PN1

DEPUTY PRESIDENT ASBURY: Good morning. Can we just start by taking the appearances.

PN2

MS A AMBIHAIPAHAR: May it please the Commission, A Ambi, from the CEPU.

PN3

DEPUTY PRESIDENT ASBURY: Thanks, Ms Ambi.

PN4

MS A DEVASIA: If it pleases the Commission, Devasia, A, for the AMWU.

PN5

DEPUTY PRESIDENT ASBURY: Thank you.

PN6

MR Z DUNCALFE: May it please the Commission, Duncalfe, initial Z, for the Australian Workers' Union.

PN7

DEPUTY PRESIDENT ASBURY: Thank you.

PN8

MR S SMITH: If it pleases the Commission, Smith, initial S, of the Australian Industry Group with Harrington, initial H, also appearing for the Australian Sugar Milling Council.

PN9

DEPUTY PRESIDENT ASBURY: Thanks, Mr Smith.

PN10

MR B ROGERS: If it please the Commission, Rogers, initial B, for the National Farmers' Federation.

PN11

DEPUTY PRESIDENT ASBURY: Thanks, Mr Rogers. Mr Rogers, if it's more convenient, it might be better for you to stay seated because when you're standing up, the microphone is a little bit far away from you.

PN12

MR ROGERS: Thank you, your Honour.

PN13

DEPUTY PRESIDENT ASBURY: We're happy for you to stay seated throughout the proceeding. I think that will be easier.

PN14

MR ROGERS: Thank you.

PN15

DEPUTY PRESIDENT ASBURY: Thank you. As I understand it, we have agreement on a significant number of matters, so, perhaps, it might be useful if we outline what those - if the parties outline what those matters are because I think there's a number of draft determinations. There's not a single consolidated one, is there, in relation to all the agreed matters?

PN16

MS AMBIHAIPAHAR: That's correct.

PN17

MR DUNCALFE: Your Honour, Duncalfe, initial Z, for the Australian Worker's Union. So, the Australian Workers' Union did submit a consent position along with the draft determination that contains the suggested changes for every consent position bar the tool allowance.

PN18

DEPUTY PRESIDENT ASBURY: Tool allowance, yes.

PN19

MR DUNCALFE: Because we allowed the parties that were involved in that discussion to file their own draft determination in relation to that issue.

PN20

DEPUTY PRESIDENT ASBURY: Yes, yes. Mr Smith?

PN21

MR SMITH: Yes, your Honour. We've considered the document that the AWU has filed.

PN22

DEPUTY PRESIDENT ASBURY: Yes.

PN23

MR SMITH: And we don't have any issues with the description of all of the issues that have been resolved and which are outstanding. So, the only issue that is outstanding that we now have a significant interest in is the tool allowance issue. But the Australian Sugar Milling Council, who we also appear for today, has been involved in discussions on a number of those issues, but as set out in the AWU's document is happy with the outcome as described there.

PN24

DEPUTY PRESIDENT ASBURY: So, the only outstanding issues, as I understand it, are the CEPU's issue with the tool allowance for apprentices.

PN25

MR SMITH: Yes.

PN26

DEPUTY PRESIDENT ASBURY: And they're issues about the value that's to be deducted in the event of the apprenticeship ceasing.

PN27

MR SMITH: Yes, that's the only outstanding issue that either AI Group or the Sugar Milling Council has been involved in. There's still the outstanding issue, as we understand it, between the NFF and the AWU about the piece worker rates.

PN28

DEPUTY PRESIDENT ASBURY: And that outstanding issue is basically whether the casual loading compounds the piece work rate, as I understand it.

PN29

MR SMITH: I'd best leave that to Mr Rogers.

PN30

DEPUTY PRESIDENT ASBURY: Is that the case, Mr Rogers? That's the only outstanding issue?

PN31

MR ROGERS: That's the only outstanding issue we have, yes, your Honour.

PN32

DEPUTY PRESIDENT ASBURY: Mr Rogers, is it possible for you to move that microphone a bit closer or for you to move closer to it?

PN33

MR ROGERS: Does that help, your Honour?

PN34

DEPUTY PRESIDENT ASBURY: That's better, yes, thank you. Can we turn that volume up a bit? Yes, thank you. All right. Does anyone want the lectern?

