PN4205

VICE PRESIDENT HATCHER: All right. The next issue is fares and travel?

PN4206

MR SCHMITKE: Yes. Your Honour, if I just might raise a couple of housekeeping matters first to begin with.

PN4207

VICE PRESIDENT HATCHER: Yes.

PN4208

MR SCHMITKE: The first is in relation to the draft determination that Master Builders has provided to the Commission. It occurred to me last night there's a spelling error consistently in all of them with respect to the spelling of Commissioner Harper-Greenwell's last name and if I can just have that corrected and, of course, apologise unreservedly for making that error.

PN4209

The second matter that I would just wish to raise is in relation to a matter which we may get to today. I think it's item 12 and it deals with an application by the AMWU. Master Builder's position at this point, or up to this point, has been to not oppose that particular ‑ ‑ ‑

PN4210

VICE PRESIDENT HATCHER: Which item was this again?

PN4211

MR SCHMITKE: It's item 12.

PN4212

VICE PRESIDENT HATCHER: Yes.

PN4213

MR SCHMITKE: It deals with forepersons and supervisors. We indicated that we do not oppose it. I've got revised instructions last night, and that is that we no longer wish to make any submission in respect of that, and to that end, that position we would seek to have withdrawn.

PN4214

VICE PRESIDENT HATCHER: So you've gone from not opposed to make no submissions?

PN4215

MR SCHMITKE: Correct.

PN4216

VICE PRESIDENT HATCHER: What's the difference?

PN4217

MR SCHMITKE: They are my instructions.

PN4218

VICE PRESIDENT HATCHER: Right.

PN4219

MR SCHMITKE: Lastly, in terms of the junior rates claim, which we're likely to get to this morning, again in light of the comments from the Commission in the earlier stages of the proceeding, we've had cause to seek some additional advice with respect to the question that was raised. I'm now instructed that in light of that advice, which is uncertain and unclear, that we would not intend to press that particular application in the context of this proceeding. That is not to say that it is not our view that the insertion in to the award of junior rates is something that we wouldn't be desirous to achieve. We do think it would better to achieve the modern awards objective, however, in the context of this proceeding we wouldn't be in a position to address the Commission on that point, and to that end we would not proceed with that claim at this point.

PN4220

VICE PRESIDENT HATCHER: Were you the only claimant for that variation?

PN4221

MR SCHMITKE: Your Honour, no. I'm aware that my colleagues from the CCF ‑ ‑ ‑

PN4222

VICE PRESIDENT HATCHER: CCF was as well.

PN4223

MR SCHMITKE: Yes.

PN4224

VICE PRESIDENT HATCHER: Yes. All right.

PN4225

DEPUTY PRESIDENT HAMILTON: What page is this from the issues paper?

PN4226

VICE PRESIDENT HATCHER: Nineteen.

PN4227

DEPUTY PRESIDENT HAMILTON: Don't worry.

PN4228

VICE PRESIDENT HATCHER: Nineteen.

PN4229

MR SCHMITKE: Page ‑ ‑ ‑

PN4230

DEPUTY PRESIDENT HAMILTON: Nineteen.

PN4231

VICE PRESIDENT HATCHER: Right. Anything else?

PN4232

MR SCHMITKE: Mostly, your Honour, we raised, I think, earlier in the proceedings the question of the national training wage item, and I don't recall there being any view expressed by the Bench with respect to that inquiry which was in the context that it is the clause, that is, we seek to delete is the subject of submissions made by the CFMEU and others in this matter. The clause that we seek to delete is consistent with what has been, I suppose, proposed in another Bench before his Honour the President. That particular Bench is proceeding along the basis that we had proposed in this matter; that being to delete the relevant provision from the award and have a standardised provision attached to a schedule to the Miscellaneous Award. The union have made submissions in that matter. We've appeared in that other matter as well. But there is a cross-app to the extent in this particular proceeding, so if it is ‑ ‑ ‑

PN4233

VICE PRESIDENT HATCHER: As I understand it – I was waiting for you to explain at some stage precisely the variation you sought, but if it's the same variation as is being discussed in that matter then that will be governed by what happens in that matter.

PN4234

MR SCHMITKE: Yes. It is essentially the same variation. The difficulty is that in that matter there has been an invitation by the parties to address whether or not there is a need for a tailored schedule for particular sectors. That is the position that has been advanced by the CFMEU, and, of course, they are also making changes to clause 28 more broadly in the context of this matter, so it may well be that this matter determines an issue in a clause which is subsequently deleted and that's where the confusion arises, so it is nothing more than an administrative complexity and we just seek to utilise the Commission's time most effectively.

PN4235

VICE PRESIDENT HATCHER: Right. Thank you. Are there any other administrative matters to deal with?

PN4236

MR MAXWELL: Sorry, your Honour. I'm reluctant to stand up but just in regard to that last matter that was raised by Mr Schmitke the issue for the Full Bench in the national training wage matter is a discrete matter as to whether modern awards should include the schedule or they should include a reference to the schedule being contained in the Miscellaneous Award. That is that discrete matter that's before them.

PN4237

In these proceedings the MBA is seeking to delete a separate clause in the construction award which is clause 28 which contains higher rates of pay to be paid to civil construction trainees and has other rates of pays to be paid to trainees. They seek to delete that provision. That matter is not before the other Full Bench.

PN4238

VICE PRESIDENT HATCHER: All right. Let's deal with that when we come to it. As I said, I was waiting for a clear explanation of what the change was to form a view as to whether it is the same as the one being dealt with in the other matter or not, so we'll deal with that in order.

PN4239

All right. So fares and travel. Is that you, Ms Adler?

PN4240

MS ADLER: Yes, thank you, your Honour. So part 6 of our December submission deals with our proposed variation to the daily fares and travel allowance which is clause 25 of the on-site award. The draft determination is at attachment J to those submissions also.

PN4241

There are three aspects to our proposed variation. The first is to delete the reference to radial areas which is throughout clause 25. The second is to change the circumstances under which the daily fares allowance set out in clause 25.10 will be paid. The final proposal is to amend the current distant work provision noting that that's different from the living away from home allowances that have been dealt with separately.

PN4242

So I understand that the Bench has copies of some documents that we sent in over the weekend and one of those documents is a comparison. It's called HIA fares and travel patterns allowance claim comparison of current provision and HIA's proposed provision. I've just provided this to the Commission to assist in understanding how and what we propose to change and how that either retains an existing provision or changes that.

PN4243

VICE PRESIDENT HATCHER: Yes?

PN4244

MS ADLER: I won't go through it in detail at this point, but just by way of example on the left column I've extracted the current provision, the right column either extracts or references the provision of our proposed determination so that it's clearer as to what we're actually seeking to change and what we would retain in our proposed variation. So, as I said, I will come back to that and it's just something I've provided to assist the Bench in getting greater clarity over our claim.

PN4245

Firstly, I would just deal with the change in relation to radial areas. As I said, we propose to delete the notion altogether, so it's littered throughout the provision, and the radial areas they use to determine when the entitlement is payable and in what circumstances it arises depending on the distance from the GPO or principal post office in a regional area.

PN4246

We rely on the evidence of Kristie Burt which is marked exhibit 28 and is at attachment K to our submission, and we submit that her evidence shows that the provision is confusing; that the use of those radial areas is difficult to apply and understand. Annexure A to that statement attaches what we call an information sheet which is a document that HIA has put together to provide to members to help explain different aspects of the award in this case. This one deals with the fares and travelling allowance under the on-site award. That document is four pages long, has a number of charts and diagrams to explain how the radial areas work, and when the entitlements arise and what they are. We say that that statement and that information sheet shows how confusing the provision is; that it's not easy to understand; and that there are actually eight different circumstances contemplated by clause 25 and that's set out in that information sheet. I'll come back to that information sheet as well.

PN4247

The other point that I'd like to make about the use of the radial areas is they depend on the post office, the GPO in the capital city or, as I said, the principal post office in a regional area. There was another document that has been provided to the Bench I understand. It's a senate committee inquiry into the performance, importance and role of Australia Post in Australian communities and its operations in relation licensed post offices, and I provide this document simply to provide some context within which the maintenance of the use of the post office could easily become outdated and outmoded. Under our proposed provision we say that you should use the employee's usual place of residence as the sort of central point in which to measure the distances from, and largely that comes down to simplicity firstly, and, secondly, this document indicates that the use of postal services is declining. There have been closures of post offices and we just don't know what's going to happen with Australia Post, and how many post offices are going to remain.

PN4248

In that document I draw the Bench's attention to paragraph 3 in the foreword and it says that:

PN4249

The committee believes the future of postal services in Australia is at a crossroads. As a consequence there are a number of significant far-reaching issues that need to be addressed. These include the type and scale of the postal network that can be sustained into the future, the funding options available to maintain the network, and how, and to what extent, the current community service obligations can be preserved.

PN4250

There's also information there about post office closures at page 77 and 78. They talk about the closures of licensed post offices which I know are not the GPOs, which is what's referenced in the award, but it definitely indicates that post offices are closing, so in light of the modern awards objectives and making sure that the award is relevant and modern there's definitely a context within which we need to consider this provision. That's as far as I'll take that document.

PN4251

Moving to the proposals in relation to when the allowance is paid. So as I mentioned, we submit that – or our proposed variation seeks to amend the current clause in two ways; the first is to change the provision so the allowance is not paid on a rostered day off which it currently is; the second aspect is that the daily fares allowance would not be paid to an employee who is provided with a company vehicle, and those changes are outlined in our draft determination.

PN4252

Again, the statement of Ms Burt outlines the unfairness experienced by members of the current provision, particularly where a company car is provided and the employer is also required to pay the daily fares allowance under the award despite providing that company vehicle.

PN4253

VICE PRESIDENT HATCHER: Ms Adler, yes, I understand those two aspects, but in terms of the abolition of the radial areas, how does your proposal work in terms of the payment of the entitlement?

PN4254

MS ADLER: So if I take you to the comparison document that might be the easiest place to start. So 25.1(a) of our proposal we'd say that an employee is to be paid an allowance of $17.43 per day where the employee starts and finishes work on a construction site. It's just paid when you start and cease work on a construction site.

PN4255

What we have done is insert clause 25.3 which is on the bottom of page 2 to deal with travel that's more than 50 kilometres from the employee's usual place of residence and we say that that deals with a number of other travel related provisions which I'll come to explain in more detail but instead of the radial area I guess the bottom line is we use the employee's usual place of residence as the, I guess, the distance measurer, for lack of a better word, instead of the radial areas.

PN4256

VICE PRESIDENT HATCHER: So that distance measurement is measured how? By road or by radius or by what?

PN4257

MS ADLER: I mean, that is a question that the unions have put in their reply submission, and is not currently dealt with in the current provision, so we haven't sought to deal with it.

PN4258

VICE PRESIDENT HATCHER: It seems to me that you could easily travel in excess of 50 kilometres by road and stay within a radial area of one of the metropolitan cities.

PN4259

MS ADLER: That may very well be the case but the current provision doesn't deal with that either.

PN4260

VICE PRESIDENT HATCHER: I thought the effect of the current provision was if you stayed within the radial area you didn't get the distant work payment? I might be wrong about that.

PN4261

MS ADLER: Under 25.2 of the current clause the employee is entitled to the allowance when the construction site is located within a radius of 50 kilometres from the GPO, so that's sort of the first limb, and then once you start travelling beyond the 50 kilometres or between different radial areas, depending on where the post offices are, that's when you start trying to calculate further entitlements and allowances depending on those travel arrangements.

PN4262

VICE PRESIDENT HATCHER: Right.

PN4263

MS ADLER: So coming to the distant work provision that we propose and it may assist to go back to that information sheet that's attached to annexure A of Ms Burt's statement. We say that the current provisions are unwieldy. There are about five provisions that deal with travelling between construction sites between different radial areas on top of the sort of base line entitlement which is dealt with in 25.5. So clauses 25.4, 25.5, 25.6, 25.7 and 25.9 we say deal with situations that involve travelling between a radial area between constructions sites, so I think it might assist if, with the patience of the Bench, I just talk through a few of those provisions.

PN4264

So the first is clause 25.4, and that deals with a situation in which an employee makes their own way to work from a country area and they are entitled to the daily fares allowance under 25.2, and that's described in annexure A at point 3 of that document.

PN4265

The next provision, clause 25.5 provides an entitlement for when an employee is travelling outside a radial area outlined under clause 25.2, .3 or .4 or between radial areas, and that's described at point 4 of annexure A and there's a diagram over the page explaining our view anyway of how that provision operates.

PN4266

Clause 25.6 provides that when an employee who lives outside of a radial area described in the earlier provisions, and they cross a radial area to attend a construction site, is entitled to the daily fares allowance but will not be paid for the time spent in travelling between the radial area and the construction, and again that is explained at point 8 of our information sheet. Clause 25.7 provides that an employee is entitled to the allowances prescribed by clause 25.5 which deals with travelling outside of a radial area and that's dealt with by point 4 of annexure A.

PN4267

Finally, clause 25.9 provides that if an employee makes their own way to work, and then is transferred to another construction site, the employee is entitled to either the reasonable cost of the fare for public transport between sites where transport is not provided then they are entitled to 78 cents per kilometre where the employee uses their own vehicle, and that's outlined at point 6 of annexure A

PN4268

So what we've attempted to do with our proposed variation, which is proposed 25.3 for distant work is to condense all of those into one simple straight forward provision that basically says where an employee is required to travel to a construction site more than 50 kilometres from the employee's usual place of residence ‑ ‑ ‑

PN4269

VICE PRESIDENT HATCHER: Sorry, I've lost that. What was your numbering?

PN4270

MS ADLER: 25.3, so on page 2 ‑ ‑ ‑

PN4271

DEPUTY PRESIDENT HAMILTON: Page 3.

PN4272

MS ADLER: ‑ ‑ ‑ of the comparison document is the easiest place to find it.

PN4273

VICE PRESIDENT HATCHER: 25.3.

PN4274

MS ADLER: Sorry, 25.3. I beg your pardon.

PN4275

DEPUTY PRESIDENT HAMILTON: Also on page 3.

PN4276

MS ADLER: Yes. So I'm attempting to show where that clause 25.3 we say addresses the existing provisions.

PN4277

DEPUTY PRESIDENT HAMILTON: So as I understand it instead of a multiple source of calculations you just use one; is that right?

PN4278

MS ADLER: That's what we propose, yes.

PN4279

DEPUTY PRESIDENT HAMILTON: And it's the 50 kay from home measure?

PN4280

MS ADLER: Yes.

PN4281

DEPUTY PRESIDENT HAMILTON: All right.

PN4282

VICE PRESIDENT HATCHER: So does that actually affect anybody's current entitlement is the question?

PN4283

MS ADLER: I think we would concede that it would.

PN4284

VICE PRESIDENT HATCHER: How does it do that?

PN4285

MS ADLER: I guess the approach we've taken is one that swings around abouts. So that under the current provision there might be circumstances where an employee would or wouldn't be entitled to an allowance and similarly under our proposal there would be circumstances where an employee would or wouldn't be entitled to an allowance depending on the radial areas, and particularly given that we've shifted from the 50 kilometres from the post office to the employee's usual place of residence that's obviously going to have some sort of impact.

PN4286

Going to the reply submissions of the CFMEU ‑ ‑ ‑

PN4287

VICE PRESIDENT HATCHER: Just as an example, so if I currently live at Blacktown and I travel to the Blue Mountains, I'm travelling outside a radial area ‑ ‑ ‑

PN4288

MS ADLER: Yes.

PN4289

VICE PRESIDENT HATCHER: ‑ ‑ ‑ so I'll get, what, some sort of distant work?

PN4290

MS ADLER: Yes.

PN4291

VICE PRESIDENT HATCHER: Under your provision if it's Lower Mountains you may still be within the 50 kilometre radius of your home, so you just get the daily fares allowance; is that the way it works?

PN4292

MS ADLER: That same situation could occur under the current provision. So if you stay within the 50 kays from the GPO similar to if you stay within the 50 kays from your usual place of residence.

PN4293

VICE PRESIDENT HATCHER: Yes. So just stay with this example. This is a case where you're not travelling 50 kays but you're going outside the radial area.

PN4294

MS ADLER: Okay.

PN4295

VICE PRESIDENT HATCHER: Under the current award, because you live outer metropolitan you're going to a site outside the 50 kay radius ‑ ‑ ‑

PN4296

MS ADLER: Yes.

PN4297

VICE PRESIDENT HATCHER: ‑ ‑ ‑ under the current award you get, what, a distant – what do you get ‑ ‑ ‑

PN4298

MS ADLER: You would get the daily fares entitlement and then I would suggest that clause 25.3 of the current provision would apply.

PN4299

VICE PRESIDENT HATCHER: So you'd get distant work as well?

PN4300

MS ADLER: There's another provision about travelling outside radial areas as well, 25.5.

PN4301

DEPUTY PRESIDENT HAMILTON: Does anyone actually apply these provisions successfully or is it one endless debate?

PN4302

MS ADLER: I'm hesitant to provide you with an answer, your Honour, and that's why we rely on the information sheet that we provided with the diagrams – well, our members find those quite useful in order to work out exactly what their employees are entitled to notwithstanding that you can actually work out what the 50 kays from the GPO is in the first place.

PN4303

DEPUTY PRESIDENT HAMILTON: How would the Fair Work Ombudsman enforce such a provision?

PN4304

MS ADLER: I don't know, your Honour. So I think ‑ ‑ ‑

PN4305

VICE PRESIDENT HATCHER: Your 50 kays is by road, is it?

PN4306

MS ADLER: Again, we don't specify. The current provision doesn't specify, so we haven't sought to.

PN4307

VICE PRESIDENT HATCHER: Yes. But what does your provision say? I mean, I was just ‑ ‑ ‑

PN4308

MS ADLER: We don't attempt to do that because that would be very different from what's currently in the award.

PN4309

DEPUTY PRESIDENT HAMILTON: So you just adopt the award approach?

PN4310

MS ADLER: That's right. Aside from replacing the radial area with the employee's usual place of residence.

PN4311

DEPUTY PRESIDENT HAMILTON: Is it as the crow flies or by road?

PN4312

MS ADLER: I guess – yes, I ‑ ‑ ‑

PN4313

VICE PRESIDENT HATCHER: If you travel from Penrith to a Sydney city construction site that is more than 50 kays by road.

PN4314

MS ADLER: Yes.

PN4315

VICE PRESIDENT HATCHER: And there's, I know from experience, a lot of construction workers live out at Penrith, so it's an important question.

PN4316

MS ADLER: I agree, and your current award is silent.

PN4317

VICE PRESIDENT HATCHER: Currently they might squeeze into the radial area because it's just a straight line, but on your proposal if it's not a radial area it might make a difference.

PN4318

MS ADLER: It may. I mean, Mr Maxwell may have a different view about that, but from our perspective the current award is silent on how you actually – you know, what mode of transport is the measurement, so we haven't attempted to articulate that in our proposed variation.

PN4319

VICE PRESIDENT HATCHER: All right.

PN4320

COMMISSIONER GREGORY: What advice to provide to your members about that then?

PN4321

MS ADLER: We provide them the information sheet.

PN4322

COMMISSIONER GREGORY: Yes.

PN4323

MS ADLER: And I guess probably cautiously assume that they're driving, given that most would – well, I don't even want to say most. Some would catch public transport. I guess it just depends on what sort of construction work is being undertaken and whether or not they've got a Ute full of tools or not.

PN4324

COMMISSIONER GREGORY: So you advise them it's the distance travelled rather than as the crow flies?

PN4325

MS ADLER: That's right. So if I can just ‑ ‑ ‑

PN4326

COMMISSIONER GREGORY: So that would be the logical measure to take then, would it?

PN4327

MS ADLER: Just the distance travelled?

PN4328

COMMISSIONER GREGORY: Yes.

PN4329

MS ADLER: Yes.

PN4330

COMMISSIONER GREGORY: By road or by rail?

PN4331

MS ADLER: Yes.

PN4332

COMMISSIONER GREGORY: Okay.

PN4333

MS ADLER: I guess each business would probably – again, I don't want to try and provide evidence from the Bar table, but, you know, if you're employees are catching the train, then that may be the measure that you use, whereas if your employees are driving that may be the measure you use. Not that that's correct or incorrect.

PN4334

DEPUTY PRESIDENT HAMILTON: It seems to me if you want to simplify it you need to deal with that issue one way or another.

PN4335

MS ADLER: Yes.

PN4336

DEPUTY PRESIDENT HAMILTON: If you're advising your members that it's distance travelled ‑ ‑ ‑

PN4337

MS ADLER: Yes.

PN4338

DEPUTY PRESIDENT HAMILTON: ‑ ‑ ‑ then that presumably is the measure you'd adopt.

PN4339

MS ADLER: Yes.

PN4340

VICE PRESIDENT HATCHER: So your proposal for the people in metropolitan areas then moves to an individualised approach, that is, you'd have to have a measurement for every single worker's residence to worksite?

PN4341

MS ADLER: Yes.

PN4342

DEPUTY PRESIDENT HAMILTON: You can do that by computers and maths, can't you?

PN4343

MS ADLER: Yes. Yes.

PN4344

DEPUTY PRESIDENT HAMILTON: I mean, we ‑ ‑ ‑

PN4345

MS ADLER: I assume that that is used now.

PN4346

DEPUTY PRESIDENT HAMILTON: You'd have a printout of a map ‑ ‑ ‑

PN4347

MS ADLER: Yes.

PN4348

DEPUTY PRESIDENT HAMILTON: ‑ ‑ ‑ and that would give you the ‑ ‑ ‑

PN4349

MS ADLER: Yes.

PN4350

DEPUTY PRESIDENT HAMILTON: Isn't that right?

PN4351

MS ADLER: You can get the distance to certain locations.

PN4352

DEPUTY PRESIDENT HAMILTON: By various means. Yes.

PN4353

MS ADLER: Yes. Yes. I do note that the union did raise an issue with the administrative costs associated for keeping track of where employees live, and I guess my response to that would be the current provision is significantly more onerous than any need to keep track of where your employees are located. That's a much simpler administrative job than trying to apply and understand the current provisions.

PN4354

If I can just deal with a couple of other matters raised in the CFMEU's submission. At paragraph 187 of their submission they talk about the history of the radial areas not surprisingly hasn't had a long history, and I guess the two points that I would make in response to that is that the use of these radial areas seems to have been a largely settled issue since disputes in 1988 to 1990, and that dispute led to a decision about that matter in 1990. So, again, we're dealing with a dispute and we're dealing with a provision that's over 27 years old. My understanding is that again these were part of a package of changes agreed to by the parties. So from our perspective these provisions actually haven't fully been re-assessed for a very, very long time.

PN4355

The CFMEU also make a number of assertions at paragraph 186 about the distant work provision that we were discussing. Again, you know, some of the matters are not specified in the current clause such as the mode of transport. There's a question about how the provisions would apply to a casual employee. The current provision doesn't deal with that as it is now, so we didn't try and deal with things which were outside the scope of the current clause, and I've addressed the other matters that I sought to raise in reply to those matters raised.

PN4356

VICE PRESIDENT HATCHER: So just that point, so is there some doubt about the application of the current clause for casuals, is there?

PN4357

MS ADLER: I don't think there's doubt about it. I think that the provision applies and casuals are not excluded from its application, so I was sort of surprised a little bit about the question in the union reply submission about how it would work for casual employees.

PN4358

Just finally we say that our proposed variation helps the award better meet the modern award objectives. What we propose is simpler. It's easy to understand. It reflects more modern work practices and, as opposed to some assertions in the union's submission that we're simply trying to find a way out of paying the allowance that's not the case at all. We want our members to comply with the provisions, and we submit that our variation would assist them in doing that better. They're all the submissions that I wish to make.

PN4359

VICE PRESIDENT HATCHER: You said that currently the allowance is payable on rostered days off, is it?

PN4360

MS ADLER: Yes.

PN4361

VICE PRESIDENT HATCHER: What says that?

PN4362

MS ADLER: It is clause 25.10 off the top of my head;. 26.10(a)(ii).

PN4363

VICE PRESIDENT HATCHER: Right.

PN4364

MS ADLER: So I guess the other observation about the provisions compared to what we propose is that we have all in one provision listed the circumstances in which the allowance is paid and is not paid. Under the current provision working that out you need to read all 10 sub-clauses. So at our proposed variation, 25.1(c) we list – well, sorry (a) and (c) we say when it is paid and then all of the circumstances in which is not paid in the one provision. So it is very clear on the face of the award what the entitlements are and when they are applicable.

PN4365

VICE PRESIDENT HATCHER: There's no exclusion where the employer provides transport?

PN4366

MS ADLER: No, there is not. If you have a look at current clause 25.8 part (a) talks about where an employer provides or offers to provide transport free of charge the employee is not entitled to the allowance, however under sub-clause (b) the daily fares allowance will be payable despite the employer providing a vehicle free of charge. That is a source of confusion for members and one of the aspects of our variation is to change sub-clause (b).

PN4367

DEPUTY PRESIDENT GOSTENCNIK: You're also proposing to change the current provision so that the allowances are not taken into account in calculation of annual leave loading?

PN4368

MS ADLER: That's right, your Honour. Yes.

PN4369

COMMISSIONER GREGORY: How do you reconcile 25.8(a) and (b)?

PN4370

MS ADLER: In a practical sense we read each sub-clause on its own, but obviously we see that there's an issue on the face of the provisions in that even in circumstances where – well, the underlying proposition behind the provision is that the allowance recognises travel patterns and costs peculiar to the industry whereas 25.8 says that despite the fact you are travelling if the employer provides a vehicle you don't get the allowance which, to me, seems to contradict the underlying intent of what the fares allowance is about as described in the award compared to 25.8(b) which says, "Well, we'll give you a car but you still get the allowance".

PN4371

VICE PRESIDENT HATCHER: Is the allowance purely expense related or does it have some element of disability associated with having to change from workplaces, from one project to the next, and the hassles associated with that?

PN4372

MS ADLER: I guess I'd probably say two things in response to that, your Honour; the first is that 25.1 of the current provisions says that the fares and travel patterns allowance recognises travel patterns and costs peculiar to the industry which include mobility in employment, and the nature of employment on construction work, so sort of got that proposition sitting there within the award. On the other hand, we would also say that there is obviously an expense component to the allowance to cover the cost of that travel involved in working in construction work and that where you are provided a vehicle you're not incurring that expense, but under the current provision the employer is still required to pay the allowance.

PN4373

VICE PRESIDENT HATCHER: Right. Thank you.

PN4374

MS ADLER: Thank you, your Honour.

PN4375

VICE PRESIDENT HATCHER: Mr Schmitke?

PN4376

MR SCHMITKE: Thank you, your Honour. There are three items relevant to this particular provision about which we've made a claim. They deal with the clarification of the application of this clause, an extension of the radial areas to 75 kilometres, and a clarification of one of the allowances to which Ms Adler was just referring with respect to the employee's use of the vehicle where provided by the employer.

PN4377

I might just deal firstly with the first aspect. I should mention that these matters are canvassed in our submissions on pages 18 through to 24, and they're relevant to items 10 through to 13 in the draft determination that was provided to the Commission on Friday. I should just clarify from the outset that in relation to that draft determination, item 10, which clarifies the particular provision we're talking about regarding the application of the clause, the draft determination makes reference to a radius of 75 kilometres. It's currently 50 in the actual award, so it sort of reflects the second item which I will deal with.

PN4378

In terms of this particular provision, clause 25.2 is the relevant clause. The existing provision talks about:

PN4379

An employee, other than an employee in the metal and engineering and construction sector who's required to cease work at the employer's workshop, yard or depot other than on a construction site must be paid an allowance of –

PN4380

And the allowance is spelt out. There's some history in terms of this particular provision between the parties which I will attempt to summarise. It's more detailed in our submission, but essentially the clause is derived from two previous clauses in the National Building Construction Industry Award 2000 and the National Metals Engineering On-site Construction Award 2002. Those two particular awards were, I suppose, combined or provisions that were common were combined in the modernisation process. But the clause that is reflected in the award currently was reflected in the NBCIA award, and in terms of the equivalent provision in the metals award, National Metals Award, there was a particular exemption that was provided with respect to those individuals undertaking work in that sector, and that exemption was that they wouldn't receive the allowance for any day that the employee started and ceased work at the employer's workshop, yard or depot. So in other words, they would travel to their normal place of work, they'd start work, and then in working hours travel to the construction site, and then return back to the depot at the end of the day, and in that situation they didn't receive the allowance.

PN4381

The result of ‑ ‑ ‑

PN4382

VICE PRESIDENT HATCHER: So they're travelling to the construction site in paid time?

PN4383

MR SCHMITKE: Correct, yes. Unlike being required to travel directly to the site, and of course that particular provision was covered.

PN4384

It got lost during the modernisation process and, as a result, the combination of those clauses, and I can firstly fully appreciate how this could have occurred, meant that the distinction between those two types of employees was lost. It now means that the employees in that sector get the allowance even though they're starting at their normal place of business and finishing at their normal place of business.

PN4385

We've tried to resolve this matter on a number of occasions. There is a case that we referred to in our submissions which is [2011] FWA 6966. It was a matter before Watson SDP. The long and short of it is that – I refer to it as the comma case. The adjustment of a comma within the particular provision had led to problem regarding how it's to be interpreted. Watson SDP sought to fix it and to clarify its operation and we say that it didn't clarify the operation.

PN4386

VICE PRESIDENT HATCHER: So why doesn't it clarify it?

PN4387

MR SCHMITKE: The existing provision essentially operates to the effect of that employees get the allowance except for those who are in the sector who are required to commence and cease at the employer's workshop, yard or depot other than on a construction site. That's still unclear. We say that's unclear.

PN4388

VICE PRESIDENT HATCHER: What's unclear about it?

PN4389

MR SCHMITKE: It's interpreted to mean that employees get the allowance unless they're working in the metal and engineering construction sector, and they're required to commence or cease work at their workshop or depot, and that that depot is other than on a construction site.

PN4390

VICE PRESIDENT HATCHER: What should it say?

PN4391

MR SCHMITKE: Sorry?

PN4392

VICE PRESIDENT HATCHER: What do you say it should say?

