PN1448

VICE PRESIDENT CATANZARITI: Thank you. Any changes in appearances?

PN1449

MR M DE CARNE: Yes, here in Sydney there is a change of appearance. Mr Crawford is unavailable, his wife's in labour. My name is Mark de Carne.

PN1450

VICE PRESIDENT CATANZARITI: Thank you. We wish Mr Crawford and his wife the best. All right, the first issue I want to deal with is the new witness statement, which the Bench has had a look at. Is there any objection to that witness statement from the union parties?

PN1451

MR BAKRI: Your Honour, there is no objection from the NUW.

PN1452

VICE PRESIDENT CATANZARITI: And the AWU?

PN1453

MR DE CARNE: No objection.

PN1454

VICE PRESIDENT CATANZARITI: All right, that will be made an exhibit, whatever the next number is. Exhibit 8.

EXHIBIT #8 STATEMENT OF KYLIE DUNN DATED 01/08/17

PN1455

VICE PRESIDENT CATANZARITI: Is there anything further you want to do with that, Mr Bourke?

PN1456

MR BOURKE: Sorry, your Honour?

PN1457

VICE PRESIDENT CATANZARITI: Is there anything further you want to do with that witness statement?

PN1458

MR BOURKE: No.

PN1459

VICE PRESIDENT CATANZARITI: All right. The Bench has had the opportunity to read the very fulsome written submissions and we don't think we will take the two days, hopefully, Mr Bourke, and the rest of the parties. Go ahead, Mr Bourke.

PN1460

MR BOURKE: Thank you. If the Commission pleases, in our submission, there is a problem with the Horticultural Award. It needs fixing. The problem is the question of coverage and where coverage should begin and end and, in our submission, the AWU and the NUW have not come to grips with that problem, let alone recognise that it needs fixing and that if nothing is done, the problem will continue.

PN1461

What we have heard from both unions is, "Let's just have coverage dealt with by way of the physical farm gate", assuming that is the current delineation under the coverage clause, with no meaningful grappling of the matters we identify throughout this case, including in opening, as to the difficulty of that being the dividing line, and we articulated a number of problems with that.

PN1462

One clear example of that problem was the view at Zerella and Mitolo. You have not heard a word - it's like we never had a view - you have not heard a word in the unions' submissions about Zerella, what was seen at the view, as against Mitolo and what the ramifications of that are, because they have no answer to it.

PN1463

What did we see? We saw exactly the same work being done at Zerella in the packing facility as done in Mitolo in their packing facility 1 kilometre up the road. We still really don't know what the AWU's position is, but the NUW and the Commission who approved the agreement of Zerella were satisfied because there was a token 1 per cent of spuds grown on the Zerella property - "That's behind the physical farm gate, you're under the Horticultural Award" and the direct competitor down the road, Mitolo, "You're under the Storage and Warehouse Award, and that demonstrated there is a problem, it's currently unworkable, it needs fixing and they haven't come to grips with it and we've never heard an answer. We never even heard the question raised or the issue raised in their submissions, and it's a massive problem.

PN1464

Then we have - we have heard particularly from the AWU, "The whole thing is sorted out by the Mitolo appeal decision and that also removes the ambiguity." Well, no, it doesn't. All that decision had to do was answer the question: what was the underpinning award for the BOOT test? Taking into account location, they said, "Mitolo, you're under the Storage and Warehouse Award", but you see any deep analysis of all the difficult questions of if you introduce location and assume that means physical farm gate, where does that begin and end? You don't have that dealt with - you don't have that dealt with - and so to suggest that all ambiguity is cured by that case is wrong.

PN1465

VICE PRESIDENT CATANZARITI: Mr Bourke, the AWU's primary submission is trying to suggest to this Full Bench that if we go down a different path, we are actually interfering with the Mitolo appeal Full Bench decision. For my part, I have some difficulty with their submission and understanding that point, but I am keen to understand why you say their argument is wrong on that point.

PN1466

MR BOURKE: We are in a totally new space. This is a four-year review, firstly, the Mitolo appeal said, "Please take this on."

PN1467

VICE PRESIDENT CATANZARITI: Accepting that point, the other point they raise, they say that some of the side comments in the Full Bench decision in the Mitolo appeal are determinatively the issue of coverage.

PN1468

MR BOURKE: Our answer to that is they determined that Mitolo, on the evidence, sat under the Storage and Warehouse Award. They did not remove all issues of ambiguity because they didn't drill down on what the physical farm gate means, what location means. They only made a determination in relation to Mitolo, and that doesn't take away the fact that there's - - -

PN1469

VICE PRESIDENT CATANZARITI: Did they have the benefit of any inspections?

PN1470

MR BOURKE: No. I think there was an invitation and it wasn't taken up. You will see two fundamental mistakes in that decision. You will see the passing comment about how close Mitolo is to the CBD in that decision. No appreciation of its rural setting. The second thing is they approached the case as the primary award should be the Storage and Warehouse Award. They had no recognition that that very award is drafted on the basis it's a default award when nothing else applies.

PN1471

VICE PRESIDENT CATANZARITI: Yes, for my part, I understand that submission and I had a close look at the NUW award, which makes it very clear.

PN1472

MR BOURKE: And they weighed it up on which is the better fit. That's wrong.

PN1473

VICE PRESIDENT CATANZARITI: Yes.

PN1474

MR BOURKE: If they both fit, the Storage Award loses. A fundamental mistake there. But this is not an appeal from the Mitolo appeal, this has been opened up by way of the four-year review, it's been opened up by way of a section 160 because whatever the Mitolo appeal did, it did not say there is no ambiguity as to coverage; it made a decision that Mitolo sat the wrong side of the supposed gate when it came to which was the underpinning award, not that there is no ambiguity, and the AWU referred to the fact of, "Let's look at the ordinary language." That was just a broad statement of construction as to their task, but they did not say, "These words are plain on their face and have a clear and unambiguous meaning."

PN1475

You won't find in the Mitolo appeal any discussion of the tough points that the AWU and NUW avoid, which is: does all the product that goes through the packing facility have to be grown on the same property, or is the NUW correct, even a token amount, 1 per cent, is enough? Are you behind the farm gate if any product is grown on the same property, and what happens if that product doesn't go through the packing facility, it goes somewhere else - might be a vineyard? But they don't answer that. Does it have to be on the same title? What happens if there's a fence between the packing facility and where the token amount is grown? Is the conclusion of the Mitolo appeal that if you have five farms, you need five packing facilities? All those things are opened up. What happens if a road is put through your property? They are simply not dealt with. Ambiguity.