PN35

COMMISSIONER MCKENZIE: It's just behind you.

PN36

MR SMITH: I'm fine, thank you.

PN37

DEPUTY PRESIDENT ASBURY: All right. So, perhaps, then if we deal - if we deal with the tool allowance matter first and hear the submissions on that unless the parties have got a different proposal and then we'll hear the submissions in relation to the piece work issue. Is that acceptable?

PN38

MS AMBIHAIPAHAR: Yes, your Honour.

PN39

MR ROGERS: Yes, your Honour.

PN40

DEPUTY PRESIDENT ASBURY: All right. So, as the party opposing the agreed position that the other parties have come to, Ms Ambi, are you happy to outline the basis of your - we've read your written submissions, but if you'd like to speak to them and outline the basis of them and just identify when they were filed, et cetera.

PN41

MS AMBIHAIPAHAR: Yes, sounds good.

PN42

DEPUTY PRESIDENT ASBURY: Thanks.

PN43

MS AMBIHAIPAHAR: Thank you, your Honour. In respect to the submissions that CEPU filed on 20 September, the CEPU doesn't have an objection to the current form of the draft determination negotiated between AMWU and AIG. Just the two concerns in subsection (f) and (g) is in respect to the context when an apprentice is not able to finish or complete their apprenticeship, particularly in the circumstance where they didn't actually initiate it. So, that's the first issue and that, sort of, goes between subsection (f) and (g). And then the second issue is the monetary value. So, in regards to an apprentice having to pay back the retail value of the tool allowance or the package itself, so to speak, the concern is that it's not taken into consideration that the apprentice (a) was using it for the direct benefit of the employer during the time that they were working there with the employer and also taking consideration of the wear and tear of the tools.

PN44

The CEPU don't intend to file any additional information or witness statements and so forth and we support the submissions filed by the AMWU in respect to the tool allowance for apprentices. But if we're relying on those submissions provided from AMWU in respect of fiscal hardship that they would endure entering the workforce as a low paid worker, it could be also agreed that in the context that if they were to exit and having not completed their apprenticeship with the employer, particularly in the context if they didn't choose to, if it was at the initiation of the employer, that it would be unreasonable and unfair for the apprentice and that's all.

PN45

DEPUTY PRESIDENT ASBURY: So, if we accepted your proposition that with respect to the value of the tools, the market value, how would that be ascertained? What would be your proposal for how the clause would work because essentially you'd have no regulation whatsoever as to the amount.

PN46

MS AMBIHAIPAHAR: So, the example that I - the basis of our submission for the CEPU is that I work for the union, they give me a mobile phone, yes? And I use it purely for the purposes of the work that I do as an IO for the CEPU. When it comes to the time that I might leave, there's an option whether the CEPU can sell it back to me, but it would be at the price of its value by the time that I leave the CEPU.

PN47

DEPUTY PRESIDENT ASBURY: So, how would that be obtained, the value of it?

PN48

MS AMBIHAIPAHAR: So, that would be having something to do with the employer and the employee agreeing on the market value. That might be getting quotes, which is generally the case when you're looking at the value of the mobile phone or the tools at the time that the apprentice leaves would be up to the discretion of the employer and the employee coming to an agreed value.

PN49

DEPUTY PRESIDENT ASBURY: But you haven't proposed any amendments or any wording or award provisions that could give effect to that, have you, that I'm aware of?

PN50

MS AMBIHAIPAHAR: No, your Honour.

PN51

DEPUTY PRESIDENT ASBURY: Right. All right.

PN52

MS AMBIHAIPAHAR: I'm not sure also in regards to AIG said that they are opposed to the draft determination and that this was only filed a week later after they'd said they'd oppose. So, I'm not sure what their position is in regards to potentially relooking at the wording of amendments to subsection (f) and (g).

PN53

DEPUTY PRESIDENT ASBURY: Thank you.

PN54

MS AMBIHAIPAHAR: Thank you.

PN55

DEPUTY PRESIDENT ASBURY: What's the AMWU's position in relation to this matter?

