PN1

JUSTICE ROSS: Can I have the appearances in Sydney, please.

PN2

MR A KENTISH: If it pleases, Kentish, initial A. I appear on behalf of the CFMMEU Mining & Energy Division.

PN3

JUSTICE ROSS: Thanks, Mr Kentish. No need to stand, it's all right.

PN4

MR S CRAWFORD: If it pleases the Commission, Crawford, initial S, from the Australian Workers Union.

PN5

JUSTICE ROSS: Thank you, Mr Crawford.

PN6

MR B FERGUSON: If it please the Commission, Ferguson, initial B, with Mr Bhatt, initial R, and the Australian Industry Group.

PN7

MS A AMBIHAIPAHAR: May it please the Commission, Ambihaipahar, initial A, on behalf of the CEPU.

PN8

MR S HOWE: Your Honour, Howe, initial S, for the AMWU.

PN9

JUSTICE ROSS: Thank you. And in Canberra?

PN10

MR S HARRIS: Your Honour, Harris, S, from the Pharmacy Guild.

PN11

JUSTICE ROSS: Thank you. So the statement published on 13 December was an effort to try and crystallise the issues in relation to 11 of the tranche 1 awards where there may be an ambiguity from the interaction between the terms dealing with shift loading and the annual leave loading of those awards. Because it's desirable if these matters are concluded before the tranche 1 variations are made. So a number of options were put forward in relation to those awards, as a means of really focussing everyone's attention on the problem.

PN12

We had left the matter where before this statement the matters were simply to be determined by the Bench on the papers. But I thought it would be useful to at least canvass some options, give you an opportunity to say what you wanted to say about those, and then we'll make a decision in relation to the issue.

PN13

The AWU has provided a response in relation to the four awards in which it has an interest:- Cement, Lime & Quarrying; Electrical; Power; Premix Concrete; and Seafood Processing, so I think I'll deal with those matters first. If we go to Cement, Lime & Quarrying first, what do you say about that, Mr Crawford?

PN14

MR CRAWFORD: Your Honour, the primary concern we were trying to address was the second dot in clause 22.3(b)(ii).

PN15

JUSTICE ROSS: Just bear with me for a moment. Have you got a copy of that, Mr Ferguson?

PN16

MR FERGUSON: Yes.

PN17

JUSTICE ROSS: Fine. Yes, sorry.

PN18

MR CRAWFORD: Yes, so we were just - - -

PN19

JUSTICE ROSS: The second dot point, yes.

PN20

MR CRAWFORD: Yes, that begins with the penalty rate the employee would have received. So I guess the concern was that might be interpreted as the, you know, 15 per cent, 30 per cent, or 50 per cent penalty rate, for example, and not as, I guess, that penalty rate in addition to what you would earn for working ordinary hours.

PN21

JUSTICE ROSS: Yes.

PN22

MR CRAWFORD: So the amendment we have proposed is primarily intended to address that issue, by stating, "the amount the employee would have earned for working their normal hours, including penalty rates but excluding overtime."

PN23

JUSTICE ROSS: Can you just read that again?

PN24

MR CRAWFORD: "The amount the employee would have earned for working their normal hours, including penalty rates but excluding overtime."

PN25

JUSTICE ROSS: The problem with that is that would include their base rate, plus penalty, which would always be greater than the 17 and a half per cent. What we're trying to do is compare the 17 and a half per cent with the shift penalty.

PN26

MR CRAWFORD: Sorry, your Honour, I might be a bit slow this morning but I missed that.

PN27

JUSTICE ROSS: I see what you mean. Because of the language and the introduction to 1, dot point 1. Yes. No, I follow. Okay.

PN28

MR FERGUSON: Your Honour, could I raise one general issue that I think might infect a few.

PN29

JUSTICE ROSS: Yes.

PN30

MR FERGUSON: And I've taken these things � we appreciate what was trying to be done with the approach of adopting annual rates.

PN31

JUSTICE ROSS: Yes.

PN32

MR FERGUSON: But I think that raises an issue potentially about compliance with the NES, in the sense that depending on how the particular clauses are framed, if you prescribe an annual rate as being an amount that they would normally receive under the award and so forth, plus various penalties or excluding other penalties and so forth - - -

PN33

JUSTICE ROSS: Where do we say, "annual rate"?

PN34

MR FERGUSON: So the annual leave rate at paragraph 22.3(b).

PN35

JUSTICE ROSS: Yes, all right.

PN36

MR FERGUSON: And I suppose if you think about this from the example that you've put out at the start of your statement, conceptually, if you prescribe a rate rather than a separate loading component there's a risk that the rate, if it's calculated by reference to award rates, will be lower than the base rate that people actually receive as a matter of fact when you include over award components. So that then leaves the risk that the award says you have to be paid a rate which is below the base rate, which people were satisfied by paying the base rate under the NES, but you will no longer have a separate obligation to pay an additional loading on top of the base rate, which means people will actually go backwards. Which means, I think this approach of the annual rate - - -

PN37

JUSTICE ROSS: Won't work.

PN38

MR FERGUSON: Won't work.

PN39

JUSTICE ROSS: Yes, all right. Okay - - -

PN40

MR FERGUSON: Which we can then try and dig through it all and so forth but I just wonder whether that sort of overtakes everything. I must say, we've gone through in the time allowed and tried to work out all the problems but I'm not sure whether - - -

PN41

JUSTICE ROSS: The difficulty is there doesn't seen to be a single solution to every modern award.

PN42

MR FERGUSON: I don't think there is.

