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Fair Work Commission Transcripts |
TRANSCRIPT OF PROCEEDINGS
SENIOR DEPUTY
PRESIDENT WATSON
SENIOR DEPUTY PRESIDENT O'CALLAGHAN
COMMISSIONER CRIBB
AM2014/92
s.156 - 4 yearly review of modern awards
Four yearly review of
modern awards
(AM2014/92)
Timber Industry Award 2010
Melbourne
10.10 AM, MONDAY, 13 APRIL 2015
Continued from 16/03/15
PN963
SENIOR DEPUTY PRESIDENT WATSON: Yes, Mr Harding, what have you got for us this morning?
PN964
MR HARDING: Your Honour, we have a few witnesses that we propose to call. Perhaps if I start, though, your Honour, with some housekeeping matters.
PN965
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN966
MR HARDING: I hope you're aware that last Thursday, I think, or Wednesday, we filed a variation to our proposal in the form of a draft variation to the Timber Industry Award and I want to take ‑ ‑ ‑
PN967
SENIOR DEPUTY PRESIDENT WATSON: This is in relation to two elements of the claim?
PN968
MR HARDING: Yes, in relation to two elements. I just wanted to take some time to explain that.
PN969
SENIOR DEPUTY PRESIDENT WATSON: Certainly.
PN970
MR HARDING: In relation to the modern award as it’s currently framed. It also deals with some issues that arose when we last met. Just if I take you to it, your Honour.
PN971
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN972
MR HARDING: What we propose is the deletion of the current clause 25.5 in its entirety and its replacement with what is in the document we served and filed and this has a number of aspects to it, the first of which is that we’ve dealt with the issue of cash, payment by cash or cheque, in (a) and that has two elements to it, which is where payment is not made on the day on the usual pay day, and I'll say something about that in a minute, and secondly, a circumstance in which payment is not made on that day, but then paid later than that day, each of which are subject to two forms of overtime rate up to a particular maximum in each case.
PN973
The words “usual pay day” are of some significance, your Honour, because the previous proposal you may recall fixed a date in the award, or proposed a fixed date by which employees would be paid.
PN974
SENIOR DEPUTY PRESIDENT WATSON: That was a 25(7).
PN975
MR HARDING: Yes; and no later than Friday, I think, in the week. We've abandoned that approach and done so on the basis that we don’t think it necessary to prescribe a pay date for the whole industry. There may be a range of arrangements in this industry which is populated by a number of large and small employers. It would be, we think, probably a step too far to prescribe as a particular date in the award and we don’t think it necessary at this stage. It would be sufficient, we contend, that the rate hinge on what is the usual pay day for an employee because, of course, there usually is one.
PN976
We say it also harmonises the clause more closely to the existing subclauses in clause 25 and I have in mind in that respect clause 25.1, which says that:
PN977
Wages must be paid weekly or fortnightly in the manner there set out or by agreement by another date.
PN978
Then clause 25.2 deals with how they are to be paid. This clause then piggybacks on that to say there is implied in those three clauses that I’ve mentioned a usual day on which employees are paid and we think it’s sufficient for the purposes of what we’re seeking to do to hinge that on a usual day because the assumption of the clause is, of course, that employees are usually paid and usually paid on time.
PN979
In (b) of the proposal we've dealt separately with the question of electronic funds transfer. This recognises that there is a difference arising from the manner of payment, whether cash or cheque on the one hand, and EFT on the other. That's because, in essence, payment by cash or cheque is personal. You're at work. You're handed your cash, you're handed your cheque. EFT is non-personal. There’s a third party intermediary that helps you get your cash, get your money.
PN980
In order to ensure there is fairness, we have dealt with that separately and the overtime rate would only be payable if the employee is not paid on the usual day by the end of that day, as opposed to the end of the time when an employee ceases work, which is the case in (a), otherwise the configuration of the rate is the same. There is one difference in relation to EFT payments that obtains if payment is not made on the usual pay day and that is the use of the term “ordinary working hours”, the employer would only be liable for overtime rates for the number of ordinary working hours the employee is kept waiting for wages up to the maximum of 38 hours.
PN981
(c) then deals with the exception and it’s a safeguard really for the protection of employers to ensure that they're not subject to an overtime rate when late payments by EFT is not their fault. This picks up on a discussion I think that occurred at the end of the last day we met where I think your Honour Senior Deputy President Watson raised the scenario of, “What happens if it’s the bank’s fault?” What we've done is to try and deal with that in the way we have in (i) of (c).
PN982
SENIOR DEPUTY PRESIDENT WATSON: You would do that to the extent of the penalty payment, but that’s subject to an obligation on the employer to ‑ ‑ ‑
PN983
MR HARDING: To pay by cash.
PN984
SENIOR DEPUTY PRESIDENT WATSON: To pay, yes, in cash.
PN985
MR HARDING: If they know that the money hasn't arrived in the bank account. If they don't know then (ii) doesn't apply, but if they know then we don’t want to be in a position where an employer can take advantage of the bank’s mistake, not to suggest that that would be something that would occur regularly, but it’s intended to avoid that scenario. If an employer learns that the money is not available in the employee’s bank account then the obligation is to pay by cash by 11 am once they're made aware of that. If they do that then there’s no overtime rate that would apply if payment is made by EFT or electronic funds transfer.
PN986
The final point I want to make about this clause as proposed is the concept of being kept waiting and what we've tried to do is to build on the concept that is already in the modern award and say, “Well, that’s an appropriate concept to illustrate what is the mischief that is being sought to be cured by this clause.” What is different is that we don’t assume that the employee would be kept waiting at work.
PN987
In our submission, the prejudice that the evidence suggests occurs, occurs regardless of whether the employee is kept waiting at work or somewhere else and it would be in this day and age an anachronistic to limit it to an employee who has to hang about at work to be paid because the employer hasn't paid him in cash. It’s also especially inapplicable in circumstances where EFT payments are made. So we are holding on to the concept of being kept waiting, but the concept is linked to the notion of being kept waiting to be paid wherever you are, rather, and you don’t have to be at work to be kept waiting.
PN988
At this stage that’s all I want to say about the proposal, unless there’s any questions and I'll deal more fully with it in submissions when we get there. The next aspect, your Honours and Commissioner, that’s contained in the draft order, the draft variation, is the conversation that occurred last time we met about the proposal for ordinary hours at it emerged from the exposure draft of the modern award and there was a question raised by the employers about the addition of a (c) to what would be clause 12.2 of the exposure draft, clause 27 I think of the existing award, in that it was suggested that the clause as proposed may in fact qualify an employer’s right to configure ordinary hours within the spread of hours identified in (a) or by agreement in (b).
PN989
We made it clear that that wasn't the intention and what we've sought to do is to give effect to what we said about that by proposing a form of words that makes it clear that the clause is linked to the overtime clause and, in particular, the aspect of the overtime clause which prescribes overtime for ordinary daily hours of work time, time in excess thereof; otherwise the clause is unchanged.
PN990
We have put the words “unless otherwise agreed” at the back of a sentence rather than at the front of the paragraph to make clear that this is a default clause. There could be an agreement. We accept that there might be an agreement, but in the absence thereof, the default clause would apply and prescribe a certain method for determining what the ordinary daily number of hours is for the purposes of clause 30.1 of the overtime clause, which is the overtime clause in the modern award as it’s currently framed.
PN991
So that’s the draft variation that we propose in relation to those two other matters and, of course, there are other proposals that we made last time we met and we maintain the submissions we made about those. There’s no need for us to go further in relation to those things today. The rest of today we imagine would be consumed by some evidence in support of our proposal for clause 25.5 and followed by some submissions in support thereof on the question of both merit and power.
PN992
We have been asked to make available a number of witnesses of those from whom statements have been provided to the Commission. Those witnesses are Mr McLean, Mr Coates, Mr Patti and, of course, Ms Calvert, whom you heard from last time, and I'll say some more about that in a minute.
PN993
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN994
MR HARDING: There’s a further witness, a Joe Sayat(?)10.24.15 for whom we've provided a statement. We don’t propose to rely on Mr Sayat’s evidence and we withdraw the statement. He’s not available accordingly today. In relation to Ms Calvert, at the close of business last time we met, we received an email from the Bench asking some questions and requesting some information be provided concerning the survey that was annexed to Ms Calvert’s evidence. We have provided two tables that we say address the issues that were raised by the Full Bench and what we would seek to do is to recall Ms Calvert to just explain those tables and also to touch on another piece of evidence that was given concerning an example of guns and that would complete her evidence.
PN995
SENIOR DEPUTY PRESIDENT WATSON: Yes, very well. Is there any issue with that?
PN996
MR IZZO: Your Honour, I believe the employers have an objection insofar as Ms Calvert is to be recalled. If it is to address a specific question that was sent by the Commission to explain the documents that we understand are now to be furnished, that’s one thing, but in relation to any matters that were the subject of cross‑examination, such as the matters pertaining to guns, we think it would be highly unusual in any court or tribunal for a witness to be subject to cross‑examination, for re‑examination to be declined as it was on the last occasion, for a month to then pass during which opportunity occurs for the witness to speak with her representatives and then for the party to then decide it wishes to re‑examine a month after re‑examination was first declined.
PN997
We consider there’s fundamental natural justice principles that would militate against allowing any further questioning beyond the scope of which arises from the direct questions asked by the Bench in its email.
PN998
SENIOR DEPUTY PRESIDENT WATSON: What are those principles, presuming you're given an opportunity to effectively cross‑examine in relation to that?
PN999
MR IZZO: The concern, your Honour, is that when a witness ordinarily gives evidence, there’s the evidence‑in‑chief, there’s cross‑examination and re‑examination. Whilst the witness is under cross‑examination and whilst the witness is under oath, the legal representatives for the party are not permitted to speak to the witness about the subject matter of their evidence as that may affect the evidence given under oath.
PN1000
It’s a standard process that applies in any litigious proceeding and that ordinarily would have occurred on the last occasion, for instance, if there’d been a break between cross‑examination and re‑examination or anything of that matter. What we've had on the last occasion is re‑examination was declined. Although there was an opportunity for it, the union chose not to avail itself of that and they now have an opportunity to effectively speak to the witness about the cross‑examination before they're conducting what is, in effect, a re‑examination.
PN1001
That is not ordinarily how a process would be adopted and the prejudice and the prejudice that we suffer is that effectively the party has an opportunity to try and rectify its case or rectify issues that it’s concerned about that arose in cross in a manner that’s not accepted as a legitimate means of adducing evidence in tribunals such as this. So we do think we’d be prejudiced and it would be highly unusual and I don't think there’s any way that that prejudice could be rectified. If we had a further opportunity to cross‑examine ‑ ‑ ‑
PN1002
MR HARDING: We won’t press it.
PN1003
MR IZZO: I understand it’s not being pressed, your Honour.
PN1004
MR HARDING: We don’t need to press it. We'll just call on the surveys and tables.
PN1005
SENIOR DEPUTY PRESIDENT WATSON: Very well.
PN1006
MR IZZO: I think the objection is then withdrawn, your Honour.
PN1007
SENIOR DEPUTY PRESIDENT WATSON: Very well. So you'll call Ms Calvert in relation to the additional material. Yes, okay. Before we go to Ms Calvert, can I just clarify one thing, Mr Harding? You said Mr Sayat was not being relied on. What’s the position in respect to Mr Lawson, Ms Finnigan, Mr Cotroneo and Mr Law or Ms Law?
PN1008
MR HARDING: Yes; and Ms Finnigan.
PN1009
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1010
MR HARDING: Those witnesses have been required for cross‑examination. I propose at the end of the evidence to tender those statements ‑ ‑ ‑
PN1011
SENIOR DEPUTY PRESIDENT WATSON: Yes, very well.
PN1012
MR HARDING: ‑ ‑ ‑ as they are.
PN1013
SENIOR DEPUTY PRESIDENT WATSON: Okay.
PN1014
MR HARDING: I can indicate that now; that’s what we propose. If you'd like to deal with it now, your Honour, I'm content to.
PN1015
SENIOR DEPUTY PRESIDENT WATSON: Yes. Perhaps we can do that.
PN1016
MR HARDING: We have a list of those witnesses, if it assist.
SENIOR DEPUTY PRESIDENT WATSON: Yes, if we get the list that might allow us conveniently - we'll mark Mr Lawson’s statement exhibit CFMEU2, Mr Cotroneo, CFMEU3, Mr or Ms Law, I'm not sure which, CFMEU4 and Ms Finnigan, CFMEU5.
EXHIBIT #CFMEU2 MR LAWSON'S STATEMENT
EXHIBIT #CFMEU3 MR COTRONEO'S STATEMENT
EXHIBIT #CFMEU4 MR LAW'S STATEMENT
EXHIBIT #CFMEU5 MS FINNIGAN'S STATEMENT
PN1018
SENIOR DEPUTY PRESIDENT WATSON: Very well. Now we'll go to you, Mr Calvert.
MR CALVER: Thank you, your Honour.
<JANE ROSAMUND CALVERT, SWORN [10.30 AM]
PN1020
MR CALVER: Your Honour, I know the witness has just been sworn, your Honour, but the documents were received electronically after close of business on Friday. I haven't had the opportunity since that time to print them out. I wonder if we could be supplied with a hard copy of the documents? I know one has been handed to my friend, Mr Izzo. Thank you very much.
SENIOR DEPUTY PRESIDENT WATSON: You can proceed, Mr Harding.
RE-EXAMINATION BY MR HARDING [10.31 AM]
PN1022
MR HARDING: Thank you, your Honour. Ms Calvert, can I take you to the first of the tables which has got – it hasn't got a heading, but it’s got a pink top and a green top?‑‑‑Yes.
PN1023
Do you see that?‑‑‑Yes.
PN1024
The Full Bench requested that the survey be organised using a sort command by employer and workplace?‑‑‑Yes.
PN1025
Can I ask you, if you look at the survey ‑ ‑ ‑?‑‑‑Yes.
*** JANE ROSAMUND CALVERT RXN MR HARDING
PN1026
‑ ‑ ‑ firstly, the column “employer” what does that show?‑‑‑So that column lists all the employers grouped together as employers, but separated, clearly separated by sites, so employers with multi sites, but that groups them together as employers, but distinguishes each site from one to the other.
PN1027
So then looking at AKD Colac in the first box and then comparing that with AKD Forestry, is that what you mean by separation?‑‑‑Separate sites. So separate site, Colac, Illawarra, and Forestry is a separate site, likewise with the others. So Boral you can see several, Big River, two, Carter Holt Harvey, several others one only site.
PN1028
If you could just track back to the second column “join date CFMEU” ‑ ‑ ‑ ?‑‑‑Yes.
PN1029
‑ ‑ ‑ can you just tell the Full Bench what that shows?‑‑‑So that’s the date on our records where the worker in question joined the union, not necessarily of course the date they started work with that employer, but the date they joined the union.
PN1030
So in those circumstances they could have been working for the employer for some time, for instance, before they joined the CFMEU?‑‑‑Correct, unfortunately.
PN1031
I'm sure that every union official has that view. Just to give an illustration, if you can turn four pages in please ‑ ‑ ‑
PN1032
SENIOR DEPUTY PRESIDENT WATSON: That's “CCH pine panels” is the first reading?
PN1033
MR HARDING: No, mine has got ”CCH Mount Gambier Saw Mill”. It’s the next one over, I think.
PN1034
SENIOR DEPUTY PRESIDENT WATSON: That's the third, I think.
PN1035
MR HARDING: Yes. Can you see that, your Honour?
PN1036
SENIOR DEPUTY PRESIDENT WATSON: Yes, but as long as we all know what we’re talking about. That's the page commencing “Mount Gambier jubilee”.
*** JANE ROSAMUND CALVERT RXN MR HARDING
PN1037
MR HARDING: I should have put some page numbers on it. If you could then track down to employee number 158. Do you see that ‑ ‑ ‑?‑‑‑Yes.
PN1038
‑ ‑ ‑ in the left‑hand column?‑‑‑Yes.
PN1039
It says there, there’s a join date of 10 September 2010?‑‑‑Yes.
PN1040
Then go across a number of columns and that worker has said that he or she has been paid once or twice and that was all before 2010?‑‑‑Yes. I think that’s the next one down, isn't it?
PN1041
It could be. I’d better line it up myself.
PN1042
SENIOR DEPUTY PRESIDENT WATSON: Sorry, 158? How far down the page?‑‑‑About two-thirds of the way down.
PN1043
Two-thirds of the way?
PN1044
MR HARDING: Yes?‑‑‑Or three-quarters, in fact.
PN1045
About three-quarters of the way down.
PN1046
SENIOR DEPUTY PRESIDENT WATSON: Three-quarters of the ‑ ‑ ‑
PN1047
MR HARDING: And Ms Calvert is correct. In fact, I had misaligned it. It’s worker number 161 with a join date of 12 November 96?‑‑‑Look, I had – yes, I see that. Yes.
PN1048
My question was going to be, “How does that line up”?‑‑‑Yes.
PN1049
And it doesn't actually line up with the employee because I got the column wrong?‑‑‑Yes, but there are a few in there that do have a join date post – with the union, post the date they say they were paid late.
PN1050
Is that ‑ ‑ ‑?‑‑‑Simply explained by the fact that they’ve clearly worked there before – for some time before they’ve joined the union, so worked there and been getting paid, albeit late on one or two occasions.
*** JANE ROSAMUND CALVERT RXN MR HARDING
PN1051
Yes, thank you. That's all the questions I have in relation to that table, your Honour. We have A3 copies of these tables if it would assist. Yes.
PN1052
SENIOR DEPUTY PRESIDENT WATSON: Yes. That would assist. My thinking capacity early this morning was exposed.
PN1053
MR HARDING: Even with these glasses, I'm finding it tough to read the A3.
PN1054
SENIOR DEPUTY PRESIDENT WATSON: My colleague’s eyesight is much better than mine.
PN1055
MR HARDING: Ms Calvert, can I take you to the second table?‑‑‑Yes.
PN1056
Which showed a question – there was a question, I think, from Deputy President O’Callaghan about which employers the union had agreements with which might have a late payment clause in them. Is this the table that answers that question?‑‑‑That's right. And provides the form of the clause where it exists, so it should be clear and it gives a reference, but I'm happy to provide a breakdown if that’s easier for the Bench.
PN1057
That's probably not necessary. I think it does speak for itself in relation to that, but I did want to ask you a question about the nature of comparing some employers here. So you've got AKD Colac as the first entry, for which you have an agreement, but it doesn't have a late payment clause and neither did it have in the previous agreement. Can you see that from the information ‑ ‑ ‑?‑‑‑Yes.
PN1058
‑ ‑ ‑ set out there?‑‑‑Yes.
PN1059
But then you have an agreement with such a clause at Carter Holt Harvey?‑‑‑Yes.
PN1060
Are these work sites, the Oberon Structaflor?‑‑‑Yes.
PN1061
And then the Tumut pine panels?‑‑‑Yes.
PN1062
Is that right?‑‑‑Work sites, yes.
*** JANE ROSAMUND CALVERT RXN MR HARDING
PN1063
So you would have an agreement by work site for each of these employers?‑‑‑Correct. For each of the sites.
PN1064
Then if you go over the page ‑ ‑ ‑?‑‑‑Yes.
PN1065
‑ ‑ ‑ we have a number of other examples of Carter Colt Harvey sites having an agreement. On the third page we see an employer Koppers Wood Products at Grafton?‑‑‑Yes.
PN1066
Then down the page we see Timberlink Bell Bay and Timberlink North?‑‑‑Yes.
