TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 27897-1

VICE PRESIDENT WATSON

AM2010/117

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

Application by Baking Manufacturers Industry Association of Australia
(AM2010/117)
Food, Beverage and Tobacco Manufacturing Award 2010

(ODN AM2008/37)
[MA000073 Print PR988932]]




Sydney

12.03PM FRIDAY, 17 SEPTEMBER 2010

THE FOLLOWING PROCEEDINGS WERE CONDUCTED VIA VIDEOLINK AND RECORDED IN SYDNEY

Reserved for Decision

PN1

THE VICE PRESIDENT: Can I have the appearances, please?

PN2

MR A DUC: Your Honour, if it pleases, Duc, initial A, I appear for the Baking Manufacturers Industry Association of Australia.

PN3

THE VICE PRESIDENT: Mr Duc.

PN4

MR D STORY: If the Tribunal pleases, Story, initial D, of the Australian Federation of Employees Industries.

PN5

THE VICE PRESIDENT: Mr Story.

PN6

MR STORY: Thank you.

PN7

MS C ESTOESTA: If the Tribunal pleases, Estoesta, initial C, appearing on behalf of the AMWU.

PN8

THE VICE PRESIDENT: Ms Estoesta. And in Melbourne?

PN9

MR M TONER: If it pleases the Tribunal, Toner, initial M, for the National Union of Workers.

PN10

THE VICE PRESIDENT: Thank you, Mr Toner. Yes, Mr Duc?

PN11

MR DUC: Thank you, your Honour. I only intend to be very brief today. Your Honour, firstly there's an issue that's been raised by the unions to say that there really is no ambiguity that is inherent in this particular variation that we're seeking to the Food Beverage and Tobacco Manufacturing Award, and the clause that we are seeking to have varied is clause 31.3(c). So in order to go to the heart of ambiguity two affidavits were filed - and I will seek to have those marked as exhibits. I'd spoken to my colleague, Mr Toner, about whether those witnesses were required for cross-examination and the answer was, "No". So I will seek to have those marked in these proceedings.

PN12

THE VICE PRESIDENT: That's the affidavit of Mr Sauer and the affidavit of Mr McClennon.

PN13

MR DUC: That's correct.

PN14

THE VICE PRESIDENT: Yes, I'll mark the affidavit, affirmed on 25 March by Mr Martin Sauer as exhibit D1 in these proceedings.

EXHIBIT #D1 AFFIDAVIT OF MR MARTIN SAUER, AFFIRMED 25 MARCH

PN15

THE VICE PRESIDENT: And I will mark the affidavit of Martin McClennon, affirmed on 19 August 2010 as exhibit D2.

EXHIBIT #D2 AFFIDAVIT OF MARTIN MCCLENNON, AFFIRMED 19 AUGUST 2010

PN16

THE VICE PRESIDENT: And while we're at it, Mr Duc, I might mark your outline of submissions, filed in this matter, exhibit D3.

EXHIBIT #D3 OUTLINE OF SUBMISSIONS OF MR DUC

PN17

MR DUC: Thank you, your Honour. Your Honour, just again on the point of ambiguity, we say that these affidavit do (indistinct) ways the issue of "How do you pay a casual employee if they are employed under these particular provisions?" If the shift provision is to be read how the unions believe it is and how the award is currently structured, you would have to pay a casual employee who works one or two shifts per week - you would have to pay them 50 per cent for the first three hours and then 100 per cent thereafter.

PN18

Now that, your Honour, in our submission - there's no precedent in - at least, the baking industry - for that kind of penalty to occur. In all of the awards, casuals in the past have been employed just pursuant to the normal penalty provision or shift provision. For example, under the Bread Employees State Award in New South Wales there's a 20 per cent loading on top of the casual loading. There are none of these provisions which say that these employees can be paid, or should be paid these exorbitant provisions.

PN19

Your Honour, to that extent we say there's really no critical mass amongst the current awards for this provision to stand as it's currently drafted. There is no provision in the Baking Awards around Australia for a casual to be paid on a non consecutive shift, if I can put it that way, 50 per cent for the first three hours and then 100 per cent thereafter. In fact, if casuals were hired that way - once or twice a week, then that would become the norm. Casuals would received their 50 per cent for the first three hours and then double time thereafter.

PN20

Casuals already have a loading - casuals already get a 25 per cent loading in order to take care of those sorts of issues. So to that extent we say that it double penalises an employer for hiring a casual.

PN21

THE VICE PRESIDENT: You say there's no critical mass in relation to baking - the baking industry, but what about in relation to the Food Beverage and Tobacco Manufacturing Industry generally?

PN22

MR DUC: I'm not sure about that. I think my friend, Mr Story, might have cast his net a bit wider than I have for the baking industry, so I'm not exactly sure, but I think the union's submissions in this case don't really identify any other awards where this is the norm, but I'll let my colleagues from the unions identify any of those sorts of issues.

PN23

Your Honour, in our particular industry, the baking industry, it's not as though we are making food in cans to go on shelves where we actually know we have a set order to make. People like Martin Sauer's Bakehouse or Martin McClennon in South Australia, they bake to orders, so they really do rely on casuals in order to run their businesses. So it's really to that extent that we say that if casuals are to be paid 50 per cent and 100 per cent for one or two nights work that will really present a very large cost impact for those businesses.