PN56

MS DEVASIA: Thank you, your Honour. The AMWU's position is essentially that we agree that that was a gap that we didn't initially contemplate during the drafting of the award - of the clause. The CEPU's submissions about reimbursement in the event when it's no fault of the apprentice I think is a valid one and is something that we would support. So, that would be the amendments to clause 22.3(1)(f)(ii) where the reimbursement would occur where the employee would not be required to reimburse in the event that it's a resignation or if it's terminated for reasons of misconduct.

PN57

DEPUTY PRESIDENT ASBURY: Isn't it that the employee would be required to reimburse?

PN58

MS DEVASIA: That's correct, I'm sorry, outside of their own fault.

PN59

DEPUTY PRESIDENT ASBURY: Yes, and it wouldn't be - so, the proposal is that there would be no requirement to reimburse if the apprentice was terminated through no fault of the apprentice.

PN60

MS DEVASIA: That's correct. So, that portion of that - those amendments, the AMWU is in support of that submission by the CEPU. As to the market value of the apprentice tool pack at the time of when they end their apprentice, the AMWU recognise that there is a problem with the mechanism of we would actually calculate that amount, which is why we have gone with just a blanket value of what was presented - what was provided to the employee. So, just while we agree with the CEPU that it could be improved in some way to ensure that the apprentice is not potentially out of pocket about the mechanism, it's something that we still haven't been able to nut out. And with the CEPU, the AMWU has not put forward any calculations on how that would be done. We just think that the way that the clause is phrased at the moment captures the - is the best mechanism for doing that without having any loss to the apprentice.

PN61

DEPUTY PRESIDENT ASBURY: Thank you.

PN62

MS DEVASIA: Thank you.

PN63

DEPUTY PRESIDENT ASBURY: I understand. Mr Smith?

PN64

MR SMITH: If the Bench pleases, as you will recall, we originally opposed this application and we put an alternative proposition forward that was based on the approach in the Manufacturing Award which would give people a weekly rate for the tool allowance based on a proportion of the trade rate.

PN65

DEPUTY PRESIDENT ASBURY: Yes.

PN66

MR SMITH: And the AMWU said that it wasn't happy with that approach because the practice in the industry is to give people a toolkit when they start their apprenticeship and there seemed to be some asserted view that the terms of the Queensland tool order, the state tool order had some practice, you know, in the industry in Queensland. Now, we checked with some of the major players and, yes, it is correct that there is a practice amongst some of the companies to provide a generous toolkit at the start of the apprenticeship. So, in working through the issues, we eventually arrived at an agreed clause with the AMWU that is loosely based on the Queensland State Supply of Tools to Apprentices Order and that's where the figures of $1,800 and those other figures in the table come from.

PN67

You know, we would submit that that level of tool allowance or provision of tools is quite generous and presumably it would be indexed along with other expense related allowances, which is not the way the tool order works because that $1,800 figure has been there for many years now and isn't being indexed. So, it was a package of provisions and it is of concern that the AMWU is supporting the ETU's position on any of these issues because it was a package and the words there were the outcome of a negotiation.

PN68

But when it comes to those two issues, you know, firstly, 22.3(1)(f)(ii), this is the provision that would require apprentices who do not complete their apprenticeship to either give the tools back or repay to the employer the value of the tools at the time of supply. Clearly, the apprentice has the option of just giving the toolkit back. So, it's not like they have to pay the money and the employer has provided the tools in circumstances where the apprentice has decided not to complete the apprenticeship. So, we think that is reasonable.

PN69

The second one is 23.3(1)(g) in the draft order and that would require an apprentice who doesn't complete his or her apprenticeship to reimburse the portion of any allowance paid. So, for example, if they receive the $1,800 on day 1 and they left after three years, then they would need to return the $450 that had been given in advance for the fourth year that they didn't complete. And, again, we believe that that is reasonable.

PN70

We note the submissions that the ETU has made about the effect of section 326 of the Act and the associated provision, 323. Now, as the Bench is aware, those provisions were looked at in quite a lot of detail in the plain language drafting of standard clauses proceedings, particularly as those proceedings related to the clause about notice of termination by employees, which as the Bench is aware, the clause allows the employer to make deductions from any termination pay for notice not given by an employee.