PN4393

MR SCHMITKE: Our determination is just makes it very simple and says – leaves the existing provisions as they are but has a sub-clause that says, "Clause 25.2(a) does not apply to employees in the metal and engineering sector who begin and cease work at the employer's workshop yard". So this is merely a clarification provision.

PN4394

VICE PRESIDENT HATCHER: I'm not grasping the difference.

PN4395

MR SCHMITKE: Yes.

PN4396

DEPUTY PRESIDENT GOSTENCNIK: Is it suggested that there are some employer workshop yards or depots that are on the construction site; is that the point?

PN4397

MR SCHMITKE: There's a number of problems.

PN4398

DEPUTY PRESIDENT GOSTENCNIK: And therefore they don't get the benefit of the exclusions; is that ‑ ‑ ‑

PN4399

MR SCHMITKE: There's that aspect. There's also the aspect of the industry itself, this is a common clause which members make inquiries about in terms of how it's to be read, and that is because when you look at that particular clause the sector is used to the provisions that existed in the pre-modern awards and it is a source of uncertainty and it's unclear.

PN4400

Again, we ask that the Commission consider this particular proposal in the context of clarity; simple to understand provision. We're not seeking to change anything. It's just simply seeking to resolve an issue which has been a longstanding source of contention for no reason other than how it's to be read in a practical sense. I do not ‑ ‑ ‑

PN4401

VICE PRESIDENT HATCHER: So if it simply said, "An employee is required to start and finish work at a construction site is entitled to", would that do the job?

PN4402

MR SCHMITKE: The problem is that that then doesn't necessarily cover off the metal and engineering sector, so that's the distinction.

PN4403

DEPUTY PRESIDENT HAMILTON: The problem with 25.2 is it has about four or five different operative conditions all of which interrelate.

PN4404

MR SCHMITKE: Yes, you're right, your Honour, and in fact ‑ ‑ ‑

PN4405

DEPUTY PRESIDENT HAMILTON: And I can't follow it.

PN4406

MR SCHMITKE: Of course ‑ ‑ ‑

PN4407

DEPUTY PRESIDENT HAMILTON: Maybe I'm a bit slow but I actually can't follow it.

PN4408

MR SCHMITKE: In a matter before Watson SDP it was noted that in one case the comma fell off as an administrative oversight. Then the comma was re-inserted as an administrative correction and, as I said, Master Builders and the CFMEU have arbitrated this case over the location of the comma. I'm glad there's no exclamation marks in this instrument we'd be in a High Court. We're just simply seeking to provide some clarity.

PN4409

DEPUTY PRESIDENT GOSTENCNIK: But doesn't Ms Adler's proposal have that effect?

PN4410

MR SCHMITKE: We would prefer our solution because we cover off on the same areas in many respects.

PN4411

DEPUTY PRESIDENT HAMILTON: Do you think Ms Adler's solution is simpler than the current clause?

PN4412

MR SCHMITKE: To the extent that – look, actually we would prefer our clause. That is not to say that the HIA's clause is not an improvement on the current situation, but we think ours is much simpler. Given the history of this, given that we're arbitrating over where a comma is we do think that our provision is much more sensible.

PN4413

MR MAXWELL: Your Honour, from my recollection, I was involved in that case regarding the comma. I don't believe it was by arbitration. My understanding was it was by consent of the MBA and CFMEU.

PN4414

VICE PRESIDENT HATCHER: Right. Thank you.

PN4415

MR SCHMITKE: If I might just deal with the next aspect of our claim which is to extend the operation of radial areas provision. What we seek to do here is simply to change the existing radial area of 50 kilometres to 75 kilometres and make that consistent throughout the award.

PN4416

Again, there is a long history in terms of the radial areas. I won't seek to traverse the grounds that are covered by Ms Adler to the extent that it was common, but simply is this; the pre-reform award used to utilise particular different ways to measure what a radial area was in terms of location. So within New South Wales, for example, there's references to the County of Cumberland, Country of Camden and so forth. There were also references to particular geographic areas in the pre-reform award in Victoria, for example, Bendigo and so forth. Within other States there was a simple reference to a 30 kilometre or other defined by kilometre type of arrangement. Obviously through the modernisation process this was considered to be a State difference and the 50 kilometres was adopted and established consistently throughout the award.

PN4417

Our essential submission here, or the base line submission is that we think times have changed; the 50 kilometres was set up at a point in time where there wasn't necessarily the infrastructure that exists now. I am aware that the provision was in an award from 1972, and as a result we just think that if we're going to use the instrument of 50 kilometres then to define a radial area it should be expanded to take account of things like Penrith, for example. So right now I could travel, as your Honour pointed out before, from this ‑ ‑ ‑

PN4418

VICE PRESIDENT HATCHER: Nothing has changed about the trains from Penrith since the 1970s I can assure you.

PN4419

MR SCHMITKE: Yes. But we have the M4 and the M7, your Honour.

PN4420

VICE PRESIDENT HATCHER: No construction worker drives to work in the city, I can tell you that.

PN4421

MR SCHMITKE: But this is not necessarily specific to Sydney. This is of course a change across the board. Essentially, as I say, it's about modern infrastructure. It's the fact that I, as an individual employee myself, drive between Canberra and Sydney every week. I go through three traffic lights and I do it in less than three hours. That is not something that used to occur. We've got all sorts of new ways ‑ ‑ ‑

PN4422

DEPUTY PRESIDENT GOSTENCNIK: We'll let the police know about that shall we?

PN4423

VICE PRESIDENT HATCHER: You obviously don't do it in peak hour that's for sure.

PN4424

MR SCHMITKE: I leave at 5.30 on Friday night from Canberra.

PN4425

MR CRAWSHAW: Or when they're doing roadworks.

PN4426

MR SCHMITKE: Just keeping people's members employed. But I suppose the simple facts are that we need to make sure that this particular provision hasn't been adjusted for a while, it needs to keep up with what's taking place these days within the sector. It is not unusual for employees to travel in excess of that 50 kilometres. In fact, you can't drive, as your Honour pointed out, to Penrith without getting through it. You go from one bottom end of Sydney to the top, and given that we have new cars; we've got utes; we've got different infrastructure; we do have better public transport; for all of those reasons we say that it's a sound basis to make the adjustment that we seek. The evidence of Mr Glover I would also refer the Commission to.

PN4427

If there's no other questions on that then I would move to the third aspect, which is the provision of transport. We provide a different solution to the same issue that Ms Adler outlined being that we make it clear by seeking to insert the words that the employee is provided with a vehicle and is done so for no other private use. The only ‑ ‑ ‑

PN4428

VICE PRESIDENT HATCHER: Sorry, I missed that. What did you say?

PN4429

MR SCHMITKE: I'm sorry?

PN4430

VICE PRESIDENT HATCHER: I just missed that last bit. What did you say again?

PN4431

MR SCHMITKE: And for no other private use.

PN4432

VICE PRESIDENT HATCHER: Right.

PN4433

MR SCHMITKE: So that's reflected in our determination. It's additional words to be added in at the end of existing clause 25.8 sub-clause (b).

PN4434

The only other thing I would add to Ms Adler's submission is to refer the Commission to the earlier part of that particular clause that says that the allowance prescribed as payable on any day the employer provides a vehicle free of charge to the employee for a purpose related to their contract of employment. They're the words I emphasise; "related to their contract of employment". And the employee is required by the employer to drive their vehicle from home to their place of work and return.

PN4435

So we would say that that adds additional weight to the basis for clarification. It is clear that the provision of the vehicle was only done so for the purpose related to an employee's duties and arising under their contract of employment, and we would seek that the clarification be made on that basis.

PN4436

DEPUTY PRESIDENT GOSTENCNIK: Sorry, what precisely is the clarification? That is, that such employees are not entitled to the allowance; is that the ‑ ‑ ‑

PN4437

MR SCHMITKE: Yes. So this particular one says that it's – sorry, it is payable; the allowance is payable.

PN4438

DEPUTY PRESIDENT GOSTENCNIK: Yes. The clarification you seek is that it not be payable?

PN4439

MR SCHMITKE: The clarification is that they're not to use the vehicle for private use in receipt of it.

PN4440

DEPUTY PRESIDENT GOSTENCNIK: I see. Is there any magic in the words that the employee is required by the employer to drive the vehicle? As opposed to being provided with a vehicle?

PN4441

MR SCHMITKE: There is to the extent that it relates to the rest of the clause being required to drive it to their home and, you know, and back, so ‑ ‑ ‑

PN4442

DEPUTY PRESIDENT GOSTENCNIK: As opposed to being permitted to do so.

PN4443

MR SCHMITKE: Correct. Indeed it's also provided in the context of a purpose related to their contract of employment.

PN4444

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN4445

MR SCHMITKE: So there's two aspects to that clause. If it pleases.

PN4446

VICE PRESIDENT HATCHER: Thank you. Any other employer submissions? Mr Boanza?

PN4447

MR BOANZA: Yes. Thank you, your Honour. The CCF has put two applications to vary the provisions of transport in this award. Our first application very similar to Housing Industry and Master Builders, we are seeking to have the provision where the employer pays the travel allowance to an employee who is provided with a company vehicle, for very similar reasons to those already exposed. There is an inconsistency between two employees; one with a company vehicle; one without a company vehicle both being paid the same travel allowance. We also say that those decisions were made some years ago, and that it's perhaps now for the Commission to re-consider the basis upon which the travel allowanced is paid to an employee who already has a company vehicle and does not incur any cost in coming to and from work.

PN4448

VICE PRESIDENT HATCHER: So does that assume the employer is paying for the fuel as well?

PN4449

MR BOANZA: Yes. The employer pays for the fuel as well, and full maintenance of the vehicle. The employee simply drives it.

PN4450

DEPUTY PRESIDENT HAMILTON: And insurance.

PN4451

MR BOANZA: And insurance absolutely. Yes. So it's a full maintained company vehicle, usually it's a utility and is used by the employee. Where it's the same employee or a different employee in the same company catching a bus to work every day is entitled to the same allowance. We say there's some inconsistency there and needs to be addressed.

PN4452

The second part of our changes to the travel allowance is in relation to employees who do not work on a building site, or do not work on a building site regularly. There is confusion in the award in relation to whether those employees are entitled to the daily travel allowance or not. There is an inconsistency in a difficulty in reading the award. This has already been exposed in clause 25.2 where the award says that:

PN4453

An employee other than an employee in the metal and engineering construction sector who is required to commence or cease work at the employer's workshop, yard or depot other than a construction site must be paid an allowance.

PN4454

We say there's an inconsistency with clause 25.10, early entitlement, which says that:

PN4455

The travel allowance as prescribed in this clause will be payable any day upon which the employee performs or reports for duty or allocation of work.

PN4456

In the civil construction industry because of the extensive use of heavy machinery there is quite a number of employees who perform maintenance work on those vehicles, and do not work on a building site on a regular basis if at all. But on the reading of this award many employees and many employee associations have advised that the daily travel allowance is payable to those employees.

PN4457

In this response to our claim the CFMEU said on their response that in paragraph 153 and 154 of its response the CFMEU says that those employees are not covered by the Building and Construction Award and therefore the allowance is not payable, and we agree with that, and we're not seeking to change that. What we are saying is that an employer or an employee reading these travel provisions in the award would not be crystal clear about that, so ‑ ‑ ‑

PN4458

VICE PRESIDENT HATCHER: Someone maintaining a vehicle?

PN4459

MR BOANZA: No ‑ ‑ ‑

PN4460

VICE PRESIDENT HATCHER: Your example was someone maintaining a company vehicle, wasn't it?

PN4461

MR BOANZA: No, my example is very simple; a diesel mechanic, if he works on the employer's depot and yard ‑ ‑ ‑

PN4462

VICE PRESIDENT HATCHER: That's not even covered by this award, is it?

PN4463

MR BOANZA: Sorry?

PN4464

VICE PRESIDENT HATCHER: That person wouldn't' even be covered by this award, would they?

PN4465

MR BOANZA: That's right. But what we are saying, your Honour, is that that is not clear in this award, and there has been a number of occasions where employers have been required to pay, or believe that they are required to pay, this allowance because of the provisions of 25.10.

PN4466

VICE PRESIDENT HATCHER: But they're just looking at the wrong award.

PN4467

DEPUTY PRESIDENT HAMILTON: Required by who?

PN4468

MR BOANZA: Sorry?

PN4469

DEPUTY PRESIDENT HAMILTON: You said employers have been required; required by whom?

PN4470

MR BOANZA: By employee organisations. So what we are simply seeking to do is to make it crystal clear that those employees are not covered in this award. If one goes to schedule B of this award, diesel mechanics and fitter and turners are covered in the schedule B. They're mentioned as a CW3 as tradespeople working in the industry.

PN4471

VICE PRESIDENT HATCHER: But are these people you're talking about on a construction site?

PN4472

MR BOANZA: Not all the time. On occasions. On occasions they work on construction sites because machinery breaks down. On occasions they do no work on the building site because they're not required to. They're doing maintenance on the yards or depots or garages, and this is where the confusion arises.

PN4473

VICE PRESIDENT HATCHER: All right.

PN4474

MR BOANZA: So our intent is not to change in any way how it operates or deny anyone who is entitled to the travel allowance. What we're seeking to do is to make it very clear that an employee who occasionally works on a building site is not entitled to the travel allowance all the time.

PN4475

VICE PRESIDENT HATCHER: Right.

PN4476

MR BOANZA: Thank you.

PN4477

VICE PRESIDENT HATCHER: Thank you. Any other employer submissions? Mr Crawshaw? Mr Maxwell?

PN4478

MR MAXWELL: Thanks, your Honour. Bear with me for a moment while I just move folders. Your Honours and Commissioners, in regard to the fares and travel matter the CFMEU reply deals with the various proposed variations by the employers in paragraphs 151 to paragraphs 198 which starts on page 64 and goes through to page 79.

PN4479

The only evidence provided by employers in these proceedings to support the variations that they seek there is a brief reference in the HIA survey which I know Ms Adler didn't take you to but deals with the extent to which employers in the residential construction industry provide their employees with vehicles, and when you actually look at the survey the overwhelming majority do not provide their employees with vehicles. There is evidence of Mr Kristie Burt, which is exhibit 28, and then we have the evidence of Peter Glover from the MBA who was cross-examined by the CFMEU last week.

PN4480

In regard to the HIA survey, the statements of Kristie Burt, and the statements of Peter Glover we rely on the objections to that evidence that was contained in our written submission that was dealt with earlier in these proceedings, and I won't return to that.

PN4481

In regard to the evidence of Ms Burt, it is pertinent that she has only spoken to 50 members out of 1300 members in the region that she covers over this clause since May 2013. So we submit this is not a major issue of controversy. In regard to the Glover evidence, under cross-examination, Mr Glover agreed that in regard to the history of the radial areas and what radial areas apply prior to the making of the modern award in 2009, that he was unaware that the radial areas were Adelaide, Tasmania under the ACT Act and the NT Award, and that's dealt with in the transcript in PN2418 through to PN2422.

PN4482

Mr Glover also accepted that the majority of metropolitan areas were not based on the 50 kilometre radius prior to the making of the modern award and that's found in PN2423. Mr Glover did not have any evidence to support his claim to reduce travel time, and that is dealt with in PN2426, nor could he refer to any studies. Mr Glover agreed that the increased congestion has led to increased travel times. That's in PN2431, and that when presented with the Austroads congestion reliability survey he conceded that travel times have not reduced within the major capital cities and that's found in PN2441. Mr Glover only had anecdotal evidence in regard to New South Wales regional areas and that's dealt with in PN2443.

PN4483

If I can then turn to our written submissions. In paragraph 152 and 153 and 154 I deal with the CCF claim in regard to the employees who do not work on construction sites; the employees that the CCF can claim about; diesel fitters and mechanics, and we submit that if they only report to the depot and perform work at the depot, if it is not on a construction site then they are not covered by the award and so the fares and travel doesn't apply.

PN4484

Mr Boanza made some unsubstantiated claims that some employee organisations have made claims on employees working at the workshop. He's provided no evidence of any claims and we are unaware of any claims being made applying to the CFMEU noting that we don't cover diesel mechanics or mechanics.

PN4485

In regard to the issue that Mr Schmitke raised in regard to the comma or the decision regarding the comma, that's dealt with in paragraph 155 of our written submission, and I will just take you to the – I've included an extract from the decision of his Honour, and if I can just take you to paragraph 10 of that decision which is found at the bottom of page 66 of our written submission and Watson SDP found that:

PN4486

However, it is now clear that there is a common position between the major parties - the CFMEU and the MBA - that the inclusion of the comma reverses the intended effect of the exclusion within clause 25.2 and reverses the historical position reflected in clause 20.3.4 of the National Metal and Engineering On-Site Construction Award 2002. There is now agreement between the parties as to the form of the variation required - the removal of the comma following the word 'sector'.

PN4487

So just to dispel with the suggestion by Mr Schmitke that this was somehow arbitrated it is clear that there is a consent position reached between the CFMEU and the MBA and that was reflected in the decision for the variation that was done by his Honour Watson SDP.

PN4488

VICE PRESIDENT HATCHER: So does the HIA draft have the same effect? Just simply says it's payable for each worker when the employee starts and finishes on a construction site?

PN4489

DEPUTY PRESIDENT GOSTENCNIK: Which would include a depot located on a construction site.

PN4490

MR MAXWELL: Yes, to that extent it would. It would address that discrete issue.

PN4491

VICE PRESIDENT HATCHER: It would perhaps, on one view, give it to people who might not currently have it, but, that is, on your organisation's perspective, does the HIA draft in that respect involve any detriment to any employee?

PN4492

MR MAXWELL: It wouldn't deal with all situations because you can have a situation under the award for example with employees, and I suppose canvassing issues that will be dealt with later in the distant work provisions, but if employees are on distant work and they are living on a camp or accommodation away from the site, and they are required to go to a central point for pick up to then travel to the site that the HIA proposal wouldn't cover those people because essentially they all start at the pick up rather than necessarily on the construction site.

PN4493

DEPUTY PRESIDENT GOSTENCNIK: But wouldn't they ‑ ‑ ‑

PN4494

VICE PRESIDENT HATCHER: They're getting picked up from their accommodation.

PN4495

DEPUTY PRESIDENT GOSTENCNIK: Wouldn't that be caught by the exclusion about provision of transport.

PN4496

MR MAXWELL: The provision of transport doesn't take them from the accommodation to the central pick up point.

PN4497

VICE PRESIDENT HATCHER: So what's an example where that occurs? As a pick up point that's not at the place of accommodation?

PN4498

MR MAXWELL: My understanding is on some of the major projects in the north-west shelf ‑ ‑ ‑

PN4499

VICE PRESIDENT HATCHER: Yes.

PN4500

MR MAXWELL: ‑ ‑ ‑ that the employees are accommodated in various camps, and I think in Barrow Island they're actually accommodated on a ship; that those employees then – the ship obviously because that is adjacent to the site, but there are employees that may be around the Burrup Peninsula that may be accommodated in Port Headland, they will be required to travel from Port Headland to a central pick up and they're then transported to the site. So for the time they travel from the accommodation to the pick up they would be entitled to the fares and travel.

PN4501

VICE PRESIDENT HATCHER: Right.

PN4502

MR MAXWELL: The ‑ ‑ ‑

PN4503

VICE PRESIDENT HATCHER: So they currently get the daily fares allowance, do they?

PN4504

DEPUTY PRESIDENT GOSTENCNIK: Sorry, how would that employee not get the daily fares allowance under (a) of Ms Adler's proposal? Are they being paid when they get picked up or are they getting paid when they get dropped off at the site? Because if they get paid when they're dropped off at the site that's where they start work, and they'd be entitled to the allowance.

PN4505

MR MAXWELL: I suppose it depends whether the pick up point would be considered the construction site.

PN4506

VICE PRESIDENT HATCHER: It doesn't matter. If they're starting work on a construction site then it doesn't matter about the pick up point, does it?

PN4507

MR SCHMITKE: Your Honour, if I might just draw the Commission's attention to clause 24.7 sub-clause (d) which potentially is relevant to the discussion you're having with Mr Maxwell.

PN4508

VICE PRESIDENT HATCHER: So what was it? Twenty-four?

PN4509

MR SCHMITKE: 24.7.

PN4510

VICE PRESIDENT HATCHER: 24.7(d).

PN4511

MR SCHMITKE: Sub-clause (d). I should indicate that's a matter we seek to clarify at a later point in these proceedings but it's perhaps relevant to the circumstances.

PN4512

VICE PRESIDENT HATCHER: Thank you. Mr Maxwell, I'm not sure you've given yet an example under which the HIA proposal would cause any detriment to anyone.

PN4513

MR MAXWELL: Your Honour, perhaps if I can take that mater on notice and ‑ ‑ ‑

PN4514

VICE PRESIDENT HATCHER: All right. Thank you.

PN4515

MR MAXWELL: Your Honours and Commissioner, in regard to the further variation proposed by the CCF which is in regard to delete clause 25.8(b), which is also an issue raised by the HIA, and indeed the MBA seeks the variation to clause 25.8(b). This is the issue about the provision of the vehicle. On our view of the award, the award is clear, and it's been a well understood practice that the allowance is only paid to an employee who is provided with a company vehicle if the company vehicle is provided under that contract of employment and they are required by the employer to drive the vehicle to and from work.

PN4516

VICE PRESIDENT HATCHER: The requirement being because it's a vehicle which can be used for work purposes.

PN4517

MR MAXWELL: That's right.

PN4518

VICE PRESIDENT HATCHER: So if it's just a company car in the normal sense they're not entitled to the allowance?

PN4519

MR MAXWELL: They're not entitled to it, no.

PN4520

DEPUTY PRESIDENT GOSTENCNIK: Why do you say provided under the contract of employment? The relevant provision says that it's provided to the employer for a purpose related to their contract of employment.

PN4521

MR MAXWELL: Sorry, it does say related, but it's then a requirement of the employer that they are required to travel to and from work in the company vehicle.

PN4522

DEPUTY PRESIDENT GOSTENCNIK: Yes. All right.

PN4523

MR MAXWELL: Just to give some background to this, this matter was dealt with to some extent in a Federal Court decision that's referred to in both the HIA written submission and our own written submission which relates back to 1981, a dispute involving Builders Labourers Federation and the Master Builders in Victoria. The issue there was whether the provision of a vehicle was considered transport, and the ‑ ‑ ‑

PN4524

VICE PRESIDENT HATCHER: Yes. What paragraph does that refer to?

PN4525

MR MAXWELL: This is referred to in ‑ ‑ ‑

PN4526

VICE PRESIDENT HATCHER: 1-7-6, is it?

PN4527

MR MAXWELL: Paragraph 1-7-6 and we go on and deal with that in 1-7-8 – sorry, in 1-7-7 we provide an extract from the decision and in 1-7-8 we say what we believe to be the importance of that decision and that is that it confirms if an employee was provided with a vehicle and was required to drive to and from home to the construction site then the time spent so driving was work time. The issue is under this award that the payment of the allowance was then to obviate the need for the employer – because it was paid in compensation for that travel time, then the employee was not required to calculate the travel time on each day and if anything ‑ ‑ ‑

PN4528

VICE PRESIDENT HATCHER: So they get the fares allowance as a trade-off for the working time for driving to work?

PN4529

MR MAXWELL: That's correct. So we submit that if the fares allowance is removed from being paid or to the employees provided with a vehicle well then the award should reflect that it's being considered travel time and they be paid accordingly. So we submit that there is more to the variation than meets the eye.

PN4530

VICE PRESIDENT HATCHER: Why do you get the payment on an RDO?

PN4531

MR MAXWELL: You get the payment on the RDO. First of all that was the decision when they introduced the 38 hour week to get the payment on the RDO. It was on the basis that the time for the RDO is reflected in the time that the people worked on the other days, and ‑ ‑ ‑

PN4532

DEPUTY PRESIDENT GOSTENCNIK: For which they'd already received a fare and travel allowance.

PN4533

MR MAXWELL: Which they have already received, but it was on the basis that when they introduced the 38 hour week the intent was not to disadvantage employees in regard to their entitlements, and so because of the two hours then making up the RDO it was decided that the employees would be paid the fares and travel on the RDO, and there's a reference to the decision in the written submission.

PN4534

DEPUTY PRESIDENT HAMILTON: That's treating the allowance not as some sort of compensation for an expense or disability but as something else, isn't it? It's like automatic payment of sick leave or something. It's confusing the two issues.

PN4535

MR MAXWELL: To some extent it may be. Your Honours, I deal with this issue in paragraph 181 of our written submission, and you'll see that the payment of the fares and travel on the RDO was part of an arbitrated decision of the Full Bench of the Australian Industrial Relations Commission. We've said that on the RDO they're also paid for travel time.

PN4536

VICE PRESIDENT HATCHER: There's something about that in that decision, is there?

PN4537

MR MAXWELL: Unfortunately that is the only reference in that decision but it was part of a package that was arbitrated by the Commission at the time.

PN4538

DEPUTY PRESIDENT HAMILTON: Thirty-eight hour a week packages were notoriously opaque and not every one of them bore close analysis to (indistinct). I'm sure this one does, but ‑ ‑ ‑

PN4539

MR MAXWELL: Yes, your Honour. I ‑ ‑ ‑

PN4540

DEPUTY PRESIDENT HAMILTON: Perhaps you should leave that one alone is what I'm saying.

PN4541

MR MAXWELL: Yes. Our submission is that it's a reduction in the existing entitlements. There's no proper evidence to suggest it should be changed. There's just the submissions at the Bar table and we say it should be retained.

PN4542

VICE PRESIDENT HATCHER: In the CFMEU's enterprise agreements how is the issue of daily fares allowance dealt with? Is it dealt with in this amount of detail or is there some other approach taken?

PN4543

MR MAXWELL: The enterprise agreements rely on the raw provision generally. They do have variations in regard to the payments; the daily fares and travel payments is significantly higher in our enterprise agreements, and I think in something like over 200 agreements if you go out of the 50 kilometre radius that the payment is doubled up to a certain radius because after that distance it is then not reasonable to expect people to return home each day and then it's considered living away from home. But generally the agreement provisions follow the award.

PN4544

Your Honour, perhaps if I, rather than going through the rest of our submissions, deal with this issue of the areas that seems to create so much confusion amongst the employer parties but which we believe is a well-settled issue within the industry and as far as we're aware there have been no disputes over this since 1989. The dispute in 1989 was not small. The dispute that led to the arbitration by Commissioner Grimshaw involved employers having to pay millions of dollars because of a certain interpretation of what the award clause meant, so we would stress that the Commission should be very cautious in regard to changing entitlements which may lead to substantial wage claims which, I think, you'll get a great understanding from when I just hand up two exhibits which show the 50 kilometre radial areas of Melbourne and Sydney. Given that Members of the Bench are from Melbourne and Sydney I assume you'd have a greater understanding of those radial areas.

PN4545

So I seek to hand up copies of these maps.

PN4546

VICE PRESIDENT HATCHER: So if there's no objection I'll mark these. So the radial map for Sydney will be exhibit 45.

EXHIBIT #45 RADIAL MAP FOR SYDNEY

PN4547

VICE PRESIDENT HATCHER: The radial map for Melbourne will be exhibit 46.

EXHIBIT #46 RADIAL MAP FOR MELBOURNE

PN4548

MR MAXWELL: Thank you, your Honour. Your Honour, if I can start with the radial map of Sydney. Ms Adler said that it's not clear how the radial areas are calculated; whether it's based on travel by road or some other measurements. That's clearly incorrect. The award talks about a radial area, so you use a radius of 50 kilometres from the GPO in Sydney and you move it around in a circle and that gives you the area within which the fares and travel allowance is paid.

PN4549

So if you look at the map of Sydney, if an employee works at Castle Hill or at Parramatta or Bankstown or Liverpool or at Helensburgh or Umina Beach up in the north they were all paid the same $17.43. There is no other calculation that an employer is required to do. They just have to work out is the construction site within that 50 kay radius. Similarly if you were ‑ ‑ ‑

PN4550

VICE PRESIDENT HATCHER: If I live at Penrith which is just outside the radial area ‑ ‑ ‑

PN4551

MR MAXWELL: You live outside the radial area, and this was the issue that was dealt with in the 1989 case, because if you live outside the area, unless you're specifically required by your employer to cross the boundary area, and you just apply for the job in Sydney, for example, then you are only paid the 17.43.

PN4552

VICE PRESIDENT HATCHER: Say that again?

PN4553

MR MAXWELL: If an employer lives at Penrith ‑ ‑ ‑

PN4554

VICE PRESIDENT HATCHER: Yes.

PN4555

MR MAXWELL: ‑ ‑ ‑ and they apply for a job in Sydney and they get the job then they're only paid the 17.43.

PN4556

DEPUTY PRESIDENT HAMILTON: Why is that?

PN4557

MR MAXWELL: Because the ‑ ‑ ‑

PN4558

DEPUTY PRESIDENT HAMILTON: If they're outside the 50 radius?

PN4559

MR MAXWELL: Because if you look in the wording of the award it says if the employee is required to cross the boundary area. So in that situation the employee has applied for work, they're not being required. It's different, for example, if the employee is working on an existing project in Sydney, and then is required, for example, to go and work on the central coast, which is outside a 50 kilometre radius, then they would be entitled to the fares and travel and the distance from the radial area up at Gosford to the job on the central coast.

PN4560

VICE PRESIDENT HATCHER: So if I live at St Marys ‑ ‑ ‑

PN4561

MR MAXWELL: If you live at St Marys ‑ ‑ ‑

PN4562

VICE PRESIDENT HATCHER: ‑ ‑ ‑ and I've got a construction job at Penrith.

PN4563

MR MAXWELL: At Penrith.

PN4564

VICE PRESIDENT HATCHER: There's a lot going on at the moment.

PN4565

DEPUTY PRESIDENT HAMILTON: Where's St Marys?

PN4566

VICE PRESIDENT HATCHER: Just inside.

PN4567

DEPUTY PRESIDENT HAMILTON: Okay.

PN4568

VICE PRESIDENT HATCHER: What do I get then?

