PN1

JUSTICE ROSS: If I just go through the list of people who I have a note are present on the call, and if you just say yes after your name is read out.

PN2

For Ai Group, Mr Harrington.

PN3

MR HARRINGTON: Yes, I'm here.

PN4

JUSTICE ROSS: Thank you. For ABI, Mr Izzo.

PN5

MR IZZO: Your Honour, I am here, but it's not for ABI, it's for the Victorian Automobile Chamber of Commerce, the Australian Chamber and the Motor Trades Association of South Australia, New South Wales and Queensland.

PN6

JUSTICE ROSS: Thank you. Can you just run through those again for me? ACCI, VACC and the others?

PN7

MR IZZO: The Motor Trades Association of South Australia.

PN8

JUSTICE ROSS: Yes.

PN9

MR IZZO: The Motor Trades Association of New South Wales and the Motor Trades Association of Queensland.

PN10

JUSTICE ROSS: All right, thanks, Mr Izzo. I have Ms Lewis from ACCI.

PN11

MS LAWRENCE: Yes, it's just Ms Lawrence, sorry.

PN12

JUSTICE ROSS: Sorry, Ms Lawrence. They've written it down incorrect. Mr Chesterman from BACC.

PN13

MR CHESTERMAN: Yes, your Honour, I'm here.

PN14

JUSTICE ROSS: Thank you. Mr Crawford for the AWU.

PN15

MR CRAWFORD: Yes, your Honour.

PN16

JUSTICE ROSS: Ms Ismail for the ACTU.

PN17

MS ISMAIL: Yes, your Honour.

PN18

JUSTICE ROSS: Mr Smith for the AMWU.

PN19

MR SMITH: Yes, your Honour.

PN20

JUSTICE ROSS: Ms Burnley for the SDA.

PN21

MS BURNLEY: Yes, your Honour.

PN22

JUSTICE ROSS: With Mr van Rensburg.

PN23

MR VAN RENSBURG: Yes, your Honour.

PN24

JUSTICE ROSS: For ACAPMA, the Australasian Convenience and Petroleum Marketers Association Ms Radwanowski.

PN25

MS RADWANOWSKI: Yes, your Honour, well done.

PN26

JUSTICE ROSS: Thank you. As this is a public hearing, we received a request from Workplace Express to be on the call as well, and Ms de Boehmler is on for them.

PN27

If I can just briefly run through the background on what we have before us and then go through the proposed order for the proceedings. We issued a statement in respect of the application on 6 May, expressing a provisional view that if there was no opposition to the application, we would grant it in the terms sought. There was a timeline for the filing of submissions and yesterday, we received submissions from, I'll describe them as the joint employers. ACCI, VACC and Ai Group.

PN28

Later in the afternoon, we received a submission from ACAPMA, raising two substantive issues in relation to the variation determination. Earlier this morning at 8:30, we received a revised draft determination from the joint employers, making some relatively minor changes to the original form of the variation determination.

PN29

I thought how we would proceed is, presumably, it's you Mr Izzo. I would ask you to briefly go through the nature of the changes captured in the revised draft determination. I would then invite Ms Radwanowski to make an oral submission she wishes to make in support of ACAPMA's submission and then I'd ask Mr Izzo to respond. Then any other parties supporting the applicant to say whatever they wish to say.

PN30

Mr Izzo, we'll go to you?

PN31

MR IZZO: Yes, your Honour. The determination that was filed had two types of amendments that were made to the original determination that was published on the Fair Work Commission website. The first and only real substantive change relates to the coverage clause of the Schedule J. So that the determination that's been filed, there's a clause in it which is clause J.1(d) and that clause initially spoke about the fact that the schedule only applies to employers with respect to those employees who are able to participate in the JobKeeper wage subsidy scheme. So, that was initially made clear that the schedule only operated with respect to those employers and in relation to those employers that were ineligible to participate in JobKeeper.

PN32

Now, we've sought to make an additional clarification which pertains to employees covered in the vehicle manufacturing stream of the award. The vehicle manufacturing classifications are due to be removed from the award on/or about 29 May and that's something that's been publicly known. It's published on the Fair Work Commission website. So, what we've done is made it very clear that the schedule is not intended to operate with respect to employees engaged under sections 2, 3 and 4 of the Award, because those employees will be removed from the award coverage on 29 May.

