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TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009
VICE PRESIDENT HATCHER
DEPUTY PRESIDENT DEAN
COMMISSIONER RIORDAN
s.156 - 4 yearly review of modern awards
Four yearly review of modern awards
(AM2016/30)
Alpine Resorts Award 2010
Melbourne
10.02 AM, WEDNESDAY, 1 NOVEMBER 2017
Continued from 31/10/2017
PN1903
VICE PRESIDENT HATCHER: Yes, Mr Scott?
PN1904
MR SCOTT: Your Honour, there is just one issue of housekeeping that might be appropriately dealt with now and that is we have been provided a copy of a revised hearing schedule and there are those two witnesses that we spoke about yesterday.
PN1905
VICE PRESIDENT HATCHER: Just remind me, they are Mr Moon and Mr Cook, are they?
PN1906
MR SCOTT: That's right, Mr Moon and Mr Cook, who, as of five minutes ago, remain unchanged. We haven't heard from them. We believe that Jason Moon is overseas. We can't confirm that because we can't get in contact with him because he's most likely overseas. As for Mr Cook, we haven't heard from him and he is certainly not here at the moment. There was the third witness, Steve Owen, who was earlier in the run sheet, and he's in the same position.
PN1907
If we can deal with those witness statements now. As I indicated, we obviously ideally would like to rely on that evidence.
PN1908
VICE PRESIDENT HATCHER: Let's start with Mr Owen's statement. Mr Harmer and Mr Bruno, is there anything in that statement that is factually in contest?
PN1909
MR HARMER: If your Honour pleases, if I may just address some brief submissions to all three witnesses? I don't intend to go to the specifics of any. Ultimately my submission will be that they should go on and we make submissions as to weight, just to let you know where I'm headed, but I did want to raise a concern about the fact that these witnesses can't be tested in any way, shape or form. We will make submissions about what that amounts to in the scheme of the case in due course, but I think, for practical purposes and time purposes, given today, that would be our view that, if they are going to go in, we would seek to make submissions as to weight and the circumstances at the end of the matter. May it please.
PN1910
VICE PRESIDENT HATCHER: Just to answer my question, is there anything in the statement of Steve Owen that's factually in contest?
PN1911
MR HARMER: If you give me a moment, I'll go back through it, your Honour.
PN1912
VICE PRESIDENT HATCHER: You asked to have an opportunity to look at it overnight, so that is why I am asking you.
PN1913
MR HARMER: I have certainly looked at it and taken instructions and where it arrived at is just where I outlined, but I'll go through it for that purpose.
PN1914
MR BRUNO: If I could indicate, the SDA's position in relation to that particular statement, as the Commission will appreciate, the issues that the SDA takes with a number of the statements relates to employee preferences with respect to working on weekends versus week days. Mr Owen himself doesn't raise that as an issue. What I would have done, if he was here, was simply cross-examine in the same flavour that I've been cross-examining the majority of the witnesses. So, to answer the question, nothing specific in terms of work preferences that we take objection with, but I would submit with this particular statement, as I would with the others, that the Commission ought to give less weight to it because the witness hasn't come to stand up to the things that have been said in the statement.
VICE PRESIDENT HATCHER: All right, on that basis, I will admit the statement of Steve Owen dated 24 March 2017 as exhibit O and the parties will have the opportunity to make submissions about the weight to be given to it.
EXHIBIT #O STATEMENT OF STEVE OWEN DATED 24/03/2017
PN1916
VICE PRESIDENT HATCHER: The next one is Jason Moon
PN1917
MR BRUNO: Would it assist the Commission if I commenced or would the Commission like to hear from Mr Harmer?
PN1918
VICE PRESIDENT HATCHER: No, whoever's first can go ahead.
PN1919
MR BRUNO: In terms of that particular statement, if we turn to page 3, the paragraphs that the SDA objected to originally are paragraph 20, part of paragraph 21 and part of paragraph 22 and then if we turn over the page to paragraph 24.
PN1920
VICE PRESIDENT HATCHER: So that's all of 20?
PN1921
MR BRUNO: Yes, and then from 21, it's the second sentence, "They will come in and chat to the staff" and then there's a quote. Can the Commission see that?
PN1922
VICE PRESIDENT HATCHER: Yes.
PN1923
MR BRUNO: That part. Paragraph 22, it's the first sentence.
PN1924
VICE PRESIDENT HATCHER: Yes.
PN1925
MR BRUNO: Paragraph 24, it's the remainder there - the entire paragraph about preferences.
PN1926
VICE PRESIDENT HATCHER: Just hold on. Mr Scott, do you press those parts that are objected to?
PN1927
MR SCOTT: I think the simplest course is that we just don't press them.
PN1928
VICE PRESIDENT HATCHER: All right. Does that deal with your position?
PN1929
MR BRUNO: I think that's sensible and I can address the remainder of the statement as to weight.
PN1930
VICE PRESIDENT HATCHER: All right. Mr Harmer, do you want to say anything about this statement?
PN1931
MR HARMER: The position is as before, thank you, your Honour.
VICE PRESIDENT HATCHER: All right. We will admit the statement of Jason Moon dated 20 March 2017 with these exceptions, that the whole of paragraph 20 is struck out, the second sentence of paragraph 21, including the quoted remarks are struck out, the first sentence of paragraph 22 is struck out and the whole of paragraph 24 is struck out. Subject to those matters, the statement will be marked exhibit P.
EXHIBIT #P STATEMENT OF JASON MOON DATED 20/03/2017 WITH THE FOLLOWING EXCEPTIONS: PARAGRAPH 20 STRUCK OUT; SECOND SENTENCE OF PARAGRAPH 21 (INCLUDING QUOTED REMARKS) STRUCK OUT; FIRST SENTENCE OF PARAGRAPH 22 STRUCK OUT, AND PARAGRAPH 24 STRUCK OUT
PN1933
VICE PRESIDENT HATCHER: Then there is Mr Cook.
PN1934
MR BRUNO: If I could address the Commission in relation to that statement? If we turn to the second page, paragraph 16, objection was taken in relation to the last sentence, "In my experience".
PN1935
VICE PRESIDENT HATCHER: Yes.
PN1936
MR BRUNO: If we turn over the page to paragraph 19, objection was taken in relation to part of the first sentence, the end part, which says, "So they can take advantage".
PN1937
VICE PRESIDENT HATCHER: Yes.
PN1938
MR BRUNO: Then the third objection was paragraph 20, the second sentence, "They are more concerned with", and it is my submission that we proceed on the same basis.
PN1939
VICE PRESIDENT HATCHER: All right. Do you press those things, Mr Scott?
PN1940
MR SCOTT: No, we don't, we are content.
PN1941
VICE PRESIDENT HATCHER: Anything from you, Mr Harmer?
PN1942
MR HARMER: The same position, thank you, your Honour.
VICE PRESIDENT HATCHER: The statement of Nick Cook dated 21 March 2017 is admitted save that the last sentence of paragraph 16 is struck out; in respect of the first sentence of paragraph 19, the words appearing in the sentence after the word "mid-week" are struck out; and in paragraph 20, the second sentence is struck out. That statement will be marked exhibit Q.
EXHIBIT #Q STATEMENT OF NICK COOK WITH THE FOLLOWING EXCEPTIONS: LAST SENTENCE OF PARAGRAPH 16 STRUCK OUT; PARAGRAPH 19, THE WORDS APPEARING AFTER "MID-WEEK" STRUCK OUT, PARAGRAPH 20, SECOND SENTENCE STRUCK OUT
PN1944
VICE PRESIDENT HATCHER: Can we move to your first witness, Mr Scott?
PN1945
MR SCOTT: We can. I hope I pronounce his surname correctly, but I call Mr Aivatagolou.
PN1946
THE ASSOCIATE: Could you please state your full name and address.
MR AIVATAGOLOU: Robert Aivatagolou, (address supplied).
<ROBERT AIVATAGOLOU, SWORN [10.11 AM]
EXAMINATION-IN-CHIEF BY MR SCOTT [10.11 AM]
PN1948
MR SCOTT: Mr Aivatagolou, do you have a copy of your statement in front of you?‑‑‑I don't.
PN1949
I will just have a copy provided, if I can. Apologies. Can you confirm that this statement - sorry I will withdraw that. Are there any parts of your statement that require any amendment or correction?‑‑‑No.
PN1950
You can confirm that that statement is true and correct to the best of your knowledge and belief?‑‑‑Yes, I can.
PN1951
I understand that there was one objection that has been resolved, your Honour, so I tender that statement subject to paragraph 19 - I believe it's the final sentence of paragraph 19 - starting with "I would estimate that".
PN1952
VICE PRESIDENT HATCHER: Yes.
PN1953
MR SCOTT: That sentence is not pressed.
VICE PRESIDENT HATCHER: All right, the statement of Robert Aivatagolou dated 31 March 2017 is admitted save for the last sentence of paragraph 19 and it is marked exhibit R.
EXHIBIT #R STATEMENT OF ROBERT AIVATAGOLOU DATED 31/03/2017 WITH THE EXCEPTION OF THE LAST SENTENCE OF PARAGRAPH 19
PN1955
MR SCOTT: If the Commission pleases.
PN1956
Mr Aivatagolou, can I just quickly take you to paragraphs 32 and 33 of your statement. You indicate there that:
PN1957
The vast majority of my employees are in Mount Buller so that they can enjoy the winter snow season. Just about everyone is there to go skiing and snowboarding on their days off.
*** ROBERT AIVATAGOLOU XN MR SCOTT
PN1958
Can you explain to the Commission how it is that you come to say those things?‑‑‑Yes, sure. I mean, when we receive applications to work with us, so typically we'd receive applications during the period March/April and May, usually they state on their application that they have a passion and love of skiing and boarding. Once they arrive into the resort, if they're offered an opportunity to work with us, they either have their own equipment or they talk about wanting to either rent or acquire equipment, so we see that, and then I enjoy skiing and boarding with most of my staff at some point during the season, so, yes, they're the main ones.
PN1959
So when you say that, you mean you actually ski with them up the mountain?‑‑‑Yes, often.
PN1960
That is all from me in chief.
PN1961
VICE PRESIDENT HATCHER: Mr Harmer?
MR HARMER: Thank you, your Honour.
CROSS-EXAMINATION BY MR HARMER [10.14 AM]
PN1963
MR HARMER: Mr Aivatagolou, you indicate at paragraph 26 of your statement that you employ your staff under the General Retail Industry Award; correct?‑‑‑Correct.
PN1964
Can I just ask you, why is it that you want to shift under the coverage of the Alpine Resorts Award?‑‑‑Well, in my view, I mean, we have a situation where, in our particular case, we're surrounded - we're a ma and pa operation, been in the family for over 50 years - we are required to pay our staff significantly higher rates, award rates, on a Sunday than our opposition. Our opposition are literally 10 metres from our door. So, on a Sunday, well, we shift from $25 an hour mid-week up to $39 on a Sunday. It's a significant disadvantage.
PN1965
In addition to that, I mean, with our staff, we're also having to subsidise their accommodation significantly, and to give you an idea, I rent a couple of apartments, those apartments cost me about $56,000 and we recoup about $180 a week off the 10 to 12 to 14 staff that we have during the season, depending on the timing. So, we are recouping only a tiny fraction of that. Essentially it's subsidised accommodation because we know the staff can't afford accommodation in the resort, it's just not going to work, it's not possible.
*** ROBERT AIVATAGOLOU XXN MR HARMER
PN1966
So, it's a real challenge in that regard and the General Retail Industry Award is loaded heavily on the weekends. That's the reality. Most of our business occurs on the weekend. It's a busy time for us because that's when people are coming from Melbourne and other parts of Victoria to spend time up in the region.
PN1967
MR HARMER: Thank you. You took over the running of the business from your parents about 18 months ago?‑‑‑Yes.
PN1968
You have grown up at Mount Buller and regularly visited the region?‑‑‑That's correct.
PN1969
When you took the business over 18 months ago, you were fully aware of the seasonal nature of the business?‑‑‑Yes, absolutely. There's no disagreement there. It's always been seasonal. Our doors are locked right now, the end of the winter. Once the lifts stop turning, we cease business.
PN1970
You were fully aware of the competitive environment, including that from the resort operating there?‑‑‑Yes, fully aware of that.
PN1971
Your business had operated, I think, under your parents for some 50 years and they had operated successfully; correct?‑‑‑Yes, they operated successfully under the same challenging circumstance as we do today.
PN1972
The business has overall been profitable in that time?‑‑‑The business is a good business. It's highly dependent on snow and visitation to the resort.
PN1973
If you have relief from penalty rates, you will make additional profit, in essence?‑‑‑It will make us more competitive and I think we'll be able to provide a better service to the client, the customers that are coming through the door.
PN1974
VICE PRESIDENT HATCHER: How is that?‑‑‑Because if people don't come to visit us in the shop to say "Hello" to us, they're coming through to get equipment and get out skiing as quickly as possible, so the quicker we're able to service people and get them the equipment they wish to rent and get them out the door, the better. That's the reality. Many people are day visitors to our resort. Those that travel from Melbourne will spend three and a-half hours in a car to get to our doorstep. From our doorstep, once they get their equipment, it's literally, you know, a 20-minute walk across the road and they jump on a lift and go skiing, and they're there to go skiing, so the less time they spend in our shop getting the equipment they require, the better.
*** ROBERT AIVATAGOLOU XXN MR HARMER
PN1975
How does changing awards speed up the service?‑‑‑We would have more staff.
PN1976
I see. We are talking about Sundays, are we, or any other days?‑‑‑Primarily Sunday is the biggest increase.
PN1977
When you talk about your competitors, is any of this difference in labour costs reflected in pricing, that is, does it enable them to under-price you?‑‑‑Well, it certainly puts them in the box seat. The lift company's in a unique position where they're able to cross-subsidise through lift tickets, lessons, even to the extent of, you know, accessing the resort as well. We don't have that benefit, so there are a number of elements to that, but staffing primarily on the weekends is also a significant advantage for them.
PN1978
MR HARMER: Just in relation to that issue of cross-subsidisation, the core or the bulk of the business of a ski-lift operator is in relation to the slopes, isn't it?‑‑‑Well, the slopes covers a number of elements, in my view, so one is you need equipment to get on the slopes. I think there's evidence that suggests that almost a third of people that buy a lift ticket to access the slopes also get involved in the ski school in some capacity, be it for child care right through to private lessons, and there's a range of options there. I think it's more than just a lift ticket, there's also the equipment side of things and, in addition to that, the lesson and ski school side of things.
PN1979
So it's a far more diverse business with a wider range of profits centres; correct?‑‑‑It is, but it's hard to dissect. When somebody's wanting a package and they get their lunch locked in with their lift ticket, locked in with their lesson and their equipment, it's pretty hard to dissect where the profit margin is or where the - you know, what's fair on that side of things. I think it's very hard.
PN1980
Equally, it would be hard to dissect, when you come to the ski hire component of the Mount Buller Resort, the extent of impact of the Alpine Resorts Award on the ski hire outlets operated by Mount Buller compared to your operation; correct?‑‑‑Well, the benefits that have been enjoyed I guess across all their businesses, all their business units, they're not exclusive to ski hire - I'm impacted primarily on ski hire - but the benefit is also enjoyed across hospitality and other services that they offer.
PN1981
I think you indicate in your statement that you engage all of your employees on a casual basis; is that correct?‑‑‑That's correct.
*** ROBERT AIVATAGOLOU XXN MR HARMER
PN1982
Would utilisation of part-time employees, fixed-term and part-time employees assist you at all?‑‑‑Not in my experience. Because of the nature of the industry we work in, we're dealing with nature, and I'm talking about snowfall.
PN1983
Yes?‑‑‑Essentially we're like farmers, I guess, we're looking at the sky a lot and wondering what's going to happen, and it can change very quickly from good conditions to poor conditions and vice versa as well.
PN1984
You need flexibility over and above part-time employment?‑‑‑Yes.
PN1985
Thank you. You haven't, at any time, considered enterprise bargaining in the business?‑‑‑Not in my time in charge.
PN1986
Do you recall if your parents have at any time?‑‑‑Not to my knowledge.
PN1987
In terms of individual flexibility agreements, is that an avenue you have considered at all under the award?‑‑‑No.
PN1988
Just in relation to the relationship with the Mount Buller Resort, there's a Chamber of Commerce at Mount Buller?‑‑‑Correct, and we're a member of that.
PN1989
Is the Mount Buller Resort a member of the Chamber?‑‑‑ BSL? You refer to BSL?
PN1990
Yes?‑‑‑BSL are a member of the Chamber.
PN1991
It's true, isn't it, that the quality of snow-making, snow-grooming, the overall service provided by Mount Buller, is part of what attracts people to the resort; correct?‑‑‑I agree with that.
PN1992
The more they attract people to the resort, that's got a benefit for your business as well; correct?‑‑‑Through the Chamber and our rates. We contribute to the snow-making.
PN1993
To what extent compared to BSL?‑‑‑A lesser extent.
PN1994
A significant - - -?‑‑‑They are the primary contributor to that, but all businesses contribute through their rates.
*** ROBERT AIVATAGOLOU XXN MR HARMER
PN1995
VICE PRESIDENT HATCHER: Can you just explain that, how that works?‑‑‑Well, we pay rates to the Resort Management Board as part of our leasehold agreement. It's a long-term leasehold agreement and part of that goes towards snow-making.
PN1996
Thank you.
PN1997
MR HARMER: Are you aware of the extent of the contribution of BSL compared to other businesses?‑‑‑I'm not aware of the specifics, no.
PN1998
It's the vast majority, though, isn't it?‑‑‑Yes, I agree BSL contribute the majority, but they also benefit the majority, too, because the $120 day ticket goes directly to BSL, obviously, not to any other business. I think we need to work in partnership in the resorts, there's no doubt about that, and that's really important.
PN1999
There is actually a community of interest, isn't there, in attracting people to the resort for the benefit of all businesses present?‑‑‑I agree with that.
PN2000
To the extent that BSL might promote events, undertake expenditure on marketing, things of that nature also benefit everyone at the resort; correct?‑‑‑There's a shared marketing function, if you like, between the Resort Management Board and BSL that also involves the Chamber.
PN2001
Again, BSL, as the ski lift operator, undertakes the vast bulk of that expense; correct?‑‑‑I'm not so sure about that. I think - I think it's more a shared function, and particularly if you're referring to the website and some booking numbers, I think in terms of accommodation booking, telephone numbers, et cetera, and websites, I think that's a shared function.
PN2002
You understand that BSL operates with a totally different business model to your own?‑‑‑I don't know enough about their business model to compare it to my own. I compete strongly with them on ski hire and certainly it's a very price-driven environment, there's no doubt about that.
PN2003
Nothing further, thank you.
PN2004
VICE PRESIDENT HATCHER: Mr Bruno?
MR BRUNO: Thank you, your Honour.
*** ROBERT AIVATAGOLOU XXN MR HARMER
CROSS-EXAMINATION BY MR BRUNO [10.26 AM]
PN2006
MR BRUNO: Mr - - -?‑‑‑Aivatagolou.
PN2007
How do I say it, sorry?‑‑‑"A pot of glue" - Aivatagolou.
PN2008
Aivatagolou?‑‑‑There you go.
PN2009
Thank you. In terms of Mount Buller, I know that you live in Melbourne outside of the ski season, but Mount Buller is somewhere that you effectively grew up. Are you able to comment on whether Mount Buller, over the years that you've had experience with it, has become more popular outside of the ski season?‑‑‑We've actually tried to operate our business, not ski hire but bike shops and similar sorts of outdoor activities. It has not worked. It's a very challenging environment and the numbers - I actually have very little faith in terms of the numbers of visitation that are published for summer months. I don't agree with them at all. I don't see the activity. I know that - I know of two businesses that were open last summer that won't be open this summer - a café and a restaurant/café type business. They can't make it work.
PN2010
I have a belief that Australians have a beach culture, and we're not Whistler, we don't have golf courses up at Mount Buller, we don't have fishing and water sports up at Mount Buller. Comparison with places in North America such as Whistler are often made, but I just don't see that, I don't experience that.
PN2011
MR BRUNO: But has there been some increase with other activities? I accept what you say that it's not been profound, but has there been some increase?‑‑‑There has been some increase, I think that's correct. As a percentage, it may look significant, but you may have gone from 30 bike riders to 300 bike riders on a busy, busy bike weekend.
PN2012
But it's the case that you've seen - - -?‑‑‑And bear in mind the lift company will sell in excess of 10,000 lift tickets on a busy day, on a busy Saturday in August.
PN2013
Yes, so - - -?‑‑‑So in terms of comparison of numbers, it doesn't really stack up from a summer perspective.
PN2014
Do you know if the lift company operates in Mount Buller in the summer period to help bike riders or hikers get up the mountain?‑‑‑I believe they do on select days. They run one lift, I think, on select days, north side chair.
*** ROBERT AIVATAGOLOU XXN MR BRUNO
PN2015
Paragraph 32 of your statement, if I could just ask you to turn to that, in that paragraph you say the vast majority of your casual employees are there to ski, so that's obviously in the winter period. By that statement, do you accept that there is a proportion of casual staff that aren't particularly interested in skiing - one, two?‑‑‑I don't see them. There might be. Very few.
PN2016
Yes?‑‑‑I don't see them in my position.
PN2017
Would you accept that even with the skiers, the casuals that ski, that they have, like anyone, got interests outside of skiing?‑‑‑Yes.
PN2018
In terms of - if you just bear with me, sorry - in terms of revenue for your business during the ski season, does your business experience that majority of the revenue on the weekend days or is it dispersed evenly across each day?‑‑‑It depends which part of the season you're referring to.
PN2019
Yes?‑‑‑I think during the school holiday period, it's probably fair to say it's dispersed far more evenly. Outside of school holidays, in peak season, which most people refer to as July and August, I think weekends are the busiest times.
PN2020
So is it the June and the September that - well, what about June and September; I'll ask you about that. Can they be busy on the weekends or does it not matter?‑‑‑Highly dependent on snow conditions.
PN2021
If it's a pure snowfall then?‑‑‑If it's a late start to the season, June will be a battle.
PN2022
Yes?‑‑‑This year's a good example where June wasn't fantastic, it was okay. Through September, we had snow right to the end, a lot of snow.
PN2023
So, in September, is revenue on the weekends pretty good?‑‑‑If it's busy, if there's snow, because we get a school holiday period which typically will commence about 20 September.
*** ROBERT AIVATAGOLOU XXN MR BRUNO
PN2024
You have already indicated in your evidence that - I think you said that - you raised some concerns about costs for some of your employees and that's why you help them with subsidisation. It's the case that you currently are able to provide penalty rates under the award. Have you thought about how your employees next year, if the Commission was to make this variation and penalty rates went away from them, how on earth they would be able to continue to live up on the mountain?‑‑‑They will be able to because they're paying $180 a week right now, which I think is very cheap accommodation by resort standards to live on the hill. It's subsidised so highly.
PN2025
That's you - that's you, isn't it? You are the one who provides the accommodation?‑‑‑I go and rent the apartment, so I pay $56,000 for two apartments and they pay a rental of $180 a week to stay in that apartment.
PN2026
It's a discretionary thing, though, you're not mandated to do that under the award that applies to you at the moment?‑‑‑I'm not mandated. However, I know, through experience from my family and my own personal experience, that if we don't have accommodation to offer to staff, we will struggle to get staff.
PN2027
Would you accept, though, that even if you continue to provide the accommodation but the employee has less in their pocket, it would be difficult for them?‑‑‑Well, I think the challenge, the great unknown is how much snow there is because if we have snow, it means more people are coming to the resort and then we have more business. That's the cycle.
PN2028
In terms of your business, you have given some evidence that if you didn't have to pay the penalty rates, you would be able to have more employees on a weekend, on a Sunday, and that could provide a better outcome for staff?‑‑‑For customers.
PN2029
Sorry, for customers, I apologise there. But your business is quite successful at the moment, isn't it?‑‑‑Well, we're always looking to improve what we're doing and part of what we're doing is service.
PN2030
But you don't receive complaints that you're too slow at the moment or anything like that, do you?‑‑‑If I can reduce the time someone spends in the shop from 10 minutes to seven minutes, that's a good outcome for us.
PN2031
VICE PRESIDENT HATCHER: When you say you would put on extra staff on Sunday, is that hiring an extra person or simply rostering your existing staff so you have more on Sundays as compared to some other time?‑‑‑I think it would be a combination of both.
*** ROBERT AIVATAGOLOU XXN MR BRUNO
PN2032
If you put on an extra person, might that increase the costs you have to pay to provide accommodation to them or could they be squeezed into the existing?‑‑‑I guess I didn't explain, but sometimes we're able to find staff that have their own accommodation, for example, and they might be working less hours per week because they have their own accommodation. It might be a school mum, for example, that only wants to work limited hours. So, there are options in that space as well.
PN2033
MR BRUNO: But even with the payment of penalty rates, isn't it the case that if you've got the demand coming in the door, so people wanting to rent equipment from you and it's high demand, you just put on an extra staff member to deal with that, you call up one of your casuals and say, "Can you come in?" and you deal with that on a needs basis? Isn't that how it currently works?‑‑‑We do do that.
PN2034
What I am getting at is if you're already doing that, what's the need to put on extra staff members if you're servicing the demand coming through the door?‑‑‑Well, the outcome for the customer is that they end up spending longer in the shop if it's a very, very busy period, and my objective is two-fold, one to have really good equipment and also have very, very good service. We only compete on service because, as I explained earlier, we're at a significant disadvantage with cross-subsidising lift tickets, lessons, equipments, et cetera, which this is opposition which is literally 10 metres across the road from us, and the market we operate in, people will walk out the door if we're one dollar more expensive in instances. It's a very competitive environment.
PN2035
Forgive me if I've asked you this question, and I do apologise if I have - I've just lost where I was - in terms of employee motivations, at paragraph 34(f) of your statement, you say that employees tell you that they prefer to work weekends as this frees them up to ski more during the week when the ski lift lines and the slopes themselves ae less busy. When an employee says that to you, do you accept that there might be other motivations driving the employee in terms of telling you that they want to work on a weekend?‑‑‑Yes, absolutely, they want to earn more money in a shorter period of time.
PN2036
I have no further questions.
PN2037
VICE PRESIDENT HATCHER: Mr Scott?
PN2038
MR SCOTT: Nothing, thank you, your Honour.
VICE PRESIDENT HATCHER: Thank you for your evidence, Mr Aivatagolou, you are excused and you are free to go?‑‑‑Thank you.
<THE WITNESS WITHDREW [10.35 AM]
PN2040
MR SCOTT: The next witness is Mr Archibald.
PN2041
THE ASSOCIATE: Just state your full name and address.
*** ROBERT AIVATAGOLOU XXN MR BRUNO
MR ARCHIBALD: Keith Evanson Archibald, (address supplied).
<KEITH EVANSON ARCHIBALD, AFFIRMED [10.36 AM]
EXAMINATION-IN-CHIEF BY MR SCOTT [10.36 AM]
PN2043
MR SCOTT: Mr Archibald, do you have a copy of your statement in front of you?‑‑‑I do.
PN2044
Are you able to confirm that the contents of your statement are true and correct to the best of your knowledge and belief?‑‑‑Yes.
PN2045
I tender that and I understand there's no objections, so I tender that statement, your Honour.
VICE PRESIDENT HATCHER: The witness statement of Keith Evanson Archibald dated 27 March 2017 will be marked as exhibit S.
EXHIBIT #S STATEMENT OF KEITH EVANSON ARCHIBALD DATED 27/03/2017
PN2047
MR SCOTT: Mr Archibald, do you operate Summit Ridge Alpine Lodge?‑‑‑Yes.
PN2048
That is located at Falls Creek?‑‑‑Yes.
PN2049
You indicate at paragraph 9 that the Summit Ridge Alpine Lodge is an on-mountain accommodation complex?‑‑‑Yes.
PN2050
Can I take you to Annexure A of your statement?‑‑‑Is that the map?
PN2051
Yes. Can you identify the location of your business on that map for the Commission?‑‑‑Yes, it's the red pen, I guess, whatever it is, the red little marker, 8 Schuss Street.
PN2052
You are on a street; is that right?‑‑‑Yes.
PN2053
Is that sealed?‑‑‑Yes.
*** KEITH EVANSON ARCHIBALD XN MR SCOTT
PN2054
When you say "on-mountain accommodation complex", can you just explain to the Commission what you mean by that?‑‑‑Well, we're above the snowline, I guess, so, in winter, the roads or streets are covered in snow, so there are obviously other accommodation down in the valley, but we're on the mountain.
PN2055
Forgive my ignorance, but is that what you call ski-in, ski-out?‑‑‑Correct, yes.
PN2056
No further questions from me, thank you, Mr Archibald.
PN2057
VICE PRESIDENT HATCHER: Mr Harmer?
MR HARMER: Thank you, your Honour.
CROSS-EXAMINATION BY MR HARMER [10.38 AM]
PN2059
MR HARMER: Mr Archibald, you have been operating this current business since 2012; correct?‑‑‑Yes.
PN2060
I think, at paragraph 17, you indicate that you operate under the Restaurant Industry Award?‑‑‑Yes, we do.
PN2061
Is that the award you have consistently applied to the business since 2012?‑‑‑Yes.
PN2062
Why is it that you want to move under the Alpine Resorts Award?‑‑‑Well, under the Restaurant Award, we're paying penalty rates on Saturdays and Sundays and public holidays. I understand in the Alpine Award that it's a flat rate and it doesn't have any of those penalty rates, so that would be of benefit to us.
PN2063
You are operating Alpine Lodge; correct?‑‑‑Yes.
PN2064
Within that lodge, you have got accommodation, significant accommodation?‑‑‑Yes.
PN2065
And you have also got a restaurant?‑‑‑Yes.
PN2066
It is an integral part of the lodge, I take it?‑‑‑Yes, it's in the middle floor of the lodge, correct.
*** KEITH EVANSON ARCHIBALD XXN MR HARMER
PN2067
You indicate - this is at para 32 - that all your housekeepers tend to come from Taiwan and you've found Australian workers don't work hard enough; that's correct?‑‑‑In cleaning, I must admit, that should be a corollary, but, yes.
PN2068
Those housekeepers, I think you indicate at paragraph 46(d), are not skiers, these are people who come to work?‑‑‑Yes, they're seasonal, either - what do they call it - the holiday worker visa - I don't know - they're seasonal workers.
PN2069
And all they do is housekeeping?‑‑‑Yes.
PN2070
In the accommodation?‑‑‑We do use them from time to time as kitchen hands or helping in the restaurant at breakfast time - at times.
PN2071
When they are doing their cleaning duties, though, you're paying them under the Restaurant Award?‑‑‑Yes.
