547
And obviously we now have to accept that in September 2010 there was some quite specific consideration given to the sort of situation exampled by Ms Butler, wasn't there, that they must be paid out in full?---One interpretation, yes.
PN1548
And you are now aware as to how the company was doing that from Ms Butler's statement, correct?---Again, the company's interpretation of it. I mean, I'm not saying it would limit our right to – the company might say for this example we're applying this formula, we might agree with that. We might have other evidence to say hey, we're not agreeing with that, this guy is losing a lot more and our interpretation of the clause is this. Which I guess is why we're here.
PN1549
Now, you will see there is an example at 21(f) of Ms Butler's statement from September 2012?---Yes.
PN1550
So this is obviously well after the making of the 2010 agreement?---Yes.
PN1551
THE COMMISSIONER: Did you say – I beg your pardon. Twenty one, yes. Beg your pardon.
PN1552
MR BROTHERSON: And this involves an employee at Hazelwood who has relocated to another depot and comes off availability in total, correct?---That's what it says. I'm not across the facts of it.
PN1553
So that person no longer by coming off availability would receive the availability allowance, correct?---That's what you assume, yes.
PN1554
And that person therefore is not available for call-outs that would otherwise occur to people rostered on availability?---Assuming that's what's happened, yes.
PN1555
And are you aware of the union making any claim in respect of that employee for compensation other than what Ms Butler has identified is being paid out to that person?---Not that I'm aware of. I mean, I don't recall sitting down with someone and asking the facts about that arrangement.
**** WESLEY HAYES XXN MR BROTHERSON
PN1556
Were you the official involved in that matter?---September was a bit of a transition in the union, Ken, for us. So I don't recall being involved in it. I suspect it was just after our union election, so we probably had a few things on. But Peter, without putting Peter in the hot seat, Peter Mooney I suspect. If it originated out of Hazelwood, I'm guessing he would have dealt with it.
PN1557
But whichever official it was, they are all familiar with the terms of the 2010 agreement?---Well, they would look at the agreement, yes. I mean, whether they interpret something different to another official.
PN1558
And they'd have access no doubt to people like Mr Borenstein or yourself if they thought something wasn't right or something wasn't clear, correct?---Yes.
PN1559
Now, in the case that is before the Commissioner at the present, we are dealing with certain employees on what's called the Benalla FSC?---Yes.
PN1560
And those employees remain on the availability roster, correct?---My understanding is that's the case, yes.
PN1561
And they remain on a one in four availability roster after the changes granted by the Commission?---That's my understanding as been put, yes.
PN1562
So their earnings of availability allowance would be unaltered as a result of the changes to the boundary?---In respect to the allowance, yes. It should be the case, yes.
PN1563
So there are still rostered on availability every fourth week, correct?---That would be the case.
PN1564
And in that fourth week they become the first point of call for call-outs within the defined region?---Yes. The region has altered, though, my understanding.
**** WESLEY HAYES XXN MR BROTHERSON
PN1565
So the only change that they see is that their region now is slightly smaller than it was prior to the Commission's decision in August 2011?---No, not the only. And as a result of that less overtime, less income.
PN1566
You'd concede with me that that's potentially the argument, we say?---Well, yes. That's why we're – yes.
PN1567
We just don't know, do we?---Well, I don't know. I think Kyle's got some evidence that deals with that.
PN1568
So your claim, if I understand, is that clause 12 of the 2010 agreement provides that they should be compensated in some way for that loss of whatever the overtime figure might be?---Yes.
PN1569
So given that the company has never compensated anyone for overtime where they have come off availability, this would be a very generous payment under that clause to these people, wouldn't it?---It would be – well, generous is a different interpretation. It might be 20 bucks, it could be 2000, I don't know. But it would be another way in which you apply the clause I suppose, yes.
PN1570
But you accept that there are people that have come off availability in total at other places?---Well, the examples given here, if that's what's put, I accept that. I don't agree with it, in terms of how it's applied.
PN1571
And you accept that the company's practice, at least, has been that those people are only compensated for the loss of allowance, correct?---That's what the company has applied. Again I don't necessarily agree with it.
PN1572
So in this case it's potential, isn't it, under your claim that these people may be compensated depending on whatever this income could be calculated at as more than the value of the allowance over two years, correct?---Look, I haven't seen the figures. Like I said, it could be $100. I don't know.
**** WESLEY HAYES XXN MR BROTHERSON
PN1573
And that's irrespective of the fact they remain on availability and continue to be eligible and receive call-outs every fourth week?---But not on the same boundaries.
PN1574
Can I ask Mr Hayes to be shown a copy of exhibit A5, which is a copy of the SPI PowerNet and SPI Electricity ETU Enterprise Agreement 2010-2013.
PN1575
THE COMMISSIONER: I think it's the small book in the front. Wasn't it exhibited as a small booklet?
PN1576
MR BROTHERSON: I actually can't recall, Commissioner. But you may well have been given copies.
PN1577
THE COMMISSIONER: I thought it was actually in that blue file, that small booklet, which is the EBA.
PN1578
MR BROTHERSON: Can I just ask you to go to clause 12, availability and allowances. You accept that that's the clause that we are dealing with in this matter?---On face value, yes. I mean, without going through every page. I thought there was another clause in there, but that's all right.
PN1579
You're aware that the agreement also has a number of appendices?---Yes.
PN1580
Can I take you to appendix 5?---Have you got a page number by any change, Ken?
PN1581
The page on the version that I am on is at page 94?---Yes. I've got you, yes.
PN1582
Which is titled Relocation T. So this would apply to the transmission part of the company, correct?---Yes, that's correct.
PN1583
And clause 1 of that refers to the fact that the objective of this policy is to provide managers and employers with guidelines on employees' entitlements in the event of them being permanently being relocated by the company from one SPI PowerNet site to another, existing or new SPI PowerNet worksite. Can I take you to clause 3.6 of that appendix titled Other Allowances. And this clause seems to specifically deal with where people may lose some availability allowance where they are specifically relocated. You see that?---Yes.
**** WESLEY HAYES XXN MR BROTHERSON
PN1584
And relocation is, of course, one of the matters dealt with in clause 12 of the agreement, isn't it?---If it says 12, yes it says 12.
PN1585
And can I ask you to have a look at how it says there people are to be compensated in that clause 3.6. If there's a higher allowance it applies.
PN1586
The difference between the allowances for a two year period, if a lower allowance applies, or the total current allowance assessed over a two year period as a lump sum if no allowance applies, provided where an employee has been in receipt of the allowance for less than two years the payment shall be calculated on a completed month basis.
PN1587
Do you see that?---Mm hmm.
PN1588
And you'd accept that that is in fact how the company continues to pay employees out under clause 12 whether it's for relocation or some other reason, correct?---Well, that's how the company is interpreting it, yes.
PN1589
Do you have a view as to how this clause in appendix 5 of the agreement interacts with clause 12 for people who have been relocated?
PN1590
MR BORENSTEIN: Commissioner, again the witness is being asked to give a legal opinion on the interpretation of the agreement.
PN1591
THE COMMISSIONER: Yes. It's not of great use to me really, is it?
PN1592
MR BROTHERSON: I'll withdraw it.
PN1593
THE COMMISSIONER: It's a matter that I will be required to construe the relationship if it was necessary or relevant to the decision being made, isn't it? Rather than Mr Hayes being empowered to join the emu and the kangaroo in aid of the application.
**** WESLEY HAYES XXN MR BROTHERSON
PN1594
MR BROTHERSON: Mr Hayes, you have worked in this industry for a long while and you've dealt with this company through its various agreements and negotiations on a couple of rounds, correct?---That's correct.
PN1595
Now, you would be familiar, no doubt, that when the common law agreement was made in 2007 that an appendix along the lines of what is still in the 2010 agreement was placed in the 2007 agreement. Do you recall that?---An appendix at the front of the agreement?
PN1596
No, at the back of the agreement. Well, can I show you a document. It might be the easiest. Can I ask you to have a look at this. Mr Hayes, that's an extract from the 2007 agreement?---Yes.
PN1597
And I can certainly show my friend a full copy. But that's appendix 6 of the 2007 enterprise agreement. And you will see that that same relocation policy for transmission employees was in that agreement?---Right.
PN1598
So we had that in the 2007 agreement, plus we had clause 4.10 of the common law agreement from that period of time. You'd accept that?---If that was in there, yes.
PN1599
You say – well, let me ask you another question. The transmission employees are only a part of the company's employees covered by these agreements, correct? Or covered by the enterprise agreement?---There's transmission and distribution, yes.
PN1600
So that appendix that I have shown you would only apply to those employees of the transmission part of the company, not the distribution part?---If it says T that's what it would refer to, yes.
Perhaps if I can tender that, Commissioner.
**** WESLEY HAYES XXN MR BROTHERSON
EXHIBIT #A10 APPENDIX SIX OF 2007 ENTERPRISE AGREEMENT - RELOCATION POLICY FOR TRANSMISSION EMPLOYEES
PN1602
THE COMMISSIONER: I take it that there is no objection to this. The witness obviously can't testify to it. Thank you, Mr Borenstein.
PN1603
MR BORENSTEIN: I might just reserve our rights in respect of that, Commissioner. I haven't got a copy of the 2007 agreement with at the moment, and there might be some issue about whether it's in there, and if so how it relates to the general clause of the agreement and the relationship whether what overrides which.
PN1604
THE COMMISSIONER: Yes. Well, there are two dimensions to that. One is a question of fact, whether or not it actually does form part of that agreement. The other one is what's to be made of it.
PN1605
MR BORENSTEIN: Yes.
PN1606
THE COMMISSIONER: The latter part is a matter for submissions, I suppose. But I am going to assume unless you raise that, it does form part of that agreement.
PN1607
MR BROTHERSON: Commissioner, I can explain that I have tried to avoid copying multiple copies. It can be done.
PN1608
THE COMMISSIONER: I think Mr Borenstein, he just wants to be able to check it and raise a difference.
PN1609
MR BROTHERSON: Mr Hayes, could I show you another document. Mr Hayes, this document is from the 2004 enterprise agreement known as the SPI PowerNet/Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia Enterprise Bargaining Agreement 2004?---Yes.
**** WESLEY HAYES XXN MR BROTHERSON
PN1610
And you will see this appendix A that I have just provided to you is really identical to the two previous provisions I have taken you to. It's the same as the 2007 appendix 5 and it's the same as what is still appendix 6 of the current agreement. You'd accept that? I'd ask you to perhaps quickly review it?---Look, on face value it seems. In respect of availability allowance, yes those words look similar.
PN1611
And can I ask you to look at clause 3.6 of this 2004 agreement and put to you that when you came to the 2007 negotiations and the proposed clause, this was clearly what was in place at the time, certainly in relation to relocation which it deals with, correct?---Relocation, it mentions that.
PN1612
And if we look at the index to this enterprise agreement which you don't have, and I accept I haven't provided my friend with a copy of that but I can do so, this agreement doesn't elsewhere deal with loss of availability allowance for restructure, or where you otherwise might come off a roster, or have your availability allowance reduced?---The 2004 one? No, I don't recall. I don't recall it being there, sorry.
PN1613
So can I put to you that in 2007 when you prepared the clause, you were coming from a base that the agreements to that point only expressly dealt with people having availability changes for relocation, yet the practice had been for a number of other circumstances, correct?---No. When we come to 2007 our basis was the '98 decision in terms of how we applied stuff. These words were in there, but we wanted to broaden them a bit.
PN1614
THE COMMISSIONER: But in 2004 the restructure component of what applies now did not form part of the agreement?---In 2004?
PN1615
Yes?---No. Well, there was the decision arising out of 1998 which mentioned restructure.
**** WESLEY HAYES XXN MR BROTHERSON
PN1616
We're talking about the agreement and you may or may not be able to recall. What's been put to you is that in the 2000 agreement, what the tribunal in this matter determined was a restructure was not a subject expressly referred to for the purposes of the payment of availability allowances that would be foregone?---Right.
PN1617
Is that right? You don't know?---Look, I wasn't here in '98, or didn't represent the industry so I can't recall the submissions put. All I remember is getting a copy of the decision and thinking we should get some words to capture that. It wasn't put in the 2004, I accept that.
PN1618
That's the question?---Sorry.
PN1619
That's all. At this point that's the question that's been asked. So restructure wasn't there in '04?---No. And I'm not saying this to try and trip Ken up or anything. In the early 2000s, we did used to still rely on decisions as an entitlement, I suppose, without actually putting them in agreements. We'd just say hey, that was a decision, that's always been an entitlement. It wasn't until Work Choices come along where we thought decisions, side deals, documents, custom and practice, we've got to put it all in there, get it all in there. So there was a bit of a culture. Because we had an SPU as well leading up to 2004, or with us the ASU and APESMA, and there was a lot of that was the case so that stands. And it wouldn't have been found in a document. It was just the way people operated back then. It was a bit of that culture, that mindset. So I'm not trying to say that – I'm not having a go at Ken saying hey because it's not in there we didn't apply it. You know, it was there. That's how people thought.
PN1620
But it didn't form a term of the agreement that's referred to there?---I understand what you're saying.
PN1621
I just need to be precise about that, that's all?---Well, we would have relied on the decision.
**** WESLEY HAYES XXN MR BROTHERSON
PN1622
I'm not entering into that. That's for Mr Brotherson and Mr Borenstein to deal with. I just want to be clear in my mind as to whether you are able to answer the question that the restructure provision did not form an express term of the '04 agreement, that's all.
PN1623
MR BROTHERSON: I have nothing further for Mr Hayes.
PN1624
MR BORENSTEIN: I was just going to ask for a five minute toilet break.
PN1625
THE COMMISSIONER: Yes, by all means. We might take a little longer than that. We'll take until 11.30.
<SHORT ADJOURNMENT [11.17AM]
<RESUMED [11.32AM]
THE COMMISSIONER: Mr Borenstein.
<RE-EXAMINATION BY MR BORENSTEIN [11.32AM]
PN1627
MR BORENSTEIN: Mr Hayes, can I take you to paragraph 11 of your statement. You were questioned by Mr Brotherson about - as exhibit A7 the email from Louise Russell and obviously Mr Brotherson challenged your evidence at paragraph 11. In paragraph 11 can you read it, you set out your account of what occurred after you received or before you received the email and in terms of providing definitions, interpretation aids to the common law agreement. So you see that? On the next page - so you say to then - the evidence is in effect that you don't want to re-open the agreement?---That's correct, yes.
PN1628
Then when you received it your evidence is that you told me that you did not agree with it?---M'm.
PN1629
Mr Brotherson put to you that you never advised them that you didn't agree with their view of the operation of clause 4.10. Can you please explain to the Commission what your evidence on this issue is?---The whole - that paragraph and leading up to that paragraph and the whole range of negotiations, there was I think I previously mentioned, there are plenty of issues that you may not have an agreement on that words existed because of the history of the industry and because the company took the view on a set of words like that we told them we don't agree with it but we'll leave the words the way they are and this was no different, this issue, I mean the company - we enter into a common law agreement with a set of words that are agreed and then the company put an interpretation on that which we don't agree with and we tell them that.
PN1630
It was put to you that the deed at that time, the commonwealth agreement had not been agreed to yet, but in respect of the words at clause 4.10 at that time had those words been agreed to in principle?---Is this the one dated the 4th or the 6th or what date?
PN1631
Well, the communication to you by Ms Russell was on - I think it was on 4 September, so - - - ?---I mean it's their draft, I can't remember six years back.
**** WESLEY HAYES RXN MR BORENSTEIN
PN1632
Did the words (indistinct) the same?---Sorry, what was the question?
PN1633
Did the words at clause 4.10 change after that email?---No, they didn't.
PN1634
Can you recall whether it was your belief that that clause had been agreed in principle to at that stage?---If the words hadn't of changed that would have been the agreement.
PN1635
Mr Hayes, you say that you were involved in the drafting of clause 4.10 and you were taken - Mr Brotherson asked you questions about what was in existence prior to 2004. If I can ask you to try and recall, when you were drafting clause 4.10 what was your intentions when you were drafting it?
PN1636
THE COMMISSIONER: What's the relevance of that?
PN1637
MR BORENSTEIN: I will withdraw the question.
PN1638
THE COMMISSIONER: It's rather central in a way but the intention of the makers of the agreement is, as I understand it, apprehended as a collective intention rather than individual intentions, recollected many years later. That's why I - you can call 20 negotiators and they'll give 20 different accounts of what their subjective intentions were. That is not the nature of an inquiry into the intention of the making of an agreement is it?
PN1639
MR BORENSTEIN: It's our primary submission that there can't be subjective intentions and evidence about negotiations.
PN1640
THE COMMISSIONER: Subjective intentions of individuals involved in a process are not the issue. It's the object of the intentions of the agreement makers.
**** WESLEY HAYES RXN MR BORENSTEIN
PN1641
MR BORENSTEIN: Yes. Before 2007 I think you accepted under questioning from the Commission that there was no express term dealing with compensation relating to restructures expressly put in the agreement?---Yes, that would be correct, yes.
PN1642
I will move on from that point, Commissioner. Mr Brotherson asked you about your awareness of the examples of clause 21F of Ms Butler's statement?---Yes.
PN1643
21F is dealing with an issue in September 2012 when you were asked whether or not that was brought to your attention?---M'm.
PN1644
To what date were you the relevant organiser with SPI?---Well, I was elected assistant secretary in August 2012 - 2011 actually, hang on, I'm getting my dates - how long have I been in the job now? Sorry, 2011, so I wasn't the organiser in 2012.
PN1645
If I can refer you to paragraph 2 of your statement?---Yes.
PN1646
Where it says that you were - up until November 2011?---Yes, I've answered my own question, yes.
PN1647
So is that correct?---Yes, that's correct, yes.
PN1648
In respect of the other examples set out in paragraph 21, were any of those brought to your attention prior to these proceedings?---No, not that I can recall.
PN1649
Is it true that they all relate to the Gippsland area?---Yes, look every depot there is Gippsland area and even in respect of example F it initiates it at or starts it at Hazelwood, even though it ends up in Rowville, it's still a Gippsland issue.
**** WESLEY HAYES RXN MR BORENSTEIN
PN1650
Who is the relevant official that deals with that?---Peter Mooney.
PN1651
Was Peter Mooney involved in the negotiations of the 2007 common law agreement?---No.
PN1652
Was he involved in the 2010 negotiations?---No. He doesn't - he didn't - the organiser doesn't come up to the meetings or get heavily involved in it.
PN1653
I have no further questions, Commissioner.
THE COMMISSIONER: Thank you for your evidence Mr Hayes, you are released from your oath and can resume your seat.
<THE WITNESS WITHDREW [11.42AM]
PN1655
THE COMMISSIONER: You can take the statement that you have brought into the box but all the other materials we have provided to you we'll have returned now.
PN1656
MR BORENSTEIN: Commissioner, I call our second and last witness, Mr Pugh.
THE COMMISSIONER: Mr Pugh is outside?
PN1658
MR BORENSTEIN: He is outside.
PN1659
THE COMMISSIONER: Just one moment. Call Mr Pugh.
PN1660
MR BROTHERSON: Commissioner, can we just clarify the 2004 appendix to the enterprise agreement was marked as exhibit A11, is that correct or was it not marked?
THE COMMISSIONER: It was marked. A11.
<KYLE PUGH, AFFIRMED [11.43AM]
PN1662
THE COMMISSIONER: Mr Borenstein, just before you start, I think I'm probably at fault in marking those exhibits that Mr Brotherson tendered as A exhibits, but I don't think it's going to matter, it's really just an identity tag isn't it?
PN1663
MR BORENSTEIN: Yes.
THE COMMISSIONER: Good, go ahead.
<EXAMINATION-IN-CHIEF BY MR BORENSTEIN [11.44AM]
PN1665
MR BORENSTEIN: Mr Pugh, have you been involved in the preparation of a witness statement in this matter?---Yes.
PN1666
Have you got a copy of that with you?---Yes, I have.
PN1667
Have you read that recently?---Yes, I have.
PN1668
Is it true and correct to the best of you recollection?---Yes, it is.
I seek to tender that, Commissioner.
EXHIBIT #A12 WITNESS STATEMENT OF KYLE PUGH
PN1670
MR BROTHERSON: I simply reaffirm what I said earlier, Commissioner.
PN1671
MR BORENSTEIN: Commissioner, we are not seeking to ask any questions in examination-in-chief in respect of this. The only issue that has since arisen is that I've been provided a copy of - in paragraph 7 Mr Pugh refers to his diary and his conclusion from that diary. I have got a copy of the diary records which were provided to my friend over a week ago. It's a matter that probably causes some problems in this case in terms of maybe one of the issues that arises which is there are questions that are asked about whether or not overtime can potentially fall within this clause 12. The question may have moved towards for each particular person does the overtime - and if it does, does each particular person's overtime fall within it in terms of its regularity or the like. That is something that can only really be determined probably to a required standard by a subpoena and going through the documents in the possession of SPI. We have a diary from Mr Pugh, most of the other employees don't have such a diary. It is something that it would be more convenient to leave over to the next stage of these proceedings should we get there, should the pre-conditions be met where we actually delve into say okay, how regular was the overtime they worked.
PN1672
**** KYLE PUGH XN MR BORENSTEIN
THE COMMISSIONER: Regularity is really not any part of the clause is it, it's the overtime could be characterised as something ordinarily earned.
PN1673
MR BORENSTEIN: Yes, that's right, I mean our position is that we are happy to have this dealt with on the basis that can overtime - - -
PN1674
THE COMMISSIONER: Would the overtime - I know there is a primary proposition in the text and the proper interpretation of the text does not allow, but overtime is income they would have ordinarily earned.
PN1675
MR BORENSTEIN: That's right.
PN1676
THE COMMISSIONER: Some issue arises as to the meaning of the words "ordinarily earned" and this statement goes in some part towards that question and this is the only evidence that will be brought as to whether or not overtime has been ordinarily earned if that is a proper construction of the clause, correct?
PN1677
MR BORENSTEIN: That's correct.
PN1678
THE COMMISSIONER: That is dealt with in paragraphs 5 - - -
PN1679
MR BORENSTEIN: That's dealt with in paragraphs - well, Mr Hayes - - -
PN1680
THE COMMISSIONER: As far as this witness is concerned it is paragraph 5, isn't it?
PN1681
MR BORENSTEIN: That's right, 5, 6 and 7.
PN1682
THE COMMISSIONER: 6 is about other persons isn't it?
PN1683
**** KYLE PUGH XN MR BORENSTEIN
MR BORENSTEIN: Other employees.
PN1684
THE COMMISSIONER: They're not available for cross-examination are they?
PN1685
MR BORENSTEIN: They're not but we submit - - -
PN1686
THE COMMISSIONER: It is not a question of me putting to you some criticism of a deficiency in the evidence on the point, it is just to be precise that this is the only witness who can from their own experience directly give evidence about whether or not their overtime earnings could be characterised as something ordinarily earned.