PN33

The consent position reached by the various parties that support the application did not intend to apply this Schedule J to those employees in what I might describe as the manufacturing stream of the award. And indeed, it would be somewhat difficult if it did apply to these employees because if they are to be moved out of the award, firstly, there's no real merit in making changes with respect to those employees. But secondly, there may be some confusion that arises with respect to what happens to the employment arrangements of those employees if they are the subject of directions under this schedule, but then on 29 May, it ceases to apply to them, and they're covered by another award.

PN34

For those reasons, we just wish to make it clear that the Schedule J did not apply to employees covered by sections 2, 3 and 4 of the award. That is the main change that has been made with respect to the determination. The only other changes that were made, were simply numbering and formatting changes that had been identified in mark-up and they should be uncontroversial.

PN35

JUSTICE ROSS: Thank you Mr Izzo. Can I go to you now, Ms Radwanowski and your submission? As I understand it, you make two substantive points. The first relates to what you describe as the end date of the operation of the proposed schedule. You also attach in section 3, headed Detailed Comments, you have a notation next to clause J.1(b). You set out your submission there.

PN36

There you say, you suggest that this provision match the JobKeeper by having an end date of 27 June 2020 unless removed by the Commission earlier. I take it that's just an error and that should be a reference to the 27th of - let me just - I think you cover it in your main submissions. 27 September, is that right?

PN37

MS RADWANOWSKI: Yes, your Honour. I must apologise for any lack of finesse, and quite frankly for a little bit of bluntness in that submission overall and including such errors. It was prepared on the fly in about two hours, because we only found out about the proposed changes at 2 o'clock yesterday. So my apologies, yes, I did intend 27 September.

PN38

JUSTICE ROSS: And you understand that from clause J.1(b) of the draft determination the schedule operates until 30 June 2020, but the period of operation can be extended on application to the Commission.

PN39

MS RADWANOWSKI: Yes, I do understand. I simply see a benefit for the businesses that would be operating this if we take that application as being served now and actually allow it to end on the 27th of the 9th or withdrawn earlier in line with the JobKeeper.

PN40

JUSTICE ROSS: In relation to your second point, this is around the minimum payment thresholds in clauses J2.2(d) and J2.3(f) of the draft variation determination, and from what you say in your submission, you contend that the effect of these provisions, and I quote:

PN41

In a practical sense renders the whole clause useless in a retail fuel setting.

PN42

And you set out your reasons why you say that in section 3 of your submission. Is there anything you wish to add to that material?

PN43

MS RADWANOWSKI: No, there's not in that - but I would like to add that that doesn't mean that we're opposed to the concept or the rest of the determination as it stands as a whole. It just appears, as I said, from a very quick viewing at the time, that the intention is to not allow a reduction of more than 75 per cent of the employees' original guaranteed or standard hours. And if that is the intention, that it is not achievable with the thresholds in place in a practical setting.

PN44

JUSTICE ROSS: All right. Can I ask whether ACAPMA has had any involvement in discussions with the unions or the ACTU regarding the variation of this award to introduce flexibilities?

PN45

MS RADWANOWSKI: No, we have not. As I said, this came to our attention at 2 pm yesterday.

PN46

JUSTICE ROSS: So no one from your organisation has had any contact with any of the parties involved in these proceedings about possible changes to the award?

PN47

MS RADWANOWSKI: No.

PN48

JUSTICE ROSS: All right. Was there anything else you wish to say?

PN49

MS RADWANOWSKI: No, there isn't. Thank you, your Honour.

PN50

JUSTICE ROSS: Might go to you, Mr Izzo.

PN51

MR IZZO: Thank you, your Honour. I think to address and to respond to the submissions that have been raised by ACAPMA, there are probably two primary matters that I would like to deal with. The first is to just briefly address the extraordinary circumstances that the vehicle repair, services and retail industry finds itself in, because that is relevant to how we deal with the present application; and the second is to address one particular clause of the schedule, and that's the clause pertaining to a reduction in hours of work, because that does appear to the primary focus of the ACAPMA submissions. I would like to deal with that clause in response to submissions.

