1
Fair Work Act 2009
s.156 – 4 yearly review of modern awards
4 yearly review of modern awards—Penalty rates
(AM2014/305)
JUSTICE ROSS, PRESIDENT
VICE PRESIDENT CATANZARITI
DEPUTY PRESIDENT ASBURY
COMMISSIONER HAMPTON
COMMISSIONER LEE
MELBOURNE, 21 SEPTEMBER 2015
4 yearly review of modern awards – penalty rates – objections to expert evidence
[1] This decision deals with a number of objections made in relation to evidence filed in
the penalty rates case which forms part of the 4 yearly review of modern awards.
[2] Revised directions1 issued on 7 August 2015 provided that any objections by any party
to any of the expert evidence were to be filed by Tuesday 8 September 2015. Parties were
asked to set out the aspect of the evidence which is the subject of the objection and a
submission in support of the position put (including a reference to any relevant authorities).
[3] Objections to evidence were filed by the following parties:
United Voice;
Shop, Distributive and Allied Employees Association;
Ai Group;
Australian Hotels Association, Accommodation Association of Australia and
Pharmacy Guild of Australia;
Australian Business Industrial and NSW Business Chambers Ltd; and
Restaurant and Catering Industrial
[4] These matters were originally listed for hearing on 18 September 2015. Given the
number of objections filed it became apparent that the hearing time allocated would not be
sufficient. In a Statement2 issued on 17 September 2015 we indicated that the hearing on
18 September 2015 would be limited to the objections in respect of witnesses whose evidence
was scheduled to be heard in the coming weeks. We will turn to those objections shortly. We
begin by making some brief observations about the context in which these matters arise.
[5] The present proceedings form part of the review of all modern awards required by
s.156 of the Fair Work Act 2009 (the Act). Subsection 156(2) deals with what has to be done
in a Review:
[2015] FWCFB 6509
DECISION
E AUSTRALIA FairWork Commission
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-corr-RCI-160915.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-ABI-150915.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-AHAandors-150915.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-AHAandors-150915.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-AIG-150915.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-SDA-150915.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-UV-150915.pdf
[2015] FWCFB 6509
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“(2) In a 4 yearly review of modern awards, the FWC:
(a) must review all modern awards; and
(b) may make:
(i) one or more determinations varying modern awards; and
(ii) one or more modern awards; and
(iii) one or more determinations revoking modern awards; and
(c) must not review, or make a determination to vary, a default fund term of a modern
award.
Note 1: Special criteria apply to changing coverage of modern awards or revoking modern
awards (see sections 163 and 164).
Note 2: For reviews of default fund terms of modern awards, see Division 4A.”
[6] Subsections 156(3) and (4) deal with the variation of modern award minimum wages
in a Review and are not relevant for present purposes.
[7] Subsection 156(5) provides that in a Review each modern award is reviewed in its
own right, however, this does not prevent the Commission from reviewing two or more
modern awards at the same time.
[8] In conducting the Review the Commission is able to exercise its usual procedural
powers, contained in Division 3 of Part 5–1 of the Act. Importantly, the Commission may
inform itself in relation to the Review in such manner as it considers appropriate. Section 590
provides as follows:
‘590 Powers of the FWC to inform itself
(1) The FWC may, except as provided by this Act, inform itself in relation to any matter
before it in such manner as it considers appropriate.
(2) Without limiting subsection (1), the FWC may inform itself in the following ways:
(a) by requiring a person to attend before the FWC;
(b) by inviting, subject to any terms and conditions determined by the FWC, oral
or written submissions;
(c) by requiring a person to provide copies of documents or records, or to provide
any other information to the FWC;
(d) by taking evidence under oath or affirmation in accordance with the
regulations (if any);
(e) by requiring an FWC Member, a Full Bench or an Expert Panel to prepare a
report;
(f) by conducting inquiries;
(g) by undertaking or commissioning research;
(h) by conducting a conference (see section 592);
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(i) by holding a hearing (see section 593).’
[9] Section 591 is also relevant for present purposes, it states:
‘The FWC is not bound by the rules of evidence and procedure in relation to a matter
before it (whether or not the FWC holds a hearing in relation to the matter).’
[10] While the Commission is not bound by the rules of evidence that does not mean that
those rules are irrelevant. In certain circumstances fairness may require that evidence be
excluded3 and in the present proceedings, having regard to the volume of the witness
evidence, it is important that time is not taken up with evidence which is only peripherally
relevant and of limited probative value. It is important that the proceedings are conducted in a
timely and efficient manner, as required by s.577 of the Act.
