PN1

DEPUTY PRESIDENT GOSTENCNIK: Good morning. Mr Ferguson, you're appearing for Ai Group together with a number of private hospital associations?

PN2

MR B FERGUSON: Yes, I am, Deputy President. I have Ms Bhatt also appearing with me this morning.

PN3

DEPUTY PRESIDENT GOSTENCNIK: Yes. Good morning. Ms Wischer, you're appearing for the Australian Nursing and Midwifery Federation?

PN4

MS K WISCHER: Yes, I am, sir, with my colleague Mr Crute.

PN5

DEPUTY PRESIDENT GOSTENCNIK: Yes. Good morning, Ms Wischer. Joining me on this virtual Bench this morning are Deputy President Young and Commissioner Yilmaz. Mr Ferguson, we have had an opportunity to read the comprehensive submissions that have been filed by Ai Group. Obviously we don't need those read out or repeated, but over to you.

PN6

MR FERGUSON: Thank you, Deputy President. I won't traverse the full detail of that, but in essence these proceedings are dealing with an Ai Group application seeking variations to the Nurses Award. In short, the application seeks to ensure that the award clauses dealing with the payment of overtime, weekend and public holiday penalty rates requires that such premiums are calculated for casual employees - - -

PN7

DEPUTY PRESIDENT GOSTENCNIK: Mr Ferguson, just hold on for a second. Ms Wischer, could I ask you to put your microphone on mute. We get feedback.

PN8

MS WISCHER: Sorry, sir, yes.

PN9

DEPUTY PRESIDENT GOSTENCNIK: That's all right. Sorry, Mr Ferguson, continue.

PN10

MR FERGUSON: In essence, we're trying to seek to ensure that the award requires that the relevant premiums are calculated on a casual employee's minimum rates under the award for ordinary hours of work and that the 25 per cent casual loading is then added to that amount. That is what I think the parties in their material have described as the cumulative method. The alternative approach which the ANMF advocates for has been described as the compounding method, if you will. Under that approach the relevant penalties are calculated on a loaded up rate that includes the 25 per cent casual loading so as to provide a more generous entitlement.

PN11

Now, on 24 April we filed a draft determination. It sets out the variations we seek. I just note in that respect that the ANMF don't appear to quibble with the form of words we seek as such. They are really only contesting the substantive intent of our variation. In addition to that we filed detailed submissions - comprehensive submissions as you put, Deputy President - on 9 June and on 29 September. Given we have been quite careful and detailed in that, I don't want to demur from any of the arguments we have there advanced.

PN12

I just want to today, firstly, provide some brief introductory comments about the nature of the grounds that we have proposed in support of our application and then just amplify, if you will, some of our key arguments. In doing that, deal with any questions that fall from the Bench.

PN13

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN14

MR FERGUSON: In terms of those introductory comments, I think we would put it this way: there are essentially three limbs to the claim. The first is a proposal that the award be varied pursuant to section 160 to remove ambiguities or uncertainties as to how the rates for casual employees are calculated; that is overtime, weekend and public holiday penalty rates.

PN15

Now, if the Bench is not with us on that claim we seek that a variation be made to remove an error in the award as to how the rates for casual employees on overtime are calculated. That is a narrower proposition, but in both of those contexts we seek that the variation be retrospective to the commencement of the award on 1 June 2010. The third limb is an argument in the alternative, if you will, where we say that the award should be varied pursuant to section 157 to ensure that it achieves the modern awards objective by giving effect to the draft determination that we have proposed.

PN16

I think before I move on to the substance of our arguments in support of all those points, we want to make the point that we have essentially argued that our section 160 claims are our primary claims, if you will, and the reason for that is retrospectivity. The Bench will no doubt be aware that it can only grant the variations respectively if they are made pursuant to section 160.

PN17

We can't get a retrospective variation just through our section 157 application, which is why we put that as an alternative or fallback argument, if you will. We, nonetheless, make the point that all the arguments that we have set out as to why the variations are necessary to achieve the modern awards objective do go to why it should be appropriate for the Commission to exercise its discretion to vary the award under 160 and to vary it in the manner that we have proposed, as well, bearing in mind that all terms will have to be necessary to meet the modern awards objective pursuant to section 138.

PN18

That then takes me to the substance of our case. Look, my intention today, if it's convenient in this form, is to make my submissions by reference to our written material for convenience.

PN19

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN20

MR FERGUSON: I will proceed on the assumption that the members have that to hand unless someone screams.

PN21

DEPUTY PRESIDENT GOSTENCNIK: Yes, we do.

PN22

MR FERGUSON: Again, I won't repeat all of that - it is lengthy - so by way of context in chapter 2 we have essentially set out our case in summary at paragraphs 6 to 12 and then in chapter 3, at paragraphs 13 to 27, we deal with the relevant award provisions which we say are pertinent to this controversy. I think I might, just for context, take the Bench through the most pertinent provisions before I weigh into their - - -

PN23

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN24

MR FERGUSON: Could I go firstly to paragraph 14 of my written submissions. We have there set out the provisions pertaining to casual employment and you will that we have emphasised the two that are relevant. The first is 10.4(b). It provides that:

PN25

A casual employee will be paid an hourly rate equal to one‑38th of the weekly rate appropriate to the employee's classification plus a casual loading of 25 per cent.

PN26

As you have seen in the material, a significant focus of our attention is on the different ways that that provision can be read. Without jumping too far ahead, part of the controversy is we say it can be read as prescribing an hourly rate calculated based on the weekly rate and then a separate and distinct entitlement to a casual loading of 25 per cent of that amount. Against us is put that 10.4 essentially prescribes a loaded up hourly rate and doesn't prescribe separate and distinct entitlements.

PN27

Now, then if we go to paragraph (d), that deals with in essence the calculation of shift allowances for casual employees. Part of the controversy is the significance that should be placed on that as guiding the interpretation of the other provisions of the award. The short point here we would make is that that really is just articulating how to calculate those shift allowances. It's not a definitive definition of any sort of term in the award and we say that limited weight should be put on that in guiding the interpretation of other provisions.

PN28

That then takes me to paragraph 16, if you will. That deals with Saturday and Sunday work. In essence, it provides that there is a loading that is payable for this work and it's calculated on a relevant percentage - so either 50 per cent or 75 per cent - of the ordinary rate of pay. Now, of course we make the point that nowhere in the award does it actually define "ordinary rate of pay".

PN29

That then takes us to paragraph 17 of my submissions which deals with the overtime provisions. There again rather, in our view, unclearly it says that for overtime people have to be paid, in essence, time and a half or double time or double time and a half depending on the relevant public holiday. Again, there is no explanation as to what those premiums are multiplying. It doesn't say what you double or multiply by one and a half or two and a half times. Again, that's a core argument why we say the provisions are ambiguous and certainly uncertain.

PN30

DEPUTY PRESIDENT GOSTENCNIK: Doesn't "time" there refer to the ordinary time rate of pay given that we're talking there about hours in excess of the ordinary hours' work?

PN31

MR FERGUSON: That's what - and I might be jumping ahead - we say, in essence. Yes, you could construe that from the context of the award as a whole. It's prescribing a penalty rate that would apply when you're working outside ordinary hours and it would operate to the exclusion of anything that sets the rate for ordinary hours, and it would wholly regulate, you know, what you get paid as an hourly rate.

PN32

In essence, the controversy is then, well, what is the time of the ordinary hour rate for an employee? Now, for a permanent employee that's undoubtedly the weekly rates. There is no actual mechanism for this, but, in effect, you would reduce that to an hourly rate for a full‑timer by dividing it by 38. We say for a casual you adopt the same process. Looking at clause 10.4(b) you divide the weekly rate down to an hourly rate and you multiply that rate by that penalty to get the overtime component, then you still have to separately pay the casual loading.

PN33

A few inferences have to be drawn in order to get there because, as I say, in relation to 10.4(b) there is nothing in that that even says that's an ordinary rate of pay. It just says that it's payable - you know, they will be paid an hourly rate - which we say doesn't cause a difficulty on our interpretation because effectively when you get to applying penalty rates - which is an overtime rate - they displace the operation of that hourly rate provision and it's just the separate casual loading part that applies.

PN34

I think the short point here is we're trying to grapple with whether or not there is an uncertainty in the award and that's the case we advance; an ambiguity or an uncertainty. We say given that there is no clear definitions for these sorts of things, there's no express articulation of how you calculate them, that goes to our argument that clearly they are ambiguous or uncertain, then the next question is whether and how they should be varied.

PN35

I don't need to deal with penalties, but I'll go to paragraph 19 which sets out the payment for public holidays. It takes a slightly different approach. It says that generally in relation to 32(1)(a) they will be paid double time of their ordinary rate of pay, so it uses that phrase "ordinary rate of pay" again, but in (b) in the specific circumstances contemplated by that provision it talks about a loading of a certain percentage of the ordinary time rate.

