PN1

VICE PRESIDENT HATCHER: Good morning, I'll take appearances. Mr Clark and Mr Fox, you appear for the Real Estate Salespersons' Association of South Australia?

PN2

MR R CLARKE: Sorry, your Honour; it's Ralph Clarke here.

PN3

VICE PRESIDENT HATCHER: Yes, you and Mr Fox appear for the Real Estate Salespersons' Association of South Australia?

PN4

MR CLARKE: Correct.

PN5

VICE PRESIDENT HATCHER: Mr French, you appear for the Australian Property Services Association?

PN6

MR T FRENCH: That's correct, sir.

PN7

VICE PRESIDENT HATCHER: Mr Ward and Mr Collits, you appear for the Real Estate Employers' Federation and the Real Estate Employers' Federation of South Australia and Northern Territory, together with Mr Wilcox and Ms Bisbal. Is that correct?

PN8

MR M WARD: Together with Mr Wilcox.

PN9

VICE PRESIDENT HATCHER: Mr Lilleyman and Mr Moss, you appear for the Real Estate Employers' Federation of Western Australia?

PN10

MR J LILLEYMAN: Yes, sir.

PN11

VICE PRESIDENT HATCHER: Mr Clarke, let's just deal with the - just give me a second - the statements of evidence. There is a witness statement made by you; do you want to tender that?

PN12

MR CLARKE: Yes, your Honour - do you mean Mr Fox's statement?

PN13

VICE PRESIDENT HATCHER: No, well, Mr Clarke's document is described as a witness statement.

PN14

MR FRENCH: We took it as a submission.

PN15

VICE PRESIDENT HATCHER: This says, "Witness statement", on it. It says, "Witness statement and submission", but I think if I recognise there is a cross-over between submissions and witness statements in this material so I'll mark that as exhibit 1.

EXHIBIT #1 WITNESS STATEMENT AND SUBMISSION OF MR CLARKE

PN16

VICE PRESIDENT HATCHER: Then there is - I think we'll call it a statement - of Nathan Fox.

PN17

MR CLARKE: Yes.

PN18

VICE PRESIDENT HATCHER: You tender that so I'll mark it exhibit 2.

PN19

MR WARD: Your Honour, we've filed objections in our material to this statement. Do you want to deal with those now?

PN20

VICE PRESIDENT HATCHER: I think, Mr Ward, that the Bench would readily recognise that a lot of this is submissions rather than evidence.

PN21

MR WARD: If the Commission pleases.

PN22

VICE PRESIDENT HATCHER: So I propose to admit it on that basis and obviously submissions can be made about any evidentiary weight which might be attached to those aspects of the document.

PN23

MR WARD: Thank you, your Honour.

EXHIBIT #2 WITNESS STATEMENT OF NATHAN FOX

PN24

VICE PRESIDENT HATCHER: Mr Clarke, there is also a document that's said to be witness statement of Stephen D. E. Finch.

PN25

MR CLARKE: Your Honour, that was tendered in evidence in the 2016 case in November in Sydney before the Full Bench on the award, the Australian Property Services Association, together with some other documents. The witnesses weren't present to have their evidence cross-examined. However, the Bench at that time undertook to accept the documents and place what weight they chose to give it and was left on that basis. The reason for submitting it today is basically this, your Honour: his circumstances in 2011, during the great financial crisis at that time, we say is very analogous to the crisis that's facing the real estate industry during the great pandemic problems that the whole of Australia is currently experiencing and of course much of the world. The impact - basically what Mr Finch's evidence was during the GFC was effectively on (indistinct) credit salesperson told by his employer that he needed to go on commission only if he wanted to retain his job, which he did for about 10 months, but found that he was earning less than the federal minimum wage and on top of that was meting the cost of his own vehicle.

PN26

VICE PRESIDENT HATCHER: Well, that's interesting but we've changed the award since then so what's the relevance of that?

PN27

MR CLARKE: The same situation could occur today, sir, with people who are debit credit people. They could be told to go into commission only because their earnings at some point - probably 12 months in the three years that did apply to being told to go commission only or lose your job - they would quality and then for the next 12 months before they would be, if they don't earn enough be forced to go back to debit credit, they could end up like Mr Finch; that is for 12 months earn less than the federal minimum wage.

PN28

VICE PRESIDENT HATCHER: That can happen with or without a pandemic, can't it?

PN29

MR CLARKE: Yes, but of course the reality of it boils down to with the pandemic and the restrictions that were placed on the real estate industry - and it's recognised by the national wage Full Bench with annual wage Full Bench when the wages for this industry has been - won't be until November of this year. So they recognise there are difficulties with respect to people wanting - you know, the uncertainty in the market in terms of whether they'll have a job tomorrow, to be able to afford to take on a mortgage.

PN30

VICE PRESIDENT HATCHER: Yes, all right.

PN31

MR WARD: Your Honour, can we be heard on this?

PN32

VICE PRESIDENT HATCHER: Just hold on a sec, Mr Ward - these other documents that - there are some other documents about JobKeeper and the like, I think.

PN33

MR CLARKE: The other documents that are attached both to Mr Fox's - - -

PN34

VICE PRESIDENT HATCHER: That's attached to Mr Fox's submissions? All right.

PN35

MR CLARKE: (Indistinct) might relate to copies of - if you Google JobKeeper and ATO you come up with a number of inquiries from debit credit people about them being debited with the JobKeeper payment against their future commission earnings and their concerns in trying to get advice from the ATO. It's only put to you, sir, and the Full Bench, to in a sense point out that the concerns raised by Mr Fox in his application and in his witness statement - it is not just Mr Fox who has concerns about it but it's far more widespread, not only in this state but elsewhere as well.

PN36

I understand the employers' point. It's unsourced. Who knows what, whether they asked the right questions and get whatever the information is back. But what it does point out is there is a lot of confusion amongst the workforce but what is definitely clear is that a number of them have been told by their employers that the JobKeeper wage subsidy is being - as part of their wage - debited against future Commission earnings and also, of course, the extracts from memos that have been sent out by REEF to its members, which also include statements that they believe on legal advice that employers are free to be able to get the wage subsidy and also (indistinct) via the future commission earnings of their debit credit staff.

PN37

VICE PRESIDENT HATCHER: All right - Mr Ward.

PN38

MR WARD: Which one do you want me to address, your Honour?

PN39

VICE PRESIDENT HATCHER: I think the documents - it's a bit hard following because I have all this in electronic form but I think the documents Mr Clarke referred to actually attached to Mr Fox's statement (indistinct).

PN40

MR WARD: Let me deal firstly with what appears to be screenshots of an online chat community which I take it is located on a website associated with Australian Taxation Office. We would object to the tendering of that material on a variety of bases. The first is this: this, with respect, is actually quite dangerous material for the Commission to receive. It is comments made by unknown persons receiving answers by other unknown persons. There is no way of understanding any of the circumstances of these persons. There is no way of understanding anything in relation to the validity or truth of anything that's being said by these persons or the circumstances they find themselves in.

PN41

It's the sort of material, with respect, that could have absolutely no probative value in a case of this nature and we would - - -

PN42

VICE PRESIDENT HATCHER: I think Mr Clarke just said that he advances it as evidence of confusion and uncertainty. Is that right, Mr Clarke?

PN43

MR CLARKE: Yes, there is confusion and the fact is that employees who say they are real estate sales people have been told by their employer - - -

PN44

VICE PRESIDENT HATCHER: It can't be evidence of that, Mr Clarke, can it?

PN45

MR CLARKE: Sorry?

PN46

VICE PRESIDENT HATCHER: It can't be evidence of that, can it?

PN47

MR CLARKE: Well, it's - look, I accept in a strict rule of evidence you're quite right and the employer's quite right, except the - - -

PN48

VICE PRESIDENT HATCHER: It's not even applying a strict rule of evidence. It's applying some rule of evidence which is remotely fair and sensible 3evideence. I mean, this is just unnamed people saying they might have been told something by some other unnamed person, isn't it?

PN49

MR CLARKE: Well, your Honour, REEF could simply clear that up by saying that whether or not they know that their employer members or a number of them or some of them or one of them are actually doing just what those people have been saying, you know, that - - -

PN50

MR WARD: Your Honour, my client doesn't know who (indistinct) is; they don't know who KL21 are. I'm not sure where that takes us.

PN51

VICE PRESIDENT HATCHER: I think we'll admit the documents but on the basis that they can only be evidence of persons who say they work in the real estate industry making inquiries of the ATO about JobKeeper and associated entitlements. But I don't th8ink, Mr Clarke, you can say much more about it than that, can you?