PN52

Before I do that, I would just like to note that we filed two sets of joint submissions supporting the application. The first set of submissions, if I can call them that, were filed on 5 May as part of annexure B to the application; the second set of submissions you've already identified were filed on 7 May. We rely on those materials and obviously won't be repeating them.

PN53

If I could just refer to briefly the scenario the vehicle repair, services and retail industry finds itself in before I come to the actual reduction in hours clause. The best way to describe this industry is that it is an industry in crisis. Our written submissions that were filed on 7 May cited data from the Federal Chamber of Automotive Industry, which has - that organisation has tracked new vehicle sales since 1991.

PN54

I'm not going to repeat the data we filed yesterday, but there is some additional data that comes from those web sites we referred to in our submissions that tells quite a compelling story, and that is this: firstly this is an industry that was already facing sharp decline before anyone in mainstream Australia had heard of the term novel coronavirus. The annual sales for new vehicles in 2019 were almost eight per cent down on yearly sales from the previous year, that is 2018. And so the 2019 sales figure, which is about 1,063,000 new vehicles sold, was in fact the lowest number of annual sales that had been tracked by the Federal Chamber of Automotive Industry since 2011.

PN55

So what we have here is an industry that appears to feel the early brunt of economic headwinds when the national economy faces a level of stagnation, or the national economic position declines, it's apparent this industry gets particularly exposed. And what we had was by the time COVID-19 was prevalent, the industry was already under significant strain.

PN56

Sales in January, February, March and April 2020 have all underperformed compared to the already very poor results for 2019. What's worse, our submissions now identify that the position has dramatically changed, and there is a 48.5 per cent slump in sales in April 2020 compared to April 2019. So each month of this year sales have slumped even further from their preceding months. The industry is obviously doing it very tough, and employers clearly need to take steps to protect the viability of their businesses, or else the only other option is simply to shut up shop. That's the scenario we face as we bring this application before the Commission.

PN57

If I can turn to the reduction in hours clause, because that is the clause that appears to have effectively borne the focus of the criticisms by ACAPMA. At clause J.2.2 of the determination is probably the most complex clause in the schedule, and it should be. It involves the unilateral reduction of employee hours for a limited period to enable employers to respond to falling demand for their services and the corresponding decline in revenue which I've already briefly alluded to earlier.

PN58

It is that profound step to take to put this type of provision in a modern award, and it is the type of step that has not previously been seen in the award framework before COVID-19. But the parties consenting to the application obviously accept the dire consequences that are faced by these industries - by this industry - and that these dire consequences warrant these measures.

PN59

The clause enables full‑time employees to have their hours reduced by what represents up to 40 per cent of their normal load, whilst part-time employees can have their hours reduced by up to 25 per cent. That's dealt with by clauses J.2.2(b) and J.2.2(c). The basis for limiting the reduction permissible to a specific percentage of a number of hours is naturally directed at protecting the living standards of the affected employees.

PN60

We accept that employees need to keep earning in this period, and we accept there needs to be some incentive to work, or else if you reduce hours too significantly or payments too significantly, employees may simply look to seek welfare instead of forming part of the productive economy.

PN61

JUSTICE ROSS: Can I just go to that. I note at para 4.22 of your written submission filed yesterday you set out what the minimum floors are designed to ensure. Just on that last point, do I take it that that minimum floor has - one of the reasons motivating that is that absent the floor, some employees may be better off on JobSeeker payments than they would be attending for work.

PN62

MR IZZO: That is a consideration. I don't think we entirely would accept that position in every case, for this reason, your Honour. Which is, that once you start accepting JobKeeper - sorry, once you're on JobSeeker, that is the unemployment benefit.

PN63

JUSTICE ROSS: Yes.

PN64

MR IZZO: And you start earning money, there is a scale of which the JobSeeker payments reduce by reference to how much money you're earning. So, you don't automatically become disentitled to JobSeeker, but very quickly, yes there will be a disincentive to work too many hours, because you will see your JobSeeker payments reduced.

PN65

It's not necessarily that there is no point working, but that the value of the unemployment benefit and the attractiveness of it, it starts to decline once getting hours of work. Employees may well make the choice, well why would I go to work, when alternatively, I can seek JobSeeker and get a similar amount.

PN66

JUSTICE ROSS: Yes.