PN2072
Have you ever considered whether the Hospitality Industry Award would be more appropriate for their role?‑‑‑I spoke to the - I enquired when I opened the business with the Restaurant Industry Association - there's a Restaurant and Catering Industry Association and award - and asked them what award I should be paying my staff and they said, "If the majority of your staff are restaurant workers, you can just pay everybody under that award."
PN2073
So you did some due diligence when looking into opening the business or taking over the business?‑‑‑Yes.
PN2074
And you were aware of the seasonal nature of the business at the time that you did that due diligence?‑‑‑Very much, and it had only been open in the winter, so it was very seasonal.
PN2075
You were aware of weekend penalties that might be applicable?‑‑‑Yes. Not in detail but, yes, I would have been aware of that.
PN2076
And the business has operated profitably since 2012?‑‑‑Yes, yes.
PN2077
And if you move under the Alpine Resorts Award, you will, in essence, increase your profitability?‑‑‑Well, that would be hopefully, but also we are in a competitive industry and tariffs have probably come down a little bit over the last two or three years, which has put the squeeze on the profitability a little.
*** KEITH EVANSON ARCHIBALD XXN MR HARMER
PN2078
You have never considered enterprise bargaining for your business?‑‑‑Well, it's only small, we're only employing nine or 10 people. No, I haven't.
PN2079
VICE PRESIDENT HATCHER: When you said tariffs have come down a bit, do you mean for accommodation or for restaurant prices?‑‑‑For accommodation.
PN2080
MR HARMER: Have you considered individual flexibility arrangements under the award at all?‑‑‑No, no, we're just paying them the award rates.
PN2081
You indicate, at paragraphs 12 through 16 of your statement, that the Australian ski industry is now facing competition from areas such as Japan ski fields. To the extent that the Australian ski operators are able to attract people to the ski region, that's something from which your business benefits, as well the ski lift operator?‑‑‑Yes.
PN2082
Indeed, to the extent that the ski lift operator invests in marketing or in quality of snow-making and grooming, they are also aspects of the product that might attract and benefit your business as well as the ski lift operator?‑‑‑Yes, and vice versa, obviously. The Falls Creek Chamber of Commerce does its advertising and individual lodges, we do our own marketing, basically web-based these days, but, yes, it's a two-way street.
PN2083
Yes, there's a community of interest between yourself and the ski lift operators; correct?‑‑‑Yes.
PN2084
A ski lift operator needs people like you to provide good accommodation and services in enhancing their product?‑‑‑Yes, yes, very much so.
PN2085
And they have an interest in you surviving and thriving as a business; correct?‑‑‑I would hope so, yes.
PN2086
You acknowledge that they incur many different costs to you in that area of ski-lifting and snow-making and grooming and promotion and marketing specific events to attract to the region, that they are costs that they predominantly bear compare to yourself; correct?‑‑‑Well, for sure, they're like any business. They've got different costs and they do it their way and we do it our way, I guess.
PN2087
You would say that under the award, though, you bear additional costs compared to them?‑‑‑Yes.
*** KEITH EVANSON ARCHIBALD XXN MR HARMER
PN2088
But you acknowledge they are working under a totally different business model; correct?‑‑‑Yes, although we're working obviously at the same time, being a seasonal business, and there's no Saturday, Sundays, it's all just one day after another.
PN2089
But the area of accommodation is a very small portion of a ski lift operator's business compared to the ski lift operations and the snow-making and snow-grooming; correct?‑‑‑Look, I don't know.
PN2090
All right, thank you. Thank you, your Honour, no further questions.
VICE PRESIDENT HATCHER: Mr Bruno?
CROSS-EXAMINATION BY MR BRUNO [10.45 AM]
PN2092
MR BRUNO: Mr Archibald, since you've been operating your business, you have been able to double your turnover?‑‑‑Approximately, yes.
PN2093
You have been able to do that whilst, at the same time, paying the penalty rates?‑‑‑Yes.
PN2094
Your business has had some success in tapping into some of the other tourism that the Falls Creek area is experiencing?‑‑‑Yes, along with everybody else, yes.
PN2095
The way that you deal with increase in demand is through the utilisation of extra staff, particularly in the winter period?‑‑‑Yes.
PN2096
So you use casuals for that purpose?‑‑‑Yes.
PN2097
In terms of your employees, the Taiwanese people, they are there to work rather than ski, I think that was your evidence?‑‑‑It depends on the person. Some like to ski, some don't.
PN2098
When you talk about "the person", are you talking about the Taiwanese person then or - - -?‑‑‑Actually, most of my staff, some of them don't, the majority do ski or board.
*** KEITH EVANSON ARCHIBALD XXN MR BRUNO
PN2099
In terms of occupancy rates for your accommodation business, are the weekends the times where you have the highest occupancy compared to the week days?‑‑‑This year - like initially the weekends fill up first, if you like, but then the mid-weeks were also full by the end of the season.
PN2100
Yes. Do you have, for your business at least, consistency with good occupancy rates for weekends in the winter period?‑‑‑Yes, I would agree with that.
PN2101
Does that mean that your revenue on a day basis in the weekend is better than your revenue on a day basis during the week?‑‑‑If we're empty or not as full during the week, obviously that would be the case but - - -
PN2102
But otherwise are you saying that you experience pretty good occupancy even during - - -?‑‑‑Yes, and we don't make any difference in the tariffs on the weekend or mid-week, it's just a flat rate through the season.
PN2103
At paragraph 40 of your statement, you say that weekends don't feel like weekends in Falls Creek. Is that because you are all working so hard on the weekends, but you've got people coming in and you are servicing them whilst they're having fun?‑‑‑Yes, correct, all the time. It's just another day.
PN2104
In terms of - - -
PN2105
VICE PRESIDENT HATCHER: So the restaurant business isn't any busier on the weekend?‑‑‑Look, it can be. Like the restaurant business, yes, it can be busier on a Thursday, Friday, Saturday night, for sure.
PN2106
MR BRUNO: Can you answer this question: in terms of the area, is it more expensive - are you able to provide a comment on that - in terms of day to day living costs than other locations? Have you lived in Melbourne, for example?‑‑‑Yes, I do live in Melbourne, yes.
PN2107
Is it more expensive up on the mountain than, say, in Melbourne, you know, food, accommodation, those sorts of things?‑‑‑Yes, yes, it is. Things cost more at Falls, obviously, with the isolation and the freight costs get included on top.
PN2108
Is that one of the reasons why you provide some assistance to your employees in terms of helping them with obtaining discounted ski passes and equipment and providing subsidised accommodation?‑‑‑Yes.
*** KEITH EVANSON ARCHIBALD XXN MR BRUNO
PN2109
They are the only questions.
PN2110
VICE PRESIDENT HATCHER: Any re-examination, Mr Scott?
MR SCOTT: Just one, thank you.
RE-EXAMINATION BY MR SCOTT [10.48 AM]
PN2112
MR SCOTT: Mr Archibald, you have just indicated in response to one of the questions that your restaurant tends to be busier Thursday, Friday and Saturday night. Can you indicate why that might be?‑‑‑Look, I don't know. I mean, it's maybe people are more inclined to go out on a Thursday, Friday, Saturday night than they are on a Monday, Tuesday. I mean, because we're an accommodation lodge, we have a lot of in-house people that dine on the Monday, Tuesday, Wednesday as well as the other times of the week, but, yes, the numbers we do are certainly a bit more on the weekend and the Thursday night.
PN2113
So you have in-house staff or in-house people who also eat at the restaurant?‑‑‑Yes.
PN2114
No further questions, thank you.
VICE PRESIDENT HATCHER: Thanks for your evidence, Mr Archibald, you are free to go now?‑‑‑Okay, thank you.
<THE WITNESS WITHDREW [10.49 AM]
PN2116
MR SCOTT: The next witness, your Honour, is Mr Brett Williams, who I understand is here, ready, willing and able. Well, I think ready and able.
PN2117
THE ASSOCIATE: Could you please state your full name and address.
MR WILLIAMS: Brett Anthony Williams, (address supplied).
<BRETT ANTHONY WILLIAMS, AFFIRMED [10.50 AM]
EXAMINATION-IN-CHIEF BY MR SCOTT [10.50 AM]
PN2119
*** KEITH EVANSON ARCHIBALD RXN MR SCOTT
*** BRETT ANTHONY WILLIAMS XN MR SCOTT
MR SCOTT: Mr Williams, do you have a copy of your statement in front of you?‑‑‑No, I don't.
PN2120
I will have one provided?‑‑‑Thank you.
PN2121
Can you confirm that that document is the statement you have provided to this Commission?‑‑‑I confirm it; I read it this morning again.
PN2122
Can you confirm that that statement is true and correct to the best of your knowledge and belief?‑‑‑I confirm.
PN2123
I tender that, subject to two agreed objections that have been resolved by way of them not being pressed. They relate to paragraphs 18 and 19 - sorry - 37 and 38, the entirety of both of those paragraphs is not pressed.
VICE PRESIDENT HATCHER: So paragraphs 37 and 38 will be struck out. Otherwise the statement of Brett Anthony Williams dated 21 March 2017 will be marked exhibit T.
EXHIBIT #T STATEMENT OF BRETT ANTHONY WILLIAMS DATED 21/03/2017 WITH PARAGRAPHS 37 AND 38 DELETED
PN2125
MR SCOTT: Thank you. I have no examination-in-chief.
PN2126
VICE PRESIDENT HATCHER: Mr Harmer?
MR HARMER: Thank you, your Honour.
CROSS-EXAMINATION BY MR HARMER [10.52 AM]
PN2128
MR HARMER: Mr Williams, you have indicated in your statement that you employ under the Hospitality Industry Award; correct?‑‑‑Correct.
PN2129
Can you just explain to the Commission why it is you want to move under the Alpine Resorts Award?‑‑‑We basically - we think the Alpine Award probably suits our business better. Basically, mainly all my employees are housekeeping, it's not a role that probably is - needs to be that experienced, and we thing the Alpine Award rates suit better to the Hospitality Award.
*** BRETT ANTHONY WILLIAMS XXN MR HARMER
PN2130
So they have lower base rates?‑‑‑Yes, especially on the Sundays, Saturday and Sunday rates, when we are the busiest of our - of the whole industry, including ourselves, so, yes.
PN2131
You indicate in your statement you have been running this particular business for the last five years; correct?‑‑‑Correct.
PN2132
Before that, you were actually employed by the ski lift operator for a number of years in the resort?‑‑‑Yes.
PN2133
So you had a very good understanding of the competitive environment that you were entering into when you transitioned to this business?‑‑‑I think so, yes.
PN2134
You were aware of the potential cost environment before entering; correct?‑‑‑Certainly.
PN2135
You also had a reasonable understanding of how the ski lift company operated?‑‑‑Yes.
PN2136
Since you have opened your business, you have been able to successfully operate at a profit; correct?‑‑‑Correct.
PN2137
Going under the award will increase your profitability, in your view?‑‑‑Definitely.
PN2138
The Alpine Award?‑‑‑Yes, yes.
PN2139
Predominantly through the lower base rates and the lower penalty rates; correct?‑‑‑It will make my job a lot easier.
PN2140
Thank you. You indicate in your statement - this is at paragraph 21 - that you get inundated with email requests for employment during the winter months; correct?‑‑‑Yes.
PN2141
So you are not having any difficulty attracting employees to work under the Hospitality Industry Award; correct?‑‑‑I'm having difficulties with Australian employees at the moment, but I'm getting a lot more - I wouldn't say "difficulties" but we're getting a lot more international applications than from Australia at the moment, but - - -
*** BRETT ANTHONY WILLIAMS XXN MR HARMER
PN2142
Again, I think you indicate that you engage mainly Taiwanese people as your housekeepers and I think you add that they work hard and they don't drink too much?‑‑‑Pretty much, yes.
PN2143
VICE PRESIDENT HATCHER: Are they only there to work?‑‑‑No, they - they'd have fun as well. They're an amazing - shouldn't say "they" - the people I employ, they mainly are Taiwanese origin, tend to have a very good work ethic, but they also have very good life - - -
PN2144
Do any of them ski?‑‑‑Yes, they'll all have a go. There was actually 120 Taiwanese in Falls Creek this year, this season, their own little community up there in Falls Creek, and they all get out there and ski and hike and walk and have lots of fun. So, yes, but, yes, that's basically who I employ.
PN2145
Thank you.
PN2146
MR HARMER: Thank you, your Honour, no further questions.
VICE PRESIDENT HATCHER: Mr Bruno?
CROSS-EXAMINATION BY MR BRUNO [10.55 AM]
PN2148
MR BRUNO: Mr Williams, are you able to comment on whether the time that you've been in Falls Creek, whether you have noticed an expansion in other businesses outside of the winter season?‑‑‑In the summer periods?
PN2149
Yes?‑‑‑Yes, there is - has been.
PN2150
What sorts of businesses have you seen opening?‑‑‑There's a lot more - there's a few more cafés opening, a few more accommodation providers opening as well.
PN2151
Have you noticed whether Falls Creek is increasing in those summer periods, or is becoming more of a tourist destination for activities like mountain biking, hiking, et cetera?‑‑‑Definitely, definitely.
PN2152
Your business, it's pronounced "Frueauf", is it?‑‑‑Yes, yes, it's pronounced "Frueauf".
*** BRETT ANTHONY WILLIAMS XXN MR BRUNO
PN2153
It operates all year round?‑‑‑It does.
PN2154
So you are obviously not just catering for the ski season?‑‑‑No, but you have to - I need to emphasise that as much as the summer - we're open over summer - probably, without being exact, probably 85 per cent of our turnover is winter. So summer doesn't give us a lot of growth. That's our little cream, I guess, but we wouldn't survive just on summer, you need - winter's our main hero.
PN2155
In the summer, what are the periods or what are the time periods where the business does do well?‑‑‑In the summer periods?
PN2156
Yes?‑‑‑From Boxing Day through to the middle of January, we're pretty much full, and then February, you know, January/February is reasonably strong as well, and then peak - peak weekends.
PN2157
In terms of your staffing, it's the case that you have a staple of two staff - have I got that right from paragraph 17 of your statement - all year round?‑‑‑Yes, yes, basically, the people that are on my summer role don't actually work over winter for me.
PN2158
Right?‑‑‑They have other roles over winter. So, yes, I have two for over summer, but they will - they aren't my winter staff, if you know what I mean, as well, so they are different.
PN2159
One of them is a permanent staff member and the other - have I got that right?‑‑‑No, you've got that wrong. Sorry I might have wrote that wrong but - - -
PN2160
If we might just turn to paragraph 17 of your statement?‑‑‑Yes.
PN2161
You have got there:
PN2162
Throughout the year, we have one times full-time bookings reservation manager.
PN2163
?‑‑‑Sorry, yes, sorry, yes, she's definitely full-time.
PN2164
Does she stay in the winter as well?‑‑‑Yes, sorry.
*** BRETT ANTHONY WILLIAMS XXN MR BRUNO
PN2165
No, that's okay. Then you have got one - - -?‑‑‑Casual housekeeper.
PN2166
Casual?‑‑‑Yes.
PN2167
Okay?‑‑‑But that casual housekeeper doesn't roll over into winter.
PN2168
Does?‑‑‑Doesn't.
PN2169
Doesn't, sorry?‑‑‑No.
PN2170
Sorry. Then, in terms of dealing with the extra demand in winter, you then deal with that via the use of casual employees?‑‑‑Yes.
PN2171
In terms of your staff, I know you have said in your evidence in response to some questions from Mr Harmer that even the Taiwanese like to have a good time and some of them ski, et cetera, but would you accept that there are some of your staff members that don't ski?‑‑‑I tend not to employ them. Through my interview process, I try and find out what their reasons are to come up.
PN2172
The permanent staff member who works for you in the summer period obviously can't ski then?‑‑‑Oh, no, she's a big skier.
PN2173
In the winter?‑‑‑Yes.
PN2174
But obviously in the summer period - - -?‑‑‑Sorry, yes.
PN2175
- - - she can't. That's an obvious statement?‑‑‑Yes.
PN2176
You would agree with that?‑‑‑I agree.
PN2177
In terms of your employees' motivations to come to work for you, would you accept that, as an employer, you would only know some of their motivations but not all of them?‑‑‑That's obvious. You can't read people's minds, no.
PN2178
In terms of the cost of living up in Falls Creek, are you able to comment on whether it's relatively expensive there compared to - have you lived in Melbourne?‑‑‑No, no.
*** BRETT ANTHONY WILLIAMS XXN MR BRUNO
PN2179
Have you lived in another city?‑‑‑Yes.
PN2180
Where have you lived?‑‑‑Basically, Bendigo, Albury and Falls Creek, Mount Beauty.
PN2181
Is Falls Creek more expensive there, relatively?‑‑‑Yes. Well, the cost of living, when it comes to groceries, yes, they are.
PN2182
Is that why you provide some assistance to your staff at the moment in terms of helping them obtain a discounted lift pass?‑‑‑Yes, well - yes, we do.
PN2183
And also assisting them with obtaining discounted ski gear?‑‑‑Yes, well, you try and help them out to keep them as happy as possible and if they want to go skiing, so we help them with that.
PN2184
In terms of accommodation, do you provide subsidised accommodation for them?‑‑‑Yes. Well, we provide accommodation. Legally, we're only allowed to charge so much per person.
PN2185
Are you talking about under the - - -?‑‑‑Hospitality Award.
PN2186
- - - Hospitality Award?‑‑‑So we can only charge a certain amount. For example, we pay 30,000 for a two and a-half bedroom apartment, but I get half of that back that I can charge the staff, I can't charge any more.
PN2187
If you didn't have that current restriction now, would you charge a bit more?‑‑‑I'd have to see. Maybe a little bit, but not a lot, because we've got to be able to - as you say, the cost of living, to actually be able to live properly, but - - -
PN2188
I have no further questions.
PN2189
VICE PRESIDENT HATCHER: Mr Scott, any re-examination?
MR SCOTT: Just one, your Honour.
RE-EXAMINATION BY MR SCOTT [11.01 AM]
*** BRETT ANTHONY WILLIAMS RXN MR SCOTT
PN2191
MR SCOTT: Mr Williams, your evidence before in response to one of the questions was that the staff, the two members of staff that worked for you year round, I think you indicated that one of them does not - sorry - the two staff that work for you during the summer, one of them is full-time; is that correct?‑‑‑Yes.
PN2192
And the other does not work for you during the winter?‑‑‑That's right.
PN2193
Do you know what that person does during the winter season?‑‑‑Actually, the one I've got - every summer I've had someone different, but the one I've got at the moment is actually a mum who - her husband is one of the lift operations manager for the Falls Creek ski lift, so she tends to look after the kids and just stays at home over the winter period, but in summer, they're a lot more flexible, he's not as busy and she can have more time to assist me in some housekeeping.
PN2194
Sure. Thanks very much, Mr Williams, nothing further?‑‑‑No worries.
VICE PRESIDENT HATCHER: Thank you very much, Mr Williams, you are excused and you're free to go?‑‑‑Thank you.
<THE WITNESS WITHDREW [11.02 AM]
PN2196
MR SCOTT: The next, and final, witness, I believe, your Honour - well, final ABI witness - because I understand there's Mount Hotham Resort for witness - but our witness is Narelle Therese Clark and I call her. I understand she's here.
PN2197
THE ASSOCIATE: Can you please state your full name and address.
MS CLARK: Narelle Therese Clark, (address supplied).
<NARELLE THERESE CLARK, SWORN [11.03 AM]
EXAMINATION-IN-CHIEF BY MR SCOTT [11.03 AM]
PN2199
VICE PRESIDENT HATCHER: Mr Scott?
PN2200
MR SCOTT: Ms Clark, good morning. Have you got a copy of your statement in front of you?‑‑‑I can have.
PN2201
That would be great, thank you. Do you have that in front of you?‑‑‑Yes.
*** NARELLE THERESE CLARK XN MR SCOTT
PN2202
Can you confirm that that is 57 paragraphs long, your statement?‑‑‑Yes.
PN2203
Is that statement true and correct to the best of your knowledge and belief?‑‑‑Yes.
PN2204
I tender that. There are some objections, which I am indebted to my friend, who will take me through them, because there's a number, and there are paragraphs that are not pressed. The first relates to paragraph 21 and it's the second sentence onwards, so the second and third sentence in paragraph 21 is not pressed, so it starts with "My new employee".
PN2205
THE WITNESS: Yes?
PN2206
VICE PRESIDENT HATCHER: So that is struck out?
PN2207
MR SCOTT: Yes. The following is paragraph 40, the entire paragraph is not pressed.
PN2208
VICE PRESIDENT HATCHER: So paragraph 40 of the statement is struck out.
PN2209
MR SCOTT: The same is for 42, 43, 44.
PN2210
VICE PRESIDENT HATCHER: Sorry, say that again.
PN2211
MR SCOTT: Paragraphs 42, 43 and 44 are not pressed.
PN2212
VICE PRESIDENT HATCHER: So paragraphs 42, 43 and 44 will be struck out from the statement.
PN2213
MR SCOTT: The next one is 54. That paragraph is not pressed.
PN2214
VICE PRESIDENT HATCHER: Paragraph 54 will be struck out of the statement. Is that that?
PN2215
DEPUTY PRESIDENT DEAN: What about 56 and 57?
*** NARELLE THERESE CLARK XN MR SCOTT
PN2216
MR SCOTT: Yes, there's two more. The first sentence of 56 is not pressed.
PN2217
VICE PRESIDENT HATCHER: So we will strike out that sentence.
PN2218
MR SCOTT: Then, in relation to 57, if I can just have a moment. That's all of the aspects of the statement that are not pressed, so I tender that statement.
PN2219
VICE PRESIDENT HATCHER: So paragraph 57 stays as it is?
PN2220
MR SCOTT: That's right. Well, subject to - I think 57 deals with issues that may extend beyond Ms Clark's business and so, to the extent that that paragraph relates to her business, we press that paragraph.
VICE PRESIDENT HATCHER: I will allow the paragraph. The statement of Narelle Clark dated 30 March 2017 will be marked exhibit U.
EXHIBIT #U STATEMENT OF NARELLE THERESE CLARK DATED 30/03/2017
PN2222
MR SCOTT: Nothing from me in chief, thank you, your Honour.
PN2223
VICE PRESIDENT HATCHER: Mr Harmer?
MR HARMER: Thank you, your Honour.
CROSS-EXAMINATION BY MR HARMER [11.07 AM]
PN2225
MR HARMER: Ms Clark, you have indicated in your statement that you currently apply the Hospitality Industry Award; correct?‑‑‑Correct.
PN2226
Can you just outline to the Commission why it is that you want to transition your business to the Alpine Resorts Award?‑‑‑So there's more flexibility for myself and for my staff.
PN2227
Can you elaborate on what you mean by "flexibility"?‑‑‑Currently, wherever possible, we try to conduct our - whatever work we can Monday to Friday to avoid the penalty rates. However, a lot of my staff would prefer to have mid-weeks off, when it quieter and there's less day trippers in the resort skiing and so forth, rather than having the weekends off when they - when everybody's there.
*** NARELLE THERESE CLARK XXN MR HARMER
PN2228
I think you indicate, in effect, that the weekend penalties are the biggest issue for your business, as you see it?‑‑‑They are a big issue, yes.
PN2229
As I understand from your statement, you formerly worked for the Cedarwood Apartments for some time prior to taking up an investment in the business?‑‑‑Yes, I worked for two seasons - sorry, well, a good 18 months before I bought the business.
PN2230
You were familiar with the fact that the main changeover days were Fridays and Sundays in the business at that time?‑‑‑Yes.
PN2231
Again, you were familiar with the highly seasonal nature of the business?‑‑‑Yes.
PN2232
You were also familiar with impact of weather from day to day on the business?‑‑‑Absolutely. I should probably interject there, the bulk of my business is guest information once the guests have arrived and then cleaning, so the cleaning's got to be done on the days it's got to be done, unless we can obviously push it over to the next day, but, yes, if it's wet weather, there's obviously more people inside.
PN2233
With that background knowledge, you did your due diligence in deciding to invest in the business; correct?‑‑‑Absolutely. At the time that I invested in the business, we were paid a flat rate. That was in 2006 I bought the business. In 2004, when I started there, we were paid a flat rate regardless of the day.
PN2234
Do you know on what basis was that?‑‑‑No, I don't.
PN2235
Were you, in some way, under the impression that was going to continue when you ---?‑‑‑Yes, I was.
PN2236
So the due diligence you did didn't extend to the issue of awards and weekend penalties; correct?‑‑‑My understanding is that the award that we were previously paying under was going to continue.
PN2237
Was that a Victorian ski resort award?‑‑‑I'm not sure what that was, to be quite honest. It's a bit beyond my memory.
*** NARELLE THERESE CLARK XXN MR HARMER
PN2238
Yes, but in terms of your investment, you have generated a return, it's been a profitable business; correct?‑‑‑Most seasons. In the poorer winters, you don't have a lot of profit.
PN2239
But have you made many losses in particular years?‑‑‑Not for the winter period potentially, or technically, but when you consider that the winter income has to cover the whole year's costs, when you spread it out, it gets very thing.
PN2240
It can be a marginal business from time to time?‑‑‑Yes.
PN2241
But profitable, nevertheless, across the financial year?‑‑‑Generally, yes.
PN2242
Going under this particular award, the Alpine Resorts Award, will increase your level of profitability; correct?‑‑‑Yes. Well, one would hope, yes, I would expect that the mid-week rates may be higher, so there'll be a bit of overflow.
PN2243
In your statement, you talk about some difficulty in attracting staff?‑‑‑Yes.
PN2244
And specifically, around paragraph 44, you refer to the benefit that the ski lift operator has in being able to operate through subsidised - - -
PN2245
VICE PRESIDENT HATCHER: We struck out paragraph 44.
PN2246
MR HARMER: I understand, your Honour, and I appreciate it's not in evidence, but I am just using it as a reference point for something that was previously put.
PN2247
Can I ask you this: in relation to your concern about subsidised accommodation and ski lift passes that can be provided by the ski lift operator, you see that as a benefit they have in attracting staff compared to your own business; correct?‑‑‑Yes.
PN2248
And that is a benefit they can operate because of their investment in ski lifts and in accommodation in the region; correct?‑‑‑And the award that they've got that they operate under, obviously.
*** NARELLE THERESE CLARK XXN MR HARMER
PN2249
In terms of attracting staff, you would accept that penalty rates, for example, on weekends might be an area where you would have higher attraction for weekend work than the resorts; correct?‑‑‑Technically, but, unfortunately, because of our location, there's not the people to draw from, so you have to employ your staff for the whole season, you can't get extra people just to work on the weekends or anything like that, so they're employed for the season.
PN2250
Thank you, I have no further questions.
VICE PRESIDENT HATCHER: Mr Bruno?
CROSS-EXAMINATION BY MR BRUNO [11.13 AM]
PN2252
MR SCOTT: Ms Clark, your business, Cedarwood Apartments, operates all year round?‑‑‑Yes.
PN2253
The apartments, though, themselves, they are owned by investors?‑‑‑Yes, correct.
PN2254
And you own two of them?‑‑‑Yes.
PN2255
So the apartments aren't just catering for the four months or so when there's skiing?‑‑‑No, they're - we're open year round apart from six weeks of the year when we close.
PN2256
Is that the time that you get to take a holiday finally?‑‑‑Yes, technically, while the phone still rings.
PN2257
And you employ one casual to work with you during the slower summer period?‑‑‑I did this year for the first time, yes. I've had part - occasional staff prior to this. However, I think it was January or February this year, I had a young lady start working for me a day or two a week, which is an indication of our summer getting busier.
PN2258
Yes?‑‑‑Which is very exciting because we're pushing - we've been pushing for many, many years to try and grow the summer trade so it's a viable business.
PN2259
Is it an indication as well of the business overall improving that you can absorb the cost of an extra staff member in the summer period?‑‑‑It's the growth in the summer bookings that's the growth, yes.
PN2260
Did you have a good winter?‑‑‑We did, yes.
*** NARELLE THERESE CLARK XXN MR BRUNO
PN2261
In terms of when it comes to the winter period, you then start to use casual staff to really meet the demand?‑‑‑Correct.
PN2262
In your statement, you say that your employees in winter are there to work to supplement their holiday in Falls Creek because they come to Falls Creek to ski?‑‑‑Quite a lot of them do, yes.
PN2263
What do you mean "work to supplement"? Do you mean that they just need the money to cover the holiday?‑‑‑I'm finding more and more at the moment that the staff are there to ski more than they are to work. When I started in the 90s in Falls Creek working, it was for the work and the skiing was an added bonus, where these days a lot of younger people, who are generally who we attract as employees, are more inclined to want to ski all day and party all night and work a little bit. So, yes, that becomes a bit of a challenge.
PN2264
But you are not suggesting by that statement that you have knowledge of the financial details or predicament of all your employees?‑‑‑No, I don't, of course I don't.
PN2265
Would you say it's relatively expensive to live or to work up on Falls Creek in the winter period?‑‑‑Absolutely.
PN2266
Is that why you help your employees with obtaining some subsidised accommodation?‑‑‑Yes. This past season, they actually lived in my apartment with me.
PN2267
Did you still charge them the $250?‑‑‑Yes.
PN2268
Are you aware of the maximum permissible under the Hospitality Industry (General) Award that you can charge?‑‑‑They didn't - that was a separate agreement. They didn't - they weren't forced to live there and they were renting their bed. They could have rented anywhere else, it was a separate rental agreement. It wasn't deducted from their wage or anything.
PN2269
It wasn't deducted from their wage?‑‑‑No.
PN2270
But are you aware that the amount that you charged is a bit higher?‑‑‑If I was deducting it from their wages and it was part of a package, yes, it would be high, and that's why I can't do that.
*** NARELLE THERESE CLARK XXN MR BRUNO
PN2271
No, but it's still a higher sum that you come into a separate agreement with them?‑‑‑Yes.
PN2272
You charge them that?‑‑‑I mean, every other year, I think in my statement it mentions I've rented other apartments for them. The difficulty in Falls Creek is there's not a lot of staff accommodation available, they tend to be the older, run-down apartments that the private owners can't get premium holiday rental for or aren't getting good bookings in, so they tend to rent them out to staff, the older, run-down ones. They still charge top dollar because they've got to cover their costs under the - their site rental and service charges and utilities, obviously, are pretty high up there, especially in the older properties that are less insulated and so forth. So, my staff actually had it cheaper this year than they had it in the past because my rental included their utilities, whereas elsewhere, that was on top.
PN2273
Can I take you to - have you got your statement in front of you?‑‑‑Yes.
PN2274
Paragraph 24. You say:
PN2275
Depending on how bookings go on a Sunday, I will try to leave as much housekeeping and cleaning work as possible for the following Monday.
PN2276
?‑‑‑Yes.
PN2277
That is because Monday, when you employ a staff member, you don't have the penalty rates to pay for them?‑‑‑Yes.