PN36

It's sort of different terminology, but again the crux of our case is that we say, well, the ordinary time rate is that ordinary rate that applies to full‑timers reduced to an hourly rate for a casual and that's what you calculate this on, then you separately provide for the entitlement to a casual loading. That is, we say, the key provisions. We do point in our submissions to some other parts that we say provide contextual support for our submission, but I won't take the Bench through those in detail.

PN37

In chapter 4 we sort of set out the statutory framework that is relevant to these proceedings. We deal with relevant authorities dealing with section 160, both in terms of the process of identifying an ambiguity and the definition of an uncertainty. I will come back to those. We also then deal with all the relevant sections to our application seeking - this is our proposal that the award be varied pursuant to section 157 on the basis that it's necessary to achieve a modern awards objective. There is a lot of detail there. I have no doubt the Bench is familiar with those concepts. I won't go through that now of course.

PN38

In chapter 5 - I'll just briefly touch on this - commencing at paragraph 57, we deal with the relevant pre‑reform awards. The short point there is that through that chapter and also through the attachment we include with our submissions we set out our interpretation of what we say are the relevant pre‑reform awards and whether or not they apply the relevant penalties on a compounding or cumulative basis. Our contention is overwhelmingly that they apply a cumulative approach or something less beneficial.

PN39

Now, there is a contest in the submissions about whether our interpretation is right. I don't think that the Bench needs in the context of these proceedings to determine which approach is right in relation to each of those instruments. I think ultimately there is no contest that in the majority of awards - the predecessor awards - the cumulative approach or something less was the course that applied or the requirement that applied. In essence, we really say that this is relevant in any event because it goes to why the Commission should exercise its discretion to remedy the ambiguity, uncertainty or error. It also goes on one view to why it would be fair in the alternate to grant the application pursuant to 157.

PN40

Look, the inference we try to draw from this is that it appears that there would have been a practice prior to the introduction of the modern awards at the very least of many parties applying the cumulative approach. We do that in the absence of obviously evidence dealing with what's happening everywhere throughout industry, which we say is obviously difficult for us to advance in the Commission given this type of proceeding where the actual interpretation of the instrument is at issue. It shows that this isn't an academic argument, if you will.

PN41

That then really takes me to the sections of - and I will depart from following our submissions as rigidly at this point, because it takes me to the parts of the submissions that deal with the substance of our proposals or our claims that the award is ambiguous, it contains errors or that it shouldn't be varied.

PN42

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN43

MR FERGUSON: I will deal firstly with the issue of ambiguity or uncertainty. As I said, that is our primary contention in these proceedings; that there is an ambiguity or uncertainty. Can I take the Bench just to paragraph 33 of our June submissions. We there set out relevant passages from the Full Bench authority in Re Tenix Defence Systems Pty Limited Certified Agreement 2001-2004, PR917548, which we rely on and which has been often cited in decisions dealing with section 160. I think what we distil from that is that really there are four principles that apply where the Commission is looking at whether there is an ambiguity or an uncertainty.

PN44

The first is that the process of identifying an ambiguity involves an objective assessment of the words used in the provision under examination having regard to their context. It involves a judgment as to whether on the proper construction the wording of the relevant provision is susceptible to more than one meaning. It is not merely a word or words of a clause which give rise to ambiguity or uncertainty. A combination of clauses may have that effect and that's what we say occurs in this case. Finally, that the Commission will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions advanced and an arguable case is made out for one or more of those contentions.

PN45

In terms of uncertainty, I will just take the Bench to paragraph 39 of our submissions. We there point to a decision of the Full Bench in relation to the award review proceedings concerning the horticultural industry and an extracted passage from a decision of Polites SDP in Re Public Service (Non Executive Staff – Victoria) (Section 170MX) Award 2000. It sets out a definition for "uncertainty" which we say the Bench should adopt. In that context "uncertainty" means -

PN46

the quality of being uncertain in respect of duration, continuance, occurrence, liability to chance or accident or the state of not being definitely known or perfectly clear, doubtfulness or vagueness.

PN47

For the reasons we have set out in the submissions and I've alluded to in my initial treatment of the submissions this morning, we say certainly the provisions are far from being perfectly clear or their effect definitely known. We say in that context an uncertainty is established. Now, as I said, our submissions at chapters 7, 8 and 9 really deal with why we say the provisions are uncertain and ambiguous. I think really we set out three arguments there.

PN48

The first is that we say there is the existence of conflicting decisions of the Commission around the proper interpretation of certain of the provisions, which I'll come to. Then we say that we have established or set out a forceful contention as to the proper interpretation of the provisions and arguable reasons why our approach should be adopted, which conflict with the approach of the ANMF but also the approach in some of the decisions dealing with these provisions which I'll come to in a moment, particularly decisions in relation to Domain Aged Care. Finally, in chapter 9 we set out in particular detail why certain provisions operate in a way that renders them ambiguous and uncertain.

PN49

I just want to elaborate a little bit on the first two points. That is, the conflicting decisions and our proper interpretation. Now, in the first respect I just want to say something about a decision in the two‑year review of the Nurses Award which we deal with at paragraph 68 on of our written submissions in June. In essence, this was a decision of former Watson VP considering in the course of the review the proper interpretation of the weekend rates for casual employees.

PN50

In doing so, he concludes in essence that they should be calculated using what we have described as the cumulative method. He doesn't necessarily use that terminology, but that's where he lands in that decision. The crux of his reasoning is set out at paragraph 35, which I will just read:

PN51

In my view, in the case of more than one loading applying, these provisions do not require the penalty to be calculated as a percentage of the loaded rate. Rather, they require a calculation of each penalty on the base rate and the addition of the derived amounts onto the base rate. This reflects the normal notion that ... penalties are often required to be applied, but that penalties are not applied on penalties.

PN52

Then at paragraph 37 he goes on to say:

PN53

The loadings for Saturday and Sunday work in clause 26 are expressed to be applicable to "an employee" and calculated on the basis of their ordinary rate of pay. There is no exclusion of casual employees from the entitlement to receive weekend penalties. It is not disputed that casual employees are entitled to shift penalties for shift work and weekend penalty payments on weekends. The disagreement concerns the status of the casual loading on weekends.

PN54

In my view there is no basis in the award to exclude the application of the casual loading on weekends and therefore it continues to apply when a casual works on a weekend. The loading is not however applied to the loaded weekend rate. In my view the same method of calculation applies to weekends as in the case of shift allowances. Each penalty is calculated on the base rate. The resultant amounts are added together.

PN55

Now, that outcome or approach, if you will, accords with our assessment of how you calculate the weekend penalty rates. Crucially we say that reasoning of the former Vice President itself establishes that there is at least an arguable case for this contention, which is part of what we need to establish to satisfy the Commission that there is an ambiguity.

PN56

That then takes me to the decisions of the Commission in Domain Aged Care, which no doubt the members of the Full Bench will be aware and I'm conscious that Deputy President Gostencnik was on that Full Bench. It adopted a different approach. Those decisions found that the award should be applied adopting the compounding method, if you will. We have set out the relevant passages from both the decision at first instance and on appeal to a Full Bench. I think I just want to go briefly to the logic of the Full Bench in relation to this matter. It's dealt with at paragraph 74 of our submissions.

PN57

I won't take you through the entirety of the decision or the passages. We have been careful to set out all the paragraphs so that no one thinks there is any cherry picking. I think the heart of the logic of the decision as it pertains to weekend and public holidays is set out in paragraph 17. The Full Bench there said:

PN58

Clause 10.4(b) of the award says that a casual employee will be paid an hourly rate equal to one‑38th of the weekly wage plus a casual loading of 25 per cent. On a plain reading of the clause, the hourly rate includes the loading; the loaded casual rate is the ordinary rate of pay.

PN59

When a casual employee works ordinary hours on a Saturday or Sunday, clause 26 of the award requires the weekend loading to be applied to the ordinary rate of pay. For casual employees, this rate is the casual rate. The same is the case with the public holiday penalty in clause 32.1.

PN60

Now, what is apparent from that is that the Full Bench obviously took the view that 10.4(b) sets the ordinary rate of pay and as a consequence of that it formed the view that the various penalties and so forth that are referable to that sort of rate are calculated on that loaded up rate, which is the conflicting view that we take and the former Vice President took. We set out in our submissions why an alternate reading of 10.4(b) is available. In essence, that provision can be read setting an ordinary hourly rate and a separate casual loading. I'll come back to that, but that's the heart of the controversy in part as to why there are conflicting interpretations.

PN61

The Full Bench at paragraph 18 then goes on to deal with clause 10.4(d). I think in short it sort of says - or takes the view that that reinforces its view about the rate being a loaded up rate, if you will. In our submissions we have been careful to deal with 10.4(d). I don't want it narrowly put there, but there are two reasons not to place too much weight on that paragraph and this is where we depart respectfully from that Full Bench.

