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Fair Work Commission Transcripts |
TRANSCRIPT OF PROCEEDINGS
VICE PRESIDENT HATCHER
DEPUTY PRESIDENT GOSTENCNIK
COMMISSIONER CRIBB
C2014/7606
s.604 - Appeal of decisions
Royal Automobile Club
of Victoria (RACV) Ltd v Australian Municipal, Administrative, Clerical and Services
Union
(C2014/7606)
Melbourne
10.02 AM, TUESDAY, 10 MARCH 2015
PN1
VICE PRESIDENT HATCHER: Yes. Can I take the appearances? Mr Mueller, you appear for the appellant?
PN2
MR MUELLER: Yes, Vice President.
PN3
VICE PRESIDENT HATCHER: Yes.
PN4
MR MUELLER: Pursuant to the leave.
PN5
VICE PRESIDENT HATCHER: Yes.
PN6
MR MUELLER: Permission granted on Friday.
PN7
VICE PRESIDENT HATCHER: Mr Bakri, you appear for the respondent?
PN8
MR BAKRI: That is so.
PN9
VICE PRESIDENT HATCHER: And, again, I'll note for the record we have given permission for the parties to be represented by lawyers. Mr Mueller?
PN10
MR MUELLER: Thank you. The Commission might see that - if I might assume for present purposes that the Bench has read the respective submissions ‑ ‑ ‑
PN11
VICE PRESIDENT HATCHER: Yes, you can assume that.
PN12
MR MUELLER: ‑ ‑ ‑ of the parties. So I won’t laboriously go through them. You'll see that the appellant puts the error which we assert has been made by Commissioner Roe in essentially two ways, although they are related to each other. The first way is that the national employment standard provisions regarding their accrual of annual leave and personal leave dictate that accrual, and what we say is its sister notion deduction, occur in direct relation to the ordinary hours that an employee works and that is carried by the proposition that one sees in both section 87 subsection (2), which is the provision concerning the accrual of annual leave and in section 96 subsection (2), which is the provision concerning the accrual of personal carer’s leave.
PN13
VICE PRESIDENT HATCHER: Where do you concept of hours out of that?
PN14
MR MUELLER: You'll see that the basic entitlement is expressed in weeks. That's in subsection (1), but I'm directing attention - I'm dealing first with annual leave, I should say. Section 87(1) expressed the entitlement in terms of weeks. However, you'll see then that subsection (2), which is not a section which has received, I think, particular attention in the decisions so far, but it says:
PN15
An employee’s entitlement to paid annual leave accrues progressively during a year of service according to the employee’s ordinary hours of work and accumulates from year to year.
PN16
DEPUTY PRESIDENT GOSTENCNIK: But doesn't that mean no more than the proportion of four weeks as accrues in any given work period, accrues according to the ordinary hours of work so that in the first quarter if an employee worked more than a quarter of their yearly hours of work as ordinary hours then they would accrue more than a quarter of the four weeks in that period?
PN17
MR MUELLER: Yes, I’d accept that proposition.
PN18
DEPUTY PRESIDENT GOSTENCNIK: But ultimately, the accrual needs to be of four weeks’ leave.
PN19
MR MUELLER: Yes, yes. Although, if I may say so, Senior Deputy President, the notion that you've just developed suggests that four weeks is a concept related to the actual ordinary hours of work that an employee works. That must follow. You can’t reach the conclusion that was just developed without accepting that notion.
PN20
DEPUTY PRESIDENT GOSTENCNIK: Put another way, the ordinary hours of work is a function of the accrual method which accrues as a proportion of four weeks.
PN21
MR MUELLER: Yes, yes.
PN22
DEPUTY PRESIDENT GOSTENCNIK: I mean, ultimately when you break it down, on the first day there will be some accrual and that will necessarily be of a particular amount of hours because we’re not in to the week’s realm, but ultimately it’s directed to accruing four weeks.
PN23
MR MUELLER: Yes, yes.
PN24
VICE PRESIDENT HATCHER: So excluding part years and that sort of there, there’s no doubt, is there, that if you've worked for a period of 12 months, you're then entitled to four weeks off without loss of pay?
PN25
MR MUELLER: You're entitled to four weeks ‑ ‑ ‑
PN26
VICE PRESIDENT HATCHER: As a chronological period without loss of pay.
PN27
MR MUELLER: I don't accept that proposition. We say that four weeks means four weeks off your ordinary hours of work and that it is convertible to four weeks of your ordinary hours of work. It is true. I think there’s a statement by Commissioner Lee that a week is a week and a day is a day and that carries the notion that the Vice President just mentioned then, which seems to have so far informed the debate in this area that it follows from the fact or the circumstance that the provisions refer to the entitlement in terms of weeks; that it is speaking of, as it was put, a chronological period of four weeks.
PN28
We say that in accordance with ordinary principles of construction, that supposition is not correct. One has to read the whole of the provision, as one would ordinarily do in construing a statute, read it so far as it might be ambiguous or uncertain by reference to material that is admissible in that sense. In this case we will come to point to the explanatory memorandum and one reaches the conclusion that the entitlement is an entitlement to that number of hours that represents four weeks.
PN29
Indeed, if one thinks about it, one of the, we say, false starting off points is that one takes four weeks’ annual leave. Of course, that isn't the position. It might be the position, but it’s not necessarily the position and it’s often not the position. What one takes is periods of annual leave and there is, if I may respectfully say so, perhaps a misconception that one starts with the idea that an employee is entitled to four weeks off work in a continuous period. It doesn't work that way. An employee might take six days or four days or three weeks, 15 days.
PN30
We say, when I use the expression “days”, they are in fact taking an amount which is the hourly equivalent to that period of time.
PN31
DEPUTY PRESIDENT GOSTENCNIK: I suppose one way to make good your point is to look at the position of a part‑time employee in that period ‑ ‑ ‑
PN32
MR MUELLER: Yes.
PN33
DEPUTY PRESIDENT GOSTENCNIK: ‑ ‑ ‑ or a part‑time employee who, during the course of a year of accrual, converts from part‑time to full‑time. The first part will have accrued according to their ordinary hours being part‑time hours. By the time they come to the end of the year they won’t have accrued four weeks at full‑time. They would have accrued an amount of leave ‑ ‑ ‑
PN34
MR MUELLER: Yes.
PN35
DEPUTY PRESIDENT GOSTENCNIK: ‑ ‑ ‑ the combination of the part‑time hours and the full‑time hours.
PN36
MR MUELLER: That's right. In fact I was going to draw on that example later, but you've pre-empted it as a means of illustrating the point.
PN37
VICE PRESIDENT HATCHER: So how does section 90 subsection (1) fit with that submission?
PN38
MR MUELLER: You'll see that, yes ‑ ‑ ‑
PN39
VICE PRESIDENT HATCHER: Just hang on.
PN40
MR MUELLER: That provision indicates that the amount paid to the employee when they take leave must be that amount that they would have earned had they been at work.
PN41
VICE PRESIDENT HATCHER: That's another way of saying without loss of pay for ordinary hours.
PN42
MR MUELLER: Yes. But one appreciates immediately that one has to look at the hours worked that the employee would have performed in that period. One doesn't just say the leave is four days. One looks at the actual hours and the employer is obliged to pay the amount that they would have paid for those actual hours, which we say is illustrative, in fact, another facet of the same proposition, namely, that the Act works in this respect on the basis of the ordinary hours actually worked by the employee in the period concerned; the period concerned being the period for which the employee takes the leave.
PN43
VICE PRESIDENT HATCHER: So if annual leave is simply a number of ordinary hours, why is section 90 subsection (1) necessary because on that conception you just get paid for the number of hours you were taking as leave, wouldn't you?
PN44
MR MUELLER: It’s, I think, an operational provision. It makes certain that an employee – say, for instance, in this case a shift employee who works a number of hours beyond 7.6 over that period of time for which that employee has taken leave would receive the pay that they would have received had they worked. Without that direction there would be a question about that. They might be paid. The employer might be inclined to pay the – say it’s four days, four times 7.6 hours rather than the actual hours that the employee would have worked.
PN45
VICE PRESIDENT HATCHER: Just so I understand where this all fits, is your interpretation of the agreement provision dependent upon the correctness of your interpretation of the Act?
PN46
MR MUELLER: No, it isn't. That's why I said at the outset that we put it in two ways, although we do – perhaps it’s three ways because we do say that the first way informs the second way and the way we put it in that respect is to say that one has to make the provisions conform to what the Act requires, but even if we’re wrong about that, we say ordinary hours in this case with respect to these employees are the actual hours that they have worked or would have worked during the period of leave which they take and that produces a perfectly sound and proportional just result and the conclusion that Commissioner Roe has reached produces from one particular aspect an inequitable result, which is illustrated in a document that I'll take the Commissioner to momentarily.
PN47
VICE PRESIDENT HATCHER: That was the first error.
PN48
MR MUELLER: Yes, that's right. If I could just develop that a little. We rely on the language of the section 87(2) and 96(2) which we say in both cases by the use of the phrase “according to the ordinary hours” draws the relationship between ordinary hours and accrual and we say annual leave and personal and carer’s leave accrues progressively according to that relationship, it follows, really as night follows day, that deduction of leave must follow the same formula.
PN49
It’s unsurprising that the Act doesn't explicitly say that because it’s imbedded in that notion and I think my friend in his submission says that we are, as it were, reading something into the Act in that regard. We’re not. We are simply saying that those provisions and the use of that phraseology carries with it the notion that annual leave, personal carer’s leave accrues according to ordinary hours worked and it must follow, because it’s the other side of the same coin - that deduction must follow that regime as well.
PN50
DEPUTY PRESIDENT GOSTENCNIK: Mr Mueller, without using the term “reading in” the effect of your submission is that section 87 in fact means that in a year of service an employee will accumulate or accrue the equivalent of four weeks of annual leave according to the number of ordinary hours worked by that employee during that period of service.
PN51
MR MUELLER: Yes, it can be encapsulated in that proposition.
PN52
VICE PRESIDENT HATCHER: You get there by reading subsection (1) and (2) together.
PN53
MR MUELLER: Yes, yes.
PN54
COMMISSIONER CRIBB: Can I just ask a slightly different question? Is the context for all of this an averaging of the ordinary weekly hours over the three weeks – yes?
PN55
MR MUELLER: Yes, it is.
PN56
COMMISSIONER CRIBB: Is that correct? So that each week, because of the averaging system, a person would be – an employee is paid 38 hours regardless of whether they work, you know, 40 hours in that week or 32?
PN57
MR MUELLER: That's right.
PN58
COMMISSIONER CRIBB: Whatever the magic number is.
PN59
MR MUELLER: That's right. That's the way the pay aspect of the system works.
PN60
VICE PRESIDENT HATCHER: There was reference in the decision to de-annualising the system.
PN61
MR MUELLER: Yes, that's right.
PN62
VICE PRESIDENT HATCHER: So can you just ‑ ‑ ‑
PN63
MR MUELLER: Yes. To remove the imputation of penalties and loadings rather than to ‑ ‑ ‑
PN64
COMMISSIONER CRIBB: Averaging, yes.
PN65
MR MUELLER: ‑ ‑ ‑ the strict averaging, to which the Commissioner was referring to.
PN66
COMMISSIONER CRIBB: Yes. That was why I was checking. As I understand it, the weekly wages is still going to be averaged and so that everybody is paid in terms of the number of hours worked – is averaged at 38 hours, what’s being de-annualised and paid on actual hours, is that correct, are the weekend and the – shift, weekend and public holiday penalties?
PN67
MR MUELLER: Correct.
PN68
COMMISSIONER CRIBB: They're the ‑ ‑ ‑
PN69
VICE PRESIDENT HATCHER: So just to be clear, ordinary hours will still be averaged?
PN70
MR MUELLER: Yes.
PN71
COMMISSIONER CRIBB: Yes.
PN72
MR MUELLER: For the purposes of pay.
PN73
DEPUTY PRESIDENT GOSTENCNIK: Will that continue to be the case when an employee takes leave?
PN74
MR MUELLER: Yes. I think that’s right.
PN75
DEPUTY PRESIDENT GOSTENCNIK: So if an employee during a week of leave receives an average pay rather than the actual pay, how do you get to the deduction of the actual pay?
PN76
MR MUELLER: Yes. Because I think, your Honour, you might be raising the question as to whether that would constitute compliance with section 90.
PN77
DEPUTY PRESIDENT GOSTENCNIK: Yes.
PN78
MR MUELLER: That is because the agreement has entered the field in that respect and ‑ ‑ ‑
PN79
DEPUTY PRESIDENT GOSTENCNIK: And provides for a system of averaging.
PN80
MR MUELLER: It provides for a system of averaging, yes.
PN81
DEPUTY PRESIDENT GOSTENCNIK: But if payment is made that way, what’s the justification for deducting in a different way? If payment is made pursuant to an average system ‑ ‑ ‑
PN82
MR MUELLER: Yes.
PN83
DEPUTY PRESIDENT GOSTENCNIK: ‑ ‑ ‑ doesn't it mean that the agreement is entered into the field effectively of dictating the method of acquitting that leave?
PN84
MR MUELLER: No, it doesn't because one has to arrive at the conclusion that ordinary hours for the purposes of annual leave, personal carer’s leave, in that case is deemed to be, if I could put it that way, 38 hours, but that isn't the product of the provisions.
PN85
DEPUTY PRESIDENT GOSTENCNIK: But if I were an employee caught by these provisions and I were to take four weeks of annual leave, I would be paid during that four weeks pursuant to the averaging system.
PN86
MR MUELLER: Yes.
PN87
DEPUTY PRESIDENT GOSTENCNIK: But you would deduct potentially a higher amount.
PN88
MR MUELLER: We would deduct a higher amount of hours of work. That's correct.
PN89
DEPUTY PRESIDENT GOSTENCNIK: Which would be the equivalent of a higher amount than four weeks.
