PN847

MR FRIEND: If the Commission pleases, I have to make some brief submissions. We've taken the opportunity to - I wouldn't call this a written submission or even a very full outline of a submission but rather than read out references to transcript and documents and such like, we've taken the opportunity to prepare this document which I hope will mean that the time that I'm on my feet is significantly shorter than it might otherwise have been.

PN848

I commence with the legislative framework issue, as you'll see there we don't cavil with anything in the document that was forwarded to the parties by the Commission. We simply refer to Tracey J's decision in SDA v NRA No. 2, where one of the grounds of judicial review in that case was that there was no evidence upon which the Commission member could have found that it was necessary to vary a modern award, which was the requirement, and his Honour of course consequently focused on the question of evidence. But what he didn't do was say well evidence isn't a relevant issue, there's got to be material before the Commission and we just emphasise that point, particularly in relation to the shift workers aspect of this case.

PN849

JUSTICE ROSS: All the same points are made against you.

PN850

MR FRIEND: Sorry, your Honour?

PN851

JUSTICE ROSS: The same points are made against you by the ARA that you haven't produced an affirmative case.

PN852

MR FRIEND: Well we have. Professor Borland tells us how much it's going to cost.

PN853

JUSTICE ROSS: Yes.

PN854

MR FRIEND: And there's a - it's a bit hard to know what else you can do in something like this. But the point with the shift workers, as the Full Bench said in the transitional decision, is there's just no evidence about how many shift workers there were or how it all works and what effect it's going to have, and that hasn't changed.

PN855

You raised a matter with me, your Honour the Presiding Member, concerning a comment in our submissions at paragraph 23 about awards and the application of both loadings - casual loadings and penalties. We haven't been through all the 122 modern awards, we just spent half an hour or an hour or so just picking a few out. Certainly they don't all do that, a lot of them don't provide for penalties at weekends or in evenings at all, but these ones that we've put in attachment A do have those types of provisions.

PN856

Now some of them, as you'll see, for instance the fourth one the airport employees award, it's clause 30 - when read with clause 12, clause 12 is the casual - the type of employment clause so it says casual employees get a loading of 25 per cent in lieu of a number of specified leave entitlements, not including the penalties that might apply for working at the weekend. Then there are payments for penalty at the weekend and properly construed that would mean that you'd get the penalty and you'd get the casual loading on the base rate.

PN857

We've made some observations about the evidence in the next section, I don't want to go through what we've said about Professor Borland, the references are there. Can I just go through what we've said in paragraph 6 though about Mr Slaughter's evidence. Because it's the only glimpse we're given into what the real cost for an employer might be from the employer's perspective.

PN858

Mr Slaughter gave evidence that his turnover was 6 million and that he tried to keep labour costs to 10 per cent of sales, direct labour costs. So that's a $600,000 labour bill. Then we have evidence of 3380 hours for weekday evenings at $17.50 an hour. Now contrary to the figures he puts and I'll come to that in a minute, we say when you increase that by 20 per cent, which is the claim, you get a total increase of 11,830 per annum.

PN859

Saturdays, doing the same thing it's $18.33 an hour. That of course includes the 10 per cent loading and that would increase to $20.36 with an 11.1 per cent increase, which is the - as you might recall from Professor Borland's report, that's the figure you get when you gross it up. So the total increase is $350 a week or just under and that's a 3.03 per cent increase over the year. Not taking into account a range of other things that might be achievable to reduce that or change it but that's well within the maximum that Professor Borland predicted even for the type of business that Mr Slaughter was conducting, supermarket.

PN860

JUSTICE ROSS: Well except that we don't know - their target was 10 percent of sales and secondly, labour costs would include more than the base hourly rate, it would include on-costs, superannuation and the like and you've only calculated it on the basis of - - -

PN861

MR FRIEND: It would, yes, and I mean we can't do that. All we can do is do the best we can with the material that we've got and if the employers come along and produce very sparse evidence and then say "Well there you go, you can't know", it's not really helpful and one should assume that on the basis of the material that we've put, it's well within the range that Professor Borland has described.

PN862

We've made some observations about Dr Sands. I don't intend to go through those. I think what we were going to say is pretty clear from the course of cross-examination. Similarly, with the employer, the actual employer witnesses, we have done a re-calculation in attachment B of the figures that have been provided. Mr Slaughter, I've already referred to. Ms Elson, we have what we can tell.

PN863

I mean, your Honour's right about not knowing about those other on-costs but it would seem to be fair to say that any flow on for the other matters such as superannuation would be at the same percentage or less not more because the 10 percent is just direct labour, that's all they're concerning themselves with, and there are obviously other costs in having employees. Those aren't taken into account but nor are the increases to those costs. In other words, it would make a difference to the dollar amount but not necessarily, and probably not to the percentage.

PN864

VICE PRESIDENT HATCHER: Where they've provided the specifics because the denominator is - - -

PN865

MR FRIEND: Changing.

PN866

VICE PRESIDENT HATCHER: Yes.

PN867

MR FRIEND: Yes. We've made some observations about Ms Dorwald's calculations. Really our submission, in the end, is you can't do anything with them. She couldn't explain them. Some of them are, frankly, bizarre. 37.8 percent of total hours reduced is - it's just unintelligible and she couldn't explain how that worked.

PN868

JUSTICE ROSS: What percentage hours reduction was there in the other evidence, employer evidence?

PN869

MR FRIEND: I'll just check if they gave percentages. They certainly gave hours.

