TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 25239-1

VICE PRESIDENT WATSON

AM2010/8

s.158 - Application to vary or revoke a modern award

Application by ACH Group
(AM2010/8)
Nurses Award 2010

(ODN AM2008/13)
[MA000034 Print PR986375]]




Melbourne

10.03AM, TUESDAY, 16 MARCH 2010

PN1

THE VICE PRESIDENT: Can I have the appearances please?

PN2

MR P. EBERHARD: Eberhard, initial P, from EMA Consulting, and we represent a number of organisations, and I can provide the tribunal with a list of those. They have been named in our submissions, so I don't know whether the tribunal actually wants another copy of that, but I have those if the tribunal so wants.

PN3

THE VICE PRESIDENT: Yes. We might take that list. Thank you very much, Mr Eberhard. Mr Blake.

PN4

MR N. BLAKE: If the tribunal pleases, Blake, initial N, for the Australian Nursing Federation.

PN5

THE VICE PRESIDENT: Thank you, Mr Blake. Well, I've made some directions in this matter and the parties have filed some written material. This hearing is to provide an opportunity for further oral submissions. So I can call on you first, Mr Eberhard.

PN6

MR EBERHARD: Thank you, your Honour. Your Honour, you should have on file a statement as to service in regards to the fact that EMA Consulting did forward, by facsimile to the ANF federal office, a copy of the application and also your directions in accordance with your directions. So you should have that on file. That confirms that we did, in fact, comply with one part of the directions in respect to providing the ANF with the necessary copies of the information as directed. We have lodged two submissions. Firstly, if you would like to call it a substantive submission, and then secondly, a submission in reply to the ANF. We would rely on both of those submissions in regards to the proceedings here today.

PN7

There are some additional submissions that we would like to make. I'll just reclarify or reconfirm the position that we have previous put in regards to this particular application. That is that this is an application made under section 157 of the Fair Work Act 2009 for the variation of the Nurses Award 2010. Section 157 of the act allows Fair Work Australia to vary a modern award under certain circumstances. FWA can make a determination under section 157 either on its own initiative or on application under section 158. Section 158 of the Fair Work Act 2009 determines who has standing to make an application to vary the award.

PN8

It is submitted that the entities and/or organisations that EMA Consulting represents in these proceedings are, for the purposes of section 158(1)(1) an employer that is covered by the modern award, or an organisation that represents employer that are covered by the modern award. It is therefore submitted that FWA has before it an application made in accordance with the Fair Work Act 2009. Clause 31.1 of the award provides that, and I quote:

PN9

In addition to the entitlement in the NES, full-time employees are entitled to an additional week of annual leave on the same terms and conditions.

PN10

In contrast the Nurses ANF South Australian Private Sector Award 2003, the Nurses SA Award, and 13 of the 14 agreements that have been made between the entities EMA Consulting represents and the ANF have a basic entitlement of four weeks of annual leave. The application seeks to transition from at least a South Australian employer's point of view, the additional, or fifth, week of annual leave provided by the award. The variation seeks to transition the basic annual leave entitlement of five weeks of annual leave in the following manner. From 1 July 2010, the basic annual leave entitlement would be four weeks and one day. From 1 July 2011, the basic annual leave entitlement would be four weeks and two days.

PN11

From 1 July 2012, the basic annual leave entitlement would be four weeks and three days. From 1 July 2013, the basic annual leave entitlement would be four weeks and four days. From 1 July 2014, the basic annual leave entitlement would be five weeks. It is submitted - - -

PN12

THE VICE PRESIDENT: That's not confined to South Australian employers, that's just a general provision you're seeking.

PN13

MR EBERHARD: I think that the way we've actually drafted the application and the draft order is that it would have general application. If the tribunal was minded - I'm still in the old commission mind set. I'll say that legally, I think.

PN14

THE VICE PRESIDENT: You're not the only one.

PN15

MR EBERHARD: Yes. So if the tribunal was minded to limit this to South Australia, we'd be quite happy for that to occur. But the reality is that at the moment I think that the application does have a range across other states and territories other than just South Australia. But our main focus and the clients that we represent in these particular proceedings are based in South Australia.

PN16

THE VICE PRESIDENT: The CCIWA said that their position is - the application raises identical issues to another application made by CCIWA in 2009. Do you say these circumstances are the same and that there is overlap between the two applications?

PN17

MR EBERHARD: I think the end result would be that if our application was granted or if the Western Australian application was granted on the universal sense, then it would certainly resolve the application made by both Western Australia and also South Australia if you would like to use it in that sort of vernacular. By that, I mean that in both instances we're seeking to transition that fifth week of annual leave as the basic entitlement. I think the WA application does it in a different way, but it has exactly the same outcome in the sense that the 20 per cent outcome results in one day, two day, three day, four day, and then the full five days, so the full fifth week coming through in 2014.

PN18

That's the way that we have proposed that the variation or the draft order to the award to actually come through. So I think the bottom line is that if the Western Australian application was granted, or if the South Australian application was granted, then either application would settle either of the two proceedings or the two applications. The WA application, at this stage, hasn't been determined and given that we're now in the position that we are in, one would presume that this could well determine their application even though their application was made under the Workplace Relations Act in 576 rather than 157 of the Fair Work Act.

PN19

THE VICE PRESIDENT: I'm just wondering why there wasn't any involvement from your clients in the other matter.

PN20

MR EBERHARD: I think it was more a timing issue in the sense that I can't remember the exact date when WA made the application, but it was either late or around - late December or certainly around Christmas time. I don't think that it actually came to our intention for us to get instructions to confirm with the clients that we represent in these particular proceedings to get instructions to, if you like, tag onto that particular application. So that's why we made application on behalf of the clients that we represent in these particular proceedings.

PN21

THE VICE PRESIDENT: There appears to be different tests for each of the applications. What you're seeking might be the same, but they're subject to different statutory provisions and different tests.