PN71

And a Full Bench headed by the President looked at that issue in great detail and in the final clause that has been determined, which is in the decision of 18 July this year, 2018 FWCFB 4177, a couple of qualifications have been now put into that clause, one being that the clause doesn't relate - or the ability to deduct doesn't relate to an employee who is under 18 years of age because of the provision in the Act that says that any deduction relating to an employee under 18, there needs to be agreement of the parent, written agreement of the parent. So, the Bench decided that that was an appropriate provision.

PN72

The other qualification that the Bench may wish to consider in the context of these proceedings is that a qualification has been put in the standard clause saying any deduction must not be unreasonable in the circumstances. Now, we're not suggesting that those qualifications need to go in this clause, but they were qualifications that that Full Bench decided were relevant in the context of a debate about what might be reasonable in circumstances of termination to make sure that the relevant clause was not of no effect because of the provisions of section 326. But we don't - you know, we just submit that for the information of the Bench. We think the outcome that has been agreed upon with the AMWU is a fair and reasonable one. The apprentice has the option of giving the tools back in that first scenario. And in the second scenario, they have actually been given a tool allowance that in the agreed clause has a quantum for each of the four years. So, it's not unreasonable when they've had the benefit of the quantum three years earlier. For the fourth year, it's a pre-payment, if you like, that they give that money back.

PN73

DEPUTY PRESIDENT ASBURY: Except, Mr Smith, is there a difficulty, though, that when you're deducting for notice not given that the employee's actually wage rate is known? The employee knows their wage rate, the employer knows the wage rate, and arguably that's a set amount that can be deducted. But with respect to this clause, as I read it, it's a maximum value. So, the employer may actually obtain the toolkit, and let's be realistic, that's what in my day, my experience in the sugar industry, that's what happened. Because of economies of scale, the employer could obtain tools cheaper than the employees could and they would provide a toolkit. So, you set the maximum retail value. What are you going to deduct? The maximum retail value or the actual price that the employer paid for the tools. And if it's the latter, should there be some requirement that that's agreed at the point the apprenticeship is entered into when this arrangement is put into effect?

PN74

MR SMITH: Your Honour, perhaps, a simpler approach would be to put a qualification in there, a bit like the other Full Bench did, just to make it clear that the deduction would need to be reasonable in the circumstances because it would get very confusing. And the thing about these words, we didn't just dream them up. They're based on wording in that Queensland State Tool Order. So, they - - -

PN75

DEPUTY PRESIDENT ASBURY: Yes, and if my memory serves me, there were different tools at different stages of the apprenticeship because - - -

PN76

MR SMITH: I think what you're thinking of is - - -

PN77

DEPUTY PRESIDENT ASBURY: There was a list or something.

PN78

MR SMITH: Yes, the table.

PN79

DEPUTY PRESIDENT ASBURY: Yes.

PN80

MR SMITH: The table had different values for whether you're a boilermaker or an electrician and so on.

PN81

DEPUTY PRESIDENT ASBURY: Yes.

PN82

MR SMITH: And that's reflected in that table with different values of tools for different types of trades.

PN83

DEPUTY PRESIDENT ASBURY: Yes. So, you think that issue could be addressed by having some wording if we were concerned that the deduction had to be reasonable in the circumstances which would catch an employer deducting the actual value in the award as opposed to the price that the employer paid for the tools?

PN84

MR SMITH: Well, we wouldn't want to necessarily put an interpretation on what that might mean, but, you know, you could have a circumstance where an apprentice was given an $1,800 toolkit and a week later, they leave, versus a circumstance where the same thing happens and they leave after three and a half years and the toolkit has been well worn. So, it's very hard to have a blanket approach to these things, but, you know, the Act does say that deductions must be reasonable. So, putting that into the clause really is just describing the effect of the Act, in our submission.

PN85

DEPUTY PRESIDENT ASBURY: I understand. And can you just tell me, the last provision in subclause (L), how would that operate where the apprentice was re-indentured with a different employer who might not be in the sugar industry or covered by the award?

PN86

MR SMITH: Again, that wording came straight out of a Queensland order, but the - - -

PN87

DEPUTY PRESIDENT ASBURY: Which had general application to all state awards, whereas this doesn't.