PN1687
MR BORENSTEIN: That's correct and that's been done on the basis - and there is no evidence against it, there is no evidence saying - - -
PN1688
THE COMMISSIONER: I am not going any further than to just pinpoint the scope of the evidence.
PN1689
MR BORENSTEIN: That's right.
PN1690
THE COMMISSIONER: What occurs to me is that I should at least hear the evidence insofar as it is suggested that the overtime income of Mr Pugh could be arguably characterised as ordinarily earned. So that is taking the matter a little further than paragraph 5.
PN1691
MR BORENSTEIN: Yes, the - - -
PN1692
THE COMMISSIONER: So I am giving you the opportunity to ask supplementary questions on that point because it is open to cross-examination.
PN1693
**** KYLE PUGH XN MR BORENSTEIN
MR BORENSTEIN: It is open to cross-examination and I suppose in terms of the questions that we framed for this arbitration as sort of the preliminary step, the questions dealing with this part of the element look more to a general philosophy of could overtime - - -
PN1694
THE COMMISSIONER: I understand perfectly what you're saying, that's the question that's been posed but in the course of answering the question I will be required to deal with submissions about the proper construction of the words "ordinarily earned".
PN1695
MR BORENSTEIN: Absolutely and the question is - - -
PN1696
THE COMMISSIONER: In the context.
PN1697
MR BORENSTEIN: I suppose - - -
PN1698
THE COMMISSIONER: Context of the proper construction of the agreement in the relevant context.
PN1699
MR BORENSTEIN: Yes, yes, absolutely, but then - - -
PN1700
THE COMMISSIONER: The other submission that is put against you is that overtime by definition in the context of the agreement is not income ordinarily earned.
PN1701
MR BORENSTEIN: Yes.
PN1702
THE COMMISSIONER: It is conceded however in that submission that overtime could in certain factual circumstances in industry be income ordinarily earned. We don't need evidence to know that there are many different shift rosters that incorporate for example an overtime shift. The 20th day, for example, or the 42 hour week roster, all incorporate a certain amount of overtime as part of a rotating shift roster and an employee working such a roster will either every week or every month receive a certain amount of payment for overtime in order that the roster be effected. So I take from the respondent's submission that they fully comprehend that it is possible that overtime can form income ordinarily earned, but you go further and say it can be income ordinarily earned notwithstanding that it's not programmed, scheduled, rostered or anything of that nature that occurs on an as required basis and may or may not occur. You say it's a question of fact rather than a question of textual interpretation.
**** KYLE PUGH XN MR BORENSTEIN
PN1703
MR BORENSTEIN: That's correct, we say - - -
PN1704
THE COMMISSIONER: This witness says that he does earn overtime payments when on availability. I am saying it doesn't quite travel on the face of it to fully paint the picture of such ordinary earnings, amounts which would be ordinarily earned but the witness is here.
PN1705
MR BORENSTEIN: That's right, Commissioner, and in terms of - as you said there's the interpretation question of can income ordinarily earned ever include compensation - - -
PN1706
THE COMMISSIONER: Can overtime be income ordinarily earned.
PN1707
MR BORENSTEIN: Exactly, and that's one of the (indistinct) - - -
PN1708
THE COMMISSIONER: The respondent concedes that - - -
PN1709
MR BORENSTEIN: Only in submissions. The question phrased - - -
PN1710
THE COMMISSIONER: Not in this context is what's submitted.
PN1711
MR BORENSTEIN: No, well previously the respondent's primary submission is this clause only compensates for availability allowance and cannot include overtime.
PN1712
THE COMMISSIONER: Yes, that's what I mean that they say amongst other things that in the context of this agreement and in this clause, and in particular the way in which the overtime is worked on the availability roster it cannot be properly characterised as something ordinarily earned by way of income.
**** KYLE PUGH XN MR BORENSTEIN
PN1713
MR BORENSTEIN: If they lose their primary argument that income ordinarily (indistinct) - - -
PN1714
THE COMMISSIONER: I think this forms part of their argument, if not a secondary or alternative argument.
PN1715
MR BORENSTEIN: I suppose it's the next stage that if well - - -
PN1716
THE COMMISSIONER: What I'm saying to you essentially is I'm not sure that the issues are capable of the net separation that you have in mind at the moment because of the way in which the submission is put against you. You see what is put against you is this, look this isn't a shift roster, it's not a program, it's not a custom and practice that everybody is told they will work X hours overtime when they're on an availability roster. It all depends on circumstances, so it's not an ordinary situation, it is an extraordinary situation. It's contingent.
PN1717
MR BORENSTEIN: Yes, that's correct.
PN1718
THE COMMISSIONER: That's part of what is put against you.
PN1719
MR BORENSTEIN: Yes, and I suppose our question is we don't - and this will be dealt with in submissions, but we don't deny that the overtime is - it's not guaranteed overtime. We say but the practice has been that the employees over the period of time have worked overtime in effect every time they're on availability on the week, so that they have - we don't say - - -
PN1720
THE COMMISSIONER: But we don't actually have any evidence beyond paragraph 5 of this is the point that I am drawing your attention to.
PN1721
**** KYLE PUGH XN MR BORENSTEIN
MR BORENSTEIN: That's right and the only evidence that would give more than paragraph 5 would be a subpoena that sets out records - - -
PN1722
THE COMMISSIONER: No, no, not necessarily, the point that I'm making is Mr Pugh is here now, you can ask him about the ordinary nature of this income because I think there is a problem for you if you don't, with all due respect.
PN1723
MR BORENSTEIN: We were I suppose preparing this initially on the basis that if we got up the interpretation argument that overtime could be compensated for within this clause in this situation, then we would come back with a subpoena and this is the whole reason we've tried to split it up with a subpoena that would set out exact details of when these people did work and didn't work, rather than just coming along and saying well, in my recollection I did work and we would prefer to have the paper documents (indistinct).
PN1724
THE COMMISSIONER: Did you take instructions from Mr Pugh about this?
PN1725
MR BORENSTEIN: After receiving the evidence - - -
PN1726
THE COMMISSIONER: About what you say he ordinarily earned?
PN1727
MR BORENSTEIN: I did and that is - - -
PN1728
THE COMMISSIONER: As to the amount and to the frequency and the certainty and - - -
PN1729
MR BORENSTEIN: That is what the diary entries show.
PN1730
THE COMMISSIONER: Have we got those?
PN1731
**** KYLE PUGH XN MR BORENSTEIN
MR BORENSTEIN: They are the documents I suppose I first raised to say that I provided to Mr Brotherson - - -
PN1732
THE COMMISSIONER: Can't Mr Pugh tell us?
PN1733
MR BORENSTEIN: He can, yes.
PN1734
THE COMMISSIONER: Should we hear from him?
PN1735
MR BORENSTEIN: I'll ask Mr Pugh. Mr Pugh - - -
PN1736
MR BROTHERSON: I take it in that, Commissioner, that that is an overruling of the determination in respect of Mr Pugh's evidence. When this statement was filed on 29 January it was over a week late from the directions for the applicant to file the material. We objected to the admission of the statement and we received from your Associate a statement saying the statement would be received due to the time we had to review the material, the brevity of the statement and limited subject matter the statement would be accepted on the understanding that it will not be supplemented in oral evidence in chief and that Mr Pugh would be available for cross-examination.
PN1737
THE COMMISSIONER: Yes, I beg your pardon, I overlooked that. What is your view on this, Mr Brotherson?
PN1738
MR BROTHERSON: Commissioner, we have had the material for a week, it does raise I think a matter of process where a party is drip-fed material. One could be trite perhaps in saying as another party recognises some issues in its case. But at the end of the day the company is not embarrassed by what it has seen in Mr Pugh's diaries.
PN1739
**** KYLE PUGH XN MR BORENSTEIN
THE COMMISSIONER: My intention in receiving the witness statement about the lack of supplementation was really that there shouldn't be any new content. I don't think questioning on the details in paragraph 5 strictly falls within that concept. It is the subject matter of the statement, it is really just some elaboration of paragraph 5 rather than the introduction of an entirely new subject matter.
PN1740
MR BROTHERSON: And I do intend to cross-examine Mr Pugh on that.
PN1741
THE COMMISSIONER: On it? Given what I have said to Mr Borenstein I think I will have to make a ruling that he be permitted to make supplementary inquiries into the content of paragraph 5.
PN1742
MR BROTHERSON: Thank you, Commissioner.
PN1743
THE COMMISSIONER: Notwithstanding the earlier determination. Go ahead, Mr Borenstein.
PN1744
MR BORENSTEIN: Thank you, Commissioner. Mr Pugh, you refer to the income that you have received whilst on availability in paragraph 5 of your statement. Can you please maybe provided - further elaborate on the amounts of income and the regularity of it and explain how often you've received it. Elaborate on those issues?---Yes, so in reference to the - well, I'll base my evidence on the diary entries that I've provided to Mr Borenstein. The financial year 2009/2010 I went back through my diaries and totalled up the amount of overtime call outs that we have, individual jobs and also tallied up the hours worked and then broke that down into the areas that were given or taken off our availability roster, the area we lost essentially and then calculated percentages and it was around about 25 to 27 per cent of our call outs came from the areas that were taken.
PN1745
**** KYLE PUGH XN MR BORENSTEIN
THE COMMISSIONER: That's not really the point of the inquiry?---Okay,
so - - -
PN1746
The point of the inquiry is about the fact that you received certain overtime payments and presumably you continue to do so?---Yes, that's correct.
PN1747
Mr Borenstein asked you about the frequency of those and the amount?---M'm.
PN1748
So with what frequency did you receive overtime payments?---On every call week or week that I was on call, I don't recall and my diary doesn't suggest that I was ever on availability for a week without getting called out.
PN1749
So when you were called out you were paid overtime?---That's correct.
PN1750
The number of call outs would vary?---Yes, they would.
PN1751
From each week of availability?---Yes.
PN1752
So there would be a different number of calls out?---Yes.
PN1753
Different number of hours worked on the call outs?---That's correct.
PN1754
And a different amount of income received according to the number of call outs and the number of hours worked on the call out?---That's correct.
PN1755
MR BORENSTEIN: In terms of your week of availability, can you recall a week that you didn't receive overtime income?---No, no, I can't.
PN1756
I have no further questions, Commissioner.
PN1757
**** KYLE PUGH XN MR BORENSTEIN
THE COMMISSIONER: It's up to you, Mr Borenstein. Very well.
<CROSS-EXAMINATION BY MR BROTHERSON [12.02PM]
PN1758
MR BROTHERSON: Mr Pugh, you say at paragraph 5 of your statement, "I can't recall a time that I did not receive overtime income when rostered on availability." Do you see that statement there?---Yes.
PN1759
When you're rostered on availability it is for a week of seven days at a time?
---That's correct.
PN1760
So when you say you can't recall, "a time I did not receive overtime when rostered on availability," you're talking across the entire week?---Yes, that's correct.
PN1761
So you're not saying each and every day of that seven day period you would necessarily receive a call out, are you?---That's correct.
PN1762
It is your experience that you don't actually get a call out each day you're on availability do you?---That is correct.
PN1763
Across a period of years it may vary how many days you may receive call outs when you're on availability, correct?---Yes, that's correct.
PN1764
Some years it might be a lot more than it is in other years, for example?---No, my diary entries, I'm not sure if they've been provided to you but they reflect that on average out of 70 days of being on availability there is an average of around 50 of those days that would be called out.
PN1765
But there is also fluctuations, aren't there, for example 2009/2010 you were called out a lot more days than 50, correct?---Yes.
**** KYLE PUGH XXN MR BROTHERSON
PN1766
Some years you've been called out less than 50 days?---48 I think, yes.
PN1767
When you are called out on those overtime as the Commission has already put to you, the amount of overtime you are going to receive will vary depending on the actual nature of the job?---That's correct.
PN1768
And that will depend on how complex he job is, where it's located, various things, correct?---That is.
PN1769
The job you might be called for could be anywhere within that Benalla FSC boundary region?---Yes, it can also extend past those boundaries.
PN1770
That's right, so the boundaries in fact are really only notional aren't they?
---Insomuch that the call centre when they receive a fault for a particular area it falls within a set boundary and it is issued to
that crew unless there are extenuating - other circumstances that come into play.
PN1771
So assuming they're available they get the call?---That's correct.
PN1772
But if they're not available the call may go to a crew from an adjoining FSC?
---That is standard practice.
PN1773
At Mansfield or Seymour or something like that?---Yes, that's correct.
PN1774
That does happen doesn't it?---From time to time.
PN1775
Indeed even since the changes you have performed jobs in what one could call the lost regions to Benalla haven't you?---Performed one job according to my diary entries, yes.
**** KYLE PUGH XXN MR BROTHERSON
PN1776
Can I put to you it's probably more than one job, can I put to you that you've done jobs in that period since the changes at (indistinct), correct?---I couldn't recall specifically if it was (indistinct).
PN1777
That wouldn’t be outside the region would it?---(Indistinct) is outside of the region since the changes.
PN1778
Boggy Creek is outside the region?---Parts of Boggy Creek can be.
PN1779
And Creighton's Creek is outside the region?---That's correct.
PN1780
You've done jobs on call outs there within the last 12 months, haven't you?
---Potentially, yes.
PN1781
You have also done jobs that are way beyond the Benalla region in that 12 months since the changes, haven't you?---Are you referring to overtime work or normal work hours?
PN1782
I'm referring to call outs?---Overtime calls outs or - - -
PN1783
Yes?---Because we do get issued faults during the day in other areas as well.
PN1784
But you do still get assigned to those even if they're outside your area?---During normal working hours yes, yes we can be.
PN1785
They are not restricted because of these boundaries, are they, there's no exclusivity, if I can put that word to you, in these boundaries is there?---There is in general, yes.
PN1786
**** KYLE PUGH XXN MR BROTHERSON
But it's only to the extent people are available?---That's correct.
PN1787
Whether we looked at your particular experience before the changes that arose from the Commissioner's decision on boundaries, you have always done some jobs in other people's regions?---From time to time we have, yes.
PN1788
You would accept that you have not in any one year ever earned exactly the same amount of overtime have you?---I couldn’t recall without going back right through all my diary entries.
PN1789
It's a pretty simple question isn't it? For example if your overtime earnings are $25,000 a year have you earned that in each and every year of say the last five years?---In general, yes.
PN1790
Can I put to you that's not right, your overtime earnings dropped substantially in the 2011/2012 year, didn't they?---There was a period there of four months where I was on light duties with a broken legislation, that had an impact, yes.
PN1791
You couldn’t make any claim for the loss of overtime because of that, could you?
---No.
PN1792
So your earnings in fact halved in that year which is more than a slight variation isn't it?---That's not quite the way that I recall the diary entries tallying up and I may have made a mistake with the claim on it insomuch that income protection that we have takes care of normal overtime earnings that we would normally have earned, we are compensated for that, takes into account.
PN1793
When you're on availability, say it's one of your weeks this week, there is no particular job that's programmed that at 10 o'clock on a Thursday night I know I'm always going to do that job and it's going to take two hours, is there?---Not always, no.
**** KYLE PUGH XXN MR BROTHERSON
PN1794
There is never anything just like that, is there?---No, but there is pre-planned work from time to time as well.
PN1795
But if we're looking at call outs and that's really the essence of this matter as I understand it, you don't have any assured call out that is always going to happen at 10 o'clock every Thursday night this is going to happen, do you?---No, that's correct.
PN1796
You actually when you go home of a night when the week you're on availability you can't predict whether a job is going to arise that night, can you?---Depending on where the situation is we have a general idea but as a straight rule of thumb there is no prediction.
PN1797
You can't predict when it might arise or where it might arise if it's going to, can you?---No, that's correct.
PN1798
When you say in your statement, "The income I've received from overtime has been a constant thread," you're not talking about the amount of earnings from call outs when you're on availability there are you?---Yes, in general I am.
PN1799
Even though the number of call outs varies quite significantly across the years, doesn't it?---I disagree with the significance of the call outs, over the period of 12 months I think we can show that there is a fairly steady number of calls outs, varying it does from week to week but over a 12 month period in general availability is worth around $25,000 to $30,000 for most of the guys on the call roster.
PN1800
I mean that's a $5,000 variation, that is a fair variation isn't it?---Yes, your pay rate will have some influence on that.
**** KYLE PUGH XXN MR BROTHERSON
PN1801
Can I put to you that the boundary changes haven't necessarily impacted the number of call outs you're going to receive, have they?---Yes, I think we've been able to show that in the 12 months that I did post the changes that the call out variance from the areas we would normally cover dropped significantly.
PN1802
THE COMMISSIONER: The number of call outs?---Yes, once the changes were made, Commissioner, the number of calls from those areas that we would normally receive would be no longer received.
PN1803
MR BROTHERSON: You're talking there about you're no longer receiving calls in a particular region, correct?---That's correct.
PN1804
But if we were to look at say the total number of call outs you've had, you had more call outs in 2011/2012 than you had in the year
before that, haven't you?
---Yes.
PN1805
Yes, and for the same number of days on availability?---That's correct.
PN1806
So what is your loss?---We - over the preceding two years that I've given diarised evidence of around about 25 to 27 per cent of our call outs were in areas that we used to hold, so since we've lost those areas that number has dropped down to I think 1.8 per cent of our calls.
PN1807
THE COMMISSIONER: The originating calls?---That's correct.
PN1808
But I think Mr Brotherson is putting to you that you have actually had more call outs in 2011/2012, I take it that's financial year is it?
PN1809
MR BROTHERSON: Yes.
**** KYLE PUGH XXN MR BROTHERSON
PN1810
THE COMMISSIONER: Than you had previously in 2010/2011?---Yes, that's correct.
PN1811
And you agreed with that?---Yes, the number of calls outs, Commissioner, were slightly higher, the total number of hours I believe was less.
PN1812
MR BROTHERSON: Commissioner, if I can just correct something I responded to, I think the time frames we're talking about is October to October each year. 5 October to 5 October each year.
PN1813
THE COMMISSIONER: October 2011 to October 2012?
PN1814
MR BROTHERSON: Correct, which winds up with the - - -
PN1815
THE COMMISSIONER: So the number of call outs has been greater?---Correct.
PN1816
MR BROTHERSON: So the fact that those call outs may have taken less time than the fewer call outs the year before is simply a vagary of the type of job that you were called to, correct?---Yes, can be.
PN1817
So it's equally possible if you get the same number of call outs next year that you may get fewer hours again or more hours?---It is possible, yes.
PN1818
The company has never given you a guarantee that when you're on availability you're always going to get a certain number of hours called out, are they?---No.
PN1819
And they've never given you a guarantee that you're always going to get as a minimum $25,000 a year of income?---That's correct.
PN1820
**** KYLE PUGH XXN MR BROTHERSON
So really your knowledge is when you're on availability I'm going to get some income and it's usually not a bad amount but I don't know quite exactly what it's going to be, correct?---Never exactly.
PN1821
You are also, if you look across all the years, you never do call outs in exactly the same place on exactly the same day or anything like that, do you, they're sporadic?---The same place on the same day would be a correct statement, that doesn't happen but as a general rule the areas - the frequency of faults in particular areas is reasonably consistent.
PN1822
So last year you got more call outs after the boundary changes than you had before, is your concern only that you got fewer hours of payment for those call outs or is your concern that you think you should have also got more call outs for those lost areas or more compensation for those lost areas?---Yes, that's correct.
PN1823
So you're happy to take the additional call outs but you still want compensation on top of that?---I think the number of call outs you're talking about is two over a 12 month period, 103 to 105, so I think that shows the consistency rather than additional calls to two extra call outs whereas the hours worked was far less due to area reasons.
PN1824
But you accept that that figure of 105 you just quoted is a higher figure than the previous year with reduced boundaries?---Yes, it is.
PN1825
The nature of the faults within the current boundaries are really the same sorts of faults that could be occurring outside of your boundary?---That is correct.
PN1826
So the time it might take whether they're in your boundary or out of your boundary to correct that fault will simply depend on the
nature of the fault?
---Possibly travel conditions and time and distance are variances.
**** KYLE PUGH XXN MR BROTHERSON
PN1827
THE COMMISSIONER: I'm sorry, the proper construction is the income derived from these call outs attending to faults it's completely
unpredictable?
---Yes, it is.
<RE-EXAMINATION BY MR BORENSTEIN [12.17PM]
PN1828
MR BORENSTEIN: Mr Pugh, in terms of the number of faults, obviously it has gone up slightly by two in terms of the faults that you've worked during your availability. If the boundary changes hadn't been made would you have worked more faults or less faults?---I believe more faults.
PN1829
That's because the scope of the boundary would have been larger and encompassed more fault areas?---That's correct.
PN1830
Based on your experience has working in those areas been something that - have you worked a number of faults in those areas previously, the areas that have been removed?---Yes.
PN1831
Is your position that you have lost overtime earnings - - -
PN1832
MR BROTHERSON: I object to the way the question is starting.
PN1833
MR BORENSTEIN: Well, what is the effect - - -
PN1834
THE COMMISSIONER: I don't think he's making a submission (indistinct) giving evidence and to condition the interrogative approach.
PN1835
MR BORENSTEIN: What has been the effect of (indistinct) reduction boundaries for you?
**** KYLE PUGH RXN MR BORENSTEIN
PN1836
MR BROTHERSON: I object.
PN1837
MR BORENSTEIN: Based on your diary records what has been the effect or the impact on you as a result of the restructure of the boundary changes?---Well, traditionally even though things can vary slightly from time to time there is a consistency there of 25 to 30 per cent of our normal overtime income that we earned in the past. It came from the areas that have been removed from our care. So we would expect, mathematics being as they are, that there is a 25 to 30 per cent impact in the overtime that we would normally expect to work.
PN1838
THE COMMISSIONER: Mr Borenstein, I am following that as a territorial claim of ownership over the faults originating from the geography.
PN1839
MR BORENSTEIN: The basis of the claim as we have submitted is that there obviously is a restructure of the boundaries, it is work that would have ordinarily been done by these people and the result of the structure they no longer work in that area and therefore have lost the income from that. We are not arguing that there isn't a potential that they may have done more income in other areas and therefore the income may have been the same, but we're saying that if the changes have not been made they would have earned let's say 100,000 instead of 80,000. So it's that $20,000 gap that we are saying they have lost as a result of the restructure.
PN1840
THE COMMISSIONER: Is that the difference between their current income and what they would have earned previously?
PN1841
MR BORENSTEIN: We're saying as a matter of fact that's what they've lost.
PN1842
THE COMMISSIONER: No, no, I'm sorry, you don't - - -
**** KYLE PUGH RXN MR BORENSTEIN
PN1843
MR BORENSTEIN: Not based on that, we're not basing it (indistinct).
PN1844
THE COMMISSIONER: I'll put the question to you again. Would the effect of what your submission properly understood to mean be that the clause entitles the employees to the difference between what they would have earned under the old boundaries and what they are currently earning under the new boundaries?