PN67

MR IZZO: That has influenced the choice of the minimum floor, most certainly.

PN68

JUSTICE ROSS: So really, the two elements reflecting the - or two of the elements you've covered thus far, one is directed at protecting the living standards of the employees concerned in circumstances where the provision entitles an employer to unilaterally reduce employee hours. You say the constraints on that power are necessary to protect the living standards of the relevant employees and to provide some incentive to work. That second point, the incentive to work arises from the interaction between these provisions and the JobSeeker benefit?

PN69

MR IZZO: Yes, that's correct.

PN70

JUSTICE ROSS: Sorry to interrupt; keep going.

PN71

MR IZZO: No, no, and to the extent not evidence, those motivations link very clearly with the modern award's objective with respect to the first motivation about the living standards of employees. That's obviously a very key facet of section 134(1)(a) which talks about the relative living standards and needs of the low paid. When we talk about needing some level of incentive to work or not making the reduction such that employees see no point in presenting to work, then you start to consider other elements of the modern award's objective, which would include section 134(1)(c) which talks about the need to promote social inclusions for increased workforce participation.

PN72

Also relevant is 134(1)(f) which talks about the impact of any exercise of modern award powers on business because there will be an impact on business if employees decide not to present for work. Also, at a more incremental level, section 134(1)(h) is likely to be impacted which talks about the impact of any exercise of powers on employment growth, inflation, sustainability, performance and competitors' competitiveness of the national economy. It's not in the economy's interests to have people sitting at home on unemployment benefits if they could be in the workplace. So, we want to motivate people to enter the workplace. Those motivations fit very cleanly and very directly with the modern award's objective.

PN73

JUSTICE ROSS: Thank you.

PN74

MR IZZO: There is a more - you'll note that the reduction in hours as permitted with respect to full time employees, is different to the reduction for part time employees. The full time reduction is effectively up to 40 per cent of their hours, as I mentioned. Whereas, part timers, it's a lower reduction of up to 25 per cent of their hours. That just recognises that part time workers are likely to be working lower loads to begin with. So again, when you talk about living standards, there's probably a point at which reductions should reasonably go no further. That's why a different percentage has been identified for part time employees.

PN75

If I could now come to the insertion of the particular safeguard in this schedule which has caused most focus from ACAPMA, and that is the minimum floors. There are three minimum floors. They are a minimum floor of $1115.70 per fortnight for full time employees at levels one to five. They are $1500 per fortnight for trade persons, engaged at the T1 and T2 levels under the award, and $836.38 a fortnight for part time employees that earn about that amount before the introduction of the Schedule.

PN76

As your Honour has pointed out, we've outlined the rationale for each of the minimum floors already in our 7 May submission. In addition to what I've already said in response to your questions this morning, I don't propose to repeat them. What I do wish to engage with is ACAPMA's submission that the effect of these minimum floors is to prevent any meaningful reduction of hours. ACAPMA, as your Honour has identified, really dispatches the minimum floors into the category of being useless.

PN77

ACAPMA is particularly focussed on the plight of a part time employee earning $904 per fortnight over 21 hours per week. ACAPMA has identified that this particular part time employee's hours, that they've provided as an example, could only be reduced by less than an hour under Schedule J making the hours reduction mechanism in their view, meaningless. I think at the outset, one can't argue with ACAPMA's views with respect to that particular hypothetical employee.

PN78

However, the difficulty with their approach is that it focusses on extremes. What it ignores is that the task of varying modern awards involves what's been widely referred to as a broad evaluative judgement. This is a point that's been made time and time again in the authorities. One of the most recent authorities that outlines that, I'll just refer to it for the Bench's reference. It's Construction Forestry Maritime Mining and Energy Union v Anglo American Australia Pty Ltd (2019) FCAFC 109 @ paragraph 107.

PN79

Firstly, we have to recognise that the part of - - -

PN80

JUSTICE ROSS: Mr Izzo.

PN81

MR IZZO: Yes.

PN82

JUSTICE ROSS: I'm sorry, you just dropped out there for a moment, after you finished reading out the authority.