PN90
MR MUELLER: Yes.
PN91
DEPUTY PRESIDENT GOSTENCNIK: And so at some point in time if I take my leave progressively, that is in each year, it will quickly become the case, will it not, that I'll have a negative balance?
PN92
MR MUELLER: No. I think the correct way to look at it is that the next time you take leave you'll take the leave that is available to you, but the payment that you get will be in fact more than that to which you would be entitled to if – yes, more than you would be entitled to.
PN93
VICE PRESIDENT HATCHER: Sorry, I'm not following that. Why is that?
PN94
MR MUELLER: Because you will be entitled to the amount of pay that you would receive – actually, I'll have to go back a step here. I think the best way to illustrate this is to ask the Commission to go pages 278 and 279 of the appeal book. This illustrates the position of employees working a rotating roster over a 21-day cycle which a substantial number of the employees – in fact the employees who were affected by the decision – work.
PN95
VICE PRESIDENT HATCHER: So if I'm on a rotating roster and I took a week’s leave during week 1 of the roster, I will be paid for my week’s leave at 38 hours and you would deduct 41.3 from my leave balance.
PN96
MR MUELLER: I think I need to check my instructions about that. If I may come back to that? I'm instructed that the hours of work which are illustrated in the top table are not identical to the hours of work that are actually worked by the employees, but they're very close, such that you do produce a result through the 21-day cycle whereby in one week something like 41.3 hours might be worked; in a second week 39.9 and in a third week 32.8. Of course, they aggregate as 114 hours, which is an average of 38 per week.
PN97
The point we make is that if leave is taken over, say, the first week then the ordinary hours of work from which the employee escapes, as it were, or does not work is 41.3. On the proposition adopted by Commissioner Roe, the deduction from their accumulated leave would not be 41.3.
PN98
VICE PRESIDENT HATCHER: No, it would be 38.
PN99
MR MUELLER: That's right. It would be 38.
PN100
VICE PRESIDENT HATCHER: But the question is whether – and that’s what they would have been paid that week.
PN101
COMMISSIONER CRIBB: Yes. Correct.
PN102
MR MUELLER: That's right.
PN103
COMMISSIONER CRIBB: Yes.
PN104
VICE PRESIDENT HATCHER: So what’s conceptually wrong with – I mean, this notion of deduction is really another way of expressing what the entitlement is.
PN105
MR MUELLER: Yes.
PN106
VICE PRESIDENT HATCHER: So once you work out what the entitlement is, the amount of the entitlement is used as the deduction. So that’s really another way of saying, “Well, how is the entitlement expressed?”
PN107
MR MUELLER: Yes. Which is why I started where I did start and on the basis that it’s a misconception to start with the idea that it is four weeks. It’s four weeks as conceived by the Act.
PN108
DEPUTY PRESIDENT GOSTENCNIK: But even if we accept that, Mr Mueller, just let me put this to you: because leave accrues progressively throughout the year and an employee is entitled, subject to the constraints in the NES and any that might be in the agreement to take leave progressively throughout the year so that in each quarter of the year the employee could take a week. On the way in which the RACV proposes to deduct the entitlement, if that employee took annual leave in each of the weeks where 41.3 hours are worked then it necessarily follows that in that year the employer will have deducted more than the equivalent of four weeks’ leave.
PN109
MR MUELLER: On our proposition, certainly.
PN110
DEPUTY PRESIDENT GOSTENCNIK: Yes, yes. But the employee will have only been paid for four weeks and so going into the following year, the employee starts with a negative balance.
PN111
MR MUELLER: It’s the second part of that proposition that I need to check because it’s plainly a striking issue that’s raised and I will do so in a moment.
PN112
DEPUTY PRESIDENT GOSTENCNIK: Yes.
PN113
VICE PRESIDENT HATCHER: So a smart employee would always take his or her leave in week 3.
PN114
MR MUELLER: That's our proposition. I think we say at one ‑ ‑ ‑
PN115
DEPUTY PRESIDENT GOSTENCNIK: A smart employer would approve in week 1.
PN116
MR MUELLER: Yes, yes. Although the Act does – and it is important to appreciate ‑ ‑ ‑
PN117
DEPUTY PRESIDENT GOSTENCNIK: So we'll split the difference and we'll take leave in week 2, shall we?
PN118
COMMISSIONER CRIBB: Yes.
PN119
MR MUELLER: Yes. The Act does limit the discretion of the employer as to when leave can be taken and it would be – it would have to be an astute employer that worked out that an employee was opportunistically doing that, but that’s what the decision of Commissioner Roe leaves open, precisely that position, but the inequity ‑ ‑ ‑
PN120
VICE PRESIDENT HATCHER: I was really putting it on your interpretation, that is, on your interpretation if I took leave in week 3, I would get 38 hours’ pay, even though I was only meant to work 32 hours, and I would only have 32.8 deducted from my leave balance and so I’d start accruing additional leave.
PN121
MR MUELLER: I think that that’s the answer to the proposition that was being put against me before.
PN122
DEPUTY PRESIDENT GOSTENCNIK: I suppose in week 3 there wouldn't be the taking of five days’ annual leave because the X presumably is an RDO.
PN123
MR MUELLER: That's right.
PN124
VICE PRESIDENT HATCHER: I see.
PN125
COMMISSIONER CRIBB: Four days.
PN126
MR MUELLER: It is correct. Which is why I’ve been hesitating about it, but even if – well, to take another example, if the employee, the shift employee, took all three weeks over that roster then in consequence of the system which is adopted by Commissioner Roe, they would have 106.4 hours deducted from their annual leave accumulation. If one turns over the page to ‑ ‑ ‑
PN127
DEPUTY PRESIDENT GOSTENCNIK: That's 14 times 7.6. Is that the calculation?
PN128
COMMISSIONER CRIBB: No.
PN129
MR MUELLER: No, it isn't. If one turns over to page 279, this is illustrated, and it goes to the box marked X, if I could put it that way ‑ ‑ ‑
PN130
VICE PRESIDENT HATCHER: Yes.
PN131
MR MUELLER: ‑ ‑ ‑ or zero, if one looks at the top table, that’s the outcome. The outcome is that 7.6 hours would be deducted from ‑ ‑ ‑
PN132
VICE PRESIDENT HATCHER: That's 14 times 7.6. That's 14 days there.
PN133
COMMISSIONER CRIBB: Yes.
PN134
MR MUELLER: Yes, that’s right.
PN135
COMMISSIONER CRIBB: Yes, it’s not 15.
PN136
MR MUELLER: Yes.
PN137
DEPUTY PRESIDENT GOSTENCNIK: The 15th day is an RDO on that roster.
PN138
MR MUELLER: Yes. Whereas an employee that actually works on the final day, or would have worked, I should have said, will have 114 hours deducted from their annual leave accumulation.
PN139
DEPUTY PRESIDENT GOSTENCNIK: That presupposes the employee took the leave on those three weeks.
PN140
MR MUELLER: Yes.
PN141
DEPUTY PRESIDENT GOSTENCNIK: Yes. I can see how that would work. You still have the problem if the employee takes week 1 four times a year.
PN142
MR MUELLER: Yes, yes.
PN143
VICE PRESIDENT HATCHER: But just going back to the way it’s expressed in the NES, if you took those three weeks off and you read the NES as being chronological, that would be three weeks’ leave not two and four-fifths’ weeks. It would be three weeks’ leave.
PN144
MR MUELLER: It would be ‑ ‑ ‑
PN145
VICE PRESIDENT HATCHER: So it’s a chronological period. It’s not ‑ ‑ ‑
PN146
MR MUELLER: It would be 14 working days, I think, with respect.
PN147
VICE PRESIDENT HATCHER: If one starts looking at it in weeks in the ordinary conception, you take four weeks off work, then that would be three weeks not 14 days.
PN148
MR MUELLER: I would have to cavil with that because it would be, in our submission, 14 days off work and it would have to be calculated that way.
PN149
COMMISSIONER CRIBB: It depends whether the person appears at work on the 15th day.
PN150
MR MUELLER: Yes.
PN151
COMMISSIONER CRIBB: Yes. Because if what the Vice President has said, somebody doesn't come back on the Friday and they actually come back on the Monday, it’s three weeks.
PN152
MR MUELLER: They have been away from work for three weeks, but ‑ ‑ ‑
PN153
COMMISSIONER CRIBB: Correct.
PN154
VICE PRESIDENT HATCHER: See this is the product of you trying to convert the concept of a week into a measurement of working time.
PN155
COMMISSIONER CRIBB: Yes.
PN156
MR MUELLER: No.
PN157
VICE PRESIDENT HATCHER: A week is a period of days which constitutes seven days on the calendar.
PN158
MR MUELLER: No. With respect, that would be, I think, a momentous notion in the workplace.
PN159
VICE PRESIDENT HATCHER: Momentous?
PN160
MR MUELLER: Momentous I say.
PN161
DEPUTY PRESIDENT GOSTENCNIK: Presumably, you say that section 88(1) allows for paid leave to be taken for a period agreed between the employer and an employee and the period agreed in this scenario would be 14 working days.
PN162
MR MUELLER: Yes. And they wouldn't need our agreement, with respect, to the last day. That's my point. That's why I say it’s momentous.
PN163
DEPUTY PRESIDENT GOSTENCNIK: The last day is an RDO, isn't it?
PN164
COMMISSIONER CRIBB: It’s not, no. It’s unpaid, isn't it?
PN165
DEPUTY PRESIDENT GOSTENCNIK: Unpaid.
PN166
COMMISSIONER CRIBB: It’s an unpaid day.
PN167
MR MUELLER: Yes, well, correct. Correct.
PN168
COMMISSIONER CRIBB: It’s not an RDO.
PN169
MR MUELLER: Yes. But my point is that they don’t work on that day.
PN170
COMMISSIONER CRIBB: Yes, but they're not paid for it.
PN171
MR MUELLER: Yes, yes.
PN172
COMMISSIONER CRIBB: Whereas an RDO, they are.
PN173
MR MUELLER: Yes. But my answer is directed to the Vice President’s proposition which would – and I do say that it would be significant – momentous is perhaps hyperbole - would be to say that an employee would be rightly aggrieved if that last day was treated as an annual leave day and it isn't.
PN174
VICE PRESIDENT HATCHER: So that elevates the expression of week to mean five working days.
PN175
MR MUELLER: Effectively, that’s the way it works in the workplace. If one applies for leave, one applies for an absence from a working day and one’s experience with the system is that the number of days that the system will say being deducted – and I can speak from personal experience here – is the number of days from which you are expected to turn up and work.
PN176
DEPUTY PRESIDENT GOSTENCNIK: It’s seven days in the case of Clayton Utz, isn't it, Mr Mueller?
PN177
MR MUELLER: Yes, that's correct.
PN178
DEPUTY PRESIDENT GOSTENCNIK: I speak from personal experience.
PN179
MR MUELLER: Yes. And no National Employment Standards.
PN180
DEPUTY PRESIDENT GOSTENCNIK: No, I shouldn't say that.
PN181
MR MUELLER: But could I ‑ ‑ ‑
PN182
COMMISSIONER CRIBB: Sorry, could I ask a really dumb question? These employees are full‑time employees. Right?
PN183
MR MUELLER: Yes.
PN184
COMMISSIONER CRIBB: And because of the pay averaging, they receive every week 38 hours, but the last day of the third week, is that approved leave without pay or something because they’ve ‑ ‑ ‑
PN185
MR MUELLER: Yes, I think ‑ ‑ ‑
PN186
COMMISSIONER CRIBB: Because it’s not an RDO.
PN187
MR MUELLER: I think that gels with the question that I’ve already been asked and for which I'm not offering an answer at the moment. May I come back to it?
PN188
COMMISSIONER CRIBB: Sure.
PN189
MR MUELLER: Yes.
PN190
VICE PRESIDENT HATCHER: Just so I understand, in this third week, they have the third week off and that’s all. What do I get paid?
PN191
MR MUELLER: Under which system? Under the ‑ ‑ ‑
PN192
VICE PRESIDENT HATCHER: I'm just talking about payment under the agreement at this time. I'm not talking about deduction, just payment.
PN193
MR MUELLER: Yes.
PN194
VICE PRESIDENT HATCHER: So would you get ‑ ‑ ‑
PN195
COMMISSIONER CRIBB: 38 hours.
PN196
VICE PRESIDENT HATCHER: Do I get 38 hours or ‑ ‑ ‑
PN197
MR MUELLER: Yes.
PN198
COMMISSIONER CRIBB: Yes.
PN199
VICE PRESIDENT HATCHER: ‑ ‑ ‑ do I get four days’ pay?
PN200
COMMISSIONER CRIBB: Yes, 38.
PN201
MR MUELLER: Under the averaging pay system you get 38 hours.
PN202
DEPUTY PRESIDENT GOSTENCNIK: In the third week?
PN203
MR MUELLER: Yes.
PN204
COMMISSIONER CRIBB: Yes.
PN205
DEPUTY PRESIDENT GOSTENCNIK: Even though you only worked four days?
PN206
MR MUELLER: Yes.
PN207
COMMISSIONER CRIBB: Correct.
PN208
MR MUELLER: Which I think is the answer, but I want to check my instructions about that because I think it’s ‑ ‑ ‑
PN209
DEPUTY PRESIDENT GOSTENCNIK: Because how do you describe the fifth day as unpaid if in fact they are paid?
PN210
MR MUELLER: Yes.
PN211
DEPUTY PRESIDENT GOSTENCNIK: Anyway, yes.
PN212
VICE PRESIDENT HATCHER: And then you say in Commissioner Roe’s interpretation there would be a deduction of four times 7.6 or five times 7.6?
PN213
MR MUELLER: There would be four times 7.6, which is what the table illustrates and I can say is the fact.
PN214
VICE PRESIDENT HATCHER: So that’s the current ‑ ‑ ‑
PN215
MR MUELLER: It is. It is. I think as Commissioner Roe’s decision makes apparent and my friend’s submissions makes apparent, that has been the practice for a long period of time.