PN1067
Is there any difference, Ms Calvert, in terms of employer scale and size between those for whom you have agreements with the clause and those you don’t?‑‑‑Yes, a big difference. So Carter Holt Harvey is one of our biggest employers and you'll see - you'll note that we've managed to achieve the clause in the same form. So what we – how we approached the bargaining there was to take a number of significant nationally applicable areas that we wanted to bargain about, this was one of them, and sought the same clause. So there’s no – there should be no difference site to site in our view between what applies at Tumut or Oberon in relation to late payments. So we approached the company and after some negotiation achieved the same form of clause. That's the same with Timberlink; not the same clause, but it’s a bigger employer, multi site. We’re more able to bargain for a range of things, including the late payment, penalty payment. Yes, Koppers isn't the size of Carter Holt Harvey, but nevertheless we've managed to negotiate; whereas Seffi, for example, or some of the other employers named there, Sweetmans, smaller employers, less able to get that agreement – that clause in the agreements and then, of course, there’s a range where we can’t even have agreements.
PN1068
In relation to, say, Carter Holt Harvey, for which you have a clause in the agreement, has there been any change to how it arranges its pay as a result of the clause?‑‑‑Yes. They have now done a couple of things. They’ve settled at each site exactly when the usual pay day is and so when – because that was a bit unclear at some of the sites, so that’s prompted them to settle and determine at each site, “This is the pay day,” and then when there’s a public holiday, there’s consultation with workers through their ECC about bringing the pay day forward, irrespective of the fact you won’t actually have signed off on all the overtime for that week by that point, but they’ll bring it forward knowing that, “Here substantially is your pay. It’s a day earlier because it’s a public holiday and any adjustments to overtime we'll make in the following week.” So there has been a more consistent and more transparent approach.
*** JANE ROSAMUND CALVERT RXN MR HARDING
PN1069
SENIOR DEPUTY PRESIDENT WATSON: That would on the material seem to address the major issue I had specifically identified by employees who are paid late at Carter Holt Harvey?‑‑‑Christmas, yes.
PN1070
A significant number specifically mentioned public holidays and others who might have been affected by that?‑‑‑Yes. So that doesn't necessarily guarantee that there won’t be a muck up every now and then, but they’ve at least introduced that as a practice to try and get over this public holiday issue of not being paid.
PN1071
The Koppers’ agreement, you've got a specific provision in the enterprise agreement now about public holidays?‑‑‑Yes.
PN1072
Yes, thank you?‑‑‑So the other – I'm sorry.
PN1073
MR HARDING: Yes, keep going?‑‑‑Well, the other thing to note here is some of these clauses were in previous agreements and that – you can see that with the note down in the far right column, clause text. My staff have put a note down the bottom to where it refers – where there has been a similar clause in previous agreements, Timberlink, for example; Koppers, for example.
PN1074
Is there anything significant about Timberlink that you wanted to ‑ ‑ ‑
PN1075
MR IZZO: Your Honours, if I can just interject at this point. We've been more than comfortable to allow examination regarding the questions that the Commission has asked and I think that has now been addressed in the evidence. Now asking specific questions about particular employers I think goes beyond the realm of responding to the questions about which employers are covered by EBAs and having the employers ordered in number. I think we are now asking about the circumstances of particular institutions or particular workplaces. That could have been dealt with in evidence‑in‑chief. It could have been dealt with in re‑examination. I'm not sure why it ‑ ‑ ‑
PN1076
SENIOR DEPUTY PRESIDENT WATSON: That will be depend on what the question is and we might await the question because there clearly is an issue about previous agreements in relation to those enterprises. I don't know as yet what the question from Mr Harding is.
PN1077
MR IZZO: My understanding was that the question was now going to ask about specific circumstances of Timberlink.
*** JANE ROSAMUND CALVERT RXN MR HARDING
PN1078
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1079
MR IZZO: Perhaps my friend can clarify it.
PN1080
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1081
MR HARDING: I was simply asking if there’s anything specific about Timberlink as an employer, but I don’t press the question.
PN1082
SENIOR DEPUTY PRESIDENT WATSON: Yes. Very good.
PN1083
MR HARDING: Yes, thank you. I have no further questions. Perhaps if I tender these two tables, please?
SENIOR DEPUTY PRESIDENT WATSON: Yes. We'll mark the reordered spreadsheet concerning the survey, reordered by employer, CFMEU6 and the spreadsheet containing information about agreement CFMEU7.
EXHIBIT #CFMEU6 REORDERED SPREADSHEET RE THE SURVEY, REORDERED BY EMPLOYER
EXHIBIT #CFMEU7 SPREADSHEET CONTAINING INFORMATION ABOUT AGREEMENT
PN1085
SENIOR DEPUTY PRESIDENT WATSON: Ms Calvert, can I ask you a question about the survey generally, CFMEU6? When one goes through that, it appears, with some exceptions, where there is a reported problem in relation to particular companies, generally a minority of employees who report a problem, the other employees don’t. Do you have any understanding why that is so? One can only speculate as to why. It could have something to do with the financial institution utilised by those employers. You can’t tell from the survey why ‑ ‑ ‑?‑‑‑It’s often the case.
*** JANE ROSAMUND CALVERT RXN MR HARDING
PN1086
‑ ‑ ‑ some employees are affected and the majority aren’t?‑‑‑Yes. It’s often the case that the pay will be – there’ll be errors in the pay or pay will be missed for individual employees. I think our application goes to this, as I recall, but it’s not necessarily that there’ll be either everyone paid or everyone not paid. It’s often the case that there’ll be workers whose pay they individually get mucked up, not necessarily to do with the institution. So workers understand that if they're in, you know, (indistinct) Credit Union and not one of the big banks or the bank that the employer – then they may be a day late. They accept that and they’ve come to an arrangement there where they’ll work their payments out that way. Mind you, a lot of the employers, large employers now, realise that getting it on the usual pay day means trying to get it in EFT, you know, a bit earlier so that those – all those institutions are covered off, but by and large, I’d – and again, I don't have that evidence in front of me, but from what I know there’ll often be in a big place like Carter Holt Harvey, people whose pays are mucked up, and nothing to do with their institution, the payroll ‑ ‑ ‑
PN1087
That raises another question. There are five or six respondents who indicate there’s not an issue about being paid at all. It’s simply a wrong overtime payment in most cases or a miscalculation of the payment. Is it reasonable to presume for some of the other respondents it’s not a matter of not having been paid at all, but not having been paid correctly?‑‑‑We tried to get the survey – the call centre – the ACT call centre to be specific about that, as I recall. I don't have the form of the questions in front of me now, but we were trying to make sure that they drilled down to exclude those who were – it was just, “I didn't get paid enough overtime,” or, “I should be paid more generally,” to actually being paid or not paid.
PN1088
Yes?‑‑‑So, hopefully, there’s not a muddying of the waters with respect to that and recognising, of course, these are all – the samples you have in front of you is a slice. A lot more members were rung during the time that the call centre did the exercise, they couldn't get through to them or – so this is the slice where: (a) we have the contacts; (b) we got through to them and got the response.
PN1089
The final question, is it fair to say from the survey that the employees responded are predominantly employees of AKD, Carter Holt, Boral and now Timberlink?‑‑‑Well, the numbers reflect the response and the different responses at each place reflect the different scale of those employers. So, for example, 42 workers responded at AKD, whereas 249 from Carter Holt Harvey, that kind of reflects the big employer, medium employer, and then, for example, one at Blue Ridge Hardwood, which reflects a smaller. So it is fairly accurately reflective of the scale of the employer.
PN1090
But it seems to be concentrated on four employers that responded?‑‑‑Because a lot of the members – remembering, we’re only able to serve our members – are concentrated in those and so where you've got – but we did try and target – include in the survey smaller employers and their – so there’s a representative sampling of them as well.
PN1091
They generally have very limited numbers of respondents?‑‑‑Very limited numbers of people working there.
PN1092
Yes. Which perhaps reflects limited membership amongst those?‑‑‑Limited membership, limited workers.
*** JANE ROSAMUND CALVERT RXN MR HARDING
PN1093
Yes?‑‑‑So that’s why we ended up with one employee surveyed at some of those places as opposed to the larger numbers.
PN1094
Very well. Thank you for that. Mr Izzo?
MR IZZO: I just have a very brief question.
FURTHER CROSS-EXAMINATION BY MR IZZO [10.50 AM]
PN1096
MR IZZO: Ms Calvert, in the survey there’s reference to Timberlink Bell Bay?‑‑‑Sorry, which survey? The six or seven?
PN1097
Sorry, the CFMEU6, the one which has got the blue and peach ‑ ‑ ‑?‑‑‑Yes.
PN1098
‑ ‑ ‑ rows on the top?‑‑‑Sorry. Then which one were you referring to?
PN1099
If you just go to the second‑last page of that document, please?‑‑‑Yes.
PN1100
There’s a reference to Timberlink Bell Bay?‑‑‑Yes.
PN1101
And then overleaf there’s a large number of references to Timberlink Tarpeena?‑‑‑Yes.
PN1102
Am I correct in assuming that those two workplaces were formerly known as Gunns?‑‑‑Correct.
PN1103
Thank you.
PN1104
SENIOR DEPUTY PRESIDENT WATSON: Very well. Nothing further?
PN1105
MR HARDING: Nothing.
PN1106
SENIOR DEPUTY PRESIDENT WATSON: It doesn't leave you with much work, Mr Harding.
*** JANE ROSAMUND CALVERT FXXN MR IZZO
PN1107
MR HARDING: No, your Honour.
PN1108
SENIOR DEPUTY PRESIDENT WATSON: Very well. Thank you for your evidence, Ms Calvert?‑‑‑Thank you.
You're excused.
<THE WITNESS WITHDREW [10.51 AM]
PN1110
MR HARDING: Thank you. Our next witness is Mr Scott McLean.
SENIOR DEPUTY PRESIDENT WATSON: Very well.
<SCOTT ANDREW MCLEAN, AFFIRMED [10.52 AM]
SENIOR DEPUTY PRESIDENT WATSON: Yes, Mr Harding?
EXAMINATION-IN-CHIEF BY MR HARDING [10.53 AM]
PN1113
MR HARDING: Thank you, Mr McLean. Mr McLean, is your name Scott McLean?‑‑‑It certainly is.
PN1114
And you're the district secretary for the CFMEU FFPD division?‑‑‑I am. Correct.
PN1115
What’s your professional address?‑‑‑237 Wellington Street, Launceston, Tasmania.
PN1116
Have you prepared a statement for the purposes of this proceeding?‑‑‑I certainly have.
PN1117
Have you got that statement with you?‑‑‑Yes.
PN1118
Does that statement consist of four pages with an attachment A, the attachment A headed “affidavit”?‑‑‑Yes.
PN1119
Have you read the statement recently?‑‑‑I have.
*** SCOTT ANDREW MCLEAN XN MR HARDING
PN1120
Is it true and correct?‑‑‑It is.
PN1121
I tender the statement, your Honour.
SENIOR DEPUTY PRESIDENT WATSON: Yes. We'll mark the statement of Mr McLean CFMEU8.
EXHIBIT #CFMEU8 STATEMENT AND ATTACHMENT A OF SCOTT ANDREW McLEAN
PN1123
MR HARDING: Mr McLean, if I can take you to paragraph 1 of your statement?‑‑‑Yes.
PN1124
You say in the second sentence that prior to being the Tasmanian district secretary, you were an organiser and industrial officer and assistant state secretary at various times since 1990?‑‑‑Yes.
PN1125
And who was that with?‑‑‑Well, there’s a number of unions. Well, the amalgamated unions, the Australian Timber Workers’ union, the Australian Timber and Allied Industries and BWI, amalgamated union, which ultimately formed the CFMEU.
PN1126
Based on your experience of the industry in the various roles that you've held, can you say whether the size of employers varies very much in Tasmania?‑‑‑It certainly does. There are – we have multinational companies. We have large companies, mid size companies, and the tiniest of companies.
PN1127
Thinking about then the proportion of those, which do you say would predominate?‑‑‑In the industry we have like the Gunns Ltds, Auspines, French Pines, Carter Holt Harveys, and then we have the medium size ones, which it’s all about the two big lots, which is the biggest companies, and then sort of the medium size ones. The small ones, I can tell you that there’s 14 small sawmills. There are a number of harvesting haulage contractors.
PN1128
Thinking about the number of employees that might be employed, what is the range of numbers that like the small employers might employ as compared to the medium size and then the large employers?‑‑‑Okay. Well, if we look at the small ones first, you can have operations that are two people operations.
*** SCOTT ANDREW MCLEAN XN MR HARDING
PN1129
Yes?‑‑‑But normally, they're about four people in a small operation. In the medium size ones, anything from 12 to 40 and some of the big ones, well, there’s a number of sites that - we've got one down there at the moment, it’s 155. It’s not unusual, you know, to have 150 worker sites.
PN1130
To what extent then does the modern award actually regular terms and conditions of employment for employers in the industry in Tasmania?‑‑‑Well, we have collective agreements with some of the big ones and then it sort of feeds down from there. There are a number of medium size ones that have collective agreements, but the reality is that once you start moving into the smaller operations, that they are governed by the award.
PN1131
What’s the range of incomes in your experience of the industry that employees earn?‑‑‑Well, anything from about 36,000, the top – to the top of the line, which this day and age is about 65 – 60, 65.
PN1132
And thinking about again the proportions of employers in each of those categories, what do you say is the – what number of employees, on your expression, sort of fit into the higher categories as compared to the lower?‑‑‑The lower categories are where all the numbers are. It’s the specialised sort of like tradespeople that work in the industry or senior operators, knife grinders, those sorts of people at the upper end, but they are like the minority. The majority of people are in that sort of middle to lower sort of wage bracket.
PN1133
What was the middle to lower then – thinking about it, what would be the middle to lower age bracket?‑‑‑Between about 38 and probably 40, 45.
PN1134
If I can take you to paragraph 9 of your statement, Mr McLean, you say in your experience that:
PN1135
Members in the industry live week by week on their pay. This is especially the case for employees only covered by the award. These are not high paid jobs and they often rely on their weekly pay to be paid at the regular time for their living expenses and meet their financial commitments.
PN1136
Do you see that?‑‑‑Yes.
PN1137
What’s the predominant form of payment, weekly or fortnightly?‑‑‑Weekly.
PN1138
To what extent is it fortnightly?‑‑‑Some of the bigger operations do it fortnightly, but not very many now. Nearly everybody gets paid week by week because – well, they can’t make it for a fortnight. These are low paid, hard working jobs.
*** SCOTT ANDREW MCLEAN XN MR HARDING
PN1139
Then, again, based on your experience in the industry, what method of payment predominates as between cash, cheque or EFT?‑‑‑95, or probably even a greater percentage than that, would be electronic funds transfer these days. There’s still some of the small operations, and I'm talking two, three person operations, that pay in cash. There’s probably about – I can think of probably 40 or 50 people that I know in the whole industry in Tasmania, or that I know of, that actually get paid by cash or cheque.
PN1140
If I can flick you back a couple of pages to paragraph 3 of your statement. You say in that paragraph that there was an application made by the union to vary what was the Timber and Allied Industries Award. Do you see that?‑‑‑Yes.
PN1141
And that’s the source of the affidavit which was annexed to your statement. Are you able to tell the Commission what that case was, who presided over it?‑‑‑Off the top of my head, no, unfortunately. I can’t – I don’t actually recall.
PN1142
Are you able to tell the Commission what occurred as a result of that case?‑‑‑Well, when the – when it became evident that there were to be some sort of penalty arrangement put in place for late payments, I, and my colleagues in Tasmania, went out and told the industry that that’s what was going to happen.
PN1143
So was the result of the case that a clause was inserted in the Timber and Allied Industries Award?‑‑‑Yes.
PN1144
What effect did the insertion of that clause have after you went around telling everybody about its existence?‑‑‑Well, we certainly had less ‑ ‑ ‑
PN1145
MR IZZO: Objection, your Honour. There’s been a pattern of leading questions that we've allowed to go through and I think if we’re going to have all this extra evidence led in‑chief, then the least that can be done is that it’s asked in a non-leading fashion that tends to take the nature of the testimony.
PN1146
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1147
MR IZZO: That's the nature of the objection.
PN1148
SENIOR DEPUTY PRESIDENT WATSON: That's the first objection, Mr Izzo, and I can only deal with that question. I'm not sure that was leading.
PN1149
MR IZZO: It presupposes there was an effect and so, I think – of the case and so on that basis, I do think it assumes ‑ ‑ ‑
*** SCOTT ANDREW MCLEAN XN MR HARDING
PN1150
SENIOR DEPUTY PRESIDENT WATSON: Perhaps Mr Harding can take it in two stages.
PN1151
MR FERGUSON: Yes, just by way of another objection. It seems that we’re now putting new material on that should have been put on in-chief through the statements. I don't know why we’re going through a whole heap of new material.
PN1152
SENIOR DEPUTY PRESIDENT WATSON: I'm sorry?
PN1153
MR FERGUSON: We object on the basis that we say all this material should have been in the statements that were filed. It seems that we’re now introducing a raft of new evidence that should have been done in the statements. We don’t think that there should be an opportunity for a new case to be put on now. This should have been pursuant to the directions in the statements rather than further questions.
PN1154
SENIOR DEPUTY PRESIDENT WATSON: I think there’s some scope to enhance the evidence. Mr Harding, perhaps you could take it in two stages, the specific question that is objected to, whether there was an effect and, if so, what it was?
PN1155
MR HARDING: I think I asked the question, “Was there an effect?” which implies – which asks the question, “Was there an effect?”
PN1156
Was there an effect?‑‑‑Yes, there was.
PN1157
What was it?‑‑‑That the late payment and non-payment decreased.
PN1158
Can I take you to paragraph 8 of your statement, Mr McLean?‑‑‑Yes.
PN1159
You say there that you hear from employees of smaller companies where the employer might forget to pay an individual employee and then you go on to say:
PN1160
When we raise the issue, the company might say, “They’ll process it on Monday or they might process it in the next pay run.”
PN1161
You go on then to say:
*** SCOTT ANDREW MCLEAN XN MR HARDING
PN1162
There is no urgency on the employer’s part to rectify these kinds of mistakes.
PN1163
Do you see that?‑‑‑Yes.
PN1164
Are you able to give the Commission an example?
PN1165
MR FERGUSON: Your Honour, I do object to this. I don’t wish to test the Bench’s patience.
PN1166
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1167
MR FERGUSON: But the difficulty is it’s being introduced now. We can’t possibly get any sort of instructions from the employers to test this.
PN1168
SENIOR DEPUTY PRESIDENT WATSON: Yes. I think in this case there is an example given in relation to White’s Sawmill. I think that’s as far as it should go.
PN1169
MR FERGUSON: Yes.
PN1170
MR HARDING: Then returning to paragraph 9 of your statement, what do you say is the significance of an employee living week by week on their pay?‑‑‑Well, as I said, it’s hard work and they live week to week. That's the reality.
PN1171
How does that manifest itself?‑‑‑Well, if people pay as you go power, for instance, which is a position that’s been taken by the power provider in Tasmania, electricity power provider in Tasmania, so it’s pay as you go. You have a card. You have to recharge the card. You have to have the cash to recharge the card. If you haven't got the cash to recharge the card and it goes to the emergency position on the card, then what happens is that you've got $18 worth of electricity left and at the end of the $18, that’s it. The power is switched off. That happens. Another example of that might be where people have been in situations where they put their cars in to get serviced or repaired. If they don’t get paid on time, they can’t get the cars out because they won’t let them get the cars out because they can’t pay the account. They are the sorts of things that happen.