PN83

MR IZZO: Sorry. So, firstly, we have to recognise that the function that the Commission exercises does involve a broad evaluative assessment. But what's more, the Commission is often required to set a minimum safety net for a whole industry. Now, this goes beyond just exercising evaluative judgment. Rather, it necessarily involves an exercise in aggregation. This is a critical point that's often overlooked in cases dealing with modern award variation. It sometimes conveniently assumes that modern award provisions operate fairly for all employers and all employees in all occasions.

PN84

This type of objective or goal is actually illusory. In fact, it's impossible to achieve. Measures designed to assist one employer will have slightly different effects on other employers covered by the same award, in slightly different circumstances. And the same applies to employees' protection. It's not possible to regulate for every specific circumstance.

PN85

But what we have, is we have a modern award's objective that says that there is a need for a simple and stable modern award framework. What that has done is it's dictated, and we say quite rightly, that the Commission will often set conditions for an industry at large or occupations across the whole country. This is uncontroversial, it's reflected in the large number of industry and general occupational awards we have. But by setting conditions for industries at large, the Commission is, with the greatest of respect, it's (indistinct) some extremes will always arise.

PN86

What we say about that is this should not deter the Commission from acting in a quick, informal and unnecessarily technical way to deliver a safety net that meets the challenges of the time as well as ensuring the Commission acts in a manner consistent with the obligations under section 577 of the Act.

PN87

So, whilst the example of the employee working (indistinct) produced by ACAPMA might product a relatively minor outcome, in that hypothetical example, there's a range of other matters or other examples that can't be ignored. For example, if you have part time employees working a 30 hour week over four days, a full 25 per cent reduction can be implemented using the minimum floors that are outlined in the schedule. For part-time employees already earning below the $836.78 minimum floor a full reduction of 25 per cent is also available with respect to their hours. For employees earning over award amounts, whether they be full‑time or part-time, again it's likely that the full percentage reduction contemplated can be achieved.

PN88

And even in ACAPMA's example of where you have a full‑time employee on award rates, in that circumstance, and I think ACAPMA points this out at their note at C - bear with me - at their note at C2, they identify that even for an employee on the award rate earning the amount that they've set out, almost the full benefit of the reduction contemplated is available. So in all of the cases I've just referred to, schedule J provisions will have material work to do.

PN89

And then there are going to be many cases that fall between the four scenarios I've just put forward and the hypothetical example given by ACAPMA. What we say is that when you balance the need to act in response to this industry's dire circumstances, when you balance that against the need for further protection, the overall balance that has been achieved in this schedule does land at a fair and relevant safety net on an overall basis.

PN90

And if the Commission was looking for any comfort in that regard, the uniform support of so many industrial parties with involvement in the industry should provide additional comfort in this regard. In that regard I note that discussions have been ongoing for over a month between the large number of industrial parties, and that the consent position reached is the product of iteration after iteration of drafts. So the consent position is not one that has been arrived at lightly or without significant consideration.

PN91

I do note the representative from ACAPMA's comments that ACAPMA was unaware of discussions pertaining to this award. I would simply just wish to note for the sake of completeness and so the Commission is aware of the full circumstances, there has been discussions at an industry level between employer associates and the ACTU that took place during the course of late March 2020 where a representative of ACAPMA was present, with respect to measures that were being adopted in response to the coronavirus crisis.

PN92

There were several meetings, and there was an ACAPMA representative present at that. Whilst the vehicle award itself was not discussed, it was quite clear to the participants in those meetings that separate discussions would be taking place with respect to award variations, and ACAPMA had not involved itself in the separate discussions.

PN93

So I don't mean to say that critically, but I do need to just correct the record in that regard, that there have been discussions where it would have been apparent to ACAPMA that award variations were being ventilated between the industrial parties in separate off-line discussions. So that's what we would like to say about the reduction in hours clause and why we say it does achieve a fair and relevant minimum safety net with respect to the current coronavirus crisis.

PN94

Your Honour, I am prepared to address the other clauses that we would propose to be varied should that be necessary, but I don't understand them to be necessarily opposition for that, so I'm in your hands as to whether you would like me to briefly address the other clauses.

PN95

JUSTICE ROSS: No, that's fine, Mr Izzo. I think it was clear from Ms Radwanowski's earlier comments that they were confining themselves to the two issues that they had raised.

