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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
9.38 AM, THURSDAY, 28 MAY 2015
Continued from 27/05/15
PN3916
JUSTICE BOULTON: Good morning, Mr Ward.
PN3917
MR WARD: Thank you, your Honour. Can I just indicate for the record that I now appear for Master Builders Australia Ltd as well, and before I carry on from where I left off last night, the Australian Retailers Association who are a member of the Australian Chamber of Commerce and Industry contacted me last night and have asked me to have their submission filed in these proceedings marked. I have a copy of it. I'm going to apologise, your Honour, I don't know when it was actually filed because it's not dated. But it's on the website. It looks like that. If I could ask to have it marked this morning sort of to get it out of the way so I don't forget, and I think that would be ACCI 4.
PN3918
JUSTICE BOULTON: Yes, so that's the Australian Retailers Association submission?
PN3919
MR WARD: Yes, your Honour.
JUSTICE BOULTON: ACCI 4.
EXHIBIT #ACCI4 WRITTEN SUBMISSION OF AUSTRALIAN RETAILERS ASSOCIATION
PN3921
MR WARD: Thank you, your Honour. Yesterday evening I was taking the Commission through the evidentiary case by the unions. I was finishing off with the Australian Workers Union. I make two final comments about their evidentiary case now and then I'll move on to the ASU. In our submission, the only findings of fact that you might take from all of their evidence relevant to this case could be a finding of fact about Mr Barbante when his income dropped to 20 per cent and he says he had significant difficulties. He doesn't tell us what they really were, but he says he did.
PN3922
That might go the question of fairness in 134 in terms of a fair and relevant minimum safety net, and the rest of findings of fact largely around that question of enterprise agreements and enterprise bargaining, which as we'll submit later on may or may not be relevant for the limb of 134, which deals with the promotion of enterprise bargaining. But that's the extent of their case. I turn now to the ASU's case. The ASU is seeking to move this Commission to vary, on my count, nine awards; the Airline Operations Award, the Business Equipment Award, the Clerks Private Sector Award, the Contract Call Centre Award, the Labour Market Assistance Award, the Legal Services Award, the Local Government Award, the Rail Industry Award, and the Social and Community Services Award.
PN3923
Several of those awards are very, very, very substantial awards. The Clerical Award is probably the award that has uncontroversially the broadest scope of coverage in terms of touching Australian businesses, and awards such as the Social and Community Services Award obviously cover a very, very large sector of the economy. Their evidentiary case is limited to the statement of evidence of Casey Susan Young which is ASU 1 in these proceedings, and if I ask the Bench to go to that now. Ms Young is a director legal and industrial of what appears to be the New South Wales part of the union, not the federal part of the union, and I hope I've got that right.
PN3924
Her statement in paragraph 2 to 9 does no more than discuss her understanding of how the New South Wales workers compensation system works. Now that's from an evidentiary perspective neither here nor there. Let's assume that she has got it right though. She then goes on at paragraph 10 through to paragraph 15 to give evidence about the Midcoast County Council Enterprise Agreement 2012 and it appears that her evidence in that regard is largely to tell this Commission that they have accident pay in that agreement and to explain to you how it works. Now it is relevant to note from what we've understood that the Midcoast County Council Enterprise Agreement 2012 is an enterprise agreement of the New South Wales Industrial Relations Commission.
PN3925
That wouldn't come as a surprise to this Commission because the employer is a council regulated by the Local Government Act 1993 New South Wales and as the Commission is probably aware, because of that and because of the operation of the Fair Work State Declarations Employers Not To Be National System Employers Endorsement 2009 and the Industrial Relations National System Employers Order 2009, New South Wales councils are not national system employers and therefore their employees are not national system employees either. So the evidence is about one enterprise agreement regulating an employer who is not part of the federal system.
PN3926
I'm not sure in terms of drawing findings of fact to help you make decisions about the nine awards under consideration and the modern awards objective, I'm not sure if that takes you anywhere at all. She then goes in paragraphs 16, 17 and 19, paragraph 18 having been struck out, just to simply express her opinion about workers compensation, and in our respectful submission no findings of fact can be drawn from that which in any way allow the Commission to have considerations relevant to section 134 of the Fair Work Act relevant to these proceedings. So it wouldn't come as a shock that we say to the Commission that the ASU have in effect put on no evidence of any probative value in relation to any of their awards.
PN3927
I come then to the CFMEU. The CFMEU are seeking to move the Commission to vary three awards, building and construction, joinery and building trades and mobile cranes, and they've put on a case of two union officials and a retired union official. I note straight away that there's no evidence here from any employee. There's no evidence here from any employee covered by a modern award. There's no evidence of an employee covered by a modern award sustaining an injury and explaining to this Commission what the circumstances that they experienced were. There's no evidence of that whatsoever.
PN3928
Now Mr McDonald put on a statement which was CFMEU 1. I say at the beginning that I have the utmost personal respect for Mr McDonald. He's a legend in the industrial relations community, if I can say that. I don't wish in any way to say anything critical of him personally. This evidence represents nothing more than the nostalgic recollections of why the BWIU started an industrial dispute in 1970 to 1971. It was disputed a different time in a different industrial context and to the extent that that dispute gave rise to proceedings, they gave rise to the proceedings in the then Industrial Commission of New South Wales, and that Commission operated under the Industrial Arbitration Act 1940 and as the Bench would be familiar, that Act is a materially different scheme of legislation to the Fair Work Act.
PN3929
That Act allowed the Industrial Commission of New South Wales to inquire into any industrial matter whatsoever, and to make whatever findings it thought were appropriate. Now with respect, what the history of why a union ran a dispute 30-odd years ago, what findings of fact you could draw from that statement of evidence that in any way could assist you in your consideration of section 134 is beyond me. We say nothing is of assistance in relation to that statement. Ms Hayward, she has filed a statement which is now CFMEU 2 in these proceedings. Now Ms Hayward is an official of the New South Wales branch of the union and her experience is clearly New South Wales based.
PN3930
At paragraph 2 of her statement she does give the Tribunal the benefit of some New South Wales WorkCover Authority statistics relevant to the building and construction industry in New South Wales. They're not referenced. It's generic in nature. It's very general in nature but it does allow the Tribunal to at least understand some of the things that are happening in terms of aggregate injuries in New South Wales. It doesn't go on to explain to us whether or not that's relevant to people under a modern award, these awards, enterprise agreements, or whatever, but at least there is something that you can look at there.
PN3931
What she then goes on to do - and I'll try and say this as fairly as I can - is to give us a lesson in mathematics. That is, she then goes on for the rest of her statement to simply do no more than this. She says, "Assume a person was in this situation, this is how in that situation the New South Wales workers compensation scheme would apply". It's the findings of fact that can be made from that are purely that, that if somebody was in that situation maybe those maths were right. She gives no evidence about anybody in that situation. You don't know how many people are or are not in that situation or what their personal circumstances are should they be in that situation. It's just mathematics. It's a little cute as well in how she puts her mathematics. In particular if I take the Bench to paragraph 21 of her statement, because the really dramatic mathematics comes at the back. She says in 21 "Commonly" - I'll withdraw that. I'll start at 20. She says:
PN3932
The calculation of E is not confined to an analysis of what the injured is currently earning but extends to a calculation of what the insurer decides the injured worker is able to earn in suitable employment, applying a definition of section 32A and the WCA.
PN3933
So she's talking about people who are determined by the scheme to be capable of working to some extent. Then she goes on to say in 21:
PN3934
Commonly, building and construction workers are found to have a capacity to work as delivery drivers earning an hourly wage of approximately 21.89 per hour. The following examples rely on a decision that finds that the injured worker has a capacity to work as a delivery driver at least 20 hours per week earning approximately $437.89 gross per week.
PN3935
Then she goes on to make some more mathematical assumptions. There's no evidence of who is actually in this scenario. There are no real living people in this scenario. It's all theoretical again. The point about the mathematics is this though, the assumption that she posits in 21 is that the person is actually working 20 hours a week earning $437.89. When she comes to do her maths in the paragraphs that follow she has pretended they're not actually earning any of that money. So she has tried to give you the most dramatic mathematical example that she can give you. So just be cautious that even the maths lesson, and it is nothing more than a maths lesson, is a little disingenuous as to how it's put forward.
PN3936
Because of course there would be many scenarios as a maths lesson where those actual additional incomes would be earned and the person would have the benefit of them. But there's no evidence about any of that one way or the other. There's no evidence. Then finally at 31 she talks just very briefly about how stressful people find it dealing with these things when they're on workers comp. It doesn't give us any people, any scenarios, any specific concrete examples. It's just a general observation. That's all she gives. Now there's no evidence here at all about people under modern awards.
PN3937
There's no evidence here about people on the safety net. There's no actual evidence about people being injured, their experience or anything like that. The only findings of fact you can draw from that is a little bit about some statistics at the front and then really the best you can do after that is that in a hypothetical situation well, maybe that's the maths of how it works, but there's no evidence about anybody in those situations. When you look at what you can draw from that to assist you in your 134 deliberations, we say there's nothing.
PN3938
Mr Browne then gave evidence and he is CFMEU 3. Mr Browne is from Victoria and I think he was honest enough to explain his experience is Victorian. He has done something quite cute, with respect to Mr Browne. He has put on in his statement which is paragraph 8 referring to attachment A, he has put on - and I apologise, mine is so badly photocopied I can't actually read attachment A but I think I know what's in it. He has given you some scenarios. At least he has given you some scenarios of people who I think he says have actually been injured and this is their circumstance.
PN3939
Here's the problem though with that. He admits all of those people are actually covered by an enterprise agreement and he admits all of those people had the benefit of accident pay. So he's really back with this sort of AWU problem again and the problem that they all have. All he is saying is, "Well, look, I know they're covered by enterprise agreements. I know they've got accident pay. But assume they didn't, this is the scenario they'd be in". So again Mr Browne doesn't provide us with any evidence of anybody on the safety net, any evidence of anybody actually experienced in the industry on the safety net and what they've experienced.
PN3940
As with his Honour comments earlier about the weight to be given to people on enterprise agreements please, with respect, don't be caught by his clever way of approaching it. Those people are on enterprise agreements and he has just posited a hypothetical alternative of assume they're not. He does then go on to share some experience with you, and to the extent that his experience is relevant obviously some weight could be given to it, and he indicates that in his experience people on workers compensation suffer some difficulties.
PN3941
There are no specifics given, nothing is quantified. It's just sort of his broad, general experience. Again in terms of drawing findings of fact which allow you to consider your position on section 134, that seems to be of little or no value whatsoever. That is the CFMEU evidentiary case, and on that basis they're asking you to make significant variations to three awards. The SDA in their case, they're seeking to move you to vary seven awards, general retail, fast food, pharmacy, I think hair and beauty still?
PN3942
SPEAKER: Yes.
PN3943
MR WARD: Yes. Yes, hair and beauty still, mannequins and models, storage services and vehicle manufacturing. It's relevant to note at the outset that there's no evidence whatsoever about fast food and people under the Fast Food Award.
PN3944
JUSTICE BOULTON: Well Mr - - -
PN3945
MR MORETTA: I m sorry, we didn't include the Manufacturing Award.
PN3946
MR WARD: Sorry. Thank you.
PN3947
MR MORETTA: We left that to the AMWU, the vehicle division to give evidence to the Commission.
PN3948
MR WARD: Thank you. I apologise to my friend. I'll withdraw that. They're not seeking to vary the Vehicle Manufacturing Award. There's no evidence whatsoever though about anybody under or vaguely associated with fast food, pharmacy, hair and beauty, mannequins or storage. You've got nothing. Let's look at the evidence that's on. SDA 1 is a statement of evidence of Jeannette Anne Park. Ms Park is employed by AGI - IGA Supermarkets in Victoria. Now interestingly enough she's an interesting person. She says she's covered by a modern award at paragraph 4. She says:
PN3949
My wages and employment conditions are covered by the General Retail Industry Award 2010.
PN3950
I think - and I hope I'm right in saying this - that is the only witness who asserts in their evidence that they're covered by a modern award. That's it. That's the one.
PN3951
MS STARR: Excuse me. I'm sorry to interrupt. The ACTU, and I understand the AWU, despite attempts to - it's unavoidable that we need to step out for approximately a half an hour this morning between 10 and 10.30. We apologise for the inconvenience and we'll be back as soon as we can.
PN3952
JUSTICE BOULTON: Yes.
PN3953
MR WARD: I promise not to do anything naughty while you're gone. Now Ms Park sadly is injured in 2013 and, for reasons which we're not told in the affidavit, she gets accident pay. Now I can't explain why that's the case. The statement of evidence doesn't, but she says at paragraph 11:
PN3954
During the entire 39 weeks I had been in receipt of accident pay from the employer so that my weekly pay did not drop over that period.
PN3955
So she gets accident pay. Now I don't know whether or not that's just something that IGA do for people. We don't know. It might be that she's actually under an enterprise agreement and she didn't know. But she gets accident pay. Now with respect, on my understanding of the SDA's claims she wouldn't be helped because she carries on being injured after 39 weeks and she doesn't get accident pay. But their claims don't help her. So to the extent that you can draw findings of fact from that that help in this case, we don't see what they are. To the extent that you could draw findings of fact from that statement of evidence that would help you in your 134 deliberations, we don't see what they are. But she is - at least she attests to the fact she's covered by a modern award. Mr Vella - - -
PN3956
JUSTICE BOULTON: Sorry, she didn't get as it were a top‑up?
PN3957
MR WARD: She gets a top-up, your Honour. Her evidence at paragraph 11 - I withdraw that. She says that she was injured for the first 39 weeks and if you look at paragraph 11, your Honour, she says:
PN3958
During the entire 39 weeks I had been in receipt of accident pay from the employer so that my weekly pay did not drop over that period.
PN3959
JUSTICE BOULTON: So she did get a benefit.
PN3960
MR WARD: Yes, she got - yes. Yes, we don't know why.
PN3961
JUSTICE BOULTON: I thought you said that she wouldn't get any benefit from - - -
PN3962
MR WARD: No, no, she then - no, no.
PN3963
JUSTICE BOULTON: - - - the SDA application or claim here?
PN3964
MR WARD: Well, she already got the accident pay, your Honour. She already got it. She's not a person who's under a modern award, gets injured - well, take Mr Barbante for a minute. If we assume for a minute Mr Barbante is covered by a modern award. He's injured and he actually has the experience of not having accident pay such that he can tell this Bench what has happened to him. That is an entirely relevant experience from an evidentiary perspective to look at the question of fairness and the modern awards objective. We acknowledge that. This person isn't in that situation. This person has accident pay.
PN3965
JUSTICE BOULTON: But isn't the implication that if she didn't have some entitlement to it she wouldn't have got it?
PN3966
MR WARD: Well, I don't know if that's the case, your Honour. I don't know if you can draw that inference. We don't know why she got it. She doesn't say she got it because of the modern award as such. I don't know. If you want to draw that inference - let's say you draw that inference. If that inference is drawn, your Honour, then we've found two witnesses in the whole of the case. But the problem is there. She says she got accident pay, and to the extent that she then goes and says she continued to be injured and she didn't get it, their case doesn't help her. But I acknowledge that that is the only witness in the case covered by a modern award. I acknowledge that. That's the one.
PN3967
Mr Vella, SDA 2, works for Woolworths Limited and he says he's covered by an enterprise agreement. He was injured in 2013. Mr Vella gets accident pay in accordance with his enterprise agreement for 39 weeks. However he has a drop in income down to 80 per cent after 52 weeks because obviously the SDA's enterprise agreement doesn t seem to cover that. So again we've got another person covered by an enterprise agreement who has got the benefit of some. But he's not on the safety net. He wouldn't really be captured by these claims. We don't really know, other than to speculate, what might have happened had he not been covered by the enterprise agreement. There's no evidence about his financial situation while he got accident pay. There's no evidence about his financial situation when his income fell to 80 per cent, and he does no more than speculate. He says:
PN3968
If I hadn't had accident pay I might have had some troubles.
PN3969
It's just purely speculation. He's not on the award. There's no evidence there about the safety net. What it is probative though is that again we've seen another employee who has been able to bargain for accident pay successfully. It's probative of that. We then go to SDA 3 Mr - I withdraw that. I apologise. I'm not doing well. Ms Fallon Suzan Gustas. Again employed in Victoria, covered this time by the Coles Supermarket Australia Pty Ltd Bi-Lo Enterprise Agreement, unfortunately injured in 2014. And all she does in her evidence - again she gets accident pay under her enterprise agreement. She simply speculates again, "Without accident pay this would have been my situation". Speculation.
PN3970
So again we've got another witness who's not actually on the award, not on the safety net, can't actually give us any evidence about the experience of being in that situation because they're not in that situation. And again that can be of very little assistance, if any, in your deliberations about section 134. Then we come to Ms Tamara Kilpatrick, SDA 4. She seems to be unusual for this reason; she's employed by Woolworths - can I just say this. This person seems to be on their evidence a person who is having a pretty tough time. If you look at paragraph 2 she says:
PN3971
I live at home with my daughter, two sons and three grandchildren in a two-bedroom unit.
PN3972
So with the utmost respect to Ms Kilpatrick she seems like she's doing it pretty hard. She works at Woolworths. Now she's interestingly enough covered by an enterprise agreement which is the Woolworths National Supermarket Agreement. I've got no doubt that that is an agreement negotiated with the SDA and Woolworths. She gets injured and there's an inference here that even though she's covered by the enterprise agreement she doesn t get accident pay. Now I suppose what's relevant there is that obviously the SDA are quite happy to make an enterprise agreement for this person that doesn't have accident pay in it. That inference is available to be drawn.
PN3973
So obviously when the SDA weigh up what's important in an enterprise agreement, on this occasion accident pay wasn't on the list. She does experience a drop in take-home pay and she says she has suffered financial strain. Now again because of her situation being covered by an enterprise agreement it's difficult to draw findings of fact from that which are going to be particularly helpful, because she's somebody who has been taken out of the safety net stream and the union who's acting for her have been comfortable to negotiate an agreement that doesn't protect her in this regard.
PN3974
But having said that, given her personal situation as explained in paragraph 2, I can understand, with the utmost respect to her, why she might have been in financial strain because she seems to have an extraordinary burden in her life in terms of who she has to look after. We then go to Mr Walder, which is SDA 5 and I won't go through this in detail. He's covered by an enterprise agreement. He gets injured and again all he can do is speculate as to what might have happened had he not been. That's all he can do and, with respect, you can't make findings of fact out of that that help you.
PN3975
Then we come to Mr Smith, SDA 6. He does exactly the same. He's covered by a different enterprise agreement. On this occasion it's the Coles Supermarket Agreement. Injured in 2014 and again he says "Without accident pay this is what I would speculate" and to be fair, the speculation that they offer you is very unspecific. It's speculation but it's not particularly helpful speculation either, "My family would have been under financial strain". Now with respect, given what your task is before you, you just can't draw findings of fact from that kind of speculative material that's going to help you. Not in any probative sense.
PN3976
Now that's the SDA's case. That is the case the SDA bring to you to persuade you to vary the Retail Award, the Fast Food Award, the Pharmacy Award, the Hair and Beauty Award, the Mannequins Award and the Storage Services Award. That is the evidence they rely on to have you make findings of fact to turn your mind to 134 and make considerations to make a significant change to all of those awards, and in our respectful submission, based on the preliminary issues decision it's very clear that that must fail. The AMWU vehicles division, well I think somebody coined a phrase earlier today or earlier in the case of accident pay light. I think it was Mr Burns.
PN3977
UNIDENTIFIED SPEAKER: No, I don't think so.
PN3978
MR WARD: I think it was. The AMWU vehicles division have produced no evidence. They can't find anybody to come forward on the safety net and share their experiences with you, but they have no evidence. So in relation to the claims they've got to vary their relevant award, you're absolutely flying blind. I'll dispose of the AMWU in a different way. I left the witnesses for the AMWU to my friend, Mr Ferguson. I want to make just one comment in addition. AMW 3 is the affidavit of Richard Dababneh who is the lawyer from Turner Freeman Lawyers. That was quite an extraordinary affidavit.
PN3979
It's an affidavit of not only undisclosed people which prevented any fair testing, but as Mr Dababneh actually said in his evidence, he actually had not got his clients' instructions to do what he had done. So we would ask the Commission to approach that evidence - to the extent that it referred to undisclosed persons who he said were on the award and experienced issues, that is incredibly fragile and the Commission needs to be very careful about accepting anything of that nature in this Tribunal, with or without the rules of evidence.
PN3980
The TCFU. Now the TCFU at least put somebody in the box who talked about their injuries and their woes. But as was clear in my objections, which his Honour the presiding member went to, Mr Spencer, TCFUA 1, he was employed under an enterprise agreement and again he had the benefit of an enterprise agreement. So to the extent that he talked about difficulties, again all he could say was, "Had I not had the benefit this is what would have been the case". So again the only thing he can offer you is speculation. He can't offer you any direct evidence of somebody on the safety net getting injured and what their experience is. His is purely speculative. Nothing more than that.
PN3981
I appreciate he has had a pretty tough time by the look of it but it's speculation and, as I said, his Honour the presiding member has already said what weight should be given to people covered by enterprise agreement. We then have the affidavit of Michele O'Neil and this seems to be the affidavit that sort of comes out every time the TCFU have a case. There are some things in here which you might make findings of fact, or to draw from. I don't cavil with the TCFU that the TCFU Award, people on that award are accepted by this Commission as low paid. I accept that, and that might give rise to a consideration of the first limb of 134. I don't think that's an issue. I don't think it has ever been in issue.
PN3982
Ms O'Neil goes to great lengths to tell you a little bit about the industry and, with respect to the TCFU, it's the narrative that the union have obviously advanced for a very, very long time. That is, it's an industry with a very high proportion of non-English speaking people, outworkers are vulnerable, it's exposed to sham contracting and the like. It's always identified as a relatively vulnerable industry. It's almost surprising in that context that we don't have any witnesses. You would have thought if there was an industry that might have some people on an award who actually got injured and could bring to this Commission their experience, you'd have thought this was one of those industries that they might have come from.
PN3983
But there's no evidence from anybody here that might assist the Commission look at the broader question of fairness in terms of award-covered people being injured. There's no evidence at all. What we do get from Ms O'Neil however is this; her evidence does tell us that they do have enterprise agreements that have accident pay in them. That is the union, although her evidence says the majority of their enterprise agreements - I withdraw that. Her evidence says the majority of her members aren't covered by enterprise agreements but of the enterprise agreements they have, she says they're able to successfully bargain for accident pay.
PN3984
I think she says, on my maths, about 79 per cent of their enterprise agreements have accident pay in them. That is a finding of fact that can be drawn. She spends a very large proportion of her time talking about pre‑modern awards and I'll come to that later, and a bit like Ms Hayward did for the CFMEU, she makes a suite of theoretical mathematical calculations. That is, she doesn't say, "Here's a real person. This is their circumstances" such that you can test it. She just says, "Assume somebody was in this situation. Assume they were under the award. Under this workers compensation system this is what would happen to them".
PN3985
Again that's just probative of the maths. That's not probative of it actually occurring in a particular situation. So there's nothing that comes out of her affidavit, however bulky it is, that helps you other than going to the proposition that persons in this industry are low paid. There's no doubt about that. We accept that proposition. But it doesn't go much further than that, and you could draw some conclusions that they are able to bargain for accident pay; that's the extent of their case.
PN3986
The MUA's case won't take me long to deal with. They can't find anybody on an award. They can't find anybody on the safety net. They can't bring anybody before you who is on the safety net who has been injured to share their experience whatsoever. They can't even put any evidence on talking about those people. They haven't put that before you whatsoever. Their evidence goes to the past, which we'll come to, and their evidence goes to the fact that they very successfully bargain in this sector and they've got accident pay in the overwhelming majority of their enterprise agreements. That's their case.
PN3987
So in terms of making findings of fact that help you with your 134 considerations, apart from the issue around enterprise bargaining there's absolutely nothing they've given you. Nothing at all. I just want to make one very quick point about this industry. It should never be said that people in this industry are low paid. I did a quick search yesterday. The most recent observation about the stevedoring industry not being low paid is in a decision that involved his Honour Kovacic DP very recently. It's the stevedoring 4 yearly review case (2015) FWCFB 1729 at paragraph 97 where there's an observation from the Commission making it very clear that stevedoring is not a low paid industry, and I'll come back to what low paid means later on.
PN3988
But that's the extent of their case. They give you nothing to allow you to make the conclusions you would need to draw to vary the awards they want varied. I think I'm on my last one. The forestry division of the CFMEU filed evidence from Jane Calvert. It was actually accepted in a slightly strange form. This affidavit was originally filed earlier, and you might recall the exchange between myself and Ms Starr who was acting for them at the time. It was actually accepted in the same form and on the same basis that the affidavit C2 was accepted on 21 November 2014. I'll just give the print reference for that which was PN2856 and PN874.
PN3989
There was a whole suite of objections to it in the original proceedings and it was accepted in the end based predominantly on weight, and rather than go through those objections again, that's why Ms Starr and I advance it on the same basis. Again putting aside the history of pre‑modern awards, which I'll come to, this union attests to the fact that 41 per cent of their enterprise agreements have accident pay in them, and again you can draw that finding of fact. It's relevant, and they say that 59 per cent of their enterprise agreements incorporate the Timber Industry Award.
PN3990
Now it's not for me to say how this union bargain. It's not for me to say how the union want to strike their bargains. Obviously if they've incorporated the Timber Industry Award, they've incorporated it in one of two ways. There's no evidence as to which way it is, I don't think. It's either incorporated at a fixed date. That happens in a lot of industries. Or it's incorporated as it's varied from time to time. I think Mr Borgeest said yesterday that it's predominantly incorporated as varied from time to time.
PN3991
The important thing to say about it is simply this. The union is very aware that the only thing that has been in the Timber Industry Award since 2010 is the transitional provision. It's very aware that that transitional provision was going to die. Now if it chose to negotiate its enterprise agreements that way, it's a matter for them. With respect to them, they're sort of the big - they're grown‑ups. They can work out how to negotiate. There's nothing there thought that is particularly moving for you apart from possibly a conversation about the promotion of the enterprise bargaining limb of 134.
PN3992
Other than that Ms Calvert again does what some of the others have done, she has given you a maths lesson. She has said, "Theoretically assume this, then this is the math". Now that's evidence of the math. It's not evidence that the people are in that situation. Then lastly, and I don't know if the Bench will recall this but there was a great deal of debate when the affidavit as originally put on, at paragraph 19 of her evidence she makes some sort of passing generalisations about some members who have had some difficulties, and I'd simply say this.
PN3993
When the Bench read paragraph 19 the Bench will see that it's not hearsay it's actually hearsay of hearsay, "Somebody told me that somebody told them". Now that's about as fragile as you get from an evidentiary perspective and, to the extent that the Bench might want to rely on that and draw findings of fact from it, that might go to the question of general fairness in 134. We would respectfully suggest that that evidence is so fragile it just should not be relied upon and given any weight. Now that's their case. That's it. That is the extent of the evidentiary case, putting aside what the unions would call critical mass. That's the extent of the evidentiary case, putting aside Dr Purse which we'll come to, that the unions have put to you.
PN3994
In our respectful submission when you look at that award by award, application by application, there is nothing appropriately probative to allow you to draw findings of fact allowing you to make valid and supported conclusions about the operation of the modern awards objective such that you would be moved to vary the awards as sought. It's just not there and it can't be made there by eloquent submissions, pleas to the past or anything - which we'll come to. It's just not there. They haven't discharged the onus that's on them that was re-informed and emphasised by the preliminary issues decision, and it's an onus which has been reinforced by various 4 yearly review decisions which have already come out, which we'll talk about. I want to now move to the workers compensation debate.
PN3995
COMMISSIONER BULL: Just before you do that, Mr Ward.
PN3996
MR WARD: Yes, Commissioner?
PN3997
COMMISSIONER BULL: Wouldn't it be a fair conclusion to say that where the awards have had an ex-accident term, generally speaking any enterprise agreements ended up with such a term in that?
PN3998
MR WARD: Your Honour, I'm not going to be - I'm not going to guess about that. It would be a guess and it would be inappropriate for me to guess. I honestly don't know.
PN3999
COMMISSIONER BULL: I'm not aware of any enterprise agreement that has had accident pay in it that didn't have it in the relevant reference award.
PN4000
MR WARD: Well, Commissioner, you might be better informed than I am. I mean, to understand that one would need to actually analyse all the enterprise agreements in the sector against the modern awards and try and make some conclusion.
PN4001
COMMISSIONER BULL: No, I'm only concerned about the ones in the applications before us.
PN4002
MR WARD: Well, I couldn't answer that. I could mislead you in answering that.
PN4003
COMMISSIONER BULL: All right. Thank you. Sorry, one more question just before you move on. Are you aware of the position that your clients took at the award modernisation process as to whether any of them either agreed with accident pay being put in or they disagreed or they said nothing?
PN4004
MR WARD: I don't think the Australian Chamber of Commerce and Industry took a position. I'd have to find out. I'd have to take some instructions. I also know that the New South Wales Business Chamber Limited didn't appear in the Part 10A process. I think ABI was opposed to it but it might have been the case that it never got around to saying that. But I don't think ABI at any stage consented to it.
PN4005
COMMISSIONER BULL: Thank you.
PN4006
MR WARD: The workers compensation debate. Now your job is made harder by this, and you have to say that with some honesty because you're actually being asked based on that evidentiary case to in effect intervene and override some State workers compensation systems. It's not a task that, with respect, you would approach lightly and in terms of that task you've been assisted by three witnesses, Dr Purse, Mr Shaw and - I apologise, Ms Browne? Ms Browne. I'm reliably informed that if you hold a workers compensation conference those three normally appear and speak. So they're kind of the people you always get.
PN4007
I want to start with Dr Purse and make some comments about Dr Purse. Now he is unashamedly opposed to step‑downs. He's passionate about it and you could see that passion when he gave his evidence. He didn't just talk about it, you could see it in the way he gave it, the tone in his voice, his intonation. What's important about him is that as I went to cross‑examine him it was very clear that he has held that view from before he became a doctor. He held that view very early on in his career before he actually became qualified, and that arises from - I'm just going to the transcript.
PN4008
I'm going to the transcript of 31 March, if the Bench could have that in front of it, and I'm going to start at PN580. The Bench will recall that I started cross‑examining Dr Purse by taking him back to a lot of his earlier works. I read one of them out, and at 580 I say this:
PN4009
I just wanted to go to one of those -
PN4010
That's one of his earlier works:
PN4011
- to make sure I properly understand the essence of your thesis that you were advocating. I couldn't find your 2001 paper. I'm sure it's a great paper but I couldn't find it. The earliest one I could find was the "Australian Workers compensation policy conflict step‑downs and weekly payments".
PN4012
He says:
PN4013
Yes.
PN4014
Published in the International Employment Relations Review Volume 9 Number 1 page 22 to 24. I apologise, I've only got one copy, but if you want me to show it to you to make sure you're comfortable that it's the paper, I will show it to you?‑‑‑I'm inclined to give you the benefit of the doubt.
PN4015
I then say this:
PN4016
The author is said to be Kevin Purse. Do I take it you didn't have your doctorate when you wrote that paper?‑‑‑When was it?
PN4017
2003?‑‑‑I was finishing it then but what I did, my doctorate was by publication.
PN4018
So important to note that he has held this view from before he actually got his doctorate. It's not one of those occasions where Dr Purse went away and did some empirical research of his own. He has never done his own empirical research - never - and formulated a body of empirical research which formed his doctorate and that gave rise to his thesis. He has always had this view. Always had this view. Now I then took him through pages 63, 64, 65. I took him to that earlier paper. Now I won't bore the Tribunal by re-reading it all, but I then said at 600:
PN4019
From as early as 2003 one of the cornerstones of the thesis you were advancing is that there's no proper evidentiary basis for step‑downs?
PN4020
He said, "That's correct." So he has had 13 years in which to go and do some empirical research himself and he has chosen not to do it. So he has got a belief that step‑downs are a problem. He has vehemently advanced that in a number of written materials. But he has never seen fit to go and do his own empirical research, and it's disappointing that that's the case. And I say:
PN4021
Right from the beginning that's the heart of your thesis?‑‑‑Yeah. Yeah.
PN4022
Right from the beginning that's the heart of his thesis. Now we also say that while Dr Purse clearly is a PhD, he's well read, he's well written, you need to be cautious about simply thinking that in some way he's some objective commentator because he's not. The Bench will recall that I took him in cross‑examination to whether or not he regularly appears on behalf of the union movement to advocate his case, and that conversation occurred from PN612 through to PN621 and you'll recall that I put to him that he was the person in the New South Wales Labour Council, or as it's now called Union New South Wales, got in to write the paper for the New South Wales Government. He was the person who wrote that paper.
PN4023
He was the person Unions South Australia got in to write their paper. So I'd ask the Commission to be very mindful that while he is an academic he's clearly the go-to person for the union movement, and that's more a case of the fact that his thesis is just aligned to theirs. It's aligned to theirs, and I actually put to him in an exchange in the cross‑examination who he was aligned to, and the Bench might recall that we had a little bit of an argument with each other. But it was very clear, he acknowledges his whole argument is aligned to the union movement, and perhaps the most telling part of his cross‑examination was his honesty.