PN870

JUSTICE ROSS: Well we can - - -

PN871

MR FRIEND: We could work it out if we were quick enough on our feet, if I were, and that's assuming a linear relationship, a direct relationship, between increase and reduction which we don't necessarily accept, so - - -

PN872

JUSTICE ROSS: Well - - -

PN873

MR FRIEND: Ms Elson talks in 34 about changing the structure.

PN874

JUSTICE ROSS: Yes, and 32 she talks about a loss of 512 hours, casual hours, per year - - -

PN875

MR FRIEND: Yes, out of - - -

PN876

JUSTICE ROSS: - - - this is in relation to Saturday.

PN877

MR FRIEND: That's just a little over 10 percent if it's 4921, yes.

PN878

JUSTICE ROSS: Yes. No, it's really the order of magnitude I want to get a feel for.

PN879

MR FRIEND: Yes, yes. No, thank you, your Honour. We then deal with the ARA's written submissions and I'll just ask the Commission to turn to those very briefly. I'm sorry, the proposed findings, I should have dealt with first. We've just included, as a final attachment to these submissions, what the SDA says about the findings of facts sought by the ARA. You'll see that we've put our comments underneath in red so that it's clear how we say, I suppose, the most helpful part of that is where we say they're accepted. Then going to their submissions - - -

PN880

JUSTICE ROSS: Can I just ask, sorry, in relation to para three of the annotation on the findings, you say subject to the caveat you don't cavil with the proposed findings.

PN881

MR FRIEND: Yes.

PN882

JUSTICE ROSS: How do we deal with that.

PN883

MR FRIEND: How do you deal with that? You've got no evidence about these matters in relation to people under the age of 18.

PN884

VICE PRESIDENT HATCHER: Does that mean we accept these as findings applicable to that part of the workforce 18 and over?

PN885

MR FRIEND: Yes, yes. Yes, you can accept them as findings for that part of the workforce. We don't attack the methodology or the findings in that sense but it doesn't tell you anything about that younger group of employees.

PN886

VICE PRESIDENT HATCHER: All right.

PN887

MR FRIEND: Ultimately, it's not clear how much of a difference any of that evidence really makes to the tasks that's before the Commission. Some of it obviously is relevant but not all of it is. It may be, for instance, looking at 3(1), casual employees are less likely to rely on work income as their main source of income compared with the permanent employees, 87 to 94 percent.

PN888

It's probably certainly a statistical difference but is it going to make any difference to what you're doing when you apply the modern award subjective and are looking at achieving fair wages in accordance with that objective? The fact that someone uses it for their main source is not really a particularly important factor.

PN889

JUSTICE ROSS: Well one of the points put against you is that, to perhaps put it in more blunt terms but - well most of the casuals in retail are kids who are studying and they don't - it suits them to work at night and on Saturdays and so the dis-utility that a full time employee, and I think the inference is a full time employee with family responsibilities or dependent children or something like that, is different to the dis-utility to be experienced by these casuals therefore we shouldn't do anything.

PN890

MR FRIEND: Yes.

PN891

JUSTICE ROSS: That's for - short of anything else, that's really what we come down to.

PN892

MR FRIEND: Un-picking that, it's not that most of them are kids.

PN893

JUSTICE ROSS: I'm sorry?

PN894

MR FRIEND: It's not that most of them are kids. Not most of them are youngsters going to school. I think the evidence is about 25-30 percent so there are a lot of other people involved there. It doesn't necessarily suit them. The evidence about dis-utility we have is that there is dis‑utility for those people in working those hours.

PN895

JUSTICE ROSS: But you said they're only available to work those hours.

PN896

MR FRIEND: That's when they can work and they like the money being casuals and that's why they take the jobs but they do give up on the social engagements or make the trade off between work, sport, family. There's plenty of evidence in the group sessions of Dr Sands about those types of things. That doesn't include under 18s. It's 18 and over but those things are still just as relevant to these employees as anyone else and - - -

PN897

VICE PRESIDENT HATCHER: Sorry, if you just stay with school decisions for a second, so they can work on afternoons, evenings and weekends, that's their - - -

PN898

MR FRIEND: And holidays, yes.

PN899

VICE PRESIDENT HATCHER: And holidays, that's their available times, so what's the dis-utility for them in working at times and days when they're the only times and days they can actually work in the first place?

PN900

MR FRIEND: Well it's still the only times of the day they might be able to do the other sorts of things, the family things that people do, the sport things. But that's - - -

PN901

VICE PRESIDENT HATCHER: It's the only time they can work anyway, then that's simply a choice between working and not working. It's not the case of the employer moving the work to a time that's inconvenient to them.

PN902

MR FRIEND: I understand what your Honour is saying, but the disutility is how it affects the person's life. So that's the trade‑off they have to make if they're going to work. That's the only time that they can work, but that's the trade‑off they have to make. I mean, you might as well say, well, a person who has got a full‑time job and then does casual work at the weekend, because that's the only time they can do extra work, has no disutility in doing that work at the weekend. In my submission, of course they do, because they are affected in exactly the same way as someone else working beside them who wants to do something on a Saturday afternoon.

PN903

I come to the employer submissions. Paragraph 22 suggests that the ASCA should have to offer a positive in the entry case for change, the existing penalties applicable to casual workers. We really just refer back to the approach that's described by the Full Court in Anglo Coal.