[11] A number of the objections before us are in respect of expert evidence sought to be
filed in the penalty rates proceedings. Section 76 of the Evidence Act 1995 (Cth) sets out a
general rule excluding opinion evidence tendered to prove the existence of a fact. It states:
76 The opinion rule
(1) Evidence of an opinion is not admissible to prove the existence of a fact about
the existence of which the opinion was expressed.
(2) Subsection (1) does not apply to evidence of an opinion contained in a
certificate or other document given or made under regulations made under an Act
other than this Act to the extent to which the regulations provide that the certificate or
other document has evidentiary effect.
[12] Section 79 of the Evidence Act provides an exception to the opinion rule in the case of
expert witnesses. It relevantly states:
79 Exception: opinions based on specialised knowledge
(1) If a person has specialised knowledge based on the person’s training, study or
experience, the opinion rule does not apply to evidence of an opinion of that person
that is wholly or substantially based on that knowledge.
[13] In Hail Creek Coal Pty Ltd v CFMEU4, a Full Bench of the Australian Industrial
Relations Commission applied the above provisions in excluding opinion evidence by a
witness about an employer’s accident risk management questionnaire on the basis that the
witness was not an expert in that field.5
[14] The proper approach to the application of sections 76 and 79 of the Evidence Act has
been recently considered by the High Court in Dasreef Pty Limited v Hawchar6 (Dasreef).
The central issue before the Court in Dasreef was whether evidence given by a witness, Dr
Basden,7 measuring or estimating the amount of silica to which a worker was exposed in
undertaking certain work, was admissible in proceedings before the Dust Diseases Tribunal of
NSW to found a calculation as to the level of respirable dust to which the worker was
exposed. The plurality held that it was not.8
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[15] The plurality commenced its examination of sections 76 and 79 of the Evidence Act by
identifying the interconnection between the two provisions. In particular, the opinion rule in s
76(1):
‘ … directs attention to the finding which the tendering party will ask the tribunal of fact to
make. In considering the operation of s 79(1) it is thus necessary to identify why the evidence
is relevant: why it is “evidence that, if it were accepted, could rationally affect (directly or
indirectly) the assessment of the probability of the existence of a fact in issue in the
proceeding”. That requires identification of the fact in issue that the party tendering the
evidence asserts the opinion proves or assists in proving.
To be admissible under s 79(1) the evidence that is tendered must satisfy two criteria. The first
is that the witness who gives the evidence “has specialised knowledge based on the person’s
training, study or experience”; the second is that the opinion expressed in evidence by the
witness “is wholly or substantially based on that knowledge”.’9
[16] The plurality then applied this approach to the question of whether Dr Basden could
proffer an admissible opinion about the numerical or quantitative level of the worker’s
exposure to silica dust and stated that:
‘…it would have been necessary for the party tendering his evidence to demonstrate first that
Dr Basden had specialised knowledge based on his training, study or experience that permitted
him to measure or estimate the amount of respirable silica to which a worker undertaking the
relevant work would be exposed in the conditions in which the worker was undertaking the
work. Secondly, it would have been necessary for the party tendering the evidence to
demonstrate that the opinion which Dr Basden expressed about Mr Hawchar’s exposure was
wholly or substantially based on that knowledge.’10
[17] Although Dr Basden gave evidence about his training, study and experience, he did
not give evidence that this study, training and experience permitted him to provide anything
more than a “ballpark” estimate of worker’s exposure to silica dust.11 The point identified by
the plurality was the need for a sufficient connection between the opinion actually being
expressed by the witness and the witness’ specialised knowledge based on training, study or
experience. The “lack of any sufficient connection between a numerical or quantitative
assessment or estimate and relevant specialised knowledge” rendered Dr Basten's evidence
inadmissible.12 The insufficiency in the connection between Dr Basden’s evidence and his
specialised knowledge was a question of admissibility, not merely weight, as stated by the
plurality:
A failure to demonstrate that an opinion expressed by a witness is based on the
witness’s specialised knowledge based on training, study or experience is a matter that
goes to the admissibility of the evidence, not its weight.13
[18] This approach in Dasreef was recently reaffirmed by the High Court in Honeysett v
R14. We now turn to the objections before us.