PN4024
Because when I put to him that there's no - as he put it, there's no empirical research to prove step‑downs work, I also put to him that therefore there's no empirical research to say they don't work and he says, "Yes." Now I think that's actually a very honest and commendable point, and if it's taken as a concession I'll make it as a concession. There is no definitive research that anybody can bring to you to help you that says step‑downs work or don't work. There isn't any. There's none either way. They can't claim the high ground, I can't claim the high ground. It's not there.
PN4025
What I did put to Dr Purse though was that he had been arguing his case now for a great many years, that every workers compensation scheme in this country in some form or fashion has step‑downs, and that nobody is listening to him and he said, "You're right. You're right" and that's simply the facts. Whether or not it's a Labour or a Liberal Government every one of these schemes in some form or fashion, more or less, has step‑downs. He has been arguing his case, he has been writing submissions for the union movement and nobody is listening to him.
PN4026
But even allowing for all of that the unions want you to intervene and change the effect of these schemes. They want you to change the effect of them. Now that brings me on then to Mr Shaw and I can't resist doing this so I'm going to do it. I want to first talk about what Dr Purse said about Mr Shaw and if I can ask the Bench to go to PN539. This exchange occurs when Ms Starr is leading fresh evidence from Dr Purse. Ms Starr takes Dr Purse to Mr Shaw's evidence and without any prompting, without any suggestion from anybody this is what Dr Purse says about Mr Shaw. It reads this way:
PN4027
The trend of improving workers compensation entitlements is acknowledged at page 8 of your report. What do you say in relation to that paragraph?‑‑‑I agree with it as far as it goes.
PN4028
Then he says this:
PN4029
I should also say just in relation to Mr Shaw he is one of the more competent or most competent and well‑versed workers compensation people that I've come across from the employer community. So I have a fair degree of respect for him.
PN4030
Now I've been doing this for 28 years and I haven't heard an ACTU expert say that about anybody I've put in the box before, so that was very generous of him. I have to say as well that Mr Shaw holds Dr Purse in the same level of regard, so they know each other very, very well. Mr Shaw wasn't brought here to bang a drum. He wasn't brought here to tell you that things are black or they're white when they're grey. What Mr Shaw was brought here was to try and inform the Commission to the extent that the Commission might think it's relevant. It may not think it's relevant but to the extent they think it's relevant he was brought here to inform the Commission of the broader debate around workers compensation. That's why he was brought here.
PN4031
He wasn't brought here to prove that step‑downs fail - I withdraw that. That step‑downs work or fail. He wasn't brought here to try and prove the case in black or white. He was brought here to try and show to you the breadth of debate around workers compensation in this country, and first of all in his statement between paragraphs 17 to 33 he developed for the benefit of the Bench the development of the schemes, and referenced in doing that document A to ACCI which is a Safe Work Australia comparison document. Now to the extent that the Bench need any conclusive material that explains how the schemes work, the SAA comparison report is uncontroversially accepted as that document. So the Bench have the benefit of that in front of them today.
PN4032
Now it's hopefully largely uncontroversial that the proposition that good work provides significant health benefits to injured workers and that early return to work needs to be a priority of focus. I'm not sure we agree on much, my friends and I, but I think my friends and I agree on that proposition. That proposition - and Shaw drew that proposition from the AFOEM consensus statement which is document E to his ACCI 1; AFOEM return to work statement, document C; the Black review, document D; and the Hanks report, document B. Then if I can take the Bench to Mr Shaw's statement he develops that at paragraph 38. At paragraph 39 he quotes Hanks in relation to this general proposition that work is of a health and wellbeing benefit. At 40 of the AFOEM consensus statement, at 41 a further extract from the consensus statement. Then he says at 42 this, and I quote:
PN4033
As a result of the above there is considerable academic support identifying the importance of the return to workplace as soon as it is safe to do so after an injury. The materials included in the exhibit to this statement stress the importance of an early return to achieve rehabilitation outcomes and the increasing negative health outcomes arising from prolonged absence from work.
PN4034
Now very importantly he goes on then to quote the AFOEM consensus statement and this is quite telling, this material:
PN4035
Their analysis and research supports some very stark conclusions and that is that 20 days - if the person is off work for 20 days the chances of ever getting back to work is 70 per cent. If the person is off work for 45 days the chance of ever getting back to work is 50 and if the person is off work for 70 days the chances of ever getting back to work is 35 per cent.
PN4036
So there's empirical research which says early return to work is a good thing. I think that's uncontroversial. There's empirical research that says the longer people are off, the less likely they are to return. I actually think that's uncontroversial as well in this case. What of course is controversial is what motivates that, and as Dr Purse said there's no empirical research one way or another to actually support what motivates that but what you've got is a lot of opinion. Now I think that Shaw's characterisation of how Hanks sums up what the schemes are trying to achieve in light of those propositions, early to return to work is good, if you're away too long the chances of you coming back are very low or increasingly low, Shaw sums up Hanks, and I think it's quite fundamental to the consideration and he does that at 59. Having said that, I hope it's 59. Yes, it is. He says this:
PN4037
Hanks QC's views are particularly important in the context of the broad architecture of schemes and the balance of the interests of all parties. As Hanks QC points out, if payments are too low workers may risk further injury by remaining at work when it is not medically safe to do so. If so high as to provide no incentive to return to work or an active disincentive to return, the worker's long term health may be compromised by not making the earliest possible safe return to work. Step‑downs are accordingly a component of systems which are deliberately designed to achieve a balance of competing concerns.
PN4038
Now I'm not arrogant enough and my client's not arrogant enough to say that step‑downs can be viewed any higher than that proposition. They are simply a component of a broad scheme with many facets and they're designed to help structure that balance that Shaw talks about. We acknowledge from any review of the schemes that different policy persons have formed the view that that balance needs tinkering one way or tinkering another. We accept that. But it's about the balance and, in our submission, your job is made all the harder because on the basis of that very, very flimsy evidence that has been put forward you're being asked in effect to disturb that balance and, with respect, we say you shouldn't do that. We say there's no warrant to do it, that you should be very careful in considering actually disturbing that balance. Very careful indeed.
PN4039
COMMISSIONER BULL: But for all intents and purposes, Mr Ward, that balance has only been in place for five months, hasn't it?
PN4040
MR WARD: No, Commissioner. If you look at the Safe Work Australia examination of all the schemes - and Shaw goes to this - all of them have some form of step‑down. In other words all of the schemes, even the Western Australia scheme, all of them at some point take some form of income off the employer.
PN4041
COMMISSIONER BULL: Yes. No, I understand that. But when you say we're asked to disturb the balance, the accident pay provisions have been operative up until the end of last year?
PN4042
MR WARD: I think - I accept that there has been a transitional provision in modern awards for the last five years. I accept that, Commissioner. I accept that. However this is the important proposition as we'll come to later on, the creation of the Fair Work system and modern awards was meant to reset the clock. Transition was meant to a serve a purpose to allow people to move to the new world. What's being asked here is to introduce into that new world something from the past.
PN4043
Not to keep something, but to introduce it, and we're actually saying to you that you have an opportunity now in the context of the clean sheet, which is what you have in front of you, you're actually being asked now in the context of that clean sheet to disturb that balance and we're asking you to understand that balance and consider it carefully in your deliberations. Because if you do accede to their claims, put aside the very paltry amount of evidence, but if you do concede to their claims you will be making a positive decision to disturb that balance. Whereas if you dismissed their claims that balance stays where it is. Where it is.
PN4044
DEPUTY PRESIDENT KOVACIC: Mr Ward, I've heard the comments you've just made but following on and the question from Commissioner Bull, I mean Victoria has a long history, if I can characterise it that way, in terms of having accident pay provisions in an environment where the workers compensation scheme in that State since at least the early 90s has had step‑down provisions. Is there any evidence to suggest that the step‑downs provisions have been less effective in terms of the return to work rates in that jurisdiction relative to other workers compensation jurisdictions?
PN4045
MR WARD: I suspect your Honour knows my answer. We're not aware of any evidence for or against that. I think we get back to what Dr Purse said. There is no empirical research one way or the other. There's none. It would be incredibly helpful if I could have come here and said, "Here's the Smith report". It probably would have been helpful if the union could have come here and said, "Here's the Smith report" but the Smith report doesn't exist. It has never been done. I can do nothing to help you, I'm afraid.
PN4046
DEPUTY PRESIDENT KOVACIC: Thank you.
PN4047
MR WARD: Now the one thing that did come out of the evidence though, particularly of Ms Browne and Mr Shaw, is that when these schemes are reviewed they're pretty serious processes. Very substantial public consultation, some of the reviews of these schemes take several years. They're not sort of done in a half-hearted way, and I note that that is very much the theme of the New South Wales Government's submission of 15 April 2015. It hasn't been marked, but I just note that. That's what we say about the workers compensation issue.
PN4048
I want to then come on to what perhaps dangerously has been called critical mass. With the utmost respect we are concerned that the Bench has started to use the phrase critical mass, and hopefully it's just a phrase of convenience. It is a phrase and a principle that could, with the utmost respect, lull or seduce this Commission into error and not an error of merit but an error of jurisdiction. The first thing that I need to say about the concept of critical mass is I must make a concession. It was alive and well as a proposition in the Part 10A process and I think Mr Ferguson took you to that decision. It's the General Retail Industry Award 2010 and hopefully I'm right, I think he took you to paragraph 3, and I won't read the whole part of paragraph 3 but importantly - I withdraw that. I will just read it for present purposes. Paragraph 3 of the General Retail Industry Award 2010 decision says this:
PN4049
In general terms we have considered the applications in line with our general approach in establishing the terms of modern awards. We have had particular regard to the terms of existing instruments. Where there is a significant disparity in those terms and conditions we have attached weight to the critical mass of provisions in terms that are clearly supported by arbitrated decisions -
PN4050
I emphasise arbitrated decisions:
PN4051
- and industrial merit. We have considered the impact of the previous provisions based on the information provided by the parties as to the current practice.
PN4052
As those members of the Bench will remember, there was almost no evidence in the 10A process of any kind:
PN4053
It is convenient to deal with the variations by subject matter.
PN4054
And when you think about what 10A was all about it was - and I say this with great care - it was a brutal process. Hundreds of years of industrial jurisprudence were kind of thrown out the window over the space of a year, necessarily. Necessarily. I don't say that critically. One almost staggers at what the Tribunal achieved. I think some 1600 awards were basically smashed down to 122. Various governments had asked tribunals over the years to simplify things and various tribunals had failed, various governments had failed. So it was an extraordinary exercise but you can understand why a relatively brutal approach was necessary, and that's how critical mass emerged. Now the first thing I want to say about that notion of critical mass is this. It was a concept that was used quite comfortably by the Bench in '08, '09, '10 to make the awards.
PN4055
I think you can draw an inference therefore that if the Bench had been comfortable to use it in 2008 in relation to accident pay it would have used it, but it didn't and I suspect it didn't because it simply wasn't prepared to fly blind and guess. As this Bench has found over the last few days, it has tried to ask questions about critical mass and, you know, people have been hopefully fairly honest. I think the advocate for the ASU said very honestly, "I could only guess". Those were her words, "I could only guess", and she didn't actually try then and guess although a lot of the others have said they could only guess and they've tried to guess. So it wasn't something - it was a concept that was alive in '08. The Bench could have used it but they chose not to.
PN4056
COMMISSIONER BULL: What do you make of that Full Bench's comments where they've said that if there was a clear demonstration of the existence of the accident pay they would put it in the award?
PN4057
MR WARD: Commissioner, I haven't got it in front of me. Can you tell me where you're going to?
PN4058
COMMISSIONER BULL: Well, I think that was in your - let me see. You quoted it in your outline. I'll just find it for you. I think it's paragraph 87, was it?
PN4059
MR WARD: Of my submissions?
PN4060
COMMISSIONER BULL: No, not of your submissions, of the decision that's referred to.
PN4061
MR WARD: Can I just get a copy?
PN4062
COMMISSIONER BULL: Let me just see where your - - -
PN4063
MR WARD: It's the one document I don't have. I apologise.
PN4064
COMMISSIONER BULL: It's on page 9 of your written submissions and paragraph 88 of it, sorry, where you've quoted the decision. The first sentence of that paragraph 88 that you've quoted there on page 9 of your submissions.
PN4065
MR WARD: Can I just read it, Commissioner?
PN4066
COMMISSIONER BULL: Yes, certainly. Yes.
PN4067
MR WARD: Thank you. Well, the only example that I can think of where they obviously thought it was clear is the one award which they made in 2010 to include accident pay and that, you'll recall from the earlier case, accident pay number 1, you'll recall that's the Airline Industry Award because they clearly put it in the Airline Industry Award. So they obviously felt back in 2008 using critical mass that they were able to make that conclusion then for that award. The issue though, Commissioner, is this and I say this with respect. Critical mass is not an appropriate principle to apply in the 4 yearly review.
PN4068
It doesn't appear in section 156 and, with respect, it certainly doesn't appear in section 134. So the principle of administrative convenience adopted in 2008 to sort of get to 122 awards may very well have been alive and well and useful then, but time has now passed and the consideration now is not what may have been the case, five, six, seven years ago, eight years ago, nine years ago. The consideration now is simply this: does the award meet the modern awards objective? It's as simple as that.
PN4069
It's not a mathematical exercise to say, "Well, 50 per cent of this industry may or may not have had it before so we'll go with it". I can say that no firmer than that. I don't wish to sound disrespectful. But there's nothing in the modern awards objective about that proposition so it was a principle that may very well have suited the times in '08 and was applied in '08. The Commission at that stage obviously felt comfortable enough to apply that principle to give it to the airline industry. That's fine, but times have passed and the Act does not in any way talk about or enshrine or provide a concept called critical mass.
PN4070
It's not in the legislation. And I think all they've done is what they did with a lot of things after that. Transition was an accepted approach to, if you like, move people from the old to the new and transition in every respect had winners and losers. In section 6 of our submission we talk about that at some length because the ACTU have talked in their oral submissions, they've said "Well, nobody was ever meant to lose out". We've identified in our written submissions in section 6 lots of people lost out through the modern award process. The most startling case was childcare workers. They dropped $3 an hour.
PN4071
COMMISSIONER BULL: But when you say transition from the old to the new, if you go to the paragraph above there they anticipate considering a formulation of a national standard. Is that meant to be the new that you're talking about?
PN4072
MR WARD: Well, Commissioner, I take that to have been only this, that the door was open to consider it.
PN4073
COMMISSIONER BULL: Yes.
PN4074
MR WARD: But we're not considering a national standard here. We're considering applications, award by award by award, for a very limited number of industries. But they left the door open. I accept that. I accept they left the door open and having left the door open, my clients have now faced two and a half cases. But we're not - this isn't a case for a national standard. It has been very clear. The Commission has invited the unions to run that case for the last year and a half and they haven't run it. But the door was left open, Commissioner, that's true.
PN4075
Now in terms of critical mass I don't want to be presumptuous and try and guess stuff because it might mislead the Tribunal. The best we could do to assist the Tribunal to talk about the history is in annexure A of the ACCI submissions. It's a relatively benign examination. Annexure A is sourced from the Fair Work Ombudsman website. They have a tool called "Award finder" and that tool identifies for the benefit of people using it a list of all pre‑modern awards that the Commission identified relevant to a new modern award.
PN4076
To the extent that it's relevant - we've said it's not, but to the extent it is relevant, we have simply identified award by award, and that is the original 44 awards, those instruments that that tool identifies that had accident pay and what it was, and then we've identified the number of pre‑modern awards that did not contain accident pay. If the Bench started to ask me questions of which one had the most employees under it or which part of the industry was mostly in New South Wales or Victoria, I'll be honest I'd just be guessing too. I don't know. I don't know.
PN4077
The only thing you can say with any comfort from that is that there's no clear picture, and the idea that has been profited(sic) by the ACTU saying accident pay was universally recognised was gilding the lily to say the least. But there's no picture there and particularly in relation to some of the very big awards. It's fairly stark how many pre‑modern awards had nothing in them whatsoever. Clerks would be a good example, social and community would be another good example. But I don't want to mislead the Commission by trying to have a stab at what was going on because it would be misleading the Commission.
PN4078
Now it's interesting that the concept of critical mass has been talked about already by this Commission in the 4 yearly review, and his Honour Watson VP has actually spoken about it in minority judgment in the stevedoring case, and I just want to take the Commission to that for a minute. I have copies of this. Kovacic DP was on this Bench. I apologise, I just need to find where I want to take the Bench to. I apologise. If I could take the Bench to 72 and I have to say at the outset that this was a very big case in stevedoring.
PN4079
I think it was a very large case. There seems to have been - goodness me, there seems to have been 30 witnesses or so called. It seems to have been a very large case. One of the issues that was between the parties was about penalty rates. His Honour Watson VP is in the minority on this issue and I'm quoting from that, and then I'm going to quote from the majority. But his Honour Watson VP of course was on the original Bench, the retail Bench, and he says this at 72:
PN4080
The context of making the original modern Stevedoring Award is relevant when making the award in 2009 and the scope to challenge the merit of existing award provisions was severely limited. I have observed in other proceedings that award modernisation was a process conducted by the Australian Industrial Relations Commission under the terms of Part 10A of the Workplace Relations Act. Pursuant to that part of the Workplace Relations Act the Australian Industrial Relations Commission was required to perform its functions having regard to the factors in 576B and in accordance with an award modernisation request made by the Minister.
PN4081
The 576B factors included the desirability of reducing the number of awards operating in the workplace relations system. The original Ministerial request was issued on 28 March 2008 and was varied on eight occasions. The Ministerial request contained additional Objects of the process including that the creation of modern awards was not intended to disadvantage employers or increase costs to employers. The award modernisation request required the award modernisation process to be completed by 31 December 2009.
PN4082
And he goes on to say this:
PN4083
As a result of the award modernisation process approximately 1560 Federal and State awards were reviewed over a period of about 18 months and replaced by 122 awards by the award modernisation Full Bench, of which I was a member. A further 199 applications to vary modern awards were made during this period. It is clear from any review of the process that the objects of rationalising the number of awards and attempting to balance the seemingly inconsistent objects of not disadvantaging employees and not leading to increased costs for employers attracted the vast majority of attention from the parties and the AIRC. It was clearly not practical during the award modernisation process to conduct a comprehensive view of the industrial merits of the terms of the awards. Matters that were not put in issue by the parties were not subject to a merit determination. Rather, terms were adopted from predecessor awards that minimised adverse changes to employers and employees as the Full Bench explained -
PN4084
And then he goes on to quote the famous paragraph. At 74 he says:
PN4085
Hence it is important to note the limited nature of the task undertaken by the award modernisation Full Bench. It is also important to note the scope of the review now being undertaken. The scope for review will indicate the nature of case that will be needed to be run to justify change to an award provision.
PN4086
In other words he's quite properly explaining that the context of 2008 and the notion of critical mass sets apart from the context of the 4 yearly review, and I don't think anybody could really cavil with that proposition. Now he gets downed by the majority on this and it's interesting because when one looks at how he gets downed by the majority, and I say that with respect to the Vice President, Kovacic DP and Commissioner Roe, they of course don't get caught up in that conversation. What they do is they tell us what you have to think about and they say that 140, 41(sic) and they make it very clear that all one has to be doing is this, and they say:
PN4087
The Commission's general approach to considering applications to vary modern awards as part of the 4 yearly review -
PN4088
That's what is happening here:
PN4089
- was set out in the preliminary issues decision issued by a Full Bench of the Commission March 2014. Amongst other things the Full Bench stated -
PN4090
And they go on then to state those paragraphs I've already talked about, probative evidence and all of that. They also then go on to reaffirm what was said in the Security Services Award and Mr Ferguson took you to that decision, and we accept that that's the correct way to view things. They summarise at 144 as follows:
PN4091
To summarise, the key points which emerged from the above extracts are that the award achieved the modern awards objective at the time it was made.
PN4092
We have already made that submission, and it has achieved the modern awards objective without a substantive accident pay provision in it. And two:
PN4093
An application seeking a significant change to an award will need to be supported by submissions addressing the relevant legislative provisions and by probative evidence which will usually include evidence of the operation of the award, the impact of the current provisions on employers and employees covered by it and the likely impact of the proposed change.
PN4094
Now if we take the Deputy President and the Commissioner's view in stevedoring and we compare that to the case that has been put, with respect the case fails. We think that the majority there made it very clear, quite properly, what was to be considered, and we adopt that. So we would simply say this. We would ask the Commission not to be lulled into the unions' argument around critical mass because it's really their big argument. If you look at the metal workers they stood up and said, "This is about the modern awards objective" and then spent 58 minutes talking about critical mass, and we ask you not to be lulled. I now want to turn to some general - - -
PN4095
DEPUTY PRESIDENT KOVACIC: Just before you move off, Mr Ward.
PN4096
MR WARD: Yes?
PN4097
DEPUTY PRESIDENT KOVACIC: If I take you to some of the extracts in paragraph 141 of that stevedoring industry decision and there are extracts from the preliminary issues decision.
PN4098
MR WARD: Yes, your Honour.
PN4099
DEPUTY PRESIDENT KOVACIC: And you'll see paragraph 24 from that decision, the reference to having regard to the historical context applicable to each award and that's reiterated in respect of the extract from the Security Industry Award decision. What do you say in terms of the weight that this Bench should give to those, the historical context of awards?
PN4100
MR WARD: I'm pleased your Honour took me to that. I should have gone to it, I apologise. I apologise, I should have gone to it. This, you're not only entitled but you're directed to think about that. That's clear. The context of this award is simple - these awards is simple. The Commission obviously wasn't moved in 2008 to put accident pay in them. It was moved to put it into only one of its awards. It however inserted a transitional provision which was self-terminating. So for five years everybody knew it was coming to an end and it left the door open to hear an argument about what it thought was potentially a sort of national case.
PN4101
Now that's entirely relevant to these proceedings. In our view what is less relevant because it's muddled in mud is sort of the pre-history. What you might call the sort of pre-history. You certainly can take into account the circumstances giving rise to the making of the awards and how they were made. You can do that. Now some of the unions have asked you to go into sort of the mire of that. The AWU have handed up drafts of pre‑modern awards and things like that. That's entirely sort of off the radar. But I think you're entitled to look at the history. Now you can't base the case on that, with respect, your Honour.
PN4102
You should look at it. You can't base the case on it. You can't say, "Well, look, hey you know what, in the absence of any evidence we'll be moved just by that". I don't think that's available to you and I don't think that's what preliminary issues decision ever said. Can I then come on to the specific unions. The Australian Workers Union drew your attention to a decision of the New South Wales Industrial Relations Commission and it was a decision of his Honour, Staff Mr J, now retired, and this was a decision that was not related to accident pay at all.
PN4103
It was related to a quite different question which was this; in the context of the New South Wales Commission's principles on award simplification - nothing to do with these proceedings here today- whether or not it was appropriate to carry on a practice to allow the concurrent taking of sick leave while people were on workers comp. That's what that case was about. Now to suggest that in some way that case has any relevance to these proceedings is verging on desperation. That case is conducted in an entirely different statutory context.
PN4104
The Bench will most likely be familiar with the Industrial Relations Act 1996. The New South Wales Industrial Relations Commission has a general power under section 10 of that Act to set reasonable terms and conditions that it considers appropriate. It's very much like the old Industrial Arbitration Act to inquire into industrial matters generally. It is not fettered in any way, shape or form by provisions such as 139 and 134 in this Act. But that case is not even on point. They took you to some comments of President Giudice J in the 2008 decision.
PN4105
I'm' not really sure what that did. All it seemed to do was to re‑emphasise the role that critical mass played in 2008, and I think I've dealt with that, so I don't think it assist them any further. They then talked to you about various drafts of awards that were handed up to the Commission in the Part 10A process. Now I'm not sure why they handed them up, but they did. The fact of the matter is that all sorts of things were handed up and provided to the Commission at various times. What is important is what the Commission did with them.
PN4106
Now I'll just deal with the concrete products question because I'm not sure if this was done to embarrass me personally. It might have been, I'm not sure. In another guise when that award was drafted, Boral drafted it. I have to concede I worked for Boral at the time and I drafted the award. What I will say is this, what the leading construction materials company in Australia wants to put in the safety net might be motivated by all sorts of factors that are not particularly relevant to your considerations today. So the fact that at a particular point in time Boral tried to put accident pay in the draft for the Concrete Products Award, I don't think particularly takes you very far as to your considerations under 134 today.
PN4107
The AWU then made a whole suite of assertions about which awards were kind of the dominant or the not so dominant, and all I can say is this, they are assertions. They're just guesses. I'm not even sure that Mr Crawford was around back then. He's certainly a lot younger than I am. They were just guesses and they should just be taken as that. Now the TCFU, they took you to the 4 yearly review consultation decision. I'm not sure what a decision on consultation has to do with accident pay but they took you to it. To the extent that that decision might have made some comments about the Textile, Clothing and Footwear Union being a vulnerable industry, to the extent that it talked about them being low paid, we've already conceded that.
PN4108
In terms of the ASU's submissions I just want to re‑emphasise the fact that the Bench asked the advocate from the ASU to try and explain some issues about critical mass and, with respect to that advocate, she said "I can't make a guess". I think that was very honest, and that's all it would be. So again to the extent that any assertions were made, I think the Bench need to be careful. I then want to deal just with a few more issues then I'll close. We have in our written submissions dealt with two small matters which we just simply emphasise to the Commission today.
PN4109
The Commission will remember I think that when black coal was before you, my client took a relatively benign approach to the black coal matter but they did raise one matter that that stage, and that was that the claim by that part of the CFMEU sought to cover persons after the employment contract had ended. I think your Honour the presiding member said to me at the time that, "We'll deal with that on another occasion". That occasion has arisen here and to the extent that Mr Ferguson has dealt with that, and to the extent that our submissions deal with that, we press the fact that there's no jurisdictional basis to make an award provision which operates after the employment relationship and the employment contract is extinguished.
PN4110
Now section 137 would probably deal with that in the sense that it would be an inoperative provision if that's right. But we would press the Bench to make sure that if, against everything we've said, it granted one or more of the claims, we say that cannot be a part of it. Now I'm not sure what the state of the second issue is but some of the claims as originally filed sought the clause to provide for over‑award payments. There doesn t appear, in our submission, to be any jurisdictional fetter to that but given that you need to be creating a modern award to set a fair and relevant minimum safety net, that is the bottom through which nobody falls, one would have assumed that making any obligation to pay over‑award payments would be entirely antithetical to that proposition; and to the extent that any union advances that, that should be not adopted either. But that's a question of merit. I want to now deal, if I can, with - - -
PN4111
JUSTICE BOULTON: Would that flow out of ACTU 3, that redrafted provision?
PN4112
MR WARD: I don't know, your Honour. I wasn't being facetious when I said I don't intend to address ACTU 3. I'm not entirely sure what "appropriate rate" means. I'm not entirely sure.
PN4113
JUSTICE BOULTON: But it does say that it would have been received by virtue of this award at the date of the injury. It seems to exclude over‑award payments.
PN4114
MR WARD: Well, the answer is it seems to. As I said at the beginning, the case we were asked to meet is the case in the applications. We're meeting that case. I'm not in a position to change my case because the ACTU have handed up ACTU 3, and some of the claims that we are here to meet seek the payment of over‑award payments. Can I deal then, as I come to close, with some matters related to the modern awards objective and I want to deal with this as economically as I can to time, not because it's unimportant but just a matter of efficiency.
PN4115
The Commission would be under no misunderstanding I would think that its warrant in these proceedings is to ensure that any award sets a fair and relevant minimum safety net. Not what might be seen as sort of desirable or meritorious, but a minimum. That is that which nobody should fall below, and it's required under section 134 to take into account certain matters and our submissions in section 13 deal with this in great detail. But just in short, that means that the Commission is obliged to turn its mind to the limbs of 134.
PN4116
It's obliged to look at those limbs and to determine whether or not there's any facts arising from the evidence that allow it to consider the impact or consideration of those matters, and it must do that. Which again militates against this notion of critical mass because critical mass isn't a part of that. We would ask the Commission to be mindful that section 134 is complex. In regard to the matters it has to take into account the phraseology of 134 differs. Some of the elements in 134 are expressed as a need, some an element of encouragement, some to promote, some to provide, and some to ensure, and the Bench, with respect, will need to be cautious as it goes through the elements of 134 to ensure that it's actually grappling with the specific needs of those particular sections.
PN4117
Now I want to deal with just two or three of them because we've dealt with this substantially in writing already and I don't want to restate it. The ACTU assert at paragraph 63 that award-dependent employees are ipso facto low paid. Well, that's not true. The Full Bench in the annual wage reviews have made it clear that's not the case. They've got a formulaic approach for that. There are a number of persons covered by the modern awards subject to these applications who might very well fall into that category, and there are a number of persons who very clearly wouldn't.
PN4118
For instance stevedoring I've already gone to, but also by way of example one might think that people under the Social and Community Award might fall under that, but you'd be mindful that two and a half, three years ago, they had a massive equal remuneration order. Their rates of pay now for comparable classifications are actually the highest in the award system. So all we'd say is that the Bench needs to be careful that they just simply don't get lulled into the proposition that people on awards are ipso facto low paid. I want to then deal with a matter which four of my opponents have put forward which seems important.
PN4119
They've all said that you need to intervene because there never should be a circumstance where people don't get paid the minimum award wage. Superficially that sounds kind of, "Yep, I get that". But that is, with respect, a principle this Commission has never endorsed. Never. If you take the case that's happening in workers compensation this is what's happening. The wage bargain as everybody in this room would know is struck on the premise that the worker provides their labour and the employer pays for it, and the question arises in workers comp it's a circumstance where the worker, for whatever reason, can't fulfill their side of the bargain.
PN4120
So the question then is what responsibility does the employer bear, and in the workers comp scenario of course it's specialised. The employer pays, subject to - - -
AUDIO MALFUNCTION [11.20 AM]
PN4121
- - - pays into an insurance scheme and that insurance scheme ensures that the employee gets a certain amount of money, and when you look at that scheme it's actually quite generous in this sense. There may well be step‑downs, but the payment is indefinite to the point of termination of the employment relationship. People can be on workers compensation for years upon years upon years. But that's how that particular arrangement is dealt with where they can't keep their side of the bargain.
PN4122
Take sick leave, take personal leave, this Commission deals with it in a different way. That is, you get your full rate of pay but for a much more limited period of time. The minute you run out of sick leave you get nothing. The employer pays nothing. So there are many circumstances in the employment relationship where the employee can't keep to their side of the bargain and the employer pays nothing. They're out in the cold. So the idea superficially of saying, "There should never be an occasion where the employee doesn't at least get the award rate of pay" is a misconception.
PN4123
This Commission for years understands that where the employee can't keep their side of the bargain, for whatever reason, the employer has limited obligations to support them. That's the principle with sick leave, with carers leave and the like. It's the same principle with workers comp. The only difference is this sort of the way they've done it. You know, sick leave is short but you get full pay. Workers comp can be forever but you get less pay. But I just think the Commission needs to be careful of falling into what we say is a relatively superficial attraction to the notion that we need to do this because nobody should ever get below the award rate of pay because that would be wrong.
PN4124
If that is the principle the Commission is going to adopt then we'll obviously have the next case, which is a claim for indefinite sick leave and everything else that follows. I want to just then talk quickly about bargaining. One of the limbs of 134 is to encourage collective bargaining. We deal with this at great length in writing. I won't repeat anything I've said there. The unions' evidence isn't really about a concern about the encouragement of bargaining. I think the predominant sway of evidence, particularly Mr Walton and Mr Dixon, was "It might just make it harder for us to win what we want".
PN4125
Now I'm not really sure that that really goes to 134. There is - probably the most abundant evidence in this case is this, people can bargain for accident pay. That's the most abundant evidence in this case. Simply putting something in an award, we say, almost by force of logic means there's need or reason to bargain for it and so therefore, if anything, putting it in an award is going to discourage bargaining over it because there's no need to bargain over it. Keeping it out of the award obviously will encourage people to want to put it in enterprise agreements, which will motivate people to bargain.
PN4126
But that part of 134 isn't about making it harder or easier for a union to win the bargaining debate, and we ask you to be mindful of that. I want to just make now just some closing comments. We rely on all of our written submissions in relation to the specific elements of 134. There are a lot of things you don't know in this case. You don't know how many people are covered by the awards before you. You don't actually know how many people are covered by the pre‑modern awards as well. You don't know how those people are paid, whether or not they're paid on the award, over the award. You don't know how they're paid.
PN4127
You don't know how many get injured under each award. I think one or two of the unions have had a bit of a stab at that in terms of their industry but not necessarily under the awards. You don t know the true severity of those injuries and, putting aside Mr Barbante, you have no evidence of anybody under an award suffering any difficulties, and Mr Barbante's evidence was "I only suffered the difficulty when I dropped to 20 per cent". That was his evidence. That's it. You do know that workers compensation schemes in this country uniformly have some form of step‑down.
PN4128
That is they uniformly withdraw some element of earnings at some time, and you have to accept Dr Purse and Mr Shaw. There is no empirical evidence to support or oppose step‑downs. You have to accept that. You have to accept that workers compensation is a complex field, over 20 pieces of legislation, and you also have to accept that step‑downs are only one part of the package in each scheme. Those packages include rehabilitation obligations, return to work obligations, scale and rates of benefits as your Honour, Kovacic DP has pointed out in some schemes, minimum floors, approaches to lump sum arrangements, longevity of payments. It's just one part of a very holistic, sophisticated scheme.