PN96

MR IZZO: So if I could then come to the next issue, which relates to the criticism about the operation of the schedule. The schedule operates to 30 June 2020. I think it has been described as being not worth the effort, which is a little disheartening for those that have spent a lot of time trying to get to a consent position. I don't accept that criticism, nor do those that represent.

PN97

It needs to be acknowledged that this is a crisis that changes its features at a rapid pace. And indeed in that way distinguishes itself from other financial crises that have perhaps an initial crash and then a period of stagnation. Because we are dealing with health crisis, the type challenges we are facing do change week to week. And indeed the National Cabinet is meeting today. We are expecting or hoping to see a roadmap for the lifting of restrictions potentially in coming weeks. It's the case that in four weeks the types of challenges faced might be very different to the ones presently arising.

PN98

What really important here is that there is an ability to extend or vary the schedule if need be, and that's already contemplated in the award schedule. But furthermore, I would like to formally record the fact that all parties to the consent position have committed to reconvene in the week beginning 30 May 2020 to discuss the expiry of the schedule and whether any application should be made to extend the schedule's operation.

PN99

So it's not that this schedule will simply be left on the vine, so to speak, to expire; the parties have committed to have active discussions in that regard to ensure that if the need arises, it can be extended; and hopefully the other parties will agree that that is the case once I conclude.

PN100

The only other thing that's probably important to note at a general level about the ACAPMA concerns is that if ACAPMA is of the view that some additional measures should be put in place, there is no hurdle to ACAPMA filing a further application to vary the award. Any further application could be considered by all parties and respond to on its merits. And it is really important in these unprecedented times that the Commission affords flexibility to all parties to apply for award variations as needed, to ensure that the award system is agile enough to respond to the COVID-19 challenges.

PN101

And to the Commission's credit, the Commission has been extremely responsive in dealing with these types of applications. I shudder to say, but that expedited hearings have become commonplace. So there is no reason Commission can't vary this award in accordance with the consent position advance today. There's no reason that can't be done, but then a reconsideration of further application can always arise in due course.

PN102

And that's obviously the case if evidence emerges that some of the variations that are made under this schedule aren't operating as intended or don't do what's needed for the industry. So it's not the case that once determined, this is the only solution that can be considered to the COVID-19 crisis.

PN103

I think they are broadly the matters which we wish to address, your Honour, in response to the ACAPMA submissions. We certainly commend the schedule to the Commission and are firmly of the view that the consent position as advanced should be approved as expeditiously as possible.

PN104

JUSTICE ROSS: Thank you, Mr Izzo. Can I invite firstly Ai Group, then ACCR, then the ACC to indicate whether they wish to say anything, and then I will go to the unions. Anything from you, Mr Harrington?

PN105

MR HARRINGTON: We support Mr Izzo's submissions. I don't wish to add much more than that, other than that Ai Group understand some of ACAPMA's concerns regarding the content of the COVID-19 schedule, but it needs to be appreciated that the determination, which is included in our joint application, represents the result of a very, very lengthy negotiation process between ourselves and the other relevant parties to these proceedings.

PN106

Consent was only reached on the basis that the wording of the schedule was as reflected in our application. The submissions which ourselves, (indistinct) and the ACC made in support of the application outline an industry in distress. The interests of our members are not assisted by drawing out this process and longer. Ai Group's view is that the benefits including this schedule in the award now, when it's needed, outweigh any benefits which may come on either side by further delay.

PN107

The determination represents, in our view, the best result which can be achieved today. There is already a mechanism in the schedule for extending its application if it's needed, as had already been said. The parties also retain the capacity to reach agreement to change (indistinct) by way of any contractual variations. So we urge the Commission to make the variations proposed and (indistinct) real value to (indistinct) which needs relief sooner rather than later.

PN108

JUSTICE ROSS: Thank you. Ms Lawrence, anything you wish to add?

PN109

MS LAWRENCE: No, your Honour, nothing further from ACCI.

PN110

JUSTICE ROSS: Thank you. Mr Chesterman?

PN111

MR CHESTERMAN: No. I would support the submissions presented by Mr Izzo. But I would say, listening to Mr Harrington, that we believe that it's the best result that has been achieved, given the protracted negotiations with the unions and the ACTU. And we've reached a consensus position, and we would like to move forward.

