TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009                                       1053675

JUSTICE ROSS, PRESIDENT
DEPUTY PRESIDENT KOVACIC
COMMISSIONER HAMPTON

AM2014/47

s.156 - 4 yearly review of modern awards

Four yearly review of modern awards

(AM2014/47)

Security Services Industry Award 2010

Dredging Industry Award 2010

Marine Towage Award 2010

Maritime Offshore Oil and Gas Award 2010

Ports, Harbours and Enclosed Water Vessels Award 2010

Professional Diving Industry (Industrial) Award 2010

Seagoing Industry Award 2010

Sydney

9.34 AM, FRIDAY, 1 JULY 2016

PN1

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

PN2

MR M ROBSON:  Robson, initial M, for United Voice.

PN3

JUSTICE ROSS:  Thank you, Mr Robson.  In Perth?

PN4

MS S PEDLOW:  Sally Pedlow, HR manager for the applicant, MSS Security.

PN5

JUSTICE ROSS:  Thank you.  Ms Pedlow, if we can start with you.  We have the submissions from MSS of 30 January 2016 in relation to the changes that you seek regarding the model cashing out of annual leave clause in the Security Services Award.  In essence, they are to remove the requirement in the model term that the agreement between the employer and employee state the payment to be made to the employee and the date on which the payment is to be made.  You have identified the reasons why you seek that change.  Is there anything you wish to say in addition to what you have put in writing?

PN6

MS PEDLOW:  No, Commission.

PN7

JUSTICE ROSS:  All right.  Can I ask you some questions about your submission.  You indicate at paragraph 15 - can I take you to that.

PN8

MS PEDLOW:  Yes.

PN9

JUSTICE ROSS:  You say that the changes you're seeking remove requirements which "are unnecessary due to other terms within the award."  Do you see that?

PN10

MS PEDLOW:  Yes, I note that clause.

PN11

JUSTICE ROSS:  What are the other terms within the award which you say make the provisions you're seeking removed from the model cashing out clause unnecessary?

PN12

MS PEDLOW:  Our submissions, your Honour, were prepared by somebody that has now left the business.  With reference to that particular one, I am aware that the clause referred to is with respect to annual leave and payment of annual leave when an employee is taking annual leave.  It does provide, you know, the guidelines or requirements as to how that is paid, so I believe that is what that's referring to there.

PN13

JUSTICE ROSS:  Just bear with me for a moment.  That is clause 24 of the award.  Which part of that is relevant?

PN14

MS PEDLOW:  It might be 24.4 of the award.

PN15

JUSTICE ROSS:  Yes, but how does that bear on the cashing out of annual leave?  It provides for payment when an employee takes annual leave.

PN16

MS PEDLOW:  Yes, and I think the comparison may have been drawn that perhaps if an employee were cashing out leave, the same method might be applied to calculate the annual leave, if that makes sense.  However, if that's not the intent, then perhaps that particular part of paragraph 15 of our submissions might be withdrawn.

PN17

JUSTICE ROSS:  All right.  For my part, I'm not sure that 24.4 would have any application to the circumstances where leave is cashed out, at least insofar as the matters that you're seeking to remove are concerned.  Can I go to the heart of the concern.  It seems to be that the model clause, on your submission, creates a practical difficulty having regard to the way in which you currently administer applications by employees to cash out amounts of annual leave.

PN18

You indicate that it would require additional steps in the process for you to determine the amount of money that is required to be paid to the employee and also trying to identify the date on which that payment would be made.  Is that the essence of it?  Am I understanding the proposition correctly?

PN19

MS PEDLOW:  Yes.  I think perhaps the additional clarification might be that, with respect, it's about the amount to be paid being agreed.

PN20

JUSTICE ROSS:  Okay.  So it's the determination of the amount that is problematic in - that's the central problem.  Is that right?

PN21

MS PEDLOW:  From a process perspective.  It's not insurmountable, but because of the way the business is structured and a lot of security businesses are structured, it's likely to extend that process.

PN22

JUSTICE ROSS:  All right.  How does it work now?  How do you decide how much the employee is going to be paid for the leave they're seeking to cash out?

PN23

MS PEDLOW:  With respect to the process that is outlined under paragraph 16, and I think it's (a) through to (g), it's towards the end of that process - if I can just refer to my notes.

