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Fair Work Commission Transcripts |
TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009
JUSTICE BOULTON, SENIOR DEPUTY PRESIDENT
DEPUTY PRESIDENT KOVACIC
COMMISSIONER BULL
s.156 - 4 yearly review of modern awards
Four yearly review of modern awards
(AM2014/190)
Sydney
10.09 AM, MONDAY, 25 MAY 2015
Continued from 02/04/15
PN1655
JUSTICE BOULTON: Good morning. Now what's the order in which we're going to hear the - - -
PN1656
MR CALVER: Sorry, your Honour, before you proceed.
PN1657
JUSTICE BOULTON: Yes.
PN1658
MR R CALVER: If I might make a change of appearance. Calver, initial R, for Master Builders Australia. On the last occasion we were represented by Mr Ward. If it pleases the Commission.
PN1659
JUSTICE BOULTON: Good, thank you Mr Calver.
PN1660
MR T BOURGEST: Your Honour, in similar vein my name is Bourgest initial T. I seek leave to appear on behalf of the forestries and furnishing products division of the CFMEU, previously represented by Ms Starr.
PN1661
JUSTICE BOULTON: Yes.
PN1662
MS A MOUSSA: Your Honour, I would like to also file a change of appearance for the Australian Manufacturing Workers Union vehicle division. My name is Moussa, initial A, and I appear on behalf of that division.
PN1663
JUSTICE BOULTON: Yes, thank you.
PN1664
MR WARD: Your Honour, my appearance has also changed. I appear - - -
PN1665
JUSTICE BOULTON: Yes, you're (indistinct).
PN1666
MR WARD: I've lost my brief from the MBA. I think they'll pay the bills. We'll wait and see. But I appear for the Australian Chamber of Commerce and Industry and I also appear for Australian Business industrial and the New South Wales Business Chamber Limited.
PN1667
JUSTICE BOULTON: Thank you.
PN1668
MR CHESTERMAN: Your Honour, I'd just like to add an appearance. Mr Bangan, A, from the Motor Trades Association of New South Wales. Unfortunately he has a prior commitment but asked me to enter an appearance on his behalf. If the Commission pleases.
PN1669
JUSTICE BOULTON: Good, thank you Mr Chesterman. Yes, now are we hearing the AWU witness or the AiG witness first?
PN1670
MS STARR: Your Honour, Mr Walton we understand isn't being called for cross‑examination so we thought just in finalising the unions' witness evidence Mr Crawford will seek to tender that final statement, and then following that we will deal with Ms Brown, the Australian Industry Group's witness.
PN1671
JUSTICE BOULTON: I see. So you just want me to mark the statement, do you?
PN1672
MS STARR: I understand that the Ai Group may have some objections to the content of that.
PN1673
MR CRAWFORD: Well, it's a new statement. It's a new statement.
PN1674
MR CRAWFORD: Do you want me to?
PN1675
MS STARR: Sorry. Thank you.
PN1676
MR CRAWFORD: Your Honour, I have an amended version of Mr Walton's statement to hand up. A couple of paragraphs we agreed to withdraw after discussions with AiG.
PN1677
JUSTICE BOULTON: Yes. Do I understand that he's not being called and there is no cross‑examination?
PN1678
MR CRAWFORD: Yes, your Honour. I'm seeking to have the amended statement marked please?
PN1679
JUSTICE BOULTON: Right, yes, and there's no objection to that being marked?
PN1680
MR CRAWFORD: That's my understanding.
JUSTICE BOULTON: It will be AWU 11.
EXHIBIT #AWU11 AMENDED WITNESS STATEMENT OF MR WALTON
PN1682
MR CRAWFORD: Thank you.
PN1683
JUSTICE BOULTON: Mr Ferguson?
PN1684
MR FERGUSON: Yes, your Honour, now I call Tracey Brown.
PN1685
THE ASSOCIATE: If you could please state your full name and address?
MS BROWN: Tracey Mary Brown (address supplied).
<TRACEY BROWN, AFFIRMED [10.14 AM]
EXAMINATION-IN-CHIEF BY MR FERGUSON [10.14 AM]
PN1687
JUSTICE BOULTON: Yes, please be seated Ms Brown.
PN1688
MR FERGUSON: Morning, Ms Brown. Now can I ask have you prepared a statement for the purposes of these proceedings?‑‑‑Yes.
PN1689
And do you have a copy of that statement with you?‑‑‑I do.
PN1690
Are there any amendments you want to make to that statement?‑‑‑No.
PN1691
It's true and correct?‑‑‑It is.
PN1692
To the best of your knowledge?‑‑‑Yes.
PN1693
Yes, I tender that statement.
PN1694
JUSTICE BOULTON: I think that's the first of the AiG exhibits.
PN1695
MR FERGUSON: It is.
*** TRACEY BROWN XN MR FERGUSON
PN1696
JUSTICE BOULTON: Yes.
PN1697
MR FERGUSON: It is.
JUSTICE BOULTON: Exhibit AIG 1.
EXHIBIT #AIG1 WITNESS STATEMENT OF TRACEY BROWN
PN1699
MR FERGUSON: I just have some additional follow-up questions, your Honour? I just have some additional follow‑up questions.
PN1700
JUSTICE BOULTON: Yes.
PN1701
MR FERGUSON: Ms Brown, I take you to your statement if you've got a copy of it there?‑‑‑Yes.
PN1702
In paragraphs 1 to 8 you speak of your past experience and present role at Ai Group. Do you have any qualifications that are relevant to your work?‑‑‑I do. I have a Bachelor of Business in Personnel Management, a Graduate Diploma of Occupational Hazard Management and a Master of Applied Science in OHS.
PN1703
In the course of that graduate diploma did you do any work or undertake any projects that are relevant to the relationship between workers compensation premiums and OHS outcomes?‑‑‑I did. The last unit in the graduate diploma is a dissertation which is a major piece of work assignment, and the focus that I had there because of my special interest in workers compensation was to look at the impact of workers compensation premiums on driving health and safety improvements in workplaces.
PN1704
And in your current role do you give advice to employers regarding what obligations they might have to pay accident make-up pay?‑‑‑I do. I provide advice on a broad range of workers compensation issues and accident make‑up pay is often one of those areas.
PN1705
And in the past have you had experience calculating accident make‑up pay entitlements?‑‑‑I have. In my previous roles in manufacturing I was either directly involved in payments of workers compensation and accident pay or overseeing people who were doing that within the organisation.
*** TRACEY BROWN XN MR FERGUSON
PN1706
And based on your practical experience applying the provisions of awards is it your understanding that, take for example the employment provisions of the old Metals Award, that you need to know what state an employee is employed or working in, in order to determine whether they have an entitlement to accident pay?‑‑‑You need to understand which state they're in to know whether they have an entitlement to workers compensation and what the weekly payments are for workers compensation in that state, and you need that information before you could apply the accident pay provisions.
PN1707
And why is that?‑‑‑Because the accident pay provisions are directly linked to what the person's receiving for weekly compensation.
PN1708
And is it relevant to understanding someone's entitlement under the workers compensation laws?‑‑‑Yes, because if you don't know that first then you can't determine accident pay.
PN1709
Based on your understanding is it necessary to understand what state a person is employed in, in order to determine whether or not they have an entitlement under the workers compensation legislation?‑‑‑Yes, and the workers compensation legislation has provisions around a terminology called state of connection which determines where a person will get their workers compensation entitlement from.
PN1710
Can you explain to the Commission how those - or your understanding of how those provisions operate?‑‑‑Yes, basically they operate from the perspective that the first test is where does the person usually work and then if you can't determine where the person usually works you look up where is the person usually based, and in the very rare circumstances where you can't determine it from that then you do it from looking at where is the principal place of business of the employer.
PN1711
And when you say - I withdraw that. Now you've provided evidence regarding the operation of the various workers compensation schemes and at paragraphs 12 and 13 - I'll just take you to those - you refer specifically to the mutual obligation of employees to cooperate and participate in rehabilitation and return to work. why is it important that employees are encouraged to cooperate in relation to rehabilitation and return to work?‑‑‑There's a lot of evidence that indicates that getting back to work quickly is the best outcome for someone who has been injured at work, and it may not be the first thing that somebody I thinking about when they've been injured. They have a lot of interaction with GPs and other influential people who might be talking about the importance of staying off work, and it really is important for there to be incentives there which are about helping the person to get back to work, which will give them the best possible outcome long term.
*** TRACEY BROWN XN MR FERGUSON
PN1712
And do all employees always cooperate fully with their obligations?‑‑‑Sorry, could you ask that again?
PN1713
Do all employees always cooperate fully with their obligations in terms of - - -?‑‑‑No, not all employees do always cooperate fully. The majority of injured workers are keen to get back to work but for various reasons there might be some barriers there, either directly associated with their injury or associated with other things outside of that.
PN1714
So in practical ways in what ways might an employee fail to cooperate or comply with their obligations?‑‑‑One way might be refusing to talk to the employer, maybe making it difficult for the employer to talk to the doctor and having a conversation with the doctor is a key way for the employer to understand how they can best contribute to helping the person get back to work. In some circumstances it might be where they've got a certificate to say that they are fit for modified duties and they're not comfortable with the duties that the employer is offering.
PN1715
JUSTICE BOULTON: But you don't say this is in most cases? This is in some cases?‑‑‑No, certainly not in most cases. In most cases people are injured and return to work very quickly but there are circumstances where there are barriers to that.
PN1716
And I know this is difficult but we use these terms most and whatever, but what does that mean a little bit more precisely; more than 50 per cent, or less than?‑‑‑Yes, certainly successful return to work rates in most schemes are around about 80 per cent in, sort of, the first six month period. For a lot of injured workers we're not able to get statistics about how quickly they returned to work because if their claim doesn t become what the scheme refers to a serious claim then it won't even get into the system to be a count. So if somebody's injured, comes back to work without receiving any weekly compensation, that won't count as a statistic anywhere because it never actually became a claim that the scheme counts. So it's very hard to identify at the start of a claim how many people get back to work quickly.
PN1717
Yes, and when you're saying in most cases workers cooperate, is that again 80 per cent or something in that dimension?‑‑‑Look, once again one of the challenges I have is that I tend to be dealing with the scenarios where employers are ringing me for advice where things aren't going well. So it's very hard to give that exact assessment. But certainly my experience from when I was in industry, the majority of employees are trying to get back to work.
PN1718
A majority is 51 per cent?‑‑‑It's difficult.
*** TRACEY BROWN XN MR FERGUSON
PN1719
But you mean more than that, don't you?‑‑‑Yes, I do. Yes.
PN1720
What do you mean? 80 per cent, or I mean - - -?‑‑‑Look, it would be a ball park figure. I couldn't give you any stats that were reliable but certainly from my experience a large majority - I know that's not a good answer - 80 per cent would probably be a good example, but it's really not measurable.
PN1721
Let me ask you while I interrupted Mr Ferguson, most employers, how do they meet the liability for accident pay? Is it covered by some insurance that they have?‑‑‑No. No, so it's an amount that they pay on top of the workers compensation amounts that are covered by insurance.
PN1722
But do they have a different insurance cover which would be covering these sort of payments and other potential payments in terms of entitlements for injuries and - - -?‑‑‑I'm not aware of any insurance that would cover accident make‑up pay.
PN1723
So it simply comes out of whatever is the consolidated revenue of an employer?‑‑‑That's right.
PN1724
Thank you.
PN1725
DEPUTY PRESIDENT KOVACIC: How might it interact, Ms Brown, with income protection insurance schemes, which is a feature I've seen of some enterprise agreements that have come before me for approval?‑‑‑Yes, what generally happens with income protection is if there is accident make‑up pay you end up with a three tiered scheme. So you have the weekly compensation that the person's entitled to under the workers compensation legislation, you then have accident pay on top of that and then if there is an income protection entitlement as well, and that needs to be something that is triggered by the individual not by the employer, then that would be paid on top of that. But the income protection would only ever pay the amount that the person isn't already entitled to. So they're separate. That's something that the worker claims, not something that the employer gets.
PN1726
Yes.
*** TRACEY BROWN XN MR FERGUSON
PN1727
JUSTICE BOULTON: And, what, this is insurance taken out by the worker or is it taken out by the employer?‑‑‑Generally in the example I think that's just been used is it's insurance taken out as part of the enterprise agreement where income protection covers not just top-up for workers compensation but also personal injury or illness outside of work. So it's a negotiated enterprise agreement scenario.
PN1728
So when would it - if there is accident make‑up pay the income protection insurance would only apply to the extent to which the accident make‑up pay didn't as it were bridge the gap?‑‑‑That's right.
PN1729
And the income protection insurance, I mean it's complicated enough with accident make‑up pay?‑‑‑It is.
PN1730
But it depends on what income means and how it's defined and it might be defined in different ways in different policies?‑‑‑Yes.
PN1731
I mean, it could you know cover your, as it were, the actual pay that you got including shift allowances and perhaps penalties, where accident make‑up pay in most cases wouldn't cover that and workers comp insurance would not cover that, would it?‑‑‑That's right. So, well, depending on where we are in the scheme at a particular point in time. But where we normally see income protection being instituted in relation to a workers compensation claim is where the person is getting make‑up pay to their ordinary time earnings and the income protection then gives them an extra amount which would take them up and include their overtime and shift penalties that they received beforehand.
PN1732
Yes. Good, thank you.
PN1733
MR FERGUSON: In what kinds of ways do the various workers compensation schemes encourage employee cooperation with return to work?‑‑‑So there are some very early obligations in the scheme on employers to develop return to work plans and provide suitable duties. So one of the early ways for cooperation is the employer exercising their role in encouraging the worker to return to work. There's also the ability for a rehabilitation provider to be involved and assist with that. But in scenarios where it's believed that the worker is not cooperating and participating as they should be there are provisions within the legislation to either suspend or terminate benefits if the person is not meeting their obligations under the legislation.
*** TRACEY BROWN XN MR FERGUSON
PN1734
JUSTICE BOULTON: And in the areas that you work for AiG, I mean one of the major awards would be the Manufacturing Award. Do you have any feel for how many employers covered by that award would also be covered by enterprise agreements that provided for accident pay, and also if they are, if those accident make‑up pay provisions would be in the same terms as in the award or would they expand what the award might provide?‑‑‑Yes. I can't answer the first part of the question because I'm not directly involved with the enterprise agreement side of activities. So I wouldn't be able to answer that other than to say large employers are more likely to be covered than small employers by enterprise agreements.
PN1735
But wouldn't you be covered, because you're providing advice in terms of peoples' - or the liability of employers to provide these payments. So wouldn't you have to look to an award and an enterprise agreement provision?‑‑‑Yes, if I was providing the specific advice on individual cases. What I tend to do is I will provide advice around the general provisions around accident pay and then if somebody is wanting specific advice about particularly my - their enterprise agreement and how it applies, it would normally be our workplace relations people that provide that detail. I can get involved in it but it's not the most cost‑effective or time-effective way for that to be delivered because our workplace relations people, particularly in our BIZassistInfoline, have direct access to all of the awards and all the enterprise agreements which I don't have that access to as easily.
PN1736
But when you say in the statement that you understand - this is paragraph 9 - that:
PN1737
Union applications will require a very large number of employers who have not previously been obliged to provide accident make‑up pay to provide this entitlement.
PN1738
I mean, if you're just looking at the awards that AiG specifically or primarily might be involved with, wouldn't you need to make an assessment of how many people might be covered, not merely by whatever is in the award but would also be covered by enterprise agreements with these sort of provisions?‑‑‑Yes, I suppose I looked at it from the perspective of the number of additional awards that were going to be covered, and I didn't take into account that perspective.
PN1739
So it could be that in those awards in the manufacturing type area a lot of people are already covered by accident make‑up pay?‑‑‑Yes, it's not something I could - I'm afraid that's not something I could comment on.
*** TRACEY BROWN XN MR FERGUSON
PN1740
COMMISSIONER BULL: Ms Brown, you mentioned one of the problems was getting employees back to work early and one of the problems was the employee not allowing access to the medical practitioner. That s something the insurance company takes up, isn't it? It's not the employer's role to do that, is it, unless you're self-insured?‑‑‑In the early stages of a claim really the most effective way to get a person back to work is for the worker, the doctor and the employer to be having conversations about opportunities to come back to work. If we look at most of the workers compensation schemes, an individual claims officer might be dealing with a hundred, 120 claims, whereas from the employer's perspective they might have one or two claims that are active at that time. So we would always encourage employers to get actively involved from the time a person's injured rather than waiting for the workers compensation scheme to cut in, which might be two, four, six weeks later before somebody within the claims agent actually starts to actively manage the claim.
PN1741
All right, so I just didn't quite understand. So it's quite normal for an employer to start acting or engaging with the medical practitioner prior to the workers comp people getting involved?‑‑‑Absolutely.
PN1742
Thank you.
PN1743
MR FERGUSON: What are the ultimate consequences under the various schemes in broad terms of employees failing to comply or cooperate with a return to work?‑‑‑Well, the ultimate would be suspension or termination of weekly compensation payments. That's not something that's done lightly, and the agent would work through a very extensive process of warning processes with the injured worker and looking at independent medical assessment to identify whether or not the person is cooperating, or whether there needs to be sanctions applied.
PN1744
Those sorts of formal steps, are they what you'd regard as effective or efficient?‑‑‑They're certainly not efficient. They can be effective in situations where there are clear breaches of the obligation to cooperate. But they are a last resort and they're not the sort of thing that would be looked at generally early in a claim. It would be much later in the claim that that would be considered.
PN1745
And why do you say they're not efficient?‑‑‑Well, it's not efficient because of the amount of processes that you need to go through to make sure that the agent is comfortable that termination of weekly benefits is the correct outcome. And really what the schemes are trying to achieve is people returning to work, not the application of sanctions.
PN1746
Can I just take you to paragraph 12 of your statement?‑‑‑Sorry, which paragraph?
*** TRACEY BROWN XN MR FERGUSON
PN1747
Paragraph 12. Now you say in effect the regulators and their agents or insurers have various tools to encourage or enforce compliance with return to work obligations. Can you just explain to the Commission in what ways these parties encourage employers to meet their obligations to facilitate employee rehabilitation and return to work?‑‑‑Yes, once a claim has been established as a claim which is going to be more than just a short period of time off work and everything resolving itself, the agents do get or can get involved in the management of a claim. One of the things that would identify to them that the employer wasn't doing the right thing would be if there was a certificate that said that the person was fit to return to modified duties and the worker was still off work. So that would be a trigger for the agent to start engaging there with the employer to remind them of their obligations. Some of the jurisdictions also have return to work inspectors and their role is also to go out and, having identified through claims experience or particular claims that look problematic, to go out, see the employer, use their enforcement tools which include improvement notices to achieve return to work outcomes. The main aim of those is to achieve a successful return to work because that's the best possible outcome in the scheme. Ultimately though all of the schemes have the ability to prosecute an employer for failing to fulfil their obligations to provide duties.
PN1748
DEPUTY PRESIDENT KOVACIC: Ms Brown, based on your experience is there any sort of - I use the word discrepancy advisedly - in terms of the capacity of small employers as opposed to medium, large employers to set modified duties in circumstances where an employee might be injured, and to what extent does that sort of influence the return to work outcomes that might be achieved?‑‑‑Yes. All of the legislation does have a test of reasonableness, so it might be an obligation to provide duties so far as is reasonably practicable or the extent that it's reasonable to do so. So that will take into account the individual circumstances of an employer. Having said that, the aim of the schemes, particularly early, will be to help the employer as much as possible to identify that they do have opportunities to provide duties. But yes, within a small employer there might be circumstances where it is difficult to do that, in which case the agent might then be looking at, "Well, are there alternative employment opportunities we need to be looking for, for that worker?"