PN1476

Underlying this, contrary to the AWU's submission that there is no ambiguity, the court in the Mitolo appeal, rather than simply reading the words and saying there was no ambiguity, this is the answer, they went back to the Modern Awards Statement to try and work out what it meant. That demonstrated itself that they were looking outside the words, demonstrated itself there's an ambiguity and, with respect, they did not have the depth of evidence that you have here. This was essentially an evidence case. They didn't weigh up - you've been there, it speaks for itself. It's not the test, but just ask rhetorically "What industry do Paul White, Frank Mitolo" - you met them both - "what industry do they work in?" You've seen both premises. You go, "Paul White, Zerella, horticulture." Frank, from Mitolo, you ask the AWU and NUW and they say, "He's in the storage and warehouse industry." You couldn't get further from the truth. They are clearly sitting - they're horticulture people, they're sitting in horticulture and, with that raw evidence, you can be comfortable in concluding they should be in the Horticulture Award and you're not restricted in any way by the Mitolo appeal.

PN1477

When we come to this concept, the other thing that's incredibly silent: no defence in terms of industrial logic of the physical farm gate, the blunt instrument of the physical farm gate, no defence why that should be the dividing line. You won't find it. You can read their submissions once, twice, you won't find it, and they have no answer to it, no defence why Zerella should fit in the Horticulture Award and have a competitive advantage to Mitolo down the road. No defence.

PN1478

It cannot be that the whole concept of the modern award regime and coverage - you'll say don't change anything, but can we come up with a logical reason to defend it - no. But that's what they originally came up with, if that is correct, when the first coverage award was crafted as in the fact that legislation didn't contemplate there would be four-year reviews to improve the outcomes to meet the section 134 objectives.

PN1479

What we are left with? If the AWU and NUW have their way and we leave it with - if this is correct - the Mitolo appeal approach of the farm gate, the physical farm gate, what are we left with? Massive area for disputation because all the evidence is one way. The agricultural sector view the farm gate as a virtual farm gate for the preparation of produce to the point where it's fit for consumption and in a mum and dad farm, that would be conducted on the one farm, but in the modern agricultural sector, where you need economies of scale, where, as a matter of logistics, you may have your packing facility somewhere else, you won't necessarily have it all in the one place.

PN1480

At the moment, the horticulture sector are acting on the basis that there is a virtual farm gate and we are sitting there for ripe disputation that if there's not a change done, what are we staring down? If, after this case, nothing happens, you have the NUW, AWU turning around and putting on one mother of an underpayment claim across the entire sector going back seven and a-half years which could completely devastate the sector and, if upheld, because we've been sitting in this period of uncertainty, clearly affect the viability of producers around Australia and, in our submission, that is not the intent of the modern award regime.

PN1481

This is in this context. AWU and NUW say, "This is all so easy, it's a physical farm gate, you can work it all out, it's sorted out in the Mitolo appeal." What have they done? If this is so clear cut, there's no ambiguity, what would you have seen over seven and a-half years when we know the horticulture sector is not operating under the physical farm gate, they are operating under the virtual farm gate? What would you see? You would see enforcement procedures being taken against producers going, "Ha, ha, your packing facility is on the wrong side of the physical farm gate, we're going to sue you for underpayments because it must be happening all over Australia because that's the evidence."

PN1482

What have they done? I'll tell you the evidence, and we put it in our chronology in opening. We had Kay Rault. NUW threw on a small claim in the Federal Circuit Court saying she was being underpaid because she's really under the Storage and Warehouse Award not under the Horticulture Award. Mitolo said, "Fine, happy to take you on, we're going to apply to have it referred to the Federal Court and we're going to seek a declaration that Kay Rault is covered under the Horticulture Award", directly in the face of the Mitolo appeal. What happened? They caved in within two days and pulled the case.

PN1483

That is the only evidence of any attempt over seven and a-half years to say, "It's all clear, it's all unambiguous, these are easy recovery claims." That's the only evidence NUW have done anything, AWU, nothing - nothing.

PN1484

I want to get rid of one other false point of the AWU. They say, "Look, don't even entertain this case because we had the Mitolo appeal" and we didn't take judicial review. That is an entirely false point for a number of reasons. My learned friend for the AWU, when he was raising these with his witnesses, described it as an appeal - they are not - judicial review, as this Bench would well know, the question isn't simply whether the Full Bench got it correct, judicial review, you've got to show jurisdictional error, you've got to show that they asked the wrong question. Well, they didn't, they asked the question: what's the underpinning award? Under the judicial review case then, if they get the wrong answer - there was no jurisdictional error, so that wouldn't have got us anywhere.

PN1485

The second point, we have the fact the Mitolo appeal actually saying, "If you want to sort this out, come here" - that's what we've done. The third, there's no way ambiguity is put to bed by the Mitolo appeal because they are not a court of construction, they are not binding, and in that Kay Rault case, the Mitolo appeal may have been persuasive to a Federal Court, but otherwise they will make the call. All these issues are entirely live.

PN1486

The inaction of the NUW and the AWU paves the way why something should be fixed now to get rid of this uncertainty - get rid of this uncertainty - and we'll come to this, but that's why it should be retrospective as well. They have sat on their hands. They must have known the horticulture sector has been operating based on the virtual gate and now they want to turn around and say, "Let's say it's the physical gate and let's continue that way, even though we won't tell you what the physical gate means." The NUW have not said what the physical gate means. We only know that if you do a token amount of product on a property where there's a facility, you come within the Horticulture Award.

PN1487

How does that work? How does that work in terms of industrial logic? The AWU, they said nothing until we got their closing submissions - their closing submissions. I don't know if you have them handy. They are breathtaking. If you could go to paragraph 48 under the subheading "Summary". This is the first time we find out from the AWU what they think coverage is about. It is page 13:

PN1488

For the reasons outlined above, the AWU does not consider that the Horticulture Award should cover an employer who does not undertake farming operations.

PN1489

I am sorry, but Mitolo do undertake farming operations.

PN1490

VICE PRESIDENT CATANZARITI: I was going to ask that question when we got to it from the AWU. I found that a strange point because what does that mean, as soon as you have some farming operations, the Horticulture Award triggers in?