PN1845
MR BORENSTEIN: Yes.
PN1846
THE COMMISSIONER: What is the difference for Mr Pugh?
PN1847
MR BORENSTEIN: The final figure will be determined at the next stage of this proceeding with the subpoena of - - -
PN1848
THE COMMISSIONER: He's given us a fair bit of evidence about this now.
PN1849
MR BORENSTEIN: The issue that we can't determine, that's why we've actually cut that part off is we can't determine how many jobs are in that changed area since the change because that is only information in the possession of the employer.
PN1850
THE COMMISSIONER: Mr Pugh has given evidence that he knows how much he earned under the old scheme.
PN1851
MR BORENSTEIN: He has his diary for the old scheme but we don't have - we can't work out how much he would have earned under the new scheme. We know that he used to work about 25 per cent of his call outs in the changed area. But since the change we can't identify how many jobs are in that area to make the comparison.
**** KYLE PUGH RXN MR BORENSTEIN
PN1852
THE COMMISSIONER: But you see this is perhaps part of the difficult with the claim and that is it seems difficult to formulate, even for a person who is actually doing the work. It's an elusive claim in the sense that here you have a person who has kept a diary record of all of their call outs and has a very clear picture in his mind as to how much he earned when the boundaries were, what they were previously and presumably that can be reduced to a dollar amount.
PN1853
MR BORENSTEIN: Yes.
PN1854
THE COMMISSIONER: I would think if his practice continues after the boundary change as it has he would know what he's earned since then in the way of call out overtime and it's that difference between the two, is it not?
PN1855
MR BORENSTEIN: No, it's not the difference between the before and after, it's the difference - the loss will be calculated by the amount of work that since the chance has been in the lost area.
PN1856
THE COMMISSIONER: Is it possible that the remedy that would have to arise from the claim formulated in the way you've just put it be that if there was no difference in the amount of money earned before and after, there would still be some compensation part of it?
PN1857
MR BORENSTEIN: That's right because they've lost out on the work in that lost area. The restructure meant that they have lost the work in that area.
PN1858
THE COMMISSIONER: How does that as an impact - how can there be an impact on - a relevant impact in the context of the clause on the hypothetical employee who earns just as much before the change in the boundary from call out overtime as they did after the change in the boundary. How can that be an income on the overtime they would ordinarily earn?
**** KYLE PUGH RXN MR BORENSTEIN
PN1859
MR BORENSTEIN: In this circumstance we say the clause operates to say well, you've lost that area, you're not getting those jobs in that area and that's the impact on you.
PN1860
THE COMMISSIONER: The area is not the object of the clause is it?
PN1861
MR BORENSTEIN: The object of the clause is a restructure and the
restructure - - -
PN1862
THE COMMISSIONER: The object of the clause is the impact on the employee.
PN1863
MR BORENSTEIN: As a result of the restructure, so the restructure - - -
PN1864
THE COMMISSIONER: If there is an employee who earns X amount from call out overtime before the restructure and earns X amount after the restructure, how can there be an impact on what the employee would ordinarily earn?
PN1865
MR BORENSTEIN: We say that the employee would ordinarily earn overtime in respect of that area and that's been cut away.
PN1866
THE COMMISSIONER: That may be true as a matter of fact but there is no relevant impact.
PN1867
MR BORENSTEIN: I suppose its how - - -
PN1868
THE COMMISSIONER: This is almost a claim for equity in the business isn't it based on a territorial concept of shareholding?
PN1869
MR BORENSTEIN: I mean at the time - - -
**** KYLE PUGH RXN MR BORENSTEIN
PN1870
THE COMMISSIONER: It's almost feudal.
PN1871
MR BORENSTEIN: At the time we don't know what the impact will be, but we say the boundaries have been set for a long time, people - I mean if you take it to a greater extent if the boundaries had been reduced to a small part which in effect meant that the employees received no income.
PN1872
THE COMMISSIONER: That employee on your argument suffers an impact, correct?
PN1873
MR BORENSTEIN: Yes, well at the time of the change - - -
PN1874
THE COMMISSIONER: And the impact - - -
PN1875
MR BORENSTEIN: - - - is unknown, but yes.
PN1876
THE COMMISSIONER: - - - is what you would say is income ordinarily earned.
PN1877
MR BORENSTEIN: Yes.
PN1878
THE COMMISSIONER: So that counter-factual to my proposition is that employee X earns A amount of money on the boundaries before the restructure and earns B amount of money after the restructure and if B is a negative value to A then the impact is the difference?
PN1879
MR BORENSTEIN: Yes, and that's - - -
PN1880
THE COMMISSIONER: So how can there be any windfall gain out of this clause?
**** KYLE PUGH RXN MR BORENSTEIN
PN1881
MR BORENSTEIN: I accept that, Commissioner, and when we at one of the initial directions hearings I suppose in respect to this and the subpoena, the subpoena was one dealing with documents which would allow us to compare pre and post income.
PN1882
THE COMMISSIONER: Yes, I know that but we're just dealing conceptually with it at the moment because I didn't really understand your claim to actually be what I now apprehend it to be and that is that even if an employee proceeds A prior to the restructure and B afterwards, and B has a positive value then there is still compensation payable because this is based on the fact that they have lost access to the pre-restructure territory and they have an equity claim in that that has to go onto the top of B plus. So it's B plus plus. It's B plus C plus D algebraically, that's your claim isn't it?
PN1883
MR BORENSTEIN: We wouldn't say that you would get both, we're not trying to double dip on it.
PN1884
THE COMMISSIONER: You have said that to me (indistinct).
PN1885
MR BORENSTEIN: No, what we are attempting to say is that if there is a restructure on the boundaries and in that area there is no work performed, there is no fault work performed so the employees would not have received any income from that area, then there is no impact. So we're not saying you might have - - -
PN1886
THE COMMISSIONER: Sorry, I don't follow that. I don't think we need to go to that hypothesis. What I am suggesting to you is you have a witness in the witness box who says look, I was earning this amount of money before the restructure. As I understand it Mr Pugh says he is earning less from this source as a result of the restructure and I am saying what is the difference between the two, and you're saying to me, well that's not really the way it works as far as our claim as to the interpretation of the agreement applies. It doesn't matter that he's earning less, what he is entitled to is whatever he earned from the old territories that he would if we were still able to access them continue to earn, regardless of his current earnings.
**** KYLE PUGH RXN MR BORENSTEIN
PN1887
MR BORENSTEIN: I'm saying that's his loss, his loss is only the work that he would have received in that area - - -
PN1888
THE COMMISSIONER: It's not that, it's a question of income, but anyway that's something we will have to work through in the submissions
but what I would like to hear and I will allow Mr Brotherson to cross-examine on this if necessary, Mr Pugh, what do you say your
net loss is, do you know what I mean by net loss?
---Yes, in general.
PN1889
The difference between your earnings prior to the change in the restructure and after the change in the restructure is from the call outs, the overtime call outs whilst you were on availability, what do you say the difference in your remuneration is?---Myself and - - -
PN1890
In dollars?---Yes, in dollars.
PN1891
No, just you?---Around about $7,000.
PN1892
$7,000 a year?---That's correct.
PN1893
So you are estimating that because of the restructure the amount of overtime earnings that you received from call outs approximates $7,000 per annum?---Yes.
PN1894
So these are call outs that you do not attend, is that right?---That's correct.
PN1895
But it could be the case that some of that $7,000 might be made up of a less - either a lesser number of call outs or alternatively a lesser number of hours required to fix the faults to which you were called out?---There can be variances there - - -
**** KYLE PUGH RXN MR BORENSTEIN
PN1896
It seems from what Mr Brotherson says that in fact it's more likely the latter, that is to say you haven't been spending as long on these faults because it appears, and you seem to agree, that you've actually attended about the same number of faults if not more, is that right?---That's correct.
PN1897
So this is a variation that it would seem is based on the fact that you haven't spent as many hours out there. If you had the same number of faults and less overtime income it seems to me that that has got to be attributable to a lesser amount of time spent working overtime on faults?---That's correct, by way of explanation it indicates more storm events or lightning events, so - - -
PN1898
More or less storm events?---More storm events in that you might attend six or eight jobs in a period that you're called out before you return home after a storm event. So similar number of hours may have been worked from one week to the next but if a lightning event has gone through the number of jobs that you'll actually attend to and the nature of them is a blown high voltage fuse it's a quick fix, you move onto the next job, so.
PN1899
All right. Well, that was what I was interested in. I got a bit distracted by trying to reckon the B plus C plus D.
PN1900
MR BORENSTEIN: I have no further questions, Commissioner.
PN1901
THE COMMISSIONER: Do you have any questions arising from that question I asked?
PN1902
MR BROTHERSON: If I could just explore this Commissioner, and I think it follows from a question of yours. Mr Pugh you said that you believe your loss to be about $7,000, could you articulate how you can calculate that?---Hours that we traditionally work and the areas that we lost based on the previous two years, around about 90 hours worth of work multiplied by the appropriate over time rate.
PN1903
Which is how much?---Overtime rate?
PN1904
Yes?---Well, that’s increased slightly with the EBA type of stuff but around about $80 now.
PN1905
So when you say around 90 hours a year, your not saying you work 90 hours every year in those so called lose areas, are you?---My diaries indicate a consistency of 90 hours and correlated with two other employers who do keep similar diaries, they have simular figures.
PN1906
But they vary, don’t they?---Slightly.
PN1907
And for example in 2010 and 2011 you didn’t work 90 hours in those areas did you?---I couldn’t say with any certainty.
PN1908
MR BROTHERSON: Yes I have nothing further.
PN1909
THE COMMISSIONER: Very well, thank you for your evidence Mr Pugh, your released and are free to come and go as you please.
PN1910
MR PUGH: Thank you Commissioner.
PN1911
THE COMMISSIONER: We may as well break for lunch early and come back earlier I think, isn’t that the best idea? Say 1.45 how does that sound?
<LUNCHEON ADJOURNMENT [12.34PM]
<RESUMED [1.50PM]
PN1912
THE COMMISSIONER: Thank you. Yes, Mr Brotherson.
PN1913
MR BROTHERSON: Thank you, Commissioner. If I could call Ms Maryann Butler.
PN1914
THE COMMISSIONER: Very well. Ms Butler, I think you know what to do.
THE ASSOCIATE: Please state your full name and address?---Maryann Butler, (address supplied).
<MARYANN BUTLER, SWORN [1.51PM]
THE COMMISSIONER: Thank you. Please be seated, Ms Butler. Mr Brotherson, I beg your pardon.
<EXAMINATION-IN-CHIEF BY MR BROTHERSON [1.51PM]
PN1917
MR BROTHERSON: Ms Butler, you are the group manager, workplace relations, of SP Ausnet?---That's correct.
PN1918
You've prepared a statement of the evidence you wish to give in these proceedings?---Yes, I did.
PN1919
And you have a copy of that with you?---I have a copy here.
PN1920
And that is a true and correct account of the evidence you wish to give?---Yes, it is.
PN1921
I tender that, Commissioner.
THE COMMISSIONER: Yes. Now, I think this is actually R1, if I'm not mistaken. Exhibit R1.
EXHIBIT #R1 WITNESS STATEMENT OF MARYANN BUTLER
PN1923
MR BROTHERSON: Ms Butler, can I take you to paragraph 19 of your statement. You refer there to a letter being sent from Clayton Utz to the CEPU when what was clause 4.10 of the common law agreement was being developed. You've read Mr Hayes' statement in these proceedings?---Yes, I have.
PN1924
And at paragraph 11 of Mr Hayes' statement he says that when he received that letter he told you that the position put in the Clayton Utz letter as to the practice that would be observed in relation to clause 4.10 was rejected. Do you recall him saying that to you?---No, I don't.
PN1925
**** MARYANN BUTLER XN MR BROTHERSON
Thank you. And can I take you to annexure E of your statement, which is on page 34, which attaches one of the company's progressive proposals to resolve the 2010 agreement?---Yes.
PN1926
Can I take you to page 40 of your statement, which is the attachment 2 for availability?---Yes.
PN1927
There are some notes at the bottom of that page 40 and the second one says, "People currently in receipt of payout of availability times 2 and payout times 3 will continue to be paid out in full." Do you recall why that was included in the proposed settlement discussion?---I do. As part of the negotiations we agreed on effectively a flat rate, so we had previously had a scale of rates, so we had one in two, one in three, one in four, one in five, up to one in eight. And what we did was collapse all of those rates down to a single rate, which was the $400 per week and we replaced the scale, and there was some concern that we had a couple of people who were on two and three, the bulk of them were in the one in four. So we agreed that what we would do would be to maintain the availability payout for those people, given that we'd collapsed all the scales and moved to a single rate.
PN1928
THE COMMISSIONER: Could their rate have been higher?---Pardon?
PN1929
Would their rate have been higher?---Yes, it would have been higher.
PN1930
MR BROTHERSON: And where it says, "People currently in receipt of payout"?---Yes.
PN1931
What did that mean?---Well, we've only ever paid out the availability allowance, so in accordance with the Raffaelli decision and in accordance with what we did in the common law agreement and the letter that accompanied common law agreement.
**** MARYANN BUTLER XN MR BROTHERSON
PN1932
So in 2010 when this note is put there, that people currently in receipt of the payout of availability, they were deriving the entitlement from where?---The people that were in receipt of availability were getting the difference between what had been a one in two roster or and one in three roster and the one in four roster that they've been moved to.
PN1933
And the source of that entitlement?---Again, it's always been custom and practice to pay out the difference in the lost availability if you moved to a roster that gave less money. If you moved off the roster through an action of the company then you were paid - if you you've been on it for an extended period of time you were then paid out the equivalent of two years' availability either as a lump sum or as some other payment, and that generally was negotiated at a local level.
PN1934
And when you say two years of availability, how is that calculated?---It's the allowance amount. So for instance if you take what is now the $400 per week, it would be the equivalent of the one in four roster cycle that comes with the 400 or the frequency with which they'd worked on the roster over the period of two years. So typically that would be approximately 12 or 13 payments each year, so about 26 payments of $400 roughly, just to put it in figures.
PN1935
Yes. So in 2010 this note that appears all the way through the in principle settlement arose at the concern of which particular party?---It was the union.
I've got nothing further for Ms Butler.
<CROSS-EXAMINATION BY MR BORENSTEIN [1.56PM]
PN1937
MR BORENSTEIN: In respect of that note, Ms Butler, do you know which individuals this is relating to?---Who were on the one into and one in three?
**** MARYANN BUTLER XXN MR BORENSTEIN
PN1938
No, that were allegedly receiving compensation for loss of availability allowance?---No, I don't know the names of the individuals.
PN1939
You don't know. Do you mention these individuals in your statement as examples of the custom and practice?---Yes.
PN1940
Let me check which ones they are?---I got the information from payroll, who gave me a spreadsheet with the individuals' names, which I don't actually have with me.
PN1941
No, sorry. In paragraph 21(f) of your statement you set out examples of the practice that you've just been talking about. I'm just wondering which one of those do those individuals fall within?---As far as I'm aware none of the employees in these examples were on a one in two or a one in three.
PN1942
Okay, so - - -?---These individuals either altered - came off an availability roster or they changed their roster. So a lot of them are in East, one of them was in North. The East rosters were being changed back to a standard one in four.
PN1943
Okay. So are you saying this is a further example that you haven't put into your statement about the application of the practice?---The practice of the company has always been to payout the availability allowance. I went to payroll to confirm that that had indeed been the practice. They then gave me a spreadsheet with individuals' names. I simply identify the depots rather than the individuals in the statement.
PN1944
So that's paragraph 21?---That is what's in 21, yes.
PN1945
**** MARYANN BUTLER XXN MR BORENSTEIN
Now, in the note 2 that you were just taken to?---Yes.
PN1946
It says, "People can't be in receipt of payout of availability"?---Yes.
PN1947
So that's obviously - - -?---That was back in 2010.
PN1948
Yes. So which one of that - note 2 is referring to which example in paragraph 21?---Sorry?
PN1949
Note 2 is referring to people - - -?---Yes.
PN1950
- - - currently being paid out the availability allowance. That's your evidence?
---Yes.
PN1951
Now, in paragraph 21 you've given examples of the company paying people out there availability allowance?---Yes.
PN1952
So I'm just wondering which subparagraph in 21 - - -
PN1953
THE COMMISSIONER: If any.
PN1954
MR BORENSTEIN: - - - if any, relates to the people referred to in note 2?---I didn't - - -
PN1955
You're clearly not sure?---I didn't see the names of the people - - -
PN1956
No?--- - - - in that notation when we were in the course of negotiations so I couldn't comment.
PN1957
Okay, so you're not sure?---I can't tell you, no.
**** MARYANN BUTLER XXN MR BORENSTEIN
PN1958
THE COMMISSIONER: So as far as I can understand your evidence you're unable to say whether any of these people fall within the description
in note 2?
---That's right.
PN1959
Okay.
PN1960
MR BORENSTEIN: And can it be accepted that you're also unaware of whether or not those people in note 2 - your unaware how much overtime they worked on the first hand or any overtime they've lost as a result of the change?---Note 2 only referred to the position in the negotiations for the new agreement.
PN1961
No, I understand that, but are you aware - and you might not be aware, and if you're not, that's fine, but obviously it refers to, "People currently receiving a payout of availability times 2 and times 3 will continue to be paid out in full." Are you aware of whether those people firstly have lost any overtime as a result of the change in the availability?---I can't comment. I don't know who those individuals were.
PN1962
Okay. And you don't know - is it fair to say you also don't know whether or not they are actually being paid out any loss for overtime?---I can confirm that we only pay out the availability allowance amount - - -
PN1963
No - - -
PN1964
MR BROTHERSON: She's got to be allowed to answer the question.
PN1965
MR BORENSTEIN: Well, sorry, I'm asking specifically in respect of the - - -
PN1966
**** MARYANN BUTLER XXN MR BORENSTEIN
THE COMMISSIONER: Yes, but I think if you let the witness answer, you're still free to ask another question.
PN1967
MR BORENSTEIN: Okay.
PN1968
THE COMMISSIONER: Go ahead, Ms Bowen. Go ahead?---I'm aware and I have confirmed that the company has always paid out the availability amount, nothing else.
PN1969
Okay.
PN1970
MR BORENSTEIN: Have you inquired specifically in respect of these people referred to in note 2 or not?---No, I don't have individual names for note 2 so I didn't pursue individual names. What I asked for confirmation was whether or not we had at any time paid out anything other than the quantum of the availability allowance that would otherwise be lost or altered, and I've had it confirmed that that's what we pay.
PN1971
When did you ask that?---This was prepared back in December, so it would either be late November or early December that I got the confirmation from payroll.
PN1972
Is that the first time you've asked payroll?---No.
PN1973
You've previously asked them?---Well, I asked them to actually give me detailed spreadsheet with individuals and regions so that I could determine what had been paid out.
PN1974
For the purpose of this proceeding?---I checked it for the purposes of this proceeding, yes.
**** MARYANN BUTLER XXN MR BORENSTEIN
PN1975
And you accept, don't you, that all of the changes referred to in paragraph 21 relate to the Gippsland general area in terms of your operations?---No. For instance, if you look at 21(b) there was a Wodonga depot change.
PN1976
Okay. That was an employee, though, at the Sale depot?---Again, in around August 2010 - - -
PN1977
Okay, yes, I see?--- - - - with an employee in Wodonga.
PN1978
In respect of any of these matters, have you had any discussions with Mr Hayes about the application of clause 12 to these employees?---With Mr Hayes in the last - - -
PN1979
No, in respect of - when these issues happened did you have - and you haven't said in your statement, but did you have any discussions with Mr Hayes about any of these instances?---I don't recall any discussion of individual examples with Mr Hayes. I recall discussions in 2007 about Mr Hayes being quite determined that what was in the Raffaelli decision be captured, particularly since it was custom and practice, in a site agreement, and the discussions around that did in fact capture that.
PN1980
You say that was in the negotiations, you say?---In the 2007 agreement negotiations, yes.
PN1981
THE COMMISSIONER: Could I just ask you, was the subject of payment of lost overtime raised at that time?---Never.
PN1982
MR BORENSTEIN: Now, in respect of that you previously had a clause - clause 3.6, I think it is, in the 2004 agreement - that dealt with compensation for loss of availability allowance. Are you aware of that clause?---2004, did you say?
**** MARYANN BUTLER XXN MR BORENSTEIN
PN1983
Yes, 2004 agreement?---That was pre my joined the company.
PN1984
Okay?---So I was aware in 2007 that - I had looked at the agreements, I didn't see a clause dealing with compensation specifically for availability allowances. I made inquiries about the Raffaelli decision and how it had been applied and that then formed the basis of our discussion for the common law agreement that accompanied the enterprise agreement.
PN1985
In clause 3.6 - - -
PN1986
THE COMMISSIONER: 3.6 of?
PN1987
MR BORENSTEIN: Of the 2004 agreement. I think I've got a - - -
PN1988
THE COMMISSIONER: I don't think I've got one, have I?
PN1989
MR BORENSTEIN: This is an extract, which is - - -
PN1990
MR BROTHERSON: I think I've got an extract here.
PN1991
MR BORENSTEIN: - - - A11, Commissioner.
PN1992
THE COMMISSIONER: A11?
PN1993
MR BORENSTEIN: It's A11, is it?
PN1994
MR BROTHERSON: Is an extract.
PN1995
THE COMMISSIONER: I see, that's the matter that's been exhibited this morning. The actual agreement is not exhibited.
**** MARYANN BUTLER XXN MR BORENSTEIN
PN1996
MR BROTHERSON: No. If it assists, Commissioner, I'm happy to provide a full copy of that agreement following the proceedings.
PN1997
THE COMMISSIONER: Is the appendix actually verbatim the content of the agreement?
PN1998
MR BROTHERSON: A11 is a full version of that appendix A to the 2004 agreement.
PN1999
THE COMMISSIONER: All right. Well, as I understand it from the evidence there's no suggestion that a restructure scenario was contemplated by that agreement.
PN2000
MR BROTHERSON: That's right.
PN2001
THE COMMISSIONER: Is that right, Mr Borenstein?
PN2002
MR BORENSTEIN: This is dealing with relocation only.
PN2003
THE COMMISSIONER: That's right, but - - -
PN2004
MR BORENSTEIN: That's right, and there's no other clause that deals with restructure.
PN2005
THE COMMISSIONER: There's nothing in the agreement - - -
PN2006
MR BORENSTEIN: No.
PN2007
THE COMMISSIONER: - - - that deals with restructure.
**** MARYANN BUTLER XXN MR BORENSTEIN
PN2008
MR BORENSTEIN: That's correct.
PN2009
THE COMMISSIONER: Good, thank you. No, it's not necessary to provide the whole agreement, then.
PN2010
MR BORENSTEIN: No. Can I show the terms of this clause?---Thank you.