PN24

Your Honour, I just wanted to make a few points about the other submissions that have been made. If I can address the AMU submission? At part 16 of their submissions, they - the union seems to indicate that because the union or the employees have already suffered a decrease in their casual loading from 30 to 15 per cent I think it is that the employee - the casuals should not suffer any more decrease in their conditions. But we say that those two provisions are not linked in any way. It's really of no use to complain about a loss in regard to one area, and then link it to an unrelated provision which is the penalty provision.

PN25

Our view of why this clause is structured this way, the mischief that it's meant to stop employers from doing is chopping and changing full time staff from working five consecutive nights on afternoon shift or night shift, and then chopping them to the other. So it would be, of course, perfectly understandable for an employer to be penalised if they said, "On Monday and Tuesday you're working night shift; and then Wednesday, Thursday, Friday, you're working the afternoon shift."

PN26

So, essentially, what I'm saying, your Honour, is that the mischief that it's intended to prevent is the full-timers getting chopped and changed between various shifts - the afternoon and the night shift. We have no complaint about that. What we have a complaint about is that casuals are getting caught up in this issue and casuals are being penalised to businesses' detriment.

PN27

Secondly, in relation to the AMUs submission at part 18, there seems to be a suggestion that our association is attempting to reduce casual entitlements in the other areas of the night shift and the afternoon shift. And we say that we're not attempting to do that at all. All we're seeking to do is clear up the ambiguity that exists around this particular clause.

PN28

THE VICE PRESIDENT: Are you seeking to remove the afternoon or night shift entitlement of casual employees entirely - - -

PN29

MR DUC: No.

PN30

THE VICE PRESIDENT: - - - or does it - does the entitlement arise under paragraph (b) rather than paragraph (c) if your application is successful?

PN31

MR DUC: Your Honour, it's 31.3(c) that we're attempting to - or we're submitting should be varied. We're not saying that (a) or (b) should be varied at all. There's no issue that casuals that are working an afternoon shift or a night shift get both, the shift loading and the casual loading.

PN32

THE VICE PRESIDENT: Yes, but they wouldn't get the higher shift loading under (c) if your application is successful.

PN33

MR DUC: Yes.

PN34

THE VICE PRESIDENT: They would get the lower loading under (b).

PN35

MR DUC: That's correct.

PN36

THE VICE PRESIDENT: Yes.

PN37

MR DUC: That's correct. Your Honour, two final points. In regard to the NUWs submission we adopt AFEIs submissions regarding the NUW submissions. And then lastly in regard to the AFEI submissions, we support their submissions and we particularly agree with their point 5 that the harm that this clause is meant to remedy is actually the chopping and changing of the full time shifts. Unless there are any questions, your Honour, they're the submissions.

PN38

THE VICE PRESIDENT: Mr Duc, I just want to get back to the basis of the application. You say that the clause is ambiguous and you rely on the two affidavits. The affidavits, essentially, say that as to the award is currently drafted and if someone is casual or part time employee is employed for one or two nights then they have to pay time and a half for the first three hours and then double time on that shift. Can you just tell me why the affidavits establish that there is an ambiguity?

PN39

MR DUC: Well, I think the ambiguity is around the word "if" in paragraph 5, "If I hire an employee," it seems that that is what is being required. Clause 6 also says, "I'm uncertain as to what to pay them upon transition." So we say - we rely on paragraph 5 and 6 to demonstrate that there is an ambiguity that the employers and members of my association don't know what to pay a casual and are concerned about ramifications if they do not apply the correct rate under the modern awards.

PN40

THE VICE PRESIDENT: Is the basis for the extra payment unclear or does it arise from the wording in some ways? The argument against you is that by using the same terminology throughout clause 13.1 the clause isn't ambiguous. It clearly applies to casual employees, and that seems to be the circumstance that you're seeking to change by removing casual employees from the entitlement in paragraph (c).

PN41

But you're not relying on it being in error in some way of creating an anomalous situation unintentionally or something of that nature, you say that it's ambiguous.

PN42

MR DUC: Well, we do say that it is ambiguous. My employers do not know what to pay their employees under this provision. Is it an error? I'm not sure if it is an error, your Honour, but my employers are unsure what to pay. The argument about the definition of employee is a contextual one. There is no definition in the award. But quite clearly, from the past, these provisions have not existed for casual employees. If it was meant to apply to casual employees then I would have expected to have been a clearer understanding.

PN43

And the reason why it's come about so late is that the employers in the industry have really only turned their mind to these issue post 1 July period when the new transitional rates have needed to apply. So we're not seeking to correct an issue that we have not litigated before that we have for some reason missed - there is an ambiguity about these provisions. The employers are not sure what to pay their staff.

PN44

THE VICE PRESIDENT: So you're not wishing to agitate something you've not litigated before with - were these matters raised during the award modernisation process with the - - -

PN45

MR DUC: Well, I think the unions might have something to say about whether they were raised in the past. But for my members the issue has come into focus after the transitional period started.

PN46

THE VICE PRESIDENT: You don't refute the suggestion that it wasn't raised in the past?

PN47

MR DUC: I'm not sure if it was actually raised in the past: casuals are included in this, yes, or no. I don't recall that ever having come up in the discussions from when the award was made. Thank you, your Honour.