PN1172
Thank you. I’ve no further questions in-chief.
PN1173
SENIOR DEPUTY PRESIDENT WATSON: Thank you. Yes, Mr Izzo?
*** SCOTT ANDREW MCLEAN XN MR HARDING
MR IZZO: Thank you, your Honour.
CROSS-EXAMINATION BY MR IZZO [11.05 AM]
PN1175
MR IZZO: Mr McLean, if I can take you to the second witness statement that’s been filed? You do have a copy in front of you?‑‑‑Yes.
PN1176
So there’s a first witness statement that’s three paragraphs long?‑‑‑Yes.
PN1177
And then there’s a second one which has some facsimile print on the top of it. It looks like ‑ ‑ ‑
PN1178
SENIOR DEPUTY PRESIDENT WATSON: Attachment A.
PN1179
MR IZZO: ‑ ‑ ‑ 2013 ‑ ‑ ‑
PN1180
SENIOR DEPUTY PRESIDENT WATSON: It’s attachment A to the witness statement probably.
PN1181
MR IZZO: Yes, it’s attachment A. I apologise. Yes.
PN1182
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1183
MR IZZO: Do you have that document in front of you, Mr McLean?‑‑‑I believe so, yes.
PN1184
At paragraph 4, you mention that you recall employers paying employees – sorry, just bear with me one moment to make sure I’ve got the right statement. Yes. You refer to the fact that you were involved in some situations where employers paid employees late and were obliged to make the late payment. Do you see that statement there?‑‑‑Yes.
PN1185
Do you remember how many times this might have occurred?‑‑‑It’s infrequent.
PN1186
Sorry, what was that?‑‑‑It’s infrequent.
*** SCOTT ANDREW MCLEAN XXN MR IZZO
PN1187
Infrequent? This was in Tasmania, I take it?‑‑‑Yes.
PN1188
Then if I can take you forward a couple of paragraphs to paragraph 6. You mention there a late payment situation at Gunns in 2009?‑‑‑Yes.
PN1189
Do you remember which states were affected by this late payment at Gunns?‑‑‑Certainly Tasmania and South Australia, I think.
PN1190
Are you aware of any subsequent late payment issues arising at Gunns following this one?‑‑‑No.
PN1191
So none since to your knowledge?‑‑‑Not that I'm aware.
PN1192
At paragraph 8 you refer to a late payment issue that arose at White’s Saw Mill. It’s about halfway through you talk about the small to medium sized employers, White’s Sawmill. Do you remember when that late payment issue arose?‑‑‑It was just before the company – I couldn't give an actual date.
PN1193
I'm not after a date, but roughly which year it might have occurred?‑‑‑It would have been 2007, I think, maybe 2000 and – no, 2008.
PN1194
And, finally, Mr McLean, you talked about some medium sized employers in the industry employing between 12 to 40 employees. Are you able to just provide us with, to the best of your memory, the types of names that these medium employers are? So can you kind of list these types of employers for us?‑‑‑Just so that I'm clear, you want the names of the businesses?
PN1195
The names of the businesses, precisely?‑‑‑There was White’s, McKay’s, Tasmanian Timber Engineering, Neville Smith Timber.
PN1196
Neville Smith, was it?‑‑‑Neville Smith Timber. Yes.
PN1197
Yes, thank you?‑‑‑They’ve got about 27 plus nine labour hire. Yes, there’s some examples of it.
PN1198
And I take it there’s – roughly would you know how many there are in the state?‑‑‑It’s pretty much all the – yes, well, there’s a dozen, I think, a dozen or 11.
*** SCOTT ANDREW MCLEAN XXN MR IZZO
PN1199
I have no further questions, your Honour.
SENIOR DEPUTY PRESIDENT WATSON: Thank you. Mr Calver?
CROSS-EXAMINATION BY MR CALVER [11.09 AM]
PN1201
MR CALVER: Mr McLean, Richard Calver from Master Builders. Good morning?‑‑‑Good morning.
PN1202
The statement you make in paragraph 8 of your statement:
PN1203
I hear from employees from smaller companies where the employer might forget to pay an individual employee, or a few employees, every couple of months or so.
PN1204
Do you prosecute those breaches of the award?‑‑‑No, not normally.
PN1205
Do you prosecute breaches of the enterprise agreement?‑‑‑Not normally. What we do is we try and rectify it.
PN1206
But you don’t prosecute the breach?‑‑‑Not normally.
PN1207
Thank you. Nothing further.
PN1208
SENIOR DEPUTY PRESIDENT WATSON: Ms Light, anything from you? No?
PN1209
MS LIGHT: No, your Honour.
SENIOR DEPUTY PRESIDENT WATSON: Very well. Mr Harding?
RE-EXAMINATION BY MR HARDING [11.10 AM]
PN1211
MR HARDING: Yes, Mr McLean, you were asked a question by Mr Izzo, I think. You were asked about the frequency of late payments and your answer was “it’s infrequent”. Do you remember that?‑‑‑I do.
*** SCOTT ANDREW MCLEAN RXN MR HARDING
PN1212
Are late payments in the industry predictable and planned or not?‑‑‑That's the problem. They're not. They happen when they happen. Nobody knows until it’s happened.
PN1213
Is there any consequence of that in terms of managing it?‑‑‑Well, the problem always is that regardless of what – people just don’t get paid, so we try and rectify it as quick as we can from the union’s point of view because it’s all about the workers. It’s not – these people haven't got any money to do anything else.
PN1214
Is it the case, do you know whether or not - I withdraw that. Are the union always aware of late payments made in the industry?‑‑‑No.
PN1215
Mr Calver asked you a question about prosecution and you were taken to an example earlier about Gunns. Are you able to tell the Commission whether or not the union prosecuted the late payment in the case of Gunns?‑‑‑No, they did not. We started to, started the proceedings, but – and examined it, but there was a whole pile of things that were going on with Gunns Ltd at the time. We’re talking about the biggest hardwood sawmill in Australia at the time. So we had enterprise agreements. We had trying to line up wages and conditions across a whole pile of sites. We went to the workers and said, you know, “This is done. What’s done is done,” and they took a decision collectively that the industrial issues were more important than their underpayment issue or their non-payment issue.
PN1216
SENIOR DEPUTY PRESIDENT WATSON: Mr McLean, prefaced that question by reference to Mr Calver, who took you to paragraph 8. I don't think that was Gunns that Mr Calver was ‑ ‑ ‑
PN1217
MR HARDING: No, it wasn't. It was White’s Sawmill.
PN1218
SENIOR DEPUTY PRESIDENT WATSON: I presume Gunns wasn't in the category of a smaller employer?‑‑‑No. No, your Honour, it certainly was not.
PN1219
In relation to those small companies, where an employee advised you that an employer might forget to pay every couple of months, was that members who advise you of that?‑‑‑Yes. Yes, your Honour.
*** SCOTT ANDREW MCLEAN RXN MR HARDING
PN1220
What action did the union take?‑‑‑Well, again, our focus was to try and fix it, but most of the time we’re told after the event. The problem is that smaller employers, and even the big ones, they won’t just do a single pay run if somebody hasn't been paid or a group of people haven't been paid. What they do is they will say, “We'll fix it next week.” Now, I don't know why the reason – they say it’s cost, but I don't know whether that’s right or it’s wrong.
PN1221
But did you take those issues up on behalf of your members with those small employers?‑‑‑I certainly did, your Honour. Yes.
PN1222
What was the outcome of that?‑‑‑Well, our focus was to get them paid and they were paid and whether that was on the Friday or whether it was on the Monday or whenever, it was to get them paid.
PN1223
Where you were told that late payment occurred every couple of months, what did you do in relation to that?‑‑‑Well, we just used to keep monitoring, make sure people got paid. We did everything we possibly could to make sure that the workers got paid. We would go and talk to the employers and sometimes, in all honesty, we would, you know, talk quite sternly with them, but we were trying to stop it from happening. That's what we tried to do.
PN1224
Were you successful in that?‑‑‑I think so, but it still happens. The problem is that we don’t always hear about it.
PN1225
Very well. Thank you. Mr Harding?
PN1226
MR HARDING: That's all the questions from me, your Honour.
PN1227
SENIOR DEPUTY PRESIDENT WATSON: Thank you for your evidence, Mr McLean?‑‑‑Thank you very much.
You're excused.
<THE WITNESS WITHDREW [11.14 AM]
PN1229
MR HARDING: Our next witness, your Honour, is Joe Patti.
PN1230
THE ASSOCIATE: Could you please state your full name and address for the court?
MR PATTI: Joe Patti, business address, 152 Miller Street, West Melbourne.
<JOE PATTI, SWORN [11.14 AM]
SENIOR DEPUTY PRESIDENT WATSON: Please take a seat, Mr Patti. Mr Harding?
EXAMINATION-IN-CHIEF BY MR HARDING [11.15 AM]
PN1233
MR HARDING: Mr Patti, is your name Joe Patti?‑‑‑It is.
PN1234
Are you an organiser with the CFMEU Forestry and Furnishing Products Division?‑‑‑Yes, I am.
PN1235
Is your professional address 152 Miller Street in West Melbourne?‑‑‑Yes, it is.
PN1236
Have you prepared a statement for the purposes of these proceedings?‑‑‑Yes, I have.
PN1237
Have you read it recently?‑‑‑Yes, I have.
PN1238
Is it true and correct?‑‑‑Yes, it is.
PN1239
I tender that document, your Honour.
PN1240
SENIOR DEPUTY PRESIDENT WATSON: Very well. I will mark this ‑ ‑ ‑
PN1241
MR PATTI: With the exception of one thing, if I can just say.
PN1242
MR HARDING: Yes.
PN1243
SENIOR DEPUTY PRESIDENT WATSON: Yes, go ahead, Mr Patti?‑‑‑I was looking at in there – it says I'm a wood machinist. I'm actually a furniture machinist. Yes.
PN1244
MR HARDING: A furniture machinist?‑‑‑The first, yes.
SENIOR DEPUTY PRESIDENT WATSON: Very well. Subject to that one amendment, we'll mark the statement of Mr Patti exhibit CFMEU9.
EXHIBIT #CFMEU9 STATEMENT OF JOE PATTI
*** JOE PATTI XN MR HARDING
PN1246
MR HARDING: Mr Patti, you mention in paragraph 1 that you had previously held other roles with the union, including being branch president of Victorian FFTS branch?‑‑‑Yes.
PN1247
What’s that?‑‑‑Sorry?
PN1248
What was that branch?‑‑‑Federated Furnishing Trade Society, yes, before we amalgamated with FFPD, yes.
PN1249
How long were you looking after the members of the union in that branch?‑‑‑Well, gee, it must be about 20 years.
PN1250
SENIOR DEPUTY PRESIDENT WATSON: The entire time that you were an official?‑‑‑Pardon?
PN1251
The entire time that you were an official with the union?‑‑‑Yes, yes.
PN1252
Yes?‑‑‑I can’t give you an exact date.
PN1253
MR HARDING: Before the modern award came into force, was there an award that applied to that industry?‑‑‑Yes, there was. Yes.
PN1254
What was that?‑‑‑The Furnishing Trades Award.
PN1255
Did that have a late payment clause in it?‑‑‑Yes, it did.
PN1256
MR FERGUSON: I object to this. This is just questions about the contents of awards and their legal effect, who they apply to and so forth. These are issues that are matters of law and can be dealt with in the submissions. They're not matters of evidence.
PN1257
SENIOR DEPUTY PRESIDENT WATSON: Yes, I think there’s some point to that, Mr Harding. They're matters of fact and official documents that can be put to the witness.
PN1258
MR HARDING: Can I take you to paragraph 3? You say most of the sites which are currently organised, you've organised in the past within the furnishing industry and you say in the last sentence:
*** JOE PATTI XN MR HARDING
PN1259
They're both small and large employers who make furniture and cabinets.
PN1260
Do you see that?‑‑‑Yes.
PN1261
How do you class a small employer as against a large employer?‑‑‑Well, a small employer I would class from anything from four people up to 15. Yes, medium from 15 to maybe 40; 40 upwards, a larger employer.
PN1262
In terms of the area you're responsible for, Mr Patti, what size of employer predominates small, large or medium?‑‑‑Most of them will be small, it would be fair to say; small to medium. Yes.
PN1263
How many do you say are large then?‑‑‑Large? I could count them in my hand probably; four.
PN1264
Yes?‑‑‑Yes, four, five.
PN1265
Four, five?‑‑‑Yes.
PN1266
In terms of the number of employees, what do you say is the proportion of employees employed in, say, small employers, medium employers and large employers?‑‑‑Well, a large – a small employer, as I said, I think it’s from about four to 15, up to 15; 15 up to about 40 is medium; and 40 to 140, I’d call as large.
PN1267
Thinking about the industry as a whole, though, are there more or less employees employed with small employers as against, say, large employers?‑‑‑Yes. Yes, that’s ‑ ‑ ‑
PN1268
Which one?‑‑‑No, I would say that the small employees would be the majority of the industry, the furnishing industry. Yes.
PN1269
Are there many employers in your industry that rely exclusively on the modern award or not?‑‑‑Yes, most of them.
*** JOE PATTI XN MR HARDING
PN1270
Then thinking about the industry that you're dealing with, what would you say are the typical incomes that are earnt by employees?‑‑‑Mainly in those – in the furnishing industry, a lot of them are paid the award, the award wages. So it’s fairly low, in my opinion, anyway. A lot of them would pay – our award goes, I think, if youse are familiar, you'd go from one to five, it used to be one to four, and then tradesperson level 1, 2 and 3 and, unfortunately, if I can say these days, a lot of them do in‑house training and they keep them at a lower level, which is a two or a three. So what’s that about, 16.50, I think, going by memory last year.
PN1271
The current modern award says, you know, they’ve got to be paid by the week or by the fortnight?‑‑‑Yes.
PN1272
Thinking about the industry again, what’s the most common form of payment?‑‑‑Weekly mostly.
PN1273
By a lot or a small amount?‑‑‑No.
PN1274
Is it most employers?‑‑‑Mostly weekly. I’ve got a few fortnightly, but mostly weekly.
PN1275
Are you able to tell the Commission whether or not the form of payment is – I withdraw that. Are you able to tell the Commission whether the most common form of payment is cash, cheque or electronic funds transfer?‑‑‑Nearly all electronic transfers.
PN1276
If I can take you to paragraph 7 of your statement, you talk about a situation that came to mind there where an employer paid a member late two weeks in a row. Do you see that?‑‑‑Yes. Yes, I do see that. Yes.
PN1277
Are you able to tell the Commission what occurred in that situation?‑‑‑Well, in that situation it was – most of – all the employees, it wasn't just one or two, but it occurred – it had occurred for a few weeks. The employees let it go at first and then they got in touch with us. We spoke to the company. We were sure that it was going to be fixed; came the following week, basically the same thing happened and they were very low paid workers, just award and some of them, as I said, classification would have been under production employees 2s and 3s and, yes, they basically didn't have – I mean, I recall one particular employee especially, very upset, it was a while ago, didn't have money to pay his rent, you know, didn't have – hardly any money to even come to our office. Yes.
PN1278
SENIOR DEPUTY PRESIDENT WATSON: Mr Patti, what happened when it reoccurred after the union had talked to the employer?‑‑‑Sorry?
*** JOE PATTI XN MR HARDING
PN1279
Your evidence is that an incident of non-payment occurred. You talked to the employer. You were assured everything was okay and it happened again. Did the union follow it up?‑‑‑Yes, it happened, this particular one, a few years ago – it happened several times. The employer sort of – the employer told us that he was going to make sure at first, that the money would be put in the following week. So – and it was a problem with the electronic transfers and it would be fixed, but came the following week, same problem happened and we spoke to the employer again, basically the threat of what we had in the award, saying, “You would have to pay overtime rates,” you know, “if it wasn't fixed.” I think we saw him the third time where the employees were all outside waiting the following week and what happened? Basically, yes, the employees are in trouble. They hadn’t been paid, I think it was in excess of three days actually, and basically no excuse from the employer. He just said he was going to pay it later. He had – he didn't have the funds to pay it.
PN1280
Was the issue ultimately resolved? Was the issue resolved?‑‑‑Sorry?
PN1281
Was the issue resolved? Did the late payment cease?‑‑‑I think we were going to take him to the Commission at the time or Fair Work Australia. Look, it was eventually resolved. It was eventually resolved, but it went on for a while, you know. Yes, it went on for a while.
PN1282
MR HARDING: You say that the employer told you on that occasion he didn't have the funds to pay it. What were you referring to? What do you mean by that?‑‑‑Look, at one stage he would have said it was a problem with the computers, you know, electronically because it was put in – it was a mistake or the problem was with the computers. Another time, if I'm trying to remember right, it’s a question of when he got paid so he could pay the employees, you know. I mean, we were – we try and be reasonable and we use the award to say, “Well, look, if you keep doing it, you know, we’re going to be charging you overtime rates.”
PN1283
Yes?‑‑‑Yes. So eventually it got fixed.
PN1284
If you look at paragraph 8 of your statement, you say there you recall raising a late payment with an employer once an employer’s response was surely he could get another $100 out of his bank?‑‑‑Yes, that’s true.
PN1285
What’s wrong with that?‑‑‑Well, I think this – as I said to this employer, “Not everybody has got $100 to go to the bank,” you know, “not everybody has got money they can draw on and not everybody has got a close relative they can say, ‘Give me $100’.” I don't know if everyone understands that, but someone on very low wages, if they don’t get paid, they’ve got no money for, you know, basics - you know, food, rent. Yes.
*** JOE PATTI XN MR HARDING
PN1286
Thank you, Mr Patti?‑‑‑Yes.
PN1287
Just stay there for a moment.
PN1288
SENIOR DEPUTY PRESIDENT WATSON: Just a further question, paragraph 10, you relate a situation in 2004, Easter, with a furnishing company in Melbourne. Mr Cotroneo has had evidence admitted as exhibit CFMEU3. Is that the same issue as he raised in the same company?‑‑‑One other – one of those things I said, yes, it is in relation to that company. The other one was another company, the one that I believe I actually gave him some money. That was another company. That was seven, I think, wasn't it? Yes.
PN1289
I'm looking at the one in paragraph 10 at the moment?‑‑‑Paragraph 10?
PN1290
The non-payment at Easter 2004. So that’s the same example as Mr Cotroneo has given in his evidence?‑‑‑Yes.
PN1291
Does that also apply - Mr Sayat is no longer giving evidence. Is Mr Sayat the member who rang you about that?‑‑‑Sorry?
PN1292
Is Mr Sayat, Joe Sayat ‑ ‑ ‑?‑‑‑Yes. Yes, I remember that.
PN1293
Is he the member who rang? You say in paragraph 10:
PN1294
I got a phone call from one of our members.
PN1295
Was that Mr Sayat who ‑ ‑ ‑?‑‑‑No, it wasn't, but I rung him and then he rung me back. There was about four employees that we had discussion ‑ ‑ ‑
PN1296
Was it the same company?‑‑‑Yes, same company. Yes.
PN1297
Same company?‑‑‑Yes, same company.
Very well. Thank you. Mr Izzo?
CROSS-EXAMINATION BY MR IZZO [11.29 AM]
*** JOE PATTI XXN MR IZZO
PN1299
MR IZZO: Thank you, your Honour.
PN1300
Mr Patti, I just want to ask you initially a question just about when you were branch president. I think you gave evidence that you'd been in that branch, the FFTS, for about 20 years?‑‑‑I think so.