PN4129
You do know there has never been a federal test case on accident pay. You know that, and I think heartily about that notion in the critical mass thing about arbitrated decisions. Perhaps one of the reasons again why the Bench wasn't moved in 2008 was there was never a federal test case on accident pay. You know from seeing what happened with the awards as been described by the unions, that really accident pay sort of crept in through industrial osmosis, industrial disputes, settlement of disputes, whatever.
PN4130
But there has never been a full debate and finding by the old Australian Industrial Relations Commission supporting accident pay. You know with certainty that accident pay is clearly a feature and in some cases a dominant feature of enterprise agreements because there's a lot of evidence about that before you today. And you also know that with the exception of Mr Barbante the unions could not bring anybody to give evidence here today to talk about having an injury, experiencing a step‑down and being confronted by hardship.
PN4131
Now I don't know how many millions of employees are covered by these awards, but they could only find one person. One person. You know that the Commission in 2008 adopted a principle of critical mass to get through an historically difficult exercise of crushing those 1600 awards down to 122 and you know why they did that. With respect, we say the Commission should appreciate that it can't replace the requirements of 134 with the critical mass test. Based on those submissions we say the applications before you today in whole should be dismissed. If the Commission pleases, those are our submissions.
PN4132
JUSTICE BOULTON: Yes, thank you Mr Ward. We're going to take a break before we hear the other employer groups. Can you just give us a very brief idea of the order and how long you might need?
PN4133
MS ADLER: I think I'll be next. I should only be about 10 minutes or so.
PN4134
JUSTICE BOULTON: I didn't hear it, sorry?
PN4135
MS ADLER: I'll be up next and I should only be about 10 minutes or so.
PN4136
JUSTICE BOULTON: Good.
PN4137
MR BAUMGARTNER: Also next I guess after her and we'll be about 15 minutes.
PN4138
JUSTICE BOULTON: Good.
PN4139
MS MARK: I'll be next, your Honour, and I'll probably be 15 minutes as well.
PN4140
JUSTICE BOULTON: Yes.
PN4141
MS BLEWETT: And myself finally, I'll be about 10 minutes.
PN4142
JUSTICE BOULTON: Good. Well, look, on that basis we're going to have a break for about 15 minutes. We'll then hear the remaining submissions from the employers and then we'll take the luncheon break and we'll hear the reply submissions. Yes, we'll adjourn until a quarter to 12.
SHORT ADJOURNMENT [11.29 AM]
RESUMED [11.53 AM]
PN4143
JUSTICE BOULTON: Ms Adler?
PN4144
MS ADLER: Thank you, your Honour. Firstly we made written submissions, HIA made written submissions in this matter dated 25 March 2015.
PN4145
JUSTICE BOULTON: Yes, this is the first exhibit and will be HIA 1.
MS ADLER: It is, your Honour.
EXHIBIT #HIA 1 WRITTEN SUBMISSIONS OF HIA DATED 25/03/2015
PN4147
MS ADLER: So just firstly, HIA would support and adopt the submissions of ACCI and I'd also just like to briefly address some industry-specific matters, noting that HIA's interest lies predominantly in the Building and Construction General Onsite Award and the Joinery and Building Trades Award. HIA opposes the variation for accident pay provision in those awards as put by the CFMEU. We submit that accident pay is not necessary to meet the modern award objectives and the unions have brought no cogent evidence to convince you otherwise.
PN4148
The first matter I'd just like to briefly touch on, that Mr Ward did briefly allude to in relation to Ms Hayward's statement, is the use of statistics, and the CFMEU's submissions refers to some statistics from Safe Work Australia and outlines them in their submission. There's an electronic link to those documents so I haven't sought to hand anything up. All I wish to say about that is that obviously I can't dispute those statistics. They're publicly available based on workers compensation data collected by Safe Work Australia.
PN4149
But what I would say is that those statistics say nothing specific about the residential construction industry, which is the industry that we represent. They don't break down. They're simply for the construction industry. Nor do they say anything about award‑covered employees specifically. So I think that they're two caveats you can put on any weight you would give to the use of those statistics. I'd also say in relation to those figures that what's missing from the CFMEU's submission is that generally the incident rates and frequency rates of incidents in the construction industry broadly is decreasing.
PN4150
That's clear on the face of the document, "Australian workers compensation statistics". At table 12 it shows that there has been a 36 per cent drop in the incident rate since 2000, 2001 and a 35 per cent drop in frequency rate of incidents since 2000, 2001. So we're seeing improved safety outcomes in the construction industry, so I'd just seek to ask the Bench to consider those statistics within that context.
PN4151
DEPUTY PRESIDENT KOVACIC: Those statistics would also show that the industry still has a fairly high comparative level of injury?
PN4152
MS ADLER: It would, your Honour, and what I would say about that is that the workers compensation scheme attempts to deal with that through premiums. Construction is one of the higher - has one of the highest premium rates across the board and that's the mechanism in the system that seeks to deal with that fact, which obviously I can't dispute either. But, you know, everybody is working together to try and get that down but I don t know how much weight you can place on those statistics in relation to the insertion of an accident pay provision in a modern award system.
PN4153
The final thing I'd say on the statistics is that clearly it's a moving feast. There has been a drop over a period of time and to insert a provision in a modern award based on those statistics or the current circumstances as they are may be blinded to how it may shift in the future. Section 5 of our submission goes to the modern awards objectives and the distinction between what's necessary to include in modern awards and what's merely desirable, and others have addressed that so I won't take that any further.
PN4154
We also address the reliance by the CFMEU on the history of accident pay provisions in the building and construction industry and the notion of critical mass, which has also been dealt with. The only element that I would add to that discussion is in relation to the preliminary issues decision where they considered the relevance of the history, which I think your Honour raised with Mr Ward, and what I would say is that the history of the decisions and the history of the jurisprudence around the Building Award should be dealt with within the context that those decisions were made, and that's outlined at paragraph 27 of the preliminary issues jurisdiction decision.
PN4155
We would say that as evidenced from Mr McDonald's statement that context was very different from the context with which we're dealing with today, and Mr Ward elaborated on that so I don't need to take that any further. Just touching on the evidence of Sherri Hayward and Neil Browne very briefly, as Mr Ward outlined the evidence of Ms Hayward goes to some mathematics around the calculation of entitlements under the New South Wales workers compensation scheme. The only thing I would add in relation to that is a consideration of how overtime would be dealt with within the various schemes.
PN4156
Just by way of example in the New South Wales scheme if you've worked overtime in a period of 52 weeks prior to the industry(sic) then that would be considered as part of your pre‑injury earnings for the calculation of workers compensation payments. And as was discussed earlier this week with Mr Maxwell and the residential industry, generally speaking a lot of overtime would be worked particularly if you're looking at a period of 52 weeks. So again a factor that's not considered in those calculations would be particularly relevant for the residential construction industry.
PN4157
In relation to the evidence of Neil Browne, he largely talks about those in the commercial sector under enterprise agreements. As such in relation to the residential construction industry we say they should carry very little weight, and in that industry where a lot of employees are award‑covered and non-unionised as well. The other aspect of Mr Browne's evidence I'd just like to address is that at paragraph 6 he makes the statement that the Building Award up until 31 December provided for accident pay. That's obviously not entirely correct. It was a transitional provision dependent on what was in pre‑modern awards.
PN4158
That leads me to a comment made by Mr Maxwell at PN299 in which he also asserts that accident pay was part of the safety net, which has been discussed. It was a transitional provision, so I don't know that it can be put that high. Just briefly in conclusion and aside from what we say would be a lack of evidence going to the modern awards objectives we think it's important to highlight that the policy and regulation of workers compensation is clearly a State matter, and we've gone to that in our written submissions and Mr Ward went to that too. And we would therefore submit that to overlay accident pay within modern awards would be to unduly interfere with that system. That's all the submissions I seek to make, unless there are any questions.
PN4159
COMMISSIONER BULL: When you say the legislation is a State matter, you don't support the nationalisation of a workers compensation scheme then?
PN4160
MS ADLER: I think generally speaking HIA would support harmonisation where it's appropriate and where it wouldn't necessarily result in more red tape for business.
PN4161
COMMISSIONER BULL: Thank you.
PN4162
JUSTICE BOULTON: Yes, thank you Ms Adler.
PN4163
MS ADLER: Thank you.
PN4164
JUSTICE BOULTON: Now Mr - is it Baumgarter?
PN4165
MR BAUMGARTNER: Baumgartner, yes.
PN4166
JUSTICE BOULTON: Good.
PN4167
MR BAUMGARTNER: Yes, well firstly the MTA organisations and the VACC made a joint submission in relation to this matter on 25 March 2015 and I think we would like to have that marked as an exhibit, and we have two affidavits I think that are MTA1 and 2.
JUSTICE BOULTON: Yes I'll mark the submission as MTA1.
EXHIBIT #MTA3 JOINT WRITTEN SUBMISSIONS OF THE MTA AND VACC FILED 25/03/2015
PN4169
JUSTICE BOULTON: Now you want me to - sorry, we've already marked the two witness statements so the submissions should be MTA3.
PN4170
MR BAUMGARTNER: Thank you, your Honour. I should point out there Mr Chesterman from the VACC had been present for the first three days of the hearing but had to return to Melbourne, and he indicates his apologies to the Bench. He did ask me to make some corrections to the submission, in particular about the compensation arrangements in Victoria, and I would take you to paragraph 21 of the submission, which is on page 4. In the table there with the heading "No current work capacity" in week 2 there's a number, 100 per cent. It should actually read 95 per cent in that section there.
PN4171
It should be 95, and on the next page under the heading "Current work capacity" in week 2 the 100 per cent should be replaced with 95 per cent. These seem to have just been typographical errors for some reason that flipped into the document. And in the next row there which says, "Week 14 to 104" I'm told that should read "Week 3 to 13". So that will make the table accurate and I apologise for any inconvenience those errors may have made. Together with this submission, we've filed two affidavits of evidence which were sworn by Mr Paul Eblen and Mr Greg Hatton. These have been marked as exhibits MTA1 and 2 respectively, and these affidavits have not been - are uncontested evidence. They were not sought for cross‑examination.
PN4172
The AMWU vehicle division application is an individual application made to vary the Vehicle Manufacturing, Repair, Service and Retail Award 2010. So it is a separate matter that needs to be assessed separately. In my submission the application fails as it does not provide any probative evidence. Essentially it boils down to a proposition that we had the provision in the past so we should have it now. There's no evidence of real losses for its members, just potential losses, essentially speculation. In the attachment VD8 to the AMWU vehicle division submission, which is marked as AMWUVD 1, it speculates the potential losses but excludes over‑award payments, overtime payments and allowances, many of which in the real world are actually paid as a normal feature of employment, and are paid as a part of the workers compensation payments.
PN4173
We've heard a lot about the different schemes so I won't labour the point there. We have addressed the various schemes at paragraphs 9 to 22 of the submission, but they use a concept of average weekly earnings and they range from 95 per cent to a hundred per cent, and we've heard a lot about step‑downs and the like, but essentially the systems provide substantial remuneration when a person is unfortunately injured. So the AMWU vehicle division has failed to bring forward any evidence for employees that they are actually paid less than the award rate and their over‑award payments as a result of the removal of the accident pay provisions.
PN4174
The evidence of Mr Hatton attests to his long period of service and knowledge of the vehicle industry, and at paragraph 2 of his affidavit, exhibit MTA2, at that paragraph he explains and also in paragraph 3 he explains how it is normal practice for overtime to be worked in the industry, and with skilled labour shortages it has become a common feature to maintain essentially the eight hour day as a normal work day for most workshops in the vehicle repair, service and retail sector. So two hours overtime is the norm and more and more businesses are opening - certainly in dealerships - on Saturday to provide services to their clients, and more and more overtime essentially is being worked.
PN4175
The reality, in my submission, is that for some time now accident pay has not been paid to the majority of employees in the vehicle repair, service and retail sector. This is so because the transitional provision at clause 22 of the Vehicle Manufacturing, Repair, Service and Retail Award 2010 only captured employees that were engaged prior to 27 March 2006, and those employees happened to have to be injured since that date after 1 January 2010. Some nine years on we receive few inquiries about that at the MTA via our employment relations department, and Mr Hatton at paragraphs 9 and 10 indicates that out of the 13,000 contacts with members each year there have only been 34 calls about accident pay since 2010.
PN4176
In total of that, after an analysis, nine had an entitlement to accident pay over that period of time. In the MTA/VACC submission at paragraph 26 we deal with the fact that the relevant State awards and NAPSAs do not include accident pay and it is clearly inappropriate to extend the obligation to pay accident pay for employers that have never had such an obligation in the past. In the AMWU vehicle division attachment to their submission, which is VD 2, it does not include all of the relevant State awards and NAPSAs in New South Wales.
PN4177
For example the Metal and Engineering and Associated Industries State Award is not referred to, and that covers mechanics and auto electricians. The Motor Vehicle Sales Persons State Award covered vehicle salespersons and rubber - sorry, vehicle sales persons, and there was also the Rubber Workers State Award which covered tyre fitters and retreaders. Together with that you have those related NAPSAs. None of these awards and NAPSAs contained accident pay provisions. The MTA organisation views the Commission, by making it a transitional provision, intended to phase it out.
PN4178
As dealt with at paragraphs 5 and 6 of the MTA/VACC submission we indicate that the unions had an opportunity to advance a claim for a national standard but have failed to do so. Our view is that the unions have now missed this opportunity and accident pay is no longer relevant in a modern award. The MTA and the VACC support the ACCI submission and have summarised our support at paragraph 7 of the MTA/VACC submission. We also should indicate we support the submission of the other employer parties, including the AiG submission.
PN4179
The view we would say is that the relevant schemes across the States and Territories are moving closer together in terms of payments to employees and now provide a fair and relevant minimum standard net of terms and conditions. I should say a safety net of terms and conditions. Mr Eblen's uncontested evidence at MTA1 supports this contention at paragraphs 4 to 6. In particular he says that, or he indicates generally that the accident pay provisions were needed in the period 1960 to 1970 but it is no longer needed, given the improved payments now applicable.
PN4180
He also supports the need for relevant step‑downs in entitlements to provide the necessary incentives. This is based on his lengthy experience of involvement in the South Australian workers compensation system. Essentially the accident pay provision, if awarded, would in my submission simply delay the step‑down process. The AMWU vehicle division in its submissions on Tuesday and at paragraph 11 of their written submissions suggests that the pre‑reform awards provide a standard and created this concept of a critical mass. We agree with the submission of the ACCI that this is not a relevant consideration for this Tribunal.
PN4181
They suggest the federal awards cover the majority of employees covered in the industry. We would indicate that this may have been the case in March 2006 but with the advent of Work Choices, membership of registered organisations no longer mean coverage under the federal awards and with the limited direct respondency lists within the predecessor awards, coverages naturally of that instrument or the predecessor instrument reduced over time with the advent of Work Choices. And so the coverage essentially has eroded to the point where you couldn't argue categorically that they had this concept of critical mass, even if you were to accept that view.
PN4182
The AMWU vehicle division in its submission is now claiming a standard of 39 weeks of accident pay based on this being applicable in most States and Territories, and have extended it to States and Territories that did not have such a requirement. However in New South Wales it is only the tyre fitter section of the industry that had 39 weeks of accident pay. This was included when in 1994 the conditions of the Rubber Workers Award were incorporated into the Vehicle Industry Repair, Service and Retail Award at the time. Looking at the MTA New South Wales membership, only 5 per cent of members are tyre fitters and retreading businesses, so the majority would have applied 26 weeks when it was applicable.
PN4183
It is likely this proposition is similar in Queensland, so it is misleading to suggest that the prevailing standard was 39 weeks. In the submission of the AMWU vehicle division it refers in its attachment at VD10 to the median length of workplace absences, and this ranges from five to six weeks. They also refer to the evidence of Mr Hatton at MTA2 at paragraph 14, that the absences are less than three months, and they agreed with his observation. It seems to me, in my submission, that a median absence - if the median absence is five to six weeks as that statistics show and Mr Hatton is correct and this is accepted by the union, then it points to the lack of the need for a longer period of support for employees, which is essentially the point Mr Hatton has made in paragraph 14 of his evidence.
PN4184
The AMWU vehicle division in its submission yesterday indicated concern that the absence of the accident pay in the Vehicle Manufacturing, Repair, Service and Retail Award 2010 will mean that they will be removed from enterprise agreements or enterprise awards. This does not seem to have been the case. Accident pay provisions were removed in March 2006 and only came back in a transitional sense in 2010. In the AMWU vehicle division's submission at attachment VD2 it indicates that the enterprise awards have maintained accident pay entitlements over that period of time.
PN4185
The provision of accident pay, in my submission, should be a matter for the parties of such enterprise awards and any enterprise agreement that have maintained such provisions. This is an area of activity that should be left for such collective negotiations rather than imposing such complex arrangements on award-reliant businesses. In paragraphs 6 to 8 of the evidence of Mr Hatton in exhibit MTA2 he deals with the complexity of the accident pay provision historically, and that level of complexity has been maintained in the proposed union clause.
PN4186
The overlaying of additional obligations by an accident pay provision is inappropriate in a modern award and leads to unnecessary complexity. The Fair Work Commission should not intrude, in my submission, into the public policy of relevant State and Territory governments. This change imposes additional regulatory burden, employment costs and so in my submission it runs counter to the modern award objective at section 134F, plus it is not a simple easy to understand provision, so again runs counter to the modern awards objective at section 134G. Conclusively the proposed clause - - -
PN4187
JUSTICE BOULTON: But this doesn t take into account ACTU3, does it, what you're putting?
PN4188
MR BAUMGARTNER: No it doesn't, and I guess that if the decision was to move towards such a clause a simple, more straightforward provision would need to be created, in my submission, so we haven't really put our mind to that provision. So, conclusively in my submission the proposed clause should be rejected. I note that questions have been raised regard take‑home pay orders, especially as to why they have not occurred or been sought. In my submission this is a clear indication as to the fact that the accident pay issue is a non-issue.
PN4189
Clearly at the time the sunset provision was removed, if accident pay was a real concern there would have been employees that would potentially have lost an entitlement. Clearly this has not been the case and it confirms it was appropriate to remove the transitional provision and, in my respectful submission, there's no point in continuing with this archaic provision. That would end our submissions, unless there are any questions of us.
PN4190
JUSTICE BOULTON: Thank you. Now who's next? Ms Mark?
PN4191
MS MARK: Thank you your Honours, Commissioner. The guild has filed some submissions in relation to this issue on 25 March and I seek to have those marked.
PN4192
JUSTICE BOULTON: We ll mark it exhibit PG1.
PN4193
MS MARK: Yes.
PN4194
JUSTICE BOULTON: That's a letter from Meridian Lawyers dated the 25th.
PN4195
MS MARK: 25 March. That's correct, your Honour, yes. That's right.
JUSTICE BOULTON: 25 March, yes.
EXHIBIT #PG1 LETTER FROM MERIDIAN LAWYERS DATED 25/03/2015 - WRITTEN SUBMISSIONS OF THE PHARMACY GUILD
PN4197
MS MARK: Thank you, and noting the time and obviously given that we're here representing the Pharmacy Guild I'm proposing to focus today on submissions made by the SDA. We refer to and rely on the submissions made by ACCI in respect of some of the overarching principles articulated by the ACTU. But as I said today we're focusing on some of the submissions made in respect to the Pharmacy Industry Award by the SDA.
PN4198
So at the outset I would just note that comments made by the SDA that accident make‑up pay has been a longstanding entitlement condition in numerous pre‑modern awards, that was articulated on Tuesday and it was also a contention made in the written submissions of the SDA, as noted in our submissions, accident make‑up pay was present in two pre‑modern awards that preceded the Pharmacy Industry Award. That was two of 12 and even then it operated only in Victoria. So it's our submission that it's not a correct submission by the SDA to say that it was a longstanding entitlement to those covered by the Pharmacy Industry Award. That's just not the case.
PN4199
In its submissions - I'll just briefly touch on this - dated 5 December and again on Tuesday the SDA referred to three enterprise awards which contain accident make‑up pay that extend beyond that one jurisdiction, which is Victoria, and for completeness the guild just notes that none of those awards relate to the pharmacy industry. In a similar vein - and again it has been referred to this morning so I won't labour the point - the SDA has referred to this principle of critical mass. In its submissions on Tuesday it did say that the principle of critical mass should be applied to the insertion of accident make‑up pay provisions in modern awards according to its substantive application, and it has referred to the retail decision that was referred to again this morning by Mr Ward. In that decision it was stated - and again as has been said this morning so I won't spend too long on this - that:
PN4200
Where there is significant disparity in term and conditions we have attached weight to the critical mass of provisions and terms which are clearly supported by arbitrated decisions and industrial merit. We have considered the impact of the provisions based on the information provided by the parties as to current practices.
PN4201
Now I wanted to refer to that because in relation to the pharmacy industry I think it's particularly pertinent. The principles - it's indisputable I think that there is a lack of arbitrated decisions to justify the insertion of accident make‑up pay in the Pharmacy Industry Award, and if regard is had to current practices, it's simply just not the case that accident make‑up pay was a feature of pre‑modern awards prior to the Pharmacy Industry Award. It's a concept that is not common, in fact I'd go so far as to say it's quite foreign to our industry and it will introduce, in our submission, a burden on employers that the majority of them have not been required to turn their mind to before.
PN4202
The SDA, just quickly, hasn't provided any evidence regarding why the inclusion of accident make‑up pay is necessary to achieve a fair and minimum safety net having regard to the employment costs which such a provision will impose, and obviously that's a consideration which this Bench is required to have regard to when looking at the modern awards objective and whether or not the inclusion of such a clause will provide a fair minimum safety net. The SDA has gone so far as to say that accident make‑up pay has the potential to increase employment costs - if it does, sorry, have the potential to increase employment costs, the costs involved are not enormous, and it even goes so far as to say in its submissions that:
PN4203
The cost has to be balanced against the effect of accident make‑up pay as a necessary safety net entitlement for injured workers and the negative financial impact on an injured worker in the initial period of recovery for a small period if accident make‑up pay is not reinserted.
PN4204
I would just quickly say in relation to that comment that accident make‑up pay is not being reinserted into our award. It's a fresh provision and I think that those are quite generalised submissions in the absence, I might say with respect, of any real probative evidence to support it. As Mr Ward touched on before, six witness statements have been filed from the SDA. None of them are from the pharmacy industry. All of them except for one, I think it was Ms Park, are covered by enterprise agreements and I believe from my review of the statements it seemed that Ms Kilpatrick was the one witness who doesn't already receive accident make‑up pay.
PN4205
So in our view I think it's - to cut it short, I think it doesn't really cut it to say that that evidence is sufficient to support statements of such a generalised nature, particularly in circumstances where a provision is being sought to be inserted into our award that employers have not been exposed to before. Now we noted at paragraph 74 of our submissions that the pharmacy industry is characterised by small business employers. The majority employ only around eight people. Pharmacy is unique in that proprietors are required to be aware of ongoing changes to government policies and regulations and they operate in quite a sophisticated regulated environment.
PN4206
It's our submission that the insertion of a clause like this to employers who have not had to turn their mind to it before is something that will present a regulatory burden, I think, having regard just to the wording of section 134 which, in the context of the other regulatory requirements that pharmacists are to consider, is onerous on them and will be a burden. The SDA has stated in response to our submissions that the sky hasn't fallen in, in Victoria, where accident make-up pay was in place and also they've said that it has been operating in Victoria for 30 years. Look, that may be the case but in our respectful submission it's just not satisfactory to rely on those submissions in the absence of any meaningful evidence to say that the insertion of this clause won't impose a regulatory burden on employers.
PN4207
When regard is had obviously to this review's - the preliminary decision in this particular 4 yearly review about the nature of evidence that is required to be adduced in support of a clause which will have such a significant impact on so many employers, we say that evidence just isn't probative or - yes, isn't sufficiently probative to justify the position of the SDA. I might just touch very quickly on the submissions made by the SDA in relation to enterprise bargaining. The SDA have said at paragraph 68 of its oral submissions - I say that because obviously their oral submissions were actually handed up as well as being given orally.
PN4208
So 68 of those submissions from Tuesday they've said the accident make‑up pay will facilitate collective bargaining. I just wanted to note that there is a very low - I think it's probably fair to say non-existent rate of collective bargaining in the pharmacy industry, and so that submission has no bearing on the Pharmacy Industry Award. For completeness I do note that the evidence from the SDA that accident make‑up pay has not discouraged or acted as a disincentive to collective bargaining, and that's a theme throughout their submissions, I'd just like to note that that's not what is required by section 134.
PN4209
It says that it's the role of this Commission to ensure that modern awards provide a fair and relevant safety net, having regard to the need to encourage enterprise bargaining, and there has been no evidence from the SDA to support that submission. Just briefly as well, the SDA have said that there's - it's correct that because there is - well, people in the pharmacy industry are award-reliant but it's our submission it doesn t necessarily follow that they are low paid, and that has been touched on today as well by Mr Ward from ACCI and we'd just like to endorse those submissions.
PN4210
In support of - I'll just note that the SDA has filed a 2013 retail workforce issues paper which provides a nice snapshot of the retail industry. It looks at - it breaks down the demographics of the industry, the pay in the industry and the average hours worked. It's a very interesting document but I, with respect, would just like to say that there has been no establishment by the SDA that I can see between the information in the report and the need for employers to pay accident make‑up pay, or how the current State-based workers compensation scheme is inadequate or inefficient to address - to ensure, sorry, employees in the pharmacy industry who are unable to work due to a work-related injury will be unable to meet their financial commitments. I think they're pretty much our submissions, your Honours and Commissioner. So if there are any further questions? No? Okay.
PN4211
JUSTICE BOULTON: Good. Thank you Ms Mark.
PN4212
Ms Blewett, is it?
PN4213
MS BLEWETT: Yes.
PN4214
JUSTICE BOULTON: From the Printing Industries Association?
PN4215
MS BLEWETT: That's right. Thank you, your Honour.
PN4216
JUSTICE BOULTON: Yes.
PN4217
MS BLEWETT: Your Honours, in the interests of time I'll be brief. I seek to rely on the written submissions filed on 25 March 2015 and seek to have those marked.
JUSTICE BOULTON: Yes, we'll mark it PIA1.
EXHIBIT #PIA1 WRITTEN SUBMISSIONS OF PRINTING INDUSTRIES ASSOCIATION FILED 25/03/2015
PN4219
MS BLEWETT: Thank you, your Honour. In addition, the Printing Industries Association of Australia generally supports and adopts the submissions of ACCI. The Printing Industries Association opposes the AMWU's claim to insert a clause into the Graphic Arts Printing and Publishing Award 2010 that would nationalise accident make‑up pay. The wording of the clause sought by the AMWU is set out at paragraph 5 of their submissions. The relevant length of time for which they seek accident make‑up pay would be 39 weeks and the relevant rate of pay which they seek is for the employee to be paid at the rate as if they had been on paid personal leave.
PN4220
We oppose the application on a matter of principle of law and moreover submit that even if the Commission accepts that accident make‑up pay is an allowable matter, that the AMWU have not made out a case adequately supported by evidence to support the insertion of such a clause. The AMWU have not advanced any evidence or rationale for why 39 weeks should be the standard by which accident make‑up pay should apply. It appears that they have cherry-picked the highest rate of pay and the highest duration which previously applied in the pre‑modern award in Victoria, and sought to have that surreptitiously inserted in the national award.
PN4221
No rationale was given as to why 39 weeks was an appropriate length of time, or why that would be satisfactory to meet the modern awards objective. The entirety of the AMWU's evidence consisted of two witnesses. These witnesses did not refer to the printing, graphic arts or related industries specifically however I will just analyse their evidence briefly. First we heard from Mr Alan Mansfield at AMWU2, who is a workers compensation and rehabilitation officer employed by the AMWU. As such, his evidence is tainted by bias. Moreover his experiences are limited to where there had been difficulties with a return to work and, after cross‑examination by my friend Mr Ferguson, he conceded that there are already incentives in place in the New South Wales workers compensation regime in terms of lower premiums for providing suitable duties to employees.
PN4222
Mr Mansfield did not provide specific examples of the general reluctance of employers to provide a modified job, but rather seems tainted by his perception and his biased perception as to the motivations and intentions of employers. So again his experience is limited to New South Wales and he has some limited experience with the ACT, however he cannot be said to speak for the nation on this issue. The second witness adduced - brought forward by the AMWU was Mr Dababneh at AMWU3.
PN4223
Mr Dababneh is a partner at Turner Freeman Lawyers and, as it was established in cross‑examination, has a longstanding commercial relationship with the AMWU and accepts referrals, client referrals from the union. As such, his evidence is also tainted by bias and after the extensive objections of my friend, Mr Ferguson, Mr Dababneh's statement consisted of effectively one anecdote of an undisclosed employee, Ms F, who he says has had to withdraw her children from extra-curricular activities and move in with her parents after her pay was reduced.
PN4224
Now I just reiterate to the Commission that the role of the award is not to insulate people from difficult times or to provide an ideal, but rather the modern award objective is there to provide a fair and relevant minimum safety net. As such, the AMWU has not advanced any evidence of probative value that should sway this Commission to insert an accident make‑up pay clause into the modern award. Moreover I seek to remind the Commission of the decision of Commissioner Whelan with respect to the pre‑modern award in 2002, and in that decision Commissioner Whelan said:
PN4225
The issue of make‑up pay must be dealt with on a sector by sector basis, considering both claims and experience and costs.
PN4226
And this was conceded by the AMWU in the Metal Industry Award matter. The relevant citation for that decision is Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union Re Graphic Arts General Award 2000 Re Accident Make‑up Pay PR914080, 5 February 2002, Commissioner Whelan at paragraph 38. So in this decision it was established that the issue of make‑up pay must be dealt with on a sector by sector basis yet in these proceedings the AMWU have made very broad-brush submissions and relied on the same reasoning for the raft of awards and the raft of industries on which accident make‑up pay would impact.
PN4227
We say that there has not been adequate care or consideration given to the claims and experience and costs of the graphic arts and printing industry specifically. So once we establish that there is no evidence to support the AMWU's claim it must be seen that the AMWU's application is essentially a policy argument based on an interpretation of fairness pursuant to the modern award objective. On this point I'd ask the Commission to engage with the intention of Parliament in section 139 of the Fair Work Act and not usurp the appropriate separation of power set down by the Act and that section specifically.
PN4228
My friends on this side of the Bench have had four years to discuss this issue with the industry association or to raise the issue of accident make‑up pay with respective parliaments, however they have not done so. Workers compensation accident make‑up pay is a complex and multifaceted issue and there has been no research to this point that has been able to evidence a clear correlation or causal relationship between step‑downs and return to work. So we're left in this political conundrum and, with respect, we submit that this is not the appropriate forum to resolve that issue.
PN4229
Rather if the unions want to pursue it appropriately, it should be done through political avenues rather than in this Commission under the guise of objectivity. Their Honours in the award modernisation decision were incredibly generous in inserting transitional provisions in to the modern award and, in doing so, effectively put the unions on notice that these provisions would sunset. We submit that it is time for the AMWU to accept that the transition period is over and this is not the appropriate time or place to resurrect the clause and expand its scope to a national basis.
PN4230
Accident make‑up pay only ever applied in Victoria and at the rate of 39 weeks, and in New South Wales at the rate of 26 weeks and it is, in our submission, unfair for members in every other State and Territory of the country to now be subject to accident make‑up pay. The AMWU have not discharged their burden to advance a case supported by appropriate evidence that would support the variation of the Graphic Arts Printing and Publishing Award 2010. On that basis we submit that the application should be dismissed. Those are our submissions unless there are any other further questions.
PN4231
JUSTICE BOULTON: Thank you, Ms Blewett.
PN4232
Well, I think that completes all the submissions, Mr Ferguson?
PN4233
MR FERGUSON: I'll just address you in relation to ACTU3.
PN4234
JUSTICE BOULTON: Yes.
PN4235
MR FERGUSON: Thank you. Look, ACTU3 was advanced by the ACTU as - if I can just describe it this way as a replacement claim that was being proposed by various unions. Subject to I think there was a caveat or a different proposition put by the CFMEU which, if I understand it correctly, it was described almost as an alternate clause that might be adopted by the Bench. It was also suggested or put forward on the basis that there was no substantive difference in the contents of the claim relative to the various claims that were before the Commission.
PN4236
Now we've had a quick review of it overnight, as we discussed, and it seems apparent to us that there are a number of substantive changes between what is being sought now and what was sought in the original claims, and that many of them that we've already been able to identify, would be to the detriment of employers. Now I'm not sure if I've comprehensively caught all of them but the ones we've picked, for example include the removal of exemptions, if you will, from the entitlement that were in certain awards in relation to short-term absences or injuries, the removal of certain exemptions that related to industrial diseases, the removal of certain exemptions that related to new employees.
PN4237
There is also a change in what's being proposed in terms of the obligation in relation to entitlements that continue beyond termination. In some cases it's now being proposed that there be an obligation where there was not. In others there's now the removal of certain caveats that were placed on it about terminations that occurred for serious misconduct, things like that. We don't understand all the reasons for these changes. As I said, it was put forward on the basis that there wasn't substantive changes. I assume they'll be explained in the reply submissions but we don't know those, and so this gives us some difficulty at the moment in terms of dealing with this comprehensively.