PN48

THE VICE PRESIDENT: Thank you, Mr Duc. Mr Story?

PN49

MR STORY: Thank you, your Honour. AFEI made a written submission on Tuesday 14 September to apologise to delays in making the submission, and we largely rely on those submissions today. Just further to the submissions of BMIAA - sub clause (d)(1)(3)(c) of the Food Beverage and Tobacco Manufacturing Award is ambiguous as well because it - there are different interpretations that can be made of that clause and the use of the word "consecutive" shift work for employees.

PN50

One interpretation is that consecutive means that there cannot be an interruption between shifts. So for a casual employee this would mean that they must be engaged for five or six afternoon or night shifts in a row, or an overtime equivalent shift penalty would apply.

PN51

And the other interpretation is that a casual employee could be engaged on consecutive shifts which are consecutive for that employee, which is that it would say that a casual employee could work two night shifts in one week; two in the next; and one the week after. And in those circumstances they would not attract an overtime shift penalty. But it's ambiguous because of these interpretations which will have significantly different impacts for casual employees. If the first interpretation is correct, the implication is that a casual employee who does two shifts in one week will be paid a significantly higher shift penalty than a casual employee who does five or six shift work shifts.

PN52

And it's also of interest because of clause 13.1 of the award. Clause 13.1 talks about the types of employees and what casual employee is - a casual being engaged and paid as such. But the implication of that first interpretation where a casual employee must work or shifts on a successive basis without an interruption would mean that a casual employee would not be engaged on an as needed basis as most employers would need to engage employees on a very predictable and very quite long runs of shifts in order to avoid overtime equivalent type of penalty.

PN53

THE VICE PRESIDENT: Yes. You - and the examples you give, unless someone - unless a casual employee is engaged full time - - -

PN54

MR STORY: Yes.

PN55

THE VICE PRESIDENT: - - - effectively, then they will receive the equivalent to the overtime level penalty - - -

PN56

MR STORY: That's right.

PN57

THE VICE PRESIDENT: - - - for every shift they work even though they might only work afternoon or night shift and may have worked the same shift all the time.

PN58

MR STORY: That's correct, your Honour.

PN59

THE VICE PRESIDENT: If they would receive that - if it relates to the individual would depend on what their - or what their usual shift is so that only if it chops and changes with a small number of shifts at a time - afternoon or night shifts would - an entitlement to the overtime level.

PN60

MR STORY: That's correct. And a casual by - generally by its nature would want to be engaged on an as needed basis. So he goes to fill - to be offered a supplementary employer true casual or could be engaged for, you know, one morning and then one evening shift in that week.

PN61

But a second ground for the application by the BMIAA is that this application would ensure that the award achieves the modern award objectives. The - a critical - the critical mass of awards and this, on my desk, is just some of them. In Victoria, New South Wales and Queensland, did not include any similar shift work provisions for any employees and especially casuals. They generally had a standard - a 15 per cent, 12 and a half or a 30 per cent shift penalty that applied.

PN62

You've - in Victoria there was one award in the Food Beverage and Tobacco Manufacturing Industry that applied that a similar concept of non consecutive shift work penalties, but that was a penalty of only 50 per cent, it did not increase to double time.

PN63

So it is submitted by AFEI that the clause at 31.3(c) especially as it applies to casuals is at odds with the critical mass of awards that applied prior to award modernisation.

PN64

THE VICE PRESIDENT: That's the Confectioners Award you referred to?

PN65

MR STORY: It's everything from the Confectioners to the Food Beverage and Tobacco Manufacturing Victoria Award, to Margarine Makers, Pastry Cooks, Milling Industry, Aerated Waters.

PN66

THE VICE PRESIDENT: But which was the one - and I'm looking at paragraph 9 of your submissions.

PN67

MR STORY: Yes.

PN68

THE VICE PRESIDENT: You said only one referred to the higher penalty, but then only time and a half, not increasing to double time.

PN69

MR STORY: That's correct. That was Confectioners in Victoria.

PN70

THE VICE PRESIDENT: So none of those awards provided for the particular penalty that appears in the modern awards?

PN71

MR STORY: They didn't apply for any additional penalty if the shift work was not consecutive. So what this application will ensure is that the modern award allows for modern flexible work practices in Australian workplaces as well as it reduces any significant cost burden for employers. Just looking at New South Wales, for example, the - - -

PN72

THE VICE PRESIDENT: Can I just interrupt you there? I think you - the basis of the application is to resolve an ambiguity.

PN73

MR STORY: Yes.

PN74

THE VICE PRESIDENT: The points we've just been looking at in terms of the pre existing awards and those terms might be relevant to an alternative basis under section 160 - - -

PN75

MR STORY: That's right.

PN76

THE VICE PRESIDENT: - - - the provision is in error in some way - - -

PN77

MR STORY: Yes.

PN78

THE VICE PRESIDENT: - - - certainly in relation to casuals. You now seem to be going into a general merit consideration. I'm not sure of the basis on which you can put those submissions.

PN79

MR STORY: I understand. It was only on the basis that whilst they made - they weren't mentioned in the original application in a - the forwarding submission we submit that this would also meet those criteria that meets the modern award objectives.

PN80

THE VICE PRESIDENT: And what do you say to the allegations, there was no issue relating to this matter raised by employers during the award modernisation process?