PN4569

MR MAXWELL: If you live at St Marys and you go – perhaps if I say Emu Plains, because the map runs – the radial area runs through Penrith.

PN4570

DEPUTY PRESIDENT HAMILTON: Is Penrith outside or inside?

PN4571

MR MAXWELL: Part of Penrith is inside and part of Penrith is outside.

PN4572

DEPUTY PRESIDENT HAMILTON: Okay. Half and half.

PN4573

MR MAXWELL: Yes.

PN4574

DEPUTY PRESIDENT HAMILTON: Right.

PN4575

MR MAXWELL: To be fair, prior to the 50 kay radius when it was based on the County of Cumberland is the Hawkesbury was the boundary.

PN4576

VICE PRESIDENT HATCHER: Nepean River that is.

PN4577

MR MAXWELL: Sorry, the Nepean River. So in that case if they're required to work outside the radial area then they'd be entitled to the fares of 17.43 and then the additional provisions of the time and kilometres.

PN4578

VICE PRESIDENT HATCHER: So you get a different amount depending on which way you're travelling?

PN4579

MR MAXWELL: Yes.

PN4580

VICE PRESIDENT HATCHER: So if I go from Emu Plains to St Marys I just get the basic allowance?

PN4581

MR MAXWELL: Yes.

PN4582

VICE PRESIDENT HATCHER: If I go from St Marys to Emu Plains I get the basic allowance plus distant work?

PN4583

MR MAXWELL: Yes. This was a swings and around abouts that were recognised when radial areas were agreed to. If we move away from the radial areas and apart from the ABI, I'm not sure that any other employer organisations are actually supporting the HIA's proposal to move away from radial areas, we end up with a different situation. Perhaps if I can give this example; if an employee lives at Blacktown and they were then required to go and work in Cronulla then, depending on which route you took if you were driving, if you went via the M4 and A3 it would be a distance of 49.2 kilometres so it would be within the 50 kilometre radius. However, if they went via the M7 and the M5 it would be a distance of 63.3 kilometres which will be outside of the 50 kilometre distance that the HIA seek to use. So, in that scenario, and there is another provision of the HIA clause, which I'll come to in a second, but on that scenario if the employee travelled by the M7 and the M5, under Ms Adler's proposal, they'd be entitled to the 17.43 fares and travel plus the travel time plus the kilometre rate for the extra 13.3 kilometres that they travelled.

PN4584

Just to, I suppose, to assist those Members of the Bench that live in Melbourne, if I can give an example in Melbourne, you will see that the 50 kilometre radius from GPO in Melbourne covers Mt Eliza, Cranbourne, Yarra Glen, Wallan, Sunbury, all the way down to Little River, and if you have an employee, for example, that lives in Craigieburn, which you will see in the middle of the radius, north of Melbourne, if they went from Craigieburn to Dandenong, and Dandenong is in the south east corner of the radial area, that depending on which way they go, if you went via the M1 it will be a distance of 64.2 kilometres, and if they went via the M2 and the M1 it would be 71.3 kilometres.

PN4585

The issue here is that currently we have, what we say is, a simple radial area around the GPO. It is well understood by the industry that that applies. Under the HIA's proposal the employer would have to calculate the distance for each employee from their home to their job, and each time the job changed they would have to do the calculation.

PN4586

DEPUTY PRESIDENT GOSTENCNIK: Mr Maxwell, can I, so that I understand how all of this works, let's assume we have one of Ms Adler's members who is performing some construction in Caroline Springs on the Melbourne map, and they have engaged an employee who lives in Macedon which is outside the radial map, that employee would be entitled to the initial fares and travel because the location is inside the radial map, that is, the 17.43?

PN4587

MR MAXWELL: Yes.

PN4588

DEPUTY PRESIDENT GOSTENCNIK: And they would be entitled to the provisions of distant work because the – well, sorry, I'm not sure whether that's 50 kilometres, but let's assume for argument sake, Macedon is 51 kilometres away from Caroline Springs, it's probably not looking at that thing, but for argument sake let's assume that for the moment. The employer would then be entitled to the distant work provisions as well; is that right?

PN4589

VICE PRESIDENT HATCHER: I thought you said no before.

PN4590

MR MAXWELL: Sorry, under our provision if the employee lives in Caroline Springs and was required to go over to Mt Macedon, so ‑ ‑ ‑

PN4591

DEPUTY PRESIDENT GOSTENCNIK: No, the employee lives in Macedon ‑ ‑ ‑

PN4592

MR MAXWELL: Okay.

PN4593

DEPUTY PRESIDENT GOSTENCNIK: ‑ ‑ ‑ works in a construction site – well, let's make it clear, so the construction site is in Melbourne.

PN4594

MR MAXWELL: Yes.

PN4595

DEPUTY PRESIDENT GOSTENCNIK: So the location of the construction site is within the 50 kilometre radius so the initial fares and travel amount is payable; yes?

PN4596

MR MAXWELL: Yes.

PN4597

DEPUTY PRESIDENT GOSTENCNIK: In addition to that because the employee lives in Macedon, that is more than 15 kilometres from there, they're entitled to the distant work provisions unless the employee lived there at the time that they were employed; is that the way it works?

PN4598

MR MAXWELL: Under the existing award provision.

PN4599

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN4600

MR MAXWELL: If they lived at Mt Macedon and worked in Melbourne they would only be paid the 17.43.

PN4601

VICE PRESIDENT HATCHER: Even if they're travelling more than 50 kays?

PN4602

MR MAXWELL: Yes.

PN4603

VICE PRESIDENT HATCHER: Okay.

PN4604

MS ADLER: Sorry, I beg to differ.

PN4605

DEPUTY PRESIDENT GOSTENCNIK: Yes. That's ‑ ‑ ‑

PN4606

MS ADLER: Clause 25.6, if the employee is residing outside a radial area and they cross a radial boundary they're entitled to other allowances under the provision, so ‑ ‑ ‑

PN4607

DEPUTY PRESIDENT GOSTENCNIK: Yes. That's my point. They're entitled to the distant work allowance. They're entitled to the metropolitan radial allowance, the distant work allowance, and, in appropriate circumstances, the country radial area as well.

PN4608

MS ADLER: There's a range of entitlements depending on where the employee lives and where the construction site is. Not just what the employer required the employee to do.

PN4609

VICE PRESIDENT HATCHER: You get the allowance in 25.2. That's the basic allowance, isn't it?

PN4610

DEPUTY PRESIDENT HAMILTON: Yes. Then they get the distant work one.

PN4611

DEPUTY PRESIDENT GOSTENCNIK: The 25.3.

PN4612

DEPUTY PRESIDENT HAMILTON: 25.3.

PN4613

VICE PRESIDENT HATCHER: When does 25.3 come into it?

PN4614

DEPUTY PRESIDENT GOSTENCNIK: Because the employee resides outside the radial area, and then 25.6. You need to go to 25.6 first though.

PN4615

DEPUTY PRESIDENT HAMILTON: I think you can conclude that it's a somewhat complex issue.

PN4616

VICE PRESIDENT HATCHER: Sorry, just so I understand it. Ms Adler, can you just explain for me, rather than Bench arguing amongst ourselves?

PN4617

MS ADLER: So I think ‑ ‑ ‑

PN4618

VICE PRESIDENT HATCHER: They get the allowance – if you're outside the radial area you get the allowance prescribed in clause 25.2. That's the basic allowance?

PN4619

MS ADLER: Yes.

PN4620

VICE PRESIDENT HATCHER: Where do you get the additional bit from?

PN4621

MS ADLER: There's another clause which deals with what happens when you reside outside a radial area.

PN4622

VICE PRESIDENT HATCHER: So what clause is that?

PN4623

MS ADLER: 25.6

PN4624

DEPUTY PRESIDENT GOSTENCNIK: 25.6.

PN4625

VICE PRESIDENT HATCHER: That's what I'm reading.

PN4626

MR CRAWFORD: There's no additional entitlement in 25.6.

PN4627

VICE PRESIDENT HATCHER: I'm reading 25.6. It says if your residence is outside the radial area prescribed and you cross a radial boundary to travel to a construction site you will be entitled to the allowance prescribed in 25.2. That's the basic allowance. I don't understand where you get something additional from that.

PN4628

MS ADLER: My apologies. It just says you're not entitled to time reasonably spent in travelling from the radial boundary to the job and return to the radial boundary. So I apologise.

PN4629

DEPUTY PRESIDENT GOSTENCNIK: All right.

PN4630

MR MAXWELL: Your Honours and Commissioner, the other point I'd make in regard to the HIA clause is that there is then the further provision under the distant work, their 25.3, which is 25.3(b), which Ms Adler has not taken you back to which has a significant effect on people's entitlement under the HIA proposal, and that says that the provisions of 25.3(a) ‑ ‑ ‑

PN4631

VICE PRESIDENT HATCHER: Where are you reading from?

PN4632

MR MAXWELL: Sorry, this is from the HIA document, their comparison document to the clauses, in page 2, at the bottom of page 2 in the right-hand column.

PN4633

DEPUTY PRESIDENT GOSTENCNIK: The case under that proposal would have the effect that I was alluding to? That is, they'd get their initial allowance plus the distant work allowance; is that ‑ ‑ ‑

PN4634

MR MAXWELL: No, my understanding is that if, at the commencement of employment ‑ ‑ ‑

PN4635

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN4636

MR MAXWELL: ‑ ‑ ‑ the employee's usual place of residence was more than 50 kilometres from the construction site ‑ ‑ ‑

PN4637

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN4638

MR MAXWELL: ‑ ‑ ‑ from which the employee was initially engaged then they don't ever be entitled to the 17.43.

PN4639

DEPUTY PRESIDENT GOSTENCNIK: They would have been entitled to the distant work provision. It's ‑ ‑ ‑

PN4640

MR MAXWELL: No, because (b) says this provision does not apply.

PN4641

DEPUTY PRESIDENT GOSTENCNIK: Yes, but this provision being 25.3.

PN4642

MS ADLER: That's right.

PN4643

DEPUTY PRESIDENT GOSTENCNIK: That's my reading of it.

PN4644

MS ADLER: 25.3(a).

PN4645

DEPUTY PRESIDENT GOSTENCNIK: The distant work provision, but they would still get the 25.1 allowance?

PN4646

MS ADLER: That's right, your Honour.

PN4647

VICE PRESIDENT HATCHER: So on your Mt Macedon example that's the same result, isn't it? The only disadvantage is if you travel in the opposite direction. That is if you live in Melbourne and you were travelling to Mt Macedon.

PN4648

MR MAXWELL: If you were living in Melbourne and ‑ ‑ ‑

PN4649

VICE PRESIDENT HATCHER: Just answer the first part. So that 25.3(b) would make no difference on your Mt Macedon example, or by Gostencnik DP's Mt Macedon.

PN4650

DEPUTY PRESIDENT GOSTENCNIK: My – yes.

PN4651

MR MAXWELL: Not the employee that's living in Mt Macedon.

PN4652

VICE PRESIDENT HATCHER: Okay.

PN4653

DEPUTY PRESIDENT GOSTENCNIK: It might be Mt Macedon for somebody that lives past Penrith, but in Victoria it's Mt Macedon.

PN4654

MR MAXWELL: However, because the employee lives at Mt Macedon and the Melbourne construction site is more than 50 kilometres then for any other job that the employee, who lives in Mt Macedon goes to, that is more than 50 kilometres from their home, they will only be paid the 17.43.

PN4655

VICE PRESIDENT HATCHER: If the job is in the radial area that would be the case anyway, wouldn't it?

PN4656

MR MAXWELL: If it's within the radial area there would be no change, but it doesn't restrict it to the radial areas under the HIA proposal.

PN4657

DEPUTY PRESIDENT HAMILTON: It abolishes radial areas.

PN4658

MR MAXWELL: It abolishes the radial areas. So there's no radial areas to apply. So what we say, on the HIA's clause, that if an employee lives at Mt Macedon and was originally engaged on a site in Melbourne they would only ever be entitled to the 17.43.

PN4659

DEPUTY PRESIDENT GOSTENCNIK: But isn't the limitation in paragraph (b) relevant only to the construction site upon which they were initially engaged? That is, if, at the commencement of their employment they lived in Macedon and they were engaged initially on the Melbourne site then they wouldn't be entitled there to distant work allowance, or the distant work provisions. They would nonetheless be entitled to the daily fares allowance. If they were subsequently relocated to a construction site in South Yarra they would become entitled to a distant work allowance because that would be more than 50 kilometres away.

PN4660

MS ADLER: Yes, your Honour. The mischief, I guess, that the provision is targeted at is an employee knowing that they are beyond 50 kilometres ‑ ‑ ‑

PN4661

DEPUTY PRESIDENT GOSTENCNIK: I understand. From the site on which – yes.

PN4662

MS ADLER: ‑ ‑ ‑ from the site when they take the job.

PN4663

DEPUTY PRESIDENT GOSTENCNIK: Yes. But if, after having been employed, and having commenced on site A ‑ ‑ ‑

PN4664

MS ADLER: Yes.

PN4665

DEPUTY PRESIDENT GOSTENCNIK: ‑ ‑ ‑ they shifted to site B, which is also more than 50 kilometres away they would become entitled, as I read it, to the ‑ ‑ ‑

PN4666

MS ADLER: That's right, your Honour. Yes.

PN4667

DEPUTY PRESIDENT GOSTENCNIK: Yes. But in any event they would always be entitled to the initial allowance.

PN4668

MS ADLER: Yes. That's right, your Honour.

PN4669

VICE PRESIDENT HATCHER: Is there anything else?

PN4670

MR MAXWELL: Your Honours and Commissioner, I'd also point out that in paragraph 186 we deal with the other problems that we've identified with the HIA proposal. One that I should raise is that their reference to distant work, the industry's understanding of distant work is where employees are required to live away from home. They are seeking to introduce a new understanding of what distant work is which we say will lead to confusion within the industry, but if you look at the other items I've raised, that if an employee changes their address one week after commencing work with an employer and moves to an address more than 50 kilometres from the construction site that they're still entitled to the additional payments.

PN4671

The Bench has raised how is the 50 kilometre distance to be calculated. The HIA have offered no firm view as to how that's to be calculated.

PN4672

DEPUTY PRESIDENT HAMILTON: How is it calculated under the current award?

PN4673

MR MAXWELL: Under the current award it's quite simple. It's the 50 kilometre radius. You get a map, you ‑ ‑ ‑

PN4674

DEPUTY PRESIDENT HAMILTON: As the crow flies?

PN4675

MR MAXWELL: As the crow flies 50 kilometres. There is the issue of what site is to be used for their initial engagement in the case of apprentices, trainees who are engaged by the training companies. In regard to casuals the issue we raise in regard to casuals is, and if you take the example of labour hire companies, which has been raised in these proceedings, in terms of the question asked of one of our witnesses about whether labour hire is illegal, and of course, it's not, but if you take labour hire employees they have a changing place of employment on a very regular basis, if not, daily. So a labour hire employee on construction, in the construction industry, you would then have to calculate their travel distances on a daily basis, and if you take a labour hire company with 100 employees engaged on construction sites across Melbourne or across Sydney, the Sydney metropolitan area, those calculations would become a nightmare for those employers and would then impose a significant administrative burden on the employees.

PN4676

In paragraph 88 we also deal with the effects of the HIA proposal in regard to when the allowances will not be paid, and in regard to the – sorry, I also refer in paragraph 190 that a similar application was brought by the HIA in 2012 award review, and that was refused by His Honour Watson SDP, and we set out the extracts from that decision.

PN4677

In regard to the variations sought by the MBA to increase the radial areas from 50 kilometres to 75 kilometres, we deal with that in paragraphs 192 to 198 of our written reply submission, and we refer to a number of surveys and documents that relate to the increased traffic congestion. Those I refer the Full Bench to the previous exhibit that we used in the cross-examination of Mr Glover from the Austroads document. We submit on the basis of our written submission that there is no justification for the variation sought by the employers in these proceedings, and that the variations to the fares and travel clause should be dismissed.

PN4678

VICE PRESIDENT HATCHER: Thank you. Mr Crawford, do you want to make a submission?

PN4679

MR CRAWFORD: No. We rely on our written submissions, your Honour.

PN4680

VICE PRESIDENT HATCHER: Thank you. Ms Adler?

PN4681

MS ADLER: Just two quick points. Mr Maxwell referred to our survey responses, and indicated an overwhelming majority don't provide company vehicles to their employees. That's true on the face of the survey. I'm not attempting to defer from that position. What I would say though is that there are businesses out there that provide company vehicles and also providing the daily fares allowance at the same time, to provide this incentive to provide a company vehicle hence why the results may be the way they are.

PN4682

VICE PRESIDENT HATCHER: So to be clear, if it's a vehicle which the company uses for work purposes during the day, and an employee is allowed to take it home and bring it to work and is required to bring it to work, under your proposal do they get the fares allowance or not?

PN4683

MS ADLER: No. If it's a company vehicle provided they don't get the fares allowances.

PN4684

VICE PRESIDENT HATCHER: So Mr Maxwell then raises the issue that removing that may raise the question of whether the travel to and from work is working time, because you're performing a work requirement.

PN4685

MS ADLER: We say that it shouldn't be paid; the travel time shouldn't be paid, and, I guess, you know, we'd have to have that argument at that point if that type of provision was being contemplated. The Federal Court decision, I guess, it's another one of those instances where this notion of a trade-off forms a part of the argument, and I just don't see how that should be a consideration in these current proceedings in relation to the proposal that we put forward.

PN4686

VICE PRESIDENT HATCHER: All right.

PN4687

MS ADLER: The only other matter that I raise is the discussion about the payment of the daily fares on the RDO. It seems like it's basically a bonus payment. There doesn't seem to be any cogent reason as to why the employee gets paid the fares and travel allowance on an RDO. The employee isn't going anywhere. Whether or not you say it's an expense related allowance or some sort of disability allowance related to the travel involved in the industry, neither of those things are being incurred on an RDO. So we would say that the proposal to change the current provision is a sort of a next step in dealing with what has been basically an additional payment to an employee without much foundation. That's all I wish to say, your Honour. Thank you.

PN4688

VICE PRESIDENT HATCHER: Before you sit down, one of Mr Maxwell's criticisms the proposal would add complexity and the potential disputes because it would require an individual calculation and there might be arguments about the most direct route as distinct from the fastest route and those sort of things. What do you want to say about that?

PN4689

MS ADLER: There's a dispute resolution provision in the award which could deal with those matters. Our submission would be that those things could be worked out at the workplace. Otherwise it becomes a dispute like I imagine, you know, some of these provisions may end up being. If the provision requires more clarification on that point, then we'd be open to reviewing the wording that we've used. But the central position is that, from our perspective anyway, and our submission is that the use of the radial areas is outdated. It's confusing, particularly when you're dealing with more than one radial area. I know Mr Maxwell didn't take you to any examples of where the radial areas interact or travelling from one to another, and the complexities involved in that, and we see that our proposal to use the employee's usual place of residence, while there are, you know, details around individual employees and calculating that distance, what we have now is much more complex than what would be required under what we propose.

PN4690

DEPUTY PRESIDENT GOSTENCNIK: Ms Adler, can I just take you to exhibit 46 again just so that I understand how your proposal works? Let's assume for a moment the relevant construction worker's usual place of residence is Mt Eliza, which is at the bottom right-hand corner of the – well, the bottom right.

PN4691

MS ADLER: Yes.

PN4692

DEPUTY PRESIDENT GOSTENCNIK: Let's assume that the construction site is at Kinglake, which is almost a straight line north right at the top, Kinglake West.

PN4693

MS ADLER: Yes.

PN4694

DEPUTY PRESIDENT GOSTENCNIK: Okay. The employee would receive an allowance under your 25.1(a).

PN4695

MS ADLER: Sorry, did the employer live in Mt ‑ ‑ ‑

PN4696

DEPUTY PRESIDENT GOSTENCNIK: Mt Eliza.

PN4697

MS ADLER: Yes.

PN4698

DEPUTY PRESIDENT GOSTENCNIK: Yes. They would receive the allowance under 25.1, and that distance is more than 50 kilometres from Mt Eliza to Kinglake.

PN4699

MS ADLER: Is more than 50 kilometres?

PN4700

DEPUTY PRESIDENT GOSTENCNIK: Yes, it is.

PN4701

MS ADLER: Okay.

PN4702

DEPUTY PRESIDENT GOSTENCNIK: They would also receive the distance, subject to the exclusion. Let's assume this is not their first engagement, they would also receive the 25.3 allowance?

PN4703

MS ADLER: Yes.

PN4704

DEPUTY PRESIDENT GOSTENCNIK: Which is more than what the current award provides.

PN4705

MS ADLER: Is it more than what the current award ‑ ‑ ‑

PN4706

DEPUTY PRESIDENT GOSTENCNIK: It is more than what the current award provides.

PN4707

MS ADLER: Okay. I'd have to take that on notice to double check it, but if that's the proposition that you're putting then on my feet I couldn't disagree with it.

PN4708

VICE PRESIDENT HATCHER: It's based on the notion that within the radial area you could easily have a number of radial distances that are more than 50 kays between two locations within the radial area.

PN4709

MS ADLER: Using the employee's usual place of residence?

PN4710

VICE PRESIDENT HATCHER: Yes.

PN4711

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN4712

MS ADLER: As I said in my original comments, and Mr Maxwell used the same terminology, the swings and round abouts in what we propose, you know, if by simplifying and condensing a whole raft of provisions that deal with travelling to and from radial areas there may be instances where an employee will be better off, and there may be instances where they're not.

PN4713

DEPUTY PRESIDENT HAMILTON: Do you have any reason to believe that it swings one way or around about the other way, or does it equal out?

PN4714

MS ADLER: I couldn't say definitively. What I would say though is that our proposal is simpler and easier to understand, and in that way is of benefit to all in that both employees and employers are clear on what they are entitled to and what the obligations are.

PN4715

DEPUTY PRESIDENT GOSTENCNIK: Okay. On that point, just Hamilton DP's earlier questions about kilometres on perhaps not as much in Sydney but certainly in Melbourne, if you take, for example, Mt Eliza and then go across the bay to Point Cook as the crow flies that's probably less than 50 kilometres, but driving distance would be more than 50 kilometres.

PN4716

MS ADLER: Again, though, and I think his Honour, the Presiding Member raised it with Mr Maxwell before, doesn't it under both the current provision and our provision still ultimately come down to how you ‑ ‑ ‑

PN4717

DEPUTY PRESIDENT GOSTENCNIK: No, because what you do under the current award is you just have a look in that blue shaded area. If it's within that then they get the allowance irrespective of how far they have to travel.

PN4718

MS ADLER: I have to concede that. Unless there's any other questions, that's all I have to say.

PN4719

DEPUTY PRESIDENT GOSTENCNIK: Thank you.

PN4720

VICE PRESIDENT HATCHER: Mr Schmitke?

PN4721

MR SCHMITKE: I'll be very quick. I should clarify that when I say arbitrated case I meant to convey to the Commission that it was the Commission was forced to issue a determination with respect to the comma case, but notwithstanding that it hasn't solved the problem, so whilst his Honour Watson SDP did seek to do his best and the parties at the time did their best to try and resolve the issue, it still hasn't resolved it and hence why we make the position and advance the claim that we've done. Can I just note that it's curious that this particular provision within the award is always the subject of much debate and discussion. I was having a look at the explanation section in the award manual that we provide to our members. It's longer than the actual award provision itself, and there's a graphic in there which resembles algebra frankly and it just highlights the complications with respect to this issue and that clause in the award.

PN4722

I should also note that, and I've just consulted copies of the CFMEU pattern agreement in Sydney, the last three rounds, and they all completely override this provision and it's a much simpler provision, and it's no wonder it's not necessarily in which there's easy answers able to be given to the Commission from the Bar table, because we've very rarely consulted about it in terms of metropolitan matters certainly.

PN4723

VICE PRESIDENT HATCHER: What does it do?

PN4724

MR SCHMITKE: I haven't had the benefit of handing these to the union but if I can refer to, I think it's, the most recent one. The clause is written as such:

PN4725

Employees are entitled to the payment of the daily fares allowance of this agreement for travel to work each day. This allowance is payable for travel within the counties of Cumberland, Camden and Northumberland whichever is applicable –

PN4726

And then it's got a map attached. Then the next words are:

PN4727

The parties recognise that there is a need for more flexible travel provisions. The projects located outside the counties of Cumberland, Northumberland and Camden and radial boundary areas. In an effort to acquire projects outside of these boundaries and utilise the diverse living locations of company employees, who reside close to a county boundary, the parties agree that employees may be required to travel to projects located outside of the boundaries (as stated above) up to 50 kilometres from their place of residence without incurring the excess travel fares and travelling allowance.

PN4728

I think that is – I have not had an opportunity but I think that's consistent with that.

PN4729

DEPUTY PRESIDENT GOSTENCNIK: What's the value of the allowance under the agreement?

PN4730

MR SCHMITKE: I should indicate I don't frequently look at this particular document.

PN4731

DEPUTY PRESIDENT GOSTENCNIK: Because I suspect simplicity comes with a cost.

PN4732

MR SCHMITKE: I think the suspicion might be right. I might take that on notice if I could, and ‑ ‑ ‑

PN4733

DEPUTY PRESIDENT GOSTENCNIK: It's all right. I will look it up myself.

PN4734

MR SCHMITKE: Can I just also note that the reference that Mr Maxwell gave to, I think it was, travelling times between Camden using the M7 and the M5, I did the same calculations myself this morning. What that does demonstrate though is that infrastructure does have an impact on the amount of time that it takes to travel in between these particular projects and, of course, I think in the existing award, and I stand to be corrected by my colleagues, when we are talking about the moneys payable to employees in particular situations, as calculated either by reference with a per kilometre rate or time spent travelling, whereas insofar as the triggers for the radial areas, they're very hard and fast, so you've just got the set blunt instruments for when an employee is entitled; when an employee is heading out or travelling between it's per kilometre or paid on the time spent travelling, so I think that's just an interesting distinction if it assists the Commission. I wouldn't seek to add anything further to that comment but I'm happy for the Commission to have the benefit of looking at the relevant provisions in our award manual if that might assist in understanding the provision, but it will need to be photocopied by your Associate, so ‑ ‑ ‑

PN4735

MR MAXWELL: Your Honour, could I just inquire whether that was the award manual created by Mr Richard Calver?

PN4736

MR SCHMITKE: It's a copyright Master Builders Australia.

PN4737

VICE PRESIDENT HATCHER: Mr Boanza, do you have anything in reply?

PN4738

MR BOANZA: Just a reply just briefly to Mr Maxwell's comments about the problem of coverage of employees not working on building sites does not exist. The majority of these issues are dealt with by employers by conciliation. Most employers are not going to have a full blown dispute with the union and go to arbitration over a travel allowance for a relatively small number of employees. So that's what the difficulty in identifying, you know, full blown cases in the Commission, but I do assure Mr Maxwell that the problem does exist and we would like to have it addressed.

PN4739

VICE PRESIDENT HATCHER: Thank you. If that's the end of that issue, we might take the morning tea adjournment, and then we'll move on to the next issue after that.

SHORT ADJOURNMENT [11.22 AM]

RESUMED [11.42 AM]

PN4740

VICE PRESIDENT HATCHER: What is the next issue? Who's next?

PN4741

MS ADLER: I believe it is TOIL.

PN4742

VICE PRESIDENT HATCHER: Is that you Ms Adler?

PN4743

MS ADLER: Yes. We deal with time off in lieu of overtime in our written submission at section 3. The proposal that we seek is to basically insert the model TOIL term that has been developed by the Commission as part of the Award Flexibility proceedings and I understand that, as part of the materials we provided to the Bench, a copy of that decision has been made available to the Bench. That is the decision of [2015] FWCFB 4466. In making this claim and in making this application, we firstly rely on that decision and we secondly rely on the HIA member survey, which does deal with this issue. Obviously the CFMEU have opposed the claim.

PN4744

DEPUTY PRESIDENT HAMILTON: What does the survey say about the issue?

PN4745

MS ADLER: We deal with overtime at questions 17 through to 20, which are listed in annexure A to the statement of Kirsten Lewis, which is page 66 of those documents. So they are the questions and then the results of that are dealt with at pages 19 to 22 of the results of the survey. I guess there's probably two things I would say about the results of the survey. There's a number of comments that are made in the survey and obviously there's a mixture of views about time off in lieu of overtime.

PN4746

We are not suggesting that it is suitable for every business, but what we are suggesting is that there are businesses that would find a provision like this useful. It is not a mandatory provision what we are proposing or what the Commission has determined to be a model term, it is not mandatory, but it provides an option for businesses and their employees to facilitate these sorts of arrangements.

PN4747

The survey results also indicate that obviously there is overtime worked in the sector and that there are a number of employees who have requested some sort of arrangement to be dealt with over time that doesn't involve payment as per the award.

PN4748

We would submit that employees request these sorts of arrangements and some employers would find them of benefit.

PN4749

DEPUTY PRESIDENT HAMILTON: Is time off in lieu of overtime conceptually compatible with daily hire employment?

PN4750

MS ADLER: Conceptually, if you take daily hire as each individual daily engagement standing alone, then potentially not, but we have weekly hire arrangements under the On-site Award also, so there are people employed on weekly hire arrangements to which this sort of term would apply. We would say that the fact that the award still contains daily hire shouldn't be a bar on providing the option to other businesses that engage employees on other - - -

PN4751

DEPUTY PRESIDENT HAMILTON: Is weekly hire the most common form of employment?

PN4752

MS ADLER: For our membership, I would say yes. I can't speak for others, though. I guess that's all I have to say about the survey results.

PN4753

In their reply submissions, the unions obviously refer to the arbitral history and the fact that TOIL, they claim, was dealt with and it was determined that it was inappropriate, probably on the basis of daily hire engagement. In saying that, though, their reply submissions don't actually outline that history, they just simply refer to it as if everybody knows what it is.

PN4754

The decision that I handed up, the 2015 Award Flexibility decision, does summarise that to some extent at paragraphs 297 onwards. My summation of that history would be that the notion of inserting TOIL into both the On-site and the Joinery Award, I should say, hasn't been squarely dealt with or properly decided on by an Industrial Tribunal and even if you can say that a decision of Merriman C in 1999 did consider it, that's over 18 years ago now and, as we have already discussed, we now have weekly hire engagement in the award, which we didn't, generally speaking, in 1999.