PN52

MR CLARKE: Not really, sir, except we do say that it is circumstantial evidence of concern that it's not just related to Mr Fox.

PN53

VICE PRESIDENT HATCHER: It'll be admitted on the limited basis I've identified. Mr Ward, this statement made by - what's his name?

PN54

MR WARD: Mr Finch.

PN55

VICE PRESIDENT HATCHER: Mr Finch - - -

PN56

MR WARD: Your Honour, I think the real challenge with Mr Finch is simply this: to take your Honour's point up, since Mr Finch gave his evidence about circumstances that occurred in 2011, in relation to commission-only, the award has materially changed and it's materially changed in a varie6ty of very salient ways. The first one is this: the entry criteria for commission-only has materially changed. The level at which the mitre is set has been materially changed and the requirements for maintaining a person as commission-only has materially changed.

PN57

We do not know - we can only speculate - if Mr Finch were working today whether or not he would even qualify for commission-only, given the fact that the award has not materially changed. So his evidence can have no meaning to the operation of the award and commission-only employment as it operates today. His evidence can have no probative value for somebody confronting the current circumstances of a pandemic, of government-instituted measures to control the pandemic and their flow-on effect in terms of impairing or shutting businesses and his evidence very clearly has nothing to do with JobKeeper. So in that sense we say there is no effective utility in admitting his evidence because it is so irrelevant that it could be of no probative value and no weight in those proceedings.

PN58

VICE PRESIDENT HATCHER: Mr Clarke, I won't admit the statement of Mr Finch. I just don't think it's relevant to the current proceedings. So that's the evidence form your side, Mr Clarke?

PN59

MR CLARKE: Beg your pardon, sir?

PN60

VICE PRESIDENT HATCHER: That's all the evidence from your side?

PN61

MR CLARKE: Yes.

PN62

MR WARD: Your H0onour, I don't think it is. I think there is some extracts from some screen shots of material REEF sent its members.

PN63

VICE PRESIDENT HATCHER: Where is that?

PN64

MR CLARKE: What's wrong with it?

PN65

MR WARD: That material hasn't been discussed or marked or anything. We don't object to that material. It just hasn't been marked, that's all.

PN66

VICE PRESIDENT HATCHER: I'm just trying to find it.

PN67

MR WARD: There is also a copy of a submission to a senate inquiry as well.

PN68

VICE PRESIDENT HATCHER: I think that's, again, an attachment to Mr Fox's statement.

PN69

MR CLARKE: Yes, and it's duplicated also - - -

PN70

MR WARD: We don't object to either of those documents subject to what you say about them.

PN71

DEPUTY PRESIDENT ASBURY: Mr Ward, it's Deputy President Asbury. Sorry, the full version of that is also appended to your material, isn't it?

PN72

MR WARD: Yes, well, we thought to assist the Commission it might be best that we actually provide the Commission with the full version. That was our intention, to assist the Commission, yes.

PN73

DEPUTY PRESIDENT ASBURY: Thank you - just clarifying, thanks.

PN74

MR WARD: Yes.

PN75

VICE PRESIDENT HATCHER: Sorry, I'm just having trouble locating where this is.

PN76

MR WARD: I think it's all bundled together, your Honour. It's not easy.

PN77

VICE PRESIDENT HATCHER: Where is this material, Mr Clarke?

PN78

DEPUTY PRESIDENT ASBURY: I think it's - sorry, it's Deputy President Asbury again, Mr Clarke - is it the material appended to the applicant's submission?

PN79

MR CLARKE: Yes.

PN80

DEPUTY PRESIDENT ASBURY: That's the document from eh employers. That's the screen shots of documents from the employers.

PN81

MR CLARKE: What's appended to the witness statement, Mr Fox's witness statement, is a document and you'll see on the top right-hand corner, dated 27 May 2020, headed, "Use JobKeeper", and it's issued by REEF. It goes for a couple of pages. Then we go to an extract from - as Mr Ward pointed out - the ATO. Well, when I say from the ATO - - -

PN82

DEPUTY PRESIDENT ASBURY: The chat page from the ATO, and then the submission to the senate committee on the Covid-19 response.

PN83

MR CLARKE: Yes.

PN84

DEPUTY PRESIDENT ASBURY: By RESA - yes.

PN85

VICE PRESIDENT HATCHER: I've taken out all those annexures to Mr Fox's statement.

PN86

MR CLARKE: It's a submission paper as well. The submission is put in on behalf of Mr Fox, signed by me at the end of that submission, and there is a little bit more I could probably say in terms of the JobKeeper copy from REEF, explaining it to their members as to how it is to work, and also a little bit more detail from the ATO chat site, than was in Mr Fox's - - -

PN87

VICE PRESIDENT HATCHER: I'll call that Fox bundle of documents exhibit 3.

EXHIBIT #3 FOX BUNDLE OF DOCUMENTS

PN88

VICE PRESIDENT HATCHER: Mr Ward, do you have anything you what to tender?

PN89

MR WARD: Your Honour, I just simply wanted to tender a small number of documents. We had attached to our submissions the full copies of what we understood Mr Fox had attached as screen shots to his material, which is part of exhibit 3. We simply seek to tender those for completeness so the Commission has the proper copy. One of them is headed, "Real Estate Employers' Federation Employers' alert JobKeeper wage subsidy part 2." The other one is headed, in like terms but, "JobKeeper wage subsidy", and that's its heading. Those two documents - it's our understanding as best we can make out that those are the actual alerts that are screenshotted by Mr Fox and we just simply provide them - seek to tender them and provide them to assist the Commission to see the full document.

PN90

Then lastly, we provide an extract from the Australian Bureau of Statistics publication 5676.0.55.003. It's a relatively short extract from the publication dealing with those companies who have as of April - and it's the most recent publication - taking up JobKeeper. We would simply seek to tender those three documents.

PN91

VICE PRESIDENT HATCHER: The last one - where do I find the last one?

PN92

MR WARD: It should be with our submissions as filed, your Honour.

PN93

VICE PRESIDENT HATCHER: Okay.

PN94

MR WARD: I apologise, your Honour - I'm now working off the printed-out paper.

PN95

VICE PRESIDENT HATCHER: You say that's attached to the submission, is it?

PN96

MR WARD: It should be, your Honour. Mr Collits is on the phone; if we need some assistance Mr Collits might be able to help you as he sent the documents to the Fair Work Commission.

PN97

VICE PRESIDENT HATCHER: I can see the two employer alerts, Part 2 and Part 3. Then there is a business response to the JobKeeper payment. It's that document - its' just mistitled?

PN98

MR WARD: Yes, your Honour; sorry, your Honour, it should be headed Australian Bureau of Statistics.

PN99

VICE PRESIDENT HATCHER: Yes, I've got that. I think we'll just mark those collectively as the REEF bundle of documents. That is exhibit 4.

EXHIBIT #4 REEF BUNDLE OF DOCUMENTS

PN100

VICE PRESIDENT HATCHER: Is that all?

PN101

MR WARD: Yes, your Honour, it is.

PN102

VICE PRESIDENT HATCHER: Is that all the evidentiary material?

PN103

MR CLARKE: Yes, your Honour.

PN104

VICE PRESIDENT HATCHER: So, submissions, Mr Clarke.

PN105

MR CLARKE: Your Honour, this is by way of response to the employers' objections to Mr Fox's claim. I'll deal with it in point order. I just draw your attention to paragraph 16 of their response. I'll be making my comments directly related to the matters stated in their submission. They point out that at paragraph 16 they refer to - sorry, section 159(1) of the Act. I think they mean 158(1) of the Act. The guts of their submission on that point is, look, Mr Fox is just an individual. Yes, he's entitled to make a claim to vary an award, a modern award, but his interests are limited to him personally rather than the broader sense of responsibility such as what an organisation, registered organisation would have. My point simply is this, your Honour, members of the Bench: The Act draws no differentiation between an employee, an individual employee, an individual employer or a registered association, whether it be an employer association or a union.

PN106

VICE PRESIDENT HATCHER: That's for jurisdictional purposes but in terms of how you approach the exercise of considering the merit of the application, the difference between an application brought by an individual in their own interest and an application brought by a registered organisation which has statutory interests and can represent a certain class of employees.

PN107

MR CLARKE: Yes, and Mr Fox is a vice president of the registered Real Estate Association of South Australia. It's not a registered body under the federal act but nonetheless, it has been registered in South Australia since 1971 and has been active before the state Commission for many years with respect to its own state award, prior to moving into the federal award in 2010 and has played an active role, as your Honour would realise, into the making of the current award, real estate award, 2020 during the four-year review.

