B2016/1065, Transcript of Proceedings [2018] FWCTrans 148 (4 May 2018)

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PN436

VICE PRESIDENT CATANZARITI: Thank you, Mr Slevin.

PN437

MR SLEVIN: Yes. Just briefly, your Honours and Commissioner, I ask for your indulgence to address the table at the back of the written oral submission which is headed, "Table identifying inaccuracies within part 2 of the CPSU closing submission. We reviewed that. I think the table might better be titled, table identifying differences between the parties in relation to that. We don't resile from our submission. We don't see anything there that we would say is inaccurate and we maintain our position, and so I don't need to say anything further about that table.

PN438

VICE PRESIDENT CATANZARITI: When you say the word, "differences", that's your position - - -

PN439

MR SLEVIN: That's right.

PN440

VICE PRESIDENT CATANZARITI: As in, from an agreed re-badging the table?

PN441

MR SLEVIN: That's right. I don't say you should rebadge the table. That's the way we read it. We don't – so references are made in this table to other areas of the evidence that the Full Bench might consider on those topics. We've put the references in ours and we maintain the position we put in our submissions. There was nothing there we saw that we thought we'd overlooked something or done something wrong. So that's our approach to that table. In going through that exercise there were two matters that arose though. In our part B, in relation to the retention periods, and this is claim D52, dealing with the approach the Department wishes to take to redundancy. One of the aspects of that is the removal of retention periods in redundancy situations. The removal of those retention periods, we say, would disadvantage employees in that the current, or the claim made by the union or the current provisions of seven month retention periods are what you might call industry standard. There are three and four month periods in various agreements in the APS but the seven month period that occurs in, as we said, the majority of those agreements. So just in addition to the submissions we make in relation to redundancy, we say our retention periods reflect the broader APS standard.

PN442

VICE PRESIDENT CATANZARITI: So it would be your submission that we should, in doing our investigations, have regard to the broader public sector?

PN443

MR SLEVIN: In relation to that - - -

PN444

VICE PRESIDENT CATANZARITI: In relation to the clause. And bearing in mind, as panel (indistinct) I'm familiar with all the agreements in the public sector.

PN445

MR SLEVIN: We don't say that on all matters. We say what we say in our submission on various matters and - - -

PN446

VICE PRESIDENT CATANZARITI: In relation to this particular topic?

PN447

MR SLEVIN: Yes, in relation to that topic, yes. And yesterday I made reference to the national wage review and it seems that we haven't put the actual increases in our submission. They're publically known, of course, but just so it is clear in the submissions we make that you should have regard when considering the wages claim to various matters we say that one of those matters is the increases in the national wage review. The Full Bench decisions at FWC FB 3500, and that's the same notation for each of the years, in 2014 the increase was 3 per cent, in 2015 it was 2.5 per cent, in 2016 it was 2.4 per cent, in 2017 it was 3.3 per cent. So indeed the claim we're making is less than the increases afforded through the national wage review. We talk about the need for relativities. Professor Watts talks about that, as well, in his evidence. And they're the submissions of the CPSU.

PN448

VICE PRESIDENT CATANZARITI: Thank you. Mr Bakhaazi?

PN449

MR BAKHAAZI: Good morning, Commission. I don't know where to start here but I'll try to be as concise as possible. Whilst one party to these proceedings has been labelled as cherry pickers, the other has been labelled as (indistinct). (Indistinct) would like to think of the remaining parties as the green grass in these proceedings with the permission of my learned colleagues on the left-hand side of the table. The ESU submits that the Commission ought to adopt a sensible approach and make a determination on a pay rise before the next federal budget. I am making this submission not knowing what the instructions are to my learned colleague as to what was put yesterday by the Commission, whether you would like him to deal with that now or later?

PN450

VICE PRESIDENT CATANZARITI: If it's going to shorten your oral submission then I'm happy to hear from Mr O'Grady on that point.

PN451

MR BAKHAAZI: It will definitely shorten my submission.

PN452

VICE PRESIDENT CATANZARITI: All right, well, Mr O'Grady?

PN453

MR O'GRADY: Certainly, sir. The position of the Department in relation to the proposition that you put just before lunch time yesterday is this. The Department of Home Affairs maintains the submissions that it has made in relation to the final work place determination and its submissions in relation to the interim workplace determination application. But if the Full Bench can see a way through to make a workplace determination at the earliest possible stage then the Department is all for that.

PN454

VICE PRESIDENT CATANZARITI: Thank you.

PN455

MR BAKHAAZI: I suspected that might be the case. We are in favour of - - -

PN456

COMMISSIONER JOHNS: That's not clear to me, Mr O'Grady. As I understood what the Vice President was exploring yesterday was not an interim decision but a part decision, so a definite decision in relation to - - -

PN457

MR O'GRADY: And that's our proposition.

PN458

COMMISSIONER JOHNS: Right.

PN459

MR O'GRADY: If the Full Bench can see a way through to make a workplace determination in a way that conforms with the Act at the earliest possible stage - - -

PN460

COMMISSIONER JOHNS: Right, I understand. I understand.

PN461

MR O'GRADY: Then we are all for it, yes.

PN462

COMMISSIONER JOHNS: Thank you.

PN463

MR O'GRADY: I'm sorry, Commissioner.

PN464

COMMISSIONER JOHNS: No, no, I'm assisted. Thank you.

PN465

MR BAKHAAZI: I thank my learned colleague for those comments. That's certainly the (indistinct) position, we'd like to see that be made at the earliest possible opportunity. And given that I suppose one could say there's no agreement the Commission has those (indistinct) and can do so. And it may make it easier for the going concern if this decision as to the pay rise can be made before the main budget. And given what has been said about back pay and whatnot, and if the Commission were of a mind not to determine back pay in favour of the employees then they should take into account the lack of (indistinct) in this case and be bold and make a decision that it's fair and reasonable in the circumstances. And under section 577 you can be fair and just and make a quick and informed decision, be open to transparency and make it harmonious in corporate workplace relations.

PN466

Now promoting those sort of things, given the fact we have no four different entities to be governed by one workplace determination and hopefully there will be – each one of those entity was its on section like the (indistinct) union it has, one would think a decision as to pay rise at the earliest possible opportunity would be one that was consistent with the balance of convenience, making the necessary major increased order as soon as practicable. I suppose from hereon I will leave it in the hands of the Commission to make that determination.

PN467

As the instrument – we'll confine this oral submission to part 10, there are conditions specific to (indistinct) employees. The issue however, it is duty bound to its members to address the Commission on such matters that will affect its members, and I'll be brief here, such as recovery of available(?) payment, which was dealt with yesterday which I will deal with shortly, but I'll leave the performance management in the capable hands of my learned colleague, Elizabeth Ryan, who's had a fair bit of experience given her witness statement in this area. She has done a - - -

PN468

VICE PRESIDENT CATANZARITI: You're supporting her submissions in relation to that topic?

PN469

MR BAKHAAZI: I am.

PN470

VICE PRESIDENT CATANZARITI: Yes.

PN471

MR BAKHAAZI: I'll leave it at that. The recovery of overpayment. Now it is, you're aware, addressed this day by Mr O'Grady as to sections 323 to 326. Now sections 323 definitely says an employee should be paid their wages in full, and that's what it says. Now you go on to sections 324, further on, it talks about there are exceptions. But generally speaking those exceptions are with – you would need an agreement or unless there's an enterprise agreement already in force and whatnot, and Mr O'Grady addressed you on those. But it has to be to the benefit of the employee. Now I cannot see (indistinct) submit that 20 per cent, and it's always been the case with the Department, that 20 per cent to be deducted fortnightly – we don't even know whether it's gross or net, but 20 per cent with that is unreasonable, and it cannot be to the benefit of the employee.

PN472

VICE PRESIDENT CATANZARITI: Do you say, for example, the Departments who will make it five per cent or ten per cent, it makes a different to your argument?

