TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 41237-1

SENIOR DEPUTY PRESIDENT ACTON

AM2010/257

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

Application by Master Builders' Association of New South Wales, The
(AM2010/257)
Building and Construction General On-site Award 2010

(ODN AM2008/15)
[MA000020 Print PR986361]]




Melbourne

10.11AM, FRIDAY, 25 FEBRUARY 2011

THE FOLLOWING PROCEEDINGS WERE CONDUCTED VIA
VIDEO CONFERENCE AND RECORDED IN MELBOURNE

Reserved for Decision

PN1

THE SENIOR DEPUTY PRESIDENT: I think I'll take the appearances again.

PN2

MR R. CALVER: If it please the tribunal, Calver, initial R, for the applicant.

PN3

MR S. MAXWELL: If the tribunal pleases, Maxwell, initial S. I appear on behalf of the Construction, Forestry, Mining and Energy Union.

PN4

THE SENIOR DEPUTY PRESIDENT: Sydney?

PN5

MR G. NOBLE: If the commission pleases, Noble, initial G, for the AMWU.

PN6

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN7

MR A. KENTISH: If it pleases, Kentish, initial A, for the CEPU.

PN8

MS Z. ANGUS: If it please the tribunal, Angus, initial Z on behalf of Australian Workers Union.

PN9

MS A. MATHIESON: If it please the tribunal, Alana Mathieson (indistinct) association.

PN10

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Calver?

PN11

MR CALVER: Thank you, your Honour. Master Builders New South Wales relies on its and Master Builders Australia previous submissions filed in this matter and in matter AM2010/225. We ask the tribunal to please take into account the material filed in respect of the dismissed application and the prior submissions in that and in this matter. Master Builders, in accordance with the directions, has filed a further submission on 21 January 2011. In addition following the hearing of 7 December 2010 Master Builders lodged a further submission in response to a question raised by your Honour on 13 December 2010. It is your intention that those submissions be marked, your Honour?

PN12

THE SENIOR DEPUTY PRESIDENT: Yes. I think that's a good idea. Let's go through them to make sure I've got them all, Mr Calver. What's the first one you would seek to tender?

PN13

MR CALVER: Well, the one lodged on - just referred to as December 2010 that was forwarded to Fair Work Australia on 13 December and it's entitled AM2010/257 Section 160 Application by Master Builders Association of New South Wales to Vary the Building and Construction General On-site Award 2010. It contains a table that was provided in order to have before the tribunal each and every clause of the predecessor awards to the award under consideration today indicating the clause that dealt with redundancy and whether or not that clause had emanated from the termination change or redundancy case or had emanated from the arbitral history which had led to employee initiated redundancy and it distinguishes those two categories in each of the predecessor awards. So that is the first, your Honour.

PN14

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Calver. I've mark that as MBA New South Wales 3.

EXHIBIT #MBA NEW SOUTH WALES 3 SUBMISSION FROM MASTER BUILDERS DATED /12/2010

PN15

MR CALVER: Thank you. Then, your Honour, in response to the directions that were issued regarding the hearing today we filed a further submission dated 21 January and that contains a number of issues, some of which arose again out of the questions that you asked on the transcript on 7 December and others are an expansion of the arguments attendant upon those questions. That's the submission lodged on 21 January I reiterate.

PN16

THE SENIOR DEPUTY PRESIDENT: I'll mark that as MBA New South Wales 4.

EXHIBIT #MBA NEW SOUTH WALES 4 SUBMISSION FROM MASTER BUILDERS DATED 21/01/2011

PN17

MR CALVER: I might then proceed, your Honour.

PN18

THE SENIOR DEPUTY PRESIDENT: Yes, Mr Calver.

PN19

MR CALVER: Master Builders today asks the tribunal to vary the modern Building and Construction General On-site Award to include a provision that makes it clear that for the purposes of clause 17 of the award service counts prospectively from 1 January 2010. We say that there is an ambiguity in clause 17 particularly as to how continuous service as set out in clause 17.3 of the award is calculated. The amendment that we seek, the proposed variation, clarifies the basis on which period of service under the award is to be calculated by the proposed insertion of new clause 17.8 which makes the calculation of period of service clear.

PN20

I should add that it also aligns clause 17 with clause 2.1 of the award which-plainly states, "This award commences on 1 January 2010." In that regard we have drafted the provision so as to accord with our understanding of the law and I note, your Honour, that this morning my friend Mr Noble from the AMWU will be relying on a number of cases including one Geschke I think it is v Del Monte Home Furnishers Pty Ltd (1981) VR 856 which Mr Noble has kindly made available to the tribunal and to the parties today. At the bottom of page 3 of that judgment we say that our drafting accords with the proposition of law there articulated by Gobbo J where he says:

PN21

There is little doubt that legislation should not ordinarily be understood as applying to past events so as to affect rights or liabilities defined by reference to the past events.

PN22

Those past events in this context are employment prior to 1 January 2011 and that should not invoke redundancy in respect of the modern award. The use of the term "legislation" in that passage does not in any way detract from the matter being an award interpretation because Master Builders submits that awards are now creatures of statute not artefacts of disputes between parties. The tribunal already has before it a great deal of material that sets out the rationale for the variation sought. The matter is complex and hence last time we had Mr Stanley represent us.

PN23

There are a number of fundamental issues however that we believe have been misconstrued by those in opposition partly because of that complexity. So it is my intention before I go to the nub of some of the issues raised in the written submissions to revisit some of the foundational propositions so that I might counter the points that were made in reply to our submission of 21 January 2011. Hence the starting point is that section 119 of the Fair Work Act establishes a new minimum payment regime for employees who are made redundant after 1 January 2010. It's clear that that is a new regime that applies only as a safety net provision after 1 January 2010 - the legislative intent of the Fair Work Act. "Redundancy" in 119 is defined as:

PN24

"Termination at the employer's initiative because the employer no longer requires the job done by the employee to be done by anyone except where this is due to the ordinary and customary turnover of labour or because of the insolvency or bankruptcy of the employer.