PN1749
So what does that mean in terms of other alternative employment opportunities?‑‑‑Basically if they identify that the person's unlikely to return to work with that employer then they would use rehabilitation services to help that person look for alternative employment, help them do CVs, maybe some training et cetera to enable them to move on if they need to. But the starting point is always to try and get them back to their own employer.
PN1750
Okay, and just following on from a question that Justice Boulton asked previously, do you have a sense of whether there's any correlation between those employers where there may be limited capacity to offer modified duties or a return to work, and whether they're covered by the relevant award and / or an enterprise agreement?‑‑‑No, I don't think I'd be able to answer that.
PN1751
All right.
*** TRACEY BROWN XN MR FERGUSON
PN1752
MR FERGUSON: Just coming back to the role of regulators and insurers, is there any incentive for an insurer to ensure that an employer complies with their obligations in terms of a return to work plan?‑‑‑There's two forms of workers compensation in Australia. One is privately underwritten where the insurers themselves take the financial risk associated with the insurance. So clearly the incentive for them is if people get back to work. That reduces the cost that they are paying. In Queensland it's a completely government-underwritten scheme which just has the WorkCover authority managing that, and in New South Wales, South Australia and Victoria they are authorised agents who act on behalf of the scheme. So in Queensland there's a direct incentive on the - from the government to keep costs down because that keeps the premium down. In the jurisdictions that use agents they use a range of measurement and performance and incentive to get the agents to do what it is that they want them to do. Victoria has the most transparent system for paying their agents and one of the key things that drives the bonus and penalty scheme within the Victorian scheme is what's called a continuance rate. So that's the amount of time on average that claims are still open at particular points of measurement, which might be 13 weeks, 26, 52 weeks. So the agents get a direct financial benefit globally from getting people back to work more quickly.
PN1753
I'm just going to take you to paragraph 14 of your statement, and you testify that the structure of weekly benefits under workers compensation schemes are intended to ensure that there's no financial disincentive to return to work, and you go on to say this involves a form of step‑downs in weekly benefits. Now can you explain what you mean by your reference to there being no financial disincentive?‑‑‑Yes. In the early stages of the claims people are receiving close to their full replacement of income. So it's more relevant after step‑downs the concept of a financial disincentive that - and it really links in to how the benefits work once someone has returned to work in that later stage of the claim. That if a person is receiving their full entitlement or, sorry, their full income replacement and not working then the decision to go back to work will actually attract a financial cost. It may be nothing more than the cost of travelling to and from work, but it may be more extensive around childcare arrangements, all those sorts of things. And so a scheme that gives full compensation when somebody is off work means that they're actually financially better off than they would be going back to work. so part of the design of the schemes after step‑down is that when somebody returns to work then the total amount that they receive, when you combine their earnings and compensation, is greater than it would have been to stay at home. So it actually creates a financial incentive to return to work or, I suppose more importantly, it doesn't create a disincentive to return to work.
PN1754
JUSTICE BOULTON: But you'd have to say that if you're looking around Australia there are different views in different states as to when you should, as it were, put the pressure on?‑‑‑Yes.
PN1755
I mean it seems that in New South Wales, Victoria and Western Australia the pressure comes after 13 weeks whereas in Queensland that you've just mentioned, it doesn't come until later?‑‑‑That's right.
*** TRACEY BROWN XN MR FERGUSON
PN1756
So you can't discern in, as it were, a consistent policy across the country as to, you know, what works best, as it were?‑‑‑Yes, there's certainly not a consistent approach to the timing of step‑downs. I think there's definitely a consistent approach to believing and agreeing that step‑downs are important. Part of the issue I think in scheme design is that whenever anything is happening in a scheme and there are changes to benefit structures there's always a whole lot of things that are being considered at the same time, and it's never possible I don't think to just pick out one part of a scheme and say that's the key driver that's being used in this particular scenario. That there are always a range of drivers that they're trying to build into the scheme.
PN1757
Yes. I'm tempted to ask you because it's not necessarily clear from this statement whether you think accident make‑up pay is a good thing or a bad thing? It's certainly a feature of the arrangements, and that obviously if you've got a level of different entitlements it becomes a little bit more complex to work out what the entitlement is. But I mean that's so, if you're calculating wages and allowances and, you know, ultimate pay and different entitlements. But did you want to say anything about that?‑‑‑My experience has been that accident pay distorts the incentives that have been designed within workers compensation schemes to provide an incentive to return to work.
PN1758
But it distorts something that there doesn't seem to be a consistent policy on, because the accident make‑up pay provisions also end after a particular time?‑‑‑They do.
PN1759
Yes, they might be 26 weeks, they might be 39 weeks or in some cases it can be longer. But most of them I think are probably in that category, which is not necessarily all that different from the approach which is taken in the legislation of some states at least?‑‑‑Yes.
PN1760
I mean, they don't distort the step‑down in some areas do they?‑‑‑Sorry?
PN1761
They don't distort the step‑down in some areas?‑‑‑I think they do in most schemes. I'm trying to think of which they wouldn't. Because all - well, it depends on the timing. So if you had a 26 week entitlement to accident pay and the step‑down was at 26 weeks then it wouldn't. But in the jurisdictions where they don't match up, it certainly would.
PN1762
In Victoria and New South Wales it would?‑‑‑Yes. Yes. Yes.
PN1763
Thank you.
*** TRACEY BROWN XN MR FERGUSON
PN1764
MR FERGUSON: I just have a sort of follow-up question from a previous question from his Honour. Where the schemes have been reformed to introduce step‑downs, have those provisions been amended in isolation or is it - - -?‑‑‑No, usually when amendments are made to things like step‑downs it's part of a much bigger change in the scheme. There have been a couple of occasions where probably back in the 90s the - some of the step‑downs may have been changed more through political issues rather than broad scheme design. But generally you don't mess with just one part of the scheme. It's normally looking at the whole part of the scheme and saying, "What do we need to do to get better outcomes for the scheme as a whole?"
PN1765
Thank you. Can I take you to paragraph 18 of your statement? I'm just going to take you to the evidence you give about the New South Wales scheme at paragraph A there within that. You say that:
PN1766
Under the New South Wales scheme once a worker is working at least 15 hours per week their benefits will increase to 95 per cent minus what they are being paid for the 15 hours
PN1767
Is that work with the employer who engaged them when they were injured or with any employer?‑‑‑It would work with any employer because it's about the worker's entitlement not about their relationship with the employer. In most cases it would be the scenario that the worker was returning to their pre-injury employer, but in a scenario where that wasn't possible, if the person found alternate employment then yes that would apply.
PN1768
And at paragraph 18 you've also included a table which provides an example of how much an employee in Victoria would receive if they returned to work?‑‑‑Yes.
*** TRACEY BROWN XN MR FERGUSON
PN1769
Are you able to explain how this table was formulated or what it demonstrates for the Commission?‑‑‑Yes. The Victorian legislation and also the other jurisdictions that apply this type of sliding scale do have a complicated approach. What this table's trying to identify is the financial benefit to a worker of returning to work on part‑time duties, which is often the starting point for a return to work rather than full‑time modified duties. So in the paragraph leading up to this table, on the previous page I've identified - the example that I'm using is somebody who was on a thousand dollars a week earnings and they're now at week 14 in the claim and if they're not at work they would get compensation of $800, being 80 per cent of their pre-injury earnings. The way that this scale of calculation is applied is to ensure that as a worker increases their hours, which means they're increasing their earnings, that they are increasing overall the total amount that they get paid for that week. So the wording in the legislation is that the person's compensation will be reduced by 80 per cent of their earnings. So the way that it works by looking at the table is if you had somebody return to work and earning a hundred dollars a week for the hours that they were actually at work, then 80 per cent of that earnings would be $80. That would be deducted from the $800 compensation that they otherwise would have received, and on top of that they get their hundred dollars that they had earned. So by returning to work the total payments that they'll get for the week would go from $800 to $820. As their benefits increase, and I've just picked round figures for ease, then the actual total payment that they receive continues to increase. So the aim of this through the design of the scheme is to say to a person, "Once you've returned to work you will start to receive more money up to the point where you're returning to work at your full pre-injury earnings". So it's the financial incentive to come back or, to use the words I used before, it ensures that there isn't a financial disincentive to return to work.
PN1770
DEPUTY PRESIDENT KOVACIC: Is there also another way of looking at the table in the sense that in circumstances where accident pay provisions might exist in the relevant award, that they might actually create a further incentive for the employer to modify duties, which would see the employee return to work with a view to minimising what they may have to pay out by way of accident pay?‑‑‑I don't think the majority of employers see that as a major part of their focus, and - but the - and the other part of this as well is that the actual amount that the employer is paying is increasing. So by the person being back at work there's an amount that they're paying.
PN1771
So how does for instance, I mean clearly one of the design elements of workers compensation schemes that sort of creates financial incentives for the employer is the level of premiums?‑‑‑Absolutely.
PN1772
So to the extent that, you know, you might have a circumstance where you don't have a return to work scenario for whatever reason, I mean how might that manifest itself in terms of a premium that an employer might be confronted with as a result of that?‑‑‑Yes, the schemes are continually trying to find the best financial incentive through the premium to provide that incentive for employers to get people back to work.
*** TRACEY BROWN XN MR FERGUSON
PN1773
Yes?‑‑‑There's a bit of state of change at the moment because South Australia and New South Wales are making some significant changes to the actual way that they calculate for next year. But the simple rule is that if somebody is work you are going to pay extra premium because of that. The longer they're off work the more that you're going to pay. But the small employer and it's not quite that simple because the formula that applies to large employers doesn't work in the small employer scheme. So what they've done in New South Wales to try and make that direct linkage for employers is that for small employers in New South Wales there is what they call a health and safety incentive, and so that is a discount off your premium if you have no claims. But to make sure that employers didn't say, "Well what, now that I've had a claim I've lost that incentive. Why would I bother doing anything?" they've also built in a return to work incentive. So that if somebody has been injured there's an incentive that if you get them back within a certain period of time that you will get a return to work incentive that was equal to the health and safety incentive. So it's really trying to create a very direct link at that smaller end that getting someone back to work gives you a direct financial benefit and you know what it is. At the larger end the cost of claims in workers compensation premium can be very large and so therefore there's a strong focus there from employers about the premium impact of claims.
PN1774
Thanks.
PN1775
MR FERGUSON: Well, just I suppose a follow-up question from that. In a practical experience have you ever had an employer indicate to you that they were keen to provide suitable duties, alternate duties if you will, because of the need to or desire to avoid accident pay?‑‑‑It's certainly not ever been something that's been suggested to me, and certainly when I was doing workers comp in industry the focus was more about the workers compensation premium.
PN1776
I'll take you to paragraph 21. At paragraph 21 of your statement you say that:
PN1777
The effectiveness of workers compensation schemes is determined by the complex interaction of the entitlements and obligations arising under workers compensation schemes.
PN1778
Can you tell the Commission as to whether in your experience employers are generally willing to provide alternate duties to their employees in order to facilitate their return?‑‑‑The majority of employers do act quickly and are keen to get people back to work. There's the obvious premium impact but there's all the other reasons why you want to get a person back to work as well; the moral obligation but then also retaining skills within the workplace, it's good for morale to see that people are looked after. So all those sorts of things lead towards employers wanting to get someone back to work quickly.
*** TRACEY BROWN XN MR FERGUSON
PN1779
Can I take you to paragraph 26. Now in that paragraph you refer to the passage of the Return to Work Bill 2014 in South Australia. In what ways, based on your understanding - or do you understand the new legislation amends the stepping‑down of weekly compensation payments compared to what previously applied?‑‑‑Okay, the South Australian amendments are quite complex. On the surface it appears that the first step‑down in South Australia which used to be at 13 weeks is now at 52. The reason why I say on the surface is because the way in which those weeks are counted has been changed. So in the current scheme within South Australia and the way that it works in most of the other jurisdictions is that a week is any week in which a person receives compensation. So if you have a person who is off work for two weeks then they come back to work on full‑time modified duties, so they're not in receipt of any compensation, then that would be two weeks towards the step‑down. If they then stayed at work for the next 10, 12 weeks they would still be at a two week count, and then if they went off work again or went on to part‑time duties then the count of weeks would start in any week that they have compensation. The key change that they've done in South Australia at the same time of extending the weeks from 13 weeks to 52 weeks, they've actually changed the count of weeks and it is now a straight calendar count from the time that the person first has an incapacity. So for somebody who is back at work on modified duties at the moment they may not get to the 13 weeks within that first 52 calendar weeks. Whereas under the new count of weeks in South Australia it will be a straight 52 weeks whether you're back at work or not back at work. So it is quite complex change and is very different to the way the other schemes operate.
PN1780
What happens to benefits two years after the date of injury?‑‑‑Sorry, could you repeat that?
PN1781
Under that scheme what's your understanding of what happens to workers compensation benefits at the two year date after the date of injury?‑‑‑In South Australia?
PN1782
In South Australia?‑‑‑So the new scheme in South Australia is actually creating a point at which at two calendar years benefits will cease unless a person is seriously injured, and if they're seriously injured then their benefits will go to retirement age. But for the majority of workers benefits will cease at two years.
PN1783
And is that a reduction in entitlements?‑‑‑Yes, at the moment in South Australia there is a capacity test that's done at 130 weeks but it's not - and so if a person has no current work capacity then they would stay on benefits to age 65. Whereas now the test will be whether they have a serious injury. So it's a higher test to stay on benefits than under the current scheme.
PN1784
But was that brought in as part of the total package of reforms?‑‑‑Yes. So the whole South Australian scheme has been completely revamped and yes, it's a whole range of change to entitlements in the South Australian scheme.
PN1785
Just one last question. You mentioned that you did a dissertation involving the connection between premiums and OHS outcomes. Now was your conclusion that there was a relationship between the two or did premiums cause - - -?‑‑‑Yes, it was a while ago when this dissertation was done.
*** TRACEY BROWN XN MR FERGUSON
PN1786
All right?‑‑‑But it was a similar sort of thing that we were looking at, at the time, and it was I suppose really what I concluded from that process through literature review and looking at how the premium schemes worked and looking at employers behaviour, premiums were more likely to drive issues around return to work because they could see a direct connection between somebody being injured and putting in a claim and putting them back to work. It was much harder for employers to see a direct connection between improving health and safety and premiums.
PN1787
Thank you. That s the evidence.
PN1788
JUSTICE BOULTON: Thank you. Who s going to start? Mr Crawford sorry, Mr Maxwell.
MR MAXWELL: Thank you, your Honour.
CROSS-EXAMINATION BY MR MAXWELL [11.00 AM]
PN1790
MR MAXWELL: Ms Brown, my name s Mr Maxwell. I represent the CFMEU in these proceedings and I d just like to ask you a number of questions, if I have the right paper.
PN1791
COMMISSIONER BULL: Ms Brown, while Mr Maxwell s organising his paperwork there. Of all the various States and the step downs and so forth, from your experience, do you say that there s one preferable over another?‑‑‑No, I think I couldn't specifically comment on that, no. I think it s the fact of knowing that step downs are there is probably more significant than which one is most relevant. But from my perspective, the step downs earlier in the scheme focussed people at a point in time when they re making decisions about, Really, should I be returning to work? And the further any of those things are down the scheme, the less likely people are to be thinking about them.
PN1792
DEPUTY PRESIDENT KOVACIC: Just a follow-up question there. Is that reflected in return to work rates during the period leading up to the initial step down, in terms of those schemes that might have a step down earlier on and the like?‑‑‑Certainly there s some anecdotal evidence no research but anecdotal evidence that when people know people who may have been difficult in the return to work scenario, that they do tend to become less difficult, for want of a better terminology, when a step down is approaching.
*** TRACEY BROWN XXN MR MAXWELL
PN1793
MR MAXWELL: Ms Brown, in paragraph 4, you say you were directly involved with the application of accident paid provisions at various companies. Between 1989 to 2001, what s the total number of accident pay matters that you were directly involved with?‑‑‑I wouldn't be able to say the total amount. All of those organisations were fairly high risk organisations. They did have a significant number of claims and so I couldn't say how many, but I could certainly say it was significant enough that it was a major part of my role.
PN1794
Okay, and when you were with DeLoite Touche Tohmatsu - - -?‑‑‑Tohmatsu.
PN1795
How many accident paid cases were you involved with there?‑‑‑It wouldn't have been terribly much there. We were doing more big picture scheme issues for employers. From time to time, we may have been asked those questions, but - - -
PN1796
Now, and I know I m asking you to tax your memory, but can you recall the average duration of time off work in those accident paid cases that you were involved with?‑‑‑No, it s too long ago.
PN1797
Well, in your experience in regards to Workers Compensation injuries, is it the case that the majority of workers would return to work within 13 weeks?‑‑‑I would say yes, that we did have that scenario. Many of them on modified duties, but yes, we worked very hard to get them back to work.
PN1798
Now, in these cases you were involved with, were any of the workers covered by the National Building and Construction Industry Award?‑‑‑No.
PN1799
Were any of the workers covered by the National Joinery and Building Trades Products Award?‑‑‑No.
PN1800
And did any of these cases involve workers covered by the Mobile Crane Hiring Industry Award?‑‑‑No.
PN1801
In paragraph 12, you refer to the ultimate sanction for a worker who does not comply with their obligations as being the termination of weekly benefits. When such a sanction was implemented, what would happen to workers accident pay?‑‑‑It s my understanding that the way that accident pay works across, definitely the awards that I ve been closely associated with, once the person no longer has an entitlement to Workers Compensation, they no longer have an entitlement to accident pay.
*** TRACEY BROWN XXN MR MAXWELL
PN1802
In paragraph 18 you refer to the New South Wales scheme. Are you familiar with the capacity to work arrangements under the New South Wales Workers Compensation Act?‑‑‑Only around the edges, I haven't been directly involved with I presume you re talking about the particular tests around capacity to work?
PN1803
Yes?‑‑‑I haven't been directly involved with the application of those tests.
PN1804
Are you aware there s a New South Wales, a decision as to capacity is not confined to the job in which the injured worker was employed prior to the injury?‑‑‑I am aware that that is a provision of the current New South Wales legislation.
PN1805
And are you aware that under the New South Wales scheme, there is no requirement for the employer to provide the suitable work as an employee has been assessed as being able to perform?‑‑‑Sorry, could you repeat the question?
PN1806
Are you aware that under the New South Wales scheme, there is no requirement for the employer to provide the suitable work as an employee has been assessed as being able to perform?‑‑‑I do understand that it is one of the issues that s currently being considered through the discussions, through the Wairo Parks Review. I understand that that is one of the interpretations, but we would always advise employers that if somebody s been identified as suitable to return to work, then we would believe they should be doing that.
PN1807
Is it not the case that under the New South Wales scheme, that if a worker is assessed as being able to perform suitable work but does not do so because the employer does not have the work, then in those circumstances, an employee can receive less than 80 per cent of their earnings after 13 weeks?‑‑‑Sorry, less than 80 per cent?
PN1808
Yes?‑‑‑I m not aware of that particular issue.
PN1809
In paragraph 23 of your statement, you refer to the review of the Victorian Accident Compensation Act 1985 by Peter Hanks. Are you familiar with the report?‑‑‑Yes, we were part of the consultation process.
PN1810
Do you support the findings contained within that report?‑‑‑I have not read it of recent times. I was very across the detail back when it was done, but I couldn't say that I recall of the recommendations.
PN1811
Are you aware, in reviewing the Workers Compensation Scheme in Victoria, Mr Hanks took into account that many workers were entitled to make-up pay?‑‑‑I couldn't say that I could recall that particular issue.