PN473

MR BAKHAAZI: It's an interesting question, yes, your Honour. I submit that if you look at the Act, even if you had an agreement and even if it was five per cent or whatever, this is subject to variation and it depends on the employee's financial position. And that's why the legislatures left it to the courts to determine this if the parties cannot come to an agreement. But certainly 20 per cent is harsh and unreasonable. If it was five per cent it may not be but it is still subject to the laws of the land because first and foremost the Department would have to prove its case. Secondly, there has to be evidence as to whether the employee can make those repayments. And certainly the institute is not making the submission that those payments should not be made and the Department should not be able to recover. That's not what we're saying. What we're saying, it's got to be fair and reasonable. And certainly 20 per cent is not. Five per cent, you might be working towards a more reasonable sort of position. But that, again, I can't speak on every employee of the Department. I can only speak in relation to my members, knowing what their pay salaries are. But there are certainly other employees of the Department who are on less generous salaries, and that five per cent may be too harsh and unreasonable. That's my submission in relation to the recovery of overpayments.

PN474

If I move on now to ballot 2 and ballot 3. Now they're relevant in relation to these proceedings because in both ballots the Department agreed to the 191 days for leave in the marine union sector, as opposite 195. That is significant. I meant there was a fair bit of work, fair bit of negotiation that went into that sector and many clauses have been amended or rewritten to appease the Department. Now we say we negotiated in good faith, we met the requirements of section 275 from go to whoa. And as such we should be given the benefit of having the 191 days in the determination, as we say it was not agreed once but it was agreed twice. And for the Department to bring that new workplace determination at the eleventh hour is certainly a backward step in these negotiations. We say that doesn't meet the requirement or the Act and nor is it in the spirit of the Act. It's not in the spirit of the Act to go backwards and so having these negotiations, now being over a period of four years, and the last EO(?) expired in June of 2014, so you know, it's a fair bit of work went into this area and we thought the negotiation was settled in relation to it. We were disappointed and certainly our members were, to see that the Department has reneged on that agreement of 191 days.

PN475

We also talked about in our position about referencing the marine orders, 28. We say that's relevant because unfortunately the Department managers in the marine union don't seem to last very long. Over the period of two years they've had about four different managers. And most of them were not aware of the existence of the Australian Maritime Safety Authority which is, in short, AMSA. Now I've had many dealings with them, trying to get them to understand that area of the law because most of the managers come from a non-marine background which makes it very difficult to understand working hours and whatnot, and leave days. And for that point of view Marine Order 28 ought to be referenced. It has always been referenced. It is referenced in many agreements in the marine sector for a reason.

PN476

I note in the Department file and submissions that no other party takes issue with the satisfaction of the BOOT test. Well, I've done all I could in relation to the marine unit by indicating how it could affect certain individuals in that sector and they could lose an amount, some up to $11,000 and others, up to about seven and a half thousand, and this might (indistinct) closing submission.

PN477

In relation to where could the Commission go from here, the (indistinct) notes and relies on the submission that perhaps the best way is to determine a pay rise and then have each one of those four Departments have their own, I don't know if you want to call it section, as part of the determination or do you want to call them separate EA's. It doesn't matter, as long as their status quo is intact so that going forward this – the Department of Home Affairs has not settled. We don't know where it's going. With an election probably due next year there could be more changes. Who knows, but I don't have a magic wand. But what we do say is that probably it is – given the circumstances and nature of these proceedings and the level of determination that have to be issued by the minister, and one by the Department and I'll get to the second one in a minute, which relates to the Ocean View vessel, it's about the classification of the engineers and the ETO's – the secretary, Mike Vasoula(?) had to issue a section 24 determination in order to protect the wages and conditions of those (indistinct) and that is in evidence. I don't recall what number was given but it certainly went into evidence. And it certainly shows that even from the Department point of view they regarded the condition should be maintained. Now you've got to be very careful not to reclassify and at the same times as the termination falls apart because there will be unintended consequences. People will lose a significant amount of money. It's there for a reason and that's why secretary Vasoula made that determination in January. There's a reason for it.

PN478

In relation to the economic data I can only repeat what my colleague, Tony Slevin, has indicated about those increases. I had it in my notes to refer to the national wage review and I think those figures that is given are relevant in your determination. And it's a national wage review and you should take a good hard look at that, despite what the parties have or whether it's two per cent or two and a half per cent. This is very, very relevant facts and this should be taken into account in your determination. As for the leave ratio which I was going to come back to you will see from Mr – witness, Christopher Regan, for instance, there's two agreements there, or three or four agreements you can have a look at, whereas actually the leave ratio is one for one. And those agreements are there. So the Department in 191 days is still getting a good deal there. And in my summation I wish you all the best and thank you for all your indulgences in this matter and I hope to hear from you about a decision concerning a pay rise, as soon as possible. Thank you.

PN479

VICE PRESIDENT CATANZARITI: Mr Bakhaazi. Ms Ryan?

PN480

MS RYAN: My written closing submissions deal with a range of matters in issue. These oral submissions will largely address the two key issues I have prosecuted during these proceedings. That is, front loading of salaries and dealing with the issue of pay parity. And I also, in this respect I also look at the implications of the respective second MOG cohort. The other issue is performance management which I think everybody knows, is a bit of a baby of mine. In covering the performance management issues I will also deal with the issues that were raised by my learned colleague, Mr O'Grady and I'll also go to some matters that are raised in the Department's written oral submissions.

PN481

First I'd like to – the starting point that I'd like to look at first is in relation to what should be the starting point, which is then central to the parties' positions. The two main parties have adopted quite contrasting interpretations and application of case law in this respect, whether or not presumptive primacy should be given to pre-existing entitlements. Both parties reflect on this and while either proposition is arguably open I concur with the position adopted by the CPSU and the relevant authorities in which they rely. Using existing terms and conditions as a starting point is an approach supported by those authorities, notwithstanding the conditions of the existing enterprise agreements and not one of the matters specified in section 275 of the Fair Work Act.

PN482

It may well be accepted that they may be relevant to the interests of employees who will be covered by a determination under section 275(c). It is clear in the Department's workplace determination as drafted that the Department has adopted a significantly different approach which was openly admitted in cross-examination that in crafting the WD the Department sought to include preferred propositions it was previously willing to concede during the bargaining process which now, given the industrial instrument is the subject of a determination by your Honours, the Department no longer prosecute those positions.

PN483

Given that this organisation has gone through two MOG's, and I'll refer to them as MOG1 and MOG2 for ease, the first MOG saw the integration of the former customs organisation, ACPPS, and the Department of Immigration and Citizenship, DIAC. The approach that the Department took at that point in time was to preserve the entitlements in section 24 determinations in relation to the terms and conditions that were previously enjoyed by those employees, if not in full, to a large extent. However when it came to the – and those determinations remain in force today. However with respect to the second MOG cohort the Department adopted a significantly different approach. It only preserved certain terms and conditions in relation to employees that covered across four organisations for a very, very short period, less than two months, from 20 December to 7 February. As of 8 February they lost their entitlements.

PN484

If we look back, and this in my written submissions I refer to the 2013 PM&C MOG in which the PM&C retained reference to certain provisions in relation to nine other agencies that were MOGed into that organisation, and today they still maintain a range of preservation of conditions of former entities that have been MOGed into that organisation which in their most recent enterprise agreement 2013 - - -

PN485

VICE PRESIDENT CATANZARITI: That's paragraph 17 of your written submissions.

PN486

MS RYAN: Thank you. So in this context it is open to the organisation, to the Department to have maintained that and I respectfully submit to your Honours that it would be open for the – I urge you to take that into consideration in crafting a determination in respect to employees, the vast array of employees that have come into this organisation or make up this organisation from arguably six entities. Now as (indistinct) ACBPS, DIAC, employees from DIRD(?), from PM&C, and the FS and AGB.

PN487

In terms of using existing conditions as a starting point I'm not advocating the need for either party to positively demonstrate a case for change (indistinct) that rather, in considering the relevance of these existing terms and conditions a common sense approach should be taken as to whether or not it is appropriate to be maintained in the current form and revised but maintained or removed from the industrial (indistinct) as it is no longer operative or applicable to employees in the current work environment. By maintaining those terms and conditions as PMSE has done in respect of entities from agencies that have been MOGed in, it fulfils the requirements of the Act, it allows for further bargaining for continue, and hopefully it will make your job a little easier.

PN488

The other factor that I would like to look at before going it into the particulars, the particular issues that I've prosecuted throughout these proceedings is in relation to the relevance of ballot 3. As my learned colleague, Mr Bakhaazi has stated that it has been – it seems curious why the Department would resile from a position that it was willing to accept at ballot 3, to something that is what arguably is now, a very bare bones approach. The Department in the – in evidence Mr Leonard explained why the Department departed – why the WD departed from the third ballot proposal. The earlier drafts were prepared in an attempt to reach agreements with the workforce. They included elements that we support - - -

PN489

VICE PRESIDENT CATANZARITI: It's paragraph 41 of your written submissions. We can read the paragraph.