PN4755

The other element of that decision that I would just point out is paragraph 307 of that decision, which, basically, there was no view expressed about the merit of including the TOIL term in the awards, it simply said, "Well, there's some unique history and we think it should be dealt with at the award stage." So there was no determination made or judgment of how that history should be considered, I guess I would say.

PN4756

There's just three final comments that I would seek to make about this variation application. Firstly, as I said, it's a facilitative provision, so it's not mandatory; we are seeking the model term which the Commission in another matter has determined to be appropriate to meet the modern awards objectives and to contain the appropriate safeguards that are considered relevant.

PN4757

There is a comment made by the unions in their reply submission that we are simply seeking to take advantage of employees by inserting this sort of provision and given that we've got a decision of a Full Bench which addresses most of the modern awards objectives, I find that a hard submission for the union to make. Notwithstanding that, it's largely irrelevant, given what is in that model term and the safeguards that have been incorporated into that provision and, by all accounts, such a provision simply is providing an option to both employees and employers for more flexibility under the current award.

PN4758

Finally, I would just say that the information and results of the HIA members survey and the decision of the Full Bench provide ample ground for this Commission to insert TOIL arrangements into both the Joinery Award and the On-site Award.

PN4759

VICE PRESIDENT HATCHER: The HIA survey, in terms of responses, indicates that a number of members actually thought it would have highly negative effects.

PN4760

MS ADLER: Yes.

PN4761

VICE PRESIDENT HATCHER: What do you do about that? For example, one says:

PN4762

Disruptive and hard to manage with people wanting time off at inappropriate times in busy periods.

PN4763

I know it has to be by agreement, but the issue of managing requests and having to say "no" and then probably having a dispute about that.

PN4764

MS ADLER: Hopefully not a dispute about it, but, I guess, as I said at the outset, I am not saying that it is appropriate for every business, there is a mix of views in the comments that were provided - we are not trying to hide from that and I think it goes to the fact that we weren't trying to influence the outcomes of the survey, we let members say what they wanted to say about things - and it won't work for all businesses, but the point is that the provision is not mandatory, it's an option for some businesses who do desire that additional flexibility and their employees who wish to use that overtime in another way other than being paid for it at the time.

PN4765

DEPUTY PRESIDENT HAMILTON: Is there anything about this industry that makes it more difficult to manage than the rest of the economy?

PN4766

MS ADLER: Not in our sector, your Honour, I wouldn't say. You've still got weekly hire engagement. You've got to record overtime anyway for payment purposes, so it's the same sort of administrative - - -

PN4767

DEPUTY PRESIDENT HAMILTON: What I am saying is it is applied across the economy and supported, it appears, mostly by employers across the economy. Is there anything about this sector that makes an exception to that other than that they are not used to it?

PN4768

MS ADLER: My submission would be that there is not and that these awards shouldn't be treated any differently from others.

PN4769

VICE PRESIDENT HATCHER: They are quite strong, the answers, some of them.

PN4770

MS ADLER: They are, yes, but equally I think there are strong comments to say that it would be of benefit and the fact that there is a percentage of those who do work overtime of the employees that are requesting these sorts of arrangements also goes to the notion that there's benefit to both parties by having a facilitative provision like this in the award.

PN4771

DEPUTY PRESIDENT HAMILTON: You are supporting TOIL notwithstanding some of these comments. Why is that? Is it a majority view to support it or is it a minority view?

PN4772

MS ADLER: As an association representing the industry in totality, we see that a provision like that would create more flexible outcomes and would help better meet the modern awards objectives and so, in that way, we support such a proposal being inserted into the award. Notwithstanding that not all of the respondents feel equally the same, our submission is that having it in the award is of no detriment.

PN4773

That's all the submissions I wish to make.

PN4774

VICE PRESIDENT HATCHER: Thank you.

PN4775

MS ADLER: Thank you, your Honour.

PN4776

VICE PRESIDENT HATCHER: Mr Schmitke?

PN4777

MR SCHMITKE: Thank you, your Honour. I would simply note Ms Adler's submissions and support them. We adopt the same view insofar as the insertion of this clause. It is a clause which is optional. We do not see that there is any barrier to the insertion of the provision in such a way that would disturb the other provisions of the instrument. There are enterprise agreements, I recall - I don't have one - which have like provisions. I recall - I am just trying to find it - there is a section within the existing award for particular categories of employees that has a TOIL provision.

PN4778

As Ms Adler has indicated, it is by agreement, it is a facilitative provision. There is nothing that would deny or should deny workers in this sector, almost one million, having access to this if they so desire, and it can be done in such a way as to suit the particular arrangements between the worker and the business, accommodate whatever industry or non-industry issues might exist and the employer can utilise it in such a way as to not disturb normal work patterns.

PN4779

There are sometimes situations where it is inconvenient for a group of workers potentially to leave a construction site, given that there's all sorts of other processes going on, but that is capable of being accommodated. It shouldn't necessarily be a reason to deny it to those who could leave and take advantage of this flexible provision. To that end, we seek that it be inserted.

PN4780

VICE PRESIDENT HATCHER: Any other employer group got anything additional to say?

PN4781

MS PAUL: No, your Honour.

PN4782

VICE PRESIDENT HATCHER: No? CFMEU, Mr Maxwell?

PN4783

MR MAXWELL: In regard to the TOIL issue, that's dealt with in our reply submission starting in paragraph 73 found on page 23 through to paragraph 115 on page 39.

PN4784

Your Honour and Commissioners, we are opposed to the insertion of a TOIL provision. We did make detailed submissions before the Award Flexibility Full Bench and in regard to the Award Flexibility decision referred to by Ms Adler, the Building and Construction General On-site Award and the Joinery Building Trades Award 2010 were dealt with in paragraphs 296 through to paragraph 307. Essentially, in that decision, the Full Bench decided, in paragraph 307, that:

PN4785

Given the unusual arbitral history and the particular features of the industry covered by the two construction awards (including the operation of daily hire) we think the most expeditious course is to deal with any application to insert a TOIL provision in these awards during the award stage rather than in the settlement of any orders which may arise from our further consideration of the provisional model term.

PN4786

VICE PRESIDENT HATCHER: Ms Adler has clarified that it is intended only for weekly employees.

PN4787

MR MAXWELL: I didn't take that to be Ms Adler's variation that they seek.

PN4788

VICE PRESIDENT HATCHER: Let's assume it is confined to weekly employees. What is the detriment to employees from adopting the model term?

PN4789

MR MAXWELL: In regard to weekly hire employees, we say it would still meet the problems with the nuances of the industry in that we are talking about work that is generally project based. Our other concern is that this application is being driven by the employers, not by any workers or unions, and when you look at the responses to the HIA survey, and I would like to briefly deal with the HIA survey because I have not responded yet to Ms Adler's reply to our submissions about the survey, but I would wish to come back to that, but if you look at the responses - - -

PN4790

VICE PRESIDENT HATCHER: We have read them.

PN4791

MR MAXWELL: Yes, but the responses outlined in paragraph 109 from those employers that are opposed to it, and also the reasons why some of them think it would be good and it's mainly so that they don't have to pay overtime rates.

PN4792

DEPUTY PRESIDENT HAMILTON: Have you seen the question they asked? Would that not suggest some alarm amongst some people who didn't understand the award? It says:

PN4793

What would be the effect on your business if your employees could accrue overtime worked towards leave taken at another time?

PN4794

That seems to suggest some sort of right as a possibility, so could the negative comments be a response to the phrasing of the question, as it is in many of these surveys?

PN4795

MR MAXWELL: Well, yes, and we have taken issue with the survey, but I want to address this issue of weekly hire. It has been suggested by Ms Adler that the majority of their members employ people on a weekly hire basis. There is no evidence provided by the HIA as to how their members do their employment arrangements. If you look at the survey, the survey says that only 56 per cent of the employees are full time. It also says that 91 per cent of the businesses engage contractors. It is our belief, but we don't have the evidence to support it, but it's our belief that the majority of the employees that are covered by this survey that are covered by the Building and Construction General On-site Award, the only employees that are engaged on weekly hire are apprentices.

PN4796

MS ADLER: Your Honour, I don't know how Mr Maxwell can make that assertion. There is nothing in the survey that indicates that and it is just simply - there's no basis for that sort of comment.

PN4797

VICE PRESIDENT HATCHER: It is one assertion in response to another, isn't it?

PN4798

MS ADLER: Well, we have got data and responses.

PN4799

VICE PRESIDENT HATCHER: Was there evidence from your members about the percentage who are on weekly hire?

PN4800

MS ADLER: No, there wasn't.

PN4801

VICE PRESIDENT HATCHER: Mr Maxwell, can you come back to my question: assuming the clause is confined to weekly hire, what is the detriment to employees?

PN4802

MR MAXWELL: The detriment, we say, to employees is that if they are working overtime, the time that is then taken off under the model term - - -

PN4803

VICE PRESIDENT HATCHER: Only if they agree in writing.

PN4804

MR MAXWELL: Only if they agree and, unfortunately, in un-unionised workplaces, we do have a concern about the extent to which those agreements may be made. I take it no further than that.

PN4805

DEPUTY PRESIDENT HAMILTON: Why shouldn't employees in this sector be able to request time off in lieu of overtime as they do across the economy?

PN4806

MR MAXWELL: We know that under the various awards, there are two different versions of the time off in lieu of overtime provisions. There's those where the time off in lieu is provided on an hour for hour basis.

PN4807

DEPUTY PRESIDENT HAMILTON: Hour by hour or penalty rates, yes.

PN4808

MR MAXWELL: And those where it's provided on penalty rates.

PN4809

DEPUTY PRESIDENT HAMILTON: Ordinary rates or penalty rates, yes.

PN4810

MR MAXWELL: We say that where it's provided on an hour for hour basis, there is a detriment to the employees.

PN4811

DEPUTY PRESIDENT HAMILTON: Why?

PN4812

MR MAXWELL: Because they've worked the time for which they would normally be entitled to be paid penalty rates, so there is clearly a saving to the employer because if they're not paying the employee overtime rates and then allowing them to take time off when they would normally pay ordinary time rates, then there's clearly a financial benefit to the employer for that arrangement.

PN4813

DEPUTY PRESIDENT GOSTENCNIK: Save that they're paying an employee who is not being productive to take time off.

PN4814

MR MAXWELL: Sorry, your Honour?

PN4815

DEPUTY PRESIDENT GOSTENCNIK: Save that the employer is still paying an employee on the day that they have in lieu for performing no work, so they have paid them for ordinary time in circumstances - if they received an overtime benefit, there's a financial benefit for them, but when the employee takes time off, they are paying them for doing no work.

PN4816

MR MAXWELL: But under their normal contract of employment, the employer would still be required to pay them for those hours if it's during ordinary hours.

PN4817

DEPUTY PRESIDENT GOSTENCNIK: But we are not talking about a stand down, we are talking about an arrangement whereby an employee is substituting the right to be paid an overtime rate for an accrual of some additional leave down the track.

PN4818

MR MAXWELL: We still say under those arrangements there is a detriment to the employee and there is a saving for the employer.

PN4819

VICE PRESIDENT HATCHER: But that depends upon how the employee values the day off. That is, if it's by agreement, the employee might assign much greater value to having a particular day off for some personal or domestic reason over getting an overtime payment.

PN4820

MR MAXWELL: Yes, they may, but - - -

PN4821

VICE PRESIDENT HATCHER: And if they don't value it as the same or more, they won't agree to it, presumably.

PN4822

MR MAXWELL: Our concern is that these arrangements will be entered into not at the initiative of the employee.

PN4823

DEPUTY PRESIDENT HAMILTON: Why do you say that?

PN4824

MR MAXWELL: Because - - -

PN4825

DEPUTY PRESIDENT HAMILTON: I know you suspect it, but why do you say it?

PN4826

MR MAXWELL: Our members have not expressed a desire for time off in lieu of overtime.

PN4827

DEPUTY PRESIDENT HAMILTON: Well then they won't apply for it.

PN4828

MR MAXWELL: It is not an issue that has come up amongst our members. If they want to take a day off, they will use annual leave or they will use accrued RDOs.

PN4829

Your Honours, in our submissions, we also refer to the decision of Merriman C in the authentication in 2000 when he rejected the inclusion of the time off in lieu of overtime provision and we also make the point that in regard to the Award Flexibility case, the main deponent in those proceedings were the AiG. The AiG provided extensive evidence and that led to the decision of the Full Bench. In those proceedings, the MBA and HIA provided no evidence during the Award Flexibility decision and they relied on the evidence of the ABI.

PN4830

In these proceedings, because that matter wasn't dealt with in the Award Flexibility case, the HIA and MBA have provided very limited evidence. The main evidence of the HIA is their survey and - sorry, just bear with me for a second. We refer to the HIA survey in paragraphs 92 through to 100, but we wish to make the point in regard to the survey that the survey was sent to over 23,800 HIA members. There was only 290 that responded. That is 1.2 per cent of their members responded to the survey.

PN4831

The employees of 36 of those 290 were covered by awards other than the Building and Construction General On-site Award and the Joinery and Building Trades Award 2010. 39 respondents only identified the Joinery and Building Trades Award as the relevant award applying to their employees and it is not clear which awards covered another 37 of the respondents as they indicated that either more than one award applied or no award applied.

PN4832

The HIA has raised the issue that we raised about the introductory paragraphs being incorrect as to what covered the proper entitlements of employees, but we also identified that when you look at the survey, it didn't identify how many employees they actually employed under those awards, which we would have thought would have been a pertinent question. What classifications were covered by the employees under those awards? I stand corrected in paragraph 96 of our submission. At subparagraph 3, we say that the survey didn't identify how many were full time, part time or casual. We withdraw that. That clearly is the case, but they didn't do so in regards to each of the awards that covered the employees.

PN4833

In note 7, we deal with responses from a number of the companies that are contradictory and we point out that if you look at company 80178, a company with a hundred plus employees that is supposedly covered by the Construction Award, they refer to "contractors" in response to question 16 and in response to the question on payment of wages states:

PN4834

Senior technical and management staff get paid monthly. Admin, accounts, clerical staff get paid fortnightly. This is done based on their general ability to manage money.

PN4835

There is no reference to any employees covered by the Construction Award such as trades persons or labourers and no reference to the production staff that may be covered by the Joinery and Building Trades Award. So we say, on that basis, they say they are covered by the Construction Award, but they don't pay anyone in accordance with the requirements of the Construction Award payment of wages, which is weekly payments.

PN4836

Company 80389 say they are builders with six to 15 employees covered by more than one of the awards, but again in response to the question of the payment of wages question, they state:

PN4837

One less processing cycle. They are not hired under the On-site Award as they are office staff.

PN4838

I won't go to the other examples we give.

PN4839

VICE PRESIDENT HATCHER: I understand these criticisms of the survey, but insofar as it connects with the TOIL issue, what's the criticism? I think there's only a few questions, one, whether people work overtime and to what extent and the answers don't appear to be surprising and, two, there's some qualitative reactions to the concept of TOIL.

PN4840

MR MAXWELL: In regard to the survey, when you actually delve into the actual detail, and this is dealt with in paragraph 99 of our submission, of those employers who say they are covered by the Building and Construction Award and the Joinery Award, out of the 290, there was only 142 who say they actually work overtime and, of those 142, there was only 62 that say they had had a request from an employee, but there is no indication of what award covered them, so those 62 may have been within the 39 that are covered by these awards, but, significantly, 43 of the respondents whose employees work overtime, they didn't actually comment about TOIL. So, generally, there is no support from the actual employers that were covered by the HIA survey.

PN4841

DEPUTY PRESIDENT HAMILTON: Is it surprising when you look at the question? The question seems to suggest it's another RDO system being imposed on them, or that's one possible interpretation of the question, which obviously they would have some concern about.

PN4842

MR MAXWELL: Yes, in regard to the overall content of the survey, that's why we say the survey should be given little weight, and I suppose there is a question of the extent to which the HIA is representing its members in regard to the extent to which the application they seek is at odds with the responses of their members in the survey.

PN4843

VICE PRESIDENT HATCHER: Have the CFMEU surveyed its members about this issue?

PN4844

MR MAXWELL: Not this particular issue, no. Your Honour, there is one other point I just briefly wish to make and that is in regard to - in her opening submissions before she dealt with the allowances - sorry, the redundancy issue, Ms Adler referred to the research report that was prepared for the Australian Industrial Relations Commission, the research report 6/2013, and she made the claim that on the basis of paragraph 17, 19 per cent of the employers in the industry were award-reliant.

PN4845

We wish to point out that if you look at page 11 of that research report, in discerning whether a company was award-reliant, it was on the basis whether one employee with the employer was paid in accordance with the award. So, it wasn't that all employees are award-reliant, it was that maybe one employee of the company - - -

PN4846

VICE PRESIDENT HATCHER: So it could be the new entrant?

PN4847

MR MAXWELL: Yes. The other point we would make is - - -

PN4848

VICE PRESIDENT HATCHER: But the definition was also based on the notion that they paid the minimum rates in the award.

PN4849

MR MAXWELL: Yes.

PN4850

VICE PRESIDENT HATCHER: There would presumably be a much greater group who would pay some other conditions derived from the award.

PN4851

MR MAXWELL: Yes. The point we wish to make is in that survey, I think there was 576 construction companies that were part of that survey, and that's found in appendix E, page 128, but there is also included in the survey an ABSEEH survey that is referred to on page 91 of that research report, and according to that survey, there's 12 per cent of employers in the construction industry pay their employees the award rate. We submit it is not as high as 90 per cent. We accept there are clearly employees that are - - -

PN4852

VICE PRESIDENT HATCHER: What has this got to do with TOIL?

PN4853

MR MAXWELL: No, sorry, your Honour, I was responding to the HIA's opening submissions where they dealt with the survey but also the additional material. I am dealing with that now rather than later.

PN4854

In regard to TOIL, we say there is no probative evidence, there has been no evidence in these proceedings from the employers, apart from the HIA survey, which we say is of little weight, and we say on that basis that the variation should not be made.

PN4855

VICE PRESIDENT HATCHER: Where there is a model clause, it might be submitted that the onus is on a party to demonstrate why an award should not include what has been developed as a model clause.

PN4856

MR MAXWELL: Yes, I understand that. We are opposed to the model clause. If the Full Bench, I suppose, is mindful of adopting the model clause, we say that the model clause should be varied so that the overtime or the compensation for the overtime worked should be on equivalent - - -

PN4857

VICE PRESIDENT HATCHER: That issue was considered by the Full Bench in developing that clause, wasn't it, or not?

PN4858

MR MAXWELL: It was and they retained it where those provisions existed in TOIL provisions that were included in awards.

PN4859

DEPUTY PRESIDENT HAMILTON: And they don't exist in this award.

PN4860

MR MAXWELL: They don't exist in this award, no.

PN4861

VICE PRESIDENT HATCHER: Thank you. Mr Crawford?

PN4862

MR CRAWFORD: Just one brief point, your Honour. If I can turn to page 97 of the HIA survey, I just note that 66 per cent of the respondents indicated that their response regarding TOIL arrangements wouldn't change if the TOIL was taken at the overtime rate, so that indicates that that would not be a major issue for the employers that were surveyed.

PN4863

The AWU's position is fundamentally we are opposed to the inclusion of the TOIL term, but if the Commission is minded to insert TOIL terms, because there are model terms going in most awards, and that could be the only possible basis really that a TOIL term is inserted in this case, our strong view is that the TOIL should be taken at overtime rates.

PN4864

VICE PRESIDENT HATCHER: Thank you. Anything in reply?

PN4865

MS ADLER: Just one quick comment that I just feel I am compelled to make for the record. We would oppose any suggestion made by the union that there is some sort of underhanded mischief going on on non-unionised construction sites in relation to TOIL or any other sorts of individual arrangements. Thank you, your Honour.

PN4866

MR SCHMITKE: Your Honour, the only comment I would seek to make is just in relation to our membership - it was canvassed obviously by the HIA and CFMEU - but just so it is clear to the Commission, Master Builders Australia has 33,000 companies within our membership, including civil, residential and commercial construction. Mr Maxwell talked about the project-based nature of the sector.

PN4867

VICE PRESIDENT HATCHER: Mr Schmitke, is this based on any evidence?

PN4868

MR SCHMITKE: Sorry?

PN4869

VICE PRESIDENT HATCHER: Are you basing this on any evidence?

PN4870

MR SCHMITKE: In terms of our membership?

PN4871

VICE PRESIDENT HATCHER: Yes.

PN4872

MR SCHMITKE: I can provide information if you like.

PN4873

VICE PRESIDENT HATCHER: No, no, we are in closing submissions. I think at some point we have got to say that this is not an opportunity to start making factual assertions from the Bar table.

PN4874

MR SCHMITKE: Where I was going is the project-based nature of this sector, which is something that Mr Maxwell has raised. My understanding is the TOIL provision requires employees to take time off within 12 weeks of its accrual and it's not common for projects to cease in that period of time in terms of - - -

PN4875

VICE PRESIDENT HATCHER: I think it is within 12 weeks, or something to that effect, in the model.

PN4876

MR SCHMITKE: Yes, that's right. The sector is more than capable of accommodating.

PN4877

VICE PRESIDENT HATCHER: Thank you. Next is junior rates. That is you, Mr Boanza.

PN4878

MR BOANZA: Yes, thank you, your Honour. CCF has made an application for the insertion of junior rates into the Building and Construction Award. We have provided the Commission and the parties with our submission in relation to the work value issue.

PN4879

VICE PRESIDENT HATCHER: Just hold on while I find that. Yes?

PN4880

MR BOANZA: Thank you. For the reasons presented in that submission, we do not believe that a work value case is necessary for the Commission to insert junior rates in the award.

PN4881

VICE PRESIDENT HATCHER: Why do you say that?

PN4882

MR BOANZA: Based on our advice, your Honour, the case presented by CCF in these proceedings has not been based on work value reasons, it is prescribed by section 173, as the expression is defined in section 157(4), the Full Bench has not been asked by the CCF to vary existing minimum rates in the award. We say that junior rates do not relate to particular kinds of work. That is the advice that we have received.

PN4883

VICE PRESIDENT HATCHER: You are talking about us setting lower rates for somebody who would currently be required to be paid adult rates. Is that right?

PN4884

MR BOANZA: We say, your Honour, that would be based on their age, not on the value of their work as such.

PN4885

VICE PRESIDENT HATCHER: I understand that, but what you are doing is to change the award so that somebody who is currently entitled to adult rates will be entitled to a lower rate as a junior rate; is that right?

PN4886

MR BOANZA: Yes, that's right.

PN4887

VICE PRESIDENT HATCHER: So we are changing the minimum rate?

PN4888

MR BOANZA: In introducing junior rates, in our submission, the minimum rate would remain as it is now, which is CW1(a).

PN4889

VICE PRESIDENT HATCHER: Say that again.

PN4890

MR BOANZA: In our submission, the minimum rate, which is CW1(a), would remain and there would be junior rates inserted for junior employees based on their age.

PN4891

VICE PRESIDENT HATCHER: You are providing a lower rate of pay for people in the age category than it currently is; is that right?

PN4892

MR BOANZA: That is right, your Honour.

PN4893

VICE PRESIDENT HATCHER: How do we get around 157(3) then?

PN4894

MR BOANZA: If we go to 9, the advice that we've got, your Honour, is that in the National Retail Association v Fair Work Commission [2014], the Full Federal Court was dealing with a question relating to the variation by the Commission of junior rates in the General Retail Award 2010 and at 64, the Federal Court said:

PN4895

There is no basis for any suggestion that the object of establishing and maintaining "a safety net of fair minimum wages" is not a necessary element -

PN4896

Sorry, I withdraw that, that is not the correct clause.

PN4897

DEPUTY PRESIDENT HAMILTON: Do you have work value reasons for inserting junior rates into this award?

PN4898

MR BOANZA: No, we don't, your Honour.

PN4899

VICE PRESIDENT HATCHER: Mr Boanza, I don't know what advice you have received. You can show it to us if you wanted to, if it's in writing, so I can understand the reasoning.

PN4900

MR BOANZA: Your Honour, I submitted it to all the parties last night and I was of the understanding that it might have been received.

PN4901

VICE PRESIDENT HATCHER: I have got the submission. That is what you are talking about?

PN4902

MR BOANZA: That is what I'm talking about, yes, your Honour.

PN4903

DEPUTY PRESIDENT HAMILTON: He is referring to the "advice". You said you got legal advice that there is no barrier to this.

PN4904

MR BOANZA: Yes.

PN4905

DEPUTY PRESIDENT HAMILTON: Do you want to show us that legal advice?

PN4906

MR BOANZA: It is in that submission, your Honour.

PN4907

VICE PRESIDENT HATCHER: That is what he's talking about.

PN4908

MR MAXWELL: Sorry, your Honour, I don't think I've seen this document.

PN4909

MR BOANZA: I have a copy of it.

PN4910

VICE PRESIDENT HATCHER: It was sent by email at 6.48 on Monday, 10 April.

PN4911

DEPUTY PRESIDENT HAMILTON: It doesn't appear to have been sent to the CFMEU.

PN4912

VICE PRESIDENT HATCHER: So your union colleagues got it, but this doesn't appear to have been sent to the CFMEU.

PN4913

DEPUTY PRESIDENT GOSTENCNIK: If Mr Nguyen were here, he could share it with you.

PN4914

VICE PRESIDENT HATCHER: Mr Crawford has it.

PN4915

MR CRAWFORD: Yes, I've got it. You didn't seem to send it to the CFMEU.

PN4916

MR BOANZA: My apologies for that. I've got a spare copy to hand to Mr Maxwell.

PN4917

MR MAXWELL: Thank you.

PN4918

VICE PRESIDENT HATCHER: Is that it?

PN4919

MR BOANZA: That's it, your Honour.

PN4920

VICE PRESIDENT HATCHER: Thank you.

PN4921

MR BOANZA: In relation to the work value case, it is.

PN4922

VICE PRESIDENT HATCHER: Junior rates.

PN4923

MR BOANZA: No, just in relation to the work value case.

PN4924

VICE PRESIDENT HATCHER: Is there anything else?

PN4925

MR BOANZA: Yes, I would like to make some remarks about the merits of the claim and the reasons why we are making the claim. Your Honours and Commissioners, the evidence that we have provided to both junior rates and indeed redundancy is substantive but not based on historical studies. The studies, by their very nature, look backwards to the future needs of the industry and it is from sources who have the credibility to comment on this.

PN4926

We are not attempting to befuddle the Commission on the issues with anything but a fundamental truism based on a fundamental principle. The principle is that employers need employees and employees need their employers. They are not enemies. The truism is that employers know their industry and they are always looking for ways to improve it.

PN4927

The CFMEU, however, paints all employers as though they are constantly seeking to promote their industry by doing harm to employees or to profiteer from them. This is simply not the case and we hope that the Commission sees through this. Rather, the award is designed to provide, amongst other things, a safety net that reflects society's needs, but it is not a policeman. For that purpose, other bodies exist. The award objectives are, in fact, designed to see through this and it is in this that we see the need for our award now to change specifically with the addition of junior rates to improve workplace participation.

PN4928

I hope now to explain how our evidence informs the Commission in its decision-making and it will then be up to the Commission and to no other party to decide the weight of the evidence.

PN4929

As an industry body, CCF is highly engaged with and connected to employers in the industry. The evidence that we have provided is drawn from the input of a multitude of engagements over many years with these employers and the message in recent years on junior rates is getting stronger. These employers include publicly listed and international-based entities through to small, privately-owned family businesses. They include regional and metropolitan businesses and they include businesses from across all of Australia. As we have shown in our submission, the message that they offer on junior rates is the same: they want junior rates to employ juniors and not having junior rates in our award is inhibiting this.

PN4930

On 3 April and again yesterday, the Australian Workers' Union argued that the industry is doing very well. We contend this is the problem with looking backwards, that the statistics can be used to serve one's dogma. Few industry from Western Australia, South Australia, Queensland, Northern Territory or Tasmania would say that their industry is doing very well right now. In Victoria, the industry is only just recovering after a number of contract decisions by the State Government. In New South Wales, (indistinct) volume of work due to massive over supply of companies vying for work at margins that are at record levels, at record low levels.

PN4931

VICE PRESIDENT HATCHER: Whose evidence is this based on?

PN4932

MR BOANZA: Sorry?

PN4933

VICE PRESIDENT HATCHER: What evidence is this based on?

PN4934

MR BOANZA: Only our survey. I will come on to that.

PN4935

VICE PRESIDENT HATCHER: What survey was that? Where do we find that?

PN4936

MR BOANZA: The results of that survey were in our submission of 9 December and they start on page 27 through to 36. That is the question that was asked.

PN4937

VICE PRESIDENT HATCHER: So the submission of 9 December?

PN4938

MR BOANZA: Yes, Commissioner.

PN4939

VICE PRESIDENT HATCHER: What page?

PN4940

MR BOANZA: Page 27. It really starts on page 26, "The View of Industry". What we are portraying here is the view of the industry. We say that our members - - -

PN4941

VICE PRESIDENT HATCHER: What I was asking you about, you were making a series of factual statements about the state of the construction industry in various States.

PN4942

MR BOANZA: Yes.

PN4943

VICE PRESIDENT HATCHER: What is that based on?

PN4944

MR BOANZA: That is based on the feedback that we have from our members, your Honour.

PN4945

VICE PRESIDENT HATCHER: From the survey?

PN4946

MR BOANZA: No, and from our engagement with them.

PN4947

VICE PRESIDENT HATCHER: Is it based on any evidence that has been adduced before the Commission?

PN4948

MR BOANZA: No, it's not.

PN4949

VICE PRESIDENT HATCHER: As I said to Mr Schmitke, and it probably applies to everybody, these are closing submissions which are meant to be based on the evidence that has been adduced before us, so can parties stop making factual assertions, unless it is in response to a question, that are not based on evidence that is before us. All right?