PN81

MR STORY: I understand that this matter would have been considered - it was considered in the process, however, as Mr Duc was saying from the BMIAA the issue as to casual employees as far as I'm aware it was not considered during the award modernisation process. So - and it's accepted that this clause is not ambiguous for full time employees, and for part time employees there is appropriate provisions in the award. But it's the casual employees provisions it was, to my knowledge, not considered during the award modernisation process and which remains ambiguous because of these varied interpretations.

PN82

THE VICE PRESIDENT: Yes.

PN83

MR STORY: And if I could just comment, your Honour, on the submissions by the NUW and ANWU, this application does not seek to remove shift penalties for casual employees. It only - and casual employees - if the proposed variation were accepted casual employees would continue to receive casual loadings and appropriate shift penalty.

PN84

THE VICE PRESIDENT: Yes.

PN85

MR STORY: And that is all, your Honour.

PN86

THE VICE PRESIDENT: I might mark the submissions - written submissions, filed by AFEI exhibit S1 in these proceedings.

EXHIBIT #S1 WRITTEN SUBMISSIONS OF AFEI

PN87

THE VICE PRESIDENT: Thank you, Mr Story.

PN88

MR STORY: Thank you, your Honour. Mr Toner or Ms Estoesta?

PN89

MS ESTOESTA: If I could go first?

PN90

THE VICE PRESIDENT: Yes, Ms Estoesta?

PN91

MS ESTOESTA: Your Honour, today we seek to rely on our written submissions from 8 September to respond to the materials filed by BMIAA in support of the application to vary mainly - - -

PN92

THE VICE PRESIDENT: I'll mark those written submissions to the AMWU, dated 8 September, exhibit E1.

EXHIBIT #E1 WRITTEN SUBMISSIONS OF AMWU, DATED 8 SEPTEMBER

PN93

MS ESTOESTA: Your Honour, we continue to maintain that the applicant has failed to show in their written material filed prior to this hearing as well as today that there is an ambiguity in clause 31.3(c). We continue to oppose the applicant's proposed variation because it doesn't have the effect of making the provisions of clause 31.3(c) more clear. In plain reading of the BMIAAs proposed variations, they have the effect of preventing casuals getting paid the shift loading provided in 31.3(c).

PN94

We continue to submit that there is no ambiguity in clause 31.3(c) that clause appears in the Manufacturing and Associated Industries and Occupation Award 2010 as clause 37.3(b) where, in fact, 31.3(c) of the Modern Food Award is derived. There have been no applications for section 160 variations in relation to clause 37.3(b) in the Modern Manufacturing Award which supports our contention that the meaning of that clause is quite clear.

PN95

The clause as it was in the Modern Manufacturing Award and as it has done in previous predecessors of the Metals Award, they never excluded casuals in the shift loading provisions.

PN96

We submit that the same clause in the Modern Manufacturing Award has the same effect in the modern food award, that is the particular loading in clause 31.3(c) applies to both casuals and non casuals. For it to have a different meaning would be to create ambiguity or uncertainty not only in the Modern Food Award but also in the Modern Manufacturing Award.

PN97

We also continue to reject that casual loading and shift allowance are the same entitlements under clause 31.3(c). We submit that casual loading and shift allowances are separate entitlements. The casual loading is to compensate workers for vicarious nature of their employment and the fact that they don't receive annual leave and other types of leave, while the shift allowance is to compensate workers that have to work anti social hours, like night shift or afternoon shift.

PN98

Now, in paragraph 9 of our submissions we submitted that the real issue that the applicant is trying to address is the cost of the shift loading to employers. I just wanted to add that if that is an issue there are transitional provisions in schedule A of the modern food award to assist employers to ease in the costs of the new shift loadings. We have taken this approach to other rates, loadings and penalties, where our food and confectionary members have no found themselves having reduced rates. If I could address AFEIs written submissions now?

PN99

THE VICE PRESIDENT: Yes.

PN100

MS ESTOESTA: So we note that the AFEIs written submissions were lodged 20 days after the Tribunal's required submission dates. This has made it difficult for the AMWU to prepare our submission in response two days before the hearing and we are concerned that other parties who may have wanted to participate in the proceedings via written submissions may have not made - may have lost out on the chance to do that. Nevertheless, we'd like to make a few comments on the submissions they made so if you have the AFEIs written submissions in front of you as well as our submissions we will go ahead.

PN101

THE VICE PRESIDENT: Yes.

PN102

MS ESTOESTA: So AFEIs main contention in paragraph 3 of their submissions that this clause is ambiguous and uncertain in its application to casual shift workers, particularly, because of the use of the words "consecutive shifts" is fatally flawed because the use of the words "consecutive shifts" appear no-one in the text of the shift allowance provisions of the Modern Food Award. That aside, they then say in paragraph 11 of the submissions that the applicant's proposed submissions would address the interpretation issue of the term "consecutive" or should we say "successive shift".

PN103

Looking at the applicant's proposed variation, again, their proposed variation does not have the effect as intended by AFEI which is to clarify interpretation of successive shifts. In plain reading of the proposed variations, again, the effect of those variations is to prevent casuals from getting paid the shift loading provided in clause 31.3(c). The clause, as it was in the Modern Manufacturing Award and as it has done historically doesn't exclude casuals.