PN216
VICE PRESIDENT HATCHER: What’s that, 31.4?
PN217
COMMISSIONER CRIBB: So that’s in the third week. There’s only four lots of 7.6 not five?
PN218
MR MUELLER: Yes.
PN219
COMMISSIONER CRIBB: Yes?
PN220
MR MUELLER: I think that’s correct.
PN221
COMMISSIONER CRIBB: You're sure?
PN222
MR MUELLER: No, I'm not sure.
PN223
VICE PRESIDENT HATCHER: And on your client’s proposal there would be a deduction of 32.8?
PN224
MR MUELLER: Yes.
PN225
VICE PRESIDENT HATCHER: All right.
PN226
MR MUELLER: The deduction would always correspond to the actual hours.
PN227
COMMISSIONER CRIBB: Because I can’t imagine how there weren't five lots of 7.6 deducted.
PN228
MR MUELLER: Yes.
PN229
COMMISSIONER CRIBB: Because that doesn't make sense in the third week.
PN230
MR MUELLER: Yes, which is ‑ ‑ ‑
PN231
COMMISSIONER CRIBB: You know, for the past 20 years ‑ ‑ ‑
PN232
MR MUELLER: This is a challenging area and it has its challenges for me and the question that’s raised is one that I need to satisfy myself that I’ve got a complete answer.
PN233
VICE PRESIDENT HATCHER: On either approach, I don't understand why you would always try and take leave on the third week and get 38 hours paid and you get a deduction of much less than that.
PN234
MR MUELLER: Yes. Subject to the resolution of that issue, the next point that I wanted to make in support of our proposition is one by reference to the explanatory memorandum which is found most conveniently annexed to our outline of submissions. I think in order to properly develop this point, I just wish to remind the Commission about what use may be made of this document and could I hand up a folder of authorities? I might have done this at the outset, but didn't.
PN235
I don’t pretend to be educating the Commission in this area, but I think it is necessary sometimes to remind oneself of the manner in which ‑ ‑ ‑
PN236
VICE PRESIDENT HATCHER: The Acts Interpretation Act governs this, doesn't it?
PN237
MR MUELLER: Yes.
PN238
VICE PRESIDENT HATCHER: And that is to resolve ambiguity or to confirm the plain and ordinary meaning.
PN239
MR MUELLER: Yes. So we say that we make this point in two ways under that provision, appreciating that there are, of course, a host of authorities, including recent authorities in this Commission and the High Court, which emphasise that the task of statutory construction is a text based exercise. It begins with the text by which the authorities mean not just the text of the single provision, but the text read in the context of the Act and read in the context of the apparent purpose and object of the Act.
PN240
It starts with the text. I think there’s a statement in a recent High Court authority to say that it finishes with the text as well. One cannot allow the extrinsic material to, as it were, override the meaning which is ascertained from that text based exercise, but nevertheless, as a matter of technique, what we say here is that by our reference to the explanatory memorandum that I'm about to take the Commission, we put it on two bases. We put it on section 15AB(1)(a) basis, namely, that recourse to it confirms the meaning of the provision is the ordinary meaning conveyed by the text of the provision, taking into account its context in the Act and the purpose or object underlying the Act, which is precisely what the authorities say is the task of construction and what we’re saying is that for the reasons I’ve mentioned, that is what I said is the ordinary meaning of the act, so we say that.
PN241
Then we say, alternatively, if you don’t accept that proposition then we say that at least the meaning of the provision read in context is ambiguous and that recourse to this material, to which I'm about to take the Commission, will assist in determining the meaning. So in that background, I go to the extracts from the explanatory memorandum to the bill which became the Act and, in particular, that part of the explanatory memorandum that addresses itself to part 2-2 of the National Employment Standards.
PN242
The first page, which is page 39 from the explanatory memorandum, there’s a general introduction to the nature and purpose of the National Employment Standards carried by part 2-2. I just draw attention, in anticipation of a point I'll make a little later, although not too much later, in paragraph 235 where it says:
PN243
The ordinary hours of work for an employee to whom an enterprise agreement applies will be the hours identified in the enterprise agreement.
PN244
Then there’s the bracketed part and this is the part that I'll mention again:
PN245
An agreement should identify ordinary hours or a means of determining ordinary hours in order for the agreement to pass the better off overall test.
PN246
In that respect, I draw attention to section 20 of the Fair Work Act. That section deals with the ascertaining of ordinary hours of an award or agreement free employee. The reason I draw attention to it is simply this that there is no equivalent provision with respect to an enterprise agreement covered employee or an award covered employee and that - really drawing attention for completeness of the analysis – as it were, explains or makes good that bracketed part of the explanatory memorandum.
PN247
One doesn't find in the Act a definition of ordinary hours of work. One finds that section 20 in respect of award and enterprise agreement free employees and one finds the apparent legislative intention that the ordinary hours of an employee who is covered by an agreement or award are to be ascertained by a deduction from the terms of the applicable award or enterprise agreement. The reason why it’s important to draw attention to that bracketed part and that proposition that I’ve just mentioned is that on the submissions that the respondent to the appeal has made, the Commissioner has failed to identify the ordinary hours of work.
PN248
We think the better construction of the decision is that the Commissioner identified 7.6 hours per day as the ordinary hours of work. We go on to say later that if that’s what the Commissioner did, he was in error because that’s not a correct interpretation of the terms of the agreement.
PN249
COMMISSIONER CRIBB: In terms of clause 14 of the agreement?
PN250
MR MUELLER: No. Clause 14 is a definitional provision which does not apply to employees working these shift rosters and I'll take you to the provision in the agreement that says that. I would have to do some gymnastics, I accept, to displace the proposition that 7.6 hours was the ordinary hours of an employee if that definition applied, but it’s quite plain that it doesn't.
PN251
Having drawn attention to that, and I will come back to its significance again, on page 63 there are extracts relating to the clauses that became the provisions about personal and carer’s leave. Then clause 99 addresses itself to the question of payment of an employee who takes paid personal or carer’s leave and then on the following page – and this seems to be and is, in our submission, a statement with respect to the question of an employee’s ordinary hours of work.
PN252
Although it follows on page 64, it’s not confined to the last mentioned clause. It’s making an observation about a concept which is central to the NES entitlements regarding leave.
PN253
VICE PRESIDENT HATCHER: So this statement is about personal carer’s leave?
PN254
MR MUELLER: Yes, it is.
PN255
VICE PRESIDENT HATCHER: Is there an equivalent statement about annual leave?
PN256
MR MUELLER: There isn’t. No, there isn't.
PN257
DEPUTY PRESIDENT GOSTENCNIK: There is a similar statement on 63, which I'm just having copied, but it for some reason appears under the heading of “cashing out of entitlements” but there’s an example about ordinary hours of work being central to the concept of annual leave accrual which you haven't reproduced, but I’ve just had my associate – she’s making copies for the parties in a moment.
PN258
MR MUELLER: I wonder whether something has gone wrong in the photocopying because I had thought that what I'm about to take you to is that which you've just referred to, or something very much like it.
PN259
VICE PRESIDENT HATCHER: In any event, please continue and I'll ‑ ‑ ‑
PN260
MR MUELLER: What I'm looking at is a text in a square box on page 64.
PN261
DEPUTY PRESIDENT GOSTENCNIK: Yes, I see. There’s a specific example which is in the annual leave section at, I think it’s 263.
PN262
MR MUELLER: I'm sorry. I must have missed it. I'm hoping it’s to the same effect.
PN263
DEPUTY PRESIDENT GOSTENCNIK: It is to the same effect.
PN264
MR MUELLER: Yes.
PN265
DEPUTY PRESIDENT GOSTENCNIK: Well, it’s to a similar effect, anyway.
PN266
MR MUELLER: Yes. So you'll see what is said in the first paragraph there about the concept being central – the concept of employees’ ordinary hours of work. Then if one goes down under the heading “general principles” comes to the second‑last paragraph - I think perhaps I should draw attention to the whole of it. You'll see that it says:
PN267
Leave accrues according to an employee’s ordinary hours of work.
PN268
That's the proposition that is carried in the subsection 2s and the explanatory memorandum recognises that such hours are often expressed as a number of hours per week. It goes on to say in the second paragraph:
PN269
Although this is expressed as an entitlement to 10 days, one could substitute in respect of annual leave –
PN270
as I hope the note does in that regard. It will say “as an entitlement to four weeks” reflecting a standard five‑day pattern –
PN271
- by relying –
PN272
-
PN273
by relying on –
PN274
- an employee’s ordinary hours of work, the bill ensures that the amount of leave accrued over a period is not affected by differences in the actual spread of an employee’s ordinary hours of work in a week. Therefore, a full‑time employee who works 38 hours a week over five days will accrue the same amount of leave as a full‑time employee who works 38 ordinary hours over four days per week. Over a year of service, both employees would accrue 76 hours of paid personal carer’s leave.
PN275
-
PN276
What we’re saying there is it’s plain that the legislature is conceiving that the references to days in this case, references to weeks as far as annual leave is concerned, is a concept that translates into hours of ordinary work. Then it says in the final paragraph:
PN277
Similarly, the requirement to pay an employee for their absence on the basis of their ordinary hours of work for the period of the absence means the employee is entitled to be paid for his or her ordinary hours of work on the days in the week they would have worked but for being absent from work on paid carer’s leave.
PN278
Which we say is expressing our proposition.
PN279
VICE PRESIDENT HATCHER: It only expresses the proposition that you get paid what you would have got paid if you’d been at work.
PN280
MR MUELLER: Yes. By extension of that, one takes annual leave according to the hours that one would have worked ‑ ‑ ‑
PN281
VICE PRESIDENT HATCHER: That's not what your client is proposing to do. Your client is proposing to make a deduction which is greater than, or less than, the amount the employee would have got paid in that week had they worked because they get paid an average.
PN282
MR MUELLER: Yes. I'll come back to that because it concentrates on the payment side and I haven't got a complete answer to that yet, but on the question of the grant of the recognition of the entitlement to actual leave, what we’re saying is the relationship is between the number of hours that the employee would have worked, but for taking leave and that governs the amount of the deduction.
PN283
VICE PRESIDENT HATCHER: Mr Mueller, just I suppose as an aside, neither party has touched on this point, but regulation 3.36 requires an employee to keep certain records; amongst them is a record of leave taken by employees and the employer must keep a record which sets out, amongst other things, any leave that the employee takes and any balance of that entitlement from time to time and whether or not that obligation touches on anything that the employer is proposing to do.
PN284
MR MUELLER: Yes. Under the proposed means of doing it, and which it’s plain from decisions in this area, is not an unusual means of doing it, RACV will accrue on the basis of actual hours worked and deduct on the basis of actual hours worked and that’s what the records will show. It would be no secret that that’s the way they would like to do it.
PN285
VICE PRESIDENT HATCHER: My question is whether deducting at 7.6 hours would be consistent with the requirement to keep records of any leave that the employee takes.
PN286
MR MUELLER: In my submission, it raises the same question. It raises the question, “What is compliant?” and what is compliant depends - we say at the outset involves an acceptance of what I'll say is the hourly basis of accrual and deduction.
PN287
COMMISSIONER CRIBB: Mr Mueller, could I just, before you move on, take you to the last paragraph in that box that you referred us to and that’s talking about the requirement to pay an employee? It talks about based on the ordinary hours of work on the days in the week. Hasn’t the agreement, by providing for an averaging of the pay, transcended that? It’s replaced it with an average pay system, not an actual pay system. People don’t get actually paid ‑ ‑ ‑
PN288
MR MUELLER: Yes.
PN289
COMMISSIONER CRIBB: ‑ ‑ ‑ as per the hours they work. They get an average.
PN290
MR MUELLER: Yes.
PN291
COMMISSIONER CRIBB: So hasn't that changed?
PN292
MR MUELLER: With respect, no. Because of the proposition I made a moment ago, you'll see that that last paragraph, like the provision that expresses it in the Act, turns on the basis of their ordinary hours of work.
PN293
COMMISSIONER CRIBB: Yes, but we’re talking about a requirement to pay them ‑ ‑ ‑
PN294
MR MUELLER: Yes.
PN295
COMMISSIONER CRIBB: ‑ ‑ ‑ which is based on their ordinary hours of work.
PN296
MR MUELLER: Yes.
PN297
COMMISSIONER CRIBB: But the agreement has taken over that space by saying, “Regardless of whether you work 32.8 hours in this week or 41.3 hours in this week, we’re going to pay you for 38.”
PN298
MR MUELLER: Yes.
PN299
COMMISSIONER CRIBB: So hasn't that superseded ‑ ‑ ‑
PN300
MR MUELLER: No, with respect. It’s not inconsistent with it because it’s the agreement and that’s reflected in that earlier passage that I took you to which governs the identification of the ordinary hours of work.
PN301
COMMISSIONER CRIBB: Which is an average of 38, clause 87.2.
PN302
MR MUELLER: It does for the purposes of pay.
PN303
COMMISSIONER CRIBB: Yes, but that’s what that bottom one is about is the requirement to pay.
PN304
MR MUELLER: Yes, yes. I just need to tease out the proposition that is inherent in what the Commissioner is saying that – and correct me if I'm wrong, but the proposition would seem to be that if that’s true for pay then it must follow that the ordinary hours of work for accrual and deduction of leave must also be 38. Yes. That's the matter that I need to clarify and it brings it into sharp focus.
PN305
VICE PRESIDENT HATCHER: Mr Mueller, I’ve distributed a copy of page 62 of the explanatory memorandum.
PN306
MR MUELLER: Thank you.
PN307
VICE PRESIDENT HATCHER: It has that example.
PN308
MR MUELLER: If I might just take a moment?
PN309
VICE PRESIDENT HATCHER: Of course.