PN904

JUSTICE ROSS: I'm not sure - you know, just as a general observation, both of you make this point that there has to be evidence. Well no, there doesn't. There has to be merit.

PN905

MR FRIEND: There has to be material, yes.

PN906

JUSTICE ROSS: Well material, you know, is not right either. I mean, I appreciate that's what it said, but the fact is that we have to be satisfied that the award terms are necessary to ensure the award achieves the modern award objective. But the Act doesn't say you have to provide evidence. There are some things that are so blindingly obvious. I'm not making that observation about this case, but just as a matter of industrial merit, you say that is not a fair and relevant safety net and the Bench accepts that proposition. Well, what, you have to come along with evidence about all of it? It just doesn't seem right.

PN907

MR FRIEND: Your Honour, I think that's right. It's one of the things that has been vexing me about this case, because really, when you're dealing with something like this, producing evidence is sometimes almost impossible. There are questions of industrial merit, and the Commission has to bring its knowledge and experience and expertise to the question before it of applying that test, or engaging in that process of determining what's necessary to meet the modern awards objective. I know we referred to Tracey J's comments, and they are in a slightly different context, as I pointed out, although it was the way the case was approached by his Honour. There needs to be something more than just an idea. There has got to be some basis upon which the Commission acts.

PN908

JUSTICE ROSS: No, I'm not - it can't be capricious. There has to be some exposition of the merit of a particular proposition.

PN909

MR FRIEND: Yes.

PN910

JUSTICE ROSS: I agree with that. I'm not arguing that proposition.

PN911

MR FRIEND: Yes.

PN912

JUSTICE ROSS: It's the notion that there has to be some evidence, as understood in the usual sense of that word, just seems odd to me; that's all. It might depend - in some ways it might be a function of the particular claim, the context. There are some where, if, for example, it's - well perhaps the matter that Tracey J was dealing with, for instance. It's a novel claim, particular circumstances, et cetera.

PN913

MR FRIEND: Yes.

PN914

JUSTICE ROSS: So it might depend on the sort of nature of the issue.

PN915

MR FRIEND: I understand what your Honour is saying. Really, insofar as we raise the point in relation to shift workers is in the context of a Full Bench saying how can we do this when we don't know what the lie of the land is. They don't know how many shift workers there are; what effect this is going to have, which is why we've presented the sort of evidence that we have from Professor Borland, because that actually deals with that issue, whereas in the - - -

PN916

JUSTICE ROSS: Does anyone know how many shift workers there are in the retail industry? Does your client know?

PN917

MR FRIEND: I don't know. I haven't looked at it, your Honour, but if they couldn't discover that, then they could give that evidence and you could make a guess. Someone is going to be able to make a guess, but the Full Bench said we can't do this, because we don't have this.

PN918

JUSTICE ROSS: Sure, but these claims are being advanced in the context of a review. So I suppose I'm asking your client a question - what do you they know about the incidents of shift work in the retail.

PN919

MR FRIEND: I can take it on notice. I can't answer on my feet.

PN920

JUSTICE ROSS: No, sure.

PN921

MR FRIEND: We came here to meet the case that was advanced by the employer.

PN922

JUSTICE ROSS: Yes. No, I appreciate that. I raised the question because I'm not sure where they would be. It's got that sort of - look, I readily understand (indistinct) submissions centres, and that may reflect some history.

PN923

MR FRIEND: I don't think they're covered by the GRIA.

PN924

JUSTICE ROSS: Yes, that's exactly right.

PN925

MR FRIEND: But I think you might find them in shelf‑stacking and things like that.

PN926

JUSTICE ROSS: Well I'm not so sure about that. Shelf‑stacking is, one, not as prevalent as it was in times past.

PN927

MR FRIEND: Yes.

PN928

JUSTICE ROSS: Because of the changing nature of the products that are put on shelves, and two, that's largely done by night fill, or in times past by night fill staff. I'm not sure that's the case - and this is only from my own observation, and it's only based on large chains - but it seems unlikely that small retail outlets will be employing shift workers.

PN929

MR FRIEND: With respect, your Honour, in my submission the Commission couldn't act upon that sort of feeling.

PN930

JUSTICE ROSS: Sure. But I'm putting it to you that I want to know where they work.

PN931

MR FRIEND: Yes.

PN932

JUSTICE ROSS: And if the SDA has no members or any knowledge of anyone working shift work, well that's a relevant matter.

PN933

MR FRIEND: It is.

PN934

JUSTICE ROSS: That rather suggests that the numbers aren't going to be significant. There may still be some who are obviously outside the scope of knowledge of the SDA's membership.

PN935

MR FRIEND: Yes.

PN936

JUSTICE ROSS: But look, we'll have the same questions for the ARA.

PN937

MR FRIEND: I understand that. I don't think I'm being singled out here.

PN938

JUSTICE ROSS: Yes.

PN939

MR FRIEND: But - - -

PN940

JUSTICE ROSS: Not yet.

PN941

MR FRIEND: No, I'm waiting. But we do point to the fact that if this was just an easy exercise, there's no reason why the penalty rates wouldn't have fixed it up in the transitional decision.

PN942

JUSTICE ROSS: Well I was on the penalty rate decision, I think. It was trial by exhaustion really, by the time we got to the end of it.

PN943

MR FRIEND: But this was in transitionals, and well - - -

PN944

JUSTICE ROSS: Sure.

PN945

MR FRIEND: Maybe, all right; I understand what your Honour's saying and I won't - - -

PN946

JUSTICE ROSS: Yes. It just was an issue that wasn't really engaged in by anyone in particular during the course of the case.