PN2278
Is that just a business decision that you're making there that if the work doesn't need to be done on the Sunday, do it on the day where it's cheaper in terms of labour costs?‑‑‑That's a luxury that we have sometimes.
PN2279
Yes?‑‑‑But generally we can't leave a lot over, especially with the nature of last-minute bookings now and agencies such as bookings.com, who you can't stop the guest from - you can't set so that they can - must book at least 24 or 48 hours in advance, so somebody may vacate on Sunday morning and I believe that it's not going to be occupied until tomorrow, on the Monday; however, at 4 o'clock in the afternoon or 6 o'clock in the afternoon, I get an email comes through or a text message supporting that email saying that somebody will be in in an hour's time, so a lot of the time, we have to get the smaller, more last-minute affordable apartments ready regardless.
*** NARELLE THERESE CLARK XXN MR BRUNO
PN2280
And that is something that you do yourself rather than - you don't call up a staff member to come in; is that right? Have I got that right?‑‑‑I did no cleaning this past winter.
PN2281
So you took on staff members for Sunday?‑‑‑Yes, absolutely.
PN2282
You wrote in your statement back in March 2017 - so that's probably a bit historic now - so when we look at this year, you were employing staff?‑‑‑I've always employed staff on Sundays. I've had to because of changeovers on Sundays.
PN2283
Perhaps I have misread your - okay, you have said that you try to leave as much housekeeping and cleaning work as possible?‑‑‑Until Monday.
PN2284
So you don't have to pay too many staff?‑‑‑Yes.
PN2285
So you have some staff?‑‑‑I always have staff on Sundays.
PN2286
But you reduce the number that you would otherwise have had?‑‑‑Sunday tends to be our - Fridays and Sundays are our biggest changeovers traditionally because the industry, once upon a long time ago, was a five, seven - a two, five or seven night stay where everyone changed over on Fridays and Sundays. Because of flexitime these days, we're getting more spread out changeover days, so it's not all on those days, and that is with the luxury of being able to hold things over if I have to.
PN2287
So, if you have got the staff - this is one thing that I don't understand, if you can help me with this - if you've got some staff there on the Sunday and Sunday's the day that people check out, wouldn't you just get them to clean that room then and there and then it would avoid the need for you to have to come in later if you do get the last-minute booking?‑‑‑That's what we - that's what I was saying earlier. I'm sorry if that was not clear. We do that with everything that is likely to sell last-minute. Anything that's not likely to sell last-minute, we'll hold over until the next day, if we have that luxury of time.
PN2288
So it's the case that penalty rates aren't really an issue for you in terms of the way you structure things?‑‑‑If it has to be cleaned that day, it has to be cleaned that day, there's no choice, and that's the big struggle for my business because I'm paying $33-odd an hour instead of $23, I think it is, on Monday, so an extra $10 an hour per employee.
*** NARELLE THERESE CLARK XXN MR BRUNO
PN2289
No further questions.
PN2290
VICE PRESIDENT HATCHER: Any re-examination, Mr Scott?
MR SCOTT: Yes, just one again, thank you, your Honour.
RE-EXAMINATION BY MR SCOTT [11.21 AM]
PN2292
MR SCOTT: In response to that question, I think, the preceding question, you were asked about paragraph 24 and the fact that, when you can, you try and hold cleaning work over until Monday; why is it that you would do that?‑‑‑It's cheaper.
PN2293
Thank you. No further questions.
VICE PRESIDENT HATCHER: Thank you for your evidence, Ms Clark, you are excused and you are now free to go?‑‑‑Thank you.
<THE WITNESS WITHDREW [11.22 AM]
PN2295
VICE PRESIDENT HATCHER: That is all of your evidence, Mr Scott?
PN2296
MR SCOTT: That is, that's our evidentiary case closed. I understand we are probably moving on to closing submissions.
PN2297
VICE PRESIDENT HATCHER: Just to confirm, Mr Harmer, you don't want to call any further evidence in reply?
PN2298
MR HARMER: No, thank you, your Honour, I am just - - -
PN2299
MR IZZO: Your Honour, can I just raise one matter? We intend to file our closing submissions today - make our closing submissions today. We are conscious that the Mount Hotham Resort Management Board will be making submissions and we understand also cross-examining Mr Girling in relation to its application. We don't intend to play an active role in that, although we will be here monitoring. We just reserve our position, if anything comes up, and we don't intend to take a lot of time, but if anything does come up that impacts upon our case, to seek leave to either ask questions or make a brief submission if anything comes up in that application that affects our clients. That's the only thing I would say.
*** NARELLE THERESE CLARK RXN MR SCOTT
PN2300
VICE PRESIDENT HATCHER: All right. If we take the morning tea adjournment and resume at, say, 11.45, will you be ready to commence?
PN2301
MR SCOTT: Yes, that's convenient, thank you, your Honour.
PN2302
VICE PRESIDENT HATCHER: All right, we will now adjourn on that basis.
SHORT ADJOURNMENT [11.23 AM]
RESUMED [11.50 AM]
PN2303
VICE PRESIDENT HATCHER: Mr Scott?
PN2304
MR SCOTT: Thank you, your Honour. Can I start by indicating that we have a folder of authorities that Mr Izzo kindly has there. If we can hand a copy to each of your Honours. I understand the other parties have a copy of those authorities. It looks worse than it is. The Penalty Rates decision is in there.
PN2305
VICE PRESIDENT HATCHER: You had to reproduce the whole thing, did you?
PN2306
MR SCOTT: I'm not sure whether it's printed double-sided - I hope that it is - otherwise it makes the folder quite difficult to get through. Can I indicate that it will assist your Honours if you are able to have that folder of authorities in front of you, as well as a copy of our written outline of submissions dated 13 April 2017.
PN2307
VICE PRESIDENT HATCHER: Yes, that's tab 17.
PN2308
MR SCOTT: If your Honours don't have copies, I can make copies available.
PN2309
VICE PRESIDENT HATCHER: We have that.
PN2310
MR SCOTT: Thank you. Can I start by indicating - and we've just raised this with my friends - that we have prepared a further amended draft determination. I have copies which I seek leave to and up and file. I will take your Honours through the further amended draft determination and I will explain how this has come to be.
PN2311
Principally, there's two issues that have arisen throughout the course of this week that has led our clients to seek leave to file a further amended draft determination. They are, firstly, the discovery through Mr Girling's evidence that there is a kiosk - I think it's the Air Kiosk - which is on mountain on the Perisher Resort, which, according to Perisher's and Mr Girling's best estimation, sits about 130 metres outside of the 2 kilometre radius that our draft determination had as the geographic area. What we seek to do is to extend that to 2.5 kilometres. Of course, it was on mountain, it was always intended to be covered. We appreciate the ASAA for raising that with us. The Perisher Resort is the largest resort. We were looking down the road, I guess, and so we say that it's obvious that that should be covered.
PN2312
The other thing to point out is no other businesses will be impacted by the extension to 2.5 kilometres. The reason for that is that, as we say, these ski resorts are classed as businesses at the base of the mountain, generally, they're quite small, they are quite clearly defined, and once you get outside that immediate alpine village, there is essentially nothing for a period of, you know, distance.
PN2313
I think the next thing down the road at Perisher - Mr Harmer has raised that earlier this week and will no doubt raise that again - is the Sponars Chalet. My understanding is that is approximately 8 kilometres down the road from Perisher, so you can understand that outside that immediate vicinity of the resort, there is quite a distance before the next thing pops us, and that's the case of each of the resorts that are the subject of this claim or the alpine regions. That is the first issue that we seek to address, the 2.5 kilometre radius.
PN2314
The second issue that we're seeking to address is an issue that was raised by Your Honour the Vice President earlier in the week, and I think the question was posed to Mr Harmer that the current existing coverage clause of the Alpine Resorts Award operates in such a way that if you are an alpine lifting company, you can operate a hotel in Cairns, you can directly employ people through the alpine lifting company, they will be ordinarily captured under the current award by the Alpine Resorts Award.
PN2315
We say that is an unintended outcome. That was never something that was contemplated during the making of the award. It's an absurd outcome. That issue should be rectified and so we have endeavoured to do that. They way in which we have endeavoured to do that is two-fold. The first is on the second page of the further amended draft determination. We had an existing definition of alpine resorts industry and it was quite long. We have sought to simply it by adding a second definition, which is "alpine region" and it has the geographical area there. If you then go back to the first page, the proposed clause 4.1 or the new clause 4.1 qualifies that by including the words that:
PN2316
The industry award covers employers throughout Australia in the alpine resorts industry and their employees who are engaged in an alpine region.
PN2317
So if an employer operating in an alpine resort industry has employees engaged outside of an alpine region, then the award does not apply to those employees. We say it addresses that issue satisfactorily.
PN2318
The third issue, other than typographical changes, is that we have sought to remove Bogong Alpine Village from the draft determination. That was an issue that Mr Izzo raised, I believe, on Monday. Perhaps it is appropriate - - -
PN2319
VICE PRESIDENT HATCHER: Just so I understand, Bogong Alpine Village is what?
PN2320
MR SCOTT: It has been taken out of the draft determination.
PN2321
VICE PRESIDENT HATCHER: But what is it?
PN2322
MR SCOTT: The reason for that is it's an alpine village which does not have any snowfields, any ski parks with lifts being operated. I think Mr Harmer might describe it as a "feeder" village.
PN2323
VICE PRESIDENT HATCHER: I am just wondering, how is it different from Dinner Plain Alpine Village?
PN2324
MR SCOTT: The difference between Bogong and Dinner Plain is that Dinner Plain has a snow park and it has an alpine lift. That is essentially the key difference. Now, Mr Harmer or the ASAA will likely say they are both similar in nature in the sense that they are feeder villages, Dinner Plain being a feeder to Mount Hotham, but the difference is that Dinner Plain has a snow park, it has a ski slope, it has a ski lift and that's the reason why we've left Dinner Plain in.
PN2325
VICE PRESIDENT HATCHER: Is that the one with the little trainer lift, was it?
PN2326
MR SCOTT: I think it's called a poma lift. I don't think that's a magic carpet, I think that's a T-bar - I may stand corrected. It's a T-bar lift, yes, so it is a lift. I don't think it's particularly long, I don't think the gradient is particularly steep. My understanding, and this might have been in the evidence, is that if the wind conditions or the snow conditions are very poor or the weather's very poor at Mount Hotham, people may go down to Dinner Plain and utilise that slope. It's predominantly a beginner slope, but the difference between the two is there's an alpine lift there. So, we say it is an alpine resort. That is the basis for it.
PN2327
We say that the amendments - there's three benefits, I guess, to the amendments. There is a qualifier, which is that in order to be covered, you have to be based in an alpine region. We think that's sensible. We have a 2.5 kilometre radius to avoid any uncertainty about outliers who may fall 130 metres outside of that radius, and we say there is certainty about that because, as I said before, it's quite clear, once you get outside the village, you're in the middle of nowhere, so to speak.
PN2328
The last benefit of this further amended draft determination, I say at least, is it is simpler, it's easier to understand compared to what had been proposed before by our clients because by breaking it down into definitions, the alpine resorts industry and alpine region - the previous definition of alpine resorts industry, it's not as long and complicated, so we say it's simpler than what had been proposed before.
PN2329
As I said, we seek leave to file and rely on that. If my friends have any opposition or objection to that, I am happy to deal with that now, but otherwise that's what I wanted to say in respect of the further amended draft determination.
PN2330
MR HARMER: If the tribunal pleases, obviously we have got concerns and I'm seeking instructions. We have only just seen this, but I will address those in the submissions if that is convenient.
PN2331
MR SCOTT: Your Honours, we are conscious that it has come late in the day, so to speak. In the context of an award review, it might be appropriate that the further amended draft determination be published on the Fair Work Commission website in a similar manner to other documents and that it be up there for a period of time, such that if there is an interested party out there who may say that they are affected, they have an opportunity to respond.
PN2332
In terms of our closing submissions, there's eight matters, effectively, that we would like address your Honours on. The first was the draft determination or the further amended draft determination. I have dealt with that.
PN2333
The second is the legislative framework for the four-yearly review. Now, I won't labour that particular issue. I'm sure your Honours are well aware about the relevant principles there.
PN2334
The third matter is this idea of the industry, and industry awards, and much has been said in relation to that topic. Again, I won't labour that point, but there are a number of important issues that need to be addressed there by way of context.
PN2335
Mr Izzo will then have some submissions to make in relation to the award modernisation process generally and how the award came to be.
PN2336
We will then turn, fifthly, to what we say is the alignment of the alpine tourism businesses with the alpine lifting companies and some of the factors and features of the industry, of the snow sports industry, as it was described during award modernisation, some of those factors and features that were relied upon by the AIRC in making the original modern award and how those features align to the businesses that we represent, the alpine tourism businesses.
PN2337
I will also address some of the other submissions and arguments that have been advanced by the ASAA in relation to why the snow sports industry is unique and I will deal with why those are equally applicable to our clients' membership.
PN2338
The sixth matter is that we will have something to say about some of the issues that have been raised against us by the other parties.
PN2339
The seventh is Mr Izzo will go through in some detail the terms of the Alpine Resorts Award, a little bit of analysis as to how that sits compared to other awards such as the Hospitality Industry Award and demonstrate to your Honours and to the Commission that those terms in the Alpine Resorts Award are relevant and a fair safety net of minimum terms and conditions to apply to the businesses and the employees in the alpine tourism industry or the alpine resorts industry.
PN2340
The last issue that we wish to address is the modern awards objective.
PN2341
That is the plan of attack with respect to our closing submissions. As I indicated, we filed our written outline of submissions on 13 April 2017. We rely on those. We also rely on the other submissions that we filed in the proceedings, notably 12 October 2015 and then 8 August 2017, which was a reply submission.
PN2342
In relation to the legislative framework, I will deal with that very quickly. The framework for the four-yearly review has been well canvassed, extensively canvassed by the Commission. The relevant authority is the Preliminary Issues decision, which is in tab 2 of your folder of authorities. Those principles were then again comprehensively addressed in the Penalty Rates decision, which is at tab 1. I don't intend to take your Honours to those decisions because I don't think it's necessary, but I will say this: the overarching objective of the award review process is to review the modern awards and to ensure that each modern award provides a fair and relevant minimum safety net of terms and conditions having regard to certain factors set out in section 134.
PN2343
Of course, we are bringing a substantive case for substantive change. We don't shy away from that. Because we are doing that, we are required, our clients are required to do two things. We are required to bring a merit case for change, so advance merit submissions as to why we say the award, as varied in our draft determination, will provide a fair and relevant safety net of terms and conditions, and we support that with probative evidence that goes towards demonstrating the facts that we are relying on in those arguments, and we say that we have done that this week.
PN2344
One of the other principles outlined in the Preliminary Issues decision is this principle that previous Full Bench decisions must be followed unless there's cogent reasons for not doing so. I am assuming that that will be put against us and the decision I am referring to is, of course, the Full Bench AIRC decision in making the modern award. We say that principle is not applicable in this case. The case that we are advancing here was not the case that was advanced during award modernisation; indeed, there was no evidence advanced during the award modernisation process, so it's not applicable, but to the extent that it is, and we say it's not, to the extent that it is, well, there are cogent reasons why that Full Bench authority should not be followed.
PN2345
Can I turn then to the third matter, which is the industry. You can see in the further amended draft determination, we are seeking an industry award. It is describe as the "alpine resorts industry". We have variously described it as the "alpine tourism industry" during our written submissions and during the course of this week. There is no difference in terms of what we are talking about, whether we are talking about the alpine resorts industry or the alpine tourism industry. The reason the draft determination refers to the alpine resorts industry is because the current award is called the Alpine Resorts Award and for matters of ease of understanding, we have adopted that terminology. We say there is no difference in those phrases.
PN2346
In a nutshell, we say that the alpine resorts industry or the alpine tourism industry is made up of those businesses in and immediately adjacent to the ski fields or the ski slopes, they are those tourism businesses that provide the critical services to visitors coming to utilise the slopes. Of course, it includes the lifting companies, but we say it is not confined to the lifting companies. That is an artificially narrow construct. It extends to all of those accommodation service providers, the food and beverage providers and others, ski hire, for example, ski hire retail, who are providing all of the critical services to allow you to get up and have a good skiing experience, essentially. That is what we say is the industry.
PN2347
We say the industry is in a clearly defined area. You have to be in an alpine region to be in the alpine industry, and that is set out in the draft determination. As I said, they are all businesses that are critical to the operation of the industry.
PN2348
I should thank my friend Mr Harmer for this concept, which I think is very helpful and I think it is apt - it has come out of cross-examination - the alpine tourism businesses and the alpine lifting companies have a community of interest, they have a shared interest, and that supports the contention that they are in the same industry. They all profit when the industry succeeds; they all share the losses when the industry doesn't do well. We have seen the evidence about seasonality and I am not going to take you to the evidence now, but I think that is an appropriate use of phrase to describe what we're really trying to talk about.
PN2349
VICE PRESIDENT HATCHER: There's lots of seasonal tourism businesses, isn't there? It's not unique.
PN2350
MR SCOTT: There probably are. I'm not sure that there's seasonal tourism businesses that are quite as seasonal as these businesses. I am not going to stand here and say there's not seasonal tourism businesses out there because there are, but we say these are a specific, well defined set of tourism businesses that are entirely concentrated around alpine tourism, and we say the alpine tourism industry is a very clear subset of the broader tourism industry. It is well accepted that there is a tourism industry in Australia.
PN2351
When the AIRC received the award modernisation request, it required them to make modern awards across industry lines. The President of the Commission issued a statement saying, "For the purpose of doing that, we will adopt the AIRC Panel system of industries, and one of those was the tourism industry. The tourism industry was a Group 3 industry for the purposes of award modernisation. To the extent there is any doubt - I don't think there is - the tourism industry is an industry and the alpine tourism industry is a subset of that. Through Group 3 of the award modernisation process, out of that group came the Alpine Resorts Award. The alpine tourism industry is a subset of the tourism industry.
PN2352
When I talk about this community of interest or shared interests, Mr Williams today gave evidence about the contributions to snow-making, and that's just one example of the shared interests and the community of interests in the industry.
PN2353
I think it is important to make this point. There may well be differing views as to what the industry is. Certainly on the written materials, there appears to be. The ASAA have contended in their submissions that they are in the snow sports industry. They utilised that phrase, that was a phrase that was utilised when they went to the AIRC to try and make the award, they were seeking to make a snow sport industry award. It is apparent that when they use that phrase, they are talking about alpine lifting companies and it is apparent in their written materials that the snow sports industry is confined to the alpine lifting companies. I said earlier that is an artificially narrow construct and that is not correct, in our submission.
PN2354
There is also an inconsistency in their submission, and I think it is important to point out. On the one hand, they say, "We are in the snow sports industry and you guys aren't." They then, in various parts of their written submissions and orally, have said, "We're a core part of the snow sports industry, we're a specific part of the snow sports industry." I can take you to the references. 21 December 2016, paragraph 1.2, they refer to alpine lifting companies as forming "the core" of the Australian alpine and snow sports industry. Well, I eat apples, the core is only a part of it. If they are the core, what else is there in the industry?
PN2355
VICE PRESIDENT HATCHER: You have ski hire shops in major cities, don't you?
PN2356
MR SCOTT: Absolutely you do.
PN2357
VICE PRESIDENT HATCHER: Are they part of the industry?
PN2358
MR SCOTT: We say they are not. We say they are retail. The reason we say that is because in order to be in this industry, this industry is made up of all of those features that my friend has taken this Commission to, took the AIRC to, which makes them unique.
PN2359
VICE PRESIDENT HATCHER: You have a ski hire shop in Pitt Street in Sydney. It's not going to be hiring any skis or selling any skis if there's no snow.
PN2360
MR SCOTT: I am not sure that's necessarily as precisely accurate as that. I accept the point generally that, yes, if there's no snow, no one is going in there to hire ski gear. I accept they have similarities, but they are not staffed by snow sports enthusiasts, they are not weather-dependent, they don't have these huge rushes at the gate on a Saturday, because if I go to Chatswood and pick up my skis for the season, I'll go on a Thursday night or whenever. I'm not going there Saturday morning, like Mr Aivatagolou, who has the rush, and he says, "Well, you know, I'm trying to provide a service, I'm trying to compete."
PN2361
We say there are all these factors. There is no denying that a ski hire place in Sydney is a similar business to a ski hire place at Falls Creek. There is no denying that. But the factors that made this award fair and relevant in 2010 apply, they haven't dissipated, and they apply to our guys. That is our submission in respect of that.
PN2362
DEPUTY PRESIDENT DEAN: Mr Scott, just in terms of your further amended draft determination, is the effect then that the Perisher or Thredbo's ticket office in Jindabyne are no longer part of the industry, no longer covered by the award?
PN2363
MR SCOTT: It is a good question. I think the answer to that is this: if the employees are based - and I think we use the language "employees who are engaged" - the question will be: "Are they engaged in an alpine region?" Jindabyne is not in an alpine region, we say. Are those employees engaged in an alpine region? I don't know the answer to that. That would depend on - we have heard a lot about portability of staff. Now, if they are based 80 per cent in Thredbo and 20 per cent in Jindabyne, I would suspect they will be engaged in an alpine region. That is a question of fact for each individual employee, but if you are a ticketing staff member solely based in Jindabyne, you never have the need to go to Thredbo or Perisher, then we say you are not engaged in an alpine region and it does follow then that that employee will not be governed by the Alpine Resorts Industry Award. That's correct.
PN2364
VICE PRESIDENT HATCHER: When we had an inspection, I stopped in Cooma and they had a large shop selling a variety of unusual snow gear - hats.
PN2365
MR SCOTT: I think I know what you are talking about. That's right.
PN2366
VICE PRESIDENT HATCHER: Are they in the ski industry?
PN2367
MR SCOTT: We say they are not.
PN2368
VICE PRESIDENT HATCHER: They had a huge range of ski equipment.
PN2369
MR SCOTT: Absolutely.
PN2370
VICE PRESIDENT HATCHER: Clothing.
PN2371
MR SCOTT: Absolutely. I've never been to Cooma during summer. I don't know whether they shut. There's no evidence about those businesses necessarily as to are there other sources of revenue, are there other activities that they get involved in to a larger degree than some of the evidence that you have heard about the seasonality of businesses that are based in these alpine villages, which again varies in terms of what they do during the summer. But that business is a very similar business. It is not in the alpine region. I don't know, there's no evidence as to whether they are staffed by snow sports enthusiasts. My brother has done a season in Thredbo. He didn't want to work in Cooma, he wanted to work on the slopes.
PN2372
DEPUTY PRESIDENT DEAN: Not that there's anything wrong with Cooma.
PN2373
MR SCOTT: No, of course not. I should withdraw that. One moment. My friend, who is a more avid skier than I am, has raised a very good point which relates to the ski hire places in Chatswood or Sydney or Melbourne or wherever else people might live. Those markets are far less seasonal because those markets service specifically snow sports enthusiasts who might fly to Japan or North America, where the season is in reverse, so if you want to go to Japan - - -
PN2374
VICE PRESIDENT HATCHER: What, you hire in Sydney then pack it on a plane?
PN2375
MR SCOTT: Ski jackets - I think I couldn't make any comment on snowboards, skis, how expensive they are to transit overseas. I am sure people do it, if you've got your gear that you like, but jackets and other equipment, if you're in Sydney, they are not 85 per cent of their revenue or 90 per cent of their revenue in two months because, come October, they are gearing up for the North American season.
PN2376
VICE PRESIDENT HATCHER: I think the point we are coming to is your draft determination for the award is perhaps not really industry based at all, it is geographically based. You are seeking an award which applies in certain regional areas.
PN2377
MR SCOTT: We dispute that, with respect, we say it is industry based and it is about the way that you formulate the industry. It might be appropriate to deal with this issue, because again I suspect it will be put against us. It shouldn't be in contention that a business can operate in more than one industry at the same time. Your Honour asked a question on Monday during opening to Mr Izzo which was: "Aren't these guys just retail or hospitality businesses?" The answer is, "Yes, they are", but they are alpine tourism businesses and you can be more than one, and I will take you to the relevant authorities in a moment on that point. I won't labour the point because there's a hundred years of industrial jurisprudence about the substantial character of the employer, but I will take you to the relevant parts because it is relevant. So, we say it is an industry award. We say the industry is defined, a critical feature of the industry is defined in part by the geographic location. That is, of course, what we are seeking.
PN2378
It is not correct to say that this is an award not made along industry lines but made along geographic lines. We don't accept that. We accept there is an element of geography in it and we say that there is nothing wrong with that.
PN2379
I referred to the award modernisation request which required the Commission to make awards along industry lines. The President of the Commission set up the tourism industry as a Group 3 category and the Alpine Resorts Award came out of that. That was in 2008/2009 under a different legislative framework, the Workplace Relations Act. We are now under the Fair Work Act. It might be convenient now to take your Honours to section 143 of the Fair Work Act.
PN2380
VICE PRESIDENT HATCHER: I am just going to say this, that the process we are engaged in is a review of modern awards, we are not creating them from scratch.
PN2381
MR SCOTT: Well, you can - - -
PN2382
VICE PRESIDENT HATCHER: Just hear me out. It seems to me the bigger issue for you is that you have to demonstrate that the existing awards which cover the businesses you represent are not meeting the modern awards objective.
PN2383
MR SCOTT: That may be the case.
PN2384
VICE PRESIDENT HATCHER: It's not just the case that they would prefer to be under a different award, it is that the modern awards objective is not being met for these businesses with respect to their current awards.
PN2385
MR SCOTT: Mr Izzo will address that. I am not prepared to accept that at this point in time. I don't think it is the case under the framework that we must demonstrate that the current awards do not meet the modern awards objective. There can be different formulations of any modern award and there's more than one modern award that might meet the modern awards objective or would meet the modern awards objective. What we are saying is the award that we are seeking to have made or varied - - -
PN2386
VICE PRESIDENT HATCHER: Does that involve the concession that the existing awards are meeting the modern awards objective with respect to the businesses you represent?
PN2387
MR SCOTT: No, we don't concede that.
PN2388
VICE PRESIDENT HATCHER: You can't have it both ways. Either they do or they don't meet the modern awards objective.
PN2389
MR SCOTT: We say that those awards, the Hospitality Award, the Retail Award, the Restaurant Award, don't meet the modern awards objective in respect of these businesses and their employers. My friend is indicating that on the authorities, the Preliminary Issues decision, we don't need to demonstrate to this Commission on the evidence that those awards do not meet the modern awards objective, notwithstanding that we say that, but we don't have any burden to prove that, although we say that we probably have anyway. What we say is the Alpine Resorts Award, as varied, meets the modern awards objective for these relevant people. Mr Izzo will take you through the relevant terms and conditions as to why we say the Alpine Resorts Award is the fair and relevant modern award.
PN2390
At the risk of backtracking, it's important to point out - without labouring this point of the industry - my friends use the snow sports industry, there's these Freudian slips in their written materials about saying, "We are not actually the whole thing, we're just the core part of it." That's an acknowledgement that there's a bigger industry there. The snow sports industry, call it want you want, the snow sports industry, alpine tourism industry, it's the one industry and it's not limited to the lifting companies.
PN2391
Mr Harmer, in his opening I think it was, earlier this week made that point, he illustrated it. There was a discussion about poor weather and he said, "The aprčs ski scene is a big part of the industry." We agree.
PN2392
I have dealt with the making of the modern awards, the fact that modern awards needed, at that time, to be made along industry lines. If I can take your Honours to section 143 of the Fair Work Act. It is not in your folder of authorities and it's not critical if you don't have the provision in front of you. What we say is that the modern award request back in 2008, that's been displaced by section 143 of the Fair Work Act and that deals with modern awards must include coverage terms and it sets out how those coverage terms can operate or are permitted to operate.
PN2393
Section 143(5) - sorry, I will take a step back. 143(1) says:
PN2394
A modern award must include terms (coverage terms) setting out the employers, employees, organisations and outworker entities that are covered by the award, in accordance with this section.
PN2395
If I go down to 143(5), it indicates:
PN2396
For the purposes of subsections (2) to (4):
PN2397
(a) employers may be specified by name or by inclusion in a specified class or specified classes.
PN2398
So, it talks specifically about specified classes, not specified industries. 143(6) then says:
PN2399
Without limiting the way in which a class may be described for the purposes of subsection (5) -
PN2400
so without limiting how it can be described -
PN2401
the class may be described by reference to a particular industry or part of an industry, or particular kinds of work.
PN2402
We say to the extent that you are not with us that this is a true industry award and it is not an award made along industry lines, we say that it is, but to the extent that that is not persuasive, it doesn't matter, the regulatory framework allows for modern awards to be made having coverage terms setting out employees by specified class, and it also expressly refers to "part of an industry" and, of course, we say the Alpine Resorts Award is part of an industry. My friends don't cavil with that.
PN2403
I have dealt with the modern award request. Can I deal briefly again with that hundred years of industrial jurisprudence regarding the meaning of an industry and the test that came from that line of authority about the substantial character. The cases generally develop from union demarcation disputes and union coverage rules. It might all be very interesting but it's not particularly relevant to the current matter before your Honours where we are under the Fair Work Act, but to the extent that it's put against us, there's two decisions in the bundle of authorities - I think they may be in the front sleeve.
PN2404
The first case, if I can take your Honours to this briefly, is Dyno Nobel Asia Pacific Limited v CFMEU. It is a 2005 Full Bench decision of the AIRC. There is a majority decision of Hamberger SDP and former Vice President Lawler. The majority decision goes through in some detail all of the High Court authority. I won't take you through that. The relevant part for the present purposes is paragraph 51 of that decision, which is on page 24 going over to page 25. It is really page 25 and you can see there, at paragraph 51, the members indicate that drawing the High Court authorities together, the summary of principles are as follows. About halfway down page 25, and I apologise, for some reason, the numbering has dropped out, or at least on my version - you might have a better version.
PN2405
VICE PRESIDENT HATCHER: What paragraph number is it?
PN2406
MR SCOTT: Sorry, you may have a different version, which means your page numbers are different. It is 51. Sorry, I will work off the same version of the document. It is 51 and it's paragraph (d) which is one of the principles that they outline. If I can read that:
PN2407
The business of an employer can be "in or in connection with" more than one industry. This outcome can arise in different ways:
PN2408
The business of the single employer is a single integrated enterprise but nevertheless operates substantially in or in connection with two or more industries simultaneously. This may be because -
PN2409
and this is the part that I specifically want to take your Honours to:
PN2410
This may be because there is an overlap between industries and the business operates in the area of overlap (in such a case the same business can be described in different ways placing the business in either industry so that it has a "substantial character" that places it in each industry).
PN2411
We say in respect of the accommodation service providers, they are, of course, in the hospitality industry, but we say they are also in the alpine tourism industry where they are located in the alpine region. We say there is nothing in that line of authority that prevents the Commission from accepting that, to the extent that your Honours consider that line of authority is relevant under the current framework.