PN4950

MR BOANZA: Yes, your Honour, thank you. Our members would like to see junior rates to enable them to give opportunities to younger staff who are not yet trainees or apprentices but who usually require more training. They feel this would give opportunities to younger people to gain experience in the industry when they are not yet ready or able to begin work as a trainee. We know this because the industry knows this and we feel obliged to pass this to the Commission.

PN4951

We accept that our evidence presents what employers are thinking and feeling. That is the point of it. We submit that for the Commission to ensure the modern award objectives are met, it needs to hear this. We have presented, on page 27 of our submissions of 9 December, the results of a survey. This, like our redundancy survey, is very simple. It reflected what we were hearing in the industry and we wanted to make sure our view was correct. We already knew the essence of the issue, having engagement with our members, but we wanted to give you a high volume of responses with company names included. That is why it is set out like this in our answer and we got that.

PN4952

That volume is now in two parts: firstly, 317 employers, over 16 per cent of those who received it, and it is, your Honour, a very high response to any survey, responded. 16 per cent of the industry agreed that the elimination and lack of junior rates has had a profound effect on youth employment and training in the industry because it discourages employment of young people and school leavers.

PN4953

DEPUTY PRESIDENT GOSTENCNIK: Is this referring to the survey that is not in evidence?

PN4954

MR BOANZA: The survey is in evidence, your Honour, it was submitted at the request of the CFMEU.

PN4955

DEPUTY PRESIDENT HAMILTON: Even if all this is true, and the points you make are by no means insubstantial, there is still the legal problem. It all rests on your assumption that we have the power to do this and I have to say I am not sure that is the case.

PN4956

MR BOANZA: I guess my view on that would be, your Honour, we say that the Commission does have the power to insert the junior rates. Whether that is going to require a work value case or not is a separate matter.

PN4957

DEPUTY PRESIDENT HAMILTON: Sorry, go on.

PN4958

MR BOANZA: I was just going to say, your Honour, that you are quite right, we think the Commission has got the right to insert junior rates and has got the power to do so. The question is whether that is going to require a work value case or not. In the case that a work value case was required, then that will be the requirement.

PN4959

VICE PRESIDENT HATCHER: That sort of case can be run as a work value case to say that, hypothetically, an inexperienced junior employee performs work of a lesser value than an experienced adult employee. You could have run that case but you haven't done that.

PN4960

MR BOANZA: Yes, and I address that in our submission, your Honour, but going back to the evidence that we presented, though, we also took affidavits from a number of employers from across Australia and offered them as witnesses. That evidence fully reflects the survey result and it provides more details. The issue that the survey was not an aberration of CCF's construct could have been explored via cross-examination, but the CFMEU chose not to cross-examine those witnesses, as they did on redundancy.

PN4961

VICE PRESIDENT HATCHER: What were their names again?

PN4962

MR BOANZA: Our witnesses, your Honour, were Mr David O'Connor from Diona, Mr Middleton, who we have already referred to, Mr Hovey and Mr Peter Middleton, which I've already referred to, plus Mr David Castledine. So there was a total of four witnesses.

PN4963

MR MAXWELL: Your Honour, I am not sure that Mr Middleton dealt with junior wage rates.

PN4964

VICE PRESIDENT HATCHER: Mr Hovey, he doesn't deal with it either, does he?

PN4965

MR MAXWELL: I think there are two statements from Mr Hovey and one of them does very briefly.

PN4966

VICE PRESIDENT HATCHER: Yes, I see, thank you.

PN4967

MR BOANZA: What we say, your Honour, is that the CFMEU chose not to cross-examine those witnesses. In redundancy, with Mr Middleton, who was misquoted yesterday in closing remarks, but even that is not all that we have done. The evidence of Mr Castledine, a long-serving CCF branch CEO of the biggest estate in Australia, ex apprentice, a qualified engineer with a law degree, has given sworn evidence that these survey results reflect the commonly held views that he has heard from employers that junior rates are needed and because they hinder the employment of juniors. He has given evidence of this view and, yes, it is opinion, but it is forged following thousands of engagements with employers over his employment period and from regular communications with other branch CEOs that echo this view. There again, the CFMEU had the chance to cross-examine Mr Castledine but elected not to do so.

PN4968

The CFMEU has implied that our witnesses are effectively lying about the state of the industry, that they are self-servingly misrepresenting their needs at the expense of the young. The CFMEU - - -

PN4969

MR MAXWELL: Your Honour, I must object to the assertion that we say the CCF witnesses are lying. We have objected on the basis of hearsay.

PN4970

VICE PRESIDENT HATCHER: So what is that about?

PN4971

MR BOANZA: It is based on the witnesses' statements and the CFMEU's response. The implication is that our witnesses and the industry in general are misrepresenting their position in relation to junior rates in order to exploit.

PN4972

VICE PRESIDENT HATCHER: Don't worry about implications. You just respond to what actually has been said. In paragraph 10 of Mr Castledine's statement, exhibit 23, he talks about the - sorry, I have just lost it now - yes, the re-establishment of junior rates. What is that referring to?

PN4973

MR BOANZA: There were some limited junior rates in the National Building Award. We acknowledge they were limited.

PN4974

VICE PRESIDENT HATCHER: What did they apply to?

PN4975

MR BOANZA: They applied to, I think, roof tilers and some other limited circumstances, but we acknowledge that, we acknowledge that part of the union's submission that they were not as widely spread as we thought, they were applied to a couple or to some Western Australian occupations.

PN4976

DEPUTY PRESIDENT HAMILTON: So, in most cases, junior rates did not apply in these building awards - in most cases?

PN4977

MR BOANZA: It did apply to the National Building Award but not universally to all occupations in that award, and that has been the union's submission and we acknowledge that, but we still maintain that we would like junior rates to be inserted regardless.

PN4978

In contrast with the volume and quality and consistency of the evidence that we have provided, the CFMEU has provided the opinion of two witnesses, Mr O'Hearn and Mr Cameron. Mr O'Hearn states in paragraph 7 of his statement:

PN4979

It is very rare to non-existent that the industry seeks to hire 15 to 16 year olds.

PN4980

We do not disagree and submit that it is the lack of junior rates that has contributed to this situation and there is no incentive for employers to hire junior workers and, indeed, there is a disincentive, which I will come to shortly.

PN4981

Mr O'Hearn then states in paragraph 21:

PN4982

I regularly see young employees paid as apprentices when not signed up and not receiving training as just an attempt to pay low wages. I have spent a substantial part of my work preparing, settling and negotiating wage underpayments based on young employees being incorrectly paid as apprentices when they are not signed up as apprentices.

PN4983

This statement appears to be contradictory because the statement in paragraph 7 is that it is very rare to non-existent that the industry seeks to hire 15 and 16 year olds. Moreover, no evidence has been produced of a single exploitation prosecution against an employer in the industry, nor has any evidence been adduced that the introduction of junior rates will lead to the exploitation of young workers. Mr O'Hearn's evidence appears dogma. At best, it is conflicting and unsubstantiated opinion and, as such, it should be given little weight.

PN4984

DEPUTY PRESIDENT HAMILTON: If you engage a 16 year old with no prior experience on a building site, what would they actually do?

PN4985

MR BOANZA: I am not sure, your Honour. We would imagine they are engaged as junior employees doing some sort of work experience or practical work and they would be paid at CW1(a) at the moment.

PN4986

DEPUTY PRESIDENT HAMILTON: Would they need to be supervised?

PN4987

MR BOANZA: Absolutely, your Honour, they will have to get a White Card, and then, as we would say in our submission - - -

PN4988

DEPUTY PRESIDENT HAMILTON: Sorry, I mean closely supervised, unlike a general builder's labourer.

PN4989

MR BOANZA: That's right, or even another employee with a bit more maturity and a bit more experience. Building sites are very dangerous.

PN4990

VICE PRESIDENT HATCHER: This might be a person without a ticket to operate any piece of equipment?

PN4991

MR BOANZA: Yes.

PN4992

VICE PRESIDENT HATCHER: So I am just trying to imagine what they would actually do.

PN4993

MR BOANZA: They will have to be basic labouring jobs, I would imagine, your Honour, but I couldn't tell you. It's not our submission.

PN4994

VICE PRESIDENT HATCHER: Well, you are trying to persuade us and I'm just trying to get a picture of what, if this was allowed, these people would actually be doing.

PN4995

MR BOANZA: We would say they would start off by being mentored and shown around the worksite and they would be shown as to what the different jobs that are performed at the worksite are and then they would be given, under supervision, the opportunity to do some of these jobs.

PN4996

VICE PRESIDENT HATCHER: Which jobs?

PN4997

MR BOANZA: In our case, it would be labouring jobs, machine operations, pipeline. With civil construction there is a lot of subdivisional work being constructed, so that would be what our members would be interested in.

PN4998

VICE PRESIDENT HATCHER: The machine work, what is that?

PN4999

MR BOANZA: Operating plant, your Honour, excavators, rollers, you know, licensed - - -

PN5000

VICE PRESIDENT HATCHER: Can they do that without a ticket?

PN5001

MR BOANZA: No, they can't.

PN5002

VICE PRESIDENT HATCHER: You are not seriously saying you are going to have a 16 year old operating an excavator, are you?

PN5003

MR BOANZA: Our advice is that they can, there's nothing to stop an employer from training an employee, however young they might be.

PN5004

VICE PRESIDENT HATCHER: But you are talking about having a 16 year old, who presumably somehow got a ticket, operating an excavator and getting paid junior rates?

PN5005

MR BOANZA: No, we are not looking at that at all. We just want the 16 year olds to have an opportunity to go into a building site for a period of time and obviously they will be doing basic labouring work to start with, they would not be trusted with a 40 tonne excavator, but they will be shown the different jobs around the sites, they will be doing some basic manual work and supporting work, not dissimilar to what's in the job description of a CW1(a) in the award, which is an entrant for the first three months in the industry, and they would be paid, yes, junior rates while they are doing that because, at the moment, despite the limitations of what they can do and the amount of supervision needed, they do not have junior rates.

PN5006

DEPUTY PRESIDENT HAMILTON: Are there any basic jobs on your sites which just involve lifting and that sort of thing which doesn't involve equipment and doesn't cause a danger to them?

PN5007

MR BOANZA: There is, there's - - -

PN5008

DEPUTY PRESIDENT HAMILTON: Such as what?

PN5009

MR BOANZA: There are, there are other - - -

PN5010

DEPUTY PRESIDENT HAMILTON: Give me an example.

PN5011

MR BOANZA: Well, with pipeline, for example, your Honour, there are labourers required to, you know, be around and make sure that things are lined up and do basic digging - manual work.

PN5012

VICE PRESIDENT HATCHER: You said the CW1 classification already effectively gives a discount for inexperience, that is, you have a rate on commencement, then you have a three-month-rate, then you have a 12-month rate and then you get the full rate when you complete various requirements. There is already in the structure a recognition of inexperience attracting a lower rate, so why would there be then a further discount for the fact that you are 16 or 17?

PN5013

MR BOANZA: That rate, the CW1(a), as we said in our submissions, adds up to nearly $20 an hour. That is far in excess of the junior rates in any other award.

PN5014

VICE PRESIDENT HATCHER: Even assume there is no problem with power, how could we assess a junior rate without having a proper work value case to satisfy us that a junior CW1(a) performs work of a lesser value than an adult CW1(a)?

PN5015

MR BOANZA: Your Honour, there are junior rates in other awards and we would say that is the same process that was used in other awards and if that requires a work value case, you know, that's what it will require. Our advice is that it should not be required, and we have provided that advice, but if the Commission makes that decision - - -

PN5016

VICE PRESIDENT HATCHER: I am not talking about power now, I am talking about the merits of the case.

PN5017

MR BOANZA: Yes.

PN5018

VICE PRESIDENT HATCHER: Why would we assume that a junior beginner performs work of a less value than an adult beginner for whom there is already a discounted rate?

PN5019

MR BOANZA: Because those junior employees, our members tell us, require a lot more supervision than would an adult employee. They don't employ, you know, very young people because of that reason. Given the value of the CW1 rate, they prefer to employ a 25 year old to a 16 year old any time of the week because of the maturity and the amount of supervision that a much younger employee requires.

PN5020

So the reality is there is no evidence has been produced to show that exploitation of young workers is more prevalent in any of the other modern awards that contain junior rates than it is in awards that do not contain junior rates, such as the Building and Construction Award.

PN5021

The CFMEU has said that we have been biased by presenting the survey and our witnesses and imply that we are somehow failing the Commission by doing so. Saying such things does not make it so. Indeed, it is an insult to the whole industry. The reality is that we are presenting the nail, we are presenting solutions recommended by employers. It is not an earth-shattering situation to say that young people in their expectations have changed over the last 25 years or over the last 10 years. We have employers who are all reporting that it is hard to get young people to join the industry and, when they do join, they often do not have the familiarity with the physical workplace.

PN5022

It is a fact that our industry is high risk, it is a fact that it is a high risk physical industry and people can be very badly hurt very quickly. What employers know, and we are trying to tell the Commission through our submission, is that in our industry, very young people are more costly to supervise than older adults. Employers want to hire young people - they were young themselves once and were given a start in the industry - but the reality is that an employer, when faced with the option of hiring a 16 year old or a 25 year old, will pick up the 25 year old. They need reasonable junior rates to cover the additional costs of safety in hiring and supervising a younger person or else they will not do it.

PN5023

In conclusion, we have presented significant evidence that is probative, our evidence explains the opinion of our industry on key employment participation, and the opinion is staggeringly consistent. The CFMEU has chosen not to cross-examine the evidence of our witnesses. If they believed the evidence was incorrect, then they should have called those witnesses, as they should have called our witnesses for redundancy. They had the opportunity and they stepped back. This evidence is probative and we submit that the Commission should give it significant weight.

PN5024

We submit that the award needs junior rates in order to comply with the award objectives and specifically the need to promote social inclusion through increased work participation. If it pleases.

PN5025

DEPUTY PRESIDENT GOSTENCNIK: Mr Boanza, can I just take you to the submission that you make at paragraph 4 in the written document that you circulated last night. The suggestion there seems to be that we should exercise power to, you say, rectify omissions. The provision actually is concerned with removing ambiguity, uncertainty or correcting an error in the award. What is it that you say is the ambiguity or uncertainty or the error in the award?

PN5026

MR BOANZA: We say that the error, your Honour, was that there was no proper consideration given to the junior rates that existed in - - -

PN5027

DEPUTY PRESIDENT GOSTENCNIK: That is a criticism of the decision. Are you suggesting that the Commission did not intend not to - did not intend that this award not have junior rates of pay?

PN5028

MR BOANZA: Yes, we say that it wasn't contemplated at the time and that is an error.

PN5029

DEPUTY PRESIDENT GOSTENCNIK: So it is a criticism of the decision. Yes, all right.

PN5030

VICE PRESIDENT HATCHER: Thank you. Any other employer submissions? No. Mr Crawshaw, Mr Maxwell, can I start with this question, which may be relevant to the question of power, at least: in clause 19.1(a) of the award, page 27 - do you have that, Mr Maxwell?

PN5031

MR MAXWELL: Yes.

PN5032

VICE PRESIDENT HATCHER: In terms of the minimum wages, it refers to an adult employee within this level being paid these rates and then, of course, separately it has got apprentice wages. On one view, the award doesn't set any rate of pay for a non-adult employee, whatever that is, who is not an apprentice. Would you treat that as a prohibition on their employment or an omission of a rate for that category or what?

PN5033

DEPUTY PRESIDENT GOSTENCNIK: Or perhaps the ambiguity or uncertainty that Mr Boanza is looking for.

PN5034

VICE PRESIDENT HATCHER: Or is there some other provision I have missed?

PN5035

MR MAXWELL: Your Honour, I haven't turned my mind to that issue, but the intention of the award and the understanding of the award parties is that 19.1(a) applies to all employees other than trainees and apprentices.

PN5036

VICE PRESIDENT HATCHER: Where is the evidence of that?

PN5037

MR MAXWELL: The understanding on the basis that there's no evidence of any employers employing - sorry - if the employees - if this award only applies to adults and trainees and apprentices, then, I suppose, the junior - any employees that are not an adult, and there is no definition of adult in the award other than for adult apprentices, then there is a question about what award would then apply to people that are not an adult.

PN5038

VICE PRESIDENT HATCHER: It is not a question of whether the award applies, it's to whether it sets a rate for them.

PN5039

MR MAXWELL: Your Honour, I would like some time to consider that and also to go back through the various decisions leading up to this, but it has always been the case since the recognition in the Junior Rates Inquiry of 1999, which we have referred to extensively in our written submission, that junior rates were not utilised and that employees, irrespective of their age, were paid the adult rates for the industry.

PN5040

VICE PRESIDENT HATCHER: Anyway, perhaps between now and 1 o'clock, you can turn to the merits and you will have the lunch break to find anything that you think is relevant.

PN5041

MR MAXWELL: Just briefly in regard to the submission of the CCF that we have just received, Mr Boanza seeks to rely on section 160 and refers to section 157. I just wish to point out to the benefit of the Bench that sections 157 and 160 fall within Division 5 of Part 2-3 of the Act and Division 5 is headed "Exercising modern award powers outside 4 yearly reviews and annual wage reviews". Therefore, clearly, sections 157 and 160 are not relevant to the four-yearly review and they are covered by the provisions earlier set out in the Act and, in particular, section 156.

PN5042

DEPUTY PRESIDENT HAMILTON: So what is the relevant provision?

PN5043

VICE PRESIDENT HATCHER: It is 156(3) not 157(3).

PN5044

MR MAXWELL: Yes, that is correct, your Honour, and we say that requirement on the Commission is clear, that the Commission may make a determination varying modern award minimum wages only if the Fair Work Commission is satisfied that the variation of modern award minimum wages is justified on work value reasons.

PN5045

DEPUTY PRESIDENT HAMILTON: Are you saying that if the minimum wage clause is varied, that varies minimum wages?

PN5046

MR MAXWELL: That's correct. And, your Honours, we would refer to, I think, paragraph 46 of the Federal Court decision that Mr Boanza referred to where they refer back to the Fair Work Commission decision that was being dealt with and, in paragraph 46, says:

PN5047

Under the heading "Is the Award achieving the modern awards and minimum wages objectives?", the FWC referred to sections 134 and 284 of the FW Act (at [115]). The FWC stated that in its opinion, because the SDA's claim was for an increase in the minimum rate payable to a 20-year-old, the claim met the description of a variation which "relates" to the Retail Award's minimum wages.

PN5048

It goes on. We say this case is the opposite of that in that the CCF are seeking to reduce the wage rate that will apply to a 15, 16, 17 year old.

PN5049

DEPUTY PRESIDENT HAMILTON: Well, there is no wage rate that applies to a 15, 16, 17 year old, apparently, on one view.

PN5050

MR MAXWELL: Maybe on one view, but, as I say, we will take that on notice and look at that issue. The point we wish to make is in the Federal Court decision, they accepted that interpretation of the Fair Work Commission that it was a variation to the minimum wages, and we say that then enlivens section 156(3) of the Fair Work Act.

PN5051

Your Honours, I have made extensive written submissions on the issue of junior wage rates and we have pointed out that, looking at the statistics, the absence of junior wage rates has not harmed the employment of young people in the industry. The construction industry has the highest level of full-time employees in both the 15 to 19 and 15 to 24 year old age group. That evidence was confirmed during the cross-examination of Mr Wilson from the MBA. We also rely on the witness statements of Mr O'Hearn - - -

PN5052

VICE PRESIDENT HATCHER: Can you give a transcript reference for that?

PN5053

MR MAXWELL: Yes, that is PN1836 and PN1838.

PN5054

VICE PRESIDENT HATCHER: What date was that?

PN5055

MR MAXWELL: The date escapes me. It was last Wednesday.

PN5056

VICE PRESIDENT HATCHER: Yes, I see.

PN5057

MR MAXWELL: We also rely on the witness statements of Mr O'Hearn, who discusses the availability of different work experience programs that are currently available, which we say addresses the type of issues that Mr Boanza raised about people getting experience and a look around construction sites, that those programs are currently in place, although they are not generally taken as employees under those arrangements.

PN5058

We also rely on the witness statements of Mr O'Hearn and Mr Cameron, which we have provided. Mr Cameron's witness statement is exhibit 17 and Mr O'Hearn's witness statement is exhibit 15. In those witness statements, they identify their concern that if junior wage rates were introduced, it would undermine the apprenticeship system and traineeship system that currently exist, and particularly in regard to the evidence of Mr Cameron in his witness statement where he deals directly with the civil construction industry where he talks about apprenticeships and traineeships are a more recent introduction and since 2000 they have been growing and his concern that junior wage rates would undermine those arrangements. Your Honours, we submit that a work value case is required under the Act to provide for junior rates.

PN5059

The only other point I wish to make is that in regard to the CCF survey, which we say should be given no weight, and we also object to the evidence of Mr Hovey and Mr Castledine and Mr O'Connor, and we have dealt with that in our written submission in regard to the evidence and we rely on those submissions, but in regard to the CCF survey, we note that the survey, to the extent that you can call it a survey, given it was an email question sent out to the CCF membership, the CCF in, I think, the statement of Mr Castledine refers to the 2000 members that they have across the country and there were only 314 responses to that survey on a simple question "yes" or "no", which indicates that approximately 84 per cent of the CCF members are either indifferent or maybe do not support the variation that is being sought.

PN5060

We say that survey evidence should be given no weight at all. It is not a proper survey and it was based on a false presumption because the question, when you look at it, says that junior wages rates were - the claim of the CCF is that junior wage rates were extensively used by their members in the building and construction industry. As our written submission points out, and it was recognised in the junior rates case of 1999, junior wage rates only applied to unapprenticed juniors in South Australia and to junior roof tilers in Western Australia. We say when you look back through the history of those awards, those areas didn't cover the members of the CCF, that roof-tiling companies are not members of the CCF and people engaging unapprenticed trades are generally not members of the CCF in regard to the building trades.

PN5061

We point out that the decision in the junior rates case in 1999, they made explicit recognition that junior wage rates were not being utilised in the construction industry and we say there is no evidence that the junior rates Full Bench was incorrect and, if they were used, we would expect there would have been evidence provided to this Commission to show that and it has not occurred.

PN5062

On the basis of those submissions, and our written submissions, we oppose the variation to include junior wage rates.

PN5063

VICE PRESIDENT HATCHER: You can say anything additional you want to say at 2 o'clock and we can wrap this issue up.

PN5064

MR MAXWELL: Yes, your Honour.

PN5065

DEPUTY PRESIDENT GOSTENCNIK: For no other reason than perhaps your interest in research over lunch, the Plumbers and Fire Sprinklers Award minimum wages provisions opens with the same words, "An adult employee", compared to the Joinery and Building Trades Award, which doesn't and simply provides a classification of minimum wages for employees other than specified in 18.4, which relates to apprentices, trainees and supported wage employees - the relevant minimum wages apply.

PN5066

VICE PRESIDENT HATCHER: We will now adjourn and resume at 2 pm.

LUNCHEON ADJOURNMENT [1.00 PM]

RESUMED [2.01 PM]

PN5067

VICE PRESIDENT HATCHER: Mr Maxwell, did you want to add anything to this question?

PN5068

MR MAXWELL: Just briefly to address the question, I suppose, we were dealing with prior to the luncheon break in regard to the minimum wages issue. We say that the award was intended to cover all employees within the classifications contained within the award and all the awards on which this award was based, particularly the National Building and Construction Industry Award 2000 and the AWU Civil and Construction Award, didn't contain that word "adult".

PN5069

VICE PRESIDENT HATCHER: So where did it come from?

PN5070

MR MAXWELL: From my recollection and the documents I have gone through, it first appeared in the exposure draft released by the Australian Industrial Relations Commission in December, I think it was, 2008 - sorry, January 2009. From our perusal of the submissions that were made in regard to the exposure draft, a number of submissions were made in regard to junior wage rates, in favour of junior wage rates from the HIA and MBA and opposed to the junior wage rates by the CFMEU. We deal with those briefly in paragraph 126 of our written submission.

PN5071

From what we can find, no party made any submissions in regard to that opening paragraph of the wording in 19.1(a). From my view, it was perhaps an oversight on the parties, but the parties' main intention was to address the issue at the time to ensure that the minimum rates were calculated in accordance with the hourly rate calculation and the weekly hire calculation in clauses 19.3(a) and 19.3(b).

PN5072

VICE PRESIDENT HATCHER: Does it follow from that submission that this is something that we should correct, leaving aside the question of junior rates?

PN5073

MR MAXWELL: If it needs correcting, yes, we say the Full Bench would correct it.

PN5074

Your Honour, in paragraph 164 of our submission, we refer to the Award Modernisation decision [2008] AIRCFB 550 at paragraph 12 where the Full Bench said:

PN5075

In a general sense we consider that these considerations require the Commission to make awards primarily on broad industry lines and, as far as practical, to make those awards applicable to all award-covered employees in the relevant industry.

PN5076

What we say is that prior to 1 January 2010, the word "adult" wasn't in the pre-reform awards and clearly those awards covered non-adult employees in the building and construction industry, and given it was the intention of both the government and the Fair Work Commission to ensure that the modern awards also covered those employees and others, they weren't award free, then we submit the intention was that that would continue to apply.

PN5077

On the basis that you now have applications before you that seek to insert junior wage rates is recognition that the industry recognises, or has recognised to date, that the wage rates in clause 19.1(a) and calculated in accordance with 19.3(a) and (b) apply to non-adult employees, particularly the 15, 16 to 20 year olds.

PN5078

On that basis, we say to now interpret the award as not applying to the non-adult employees would be an absurd outcome and contrary to the intention of the Award Modernisation proceedings. If the Commission pleases.

PN5079

VICE PRESIDENT HATCHER: Mr Crawford?

PN5080

MR CRAWFORD: Your Honour, what is clear is there are currently no junior rates in the award and we certainly say that there has been insufficient evidence presented to justify the insertion of junior rates. We would say quite a significant case - regardless of the legal issue about whether a work value case strictly has to apply - as a matter of industrial merit, a substantial case would have to be run to justify workers of a certain age being paid lower rates than everyone else in the industry. The evidence led by the Civil Contractors Federation in terms of what you could call a survey and a few brief witness statements wouldn't get anywhere near justifying this Bench inserting junior rates into the award.

PN5081

We think the reference to the word "adult" is an error and that this Full Bench should correct it. Some textual support for that proposition can be found from clause 36.6 of the current award. That clause refers generally to a restriction on employees under the age of 18 years being required to work overtime or shift work. That wording is not linked to an apprenticeship or traineeship, it is general wording. We say that is a textual indication that the reference to "adult" in the minimum wages clause is actually an error and, as the CFMEU pointed out, everyone in the industry is proceeding on the basis that currently the minimum wages in the award apply to people of all ages, aside from apprentices and trainees.

PN5082

During the lunch break, I noticed that the Fair Work Ombudsman certainly also gives that advice out to the industry. They have got on their website an indication that under the On-site Award junior employees receive the adult rates.

PN5083

That is all I wanted to put.

PN5084

VICE PRESIDENT HATCHER: Thank you. Anything in reply, Mr Boanza?

PN5085

MR BOANZA: Yes, thank you, your Honour. Absolutely, yes, we just heard from Mr Maxwell that it is an error in the award the fact that it refers only to adult employees. Our members proceed on that basis, they proceed on the basis that regardless of the age of an employee, they need to pay adult wages because that's all there is and this is why they have been so strongly requesting that we put submissions in relation to the introduction of junior rates, which we say would address that issue, would correct that error and omission that was made at that time of the making of the award and it would also provide employers with a junior rate in order to ensure that there is inclusion in accordance with the modern award objectives.

PN5086

On a bona fide reading of this award, there is very little inclusion in accordance with the modern award objectives when there is no type of employment other than adult employees and apprentices and trainees, but there is no employment for any unapprenticed employee. Thank you.

PN5087

VICE PRESIDENT HATCHER: Thank you.

PN5088

MR SCHMITKE: Your Honour, if I could just, at this juncture, reiterate the comment I made this morning about the Master Builders not proceeding with this aspect of our claim in the context of this matter. I would say no more than that.

PN5089

VICE PRESIDENT HATCHER: Thank you. The next issue, I think, is coverage. Mr Crawshaw?

PN5090

MR CRAWSHAW: The coverage issue we have raised is the first one listed. I think the first thing I should do in relation to our issue is just to clarify the summary at paragraph 9 of our submission which talked about ensuring the primacy of the Building and Construction Award. I think the responses of various employer organisations have taken that to mean that we are seeking preferential treatment for the Building and Construction Award.

PN5091

We submit that it is clear from the amendment we seek and the submissions we have made at paragraphs 162 to 172 that we are not seeking that the Building and Construction Award be given preferential treatment in terms of on-site employees, but trying to remedy the current situation which, through clause 4.2, as interpreted by at least one Full Bench of this Commission, has given priority to other awards listed in clause 4.2 in relation to on-site employees. In our submission - - -

PN5092

VICE PRESIDENT HATCHER: What page is this?

PN5093

MR CRAWSHAW: Paragraphs 162 to 172 of our principal submission.

PN5094

VICE PRESIDENT HATCHER: Thank you.

PN5095

MR CRAWSHAW: If I could take you to the current provision, clause 4.1 says:

PN5096

This industry award covers employers throughout Australia in the on-site building, engineering and civil construction industry and their employees in the classifications within Schedule B -

PN5097

which I just note by the by is consistent with Mr Maxwell's submission just made that the award is meant to cover all employees, whatever age, but coming to subclause 4.2, it provides:

PN5098

Without limiting the generality of the exclusion -

PN5099

referring to 4.1 -

PN5100

this award does not cover employers covered by -

PN5101

various awards.

PN5102

VICE PRESIDENT HATCHER: That does limit the generality of the exclusion.

PN5103

MR CRAWSHAW: I am sorry?

PN5104

VICE PRESIDENT HATCHER: That does limit the generality of the exclusion.