PN22

MR EBERHARD: I agree. The requirements in 157 is that we would need to satisfy the tribunal and positively do that, that there needs to be a variation made and that the variation made satisfies the modern award objective in that respect. So, yes, there is a different test, and on that sort of basis we would submit that - I was about to get into that scenario so I'll do that in a minute. But with respect to our original - our substantive submission, we did deal with the legislative provisions in regards to 157 and the test that followed - that flowed from 157 and also the modern award objective in regards to 134 of the act in respect to those two particular provisions.

PN23

THE VICE PRESIDENT: When you say the substantive submissions there, they're the ones filed with the application?

PN24

MR EBERHARD: They're the ones that were filed on 1 March 2010.

PN25

THE VICE PRESIDENT: 1 March?

PN26

MR EBERHARD: The discussion in regards to 157 starts at paragraph 22 on page 5 and continues on through to, and including paragraph 29 on page 8.

PN27

THE VICE PRESIDENT: Yes. Yes, thank you.

PN28

MR EBERHARD: So as I said just before, FWA is empowered under section 157 to vary a modern award, and I quote, "Outside the system of four yearly reviews of modern awards," where, I quote again, "It is satisfied that making the determination is necessary to achieve the modern award objective." Therefore it is the applicant's task to positively influence the FWA into making such a decision. The modern award decision is contained in section 134 of the act. I don't intend to read all of that to the tribunal, but we do say that section 134(2)(b) which talks about the wages function, is not relevant to this application.

PN29

It is submitted that whilst a modern award objective is an amalgam of a wide variety of matters, it is not necessary to satisfy each and every individual matter referenced in the modern awards objective. To this end, it is submitted that the applicant does not need to prove to FWA the sections 134(1)(a), 134(1)(b), 134(1)(c), 134(1)(d), 134(1)(e), 134(1)(f) and 134(1))(g) have all been satisfied, but rather that the provision or provisions that most closely attach to the variation sought has been satisfied. In reference to this particular application the applicant's rely on sections 134(1)(b) and 134(1)(f). Section 134(1)(b) requires the FWA to take into account the need to encourage collective bargaining, and section 134(1)(f) requires FWA to take into account the likely impact of any exercise of modern award powers on business including on productivity, employment costs and the regulatory burden.

PN30

In respect to 134(1)(b) on the need to encourage collective bargaining, the applicants submit that rather than encourage collective bargaining, there is currently a disincentive to bargain under the award. The additional costs which have been further considered and explained in the substantive submissions that flow from the award currently create disincentives to the South Australian employees to consider entering into negotiations that may ultimately lead to the making of a new agreement for the South Australian employers. In contrast, should the award be varied in the manner proposed by the application then as the additional costs that will be met by the South Australian employees would be subject to transition, there is a greater incentive to bargain than there is under the award as it currently stands.

PN31

In respect to 134(1)(f) and the likely impact of any exercise of modern award powers on business including on productivity, employment costs and the regulatory burden, the applicants submit that the award has imposed additional employment costs upon the SA employers. The additional employment costs involved in the introduction of the additional one week of annual leave for employees who are not shift workers are further considered in the substantive submissions. If these submissions do not find favour with FWA the applicants submit that each individual aspect of the modern awards objective has been satisfied. Each of the individual aspects of the modern award objective have been satisfied in the following manner, 134(1)(a), relative living standards and the needs of the low paid, and we would submit that this particular aspect of the modern award objective is not relevant to the application nor the variation proposed.

PN32

We would rely on our comments previously made in regards to 134(1)(b) and the need to encourage collective bargaining. In respect to 134(1)(c), the need to promote social inclusion through increased workforce participation. We would again submit that this particular aspect of the modern award objective is not relevant to the application, nor the variation proposed. In regards to 134(1)(d) and the need to promote flexible work practices, and efficient productive performance of work we would again submit that this particular aspect of the modern award objective is not relevant to the application nor the variation proposed. In respect to 134(1)(e), the principle of equal remuneration for work of equal or compatible value, again we would say that this particular aspect of the modern awards objective is not relevant to the application nor the variation proposed.

PN33

In respect to 134(1)(f), we have dealt with that before and we would rely on our submissions in regards to that, and following in regards to 134(1)(g) and the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards, again we would say this particular aspect of the modern awards objective is not relevant to the application nor the variation proposed. The provisions prescribed in the modern award objective and the functions that the commission was required to consider in section 576B(2) of the Workplace Relations Act have a number of common links. The words used in section 576B(2) have in a number of instances also been used in the modern award objective.

PN34

The application does not seek to alter or amend or displace any of those prescriptions or provisions in either section 572B(2) or the modern award objective, rather the application seeks to transition the fifth week of annual leave. To this end it is submitted that as the application does not seek to alter, amend or displace those prescriptions or provisions, the provisions of the modern award objective have been satisfied. The Nurses Award 2010 was an award made by the Australian Industrial Relations Commission on 3 April 2009. On 26 August 2009, which was nearly five months after the award was made, the minister for employment and workplace relations wrote to the commission, and if I can I will provide a copy of that correspondence to the tribunal.

PN35

THE VICE PRESIDENT: Mr Eberhard, I might mark your submissions of 1 March exhibit E1 in these proceedings.

EXHIBIT #E1 SUBMISSIONS FROM 01/03/

PN36

THE VICE PRESIDENT: I'll mark your letter from the deputy prime minister - I can't see the date of that letter?

PN37

MR EBERHARD: I think it's actually 26 August 2009, your Honour.

PN38

THE VICE PRESIDENT: Where do I see that?

PN39

MR EBERHARD: I don't think it actually is dated.

PN40

THE VICE PRESIDENT: Yes. Well, look, the letter to the president concerning the number of issues arisen during the course of the award modernisation process, we say written on about 26 August, will be exhibit E2.

EXHIBIT #E2 LETTER TO PRESIDENT CONCERNING NUMBER OF ISSUES ARISEN DURING COURSE OF AWARD MODERNISATION PROCESS

PN41

MR EBERHARD: If we're marking exhibits, your Honour, could the tribunal also mark the submissions in reply?

PN42

THE VICE PRESIDENT: Yes. I'll mark your submissions in reply, dated the 12th, sent on the 12th anyway, dated 12 March, exhibit E3.