PN2412
VICE PRESIDENT HATCHER: Speaking for myself, it is not so much what industry box you put these people in, it's what is a fair and relevant safety net of terms and conditions for the employers and employees that you are representing.
PN2413
MR SCOTT: Yes, and I accept that. Your Honour indicated that on Monday in respect to certain submissions made during opening by my friend. To the extent that those particular issues that I have just canvassed might be brought up, I wanted to deal with those in an efficient way so that we can tick those boxes, so to speak.
PN2414
I won't take your Honours to this decision, but the second decision is an appeal by GJE, a 2013 Full Bench decision. It affirms the decision and endorses that decision of Nobel. The relevant paragraph is paragraph 18. I apologise, that might not be the relevant paragraph. I won't take you to it because I think we are operating under different versions of the printouts of these decisions, so the numbering may not be correct, but the Full Bench found there that where an enterprise has more than one character, it is not necessary to decide which is predominant, but a character must be substantial before it can ground a conclusion that the enterprise is in a particular industry.
PN2415
We say there is nothing there that prevents our variation from proceeding, either from a general perspective or from a merit perspective, but I take your Honour's point that you are more focused on other things, as you should be, and so that was all I wanted to say about that.
PN2416
Unless there are any questions in respect of any of that, I think Mr Izzo might deal with the award modernisation process in the making of the award.
PN2417
VICE PRESIDENT HATCHER: All right.
PN2418
MR IZZO: Just before I do, your Honours, if I could just address that one question put to Mr Scott about do we need to show that the existing awards, whether it be the Alpine Award or the existing Hospitality, Retail and other awards, don't meet the modern awards objective. Our position very firmly is that we are not obliged to meet that test. If I can just take your Honours to the bundle of authorities in front of you and if I can ask you to turn to tab 2, which is the Preliminary Issues decision, and if you were to go to page 16 of that judgment. This is the five-member Full Bench judgment that preceded the commencement of the modern awards review.
PN2419
Just some of the context for this, the submissions made by the parties at the time are there were parties who were eager to limit the scope of the four-yearly review, if you like, and certainly my recollection is the ACTU and AiG advanced the proposition that to vary a modern award, there was a hurdle to be overcome and the ACTU put it as high as, "You need to show the modern award does not meet the modern awards objective before you vary it" and the AiG had said, "You at least need to show there has been a significant change in circumstances." Both of those propositions were rejected by the Full Bench in this decision.
PN2420
At paragraph 60 on page 16, I would like to just draw attention to point 5, which is the last point on that page. The Full Bench said:
PN2421
In the Review the proponent of a variation to a modern award -
PN2422
VICE PRESIDENT HATCHER: Sorry, I have lost it. What paragraph?
PN2423
MR IZZO: It is page 16, paragraph 60.
PN2424
DEPUTY PRESIDENT DEAN: Page 18, I think.
PN2425
COMMISSIONER RIORDAN: It might be page 19, I think. That's what I've got.
PN2426
MR IZZO: We may again have page differences. I am in the Preliminary Issues decision, tab 2, paragraph 60.
PN2427
DEPUTY PRESIDENT DEAN: Paragraph 60?
PN2428
VICE PRESIDENT HATCHER: I am sorry, I'm looking at the wrong decision. Just hold on. What tab is this behind?
PN2429
DEPUTY PRESIDENT DEAN: Tab 2.
PN2430
VICE PRESIDENT HATCHER: Tab 2, all right.
PN2431
MR IZZO: Tab 2, paragraph 60.
PN2432
COMMISSIONER RIORDAN: It is on page 18.
PN2433
DEPUTY PRESIDENT DEAN: Page 18.
PN2434
VICE PRESIDENT HATCHER: Depending on which version you have, I think.
PN2435
MR IZZO: Yes, apologies.
PN2436
VICE PRESIDENT HATCHER: It might be easier to refer to paragraph numbers.
PN2437
MR IZZO: I apologise.
PN2438
VICE PRESIDENT HATCHER: That's all right, I'm there. Yes?
PN2439
MR IZZO: If I might direct your Honours and Commissioner that it's got a series of points, 1, 2, 3, 4, 5.
PN2440
DEPUTY PRESIDENT DEAN: Yes.
PN2441
COMMISSIONER RIORDAN: Ten points.
PN2442
MR IZZO: Yes.
PN2443
DEPUTY PRESIDENT DEAN: Which one are we going to?
PN2444
MR IZZO: At point 5, the Full Bench said:
PN2445
In the Review the proponent of a variation to a modern award must demonstrate that if the modern award is varied in the manner proposed then it would only include terms to the extent necessary to achieve the modern awards objective.
PN2446
That phrase of a modern award as varied or once it is varied, if the modern award is varied in the manner proposed, it would only include terms to meet the modern awards objective, what the Bench is saying there is the test about whether it meets the modern awards objective is the award as varied after the proponent's application is considered, not that you need to show before you have a variation that the modern awards objective are not being met. That then becomes evidence by the next point, which is point 6. The Bench goes on to say:
PN2447
There may be no one set of provisions in a particular modern award which can be said to provide a fair and relevant minimum safety net of terms and conditions. There may be a number of permutations of a particular modern award, each of which may be said to achieve the modern awards objective.
PN2448
I think the Bench was influenced by that fact that because the modern awards objective has a number of leaders, if you like, in each of its subclauses, there might be any combination of terms and conditions that make up the modern awards objective. I believe that is an influencing factor why the Bench was persuaded to say that you don't need to show that a modern award is not meeting the objective as a prerequisite to changing it.
PN2449
If I could then take your Honours to tab 1, which is the Penalty Rates decision, and if I could take you to paragraph 42. I will run the risk and say it is page 14, or it is on my version. I think this one is the same.
PN2450
VICE PRESIDENT HATCHER: Yes.
PN2451
MR IZZO: So paragraph 42. A central contention that was advanced by the union parties in the Penalty Rates case was that the applicants to vary the penalty rates of the relevant awards had to show that either (a) they weren't meeting the modern awards objective or (b) that there's been some significant change in circumstances since the modern awards were made in 2010 to warrant the variations being made. That proposition was expressly rejected by the Full Bench at paragraph 43:
PN2452
We reject the proposition advanced by the unions. The adoption of the proposed material change in circumstance test would obfuscate the Commission's primary task in the Review.
PN2453
The unions then took that to the Federal Court. The Federal Court has only recently handed down its decision in that case. I don't have a copy of the decision with me, but I can confirm that the Federal Court authority - it was approximately last month - had to deal with this issue expressly and they said that there was no requirement to find any change in circumstances before varying a modern award. The task of this Commission and the wording adopted was that it's a review. They talk in that Federal Court judgment about a review necessarily is a look again at the provisions and what that requires is, in essence, a whole review of the award and if the Commission is moved that there should be changes that will meet the modern awards objective, it can do so. There is no hurdle that is present as a prerequisite to an application. I just wanted to respond to that because - - -
PN2454
VICE PRESIDENT HATCHER: But the awards that apply to your members here are the Hospitality Award, relevantly, and the Retail Award.
PN2455
MR IZZO: And Restaurant.
PN2456
VICE PRESIDENT HATCHER: And Restaurant and, on one view, it might be Contract Cleaning as well. In respect of these employers, they are the awards we are reviewing, are we not? That is the awards that apply to them.
PN2457
MR IZZO: That is the awards that presently apply to those employers, yes.
PN2458
VICE PRESIDENT HATCHER: And if those awards are meeting the modern awards objective with respect to those employers, why would we change anything?
PN2459
MR IZZO: I think, as Mr Scott advanced, we don't think they are meeting the modern awards objective for those employers and I think that will be borne out when we do our analysis of the terms and conditions. There are certainly particular conditions in those modern awards - penalty rates and rostering are two of the more significant - that we say do not fit well with the operations of an alpine tourism business.
PN2460
VICE PRESIDENT HATCHER: You will come to this, and again speaking only for myself, the more I hear of the evidence in this case, the more it appears to me to be simply a penalty rates case, and the difficulty may be that we then run into a headlong collision with the Penalty Rates decision.
PN2461
MR IZZO: I certainly think we won't run into a headlong collision, but if I could say this - I may as well say it at the outset, your Honours - the witness operators that gave evidence, none of them were applicants in this case, none of them were called evidence to convince this Commission why they should be under a different award. Yes, that was part of the cross-examination. We called those witnesses to give evidence of two primary matters: one, to give you a good indication of their business operations and the environment within which they operate and, two, to give you, albeit a little bit more indirectly, an idea of the preferences of their workforce and their employees. That's why we called those operators. The fact that all of them know the modern award that applies to them, in my experience, is a miracle for small business operators and I think to then have an expectation that these operators know with forensic detail the advantages that will be gained for them by moving across is to expect a bit too much for a small business operator.
PN2462
Our role, the role of the four employer organisations I represent, is to convince the Commission why the Alpine Resorts Award is the more appropriate safety net, and if that variation is made, to then educate the membership about what their obligations are under that new award.
PN2463
The questions asked of these operators, it shouldn't necessarily be surprising that they don't have a good, detailed understanding. There were some operators that clearly, I think, don't necessarily, or certainly for certain periods of time didn't have the right award applying, had mistaken understandings of how the award applies, and that is very common. I urge the Commission - - -
PN2464
VICE PRESIDENT HATCHER: Some of them had a good idea about the Alpine Resorts Award because they had applied it in the past.
PN2465
MR IZZO: Certainly some had, but one member who is governed by the Hospitality Award seemed to think the base rates in the Alpine Resorts Award are lower than the base rates in the Hospitality Award. That is just not right. That witness seems to think there's going to be some significant financial windfall that's not happening. I think most of them get the idea that penalty rates will change, but I very much urge the Commission to move with caution with respect to their motivations. Their evidence is primarily evidence about what do they do, what environment do they operate in, how do their companies work and what do their employees care about. That is why we have called them. Yes, it was open for them to be cross-examined about the matters they were, but I think that's our job to convince you why the safety net is more appropriate.
PN2466
In relation to the award modernisation decision, Mr Scott has taken you through the industry arguments. If I could ask you to turn to our written submissions and in particular the submissions of 13 April 2017 and if I could ask you to turn to section E. Page 13 is where it commences. That is where we commence our analysis in writing on what happened during the award modernisation. The short position is this: the award modernisation Full Bench heard from the ASAA and the AWU primarily about the creation of a stand-alone Alpine Resorts Award. There were no businesses present that represented the alpine tourism businesses we represent, there was no argument advanced of the nature that has been advanced this past week.
PN2467
The reality is, and some criticism was made of our clients by Mr Harmer earlier on, the reality is we weren't there, that's right. Now, we can say, "Well, why weren't certain organisations there, why didn't DPSI bring its claim earlier, why didn't some of these witnesses bring claims?" I don't know. But the reality is the Australian Industrial Relations Commission proceeded to make an award without the benefit of the extensive arguments and evidence that has been presented to this Full Bench this week. That is the first important consideration that relates to the AMod process.
PN2468
The second is that the coverage clause was based on a draft prepared by the ASAA. So, the ASAA prepared the draft coverage. Naturally, it suited their business interests; unsurprisingly, it excluded our operators. That was the draft that was accepted by the Award Modernisation Full Bench.
PN2469
There are two further things that I would like to say about the AMod process. The first is that there is a very real question about the extent of knowledge that the Full Bench had about the very existence of the members of our clients, and when I talk about this, I am referring to the exchanges that were had with the Full Bench on 30 June 2009. If I can take your Honours to page 16 of our written submissions and paragraph 9.4, there's an exchange there at the bottom of the page between Giudice J and Mr Harmer, but I don't want you to read that just yet, I just want to give you some context.
PN2470
Prior to this exchange, on that very same day, about 15 minutes earlier, the SDA had made what is effectively the only comment that we have been able to identify really on the transcript about the existence of the members that we represent. I am just going to pull it up. The transcript reference for your Honours' benefit is PN3654 of the transcript of that day on 30 June. We certainly can provide your chambers with the transcript. Just for your reference, it's Annexure Z to the Girling statement in any event. At 3654, the SDA was addressing the Full Bench and they started off by saying:
PN2471
The key issue is whether or not the service workers in this award should be covered.
PN2472
They go on to state:
PN2473
It should probably be renamed the Alpine Lifting Award because the whole definition of the industry is dependent upon an establishment that includes alpine lifting.
PN2474
VICE PRESIDENT HATCHER: Who said that?
PN2475
MR IZZO: Sorry?
PN2476
VICE PRESIDENT HATCHER: Who said that?
PN2477
MR IZZO: The SDA:
PN2478
Which simply means that any establishment in the ski fields or snow sports industry that does not provide alpine lifting is simply not covered.
PN2479
The SDA made this point:
PN2480
In that sense, it's not an award covering the resorts, it's an award covering only those establishments including alpine lifting.
PN2481
The SDA did make the point that, in their view, that meant that the other employees doing similar tasks, their view was that the employees under the Alpine Resorts Award would be in a lesser position than those other employees. That is the submission that was made by the SDA. One might think that put on the record that the members that we represent needed to be considered, but that's why I say that this exchange with Mr Harmer is particularly problematic.
PN2482
I want to make it clear at the outset, and we say this in writing, there is no assertion that Mr Harmer intentionally misled anyone or that there was any bad faith in that sense in terms of subjective motivations, but we do make the point that the effect of the exchange is such that there's a real question as to whether the Bench was misled or didn't understand who was up the mountain.
PN2483
The reason I say this is that Giudice J is the one who raises the question:
PN2484
Mr Harmer, I wonder if you have any submission to make about the issue raised as to the coverage of the award, in particular the definition of alpine resort?
PN2485
That question from Giudice J is a response to the SDA submissions I have just referred you to which were made some five minutes before. Mr Harmer starts giving a response about why the definition is satisfactory to the ASAA. Then, if we go overleaf, Giudice reframes the question and he says:
PN2486
Yes, Mr Harmer, I was particularly interested in the definition and the submission that was made about the requirement that the resort include alpine lifting. The suggestion seemed to have been made that there would be other resorts that don't include alpine lifting which would be covered by other awards.
PN2487
Giudice J has picked up on this issue. Mr Harmer provides his response:
PN2488
In our respectful submission, your Honour, there would be no alpine resorts involved in the ski industry -
PN2489
and this is where the terminology becomes a little problematic because now we are using the words "alpine resorts" and it's not quite clear what we're referring to there, but he says that there are no alpine resorts involved -
PN2490
as we understand it that does not involve ski lifts, so I am unable to assist with the nature of any resort operating in the ski areas that would fall into that category.
PN2491
"Any resort operating within the ski areas that would fall into that category." Again, it is not clear what Mr Harmer means by the word "resort". It could be an accommodation facility, it could be something more, but his position is, "I am unable to say anything about them." He then goes on to say:
PN2492
There are, of course, your Honour, for example in Jindabyne there are operations that might be described as resorts in terms of accommodation and things, but they do not operate in the ski area and do not fall under the intended coverage.
PN2493
We say the effect of that is to essentially tell the Full Bench there's no one else really up there.
PN2494
Then Giudice J picks up again - so this is the third time Giudice J has tried to reframe this question about what the SDA has raised - and he says:
PN2495
And with the exception of lifting, do those resorts or other establishments provide the same or similar services to the public as the resorts covered by this award?
PN2496
Mr Harmer does not give a direct answer to that question. He says:
PN2497
The example I just used, your Honour, was talking about lower areas of altitude, so they're not operating in the precise region, they're not as heavily impacted by snow and they're not providing any of the services associated with skiing that we are dealing with, in our respectful submission, your Honour.
PN2498
Giudice J says, "Thank you" and Mr Harmer goes on to say once more, to hammer the point home: "It's not a like with like comparison."
PN2499
So, whilst the SDA may have drawn this to the Commission's attention, by the end of that exchange we say there's a very real doubt whether the decision-makers had been convinced that there's actually no other businesses that we need to really worry about up in that alpine region, and that is then not corrected and the award is made.
PN2500
VICE PRESIDENT HATCHER: The SDA was trying to make it clear that employees of any businesses other than ski-lifting businesses would not be included.
PN2501
MR IZZO: Their point was this, your Honour, that there's other businesses up there that are covered by different awards and they are going to have, in the SDA's view, superior terms and conditions to the employees of the ski resorts and that's why the SDA was saying, "This isn't a good idea to make this award." The SDA was essentially pointing to our clients' businesses as a reason to say, "You're going to put people doing the same work in the alpine resorts on different conditions."
PN2502
It seems that Giudice J did pick up on it and he asked three specific questions about it and each time was directed away from the existence of these businesses. Now, a direct answer saying, "Yes, there are other establishments up there" may have resulted in either further questioning or a different outcome, but that's not what occurred.
PN2503
We say a different case is being advanced here to what was advanced in 2009 anyway, but if there was any question - - -
PN2504
VICE PRESIDENT HATCHER: The problem is that Giudice J framed the question by reference to the word "resorts" and that has a certain meaning. A restaurant is not a resort, a lodge is not a resort, a shop is not a resort, and Mr Harmer endeavoured to answer that question. For example, you have Lake Crackenback Resort, a luxury hotel facility with various leisure activities.
PN2505
MR IZZO: And I'm saying - - -
PN2506
VICE PRESIDENT HATCHER: That's the way we read Mr Harmer's answer, isn't it?
PN2507
MR IZZO: I am not trying to say that Mr Harmer has done anything in bad faith here, but there's two difficulties with that: one, hospitality accommodation providers could be considered in the loose use of the word "resort" from time to time. Your Honour has just mentioned one in Lake Crackenback Report. The other is Giudice J then goes on, at PN3690, which is on page 17 of our submissions, he does then say:
PN2508
And with the exception of lifting, do those resorts or other establishments -
PN2509
To me, that's a reference to the businesses the SDA is referring to, not just resorts but other establishments as well. "Do they do the same stuff as the alpine ski resorts?" He is not told that they do, he is not told that they exist. It is difficult, seven years down the track, to say that this is exactly what Giudice J believed at the end of that exchange, but what I do think I can say with a fair bit of certainty is that there is a very real question as to whether Giudice J did have an awareness by the end of that exchange as to what types of businesses were up there - by the end of the exchange.
PN2510
VICE PRESIDENT HATCHER: We would have to go through all the written submissions of the various parties to have an understanding of that.
PN2511
MR IZZO: That's true.
PN2512
VICE PRESIDENT HATCHER: When we don't have in front of us the entirety of the material that was before the Full Bench. But isn't it sufficient for your purpose to say that, like all these things, the Full Bench proceeded upon limited material and this award largely sought to replicate a pre-existing situation? Do we need to delve any deeper than that?
PN2513
MR IZZO: I think the latter comment is certainly true, your Honour. I suppose, yes, they didn't have the benefit of the case that we have put this week. I just think it is an additional factor that there's a question mark as to what level of knowledge they had about the existence of businesses up the mountain. It is not clear. And if that's because we say it's limited information, that might be the case.
PN2514
Harmers has responded to our submission and put whatever it has found in the written submissions in reply and we still don't think that addresses the concern or the question mark that we have raised. To the extent you say you would have to go through all the submissions, you probably only need to look at the submissions in reply filed by Harmers Workplace Lawyers because they have done that exercise. But that's the first point we wanted to make in relation to award modernisation.
PN2515
The second point is this: because of the enormous task that was conducted, we accept that there's limited reasoning and published reasons in terms of why the award was created, but we do have from the award modernisation process four reasons that were expressly stated by the AIRC in two statements and they are contained at paragraphs 8.5 and 8.7 of our written submissions.
PN2516
This is particularly important because the ASAA raises a whole heap of matters, but there's only four that were picked up on and actually endorsed. At 8.5 there is a passage we extract - I won't repeat it - but I will take you to the summary at 8.6. That passage from 8.5 is a 22 May 2009 statement and, from that, at 8.6, we say the Commission identified that there should be a separate award because:
PN2517
(a) employees are engaged in a wide range of occupational groupings;
PN2518
(b) there is considerable fluctuating demand for employee skills and services with
PN2519
peaks during weekends and public holidays; and
PN2520
(c) the industry is marked by a high level of casual and seasonal employment and
PN2521
flexible hours of work.
PN2522
They were the first three things that moved the Commission to create the separate award. We then have another statement in September.
PN2523
VICE PRESIDENT HATCHER: Sorry, just before you go on, 8.6(a), I think the import of that statement is employees engaged in a wide range of occupational groupings by a single employer, that is the alpine resorts.
PN2524
MR IZZO: Yes, in the sense that - - -
PN2525
VICE PRESIDENT HATCHER: The employees of alpine resorts, that is, it's the employer that is engaging people engaged in a wide range of occupations.
PN2526
MR IZZO: That's right, your Honour, because there were submissions put that there needs to be portability across the occupational groupings, and additionally put in the context of fluctuating demand, that is, because of the fluctuating demand, you need to rely on portability. So they were the first three points that are identified.
PN2527
There is the subsequent statement in paragraph 8.7. Again, I won't read that out but that's the extract and, from that, we deduct one additional reason and that is that the Full Bench had regard to the very seasonal nature of the industry. The September 2009 decision, because paragraph 263 is not expressly dealing with coverage, it's a little bit more indirect, but I think it's clear that they are convinced that it's a very seasonal operation and that is a factor that influenced them.
PN2528
They are the four factors that AIRC identified as rendering this industry discrete and distinguishable. What is missing from those factors is something that is littered through the ASAA's submissions in 2009 and what is littered through their various submissions in these proceedings is a repetitious reference to investment in capital infrastructure and conduct of alpine lifting, but particularly this reference to investment in capital infrastructure. Nowhere is that a matter which is identified by the AIRC as something that moved them to make a stand-alone award.
PN2529
I am going to deal with this a bit later, but we also say that none of the unique conditions in the award are actually referable to the investment in capital infrastructure. I am going to demonstrate that a bit later on, but, for present purposes, it is complete silence from the AMod Full Bench about that being a factor that motivated them to create a stand-alone award.
PN2530
That is all we wanted to say about the award modernisation process. Mr Scott is now going to deal with just why the businesses we represent align to all of those factors I have identified just now and the factors that Harmers Workplace Lawyers and ASAA also identify that goes beyond what the AIRC identified.
PN2531
VICE PRESIDENT HATCHER: At some stage, are you going to identify what are the changes in conditions that are affected by the proposed coverage change?
PN2532
MR IZZO: Yes, once Mr Scott has finished, I will then be taking you through an analysis of the conditions. We have prepared an aide memoire, which I will probably circulate to the parties at lunch time, and take you through what we say are the key differences across the awards.
PN2533
VICE PRESIDENT HATCHER: Is it convenient to break for lunch now and then resume at 2 o'clock?
PN2534
MR IZZO: I think that's convenient.
PN2535
VICE PRESIDENT HATCHER: All right, we will adjourn.
LUNCHEON ADJOURNMENT [12.57 PM]
RESUMED [2.06 PM]
PN2536
MR IZZO: Your Honours, just before I hand over to Mr Scott, who is going to address the alignment of the two types of businesses, there is one matter I failed to mention that I was going to mention when we talked about the prerequisites, if you like, to the Commission varying the coverage of the Alpine Resorts Award. I went through the relevant jurisdictional cases and we have addressed all of that.
PN2537
The other thing I wanted to draw your attention to is section 163 of the Fair Work Act, which sets out additional criteria for varying the coverage of a modern award. The issue I wanted to draw your attention to is that the Fair Work Act imposes two extra requirements when it comes to varying the coverage of a modern award when the Commission exercises its modern award powers.
PN2538
The first requirement comes under 163(1), which is that the Commission must not make a determination varying a modern award if it results, effectively, in employers or employees not being covered by any award. The application we are making today will not have that effect and so, to that extent section 163(1) does not apply.
PN2539
The second extra criterion is section 163(2), which says that the Commission must not make a modern award covering certain employers or employees unless the Commission has considered whether it should instead make a determination varying an existing modern award to cover them. That, again, doesn't apply because we are not asking you to make a modern award, we are actually asking you to vary the coverage of an existing modern award.
PN2540
The reason I raise those two criteria, even though they don't apply, is to say that they do set out what the prerequisites are to varying coverage and, again, there is no additional requirement about anything about the modern awards objective needing not to be met or any other statutory hurdle other than those two set out there.
PN2541
That is all I wanted to identify to address the question from earlier this morning. I will now hand over to Mr Scott.
PN2542
MR SCOTT: Thank you, your Honours. Before lunch, Mr Izzo took you to paragraph 8.6 of our written submissions of 13 April 2017, which set out, in effect, a summary of the four particular features that were found to exist by the AIRC and which were relied upon in the making of the Alpine Resorts Award. We say at least that these particular features are equally applicable to the alpine tourism businesses that we represent.
PN2543
If I can deal with those briefly, I think there is a wealth of evidence and, for reasons of timing more than anything else, I am not proposing to take your Honours to specific paragraphs of specific statements because, to be frank, there is so much evidence, it is so consistent and, for the most part, none of this is really in contention. So, to the extent that there are contentious aspects, it might be easiest to deal with that in reply.
PN2544
VICE PRESIDENT HATCHER: (a) doesn't apply to your people, does it?
PN2545
MR SCOTT: That's the interesting one. We say it partly does. There are two aspects to it. Firstly, there is the wide range of occupational groupings. We say that is not particularly relevant to our businesses.
PN2546
VICE PRESIDENT HATCHER: What do you mean it's not relevant? You said all these factors apply. (a) does not apply.
PN2547
MR SCOTT: I was proposing to deal with it in a different order and leave that till last, so I can get the best out of the way and then deal with the more contentious. What we say about that is that if you go back to the AIRC reference, the passage at 8.5, what the AIRC found was that employees of alpine resorts are employed in a wide range of occupational groupings and experience considerable fluctuating demand for their skills and services.
PN2548
There are essentially two aspects to this. There is firstly, as your Honour correctly pointed out, the aspect of wide range of occupational groupings. We accept that we do not have that to anywhere near the same extent because these businesses don't employ snow groomers or ski patrol. But the AIRC were looking at this wide range of occupational groupings in the context of the portability of moving staff around, and so that is where we say, with respect, that has some role to play in terms of application to the alpine tourism businesses, and if I can just deal with that, because I accept, your Honour, that we don't have that range of occupational groupings as such.
PN2549
VICE PRESIDENT HATCHER: You see, that factor by itself may be a strong reason why an employee should be covered by a single award rather than a range of different occupational industry awards.
PN2550
MR SCOTT: If I understand the observation, we don't cavil with the fact that there is an award which covers a wide range of occupational groupings for alpine lifting companies, we don't cavil with the fact that they employ snow groomers, maintenance staff, lifting employees, ski patrol. I probably misunderstood the observation. It, of course, has wider coverage, wider classifications. The thrust of that submission during award modernisation was not simply we employ a diverse range of people, it was we employ a diverse range of people and they must be under the one award because we move them around. That was the thrust of the submission, that was the reasoning that was held in the AIRC decision.
PN2551
To the extent that it's a wide range of occupational groupings that must be under the one umbrella because we move them around, we say there is some relevance in that respect with alpine tourism businesses, and I will take you to a couple of examples, if I have addressed that observation or that query appropriately.
PN2552
I have dealt with the fact that we don't cavil that there are a wide range of occupational groupings. What we wanted to address was the fact that the evidence about portability of staff, transfer, whatever you want to call it, was largely overstated, and that was borne out in the evidence of Mr Girling.
PN2553
During cross-examination, Mr Girling indicated that ski patrol are quite specialised, don't move around; snow makers snow groomers, quite specialised, don't move around; food and beverage attendants, they don't do lifting, they don't do on mountain work. The food and beverage portability related to moving from one food and beverage establishment to another, so you go from Jacks at the Perisher Centre to somewhere else within the Perisher Resort. The evidence of Mr Girling was that ticket sellers don't do any other work other than ticket selling and, from time to time, perhaps ski hire, but, again, it's similar in nature or similar function work. That was just in respect of Perisher, which is his employer and the business he works in.
PN2554
If his evidence is overstated in respect of Perisher, there are problems if you apply that evidence to the other resorts more broadly. Mr Izzo put the question to him, "If I asked you all these questions in respect of other resorts, you don't have the answer, do you?" and that was accepted.
PN2555
VICE PRESIDENT HATCHER: But he did give evidence that smaller, more compact resorts would have a greater degree of multifunctioning amongst employees, didn't he?
PN2556
MR SCOTT: Well, it's a very generic assertion. My understanding of his evidence was that for the purposes of preparing his statement, something was sent to the members of the ASAA asking them some questions, those members replied and it was to the effect of - and I am paraphrasing of course - "Do you have portability across your resort?" and they all wrote back and said "Yes".
PN2557
To the extent that any finding is going to be made about that, in our submission, the evidence does not stack up. We don't say there is never any portability of staff - we don't say that - but we say that it is overstated. So, to the extent that that is a factor that is used against us to say, "We've got this feature and your alpine tourism businesses don't", I say two things. Firstly, "You are overstating that feature and the existence of that feature in your business for a start, but, to the extent that you have it" - I won't take you to it, but the Pennington statement, as an example, talks about employees having portability across retail, cleaning and food and beverage roles, as well as working for other businesses, including the alpine resort.
PN2558
What he is saying is in his business, people are moved around from working at the general store, at the post office, to going and cleaning, to going somewhere else and doing some food and beverage work, pulling beers at the bar, and then he also makes the observation that certain employees have more than one employer during the ski season. They might work for Mr Pennington at Dpsi General, they might also have a second job which is at the alpine resort itself, whether that might be Mount Hotham. So, we say it is overstated. Well, we say three things.
PN2559
Firstly, when we talk about "wide occupational groupings", it was in the context of portability. That was the context in which it was used during AMod. We say that was overstated, but to the extent that there is some existence of it, which we accept there is some existence of it, there in also some existence of that in alpine tourism businesses. Those are the submissions in respect of the wide range of occupational groupings, which is, of those four, the one that there will no doubt be some criticism of, but I don't accept that it just doesn't apply.
PN2560
Can I deal with the first - the reason I was dealing with this first was because it was the least contentious - to get it out of the way. The businesses are seasonal. There is no dispute, there won't be any dispute that the alpine lifting companies' businesses are seasonal. There is no dispute about that. What we say is the alpine tourism businesses are equally seasonal.
PN2561
The evidence in this respect, firstly, the starting point would be the confidential Girling affidavit. That provided data on daily lift pass usage across five resorts, the main five or the largest five resorts, during 2016 on a daily basis. For confidentiality reasons, the data was provided as a percentage of the business day. So that is people using the ski fields in terms of tapping on to get onto a lift to go up and to ride down.
PN2562
The Slaytor statement then effectively makes the Girling statement a bit more palatable because what it does is it takes that raw data and analyses it and the Slaytor statement has some tables in it, and I will take you to these tables, if I can. It is the statement of Emily Slaytor and it is paragraph 26 of that statement. Really what this is is an analysis of the lift pass usage data. It is put into a user-friendly format and you will see there Ms Slaytor has taken the four key months of the season, June, July, August and September, looked at the lift pass data and broken it down as a percentage across those four months.