*** TRACEY BROWN XXN MR MAXWELL
PN1812
And so you can t recall whether or not Mr Hanks referred to research that showed that roughly half of the Victorian workforce was covered by accident pay?‑‑‑Not specifically without referring back to the report, no.
PN1813
I won t press you further on the report. I m sure that Mr Ferguson will provide the report for the assistance of the Commission.
PN1814
MR FERGUSON: It s already on. We put it on.
PN1815
MR MAXWELL: If I can take you to the table in your statement, which I think is in paragraph 18. Now you refer to, in paragraph 18, a worker whose pre-injury earnings were $1,000 per week. And is it your evidence that your experience was with the Manufacturing Award?‑‑‑Yes.
PN1816
Yes?‑‑‑Predominantly, but I have been involved with others.
PN1817
And you re aware of the wage structure under the Manufacturing Award, are you?‑‑‑Not in specific detail, no.
PN1818
And so you can t tell us how many award classifications have earnings of $1,000 a week?‑‑‑I used a thousand dollars, just because it was a simple calculation to be able to demonstrate the scenario.
PN1819
Well, if you look at the table in paragraph 18, if an employee s award wage is below $800 per week, how much accident pay would they receive in the scenarios that you ve outlined?‑‑‑Sorry? Could you ask that again?
PN1820
Well, if the award wage for an employee is $800 a week, and if you look at the table in paragraph 18 of your statement, would this employee receive any accident pay?‑‑‑Sorry, I I can t follow the question.
PN1821
Okay. I ll take you to the table in paragraph 18?‑‑‑Yes.
PN1822
And there you give the various scenarios that to show that the employee s earnings are reduced if they return to work. What I m trying to ascertain is, whether in any of the scenarios you ve identified, an employee under the Manufacturing Award who receives $800 a week or less would receive accident pay?‑‑‑So sorry, $800 or less?
*** TRACEY BROWN XXN MR MAXWELL
PN1823
Per week?‑‑‑Per week as their base earnings?
PN1824
As their base earnings?‑‑‑Well, if their base earnings is $800 then they would be receiving make-up pay up to the $800.
PN1825
But in scenarios that you ve identified in paragraph 18, which of those employees would be receiving accident pay?‑‑‑So the example that I ve got in that table is looking at one individual employee who was on a thousand dollars a week and if the accident pay provisions applied so utilising presuming the thousand dollars a week was ordinary time earnings, then and the fact that under the previous Metals Award provisions there wasn't a variation clause, then in each of those scenarios, if there was accident pay applicable, the worker would be being paid a thousand dollars. So they would be getting $180 make-up pay in the first one and $20 make-up pay at the end.
PN1826
Ms Brown, have you looked at the application that s come up before the Commission?‑‑‑I ve looked at the applications in general and I ve read some of them in detail and I ve looked at the overall summary of what each of those are seeking.
PN1827
And in terms of the applications, is it your understanding that those claims are seeking accident pay up to the pre‑injury earnings, including old award payments, or to the award rate?‑‑‑It s my understanding that it s to the ordinary time earnings of what the person was earning, not the award rate.
PN1828
So if the applications are seeking the accident make-up pay to be made up to the award rates, then the scenario, as you ve outlined, would be different?‑‑‑Well, the scenario I ve outlined at paragraph 18 has no relationship to accident pay. It s about what the person will get when we combine what they earn and the compensation rate. There s no mention of accident pay in that particular provision.
PN1829
Right, if I can take you to paragraph 32 of your statement?‑‑‑Yes.
PN1830
And you ll see there, you give the examples of, in (a), an injured worker with pre-injury earnings of $1,500 per week, made up of a thousand dollars ordinary time earnings and $500 overtime and shift. Now, if the award rate for such a worker is $800, is it the case that you calculations in (b) would be wrong?‑‑‑If the accident pay provisions was for an amount to be paid to award rate, well yes. But the awards that I ve always worked with have been to ordinary time earnings, not to award rate. So I ve picked an example and I may not have covered all of the claims that have been made.
*** TRACEY BROWN XXN MR MAXWELL
PN1831
In regard to the issue of the incentive to return to work as step downs, if a worker received an injury that prevented them from returning to work for 20 weeks they were medically unfit and not capable of returning to work until after 20 weeks, what incentive would step down after 13 weeks provide to that worker?‑‑‑If they were absolutely, completely unfit to return to work, then they are unfit to return to work. The incentives are designed for providing a financial incentive for the majority of workers who are able to return to work on some duties in that period of time.
PN1832
And do you think it is fair or unfair on that worker to receive a step down?
PN1833
MR FERGUSON: I object to this. The witness isn t here to give an assessment of what s fair or not fair. That s for the Bench to decide, in terms of what the provisions should look like. It s not a matter that she can give evidence about in terms of what s fair. It s a subjective consideration.
PN1834
JUSTICE BOULTON: The witness has been put forward as an expert.
PN1835
MR FERGUSON: And an expert in the operation of Workers Compensation schemes, not in fairness in the Industrial Relations system more broadly.
PN1836
JUSTICE BOULTON: I suspect you ve had enough time to think about the question. Yes, you can put the question. Do you understand the question?‑‑‑I do understand the question.
PN1837
MR MAXWELL: Ms Brown, in the scenario I ve just outlined, do you think it will be fair or unfair on that worker to receive a step down after 13 weeks?‑‑‑I think the difficulty in Workers Compensation schemes and entitlements generally, is that the scheme works for the majority of employees and there will be scenarios on both sides, where people receive what we believe they shouldn t be entitled to receive and others where, on a particular case, you may be saying on this particular issue, it seems unfair. That s one of the difficulties with a scheme which is designed for universal coverage to try and achieve the best possible outcomes for both return to work generally and return to work for individual workers.
PN1838
I have no further questions.
JUSTICE BOULTON: Thank you. Ms Starr?
*** TRACEY BROWN XXN MR MAXWELL
CROSS-EXAMINATION BY MS STARR [11.17 PM]
PN1840
MS STARR: Ms Brown, my name s Gabrielle Starr and I appear on behalf of the Australian Council of Trade Unions in these proceedings. You mentioned before that you completed a dissertation during, I think it was your graduate Diploma in Occupational Health and Safety. Do you recall how long the dissertation paper was?‑‑‑I think it s about a 15,000 word assignment.
PN1841
And in that paper, did you analyse accident pay, accident make-up provisions?‑‑‑It wasn't a consideration, no.
PN1842
Do you accept and in your experience do you accept that a number of Workers Compensation claims are recurrent claims, in the sense that it s the same employee who may have to have subsequent time off work in relation to the same or a similar injury?‑‑‑Yes.
PN1843
Could you estimate, or have you seen any research that would estimate the number of claims that would be recurrent claims?‑‑‑No, I couldn't answer that.
PN1844
And do you accept that one reason why there might be a recurrent claim is because an employee s not fully recovered before they return to work?‑‑‑That could be a reason, yes.
PN1845
You say in your statement that a worker has an opportunity to increase their income if they return to work in suitable or in modified duties. Do you accept that ultimately, the discretion lies with the employer?‑‑‑Well, it does to a point, except that there are legislative obligations to provide a duty. So if the employer is going to be non‑cooperative to start with, then the scheme would be stepping in to ensure that they did meet their obligations because it isn t discretionary to meet your legal obligations under the Act.
PN1846
And would you agree that in some occasions, disputation arises in the context of an employee coming or seeking suitable alternative employment and a return to work?‑‑‑Yes, I think that we get disputation on both sides - workers seeking employment and with employers trying to offer it.
PN1847
So can you say that again, sorry? Employers disputation arises because employers are offering suitable duties?‑‑‑Yes, so I think - - -
*** TRACEY BROWN XXN MS STARR
PN1848
Can you expand on that?‑‑‑Yes, we have disputation in both directions. So we have a scenario where a worker wants to return to work and the employer is either uninformed or uncomfortable about their ability to provide duties. And the we have the other side where the employer wants the person to come back to work and they re not necessarily cooperating with that opportunity.
PN1849
In your statement, you mention and this is at paragraph 26 - you mention that there was a review into the West Australian Workers Compensation Scheme in about June 2014. Do you recall if the Australian Industry Group made submissions as part of that review?‑‑‑We weren t directly involved with Western Australia, no.
PN1850
And similarly, you also talk about a review which happened in the Northern Territory, more recently, in February 2015?‑‑‑And not directly involved in that one either.
PN1851
You mentioned briefly before that there might be some financial disincentives for workers to return to work, including travel. For example I think you gave the examples of travel and child care. Would you accept that if somebody s injured and they were recovering, that they might not be in a position to care for their children?‑‑‑I was talking about it more from the perspective of a comparison between what the person was doing before they were injured and afterwards. So if a person was paying train fares to return to travel to and from work or they were paying childcare associated with their normal attendance at work, then if they ve been off work for a period of time, those costs may not be being incurred because they re not attending work.
PN1852
But do you accept that childcare is probably not one of those? Childcare is probably still going to be necessary for most workers if they are injured?‑‑‑Possibly, but thinking of scenarios like before and after school care, which can be a major issue, that may be something that s not necessary if somebody s off work, which would be necessary when they returned to work.
PN1853
And again, on a separate question, you mentioned before that a majority, I think, of employees you said are and I think you used the word are keen so the majority of employers are keen to get people back to work and you mentioned some reasons for that. Can you give us an estimate of what you mean by majority?‑‑‑No, I can t. It s really just from my experience of talking to employers on a regular basis that they are keen to bring people back to work.
PN1854
Okay. Thank you, I have no further questions.
JUSTICE BOULTON: Ms Wiles?
CROSS-EXAMINATION BY MS WILES [11.23 AM]
*** TRACEY BROWN XXN MS WILES
PN1856
MS WILES: Good morning, Ms Brown. My name s Vivienne Wiles and I appear on behalf of the Textile Clothing and Footwear Union in these proceedings. Now, in paragraphs 1 to 8 of your statement, you detail your work experience in health and safety and Workers Compensation field. I take it from that that you have only worked for employers or employer organisations?‑‑‑That's right.
PN1857
And so you don t have any direct experience of working on behalf of injured workers?‑‑‑Not working on behalf of, but in HR and safety roles you are working with and trying to support injured workers to return to work.
PN1858
But you re not representing them?‑‑‑Not representing them, no.
PN1859
And do you have any specific experience of the Textile Clothing and Footwear industry?‑‑‑Only through my experiences at AI Group in providing advice to member companies, not working in that industry myself.
PN1860
And none of the employers that you ve specifically worked for would have been covered by the TCF Industry Award, I m assuming?‑‑‑No. No.
PN1861
Now, would you accept that a guaranteed minimum hourly rate of pay is important to the safety net?
PN1862
MR FERGUSON: I object to this. The witness can t give a view about the safety net, in terms of, I assume to reference to what the Fair Work Act mandates that this Commission set. It s not a matter within this witness expertise. It s an unfair question.
PN1863
MS WILES: Your Honour, these proceedings are directly about the safety net and I we believe that that question is appropriate for this witness.
PN1864
JUSTICE BOULTON: What s your question again?
PN1865
MS WILES: The question was, did the witness accept that a guaranteed minimum hourly rate of pay is important to the safety net.
PN1866
JUSTICE BOULTON: Well, I mean, the answer really is just yes, isn t it? I mean, because there is, in the safety net, a guaranteed minimum. But if you re then going to go on, you re going to talk about injured workers, are you?
*** TRACEY BROWN XXN MS WILES
PN1867
MS WILES: That's correct, your Honour.
PN1868
JUSTICE BOULTON: I think maybe you should just go on.
PN1869
MS WILES: Would you accept the proposition that all workers covered by a Modern Award should receive at least the minimum award rate of pay?
PN1870
MR FERGUSON: I object to this. The witness isn t here to give evidence about award minimum rates of pay and the importance of them. It s an unfair question.
PN1871
JUSTICE BOULTON: I think you can probably rephrase your question.
PN1872
MS WILES: I ll move on, your Honour.
PN1873
For an injured worker covered by a Modern Award, without receiving accident pay, they will in many cases, not receive the award minimum rate of pay. That's correct, isn t it?‑‑‑It may be the case in some schemes, but a number of the schemes have established a minimum rate for Workers Compensation, not just the percentage amount. So there are some schemes that have a minimum rate in there.
PN1874
But in those schemes, for example, such as Victoria and Western Australia sorry, New South Wales, where they ve dropped down to 95 per cent immediately and then to 80 per cent. In those cases, those people are getting less than the minimum award rate of pay, aren t they?‑‑‑I couldn't comment on that because I don t focus in the award space as far as payments go.
PN1875
DEPUTY PRESIDENT KOVACIC: Can we perhaps come at that question slightly differently, Ms Brown, in the sense that you mentioned that some schemes have minimum payment rates. Could you give the Bench a sense of what those minimums payment rates?‑‑‑Yes. So an example that comes immediately to mind because it s new legislation is South Australia. So the provision in the South Australian legislation says that the minimum amount paid is the Federal minimum wage.
PN1876
Okay. And other jurisdictions?‑‑‑There are two other jurisdictions that have provisions, but I can't remember the exact detail as to how they re written.
PN1877
Okay, thank you.
*** TRACEY BROWN XXN MS WILES
PN1878
MS WILES: In paragraph 11 you state there, and I quote:
PN1879
The current line in each jurisdiction within the objectives of the legislation and the focus of regulators includes achieving sustainable to return to work outcomes to injured workers and utilising various levers within the scheme to drive improvement in Workplace Health and Safety as a key focus.
PN1880
Would you agree that one of the general objectives of Workers Compensation schemes is to reduce costs for both insurers and employers?‑‑‑I think that s a secondary issue. The key drivers are return to work and yes, good return to work will lead to reductions in cost in the scheme. But they are schemes designed to provide compensation and return to work as their primary focus.
PN1881
But in terms of sustainability of schemes, particularly for insurers, reducing costs is a key objective, isn t it?‑‑‑I would say it is an objective, but I wouldn't see it as a key objective of the schemes or the individuals that are administering it.
PN1882
In paragraph 12, you refer there to employers having obligations to provide suitable employment, but it s not always the case, is it, that a particular employer will have suitable duties for an injured worker to return to?‑‑‑No, there may be situations where there aren t suitable duties in that particular employer.
PN1883
And you ve already given evidence that even where there are suitable duties, some employers don t provide them?‑‑‑Some employers find it difficult to identify those duties. They need assistance.
PN1884
And some employers simply don t want to. That s true too, isn t it?‑‑‑There are some employers that don t want to provide duties, yes.
PN1885
And despite that, what's the risk of prosecution for those particular types of employers for not providing suitable duties?‑‑‑There are - obviously a breach of the law means a capacity to be prosecuted. Our experience has been that the major focus for the regulators is to achieve compliance, not to prosecute. So there's no advantage to a worker to have a successful prosecution if they're still not back at work. So there's only a small number of prosecutions because the focus of enforcement activity is to assist the employer to meet their obligations, to understand and meet their obligations.
*** TRACEY BROWN XXN MS WILES
PN1886
But given the low level of prosecutions would you agree that it's not much of a stick, is it, for an employer who belligerently doesn't provide alternative duties when they're capable of doing so?‑‑‑I don't think I'm ever asked by an employer, "What's the chance that I might be prosecuted for not meeting my legal obligation?" What they're concerned about is, "What is my legal obligation and how can I best do that?" I don't think I've ever been asked "What's the chance of me being prosecuted if I don't meet my legal obligation?"
PN1887
Now you gave some evidence earlier about the use of step‑downs in workers compensation schemes. I think you were asked a direct question whether you - if I remember this correctly - whether you supported the use of step‑downs in workers compensation schemes. There's no conclusive research, is there, that step‑downs in workers compensation schemes actually encourage return to work outcomes is there?‑‑‑Sorry, I missed the first part of your question.
PN1888
There's no conclusive research which demonstrates that step‑downs in workers compensation schemes actually result in or encourage return to work outcomes?‑‑‑No, I'm not aware of any conclusive research that indicates that. One of the challenges when we look at the operation of workers compensation schemes is that there are always a range of interacting activities and incentives that are occurring and I don't think you could ever pick out even one factor anywhere in the scheme and get conclusive evidence that that was a key driver.
PN1889
So if step‑downs in and of themselves according to your evidence have no material impact on return to work rates, then all the step‑downs achieve is really to punish an injured worker isn't it?‑‑‑I think what I said was there's no conclusive research and I don't see it as something ever designed to punish workers. It's something which is about getting the best possible return to work outcomes.
PN1890
Now would you agree that workers compensation schemes in Australia have changed on a regular basis over three or four decades?‑‑‑They have.
PN1891
And during that time would you agree that there have been multiple awards that have contained accident pay provisions?‑‑‑Yes.
PN1892
And employers including the AiG have been dealing with those changes in WorkCover schemes for all that time?‑‑‑Yes.
PN1893
Yes, and they've been advising their members accordingly for all that time about those particular changes?‑‑‑Yes.
*** TRACEY BROWN XXN MS WILES
PN1894
Yes, so in terms of the current situation that's really no different from what AiG and other employer groups have been doing for the last three to four decades?‑‑‑It's no different to what we've been doing but for individual members it could be very different.
PN1895
Thank you, I have no further questions.
JUSTICE BOULTON: Mr Burns.
CROSS-EXAMINATION BY MR BURNS [11.34 AM]
PN1897
MR M BURNS: Hello Ms Brown, my name is Michael Burns. I appear for the Maritime Union of Australia. Could I just ask you in relation to your experience have you dealt with, in relation to your workers compensation, employees and employers engaged in the marine towage industry?‑‑‑No, it would be unlikely.
PN1898
The stevedoring industry?‑‑‑No.
PN1899
The professional diving industry?‑‑‑No.
PN1900
So you wouldn't have dealt with employees engaged under the Marine Towage Award or the Professional Diving Industry Industrial Award or the Stevedoring Industry Award?‑‑‑No.
PN1901
You've given a pretty general - made a pretty general statement that the majority of employees comply with their workers compensation obligations and a figure was advanced around at about 80 per cent. Just sort of locking that in, what percentage of employees that you've dealt with, employers and employees, actually have these accident pay schemes?
PN1902
MR FERGUSON: I just object. I have no issue with the fact that there are multiple parties questioning the witness, but it just seems that the same issue, or that issue in particular seems to be being re-ventilated by different parties which seems somewhat unfair to the witness. These sorts of issues about what the majority of employers do have been ventilated or asked repeatedly. It just seems concerning that now we've got multiple parties cross‑examining the same witness over the same material.
*** TRACEY BROWN XXN MR BURNS
PN1903
MR BURNS: My point is that we've just got a global - and effectively your statement is 80 per cent of a majority of employees comply. So really that means that about one in five employees don't comply with the return to work obligations. Now that would be a bit high, wouldn't you think?‑‑‑Well, I can't remember the exact question that I was asked but I thought it was more along the lines of those that are enthusiastically doing it early, not those that do it by the time we get to the end of a scenario. Because I thought my - I thought the question was about how many employers actively engage with that early.
PN1904
Employees?‑‑‑Employers was my(sic).
PN1905
All right.
PN1906
JUSTICE BOULTON: Maybe you should just ask what question you want to ask at this stage?
PN1907
MR BURNS: Yes.
PN1908
I understood that when you referred to the majority, it referred to the majority of employees and I'm talking about the majority of employees complying with their return to work obligations?‑‑‑Sorry, I thought the question was about employers.
PN1909
No, this is about employees?‑‑‑Look, it's a similar scenario as around there will be a large number who do actively pursue return to work. I suppose it's a little difficult to assess what the difference is between the person's been slow to return to work and the person has cooperated or whatever. It's one of the reasons why the schemes take a long time to go down the path of suspension or termination of benefits, because it is very difficult to make an assessment as to whether or not a person is still off work because they're not cooperating or still off work because they genuinely need to be off work.