PN2011
Now, you see there in terms of the clause, Ms Butler, that it talks about compensation for the availability allowance, doesn't it, at clause 3.6?---This one refers that you - you're saying the one that's headed, "Other Allowances for Employees in Receipt - - - "
PN2012
Yes, that one?---" - - - of a Radial Allowance or an Availability Allowance?"
PN2013
That's correct?---Yes.
PN2014
And then it goes on to say that, "Employees relocated" - so it's only dealing with relocation?---Yes.
PN2015
But, "Employees relocated to a workplace where a different allowance
applies - - - "?---Yes.
PN2016
" - - - or where no allowance at the time exists, the high allowance, if it applies at the new location" - so referring to the allowance?---Yes.
PN2017
"The difference between the allowances for a two-year period - - - "?---Yes.
PN2018
" - - - if the lower allowance applies to the new location," and then, "The total current allowance as a lump sum payment if no allowance applies at the new location"?---Yes.
**** MARYANN BUTLER XXN MR BORENSTEIN
PN2019
And then, "Provide that where an employee has been in receipt of the allowance for less than two years the payment shall be calculated on a completed month basis"?---Yes.
PN2020
Now, all throughout that clause it refers to "the allowance", doesn't it?---Yes.
PN2021
In the clause that obviously you negotiated for the 2007 common law agreement it doesn't refer to the compensation being a reference to the allowance, does it?---I think it refers to income, which was why we sent the additional letter to make clear that we were viewing it as the availability allowance and that that was what it was limited to.
PN2022
Okay. So you accept that on the words of the clause it's obviously broader than that clause that you've just seen there which refers specifically to allowance?---I don't accept that because this deals expressly with relocation, whereas that clause was to deal with a variety of changes that would impact the availability allowance other than just relocation.
PN2023
Yes?---And my recollection is that it was the union's position that they wanted it to cover circumstances in addition to a restructure and perhaps a relocation, and I believe - I could be wrong - that this relocation provision remains unchanged. I think it has continued for transmission employees in both the 2007 and the 2010 agreement.
PN2024
The fact is, isn't it, that it was intended to apply for other forms of income as well, wasn't it? That's why the allowance wasn't included in it?---No, it wasn't.
PN2025
Well, can you provide us with a rational reason why word "allowance" wasn't used if - what was on the word "allowance" just used instead of the words "income ordinarily earned"?---I think that's a good question. I can't give you an answer. My recollection is that the wording was put up by the union. Given that in the course of all of our discussions it was to capture what was in the Raffaelli decision, perhaps I naïvely just accepted those words based on an undertaking from Mr Hayes that what he wanted to do was to shore up the conditions of the employees and capture what was in the Raffaelli decision, and I took that at face value.
**** MARYANN BUTLER XXN MR BORENSTEIN
PN2026
There's nothing in writing from Mr Hayes, is there, that gives you that undertaking?---Mr Hayes has not rejected at any point the letter that was sent from Clayton Utz on our behalf expressly stating that it was the availability allowance and it was the quantum of the allowance only.
PN2027
But Mr Hayes hasn't - well, Mr Hayes just speaks of his evidence, but yes or no, you've received nothing in writing from Mr Hayes confirming that he accepts your position from exhibit A7?---I hate to - I'm not trying to be evasive, I actually think I may have received something that does confirm he accepts it because following the letter I received further amendments to the CLA - the body of the CLA from Mr Hayes but no amendment to that clause and no addressing of what we had expressly intended to be the intent of it and had sent him documentation on. So there was no rejection of that.
PN2028
There is no acceptance of that or no rejection. Well, there is no express acceptance of it, was there?---There was acceptance through non - - -
PN2029
No express acceptance?---There was acceptance through no other response.
PN2030
Okay. Well, that's not express, is it?
PN2031
MR BROTHERSON: Well, I think that's a debate, it's not a question.
PN2032
THE COMMISSIONER: I think it's a matter for me to decide, isn't it?
PN2033
MR BORENSTEIN: Prior to 2007 you're not aware of examples of the custom and practice in respect of whether or not you paid out availability allowance by reason of the allowance only or other forms of income as well, are you?---My inquiries were that the practice prior to 2007 was only the quantum of the availability allowance.
**** MARYANN BUTLER XXN MR BORENSTEIN
PN2034
Okay. But - - -
PN2035
THE COMMISSIONER: Is it part of your case that the customer practice was to pay anything else out?
PN2036
MR BORENSTEIN: Sorry?
PN2037
THE COMMISSIONER: Does it form part of your case that there was a custom and practice of paying anything more than the availability allowance prior to 2007?
PN2038
MR BORENSTEIN: We're not aware of the practice was before then.
PN2039
THE COMMISSIONER: No.
PN2040
MR BORENSTEIN: We don't have any examples of what the company was doing.
PN2041
THE COMMISSIONER: In fact, you can't make out a case that there was any other payment - - -
PN2042
MR BORENSTEIN: No.
PN2043
THE COMMISSIONER: - - - on the evidence that you're attempting to
bring - - -
PN2044
MR BORENSTEIN: There's no express terms.
PN2045
THE COMMISSIONER: There's no evidence of anything other than availability allowance being paid. Is that right?
**** MARYANN BUTLER XXN MR BORENSTEIN
PN2046
MR BORENSTEIN: Prior to 2007 there's no evidence of what occurred.
PN2047
THE COMMISSIONER: No, I mean at any time.
PN2048
MR BORENSTEIN: Yes. No, no one has ever been paid out overtime before this.
PN2049
THE COMMISSIONER: Or anything else other than the availability allowance, is the way I'm construing at the moment.
PN2050
MR BORENSTEIN: That's right.
PN2051
THE COMMISSIONER: That is to say there is no evidence of that.
PN2052
MR BORENSTEIN: That's right.
PN2053
THE COMMISSIONER: But there is evidence of people being paid the availability allowance.
PN2054
MR BORENSTEIN: Yes, that's correct.
PN2055
THE COMMISSIONER: And you concede that. Correct?
PN2056
MR BORENSTEIN: Yes. This is the first time that a dispute has been raised in respect of it and we say - - -
PN2057
THE COMMISSIONER: No, I understand. I'm just clarifying what you're putting.
PN2058
**** MARYANN BUTLER XXN MR BORENSTEIN
MR BORENSTEIN: I have no further examination, Commissioner, other than to say that in respect in the submissions we set out that we object to the admissibility of a number of the paragraphs in the statement which we set out in our submissions and - - -
PN2059
THE COMMISSIONER: Well, do you object to them being admitted or do you make submissions that I should afford - - -
PN2060
MR BORENSTEIN: Should have no weight.
PN2061
THE COMMISSIONER: Yes, either no weight or little weight.
PN2062
MR BORENSTEIN: That's correct.
PN2063
THE COMMISSIONER: As I find it.
PN2064
MR BORENSTEIN: That's correct.
THE COMMISSIONER: Thank you.
<RE-EXAMINATION BY MR BROTHERSON [2.13PM]
PN2066
MR BROTHERSON: Ms Butler, Mr Borenstein took you to what is clause 4.10 of the common law agreement. He didn't actually show it to you but he asked questions about the meaning of the term income and said there's no reference to allowances in that clause. Could I ask Ms Butler to be shown exhibit A4.
PN2067
Ms Butler, could I ask you to look at clause 4.10, Availability and Allowances, which goes across pages 4 and 5 and has two paragraphs. In the second paragraph it states, "That is, two years' payment will be made excepting that if an employee has been in receipt of the allowance for less than two years a pro rata amount of lump-sum compensation is to be paid." What was your understanding of that part of clause 4.10?---That the employee would receive the difference or the quantum, depending on what circumstances were, of the lost allowance, and if they'd been on it for less than two years then they'd receive a pro rataed amount that equated to the difference or the loss that that suffered, and that was entirely consistent with the Raffaelli decision.
**** MARYANN BUTLER RXN MR BROTHERSON
PN2068
Yes, I've got nothing further for Ms Butler.
THE COMMISSIONER: Good. Thank you for your evidence, Ms Butler, you're released from your oath and you're free to come and go as you please.
<THE WITNESS WITHDREW [2.15PM]
PN2070
MR BROTHERSON: If I can call Mr Paul Lane.
PN2071
THE COMMISSIONER: Mr Lane, be good enough to stand in the witness box for a moment, please. Give either the oath or the affirmation as you choose.
THE ASSOCIATE: Can you please state your full name and address?---Paul Michael Lane, (address supplied).
<PAUL MICHAEL LANE, SWORN [2.17PM]
<EXAMINATION-IN-CHIEF BY MR BROTHERSON [2.17PM]
PN2073
MR BROTHERSON: Mr Lane, you are the electricity services regional manager for the North region of SP Ausnet?---That's correct.
PN2074
Thank you. And you've prepared a statement of the evidence you wish to give in these proceedings?---Yes, I have.
PN2075
And you say that's a true and accurate account of the evidence you wish to give?
---Yes, I do.
PN2076
I tender that statement, Commissioner.
THE COMMISSIONER: That's R2.
EXHIBIT #R2 WITNESS STATEMENT OF PAUL LANE
PN2078
MR BROTHERSON: Mr Lane, can I just ask you to go to annexure C of your statement, which sets out the overtime earnings across three years for employees on the Benalla roster, and you identify them by identifications BN1 through to BN10. Do you have a document that identifies those employees by name?---Yes, I do.
PN2079
Can I show you a copy of a document. Is that effectively the table set out in annexure C with the names of the 10 employees from the Benalla FSC in lieu of initials BN1 through to BN10?---Yes, it is.
PN2080
I tender that, Commissioner.
THE COMMISSIONER: R3.
EXHIBIT #R3 LIST OF EMPLOYEES THAT WORKED OVERTIME
PN2082
**** PAUL MICHAEL LANE XN MR BROTHERSON
MR BROTHERSON: I've got nothing further for Mr Lane.
<CROSS-EXAMINATION BY MR BORENSTEIN [2.19PM]
PN2083
MR BORENSTEIN: Just at attachment C, Mr Lane, from that table is it fair to say that the majority of workers on the field services crew earned between approximately twenty to $30,000 a year in respect of overtime?---Yes, that's fair to say. There's a bit of a band through there, sort of a bit below, around about 20 to 30.
PN2084
Without the exceptions either end, but the majority of them have between 20 and 30. And in terms of, I suppose, the percentage of their income in a year, how much would you estimate that makes up?---I don't have a figure for that in terms of proportion, no.
PN2085
You're not sure what their base rate is?---No, their base rates would all vary.
PN2086
Okay. And in terms of the difference between twenty and 30,000, it's true, isn't it, that the employees that you've compared have different rates of pay?---There would be some slight variation in rates of pay, yes.
PN2087
Well, do you know what the difference is?---Not precisely, but I could provide that if requested.
PN2088
And I suppose that is a potential explanation for the twenty to 30,000 variance in pay, potentially?---It may affect those figures, yes.
PN2089
And you would accept, wouldn't you, that probably it's ordinary or usual that these employees work overtime when they're on their availability rostered week?---It's usual that they would work some overtime, though not always.
PN2090
**** PAUL MICHAEL LANE XXN MR BORENSTEIN
Yes. When you say not always, have you looked at any documents to support that view?---I haven't looked at documents but I know anecdotally that some weeks you're on and you talk to the guys that are on and they've been quiet and haven't had a call.
PN2091
Okay. So you haven't eye-witnessed a person not working on their week that they're on availability?
PN2092
THE COMMISSIONER: It would be very hard to do that, I would imagine?
---I've actually spoken to people who have had that happen.
PN2093
MR BORENSTEIN: Okay. Who are those people?---In general conversations around the different depots, you just inquire, "How's your week going? What have you been doing?" "I'm on call." "Have you been busy?" "Been quiet." And it's in those sorts of conversations.
PN2094
Okay?---So it varies.
PN2095
Okay. Now, I put to you that Mr Pugh has given evidence that he has worked - the year before the change he worked every week that he was rostered on availability, he worked overtime during that week. You can't dispute that, can you?---I don't have that information to dispute.
PN2096
No?---Yes, but - - -
PN2097
I have no further questions, Commissioner.
PN2098
MR BROTHERSON: Nothing arising, Commissioner.
THE COMMISSIONER: No re-examination? Good, thank you. Thank you very much for your evidence, Mr Lane. You're released from your oath and you're free to come and go as you please?---Thank you.
<THE WITNESS WITHDREW [2.22PM]
PN2100
THE COMMISSIONER: Is that the evidence?
PN2101
MR BROTHERSON: That's the company's evidence.
PN2102
THE COMMISSIONER: All right. Mr Borenstein, can you help me with something. Look at R3 and - I'm sorry, the date of the restructure's implementation has slipped my mind.
PN2103
MR BORENSTEIN: 5 October 2011.
PN2104
THE COMMISSIONER: Mr Pugh's overtime earnings have actually been reduced by not quite $2000. Is that right?
PN2105
MR BORENSTEIN: His overall overtime earnings, not overtime earnings
on - - -
PN2106
THE COMMISSIONER: Yes. So if there's been any fluctuation in his overtime earnings it's been - it's less than $2000. Is that right?
PN2107
MR BORENSTEIN: In terms of overall overtime earnings?
PN2108
THE COMMISSIONER: Yes.
PN2109
MR BORENSTEIN: Yes. Overall, not per - - -
PN2110
THE COMMISSIONER: So if I was to adopt your interpretation, Mr Pugh would be paid an amount notwithstanding that since the restructure his overtime has been reduced by less than $2000, his total overtime earnings have fallen by less than 2000.
PN2111
MR BORENSTEIN: That's right.
PN2112
THE COMMISSIONER: But nevertheless he would be entitled to a remedy because of the restructure.
PN2113
MR BORENSTEIN: Because of the restructure which has taken it away.
PN2114
THE COMMISSIONER: And what would that remedy be? An amount of money equivalent to approximately - - -
PN2115
MR BORENSTEIN: An amount of money equivalent to the overtime he would have received for doing the work in the lost area in the - post two years since the change.
PN2116
THE COMMISSIONER: How would that be calculated?
PN2117
MR BORENSTEIN: That would be calculated on calculating how much work was done in the lost area. So it would be an exact amount. It would be - Mr Pugh would have - - -
PN2118
THE COMMISSIONER: How would you do that? How would you work out what part of what's done in - - -
PN2119
MR BORENSTEIN: How would you do it?
PN2120
THE COMMISSIONER: - - - the new boundary was attributable to Mr Pugh?
PN2121
MR BORENSTEIN: You'd compare the time that Mr Pugh is on availability with the amount of work that was done in that area - in the lost area - during that period.
PN2122
THE COMMISSIONER: How could you attribute that to Mr Pugh?
PN2123
MR BORENSTEIN: You would say that he would have done that work.
PN2124
THE COMMISSIONER: Why?
PN2125
MR BORENSTEIN: Because he would have done that work if - you would compare. If he was doing other work at the same time - - -
PN2126
THE COMMISSIONER: You see, the only way you're going to be able to establish this is in an aggregate form, isn't it, in the territory that's been transferred, you have to actually identify the - shall we call it the border zone.
PN2127
MR BORENSTEIN: Yes.
PN2128
THE COMMISSIONER: You know, there's got to be a green line here somewhere, hasn't there?
PN2129
MR BORENSTEIN: Yes, there is.
PN2130
THE COMMISSIONER: And people are fighting over the green line.
PN2131
MR BORENSTEIN: I think - - -
PN2132
THE COMMISSIONER: Sort of brings all sorts of images to mind. And the green line tends to be a little bit fluid according to the evidence as well.
PN2133
MR BORENSTEIN: No, there's a - - -
PN2134
THE COMMISSIONER: But nevertheless, let us assume that there is this liminal zone which is what used to be in the Benalla area.
PN2135
MR BORENSTEIN: That's right.
PN2136
THE COMMISSIONER: It's now gone into the - - -
PN2137
MR BORENSTEIN: Myrtleford, I think it is. Myrtleford?
PN2138
THE COMMISSIONER: Myrtleford.
PN2139
MR BORENSTEIN: Myrtleford area.
PN2140
THE COMMISSIONER: So we can create this geographic zone.
PN2141
MR BORENSTEIN: That's right.
PN2142
THE COMMISSIONER: And it would only be faults that were attended to in that area that could be attributed - - -
PN2143
MR BORENSTEIN: Exactly.
PN2144
THE COMMISSIONER: - - - as income that would have been earned under your interpretation.
PN2145
MR BORENSTEIN: Exactly.
PN2146
THE COMMISSIONER: So you'd have to add all of those up and come to an aggregate. Because it would be very hard to put Mr Pugh's name on any particular one, wouldn't it? So let's say we've got this zone.
PN2147
MR BORENSTEIN: Yes.
PN2148
THE COMMISSIONER: It's a disputed zone, shall we say?
PN2149
MR BORENSTEIN: A disputed zone.
PN2150
THE COMMISSIONER: And we put some pins in there to show all the faults attended to over what period of time?
PN2151
MR BORENSTEIN: Two years.
PN2152
THE COMMISSIONER: Two years from?
PN2153
MR BORENSTEIN: Post-change.
PN2154
THE COMMISSIONER: Two years from 5 October 2011. And then we would aggregate all of those and then we would somehow or other allocate between all of these employees. How would we allocate it? Will we have to create - we'd have to get a statistician in to work out the weighted average of - - -
PN2155
MR BORENSTEIN: Well, we would say that it's possible. In the first instance our position is we would do an exact science, so we would say: these jobs happened during this week. That week Kyle was on availability and would have done them had the boundaries not changed.
PN2156
THE COMMISSIONER: Yes.
PN2157
MR BORENSTEIN: We would correspond those with Kyle's diaries or his time sheets and we'd say: well, if he's doing another job at that time and wouldn't have got it then he doesn't get compensated for that job. So it would be an exact - we would do an exact science. And that's - - -
PN2158
THE COMMISSIONER: That would be up to you to do, would it not?
PN2159
MR BORENSTEIN: Happy to do it. We've always been open to do it and
we - - -
PN2160
THE COMMISSIONER: Then you'd substitute everything with a coloured pin for each employee and you would assign a certain value of faults which they could have completed but for if they were on availability at that time.
PN2161
MR BORENSTEIN: Exactly.
PN2162
THE COMMISSIONER: All right. And your submission is that's what the agreement-makers intended.
PN2163
MR BORENSTEIN: We say that there's a clear intention for the clause to go beyond mere availability allowance. We say that the drafting of the words of the clause clearly - - -
PN2164
THE COMMISSIONER: All right. Look, I only wanted to ask you that question. So in fact Mr - that seems to be a slightly different approach to the one that you put before lunch in that you've taken into account the fact that there would have to be some accounting of the capacity of the employee to have done that.
PN2165
MR BORENSTEIN: Absolutely.
PN2166
THE COMMISSIONER: How would that work?
PN2167
MR BORENSTEIN: This goes to the subpoena that we have.
PN2168
THE COMMISSIONER: No, but how would it work theoretically? You can give me the algorithm.
PN2169
MR BORENSTEIN: Yes.
PN2170
THE COMMISSIONER: You've got Mr Pugh on availability allowance in the new area.
PN2171
MR BORENSTEIN: Yes.
PN2172
THE COMMISSIONER: He's on availability roster; he's working in the new area.
PN2173
MR BORENSTEIN: A reduced area, yes. It's not a different area, it's - - -
PN2174
THE COMMISSIONER: So he's working in the new area.
PN2175
MR BORENSTEIN: Yes.
PN2176
THE COMMISSIONER: And let's say it's day x, and on day x in the disputed zone there's a fault.
PN2177
MR BORENSTEIN: Yes.
PN2178
THE COMMISSIONER: But at that time Mr Pugh is actually attending to a fault.
PN2179
MR BORENSTEIN: Then the way it would operate - - -
PN2180
THE COMMISSIONER: So would you then say: okay, the fault - is there any calculation there? He's just cancelled out on that occasion, is he?
PN2181
MR BORENSTEIN: You cancel out the - - -
PN2182
THE COMMISSIONER: Cancel him out.
PN2183
MR BORENSTEIN: You cancel out the - yes, he wouldn’t get that money because he wouldn't have been - - -
PN2184
THE COMMISSIONER: He'd have been working in the new zone.
PN2185
MR BORENSTEIN: He would have already been taken - yes, he would have been - - -
PN2186
THE COMMISSIONER: In Benalla zone.
PN2187
MR BORENSTEIN: In the Benalla zone.
PN2188
THE COMMISSIONER: So he couldn't have done the fault in the - - -
PN2189
MR BORENSTEIN: That's correct, in the new Myrtleford zone - in the disputed zone.
PN2190
THE COMMISSIONER: You know, mathematically the exponential possibilities that come to mind are pretty extraordinary.
PN2191
MR BORENSTEIN: I suppose as part of this process one of the questions is: how are the parties to calculate the loss? That's one of the questions that is sought to be answered. We say that it - we don't say it won't be an onerous way of calculating it, but we say it's not to stop us doing it if we are right. But it's a matter of cross-reference and with all the information inputted into a spreadsheet it will work out whether or not Mr Pugh would have got that job or not by reason of whether he was engaged doing another job at the time.
PN2192
THE COMMISSIONER: It probably wouldn't quite reach the requirements to calculate the orbit of a satellite, but I imagine it wouldn't fall that far short.
PN2193
MR BORENSTEIN: Sorry, Commissioner?
PN2194
THE COMMISSIONER: I said I don't imagine it would go so far as to require the calculations necessary for the orbit of a satellite, but I'm not quite sure it would fall that far short.
PN2195
MR BORENSTEIN: I've never dealt with satellites before, but look, we would obviously get the necessary assistance to do it properly and we're happy to bear that cost if we're right. We don't shy away from that. We don't shy away from the fact that it is somewhat complicated and it is obviously much easier to calculate the loss of - - -
PN2196
THE COMMISSIONER: Was anything like this ever discussed? There's no evidence that any contemplation that this sort of calculation would ever be executed by anybody formed any part of the discussions between the parties, is there?
PN2197
MR BORENSTEIN: The evidence before you from Mr Hayes is that - - -
PN2198
THE COMMISSIONER: I mean this type of calculation, the necessity of it.
PN2199
MR BORENSTEIN: No. He never thought - I mean, he's obviously the creator of the clause. He never looked ahead and saw what the potential consequences would be and the potential way of calculating the remedy of it.
PN2200
THE COMMISSIONER: Yes. I don't know whether the spreadsheet would actually do the trick here. I think you might need to write some code.
PN2201
MR BORENSTEIN: It would have to have a few formulas within it that are maybe a fair way above my expertise. Mr Hayes, we submit, clearly sought to expand on Raffaelli's decision and we submit by the objective meaning of the words this falls within it.
PN2202
THE COMMISSIONER: Did he say that?
PN2203
MR BORENSTEIN: In his - - -
PN2204
THE COMMISSIONER: Did he say that in his evidence, that he sought to expand on the Raffaelli decision? I don't recall him saying that.
PN2205
MR BORENSTEIN: Well, I'm not sure.