PN2563
The four months is a hundred per cent. Mount Buller, 6 per cent of visitors over those four months were during June; it jumps substantially to 41 per cent during July; 43 per cent during August, and 10 per cent during September.
PN2564
VICE PRESIDENT HATCHER: The copies we have are all redacted.
PN2565
MR SCOTT: I had the same problem. I have got one that is unredacted. The reason that it is redacted is there were confidentiality undertakings provided and my understanding, at least, is there may well be some friends here who don't have access to this. That is a matter for them to take up with the ASAA because we were required to sign confidentiality undertakings.
PN2566
MR IZZO: The unredacted versions were filed in hard copy after the redacted versions were put on the award modernisation website. If there's any issue in locating them, we can obviously file further unredacted versions.
PN2567
MR SCOTT: I thought I was getting some - - -
PN2568
COMMISSIONER RIORDAN: It depends if you want to take any notice of the information or not.
PN2569
MR SCOTT: I thought I was getting some odd looks.
PN2570
VICE PRESIDENT HATCHER: But there's a whole range of data annexed to it which is not redacted.
PN2571
MR SCOTT: That's right. Perhaps I can take you through that.
PN2572
MR HARMER: If it assists, I am happy to hand up an unredacted version. The confidentiality was as per the parties, but there is no difficulty, obviously, with the tribunal seeing it. We might have extra copies - at least one.
PN2573
VICE PRESIDENT HATCHER: Anyway, I think the evidence shows there are more visitors in winter than in summer.
PN2574
MR SCOTT: Yes. Perhaps we can deal with it in this way - if I can find my pen. I appreciate my friend's kind offer. It is not contested, for a start, but if I can just - appreciating that your Honours don't have numbers in front of you but you've just got black boxes, what the data shows is that over the four-month period, June, July, August, September, the percentages at, say, Mount Buller for those four months went 6 per cent, 41 per cent, 43 per cent, 10 per cent. That adds up to a hundred per cent. But you can see June and September is 6 and 10 per cent, so you have got 84 per cent of their visitors during the peak in two months. That is the seasonality in respect of lift pass usage data, so when you get onto the lift, you tap your pass.
PN2575
What we say is that is the best proxy, lift data - because of the sophistication of the system - that is the best evidence of foot traffic through the villages because, of course, Mr Izzo talks about "the funnel" - we have tendered photos of these resorts - the village sits at the bottom, generally, of these resorts, where you get on the lift, you go to the top, you ride down, you walk across a creek or across a road, or whatever it is at Thredbo or Perisher, and the village is right there. Now, there are also establishments halfway up the mountain, on the top of the mountain, around the mountain, but if someone is getting on a lift and going up the hill and snowboarding or skiing down, they are going through the village. That should be uncontroversial.
PN2576
What we say is in terms of the seasonality of the lifting companies' business, the seasonality applies in the same way for our businesses. Our businesses are small businesses, they don't necessarily have great sophisticated systems for keeping data on. That said, they do have occupancy rates if they are hotels and there is a wealth of evidence of that from the lay witnesses. But, in respect of this data and the lift pass data, we say that it is the best proxy for the evidence of people moving through and the seasonality is exactly the same for us. Mr Girling accepted that in cross-examination.
PN2577
VICE PRESIDENT HATCHER: But the Hospitality Award covers any number of operators who are affected by a range of seasonal factors, doesn't it?
PN2578
MR SCOTT: My understanding of the Hospitality Award is it covers hospitality businesses regardless of their level of seasonality.
PN2579
VICE PRESIDENT HATCHER: So what is unsatisfactory about the Hospitality Award in dealing with the issues of seasonality?
PN2580
MR SCOTT: I think Mr Izzo is going to come to that. I am moving as quickly as I can through the issues. What we say, for all those reasons, all the reasons that we are going through, these are the factors that make this industry unique and relevant. Are there seasonal factors in Cairns hotels on the Great Barrier Reef? Probably. Is it to 84 per cent in two months? No.
PN2581
Just to touch on the seasonality, we had evidence this morning of Mr Aivatagolou saying, "When the lifts stop turning, we close the doors." My favourite was Mr Foster from Thredbo Lantern Apartments. He gave evidence that he was a keen skier and Mr Harmer asked him, "Do you get out to the other resorts? and he said, in a very understated way, "I'm pretty busy during winter." That reflects the seasonality of these businesses where 80 per cent or more of their revenue needs to be made in four months, and a lot of that in two months and, again, it is not contested.
PN2582
The other example which I thought was interesting was again Mr Aivatagolou was asked about summer, "What about summer, there's people that go there in summer?" and he said, "On a busy summer day, we might get 300 mountain bikers; on a busy day, we get 10,000 skiers." That is a good illustration of the seasonality that we are talking about.
PN2583
VICE PRESIDENT HATCHER: That is in terms of a business that accommodates both people staying there and visitors, but some of the accommodation providers were getting close to maximum occupancy during the summer months, over the school holiday period at least.
PN2584
MR SCOTT: Yes, and we accept that there are very specific periods, Christmas, New Year, the Easter long weekend where there is a particular event on, there might be mountain bike events or something, and each of the resorts will vary to differing degrees, but there are, during the summer downturn or the summer off season, if I can describe it as that, a few specific parts where they will get close to a hundred per cent occupancy. Christmas and New Year is a good example; Easter is a good example.
PN2585
VICE PRESIDENT HATCHER: It's not only Christmas and New Year, there was a four-week period from about Christmas to about the third or fourth week of January, as I recall it.
PN2586
MR SCOTT: That wasn't my understanding of the evidence. To the extent that that is correct, that may be the evidence of one operator.
PN2587
VICE PRESIDENT HATCHER: We are talking about accommodation here.
PN2588
MR SCOTT: Yes. You have heard evidence from eight or nine accommodation providers. Each of their occupancy rates are set out in their evidence. They do differ, of course. To the extent that there is a four-week window of a very busy period over the entirety of January, unless I have misunderstood some of the evidence, I don't think that is the norm. That may apply on one or two occasions or for one or two accommodation providers, but, equally, to the extent that there's busy times during Christmas, New Year, Easter, the Thredbo Resorts opened, they are a seasonal business, they are very busy in winter, like our businesses are, they are not particularly busy over summer, but, again, they'll have the exact same weekends where the whole town is busy. To the extent that there are seasonal fluctuations, they mirror each other. That is our submission in respect of seasonality.
PN2589
If I turn to fluctuation - - -
PN2590
COMMISSIONER RIORDAN: There wasn't a single business, though, over the last few days that's turned up and said that their business is marginal in relation to profitability.
PN2591
MR SCOTT: Yes, I recall that. It may not have been the most precise evidence we have heard this week. From memory, there was, at least on my part, some confusion as to whether they were talking about during the winter or whether they were talking about over the course of the entire year. I think the evidence was that, "We are profitable during winter, but we effectively need to make as much money as we can during winter to tide us over during the off season", and when you get to that point, and I think it was our final witness, Ms Clark, I think, who said, "If we don't have the best winter season, it becomes marginal over the course of 12 months." So, if you're looking at calendar year, for some businesses perhaps it's marginal.
PN2592
The consistent evidence has been that these businesses are profitable. We are not here saying that they can't survive. That is not our submission. Certainly there was cross-examination in relation to profitability and it was broadly consistent.
PN2593
If I turn to fluctuating demand for employee services and weekend peaks - this was one of the AIRC bases for making the award - it's three-fold: it's fluctuating demand over the course of the year, which is really just seasonality, and I have dealt with that; there's, secondly, fluctuating demand between mid-week and weekends, and then there's, thirdly, the fluctuating demand for employee services or labour when the weather is bad. I will touch on the second and third.
PN2594
If we look at fluctuations in demand for labour between mid-week and weekends, again, the Slaytor statement, albeit that it's blacked out, there are two tables there. I took you to the first one at 26. There's a second table at 23 which breaks down the lift pass data between mid-week or weekdays and weekends. There is evidence of that with respect to the lift pass data. We say, for the same reasons, that evidence applies to the alpine tourism businesses for the reason that it is proxy for foot traffic.
PN2595
There is evidence of occupancy rates in respect of the lay witnesses, the accommodation providers, about occupancy rates being higher on the weekend than during mid-week. Again, each business will vary as to what degree of fluctuation between mid-week and weekend, but certainly weekend is the peak time. Again, it is not contested, to my knowledge, that there is this mid-week/weekend fluctuation in demand. The alpine lifting companies have that in their business, the alpine tourism businesses have that in their business equally.
PN2596
The third element of fluctuations is fluctuations in labour during poor weather. This affects the alpine tourism businesses similarly, but there's two kinds of categories in which it does that. The evidence of Girling was that during poor weather, the resorts now have snow cams, so you can get your mobile device out, have a look and you can actually physically see in real time whether there's snow or whether it's just a grassy hill.
PN2597
If you're in Sydney on a Thursday thinking of going down for the long weekend you'll look on Thursday, you'll look at the weather forecast, you'll see whether it's going to be a good weekend or not. If the weather is poor you won't go at all. You won't even get out of, you know, Sydney. Equally in Jindabyne, if you're in Jindabyne and you know it's a poor day whether wise, you know, many people just won't go up the hill. Then if you're in the village, the alpine village and it's poor weather we accept that people don't go up the mountain to the same extent as a bluebird day but again, so when that happens poor weather, people are in the village, yes, the hospitality, the food and beverage businesses in town, a lot of them will become busy because there's less people on the mountain; there's more people milling about trying to find something to do. That applies equally to the food and beverage businesses that are operated by the resort, and Mr Girling gave evidence of that saying, when it's poor weather, when the lifts are on hold because of high winds, people funnel down the mountain and Jacks at the Perisher Centre and the entire Perisher Centre gets very, very busy.
PN2598
So, again, there's alignment in that respect. Then there's the other category, which is those alpine tourism businesses up the mountain. They're affected in the reverse to those down the mountain. When it's poor weather they have fluctuating demands for their labour because your Honour will recall the wild ride we had up to Eagles Nest which is a privately owned business at the top of the Kosciuszko Thredbo lift. If it's terrible conditions and the lift might not even be operating you can't even get there, so to say that they don't have fluctuating demand for their labour during poor weather, well, they just do, and it's the same with Kareela Hutte and any other on mountain food and beverage or on mountain establishment, whether it's resort owned or not. If you can't get there, it might be that your employees can't even get up to the establishment. So we say again there's alignment with respect to that fluctuating demand.
PN2599
The last one, which was part of the reasoning of the AIRC, was high incidents of casual and seasonable employment and the need for flexible working hours. Again, we say there is alignment. We don't cavil with the proposition that the alpine lifting companies utilise casual and seasonable employees during the peak length of season. I don't think anyone would cavil with the proposition that the alpine tourism businesses do the same, and the evidence has been consistent in that respect; that there's a high level of casual employees short-term, itinerant workers short-term; itinerant workers; they're not staying year round, and if you look at the data in terms of percentages, you know, businesses go from two employees to 20 employees between summer and winter.
PN2600
In terms of flexible working hours the evidence of John Leggett is a good example, and he operates, I think, the Candlelight Lodge, and he gives evidence of the fact that his kitchen staff on a Sunday will over-prepare food. They will do three days' worth of food prep so that Monday/Tuesday, instead of coming in at 12 and starting prep for night service, they'll be up the hill, and they'll come in at 4 because they did it all on Sunday because they don't want to be up the mountain on Sunday because it's busy. So there's clear flexibility in the hours that are being worked.
PN2601
So they're the four factors that the AIRC relied on to make the Alpine Resorts Award. We align with three-and-a-half we say. There's two other factors that the ASAA have relied upon which weren't borne out by the reasoning these two additional factors weren't borne out in the reasoning of the AIRC decision but the ASAA relied on it then, and they rely on these factors now, and we say were equally aligned.
PN2602
The first is snow sports enthusiasts, so employees sorry, your Honour.
PN2603
VICE PRESIDENT HATCHER: Sorry, go on.
PN2604
MR SCOTT: Sorry. The two additional factors and I'll keep this very brief, the first is that employees the workforce is made up predominantly of snow sports enthusiasts. In respect of the alpine lifting companies Mr Girling gave that evidence. In respect of the alpine tourism businesses most of the witnesses gave that evidence; that they employ snow sports enthusiasts. In the case of I think it's Brett Williams he said "I interview them and if they're not snow sports enthusiasts I don't employ them". So his employees are 100 per cent snow sports enthusiasts. So, again, we say we're aligned in that respect. Much of the evidence was potentially vague and that's been rectified in-chief. Some of the evidence is actually quite specific and we rely upon that, so I won't say any more about that. But the second factor that the ASAA have relied upon is that employees prefer to work on weekends to have mid-week off, and we say, yes, that may well apply to them. Yes, it applies to us in the same way, and there's evidence in that respect, and I've referred to Mr Leggett who gave evidence of over-preparing on the weekends so that they could have time on the mountain Monday/Tuesday.
PN2605
Again, I don't expect any of this to be in contest, but these are all relevant factors and important factors because they're the factors going behind the making of the award to begin with, and most of the factors that are raised by the ASAA to say they are unique, and we don't say they say they're unique. We say they do have particular features, but our businesses do as well, so I suppose we say throw them all together and they're unique, and they're unique in the sense that they are unlike other hospitality businesses elsewhere who don't have these factors. So the factors are very consistent.
PN2606
VICE PRESIDENT HATCHER: Apart from not having snow sports enthusiasts what do other hospitality businesses not have?
PN2607
MR SCOTT: They don't have snow sports enthusiasts presumably.
PN2608
VICE PRESIDENT HATCHER: Obviously, but they have other types of enthusiasts.
PN2609
MR SCOTT: No doubt hopefully.
PN2610
VICE PRESIDENT HATCHER: I mean, if you go to the Great Barrier Reef you'll find lots of dive enthusiasts who are doing Great Barrier Reef tours.
PN2611
MR SCOTT: One would think so. At the risk of being repetitive ‑ ‑ ‑
PN2612
VICE PRESIDENT HATCHER: So what is it about this that is different in nature as distinct from degree from the hospitality industry in general?
PN2613
MR SCOTT: In a nutshell we say the alpine resorts award was made specifically to apply and be very relevant and applicable to a very small discrete category of employers and employees. The ASAA has been here all week making sure that that point is made; that they have this award that was tailored to them, and we say the award is well tailored to them, but it's just as well tailored to our clientele, so are they different from the hospitality businesses elsewhere; are employees in this industry different to employees in the hospitality industry in Cairns, I don't know. There's no evidence of that. What we say is the employees working in alpine tourism businesses in Thredbo or Perisher or wherever in the alpine villages, they are the same character of employees who work for the alpine lifting companies. They're people who go there for the season because they want to ski and snowboard. They're people who go there and want to work on weekends so that they can have their week days off. They are the same people, so are the business hospitality? Yes, of course they are, but this award was tailored and customised for a very discreet group of individuals, and we say well, we're here throwing our hands up saying, "What about us?", because we have all of the same features, so in a nutshell - Mr Izzo is frantically scribbling. I'm sure he's got things to say, but that's the response to that specific query and that's all I was planning on saying in respect of the alignment, but we say we are aligned.
PN2614
MR IZZO: I was going to address the remaining aspects of the submissions, your Honour, but if I could supplement what Mr Scott has just said, I think there are a number of factors that render these businesses different. Firstly and some of these are what Mr Scott has mentioned but there is a preference to have weekends working. That is far more marked in the alpine resort areas for the reasons we've all heard in the evidence than it is across the rest of Australia in hospitality businesses, even somewhere like the Great Barrier Reef.
PN2615
In the Great Barrier Reef, if you're on an island, the weekend may hold less significance to an employee but at the alpine resorts the evidence we're hearing is the weekends are almost positively repulsive to the employees ‑ ‑ ‑
PN2616
COMMISSIONER RIORDAN: Mr Izzo, we haven't heard that from a single employee.
PN2617
MR IZZO: That's correct, Commissioner. We haven't heard that from an employee.
PN2618
COMMISSIONER RIORDAN: So it's what you say?
PN2619
MR IZZO: That's right, but ‑ ‑ ‑
PN2620
VICE PRESIDENT HATCHER: If you look at the Restaurant Industry Award penalty rates decision as well as the main penalty rates award decision they all refer to the fact that for a lot of particularly young employees they prefer to work on weekends and evenings because during the week they're at school or they're studying, and they positively refer to work on weekends because that's when they're available.
PN2621
MR IZZO: The ‑ ‑ ‑
PN2622
VICE PRESIDENT HATCHER: But these aren't unique characteristics.
PN2623
MR IZZO: The penalty rates decision, your Honour, so far as it relates to those students was a small portion of that decision. That decision looked at all staff working on weekends compared to versus the week and that decision found that there is a higher disutility associated for weekend work primarily for two factors; one was that the evidence demonstrated that there were higher levels of social engagement on Saturday, particularly in relation to sporting events and other types of social activities and Sunday was social engagements particularly in relation to family, and that was the evidence, if I can take you to the references, that primarily led to a conclusion that there is a higher disutility working in the weekends than during the week. We say both of those factors do not pertain to our industry because the main sporting activities scheme was snowboarding, and the evidence, yes, I accept, Commissioner, it's from the operators, the evidence is that the employees prefer to do that during the week as the operators do because that's when the crowds are less, so we say that is a distinguishing factor.
PN2624
In relation to other hospitality locations there might some areas where the weekend is not as much of an issue because, say, you're on an island resort maybe the days blend together, but, again, the evidence went further than that here and, as I said, it was that actually weekends were undesirable days to ski, so they'd prefer to ski during the week.
PN2625
So that was the first matter that distinguishes it. Mr Scott has already mentioned that the seasonality is more marked, and I think that's quite right. You have incredible spike over July/August. You then have little weekends over the summer, or discrete I should say; not little; discrete weekends over summer. They are marked.
PN2626
VICE PRESIDENT HATCHER: More marked than what?
PN2627
MR IZZO: Than hospitality businesses that might have seasonal variation, so ‑ ‑ ‑
PN2628
VICE PRESIDENT HATCHER: We haven't hard evidence of that. For example, you could refer to any number of beach towns that have a peak from mid-December to late January, and that's their peak.
PN2629
MR IZZO: That would be their peak, but they would also have a period throughout the rest of the summer where they would get high volumes and they would have a period, presumably on the fringe season, now I know we don't have evidence of this, but spring and autumn, where they'd have some level of high tourism turnover. In these resorts it's not even just winter; it's basically July/August. So that's why we say it's more marked, the seasonality. There is an immediate fluctuation, the third point which distinguishes them from hospitality is there is an immediate fluctuation in demand due to inclement weather, so you can have instances with almost no notice where businesses are required to close or their patronage is severely restricted due to imminent weather conditions. That would be more marked than across the rest of the country.
PN2630
VICE PRESIDENT HATCHER: In my local pub they have a big beer garden and on a sunny day it's got 150 people in it, and on a rainy day it's got none.
PN2631
MR IZZO: That would be a feature. I suppose what makes the alpine resorts different; well, there would be two things in that regard: (1) the inclement weather in relation to the alpine tourism business makes attendance almost an impossibility for some of them, so they go down to zero, and in relation to it also I suppose brings less people to the region as a whole whereas you may still have people in your local area or the local pub still looking for some type of social activity, there's actually just less people in the area, so we say again it's probably just going to be more marked. Yes, other hospitality businesses will have fluctuation due to weather on occasion of course.
PN2632
VICE PRESIDENT HATCHER: But all these questions beg the ultimate question and, that is, why doesn't for example the extent that your members are engaged under the Hospitality Award, why doesn't that constitute a set of terms and conditions which meet the modern awards objective insofar as those employees are concerned? Ultimately again this is not which box you put them into; it's a question of what the terms and conditions are that meet the modern awards objective.
PN2633
MR IZZO: I will come to that now then, your Honour. The final two points that I want to just note for the record then as being distinguishing; one is that there's also night work, and it's the same principles about penalty rates, so the Hospitality Award I'm going to deal with these anyway, but there's an issue about night work, and they are this is the other thing; our alpine tourism businesses have a competitor which is on a different safety net and different labour cost structure to other hospitality businesses. They're not facing competitors in a similar way.
PN2634
But let me come to the provisions, because that's obviously of incredible importance and is a matter that you've just raised. I'd like to start and essentially I'm going to take the Bench in some detail to 11 key businesses, and it's not just hospitality but it relates to retail and it relates to the Restaurants Award as well, and if you just bear with me for one moment. Sorry, so there's going to be 13 key areas that I'd like to take you to. We're looking at three key awards. There's hospitality, retail, restaurant. They're the major industry awards we say that would be affected by this application.
PN2635
I note your Honour mentioned contract cleaning. We don't think that would be affected. So if you are a business engaging in the business of serviced apartments and you happen to engage some cleaners we say that that would be covered by the Hospitality Award. If you're only providing cleaning services, you were doing contract cleaning, and that wouldn't be covered by a draft determination. For the purposes of this exercise ‑ ‑ ‑
PN2636
VICE PRESIDENT HATCHER: Property management in a lot of cases really only involves maintenance and cleaning, doesn't it?
PN2637
MR IZZO: If that is all that they are doing; they are just doing maintenance and cleaning we don't think that falls within the scope of our draft determination. The draft determination is intended to address people providing serviced apartments, yes, and perhaps if I can just hand up a copy of the relevant award. Yes, I've got a bundle here with the Alpine Award as well as the other awards that I've mentioned.
PN2638
I've just handed up a bundle of essentially the four awards I referenced, and we would have unfortunately because of the submissions therefore we thought we'd have a bit more time so I don't have tabs. In the third award in is the Hospitality Award. If I can take you to clause 4.2 of the Hospitality Award; that clause talks about the hospitality industry. It starts off talking about hotels, motor inns, et cetera, but then it goes on to talk about guest houses, serviced apartments, ski lodges, holiday flats or units, types of residential or tourist accommodation. So to the extent that one is providing a serviced apartment even ski lodges - it's interesting that that's in there or other residential tourist accommodation then there appears to be an argument to say well, you are covered by the Hospitality Industry Award because you're in that industry.
PN2639
If you are simply just a contract cleaner providing contract cleaning services you'd be covered by the Contract Cleaning Award I would say. We are not seeking to have people covered by the Contract Cleaning Award covered; merely employees covered by the Hospitality Industry Award. If there's some concern about that then perhaps if the Commission was moved by our case to make amendments we can talk about the draft determination but certainly our intention is if you're just providing maintenance or you're just providing contract cleaning we don't anticipate that being a hospitality business and wasn't intended to be covered by the draft determination.
PN2640
VICE PRESIDENT HATCHER: Just going back to the award modernisation process point you were making if the Full Bench had issued a hospitality industry exposure draft which had a specific reference to ski lodges they couldn't seriously have been in any doubt about the existence of ski lodges or that they weren't to be covered by the Alpine Resorts Award.
PN2641
MR IZZO: A lot of that depends upon that question, your Honour, there's further questions which feed from that that I don't have the answer to, such as, was it the same Bench; at what time was this made. I don't have the answers to that. It is an indication that this Bench that made the Hospitality Industry Award may have considered ski lodges being covered. It's there - that's right. I don't know the timing, at least not immediately, but I can take that on notice. Perhaps I can respond as to how the making of this award fitted in with the Alpine Tourism Award.
PN2642
VICE PRESIDENT HATCHER: All right.
PN2643
MR IZZO: So if we go to the differences, the first one, and it is really probably one of the key and most important ones, is the penalty rates in the award. What I'd like to do to address that is I'd like to take you to the penalty rates decision because I think it's important that we have a, or at least our client's understanding of the penalty rates decision, is conveyed to the Bench, because we say quite contrary to your Honour's suggestion that if this is about penalty rates we're running head-on into penalty rates cases, I think it's the very opposite. If you don't make these determinations you are then acting inconsistently in a sense with the reasoning in penalty rates, and I'd like to show you why.
PN2644
If I can take you to paragraph 100 ‑ ‑ ‑
PN2645
VICE PRESIDENT HATCHER: Not the reasoning; the outcome.
PN2646
MR IZZO: The reasoning in the decision.
PN2647
VICE PRESIDENT HATCHER: No. But this thing would be with the outcome.
PN2648
MR IZZO: The outcome being in relation to those particular awards; hospitality, restaurant.
PN2649
VICE PRESIDENT HATCHER: The Full Bench has made a decision in that case about the appropriate level of penalty rates for employees covered by the Hospitality Award.
PN2650
MR IZZO: Yes, your Honour, but this argument, this evidence, these submissions were never put to that Full Bench, and it's part of the four yearly review process. I mean, at all times this application has been on foot at the same time as the penalty rates decision.
PN2651
VICE PRESIDENT HATCHER: All right.
PN2652
MR IZZO: So none of this was put to the Full Bench in penalty rates. So if I can take you to paragraph 145 of the judgment which appears on page 36. Paragraph 145 appears after some analysis of the history of penalty rates decision which talks about penalty rates being a disincentive to engage employees on weekend days. It's a penalty. The Full Bench says:
PN2653
More recently industrial tribunals have eschewed any reliance on the historical deterrence elements in setting appropriate loadings for working ordinary hours on a weekend.
PN2654
They go on to quote Gay C, and I'll move forward, paragraph 146 similarly in fixing the rate for Sunday work in the Victorian retail sector the majority comprising of Watson SDP and Raffaelli C said:
PN2655
In our view in the context of the reality that retail in Victoria is a seven day a week industry the Sunday ordinary time penalty should be directed to the compensation for the disability upon employees and should not be directed to deterring the working of Sunday ordinary hours.
PN2656
So they talk about disability. That is then reinforced at 147:
PN2657
Although described in the modern award as penalty rates they are in reality a loading which compensates for disability.
PN2658
The Full Bench in this case then, at paragraph 158, which is overleaf, made its conclusions. It says:
PN2659
Having regard to recent arbitral authorities the terms of the modern awards objective in the scheme of the Fair Work Act it seems to us a deterrence is no longer relevant consideration to setting a weekend penalty rate.
PN2660
If I skip forward to the last line in that paragraph:
PN2661
Compensating employees for disutility associated with working on weekends is a primary consideration to setting of weekend penalty rates.
PN2662
If I can then take you, your Honours, forward to paragraph 689 and page 142. Before I read out the specific reference I'm referring to, 689 follows a very detailed consideration of the expert evidence about disutility associated with working on weekends. That expert evidence went to a variety of matters including people's interactions with family; people's interactions with friends and social engagements; there was health evidence put on by the unions, which was largely not accepted, that people actually suffer adverse health consequences if they work on weekends.
PN2663
The Full Bench looked at all of that expert evidence and it summarised its view in one paragraph. That paragraph starts with 689(1) and they said there is a disutility associated with weekend work above that applicable to work performed Monday to Friday. That finding is what reinforced their view that there should be penalty rates on a weekend, but they then went on to say that generally speaking for many workers Sunday work has a higher level of disutility than Saturday; the extent of that disutility is much less than in times past, and that was the key finding that then led to the Full Bench saying, well, we should look at amending the Sunday rate.
PN2664
The reason those findings are important is because the reasoning in this decision was therefore saying that it's social disabilities. There are things that employees miss out on on the weekend that makes the weekend sacred and that needs to be compensated. Our argument is that in this case there is no evidence of disutility associated with weekend work, and on the contrary we have tried to put on, and we say we have put on, significant evidence about the fact that if anything the disutility might be greater with working in the week. There's the individual operator evidence. There is the evidence of Mr Girling, and then if I could indulge with a very short digression to the photographic evidence put on. If your Honours have the statement that was filed by myself in the proceedings which has the photos attached I'd just like to very briefly ‑ ‑ ‑
PN2665
VICE PRESIDENT HATCHER: Mr Izzo, I don't think we need to be persuaded that they're busier on weekends than week days and it takes longer to get on a chair lift.
PN2666
MR IZZO: I accept that, your Honour. I think the point of those photos is that just from a graphics perspective, you don't have to look at it now, is that it's actually even just to see it's a very large group of people on a weekend that are trying to get on, and on the weekday it's virtually none, and we heard from Mr Girling that it can take up to 40 minutes on the weekend but during the week it could be nothing. Some of those photos that I've attached show a zero queue.
PN2667
The one bit of evidence Mr Girling was unable to give us is how long it takes to get down a run. He said it varies. That's true. Our position is it takes a fraction of that time. For a very advanced skier it could take three minutes; for someone else it could take five, but what you're talking about is then on a weekend finishing that run and waiting for another 40 minutes. That's why the weekends are unattractive. So what we say in relation to the penalty rates in the Hospitality, Restaurant and Retail Award is that the reasoning which warrants their inclusion is just not applicable to the businesses and their employees here.
PN2668
There was an opportunity for the unions to call employee evidence. They didn't. Difficult for us, as employer organisations to have access to employees, so we're not in the position to do that, but certainly the union didn't put on any evidence contesting it. One must think that the AIRC accepted this position to have an award without any penalty rate. They must have been moved - because we know penalty rates are very common across the award network or the award framework, they must have been moved by the argument that there is a different profile of employees that do not dislike working on the weekend.
PN2669
So that's the main thing we wanted to say about the penalty rate. In relation to some points raised by the SDA, the SDA points out that in the summer months this is less important. I think we have to accept that. There's no skiing in summer, but most of the employment is in winter, the vast majority of it. We even heard from the operators that those people that are there for the summer, they were all snow sports enthusiasts who come because of that winter lifestyle in any event, and one of the things the Commission has to grapple with is setting the appropriate safety net for the majority of the industry, or for the industry as a whole, and we say, in that regard, when all the employment, all the trade happened to be the majority of the working hours happened to be during the winter months that's where the focus needs to be.
PN2670
VICE PRESIDENT HATCHER: But what about evening penalty rates?
PN2671
MR IZZO: So we say it's a similar argument. In relation to evening penalty rates there is some disability or some disutility that's being compensated for by the award. Traditionally the evening penalty rates have been less than the weekend penalty rates, but there is a recognition that working at night-time appears to be undesirable for at least large groups of employees. Again, we say that's not applicable in this industry because you, generally speaking, aren't skiing at night. There are - and again there wasn't much evidence on this, there are some resorts that offer night skiing, but it is very limited. It is only the main run or one lift, and (a) it's a lot colder at night, but (b) there's simply not the variety and it doesn't have anywhere near the take up of day time skiing, so it's the same point, and that's the second distinguishing factor.
PN2672
On the penalty rates then, and I say this with the greatest of respect, and I don't want to push the point too far, but the reality is if the penalty rates were to stay in these awards, the hospitality, retail and restaurant for this class of employees we say it must be for some other reason other than what's been identified in the Full Bench February penalty rates decision, because the February decision talks about disutility and social disabilities suffered for working on the weekend and we don't think the evidence shows that, and so that's why I say with respect that to not grant the determination in a way is inconsistent with the reasoning of the penalty rates decision.