PN1910
So you're not really differentiating in that majority position as to who is in receipt of straight workers comp or who is in receipt of accident pay as well?‑‑‑No.
PN1911
The legislation provides for disincentives both for employers and employees to comply with their obligations, yes. That is the legislation - I mean, you've answered this question but it's the next point. The legislation provides a disincentive for employers to - well, for employers not to comply with workers comp. They have to provide a return to work obligation?‑‑‑So there are incentives in the scheme or there are obligations in the scheme for employers to provide duties, and then there are incentives around the workers compensation premium.
PN1912
Yes?‑‑‑But the primary driver is the employer's obligation to provide suitable duties and the way that the scheme interacts to ensure that that occurs.
PN1913
And there are mechanisms in the legislation that deal with that?‑‑‑Yes.
*** TRACEY BROWN XXN MR BURNS
PN1914
That if followed there's motivation for the employers to be pursued if they don't, and similarly for the employees there are obligations under the legislation for employees to comply with their return to work obligations. They have to attempt - go to rehabilitation, they have to undertake medical assessment et cetera?‑‑‑Yes.
PN1915
And if all the factors align and - the legislation deals with both scenarios?‑‑‑Yes.
PN1916
And you also agreed that as far as you're aware the accident pay schemes tie in with the workers compensation schemes. That is they don't operate separately. If a person is not entitled to workers comp they're not entitled to accident pay?‑‑‑That's correct.
PN1917
So that if someone is in receipt of accident pay then if they're not complying with their return to work obligations under the workers compensation scheme the legislative mechanism is available for the insurer and the employer to execute in order to terminate the weekly payments?‑‑‑There is.
PN1918
And wouldn't you think that if a person is in receipt of accident pay on top - this is after even the step‑down, that there would be a greater disincentive if they're on accident pay to - the greater incentive for the worker to comply with their return to work obligations because their loss would be less - would be greater, sorry?‑‑‑It's not - - -
PN1919
JUSTICE BOULTON: Even - - -?‑‑‑- - - a way that I've ever looked at it before, no, because the workers compensation amount is the most significant amount that a person is risking if they're not cooperating with rehab and return to work.
PN1920
MR BURNS: That's from the insurer point of view but from the employee's point of view wouldn't you agree that it's the full amount that they're risking?‑‑‑No, from the employee's perspective if they're earning - if they've got $800 worth of compensation and $200 worth of make‑up pay it's the $800 that's most significant to encourage them, not just the $200 make‑up pay.
PN1921
But they lose the lot, don't they?‑‑‑Well, if their benefits are ceased they lose the lot, yes.
PN1922
No further questions.
JUSTICE BOULTON: Mr Nguyen.
CROSS-EXAMINATION BY MR NGUYEN [11.42 AM]
*** TRACEY BROWN XXN MR NGUYEN
PN1924
MR NGUYEN: Thank you, your Honour.
PN1925
Ms Brown, my name is Mr Nguyen. I work for the Australian Manufacturing Workers Union. Ms Brown, in your experience have you had any experience working in the graphic arts, printing and publishing industry?‑‑‑No, not directly.
PN1926
And in airline operations ground staff?‑‑‑No.
PN1927
And in food manufacturing?‑‑‑Yes. Sorry, not directly as an employer but advising a lot of employers in the food manufacturing industry.
PN1928
Thank you. So you'd agree that for employees the potential loss of 80 per cent of their pre-injury income is a very significant factor contributing to their decision making around return to work?‑‑‑Sorry, the loss of 80 per cent?
PN1929
80 per cent, yes. You indicated just before that you believe that from an employee's perspective that 80 per cent, as opposed to the accident make‑up pay, was a more significant - - -
PN1930
MR FERGUSON: Look, I object anyway. The witness can't give evidence about what employees think.
PN1931
JUSTICE BOULTON: Yes, I think he can put the question.
PN1932
MR FERGUSON: Yes, all right.
PN1933
JUSTICE BOULTON: I'm not sure what significance the question has but 80 per cent is significant.
PN1934
MR FERGUSON: Yes.
PN1935
THE WITNESS: Yes, so the - yes.
PN1936
MR NGUYEN: And you'd agree that step‑downs are not a primary driver of return to work?‑‑‑Sorry, could you ask the question again?
*** TRACEY BROWN XXN MR NGUYEN
PN1937
You'd agree that step‑downs are not a primary driver of return to work? You've been using the words primary driver consistently in your statement. I just wanted to confirm that you would agree that step‑downs are not a primary driver of return to work outcomes?‑‑‑I don't recall having used primary driver consistently. I think step‑downs are part of the scheme. A scheme that only relied on step‑downs would not achieve what we need to achieve. It's a combination of a range of factors.
PN1938
But you'd agree that a primary driver on return to work outcomes is the employer obligation to provide suitable duties?‑‑‑It is certainly an important part of the return to work scheme that an employer has obligations to provide suitable duties.
PN1939
No further questions, your Honour.
JUSTICE BOULTON: Mr Ferguson?
RE-EXAMINATION BY MR FERGUSON [11.44 AM]
PN1941
MR FERGUSON: Yes, just a small number of matters.
PN1942
You were asked questions by the advocate for the ACTU about recurrent claims, and I think you accepted that it might occur because an employee returns when they're not fully fit. Could there be other reasons why it occurs?‑‑‑Look, there could be. I mean recurrent - what is meant by recurrent absences may not be that the injury has got worse. There could be situations where the injury hasn't got worse but for whatever reason the person is less able to cope with the scenario. So there are a range of things that could lead to a person having multiple times off work for the same injury.
*** TRACEY BROWN RXN MR FERGUSON
PN1943
You were asked questions about disputation where an employer refuses or doesn t provide reasonable alternate duties, if I call it that. Are there avenues for employees to challenge an employer decision not to provide such duties?‑‑‑Yes, if the - if a worker believes that the employer's not providing them with duties that are appropriate and available then their first port of call would be to go to the agent or insurer to highlight it with them, that they believe that they're not being dealt with effectively and the agent, as part of their contract with each of the regulators, would be expected to investigate that and take action, provide assistance, maybe engage a rehabilitation provider to assist. If the worker wasn't happy with that outcome there are dispute resolution processes, so conciliation tribunals et cetera, that can either mediate or direct specific outcomes. And another option is to complain to the regulator who can then investigate through their return to work inspectorate or other mechanisms to hopefully assist the worker to return to work. But if not, to then be escalating to penalties and possible prosecution.
PN1944
You were asked questions about childcare. Does every compensatable injury necessarily prevent a worker from looking after their children?‑‑‑No. I mean, no, it was - I think the question was taken out of context from what I had actually been talking about in that situation.
PN1945
You were asked questions about the extent to which costs to employers or reducing costs to employers was a consideration in the crafting of some of the schemes. Is the cost impact on schemes part of the considerations when these schemes are generally reviewed?‑‑‑The cost impact of the schemes is always something that needs to be considered because we can't have schemes in whatever way, whether it's poor management or whatever, that are costing more than the benefits that are being derived from the scheme both from compensation and return to work. And it may in some cases be a starting point for a review but generally the focus is the best way to reduce costs is to help people to return to work.
PN1946
So it's one factor amongst many that's balanced in these reviews?‑‑‑Yes.
PN1947
I'm being generalised here, but these reviews about the schemes that arise from time to time, are they generally detailed reviews?‑‑‑Look, they are and they vary from reviews which may take two or three years with issues papers and detailed submissions and consultation and reports, and others which may be quicker but still have extensive consultation and investigation. They're not something that are just changed overnight. There's a lot of consideration put into it.
PN1948
You were asked questions about employer compliance. In your practical experience do employers you engage with indicate that they want to comply with their legal obligations?‑‑‑Yes, the majority of employers that are ringing us there is about identifying what it is that they can do to get a person back to work. Sometimes they're talking about legal compliance, sometimes they're just talking about, "I want to help this person get back to work".
PN1949
And what sorts of challenges do they face in terms of return to work?‑‑‑Look, there can be challenges about the extent of the injury may find it - may make it difficult to find modified duties. In some circumstances there might be breakdowns of relationship within the organisation, either prior to the injury or because of the injury, which can create difficulties. And that's where HR managers and return to work coordinators have a really big role in helping organisations to get - and individuals to get past those barriers.
*** TRACEY BROWN RXN MR FERGUSON
PN1950
Where a step‑down or if a step‑down required or resulted in an employee receiving less pay than they otherwise might under the award, what would be the effect of accident pay on the operation of that step‑down?‑‑‑Where accident pay - - -
PN1951
If the accident pay required it to be topped up to the award?‑‑‑So if the? Sorry, I don't completely understand the question.
PN1952
What I'm trying to ask is whether in your opinion the provision of accident pay would negate the operation of step‑downs where it required an employer to make up pay to a higher level?‑‑‑Yes, so generally with most of the awards that don't have a no variation clause, when benefits reduce, accident pay increases to take the person back up to their ordinary time earnings.
PN1953
Thank you, I have no further questions.
JUSTICE BOULTON: Yes, thank you Ms Brown for your testimony. You're excused?‑‑‑Thank you.
<THE WITNESS WITHDREW [11.51 AM]
PN1955
JUSTICE BOULTON: Yes, well we do have some mention proceedings on at 12.30. We do have a video conference arrangement for those proceedings so we will probably be adjourning these proceedings at about 20, 25 past 12 and then we'll be resuming at 1.30 for these proceedings. So are you going to start, Ms Starr?
PN1956
MS STARR: I was, your Honour. I was going to seek your indulgence for two reasons to have an adjournment now, in part to accommodate a comfort break but also so that I can seek and confirm some instructions in relation to the mention which has been put on at 12.30. I just want to ensure that I haven't received any emails in respect to that matter that I may need to contact. Subject to that, what we had proposed going forward is that of course the unions are in a position to give submissions in the order that we have - and I have copies - in the order which we have notified the Commission that we intend to deal with those.
PN1957
JUSTICE BOULTON: But I assume you're first, is that right?
PN1958
MS STARR: I am first, yes, that's correct.
*** TRACEY BROWN RXN MR FERGUSON
PN1959
JUSTICE BOULTON: Good. Yes well, in the circumstances we can't deny you the comfort break. We've done that. We're almost up to 12.30 so we might adjourn until 12.30.
PN1960
MS STARR: Thank you.
LUNCHEON ADJOURNMENT [11.53 AM]
RESUMED [1.34 PM]
PN1961
JUSTICE BOULTON: Ms Starr.
PN1962
MS STARR: Your Honour just as a matter of housekeeping, as I indicated earlier we have provided a running order of the unions' submissions but I should - sorry, there is one late change and one thing that I should note. The current order is we have the CFMEU construction going after the ACTU followed by the AWU. We will then be hearing from the AMWU vehicles division and the TCFUA, and then followed by the ASU who would now become fifth in the order. The other thing that I wanted to note was depending on how we go with time this afternoon we have some of the affiliates at the back end will be briefer than others. So it might be that we reshuffle somebody further up if that means that they would be able to get through their submissions this afternoon, depending on how we go for time.
PN1963
JUSTICE BOULTON: We're going to have to finish the proceedings this afternoon at 4 o'clock.
PN1964
MS STARR: At 4 o'clock?
PN1965
JUSTICE BOULTON: We envisage if we have to we're going to sit longer tomorrow because we want to finish all the submissions within the time that we've allocated.
PN1966
MS STARR: Certainly. Thank you. The ACTU has filed submissions and those submissions were filed on 18 February and we rely on those. We also rely on the statement of Dr Kevin Purse which is marked as ACTU 2 I believe in these proceedings. As we've said, we support the applications which have been made by the affiliates and a summary of those applications was handed up during the initial hearing date and it is marked ACTU 1 in the proceedings. This is not the first round of modern award reviews, but it is the first of the 4 yearly review of modern awards, and in conducting this review the Commission is exercising its modern award powers.
PN1967
Whilst those powers are broadly described in the context of section 154, in exercising those powers the Commission must have regard to the following matters. Firstly, the modern awards objective and whether the determinations are necessary to achieve that objective; that prima facie the modern awards achieved the modern awards objectives at the time that they were made; thirdly that any previous decisions that have been made by a Full Bench should as a general principle be followed unless there are cogent reasons otherwise; the historical context which is applicable to each of the modern awards and finally, that the Commission must ensure that the modern awards together with the National Employment Standards provide a fair and relevant minimum safety net of terms and conditions.
PN1968
Each of the affiliates will speak to their applications and also to the history of the awards and the modern awards objective in the context of those awards, and we say that that's all part of, and in support of, what the ACTU will say in our argument that accident pay remains a relevant and necessary safety net entitlement. Before we hear from the affiliates, the ACTU will address more the question I think of fairness and why we say that the only fair outcome is for the applications to succeed. We will also briefly come back to the decision of the Full Bench during the award modernisation in 2008.
PN1969
Now I appreciate that today a lot has been said about what is a relatively brief passage in the decision, but we think it's important to come back to what we've said firstly in our submissions, and in order to give context as to why we say that accident pay is necessary and is still necessary to ensure the modern awards objective is met. We say that at the time the modern awards were made in 2008 it was accident pay itself that ensured that the modern awards met the modern awards objective. It was not accident pay as transitionally applied. Finally we intend to review and we'll come back to the expert evidence of Mr Shaw and Dr Purse, and in essence summarise what we say should be drawn from those experts.
PN1970
In summary, accident pay is relevant because without accident pay workers may be paid at rates that are less than minimum rates that are set by the award. It's necessary to protect the safety net for the great majority of workers who do return to work within the first 26 weeks. It's also necessary because it achieves better and more sustainable return to work objectives for injured employees. The submissions of the affiliates provide evidence of not only the history of accident pay, which we say of itself weighs in favour of making these applications, but also their experience with workers who are off work due to work‑related injury.
PN1971
Their submissions support our position that the addition of a financial hardship at a time when a worker is already suffering from an injury, the cause of which is directly related to work, does nothing to assist a worker to recover and to return to work. The evidence of Dr Purse is that insofar as there is any incentive or motivating factor, the step‑downs may actually incentivise workers to return to potentially unsafe work and in circumstances where they're not yet fully fit to safely perform their duties. Dr Purse refers to this as the economic effect and for the transcript I reference that that's at paragraph 532 of the transcript, and he said that if you reduced payments low enough, people will put their families before themselves.
PN1972
This sort of perverse financial incentive is not a sound basis for public policy and nor is it desirable in the context of minimum wage setting. It's not conducive to supporting sustainable return to work objectives, including ensuring that workers do not suffer the current injuries or relapse. In light of the sophisticated and the complex workers compensation systems that exist today, which we know have a much stronger focus on intervention and rehabilitation as well as a number of other important elements which were described by Mr Shaw in his statement, and he refers to them at paragraph 65, and they include things such as early intervention, effective workplace-based return to work programs with employer support, effective claims management and cooperation, collaboration and consultation between stakeholders.
PN1973
Accident pay, among these factors, does not have any measurable adverse consequences for return to work objectives. On the contrary, as Dr Purse and for that matter the Self Insurers of South Australia point out, accident pay actually improves return to work rates. There is evidence that being able to focus on the individual and focusing on their needs will contribute to better and more sustainable return to work rates. Dr Purse refers to at page 4 of his report the comments which were made by the Self Insurers of South Australia, and there are two comments there with which we agree, and these were also supported by Mr Shaw during cross‑examination, and that was at paragraphs 1463 to 1465 of the transcript.
PN1974
Firstly ,the point was that step‑downs can have negative impacts on workers' morale and secondly, that relatively few workers - and Mr Shaw put the figure as high as 95 per cent of employees do not need any encouragement or incentive to return to work. They do so for many reasons including those that Mr Shaw also described, such as over‑enthusiasm, financial circumstances and an attachment that they hold with their workplace. The views of compensating authorities and employers in light of this seems inconsistent. On the one hand there is acceptance that the vast majority of injured workers do not need step‑downs. However there remains this support in some cases for step‑downs.
PN1975
Dr Purse draws attention to that inconsistency at page 5 of his report and to the South Australian experience where the government has not accepted - in the recent case they've not accepted that step‑downs are necessary to achieve acceptable return to work rates. Other parts of the scheme such as the availability and the quality of timely medical and rehabilitation services played an important role in achieving improved return to work outcomes. Accident pay has no impact on the claims management itself, on the speed that liability is or is not accepted, it has no impact on the quality of medical services or the timeliness in which those services are provided to injured workers.
PN1976
To the extent that it is accepted that it may interfere with the workers compensation schemes, the degree of interference is not significant. It seems it is in everyone's interests that employees return to work as soon as it's safe to do so. But that's not a matter for us to fix as part of these proceedings. It's not why we're here. The applications seek to include accident pay into some modern awards within the context of the 4 yearly review. The unions will each give submissions about how their applications meet the modern awards objective and why we say the inclusion of accident pay is necessary, and that's what is important for us to consider.
PN1977
The ACTU will address, as I've said, the expert evidence particularly with respect to the interaction of accident pay with workers compensation schemes. We will deal with the controversial use of step‑downs. However in doing so we're not advocating that this is the most critical point - sorry, that this is not the most critical question before the Commission. We intend to deal with step‑downs in order to rebut those who oppose the applications on the basis that accident pay will undermine the operation and the intention of workers compensation schemes. Specifically that it will have detrimental impact on return to work rates because it somehow negates or it nullifies the utility of step‑downs.
PN1978
This material - and this goes to questions of merit. The ultimate question for the Commission is whether or not accident pay is necessary to meet the modern awards objective, and we say the answer to that question must be yes. Coming back now to the award modernisation decision in 2008 we draw attention to the observations of the Full Bench when the transitional provisions for accident pay were inserted into modern awards. The basis for these submissions is to demonstrate that at the time that the modern awards were made, that they met the modern awards objective and accident pay was necessary for them to do so.
PN1979
The fact that accident pay was ultimately included on a transitional basis does not establish that it now, after the cessation of the transitional period, that modern awards still meet the modern awards objective. We say that's incorrect. Due to the cessation of the transitional provisions the modern awards no longer meet the objective and as such these applications are necessary to re‑establish or to correct that imbalance. Much has been made of the observations of the Full Bench. Perhaps too much emphasis has been placed on that decision. However we say two things can be drawn from their observations.
PN1980
Firstly, that at the time the modern awards were created, accident pay was a relevant and necessary safety net entitlement that warranted the inclusion in modern awards. Secondly, that no clear intention can be drawn from the decision that accident pay provisions were to cease at the end of the transitional period. Our submissions that we've put on shed light on the likely reason why the provisions - why we say the provisions were included on a transitional basis, no less of which includes the submissions which were made by the Commonwealth Government at that time that suggested or recommended that the status quo be maintained.
PN1981
That's ultimately exactly what the Full Bench did in 2008. The status quo was maintained which meant that the entitlement was preserved but that it was not extended beyond those awards which had a pre-existing entitlement, and this was done in a way that it did not offend the predecessor provision of section 154. It avoided the argument that both accident pay were - and district allowances. But it avoided the argument in both those respects that they were inconsistent with section 154, by relying on what is now section 154(2) which permits for terms that it did offend 154 for a period of up to five years.
PN1982
We of course do not agree that the terms offend section 154, however that argument was always going to be had, but award modernisation in 2008 wasn't the opportunity to do so. That is why we say that the Commission is not encumbered by the same restrictions as was the case during award modernisation. Those jurisdictional objections of course have been raised and they will be dealt with in these proceedings. There is also yet no nationally applicable workers compensation nor accident pay make‑up scheme, and I guess some perhaps cynical commentators have suggested that there might never be, or at least that there won't be in the foreseeable future, but that's why it's more important that the accident pay be entrenched as a safety net term.