PN4238
The other issue is there may be problems flowing from the wording or the drafting of this, both in terms of the form of words but I suppose the approach that has been taken as well. If we look for example at 1.2, the meaning of accident pay, if that's directed at removing the obligation to include over‑award payments we'd obviously say that's good thing. We've argued against the appropriateness of including over‑award payments in this obligation. But I'm not sure that we can be satisfied that this clause will do that or achieve that effectively. What we'd need to do is have consideration of what the specific words mean in the context of all 39 proposals or all 39 instruments that are the subject of this application.
PN4239
Because when you look at things like references to just an appropriate rate of pay that's payable by virtue of the award with some exemptions, it becomes quite a complex issue. There are some explicit exclusions for things like shift allowance, loadings or overtime but it doesn't necessarily exclude, for example, every penalty that may be payable under the award. There are other complexities that come to mind, and I haven't fully thought them through. Take for example the vehicle industry - and I might be wrong on this, but there's a commission structure in there which then effectively becomes payable as part of an award term but is in all intents and purposes otherwise an over‑award payment.
PN4240
Now we'd need to go through that properly to address this in any sensible or meaningful way, and there may well be more issues when we look at it properly, but obviously we've only had overnight. In that context and on the basis that, I suppose notwithstanding what may have been a narrower invitation from the Bench, it has been advanced as a replacement claim. We haven't mounted a case in response to this. We've mounted it in response to the specific proposals, because that's what these proceedings were about. They were a collection of specific - of separate claims that were for convenience being heard together, but it wasn't a case just about the merits of accident pay.
PN4241
What we say is that if that is going to be relied on we'd need some time to think about it and address or comment on it. Now we'd be content to do that in writing, and I appreciate that this Bench is obviously very anxiously to bring these matters to a conclusion as quickly as possible. But we would seek an opportunity to address the Bench on this new material that was put to us, you know, essentially as I was on my feet responding to a different case. And ideally we'd seek an opportunity for three weeks to review this and address the Bench in relation to it. It could have significant impacts on employers, these differences, and we haven't had a chance to think that through, and I ask for the three weeks in part being mindful that there are a lot of competing obligations imposed on the organisation by the award review process generally. But if less time is needed we'd try and indulge that of course.
PN4242
JUSTICE BOULTON: Yes, thank you.
PN4243
MS STARR: If I can be heard? The first thing that we would point to is that nobody from the ACTU and I don't think Mr Maxwell, has purported that this is a replacement claim. I think we've been quite clear, and I think that the instructions from the Bench were quite clear that this is the ACTU was asked to consider and put up what is a clause which - and of course it only arises if the union applications are successful - what a clause might look like that would be included in the modern awards. The draft determinations from each of the unions have been put on and the vast majority of those were put on in September last year.
PN4244
So the fact that the employer - I appreciate firstly that the draft has come late in the proceedings, but there's no excuse for the employers not to understand or to be familiar with the substance of the claims that the unions have been seeking. I would be happy to check the transcript, but I don't recall saying that the clause which has been provided, there's no substantive changes from what has been proposed in the various draft determinations. I think I said that the clause has been drafted based on the black coal industry. Of course there might be some - for some of the draft determinations there will be little to no differences in what they were seeking to what is included in that model clause, and for others there might be some changes, and I think that Mr Ferguson has touched on some of those in relation to perhaps the mechanics of the clause.
PN4245
The substance and the real debate in my view is about the meaning of accident pay and I think that - and I've already made the concession that the language which is used, that "appropriate rate of pay" does need to be interpreted in the context of the relevant award. That appropriate rate of pay, there might be a better way that that can be described. There may be some nuances with respect to the awards that need to be dealt with so that that clause is clearer as to what is required to be paid, and in that respect the affiliates would be in a position to have those discussions to ensure that there is clarity in that regard.
PN4246
JUSTICE BOULTON: The unions could clarify that in their reply submissions, couldn't they?
PN4247
MS STARR: Yes, your Honour. I think that that's - - -
PN4248
JUSTICE BOULTON: Yes, so I'm just wondering whether we should deal with this as part of your reply submissions, and that means we can take the lunch break and then we'll come back and hear all those submissions.
PN4249
MS STARR: Yes, and on this we would - yes, we can deal with that in our reply submissions but that still leaves open a question whether the employer parties have an opportunity, have three weeks apparently, which seems like a very long stretch of time. We think that the matters - if we deal with it in reply, we believe that the matter can be dealt with today without the need for any written submissions from the employer parties.
PN4250
MR WARD: Your Honour, I apologise. I know we want to break for lunch. My clients seek no time. Perhaps we're more confident about what's occurring here. Directions were issued for a case to be put on. People complied with those directions. We've met that case today and that case, from our perspective we've closed on it. The question arises now for the Bench to consider who wins and loses that case. We take what the ACTU have provided this Bench as nothing more than this; optimistically if they were to be successful, what form of order might be made.
PN4251
We take it no more than that. We assume that they're being honest when they say they're not trying to mount a new claim or a change in claim. The case we have to meet, which we've met today, is the one filed by the unions in accordance with the directions. We don't ask to be heard on what happens if we lose the case. That's a matter for another day. We don't seek any time. The case was put on in accordance with the directions and we've responded to it today. It's now a matter for the Bench, subject to hearing reply submissions, to make a ruling as to who wins and who loses the case first.
PN4252
JUSTICE BOULTON: Yes. Well, Mr Ferguson, we're not intending right now to rule on the matter or to give you any extra time. I think things might become a bit more clear - - -
PN4253
MR FERGUSON: Yes, I - - -
PN4254
JUSTICE BOULTON: - - - when we hear the reply submissions.
PN4255
MR FERGUSON: No, that's fine. I appreciate that.
PN4256
JUSTICE BOULTON: And if you want to raise it again at the end of that.
PN4257
MR FERGUSON: At that time.
PN4258
JUSTICE BOULTON: You can.
PN4259
MR FERGUSON: Yes. Thank you, your Honour.
PN4260
JUSTICE BOULTON: Yes, we'll take the luncheon adjournment. Have we got any indication as to how long the replies might be?
PN4261
MS STARR: I had estimated approximately three hours. So we were going to seek the indulgence of the Bench to sit - if we're breaking until 2 o'clock that would require the Bench just to give us that indulgence to sit later than 4 o'clock.
PN4262
JUSTICE BOULTON: We'll just have a short luncheon break. We'll adjourn until 1.30.
PN4263
MS STARR: Thank you.
PN4264
JUSTICE BOULTON: We'll resume the proceedings then.
LUNCHEON ADJOURNMENT [12.55 PM]
RESUMED [1.34 PM]
PN4265
JUSTICE BOULTON: Mr Maxwell.
PN4266
MR MAXWELL: Thank you, your Honour. Your Honour, I think I'm going to start the batting order for the unions in regard to the replies. Before going to our response to the employers' submissions I would like to just deal with two issues that were raised by the Bench during the submissions I gave on 25 May. The first issue is that of award coverage. In the short time I've had available I've tried to find relevant statistics to assist the Commission. In regard to the issue more generally I did find a reference in the explanatory memorandum to the Work Choices Bill 2005 which may help the Commission. I have a copy of an extract from that which I'd just like to take you to briefly. Your Honours and Commissioner, this is an extract from the explanatory memorandum for the Workplace Relations Amendment (Work Choices) Bill 2005. I only really wish to take you to the last two - - -
JUSTICE BOULTON: I'll mark it. I'll mark it CFMEU6.
EXHIBIT #CFMEU6 EXTRACT OF WORKPLACE RELATIONS AMENDMENT (WORK CHOICES) BILL 2005
PN4268
MR MAXWELL: I only wish to take you to the last two pages, and in particular starting at the last paragraph on page 10 where in looking at the costs and benefits to business of the Work Choices the explanatory memorandum states:
PN4269
The present system with State and federal jurisdictions does not make it clear for employers whether State or federal industrial instruments apply to their employees. It is at present also possible for employers to be subject to both State and federal industrial instruments in respect of particular types of employees. Determining appropriate coverage and managing employees in different jurisdictions is an administrative cost to employers.
PN4270
And then at the top of page 12:
PN4271
The ABS provides clear evidence of the confusion caused by the present workplace relations system. It does not publish separate statistics on federal and State award coverage because employers are unable to reliably determine which award June covers their employees.
PN4272
They do go on and if I can just - they do say in that explanatory memorandum that they expected that the take-up or the coverage of the Work Choices Bill would be 85 per cent of Australian employees, and there is a reference - bear with me. They estimated that 50 per cent of - and if you look at - sorry, they say the remaining 15 per cent of employees will continue to be covered by their respective State jurisdictions. So on mathematics the expectation was that 50 per cent were currently covered by the federal system, there would be 15 per cent that would remain and 35 per cent come in. Now that's obviously a very generalisation(sic) across the board. The other physical reference that I've managed to find is a feature article by the Australian Bureau of Statistics of July 2011.
JUSTICE BOULTON: Thank you. I'll mark it CFMEU7.
EXHIBIT #CFMEU7 FEATURE ARTICLE BY AUSTRALIAN BUREAU OF STATISTICS, JULY 2011
PN4274
MR MAXWELL: Your Honours, this was an analysis by the ABS looking at the trends in employee methods of setting pay and jurisdictional coverage. I just want to take you to the table on page 4 of that document. Now that deals with the jurisdictional coverage of employees' pay setting arrangements, and you will see that they talk about the federal jurisdiction and the State jurisdiction; and they talk of the first column of statistics deals with May 2006 which would be after the advent of the Work Choices legislation which came into effect, I think as we all know, at the end of March 2006.
PN4275
But essentially what that shows is that in the federal jurisdiction there were 36.1 per cent of employees covered by federal awards or agreements and 9.8 per cent were covered by a State award or agreement. If you go to the footnote at B under that table it says that B refers to, "Employees transitioning into the federal jurisdiction." Now based on those two documents it would appear that the number of employees that transitioned from the State system to the federal system at the time of Work Choices is somewhere in the figure between 9 per cent and 35 per cent.
PN4276
They are the only statistics I've been able to find that deal with the subject. I have gone through various State wage cases, decisions and other Industrial Commission matters to try and find any reference, but none of them appear to make any reference to say how many people were actually covered by the State system prior to Work Choices and therefore how many were affected by transitional provisions. In regard to the construction industry, and you will recall that I did make reference to the union's employment map which provided employment figures broken down by State. I do have a copy of the union's employment map which is based on the ABS statistics.
PN4277
JUSTICE BOULTON: So this is something that you've prepared based on ABS statistics?
PN4278
MR MAXWELL: That's correct. Your Honour, this is an employment map which we publish on our website which we do every quarter, with the change in the employment figures for the industry which shows the increase or decrease in employment across the various States and in total for the construction industry.
PN4279
MR WARD: I object to it being tendered. They're in reply. The purpose of reply is to respond to things we've said, it's not to tender new evidence. However vanilla it might seem, however benign it might seem, as a matter of proper, reasonable, fair process unions should not be allowed to tender evidence in reply. It just shouldn't happen. Now if his response is to questions posed by the Bench he should simply answer the questions. He shouldn't try and beef his case up in some way by tendering stuff in reply.
PN4280
MR MAXWELL: Your Honours and Commissioner, I was specifically asked the question by the Deputy President as to what is the employment rate down across the States in the construction industry. This is a way of providing those figures in a conclusive way where it's based on ABS figures. I also have another document which is produced by the Australian Government, which is a public document which reaffirms the percentages which I am just about to quote which are based on the figures in this table.
PN4281
MR WARD: Your Honours, my client can't test this, the MBI. They can't test it. If he wants to provide you with a copy of an Australian Bureau of Statistics document, even though he really shouldn't be tendering stuff in reply, I'll probably take a slightly more relaxed approach to that because it's an ABS document. Obviously we might need time to understand how to respond to it, but he shouldn't be allowed to tender documents he has made up based on anything, in reply.
JUSTICE BOULTON: Yes, well I understand it's in response to a question from the Bench and it's tendered on the basis these are statistics which have been compiled and used by the CFMEU, and we'll take them into account on that basis. So we'll accept the document. We'll mark it CFMEU8.
EXHIBIT #CFMEU8 EMPLOYMENT MAP OF THE CFMEU
PN4283
MR MAXWELL: Your Honours and Commissioner, the only figures I wish to draw your attention to there is if you look at the employment of New South Wales and Victoria, those figures taken together account for 54.3 per cent of the workers in the industry. If you take Victoria, New South Wales and Western Australia the figure is 68 per cent. If you take Victoria, New South Wales and Queensland the figure is 75.7 per cent and if you take Victoria, New South Wales, Queensland and Western Australia the figure is 89.4 per cent. In terms of the Australian Government publication, which I hand up just to confirm the figure for New South Wales, Victoria and Queensland.
PN4284
JUSTICE BOULTON: Yes, I'll mark it - - -
PN4285
MR WARD: Your Honour, I object to this document. Again - I'm sorry.
PN4286
JUSTICE BOULTON: Sorry?
PN4287
MR WARD: I'm sorry, but again he's being allowed to tender things in reply and he shouldn't be allowed to do it. Now if the Bench overrule me, I accept that, but I feel compelled to actually put the objection in.
PN4288
MS ADLER: For the record, your Honour, I'd have to support that objection as well.
PN4289
JUSTICE BOULTON: Good.
PN4290
Well, this is an extract of a government publication, is it?
PN4291
MR MAXWELL: That's correct.
JUSTICE BOULTON: Yes, we'll accept it. CFMEU9.
EXHIBIT #CFMEU9 EXTRACT OF AUSTRALIAN GOVERNMENT PUBLICATION
PN4293
MR MAXWELL: Your Honour, the only point I wish to take you to in that document is on page 3 where they talk about the geographic distribution and that first paragraph under that heading where they say:
PN4294
The geographic distribution of employment in the construction industry broadly reflects the distribution of the population. The majority of employment in the construction industry is concentrated in New South Wales, Victoria and Queensland, which together account for 75.4 per cent of construction employment.
PN4295
You will recall that the National Construction Award accident pay clause applied in Victoria, New South Wales, Western Australia and Queensland, and that NAPSAs for construction in Western Australia and New South Wales contained accident pay. We support(sic) that based on the figures provided, that supports our critical mass argument. I was also asked a question by the Deputy President regarding the level of overtime to be worked at which the award accident pay would cut out. I've prepared a table. I'm not sure whether Mr Ward wants to object to this but it's clearly a mathematical calculation.
PN4296
MR WARD: Well, show it to me first.
PN4297
MR MAXWELL: If I can just explain this document, your Honour. The classifications are those that we used in attachment C to our written submission. The weekly rates are those that were identified in that document. We've then divided those weekly rates to get the hourly rate. We then calculated what the overtime rate is at time and a half. We've then done the calculation to work out the amount at which 80 per cent of the award wage - sorry, at what amount of money the award wage would equate to 80 per cent of that wage.
PN4298
So if we take the CW3 carve-ins which shows that if they earned $1045.95 per week and their weekly rate was $836.76 then that employee would not receive accident pay under the award clause proposed by the CFMEU. In monetary terms that's a difference of $209.19. We've then divided that by the overtime rate to work out the number of hours of overtime at which the accident pay would then cut out, and you will see that the number of hours is the same for all the classifications in the different awards. So we would expect that that would be the level of overtime that would apply - sorry, the number of hours of overtime that would apply in virtually every award where the first overtime rate is time and a half.
PN4299
JUSTICE BOULTON: So this suggests that people who are working that number of hours' overtime per week will not have any benefit under the accident pay provisions that you're seeking?
PN4300
MR MAXWELL: That's correct.
PN4301
JUSTICE BOULTON: In the event of an injury.
PN4302
MR MAXWELL: Yes.
JUSTICE BOULTON: Yes, I'll mark it CFMEU10.
EXHIBIT #CFMEU10 CALCULATION OF OVERTIME HOURS AT WHICH ACCIDENT PAY CUTS OUT
PN4304
MR MAXWELL: And just on that point we would say that whilst overtime is worked I would suggest by the majority of employees in the construction industry, the level of overtime will obviously vary between employers and based on the work that they have in hand. I did try and find some figures on the working hours in the construction industry. Unfortunately in that short time I wasn't able to find any to assist the Commission.
PN4305
DEPUTY PRESIDENT KOVACIC: Thank you for your efforts, Mr Maxwell, in following up on those questions.
PN4306
MR MAXWELL: If I can now turn to the submissions of the employers and start by addressing - - -
PN4307
JUSTICE BOULTON: Does that calculation differ from State to State, because doesn't it partly depend on the definition in the workers compensation schemes as to - - -
PN4308
MR MAXWELL: It does, and it depends whether the definition of average weekly earnings includes overtime and shift work. My understanding is that in New South Wales and Victoria the average weekly earnings, the definition does include overtime. I would have to check on the other States. I can't give an answer to that on my feet.
PN4309
JUSTICE BOULTON: So it's really only something that applies in New South Wales and Victoria, isn't it?
PN4310
MR MAXWELL: Well, as our - - -
PN4311
JUSTICE BOULTON: Because you're assuming that in the other States and jurisdictions there's no use for the accident pay provision?
PN4312
MR MAXWELL: Under the current arrangements my understanding is that in ACT, the Northern Territory, South Australia and Western Australia it would have no impact where accident pay is provided for 26 weeks. After the 26 weeks, because there are then further step‑downs in some of those States, for those claims, other claims and in terms of the Mobile Crane Hire Award in our situation it would have some impact. But it was different in - I think when we lodged the application it was different in South Australia but since the introduction of the Return to Work Bill in South Australia and the passage of that Bill, that situation has changed.
PN4313
But what it does demonstrate is that workers compensation is a moving feast and, I think as one of the other advocates suggested, that you know it depends on the political persuasions of the government at the time about whether the - when the step‑downs occur. They tend to - or the amount payable of those step‑downs tends to increase when there's Labour Governments in power and they tend to decrease when Conservative Governments are in power. But there's clearly no hard and fast rule on that but what it does show is that they do fluctuate over time. If I can now turn to the submissions of the employers and start by addressing the submissions regarding jurisdiction. The CCI of WA - now I note that as far as I'm aware they have not appeared in these proceedings. I'm not sure whether Mr Ward appears on their behalf or not?
PN4314
MR WARD: No, no. No.
PN4315
MR MAXWELL: But we do note that they have filed a submission and that it is on the Commission's website, and therefore may be a matter that the Commission takes in to account. To the extent that we do, on the issue of jurisdiction we say the following. The CCI of WA raises a jurisdictional issue in that they say that the union application offends section 27(2)(b) of the Fair Work Act. They do so on the basis that in their view the inclusion of accident pay in the modern awards would negate the intended purpose behind the step‑down provisions, and they also circumvent the existing monetary caps on workers compensation payments, although that point is not explained.
PN4316
They say that accident pay would operate contrary to the intent of workers compensation legislation, defeating the intention of section 27 of the Fair Work Act to allow the States and Territories to legislate on workers compensation. We submit that accident pay does not offend section 27 of the Fair Work Act as it supplements the entitlements of workers under their relevant workers compensation legislation. Now the effect of section 27 was dealt with by a Full Bench in the 2012 award review. The relevant decision is Master Builders Australia Limited (2012) FWAFB 10080. Your Honours, I do have copies of that for the Commission.
PN4317
Your Honours, I don't spend a lot of time on this decision but I do want to say that the Full Bench findings on the issue of section 27 can be found in paragraphs 51 to 56 of that decision. Paragraph 51 starts on page 11 and the particular relevance for these proceedings are paragraphs 54 to 56. In paragraph 54 the Full Bench found:
PN4318
The effect of these provisions is that in the event of inconsistency between a term of a modern award dealing with OHS and State and Territory OHS legislation the latter prevails. To the extent that a provision in a modern award purports to reduce an entitlement under the relevant State and Territory legislation, the provision is of no legal effect. As the Government noted, this is consistent with paragraph 149 of the Explanatory Memorandum -
PN4319
And 149 stated:
PN4320
However, subclause 29(2) provides that a modern award or enterprise agreement is subject to any of the State or Territory laws that are saved by clause 27, as well as any State or Territory laws prescribed by the regulations. This means that a modern award or enterprise agreement cannot diminish, but may supplement rights and obligations under these laws.
PN4321
I won't read out paragraph 55 but it is of relevance, and then in 56 they state:
PN4322
It is clear that Division 2 of Part 1-3 of the Act does not deal with the lawfulness of the content in modern awards or any other instruments made under the Act. Its purpose is to provide interaction rules to operate in conjunction with sections 109 and 122 of The Constitution, with section 26 providing an express statement of an intention to cover a field and section 27 setting out the exceptions to that exclusivity set out in section 26. Sections 26 to 30 are not directed to nor have the effect of enlarging or confining the matters which may lawfully be contained in a modern award. They are concerned with resolving issues relating to inconsistency of laws under section 109 of The Constitution and have nothing to do with the lawfulness or otherwise of what may be contained in a modern award.
PN4323
We submit that on the authority of that decision the CCI of WA argument in regard to jurisdiction should be dismissed. The next issue I wish to briefly deal with is AiG argument regarding estoppel. The AiG in section 2 of their written submissions submit that our application should not be entertained by the Commission as it is an abuse of process and an attempt to re-litigate a claim dealt with in earlier proceedings, which offends the principles of estoppel. The AiG do not however say that the Commission is jurisdictionally barred from dealing with the unions' accident pay claims, and that's in paragraph 24 of their submission.
PN4324
In response we say that the CFMEU's application is not an abuse of proceedings and the principles of estoppel do not apply in this instance. The CFMEU made its application to vary the three awards on 29 September 2014. At the conference before Boulton J on 15 October 2014 the union's award-specific application was discussed. The transcript from that conference is on the Commission website. Rather than take the Commission through the transcript and read out the relevant paragraphs from the transcript, for the sake of brevity I will just identify them.
PN4325
The relevant paragraph from that transcript are PN346, PN348, PN356, PN357 and - sorry, PN423 and PN424. Now we say it is clear from this transcript that the parties and the Commission were well aware of the award‑specific applications before the hearing of the sunsetting issue on 29th to 31st October, and that the award‑specific applications would be dealt with separately after the October 2014 hearings. The applications do not fall foul of the so-called Anshun principles. In the Anshun case, that's the Port of Melbourne Authority v Anshun [1981] HCA 45, a copy of which is part of the AiG's bundle of authorities lodged on 30 March 2015 at tab 5, in that case the original application had been heard and determined before the second application was made.
PN4326
As noted in paragraph 5 of that decision, the initial action was heard by a Judge and jury and the jury found a verdict for Soterales, that's S-o-t-e-r-a-l-e-s, in the amount of $44,629.81. Subsequent to that decision, on 21 August 1977 the authority commenced an action in the Supreme Court against Anshun claiming $53,632.89 by way of indemnity of the amount paid by it to Soterales and for legal costs and disbursements. Now in the second case - and that's referred to in paragraph 9 of that decision - the primary Judge held that it was not a case of res judicata, that the authority's claim had not ceased to exist by reason of a judgment in the Soterales action.
PN4327
He also found that it was not a case of issue estoppel. However he held that the principles of Henderson v Henderson applied and granted a perpetual stay on the ground that the claim was a matter which would have been raised in earlier litigation. The Full Court on appeal agreed that although it was not a case of issue estoppel it was a case in which the Henderson v Henderson principle applied. In the High Court decision however, Brennan J qualified the extent to which the decision in Henderson v Henderson is authority to bar an action where the rules of res judicata has no operation. In paragraph 24 he stated:
PN4328
Whatever effect be attributed to Henderson v Henderson in estopping a party from litigating a particular issue, I do not think that Henderson v Henderson has hitherto been understood in this Court as applying to shut out a party from litigating a cause of action which has not merged in a judgment.
PN4329
Now in the current proceedings it is the same Full Bench dealing with the award‑specific applications that dealt with the common issue of the sunsetting transitional provisions. The award‑specific matters have been referred to this Full Bench by the President. It is this Full Bench who has decided how the matters are to proceed and who decided that there was insufficient time to deal with the CFMEU C & G award‑specific applications before the end of 2014, and that they would deal with the sunsetting provisions first and the CFMEU mining and energy division application in regards to the Black Coal Mining Industry Award. The decision of this Full Bench of 31 October 2014, (2014) FWCFB 7767, noted in paragraph 4 that:
PN4330
Given the operative periods for the transitional provisions in modern awards, we consider that it is appropriate for the Full Bench to announce our decision, at least in relation to some of the matters before us, as early as possible.
PN4331
They decided in paragraph 5 not to grant the ACTU application, to delete sunset provisions in the transitional accident pay and district allowance provisions in modern awards. In 11 February 2015 decision, that is [2015] FWCFB 7767 - sorry, no, that is incorrect. Your Honour, I will find the reference but I think, you know, it is this decision I am referring to.
PN4332
DEPUTY PRESIDENT KOVACIC: I think we can find it.
PN4333
MR MAXWELL: The Full Bench gave reasons for rejecting the ACTU s application to remove the sunsetting provisions. Importantly, for the current proceedings, the Full Bench stated in paragraph 29:
PN4334
Whilst we do not rule out the possibility that accident pay provisions may be necessary and appropriate in some modern awards in order to provide a fair and relevant minimum safety net of terms and conditions, we do not consider that the current transitional accident pay provisions can continue to be included in awards consistent with a minimal modern awards objective.
PN4335
This is because, as submitted by the employer groups, that transitional provisions are complex and both difficult to understand and apply. The application of the provisions is to be ascertained having regard to the relevant terms, including former awards and instruments, mostly, if not all, of which are no longer in operation.
PN4336
We agree with the submission of the ACCI that, as a general principle, it is undesirable to express terms and conditions in modern awards by reference to external instruments and documents.
PN4337
The Full Bench went on to say in regard to arguments in relation to section 154, and this is in paragraph 38:
PN4338
These are matters which will need to be considered by the parties in the context of the further proceedings before the Full Bench regarding the applications for the inclusion of accident pay provisions in modern awards.
PN4339
The above extract shows that the Full Bench did not consider their decision of 31 October 2014 as bringing the award-specific applications to an end. The 11 February 2015 decision recognised that accident pay provisions may be necessary and appropriate in some modern awards. There is nothing in the CFMEU CNG s application which seeks to overturn the Full Bench decision.
PN4340
On this basis, the grounds on which the AiG seek to stop these proceedings are unfounded, and the AiG application in regard to estoppel shall be dismissed.
PN4341
If I can now turn to the employer arguments against the CFMEU application. A number of different employer organisations in the Federal and New South Wales governments have made submissions in response to our application.
PN4342
A number of them traverse the same issues, so in replying we intend going to each of the submissions in turn, but we do not intend repeating our response where the subject matter is the same. Accordingly, we ask the Full Bench to take into account our submission on the specific issues as being relevant, the same issue when raised by a different employer party.
PN4343
The Australian Government made a very brief submission - I think it s two or three pages - and we submit that the evidence of Dr Purse addresses the issues raised by the Australian Government. That evidence of Dr Purse can be found in PN530 of transcript and in PN531, and in 531 they deal with the Productivity Commission report and the Institute of Actuaries submissions. He also deals with it in PN532.
PN4344
I understand that the ACTU will deal with this submission later and we will align their submission to the extent that it adds to our submission.
PN4345
In regard to the CCI of WA submission, they have made a written submission but not appeared. In regard to the issue of lack of evidence, we reject the CCI of WA s assertion that we failed to provide probative evidence to support our applications.
PN4346
Probative or supporting evidence is not limited to witness statements. It includes all of the evidence in support of the application that we have provided. It includes the witness statements, the award histories, the award modernisation proceedings, relevant Commission decisions, relevant workers compensation statistics and other material presented by the union.
PN4347
In regard to the CCI of WA s criticism of the evidence of Ms Hayward, we submit that this is wrong and demonstrates a lack of understanding of the New South Wales legislation. The examples given are for situations where the carpenter is assessed as being suitable to perform delivery work, but does not actually perform the work because the employer has no work for delivery drivers.
PN4348
The CCI of WA s interpretation of the CFMEU s position regarding people on light duties return to work, as set out in paragraph 24 of their submission, is clearly incorrect and fails to recognise the situation under the New South Wales legislation.
PN4349
In terms of their submissions on the modern award s objection, we have addressed the modern award s objective in our written submissions, and we rely on those submissions in response to the CCI of WA s submissions.
PN4350
If I can next turn to the HIA submission, the HIA run a similar argument to CCI of WA, in claiming that workers compensation is a state matter and should be left to the states. We reject this argument and submit that accident pay is part of the modern award safety net which is supplementary to the workers compensation scheme, where necessary.
PN4351
We rely on the decision in Master Builders Australia Limited, already referred to in support of this position. The HIA say that our claim that the payment of accident pay would act as an incentive for employers to provide safe workplaces is absurd. We reject this criticism. It is not supported by the employer s evidence.
PN4352
Your Honours and Commissioner, the Hanks review of the Victorian scheme in 2008 was referred to in the witness statement of Tracey Brown, that is exhibit AIG1, and is contained in AiG s list of authorities, which is No.14 of their authorities.
PN4353
I would just like to briefly refer to section 5 of that report which deals with better income replacement. Section 5 of that report, which starts on page 185, deals with better income replacement. If I can take the Bench to paragraphs 520 to 5.25. In that report, in discussing the weekly benefit payments, the Hanks report stated at 520:
PN4354
It should also be noted that many workers may be entitled to accident make-up pay with set period of time under industrial instruments and agreements.
PN4355
In 521:
PN4356
Accident make-up pay may entitle a worker to any or all of the following for a specified period of incapacity caused by work-related injury.
PN4357
They then set out three dot points. Then in 5.22:
PN4358
Research commissioned by the review suggests that roughly half of the Victorian workforce is covered by some form of accident make-up pay arrangement. The research indicates that approximately 60 per cent of Victorians rely on awards to set their employment conditions. A survey of 48 awards that applied to Victorian workers across various industries revealed that 47 awards contained accident make-up pay provisions, while the type and duration of the entitlements differed.
PN4359
In addition, almost 300,000 Victorian workers are covered by collective agreements that include accident make-up pay provisions.
PN4360
Then in 5.23:
PN4361
The obligations to make up a worker s pay usually applies for a limited period. Research commissioned by the review suggests that most awards allow make-up pay for a period of 39 weeks, although some allow up to 52 weeks.
PN4362
In 5.24:
PN4363
Accident make-up pay can produce incentives for workers to return to work. However, because make-up pay is paid for directly by employers, it may strengthen employers incentives to prevent illness/injury and facilitate return to work.
PN4364
In 5.25:
PN4365
The extent and level of make-up pay provided in a labour market is also relevant when considering any increase in weekly benefit rates, because increases in benefit rates will shift to the scheme in compensation that is currently borne directly by employers.
PN4366
Just for completeness, I would refer you to paragraph 5.77, which is found on page 197 of the Hanks reports dated - and this was - sorry, this paragraph 5.77 on page 197. Just putting it in this context, that the Hanks report recommended that the step down after 13 weeks be increased from 75 per cent to 80 per cent, which is the current arrangement in Victoria.
PN4367
In 5.77, the Hanks report states:
PN4368
My proposal will lead to an increase in income for injured workers who are not eligible for make-up pay. For workers who are eligible for make-up pay, my proposal will lead to an increase in income after 39 weeks when make-up pay ceases under the majority of awards. For those workers, in the period on weekly payments between week 14 and week 39, my proposal will reduce the make-up pay payable by employers. That is, where make-up pay applies, my proposal will mean that the scheme will bear costs currently borne by employers.
PN4369
The whole point of going to this report is that there has been this assumption that when the various jurisdictions have looked at workers compensation and the level of payments, they have not taken into account accident pay.
PN4370
Clearly, the Victorian scheme, when it was reviewed by Hanks in 2008, did take into account the existence of accident make-up pay, and I think if we look at most of the reports that have been conducted by them since then in terms of the Comcare scheme, the report by Hanks, and I think there s a further document that is referred to by Hanks, that Hanks was well aware of the existence of accident make-up pay in any of the recommendations he made.
PN4371
JUSTICE BOULTON: Where did he get the figure of 39 weeks from?
PN4372
MR MAXWELL: I understand that he got that from the range of accident pay provisions in the awards. Sorry, your Honour, I have just lost my document. Your Honours and Commissioner, in 5.23 - paragraph 5.23 of the Hanks report on page 190, he says that:
PN4373
Research commissioned by the review suggests that most awards allow make-up pay for a period of 39 weeks, although some allow up to 52 weeks.
PN4374
JUSTICE BOULTON: I see, so it was research that he commissioned?
PN4375
MR MAXWELL: That is correct.
PN4376
JUSTICE BOULTON: Yes. Of course, from what is before us, it would appear that 26 weeks is a more common provision.
PN4377
MR MAXWELL: Your Honour, that is my understanding in - especially in regards to construction awards, it is in - sorry, in the National Building and Construction Award, it s always been 26 weeks, and the Joinery Award is 26 weeks, but Mobile Crane Award is 52 weeks. I do understand, I think, in the metal industry and manufacturing industry there were a number of awards that had 39 weeks, but there is clearly variance.
PN4378
JUSTICE BOULTON: Thank you.
PN4379
MR MAXWELL: In regard to the history of accident pay, in the critical mass argument, the HIA appears to argue that because accident pay did not exist in some NAPSAs, and that our application would extend the operation of accident pay when compared to pre-modern awards, the application should be rejected.