EXHIBIT #E3 SUBMISSIONS IN REPLY DATED 12/03/

PN43

MR EBERHARD: Thank you, your Honour. Your Honour, the correspondence from the minister does a number of things, but in regards to the South Australian aged care employers references them as the outlier states, and I'll just very quickly take the tribunal through the correspondence, and it starts that:

PN44

I am writing in regard to a number of issues that have arisen in the course of the award modernisation process. I have received representations from several stakeholders relating to a number of awards dealt with by the Australian Industrial Relations Commission. Following these representations I asked my department to examine these concerns and provide me with advice on any implications regarding the government's policy allowing to award modernisation.

PN45

Then the second sentence of the next paragraph is:

PN46

I also take this opportunity to provide further submissions to the commission regarding the government's award modernisation policy as it relates to a number of issues.

PN47

Then if we go to page 4 of the correspondence of the exhibit, at the bottom of the page there's a heading Transition Arrangements Outlier States. I note that in all of its award modernisation activities the commission has endeavoured to strike a fair balance by selecting the new standard to apply in the modern award standard from within the range of conditions that presently apply in the various state instruments. I also note the Australian government's submissions of 29 May 2009 and 1 July 2009 urging the commission to use the full five-year transitional period available to it to transition from a lower state award to any higher standard that may result from a modern award and to have regard to funding arrangements, in particular sectors when determining transitional arrangements.

PN48

I note that in the small number of cases the relevant state-based NAPSA provides for terms and conditions that are markedly different to the conditions applying in the rest of the nation, that is, that is effectively an outlier. I wish to draw the commission's attention to three such cases where a state NAPSA presently provides conditions that are markedly lower than those presently applying elsewhere in the country and lower than those that will apply in the new modern award, and the second of those is the South Australian aged care industry.

PN49

In these cases and in other similar cases that may arise I strongly urge the commission to provide for transitional provisions that utilise the full five-year period that is available to it to ensure an all in phase-in of the new modern award standard and that reduced the impact upon employers. Now, in regards to that particular correspondence we would submit that the commission in performing its functions and making the Nurses Award didn't have the benefit of this correspondence before it at the time that the Nurses Award was actually made, as the Nurses Award was made 3 April 2009 and the correspondence forwarded to his Honour the president was not forwarded through to the commission until 26 August 2009.

PN50

So in respect to that we would submit that there is clearly a reference in there that highlights that in respect to the South Australian aged care industry that there is a concern from the minister as to the impact that certain provisions, and we would submit one of those being annual leave, could have upon employers within South Australia due to the additional cost burden that would be met by them given the fact that the NAPSA or the award that applied in that particular state was at a far lower level than the modern award as proposed by the commission.

PN51

THE VICE PRESIDENT: What's the incidence of nurses covered by the Nurses Award within aged care facilities? How many nurses would commonly be employed within such facility compared to other health workers?

PN52

MR EBERHARD: As a percentage?

PN53

THE VICE PRESIDENT: As a percentage or as a typical number.

PN54

MR EBERHARD: Off the top of my head I couldn't tell the tribunal that, I'd have to go back and research that and ask for further guidance. As we did highlight in our submission in exhibit E1, each of the employers that are subject to this particular application and to whom we actually appear here today, are party to an agreement with the ANF, and in 13 of the 14 particular agreements, again ,they have four weeks as the common standard of annual leave rather than the five weeks in that regard, but I know that all of the nurses that are covered, by that are employed by the employers that we're representing in these particular proceedings, are covered by an agreement and the cost impact that will occur will be where the employers seek to make a new agreement, and where the employers actually do make an agreement and the meeting of the better off over all test under the act in respect to the transfer from say the four weeks leave to the five weeks leave under the modern award. If the tribunal was required that information I can provide that to the tribunal.

PN55

THE VICE PRESIDENT: I would be assisted by that. I take it that there are other people other than nurses and possibly a significant proportion of staff are not nurses within these facilities.

PN56

MR EBERHARD: The other employees would be covered by the aged care award.

PN57

THE VICE PRESIDENT: Yes, but in terms of the impact on the operations the proportion of employees that are nurses covered by the nurses award would appear to be irrelevant in consideration.

PN58

MR EBERHARD: As I said, your Honour, I would have to take further instructions on that and I can certainly do that and - - -

PN59

THE VICE PRESIDENT: Yes. Well, I would appreciate that.

PN60

MR EBERHARD: - - - provide that information to the tribunal as soon as I possibly can and also to the ANF in regards to that.

PN61

THE VICE PRESIDENT: Yes, thank you.

PN62

MR EBERHARD: If the tribunal pleases.

PN63

THE VICE PRESIDENT: Yes, thank you, Mr Eberhard. Mr Blake?

PN64

MR BLAKE: Perhaps to assist the tribunal in relation to your question to Mr Eberhard about the normal staffing arrangements, can I indicate that as a broad rule of thumb a particular aged care facility would have a manager who would normally be a director of nursing or a senior nursing officer, that would be one person that would have a very small number of registered nurses, typically they would be two or three registered nurses, one per shift, so you would have a registered nurse in the morning shift, afternoon shift and the night shift. The bulk of the staff would be personal care workers or ancillary staff who would be providing catering and cleaning services, so in a typical aged care facility the nursing staff would be a minority of the staff members, and we're also able to provide further detail in regard to that - - -

PN65

THE VICE PRESIDENT: Yes. Well, as I say, I would be assisted by that and if you wish to by way of response to Mr Eberhard having looked at it further you'd be free to file something in addition.

PN66

MR BLAKE: Thank you, Vice President. If the tribunal pleases the Australian Nursing Federation has filed a written submission in relation to this application. We did so on 22 February this year.

PN67

THE VICE PRESIDENT: Is that a one-page submission?

PN68

MR BLAKE: It is a one-page.

PN69

THE VICE PRESIDENT: So I mark that submission exhibit B1 in these proceedings.