PN62

Firstly, we say that provision is dealing with the application of a shift allowance for casual employees. It's not defining ordinary rate of pay generally or the ordinary time rate. Secondly, we say that trying to glean a meaning from other provisions of the award from that section really assumes a level of drafting rigor in the award that doesn't align with the realities of the Part 10A award modernisation process.

PN63

I think the members of the Bench will appreciate that that was a phenomenal undertaking by the Commission, distilling a vast number of awards down into some 122. I think the realities are that there have been drafting deficiencies in the instruments that flowed from that process. It's obvious to say that that is demonstrated in part by the amount of work that has had to be undertaken by the Commission as part of the four yearly review in rectifying some of those deficiencies, which has obviously gone on for some considerable length of time. I say that without any criticism, of course, to those involved in the process.

PN64

Now, at paragraph 19 the Full Bench then deals with overtime penalties. It says as follows:

PN65

The Commissioner's conclusion that overtime penalties are also paid on the loaded casual rates of pay is in our view also correct. Clause 28.1 simply speaks of time and a half for the first two hours and double time thereafter for Monday to Saturday work, double time for Sunday and double time and a half for public holidays. The relevant time earnings for a casual under clause 10.4 include the casual loading.

PN66

Further, clause 28.1(c) provides that overtime rates are in substitution for and are not cumulative upon shift and weekend premiums. Nothing is said of the casual loading being excluded.

PN67

I don't think I need to read on in relation to that, but again I think it comes back to my initial exchange with Deputy President Gostencnik, which we say that that approach sort of overlooks the inherent uncertainties in those phrases "double time", "time and a half", et cetera. Also we say respectfully that the Bench has made somewhat of an unjustifiable leap, including that you calculate those amounts on the loaded up rate. We say that because, in large part, of our interpretation of 10.4(b) and the fact that you just can't assume that that prescribes a loaded up rate, if you will, payable for ordinary time.

PN68

Now, as I say, we do feel obliged to say that obviously we respectfully disagree with the interpretation adopted by the Full Bench in Domain, but we're at pains to say we're not - - -

PN69

DEPUTY PRESIDENT GOSTENCNIK: I am not terribly precious and you don't have to be respectful - - -

PN70

MR FERGUSON: Yes. The short point is though, to be fair, Deputy President, we're not denying the force of the interpretation entirely. That is why we're advancing an argument that there is an ambiguity, there are liable contentions and that both are arguable. That's why we have brought the particular application that we have, seeking to address that particular deficiency.

PN71

This really brings us to our interpretation, which I suppose I have actually come to in some way. We deal with that at paragraphs 76 to 143 and we do that in significant detail. We further develop it at paragraphs 22 to 39 of our submissions in reply. As I said, the crux of it is really that we say that clause 10.4 prescribes an hourly rate and a separate and distinct casual loading.

PN72

Now, I just want to make five points as succinctly as I can. Firstly, we say that that interpretation is available on a plain reading of the award and in our submissions we go to what we say are very contextual factors or indications supporting that approach. Secondly, we say that our approach is reinforced by the broader context of the award and in particular we point to the transitional arrangements that were included in the award when it was first made.

PN73

The Bench will recall that there were arrangements that applied and operated some five years after the award was made that provided for the phasing in of certain entitlements, minimum rates of pay, certain penalties - not overtime, but other certain penalties - and crucially the casual loading. They operated on the assumption, if you will, that the award prescribed different entitlements in our view for each of those categories of provision.

PN74

Thirdly, we point to relevant AIRC decisions from the Part 10A award modernisation process to provide further relevant contextual support for our interpretation and for, importantly, the contention that there is an ambiguity in the provision. In this regard I just want to take the Bench briefly to chapter 8, starting at paragraph 93 of our submissions.

PN75

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN76

MR FERGUSON: Now, the first AIRC decision we go to is a decision of the Full Bench in 2008, which was dealing with the setting of the 25 per cent casual loading in all modern awards; it's AIRCFB 1000. You will see at the top of page 47 we there set out what they relevantly said at paragraph 50. That was:

PN77

In all the circumstances we have decided to confirm our earlier indication that we would adopt a standard casual loading of 25 per cent.

PN78

Firstly, there is a casual loading that is standard, then they say:

PN79

We make it clear that the loading will compensate for annual leave and there will be no additional payment in that respect. Also, as a general rule, where penalties apply the penalties and the casual loading are both to be calculated on the ordinary time rate.

PN80

Well, two relevant issues fall from that. Firstly, it indicates a general intent, if you will, that the cumulative approach will be applied. We haven't identified anything in subsequent decisions to suggest that in relation to the Nurses Award there was some conscious decision to depart from that.

PN81

The second point I want to make here is the use of the Bench's phrase "ordinary time rate". It conceives of that as an amount which is separate to penalties and casual loadings, and that the casual loadings are defined on the ordinary time rate. That's a theme that flows through the award modernisation decisions which I will come to. We simply say that that provides contextual support for not rushing into interpretation of the phrase "ordinary time rate" in the award which would assume that the casual loading is part of that rate. It seems squarely at odds with the way the concept was contemplated by the Full Bench that made the award.

PN82

Then, and perhaps more specifically, we go to a decision dealing with the publishing of four health sector awards, including the Nurses Award. We extract the relevant provisions at paragraph 96 where it dealt with proper approach to the calculation of overtime rates, we say, in relation to the Nurses Award, including those other three awards. I will just read paragraph 150:

PN83

Some concern was raised in relation to the basis upon which a casual employee should be paid overtime. Two examples were given. The first is the separate calculation of overtime on the ordinary rate and the calculation of the casual loading also on the ordinary rate. The second is the cumulative approach. The ordinary rate plus the casual loading forms the rate for the purpose of the overtime calculation.

PN84

We believe that the correct approach is to separate the calculations and then add the results together, as illustrated by the first example, rather than compounding the effect of the loadings.

PN85

Now, we say that arbitral history, if you will, is relevant to the interpretation or the proper construction of the award. We say it's relevant to also the Full Bench considering the terms of the instrument and whether they contain an ambiguity.

PN86

DEPUTY PRESIDENT GOSTENCNIK: Mr Ferguson, in relation to paragraph 150 and the four awards that were published, if I can take you to the text of those four awards and perhaps it's convenient for present purposes to just highlight two of them. The first is the Health Professionals and Support Services Award.

PN87

MR FERGUSON: Yes.

PN88

DEPUTY PRESIDENT GOSTENCNIK: In relation to overtime rates at clause 24, clause 24.2(d) provides that:

PN89

Overtime rates under clause 24 will be in substitution for and not cumulative upon -

PN90

et cetera, penalty rates -

PN91

and the casual loading.

PN92

There the approach adopted was that the overtime rate is the only rate that is payable and it is in substitution of, relevantly, the casual rate, which appears inconsistent with what is set out in paragraph 150. The Aged Care Award seems to be in terms similar to the Nurses Award in respect of overtime. It has a specific provision for overtime for part‑time and casual employees which simply provides that they will be paid at the rate of time and a half for the first two hours and double time thereafter, except on Saturdays or Sundays where the rate will be double time and a half.

PN93

The only award that appears to give expression to what is set out in paragraph 150 is the Medical Practitioners Award which specifies in clause 20 a rate for the overtime rate and the casual overtime rate, which adopts the form of calculation that the Full Bench appears to set out at paragraph 150; so it has a Monday to Saturday overtime rate at 150 per cent and casual 175. After two hours, 200 per cent and 225, and so on.

PN94

Of the four awards, only one expressly adopts that formulation and another takes a completely different view. That is, it excludes casual loading altogether. What do we make of that for the purposes of how much store can be put into paragraph 150?

PN95

MR FERGUSON: Yes, well, I must say I'm little unable to deal on my feet with all the context of those instruments because I can't deal with it, but I can deal with it in part, Deputy President - - -

PN96

DEPUTY PRESIDENT GOSTENCNIK: Well, perhaps if it assists, Mr Ferguson, you can - no doubt we will get some time to have a short adjournment. Perhaps even in reply you can deal with that matter and I'll give you an opportunity to have a look at those provisions.

PN97

MR FERGUSON: I appreciate that. We have some suspicion of what has happened, but I don't want to mislead the Bench.

PN98

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN99

MR FERGUSON: If I can, yes, clarify my thoughts on that and come back to you.

PN100

DEPUTY PRESIDENT GOSTENCNIK: That's fine.

PN101

MR FERGUSON: One point I will say though in relation to that as we go is that I take your point that perhaps only one expressly deals with it, but on our construction of the Nurses Award that outcome as contemplated in paragraph 150 of the relevant decision is given effect under the current terms of the Nurses Award. We say that (audio malfunction) but I'll come back to you, Deputy President, in relation to the - - -

PN102

DEPUTY PRESIDENT GOSTENCNIK: I understand.

PN103

MR FERGUSON: One other point is of course in Domain Aged Care - and I won't read the relevant provisions - the Full Bench gives limited (indistinct) if you will, those decisions in part because it forms the view that the provisions are clear on their face. We say that that arbitral history is relevant - the point I was making - to both the assessment of whether there is an ambiguity in the terms and also the proper approach for progressing that ambiguity.