PN947

MR FRIEND: Yes. That's so.

PN948

JUSTICE ROSS: Yes.

PN949

MR FRIEND: We've said what we want to say about paragraphs 20 and 21. I don't need to say anything orally about that.

PN950

JUSTICE ROSS: Yes.

PN951

MR FRIEND: Except that in relation to - - -

PN952

JUSTICE ROSS: Sorry, Mr Friend, just before you leave that, and it's an issue I was going to raise with the ARA too, but this reliance on history as if - - -

PN953

MR FRIEND: We say it's irrelevant, your Honour.

PN954

JUSTICE ROSS: No, sure. I mean, you took the contrary view in the penalty rates, or the SDA did, and the ARA took the contrary view it's now running. But the Penalty Rate Bench made some observations about the background to the General Retail Award and the extent of any consideration on merit of penalty rates. Does any party contest that you're contending that those observations were wrong?

PN955

MR FRIEND: Not us.

PN956

JUSTICE ROSS: No. Well no. But in any event, Mr Wheelahan can come to it. But that broad issue was ventilated in those proceedings as well, albeit the parties were on different sides of the argument, but they've made some observations. If they were wrong about that, well then you'll need to persuade us as to why that's so.

PN957

MR FRIEND: Yes, I understand that, your Honour. We were given today, very helpfully, an updated document about the history.

PN958

JUSTICE ROSS: Yes.

PN959

MR FRIEND: And we accept that, your Honour. So insofar as it's relevant that tells us what was happening more than 10 years ago and there we are.

PN960

JUSTICE ROSS: Yes.

PN961

MR FRIEND: Paragraph 38 of the ARA submissions talks about why the retail employees have certain characteristics which might seem to be - well seems to be put forward as an argument against the change.

PN962

JUSTICE ROSS: I'm sorry, which paragraph of the - - -

PN963

MR FRIEND: Thirty-eight.

PN964

JUSTICE ROSS: Thirty-eight.

PN965

MR FRIEND: Of their submissions, the ARA's submissions your Honour, I'm sorry.

PN966

JUSTICE ROSS: Yes. Bear with me for a moment. Yes.

PN967

MR FRIEND: Can I just make this observation that reading that it struck me as the sort of things I read when I was studying wage fixation historically about why women should be paid less than men. The characteristics of the employee of that nature don't really feed into whether they're entitled to be paid the money that the job's worth. I understand about junior employees but once they've learnt the job they should be getting the same pay. Unless there's anything else we can assist with, we rely on our written submissions in relation to the modern awards objective. I'm not going to go through all that, we've said what we need to. Those are our submissions.

PN968

JUSTICE ROSS: Thank you, Mr Friend, that's been helpful. Mr Wheelahan.

PN969

MR WHEELAHAN: Thank you. Your Honour, the first - if I deal with the issue that you put about industrial merit and both parties arguing that neither has the evidence in each case. In the proposed principles that were sent to the parties and both parties have agreed, at paragraph 13 of that document this Bench has set it out and at paragraph 13(2) the Full Bench there did state:

PN970

The extent of the merit arguments required depend on the circumstances.

PN971

That's the authority for what you're putting to my learned friend that you may well say well it's blindingly obvious that there's industrial merit and depending on the change we don't meet - - -

PN972

JUSTICE ROSS: No doubt you'll say it's blindingly obvious and there's merit in your claim but not - - -

PN973

MR WHEELAHAN: Well, that's a submission I'm instructed to make and I'll make with force. The second issue about well all these questions about the retail sector and as I understood it this is a part of the review. So when one asks questions about well tell me about the shift workers, tell me about percentages and so forth, these issues have already been addressed in the main penalty rates decision. The retail sector has been dealt with and part of that deals with workers, and it was in that decision that you raised although no specific submissions were then pressed about the shift workers, there was material there. That's what then underlines the written submissions that we've made - - -

PN974

JUSTICE ROSS: Sure. The material though went to the retail sector in the broad and relative disutility and those issues.

PN975

MR WHEELAHAN: Yes.

PN976

JUSTICE ROSS: I accept that's so but where's the material that would give us some idea about how many employees are engaged on a shift work basis?

PN977

MR WHEELAHAN: I don't think it'll go to numbers, it'll go to percentages and for example, looking at it quickly whilst it was put to my friend at page 323 of the penalty rates decision. There's a table there with the prevalence and types of shift work arrangements, there's a second table, table 63 and I've just quickly gone to those because they on their face deal with the shift work. I haven't re-read it to pull out precisely but - - -

PN978

JUSTICE ROSS: Well it might be a point each of you can take on notice about what information can you provide us albeit whether it's in the penalty rate decision itself - - -

PN979

MR WHEELAHAN: Yes.

PN980

JUSTICE ROSS: - - - or from an inquiry of your instructor about those you represent.

PN981

MR WHEELAHAN: Yes.

PN982

JUSTICE ROSS: What's their - what do they say is the prevalence amongst their membership. I'd ask the same of the SDA. Of those covered by the general retail award, how prevalent is shift work.

PN983

MR WHEELAHAN: It's a very - and this is part of the entire case - these precise questions are very difficult to answer because as the Vice President pointed out to my learned friend - - -

PN984

JUSTICE ROSS: Well you can ask - - -

PN985

MR WHEELAHAN: - - - when you have vast majority of large retailers.