EXHIBIT #B1 WITNESS SUBMISSION 22/02/10

PN70

MR BLAKE: I also indicated we've also filed a submission in the matter you referred to earlier today, that is the application of the Chamber of Commerce of Western Australia. Although that is very similar to the application before you, it does have some significant differences and I think I should raise it today. In Western Australia they have a unique situation where enrolled nurses, not registered nurses - enrolled nurses have historically been covered by a different federal instrument - have been able to trade off working public holidays and receive additional annual recreational leave. So they can in certain circumstances, you understand, receive up to seven weeks' annual leave by trading off their public holiday loadings.

PN71

The Chamber of Commerce in Western Australia, as I comprehended, are concerned that in the modern Nurses Award, the five weeks' annual leave is not transitioned, but the public holiday loading is transitioned a result of the model transitional arrangements. So it reduces by 20 per cent a year over a five-year period from 250 per cent to 200 per cent. That's, as I understand it, Vice President, their major concern about the operation of the annual leave arrangements in Western Australia as it affects enrolled nurses. It is different to this application, and that's one of the issues that we think complicates both the applications, and we'll deal with that in a bit more detail shortly. We note that that application is before the Award Modernisation Full Bench and it is yet to be determined.

PN72

We don't seek to take the tribunal to our submission today in any detail. We simply note that we oppose the application, and we do wish to make some comment in regard to the written submissions of EMA Consulting of 1 March and 12 March, and also to address today the transitional provisions so far as they affect the application. Vice President, as a member of the Award Modernisation Full Bench you will be well aware of the context and some of the difficulties that we all face in relation to the award modernisation exercise.

PN73

The Nurses Award, along with many other awards, ultimately became an amalgam of a range of different conditions in relation to a particular industry, or in the case of the Nurses Award, in relation to the occupation of nursing. We note that in broad terms the Nurses Award would ultimately replace around 50 federal awards and around 50 NAPSAs that currently operate across all the states and territories. The modern award, in our submission, now represents in very broad terms federal award conditions that have general application after taking into account the award modernisation request and the impact of the national employment standards.

PN74

I should note, it doesn't appear in the employer's submissions, but in the making of the Nurses Award, insofar as it affected those award-reliant workers employed in the aged care sector in South Australia, there are a number of conditions that they lost through the award modernisation process. Can I indicate, an example of those was the in-charge allowance, the telephone allowance and the change of duty allowances. Those three conditions are examples of award conditions that were removed and did not appear in the modern award, and of course they have not been transitioned at all. So they're gone.

PN75

In relation to the quantum of annual leave, in our submission, the Award Modernisation Full Bench sought to balance the diverse conditions that existed in both federal instruments as well as state awards, and did so having regard to the fact that nursing is a 24-hour-a-day industry, seven days a week, 365 days a year, and historically, entitlements to annual leave in many nursing awards have links to working weekends, rotating shifts, as well as working on public holidays.

PN76

The exposure draft of the Nurses Award published by the full bench in January 2009 included five weeks' annual leave for all nursing employees. This clause was extensively debated at the exposure draft consultation proceedings in February 2009. Our union and other unions raised concerns at the time that in some states, in particular Western Australia and in the Northern Territory, the award provisions for annual leave had been reduced. On the other hand, a number of employer organisations, including the private hospitals organisation, the aged care employers, and some peak organisations, argue that the five weeks' annual leave as the new safety net was excessive. In its decision of 3 April 2009, in publishing the final award, the bench observed at paragraph 151:

PN77

Another important matter related to annual leave for nurses. There was universal agreement that the history of annual leave for nurses is both complex and diverse. In the exposure draft, we tentatively reached the conclusion that the provision of five weeks' leave for all nurses was a reasonable balance between the existing award entitlements. This meant that some may have been entitled to an increase, but clearly there were nurses whose annual leave would be decreased.

PN78

In response principally to the submissions at the time by employer groups, including the South Australian employers, the commission amended the exposure draft to reduce the penalty for working on a public holiday from 250 per cent to 200 per cent, and did so in part in acceptance that where great amounts of annual leave were available, there existed lower levels of payment for public holidays. So in our view, the Award Modernisation Full Bench recognised that there was a direct link between working public holidays, working rotating shifts, and the amounts of annual leave that nurses received through either their federal or state awards at the time.

PN79

There are two points we would like to make about these proceedings. Firstly, it seems to us that there are a range of material and ample submissions before the Award Modernisation Full Bench that could lead one to draw the conclusion that annual leave was an entitlement that the Award Modernisation Full Bench looked very closely at. Secondly, and importantly, in our submission, the bench indicated from time to time that they were not working from a blank sheet of paper, they were trying to seek to achieve a reasonable balance between existing award entitlements.

PN80

We make this same submission, your Honour, in relation to a range of other issues referred to by the employers during the award modernisation proceedings and by the applicants in this matter. For example, at paragraph 11 in their written submission of 1 March, the applicant refers to the correspondence, now marked as exhibit E, from the minister for workplace relations to the president of the tribunal. We note that whilst it appears that the date of the correspondence is 26 August 2009, the Award Modernisation Full Bench did have the benefit of that correspondence prior to publishing their decision on 2 September 2009, where they dealt substantially with the transitional issues, and what was to be transitioned and what was not to be transitioned.

PN81

We submit that one could safely assume that the Award Modernisation Full Bench had regard to the correspondence with the minister, it also had regard to the written submissions and the oral submissions of all of the parties in relation to how the content of modern awards would occur through the transitional provisions. Obviously the South Australian aged care employers are not happy with this outcome and they seek to make a new application to transition base salary (indistinct) that had not previously existed for nurses working in the aged care sector in South Australia. We don't accept that. We don't accept that it's as straightforward as to say that there is an entitlement to four weeks and now there is an entitlement to five weeks.

PN82

Nurses in South Australia under the previous federal instrument and the NAPSA, and it's referred to in the employer's submissions of 1 March, had a basic entitlement to four weeks but could receive up to six weeks' annual leave should they work on weekends and public holidays. It's a fairly standard provision that you'll find in most nursing awards, that nurses who work on weekends and public holidays receive additional annual leave. So many nurses, in our submission, your Honour, in South Australia would have currently received over the four-week basic entitlement.