PN108

So we would ask the Full Bench to see it, that Mr Fox is acting as a vice president of a state-registered union which can't appear in its own right with respect to the federal award matters. He is an individual. He (indistinct) issues that pertain to himself necessarily personally in all respects. It's about a broader interest in a large group of employees, whether they be debit credit sales persons, or commission-only sales persons. Hence, some of the criticisms made by Mr Ward in his submission about my client is that his witness statement is more a submission rather than evidence.

PN109

Of course Mr Fox in compiling his witness statement was taking on the mantle also of being the vice president of the association, which has a broader overview and responsibilities with respect to working conditions of employees in the industry. I also refer to paragraphs 23 on page 7 - page numbers but over the next page. The employers attack the basis of the evidence and say it lacks probative evidence, I think, the term is used. Well, your Honour, we say that there is sufficient evidence because firstly in terms of - if you look at the JobKeeper wage subsidy and in relation to the issues surrounding it being debited against salespersons future commission earnings, it's happening.

PN110

It's been urged upon or if not urged upon certainly advised upon by the employer organisations, telling their members that you can do that, you can claw it back via (indistinct). That's in their own documents. I don't need - Mr Fox does not need - to roll up 50 or 100 employees to say that this is actually happening when we have the document from the employer association saying, "You can do it", and of course what weigh you want to put on it - obviously it's being implemented by some employers because of the ATO chat information. Certainly, I wouldn't be involved in this matter if I hadn't been contacted by people who were experiencing that very same problem, your Honour.

PN111

So we say there is that evidence. The arguments put about the commission-only employees and the application by Mr Fox with respect to those commission-only employees, the simple fact is it is Mr Fox with his lesser hat on as well is seeking to prevent - seeking to learn from history as to what we knew and what we know that took place during the great financial crisis where a number of employees went from debit credit to commission-only, were forced to or told they'd lose their jobs and experienced extreme hardship by ending up earning less then the federal minimum wage.

PN112

Insofar as the argument put by Mr Ward, that circumstances have changed since then with respect to the point of entry and in terms of ongoing employment as a commission-only employee being significantly changed and I agree with him, except that at this point in time, in history, the award also says that a person qualifies if in a single 12-month period in any three-year period immediately preceding entering into a commission-only agreement the employee has achieved the MITA, then they qualify. The fact that they might have qualified in an era of bounty in the real estate industry with record prices being received in sales, bears no relationship to what the coming 12 months looks like in terms of - from the statistics put in in the application by REEF - (indistinct) 14 in respect to seeking to change the method of calculation of the MITA for a limited period of time. There are obvious consequences in terms of the real estate industry, in terms of the numbers of sales, the availability of stock and the like over if not 12 months, more. One only has to be aware of the warnings of the Reserve Bank of Australia, comments by the - public comments of the Treasurer that Australia is already in recession and it's not getting better anytime soon.

PN113

These are probative evidence of the best and of the highest order.

PN114

VICE PRESIDENT HATCHER: So what is the data concerning - - -

PN115

MR CLARKE: Beg your pardon?

PN116

VICE PRESIDENT HATCHER: What is the data concerning the volume of property sales now that options and home inspections have re-opened?

PN117

MR CLARKE: It is unemployment, your Honour.

PN118

VICE PRESIDENT HATCHER: That's not what I asked. Is there any data which shows what the volume of property sales is now that auctions and home inspections have re-opened?

PN119

MR CLARKE: Your Honour, RP data and poor logic have also pointed out that in the information they've been supplied in that other matter by REEF that there has been a significant drop in properties being up for sale. Now, in terms of housing prices, they've dropped. In fact it was just released the other day, I saw on the ABC News, of something like a 15 per cent drop in pricing in Sydney, for example.

PN120

VICE PRESIDENT HATCHER: I don't think so, Mr Clarke. I saw figures of an average of 1 to 2 per cent across the market.

PN121

MR CLARKE: Yes, across the market for other areas it would be higher. I saw that one as well, your Honour. But the point is in our application, Mr Fox's application, is that if things turn out better then it won't make any difference, basically, to the industry. Any top-up, for example - that just disappears. So what we're doing is seeking to learn from history and given - I accept that treasury figures have been shown to be wrong in the past. Forecasts of 12 months or more are very, very difficult. But we're trying to tailor it so we don't repeat what happened during the GFC. Then it was a crisis of money being available through the financial institutions for people to be able to buy housing. This time the very real concern is - by everyone - is unemployment at least being around 10 per cent according to the treasury forecast - and depending on what happens with JobKeeper and various other subsidies are involved in by the federal and state governments, as to what it may go to or under-employment in terms of the number of hours people work.

PN122

You do not commit yourself to a significant mortgage unless you feel secure in your employment. That's not just about real estate people but it's about industry generally. Look at Qantas, Virgin; highly paid people, 6,000 Qantas employees being made redundant. Obviously, an unknown number at this stage amongst Virgin but inevitable, falling to the people taking over the business. Going on to paragraph 40 - sorry, I make it page 12 but commences at paragraph 39 - which begins with (indistinct) the employers' answer with respect to the minimum income threshold. The world has changed in terms of commission-only employees.

PN123

All we would simply say and without repeating what I've just said to you, your Honour, is that all of that is so if what normal times. We don't enjoy normal times and there is no part of the world that enjoys normal times in economic circumstances with growing unemployment, under-employment and the general lack of confidence that has been referred to. That's not just me saying it. I've already referred to our own Reserve Bank of Australia but what about the Federal Reserve of the United States, the European Central Bank, the Bank of England? All their economic forecasts are dire.

PN124

Hopefully, they're wrong but I can only operate on what they're saying. So we're trying to - as I say - learn from history and not sit still like Nero, fiddling while Rome burns. (Indistinct) what I call page 16, which is paragraph 64, Prohibition. On paragraph 71 - and there are a number of them - Mr Ward has pointed out section 134, the objectives of a modern award, and at 71(a) refers to this prohibition claim. This is about the ongoing employment - sorry, the pause in employment of new commission-only employees for a 12-month period under Mr Fox's claim says the prohibition claim does nothing to encourage collective bargaining. Well, I'd just point out that commission-only employment is the very antithesis of collective bargaining.

PN125

VICE PRESIDENT HATCHER: I think we can accept that collective bargaining is just simply not a feature of the real estate industry, can't we, and not talk about it helps or hurts anybody?

PN126

MR CLARKE: In terms of the increasing workforce participation and the like, what we're trying to do - and we focus on this in Mr Fox's submission and in the one which is related to looking after the interests of low-paid workers and providing safety net award. We've got to just think also about commission-only employees who have no safety net in terms of money. Yes, after 12 months if they don't meet the MITA they drop out and they either become debit credit or they lose their job. Unlike other industries, people are not guaranteed an hourly rate of pay any time expended (indistinct) in trying to pursue sales.

PN127

They are not entitled to the federal minimum wage. They must be the only group of employees anywhere in Australia that are not guaranteed the federal minimum wage. That has been ruled by Full Benches of this Commission and its predecessors as being the bare minimum for an adult to be able to survive and escape poverty if you're in the workforce. Again, that's why Mr Fox has put in the application worded as he has. It is only a pause in employment of new entrants as commission-only, not existing ones, new entries. (Indistinct) outlined earlier, your Honour, with respect to how existing debit credit sales people can still find themselves as commission-only for at least that 12 months because at some time in 12 months in the previous three years they've earned enough to qualify.

PN128

If I can then - just excuse me, checking my notes for a moment. I want to deal with the JobKeeper issues, if I may; that is where we're seeking in our terminology to get rid of what we see as the double-dipping by employers for the JobKeeper payment. I would go to paragraphs 123 to 126 of the submission by the employer. That can be found at - as I say, 123 on page 29 where some examples are given. The page headed - paragraph 124 and I want to comment from 123 to 126, which is basically this submission by the employers: that, look, Fair Work Commission over the years - we're not interested in how employees and employers regulate over award payments. We're here looking after the safety net award, nothing more. That's true. That's been the general philosophy of the Fair Work Commission to date. But it never had in Australian history, not since 1901, has a federal government ever introduced a wage subsidy scheme for all employers - with some notable exceptions - for such a significant number of employers in the private sector in Australia across many industries. Never happened.