PN88

MR SMITH: I think in the way that it would have been intended, certainly, the way it was discussed when we were looking through that issue, it was talking about employers in the sugar industry rather than more generally. So, if that qualification was needed, then that will be fine. This is a benefit under the Sugar Award that wouldn't fit neatly with the tool allowance provisions, say, in the Manufacturing Award.

PN89

DEPUTY PRESIDENT ASBURY: Yes, yes.

PN90

MR SMITH: It just is a completely different scheme.

PN91

DEPUTY PRESIDENT ASBURY: So, all the intention is is that no one double dips. So, the second employer doesn't get to deduct the full value of the toolkit and also the second employer doesn't have to supply the full value if they've already got one.

PN92

MR SMITH: Yes, so, if one sugar mill has already given the apprentice $1,800 worth of tools, then there is no double dipping if they leave there and go to another employer.

PN93

DEPUTY PRESIDENT ASBURY: I guess I'm just concerned about how this is enforceable in circumstances where the amount of the tools that are given isn't documented or agreed anywhere before the clause operates.

PN94

MR SMITH: Well, there is an award obligation to provide tools to a retail value. So, if there was ever any dispute about that then, presumably, the employer would need to provide the evidence of what those tools cost. But we're not aware of any issue ever having come up in practice with that Queensland tool order. Not that we've had a lot of involvement with it, but it's been there for many, many years, and it seems to be well utilised in some industries that tended to be more covered by state awards than Federal in the pre-modern system.

PN95

DEPUTY PRESIDENT ASBURY: Thank you.

PN96

MR SMITH: Thank you.

PN97

DEPUTY PRESIDENT ASBURY: Is there anything that you want to say in reply?

PN98

MS DEVASIA: If I could just bring the Commission's notice to in the tools order there is a mechanism by which the employer is required to keep accurate records of the amount that they're producing - the amount that they're spending on each of the tools. So, I guess, although, we didn't adopt that straight into the allowance, that was the understanding of how those retail values would be set and how you would be able to reimburse an apprentice or vice versa should the need arise. Whether the clause would benefit from that additional note to say that you need to be able to keep records, I think, might be useful, but I'd be guided by the Commission on that.

PN99

DEPUTY PRESIDENT ASBURY: Well, again - - -

PN100

MS DEVASIA: We don't want to make it too inflexible in terms of what needs to be done by employers and employees.

PN101

DEPUTY PRESIDENT ASBURY: But Mr Smith makes a valid point which is - or a point that's got some force in my view anyway that this is a benefit that it's just in other modern awards.

PN102

MS DEVASIA: I understand.

PN103

DEPUTY PRESIDENT ASBURY: And, you know, generally, in other modern awards, they get a percentage of the trades person's allowance and they'd buy their own tools and that's the end of story.

PN104

MS DEVASIA: Yes.

PN105

DEPUTY PRESIDENT ASBURY: This is actually a benefit that's giving them a pack of tools and the employers opposed it originally and now they've agreed to it subject to some requirements that they've put in the agreed clause. And now it seems to be getting picked apart and the eyes getting picked out of the tool order which, you know, raises the issue of, well, why wouldn't we just put in what the Manufacturing Award has got.

PN106

MS DEVASIA: Which is why the AMWU would say essentially that the clause as it's drafted is a workable known quantity within the industry and if we were to insert the qualification at (L) that it is specific to the Sugar Industry Award because it is drafted that way, I think that should allay the fears of both employers and anyone else that worries that it might spread it tentacles to other awards.

PN107

DEPUTY PRESIDENT ASBURY: Thank you. Mr Smith, did you want to say anything further?

PN108

MR SMITH: No, your Honour.

PN109

DEPUTY PRESIDENT ASBURY: All right, thank you. Anyone else? I take it you don't have an interest in this point, Mr Rogers?

PN110

MR ROGERS: No, your Honour, thank you.

PN111

DEPUTY PRESIDENT ASBURY: All right. Well, perhaps, if we can deal next with the issue of the piece work allowance or piece work loading and casual loading and, as I understand it, the outstanding issue is the interaction between those two matters. So, Mr Rogers, do you want to speak to your submissions?

PN112

MR ROGERS: Yes, thank you, your Honour. So, we filed two submissions, one on 7 June and another set on 18 June.