PN5105

MR CRAWSHAW: That is one of the problems with the way it is worded. The way the two Full Benches have interpreted that is that subclause 4.2 is to be read as a stand-alone and that 4.1, in effect, applies to other awards and, in particular, the way those - particularly the Jarrad decision that we have referred to at paragraphs 167 and 168, has led to a situation where clause 4.8, which is the most appropriate award classification clause that you find in many awards, has no applicability because if you take - perhaps the best way to show it is to go to the Jarrad decision which deals with the Plumbing Award. I think some copies have been made and, once again, I thank the Commission staff for that.

PN5106

In that decision, you will see that for the purposes of the BOOT test, there was an argument as to whether the Building and Construction Award or the Plumbing Award applied. The Plumbing Award provisions - you have probably got them before you for the purpose of the review anyway - but they are also set out at paragraphs 17 through to 21 of the decision and, in particular, clause 4.1 says:

PN5107

This industry and occupational award covers: (a) employers throughout Australia in the industry -

PN5108

et cetera - that is (a) - and (b) employers with respect to employees engaged in the various occupations. So it goes to both the industry and occupations.

PN5109

The way the Full Bench read that clause in combination with clause 4.2 of the On-site Award is set out at paragraph 38 where the Full Bench said:

PN5110

Clause 4.2 of the On-site Award provides that "without limiting the generality of the exclusion, this award does not cover employers covered by: ... the Plumbing and Fire Sprinklers Award 2010". Given the finding that the Company is covered by the Plumbing Award, it follows that the On-site Award does not cover the Company. In these circumstances, it is not necessary to consider the operation of clause 4.6 of the Plumbing Award and clause 4.8 of the On-site Award and, in particular, which award contains the classifications most appropriate.

PN5111

Clause 4.6 of the Plumbers Award, I think, has a similar provision to clause 4.8, namely the most appropriate classification test. The long and the short of it is that under that Full Bench decision, once an employer falls within any of the awards set out in subclause 4.2 of the Building and Construction Award, the Building and Construction Award is, in effect, excluded and there's no room for the most appropriate test that is found at subclause 4.8 of the Building and Construction Award and a similar test is found in these other awards because that's the general prescription that the Commission put in, or Fair Work Australia, as it then was.

PN5112

VICE PRESIDENT HATCHER: What would the result of the Jarrad case be if your variation was granted?

PN5113

MR CRAWSHAW: The result would be that subclause 4.2 would not apply and because both awards applied, subclause 4.8 would apply and the award classification which is most appropriate would apply, and that would apply whether you applied the Plumbing Award or the - - -

PN5114

VICE PRESIDENT HATCHER: In Jarrad, what award would end up applying?

PN5115

MR CRAWSHAW: Under Jarrad, as you can see, in paragraph 38, by way of obiter, I suppose, the Full Bench went on to say, "If we'd applied clause 4.6 or 4.8, we would have found that the Plumbing Award had the most appropriate classification." We are not suggesting it would have changed the result in the Jarrad case, what we are saying is that the Full Bench decision in the Jarrad case exposes a real practical problem with clause 4.2 of the Construction Award.

PN5116

VICE PRESIDENT HATCHER: Does clause 4.8 of the Construction Award have any operation?

PN5117

MR CRAWSHAW: Not in relation to those awards, that's the point, and that's the matter that we're trying to remedy and, as I say, we are not trying to give the Construction Award preferential treatment, we are trying to give it equal treatment with these other awards in respect of employers who are employing employees on site.

PN5118

VICE PRESIDENT HATCHER: I don't understand how the cause of certainty is advanced by placing greater reliance upon clause 4.8. I would have thought 4.8 is a last resort clause, not something you would use in the ordinary course of determining coverage of an award, because you can never tell what the actual answer will be.

PN5119

MR CRAWSHAW: It's the normal method for dealing with overlapping coverage.

PN5120

VICE PRESIDENT HATCHER: I know, but it's not a desirable method because no employer can know with certainty what the answer will be.

PN5121

MR CRAWSHAW: When your Honour says it is not a desirable method, it's the method that has been inserted in all the modern awards and, as we set out in paragraph 171, when Watson SDP dealt with another application relating to clause 4.2, he says it is:

PN5122

a mechanism applied generally across modern awards for deciding which modern award applies in the case of overlap or potential overlap.

PN5123

Then he goes on to talk about clause 4.8 being the appropriate mechanism and, with respect, there is nothing remarkable about that.

PN5124

DEPUTY PRESIDENT GOSTENCNIK: But the current provision brings about more certainty than your provision, does it not?

PN5125

MR CRAWSHAW: I am sorry?

PN5126

DEPUTY PRESIDENT GOSTENCNIK: The current provision brings about more certainty than your provision.

PN5127

MR CRAWSHAW: Yes, it may bring about certainty, but it doesn't conform with the principle that is set out in paragraph 164, which Mr Maxwell just read to you in the context of the junior rates argument, that the Commission is to make awards primarily on broad industry lines and, as far as practical, to make those awards applicable to all award-covered employees in the relevant industry. Here there is a big carve-out of a whole lot of employees.

PN5128

An argument may arise, and I think we put it in Jarrad, that despite the exclusion of the Plumbing Award, when you come to the Plumbing Award, you have got to still look at clause 4.6, which talks about if another award applies. The effect of the Full Bench decision is 4.26 has no application, but in the Coffey decision, which we have also set out, it appears that a slightly different approach was taken to the Manufacturing Award in this sense, that the clause - do you have the Coffey decision before you? One of your Associates suggested - - -

PN5129

VICE PRESIDENT HATCHER: It is here somewhere.

PN5130

MR CRAWSHAW: It has been provided earlier. It is dealt with at paragraphs 22 to 24. Once again, in that case, it made no practical difference in that there was a finding that the Manufacturing Award was more appropriate, but in the Coffey decision, it was found there was a priority for the Manufacturing Award, as is obvious from clause 4.2, so then the provisions of the Manufacturing Award were looked at and then there was a comparison made under the more appropriate classification provision in that award between the On-site Award and the Manufacturing Award, so the attitude wasn't taken that the effect of 4.2 was to automatically take the On-site Award out of the picture.

PN5131

VICE PRESIDENT HATCHER: It was decided on the more appropriate basis, not on the basis that there was an exclusion. If I'm a labourer employed by a plumbing company that does on-site construction work, does it make any difference to my pay and conditions whether I am under the Plumbing Award or the On-site Construction Award?

PN5132

MR CRAWSHAW: I think we went through that exercise with Jarrad and it would depend on the particular classification.

PN5133

VICE PRESIDENT HATCHER: I am not a plumber, I am just a labourer.

PN5134

MR CRAWSHAW: It did make a difference. They classifications, insofar as they line up, do not line up on exactly the same wage rates and that's why it was relevant for the BOOT test.

PN5135

VICE PRESIDENT HATCHER: Which has the higher rates?

PN5136

MR CRAWSHAW: I think there were some classifications higher in one award and some classifications higher in another award.

PN5137

VICE PRESIDENT HATCHER: Are there plumbing classifications in the On-site Construction Award?

PN5138

MR CRAWSHAW: I think the company in question was doing pipeline and they said that was part of plumbing and the CFMEU - - -

PN5139

VICE PRESIDENT HATCHER: Obviously, if you were a plumber, you would be under the Plumbing Award, but I'm just wondering whether the effect of your variation would be that, say, a trades assistant would thereby be under the Construction Award and end up being covered by two awards.

PN5140

MR CRAWSHAW: I don't think - are you saying the one employer might have employees under different awards?

PN5141

VICE PRESIDENT HATCHER: I am wondering whether your variation leads to the result that if there is somebody covered by a classification that's in both awards, for example a trades assistant or a labourer, whether the effect of your variation is to put the labourer under the On-site Construction Award so the employer ends up being covered by two awards.

PN5142

MR CRAWSHAW: The employer? Yes.

PN5143

VICE PRESIDENT HATCHER: The employer.

PN5144

MR CRAWSHAW: But that would not be necessarily an unusual situation.

PN5145

VICE PRESIDENT HATCHER: I am just asking, is that the result?

PN5146

MR CRAWSHAW: It could happen, I would imagine, though the effect of clause 4.8 might have something to say about that because that may be a consideration that is taken into account in determining which is more appropriate.

PN5147

VICE PRESIDENT HATCHER: If it doesn't change somebody's coverage, I'm just wondering what the point of the variation is. Presumably you are seeking the variation because you want to change somebody's coverage from one award to another.

PN5148

MR CRAWSHAW: We are seeking to have the On-Site Award cover the whole industry, subject to the normal overlapping coverage criteria, as is meant to be the intent of these awards.

PN5149

Can I just say briefly, because there's been replies on this and we are going to hear from them, I think the AiG submission in reply suggests that there was vigorous debate about this issue and has mentioned certain documents. We would submit that those documents, without going into them, dealt with this matter rather cursorily and, indeed, the Full Bench decision didn't really come to grips with this particular matter.

PN5150

In summary, what we are saying is we are seeking not preference for one award or the other but a sensible middle ground that is the norm in modern awards. If the Commission pleases.

PN5151

VICE PRESIDENT HATCHER: Mr Crawford, do you want to say anything about this?

PN5152

MR CRAWFORD: No, your Honour, we support the variation.

PN5153

VICE PRESIDENT HATCHER: Who wants to go first on the employer's side? Ms Paul?

PN5154

MS PAUL: Yes, your Honour. Your Honour, could I just first take you to the actual union's submission, the new words that they are proposing at 163. Notwithstanding Mr Crawshaw's claim that this is not going to provide some sort of primacy, in effect, it actually does, it neuters the effect of 4.2 in relation to creating any sort of exemption which was intended by virtue of that particular provision. In effect, it's basically "employers of employees engaged on-site performing work in the classifications".

PN5155

If you happened to be a manufacturer, for example, and, as it would be, there may be from time to time that you might find an employee who generally does off-site work ends up on-site for whatever reason, the question is, wouldn't that employee, who would then be engaged on-site performing work within potentially one of the classifications, get captured by the On-site Award as opposed to being appropriately covered by the Manufacturing Award?

PN5156

In light of the argument this is somehow not trying to give primacy to the Building Award, we say that, in effect, the very drafting actually does and reinstates the actual claim that the CFMEU brought before the Award Modernisation Bench on the issue of wanting to have primacy given to the Building Awards. I don't intend to go through that because we have dealt with that because we have dealt with that in our submissions and referred the Bench to the relevant documentation.

PN5157

I think what is useful, your Honour, is in relation to looking at the case which was referred to again by the CFMEU, being His Honour Watson SDP's decision in Application by Master Builders Australia Limited [2013] FWC 4576. This is the claim that was brought by a number of parties, the MBA, HIA and ABI, for a variety of claims. Again, I don't intend to take you through all of that, I just wanted to highlight that the extraction at 171 of the specific paragraphs of that decision omits to put it within context.

PN5158

What I say is really around the context that this was around looking at what was being sought as an HIA application for an extension of 4.2, but, interestingly enough, as part of that particular decision, which can be found at 131 of the decision, there is a submission that was made by the AWU in relation to the Premixed Concrete Award and Asphalt Award and, at 131, there is an extract of the Award Modernisation Full Bench statement and the relevant extract reads:

PN5159

It appears that premixed concrete batch plants are predominantly operated by employers in the premixed concrete industry, servicing customers in a variety of industries including the on-site building, engineering and civil construction industry. There are, however, some employers in the on-site building, engineering and civil construction industry who have purchased and operate their own plant, principally in relation to road-making.

PN5160

It then goes on to say:

PN5161

We think that batch plant operators and associated premixed concrete classifications should fall within the coverage of the modern award covering the employer – the Premixed Concrete Award 2010 in the case of employers within that industry and the Building and Construction General On-site Award 2010 in relation to employers in that industry.

PN5162

His Honour Watson SDCP effectively made the amendment to the award by adding the exclusion of the Premixed Concrete Award at 4.2, but essentially that paragraph, we say, outlines how 4.2 is to operate. If an employer is covered by the industry, which we will use the premixed concrete as an example, then that is the appropriate award and that is the classification to be looked at and that's where the question starts and ends.

PN5163

Clause 4.8 only has application if the employer is found to be operating in two different industries, at which point there is an issue about whether or not there is an overlapping award and then you look at what the employee is actually doing.

PN5164

What the CFMEU is seeking as support is the cases that they have raised. The first one is the Jarrad decision, which was mentioned earlier. We say the Jarrad decision effectively is not an issue about - to use a better term, it doesn't nullify the effect of 4.8. 4.8, as your Honour quite rightly pointed out, is a last resort clause to utilise, but the Jarrad decision was notably on the basis that a decision was made based on the evidence provided to the Bench at that point in time as to what the employees actually did and which award they should more appropriately fall under. There was no evidence put by the CFMEU at that juncture in relation to the work the employees did, the classifications or any other evidence for the Commission to make up its mind.

PN5165

The Commissioner, at first instance, made the determination based on the evidence put by the employer that the nature of what the employer did and the nature of what the employees did in that circumstance was actually covered by the Plumbing Award. There was no issue around the interaction of 4.2 to 4.8 and we say that carried through in terms of the Full Bench decision, which effectively said that the Commissioner at first instance made the right decision in relation to finding of the Plumbing Award. Once that was done, there was no necessity to look at 4.8. This is not an issue about 4.2 creating some sort of problem.

PN5166

Similarly, in relation to the MBA decision I referred to earlier, that, too, is a matter that did not highlight any contradiction between 4.2 and 4.8. 4.2 creates and preserves, for example, in manufacturing, the ability for manufacturing employers to pay and be covered by the Manufacturing Award while undertaking some work off-site, for example, that may fall within classifications that fit within the Building Industry Award. But, if they are covered by the Manufacturing Award, that is the most appropriate award that would apply.

PN5167

Finally, your Honour, the final decision, I think, that the CFMEU have sought to rely upon was obviously the Coffey decision. Similarly to the other matters, they weren't issues on point. To make the amendments being sought, there has to be a problem or some change or some error. None of that has been established by the CFMEU in relation to this matter.

PN5168

There is the overarching principle that was raised at paragraph 164 of the CFMEU's submission that somehow there was this intent by the Commission in terms of the Award Modernisation Bench, that the general intent of the Commission and its predecessors, it says, is to make awards applicable to all award-covered employees in the relevant industry.

PN5169

To put that into context, your Honour, that was the initial statement made by the Award Modernisation Bench in relation to the allocation of priority awards and how they were intending to run. This is not some statement that is set in stone where, clearly, as decisions that were made subsequently, and particularly the evolution of clauses 4.1, 4.2 and 4.8 in the Building and Construction Award evolved to move away from what the union is attempting to claim is this sort of intent of creating an industry award. Clearly the awards have been created on both industry and occupational grounds.

PN5170

We say simply that, firstly, the claim by the CFMEU is to create priority, which was clearly not an intention, and we argue that that has been well and truly argued and determined by the Full Bench. Secondly, we say they have proven there is no issue or error or that there's no reason for this Bench to make any change as suggested.

PN5171

If the Commission has no questions in relation to that, that's all the submissions I seek to make.

PN5172

VICE PRESIDENT HATCHER: Thank you, Ms Paul. Is there anything else that any other employer party wants to say in addition to what Ms Paul has said?

PN5173

MS ADLER: Only to highlight in our written submissions in reply that we deal with this issue at section 3.1 and we address the two cases that have been relied on by the union and, within that written submission, we express serious concern with what is being proposed. We say it would upset the industry coverage of the award and would, in fact, confuse that intended industry coverage by referring to what the employees' work or classification is within clause 4.2. We say it would create more confusion and there has been no evidence provided as to any issue with the way the current provision is operating. Thank you.

PN5174

VICE PRESIDENT HATCHER: Anything in reply?

PN5175

MR CRAWSHAW: No, nothing in reply.

PN5176

VICE PRESIDENT HATCHER: All right. The next issue is "Other MBA Matters". Mr Schmitke? Perhaps we can just deal with all these matters conjointly.

PN5177

MR SCHMITKE: Yes, your Honour. I thought CCF had a matter in relation to coverage?

PN5178

MR BOANZA: Yes, we have.

PN5179

VICE PRESIDENT HATCHER: You do?

PN5180

MR BOANZA: Yes, your Honour, we do, we have an application in relation to the overlap between the Building and Construction Award and the Asphalt Industry Award.

PN5181

VICE PRESIDENT HATCHER: Sorry?

PN5182

MR BOANZA: We have a claim in relation to the overlap between the Building and Construction Award and the Asphalt Award and the coverage of that particular award.

PN5183

VICE PRESIDENT HATCHER: Which submission?

PN5184

MR BOANZA: It is in our submission on 9 December 2016.

PN5185

VICE PRESIDENT HATCHER: Thank you. So you seek the deletion of 4.10(b)(ii) in its entirety?

PN5186

MR BOANZA: Yes, we do, your Honour. The basis of our submission is the fact that we say there is still considerable doubt and misunderstanding among employers who are going to perform asphalt work as to which award is going to cover that particular work and we say that is contrary to the modern award objectives to have this overlap between those two awards.

PN5187

There is a situation in the industry where a company could be having a couple of excavators and doing some earthmoving and also doing some asphalt work to build roads or to do subdivisions and because of the use of excavators and earthmoving equipment, that company would be covered by the Building and Construction Award and would have to pay for the Asphalt Award according to that award. On the other hand, there are other companies that would not necessarily be doing any earthmoving, they would simply be doing the same asphalt work and they will be covered by the Asphalt Award and that award is very different in terms of the wages and conditions that employers have to pay. We say it creates an uneven marketplace and an unfair advantage.

PN5188

VICE PRESIDENT HATCHER: You are saying road-making would no longer be civil construction?

PN5189

MR BOANZA: That is right, or it will be civil construction but it would be covered by the Asphalt Award where it was formerly before the making of this modern award.

PN5190

VICE PRESIDENT HATCHER: So a freeway construction project would not be civil construction any more?

PN5191

MR BOANZA: It would be up to the point where the asphalt needs to be laid. Once the asphalt needs to be laid, it would be laid by companies operating under the Asphalt Award.

PN5192

VICE PRESIDENT HATCHER: Is the expression "road-making" defined?

PN5193

MR BOANZA: It is, your Honour.

PN5194

VICE PRESIDENT HATCHER: It is not in the definitions. Where is it defined?

PN5195

MR BOANZA: Bear with me, your Honour, I'll find it. So if we go to clause 4.10 of the Building and Construction Award and we go to (b)(ii), it says:

PN5196

Road-making and the manufacture or preparation, applying, laying or fixing of bitumen emulsion, asphalt emulsion -

PN5197

et cetera. That is pretty much the same definition that is found in the Asphalt Award.

PN5198

VICE PRESIDENT HATCHER: I was really just concerned with the expression "road-making" at the beginning of that clause. What does that mean?

PN5199

MR BOANZA: Road-making means laying the asphalt on the top.

PN5200

VICE PRESIDENT HATCHER: So that's all, it doesn't require - - -

PN5201

MR BOANZA: It doesn't require earthmoving. So, prior to the making of this modern award, there was the earthmoving side of road-making or construction, which was done under the National Building Award, and then the asphalt work was covered by the Asphalt Award. With the making of the Building and Construction Award, that definition in the Asphalt Award was put into the definition of "civil work" in the Building and Construction Award in clause 4 under "Coverage" and we say that is where the overlap of the two awards does occur and we say that it should be deleted and that work should be returned to the Asphalt Award.

PN5202

DEPUTY PRESIDENT GOSTENCNIK: So does the Asphalt Award apply to the laying or application of asphalt to road-making?

PN5203

MR BOANZA: Yes, it does.

PN5204

DEPUTY PRESIDENT GOSTENCNIK: Because as I read paragraph (b)(ii), there is road making and those other things.

PN5205

MR BOANZA: Yes.

PN5206

DEPUTY PRESIDENT GOSTENCNIK: Road making being something distinct from bitumen emulsion, asphalt emulsion, et cetera. Otherwise the punctuation, the comma and the "and" would be superfluous.

PN5207

MR BOANZA: It's exactly the same definition that is in coverage under 4.2 of the Asphalt Award.

PN5208

DEPUTY PRESIDENT GOSTENCNIK: Do we have that?

PN5209

MR BOANZA: Exactly the same reference in 4.2 of the Asphalt Award which was submitted with the CCF papers, in clause - - -

PN5210

DEPUTY PRESIDENT HAMILTON: At page 60, you quote the definition of "asphalt industry" in the Asphalt Industry Award. Is that what you are referring to?

PN5211

MR BOANZA: That is what I am referring to, your Honour, yes, and it talks about road-making and the manufacture, preparation and laying or fixing of bitumen emulsion, asphalt emulsion, bitumen, et cetera, which is essentially exactly the same as what is contained in the Building and Construction Award at 4.10(b)(ii).

PN5212

DEPUTY PRESIDENT HAMILTON: So it is dealt with under clause 4.8 then of the Construction Award?

PN5213

MR BOANZA: It is 4.10, sorry, of the Building and Construction Award, 4.10(b).

PN5214

DEPUTY PRESIDENT HAMILTON: Sorry, both awards seem to apply and overlap, therefore does 4.8 determine coverage?

PN5215

MR BOANZA: I don't know, your Honour, I don't know. That's what we are trying to clarify.

PN5216

DEPUTY PRESIDENT HAMILTON: Sorry, 4.10(b)(ii), isn't that roughly the same as paragraph (a) at page 60 of the Asphalt Industry Award?

PN5217

MR BOANZA: It is.

PN5218

DEPUTY PRESIDENT HAMILTON: So therefore both awards apply and therefore 4.8 of the Construction Award determines which is the most appropriate award. Is that right?

PN5219

MR BOANZA: Well, I don't know, your Honour, we're not sure and our employers are not sure when they register awards which one they should be applying. That is the point we are making. It is very confusing for employers to be able to work out which award to apply given that they are doing the same work, road-making, asphalt laying and so on.

PN5220

DEPUTY PRESIDENT HAMILTON: Fair enough, you have made your point, thank you.

PN5221

MR BOANZA: Thank you, your Honour.

PN5222

VICE PRESIDENT HATCHER: Thank you. Mr Crawford?

PN5223

MR CRAWFORD: There's no other employers?

PN5224

VICE PRESIDENT HATCHER: I think they have got nothing to add.

PN5225

MR CRAWFORD: Can I please refer the Bench to our reply submissions dated 10 March. We deal with this issue from paragraph 113 to 121.

PN5226

VICE PRESIDENT HATCHER: How do these provisions work, Mr Crawford?

PN5227

MR CRAWFORD: Your Honour, the Award Modernisation Full Bench attempted to explain the interaction in the paragraph I have cited at paragraph 119 of our submission.

PN5228

DEPUTY PRESIDENT HAMILTON: So it's all about asphalt?

PN5229

MR CRAWFORD: Sorry?

PN5230

DEPUTY PRESIDENT HAMILTON: It's all about asphalt?

PN5231

MR CRAWFORD: Or the industry perhaps.

PN5232

DEPUTY PRESIDENT HAMILTON: Yes. That's the difference.

PN5233

VICE PRESIDENT HATCHER: It's what industry the employer falls within.

PN5234

MR CRAWFORD: That appears to be the indication from that paragraph, your Honour.

PN5235

VICE PRESIDENT HATCHER: So you look at 4.1 and you find out whether the employer is located in, relevantly, the civil construction industry and that depends upon the character of the employer?

PN5236

MR CRAWFORD: Yes. I think, for example, if Lendlease, a big civil construction company, was doing the relevant work, they are an employer in the civil construction industry and they would remain under the On-site Award for all of that work and, hence, that work is included within the definition of "civil construction" in the On-site Award. I guess the issue may be different if the employer only performs asphalt work. That is my reading of what the - - -

PN5237

DEPUTY PRESIDENT GOSTENCNIK: Isn't that the reality, that Lendlease would tender for somebody who engages in asphalt work to lay the asphalt? Lendlease itself wouldn't lay the asphalt.

PN5238

MR CRAWFORD: That may be correct, your Honour, but my recollection in reading the award modernisation documents is that they did consider that and were obviously under the impression, for whatever reason, that there were civil construction companies that did perform that work themselves, and there were a couple of additional points that might reiterate that.

PN5239

Importantly, the Civil Contractors Federation say that the creation of the On-site Award brought asphalt work into this industry for the first time. Now, that is not right at all. The old AWU Construction and Maintenance Award 2002 also covered road-making. It had specific classifications in that award for bitumen sprayer, a CW1, CW3 and CW4 level, so it's not correct that the On-site Award brought asphalt road-making work within the industry for the first time; it has always been considered part of the civil construction industry, so that is simply not correct.

PN5240

An initial point I was intending to make was there is no evidence of any actual problems here. It is the submission from the Civil Contractors Federation that there's all this confusion about which award applies. There's no actual evidence of any confusion, there's no evidence from any employers of any issues. At paragraph 121 of our reply submission, we indicate that pretty much the same claim arose before Watson SDP in the 2012 Transitional Review and he - you will see I have quoted from his decision in our reply submission. He stated:

PN5241

The distinction between the two modern awards in respect of roadmaking is clear from the decision of the Award Modernisation Full Bench.

PN5242

DEPUTY PRESIDENT GOSTENCNIK: Mr Crawford, if one looks at the definition of "asphalt industry", for the purposes of this clause, "asphalt industry" means road-making and also means the manufacture, et cetera. When Lendlease wins a contract to build a road, it is engaged in road-making; yes?

PN5243

MR CRAWFORD: Yes.

PN5244

DEPUTY PRESIDENT GOSTENCNIK: But it is not covered by the Asphalt Industry Award.

PN5245

MR CRAWFORD: If employees of Lendlease are performing work within the classifications in the On-site Award, which includes bitumen sprayer, they are covered by the On-site Award.

PN5246

DEPUTY PRESIDENT GOSTENCNIK: That is because Lendlease is involved in civil construction work.

PN5247

MR CRAWFORD: Correct.

PN5248

DEPUTY PRESIDENT GOSTENCNIK: Which is defined to include road-making.

PN5249

MR CRAWFORD: Yes.

PN5250

DEPUTY PRESIDENT GOSTENCNIK: And the definition of the Asphalt Industry Award, the asphalt industry means road-making.

PN5251

MR CRAWFORD: There is no doubt the definition is the same in both awards. There is also no doubt that was quite deliberate and that the Award Modernisation Full Bench did turn their mind to the issue and, in their minds, it seems they thought they were clearly outlining how the distinction is meant to work in that paragraph I have cited.

PN5252

VICE PRESIDENT HATCHER: If you fall within the definition that is contained in 4.10(b)(ii), that definition is a definition of asphalt industry which brings you under the Asphalt Industry Award; is that right?

PN5253

MR CRAWFORD: The definition is the same, yes.

PN5254

VICE PRESIDENT HATCHER: So if I'm a business that does that function, I'm in the asphalt industry and I'm covered by the Asphalt Award; is that right?

PN5255

MR CRAWFORD: You can fall within the coverage of both awards. That's why you have to - - -

PN5256

VICE PRESIDENT HATCHER: I am just trying to understand this. It seems to me that the definition under the Asphalt Industry Award means that an employer who does those things is in the asphalt industry and therefore covered by the Asphalt Industry Award, but the same definition here means that you are in the civil construction industry doing the very same function and therefore you are covered by this award as well.

PN5257

MR CRAWFORD: Yes, but aren't there - yes.

PN5258

DEPUTY PRESIDENT GOSTENCNIK: And then you go to 4.8 to determine the most appropriate classification?

PN5259

MR CRAWFORD: Correct.

PN5260

DEPUTY PRESIDENT GOSTENCNIK: Yes, I understand that.

PN5261

DEPUTY PRESIDENT HAMILTON: That was a question I asked CCF and they weren't sure, but you are sure that that's how it works? There will be dual coverage and, since there's dual coverage, you then go to 4.8; is that correct?

PN5262

MR CRAWFORD: Yes.

PN5263

DEPUTY PRESIDENT HAMILTON: So they are uncertain about that and you are not; all right?

PN5264

VICE PRESIDENT HATCHER: But the passage you quote in 119 of your submissions doesn't suggest the Award Modernisation Bench, unless there's more context, thought that this was an issue to be resolved by clause 4.8, does it?

PN5265

MR CRAWFORD: I agree, the indication from - - -

PN5266

VICE PRESIDENT HATCHER: For example, if you fell within 4.10(b)(i) and, in addition to that, as part of carrying out civil mechanical engineering projects, you did some road-making, I can understand the point, but where simply doing asphalt making brings you within the civil construction industry, then you are left with the unavoidable problem that you are under two awards.

PN5267

MR CRAWFORD: There is that provision regarding overlap that can assist.

PN5268

VICE PRESIDENT HATCHER: Again, that's meant to be the last resort, not the first resort. This makes that the first resort.

PN5269

MR CRAWFORD: There are also, as your Honour would be aware, historical cases that go to how you categorise the industry.

PN5270

DEPUTY PRESIDENT HAMILTON: Is it the case in applying 4.8, you then apply the Award Modernisation Full Bench decision at paragraph 119? Is that how it works? Namely, you look at the industry of the employer?

PN5271

DEPUTY PRESIDENT GOSTENCNIK: The difficulty with that paragraph you have quoted is that it suggests that road-making is an element of the asphalt industry whereas the definition "road-making" by itself is in the asphalt industry. That's the definition of "asphalt industry":

PN5272

For the purposes of this award "asphalt industry" means road-making.

PN5273

It also means a number of other things.

PN5274

MR CRAWFORD: Yes, I don't think there is any doubt that road-making can fall within the industry definitions of both awards, the Asphalt Award and the On-site Award. The wording is identical, so that must be the case.

PN5275

VICE PRESIDENT HATCHER: Road-making is almost always part of a civil mechanical engineering project, isn't it?

PN5276

MR CRAWFORD: Correct, because it's not just asphalt work; obviously you've got to do clearing work and often concrete work.

PN5277

VICE PRESIDENT HATCHER: What asphalt work is not done within the context of a civil mechanical engineering project, except maybe doing a driveway?

PN5278

MR CRAWFORD: Yes, I guess it could be. It could even be school playgrounds and, plus, there's a manufacture element as well. I think the Asphalt Industry Award can cover the manufacture of - - -

PN5279

VICE PRESIDENT HATCHER: So does this.

PN5280

MR CRAWFORD: The On-site Award as well.

PN5281

DEPUTY PRESIDENT HAMILTON: It's the same.