PN2206
THE COMMISSIONER: On the contrary, my recollection is that he said he sought to capture it.
PN2207
MR BORENSTEIN: He based it on that one, but - - -
PN2208
THE COMMISSIONER: Yes. He wanted that in the agreement because the result of the Raffaelli decision was a custom and practice.
PN2209
MR BORENSTEIN: Yes, but - - -
PN2210
THE COMMISSIONER: It's my recollection of his evidence.
PN2211
MR BORENSTEIN: I'll just - - -
PN2212
THE COMMISSIONER: I don't recall him saying - and I sought to advance on that as follows.
PN2213
MR BORENSTEIN: Yes, well, his evidence in his statement is that - and I think he might have repeated this in his evidence - that the words would speak for themselves.
PN2214
THE COMMISSIONER: That's true, but I think he actually did give evidence about the Raffaelli decision and what he wanted to achieve in relation to the incorporation of terms in the agreement which reflected that decision.
PN2215
MR BORENSTEIN: Yes.
PN2216
THE COMMISSIONER: Now, it may be that I'm wrong about this because I'm going purely on my memory of his evidence at this point. And I'll inspect the transcript, but my recollection is he did not say, "I sought in addition thereto to incorporate any income or - - - "
PN2217
MR BORENSTEIN: I suppose - - -
PN2218
THE COMMISSIONER: " - - - anything of any kind."
PN2219
MR BORENSTEIN: I suppose that wouldn't be relevant anyway in what his intention was in the drafting.
PN2220
THE COMMISSIONER: Well, there's been a lot of examination and cross-examination about intention, and if it's all irrelevant then - - -
PN2221
MR BORENSTEIN: I'll come to that, there are some important words from the High Court about it. I think it's clear that he wanted to at least encapsulate the Raffaelli decision. My submission will be that he wasn't seeking to be limited to that, but I think the evidence is clear that he's made no statement either way to either side about whether he should be limited or not.
PN2222
THE COMMISSIONER: So is it tenable to say, then, that apart from the words of the agreement themselves, there's any evidence of a meeting of minds on this subject of overtime?
PN2223
MR BORENSTEIN: Well, I submit no. I submit there's obviously - I say there's no objective circumstances that would - - -
PN2224
THE COMMISSIONER: Say that it's either in or out.
PN2225
MR BORENSTEIN: My primary submission, as in my submissions in reply, is that these are all expectations and hopes and intentions of the parties, but they're not admissible. They're part of the negotiations.
PN2226
THE COMMISSIONER: There are two types of intentions of the parties, isn't there, and this is the error that I detect often when this matter comes under consideration, is there's the collective intentions of the parties and the individual intentions of the parties. So there's the mutual intention of the parties, and that's what's referred to - - -
PN2227
MR BORENSTEIN: I submit also that mutual intentions of the parties is not relevant. If there's - - -
PN2228
THE COMMISSIONER: But if that's the case doesn't that stand against all the authority?
PN2229
MR BORENSTEIN: No. Well, I might - - -
PN2230
THE COMMISSIONER: Isn't the authority the proposition that it's the intention of the agreement-makers that is to be discerned?
PN2231
MR BORENSTEIN: Well, no. In my submission it's not - mutual intentions of the parties is not the relevance, it's the terms of the agreement as well as objective circumstances that surround it. I might just take you to the relevant parts of my submissions which deal with the authorities on the issue and deal with that - - -
PN2232
THE COMMISSIONER: I don't know we need to go through all of them, I just want you to just encapsulate what you say the appropriate approach is.
PN2233
MR BORENSTEIN: Yes.
PN2234
THE COMMISSIONER: Because my recollection is that the authorities stand for the proposition that if there's any issue of ambiguity that arises from the text then it's ultimately to be resolved by reference to be intention of the agreement-makers, and that's consistent with a purposive approach to statutory interpretation and - - -
PN2235
MR BORENSTEIN: The object of the transaction and like - if there's a mutual understanding of the object of the transaction, that's an objective fact that can come into it.
PN2236
THE COMMISSIONER: Yes, but you're using different words, that's what I'm saying.
PN2237
MR BORENSTEIN: But if two parties get together and say: this is what we intend this clause to mean. We'll put it in writing but we've got these words in the agreement; and that agreement goes out to a vote to 500 employees who don't see that site agreement, they vote on the words that they're talking about, there's a real risk that people are voting on a document that doesn't meet - - -
PN2238
THE COMMISSIONER: Well, the argument there is it's not the mutual intention of one of the parties, which is the employees, because the bargaining representatives are not the parties.
PN2239
MR BORENSTEIN: Exactly right.
PN2240
THE COMMISSIONER: The parties are the employer and the employees.
PN2241
MR BORENSTEIN: Yes, that's right. And in this situation we don't have any mutual - (1) we don't have any mutual intentions on behalf of the relevant - - -
PN2242
THE COMMISSIONER: I hear what you say, but the distinction I'm making is between the subjective intention of individual persons - - -
PN2243
MR BORENSTEIN: Yes.
PN2244
THE COMMISSIONER: - - - who are involved in the process by which the agreement arises - - -
PN2245
MR BORENSTEIN: Yes.
PN2246
THE COMMISSIONER: - - - and the mutual intentions of the parties to the agreement.
PN2247
MR BORENSTEIN: Now, those - - -
PN2248
THE COMMISSIONER: So the intentions of a lawyer who might represent one side or the other are not to the point.
PN2249
MR BORENSTEIN: No.
PN2250
THE COMMISSIONER: The intention of either the employer or the employees - and preferably both - is very much to the point. True? If it needs to be ascertained beyond the text.
PN2251
MR BORENSTEIN: My primary submission is that if those mutual intentions are subject - so the subjective mutual intentions of the parties, then I'm saying that they would still - - -
PN2252
THE COMMISSIONER: That's right. You can't go out and ask each employee what their intentions were.
PN2253
MR BORENSTEIN: No. But if it's a mutual subjective - - -
PN2254
THE COMMISSIONER: No, it's an objective test, I agree with you.
PN2255
MR BORENSTEIN: And I suppose you give those objective people the intention that the objective surrounding circumstances necessarily identify and allow you to give those people that intention. But I might just quickly go through my submissions - - -
PN2256
THE COMMISSIONER: You don't need to repeat them, I've already read them.
PN2257
MR BORENSTEIN: I'll just - - -
PN2258
THE COMMISSIONER: You've got another submission to hand up?
PN2259
MR BORENSTEIN: It's just a sort of a combined submission and if I could just emphasise the few parts of it, that would be great.
PN2260
THE COMMISSIONER: Yes. So this is a new document?
PN2261
MR BORENSTEIN: This is a new document.
PN2262
THE COMMISSIONER: Yes.
PN2263
MR BORENSTEIN: It's 90 per cent - - -
THE COMMISSIONER: We'll mark it, then. A13, the applicant's submissions, putting on February.
EXHIBIT #A13 APPLICANT'S SUBMISSIONS DATED 21/02/2013
PN2265
MR BORENSTEIN: Thank you, Commissioner. I have a - - -
PN2266
THE COMMISSIONER: I will read them, I promise.
PN2267
MR BORENSTEIN: No, that's fine.
PN2268
THE COMMISSIONER: So you don't need to read them to me.
PN2269
MR BORENSTEIN: No, okay.
PN2270
THE COMMISSIONER: You take me to the pithy parts.
PN2271
MR BORENSTEIN: Yes.
PN2272
THE COMMISSIONER: Are you handing up some authorities?
PN2273
MR BORENSTEIN: Can I hand up some authorities?
THE COMMISSIONER: Very well. I'll mark this too, A14, authorities of the applicant.
EXHIBIT #A14 AUTHORITIES OF THE APPLICANT
PN2275
MR BORENSTEIN: Thank you, Commissioner.
PN2276
THE COMMISSIONER: Is this all your authorities or - - -
PN2277
MR BORENSTEIN: Yes, it does.
PN2278
THE COMMISSIONER: - - - do you refer to other authorities in your submissions?
PN2279
MR BORENSTEIN: Yes, this includes them all.
PN2280
THE COMMISSIONER: And including the outline?
PN2281
MR BORENSTEIN: Yes.
PN2282
THE COMMISSIONER: All right. So it's A14 and it's authorities of the applicant.
PN2283
MR BORENSTEIN: Yes, it includes all the cases that I've - - -
PN2284
THE COMMISSIONER: Referred to, both in the outline and in the submission.
PN2285
MR BORENSTEIN: That's right. And I know we've just had a discussion on this, obviously we referred to the decision in Toll as the starting point and we would say that obviously in this situation we want to give the meaning to the terms of the agreement that would determine what a reasonable person would have understood them to mean. Again that talks about the surrounding circumstances known to the parties, the purpose and the object of the transaction. In terms of the issues of negotiations and the like and this, sort of, drawing the line about what goes in and what goes out, which is not without some complexity, in paragraph 7 I refer to the secured income decision where they dealt with a situation where obviously all the evidence about the negotiations at first instance was brought in, and obviously Mason J said that:
PN2286
What was said and done during the course of negotiations leading up to the making of the contract -
PN2287
he said that that is not evidence of the surrounding circumstances. So we're the same here, we have evidence of what was done during the course of negotiations and leading up to the making of the common law contract, that includes exhibit A7 and the like. And in that case, like here, it was attempted to be said to be evidence of the surrounding circumstances and Mason J said:
PN2288
In truth the evidence is not evidence of surrounding circumstances but it is evidence of the antecedent oral negotiations and expectations of the parties and as such it cannot be used for the purpose of destroying the words of the written contract.
PN2289
So we say that that is exactly what exhibit A7 falls within, it's an expectation of what one party - and on their case, two parties - expected the words of the written contract to mean. We say that exhibit A7 should be given no weight at all in terms of interpreting the agreement. At paragraph 8 I then have an excerpt of the decision in Codelfa Constructions and again there was the problem at paragraph 23 of the decision that arises with respect to the evidence of prior negotiations. You'll see there that it said:
PN2290
Insofar as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations though not perceivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by what emerged in the contract itself.
PN2291
And then it refers to the parol evidence rule and having effect if they're inadmissible in aid of construction. And at the end of that paragraph 24 of that statement by Mason J he says:
PN2292
We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time-consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.
PN2293
So we submit that - I think it's paragraphs 8 and 12 to 20 and the exhibits referred therein of Ms Butler's affidavit should not be given any weight in assisting interpretation of the agreement.
PN2294
THE COMMISSIONER: Is there a quote from the Kucks case anywhere in here?
PN2295
MR BORENSTEIN: Sorry, Commissioner?
PN2296
THE COMMISSIONER: Is critical case from the Kucks case in the materials?
PN2297
MR BORENSTEIN: Which case?
PN2298
THE COMMISSIONER: K-u-c-k-s.
PN2299
MR BORENSTEIN: Kucks case is in - - -
PN2300
THE COMMISSIONER: Because that seems to be the popular formulation, doesn't it, in this jurisdiction? It's pretty much binding on me, in fact.
PN2301
MR BORENSTEIN: It is an oft-quoted and it's in - - -
PN2302
THE COMMISSIONER: Well, I think it's actually binding on me because I think there's full bench authority that that is the approach in this jurisdiction that I am to follow. I don't think I can sort of just read it and say I've taken into account, I think I actually have to follow it.
PN2303
MR BORENSTEIN: In the original submissions that I filed at paragraph 9 it refers to an excerpt of a decision of Lawler VP. I think the Kucks case is a decision of the Federal Court.
PN2304
THE COMMISSIONER: It is.
PN2305
MR BORENSTEIN: And I haven't got a copy - - -
PN2306
THE COMMISSIONER: Is it Madgwick J?
PN2307
MR BORENSTEIN: Yes, Madgwick J. I have an excerpt - - -
PN2308
THE COMMISSIONER: Did you quote it, Mr Brotherson?
PN2309
MR BROTHERSON: I do.
PN2310
THE COMMISSIONER: I thought you did. That's in your outline, is it?
PN2311
MR BROTHERSON: It is, and I'll shortly provide a folder that does have a copy of the decision.
PN2312
THE COMMISSIONER: What I'm trying to do, just as you're making this submission, is to reconcile what I'm reading in your submission with the Kucks case.
PN2313
MR BORENSTEIN: Yes. I've got an excerpt of it in my submission but it's only an excerpt so it might be - - -
PN2314
MR BROTHERSON: Commissioner, if it assists I'm happy to hand up our folder of authorities now which has the Kucks decision - - -
PN2315
THE COMMISSIONER: No, it's okay, I've actually got it. It's on page 4 of your outline, thank you.
PN2316
MR BROTHERSON: That's right.
PN2317
THE COMMISSIONER: So it was applied to certified agreements by the Federal Court, Northrop J.
PN2318
MR BORENSTEIN: Yes. In terms of Kucks, I don't necessarily see it as being inconsistent with the principles laid down in Toll and Codelfa.
PN2319
THE COMMISSIONER: I think the critical thing here is that it says - and it's well rehearsed and accepted by the courts - that, "The search is for the meaning intended by the framers of the document."
PN2320
MR BORENSTEIN: Yes, "the framers" being an objective, not the - - -
PN2321
THE COMMISSIONER: It's an objective test, but nevertheless it is about the intention; not necessarily the intention of Mr Hayes or Ms Butler - - -
PN2322
MR BORENSTEIN: No.
PN2323
THE COMMISSIONER: - - - but the intention in an abstract legal sense of the framers of the document.
PN2324
MR BORENSTEIN: Of a hypothetical framer of the document, being someone given - aware of the objective facts and circumstances that surround the document.
PN2325
THE COMMISSIONER: And, "It is justifiable to read the award (substitute agreement) to give effect to it's evident purposes."
PN2326
MR BORENSTEIN: That's right.
PN2327
THE COMMISSIONER: "It's evident purposes having regard to such context, and that is the context being the relevant industry
and industrial relations environment." So in a way there's a little bit of a (indistinct) of this idea that, you know, the
immediate factual context is completely and utterly irrelevant, which tends to apply where the courts are making decisions about
the application of statutes, doesn't it? And I think some of the decisions that you are relying upon a statutory interpretation,
are they not? Workers compensation law, for
instance - - -
PN2328
MR BORENSTEIN: Some of the cases are - - -
PN2329
THE COMMISSIONER: - - - taxation law. So the point that I'm making is that it seems to me reasonably tolerable that the law in relation to the construction of industrial instruments is different to the law that applies to the construction of statutes.
PN2330
MR BORENSTEIN: Yes. I think the cases that I've - dealing with the interpretation, I think are dealing with the common law contracts.
PN2331
THE COMMISSIONER: Well, once again the distinction applies except that substitute "common law" for "statute law". Whereas these are industrial instruments, they're not a product of - - -
PN2332
MR BORENSTEIN: They're a different nature, they're not a contract.
PN2333
THE COMMISSIONER: Exactly. They're - - -
PN2334
MR BORENSTEIN: Statutory agreement - - -
PN2335
THE COMMISSIONER: Yes, they have their own character. They have a distinct character from contracts and from statute law.
PN2336
MR BORENSTEIN: Yes. No, I - - -
PN2337
THE COMMISSIONER: Industrial instruments attract their own jurisprudence.
PN2338
MR BORENSTEIN: That's right. I wouldn't shy away from that.
PN2339
THE COMMISSIONER: So imposing statutory interpretation on the one hand or common law construction of contractual obligations on the other, it seems to me by Kucks is rejected.
PN2340
MR BORENSTEIN: Well, I - - -
PN2341
THE COMMISSIONER: In favour of a particular approach to an industrial instrument.
PN2342
MR BORENSTEIN: I think generally the courts have accepted that there is significant overlap between the principal applied to interpreting contracts and that to industrial instruments.
PN2343
THE COMMISSIONER: Well, can you quote authority for that?
PN2344
MR BORENSTEIN: I will - at paragraph 8 of my first submissions - - -
PN2345
THE COMMISSIONER: Your outline?
PN2346
MR BORENSTEIN: Sorry, at page 8 - - -
PN2347
THE COMMISSIONER: Page 8 of your outline?
PN2348
MR BORENSTEIN: - - - of my outline - - -
PN2349
THE COMMISSIONER: Just bear with me for a moment while I find your outline.
PN2350
MR BORENSTEIN: And this may be what - - -
PN2351
THE COMMISSIONER: You go ahead.
PN2352
MR BORENSTEIN: It's an excerpt of a decision from Lawler VP who says at paragraph 15:
PN2353
In summary the general principles governing the construction of contracts laid down by the High Court in Codelfa apply to the construction of industrial agreements. However, consistent with the approach in Kucks and Short v Hercus an industrial agreement must always be construed in context.
PN2354
And then:
PN2355
The context of the particular provisions within the agreement as a whole and the context in which the agreement was made, including any relevant statutory and historical context.
PN2356
THE COMMISSIONER: Has that particular importation of the contractual interpretive model been endorsed by a full bench of this tribunal, or has the full bench merely endorsed the Kucks reasoning of the Federal Court?
PN2357
MR BORENSTEIN: I think - I'm just looking at the way that his Honour Lawler VP went, and he started off with - he started off with - - -
PN2358
THE COMMISSIONER: Is that the Vice President speaking for himself, or is the full bench?
PN2359
MR BORENSTEIN: This is him speaking for himself, a single. Sorry, this was - actually, I think this is an excerpt from the Telstra full bench, Telstra v CEPU full bench. I haven't got the - no, sorry. Sorry, Commissioner, I can't find the exact position where he says it. I mean, Codelfa is obviously an oft-quoted case as well and I'm not sure if it's actually referred to in the body of Kucks as well. I think it might be, but without going through it - - -
PN2360
THE COMMISSIONER: Or I might be wrong, but rummaging around in my recollection I think the endorsed passage is the Kucks passage, and that as far as I recall it, that is the full bench authority in this jurisdiction.
PN2361
MR BORENSTEIN: Yes.
PN2362
THE COMMISSIONER: Our Vice President may well have imported an additional dimension into that, but whether or not that's actually been endorsed full bench legal, I don't know.
PN2363
MR BORENSTEIN: I think Toll and Codelfa are both cases that have been referred to by the commission, whether by full bench or not, and I might have a look at that and maybe give a quick note after the submissions just as to that. But there obviously oft-quoted, and they are all very similar, probably, but I suppose the question comes down to they are different types of legal documents. We would say that certainly with certified agreements having employees as parties, the idea of reading down the objective meaning of the words to reflect alleged mutual understanding as to the meaning of those words is also a risk.
PN2364
We would urge against that because there are employees who vote on the agreement who get a document before them, they read the document and they are pretty much well limited to the objective meaning of the words. In this situation, having read clause 12, we say that the objective meaning of those words would lead them to the understanding that it would cover more than just availability allowance.
PN2365
THE COMMISSIONER: Isn't there a bit of a contradiction between the idea that using contract law runs against the popularity of the Kucks v CSR decision? Because if you read it, even in the decision that you quote of Lawler VP's at page 5 of your outline you see the full Federal Court there reiterating the proposition that the drafters of the document are not lawyers and that it's not about legal niceties and jargon.
PN2366
MR BORENSTEIN: That's right, it's to be - that's right, I mean, you create this hypothetical person and give them the intention or the mind that they are a person of practical bent of mind and in terms of referring to the relevant industry, well, that's an objective fact. You can place the framers in this - we don't dispute that you can place this hypothetical framer of the document in the power industry; we accept that it's an objective fact that there was a decision in 1998 by Raffaelli C; and we accept that you can give this hypothetical person knowledge of that document, but that doesn't - we submit it doesn't therefore follow that that person would seek to limit this clause to the alleged finding by Raffaelli C, because that's where you get into the intentions or expectations.
PN2367
Obviously this person has knowledge of that decision; is in the power industry; and there are some objective surrounding circumstances that you place with these people. We had a decision in the Federal Court regarding the bogus Blue Glue dispute where in effect a deed of release was signed and her Honour - I can't remember her name - made it clear that all the - obviously people's intentions and the like during the negotiations were inadmissible, and that was accepted. She did impute knowledge of the - knowledge about the system - about the Blue Glue system - so the security system. So she imputed to the framer that they were aware of what the Blue Glue security system did.
PN2368
So if something wasn't mentioned about it then she held: well, therefore it wasn't intentionally left out. But that was the sort of approach she made and she said: not going into whether you guys wrote a letter this way or the other way, the fact is that everyone knew about the Blue Glue system, they'd been taken through it and therefore they were imputed with that knowledge, so there's the hypothetical framer. So I suppose we say it is a process of whereby - - -
PN2369
THE COMMISSIONER: Well, your difficulty arising out of that, notwithstanding the fact that we don't have the decision before us, is Mr Hayes was well aware of the status quo when he negotiated these agreements, wasn't he?
PN2370
MR BORENSTEIN: He was - - -
PN2371
THE COMMISSIONER: He was taken to be - - -
PN2372
MR BORENSTEIN: He was aware of the fact that the company was - I'm not sure if we accept that - - -
PN2373
THE COMMISSIONER: Well, he knew about the Raffaelli decision.
PN2374
MR BORENSTEIN: But if the evidence says he was aware that the only allowance was available - sorry, they were only paying the allowance for a loss of availability. So if he was aware of that and he was aware of the decision, the question then becomes: well, did he write the clause - would the hypothetical person have written a clause in the way it did if it was to reflect that circumstance?
PN2375
THE COMMISSIONER: Well, there's no evidence that he didn't.
PN2376
MR BORENSTEIN: We say that's irrelevant.
PN2377
THE COMMISSIONER: On the contrary, the evidence would tend to suggest that he at the very least intended to incorporate the effect of the - - -
PN2378
MR BORENSTEIN: To it least cover that.
PN2379
THE COMMISSIONER: At the very least.
PN2380
MR BORENSTEIN: Yes.
PN2381
THE COMMISSIONER: But there's no evidence that he sought to extend it.
PN2382
MR BORENSTEIN: But evidence that he sought to extend it would be inadmissible because we'd say that's subjective, that's his intent to do so. But - - -
PN2383
THE COMMISSIONER: But would the evidence of the fact that he was aware of the history of the matter be applicable?
PN2384
MR BORENSTEIN: Well, yes. The hypothetical person would be given the knowledge of the history of the matter. And then you look at the words and say, "Well, do the words reflect that history?" We submit they don't. We submit that the words in - - -
PN2385
THE COMMISSIONER: No, I understand that.
PN2386
MR BORENSTEIN: Yes. We say that's the way to interpret it. We say, "They've been given the history, now let's look at the terms of the agreement. They don't reflect the history." There's a clause 3.6 which details it strictly to what the company is now saying it should apply. They use the word "allowance" and it's tight as tight as can be and this clause doesn't, so that's a clear objective indicator that we say it's broader, it's got to be broader. It's got to apply to things outside of the availability allowance; why else would they have used the words "income ordinarily received"?