PN104

We rely in that context on the often cited Federal Court authority of Short v FW Hercus Pty Ltd (1993) 40 FCR 511 as authority for that proposition. We have cited it in our written submissions, but I don't - - -

PN105

DEPUTY PRESIDENT GOSTENCNIK: Mr Ferguson, you don't have to persuade me that in assessing whether or not there is an ambiguity, contextual matters including the earlier versions of particular industrial instruments are to be taken into account.

PN106

MR FERGUSON: I won't take that further then. We have set it out in our submissions, anyway.

PN107

DEPUTY PRESIDENT GOSTENCNIK: Yes. Thank you.

PN108

MR FERGUSON: The final point we make - and we make this at paragraphs 31 to 34 of our reply submissions probably most fully - is that we say that the legislative context in which the award operates just provides further contextual support for our interpretation. Now, I won't take you through all the specifics of that argument.

PN109

The short point there is that we say the scheme of the Act assumes, if you will - and the legislation - that there will within awards be ordinary rates of pay or, as it's termed in some contexts, base rates of pay. The separate amounts such as loadings - being the casual loading - are different and discrete entitlements. We have dealt with that in some detail in our written submissions and all the permutations of that contention which we just say weighs further in support of our proposal.

PN110

That then takes me to submissions regarding error. At paragraph 40, if I can turn to that quickly, of our June submissions we deal with another four yearly review award decision concerning the Vehicle Award. That there sets out in our view what is necessary to establish in order to show that there is an error for the purposes of section 160. I won't read all of that. We say that what the Commission says - or Full Bench says in paragraph 73 of that decision is that:

PN111

What is necessary is to show that some sort of mistake occurred, in that a provision of the award was made in a form which did not reflect the tribunal's intention.

PN112

We say, drawing largely upon that AIRC decision that we have talked about at some length, that clearly there is a mistake if the award doesn't provide for that outcome contemplated in that decision.

PN113

DEPUTY PRESIDENT GOSTENCNIK: Mr Ferguson, when you say clearly there is a mistake, the Full Bench published four awards. The relevant provisions I've taken you to are different. One view of paragraph 150 is that the concern raised is a concern that was raised in relation to the Medical Practitioners Award and that that has been rectified by the terms set out.

PN114

Putting to one side your argument about the proper construction of the Nurses Award and by analogy the Aged Care Award, it's also plain that the Health Professionals Award is in terms that are entirely inconsistent with that paragraph in the sense that casual loadings are not added at all. When you say there is clearly a mistake, don't we have to have regard to what was published by the Full Bench in order to ascertain what it is that the Full Bench was trying to deal with in paragraph 150?

PN115

MR FERGUSON: Yes. One moment of the Bench's time. I'm just going to take some material from - - -

PN116

DEPUTY PRESIDENT GOSTENCNIK: Yes, of course.

PN117

MR FERGUSON: Thank you for that indulgence, Deputy President. I have just been provided some material by Ms Bhatt. It certainly relates to the Health Professionals Award and it seems that there may have been some subsequent amendment to the relevant provisions following the making of the award. Some of that might be in contest in other proceedings currently. I think I will take the adjournment, if we have one, to get across that and come back to you.

PN118

DEPUTY PRESIDENT GOSTENCNIK: Yes, of course.

PN119

MR FERGUSON: I take your point clearly in the sense that there may be other events, firstly, that have altered the current situation in some these instruments and of course - - -

PN120

DEPUTY PRESIDENT GOSTENCNIK: Well, certainly paragraph (b) of 25.1 of the Aged Care Award was altered subsequently. I can't see a notation about the Health Professionals Award, but in any event I'm happy to receive whatever additional material you want to provide, Mr Ferguson.

PN121

MR FERGUSON: Yes, we'll come back to you on that and seek some clarify in relation to it.

PN122

DEPUTY PRESIDENT GOSTENCNIK: Yes, that's fine.

PN123

MR FERGUSON: I think the point we try to make in our reply submissions - we're at pains to point out all the passages dealing with that decision, so that you can see from the context that it's dealing with four awards - - -

PN124

DEPUTY PRESIDENT GOSTENCNIK: I don't dispute that it is there dealing with four awards. My question is about the differential outcome as between the - - -

PN125

MR FERGUSON: No, I understand and we'll come to that.

PN126

DEPUTY PRESIDENT GOSTENCNIK: Look, it may be, Mr Ferguson - I don't want to put undue pressure of any party - that a more convenient course might be to allow, say, a week for the parties to put in a note about that issue rather than doing things on the run.

PN127

MR FERGUSON: No, no, it may be appropriate. We will come back to you on that.

PN128

DEPUTY PRESIDENT GOSTENCNIK: Yes, all right.

PN129

MR FERGUSON: The only point before I leave that then is that the reason we set out the entirety - and I say this because there is a contest with the ANMF in that there they query whether those provisions pointed to the Nurses Award even. What we have done is try to make it clear, by setting out that full context of the passage, that it has revealed it is quite clear that where the Bench was dealing with specific issues in relation to specific awards - - -

PN130

DEPUTY PRESIDENT GOSTENCNIK: It said so. Yes, I understand that.

PN131

MR FERGUSON: Yes. Then earlier in our June submissions we just make the point that we have summarised the submissions about the Nurses Award, about this issue that were advanced. What you clearly can see is that the calculation of overtime rates was squarely in issue between the parties. I think the ANMF - or ANF as it then was - put up two proposals. One was for cumulative, one was compounding. It's there in the material and you can see why the Full Bench dealt with that in relation to that issue, but I don't need to take that further.

PN132

DEPUTY PRESIDENT GOSTENCNIK: Sorry, Mr Ferguson, just remind me what paragraph of your submissions.

PN133

MR FERGUSON: Yes, sorry.

PN134

DEPUTY PRESIDENT GOSTENCNIK: That's all right.

PN135

MR FERGUSON: What they're alluding to was chapter 6 actually of our June submissions starting at paragraph 62.

PN136

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN137

MR FERGUSON: Where we have there spoken about the different positions that were adopted by the parties, but then in attachment B at the back of the submissions we have set out - or extracted or summarised, if you will, the key positions advanced and included for completeness the links to the relevant submissions, so you can see the nature of the controversy. It starts with the ANMF and you will see there in the summary there were two rival contentions around how certain penalties should be calculated.

PN138

DEPUTY PRESIDENT GOSTENCNIK: Just bear with me a moment. I have that, thank you. Yes, sorry.

PN139

MR FERGUSON: I wasn't going to take you through all of that detail.

PN140

DEPUTY PRESIDENT GOSTENCNIK: No, no. I'm grateful, Mr Ferguson. Thank you.

PN141

MR FERGUSON: Yes. In relation to error, I think we have probably set out what I need to set out. I just make three short points. One, obviously you only need to get to the error point if you're against us in relation to the issue of ambiguity or uncertainty, because if it's ambiguous then - well, it can be dealt with that way. The second thing is, just to be clear, we're only proposing those aspects of the draft determination that deal with overtime as being supported by this error argument and that's because of our reliance on that decision that we talked about at some length, and the fact that it specifically averted to overtime.

PN142

I think, just for convenience, at paragraph 161 of our June submissions we identify those aspects of the draft determination that are linked to the error issue.

PN143

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN144

MR FERGUSON: A third point before I leave this, of course the approach we have adopted here is specifically that which was identified as possible by the Full Bench in Domain Aged Care. I'm not saying that they reached a conclusion in relation to that, but we have obviously taken our cues in some respect from that reasoning.

PN145

DEPUTY PRESIDENT GOSTENCNIK: Is that why I'm here?

PN146

MR FERGUSON: It might be. I was going to say something briefly in relation to retrospectivity. We have dealt with it in our materials. I won't elaborate, but we do say that it is obviously crucial if you are satisfied that there is a grounds for granting a variation under 160 that it be varied retrospectively to the commencement of the award.

PN147

Now, of course our primary concern here is that if that's not done employers will risk being exposed to litigation, disputation, underpayment claims in relation to the operation of the award clauses for the period between its commencement and the current date. We say that's a real risk because, as we said, the predecessor instruments clearly often adopted a cumulative approach.

PN148

The point we make in our submissions is that the FWO, prior to the decision in in Domain, seemed to adopt the position that the cumulative approach was applied. I think in terms of viewing industries perspective we have set out here that the ANMF - or ANF - seemed to have taken the view in the two yearly review and earlier in the four yearly review that it was the cumulative approach that applied. In the two yearly review the Commission itself said it was the cumulative approach that applied.

PN149

In all that context we think it's quite likely that there is widespread adoption of the cumulative approach in industry and so if a variation was to be made, we would say it's crucial that in the exceptional circumstances of this kind of error, all ambiguity occurring, that it be rectified retrospectively. We say there is enough in the material to justify that conclusion on what has been advanced and we haven't been secretive about the fact that we want retrospective variation. We note the ANMF have said they want to deal with that later. We don't say that course of action is necessary. They could have responded to this contention now.