PN113

DEPUTY PRESIDENT ASBURY: Yes.

PN114

MR ROGERS: Just in terms of housekeeping, I need to correct an error in the 7 June submissions.

PN115

DEPUTY PRESIDENT ASBURY: Yes.

PN116

MR ROGERS: In paragraph 11, we say the entitlements were not intended to be calculated separately. That line should read, "The entitlements were intended to be calculated separately."

PN117

DEPUTY PRESIDENT ASBURY: Yes.

PN118

MR ROGERS: So, there's a misplaced "not" in there. I apologise for that.

PN119

DEPUTY PRESIDENT ASBURY: All right.

PN120

MR ROGERS: The other piece of housekeeping is that when we filed our second set of submissions on 18 June, I inadvertently just scanned the first page of each cover, so, I effectively missed every second page. They were refiled on 20 June, so, hopefully you'll have the correct version there with all the pages.

PN121

DEPUTY PRESIDENT ASBURY: Can you just get a bit closer to that microphone again?

PN122

MR ROGERS: I'm sorry, your Honour.

PN123

DEPUTY PRESIDENT ASBURY: That's all right, thank you.

PN124

MR ROGERS: So, the point I was making there is that our second set of submissions which we filed initially on 18 June omitted every second page.

PN125

DEPUTY PRESIDENT ASBURY: All right.

PN126

MR ROGERS: We refiled them on 20 June with all the pages attached.

PN127

DEPUTY PRESIDENT ASBURY: Thank you.

PN128

MR ROGERS: So, I'd just like to touch on two of the submissions we have made, two key points. The first is that we say that the, sort of, conceptual basis which underpins those two loadings wouldn't point to the conclusion that they compound. So, the casual loading, which is paid, and this is expressed within the award and clause 7(3)(d)(ii) of the exposure draft, the casual loading is paid instead of entitlements to paid leave and other matters from which casuals are excluded by the terms of the award and the NES.

PN129

Now, if those two loadings compound, the position is effectively that the casual loading is increased by 20 per cent in circumstances where simply because the employee is on a piece work agreement, they haven't lost any more of those entitlements. So, we say it follows that you don't get an increase in the casual rate, the casual loading, which is paid to compensate for those entitlements simply because you're on a piece rate. It doesn't follow. The logical underpinning for payment of the casual loading just doesn't apply in these circumstances.

PN130

The second point that we have made is that at clause 7(3)(d)(iii) of the exposure draft, the casual loading is expressly not part of the all-purpose rate. And as the Bench would be aware, the all-purpose rate is the rate which is used to calculate entitlements based on the employee's ordinary rate of pay. The piece work loading is clearly based on the employee's ordinary rate of pay. It follows that the casual loading should not be included in the calculation of the piece rate and it should also be noted that clause 13(3)(a) of the exposure draft requires the piece rate to reflect overtime. If the casual loading compounds with the piece work loading then the casual loading would be factored into calculating overtime payments which, again, is inconsistent with the notion that casual loading is not part of the all-purpose rate.

PN131

In respect of the second argument, the AWU effectively says that the language of clause 13(3), that is the piece work rate provisions, require you to ignore the express statement in clause 7(3)(d)(iii) for the purposes of calculating the piece work loading. In reply to that we say firstly that the clause is imported virtually verbatim from the pre-modern award which is the Sugar Field Sector Award 2005, which did not make provision or feature the concept of casual employment or casual loading. So, we say that was the language which was used when there was no casual loading. So, when it's introduced into the modern award, it kind of introduced this notion of casual loading.

PN132

The second response is that the language of the casual loading is focussed on the employee's actual hours, not paid. Its intent is to ensure the rate is adequate to reflect the employees hours, both ordinary and overtime. And, finally, the casual loading is not payment for hours worked, which is the language of the clause. It's payment for entitlements foregone, as such, is not caught by the expression, "Payment for the actual hours worked."

PN133

So, those are our two principal submissions, your Honour. We touch on a number of other submissions in our written submissions, but I won't bore you by going to them now.

PN134

DEPUTY PRESIDENT ASBURY: Thank you, Mr Rogers. Response to that, Mr Duncalfe?