PN2387
We've put that in our submissions, but it's a very broad phrase and we submit that in a situation where it's clear in the evidence
that these employees work a lot of overtime, that it is not unreasonable for a person - this hypothetical person - to seek to draft
a clause that compensates people where they lose this overtime but they've been receiving. And we submit that "income ordinarily
earned" obviously is wider than "allowance" and the company accepts that, so on the one hand the company is saying,
"Oh no, this clause is meant to be limited to just allowances," but then on the other hand in their submissions they say,
"Well, we accept 'income ordinarily' could go beyond an allowance." So the company's asserted
intention - - -
PN2388
THE COMMISSIONER: It comes down to the meaning of "ordinarily earned".
PN2389
MR BORENSTEIN: Yes. I mean - - -
PN2390
THE COMMISSIONER: On your submission that's it.
PN2391
MR BORENSTEIN: Yes. On our submission it must - - -
PN2392
THE COMMISSIONER: Proper construction of the meaning of those words.
PN2393
MR BORENSTEIN: Yes. We say it's at least wider than "allowance". Now, if there was rostered overtime, if there was a situation where, let's say - - -
PN2394
THE COMMISSIONER: Well, it's conceded that if everybody was rostered to work, say as day workers, Monday to Friday, and there'd been a restructure of their rosters which meant they worked a six day week and the sixth day was overtime - - -
PN2395
MR BORENSTEIN: Yes.
PN2396
THE COMMISSIONER: - - - then it's conceded that that would be income ordinarily earned.
PN2397
MR BORENSTEIN: Yes, but I don't think it's - if - - -
PN2398
THE COMMISSIONER: The real question is: is unpredictable overtime income that could be properly construed as ordinarily earned.
PN2399
MR BORENSTEIN: Yes, and I'll - that's right, Commissioner, and we certainly say that the use of the words "income ordinarily earned" is wider - it is wide enough to encapsulate overtime.
PN2400
THE COMMISSIONER: This is all conditioned upon there being an impact on the employees, isn't it?
PN2401
MR BORENSTEIN: Yes, well - - -
PN2402
THE COMMISSIONER: Of the restructure.
PN2403
MR BORENSTEIN: Yes, and certainly - - -
PN2404
THE COMMISSIONER: And so if all of the employees were, for instance, to earn more overtime after the restructure, that would be an impact, I would have thought.
PN2405
MR BORENSTEIN: That wouldn't be - if they earned more - - -
PN2406
THE COMMISSIONER: Would that be an impact?
PN2407
MR BORENSTEIN: Well, I would say that they - - -
PN2408
THE COMMISSIONER: Let's say they earned double, would that be an impact?
PN2409
MR BORENSTEIN: Well, we would say that but for the restructure they might have earned triple, so the impact would be the difference between the triple and the double. Now, I understand that I'd not gain a lot of sympathy from my friends to this side, and maybe in front of me as well, but - - -
PN2410
THE COMMISSIONER: No, I'm just asking you a very simple question. Would a restructure that led to the employees working twice as much - call that overtime - would that be an impact on the employees?
PN2411
MR BORENSTEIN: Are you saying a different type of restructure where things are changed?
PN2412
THE COMMISSIONER: Yes.
PN2413
MR BORENSTEIN: I think it depends on how you define - what type of restructure it is. I think in this situation where the restructure is - - -
PN2414
THE COMMISSIONER: It can be any restructure, can't it? I mean, imagine the boundaries had doubled or the number of people on availability is halved because more people decide to relocate and - - -
PN2415
MR BORENSTEIN: I think - - -
PN2416
THE COMMISSIONER: - - - the people work twice as much call-out overtime. That's an impact on them as a result of the restructure, isn't it?
PN2417
MR BORENSTEIN: I think it's got to be a causation thing, and the restructure here is the change of the boundaries, and that has caused them to lose work.
PN2418
THE COMMISSIONER: Yes, but we're actually asking about the effect of whatever - the restructure.
PN2419
MR BORENSTEIN: Yes, the cause of it, I see.
PN2420
THE COMMISSIONER: And whether or not it can be properly characterised as an impact in a certain situation, which is where they actually work twice as much call-out overtime. That's got to be an impact, hasn't it?
PN2421
MR BORENSTEIN: Yes. I agree, there has to be - - -
PN2422
THE COMMISSIONER: Okay. So suddenly you're working twice as many call-outs, or at least twice as many call-out hours.
PN2423
MR BORENSTEIN: Yes, but if that's a cause of the restructure.
PN2424
THE COMMISSIONER: And it's caused by a restructure.
PN2425
MR BORENSTEIN: If you would have done that otherwise then it's not a - - -
PN2426
THE COMMISSIONER: I'm saying it's caused by the restructure.
PN2427
MR BORENSTEIN: If it's caused by the restructure that's an impact.
PN2428
THE COMMISSIONER: All right. So the employees would get two years' bonus for that. Is that right?
PN2429
MR BORENSTEIN: Well, if they've lost money, well then - - -
PN2430
THE COMMISSIONER: Why do they have to lose money?
PN2431
MR BORENSTEIN: I think they're only compensated - - -
PN2432
THE COMMISSIONER: Right, because of the word compensation.
PN2433
MR BORENSTEIN: Yes.
PN2434
THE COMMISSIONER: Right.
PN2435
MR BORENSTEIN: We accept that we have to lose money. But - - -
PN2436
THE COMMISSIONER: So you have to rely on the word compensation to avoid the interpretation that I've just put to you, that Mr Pugh is suddenly earning twice as much from call-out overtime, but the clause operates because of the impact of the restructure to afford him two years of something.
PN2437
MR BORENSTEIN: We would say that the restructure has not - for the work that he's getting in the area that he worked before the restructure - - -
PN2438
THE COMMISSIONER: Yes, but you see - - -
PN2439
MR BORENSTEIN: - - - in the same area, that's not - - -
PN2440
THE COMMISSIONER: - - - you're reading in a whole lot of things to the clause that aren't there. Your proposition to me is if there is a restructure and it has an impact upon an employee, the employees are entitled to two years' income ordinarily earned.
PN2441
MR BORENSTEIN: Yes.
PN2442
THE COMMISSIONER: But on the other hand you don't concede that it's a net sum.
PN2443
MR BORENSTEIN: No, we say - - -
PN2444
THE COMMISSIONER: So the consequence is that if Mr Pugh earned more as a result of the restructure he would nevertheless still receive two years' of something. Is that right? So he would get a bonus.
PN2445
MR BORENSTEIN: Well - - -
PN2446
THE COMMISSIONER: He would get a bonus for working and earning more overtime of two years' income ordinarily earned. So he'd get all the additional overtime plus an amount of money for nothing.
PN2447
MR BORENSTEIN: Well, an amount of money for what he would have received had there been no restructure.
PN2448
THE COMMISSIONER: But isn't' he getting paid twice?
PN2449
MR BORENSTEIN: No.
PN2450
THE COMMISSIONER: Isn't that - - -
PN2451
MR BORENSTEIN: We're not saying he gets paid - we say that if the restructure never happened, how much would he have received in the following two years?
PN2452
THE COMMISSIONER: But the difficulty with that is it's incompatible with the net sum concept that you have disavowed. You see, I can't see how you can get to a remedy without someone getting a windfall gain in certain circumstances. It's that intention of the framers of the agreement that I would have to uphold in order to accede to your proposition as to how the agreement should be interpreted. So it means that if Mr Pugh is actually making more money after the restructure, that he nevertheless gets paid additional amounts of money, which are purely a windfall, aren't they?
PN2453
MR BORENSTEIN: Well, we submit that - I think it's always going to be a windfall because it's always money in compensation for - I mean, even on the - - -
PN2454
THE COMMISSIONER: No, it's not always going to be a windfall.
PN2455
MR BORENSTEIN: (indistinct)
PN2456
THE COMMISSIONER: If on your construction - if the proper construction is Mr Pugh gets nothing after the restructure except the
availability allowance
then - - -
PN2457
MR BORENSTEIN: Well, then he gets paid out two years of the availability allowance without having to work it.
PN2458
THE COMMISSIONER: That's right, but that's conditional on the fact that he suffers a loss, isn't it?
PN2459
MR BORENSTEIN: Yes, that's right, that's conditional on what he receives in the next two years. I believe it is.
PN2460
THE COMMISSIONER: You see, I'm still trying to fathom whether or not you are actually arguing for the idea that Mr Pugh, if he earned more in call-out overtime after the restructure, would still be entitled to a payment.
PN2461
MR BORENSTEIN: If Mr Pugh earned more afterwards in the reduced area he would still be entitled to an amount calculated on how much he would have received had he been working in both the reduced area and the extra bit. And that extra bit is what he would receive as compensation. He wouldn't obviously receive what he has already earned doing the reduced area, but on top of that he would have earned what he would have earned had he kept that reduced area. And that puts him in the position he would have been in had the restructure not happened.
PN2462
THE COMMISSIONER: Does it?
PN2463
MR BORENSTEIN: Yes, that's what - yes. The remedy that we seek is for the employees to be in the position they would have been in had the restructure not occurred for two years.
PN2464
THE COMMISSIONER: Is it characterised as a payment of compensation?
PN2465
MR BORENSTEIN: "The employee will be entitled to two years' compensation for the income they would have ordinarily earned."
PN2466
THE COMMISSIONER: Surely compensation has got to be for some sort of loss for an income they otherwise would have earned. I mean, is there any form of compensation going around which is additional? I mean, workers compensation is about your lost income, isn't it?
PN2467
MR BORENSTEIN: It's loss of earning. It is a loss of earnings. If someone is - you know, if you are prevented from getting a pay increase or the like you get compensated for loss of earnings even though you're receiving the same as you might have got the previous year. If a certain discrimination if hadn't occurred you would have got a promotion or a wage increase or the like, then you get - - -
PN2468
THE COMMISSIONER: Of if you'd been dismissed from your employment unfairly you'd get the income you lost as a result.
PN2469
MR BORENSTEIN: In terms of remedies for unfair dismissal, yes, you get the income you lost.
PN2470
THE COMMISSIONER: That's what compensation is - - -
PN2471
MR BORENSTEIN: That's right.
PN2472
THE COMMISSIONER: - - - it's referred to as compensation in the Act, isn't it?
PN2473
MR BORENSTEIN: That's right.
PN2474
THE COMMISSIONER: So it's contemplated it's a loss of income which is compensated for.
PN2475
MR BORENSTEIN: Yes, that's right. In an unfair dismissal they'll work out - or a discrimination claim you work out what potential earnings you had in the future and you take off what you have received in that period, and that's how you mitigate your loss. Now - - -
PN2476
THE COMMISSIONER: The difficulty also here is that the overtime is all mixed up, isn't it?
PN2477
MR BORENSTEIN: Well, the overtime varies, but we say it is normal and customary enough to fall within the definition of "ordinarily earned".
PN2478
THE COMMISSIONER: But the point that I'm making is that there are different types of overtime, is there not?
PN2479
MR BORENSTEIN: Yes, there is, Commissioner.
PN2480
THE COMMISSIONER: There's the overtime that's worked during a
call-out - - -
PN2481
MR BORENSTEIN: There's planned and unplanned, yes.
PN2482
THE COMMISSIONER: - - - and there is the overtime that's worked otherwise and it all adds up to a certain amount of overtime per year.
PN2483
MR BORENSTEIN: That's correct. We are only talking about overtime worked - - -
PN2484
THE COMMISSIONER: But the clause doesn't really say that, though, does it? If you rely on your interpretation it refers to all income.
PN2485
MR BORENSTEIN: It could potentially cover all income.
PN2486
THE COMMISSIONER: So in other words if the planned overtime went away; for example, as a matter of policy there was no planned overtime - - -
PN2487
MR BORENSTEIN: There'd have to be - - -
PN2488
THE COMMISSIONER: - - - that would be compensable too.
PN2489
MR BORENSTEIN: Well, there'd have to be a restructure - - -
PN2490
THE COMMISSIONER: In this case there is a restructure, but if there'd been no overtime worked over the next two years then on your interpretation then the whole two years of overtime - - -
PN2491
MR BORENSTEIN: Where it's something that is being ordinarily earned, yes.
PN2492
THE COMMISSIONER: If it's caused by the restructure - - -
PN2493
MR BORENSTEIN: If it's caused by the restructure.
PN2494
THE COMMISSIONER: - - - or relocation. So if the overtime was restructured. So to take away all the planned overtime there'd have to be two years' compensation for that. Is that right?
PN2495
MR BORENSTEIN: That is a potential reading on our interpretation.
PN2496
THE COMMISSIONER: I think it's got to go with your reading in relation to
the - - -
PN2497
MR BORENSTEIN: It does, it does. And obviously we don't - we can't shy away from the fact that it may - - -
PN2498
THE COMMISSIONER: So the proper construction is that it's two years of some projected earnings, isn't it? Two years of projected earnings of some sort, because it's a prospective proposition, "would have earned".
PN2499
MR BORENSTEIN: Yes. "Would have ordinarily earned", yes. So it seems to be prospective. We submit that it can be. It's open to - - -
PN2500
THE COMMISSIONER: In fact, the remedy would have to wait and see, wouldn't it?
PN2501
MR BORENSTEIN: That's how - - -
PN2502
THE COMMISSIONER: You'd have to wait for two years before you be able to calculate this, wouldn't you?
PN2503
MR BORENSTEIN: That's correct.
PN2504
THE COMMISSIONER: Right. So you couldn't start calculating this according to the methodology that you have in mind until 5 October 2013, and then you'd have to say, "All right, what would these employees have earned between 5 October 2011 and 5 October 2013? Even if they earned a lot more than that we're still going to pay them a certain amount of money."
PN2505
MR BORENSTEIN: You're going to work out what they would have received had the restriction not happened.
PN2506
THE COMMISSIONER: Even if it was less?
PN2507
MR BORENSTEIN: Well, that's the primary way we say it should be calculated. The other alternative - - -
PN2508
THE COMMISSIONER: Okay, we've got two years, 5 October 2011 to 5 October 2013. Let us assume, for example, that employees - and, you know, this is purely just for illustration purposes.
PN2509
MR BORENSTEIN: Yes.
PN2510
THE COMMISSIONER: It bears no correlation to any thoughts of mind about what people earn, it's just for convenience of arithmetic discussion - everybody is earning 100,000 a year and they earned 110,000 in each of the years - - -
PN2511
MR BORENSTEIN: Subsequent to the restructure.
PN2512
THE COMMISSIONER: What are they to be compensated for?
PN2513
MR BORENSTEIN: The work that they would have performed if it can be proven that - - -
PN2514
THE COMMISSIONER: But it's not work, it is income that has to be - - -
PN2515
MR BORENSTEIN: Sorry. You're correct, Commissioner. If they - - -
PN2516
THE COMMISSIONER: So they've got - over those two years they were earning prior to that 100,000 a year.
PN2517
MR BORENSTEIN: That's correct.
PN2518
THE COMMISSIONER: But over the two years they've earned 110,000 in each year.
PN2519
MR BORENSTEIN: Yes.
PN2520
THE COMMISSIONER: What are they being compensated for?
PN2521
MR BORENSTEIN: If they can prove that had the restructure not occurred they would have received 120,000 in those two years, they would get the compensation of the 10,000.
PN2522
THE COMMISSIONER: I see, they get 10,000 each. So that is actually a net sum.
PN2523
MR BORENSTEIN: Yes.
PN2524
THE COMMISSIONER: All right, so that's what you're saying.
PN2525
MR BORENSTEIN: That's what I'm saying.
PN2526
THE COMMISSIONER: It is a net sum.
PN2527
MR BORENSTEIN: Yes.
PN2528
THE COMMISSIONER: Right. It's not - - -
PN2529
MR BORENSTEIN: They don't get the whole lot.
PN2530
THE COMMISSIONER: I can't work out how you could ever arrive at a number - apart from that proposition of the disputed zone with the coloured pins in it, which would obviously have to have some sort of - - -
PN2531
MR BORENSTEIN: String.
PN2532
THE COMMISSIONER: - - - piece of string going back to the availability roster in the non-disputed zone.
PN2533
MR BORENSTEIN: Yes, they would have.
PN2534
THE COMMISSIONER: It just seems heinously complicated to me, but - so you're saying that if they can prove that they would have earned more in that two years as total income, because it's hard to imagine anything on your interpretation that wouldn't fall within the categorisation of "ordinarily earned".
PN2535
MR BORENSTEIN: Yes, that may be so, Commissioner - - -
PN2536
THE COMMISSIONER: I mean, your characterisation - - -
PN2537
MR BORENSTEIN: - - - we have limited - - -
PN2538
THE COMMISSIONER: - - - you know, the planned overtime would have to fall within that and the call-out overtime would have to fall within that, wouldn't it?
PN2539
MR BORENSTEIN: That's right. Well, all those figures will be the same in both. But yes, that's right.
PN2540
THE COMMISSIONER: So in fact the way you would construe the clause is that it's total income.
PN2541
MR BORENSTEIN: Yes.
PN2542
THE COMMISSIONER: So "income ordinarily earned" in the relevant factual circumstances on your interpretation is total income.
PN2543
MR BORENSTEIN: That is - - -
PN2544
THE COMMISSIONER: Because they ordinarily would were planned overtime, wouldn't they?
PN2545
MR BORENSTEIN: Yes, and those figures should all be - - -
PN2546
THE COMMISSIONER: And there's no other source of income, is there?
PN2547
MR BORENSTEIN: No, not that I'm aware of - - -
PN2548
THE COMMISSIONER: Is there ordinary time rates? Do they receive any shift payments?
PN2549
MR BORENSTEIN: There might be a shift penalty - shift penalties?
PN2550
THE COMMISSIONER: So it's their ordinary time rates of pay, plus planned overtime, plus all call-out overtime, would constitute the income they ordinarily earned, so that's their total income equates to income ordinarily earned.
PN2551
MR BORENSTEIN: That's right.
PN2552
THE COMMISSIONER: So "ordinarily" really has no work to do, it's superfluous.
PN2553
MR BORENSTEIN: Well, I suppose it depends if you focus on a portion of the income they ordinarily earned or not. I mean, we're saying that - I suppose we're sectioning off the disputed zone and saying: well, they ordinarily received income from that area; now they don't, and that's - - -
PN2554
THE COMMISSIONER: The clause doesn't do that. The clause doesn't partition anything, and if you give the words that broad meaning that you're attributing to them, it's total income, isn't that right?
PN2555
MR BORENSTEIN: I don't think I'd like to retire to that, but that is - - -
PN2556
THE COMMISSIONER: It seems to me inescapable. Now, an interesting question to pose: do you have any reason to believe that your members actually will, over the two years from 5 October 2011 to 13 earn less than they earned previously?
PN2557
MR BORENSTEIN: The instructions that we have, as we said previously - - -
PN2558
THE COMMISSIONER: They're gross income is going to be less.
PN2559
MR BORENSTEIN: In terms of two years post and two years prior to the change; well, I think we'll have to take into account the wage
increases and
they're - - -
PN2560
THE COMMISSIONER: What their income was at the point of the change, what their annualised incomes were at 5 October.
PN2561
MR BORENSTEIN: Well, the evidence of Mr Pugh was that he was - in terms of the (indistinct) time he was down about 7000, but - - -
PN2562
THE COMMISSIONER: See, there's a difficulty here because I think if you go to Mr Pugh's income - - -
PN2563
MR BORENSTEIN: Overall - - -
PN2564
THE COMMISSIONER: - - - it looks like he's actually going to earn more in 2012 than he did in 2011.
PN2565
MR BORENSTEIN: 2011, his figure is - as he said in evidence, that he had a broken leg for - - -
PN2566
THE COMMISSIONER: But that's - I mean, it's - - -
PN2567
MR BORENSTEIN: So it doesn't take into account workers compensation received.
PN2568
THE COMMISSIONER: How do we factor in the broken leg, the personal leave, the annual leave?
PN2569
MR BORENSTEIN: Well, that's right - - -
PN2570
THE COMMISSIONER: The algorithm gets longer and longer, doesn't it?
PN2571
MR BORENSTEIN: It does. I mean, if we do a comparison before and after - two years before and two years after - it's problematic, I suppose. If we just focus on the two years after and work out what they would have received had the restructure occurred and what they would have received had the restructure not occurred, then the difference - if we compare the amounts of what they did receive the two years after the restructure occurred minus what they - compared with what they would have received had the restructure not occurred, it's that difference that we say is the compensation. That's the way that - it puts the employee in the position that would have been in had the restructure not occurred.
PN2572
There are not getting any windfall because it's what they would have had had everything stayed the same. I suppose we say the whole clause seems to be about compensating people for changes in the work practices and trying to maintain income for them that they would have received for a period of two years.
PN2573
THE COMMISSIONER: It's a lump-sum payment, isn't it?
PN2574
MR BORENSTEIN: It is a lump-sum payment.
PN2575
THE COMMISSIONER: Isn't it difficult to make a lump-sum payment when you can't calculate in advance?
PN2576
MR BORENSTEIN: There are some calculation issues with it.
PN2577
THE COMMISSIONER: Let's take the person who is asked to make a lump-sum payment to Mr Pugh on 5 October 2011, because that was when it was due and payable, wasn't it - - -
PN2578
MR BORENSTEIN: Yes.
PN2579
THE COMMISSIONER: - - - according to your interpretation.
PN2580
MR BORENSTEIN: We say - - -
PN2581
THE COMMISSIONER: So how would that person actually do that?
PN2582
MR BORENSTEIN: Well - - -
PN2583
THE COMMISSIONER: Would it be possible to comply with the agreement at that point? I know it's easy enough to pay the availability allowance, isn't it, as a lump-sum if the availability allowance was no longer being paid, but how could you calculate a lump-sum for Mr Pugh on 5 October 2011?
PN2584
MR BORENSTEIN: It would be something where the parties would have to either attempt to make a calculation of it or - - -
PN2585
THE COMMISSIONER: Yes, but that's what I mean, so what methodology which you apply? You see, you're saying - you know, you've got
to, I think, concede that the agreement should be construed logically is capable of
application - - -
PN2586
MR BORENSTEIN: Absolutely, it's applied in context and - - -
PN2587
THE COMMISSIONER: - - - you know, something which is incapable of application can hardly be at least easily interpreted, if interpreted at all.
PN2588
MR BORENSTEIN: Yes.
PN2589
THE COMMISSIONER: The obligation arises 5 October 2011 to make a lump-sum payment to Mr Pugh. How would you calculate the amount? How could you practically make that payment at that time? Wouldn't you have to guess about how many bushfires there were going to be and how many thunderstorms and car crashes and failed insulators and fuses and - - -
PN2590
MR BORENSTEIN: It may be that look at their - well, we would submit that at that time if it was to be complied with at the time, one meaning or one reasonable application of it would be to assess - look at the past years that they've been on it and assess it that way - - -
PN2591
THE COMMISSIONER: That doesn't make any sense, does it, because it's about what the employee would have earned - - -
PN2592
MR BORENSTEIN: Would have ordinarily earned.
PN2593
THE COMMISSIONER: - - - not what the employee had earned.