PN150

That then takes me to that aspect of our claim that is advanced pursuant to section 157. In essence, that's the proposition that the variation is necessary to ensure that the award meets the modern awards objective. We have dealt both in our primary submissions and our submissions in reply in fairly exhaustive detail with why this is the case. We there have dealt in particular with all the mandatory statutory considerations that need to be taken into account and whether or not they weigh in favour of the claim or against the claim. I won't take you through all of that.

PN151

The point I want to emphasise, however, is that we can't see - and we say that there isn't - any justifiable reason why as a matter of merit that it's necessary that casual employees receive either a higher casual loading or a higher premium compared to other employees when they're working overtime or weekends or public holidays. We make the point in our material that really no compelling argument in support of this sort of windfall gain, as we have characterised it, is set out by the union in opposition to our proposal. We say that this general proposition alone necessitates a conclusion that this more generous approach is just not necessary in the sense contemplated by section 138 and ought be departed from.

PN152

I just want to make five points in support of this general proposition and the first is that the purpose of casual loadings and the purpose of the relevant penalties support our contention that you shouldn't have a different quantum being paid to casuals based on the days which they work compared to other employees, or the times. Penalty rates - I don't think this will be controversial - are generally paid as a disutility associated with working in particular circumstances: that's particular days or particular times. I think we refer in our material to the well-known 2017 penalty rates case as authority for that proposition, which dealt with penalty rates reductions in certain hospitality-related sectors, if you will.

PN153

The short point is casuals don't suffer any greater utility for working on a public holiday than other employees or for working on a weekend, so why should they get a higher premium? It's just not necessary in the context of a minimum safety net. Secondly, we say - I doubt it would be controversial - that casual loadings are generally payable in the modern award context to compensate people for the nature of their employment, the fact that they don't receive entitlements that full-time employees do. Many of those entitlements are referable to ordinary hours of work rather than overtime.

PN154

Again, we say there is no compelling reason why you should get a higher premium - higher casual loading, if you will - when you're working overtime or weekends or public holidays. Secondly, we say that a (indistinct) as necessary is supported by the proposition that it was the outcome contemplated by the ARC part 10(a) process. I don't need to take you through that again. We also say it's fair when you have regard to the fact that it was the outcome contemplated in the two-yearly review. I say that because not only did the Commission not troubled by that approach when it reviewed it and looked at it, but also clearly industry in light of that decision, would justifiably have been likely adopting that approach. It's fair to align the provisions with that endorsed approach for that reason. Fourthly, as I've said, we say that this approach of - cumulative approach, if you will - is consistent with the outcome of the 2017 penalty rates case. There, the Commission looked at (indistinct) and the idea of adopting this approach means that there is a neutral impact on whether people will select casual employees versus other categories of employment. We simply say that the landing reached in that decision provides further support for the outcome.

PN155

Finally, we say that this proposal - and this might be quibbled with at the edges how - the cumulative approach is the situation that applies in the overwhelming majority of modern awards. In our view, it is generally only been those awards where there is some specific indication otherwise, that the compounding approach is applied. The most common approach has been that the casual loading in some small number of awards is described as an all-purpose allowance or payable for all purpose of the award or words to that effect, depending on when the award was at the current stage of the exposure draft process.

PN156

The point is that the compounding approach is the outlier approach and there is no reason, based on the characteristics of employers covered by the nurses' award on (indistinct) awards depart from that standard approach as identified in the ARC as applies to the majority of employees being adopted in the nurses' award. They're the submissions, Deputy President. Otherwise we rely on our written material. Unless there are any specific questions?

PN157

DEPUTY PRESIDENT GOSTENCNIK: Not from me - colleagues?

PN158

DEPUTY PRESIDENT YOUNG: No, nothing from me.

PN159

COMMISSIONER YILMAZ: No, nothing from me.

PN160

DEPUTY PRESIDENT GOSTENCNIK: Mr Ferguson, thank you. Ms Wischer.

PN161

MS WISCHER: Thank you, Deputy President. If the Commission pleases, the AMF relies on its submissions of 31 July and is grateful for the opportunity to have a further submission on 1 September 2020, which we also rely on. We do seek to make some points with regard to the applicant's response submissions of 29 September but just in summary of our response: essentially what we say is that whilst - first of all we say, look, we don't necessarily accept the characterisation of controversy as outlined by Mr Ferguson and their application and I will go to those points. But essentially we would say that even had there been any controversy, the decision in Domain Aged Care has resolved that controversy and that the parties and industry can rely on that decision and it is a precedent of the Full Bench and at this stage, there is no basis for a finding that there is ambiguity warranting a variation or if any event there were, that there should be no discretion exercised because there is no basis for it, there being no evidence for that.

PN162

Yes, I'll just take you through our application but that is the essence of it, that this matter has been resolved and there is no need - essentially that this application has no work to do. The ANMF submission of 31 July - if I could just take you to some points in that - we set out who is covered by the nurses' award. There isn't 100 per cent perfect data but the AVS data collects as to who is not entitled to leave and that indicates that employees who don't receive leave are likely to be casual employees. There are some 29,000 nurses and midwives, 3,000 enrolled nurses and nursing support and personal care workers are estimated at around - are calculated at 23,000.

PN163

So this application does affect potentially a considerable number of people and it is more likely that those casual workers are engaged in places where they will be award dependent. So this is a significant matter for our members. We then look at award interpretation and we don't take issue with the applicant's characterisation of how awards should be interpreted. In fact, we say that this has been stepped through very carefully, both in Domain Aged Care and subsequently in the overtime for casuals decision. Essentially, we say that we look first at the wording, then at the context within the award and then broader context, including the history, which we understand, of course, there is no controversy about that means of identifying whether there is ambiguity, uncertainty or error.

PN164

When looking then at the award, the applicant has relied very heavily on the comments made in the two-year review decision. What we say about that is that that decision or the comment of the single member, Deputy President Watson, needs to be seen in the context of the issue, the controversy being resolved there was the question of whether casuals were entitled to both the casual loading and weekend penalty rate. If I could just refer you to paragraph 21 of our submission, where we emphasise that the comment made in regard to each penalty being calculated separately is secondary and, if you like, obiter dicta to the primary question that was being considered. We say then that the reliance that the applicant places on that to illustrate both ambiguity and potentially error is mis founded and that that weight should be accorded to that statement from this two-year review. Then we go at paragraph 25 of our submission to Domain Aged Care. I appreciate that we don't need to elaborate a great deal on that. But I think the absolutely important points to make are that the ordinary rate of pay is determined there for casuals by looking at the clause at clause 10 and establishing that first of all you look at the minimum rate, hourly rate, to establish the rate upon which the loading is added.

PN165

You then add that and that then is considered by that Bench to be the ordinary rate of pay for a casual for the purposes of the three matters that are in dispute here, being the public holidays, how they're paid, how you calculate payment for public holidays, overtime and weekend rates. Clause 10(4)(d) we say is clear and essentially carves out, only in that circumstance, that you use the cumulative method solely for the purposes of establishing how to pay a casual for shift work done Monday to Friday. We say that's an exception established by that clause and that that is as was found in Domain a construction that is supported both by that clause and how it is read in conjunction with the other clauses.

PN166

With respect to how you then look at those clauses for public holidays, overtime and weekend rates, they simply set out people working at those times will by paid double time or the loading. There is nothing there in those clauses that excludes the casuals from that. I think also just importantly at paragraph 28 of our application, where we refer to - and I think this deals with, without having to go into great detail - in Domain Aged Care, the question of what was aid in the award modernisation cases is referred to. The applicant makes a point that Watson's two-year review decision was not referred to.

PN167

However, I think it's important to note that Watson was a member of both of the 2008 and 2009 award modernisation decision and those are referred to in Domain Aged Care and the important point being that in consideration of those comments, saying that you might generally use the cumulative method rather, that is dealt with by saying, well, we look at the words. The words are clear. There is no ambiguity. There is no need to go there. We look to the words and essentially, because they are clear, there is no need to look further beyond there. We would then go on to say even if you do look, there is nothing to disturb that interpretation and nor is there ambiguity. We do say also that the applicant has asked this Bench, I think, in a number of parts of their submission to essentially ignore precedent or to accept that the precedent established is incorrect. We don't need to elaborate on the long understanding that precedent operates to provide certainty that when something has bene considered, particularly by a Full Bench, that that ought to be followed. It can't be a matter of a party expressing disappointment or that they wished there had been a different outcome. It's a matter of, "This is the outcome and there is no basis to disturb that."