PN25

The definition which is derived from the TCR case. This subsection is important because in the absence of a separate statutory definition it sets out what redundancy pay comprises and emulates the definition in the repealed Work Choices legislation. Redundancy pay carries the definition that I've just described in the Fair Work Act and it may be usefully contrasted with the definition in clause 17.2 of the award which is of a different complexion and has been labelled as employee initiated redundancy elsewhere and particularly that's come through in the submissions of the AMWU where they refer to that term as derived from the Work Choices explanatory memorandum.

PN26

Section 119 subsection (2) then sets out the scale of payment in respect of a redundancy pay period. It also refers to a table which calculates the amount of redundancy pay by reference to the employee's period of continuous service, a term very much at issue today. The scale of payments made under section 119 subsection (2) is taken from the 2004 redundancy case. When calculating redundancy pay under the NES the obvious question that arises in the context of the current application is whether the service of the employee prior to 1 January 2010 is counted.

PN27

Does the relevant period of continuous service begin on the date an employee's employment commenced or 1 January 2010 inclusive of employees who started before that date? As is evident from material already before the tribunal, the foundational propositions about the calculation of the period of continuous service for the purposes of the NES are found at subclause (4) of item 5 of schedule 4 of the transitional legislation. The answer is found in the transitional legislation in the Fair Work (Transitional Provisions and Consequential Amendments) Act which clearly sets out that any service prior to 1 January 2010 does not count as service for the purpose of calculating an employee's NES entitlements except where the employee had an entitlement to redundancy pay before 1 January 2010.

PN28

That test is fixed notwithstanding the provisions of section 22 of the Fair Work Act which defines "continuous service". That section defines "continuous service" in a manner similar to the definition as set out in clause 3.1. It takes its life, it takes its meaning, it takes its application from other provisions of the Fair Work Act just as clause 3.1 in the modern award doesn't have a life of its own unless it is used in the context where it is applied. So we say that the way that section 22 interacts with the provision in the transitional legislation is analogous to our interpretation of the manner in which continuous service as defined in the award interacts with clause 17. That is the definition itself does not provide and cannot provide an answer to timing. It does not in any way indicate, as the CFMEU would have it, that the full bench believed that prior service should be taken into account when calculating redundancy under the award.

PN29

Under the transitional legislation to count prior service under the NES redundancy provisions the relevant entitlement must have been expressed in the terms and conditions of the employment that applied to the employee's employment. In other words more simply the employee should have had an entitlement to redundancy pay before 1 January 2010 in order to count service prior to that date when calculating the entitlement to redundancy pay under the NES. That's fairly straightforward. Clearly if there was a genuine entitlement under the previous industrial instrument or terms of conditions of employment that govern the employee's employment immediately before 1 January 2010, their prior service counts under the specific provision where the NES entitlement is not at issue. It counts because the statute reflects that point.

PN30

But the questions thus arise in the context of the current application as the first whether or not that provision can apply to those who are entitled to the different scheme under clause 17 and we clearly say it can't and, secondly, whether any other law assists with a similar interpretation that can be applied to clause 17. The first question is clearly a no. It's fairly simply answered. The starting point in answering that question is section 123 subsection (4) paragraph (b) of the act. That paragraph indicates that subdivision (b) of division 11 of the act does not apply to an employee to whom an industry-specific redundancy scheme in a modern award applies. This provision therefore permits modern awards to contain an industry-specific redundancy scheme.

PN31

The act defines an industry-specific redundancy scheme in section 12. It is defined to mean, "Redundancy or termination payment arrangements," so that's a very important concept. It was inserted via a senate amendment to allow employee-based redundancy to be able to be subsumed into the term. It's defined to mean, "Redundancy or termination payment arrangements in a modern award that are described in the award as an industry-specific redundancy scheme."

PN32

As I said, the words "termination payment" are important. Those words mean that the definition of redundancy in the NES need not apply to the scheme set out in a modern award. It means that the fact that the definition of redundancy in the NES was the only allowable form of redundancy permitted under the prior regime is overturned in respect of this modern award. That is how the law tolerates a different definition of redundancy in clause 17.2 compared with the definition in section 119(1) which I started with.

PN33

The broad definition needs to be read together with subsection 121(2). That permits a modern award to specify the situation and section 119 does not apply to termination of an employee's employment. These provisions then permitted the Australian Industrial Relations Commission as it was to invoke section 141 of the Fair Work Act. That provision sets out that a modern award may contain an industry-specific redundancy scheme, but the scheme in the award is part of the award modernisation process subject to some limitations, notably not extending the scheme to classes of employees it did not previously cover and that is not at issue here.

PN34

In invoking section 141 in paragraph 75 of the Australian Industrial Relations Commission decision dated 3 April 2009 - your Honour, that's (2009) AIRCFB 345 already introduced into these proceedings, the full bench stated that, "We have decided to include the current industry award redundancy provisions in the modern award as an industry-specific redundancy scheme." It was a current industry award redundancy provision in the sense that it existed in print in the award but was not a provision which had any cogency or application because it was non-allowable as I will return to. That does not in any way derogate from the proposition that they had included the current industry award redundancy provision albeit non-allowable.