PN24

JUSTICE ROSS:  I'm sorry, if you could just speak into the microphone.  I missed that last bit.  I see the process.

PN25

MS PEDLOW:  So it's about at point (f) in that process.

PN26

JUSTICE ROSS:  Yes.

PN27

MS PEDLOW:  The other factor for some of our businesses that aren't - like, that are based in WA, is that our head office payroll processing is all done and therefore those calculations are all done in Sydney, where our national pay office is, so it sort of goes across to Sydney and then those calculations are done and then it's paid.  Again while it's certainly not insurmountable to have that agreed at an earlier part in that process - - -

PN28

JUSTICE ROSS:  All right.

PN29

MS PEDLOW:  - - - it's likely to, to an extent, then create some delays in getting that agreement.

PN30

JUSTICE ROSS:  I mean, as the union points out in its submission, regulation 3.36 requires you to keep a record of when the payment was made and the payment; the amount.  Presumably you keep those as records and the agreement.  As I understand it, you're putting that it's not insurmountable but it's an additional administrative burden that you would be required to go through.  Is that the essence of it?

PN31

MS PEDLOW:  Yes.  Certainly it's not insurmountable.  I guess an additional administrative burden, but also likely to create delays in the process.

PN32

JUSTICE ROSS:  Yes, okay.  Well, I suppose it really is the delay point, isn't it?  It's not so much the administrative burden because you have to do the work, anyway.  It's just the time at which you do the work.  Is that it?

PN33

MS PEDLOW:  Yes, that's correct.

PN34

JUSTICE ROSS:  Yes, okay.  As you've indicated, you're party to a number of agreements which provide a process for cashing out of annual leave.  Just on a short search, I've identified six or seven.  What proportion of your employees who are covered by the Security Award are covered by enterprise agreements?

PN35

MS PEDLOW:  Generally speaking, if somebody is covered by the award they aren't covered by agreement, as well.  However, most of our enterprise agreements - the underpinning document or underpinning award if you like - is the Security Services Industry Award.

PN36

JUSTICE ROSS:  I understand that, but what I'm saying is that employees who would normally fall within the scope of the Security Services Award that are employed by MSS, are they all covered by enterprise agreements?

PN37

MS PEDLOW:  Yes.

PN38

JUSTICE ROSS:  All right.  In those circumstances what practical impact will it have on MSS if we vary the award to include the model term without the variations you're seeking, given that all your employees that are covered by the award are in fact covered by enterprise agreements and of course the enterprise agreement will prevail over the award?

PN39

MS PEDLOW:  My apologies, President.  I may have misunderstood your question.  About two and a half thousand of our employees are not covered by an enterprise agreement, so they are covered by the Security Services Industry Award and they're not covered by any agreement.

PN40

JUSTICE ROSS:  How many employees do you have in total?

PN41

MS PEDLOW:  A little over 5000.

PN42

JUSTICE ROSS:  So about half of your employees are covered by enterprise agreements and half not?

PN43

MS PEDLOW:  Yes, that's correct.

PN44

JUSTICE ROSS:  All right.  But if we were to insert the model term, I suppose the question is provided the relevant agreement term was consistent with the NES and the regulations about recording, so it didn't seek to contract out of any of those - subject to that and the agreement overall meeting the BOOT test, why couldn't you deal with the tailoring of the cashing out issue through enterprise agreements as indeed you have to date?

PN45

MS PEDLOW:  Yes, that's certainly something that would be open to us.

PN46

JUSTICE ROSS:  All right.  I might go to the union to see if they have anything to add to their submission and then I'll come back to you to see if there's anything you wish to say in reply to the union.  Can I take this opportunity to apologise to you about the time.  I didn't realise when we set the hearing time that you would be in Perth, so I regret that.  In the event there are any other proceedings involving MSS, I'll take steps to ensure that the start time is later so that we don't inconvenience you.

PN47

MS PEDLOW:  Thank you.

PN48

JUSTICE ROSS:  Mr Robson, was there anything you wanted to say to add to your written submission?