PN5282

VICE PRESIDENT HATCHER: If I manufacture asphalt, I am in the civil construction industry.

PN5283

DEPUTY PRESIDENT HAMILTON: CCF has proposed a solution to dual coverage, namely, removing the On-site Award coverage. Is there a problem with doing that?

PN5284

MR CRAWFORD: Yes.

PN5285

DEPUTY PRESIDENT HAMILTON: What is the problem?

PN5286

MR CRAWFORD: The On-site Award was always intended to cover road-making, the predecessor AWU award covered road-making, and if there's an employer in the civil construction industry performing road-making work, the clear intent is for them to be covered by the On-site Award.

PN5287

VICE PRESIDENT HATCHER: Is that what actually happens?

PN5288

MR CRAWFORD: Yes, our understanding is it is, and there are important practical consequences here because if you look at the CCF's submission, they go through a range of conditions in the Asphalt Award and the On-site Award and generally the conditions in the On-site Award are far superior, so a simple change will - so a change here can have quite dramatic consequences.

PN5289

DEPUTY PRESIDENT HAMILTON: What is your solution to the problem of dual coverage, if it is a problem - if it is a problem.

PN5290

MR CRAWFORD: Mr Crawshaw said go the other way.

PN5291

MR CRAWSHAW: That's what I'm going to submit, having heard what your Honour says about clause 4.8 being the last resort.

PN5292

VICE PRESIDENT HATCHER: For example, who owns that asphalt plant at Rosehill these days?

PN5293

MR CRAWFORD: I'm not sure, your Honour, if it's Boral.

PN5294

VICE PRESIDENT HATCHER: It's Boral or CSR, something like that, whatever they're called, but let's assume they have the contract to supply asphalt to the Westconnex, the widening project for the employer, they manufacture it and they are supplying the asphalt for it, a civil construction project, which award applies to the manufacture?

PN5295

MR CRAWFORD: What the facility - if it's not a construction site, I would have previously said that's probably not under the On-site Award, although I do notice the definition does include the manufacture of asphalt in the On-site Award.

PN5296

VICE PRESIDENT HATCHER: That's right, so if they are manufacturing it at Rosehill and they then cart it just up the road to the M4, is the manufacturing process, the actual manufacturing plant, then covered by the On-site Award?

PN5297

MR CRAWFORD: I would say "no", that would be the Asphalt Award.

PN5298

VICE PRESIDENT HATCHER: Why is that?

PN5299

MR CRAWFORD: Because it's not a construction site and the On-site Award is strictly confined - I have the clause in front of me - clause 4.9 of the On-site Award confines its coverage at all times to on-site work.

PN5300

VICE PRESIDENT HATCHER: So manufacturing could only be - I've never heard of one - a theoretical on-site asphalt manufacturing plant? Has there ever been such a thing?

PN5301

MR CRAWFORD: I don't know.

PN5302

DEPUTY PRESIDENT HAMILTON: So your solution is to remove road-making from the Asphalt Award? Is that what you said or was that Mr Crawshaw?

PN5303

MR CRAWSHAW: That's my idea.

PN5304

DEPUTY PRESIDENT HAMILTON: That's the CFMEU - sorry. What is your solution?

PN5305

MR CRAWFORD: Bear in mind it's not my case - I'm not asking for a variation - my case was there's no evidence presented of any practical problems. The AWU has not experienced any practical problems of - - -

PN5306

DEPUTY PRESIDENT HAMILTON: So you are happy to use clause 4.8 to resolve the dual coverage?

PN5307

MR CRAWFORD: Well, yes, but also other aspects like, you know, is the work done on site, what is the industry of the employer, et cetera. We fundamentally say if it's an employer in the civil construction industry like Lendlease doing the work themselves, it was always intended that work would be under the On-site Award.

PN5308

VICE PRESIDENT HATCHER: Are there any practical problems from your point of view?

PN5309

MR CRAWFORD: No, none whatsoever.

PN5310

VICE PRESIDENT HATCHER: All right. Mr Crawshaw?

PN5311

MR CRAWSHAW: This, with respect, shows the problem with 4.2. The HIA made an application before Watson SDP which was refused. Now we've got another application in relation to the asphalt industry. Very soon you'll have no On-site Award left because it will all be excluded by - - -

PN5312

DEPUTY PRESIDENT HAMILTON: Very hard to do road-making other than on-site.

PN5313

MR CRAWSHAW: I'm not sure about that.

PN5314

DEPUTY PRESIDENT HAMILTON: You can pre-fab the bridge work, you just have to put it together on site.

PN5315

MR CRAWSHAW: That's why I facetiously said - well, perhaps I will come first to your question regarding subclause 4.8. Obviously it must apply in this situation and it is a problem. Of course, as Mr Crawford said, there's no evidence of any problems.

PN5316

VICE PRESIDENT HATCHER: Road-making, interpreted narrowly, simply means laying the surface of the road, it's not meant to convey - - -

PN5317

MR CRAWSHAW: No, we would say that it includes preparing the road through earthworks and the like on civil construction sites.

PN5318

VICE PRESIDENT HATCHER: If you are building a freeway, it just get in (b)(i) as a civil mechanical engineering project, doesn't it?

PN5319

MR CRAWSHAW: Well, you probably don't need it from that point of view.

PN5320

DEPUTY PRESIDENT HAMILTON: Do you agree with the description of clause 4.8 as a last resort? Is that consistent with your understanding?

PN5321

MR CRAWSHAW: No, as I put in relation to our variation, we don't see it as a last resort but the normal, sensible method of resolving a situation where two awards apply, which is inevitable.

PN5322

DEPUTY PRESIDENT HAMILTON: Is it used across the award system or - - -

PN5323

MR CRAWSHAW: Yes, it is. Just coming back to the question of whether there's any evidence of any problems, no, there's no evidence of any problems; in particular, there's no evidence of any demarcation disputes, which is what is alleged in the CCF's submission, and the CCF's submission firstly says that it wasn't covered by the National Building Trades Award - National Building and Construction Award - but that overlooks, as Mr Crawford said, that it was covered by the Civil Construction Award pre modernisation. So, these higher rates of all those applied, the way the CCF submission suggests is that this has somehow led to higher rates applying, but the higher rates have always applied pre modernisation and post modernisation and, as my learned friend Mr Crawford says, what would be the result of this application would be a diminution in rates for those working on-site.

PN5324

If, contrary to what we suggested in relation to our coverage and clause 4.8 is a sensible way of dealing with things and there's no evidence it hasn't worked here, the Bench is going to take an attitude, "Well, let's be clear cut about this, let's make one award apply or another", that's why - - -

PN5325

VICE PRESIDENT HATCHER: What if (b)(ii) was modified to say that the work described had to be performed on a construction site?

PN5326

MR CRAWSHAW: That's already the case because of subclause 4.9.

PN5327

VICE PRESIDENT HATCHER: Yes.

PN5328

MR CRAWSHAW: So there would be no problem in making it clearer, I suppose, but it seems to be otiose.

PN5329

VICE PRESIDENT HATCHER: Perhaps I put that badly. What if the problem was resolved by modifying the Asphalt Award to say that it applied to all asphalt functions except when performed on a construction site?

PN5330

MR CRAWSHAW: If you are going to take the exclusionary approach, I would suggest that would be the best approach and it's more in line with what the Full Bench said in that quote which is at paragraph 119 of the AWU's submissions. The clear intent of the Full Bench was if it's on-site, it's meant to be covered by the On-site Award, and I think someone said to Mr Crawford - I can't remember which Member of the Bench - "That doesn't seem to be reflected in the award coverage because it's been left, in effect, legally speaking, to subclause 4.8" - and when I say subclause 4.8, there's an equivalent provision in the Asphalt Award which is subclause 4.7 - but if those overlapping coverages of clauses don't find favour with this Bench, and I hear some sentiment to that effect, well, if there's an award to be given priority or primacy, it should be the On-site Award.

PN5331

They are our submissions.

PN5332

VICE PRESIDENT HATCHER: Anything in reply, Mr Boanza?

PN5333

MR BOANZA: Yes, very quickly, your Honour, thank you. We have just identified how difficult it is for an employer reading the awards to work out what to do.

PN5334

VICE PRESIDENT HATCHER: Can I advance the same suggestion to you: would it be resolved if the Construction Award applies where those functions are performed on a construction site and the Construction Award does not apply and the Asphalt Award applies where they are not performed on a construction site? Would that clear it up?

PN5335

MR BOANZA: I will have to have a think about that. The difficulty that we have, your Honour, is that in going to the Lendlease example, if I can go to that, in reality what happens is that a civil contractor who operates machinery as in excavators usually misses out on the asphalt work because there would be another company which only does asphalting work who will tender under the Asphalt Award for that work and our member will miss out because under the Building and Construction Award, he has no chance of competing.

PN5336

DEPUTY PRESIDENT GOSTENCNIK: But that work would be performed on site.

PN5337

MR BOANZA: It would be performed on site.

PN5338

DEPUTY PRESIDENT GOSTENCNIK: In which case, under the proposal, the On-site Construction Award would apply.

PN5339

MR BOANZA: But that, unfortunately, is not how it works out in reality. No one prints those distinctions because they are not - - -

PN5340

DEPUTY PRESIDENT HAMILTON: No, but if the award was varied to provide that, wouldn't that protect you?

PN5341

MR BOANZA: That would protect them to some extent, yes, absolutely, and if I can just - and that is really the basis or the reason for our claim. We say that this situation has created an uneven playing field when companies are competing for particular work. We have put a proposed draft determination because, frankly, we thought that would be less traumatic to change one clause in the Building and Construction Award than it would be to eliminate the entire Asphalt Award, but if other solutions are put forward by the parties that are different to our draft submission, we are certainly willing to look at that.

PN5342

VICE PRESIDENT HATCHER: Thank you.

PN5343

MR BOANZA: Thank you.

PN5344

VICE PRESIDENT HATCHER: Mr Schmitke?

PN5345

MS PAUL: Your Honour, if I may just make some comments in relation to the proposition put forward about adding the words "on-site" to subclause (2). We would have some concern in relation to that, and I am just checking - - -

PN5346

VICE PRESIDENT HATCHER: That part of it is already done by 4.9, isn't it?

PN5347

MS PAUL: Sorry, your Honour, it's more on the basis of the suggestion that clarifying that in (b)(ii) might somehow inadvertently create a situation where an employer who is covered ordinarily by a different award suddenly gets captured for a small component of that work when undertaking it on an on-site basis, and whilst I'm speaking, your Honour, I'm having a look and the Asphalt is not one of the exclusion clauses in 4.2, but we wouldn't want to somehow see that principle applied in relation to, say, manufacturing, for example, and we say - - -

PN5348

VICE PRESIDENT HATCHER: Can I say this, Ms Paul, you can assume that if the Full Bench prefers some variation which is not one of the ones actually advanced by the parties, it will give the parties a further opportunity to be heard about that, rather than deal with it hypothetically.

PN5349

MS PAUL: Thank you, your Honour.

PN5350

VICE PRESIDENT HATCHER: Obviously, if that proposal was advanced, there would then need to be some notice given to the parties which consider themselves bound by the Asphalt Award.

PN5351

MS PAUL: Yes, your Honour, that was our concern. Thank you, your Honour.

PN5352

VICE PRESIDENT HATCHER: Thank you. Mr Schmitke?

PN5353

MR SCHMITKE: Thank you, your Honour. I note earlier you made reference to moving on to item 6, but I should just bring the Commission's attention to a claim in this related area as well and that is in relation to the Joinery and Building Trades Award and it seeks to deal with the definitional matter and it is related but unrelated to the other issues that have been just ventilated.

PN5354

Essentially, the determination that we seek is at item 2 of our joinery-related determinations filed last Friday and it's covered in pages 26 to 27 of our submission. Essentially - and I will get straight to the chase in terms of the omission we are seeking to fix - there is a problem in terms of the people covered by the Joinery Award. They are performing work in the joinery shop, that is their principal place of employment, that is the principal work they are performing, they then go on-site to install the work that they have done off-site and there's an overlap or a potential problem or uncertainty with respect to which award is applicable.

PN5355

Our solution is to replace or alter clause 3.1 and the definition of "joinery work" in the Joinery Award to make it clear that joinery work includes the on-site installation, so it's not any actual work being performed other than the installation.

PN5356

DEPUTY PRESIDENT GOSTENCNIK: Why is that necessary in light of 4.2 of the On-site Construction Award?

PN5357

MR SCHMITKE: Because 4.1 of the On-site Award talks about the classifications and the types of - - -

PN5358

DEPUTY PRESIDENT GOSTENCNIK: I am talking about 4.2.

PN5359

MR SCHMITKE: That is the case. This is a clarification. So 4.2 does apply, in fact - - -

PN5360

DEPUTY PRESIDENT GOSTENCNIK: Clarification on an absolute exclusion?

PN5361

MR SCHMITKE: It's not an absolute exclusion, no, certainly not.

PN5362

DEPUTY PRESIDENT GOSTENCNIK: Why not?

PN5363

MR SCHMITKE: At the moment, there is essentially - - -

PN5364

DEPUTY PRESIDENT GOSTENCNIK: If that employer who sends the employee out is covered by the Joinery Award, how does the On-site Construction Award apply to that employer in the circumstance you have indicated?

PN5365

MR SCHMITKE: In the circumstances, it is unclear and it is unclear in terms to the sector, so again this is to - - -

PN5366

VICE PRESIDENT HATCHER: Why is it unclear?

PN5367

MR SCHMITKE: Because of the question of what is joinery work, the definition of what is joinery work and where it's performed.

PN5368

VICE PRESIDENT HATCHER: Does the work you have described fall within the coverage clause of the Joinery and Building Trades Award?

PN5369

MR SCHMITKE: It does.

PN5370

VICE PRESIDENT HATCHER: Then the exclusion of 4.2(b) then must apply.

PN5371

MR SCHMITKE: I agree.

PN5372

VICE PRESIDENT HATCHER: So what is the uncertainty?

PN5373

MR SCHMITKE: This is a clarification, this is, once again - and Mr Glover made reference to this in his evidence - there is uncertainty, he gets a lot of enquiries about this question - and we say that the best way to solve that confusion is to clarify the definition of joinery work. So, it doesn't extend, it doesn't exclude, it just simply clarifies it.

PN5374

VICE PRESIDENT HATCHER: I just notice in the Issues document there was a submission by T Walsh about schedule - - -

PN5375

MR CRAWSHAW: Sorry, is this dealing with this topic?

PN5376

VICE PRESIDENT HATCHER: It is dealing with the issue of coverage but - - -

PN5377

MR CRAWSHAW: Okay. I haven't finished. Can I deal with this issue before - - -

PN5378

VICE PRESIDENT HATCHER: Yes. Do you say there is any uncertainty or not?

PN5379

MR CRAWSHAW: We say there is no evidence of any uncertainty. Indeed, the only evidence on this issue - - -

PN5380

VICE PRESIDENT HATCHER: It is not a matter of evidence, it is whether there is any textual uncertainty.

PN5381

MR CRAWSHAW: No, because if you go to - well, Mr Schmitke agreed that there wasn't any uncertainty at one point, but if you go to - so there's the exclusion in subclause 4.2 of the Construction Award, so you've then got to go to the coverage clause of the Joinery and Building Trades Award and, in particular - and Mr Maxwell took Mr Glover to this - subclause 4.8 refers to the following industries, including joinery work, and the definition of "joinery work" in the definitions clause, clause 3.3, has a qualification to - - -

PN5382

VICE PRESIDENT HATCHER: Joinery work, by definition, is off-site.

PN5383

MR CRAWSHAW: Yes.

PN5384

VICE PRESIDENT HATCHER: So if you do joinery work in a joinery shop then, for some reason, you have to go on site, you are no longer performing joinery work?

PN5385

MR CRAWSHAW: Yes.

PN5386

VICE PRESIDENT HATCHER: With the result - what - that you fall within the On-site Award?

PN5387

MR CRAWSHAW: Yes.

PN5388

VICE PRESIDENT HATCHER: I see.

PN5389

MR CRAWSHAW: And 4.1(a) says that an employer who is outside the scope of clause 4.8(a), which includes joinery work, unless such employer employs an employee covered by clause 4.8(b), the employer is not covered by another modern award containing a classification which is more appropriate. So 4.8(b) could have some role to play theoretically, but the evidence of Mr Glover, which I was going to take you to, was that it is not uncommon, that it is common for different parts of the workforce to work on-site from those off-site, so the only question that arises is, as Mr Glover says at paragraph 48, different entitlements applying depending on whether an employee is employed on or off site. He doesn't suggest any problem akin to that suggested by the MBA's submission at paragraph - - -

PN5390

DEPUTY PRESIDENT HAMILTON: Your submission is there is no ambiguity and no problem.

PN5391

MR CRAWSHAW: No problem, but, more than that, if you introduce their definition, which, in effect, makes joinery work on-site work, it would make its way into 4.8(a) as joinery work and wouldn't be excluded or would be included in 4.1(a), which means it would, in turn, be excluded from the On-site Construction Award by virtue of that subclause 4.2 that we have asked be amended.

PN5392

They are our submissions and Mr Maxwell is going to do the rest of our submissions, so could I be given leave to leave you all to it?

PN5393

VICE PRESIDENT HATCHER: Are you coming back tomorrow?

PN5394

MR CRAWSHAW: I wasn't intending to, no.

PN5395

VICE PRESIDENT HATCHER: All right. Yes, you have leave to go, Mr Crawshaw.

PN5396

MR CRAWSHAW: Thank you, your Honour.

PN5397

VICE PRESIDENT HATCHER: Mr Nguyen, you have leave to return. In reply, Mr Schmitke?

PN5398

MR SCHMITKE: Your Honour, essentially the cross-examination that the union made of Mr Glover, and I won't go into detail but I'll just refer you to the transcript of that section at PN2499 and PN2515. If there is no problem, and we are simply saying it is confusing and complex, you have an experienced advocate talking to Mr Glover, experienced in the industry, to take him to 4.1, 4.8, 4.8(a), 4.1(a), 4.1, 4.8(a), 4.8(b) in order to resolve the issue. So, if there's no issue, it's very complicated.

PN5399

VICE PRESIDENT HATCHER: I am not sure it is confusing on the text of it. It seems to me your variation just wants to change the result.

PN5400

MR SCHMITKE: That is not the intent of the variation. The variation is seeking to make it very clear what the existing arrangements are.

PN5401

VICE PRESIDENT HATCHER: Well, joinery work does not apply to on-site work.

PN5402

MR SCHMITKE: It does, or it can be read to be that way by virtue of the existing definition because if it is only work that is performed in a joinery shop, that's the confusion. So, you might build a particular type of product off-site and then you go on-site simply to install it and then get off-site again, and that's the confusion, so by saying it includes on-site installation of the work performed in a joinery shop, that's the definitional change that we seek to apply and that would resolve that problem.

PN5403

VICE PRESIDENT HATCHER: If the principal purpose of employment is to work in a joinery shop, then you would be under the Joinery Award.

PN5404

MR SCHMITKE: Correct, but what I am saying is that there is some confusion in terms of when people do go on-site.

PN5405

VICE PRESIDENT HATCHER: If your principal work is to do joinery work on-site, you are covered by the Construction Award.

PN5406

MR SCHMITKE: Correct, but joinery work is defined as work in a joinery shop.

PN5407

VICE PRESIDENT HATCHER: Yes.

PN5408

MR SCHMITKE: Yes.

PN5409

VICE PRESIDENT HATCHER: So what's the problem?

PN5410

MR SCHMITKE: The problem is as soon as you install the work you performed in a joinery shop on-site, there is a question and confusion insofar as which award would apply.

PN5411

VICE PRESIDENT HATCHER: There are long-established principles which deal with these situations, that is, that an award usually only applies to an employee - only one award applies for an employee's employment and if they do a mixture of work across two awards, you apply the principal purpose test.

PN5412

MR SCHMITKE: Yes, I accept that. We are not seeking to undermine or disturb any of the existing arrangements, we just simply want to make it clear that definition of joinery work allows employees to perform that work off-site.

PN5413

DEPUTY PRESIDENT HAMILTON: I think we are going around in circles here.

PN5414

VICE PRESIDENT HATCHER: That's right. You have made your point. All right, random issues, Mr Schmitke?

PN5415

MR SCHMITKE: Random issues - - -

PN5416

MR MAXWELL: Sorry, your Honour, I don't wish to delay the proceedings, but I think your Honour did refer that there was another submission in this section, Mr Walsh's submission.

PN5417

VICE PRESIDENT HATCHER: Mr Walsh, yes. Does anybody wish to be heard in support of that submission? No? In that case, there is no need for reply submissions, apart from what has been put in writing. Mr Schmitke?

PN5418

MR SCHMITKE: Thank you, your Honour, I will be very quick here. The rest of the matters that I am going to address in this section are essentially clarification matters.

PN5419

The first matter that I would like to deal with involves a clause regarding the calculation of a mobile crane allowance. That is dealt with in paragraphs 14 to 15 of our submissions. The nature of the concern that we raise is with respect to the particular rate that is referenced with respect to the calculation of the particular allowance and the formula that is applied.

PN5420

This has been a matter that we have previously raised before the Commission in front of Watson SDP. The decision reference and the comments of his Honour are contained at item 8.3 on page 14. Essentially, he decided that there was a way to calculate the rate and that was with reference to the hourly rate in accordance with clause 13.2. The change that we seek is simply to insert his Honour's clarification into the award so that it is abundantly clear to the sector and that there is no confusion.

PN5421

VICE PRESIDENT HATCHER: All right. Perhaps I will go straight to Mr Maxwell. Is this opposed, is it?

PN5422

MR MAXWELL: It is opposed because we say it is not necessary. Also, if you look - - -

PN5423

VICE PRESIDENT HATCHER: It may not be necessary but does it change the effect of the award?

PN5424

MR MAXWELL: It does because clause 13.2 doesn't deal with the wage rates for the mobile crane drivers. Clause 13.2, in my version of the award, I think, relates to part-time work.

PN5425

VICE PRESIDENT HATCHER: Is that the right reference, Mr Schmitke?

PN5426

MR SCHMITKE: I am quoting from his Honour's decision which specifies that particular outcome. The reason for the reference to calculating part-time rate is simply because that's a mechanism within the award which is the best one to point to to determine how a particular rate might be calculated in the absence of any other guidance. So, essentially, the way you calculate a part-time rate for classifications that might ordinarily be defined weekly or allowances that might be applied weekly is you refer it back to that provision. I think he simply says that's the same way in which you calculate this particular allowance.

PN5427

VICE PRESIDENT HATCHER: I just don't see the connection. Can you explain that?

PN5428

DEPUTY PRESIDENT GOSTENCNIK: "Standard rate" is defined, is it not, in the award?

PN5429

MR SCHMITKE: Sorry, your Honour?

PN5430

DEPUTY PRESIDENT GOSTENCNIK: The standard rate is defined in the award. It means either the weekly or hourly rate as stated for the level 3, blah, blah, blah.

PN5431

MR SCHMITKE: Yes, that is the case, but the mischief, I suppose, was that the particular provision was, in fact, originally enlivened when we sought to vary clause 19.5 to work out what the standard hourly rate might be for this particular provision, and the result of that was that his Honour said, "No, no, no, it's the weekly rate", so in order to take the weekly rate to establish what it would be for an hourly purpose, you should have regard to that particular provision, the hourly rate in accordance with clause 13.2.

PN5432

DEPUTY PRESIDENT HAMILTON: If it's already decided, why do we need to vary the award?

PN5433

MR SCHMITKE: Essentially, it was an issue which we advanced in front of Watson SDP to say that there was some confusion about that and that it required resolution. Whilst he resolved the matter, it doesn't necessarily translate to the award.

PN5434

VICE PRESIDENT HATCHER: So is 19.5 an hourly or a weekly allowance?

PN5435

MR SCHMITKE: It's a weekly. Well, it essentially talks about 2.4 per cent of the weekly standard rate.

PN5436

DEPUTY PRESIDENT HAMILTON: And the weekly standard rate, is that rate described for the week for a level 3 employee in 19.1?

PN5437

MR SCHMITKE: Yes, it is.

PN5438

MR MAXWELL: Your Honour, perhaps if I may assist the Commission on this point. We oppose it, but due to the time constraints of writing submissions, but a very simple solution to this would be to add that the mobile crane adjustment formula - - -

PN5439

VICE PRESIDENT HATCHER: What are we solving?

PN5440

MR MAXWELL: The perceived problem of Mr Schmitke, and that is how the mobile crane adjustment allowance should be put into the hourly rate. If you look at - the mobile crane adjustment formula only applies to crane drivers and their operators that are on a weekly hire, so if the - - -

PN5441

VICE PRESIDENT HATCHER: But does it result in an hourly incremental allowance or a weekly allowance?

PN5442

MR MAXWELL: It's a weekly - it's a payment of a weekly amount. So, if that weekly amount in 19.5 was referenced in clause 19.3(b), so it's then included in the calculation of the hourly rate based on adding all the weekly amounts and then dividing by 38, that would be a cleaner way of addressing the concerns of the MBA.

PN5443

MR SCHMITKE: I understand that that was a position that Mr Maxwell advanced in the context of this earlier matter before His Honour Watson DP, but I think the other thing that is worth bearing in mind is that this particular formula refers to things that are going to change in a practical sense. So, it essentially says that for each additional 40 tonnes over a maximum lifting capacity of 100 tonnes, an amount of 2.4 per cent of the standard weekly rate must be added to the base rate. You might have that going up 40 times over the base rate on one day, it might be 80 tonnes the next day, so, there's a necessity to look at it from an hourly perspective.

PN5444

VICE PRESIDENT HATCHER: Well, you divide it by 38, don't you?

PN5445

MR SCHMITKE: That is exactly what we would like, which is to clarify that the standard rate or the rate is divided by 38 and multiplied by the number of actual - - -

PN5446

DEPUTY PRESIDENT GOSTENCNIK: Doesn't that happen at the end? You add it first, it becomes then the adjusted rate in 19.3(b), you add up all those amounts and then you divide it to get the hourly rate. Isn't that the way it's supposed to work?

PN5447

MR SCHMITKE: Yes.

PN5448

DEPUTY PRESIDENT GOSTENCNIK: So?

PN5449

MR SCHMITKE: We simply just want the clarification by adding into that particular clause how to calculate an hourly rate and we do so with reference to the findings of Watson SDP.

PN5450

DEPUTY PRESIDENT HAMILTON: Why would you use 13.2 when 19.3(b) refers to how the hourly rate will be calculated? Surely that's the cleaner way to do it.

PN5451

MR SCHMITKE: It might be the cleaner way. However, there is always a nuance, and we are going to get to, I think, 19.3(a) and 19.3(b) later on in these proceedings, but suffice to say that, to the extent possible, we think it is cleaner to refer back to the method used to calculate a part-time rate.

PN5452

DEPUTY PRESIDENT HAMILTON: Well, (b) doesn't have a method, 13.2 does.

PN5453

MR SCHMITKE: Yes.

PN5454

DEPUTY PRESIDENT HAMILTON: How else could you do (b) but divide by 38?

PN5455

MR SCHMITKE: Well - - -

PN5456

DEPUTY PRESIDENT HAMILTON: How else could you?

PN5457

MR SCHMITKE: There is no other way to do that, but there is contention in the sector about - - -

PN5458

DEPUTY PRESIDENT GOSTENCNIK: Helpfully it tells you that at the bottom: "And divide the total by 38."

PN5459

MR SCHMITKE: I am sorry, your Honour?

PN5460

DEPUTY PRESIDENT GOSTENCNIK: Helpfully, 19.3(b) tells you at the bottom of it - - -

PN5461

MR SCHMITKE: Yes, your Honour.

PN5462

DEPUTY PRESIDENT HAMILTON: Doesn't that meet your concerns?

PN5463

MR SCHMITKE: Well, there's always this issue we have in terms of daily hire, weekly hire and the calculation of the rate of pay for the purpose of base rate of pay for the purposes of that particular classification, or not that classification but its impact and interaction with the casual provisions and the base hourly rate for casuals. I would suggest to you that there is a benefit in referring back to the part-time provision, as we would seek, rather than any other provision.

PN5464

DEPUTY PRESIDENT GOSTENCNIK: But wouldn't it work this way, that on a given day - put aside whether the person is casual or daily hire - if they are operating a mobile crane and on that day the (indistinct) exceeds the provision, then the weekly rate for that classification with the standard rate, an amount of 2.4 per cent is added to that, that becomes the minimum weekly wage for the purposes of 19.1, you add up all the other things that would be payable on that day to that person and then you divide the figure by 38 and that would give you the hourly rate for that day. Granted the hourly rate for the next day might be different.

PN5465

MR SCHMITKE: Your Honour, I take your point. I suppose there is always, as I said, contention and there's a particular contention with respect to which rates are all purpose and so on and so forth, so that is why we would seek it just be referred back to the part-time provision.

PN5466

DEPUTY PRESIDENT HAMILTON: I think you have made your point and I think we are going in circles again.

PN5467

MR SCHMITKE: The next item we seek to address is with respect to the piece rate provisions in the On-site Award. This is a very simple matter. The piece rates provision contains, at the moment, a provision that requires that if you are entering into a piece rates arrangement, it needs to be done so without coercion or duress. This is outlined on page 73 of our 2 December submission. We just simply seek that those words be removed. We say they are unnecessary in the context of this particular proceeding and, in the context of making the award simpler, we would simply say it is unnecessary and certainly it doesn't add, it reflects common law and it's a complete replication of what the common law provides and we would just seek it be deleted.

PN5468

VICE PRESIDENT HATCHER: All right.

PN5469

MR SCHMITKE: Then if I could move on to the next item, which is in relation to shift work, this is a particularly, again, difficult sort of matter to take the Commission through, but I will endeavour to do so as succinctly as I can. Essentially what we say is that - and this is attached to our submission as attachment B, attached to the submission of 2 December.

PN5470

VICE PRESIDENT HATCHER: Which clause in the award?

PN5471

DEPUTY PRESIDENT HAMILTON: 34.1(a).

PN5472

VICE PRESIDENT HATCHER: Thank you.