PN490

MS RYAN: Thank you. The Department started that they removed the things that were desirable to employees and replaced them with things that were desirable to the Department. That's – I refer to PN, that's at PN2694 to 2797 of the transcript. I urge your Honours to take the ballot 3 into account in terms of the positions that the parties have reached some agreement on, noting that it is open to this Bench to make a decision as to what is appropriate in the context of the evidence that's been given in these proceedings and the environment in which we find ourselves.

PN491

Before I go to the two matters in particular I would like to address the points raised by the Department in their oral proceedings, written submissions – closing submissions at page 20, in paragraphs 68 to 70.

PN492

VICE PRESIDENT CATANZARITI: Yes, we have that, Ms Ryan.

PN493

MS RYAN: No worries. I'd just like to qualify the statement that's made at paragraph 67 in that it states that I accept the proposed workplace determination as being prepared in plain English and meets the preference for a three year term. In respect of the three year term I have always maintained that as a minimum of two years. We don't want to really be back here before then and I'm sure you don't want to see us either. But in respect to the workplace determined as being in plain English, if I can go to paragraph 30 of my closing submissions, written submissions, what I do say there is that it provides a succinct document. The content of what I state there, for want to making it clearer, is that the workplace determination in structure that the Department - - -

PN494

VICE PRESIDENT CATANZARITI: I don't think Mr O'Grady is suggesting that you're agreeing to the content. He's simply saying that they drafted something in plain English and you made that concession.

PN495

MS RYAN: I don't necessarily, with respect, state that it is plain English.

PN496

VICE PRESIDENT CATANZARITI: Well, I'm sure he wouldn't be saying they're accepting the content of it.

PN497

MR O'GRADY: No, we're not, sir. We're just picking up the fact – we're looking at all the support we can for our plain English approach to the drafting of what's a significant document.

PN498

MS RYAN: Okay, that's what I wanted to – just want to clarify, that there are complainants in there, notwithstanding whether I agree with the actual proposition or not, that some of the content of that, or the particular operation of the provision will actually turn on the language that's used in it. And I can go to one thing where I don't think it is plain English in terms of – I think it's at 4 point - - -

PN499

VICE PRESIDENT CATANZARITI: You should rest assured, Ms Ryan, that plain English drafting is not the basis of picking one determination over another. It's substance, not - - -

PN500

MS RYAN: Yes.

PN501

VICE PRESIDENT CATANZARITI: Simply because the Department drafts something in plain English, allegedly, and the CPSU drafts something not in plain English, that's not the basis upon which we choose a course.

PN502

MS RYAN: Thank you. Okay, I'll move on. I agree with the statement that they've made at paragraph 68. In respect to paragraph 69 we'll go to the front loading comments that I will make shortly. With respect to the performance management I'd like to clarify that one, the statements that are made there. My witness statement and the evidence does reflect the statutory framework as provided by the Public Service Act and the Australian Public Service Commissioner's directions 2016, and I make clear the reference to the employment principles at section 10(a) and the requirements for effective performance at section 39 of the Australian Public Service Commissioner's directions. But this does not, in my view, provide a rationale for the removal of clear employee rights and entitlements in its policy which I will discuss in more detail as we go forward.

PN503

So if I can go to front loading and pay parity, front loading and salary increases has been a common occurrence across the APS in the most recent round of negotiations and will be consistent with the workplace bargaining policy. As such the Department is was precluded by the statutory regime from doing so and neither is the Commission. Front loading and salary increases is clearly supported by both of the APSE and by the Commission with several EA's approved under the current workplace – 2015 Workplace Bargaining policy which my learned colleague has made clear that there is – in his closing submission yesterday that there is minimal changes to that. As such there is clear evidence in already proved EA's supporting a front loading proposal as I have put out in the form of I321, if it is three year workplace determination, or 4/2 if it's a two year, or such other combination of front loadings as your Honours choose to provide.

PN504

A proposed front loading increase, in consideration of pay parity where possible, lifting the base salary for some classification levels other than those outlying salary maximums such as, with all due respect, the former Customs EL2. If you look at the spread of salary (indistinct) across the six entities that now will come within the scope of this workplace determination, the disparity across is significant and when you compare that against the proposed salary (indistinct) as proposed in the Department's workplace determination there is a significant disparity and it's hard to see how you would actually establish a unified workforce when you do have that ongoing disparity, and I cannot see – it just doesn't seem to stack up that the workplace determination is currently drafted by the Department in terms of the salary structure affords that. I recognise that the actual quantum can be fiscally constrained to some extent, however the Department's approach in terms of adopting the government's return to – fiscal strategy to return the budget to surplus does not necessarily, in my view, need to apply to the organisation. There is no requirement for the Department to adopt that approach. I do apologise.

PN505

I can't remember the reference in terms of Mr Groves' evidence but if my memory serves me correct, and I'm sure my learned colleagues will correct me, but during the time that the Department has maintained a liability for salary increases at the 1.5 per cent, if my memory serves me correctly the evidence-in-chief was that – in cross-examination was that money had been spent that had been reserved on additional employees across that period of time. I find it curious that – and I think it was raised in closing - - -

PN506

VICE PRESIDENT CATANZARITI: I think it is common ground that money was spent.

PN507

MS RYAN: Yes.

PN508

VICE PRESIDENT CATANZARITI: So it wasn't sort of put away for a rainy day, it's actually no longer there.

PN509

MS RYAN: Correct.

PN510

VICE PRESIDENT CATANZARITI: And including recruiting additional staff which, you know, in the future, may have to go.

PN511

MS RYAN: Correct. Thank you. I find it curious, and I think it was stated yesterday, and I'm sure the transcripts will correct me if I'm wrong, that there was no contingency plan to set aside any monies for salary increases. I find that amazing that any business entity would contemplate such an action. But I'll move on.

PN512

I note the Department's comments in closing submissions at – their written oral submissions at paragraph 202 that the lack of pay rise has not been the case for all employees, which would be true if they had not achieved a promotion or had become eligible for an allowance as a result of change in role. It is unlikely given that 80 per cent of the workforce are at the top of the range of the classification level that the majority of the workforce would receive an increase in salary arising from any salary point advancement going forward. As such a mechanism to achieve pay parity and provide a fair set of employment terms and conditions is required for the Department to realise its desired outcome of the (indistinct) workforce which the Department in evidence makes clear is critical for the organisation, going forward. I acknowledge that red-circling some of the salary will go towards achieving that pay parity, however unpalatable it may be to that cohort of employees, which in my view shouldn't be the lowest paid classifications. Lifting base salaries under the DIAC is needed to bridge the ever growing gap in salary parity within the organisation and across a broader APS. To this end I urge the Commission to adopt a front loaded salary increase and consider salary pay parity approaches adopted by other agencies as an alternative to the back pay proposition.

PN513

I now turn to the performance management aspects. Yesterday the Department raised a number of issues in relation to Mr Venugopal's and Mr Leonard's evidence in respect of the performance management provision set out in the Department's workplace determination and asserted a number of matters in their oral submissions and asserted a number of matters in their written oral and outline closing submissions. The first issue being the suggestion that the Department is seeking to remove the Commission's jurisdiction in relation to issues arising during performance management procedures, paragraph 57 of the Department oral outline. The Department's response is that adequate protections are available to employees in their workplace determination when taken in combination with policies in the existing statutory regime. However what this fails to address is that in moving employee entitlements and rights previously provided for in the DIAC inter-policy and providing a more streamline and flexible approach, those adequate protections are diluted as a matter of policy no longer being enforceable and as such there is a clear diminution of employee protection in removing the ability from an employee bringing a matter before the Commission and it should not be dismissed so lightly. I cannot accept that the process available to the parties is a fair and balanced one as provided by the Department in their workplace determination.

PN514

The evidence of Mr Venugopal was raised on these issues and the Department sought to clarify Mr Venugopal's evidence in respect to the removal of a right, him having not had the opportunity to explain his position. While I accept that that is the case his response before matters moved on, the Department cannot step into the shoes and give evidence on his behalf in closing submissions. That said, the explanation provided by the Department at paragraph 62 of the submissions is unconvincing. The evidence is clear that rather than employee rights entitlements and tried in an industrial instrument leading to the reluctance or hesitation or fear of managers in conducting performance review process, it is the deficiencies and (indistinct) of the performance management process themselves and/or the lack of capability of managers themselves to perform effectively in managing employee performance.