PN2673
So, your Honours, that's the first category of the clauses that we say aren't appropriate in those three awards that currently cover our businesses. The second category is night-time penalties, and I've just addressed that as well. The third category relates to rostering, and if I could at this time hand up an aid memoire which actually goes into the various award provisions. Again, because we've moved forward with submissions there was a couple of running repairs made to this document, and it may be that we would seek to file a finalised document shortly or in due course. I provided copies to my friends. There is also another document which compares the award classifications to the other part of the case. We haven't tried to make the writing as small as possible so you can't read it. It was a product of the printing process.
PN2674
So I mentioned rostering. Rostering is mentioned on the second page, I believe, of this document. The short position is this: all of the awards allow you to change rosters by mutual consent. That's not in contest, but the restaurant, Retail and Hospitality Awards require a period of notice, which is ordinarily seven days, to vary a roster. The Alpine Resorts Award provides one days' notice to vary a roster or where not practicable it may be done with as much as notice as is reasonably practicable, and we say that is a direct link to the weather, in effect, conditions; that they can have an impact that is so immediate that employees cannot prepare for it, and as a result the ability to vary rosters is significantly greater under the Alpine Resorts Award than the other three.
PN2675
VICE PRESIDENT HATCHER: But what's the relevance of this when I thought the overwhelming evidence was that the seasonal employees employed by your members are casuals?
PN2676
MR IZZO: So the relevance of this would go to any you're right, your Honour would go to permanent staff. The majority are casuals. That's right. But to the extent it relates to permanents those people engaged year round, part-time or full-time staff, then it is a relevant factor.
PN2677
VICE PRESIDENT HATCHER: That's very few, isn't it, if any?
PN2678
MR IZZO: It's not none. I think for most of them, and again I'd be generalising across the evidence, most of them had, depending on the size, a handful; whether it was two or three or four that were there all year round, and then they'd bring on a majority in winter. It could be 15; it could be 20. It'd be a it's not an infinitesimal or fractional amount. It could be 20 per cent of the workforce; it could be 15 per cent, but it's a percentage, and it's one of the factors.
PN2679
The next relates to types of employment. That's the issues I want to deal with. Types of employment is contained on the front but I really have to take you to the award. If I can take you to the Alpine Resorts Award and if I can take you to clause 10.4? 10.4 has a part-time employment provision which relates to setting hours of work, engagement, agreeing on regular working patterns, et cetera. That provision in some way, shape or form, generally tends to be reflected in the other awards, both the ones we're talking about but across the framework.
PN2680
VICE PRESIDENT HATCHER: No, that doesn't reflect the pending new provisions for the Hospitality or Restaurant Awards.
PN2681
MR IZZO: Right; that are to be made I take it. The point I was going to make about that, your Honour, is that if you then go to clause 11, seasonable employment, it talks about:
PN2682
A seasonal employee may be engaged on either a full-time or part-time basis.
PN2683
Then it has:
PN2684
A part-time seasonal employee is a seasonal employee who is engaged to work less than 38 ordinary hours.
PN2685
It seems to set up a different classification of part-timer, who is a seasonable part-timer, and that seasonal part-timer did not appear to have some of the gain of rostering inflexibility associated with the part-time employment provision. What we say about that is that kind of makes sense. So if you engage someone part time for the whole year they're an ongoing employee. There are greater restrictions, but if you engage them just on a season basis, again, because of the fluctuating demand, fluctuations with weather, et cetera, the ability to change rosters is greater under this award than it is under the others, and I suspect when the new provisions come in place that you've just mentioned, your Honour, again, that will be a distinction. There is more flexibility in terms of how you deal with part-time employees from an employer perspective, and we say that's appropriate given the factors that Mr Scott has taken the Bench through.
PN2686
VICE PRESIDENT HATCHER: Is there any evidence that your members employ part-timers on a seasonal basis?
PN2687
MR IZZO: There's currently no provision in the award for that seasonal part-time provision in the other awards. They could engage them on a fixed term basis. I don't know if there was a great deal of evidence. There may not be significant evidence on that point. If anything there would be one operator that mentions that. The reality is if they were to move on to this award the existence of a very clear seasonable employment provision may enable employers to notice and if it is appropriate for their business and they see it of assistance to the operations there could be utilisation of that.
PN2688
VICE PRESIDENT HATCHER: Apart from one, I think, I don't recall any of your witnesses saying that was a reason why they wanted to be under the Alpine Resorts Award.
PN2689
MR IZZO: Again, your Honour, I have to go back to what I said earlier about that, which is, I don't think they had intimate knowledge of either their award or the Alpine Award. That's not why we called them.
PN2690
VICE PRESIDENT HATCHER: I'm not sure about that. A lot of them had operated under the Alpine Resorts Award, and were able to clearly identify what the differences were.
PN2691
MR IZZO: I think they did operate under the Alpine Resorts Award because they had a mistaken belief and ‑ ‑ ‑
PN2692
VICE PRESIDENT HATCHER: Sure. I'm not criticising reasons. I'm just saying because of the fact they had used it in the past one had the impression that they were very aware of the distinctions that were important to them.
PN2693
MR IZZO: I have two things to say about that, your Honour: one is that I think the fact that they didn't know the correct award that applied to them shows that they're not necessarily that sophisticated but; (b) I mean, some certainly knew about the penalty rates. I think that was the most of them that was the fact that they knew the difference. I mean, one thinks there's lower based rates as are mentioned in the Alpine Award which we'll show is not correct.
PN2694
VICE PRESIDENT HATCHER: You're going to take us to that in a little while?
PN2695
MR IZZO: Yes. Yes. So I just don't think they have a significant level of sophistication. Certainly for our purposes we're relying on evidence to just tell you what they do; where they do it, and who their employees are. I think it's our job to demonstrate what is most appropriate given the conditions these businesses operate.
PN2696
The next provision that I'd like to detail relates to higher duties. That's at the beginning of your second page. There should be a handwritten note. The higher duties in the Alpine Resorts Award is the same as the others is my understanding. The only issue is the Alpine Resorts Award also has a dual role employment clause. Again, that relates to that portability issue across multiple occupational groupings. But in terms of higher duties they all have the same provision.
PN2697
Minimum engagement for casuals is the next. That would be back on the first page in relation to types of employment. Hospitality and Restaurant Award both have two hour minimum engagements, and that's the same as the Alpine Resorts Award. The Retail Award has a three hour minimum engagement. Again, we say, that's not necessarily reflective of the conditions and the demands on the businesses we represent because it can be the case that a business ceases operating half-way through a day depending on what happens down the mountain, et cetera. So ‑ ‑ ‑
PN2698
VICE PRESIDENT HATCHER: We didn't hear any evidence about any difficulty in having enough work to cover minimum engagement provisions, did we?
PN2699
MR IZZO: We did hear evidence that businesses can be forced to shut down though, your Honour. If the lifts stop operating then effectively the demand for employees, particularly for those businesses on the mountain ceases, and I think it's an inferences that can reasonably be drawn that depending when that happens you might have a minimum engagement issue.
PN2700
But in honesty, I mean, the minimum engagement in the hospitality and restaurants is the same anyway. It's two hours. So broadly it's similar. It's just retail where it's higher.
PN2701
VICE PRESIDENT HATCHER: Retail is not going to shut down because the lifts stop operating. They might have more business; not less.
PN2702
MR IZZO: Retail is not going to shut down because most of the retail are down the bottom of the mountain. I believe that's right. Could retail be affected by fluctuating demand, though? Yes, I suppose in both ways. It could be affected by demand increasing all of a sudden if the lifts shut early one day, and they might want to bring extra people on for a brief period. I think this point still holds that there's fluctuating demand of a very high nature.
PN2703
The next point is that there is a seasonal employment clause. The main benefit of a seasonal employment clause related to the buyout of annual leave, which is now subject to the agreed package that's been put before the Commission. So I think the element of the seasonal employment clause which would have aligned with our client's businesses is no longer necessarily relevant. There's probably two remaining elements: (1) is the fact that seasonal part-time employees appear to be treated differently for flexibility of rostering; and (2) there is some benefit. It talks about when the termination of the engagement ends you can bring it forward with I think either verbal or written notice. There's a bit more flexibility there. I mean, that's only going to affect the end of the season. It's not a significant factor but again a distinguishing feature which is more applicable to these businesses.
PN2704
Interestingly public holiday penalty rates would not be an issue because well, when I say would not be an issue, there wouldn't be any concerns about the safety net reducing because the public holiday penalty rates in the retail, Hospitality and Restaurant Awards have been reduced. The Alpine Resorts Award were not subject to that application in the penalty rates case, so from a safety net perspective there is no concern about public holiday penalty rates going down. They will actually go up. We're not concerned ‑ ‑ ‑
PN2705
VICE PRESIDENT HATCHER: Only one public holiday during the snow season.
PN2706
MR IZZO: In fact, yes, the opening and closing weekends both have public holidays. Very minimal employment on either of those weekends, so it's not really an issue. It's just not really an issue.
PN2707
In terms of overtime, the overtime provisions of the Hospitality, Alpine and Restaurant Awards all provide for 150 per cent of the first two hours, 200 thereafter. Retail is actually less beneficial. Retail is 150 per cent for the first three hours. So again in terms of the safety net there's no concern about that moving. Again, I say they're broadly equivalent. Yes, there's a slight change. Retail employees who actually go their situation will be improved, but I think when we deal with some of these more fringe matters we're going to turn to allowances there's some swings and round-a-bouts that become involved.
PN2708
There's another difference relating to time off in lieu which is dealt with in the table as part of the overtime and penalties clause. The Hospitality Award has the same TOIL clause. The Restaurant and Retail Awards also permit TOIL but it has to be at the overtime ratio, so that is if you're taking time off in lieu you get extra hours off compared to those that you work. The Alpine Resort doesn't have that provision, but what we would say is firstly, with respect to retail not a huge concern again, because, again, there's this swings and round-a-bouts position that, well, under the Alpine Award you get an higher overtime rate of pay earlier than you would under the retail. But, again, I mean, in relation to this issue we say that firstly, it is probably more appropriate for the businesses to have a TOIL provision equivalent to the Hospitality Award. They have a very short period during which they engage staff. We heard from Mr Scott the peaks in July/August, so there is a high incidence of overtime, and we think that a TOIL provision that's a little less onerous reflects the fact that overtime is quite common, and if you had employees taking significant periods of TOIL you may not have sufficient resourcing, so we say that aligns with the business operations.
PN2709
Interestingly there's a very big distinction in the junior employment clauses. The junior employment clauses in the Retail, Hospitality and Restaurant Awards go down as low as 45 or 50 per cent down to employees as young as under 16, and then they range up and this is a generalisation. I can take you to each one, but broadly speaking they go down as low as 45 or 50 per cent. They go up to about in fact, why don't I, rather than generalise, I'll take you to the Retail Award one to be (indistinct).
PN2710
VICE PRESIDENT HATCHER: I mean, there's no evidence that the members are using juniors are they?
PN2711
MR IZZO: I think that's the point, because what I was going to say, the Alpine Resorts Award's junior clause is actually far less generous to employees. It only goes down to 70 per cent of the rate. In fact, it only goes down to age 17 or lower, and I think that's reflective of the fact that there's not a high incident of junior employment, because the reality is that people who were working for the season; if you're under the age of 18 or 17 you're probably at school, and so you're not working in a resort. So the very fact that the junior clause is not; (a) the rates aren't as slow as the other awards; and (b) the ages don't go as young we say is reflective of the age profile of the employees in the industry.
PN2712
The allowances are varied and many across the awards unsurprisingly. The first thing I should say in respect of the Hospitality Industry Award there's only a meal allowance mentioned and the clothing, equipment and tools. I think because the list was quite long and something happened there and it fell off, so that's not all of them. They vary across the board. What we would say is there are in the Alpine Resorts Award certain specific ski related ones that are particularly relevant. There's a boot allowance and an equipment allowance that relates to people who may need to wear outer-wear boots or equipment may be required to get to where they work. So if you're in an alpine tourism business that's outdoors or is up the mountain and you need to ski there, that's where some of these allowances will be caught up, because unless the employee is providing that equipment you're going to have to get it yourself.
PN2713
What we might do, because obviously the hospitality one hasn't been exhaustively put, we might seek to file a revised version of this, and again I apologise but we were anticipating fling this a little bit later in the week, so perhaps we could do that with leave.
PN2714
That's everything but for wages, your Honours. So before we get to wages if I could take you to the other document we handed up. It appears to us, and I say this based only on our review of the award, that someone at some point has done a very forensic exercise of lining up the alpine resort levels to the levels in the Hospitality and Retail and Restaurant Awards, so in each level of the Hospitality Award there will be certain classifications. We've only extracted those that relate to our alpine tourism businesses so there are classifications to do with lifting, maintenance, et cetera that are exclusively the realm of the alpine lifting companies that we haven't extracted. But the ones insofar as they relate to our businesses are in the left column, and we say they line up quite neatly with the grades that are seen across the restaurant industry, so a bar assistant is a resort worker level 1. They would be the same as a general assistant to food and beverage attendants in food and beverage 1, or a general assistant, again, in the Restaurant Award, food and beverage 1. Same with the kitchen hand; lines up with kitchen hand grade 1. When you move down the resort worker grades you get equivalent levels. Once the supervision picks up they both have supervisory duties, et cetera. A point to note is that the retail classification in alpine doesn't kick in till level 2. So your first retail staff member is resort worker level 2 and that lines up with retail employee level 1.
PN2715
VICE PRESIDENT HATCHER: It doesn't. It's 50 cents an hour less.
PN2716
MR IZZO: Not the rate of pay; just the classification, your Honour. I will come to the rate of pay in a moment. So that's broadly the exercise that we'd conducted to show you where each of them line up across, and now I was going to take you to the rate of pay. The rate of pay is on the other document I gave you which is the third page. You will see that insofar as employees engaged as resort worker level 1 they are engaged on the same rate of pay as the Hospitality and Restaurant Industry Awards. I think these are sent out because the weekly rates have been divided by 38 and there's been a rounding issue, but it's the same rate, and we say that resort worker level 2 and so on and so forth line up with the base rates in the Hospitality and Restaurant Industry Awards, and so there should be no concern about a reduction in base rates of pay for those types of workers.
PN2717
Retail is a different matter. As I mentioned retail staff kick in at level 2, and there is a 50 cent difference between the retail worker level 2 and the retail entry level, level 1. Before I address that what I will show is that once you get to level 4 of resort worker level 4 you'll see the rate $21.28 by far exceeds retailer level 3 and so on and so forth. So it appears that the resort workers kick in at a rate of pay that's 50 cents less, but as they go up the scale it appears that it starts to exceed the retail rate of pay.
PN2718
The question the Commission can validly ask is, well, for a sales assistant that comes in at level 1 will they be on a lower base rate. The answer to that appears to be yes. I actually haven't been able to discern from the award modernisation process or any other document why it is that the Hospitality and Restaurant Industry Award classifications line up and the rates of pay line up very well, and the retail seems to be 50 cents under. What I would say about that is a couple of things: (1) our application and draft determination is not in respect of the entire retail industry. It's in respect of subset of the retail industry which relates to ski hire or ski sales. So if someone is engaging in general retail activities, whether that be something unrelated to ski rent or ski sales they wouldn't be caught, so the Commission should not be concerned that it is making a large scale deduction of the retail base rate. We're talking about a very specific subset.
PN2719
Those people working in ski hire or ski equipment shops are highly likely to be snow sports enthusiasts; they're selling ski gear; they're renting ski gear. We say when you take that into account, when you take into account the fact that for a large number of them there are other discretionary incentives being received. For instance it might be discounts to season passes; it might be subsidised accommodation which we heard a lot about; that there is a swings and round-a-bouts process that means that for that very narrow group of the Retail Award that is affected the loss of 50 cents an hour is either made up by the these other factors or is not as ‑ ‑ ‑
PN2720
VICE PRESIDENT HATCHER: So made up by what?
PN2721
MR IZZO: The other factors that I mentioned which are discretionary acknowledged, so either the provision of subsidised accommodation or discounts that are applied by way of discounted season passes because they will be skiing, or the other factor is simply that these people, who are working these are ski shops we are now talking about, they're definitely snow sports enthusiasts we would say. They're selling this very product that relates to skiing. They choose to be there very much because they want to be part of that environment, and so whilst the Commission would always have concern about have dropped to a base rate, those are factors that need to be taken into account.
PN2722
I acknowledge that subsidised accommodation is not part of the safety net. They don't have to provide it, but we heard from a number of the operators that that is effectively a mandatory requirement for them in a sense because if they don't do it and you're up on the mountain where are the employees going to live. They can't afford it.
PN2723
VICE PRESIDENT HATCHER: But what's the round-a-bout? Who says that - well, you're saying they'll get a better subsidy?
PN2724
MR IZZO: They'll get accommodation. That's right.
PN2725
VICE PRESIDENT HATCHER: No, they already get subsidised accommodation. Why would that change? What makes them better off?
PN2726
MR IZZO: In terms of the base rate they won't be better off, but the Retail Award which has the higher rate does not contemplate any people getting subsidised accommodation on discounted lift passes.
PN2727
VICE PRESIDENT HATCHER: But, that's what they get. I'm missing what's the benefit they get under those two headings if they transfer to the Alpine Resorts Award?
PN2728
MR IZZO: I'm not saying they'll get a benefit if they transfer, your Honour. That's not the position I'm putting. I acknowledge that if there is a reduction in the base rate there will be a negative impact in terms of the base rate of pay payable for that rate. I think it's 1 and 2. I also acknowledge that there's going to be a reduction in penalty rates payable. We're going to come to the impact in a moment. But what I'm saying is when we look at the retail rate and the fact that it is 50 cents higher than the rest of Australia, well, these employees are getting other benefits that the rest of Australia is not necessarily getting in relation to grade 1 base rates of pay. So if I'm a shop keeper in Queensland or a shop keeper elsewhere in the country much less likely I'm going to be getting those types of benefits.
PN2729
VICE PRESIDENT HATCHER: How would you know? I mean, if you work in the Uluru Resort no doubt you're getting subsidised accommodation.
PN2730
MR IZZO: That's possible in relation to other retail locations in remote areas, yes.
PN2731
VICE PRESIDENT HATCHER: Does section 154(3) have any application here?
PN2732
MR IZZO: Is that about work value?
PN2733
VICE PRESIDENT HATCHER: Yes.
PN2734
MR IZZO: Your Honour, in relation to that what we would say is that if you're going to make well, the first thing is there may well be a question mark whether it is actually varying any modern award minimum wages because ‑ ‑ ‑
PN2735
VICE PRESIDENT HATCHER: There might be but that would only be doing indirectly what you can't do directly.
PN2736
MR IZZO: I apologise, your Honour?
PN2737
VICE PRESIDENT HATCHER: If there's a distinction you would only be doing indirectly what you can't do directly.
PN2738
MR IZZO: I think that's right. So whether that is actually a statutory bar it may not be directly but I suppose if your question is does that go against the spirit of 164(3) or does that mean that we are in effect changing the rate of pay for a particular kind of work, well, it's going to end up in a bit of a circular situation. We say these people are doing the very same work that is being done by the very same type of employee five metres across the road. So when you talk about is it justified by work value reasons, well, the conditions that these people work in is actually and the exigencies they experience, the type of demand, when it arises, all of the things that relate to their work is more akin to what's happening at the alpine resorts than it is to a retail business outside Australia So if your question is well, is there a work value justification associated with the skills required, the conditions under which you work, well, if there is then it's supported sorry, I withdraw that.
PN2739
To the extent you're searching for that, well, the work value reasons are there because there's the very same conditions as people right next to them working the same snow, working with the same type of demand who are getting a different rate of pay, and so I'm not concerned that our application seeks to undermine what is sought to be achieved by 156(3). In essence it aligns these employees to the other employees in the alpine region doing the same thing. So that would be our response to that point.
PN2740
But I would say in respect of the retail staff, and I know I made this point, but this isn't a general application; just ski shops and just ski rental, and the same goes I think one of the unions has asked about hairdressers in the Hair and Beauty Award, well, they wouldn't be caught. Again, our retail operations don't go that far, and we say there's a logical reason for that. If you're a hairdresser you're not engaging a whole heap of casuals to cut everyone's hair who come down for the weekend. You're probably the local hairdresser servicing everyone who is there all year round; probably the same for the local medical centre; probably the same for some other retail businesses that are there year round. We're focusing on the ones that have the huge spike in engagement in July/August.
PN2741
So that's what I wanted to say about the hourly rate. Your Honour, having addressed those matters pertaining to each of the provisions, what we say is I've taken you to 13. The thirteenth is minimum wages, so they're broadly similar except for the Retail Award issue we've just discussed. So there's 12 differences. We say all of them align better; what's in the Alpine Resorts Award aligns better with the operations of the members we represent than what's in the other awards, and that's why we say the other awards aren't an appropriate safety net. They don't meet the modern award objective for our employees, and the Alpine Resorts Award does.
PN2742
The modern awards objective we've dealt with in our written submissions. I'm not going to go through each limb because it's in the submissions and if there's anything we need to raise in reply we can. There's only one thing that I'd like to raise because we didn't deal with this in writing, and that is about increasing workforce participation.
PN2743
COMMISSIONER RIORDAN: Before you do that.
PN2744
MR IZZO: Yes.
PN2745
COMMISSIONER RIORDAN: Back on your last point, if the Alpine Award had higher rates of pay and higher allowances do you think that your members would be here arguing that they should be covered by the Alpine Award?
PN2746
MR IZZO: Commissioner, I don't think they'd have an issue with the higher rates of pay if it was reflected in lower penalty rates for instance.
PN2747
COMMISSIONER RIORDAN: Or higher penalties. Let's just say the Alpine Award is the superior award to the Retail Award.
PN2748
MR IZZO: In all respects?
PN2749
COMMISSIONER RIORDAN: In all respects. Would you be here arguing on behalf of your members that they should be paying more; they should be covered by the Alpine Award?
PN2750
MR IZZO: I don't think I would be, Commissioner, is the answer to that question, but the reason for that is because then I think I would be saying that those conditions aren't necessarily appropriate to the operations conditions of those businesses.
PN2751
COMMISSIONER RIORDAN: Yes. So what you're basically putting to the Bench then is that because skiing is an attraction for a certain proportion of the population around the world, that because they get access to the ski fields on a regular basis over the scope of the ski season, they're rates of pay and conditions of employment should be discounted for that benefit?
PN2752
MR IZZO: I think with rates of pay it is only the Retail Award, and, as I say, I don't know why it has the 50 cents less but ‑ ‑ ‑
PN2753
COMMISSIONER RIORDAN: I'm not sure that's right, but I assume these classifications are based on the AQF standards that were around 15 years ago.
PN2754
MR IZZO: I assume they're all ‑ ‑ ‑
PN2755
COMMISSIONER RIORDAN: But I'm not sure that you can broad band them to that point, but anyway ‑ ‑ ‑
PN2756
MR IZZO: The ‑ ‑ ‑
PN2757
COMMISSIONER RIORDAN: ‑ ‑ ‑you'd have to go through a very detailed analysis of the classifications in each award to determine that.
PN2758
VICE PRESIDENT HATCHER: Why isn't your analysis about penalty rates equally applicable to people working in Bogong Alpine Village?
PN2759
MR IZZO: Because from our ‑ ‑ ‑
PN2760
VICE PRESIDENT HATCHER: Or Jindabyne for that matter?
PN2761
MR IZZO: ‑ ‑ ‑assessment, if I do Bogong Alpine Village first, it was included initially in the termination by one of the parties we represent. Upon further inspection we discovered, a bit like the Blue Mountains to be honest, it's a beautiful alpine area with some nice accommodation. There is a little bit of cross-country skiing. There is no downhill skiing which is the thrill seeking activity that a large part of the population ‑ ‑ ‑
PN2762
VICE PRESIDENT HATCHER: Is it close to another resort?
PN2763
MR IZZO: I think it's some 10 kilometres or something. Actually I can't say. It would be a distance to, I think it's, Falls Creek or Mount Buller. I don't know how many kilometres. It'd be less than 30, I think.
PN2764
VICE PRESIDENT HATCHER: That is like Jindabyne, it would be a feeder town to one of the resorts.
PN2765
MR IZZO: That's right.
PN2766
VICE PRESIDENT HATCHER: And like Jindabyne, no doubt there's a lot of people who work there for the ski season and who will travel up from the mountain to ski.
PN2767
MR IZZO: A lot but not as many, I think, and the reason for that is, particularly Bogong Village, it's an isolated area and, as I said, it has no downhill skiing, and there's no lifting there. It's like a Blue Mountains type retreat with trekking during the summer, and you can go cross country in the winter which you propel yourself. Far less ‑ ‑ ‑
PN2768
VICE PRESIDENT HATCHER: Or you could stay there and go to a resort to ski.
PN2769
MR IZZO: Yes. You'd have to travel to go to a resort to ski. You'd have to do that from Jindabyne as well. The difference with Jindabyne and any other feeder town is that they are in their own right towns which have schools, which have all sorts of facilities and there are a large proportion of people living there who live year round who may not necessarily be snow sports enthusiasts. When you get up-mountain your concentration of snow sports enthusiasts it becomes much, much higher, and that's when you get the different breed. You also get the different working environment, so that feeds back into the arguments bout fluctuating demand; the fact that things can shut down straight away; you're in the proper alpine area there, and the example I could give, if you recall when we caught the chair lift, there was one set of conditions, and you seemed to grimace there, Commissioner.
PN2770
COMMISSIONER RIORDAN: Yes, it's too vivid.
PN2771
MR IZZO: There was one set of conditions down the bottom, but as we got to the top it was very windy. That's what we saw that day. Some days it's just a complete white out. You can't see a thing. It's almost inhospitable and you can have very different conditions 400 hundred metres higher than 300 metres down below. Jindabyne is 20 30 kilometres down the road, so it's a very different type of area. It's an area that might get snow twice or three times a year like Canberra does. It's not the same kind of environment.
PN2772
The better question to ask might be about Dinner Plain. Dinner Plain was on the initial draft determination by the AHA; it was not on the draft determination by ABI and New South Wales Business Chambers. In order to present a streamline position the process went as consolidation occurred. We decided to keep Dinner Plain on the determination because there is alpine lifting there; there is the ability to ski there, and there was evidence of the fact that indeed we heard that where the weather is particularly bad in Hotham Dinner Plain does get some increased activity. We pressed that element of the determination for that reason, but it is somewhat distinguishable and if there's concerns about Dinner Plain I can understand them, and the Bench could have a look whether Dinner Plain belongs there. But all of the others are proper legitimate ski resorts that are servicing people there to ski and board.
PN2773
So if I can return to the modern awards objective the only thing we didn't address was increased workforce participation because we really have not run a case where we said there's no capacity to pay or you're going to increase lots of employment. Again that's what was run in penalty rates to a certain extent; the penalty rates decision. But I would say that as we've heard the evidence unfold there was evidence given that for a number of operators there may be a decision to re-invest in the business, increase employment on Sunday and that would go to increased workforce participation.
PN2774
VICE PRESIDENT HATCHER: I thought we had one person who said that. Who said that apart from ‑ ‑ ‑
PN2775
MR IZZO: Certainly we had someone today I think.
PN2776
VICE PRESIDENT HATCHER: The ski hire operator said that they might put more people on Sunday but whether that means additional employment or simply re-rostering so that there's more people on Sunday was less than clear.
PN2777
MR IZZO: Certainly. That's why we didn't I mean, our case theory has not been premised on that basis.
PN2778
VICE PRESIDENT HATCHER: I mean, I think a lot of the witnesses conceded quite frankly that they're saying it would simply go straight to their bottom line which I think is ‑ ‑ ‑
PN2779
MR IZZO: I'm not convinced ‑ ‑ ‑
PN2780
VICE PRESIDENT HATCHER: I think that's honest evidence.
PN2781
MR IZZO: I don't know if that was necessarily a fair assessment of the evidence, your Honour. I think there was certainly from a number of operators about re-investment in the business in some form or another, but I think there was an anticipation that some of it would go to the bottom line, yes. That would be the way I would characterise it.
PN2782
So in terms of the modern awards objective, rather than addressing the limbs of 134 I'd like to address the fact that the objective requires a fair and relevant safety net. We say the current safety net is not fair and it's not relevant. We say it's not fair because there is evidence that, for instance, Mr Girling admitted that Perisher is the biggest single entity providing food and beverage services at Perisher. He admitted it was, I think, even the biggest entity providing rental services, or that they do a lot of rental but he couldn't say it was 50 per cent of the rental market. We know Perisher is a key player in the accommodation space because it has a hotel there. We know Thredbo is a key player; they've got the Thredbo Alpine Hotel and their serviced apartments business. These alpine resorts are providing the same services but have a very different labour model that enables them to compete at a much better rate.
PN2783
Your Honour quite appropriately asked about, well, have you seen that reflected in pricing. I think it's difficult for these individual operators to comment on that, but it must naturally flow through. Labour costs is a huge element of the employer's business. It logically follows it's going to have an effect on pricing and profit margins.
PN2784
VICE PRESIDENT HATCHER: I mean, that's possible. The other possibility is that, without knowing what the internal balance sheet of these ski lifting organisations is, is that they use certain business units to provide business for the other business units, so that might be suitable to run a hotel at a marginal rate or even at a loss in order to have people on the slopes that will use the ski lifts.
PN2785
MR IZZO: That's possible. I think the evidence from the operators was, and not all but certainly a couple, that they're competing on price, and I don't think the evidence was, for instance, that the resort well, there's been no evidence that they're loss leading, for instance, and in fact I think the evidence of Mr Girling was that the price for the Perisher Valley Hotel might be higher than some other people because they've set it at a particular level. I think it's a competitive business operating in the same market and we've got limited evidence for me to comment without just making submissions from the Bar table, but ‑ ‑ ‑
PN2786
VICE PRESIDENT HATCHER: You're right, but there was repeated reference to cross-subsidisation between different aspects of these witnesses.
PN2787
MR IZZO: Yes. That's just the mechanism that the resorts have at their beck and call that they'd be silly not to use, I think, and there would be an element of loss leading in the cost subsidisation, but whether they're undercutting their hospitality, accommodation, et cetera to get people up the mountain, I don't think there's been evidence of that.
PN2788
So we say because of this competition the safety net is currently unfair, and also for all the reasons I mentioned when I went through the award it's also unfair because these conditions in the Alpine Award are better suited to the businesses we represent, but we say it's also ‑ ‑ ‑
PN2789
VICE PRESIDENT HATCHER: But if you're right it might be the question which safety net is unfair.
PN2790
MR IZZO: The Alpine Resorts Award or the other awards? We say the other awards are in respect of our businesses. It could be flipped the other way, and that's an option available to the Commission. It's not one we put forward, but there are multiple ways you can rectify the unfairness. I concede that.