PN35

The commission then in paragraph 76 of that decision mentions that clause 141 of the then bill which was ultimately enacted as 141 which I have just referred to, permitted the inclusion of such a scheme in the modern award and the commission referred to the consolidated request which dealt with the issue of an industry-specific redundancy scheme in paragraphs 36 to 39 of that request. Importantly at paragraph 77 of the decision the full bench said:

PN36

We are satisfied that the redundancy scheme in the Building Industry Award redundancy provisions is an established feature of the building and construction industry. Having regard to the arbitral history and the general application of the current redundancy prescriptions within awards in the building and construction industry, the scheme is properly described as an industry-specific redundancy scheme.

PN37

The full bench then provides an explanation of the rationale for the inclusion of the industry-specific redundancy scheme inclusive of a lesser maximum than set out in the NES in paragraphs 78 to 82 of the decision. But nowhere, and this is most important, nowhere in the explanation does the full bench address the issue of treatment of prior service. It is silent as to that matter. On its face therefore, as I indicated earlier, clause 2.1 of this award commences on 1 January 2010. On its face the award operates from 1 January 2010 and so does clause 17. We are thus led to the argument that unless there is a statutory provision which is of the kind for certain employees that entitles them to rely on prior service, whether employment arrangements previously contained an entitlement to redundancy pay or if one can be imputed, service must apply from 1 January 2010.

PN38

The unions, notably the CEPU, press the tribunal to not adopt this approach not because they argue that the NES provision incorporates the modern award provision but because in clause 17.7 relating to transfer of business the subclause contains a deeming provision and they place some importance on the fact that the tribunal indicates that where a business is before or after the date of this award transferred from an employee the fact that it refers to prior events to somehow vindicate the whole clause taking into account prior service. It is in fact the opposite. It is in fact at the nub of our interpretation that a deeming provision in respect of the highly specific transfer of business provision is necessary.

PN39

We say this counters the arguments at paragraphs 11 to 16 of the CEPU's 16 February submission and in fact reinforces our argument rather than detracting from it. A deeming provision would not be necessary if the matters pressed by the unions were clear and there was a clear indicator that prior service counts for all purposes under clause 17. No such indicator is able to be pointed to, your Honour. The CEPU in paragraph 2.4 of its recent submission seeks to argue that the NES entitlements being dealt with under the transitional provision is not relevant to interpretation of clause 17.

PN40

We say it must be relevant. It must be for the simple reason that it excludes those covered by a modern award. It excludes those covered by the modern on-site award scheme and there is no other legitimate means either from the full bench or from any specific statutory provision to apply the same interpretation to clause 17. It is highly relevant because of the matters it excludes. The modern award clause is not able to fall within subclause (4) of clause 5 of schedule 4 of the transitional legislation. That provision refers specifically to subdivision (b) of division 11 of the NES which, as I have illustrated, has been excluded from consideration in respect of an industry-specific redundancy scheme.

PN41

Hence even though modern awards supplement the NES per section 55 subsection (4) of the Fair Work Act that does not in any sense assist in the current context. only to point to the exclusion of modern award entitlements from the transitional provision referred to. As Master Builders has expressed in previous submissions, there is an omission in the law, a lacuna. There is no specific provision which deals with prior service under an industry-specific redundancy scheme.

PN42

It's quite important in our argument that a specific provision in the face of general provisions was necessary to preserve prior service because the argument against a specific provision is a general provision which mirrors the Acts Interpretation Act which we say has no application currently because in the same way that the definition of continuous service means something more active to make engaged with a test or an act, just so continuous service or prior service cannot be a right that stands on its own to be preserved in the manner of legal rights of another kind.

PN43

So to the second question. The question then devolves to whether or not there is a general provision which would say prior service is a right given that the statutory provision which carries that specific matter for the NES is of no utility in the current context. The further arguments today therefore centre around this issue and the issue of whether or not there is another legal means to reach that conclusion. What legal mechanisms are there which would provide the same rights to employees that are specifically preserved in the context of the NES general redundancy scheme? Master Builders contends there are none. The cupboard is bare.

PN44

One of the issues which is raised by the unions is that the full bench had the intention of including prior service in its interpretation of service for the purposes of clause 17. Master Builders is alleged in paragraph 2.7 of the CFMEU's submission of 16 February 2011 to have committed, "Blatant misrepresentation of the facts," in relation to the intention of the full bench. We reject that matter out of hand. As I have indicated, the full bench in its 3 April 2009 decision is completely silent as to that matter. The other unions point, as I said, to the transfer of business provision which contains a deeming provision to reach the result that would otherwise be required.

PN45

In paragraphs 2.7 and 2.8 of its submission the CFMEU points to the definition of "continuous service" and to the specific provisions of the award including, again, 7.7. These provisions do not throw light on the issue of prior service. They do not indicate intent as to this matter. They cannot. The definition of "continuous service", just as the definition under section 22, stands on its own feet. It needs another provision to invoke a mechanism of timing to include that definition and the test which is of a legal nature and which does or does not preserve rights.

PN46

The clause is silent on the issue of timing in respect of continuous service just as the full bench was in its decision. There is nothing from anything that is before the tribunal extrinsically to that decision which could give an indication whatsoever of an imputed intent of the full bench to apply a similar provision as appears in the transitional legislation in respect of the NES entitlements. Just as the definition of "continuous service" in the Fair Work Act needs the specific provision in the transitional legislation to give the interpretation that the unions urge, so is silence or omission in respect of the application of similar principles to the on-site award a resounding indication of what is intended: 1 January 2010, just as it says, in clause 2.1. The point I started at.

PN47

Nothing in paragraph 2.7 or 2.8 can provide any light as to the intention of the full bench and we reject outright, as the CFMEU assert, there can be no doubt as to the intention of the full bench that was to include all service with their relevant employer including service prior to 1 January 2010 except where the specific inclusion applied. Nothing turns on the word "all". "All" does not indicate the past. It merely indicates the service of the kind that is continuous. It is not a temporal indicator. That word cannot and does not have the necessary intent. I reiterate that the decision is silent and there was no specific statutory provision which vindicates such an interpretation, nor is it able to be extracted from the words of clause 17 no matter how hard that stone is squeezed.