PN43

JUSTICE ROSS: We've tried that with either your proposal or ABI's proposal. I'm sorry, Ms Thompson, I should have picked you up. You're on the phone, I gather.

PN44

MS K THOMSON: Yes, I am, your Honour, sorry.

PN45

JUSTICE ROSS: And neither seems to work. Nor does the CFMMEU's proposal work across all awards, nor do any of the other proposals attract any majority view. Look, Ai Group raised this originally, and I'm not saying this as a criticism, Mr Ferguson, though � and I think it seems that not every award party is as concerned about it as you are, in relation to the ambiguity potential question. So I think the best course is to provide parties with an opportunity to file an application to vary, file it as soon as you like. There may be a period of time between when the variation determinations operate and when it's deal with but if it's an ambiguity it will be made retrospective to the date of when the ambiguity is said to arise anyway.

PN46

MR FERGUSON: Yes.

PN47

JUSTICE ROSS: So I don't think there's any vice flowing from that.

PN48

MR FERGUSON: No.

PN49

JUSTICE ROSS: And I understand the point you raise but I doubt in practice whether we're going to have a flood of people being paid an amount well in excess of their shift premium, in lieu of the 17 and a half per cent in the period that it's - - -

PN50

MR FERGUSON: I suspect that's right.

PN51

JUSTICE ROSS: Yes. But look, I take the point. It may in some awards create some confusion and it's best addressed. But I just don't see a general way of doing that.

PN52

MR CRAWFORD: Your Honour, could I just clarify the AiG's concern, is it the rate that the loading, the 17.5 per cent, is applied to, or is it generally the rate received for annual leave?

PN53

MR FERGUSON: My concern is about one of the solutions in the sense that I think when we talked about � if you change it from a loading which is a separate amount that's payable on top of whatever else is payable - - -

PN54

JUSTICE ROSS: Yes.

PN55

MR FERGUSON: To a prescribe rate, if that prescribed rate is calculated by reference to, say, the minimum award rates in any way, you might end up with an outcome that is lower than the base rate paid to an employee, if that makes sense.

PN56

MR CRAWFORD: Well, we certainly didn't understand the words, "the amount the employee would have earned for working their normal hours", to mean the base rate. We understood that would be capped to above award rates. So there may be an issue about the loading because a number of these provisions refer to 17.5 per cent of the employee's minimum weekly rate prescribed in the relevant clause. But that is what's contained in the current award. That's why we've left that in there.

PN57

MR FERGUSON: Yes. That's why I think there are all sorts of nuances to this, as your Honour has put, between difference awards.

PN58

JUSTICE ROSS: Yes. No, I agree. I think there are likely to be all sorts of nuances to it. And it doesn't seem like the solutions that have been put forward again are going to attract a consent resolution, so - - -

PN59

MR FERGUSON: And I understand what you're saying, that any applications would be framed by reference to the new versions of the awards.

PN60

JUSTICE ROSS: Yes. Yes. And, look, you know, you can file that whenever you like.

PN61

MR FERGUSON: Yes.

PN62

JUSTICE ROSS: It's not � we'll waive whatever needs to be waived in compliance with the rules. We understand what you'd be seeking to do. That is, to vary the award as it will operate from the date on which the variation determinations for the tranche 1 awards will come into operation. And there's obviously liberty to any party to do that and have the debate out then. But I think for the Full Bench to deal with it in the abstract, bearing in mind that all parties seem to be of the view that an award by award approach is necessary, for us to try and craft an award by award solution without having given the parties the opportunity to comment on what we might end up with, I don't think is a very sensible way of proceeding. So if you can each give some consideration to that and if you feel it's necessary in relation to the awards that you have an interest in, then file those applications and we'll deal with them likely in February. So there will be a period where they may operate with a degree of uncertainty but as I say, they can be addressed quickly, and in any event it's unlikely to be a practical problem.

PN63

MR FERGUSON: And just, and I'm just thinking this through, the issue about retrospectivity should it arise. And I suppose the other point, there may be an ambiguity, or it may be that, well, certainly the intent of the Bench in the decisions they're making to issue the new versions of the award is not to change people's entitlements.

PN64

JUSTICE ROSS: That's right.

PN65

MR FERGUSON: So it may be that the interaction is an error in the sense.

PN66

JUSTICE ROSS: Well, either way.

PN67

MR FERGUSON: Yes.

PN68

JUSTICE ROSS: I mean, it creates an uncertainty. That's a word of - - -

PN69

MR FERGUSON: Broad - - -

PN70

JUSTICE ROSS: Indefinite meaning, so I'm not that trouble by how we might find a solution to the problem.

PN71

MR FERGUSON: Yes.

PN72

JUSTICE ROSS: But I think that's the best way of dealing with it and I think, you know, the idea of filing submissions, giving people an opportunity to reply and somehow hearing it in January, just seems like cruel and unusual punishment. And I think given, as we've seen this morning, given the way that these issues can give rise to unintended consequences it's best that people have an opportunity to properly consider the position and then come along and argue it. Anyone want to say anything further? Sorry to drag you in.

PN73

All right, that's the course we will adopt. I'll issue a short statement to that effect. I won't put any timelines around when you need to file the application, et cetera. You can do that as you see fit and as your resources permit. We'll endeavour to, once we receive any applications we'll issue short directions that will simply provide for the filing of submissions in support, and any submissions in opposition, and then a short oral hearing. Okay. There will be liberty to apply in relation to those directions. Thanks for your attendance. I'll adjourn.

ADJOURNED INDEFINITELY�� [9.30 AM]