PN1491

MR BOURKE: We have been going for days on this case. They finally do their closing where we go, "Okay, we'll finally find out what the AWU say" and they don't even mention location there, it's just undertake some farming operation. Anywhere? What amount? Does it have to be the same product? It demonstrate itself this needs fixing. These unions are in denial.

PN1492

Then this gets better. You go to 49:

PN1493

The Horticulture Award has been specifically developed for employers who operate a farm -

PN1494

Okay, that's us, good:

PN1495

and is not an appropriate award for an employer who operates -

PN1496

if you go highly mechanised. That is what the modern award coverage arrangements are about. If you have a mechanised arrangement rather than a mum and dad doing stuff on a card table, you go from one award to the next? Please. Are they seriously suggesting that the level of mechanisation determines coverage and are they seriously suggesting that is what the Mitolo appeal had in mind? But then it's got to be off farm - off farm - so are they okay with Zerella because they're clearly highly mechanised? Oh, they must be on farm because they grow their 1 per cent spuds. Oh, but it has to be - it's got to be outdoors - if it's indoor - indoor - where do you get this?

PN1497

They have not got any answer, any defence to our case. Is, seriously, coverage determined by whether your packing facility is going to be indoor, so your workers don't get rained on, it's got to be outdoor, so they do get rained on? If they are rained on, you're in the Horticulture Award?

PN1498

VICE PRESIDENT CATANZARITI: Paragraph 49, of course, on your submission, has been put at a very high level. It is saying the award was specifically developed for that purpose, and they can speak to this, but they have not given any evidence in this case as to that proposition.

PN1499

MR BOURKE: Nothing. Nothing. What you see is a Luddite type submission and it all comes back to "Just leave the Horticulture Award to a mum and dad operation where they may not be able to put a roof over the head of their workers and they've got basic implements rather than any mechanisation." Why we bother to call these modern awards. It's embarrassing. I don't know whether to laugh or cry about this because the evidence is the horticultural sector are screaming out for certainty, they are screaming out for an answer here, for the problem to be fixed and we get this, a sort of "Don't change anything."

PN1500

Just on this, I want to talk about certainty because even if the NUW and the AWU continue for the next seven and a-half years as they've done for this last seven and a-half years, if there's no change and don't bother to step up to the plate and say you're in breach because you're on the wrong side of a gate, the whole sector has to live with the uncertainty that such a claim may come in the future. They are always going to have in the back of their mind when they invest, "Well, what happens if I am sued" - subject to limitation periods, let's say for six years back pay - "and what happens if a court finds it was a physical farm gate that's the criteria and I'm sitting in a virtual farm gate because my place is across the road, or maybe they find growing 1 per cent of product wasn't enough?" That's always going to be in the back of your mind and if you're going to be talking massive claims, then, "How am I going to plan for tomorrow when I could be wiped out?" That's massive uncertainty that shouldn't be created because of a modern award regime.

PN1501

Do they have any logic why exactly the same activities, grading, washing, packing, because they're behind a rusted gate are horticulture, but, across the road, not horticulture, storage and warehousing? Nothing. Nothing.

PN1502

Can I say one other thing. There's been a complete overplay - first, there's been, let's say, an implicit if not an express submission, "The first Horticulture Award, we've done that, five-member Bench, so you don't need to fix it", as if the legislation didn't contemplate reviews. But, second to that, they talk about the stage 2 statement and then there's a reference to the farm gate, therefore that must mean physical farm gate. Well, it doesn't say that and if it meant physical farm gate rather than the practicality of a farm gate in terms of a virtual farm gate, why wasn't it spelt out where the parameters are? Not done. And there's no other detail as to why we arrive at the physical rather than what we have put forward on a logical basis, the virtual farm gate.

PN1503

You saw in the view - when is something a farm? You saw with Mitolo, they've got this area on the back where they do seed development. Why is 1 per cent of your spuds grown okay but seed development is not? There will be times where they do grow - there'll be farms where they do grow crops but the next year they've got to keep that area fallow, and you've heard that with potatoes, it can be up to four years. If a property is kept fallow, does it cease to be a farm? If you put a couple of llamas on it, does it become a farm? I don't know the answer to all these and they won't tell us - they won't tell us. What we get is just an arbitrary - arbitrary - outcome.

PN1504

Can I just say one other thing while I'm talking about the AWU just to get it off my chest. Paragraphs 50 to 58 - awful. You see an attack on Paula Colquhoun. We have not made any allegation that anyone that came before this Bench was not doing their best to inform the Bench as to the industry. What do we get from the AWU? "Ha, ha, ha, look at my cross-examination, I'll set it out, Paula Colquhoun, caught her out, she's either unreliable, maybe a liar, maybe a bit above." I can't work it out what's being said, but I can tell you one thing, no such allegations were ever put to her.

PN1505

How was she caught out? She got her wires crossed because, yes, we know you can't import potatoes, but she got her wires crossed and thought you can't export potatoes, she didn't know some fine financial information, but is that incredibly surprising - she works in HR. That is a reckless submission. They are throwing the kitchen sink at this, "We'll thrown an allegation here, there and everywhere, we won't come to grips with what the evidence was over all these days."

PN1506

You will see in the AWU's submissions their top two pieces of evidence, one, some definition out of the OECD 16 years ago of producer pricing which, in passing, talks about a farm gate. Brilliant. Two, something off the NFF website - I think it's paragraph 25 - they've pulled it off, never tendered, doesn't add anything. They say two pieces of evidence in the face of our tsunami.

PN1507

We've got a massive problem. Horticulture works this way. If physical farm gate applies, there's going to have to be a complete reorganising of the sector for people to fit in the horticulture sector, otherwise they're going to be sitting under the same award where you warehouse TVs and personal computers.

PN1508

Then we had try to be developed this idea of somehow if you're - - -

PN1509

VICE PRESIDENT CATANZARITI: Just before you move on, I must say that paragraph 25, which is from the NFF website and it wasn't, as you quite rightly say, brought into the hearing proper, for my part I have to say I had difficulty understanding what is a "vital value-adding process" that food and fibre go through. There has been no evidence led as to what that actually means. It talks about a process that food and fibre go through once they leave the farm. As I say, from my perspective, I don't know what that means and it's a bit difficult to run that in a submission. No doubt the AWU will tell us what it means.