PN515

The evidence given by Mr Venugopal is clear at paragraph 99 of his witness statements which was the subject of much discussion in these proceedings, that the current performance management assessment mechanisms are inefficient. To save time I will refer and ask your Honours to look at the broad cross-examination, the extent of the cross-examination of Mr Venugopal in terms of the statements that were made and the evidence that was given at PN2024, 2027, 2035, 2053, 2055, to 2056, 2063 to 2066. From that you can see that the intention of the Department is clear that the proposed changes to the content of the performance management provisions is to provide management with the ability to approach performance management in a flexible manner. And the Department relies on the ability of an employee to seek review of decisions internally or through review procedures under the Public Service Act. I accept that it is the Department's right to do so, however it is clear from the evidence that changes to do so whereby there is effectively a headline in the workplace determination with the rest in policy and legislation requires the employee to understand the complex regime of a range of documents rather than supported rationale for such action being that the workplace determination seeks to be a clear and concise document that provides substantive terms and conditions.

PN516

I urge the Commission not to adopt the Department's proposed part 6 in respect to performance management but rather that which I have provided at attachment E(6) of my witness statement, exhibit RN1 affording the Department the necessary flexibility and employees' reasonable protection and does not constrain the Department in conducting its business and the effective management of performance. Any further work to ensure compliance within an efficient performance management framework lies in enhancing management capability and compliance as they too, being an employee, are required to perform effectively, which would include the effective management of performance. I go back to the assertion that the performance management – sorry, in the written closing submission at tab 2, page 64, paragraphs 262 to 271 the Department asserts that performance management is already regulated by a separate statutory regime. That is not disputed and it's not disputed that the Department is required to have in place a performance management framework, specifically section 10(a)(1)(d) requiring effective performance from each employee. Nor is it disputed that section 39 of the Australian Public Service Commission section sets out a framework for achieving effective performance in performance management policies and processes that support a culture of high performance, performance by employees in effective managing performance and fair and effective measures to address under-performance, as a summary, in summary.

PN517

To this end the Department points to its suites of policies with mechanisms for achieving this as opposed to enshrining these rights, entitlements and obligations in the workplace determination. The Department's reason for doing so is that removing (indistinct) procedure content from the industry (indistinct) as a streamlining exercise although the intent of the Department management changed as the content is simply contained in policy. In doing so the employer has removed key content which goes to existing rights and it's not clear how. And the evidence is clear in the evidence of Mr Leonard at PN3705 to PN3706 that the purpose for removing the content was other than aspirational and Mr Leonard could not provide any further reasons as to why the content had been removed.

PN518

There was much discussion yesterday in relation to the removal of the Commission's jurisdiction. The evidence is clear that given in these proceedings that these clauses have been stripped back so as not to leave everyone exposed as a an additional element of exposure through an arbitrating instrument from the Commission, Mr Venugopal's evidence confirms that the intention for doing so and putting it in place was clear and deliberate so as to remove the ability to seek redress to the Commission, PN2065, although there are few matters, and this was in relation to the number of matters that were brought and I refer your Honours to PN3731 and PN3732 of the transcript for that information. The Department seeks to justify its approach at paragraph 270 of its closing submissions that an obligation on an employee is to comply with Home Affairs performance management and a right to commence under performance processes are justifiable on the merits given that they can be seen as a mechanism ensuring that employees participate constructively in performance management processes. It is not disputed that the Department has a clear obligation to do so, to effectively manage employee performance. However the Department's approach to achieve this is not supported by the evidence and my respectful submission is that the Department's arguments are flawed.

PN519

The proposed clauses in the draft workplace served to undermine the effective and efficient performance management the Department sees as a key to having a high performing workforce that is flexible, agile and adaptive in meeting organisational goals. The clauses of the workplace determination do nothing to promote trust and confidence in the relationship between the employee and employer, and central to a harmonious and productive workplace. The clauses lack certainty and clarity and as such are not meaningful. In particular, clause 6.4, I argue that it has no work to do and provides not capacity for an employee to raise a dispute, which I've already addressed.

PN520

Finally, the provisions in the workplace determination mine succinct are not a clear and concise set of employment conditions in terms of performance management. For an employee to understand how the performance management frame works, what rights if any, they have, and what obligations they have, they need to go to the workplace determination, the policies, an array of legislations. It is difficult to understand how this provides an employee with an easy to understand, single document that provides their employment terms and conditions. If you take out a right or entitlement it is no longer there. It's in policy which is unenforceable. Therefore the workplace determination cannot be a concise set of employment terms and conditions that's fair, transparent and reasonable. Part 6, performance management, as drafted in the workplace determination to be retained in the workplace determination to be made by the Commission would not be consistent with the Commission's obligations in providing a balanced framework that is fair to employees and flexible to employers, promoting productivity, respect and values, workforce diversity, and prevents and eliminates discrimination. The workplace determination to be made by your Honours should ensure that enforceable conditions are not undermined by the making of individual employment agreements, assist employees to balance work and family responsibilities, ensure fairness and representation at work, recognising the right to be represented, providing accessible and effective procedures to resolve grievances and disputes. The evidence supports the outcomes I seek in respect to the proposed performance management clauses. They afford streamline provisions providing a workplace determination that is drafted in plain English, clear and succinct with unnecessary processes and actual content removed and I am sure that your Honours, if you do find anything there, will correct it. Those are the submissions. Thank you, your Honour.

PN521

VICE PRESIDENT CATANZARITI: Thank you, Ms Ryan. Mr Holmes? Just make sure you are close to the microphone. Maybe if you swap with Mr Ryan, it might be easier.

PN522

MR HOLMES: That's plenty.

PN523

VICE PRESIDENT CATANZARITI: Is it?

PN524

MR HOLMES: Yes. We are all familiar with the singer/songwriter, Paul Simon. He wrote protest songs and set them to tunes that people found inspirational. As he got older he decided to experiment and lost many fans along the way. The Department employed their own Paul Simon duo to sing the songs that would change the way we view the world. Rather than singe form the early inspirational songbook they decided to cover the songs of more lacklustre writers, songs that history will consign to obscurity. As a consequence none of these have walked away from these deliberations filled with elation. Where were the life-changing lyrics imbibing is with a sense of purpose to embrace the new world order?

PN525

Let's look at one of the songs they sang, Flexibility & Agility. I must admit that it's a catchy chorus with only three words to remember. But where are the verses that give it context, the verses that explain what the refrain really mean? The Department's experts quoted this three word mantra as well but didn't seek to explain the finer details of how this mantra translates in the real world, away from academic concepts. All that has been put forward before the Commission is that if the status quo remains then the Department cannot achieve a flexible and agile workforce. Hm. Scary prospect, isn't it? If we don't get rid of provisions that allow affected employees to seek recourse to the Fair Work Commission then we will never achieve the holy grail of an agile workforce.

PN526

At the same time the Department talked about the success of its mobile employment force. This is a small group that can be deployed to a location outside their normal workplace at short notice. They are also trained across multiple fields of expertise rather than specialising in one specific skillset. This group has been developed and implemented since the standing up of the Australian Border Force, or to put it another way, this group that exemplifies the Department's example of flexible and agile has successfully been implemented under the very guidelines the Department claims are constraints stopping them from implementing such a group. Maybe this is just one small example, one management trial that somehow slipped through the union's tapestry of constraints. Home Affairs has 15,000 employees, after all, and they all need to be flexible and agile.

PN527

Once again I return to the substance of the mantra. What exactly does it mean? If employees have to be flexible and agile for an organisation to be more efficient then the logical conclusion is that the organisation is the sole beneficiary. The manner in which is has been invoked implies that employees need to change their work behaviour so the organisation can be more efficient. As the concept has never really been fully explained to staff in a manner that provides real life examples I went to the internet to try and gain some understanding of the business concept. To my utter amazement I found that different groups have different interpretations of what the concept means.

PN528

The UK Government, www.gov.uk, defines "flexible working", as a way of working that suits employees' needs, such as flex time or working from home. The UK Government goes on to say that if an employer doesn't respond to an employee's request in a reasonable manner the employee can go to an employment Tribunal, something they are trying to stop. The British Computer Society defines "agility" as, "A way of working in which the organisation empowers its people to work where, when and how they choose, with maximum flexibility and minimum constraints to optimise their performance and to do their best work."