PN129

Didn't happen during the Great Depression of the 1930s; didn't happen during the GFC 2009 to 2012. So we say that you are now working - this Commission is now working - in a whole new paradigm about what should or should not be regulated by a safety net award. At paragraph 130(a), the argument is put by the employers that employees are no worse off under JobKeeper than not being under JobKeeper in terms of any debit credit arrangement. We say they are. Under the pre-pandemic days, employees had entered into an employment agreement - generally written agreements - which for the purpose of calculating commission that's payable to them could be debited, allowed debiting of their weekly award wages and other allowances by the company.

PN130

With JobKeeper, the employer gets $1,500 per fortnight as a wage subsidy courtesy of the Australian tax payer via the ATO. That employer then pays the sales person, if they're working full-time, the full award wage and allowances. The current award wage is $862.50. With car allowances, let's round it up to $2,000 a fortnight. What the employer now does - or a number of them do, not all, but a number of them do as indicated by their own newsletters - they then debit a whole sum against the employees' future commission payments whilst they only actually shelled out of their own pockets a modest $500 in that fortnight; that is the excess over the wage subsidy.

PN131

But not content with that, the employee is expected to give back to that same employer the $1,500 JobKeeper payment that the ATO gave that employer originally. That $1,500 is not returned to the ATO. It is kept by the employer so they get both ways, coming and going.

PN132

VICE PRESIDENT HATCHER: Sorry, just so I understand this, Mr Clarke, if there is no JobKeeper payment, the employer would obviously have to pay the award weekly wage of the employee - - -

PN133

MR CLARKE: Yes.

PN134

VICE PRESIDENT HATCHER: - - - out of their own pocket. But there are arrangements in which they can then debit that against future commissions. Is that correct?

PN135

MR CLARKE: Yes, well, generally speaking - if you use their template as REEF's newsletters point out, it allows for - before you can get your share of the commission, there is a formula as to how you - what you get in your pocket by commission. That is after the employer has debited against that commission your fortnightly wage, your fortnightly allowances, your superannuation contributions and what ever other debits may have been agreed to. If there is a credit left over after that exercise, you get paid that credit. If there is not, the debit rolls on.

PN136

VICE PRESIDENT HATCHER: What is different now from the employees' perspective? They still get their weekly wage - - -

PN137

MR CLARKE: Yes.

PN138

VICE PRESIDENT HATCHER: - - - and that weekly wage is still debited against future commissions.

PN139

MR CLARKE: Yes.

PN140

VICE PRESIDENT HATCHER: How is the employee worse off?

PN141

MR CLARKE: Well, what's happening is the employer in that case where JobKeeper is paid has got $1,500 of their $2,000 wage bill for that employee from the tax office.

PN142

VICE PRESIDENT HATCHER: Yes, Mr Clarke, but that's the purpose of it; that is JobKeeper is a subsidy to employers to assist them in retaining people in employment rather than firing them. So the employer is meant to $1,500 in their pocket to assist them to continue to have sales persons on their books and pay them the minimum wage rather than firing them.

PN143

MR CLARKE: The difficulty - - -

PN144

VICE PRESIDENT HATCHER: Just explain to me, what is the prejudice from the employees' perspective?

PN145

MR CLARKE: Perhaps I'll ask Mr Fox.

PN146

MR FOX: Can I - with respect to the Full Bench - the idea of JobKeeper is to - - -

PN147

VICE PRESIDENT HATCHER: Mr Fox, can you answer my question?

PN148

MR FOX: Yes, I can. I can answer your - - -

PN149

VICE PRESIDENT HATCHER: I'll repeat it again and just explain - I must be missing something here. Mr Fox, can you listen again? So the normal situation is the employee gets the minimum weekly wage prescribed by the award. Then under private commission-only arrangements which are not regulated by the award that is debited against future commissions, correct?

PN150

MR FOX: Correct - in a normal market, sir.

PN151

VICE PRESIDENT HATCHER: In the current situation - - -

PN152

MR FOX: It's 40 per cent down in residential, 50 per cent down - - -

PN153

VICE PRESIDENT HATCHER: Mr Fox, can you stop interrupting me? In the current situation the employee still gets the minimum weekly wage and that is still debited against future commissions, correct.

PN154

MR FOX: Correct.

PN155

VICE PRESIDENT HATCHER: So what is the prejudice to the employee?

PN156

MR FOX: Because the market has changed and the debit over a six-month period would be $24,000 if a sales person does not make a sale. The $1,500 a fortnight is a subsidy there to prevent the salesperson from winding up with a debit of $24,000. The commission-only people can sit on the beach in Noosa for six months and pick up $20,000 from the government non-debitable. The whole idea of the (indistinct) in a market that is 50 per cent of where it is, the JobKeeper is to go to the salesperson and any debit over and above the $1,500 we have no problem with.

PN157

VICE PRESIDENT HATCHER: Mr Fox, the problem with the size of the debit is a function of the fact that there is less commission to be earned in the market.

PN158

MR FOX: The $1,500 is designed to protect the employee as well as the employer. The employer doesn't have to pay the employee $4,000 a month. They only pay - sorry, they only have to pay $1,000 a month because the ATO is paying the employee directly via the employer. So out of the employer's pocket only comes $1,000, not $4,000 and not only - - -

PN159

VICE PRESIDENT HATCHER: Mr Fox, Mr Fox - - -

PN160

MR FOX: - - - (indistinct) plus the 3,000 so they finish up with $7,000.

PN161

VICE PRESIDENT HATCHER: Mr Fox, that is the point of the scheme. It's an employer subsidy to assist them in paying wages so they don't have to fire people.

PN162

MR FOX: We understand that. But in terms of the way that it is imposed they are claiming back the double amount in a market which is 50 per cent of the market. With respect, the submission I put together is very, very plain and in plain English. Anyone can understand that what has put in the submissions, it's very straightforward. 50 per cent of the employers are paying the job subsidy and not claiming it back. The others are. So we need a ruling that is across the board for an even playing field. We've got some very good employers out there, looking after their employees, and we've got others who are double-dipping.

PN163

VICE PRESIDENT HATCHER: On one view, Mr Fox, the only level playing field about which the award is concerned is that debit credit salespersons receive the award weekly wage. It seems to me that's what the award guarantees and it seems to me that that's not affected by anything that you've said.

PN164

MR FOX: Well, with respect, that's the purpose of the claim. The claim is that salespeople are going to earn less than 50 per cent of what they normally earn and the debit will be built up over that period with the $1,500 should be going toward their debit, and not into the employer's pocket.

PN165

VICE PRESIDENT HATCHER: Okay.

PN166

MR CLARKE: Your Honour, it's Ralph Clarke back again. When the employers talk about the inequity, or some employers will be disadvantaged and then at paragraph 133, if the claim is granted the level playing field is upended and so on. Look at the inequity in - just before I deal with that point one of the issues you raised with Mr Fox about, "Well, you're getting the award wage, why should you worry about it?" Remember this: I'd ask the Full Bench, the award for a salesperson has no penalty rates for weekend work, public holiday work or for hours worked outside normal business hours.

PN167

Reason for that - and the employers have always argued against any imposition of penalty rates for work on weekends or outside of normal hours - by saying, "But these people earn commission and they can earn very good commission earnings because they do it", an incentive rates system. So the award wage is in a sense artificially less than what it would be if what applies in other minimum rates awards applied, such as penalty rates for work on weekends or outside of ordinary hours. This industry - and the employers are very strong on it - they want to keep the incentive payments via commission.

PN168

So if the commission structure is going to be upended - what we say will be upended quite dramatically by the fact that the employers if, despite getting a wage subsidy, are then clawing it back through the commission - - -

PN169

VICE PRESIDENT HATCHER: Mr Clarke, can you just pause. It just seems Deputy President Asbury has dropped out of the call so we'll just have to - just wait while we fix that up. It seems to be some more major problem. We might have to adjourn and reconnect everybody.

DISCUSSION RE TECHNICAL ISSUES [11.04 AM]

SHORT ADJOURNMENT [11.06 AM]

RESUMED [11.27 AM]

PN170

VICE PRESIDENT HATCHER: Mr Clarke?

PN171

MR CLARKE: Yes, Vice President.

PN172

VICE PRESIDENT HATCHER: Go ahead. I'm not sure why we cut off, but we'll just have to do the best we can.

PN173

MR CLARKE: Yes, okay. I'll just deal with - going back to paragraph 130, and there's 130(b):

PN174

If the JobKeeper claim is granted there will be an inequity between employees.

PN175

There's already an inequity amongst employees of real estate agents who are participating in the JobKeeper scheme. You've got to remember there are property management staff and administrative staff. They are all paid wages, some might get incentive payments, such as if they get more properties to be property managed there may be some incentive payments, but by and large they are paid a salary, and generally that salary is over the award, above award, because they work outside of ordinary hours, the property managers in particular.