PN1301
Were you president the whole time or ‑ ‑ ‑?‑‑‑No.
PN1302
‑ ‑ ‑ what period were you president?‑‑‑No. I wasn't president the whole time. I don't remember the exact dates, but I think it was about five years. I think it’s about five.
PN1303
Roughly when was that? Is it ‑ ‑ ‑?‑‑‑Sorry?
PN1304
Roughly when was that? Was it in the 2000s? Was it in the 90s?‑‑‑Yes, that would have been in the 2000 – where are we 2014 – the 2000s.
PN1305
The 2000s?‑‑‑Yes.
PN1306
So I take it that’s 2000 to about 2010?‑‑‑Yes, yes.
PN1307
At paragraph 4 of your statement, you say that you probably encounter a situation when employees are not paid their wages on time about once a year with the more serious late payment about every two years. Do you see that?‑‑‑Yes. Yes, I do.
PN1308
Has that been pretty consistent throughout your time with the union?‑‑‑Look, I say that as an average because some years you get one or two that are bad. Some might be three or four, like last year I could tell you that there would have been three, three or four. This year there has only been so far one. So it’s different every year, you know.
PN1309
But that kind of pattern, if you like, one, two, three or perhaps ‑ ‑ ‑?‑‑‑Yes.
PN1310
‑ ‑ ‑ in a bad year, four, is that relatively consistent from basically the 2000s to today? You always get one every now and then?‑‑‑You certainly get one to two per year. Yes.
*** JOE PATTI XXN MR IZZO
PN1311
And so you would have experienced that as your time as president as well then?‑‑‑Yes.
PN1312
As well when you were an organiser before you were president?‑‑‑Yes.
PN1313
I take it that these late payment issues you talk about, that mainly relates to Victoria or exclusively relates to Victoria, I should say?‑‑‑In my case, yes.
PN1314
Mr Patti, you refer at paragraph 7 to a situation that occurred regarding late payment two weeks in a row and the employee didn't have enough money even for lunch. You mentioned that happened a number of years ago?‑‑‑Yes.
PN1315
Was that when you were president or around about that time?‑‑‑Yes, I was president then. Yes.
PN1316
Then you talk about - I think paragraph 8 is a different example, is it:
PN1317
I recall raising a particular late payment and the employer said, “Surely, you can get another $100.”
PN1318
Is that different to the example in seven?‑‑‑Yes, it is.
PN1319
When did that occur, roughly?‑‑‑That occurred last year.
PN1320
Then at paragraph 13 you talk about an incident that happened at a company under its previous ownership when the member rang you at 10 pm at night. Do you see that?‑‑‑Yes, I do.
PN1321
Do you recall when that occurred?‑‑‑I think - I'm not certain, but it was 2012, 2013.
PN1322
I’ve no further questions, your Honour.
SENIOR DEPUTY PRESIDENT WATSON: Mr Calver?
CROSS-EXAMINATION BY MR CALVER [11.35 AM]
*** JOE PATTI XXN MR CALVER
PN1324
MR CALVER: Good morning, Mr Patti, Richard Calver, Master Builders?‑‑‑Hello.
PN1325
Given that the underpayments reported to you are quite infrequent, once or twice a year, do you prosecute those employers who make those late payments?‑‑‑Sorry?
PN1326
Given that your evidence is that the late payment of wages occurs fairly infrequently, about once a year, with serious late payments every two years, do you prosecute the employers of those employees who report that to you? Do you prosecute them?‑‑‑Yes. No, not very often. We try and get them to pay – is what we try and do.
PN1327
How often would you prosecute?‑‑‑Look, I don't think we've - I think we – there’s only one occasion we made an application to prosecute someone and I think it was settled prior to actually the hearing.
PN1328
So that’s one application in your 23 years with the industry?‑‑‑I think it might have been that number 7 one.
PN1329
The example in seven?‑‑‑Yes.
PN1330
And that worked, did it?‑‑‑Excuse me?
PN1331
You got it resolved because of ‑ ‑ ‑?‑‑‑It was resolved.
PN1332
It was resolved in favour of the employee once you lodged your application for prosecution?‑‑‑Yes, yes.
PN1333
Yes, thank you. Nothing further.
SENIOR DEPUTY PRESIDENT WATSON: Anyone else? No? Mr Harding?
RE-EXAMINATION BY MR HARDING [11.36 AM]
PN1335
MR HARDING: Just one question. When you say it was resolved, was it resolved by agreement or by litigation by the judge?‑‑‑I can't remember who the Commissioner was, but it was conciliation. Yes.
*** JOE PATTI RXN MR HARDING
PN1336
Thank you. No further questions.
PN1337
SENIOR DEPUTY PRESIDENT WATSON: Very well.
PN1338
Thank you for your evidence, Mr Patti. You may leave?‑‑‑Sorry?
Yes, you're excused. Thank you.
<THE WITNESS WITHDREW [11.36 AM]
PN1340
SENIOR DEPUTY PRESIDENT WATSON: Just before we get in the next witness, Mr Harding ‑ ‑ ‑
PN1341
MR HARDING: Yes?
PN1342
SENIOR DEPUTY PRESIDENT WATSON: ‑ ‑ ‑ a similar issue arises, as I put to Mr Patti in respect of Mr Lawson’s statement, CFMEU2 and Ms Finnigan, CFMEU5. I take it from reading those statements that that relates to the same issue in respect to the AKD Colac issue in February 2012?
PN1343
MR HARDING: I can’t say that.
PN1344
SENIOR DEPUTY PRESIDENT WATSON: Is that something you could perhaps get ‑ ‑ ‑
PN1345
MR HARDING: I can get some instructions.
PN1346
SENIOR DEPUTY PRESIDENT WATSON: ‑ ‑ ‑ instructions on? Yes?
PN1347
MR HARDING: If we could call our last witness, Bradley Coates.
PN1348
SENIOR DEPUTY PRESIDENT WATSON: Yes, very well.
PN1349
THE ASSOCIATE: Mr Coates, would you please state your full name and address for the court?
MR COATES: Bradley John Coates (address supplied).
<BRADLEY JOHN COATES, AFFIRMED [11.38 AM]
SENIOR DEPUTY PRESIDENT WATSON: Please take a seat, Mr Coates. Yes, Mr Harding?
EXAMINATION-IN-CHIEF BY MR HARDING [11.38 AM]
PN1352
MR HARDING: Thank you, your Honour.
PN1353
Is your name Bradley Coates?‑‑‑It is.
PN1354
Are you the district secretary of the CFMEU FFPD Greater Green Triangle District?‑‑‑I am.
PN1355
What’s your professional address?‑‑‑The professional address is 1 Crennan Street, Mount Gambier.
PN1356
Have you made a statement for the purposes of these proceedings?‑‑‑Yes, sometime ago.
PN1357
Have you got it with you?‑‑‑Yes.
PN1358
Does the statement contain two pages initially?‑‑‑Yes.
PN1359
And with an attachment A?‑‑‑Yes.
PN1360
Do you wish to make any changes to attachment A?‑‑‑Yes, paragraph 2, which relates to another matter which has already been resolved at the time that I made this statement.
PN1361
SENIOR DEPUTY PRESIDENT WATSON: I think we can leave it in the statement. It’s clearly not relevant to the current proceedings.
PN1362
MR HARDING: Yes.
*** BRADLEY JOHN COATES XN MR HARDING
SENIOR DEPUTY PRESIDENT WATSON: Very well. We'll mark this statement of Mr Bradley Coates CFMEU10.
EXHIBIT #CFMEU10 STATEMENT AND ATTACHMENTS OF MR BRADLEY COATES
PN1364
MR HARDING: Just for the benefit, Mr Coates, of anybody else who might not know the answer, what’s the Green Triangle?‑‑‑The Greater Green Triangle District covers from around about Murray Bridge in South Australia down through the upper and lower south-east of South Australia and into Western Victoria, down as far as a bit of an imaginary line between Colac and Geelong and then back up through to Hamilton, Horsham. Yes, so it’s geographical rather than state based.
PN1365
What would you say based on your experience in the industry, Mr Coates, was the range of size of employer in the Green Triangle?‑‑‑It ranged from single employee employers, so where they might only employ one person right up to employers who employ up to 500 or 450.
PN1366
What do you say, thinking about the industry as a whole, would be the proportion of employers in those categories?‑‑‑Okay. So I think the majority of the employers would be in categories of under 50 people, so under 50 employees.
PN1367
The majority of employers would have less than 50?‑‑‑Yes.
PN1368
And then again thinking about the industry, where – and based on your experience – do most employees sit, in the small, medium or large categories?‑‑‑Probably in the small category, so – we do have some large employers, but they're in, you know, less than say around about five, six. So the clear majority of employers are in the medium or less than medium – small employers, yes.
PN1369
What extent does the union have agreements with, say, small employers as opposed to large employers?‑‑‑Okay. With the large employers where we industrially have probably a better coverage. We have agreements with most of the large employers and we do have some agreements with small employers, but not very many. So most of the small employers and medium employers, we operate on the award.
PN1370
The modern award? Is that what you're talking about?‑‑‑The modern award, yes.
*** BRADLEY JOHN COATES XN MR HARDING
PN1371
Again, based on your experience, Mr Coates, what is the range of incomes that employers might earn in the industry?‑‑‑Well, they range from the minimum under the award, right through into – I’ve got members who earn up to 70, 80 thousand a year gross.
PN1372
What’s the proportion of those members in relation to the industry as a whole?‑‑‑Well, the industry in the Greater Green Triangle encompasses 6000 employees. So you'd probably – 80 – 70 to 80 per cent of those employees would be either right on the minimum award or just a bit above the award.
PN1373
Are you able to say whether or not the method of payment in the industry is weekly or fortnightly most commonly?‑‑‑Predominantly, it’s weekly.
PN1374
When you say “predominantly” to what extent?‑‑‑I think from the best of my knowledge at this stage, I think there’s two employers that I know of that pay fortnightly.
PN1375
Are they large category, small or medium?‑‑‑No, in the small category.
PN1376
In the small? Then in your experience to what extent do employees rely on the way in which they're paid?‑‑‑Can you just repeat the question?
PN1377
That's probably a bad question. You said I think the predominant form of payment was week by week?‑‑‑Yes.
PN1378
To what extent do employees, in your experience, rely on being paid week by week?‑‑‑Okay. So the majority of the employees in the industry, because of the nature of - you know, and they're reasonably lowly paid, so most – the majority of them are either, as I said, on the award or just above the award so that they do live from week to week and it’s obviously – it’s fairly important that when pay day comes around that they get paid so that they don’t have to wait for their money because of – if they're – and, you know, it depends on their personal circumstances. I mean, for a single person it’s probably not as significant as it would be for someone with a family. However, living in regional areas, there’s also a – there’s some idiosyncrasies there that don’t probably apply to people who live in large metropolitan areas as well, so the access to financial institutions and things like that. So it’s important that people get paid promptly and on time so that they can organise their weekly budget or their finances because, you know, as I said, a lot of them live from week to week from pay day to pay day.
*** BRADLEY JOHN COATES XN MR HARDING
PN1379
Why do you say that being in a regional area would make any particular difference to someone’s reliance on being paid?‑‑‑Okay. Well, just for an example, most people have to rely on vehicular transport. There’s no - you know, they might live in a small town which the only way to get from A to B is to get in the car and drove. So at the end of the day, you know, get in a car; they don’t have access to public transport. They don’t have to go and do their weekly shopping, don’t tend to have – sometimes there’s not an availability of retail outlets that are open 24 hours a day like you are at - you know, so therefore when – if your pay doesn't arrive on time, that can create a whole lot of problems. I mean, for instance, a lot of the members that I deal with have – pay their car registration monthly as well, so, you know, if they don’t get paid and that payment is not available, well, then you know, they’d have to take the risk of driving an unregistered car or not going anywhere because some of them live in fairly remote areas as well, so – and by remote areas, I mean, you know, they might be an hour away from the nearest major regional centre.
PN1380
In relation to people who live in regional areas, what’s the predominant form of payment? Is it electronic funds transfer or cash or cheque?‑‑‑No, the predominant is electronic funds transfer.
PN1381
And in your experience do your members do anything in particular in relation to how they organise their affairs when they're paid by electronic funds transfer?‑‑‑Yes. So the normal way of organising things, so the people sometimes get their – set up their bank accounts so that their mortgage payments, their car payments, their hire purchase payments, their lay-bys, all that sort of thing gets automatically garnished from their bank account, so pay day may be on a Thursday, so the mortgage payment comes out on a Friday to make sure there’s sufficient funds in there to cover that. So if their pay doesn't go in on that Friday or it doesn't go in till a certain time, you know, there’s a possibility where they could get hit with default fees and their credit rating becomes in question.
PN1382
If I can take you then to the attachment A to your statement, which is the earlier statement that you made dated 22 April 2013. Do you see that?‑‑‑Yes.
PN1383
In paragraph 4 you refer to an example of Gunns. Do you see that?‑‑‑Yes.
PN1384
Then if you turn the page and refer to paragraph 7, and you say that:
PN1385
Gunns is an extreme example made worse by the timing of the public holidays.
*** BRADLEY JOHN COATES XN MR HARDING
PN1386
Why do you say that?‑‑‑Well, look, it’s always significant when someone doesn't get paid on time, but the significance is heightened when it’s at Christmas time. There’s probably – and there are a couple of other examples in my time as a union official where people haven't been paid at Christmas and so it’s very significant because on this particular occasion the pays were supposed to go in early on Christmas Eve or the day before Christmas Eve. Now, for whatever reason Gunns decided to restructure their pay office and do a whole heap of things a few weeks before Christmas and the new system – obviously someone didn't get the pays through in time. So by the time we knew about it, members were ringing me on Christmas Eve saying, “We haven't been paid,” and this is not just in - these were members in Adelaide because I was actually the duty officer for the union at the time, too, so – and we were getting calls from Tassie, from South Australia, from Adelaide, like very – people hadn’t been paid, you know. People had – they’d gone to pick up their lay-bys or gone to get some money out of the bank, gone to the supermarket. There was insufficient funds there and, yes, so that’s ‑ ‑ ‑
PN1387
Could I ask you, though, you've identified it as an extreme example. What in your mind, compared to other instances of late payment you might have dealt with, makes it an extreme example?‑‑‑Okay. Well, that’s an extreme example where the hardship cause was probably magnified by the period of time, whereas other occasions where there’s a late payment and it may - you know, it may just be a normal week during the year where people have the ability to go and maybe – I’ve had cases where people have gone and borrowed money off their family or off friends to, you know, get them across – might be over a weekend because then they get paid on the Monday or the Tuesday or it might only be, you know, a 24-hour period and things like that, whereas at this particular juncture was that people – I mean one example is that - I don't know whether it happens right throughout Australia, but certainly in the district that I operate in, people have a system where they buy Christmas hampers off a company similar to Crisco where they pay during the year and their final payments – normally this is delivered either on the day before or two days before Christmas and if payment is not due when they deliver, they don’t actually get their Christmas hamper and their gifts and the like. So I suppose that’s where it’s significant. I mean, you know, I had one example of a particular gentleman, his wife’s birthday was actually on Boxing Day, so he’d had some jewellery on lay-by. So not only did he miss out on, you know, Christmas presents and stuff like that, but he was unable to get that present off lay-by and, yes. He had a pretty good excuse, but it still didn't make him feel very good.
PN1388
In your experience of late payments in the industry, are they typically planned and predictable or not?‑‑‑No, they're not typically planned and predictable and that’s probably what makes it difficult, although there are some employees who from time to time may use late payment as a punitive form of, I don't know – the correct word, probably for retribution against an employee if they’ve put in a workers' comp claim and stuff like that and I’ve had instances of that.
PN1389
SENIOR DEPUTY PRESIDENT WATSON: Have you taken adverse action claims on behalf ‑ ‑ ‑?‑‑‑I beg your pardon, Senior Deputy President?
*** BRADLEY JOHN COATES XN MR HARDING
PN1390
Have you taken adverse action claims on behalf of the employees in those circumstances?‑‑‑Well, there’s been some pretty strong negotiation as to why that person should be paid, so, yes – so. But it’s very difficult to prove, like, I mean, an employer will say, you know, like just, “It was an oversight,” or, “we've got a cash flow problem,” or whatever.
PN1391
MR HARDING: Mr Coates, are you able to say whether the union is always aware of when late payments occur in the industry?‑‑‑No.
PN1392
If I could take you back to paragraph 7, you say:
PN1393
The Gunns is an example which was made worse by the timing of the public holidays and similar scenarios occur all too often.
PN1394
What do you mean by “all too often”?‑‑‑Well, it’s – sorry, I'll just read – well, because of the public holiday issue and the holiday times, it’s like Easter time and just from memory there was an issue not last year, the year before where an employee come leading into Easter didn't submit their time sheet – like pay day was the Thursday, so they got paid on the Thursday. The time sheet didn't go in till lunchtime Thursday, but the pays all went through EFT on the Wednesday. Now, the employer said, “Well, because” – used the excuse, “Well, you've got to have your time sheet in on the Wednesday, even though the pay day and the last day for work was on the Thursday.” Now, most employees will anticipate that, but you know there was a – now, the person did end up getting paid on the Friday after some negotiation, but I mean, that’s - they're the sort of things that can happen and from my experience as a union official, sometimes it’s just a phone call to the employer and some strong words and, you know, maybe the threat of adverse action when they don’t get paid and it’s normally fixed up.
PN1395
Thank you. I have no further questions, your Honour.
PN1396
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1397
Can I ask you, Mr Coates, in paragraph 8 you've referred to an issue involving Carter Holt Harvey at the Nangwarry mill?‑‑‑Yes.
PN1398
We’ve admitted a statement of Mr Lawson which also refers to the situation with Carter Holt Harvey at Nangwarry just before Christmas one year and it says, “The union received hundreds of phone calls.” You drove out to the site and cash payments were arranged. Is that the same circumstance that you're referring to in paragraph 8 of your statement?‑‑‑Yes, yes.
*** BRADLEY JOHN COATES XN MR HARDING
PN1399
Do you recall which year that was?‑‑‑It was – from memory, I think it was about 2004.
PN1400
2004 at Christmas?‑‑‑So as a result of that one and the Gunns’ one, we were able to negotiate a stronger clause in the enterprise agreement on both occasions to do with late payments which ‑ ‑ ‑
PN1401
Those clauses were made in the agreement?‑‑‑Yes.
PN1402
The final question from me, paragraph 7, the April example this year, that doesn't relate to Gunns, I take it. That relates to another employer?‑‑‑Yes.
PN1403
Who was that employer?‑‑‑Sorry?
PN1404
Who was the employer?‑‑‑The April one?
PN1405
Yes?‑‑‑A company called H and Q Logging.
PN1406
Do you know what the reason for that late payment was?‑‑‑My understanding was that the reason was it was just an administrative error. That was the reason I was given so ‑ ‑ ‑
Very well. Thank you. Mr Izzo?
CROSS-EXAMINATION BY MR IZZO [11.57 AM]
PN1408
MR IZZO: Mr Coates, if I could just ask a question about paragraph 3 of your statement? So that is the second statement you filed in the attachment to your statement. So it’s the one which is headed – it’s got “22 April 2013” on the first page?‑‑‑Yes, yes.
PN1409
At paragraph 3 you've mentioned that you've dealt with the late payment scenario at least twice a year. Do you see that?‑‑‑Yes.