PN529

The wording of this definition aligns very closely with how the Department has represented its vision of an agile workforce, "maximum flexibility and minimum constraints", so maybe we're onto something here. There is, however, one stark difference. The British Computer Society uses the term, "empower", whereas the intent portrayed by the Department's claims appears to be more about "imposing." I am not for one minute trying to suggest that flexibility and agility should reside on the domain of the employee benefit. I am merely pointing out that the term can mean whatever you want it to mean. So when the Department states that policies shouldn't be linked to any determination because that would impose constraints on achieving a flexible and agile workforce, then the argument becomes meaningless if there are multiple conflicting definitions for the term. I think that has been covered in other arguments.

PN530

Public interest – in paragraph 37 the Department argues that it needs to increase productivity and reduce its labour costs. The only way to reduce labour costs is to either reduce the salaries of the current employees or allow the workforce to shrink. That's just simple logic. Their submission states, employees haven't achieved productivity increases in the last four years. The Department also proposes to give most but not all of its workforce a two per cent pay rise. They have also stated they have no funds to pay for this two per cent pay rise. None of this makes sense. It just contradicts itself. You are going to give a pay rise but you don't have the money for it, and you want to reduce your costs.

PN531

There is a comment that labour costs account for more than 50 per cent of all costs. What does this mean? Is there legislation preventing this? Is there an economic theorem that can be applied to each business model that calculates the optimal employee to supplier to capital cost ratio? If there is, why isn't Home Affairs optimal ratio quoted for comparison purposes? If not, why mention it? It's a distraction to insinuate a negative notion into the minds of the Commission. In paragraphs 65 and 68 the Department makes reference to the public interest of the government maintaining its current strategy of fiscal restraint. Whilst it is true the government claims to have an historical advantage to economic management the Department's extrapolation that the government is currently showing fiscal restraint is surely made a satire. The government has been trying unsuccessfully to shed 65 billion from future revenues by lowering company taxes and now it is signalling it intends to lower personal income taxes in less than a month. It is pursuing these policies at a time when the budget deficit is significantly higher than when they termed it an "emergency."

PN532

Only a matter of a few weeks ago the government released a policy that it was considering a $5 charge on all small parcels to cover the cost of examining them all. It pointed to increased volumes and implied that this meant increased examination costs. Internally the Department uses risk assessment to target imports for examination. So the reality is that examination costs probably won't rise in line with increased volumes. The Department will allocate resources as determined by intelligence analysis. I was at Sydney Airport just last week to witness a passenger allocation. The number of barriers allocated to examining passengers has decreased dramatically since I last worked there 22 years ago. The other thing to note is that by sheer coincidence the amount that was budgeted to be raised on the $5 parcel tax just happens to coincide with a two per cent pay rise across the board. This seems to have gone unnoticed by everyone. It appears at paragraph 19 of the 2018 bargaining framework. "Prohibiting fees and charges, funding pay rises is not as set in stone as it outwardly appears to be."

PN533

Pre-existing conditions. The Department has stated that the conditions and entitlements formally applicable to the 6000 staff moved into immigration are irrelevant. I would like to address that concept by posing a hypothetical. Let's say that Immigration had a policy to pay aboriginals and women less money than a white man for doing the same job. Let's assume Customs was progressive and paid everyone equally. Would we argue that the entitlements aborigines and women enjoyed in Customs were now irrelevant because they were working for Immigration? It seems like an obvious answer but I will leave that unanswered for the time being.

PN534

Let's return to the 2018 bargaining framework. Point 49 states that conditions are not to be enhanced. Point 23 states that pay scales can't be generally modified. And point 21 restricts pay rises to two per cent. These bargaining restrictions mean that anyone currently working for home affairs can never be paid the same as someone performing a comparable role in the ATO, or a comparable role in the Department of Finance or a number of other Departments. So in 2018 we have a policy that is designed to entrench inequality. The various MOGs conducted by the government by and large removed pay scales and conditions for those being merged. So not only do we have a bargaining framework that entrenches inequality, we also have a system that seeks to expand the pool of those who are discriminated against in the Australian Commonwealth Public Service. The argument that customs officers are overpaid and need to be frozen until immigration officers catch up is signed by Paul Vermeecsh. Let's ask another hypothetical question. Does Mr Vermeecsh actually believe the voracity of the argument he has signed his name to? Let's say a portion of the ATS was merged into Home Affairs. Mr Vermeecsh was part of the cohort that was forcibly moved. He would then be classified as overpaid and have his salary frozen for a number of years, while his current compatriots at the AGS would enjoy continuing pay rises. In this circumstance can we honestly believe that Mr Vermeecsh would embrace his pay freeze as the right course of events?

PN535

Bargaining framework. In paragraph 44 the Department mentions that many agreements are being made in accordance with the bargaining framework. Lawyers love to isolate an argument, seek a black or white answer to a singular question and then use that answer to draw conclusions that benefit their own argument. This paragraph is a classic example of lawyer subterfuge. The statement that many agreements deemed to comply with the bargaining framework have been voted up is correct.

PN536

The entire intention of this paragraph is to try convey some subliminal message that because these agreements were voted up and they complied with the bargaining framework there therefore must be no inherent problem with the complicit framework though the figures supplied by the Department tend to support the exact opposite of what they're arguing. Only 38 agreements had been voted up by March 2016. This is 20 months after all agreements had expired. The delay in employees agreeing to terms set by the Abbott/Turnbull government is unprecedented in modern Australia. The following 100 agreements voted up are more the result of attrition rather than employees voting for something they believe to be fair and reflective of their contribution. Many people, if held prisoner for long enough, will eventually agree to the terms of their captors in return for some form of freedom. The Department is trying to imply that Immigration, as it was then known, was being unreasonable in voting down their agreement in the light of so many other agencies eventually voting their ones up. The statement assumes apples are being compared with apples.

PN537

For many other agencies they were being asked to surrender non-monetary conditions. Former Customs & Immigration officers were being asked to surrender far more and yet in return, remain at the bottom of the remuneration table. The ATO eventually capitulated last year but prior to their agreement expiring an APS3 was earning .9 per cent more than a former Customs APS3, and an APS6 was earning 2.85 per cent more than a formal customers APS6.

PN538

Now I use the examples of two former Customs levels rather than the Immigration pay scales as the Department is arguing these two cohorts are overpaid. They are arguing that the Customs APS3 cohort shouldn't receive any pay rise for a fifth year running and then only 0.6 per cent pay rise in the sixth year. They are slightly more generous towards the APS6 cohort as they are offering them a 0.1 per cent pay rise after a four year pay freeze. That's a dollar and five cents per week after tax.

PN539

Now the same cohort in Tax last year accepted a weekly pay rise of $32.50 after tax. Are we meant to draw the conclusion that rejecting $1.05 a week is somehow ill mannered or ungrateful? Reading the rebuttal of paragraphs 73 to 75 in relation to declining funding is quite interesting. In one way it's a damming indictment that Home Affairs is underfunded, yet somehow the Department manages to turn around this fact and try and make it the employee's fault. What if the government reduced the budget even further whilst still maintaining the Department employ a set number of staff? Would the Department argue that no one would have a pay rise for another five years, another ten years? Now ten year may seem a fanciful argument but that is how long many workers in America waited for a pay rise after the GFC. In the same period though we have seen the top one per cent grow far wealthier. We now have multiple individuals with a net work exceeding a hundred billion dollars whilst people at the bottom are being frozen.

PN540

Definitive futures. I have read the arguments put forward by the Department. They present a very bleak future, almost dystopian. The Department has claimed that the government has made no provision for any pay out cut(?), which I find incredulous. The importance of Home Affairs is such that the safety of the nation will be threatened if there are any staff reductions. And staff reductions will occur regardless of any pay outcome as the resources to fund the Department are shrinking. Based on these indisputable facts the only logical path the Commission can take is to reduce the salaries of all employees to safeguard the rest of the country. I assume Mr O'Grady is providing his services pro bono based on his desire to see the best outcome for the country.

PN541

May of the arguments presented as facts by the Department's legal team are predicated on the current government being, a), re-elected at some point in the next 12 months, and b), maintaining the same policies. Opinion polls across the spectrum have consistently been predicting that this government will be replaced within the year. Some of its own members have publically admitted this. If this occurs can the Department categorically state that budgets and staffing levels will remain the same under a different government? The true answer to that question, of course, is that there is no person in this room who knows what a new government might or might not do.