PN176

So if you look at the particular people where they exist and have over-award payments the employer receives the 1500 JobKeeper for each of those employees, property management, admin clerical staff, and they in turn continue to earn their normal salary. If an employer reduced the employee's normal wage to just say the award rate of pay they would be disqualified from receiving any JobKeeper payment by the ATO under the JobKeeper rules established by the government.

PN177

So you already have an inequity within the same industry and the same employer as between treatment of debit/credit sales people and their over-award payment, a variable over-award payment, being their commission, and property management staff and clerical staff in recept of over-award payment as part of their annual salary, but not a variable over-award payment, they maintain that, and they must maintain it if the employer is to receive the JobKeeper benefit.

PN178

The only difference between them and a debit/credit sales person is those debit/credit sales people have a signed employment agreement that allows this debiting process to take place and where the over-award payment is variable subject to the numbers of properties sold.

PN179

So those people - there is inequity, but it's between the employees of the same employer. Insofar as employers say that in (c) that they'll be disadvantaged:

PN180

If granted some employers will be disadvantaged in a way not contemplated by JobKeeper.

PN181

I can't see it. They get - all employers under JobKeeper get the $1500 a fortnight wage subsidy. When it comes to a debit/credit sales person there's a subsidy for that person of $1500 and the employer only has to fork out of their own pocket the difference between their award wage and allowance over and above the JobKeeper payment.

PN182

In terms of at paragraphs 131 to 133, there's a reference to the fact that some employers - there'll be different treatment between employers who are eligible for JobKeeper, that is 30 per cent drop in turnover, and there's an employer on 29 per cent turnover, dropped, doesn't get anything, well, that is the rules for JobKeeper. The Commission can't do anything about that.

PN183

And that's not treating - there are two classes of employers, those 30 per cent plus with a downward slide and those who don't, as to whether they're eligible for JobKeeper. It's not the iniquitous situation that the employers are trying to make out in this case.

PN184

At 136 to 137, the complaint from the employers is they will not get the full benefit from JobKeeper. Well, that's right under Mr Fox's claim. What we're urging upon the Commission is that they won't be able to double dip. Just like they're not able to take away the over-award payment for their property managers and their admin clerical staff, they won't be allowed to do it under Mr Fox's program for their debit/credit sales people. And as far as the commission only sales person is concerned, well, I agree with how the employer has put the information out, that is, in a fortnight they don't get any commission, they get $1500. In those fortnights if they earn more than $1500 by way of commission they get their commission and the employer has the benefit of the $1500 wage subsidy.

PN185

So we are just simply asking ‑ ‑ ‑

PN186

DEPUTY PRESIDENT ASBURY: Mr Clarke ‑ ‑ ‑

PN187

MR CLARKE: Yes?

PN188

DEPUTY PRESIDENT ASBURY: ‑ ‑ ‑it's Deputy President Asbury. Sorry, the point you make about the employees who were on the fixed over-award payment, take the clerical and admin employees ‑ ‑ ‑

PN189

MR CLARKE: Yes.

PN190

DEPUTY PRESIDENT ASBURY: ‑ ‑ ‑it's not necessarily the case that the employer does have to keep paying them their over-award payment because the JobKeeper legislative provisions also entitle the employer to give a JobKeeper enabling direction and to reduce the hours of those employees, and in that case, they just get the greater of the minimum payment guarantee as per the hours that they would work, or the JobKeeper payment, so essentially those employees are subject to that. They're not necessarily sitting there just getting their usual weekly earnings in this current situation. A lot of them have been issued with the - arguably anyway, I don't know about particularly the real estate industry, but there's a lot of clerical and administrative employees, and other types of employees, who have been issued with those JobKeeper enabling directions. They've had their hours changed, their duties changed, and the employer does not have to keep paying them their actual weekly rate. It just has an hourly rate guarantee that can't be less than the JobKeeper. So it effectively allows the employer to reduce their hours to a level where the JobKeeper cover them and end of story.

PN191

MR CLARKE: That's very true, Deputy President, and I'm sorry if I was suggesting otherwise. But of course then they get reduced hours. I'm talking about in the debit/credits system these sales people may or may not be working reduced hours.

PN192

DEPUTY PRESIDENT ASBURY: Yes, but the point I'm making is you're comparing apples with oranges, aren't you?

PN193

MR CLARKE: No.

PN194

DEPUTY PRESIDENT ASBURY: Comparing them with - I understood the point you were making is that you've got this ‑ ‑ ‑

PN195

MR CLARKE: The point ‑ ‑ ‑

PN196

DEPUTY PRESIDENT ASBURY: ‑ ‑ ‑other group that are benefiting and our members are not.

PN197

MR CLARKE: Comparing apples with apples it is if the real estate office, you have all of your debit/credit sales people still working full time, and their property managers are still working full time, the treatment of both of those people are different. They still keep their full over-award payment. The employer - that's the property manager, whereas the debit/credit sales person has it debited against their variable over-award payment. That's the only difference between them.

PN198

Of course, if property managers are working half time, or three days a week rather than a full week, yes, their hourly rate, which includes their over-award payment, is not less. They're getting fewer hours, but if you're a property sales person and you're working, say, three days a week and only allowed to work three days a week under a direction of the employer, well, their wage costs are covered in full by the $1500 a fortnight JobKeeper payment, but that payment is debited against their over-award payment. You see what I mean? So you are comparing apples with apples.

PN199

DEPUTY PRESIDENT ASBURY: I'm not sure that they are comparable because the property sales people don't have the standard hours. That's the point of it, when they're commission only.

PN200

MR CLARKE: Commission only don't have, but the debit/credit people certainly have - well, they work outside hours, but they are governed by a 38 hour week, and it could be worked over seven days a week, and at any time without any additional payment, which is another feature which we say - of this award which makes it so unfair to have the JobKeepers payment debited against their commission earnings. They don't get those penalty payments because the industry don't want them to have it because they want them lean and hungry going out working all hours, and you can understand it. To sell a property, list property, see clients, you do work outside of ordinary hours, but then again so do bar people, but they get penalty rates. So I think we are comparing apples with apples.

PN201

Just going to - I mean, I really tend to think the Catholic Church must've got their ideas from the real estate industry when they decided to ask their priests for half of their JobKeeper back. Anyway ‑ ‑ ‑

PN202

MR WARD: I object to that. That's just offensive.

PN203

MR CLARKE: I withdraw it, sir. Going to paragraph 142, the argument put by the employers in terms of the safety net, again, the same point about (indistinct) about collective bargaining, this industry just does (indistinct). Well, there are collective bargaining agreements, but it's really a lot of individual agreements sort of under one umbrella.

PN204

There's nothing to promote workforce participation and all the rest of it. The fact of the matter is that we are dealing with the livelihoods of people. This is a safety net award, and we have never faced difficulties that we're facing now, nor the introduction of a JobKeeper wage subsidy.

PN205

VICE PRESIDENT HATCHER: Mr Clarke, can I ask you this question?

PN206

MR CLARKE: Yes.

PN207

VICE PRESIDENT HATCHER: This is just illustrative of the way in which the award does or does not enter this commission space, I mean, even before the pandemic it seems to me that under clause 16.1 an employer and an employee could enter into an agreement which says the employer can pay such amount of commission as the employer determines in their absolute discretion, and can pay it at such time as the employer feels like paying it.

PN208

MR CLARKE: That's ‑ ‑ ‑

PN209

VICE PRESIDENT HATCHER: That's correct, isn't it?

PN210

MR CLARKE: The employer doesn't have to issue any commission, any part of it.

PN211

VICE PRESIDENT HATCHER: That is the award doesn't enter the space - the award that's currently structured just simply does not enter the space of regulating the terms of commission agreements under clause 16.1.

PN212

MR CLARKE: Yes.

PN213

VICE PRESIDENT HATCHER: Provided it's subject to 16.2, that is, agreements have to be in writing and varied in writing, and you have to comply with the agreement, and you have to sign it.

PN214

MR CLARKE: That's correct.

PN215

VICE PRESIDENT HATCHER: And you have to account for it.

PN216

MR CLARKE: What we're asking the Commission to do is to - yes, it might be without precedence, but then so is the JobKeeper payment, and so is the current economic climate we're faced with, that's why there's been wholesale changes to different awards, to try and meet those changed circumstances.

PN217

VICE PRESIDENT HATCHER: Right.