PN310
MR MUELLER: Yes, I think I can draw essentially the same point from it, namely, the legislative recognition that the entitlement is one which is translatable into hours.
PN311
VICE PRESIDENT HATCHER: It accumulates and is taken and paid according to ordinary hours.
PN312
MR MUELLER: Yes.
PN313
VICE PRESIDENT HATCHER: Can I just take you to that in relation to the part‑time example?
PN314
MR MUELLER: Yes.
PN315
VICE PRESIDENT HATCHER: So it says 12 hours. Let’s say the person works the 12 hours, six hours on Monday and six hours on Tuesday. If a part‑time employee in a particular week takes the Monday and Tuesday off and then returns to work on the following Monday, I thought you were saying that the analysis of that is they’ve taken 12 hours’ leave when in fact I would have assessed there what they’ve done is taken eight weeks’ leave.
PN316
MR MUELLER: Yes. It’s the former. They’ve taken 12 hours’ leave.
PN317
VICE PRESIDENT HATCHER: So they accrue four weeks’ leave per year of service, even though they're a part‑timer. They take the two days off in a week that they're due to work and you say they’re only deducting 12 hours and not a week? How can that be right?
PN318
MR MUELLER: If they were a part‑timer working 12 hours per week, I think that’s the example ‑ ‑ ‑
PN319
VICE PRESIDENT HATCHER: Yes.
PN320
MR MUELLER: ‑ ‑ ‑ then their aliquot entitlement to annual leave would be ‑ ‑ ‑
PN321
DEPUTY PRESIDENT GOSTENCNIK: 24 over six months.
PN322
MR MUELLER: Correct.
PN323
DEPUTY PRESIDENT GOSTENCNIK: Yes.
PN324
MR MUELLER: Yes.
PN325
DEPUTY PRESIDENT GOSTENCNIK: So they would have taken a week. 12 hours is a week.
PN326
MR MUELLER: Well, notionally, it’s a week. Yes.
PN327
DEPUTY PRESIDENT GOSTENCNIK: If they took it in the same week, it’s a calendar week and it’s 12 hours, which is their accrual of a week.
PN328
MR MUELLER: Yes. They’ve taken 12 hours.
PN329
DEPUTY PRESIDENT GOSTENCNIK: Which is a week.
PN330
MR MUELLER: It translates to a week in ‑ ‑ ‑
PN331
DEPUTY PRESIDENT GOSTENCNIK: Yes. On the Vice President’s example, they took the Monday and Thursday off as leave, they took 12 hours’ leave, they also took a week because it was a calendar week. They're away for that week.
PN332
MR MUELLER: Yes.
PN333
VICE PRESIDENT HATCHER: Yes, that’s what that is, but in terms of a week, why don’t you measure it as the chronological time on a calendar from the day you left work to the day you come back? So if my first day off is a Monday, my next day back at work is a Monday, that’s a week.
PN334
MR MUELLER: I appreciate the appeal of that, but when one looks at the provisions in the Act, one looks at the explanatory material, it does not seem as though that conceptual way of looking at it is the way that it does operate and it’s certainly not the way it operates in the workplace.
PN335
VICE PRESIDENT HATCHER: That suggests at some stage the Federal scheme has departed from the way it used to be expressed in the state Annual Holidays Act.
PN336
MR MUELLER: Yes. I can remember there used to be the public holiday order I think that applied in Victoria, which is much like the legislation that expressed itself in weeks, but I confess I can't remember how that was deconstructed, as it were.
PN337
VICE PRESIDENT HATCHER: It’s less familiar to Victorians. I accept that.
PN338
COMMISSIONER CRIBB: Thank you.
PN339
MR MUELLER: So we rely on that. We accept that the argument that we’re advancing – and this is a point made in my friend’s submission – is inconsistent with the decision of Commissioner Lee in the QR decision which in turn is said, I think in my friend’s submission, and in slightly different terms in the decision of Commissioner Roe to be supportive of the resolution that Commissioner Roe reached. The relevant passage – and that decision is contained at tab ‑ ‑ ‑
PN340
MR BAKRI: I may be able to assist.
PN341
MR MUELLER: Yes.
PN342
MR BAKRI: We've got that authority in our folder and I'll hand those up now.
PN343
MR MUELLER: Thank you. That's my mistake.
PN344
MR BAKRI: It’s behind tab.
PN345
MR MUELLER: Yes, thanks, behind tab 2 of my friend’s folder. You'll see that that’s a decision which concerned an agreement, as is evident from paragraph 3 of the first page of the decision which provided that:
PN346
Hours of annual leave taken, cashed out or donated will be deducted from the employee’s accrual.
PN347
The relevant passage is at paragraph 86 and I take you to this passage because here the Commissioner expresses a conclusion regarding the use of the expression “week”. You'll see that the Commissioner in 85 refers to paragraph 57 of the Fair Work bill explanatory memorandum and goes on in paragraph 86 to say:
PN348
I do not think that this provision can be relied on –
PN349
I think it is –
PN350
- to define a week as a simple aggregation of ordinary hours which an employee would have otherwise been rostered to perform during a seven-day period. In any case, it should be ignored as it is clearly inconsistent with the unambiguous ordinary meaning of the word “week” and “day” in the Act.
PN351
-
PN352
I just pause there to say that there is imbedded in that proposition that a conclusion about the construction of the Act which is not developed – there may be reasons why it’s not developed, but it’s certainly not developed in the face of the contentions that the Full Bench is hearing this morning.
PN353
VICE PRESIDENT HATCHER: That is the ordinary meaning of “week” and “day”. Whether you should adopt the ordinary meaning is another question.
PN354
MR MUELLER: Yes.
PN355
VICE PRESIDENT HATCHER: But there’s no doubt that is the ordinary meaning.
PN356
MR MUELLER: I would accept as much, but I would say that that’s not - with respect, I think the Commissioner is taking that a little further and saying that that is the meaning which is to be attributed to the prescription of the entitlement to annual leave in the Act. I think that is evident by what the Commissioner goes on to say:
PN357
The NES refers to weeks and days and is based on accrual and payment for ordinary hours. Employees are entitled to be absent from the workplace on annual leave for a five-week period if shift workers – and be paid ordinary hours and are entitled to be absent for 10 days on carer’s leave and be paid their ordinary hours.
PN358
Which has an echo, I think, of the proposition that the Vice President was developing. A day is a day and this is, I think, the embodiment of the proposition:
PN359
A day is a day and a week is a week and they should be given their ordinary meaning in employing an employee, even if they are a shift worker, that crams their ordinary hours into less than five days a week is still entitled in accordance with the NES to be able to take a five-week holiday or access 10 days of carer’s leave.
PN360
To which we would say that begs the question – it begs the question as: what is the entitlement. What does five weeks mean in the context of the provisions of the act? How is to be accrued? How is to be deducted? How is it to be granted? How is it to be paid?
PN361
VICE PRESIDENT HATCHER: Just go back to the paragraph from the explanatory memorandum quoted there.
PN362
MR MUELLER: Yes.
PN363
VICE PRESIDENT HATCHER: And it compares it to the then existing system, presumably the WorkChoices system. So how did that work?
PN364
MR MUELLER: I’d be ‑ ‑ ‑
PN365
DEPUTY PRESIDENT GOSTENCNIK: Leave used to accrue on a four-weekly basis.
PN366
MR MUELLER: Yes. It accrued by intervals.
PN367
DEPUTY PRESIDENT GOSTENCNIK: And at the end of each four weeks, the employer had to credit an amount accrued in that four-week period.
PN368
MR MUELLER: Exactly. That's why we place some emphasis on the use of the expression “progressive” in the two subsection 2s because that denotes – and we appreciate the danger of picking a word in a composite phrase or in a provision that then sort of plugging back the dictionary definition to arrive at the meaning. That's not what you do, but you can gain assistance from dictionary definitions and it is significant in our submission that the word “progressive” has been used. It does denote and we have with that caution in mind included within our folder the two definitions of the word “progressive”. I won’t take the Commission to them, but they're behind tab 7 and 8. They’re the Macquarie and the Oxford English – behind tab 6 and 7, I should say, the Oxford and the Macquarie definition.
PN369
In both cases one finds the notion of continuous, of continuity, and we say that the idea – one can’t go down to a sort of atomistic level of saying that annual leave accrues according to minutes performed. In fact, the Act tells us that we shouldn't do that. It refers to ordinary hours worked. So one does descend down to ordinary hours worked and we say annual leave accrues according to ordinary hours worked. In the case of, we say, universally that means actual hours worked, but if it doesn't mean that, it certainly means what the agreement says ordinary hours. For the reasons that I'll come to ‑ ‑ ‑
PN370
COMMISSIONER CRIBB: But isn’t it just what that says? It’s not actual because the agreement says ordinary hours and whatever that is. Where does “actual” come in?
PN371
MR MUELLER: We say that the expression “ordinary” – that the expression ‑ ‑ ‑
PN372
COMMISSIONER CRIBB: Because it’s, “Ordinary hours shall average,” and that’s different to “actual”; 87.2A.
PN373
MR MUELLER: 87?
PN374
COMMISSIONER CRIBB: In the agreement.
PN375
MR MUELLER: Yes.
PN376
COMMISSIONER CRIBB: You took us to the explanatory memorandum in the overview and it says:
PN377
The ordinary hours of work to whom an enterprise agreement applies will be the hours identified in the enterprise agreement.
PN378
COMMISSIONER CRIBB: Correct me if I'm wrong, but the hours identified in the enterprise agreement are at clause 87.2, “hours of work, shift work”.
PN379
MR MUELLER: Yes.
PN380
COMMISSIONER CRIBB: And it says:
PN381
The ordinary hours of shift workers shall average 38 per week.
PN382
MR MUELLER: Yes.
PN383
COMMISSIONER CRIBB: Which is not actual hours worked because they don’t ‑ ‑ ‑
PN384
MR MUELLER: Yes. You've taken me to the point that I was almost going to go to. Our point here, Commissioner, is this: one will see – and this appears at page 383 of the appeal book – and this is those provisions of the agreement that deal with hours of work for shift work employees, but these are the provisions which one looks at for the purposes ‑ ‑ ‑
PN385
VICE PRESIDENT HATCHER: What page was that again?
PN386
MR MUELLER: That's page 383.
PN387
COMMISSIONER CRIBB: I seem to have weird numbers. That's a technical term.
PN388
MR MUELLER: It isn't corresponding?
PN389
COMMISSIONER CRIBB: Because I go 287, 290 then I go 395, unless I’ve completely messed up things.
PN390
MR MUELLER: Yes.
PN391
COMMISSIONER CRIBB: And that’s possible.
PN392
MR MUELLER: I think we'll substitute – there may be just a couple of over markings in this one that I hand up, but it’s important that you ‑ ‑ ‑
PN393
COMMISSIONER CRIBB: Have you got 384?
PN394
MR MUELLER: I'm not going to admit to culpability, but I think what has occurred is that I last night pulled out from one of the folders ‑ ‑ ‑
PN395
COMMISSIONER CRIBB: Guess what?
PN396
MR MUELLER: Yes. It was the one that was mistakenly handed up. That's my error.
PN397
COMMISSIONER CRIBB: Have you got another copy ‑ ‑ ‑
PN398
MR MUELLER: Yes.
PN399
COMMISSIONER CRIBB: ‑ ‑ ‑ if I borrow this?
PN400
MR MUELLER: Yes. That's the ‑ ‑ ‑
PN401
COMMISSIONER CRIBB: I shall return it later.
PN402
MR MUELLER: ‑ ‑ ‑ purpose for which we handed it up.
PN403
COMMISSIONER CRIBB: Thank you.
PN404
MR MUELLER: Yes.
PN405
VICE PRESIDENT HATCHER: So what page, 383?
PN406
MR MUELLER: 383. So you'll see there that 87.2A provides that:
PN407
The ordinary hours of shift workers shall average 38 per week, inclusive of paid meal breaks averaged over a complete cycle of the roster.
PN408
You'll see that there are a variety of shift patterns which the employer may adopt, including most relevantly 114 hours within a work cycle not exceeding 21 consecutive days, such as the example that we handed up. The point we make about that provision is that it does not in its terms define ordinary hours of work. In fact, what we say that it presupposes that ordinary hours will be something other than 38 per week. That's our point and it’s an important one. It says:
PN409
The ordinary hours of shift work shall average 38 per week.
PN410
That's a direction that the outcome must be 38 hours per week as an average. That presupposes that the ordinary hours of work may, or may not, be 38 per week. So that makes perfect sense in a context where you have shift work patterns, such as those contemplated here and, indeed, that’s the way it expresses itself in reality. As per the example we handed up, one has differing lengths of time for each shift or differences between shifts.
PN411
What we say is on reading that, the natural conclusion to reach is that the ordinary hours of a particular shift worker are the hours which the shift worker works according to their roster. Clause 87.2A merely prescribes that the outcome must be an average. It’s for that reason – and this was our both linked and free standing argument – that this agreement, properly construed, provides that the ordinary hours of work are the rostered hours of work of an employee.
PN412
DEPUTY PRESIDENT GOSTENCNIK: Mr Mueller, can I put this proposition to you? Section 87.2 provides that a leave accrues progressively according to the employee’s ordinary hours of work. It doesn't say according to the ordinary hours worked by the employee. If you read that in conjunction with the definition in section 20 and then the hours provision in the NES and, in particular, the permissive provision in section 63 ‑ ‑ ‑
PN413
MR MUELLER: Yes.
PN414
DEPUTY PRESIDENT GOSTENCNIK: ‑ ‑ ‑ which allows an averaging of hours.
PN415
MR MUELLER: Additional hours, yes.
PN416
DEPUTY PRESIDENT GOSTENCNIK: Why doesn't 87.2 set the ordinary hours of work for a shift worker and, therefore, it’s perfectly permissible to accrue leave at 7.6 as an average, given that one operates an averaging system, and to pay the employee for that week and deduct the accrual at 7.6? What’s wrong with that?