PN48

The specific issue of a statutory provision is also revisited by the CFMEU in paragraphs 2.12 and 2.13 of its submission. The CFMEU takes the tribunal to clause 23 of schedule 3 of the transitional legislation. The provisions described are clearly designed to ensure that agreement-based transitional instruments do not have a detrimental effect on an employee when compared with the redundancy benefits they would otherwise be entitled to under the modern award. This is a highly specific provision which underlines Master Builders' point about the need for a specific provision to deal with each specific issue just as with our proposed clause 17.8.

PN49

It is not apropos the current application. It merely illustrates that for those sorts of contingencies there needs to be a specific provision to deal with them otherwise modern awards may have delivered a detriment. The CFMEU cannot argue that this specific provision which deals with the position under agreements where a detriment might be incurred through moving to the modern award can generate a more general conclusion about intent. It is completely irrelevant to the current application save that it is another provision where the statute is quite clear as to its intent and which manifestly distinguishes the current terms of clause 17.

PN50

At the risk of repetition, the CFMEU argument underlines our point that there is no specific provision dealing with the circumstance currently confronting the tribunal. In citing its example the CFMEU merely emphases Master Builders' argument rather than detracting from it. The CFMEU in section 3 of their submission seek to undermine the argument raised about item 7 part 2 of schedule 3 of the transitional legislation as we have articulated in our submission of 21 January and, your Honour, you might recall that that debate was sparked by your question in the prior proceedings about whether or not the transitional legislation contained an overarching provision that was inserted in respect of the preservation of prior rights. The terms of that provision, if you want to examine them, your Honour, are set out at paragraph 4.2 of our 21 January 2011 submission.

PN51

There are a number of arguments which Master Builders applies in this context which the unions have not been able to, we contend, successfully rebut. One of the reasons that the general saving provision does not apply is that there was no redundancy entitlement to preserve. There was no redundancy entitlement to preserve arising from the award that founded the modern award. The provision which has been inserted by the full bench was formerly not an allowable award matter. It did not have any application. The central relevance of Yirra's case, which has been much debated in these proceedings, relates to its effect on allowable award matters. We say that it cannot be plainer that the majority found that clause 16 does not deal with an allowable award matter. That is a statement which we say is not able to be challenged or impugned. The court majority found that clause 16 of the National Building and Construction Industry Award did not deal with redundancy pay as it was not a clause that dealt with redundancy as defined in the then act.

PN52

It was not allowable and hence could not be defined as an employee right. There were no rights which arose under the NBCIA akin to those now in clause 17 because by operation of law it was not part of the award. Accordingly, no rights could have been accrued to be preserved. Nothing in the AMWU's submission, which addresses that issue, takes away from that proposition. Again, we say that the submissions of the union enhance our argument. Paragraphs 5, 6 and 7 or the AMWU's submission traverse this issue. At paragraph 6 of the AMWU submission, extracted is the explanatory memorandum that I referred to before the Work Choices bill. Sorry of paragraph 138, which refers to the explanatory memorandum of the Work Choices bill.

PN53

It articulates that parliament was well aware that the term "redundancy pay" had been applied in awards for both employer initiated and employee initiated redundancies. Currently it's clear that clause 17 is a clause of the type where employee initiated redundancies are admitted and in fact are at the nub of the provision. One of the purposes of section 513(4) was to prevent awards dealing with the latter category of redundancy. It's in the AMWU's submission. That was the intention, that's what the majority in Yirra's case had taken up, furthermore such award provisions as were to be permitted could only apply to respondent employers who employed 15 or more employees. Were provisions such as clause 16 to be treated as incentive based payments, the legislator's purpose in enacting 514(3) would be frustrated.

PN54

So the AMWU have referred to a part of Yirra's case which completely underlines and reinforces Master Builders' argument. Paragraph 142 we have relied upon so heavily cannot be overlooked. Cannot be overlooked. It's fundamentally easy to take the ratio decidendi because here it is, your Honour. Clause 16 of the NBCIA, obviously, which replicates clause - which is mirrored in clause 17 does not deal with an allowable award matter. Does not deal with an allowable award matter. It therefore ceased to have effect on 27 March 2006 to the extent that it contained provisions falling outside of section 513(1)(k) and it did not require Yirra to make a redundancy payment to Mr Summerton.

PN55

As explained in the prior paragraph, the legislator was clear that it did not want provisions that related to employee initiated redundancies to have effect In Yirra's case, albeit a majority judgment but still binding on the tribunal, makes that absolutely and fundamentally clear. The definition of redundancy set out in the NES triggers redundancy pay. Therefore the broader definition set out in clause 16 of the NBCIA and clause 17 of the on-site award could not be said to confer an entitlement to redundancy pay as then defined by statute immediately before 1 January 2010. Instead it conferred a payment that was wider than legitimate redundancy as defined in the then act and was not allowable.

PN56

There is not an interpretation which could be otherwise drawn from Yirra's case and even though my friends on the other side might not like that proposition, Work Choices cannot be ignored. We're not lamenting for the days of Work Choices as some would have it, but we are indicating that that was the law. So far as retrospectivity is concerned, we stand by our argument in paragraph 4.5, that even if we are wrong, and we don't concede that for a moment, about rights having accrued in the relevant sense which we do not - we do not concede that. We do not. They could still not be rights in the relevant sense in that they could be preserved because there was no crystallising event before 1 January 2010.