PN83

In their paragraphs 22 through to 28 of their written submissions of 1 March, the employer seeks to justify the proposed variation, which is outside the nominal four-year review, as being necessary to achieve the modern award objective. In doing so, they make specific reference to sections 134(1)(b) and 134(1)(f). Section 134(1)(b) deals with the need for awards to encourage collective bargaining. The first thing to note is that the employers submit, and we agree, that all of the employers represented in this application have agreements with the Australian Nursing Federation in relation to their nursing staff employed within the aged care facilities. So there is blanket agreement coverage in respect of these employers.

PN84

At paragraph 26 of their submission, they assert that the impact of the annual leave arrangements in the modern award will be a disincentive for the employers to replace existing agreements. Their submission seems to be based on the view that there is now an increased cost in place arising from the modern award, and as a consequence employers will be less inclined to reach agreements and therefore it would be a disincentive to collective bargaining. We submit that this argument is not only counter-intuitive, it's simply wrong. Most employers in the South Australian aged care sectors, they have long moved away from the awards and into enterprise agreements. As a consequence, the gap between the (indistinct) entitlements and those which are provided by the award, particularly in relation to wages, is quite significant. We did provide your office and the other parties with a copy of a table, which we would seek to have marked.

PN85

THE VICE PRESIDENT: So I mark that table forwarded under cover of an email of 15 March exhibit B2.

EXHIBIT #B2 TABLE DATED 15/03/2010

PN86

MR BLAKE: Thank you. Your Honour, this table just represents a selection of three collective agreements. We've chosen three agreements that have recently expired, from the group represented by EMA Consulting today. We've just provided the modern award rates, the award for enrolled nurses and for registered nurses, they're the entry-level points, and the corresponding rates under the agreements for those three facilities. You'll note that the difference in the entry-level wage rates ranges from around 13 per cent up to about 24 per cent.

PN87

We don't believe, given the circumstances of these employers, where they are in terms of their agreement outcomes and the history of agreement-making in this industry, that even if you accept, and we don't, that there is a cost to employers as a result of an increase in annual leave - we have calculated that a full-time employee who was on four weeks' annual leave and could go to five weeks' annual leave would cost the employer less than 2 per cent of that employee's wages. Even if you accept that - and we don't, because the vast majority of employees in that sector are part-time or they're casual, very few full-time employees in the aged care sector in South Australia or anywhere else - we don't think it will have an adverse effect on bargaining. We suggest that employers and nurses continue to bargain as they have done so in the past.

PN88

In relation to section 134(1)(f), which deals with the likely impact of a modern award on the cost of running the business, we're a bit bewildered as to how the employer can possibly rely on this provision to support their application. We note once again that the employer has questioned the subject of effective agreements in relation to the nursing staff, and we note that in paragraph 36 of their written submissions of 1 March the employers acknowledge the costs (indistinct) accept that they exist, will not have an immediate impact on each employer subject to these proceedings. However, they go on to assert that the BOOT test will have a detrimental effect on the willingness of employers to replace certain agreements. We reject this, with respect to my colleague, Mr Eberhard. We think it's a very thin submission, it doesn't stand up to any close analysis.

PN89

THE VICE PRESIDENT: Mr Blake, can I ask you a question about the approach to the modern awards objective? You've referred to the paragraphs relied on by the applicants in this matter. Is it a matter of just looking at certain of the paragraphs in section 134, or is it more appropriate when being satisfied that a variation is necessary to achieve the modern award's objective to look at all of the considerations in a global sense, at least so far as they're relevant, but to make an overall impression of all of those factors that contribute to what now amounts to the modern awards objective?

PN90

MR BLAKE: Your Honour, we note the submission of the applicant that they are not required to address you on every principle set out in 134. But it appears that the modern awards objective incorporates all of those provisions and the tribunal should have regard to each and every factor. We haven't responded to the applicant's view that they only need to meet two tests, as it were, in relation to 134(1), but it would seem to me on the face of it that the tribunal must have regard to 134(1) in its totality when considering these issues. We don't believe that, in relation to this application, any of those tests are met.

PN91

It's difficult to say, given the coverage of collective agreements in the sector, particularly in relation to the application, how each of these provisions will have an impact on either the needs of the employees nor the operation of the business of the employers. Perhaps the applicant can address that as well. I do note that I think it's agreed between the parties that there are no immediate costs in respect of the introduction of the award, in respect of (indistinct) we would argue, and we would submit, that it's highly probable that there will never be any actual costs arising from the introduction of a modern award in these workplaces because we are strongly of the view, Vice President, that the parties will continue to reach agreements that suit the needs of both the employers, the nurses and the enterprise.

PN92

If I can just briefly address you on the issue of transitional provisions so far as they're applied to this award. We know at the outset, Vice President, that the modern transition provisions were incorporated into the Nurses Award on 2 September 2009. If I can take the tribunal to the decision of the Award Modernisation Full Bench of April 2009. In decision AIRCFB 345 where the commission observed at paragraph 25, and I quote from the third sentence of the paragraph:

PN93

As the commission indicated in its 19 December 2008 decision, which it also considered the overall impact of the move to modern awards, the actual cost impact will also be relevant. Certainly there are concerns that there is a potential for the transitional provisions and some awards will be overly complicated. There is a danger, particularly with a modern award that's replaced with a number of disparate conditions in pre-reform awards in absence. If the transitional provisions are too complicated they will not serve the award modernisation's objective and their implementation may be compromised.

PN94

We note that as there will be no extra costs arising from the introduction of a modern award due to the existence of enterprise agreements. We also submit that the proposed variation, particularly in relation to the suggested changes to schedule A, are confusing, in our submission, and arguably unworkable, given that the entitlement to annual leave is intricately linked to a range of other provisions in the modern award. It is the decision of 2 September 2009, the Award Modernisation Full Bench established the model transition provisions which, as we say, were included in the Nurses Award.