[19] The hearing on 18 September 2015 was limited to the objections by the SDA and
United Voice to the Pezzullo Report; parts of the Lewis Report and parts of the Sands
Report.15 During the course of the proceedings on 18 September 2015 the parties were
directed to have further discussions in relation to the objection to the Pezzullo Report and if
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the objection remains unresolved it will be the subject of a further hearing on Friday 25
September 2015 at 1pm. We now turn to the remaining objections which were the subject of
the 18 September hearing.
The Lewis Report
[20] Australian Business Industrial and the NSW Business Chamber (ABI/NSWBC) have
filed a report by Professor Phil Lewis titled ‘Penalty rates and the retail, café and restaurant;
and hairdressing and beauty industries’ (the Lewis Report). The objection by United Voice
and the SDA is to Part 5: ‘Are Penalty Rates Relevant to the Modern Australian Economy’
(pp 32-39) and Part 6: ‘Who Would Benefit from Removing Penalty Rates?’ (pp 39-40), of
the Lewis Report.
[21] Part 5 of the Lewis Report can be conveniently subdivided into the following sections:
(i) the origins of penalty rates (pp 32-33), including setting out extracts from
Federated Gas Employees Industrial Union v Geelong Gas Company and
Others [1919] 13 CAR 437 and The Metal Trades Award re Rheem
Manufacturing – Rates for Work Performed on Saturdays and Sundays [1947]
58 CAR 609;
(ii) changes over time in religious observance by Australians (pp 34-35) – in which
Professor Lewis sets out data from the 2010 National Church Life Survey about
Christian affiliation and church attendance; and
(iii) the value of time (pp 35-39), which includes ABS data on the proportion of
employees undertaking weekend work and the time use of individuals and
households, and a study by Professor Rose which is the subject of a separate
report in these proceedings.
[22] At the end of Part 5 Professor Lewis sets out his conclusion, as follows:
“In summary, the Australian economy today is dominated by the service sector in which part-
time work, casual work, working women and flexibility are the norm for many businesses.
Also, the social mores which defined Australian society have, to a large degree, changed
radically over time. Among the most relevant here are the growth in participation in the
workforce of women with children and use of leisure time for other activities including church
attendance and participation in sporting activities. Both of the latter account for a very small
percentage of people’s leisure time on weekends. Although most employees do value time on
Sundays and public holidays more than time on weekdays, the premium is much less than the
current penalty rates.”
[23] The essence of the objection to Part 5 of the Lewis Report is what is submitted to be
the lack of a sufficient connection between the opinions being expressed by Professor Lewis
in this part of his report and his expertise (ie his ‘specialised knowledge’ within the meaning
of s.79 of the Evidence Act). While it is accepted that Professor Lewis has specialised
knowledge in the field of labour market economics it is submitted that such specialised
knowledge does not extend to what are described as ‘substantially different topics’, such as:
(i) changes in social mores;
(ii) changes in religious practices;
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(iii) employee preferences and the valuation they place on time on different days;
(iv) the origins of penalty rates; and
(v) changes in the composition of weekend workforce.16
[24] A number of observations may be made about the objection to Part 5.
[25] First, topic (v) above – changes in the composition of weekend workforce – is, in our
view, a matter squarely within Professor Lewis’ specialised knowledge.
[26] Second, the section of Part 5 which deals with the origins of penalty rates simply sets
out extracts from decisions by a predecessor tribunal to the Commission (the Commonwealth
Court of Conciliation and Arbitration). This material is contextual in nature and does not
contain the expression of any opinion by Professor Lewis.
[27] Third, the aspect of Part 5 which deals with changes in religious practices sets out data
from the National Church Life Survey. In this section Professor Lewis also expresses the
following opinion (at the top of p 34),:
“while it may well have been the case that ‘Sunday is the day of religious observance’
once, this is only true of a minority of Australians today’.”
[28] This sentence is not pressed by ABI/NSWBC and will be excised from the Lewis
Report (transcript at paragraph 7193). The balance of this section of Part 5 of the Lewis
Report simply sets out data from the National Church Life Survey.
[29] Fourth, in relation to topic (iii) above – ‘employee preferences and the valuation they
place on different days’ – this section of Part 5 simply sets out relevant ABS statistics and
summarises a study by Professor Rose. In this section Professor Lewis also states:
‘Therefore, even under this extremely broad category of sport and outdoor activity, the time
spent, even as weekends, is not large and pales into comparison with other activities.’