PN57

In other words, as I said earlier, continuous service or prior service stands as a concept on its own. It's not a right. Nothing attaches to that. You need continuous service to be applied to a particular context before it can be preserved. There would have had to have been some crystallising event whether it have to be some means to translate that as a right. So subject to specific transitional arrangements in the transitional legislation and in modern awards themselves such as schedule A of the on-site award, modern awards came into force at 1 January 2010, for all incorporated employees and for all unincorporated employees established after that date.

PN58

That is fundamentally clear. It is no more clear than in clause 2.1 of the on-site award. Master Builders believes that nothing that the unions argue takes away from the fundamental proposition that clause 17 also commenced on 1 January 2010 and that in the absence of the clause proposed in our application a counting of service prior to that date is in no way vindicated other than in the deeming provision which they rely on like a drowning man clutching to a raft. If it please the tribunal.

PN59

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Calver. Who's going next?

PN60

MR MAXWELL: Your Honour, I was just wondering whether - I expect if the HIA is supporting Mr Calver it may be appropriate for them to go next.

PN61

THE SENIOR DEPUTY PRESIDENT: Ms Mathieson?

PN62

MS MATHIESON: Thank you, your Honour. Yes. We'd just like to appear in support of the variation in the manner sought by the applicant, duly support the submissions made by the applicant in this matter today. We also rely on prior submissions dated 5 November. They were filed previously in relation to this and our submissions do specifically express support for the variation. We also rely on our verbal submissions made on 7 December which support the variation application to be found at paragraph 185 of the transcript.

PN63

Other than that we don't have anything further to add other than to note that as noted by Mr Calver, the modern award and the act doesn't contain any specific transitional provision but the CFMEU did seek to include transitional provisions relating to redundancy provisions, and they were not incorporated into the modern award as they were in other awards. So in the absence of any specific transitional arrangements, it is our submission that this cannot be calculated prior to the operative date of the award. May it please the tribunal.

PN64

THE SENIOR DEPUTY PRESIDENT: Who's going?

PN65

MR MAXWELL: Thank you, your Honour. Your Honour, the CFMEU had a written submission which we filed on 16 February 2011. We'd seek to rely on that written submission and the previous submissions that have been filed in regard to the application that was dismissed but which were dealt with at the hearing on 7 December last year. 

PN66

THE SENIOR DEPUTY PRESIDENT: I'll mark the submission of 16 February 2011 as CFMEU2.

EXHIBIT #CFMEU2 SUBMISSION OF CFMEU DATED 16/02/2011

PN67

THE SENIOR DEPUTY PRESIDENT: Yes, Mr Maxwell.

PN68

MR MAXWELL: Thank you, your Honour. Your Honour, in terms of the passionate submissions of Mr Calver today, unfortunately we don't think they add anything to his written arguments and written submissions that the MBA have previously made. The main basis of the MBA's claim is the position that because of the Yirra case, that employees that were previously covered by the building and construction industry award and similar awards that had an identical redundancy provision did not have an entitlement to redundancy prior to 1 January 2010.

PN69

We submit that that is false, that clearly in terms of an industry scheme, which was what the full bench was recognising in terms of the redundancy clause, those employees covered by enterprise agreements, that are reflective of that clause does entitle them to redundancy. Employees that were covered by state awards that are now part of the federal system from 1 February 2011 had an entitlement to redundancy in all situations and we submit that Yirra does not support the contention made by the MBA that employees covered by the building and construction awards did not have an entitlement to redundancy where they were made redundant at the initiative of the employer.

PN70

Now, we know that Mr Calver has referred to the paragraph in Yirra's case, the final paragraph - sorry, the - paragraph 142, and I think it's worth noting that as an issue which has been put to the bench previously, that the actual wording was that the way clause - according to the full bench - sorry, according to the bench in the Yirra case, that clause 16 did not do in an allowable matter, the proviso was that therefore it ceased to have effect on 27 March 2006 to the extent that it contained provisions falling outside section 513(1)(k) and did not require Yirra to make a redundancy payment to Mr Summerton. It has to be realised that that in the Summerton case what was being claimed was that the entitlement to a redundancy payment at the termination of the employee was actually an incentive based payment, that was what the full bench in that matter was dealing with, but if we look at 513(k) which is found in paragraph 34 of the Yirra case, redundancy in section 513(1)(k) is confined to the following two situations.

PN71

(1) the termination is by an employer who has 15 or more employees, is on the grounds of operational requirements or (2) the termination is by an employer of 15 or more employees because the employer is insolvent. So using the wording of the full bench, they said that redundancy that does not fall within those two provisions ceases to have effect. So clearly the full bench in the Yirra case or the majority decision recognised that employees had an entitlement to redundancy where the redundancy fell within section 513(1)(k) of the then Workplace Relations Act. This was a position that was also adopted by his Honour Spender ACJ in paragraph 37 of the Yirra case where he stated:

PN72

I accept that clause 16 in its terms provides for redundancy pay where the circumstances of the termination of employment do fall within section 513(4). In those circumstances, payment pursuant to clause 16 will be allowable after 26 March 2006.

PN73

He then went on that, "However, redundancy pay would not be payable under clause 16 where the employer initiates the termination for operational reasons or is insolvent but does not have 15 or more employees." So in terms of the Yirra case, the provision that the Federal Court found was not allowed or ceased to have effect was whether termination or whether redundancy fell outside 513(1)(k). So we submit that in terms of people previously covered by the building and construction award, they clearly had an entitlement where the redundancy fell within section 513(1)(k) and that was not determined as not applying by the full bench in the Yirra case. Your Honour, Mr Calver took the tribunal through section 119 of the act this morning.

PN74

Well, as recognised previously by the MBA, section 119 doesn’t apply in regard to the redundancy scheme that is defined as such - sorry, that's determined as such that in a modern award. Now, in regard to the issue of service, we say that clearly the act deals with service which is found in section 22 of the Fair Work Act which sets out the general meaning of service. We also note that there is nothing in the act that determines - in the Fair Work Act that determines that service prior to 1 January 2009 does not apply, although there is a provision in the transitional act which deals with the specific question of redundancy where an employee did not have an entitlement to redundancy prior to 1 January 2010.