PN1510

MR BOURKE: With respect, we haven't heard from not just the AWU, the NUW, we haven't even heard what their key plank, the physical farm gate, means. We haven't heard. Where it begins and where it ends, we haven't heard, but apparently there's no ambiguity.

PN1511

Then we had this theme develop: "If you're in a packing facility off farm, there's more value to your work, your work's got more value, and there's been no proof that there's a change or drop in value, therefore you can't shift it to the Horticulture Award, but in both submissions, we won't talk about the view because that shows they're doing exactly the same thing 1 kilometre apart." This is not a work value case and, in fact, it appears the unions' case, if you're doing exactly the same work, it's irrelevant, totally fine, that's in the Horticulture Award, but work for Frank Mitolo, no, and it just doesn't stack up and this whole issue of different duties, there's different values in their work and that's why they sit in one coverage against the other, it just defies the laws of gravity.

PN1512

A classic example we've provided is the Nildottie Farm which we purchased in South Australia. It had its own packing facility, people working there, but because of economies of scale, we kept the farm, we closed down the packing facility and all the packing is done at Mitolo at Angle Road. Somehow we're now - there's no change in the value of the work, but somehow we're now in the Storage Award.

PN1513

DEPUTY PRESIDENT SAMS: Isn't it the case that the employees work both outside and inside depending on climatic conditions?

PN1514

MR BOURKE: Correct, and it all depends on the type of set up, farms, how close your farm is, sometimes people go and help out somewhere else, some don't. It doesn't go anywhere and it doesn't justify a distinction of a physical farm gate which, if it ever applied, is well and truly rusted and off its hinge right now.

PN1515

Can we go to the Horticulture Award just to talk about the ambiguities. You may have our opening folder, exhibit 1, and the Horticulture Award is behind tab 11. If you go to "Coverage", which is clause 4, page 6, one of the most amazing things you may find, there's no reference to the farm gate at all. You won't find those words, let alone "physical farm gate". They say the whole thing is governed by the plain meaning of the words and we are all operating, apparently, on the physical farm gate, which no one knows - they won't tell us what it means - but it's not even there.

PN1516

Then you go to clause 4.1: "This industry award" -

PN1517

it is an industry award, not just a location award - "covers employers throughout Australia in the horticulture industry" - that's the driver - and employees in the relevant classifications.

PN1518

Then you go to 4.2: "Horticulture industry means agricultural holdings" - can I skip the next few words - "in connection with" - which has been well accepted to have a very broad construction - "the sowing, planting, raising, cultivation, harvesting" - those things are seen as sitting in horticulture and - "picking, packing, storing, grading, forwarding" - exactly the same things Mitolo and Zerella do - "or treating of horticultural crops."

PN1519

In our submission, properly looked at and with the benefit of the view - just take Mitolo at Angle Road, that Angle Road is an agricultural holding either taken alone or in the context of all the Mitolo farms around it and it's part of that arrangement and, as you heard in the evidence, it's in a rural setting and zoned for primary use, and it's said it is not an agricultural holding. But that definition, don't lose sight that what you are searching for is a meaning of horticulture industry and, as we said, it is as much horticulture industry as Zerella is. To say that it's not - well, there's clearly an ambiguity there - clearly an ambiguity.

PN1520

The other thing, you saw when you went on the view a really important step is grading. There's grading at a number of levels, sizes, quality, it's a really important step regarding horticulture and it's something you don't do when you do warehousing of TVs and personal computers, and you only find it in the Horticulture Award, you don't find it in the Storage and Warehouse default award.

PN1521

DEPUTY PRESIDENT SAMS: The only common word used in both definitions in the two awards is "storing".

PN1522

MR BOURKE: Yes.

PN1523

DEPUTY PRESIDENT SAMS: And it is clear that we saw some aspect of storing.

PN1524

MR BOURKE: Yes.

PN1525

DEPUTY PRESIDENT SAMS: Not for very long.

PN1526

MR BOURKE: Yes.

PN1527

DEPUTY PRESIDENT SAMS: So that would appear to be the only similarity between the two definitions.

PN1528

MR BOURKE: Yes, but in giving colour to what is the industry, one award, the front and square industry is storage and warehouse. Now, you went to the view, and I'm sure Commissioner Saunders is fully briefed on what was seen, you don't walk into those plants and go, "Oh, boy, really this is storage industry here or warehouse, this is definitely a warehouse industry." You don't say that, whether it's Zerella or Mitolo, but, of course, as part of horticulture, you need to store before you take something to market, but, on the evidence, storage is not the raison d'etre of horticulture, it's getting produce to market when it's required to be got.

PN1529

It is played up, I think in the NUW's submissions, "Aha, there was some evidence apples and pears you can store for up to 12 months." Yes, fine, but that's not what it's about. That's not what they are about. They're about getting produce ready for when they are required for market. They are not there as storage facilities. If that logic is correct, well, can they explain to us why it's okay for apples and pears to sit under the Horticulture Award if that packing facility sits on a farm where they happen to grow apples and pears, but if they grow them across the road, it's not? It just unmasks the falsity of these types of points.

PN1530

But that is critical. You've got a critical function, grading, that's not replicated and it shows why the Storage and Warehouse Award is not a good fit and we adopt strongly the NFF approach that what you're really talking about is seed to bag, whether that happens at a mum and dad one-plot farm or something more complex where there's a central location, that should be covered by the same award.

PN1531

What you don't see in our submission is a third filter coming through to coverage. It's industry, it's classification, but you have to then - if, realistically, you sit within horticulture, do you then say, "Yes, let's have another separate thing, location; are you behind a physical farm gate?" Doesn't work.

PN1532

Then let's come to the Storage and Wholesale Award, tab 12. If you go to their coverage clause, clause 4, in our submission, you start with 4.1:

PN1533

This industry award covers employers throughout Australia in the storage services and wholesale industry.

PN1534

You can't move away so quickly from the actual description of the industry, the actual description of the award, what are its drivers, and then the other indicia classification, and then you go to 4.2(a) and there's a reference to the fact that it's a default award: "Notwithstanding 4.1, the award does not cover" - and then it goes on. It is clearly a default award, so if there are two awards that are appropriate, this and another, you default to the other. This is a fall-back award, a point completely missed in the Mitolo appeal.

PN1535

Then if you go up, you will see the definition of storage services and wholesale industry. It means:

PN1536

Receiving, handling, storing, freezing, refrigerating, bottling, packing.