PN95

We note that in that decision, the bench reflected on the range of submissions they had received and the scope of all provisions that should be transitioned according to the parties, both in respect to obligations and entitlements including submissions by the South Australian aged care employers to delay the introduction of annual leave entitlements for nurses. The full bench ultimately decided that the model transitional provisions were to be intentionally limited to the main matters affecting pay. This did not include annual leave. In conclusion, Vice President, we wish to make some brief comments about applications of varying awards between the four-yearly reviews.

PN96

In our view, there will always be some instances where, due to changed circumstances, omissions or oversights, the award should be able to be varied in a timely matter and not have to wait for a general review. To that extent, we think that if there is a test, that test should be realistic, but it shouldn't be set that low as to allow applicants to reargue matters, particularly where such matters have been recently dealt with and determined, as this matter had during the award modernisation proceedings, in our submission. It is our submission that the applicant in this case must demonstrate changed circumstances or emerging circumstances that the Award Modernisation Full Bench was not been informed about, and if they had been informed about, may have changed their decision in relation to this matter. We don't believe that the applicant has discharged his onus, and the tribunal in our submission should reject the application. If the tribunal pleases.

PN97

THE VICE PRESIDENT: Thank you, Mr Blake. Mr Eberhard.

PN98

MR EBERHARD: Thank you, your Honour. There are a couple of matters that I just wish to address. Firstly, the last point first in the sense that it's our submission that we're not seeking to reargue matters that were previously before the bench. I haven't had the benefit of being in attendance, I don't know whether I should say thankfully or not thankfully in regards to the award modernisation process, your Honour. Mr Blake had the "privilege" of that. But I certainly read a number of our submission in regards to that, and as much as I can I've read the transcript, but that certainly doesn't give you the full flavour of the proceedings in regards to what was occurring and what had happened in regards to that.

PN99

But it's certainly my understanding that in regards to the Nurses Award and annual leave, the organisations the EMA Consulting represented, we opposed the making of an order with a fifth week of annual leave. What's happened now is that the award has been made. We're not seeking to revert from five to four weeks of annual leave. We are seeking, rather, to transition from four weeks to five weeks. So the cost impost that we say that occurs as a result of that will be lessened for the employers in regards to their future conducting of their business. I would like to argue against the fact that this is a re-hearing of matters that have previously been before the bench.

PN100

THE VICE PRESIDENT: Did your clients make submissions in the transitional proceedings, seeing as I'm (indistinct) transitional provisions, either for standard transitional provisions or the particular ones for stage two.

PN101

MR EBERHARD: They would have, and off the top of my head I can't remember exactly what was said in each and every one of the submissions that were made, but I know that we have been active participants through the process of the award modernisation for this particular award and also the aged care award, so from my memory - - -

PN102

THE VICE PRESIDENT: I think the matters we've relied on are the South Australian aged care industry in the transitional proceedings. In other words, what were the matters that were raised with the minister and were the subject of her letter and were the subject of subsequent submissions by South Australia aged care employers?

PN103

MR EBERHARD: I think in response I could say this, that in that situation there was still opposition, I think, to the fifth week and that the seeking of a four-week provision rather than a five-week provision of annual leave. So we were, on behalf of the clients that we were representing, the G10 Group, we were opposing the fifth week of annual leave. I don't think we were seeking, at that stage, its transition.

PN104

THE VICE PRESIDENT: I think the stage two awards were made much earlier than August. We were then into the transitional cases on the - submissions on the transitional provisions. I think it's in one of the submissions I've just read about the date the Nurses Award was made. I think from memory it was back in April.

PN105

MR EBERHARD: I have a submission that was lodged on behalf of the various organisations that we represent and it's dated 29 May. It's transitional provisions submission, 29 May 2009. I think in that, again, we are seeking to - I think we are again seeking to oppose the fifth week rather than seeking to transition it, if I remember the submission correctly, your Honour.

PN106

THE VICE PRESIDENT: Yes. Well, I haven't checked all of the submissions at each stage and the making of the award and its terms and the transition provisions, I haven't done that check as yet. But wouldn't it - it would appear just on the timing that there was an opportunity to rely on the minister's letter in relation to the transitional provisions in relation to annual leave and either that was done in the submissions on behalf of your clients, or it could have been done during those various processes.

PN107

MR EBERHARD: Again, I'm not positive about the dates, your Honour, but respectively I disagree in the sense that if the transitional provision submission is dated 29 May and the letter from the minister is dated 26 August, there's still a significant gap between the commission, at that stage, considering the transitional provisions for the Nurses Award and the correspondence being forwarded through to the commission from the minister.

PN108

THE VICE PRESIDENT: There are further opportunity to address specific award transitional provisions after the standard provisions was published.

PN109

MR EBERHARD: Again I accept what your Honour is saying and I'd really have to go back and check and I can, again, confirm with the tribunal in regards to that as to what was set out on a secondary basis.

PN110

THE VICE PRESIDENT: Yes, I'll need to check that myself, but if the parties wish to point me to particular submissions and times and refresh my memory of particular things.

PN111

MR EBERHARD: (indistinct) refreshed in the meaning in that sense, your Honour. But as I'm saying, from my recollection of the reading of the materials, and again I wasn't involved in the process in a physical sense so it makes it a little bit more difficult in the sense that you read but you don't necessarily take all of it in, I thought the arguments in regards to the transitional provisions were dealt with prior to the minister's letter. I didn't think that there was then - after the date of the minister's letter, I didn't think that there was then subsequent opportunity for the stage two awards to come back and reargue transition. But I can certainly provide further information to both the tribunal and also the ANF in regards to the submissions that were made. We would undertake that to provide that to the tribunal at the earliest opportunity.

PN112

THE VICE PRESIDENT: Thank you. Yes.

PN113

MR EBERHARD: Can I say, it might well be easier if, at the conclusion, if the tribunal sets some dates for us to do that. I'd like to go through the - once we get the transcript and then give us a couple of days to then provide further material to the tribunal and then for the ANF to do the same thing. As I said, we disagree with you in regards to the reargument. In regards to the power to make the order that we seek to make under 157 or 134 in regards to the modern award objective, we put two submissions to the commission in regards to that. We say that - in the first instance we say that you don't have to meet each and every one of the particular provisions of 134. So you don't have to individually meet (a) to (g).