[30] The above statement may be characterised as an opinion or simply a summation of the
data set out in Table 5. For our part we incline to the view that Professor Lewis is simply
purporting to summarise the data.
[31] Finally, as to Professor Lewis’ conclusion to Part 5 (set out at paragraph 22 above), we
are satisfied that the expressed opinion is substantially based on Professor Lewis’ specialised
knowledge. The boundaries of the field of labour market economics are not so clearly
delineated as to exclude the value of time by employees and the issues which may affect such
valuation.
[32] We dismiss the objection to Part 5 of the Lewis Report. We now turn to the remaining
objection to the Lewis Report.
[33] In Part 6 of his report, Professor Lewis addresses the question of “Who would benefit
from removing penalty rates?”.17
[34] The SDA submits that this evidence is irrelevant to the proceeding as there is no claim
before the Commission for the removal of penalty rates. Further, to the extent that this
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section of Professor Lewis’ report contains his opinion about the impact of removing penalty
rates on suppliers; complementary industries such as tourism; the price of consumer goods;
and consumer preferences with respect to shopping and eating out, it is submitted that
Professor Lewis is not qualified to give his opinion on these matters taking into account his
qualifications and the relevant principles concerning section 79 of the Evidence Act as set out
above.
[35] Contrary to the submission advanced by the objectors there is at least one claim before
us for the removal of penalty rates. ABI/NSWBC are seeking to remove the payment of
penalty rates to casual employees for work on public holidays. It follows that the objection
on the basis of relevance fails.
[36] The second limb of the objection to Part 6 of the Lewis Report – lack of specialised
knowledge – was not the subject of elaboration or debate during the hearing on 18 September
2015. To the extent that this point is pressed it can be dealt with when Professor Lewis is
called to give evidence. If the objection is pressed Professor Lewis will be given leave to
provide evidence as to his specialised knowledge which grounds the opinions he expresses in
Part 6 of his report.
[37] We now turn to the objections to the Sands Report.
The Sands Report
[38] The ARA, NRA, ANRA and MGA have filed a report by Dr Sean Sands titled ‘Retail
Award Research’ (the Sands Report). The objection is to Part 1 of the report: Retail Industry
Analysis (including references to Part 1 of the report at paragraph 1 of the Executive
Summary and the Research Summary at pp.95–96). The objection is on the basis that this
material is not based on Dr Sands’ specialised knowledge and is therefore opinion evidence in
contravention of s.79 of the Evidence Act 1995 (Cth)
[39] Part 1 of the Sands Report includes some opinion evidence about economic conditions
in the retail industry as well as data from the ABS and other sources. Dr Sands draws the
following conclusion from this data:18
‘The slowdown in retail sales in real prices, decline in retail firm operating profitability,
increase in retail business closures and aggregate retail hours worked not recovering to
2007 peak, indicates that despite some improvement since 2012, the retail industry
continues to struggle.’
[40] Dr Sands’ curriculum vitae records his qualifications in marketing and his experience
in the fields of retail and consumer services market research.19 In his Statement, Dr Sands
deposes to having had over 11 years’ experience in the fields of retail and consumer services
market research.20 It is accepted that Dr Sands has specialised knowledge based on his
training, study and experience in the fields of retail and consumer services market research.
[41] The short point put on behalf of the SDA, and supported by United Voice, is that in
the parts of his evidence which are the subject of the objection Dr Sands purports to provide a
commentary on prevailing economic conditions in the retail industry and he does not have the
requisite specialised knowledge to ground such opinions.
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[42] In a written submission dated 18 September 2015 the ARA, MGA and NRA
(collectively, the Retail Employers) advance the following submission:
“The matter is likely to be unduly complicated by stripping away opinion evidence of Dr
Sands’ report, intermixed with factual evidence. Much of Part 1 sets out raw data from the
Australian Bureau of statistics and other sources. It is an efficient way for such evidence to be
tendered and for the Commission to inform itself – i.e. the factual material being set out within
Dr Sands’ report.
No objection has been taken to the factual evidence in his report. The opinions expressed by
Dr Sands perhaps could also be made by way of submission. In the circumstances, given the
nature of this and previous proceedings, the report should be admitted into evidence. The
source data being included in the report enables the Commission to make an appropriate
assessment of the opinions by Dr Sands.”21
[43] Dr Sands has provided a supplementary statement dated 17 September 2015 in which
he asserts that the opinions he has expressed in Part 1 of his report (and repeated in the
Executive Summary and Research Summary) are based on his specialised knowledge.