PN4380
We have already stated during the proceedings that we recognise that not all workers covered by pre-reform awards had the benefit of accident pay. We have also said that the overwhelming majority did, due to the predominant coverage of the federal awards, which are also a common rule in Victoria, and the provision of accident pay in New South Wales and Western Australian NAPSAs. It is on this basis that we say accident pay should be included in the modern awards.
PN4381
In regard to the HIA arguments in regard to the modern awards objective, we reiterate that the continuation of accident pay is part of the modern award safety net, was clearly recognised by the Award Modernisation Full Bench as being necessary to meet the modern awards objective. The continuation, albeit on a transitional basis, support this position.
PN4382
In regard to the relevant living standards and the needs of the lower paid, this is addressed in our written submission. Accident pay is necessary to the extent that any worker would receive less than the award minimum wage, in circumstances outlined in the witness evidence of Neil Browne and Sherri Hayward.
PN4383
The HIA is wrong in its assertion that the weekly amounts are zero in New South Wales if two or more hours of overtime are worked. This only applies in the first 13 weeks. This matter is addressed in the witness statement of Sherri Hayward, and we have addressed this in the issue of the document we presented today. But we would point out that in regard to New South Wales is the issue of the work capacity test and suitable employment where a worker will require substantially more than 6.33 hours to make up the difference in those situations.
PN4384
In regard to the need to encourage collective bargaining, the HIA are wrong in their assertion that other construction-based agreements do not address accident pay at all. Most agreements do so by the incorporation of the term of the award. The witness statement of Neil Browne attested to this in paragraph 4 of CFMEU3.
PN4385
From the written submission, it would appear that the HIA may not have had much experience in dealing with enterprise agreements, particularly in the commercial sector of the construction industry, otherwise they would not make the claim that they do in paragraph 5.1.37.
PN4386
The fact is that the Queensland agreement that they refer to, the Aspect Queensland Pty Ltd and CFMEU Union Collective Agreement 2011 to 2015 does, in fact, contain an accident pay provision.
PN4387
Your Honours, I just seek to hand up an extract of the decision approving that agreement which contains the relevant clauses that I wish to take you to.
PN4388
JUSTICE BOULTON: This is just, as it were, extracts from - - -
MR MAXWELL: It is just the decision certifying the agreement and extracts from the agreement.
EXHIBIT #CFMEU12 EXTRACTS FROM ASPECT QUEENSLAND PTY LTD AND CFMEU UNION COLLECTIVE AGREEMENT 2011 TO 2015.
PN4390
The only clauses I wish to take you to are Clause 5. Clause 5 deals with relationship to awards, agreements and other documents.
PN4391
This agreement is intended to be interpreted in conjunction with the Building and Construction and General On-Site Award, and the terms of the following former awards and orders as they were immediately prior to their recession.
PN4392
You will see that one of them is the National Building and Construction Industry Award 2000, which award clearly included accident pay as part of that award and which I have referred to in our written submission.
The other clause I wish to take you to is Clause 23 of that agreement, which deals with income protection and portable unused sick leave. In 23.1, there is a requirement for the company to contribute amounts into the CIPQ Scheme. Your Honours, the CIPQ Scheme is the income protection scheme that applies in Queensland, and I do have an extract from their website which explains how the scheme operates in regard to workers compensation.
EXHIBIT #CFMEU13 EXTRACT EXPLAINING THE OPERATION OF THE CIPQ SCHEME.
PN4394
MR MAXWELL: I have included there page 11 from that document where they deal with WorkCover top-up and workers compensation top-up. That shows that the insurance provides to the worker for workplace accidents, which are accepted by an Australian jurisdiction statutory workers compensation scheme. That may address the wording that Mr Ferguson seems to have problems with in the draft orders which it goes on:
PN4395
Occurs during the period of insurance and occurs during working hours. Gives rise to an entitlement to get compensation under any statutory workers compensation scheme, unless a waiting period of 26 weeks must be exhausted.
PN4396
Clearly, the 26 weeks is the accident pay under the award, and then after the accident pay under the award, the income protection insurance provided for under the CIPQ Scheme comes into operation. That is the way the parties in Queensland have dealt with the issue of accident pay in the construction industry in a commercial sector and in the agreements to which we are a party.
PN4397
JUSTICE BOULTON: Are you saying that the accident pay is provided, but it is through the Income Protection Clause?
PN4398
MR MAXWELL: The accident pay is applied by, first of all, the incorporation of the award terms that are identified from the awards, that are identified.
PN4399
JUSTICE BOULTON: Clause 5 doesn t incorporate them. It simply says, It is intended to be interpreted.
PN4400
MR MAXWELL: It says:
PN4401
To be interpreted in conjunction with the Building and Construction General On-Site Award and the terms of the following former awards.
PN4402
Then it goes on after listing the awards:
PN4403
Where this agreement is silent, the terms of the above document is amended from time to time during their life apply.
PN4404
Then goes on:
PN4405
Where there is a conflict between the term of this agreement and the term of any award or a conflict between two terms of this agreement, the higher wage outcome or other outcome more favourable to the employee will apply.
PN4406
JUSTICE BOULTON: But it says, During their life will apply . Presumably, those awards have no longer got a life, have they?
PN4407
MR MAXWELL: Your Honour, I don t want to get into an argument on statutory interpretation of agreements, having just dealt with a Full Bench matter dealing with Lend Lease last week, however, that refers to the awards as amended from time to time during their life. It is terms of when they amended during their life. Clearly, the National Building and Construction Industry Award 2000 that light ended with the creation of the modern award and the rescission of that award.
PN4408
DEPUTY PRESIDENT KOVACIC: How does the accident pay provision in the National Building and Construction Award 2000 interact with Clause 23 of the agreement?
PN4409
MR MAXWELL: The way it interacts is that the accident pay provision of the award for 26 weeks applies, and that s what the employees receive. Then at the end of the 26-week period, the income protection insurance and accident pay provided by Clause 23 then kicks in.
PN4410
Your Honours, we say significantly, most CFMEU construction and general agreement - enterprise agreements contain income protection or top-up workers compensation provisions that build extra benefits on top of the accident pay provisions that are contained in the awards.
PN4411
In regard to the issue of social inclusion, the HIA refer to the changes in the New South Wales workers compensation legislation in 2012 and the way in which they incentivise workers to return to work. These changes were also championed in the New South Wales Government submission filed on 15 April 2015.
PN4412
The New South Wales Government in their submission referred to the 2014 final report statutory review of the Workers Compensation Legislation Amendment Act 2012 prepared by the Centre for International Economics. I note that they included the electronic link to that document in their submission. I have done copies of that document for the parties, because it is relevant to these proceedings, and these is part of the evidence that the New South Wales Government suggested that the Commission should have.
PN4413
JUSTICE BOULTON: Sorry, what is this?
PN4414
MR MAXWELL: Your Honour, just for completeness, to explain the document, in the New South Wales Government s submission that was dated 15 April 2015, which is on the Commission s website, on page 5 of that submission they refer to the 2014 review of amendments, and they refer to the 2014 final report of the independent statutory review of the Workers Compensation Amendment Act 2012.
PN4415
I won t read out what they say, but they say, The report did not make any recommendations. Sorry, in the second paragraph they say that:
PN4416
The report did not make any recommendations concerning the payment schedule or the step-down regime, and while some regulatory amendments were made following this report, this did not affect the payment schedule. The full report is available at - - -
That is where they included the electronic link. We have gone to that electronic link and read the document, which they have referred the Commission to, and we wish to take you to that briefly, because we say there are important findings with that report which are relevant. I hope to do this as briefly as possible. Your Honours and Commissioner, if I can start on page 11.
EXHIBIT #CFMEU14 2014 FINAL REPORT OF THE INDEPENDENT STATUTORY REVIEW OF THE WORKERS COMPENSATION ACT 2012.
PN4418
Thank you, your Honour. Your Honour, if I can take you, first of all, to page 11. At the bottom of that page, you will see a heading, Achieving balance between the health needs of injured workers and minimising costs. The report states:
PN4419
To a certain extent, the right amount of funding for benefits is an unresolvable question about what is fair and reasonable level of support for injured workers. This should be funded through employer premiums as opposed to other insurance systems in the broader social safety net.
PN4420
They then go on in the next paragraph:
PN4421
However, in some respects it would seem that the new system does not work well for some injured worker. This largely results from gaps in coverage, inconsistencies in the application of the new rules and the creation of unintended barriers to work.
PN4422
On page 13, they deal with the - at the bottom of page 13, they deal with the unintended disincentives to work, and I will just take you through the first three dot points. They say that:
PN4423
Despite the strong intent of the amendments to promote return to work and recovery at work, this may not always be achieved. For instance, workers with serious injuries can be disincentivised by the new benefits regime.
PN4424
The second dot point, Workers with a disability. The third dot point, Injured workers that can t meet the terms of work capacity assessments. On the bottom of page 4, they refer to key areas for future Government consideration, and it states:
PN4425
It is a finding of this review that several things warrant further consideration by Government to enable the amendments to best achieve the intentions of the Act. These issues span across four domains: the level of benefits, eligibility and access to benefits, the handling of disputes and the impact of the legislative framework on workplace culture.
PN4426
If I can turn to page 17, and there is a heading there, Improving fairness and equity whilst maintaining financial stability. The first dot point there is:
PN4427
Providing adequate and reasonable support for badly injured workers.
PN4428
It states:
PN4429
The threshold set in the legislation for defining seriously injured workers is somewhat arbitrary and needs to be considered with reference to the total number of people involved and to specific examples where injured workers would be close to the thresholds and the impact of this restriction on them. It is observed that for injured workers with a WPI
PN4430
WPI is whole personal payment.
PN4431
for 21 to 30 per cent, workers compensation benefits now available in New South Wales are generally less generous than in other jurisdictions.
PN4432
I will leave that there. If I can then take you to page 23 where they discuss the introduction of work capacity assessments, and they explain in the opening paragraph that:
PN4433
The amendments established requirement for injured workers receiving weekly benefits to undertake work capacity assessments at specified points throughout the life of their claim and at least one every two years.
PN4434
If I can then drop down to the last paragraph on that page:
PN4435
The requirement for an injured worker to make reasonable efforts to return to suitable employment was retained in the 2012 amendments. However, suitable employment no longer involves consideration of whether suitable employment exists, is available or is geographically accessible to the worker, and focuses on capacity rather than incapacity. It now requires consideration of an injured worker s abilities, including age, skill and work experience.
PN4436
We say they are the type of situations that the evidence of Ms Hayward goes to. On page 33 of the report where they deal with the policy objectives of the Workers Compensation Act, that they say in the bottom third of the page:
PN4437
It is a finding of this review that some of the principles have not been well served because of the way that the balance between competing objectives has been settled. It is valid and normal to have public policy objectives that are competing and the challenge is to obtain an appropriate balance. In this case of the amendments the balance has been in favour of addressing the deterioration in financial sustainability of the nominal insurer and ensuring the competitiveness of premiums, which in practical terms means that the support available for less seriously injured workers to recover and regain independence is necessarily less.
PN4438
On page 46 of that report they deal with the improved incentives to return to work and many workers who have exited the system, and the report states:
PN4439
The amendments introduced strong financial incentives to encourage less seriously injured workers to recover and return to work. The significant reduction in claims in association with the legislative reforms reflects the fact that there is a higher rate at which claimants are exiting the system. There is a range of reasons why claimants may exit the system including self-selection out of the system, perceptions of no longer being eligible to remain on benefits, retirement or migration. Hence existing the workers compensation system may or may not involve return to work.
PN4440
Now on page 48 of the report they include a graph and the graph is 3.7, "Change in average weekly benefits payable from the WorkCover scheme". Now what that graph demonstrates is it deals with three types of workers. Those that have a permanent injury, those that have a temporary injury of less than six months, and those that have a temporary injury of greater than six months. They then refer to those two groups in regard to the first - the second entitlement period of weeks which is 40 to 130 weeks, and the third entitlement period of weeks.
PN4441
Now what that graph shows is that for those workers that are temporarily off work for a period of less than six months, in the second entitlement period there has been a significant reduction in the weekly benefits payable under the New South Wales scheme. Your Honours and Commissioner, on page 51 the report deals with barriers imposed by location and retraining requirements. I won't read it but I would refer you to the first four paragraphs on that page. Over the page on page 52 they deal with barriers to providing suitable duties, and you will note that in the second-last paragraph - sorry, the last three paragraphs they say:
PN4442
Notwithstanding attempts by employers, in many cases it is almost unrealistic for employers to be able to provide suitable duties. Commonly cited examples are injured workers from the building sector and across manual trades as well as manufacturing.
PN4443
On page 71 the report perhaps makes one of the most telling observations where after looking at the issue of balancing between the health needs of injured workers and minimising costs, at the bottom of the page under the heading, "Time will tell" they say:
PN4444
In many respects it is too early to determine the impact of the amendments on the financial sustainability of workers compensation in New South Wales and the effectiveness of individual amendments on behaviours.
PN4445
Your Honours and Commissioner, on page 93 of that report he refers to supporting less seriously injured workers to recover and regain financial independence and it states:
PN4446
The balance of medical opinion concurs that where absence from work is not medically necessary in the course of management of an injury then it is best for workers to return to work. As well as being consistent with the return to work agenda, the principle of supporting less seriously injured workers to recover and regain financial independence also assists the financial sustainability of the scheme. Hence it is appropriate that employers support injured workers to recover at work through the provision of suitable duties where appropriate and to the greatest extent possible, injured workers should not bear the financial cost of being less able to work at their pre‑injury rate.
PN4447
On page 99 of that report at the bottom they deal with the impost on low income workers including part‑time and casual workers and they say that:
PN4448
In certain circumstances the step‑downs provisions can make injured workers that received low wages prior to the injury worse off.
PN4449
JUSTICE BOULTON: Where is this?
PN4450
MR MAXWELL: Sorry, this is at the bottom of page 99.
PN4451
JUSTICE BOULTON: Yes.
PN4452
MR MAXWELL: And they say:
PN4453
In certain circumstances the step‑downs provisions can make injured workers that received low wages prior to the injury worse off while injured workers on average full‑time wages are made better off. This includes low income, part‑time and casual workers particularly those that incur substantial impairment and have no work capacity who are made worse off under the reforms by receiving only 80 per cent of their wages from week 14 onwards.
PN4454
They then refer to some anecdotes of the impact of the amendments and they are found in box D.3, and box D.4 also deals with the impact of change in payment structures for incapacity workers. Now the final part of this report I wish to take you to is on page 103 and where they deal with section 43 of the Act, and this is in the last two paragraphs on page 103 and it states:
PN4455
Importantly section 43 of the Act states that a work capacity decision is undertaken by the insurer. Decisions made by the insurer are final and not subject to appeal or review, except a review under section 44 or a review by the Supreme Court. The immediate intent of work capacity decisions appears to have been to significantly increase the powers of the insurer to make a relatively final determination on the rate of weekly benefit entitlement and for the insurer to have considerably greater scope to reduce or restrict benefits. In contrast, previously the settlement of ability to earn and eligibility for workers compensation payments was based on a general practitioner's assessment of fitness to work.
PN4456
Your Honours and Commissioner, the above analysis demonstrates that when the 2012 amendments were reviewed by an outside independent body they identified defects in the operation of the Workers Compensation Act and the payment scheme which negatively affected injured workers, particularly in regard to work, capacity assessments, the issue of suitable work and their impact on weekly payments. Whilst these changes may have met the policy objectives of the conservative New South Wales Government and their supporters from the employer organisations, they did not improve the lot of injured workers who were still on workers compensation after 13 weeks. The measures had no effect in regard to social inclusion and workforce participation, and we note that Dr Purse deals with the New South Wales changes in PN554 of transcript. I won't read it out but I would refer the Full Bench to read that relevant paragraph.
PN4457
If I can now turn to the MBA's submission. In paragraph 3.4 the MBA refers to the Full Bench decision in 2015 FWCFB 644, and appear to accept that accident pay provisions may be necessary and appropriate in some modern awards in order to provide a fair and relevant safety net. In 3.10D of their submission they say that the preliminary jurisdictions decision is authority for their claim that at the commencement of the 4 yearly review the Building Awards are taken to have met the modern awards objective without any substantive accident pay clause in them. Mr Ward made the same claim yesterday. We say this is incorrect. Paragraph 24 of that decision states, and I quote, 24:
PN4458
In conducting the review the Commission will have regard to the historical context applicable to each modern award. Awards made as a result of the award modernisation process conducted by the former Australian Industrial Relations Commission (the AIRC) under Part 10A of the Workplace Relations Act 1996 Cth. were deemed to be modern awards for the purposes of the Fair Work Act (see item 4/5 of the Transitional Act). Implicit in this is a legislative acceptance that at the time they were made the modern awards now being reviewed were consistent with the modern awards objective. The consideration specified in the legislative test applied by the AIRC in the Part 10A process is in a number of important respects identical or similar to the modern awards objective in section 134 of the Fair Work Act. In the review the Commission will proceed on the basis that prima facie the modern award being reviewed achieved the modern awards objective at the time it was made.
PN4459
Now at the time the modern Building Awards were made they included accident pay. The MBA appear to want to characterise our application as a re-run of the Part 10A‑Award modernisation process but that is incorrect. The union makes its application as part of the 4 yearly review in accordance with the requirements of that review as outlined in our written submission. The MBA also allege that the CFMEU construction and general claim is somehow based on the existence of a national standard, and that's referred to in section 4 of their submission.
PN4460
That is an incorrect assumption. What we say is that in regard to the standard of accident pay, that is the number of weeks of accident pay, there existed a standard in the predominant federal awards that applied in the majority of States and that this standard should now be agreed to by this Full Bench as the appropriate national standard to apply in the relevant awards. The MBA claim that the penetration of the NBCIA in Queensland was low, but provide no evidence to support this claim apart from referring to a number of awards.
PN4461
They also fail to explain why the Transport, Distribution and Courier Industry Awards are relevant to the Building Awards, and if you refer to the footnote in the MBA's submission that's one of the awards they refer to. In appendix A of the MBA's submission they also refer to a number of New South Wales awards. Now in regard to the Joiners State Award, not only the MBA but also the AiG and ACCI are wrong in claiming that this award did not contain accident pay. It did. Your Honours, I just wish to hand up a copy from the Consolidated Joiners State Award and your Honours and Commissioner, this is clause 40 from the Joiners State Award.
PN4462
JUSTICE BOULTON: Is this a current award or is this - - -
PN4463
MR MAXWELL: This was the award that applied in 2006.
PN4464
JUSTICE BOULTON: Yes.
PN4465
MR MAXWELL: And obviously the employers didn't realise that a term of an award may deal with accident pay in a different manner than calling it accident pay. But in this award it was called injury or disease pay and you'll see there that the - - -
PN4466
MR WARD: Very sneaky.
PN4467
MR MAXWELL: - - - that the clause has a standard of 26 weeks which we refer to that applied in the National Joinery and Building Trades Products - sorry the National Joinery and Building Trades Award as part of the transitional arrangements and in the previous National Joinery and Building Trades Products Award. Now in regard to paragraph 5.3, the MBA suggests that the CFMEU claim does not seek to override all scheme step‑downs. On this matter they are correct. Whilst we do not accept the justification for step‑downs, we recognise that they have been a reality of the workers compensation system for many years.
PN4468
What our claim does seek to achieve is that injured workers in receipt of workers compensation payments receive at least the award rate for the period of accident pay as sought in our application. This is consistent with the union's claim back in the 1970s, as recognised by the Commission in a Full Court decision that we refer to in our submission. In regards to the modern awards objective we rely on our written submissions in response to the HIA. The final point from the MBA written submission that we wish to reply to is the other matters they raise in section 8 of their submission.
PN4469
Our claim for accident pay is not for the payment of shift penalties and overtime but for the ordinary time rates for the normal weekly hours worked prior to the accident. Now they may be confused by the reference in our draft order to the accruals under the shift work clause. That's in regard to the RDO accrual that applies for those employees who work the RDO system, where they normally actually work the 40 hour week but accrue two hours for the RDO. In regard to the submissions made by Mr Calver yesterday, he is incorrect in his assertion that all of the accident pay matters were by consent.
PN4470
The initial Sheehy J matter was arbitrated. The decision of Everett J to create the National Building Trades (Construction) Award in 1975 and the accident pay clause in it was arbitrated. The extension of the award to WA was arbitrated. The award simplification of the National Construction Award was an arbitration where the CCF sought to delete the accident pay provision on the basis it wasn't allowable, and during the award modernisation proceedings the issue of accident pay was again arbitrated by the AIRC Full Bench because again a number of employer parties raised the allowability of accident pay.
PN4471
If I can turn to the AiG submission. In paragraph 35 the AiG claim that the unions claims that attempt to extend accident pay entitlements to persons who are no longer employees are beyond power. We disagree. The CFMEU mining and energy submissions, which is CFMEU5, responds to this issue and we adopt and support those submissions in that written submission. In paragraph 36 the AiG notes that there are differences between the union claims. That is correct. Rather than seek one national standard, the unions are seeking different national standards that are award‑specific.
PN4472
In paragraph 44 the AiG make the extraordinary claim that there is no evidence before the Commission that the system of work, health and safety legislation and workers compensation legislation is failing to provide employees with a safe work environment and support if they are injured. The workers compensation statistics and the number and rate of serious injuries that we provided to the Commission show that this claim is incorrect. The review of the New South Wales 2012 amendments also show the claim to be incorrect.
PN4473
The AiG argue that accident pay provisions will undermine the policy objectives of workers compensation schemes and give some incentive for employees not to return to work. They rely on the evidence of Tracey Browne. Her evidence is that the majority of employees are trying to get back to work and that it's a large majority but not measurable. In response to a question from Boulton J she said that it was her experience that accident pay distorts the incentive to return to work, but conceded from a question from the CFMEU that there would be no incentive where the employee could not return to work because of their injury.
PN4474
It is perhaps timely that the union now dispel the undercurrent of the employers' submissions that suggests that the unions want accident pay so that workers can stay away from work longer than necessary. This is not the case and the union evidence such as the witness statements of Neil Browne and Sherri Hayward demonstrate that workers want to work and get back to work as soon as possible. The unions support them in this regard, but if they are prevented from working because of their medical condition then we say that they should at least receive the award rate for the period of accident pay.
PN4475
The level of accident pay required will be dependent on how much work an employee can perform under any rehabilitation stage - sorry, I withdraw that. The level of accident pay required will be dependent on how much work an employee can perform under any rehabilitation or staged return to work program, but only where the employee actually perform the work and receives payment, not in the ludicrous and unfair system we have in New South Wales where some insurer can decide that a worker is suitable to perform some job unrelated to their occupation, a job that their employer cannot provide, and then reduce the workers compensation for that imaginary work. It is this type of injustice and unfairness that accident pay will address.
PN4476
The AiG's submission in regard to the Part 10A-Award modernisation process seeks to re-interpret the decisions of the Commission. We submit that paragraph 87 of (2008) AIRCFB 1000 is clear. They preserved accident pay provisions and anticipated that prior to 31 December 2014 an opportunity would arise to consider the formulation of a national standard to apply to all award-covered employees. The words, and I quote:
PN4477
consider the formulation of a national standard to apply to all award-covered employees
PN4478
Can only be interpreted as meaning that the AIRC Full Bench expected that prior to 31 December 2014 the Commission would look at what a national standard to apply to all award‑covered employees should look like. If they were merely to consider whether an award should include accident pay or not they would have said so and not made any reference to the formulation of a national standard. In regard to the AiG's submission on the statutory framework particularly section 154 and section 139, we rely on our written submissions and those of the CFMEU mining and energy division in CFMEU5. We would add however that in regard to the AiG argument, they ignore the explanatory memorandum which stated in paragraph - that's the explanatory memorandum to the Fair Work Bill 2008 - in paragraph 597:
PN4479
It is not intended that clause 154 would prohibit modern awards including terms that have different practical operation in different States and Territories provided they are capable of applying in each State or Territory.
PN4480
The term that the union seeks, for example in the Construction Award, is one standard of accident pay that provides by way of an allowance a minimum safety net to the award rate of pay for 26 weeks to apply in every State and Territory when a worker is off work on a compensatable work-related injury. The reference to the relevant workers compensation legislation is included as part of the incidental terms that are essential for the purpose of making the term operate in a practical way. These terms may be included in awards pursuant to section 142 of the Fair Work Act.
PN4481
These incidental terms are necessary to prevent a double-dip where the employee is in receipt of workers compensation payments. These incidental terms are necessary to give recognition that there will be some employers covered by the national scheme, that is Comcare, and other employers covered by a variety of schemes depending on a combination of where the employee was engaged and where the employee is actually working.
PN4482
As we raised with Mr Shaw during cross‑examination, an employer could have to comply with more than one workers compensation scheme in regard to their employees. The issue of cross-border provisions was dealt with - and I can refer you to the transcript. That's in PN1331 down to PN1334. There are various examples in the awards where a reference is made to State and Territory legislation. For example in clause 15(f) of the Building and Construction General On‑site Award - sorry, 15.1(f) I should say, where there's reference to:
PN4483
A contract of training means an approved agreement for training, registered with the appropriate State or Territory training authority
PN4484
Or rather:
PN4485
the provisions of the appropriate State or Territory training legislation.
PN4486
In clause 21.10 which deals with the First Aid allowance, the qualification is under (vi) that they're paid the - that the allowance for the skills obtained and the time spent acquiring the relevant qualifications, and it refers to:
PN4487
an employee who holds the minimum qualification recognised under the relevant State or Territory occupational health and safety legislation.
PN4488
There are also references in clause 21.12(b) of that award and clause 25.2 and in schedule C in the definitions in C.2 which deal with the definition of a traineeship, and in schedule D, clause D.2 which deal with school-based apprentices. Now just for - we should point out that we note that in the apprentices' case the AiG were adamant that the travel payments - and this is the apprentices' case in the 2012 award review. The AiG were adamant that the travel payments paid to apprentices on block release had to be discounted for any payments received under any government scheme, which were all State schemes.
PN4489
This is provided for in clause 15.8 of the Building and Construction Award. The AiG did not see those types of payments being foul of section 154. We submit that AiG's submission on section 154 should be rejected. In regards to section 138 the AiG claim that every element of a term must be assessed as to whether or not it complies with section 138. This is a nonsense argument. They provide no authorities to support their assertion. There is no reference in section 138 to each element of a term. The AiG are seeking to read into the legislation words that are not there.
PN4490
On the authority of the Full Federal Court in the Maritime Union of Australia v Fair Work Commission [2015] FCAFC 56 the Full Bench in that case recognised a long line of authority which cautions against reading words into a statute, and that's found in paragraph 24. We say that the AiG claim in regard to section 138 should be regarded. In part 12 of the AiG's submission they mount an argument that the accident pay provisions sought would offend section 139. They seek to over-complicate the calculation of accident pay. There is no need to navigate through the workers compensation system.
PN4491
All the employer needs to know is, is the worker off injured, is the employee receiving workers compensation payments, how much those payments are per week, and if they are less than the award rate then they have to make up the difference for the duration of the accident pay clause. This is no more difficult than what employers have to do to work out the travel costs of apprentices who attend block release training as provided in clause 15.8 of the Building and Construction General On-site Award 2010, a matter that the employers in the apprentices' case, especially the AiG, were very vocal about.
PN4492
In regard to the - I was going to briefly deal with AIG3 in regard to the weight of evidence, but I think the Bench is well aware of that issue and I don't think it is worth traversing at this stage; other than to say that we say that the evidence of the three CFMEU witnesses is relevant to these proceedings and should be given particular weight. The final point we'd make in regard to the AiG is that it may be more relevant to note that the AiG was a respondent to the majority of federal awards that contained accident pay. Indeed the question should be asked which of the AiG members was not covered by an accident pay provision. If I can turn to the ACCI submission. In paragraph 3.7 the ACCI - - -
PN4493
MR WARD: I object to this. I've sat quietly but I'll make the objection. If he wants to reply to what I said orally, he's entitled to. But if he's going to go to the material that was put on in writing and has been on for months, his time to do that was when he first got to his feet several days ago. The Bench are giving him a level of latitude the Act, as a matter of fairness, shouldn't allow. He's being allowed to run his case in reply rather than run it in chief when he should. So I say if he wants to reply to what I said orally that's fine. But he shouldn't be allowed now to run his case against our written submissions which he has had for months, in reply, because it's unfair because I can't say anything and it's a tactic he's using, and it's a tactic of unfairness and the Bench shouldn't allow it.
PN4494
MR MAXWELL: Your Honour, you'll recall - - -
PN4495
JUSTICE BOULTON: It's a reasonable point.
PN4496
MR MAXWELL: Well, your Honour, you'll - - -
PN4497
JUSTICE BOULTON: That's the purpose of putting in the written submissions.
PN4498
MR MAXWELL: Yes, but you'll recall that when I gave our submission on 20 May we did say that we wished to reply to the written submissions of the employers - - -
PN4499
MR WARD: You can't do that.
PN4500
MR MAXWELL: - - - but we wished to do so once they have actually spoken to those submissions.
PN4501
MR WARD: You can talk about what I said orally. This is just a tactic and it's abhorrent and it shouldn't be allowed. It's a fundamental breach of 577 if he's allowed to do it.
PN4502
MR MAXWELL: Your Honours and Commissioner I don't agree with the submissions of Mr Ward. We believe it's appropriate in these proceedings that we gave the employers a chance to speak to our full submissions, which they have done, and then we reply to them.
PN4503
JUSTICE BOULTON: Yes. Well, Mr Maxwell, you've already taken up half the time for the union responses. We are limited in the amount of time that we can spend this afternoon.
PN4504
MR MAXWELL: Your Honour, I can respond to the ACCI's submission by way of addressing the points that are raised in Mr Ward's oral submission.
PN4505
JUSTICE BOULTON: Good.
PN4506
MR MAXWELL: Mr Ward, in his submission, said there are three matters that the Commission should address. One was the issue of probative evidence. We say the CFMEU C and G has already discussed this in response to the CCI WA's submission. In regard to the unification not being necessary, we address this in our written submission. In regard to appendix section 138, again we've dealt with this in our written submission and in response to the AIG.
PN4507
You will recall, as I referred to previously, that Mr Ward referred to he referred that awards at the commencement of the review were to be taken to meet the modern awards objective. I have already dealt with that in regard to the response to the MBA's submission and referred to paragraph 24 of the relevant decision.
PN4508
Mr Ward referred to the Shaw report as part of his evidence. We say in response to the Shaw report and evidence, that we accept there are health benefits in work, especially the mental health benefits in being seen as a productive member of society and the social benefits of work. These factors were borne out by the evidence of Neil Browne and Sherri Hayward.
PN4509
The reports referred to in the Shaw report on the health benefits of work were not limited to considering return‑to‑work arrangements under workers compensation schemes, if at all. They were concerned with the bad health effects of not working. Mr Ward referred to the AFOEM report and that was dealt with at PN1358 of the transcript. A question was asked of Mr Shaw:
PN4510
Is it not the case that the AFOEM report identified unemployment as a factor that has significant negative impact on the physical and mental health?
PN4511
He answered:
PN4512
I think the term used mostly is "worklessness", of which obviously unemployment is a part.
PN4513
Significantly, Mr Shaw could not connect the issues of worklessness with the construction industry. Again, we make the point that we accept that if the employer has suitable work and the employee is medically fit to perform that work, then it would be in the interests of all parties for the employee to do that work.
PN4514
Indeed, in those situations the employer liability to accident pay would be significantly reduced. Your Honour, in regard to the issue, we say the evidence shows that this does not address the situation where an employee cannot work because of their injury and refer to PN549 of the transcript where Dr Purse deals with that.
PN4515
Mr Ward made a number of references to the Shaw report and there is another point we would like to make in regard to the evidence of Mr Shaw. Mr Ward sought to stress that Mr Shaw was an expert witness and we say the best that can be said of Mr Shaw is that he is an expert on the works of the compensation scheme in South Australia. From Mr Shaw's own evidence, we can see that his expertise was limited to South Australia and that can be found in PN - - -
PN4516
MR WARD: Why wasn't this put when he was on his feet two days ago? Why not? There's no reason why he couldn't have put this two days ago. Why wasn't it put? You're allowing him to run his case in‑chief in reply, your Honour. You are. He shouldn't be allowed to do it. He's not responding to anything I said orally today.
PN4517
JUSTICE BOULTON: You can proceed, Mr Maxwell.
PN4518
MR MAXWELL: Thank you, your Honour.
PN4519
JUSTICE BOULTON: I'm mindful of the time restraints.
PN4520
MR MAXWELL: I'm very mindful of the time. Mr Ward also referred to step‑downs. The issue of step‑downs was dealt with in the cross‑examination of Mr Shaw. I just refer you to the transcript in PN1362, 1364, 1366, 1368. Your Honours, in our written submission we dealt with the nature of the four‑year review and what was required. Through our submissions and evidence, we have met those obligations. We have pointed to the unsatisfactory statistics of the construction industry and, to repeat, there were 12,310 serious claims in the construction industry in the 2012‑13 financial year. It is placed at number 3 out of all industries.