PN542

For the sake of completeness let us consider a scenario where the current government somehow reverses its fortunes and is re-elected. We then have to address the question of whether they would maintain all the policies they are currently attempting to implement. While there is a higher probability to accept this premise it is by no means a foregone conclusion. IN the 2016 budget the government was adamant the Department should lose 345 staff. The position was reversed in the same financial year with the government improving the increase in staffing numbers at 555 new staff. Similarly, world events occur and governments are forced to react and change their prior stances. No policy can sit in isolation and be immune from events taking place around it. Regardless of its current postulating the current government will have to react whatever decision the Full Bench makes in relation to pay rises. This process is not about the Commission having to respond to what the government stipulates. The Commission is independent and their roles is to decide what is best and fair for all parties. So also best and fair for the Department, as well as for the staff. If the Commission simply did what the government of the day desired it would be an irrelevant body. Who truly wants to be irrelevant?

PN543

Accurate submissions. There were a number of claims made in the Department's closing arguments that simply aren't true. The claims aren't deliberate lies. They're more an expression of a belief. Paragraph 216 makes claims about increased productivity due to the trusted trader program. Now this is made in the context that productivity gains over the past four years have been due to government initiatives rather than the actual workforce. Now as we speak, trusted traders who have invested time and money becoming recognised members are now writing to the Department asking to know what benefits they will receive as their cargo is still subject to the same checks as everyone else's and there is currently no scheme in place to prioritise their cargo over non-members. But does my highlighting this issue actually help the Commission with their deliberations? The truthful answer is that it is only a small issue and probably won't have any direct bearing on the final determination. Okay, so why do I feel the need to mention it? The answer to that question is to point out that the Department's submission shouldn't be accepted at face value simply because it has been written by people in positions of great power. What I would also like to point out too is, section 64 of their submission - - -

PN544

VICE PRESIDENT CATANZARITI: Paragraph 64?

PN545

MR HOLMES: Paragraph 64, they have transcribed the 2018 workplace bargaining framework. So part B, they have written there that it says, "Existing pay scales are not to be modified to provide the new top pay points." Now that's a definitive statement. However that is not what the 2018 workplace determination actually says. They have omitted one word and that word is, "generally." "Existing pay scales are generally not to be modified." So there are little things like that throughout.

PN546

VICE PRESIDENT CATANZARITI: Is that accepted, Mr O'Grady?

PN547

MR O'GRADY: No, it's not, sir, because it's actually the 2015 policy that's quoted.

PN548

VICE PRESIDENT CATANZARITI: But he says you're misquoting the paragraph.

PN549

MR HOLMES: Right, well, for the sake of completeness we tender a copy of the 2018 policy.

PN550

VICE PRESIDENT CATANZARITI: Because paragraph 65 is the 2018 policy, I think.

PN551

MR HOLMES: I will leave that. Take savings. Now I know this has been covered by other people but - - -

PN552

VICE PRESIDENT CATANZARITI: See, what he said, just so we're clear, and I'm looking at the footnote, Mr O'Grady - - -

PN553

MR O'GRADY: Yes.

PN554

VICE PRESIDENT CATANZARITI: It says, "Workplace bargaining policies" – this is paragraph 64, footnote 65, says, "Workplace bargaining policy 2014-2023, see clauses 21 to 28 of the 2018 workplace bargaining policy which are broadly similar." So - - -

PN555

MR O'GRADY: Yes. I understood the quote to be from paragraph 64, and by definition that is the 2015 workplace bargaining policy, and then what is footnoted is by way of comparison of the terms of the 2018 policy which has been put in evidence.

PN556

VICE PRESIDENT CATANZARITI: Yes. And what I think you are trying to say to us is that we should focus on the footnotes, that the 2018 policy is slightly different to the 2015 policy which is quoted in paragraph 64.

PN557

MR O'GRADY: Thank you.

PN558

MR HOLMES: Savings. The Department claims it has not made any savings on employee expenses over the last four years as a result of wages being frozen for the period. Let's use a current, contentious, real world example, power prices. Let's say I want to install ducted air conditioning in my home but I know that I won't be able to afford the running costs due to the current price of power. If the government were to introduce some policy that resulted in a decrease to the unit cost of power and that equated to the cost of running a ducted air conditioning system, I could then have it installed and pay no more for my power bill. So have I made a saving? Well, most people would tell you the answer is obvious. But the Department seeks to obfuscate a fact with technical paring.

PN559

After stating that there is no evidence of any saving by Home Affairs in paragraph 209, the Department then says in paragraph 214, "if the Full Bench is satisfied the evidence does suggest some saving has been made." I found this confusing. There's a categorical statement informing everyone that there is no evidence.

PN560

Now if something is a categorical fact and then you put forward arguments to support your cause if a fact is not accepted, logic dictates two possible conclusions. The first is that the Full Bench doesn't have the capacity to understand the evidence and has therefore arrived at an incorrect conclusion. The second logical conclusion is the original categorical claim was incorrect. Personally I'm inclined to go to the second conclusion. Overpaid. The Department has been arguing that the majority form of customs officers need to be restrained in any pay rise. They're arguing that many should go a fifth year without a pay rise, the inference being that they are overpaid. At the same time the Home Affairs MOG was purposefully delayed to allow former Attorney General staff to receive a second pay rise. All these staff already received greater pay than Customs staff, so why wasn't the same argument applied to them? Infrastructure were due for a second pay rise in March. Why not wait one more month for them? We're still waiting on legislation changes for ASIO and AFP, so haste doesn't seem to be the key motivator. Infrastructure though, are near the bottom of the remuneration table. If fact prior to them accepting an agreement they were the one Department preventing Immigration from claiming their current mantel as the overall lowest pay.

PN561

Can we draw any conclusions form the decision to award only those who were better off in the first place? I guess the decision was just a reflection of our current society at large. It's a rhetorical question and I'll leave everyone to answer that in their own mind. The bestowing of favouritism upon one cohort over another makes me question the sincerity of the arguments put forward by the Department. Their submission keeps repeating the word, "fair", as if repetition will somehow make it so.

PN562

Productivity. In section (b)(5) the Department requests the Commission eliminate unreasonable restraints on productivity. This request puzzled me as I was struggling to think of what restraints currently existed that restrained productivity. I turned to the relative paragraph, the Department of reference, so I could be enlightened, tab 8, paragraph 64. There are a few points listed here. The Department wants to have the same working week and the same pay scales for all employees. Okay, quantum aside, I don't recall anyone arguing we should have disparate pay or hours. It must be the following point then, flexibility and the manner and method of work allocation. Under the current terms of the DIAC 2011 agreement the Department has introduced the concept of surge(?), where officers are seconded to an airport for a number of hours before returning to their normal work area to complete the day's hours. Similarly, as I mentioned earlier the Department has implemented the MDF, mobile deployment forms. This suggests there is nothing in the current terms that needs to be eliminated to achieve this outcome. So maybe it's the next point about how clear and precise terms and conditions will bring about greater confidence and decrease the likelihood of disputes. That seems a little esoteric as removing references to entitlements covered by other legislation actually decreases confidence as people assume they no longer have that entitlement. The average person, or manager for that matter, isn't aware of all the various legislation and most people have never heard of the NES, including some managers I have spoken to, let alone understand what it means to them.

PN563

This brings us to the last point, allowances. There' is a perverse logic when you argue that removing an allowance will improve someone's productivity. I agree that some people may react unfavourably if the person next to them is getting an allowance and they are not. However the impetus of the non-departmental bargaining representative is to make a specific allowance available to all those who perform the function attracting the allowance. If allowances are a restriction on productivity why then is it the greatest largess of allowances are bestowed on the Senior Executive Service? And that's coming from the Australian Public Service publisher's statistics on that. On the basis of their logic this makes them the most unproductive employees in the public service – that's a joke, kind of.