PN114

It's acknowledged that at the end of each of the modern award objectives there is the word "and", so it is a complete string, if you would like, to say you do read the provision through, but on that sort of basis, given the fact that, we would submit, that the way the award was made in regards to 576B of the Workplace Relations Act and the correlation that exists between the commission's requirements in 576B and 134 of the Fair Work Act. The relationship and the similarity of words that are used, given that we are not seeking to vary other provisions apart from the transitional provisions in respect to annual leave are that we say that the test the commission were required to satisfy in regards to 576B were satisfied in regards to 134 because we haven't sought to vary those other particular provisions or requirements of legislation or of the award in that sense.

PN115

The other thing that I'd like to submit is that Mr Blake pointed out that there has been a reduction in the public holiday penalty that is applied. There may have been a reduction, but again, that reduction would be subject to the transitional arrangements that exist as a result of the commission's decision in regards to that, and any award that existed that had a 250 per cent increase would go from 250 to 240, to 230, to 220, to 210, and the ultimately to 200 per cent, but that would be done during the full life of the transitional period.

PN116

In contrast, in this situation annual leave is payable and the additional annual leave, we say, is payable on and from 1 January. So if there is that correlation, and there are still questions about that, and even in our exhibit at paragraph 14, and this is taken from paragraph 151 of the commission's 3 April 2009 decision, which is AIRCFB 345, the ANF submitted that no such trade-off existed. We're talking about the correlation between public holidays and annual leave and the reduction in the public holiday penalty as compared to the increase in the annual leave provision. So the ANF have submitted that no such trade-off existed.

PN117

Whilst it appears true that no express trade-off is evident, nonetheless, where the greater annual leave amount is available there generally exists lower payments for public holidays. We have altered the exposure draft by reducing the payment of public holidays to 200 per cent. So again, in that situation where there has been a reduction of the public holiday entitlement, public holiday penalty, that reduction will occur over the full five years of the transitional period, whereas for the employers, the additional cost burden that would be required to be met in regards to annual leave would need to be met on and from 1 January 2010.

PN118

THE VICE PRESIDENT: Subject to the operation of the enterprise agreements?

PN119

MR EBERHARD: For our client, certainly, yes, your Honour.

PN120

THE VICE PRESIDENT: Then there might be a question of: how long do those agreements have to run, or remain in operation?

PN121

MR EBERHARD: Again, we provide details of each individual agreement, the name of the agreement and the nominal expiry date. Some of the agreements, we haven't actually been able to determine the nominal expiry date because in some instances it was 36 months after the date that it was lodged, whether it be the office of the employment advocate or whether it be the Workplace Authority. So I'm trying to actually generate that information through the library or through the information services through the tribunal here. It has been difficult because we haven't been able to expressly find out that. But the (indistinct) that can be seen by the agreements that are made is that they have different nominal expiry dates. Some will have a nominal expiry date in this year and others have a longer life in that particular respect.

PN122

But we say that there is a potential burden on employers in respect to bargaining, in respect to - there is additional cost that will be imposed on employers through this particular provision, save and except if it was transitioned, then at least the additional cost would be able to be offset over a period of time in regards to that. We think that there is no confusion between the provision, the provision is readily understandable between anyone who would read that. We acknowledge that there is a gap between - in regards to exhibit B2, in the table, we acknowledge that there is a gap between the various agreements that exist and the rates that are payable in the modern award.

PN123

From our point of view, all that necessarily reflects is that that's the outcome of the bargaining process, and it doesn't really do much to enhance this particular provision. You know, if the ANF were to stand up and say that they're not seeking any further increase, I think our clients would be quite happy in that sort of regard, but I didn't hear Mr Blake say that, so I'm being a bit facetious in that sort of regard. But I don't think that helps in regards to - - -

PN124

THE VICE PRESIDENT: Your clients say, given the impact of the modern award and the need to have regard to that in terms of the BOOT test, the quantum of wage increases has to be considered in that context.

PN125

MR EBERHARD: Well, the other thing that you can say is that if there is a percentage in regards to about 13 - it starts at about 13 per cent differential for an enrolled nurse and a registered nurse at level 1 is about 15 per cent - then there is a margin that exists between the award and the agreement at the moment. One would presume that any further agreements would be increased again because that's generally what happens through an agreement.

PN126

So that margin would probably, subject to whatever decision the tribunal hands down in regards to the minimum wages later on this year - that percentage would probably increase somewhat, or at least stay relatively the same. There is a margin that exists for the better off overall test, but at the end of the day the situation it gets down into is that the annual leave provisions is just but one phase of the additional cost that exists as a result of the making of the award for the employees that we're talking about.

PN127

Mr Blake highlighted a couple of allowances that were no longer payable, the telephone allowance and the in-charge allowance, et cetera, those sorts of allowances. Well, from our clients' point of view, annual leave is just but one of the additional costs that occur. I think in our submissions we estimate that the additional cost of annual leave is about 10 per cent of the total additional cost that occurs as a result of the introduction of the award itself. So on that sort of basis, certainly it's a cost, but it's not the only cost and it's not a significant proportion of the cost, it's, we submit, a relatively minor part of the overall cost, but it is something, given the comments from the minister, that we think needs to be reviewed and needs to be considered and needs to be transitioned over the transitional period. If the tribunal pleases.

PN128

THE VICE PRESIDENT: Mr Eberhard, just looking at the summary of agreements attached to your submission of 1 March, am I right in observing that there appears to be a variety of different provisions in those agreements? Often there is an entitlement to five or six weeks' annual leave where staff members work over seven days of the week, but in other cases four weeks' leave. There doesn't seem to be a standard within those agreements. Is that correct?