PN49

MR ROBSON:  The only thing we would add is that really MSS's application deals with issues that by its own admission could be dealt with through bargaining and have been dealt with through bargaining before.  The changes to the award, as you've said, won't actually change the arrangements they have incorporated into their enterprise agreements and it's open to them, if they're unhappy with the model term, to provide a provision more tailored to their business through further bargaining.  I think we would leave it at that.  Thank you.

PN50

JUSTICE ROSS:  All right.  Is there anything you wish to say in reply or anything further you want to put to us, Ms Pedlow?

PN51

MS PEDLOW:  No.

PN52

JUSTICE ROSS:  All right.  Thank you, each of you, for your submissions.  We will reserve and consider what has been put and issue a decision in due course.  Again, my apologies for the inconvenience about the time, Ms Pedlow, but at least it leaves you free to now get on with your day.  Nothing further.  We will adjourn.

SHORT ADJOURNMENT                                                                    [9.49 AM]

RESUMED                                                                                             [11.31 AM]

PN53

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

PN54

MR M BURNS:  Your Honours, my name is Burns, initial M, solicitor, seeking permission to appear today on behalf of the MUA and also the AWU.

PN55

JUSTICE ROSS:  Thank you.  In Perth?

PN56

MR S WHITE:  Good morning, your Honour.  Simon White and Mr T Caccamo on behalf of AMMA and also on behalf of MIA.

PN57

JUSTICE ROSS:  Thank you.  As we indicated in the statement, we propose to deal with your adjournment request.  In the normal course, we would have just dealt with this on the papers, but it's the proposition that we adjourn the hearing and list the matter before a member of the bench for conference that - not to put too fine a point on it, we don't really see the purpose of that.  You recite how the matter has gone.  You point out that no application has been made.  We are well aware of that, nor is an application required.  We dealt with this issue in the decision of 23 May from paragraph 231 onwards.

PN58

Really the two matters that we want you to address - and I'm not suggesting that be done now - are the point that we raise at 235 and onwards, and that is that the employer group submission in the earlier proceeding that sought to insert a standard cashing out term sought to include that term in 120 modern awards, including all the Maritime group awards that are before us now.  Further, four of the Maritime awards that are before us now were also part of the employer group claim to insert a standard leave in advance clause.

PN59

AMMA was a member of the employer group and the short point is that it's difficult to reconcile AMMA's opposition to inserting these standard clauses.  Their earlier position was that these awards should include clauses of that nature.  Leave aside for a moment what you may wish to say about the excessive leave proposition.  The cashing out model term and the leave in advance model terms are facilitative provisions.  They don't impose any obligation on an employer.  They provide an avenue whereby an employer and an employee may reach an agreement about those particular matters.

PN60

The leave in advance matter also, if there is an agreement to pay leave in advance, it provides a mechanism for the employer to recover any leave paid in advance which has not been accrued at a subsequent point when the employment might be terminated.  That's one of the propositions that you need to address.  The second is the background document which suggests that on the data we have available, employees covered by these awards are not currently taking their accrued annual leave.  We want you to respond to that material, as well.

PN61

I think the short point really is that we would be content to adjourn the proceedings and provide you with a further opportunity to put in whatever written submissions and evidence you wish to put in, in relation to this matter, but we particularly ask that you address those two points.  I think any submission you put in should replace any earlier submission.  It just becomes more difficult to follow if you seek to incorporate by reference various other submissions you have made.

PN62

We just want a consolidated submission setting out your reasons as to why you say these awards should not be varied to insert the model terms.  We want to hear from you about what sort of time frame would be required to do that and then we would provide an opportunity for anyone who wishes to comment on any submissions filed, and then we could deal with the matter on the papers without the need for a further hearing.  What do you wish to say in relation to any of that, in Perth firstly.

PN63

MR WHITE:  Thank you, your Honour.  We would welcome that opportunity because there are some inconsistencies between the data and also AMMA's understanding of what was agreed by the employer group.  We don't believe it would take any significant period of time to prepare a replacement consolidated submission.  However, because this is a unique issue that is an agreement generally between the employer groups and the unions involved, we would most likely need to have a little bit of additional time to have that submission reviewed by the other stakeholders in this process.