PN564

Emotional tone. Reading through the Department's closing submission I was struck by a recurring theme. So many of the arguments put forth are stridently defensive in nature. The Commission must do this, the Commission can't do that. The notion that the future security of the country and all of its citizens rests in the hands of the Commission has been stridently iterated. I thought about this and tried to psychoanalyse their writing style. I realised that it's been written from a position of fear. These are very powerful and influential people. So I wondered to myself, why are they frightened? Surely the Commission will hand down a decision that is fair and reasonable. I then realised that this was the basis of their fear. The Department's submission uses the word, "right", to justify an argument. But the Department isn't arguing for what is morally right. They are arguing a case on behalf of ideologues whose interpretation of the word, "right", lacks the consideration of inclusion.

PN565

Good faith. Section 275(g) of the Fair Work Act specifies that the Commission must give weight to whether the parties have complied with the good faith bargaining requirements. The Department has been at great pains to deny repeatedly that they have never strayed from the path of good faith. Their closing arguments address this point on the very first page and state that at best the matter is a neutral consideration. I am reminded of the classic line from Hamlet, "The lady doth protest too much." Vice President Catanzariti made the comment that the Commissioner has been presented with two extreme documents. I assume that the major protagonists are hoping that the Commission will predominantly accept their extreme document if they can convince the Commission that their opposing side didn't play by the rules. Well, there's a few things there I say I could argue the various things that happened.

PN566

But at the end of the day, what does this really achieve? This happened over three years ago. I am here today to argue a case for what is just, what is fair, what is the right thing to do. What's done is done. Let future historians debate the nuances of process, or the lack thereof, and let us write a document together that provides safeguards and recourse for staff, that provides a decent remuneration package aligned with comparable work standards across the entire public service, that recognises changes in the industrial landscape, that meets community expectations of quality regardless of which government agency is your employer.

PN567

Affordability. The Department has invested all its rhetoric in rebutting the CPSU's proposal as if the Commission would countenance in its entirety. The arguments are based around an all or nothing strategy. I'm not going to argue for the CPSU pay proposal as there's not one person in this room who seriously believes it has any chance of being adopted. However, let me pause for one moment and look at what the CPSU is actually proposing. The effect of the CPSU claim would see all Home Affairs employees having a 12 per cent pay rise by 1 July this year. How would this affect Home Affairs position as the lowest paid of the main government Departments? While a former Customs APS3 would become the best paid APS3 in the public service, an Immigration APS3 would only climb to 4. And APS4 and 5 would claim the third position for their classification. An APS6 would claim fourth and sixth position, depending whether they're Customs or Immigration, and an EL1 would be sixth and tenth, respectively. So when viewed from this perspective the CPSU proposal is not that outrageous as it may appear at first value. It is merely seeking to correct years of pay injustice. As I've said though, I will not argue for this course of events. There would be an outcry from the government followed by a vigilante posse from the Murdoch Press calling for the heads of the Commissioners to be delivered on silver platters, which I'm sure you don't want. In any event the Government would probably appeal through the Full Court and we'd be back at square one again.

PN568

So what is fair? What is reasonable and what is affordable? In paragraph 177 the Department makes the claim the remuneration package considerably exceeds the annual pay rates in the APS enterprise award. Leaving aside the Department's aversion to all the other entitlements the award provides are they seriously contending that public servants should actually be renumerated these amounts? Should someone who oversees the customs operation of Sydney Airport with over 600 staff go for seven years, possibly longer, without a pay rise on the basis that an award, ignored in all other aspects by the Department, sets a minimum salary of $64,500 for that role, an amount substantially under the average wage. Really? I found the inclusion of this claim simply repugnant, actually. It is an insult against the contribution I make to this country and it's an insult to the contribution of the other 15,000 employees of Home Affairs.

PN569

The claims from very well remunerated people that the rest of us should be grateful for crumbs is representative of why the world's political climate is changing and the authors of statements such as this sit back in amazement at the resultant anger. Why have the masses turned against us? The same argument is used in section (e)(4), better off overall. Ask a lay person what they think "better off overall is, and they will tell you that it means their pay packet tomorrow is not less than their pay packet today. The Department's lawyers would like you to believe that "better off" means that you were better off than some fictitious public servant. I use the word, "fictitious", as there is not a single Australian public servant who is paid the minimum APS award rate. Their interpretation is also at odds with the stated objective of plain speaking English that everyone can understand.

PN570

In conclusion, so let's return to my previous question, what is fair, what is reasonable and what is affordable? My proposition of adjusting pay bandwidths seeks to address the inequity between Home Affairs' salaries and those of the rest of the public servant. It accepts the Department's offer of a two per cent average pay rise and is therefore in accordance with the 2018 bargaining framework. It accepts the Department's three per cent increment proposal which has been approved by the APSC. And it also achieves the Department's stated goal of achieving pay parity for all its employees.

PN571

Now to go back to the 2018 bargaining framework, paragraphs 23 and 24 allow for pay scales to be adjusted in exceptional circumstances. I therefore suggest that my proposal is not a deviation from the Government policy. The obvious rebuttal is to claim that Home Affairs' remuneration doesn't meet the exceptional criteria. But to that rebuttal I would argue that if being the lowest paid Department in concert with such a high public profile doesn't meet the definition of "exceptional", then the paragraph is effectively redundant and shouldn't be included in the bargaining framework. My proposal has been formulated over the course of the hearing, and listening to all sides including the Bench's reactions. I am acutely aware of the national budget and the pressure it faces. That is why I have structured the proposal to be a gradual process that will take three or four years to achieve. This provides the Department with adequate timeframes in which to achieve efficiencies to offset costs. My submission is also reasonable in its ultimate objective. I am not seeking to have Home Affairs rise to the top of the table like my favourite football team. I haven't selected second or third position either. Instead I have gone for a position just outside the 25th percentile. Now I know that the general accepted practice on bargaining is to offer less, or ask for more than you want and then settle somewhere in the middle. Only a fool would open an offer with what they think is ultimately fair. I guess that makes me a fool in most bargainers' eyes. But I have a personal belief that you have a better chance of achieving a reasonable outcome if you commence from a position of reasonableness.

PN572

I did have a paragraph that then said that the Department hadn't opposed my table, which at the point when I wrote it they hadn't but then I received their thing yesterday. So I just wanted to have a very brief rebuttal of what Mr O'Grady has given us yesterday. He opens up and says that I don't press earlier claims concerning, or personal leave, cash out(?) and enhanced conditions for casual employees. In my submission I talked about the whole notion of compromise, something which a lot of people hear don't seem to get. So I was saying that if this proposal of mine is adopted and that casuals are raised to the average lowest salary rate for their particular classification, that average lowest, that would result in a nine and a half per cent pay rise. So that's how far behind they are. So in relation to that, then yes, that was why I wasn't pushing for the 25 per cent loading and things like that. So when we come back for negotiations in another three years there will be things on the table to negotiate. Because don't forget I'm pushing for them to be elevated to the average lowest, so they'll probably want something else after that.

PN573

The other aspect of Mr O'Grady's rebuttal to my closing arguments that I take objection to is his claim that I seek to grade the value of Home Affairs contribution to Government and then use my opinion to seek a wage outcome. My submission specifically made the point that agencies can't be compared. The precise words I used were, "It is impossible to rank mid to large organisations by their importance." Yet this document says that I did. I put down there, I "felt exasperated", just under the words, "I give up." But that's exactly what they want. I do also admit that I incorrectly read the defence EA and that they do have to take annual leave for their Christmas close-down. I didn't include the Human Services Department because I couldn't find their EA. I don't think it had been uploaded onto (indistinct) at that stage. But I have since found it and they have to take leave, as well. But then the major point still remains. That is, 14 of those 17 Departments do. And then if you're going to include the Department of Veterans Affairs, Austrac who are now part of us, they also have it. So the primacy of the argument still is there. And I know I said "conclusion" before. There's an addendum.

PN574

I would like to thank the Bench for giving me the opportunity to have a voice. From an entirely legal perspective I am only representing my own personal interests. However the reality is blurred and opinions are divided. I have no idea what the Full Bench thinks of my impertinence of inserting myself into the battle of the titans. My hope is that you see me as someone who is presenting arguments that are not motivated by self-interest but rather by what is the right thing to do. I am normally fairly good at reading people but with Mr Catanzariti I'm at a total loss.