PN135

MR DUNCALFE: Thank you, your Honour. As Mr Rogers, NFF, has said, we have also filed quite thorough submissions on this matter, including reply submissions to the NFF position. But basically there are two limbs. I'll take the Full Bench through the key points on both of those limbs. Firstly, the first limb is that if the minimum piece rate for a casual worker should include the casual loading, as the NFF has said, we both agree on this point. So, therefore, in determining the piece rate for a casual employee engaged in piece work, the casual loading that the casual employee would be entitled to if they were a timed worker, must be taken into account, and both parties have agreed on that.

PN136

And also touched on by the NFF is that casual loading is payable primarily for casual employees not receiving paid leave entitlements and the NFF submission of, I believe, 8 June, also referred to a decision regarding piece workers and their entitlement to casual loading. So, that's quite well settled in terms of both the parties' perspectives.

PN137

So, we'd also like to make the point that the piece workers are entitled to paid leave under the award because they are not excluded from paid leave. The award merely speaks about the NES which only excludes casual employees, as you well know. So, a casual piece worker must be entitled to the casual loading paid in recognition of the entitlements not being payable for that type of employment. So, there was no argument on that point, but I just wanted to present that as a summation of both parties' positions on that.

PN138

So, the second limb, which is where we do find the tension between the two parties, is how the two loadings do interact. As the NFF has stated, we believe that the two loadings interact in a compounding basis. The relevant clause of the current award is 20.2 and (a) and (b) are the two, well, basically (a), 20.2(a) is the paragraph that deals with how the piece work or the piece rate.

PN139

DEPUTY PRESIDENT ASBURY: So, this is the current award rather than the exposure draft.

PN140

MR DUNCALFE: This is the current award, yes, your Honour, yes.

PN141

DEPUTY PRESIDENT ASBURY: Yes.

PN142

MR DUNCALFE: And it's 20.2(a) that actually deals with the calculation of a piece workers piece rate and it does say, "An agreement for piece work may be entered into between the employer and the individual employee for the performance of any work to be done under this award" - and this is where we believe the focus lies - "and the piece worker will receive a minimum piece work rate sufficient to equal the payment for the actual hours worked based on both ordinary time and overtime as the case may be in the relevant pay period, plus a loading of 20 per cent."

PN143

So, we submit that according to those words, the casual loading is to be treated as any other loading or penalty that a time worker is entitled to in determining the minimum piece rate for a casual employee performing piece work. This is because the casual loading does form part of the payment that the piece worker would be entitled to if they performed work as a time worker and that is what the clause determining the piece rate focusses on. It focusses on the payment.

PN144

DEPUTY PRESIDENT ASBURY: But, arguably, all that's saying is you don't absorb the piece work into the casual loading.

PN145

MR DUNCALFE: Can you - - -

PN146

DEPUTY PRESIDENT ASBURY: You put one on top of the other, but it doesn't necessarily follow that you compound them on that wording. It simply says that they receive based on the ordinary time and overtime plus a loading of 20 per cent. So, that doesn't say that the 20 per cent loading compounds the casual loading. It just says you can't say, well, they're getting 20 per cent, so, we're only going to pay a five per cent casual loading, we're going to absorb it.

PN147

MR DUNCALFE: AWU would disagree with that, with respect, your Honour, because if the 20 per cent loading is applicable to the payment that the piece worker would have received if they were a time worker. So, the 20 per cent is actually applicable to the entire amount that the piece worker would have received if the time they spent working was paid on the basis of them being a time worker. And it obviously does include overtime as the case may be quite specifically. So, we believe that this is merely a calculation and the 20 per cent is a factor of that calculation.

PN148

The calculation is how do we determine a piece rate under the award? And you determine a piece rate under the award that is sufficient enough to at least equal what a piece worker would be able to manage to achieve in terms of payment and it has to be 20 per cent above what they would have earned if they performed that same amount of work as a time worker. So, that would include all relevant loadings as a time worker. So, it would include their casual loading because the casual loading is a payment that a time worker does receive and also it would include overtime because that is what a time worker does receive. So, the 20 per cent loading is payable on the basis of a 20 per cent increase of what a time worker would have received over the period of time that the piece worker performed their piece work.