PN112

JUSTICE ROSS: Okay. Thank you, Mr Chesterman. Ms Ismail?

PN113

MS ISMAIL: Thank you, your Honour. I will keep my comments brief. The affiliated unions on the line may wish to add to what I have to say after I've finished. The industrial parties have been encouraged by the government and by the Fair Work Commission to engage in discussions where changes to employment laws are necessary to deal with the impact of COVID-19 on workers.

PN114

Obviously changes to the minimum employment standards are extremely significant. They have a very significant impact for workers on their livelihood, on their ability to put food on the table and pay the rent, and they have a flow-on impact in terms of the minimum floor for the purposes of the better off overall test in relation to the enterprise agreement variations.

PN115

These are not discussions that have been entered into lightly. Where we have received requests from employers to make changes to the safety net, we have firstly sought to be satisfied as to the necessity for the changes. That is a crucial point, and the employer reps on the line will testify to the fact that we had lengthy discussions about the need for these changes, and we needed to be satisfied that they were absolutely necessary to deal with the impact of the COVID-19 crisis.

PN116

Once we were satisfied as to necessity based on the information that the employers provided us, and of course the unions' observations of what's happening in workplaces themselves, we then were prepared to have a discussion about what changes were necessary and what those changes should look like.

PN117

Our position has been very firm. The protections for employees in these - any changes that have been made have to at least be consistent with JobKeeper, the JobKeeper provisions in the Fair Work Act. The key aspect of those protections are that any directions or requests made under the schedules must be reasonable in all the circumstances; they must be necessary to save jobs or to otherwise deal with an urgent and acute impact of the COVID-19 crisis; there must be access to arbitration for disputes; a minimum wage guarantee where reduction of hours is part of the schedule; and the provisions must be strictly time-limited.

PN118

In relation to the time limit, our preference was for this to be a four-week schedule, given the significant impact on employees and the fast-moving nature of the situation in the industry, as Mr Izzo alluded to. We agreed to 30 June; and we agreed, as Mr Izzo rightly pointed out, to have a discussion in the week of 30 May to talk about whether or not an extension was needed. And of course we would be happy to invite ACAPMA to participate in those discussions if they wish to be part of them.

PN119

We've taken the approach of direct discussions between the parties, as we've been encouraged to do, has been the most effective way forward to try to reach a consent position before the matters come to the Commission. We believe that the schedule strikes an appropriate balance between the need for assistance and the protection of workers' rights, and we haven't agreed to this lightly. We've agreed to it because we believe it's necessary to save jobs.

PN120

I just wanted to turn very quickly to some of the things that ACAPMA raises in their submissions. One of the key things was an assertion that the goal of the changes are to ‘foster and allow for flexibility’. That is not the goal of this variation. The goal of these variations is directed solely at saving jobs as an alternative to redundancies. As Mr Izzo has outlined, this is an industry in crisis, and there is a need for some temporary, restricted changes with appropriate safeguards in place to allow people to keep their jobs as an alternative to losing those jobs.

PN121

In relation to the minimum payment floor, our position has been that people should not earn any less than JobKeeper, which is $1500 a fortnight. We have been prepared to talk about a different floor where that is more appropriate, and that floor being JobSeeker. And the position has been outlined by your Honour and by the employer parties that workers should not be better off on welfare than they are at work, and that was the justification for including a minimum payment guarantee.

PN122

The other comment that I would have to make in relation to the submissions advanced by ACAPMA is that there was no information about the necessity for the removal of the minimum wage guarantee or the extension of the schedule. We have no information about the impact on the sector. Our understanding is that significant numbers of employers represented by ACAPMA are covered by enterprise agreements. There's also a high use of casuals, and that a number of employers in the sector will be eligible for the JobKeeper allowance, and therefore the flexibilities that are afforded under the Fair Work Act.

PN123

So we're not sure - we don't have anywhere near enough information about necessity for us to form a judgement, but as has been outlined, with extensive discussions and negotiations we've reached a position that we believe strikes a reasonable balance, and we support the schedule in its current form ‑ ‑ ‑

PN124

JUSTICE ROSS: Thank you, Ms Ismail.

PN125

MS ISMAIL: ‑ ‑ ‑ I’m not sure if any of the affiliates wish to add anything. Thank you.