PN168

We also then just do at paragraph 33 through to 41 a fairly detailed analysis of clause 10(4). We say that that detailed analysis supports the contention that there is no ambiguity and that there is a logical construction to that clause that supports the compounding method, particularly in 10(4)(d). If you look at the wording, it refers - and I think this addresses also some of the matters raised by the applicant, about what the meaning of, "ordinary rate of pay", is. What we would say is that the ordinary rate of pay in 10(4)(d) for a casual is a minimum rate plus the 25 per cent and that is made clear when you analyse 10(4)(d), that it suggests in order to arrive at the rate for weekends, for shift allowances, you exclude the casual rate from the ordinary rate.

PN169

It clearly infers that the casual loading is included in the ordinary rate for a casual in circumstances other than those described in 10(4)(d). That is further supported by them saying once you've excluded it, you put it back in again and add that to the penalty rate. We submit that that is exactly what Domain Aged Care decision is about and that is the exception, if you like, the rule otherwise being the compounding method. So looking at that close analysis and the meaning of, "component", and what, "excluding", means, we say that that - in the first reading of context, which is the actual clause, that is satisfactory.

PN170

You may be satisfied that you don't need to go further than that. But in the event that you do, we look out to the award. There is nothing else in the award that tells you how to pay a casual. It simply says, "These are the circumstances where casuals do attract penalties, overtime." You then have to know, well, what do we use and we go back to 10(4)(b) and 10(4)(d) to find out what is used to attract either double time or overtime. That is your starting point. The award as it is is contained. There is, again, we say you don't necessarily have to go further than that to be satisfied that the compounding method is offered without ambiguity within the award. The applicant, moving to paragraph 42 of our statement - our submission, sorry, and again in their final submission - quite a bit about the point of the transitional provisions illuminating some way that they say that because there are those they do not sit 100 per cent with the body of the award, that they suggest ambiguity.

PN171

We say simply that that is an irrelevant consideration for this Bench. The model provisions were adopted throughout the number of - the vast majority of awards. The purpose of those transitional provisions was simply to provide a mechanism to introduce rates that may have been different to previous rates in the pre-modern awards and that nothing further can really be taken from that. The applicant makes some query about our reference to the racing club event award. We raise that really solely to demonstrate that even where the transitional provisions and the award to which those transitional provisions were to apply have some discrepancy. They determine to simply put in the standard transitional provisions.

PN172

To that extent we say that decision points to the fact that really, there can be no reliance or inference to conclude that there is ambiguity or an error because the transitional provisions are not 100 per cent if they are in line with the body of the award and the entitlements there. We then address the question of whether there has been - we say in conclusion to the - that there is no ambiguity, that the wording is clear, the context is clear and I'll come in a moment to the historical background, really just for the completeness of looking at what ought to be considered to determine whether there is ambiguity or uncertainty.

PN173

With respect to error, we say that there would be no basis for concluding that there has been an error. The applicant proposes that an error can be identified because the wording of Deputy President Watson in the two-yearly review and the comments made in the award modernisation at paragraph 150, in particular, were not reflected in the wording of the nurses' award. I appreciate the opportunity to address those four health sector awards in more detail at some - after this and perhaps written submissions would be appropriate there.

PN174

But what we say about error - is it not that those words were definitive and had failed to be picked up in the nurses' award. Error in the decisions that we refer to in our submission are far more distinct and clearly identified. They're matters where, for example, the decision has said, "You will not do this", and a word is found to have been missing. If I could just take you to paragraph 58 of our submission, the decision in the vehicle award decision, which is from the Full Bench 2016, as part of the four-yearly review, the SDA sought to correct an error and the Full Bench there says:

PN175

The methodology was used which the SDA with the benefit of hindsight would prefer not have been used. Nothing was placed before us to suggest that the ARC did not intend to use that methodology or that some mathematical error was made in calculating the rates in accordance with that methodology.

PN176

MS WISCHER: We say that in this case, they're looking at a really quite particular error back in the award modernisation - well, there needs to be something identified. In this case it was how something was calculated, I understand, and simply that you did not get the preferred outcome is not a basis for establishing error and we would say firstly that with respect to the applicant's argument, that they did not get the outcome that they wanted as in the cumulative method was adopted. In fact, the compounding method was adopted in that award.

PN177

There is nothing in the previous decisions - being the award modernisation decisions - that in any way indicates that there was clearer in the nurses' award the compounding method will be used or the cumulative method or - sorry. There was nothing specifically say (a) that the cumulative method ought be used and that then there was an error made in the translation. It is far more mechanical - matter needs to be identified to demonstrate an error based on the decisions that previously looked at the question of error, particularly in relation to translation between what was said in the award modernisation process and what actually occurred in the modern ward.

PN178

I would then also refer back to the Domain Aged Care decision, which goes back then to ambiguity. But there is no basis, we would say, to find that an error has been made, because there is no transcribing error, there is no missing word. To import that there was an error because the comment at 150 was not reflected in the nurses' award fails to recognise the wording of the nursing award. That leads to the next part of our submission at paragraph 63, where we look carefully - and I won't go into the great detail that we have or to the wording in great detail - but this is relevant to a number of matters.

PN179

The pre-modern awards - there were a host of awards that related to nurses. We have identified 49, possibly more - could be up to 66. We say that there were 10 awards that were focused on in particular in the drafting of the award. Amongst those there were some that used the compounding method, some that used the cumulative method, some that said that casuals would not attract both the casual loading and the penalty or overtime or the shift allowance. There is basically a variety within those and various permutations and combinations of those.

PN180

So what we would say from that is firstly there was no industry-wide practice. The applicant relies on the argument that there was a common practice. The majority used the cumulative. We say, look, when you look at the awards that were considered in the making of this, there isn't a common practice. There are a variety of practices. What is clear in the making of the modern award, the nurses' award, there was open to them in their consideration, pre-modern awards that did use the compounding method and there is nothing we can point to specifically but it does very much appear that wording from the Queensland Nurses' Aged Care Award - that wording was adopted from the hospital nurses' award, that very closely reflects the wording that was ultimately put into the nurses' award.

PN181

So again, this suggests that there was no error made, that there was wording adopted that existed prior to the award. We are unable to say exactly how that was arrived at but it's clearly there. That wording hasn't come out of the blue. It hasn't been transposed from something incorrectly. So we say that firstly supports that there is no error and that there is also - that was a practice, the compounding method existed prior to the making of the nurses' award. It existed as a practice, as did other practices. So we say to that extent it supports our position and doesn't support the applicant. Yes, certainly referred to our submissions there.

PN182

In terms of the modern award objective, I won't address that in great detail now. We say that there is no basis for this Commission, this Bench, to grant the application under section 147. This Bench should be satisfied that in the making of the modern award, the modern award objectives were considered and were met. The decision, which again is an established principle, that that is the assumption that ought to be made and that that - I refer to the jurisdictional issues decision of 2014 - that is a standard approach to accept that those considerations were taken into account in the making of the award.

PN183

We would also address - the applicant has said that with casuals, if they were to receive the compounding award, they receive something of a windfall. We say, look, this is not the case. It's the entitlement. It's the identified entitlement that is in the Nurses Award. It is in a number of other awards. Our submission takes you to the range of awards that have the compounding method adopted. We also say that the Overtime for Casuals decision has further identified a range of awards that adopt and will use on the basis that the wording there - that the compounding method. So again, this is not a case of casuals in the Nurses Award being outliers or unusual; it is simply the entitlement as expressed in the award that has precedent, and there's no basis of evidence from the applicant as to why this should be disturbed. They have not produced evidence from the private hospital associations that they represent, nor the day centre organisation. There is no evidence to say that this has created unfairness, and I think we point out that this is an entitlement that's in the award.

PN184

The Fair Work Ombudsman has accepted that, and if I could also just take you to paragraph 105 of our submission where we set out a table, table C, which shows the amount of money at an hourly rate for nursing assistants at year 2, a nursing assistant with a Certificate III, enrolled nurse at pay point 1 and pay point 5, and a registered nurse at pay point 2. At each of these points you can see that there is money involved, and that is the money that is being paid. The Fair Work Ombudsman has published those rates, and for this application to be granted under section 157, we say well, look, this would be a serious and significant change to the award, which would result in a significant reduction in the pay of casual employees, who are nurses, assistants in nursing working in the health care sector, particularly at the lower end of the scale for the nursing assistants and enrolled nurses. Some of those are, without the benefit of loadings, their salary falls into the definition of being low paid. So we say for something as significant as this, the applicant has not brought the evidence necessary to prove their case, and the issue of windfall we say is simply not there.

PN185

Just briefly with respect to the concession, the applicant has said that the ANMF, or the ANF as it previously was known, has put forward the cumulative method. We say this goes no further than in the development of the exposure draft with respect to the rates to be paid on Saturday and Sunday, a concession was made in relation to the cumulative method, in that there was an agreement in the draft for the exposure draft, so obviously not a binding document in any way at this stage, that Saturday and Sundays should also be included in 10(4)(d), the penalties on Saturday and Sunday. We accept that that was an error, we apologise for making that error at this point, and we also say that the Overtime for Casuals decision does make reference to the fact that just because a party has agreed to something in negotiation for the exposure draft doesn't make it so. It is a determinative by this tribunal as to the wording, and obviously with the precedent of Domain Aged Care and how that is then used and reflected in the Overtime for Casuals decision, we say that, you know, basically more capable minds have, and authoritative minds have addressed this question, and so that little, if anything, can be made of that error that was made on our part.