PN104

Now, moving onto paragraph 6 of AFEI submissions, in that paragraph they argue that the shift loading in clause 31.3(c) of the Modern Food Award does not apply to casuals because the casual employment provisions do not clearly provide a term similar to that adopted for part time workers. And the clause for part time workers reads:

PN105

The terms of this award will apply pro rata to part time employees on the basis of the ordinary weekly hours for full time employees are 38.

PN106

Now, we reject that contention. We have identified, in paragraph 5 of our written submissions that one of the main principles of award interpretation and agreement interpretation is that an award or agreement cannot be interpreted in isolation but must be interpreted in the context of the whole document. Giving consideration and weight to every part of the Modern Food Award, clause 31.3(c) clearly does not exclude casuals.

PN107

Where the Modern Food Award is not intended to apply to casuals, it's expressly stated in the award. Also there are no provisions expressly stating that 31.3(c) or in any other part of Modern Food Award does not apply to casuals.

PN108

Moving on to paragraphs 8 and 10 of AFEI submissions, in those paragraph they claim that the shift allowances in the Modern Food Award does not reflect any of the shift allowances of the pre modern awards it replaced and that was also something that was brought up by Mr Duc.

PN109

Your Honour, we concede that the clause as it currently stands existed in the Metal Engineering and Associated Industries Award 1998 and its predecessor awards. This is not contentious. The suitability of the clause was raised during the award modernisation proceedings when, in fact, George Weston Foods proposed inclusion of separate shift allowances for the baking industry. Despite this, the Full Bench of the Commission adopted the wording of the shift provisions of the Metals 1998 Award, and it's now included in the Manufacturing Award - Modern Food Award.

PN110

AFEI has not been able to show any evidence of any changed circumstances to warrant changing clause 31.3(c) as it stands. Now, the clause as it stands may or be suited to the Food Beverage and Tobacco Manufacturing Industry however this is a separate issue that we believe would be most appropriately dealt with during the special modern award provisions - modern award review in 2012. The AMWU is prepared to engage in discussions with the AFEI and the BMIAA and other interested parties to address that issue of shift loading in preparation for the 2012 modern review of awards if they are prepared to do so. Your Honour, those are our submissions.

PN111

THE VICE PRESIDENT: Thank you. Ms Estoesta. Mr Toner?

PN112

MR TONER: If it pleases the Tribunal, I believe you have received written submissions of NUW and I seek to rely on those and seek for you to have consideration of them.

PN113

THE VICE PRESIDENT: Yes, thank you. They have been received, Mr Toner, and I'll mark those submissions of the NUW exhibit T1.

EXHIBIT #T1 SUBMISSIONS OF NUW

PN114

MR TONER: Thank you. Today I do not intend to go through those verbatim but I would like to draw on some important matters in them as well as make some additional comments. Just by way of background the NUW represents tens of thousands of members in the food industry. The food industry is very broad and covers some (indistinct) but from our perspective we have people as far ranging as the dairy industry, the fishing seafood - to members in that field (indistinct). The reason why I'm saying this is that today the application that the BMIAA has made is an application to change the entire award, although the (indistinct) they only represent the baking employees.

PN115

So this is a huge award and we would not want the application to affect our members - not only those in the baking industry but also those in all the other sectors that encompass the modern award.

PN116

Anyway, now moving to the matters addressed today, I'd like to go firstly to the jurisdictional issue and ambiguity. The NUW (indistinct) and AMWU strongly submit that there is no ambiguity, there is uncertainty, and there is no confusion in the modern award. On this point, your Honour, I'd like to go the MIA applications themselves. As you pointed out earlier on in the proceedings - if you look at paragraph 4 of the statement of Mr Sauer and Mr McClennon, exhibit D1 and D2, they state that:

PN117

If I employee a) casual employee doesn't get paid at a casual rate plus shift loading.

PN118

Then at paragraph 5 they say:

PN119

If I hire a casual employee for one or two nights then I have to pay them time and a half for the first three hours and then double time thereafter.

PN120

And although Mr Duc said earlier on that those two people in their affidavit said, "It seems that they'd have to pay those rates," there's nothing in these affidavits that suggest that. And, indeed, these statements themselves demonstrate they (indistinct) interpreting the provisions. They indicate that they're not irrelevant, they're not confused, and they're not uncertain as to the application. Indeed, their main gripe seems to be that - if you go to paragraph 6, that the current provisions result in a substantial cost increase.

PN121

And I know this might be a problem for the baking employers but I would like to remind the Tribunal that (indistinct) as you know both employees and employers are blocked out significantly, and in order to compensate further generous transitional provisions have been adopted in schedule 8.4. This allows for the (indistinct) casual and shift allowances.

PN122

And also I'd like to point out a couple of other things in regards to making an application to vary the award. I note - I just want to draw on some sections of the Act itself. In section 3(f) of the Fair Work Act it states the objects of rates. And one of the objects is to achieve productivity and (indistinct) with an emphasis on enterprise levels that would (indistinct) . Likewise, one of the modern award objectives in section 134(1)(b) is one of the objectives is to encourage enterprise bargaining. I don't think this is relevant and the MWU considers relevant because we believe that instead of the Tribunal granting endless applications to vary awards that the Tribunal should in bear in mind, respectfully, that there needs to be some incentive to enter as part of the agreement.