PN4521
Over a five‑year period, the construction industry accounted for 11 per cent of all serious workers compensation claims. In 2011‑12, 30 per cent of serious claims in the construction industry had compensation paid for 12 or more weeks off work. Accident pay is necessary so that majority of injured workers, particularly those with serious injuries and who are off work for more than 13 weeks, at least receive the minimum award rate for 26 weeks.
PN4522
This was the basis of the decision in 1971 that introduced accident pay into the building and construction industry and, as Tom McDonald said, was a way of creating a more civilised building industry for injured workers and their families. Accident pay has a arbitral history of over 30 years in the building and construction industry. Whilst there have been constant changes to workers compensation in various jurisdictions, accident pay has been constant in this industry and should remain a part of the safety net.
PN4523
Evidence has been provided and persuasive reasons advanced in support of the application. 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.
PN4524
Without the accident pay provisions proposed by the CFMEU Construction and General Division, the awards would 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 significantly 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.
PN4525
JUSTICE BOULTON: Where does that leave ACTU3?
PN4526
MR MAXWELL: Your Honours, if you look at the provisions of ACTU3, they are not inconsistent with what we seek in regard to the National Joinery Award and the Building and Construction Industry Award. There is clearly a difference in regard to the Mobile Crane Hiring Award because that award includes a number of the exclusions that Mr Ferguson referred to in his comments in regard to ACTU3.
PN4527
Our position is that ACTU3 is another way of expressing what the unions seek in our application. Obviously our application and the submissions are in support of the union's draft orders as submitted, but should the Commission be mindful to grant accident pay, then the clause proposed by the ACTU, ACTU3, would meet the matters that we seek to address through the draft order that we have submitted; except for the Mobile Crane Hiring Award, which I said includes a number of the exclusions that Mr Ferguson referred to.
PN4528
JUSTICE BOULTON: Yes. Thank you.
PN4529
MR MAXWELL: Your Honours and Commissioner, unless there are any questions, they're the submissions of the CFMEU Construction and General Division.
PN4530
JUSTICE BOULTON: Mr Crawford?
PN4531
MR CRAWFORD: Thank you, your Honour. The AWU also received questions from the Deputy President about a number of employees covered by various pre‑modern awards. We also seek to rely upon the ABS data that the CFMEU has handed up. That's CFMEU7. Aside from that, I'll just briefly respond to some of Mr Ward's abuse about the AWU material and submissions. In terms of evidence, we reiterate our previous point that - - -
PN4532
JUSTICE BOULTON: I don't think it was confined to Mr Ward, was it?
PN4533
MR CRAWFORD: It absolutely is, your Honour. That's where the abuse arose. He referred a lot about the AWU evidence. I did make this point previously, but there is clearly a general merit issue in this case about step‑downs and whether accident pay discourages people from returning to work because they received their full income and it, you know, compromises the workers compensation system. Obviously those provisions do not only operate in relation to awards. They apply across the workers compensation system as a whole to people on awards, people on agreements, people on common law contracts.
PN4534
A lot of the evidence that Mr Ward's witness Mr Shaw refers to himself is generic. It's not confined to awards at all. It speaks generally about those provisions, so on that basis we say it doesn't really make any difference that a lot of the evidence we led is from members covered by enterprise agreements, nor does it really matter what industries they work in. The point is it's evidence from real working people about their experience with accident pay and it's contrary to the position advanced by the employee groups about the importance of step‑downs. We say it's certainly relevant and should be afforded weight by the commission.
PN4535
Mr Ward strangely referred to assertions from the AWU about the award modernisation process. There were no assertions from the AWU. We carefully referred to the Commission's own documents, statements and decisions from the award modernisation process and which awards they took into account. There's nothing in that folder that is an assertion from the AWU at all.
PN4536
He referred to us including a draft Boral award. I think he was concerned we were trying to embarrass him. I mean, I really don't care who drafted that award. I care not who drafted that award. The reason it's in there is because in the Industrial Relations Commission's statement, they specifically refer to that draft award in terms of the making of the Concrete Products Award.
PN4537
I do note and I think it's important that none of the employer groups criticised the AWU's submissions about the principal federal awards, which are the most relevant ones. They didn't criticise specific aspects of the material we provided. Mr Ward suggested that the state Commission decision from Staff J was also irrelevant. Clearly that isn't right, because again there's a general merit issue in this case about step‑downs. That issue was agitated before Staff J by the New South Wales government.
PN4538
Staff J clearly rejected that argument, so I don't know how you can possibly say that that decision is not relevant to these proceedings. I accept that Staff J was not applying the modern awards objective in that case, but nevertheless his findings on that threshold issue about step‑down provisions is important.
PN4539
Mr Ward referred to high income rates in the hydrocarbons industry. I mean, yes, some employees in that industry do receive high rates of pay. They do live away from their families for lengthy periods. They work out in the middle of nowhere. I mean, realistically you're not going to get people to do that work unless you pay high rates.
PN4540
I think it's worth noting that AMA, for example, are not here. AMA are not here opposing what we're seeking for the Hydrocarbons Award or the Oil Refining Award. It is a little bit unclear who ACCI actually represents in that industry. We just reiterate our point that there is a clear national standard in the hydrocarbons and oil refining industries.
PN4541
In our view, it would be an historical injustice for employees in those industries if they do not have the history of accident pay which has always been part of their safety net I guess not always, but through the history that I've traced, accident pay has been in those awards and it should be included in the modern award going forward.
PN4542
The NFF did raise a procedural fairness issue. They complained about our folder. I think Post-it notes and not having an opportunity to look at AWU14 which is - I mean, I'm a bit disappointed by that submission, to be frank, because on Monday afternoon the NFF firstly tried to get hold of one of the folders and AiG and ACCI had them so they couldn't. So they came to us and asked for a copy of the document and it was provided. They didn't keep it. They came back later and handed it back, but I didn't ask for it back. I mean, I don't think I can be expected to chain it to the NFF's chest and make them walk away with it.
PN4543
DEPUTY PRESIDENT KOVACIC: Did you get the Post-it notes back though?
PN4544
MR CRAWFORD: Right. Just finally on Mr Shaw, in the transcript in cross‑examination Mr Shaw did admit that some of the reports attached to his statement were actually provided to him by ACCI. The reference is PN1506 of 2 April 2015. I won't go into this in great detail but suffice to say it's not probably the best indication about the expertise of your witness if you are having to provide relevant reports to them so they can prepare their statement. Unless there are any questions, that's all I wanted to reply with.
PN4545
JUSTICE BOULTON: Good. Thank you, Mr Crawford.
PN4546
Who's next? Mr Moretta?
PN4547
MR MORETTA: Thank you, your Honour. Look, I'm going to be brief. I think I said a lot on my examination‑in‑chief, my presentation on Tuesday afternoon in response to the ARA's reply and the Pharmacy Guild's reply. I just wanted to add a couple of things of what came out of Mr Ward's submission earlier today, and in relation to the way he describes the probative value of the witnesses that the SDA provided. I just want to stress that yes, there was one witness that is covered by the General Retail Industry Award, which is quite crucial, and represents the employees in this industry.
PN4548
At the end of the day it's not speculative in terms of what a loss of income, whether it be 95 per cent after 13 - between zero and 13 weeks or 80 per cent after 13 weeks or 26 weeks, no matter jurisdiction, the impact of those losses are not speculative. They know their mortgage repayments. That doesn't change over a small period of time. They know their fixed costs. They know the bills that they have to pay, and so to suggest that in all of our witness statements that their comments about how they would be under financial strain if they lost any of their income, that to me, I submit, isn't speculative.
PN4549
I also would like to respond in relation to the issue of Mr Ward's comment in relation to our witness, Tamara Kilpatrick. That is true, she's covered by the Woolworths Supermarket Agreement and accident pay doesn't apply in that agreement in New South Wales. But let me say this, that it doesn't mean that accident pay is an important issue to all of our members, to all of the retail employees, and that not being privy of those negotiations between the SDA and the Woolworths company when we negotiate, there are competing factors and at the end of the day you come to a conclusion.
PN4550
They have 80,000 employees that are reliant on the agreement, and of course at the end of the day both the union and the company come to an agreement after their posturing and their position in terms of competing interests. But that doesn t mean that because we didn't - or there's no accident pay in that agreement outside the jurisdiction of Victoria that it's not important. Just a final comment that I would like to say in relation to the response that the Pharmacy Guild gave in relation to at least the impact of accident pay and the cost of accident pay.
PN4551
At the end of the day the Commission has to operate within a statutory framework where that accident pay meets the modern awards objectives and there are all those limbs and those elements, and then they're competing. One of those limbs is the Full Bench needs to consider the impact on businesses with respect to cost, and I think we've addressed that in our submission. But let me say this, that there are always decisions made by the Commission and any variation of the award will always incur some cost whatever that may be.
PN4552
I would like to just note with the Full Bench - and I haven't provided this as an authority but just recently the General Retail Industry Award, the junior rates case. We had an extensive case in that where the 20-year olds basically in the retail industry are under the General Retail Industry Award. They now receive adult rates of pay whereas before they only received 90 per cent of the adult rate of pay. Now the Full Bench considered the modern award objective and it may have given different assessments in terms of the impact on those elements and it may not necessarily relate to all the issues and the considerations that the Full Bench will give weight in relation to the elements within the MOA, the modern award objective, regime.
PN4553
But we wish to say that in that case there was no issue of critical mass. No 20-year old was paid under the General Retail Industry Award an adult rate and therefore the Commission in that case determined that 20-year olds would get adult rates, and it considered that within the framework of the modern award objectives without the critical mass argument. On that note I would like to reiterate that we rely on and endorse and adopt the submissions that will be made by the ACTU in relation to the jurisdictional arguments in these proceedings and the substantive submissions that will be made, and that concludes my presentation. Thank you.
PN4554
JUSTICE BOULTON: What about ACTU3?
PN4555
MR MORETTA: In relation to that, if you look at our draft determinations you find that we have no issue with the ACTU3. We in fact would accept that draft determination. I'd just like to explain that in our draft determinations the appropriate level of pay that come in those awards are weekly wage. In the previous - in the accident pay draft determinations that we drafted, that related to the weekly wage in terms of the appropriate pay, and it did exclude the exclusions that have been put by that ACTU3.
PN4556
JUSTICE BOULTON: So it excludes over‑award payments.
PN4557
MR MORETTA: Yes.
PN4558
JUSTICE BOULTON: Overtime?
PN4559
MR MORETTA: Shift penalties, overtime.
PN4560
JUSTICE BOULTON: Yes. Good, thank you.
PN4561
I omitted to ask the AWU about ACTU3 so Mr Crawford?
PN4562
MR CRAWFORD: Your Honour, if the Bench is minded to adopt a standard clause, we're happy with the terms of ACTU3. Is that all you need, or?
PN4563
UNIDENTIFIED SPEAKER: Yes, we can go home now.
PN4564
JUSTICE BOULTON: Maybe you should ask Mr Ward that?
PN4565
MR CRAWFORD: Do you want me to talk about the clause in our draft determination or are you - - -
PN4566
JUSTICE BOULTON: No, I just - you've said that what you're seeking now as it were would be clauses in the terms of ACTU3.
PN4567
MR CRAWFORD: I mean, I guess the primary case before you is we are seeking the terms of our draft determination, but during the course of the proceedings this alternative position has arose and what I'm basically saying is we'd be comfortable with ACTU3 being the clause, if that is the case. But that doesn t necessarily mean we're walking away from our clause in our draft determination. The clause in our draft determination is quite similar to ACTU3. They're both generally modelled on the clause from the Black Coal Award.
PN4568
JUSTICE BOULTON: Yes.
PN4569
MR CRAWFORD: The main difference is obviously the reference to appropriate rate of pay.
PN4570
JUSTICE BOULTON: And what are the appropriate rates of pay in your awards?
PN4571
MR CRAWFORD: For awards like concrete products, which I believe has an industry allowance, the appropriate rate would include that. Our understanding is it's basically the all-purpose rate, so it's the minimum rate and all‑purpose allowances, and obviously it has been made clear that shift loadings and overtime is excluded.
PN4572
JUSTICE BOULTON: Thank you.
PN4573
Ms Wiles?
PN4574
MS WILES: Your Honours and Commissioner, the CFMEU construction and general division has made very detailed submissions in reply today and we support and adopt those submissions. We will also indicate our support and adoption of the ACTU submissions that are still to be provided to the Bench. In relation to the TCFUA's case I just want to address a number of challenges to the TCFUA evidence. The Ai Group brought a document yesterday, exhibit AIG3, which sets out the AiG's position regarding the weight to be accorded certain evidence filed by the union applicants in these proceedings.
PN4575
In relation to the evidence filed by the TCFUA, the AiG's position in respect to a number of paragraphs in the witness statements of Alan Spencer and Michele O'Neil is contained at pages 6 and 7 of the exhibit. In relation to the witness evidence of Mr Spencer ACCI previously objected to paragraphs 41 and 46 of his statement and exhibit AIG3 states in relation to each of those paragraphs that:
PN4576
The Commission admitted the evidence, however observed that it has limited value to the proceedings currently before it as it is of an employee covered by an enterprise agreement.
PN4577
In relation to the witness evidence of Michele O'Neil, AIG previously objected to paragraph 202 of Ms O'Neil's statement. In summary, AiG's position in relation to the first sentence of paragraph 202 is on the basis that Ms O'Neil was giving opinion evidence and was providing speculation. In respect to the second sentence of that paragraph, AiG object on the basis that it constitutes hearsay. We say that it is relevant that neither AiG or ACCI chose to cross‑examine Mr Spencer or Ms O'Neil in respect to their statements, despite having every opportunity to do so.
PN4578
Before going to the specifics of the objections I just want to make some general submissions in relation to the relevant statutory framework in relation to evidence. The Fair Work Commission has an overarching responsibility that's at section 577 to:
PN4579
perform its functions and exercise its powers in a manner that is fair and just, is quick, informal and avoids unnecessary technicalities, is open and transparent and promotes harmonious and cooperative workplace relations.
PN4580
The Full Bench of the Federal Court in Coal& Allied Mining Services Pty Ltd v Lawler considered section 577 and held:
PN4581
There is no doubt that members of the
PN4582
as it was Fair Work Australia:
PN4583
are bound to act judicially in the sense that they are obliged to respect and apply judicial notions of procedural fairness and impartiality. However it is an important aspect of the work of Fair Work Australia at all levels, including on appeal, that it is to proceed without unnecessary technicality and as informally as the circumstances of the case permit. FWA is not a court and its members are not judicial officers as such. It is not inappropriate to say that the members of FWA have a statutory mandate to get to the heart of matters as directly and effectively as possible.
PN4584
Now, just going to the O'Neil statement in paragraph 202. The first sentence of paragraph 202 states, and I quote:
PN4585
I have no doubt that it will be much more difficult to negotiate for the inclusion and draw attention of accident pay entitlements in enterprise agreements in the TCF industry if there is no substantive accident pay provision in the TCF Award 2010.
PN4586
In relation to AIG's objection to that sentence, we say that their contentions aren't sustainable. As we said, we reiterate that the Commission is able to inform itself in relation to any matter before it in a manner that it considers appropriate, which is section 590, is not bound by the rules of evidence, section 591, and has a discretion to admit evidence that would otherwise be inadmissible under the rules of evidence.
PN4587
We note too that the tribunal has traditionally admitted this type of evidence, subject to submission on weight, which is adjudged having regard to the opinion's rational probative value. Even if the rules of evidence were to apply to the Commission, and we note that under the Evidence Act, the Commonwealth Evidence Act, there are a number of exceptions to the opinion rule, including in section 76, 77, 78 and 79. Section 79 is particularly relevant to the statement in contest.
PN4588
Section 79 describes, in part, and I quote:
PN4589
If a person has specialised knowledge based on the person's training, study, or experience, the opinion rule does not apply to evidence on opinion of that person that is wholly or substantially based on that knowledge.
PN4590
We submit that Ms O'Neil does have a specialised knowledge within the meaning of section 79 based on her more than 25 years' knowledge and experience in the TCF industry, as an officer of the TCFUA and its predecessor organisations. She is the most senior national officer in the TCFUA, nationally, and has held multiple, varied and varied elected and employee roles within the union. And she sets out her experience at paragraph 7 to 21 of her statement.
PN4591
Ms O'Neil has also visited hundreds of workplaces across all sectors and represented thousands of workers in the industry, in both the formal and outworker sectors. Ms O'Neil's evidence is that during her period with the TCFUA she has been - and this is at paragraph 16, and I quote:
PN4592
Involved in the TCFUA's representations of its members, and other works in the TCF industry, in countless industrial disputes, award proceeding, enterprise agreement negotiations, court proceedings - - -
PN4593
JUSTICE BOULTON: Ms Wiles, I think you can take it that we understand the point, the argument that you're putting.
PN4594
MS WILES: Yes, your Honour.
PN4595
JUSTICE BOULTON: So maybe you can move on to your next argument.
PN4596
MS WILES: In relation to the second sentence at paragraph 202 which is objected to by AIG which says:
PN4597
It has already been advised to me by a number of organisers in the TCFUA that some employers in current negotiations have sought the removal of accident pay provisions from enterprise agreements.
PN4598
And AIG object to that sentence on the basis of hearsay.
PN4599
We again reiterate that the Commission has broad powers and discretion to inform itself in relation to any matter before it, in such a manner as it considers appropriate. The Commission is therefore vested with the discretion to accept into evidence material which otherwise would not meet the standard required under rules of evidence.
PN4600
In Pochi v Minister for Immigration and Ethnic Affairs [1979] 2 ALD at 33 Brennan J said that:
PN4601
Hearsay "has a wide scale of reliability" and there is no reason why logically probative hearsay should not be given credence.
PN4602
Again in relation to the second sentence at paragraph 202, AIG and ACCI did have the opportunity to cross-examine Ms O'Neil in relation to that evidence and declined to do so. Your Honour ultimately admitted that statement and in our submission, in context of the rest of the statements in paragraph 202, significant weight should be given to Ms O'Neil's evidence.
PN4603
Turning now to the statement of Mr Alan Spencer. AIG and ACCI's submissions go to paragraphs 41 to 46 of Mr Spencer's statement. Mr Ward for ACCI this morning essentially said, or put a submission to you, that all that Spencer can offer you is speculation. We reject that contention. In our submission we consider and reiterate that Mr Spencer's evidence generally is relevant to these proceedings in that it illustrates a number of things, and we went to those in our closing submissions I think on Tuesday. But some of the issues that it goes to are that Mr Spencer's accident pay entitlement was directly referable to the incorporation of a pre-simplified award to be read in conjunction with the pre-reform Textile Award.
PN4604
But even though Mr Spencer had his terms and conditions of employment governed by a series of enterprise agreements which provided wage rates above the TCF Award, he is still low paid at $774 per week and that without the accident pay entitlement under the various EBAs, Mr Spencer would have suffered not insignificant financial loss for extended periods of absence due to his workplace injuries.
PN4605
The other issues raised in Mr Spencer's evidence, for example the incorporation of award accident pays into enterprise agreements, his wage rate under the EBA and the value of accident pay as an allowance, we say are all relevant to consideration of the modern awards objective in section 134(1), and in particular 134(1)(a) the relative living standards and needs of the low paid. Section 134(1)(b) the need to encourage collective bargaining. In summary we say that although Mr Spencer is covered by an enterprise agreement, this evidence is relevant to these proceedings and the claim of the TCFUA.
PN4606
Now, in terms of the specific submissions that ACCI and AIG make to Mr Spencer's statement, that's in relation to dealing first with paragraphs 41, 42 and 55 that they say that are speculative. The substance of Mr Spencer's evidence in those paragraphs go to him calculating the loss of income that he would have suffered if he had not received an accident pay entitlement under the various EBAs which covered his employment. We submit that his evidence is illustrative of the importance of accident pay to low paid workers in the textile industry, and should be given weight in that context. ACCI's specific objection to paragraphs 43, 44 and 46 is on this basis. It is said that it's not relevant that those paragraphs relate to circumstances of the witness not receiving workers' compensation.
PN4607
Now, as we submitted in the proceedings at the time, this is actually an incorrect summary of Mr Spencer's evidence. The actual circumstances outlined on those respective paragraphs relate to a situation in October 2014 when Mr Spencer, although entitled to workers' compensation, was not in receipt of workers' compensation, due to the poor behaviour of his employer. His actions caused the delay in Mr Spencer receiving his entitlements, and that's clear from his evidence in paragraphs 31 to 33 of his statement. I won't read out the paragraphs. But we say that his evidence in paragraphs 31 to 33 make clear that ACCI's contentions in relation to paragraphs 33, 34 and 46 are clearly wrong, and therefore AIG's reference to them in exhibit AIG3 is also incorrect.
PN4608
Now, yesterday AIG made a number of submissions in relation to the evidence of Ms Tracey Brown. And I just want to make a small number of comments in response to that. It is clear from Ms Brown's evidence that she had only ever been employed by and acted for employers, or employer organisations, that she had no direct experience in representing injured workers, that none of the employers she had worked for previously had been covered by a TCF industry award. That in relation to successful return to work rates Ms Brown's evidence was imprecise and contradictory. She initially gave evidence - - -
PN4609
MR FERGUSON: Your Honour, I object to this. This isn't actually as was described. It's not responding to the submissions I put about Ms Brown's evidence, she's just now responding or commenting on the evidence that was put by Ms Brown. Again, that should have been put in her original submission so that I could then respond to that. Now I can't say anything in reply. So I object because it's unfair and ask that she confine herself to my submissions.
PN4610
JUSTICE BOULTON: Yes. Ms Wiles, do you say anything to that?
PN4611
MS WILES: Your Honour, well as I recall AIG's submission, they directly made submissions in relation to Ms Brown's evidence, in particular about the return to work rates. I'm simply responding to that - - -
PN4612
JUSTICE BOULTON: I think you can take it that we will be having regard to the evidence that's before us and the matters which have been raised and Ms Brown was cross-examined before all the submissions were put so you did have an opportunity, if you wanted to make these sort of points, to have made them.
PN4613
MS WILES: If the Commission pleases.
PN4614
JUSTICE BOULTON: So perhaps you should move on to your next point.
PN4615
MS WILES: Thank you, your Honour. I think yesterday the AIG made some submissions relating to paragraph 43 of their written submissions, and that was to the effect that OH & S and WorkCover legislation operate in tandem to ensure that employees are provided with a safe work environment and support if injured, and that there is no evidence that the system is failing. Now, Mr Maxwell addressed you on that and he referred to some statistics by safeTALK Australia which would indicate that that's not the case.
PN4616
So we would also point you to the evidence provided by the TCFUA in relation to the TCF industry, and that's contained at paragraphs 70 to 93 of the O'Neil statement and exhibits MON24 to MON26. If you recall that was the exhibits which dealt with a bundle of photographs taken of OH & S conditions in the sweat shops, and also the Cregan and Johnson Report into the conditions of outworkers in Victoria. We say that those exhibits illustrate that health and safety is still very poor in parts of the TCF industry, in contradiction to the generalised submission made by the AIG in its written and oral submissions.
PN4617
AIG made a submission yesterday, and ACCI made a similar one this morning, essentially to the effect that the Commission should not interfere with workers' compensation schemes. I think ACCI characterised it as the Commission should not disturb that balance. What we say is that the Commission is an independent statutory tribunal. Its mandate in these proceedings is to consider whether the inclusion of a substantive accident pay provision in a number of awards is necessary for those awards, together with the NES, to be a fair and relevant minimum safety net. This is not a role which can be abrogated in the interests of State and Territory workers' compensation schemes in the way suggested by AIG and ACCI.
PN4618
Similarly, yesterday AIG submitted that:
PN4619
It's not the role of the Fair Work Commission to fix every element of Australia's WorkCover system or the OH & S system.
PN4620
We take this as a concession by the AIG that those systems do need fixing. Equally, we say that the union applicants here are not asking the Commission to fix the WorkCover system, we are asking the Fair Work Commission to consider a narrow and discrete proposal, the inclusion of accident pay provisions.
PN4621
AIG submitted yesterday that employers overwhelmingly do the right thing in relation to health and safety and workers' compensation. We say there's no persuasive or clear evidence of that before the Commission. On the contrary there is significant statistics which demonstrate consistently high serious injury rates in this country. AIG submitted yesterday that if the union's proposals were acceded to then that would represent a significant expansion of accident pay to employers in Australia. We say that's not the case in relation to the TCF industry.
PN4622
In our closing submissions we made the point that the Clothing Trades Award 1999 and the Textile Industry Award 2000 covered the great majority of employees in the TCF industry. And that submission has not been contested by the employer parties. We also note just on that, that in 1996 the Victorian Government referred its industrial relations powers to the Commonwealth, and since that time, essentially, Victorian employees, or the majority of them, have been in the Federal system.
PN4623
Just a technical or procedural matter I guess. In relation to the Annexure A to ACCI's submission. In relation to the material there in relation to the Textile Clothing, Footwear and Associated Industries Award it says at the bottom of that table in red that 21 pre-modern awards do not contain an accident pay provision. We say that that's incorrect. We say that - and we've given evidence about this - this was at Ms O'Neil's statement at paragraphs 186 to 193, this is her evidence in relation to the part 10(a) award modernisation process. Her evidence was that there was between 22 and 24 TCF industry awards relevant to the making of the modern award. And in fact there were five Federal awards that contained accident pay, and four NAPSAs, so a total of nine transitional instruments in the industry contained accident pay. Annexure A also does not include one of the Federal awards which did contain accident pay, which is the Footwear Manufacturing and Component Industries Award, Accident Make-Up Victoria Award 2002.
PN4624
Now, just turning to a number of oral submissions made by Mr Ward of ACCI this morning. This is in relation to, again, Ms O'Neil's evidence. Essentially his submission this morning sought to diminish Ms O'Neil's evidence on the basis that she has previously provided similar evidence in award proceedings about the nature of the industry in particular, and that:
PN4625
It's a narrative that the TCFUA has advanced for a long time.
PN4626
What we say about that is that the TCF industry is low paid, has traditionally been low paid, and it will probably unfortunately continue to be low paid into the future. And we say that there should be no adverse or negative inference from Ms O'Neil having provided similar evidence in past proceedings.
PN4627
Mr Ward also made some submissions in relation to enterprise bargaining in the TCF industry. It's important that we go to exactly what Ms O'Neil said in relation to enterprise bargaining in the TCF industry, and this is at paragraph 94. She said:
PN4628
The TCF industry is highly award dependent. For many groups of workers enterprise bargaining is very difficult to achieve due to their significant lack of bargaining power, and employer unwillingness or refusal to bargain. For these workers the prospect of ever receiving over award wages and conditions by the process of bargaining is illusory.
PN4629
So, Mr Ward said that a finding of fact could be made in relation to bargaining in the TCF industry in that there was - it was capable of bargaining for accident pay in the industry. And in our submission that is misleading in relation to the actual position of the union's evidence.
PN4630
Your Honours and Commissioner, in the interest of time and allowing the other union parties to make their submissions I'll close at that point, unless you have any questions.
PN4631
JUSTICE BOULTON: Well, what's the answer to the question that you know I'm going to ask.
PN4632
MS WILES: ACTU3. In relation to that TCFUA's draft determination, that was obviously the position that we put. We are comfortable with ACTU3. In fact the TCFUA's draft determination took up quite a number of the provisions in the Black Coal Award, so in that sense it's quite consistent. In terms of the appropriate rate of pay under the TCF Award, in our view that would constitute the rate of pay together with any all-purpose allowances. I should indicate there are only two in the textile industry so it's not a significant issue under the award.
PN4633
JUSTICE BOULTON: Thank you.
PN4634
MS MOUSSA: Hello again.
PN4635
JUSTICE BOULTON: Well that's woken us up.
PN4636
MS MOUSSA: That was my intention actually. With no disrespect intended.
PN4637
JUSTICE BOULTON: I didn't think we looked all that sleepy.
PN4638
MS MOUSSA: Your Honours, the Deputy President asked if I could provide a list of enterprise agreements that either incorporated the modern award, equal modern away, or contained accident pay entitlements. And I regret that I've not been able to complete that task within the amount of time that's been allocated but I do endeavour to get that to your Honours by 4 pm on Monday. I would note that the list of agreements will be confined to identifying whether the enterprise agreement incorporates the award and has an accident pay entitlement.
PN4639
JUSTICE BOULTON: Thank you. That's all right.
PN4640
MS MOUSSA: Thank you. So I want to start off just by quickly saying that we support and adopt the reply submissions of the ACTU, the CFMEU, and the AMWU cross-divisionally, and we also support the submissions, the reply submissions, of the other unions present today.
PN4641
I want to focus my submissions mainly on the submissions of the MTA associations, ACCI, AVI, and the Ai Group. And I'll start off by going through the MTA submissions. But before doing that I just want to frame their submissions for your Honours, and Commissioners' interests. The submissions made by the MTA and VACCI organisations reflect the view of their members who are based in repair services and retail industry. They don't have members, as far as I'm aware, engaged in the manufacturing industry.
PN4642
MR BAUMGARTNER: That's not entirely correct. We do have members that are involved in manufacturing.
PN4643
MS MOUSSA: Okay. I withdraw that then, your Honours, but predominantly - - -
PN4644
MR BAUMGARTNER: We don't build vehicles but we build things on them.
PN4645
MS MOUSSA: Okay. I withdraw that. My point was going to suggest that their submissions should be, as far as we're aware, they predominantly represent people in the repair services and retail industry. Predominantly being the key word there. So their submissions should be viewed in light of that and do not necessarily represent the views of those engaged in vehicle manufacturing, which is also in a sector covered by the modern award.
PN4646
I would also like the Bench to keep in mind that vehicle manufacturing is not simply confined to car manufacturing, because we all know that there is the impending closure of the car manufacturing industry. There will be, once that closes, a continuation of the truck manufacturing and bus manufacturing industries in Australia, as well as the other component suppliers who supply those relative industries. So the submissions of the MTA organisation should be borne in mind knowing these things.
PN4647
So the MTAs have made a statement that the entitlement under the workers' compensation legislation, in most cases, will exceed the amount that will be payable under the accident pay clause, and therefore not necessary. The accident pay entitlements in the two major vehicle industry pre-modern awards, and our current claim, define accident pay as a weekly amount being the difference between the total compensation paid under relevant State legislation for the week in question, and the total 38 hour weekly award rate under their normal classification, together with any normal weekly over-award payment for the week in question, excluding shift premiums, overtime, fares and travel allowance, and other similar payments. This formulation of words was adopted by the AMWU vehicle division because it reflects the relevant pre-modern award provisions in the two major Federal awards in these sectors.
PN4648
The MTAs have argued, as I've said, that because of this definition and the concept of average weekly earnings, which may include allowances and overtime payments, this will exceed the amount that an employee would be entitled to under the accident pay clause. The long and short of it is, and this is what I was trying to articulate yesterday but failed to do in any coherent way, is that if the amount payable under the workers' compensation legislation exceeds the amount payable under the accident pay clause, then the employee would not receive a top-up. We accept this fact.
PN4649
Due to the current structure of many of the workers' compensation legislation schemes the accident pay entitlement won't become really important until after the 13th week in many of the jurisdictions. But this doesn't mean the modern awards objective is simply met because the entitlement is less likely to be important until the 13th week of injury. So obviously the question that needs to be borne in mind is whether the entitlement meets the modern awards objective, and it is our fundamental position that it does. And I would just refer you to the submissions that I've previously made in respect of the modern awards objective.
PN4650
I would note that my friend, Mr Ward, indicated earlier today that the Commission has accepted the proposition that there is no obligation on an employer to pay wages where the work wage bargain struck can't be performed. And in such circumstances it is accepted that an employee can be paid below the minimum wage. And he cites, to explain this, the example of personal leave. With respect, we don't accept the analogy that's been presented. Workers receive accident pay because of an injury incurred at work. It's not the same as a scenario where someone is taking personal leave for an illness unrelated to work. In these circumstances it can't be accepted that the Commission has adopted the view that people can't be paid for the work that is not performed. In other words, that the Commission has endorsed the concept of people being paid below the minimum wage.
PN4651
The MTAs also make an argument about overtime payments in the industry. So they say that within the industry a number of employees work two to five hours of overtime, particularly most mechanical and tyre fitting employees. And because overtime is included in the calculation of weekly workers' compensation payments in most jurisdictions, the amount that an employee would receive under accident pay, or lose if accident pay isn't included in the modern award, is non-existent. In making this argument as part of their written submissions they've suggested that our attachments at AMWVD8 of our written submissions, which was marked exhibit AMWVD1, was misleading because that particular attachment calculated the loss to an employee under the award.
PN4652
Firstly, our attachment isn't misleading. We made it unequivocally clear that we did not include overtime and shift allowances and payments in our calculation present in that attachment. Secondly, the evidence they've used to support their contention that most employees work overtime is that of Mr Hatton which is at exhibit MTA2. Mr Hatton speaks from his experience representing employers engaged in the repair services and retail sector. So, once again it can't be assume that all employees across both vehicle sectors, including manufacturing, all work overtime and so are likely to receive a higher workers' compensation payment under the legislative schemes. It is our experience that, particularly nowadays, not all employees across the industry work overtime.
PN4653
Bearing this in mind, we submit that the evidence of the MTA should be treated with the due weight. It's the task of the Commission to determine whether the accident pay provision in the vehicle award would meet the modern awards objective by protecting the needs of the low paid who, by no fault of their own, could end up in a position where they receive below minimum award wages because of an injury they suffer at work.