PN1537

Nothing about grading, "Or sale by wholesale, of produce". Okay, that can fit into some of the things done in horticulture, but then look at the others, "goods or merchandise". That is telling of the real driver where this award is to sit, and then you go further down the page, about point 6 of a page:

PN1538

Wholesale means the sale of commodities in large quantities other than to final consumers.

PN1539

It is really front and centre being directed towards large warehouse activities, not the stuff that goes on either at Zerella or Mitolo.

PN1540

Where the better fit just from the starting point and just while we are on awards, if you go back to our written submission at 82, the AWU, they put in this submission, "Look, I know physical gate's all about location, but who cares because some awards are about location?" The fact that some awards may have been driven by location doesn't mean it's right, doesn't mean it meets the requirement of 134, doesn't mean you turn your back on trying to fix something as part of a review.

PN1541

We have set out what they put in their opening submissions - completely fallen off the back of a truck in their closing submissions - the Queensland award, which was the predecessor of the Horticulture Award, and they say this was an example, it's location and, in fact, it is simply driven by whether the produce being dealt with has come from a farm in Queensland. It doesn't even have to be from a farm you own or you are related in. They rolled this out at the beginning of the case as this is the way the coverage clause should work. Well, we fall front and square inside that coverage claim, that coverage award, and so although there's no ambiguity, they have backed out and they no longer want to refer to that in their closing because it's undeniable we would fit into that clause.

PN1542

Can I say something about the Horticulture Award. What we have had is a submission from the NUW. They say two things. They say, "Approach the Horticulture Award prima facie that everything's okay and it already meets 134, so you don't need to change anything. Start with that." We point out the problems, and so they then say, "Oh, well, if people are moved because of a change in coverage to the Horticulture Award, they'll have wages and conditions that don't meet the appropriate safety net." "What? But what about the prima facie everything's okay?" "No, no, no, you have to prove - you have to prove that the horticulture wages and conditions do meet the safety net in order to justify the award coverage change." No, we don't. We're entitled to presume that that criteria was met when that award was made, the first modern award was made, and there's been no challenge to that.

PN1543

We are here in a four-year review where the NUW and AWU have not said "Boo" that the terms, in terms of wages and conditions, are not appropriate or don't meet that objective. You can act on the basis they do meet that objective and, as a result, people are not being left high and dry because of an award coverage change which clarifies the whole thing in accordance with the way industry operates, they move from ostensibly, purportedly under the Storage and Wholesale Award to the Horticulture Award. They are trying to walk two sides of the same street. They can't do it.

PN1544

In our submission, consistent with the whole legislative intent of a review, we have identified why there can be improvements to this award in order to meet properly the 134 objectives because of what the situation is we have regarding coverage.

PN1545

Can I come to - this is something - you won't see this word - you might, but I don't think you will - "flexibility". There is no doubt and no challenge that the Horticulture Award was crafted because of the need of the sector to have flexibility in terms of the type, the regime, particularly the regime in terms of when people can work before you're kicking in with penalty rates and the level of penalty rates, and you've had an enormous amount of evidence as to why that's the case: the nature of the produce, seasonal factors, harvesting times, impact of weather, pressures in terms of meeting orders, et cetera, et cetera, et cetera.

PN1546

They put nothing to say that's wrong; they just don't talk about it, in the same way as they don't talk about it's irrelevant, that they don't talk about that we had a view. The other thing they don't talk about is why that need for flexibility, which clearly Zerella need it, but if you move your packing facility across the road, suddenly you don't need flexibility. Why not? "I'm not going to answer because I don't talk about flexibility, all I talk about is Mitolo appeal decides everything." There is, again, no industrial logic for their position, they just want to ignore it.

PN1547

Once you factor in as a guide to where the coverage should sit, does the need for flexibility change because one guy's got 1 per cent of their spuds grown on one plot, the other guy's got a central facility because they've got farms around the area? No. Does the need for flexibility change because some guy has got a roof over the head of their workers and someone hasn't or someone's more mechanised than someone else? No.

PN1548

In our submission, the guiding rods for coverage should be industry, classification, not industry, classification and so-called location, and what we currently have, if the unions are correct, is not a level playing field. It cannot have been the intent of the modern award regime that businesses basically doing the same thing, competing head for head a kilometre away are under different awards.

PN1549

Can we then come to the 134 criteria. That starts in our submissions at 91. Can I just say this: the AWU have engaged so much in this process they have not even referred to the 134 criteria. That's front and square what you have to do. We've got the OECD and what they've pulled off the NFF website. Great.

PN1550

We have criteria (a). We have dealt with relative living standards and needs. Again, you can be satisfied that is properly dealt with by the Horticulture Award. Under that category, the NUW roll out, "Oh, oh, but under the Horticulture Award, although it's prima facie all good, you can enter into a piece worker agreement." Yes? "But under clause 15.6, it's got to be voluntary, under clause 15.2 you've got to be paid 15 per cent more than what the average worker would earn." What's the problem with that? Heard nothing.

PN1551

Then we've got "encourage collective bargaining." We win hands down on that. We've currently got a stand-off, unions saying, "It's the physical farm gate, if you've got a facility off somewhere else, you're under the Storage Award", the industry is saying, "No, we're not, we're under the Horticulture Award." It's a stand-off. If no one can agree on what is the underpinning award for the BOOT test, how does it get off the ground?

PN1552

Then we have the NUW, in a mysterious submission at paragraph 50, they say, "Look, it will undermine collective bargaining in the whole of Australia" - whole of Australia. They name three agreements they say involve packing facilities that are currently being made under the Storage Award. How, somehow, if the coverage clause changes, that undermines collective bargaining in relation to those agreements, I've got no idea. It doesn't undermine the agreements themselves because the BOOT test would be lower. There's no reason they can't make another agreement.

PN1553

To show how hopeless that submission is, the three agreements they refer to, one is Select Harvests - and this is all set out in Kylie Dunn's statement recently tendered, exhibit 8. That's a vertically integrated value-added business, it's roasting, it's chopping up nuts, it's not seed to bag business. That's in Thomastown, that's where the EA is. It has a facility in Carina West in Victoria where it is a packing facility and, guess what, that's under the Horticulture Award. That's one of the three they've rolled out.