Paragraph 4 of the supplementary statement states:
“I refer to my curriculum vitae, annexed to this statement as exhibit ‘SS3’, which outlines my
qualifications and experience and further refer to the following:
(a) As Research Director at the ACRS research unit within Monash Business School's
Department of Marketing my role is to oversee and conduct primary and secondary research.
Our research includes publications focused on monitoring and tracking economic conditions in
the Australian retail industry. I have overseen these publications for seven (7) years.
(b) My qualifications include a Bachelor of Commerce (Marketing), Bachelor of Arts
(Psychology) and PhD (Marketing). While my PhD topic area was the field of marketing, I
employed advanced statistical methods as part of this process, specifically discrete choice
modelling and multivariate analysis.
(c) In terms of macro economic conditions in retail, I have published a peer-reviewed article in
the International Journal of Retail & Distribution Management, entitled Retailers' strategic
responses to economic downturn: insights from down under.”
[44] In the course of oral argument counsel for the Retail Employers relied on paragraph 4
of Dr Sands’ supplementary statement in support of the contention that Dr Sands had the
requisite economic expertise to ground the opinions expressed in Part 1 of the Sands Report.22
[45] On the material presently before us we are not persuaded that Dr Sands has the
requisite ‘specialised knowledge’ to ground the opinions he expresses about economic
conditions in the retail industry. However, as submitted by the Retail Employers, much of
Part 1 of the Sands Report simply sets out data from the ABS and other sources. This
material is relevant to the Review and should be admitted. In our view it is unnecessary to
separate out the inadmissible opinion evidence from the factual evidence. As the Retail
Employers acknowledge, the opinions expressed by Dr Sands could also be made by way of
submission and that is how we propose to treat them – as submissions rather than expert
opinion. The Sands Report will be admitted on that basis.
[46] As we have mentioned, a substantial number of objections to evidence have been filed.
The remaining objections will be the subject of a conference before Vice President Catanzariti
at 10am on Thursday 24 September 2015, in Melbourne.
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PRESIDENT
Appearances:
K. Burke and C. Dowling for United Voice
J. Stanton and S. Wellard for Australian Hotels Association, Accommodation Association of
Australia
M. Seck for Pharmacy Guild
R. Clarke for Restaurant and Catering Industrial
P. Wheelahan for ARA/NRA/MGA
L. Izzo for Australian Business Industrial and NSW Business Chambers Ltd
S. Moore QC for Shop, Distributive and Allied Employees Association
H.J. Dixon SC for Ai Group
Hearing details:
2015.
Sydney, Melbourne, Brisbane and Adelaide (video hearing):
September 8 and 18
Printed by authority of the Commonwealth Government Printer
Price code C, PR572108
1 [2015] FWCFB 5357
2 [2015] FWCFB 6467
3 King v Freshmore (Vic) Pty Ltd, Print S4213, 17 March 2000; WA Meat Commission v Australiasian Branch, Matter No.
890 of 1993, 5 August 1993, WAIRC per Sharkey P, Coleman C and Gregor C; PDS Rural Products Ltd v Corthorn
(1998) 19 IR 153 at 155
4 (2004) 143 IR 354
5 See at [63].
6 (2011) 243 CLR 588
7 A chartered chemist, chartered professional engineer and retired senior lecturer in chemistry.
8 See [30]–[42] and [43] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ.
9 Dasreef [31]–[32], citations omitted.
10 Dasreef, [35].
11 Dasreef, [39].
12 Dasreef, [42].
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13 Ibid.
14 (2014) 253 CLR 122 at [21]–[25]
15 The 17 September 2015 Statement indicated that the objections to the Baxter affidavit and the Pratley affidavit would also
be dealt with during the hearing on 18 September 2015, but the objections to these affidavits were not pressed.
16 United Voice submissions on objections to the Employers’ Expert Evidence and Common Material, 15 September 2015 at
paragraph 21
17 Only the Restaurant and Catering Association seek that the Commission draw findings from this aspect of Professor
Lewis’ report: see RCI Findings, 13.
18 Sands Report, p viii.
19 Statement of Sean Sands, Exhibit SS1, filed 29 June 2015.
20 Statement of Sean Sands, filed 29 June 2015 at [5].
21 Written submission on behalf of the ARA, MGA and NRA: Objections to Expert and Common Evidence 18 September
2015 at paragraph 12.
22 Transcript at paragraph 7094-7103