PN126

JUSTICE ROSS: Thank you. Mr Smith, do you wish to add anything?

PN127

MR SMITH: No, your Honour. I think Ms Ismail has covered all the positions. Thank you.

PN128

JUSTICE ROSS: All right. Thank you. Ms Burnley?

PN129

MS BURNLEY: Nothing further from the SDA. We support what the ACTU has put before the Commission today.

PN130

JUSTICE ROSS: Thanks, Ms Burnley. Mr Crawford?

PN131

MR CRAWFORD: Nothing further, your Honour. The AWU supports the variations and the submissions of the ACTU.

PN132

JUSTICE ROSS: Thank you. Can I then go to you, Ms Radwanowski. Is there anything that you wish to say in response?

PN133

MS RADWANOWSKI: Thank you, your Honour. Yes. Look, I understand that the schedule as it's presented is a negotiated position, and as I said, apologies for the lack of finesse in the submission that was put forward. At no point was ACAPMA trying to scupper this particular submission at all, I was simply pointing out that for our particular industry, which employs quite a few permanent part-time employees and does not have the level of enterprise agreements that was actually intimated earlier, most are in fact under the award directly.

PN134

The majority of those part-time employees are employed for 21 hours or less. For those, this would not offer a measure for the reduction of hours. Those businesses are in extreme distress, suffering downturns in volumes of more than 50 per cent, as well as downturns in the in-store areas. We have - the announcement of JobKeeper and its coverage levels - been receiving extensive queries from our members as to how to manage, effectively, the reduction of hours to keep the doors open and to keep connected with their staff, and we're working with them.

PN135

Our submissions to this panel was to have that considered, because as noted previously, we haven't been involved in the discussions prior. So it seemed from an outside view that if the intention was to allow up to a 40 per cent reduction and up to a 25 per cent reduction in the full‑time and part-time, that simply stating that and moving along on that, that that methodology would be a more elegant and actually useful way of looking at reductions of hours, particularly when you get, as I said, it's the R4 level that is our industry.

PN136

The minimum hours that someone would need to be working to hit the 25 per cent reduction in that part-time space would be 26 hours. And as I said, that's (indistinct) more than the majority of our part-time employees, so it did stick out to us as for our particular situation. I was not intimating at all that the clause itself was ineffective everywhere. I have no information on how it would actually apply everywhere else. But for our particular situation and for our members that have been struggling, it would have very little effect.

PN137

That, however, has to be read in terms of the overall commitment that was put at the very beginning of the submission which is the goal and the totality of it, is something that we are supportive of.

PN138

We certainly don't want to stand in the way of it and we don't want to draw this process out any further, though we will be engaging with all of the other parties on that review process as invited.

PN139

JUSTICE ROSS: Ms Radwanowski, can I just clarify one thing, you mentioned that I think a significant number of your members had had a 50 per cent reduction in their revenues. Is that what you indicated?

PN140

MS RADWANOWSKI: In fuel sales. So, in the fuel volumes, have gone down by 50 per cent.

PN141

JUSTICE ROSS: Right, and so do I take it that a significant number of your members would be eligible to apply for JobKeeper?

PN142

MS RADWANOWSKI: Yes, there are large numbers of the businesses within the industry that are eligible for JobKeeper. However, there are also large numbers of visa restricted or non-permanent residents that are engaged within the industry, and to those employees, no such flexibility options are available and no JobKeeper support is available for them.

PN143

That has been a struggle for certain pockets of our industry in terms of keeping the doors open, keeping engaged with those staff who are (indistinct) because they are not selling dresses, we are (indistinct). There's a certain level of skill and planning involved with that. In the face of such downturns, there's been quite a difficult pressure.

PN144

JUSTICE ROSS: All right, thank you. Is there anything anyone else wishes to say?

PN145

No. All right then, we'll adjourn and reserve our decision in this matter. We'll endeavour to hand it down as soon as we're able to.

PN146

Thank you all for your attendance.

PN147

MS ISMAIL: Thank you.

PN148

MR IZZO: Thank you, your Honour.

PN149

MR CHESTERMAN: Thanks, your Honour.

ADJOURNED INDEFINITELY [10.51 AM]