PN123

And this is certainly an option of the two employers, Mr Sauer and Mr McClennon. They have an option to enter an enterprise agreement with their respective employees if they're concerned about the operation provisions in the modern award.

PN124

Just - another point on this issue of ambiguity, if you turn to the BMIAA application itself, exhibit D3, I believe that also is demonstrative (indistinct) provisions operate. The application itself specifically is to exclude casual employees from shift allowances. This is (indistinct) that the provisions as they stand cover all employees. Further to that as in the AMWU submission in our submissions - if you look at pages 2 and 3 of the AMWU submission you will see that in each of the sub sections they've bolded and underlined "an employee". This is important because as you know employees have always been (indistinct) engaged in a direct employment relationship. As an employee, obviously (indistinct) into the category of employees.

PN125

Further to the issue of ambiguity, at - this was in our submission, that I just wanted to draw on it - the basis - the MIA have made an application to vary the retail award. And in the application it was the Full Bench of the Tribunal (indistinct) determined that (indistinct) applied in addition to the casual loading. It strikes me as a matter of common sense that the (indistinct) shift allowances apply (indistinct) to casual loading so too were the non continuous shift allowance there to the point of ambiguity.

PN126

In the AMWUs submissions and in our submission we raise (indistinct) previous awards. It is open to consider that (indistinct) of the modern awards to help determine if there is any ambiguity. I note in the AMWU submissions that none (indistinct) it's (indistinct) explicitly exclude the operation of shift allowances for casuals, this includes non continuous shift allowances. In the NUWs submissions we not that one of the awards that specifically is relevant to these proceedings are the (indistinct) of 1998, (indistinct) shift allowances are to be had in addition to casual loading. So that's the - of MIA submissions.

PN127

And now I just want to turn to the AFEI. (indistinct) and also get grumpy about the lateness of their submissions, that they were to comply with directions and our inability to properly respond to matters. In any case - I'll just address some of the issues briefly in those submissions.

PN128

THE VICE PRESIDENT: You were saying you respond - - -

PN129

MR TONER: Well, we didn't have an opportunity to properly respond - I'll respond briefly now. But I just wanted to point out that our response may not be as comprehensive as we would have liked.

PN130

THE VICE PRESIDENT: - - - option, Mr Toner, is to give you a further opportunity to file something in writing with some extra time if that's necessary. If you've been able to, in the last couple of days, deal with the matters and you can deal with it today it might not be necessary, but I just raise that as an option if you've actually been unable to deal with the matters raised in the way - in the appropriate way.

PN131

MR TONER: Okay. Thank you. I might just touch on some of the issues briefly now and I might take up the opportunity to respond more comprehensively in writing.

PN132

THE VICE PRESIDENT: Yes.

PN133

MR TONER: If that's appropriate. In any case, if we turn to AFEIs submission, let's go to paragraph (b). In that paragraph they allege that the word "consecutive" is ambiguous, they say (indistinct)particularly the use of the words "consecutive shifts". If you turn to the actual clause in 31.3(c) you will see that the word used is not "consecutive" but it's "successive". Now, you might be wondering why I'm bringing this up, but I think it's an important matter because I think the two words a little bit different and that little bit of differences makes - goes a long way when you interpret it.

PN134

I had a quick look at the Oxford Dictionary. "Successive" is defined as following on another. Although AFEI contend that the word "consecutive" may be a bit more ambiguous, and (indistinct) the Oxford Dictionary only has one meaning for "successive." The Oxford Dictionary defines "consecutive" as following one matter continuously in an unbroken or logical sequence. That (indistinct) is what we - is how we find two possible interpretations. The AFEI, when they contend that one possible interpretation is that "consecutive" means Tuesday and Wednesday on one week, and then Tuesday and Wednesday on the next. That might be a possible interpretation of "consecutive" but it's not a possible interpretation of "successive." So it's - - -

PN135

THE VICE PRESIDENT: - - - of the interpretation based on the individual, the second interpretation identified in the AFEI submission is not open given the use of the word "successive".

PN136

MR TONER: Yes.

PN137

THE VICE PRESIDENT: Yes.

PN138

MR TONER: And once again AFEIs submissions, like the BMIAAs - their main gripe seems to be the fact that if you read the first interpretation is that non continuous shift workers would be getting paid more than continuous casual employees and non continuous casuals would be getting paid more than permanent employees. And I agree with them, that's the way it operates. However unfortunate that might be for the baking industry they have options to make the employees permanent, they have options to enter an EBA with their employees, but (indistinct) interpretation and I note the just because the way that operates might seem - really - those entitlements that our members have are really important and (indistinct)

PN139

One of the reason why we think it's important, and this is highlighted by the AMWU, is that (indistinct) non continuous shifts and this is noted in my submission that that's a huge risk to their health and they'd be working anti social hours. So in a way this continuous shift allowance, although (indistinct) sought to clarify that an overtime payment is actually related to the nature of the work, and it is there to compensate people who are working with the - risking the - compensating people for working anti social and health risks entailing hours.

PN140

So in paragraph 4 of the AFEIs submissions, they state that the provision would mean that casuals would only - would not be able to be engaged on an as needed basis. That's correct not, your Honour. Casuals can be engaged on an as needed basis but it's important that a casual to be working an afternoon shift on a Tuesday, night shift on a Wednesday, afternoon shift on a Thursday, and night shift on a Friday, then they'd have to compensate them for the non continuous shift work.