PN218

MR CLARKE: If we all stood on precedence we would never have got the first awards of 1904. You know, that's - it really just left it Common Law. You know, it was a new thing to have a Federal arbitration system. Before that you had State systems ‑ ‑ ‑

PN219

VICE PRESIDENT HATCHER: Mr Clarke, stick to the subject at hand, please.

PN220

MR CLARKE: All right. But what I'm simply saying, your Honour is this, these employees are faced in a unique set of circumstances because of the fact that the employers want to keep them on an incentive based scheme, they want them on a safety net award with safety net rates of pay, and then encourage them to try and sell properties by luring them by saying, "You will earn so much by way of commission".

PN221

Now, the JobKeeper has come in and they're getting it both ways. They are still going to get a subsidy under Mr Fox's application. They will be - those debit/credit people will be treated the same as the property managers are treated or the clerical staff in those same real estate offices are treated. If they're on over-award payments they are not taken off them. Yes, as Asbury DP quite correctly pointed out, if there's a direction, enabling direction, given that they only work three days out of five, yes, they lose a weekly wage, but their hours will be paid at their normal rate which includes their over-award payment. If a debit/credit sales person was told, "You now will only work three days a week", they not only work three days a week on the award rate of pay, but they also have the ridiculous proposition that they lose out on any commission they might earn because they've got to pay that $750 back via the commission, their future commission earnings. They're the ones who stand out like organ stops where the inequity applies.

PN222

The employer still gets their wage subsidy just like they do for property sales, property management and their admin/clerical staff, who enjoy over-award ‑ ‑ ‑

PN223

VICE PRESIDENT HATCHER: Mr Clarke, these commission arrangements, as you say, operate for the purpose of incentivising staff.

PN224

MR CLARKE: Yes.

PN225

VICE PRESIDENT HATCHER: It seems to me there is some degree of self-correction here. That is, if employers structure these arrangements, whether through JobKeeper or any other method, whereby the incentive disappears, I would've thought that that result will go back on the employer, that is, if their staff are not incentivised they're not incentivised, that is if staff can't find a way for months or years after this is over, hopefully, to earn a commission, they won't be incentivised to earn a commission and the employer will suffer.

PN226

MR CLARKE: The problem you have in a - when I say normal, pre-pandemic, an employer did something like that or massively changed the commission payable to a sales person they could find another job as a sales person with another real estate company and take their clients with them. But that's not what we're facing right now in the pandemic, and we are simply saying the only intervention we are asking this Commission to take is to simply say if an employer is in receipt of a JobKeeper payment wage subsidy they can't use it to debit it against a sales person's commission. You would be instructing them to behave just like they have to behave towards their property management person or their clerk who is on an over-award payment, no difference. No difference. It's just basic fairness. And I thought that's basically why you got the name, Fair Work Commission.

PN227

VICE PRESIDENT HATCHER: Anything further, Mr Clarke? I assume that was your correlation.

PN228

MR CLARKE: That's all I have to say, your Honour.

PN229

VICE PRESIDENT HATCHER: Thank you. Mr Ward?

PN230

MR WARD: Thank you, your Honour. If the Commission pleases, I'll be relatively brief. I want to make a short observation about the applicant, talk a little bit about the lack of evidence. I'll then bring you back to comments made in Mr Clarke's submissions about section 134. But I just want to make five points in relation to matters arising from Mr Clarke.

PN231

With respect, I think the Vice President understands well the submissions we made in relation to Mr Fox as an individual applicant. The only thing I would add is that these obviously are not four-yearly review proceedings, which operate under a slightly different basis to section 157 proceedings. These are section 157 proceedings, and as such Mr Fox is the moving party. He can't try and be a proxy for a South Australian registered organisation. We have to understand that Mr Fox is the applicant in person. That wasn't a jurisdictional issue we raised, it simply was an issue we raised as to the weight that might be given to any statements of assertions made by Mr Fox as an individual as opposed as what the Vice President identified what might be considered weight given to observations for example from a, say, national union. That's all we would say in regard to Mr Fox as an applicant.

PN232

It should be uncontroversial that real estate agents in the real estate industry have accessed JobKeeper. The material from the Australian Bureau of Statistics highlights that the category that real estate services are in, that category is slightly broader than real estate per se, but that category is rental, hiring and real estate services, as at April 54 per cent of businesses in that category had either expressed an interest for or were in the process of signing up to JobKeeper, so we say it's reasonably uncontroversial that a reasonable proportion of the industry has been required to access JobKeeper, and the reason it's been required to access JobKeeper, with some concern, is that those businesses have triggered the 30 per cent or more impairment figure in terms of the business performance compared to last year. I'll come back to that.

PN233

VICE PRESIDENT HATCHER: Mr Ward, just about this business impairment, in relation to your application you lodged some data about lower volumes of sale.

PN234

MR WARD: Yes, your Honour.

PN235

VICE PRESIDENT HATCHER: And events are moving fairly quickly but I think that that data sort of takes in the period when auctions and inspections were shut down.

PN236

MR WARD: Yes, your Honour.

PN237

VICE PRESIDENT HATCHER: Is there any more up-to-date data which cover the period after they've re-opened?

PN238

MR WARD: Your Honour, I suspect there is. I don't have it to hand. If you require that can I take that on notice and talk to my client, and then we'll see what we can provide you?

PN239

VICE PRESIDENT HATCHER: That would be useful because I'm trying to work out whether the decline - I mean, I'm sure there's a more complex answer, but I'm trying to work out whether the decline demonstrated in the data you provided was simply a function of the shut-down of auctions and inspections or whether there is a wider decline in the number of properties coming on the market which can be expected to last for some time.

PN240

MR WARD: Your Honour, if I could take that on notice. The only thing I have available at this stage is that we're not aware of any real estate agent who had originally accessed JobKeeper volunteering not to continue to receive it. But in relation to sales I'll take some instructions on that and if I can I'll respond in writing to your Honour's Chambers.

PN241

VICE PRESIDENT HATCHER: Thank you.

PN242

MR WARD: Thank you, your Honour. It's important to consider the absolute absence of evidence that would be required for these applications to succeed. That absence can be characterised as follows: there is in fact no evidence before the Commission concerning any actual employee, how they're being paid today and their current circumstances in their employment; there is no actual evidence concerning any actual employer, who is in receipt of JobKeeper, and what is occurring with any of their employees; there is no evidence before the Commission from any actual commission only sales person or evidence concerning commission only sales people and their circumstances; there's no evidence from a sales person on wages who is party to a sales commission arrangement based on debit/credit; and there's no evidence concerning those sales people and their circumstances; there's no ‑ ‑ ‑

PN243

DEPUTY PRESIDENT ASBURY: Mr Ward ‑ ‑ ‑

PN244

MR WARD: Yes.

PN245

DEPUTY PRESIDENT ASBURY: ‑ ‑ ‑sorry to interrupt you, it's Asbury DP.

PN246

MR WARD: Yes.

PN247

DEPUTY PRESIDENT ASBURY: While you're on that subject perhaps can I take you to that document that we marked as exhibit 4, being the Real Estate Employers Federation, the employers (indistinct).

PN248

MR WARD: Yes, your Honour, I was going to come to that. I was going to come to that. Yes, please do.

PN249

DEPUTY PRESIDENT ASBURY: If you want me to wait until you come to that I'm happy to withhold my question.

PN250

MR WARD: Your Honour, I'm very much in your hands. I do intend to go to that, but if your Honour wants to take me to it now that's fine.

PN251

DEPUTY PRESIDENT ASBURY: When you get there all I was going to ask you about is the comment about, "Is there any way for me to call back?", the question there?

PN252

MR WARD: Yes, I was going to go to that.

PN253

DEPUTY PRESIDENT ASBURY: Yes. And then the other question, "Can an employer continue to debit?", because I'm a little bit mystified at how those two hang together but I'll wait until you get to that point, so I don't - I've interrupted the flow of your submissions, so I'll leave you to ‑ ‑ ‑

PN254

MR WARD: No, that's fine. No, I'm happy to take that question when we come to it, your Honour.

PN255

DEPUTY PRESIDENT ASBURY: Great. Thank you.

PN256

MR WARD: That'd be fine. There's also no evidence before the Commission about whether any JobKeeper directions have been issued to any employees. There's no evidence before the Commission in relation to any administrative employee, any clerical employee, any property managers of any kind. There's no economic evidence before the Commission, and certainly no evidence relating to anything put forward by the Reserve Bank or, if it was relevant, any other bank including banks in England and America.