PN1410
Does that comment about late payment scenario twice a year – would that be a fair reflection of your time as a district secretary that the types of late payments issues that had arisen?‑‑‑I would have thought from before my time as the district secretary as well. I’ve been doing the job for 17-odd years, so ‑ ‑ ‑
*** BRADLEY JOHN COATES XXN MR IZZO
PN1411
So it was also an issue when you were assistant state secretary?‑‑‑And when I was just an organiser.
PN1412
And when you were an organiser?‑‑‑In previous areas. So I was organiser in the Gippsland area for a number of years as well.
PN1413
So that comment effectively relates to that whole timeline?‑‑‑Yes.
PN1414
Thank you. At paragraph 4 you mentioned that Gunns didn't pay its workforce on time in 2009/2010. You go on to talk about Christmas. So I take it that was December 2009, just before?‑‑‑December 2009, yes.
PN1415
You've mentioned Tasmania and South Australia being affected. Do you know if there were any other states that were affected?‑‑‑I only dealt with South Australia and Tasmania and north ‑ ‑ ‑
PN1416
And both of those states were affected?‑‑‑Yes.
PN1417
Are you aware of any subsequent underpayment at Gunns since then?‑‑‑No.
PN1418
At paragraph 8 you mentioned the situation at the Nangwarry Mill, which I think his Honour was just asking you about. Now, firstly, just for everyone’s benefit, can you just confirm the state Nangwarry is in?‑‑‑South Australia.
PN1419
I believe you'd already answered the question about when that occurred, so I don't need to ask about that. I’ve no further questions.
SENIOR DEPUTY PRESIDENT WATSON: Very well. Mr Calver?
CROSS-EXAMINATION BY MR CALVER [12.00 PM]
PN1421
MR CALVER: Thank you, your Honour.
PN1422
Richard Calver from Master Builders. Good morning, still, but not by much?‑‑‑Good morning.
*** BRADLEY JOHN COATES XXN MR CALVER
PN1423
In relation to your answer to his Honour about any follow up when there was an underpayment of wages claim, he mentioned whether or not you’d taken an adverse action. Did you make any prosecutions in respect of ‑ ‑ ‑?‑‑‑No.
PN1424
‑ ‑ ‑ late payment? No? Also in answer to his Honour, you said that it’s difficult to prove the retribution point. That was your answer, wasn't it?‑‑‑Yes.
PN1425
But it’s not difficult to prove, is it, that the payment of wages has been made late?
PN1426
MR HARDING: I object to the question. I object to the question, your Honour. I mean, how could the witness possibly answer that in the abstract?
PN1427
SENIOR DEPUTY PRESIDENT WATSON: Yes. Sorry, what was the question?
PN1428
MR CALVER: Is it a breach of the award in your view if a payment of wages is made after the date is set out in the award?‑‑‑Yes.
PN1429
Could you prosecute for that?‑‑‑Yes.
PN1430
Do you prosecute for that?‑‑‑No.
PN1431
Thank you.
PN1432
SENIOR DEPUTY PRESIDENT WATSON: Yes. You should clarify whether it’s just “good” or just “morning”, Mr Calver.
PN1433
MR CALVER: Yes, I think a bit of both, your Honour.
PN1434
SENIOR DEPUTY PRESIDENT WATSON: Yes. Mr Harding?
PN1435
MR HARDING: No, no further questions.
PN1436
SENIOR DEPUTY PRESIDENT WATSON: Sorry. I take it there was no one else? Very well.
Thank you for your evidence, Mr Coates. You're excused?‑‑‑You're welcome.
<THE WITNESS WITHDREW [12.01 PM]
PN1438
SENIOR DEPUTY PRESIDENT WATSON: Very well.
PN1439
MR HARDING: I apologise, your Honour, I forgot. I didn't raise the issue of the AKD example with Mr Coates, but obviously you did.
PN1440
SENIOR DEPUTY PRESIDENT WATSON: Didn’t raise the question of?
PN1441
MR HARDING: The question of the AKD example, but you did.
PN1442
SENIOR DEPUTY PRESIDENT WATSON: Mr Coates ‑ ‑ ‑
PN1443
MR HARDING: No, no. You did, your Honour.
PN1444
SENIOR DEPUTY PRESIDENT WATSON: I'm sorry.
PN1445
MR HARDING: I was merely apologising to you for not raising it because you raised it with me.
PN1446
SENIOR DEPUTY PRESIDENT WATSON: Right, yes.
PN1447
MR HARDING: Mr Coates is fine.
PN1448
SENIOR DEPUTY PRESIDENT WATSON: Thank you. Thank you, Mr Coates.
PN1449
MR HARDING: Your Honour, that’s the evidence from the CFMEU in conjunction with the other witness statements that have been filed.
PN1450
SENIOR DEPUTY PRESIDENT WATSON: Yes, very well. We might take an adjournment until 12.15 to allow the parties to get organised.
SHORT ADJOURNMENT [12.02 PM]
RESUMED [12.14 PM]
PN1451
SENIOR DEPUTY PRESIDENT WATSON: Yes, Mr Harding.
PN1452
MR HARDING: Thank you, your Honour. To commence, perhaps if I could hand up some documents. Firstly, some submissions that address the argument that I’m going to advance today, but just condense it into writing.
PN1453
SENIOR DEPUTY PRESIDENT WATSON: Yes, very well.
PN1454
MR HARDING: They are intended to be read with the written submissions of 19 December. We also have authorities as well that I intend to refer to and materials, some of which I have already referred to at opening.
SENIOR DEPUTY PRESIDENT WATSON: Very well. Look, we might mark your further submissions CFMEU11 for ease of reference.
EXHIBIT #CFMEU11 Various materials
PN1456
MR HARDING: Yes. It is not necessary, I think, for me to again explain the proposal that is before you. The proposal is again set out in full on page one of the written submissions.
PN1457
MS LIGHT: Your Honour, sorry, if I could interject, the parties in Sydney haven’t had an opportunity to look at those submissions. If copies could be made available, that would greatly assist.
PN1458
MR HARDING: Certainly.
PN1459
SENIOR DEPUTY PRESIDENT WATSON: Yes. If you just wait for that to occur. Do you have an electronic version that could be sent to our Sydney registry or perhaps my associate can arrange that with Rothville (indistinct) and we will get someone in registry to bring copies to the Sydney parties.
PN1460
MS LIGHT: Thank you, your Honour
PN1461
MR HARDING: Do you want me to continue, your Honour, or do you want that to occur first?
PN1462
SENIOR DEPUTY PRESIDENT WATSON: How long do we think we’ll be with submissions?
PN1463
MR HARDING: I suspect probably about an hour, hopefully less.
PN1464
SENIOR DEPUTY PRESIDENT WATSON: About an hour.
PN1465
MR IZZO: I suspect the same for myself, your Honour.
PN1466
SENIOR DEPUTY PRESIDENT WATSON: I see. Well, it might be better if we broke for lunch now. Yes, very well. We’ll break for lunch.
SHORT ADJOURNMENT [12.21 PM]
RESUMED [1.18 PM]
PN1467
SENIOR DEPUTY PRESIDENT WATSON: Yes, Mr Harding?
PN1468
MR HARDING: Thank you, your Honour. It’s probably not necessary for me to go into too much detail concerning the history of the award clause that’s being proposed by the CFMEU. We set out under the heading on page 2 the current clause and its history, the clauses drawn from the various awards and in the materials from tab 1 through to 5. We've put in the text of the awards, at least on the clauses themselves rather than the whole award.
PN1469
It’s enough for me to say about that that when you look at the text of the clauses as they’ve evolved since 1947, you will immediately notice the correspondence between the history, the clause as it was, say in 1947, and then 1951 and 1960 and the proposal of the CFMEU. What is notable is that that evolution has picked up electronic funds transfer in more recent times through the intention, at least of Commissioner Merriman and the simplification process and then ultimately Commissioner Blair which we say demonstrates that the Commission has taken an approach to the history which demonstrates its preparedness to adjust the late payment clause in a way that conforms with contemporary circumstances.
PN1470
Whilst one might expect in 1947 that their cash might be a fairly frequent form of payment, as the evidence discloses, that by 2015 that is no longer so. The way in which I have structured these submissions in order to make them more efficient and also to cut down time is I have dealt with or responded to particular things from the employer’s submissions in writing. It won’t be necessary for me to go into too much detail to those now.
PN1471
In the next part of the submissions we set out what we understand to have been the basis for the clause in its current form in paragraph 9 and what we understand to have been how it managed to get into the award and the basis for it. What is important to note about this, your Honours, and Commissioner, is that we are not talking about starting from a blank slate, even in relation to the modern award.
PN1472
The modern award accepted through the existing clause the need for a late payment clause. Admittedly, it was confined to cash and cheque, but it demonstrates that – and a legislative assumption recorded by the Full Bench in the Re Four Yearly Review Case, which is contained in materials at tab 8, demonstrates that the legislature made an assumption about what might be an appropriate set of conditions to reflect the modern award objective at the time that the modern award came into existence and in so doing, it put in the clause 25.5 There was recognition that there was a need at the award level for such a clause.
PN1473
So the perspective that we urge the Commission to take is that the proposal by the CFMEU is really not some revolutionary step, but rather an evolution from what exists now that we say brings the clause up to date with contemporary circumstances and unlike the Full Benches that made the modern award, this Full Bench has the advantage of hearing from witnesses who have been able to provide a specific context to the industry and how the modern award operates in it. That's a matter this review that the Full Bench in the Re Four Yearly Review of Modern Awards decision emphasised was important.
PN1474
I think at paragraph 24 they specifically referred to historical circumstances being of some relevance and, likewise, they made clear that what we were doing here was to fit the modern award appropriately in conformity with the objective to the circumstances of the industries that it was regulating. In opening I think I mentioned that we were not here concerned with a template, but rather we were here concerned with a set of conditions that actually affected people’s working conditions.
PN1475
The evidence is clear on that point that a large number of employers in this industry utilised the modern award to regulate terms and conditions of employment. There are on the evidence a small number of large employers who have agreements that contain a provision of the kind made by Commissioner Blair inserted in the pre modern award and there are a number of other employers who don’t have such a clause, but below that the modern award is an actual instrument of regulation – an actual instrument of regulation.
PN1476
In my submission, that’s of some importance because what it demonstrates is there is a need to ensure that at the award level there is a proper deterrent for late payment. In paragraph 11 of the submissions, we recite some of the evidence as to the nature of the industry. That was of course prepared on the basis of the evidence at the time. Since today, you've heard a uniform explanation of the circumstances of the employees in this industry and their reliance on being paid and what flows from that. We refer you to the witness statements that explain that in some detail.
PN1477
Can I suggest that a very neat summary of the impact on employees is contained in the witness statement of Kim Law, who wasn't required for cross‑examination? She identifies in paragraph 3 that the normal pay day is Friday and that wages are paid electronically into bank accounts and then she sets out in paragraph 6 what happened when that didn't occur. She had to borrow money from friends and she identifies what kinds of things she had to borrow money for; bills, her water bill and her electricity bill and I think you heard from Mr McLean about the pay as you go electricity arrangements that occur in Tasmania and why being paid on time for these kind of employees is of some importance.
PN1478
So we are talking about workers who don’t have a great deal of capacity to absorb the impact of failure to pay on time and if it’s not clear what – the union puts forward this proposal in order to address what we say is the impact on employees being paid late. The assumption of the clause is that employees will be paid on time and the expectation as well. We say that in this industry for these employees there is an - at this proportionate effect - impact on them, if that doesn't occur.
PN1479
This clause then addresses that in a way that regulates the whole industry – in a way that ensures that employers are under no illusion about what might occur if they don’t pay on time. But as we have said, that is not something that we say is a widespread or regular practice. I don't think the evidence goes so far as to suggest that. What it does show is that it occurs. In terms of that evidence, you've heard from the witnesses, but the survey that was commissioned by the CFMEU and undertaken by the ACTU shows, for instance, that of the 433 surveyed, 102 had said they’d been paid late, which was 20 per cent of the 433. That's a raw number and you could unpack that in a variety of different ways.
PN1480
All that it shows, and it’s important to bear this in mind, is that there is an occurrence of this practice, there is an occurrence of being paid late, than there’s a practice and that when it happens there are deleterious effects on employees which may not be felt by perhaps other employees who are not as low paid as this class of employees are. Can I say the other aspect of this proposal is when you analyse the clause and employers cannot in truth come along and say that there’s some regulatory impost that is going to burden them in any particular way if the clause was adopted.
PN1481
Obviously, if the Commission can take the view that employers can be expected to organise their affairs so that they pay employees on time, there is only an impost when that doesn't occur. Putting it this way: the normal state of affairs, which the clause assumes, and in my submission the evidence supports, is that employees will be paid on time. Failure to pay on time is not, on the evidence, some systematic plan on the part of employers to avoid their obligations. When it occurs, it occurs in a sporadic unpredictable, unplanned way.
PN1482
You've heard some evidence to that effect today. I think Mr Patti said, for instance, in relation to one of the examples that he had to deal with, an employer had said that it was due to the bank on one occasion and then on another occasion said it was due to cash flow problems and they couldn't meet the payroll on that occasion. That's an example of the kind of late payment that you might expect; unplanned, unpredictable and due to a particular circumstance that might affect an employer at a particular time. Moreover, it may also be that the failure to pay is at an individual level rather than some employee wide failure. Gunns was an example where it was employee wide, but the evidence, as you can see from the survey, demonstrates that some employers employed by the same employer can recall no late payment and some employees can.
PN1483
What one can infer from that is that it can occur at an individual level. That's consistent with the character of an unplanned, unpredictable cause for these events. We accept what the Full Bench in Re Four Yearly Review of Modern Awards said about the need to justify what they termed “significant change”. It was said there that it would need to be supported by probative evidence and submissions and, in my submission, we have done that.
PN1484
Moreover, as I say in the written submissions, what is significant has to be judged in accordance with the proposal that’s put and, in my submission, what this proposal is really, when you analyse it, an evolutionary step that brings the clause up to date to reflect the contemporary circumstances in this industry.
PN1485
SENIOR DEPUTY PRESIDENT WATSON: The survey suggests, does it not, that the same incidences of late payment occurred when the award operated with a similar sort of provision as you now seek.
PN1486
MR HARDING: Yes, that’s true. The survey indicated that there were more instances of late payment after the modern award came into force than existed beforehand. When you look at the individual instance reports of late payment, more of them occurred after 2010 than occurred before 2010. The inference that we encourage the Commission to draw is that there was a consequence arising from the clause that was in the pre modern award not being replicated in the modern award. As the evidence has disclosed, a very small number of employers in this industry pay by cash or cheque. So in a real sense, clause 25.5 has very little work to do in its current form.
PN1487
We don’t press the issue much higher than that, your Honour. The figures show what they show. What you have heard from witnesses, I think Mr Patti was one example and perhaps Mr McLean as well, that when the clause was in the award, in this case the pre modern award, Mr Patti’s evidence was that it was in the award that he was dealing with for some time and I think Mr McLean said the same thing after the variation made by Commissioner Blair, they had something to go and tell employers, “Look, you might be subject to an overtime rate if you don’t pay on time.”
PN1488
I think it was Mr Patti who said that there was one employer who failed to pay three times and at least on the third occasion he pointed out that the employer was going to be subject to an overtime rate of pay if they continued to do it. That's an informal form of self help enforcement that enabled the union to go and say to employers, “Look, you've got this obligation in the award if you don’t pay on time,” and, in my submission, that assists in award compliance.
PN1489
Another piece of the evidence that came out today is that, of course, the union is not aware of all failures to pay on time. You know, many of the examples that are given by union officials are examples of large employers where they’ve been engaged industrially, but why should it depend on the exercise of industrial strength or muscle by the union to get this problem fixed? It shouldn't. A part of the purpose here is to ensure that the clause spreads across the whole industry, as it did up until the time the modern award was made, and in that way employers will know what their obligations are in a uniform way.
PN1490
SENIOR DEPUTY PRESIDENT WATSON: There seems to be a problem from the incidences that have occurred that employers may not be or aren’t aware of the requirement to pay on time.
PN1491
MR HARDING: Yes. In fairness to the employers, that might be because the modern award doesn't actually give a date.
PN1492
SENIOR DEPUTY PRESIDENT WATSON: What work does section 327 do in that regard? I’ve got the wrong one. Sorry,
PN1493
SPEAKER: 323, your Honour?
PN1494
SENIOR DEPUTY PRESIDENT WATSON: Sorry? 323? Yes, 323. No.
PN1495
MR HARDING: What it tells you is that it’s a civil penalty provision if an employer doesn't pay what’s payable for the performance of work in the circumstances covered by the clause, but, of course, it presumes that there is an underlying obligation to pay. Obviously, that’s clear from the modern award. You can imply it. But there’s nothing in the modern award that says, “You must pay wages by a day or a time.” There is an obligation to pay fortnightly or weekly. There’s an obligation to pay by cash, EFT or cheque, but there’s otherwise no obligation to pay by Friday, Monday, Tuesday or otherwise.
PN1496
I don't know whether much turns on that, your Honour. I mean, obviously employers know they have to pay wages and I don't think it’s being contended seriously that that doesn't occur.
PN1497
SENIOR DEPUTY PRESIDENT O'CALLAGHAN: Mr Harding, why wouldn't you simply seek a provision then in the award that prescribed the period or the gap between the end of the period where an employee accumulated a wage entitlement and the period of time within which that had to be paid? If such a period was defined in the award, would that not make section 323 a clear-cut issue in that case?
PN1498
MR HARDING: It might, but it doesn't resolve the problem that we've identified because 323 would then, I guess, build on or spring off that obligation to provide a clear obligation to pay in which there would be a civil penalty if the employer failed to do so, but the policy objective of the CFMEU’s proposal is to deter employers from not paying in a way that’s clear on the face of the award.
PN1499
SENIOR DEPUTY PRESIDENT O'CALLAGHAN: Yes, but the evidence of a number of the witnesses went through clear decisions that were made not to pursue prosecutions.
PN1500
MR HARDING: Yes.
PN1501
SENIOR DEPUTY PRESIDENT O'CALLAGHAN: If there was a provision of the nature that I'm talking about, would that not give the union and, indeed everybody else, some certainty in terms of the threat of prosecution?
PN1502
MR HARDING: No. In my submission, it wouldn't. Our answer to that is this that what that does is impose an obligation or an assumption on employees that they can, and have the capacity to, conduct expensive litigation to recover and penalise employers who fail to pay and, likewise, the union. These are low paid employees. It doesn't, in my submission, answer the circumstances of the industry.
PN1503
What you heard from the witnesses was, “We just want to fix it. When it occurs, we just want it to be fixed. We want the workers to be paid.” On the submission I suspect might come from at least one of the employers, “No, no, what we've got to do is we've got to issue proceedings in the Federal Circuit Court or the Federal Court and seek a penalty and then go through the process of litigating on that entitlement.
PN1504
SENIOR DEPUTY PRESIDENT WATSON: Or make the threat, as Mr Patti did in relation to the ‑ ‑ ‑
PN1505
MR HARDING: Or make the threat. Whether that’s enough, of course, is another question entirely, but the issue that’s being addressed, your Honour, is by putting a deterrence, which this industry is well familiar with based on history, we hope to prevent – we hope to prevent – late payment, to the extent that we can, rather than to punish employers for doing so.
PN1506
SENIOR DEPUTY PRESIDENT WATSON: Can you prevent a sporadic, unpredictable and unplanned incident?
PN1507
MR HARDING: It’s difficult, but you might think that two things occur; either the employer takes – for instance, if the reason was, “I don't know whether I want to pay my employees because I’ve got a cash flow problem.” They might have second thoughts about that if their wages bill goes up for failure to pay on the relevant date. That's the first thing. The second thing is that it might cause an employer who hasn't paid to get it fixed quickly.