PN2594
MR BORENSTEIN: I mean, with availability allowance, those amounts go up and down as well by increase with EBA, so for them you're potentially in some situations projecting into the future as well, you'll find.
PN2595
THE COMMISSIONER: Yes, but the different situation when you're trying to deal with what we're dealing with is the agreement is impossible to comply with, isn't it, if you give it that interpretation? At least - - -
PN2596
MR BORENSTEIN: It's problematic to comply with at that point.
PN2597
THE COMMISSIONER: - - - unless you waited for two years.
PN2598
MR BORENSTEIN: Exactly.
PN2599
THE COMMISSIONER: And hard to imagine, I must say, as a member of an expert tribunal, that the ETU was prepared to wait for two years to see what happened to all these people. My experience, not just with the ETU, is that people want payment when it's due.
PN2600
MR BORENSTEIN: Well - - -
PN2601
THE COMMISSIONER: And if it becomes due on 5 October 11 on the construction you're urging upon me it's impossible to comply with.
PN2602
MR BORENSTEIN: Well, we would say that it is - I mean, I probably can't help any more with that, Commissioner, but we would say that some flexibility may well be able to be read into the clause in terms of paying it on a weekly basis in terms of what they've lost, or you go backwards and work out - and it's - - -
PN2603
THE COMMISSIONER: You see, they haven't actually - - -
PN2604
MR BORENSTEIN: But I understand the second proposal is a bit more rough.
PN2605
THE COMMISSIONER: It's just that it would be so enormously inaccurate and non-compliant because you're asking the person who is required to make the payment to guess at how many faults the individual employee would be called out to over the next two years. Isn't that right?
PN2606
MR BORENSTEIN: That's right. Commissioner, I'll just rely on my submissions that you said you'll - that you've read and will read, and I appreciate that.
PN2607
THE COMMISSIONER: Yes, I certainly will.
PN2608
MR BORENSTEIN: I won't take up any further time. Thank you.
PN2609
THE COMMISSIONER: Mr Brotherson.
PN2610
MR BROTHERSON: Commissioner, if I can go into a folder of the authorities which are referred to in the company's outline. I'll take you to those as necessary, but I'd largely rely very much on the outline that's been filed in the proceedings, which is quite detailed, and following on from what you've said to Mr Borenstein, just take you to matters which arise from the proceedings. The position of the company of course is that clause 12 of the agreement doesn't provide for compensation in the circumstances under consideration in this matter.
PN2611
And to just confirm the company position on that, and as set out in the outline, the company position is that clause 12 of the agreement is only dealing with and providing for compensation where an employee has suffered some detriment in their earnings of availability allowance. Or even if it is to compensate the something other than a detriment in availability allowance earnings, the compensation is limited to what the employee would have earned in availability allowance capped at two years. And of course if there has been no loss of availability allowance then the company's position is no compensation would follow at all.
PN2612
If I can just deal with the issue of the approach the commission should take in this matter. I think in large part the parties - and from the exchange between yourself and Mr Borenstein - are agreed on this, and the decisions that the commission and its predecessors confirm a well-known approach. The Commissioner asked a question about the authority in Kucks case which was in fact cited with authority by a full bench of the commission, being Ross VP, Lacey SDP and Smith C in Telstra Corporation Ltd v CEPU in a decision that's reported at 139 IR 141. I don't have a copy of that Telstra decision but it is in fact referenced in the decision of Lawler VP that both parties have in fact referred to.
PN2613
Just on that, Commissioner, it may be that the Vice President has actually expressed what those authorities that are set out - and I think my friend set out in an early paragraph of his outline - the Vice President at paragraph 15, which I think is quoted in my friend's initial outline of submissions, the Vice President does set out in his own words how those authorities, including Kucks, should apply. But I think with great respect, that the Vice President doesn't really change anything, he simply gives his own summary version, but the approach is consistent with the authorities as referred to.
PN2614
What I would like to do, though, Commissioner, is we do refer to one authority which my friend doesn't, and that is the decision of the High Court in Amcor v CFMEU, which is behind tab 1 of the folder. But perhaps for more convenience if I can refer you to paragraphs 7 and 8 of our outline. We set out there two often cited now judgements from that decision, the first by his Honour Kirby J where in the context of a certified agreement his Honour said:
PN2615
The nature of the document, the manner of its expression, the context in which it operated and the industrial purpose it served combine to suggest that the construction to be given -
PN2616
in that case to clause 55.1.1 -
PN2617
should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the Agreement.
PN2618
And then to similar effect, as we indicate in paragraph 8 of our outline, Callinan J, and without citing the entire extract there, if I take you to the last half of that:
PN2619
It is with the third of these that clause 55 of the Agreement is particularly concerned. It is important to keep in mind therefore the desirability of a construction, if it is reasonably available, that will operate fairly towards both parties.
PN2620
So consistent with what we've seen in the full bench decision in Kucks recognising that industrial parties are people of a practical bent, their intent in making agreements is to resolve disputes, provide for certain entitlements. But we see confirmation that the approach that should be taken is not a strict one, there is a need to find sensible industrial outcomes as far as is possible and apply fairness to both sides. And those principles are articulated there in the Amcor case, but they're also of course consistent with the general powers and the obligations of the Commission in dealing with any matter that is set out in sections 577 and 578 of the Act.
PN2621
My friend also makes reference to what we might call the parol evidence rule and the use of extrinsic material. I think it's appropriate that I do touch on that. It's an argument that he takes in relation to Ms Butler's statement and of course it would apply equally to the evidence of Mr Hayes if you were against the company on the admissibility of parts of Ms Butler's evidence. I should stress it would only be parts of Ms Butler's evidence. I think certainly to the extent her evidence deals with the way the clause has been applied by the company is admissible evidence. I don't think that that's evidence of antecedent negotiations in any way.
PN2622
But we say that the evidence of negotiations of the nature that has been provided is admissible and it's admissible to the extent that it tends to establish the objective background facts known to both parties and/or matters in common contemplation and constituting a common assumption of the parties. To that extent we would accept that subjective intentions and expectations are not admissible; but the evidence of surrounding circumstances is legitimate, and to the extent it assists the commission in establishing that objective framework.
PN2623
Now, my friend refers to a number of cases and of course he begins back with a 1979 case of the High Court, the Secured Income case. I think the commission frankly should disregard that. The true authority, of course, we have said we think is Kucks and perhaps a further authority such as from Amcor. But in any event the High Court further developed that through the Codelfa decision and even the Toll decision that my friend seeks to rely on. He refers to - - -
PN2624
THE COMMISSIONER: The other aspect of these matters is that all these decisions precede the enactment of section 590 of the Act, don't they?
PN2625
MR BROTHERSON: I'm sorry, Commissioner?
PN2626
THE COMMISSIONER: All of these decisions precede the enactment of section 590 of the Fair Work Act 2009.
PN2627
MR BROTHERSON: They do other than, I think, the decision of Lawler VP - no, even that is April 2008, so that's correct.
PN2628
THE COMMISSIONER: There was no equivalent statutory provision, I don't think, in the predecessor legislation, in any of them.
PN2629
MR BROTHERSON: I'm not 100 per cent certain of that, now you raise it, Commissioner. I think there's always been a general proposition that the Fair Work Commission/Fair Work Australia and its predecessors - - -
PN2630
THE COMMISSIONER: I thought it was - - -
PN2631
MR BROTHERSON: - - - always had a general power - - -
PN2632
THE COMMISSIONER: - - - it was more of a direction to act without regard to technicalities and legal form - - -
PN2633
MR BROTHERSON: Legal technicalities.
PN2634
THE COMMISSIONER: I don't think there was a predecessor provision which had the empowering effect of subsection (1).
PN2635
MR BROTHERSON: Perhaps to inform yourself in any manner as appropriate.
PN2636
THE COMMISSIONER: Yes.
PN2637
MR BROTHERSON: I think I've probably always taken it that - - -
PN2638
THE COMMISSIONER: That's procedural rather than substantive.
PN2639
MR BROTHERSON: - - - and that it operated to similar effect. But you may well be right.
PN2640
THE COMMISSIONER: Well, it does seem to have an inquisitorial ring about it.
PN2641
MR BROTHERSON: Yes, indeed.
PN2642
THE COMMISSIONER: Whereas much of the authority prior to the commencement of the Fair Work Act 2009 is very much based on traditional legal principles of adversarialism.
PN2643
MR BROTHERSON: And again I think that's also consistent with those powers, which again are not new in 577 and 578, that use the power to inform and inquire in that way, which allows things like equity and good conscience to be perhaps fully developed in this sort of nature of matters that come before the commission.
PN2644
THE COMMISSIONER: And there is a decision, I think, of the South Australian Industrial Commission that's been - it's some time ago, but I think that legislation had similar injunction to act in equity, good conscience, and the - what used to be the substantial merits of the case and here it's the merits of the matter - whereby I think it was either Olsen J or a full bench said that you bring it to bear when you're interpreting instruments.
PN2645
MR BROTHERSON: Yes.
PN2646
THE COMMISSIONER: Which is another consideration, it's a statutory injunction that would in fact have to be added to all of the cases. So in this case if that principle applies, but it seems to me it does, then it chimes with the observation of Calern J, which was about the fairness to both parties.
PN2647
MR BROTHERSON: Yes, and I think the Amcor decision certainly can't be ignored, and it is being referred to by other members of this tribunal. My friend sets out in paragraph 10 of his first outline the judgement of Lawler VP in Watson and others v ACT Department of Disability Housing and Community. And it's probably a convenient way to refer to the relevant provisions beyond the ones we've already just been exchanging on. But if I can ask you to look at that paragraph 10 of my friend's first outline, he then cites - - -
PN2648
THE COMMISSIONER: Para 10?
PN2649
MR BROTHERSON: Paragraph 10 of the ETU outline of submissions. Set out there are paragraphs 7 through to 15 of the judgment of the Vice President in that Watson and others matter. And I think relevantly Codelfa has been developed, of course, further. There's a reference there in paragraph 8 of the citation refers then - you can see the number 34 in BP Australia Pty Ltd v Nyran Pty Ltd, and over the page there are some further bullet points:
PN2650
If the language of the contract is ambiguous or susceptible of more than one meaning, evidence of surrounding circumstances is admissible to assist in the interpretation of the contract.
PN2651
Following on:
PN2652
The concept of the surrounding circumstances is to be understood to be a reference to the objective framework of facts. It will include evidence of prior negotiations, so far as they tend to establish objective background facts known to both parties and the subject matter of the contract, facts so notorious that knowledge of them is to be presumed are evidence of a matter in common contemplation.
PN2653
Then in the following paragraph:
PN2654
From the evidence of that setting the parties' presumed intention may be taken into account in determining which of the two or more possible meanings is to be given to a contractual provision.
PN2655
Of course, then in the next paragraph there is the citation of Kucks. Then over the page - at the bottom of page 5 of my friend's outline - a citation from Short v Hercus, the decision of his Honour Burchett J in the Federal Court, and in the first paragraph there:
PN2656
If, for example, an expression was first created by a particularly respected draftsman for the purpose of stating the substance of a suggested term of an award, was then adopted in a number of subsequent clauses of awards dealing with the same general subject, and finally was adopted as a clause dealing with that same general subject in the award to be construed, the circumstances of the origin and use of the clause are plainly relevant to an understanding of what is likely to have been intended by its use.
PN2657
Of course, it then goes on to make reference, in the further full paragraph:
PN2658
The context of an expression may thus be much more than the words that are its immediate neighbours.
PN2659
Then the paragraph towards the end of that page:
PN2660
Where the circumstances allow the court to conclude that a clause in an award is the product of a history out of which it grew to be adopted in its present form, only a kind of wilful judicial blindness could lead the court to deny itself the light of that history and to prefer to appear unaided on some obscurity in the language.
PN2661
Then again there's more reference from Short v Hercus over the page, until we get to that paragraph 15, where his Honour, the Vice President, provides his own summary, but clearly still accepting Kudelka, but makes the references to Kucks and Short v Hercus.
PN2662
So I think, aside from the exchange we just had a few moments ago on the statutory entitlements of the commission, we say that in considering the interpretation of certified agreements, there is considerable authority for you to consider the context of the provisions, the history of the provisions, and the surrounding circumstances at the time, and that could include material related to the negotiation of agreements.
PN2663
If I can take you then to paragraphs - sorry, in the list of the respondent's authorities in the folder I've provided, at tabs 14 and 15 are two recent cases where members of the commission have been called on to consider, effectively, matters of construction. At tab 14 there's a decision of O'Callaghan SDP in the matter involving the AMWU and the AWU v Electrolux Home Products Pty Ltd. It's a dispute over a payout of personal leave on death or retirement, and a consideration of the provision under the enterprise agreement dealing with that. If I can take you to paragraph 6, his Honour notes that:
PN2664
The evidence before me goes to the competing intentions and recollections of the parties in the negotiations for the 2010 agreement.
PN2665
At paragraph 8 his Honour refers to the decision of Lawler VP and Watson and sets out, very much to the same effect, the paragraphs we've just looked at that my friend relied on in his original outline of contentions. Then at paragraph 9, O'Callaghn SDP sets out there:
PN2666
The following specific circumstances are relevant to a consideration of clause 35.4.
PN2667
Relevantly firstly:
PN2668
There is no dispute about the same terms in the 2006 agreement.
PN2669
The second bullet point:
PN2670
There is no dispute about the operation of the traditional Electrolux policy prior to the 2010 agreement.
PN2671
The third bullet point:
PN2672
The negotiations included an additional redundancy benefit in the following terms.
PN2673
Then in paragraph 10, his Honour makes the assessment:
PN2674
However, because of these specific circumstances, the plain words of the agreement cannot be taken as clearly expressing an agreed meaning. Hence the determination of this dispute is not so much a matter of interpretation of the agreement, as it involves a determination of the intentions and commitments of the parties in the agreement negotiation process. This is an inherently difficult assessment.
PN2675
Then paragraph 53 confirms that in determining that matter, his Honour had regard to among other things contemporaneous handwritten notes of a meeting of 17 February 2010; over the page, contemporaneous handwritten notes of 18 February 2010. It appears in that case O'Callaghan SDP has taken a very broad approach to the admissibility of evidence in determining that, but that was the approach which he adopted, and relying upon the same authorities that you are referred to in this particular case. At tab 15 of our folder of authorities, we also have a decision of Drake SDP in a matter involving a number of unions and Sydney Water Corporation.
PN2676
Again, this was an application to remove an ambiguity or uncertainty in an enterprise agreement, so the first thing is to consider the construction of the agreement and decide whether an ambiguity exists. If I can take the commission to paragraph 117 of that decision, again she refers there to:
PN2677
Law concerning applications such as this was comprehensively reviewed in a recent decision of Fair Work Australia.
PN2678
She there sets out an extract from that decision that again relies on the Codelfa case, the Cucks case, Short v Hercus and an additional case from the Federal Court involving his Honour Jessup J in Chief Commissioner of Police v Curley. But then you'll see a summary there at paragraph 15 which means that the case she's relying on again is that decision of his Honour the Vice President in this matter.
PN2679
So again we say that the authorities and recent practice of senior members of this commission would say that the evidence of Ms Butler is admissible, and can be used in determining what a reasonable person would have understood the words of clause 12 to mean. In terms of why we say what a reasonable person might mean, we not only have the decisions of Cucks and of that type saying you've got to strive for the meaning that the makers intended, but the Toll decision that my friend refers to which - at paragraph 40 of that, and it's in the folder of material he provided, at tab 1 of his folder - at paragraph 40:
PN2680
This court in Pacific Carriers Ltd v BNP Paribas has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective benefits or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe.
PN2681
My friend says "keep going". I'm happy to. He's already relied on those, but he didn't include those first words that I've just taken you to. We say that it's quite clear that the statement of Ms Butler is admissible in these proceedings, and we say it's admissible in its entirety, and should be given appropriate weight as determined by the tribunal. To that extent, we also have to accept that Mr Hayes' evidence would have to be accepted as admissible, and I'll say something further about the weight which we say should be afforded to that, and what it may mean, but we think a proper consideration of the construction of clause 12 of the 2010 agreement does require consideration of those matters.
PN2682
Commissioner, just to recap, in terms of the operating facts that give rise to this dispute, being the change of geographic boundaries serviced by the Benalla FSC, as confirmed in your decision of 26 August 2011, we refer you to the evidence of Mr Lane, and we'd refer you there both to his evidence in the proceedings in 2011 and today, which of course covers the nature of the operations of the company, the nature of availability work, how people are rostered, how work is assigned to people, and he also details the change which was originally proposed, and what is now in place.
PN2683
We say that - and again, this is by way of recap, but it needs to be reaffirmed - what comes out from Mr Lane's evidence is that the 10 employees of the Benalla FSC in question are still assigned to availability on a one in five roster. That was the case before the change, and it's still the case now. It's not contested, and annexure A of Mr Lane's statement actually attaches rosters both before and after to confirm that. They continue to have earnings of availability allowance as they had before. We have no employee that was on the roster prior to your decision or prior to implementation of the changes having been taken off the roster, and the nature of the work they perform when on the roster remains the same; that is, they're responding to faults when on availability as required.
PN2684
The other important point which we think has to be stressed in these proceedings is that the company position is that no employee has ever had a guarantee of any level of overtime. That is clear from the evidence of both Mr Lane and Ms Butler. We'd submit it's really not contested by the union, and it's actually conceded by Mr Pugh that his overtime varies. He tries to put a bit of a spin on it, that it might vary slightly, but he does accept - and in fact, I think it was from a question from you, that he conceded there really is no way of predicting what it might be.
PN2685
The other point to bear in mind is that the claim by the union is exactly that. It is a claim that there be a guarantee of overtime which would apply by way of compensation in the event that the activating provisions of clause 12.1 did apply. How this guarantee of overtime would apply, with great respect to my friend, I think the ETU or the union is struggling to even articulate how this works. Here we are in an interpretation of clause 12, where they're saying the words "ordinarily earned" have a very clear meaning, but we've gone through a considerable period of today where, on questioning from the commission, the sands keep shifting. It's not a clear process. If it is to be calculated, it's anything but a simple process, but the words that are used in one form are very simple words - "ordinarily earned". It connotates a vision that you should really simply be able to snap your fingers or blink and say, "Okay, I know what that means," but nobody knows what that means. It can't be predicted.
PN2686
THE COMMISSIONER: Is it just one employee on the roster each - - -
PN2687
MR BROTHERSON: It's two employees each week, and those two employees - - -
PN2688
THE COMMISSIONER: So two employees are on the roster.
PN2689
MR BROTHERSON: Each week, so - - -
PN2690
THE COMMISSIONER: So if we were going to do the disputed zone with the pins and the string, then we'd have to make an arbitrary decision as to who would have been allocated to the fault in the disputed zone between the two employees.
PN2691
MR BROTHERSON: Indeed, and indeed it is worth perhaps considering what the extent of this looks like. If I can draw your attention to exhibit A2, exhibit A2 in the proceedings was a bundle of documents that Mr Lane gave evidence to back in August 2011. If I can take you to the first tab of that, you'll see on page 6 the proposed alterations. You'll see there is the Benalla area, and I think you referred in exchange with my friend to a green zone. It's actually shown as a blue zone, but effectively as we now understand the ETU position today, irrespective of what employees may have earned as fault overtime by way of call-out in their new zone, one would be called on to calculate what call-outs other employees in other areas have had in those blue zones, and the claim is that is the compensation now due to employees - - -
PN2692
THE COMMISSIONER: So that would be in the Wodonga, Myrtleford, and Seymour and Alexandria FSCs, but not in the Corryong.
PN2693
MR BROTHERSON: That's correct.
PN2694
THE COMMISSIONER: So there are three blue zones - - -
PN2695
MR BROTHERSON: That affect Benalla. That's correct.
PN2696
THE COMMISSIONER: - - - and then you'd have to go through and you'd have two employees on - - -
PN2697
MR BROTHERSON: Each week.
PN2698
THE COMMISSIONER: - - - each week, and then you'd have to look at that week and find out if there were any call-outs in those three, and then you'd have to assume that one of the employees - - -
PN2699
MR BROTHERSON: They both go together - two employees - - -
PN2700
THE COMMISSIONER: They go together, all right. I see. I beg your pardon. So the two employees work as a team.
PN2701
MR BROTHERSON: Correct.
PN2702
THE COMMISSIONER: So they would have gone over to Myrtleford, for instance, into the blue zone, and attended to the fault.
PN2703
MR BROTHERSON: But of course it needs to be taken into account that if they were otherwise unavailable, then they wouldn't have got that call. So this would be a very complex calculation if it was necessary. Of course, the company's preliminary submission is it's not even necessary.
PN2704
THE COMMISSIONER: And that would actually be over a period between 5 October 2011 and 5 October 2013.
PN2705
MR BROTHERSON: On what my friend is - - -
PN2706
THE COMMISSIONER: So it would be a retrospective calculation.
PN2707
MR BROTHERSON: On what my friend says of what the clause says.
PN2708
THE COMMISSIONER: So you'd have to assume then that the mutual intention of the parties was that everybody would wait to see what happened for two years, and then a retrospective calculation of this kind would be made.
PN2709
MR BROTHERSON: Well, I think, Commissioner, we would be quite blunt on that. If you were to find that's what the parties may have had as a mutual intention, that would be right. The people I represent are very clear. That was never intended.
PN2710
THE COMMISSIONER: No, I understand that, but in order to construe this, you would have to accept that the parties actually contemplated a retrospective calculation.
PN2711
MR BROTHERSON: So it would seem on the interpretation.
PN2712
THE COMMISSIONER: Because you can't do this any other way.
PN2713
MR BROTHERSON: There would be no other way to work out ordinarily, unless you did it on some historic calculation, which again the clause simply doesn't lend itself simply to reading either way, and certainly the way my friend - - -
PN2714
THE COMMISSIONER: Because you don't know when the restructure occurs, what the employees would ordinarily have earned. It's entirely contingent upon this calculation.
PN2715
MR BROTHERSON: Indeed, and it also ignores the fact that clause 12 has two parts. It did in the common law agreement. There are two paragraphs, and there are still two paragraphs in clause 12 - now 12.1 and 12.2.
PN2716
THE COMMISSIONER: I noticed that.
PN2717
MR BROTHERSON: The focus by the union is very much on 12.1, and I think perhaps quite deliberately, it just tries to evade 12.2, but it can't be because it was never drafted of course - - -
PN2718
THE COMMISSIONER: Well, that's part of the context.
PN2719
MR BROTHERSON: - - - as 12.1 and 12.2. It's taken this format to fit commission requirements for structuring of documents, but in the common law agreement they're simply two stand paragraphs under a heading of 4.10. But 12.2 is quite clear, and it follows on very much from the end of 12.1 where if we read the end of 12.1:
PN2720
The employee would be entitled to two years' compensation for the income they would have ordinarily earned.