PN5473

MR SCHMITKE: There is a history in terms of the way in which shift work has been performed in the sector. It is long and torturous. Suffice to say that we would say as a result of the award modernisation process, there was a gap in terms of the shifts created and this is because the shifts in the past were defined with reference to when they finished rather than when they started. That was addressed and, as a result, we say it left a gap in between a shift that would now commence between 11 pm and 4.30 am. We therefore seek to insert into the award a definition of early morning shifts provides a 50 per cent loading, and that is consistent with how it used to be under the previous award which did cover this particular period of time. It is simply a gap that exists.

PN5474

Watson SDP, who had heard a dispute or had heard an application to fill this gap, which was in matter number [2013] FWC 4576, he effectively decided that whilst there might be a gap, there was no evidence to say that the work was actually being performed or commencing at that time. What we would say is that the award previously, prior to it being modernised, contained a shift that covered that period, and we are not seeking to do anything other than reinsert that shift.

PN5475

VICE PRESIDENT HATCHER: What is this decision you are referring to?

PN5476

MR SCHMITKE: Sorry, your Honour, it is [2013] FWC 4576.

PN5477

VICE PRESIDENT HATCHER: It is a decision of the Senior Deputy President and you just want to do it again?

PN5478

MR SCHMITKE: Well, the decision of the Senior Deputy President made reference to an absence of a shift in that time and, in fact, specifically noted with respect to the CFMEU's application at that time to cover that gap, that it is something that should be given consideration in the context of this review.

PN5479

VICE PRESIDENT HATCHER: But, in a sense, you are being told, "Bring some evidence that this is a gap that needs to be filled."

PN5480

MR SCHMITKE: It is very difficult to bring evidence in relation to the gap because, as I've mentioned earlier, there's a lot of enterprise agreements that apply in this particular sector, but what should be obvious to the Commission and what we would say is that it had previously been covered, it is now a gap that's there, we are not proposing to do anything other than to fill that gap with the shift definition which puts back in the previous arrangements.

PN5481

DEPUTY PRESIDENT GOSTENCNIK: What were the hours of work for that shift arrangement?

PN5482

MR SCHMITKE: It would be commencing between 11 pm and finishing - or commencing between 11 pm and 4.30 am.

PN5483

DEPUTY PRESIDENT HAMILTON: Are those the words from the National Building Trades Construction Award?

PN5484

MR SCHMITKE: That was the difficulty, is that they used to define shifts with reference to when they finished rather than when they commenced.

PN5485

DEPUTY PRESIDENT GOSTENCNIK: That would be a night shift in the civil construction sector?

PN5486

MR SCHMITKE: Yes.

PN5487

DEPUTY PRESIDENT GOSTENCNIK: Which is covered. You say there is no similar provision for the building - - -

PN5488

MR SCHMITKE: That's correct, yes.

PN5489

VICE PRESIDENT HATCHER: What is the night shift allowance?

PN5490

MR SCHMITKE: 50 per cent. It's exactly the same.

PN5491

VICE PRESIDENT HATCHER: The night shift allowance for the civil construction sector is 50 per cent?

PN5492

MR SCHMITKE: Yes.

PN5493

VICE PRESIDENT HATCHER: Is this opposed, Mr Maxwell?

PN5494

MR MAXWELL: Your Honour, we deal with it in paragraphs 246 to 249 of our written submission. We oppose it on the basis that the matter was dealt with by Watson SDP in a further supplementary decision which the MBA have not identified and which is [2013] FWC 7478 and he rejected the MBA application in 2012 on the basis there was no evidence. Again we have no evidence of people actually working the hours that are claimed by the MBA and we believe that's the case, but we have put an alternative position in paragraph 2.49 that the more economical way of dealing with this is just to extend the hours of the night shift.

PN5495

VICE PRESIDENT HATCHER: It is the same result then?

PN5496

MR MAXWELL: The same result.

PN5497

VICE PRESIDENT HATCHER: 50 per cent loading?

PN5498

MR MAXWELL: Yes.

PN5499

VICE PRESIDENT HATCHER: Mr Crawford, do you have a view about this?

PN5500

MR CRAWFORD: No, it's not in the civil construction sector, but there are different night shift loadings in the civil construction sector, there's a 15 per cent one, a permanent night shift rate of 30 per cent and a less than five successive shift rate.

PN5501

VICE PRESIDENT HATCHER: This is 50 per cent that is being proposed.

PN5502

MR CRAWFORD: Yes, this isn't - I am just correcting what was said before because it's not correct that the night shift rate for the civil construction sector is always 50 per cent.

PN5503

DEPUTY PRESIDENT GOSTENCNIK: So, for example, if the night shift were changed, a shift commencing after 3 pm, at or after 3 pm, it's a question of nominating the time before which that shift would need to commence?

PN5504

MR MAXWELL: That's right, your Honour, so if you changed the night shift to mean a shift commencing at or after 3 pm and before 4.30 am - - -

PN5505

DEPUTY PRESIDENT GOSTENCNIK: Or finishing before.

PN5506

MR MAXWELL: No, commencing before 4.30.

PN5507

DEPUTY PRESIDENT GOSTENCNIK: Yes, I understand that, but if you say the night shift would be one commencing after and - - -

PN5508

VICE PRESIDENT HATCHER: Can't you liaise with Mr Schmitke overnight and just give us a form of words in the morning?

PN5509

MR MAXWELL: Yes.

PN5510

VICE PRESIDENT HATCHER: I am not detecting any substantive disagreement.

PN5511

MR MAXWELL: We will endeavour to do that, your Honour.

PN5512

VICE PRESIDENT HATCHER: Thank you.

PN5513

MR SCHMITKE: Your Honour, the next item is in relation to overtime for trainees and apprentices. This is again a technical drafting error. It is dealt with on page 25 of our submission. Essentially, there are two provisions in the On-site Award, which is clause 15.3(b) and 15.3(c), and then subsequently, at clause 31.7, a similar clause, the same type of clause. It deals with the overtime for apprentices at 15.3(b) and 15.3(c) and overtime for trainees at clause 31.7.

PN5514

We saw some utility in combining those two just for the purposes of providing some clarity and reducing the work within the operation of the instrument. We have advanced this position on the basis that it would have no material effect. We don't see that would have any material effect; we just think it's an exercise in consistency and would assist award users to better meet the modern award objective.

PN5515

VICE PRESIDENT HATCHER: Mr Maxwell, what is the problem with this?

PN5516

MR MAXWELL: Your Honour, in regards to this issue, the clause 15.3 was determined by the Full Bench in the 2012 Apprentices case. Whilst we have some sympathy for the issue that is raised by the MBA, we have a concern that if it is removed from the apprentices clause in clause 15, then people may miss the provision that is contained in clause 36, and given the particular circumstances surrounding apprenticeships, we believe it's best left in clause 15.

PN5517

DEPUTY PRESIDENT HAMILTON: So there is no substantive difference between you, it's just a question of where in the award?

PN5518

MR MAXWELL: That's correct, your Honour.

PN5519

VICE PRESIDENT HATCHER: All right, the next one?

PN5520

MR MAXWELL: Sorry, your Honour, before you go on to the next one, just in regards to the piece rates issues that Mr Schmitke addressed you on earlier, we weren't given the opportunity to respond. I just seek to rely on our written submissions at paragraph 242 in opposing it.

PN5521

VICE PRESIDENT HATCHER: If it is entered into under duress or by coercion, it's not an agreement, is it?

PN5522

MR MAXWELL: It's not, your Honour.

PN5523

VICE PRESIDENT HATCHER: There is no meaning of the word agreement which accompanies concepts of coercion and duress.

PN5524

MR MAXWELL: Your Honour, we just point out that those provisions were specifically inserted by the ARC Full Bench and are common to other piece rate clauses in modern awards.

PN5525

MR CRAWFORD: Can I just add, your Honour, that in our reply submissions, we cited a case for the horticultural industry where there was basically the same claim to remove those words or words to that effect and the claim was rejected by a Full Bench, so we would say that decision should be followed by this Full Bench.

PN5526

VICE PRESIDENT HATCHER: All right, thank you. Alternative working arrangements?

PN5527

MR SCHMITKE: Yes, this is simply an application with respect to the Joinery Award and it is in item 4 in the determinations that we filed. It deals with clause 31.1. Essentially, we would say, it is a technical, on its face, clause that would require adjustment. Essentially, it requires that there be alternative working arrangements agreed by 60 per cent of the employees. That is a bit of an anomaly. We seek to simply replace the 60 per cent with the word "majority". That's the only change that we seek.

PN5528

VICE PRESIDENT HATCHER: Is there any evidence of ballots which have got, say, 55 per cent and failed for that reason? Any evidence of that nature?

PN5529

MR SCHMITKE: If they were secret ballots, perhaps not, but I'm unsure, your Honour, I have no evidence to that effect.

PN5530

DEPUTY PRESIDENT GOSTENCNIK: Or you don't have the name of the people to count them.

PN5531

MR SCHMITKE: Yes.

PN5532

VICE PRESIDENT HATCHER: What is the history of this? When was this made?

PN5533

MR SCHMITKE: I can't answer that question - I can take it on notice but - - -

PN5534

VICE PRESIDENT HATCHER: Mr Maxwell will tell us, no doubt.

PN5535

MR SCHMITKE: Yes, of course, but I always like to double check what he would say. Simply, if for no other reason, we do not see why there is no reason why we just can't have "majority". It's completely out of step, it's a bit odd. We wouldn't see it necessarily as - we have had a look to see if we can find a basis for its existence. We can't find that, but we just don't think that it meets the objectives and, to some extent, it is a disincentive or doesn't allow flexibility to be achieved in a workplace by having what we would see as an artificial percentage.

PN5536

DEPUTY PRESIDENT HAMILTON: Could the 40 per cent enter into an IFA to do the same thing?

PN5537

MR SCHMITKE: The answer to that question is not necessarily.

PN5538

VICE PRESIDENT HATCHER: All right. Mr Maxwell, why is that there?

PN5539

MR MAXWELL: Your Honour, I wasn't expecting to deal with that matter next, but my understanding is that that relates back to when the 38-hour week was introduced in the National Joinery and Building Trades Products - sorry, I withdraw that. Back in 1982, there would have been the various carpenter and joiners awards.

PN5540

DEPUTY PRESIDENT HAMILTON: Was it a costs offset?

PN5541

MR MAXWELL: It was a costs offset and it was to give the protection to the employees to ensure that it was a majority decision.

PN5542

DEPUTY PRESIDENT HAMILTON: Why a special majority?

PN5543

MR MAXWELL: I would have to take this on notice to find out, your Honour. I can't recollect.

PN5544

DEPUTY PRESIDENT HAMILTON: I doubt if you will. It was certainly done that way by agreement, was it?

PN5545

MR MAXWELL: Yes.

PN5546

DEPUTY PRESIDENT HAMILTON: By agreement, no arbitration?

PN5547

MR MAXWELL: I would have to check in regard to the off-site awards.

PN5548

VICE PRESIDENT HATCHER: Clause 7.1 allows IFAs for arrangements for when work is performed. Wouldn't that overcome any lack of majority?

PN5549

MR SCHMITKE: Except that the clause refers to "by written agreement between the employer and the employees" and it applies to ordinary hours of work. So, essentially, this is a provision where you don't want to necessarily have individual employees operating at different times.

PN5550

VICE PRESIDENT HATCHER: So we have finished that item 6 now? All right. Dirty work, Mr Boanza?

PN5551

MR BOANZA: Thank you, your Honour. The variation that we are seeking in our document dated 9 December 2016 is to simply - well, I should go back. There was originally some thought as to whether this allowance was going to be captured by the MBA's application to rationalise allowances, but it appears after the events of this week that that particular allowance is not captured.

PN5552

That allowance is in clause 22.2(h) of the current award and our complaint is, your Honour, that there is nowhere in the award a definition of what unusually dirty work is and that has created a number of difficulties for our members and I have been involved in a number of disputes. Essentially, as the situation stands now, any employer or employee or union or employer representative can go into a worksite and make this subjective opinion of what dirty work is and make a claim for the allowance.

PN5553

VICE PRESIDENT HATCHER: What is your proposed definition?

PN5554

MR BOANZA: We have a proposed definition, your Honour, which I will find. Our proposal is that:

PN5555

Unusually dirty work is defined as a situation where the employee is required to work on a site with dirty or contaminated substances or materials not commonly found on building and construction sites, and these substances or materials not covered by any other disability allowances paid under this award.

PN5556

Having said that, your Honour, we are very open to working with other parties to come up with an agreed definition if that can be done, but our point is that under the objectives of the modern award, it seems bizarre that in this day and age we have got an allowance payable to employees for which there is no definition anywhere. That is simply our claim.

PN5557

VICE PRESIDENT HATCHER: Is that one of those things where you know it when you see it?

PN5558

MR BOANZA: I'm not too sure that if I went into a building site that I wasn't covered by three or four different allowances besides - you know, there is a sewage allowance and fumes allowance and other things in the award.

PN5559

DEPUTY PRESIDENT GOSTENCNIK: I need one of those allowances every time I enter my kids' rooms.

PN5560

MR BOANZA: As I do, your Honour.

PN5561

VICE PRESIDENT HATCHER: Mr Maxwell, what is unusually dirty work?

PN5562

DEPUTY PRESIDENT GOSTENCNIK: What you're about to do now?

PN5563

MR MAXWELL: Your Honours and the Full Bench, dirty work would be - there is no definition of dirty work that I'm aware of that has been used by the parties. It has mainly dealt with work that is not covered by other allowances under the special rates.

PN5564

DEPUTY PRESIDENT HAMILTON: So it's substances not commonly found on a building site, which is what this proposed definition refers to.

PN5565

MR MAXWELL: No, I wouldn't say it is material not commonly found on a building site. I think it would cover situations on a building site - I don't know - I admit I am speaking off the top of my head here - but you can have a situation, let's say, where a construction site has been affected because of high winds where there's soil and other materials that have been blown on the site. Workers would then be required to remove that material and that may be then considered to be dirty work.

PN5566

DEPUTY PRESIDENT HAMILTON: What is your proposal? Leave it as it is?

PN5567

MR MAXWELL: Our proposal is to leave it as it is.

PN5568

VICE PRESIDENT HATCHER: There's no enforcement cases about this allowance?

PN5569

MR MAXWELL: Not that I'm aware of where there's ever been a dispute about it. It has normally been resolved between the parties on the ground about whether it is dirty work or not.

PN5570

MR SCHMITKE: If I might just make mention, this particular allowance was the subject of the draft or captured in our draft determination. What I did do, and it may well be a middle ground, is I actually renamed the subclause 22.2(h) to read "Unusually dirty work to reflect the provisions" underneath. That was done so because if we go back to clause 21.2, which is the general industry allowance, that has got a general rate to compensate for the following disabilities associated with construction work: climatic conditions, disability of having dust blowing in the wind, brick dust, sloppy and muddy conditions, et cetera, which is, I think, some of the work that Mr Maxwell just described. So if we at least had this subclause - - -

PN5571

VICE PRESIDENT HATCHER: That would be usually dirty work.

PN5572

MR SCHMITKE: Yes, as opposed to unusually, yes.

PN5573

VICE PRESIDENT HATCHER: Mr Maxwell, on your proposal for an optional roll-up of allowances, was this included in that?

PN5574

MR MAXWELL: Yes, it was. Sorry, I had better check that, your Honour, but I believe it was.

PN5575

VICE PRESIDENT HATCHER: Anything else on this issue? Mr Crawford?

PN5576

MR CRAWFORD: I was just going to mention, your Honour, that we did propose an alternative definition at paragraph 130 of our reply submissions. The definition was basically just linked to duties that involve an employee being exposed to dirtier conditions than they would ordinarily experience in their regular duties.

PN5577

VICE PRESIDENT HATCHER: That doesn't really add much, does it?

PN5578

MR CRAWFORD: I thought it did.

PN5579

DEPUTY PRESIDENT HAMILTON: That would be dirty work, not unusually dirty work.

PN5580

VICE PRESIDENT HATCHER: Can I indicate we intend to sit until 4.15 and, unless anyone objects, we will commence at 9 am tomorrow. All right, can we move on to the next issue, tool and employee protection allowance. Ms Adler?

PN5581

MS ADLER: Yes, your Honour, thank you. We have a proposed variation in relation to clause 20.1(a) and that proposed variation is attached to our December submission at attachment I. What we propose would have two effects. Firstly, it would place a positive obligation on an employee to provide and maintain tools and protective equipment in order to receive the allowance, and the second aspect is that it would expressly provide that the allowance will not be paid to an employee if the employer provides all the tools and protective boots. The additional words that we propose to add to clause 20.1(a) would read:

PN5582

The allowance would be payable except where the employer provides the employee with all tools and protective boots necessary to carry out the work or if the employee fails to bring tools to work or to maintain tools so they are safe and suitable for use.

PN5583

There are four reasons why we say the Commission should grant our variation. The first is that we say the allowance is an expense related allowance so should only be payable where there's an expense incurred on behalf of the employee. In saying that, I would note that the allowance is located within the award in the section entitled "Expense related allowances" in clause 20.1 and that, further to that, it is adjusted in accordance with clause 20.4, which talks about adjustments of expense related allowances.

PN5584

I would also say that the other allowances outlined within clause 20 are only payable where the expense is incurred, so the current operation of clause 20.1(a) differs from the other allowances within that clause.

PN5585

We also outline in our written submissions the history associated with this allowance. We say that it was considered as a reimbursement for an expense historically.

PN5586

VICE PRESIDENT HATCHER: What paragraph?

PN5587

MS ADLER: Sorry, in our written submissions. It is at section 5 of our written submissions. Specifically sections 5.3 and 5.4, which is pages 31 and 32 of our written submissions, set out that history. There are, I guess, three things I would highlight to the Bench arising out of those written submissions.

PN5588

Firstly, our interpretation of the history indicates that the provision hasn't been dealt with since at least 1983 and, at that time, it was clear that the allowance was one directed at the reimbursement of an expense. Secondly, we would submit that the purpose and intent of the tool allowance was not considered during award simplification or award modernisation. Finally, we deal with the decision during the two-yearly review in the written submissions and our submission is that that decision did not properly comment on or consider the proper construction or the purpose of the allowance.

PN5589

Our survey does deal with this issue. We asked members if they provide tools to their employees. That is dealt with at question 30.

PN5590

VICE PRESIDENT HATCHER: Did it ask it with respect to trades people specifically?

PN5591

MS ADLER: It just said:

PN5592

Do you provide your employees with all the tools and protective equipment necessary to carry out the work?

PN5593

It was a "yes" or "no" question and there was an opportunity to provide other responses. The result of that was that 52 per cent said that, yes, they did and 36 per cent said, no, they didn't, and there's a range of, I guess, variations on a theme outlined in the comments. We say that on the basis that in order for the allowance to truly be an expense related allowance, our variation be adopted.

PN5594

VICE PRESIDENT HATCHER: What page is the individual responses of the survey?

PN5595

MS ADLER: Page 43 of 45. I think what comes out of those responses is that a one size fits all approach doesn't necessarily apply and the way that the provision is currently drafted, for those who are entitled to the allowance, it is payable irrespective of the individual circumstances of that business, or what, if any, tools are to be provided. So we are not taking away an entitlement for those employees who provide their own tools, it is simply ensuring that the provision is operating in the way that we say it was intended to, which is to be an expense related allowance.

PN5596

VICE PRESIDENT HATCHER: How does it work where a lot of these answers suggest it's an intermediate position, that some tools are provided, some tools aren't, some bring their boots but no tools, some bring tools and no boots?

PN5597

MS ADLER: I guess we would have to read that within the context of how the provision operates and the list of things specified within the clause, and I guess that's as far as I could take it, but, like I said, I think the prescription within the current provision doesn't accommodate the variability in what actually happens on the ground.

PN5598

VICE PRESIDENT HATCHER: The award clause doesn't actually, except in relation to the exclusions, specify what tools you actually have to bring.

PN5599

MS ADLER: No.

PN5600

VICE PRESIDENT HATCHER: And it says it doesn't include various tools described in (b), but, in terms of getting the allowance in (a), it doesn't say what, if any, tools you actually have to bring.

PN5601

MS ADLER: Yes, your Honour.

PN5602

DEPUTY PRESIDENT HAMILTON: Is that it?

PN5603

MS ADLER: I don't know if that was a question or a statement, your Honour.

PN5604

DEPUTY PRESIDENT HAMILTON: I am asking you is there anything else?

PN5605

MS ADLER: Oh, any responses.

PN5606

VICE PRESIDENT HATCHER: Only that insofar as you want to make it a provision which says that you don't get the allowance unless you bring the tools, that begs the question "What tools?"

PN5607

MS ADLER: What the tools are, yes, your Honour. I would submit that they would be the tools of the trade of those trades persons listed in the classifications in order to perform their job.

PN5608

DEPUTY PRESIDENT GOSTENCNIK: For example, in relation to a bricklayer, the allowance of $21.61 is payable or, alternatively, the relevant tools are those set out in (b)(i)? Is that right? Sorry, they are the excluded tools.

PN5609

MS ADLER: Yes, they are. We would say that the tools of the trade required by a bricklayer, if they bring those to the job, then they should be reimbursed for the costs associated with those tools, whereas if the employer provides whatever is necessary for that bricklayer to do their job - - -

PN5610

VICE PRESIDENT HATCHER: So what does a bricklayer need to have?

PN5611

DEPUTY PRESIDENT GOSTENCNIK: And if a bricklayer brings half his or her tools?

PN5612

MS ADLER: Well, I don't know that there would be a circumstance where a bricklayer would bring half their tools.

PN5613

DEPUTY PRESIDENT GOSTENCNIK: They don't have to bring a wheelbarrow (indistinct) plenty of circumstances.

PN5614

MS ADLER: I don't know, your Honour. The amount of times that I've been on site laying bricks is not many. I know that doesn't assist.

PN5615

VICE PRESIDENT HATCHER: But, seriously, don't they have a barrow to move bricks on?

PN5616

MS ADLER: A wheelbarrow?

PN5617

VICE PRESIDENT HATCHER: Yes.

PN5618

MS ADLER: Yes.

PN5619

VICE PRESIDENT HATCHER: I am just curious, is that a tool that they would have to bring to earn the allowance?

PN5620

DEPUTY PRESIDENT HAMILTON: So some employers provide full tools and also pay the allowance?

PN5621

MS ADLER: Yes.

PN5622

DEPUTY PRESIDENT HAMILTON: Why? Why do they do that?

PN5623

MS ADLER: Because they are required to under the award.

PN5624

DEPUTY PRESIDENT HAMILTON: Allowance, yes.

PN5625

MS ADLER: Yes.

PN5626

DEPUTY PRESIDENT HAMILTON: But why would they provide tools if they also have to pay the allowance? I don't understand. It may be specialist tools, perhaps, I suppose.

PN5627

MS ADLER: Well, because they are a carpenter themselves as the employer and they have those tools and they provide them for use to their employees.

PN5628

DEPUTY PRESIDENT HAMILTON: All right, thank you.

PN5629

VICE PRESIDENT HATCHER: If you are in a city construction project and your workers are getting in on public transport, the ability to carry tools with them, particularly if it's a wheelbarrow with pneumatic tyres, would be difficult, I assume.

PN5630

MS ADLER: Yes, your Honour, it would be. In those circumstances, I imagine there would be a place to house the tools at the site and, in those circumstances, again, I wouldn't want to assume, but I would suspect an employer would provide those tools as they would remain on site.

PN5631

VICE PRESIDENT HATCHER: Thank you.

PN5632

MS ADLER: There is nothing further, your Honour.

PN5633

VICE PRESIDENT HATCHER: Does any other employer want to say anything about this? No? Mr Maxwell?

PN5634

MR MAXWELL: Thank you, your Honour. Your Honours and Commissioners, we oppose this variation. We deal with it in paragraphs 232 to 239 of our written submission. We say that the only evidence that employers provide tools is the HIA survey. Just in regard to that HIA survey, we have already pointed out that a number of the respondents to that survey say they are not covered by the Construction Award and when you look at the responses contained on pages 43 to 45, not many of them seek to deal with tools. A lot of them deal with PPE and with the provision of boots, and clearly the provision of boots isn't what the tool allowance is paid for.

PN5635

VICE PRESIDENT HATCHER: What paragraphs of your submission was it?

PN5636

MR MAXWELL: This is in paragraphs - - -

PN5637

DEPUTY PRESIDENT HAMILTON: Page 25, is it?

PN5638

MR MAXWELL: From page 87 through to page 90.

PN5639

VICE PRESIDENT HATCHER: What is the allowance actually for in the first place?

PN5640

MR MAXWELL: The allowance is paid to trades people for the provision of tools and the maintenance of their toolkit, so it's not something where you pay just for the tools they may use on a particular day, it is for having a range of tools in a toolkit and maintaining that toolkit.

PN5641

VICE PRESIDENT HATCHER: So if there's a case where a trades person is not required to provide them and the employer provides everything, why would you get the allowance, or do you just say that never happens?

PN5642

MR MAXWELL: To take one step back, in terms of the nature of employment in this industry where people go from job to job and employer to employer, the tool allowance is actually part of your hourly rate, so it's part of the all-purpose rates of an employee. If they go onto the site where the employer provides the tools - and, to be honest, we are unaware of any site on-site where the employer provides all the tools required - whilst they may - if they didn't receive the allowance then, then they would have less money over the year to maintain their tools, so therefore it is a reduction of their overall entitlement.

PN5643

As we say, we are unaware of any real evidence of an employer employing a person on-site that provides all their tools. The only exception to that would be to an apprentice because there is normally an obligation on the employer to provide the toolkit for an apprentice when they start.

PN5644

VICE PRESIDENT HATCHER: Do employers typically define what tools they expect to be provided? Is there something which sets out what any given trades person is expected to bring with them?

PN5645

MR MAXWELL: In some States there is actually a list of those tools to be provided to an apprentice which are expected to be part of a trades person's toolkit.

PN5646

DEPUTY PRESIDENT GOSTENCNIK: If we go back to a small business that HIA might represent, a contractor, a small bricklaying contractor might be constituted by himself or herself as the principal and one other bricklaying employee and, as part of the business, they buy a van and a bunch of tools and there's a bricklaying job to be done and he sends his employee in the truck/van with all of the tools to the job to undertake bricklaying. What tools does that employee in that circumstance have to maintain?

PN5647

MR MAXWELL: In that hypothetical circumstance, which we submit - - -

PN5648

DEPUTY PRESIDENT GOSTENCNIK: I suspect it's more than hypothetical.

PN5649

MR MAXWELL: Your Honour, I beg to differ. In terms of my experience of the building industry, that is very rare.

PN5650

DEPUTY PRESIDENT GOSTENCNIK: In the domestic housing industry.

PN5651

MR MAXWELL: In the domestic housing industry and in all other sites.

PN5652

DEPUTY PRESIDENT GOSTENCNIK: I am happy to compare our experiences.

PN5653

MR MAXWELL: A trades person's tools are the tools of their trade. They are the tools that they are expected to have with them wherever they go to do a job.

PN5654

DEPUTY PRESIDENT GOSTENCNIK: And this person does, he has his employer's tools and he's gone off to the job.

PN5655

MR MAXWELL: In our experience, the tools that are provided by the employer are not necessarily of the standard that a trades person would - sorry, I withdraw that. There are always issues with tools that are provided about whether they are up to the job required, then there are issues about what happens when the tools break and when the tools become blunt in terms of a carpenter, and if tools are stolen, who is liable for the theft. Our view on this clause is that it would create disputation in the industry over whether the tools are adequate for the job and, as we say, when you look at the responses to the HIA survey, most of them deal with protective equipment, they don't deal with tools.

PN5656

VICE PRESIDENT HATCHER: Their response is persons who answered "other", I think, isn't it? Is that right, Ms Adler?

PN5657

MS ADLER: Yes, your Honour.

PN5658

VICE PRESIDENT HATCHER: They are not responses given by those who answered "yes" or "no".

PN5659

DEPUTY PRESIDENT HAMILTON: Where is the provision which requires a bricklayer to provide his or her own tools for receipt of the tool allowance? Where is that in the award?

PN5660

MR MAXWELL: This is not within the award, but the way, I suppose, the industry is operated and, if need be, I can refer to previous decisions where the issue was resolved, but a trades person is expected to have the tools of the trade required by them to perform their work. That is why they are paid the tool allowance and that is why it is part of their ordinary hourly rate.

PN5661

DEPUTY PRESIDENT HAMILTON: Aren't apprentices subsidised to buy a box of tools, or they used to be?

PN5662

MR MAXWELL: It depends on the award. In some States - - -

PN5663

VICE PRESIDENT HATCHER: Sorry, a Commonwealth subsidy, I think it was.

PN5664

MR MAXWELL: There was a Commonwealth subsidy for tools of the trade, which I believe no longer exists, but there was a subsidy. In Queensland, there is a provision of tools general order which put an obligation on the employer to provide the tools for apprentices.

PN5665

DEPUTY PRESIDENT HAMILTON: All right. You agree there is no obligation in the award to provide tools, but you say it has got a wider scope than simply an expense related?

PN5666

MR MAXWELL: Yes, and we also rely on the fact that this matter was dealt with in the 2012 Award Review by Watson SDP, who rejected a similar application by the HIA. That is our submission.

PN5667

VICE PRESIDENT HATCHER: Anything brief in reply, Ms Adler?

PN5668

MS ADLER: Only to say that I would urge the Bench to take a cautious approach when Mr Maxwell makes submissions about his experience of the industry, particularly on non-unionised residential construction sites. Mr Maxwell also made the submission that it is expected in the industry and the question that comes to my mind is "Expected by who?" and some sort of broad industry kind of understanding or agreement as to how this provision works eludes me. That is all I would say in response.

PN5669

VICE PRESIDENT HATCHER: We will now adjourn and resume at 9 am tomorrow morning.

ADJOURNED UNTIL WEDNESDAY, 12 APRIL 2017 [4.13 PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #45 RADIAL MAP FOR SYDNEY................................................ PN4546

EXHIBIT #46 RADIAL MAP FOR MELBOURNE...................................... PN4547