PN986

JUSTICE ROSS: No, no, I appreciate that but look - - -

PN987

MR WHEELAHAN: But I'll get instructions.

PN988

JUSTICE ROSS: - - - it's almost impossible to answer any question without getting the ABS to run a survey, but we're just seeking the best information we can get from each of you and making an inquiry of your membership about the issue will at least give us some information and - because the information we rely on in the penalty rates is sort of - it goes through this process. You have some labour force data that is - that relates to a particular sector or ANZSIC code, we don't know precisely the sub-items in the ANZSIC code that are linked to this award. There's a mapping exercise done as best we can but it's not an exact size. But at the moment at least in the material directly in front of us there's nothing that would tell us anything about the numbers, and that's the inquiry. So let's see what we can come up with.

PN989

MR WHEELAHAN: We will do that, your Honour. Just - the final submission - - -

PN990

JUSTICE ROSS: I'll leave it to the respective representatives to sort out how you do that so each of you has an opportunity to comment on what you want to say and to sort out what is a convenient timeframe in which to do it. Rather than arbitrarily setting something, I'll just leave it to your common sense to sort it out.

PN991

MR WHEELAHAN: Now with respect to the industrial merit argument I don't want to spend too much time but certainly for our case with respect to shift workers. The underlying position of course that we submit is that if Sunday penalty rates that were found on their merit to be reduced for casual day employees, then the same principles if you like should be applied to those on shift work, and what's the difference. Because of course the shift work penalty has a combined penalty both for the shift work and the disutility of the Sunday and in short, if the Full Bench has found that the current payment or penalty for Sunday work was to be reduced, then it should also flow through to those shift workers.

PN992

JUSTICE ROSS: I follow what you say about the merit argument. Look, a similar proposition, leave aside for a moment the evening penalty proposition. If you look at Saturday and the penalties applicable to casuals, what is the logic behind the proposition that it's 135 per cent for a certain number of hours during the day but the earlier and later hours, which normally would attract a loading for disutility, early morning and late et cetera, there's no loading. What's the rationale for any of that? I understand what you say about the history but as a matter of merit why would there be a difference? Why does it stop at 6 o'clock? So if you're working at 7 pm you get less if you're a casual than if you're working at 5.

PN993

MR WHEELAHAN: Just before I answer. My instructor's helpfully put to me what I was going to put anyway. But look ultimately those awards were made by this Commission so - and I suppose you're asking me as an advocate well, how can I explain or put the logic as to why that decision was made at the time - - -

PN994

JUSTICE ROSS: So you're blaming us, I see.

PN995

MR WHEELAHAN: - - - at the time it was made but - and that's why in our written submissions we've put well it's been here for five years, it's there, there must be a good reason why it was there. Yes, on the face of it, it appears to illogical. We've set out that there was an exposure draft that was there and people had opportunity to comment and that the history was there and then it was made. Of course we're not running, as well as in the penalty rates case, our friend's material change argument or anything of that. You'd have to review the award and I can only make the submission that yes, of course I have to agree with you that it looks on its face to be somewhat illogical.

PN996

Let me then move to our primary if I can about why the rates during the day, putting aside what you've just put to me and the weekday should remain the same and you've rightly sort of summarised that my learned friends say well it should be changed. At best you'd probably say well it's an industrial merit case and there will be no negative consequences, and we've made the point well you haven't actually put any positive evidence, which is what we say should be done if you're making a substantial change to the award.

PN997

As the Vice President, in some of his questions to the witnesses and what he's just pointed out to my learned friend, which is quite right which is also our argument, that predominantly they are young in retail industry, young, students, people who are studying and so forth, and that's when they - - -

PN998

VICE PRESIDENT HATCHER: Is there actually a statistic for that for casuals? No.

PN999

MR WHEELAHAN: Well I'll answer it this way, as the President pointed out there are different statistics on different surveys and the Full Bench in the penalty rates decision has tried to, or has and we accept that decision, set out what the retail sector is and the components and the percentages. We have evidence from Dr Sands which is focussed on the flexibility argument, the fact that people want to work then and really to support what, Vice President, you were putting to my learned friend, this is when the people want to work or can work and to take it to an extreme, the dis-utility is in working, "I don't want to work", but if that's the only time you can work, why does it justify an additional payment?

PN1000

VICE PRESIDENT HATCHER: But just starting off with the premise of this, the only finding you wanted us to make about this is that in retail as a whole, 35.4 percent are aged 15 to 24 which means that 64 percent plus are not aged 15 to 24, they're older adult employees.

PN1001

MR WHEELAHAN: Yes.

PN1002

VICE PRESIDENT HATCHER: Unless - - -

PN1003

MR WHEELAHAN: No but it's one - - -

PN1004

VICE PRESIDENT HATCHER: Unless the evidence is that the casual break up is dramatically different, then we're still dealing with this as a minority of casual employees but if there's a stat which is these are predominantly casuals or something, that's what I'd be interested in.

PN1005

MR WHEELAHAN: Minority on that very statistic and if I take - because it might be open, my learned friend took you to paragraph 38 of the written submissions on behalf of the ARA and he said that these reminded him (indistinct) so it's not just young. They're more likely to be with parents, tertiary studies. We've put a number of factors and after hearing - - -

PN1006

VICE PRESIDENT HATCHER: But they're all overlapping characteristics.