PN186

With respect to retrospectivity, we would seek to make if this Bench is minded to grant any part of the application to adopt the proposed variations - we would ask that we be able to address specifically what would operate retrospectivity retrospectively, but what we would say is that since the Domain decision and the Fair Work Ombudsman publishing those rates and various enterprise agreements being considered and approved, this is the status quo, this is the rate. The applicant has brought no evidence of a floodgate of underpayment claims, and again, going back to saying well this being the rate, that is the status quo, you would be taking something away that currently exists, and to that extent the applicant is seeking to, we say, re‑write the award rather than clarify an ambiguity by this proposed variation. So we would strongly oppose retrospectivity, because the effect of that would in fact then be that the employers could be seeking recovery of overpayment, which for casual employees we would say would be both extremely onerous and an unreasonable task and not something that we would be able to - we would seek to protect our members from any such retrospective operation and exposure to claims of overpayment.

PN187

If I could then in closing - well there's a couple of matters perhaps that I should just see if I need to deal with, unless there are any questions. We essentially say that the current award, as it is expressed, does not contain ambiguity, uncertainty or error, and that there is no basis in evidence to vary the award to meet the modern award objectives, keeping in mind that those must be necessary, not desirable. I understand the applicant would consider it desirable to reduce the entitlements of casual employees, but we say that that's an assertion and a wishing something was so, but not supported by the wording or the modern award objectives.

PN188

If I could perhaps, Deputy President, just address a couple of matters that arise out of the applicant's submission of 29 September and my friend's submissions this morning?

PN189

DEPUTY PRESIDENT GOSTENCNIK: Yes, of course.

PN190

MS WISCHER: Thank you, Deputy President. The applicant in that submission has sought to suggest that the ANMF - or the preservation of the award as it currently is in some way disturbs the meaning of an ordinary rate of pay, a minimum rate of pay, a base rate of pay. We say that this is overcomplicating the argument, drawing in matters that are not relevant for consideration by this Bench. We simply say that 10(4) does some simple tasks: here's the minimum rate, you add 25 per cent, you then use it in this way for the calculation. We don't in any way suggest that the meaning of "ordinary rate of pay" as industrially understood is disturbed or needs any further clarification. It is a standard expression used in many awards to suggest that when then looking elsewhere in the award - - -

PN191

DEPUTY PRESIDENT GOSTENCNIK: It's a consistent source of disputation in my experience.

PN192

MS WISCHER: We would say with respect to this matter, the drawing in of doubtfulness by reference to what does "ordinary rate of pay" mean, and "double time", is not controversial with respect to this matter as to how you calculate for a casual, and that the - essentially(?) mischief that the applicant suggests has been caused by this clause has not been demonstrated. So we say that there is too much - that that is not - again coming back to Domain, it is clear that controversy, we say, is not evidenced here.

PN193

Equally, the applicant refers to the Fair Work Act at section 139 and section 206, for example, 206 saying that it can't pay less than the minimum award rate. Again, we don't see that that is relevant or illuminates any form of ambiguity or uncertainty. Maintaining the existing words does not in any way detract from the fact that there is a minimum hourly rate as set out in the award, which can be then - which is expressed currently as a weekly rate that can then be used as an hourly rate and you add 25 per cent to that. We don't consider that that part of the argument in any way advances or demonstrates ambiguity.

PN194

I think there's also just one other - they refer to pay slips. Again I would ask that the Bench not give any weight to that. It just doesn't we would say - we say it has no relevance; it doesn't illuminate the contextual argument at all. I think the other matters that arise from that submission of 29 September - yes, I have addressed. I think that was the only other matter I raise, but I do - yes, thank you. Thank you, Deputy President. Unless - I'm not quite sure how you do this - are there any other - whether I can speak to my friend - - -

PN195

DEPUTY PRESIDENT GOSTENCNIK: Your colleague?

PN196

MS WISCHER: My colleague, yes.

PN197

DEPUTY PRESIDENT GOSTENCNIK: Yes, sure.

PN198

MR CRUTE: No, Kristen. That has been pretty comprehensive.

PN199

MS WISCHER: Thank you. All right. Thank you, Deputy President. Unless there's any questions?

PN200

DEPUTY PRESIDENT GOSTENCNIK: None from me. Colleagues?

PN201

DEPUTY PRESIDENT YOUNG: No, nor me.

PN202

COMMISSIONER YILMAZ: No, none from me.

PN203

DEPUTY PRESIDENT GOSTENCNIK: Ms Wischer, thank you.

PN204

MS WISCHER: Thank you, Deputy President.

PN205

DEPUTY PRESIDENT GOSTENCNIK: Mr Ferguson, anything in reply? You're on mute.

PN206

MR FERGUSON: Sorry, it wouldn't be one of these conferences without someone doing it.

PN207

DEPUTY PRESIDENT GOSTENCNIK: You were making a great deal of sense until then.

PN208

MR FERGUSON: Yes. Just a small number of issues. I think in reality the ANMF haven't strayed too far from their written material, and in that respect we're largely content to rely on our written material in response to it. Where they have risen to some of contentions in reply, I make this observation that it's often not to do more than express opposition to it rather than any sort of founded reason why we're wrong. I think there's really just three points I want to address briefly.

PN209

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN210

MR FERGUSON: One is that the ANMF have been at great pains to press their reliance on the logic of Domain Aged Care. We've dealt with that obviously in our submissions. I think what is missing though is there has been no serious attack on the reasoning underpinning our proffered alternate interpretation. There seems to be, and I'm putting this perhaps simplistically, just a view that it shouldn't be open to us really to press that now that we have binding authority, and there's no serious attack on the reasoning of the Commission in (indistinct) review. Largely the submissions appeared, as I understood them, to relate to the fact that it has been overtaken, if you will, by Domain Aged Care, and I think the reason I press this point is, our contention is that there are competing contentions as to the proper interpretation and that they're arguable, and that that's the central premise for why we say the provisions are ambiguous. (Indistinct) we have a preferred approach, but that's the heart of this application, is that there's an ambiguity or uncertainty and the raft of interpretations advanced establishes that.

PN211

Secondly, there's some general criticism of our failure to bring evidence, partly as I think that we didn't bring evidence to establish the claim in relation to ambiguity, but I think it was also asserted(?) we didn't bring sufficient evidence to establish the claim under section 157.

PN212

DEPUTY PRESIDENT GOSTENCNIK: It's the 157 point I took from that - - -

PN213

MR FERGUSON: Yes, I think - - -

PN214

DEPUTY PRESIDENT GOSTENCNIK: - - - that are going to, yes.

PN215

MR FERGUSON: Yes. I think the short point there is to a large extent our claim doesn't rely on any factual assertions. We make our claim that a variation is necessary on the basis of industrial merit, if you will, having regard to multiple considerations, including the purpose for which, you know, penalty rates are payable, casual loadings are payable and so forth, and you know, by reference to what is in other instruments in the safety net. We don't have a need to bring (indistinct) to justify that variation in that respect, and that there's sufficient force to those arguments to compel the granting of our claim. But in any event, I note of course it's a bit of tit for tat, but the ANMF themselves have brought no evidence to substantiate any of the factual assertions they make about reductions in pay and so forth, but I don't really want to descend into that. As I said, our primary arguments in relation to what a 157 variation is made relate to industrial merit, and we say they're sufficient to justify the variation.

PN216

Then in relation to I think the issue of retrospectivity, there's a couple of issues. I think the truth of it is - I think it was in this context there were arguments put about what's happening at the moment and there not being evidence that people aren't complying with the new interpretation, if I can put it that way, as expressed in Domain Aged Care. I think the truth of it is that there's not a lot of evidence - well there's no evidence really saying what is happening either way but for the material that we have tried to advance in terms of, you know, the situation under the predecessor instruments, and we tried to draw an inference that well that would suggest there was a significant portion of employees applying the cumulative approach. We would then obviously point to the relevant decisions in the two‑yearly review, but also the position of the FWO that, up until Domain Aged Care, was promulgating the view that it was the cumulative approach that ought be applied. And then of course I think - you know, there's no criticism of the ANMF, but they themselves, both in the two‑yearly review, the four‑yearly review, have been publicly putting the position that it's cumulative, and then against that was also set out a significant number of undertakings that have had to be given by parties trying to get agreements through, post‑Domain, because they don't align with the compounding approach, which again is suggestive that people aren't necessarily adopting that approach in industry. I can't put it higher than that. It just suggests that there is a significant controversy here, and we can't simply take the view that well everyone has now changed and should be following Domain. We say that's wrong and undoubtedly the other parties do as well.