PN417
MR MUELLER: Implicit in that is the proposition that – and I accept the steps in that, but for the step which says that clause 87.2 properly construed means that the ordinary hours of the shift worker are 38 hours per week. I say that for two reasons: (1) it’s not what it says. It says that the ordinary hours of a shift worker shall average 38 hours per week.
PN418
VICE PRESIDENT HATCHER: The ordinary hours for what purpose? For the purposes of accrual? Is that what this point is? I’ve got the whole point of explanatory memorandum you took us to was to say, look, it doesn't matter how the pattern of work is, it’s 38 hours over the 12 months. You’re accruing that amount of annual leave. So what does this matter? Over 12 months will be 38 hours.
PN419
MR MUELLER: It would be 38.
PN420
VICE PRESIDENT HATCHER: And will accrue progressively at 38 hours a week.
PN421
MR MUELLER: Yes. Over the whole period, correct.
PN422
VICE PRESIDENT HATCHER: But you're saying that because in a given week there may be more hours in one week and less in another week, it will accrue more in one week and less in the next week.
PN423
MR MUELLER: This is for the purpose of ensuring that a shift pattern that is worked over a 12-month period produces the outcome that on average an employee has worked 38 hours per week.
PN424
VICE PRESIDENT HATCHER: Yes.
PN425
MR MUELLER: It doesn't follow from that, that the ordinary hours worked on a day or in a week are 38 hours.
PN426
VICE PRESIDENT HATCHER: Of course. I mean, I think we all know that.
PN427
MR MUELLER: Yes.
PN428
VICE PRESIDENT HATCHER: But what’s the consequence of that is what I'm trying to say?
PN429
MR MUELLER: The consequence is that once you accept that then the accrual is by reference to the actual ordinary hours worked.
PN430
VICE PRESIDENT HATCHER: That's precisely contrary to what the explanatory memorandum says, isn't it? The whole purpose of that was to say, “Look, it doesn't matter what the pattern is. If it’s 38 hours over the period of accrual averaging, it’s 38 hours.”
PN431
MR MUELLER: That's for the purposes of pay.
PN432
VICE PRESIDENT HATCHER: The purpose of accrual as well? Otherwise you've got this microanalysis whereby for every single person you've got to work out a different accrual for every week.
PN433
MR MUELLER: Well, Vice President. I wanted to come to that because there is a tendency, and a tendency which is apparent in the decisions themselves, to treat this as if it is a prescription which is to be looked at in some general way rather than with respect to the entitlement of a particular employee. It is important to remember that the NES standards prescribed entitlement for an employee.
PN434
VICE PRESIDENT HATCHER: So that is for every single employee you have to work out a different accrual for every week that they work?
PN435
MR MUELLER: Yes, yes, of course, because ‑ ‑ ‑
PN436
VICE PRESIDENT HATCHER: Not that they accrue on the basis of 38 hours a week, but you've got to look at their roster for any given week.
PN437
MR MUELLER: That is a consequence of our proposition and we say it’s the correct one; more so by reason of the point that I just made, namely, that the entitlements in the NES go to individual employees and the obligation of the employer is to extend the entitlement to the individual employee according to their particular work circumstances so that it is a natural coefficient of that that one looks at – unless the agreement says otherwise – what their actual ordinary hours are. That's what the ‑ ‑ ‑
PN438
VICE PRESIDENT HATCHER: Right.
PN439
MR MUELLER: I think I was taken into that area by ‑ ‑ ‑
PN440
DEPUTY PRESIDENT GOSTENCNIK: I plead guilty.
PN441
COMMISSIONER CRIBB: No, no, I think it was me.
PN442
MR MUELLER: I think it’s a case of joint and several liability as far as that’s concerned.
PN443
VICE PRESIDENT HATCHER: Mr Mueller, I think we understand your interpretation of the Act.
PN444
MR MUELLER: Yes.
PN445
VICE PRESIDENT HATCHER: Are we moving to the agreement now? I only say that because we've got to finish by 3 o'clock.
PN446
MR MUELLER: Yes, yes. The proposition ‑ ‑ ‑
PN447
DEPUTY PRESIDENT GOSTENCNIK: And that doesn't mean you have three and a half hours left.
PN448
MR MUELLER: No, no.
PN449
COMMISSIONER CRIBB: Exactly.
PN450
MR MUELLER: Our proposition rests on the point that so far as the construction of the agreement and what constitutes ordinary hours rests upon clause 87.2, coupled with the point that we made much earlier that one must be able to deduce - the Act, as it were, almost compels it. The agreement would, as it were, fail if it were not the case. You must be able to deduce from the terms of the agreement an employee’s ordinary hours of work.
PN451
We say that imbedded in clause 87.2A is the proposition that the ordinary hours of work are the shift worker – are the hours that they work, according to their roster and that they are not 38 hours. They are not to be regarded as 38 hours.
PN452
DEPUTY PRESIDENT GOSTENCNIK: So where is the accrual clause in this agreement?
PN453
VICE PRESIDENT HATCHER: Sorry. The actual ordinary hours are reflected in (iii) of that paragraph. Is that the point?
PN454
MR MUELLER: Yes.
PN455
COMMISSIONER CRIBB: No. You're going more specific than that.
PN456
MR MUELLER: No. Actually, no, that isn't. Yes, thank you.
PN457
VICE PRESIDENT HATCHER: It’s far more micro than that.
PN458
COMMISSIONER CRIBB: Yes, more micro.
PN459
VICE PRESIDENT HATCHER: You look at every single week and say, “Look, it’s 42 hours for this week, so you accrue X. 32 hours next week, you accrue Y,” and you've got to calculate it every single week.
PN460
MR MUELLER: Yes.
PN461
COMMISSIONER CRIBB: Yes.
PN462
MR MUELLER: Yes. And the systems do that and the result that is produced is equitable across the board, produces the same result for employees who work a standard 7.6 ‑ ‑ ‑
PN463
DEPUTY PRESIDENT GOSTENCNIK: But (iii) contemplates it would be different hours in any given week ‑ ‑ ‑
PN464
MR MUELLER: Yes.
PN465
DEPUTY PRESIDENT GOSTENCNIK: ‑ ‑ ‑ so long as the accumulated number is no greater than 114.
PN466
MR MUELLER: Yes.
PN467
DEPUTY PRESIDENT GOSTENCNIK: So my point is that the ordinary hours in a 21-day period under the agreement are 114 hours.
PN468
MR MUELLER: I’d have to accept that.
PN469
DEPUTY PRESIDENT GOSTENCNIK: And therefore in a three-week period, putting aside a one-week period, in a three-week period an employee would accumulate a proportion of annual leave attributable to those ordinary hours.
PN470
MR MUELLER: Yes.
PN471
DEPUTY PRESIDENT GOSTENCNIK: In a more micro level, in week 1, it might be the proportion attributable is 41 point something hours and week two it will be 39 point something hours and in week 3 it will be 31 point something hours.
PN472
MR MUELLER: Yes, yes.
PN473
DEPUTY PRESIDENT GOSTENCNIK: I understand.
PN474
MR MUELLER: I think the point at which I was being taken to that was simply illustrating that the passage from Commissioner Lee’s decision ought to be treated with caution.
PN475
VICE PRESIDENT HATCHER: Do you link that with clause 15.1(c), do you, on page 308?
PN476
MR MUELLER: Page?
PN477
VICE PRESIDENT HATCHER: 308, 15.1(c).
PN478
MR MUELLER: Yes.
PN479
VICE PRESIDENT HATCHER: So where it talks about progressive accrual in that paragraph, you say according to the employee’s ordinary hours of work that links back to the proposition that there’s a different number meeting that description every week ‑ ‑ ‑
PN480
MR MUELLER: Yes.
PN481
VICE PRESIDENT HATCHER: ‑ ‑ ‑ on the shift system?
PN482
MR MUELLER: Yes. One does receive a little reinforcement by the second sentence. Again ‑ ‑ ‑
PN483
VICE PRESIDENT HATCHER: That's just contrasting with the last sentence of a non-shift worker and a shift worker.
PN484
MR MUELLER: Yes.
PN485
COMMISSIONER CRIBB: Yes. That's the five weeks’ leave.
PN486
MR MUELLER: Yes.
PN487
VICE PRESIDENT HATCHER: At the end of the day, if you've done your 12 months’ service, this doesn't make any difference because you've either got 152 or 190 hours’ leave. That doesn't answer the question of what you deduct.
PN488
MR MUELLER: No, it doesn't.
PN489
COMMISSIONER CRIBB: No.
PN490
VICE PRESIDENT HATCHER: Where’s the punchline with this? Where do we get to the deduction proposition? This deals with accrual, but where do we get to the proposition as to how this plays out in terms of deducting the entitlement when you take it?
PN491
MR MUELLER: That simply follows that accrual is the correlative or deduction is the correlative of accrual. You can’t have deduction on a basis which is different from accrual.
PN492
VICE PRESIDENT HATCHER: That sounds like it could be. As I read that Hobson’s Bay case, they could result in two different numbers, which I found strange.
PN493
MR MUELLER: Yes. We say that that would be a strange outcome, but ‑ ‑ ‑
PN494
VICE PRESIDENT HATCHER: It was the outcome in that case. That was the outcome in that case.
PN495
MR MUELLER: It was. It was a case which was different in the provisions.
PN496
VICE PRESIDENT HATCHER: So it only illustrates that one does not logically follow from the other. I mean, I understand your point about accrual, but how does one then get the result you want about deduction from that? You just say it’s a matter of logic without looking any further at the text.
PN497
MR MUELLER: Yes, we do. We do. In fact, yes, rationale and logic was our third point, but it’s one which stems from the concepts that we've identified, including progressive accrual.
PN498
DEPUTY PRESIDENT GOSTENCNIK: And the payment issue is taken care of because of the averaging system.
PN499
MR MUELLER: Yes. Although ‑ ‑ ‑
PN500
VICE PRESIDENT HATCHER: But where’s the provision which says you get average pay?
PN501
MR MUELLER: That's section 90.
PN502
VICE PRESIDENT HATCHER: I mean in the agreement.
PN503
MR MUELLER: Within the agreement?
PN504
VICE PRESIDENT HATCHER: The agreement that says notwithstanding you've got different hours in a different week, you get an average pay each week.
PN505
MR MUELLER: My friend says 27.1, which I think rings a bell.
PN506
VICE PRESIDENT HATCHER: I mean 15.1(a) itself says you get paid the applicable hourly rate/weekly wage, which are two different concepts.
PN507
COMMISSIONER CRIBB: 27.1(d).
PN508
MR MUELLER: My friend is right. If one looks at page 347 of the appeal book.
PN509
VICE PRESIDENT HATCHER: That clause suggests it’s optional, doesn't it?
PN510
MR MUELLER: Suggests? Pardon? I missed that.
PN511
VICE PRESIDENT HATCHER: That averaging is an option.
PN512
MR MUELLER: Is an option, yes.
PN513
VICE PRESIDENT HATCHER: Yes.
PN514
MR MUELLER: But it was one that was – in fact, the much larger dispute was about the modification of the averaging process that had been adopted and then ‑ ‑ ‑
PN515
VICE PRESIDENT HATCHER: So if you average, that becomes the applicable weekly wage for the purpose of 15.1(a)?
PN516
MR MUELLER: Yes, yes.
PN517
VICE PRESIDENT HATCHER: So what’s the reference to the applicable hourly rate in 15.1(a)?
PN518
MR MUELLER: The applicable hourly rate is the ordinary rate plus loadings. You'll see that there’s a definition on page 301.
PN519
DEPUTY PRESIDENT GOSTENCNIK: 301.
PN520
MR MUELLER: Which in turn takes you to the definition of weekly wages.
PN521
VICE PRESIDENT HATCHER: The weekly wage is defined divided by the number of hours which constitute the ordinary working week and the work. So what number is that? Is that 38 or the hours worked in a particular week? It must be 38, mustn’t it, otherwise you'd have different wage rates in different weeks?
PN522
MR MUELLER: I'm just looking at the definition of work period, but I think I’d be taking a little licence to say that that - I think I’ve lost track of the question that ‑ ‑ ‑
PN523
VICE PRESIDENT HATCHER: The applicable rate definition which you took us in 301 says:
PN524
The weekly wage is defined below divided by the number of hours which constitute the ordinary working week.
PN525
So I'm asking you is that number 38 in the case of the workers we’re talking about or is it in any given week the actual number of ordinary hours which are worked? If it’s the latter, it will mean that the hourly rate will vary from week to the other.
PN526
MR MUELLER: Yes, yes.
PN527
VICE PRESIDENT HATCHER: Which I'm suggesting would favour 38 as being the number of hours constituting the ordinary working week.
PN528
MR MUELLER: Yes. I'm going to have to take that question on notice, if I may. What I was going to suggest is the substance of the – I’ve made the substance of the submissions. If the Commission was content, I’d like to review the instructions that I’ve now got on that awkward question and then, if I might, and my friend would naturally have an opportunity to reply to ‑ ‑ ‑
PN529
VICE PRESIDENT HATCHER: All right. Would it be convenient if we took a morning tea adjournment of, say, 15 minutes and then that will give you an opportunity to ‑ ‑ ‑
PN530
MR MUELLER: That would be very helpful.
PN531
VICE PRESIDENT HATCHER: All right. We'll resume in about 15 minutes.
SHORT ADJOURNMENT [11.44 AM]
RESUMED [12.03 PM]
PN532
VICE PRESIDENT HATCHER: Mr Mueller, is there anything you wanted to add?
PN533
MR MUELLER: Yes, your Honour; thank you for that time. What I can tell you as a matter of fact - and I don’t think there is any controversy about this - that under the system that presently exists, employees are paid fortnightly; the shift-worker employees are paid fortnightly and regardless of whether or not they’ve taken leave from a rostered shift or shifts during that fortnightly period they are paid the averaged salary.