PN1983
Given that the transitional period has now ended, it's both appropriate and necessary for the Commission to grant the applications which are sought by the unions. The award modernisation Full Bench posed the same question that we're actually now confronted with, and that is in what circumstances should modern award provide for accident pay and each of the affiliates will speak in turn to their own applications and why in their industries workers need to be able to access accident pay. I'm going to now come back to workers compensation schemes and the interrelationship with step‑downs. The evidence that we rely on really casts a great shadow of doubt over the utility and the necessity of step‑downs and the role that they genuinely play in workers compensation schemes.
PN1984
We've traversed during these proceedings - and I'll touch on some of the detail of the legislative entitlements in the various states and territories that govern workers compensation. Needless to say there are incredibly different schemes. Workers compensation is also an area of much flux and change. South Australia is a good example of that. Much the same as industrial laws, meaning that it's fair to say that they are as equally vulnerable to political constraints and political objectives. To put the experts' evidence about step‑downs in context, it's probably much like asking an industrial expert, if we speak of the pre-Work Choices era, in asking somebody to comment on a fairly narrow issue and perhaps something - quite a narrow and contentious issue, and we use the example of like unfair dismissal eligibility and how that operates across the various states and territories and federal jurisdictions.
PN1985
Then having heard that person speak about those matters, trying to distil from the murkiness of the political, the ideological, the industrial and the legal objectives; trying to find within that some solid evidence that supports the proposition and, staying with that analogy, finding solid evidence that supports the proposition that barring employees employed by small business from unfair dismissals will somehow increase employment. Because we say that's what step‑downs are in the context of workers compensation schemes. They are controversial. They are policy-driven and they are decisions which are made by governments.
PN1986
There is no persuasive evidence that can be pointed to that supports that they have a positive effect on return to work. If it did exist it would be abundantly clear from all the volumes of materials that have been filed in these proceedings. Dr Purse comments - and this is at paragraph 525 of the transcript - in relation to the Hanks report that whilst the report suggests that spikes in return to work typically occur prior to the setting of step‑downs, in that report itself there is no citation or reference to the evidence that supports that proposition. Likewise in relation to the Productivity Commission report in 2004 there is a reference to a report that is relied upon to support that where you have lower replacement rates and a lower level of compensation payment compared with pre‑injury earnings then you will get higher return to work rates.
PN1987
At paragraph 531 of the transcript Dr Shaw suggests that this inference is little more than - sorry, I apologise, I mean Dr Purse suggests that this inference is little more than hearsay and there is no reference to the data or the methodology of that study. Not even the employer's own expert has been able to confirm any direct correlation between step‑down and return to work rates. Under cross‑examination at paragraph 1366 of the transcript Mr Shaw said, and I quote:
PN1988
I think it's inappropriate to suggest that the influence of step‑downs in isolation can be clearly identified. They are part of the complex suite of measures that are built into schemes to create an overall incentive, both positive and negative. So it would be I think unsupportable to say that there is any evidence one way or other in isolation that step‑downs have an identifiable effect.
PN1989
Dr Purse refers to this and he calls this an understatement of very significant proportions, and that's at paragraph 560 of the transcript, and says that there has been no estimate on the impact of step‑downs on return to work in Australia, and in his view this is quite staggering in light of the $8 billion a year which is spent on workers compensation. We say that the Commission should remember this when they're considering how much weight should be placed on the way in which the workers compensation schemes operate in deciding whether or not these applications should be granted.
PN1990
It's another understatement, but we don't agree; we don't agree that there is any evidence that supports the argument for step‑downs and any argument that suggests they improve return to work objectives. And in the absence of such evidence how is it fair to make the worker bear the burden of financial detriment of such a decision? Rather than incentive, I prefer the way that Mr Shaw describes them. He refers to them as a reminder. They are in a sense a reminder, and they remind us that it's desirable for workers to suffer a little or perhaps a lot of inconvenience on top of and in addition to the inconvenience that they are already suffering because of their illness or injury in order to prod them back to work.
PN1991
It seems illogical to us that at a time when a person needs to be most comfortable in order to ensure and to focus on their recovery and rehabilitation that it's somehow justified to create this new level or this new source of stress that places the worker in a situation of financial insecurity. Workers typically would not know at the time of their injury how long they may need to recover and return to work. They would not know whether or not at some point along that time the employer may or may not be able to accommodate suitable duties.
PN1992
Much is going to depend on the health care system and when and how they can get the services that they need, and of course the insurers who ultimately hold the purse strings and therefore the access to the rehabilitation providers and to other medical services. Much also depends on the attitude of the employer and their willingness to support the injured worker. It's probably easy to say, "Sorry, we can't accommodate you so we're not willing to take the risk and sorry, there are no available positions for you to perform at this time". It's much harder to adjust job roles, to adjust working hours and to accommodate injured workers.
PN1993
I don't intend to speak any longer about step‑downs other than to summarise, I guess, the salient points to remember and they are that there is no reliable or persuasive evidence that supports that step‑downs are a critical part of a workers compensation scheme. step‑downs, we say, are punitive in some circumstances. They reduce an employee's rate of pay and not by an insignificant amount, which affects those who are low paid and typically award-reliant. They are indiscriminate. The most affected by step‑downs are those that have suffered the most serious injuries, for example those who are permanently impaired.
PN1994
There is no consideration of an individual's financial circumstances or the severity of their injuries, and finally there is acknowledgement by some, albeit by some governments, that they have just not worked. We don't have to agree or not about step‑downs because that's not the context of the way in which the applications have been framed or the way in which they should be framed as part of the 4 yearly review. This is about an application for accident pay and to insert accident pay into modern awards. The policy considerations that might constrain governments are not those that the Commission must deal with.
PN1995
It's plain to see from the development of workers compensation schemes that typically conservative governments will move in one direction and that perhaps progressive governments would move in another. And that's not going to stop because of anything that we do here, and ultimate it's not going to stop because of what is decided here. As Dr Purse points out there is no consensus across the states and territory with respect to the operation of step‑downs. He describes them as ad hoc and we can see that, and that's evident on the face of the schemes and the way in which they work. Some schemes have one step‑down, others have more.
PN1996
Some start earlier, some start later. Some have more severe step‑downs, some have less severe. Some start at a hundred per cent, and some start as low as 80 per cent. Some of the schemes have exemptions for certain types of work and some have different application for award and non‑award covered employees. In the absence of accident pay we have a system where some workers are better off, and this is not a satisfactory outcome. Workers compensation has operated in conjunction with industrial laws and they've been operating largely side by side since at least the 70s, and we can find no evidence that suggests that this has been in any way detrimental to return to work objectives.
PN1997
The unions want what is fair and what is in the best interests of workers. We share the view, and it has been said by the employers a number of times and it's a view that we share, that it is in the best interests of workers to return to work quickly. But we say so with these two caveats and as stated by Dr Purse at paragraph 547 of the transcript. Firstly, where they are signed off as medically fit to perform the work even if that is only for some of the work or suitable duties and secondly, that they must be returned to safe work. This means ensuring that workers are not driven to return prematurely because of financial imperatives. It is our experience - and I think that it's largely agreed in these proceedings - that most workers are in almost all circumstances doing their best to get back to work, be that in suitable duties or to their full duties.
PN1998
Much depends on the assistance of the insurers to process the claim quickly and to ensure that the employee gets the medical and rehabilitation care and support that they need. Much also depends on the attitude of the employer to provide suitable duties to accommodate the employee's limited capacity. Where an employee cannot be accommodated it means that they may miss out on the opportunity to have their pay increased, and that is the example in New South Wales and Victoria. Of course there is no silver bullet or easy answer to managing work-related injury. The best results appear to be achieved by employers who recognise the needs of the individual worker and those who are flexible and able to accommodate a timely and safe return to work.
PN1999
As Dr Purse said at paragraph 553 the stars need to align. It is not enough to improve return to work rates unless what we are talking about is sustainable return to work, and that we're not just facilitating or forcing people from one scheme on to another scheme. There is nothing unusual about an industrial case that seeks to improve on legislative minimums and, to the extent that it does interfere with legislative step‑downs, this does not prevent the Commission from granting the application. The relevant consideration for this Full Bench is whether or not the applications meet the statutory test and that they meet the modern awards objective.
PN2000
We say that the applications do meet the modern awards objective and our proposition is simple. It is appropriate and fair that a worker does not suffer financially because they have been injured in the course of employment. What good is a step‑down for someone who is badly injured? They are not coming back to work regardless of what you pay them because they simply can't. The safety net of accident pay will protect those workers, and workers who work in industries where the nature of work is for example more demanding physically and requires a high level of fitness for work and therefore it's more difficult for them to get back to their pre‑injury duties, why should they have their pay cut off because their recovery might take longer?
PN2001
The safety net of accident pay will protect those workers as well and the applications of the unions recognise that the average return to work duration will be different or may be different in different types of work. There is just no reliable or persuasive evidence that the existence of industrial regulation of accident pay has operated to the detriment of return to work objectives for injured workers or for employers. The ACTU, we reserve our position to make further submissions in reply to the employers' responses. That is all that we would say at this point in time, unless there are any questions from the Bench?
PN2002
COMMISSIONER BULL: Yes, Ms Starr. I think I might have missed it, but what do you say about the fact that the applications don't cover all 122 awards?
PN2003
MS STARR: Commissioner, the applications have firstly been put on by affiliates who sought to pursue a separate application for accident pay.
PN2004
COMMISSIONER BULL: Yes, what I'm asking - and you probably realise - in terms of fairness why are these awards any lesser or more fair than the ones that aren't in the application?
PN2005
MS STARR: We don't accept or we don't think that the conclusion should be drawn that just because the applications are in relation to the specific awards that it's no less relevant in relation to other awards. I think perhaps the very sorry truth of the award review process is that each union is restricted in relation to how we can resource and run a certain amount of cases at one time. For some unions there's no concession that they don't think that it's relevant in respect to their awards but they don t have the capacity to run those cases now.
PN2006
COMMISSIONER BULL: And what we heard earlier this morning, what do you say about those particular jurisdictions where there is a minimum wage threshold? Does that lessen the impact of not having accident pay?
PN2007
MS STARR: Sorry, Commissioner, could you repeat the question?
PN2008
COMMISSIONER BULL: We heard this morning that there were some states that if the step‑down was 80 per cent you still couldn't go below the minimum wage.
PN2009
MS STARR: We say that people - sorry, that workers are entitled to their ordinary earnings and that it's fair that they would be paid their ordinary earnings whilst they are on periods of workers compensation if the relevant rate of pay is that which is in the award, not the federal minimum wage.
PN2010
COMMISSIONER BULL: Yes.
PN2011
MS STARR: So the applications - - -
PN2012
COMMISSIONER BULL: No, what I'm saying is that the step‑down might not be as great as it might seem on paper.
PN2013
MS STARR: I think that that's correct and I'd have to - we have to look at it in more detail insofar as how it might relate to specific pay rates, for example.
PN2014
COMMISSIONER BULL: Yes.
PN2015
MS STARR: But I think that that's a fair observation, Commissioner, to say that of course the workers compensation schemes are complicated in that they will apply in different jurisdictions differently and also, within a particular jurisdiction, for example in New South Wales, you find that if you're paid or if you're entitled to overtime or shift allowances that you might also - that you would get paid those under the scheme, which might mean that the employee isn't entitled to accident pay because one is greater than the other. So of course we would accept that there are those differences and so the significance of accident pay is going to be specific to how it would be practically applied.
PN2016
COMMISSIONER BULL: Thank you.
PN2017
JUSTICE BOULTON: Perhaps I'll just mention two things that we'd eventually like your views on. One is the United Firefighters seem to have an application but haven't filed any submissions that I'm aware of and haven't appeared in the proceedings. So you might be able to help us in terms of what's happening with that matter. Also we have received a submission from the New South Wales Government, although the government hasn't appeared or sought to appear in the proceedings; what weight we should give to that submission?
PN2018
MS STARR: Certainly. In relation to the UFU I have had a discussion with the UFU and unfortunately I can't confirm one way or the other, other than to say that they are aware the proceedings are on foot and they had indicated to me that they would confirm directly with the Commission whether or not they wished to pursue their applications. In respect to the submissions which have been put on by the New South Wales Government we thought it would be appropriate for us to deal with both those and the Commonwealth Government's submissions, and we will do that in reply.
PN2019
JUSTICE BOULTON: Good. Thank you.
PN2020
MS STARR: Thank you.
PN2021
JUSTICE BOULTON: Mr Maxwell.
PN2022
MR MAXWELL: Your Honours and Commissioner, the CFMEU gave our opening submission on 31 March this year. We refer to the workers who suffer an injury at work, not only suffering a painful injury but in some cases because of that injury being prevented from attending work and being a productive member of society. That if they are unable to attend work then these workers are then to varying degrees penalised through workers compensation systems that progressively reduce their normal pay, depending on the length of time away from work, and for some workers this could mean being paid less than the minimum wage. Accident pay is a way of alleviating that penalty by providing workers with a guarantee through the payment of an allowance that they will receive at least the award rate of pay per week for a minimum period set by the award.
PN2023
We referred briefly to the introduction of accident pay to the building and construction industry over 40 years ago, and we quoted from Tom McDonald who said that accident pay was a way of creating a more civilised building industry for injured workers and their families. We also refer to a number of statistics relevant to the building and construction industry. We made the submission then that injured workers deserve a fair and relevant safety net and should receive for a set period of time at least the same level of award wages as an employee who is off on paid sick leave with a cold, is off work enjoying a paid public holiday or off work on paid long service leave. The provision of accident pay will provide such a safety net.
PN2024
On 29 September 2014 the CFMEU construction and general division lodged an application to vary three awards, the Building and Construction General Onsite Award 2010, the Joinery and Building Trades Award 2010 and the Mobile Crane Hiring Award 2010. The application was as part of the Fair Work Commission 4 yearly review of modern awards. On 18 February 2015 in accordance with the amended directions of the Full Bench we filed a written outline of our submission in support of the application. We will seek that our written submissions be marked as an exhibit in these proceedings.
JUSTICE BOULTON: Exhibit CFMEU 4.
EXHIBIT #CFMEU4 WRITTEN OUTLINE OF SUBMISSIONS OF THE CFMEU
PN2026
MR MAXWELL: Thank you, your Honour. Your Honours and Commissioner, that outline included three witness statements. Those witness statements have now been received as separate exhibits. The witness statement of Tom McDonald is exhibit CFMEU 1. The witness statement of Sherri Hayward is exhibit CFMEU 2 and the witness statement of Neil Browne is exhibit CFMEU 3. If I can turn to our written submission we start with an introduction and we set out the background for filing of the submission, and note in paragraph 6 that we rely on this submission and not the submission on interim relief that we filed on 10 November 2014.
PN2027
We do however rely on the authorities filed on 17 November 2015 where they are mentioned in this submission. We set out in paragraph 8 the matters to be dealt with in our submission. If I can start off with the nature of the review. In this section we refer to the preliminary jurisdiction issues decision. In particular we refer to paragraphs 23, 24 and 27 of that decision. We say that those extracts identify that in prosecuting our claim before the Commission there is a need to advance a merit‑based argument in support of those variations, that we must address the legislative provisions and provide probative evidence to demonstrate the facts supporting the proposed variation.
PN2028
The extracts confirm that the history of awards are important, particularly the award modernisation proceedings resulting in the creation of modern awards and that at the time the modern awards were made there was a legislative acceptance that they achieved the modern awards objective. The extracts also confirm that previous Full Bench decisions relevant to a contested issue are relevant and should be followed unless there are cogent reasons for not doing so. Our submission then deals with the introduction of accident pay to the building and construction industry.
PN2029
In our written submission we trace the history of the accident pay provisions, we set out the circumstances leading up to the first accident pay provision being inserted into the Building Trades Dispute Award in New South Wales in 1971 and we have provided the witness evidence of Tom McDonald - that's exhibit CFMEU 1 - who was directly involved in the union at that time. Now I don't intend to take the Commission through that witness statement. It speaks for itself, however I would refer the Commission to paragraph 5 where Mr McDonald states:
PN2030
During the 1960s Works in New South Wales campaign to have the New South Wales workers compensation scheme changed to provide full pay, the campaign was initially successful in as far as the State government agreed to set up an inquiry headed up retired Judge Conibear who recommended that workers compensation payments should be increased to 85 per cent of the award wage, but the New South Wales Government refused to implement the recommendation.
PN2031
I should point out that at the time in 1971 most awards were paid rates awards and not minimum rates awards. In paragraphs 13 and 14 of Mr McDonald's statement he refers to what workers said to him in regard to the proposal in regard to accident pay - sorry ,the changes to workers compensation. In paragraph 13:
PN2032
One worker explained to me his opposition in the following way, "A wage increase is only a temporary gain for it is soon eaten up by inflation. Then you have to go again and again for a wage increase. It's like being on a merry‑go‑round. Accident pay is different because inflation can't eat it up and such a gain is therefore more permanent and it also gives injured workers some security when they desperately need it."
PN2033
He then says in paragraph 14:
PN2034
Another worker put to a meeting of workers the moral case when he said, "If you were a horse that had been injured, the owner wouldn't reduce your feed. But if you're an injured worker the boss expects you to starve on half pay". The worker explained that his employer was a major formwork company whose CEO had racehorses, one of which was injured. And a newspaper article with the CEO made it clear that he will spend whatever money was needed to provide food and care necessary to get his horse back to full health. The worker got much applause when he said, "Why can't they treat us equal to how they treat their horses?"
PN2035
In paragraph 14 of our written submission we refer to the Building Trades Dispute Award and the disputation that led to it, and refer to the witness statement of Tom McDonald. In paragraph 15 we explain what the claim for accident pay was at the time in 1971. The claim was for employees who from time to time suffered an injury within the meaning of that expression in the Workers Compensation Act 1926 as amended and which was compensatable under the provisions of the Act who paid such weekly sums as would, when added to the weekly payments, be made under the Workers Compensation Act make up those payments to the level of the payments which would be due to the employees under the award for a week of 40 ordinary hours work.
PN2036
Additionally, the payments to be made by the employers were to cease after 26 weeks had elapsed from the time when the liability to pay compensation arose. Now ultimately Mr Justice Sheahy arbitrated the first dispute, and that's dealt with in paragraph 18. I would refer the Commission to the view of the Master Builders Association that is dealt with in paragraph 17 where Mr Ball, who appeared before the New South Wales Industrial Commission, stated:
PN2037
You will recall that when we were last before the Commission I advised you that the Master Builders Association in company with other employer organisations approached the Minister for Labour and Industry on the 28th of April and pointed out to the Minister that in our view there were some disparities between the take-home pay and the workers compensation payments of an injured worker, and we were particularly concerned of the economic plight of the married men with one or two children.
PN2038
Interestingly at that stage the Master Builders did share a number of their concerns about the need for accident pay, which appears to have waned over the years. In paragraph 21 of our written submission we deal with the decision of the Commission in Court Session and this decision can be found at tab 3 of the CFMEU authorities filed on 17 November 2014. Importantly from this decision the Commission in Court Session recognised the following points in regard to the union's claim for accident pay, and this is found in the second paragraph on page 622 of that decision, and it reads:
PN2039
Firstly, it was not a claim to have the employee's pay made up to his full pre‑injury earnings. No question of arriving at his average weekly earnings within the meaning of section 14 of the Workers Compensation Act arose. In some cases the actual earnings would be the same as the award rate for 40 hours work but in many, and it would seem on the material before his Honour, in most there would be more because of the large amount of overtime worked in this industry. Secondly, the additional payments which were sought was not to continue indefinitely, as can workers compensation, but was to terminate at the end of 26 weeks if the disability continued for so long. Thirdly, the payment would be due not only in the event of injury suffered as a result of accident on the job, but also for any other type of injury compensable under the Workers Compensation Act such as disease or injury suffered on an employee's periodic journey.