PN1508
I think one of the things Mr McLean said in his statement is there’s no urgency; there’s no urgency and there’d be even less urgency if the only recourse was to litigate in the court. By the time the issue is done and dusted we might be 12 months hence from the time when someone wasn't paid. The firm objective is to try and ensure that it gets fixed quickly and so this is a form of self-promoting form of award enforcement. It ensures that the employer knows that there is a financial consequence which may cause it to have second thoughts, but that might not prevent a late payment caused by someone just forgetting to pay an employee or getting to pay wrong, but it might cause the employer to say, “All right. I'm going to fix this up pronto,” and so it has both those aspects to it.
PN1509
I'll take you to a case, your Honour, Senior Deputy President O’Callaghan, about that issue shortly because I think it’s an important aspect of why we say we can’t count on litigation as the means of fixing a problem like this. In our submissions on page 8, we deal with what we apprehend might be said against us, namely, that based on statements, some observations made by her Honour Gooley DP in Application by the Timber Trade Association [2013] FWC 6114, that we haven't met the evidentiary standard necessary to support this proposal.
PN1510
An observation was made by her Honour and this was, of course, not in the context of this review process that there was no evidence of a widespread failure to pay on time. What we say about that is if that is contended to be the requisite standard, it is, with respect, incorrect and ought not be applied here. The requisite standard, we say, is what’s stated by the modern award objective which is: does the proposal that we have outlined constitute a fair and relevant term of a modern award.
PN1511
We say we don’t need to show that there’s widespread practice apparent in the industry. What we do need to show, we say, is that there are examples of it occurring and that it occurs with some frequency and also that there are deleterious effects for employees when it occurs and also that the clause will have the utility that we say that it does, namely, to dissuade employers from not paying on time and also to ensure that there’s a clear incentive to fix a problem when it occurs.
PN1512
We also do rely on the compensatory justification that is often accompanied with penalty rates on the ground that there is some disability suffered by employees, as the evidence discloses, when they're not paid on time and to the extent that any penalty rate represents an assessment of that disability, we say it can be defended on that ground, albeit that’s not the principal purpose for which we contend for this proposal.
PN1513
SENIOR DEPUTY PRESIDENT WATSON: It’s the disability related to the undertaking of work, is it not?
PN1514
MR HARDING: Yes. That's traditionally how it is framed in relation to penalty rates.
PN1515
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1516
MR HARDING: I'll speak to that shortly, but the cases that have dealt with the concept of a waiting time clause have understood it as to be essentially compensatory in character.
PN1517
SENIOR DEPUTY PRESIDENT WATSON: Yes. In that they are required to ‑ ‑ ‑
PN1518
MR HARDING: Hang about at work.
PN1519
SENIOR DEPUTY PRESIDENT WATSON: ‑ ‑ ‑ continue to attend at work.
PN1520
MR HARDING: Yes, that's right.
PN1521
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1522
MR HARDING: So they're being compensated for the time they spent at work.
PN1523
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1524
MR HARDING: We say that that concept is inapt to the circumstances of these employees. We say that kept waiting is kept waiting. It has a consequence and why does it have to be limited to time at work? If you've ceased work for the day and you're kept waiting at work, what does it matter that you are at work when you've stopped and you're waiting to be paid? You could leave work and still suffer the same consequences of not being paid on time, whether or not you're there or whether or not you've left. It just, in my submission, doesn't make any sense that one should constrain the justification of these clauses to such a limited rationale, especially in circumstances where so little work is remunerated in cash these days.
PN1525
If you were to take that view, what you in effect do is to shear off all the evidence of the impacts that employees suffer as a result of late payment and so for some arbitrary reason it could only compensate for the time you wait at work. None of the cases explain why it should be limited in that way. It’s probably the case back in the day when cash was only paid as the means – when workers were only remunerated by cash that that was the consequence and so it need not be stated, but this Commission has to grapple with the facts that are currently before you about what occurs when people don’t get paid.
PN1526
SENIOR DEPUTY PRESIDENT WATSON: Does the end justify a payment to the level of waiting time at ordinary time rates up to 38 hours?
PN1527
MR HARDING: It does, but there’s no specific evidence, your Honour, that’s been led to support the particular rate and also the maximum other than history. What we say about it is the subjecting of waiting time to an overtime rate with a maximum, as we have outlined, is the historical norm that applies in this industry and that’s the basis upon which we propose it to the Commission. I don't know what evidence we could call that would support a particular formulation of 38 hours or a particular formulation of three. I concede arbitrary numbers that cap the obligation on the employer and so in that sense benefit it so that they're not confronted with an ongoing liability which is unknown to them.
PN1528
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1529
MR HARDING: It’s a safeguard.
PN1530
SENIOR DEPUTY PRESIDENT WATSON: But the evidence suggests, does it not, variable effects on employees. In the survey, one employee says, “Well, it didn't worry me, but other employees struggled.”
PN1531
MR HARDING: Yes.
PN1532
SENIOR DEPUTY PRESIDENT WATSON: That occurs throughout. In fact it’s only a minority who filled in the bank fees, late payment, et cetera, and there are yet a further number of respondents who indicate that either the bank or the employer met any financial costs.
PN1533
MR HARDING: Indeed. If it was the bank’s fault then our proposal would ensure that the employee is not subject to this penalty because, of course, we have the safeguard built in.
PN1534
SENIOR DEPUTY PRESIDENT WATSON: Not one element of the penalty. The other element of providing the cash payment.
PN1535
MR HARDING: Yes. It’s only really the EFT elements that’s relevant where it’s the bank’s fault. Cash is cash.
PN1536
SENIOR DEPUTY PRESIDENT WATSON: No, I meant the second element of that provided that the employer makes a cash payment to ‑ ‑ ‑
PN1537
MR HARDING: Yes, that’s true. Obviously, if the employer, having been told that the money is not in the bank account, it chooses to not pay then we say surely they ought not have the benefit of the bank’s error when they’re now on notice that there has been one made and the selection of 11 am on the next business day, which excludes weekends and public holidays, I might add, is intended to ensure that there’s an opportunity provided to the employer to fix it when they know it needs to be fixed and so that the employer - to avoid the disadvantage to the employees.
PN1538
So that deals with the bank example, in my submission, and we don’t cavil at all with the submission that says, “Why should the employer be the victim of a bank error?” We've dealt with that. As for other evidence from employees who said, “Well, it didn't affect me in a particular way,” I think there’s some survey responses that said, “Well, I was able to actually borrow some money from a friend,” and that might have avoided the prejudice to that particular employee.
PN1539
Of its nature, this is a proposal which is prescribing a future benefit, which is establishing a right and there were going to be - in the nature of the evidence you were going to see examples where employees will say, “No, no, I wasn't prejudiced at all,” and other examples like Kim Law who says, “Well, I was.” But that is what occurs when you prescribe a penalty in circumstances where an employer is required to do a thing and it doesn't get done.
PN1540
That wouldn't be any different in a civil proceeding for breach because it is a breach that creates the power, unlocks the power, to impose a penalty. Whether an employee is subject to any particular detriment might go to the question of what compensation would be ordered, but in the ordinary event, there would in any event be a penalty that could be imposed by the court for the breach.
PN1541
SENIOR DEPUTY PRESIDENT WATSON: Is there any possibility if you succeeded in your application and evidence emerged of errors by particular financial institutions at a cost to the employer, that an employer organisation could seek to vary the award to allow an employer to require the employee to nominate a different financial institution?
PN1542
MR HARDING: That's an interesting idea, your Honour. I haven't turned my mind to it. I can't tell you whether or not there would be power to make such a term in a modern award.
PN1543
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1544
MR HARDING: Why would that occasion arise if the employer was able to show it was the bank’s fault?
PN1545
SENIOR DEPUTY PRESIDENT WATSON: They’d still be put to the bother of paying the cash payments in the interim.
PN1546
MR HARDING: But only in circumstances in which the wage hasn't been paid.
PN1547
SENIOR DEPUTY PRESIDENT WATSON: Yes, because it was a failure of the financial institution.
PN1548
MR HARDING: Yes, that's right. If there’s a failure of the financial institution and the employer has paid the money over to the financial institution, they would be entitled to get the money back as plainly it would be paid under a mistake.
PN1549
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1550
MR HARDING: Likewise, if an employee was paid twice, then the employer would be legally entitled to recover. Nothing in the award clause that we've proposed would stand in the way of that.
PN1551
SENIOR DEPUTY PRESIDENT WATSON: What about the potential for other variations in respect to other award entitlements? We get a significant number of dispute notifications about a failure to pay superannuation, in particular industry circumstances, would the logic here applied to this claim support a similar provision in relation to that or any other range of entitlements under the award?
PN1552
MR HARDING: I couldn't deny that it might support that.
PN1553
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1554
MR HARDING: I mean, you might note on that issue, your Honour, that in attachment A to the submissions, we've identified a whole range of provisions currently in the modern awards that do what you say, that is, there is a penalty imposed.
PN1555
SENIOR DEPUTY PRESIDENT WATSON: It’s a different sort of penalty. It’s a penalty for requiring you to work beyond the time where you're allowed to have a meal break and hence you're working under conditions of not having the ability to nourish yourself whatever else one wants.
PN1556
MR HARDING: That's right. But it is still a penalty for the employer not providing a meal break without any necessary connection to ‑ ‑ ‑
PN1557
SENIOR DEPUTY PRESIDENT WATSON: It goes to the work - I mean, conditions under which the work is being done.
PN1558
MR HARDING: Yes, that's right. So it’s a disability ‑ ‑ ‑
PN1559
SENIOR DEPUTY PRESIDENT WATSON: I mean, the worst case you're starving to death and ‑ ‑ ‑
PN1560
MR HARDING: That's the disability, I suppose, and you get compensated for that by the penalty that’ s imposed.
PN1561
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1562
MR HARDING: There are other clauses here which impose a penalty for failure to give notice of a shift change.
PN1563
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1564
MR HARDING: And there are clauses which we point to which show that the penalty that we’re proposing applies for any form of – and this is the second set of tables under the heading “award clauses where an additional amount is prescribed for late payment of wages”. Some of those link it only to cash and others link it to any form of payment.
PN1565
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1566
MR HARDING: You can see one example is the Carriers Award, clause 33.
PN1567
SENIOR DEPUTY PRESIDENT WATSON: The which award?
PN1568
MR HARDING: Carriers Award.
PN1569
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1570
MR HARDING: Another example that we put in the table is the Joinery Building Trades Award 2010 and the Plumbing and Fire Sprinklers Award 2010. So this clause is not without precedent.
PN1571
SENIOR DEPUTY PRESIDENT WATSON: Yes. Some of them seem to have gone to an attempt to put the fair and relevant value on the effect on an employee.
PN1572
MR HARDING: Yes. There’s a costing of $8.85 for instance in relation to the Carriers Award.
PN1573
SENIOR DEPUTY PRESIDENT WATSON: The Racing and Greyhound Award, 3.9 per cent of standard rate, whatever that is.
PN1574
MR HARDING: Yes. I'm told that the Carriers Award is not a modern award.
PN1575
SENIOR DEPUTY PRESIDENT WATSON: No, I didn't recall that it was.
PN1576
MR HARDING: But the Joinery and Building Trades Award 2010 subjects it to an overtime rate, that is a failure to pay on time. Again, the Plumbing and Fire Sprinklers Award says that if they're kept waiting for their wages for more than quarter of an hour, 15 minutes, like ours, after the usual time of ceasing work, they must be paid the overtime work.
PN1577
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1578
MR HARDING: Likewise, the Registered and Licensed Clubs Award 2010.
PN1579
SENIOR DEPUTY PRESIDENT WATSON: What does that provide that you're given some vouchers to play the pokies while you're waiting?
PN1580
MR HARDING: For some people that might be complete compensation. What you can see is there are a variety of clauses already in instruments that adopt the approach that we've proposed, whether in full or in part.
PN1581
SENIOR DEPUTY PRESIDENT WATSON: I think I’ve interrupted you sufficiently, Mr Harding. Thank you.
PN1582
MR HARDING: You have. I'm just trying to relocate myself, your Honour.
PN1583
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1584
MR HARDING: It’s been suggested by some of the employers, I think the AIG, that our proposal would inhibit enterprise bargaining and we've responded to that in paragraphs 21 and 22. It is also suggested that somehow or other our clause as proposed would increase the regulatory burden. The AIG contends that that does so on the basis that it would require an employer to take action to ensure payment is made on time with additional regard to be had for the financial institutions, processes and clearance times. Yes, it does. Employers should be expected to pay on time. That can’t be an example of a regulatory burden, surely. The table that I’ve taken you to is supplemented by the other examples from other modern awards of kept waiting clauses that are confined to cash and cheque as identified in paragraph 24 of the submissions. In paragraph 25 there are some other examples of a penalty that would apply in the case where payment is made by EFT.
PN1585
I draw your attention to clause 19 of the Racing Industry Ground Maintenance Award 2010 which requires that:
PN1586
An employer who fails to pay by Thursday of an agreed pay date has to pay an affected employee 3.9 per cent of the standard rate per week.
PN1587
It might be that that number represents some valuation that’s been made, I don't know, but it demonstrates again that there is an understanding by the Commission that there is a need to dissuade employers from not paying wages in accordance with the intention of the award. Turning to paragraph 27 of our submissions where we deal with the issue that was raised by O’Callaghan SDP in relation to whether litigation would suffice as a means by which this problem could be cured, you can see from what we say in paragraph 27 that we disagree with that proposition for the reasons there advanced.
PN1588
I promised a case on that subject and can I draw your attention to the decision of Harrison SDP in tab 13 of Re Transport Workers (Armoured Vehicles) Award 1978. One of the issues that his Honour had to deal with – firstly, if I could draw your attention to the second page. Unfortunately, we've only got the print‑out from the Net, no paragraph numbers. But on the second page of my version - I don't know whether you're reading the same one – we get the clause from the Armoured Vehicles Award.
PN1589
MR CALVER: Sorry to interrupt my friend, your Honour, but as I mentioned earlier, this came through after close of business on Friday and we don’t have a copy so if we might just pause so we can have a look at this?
PN1590
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1591
MR CALVER: If it please the Commission.
PN1592
SENIOR DEPUTY PRESIDENT WATSON: A copy has been made available now.
PN1593
MR CALVER: Sorry to my friend.
PN1594
SENIOR DEPUTY PRESIDENT WATSON: Yes. Yes, Mr Harding?
PN1595
MR HARDING: We see the Armoured Vehicles Award, which imposes a penalty for failure to pay on time, as does the Milk Carters Award, as he sets out in the next paragraph. There’s some debate about the origins of these clauses. On my version of the report at about the fourth page in, there’s some debate about how to characterise the clause and it starts from a paragraph that starts “the references in the subclause”. Do you see that, your Honours, and Commissioner?
PN1596
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1597
MR HARDING: There’s debate about it being a penalty. In the last paragraph of the page which starts with:
PN1598
I understand and see merit in the imposition of some form of penalty upon an employer in the event that award obligations are not met. Enforcement of a breach of award for failure to pay wages and any consequential penalty would normally be through an appropriate court. Such award enforcement procedures may be unnecessarily lengthy and/or complex and if some award prescription similar to that reflected in these subclauses encouraged employers to make timely payments, such a prescription would be desirable. I'm not inclined to the view that consistent with the wage fixation principles, the provision should be – in question are allowances which constitute a reimbursement of expenses incurred.
PN1599
That was the issue that he had to deal with.
PN1600
SENIOR DEPUTY PRESIDENT WATSON: But, of course, the contrary argument there might be that had one of the prosecutions that may have been considered in the past been pursued and the employer confronted with the fines that could go up to $10,000 per instance been levied with those fines, that would be a fairly compelling precedent for people to reply upon, wouldn't it?
PN1601
MR HARDING: It may be so, your Honour. I don’t exclude that as a possibility.
PN1602
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1603
MR HARDING: But in so doing, the employee or the union would have to litigate to get that outcome and it might be that it’s actually confined to the facts of the particular case rather than set some general standard for the whole industry. The beauty of the clause that we propose is that it does set a standard for the industry. It says in very clear terms, “You've got to pay on time and if you don’t there’s an overtime rate that applies.” In a piece of litigation, say for instance the Gunns’ example that featured in the evidence, the union may have to issue proceedings and then a question would arise about the particular circumstances that Gunns faced and whether or not there would be a breach of the agreement of the award as it applied and then how then to configure that in the context of a penalty.
PN1604
Some small employer with two employees in a sawmill in the backblocks of Victoria may never hear about the case; never.
PN1605
SENIOR DEPUTY PRESIDENT WATSON: It may not be aware of any of the obligations.
PN1606
MR HARDING: Yes. Well, they might though because they ‑ ‑ ‑
PN1607
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1608
MR HARDING: I think the assumption of a modern award is that it would be complied with by any employer that’s subject to it.
PN1609
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1610
MR HARDING: And they can read what it prescribes. The question is one, I guess – it’s an assessment that has to be made. It’s a policy decision for this Full Bench about whether it is more effective to make the assumption that employees earning $38,000 or thereabouts could sue to recover their late payment and it might take some time to get that resolved, or the union do it, or whether it be better in light of the evidence of the industry to strike as a rate as we've proposed. What I say about it is that Harrison SDP is correct. What he says is correct.
PN1611
COMMISSIONER CRIBB: She.
PN1612
MR HARDING: She, I apologise. She is correct. That articulated our view of that issue. I just repeat, without going around in circles, what was said, I think by Mr Patti and Mr McLean, “All we want to do is fix it. We want it fixed quick.”
PN1613
SENIOR DEPUTY PRESIDENT WATSON: But of course the employee on 38,000 might have to take an action in the court to recover the penalty as well as the late payment.
PN1614
MR HARDING: This is not a complete and perfect solution, your Honour.
PN1615
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1616
MR HARDING: Plainly that is so, but the way in which employers – throughout award history, what has occurred is the Commission has considered what might be a good way of regulating the industry by providing incentives and disincentives for employees and employers to act in particular ways and, you know, there might be an occasion where an employer says, “Well, look, I'm not going to pay you the overtime and you can sue me.” We can’t guard against that. There’s no way we can do it.
PN1617
What we can say though is that there is a system in place to at least provide the employer with a disincentive and knowing full well that if they don’t pay on time, they are subject to that additional rate. Really, what we’re talking about here is we’re increasing the cost of labour in circumstances where – to the employer – they don’t do what’s normally required of them, pay on time. It’s a monetary incentive and like all monetary incentives, it either achieves the result, in which case employers get the problem fixed or it doesn't, in which case the employee has their remedy.
PN1618
Can I turn to the question of power, unless there’s any further questions on the issue of merit? We say these issues of power are dealt with from paragraph 28 on and there are two grounds upon which we say there’s power of the Commission to insert the proposal in the modern award. The first is pursuant to section 139 subsection (1)(e) as a penalty rate and the second ground, which we adverted to in opening, is that it could be inserted pursuant to a combination of section 139(1(a), which talks about the power to insert a minimum wage, and 142 of the Act which empowers the Commission to insert an incidental term into the award that supports a term on subject matter identified in section 139.
PN1619
In relation to it being a penalty, there are two aspects of 139 that we draw attention to. The first is that the power – and it’s to be viewed in this way – extends to terms about any of the following subject matters and then there is a list of subject matters and one can see immediately from subsection (e) that penalty rates are expressed in inclusive and non-exhaustive terms, “Penalty rates including for any of the following.” I'll go back to some cases in a minute. Suffice to say while we’re with the statute, what’s clear from the examples is that they are all examples where one might associate a penalty with work performed. (i):
PN1620
Employees working unsociable or irregular or unpredictable hours.