PN534
DEPUTY PRESIDENT GOSTENCNIK: 76 hours.
PN535
COMMISSIONER CRIBB: 76.
PN536
MR MUELLER: Yes. Now, you might say that on the point that was being developed against us that that implies that the ordinary hours of work should be treated on the same basis; that it’s implicit that the ordinary hours of work under the agreement are 38 per week and it follows that the accrual and deduction should be based on the same proposition. That’s I think he first point that would be made against us. We’d say in response to that that one should distinguish between questions of payment in respect of annual leave and personal carer’s leave and the question of the grant, the accrual and the deduction of leave. That’s proposition one.
PN537
VICE PRESIDENT HATCHER: So if the leave accrued progressively on the basis of 38 hours per week, it was paid at 38 per week and it was deducted at 38 hours a week, what injustice or anomaly would that cause to either side?
PN538
MR MUELLER: The injustice would be the one which is illustrated in the tables that I - - -
PN539
DEPUTY PRESIDENT GOSTENCNIK: But that presupposes a deduction of only four days in the third week.
PN540
MR MUELLER: Yes.
PN541
DEPUTY PRESIDENT GOSTENCNIK: Whereas under what the Vice President is suggesting is that since they are paid for five days in that week, the deduction is five days - - -
PN542
MR MUELLER: That is true.
PN543
DEPUTY PRESIDENT GOSTENCNIK: Accrual occurs at 38 hours a week and it’s taken at 38 hours a week and is paid at 38 hours a week and if a person takes a day then they get 7.6.
PN544
MR MUELLER: Yes, that is true and indeed, in a way when we say that that last day was an unpaid day that’s not strictly correct.
PN545
DEPUTY PRESIDENT GOSTENCNIK: No, it’s not.
PN546
MR MUELLER: Because they get their fortnightly pay they’re paid as if they’d worked - - -
PN547
VICE PRESIDENT HATCHER: So if you treat that third week in the way I’ve already suggested as a week of leave, for which you get paid a week and you get deducted a week, how does that cause an injustice to anybody?
PN548
MR MUELLER: I presently can’t identify one.
PN549
VICE PRESIDENT HATCHER: The same would pertain for the first and second weeks.
PN550
MR MUELLER: Yes.
PN551
VICE PRESIDENT HATCHER: Right.
PN552
MR MUELLER: That’s where I’m content to rest, if the Commission pleases.
PN553
VICE PRESIDENT HATCHER: All right, Mr Bakri.
PN554
MR BAKRI: Thank you, Vice President. The ASU’s response to the application is twofold: firstly, permission to appeal should not be granted, due to some very good and unique reasons; I should say good reasons due to the unique circumstances of the application for leave to appeal. Secondly, should permission be granted, it’s contended that the appeal should be dismissed as there is simply no error in the Commission’s decision. It’s a sound decision which is according to law and not open to challenge.
PN555
I’ll commence addressing the issue of permission to appeal. The ASU contends that the appellant has simply failed to proffer adequate grounds to justify permission being granted in this matter.
PN556
VICE PRESIDENT HATCHER: If the agreement is wrongly interpreted, that would be a ground for permission to appeal to be granted.
PN557
MR BAKRI: We say that the circumstances here are quite unique and it is a ground basis to grant permission to appeal if it’s recognised that substantial injustice will result if leave to appeal is not granted. In the present circumstances it’s contended the Commission should not be satisfied that that’s the case. That’s because of the fact that there are other options available here to the RACV, namely an application to vary the agreement, to remove an ambiguity or uncertainty, pursuant to section 217.
PN558
VICE PRESIDENT HATCHER: If one pauses there, is that a desirable course? That is, wouldn’t it be better to grant permission to appeal and deal with the issue determinatively rather than refuse on that basis and then invite a further application and maybe a further appeal?
PN559
MR BAKRI: It’s our contention that that necessarily wouldn’t be the case. There could be - permission could be granted. The appeal could fail and we will be back here again should the RACV then decide to exercise its right to make an application to remove the ambiguity.
PN560
VICE PRESIDENT HATCHER: That depends upon the way in which the appeal is determined.
PN561
MR BAKRI: It certainly does; it certainly does. But it’s our contention that there’s the possibility here that the RACV will have in that scenario four bites of the cherry and that’s not a desirable course. The Commission has finite resources.
PN562
VICE PRESIDENT HATCHER: That would involve us taking the approach that the Commission is in saying there’s an uncertainty in the agreement but if at the end of the day we came up with an interpretation of the agreement - - -
PN563
MR BAKRI: Yes.
PN564
VICE PRESIDENT HATCHER: - - then that would foreclose any future application on the basis of ambiguity because you would have an answer to the question.
PN565
MR BAKRI: I would accept that.
PN566
DEPUTY PRESIDENT GOSTENCNIK: Mr Bakri, just so that we’re all singing from the same hymn sheet, is it your understanding of the current practice and the practice that is proposed in the Commissioner’s decision that if you take the roster that appears at 278 of the appeal book, that if an employee took annual leave for the entire period of that roster, the employee would be paid 38, 38 and 38 but have deducted from their annual leave credit 38, 38 and 32?
PN567
MR BAKRI: It’s my understanding - and I may stand corrected - that you would have deducted 38, 38, 38 under the present practice.
PN568
VICE PRESIDENT HATCHER: Which is a point which Mr Mueller has consented would be satisfactory. He’s violently disagreeing with you or at least his instructor is.
PN569
DEPUTY PRESIDENT GOSTENCNIK: I think Mr Mueller proceeds on the understanding that the present situation would be a deduction of annual leave of 38, 38 and 32 in that week and that’s why they’re proposing the accrual method that they are proposing.
PN570
MR BAKRI: That’s not my understanding; my understanding is that 38, 38 and 38 are deducted.
PN571
DEPUTY PRESIDENT GOSTENCNIK: Because if that’s everyone’s understanding it seems to be the solution is simple: you’re in heated agreement.
PN572
MR BAKRI: It’s the ASU’s understanding that there’s 14 days deducted at 7.6.
PN573
DEPUTY PRESIDENT GOSTENCNIK: So 38, 38 and 32?
PN574
MR BAKRI: That’s right.
PN575
VICE PRESIDENT HATCHER: So you would get three weeks’ pay at 38 hours but you get the third week deducted at only 32?
PN576
MR BAKRI: I believe that’s correct.
PN577
VICE PRESIDENT HATCHER: All right, so you’ll have to demonstrate why that makes common sense and is logical.
PN578
MR BAKRI: The key contention that’s made by the ASU in response to the grounds that they’ve advanced is that the Commissioner’s finding as to uncertainty is sound. It’s the right decision. He had contentions put before him about various - he had various competing arguments put before him as to what the correct construction of the agreement was and what the correct construction of the NES was and he came to the view that firstly the NES is silent as to the rate of deduction and that is clearly so and that secondly, the agreement was also silent as to the rate of deduction. He is on firm ground to have made that decision, given the definition of what an ambiguity or uncertainty is as has been recognised by the Commission for quite some time. In the decision of re Tenix, which is in the folder of authorities behind tab 1, the full bench found that the Commission will generally err on the side of finding an ambiguity or uncertainty when there are rival contentions advanced and an arguable case is made for more than one of those contentions.
PN579
That’s exactly the situation in which the Commission found himself in in deciding on the dispute that was brought before him. There was an arguable case advanced for more than one proposition. The key contention that I advance is that the appeal should fail on the basis that there is no direct challenge to that finding of uncertainty. It is correct that the RACV says that there is a construction of the NES that should be adopted but they don’t - they fail to really grapple with the test of uncertainty and whether that decision was open to the Commissioner or not.
PN580
If we put that to one side I’ll now deal with the challenges that are advanced by the RACV and deal with them on the terms that they’ve put forward. SO firstly, the RACV’s contended that the NES does not deal with the rate at which leave is deducted. The ASU’s response to that is that the Commission’s view as expressed in the decision is correct. The NES is silent about how deduction occurs.
PN581
VICE PRESIDENT HATCHER: When you say, “silent,” there’s no express provision about it?
PN582
MR BAKRI: Correct.
PN583
VICE PRESIDENT HATCHER: It doesn’t follow that it doesn’t deal with it once one understands what it means.
PN584
MR BAKRI: That’s correct. We would accept that.
PN585
VICE PRESIDENT HATCHER: That is, as I think I said to Mr Mueller, that this idea of deduction over-complicates it. If you’ve got an entitlement expressed in a certain way, whether it’s days or weeks, and you take a day a week, entitlement is reduced by the amount that you’ve taken. There’s nothing particularly complicated about that which requires an express statement, is there?
PN586
MR BAKRI: Well, that’s right, and the NES is very clear as to the rate of accrual and the rate of payment and we would say that what the RACV is really trying to do here is read in words into the statute which do not fit; which would be inconsistent with what the Act has to say about the rate of accrual and the entitlement to a number of weeks of leave and a number of weeks of annual leave and a number of days of personal leave.
PN587
VICE PRESIDENT HATCHER: So you adopt Commissioner Lee’s view that a day is a day and a week is a week?
PN588
MR BAKRI: What we say about that is that that appears to be the correct construction of the NES. We also rely on Commissioner Lee’s comments about the utility or lack thereof of the NES - my apologies, of the explanatory memorandum in interpreting the NES when it comes to the rate of deduction.
PN589
VICE PRESIDENT HATCHER: So let’s just take that - if on that roster we were shown you’re taking the third week off so that you said to the employer, “Look, I want leave, I’ll be starting the leave on the Monday so I won’t be here on the Monday and I’ll be coming back to work on the following Monday.” Under Commissioner Lee’s approach, that’s a week of leave, isn’t it?
PN590
MR BAKRI: That’s right and we say that’s the correct approach.
PN591
DEPUTY PRESIDENT GOSTENCNIK: That’s not what happens here; here the deduction is four days.
PN592
MR BAKRI: Yes, we still rely on Commissioner Lee’s opinion that a week is a week and a day is a day and the main thing that we take out of Commissioner Lee’s decision is the warning that he gives about the import of the explanatory memorandum. We say that the Act is silent. There are no express words about the rate of deduction. The passages from the ex mem that the appellant relies on are simply not on point.
PN593
VICE PRESIDENT HATCHER: I understand that submission but we’re trying to follow here the consequences of adopting your submission, which is that a day is a day and a week is a week. That is, if you take a week’s leave in chronological sense then isn’t it logical that you deduct a week from the entitlement?
PN594
MR BAKRI: That would be logical.
PN595
DEPUTY PRESIDENT GOSTENCNIK: Or to put it another way, section 90 deals with what you get paid and provides that an employer must pay an employee a base rate of pay for the employee’s ordinary hours of work for that period. So if in that period - that is the third-week period - the employer pays the employee 38 hours, because they’re on leave, why isn’t the deduction 38 hours?
PN596
MR BAKRI: The point that we would make is that the NES is - the significance of the NES in this present dispute is that it provides for the minimum standards. Now, the NES does not expressly deal with the rate of deduction and the agreement doesn’t deal with the rate of deduction. It’s in those circumstances that we say the Commissi0oner’s finding as to the uncertainty as to what the rate of deduction should be, where there has been a long history of it being done in a certain way is correct. It was the interpretation that was the most attractive and was open to the Commissioner to make.
PN597
VICE PRESIDENT HATCHER: Did he interpret it or did he in effect say, “This is too hard so we’ll just keep things as they are?”
PN598
MR BAKRI: In my submission the Commissioner did interpret the agreement and expressed - I think the proper characterisation is that he expressed an opinion as to this interpretation. The Commission, as it’s not a court, can’t definitely rule on the correct interpretation of an industrial instrument or a statute. Rather, it expresses an opinion as to what the correct interpretation is as a necessary step along the way when conducting an activity that it has jurisdiction to do, such as settling a dispute. The Commissioner - - -
PN599
VICE PRESIDENT HATCHER: It’s slightly different where it’s a power of private arbitration pursuant to a dispute resolution procedure, because in that case the parties can be bound by the result by force of the terms of the dispute resolution clause as that Linfox case demonstrated.
PN600
MR BAKRI: That is right but it is still a - - -
PN601
VICE PRESIDENT HATCHER: You’re right in saying it’s not a judicial determination.
PN602
MR BAKRI: Yes.
PN603
VICE PRESIDENT HATCHER: It may be a determination with which the parties are bound at the end of the day.
PN604
MR BAKRI: I don’t cavil with that proposition. To deal with the question that was put to me directly, in my submission the Commissioner did interpret the agreement, did interpret the NES and his decision was that there are - there’s more than one interpretation as to how the agreement and the NES can be interpreted and therefore, there’s an uncertainty.
PN605
VICE PRESIDENT HATCHER: Well, that’s the starting point. That would leave us really just a statement of the problem. I mean, it’s clearly uncertain because he had two parties before him disagreeing as to what it meant but then it becomes a question of what the right answer is.
PN606
MR BAKRI: Yes, but in the circumstances where the Commissioner has come to the opinion that there is more than one argument that is open, it’s not for him to fill in the gaps in the agreement or fill in the gaps in the NES. It was right to say, “Well, the rate of deduction here is unclear. We’ve got these two competing arguments, both of which are arguable and therefore I find that there’s an uncertainty. The parties have options as to how they want to deal with that uncertainty but I don’t find that the agreement mandates either one thing or the other.”
PN607
VICE PRESIDENT HATCHER: Unless it wasn’t an interpretation of the agreement.
PN608
MR BAKRI: In my submission that is an interpretation of the agreement.
PN609
VICE PRESIDENT HATCHER: I know but the answer that the Commissioner came up with - your approach suggests it was not an interpretation of the agreement because at the end of the day interpretation involves saying, “Look, we’ve got two competing contentions, this is the correct one.”
PN610
MR BAKRI: In my submission - - -
PN611
VICE PRESIDENT HATCHER: Is that what the Commissioner did or not?