PN1007

MR WHEELAHAN: Yes, but after hearing my learned friend's attack on that paragraph, probably in drafting sub‑heading (i) and (j) should have been read together and clearly I've conveyed that (i) is a stand-alone factor whereas really all those factors are pointed out because it ties into this argument about well what is the dis-utility? If a significant part of casual employment are people who say "I want to be casual. I want to work on Saturdays. I want to work on weekday evenings" and they've known and accepted for the last five years the current state of play as to the penalty payment they may or may not get for working at those times and remember, that's the whole purpose of the payment.

PN1008

It's a penalty payment for the dis-utility and then what we've tried to do is say well - and my learned friend says well hang on if you've got a casual employee who is sitting beside a permanent employee, they're doing the same work at this time, they should both get the same penalty and our argument, if you like, which hopefully comes through the submissions, is that well casuals are a different class of employee, they are a different type.

PN1009

They are generally not working full time hours and, as I said, then I'm really reverting these factors in (i) and (j) and then that's why we had the evidence of Dr Sands, albeit that in the very short timeframe unfortunately he had to prepare the report he did miss and could not get those under 18 but, Vice President, you pointed out that that, in all likelihood, whether you put it to me or my learned friend, would probably inflate the figures in favour of the submissions that I'm making.

PN1010

VICE PRESIDENT HATCHER: Well with respect to Sundays, once the transitional provisions are worked through, the landing place will be that the loading for Sundays, excluding the casual loading, will be equal for casuals and permanents.

PN1011

MR WHEELAHAN: On a Sunday, yes.

PN1012

VICE PRESIDENT HATCHER: On a Sunday.

PN1013

MR WHEELAHAN: Yes, it will.

PN1014

VICE PRESIDENT HATCHER: What's the logic of saying that the dis-utility for Saturday is different for casuals than for Sunday. That is, there is no distinction on Sundays but there would be a distinction on Saturdays.

PN1015

MR WHEELAHAN: Yes, so the logic starts with the status quo then the logic then is support by evidence, positive evidence, that we put before the Commission, primarily Dr Sands to start with, and then we've got positive evidence from actual owners of retail stores and positive evidence from actual employees.

PN1016

VICE PRESIDENT HATCHER: To what effect?

PN1017

MR WHEELAHAN: Pardon?

PN1018

VICE PRESIDENT HATCHER: To what effect?

PN1019

MR WHEELAHAN: To the effect that the casual staff are quite content to work those times, so it goes to the dis‑utility, and they may, in fact, even work more hours on Saturdays, I think Dr Sands has that, and essentially the evidence that we've put forward supports the status quo.

PN1020

VICE PRESIDENT HATCHER: I thought Dr Sands landed at saying Saturday had the highest dis-utility of any time of the week.

PN1021

JUSTICE ROSS: Yes.

PN1022

MR WHEELAHAN: He did, he did. I'll get to that. But again, it's a status quo that the payments they've had, and they've had for five plus years - - -

PN1023

JUSTICE ROSS: What's the significance of this five plus years that you are referring to?

PN1024

MR WHEELAHAN: It's just when the - after the exposure draft was put out, so it's just a timeframe that it's applied. I might have it wrong, your Honour. It's eight years, sorry, or five plus, I'm told it's eight. Our case is that - - -

PN1025

JUSTICE ROSS: But part of that is - - -

PN1026

MR WHEELAHAN: Pardon?

PN1027

JUSTICE ROSS: Well part of that, I suppose, is the penalty rate case took so long and then this case was delayed while the judicial review was occurring and then there was a further delay at the request of the parties for the filing of materials, so I'm not sure - - -

PN1028

MR WHEELAHAN: Well let me side-step that difficult issue, or finish addressing it, unless you want me to say anything further about it. The other issue about this, about there being no negative consequences, the evidence we've led is that there will be negative consequences if the rate for casuals is increased as the SDA propose and that will be a reduction in hours and/or reduction in employment, and I might say, no doubt, your Honour, it was pleasing to hear, when the witnesses were cross-examined, "Well what did you do with your Sunday cut that the Commission gave you?" and the evidence from, I think, two or three witnesses "Well we've actually increased hours. We've used those savings to provide more work for employees".

PN1029

When one starts talking about well what's the logic, one can easily interpolate that the logic is if you grant the SDA's application, the evidence from the retail employees that have come before you is that that is going to result in a reduction of hours and/or staff and that goes against the industrial merit of granting the SDA's application.

PN1030

VICE PRESIDENT HATCHER: But isn't the analysis a two step process, just talking about Saturdays for the minute, that first of all you work out what is the appropriate loading to represent the level of dis-utility, if any, on Saturdays for casuals, that's the first step, and second, if the outcome is that it should be higher, then how do we handle the commercial and economic consequences of implementing that? Isn't that the way to approach it?

PN1031

MR WHEELAHAN: Well the approach is as set out in the principles document that you gave to us and then you have to take account a number of factors not just simply look at "I need to have a look at what the loading should be to compensate for the dis-utility of working on Saturday". The second issue that you've put to me then goes to essentially transitional provisions, that the Commission might decide that well we will increase the rates on Saturday and weekdays but we'll ameliorate it through a transitional process.

PN1032

JUSTICE ROSS: Just while we're on the transitional process, what do you say should be the, if any, transitional process in relation to your claim for shift workers and what do you say, if we are minded to grant the claim in relation to either or both of Saturday and late night penalties, what should the transition look like for that?