PN1554

The second one, Costa Logistics, their own website, it's a distribution and logistics centre, it's not a packing facility, and there's no reference even in that agreement to the Storage and Wholesale Award. We are left with one agreement.

PN1555

Then we have 135(c). That's accepted by the NUW to be neutral, and then (d), flexibility in work practices, efficient and productive performance of work. We tick every box and the risk is if the union is correct, we are going to be having people growing token amounts of product where they shouldn't have to or setting up facilities in multiple farms when they shouldn't have to and it's not generating efficiency, it's not generating productivity. The NUW put no submission that (d) supports them. No submission at all. All they say is, "You haven't really put on enough evidence to prove any of this." Sorry, we've got an avalanche of evidence showing how the sector runs and why there is a need to fix this up.

PN1556

Then you have (da), additional remuneration for employees working overtime. Again we make the submission there's no suggestion that the Horticulture Award has not met that objective.

PN1557

(e), equal remuneration - we're up to paragraph 115 of our submission - NUW don't say that that supports their position and, in fact, totally contrary. We've seen it flesh and blood, Zerella and Mitolo, why shouldn't exactly the same work be paid exactly the same?

PN1558

(f) is, again, all one way and the NUW did not contend otherwise. Everything can't be decided in terms of whether you've got a competitive advantage or not depending on whether you are on the right or wrong side of a physical gate.

PN1559

Then we have "simple and easy to understand." The NUW say, "Yes, it is." Okay, can you answer somewhere all the difficult questions we asked because we've never heard you? Have you tackled them in your closing submissions or your opening submissions? No, you haven't. The reality is it's a total nightmare and the industry is at war as to what it all means.

PN1560

Then we come to (h), likely impact, performance and competitiveness. We tick every single box. NUW make no submission that supports them.

PN1561

The AWU makes some submission - I'll come to it - that our variation, that somehow we're making the enterprise liable for the payment, not the employer - it's clearly not. I might go to it now. If you go back to our folder, exhibit 1, the opening folder, we have a marked up version at tab 8. This is of our proposal. When I said the NUW and AWU were in denial, one part of that is, "Let's change nothing even though no one knows what anything means; let's not come up with a proposal." We're the only ones coming up with a proposal.

PN1562

Can I just say one thing: NUW and AWU, when we circulated our proposed variation, which all, I think, employer groups adopted, they then filed their opening submissions, AWU and NUW. If they had a problem with that variation in terms of, "Well, I think this could cause some difficulties", what do you think they might do? Say so? Nothing. Nothing. We have heard, for the first time, some nit-picking. You try and draft something that may be perfect, but we had nothing until closing, nothing that could be explored in the evidence, it's come way too late. They haven't grappled with any of the hard issues in this case.

PN1563

Let's just come to our proposal. We have a definition of enterprise, which includes:

PN1564

An employer that is engaged with others in a joint venture or common enterprise.

PN1565

You have heard the evidence that these aren't plain manila arrangements where the same business owns the land, employs the workers, owns the machinery, grows the product, we laid it like Mitolo, but it doesn't mean, as the AWU said, "You're suggesting the enterprise would be liable for any payment." No, it's clear it's the employer that will be liable to make the payments. But, in assessing whether that employer sits in the industry, you look at where they sit as part of an enterprise and it would be artificial, for example, to look at Mitolo and not look at all their other related entities and how their business operates.

PN1566

Then there is the complaint about the fact we've referred to bodies corporate, related bodies corporate. That is straight out of corporations law, you know, with the NUW saying, "We might have to do a company search." Please, if you have to do one, do one. These things are not difficult.

PN1567

Then, 4.1, the industry award covers employers, they are the people that are liable. Then we have, at 4.2, "horticultural industry means" and we've got sowing, various activities in connection with a horticultural enterprise, and that then is a complaint of the NUW, "Oh, 'in connection with' is a broad term." Yes, but well known and, can I just say, it's already in the Horticultural Award. They are saying, "Oh, 'in connection with' would be ambiguous.'" Well, it's already in the Horticulture Award, which apparently is unambiguous.

PN1568

So, "in connection with" for horticultural enterprise - and we have that at the bottom of page 1 - horticultural enterprise means an enterprise which is an important part of its enterprise engaged in the raising of horticultural crops. And now the NUW, "Oh, I've only just noticed 'an important part', that could be broad", and we have dealt with that in our opening submissions at 167 to 182: it is a stock phrase used in the Fair Work Act itself. So, the Commission is used to dealing with this.

PN1569

Then we have this argument, "Oh, you've got to show that it's necessary." Well, it is necessary, but all we've got to show is it's necessary to meet the objectives of 134 and we meet that plus. Is anyone seriously saying we don't need a clear and effective coverage clause for horticulture? No.

PN1570

We say we well and truly meet the requirement, the jurisdictional requirement, when it comes to a section 160 case of ambiguity or uncertainty. The NUW, at paragraph 86, cite the Re Tenix case. Yes, that's a like case. But they then, at 88, cite the Timber & Allied Industrial Award decision of Justice Munro which refers to the slip rule. That is in relation to - if you look at section 160 - section 160, in the predecessor Act, had two parts, one in relation to ambiguity and uncertainty and another one just to correct error, and the suggestion of Justice Munro that you apply this like a slip rule is in relation to correct an error. We are running on ambiguity and uncertainty, so you don't treat the ambiguity and uncertainty provision, which has been found to create a broad discretion, and treat it in a narrow way that it's confined to operating under the slip rule.

PN1571

There is no better evidence again than the view. There's got to be an ambiguity when, because of an arbitrary bit of spuds grown, Zerella is under one award and Mitolo is on another.

PN1572

We then come to - this is at 142 of our submissions - okay, you need to make a variation, do you make it retrospective? We accept that you need to find exceptional circumstances, but we say they are here. For seven and a-half years, you've got the industry operating on the virtual gate, you've got the NUW - as far as we're concerned the AWU has said nothing for seven and a-half years - claiming it's a physical gate, never enforced the position of any underpayment claims and then are you going to allow a tsunami to launch post this case or are you going to remove the uncertainty and give clarity to the industry so everyone can move on.

PN1573

In our submission, it would be a catastrophe if any variation was only prospective and the next minute we have this massive litigation, the NUW launching cases all around Australia against producers, they're all going around Australia checking whether their packing facility is outside a rusty gate or not and launching a massive case and over seven and a-half years, you know it's going to be worth millions, people will be wiped out, people will lose their jobs. Is that what the modern award regime is about?