PN2040
Now I should point out that what the union or the CFMEU is seeking in regard to the Construction Award is virtually identical to what was sought in 1971 save that we now seek it based on a 38 hour week, and we also recognise that period journeys are now largely not covered by the Workers Compensation Act as they have been taken out and are covered by the separate insurance. The Commission in Court Session also recognised that the claim was made not on the basis of considerations concerned with whether workers compensation should be supplemented generally in the community, but as one involving special considerations arising because of the nature of the building industry itself.
PN2041
We would point out that in regard to these proceedings the position of the CFMEU is that we are arguing in regard to the building industry awards, the three awards that I've mentioned, that that is the basis of our argument. It is based on the specific conditions of the building and construction industry and the injury rates applicable to that injury(sic). Starting in paragraph 23 of our written submission we refer to the history of accident pay in the federal awards.
PN2042
Following the decision in New South Wales, accident pay soon became a feature of federal awards. On 14 March 1972 the Carpenters and Joiners Award 1967 was varied to provide for accident pay in Victoria. On 4 April 1975 the National Building Trades Construction Award was made which included accident pay for Queensland, New South Wales and Victoria, and you'll see that in our written submission we refer to a paragraph from the judgment of Everett J where Everett J said in regard to accident pay:
PN2043
The unions applied for a clause in the form of a draft tendered by them (exhibit C29), providing for accident pay to be paid by employers to employees receiving workers compensation under legislation in force in Queensland, New South Wales and Victoria. The employer will be required to pay the difference between the weekly amount of workers compensation and the award rate.
PN2044
Then in brackets:
PN2045
(In Tasmania the award rate is paid under workers compensation and in South Australia average earnings are paid). The Victorian employers oppose the claim although they are already required to pay the award rate. The present award rate does not include over‑award payments whereas the Proposed Paid Rates Award would include such payment as a special allowance. As a result there will be an increase in insurance premiums.
PN2046
The Commission granted the union's application on 27 February 1975 and determined that the clause should be in the form of the draft. In paragraph 25 we refer to that later in 1975 the federal award coverage was extended to Western Australia, and you'll see there that we've quoted from that decision where the Commission noted, and starting in the second paragraph:
PN2047
The case brought in support of the application under section 41(1)(d) relied on the conventional grounds which had been raised in earlier decisions relating to this section of the Act but some features require comment. In discussing the representation of employers by the two employer associations I express reservations concerning the number of persons and companies represented, having regard to the numbers served.
PN2048
On the facts established it appears that there may well be a large body of employers in Western Australia who are at least indifferent to federal regulation. Second, having regard to the scale on which service was undertaken, it is apparent that very few employer builders and painters would not be parties to the federal award if it is made. The risk of disharmony arising because of adjacent regulation by two tribunals is therefore minimal.
PN2049
All of the successor federal awards since then, that is the National Building and Construction Industry Award 1990 and the National Building and Construction Industry Award 2000 contain the same accident pay clause save for the change from the 40 hour week to the 38 hour week. As we point out in paragraph 28, since the 1989 inquiry into the building and construction industry the industrial parties have supported federal regulation and the NBCIA has been recognised as the predominant industrial instrument applying to workers in the building and construction industry across Australia.
PN2050
Accident pay with a 26 week limit has been a constant feature of that industrial instrument. In regards to the industries covered by the Modern Joinery and Building Trades Award and the Modern Mobile Crane Hiring Award, a similar pattern of the regulation of accident pay occurred. The National Joinery and Building Trades Products Award 1993, an award which arose out of the consolidation of a number of offsite awards, included an accident pay clause which applied in Western Australia, Victoria, Tasmania, New South Wales and Queensland. A copy of that award is contained in tab 10 of the CFMEU's authorities and the accident pay provision is in clause 45 of that award.
PN2051
Following award simplification in 2002 the new award, the National Joinery and Building Trades Award 2002 contained the accident pay clause as set out in paragraph 32 of our written submission. The accident pay was to be paid for a total of 26 weeks. The first Federal Mobile Crane Hiring Award made in 1975 contained an accident pay clause that applied in Victoria. The initial standard was 26 weeks, and your Honours I've given the appropriate references to those prints in our written submission. In 1978 the award was varied to increase entitlement to 39 weeks. In 1981 it was extended to 52 weeks. When a new award was made in 1988 the award and the accident pay clause applied to employees in all states and territories across Australia, and that can be found in tab 12 of the CFMEU authorities.
PN2052
The main provisions of the accident pay clause stay the same over the next 18 years, notwithstanding the award going through the section 150A review of the award in 1996, and the award simplification process in 2002. In appendix C to our written submission, exhibit CFMEU 4, which starts on page 49, we include a table which summarises the accident pay provisions in the building, vessel and civil construction group pre-reform awards and NAPSAs. If I can just briefly take the Commission to that table just to explain the document.
PN2053
JUSTICE BOULTON: Sorry, you're taking us to?
PN2054
MR MAXWELL: This is appendix C which is found on page 49 of our written submission.
PN2055
JUSTICE BOULTON: Okay.
PN2056
COMMISSIONER BULL: Mr Maxwell, in your submissions do you have any examples of how often in your awards anyone amended? (Indistinct) your members' access to these benefits?
PN2057
MR MAXWELL: In regard to accident pay?
PN2058
COMMISSIONER BULL: Yes.
PN2059
MR MAXWELL: We don't provide any statistics on that. As we readily admit, the overwhelming majority of our members are covered by enterprise agreements and the accident pay provisions that they have under those enterprise agreements are superior, vastly superior, to the award. If you take Victoria for example under what some may see as the standard Victorian agreement, some may call it a pattern agreement, you will see that the top-up workers compensation in that state is provided through the Incolink scheme which operates in terms of redundancy and other insurance benefits.
PN2060
Generally under that scheme, they rely on the incorporated award term of accident pays to provide for the first 26 weeks and then the insurance provided through the scheme tops up the accident pay for a further sorry, in total of 104 weeks; so they provide a top‑up through that scheme. In Queensland there's also a scheme called the CIPQ, which I will refer to in our reply, which has a similar‑type operation. It's difficult for us to say how many employees would be affected by the award as opposed to the enterprise agreement.
PN2061
JUSTICE BOULTON: That's so in relation to the three awards or is it mainly the - - -
PN2062
MR MAXWELL: That's mainly in regard to the Construction Award. There are similar schemes in operation for the Mobile Crane Hiring or people covered by agreements covered by the Mobile Crane Hiring Award. There has been limited application in relation to people covered by the any agreements covering work that's covered by the Joinery and Building Trades Award.
PN2063
JUSTICE BOULTON: Construction would be one area, but what about the rest of the building game? You'd have a lot of smaller companies involved there, wouldn't you?
PN2064
MR MAXWELL: There would be. There is a great variance, but obviously up until 31 December 2014, there would have been no required to pay accident pay because of the transitional provisions, which would obviously have applied in New South Wales and Victoria particularly because of the accident pay provisions in state awards and because of the federal awards being common rule in those states.
PN2065
JUSTICE BOULTON: Somebody will eventually ask this, but we dealt with a global application in terms of take‑home pay orders. I'm not aware that any individual applications in relation to take‑home pay orders have been made. Isn't that in some way an answer to what Commissioner Bull has asked?
PN2066
MR MAXWELL: This is difficult to answer that question due to the fact that there could be a number of reasons why people have not made the application for take‑home pay orders. Hopefully no worker has been injured and been off work, and had to rely on accident pay. Secondly, the requirement for any take‑home pay orders would be dependent on when the injury occurred.
PN2067
I think it's fairly well recognised that the majority of people in the building and construction industry are away from work for at least the first week if not longer in January, so we then have to look at because we recognise that under the workers compensation scheme in New South Wales and as we refer to in the tables we've provided, in regard to the first 13 weeks it depends on if the employee is receiving over-award payments and, if they're working overtime, to calculate the extent to which accident pay would be necessary; because when you calculate the 95 per cent of their earnings, that 95 per cent may be higher than the minimum award rate. So that is one factor which could limit the amount of claims.
PN2068
There is then when the accident occurred and, as we say, we're now in roughly the 18th week or 19th week of 2015. It is unlikely that we will have seen many people that are injured for longer than 13 weeks that may be affected. The other issue is that because most employers were paying accident pay up until 31 December 2014, that in many cases they will be continuing to meet those payments because they may be unaware that the situation has changed.
PN2069
There are a range of factors that can influence the extent to which people may have made take‑home pay orders. If there's no accident pay in the awards, if we fail in our application, then it may be worthwhile coming back and reviewing this possibly in the next four‑yearly review, if there is one, to revisit that issue.
PN2070
JUSTICE BOULTON: In relation to at least the Mobile Cranes Award, do we assume that the length of accident pay was increased by agreement?
PN2071
MR MAXWELL: It's my understanding that that increase was by consent.
PN2072
JUSTICE BOULTON: Yes.
PN2073
MR MAXWELL: I should also point out that the award in Tasmania, the NAPSA that's referred to in appendix C - it's my understanding again that that award was made by consent.
PN2074
JUSTICE BOULTON: Would that have been what was maybe then loosely regarded as a paid rates award?
PN2075
MR MAXWELL: Sorry?
PN2076
JUSTICE BOULTON: Would it have been a paid rates award - - -
PN2077
MR MAXWELL: The Mobile Crane Hire Award?
PN2078
JUSTICE BOULTON: I'm sure it wasn't in the true sense, but - - -
PN2079
MR MAXWELL: I think it was up until the minimum rates you're taxing my memory now, but I think the 1989 national wage case that arose out of that in setting minimum rates based on the metal trades and building trades at a hundred per cent. I think, after then, the Mobile Crane Hiring Award stopped being a paid rates award and was a minimum rates award.
PN2080
JUSTICE BOULTON: I think again in answer to some questions, you said that the agreements you have are vastly superior to what's in the awards.
PN2081
MR MAXWELL: Yes.
PN2082
JUSTICE BOULTON: I think you said that maybe you were mainly talking about the Building and Construction Award, but does that apply also in the mobile cranes area?
PN2083
MR MAXWELL: That would apply in not all the mobile crane hire area, not all agreements, but in a substantial number. It wouldn't necessarily be the case in the National Joinery and Building Trades Award area where they would tend to rely on the accident pay provisions of the award, because most of those agreements are incorporated in the award and that's how they incorporated the accident pay.
PN2084
JUSTICE BOULTON: Thank you.
PN2085
COMMISSIONER BULL: Mr Maxwell, what do you mean by vastly superior? The mobile crane provision has for a year make‑up pay. What do you mean by having an agreement that's superior?
PN2086
MR MAXWELL: Sorry?
PN2087
COMMISSIONER BULL: What do you mean by terms in industrial agreements that would be superior than the award? You've got in there, for example, the mobile cranes says you have accident pay for up to 52 weeks.
PN2088
MR MAXWELL: Yes.
PN2089
COMMISSIONER BULL: So do you mean a longer period in the agreement or - - -
PN2090
MR MAXWELL: A longer period. I should explain that, for example, in Victoria you tend to find that most of the mobile crane agreements also refer to the Interlink insurance arrangements and, under those, they have make‑up pay for 104 weeks in total.
PN2091
COMMISSIONER BULL: All right.
PN2092
JUSTICE BOULTON: These provisions are all contained in, as it were, nationally applying awards and they apply throughout Australia.
PN2093
MR MAXWELL: The purpose of attachment C to our submission is to set out to what extent accident pay was a provision in the different awards. As we pointed out, in regard to the National Building and Construction Industry Award 2000, which is found at the top of page 50, that award applied in Queensland and New South Wales, Victoria, WA, Tas and South Australia where the accident pay made specific reference to the states of Queensland, New South Wales, Victoria and Western Australia. The standard that applied was 26 weeks under that award.
PN2094
If we go to the National Metal and Engineering On-Site Construction Industry Award 2002, that award applied in New South Wales, Victoria, South Australia, Tasmania, Queensland and the ACT. In that case the accident pay clause referred to Queensland, New South Wales and Victoria, and the standard was 26 weeks. Your Honour, I think I should make it clear, because a number of the employers have characterised our submission as seemingly trying to paint a picture that accident pay there was one national standard of accident pay applying across awards. That is not what our submission is. Our submission is that accident pay in the federal awards covered the majority of people covered by those awards in the relevant states.
PN2095
When you look at what that standard was that applied in those states where accident pay existed, the standard in terms of the Construction Award was 26 weeks and that is why we seek a national standard of 26 weeks applying in that award. Similarly, in regard to the National Joinery and Building Trades Award, again in that situation although that award did apply in the majority of states and territories, again the standard there was 26 weeks and that is why we seek 26 weeks in that award.
PN2096
The Mobile Crane Hiring Award is different. That award did apply in all states and territories, and the standard in that award was 52 weeks. That is the basis on which we seek 52 weeks in this application.
PN2097
JUSTICE BOULTON: When you say the majority, do you mean 51 per cent?
PN2098
MR MAXWELL: Can I put it this way, your Honour: I think if you take the construction industry workforce in Queensland, in New South Wales, Victoria and Western Australia as a percentage of the construction industry workforce - which on current estimates I think is approximately 1 million - you will find that those states cover the majority of building workers.
PN2099
If necessary, I can provide the statistics. We do on our web site produce an employment map which shows the rates of employment in the various states. I can quite happily provide the latest one of those to the Commission to show that.
PN2100
JUSTICE BOULTON: I think it would be interesting to know, if you're going to make those sort of submissions, if it's 51 per cent or it's 80 per cent or 90 per cent; what we sort of are seeing as people who might be employed under the awards where there would be already or in the past accident pay provisions applying.
PN2101
MR MAXWELL: Your Honour, I can provide you - - -
PN2102
JUSTICE BOULTON: If you can provide the information, it would be helpful.
PN2103
MR MAXWELL: We will do tomorrow.
PN2104
JUSTICE BOULTON: Good. I think we actually already foreshadowed in earlier proceedings that that sort of information would be useful.
PN2105
MR MAXWELL: Your Honours and Commissioner, starting at paragraph 35 of our written submission, we deal with award modernisation and accident pay. We set out what transpired during the award modernisation proceedings. The decision of the full bench on the priority modern awards has been referred to by many parties during the previous proceedings before the full bench, so I'll not dwell on it too long, save to say that the full bench accepted that accident pay being characterised as an allowance
PN2106
PROCEEDINGS INTERRUPTED
PN2107
MR ..........: I am sorry.
PN2108
MR MAXWELL: Your Honours and Commissioner, I was taking the Commission to the statement of the full bench on 12 September 2008. That's dealt with in paragraphs 35 and 36 of our written submission. We say it is clear from that decision that the full bench recognise that accident pay was an allowable matter for modern awards. During the award modernisation process, the full bench made it clear that it was the pre‑reform awards that is the National Building and Construction Industry Award, the Mobile Crane Hiring Award and the National Joinery and Building Trades Products Award - that were the instruments from which the main terms and conditions of the modern awards were drawn.
PN2109
We deal with that in paragraph 40 of our written submission and we refer to the relevant paragraphs that were contained in our written submission previously. Whilst the CFMEU sought inclusion of accident pay clauses that reflected the clauses contained in pre‑reform federal awards, the full bench decided to only include the model transitional provisions for accident pay, although no specific reasons were given. This is in regard to the stage 2 process under which those awards were determined.
PN2110
The full bench, however, did make the following observation and if I can refer you to paragraph 43 of our written submission where we quote paragraphs 19 and 21 of the stage 2 decision. In paragraph 19, the full bench said:
PN2111
In its 23 January 2009 statement, the Commission sought proposals and submissions as to the manner in which transitional issues should be dealt with. Most modern awards will contain terms which involve changes in minimum terms and conditions for many employees. That is because modern awards will replace a number, in some case many, pre-reform awards and NAPSAs and establish a uniform safety net for employees and employers formerly covered by those pre-reform awards and NAPSAs.
PN2112
The effect of section 576T is that while modern awards must not include terms and conditions of employment that are determined by reference to state or territory boundaries, a modern award may include such terms for an initial period of five years. It is no doubt the legislature's intention to permit the Commission to include transitional provisions in modern awards to cushion the impact of changes in wages and other conditions.
PN2113
In the case of employees, such provisions might deal with any reductions in their terms and conditions. In the case of employers, the focus might be on increases in costs.
PN2114
Then it goes on in paragraph 21:
PN2115
In its 19 December 2008 decision, the Commission included some transitional provisions in the priority modern awards, but indicated that, in general, transitional provisions were better considered later. The decision contains the following passage
PN2116
and they quote paragraph 106:
PN2117
We have received many submissions and suggestions concerning the way in which modern awards should deal with the multitude of transitional issues which may arise in the establishment of a safety net based predominately on modern awards and the NES. Transitional provisions must be developed that, in a practical way, take account of the intention of the consolidated request that modern awards not disadvantage employees or increase costs for employers.
PN2118
In the case of some conditions of employment, we have decided to include a specific transitional provision in the priority awards. These conditions are redundancy pay, accident pay and district allowances in Western Australia and the Northern Territory.
PN2119
In subsequent decisions, the full bench dealt with transitional provisions, but nothing further was said on accident pay apart from what was referred to in the 5 November 2010 decision dealing with the division 2B state awards. That's referred to in paragraph 47 of our written submission.
PN2120
COMMISSIONER BULL: Sorry to interrupt you. What do you say about the full bench's comment:
PN2121
We anticipate that an opportunity will arise to consider the formulation of a national standard to apply to all award covered employees.
PN2122
That doesn't seem to have happened.
PN2123
MR MAXWELL: Unfortunately, it hasn't happened. I think there was an expectation at the time that given there was a push for the harmonisation of occupational health and safety laws, there would also be a move to harmonise the workers compensation laws. Undoubtedly, the states to some extent may have gone back into their shells in regard to whether they support the harmonisation of workers compensation laws. We don't know, but obviously we don't have a national workers compensation scheme except to the extent that the Comcare scheme applies nationally.
PN2124
I should point out that there are employers in the building and construction industry that are covered by the Comcare scheme. For example, John Holland is a national builder that is covered by the Comcare scheme. We also understand that Lend Lease is looking to become self‑insurer outside of the various state insurance schemes, so there is a slight push in regard to people being covered by a national scheme; but we don't have a national scheme and because of that we now have these variances in terms of the workers compensation.
PN2125
We have had a situation where the standard of accident pay that was sought by the CEPU in regard to the three awards I mentioned, was for one standard to apply in each of those awards and that is still our position. Obviously the impact on employers will vary, but that will depend on the nature of the injury of the employee, what their earnings were, whether they were receiving over‑award payments and the amount of overtime they were working. Also, to some extent, the compensation scheme applicable.
PN2126
We note that I think there's evidence which or the issue that I took Dr Shaw to, which is the issue of the cross‑border arrangements, where you can have a situation where an employer can have workers in three different states and be covered by three different workers compensation schemes. To answer your question, there is no national workers compensation scheme, but we do not believe that that lessens the need for a national accident pay provision as a safety net in the awards.
PN2127
COMMISSIONER BULL: Your application doesn't provide for a national standard though, does it?
PN2128
MR MAXWELL: It applies for a national standard in each of those awards.
PN2129
COMMISSIONER BULL: All right. Thank you.
PN2130
MR MAXWELL: Just on that point, Commissioner and your Honours, we say that this full bench has been really given the task to determine what that standard should be in regard to the awards the subject of the applications before you. In our view, the options are if - you can provide one standard in each award or you can provide one standard applying across all awards or you can provide a standard that says there is no accident pay, but they are the issues that we see this full bench has to grapple with.