PN612
MR BAKRI: - - what the Commissioner did was interpret the agreement. He came to - he interpreted the agreement to say that it was uncertain. There was not a clear - - -
PN613
VICE PRESIDENT HATCHER: But the answer he came up with, was that an answer produced by interpreting the agreement or some other exercise?
PN614
MR BAKRI: In my submission it was an answer that he came to after interpreting the agreement.
PN615
VICE PRESIDENT HATCHER: So his conclusion that you deduct 7.6 hours per day was his conclusion as to how the agreement should correctly be interpreted?
PN616
MR BAKRI: My apologies; I misunderstood your question. The first thing he did was interpret the agreement, came to the conclusion that there was an uncertainty. The second step was deciding how to settle the dispute that was before him. That is not an interpretation of the agreement. That was an exercise of his discretion to settle the dispute. Once he had made the finding that there was an uncertainty he then needed to take the next step and decide how to settle the dispute. What he did was exercise that discretion to say on the basis of the long-standing practice that that should remain until the agreement is varied according to the various ways that that could occur.
PN617
We would contend that that second step in the process which the Commissioner undertook is not open to challenge. If he was right in finding that there was an uncertainty he then had a lot of latitude to determine how to settle the dispute. So long as the means by which he resolved the dispute is not inconsistent with either the Act or the agreement, he is able to settle the dispute in that way.
PN618
VICE PRESIDENT HATCHER: The nature of discretion is (inaudible.)
PN619
MR BAKRI: Sorry, your Honour?
PN620
VICE PRESIDENT HATCHER: Was therefore his conclusion in the nature of a discretionary decision - - -
PN621
MR BAKRI: Yes.
PN622
VICE PRESIDENT HATCHER: - - in the settlement of the dispute?
PN623
MR BAKRI: That is the contention and in the absence of a House v King-type error, that is just not open to challenge and there is no suggestion that there was such an error in the appeal that’s advanced by the RACV. The second area of challenge that’s put forward by the RACV is that the agreement - that the Commissioner erred by finding that the agreement does not regulate the rate at which personal and annual leave is deducted. Our response to that challenge is that the challenge is really misplaced.
PN624
The Commissioner found that the agreement was silent on that matter. That is a very different finding than finding that the agreement didn’t regulate the rate of deductions. He simply didn’t make the finding that he is accused of having made.
PN625
VICE PRESIDENT HATCHER: Can you say that again? I thought you were defending the proposition that the agreement was uncertain because it didn’t deal with the topic at hand? Wasn’t that the basis upon which the Commissioner found uncertainty - - -
PN626
MR BAKRI: It is.
PN627
VICE PRESIDENT HATCHER: - - in that it simply didn’t deal with the issue of deduction?
PN628
MR BAKRI: Well, there was no express words that it was silent as to the rate of deduction. That is distinct, that is very different from the proposition that the agreement doesn’t deal with an issue. They’re two different things. Whether the agreement has express words about something is one thing but whether an agreement regulates something, that thing is another question.
PN629
DEPUTY PRESIDENT GOSTENCNIK: But isn’t it inherent in his conclusion that the existing method of annual leave deduction is not inconsistent with the agreement; a conclusion that the agreement does not deal with that subject matter?
PN630
MR BAKRI: I don’t think it is. I think that they’re two different conclusions which can be made consistently. By finding that the agreement was uncertain as to the rate of deduction, it’s inherent in that finding that the agreement does deal with that issue; just that the actual rate of deduction is unclear. I think they are both findings that were open to the Commissioner to make. The third challenge that is advanced by the RACV is that the Commission fell into error as to what constitutes an employee’s ordinary hours of work. Again, it’s contended that this challenge is misplaced and based on a misinterpretation of the Commissioner’s decision.
PN631
As set out in the union’s outline at paragraphs 33 to 37, the Commissioner did not find that the employees’ hours of work were 7.6 hours per shift. To the contrary, he found that the employees’ ordinary hours of work were their actual, rostered hours of work. This is apparent from a careful reading of the various parts of the decision which I draw the tribunal’s attention to at paragraphs 33 to 37. We rely on that paragraphs. I won’t take that point any further unless I’m called on to do so.
PN632
In summary, the ASU’s contention is that permission should not be granted and that in the event that permission is granted that the appeal should be dismissed because the finding of uncertainty is the correct decision and after that finding was made it was open to the Commissioner to settle the dispute in the way that he did. In the event that the - - -
PN633
DEPUTY PRESIDENT GOSTENCNIK: Mr Bakri, sorry - do you accept the proposition that if you go back to that roster at whatever page it was in the appeal book, in that three-week period on page 278, do you accept that an employee working that shift pattern would accrue more leave when working that shift pattern than the employee would have deducted from their annual leave balance if they took the leave during that period?
PN634
MR BAKRI: Sorry, one moment - the fact that needs to be noted, Deputy President, something that is not encapsulated in this roster, is that this captures a three-week period and does not recognise that over a greater period, over many more months - - -
PN635
VICE PRESIDENT HATCHER: I accept that over a year they would accrue the equivalent of four weeks’ leave at 7.6 hours per day. But in that three-week period - - -
PN636
MR BAKRI: In that three-week period I would accept what you said.
PN637
VICE PRESIDENT HATCHER: They would accrue more leave by working than they would have deducted by taking that off.
PN638
MR BAKRI: That is correct, if we - - -
PN639
VICE PRESIDENT HATCHER: So it’s irrespective of what point in time in the year that three weeks is taken.
PN640
MR BAKRI: I would agree with that proposition.
PN641
VICE PRESIDENT HATCHER: Let’s be clear about this: so if you work say nine months, you’ve accrued three weeks of leave. You take three weeks off. So you’ve accrued three weeks of leave, equivalent to 114 hours. You take three weeks of work and you only have deducted, on your analysis, 38 plus 38 plus 32, which is what, 108?
PN642
DEPUTY PRESIDENT GOSTENCNIK: No, 7.6 times 14, which is 111-odd.
PN643
MR BAKRI: 108.
PN644
VICE PRESIDENT HATCHER: It’s a lesser amount than 114.
PN645
MR BAKRI: That’s right, I would accept that.
PN646
COMMISSIONER CRIBB: Yes.
PN647
VICE PRESIDENT HATCHER: That tends to demonstrate that that can’t be correct.
PN648
MR BAKRI: We would say it demonstrates that the agreement is uncertain as to how the deductions should occur.
PN649
VICE PRESIDENT HATCHER: Well, let me put it another way: that tends to suggest that the answer, an answer which has 7.6 deducted for every day off work actually taken, is not the right answer because it creates an anomaly between what’s accrued and what’s taken and what’s deducted.
PN650
MR BAKRI: In the circumstances where the agreement does not clearly state - does not refer to the rate of deduction, that’s not necessarily inconsistent with the agreement.
PN651
DEPUTY PRESIDENT GOSTENCNIK: But isn’t a better answer the one that the Vice President opened with after the adjournment to Mr Mueller, and that is that if you’ve got an averaging system, then really deduction should be the counterpart to payment so that it works itself out, given that employees are paid 38 hours for every week irrespective of the hours that they work on the roster - - -
PN652
MR BAKRI: Yes.
PN653
DEPUTY PRESIDENT GOSTENCNIK: - - if you deduct 38 hours for that week of leave and presently on the current practice that only happens in two of the three weeks.
PN654
MR BAKRI: Yes.
PN655
DEPUTY PRESIDENT GOSTENCNIK: And there’s a windfall.
PN656
MR BAKRI: That’s accepted. That’s accepted. If I could deal with the scenario where the permission to appeal is granted and the appeal is successful - which we say it shouldn’t be, of course - we contend that in those circumstances the appropriate course would be to refer the matter back to the Commissioner so that he could consider the appropriate mitigation measures to be applied. We say that this is necessary because his findings in relation to the appropriate mitigation measures was premised on his finding about how leave would be deducted and that thus the impacts on employees would be lessened and the reference to that is the decision at paragraph 121.
PN657
VICE PRESIDENT HATCHER: What was it, 121?
PN658
MR BAKRI: 121, yes.
PN659
DEPUTY PRESIDENT GOSTENCNIK: Sorry, Mr Bakri; what should be referred back to the Commissioner, the question of mitigation or - - -
PN660
MR BAKRI: The question of mitigation, correct. Just to put it into context, the ASU contended for a range of mitigation measures. The Commissioner granted some of those and then in relation to others, tweaked them and varied them but he said that he was doing that on the basis that the overall impact on the employees was lessened by his ruling as to the rate of deduction of both annual leave and personal leave. So if the resolution of this appeal is to be a reversal of that finding as to deduction, it’s appropriate in the circumstances for the Commissioner to have an opportunity to reconsider the mitigation measures and hear from the parties as to that issue.
PN661
DEPUTY PRESIDENT GOSTENCNIK: Sorry, just getting back to the point about the method of accrual and the deduction: isn’t the construction that the Vice President suggests about the method of deduction more consistent with the express provisions about the quantum of leave a person accrues in any one year than the one you propose, because on your analysis, the employee in fact - sorry, the taking of leave the employee in fact gets paid for more leave than is actually taken?
PN662
MR BAKRI: The key matter to be taken from the provisions in the NES is the entitlement to an amount of leave and it’s our contention that if the construction that’s advanced by the RACV was adopted it would result in a situation where employees did not get these minimum amounts of leave.
PN663
DEPUTY PRESIDENT GOSTENCNIK: I’m not talking about the construction that Mr Mueller adopted, I’m talking about the construction that the Vice President suggested at the beginning of proceedings after the adjournment; that is that simply 38 hours in any week - that leave is taken as the deduction.
PN664
MR BAKRI: We would agree with that proposition that was put.
PN665
DEPUTY PRESIDENT GOSTENCNIK: But that is different to what happens now.
PN666
MR BAKRI: That is correct, on my instructions, yes. It’s a difficult situation and it’s a situation where an agreement doesn’t refer to how the leave is to be deducted and it’s these competing contentions. The conclusion that the Commissioner came to, I say again, is the right conclusion. The agreement is uncertain as to deduction - - -
PN667
COMMISSIONER CRIBB: But you just accepted a proposition from the Vice President that is different to what Commissioner Roe found. That’s what the Deputy President is just trying to double-check with you.
PN668
MR BAKRI: Yes, the way we put it is that the proposition as put by the Vice President should be preferred to the proposition that’s being advanced by the RACV.
PN669
COMMISSIONER CRIBB: So the lesser of two evils?
PN670
MR BAKRI: In the event that that is not to be preferred over the RACV’s contention then the decision of the Commissioner ought to stand.
PN671
COMMISSIONER CRIBB: Okay.
PN672
MR BAKRI: We’re back at that situation that is - - -
PN673
COMMISSIONER CRIBB: That’s the ASU’s primary position, that Commissioner Roe was correct. If it’s found that he’s not correct, the ASU would have a preference for the proposition floated by the Vice President rather than that of the RACV, if I - is that right?
PN674
MR BAKRI: I think I’ve confused myself here. Just one moment.
PN675
COMMISSIONER CRIBB: Okay.
PN676
MR BAKRI: My apologies; I think I should have done this earlier. I’ll ask you to restate the proposition so that I can answer that properly.
PN677
VICE PRESIDENT HATCHER: Who, me?
PN678
COMMISSIONER CRIBB: Yes, you.
PN679
MR BAKRI: Sorry, Vice President.
PN680
VICE PRESIDENT HATCHER: Sorry, thought I was free to wander. So the proposition is this, that if you took three weeks off over the whole of that roster cycle we were shown, the three-week roster cycle, then the deduction - you would be paid for each week 38 hours regardless of what hours you would have worked on each week had you not taken leave. Consistently with that and consistent with the period of time you would then have deducted from your entitlement three weeks of leave, being three times 38. So you accrue at 38 hours a week, you get paid 38 hours a week when you take leave and you get deducted at 38 hours a week when you take leave.
PN681
MR BAKRI: Yes.
PN682
VICE PRESIDENT HATCHER: A simple proposition.
PN683
MR BAKRI: Yes, thank you. Just one moment. I’m sorry to ask for this; could we have a couple of minutes to consider that matter?
PN684
VICE PRESIDENT HATCHER: Yes. All right, well, I think the way we’ll deal with is we’ll grant you the adjournment for, say, 10 minutes but if you need longer say so. But we won’t take luncheon then, we’ll just keep on going until we finish the matter.
PN685
MR BAKRI: Thank you.
SHORT ADJOURNMENT [12.43 PM]
RESUMED [1.24 PM]
PN686
MR BAKRI: Thank you, Vice President. We appreciate the time to take instructions and clarify my client’s position. The union’s position is that it does not agree with that proposition of three weeks taken, three weeks deducted and to clarify it, the union maintains its initial position as expressed in the outline of contentions that Commissioner Roe’s decision is correct in that the situation is uncertain.
PN687
VICE PRESIDENT HATCHER: All right. I think we understand what your primary position is.
PN688
MR BAKRI: That is the only position, to be clear.
PN689
VICE PRESIDENT HATCHER: Why is the position which we floated before – why is that wrong?
PN690
MR BAKRI: On my instructions, the key issue with that proposition is what occurs when you have single days.
PN691
VICE PRESIDENT HATCHER: Yes.
PN692
MR BAKRI: For that reason it just doesn't work and could end up creating inequitable situations for employees who are rostered for varying periods of time.
PN693
DEPUTY PRESIDENT GOSTENCNIK: But you only get paid on the averaging system 7.6 hours for any day.
PN694
MR BAKRI: But the averaging system will not exist shortly.
PN695
DEPUTY PRESIDENT GOSTENCNIK: But won’t it continue for the Monday to Friday period, which is what we’re talking about?
PN696
MR BAKRI: No, it will not.
PN697
VICE PRESIDENT HATCHER: We’re talking about averaging for ordinary time. We’re not talking about overtime or anything like that. We’re talking about for the 38 hours and the 38-hour roster and an average payment of 38 hours per week. You're saying that’s changing, is it?