PN149

DEPUTY PRESIDENT ASBURY: But the time worker would not have received overtime on the casual loading because it's not all-purpose.

PN150

MR DUNCALFE: That is true, your Honour, but with the casual loading itself being a payment that they do receive, the 20 per cent would, therefore, be necessarily calculated on top of the 25 per cent of the casual loading.

PN151

DEPUTY PRESIDENT ASBURY: I understand your submission, thanks.

PN152

DEPUTY PRESIDENT ANDERSON: Mr Duncalfe, likewise, I understand what you're saying about clause 20.2(a) of the current award. But this proceeding is not an interpretation proceeding. This proceeding is about what the award should provide for at least going forward. So, what do you say is the industrial merit in compounding the loadings?

PN153

MR DUNCALFE: Thank you, your Honour.

PN154

DEPUTY PRESIDENT ANDERSON: Why is that an issue? From an issue of fairness, why do you say that is how the award should apply and then drafted?

PN155

MR DUNCALFE: Thank you, your Honour. In the AWU's submission, because of how the piece worker loading is conceptualised and applied to a time worker's payment that they would receive, the 20 per cent piece worker loading should just be calculated on what they have received as payment and the merit in that would be that the calculation and the elements of that calculation and the 20 per cent loading itself is there to ensure that a piece worker is not disadvantaged in any way in their employment.

PN156

So, we have approached this issue as a matter of interpretation because we have not advanced any changes to this award. It's been referred to the substantive Full Bench not on our motion and, so, we have approached this an issue of interpretation and not of a position of any changes that we're seeking in the award. So, I'm not prepared to. I could propose some changes to clause 20.2(a) in the current award to reflect our interpretation of that clause to ensure that the loading is calculated according to how we believe it is done in the industry and how it is also supposed to be done.

PN157

But the 20 per cent piece worker loading itself is meant to compensate an employee for working on that basis and to ensure that they don't suffer any detriment by undertaking that type of employment.

PN158

DEPUTY PRESIDENT ASBURY: Well, if you take the types of piece workers, though, you could have a piece worker who is not a casual employee - - -

PN159

MR DUNCALFE: Yes, your Honour.

PN160

DEPUTY PRESIDENT ASBURY: - - - who gets annual leave, paid leave.

PN161

MR DUNCALFE: Yes, your Honour.

PN162

DEPUTY PRESIDENT ASBURY: That employee doesn't get more paid leave because they're a piece worker. They get the same amount and they get the 20 per cent loading in addition to what they would have earned in ordinary time and overtime. So, they don't get anything additional for their leave, so, why should an allowance that compensates for paid leave be increased for a casual piece worker?

PN163

MR DUNCALFE: On the basis of that, our submission is it is an interpretative position that we have taken and I am not prepared to make any submissions on whether the 20 per cent loading actually applied on a compounding basis on top of the 25 per cent casual loading has merit in terms of if it is over compensating the employee.

PN164

DEPUTY PRESIDENT ASBURY: So, when you say you're not prepared to make submissions does that mean you haven't had an opportunity to consider whether you want to make submissions on that or you just don't want to make submissions on that even if we gave you a further opportunity?

PN165

MR DUNCALFE: Your Honour, I haven't had a chance to address that line of argument, but I don't think we would be able to make any more thorough submissions than what we already have on this matter.

PN166

DEPUTY PRESIDENT ASBURY: Thank you.

PN167

MR DUNCALFE: Thank you, your Honour.

PN168

DEPUTY PRESIDENT ASBURY: Sorry, do any of the other parties have anything? You don't want to make any submissions in relation to this point?

PN169

MR SMITH: No, your Honour.

PN170

DEPUTY PRESIDENT ASBURY: Mr Rogers, do you have anything in reply?

PN171

MR ROGERS: No, thank you, your Honour.

PN172

DEPUTY PRESIDENT ASBURY: All right. Are there any other matters that we need to address?

PN173

MR SMITH: No, not from us.

PN174

DEPUTY PRESIDENT ASBURY: All right.

PN175

MR SMITH: Thank you.

PN176

DEPUTY PRESIDENT ASBURY: Thank you for your submissions. We will reserve our decision and we'll issue it in due course. Thank you.

ADJOURNED INDEFINITELY [11.01 AM]