PN1574

Unless there are any other matters?

PN1575

DEPUTY PRESIDENT SAMS: Are there any other authorities on this retrospective question in the award review concept?

PN1576

MR BOURKE: We are treating it as a separate application, so award review will get no retrospectivity, you have to trigger section 160 and also say there's an ambiguity and then we meet the exceptional circumstances. If the Commission pleases.

PN1577

VICE PRESIDENT CATANZARITI: Yes, Mr Smith?

PN1578

MR SMITH: If the Bench pleases, we have filed, as you would be aware, a very detailed final submission and I note your Honour's comments about all the members of the Bench having read the submissions, so I won't, you'll be pleased to know, go through all of that content in detail. We have also filed a list of authorities with links to the various materials that are referred to in that final submission. What I would like to do is just reinforce some of the key points and deal with particularly a few of the issues that come up in the AWU and NUW submissions.

PN1579

As you are aware and just as alluded to in the interchange there with Mr Bourke, there are two applications being heard jointly, a 156 matter relating to the review matter and a 160 application. As we have set out in our descriptions of relevant extracts from the legislative framework and the preliminary jurisdictional issues decision, it is entirely consistent with the four yearly review for those two matters to be dealt with together in circumstances like those that are before you.

PN1580

In our written submission at section 4, we have set out the diagram there that I talked about at the opening of the case and we think that schema is the way that the Bench should look at this issue, that it should look at the Horticultural Award as existing and applicable to all of the activities that sit within the farm gate, being the first point of sale from the producer to the customer and then the other awards fit behind or after the farm gate and it depends on where, in the case of potatoes for example, whether they go to Simplot to turn them into Birds Eye frozen chips or they go to Woolies and Coles to sell them to consumers.

PN1581

In our submission, we have later cited some useful comments that Paul Richardson, now the Assistant National Secretary of the NUW, highlighted in the Food Processing Award modernisation proceedings where he was talking about those big companies like Oxford Cold Storage and other companies like that where the Simplots and the Mondelez and the Krafts and so on will often store frozen food products before they go to the supermarkets, so there is some coverage food products within the Storage Services Award, but we don't see those as in any way the sorts of issues that we are dealing with in this case.

PN1582

In our submissions, we go into some detail about the concept of the farm gate and we strongly put the position, as we have all the way through, that this is a concept, it is not a gate hanging off a wooden pole at the entrance of a farm. As you are aware, there is nothing in the award modernisation materials that properly defined what was meant by the farm gate. In the final decision when the Horticulture Award was made, there is a reference to the farm gate, but it just talks about the coverage of the award stopping at the farm gate; there is no definition of what that is, whether it's a concept or a physical location.

PN1583

We have set out in a significant amount of detail and we have provided links to all of the relevant transcripts and submissions made by the parties in the award modernisation process that highlight that all of the versions of the Horticulture Award that were given to the award modernisation Full Bench covered storing and packing and so on and none of those drafts in any way limited the activities to a physical location. To the extent that there is this concept of the farm gate, it's just a one-sentence reference in the final decision and, of course, that reference is of relevance, but, in our submission, when you look at the materials properly, it is a concept, it is not a physical location.

PN1584

The issue of that OECD definition, we have referred to one and Mr Crawford of the AWU put up another document from the OECD, but you will recall that he put that document to Ms Davis, an expert in the horticulture industry, and she said she had never seen that definition and in the Australian context the farm gate is a concept and she said "absolutely a concept" and we have, in our written submission, reproduced the relevant extracts from her evidence and the evidence of Mr Robertson on the same point where they very strongly put the view that it's a concept, it is not a physical location. None of the employer witnesses deviated in any way on that point.

PN1585

In the submissions that we filed, you will also see that Ai Group was a major party in the horticulture proceedings, the award modernisation proceedings for the Food Manufacturing Award and we were the main employer party in the Storage Services Award. So, in fact, we are the only party involved in these proceedings that was deeply involved and centrally involved in all three of those award modernisation proceedings.

PN1586

In our submissions, and we think they are very strong, the intent was quite clear. If you look at the Horticulture Award, there was a big issue about the interplay between that award and the Food Manufacturing Award. The AMWU, particularly through the food preservers part of the AMWU, was worried about the intrusion of the Horticulture Award into food processing, you know, the Simplots and so on, and the concept of the farm gate should be considered in that context. It was put there to stop those companies like that, the food processing companies, being covered under the Horticulture Award.

PN1587

There was no discussion about the Storage Services Award in the food manufacturing proceedings. The NUW wasn't even involved in any way in the Horticulture Award, it didn't even turn up at the consultations or make submissions in the matter and they could not possibly be speaking with any authority on what the intent was, whereas ourselves and the NFF were the two major employer parties, and the AWU - we are very disappointed that the AWU, in our submission, are hanging onto the coat tails of the NUW in this case rather than continuing on with what they put themselves in the Horticulture Award matter. They put up a draft award that included storage and grading and packing activities.

PN1588

I have talked about, in that food processing matter, the various submissions that were made, including by the NUW, particularly that extract in our submissions and from the transcript of Mr Richardson, where he differentiates, for example, between a Peters Ice Cream and an Oxford Cold Storage. There is a line there between those types of companies as there is a line in this case between producers of vegetables and the sending of those vegetables off to either a food processor or to a retailer and that is the point when they go through the farm gate.

PN1589

In the Storage Services Award, it was very hard fought. We were very concerned that the Storage Services Award would intrude into the coverage of numerous other awards. There are store people in most industries and we have cited a whole raft of them, but horticulture is obviously one and this case centres heavily around the activities that are carried out in the horticulture industry, which, in most cases, are not really storing activities. We saw in the inspections that really that cold store, if you call it that, at the end of the process, goods are in and out of there very, very quickly, it's really a handling place, waiting for the truck to arrive, but in the storage services proceedings, we were absolutely focused, and you will see the bolding and so on in our submissions and the strong submissions that Ai Group put in the proceedings that this award is about the storage industry. Like Mr Richardson said, it's about the big warehouses, the big stores, it's not about storing and handling within other industries.

PN1590

The Award Modernisation Full Bench accepted our arguments and the clause that we wanted was accepted, so the Storage Services Award becomes an award that really applies to the industry of storing, you know, where it is a major industry in its own right, like an Oxford Cold Storage, and it mops up stores people in industries in circumstances where the award doesn't cover those people. That is very clear, we would submit, on the words and in the background to the development of the Storage Services Award.