PN257

Importantly there's no evidence of any actual dispute between an employer and an employee concerning JobKeeper or JobKeeper directions. I think, his Honour the Vice President asked in the directions hearing whether or not there had been a part 6-4C dispute notified in the industry. There's certainly no evidence before this Commission of that occurring, and my client is not aware of one.

PN258

There's no evidence of any actual dispute between an employer and an employee concerning commission provided for in the real estate industry award 2020 in clause 16.5, which empowers the Commission to deal with disputes concerning whether or not moneys should or should not constitute commission, so none of that evidence is before the Commission.

PN259

In relation to the submissions about how employers may force people into categories of employment, or in relation to how employers might be making people redundant, we simply say this, there's no evidence before the Commission of any job losses in the industry or how they were affected. There's no evidence before the Commission about how employers may or may not, in a particular case, choose who will and won't be made redundant.

PN260

Some observations were made in the written submissions of Mr Clarke about other industries. Importantly there's not only no evidence of sales commission systems in this industry, there's no evidence of how incentives or commission arrangements in other awards or other industries' interact with JobKeeper.

PN261

There's actually no evidence at all in this matter of how the pandemic has actually affected an actual employee, and I say, with respect, the applicant's case is entirely barren of what is required for the application to succeed.

PN262

I don't intend to deal with the materials that have been marked any further. We simply rely on our written submissions in relation to those observations.

PN263

I would make these comments if I can in relation to what Mr Clarke said. I then intend to go to the REEF document and then I'll conclude by dealing with section 134. With respect, some of the observations that have fallen from the Commission about the characterisation of JobKeeper are, with respect, correct. JobKeeper is a subsidy provided to an employer on certain preconditions. Those preconditions are that the employer maintains someone in employment as opposed to making them redundant. And the further precondition is that that person receives a minimum payment in each individual fortnight, and as long as that eligible payment is made in wages then the employer receives a subsidy.

PN264

The whole scheme is simply designed to provide support for a class of employers who are in a relatively perilous economic position in terms of their trading and revenue position, and the quid pro quo that is required is a minimum amount payment and the maintenance of employment. There is no evidence before this Commission that any employer is doing anything other than exactly that, that is, those that are in receipt of JobKeeper are maintaining employment for their employees and paying them the requisite fortnightly minimum. There's no evidence to suggest anything untoward is happening there.

PN265

The incentive issue is very much as his Honour the Vice President has suggested it is in his questioning. It's an incentive for sales, and one has to accept that from time to time that might place a person in a good position and in a bad position. In a market that is booming sales will be good, and in a market that is contracting sales will be not so good. That is the nature of the incentive process.

PN266

There's no evidence of what employers are doing in that regard. It might well be that employers are maintaining their current incentive arrangements. It might well be that employers are moderating their incentive arrangements with people to maintain that sense of incentive but there is no evidence before us on that.

PN267

Some weight was given in the submissions - it does not appear in the written submissions, but in oral submissions about issues associated with the broader construction of the award, and whether or not it did or did not have penalty rates and weekend rates and whatever. With respect, that's a different case. That's certainly not this case. If there's a broader desire for somebody to run a case about that then that's for another day, but it's not for today.

PN268

In relation to the REEF material, and I'm happy to take your Honour, Asbury DP's question. The first thing that needs to be said about this material is this, we respectfully ask the Commission to be cautious. This material doesn't represent what in fact is happening. It simply represents advice that REEF has given its members, and as most industrial associations do when they provide this advice they try and give the best advice in the circumstances.

PN269

I'd simply say this, in relation to commission only people, they give two pieces of advice in the document headed, JobKeeper Wage Subsidy Part 2, and that is at the third page talking about whether or not they're obliged to pass the payment to commission only employees, despite their not receiving normal wages, and of course their answer is yes, you have to do that. And, in our submissions, we deal with that in that some commission only employees will receive the benefit at these times that they ordinarily would not.

PN270

The only comment my client has made about this somewhat provocative phrase "call back" is concerned here, and a question might've been asked whether or not if you give a commission only person $1500 a fortnight are you able to, as it were, take that back somehow, and my client's answer of course is no to that.

PN271

So in relation to this notion that in some way employers are acting unscrupulously in taking something off them that JobKeeper requires employees to get, there's no evidence of that, and my client's advice to its members doesn't support that proposition at all.

PN272

Does your Honour, Asbury DP, want me to go to the next question?

PN273

DEPUTY PRESIDENT ASBURY: Yes, please. Yes, please, Mr Ward, because it would seem that the first call back statement or answer seems to state, "No, you can't call it back directly", but on the next page indirectly you can essentially. Well, I think that's the argument that's put by REISA, you can and you are.

PN274

MR WARD: I think it needs to be looked - no, thank you your Honour for that. I think the first thing that needs to be said is this, and one needs to be careful with language here, the employee does not receive a JobKeeper payment. Now, I know that a lot of us have used that language, and I'm conscious in other proceedings that lots of people use that language, but in a strict sense under the legislation the employee does not receive a JobKeeper payment. That's the first point I want to make. The employee receives a certain level of wages which is set at a minimum of $1500 in the eligible fortnight. So the employee is still receiving wages. It happens to be the case that on receipt of wages no less than $1500 - or what you would normally receive for the hours worked, whichever is the greater - on receipt of the wages the employer becomes eligible for the JobKeeper payment.

PN275

On that basis what the commission only person is receiving when they are paid the $1500 for the fortnight is simply receiving wage payments. It's a wage payment. Now, I'm happy to be corrected, but on the basis they're receiving a wage payment in that fortnight of $1500, that is entirely proper to take account for calculating the MITA, because the MITA requires the employer to take into account all wage payments paid to the employee during the requisite period. So I don't struggle with how that answer is given by REEF to the question, because it's predicated on the very clear understanding that the employee is receiving wages no less than 1500 for the eligible fortnight. It's the employer who then is the beneficiary for the wage subsidy because they have paid those wages, and of course - and this is in the material from REEF as well, those wages of course have to be paid in advance of the employer receiving the subsidy.

PN276

DEPUTY PRESIDENT ASBURY: Yes. Yes, but the proposition is that really there's two different considerations, one is the MITA and how you deal with JobKeeper in the context of that MITA, and leaving that aside, isn't the issue here that, again if I can paraphrase the submission that I understand is being put, is that for a debit/credit - and the other difficulty is, Mr Ward, I guess, is that arguably the submissions have segued between the debit/credit situation and a commission only person because both of them can have a debit/credit situation, so the debit/credit in the commission only context, and the other debit/credit for a person who is on the minimum weekly wage rate arrangement where that's debit and credit. Are you with me?

PN277

MR WARD: I'm hanging in there, your Honour.

PN278

DEPUTY PRESIDENT ASBURY: You know, there's two contexts in which the debit/credit can apply, one is in the context of the commission only and one ‑ ‑ ‑

PN279

MR WARD: Your Honour, if you take the other one ‑ ‑ ‑

PN280

DEPUTY PRESIDENT ASBURY: Yes.

PN281

MR WARD: ‑ ‑ ‑I don't see any merit whatsoever in the application, and you can take the other one as an example. So let's take the other one again.

PN282

DEPUTY PRESIDENT ASBURY: Yes.

PN283

MR WARD: Let's assume that I'm a sales person and I'm paid wages and I'm the beneficiary of an over-award arrangement for sales commission. And let's assume that the ordinary (indistinct) of that sales commission arrangement allow my employer to debit my wages and my income against sales. Before Covid hit, before JobKeeper arrived my employer would say well - and let's do hypothetically on a monthly basis, my employer would say, "This month I have paid Nigel X amount of dollars". That goes notionally into the debit account, and if I made sales and those sales outweigh the debit account I get paid some bonus. Under the current circumstances, and I appreciate this is the hypothetical because there's no evidence of it, under the current circumstances my employer is again paying me wages. That's what they're doing, nothing has changed. Those wages would go into the debit account, and, again, if I had enough sales to outweigh what's in the debit account I get paid a commission.

PN284

All that's changed at the moment in this, and it's very simple, the employer, if they've suffered such an egregious fall off in business of 30 per cent or more, has the benefit of a government scheme provided, as I've said already, employment is maintained and the employee receives a minimum amount of money in the relevant fortnight.

PN285

So from the employee's perspective the employee was getting wages debited in their commission arrangement before JobKeeper. The employee is getting their wages debited during JobKeeper, so nothing changes there. The subsidy to the employer is the encouragement in very perilous commercial circumstances to keep people on the books and at least pay them something. So I don't understand why people might struggle with that as a concept. The employee is in no different a situation to the one they were in before or after JobKeeper.