PN4654
Whether the amount they receive under the workers compensation legislation is more than they would receive, sorry, more than they would be entitled to receive under the accident pay provision is not the relevant question. The question is whether the inclusion of the entitlement itself in the vehicle award is necessary, and we submit that it is.
PN4655
The MTAs also make a point about coverage and they say that if it's allowed in the award it will extend the entitlement to those who never previously had access to the entitlement, particularly in New South Wales, and in their submission they list a number of pre-modern State NAPSAs that applied to manufacturers in the industry, in New South Wales. They also make the point that because of the transitional provision a number of employees, unless they were employed in 2006, would never have been covered by the transitional provision.
PN4656
With respect, we don't share the same interpretation of the transitional provision and, in fact, we believe they've misconstrued the interpretation of the transitional provision. Leaving this to one side, it is our submission that based on the coverage clauses of the pre-modern vehicle industry award, and repair services and retail award, a majority of employees engaged in the repair services and retail industry, in both New South Wales and throughout Australia, were predominantly covered by the pre-modern industry awards.
PN4657
This position is further confirmed by the evidence of Mr Hatton in Exhibit MTA2 at paragraph 8 where he states that a majority of businesses in the vehicle industry, the New South Wales vehicle industry, only had an obligation to pay accident pay for 26 weeks. Now, that entitlement that he is citing is actually coming from the pre-modern vehicle repair services and retail award.
PN4658
In light of these facts the detriment which the MTAs argue is likely to befall employees who have never had accident pay to pay, or who, in the last nine years, haven't had to pay it, is seriously overblown and a distortion of the reality across the industry. This submission of the MTAs should therefore be rejected.
PN4659
I just want to quickly make some comments in respect of the witness statements that have been tendered by the MTA organisations. Now, I note that my friend Mr Baumgartner from the MTA has made the comment that they were accepted without (indistinct) and no cross-examination of the witnesses took place by my colleague Ms Weber. Ms Weber put on the record that she reserved the right to make submissions as to weight about that evidence, despite not cross-examining those witnesses. So that is what I intend to do now.
PN4660
JUSTICE BOULTON: The opportunity to do that would have been in your submission.
PN4661
MS MOUSSA: I understand that, your Honour, but, with all due respect to the Bench, I certainly made it clear that I would be doing this at this point in time, and I do understand the objections of all the employer associations, but I certainly presented my case on the basis that I would have the opportunity to do it at this stage.
PN4662
And, I have made no comment about this evidence yet, so if I was not to put it on it would not be part of these proceedings at all. If I had known that this would not be allowed at this point I would have certainly made a comment in my opening of my submissions.
PN4663
MR BAUMGARTNER: We would object, I think, to the continuation of the submissions, which should have been put the other day.
PN4664
JUSTICE BOULTON: The essence of your submission is that we shouldn't place much weight on that evidence, is it?
PN4665
MS MOUSSA: That's correct, and on the basis that it's opinion evidence predominantly, and I'd refer your Honours to particularly the comments of Dr Purse at paragraphs 569 to 574 of the transcript in respect of the evidence of Mr Eblen, which is MTA1.
PN4666
JUSTICE BOULTON: Thank you. Well, that is the submission.
PN4667
MR BAUMGARTNER: Can I just comment, though? The particular witnesses have extensive experience and, really, their opinion should have reasonable weight in these proceedings. And, if they'd actually delivered their evidence it would have been affirmed, I think, by their knowledge and experience. And it's hard to say that people with 30-odd years' experience in the industry should not be given reasonable weight in these proceedings.
PN4668
JUSTICE BOULTON: You have been listening to Ms Wiles' submissions.
PN4669
MR BAUMGARTNER: Might have written them for her.
PN4670
MS MOUSSA: Your Honours, and Commissioner, the point about weight going to opinion is that again I would say that both witness statements recount their experiences - the experience of two individuals in the repair services and retail industry, and a number of those comments in their statements are opinion evidence. So I would just make that comment.
PN4671
JUSTICE BOULTON: What is your next point?
PN4672
MS MOUSSA: My next point, moving on, is the MTAs and AIG have made submissions about the critical - they've been critical of our draft determination, that it's quite long and burdensome. We intended to - we put this determination - - -
PN4673
MR FERGUSON: Your Honour, I need to object in relation to this. We were very detailed in our written submissions, but Ms Moussa didn't touch upon our written submissions at all in relation to her provisional submissions. She is raising them for the first time, her objections with our submissions, now, for the first time, and I'm not going to be able to have an opportunity to reply. I mean she elected not to respond to my written submissions. It's the same issue, and it's the same tactic.
PN4674
JUSTICE BOULTON: You shouldn't necessarily assume you won't have an opportunity to reply because I suspect at some stage you're going to get up and ask for that very thing.
PN4675
MR FERGUSON: Yes, I just thought I'd - - -
PN4676
JUSTICE BOULTON: But if you're foreshadowing what you might expect to be a ruling it might make it easier for us, but good. So - - -
PN4677
MR FERGUSON: We'd still raise the objection, but we may make the application.
PN4678
JUSTICE BOULTON: Yes. Well, again, you did have the opportunity, the written submissions were all in.
PN4679
MS MOUSSA: Your Honour, maybe I will just address then the point, the question, the inevitable question, that will be asked, which is our position in respect of ACTU3 in relation to the draft determination. We continue to press our application for the draft determination as put in our written submissions. But in the event the Commission is minded not to adopt that draft clause then we would accept the terms of ACTU3.
PN4680
I would not that in respect of the appropriate rate of pay you would have it defined as the amount of pay a person would receive had they taken personal leave. I would also note, to assist the AI Group, that there are some exemptions that have fallen out of the clause in respect of the vehicle industry.
PN4681
So, they're exemptions in respect of the short-term absences, and the first three weeks of qualifying time in respect if someone's injured, that are no longer present in ACTU3 which would be a disserve - the AIG would submit to the employers. But I just make that point too. The AIG are fully aware of what's happened. There are some other technical issues but they're not as (indistinct).
PN4682
JUSTICE BOULTON: Thank you.
PN4683
MS MOUSSA: Just quickly, I have a couple of other points I just want to make in respect of some oral submissions that were made today. Both the AIG and - sorry yesterday - the AIG and ACCI (indistinct) have made submissions about our reliance on history and whether or not that is relevant or not, particularly because in our - in the vehicle industry accident pay seem to be inserted by consent.
PN4684
We would submit that this evidence is very necessary because it goes to the relevance of the accident pay provisions with the vehicle award, it's part of the safety net. Section 134 requires assessing if the award provides a fair and relevant safety net. And, as Commissioner Bull note in his question to Mr Ward earlier today, the system has had accident pay in place up until five months ago.
PN4685
Now, I note that in response to that question from the Commissioner Mr Ward said that it was a transitional provision that was designed to move people into the new world. With respect, we cannot agree with that submission because the 2008 modern award decision at 2008 AIRCFB 1000 confirmed that the purpose of the decision to insert the transitional accident pay provision into the awards was because there was an anticipated national standard that was going to come through.
PN4686
So, an inference can therefore be drawn that it was contemplated by the Bench at that time that accident pay as an entitlement was, and should be part of the new world, to borrow the same phrase used by my friend Mr Ward. So we submit that the history of the awards - of the entitlement in the vehicle awards is very relevant to the safety net and should be taken into account.
PN4687
The AI Group said in oral submissions yesterday that we've relied on section 154 to extend the entitlements to particular States that didn't actually have the entitlement before. We've not hidden this fact, we're seeking to extend the entitlement in WA and the Northern Territory and the ACT, but we say that this extension is necessary because there are still employees working in those industries who live in those States, and likely to, or could potentially, be injured, and therefore the accident pay entitlement is relevant to those people.
PN4688
Just one final point. ACCI made the point today that we're seeking, or asking, the Commission to intervene in State workers compensation legislation, and the effect of that legislation. It's our submission that if the legislature was concerned about this then they would have made accident pay a matter that would be covered by subdivision D, being a term that must not be included in modern awards.
PN4689
MR WARD: I didn't actually say what she said; just be careful, I didn't say that.
PN4690
MS MOUSSA: With respect, in Mr Ward's opening yesterday he explained that the Commission is being asked to do two things: intervene in State - sorry, I have taken notes from that, but that's my interpretation of what Mr Ward said.
PN4691
JUSTICE BOULTON: Yes.
PN4692
MS MOUSSA: It has actually been thrown around quite a bit that we're asking the Commission to intervene in a system which has been set up as, apparently, working and doing great things for workers who are injured. But, again, my point is if it was something that the legislature didn't want the Commission to be involved with they would have made that clear, and absent of any clear intent by noting that in subdivision D of the Act, which is sections 150-155 I believe, and I stand corrected on that, they would have done so and they haven't done so.
PN4693
So, it was a term that was not permitted for about five years under Work Choices but before and after that it's been a term that's been allowed to be present in modern awards. So in closing they're our reply submissions. I do want to make the point that although we haven't put any witness evidence on personally, about the experience in the vehicle industry, we have submitted a number of statistical information confirming the wage rates in - the award wage rates in our industry, the amount of time that people in both sectors of the industry have spent off work.
PN4694
We have also provided a history of accident pay in our awards and we rely on the witness evidence that's been produced by other unions here today which go to supporting the arguments about the modern awards objectives. So if there are no further questions, that concludes my submissions.
PN4695
JUSTICE BOULTON: Thank you. Mr Burns?
PN4696
MR BURNS: Thank you, your Honours. Your Honours, I will just by yesterday Deputy President Kovacic asked me to source information relating to time off work for the industries the subject of the MUA's application. A call was made to WorkSafe Australia, or Safe Work Australia, yesterday. I filed with - or provided to you last night, and it's been posted on the (indistinct) website, copies of the information provided by Safe Work Australia.
PN4697
The relevant table - I am not sure how far this information takes the Commission. The first table provides that the median time lost for serious claims by the year of lodgement in the water transport services, and other fishing and stevedoring services, and other water transport services, a category called "other fishing" which you will see on the front, the email from Safe Work Australia at the front. My understanding that they're including the diving industry in "other fishing" includes pearling.
PN4698
So I'm not quite - I don't quite believe that is the case. But the relevant columns for our purposes would be other transport - other water transport services includes tug boat operation, so that's obviously relevant, and the stevedoring services. The figures on the first page is the median time loss, which means it's the centre figure and these figures go to 2012, showing that 4.6 was the median time off for workplace injury in the stevedoring industry in Australia. Median being half of claims were less than that and half the claims were more than that. So, that is the information that has been provided.
PN4699
The second page is serious claims by year of lodgement in the stevedoring. 300 serious claims, which means that claims resulting in one or more working weeks lost was 300 for the 2012-2013, 310, 325. Going back successive years, lower figures for the other water transport services. The final page is a page reflecting workplace deaths. You will see in this that - this page - that stevedoring services is about - the bottom, about halfway down, and it is one of the - it does have a figure of four deaths in one year in 2010, which is one of the higher figures.
PN4700
Of course the highest figures are in road freight transport, which are way above anything else on this list. But on the basis of - if you look at the top, air space transport, that's high workplace death. The postal courier and pickup delivery services numbers are fairly high. The road freight transport fair high. The transport services support services generally, and stevedoring services down there, I'd say it's within the top five dangerous industries in the country by way of workplace fatalities.
PN4701
So that gives you - that's the most basic information that was obtained by the union while we were here yesterday, and we also note that Safe Work Australia has advised in their email that this is the lowest level of industry information that they can supply. So that's the information based on your request which I passed onto my client. That's the information that's been returned to me. If I could tender that please and mark it MUA10 please.
JUSTICE BOULTON: Yes, it will be marked MUA10.
EXHIBIT #MUA10 INFORMATION PROVIDED BY SAFE WORK AUSTRALIA
PN4703
MR BURNS: I will be brief; everyone else was brief with MUA. Obviously our case is a little different, and I have wholly relied on, as far as the MUA's evidentiary case, award history. I rely significantly on the ACTU submissions, have very much from the outset, and also I rely on the CFMEU's submissions in reply.
PN4704
In particular I've relied on the ACTU submissions in relation to the jurisdiction on section 134 issues. It was raised in particular yesterday by the maritime employer that I'd only really referred to section 134A, being the low paid. The reason I raised that is because that always comes up with the stevedoring industry, because it is a higher paid industry, as Vice President Watson noted in his decision in the stevedoring award case.
PN4705
It's always asked about, well, how can you deal with section 134A in the context of the stevedoring industry and all these other industries. I mean it's relative, though. I mean low paid on the award compared to the enterprise agreement. We're here dealing with the safety net, that's what the award is, and that's what underpins all of the enterprise agreements. It's a different kind of industry in which everyone is quite well paid if you're on enterprise agreements.
PN4706
However, that factors in that if, say for example, people get injured and they are involved in step-down systems the loss of pay is more - there's an accelerated factor compared to the lower level pays. There has been submissions made by the employers about the relevance of the evidence that - the MUA relies on the AWU and the SDA evidence from employees.
PN4707
There's been submissions made that because those employees, or most of those employees, are enterprise agreement based then they should be disregarded. Now, all of the evidence that's before you needs to be had regard to. You can't dismiss any evidence, you need to look at the evidence before you and apply weight.
PN4708
The submissions that each of the employees have made that if they were to lose their accident pay would provide them - this is words to the effect, would provide them, would put them into a situation of hardship, words to that effect. Those words, those statements, need to be considered and granted weight by yourself. If you do not consider those statements and apportion them weight then you're making a mistake of fact, and it will be a substantial mistake of fact as such that it will constitute a mistake of law.
PN4709
So you must apportion weight to all of that evidence that goes in. But also you must apportion weight to all the employer evidence that has gone in, but you can't just disregard taking the all-in approach that the employers, in particular ACCI, have taken, as in, you know, wipe out, you know, disregard all the unions evidence and they lose outright. You need to consider everything that is before you.
PN4710
This case is a case where all the unions are relying on each other's evidence, and we're relying heavily on the lead of the ACTU. We're affiliates of the ACTU. I'm bearing in mind the words of President Ross, and every time I appear before him, "if you're just going to say what someone else has said don't say it." So, therefore, really, I have confined my case to what is different, and what's obviously different about the MUA's case is the award history and the length of accident pay in the awards, being 104 weeks in stevedoring, and 52 weeks in the professional diving and the marine towage.
PN4711
In the award history, which I have provided you and I have given you at MUA4, 5 and 6, there is the original awards which are arbitrated. You've got them there with you, and there is a long history there, and it is essential that these conditions be maintained.
PN4712
If it is the case that it is the belief of the Commission that awards, conditions in awards, have no bearing on enterprise agreements, and if conditions can be removed, or that are left out of awards, should have no effect on what appears in enterprise bargaining later on, then we will see.
PN4713
I would think, based on Mr Ferguson's comments about, you know, issues relating to what will occur about, in particular ACTU3, and the nature of the clause, well, I tell you what if we do all get ACTU3 that will very definitely promote enterprise bargaining by Mr Ferguson and his clients, because then they will be able to either have a clause that they can bargain away to their hearts content.
PN4714
Otherwise, in the end - I have heard submissions from one of the employers about this is not the appropriate forum to deal with these sorts of things. In the end, I mean if the award is just - if the awards through this award modernisation process are just stripped down and down and further we may end up with just a schedule to the Act that contains the employment provisions.
PN4715
But then there will be no function for (indistinct) because we'll be dealing with awards that are through the Magistrates Court because we'll be dealing with breaches of the Act, not breaches of the award. So these things need to stay separate in awards - - -
PN4716
DEPUTY PRESIDENT KOVACIC: Can we just get back to reply submissions.
PN4717
MR BURNS: Anyway that's about as far as I'll go down that little road.
PN4718
DEPUTY PRESIDENT KOVACIC: You couldn't go much further could you?
PN4719
MR BURNS: MUA here to stay. In relation to ACTU3 if I could take your Honours to the document MUA2 that I had earlier filed, which just contains the award provisions for the pre-reform award provisions for the tug boat industry award, the professional divers of Maritime Union of Australia award 2002, and the stevedoring industry award 1999.
PN4720
In relation to the words - the relevant words appear in those clauses and they're each a little different if we were to adopt ACTU3. At page 4 of MUA2, in relation to the marine towage award - this is the tug boat industry award 1999 award - in clause 16.2 the amount, at line 2, at the end of line 2, is the weekly aggregate wage. So that's for marine towage, the relevant rate is the weekly aggregate wage.
PN4721
In relation to professional divers, that's on page 8 of MUA2 at clause 18.2 on line 4. That is the employees appropriate ordinary award rate. Then in relation to the stevedoring industry, that's on page 12 at clause 14.2, 14.2.1. It's the ordinary weekly rate of pay for working ordinary hours (excluding shift premiums prescribed by the award).
PN4722
So each one has a different terminology but that's the wording that we would be seeking in ACTU3, and also in relation to time limits, sorry, the quantum, we would be seeking to maintain 104 weeks for stevedoring and 52 weeks for professional diving and for the marine towage. If there is anything further, that's it, thank you, your Honours.
PN4723
JUSTICE BOULTON: Thank you, Mr Burns.
PN4724
MS STARR: Your Honours, I just wanted to say two things. I hope this is the last time that I need to seek the Bench's indulgence to sit late, and perhaps this comes a bit late in the proceedings. There are two more affiliates plus the ACTU to provide submissions. The ACTU - our submissions - if it helps - our submissions are getting shorter and shorter as the time proceeds.
PN4725
I also did just want to indicate that some of the affiliates do need to leave, and those that have already given submissions need to leave so that they can get their flights.
PN4726
JUSTICE BOULTON: I thought you were just going to ask for something easy, like a comfort break. I am not sure what all that means.
PN4727
MS STARR: I anticipate that we can at a stretch get through in the next 30 - get through the final submissions in the next 30 minutes. I'm not sure if the Bench was able to sit until, is it 5 o'clock or a quarter past five; whether that would be okay?
PN4728
JUSTICE BOULTON: Yes. Who is next?
PN4729
MS STARR: Thank you. Next is the ASU.
PN4730
MS KNIGHT: Thank you, your Honours, Commissioner. I have shortened my reply in the interests of time. So if I first might confer that in response to the question from the Commission to the ASU, we have got a supplementary - we have developed a supplementary document to Annexure A of our February submissions, marked ASU2. It is offered now to assist the Full Bench and give some indication of the ASU's estimated proportions of employees covered by pre-reform instruments. I'd seek for that to be handed up and marked if the Commission is minded to do that right now.
PN4731
JUSTICE BOULTON: Let's see what it is. So just explain what it is again.
PN4732
MS KNIGHT: To summarise it, and as stated at the beginning of the document, this document estimates pre-reform entitlements of the modern awards of the ASU claim fall into three to four groups. Group 1, pages 1-9, shows that greater than 80 per cent of employees covered had accident pay. Group 2, pages 10-19, shows an estimate that 50-70 per cent of employees have had accident pay as an industry standard. Group 3, pages 20-31, shows that 10-30 per cent of employees covered had coverage of accident pay, and this is a significant number of employees.
PN4733
Please note rail in terms of awards not agreements, would most likely fall into the fourth group, and electricity and water, in terms of awards not agreements, are most likely to be in the third group. Group 4 on page 32 indicates our estimate that less than 10 per cent of employees covered would have had an entitlement to accident pay. We concede that that's the low coverage.
PN4734
MR WARD: Your Honour, I object to its tendering and I say this, with respect, if it's admitted I seek to call the author of the document for cross-examination. There is no foundation in this document as to the basis upon which the assessments and the categorisations have been made. Somebody, unbeknownst to me, has simply made what I presume is a gestimate and it's put forward as evidence, and that is a fundamental prejudice to us. If it's evidence admitted in reply I seek to call the author.
PN4735
MR FERGUSON: Your Honour, we raise an objection as well. If it's to be received we'd seek leave to make submissions as to the weight that should be given to it. It appears that it's just a documentation of the union's estimates, and we don't accept any of those estimates, and we say they should be given no weight, they're not evidence.
PN4736
As to the rest of the table, we can't speak to the accuracy of that, and we'd obviously need time to check whether that is accurate. So on that basis we object to it being received.
PN4737
JUSTICE BOULTON: Ms Knight, I don't think you had an opportunity to respond to the objections. Did you want to?
PN4738
MS KNIGHT: I'd like to say this on behalf of the ASU: we're not trying to hide anything. We know that it's offered as a guide, we know that it is an ASU estimate. In the time that we've taken we're happy that that level of weight is given to it, and I can assure you that the author the document would actually welcome cross-examination on it if that was what was required.
PN4739
JUSTICE BOULTON: Well I mean it's not based on ABS figures, it's not really more than put forward on the basis that the union have run through the awards and made these estimates, or gestimates.
PN4740
MS KNIGHT: I would agree that it's an estimate of coverage based on the author's knowledge of how those awards operated pre-reform.
PN4741
JUSTICE BOULTON: I mean we can't on the face of it, especially in light of the objections, given any significant weight to it, other than it's something which is put forward by the union.
PN4742
MS KNIGHT: The union is happy to accept that, your Honour, on the basis that we sought to primarily respond to questions put to us two days ago.
PN4743
JUSTICE BOULTON: I think if we were to accept the document we'd have to give the employers an opportunity to, as it were, examine the author. I mean it might be what you can - if you want to put in submissions what are your gestimates in response to the question that was put. But if you're going to put a document which seems to purport to have some greater substance then I think you'd need to defend that document in a better way.
PN4744
MR WARD: Can I help, can I try and help?
PN4745
JUSTICE BOULTON: Yes.
PN4746
MR WARD: Our objection goes to the groupings because the groupings could only be somebody unbeknownst to us guessing stuff. That is what our objection goes to, is the groupings and the characterisation of the groupings. Other than that it's the union's attempt to do no more than what everybody else has done, which is kind of tell you where they thought accident pay was or wasn't. It's the groupings we find offensive to deal with at this late stage. It's not the fact that the unions had a crack and saying, well, we think this award - accident (indistinct) didn't.
PN4747
MS KNIGHT: Your Honours, Commissioner, the ASU is happy to withdraw it in the interests of time, and just give you our closing.
PN4748
DEPUTY PRESIDENT KOVACIC: Can I just clarify, Mr Ward. So if we were to ignore the groupings and just sort of - in essence what I think is additional here, Ms Knight, is the addition of the comments column where there is - - -
PN4749
MR WARD: I hadn't seen that, sorry, your Honour, thank you for directing my attention to that.
PN4750
DEPUTY PRESIDENT KOVACIC: - - - where there is, I presume, the gestimates are quantified as best they can, and that's the key element of the response to the question that I asked of you the other day.
PN4751
MS KNIGHT: That is key, and we have as much as possible attempted to follow the format of ACCI attachment Annexure A to - Annexure A to ACCI2.
PN4752
MR WARD: I really trying to be helpful. If the Commission strike out the group, the references to groups on the first page, and the Commission strike out the groupings, and subject to us not conceding that the comments have any weight or validity, we won't oppose the document being received by the Bench.
PN4753
MR FERGUSON: We just renew our submissions that we don't accept any of the estimates, that should be given no weight to be more specific and, if it's otherwise received, we just want the opportunity to clarify the correctness, of the comments or otherwise, in terms of it - saying whether there's a clause and whether it's (indistinct), just a window.
PN4754
JUSTICE BOULTON: I am not sure how you strike out the groupings; I am not sure I understood what the groupings were.
PN4755
MS KNIGHT: The groupings were summarised when I opened this afternoon.
PN4756
JUSTICE BOULTON: Sorry, maybe I wasn't, at this stage of the afternoon, paying as much attention as I should have.
PN4757
MS KNIGHT: Would you like me to repeat them?
PN4758
JUSTICE BOULTON: Just so we know what we have to disregard.
PN4759
MS KNIGHT: So Group 1 is on pages 1-9, Group 2 is on pages 10-19.
PN4760
JUSTICE BOULTON: I can work that out, but why are they grouped like that?
PN4761
MS KNIGHT: They're grouped like that because in Group 1 ASU says that those pre-reform instruments covered 80 per cent of employees - where there was an accident pay entitlement that entitlement covered 80 per cent of employees in that industry.
PN4762
DEPUTY PRESIDENT KOVACIC: So the grouping goes to the penetration for want of a better description.
PN4763
MS KNIGHT: That's correct, of each pre-reform instrument.
PN4764
JUSTICE BOULTON: We are going to take a short break.
SHORT ADJOURNMENT [4.47 PM]
RESUMED [4.59 PM]
PN4765
JUSTICE BOULTON: We trust that in the break you have worked out the solution to this matter now. Ms Knight, what are the groups again?
PN4766
MS KNIGHT: The groups are group 1, pages 1 to 9, represents 80 per cent density of employees covered by an accident pay entitlement pre‑reform. Group 2, an estimate of 50 to 70 per cent of employees had an accident pay entitlement pre‑reform as an industry standard. Group 3, 10 to 30 per cent of employees in those industries had an accident pay entitlement pre‑reform, being a significant standard. Group 4, less than 10 per cent employees are covered having an accident pay entitlement and we can see that that was the low coverage.
PN4767
JUSTICE BOULTON: Now, the employers. You're objecting, Mr Ward, as I understand it, to the groupings.
PN4768
MR WARD: I object to it being tendered, but I'm trying to find a solution given the time of day. If the description of the groupings was struck out and the headings of the groupings were struck out, and the comments were received on the basis that they're not conceded by us in any way, shape or form, then we will withdraw the objection; but if the groupings are not struck out or the document is not withdrawn, we want to cross‑examine the author. We may wish to put on evidence in reply.
PN4769
JUSTICE BOULTON: Mr Ferguson, what is your position?
PN4770
MR FERGUSON: We object to it being received with any indication of the groupings being contained in the document. We also object to it being received with the comments being included in the document. Otherwise, if it is received, we would seek leave to submit that those two issues should be given no weight. They're just estimates from the union and, like all the union estimates in these proceedings, they should be given no weight. We don't concede that they're right.
PN4771
If it is otherwise received, we would also want the opportunity to check the veracity of the indication as to whether it contains an accident pay clause and the number of weeks it provides for, and the number of awards of course that are very important to us, and we'd want to go through that and check they've got that right. We haven't had an opportunity do it, so I think on balance we'd say it shouldn't be received and the order should direct that it not be received, but, as I understood it, the union was quite prepared to withdraw the document in any event at one stage and that may well be the fastest way home, anyway; but we certainly didn't understand it was being advanced as evidence.
PN4772
MS KNIGHT: As I have said, the ASU would be happy to withdraw the document. We say now that it's - - -
PN4773
JUSTICE BOULTON: Okay. If that's your position, we'll hand it back. Thank you for your efforts, nonetheless, Ms Knight.
PN4774
MS KNIGHT: You're welcome. I'll conclude the ASU's submission in reply, reiterating the position of the ASU that we cannot give definitive answers about employees covered by a pre‑reform accident pay entitlement except to say that in many of the awards the subject of our application, we were not the only union party.
PN4775
In some but not all pre‑reform industries for each industry and occupation we represent, we have shown an accident pay entitlement covered either a majority of employees in the industry, significant numbers in the industry or have said that the Commission should not have to discriminate about how to apply the entitlement to each industry with a minimum condition for all workers covered by a modern award.
PN4776
The ASU's primary submission is that all modern awards should have an accident pay entitlement of at least 26 weeks, which would vary depending on pre‑reform industry standards. This is why the ASU has made a block application with all modern awards where we have significant membership and union coverage. While the ASU has argued that where there has been a critical mass of employees' industry standards per the Black Coal decision of this full bench, there are at least three modern awards the subject of our application, being Airline Operations ground staff, business equipment and labour market assistance industries.
PN4777
We also say that there are another six awards where there are significant accident pay coverage for award‑reliant employees with little or no bargaining opportunities, particularly in relation to clerks and SACS covered employees. In the other industries, accident pay in agreements will lose legitimacy, particularly local government, electricity and water, because in these industries award reliance is creeping in. Accident make‑up pay is an important entitlement to meet the needs of the low paid and promotes better social inclusion. The ASU adopts the submissions of the ACTU and the CFMEU in reply and all applicant unions in their replies today on this point and on other points.
PN4778
Finally, workers on workers compensation are the most vulnerable workers, with little or no bargaining power. The full bench has heard evidence that the lower income of a worker, the harder potential loss of income can be on their living standards. Many of those workers have families, mortgages and other commitments that do not go away because they have experienced an injury.
PN4779
With respect to ACTU3 and to finish, the ASU was asked to give consideration to that question from this full bench to a common clause and in respect of the words in the meaning of accident pay in ACTU3, appropriate rate of pay would generally be taken to mean by the ASU no over‑award payment. That concludes the reply submission of the ASU.
PN4780
JUSTICE BOULTON: Thank you. Mr Nguyen.
PN4781
MR NGUYEN: Thank you, your Honour. We rely upon and adopt the submissions of the ACTU and the CFMEU Construction and General Division, and also rely upon and adopt the submissions of the other unions to the extent and not inconsistent with what I'm about to say.
PN4782
With respect to our first submission, the employees say that there is no evidence and no case to answer. We say the AMWU's case is based on the premise that employees covered by the award system safety net are entitled to the properly fixed minimum wages in awards when they experience work‑related injuries resulting in incapacity. Secondary to this is the fact that employees do experience financial stress when they are penalised by a reduction in their minimum award wages by step‑downs in workers compensation schemes.
PN4783
On the first point, we believe we can rely on annual wage decisions, of which there are close to 20 years of decisions subsequent to the proper fixing of minimum rates. On the second fact in issue - which we are surprised is a fact in issue - of whether there is financial stress experienced following a step‑down, there is evidence before the Commission which went unchallenged by the employers that financial stress was experienced by employees.
PN4784
In addition to proxies to low‑paid employees, in the form of the SDA witnesses who earn wages are equivalent to award wages at or about the C10 rate, I note also that we have a statement from Ms Jeannette Park, which is a witness statement from a person who is covered by the General Retail Award. It's not necessary for witness evidence to be from employees who are only covered by the award. It's only necessary for relevance that they are earning equivalent to what would be low paid award rates.
PN4785
If the Commission is still not satisfied of the self‑evident situation of low paid employees, we refer the Commission to its own statistical report for the 2014‑15 annual wage review and which was produced for those proceedings, which provides very clear support. The employers have not provided any evidence that employees who experience a step‑down do not experience financial distress and they did not choose to cross‑examine any of the witnesses who made this assertion.
PN4786
We also add that the general perspectives of Mr Mansfield and Mr Dababneh also corroborate the SDA's direct witness evidence, and the overall picture presented by the Fair Work Commission's statistical report for this year's annual wage review. The award entitlement history also goes directly to evidence of established merit for accident make‑up pay in ameliorating the negative impact of step‑downs and providing a fair and relevant minimum safety net. We also rely upon and adopt the CFMEU and MUA submissions on this point.
PN4787
Further, with respect to weight, we rely upon and adopt the AWU's submissions with respect to the weight that can be afforded to evidence about employees' motivations to return to work, the evidence coming directly from employees, and the submission that this evidence can be relevant across industries, occupations and pay grades. We also refer the Commission to our submissions on Tuesday about relevance of the evidence about the motivations of employees to return to work.
PN4788
We further say that the evidence about motivations of employees to return to work corroborates the views of the Royal Australasian College of Physicians, which we outlined in our submissions on Tuesday. In this context, the evidence before the Commission does not point to a problem of malingering. The employees' submissions assumed the existence of a problem, but this is certainly not self‑evident and the union's evidence refutes this.
PN4789
Further, on submissions about weight of evidence, we acknowledge that the experiences of OH practitioners may have some value, but we say that value is just the same as the experience of union officials and the experience of a solicitor working in the field. The evidence given by Mr Shaw and Ms Browne is of the same kind as evidence which was provided by Mr Mansfield and Mr Dababneh with respect to their anecdotes about various employers or employees misbehaving in the system.
PN4790
Specifically on the weight of Mr Shaw's statement, we support the submissions of the AWU. In particular, about the statement including reports suggested to him by ACCI. This evidence goes directly the evidence he gave that the reports were suggested by ACCI goes directly to the - - -
PN4791
MR WARD: I object to that. That wasn't what was said. The debate was how this statement of evidence was constructed and whether or not he actually was provided material to put into his exhibits. Now, I'm concerned that there's some suggestion in some way he was set up to produce his statement, because there was nothing in the evidence or the cross‑examination that said that.
PN4792
He swore an oath. The oath is accepted. I'm just concerned that they're trying now to impugn in some way that he was kind of set up by ACCI. He wasn't.
PN4793
MR NGUYEN: We submit that's for the Commission to find, but on that finding we say the evidence goes directly to the principle of whether Mr Shaw's opinion is of a kind which someone who is not familiar with the area can form sound judgment about. If someone who is not familiar about the area of knowledge can form a sound judgment about it, then the opinion is not of a kind which can be classified as expert opinion. If the Commission finds that ACCI did suggest reports to Mr Shaw, then that would amount to a finding - - -
PN4794
MR WARD: I object to this on a different ground. Why didn't he raise this when he got on his feet three days ago, so I could deal with it properly?
PN4795
MR NGUYEN: Your Honour, we submit that it's not possible for us to understand the characterisation which the employers might put in about their evidence - - -
PN4796
JUSTICE BOULTON: Just move on to your next point, please.