PN2721
Then it follows on immediately:
PN2722
That is -
PN2723
so clearly trying to be a clarifier and a qualifier to what we've just read -
PN2724
two years' payment will be made excepting if an employee has been in receipt of the allowance for less than two years.
PN2725
So whilst 12.1 may have introduced the words "income that would have ordinarily been earned", 12.2 being the qualifying paragraph focuses on "the allowance", and the only allowance that follows out of that is the availability allowance, and we say that's entirely consistent with our construction that even if one takes it as meaning income ordinarily earned, the only income that is ordinarily earned is the availability allowance, and I rely on our submissions on that because everything else - the actual call-outs and the overtime that may follow those call-outs - - -
PN2726
THE COMMISSIONER: It's a pro rata amount arguably in 12.2, is what you're saying, of the allowance.
PN2727
MR BROTHERSON: That's correct. Again you see that word "compensation" but again, it's in reference to somebody who's been in receipt of the allowance for less than two years. So it's almost impossible to conceive that sensible industrial parties may have come to a view that no-one is able to articulate and no-one accepts, that might have required such a convoluted calculation of compensation as is now proffered by the union. It just beggars belief that that could possibly have ever been there, and we say the clause really is simply confirmation, and was clarification of what had been originally intended by Rafaelli C in his decision back in 1998.
PN2728
The other issue of course is that the claim that is made by the union on its interpretation - although I think in exchange with you, perhaps there's been some movement on this - is that apart from the absence of a guarantee of overtime, their claim really doesn't recognise the potential variation in overtime, and it doesn't also of course recognise that overtime comes from a variety of sources. That in itself significantly impacts on what might have been thought of in dealing with the term "ordinarily earned". Again, if we look at clause 12 of the agreement, it is very important to pay regard to the fact that there are two subclauses. The second one, as I've said, the union simply doesn't even address, but it can't be ignored. It is, as we say, a qualifier.
PN2729
The other thing which I think is important, Commissioner, is that if clause 12.1 is activated by one of the qualifying events that are set out there, being if somebody is moved from the availability roster, or the roster alters to reduce availability allowance, or there is a restructure or a relocation, the compensation is expressed as being in the same terms. No matter how the clause is activated, the entitlement to compensation is for the income that they would have ordinarily earned. We hear from Ms Butler's evidence in examples - and there's no real contest to how this has ever been applied historically, and it's clear from the decision of Rafaelli C how he intended it to apply - is that even if you come off availability in total - that is, you lose not only the allowance, but any opportunity to be available to be called out on overtime - your compensation is two years of the allowance.
PN2730
Yet here we have a group of people bringing a claim, and trying to say that the clause means that, "Well, I haven't lost availability allowance, and I haven't lost the ability to be called out when I am on availability, but I might have lost something in that area over there, one of those blue zones, so I need to have this calculation of all the overtime that's been used there." That's a new argument, and we say it's one that just doesn't fit the meaning of the clause in its proper context; that the intention has clearly we say always been to apply two years' compensation of the allowance, and nothing else.
PN2731
Further, we say that that is a principal purpose of the clause, and we haven't paid very much regard in the proceedings today to the questions that were posed, and I don't think they were ever intended to be limiting features of the arguments that might be brought, but we say that the purposes of this clause are to provide the compensation which we've articulated - that is, two years of the allowance or a pro rata amount. Because the circumstances at Benalla don't result in any loss of availability allowance, whatever occurred with the boundary changes, and even if one was to concede it's a restructure, and we don't really make any argument about that, the compensation is still the same and in this case can't be anything because people are still in receipt of that availability allowance.
PN2732
The company has made a concession at paragraph 36 of the outline that, yes, overtime would fall within the meaning of income, and I don't think that can be disputed, but they're not the words of the clause, and it's not the point. The clause is about income "ordinarily earned". Again, there's a concession by the company at paragraph 35 that that could be a wider concept than the ordinary time rate of pay. But they're the only concessions that the company makes, and of course an availability allowance is not part of an ordinary time rate of pay. It's something above that. Again, we fall back to the fact that that is the compensation, because that is - even if one takes the words strictly "income ordinarily earned" it is the only income ordinarily earned when on availability.
PN2733
Commissioner, we deal quite extensively then between paragraphs 38 and 54 of our outline on that question of "ordinarily earned" or "income ordinarily earned" so I'll simply rely on our outline to that extent. Just on that I would again confirm though that the evidence of Mr Lane, we say, particularly between paragraphs 32 and 41 of his statement, where he describes the overtime history and experience of employees on the Benalla FSC must be taken into account in considering that use of the term "income ordinarily earned".
PN2734
If I could just briefly refer to the evidence of Mr Lane, and the convenient place to do that may be what became exhibit R3 in the proceedings, these are total overtime figures, but they do show the variation in overtime earnings across years, both before the changes in availability boundaries, and afterwards. What we see are not slight variations; they are significant variations. The first employee has been on a significant trend down across the entire three-year period - quite wide fluctuations, but we see fluctuations before the changes across 2010 and 2011 as well, and fluctuations of three, four and five thousand dollars of course are significant percentage changes.
PN2735
Interestingly of course there's a number of employees that their total overtime earnings in 2012 after the changes, are higher than they were immediately before the changes. So for example, Mr Pugh being in three and also Mr Banford and Mr Bell, and indeed Mr Banford is now earning more than he did in the two preceding years to the change. So it confirms that there is no predictability. There really is no consistency. Nobody has anything assured. If there had ever been an intention that clause 12 when it was put together should mean what the union now says, then objectively a reasonable person would have to assume that there would be some further evidence to establish that was the clear point of the clause.
PN2736
THE COMMISSIONER: It's something like $13,000 less. Is that right?
PN2737
MR BROTHERSON: In total - - -
PN2738
THE COMMISSIONER: 2012 after 2011.
PN2739
MR BROTHERSON: That's in total overtime.
PN2740
THE COMMISSIONER: Yes.
PN2741
MR BROTHERSON: Across different points.
PN2742
THE COMMISSIONER: So if you were to do some sort of gross calculation, it would be $1300 each lost.
PN2743
MR BROTHERSON: If there was a - - -
PN2744
THE COMMISSIONER: If you spread it all across, yes.
PN2745
MR BROTHERSON: If there was a construction to that effect, which of course the company doesn't accept.
PN2746
THE COMMISSIONER: Yes, I know. What I'm really referring to is the difference between an approach like that, which estimates a sort of loss on overtime earnings.
PN2747
MR BROTHERSON: Yes, but again - - -
PN2748
THE COMMISSIONER: It's $13,000 which would mean that for one year it's $1300 each, if you divide it equally by 10, given the difficulty of working out each individual's circumstances.
PN2749
MR BROTHERSON: If one was to do that, but of course one is not to know whether that might not have been exactly the same experience, all things having remained equal.
PN2750
THE COMMISSIONER: Exactly.
PN2751
MR BROTHERSON: One does not know what would happen, or what the experience will be in 2013. We don't know what the experience was - - -
PN2752
THE COMMISSIONER: The 249,000 could well have been the outcome.
PN2753
MR BROTHERSON: Exactly.
PN2754
THE COMMISSIONER: If you subtracted, for instance, all of the call-outs that have been undertaken outside the new zone.
PN2755
MR BROTHERSON: What do we do with call-outs that are not - - -
PN2756
THE COMMISSIONER: Because the restructure hasn't impacted the - I mean, Mr Pugh gave some evidence that he'd attended call-outs outside the Benalla - - -
PN2757
MR BROTHERSON: Exactly. So where do they sit? It is important when evaluating how could there ever have possibly been an agreement or a meeting of the minds on what is now claimed for this clause, if we look at the blue zones on that map, to the extent there have been call-outs in that area, they have been responded to. The company has already had employees go there, and paid those employees the appropriate amount for it.
PN2758
THE COMMISSIONER: From Benalla.
PN2759
MR BROTHERSON: Well, from other areas.
PN2760
THE COMMISSIONER: Including Benalla.
PN2761
MR BROTHERSON: Including Benalla. So what we now have is a claim. The work has been done. The work has been paid for, but in addition you compensate seemingly in full yet again - - -
PN2762
THE COMMISSIONER: You pay two employees for the same job.
PN2763
MR BROTHERSON: Yes. You I think used the expression "feudal" or "territorial". I mean, that's exactly what this reeks of, and it is a very significant claim of construction, we would say, that's being made, and one that absent some clear and expressed intention that that could ever have been intended, it can't possibly be given the construction. It would not be fair to the company. It would not be a sensible industrial outcome. It could contravene all of the factors that Kirby and Callinan say should be strived for.
PN2764
I think in respect to Mr Pugh's evidence, he acknowledges as we've said there are variations. He puts a particular spin on it, and we understand that. We don't criticise that, but it is there and the commission needs to accept, we say, and take as more balanced evidence on that, the evidence of Mr Lane.
PN2765
Commissioner, the history behind this clause, we say, is very relevant to the matter, and we deal with that at some length between paragraphs 55 and 77 of our outline. Importantly we say there is no doubt that the origins of the current clause include the decision of Rafaelli C on 6 July 1998, which is exhibit A6 in the proceedings. If I can just take you to that, the decision as we know, in the third paragraph on the first page makes it clear we're dealing with employees who have come off availability, have been paid compensation for no longer being available:
PN2766
The rationale for this was that the substantial payments associated with availability was such that the employees had to have their future loss of income cushioned in some way. The unions are in disagreement with the company over the quantum of such compensation.
PN2767
The use of the words there by the Commissioner "the substantial payments associated with availability" we say probably have to comprehend both the availability allowance, and most likely the potential for overtime that they may have earned. But of course the Commissioner then goes on to determine what the compensation will be, and he does that in the second-last paragraph of the decision:
PN2768
In all of the circumstances, I consider that a two-year availability allowance compensation is fair and equitable.
PN2769
Of course, he's used the phrase "cushioned in some way", so it may not necessarily be compensating for everything. It's a cushion. Where employees come off availability, again they've lost their allowance and they've lost the opportunity for call-outs. But relevantly, if we go to the third-last paragraph of the decision:
PN2770
I am satisfied there is a long tradition of industrial instruments and custom and practice in the electricity industry, be it distribution, generation or transmission, whereby employees are compensated for when they are affected by restructuring or relocation. This extends to availability allowance.
PN2771
So what we have in the decision of Rafaelli C are three of the four components that are now set out in clause 12.1. We have restructure; we have relocation; and we have employees coming off availability. The only actual words that aren't used in the Rafaelli decision are the ones where "or a roster alters to reduce the availability allowance", but that of course could easily be picked up by a restructure.
PN2772
So the union in its submissions appears to have attempted to divert attention from this decision, but we say that the objective facts mean that the Rafaelli decision looms large across the entire period of time. It's still referred to by the parties, including in the 2010 negotiations. Like you, Commissioner, I recall that one of the final pieces of Mr Hayes' evidence today was to the effect that the intention was to ensure, or words to that effect, the ongoing provision of what Rafaelli C had provided for, when the 2007 common law agreement was being developed. Of course, again, a reasonable person would accept that that would have been the case because the enterprise agreements until that time had only included for transmission employees express provision on relocation.
PN2773
So we say the objective conclusion, and the only sensible conclusion that can be drawn in 2007, when the common law agreement was developed and there were some of the drafting that now forms clause 12 of the current agreement, was that the intention was to make sure that everything Rafaelli C had provided for was captured, and I've just addressed the fact that that appears to have been the case.
PN2774
The words "income ordinarily earned" appear. We say absent anything else, that simply has to be read as two-year availability allowance compensation. Clause 12.2, or what was the second paragraph of clause 4.10 of the common law agreement, always had those words - reference to receipt of "the allowance". Again, of course, our argument fundamentally is income ordinarily earned - the only such income is the availability allowance. But I think my friend in one of his outlines of submission attempts to say that there's a stark contrast between what Rafaelli C decided, and clause 12 as it now looks. Our submission is that there really is no stark contrast. It can be vividly seen, and remains at large across any consideration of these matters. Further on that point, there really is nothing to establish that the parties ever set about providing for anything other than what Rafaelli C had dealt with, and what he decided.
PN2775
THE COMMISSIONER: We're starting to run out of time, Mr Brotherson.
PN2776
MR BROTHERSON: Yes.
PN2777
THE COMMISSIONER: I'm anticipating a reply. I'm anticipating some reply.
PN2778
MR BROTHERSON: I'm in your hands. I don't envisage being particularly much longer, Commissioner. I'm moving through what I wanted to deal with.
PN2779
THE COMMISSIONER: It's just that I have another commitment which I have to get to.
PN2780
MR BROTHERSON: Yes. Commissioner, I've spoken - and there's now exhibits which deal with the way the matter was dealt with in the 2004 and 2007 agreements. They're exhibits A10 and 11. Again, they fall into line with what I've just explained about what the intention must be considered to have been, and objectively what the clause had to be considered to have meant when it was developed in 2007.
PN2781
Commissioner, the other piece that I just do want to touch on of course is that when that clause was being developed in 2007, that is the clause we still are dealing with now, the letter from Clayton Utz to Mr Borenstein of 4 September 2007 cannot be disregarded. It's clearly a significant piece in the development of the clause. It attaches the latest draft. It's responding to a union request to set out the agreed practice on how these provisions will apply. What it sets out is the practice in relation to what became clause 4.10, the availability of allowances, is effectively if I can call it this, the Rafaelli practice, which is what Mr Hayes says was always intended - and again I know it's your words - as a minimum to be ensured.
PN2782
The important piece there is, there's certainly nothing he can demonstrate to say anybody was ever aware that he might have intended anything more than that. So it may be that Mr Hayes had in the back of his mind, "You beaut. I've got some words here that are going to allow this argument to unfold in three years' time." He doesn't appear to tell anybody. He certainly doesn't put anything in writing about it, and it comes up, notwithstanding the fact, as Ms Butler can demonstrate, apart from this matter there's a number of examples where the company has continued to apply exactly what it set out in that letter from Clayton Utz.
PN2783
It's very contrived to suggest that perhaps because the organisers in some of those other areas weren't involved in the negotiations, that's why these claims haven't been made. Frankly, that's a nonsense proposition. An enterprise agreement applies. We're dealing with I think a sophisticated industrial organisation, so for it to suggest that some of its organisers may not understand what a clause means, or have the same meaning as one of the key negotiators, is simply hard to fathom.
PN2784
I would also just comment that to the extent Mr Hayes' evidence on the negotiations is admitted into the proceedings, it's very contrived. He, with great respect, says very clearly what the clause didn't mean. He's prepared to say the clause will mean whatever it means, but he really nowhere sets out exactly what it does mean. Again, I think in the context of the industrial environment, which the Commissioner has good regard of, that sort of evidence just can't be accepted. There's clearly no evidence to establish or support an argument that the construction of the clause now proffered was ever what was agreed or intended by the parties.
PN2785
Commissioner, we would otherwise rely on our submissions. As you'll see, we address the weight of our material in response to question 1, where we say the proposition of the union falls over because the purposes of clause 12 simply aren't what they're claiming in this case. We say that also would defeat them on question 2, should you proceed that far. Question 3 we think doesn't warrant particular attention at this time but may, depending on what's found. If you are against us on the purposes of the clause in question 1 and 2, then we say all of our material falls down very much to the answer in question 4 that the compensation is only two years of the allowance, for all of the reasons which we've relied on in our earlier positions.
PN2786
As to any calculations of compensation, which we would say in the unlikely event could be found, then as we've set out in our outline at paragraph 94, there has to be recognition given to ongoing earnings from all sources taken into account and under no circumstances should compensation be payable if an employee continues to have overall earnings at a level equivalent to or higher than was the case prior to the change. Because to do that we say you really do move into what you explored with my friend on windfall territory, and there is simply nothing to support the fact that that should be the case. If we do get that far through the list of questions, which we submit the commission shouldn’t, the term "income ordinarily earned" surely has to encompass all earned income if it's getting to that stage, not just income from a particular source, if the commission pleases.
PN2787
THE COMMISSIONER: Thank you. Mr Borenstein.
PN2788
MR BORENSTEIN: Thank you, Commissioner. I'll be quick. My friend referred to the decision in Amcor, to Kirby J's decision. Could I just refer the commission to paragraph 70, going down to paragraph 74. In there Kirby J also states that - he says:
PN2789
As the Federal Court demonstrated in an earlier decision, it is undesirable to adopt a purely result-oriented approach to the interpretation of such industrial agreements. Ultimately a court's duty under the Constitution is to give effect to the meaning of each document as expressed in its words.
PN2790
And then it says:
PN2791
This is true when the argument is an attempt by the union to secure a better bargain than that which was agreed upon and expressed in the instrument. However, a neutral application of legal principles requires that the same outcome should follow where the terms of the subject agreement are such as to result in a worse bargain for the employer than, in retrospect, the employer ought to have provided for, might have been expected and even might have deserved in an industrial sense.
PN2792
They then have a quote from the decision in the Full Court, Kirby J, at the bottom of paragraph 72:
PN2793
It is not to the point that some people may consider it to be unfair to allow employees to receive severance payments whilst they continue to be employed, albeit by another employer. It is equally not to the point that others may consider it not unfair for such payments to be made, given that in the Amcor reconstruction the employees were given no real choice in relation to cessation of employment. Further, in some cases there may be no guarantee of solvency of a new employer in years to come.
PN2794
I'm told that's what (indistinct) Kirby J in his decision, which my friend has taken a quote from, upholds at paragraph 73 the fact that it's not about determining - at paragraph 4 he says:
PN2795
I would therefore take the complaints about unfairness by an employer who proceeded in such an apparently high-handed way with a pinch of salt.
PN2796
THE COMMISSIONER: Which paragraph are you referring to in the Kirby judgment?
PN2797
MR BORENSTEIN: It starts at 70.
PN2798
THE COMMISSIONER: Yes.
PN2799
MR BORENSTEIN: The excerpt from the Federal Court is at the bottom of paragraph 72.
PN2800
THE COMMISSIONER: Yes, I see.
PN2801
MR BORENSTEIN: I'm not saying that - it just shows that questions of injustice as a result is not necessarily the preferred approach or way to go. At the top of the sixth line in paragraph 70, Kirby J talks about that it's undesirable to adopt a purely result-oriented approach to interpret such agreements, and again reiterates that it's the meaning of the words that is the primary focus.
PN2802
We submit that the cases referred to by my friend, I think at tabs 14 and 15 of his cases of authority - especially tab 14, which shows a lengthy examination of the negotiations and what's said in negotiation does go against what - we submit goes against the principles of interpretation, and the references in our submissions to the decisions in Toll and Codelfa. Both urge against having a hearing about backwards and forwards of negotiations. Again it's about finding out what a framer, the hypothetical person, meant by the words with the context and the objective facts present.
PN2803
In terms of 12.2, we don't shy away from it. Obviously it's part of the cause. We say that the fact that a pro rata payment is made to people in a situation where they've received an allowance for two years or less can apply equally to overtime. It can say that the period which you're compensated for your overtime will be the period if you've been on - if you received the allowance for less than two years. If you received it for 18 months then you'll get compensation for 18 months, rather than two years.
PN2804
So we say that is a reasonable interpretation of 12.2 to apply in the current situation. It doesn't say two years' compensation of the allowance if you've been there - a pro rata compensation of the allowance. It talks about payment. We again submit that on a proper reading of the words, the drafter would have phrased it in a different way if it was intended to merely apply to an allowance.
PN2805
We do submit that the employees have lost overtime earnt whilst on fault work. Obviously overall a number of them have lost - have reduced overtime on an overall basis, but also we submit that income can be a facet of - it doesn't have to be the total income, it can be a part of that income, and we say that income earnt whilst on availability - which is in effect unplanned overtime - is an aspect of it and the employees, we submit, have had a reduction of overtime and that would be proven with, I suppose, a further subpoena if we get to that stage to calculate the loss.
PN2806
Mr Pugh's evidence was that he believed he had lost approximately $7000. In the end we'd like to be able to calculate that with the source data from the company. That's all I have for reply, Commissioner.
PN2807
THE COMMISSIONER: Very well, thank you. I'll reserve my decision but, Mr Borenstein, I really would like you to do something. I don't think I can logically construct this decision in a way that makes sense unless I have a very clear picture as to what you say the outcome - how the compensation is to be calculated in accordance with the terms of the clause. So I'm going to ask you to file a written submission, setting out the means by which the application of the clause would give rise to the compensation contemplated.
PN2808
MR BORENSTEIN: Yes, Commissioner.
PN2809
THE COMMISSIONER: How long will you need to do that?
PN2810
MR BORENSTEIN: A week would be fine.
PN2811
THE COMMISSIONER: All right. I'll allow Mr Brotherson a week to respond. Do I need to reduce these directions to writing? Very well. Thank you, I'll await those considerations before proceeding to determine the matter. Thank you.
<ADJOURNED TO A DATE TO BE FIXED [4.41PM]
LIST OF WITNESSES, EXHIBITS AND MFIs
WESLEY HAYES, SWORN PN1377
EXAMINATION-IN-CHIEF BY MR BORENSTEIN PN1377
EXHIBIT #A8 WITNESS STATEMENT OF WESLEY HAYES PN1398
CROSS-EXAMINATION BY MR BROTHERSON PN1407
EXHIBIT #A9 DRAFT COMMON LAW AGREEMENT PN1485
EXHIBIT #A10 APPENDIX SIX OF 2007 ENTERPRISE AGREEMENT - RELOCATION POLICY FOR TRANSMISSION EMPLOYEES PN1601
RE-EXAMINATION BY MR BORENSTEIN PN1626
THE WITNESS WITHDREW PN1654
KYLE PUGH, AFFIRMED PN1661
EXAMINATION-IN-CHIEF BY MR BORENSTEIN PN1664
EXHIBIT #A12 WITNESS STATEMENT OF KYLE PUGH PN1669
CROSS-EXAMINATION BY MR BROTHERSON PN1757
RE-EXAMINATION BY MR BORENSTEIN PN1827
MARYANN BUTLER, SWORN PN1915
EXAMINATION-IN-CHIEF BY MR BROTHERSON PN1916
EXHIBIT #R1 WITNESS STATEMENT OF MARYANN BUTLER PN1922
CROSS-EXAMINATION BY MR BORENSTEIN PN1936
RE-EXAMINATION BY MR BROTHERSON PN2065
THE WITNESS WITHDREW PN2069
PAUL MICHAEL LANE, SWORN PN2072
EXAMINATION-IN-CHIEF BY MR BROTHERSON PN2072
EXHIBIT #R2 WITNESS STATEMENT OF PAUL LANE PN2077
EXHIBIT #R3 LIST OF EMPLOYEES THAT WORKED OVERTIME PN2081
CROSS-EXAMINATION BY MR BORENSTEIN PN2082
THE WITNESS WITHDREW PN2099
EXHIBIT #A13 APPLICANT'S SUBMISSIONS DATED 21/02/2013 PN2264
EXHIBIT #A14 AUTHORITIES OF THE APPLICANT PN2274
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