PN286

DEPUTY PRESIDENT ASBURY: Except arguably they are, because the environment that they're operating in means they're probably not going to earn commissions arguably, and so they're getting - so if the debit/credit employee, if their wages are being debited, then they're incurring a greater and increasing debit as things roll on, whereas the employer, who's paying the wages, is getting a subsidy.

PN287

MR WARD: Yes, well, your Honour, there's two things that need to be said about that, the first one is that the subsidy is there so they stay in a job. So the subsidy is there first and foremost so those people get their weekly wage. That's what the subsidy is for, that they stay on the books. And there's been no evidence about people having their hours reduced in this case, no evidence about JobKeeper directions, so, you know, if I'm a 38 hour week employee, the employer is getting that subsidy having suffered a 30 per cent or worse reduction in year on year revenue, so I keep a job. That's why the subsidy is there. That's the bottom line about the subsidy.

PN288

As to the fact that some people might earn less sales commissions at the moment, well, I have to concede that. That's uncontroversial, absolutely. But JobKeeper is about keeping them in work full stop.

PN289

DEPUTY PRESIDENT ASBURY: But it's keeping them in work while week about they're incurring a debt, so that at the end of this the employer will be able to recoup that debit from them until it's back to zero again or back to wherever it needs to be under the terms of their agreement before they start earning commissions again.

PN290

MR WARD: That would happen in any situation when there's a downturn in the market. It would happen in any ‑ ‑ ‑

PN291

DEPUTY PRESIDENT ASBURY: But it wouldn't happen in a situation where the employers retain the money that it's paid the employee, so ‑ ‑ ‑

PN292

MR WARD: Your Honour, with respect, we're now moving into quite a sort of speculative - well, I mean ‑ ‑ ‑

PN293

DEPUTY PRESIDENT ASBURY: Yes.

PN294

MR WARD: ‑ ‑ ‑let's be candid, if JobKeeper hadn't come along, you're right, the employer wouldn't have that benefit, and one presumes if JobKeeper hadn't come along what we'd be facing right now in this industry is a very substantial amount of redundancies.

PN295

DEPUTY PRESIDENT ASBURY: So your submission essentially, Mr Ward, is if the employer is going to benefit it's had a great cost imposed on it in order to get any benefit at all, and it's not just for the wages, it's for maintaining people in employment and it should be entitled to have that benefit?

PN296

MR WARD: Unambiguously.

PN297

DEPUTY PRESIDENT ASBURY: Yes, I understand your submission. Thank you.

PN298

MR WARD: Unambiguously.

PN299

DEPUTY PRESIDENT ASBURY: Yes.

PN300

MR WARD: Thank you, your Honour. Thank you. Is that the only matters arising from the REEF document, your Honour?

PN301

DEPUTY PRESIDENT ASBURY: Yes, for me it is.

PN302

MR WARD: Thank you, your Honour.

PN303

DEPUTY PRESIDENT ASBURY: Thanks.

PN304

MR WARD: Thank you. Can I just deal in closing then, I just wanted to make a couple of quick observations about section 134. It seems important to draw our attention back to that. Mr Clarke in his submission relies on section 134(1)(a), section 134 (1)(da) and then somewhat interestingly enough relies on section 284. Can I just make this observation about section 134(1)(a), it's almost become trite for every applicant to raise 134(1)(a) and say these people are covered by the award therefore they're low paid therefore our application should succeed. And, with respect, if that's all it required then probably every application made by an individual employee or a union would succeed, but that's not sufficient. I think one of the challenges we've got here is, and I say this without appearing too mischievous, there's no evidence about how people are paid at all in this industry although one concedes there's a level of award reliance in the industry. So I don't think section 134(1)(a) when properly forensically applied against the claims really gets the applicant anywhere.

PN305

In relation to 134(1)(da), with respect, the applicant's approach there is misplaced. 134(1)(da) is about paying people overtime, paying people for working irregular hours. This claim is not about paying people for overtime or paying people for working regular hours. It's not about that and it's a little mischievous to try and categorise at the eleventh hour what the claim is really about, but it's not about that. As I've said that's a different case.

PN306

And then, finally, Mr Clarke relies on section 284, and, with respect, that seems to be reasonably ill-conceived. Section 284 sets out the minimum wages objective and he relies on section 284(1)(c). It's curious that, but it's important to bear in mind the operation of the minimum wages objective arising in section 284(2). Obviously the minimum wages objective is centre stage when dealing with the annual wage review process. But other than that it does have a broader application. That broader application is set out conveniently in section 284(2)(b). And that relates to when the Commission is setting, varying or revoking the award minimum wages, and, with respect, the Commission in this case was not being asked to set a minimum award wage, they're already set. It's not being asked to vary a minimum wage award. There's no application to change any of the minimum wage awards in the real estate award. There's no application here to revoke the minimum wage award. So section 284, with respect, is a distraction and shouldn't come into the Commission's thinking.

PN307

Those are the submissions we wish to make in addition to the materials already filed subject to any further questions. If the Commission pleases that is our case in the matter.

PN308

VICE PRESIDENT HATCHER: Mr Ward, just one matter, your application has sought a time limited restriction to apply to the calculation of the MITA for the purpose of exiting commission only arrangements. I'm just wondering whether there should be some - and this might be a narrower form of what is sought by Mr Fox - some, again, unlimited commensurate restriction on entry into the commission only system to have regard to the - and I'm talking about not new employees but employees who are currently on wages, whether that should occur. Do you want to say anything about that?

PN309

MR WARD: Your Honour, if you want to give me a moment. It's not something I'd thought about. It's possibly something I might've preferred to take some instructions, but I will respond. There's a very substantial series of safeguards already in the instrument about entry. And in addition to that, and very importantly, entry into commission only in the award is by agreement. No employer can force somebody to become a commission only sales person.

PN310

VICE PRESIDENT HATCHER: That's true, but there may be - and I'm not suggesting this would be malicious, but an employer who is suffering financial difficulties may be put in a position where they can only viably either terminate the employment of someone on wages because they can't afford the wages, or they put them on commission only arrangements. And employees in the same circumstance might think that's the least worst alternative.

PN311

MR WARD: That could arise in the sense of an employee might be faced with the possibility of taking the redundancy or the possibility of mutually agreeing to move, subject to meeting the criteria, mutually agreeing to move to commission only. All I can say is that obviously there's no evidence of that in the matter, but if one looks at it through a hypothetical perspective that might be a choice the employee decides to take in the sense of employee A might very well say, "Give me the redundancy package. I'll go and take my chances somewhere else". Employee B might very well say, "Look, in the context of who I am and where I am in life, actually I'd rather not have the redundancy and leave completely, I'd rather stay attached and do commission only". I think one would really need to understand in great detail the factual basis of how those decisions may or may not be made before, with respect, the Commission prohibits something of that nature. I mean, that's a, with respect, quite substantial step to actually prohibit something.

PN312

VICE PRESIDENT HATCHER: I mean, only because entry is based on earnings for a 12 month period in the last three years, so it may mean that even though a person is currently nowhere near the MITA some period of earnings from closer to the housing boom is used to justify them entry into the scheme.

PN313

MR WARD: Well, your Honour, if your Honour - and, again, accept for a minute that there isn't any evidence of this, but if your Honour had a view that for a very short period of time the three year period was an inappropriate period of time for the focus and wanted to substitute a more contemporaneous period of time, such as the last 12 months, I don't have instructions to say we would support that, but one could see that that might be a way of ameliorating the concern without putting a blanket prohibition on it.

PN314

VICE PRESIDENT HATCHER: Yes, all right. Thank you. Mr Lilleyman, do you want to make any submissions?

PN315

MR LILLEYMAN: Yes, your Honour. Just we just seek to rely on our written submissions and after hearing Mr Ward we agree with what's been put forward by REEF South Australia and Northern Territory, but other than that we have nothing else to add.

PN316

VICE PRESIDENT HATCHER: Thank you. Anything briefly in reply, Mr Clarke?

PN317

MR CLARKE: No, your Honour. I think I put it as best I can, and await your deliberations.

PN318

VICE PRESIDENT HATCHER: Thank you. I thank the parties for their submissions. I apologise for the technical difficulties. We'll now adjourn.

ADJOURNED INDEFINITELY [12.23 PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #1 WITNESS STATEMENT AND SUBMISSION OF MR CLARKE PN15

EXHIBIT #2 WITNESS STATEMENT OF NATHAN FOX............................ PN23

EXHIBIT #3 FOX BUNDLE OF DOCUMENTS............................................... PN87

EXHIBIT #4 REEF BUNDLE OF DOCUMENTS............................................. PN99