PN698
MR BAKRI: It’s going to fluctuate from week to week in accordance with the Commissioner’s decision.
PN699
VICE PRESIDENT HATCHER: You had better take us to that. Where is that?
PN700
COMMISSIONER CRIBB: This was a point that I thought we established right up‑front in a question to Mr Mueller.
PN701
VICE PRESIDENT HATCHER: You said you agreed with it, but ‑ ‑ ‑
PN702
MR BAKRI: I may have misunderstood. My understanding is at the moment the pay is paid ‑ ‑ ‑
PN703
COMMISSIONER CRIBB: The question is the base pay, no penalties, just the base pay, the straight up hourly rate, right? Is that going to continue to be averaged on the basis of 38 hours a week? My understanding from an answer from Mr Mueller is it is.
PN704
MR BAKRI: Yes.
PN705
COMMISSIONER CRIBB: But it’s the penalties, the weekend penalties ‑ ‑ ‑
PN706
MR BAKRI: Yes, yes.
PN707
COMMISSIONER CRIBB: ‑ ‑ ‑ and it’s the public holidays that are being unhitched.
PN708
MR BAKRI: Yes. My apologies. That is correct.
PN709
COMMISSIONER CRIBB: Right.
PN710
VICE PRESIDENT HATCHER: Right.
PN711
MR BAKRI: I apologise.
PN712
COMMISSIONER CRIBB: You've given me a heart attack.
PN713
VICE PRESIDENT HATCHER: What is the problem with the single days?
PN714
MR BAKRI: The issue, as I'm instructed, is that because some employees will be working shifts of shorter duration, where do you draw the line? The agreement is unclear as to how much is to be deducted.
PN715
VICE PRESIDENT HATCHER: Shorter than what?
PN716
MR BAKRI: Shorter than ‑ ‑ ‑
PN717
COMMISSIONER CRIBB: Others. So are talking about somebody, day 4 in week 2, working 7.8 hours or day 1 in week 2 versus somebody working 8.5, day 1 week 1?
PN718
MR BAKRI: That's correct. But there’s also the scenario where someone might take part of a day off. We just don’t think this formulation of weeks will resolve the issue because there’s a fundamental uncertainty in that the agreement doesn't specify the rate of deduction.
PN719
DEPUTY PRESIDENT GOSTENCNIK: What happens under the current system for part of the day off, given that the deduction is 7.6? Isn’t that what happens?
PN720
COMMISSIONER CRIBB: Yes.
PN721
MR BAKRI: I'm not instructed as to what currently exists, just the hours taken I'm told.
PN722
DEPUTY PRESIDENT GOSTENCNIK: But on a day, for example, if I took annual leave on day 1 of week 1, the deduction on your analysis 7.6 for the whole day. Yes?
PN723
MR BAKRI: Correct.
PN724
DEPUTY PRESIDENT GOSTENCNIK: And on the Vice President’s proposal it would be 7.6.
PN725
MR BAKRI: If the outcome was ‑ ‑ ‑
PN726
DEPUTY PRESIDENT GOSTENCNIK: I should tell you that my former associate was never good at maths.
PN727
MR BAKRI: I must say I think he’s better than I am, especially on my feet and on the run. If the outcome was that 7.6 hours were deducted on every occasion then that problem is resolved, but the concerns ‑ ‑ ‑
PN728
VICE PRESIDENT HATCHER: The only difference between what has been floated with you and what the Commission determined relates to that third week in the roster where I think what the Commissioner would say that if you took the whole week off, you'd get four times 7.6 deducted and what ‑ ‑ ‑
PN729
MR BAKRI: That is where the problem will arise and I'm afraid, I can’t take the matter much further. My instructions are to put that the Commissioner’s decision is correct for the reasons I’ve already gone through.
PN730
VICE PRESIDENT HATCHER: Did I understand you correctly to say before that, if we were to determine to adopt an interpretation, whether it’s this interpretation or another one, contrary to your primary submission then you want the matter remitted back to the Commissioner so that the alternative case about mitigation strategies can be considered.
PN731
MR BAKRI: That is correct. That is correct. We think that’s appropriate because his decision was premised on the basis that he wasn't allowing this change to go through.
PN732
VICE PRESIDENT HATCHER: Yes.
PN733
MR BAKRI: In the circumstances if it was to go through, it’s only fair that the Commissioner has an opportunity to hear from the parties and reconsider the appropriate mitigation measures.
PN734
VICE PRESIDENT HATCHER: All right.
PN735
DEPUTY PRESIDENT GOSTENCNIK: Just to be clear, you say the problem with the Vice President’s proposal is that it has a potentially deleterious impact on the taking of leave on part days because it just seems to me that on full days, 7.6 on your scenario and on the Vice President’s, 7.6 ‑ ‑ ‑
PN736
VICE PRESIDENT HATCHER: Mr Bakri, can I ‑ ‑ ‑
PN737
MR BAKRI: The issue arises ‑ ‑ ‑
PN738
VICE PRESIDENT HATCHER: Before you can go on, can I just say this: look, this is a complicated issue and we've put a proposition to you both on the fly, as it were, and I think we appreciate there’s some degree of analysis in the mathematics behind this, so if you want, and I'll give the same opportunity to Mr Mueller, say seven days to put in a written submissions concerning that specific proposition and explaining to us in some detail by way of analysis why it’s wrong or what the flaw is, I think we’d be inclined to give you that opportunity.
PN739
MR BAKRI: Thank you, Vice President. We would take that opportunity.
PN740
VICE PRESIDENT HATCHER: All right. What we’re looking for really is, we understand what your primary case is, but what we’re looking for is what the actual flaw in that – if there is any – proposition would be.
PN741
MR BAKRI: Yes, understood.
PN742
VICE PRESIDENT HATCHER: All right.
PN743
MR BAKRI: Yes, we would appreciate that opportunity.
PN744
VICE PRESIDENT HATCHER: We'll give you seven days to do that.
PN745
MR BAKRI: Thank you.
PN746
VICE PRESIDENT HATCHER: All right. Mr Mueller, anything in reply?
PN747
MR MUELLER: Just two short points, if I may. We do adhere to our primary submission as to the way in which this should work. We do accept - I think we are driven to accept – that if our proposition deduction, according to actual hours, was adopted then we would have to ensure that the payment system that we adopted conform to section 90 subsection (1) because it would be implicit in our proposition that ordinary hours, which is the phrase used in section 90, were the actual hours from which the employee took the leave.
PN748
DEPUTY PRESIDENT GOSTENCNIK: So does that mean that the averaging system would not apply to annual leave?
PN749
MR MUELLER: I was choosing my words carefully. Prima facie, it looks that way, but I'm not entirely certain because it may be that the averaging system does produce pay, which is in every case, every practical case that can be conceived more than what would be required by section 90.
PN750
DEPUTY PRESIDENT GOSTENCNIK: But that’s assuming leave is taken in blocks of weeks. If leave is taken in blocks of days ‑ ‑ ‑
PN751
MR MUELLER: It is, yes.
PN752
DEPUTY PRESIDENT GOSTENCNIK: ‑ ‑ ‑ then on every occasion the amount of leave that would be taken would be greater than 7.6.
PN753
MR MUELLER: Yes. But remembering that pay is paid fortnightly. It raises some questions. I appreciate there’s a difficulty with ‑ ‑ ‑
PN754
VICE PRESIDENT HATCHER: Yes. I mean if a person took annual leave within – leaving aside any question of leave loading – any fortnight pay period then the effect should be that they would receive their ordinary pay at the end of the fortnight, whether they worked, whether they were on leave.
PN755
MR MUELLER: Yes.
PN756
VICE PRESIDENT HATCHER: Whether they took one day off, one week off or two weeks or none at all. Is that not right?
PN757
MR MUELLER: That's right.
PN758
VICE PRESIDENT HATCHER: And then under the enterprise agreement why would the - what’s described as the average weekly pay, being the prescribed rate of pay for ordinary hours in any week, regardless of the fact that the actual hours worked differ from one week to the next?
PN759
MR MUELLER: It would be. It would be.
PN760
VICE PRESIDENT HATCHER: And, therefore, that would be compliant with section 90, subsection (1).
PN761
MR MUELLER: Yes, but this is a point against myself, I think. My point is that an employee might take leave from a number of shifts that are longer than 7.6 and in that case the pay should be, on our theory or on our proposition, the expression “ordinary hours of work” means actual hours, that means that the amount paid should be more than what would be an average of 7.6 hours per week.
PN762
DEPUTY PRESIDENT GOSTENCNIK: So if an employee takes two weeks’ leave, and let’s assume the fortnight is week 1 and two in the roster at page 278 of the appeal book, the amount of hours on that roster are 81.1 hours, so the employee would – if they work, they would be paid 76 hours, where if they took leave they would be paid 81.1 hours on that proposal.
PN763
MR MUELLER: Yes, yes. That would seem to be what is required of us because we are ‑ ‑ ‑
PN764
DEPUTY PRESIDENT GOSTENCNIK: Yes.
PN765
VICE PRESIDENT HATCHER: That's messy, isn't it?
PN766
MR MUELLER: It is, but it may be the consequence. We might just have to conform our position to it. Remembering, of course, we’re not in this area yet. We haven't adopted this system. The system that applies is the deduction at 7.6.
PN767
VICE PRESIDENT HATCHER: Yes.
PN768
DEPUTY PRESIDENT GOSTENCNIK: If you were to adopt the Vice President’s system then all that would be required in the adjustment would be to ensure that in a four-day week ‑ ‑ ‑
PN769
MR MUELLER: Yes, yes.
PN770
DEPUTY PRESIDENT GOSTENCNIK: ‑ ‑ ‑ five days of leave are deducted because the payment wouldn't change.
PN771
MR MUELLER: That's what we’re thinking, but we do appreciate the seven days to think about it because it certainly bears thinking about and we may be able to assist in doing that. So that was point 1. Point 2 is simply an answer to the proposition about the manner in which this matter was decided. I simply wish to draw attention – I won’t take the Commission directly to each paragraph I mentioned, but the way Commissioner Roe reasoned, his path of reasoning, was that he concluded that the NES was silent on the subject of deduction for the purposes of annual leave and personal carer’s leave. That is at paragraph 92 and you'll see that the same proposition appears at paragraph 69 as well.
PN772
He also concluded at paragraph 98 – and again this is restated in paragraphs 104 and 110 that, likewise, the agreement was silent on the subject and on that basis, the Commissioner framed the question for himself as whether or not the conclusion that he would arrive at was inconsistent with either the agreement or the NES. In other words, he thought he had a canvas available to him which was not governed by a construction of either the Act or the terms of the agreement and that what he had to do was arrive at a conclusion that was not inconsistent with either, but he reasoned that neither produced an outcome; a conclusion as to what method of deduction should be arrived at.
PN773
On one view he arrived at a conclusion about what ordinary hours under the terms of the shift work agreement provisions were; on another view he didn't, but in a sense that doesn't matter. He then in paragraphs 116 to 120 essentially arrived at a conclusion as to what he thought was an overall fair and equitable resolution and that’s seen most prominently in paragraph 120 where the Commissioner says:
PN774
I am satisfied that the most equitable resolution to the dispute about this matter is to determine that the status quo as to the deduction from paid annual and personal leave entitlements when employees on the 21 roster take annual leave or personal leave be maintained until and unless the agreement is replaced or varied.
PN775
By which he meant the 7.6, the uniform 7.6. Our contention, just to make it clear, and I think it is clear in our written submissions and what we’ve said this morning here, is that the Commissioner was wrong in reaching the conclusion that it was neither regulated by the NES provisions and/or the agreement provisions and that was the error. We say the contention we’re putting forward is one which is required by a proper construction of both and we accept that it’s arguable, subject to what we think of, that the proposition that was formed from the Bench is of the same type – of the same kind and that’s why the Full Bench should simply go ahead and decide it according to the contentions.
PN776
VICE PRESIDENT HATCHER: Do you accept Mr Bakri’s proposition that if we were to adopt an interpretation that was different from the Commissioner’s that it should then be remitted back so that the ASU can run its case on mitigation issues?
PN777
MR MUELLER: What I’d say about that is it’s probably not necessary, but if the Full Bench is inclined to do that then we haven't got a ferocious stance against it. It just seems to us plain that if a decision that was handed down by this Full Bench cast a different light on that, it would be obvious that either party could reopen that matter.
PN778
VICE PRESIDENT HATCHER: There was another question I meant to ask Mr Bakri, but I'll ask you as well and let Mr Bakri answer. There’s reference to the existing practice having gone on for 20 years. Were there previous enterprise agreements or equivalent with the same annual leave and rostering provisions or have they changed over time?
PN779
MR MUELLER: I would need to remind myself. Mr Bakri may be in a better position to say that.
PN780
VICE PRESIDENT HATCHER: Are you able to answer that, Mr Bakri?
PN781
MR BAKRI: My instructions are that the applicable clauses in the predecessor agreements have been the same for about 20 years.
PN782
VICE PRESIDENT HATCHER: The same? Including the averaging?
PN783
MR BAKRI: Yes. In relation to averaging, the practice has been the same for about 20 years, but we would have to go back and look at the clauses to take that ‑ ‑ ‑
PN784
VICE PRESIDENT HATCHER: I might add that as a second topic that you can address in your further written submissions.
PN785
MR BAKRI: Yes.
PN786
VICE PRESIDENT HATCHER: All right? If there’s nothing else, we direct the parties to file written submissions on those two topics within seven days and once we receive those submissions, we'll reserve our decision and we thank the legal representatives for their useful situations.
PN787
DEPUTY PRESIDENT GOSTENCNIK: I'll point out seven days is seven calendar days, not 38 hours.
PN788
VICE PRESIDENT HATCHER: We'll now adjourn.
ADJOURNED INDEFINITELY [1.43 PM]
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