PN141

And, furthermore, I just - I turn you to paragraph 8 and 9 of their - of the AFEI submissions. (indistinct) those matters seem to address the correction of an error in section 150 rather than the removal of an ambiguity or an (indistinct). What the AFEI seem to be saying here - and it seems like they're trying to change the rounds for the application from one of ambiguity to one of removal of an hour, with that - if you look if all the old awards then these conditions weren't in the old awards.

PN142

Although we contest that information, I have to point out a couple of things in relation to that. These matters were based in the Award Modernisation Proceedings. Your Honour, unfortunately, I can't tender submissions to you from Melbourne, but I will point out if you go to the AIRC webpage, Australian Business Industrial (indistinct) dated 12 June 2009, if you look at that exposure draft - sorry - not exposure draft - it's the comment in relation to the exposure draft - that submission sought to remove completely section - clause 31.3(c) on the basis that it was ambiguous.

PN143

If you look at the first few pages of that submission that is - see the attached draft award. "We want to change the shift allowance provision because it's ambiguous," and then if you go to the attached award - the draft award, that provision is crossed out in red. (indistinct) putting this submission in, the Commission obviously decided otherwise.

PN144

I'll just point to a few other submissions made by employer groups during that time. The National Bakers Industry Association in a submission, dated 5 March 2009, they raise concerns that the penalty rates were "very business owners." The (indistinct) submission about penalty rates, which obviously include shift allowances, the Commission decided otherwise. (indistinct) Industry Group in a submission dated 6 March 2009, and you might find this interesting, in clause 32.3 of the draft award (indistinct) the current clause there, (indistinct) it's not ambiguous, it's appropriate, it's the pay rate for the Food Industry as a whole.

PN145

One more point about - and this submission was made by the BMIAA, that is 6 March in that position they argued that the number, the amount and the purposes of allowances should be rationalised. They didn't include any provision relating to non continuous shift allowances in the draft award. Despite their submission of the shift allowances there and the despite their submissions about the need to rationalise allowances, the Commission decided otherwise.

PN146

One more point about the ambiguity. In the AFEIs submission at paragraph 11 those - the they note that the NUW written submission was concerned with the dual application of casual loading and shift penalty, and then they seek to characterise the non continuance shift allowance as if it's not a shift penalty. Your Honour, in my respectful opinion, I believe that the non continuance shift allowance is a shift penalty, it's not akin to an overtime payment and in that case the submissions we make related to not - to shift allowances and casual loadings are applicable.

PN147

So in summation, I believe and the NUW strongly submit that there is no ambiguity and there is no uncertainty. On the merits of this issue I seek to rely on my written submissions. One more point though, if the Tribunal does consider that there is ambiguity, I respectfully submit that the provisions should be redrafted specifically to include casual employees to remove all ambiguity (indistinct) employees other than casual employees both employees including casual employees. That's all, thank you.

PN148

THE VICE PRESIDENT: Thank you, Mr Toner, do you seek to file something supplementary in writing, do you?

PN149

MR TONER: Well, I might just wait for the - if the AFEI makes further submissions I will - I will make oral submissions - I might need the written submissions, otherwise I think that's sufficient.

PN150

THE VICE PRESIDENT: You think you've adequately covered those matters including the references, which I can look at following the website and the transcript of this matter to the award modernisation proceedings. Ms Estoesta, you made a similar plea of inability to adequately respond. Do you seek any further opportunity or do you believe you've been adequately able to address the matters?

PN151

MS ESTOESTA: I think I've been able to address the issues, but it just depends on what my colleagues would say.

PN152

THE VICE PRESIDENT: Well, I'd have to give Mr Duc a right of reply. I don't think the AFEI has a right of reply, but I'll defer that if you wanted to supplement your submissions today. I don't see it's related to Mr Duc's reply - - -

PN153

MS ESTOESTA: Yes.

PN154

THE VICE PRESIDENT: It's simply a matter of whether you've been able to adequately address everything - - -

PN155

MS ESTOESTA: I think I have, your Honour.

PN156

THE VICE PRESIDENT: Yes. Yes, thank you. Mr Duc?

PN157

MR DUC: Thank you, your Honour. Just a few brief points. Firstly, let me be clear that the association is not seeking to pay casuals any less. We're not seeking to say that casuals should only get the casual loading for working a shift. Our position is that a casual will get paid casual loading and a shift - 4.5 per cent per shift, 15 per cent or 30 per cent. So we're not seeking to produce those provisions as might have been suggested by my colleagues.

PN158

Secondly, in relation to the previous submissions raised by the NUW, we say that it was quite a hectic time those discussions in relation to the award modernisation process. There have been many, many issues that have been missed by the Tribunal and by the parties themselves, I should say, and that's why there's been so many applications since. In regard to our previous submissions we drafted an award, put an exposure draft in an award out.

PN159

And our exposure draft would not have included these provisions as currently drafted because, your Honour, the provisions with regard to casuals working non consecutive night shifts didn't even arise. Under the awards the casuals previously got only the shift loading. There was never any suggestion in the baking industry that there were extra penalties for casuals not working consecutive shifts. The issues simply never arose from the BMIAAs perspective.