PN2131
In paragraphs 51 to 57, we refer to the critical mass of accident pay provisions in pre‑reform awards and NAPSAs. In paragraph 52, we refer to the General Retail
PN2132
Industry Award 2010 and the decision of the award modernisation full bench. In our written submission, we set out a quote there from paragraph 3 of that decision. I won't read it out, but that is something that we say is a factor to take into account in determining our application before the Commission.
PN2133
In our submission, we set out the history in arbitrated decisions relevant to accident pay for the awards that are covered by our application. In regard to the critical mass, we point out that the federal pre‑reform awards were the predominant industrial instruments. We deal with the National Building and Construction Industry Award in paragraph 54 in support of our claim that the NBCIA was the predominant industrial instrument.
PN2134
Just to, I suppose, labour the point in regard to the National Building and Construction Industry Award 2000, it was a common rule award in Victoria and had a number of registered employer organisations as respondents, including the AIG; MBA New South Wales; the Civil Contractors Federation; the Engineering Employers Association of South Australia; the Master Builders Association of ACT; the Master Builders Association of South Australia; the Master Builders Association of Tasmania; the Master Builders Association of Victoria; the Master Painters Association of Tasmania; the Master Painters, Decorators and Signwriters Association of New South Wales; the Metal Industries Association of Tasmania; and the Victorian Employers Chamber of Commerce and Industry.
PN2135
The consolidated respondency list made by Merriman C in 2000 included a further 332 pages of individually named respondents. The accident pay provisions in this award applied in Western Australia, Victoria, Queensland and New South Wales prior to March 2006. In paragraph 55, we deal with the National Joinery and Building Trades Products Award - - -
PN2136
JUSTICE BOULTON: Just to stop you there, the provision in that award, is that a similar provision as you're now seeking?
PN2137
MR MAXWELL: Yes.
PN2138
JUSTICE BOULTON: Is it the same definition of - - -
PN2139
MR MAXWELL: The clause there is identical to the one that was contained within the NBCIA 2000.
PN2140
JUSTICE BOULTON: In the sorry?
PN2141
MR MAXWELL: Sorry, the National Building and Construction Industry Award 2000.
PN2142
JUSTICE BOULTON: That's what you're seeking?
PN2143
MR MAXWELL: That's what we're seeking in the Construction Award, yes.
PN2144
JUSTICE BOULTON: In terms of the payment, the accident pay will work on the basis of is it ordinary time, plus shift allowance, plus industry allowances?
PN2145
MR MAXWELL: In terms of what we seek, we seek the ordinary and I perhaps need to explain this in regard to the Construction Award. We seek the ordinary time hourly rate for a 38 hour week, but it will also depend on whether the worker is a full‑time employee, a part‑time employee or a casual; but the rate that is determined is the ordinary time hourly rate.
PN2146
Now, I notice in that award there are definitions of the ordinary time hourly rate and when you look at how that's calculated, it does include the industry allowance and the job allowance for the daily hire and it does include the tool allowance for the trades; but we do not seek that that would include shift allowances, we do not seek that that would include the fares and travel allowance, so it is the base 38 ordinary hour rate that applies under that award.
PN2147
DEPUTY PRESIDENT KOVACIC: That's effectively the all‑purpose rate.
PN2148
MR MAXWELL: It's the all‑purpose ordinary time rate, yes.
PN2149
JUSTICE BOULTON: That's the same as with the National Building and Construction Industry Award or not?
PN2150
MR MAXWELL: That's correct.
PN2151
JUSTICE BOULTON: That award didn't apply in South Australia. Is that right? It would apply to named employers or what?
PN2152
MR MAXWELL: The award applied in South Australia through the respondency of the Master Builders Association of South Australia and the Australian Industry Group, but also they had named employers. The reason that accident pay in that award didn't apply to South Australia, goes back to the decision of Evatt J in 1975, because at that time the provisions of the workers compensation scheme required payment to be at the average weekly earnings for a period of 26 weeks or longer.
PN2153
Evatt J didn't see the need at that stage to insert accident pay applying in South Australia or Tasmania. That was because at the time awards were based on respondency and there wasn't the same, I suppose, legal obligations in terms of setting awards with national standards. Those awards, up until 2006 at least, did contain variations between the states as to what conditions applied. Obviously we are now under a different legislative arrangement and there is a requirement that awards apply national standards.
PN2154
JUSTICE BOULTON: Thank you.
PN2155
MR MAXWELL: Your Honours and Commissioner, we submit there can be no question as to the predominancy of the federal pre‑reform awards that we have referred to in paragraphs 54, 55 and 56. If I can then briefly deal with the impact of losing accident pay on the safety net of employees. As noted in paragraph 58 of our written submission, the impact of losing or not having accident pay as an award provision will vary depending on a range of factors, including the relevant workers compensation legislation, the length of time the employee is off work because of the work‑related injury and the industrial instrument covering an employee.
PN2156
In appendix D, we summarise the compensation payable under the legislation applying in each state and territory. There is clearly no uniformity in the workers compensation schemes as hoped for by the AIRC award modernisation full bench. In appendix E to our written submission, we set out the financial impact on injured workers if they do not have an award protection of 26 weeks' accident pay for key classifications in the three awards.
PN2157
If I can just take you briefly to appendix E of our written submission. I apologise for the smallness of the print, but the intent was to get it all on one page. What that table shows is that in regard to the Building and Construction General On‑Site Award 2010, we have used examples of the CW3 carpenter and CW2 steel fixer. In regard to the Joinery and Building Trades Award 2010, we have used the level 5 carpenter and joiner, and the level 2 assembler B. In the Mobile Crane Hiring Award, we've used the MCE1 level dogger and the MCE3 crane operator of the slew crane, 61 tonne to 100 tonne.
PN2158
We have then divided the periods into a first period of up to 13 weeks and a second period of between 14 to 26 weeks. What that table shows is that in the ACT, the Northern Territory, Queensland, South Australia, Tasmania and Western Australia, generally there will be no difference between what they will receive and the award rate of pay. However, in New South Wales, we find that in the first period that is the first 13 weeks if we take the carpenter, the loss to the carpenter would be in the range of zero to $41.84 per week, but that of course depends on the over‑award payments and overtime. We can see that if two or more hours of overtime is usually worked, then the amount would be zero.
PN2159
If we then go to the second period, which is the 14 to 26 weeks, we see that again the range is zero to $167.35 per week. Again, that would depend on the level of over‑award payments and overtime. If an employee only worked a 38‑hour week and they were subject to the 80 per cent rule that applies under the New South Wales workers compensation scheme, then they would potentially have a loss of $167.35 per week.
PN2160
DEPUTY PRESIDENT KOVACIC: Mr Maxwell, in terms of that first 13‑week period, you've indicated there that if an employee works more than two hours' overtime, the loss would be zero. What is the tipping point, if I describe it that way, for that second period, sort of 13 to 26 weeks?
PN2161
MR MAXWELL: I haven't worked out where the 80 per cent did arise.
PN2162
DEPUTY PRESIDENT KOVACIC: I'd be interested if you could do those calculations perhaps overnight, but also, too, what your sense is in terms of the extent to which employees in the industry would work overtime which goes beyond those tipping points.
PN2163
MR MAXWELL: Your Honour, I'll do my best. If not tomorrow, then I'll definitely provide it on Wednesday.
PN2164
DEPUTY PRESIDENT KOVACIC: That's fine. Thank you.
PN2165
JUSTICE BOULTON: Sorry, I'm not sure I understand it. When does the employee suffer no loss?
PN2166
MR MAXWELL: Under the workers compensation scheme, in New South Wales they receive 95 per cent of the average weekly earnings for the first 13 weeks and then that is reduced to 80 per cent. I stand corrected. My understanding is 80 per cent up until in the next period. If 80 per cent of the average weekly earnings is greater than the minimum award rate for a 38‑hour week, then the employee would receive no accident pay.
PN2167
On our calculation, in the first period if they worked two or more hours overtime, then, if it's 95 per cent, that would negate the need for accident pay. It would obviously depend in the second period how many hours of overtime would be equivalent to $167.35 per week, depending on the award rate that's applicable. It would then be complicated by the over‑award payments, as well.
PN2168
DEPUTY PRESIDENT KOVACIC: I accept there are a number of variables in there.
PN2169
MR MAXWELL: From that table, what we seek to show is that at least in New South Wales and Victoria, the absence of accident pay can lead to a situation where workers in those states will suffer a reduction or receive less than the award rate of pay if they weren't working regular overtime and receiving over‑award payments. Our main concern in this application is in regard to those workers who are only receiving the award rate of pay. As stated in paragraph 61 of the union's written submission - - -
PN2170
JUSTICE BOULTON: The effect of the claim is to take them back to the award rate of pay?
PN2171
MR MAXWELL: That's correct.
PN2172
JUSTICE BOULTON: The all‑purpose award rate.
PN2173
MR MAXWELL: The all‑purpose rate of pay in regard to the Construction Award. Obviously under the awards the calculation of the all‑purpose rate is different in all the awards. Again there is no uniformity across the modern awards and there is a separate full bench dealing or grappling with the concept of all‑purpose rate of pay, so I don't really want to say too much on that point.
PN2174
DEPUTY PRESIDENT KOVACIC: You don't want to make an all‑purpose submission.
PN2175
MR MAXWELL: No.
PN2176
JUSTICE BOULTON: Remind me what the all‑purpose rate includes.
PN2177
MR MAXWELL: In regard to the National Building and Construction Industry Award, it would include the industry allowance, the tool allowance, the special allowance and for those employees that are daily hire, the job allowance. If they're a refractory bricklayer, it would include the refractory bricklaying allowance. There are also a number of other allowances, depending on whether you're an electrician or a first aid person or a leading hand.
PN2178
UNIDENTIFIED SPEAKER: Simple and easy to understand.
PN2179
MR MAXWELL: Very simple and easy to understand once you know. For example, in regard to the Mobile Crane Hiring Award, it would be very simple in that it's the minimum rate plus the industry allowance. Your Honour, Commissioner, I was taking you to paragraph 61 of the union's written submission. The union and the overwhelming majority of employers place the health and safety of employees at work as the number one priority.
PN2180
The emphasis on occupational health and safety has reduced the number of serious incidents and we have been very fortunate in that we have avoided the types of incidents witnessed overseas, such as the very recent scaffolding collapse in Vietnam that led to the death of 14 construction workers and injury to 28 others; but, injuries at work still happen in Australia. In paragraphs 62 and 63, we set out the statistics on workers compensation claims in the building and construction industry. A number of these we refer to in our written submission. These figures are significant for the current proceedings.
PN2181
To repeat some of those figures, the 12,310 serious claims in the construction industry in the 2012‑13 financial year place it at number 3 out of all industries. Over a five‑year period, the construction industry accounted for 11 per cent of all serious workers compensation claims. The median time lost for serious claims in the construction industry was 6.4 weeks in 2011-12, up from five weeks in 2000-01. In 2011-12, 30 per cent of serious claims in the construction industry had compensation paid for 12 or more weeks off work.
PN2182
I should point out in paragraph 64 and as I've touched on in response to the questions of Commissioner Bull the majority of CFMEU members are covered by enterprise agreements and have superior benefits to the award. Accident pay is one of those benefits, but it has been well recognised that the workforce in the building and construction industry is itinerant and workers, including our members, will work for many different employers and be covered by different instruments at any particular time, including the award. It is, therefore, vital to them that the award safety net includes an accident pay provision.
PN2183
Neil Browne, the WorkCover officer of our Victorian branch, has provided a statement - which is exhibit CFMEU 3 which includes real life examples of injured workers in Victoria who have been off work on workers compensation. The spreadsheets attached to that statement show that a carpenter who worked for Evans Engineering was off work for 20 weeks. If he was not covered by an EBA and only relied on the award with no accident pay provision, he would have been paid $162 per week less than the award rate after 13 weeks.
PN2184
A concreter working for Mikcon Civil would have been paid $148.50 per week less than the award rate if he was covered by an award with no accident pay after 13 weeks. A labourer working for the Delta Group would have been paid $134.10 per week less than the award rate if he was covered by an award with no accident pay after 13 weeks. A dogman or dogger working for Plunkett Cranes would have been paid $170.50 per week less than the award rate if he was covered by an award with no accident pay after 13 weeks.
PN2185
A joiner working for Construction and Cleaner Services would have been $162.50 per week less than the award rate if he was covered by an award with no accident pay after 13 weeks. A seal fixer working for United Precast Pty Ltd would have been paid $139.70 per week less than the award rate if he was covered by an award with no accident pay after 13 weeks.
PN2186
The statement also provides evidence of Mr Browne's experience of dealing with injured workers who generally do not like being off work and prefer to be at work, and active on the job. He also sets out his views or belief of the way in which reducing income under the Victorian scheme increases the stress on workers and their families, and often leads to further problems such as major breakdowns, loss of homes and the overuse and misuse of medications.
PN2187
The witness statement of Sherri Hayward, an industrial officer with our New South Wales branch with prime responsibility for workers compensation matters, attests to the situation in New South Wales. That is found at exhibit CFMEU2. In paragraph 2, she provides statistics from the WorkCover authority of New South Wales. 23 per cent of workers compensation claims in the construction industry extend beyond the six‑month mark. 2542 claims in the 2012‑13 year were for less than six months, which means that over 75 per cent of workers compensation claims would fall within the 26‑week limit that we seek for accident pay.
PN2188
The statement explains in detail how the weekly benefits are calculated under the New South Wales scheme. It demonstrates the loss in earnings under the scheme for workers on award rates if there is no accident pay under the award. Importantly, in paragraphs 16 to 30, she explains the way in which the capacity to work test is applied and how this can have devastating effects on the income of injured workers who are assessed by an insurer as having some capacity to work.
PN2189
The determination of whether an injured worker can perform suitable employment does not require the insurer to take into account whether the work or the employment is available; whether the work or the employment is of a type or nature to be generally available in the employment market; the nature of the worker's pre‑injury employment; or the worker's place of residence.
PN2190
Under section 37 of the New South Wales Workers Compensation Act 1987, the weekly payment is reduced in the second period for employees who have a work capacity but have not returned to work. That's explained in the various calculations in Ms Hayward's statement. Ms Hayward also refers to her experience in dealing with injured workers and the stresses they face whilst off on workers compensation.
PN2191
In paragraphs 67 to 69, we deal with the financial impact on employers and what we see is the financial impact of including accident pay provisions in the award. An accident pay provision that provided for 26 weeks of make‑up pay would have no cost impact on employers in the ACT, Northern Territory, Queensland, SA, Tas and WA due to the fact that the legislation in those states and territories currently require equivalent payments for 26 weeks. Appendix D of our submissions sets out what those requirements are.
PN2192
Employers in New South Wales and Victoria who were previously required to pay accident pay as a transitional arrangement under the awards, would not have an increase in their costs compared to what they were required to pay up until 31 December 2014. The only employers who would experience an increase in costs would be those employers in
PN2193
New South Wales and Victoria who meet the criteria set out in paragraph 68 of our written submission. We submit that in the overall scheme of things, the number of employers affected would be very small.
PN2194
In paragraphs 70 to 86, we address the modern awards objective. Section 134(1) of the Fair Work Act requires the Commission to take into account a number of matters as part of ensuring that a modern award provides a fair and relevant minimum safety net of terms and conditions. As noted in the Preliminary Jurisdictional Issues decision in paragraph 60 and, your Honours, in paragraph 70 of our written submission we refer to the Preliminary Jurisdictional Issues decision by the full bench, and I refer you to paragraph 60. In particular, points 6 and 7 that are contained in paragraph 60. In number 6, the full bench said:
PN2195
There may be no one set of provisions in a particular modern award which can be said to provide a fair and relevant minimum safety net of terms and conditions. There may be a number of permutations of a particular modern award, each of which may be said to achieve the modern awards objective.
PN2196
In number 7, the full bench went on:
PN2197
The characteristics of the employees and employers covered by modern awards varies between modern awards. To some extent, the determination of a fair and relevant minimum safety net will be influenced by these contextual considerations. It follows that the application of the modern awards objective may result in different outcomes between different modern awards.
PN2198
Your Honours, I should point out that there is a typing mistake in paragraph 72 of our written submission in the third line, where it refers to the annual wage review. That should be 2013 to 2014. In paragraphs 72 to 76, we deal with section 134(1)(a), the relevant living standards and the needs of the low paid.
PN2199
We refer to the conclusions reached in the annual wage review 2013‑2014 decision which provide guidance on the relative living standards and what constitutes low‑paid workers. We submit that based on those conclusions, a significant proportion of award‑reliant workers covered by the Building and Construction, Mobile Crane Hiring and Joinery and Building Trades Awards will be considered low paid. Award‑reliant employees who suffer a workplace injury and who receive less than 100 per cent of the award wage, would clearly fit into the category of low paid.
PN2200
As the minimum award rates in modern awards have been set, taking into account the relative living standards and the needs of the low paid, it is vital that workers covered by the modern awards maintain those rates of pay. In the case of injured workers, this is best achieved by the retention or inclusion, given that what we seek is the inclusion, of accident pay provisions.
PN2201
In paragraphs 77 to 78, we deal with section 134(1)(b) of the Fair Work Act and the need to encourage collective bargaining. In paragraph 79, we deal with section 134(1)(c) and the need to promote social inclusion through increased workforce participation. In paragraphs 80 to 82, we deal with section 134(1)(d), (da) and (e), in which we say that this application has a neutral effect on these criteria, although to the extent that accident pay acts as an incentive to an employer to provide a safe and healthy workplace, its ongoing operation can have a positive impact on the provision of efficient and productive work.
PN2202
In regard to section 134(1)(f), the likely impact of any exercise of modern award powers on productivity, employment costs and the regulatory burden, we say that the inclusion of the accident pay clause will have a negligible effect on business. There will be no negative effect on productivity as the clause is only activated once a worker is already injured and off work on workers compensation. There may be a positive effect to the extent that it influences employers to give greater attention to workplace health and safety.
PN2203
The likely cost impact has already been addressed in our submission and again we submit that the impact is negligible. We deal with sections 134(1)(g) and (h) in paragraphs 84 and 85 of our written submission. We submit that based on our analysis, the CFMEU's construction and general application is consistent with the modern awards objective.
PN2204
The final section of our written submission contains brief submissions on sections 134, 138 and 154 of the Fair Work Act. We do so on the basis that these matters were raised in the proceedings to remove the sun‑setting provisions. These matters are dealt with in paragraphs 87 to 92 of our written submission. In summary, we say that accident pay is an allowance and therefore a permitted matter. Accident pay is required to be included so that the awards achieve the modern awards objective and that as the application seeks insertion of one standard to apply in every state and territory, it does not contravene section 154 of the Fair Work Act.
PN2205
Your Honours and Commissioner, we note that the mining and energy division of the CFMEU has filed a supplementary submission on section 154 of the Fair Work Act. We would seek to rely on that submission.
PN2206
JUSTICE BOULTON: Sorry, who has filed it?
PN2207
MR MAXWELL: There was a submission made by the Construction, Forestry, Mining and Energy Union that was filed on 30 March 2015.
PN2208
JUSTICE BOULTON: Yes.
PN2209
MR MAXWELL: Your Honour, we'd seek to rely on that submission in regard to the argument regarding section 154 and we would, therefore, suggest it be marked as an exhibit in these proceedings.
PN2210
MR CALVER: Surely you should seek leave to submit it late.
PN2211
MR MAXWELL: If I can put it this way, your Honour: the AIG's submission deals with section 154 and the CFMEU Construction and General Division has responded because the matters raised potentially go to the operation of the accident pay provision in the Black Coal Mining Industry Award.
PN2212
JUSTICE BOULTON: So you would like their submission marked as one of your exhibits?
PN2213
MR MAXWELL: That's correct.
JUSTICE BOULTON: CFMEU5.