PN1621
And then (ii) et cetera, and that corresponds with the modern award objective in section 134 at subsection (1)(d)(a) where it talks about the need to provide additional remuneration for those examples. What’s the significance of that? The significance is that understandably, given the nature of those examples, there would need to be a connection between the penalty rate that’s struck and work performed: (1) because logically that follows from the type of subject matter that the examples are dealing with; and, probably more importantly, because that’s what the statute says, but it doesn't say that in relation to the general concept of the penalty rate.
PN1622
The penalty rate, in my submission, has its ordinary meaning and the ordinary meaning – and we set out in the submissions, but I'll hand it up – can be seen from two sources. The first is the dictionary definition that I’ve handed up and if you turn the page, penalty is defined and about three-quarters of the way down the entry for penalty is:
PN1623
Penalty rate Australia: an increased rate of pay for overtime or in recognition of abnormal conditions.
PN1624
That's the ordinary meaning. We say that finds support in the weekend rate, penalty rates case of 1947 which we have included in the materials at tab 1. In particular, I draw your Honours’ and Commissioner’s attention to page 615 of the report – actually, at first page 611 where their Honours Drake-Brockman and Sugarman JJ set out what they're proposing to do about three-quarters of the way down in the paragraph that starts:
PN1625
This Full Court has been assembled at the instance of –
PN1626
and their Honours are seeking to try and identify some principles to unify the practice of setting penalty rates in the Commission, acknowledging that rates of this kind are set in a wide variety of circumstances. Then at 615 of the judgment, about halfway down in quotation:
PN1627
“Penalty rate” is not a term of art. It is used by those skilled in industrial law in widely divergent meanings.
PN1628
Then they go on to explain that concept further. The example that they give is related to work, but all they say is:
PN1629
It is an example that accurately expresses enough the operation of the requirement of additional payment.
PN1630
So what they're talking about is: what are we talking about by a penalty. They use an example to illustrate that and the result of it is that it means some additional payment. That's all that it means. It’s an increase in labour cost which has the effect of either deterring or compensating – and as their Honours say:
PN1631
In one set of circumstances, the deterrent effect may loom large, was a policy rationale; in other circumstances, the compensation rationale might be dominant.
PN1632
Here we say it’s principally deterrent, but it could also be compensatory. We see that as a secondary purpose and principally it’s about deterrent. Clearly ‑ ‑ ‑
PN1633
SENIOR DEPUTY PRESIDENT WATSON: It relates in both cases, does it not, to the work and to going back to the first passage you read, “Work being done under special conditions of time, place and circumstance.”
PN1634
MR HARDING: I don't think it’s limited in that way. If you go on to 616 about three-quarters of the way down – sorry, there’s a paragraph that starts, “It was suggested in argument.” Then it goes on to say in the next paragraph:
PN1635
Such a test, and a satisfactory one, may, we think, be found if an award contains a prescription of conditions to be observed by the parties –
PN1636
and goes on to provide that payments are the normal –
PN1637
- to be made for work done outside the prescribed conditions, these payments may properly be regarded as a penalty rate. There are then both the express prescription and the normal course of conduct and the provision of a deterrent against infringing that prescription, which apart from special usages, are ordinarily involved in the idea of a penalty.
PN1638
So what their Honours are saying is: this is an example of how one could conceive of a penalty that answers the concept, which is:
PN1639
There are then both the express prescription of a normal course of conduct and the provision of a deterrent against infringing of that normal course of conduct.
PN1640
So the concept that’s being outlined is a normal condition and a penalty for an abnormal condition and the ordinary meaning of the phrase which I’ve handed up in the dictionary correspondents precisely with that concept. Now, penalty, as their Honours observed, can be prescribed in a wide range of circumstances and have widely divergent meanings as they mentioned and disabilities from work performed is one of them, but there are other examples and our proposal is one. We say the existing clause in the modern award is another. It’s got nothing to do with work. It’s got to do with failure to pay. That's the current award prescription and so are the examples that we have attached in attachment A, most of them, to our submissions and the examples from the modern awards that we have put in the submissions.
PN1641
SENIOR DEPUTY PRESIDENT WATSON: The fact that they're in modern awards doesn't mean necessarily they're about penalty rates. It may mean they're in there because of the incidental provisions and meet the 138 requirements of being necessary to meet the modern award objectives.
PN1642
MR HARDING: They might be. They might be.
PN1643
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1644
MR HARDING: I'm not suggesting that’s exclusively the basis upon which they're put in, but what I am saying is that these examples can be seen as penalties because what they deal with is a normal condition where they penalise an abnormal state of affairs in circumstances in which the trigger for the penalty is a normal state of affairs and that’s what our clause talks about. That's what we say their Honours were speaking about and linking it to the concept of a penalty.
PN1645
Harrison SDP in a decision that I have handed up speaks about the rate as a penalty. There is another case I have found, a decision of Wright J of the Tasmanian Supreme Court, in Emmerton v Terry. This was a case for breach of the award. You can see from the headnote:
PN1646
An award provided for payment of waiting time on failure to make payment of remuneration at a prescribed time, such payment not remuneration, but a penalty.
PN1647
On page 188 of his Honour’s reasons for judgment under the heading ground F he sets out the clause, clause 32D, which is substantially similar to the one that’s being proposed except that it fixes the rate at $6.75.
PN1648
SENIOR DEPUTY PRESIDENT WATSON: It’s a little bit different in that respect.
PN1649
MR HARDING: The concept is the same.
PN1650
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1651
MR HARDING: Yes:
PN1652
It should be noted at once that unlike the other provisions of the award which have been referred to above, this provision is directly penal in nature. It is not a provision related to a remuneration properly so called. It is simply a penalty for waiting time.
PN1653
As to how one construes a statutory provision cast in terms of section 139(1)(e) we have put in the materials the decision of the High Court in Re Gray and Others [1985] HCA 67; [1985] 157 CLR 351 at tab 14. There the High Court was dealing with a provision that defined irregularity and it’s expressed in similar terms to the provision that we are concerned with here. In the headnote it said there:
PN1654
Irregularity is defined by section 4 subsection(1) to include any act, omission or other means whereby the full and free recording of votes by all persons entitled to record votes and by no other persons is or was attempted to be prevented or hindered.
PN1655
That's the provision that’s expressed in inclusive terms. Gibbs CJ at 365 of the judgment at the top of the page:
PN1656
It would appear from the context provided by section 4(1) that the Parliament intended the definition of “irregularity” to be inclusive and not exclusive or, in other words, the definition was intended to comprehend such things as the word would ordinarily mean as well as those specifically included. Although the things specifically included in the definition are so widely defined that at first it does not seem easy to envisage other things which would not come within the specific terms of the definition, but would still be irregularities in the ordinary meaning of the word, it is possible to suggest examples.
PN1657
And accordingly his Honour does. We’re here dealing with a provision in the same terms. It says “penalty rates” and then “including these things”. The ordinary meaning of penalty is the one that I’ve advanced. Nothing in the modern award objective contradicts that. In fact, what the modern award objective says is it casts a mandatory obligation on the Commission. It says:
PN1658
The Commission must ensure that modern awards are fair and relevant.
PN1659
So if the Commission was persuaded that on its merit the clause is an appropriate one then it is one, in my submission, that would require “be included” to ensure that the modern award meets its objective to include “fair and relevant conditions”. In so doing, you could do so utilising the ordinary meaning of the penalty rate. We have included a number of cases as well. I won’t go to them in detail. They're in tabs 11 and 12. One is a decision in which I think you were involved, your Honour, Watson SDP, SDA v $2 and Under in which the continuing vitality of the weekend penalty case is apparent.
PN1660
SENIOR DEPUTY PRESIDENT WATSON: That was that famous majority decision.
PN1661
MR HARDING: Yes. In which his Honour the President was in the minority.
PN1662
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1663
MR HARDING: Firstly, his Honour the President, Giudice J, at paragraph 27 of the judgment refers expressly to the weekend penalties case, says it has significance, and then at 91 of your Honour’s and Commissioner Raffaelli, majority judgment – I was about to say minority, but in fact it’s majority. Your Honours cite the weekend penalties case for the proposition that’s advanced under the heading “rationale”. Now, admittedly, we are talking about Sunday work. I accept that. That's the context. However, the principle, the rationale, for a penalty is drawn from the weekend penalties case. In my submission, it still has continuing life.
PN1664
SENIOR DEPUTY PRESIDENT WATSON: But in that case, clearly, I’m - the one elements ‑ ‑ ‑
PN1665
MR HARDING: Yes, indeed. I think ‑ ‑ ‑
PN1666
SENIOR DEPUTY PRESIDENT WATSON: The point you're arguing here doesn't really arise in this case.
PN1667
MR HARDING: No, no. I only rely on it to say the weekend penalties case is not some case confined to history, to the dustbin of history. It was decided in 1947.
PN1668
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1669
MR HARDING: It was decided in 1947. It has continuing work to do because it supplies a rationale for a penalty; simple as that. It does so, we say, in ways that support our argument and it does so in ways that support the way in which it was dealt with in the case that I’ve just referred to. We rely on it for no more than that. Insofar as there’s cases that deal specifically with the context we’re dealing with and characterises them as a penalty, we rely on the decisions of Harrison DCP and Wright J.
PN1670
SENIOR DEPUTY PRESIDENT WATSON: Does your claim deal with Wright J’s final conclusion based on another authority that an attempt at payment - I'll just go to the words:
PN1671
A real attempt to pay, ie, perhaps miscalculating, but a real attempt sufficient to discharge the obligation payment.
PN1672
MR HARDING: That's what the authority says. It might be that that’s so in the context of an enforcement proceeding because of the bona fide attempt. I don't know. I haven't turned my mind to that question, but clearly there’s authority for that proposition and the decision I’ve handed up from Wright J.
PN1673
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1674
MR HARDING: Can I move on finally to the alternative basis - I'm conscious of the time – for power and that is the incidental power in section 142? We say there’s power in addition because it’s incidental to the minimum wages term. In that respect it’s informative to look at the context in which the clause would operate, namely – sorry, my copy of the modern award is alluding me, but it would be placed in clause 25 of that award and as I think I’ve already adverted to, what that award does is in clause 17 to prescribe wages, but nothing in clause 17 – sorry, I’ve got the wrong award.
PN1675
COMMISSIONER CRIBB: Yes, 25, I think.
PN1676
MR HARDING: Yes. Clause 17 of the modern award prescribes wages, but it doesn't say how they're to be paid, when they're to be paid. Clause 25 does that and so this clause, we would submit, is incidental in the same way that clause 25.1 is and clause 25.2 is. It’s ambulatory of the Commission’s intention to prescribe wages. Where it seems the main controversy arises is the requirement in section 142, which is that the incidental term be essential for the practical operation, on its face, a very high threshold.
PN1677
What we say about that is what is essential for the practical operation has to be viewed in the context of the statute as a whole and what is being sought to be done through this modern award. As mentioned earlier, this modern award regulates a low paid industry and in many respects if the actual statement of terms and conditions of employment.
PN1678
The essentiality is linked to the award term operating in a practical way and practical takes its colour from the circumstances of the industry about which you've heard evidence. What we are talking here about is getting the wages that the Commission intends these employees to receive into the hands of these employees.
PN1679
SENIOR DEPUTY PRESIDENT WATSON: Mr Harding, it’s not uncommon for parties under this award, and indeed others, to have a dispute about what wages or allowances are due to an employee and it’s not uncommon for those issues to be brought to the Commission. In terms of the changes that you're proposing, how do you say, or do you say to me, first of all, and if so how, this provision doesn't add in a further complication in that if there is a dispute over an entitlement to a certain wage component or classification then, presumably, the employee is not being paid that amount and then to what extent is that then covered by the provision that you now seek so there’s an added component in that dispute associated with the claim for penalty rates in addition to the amount that is being claimed?
PN1680
MR HARDING: I can see ‑ ‑ ‑
PN1681
SENIOR DEPUTY PRESIDENT WATSON: If I haven't phrased my question clearly enough, please tell me.
PN1682
MR HARDING: No, I think I understand it.
PN1683
SENIOR DEPUTY PRESIDENT WATSON: I have in the back of my mind the dispute that Mr Coates brought to me involving Carter Holt Harvey a year or so ago and there it was a claim for allowance payments that went back some years. I’d just hate to be in a position where we had significantly additional complexity associated with that issue.
PN1684
MR HARDING: That might be so. I can imagine a scenario where there might be some dispute about what amount is actually payable, but then that would be a dispute about what is bona fide payable under the award.
PN1685
SENIOR DEPUTY PRESIDENT WATSON: Yes, I understand that, but how is that addressed in your revised proposal?
PN1686
MR HARDING: Because it’s addressed in this way: all that the employer is obliged to pay under the award is the wages it’s prescribed for it, the work. If those wages are not paid on the usual pay day then an overtime rate applies. There might be a scenario, I suppose, where the employer says, “Look, you say you're owed $100 and we say you're only owed 80 and accordingly we’re only going to pay you 80,” and the employee says, “Well, you owe me an overtime rate because you haven't paid the remaining 20.” Then that comes down to a question about whether or not the employee was as a fact bona fide entitled to the wages that he or she has claimed.
PN1687
In those circumstances it would be, I would suggest – a court would be slow, because I think was the case in the decision that Wright J dealt with, to hold that - merely because an employee says they're owed X that that is itself the trigger for the obligation. There would have to be an assessment about what is genuinely owed under the award or not and it would only be what is genuinely owed that would trigger the obligation otherwise you would have scenarios, I suppose, where an employee is paid more than they're entitled to, in which case there would be an inequitable case that the employer has to resist. Does that address your Honour’s question?
PN1688
SENIOR DEPUTY PRESIDENT WATSON: Yes, thank you.
PN1689
MR HARDING: Just going back to the issue of what’s practical and how it operates in a practical way, like clause 25.1 and two, our clause contributes to the minimum wage obligation operating in a practical way for this industry. That's the first point. The second point is that, as I’ve mentioned before, our proposal builds on what is already there. In other words, the Commission when it made the modern award can be taken to have assumed that a late payment clause for keeping employees waiting, as it’s currently expressed in clause 25.5, was essential for the practical operation of the award.
PN1690
If you agree with our submission, that is that our proposal builds on what is already there to make the clause operate in a way that sounds in the contemporary circumstances as industry, it must follow that it’s necessary or essential for the clause to be in there to ensure that the minimum wage term operates in a practical way. If that was the source of power under which clause 25.5 made its way into the modern award in the first place, and that’s not clear from the authorities whether that was so, but it’s supportable on that basis and as the Full Bench in Re Four Yearly Review of Modern Awards said:
PN1691
You can make the assumption that when the modern award was made it met the modern award objective.
PN1692
The third aspect I draw attention to is what I’ve said about the words “must ensure” in section 134. The focus of the Full Bench in this review is to ensure, to be satisfied, that the modern award does provide fair and relevant minimum safety nets and if you are so satisfied then you have to make it, in my submission, in order to achieve the modern award objective. If you don’t, how can you be satisfied that you've ensured that the award does contain the objective it intends? Unless the Bench has any further questions, they're the submissions for the CFMEU.
PN1693
SENIOR DEPUTY PRESIDENT WATSON: Just one question. Going to your wording at 25.5A, an employee is paid wages, kept waiting for their wages, is there any uncertainty as to what wages means in that context, wages in full, or some part of their wages ‑ ‑ ‑
PN1694
MR HARDING: It’s a factual question.
PN1695
SENIOR DEPUTY PRESIDENT WATSON: ‑ ‑ ‑ and referrable to section 323, the amounts payable at the relevant period include bonuses, loadings, monetary allowances, overtime penalty rates and leave payments? Is the intention that wages be any wage or any failure to pay part of the wage due would require the penalty?
PN1696
MR HARDING: I’d have to say it’s intended to address the wages that are due in full. That's inherent in the concept of being kept waiting to be paid. It would be an odd result, in my submission, if the employer could substantially comply by paying part of the wages and then say, “Well, we've given you half of them. We’re not liable for the overtime rate.” To my mind, that doesn't answer the factual question posed by the proposed clause which is, “Have the employees been paid their wages?”
PN1697
I can see a scenario along the lines identified by Wright J in citing authority where their Honours held:
PN1698
In similar circumstances, the employer pays the employee the full amount, which is believed to be payable, or that may turn out to be less than the full amount due if there had been a real payment and the employee has been paid within the meaning of the clause.
PN1699
I don’t wish to be heard to say that that case governs the interpretation of this clause because in a particular set of enforcement circumstances, it may not, but at least that was one approach that was advanced to deal with the factual question where there was a dispute over what was due. It would be difficult, I would think, to craft a term for award purposes that would permit the employer to pay less than wages because the award says, “You shall pay wages of a particular amount at a particular time for particular work and you shall pay them weekly or fortnightly.” It doesn't go higher than that. It would be odd for it to be couched in different terms.
PN1700
SENIOR DEPUTY PRESIDENT WATSON: Yes. Does C1, the exemption there, have removed from the penalty, an employer in a circumstance where they have a policy requiring the submission of a time sheet by a certain time for payment of overtime by the pay period, but an employee fails to submit the time sheet by that date?
PN1701
MR HARDING: It may well do.
PN1702
SENIOR DEPUTY PRESIDENT WATSON: It may well do, yes; not entirely certain.
PN1703
MR HARDING: Your Honour, I'm not sure that I have the instructions to be certain.
PN1704
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1705
MR HARDING: What it says is what is says.
PN1706
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1707
MR HARDING: It says:
PN1708
An employer’s failure to take any step or perform any requirement within its control.
PN1709
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1710
MR HARDING: It’s linked to what is in the hands of the employer to do.
PN1711
SENIOR DEPUTY PRESIDENT WATSON: So you impose an obligation on an employee to do a certain thing by a certain date and it’s beyond their control if the employee doesn't do that.
PN1712
MR HARDING: The scenario that you point to may well be correct, without wishing to be held to it.
PN1713
SENIOR DEPUTY PRESIDENT WATSON: ye.
PN1714
MR HARDING: All I can do is to point out what the words say and to say that the intention expressed in (i) is to oblige the employer to say, if it hasn't paid wages on time, why; if it wishes to avail itself of (i).
PN1715
SENIOR DEPUTY PRESIDENT WATSON: Perhaps they might utilise that as a necessary step within its control to ask employers to use a different financial institution.
PN1716
MR HARDING: It might. See, there’s all manner of things.
PN1717
SENIOR DEPUTY PRESIDENT WATSON: Yes, very well.
PN1718
MR HARDING: And this might keep us going for a little while. I guess the point being, it’s important to understand, your Honour, what we’re doing is we’re trying to address the situation on the facts as we see them now. I could envisage a situation in which we've used the words “usual pay day” there might be some ambiguity about how that actually works in practice, in which case we might have to make another application.
PN1719
On the current evidence, what we can say is that the normal pattern in this industry is that workers get paid on a date and they're usually paid on that date and we expect that that usual pattern of conduct would continue. The Act, I think you're referring to in section 323, would oblige them to pay the wages for which they’ve performed work in full. So there’s a set of circumstances which combine, I think, to make it certain what the intention of the award term is. As a factual question – as a factual question – we apprehend there will be as a fact a usual pay day and that might be for one employer, Fridays; it might be for another employer on Tuesday, but unless we start prescribing a uniform pay day for the whole industry in the award which would then trigger a potential overtime obligation, even though the employer has configured their pay arrangements around another day with the unintended consequence that they're suddenly liable for something which their systems have not been geared up and we don’t want to impose that result in the industry, hence that’s why it’s been couched in terms of the usual pay day and that’s a factual question.