PN575

So my final argument is directed at you personally. Let's say that you have two sons and a daughter and they all work for the public service. One son works as an APS4 for the Office of the Fair Work Ombudsman. His salary is $75,800. Your other son, he works for the Department of Social Services, also as an APS4. His salary is $73,000. Your daughter, though, works for Home Affairs. Her job involves more responsibility than her brothers and she's been classified as an APS5. Her salary is $72,800. She comes home and says, "Dad, why do I get less than my brothers when the APSC guidelines recognise that my responsibilities are greater than theirs?" I won't ask how you would answer that question. Instead I'll ask you to consider what you can do to avert the question in the first place. I have provided a template that you can use to begin a gradual change in social justice. The three gentlemen sitting on the Bench today have the power to dismiss my solution and maintain an entrenched inequality. Or you can use this moment in time to take that first step in addressing the social inequities that exist in the Commonwealth Public Service. How do you want history to judge your decision, and by extension, judge you? Thank you.

PN576

VICE PRESIDENT CATANZARITI: Thank you, Mr Holmes. Alas, we won't be drafting the document jointly. That time seems to have passed, although we remain optimistic if the parties wish to do it. It will be up the Commission. Thank you. Mr O'Grady?

PN577

MR O'GRADY: Thank you, your Honour. Just a couple of minor points by way of information. The annual wage review increases are in the table at paragraph 18 of tab 4 of the Department's submission. I think Mr Slevin suggested that we were submitting that the starting point was the Department's proposed workplace determination from the point of view of sitting down and drafting. That's not what we were suggesting. If it is what I suggested then I apologise for making a mistake but I'm pretty confident what I said was this, that the best starting point from a drafting perspective is that which is in the yellow and blue of exhibit DIBP30, which is that which is agreed. Any suggestion that the Commonwealth acted in an arbitrary manner in initiating any of the machinery of Government changes is to be rejected.

PN578

There is a wealth of material that provides a rational and solid foundation for each of the changes that were there implemented. There is a point, I think, at which it might have been suggested that 2000 employees would go without a pay increase in the life of the Department's proposed workplace determination. The relevant piece of evidence is paragraph 2571, Mr Leonard's evidence. It was not that 2000 employees would go without a pay increase for the life of the workplace determination, it was that they would go without a pay increase for a couple of years. I think those that the Department accepts will go without a pay increase is the – I think it's a smaller group at PN1996 to 1999, I think, of Mr Venugopal's evidence, and there's no actual number given.

PN579

In terms of the suggestion that we are picking and choosing and running the case at the agency level, the fact is the Department has addressed the case a the Commonwealth level and not just the agency level. What the Department has done is put the decision-making at the agency level at the context of the Government's fiscal strategy. Any suggestion that Mr Groves did not exercise fiscal restraint by in some way wasting resources is to be rejected. He was able to continue to employ more people, something which Mr Murray was very grateful for and was able to put to good use. In relation to the Qantas Pilots' decision and the consultation issue the relevant paragraphs, I think, were 449 to 442. One needs to look at those paragraphs carefully. There does seem to be a suggestion that the parties were actually agreed on consultation up to a certain points, and the pilots actually wanted something extra. So it may be that in that case subsection (5) of section 273 was not called into play because what was ultimately in the workplace determination was that which was agreed. We simply rely upon the words of the section.

PN580

Can I then address the alternative proposal that is in the letter of 12 April 2018. The submission of the Department is that this will actually create work for you rather than ease the burden. It is not a case of picking one proposal or the other. Your job is to make a workplace determination. This proposal simply complicates things by adding another layer. The first part of the proposal will still require you to determine whether that material which appears in the black text in annexure 4 is appropriate to form terms of a workplace determination on section 275 grounds. It also requires you to consider whether each of the matters in the bullet points that are set out in paragraph 1 are appropriate for inclusion in a workplace determination on section 275 grounds. The second part, whilst seemingly a little confusing, will offer one of two options. If it is the case that it's simply a matter of attaching a schedule and saying this can be left until later then the CPSU is inviting you to advocate your statutory responsibility to make it a workplace determination. If it is the case that this proposal suggests to you that in exercising that statutory duty you should make a workplace determination that includes the terms that are set out in schedule 1, you will need to make the assessment as to whether or not it is appropriate that those matters be included as terms of the workplace determination on the basis of the section 275 criteria.

PN581

But there is an even more fundamental problem with the proposal and that is that it is antithetical to an essential element of the CPSU case. The essential element of which I speak, of course, is the need for equity or parity in terms and conditions of employment of all employees doing the same work. Now I won't take you to these aspects of the evidence but I will read them into the transcript so that you can have a look at them.

PN582

There was evidence of five witnesses essentially in the same terms, calling for pay equity, Mr Hyde, paragraph 18, Mr Loughnan, paragraph 22, Mr Fontana, paragraph 39, Ms Harris, paragraph 35, Mr Jones, paragraph 53, Mr Suijdendorp, paragraph 32. In giving his evidence during cross-examination Mr Evans at paragraphs 4617 to 4631 recognised the essentiality of parity and equity and explained that the two could be used interchangeably when talking about, not just pay, but all terms and conditions of employment. Mr Muffatti at paragraph 99, subparagraph (4) of his statement identifies specific entitlements which he says differ between Customs and Immigration which he identifies as being a problem because it's contrary to the principle of equity of terms and conditions.

PN583

Mr Muffatti at paragraph 121, subparagraph (ii) identifies a failing of the Home Affairs proposal because it does not adequately address issues arising from integration including pay equity between employees and he suggests that grandfathering entitlements creates differential entitlements between employees. Mr Muffatti in giving his evidence before the Full Bench at paragraphs 6014 and 6018 acknowledges that pay equity is important, as is ensuring that no employee is worse off. This position, it was part of the CPSU's case, is said to be based on concerns expressed by members which have contributed to low morale. Mr Evans exhibited the Rand report and at paragraph 37 of his statement refers to the Rand report which identifies disparity in terms and conditions as a source of low morale. The relevant passage in the Rand report is page RE3 at page 65, about point 5 of the page. The Pulse check which was an annexure to Ms Harris' witness statement, SH1, at page 26.1, identified three key findings, one of which was that pay parity is one of the key issues of focus of dissatisfaction for employees. The same exhibit, SH1, at page 31.5, "Inequity in pay leads to frustration and low morale. There's a need for a fair enterprise agreement that treats all staff at the same level equally in terms of conditions of employment to remove the 'us and them' mentality." Finally, attachment NH7 to Ms Hartman's witness statement at page 280, .2 of the page, identified staff concerns about salary parity being not achieved on integration.

PN584

Those matters seem to be totally disregarded when the CPSU puts this alternative proposal. The idea that it is appropriate for this Full Bench to adopt this alternative and in particular, leave it for the parties to sort things out through bargaining, should not be accepted. Schedule 1 seeks to confer upon employees who have at no stage received the benefits that are there set out and then invites you to require the Department to buy those terms out in future bargaining. The group of employees of whom I speak are not the Maritime Unit employees, they are employees who originate from the Department of Immigration and Citizenship who are now doing work which would be regarded as ABF work. So it is submitted that in all of those circumstances it would be totally inappropriate for the Full Bench to be seduced by this alternative position as offering some convenient or easy way out.

PN585

Can I just mention three minor points by way of final administration. I have spoken to each of the representatives of the other parties who are here today about the title of the proceeding. It is the Department's position that the proceeding should probably be entitled, "The Department of Home Affairs workplace determination", because I think that's the nomenclature that has been applied to all of these workplace determination matters because there is no real applicant or respondent. In terms of the making of a workplace determination it may well pay to provide one final opportunity once the determination is made for the parties to check for any technical matters or uncertainties or unforeseen consequences.

PN586

VICE PRESIDENT CATANZARITI: That's the usual course, Mr O'Grady.

PN587

MR O'GRADY: Yes.

PN588

VICE PRESIDENT CATANZARITI: We set out a draft determination.

PN589

MR O'GRADY: Thank you – without wanting to invite any further debate, of course, but confining it to those matters. And if that is the case then I think that probably answers the third point and that is, naturally the Department would need a couple of weeks to prepare all of its payroll systems and everything like that and it will probably have the time to do that through that process, your Honour. Those are the submissions by way of reply.

PN590

VICE PRESIDENT CATANZARITI: Thank you. Drawing on Mr Holmes' Paul Simon analogy, the Sound of Silence having fallen over the Bar table we now thank the parties for their submissions. It has been a long case, and a long decision coming. We reserve our decision. The Commission is adjourned.

ADJOURNED INDEFINITELY [11.23 AM]

Fair Work Commission Transcripts

B2016/1065, Transcript of Proceedings [2018] FWCTrans 148 (4 May 2018)