PN160

Thirdly, your Honour, Mr Toner points out that our application would have the effect of amending the award generally and we would submit, your Honour, if your Honour was minded to make the variation that just as we did in the General Retail Award, words could be inserted to the effect that except for - or part from casuals that are in bakery production or words to that effect, to indicate that it's the baking industry that is really affected.

PN161

Two final points, your Honour, and one might actually involve the parties doing some further work. Secondly, or penultimately, your Honour, our affidavits I believe do show that there is ambiguity. The last two paragraphs of both the affidavits state that employers in my association say, "I am uncertain as to what to pay them," meaning staff (indistinct) transition and paragraph numbered 7 says that, "We wish to clarify the above in order to pay our employees correctly." So we say that that does give rise ambiguity.

PN162

Your Honour, lastly, and this might provide some further work, but it is possible that an error has been made in this case. The AMWU in their submission said that the provision has been brought in from the Manufacturing and Associated Industries Award. Now, if this is the case that a provision from an award that is probably in no way similar to the - our industry that I represent, the baking industry, there is a great difference between Metal Manufacturing et cetera, and the baking industry.

PN163

So to that extent we would say that there has been an error if an award clause has been picked up from one award and dropped into another unrelated award holus bolus. And the error is not taking into account previous awards in the industry and seeing does this reflect the provisions that existed for a critical mass in the baking industry awards, and quite clearly that is not the case.

PN164

In answer to my colleagues questions about why there was hue and cry raised at the time if we believe that there were implications for casuals, we would say that alternatively that there should have been a substantial argument. There would have needed to have been a substantial argument and substantial reason put to increase casual entitlements by that degree. Moving from say a casual - casual shift loading of 20 per cent in the New South Wales Bread Award, or 30 per cent in New South Wales Pastry Cooks Award, leaping to first three hours 50 per cent; and the rest at double time, is a substantial increase. If that issue had been raised then certainly we would have addressed it at the time.

PN165

So, your Honour, perhaps, there has been an error that has been made and that error is in picking up award clause, dropping it in holus bolus, into a completely different award that would have required substantial argument in granting that sort of increase. And as Mr Toner suggested and as our current prime minister suggested there was going to be no loss to employees and no loss to employers along the way but this would result in very substantial increase for employees - for employers. Perhaps, my colleagues might like to address that point on error. Thank you, your Honour.

PN166

THE VICE PRESIDENT: Well, I don't know whether we want to proceed in turn and be backwards and forwards. I do have another commitment now. Do you wish to respond to the further points raised in reply on error, Mr Toner?

PN167

MR TONER: If it pleases the Tribunal, just quickly. First of all (indistinct) a quick reply. Firstly, the BMIAA suggested that we could make an exception and have (indistinct) to the baking industry. I submit - I respectfully submit that having a lot of exceptions to all the causes would not do justice to the award moderisation process itself and would defeat one of the objects of the process in section 134(1)(g) to ensure simple and easy to understand award system.

PN168

Secondly, in relation to the matter of there being an error. This is a new assertion by the BMIAA. I don't believe that the application should be a moving (indistinct) if I will and I believe that even if they raise the matter of there being an error that the application should be granted because they've had an opportunity to raise these issues in award modernisation proceedings. Whether (indistinct) matters or whether those matters have been dealt with by the other parties does not necessarily mean that there has been an error. And that's all I have.

PN169

THE VICE PRESIDENT: Yes, thank you, Mr Toner. Ms Estoesta?

PN170

MS ESTOESTA: Your Honour, just really quickly. I support what Mr Toner just said about the insertion of that new clause that Mr Duc just mentioned, but if there is other substantial argument that needs to be made that there was an error I think that something that would be appropriately addressed in 2012 modern award review and not in these proceedings now.

PN171

THE VICE PRESIDENT: Yes.

PN172

MR STORY: Your Honour, if I may? Just very briefly.

PN173

THE VICE PRESIDENT: Mr Story?

PN174

MR STORY: Thank you. Your Honour, just in relation to a few comments that were made about the AFEI submission in sub clause - paragraph 3, sorry - there was an error that there that used the word "consecutive shifts". The AFEI would propose that using the correct word for "successive shifts" leaves open the same interpretation issues.

PN175

THE VICE PRESIDENT: Yes.

PN176

MR STORY: And that's all we need to comment on.

PN177

THE VICE PRESIDENT: Yes.

PN178

MR STORY: Thank you.

PN179

THE VICE PRESIDENT: Yes, I think the parties for their submission in this matter. I will reserve my decision. These proceedings are now adjourned.

<ADJOURNED INDEFINITELY [1.09PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #D1 AFFIDAVIT OF MR MARTIN SAUER, AFFIRMED 25 MARCH PN16
EXHIBIT #D2 AFFIDAVIT OF MARTIN MACCLENNAN, AFFIRMED 19 AUGUST 2010 PN16
EXHIBIT #D3 OUTLINE OF SUBMISSIONS OF MR DUC PN17
EXHIBIT #S1 WRITTEN SUBMISSIONS OF AFEI PN87
EXHIBIT #E1 WRITTEN SUBMISSIONS OF AMWU, DATED 8 SEPTEMBER PN93
EXHIBIT #T1 SUBMISSIONS OF NUW PN114