PN4797
MR NGUYEN: To the extent that Mr Shaw's evidence draws the Commission's attention to statements in the Hanks report, we rely upon the CFMEU's submissions, but the key point about Mr Shaw's evidence is that as acknowledged by Mr Ward representing ACCI, Mr Shaw wasn't brought here to say whether step‑downs work or fail.
PN4798
There has been an issue raised about the fact that the AMU's witness included undisclosed people, anecdotes and impressions. We say that principle should also apply to the evidence of Ms Browne and Mr Shaw that employees are needing a stick approach to be motivated to return to work.
PN4799
With respect to Mr Ward's claim that Dr Purse is not an objective commentator, we say that his academic career is premised on properly conducted literature reviews. Any challenge to his assessment of the state of academic research is a very serious issue for Dr Purse's academic credentials.
PN4800
If I can now turn to our third submission, which is about the award modernisation full bench decision, [2008] AIRCFB 1000, in particular paragraph 88, which has been the subject of some discussion. We say that for our awards the position at the time was not clear and there weren't resources devoted to analysing if there was a clear entitlement or critical mass. Resources were assumed to be allowed to be devoted to looking at the entitlement more closely towards the end of the transitional period. For the AMWU, who was involved in every stage of the Part 10A process, the transitional clause provided sufficient protection for the transitional period for employees.
PN4801
We say that paragraph 88 of the full bench decision should be understood in the context of that decision‑making process, of which we note that ACCI agrees it was quite a gargantuan process. Although the AIRC full bench was required to make its decisions independently, it was heavily reliant on parties to make submissions about the content and coverage of pre‑modern awards, NAPSAs and other relevant instruments. It would have been incumbent on parties to establish that a clear entitlement existed of critical mass at that time.
PN4802
We would say that what can be taken from the decision is that where a party subsequently submits that there is a significant history of accident make‑up pay entitlements in their industry or occupation, then that history is relevant in a similar fashion. It should not be read as closing the door on similar decisions applying elsewhere subsequently, but should be read as leaving the door open to parties who may subsequently find resources to devote to the issue. The relevance we say in these proceedings takes into account the preliminary jurisdictional issues decision.
PN4803
If I can now turn to my fourth reply submission, which is the claim that the Fair Work Commission has no business intervening in state workers compensation legislation schemes. We support submissions on the point and we say the Fair Work Commission has a legislative mandate and directed obligation to achieve the modern awards objective. Where any aspect of the safety net is affected by external factors such as state government legislation, the Commission is within its powers to consider those external factors in establishing a safety net.
PN4804
If I can also submit that the Commission should adopt the legislative, interpretive technique of looking at the pedigree of workplace relations legislation. In particular, on the sections which go to the allowable matters. Looking at the pedigree of workplace relationship legislation from the period before Work Choices, the period of Work Choices and the period of the Fair Work Act, it is clear the legislative intent is for accident make‑up pay to again be a matter which the Commission can include in awards.
PN4805
The independent umpire's role in defining the safety net is not in any way hindered by a need to be subservient to the legislative objectives of a state government unless those objectives can find favour in the modern awards objective. We note that the employers have not provided any evidence that step‑downs are necessary to achieve any particular limb of the modern awards objective.
PN4806
I will now turn to my fifth reply submission, which is the AIG's assertion that the Metals Award accident make‑up pay came about from a consent arrangement and should not be given weight - - -
PN4807
MR FERGUSON: I object to that. We set that out in our written submissions and my friend didn't raise that at all. All the detail was there. He could have responded. He has waited until now to do it so that I don't have an opportunity to respond. We say he should be directed not to continue with this line of submission.
PN4808
MR NGUYEN: I'll move on from that point, your Honour. We say the weight afforded to the history of entitlements is that they are prevailing standards which supported the safety net. This leads me to our sixth reply submission, which is that the accident make‑up pay history goes to the question of what is fair and what might be considered a fair and relevant minimum safety net of terms and conditions.
PN4809
On that point, if I can respond to annexure A of ACCI's table of awards, which I assume is in response to our table. The awards ACCI say did not have accident make‑up pay are not provided. We don't know if the awards which they refer to were single issue awards or single state, or even whether the coverage is broad enough to be relevant. We say that the Australian Industry Group table, which we have amended with commentary and the submissions that we made when those tables were tendered, should be accepted as the history of entitlements.
PN4810
I will now turn to my seventh reply submission, which goes to model clause ACTU number 3. The clause is in similar terms to what the AWU has sought in its draft determinations, the only difference being the number of weeks and the rate of pay. We continue to press the number of weeks in our draft determinations in AMWU1.
PN4811
However, we respectfully note that it is also open to the Commission to vary the number of weeks based on its assessment of the current state of workers compensation legislation and the critical mass of awards. On the rate of pay, we would press the rate in our draft determination. However, we note, depending on the Commission's finding about the history of entitlements and what is the appropriate safety net, that there may be room for movement there.
PN4812
If I can now turn to my eighth submission, which is to the extent that the Commission requires data about workers compensation statistics. We rely upon the attachment to the AMWU Vehicle Division, which was marked AMWUVD1. The attachment in their submission is attachment number 10, which is the Safe Work Australia Australian workers compendium of statistics.
PN4813
At page 27 onwards are the relevant statistics of serious claims and which show that manufacturing is historically having the highest incidence of serious claims, only recently falling behind health and community services in 2011-12. We speculate that is due to the growing size of the health and community services labour force. We also rely upon the CFMEU's tendered ABS statistics, CFMEU7, about the level of coverage of federal awards and agreements as compared to state awards and agreements, and their submissions associated with that.
PN4814
Can I now turn to the Printing Industries' submissions. We strongly refute the submission that we cherry‑picked the award history. Our analysis of awards history is based on the AIG's table, which are drawn from the indicative lists of awards in the Part 10A award process. Our exhibits AMWU4, 5, 6 and 7 and accompanying submissions provided, are transparent reasoning of where we saw the weight of coverage and entitlement. With respect to the claims of bias of our witnesses, we say that's equally applicable to the employers' witnesses.
PN4815
The Printing Industries Association say the role of the award is not to insulate people from difficult times. We say the modern awards objective requires the Fair Work Commission to take into account the relative living standards and the needs of the low paid. The needs of the low paid clearly include an ability to meet expenses and that also includes emergency expenses.
PN4816
With respect to the Printing Industries Association's submissions that accident make‑up pay must be considered on an industry basis, we say that is consistent with our submissions which have addressed award history on an industry basis. With respect to the experience of employees, we say the needs of the low paid and their motivation to return to work cannot be confined by industry.
PN4817
With respect to the Printing Industries' submission that there is no evidence of a correlation between step‑downs and return to work, and that it is a political issue, we agree with the general statement. However, we don't agree that there is no basis for the independent umpire to establish a safety net to protect employees from political decisions which may be taken on the basis of no evidence by parliament.
PN4818
Finally, I note the Printing Industries Association agrees that there was a standard of 39 weeks in Victoria and 26 weeks in New South Wales for the graphic arts industry, and we support that. That concludes my submissions, your Honour.
PN4819
JUSTICE BOULTON: Thank you. Ms Starr?
PN4820
DEPUTY PRESIDENT KOVACIC: I think they call this the graveyard shift.
PN4821
MS STARR: I think it is. I couldn't impress enough how much we appreciate the bench's indulgence in being able to finalise the proceedings today. The incentive for doing so is that, after this, we go away. No forever, but we go away for a while.
PN4822
There are a few matters which we need to deal with. Some of those are what I'd call jurisdictional objections or other objections. I'm going to also come back to the Commonwealth and New South Wales government submissions. We have some very brief observations in reply to the evidence of Australian Industry Group and ACCI, and then finally I'll just make some very brief concluding remarks which touches on all the employers' submissions with respect to the legislative framework.
PN4823
I might say just up‑front and in order to fend off any objections to us the fact that we've dealt with the jurisdictional objections in this order, I think you will recall on the first day of these proceedings in April, the ACTU did intend to deal with the jurisdictional objections immediately. The Australian Industry Group at that time made submissions that they needed to call on evidence in order to support those jurisdictional objections, particularly with reference to section 154, and so it was not appropriate for us to deal with the submissions until we heard the final form or the final effect, I guess, of that jurisdictional objection.
PN4824
I think it has been evolving and it has been developing since these proceedings started. That's not a criticism, Mr Ferguson. It's just that in order for us to deal with it - - -
PN4825
MR FERGUSON: Which is not the submissions I actually put though. I didn't say that we needed to hear all the evidentiary case in order to deal with all the jurisdictional objections. It's just not right. I did make some sort of comment about some of the evidence colouring the arguments in relation to one discrete issue, not all the objections. I foreshadow that I will be objecting if there are submissions raised in relation to material within our written submissions in detail that was not dealt with by Ms Starr in her previous submissions.
PN4826
MS STARR: Mr Ferguson is totally at leave to object at any point. I'm simply saying that on day one of the proceedings, we wanted to press on and deal with these objections. It was the point at the time that in relation to section 154, I understand that evidence was led from their witness with regard and in order to support that proposition, so we're dealing with those objections now.
PN4827
MR FERGUSON: If my friend wants to deal with submissions on 154, I object for the same reason. We went to some length there was nothing put now, the central issue is I don't have an opportunity to respond. They've waited until now rather than dealing with any of the material I've put on. If she is just dealing with entirely new material that I've raised, that's one thing, but that's not what is occurring. It's in relation to our objection broadly. The time for that has passed and we'd seek that the bench direct that Ms Starr not follow that line of submission.
PN4828
MS STARR: The problem with that position is that the submissions which were made orally are not those precisely which are contained in their written submissions. Also there were further materials which were handed up, of course, in support of that argument, so we're going to deal with that. Given the nature of the jurisdictional objection, I think it's fair to us that we hear and that we have an opportunity to respond to the documents that were provided in support of that objection.
PN4829
I'll deal with section 154 now, since we're here. Clearly the Australian Industry Group are pressing their objection that the accident pay provisions offend section 154. What we understand from them and what we can distil from it is it becomes a question of how you characterise the entitlement to accident pay. We support the submissions which were made by Mr Maxwell.
PN4830
We just really add this: accident make‑up pay, in our view, is an entitlement to be paid the award rate of pay whilst you're on a period of workers compensation. The entitlement is the award rate of pay. That's derived from the award itself. It is not a percentage amount. It is not a dollar figure. It is an entitlement to be paid the award rates of pay. It is, therefore, on a proper reading it's not expressed as an entitlement that operates with reference to a state or territory boundary.
PN4831
For clarity, we put this: the clause could be re‑drafted to exclude any reference to state workers compensation legislation and we say that it would have the precise same effect. By that, we mean you could say an employee is entitled to be paid the appropriate rate of pay for a maximum of X weeks for a period whilst they're on workers compensation. As we understand the argument that has been put, that would deal with those issues.
PN4832
We have made written submissions on that section 154 point. We rely on those submissions. We further support the submissions which were made by the CMFEU Mining and Energy Division, and I think they were marked as CFMEU3. I apologise, CFMEU5.
PN4833
Mr Maxwell, again, he has responded to the objections of CCIWA and we support those submissions. This is the most important objection that we need to deal with. The Australian Industry Group has submitted, and we understand are now pressing, their objection that the application should not be entertained, based on the principles of estoppel. We need to - - -
PN4834
MR FERGUSON: I feel obliged to object. I didn t raise new points in relation to estoppel. All that material was set out in writing. Again, Ms Starr elected not to respond to that. We d seek that she be directed not to continue this line of submissions.
PN4835
MS STARR: The ACTU will make submissions in relation to unless the bench tells us otherwise, we will make submissions in response to another peak organisation who has formally now put onto public record that the ACTU has conducted itself in a way which is inconsistent, not only with the act, but which is an abuse of process. It is a matter of I am obliged to ensure that the record - - -
PN4836
JUSTICE BOULTON: Are you going to say anything more than what Mr Maxwell has already said?
PN4837
MS STARR: Yes, I am. The reason why it is important that we do so and part of what we raise is that the - - -
PN4838
MR FERGUSON: They should have dealt with this. That s why we renew our objection.
PN4839
MS STARR: I go back to on the first day of the proceedings we had indicated that we would like to deal with this objection. The matter proceeded. To be frank, the ACTU did not even understand why the Australian Industry Group would press the objection on the sixth day of the hearing. I m not sure to what effect, but they have and here we are.
PN4840
MR FERGUSON: Can I just make submissions? We were content to run it on that day. We were content to run it now. We said we wouldn t press it. We said we d run it either way. I don t see what relevance this had to the objection. It should ve been dealt with. I think she should just be directed not to continue further.
PN4841
JUSTICE BOULTON: I think we ve heard a lot about the abuse of process and the estoppel. Mr Maxwell seems to have covered it.
PN4842
MS STARR: Certainly. If I might just say two things in relation to that objection, the first one would be that it is a high burden that one bears if they are to suggest that, in this case, another peak body is conducting itself in a manner. The Australian Industry Group s submissions do not go anywhere near establishing that that is what occurred. I come back to the Commonwealth and New South Wales government submissions. The Commonwealth Government filed submissions on 8 April and the New South Wales Government didn t file until 15 April, which was after the hearing. At the hearing on 10 April we led some evidence from Dr Purse in response to the Commonwealth Government correspondence and you might recall that Dr Purse commended the Commonwealth Government on the brevity of those submissions. Nothing was led with respect to the New South Wales Government submissions because we didn t have anything because they didn t file that until a week later. We say that it would be prejudicial, given the very late filing of that New South Wales correspondence, in that we re not in a position to lead any evidence in response from Dr Purse.
PN4843
The New South Wales Government indicated in October last year that they were considering intervening in these proceedings. They had every opportunity to do so. They did not. For those reasons, we don t make the argument that the submissions should be ignored. We know that, as part of these proceedings, governments do make submissions from time to time, but we do say that they should be accepted subject to weight and that weight should be very little.
PN4844
In relation to the Commonwealth Government submissions, they speak obviously to the Comcare scheme, which we note doesn t have a step-down until 45 weeks. They say that, in their view, this is consistent with the international evidence. The first thing then is to note that, if you accept their view, then there could be no opposition to accident pay up to 45 weeks. I think that is helpful for many of the applications. The second thing to note, and I won t go over it, but the relevant parts of the transcript of Dr Purse, at pn 525 to 532, and he, of course, deals with that evidence in detail.
PN4845
In relation to the New South Wales Government submissions, they argue that accident pay in awards will throw out the whole delicate balance of the entirety of the worker s compensation scheme in New South Wales and that step-downs are a critical and inseverable aspect of the whole mechanics of the system. We support what Mr Maxwell has said in relation to the New South Wales Government submissions. We don t accept that employers all share the same view. Step-downs, in our view, create poor morale because they can be seen to be punishing employees who are doing the right thing, and that is why self-insurers and some employers simply don t apply step-downs, they apply it on a case by case basis.
PN4846
Both in 2012, when the New South Wales legislative amendments to the workers comp act were passed, and again, at the time of review of the act in 2014, the New South Wales Government was aware that accident pay was a term of some modern awards. The review in 2014, of course, found that there was no discernible change in the number of claims that were resolved within the first 13 weeks. The New South Wales Government also knew about accident pay in 2008, when the modern awards were being made, because we know at that time the New South Government wrote submissions to the AIRC. The basis of their submissions was that certain aspects of New South Wales awards were considered community standards and that they were an entrenched employee benefit and they should be preserved in the federal awards. Accident pay was one of those community standards.
PN4847
It appears that some point between 2008 and 2012, the New South Wales Government views changed. I come back to what I said before, but governments will be governments. Workers compensation regulation will change. I suspect that step-downs will come in and out of favour. However, in all of the different reviews of the Fair Work Act, accident pay hasn t arisen as a significant issue, nor has it arisen in respect to many, and I think there have been many of the various reviews of the workers compensation schemes. All we are talking about in these proceedings is ensuring that injured workers are paid a safety net rate, a minimum award rate of pay, whilst they recover.
PN4848
This is a matter which falls squarely within the remit and the powers of the Commission and I would simply say that perhaps they should be more cautious before disturbing and undercutting enforceable minimum award rates of pay that are set by an independent Commission panel each year. These rates are designed as minimums. There is no room in them to be undercut, for various reasons, and in undercutting them, we say, that they are disturbing the careful balance that has been struck in consideration of the needs of employees, the capacity of employers to pay, the effects of the national economy, the insurance fairness and all those factors, which are far more complicated that I can deal with, which form part of the annual wage review.
PN4849
Coming to the Australian Industry Group, in their submissions, they summarise what they thought were the salient points of Ms Brown and her evidence. A number of those salient points touched on return to work. One area of that, which we wanted to come back to briefly, is in relation to suitable and modified duties. Ms Brown provided evidence that some employers who are able to provide suitable duties will not do so because they are uninformed or because they are uncomfortable in doing so.
PN4850
It is obvious, but so much depends on the attitude of the employer to provide suitable duties to accommodate an employee s limited capacity. Much hinges on this. Where an employee cannot be accommodated, it means that they miss out on an opportunity to have their pay increased if you re in New South Wales. It means that they are possibly denied one of the few things that we have all agreed about the health benefits of being at work. Ms Brown notes that there are challenges to return to work. She stated that these were the extent of the injuries and the breakdown in relationship that can occur prior or during workers compensation claims. I think the breakdown of relationships is a real issue and employees can raise disputes, but as Ms Brown indicated, a dispute gets raised with the insurer. How much help can they be if the employer still flat out refuses to accommodate any employee? What happens to them? We know that there is very little, if any, enforcement, very little, if any prosecutions of employers.
PN4851
MR FERGUSON: I need to object to this. It is going well beyond to the submissions we raised in relation to Ms Brown s evidence. My friend is now just at a point to deal with the evidence of Ms Brown. That should have been done in chief. I can t reply to any of this.
PN4852
MS STARR: The salient points that Mr Ferguson relied on and he is asking the Commission to rely on with respect to Ms Brown s evidence included number six, which was that there is many other factors which impact on a timely return to work. You said the employee, the employer, the insurer. You said employees have a significant bearing, that they must co-operate, and I can go on. These submissions that we re saying are appropriate and directly in reply to the evidence, which the AI Group is seeking to rely on.
PN4853
JUSTICE BOULTON: Yes, you can proceed.
PN4854
MS STARR: And the objection may have been a little bit late because the only other thing I needed to add was, in relation to the disputation, it is complicated, because there are three parties involved, because we do have an insurer is involved. The only other comment I wanted to make was that your new members are lucky enough to have an organiser perhaps like Mr Mansfield, who can help them resolve that dispute, but not everybody has that. And as we know, disputes take time to resolve and time is of the essence in relation to return to work and also obviously in relation to step-downs and what people get paid.
PN4855
In relation to ACCI and the submissions of Mr Ward, in relation to the evidence of Dr Purse, the only thing that Mr Ward has raised in relation to that is that Mr Purse has an axe to grind perhaps in relation to these issues. Dr Purse has spent a good part of his working life working in and around workers compensation schemes and also researching the operation of workers compensation schemes. At the end of all that time and research he remains critical of what has largely been an implicit acceptance of the evidence that supports step-downs.
PN4856
Mr Ward I think also said in submissions that Dr Purse holds Mr Shaw in high regard and that is mutual, in that Mr Shaw equally holds Dr Purse in high regard. I think that is all that we would need to rely on and we would say that the evidence of Dr Purse should be a considerable weight in these proceedings. There was an overarching criticism by ACCI about the union witnesses, both in relation to the lack of it and that some of it were enterprise agreement covered employees.
PN4857
The appropriate approach, in our view, to the evidence that s been mounted in this case by the unions is to look at the totality of the evidence before the Commission and whether, for example, it shows that employees who have received accident pay, be that under a modern award or an enterprise agreement, believe that it assisted them or, if I could put that another way, whether it mitigated some hardship. The evidence does that. The evidence shows that accident pay reduces the hardship on employees at difficult times.
PN4858
Once we may have been more reluctant to make this submission, but even with a heavy heart, it is what it is: union membership is not what it was. I m not going to labour the point and I m not suggesting that it excuses any parties in proceedings from providing evidence, but it is a reality that witnesses are not as accessible as what they once were, particularly in relation to these proceedings, because we don t need to go and find an employee who has accessed annual leave. We re looking for a very particular type of witness. The entitlement to accident pay only arises if you have an entitlement to it and the only way that arises if you have had or if you ve suffered a compensable injury. We support what Mr Maxwell said, that this doesn t demonstrate a lack of probative evidence.
PN4859
Just in final comments, 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. The employers have said, and rightly, that the onus rests on the unions to prosecute our case and we submit that is what we have done.
PN4860
I just want to very briefly come back to the decision, which was referred to, in relation to the Security Industry Award, which was referred to by the Australian Industry Group, 2015FWCFB620, and particularly paragraph eight, which says that:
PN4861
In order to found a case for an award variation, it is usually necessary to advance detailed evidence about the operation of the award, the impact of the current provisions on employers and employees covered by it, and the likely impact of the proposed change. These tests encompass many traditional merit considerations regarding proposed award variations.
PN4862
We submit the legislative framework is really no more complicated than that and that is the basis on which we have run our case. The complexity in this case doesn t arise from the legislative framework. Some of the complexity has arisen because of the number and the nature of the jurisdiction on the other objections that have been raised. But of course, the case itself has required us to traverse quite a lot of detail in understanding the way in which workers compensation schemes operate.
PN4863
Some of the complexity also rises because I think that these proceedings are quite novel in some ways in that we are both seeking to maintain what we say is a pre-existing entitlement, as well as extend this entitlement to more awards. This is not the same thing as saying that this is a new entitlement. It s not a new entitlement in the sense that the family violence clause is a new entitlement. This is an entitlement some people have had the benefit of for many years. Others had it once and it was removed, perhaps under Work Choices. Then they may have got it back again. Some may never had had the entitlements. Others probably wouldn t even know if they had the entitlement one, because they ve not been injured and needed to access it, but also because they may have been, at that time, covered by a scheme, which provided for 100 per cent pay and no step-down anyway.
PN4864
In relation to the question of critical mass, it is in this context that it arises. None of the unions are submitting that critical mass is strictly part of the statutory criteria, but it is relevant because it has never been a universal entitlement and so it is necessary that the Commission and that is why I set out what was set out in the Security Industry Award just before that we demonstrate particularly the impact of the current provisions on employers and employees and the likely impact of the proposed change. These are questions that go to merit.
PN4865
The obvious conclusion is that, where there is a pre-existing entitlement, there is less impact if the entitlement is retained. However, we submit that the unions have equally provided good evidence in support of the extension of these entitlements to workers who may have not had the entitlement previously. At the end of the day, this entitlement is not like annual leave, it is not like public holidays, it is contingent on an employee who suffers a compensable injury. Many employees may never access the entitlement and we hope that they don t.
PN4866
The question of critical mass otherwise goes to the historical context of the award, which is an important decision, which is something which was touched on in the preliminary decision. Of course, it goes to at least three of the modern awards objectives, including employment costs and regulatory burden, the stability of employment entitlements and, to a lesser extent, perhaps the national economy.
PN4867
The main thrust of the ACTU submissions, and what we ve done is to debunk perhaps some of the myth and mythology around step-downs, but the main thrust is really that the accident pay provisions have operated alongside workers compensation schemes for as long as 30 years and that there is no evidence that this has interfered or disturbed, nor to the determinant of return to work objectives.
PN4868
The arguments about interference and disturbance, I know that has been commented on previously, but I think that some of the arguments about interference are certainly exaggerated. The evidence has shown that, especially when you look at the practical application of accident pay, when you consider that it depends on the industry or it depends on the award, it depends on, for example, in ACT, Northern Territory, South Australia, Tasmania and under Comcare in jurisdictions where it provides for 100 per cent of pay in the first 26 weeks and in some of those cases, up to 52 weeks, the accident pay doesn t have much work to do. Accident pay will have more work to do in other jurisdictions.
PN4869
In some cases it depends on the pre-injury earnings of the employee and whether or not they re entitled to overtime and shift loadings. In Queensland it will depend on whether you are award covered or not award covered. In other instances, there are certain occupations who are totally excluded from step-downs anyway. The other comment is that the application of accident pay will also be tempered by the application of enterprise agreements that provide for accident pay. You can see you start to get a very complicated picture. The point that we make is the argument that it will disturb this careful balance, and we say that those should be given little weight because we say that that is an exaggeration of the practical application of accident pay.
PN4870
Modern awards are a minimum set of terms and conditions for those that are covered by them, however, as Mr Crawford said, the relevance doesn t stop there. We support the comments of Mr Crawford about the importance of award provisions in the context of bargaining. It is not enough to simply suggest that these matters can be left at the bargaining table and leave it at that. The awards are a floor of the standard terms and conditions that are relevant in any industry. It is irrelevant when you consider particularly the application of the boot and the removal of those entitlements lowers the floor for that purpose.
PN4871
The difficulty with any application which is as broad as these is that we need to deal with a number of very different industries. Bargaining, of course, in the stevedoring industry is different to the textile, clothing and footwear, which is different again to bargaining in the construction industries. Our industrial relations system has now, for so long, been centred around collective bargaining that where you find union members, you will probably find that they are covered by an enterprise agreement. But we say that the prevalence of collective bargaining in any industry shouldn t weigh against establishing a case in relation to a variation for an award. Unless there are any further questions, that is the submissions from the ACTU.
PN4872
JUSTICE BOULTON: The ACTU position is that if we are going to make any award provisions, we should make them in terms of ACTU three.
PN4873
MS STARR: Yes, your Honour. We ve discussed those with the affiliates. The approach that we ve carefully taken though is, of course, that the unions are still running their applications. However, we say that it would be a satisfactory outcome if the clause was adopted in the terms that we ve provided for in the ACTU three.
PN4874
JUSTICE BOULTON: Yes. Mr Ferguson, you want to have an opportunity of making some further submissions in relation to ACTU three.
PN4875
MR FERGUSON: In relation to ACTU three.
PN4876
JUSTICE BOULTON: Can you do that by the close of business next Tuesday, 2 June?
PN4877
MR FERGUSON: Is it too much indulgence to seek until the end of next week? I just know our diaries are always incredibly full.
PN4878
JUSTICE BOULTON: Close of business on Wednesday, 3 June.
PN4879
MR FERGUSON: Two additional issues to raise: Mr Maxwell, in his reply submissions, raised new points in response to the written material of AI Group in relation to the interpretation that interpretation that we take in three sections of the act. They weren t raised in his submissions-in-chief. He waited until it was the same issue that keeps arising in these proceedings. We say we have been prejudiced because we ve not been given an opportunity to respond to that material because of the tactic he adopted. The submissions were in relation to the proper interpretation of section 138 and our contention is about every term having to be necessary and what term means.
PN4880
Also, there were some specific arguments raised in relation to our interpretation of section 154 and also in relation to section 139, subsection two. We would seek an opportunity just to respond to those discrete arguments. We would ideally seek a longer time frame than 3 June, but at the very least, we d seek an opportunity to respond by the end of (indistinct) as well.It was new material that we haven t otherwise had an opportunity to reply to.
PN4881
JUSTICE BOULTON: We ve been having a debate about these provisions since October of last year.
PN4882
MR FERGUSON: And I was only going to raise that response to specific counterpoints that he raised, some of which he hasn t raised before. I wasn t going to use it to re-hash the things we ve already put.
PN4883
JUSTICE BOULTON: There isn t anything new about 138 is there?
PN4884
MR FERGUSON: There was a submission in regard to we were somehow suggesting that every word, if you will, almost has to be necessary to meet the modern award s objective. I think it comes down in part to consideration of what I can take you through the relevant sections, but obviously what we re saying is that each element of the clause, if you will, needs to be necessary in order to meet the modern award s objective. I think it has been put by the CFMEU that it would argue something different to that. That is the point I wanted to develop.
PN4885
JUSTICE BOULTON: And 154?
PN4886
MR FERGUSON: 154 there was arguments in relation to the weight that should be given to there were arguments about the fact that there were various other award provisions that would fall foul of 154. We would want to firstly (indistinct) the accuracy of those submissions that were put by the CFMEU, but also we d obviously make the submission that the fact that there are other provisions in an award that may fall foul of the legislative provision doesn t in any way mean that the interpretation we propose shouldn t be adopted. It may well just be that there are other provisions that also fall foul of the section. But as I said, I also want to go back and look at the relevant provisions. There were submissions about the apprentice provisions and other issues. We wanted to address that as well, your Honour.
PN4887
JUSTICE BOULTON: What was the other section?
PN4888
MR FERGUSON: 139(2). There were submissions. I m sorry, I don t recall exactly what they were, but it was responding to our submissions, which the CFMEU painted a picture of difficulty in ascertaining whether or not the entitlement properly fell within section 139(2). That s the provision that says, in essence, that an award, in terms of providing for an allowance, need to be identified separately and clearly within the modern award. We were obviously going to make submissions to the effect that the difficulty issue is not all that we re saying. We were going to the point that the allowance, if it is to be an allowance rather than just a generalised notion, needs to be set our clearly, identified in the award to meet that requirement. I was going to develop that.
PN4889
MS STARR: With respect, there s not really a chance to develop on an argument that you ve put in your written submissions. You ve made your submissions in relation to 154. I ve already suggested that they ve evolved. And now you want to change your position in 139 as well.
PN4890
MR FERGUSON: I wasn t going to change the position. I was just going to respond to the submissions of Mr Maxwell. If needs be, happy to do it in the same day. It wouldn t seem any prejudice to the other party from that. Obviously it came late.
PN4891
JUSTICE BOULTON: We ll be indulgent, given that they go to matters of jurisdiction, but we would not expect you to re-argue and to re-present all the material that has been presented and what has been said and what has been decided by this bench in relation to those matters.
PN4892
MR FERGUSON: I understand.
PN4893
JUSTICE BOULTON: It is not an opportunity to do all that. So if you could do that by the close of business next Wednesday as well.
PN4894
MR FERGUSON: Yes.
PN4895
JUSTICE BOULTON: If there is any response to that, then we should be notified of a request to put in such response by the close of business next Friday, tomorrow week.
PN4896
MR FERGUSON: The only thing and I m not asking for more time or a chance to respond is there was a suggestion put by the ACTU and I think there was something similar thrown up by Mr Maxwell as to possible redrafting of proposals in order to deal with any 154 issue that the bench may or may not find exists. We d simply say that if there was a proposal to redraft, any of the provisions from the bench, we d want to be heard in relation to that before it was adopted, if that were to occur.
PN4897
JUSTICE BOULTON: I m not aware of that.
PN4898
MS STARR: I was just going to say, the submissions weren t to the point that we were suggesting there should be an alternative provision. We were just simply, I think, in my case, pointing out why the section 154 argument is a nonsense.
PN4899
JUSTICE BOULTON: We re not expecting any more material on unions on that matter.
PN4900
MR FERGUSON: I have nothing further.
PN4901
JUSTICE BOULTON: Do you think we can go home?
PN4902
MR FERGUSON: I hope so.
PN4903
JUSTICE BOULTON: Thank you for all those submissions and the material. We will give careful consideration to all that you ve put and we ll publish our decision in due course.
ADJOURNED INDEFINITELY [6.03 PM]
LIST OF WITNESSES, EXHIBITS AND MFIs
EXHIBIT #ACCI4 WRITTEN SUBMISSION OF AUSTRALIAN RETAILERS ASSOCIATION............................................................................................................................... PN3920
EXHIBIT #HIA 1 WRITTEN SUBMISSIONS OF HIA DATED 25/03/2015 PN4146
EXHIBIT #MTA3 JOINT WRITTEN SUBMISSIONS OF THE MTA AND VACC FILED 25/03/2015............................................................................................................................... PN4168
EXHIBIT #PG1 LETTER FROM MERIDIAN LAWYERS DATED 25/03/2015 - WRITTEN SUBMISSIONS OF THE PHARMACY GUILD............................................ PN4196
EXHIBIT #PIA1 WRITTEN SUBMISSIONS OF PRINTING INDUSTRIES ASSOCIATION FILED 25/03/2015............................................................................................................. PN4218
EXHIBIT #CFMEU6 EXTRACT OF WORKPLACE RELATIONS AMENDMENT (WORK CHOICES) BILL 2005........................................................................................ PN4267
EXHIBIT #CFMEU7 FEATURE ARTICLE BY AUSTRALIAN BUREAU OF STATISTICS, JULY 2011....................................................................................................................... PN4273
EXHIBIT #CFMEU8 EMPLOYMENT MAP OF THE CFMEU................. PN4282
EXHIBIT #CFMEU9 EXTRACT OF AUSTRALIAN GOVERNMENT PUBLICATION PN4292
EXHIBIT #CFMEU10 CALCULATION OF OVERTIME HOURS AT WHICH ACCIDENT PAY CUTS OUT........................................................................................................... PN4303
EXHIBIT #CFMEU12 EXTRACTS FROM ASPECT QUEENSLAND PTY LTD AND CFMEU UNION COLLECTIVE AGREEMENT 2011 TO 2015................................. PN4389
EXHIBIT #CFMEU13 EXTRACT EXPLAINING THE OPERATION OF THE CIPQ SCHEME................................................................................................................................ PN4393
EXHIBIT #CFMEU14 2014 FINAL REPORT OF THE INDEPENDENT STATUTORY REVIEW OF THE WORKERS COMPENSATION ACT 2012..................................... PN4417
EXHIBIT #MUA10 INFORMATION PROVIDED BY SAFE WORK AUSTRALIA PN4702
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