PN2791
It's also not relevant, and we say, relevant to the primary consideration as well. The current awards don't speak to our businesses the way the Alpine Resorts Award does. Again, because of all of the factors I went through. Does it mean that there will be a reduction to take home pay? I can't answer that with certainty but I suspect it is inevitable that there may be a reduction in take home pay particularly for weekend work. Again, I'm relatively comfortable that the base rate shouldn't necessarily be a problem in hospitality or restaurant. In retail, yes, there is an issue, but I've tried to point to factors that should offset that concern. Certainly there will be a reduction in take home pay with respect to penalty rates for those businesses that applied be cut in full. My response to that would be twofold: firstly, that is not a matter that should necessarily deter this Bench from proceeding to apply the Alpine Resorts Award to these businesses.
PN2792
If I can take your Honours to paragraph 823 of the penalty rates decision because this is a matter that the penalty rates Full Bench grappled with, and they essentially found at paragraph 823 so 823 is part of a section of the decision dealing with the Hospitality Award. The decision went on to deal with each of the awards that are under consideration. The Bench said:
PN2793
The needs of the low paid is a consideration which weighs against a reduction in Sunday penalty rates.
PN2794
That would be an equivalent statement to make with respect to these proceedings, however so would the next sentence:
PN2795
But it needs to be borne in mind the primary purpose of such penalty rates is to compensate employees for the disutility associated with working on Sundays rather than to address the needs of the low paid.
PN2796
They go on to talk about the fact that the needs of the low paid is best addressed by setting an adjustment of the modern award minimum wages. That paragraph is repeated in this judgment in respect of each of the awards under consideration and to have their rates cut, and that paragraph is equally applicable to these proceedings.
PN2797
So that's the first thing I would say about the reduction to take home pay.
PN2798
VICE PRESIDENT HATCHER: I mean, one way to resolve that is that we could put your members into the award but with a proviso that employers covered by the award who are not operating ski lifts shall continue to pay the old penalty rates.
PN2799
MR IZZO: Employees covered by the award who are not operating ski lifts.
PN2800
VICE PRESIDENT HATCHER: Yes, that is your people, will continue to pay the penalty rates.
PN2801
MR IZZO: But, again, that would address some of the issues certainly. The issue with penalty rates is I think the evidence that we've tried to adduce is there is no disutility working on weekends, so why do we have penalty rates for these workers?
PN2802
VICE PRESIDENT HATCHER: Again, that explains the fact this has really become a penalty rates case.
PN2803
MR IZZO: I think penalty rates is one of the key distinctions, your Honour. I don't think it's just about it, but I agree it's one of the key distinctions. But I don't think our clients should be ashamed or hiding from that fact. Penalty rates are there to compensate for social disability on working on the weekends. We just say it's not present here, so that's why we say whilst it is a potential reduction in take home pay, it is one that is still justified by the modern awards objective.
PN2804
VICE PRESIDENT HATCHER: But, you see it might then lead to a broader consideration of you were put in to the one award what is the correct level of penalty rates for this category of workers; that is, you've approached it from the perspective of your members vis-ą-vis Mr Harmer's clients, but what we haven't had in the proceeding is a blanket review of what should be the appropriate regime of penalty rates for this one category of workers. You just ‑ ‑ ‑
PN2805
MR IZZO: When you say one category you mean all the employees ‑ ‑ ‑
PN2806
VICE PRESIDENT HATCHER: If you're treating them as one category you've basically said, we want what they've got. What we haven't got is a blank sheet of paper which says, well, if we're going to put them together as one what is an appropriate regime of penalty rates.
PN2807
MR IZZO: I think two things should be said about that, your Honour: firstly, we've actually tried to put on as much evidence as we can about the fact that the disutility really isn't there which justifies the existing penalty rate regime, and so we would say you do have a fair bit of evidence in front of you about that matter.
PN2808
VICE PRESIDENT HATCHER: I mean, you can make an application in the existing award to do that without having to be put in this award.
PN2809
MR IZZO: We could, but then that brings into fact there are other factors that make that award more unique. I mean, including the fact that the very genesis of this claim started with a lot of people who thought they were covered by the Alpine Resorts Award. There's people who just seem to have a natural understanding that this is where they belong, and so it seems simpler and consistent with a stable safety net to have them in this award. But the second thing I'd say in relation to your comment is, your Honour, whilst we don't think that what you've just raised is necessary or appropriate given the evidence that we have filed. That's genuinely the Commission's concern. Because the SDA, for instance, all of the questions that the SDA have asked during the cross-examination, it hasn't gone to whether penalty rates are appropriate for our clients. It's tried to attack the penalty rates in the award as a whole, and the reality that the desire to work on weekends at the resort is the exact same desire that our clients' members have in terms of their employees, so we haven't convinced you then that's a measure that's open to you. But to just say that, well, no, you don't belong in here because this is a grab for lower penalty rates or, no, you should stay over there because we don't want there to be a reduction in penalty rates, it does seem to disregard the rationale that sits behind the penalty rates decision. So it's a course that's available although one we say is not necessarily required because of the evidence that we have put, and I suppose the other issue is that the penalty rates were considered in 2010, the AIRC made this award in 2010, and presumably turned its mind to it.
PN2810
VICE PRESIDENT HATCHER: That's consistent with the tenor of your earlier submissions, but anyway.
PN2811
MR IZZO: Yes. The only thing I'd say, your Honour, it is a significant decision to not put the penalty rates in the award, so they must have been conscious of that decision, and made it for some reason, but it's not disclosed in the statements, that's for sure; the AIRC statements.
PN2812
That's what I wanted to say about the modern awards objective. There's ‑ ‑ ‑
PN2813
VICE PRESIDENT HATCHER: How much longer do you think you'll be, Mr Izzo?
PN2814
MR IZZO: Ten minutes maximum.
PN2815
VICE PRESIDENT HATCHER: Might let you finish then we'll take a short break before we proceed with Mr Harmer's submissions.
PN2816
MR IZZO: Yes, okay. Thank you, your Honour. Very quickly, there's been a reference in these proceedings to the fact that the alpine resorts businesses get decimated at times and whilst our businesses go gang busters. I hope we've demonstrated that's not the case. To the extent that there's decimation the evidence of Mr Girling was that Perisher has always remained profitable, so I think it's just trade and demand for labour plummets at times, but at times it's equally for them as it does for us. I think decimated is probably not the appropriate term to use because it evinces notions of incredible losses for the resorts which is not what the evidence of Mr Girling was.
PN2817
There's then talk of fear of spread or creep down the mountain. I've tried to explain why in the draft determination all of the people that are covered we say squarely about ski resorts; it's places where there is downhill skiing and snow sports enthusiasts. I've talked about Dinner Plain, and that there's a reason why it's a little bit different, but other than Dinner Plain they're legitimate ski resorts with downhill skiers.
PN2818
There is, as Mr Scott mentioned earlier, these resorts there is a very tiny cluster of businesses, which you saw on the inspection. That's who is being covered. There's no ambiguity about who else might fall in. Once we worked out that due to the very breadth of Perisher mountain there was a far off mountain kiosk that didn't fit into the two carrier radius.
PN2819
In relation to retail business elsewhere selling ski equipment, rental hire, I think Mr Scott answered that. I just also want to point out, if you're a retail business in the city you're much more likely to be selling equipment; whether it's for overseas; whether it's for people who are Australian skiers that are buying jackets, skis, boots, those kind of things, you purchase for Christmas, they would have the same Christmas pattern of trade. You purchase for birthdays and you purchase for the ski season. They may well have an increase in the middle of the year at winder, but they would also have one approaching the northern hemisphere winter and Christmas as I said. You get down to the resorts, the foot traffic is not there. It's just not there in summer and also their rental would be much higher, so a lot of people are still renting down at the resort. The rental proportion of the businesses would likely be less as you move away from the resorts.
PN2820
There was the question from Riordan C in relation to the fact that none of these businesses said they were marginal. That's correct. We have said from the start this isn't a case about capacity to pay. It's a case about those other terms and conditions which include penalty rates. That's what we're talking about. Matching the terms and conditions of employment that apply to these employees that are better suited to them. If there is a concern about take home pay you do have other ways of addressing it, and your Honour Hatcher V has raised one. There is of course another one which is transitional arrangements. That is something that's been used by the Commission regularly. The seasonality of the business lends itself to transitional arrangements. There's all sorts of things that could be looked at; employees employed after a certain date could be subject to a particular transitional arrangement. Some changes could be phased in over time. There's a whole heap of transitional arrangements that could look to mitigate the impact in terms of take home pay lost over a period of time, and we would be supportive of that if that's what the Commission considers is necessary to address the needs of the low paid.
PN2821
COMMISSIONER RIORDAN: Mr Izzo, has there been any analysis undertaken by any of your members in relation to your application that, if successful, it may result in a reduction of, say, $200 a week in gross terms to an employee who may work a 10 hour shift on a Sunday, what that might do in relation to the capacity to attract labour to the industry?
PN2822
MR IZZO: I don't think that analysis has been conducted. What I do think certainly I'm just trying to think the extent to which was in the operator evidence. Certainly from some discussions is that there is an acceptance that there will be a rate of pay that needs to be paid all up to sufficiently attract people, and so I don't think and we saw this in the penalty rates case as well, I don't think just because there's a cut that means the cut is applied wholeheartedly. A lot of businesses may still, because of market forces, need to pay a rate of some kind to bolster the take home pay of workers, but will it be less than what's currently being paid? It's possible. I don't suspect we'll see the rates all just cut straight away to the award minimum overnight. That wasn't the experience with penalty rates, and I don't think it will be the experience here.
PN2823
Are there any other questions that we can assist the Commission with?
PN2824
VICE PRESIDENT HATCHER: No.
PN2825
MR IZZO: I think that it was not two hours, but, thank you for indulging us.
PN2826
VICE PRESIDENT HATCHER: How long will your submissions be, Mr Harmer?
PN2827
MR HARMER: Your Honour, I think now erring towards an hour-and-a-half just because there's been a number of additional issues covered that I wasn't perhaps anticipating, but, yes, I would have thought an hour-and-a-half. I could be still the hour if ‑ ‑ ‑
PN2828
VICE PRESIDENT HATCHER: We might take a 10 minute break and then we'll resume and see how we go.
PN2829
MR HARMER: Thank you.
SHORT ADJOURNMENT [3.54 PM]
RESUMED [4.15 PM]
PN2830
VICE PRESIDENT HATCHER: Mr Harmer, I think we'll hear your submissions to completion this evening, and then, unless you come in at 10 minutes or something, we'll adjourn and complete the matter at not before 9.30 in the morning.
PN2831
MR HARMER: Thank you, your Honour, and apologies in advance, I probably won't deliver on the 10 minutes prospect, but I'll ‑ ‑ ‑
PN2832
VICE PRESIDENT HATCHER: All right. Fifteen is okay.
PN2833
MR HARMER: Appreciate, again, the indulgence, but I will be as concise as I can. When we opened earlier this week, Members of the Commission, I pointed out that there were only three issues before the tribunal; two expanding coverage and others dealing with conditions, and there was nothing adverse which could detract from or impact the employers subject to this award.
PN2834
As we stand here today with the draft determination, and this is only issues of drafting and tidying up, but we've lost two resorts from the award; we've had seven resorts lose part of their operations; we've had an entire category of employee go award free it seems, and I know you can't do that, but that's what the determination reports, and as I say, all of that can be tidied up but this is the third iteration this week of what is meant to be happening with coverage expansion.
PN2835
VICE PRESIDENT HATCHER: So who are the employees going award free?
PN2836
MR HARMER: I'll come back to it, your Honour, but it's essentially the ski tube drivers who are train drivers, and they operate out of Bullocks Flat which is outside the now imposed geographic scope along with a whole range of other employees on Perisher who work down there. Look, I'll come back to that and, look, I don't seek to make light of it in the sense of it can all be tidied up, but I merely go to it to reinforce that this award is a privilege. It was granted on strict conditions, and I only go to the mess that's been made with the drafting today to underline the care that is needed in dealing with coverage of this award because we desperately need it, and we've had it for 30 years, in effect, in terms of continuity of coverage just amongst ski lift operators. It has a long and complex history and that substantive reality has to be dealt with very carefully. We already had one union calling for its abolition or the insertion of penalty rates, and we've had questions along that line already. The flow on implications of what's being suggested are enormous, and why do we oppose what's happening; because we don't want volatility threatening something that is vital to our very existence.
PN2837
So that's the essence of why we're opposed to the application. In terms of the coverage of the award it's our respectful submission that coverage of the award is very clear. It's clearly spelled out in the scoping definition in the award as being restricted to ski lift operators, and that was the industry of employer, which pursuant to the ministerial request, was put in place by a seven Member Full Bench. That is its primary purpose; to regulate the industry of employers of ski lift operators, and that industry has a number of unique characteristics which I'll pass through very briefly in the course of my submissions relating to classifications of work that are otherwise potentially award free. Those classifications represent the bulk of our employees. We have major investment, yes, in ski lift operation and that is the major source of our revenue, and the flexibility, the transferability, all of the benefits that we have are built around the exigencies that that specific industry of employer faces, and there are a number of tailored features of the award that have been in place since around 1989.
PN2838
If I go back to the historical forebears of the current award, and when one comes to what the Full Bench actually did in 2009 it was not some vague reference to seasonal conditions and issues were just out there in the ether; everything was based on that specific history, the specific preceding awards, all of which were restricted to these ski lift operators only, and an exposure draft which continued that history, and the totality of what is said was referenced to those ski lift operators and those historical awards. How one gets the concept that what the Bench was saying was that it was generally this issue of seasonality and the other, I guess, criteria in that are purported to be derived by the applicants, particularly in their submissions at 8.5 to 8.7 of their April 2017 submissions. It really involves a superficial gloss, to be honest on what was stated by the Full Bench.
PN2839
So what I may do just very briefly is go to what was said exactly by the Full Bench and that will throw light on the hospitality comparison issue that is observed and said to not have any discernible basis, if you like. If I can go to Mr Girling's statement and annexure Y to it you will find the first relevant statement that is quoted from by the applicants. So that's the statement by the seven Member Bench of 22 May 2009, and if you ‑ ‑ ‑
PN2840
VICE PRESIDENT HATCHER: Which annexure is it?
PN2841
MR HARMER: Sorry?
PN2842
VICE PRESIDENT HATCHER: Which annexure?
PN2843
MR HARMER: It's annexure Y to the statement of Gavin Girling, and it's just page 32 commencing at paragraph 219, and it's very short; it just goes down to 222, so it's only about half a page. If I can just put in context those Members of the tribunal deliberating, by this time there have been a large number of consultations or conferences across the various parties and interested entities conducted by the tribunal. There is an exposure draft of the award which is limited to just the ski lift operators and it's talking about the draft Alpine Resorts Award 2010, that is, the ski lift operators and that industry of employer is what is being talked about properly in context. So where it says seasonal snow sports industry that's what it's talking about.
PN2844
It goes on to make a number of observations and at the end of that 219:
PN2845
It has been necessary to take into account the various pre-reform awards and NAPSAs. They have been mainly in Victoria and New South Wales applicable to the industry.
PN2846
So there was a set of New South Wales awards just for this industry just for ski lift operators; one in Victoria of pertinence, and it was transitioning those that were at issue.
PN2847
At 221:
PN2848
It has been necessary to establish a number of accommodations between the conditions in the two States.
PN2849
New South Wales and Victoria, and down at 222:
PN2850
We have also decided not to make any special provision in relation to the alpine resorts management board -
PN2851
So the very issue that's on tomorrow was determined by the seven Member Bench back then
PN2852
and we have provisionally decided to include employees who perform hospitality and child care duties.
PN2853
So that was the context there and again all in relation to an exposure draft limited to these specific employers and the history, and a long history it was, that was all before the Bench, and included of course past demarcation of unions and awards away from this particular industry.
PN2854
VICE PRESIDENT HATCHER: But what is the snow sports industry?
PN2855
MR HARMER: In context here, to be honest, your Honour, I'm not sure what the Bench is referring to there, but if they're saying it's the scope of this award then it's the industry of employer of the ski lift operators in context.
PN2856
VICE PRESIDENT HATCHER: If you look at the first sentence of 219 it says:
PN2857
The snow sports industry in particular although it will also have application of alpine resorts that operate over the summer season.
PN2858
MR HARMER: Yes, and ‑ ‑ ‑
PN2859
VICE PRESIDENT HATCHER: It suggests they're two different things.
PN2860
MR HARMER: Yes, and, look, in terms of the phraseology perhaps interesting but in essence it covered these ski lift operators some of whom, and it's only a very limited number at this time, operated in the summer. So in New South Wales I think that was Thredbo only, and in Victoria at the time, I think that was just Falls Creek. So it did cover all round operations and even the operators were closed for business there was summer work in the nature of what's called re-vegetation crews who work on the slopes and ensure that there's enough vegetation to hold the snow and do other things, and so there's always been permanent employees in summer work, but it was just in relation to these ski lift operators.
PN2861
So ‑ ‑ ‑
PN2862
DEPUTY PRESIDENT DEAN: I imagine a lot of the maintenance work on the lifts would all be conducted during the summer months as well.
PN2863
MR HARMER: Absolutely. The maintenance crews also work year round. There's a ramping up to a certain extent, and there are a number of year round responsibilities certainly. So that's what the context was, and as I say the detailed history, the transcripts, the decisions that underpin the creation of the New South Wales awards were all before the Bench and were discussed in the conferences and et cetera.
PN2864
So against that background if I can just go to then the second decision that's been referred to, and I will go to some of the earlier history if you'll permit me, but the second decision is at AA of that same statement, so it's just a few tabs on, and this is the seven Member Bench in a statement of 4 September 2009, and again it's less than half a page that's allocated, and so I appreciate it is difficult to discern and that's why the context of what is happening is so important that everything; the exposure draft, the history, the prior awards, the material is all going to just the ski lift operators in terms of the scope.
PN2865
So at 263 the Bench points out:
PN2866
We have made a number of alterations to the exposure draft.
PN2867
And the exposure draft scope at that time was just for ski lift operators.
PN2868
These provisions represent an amalgam of the disparate conditions found in the pre-reform awards or NAPSAs which apply to the alpine resorts industry -
PN2869
The NAPSAs were of course only New South Wales based awards. They certainly referred to the seasonal nature of the operations but this is all in the context of just the ski lift operators:
PN2870
covered by the award has been into taken in relation to the types of employment -
PN2871
So the types of employment are just the classifications dealt with by the ski lift operators
PN2872
permitted and the conditions which apply to them including the pay arrangements.
PN2873
They note that it accommodates the summer as well as the winter. They've made a number of alterations but they haven't altered standard provisions.
PN2874
There's then an adjustment process referred to at 264:
PN2875
The minimum wages applying at various levels have been altered in some respects so as to better align with other relevant awards particularly those applying in the hospitality industry.
PN2876
So there's the process that was undertaken by the Full Bench. They chose the Hospitality Award as alignment because they were challenged with an award that had even lower rates comparatively to what there is now. That was the history and there was this attempt to deal with just the awards that applied to these ski lift operators.
PN2877
VICE PRESIDENT HATCHER: The award referred to in para 265 what did that cover? That's a Federal award obviously, is it?
PN2878
MR HARMER: Yes. That's the award applicable in Victoria, yes.
PN2879
VICE PRESIDENT HATCHER: Victoria.
PN2880
MR HARMER: So there was an AWU award, Federal, because of what had happened with obviously Victorian regime going Federal by that time, but it was essentially a Federal award that applied just to the ski lift operators with the AWU, and then there were some three awards in New South Wales; an industry award, just AWU based, and the same ski lift operators, one specifically for ski instructors and one for the ski tube where there had been a history with the RTBU, et cetera. So they were the pre-existing awards. All except for the ski tube were applicable to all of the ski lift operators. Obviously the ski tube is specific to Perisher. But there was no greater scope contemplated or dealt with and all the history related to just the ski lift operators.
PN2881
So there was an alignment with the hospitality classifications. There were some other minor changes made to rates as part of the process, and obviously it was a considered process in circumstances where the making of the award was challenged by a significant number of unions and for good reason. It's a most unusual it's a unique award, and so to try and derive from that general notions as reflected in the submissions at 8.5 to 8.7, particularly the notion that somehow there was a reference to a wide range of occupational groupings extant from this very specific small number of employers, and the very specific classifications covered is just totally inappropriate and inaccurate, and even the other issues that are identified were identified solely in context of this history, and solely in context of these ski lift operators, and it is appropriate that it is bottled up and tight, because, as I say, this award is a privilege but it's granted for a specific reason, and part of the conditions is a very tight scope, and ‑ ‑ ‑
PN2882
VICE PRESIDENT HATCHER: So what do you mean it's granted as a privilege? What does that mean?
PN2883
MR HARMER: It's a phrase, your Honour, based on the history that there was a long history whereby the conditions, and they do go back 30 years, were granted by tribunals in Victoria predominantly in New South Wales around 1989 and then continued in the ski instructor State award in New South Wales. Based upon specific contingencies faced by these employers, and when I say a privilege it is extremely distinct from what applies, not only in most modern awards, but what applied in most pre-award modernisation awards, and so it was a very discrete set of terms and conditions granted in context, and I'll come to some of the history and I'll make it more apparent, but just to summarise perhaps when the AWU was attempting to have an award made in 1989 a large number of unions, and I'll take the tribunal to the transcript shortly, did challenge because this award, in its ancillary aspects, cut across a large number of other awards, and it did so with terms and conditions that were an anathema to many of those used, and the AWU only got away with exclusive coverage and with the terms and conditions embodied in the award through a number of arrangements with other unions, and a number of exemptions in respect of the coverage of other awards that granted an island, but it was all based on a very narrow island, that being only the ski lift operators in New South Wales.
PN2884
So that's the specific history, and that's the 30 year history that is now under challenge here, and to be honest I would not be surprised at all if some unions did not turn around if this application was granted and say, well, that's not the basis on which we vacated this view. We want to re-enter the fray, as United Voice indeed has now done in relation to just this application, they put in a submission saying, either abolish it or introduce penalty rates into it. The very application here has introduced volatility into that 30 year history, and that is something that of course we're very concerned about because we say in that history we had genuinely justified this very refined set of terms and conditions that are so different than anything else in the country and we ‑ ‑ ‑
PN2885
VICE PRESIDENT HATCHER: When you say they're so different now, we've parked the seasonal loading, what's mainly different about it is there's no penalty rates. There's not that much else different about it, is there?
PN2886
MR HARMER: Minimum two hours start is different. Zero minimum ‑ ‑ ‑
PN2887
VICE PRESIDENT HATCHER: What's that different to?
PN2888
MR HARMER: As I understand it the more standard provision for casual minimum start would be, or minimum starts generally, would be four hours.
PN2889
VICE PRESIDENT HATCHER: That's not correct.
PN2890
MR HARMER: Certainly it's not two across the whole of industry is my understanding. Perhaps I'm not expressing that as accurately as I should. In the case of one classification no minimum start at all. So certainly we say that there are a number of aspects of it that are different, and, yes, penalty rates is a major one, and 5 and 7 has been an aspect of industry for some 30 years.
PN2891
So that's what we're concerned about being disrupted, and what we say is that the need that justified the award back in 1989, the first New South Wales award is becoming greater with the direction of climate change, and I won't go into it in great detail, but it's in the evidence, but it's not as though the conditions are going to get any easier for these ski lift operators. The investment is massive. Just to operate the lifts now, as you've heard in the evidence, there's a need to heavily invest in snow making and snow that used to fall from the sky for free is now being subsidised in effect with snow making, we've heard, for the first two months, the last three years, and if you go on the figures that my friend, Mr Scott, was referring to earlier, you've got a very short ski season as it is. You've got the two shoulder months of June and September where a very small percentage of revenue is made, massive revenue in July and August. If you have a bad July you're a long way into a poor season unless you heavily subsidise with snow making. Mr Girling referred to a handful of days where perhaps the ski lifts have to be closed, or significantly curtailed. Outside of the two shoulder months you've only got eight weeks, so you lose five days you're down a significant portion of your revenue.
PN2892
So we say that the need for this award remains, and indeed is, increasing and that this particular challenge with its looseness, with its potential for flow on, is inappropriate and should be declined. The coverage applicants don't coincide in any way, shape or form with the industry of employer, the substantive character of it, that is traced back through that history and certainly not through either of those decisions in 2009 if you go to that specific context.
PN2893
So against that background, however, we just want to make it clear, and I think it probably was through the cross-examination, we are not opposed to these category of employers thriving, indeed they're a very important part of the resorts. We acknowledge they're a part of perhaps some wider concept of regional tourism connected with snow, but there's many players in that wider category, and that's part of the danger. But in relation to the specific category of employers, the subject of this application, there is a level of synergy, a symbiotic relationship, if you like. Whilst you've heard evidence that the resorts differ a great deal including the extent of their business operations and the extent of businesses around them, there's no doubt that part of the overall product that they can offer is enhanced by these accommodation and food and beverage and ski hire outlets, and the resorts are pleased that they attach to what the resorts do and can make a profit and flourish from it, and as per the cross-examination particularly this morning there is a community of interest. It is the fact that the more that the ski lift operators can attract custom away from New Zealand skiing or away from the beaches in Australia and have people rather than perhaps heading up to Queensland come to the snow fields that benefits, and so the major investment that is made by the ski lift operators in the quality of snow, in grooming the snow making, the promotion, the events benefits everyone in the community immediately around the resorts.
PN2894
It's true that you go away from that level of community interest and you will find a level of competition if you like. The resorts don't see these employers as being their competitors but we can understand the perception that the resorts are a competitor of theirs solely in relation to ancillary aspects of the business. The core and the vast substantial or majority of the workforce that we deal with, the investment, the revenue is based around the ski lift operation. We then have ancillary business, yes, in accommodation, food and beverage, ski hire, retail, and these employers coincide with only ancillary aspects of our business. If you can go through the cross-examination of Mr Girling around food and beverage adding up all the employees that came up there was a range between something like 107 and 130 out of a total workforce of 1300. So it's 10 per cent or less with the vast bulk of the employees of course being connected with the ski lifting, snow making, ski instructing, snow grooming, et cetera.
PN2895
So we say that there's a synergy to the extent that there is a perception of competition and we can understand that from the perspective of the employers that have come forward and we don't deny that, but we don't see them in any way as our competitors. We're competing - certainly amongst the resorts we compete for custom but we're competing with other reasons for custom. We want these people to enhance our product and flourish, and they're obviously a large number of them that are doing so by attaching to our product and our efforts and that's the nature of the relationship.
PN2896
I'll come to how that then fits in to this application shortly. The fourth point I wanted to make, and I've already touched on it, is that there is a delicate bubble of coverage here with a history, and as I say, that does go back to particularly the creation of the first ski industry State award in New South Wales in 1989, and we've included the decision and some of the transcript around what occurred in the materials, and I might just move to analyse just some of that which appears again as an annexure to Gaven Girling's statement, and I will be brief because there is a considerable history, but if I can just give one example of what I was talking about before in terms of the background the refined scope of the award. If you go to annexure P you'll see there the transcript before Watson J of then the Industrial Commission of New South Wales of 8 May 1989, and you will see there that I think there's some seven unions involved in the proceedings. There's a number of employer groups. Sad reflection of my age, I think I'm appearing there with some other customers you'll probably recognise, but the point of the matter is Mr Docking of counsel, who is appearing for the AWU at that time ‑ ‑ ‑
PN2897
VICE PRESIDENT HATCHER: He wasn't of counsel then.
PN2898
MR HARMER: Not at that time. Okay, thank you for clarifying that. Mr Docking, soon to become a counsel perhaps, said that:
PN2899
The purpose
PN2900
And this is at the bottom of page 1
PN2901
was to facilitate the AWU becoming the industry union for the ski industry.
PN2902
Again, what was being referred to was the seeking of an award limited to, if you go up the list of those appearing, to my own name you'll see at that time I was appearing only for Kosciuszko Thredbo Pty Ltd. Below that Mr Graham for Blue Cow, which was, at that time a separate resort separately owned, Mr McArdle for Perisher Smiggins and the owners of it, and Guthega and Selwyn.
PN2903
VICE PRESIDENT HATCHER: Ms Bishop.
PN2904
MR HARMER: Then you've got employer groups and various unions. What basically happened was that there were objections raised of course to the fact that this new award would cut across a range of other awards, and we've set out all the exemptions that were granted. There were a large number of exemptions listed in the affidavit.
PN2905
But just to take one example, the last document in that tab annexed to the transcript, exhibit A, is corresponded from the Federated Miscellaneous Workers Union, which I would understand to be now part of United Voice, which is of course fighting the submission saying abolish this award, the current award, confirming the reaching of an agreement with the AWU following discussions as a pre-condition to withdrawing its objection to what was happening before Watson J in relation to the ski industry, and again it's premised on an understanding reached in relation to categories of work and engagement just with the ski lift operators that I've referred to that were appearing at the time. Although it's not attached, they're not attached here, there were arrangements reached with a number of other union and, as we have set out in the evidence, exemptions granted to many awards and coverage changes between unions to facilitate the unique scope and the eventual unique terms and conditions.
PN2906
So what we are apprehensive of is that against the background of that history, the expansion of scope into a number of categories covered at present by other modern awards and by other unions could understandably see those unions saying, "Well, look, if that's going to now be the approach, we want to revise our position. We feel our members are being compromised now beyond what was dealt with in 2009, what was dealt with previously in the history", and as has United Voice, to take that example. They have already put in a written submission which is in the materials before the tribunal in recent times saying: "Either introduce penalty rates into this award or abolish it."
PN2907
So obviously that is a major concern and we say it's reflective of the fact that volatility has been introduced into the background of that stable history. That is our major problem and it's already eventuated in the form of United Voice's submission and, indeed, some of the questions today venture into that issue.
PN2908
So we do say that this award is, one, created on strict conditions historically of tight coverage and that the expansion could - and it is our genuine apprehension and we acknowledge it's only an apprehension but it's already found fruit in reality of United Voice's submission. The SDA has been very consistent. They opposed us in 1989. They opposed us in 2009. They're opposing the spread of the award now. If it does spread, I would expect the SDA to have real concerns with the ongoing nature of this award and to perhaps bring its own application to deal with it in some way, shape or form.
PN2909
Another example would be you will have seen in the consent arrangement reached with the AWU, the number 1 item was that the AWU would take forward to the ACTU an application to have this award taken out of the Full Bench proceedings dealing with the ACTU application, as I understand it, in relation to, amongst other things, a four-hour minimum start. But, again, that understanding with the AWU, and I was present during discussions with the ACTU in relation to this, it was based on just the ski lift operators. It was a very narrow front and, again, recognition, together with the AWU, of the very narrow history.