PN75

Now, we say that even if you were to draw a common position in regards to that schedule of the transitional act, in this case it wouldn't apply because the employee still had a redundancy entitlement prior to 1 March 2010. Whilst it wasn't identical, there is nothing in the act that requires the tribunal to only reflect identical terms in a modern award. We have also, in our written submission dealt with the intent of the legislation in regards with the comparison between transitional instruments and the modern award and the reference in paragraph 2.11 of our written submission that the general aim of that legislation was to ensure the transitional instruments would no longer apply where they were detrimental to an employee in regard to the new safety net.

PN76

Now, whilst item 23 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 provided the no detriment rule particularly in regard to the NES, as our submission points out there were similar provisions that dealt with redundancy where people were previously covered by a transitional agreement, and the legislation provides in sub item 38(5) that:

PN77

An industry-specific redundancy scheme in a modern award applies to an employee and a redundancy provision that continues to apply to an employee under sub item (2) is detrimental to the employee, in any respect, when compared to the scheme in the modern award then the scheme in the modern award prevails over the redundancy provision, to the extent that the redundancy provision is detrimental to the employee

PN78

So we say that based on the provisions of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 that it was clearly the intention of parliament of the primacy of industry specific redundancy clause provisions in modern awards. Now, your Honour, the final point that we wish to make - sorry, the two final points we wish to make today is that - is first of all we say there is no lacuna in the legislation, that if it was the intention of parliament that service would not be counted prior to 1 January 2010 where there is a redundancy scheme, then it is quite open to the parliament to include such a provision. None was included. The second point we'd make is that in regard to the contention of the MBA, that the award has a retrospective operation, we say that is not correct, that the award clearly only applies to acts that occur after 1 January 2010.

PN79

The counting of service only applies where a termination occurs, and that termination has to occur after 1 January 2010 for the award to apply. The award does not apply to any terminations that occur prior to 1 January 2010. So we say that there's this straw argument that Mr Calver's put forward that the award seeks to offend the principles of retrospectivity. We say that's not the case and we have dealt with that in our written submission, in particular in paragraph 2.19 and we refer there to the decision that went before the full Supreme Court in Robertson v City of Nunawading where the full bench stated:

PN80

The principle is not concerned with a case where the enactment under consideration merely takes account of antecedent facts and circumstances as a basis for what it proscribes for the future and it does no more than that.

PN81

That is what we say that the recognition of continuous service does. Whilst it takes into account the service prior to the creation of the award, it is only the award that applies or the events that occur after 1 January 2010 that creates the entitlement under the award for redundancy.

PN82

THE SENIOR DEPUTY PRESIDENT: See, is your argument in that regard a bit like, when the Fair Work Act changed the jurisdictional prerequisites for access to unfair dismissals so that it covered businesses which had less than 101 employees but required such employees to have 12 months service if they were a very small business, and indeed employers above 15 employees to have six months service, that service prior to 1 July 2009 counted?

PN83

MR MAXWELL: We submit it would unless there was some specific provision in the legislation or the transitional provisions.

PN84

THE SENIOR DEPUTY PRESIDENT: Well, in that case in the legislation I'm not sure that there was any specific provision, was there? If you were dismissed on 2 July and you had 12 months service prior to 2 July and were employed by a business which had five employees, you were covered, weren't you?

PN85

MR MAXWELL: I would have to go back and check the legislation. My understanding is that there was the provision that - there was an amendment to the legislation, I think, pressed by Senator Fielding and others in regard to unfair dismissals in regard to small employers. I think that imposed that they kept the time period before which an employee - - -

PN86

THE SENIOR DEPUTY PRESIDENT: Well, Mr Calver will be able to point me to it I'm sure.

PN87

MR MAXWELL: Unfortunately - - -

PN88

THE SENIOR DEPUTY PRESIDENT: When he comes back (indistinct)

PN89

MR MAXWELL: Your Honour, unfair dismissal is not an area that I have much involvement with.

PN90

THE SENIOR DEPUTY PRESIDENT: You avoid them.

PN91

MR MAXWELL: Normally that's a state branch matter rather than a federal branch matter.

PN92

THE SENIOR DEPUTY PRESIDENT: Okay.

PN93

MR MAXWELL: If the commission pleases.

PN94

THE SENIOR DEPUTY PRESIDENT: Thank you. Who's next? Don't be late for it.

PN95

MS ANGUS: Your Honour, the AWU opposes the application by the Master Builders Association. We've filed submissions in relation on 16 February in this application and also in relation to the previous application and we rely on both of those. Just by way of brief summary, the Master Builders Association made extensive submissions on the issue of redundancy throughout the award modernisation process and made reference to those submissions in the material we filed (indistinct) February. Keeping with - perhaps it's appropriate that be tendered, the submissions of 16 February.

PN96

THE SENIOR DEPUTY PRESIDENT: Yes, I'll mark the submissions of the AWU of 16 February as AWU1.

EXHIBIT #AWU2 SUBMISSION OF AWU DATED 16/02/

PN97

MS ANGUS: In response to the submissions put by the Master Builders Association, the decision of the full bench on 3 April 2009 dealt in some length with the issue of redundancy. That (indistinct) determined that the redundancy scheme was an established feature of the industry, which is to say - in our submission it is to say that there was an entitlement to the redundancy scheme prior to the Fair Work safety net, and also that the bench determined that the scheme was properly - can be - is properly described as an industry specific redundancy scheme and hence provides an industry specific redundancy pay.