PN1720
SENIOR DEPUTY PRESIDENT WATSON: Yes, very well. Is there anything further?
PN1721
MR HARDING: No, your Honour.
PN1722
SENIOR DEPUTY PRESIDENT WATSON: I'm comforted by the fact that there’s no six-year review in part 2(3) of the Act. Who’s going to lead off?
PN1723
MS GHERJESTANI: Your Honour, it’s ‑ ‑ ‑
PN1724
SENIOR DEPUTY PRESIDENT WATSON: I'm sorry. It’s our Melbourne centre of nature. I’ve ignored you in Sydney. Go ahead.
PN1725
MS GHERJESTANI: Your Honour, the AWU strongly supports the variations being sought by the CFMEU. We submit that the proposed variation by the CFMEU is necessary as it ensures that the award includes late payment of wages provision that are relevant to the industry and reflect the most common method of payment, which is electronic funds transfer. The variations as proposed by the CFMEU have been reinforced by comprehensive written and oral submissions as well as probative evidence, therefore, we support those submissions and we do not have anything additional to add.
PN1726
SENIOR DEPUTY PRESIDENT WATSON: Mr Astley, did you have anything?
PN1727
MR ASTLEY: Yes. The AMWU just wishes to support the submissions of the CFMEU and we’d also like to support the written submissions of the AWU as well.
PN1728
SENIOR DEPUTY PRESIDENT WATSON: Good, thank you, Mr Astley. Yes, Mr Ferguson?
PN1729
MR FERGUSON: Look, the employers proposed having some discussions about how best to proceed this afternoon with the time remaining.
PN1730
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1731
MR FERGUSON: One of the difficulties is that we think on any estimation of how long we’re going to take, the employer parties will be more than two hours responding. I think Mr Izzo’s estimate is that he himself would be an hour and a quarter, or thereabouts, and I think my friend from the Master Builders would be another hour. The difficulty we've got is that’s then going to take us beyond the state of play today, I would imagine, before we even get to reply.
PN1732
SENIOR DEPUTY PRESIDENT WATSON: It would take us beyond any reasonable hour today.
PN1733
MR FERGUSON: Yes, sir. Coupled with that issue is, of course, we have had a significant amount of new argument put before us in relation to some of these issues and that’s not a criticism of my friend, but it may be that the convenient way to deal with these issues is to now give the employer parties some time to deal with the written submissions that we've received today and to reconvene on another day to hear the balance of the arguments, both from the employers, and the replies.
PN1734
Putting aside, perhaps we could deal with the outstanding issue in relation to ordinary hours and take that to conclusion today, it’s just that realistically we’re not going to get this finished today.
PN1735
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1736
MR FERGUSON: I know that’s imposing upon the Bench. We’re open, of course, to – we want to circumvent how long the next day takes us – some short timetable of additional written replies so that that could be faster, but we’re not going to get it done today, your Honour.
PN1737
SENIOR DEPUTY PRESIDENT WATSON: Yes, very well. Do you want to say anything in relation to that, Mr Harding?
PN1738
MR HARDING: Yes, I do. I neglected to mention it at the end of my submissions. It will be very brief, though.
PN1739
SENIOR DEPUTY PRESIDENT WATSON: Sorry?
PN1740
MR HARDING: It will be very brief.
PN1741
SENIOR DEPUTY PRESIDENT WATSON: Your reply?
PN1742
MR HARDING: Are you referring to the ‑ ‑ ‑
PN1743
COMMISSIONER CRIBB: Yes, it you two might be at cross purposes. Are you asking about the further progression?
PN1744
MR HARDING: Is there any objection to ‑ ‑ ‑
PN1745
SENIOR DEPUTY PRESIDENT WATSON: The proposition that we fix another day for hearing the ‑ ‑ ‑
PN1746
MR HARDING: I do have some objection to that, your Honour. I mean, we’ve come here today on the basis that we'll be leading some evidence and then some submissions. We provided a written submission in order to expedite it and that implies – which addresses their submissions – let’s have another go at written submissions. I mean, it strikes me that we ought to just deal with it and get it done and dusted today.
PN1747
SENIOR DEPUTY PRESIDENT WATSON: We can continue till 3.30, as we indicated. We’re plainly not going to conclude in that time. That's the problem that we have.
PN1748
MR HARDING: In my submission, we ought to continue and then exhaust the time that we have.
PN1749
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1750
MR FERGUSON: We note we’re not wedded to the idea of further written submissions. We just thought that might expedite things.
PN1751
SENIOR DEPUTY PRESIDENT WATSON: I'm sorry?
PN1752
MR FERGUSON: We’re not wedded to the option of having an ability to put on further written submissions. We’re happy to just come back another day and do it through oral submissions. We thought that might assist the ‑ ‑ ‑
PN1753
SENIOR DEPUTY PRESIDENT WATSON: Sorry. You were proposing written submissions?
PN1754
MR FERGUSON: We were proposing another day, at the very least, be set aside for further oral submissions and we were suggesting that it might be of benefit to allow us to put on further written submissions as well just to expedite the conduct of that day in the same way that the union has today turned up with additional written submissions ‑ ‑ ‑
PN1755
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1756
MR FERGUSON: ‑ ‑ ‑ notwithstanding there was no direction for that.
PN1757
SENIOR DEPUTY PRESIDENT WATSON: So you could go as far as you could today.
PN1758
MR FERGUSON: The only difficulty is my friend will be on his feet and halfway through dealing with a range of arguments that were raised for the first time, including significant arguments about, for example, the power to include these sorts of terms in awards. It just seems somewhat unfair to us to be put to the task of being halfway through our submissions before ‑ ‑ ‑
PN1759
SENIOR DEPUTY PRESIDENT WATSON: Sorry. The power to deal?
PN1760
MR FERGUSON: The power to include provisions about late payments in awards. None of that was raised, from memory, in the union’s original material. That's all new today.
PN1761
SENIOR DEPUTY PRESIDENT WATSON: I think it was raised in the written submissions, was it not?
PN1762
MR FERGUSON: I don't know that it was. It certainly wasn't fully developed in the written submissions. We were sort of wondering on what basis they were going to assert these provisions could be included in awards. Certainly, their submissions are developed well beyond their original material, but be that as it may, I raised it merely as an issue of timing, to be frank.
PN1763
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1764
MR FERGUSON: We’re not going to be able to deal with all of this.
PN1765
SENIOR DEPUTY PRESIDENT WATSON: You're not going to be able to conclude today, that’s ‑ ‑ ‑
PN1766
MR FERGUSON: No.
PN1767
SENIOR DEPUTY PRESIDENT WATSON: We might adjourn for five minutes.
SHORT ADJOURNMENT [2.55 PM]
RESUMED [3.08 PM]
PN1768
SENIOR DEPUTY PRESIDENT WATSON: Yes, we’ve decided that we will list a further morning for hearing of this matter, being commencing 10 am on Thursday, 23 April. We’d indicate that Full Bench has difficulties beyond 1 pm and that date will be necessary to avoid conflicting with the six year review, if one is implemented. What we would ask is that the employer organisations put on written submissions, filed by, say, close of business on the 20th, and avoid simply reciting those submissions when the arrive here. If it is at all possible, if the employer organisations could consolidate common submissions to avoid repetition between them of the same points, that would be of considerable assistance. I can assure you, on behalf of the Full Bench as a whole, that repetition doesn’t add any value to a submission put to us. So we will sit again at 10 am on the 23rd on the basis that we’re constrained by a 1 pm finish. We would hope to conclude written submissions of the employer and your reply submissions. If there needs to be a discussion between the parties to accommodate that, that would be good.
PN1769
I was, as a final issue, going to ask Mr Ferguson whether he is in a posit8ion at all to provide any further information in relation to the clause 12/27 variation that the employer is suggesting at this time, but I notice Mr Harding is seeking to get to his feet before I mention that.
PN1770
MR HARDING: No, I wasn’t, your Honour. I think where we left things; Mr Ferguson had opposed a change to the overtime provision in the modern award.
PN1771
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1772
MR HARDING: We are happy to deal with our response to that now or, alternatively, it could be left to the new date on the 23rd.
PN1773
SENIOR DEPUTY PRESIDENT WATSON: I think it would be useful, frankly, if we were able to deal with that as far as we can within the remaining 20 minutes. That will free things up a little for the 23rd. Yes. So I should hear from you first.
PN1774
MR HARDING: Yes, probably. I understand the submission that is being put and the proposal that is being put, and I think our position about it is reasonably straightforward. Bear with me for a moment, your Honour, I’m just trying to get my hands on a copy of the award; mine has disappeared.
PN1775
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1776
MR HARDING: Clause 30.1(a) has two criteria already in it as the trigger for overtime linked to clause 27, which prescribes the ordinary hours. As I apprehend the proposal, all of that would be replaced with a prescription that says any time worked outside the ordinary hours, as determined in accordance with this award, would be subject to overtime. My concern and the concern of the unions is this has the potential to diminish existing entitlements because it would wipe away the second limb of the overtime arrangements currently in force, namely, time in excess of the ordinary daily number of hours.
PN1777
Under clause 27.2 there is plainly a possibility for ordinary daily hours under the spread of hours, as articulated in 27.2(a) and also, by agreement, in 27.3(a). So I guess our concern here is that there is a potential for unintended consequences if we were to simply abolish the existing prescriptions and replace them with some general overarching overtime clause that requires reference to the award as a whole. So apprehended, it is to be as determined in accordance with this award, whereas clause 30, in its current form, is quite specific.
PN1778
SENIOR DEPUTY PRESIDENT WATSON: Sorry, the current clause 30 - - -
PN1779
MR HARDING: Point one.
PN1780
SENIOR DEPUTY PRESIDENT WATSON: In that it refers to the spread of hours and ordinary time daily hours.
PN1781
MR HARDING: Well, it has got two hasn’t it? It has got outside the spread of hours prescribed in clause 27 or in excess of the ordinary daily number of hours prescribed in clause 27.
PN1782
SENIOR DEPUTY PRESIDENT WATSON: And that is not picked up in clause 27, both of those elements?
PN1783
MR HARDING: It is probably fair to say that there is nothing in clause 27 in its current form that specifically states what the ordinary daily number of hours would be.
PN1784
SENIOR DEPUTY PRESIDENT WATSON: I see.
PN1785
MR HARDING: Our proposal would ensure that occurs by establishing a measure by which that can be determined. So what we say is that - - -
PN1786
SENIOR DEPUTY PRESIDENT WATSON: So the gap identified by the award brief remains, is what you are putting.
PN1787
MR HARDING: Yes, precisely.
PN1788
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1789
MR HARDING: And I understand Mr Ferguson says all that technically can be swept away by simply putting in something that says time in excess of ordinary hours worked, in accordance with the award, and that would suffice to deal with our concern and achieve some level of simplicity. But I think our concern is that that has the potential to diminish existing entitlements, whereas ours preserves it.
PN1790
SENIOR DEPUTY PRESIDENT WATSON: Yes. That’s an unintended consequence, you say, of the same type that the employers expressed about your original proposal, which led you to (indistinct).
PN1791
MR HARDING: Yes. We saw a gap.
PN1792
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1793
MR HARDING: And we specifically plugged that specific gap.
PN1794
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1795
MR HARDING: As Mr Ferguson puts it, he proposed to plug that specific gap with general words that may, in fact, have the consequence of diminishing an existing entitlement. Now, I don’t think that is his intention.
PN1796
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1797
MR HARDING: I say that in favour of Mr Ferguson: I don’t think that is his intention. He might correct me and if it is, we’ve got a serious problem, but I think that might be an effect.
PN1798
SENIOR DEPUTY PRESIDENT WATSON: Well, I suspect there are good intentions on this clause by both sides and it may be before you resume on the 23rd that that goodwill can find itself in a formulation that both sides find acceptable. Do you want to say anything at this point, Mr Ferguson?
PN1799
MR FERGUSON: It would perhaps benefit to articulate some of our logic and our understanding of this clause and then we can still have discussions in the intervening period.
PN1800
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1801
MR FERGUSON: We don’t agree with the interpretation that is being placed on 30.1(a). There are, if you will, two elements to it when you read the paragraph as a whole, both of which rely on what is prescribed by 27 to have any effect. Now, the first, of course, is that all time worked by employees outside the spread of hours prescribed by 27 (indistinct) will be overtime.
PN1802
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1803
MR FERGUSON: And if you go to 27, that is nothing unusual about that sort of provision.
PN1804
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1805
MR FERGUSON: Assumedly, picking up the 6.30 am to 6 pm reference. Now, the second set of words is more unusual for an award, the reference to ordinary daily number of hours, but what is not unusual is to say that overtime is hours outside of the ordinary hours, as prescribed by the award.
PN1806
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1807
MR FERGUSON: Now, I think what this wording, perhaps inelegantly, perhaps inaccurately, is trying to do, is say that the hours outside of the ordinary hours prescribed by 27 are overtime and albeit, that may apply on a daily basis. Now, if you go to 27 what you have is options for arranging ordinary hours, if you look at 27.2(a).
PN1808
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1809
MR FERGUSON: And there will be different methodologies that can be put in place and there is nothing unusual about the award leaving that to the parties or the employer to set.
PN1810
SENIOR DEPUTY PRESIDENT WATSON: That’s correct.
PN1811
MR FERGUSON: Once those methods are in play, then the hours outside of that arrangement will be overtime, admittedly on a daily basis. Now, what we’ve tried to do is adopt a form of words that is consistent with the approach in the act and more consistent, in our view, with the general approach taken in awards to say that hours outside of the award defined ordinary hours or determined in accordance with the award will be overtime. And of course, we use that language because that is the approach adopted in section 147, which is the section that deals with the requirements for awards to either specify or provide for the determination of ordinary hours of work. And we say what this award does is provide the parameters, if you will, for determining it. Now, we don’t say anything is taken away because, to be frank, you can’t point to anything that has been taken away in 27.
PN1812
SENIOR DEPUTY PRESIDENT WATSON: But there is no prescription, is there, of the ordinary daily hours in clause 27.
PN1813
MR FERGUSON: It is where you read the methods of arranging ordinary hours. I think it does. There is no specification. To be very clear, there isn’t. It doesn’t say the hours will be this hour to this hour or anything like that. It provides how you can have the ordinary hours of work arranged. So there is a specification in that it is one of the following matters – it is a prescription in the sense it is one of the following matters that can be arranged, but you’re right, there isn’t one set number of daily hours. The award is different to many awards in that it doesn’t say.
PN1814
SENIOR DEPUTY PRESIDENT WATSON: The CFMEU current proposal doesn’t propose a set number on any particular day but rather, the average.
PN1815
MR FERGUSON: Well, I don’t know what it proposes, to be honest. I can’t understand it.
PN1816
SENIOR DEPUTY PRESIDENT WATSON: The hours within whichever work cycle is chosen.
PN1817
MR FERGUSON: But what work cycle? The employee’s work cycle? The work cycle of the majority of employees? The work cycle of one particular group? We need to remember, 27.2 says different methods of implementation of a 24 hour week may apply to various groups or sections of employees.
PN1818
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1819
MR FERGUSON: I don’t know what it means.
PN1820
SENIOR DEPUTY PRESIDENT WATSON: Perhaps this is a matter that the parties should have some further discussion about, but having regard to the terms of 30.1, which reference payment of overtime to hours in excess of the ordinary daily number of hours and, as the award brief noted, the absence of any specification of that in clause 27.
PN1821
MR FERGUSON: And I understand that.
PN1822
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1823
MR FERGUSON: And I understand that.
PN1824
SENIOR DEPUTY PRESIDENT WATSON: Yes.
PN1825
MR FERGUSON: But as I said, this is where our cure is to the wording there, the unusual wording of the overtime provision, rather than to take the radical step of changing the ordinary hour of work provisions. And I understand that it is an issue for award and I can understand that because the wording doesn’t line up; one makes reference to something that just doesn’t exist. We can have discussions about it, but I think the hardest step is to try and set the number of daily hours, because if there isn’t any in the award, there just isn’t, and it's a radical thing to try and say that there will be a number. We would just be plucking it from thin air, to be frank.
PN1826
SENIOR DEPUTY PRESIDENT WATSON: Yes. It is perhaps left to the parties at this stage to see whether they can come up with a common set of words. From my own perspective, I don't speak to the rest of (indistinct) the award brief has identified a gap and I think it needs to be plugged in some way.
PN1827
MR FERGUSON: We agree that there is an issue.
PN1828
SENIOR DEPUTY PRESIDENT WATSON: Yes. Very well. On that note we might then adjourn until 23 April.
ADJOURNED UNTIL THURSDAY, 23 APRIL 2015 [3.21 PM]
LIST OF WITNESSES, EXHIBITS AND MFIs
EXHIBIT #CFMEU2 MR LAWSON'S STATEMENT................................. PN1017
EXHIBIT #CFMEU3 MR COTRONEO'S STATEMENT............................ PN1017
EXHIBIT #CFMEU4 MR LAW'S STATEMENT.......................................... PN1017
EXHIBIT #CFMEU5 MS FINNIGAN'S STATEMENT............................... PN1017
JANE ROSAMUND CALVERT, SWORN..................................................... PN1019
RE-EXAMINATION BY MR HARDING....................................................... PN1021
EXHIBIT #CFMEU6 REORDERED SPREADSHEET RE THE SURVEY, REORDERED BY EMPLOYER........................................................................................................ PN1084
EXHIBIT #CFMEU7 SPREADSHEET CONTAINING INFORMATION ABOUT AGREEMENT............................................................................................................................... PN1084
FURTHER CROSS-EXAMINATION BY MR IZZO.................................... PN1095
THE WITNESS WITHDREW.......................................................................... PN1109
SCOTT ANDREW MCLEAN, AFFIRMED................................................... PN1111
EXAMINATION-IN-CHIEF BY MR HARDING.......................................... PN1112
EXHIBIT #CFMEU8 STATEMENT AND ATTACHMENT A OF SCOTT ANDREW MCLEAN............................................................................................................................... PN1122
CROSS-EXAMINATION BY MR IZZO......................................................... PN1174
CROSS-EXAMINATION BY MR CALVER................................................. PN1200
RE-EXAMINATION BY MR HARDING....................................................... PN1210
THE WITNESS WITHDREW.......................................................................... PN1228
JOE PATTI, SWORN......................................................................................... PN1231
EXAMINATION-IN-CHIEF BY MR HARDING.......................................... PN1232
EXHIBIT #CFMEU9 STATEMENT OF JOE PATTI................................... PN1245
CROSS-EXAMINATION BY MR IZZO......................................................... PN1298
CROSS-EXAMINATION BY MR CALVER................................................. PN1323
RE-EXAMINATION BY MR HARDING....................................................... PN1334
THE WITNESS WITHDREW.......................................................................... PN1339
BRADLEY JOHN COATES, AFFIRMED..................................................... PN1350
EXAMINATION-IN-CHIEF BY MR HARDING.......................................... PN1351
EXHIBIT #CFMEU10 STATEMENT AND ATTACHMENTS OF MR BRADLEY COATES............................................................................................................................... PN1363
CROSS-EXAMINATION BY MR IZZO......................................................... PN1407
CROSS-EXAMINATION BY MR CALVER................................................. PN1420
THE WITNESS WITHDREW.......................................................................... PN1437
EXHIBIT #CFMEU11 VARIOUS MATERIALS........................................... PN1455
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