PN2910
Now, again, if the award starts to expand inappropriately, and we do say as a matter of merit it is inappropriate, then one would expect that the award could come under threat. So there were other unions that opposed us historically, including in 2009 and, again, one would not blame them for turning around saying: "Well, things have changed. We want another bite at the cherry in relation to this award." So it's a very real apprehension that we have in relation to losing our privileged position in relation to coverage by this award and its exclusive scope. Point 6 I would make is that - - -
PN2911
VICE PRESIDENT HATCHER: Mr Hamer, so where is the coverage clause for the New South Wales Ski Industry Award? Is that attached to the statement?
PN2912
MR HARMER: It is in there. We will just get the reference for you. I'm just being told it's Q and my memory is that it was a respondency based award that named the specific operators. Sorry, it looks like it's not that one. Just give me a moment, sorry. I'll just find that for your Honour. I apologise.
PN2913
DEPUTY PRESIDENT DEAN: Is that the one at Q? Is that the document at Q, tab Q?
PN2914
MR HARMER: That's just the ski instructors state, that one, which was one just for ski instructors introduced a couple of years later.
PN2915
VICE PRESIDENT HATCHER: It's K.
PN2916
MR HARMER: Thank you. So, yes, the first award was the one at K.
PN2917
VICE PRESIDENT HATCHER: Page 25.
PN2918
MR HARMER: Yes. So item 1, definitions, placitum 3, "Employer", and it lists just the operators, the ski lift operators at that point in time and it looks like it's at that point in time only four employers and - - -
PN2919
VICE PRESIDENT HATCHER: What clause is that?
PN2920
MR HARMER: So it's in the definitions, the meaning of employer, at placitum 3, is defined and it lists only four employers.
PN2921
VICE PRESIDENT HATCHER: I see, yes.
PN2922
MR HARMER: So, again, a very refined and narrow scope in relation to an award which at those times also included any five and seven, so no penalty rates, that sort of thing. The Ski Instructors State Award was again quite unusual. It had a range depending upon the classification level of guaranteed engagement for a certain number of weeks moving out. Again, most unusual, recognising the unusual aspect of the ski instructors' work and, of course, those awards were merged together with the Victorian Award as part of the process in 2009.
PN2923
VICE PRESIDENT HATCHER: So when did the seasonal employment clause emerge?
PN2924
MR HARMER: Seasonal employment, I think was always part of the New South Wales awards and I think that's where the 8.33 per cent came from, from memory. As was pointed out by the Full Bench, the 2010 award was an amalgam and a compromise between conditions in the two awards. The team are just looking at that question for your Honour. I'm told there's a reference to seasonal employment in the Victorian award. We're just having a look for the New South Wales award and perhaps I can come back to your Honour on that if that is convenient. My recollection is that in the initial award there was a category of daily employee - - -
PN2925
DEPUTY PRESIDENT DEAN: It's in the Ski Instructors State Award at Q, tab Q at 11.3.
PN2926
VICE PRESIDENT HATCHER: Yes, I see. So definitions (ii), so it's distinct from casual employee.
PN2927
MR HARMER: Yes, and that notion of daily employee was the forerunner, as I understand it, to the seasonal employees and it did incorporate, from memory, annual leave entitlement within the rate. We might just be a bit more specific on that, but if the tribunal pleases, I can come back to that. I apologise I have not been as thorough as perhaps I could in responding. So the gist is that a very confined coverage historically. Certainly, in our submission, an unusual set of terms and conditions compared to at least the mainstream standards in industry and something we seek to protect.
PN2928
The next point I would make is in terms of the current application, we don't say that other than for some of the areas that have merged in the latest draft determination that there is any statutory inhibition as such to what is being sought, but we certainly do say that there would be a requirement for cogent reasons to depart from any of the Full Bench decisions in this tribunal making its evaluative judgment by reference to the section 134 criteria and all the relevant circumstances in terms of assessing this particular application.
PN2929
We say cogent reasons are needed, that being the specification, as we understand it, from the Full Bench dealing with preliminary jurisdictional issues which is in the materials put forward by the applicants and, in particular, there's a reference to it at paragraph 27 where it talks about the approach in the reviews and the importance of prior decisions and the need to take them into account and previous Full Bench decisions should generally be followed in the absence of cogent reasons for not doing so.
PN2930
What we say in relation to that issue is that, as I will come to, there was certainly a cognizance by the Full Bench in creating the Alpine Resorts Award that it had this very limited scope and that there are going to be employees working side by side, as was pointed out by the SDA, who would be on different terms and conditions and, indeed, superior ones. There is obviously an impact on a number of other Federal awards here and it's an extremely material impact, particularly in the context of the penalty rates decision. If more employers are drawn into what was previously a very narrow scope, and we're talking about potentially hundreds of employers through, we would say, a very loose criterion. Certainly, the penalty rates decision, the decision in relation to the creation of the other modern awards impacted, we all say warrants a notion of cogent reasons.
PN2931
In relation to the next, briefly, the statutory requirements, I have mentioned section 134, certainly, one we want to focus on, although they all need to be addressed, is section 134(1)(g) and that brings us, if I can just move quickly through that area to the filter flow on and you will recall from the opening that I briefly mentioned three areas of concern. Why we are concerned about this is, again, as I say, volatility in relation to our award if it is allowed to grow inappropriately beyond its very narrow traditional and historical scope.
PN2932
The first area that we mentioned in opening, and we retain the concerns, is the attempt to ring-fence the award solely by geographic proximity, and it's in the context of this wider notion of alpine tourism. We respectfully would say that that's a very broad notion and it's a notion, the linking of alpine tourism with proximity is a very weak ring-fencing or confinement, and it is one that is likely to produce other employers saying: "Me too, I would like to have an award that allows me to do away with penalty rates and I'm part of the alpine tourism sector."
PN2933
There would be many industry of employers that are within that wider alpine tourism sector, and if the rationale for cutting away the award scope is not very strongly confined, there is likely to be additional claims and issues of inconsistency of treatment raised. As you have seen even this week, we pointed to one employer just outside the scope and now it's moved another 500 metres. We're just seeking instructions on who else is now in proximity. Do we just keep on creeping. It seems to have been done very quickly today.
PN2934
When I come to the application, we've had towns thrown in and out during the course of this week. We still don't understand the rationale. I did want to cross-examine on that, but appropriately perhaps I was stopped. But I must confess, I'm not all the wiser on the rationale for some inclusions and otherwise, as I will come to.
PN2935
VICE PRESIDENT HATCHER: In terms of the current coverage, what's to stop your clients from, as it were, creeping outside the original bounds of the intended bounds of the award?
PN2936
MR HARMER: Yes, your Honour.
PN2937
VICE PRESIDENT HATCHER: I mean, you might move into Jindabyne and buy an accommodation place there and there might be a ski shop in Cooma, I mean - - -
PN2938
MR HARMER: We say that the bounds is the industry of employer of ski lift operators and that's the substantive character test and why we say it's so important. We'd say that a hotel in Cairns is clearly outside that scope and would not be tolerant.
PN2939
VICE PRESIDENT HATCHER: But that industry is not what defines the coverage.
PN2940
MR HARMER: We would respectfully submit, given the context, the history and the award created, that that's what it would be read down to.
PN2941
VICE PRESIDENT HATCHER: I don't know how you read it down. It's fairly clear that it is employees of somebody who operates a lifting operation.
PN2942
MR HARMER: We say in relation to the relevant industry of employer and there's the relevant substantive character. If you step outside that substantive character, you potentially move into another award and that's the importance of that test. It's an award coverage test, so if there was one of these entities that did have a hotel in Cairns, there would be a question of, well, which award applies and the question would be determined by the substantive character of the employer vis-ą-vis those operations in the circumstances and that would have a particular outcome that would go a particular way more in favour of the Hospitality Industry Award, I would have thought.
PN2943
VICE PRESIDENT HATCHER: Does any modern award have a specific exemption for persons covered by the Alpine Resorts Award or is it all done by way of the general conflict clauses you have just referred to?
PN2944
MR HARMER: It's just through the general clauses, your Honour, is my understanding. But there's no specific carve-outs, as I understand it.
PN2945
VICE PRESIDENT HATCHER: Right.
PN2946
MR HARMER: So as I say, the area of flow-on within the scope of the alpine tourism sector, if we take, for example, Dinner Plains, it's 11 kilometres away from Mount Hotham, so we've gone well beyond the 2.5. It has a large resort, Ramada, as you heard in the evidence. That's a significant operator. On this draft determination, that accommodation enterprise would potentially get the benefit of this award. Only another four kilometres on in distance, you would have the Novotel at Lake Crackenback. Obviously, inside that 11-kilometre distance, you've got, for example, Sponars in proximity to Perisher. The Ski Rider more at 11 kilometres. One could imagine those employers potentially saying: "Well, I've looked at the loose criteria put forward here. I have to be seasonal. I am impacted by the weather. I have got to have proximity. Why not me too? What's the difference? It's a short drive." Sponars, it's a five-minute drive. Is that a proper criterion by which to ring-fence such significant conditions against the background of the history? We'd say, respectfully, not.
PN2947
You have heard the evidence around feeder towns. Dinner Plain is a feeder town to Mount Hotham and we went through with Mr Pennington the fact that there are many other feeder towns and Mount Bogong which was dropped out, is a feeder town only 17 kilometres from Falls Creek. Mount Beauty is further away, but one of the witnesses who didn't turn up this morning, Mr Nick Cook, from memory, you will see that he has a business integrated across, from memory, Falls Creek and Mount Beauty. And, of course, Mr Pennington acknowledged that the reason why he wanted Dinner Plain in as well as Mount Hotham is because he had an integrated business across the two, which is not unusual because a lot of people are based in the feeder towns and employees transfer between businesses in the two areas.
PN2948
So that example could be replicated right across the industry and significant towns, and he did acknowledge, as I understood his evidence, indeed, his original evidence stated quite unequivocally that Mount Bogong was a feeder town and also that Jindabyne was a feeder town to Perisher and to Thredbo. So, you know, if you get into people in Thredbo being able to say: "Well, hold on, you know, on a good day you're a half hour's drive away. They're in a country district. If these other criterion are what's determining coverage, we can put our hand up and meet them as well."
PN2949
Another example would be Rhythm up at Perisher Smiggins which it looks like their footprint there would get in and yet they're in Cooma and I think one of the largest operators in the country in the area of ski hire, et cetera. Now, you know, what is the impact in the circumstances? And, all right, there's an attempt to ring-fence through distance, but in our respectful submission, other employers would be entitled to say: "Look, if that's all I have to do, that's what I have to satisfy to get all this relief from penalty rates and the other flexibilities, I'll have a crack, perhaps."
PN2950
So the other areas of flow on, we mention very briefly would be inside the 2.5 kilometres and I mentioned this is more flow in the terms of a medical centre which is at Perisher and you will have heard that most of the resorts have a medical centre privately owned. They meet all the other criterion of these other private operators in terms that they're totally dependent on the resort. They have seasonal impacts. They're totally inside the perimeter, but for whatever reason it hasn't been extended to. Private childcare operators is another example. So they could immediately put their hand up and say: "Well, why weren't we included?" And, indeed, other chambers of commerce in certain of the feeder towns one could expect would follow suit given what's at stake.
PN2951
Then the third area of flow on was that of the concept and this is the issue that is difficult to control because it does go to issues of fairness and consistency and stability in the safety net and the notion that one can attach oneself, eyes open, by taking a business into a specialised area that has a particular award with particular benefits and then saying: "By virtue of that, I have moved into that industry of employer" or "I'm properly within the coverage or I should be granted discretion to move into coverage of that particular award."
PN2952
I think the AWU and the SDA have each given examples of perhaps moving shows or theme parks, et cetera, where entities in close location if this was an appropriate principle for changing coverage could point to the same issue. Of course, there is a huge financial incentive for others to have a crack and our apprehension is that this application is inappropriate and if there is the inch given, others will be wanting to take a mile and the risk is our entire award and its history.
PN2953
So if one looks at the application, as I say, it's changed quite a bit over the course of the week, very briefly, we do say it needs to be very carefully looked at and carefully crafted. I think Corin Forest and Lake Mountain have now dropped out as two resorts and I appreciate they're small and one is only cross-country but it's attached to a ski lift operator, as you have heard in the evidence, which is Mount Baw Baw. So those two are out.
PN2954
Seven resorts have on the current drafting lost operations to the awards coverage on this current draft, so Selwyn Snowfields has ticketing and guest services operations in Adaminaby, which is one of the feeder towns I took the witness to. Charlotte Pass has ticketing and guest services operations in Jindabyne. Thredbo have ticketing and guest service operations in Jindabyne. Perisher has ticketing in Jindabyne. They've got corporate services, ticketing, maintenance and hospitality at the station in Jindabyne. Bullocks Flat is Skitube which is the base for one of the largest privately owned rail operations in the country in terms of volume of people. Bullocks Flat is outside the radius and so there is a large number of ticket sellers. There are train drivers that have no other award coverage at all that have technically been taken out.
PN2955
All of this can be rectified, of course, through more careful drafting, but I'm just demonstrating the need for care. Falls Creek Ski Lifts and Mount Hotham have retail rental, et cetera, in Myrtleford and Mount Buller Lift Company operates Buller Sports in Mansfield, et cetera. Again, perhaps just an unintended consequence, of course, by lack of care, but it's illustrative of the problem of instability that we face and more importantly is that there has not been a lot of thought obviously put into the drafting and others could look at it and say, quite properly, that if this tribunal grants it on the criteria that have been put forward, which if one goes back to 8.5 to 8.7 of the submissions of April 2017, they are quite broad and loose and there would be a raft of businesses that could say "Me too" based on that rationale.
PN2956
Other aspects with the drafting, as I have said, Bogong Alpine Village has dropped out, 17 kilometres away from Falls Creek. You will notice in the drafting, and there has been no explanation given, that with most of the resorts there is a reference to the post office being the epicentre. When you get to Mount Hotham Alpine Resort, which is where Mr Pennington came from and he acknowledged in his cross-examination that he was part of the genesis of this whole application after a large number of people were caught out applying the wrong award, you will see that Mount Hotham is not the post office. They've got a post office. His evidence shows it's in his premises. But you've got the alpine resort and the scope of that is just uncertain. About 2.5 kilometres away, there's an area called Hotham Heights. I'm not sure if it's in or out, but it's got about 40 accommodation premises and basically there's very little understanding of the rhyme and the reason for what is being done and why and, certainly, we would say potential for a lot of unintended consequence and potentially flow on, unless the matter is very carefully analysed.
PN2957
So that's our concern with flow on and that's just, we would say, a simple and old industrial concept, but one that's very real. And, as I say, with any increase, it won't only be employers potentially making claims in relation to the award, many unions would be quite entitled to say: "We also want to make an application, but it's going the other direction, like United Voice, we want it cut back or removed."
PN2958
The next point I make and I'll be brief because it was indicated in the opening that perhaps it's not that close to the mark, but there is a long history around the substantive character test whereby operations side by side with totally different terms and conditions have been found to be appropriate because of the different substantive character of the employer and its industry. And, again, mining operations where there's contracting out of catering and things like that are historical examples. It's not so unusual. That's what complained of here would be the case in terms of award coverage. Now, that's not vital because this tribunal properly has a discretion. We would say if you are satisfied by probative evidence addressing on an evaluated basis the relevant criterion under section 134 and you think there is cogent reasons, we're not suggesting there is any inhibition other than the total lack of merit and the ramifications that are, we would say, contrary to section 134.
PN2959
In the context of cogent reasons, we say that the case that's been brought forward is very weak. First of all, you would address who is before this tribunal. We have got a Tasmanian resort covered here. There is no one instructing the lawyers present who purports to be from that state. The same with Victoria. There is no one client and there has been opportunity to address this further in submissions, but we went to it in cross with Mr Izzo. We made the point that there has not been one person put forward from Victoria and yet you are being asked to impact hundreds of employers in that state - hundreds - and there's not one of them before you, other than a few witnesses. And if that's the representation, then it's very narrow. But it's been emphasised they were here as witnesses, not as clients or people seeking this. In that context, it is material that in New South Wales, the Chamber of Commerce from the largest resort, Perisher, doesn't support this application and yet it's thrown in as are all the other resorts. I appreciate that is also not determinative, but we do think that it is relevant to the tribunal's discretion, the lack of substance, if you like, and the fact that many employers are going to be impacted who may not even be award. Certainly, they're not before the tribunal.
PN2960
Secondly, is that, again just briefly, as I have mentioned by virtue of going to the 2009 decision, the submissions around the criteria at 8.5 to 8.7 and the pull together of them and their application from 10.1 on in the April 2017 submissions are superficial, totally inaccurate and deliberately ignore the genuine context, the specific history, the past awards, the narrow scope. It's quite a deliberate attempt to come up with a loose grab-bag to scoop up a lot of employers so that they can make more profit through lack of penalty rates, in essence. That's not a good basis for changing the coverage of this award and it's certainly not anything within cooee of a cogent reason.
PN2961
One of the other things put forward in the written submissions is that somehow the Full Bench was given the wrong impression that there were somehow no employers up next to the ski fields and I will just very briefly address that if you will give me the indulgence. To that end, perhaps if I just go to the transcript of the 2009 proceedings that the tribunal was taken to by way of extract and I will try and be brief with all of this. But if I go to our outline of submissions of 21 December 2016, at annexure Z. I apologise there's so many annexures. You will find there the full transcript of 30 June 2009, parts of which were selectively extracted in the submissions you were taken to.
PN2962
What we say in summary is this, that the association twice before the series of questions, the SDA certainly strongly pointed to the existence of other employers. To the extent that there was uncertainty left in the mind of the tribunal after there is an attempt by the association to answer the questions that were point out before, the SDA took up that very issue in a further written submission that clarified the whole, I guess, context and contest that's been raised. And, of course, the Bench wasn't taken to that earlier.
PN2963
So very briefly, in terms of the transcript at paragraph number 3639, the association through myself is addressing the tribunal and you will see there in the paragraph about halfway through there is reference to self-contained operations accommodating a large number of people and sublet to a large number of operations for accommodation and entertainment and other purposes. So there is reference there in the transcript to the relevant existence of other operations sublet or subleased to dealing with accommodation, entertainment and other purposes.
PN2964
At PN3687, just very briefly, you will see at the top of the page there, about four lines in: "It would appear to be a significant distinguishing feature compared to other employers in the region of which there obviously are some." Again, that's the association commenting at the commencement of a line of questions. As has been pointed out, thirdly, the SDA very strongly went to the issue earlier on at PN3654, and you were taken to that quote earlier where there is the reference by the SDA to perhaps the award being inappropriately named and I will just move to 3654 and 3655, and specifically:
PN2965
"The issue raised by the SDA is one of the very issues being addressed in this case, is that the SDA was pointing out that there would be private employers side by side with the resorts under this modern award and the employees of those employers would be covered by other modern awards and would be on lesser terms and conditions."
PN2966
Now, against that background, the SDA then went to the trouble because they also were concerned that the Commission may have had uncertainty in relation to this issue and so the SDA put on a specific written submission which is at annexure X to this set of materials. So that's just before it and you will see there at annexure S there's a submission by the SDA which is headed up: "Coverage of the Alpine Resorts Award." It's a very short submission. It goes to the exact issue that's being raised.
PN2967
At paragraph 5, they point out that, "Mr Harmer answered the questions honestly", which is very kind of them, but they go on then to point out that to the extent there is any confusion, they were referring to the sublessees that I had referred to earlier in the transcript and the SDA clarified in writing that there were these other entities that were sublet to by the resorts and who would work side by side under modern awards. So the extent that that piece of transcript which has to be taken in isolation to get any confusion because, again, I just emphasise the Full Bench had the history, they had the prior awards, the narrow scope, they had the decisions, the transcripts from all those prior awards showing the narrow scope, showing that there were issues of a whole range of other employers and unions being carved out, but the SDA did, to the extent there was any confusion, further addressed it here and made it abundantly clear, out of the very same concern that's now being opportunistically capitalised upon by the applicants, but of course without going to this further clarification.
PN2968
The point I'd make very briefly on that is that when one goes to the 2014 application to vary which we went to in cross-examination of Mr Pennington, and you might recall that he did acknowledge that that application which, in effect, faltered and there was a suggestion that the applicants come back and try again in award modernisation and that was the genesis, he acknowledged, of this current application. That application appears at GG of the annexures to the affidavit of Gavin Girling and if you will just bear with me, you will recall I did ask in cross-examination: "Was this put forward on your instructions and consistent with your instructions?" I asked that of Mr Pennington who was one of the applicants through this company.
PN2969
If you go to that application, on page 5 of 6 of the grounds at paragraph (x), which is about point 3 on the page, what you have here is a number of employers and all of the affidavits in support all talked about and acknowledged that these employers were applying the award inappropriately previously and that was the basis for them making the application. That there had been the Ombudsman come in and they were now trying to say in this application that on the basis of uncertainty about the scope, it should be changed to include these very sorts of employers who are the subject of this application. At point (x):
PN2970
There is a contention that the text of the award is suggestive of coverage beyond the scope suggested by subclause 14 above in that it makes reference to classes of workers falling within the classifications set out in schedule 2 of the award, but who were employed other than by an employer as defined in clause 4.1 of the award. That such classes of workers exist was a fact known to the Australian Industrial Relations Commission at the time the award was made and it can be inferred that in the absence of an express statement to that effect, the AIRC did not intend such workers to be excluded from the operation of modern awards.
PN2971
So this was an attempt to say that there was ambiguity and that a Full Bench that we have gone to in 2009 actually intended to include all of these people, these employers, and they're saying here, Mr Pennington, who was the genesis of this application, not that the Commission was uncertain about the existence of the employers, they're saying you can infer they were abundantly aware and not only so aware, they wanted to include them as part of the application. So the exact opposite submission was made in support of the 2014 pre-runner or precursor and genesis for this application.
PN2972
VICE PRESIDENT HATCHER: Mr Harmer, who brought that application again?
PN2973
MR HARMER: That was Mr Pennington through his company, DPSI, and another company from Falls Creek, each of which had been party to that problem with the application of this award and I did take him in cross to that history whereby that became the forerunner to this application.
PN2974
VICE PRESIDENT HATCHER: Is that the matter that was briefly before me on one occasion?
PN2975
MR HARMER: That's correct, your Honour, and there was a kind suggestion that it was an inappropriate application and that perhaps award modernisation might be a way forward. If I can, just while we're on the tenor of that matter, as was acknowledged in cross, the genesis of that was there was quite significant non-compliance across the whole sector and I think before I was stopped by an objection, Mr Pennington acknowledged that the extent of non-compliance in the Mount Hotham and Dinner Plain region was considerably. And you saw the article. There were major non-compliance issues. That's one thing, but what then happened was this application came on through lawyers.
PN2976
There was a suggestion that there had been attempt to try through award modernisation. This award came up. New South Wales Business Chamber expressed an interest but wasn't appearing for any of these current players, as we understand it. The matter came before Ross P, and Ross P - and I'm not sure whether on advice from your Honour or otherwise was aware of that prior application, and raised himself: "Well, what's happened to those people? They're not even here. We're going through all the throes of this award, again the review, and they're not even here." It was only after Ross P raised it that then the appearance changed and all of a sudden the Business Chamber New South Wales was appearing for Thredbo and Perisher at the time, Chambers of Commerce, Perisher dropped out and it's gone on from there to reach fruition.
PN2977
VICE PRESIDENT HATCHER: So the compliance problem was only in the Victorian resorts. There was no evidence that it had arisen in New South Wales, was there?
PN2978
MR HARMER: The article that is I think at II of the affidavit is suggestive and I acknowledge it's just an article quoting Ms James, the Fair Work Ombudsman. But it was quite wide across the sector and, sorry, I'll just find the correct reference.
PN2979
DEPUTY PRESIDENT DEAN: HH.
PN2980
VICE PRESIDENT HATCHER: HH.
PN2981
MR HARMER: Sorry, it's HH, thank you. So it's quoting in amongst there, Fair Work Ombudsman, Natalie James. But, as I understand it, it is talking about inspections in Mount Buller, Falls Creek, Mount Hotham, Dinner Plain, Mount Baw Baw in Victoria, Jindabyne, Thredbo, Perisher. And as you heard from one of the witnesses from Thredbo, and take no point of it, you know, inadvertently I think for a bookkeeper there was one of the witnesses here from Thredbo that was applying the award previously. Anyway, so there was quite an issue around the application of the award inappropriately and then yet still a delay in participating in this process.
PN2982
I appreciate these are more at the outer layer of what might be in any way pertinent to the discretion that the tribunal has. But what we say is that the grounds that have been put forward around misleading or around the criteria, are really just clasping at straws. And to the extent that you're in any way tempted to find cogent reasons, there are additional discretionary factors. The first one is that under 578, equity, good conscience, substantial merits of the case, governs your discretion in addition to 134. We would say in terms of equity, there's a lack of clean hands. I appreciate this is more on the outer and perhaps you would say not in any way pertinent, but the genesis was extensive non-compliance.
PN2983
Secondly, across the persons who have come forward as witnesses, there is a confused rationale for why this is happening. But, thirdly, when one cuts through it, it really came down to this notion of more profit through no penalty rates. And, all right, notions of level playing field and competition, many of which were misconceived, understandable and, look, there is no lack of empathy from the resorts for these operations and, as I say, we hope they flourish. But there is a total lack of merit in what has been put forward.
PN2984
On top of that, then you had the start of award modernisation and even after that history of non-compliance in applying the award inappropriately and being asked after a failed application perhaps to take it up, they didn't even turn up. And then you have against a history where, all right, the RTA was there in 1989, but none of these employers turn up in 2009. They didn't turn up at the start of this process, 2014 and going forward, and then even this week, three of them who are witnesses can't even turn up to the tribunal and this matter has been listed for a long time. So we really question just how much substance there is across these employers going to this application. They haven't attempted to utilise other mechanisms under the Act, although we acknowledge they are difficult in terms of IFAs and EBAs.
PN2985
But what we would say in close is, and this is subject to any questions the Bench has, there is enormous lack of merit behind this application. It doesn't even approach cogent reasons. I know the SDA is going to address section 134 in detail, so I won't labour the point, but I do labour the fact that the safety net is meant to be stable and do we not see instability. We apprehend genuinely - and that's why we oppose - instability in the employer side with a great financial incentive to say: "Me too, I want the same loose criterion here because I can jump on that bandwagon and I'm not far away in either proximity geographically or nature of business within the scope" or "I can apply that concept too."
PN2986
In the face of the Full Bench decision on penalty rates and the whole history, that's just totally inappropriate. So I mention again just the question of timing. I appreciate today we have just been handed an application that makes a bit of a mess of it in terms of the number of resorts impacted and I have got to get full instructions on just what it does, but we'll come back to that if we're permitted with a little bit of time. But we are otherwise anxious to get the award up and if the Bench, as I have said before, has to reserve and take some time before handing down this decision, we would certainly be happy with that approach without pre-empting in any way, shape or form what the tribunal might quite properly in its discretion ultimately decide. So unless there is any questions, that's the gist of our submissions.
PN2987
VICE PRESIDENT HATCHER: Thank you. All right, well, we will adjourn shortly. Can I just raise one issue? That is the parties might consider overnight whether because the draft determination is expressed in geographic terms to locations in three states, whether section 154(1)(b) has any relevance.
PN2988
MR HARMER: Yes, thank you, your Honour.
PN2989
VICE PRESIDENT HATCHER: Subject to that matter, we will now adjourn and resume at not before 9.30 in the morning.
ADJOURNED UNTIL THURSDAY, 2 NOVEMBER 2017 [5.33 PM]
LIST OF WITNESSES, EXHIBITS AND MFIs
EXHIBIT #O STATEMENT OF STEVE OWEN DATED 24/03/2017........ PN1915
EXHIBIT #P STATEMENT OF JASON MOON DATED 20/03/2017 WITH THE FOLLOWING EXCEPTIONS: PARAGRAPH 20 STRUCK OUT; SECOND SENTENCE OF PARAGRAPH 21 (INCLUDING QUOTED REMARKS) STRUCK OUT; FIRST SENTENCE OF PARAGRAPH 22 STRUCK OUT, AND PARAGRAPH 24 STRUCK OUT PN1932
EXHIBIT #Q STATEMENT OF NICK COOK WITH THE FOLLOWING EXCEPTIONS: LAST SENTENCE OF PARAGRAPH 16 STRUCK OUT; PARAGRAPH 19, THE WORDS APPEARING AFTER "MID-WEEK" STRUCK OUT, PARAGRAPH 20, SECOND SENTENCE STRUCK OUT........................................................... PN1943
ROBERT AIVATAGOLOU, SWORN............................................................. PN1947
EXAMINATION-IN-CHIEF BY MR SCOTT................................................ PN1947
EXHIBIT #R STATEMENT OF ROBERT AIVATAGOLOU DATED 31/03/2017 WITH THE EXCEPTION OF THE LAST SENTENCE OF PARAGRAPH 19............. PN1954
CROSS-EXAMINATION BY MR HARMER................................................ PN1962
CROSS-EXAMINATION BY MR BRUNO.................................................... PN2005
THE WITNESS WITHDREW.......................................................................... PN2039
KEITH EVANSON ARCHIBALD, AFFIRMED........................................... PN2042
EXAMINATION-IN-CHIEF BY MR SCOTT................................................ PN2042
EXHIBIT #S STATEMENT OF KEITH EVANSON ARCHIBALD DATED 27/03/2017............................................................................................................................... PN2046
CROSS-EXAMINATION BY MR HARMER................................................ PN2058
CROSS-EXAMINATION BY MR BRUNO.................................................... PN2091
RE-EXAMINATION BY MR SCOTT............................................................. PN2111
THE WITNESS WITHDREW.......................................................................... PN2115
BRETT ANTHONY WILLIAMS, AFFIRMED............................................. PN2118
EXAMINATION-IN-CHIEF BY MR SCOTT................................................ PN2118
EXHIBIT #T STATEMENT OF BRETT ANTHONY WILLIAMS DATED 21/03/2017 WITH PARAGRAPHS 37 AND 38 DELETED.......................................................... PN2124
CROSS-EXAMINATION BY MR HARMER................................................ PN2127
CROSS-EXAMINATION BY MR BRUNO.................................................... PN2147
RE-EXAMINATION BY MR SCOTT............................................................. PN2190
THE WITNESS WITHDREW.......................................................................... PN2195
NARELLE THERESE CLARK, SWORN...................................................... PN2198
EXAMINATION-IN-CHIEF BY MR SCOTT................................................ PN2198
EXHIBIT #U STATEMENT OF NARELLE THERESE CLARK DATED 30/03/2017............................................................................................................................... PN2221
CROSS-EXAMINATION BY MR HARMER................................................ PN2224
CROSS-EXAMINATION BY MR BRUNO.................................................... PN2251
RE-EXAMINATION BY MR SCOTT............................................................. PN2291
THE WITNESS WITHDREW.......................................................................... PN2294