PN98

But in our submission that is a determination in effect that the redundancy pay is not excluded from the general rule under the transitional legislation. There has been since that time no material change in circumstance and there is no uncertainty or ambiguity arising in the operation of the redundancy provisions. It operates in a manner consistent with a long history of arbitrated decisions and in a manner consistent with the act and the transitional legislation. Although for that reason, your Honour, with respect the decision of a seven member full bench should not be departed from.

PN99

THE SENIOR DEPUTY PRESIDENT: Ms Angus, I marked your exhibit AWU1. I'm told it should be AWU2. So we'll change it to AWU2. Who's next?

PN100

MR KENTISH: Your Honour, it probably falls to me. May I ask that our submission of 16 February be marked? I think we're up to CEPU2.

PN101

THE SENIOR DEPUTY PRESIDENT: Yes, just let me turn it up for a second. I'll mark the submission of the CEPU as CEPU2.

EXHIBIT #CEPU2 SUBMISSION OF CEPU OF 16/02/

PN102

MR KENTISH: Thank you. Your Honour, most of what has been dealt with this morning has been dealt with in the written submissions of the parties and the CEPU is substantially content to rely upon the material that we've put in CEPU1 and CEPU2 in addition to that of our oral submissions on 7 December and the submissions of the other unions. One matter that I did want to go to briefly was clause 17. We say that Ned - Mr Calver has suggested that service before the award which - sorry, the way I understand the MBA is that they are suggesting that service before the award commenced with a former employer does count towards continuous service, but service with the current employer doesn't count for service. We say that that's simply not tenable.

PN103

To the extent that deeming was and is necessary, we say that the deeming part of 17.7 is to overcome what would otherwise be a problem in the transfer of business, changing from one entity to another. The deeming aspect is not necessary with respect to whether service is before or after the commencement of the award. Other than that, your Honour, we rely on the material which we have already put in, if it please.

PN104

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Kentish. Mr Noble.

PN105

MR NOBLE: Your Honour, thank you. As with the other union parties we would ask for our written submissions to also be marked.

PN106

THE SENIOR DEPUTY PRESIDENT: Yes. I'll mark the written submissions of the AMWU as AMWU2.

EXHIBIT #AMWU2 WRITTEN SUBMISSIONS OF AMWU

PN107

MR NOBLE: Thank you, your Honour. Well, we rely on our submissions. I think they speak for themselves, but it is interesting what one reading of the same text can mean to different people. But I think Mr Maxwell has closed off the (indistinct) revisit that. I did send through a couple of cases, your Honour, which the CEPU referred to in their submission which I had looked at yesterday for the first time to see if they did actually support the position on retrospective action and I sent those through to your chambers yesterday.

PN108

I don't know whether you've had a chance to read them but if I could just take you to what I feel are the relevant parts in a couple of those cases, your Honour. One of those Mr Calver has already referred to which is the - I think it's Geschke decision with Gobbo J and I actually go to the same part as Mr Calver, which is at the bottom of page 3 of the decision which I have given you and if I may refer to the same part that Mr Calver did. It goes on. It says:

PN109

As is evident from the statements, there is little doubt that legislation should not ordinarily be understood as applying to past events so as to affect rights or liabilities defined by reference to the past events.

PN110

It goes on though, your Honour:

PN111

The respondents argue that this is so when the past unfair conduct is relied upon to found an order restraining future unfair conduct. It is said that the attachment of new consequences to past acts is within the category of matters involving the presumption against retrospectivity.

PN112

However, your Honour, if you go over the page to page 4 in the last paragraph the cases referred to are referred to in the CEPU extracts as well where they're quoting Statutory Interpretation, Pearce and Geddes. So those arguments are repeated there. But the conclusion in the last paragraph:

PN113

In my view the presumption against retrospective operation does not direct itself to legislation which merely uses past acts as the foundation for a future act.

PN114

So it is - and then it goes on:

PN115

In one sense legislation may appear to attach new consequences to past acts but I am of the opinion that (indistinct) consequence envisaged in the judgment of Maxwell v Murphy was one where for example -

PN116

So it's distinguished and the point is that it's the future actions. The other case I would like to refer you to, your Honour, is Lamackier. It's a more recent case. It's of the full Federal Court and the relevant part of that case that I would like to take you to, your Honour, is on the bottom of page 9 and the very last couple of paragraphs there. It says, "The applicants contend that cancellation of the fishing boat licence" - which is what this case was all about - "involves the retrospective application of a panoply to innocent parties. Then as Prof Pearce says in the second edition of his Statutory Interpretation in Australia at paragraph 211, "It is appropriate to talk in terms of retrospectivity only where an amended act affects rights by changing them with effect prior to commencement." Then Maxwell v Murphy is then discussed and then the following paragraph on page 10:

PN117

The fact that the power to cancel the licence under section 9A(3A) is conditioned upon a class of past events does not mean that the inclusion in that class of events which predated the law renders its operation retrospective.

PN118

Then the case that all of those 20th century - later 20th century cases refer to goes back to Re a Solicitor's Clerk, Queen's Bench division back in 1957 where the solicitor's clerk allowed to hold his position, a case which I think still pops up in legal (indistinct) courses. The relevant part - I won't read it out, your Honour, but the relevant part of that decision - I think it's still relevant. It's on page 3, the very last couple of sentences just after where they quote the case Western Green just above the final judgment of Barry J where he says, "I agree and have nothing to add." We rely on those cases, your Honour, and we have nothing further to say.

PN119

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Calver?

PN120

MR CALVER: Already. Goodness. Your Honour, if I might start with Mr Maxwell. Mr Maxwell had a - - -

PN121

THE SENIOR DEPUTY PRESIDENT: Sounds ominous. Yes, go on.