PN129

MR EBERHARD: 13 of the 14 agreements have as a basic entitlement four weeks of annual leave. That one other has five weeks of annual leave. Then in one form or another, your Honour, you are correct that they provide for additional leave over and above that basic entitlement, whether it be for working shift work or whether it be for working Saturdays, Sundays, public holidays. In some instances it's a combination of both, in other instances it's one or the other. So it depends on how the particular agreement is drafted in regards to that.

PN130

Just as an example, the ACH Group, which is the first one referenced on page 14, you get an additional one week of annual leave if a shift worker, and a "shift worker" means:

PN131

An employee who is employed in a business in which shifts are continuously rostered 24 hours a day for seven days a week, is regularly rostered to work those shifts, and regularly works on Sundays and public holidays.

PN132

Whereas Anglicare South Australia, you get an additional two weeks of annual leave for:

PN133

An employee who is regularly rostered to work over seven days of the week, including -

PN134

that's basically the same -

PN135

Sundays and public holidays.

PN136

But there is a similarity. But four weeks is the basis entitlement, and then there are additional provisions on top of that for employees who work shift work and/or Saturdays, Sundays, public holidays or, as I said, in combination thereof.

PN137

THE VICE PRESIDENT: If five weeks became the basic entitlement by the time the agreements came up for renewal, wouldn't the employers be able to say, "Well, this is an extra benefit that you were going to get as a result of making the new agreement, and we could either recognise that basic entitlement or otherwise recognise it in a wage increase"? But if it's one way or the other, it's part of the bargain that is made in renewing the agreements. There would be extra benefits of one sort of another, but an ability to have regard to the new minimum entitlements.

PN138

MR EBERHARD: With respect, it may well be looked upon in another way, and that is that, "The fifth week is the entitlement and we are entitled to a fifth week of annual leave because that's what the award tell us that we are entitled to." So on that sort of basis it may not be that the employers could say to the nurses in that particular instance that, as a complete example, "We are offering a percentage increase of 3 per cent, we're not offering more because the annual leave provisions are going to commence operation from the date that the agreement is approved."

PN139

I would have thought that in that particular regard it would have been harder for the employers to seek to reduce or to continue on with the four weeks because then they would have to find some sort of compensation for that fifth week of annual leave in regards to the better off overall test. But I would think that the employees' would be, "We're entitled to the fifth week of annual leave and we want that reflected in our agreement as of the day that the agreement commences operation."

PN140

THE VICE PRESIDENT: Are all of the agreements that you've mentioned agreements that only apply to nurses that don't apply more broadly?

PN141

MR EBERHARD: It's an ANF agreement, so it applies to the nursing personnel.

PN142

THE VICE PRESIDENT: That's exclusively employees who would be covered by the modern Nurses Award.

PN143

MR EBERHARD: That's correct, yes, your Honour. I think I'm right in saying that the other employees of the employers are covered by the awards that applied in South Australia pre the making of the Aged Care Award on 1 January 2010.

PN144

THE VICE PRESIDENT: Yes.

PN145

MR EBERHARD: Thank you.

PN146

MR BLAKE: Your Honour, can I just make - - -

PN147

THE VICE PRESIDENT: Yes, Mr Blake.

PN148

MR BLAKE: - - - a brief point that just arose from your comments about the existence of annual leave provisions in the various agreements that currently apply to the South Australian employers and the nurses. Just two points I'd like to make in relation to that: each of the agreements do address the issue of annual leave. As I (indistinct) only two of the agreements of the 13 maintain annual leave in the terms of the previous award. That does suggest in our view, your Honour, that both the employer and the employees in relation to the annual leave provisions believe that the previous award was deficient.

PN149

The only other matter I wish to make is that I don't want the tribunal to go away with the view that any of the aged care nurses, other than perhaps the director of nursing, would be a Monday-to-Friday, 9.00-to-5.00 worker. To work in the aged care sector in a nursing capacity you would be obliged to make yourself available to work weekends and public holidays as well as to work shift work. So I think that context needs to be stated. Thank you, your Honour.

PN150

THE VICE PRESIDENT: Yes, thank you, Mr Blake. You can have the last word if you like, Mr Eberhard.

PN151

MR EBERHARD: I think it should be, sir. I don't think I have anything further to add, your Honour, apart from the fact that in regards to the two questions that you did raise and that we undertook to provide further responses on, if we could be given, say, a week after the date that the transcript is made available to the parties to provide that particular material to the tribunal and also to the ANF. That would be appreciative.

PN152

THE VICE PRESIDENT: Yes. I'd rather fix a date, and if there's some particular difficulty you can raise it and it can be considered then. Not too sure when the transcript might be available, hopefully not too far into the future. If we said by the 31st of the month, that hopefully should give you a week with the transcript and a week to provide something.

PN153

MR EBERHARD: I'm happy for it to be Friday of next week. I'm just trying to figure out - I presume that the transcript will be available sort of sometime this week, and then that will give us five working days to consider our response?

PN154

THE VICE PRESIDENT: Yes.

PN155

MR EBERHARD: I think that would be more than adequate, your Honour.

PN156

THE VICE PRESIDENT: Let's leave it informal on that basis, if you could provide it as soon as you can. But a guideline of about a week after the transcript is satisfactory to me. Perhaps a week thereafter, anything further from the ANF, Mr Blake.

PN157

MR BLAKE: Sure.

PN158

THE VICE PRESIDENT: Yes. Okay, we'll leave it on that informal basis.

PN159

MR EBERHARD: Thank you, your Honour.

PN160

THE VICE PRESIDENT: I'll consider that material and the other submissions of the parties and generally reserve my decision in this matter. Proceedings are now adjourned.

<ADJOURNED INDEFINITELY [11.15AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #E1 SUBMISSIONS FROM 01/03/ PN36
EXHIBIT #E2 LETTER TO PRESIDENT CONCERNING NUMBER OF ISSUES ARISEN DURING COURSE OF AWARD MODERNISATION PROCESS PN41
EXHIBIT #E3 SUBMISSIONS IN REPLY DATED 12/03/ PN43
EXHIBIT #B1 WITNESS SUBMISSION 22/02/10 PN70
EXHIBIT #B2 TABLE DATED 15/03/2010 PN86