EXHIBIT #CFMEU5 SUBMISSION OF CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION FILED 30/03/2015
PN2215
MR MAXWELL: Your Honours and Commissioner, briefly just to conclude our submissions in support of our application, we say there is substantial merit to our application to vary the awards and restore the accident pay provisions into the awards. Probative evidence has been provided and cogent reasons advanced in support of the application.
PN2216
Accident pay was recognised by the full bench during the award modernisation as a component of the award safety net and implicit in the inclusion of accident pay when the modern awards were created was a recognition that accident pay was necessary to ensure that awards met the modern awards objective.
PN2217
Without accident pay provisions proposed by the CFMEU Construction and General Division, the awards will not meet the modern awards objective and the most vulnerable of employees that is, injured workers on the award rates of pay will have their safety net significant reduced. We, therefore, submit that the Commission should vary the three awards in accordance with the draft determinations set out in appendix A of our written submission.
PN2218
Your Honours and Commissioner, obviously we will have quite a few things to say in reply to the various employer submissions in these proceedings, but it is, we would suggest, more appropriate that we do so once they have had an opportunity to speak to their submissions, if the Commission pleases.
PN2219
DEPUTY PRESIDENT KOVACIC: Mr Maxwell, can I take you back to paragraph 68 of your submissions, which just highlights those employers in New South Wales and Victoria that might experience an increase in costs. Are you able to say anything in terms of whether those employers would be concentrated in any particular areas of either of those states or anything that you might say - you know, where they may be located?
PN2220
MR MAXWELL: It would be difficult to say where they would be or whether any specific cost is for example, it is quiet common, let's say, in the residential housing industry to find people working on construction sites on a Saturday, so obviously those people work overtime. In regard to mobile cranes, mobile cranes is a 24‑hour responding industry so obviously there are people working on weekends and working shift work, and a whole range of other situations, so it would be very difficult to identify with any precision those workers that would fit into that category. Thank you, your Honour.
PN2221
JUSTICE BOULTON: Thank you, Mr Maxwell. Who is going to be next?
PN2222
MR CRAWFORD: If I may.
PN2223
JUSTICE BOULTON: Mr Crawford, okay. We'll hear you in five minutes.
SHORT ADJOURNMENT [3.29 PM]
RESUMED [3.36 PM]
PN2224
JUSTICE BOULTON: Mr Crawford?
PN2225
MR CRAWFORD: Thank you, your Honour. I have a folder to hand up that just contains all the documents we're relying on in this case. I've provided a copy to at least two of the employee groups. Do you have that, your Honour?
PN2226
JUSTICE BOULTON: It's just what we need, another folder.
PN2227
MR CRAWFORD: I was trying to make things a bit easier. I don't know if I've achieved that.
PN2228
JUSTICE BOULTON: Yes. Proceed, please.
PN2229
MR CRAWFORD: So behind tab 1 of the folder, your Honour, are some documents that I'd like to get marked. The first is our amended application. That contains the draft determinations we're seeking in relation to the seven awards.
PN2230
JUSTICE BOULTON: Sorry, this now contains things that are different than what we've already got or what?
PN2231
MR CRAWFORD: Not different. I mean, it has got a lot of documents in here that I've referred to in our previous submissions. It has got some cases in there that I've referred to.
PN2232
JUSTICE BOULTON: Are you re-filing your submissions here or not?
PN2233
MR CRAWFORD: I don't think the amended application has been marked.
PN2234
JUSTICE BOULTON: I'm just trying to work out the contents of the folder.
PN2235
MR CRAWFORD: There will be some overlap. I mean, all the witness statements I've put in here to try and make things easier, but obviously you've already got those.
PN2236
JUSTICE BOULTON: Right.
PN2237
MR CRAWFORD: You would already have the outline of submissions and the amended application. It's just that they're not marked yet.
PN2238
JUSTICE BOULTON: So you want us to mark what is in here?
PN2239
MR CRAWFORD: Not all of it. Just the documents I was going to take you to, if that's okay.
PN2240
JUSTICE BOULTON: Yes.
PN2241
MR CRAWFORD: The amended application, just so it's clear which awards we're pursuing claims for and the content of the draft determinations that we're seeking. I think we'd be up to AWU12.
JUSTICE BOULTON: The amended application, that will be AWU12.
EXHIBIT #AWU12 AWU'S AMENDED APPLICATION
PN2243
MR CRAWFORD: Then there is our - - -
PN2244
JUSTICE BOULTON: The outline?
PN2245
MR CRAWFORD: The outline of submissions, which is dated 18 February.
PN2246
JUSTICE BOULTON: But that's the same as what we previously got.
PN2247
MR CRAWFORD: Correct, yes.
JUSTICE BOULTON: So that will be AWU13.
EXHIBIT #AWU13 AWU'S OUTLINE OF SUBMISSIONS DATED 18 FEBRUARY
PN2249
JUSTICE BOULTON: The next one?
PN2250
MR CRAWFORD: The final one this is actually a new document. It's a summary of the pre‑modern award entitlements. We had provided one previously in relation to the interim relief applications, but basically I've tried to file a simpler and easier to understand version. The version that we filed previously contained a lot of awards in the list that weren't actually relevant to the modern award that was ultimately made. They were highlighted in my previous documents.
PN2251
The list that I've used for this document, which I'm referring to now, is actually from the Fair Work Commission research department.
PN2252
JUSTICE BOULTON: Right.
PN2253
MR CRAWFORD: The web site that I got the list from is identified on the first page.
JUSTICE BOULTON: So you want me to mark this as an exhibit: AWU14.
EXHIBIT #AWU14 SUMMARY OF PRE-MODERN AWARD ENTITLEMENTS
PN2255
MR WARD: If I can we haven't seen this before. We don't object to it being tendered, but we may need to respond to it in our submissions.
PN2256
JUSTICE BOULTON: Yes.
PN2257
MR CRAWFORD: Obviously we don't oppose that, your Honour. My understanding is all the awards identified here were identified in our previous document. There is just a lot of additional stuff that has been left out.
PN2258
JUSTICE BOULTON: Right. Then you've given us a copy of all the witness statements.
PN2259
MR CRAWFORD: Yes, I have. Again, I don't know if that helps a lot. In relation to the Dixon statement, which is AWU1, I have struck out paragraph 11 because that was removed.
PN2260
JUSTICE BOULTON: Yes.
PN2261
MR CRAWFORD: Those are all the documents that I wanted marked, your Honour.
PN2262
JUSTICE BOULTON: You've given us a year's supply of Post‑it notes to - - -
PN2263
MR CRAWFORD: Yes. Again, I was just trying to make things easier because - - -
PN2264
JUSTICE BOULTON: Yes. Thank you.
PN2265
MR CRAWFORD: Your Honour, if I may, I'd like to take you to some aspects of the evidence now. I'll just go in order of the documents marked. Mr Dixon, who is one of our Western Australian organisers, says at paragraph 7 that his experience has been that accident pay is a standard condition in the hydrocarbon and oil refining industries. At paragraph 9, Mr Dixon refers to award provisions often being discussed in negotiations for an enterprise agreement.
PN2266
At 10, he goes on to state that if accident pay provisions are removed from the relevant modern awards in this case, hydrocarbons and oil refining he feels it will be more difficult to keep those conditions and agreements in the future. Obviously Mr Dixon considers that the implications of this case in terms of awards will flow on into agreement negotiations, as well. At 12, Mr Dixon refers to AWU members in the hydrocarbons industry often working under common law employment contracts and obviously legally those contracts are underpinned by the relevant award.
PN2267
AWU2 is a statement by Mr Addison, who works at Tomago Aluminium, as you can see at paragraph 1. Now, I would point out that the Aluminium Award isn't actually subject to these proceedings, but we're filing this witness statement on the basis that it's general evidence about the effect of accident pay on workers. A lot of the evidence, including by the employees, in this case is of a general nature, so what we've generally tried to do with the witness statements from our members is provide practical examples of how workers who have received accident pay actually react.
PN2268
You can see, at paragraph 5, Mr Addison tripped in the bake oven at work and he burnt his hands and his face. He was off work for about a month. At 11, he states:
PN2269
Although 5 per cent doesn't sound like much, it does make a difference when you have your financial commitments structured around normal weekly wages.
PN2270
He says at 12 that the accident pay did not discourage him from returning to work. He was saying that he found himself thinking about things too much when he was at home and he was glad to get back to work on light duties as soon as he could.
PN2271
AWU3 is a statement from Damon Barbante. He works in the land management industry in Victoria. Mr Barbante's statement is a bit different to the other ones that we've filed, because Mr Barbante actually didn't receive any accident make‑up pay, so his evidence goes to the experiences of a worker who suffered a loss in earnings because they did not have access to accident pay.
PN2272
You can see at paragraphs 4 and 5 that Mr Barbante injured his shoulder in or around 2007. He was off work for quite a lengthy period, including when he had a shoulder reconstruction. At paragraphs 7 and 8, he talks about the loss in pay that he suffered under the Victoria workers compensation scheme. At paragraph 9, he refers to being unable to meet his normal financial commitments and having to move back in with his parents, which, at paragraph 10, he states that was embarrassing because he is in his 30s.
PN2273
JUSTICE BOULTON: Is he covered by one of the awards that you're seeking - - -
PN2274
MR CRAWFORD: He would be under the Gardening and Landscaping Services Award, I believe.
PN2275
JUSTICE BOULTON: The Gardening and Landscaping Award.
PN2276
MR WARD: Your Honour, that's an assertion. The evidence doesn't attest to that. Whether that is true or not is not in evidence.
PN2277
MR CRAWFORD: That, I would say, is really an award interpretation exercise. The statement includes the work he does. I reiterate my previous point that what we're trying to do here is provide general evidence about the actual feelings of workers who receive accident pay. Even if it's in an industry not covered by the application, we still say it's relevant. A lot of the evidence relied upon by the employer parties is not specific to the awards in these applications. It's general in nature about step‑downs. I mean, it has been admitted, but we say it's still relevant.
PN2278
At paragraph 11, Mr Barbante talks about suffering from depression and anxiety. He says that the loss of income was a big factor in his. At paragraph 12, he says he felt like he was getting punished for getting injured at work and he started feeling very negatively towards his employer. It made it feel like the injury was his fault. He says he became very bored, at paragraph 13, and he was keen to get back to work as soon as he could.
PN2279
At paragraph 15, he talks about how he enjoys his job. At paragraph 16, he talks about how receiving his normal income would have helped him a lot and he feels, at paragraph 17, that a lot of the stress and negativity he suffered when he was recovering could have been avoided. At paragraph 18, he talks about not wanting anyone else to go through what he went through.
PN2280
At AWU4, is a statement from Robert Gilbert, who works at Downer EDI. He injured his left knee at work in 2013. That's in paragraph 4. At paragraph 6, he talks about the periods that he has had off work. At paragraph 8, he talks about how Downer has topped up his workers compensation payments. At paragraph 9, importantly, he talks about those accident pay payments making him feel positive towards Downer, because he felt that they were looking after him, I guess, in his time of need. Then he also refers to the extra money coming in handy.
PN2281
Then it appears he was at some point cut off from the accident pay and then he says at paragraph 10, in contrast, when they
PN2282
told me they would no longer be paying the accident pay, felt disappointed and annoyed.
PN2283
Again, he felt like he was being punished for hurting his knee at work. He says, at paragraph 12, he thought it was unfair for him to have to deal with his injured knee which impacts upon his whole life and then also to not receive his full pay. At paragraph 13, he says he wasn't any less keen to get back to work when he was receiving accident pay, but again he felt positive towards Downer because they were looking after him when he was injured and he was looking forward to getting back to his normal work for them.
PN2284
JUSTICE BOULTON: It's not clear what award he might be covered by, is it?
PN2285
MR CRAWFORD: It's not entirely clear, suffice to say I'd probably accept it's not one covered by our applications.
PN2286
JUSTICE BOULTON: And he is a supervisor, so I wonder a site supervisor.
PN2287
MR CRAWFORD: Yes. He's working on the NBN projects. I'm not sure if it's the Telecommunications Award or perhaps a construction award, depending on what he's doing. At paragraph 3, he indicates that he has got a common law employment contract. AWU5 is a statement from Ronald Grooby, who works at BlueScope Steel, which I don't think is controversial. That would be covered by the Manufacturing Award.
PN2288
MR WARD: I object to that, your Honour. There is no evidence of that. If my friend wants to make that assertion, that's a matter for him, but there's no evidence of that.
PN2289
MR CRAWFORD: I don't press that. At paragraph 6, Mr Grooby refers to injuring his shoulder at work in 2012. He was off work for about three months. That's at paragraphs 6 and 7. At paragraph 8, he refers to his entitlement to accident make‑up pay and, at paragraph 9, he says that was very important to him while he was off work because it relieved the stress of money issues. He had no issues at home as a result.
PN2290
He is saying without the top‑up payment, he would have felt additional pressures at home due to having less money. At paragraph 11, he's saying the top‑up payment did not discourage him from getting back to work. He returned to work as soon as he could and was graded back into full shifts.
PN2291
AWU6 is a statement from Robyn Knorr, who works at APT AM Employment Pty Ltd in Victoria. At paragraph 5, it indicates that she hurt her knee falling up brick stairs at work in 2011. She was off work for eight months in 2011. Ms Knorr did receive accident make‑up pay and, at paragraph 8, she talks about it being very important to her while she was off work. She was financially able to do everything that she would normally do. It reduced the stress and worry of bills and other expenses, and allowed her to manage her financial obligations. At paragraph 10, she says that:
PN2292
The make-up pay provided no disincentive to return to work. I did not want to be off work due to injury or illness and got back to full duties as soon as I was able to do so. The make‑up payment relieved the stress and unnecessary complications that would come from a lack of money.
PN2293
AWU7 is a statement from Brian Lawry who, you can see at paragraph 1, works at the Victorian Department of Environment, Land, Water and Planning as a field officer. In 2007, he was on a quad bike which rolled. He broke his elbow, ankle and six vertebrae. He was initially off work for 13 weeks and then has had various other periods off work. At paragraph 9, he talks about accident pay and says the accident pay has been important to him because it has allowed him to continue meeting his financial commitments.
PN2294
At paragraph 10, he talks about being able to meet his financial commitments, including child support, school fees and other living expenses on his full wage; and that any reduction will place him under financial strain. At paragraph 11, he says he wasn't discouraged from returning to work because of accident pay and explains, at paragraph 12, that that is because he loves his job. He was eager to get back to work as soon as he could. The accident pay just eased the financial pressure on him whilst he couldn't work.
PN2295
AWU8 is a statement of Robert McAllister. You can see, at paragraph 1, he works at BlueScope Steel in Victoria. At paragraphs 3 and 4, you can see that he hurt ligaments in his leg in 2014 and he has been off work since 27 October 2014, including having surgery. At paragraph 5, he talks about receiving accident pay and, at paragraph 6, he says that was a massive benefit. At paragraph 7, he refers to his financial commitments being structured around his normal earnings, so any reduction would mean he has to make other arrangements.
PN2296
At paragraph 8, he talks about being grateful that he has not had to worry. I think he is referring to any reduction in pay whilst he has been recovering from his injury. At paragraph 9, he talks about the accident pay not discouraging him from returning to work.
PN2297
I feel like the company has treated me well during this time and I want to do the right thing by them, and get back to work as soon as possible.
PN2298
Again, that's evidence of a positive effect on the employment relationship as a result of accident pay. AWU9 is a statement from Peter Oseckas, who works at Arrium (Onesteel Division) in Victoria. He injured his knee in 2010 or 2011. That's at paragraphs 4 and 5. He has had to have a partial knee reconstruction; off work for two and a half months. He did receive accident pay again.
PN2299
At paragraph 8, he says it helped a lot and meant that he did not have to worry about finances such as bills and his mortgage. It meant there was no mental stress while he was recovering and could focus on regaining strength after his injury. At paragraph 9, he says the payment didn't discourage him in any way from returning to work as soon as he was able to. He says, at paragraph 10:
PN2300
My employer was looking after me whilst I was injured and I wanted to get back to work as soon as possible to do the right thing by them. I felt no desire to take more time off work than was needed.
PN2301
Again, that's further evidence of a positive effect on the employment relationship from accident pay. AWU10 is a statement of Anthony Pisano, who works at Australian Vinyls in Victoria. He suffered an injury to his neck in 2007. The nature of his injury and his time off is in paragraphs 6, 7 and 8. He did receive accident pay.
PN2302
At paragraph 11, the talks about receiving his normal wages being very important whilst he was off work, as it meant he did not have the stress of managing household bills and house repayments. It allowed him to focus on treating his injury and getting back to work. He says at paragraph 13:
PN2303
Receiving normal wages has not impacted on my return to work. I feel better when I am active and putting into the team at work, and was keen to get back to work as soon as I was able to.
PN2304
That is the extent of our evidence from AWU members. I assume we are still breaking at 4.00.
PN2305
JUSTICE BOULTON: Yes.
PN2306
MR CRAWFORD: I will just deal quickly with Mr Walton and then, unfortunately, I might need to resume in the morning.
PN2307
JUSTICE BOULTON: That's something for us to look forward to.
PN2308
MR CRAWFORD: AWU11 is the statement of Mr Walton, who is the assistant national secretary of the AWU. I just wanted to refer to paragraph 7, where Mr Walton gives evidence about the AWU having a lot of enterprise agreements in the concrete products, hydrocarbons and oil refining industries. He says, at paragraph 8 that we do have some agreements in the other industries named in our application, but they are not as prevalent. Mr Walton says, at paragraph 9, that from his experience
PN2309
the terms in the modern award are very important to AWU members, even if they are covered by an enterprise agreement.
PN2310
He says, at paragraph 10:
PN2311
This is because the relevant award is almost inevitably used as a reference point and benchmark in enterprise agreement negotiations.
PN2312
At paragraph 11, Mr Walton indicates that if there is not accident pay provisions in the awards going forward, he thinks
PN2313
it will be difficult for the AWU to keep accident pay conditions in enterprise agreements in the future.
PN2314
JUSTICE BOULTON: Thank you, Mr Crawford. We will resume at 10 o'clock in the morning.
ADJOURNED UNTIL TUESDAY, 26 MAY 2015 [4.00 PM]
LIST OF WITNESSES, EXHIBITS AND MFIs
EXHIBIT #AWU11 AMENDED WITNESS STATEMENT OF MR WALTON PN1681
TRACEY BROWN, AFFIRMED..................................................................... PN1686
EXAMINATION-IN-CHIEF BY MR FERGUSON....................................... PN1686
EXHIBIT #AIG1 WITNESS STATEMENT OF TRACEY BROWN......... PN1698
CROSS-EXAMINATION BY MR MAXWELL............................................. PN1789
CROSS-EXAMINATION BY MS STARR...................................................... PN1839
CROSS-EXAMINATION BY MS WILES...................................................... PN1855
CROSS-EXAMINATION BY MR BURNS..................................................... PN1896
CROSS-EXAMINATION BY MR NGUYEN................................................. PN1923
RE-EXAMINATION BY MR FERGUSON.................................................... PN1940
THE WITNESS WITHDREW.......................................................................... PN1954
EXHIBIT #CFMEU4 WRITTEN OUTLINE OF SUBMISSIONS OF THE CFMEU PN2025
EXHIBIT #CFMEU5 SUBMISSION OF CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION FILED 30/03/2015................................................................................. PN2214
EXHIBIT #AWU12 AWU'S AMENDED APPLICATION........................... PN2242
EXHIBIT #AWU13 AWU'S OUTLINE OF SUBMISSIONS DATED 18 FEBRUARY PN2248
EXHIBIT #AWU14 SUMMARY OF PRE-MODERN AWARD ENTITLEMENTS PN2254
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