PN1033

MR WHEELAHAN: Presently, as in the penalty rates case, we dealt with that as a secondary issue, so I can't, on my feet now, tell you what is proposed on behalf of my client as transitional provisions but if you wish that to be answered at the same time as the first question - - -

PN1034

JUSTICE ROSS: Sure, that's fine. Yes, each of you can address that question at the same time, that's fine.

PN1035

MR WHEELAHAN: Yes. I will hand up two documents to each member of the Bench. The one I have in front of me is the first one, is titled "Transcript summary," and the first dot point says, "ARA witnesses, the profile of casual employees."

PN1036

JUSTICE ROSS: Yes.

PN1037

MR WHEELAHAN: And then the second issue about whether the disutility, so essentially the questions that have been asked of me orally today. What we've attempted to do in the time between yesterday and now is extract the evidence that supports those contentions and/or might be against us, so we've tried to be fair in the adoption of some of my learned friend's excellent points that he might have extracted from some of our witnesses, to try and be fair in the summary, but probably a little bit - - -

PN1038

JUSTICE ROSS: No, thank you.

PN1039

MR WHEELAHAN: Yes. And without reading it, to provide emphasis some passages will be underlined.

PN1040

JUSTICE ROSS: Yes.

PN1041

MR WHEELAHAN: The second document, again going to evidence, and I'll just direct - so the first one is that issue about the principles remaining the same. My learned friend is right. The calculations by various people were wrong, but the witnesses in the end said, well, that doesn't change the (indistinct) - if the cost goes up, we'll do things.

PN1042

JUSTICE ROSS: And you took them to that in re-examination.

PN1043

MR WHEELAHAN: Yes. Page 3 of this document then has the subject heading which was an issue in cross‑examination about how they dealt with the minimum wage increase in the Sunday penalty decision, and there's the references to what I've put about - they were positive results, certainly with respect to the Sunday penalty rate decision, and it's on that basis that I made the submissions that I did before, evidentiary basis. On page 5 I've then dealt with Professor Borland's evidence, and the submission with respect to his is it's a question of reliability given that the assumptions he made are just compounding assumptions, and he certainly made concessions about absence of data, which is a recurring theme, if you like, and therefore he has had to make various assumptions. He has a formula which, when you go through his answers, I'm still not quite sure - sometimes he says there is a formula and other times he says there is no formula, which again is an issue going to the reliability of his evidence. So I've highlighted some of those passages and extracted those for the Full Bench, and no doubt you'll recall when I took him to that table, in line with the previous paragraph it didn't add up, and both parties have had issues with the mathematics of their witnesses and having them - - -

PN1044

JUSTICE ROSS: You're in a position to give an actual - - -

PN1045

MR WHEELAHAN: Sorry, I - - -?

PN1046

JUSTICE ROSS: Your employer witnesses were in a position to give an actual precise number but didn't do so, because they had all the relevant data. They could have actually worked it out precisely.

PN1047

MR WHEELAHAN: Yes. They did the best they could, and under cross‑examination - - -

PN1048

JUSTICE ROSS: I don't know they did the best they could. I mean, it's not that hard. The mathematics of it is fairly simple.

PN1049

MR WHEELAHAN: Well it seems the obvious error they made is they didn't use the ordinary rate. They used - just got the actual - - -

PN1050

JUSTICE ROSS: No, it's not a question about the error they made in the calculation. It's that they have the information about the profitability, total labour costs - they could have provided the precise increase in labour costs and the impact on profitability.

PN1051

MR WHEELAHAN: Yes. In my submission, they don't need to for this reason. The proposition that they each put is we need to maintain this ratio. It's not a lineal function. So if we're trying to maintain it at about 10 or 11 per cent - the fact that they come here and give evidence under oath and say, well, if there is an increase in the labour costs - they don't need to disclose their profit - this means absent other measures, we are going to reduce the number of hours of staff and/or a head count cut.

PN1052

JUSTICE ROSS: But that's not actually what they've done with past increases. If you take Mr Slaughter's evidence, the 3.5 per cent, he absorbed most of that into his business.

PN1053

MR WHEELAHAN: He did, that's right, but then he squarely asked what he would do - - -

PN1054

JUSTICE ROSS: No, I appreciate he has asked what he would do, but we know what he did do.

PN1055

MR WHEELAHAN: On that particular one.

PN1056

JUSTICE ROSS: Yes.

PN1057

MR WHEELAHAN: Yes. But I think he's - I mean, it's difficult because these witnesses have given evidence about what they propose - that's other measures that they would do.

PN1058

JUSTICE ROSS: No - yes.

PN1059

MR WHEELAHAN: And the initial question is, well, they haven't come along and opened up their books and shown the profit they make and so forth, and my learned friend, mind you, didn't call for that; where you will recall in the substantive penalty rates case, whenever these matters were at issue, Mr Moore of Queen's counsel, now his Honour, would call for the documents. No such call was made, and my submission and why we did not then go and get that is that the principal reason for their evidence goes to the heart of this issue that if there's an increase, more likely than not hours of casual employees will be cut. For example, I think Ms Nelson's supermarket - in any event, it's in my table, and that is their evidence. They will, absent other measures, cut hours, and I think that's a reasonable finding for the Bench to make, rather than simply say I think all increases to casual penalties will be absorbed.

PN1060

JUSTICE ROSS: Just while we're on the evidence, can I take you to paragraph 69 of your submissions?

PN1061

MR WHEELAHAN: My primary submissions?

PN1062

JUSTICE ROSS: Of 23 July.