PN64

JUSTICE ROSS:  That's fine.  As you're aware, the fact that you may have a consent position is not going to be determinative of the issue.  The issue will be decided on the merit, not on whether you have got agreement with the unions.  It's not a respondency based system any longer.  They're regulatory instruments and it's the merit that you need to focus on, not the consent.  If I can make that observation to you.

PN65

MR WHITE:  Yes.

PN66

JUSTICE ROSS:  What I'm particularly interested in is - if you take, for example, the Seagoing Award where a similar issue has arisen in relation to time off in lieu of overtime, as a matter of logic you can follow why time off in lieu of overtime when you're on a voyage is, you know, problematic; but what I'm looking for is the detail, not a generalisation or some broad assertion about difficulties.  I want to know exactly how it operates and why it would be an issue or it's unnecessary in these particular awards.

PN67

Seagoing, it seems to me from the list of awards, is in a slightly different position.  The balance of those awards - well, perhaps with one exception - are generally land based and albeit operating in a marine environment, whereas Seagoing seems to have a different character to it, but I want the submission to address each of the awards and why you say they shouldn't be varied.  Okay?

PN68

MR WHITE:  Yes.  Thank you, your Honour.  We appreciate your comments.  If I could seek clarification.  You referred to four awards.  We understand that there were six awards.

PN69

JUSTICE ROSS:  Yes, that's true.  The four awards I was referring to are the ones that were among the modern awards which were the subject of the employer group claim to insert a standard leave in advance term.

PN70

MR WHITE:  Right.  Thank you, your Honour.

PN71

JUSTICE ROSS:  They're referred to at paragraph 236 of the decision of 23 May.  Those were the four I was referring to.  I accept that there are six Maritime awards here.  All of those awards were the subject of the cashing out claim.  I suppose what I'm a little puzzled about in relation to the cashing out and leave in advance, is these are facilitative provisions.  They're also provisions which AMMA sought to have inserted in the case of cashing out in all the awards and, in the case of leave in advance, in four of the six.

PN72

Implicit in that submission made to us last year is the proposition that the awards were not meeting the modern awards objective because they did not contain provisions dealing with leave in advance and cashing out.  What has changed?  Well, you didn't get the term you wanted, but nevertheless they are terms which deal with the substance of those two issues.  That's the nub of the proposition that's set out in the May decision, okay?  How long would you require to undertake the task?

PN73

MR WHITE:  I won't be a moment.  I'll just confer, your Honour.

PN74

JUSTICE ROSS:  No, that's fine.

PN75

MR WHITE:  Your Honour, we would request until the end of the month, so that will give four weeks for us to prepare the submissions because, as we do acknowledge and agree with your comment, the awards are quite different in the way that they operate and the way that there are current clauses very similar to the ones that are being proposed, so it isn't a blanket view from AMMA across all of them.  We do need to obviously tailor the response to each individual award.

PN76

JUSTICE ROSS:  Okay.  Mr Burns, you will be able to work within that time frame?  It may be there is a joint submission or to the extent you disagree with what is put in, there will be discussion between you and AMMA about that matter.

PN77

MR BURNS:  Yes.

PN78

JUSTICE ROSS:  So would the end of the month be sufficient for you for that purpose?

PN79

MR BURNS:  I'm just wondering if that is a bit - I would probably like another two weeks.

PN80

JUSTICE ROSS:  To respond?

PN81

MR BURNS:  No, to deal with the initial consultation with AMMA.  Say six weeks.

PN82

JUSTICE ROSS:  Forgive me if the counting is - that would be 12 August?

PN83

MR BURNS:  Yes.

PN84

JUSTICE ROSS:  I take it you would have no problem with 12 August?

PN85

MR WHITE:  No, your Honour.

PN86

JUSTICE ROSS:  All right.  We will grant the adjournment request.  We will issue directions next week.  The directions will provide for the filing of written submissions by AMMA, the Maritime Industry Association and the interested unions by 12 August.  We will provide a further seven days for any interested party that wishes to comment on the submissions that have been filed and we will then determine the matter on the papers.  Is there anything further?

PN87

MR BURNS:  No, your Honour.  Thank you.

PN88

JUSTICE ROSS:  All right.  Thanks for your attendance.  We will adjourn on that basis.

ADJOURNED INDEFINITELY                                                        [11.45 AM]