PN217

The only other final point on retrospectivity, we've advanced arguments as to why it should be granted. I think one of the concerns that fell from the ANMF was that if it was granted it shouldn't result in - I think where they were getting to was in relation to back pay, some sort of overpayment that they've received. If that's the case then it may be that there's just a form of words that can - in terms of any variation that can address that issue - I don't want to do it on the run, but if memory serves our submissions, talk about an outcome in one of the 160 applications, I think in relation to the telecommunications industry, where the Commission granted the variation retrospectively but in a manner that meant there was no sort of claim for restitution. So it may be that if we were successful, (indistinct) any orders that a landing could be reached but ensured people weren't having to backpay any overpayments, but I don't want to deal with that sort of comprehensively now. But there are no further submissions that I want to advance, Deputy President. It just leaves that outstanding issue that you raised.

PN218

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN219

MR FERGUSON: Which we're in the Bench's and the ANMF's hands - you know, if we were to take an early lunch break and return to just deal with that issue, I'm fairly confident we could do it, but I just don't want to waste anyone's time and I'm conscious Ms Wischer indicated her desire for written submissions I think, which we're willing accede with; it's just what's convenient to everyone.

PN220

DEPUTY PRESIDENT GOSTENCNIK: Ms Wischer, do you have a view?

PN221

MS WISCHER: Deputy President, we could probably address that with a short adjournment. It's a little bit hard to answer without having examined the task. Could I just very briefly go back and say, can I just apologise, I believe I might have referred to Watson VP as "Deputy President" so I could just ask that that be noted for the transcript. That would be "Vice President Watson."

PN222

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN223

MR FERGUSON: I'm sure we won't need very long.

PN224

DEPUTY PRESIDENT GOSTENCNIK: Well, are you suggesting we adjourn till 1 o'clock or 2 o'clock, Mr Ferguson?

PN225

MR FERGUSON: 1 o'clock would be - - -

PN226

MS WISCHER: To make it 2?

PN227

DEPUTY PRESIDENT GOSTENCNIK: I'm sorry, Ms Wischer?

PN228

MS WISCHER: Would 2 be acceptable?

PN229

DEPUTY PRESIDENT GOSTENCNIK: That's fine with me. Mr Ferguson?

PN230

MR FERGUSON: It's fine with me.

PN231

DEPUTY PRESIDENT GOSTENCNIK: A couple of hours?

PN232

MR FERGUSON: Yes.

PN233

DEPUTY PRESIDENT GOSTENCNIK: Yes, all right. On that basis, we'll adjourn until 2 pm to address the matter that arose from the exchange between Mr Ferguson and myself earlier and also to receive the ANMF's reply on that issue. We're adjourned.

PN234

MS WISCHER: Thank you, Deputy President.

LUNCHEON ADJOURNMENT [11.53 AM]

RESUMED [2.01 PM]

PN235

DEPUTY PRESIDENT GOSTENCNIK: Good afternoon. Mr Ferguson.

PN236

MR FERGUSON: Thank you, Deputy President. I think hopefully the members of the Bench will have received a short note Ms Bhatt filed.

PN237

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN238

MR FERGUSON: You may not have had time to digest it.

PN239

DEPUTY PRESIDENT GOSTENCNIK: I've had a quick look, yes.

PN240

MR FERGUSON: I think in essence the controversy around why there appeared to be an inconsistency between the wording of at least two of the awards - the health professionals and the medical professionals' award - and the relevant ARC decision in 2009, dealing with the intended approach in relation to overtime appears to be in essence because of variations that have been made to those awards in the award review process. In essence, they're the 2020 versions of the awards.

PN241

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN242

MR FERGUSON: So I'll step you through that very quickly. I think you'll see at paragraphs 6 and 7 we're talking about the health professionals award. It appears that it was a variation by the agreement of certain parties to expressly provide that you don't get the casual loading on overtime.

PN243

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN244

MR FERGUSON: Then what's happened post the decision in Domain Aged Care is that HSU has changed their position and then put into issue whether the cumulative or compounding approach should be applied. There is a decision that has been handed down in relation to that Full Bench proceeding around common issues for the overtime for casuals common issue. It's still a live matter. We're contesting the outcome in that matter before that Full Bench. But you can see how that's evolved. Then in relation to the medical - - -

PN245

DEPUTY PRESIDENT GOSTENCNIK: Although noting that in relation to the health professional services award has made the provision in respect of weekend work provided at 26.2:

PN246

A casual employee who works Saturday or Sunday will be paid a loading of 75 per cent for that work instead of 25 per cent - - -

PN247

DEPUTY PRESIDENT GOSTENCNIK: - - - which again, is essentially the proposition that you advance should apply in respect of all provisions.

PN248

MR FERGUSON: Yes. If I can say this in simple terms: we looked at all four awards when they were first made. On our approach to interpretation, you know, there are some differences in the wording that adopting the scheme that we advance, they all provide for the cumulative approach in relation to all the relevant entitlements, consistent with that 2009 decision. There are some differences in the structure. They often use rates - words - like double time, time and a half; some of them express the articulation of the casual hourly rate and loading in different ways - two sentences, if you will.

PN249

But in our view, all four of them line up with the 2009 decision in relation to overtime at the very least. But I think to draw a longer bow, we say that the cumulative approach is reflected in all of the relevant penalty rate provisions adopting our sort of logic. The only point that I will make that might advance this matte further is certainly in relation to the medical practitioners and the nurses' award - it doesn't appear that the relevant exposure drafts were changed following that decision in 2009. Really, in our view, that just sort of confirms that they are - that wording is consistent with that logic outlined in the 2009 decision.

PN250

So, yes, I don't think there are any sort of gremlins here, Deputy President. The difficulty that you are averting to really was a consequence of variations made well after the awards first came into play.

PN251

DEPUTY PRESIDENT GOSTENCNIK: Yes. I understand.

PN252

MR FERGUSON: I don't think I can take that further. The note obviously sets this out and makes reference - - -

PN253

DEPUTY PRESIDENT GOSTENCNIK: Yes, I appreciate that.

PN254

MR FERGUSON: There is nothing further unless there are any questions.

PN255

DEPUTY PRESIDENT GOSTENCNIK: Thank you, Mr Ferguson. Ms Wischer.

PN256

MS WISCHER: Thank you, Deputy President. This argument seems to be advanced on the basis that the cumulative approach was adopted in the original drafting. We certainly don't accept that as the proposition and we would say that the statement in the modern award decision is expressed as a belief. It's not as a direction or statement. It's the case that each of those four awards adopted slightly different wording, which is indicative of them all having their own industrial and/or pre-modern award history.

PN257

To the suggestion that that wording then can be used to demonstrate either an ambiguity or an error we say simply can't be made out. It's the context, related to each separate award. Essentially there was not a rule established to be followed in that comment, which is as I say expressed as a belief. Then to the extent that what has occurred in the overtime for casuals common decision, the wording with respect to the aged care award and the health professionals award have been concluded to support the compounding methods. So there is an error in the assumption that that was the case; that it was cumulative and intended to be in that wording back in 2008 in the awards as they were made.

PN258

So really, we would say that essentially you look at the actual words as has been indicated in both Domain and the overtime for casuals decision, which states then that unless it's expressly indicated otherwise, the casual rate is the loaded rate. I don't think that there is a great deal more we can say on that point. With respect to the medical practitioners' award, the controversy in that matter was whether overtime applied or not for casuals. I understand that it doesn't resolve the question in the overtime for casuals decision.

PN259

DEPUTY PRESIDENT GOSTENCNIK: Yes, all right.

PN260

MR FERGUSON: Just if it wasn't clear, in response to what Ms Wischer has put, obviously there is some significant reliance that is trying to be placed on the overtime for casuals decision. I think really the essential point we're putting there is that we're contesting that interpretation. The logic of the Full Bench in that case, in the first opportunity we've had to do that, which is in recent submission, we're not sure what course of action that Full Bench will take. They haven't issued the final determinations yet. They've issued the drafts and that's where we're contested the logic that Ms Wischer is there referring to. We set out in our submissions why we say this Bench shouldn't be moved by the logic in that proceeding. But I can't really take that further. As I said to you, our proceedings are about whether there is an ambiguity (indistinct) on the terms of the awards when they were first made.

PN261

DEPUTY PRESIDENT GOSTENCNIK: Yes. Anything arising, Ms Wischer?

PN262

MS WISCHER: Look, essentially, that the current state has superseded any Domain and has made the position clearer. We would consider that finalises the matter.

PN263

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN264

MS WISCHER: That's been followed in the overtime for casuals decision.

PN265

DEPUTY PRESIDENT GOSTENCNIK: All right. All done?

PN266

MS WISCHER: Thank you, sir.

PN267

DEPUTY PRESIDENT GOSTENCNIK: Can we thank the parties for their comprehensive written submissions and their helpful oral submissions made today. We will reserve our decision and publish our decision in due course. Have a good day.

ADJOURNED INDEFINITELY [2.11 PM]