PN1063

MR WHEELAHAN: Yes.

PN1064

JUSTICE ROSS: What evidence are you relying on in support of proposition (a)?

PN1065

MR WHEELAHAN: If it withstood cross-examination, if I take it on notice, it could only be Dr Sands, albeit now we have a limitation on Dr Sands's evidence.

PN1066

JUSTICE ROSS: Yes.

PN1067

MR WHEELAHAN: That there were no under 18s.

PN1068

JUSTICE ROSS: All right.

PN1069

MR WHEELAHAN: Anecdotally, without going back to that, an example was the - some of the - he has this issue with the quantitative and qualitative data. I've put this in the written documents I've given to you. The issue with the qualitative, it's the themes that they extract, and one shouldn't say, well, this particular line for a particular person doesn't match the theme. He made it clear in evidence that that's not the issue. They've just tried to pluck sentences that reflect the theme. If they don't quite reflect the theme, we should still rely on the theme. If the Commission pleases, those are the submissions.

PN1070

JUSTICE ROSS: Just while I've got you with that submission of that date, can I take you - I didn't quite follow paras 51 and 52 - can I take you to that, Mr Wheelahan? You see, at 51, you set out an extract from the Productivity Commission report where they're making the observation that current pay levels set for casuals may not take into account the generally lower average skills and experience of those employees, and I'm not sure whether I'm reading paragraph 52 correctly. But as I understood what you're saying in 52, well, the Productivity Commission is not right about that to this extent, that the rates of pay for casuals, or the casual loading, doesn't deal with the question of skills and experience.

PN1071

MR WHEELAHAN: Yes, we disagree.

PN1072

JUSTICE ROSS: Yes, that's dealt with by the classification structure.

PN1073

MR WHEELAHAN: Yes.

PN1074

JUSTICE ROSS: And experience, I suppose, is the junior rates are a proxy in some ways for that.

PN1075

MR WHEELAHAN: Yes. So in the filed submissions of the SDA, initially that was one of their points that, you know, how can this be so, and so in our submissions we say, well, no, we're not running this case - - -

PN1076

JUSTICE ROSS: Yes, you're not running that point. No, no, that's fine.

PN1077

MR WHEELAHAN: No, we're not running that point.

PN1078

JUSTICE ROSS: Paragraph 32, just the last sentence and the answer to this may be it's in the Commission document. Those participants in the retail labour force who are employees, about 36 per cent are casuals.

PN1079

MR WHEELAHAN: Well that will be included no doubt in the note that you've asked us to prepare about the percentages.

PN1080

JUSTICE ROSS: Yes, right. All right.

PN1081

MR WHEELAHAN: Well sorry, the note you asked was different, it was about shift workers.

PN1082

JUSTICE ROSS: Yes, that's right, yes.

PN1083

MR WHEELAHAN: Yes, so that was a different point.

PN1084

JUSTICE ROSS: Look, I'm happy for you to - - -

PN1085

MR WHEELAHAN: We'll just check the note, it may - - -

PN1086

JUSTICE ROSS: No, no, that's fine.

PN1087

MR WHEELAHAN: Yes, thank you.

PN1088

JUSTICE ROSS: It's really just the source for that percentage, that's all.

PN1089

MR WHEELAHAN: A source, right.

PN1090

JUSTICE ROSS: I think it might be the - there was something similar in Professor Borland's report but I think it's from the labour force but I'm not - I just wasn't sure, that's all.

PN1091

MR WHEELAHAN: It will probably be in the penalty rates case decision but we'll provide the footnote.

PN1092

JUSTICE ROSS: Could be but I can't remember. All right, thank you, Mr Wheelahan.

PN1093

MR WHEELAHAN: Thank you.

PN1094

MR FRIEND: There is a - one of those papers from Professor Borland that I tendered through him was some parliamentary paper.

PN1095

JUSTICE ROSS: Probably the Hilda - - -

PN1096

MR FRIEND: I think that's January this year so it's probably the most recent for that data.

PN1097

JUSTICE ROSS: Yes, yes. No, it probably is the - although, yes, it's based on earlier data but it's a more recent paper, yes.

PN1098

MR FRIEND: Yes, so it will give you the data if that's what's looked for.

PN1099

JUSTICE ROSS: Right.

PN1100

MR FRIEND: I don't have anything in reply except to just clarify and make sure that I've understood what you seek in relation to the shift workers. The number of shift workers in the industry and was there - - -

PN1101

JUSTICE ROSS: Anything you know about them really. Look, it may be and it's difficult to be more precise with the question and I apologise for that but it may be that the SDA's aware of - they have some members who are shift workers that work in a particular - for a particular employer, well that would be - rather than just the number it would be of assistance if we knew anything about them. Anything that you know about them, I don't expect you to conduct a survey.

PN1102

MR FRIEND: Yes, well that's the - - -

PN1103

JUSTICE ROSS: Anything that you can readily identify about them.

PN1104

MR FRIEND: Right, well we'll do what we can in relation to that.

PN1105

JUSTICE ROSS: Thank you.

PN1106

MR FRIEND: We'll work out a speedy timetable if the Commission's content with that.

PN1107

JUSTICE ROSS: Yes, no, that's fine, we're content to leave that with you. Thanks, Mr Friend.

PN1108

MR FRIEND: Thank you.

PN1109

JUSTICE ROSS: Anything further? No. Thank you both very much. We'll adjourn and reserve.

ADJOURNED INDEFINITELY [3.02 PM]