PN122

MR CALVER: Thank you. If I might start with the submissions of Mr Maxwell and addressing his principal arguments. It's just a better way to put it.

PN123

THE SENIOR DEPUTY PRESIDENT: Yes.

PN124

MR CALVER: Thank you, your Honour. Yirra does not support the contention that employees covered by the NBCIA had an entitlement to redundancy which was made at the initiative of the employer. It might be construed to that effect but only if you read the judgment of acting Spender CJ who was in the minority. Mr Maxwell had to go to the minority judgment in order to find anything in Yirra's case which supported this proposition and nowhere are the words which he quoted replicated in the judgment of the majority which were plain in the manner in which I took the tribunal to before and in the way that they can be explained that provisions which permit employee-initiated redundancy are non-allowable, clause 16 was rendered non-allowable.

PN125

Even if Mr Maxwell were to be right, which we don't concede, there are no accrued rights of the kind expressed in clause 17. So for the purposes of the test under clause 17 there is nothing to be continued into this award. So first of all Mr Maxwell had to rely on a passage that had nothing to do with the ratio decidendi of the actual case because he relied on a provision in the minority judgment and, secondly, the two don't line up as we quite clearly show in our written submission. The right to redundancy in the terms proposed by Mr Maxwell is not evident from that judgment.

PN126

The CFMEU say there's no lacuna in the provision in the transitional legislation which permits prior service. If that be so and the parliamentary intention is quite clear and the award intention is quite clear, then it should operate from 1 January 2010 and our proposed amendment can only clarify the law which Mr Maxwell believes is in place.

PN127

The exchange between your Honour and Mr Maxwell was interesting. I think that what the point of your Honour's questioning, and please correct me if I'm wrong, your Honour, was to propose that the way in which the unfair dismissal tests under section 383 and 384 could take account of service which spanned both acts was similar to the current case. For a number of reasons I don't believe that proposition with respect is sustainable principally because the tests in section 383 and 384 clearly indicate the time at which the employment ends.

PN128

So if you are measuring the time at which something ends, you obviously can choose a beginning which is not necessarily the commencement of the legislation because it relates to the employment and that is a clear distinction between the way in which period of service is defined in that legislation, or period of employment and the way in which continuous service can stand on its own without a particular test in the award. It's quite clear as well from the legislation, including the Acts Interpretation Act, that a right of litigation is something which cannot be taken away without extremely clear words from the parliament. Again this is of a different complexion.

PN129

What you were talking about, your Honour, is sui generis to unfair dismissal and taking of litigation. There is no indication here that litigation is involved. There is no indication whatsoever that most of the cases that Mr Noble took us to have any relevance whatsoever except the broad test which has been applied to that situation where rights under licences and other matters which would clearly otherwise be vested in that person were taken away. It's completely the obverse of the situation currently. So with respect, your Honour, we don't think that the analogy of what occurred under unfair dismissal is apropos at all.

PN130

The AWU again went back to the full bench decision. Ms Angus tried to convince the tribunal that the words "established feature" mentioned by the full bench connoted an entitlement. Well, that's a bridge too far in anybody's language. Something which is an established feature cannot and did not render an entitlement. It was established feature in history which through Yirra's case - part of that history said was unenforceable as a right or entitlement. We agree with Ms Angus to the extent that the full bench decision should not be departed from. It was silent on this matter. The award started on 1 January 2010 and so should clause 17.

PN131

The CEPU seems to be quite concerned to focus on clause 17.7. I think it was the senior counsel that we've engaged in this matter that called the provisions of clause 17.7 a side wind. It's an ill wind that blows nobody any good, your Honour. I don't think that that argument does the CEPU any good. I think that being focused on the specific circumstance of the transfer of business cannot impute intention to the rest of the provision and nothing said by the CEPU can take the highly specific provisions about that and reach a general conclusion, one of the great fallacies of arguing from the specific to the general. We think they have clearly fallen in that particularly logical hole.

PN132

The AMWU briefly took you to the cases that kindly put in evidence. Again we don't think they are analogous. In fact other than reinforcing the general test which we've brought to the tribunal, the AMWU could not point to any past acts that act as a foundation for future action that tests particularly in Re a Solicitor's Clerk. There's no past action that acts as a foundation for future action which applies in this case. How could that possibly apply? In all of these cases there was something - a right that was taken away or sought to be taken away like the licence, like the clerk's livelihood. Nothing of the kind is analogous here, merely the principle that we talk about.

PN133

Because I was quite categoric in my argument and it's something we stand by, your Honour, that the definition of "continuous service" sits on its own, has no life without a test to give it such life, that is the difference between the provisions we are talking about in the modern award and the cases of some more import that have directly concerning them as part of their ratios some past action that acts as a foundation for future action. Now, that is of a completely different complexion. So with respects to my friends from the unions I don't believe that any arguments put to you detract at all from Master Builders' central arguments. Unless there are questions from you, your Honour, I believe those are the submissions of Master Builders.

PN134

THE SENIOR DEPUTY PRESIDENT: Okay. Thank you. Well, I'll reserve my decision. We'll now adjourn.

<ADJOURNED INDEFINITELY [11.30AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #MBA NEW SOUTH WALES 3 SUBMISSION FROM MASTER BUILDERS DATED /12/2010 PN15
EXHIBIT #MBA NEW SOUTH WALES 4 SUBMISSION FROM MASTER BUILDERS DATED 21/01/2011 PN17
EXHIBIT #CFMEU2 SUBMISSION OF CFMEU DATED 16/02/2011 PN67
EXHIBIT #AWU2 SUBMISSION OF AWU DATED 16/02/ PN97
EXHIBIT #CEPU2 SUBMISSION OF CEPU DATED 16/02/ PN102
EXHIBIT #AMWU2 WRITTEN SUBMISSIONS OF AMWU PN107