PN1591

When it comes to classifications - this is from paragraph 82 in our submissions - there is no doubt whatsoever that the classifications in the Horticulture Award are more appropriate for the horticulture industry than the classifications in the Storage Services Award. Even Bartel DP, who made the original decision in the Mitolo case, said that. She accepted, and it is set out in her decision, that the classifications in the Horticulture Award are more aligned with the duties undertaken at Mitolo's centralised facility at Virginia. We say that is a very relevant point.

PN1592

The Mitolo case, we would argue that the Bench should not give too much weight to that decision. It was made in a very different context. I did the advocacy in the appeal proceedings. We were not involved in the original proceedings, Ai Group wasn't, but there was no evidence before the Bench - we had the benefit, of course, of the materials that were there in the original proceedings - but there was a lot of discussion about potatoes and seeds and what was a seed and what was an agricultural holding, there were further submissions filed, but there was no real focus on the issues that are before this Bench, other than in a narrow way with the construction issues relating to those awards.

PN1593

There was no detailed evidence, there were no inspections. There was a decision of Bartel DP that was made in the context of an enterprise agreement and the parties were obviously talking about whether or not Bartel DP's decision was correct in the context of the BOOT, but this Bench has a vast amount of evidence before it, it has the benefit of inspections and even if you look at the Mitolo decision, the Bench there invited the parties to pursue changes to the award in the four yearly review. So, that is exactly what we are doing and a decision to accept our application in these proceedings would not be in any way inconsistent with the Mitolo decision.

PN1594

Section 8 of our submissions goes to the nature of the horticulture industry. It is, of course, an extremely large industry, but the witness evidence - and this is set out at paragraph 97 - highlights a number of things that cannot be disputed. All of the processes carried out in the industry are integrated, they typically involve growing activities, grading activities and packing and despatching activities, amongst many others, and it would be extremely artificial to draw a line somewhere along the way.

PN1595

Thinking about the facilities that we visited at Mitolo and Zerella, it was very obvious that they are horticulture facilities. Where would you draw a logical line anywhere in that process with the coverage of one award versus the other between either the Horticulture Award or the Storage Services Award? It is not a store by any stretch of the imagination. The only storing that occurs is a cold store at the end of the process. No one is working in the store, it is really just a handling area, and the thing that was very obvious to me was when you look at the dates, the use by dates on those bags of potatoes at the end of the process, they were a couple of weeks after the bags were filled, so the whole thing is extremely fast and potatoes and other vegetables are moved into those facilities, they are moved through the facilities and out the other side very quickly.

PN1596

We heard from Mr White at Zerella that a third of the potatoes that went through his facility went back into the ground, a third went to the retailers, a third were substandard but could still be used and a third were waste. That was for potatoes. He said it was 50 per cent for carrots. So this is not a storage facility, this is an integral part of the horticulture process.

PN1597

We have set out in our submission all sorts of illogical outcomes that would result from trying to apply the Storage Services Award to those types of operations. Mr Bourke has talked about this as well. It cannot possibly be the case that a decision of an employer or a business to buy or sell a block of land suddenly completely disturbs the award coverage of the employer and the employees.

PN1598

One thing that also can't be disputed, and this is section 9 of our submission, is that right through the horticulture industry, employers are applying the Horticulture Award, they are not applying the Storage Services Award. The NUW has identified a couple of employers that they allege are applying the Storage Services Award. It is there in the evidence and it is obvious to anyone that looks that this would dramatically disturb the award coverage if the Storage Services Award was applied to all of these businesses. They don't use the Storage Services Award.

PN1599

We have got the evidence from Mr Robertson and the evidence from Mr Cody of meetings that they attended and their own experiences and it is certainly the experiences of Ai Group that the Horticulture Award is the one that applies, not the Storage Services Award, and if the Storage Services Award was to be applied, those adverse consequences that Mr Bourke talked about would obviously arise. There would be enormous disruption.

PN1600

In section 10 of our submissions, we have set out there our observations with the inspections and we would anticipate that the Bench's observations would have been very similar. There's nothing controversial there and it highlights the integrated nature of those activities. The other point that is made there at paragraph 109 is when we stopped outside one of the Mitolo farms, there was another facility directly opposite, Virginia Farm Produce, and that facility, I think Mr Mitolo pointed out at the time, is very similar, it has a centralised washing and packing facility, but because it perhaps is on one of Virginia Farm Produce's own farms of is next door to it or on the same block of land as the land boundaries are drawn, it would be completely illogical to be applying the Horticulture Award to that facility, as we understand applies, versus forcing Mitolo to use the Storage Services Award for a very similar facility.

PN1601

Mr Bourke has already raised the issue about Zerella and the enterprise agreement that the NUW has entered into linked to the Horticulture Award for Zerella, a major competitor of both Mitolo and Virginia Farm Produce.

PN1602

When it comes to the variation that we are seeking, the variation has been developed in consultation with the industry, it was developed, of course, between the employer parties and there is nothing expansive or unusual or tricky in that wording, it is designed to capture what we submit the award was always intended to capture, that being the range of typical activities carried out by an organisation in the horticulture industry.

PN1603

The definition of enterprise is important because it reflects the reality that many employers in the horticulture industry have corporate structures that involve different legal entities. We see this in the evidence of Mr Robertson where he talked about the fact that often you'll have one part of a business doing certain activities and another part doing other activities, but essentially they are the same business.

PN1604

Mr Dollisson talked about the issue in a bit more detail and we have set out some of the extracts, and Mr Crawford, in his final submission, has, perhaps surprisingly, also because Mr Dollisson was talking about the issue from a banking and finance point of view and how the banks will often require security over buildings and so on, so the banks' requirements often lead to some of the corporate structures, but there is no tangible separation to most of these businesses. Mitolo has a number of different legal entities, as you are aware, but it is operating as one business.

PN1605

We would submit that the proposed variation is fair to all parties and, as I have said, there's nothing at all unusual about it.

PN1606

The central issue for the Bench to deal with on the 156 matter is the modern awards objective, and we make the point in our submission that, of course, fairness and relevance are the key issue, but even during the modern award review, the various Full Benches have made the point that fairness cuts both ways, awards need to be fair to employers and fair to employees. We would submit that it would be extremely unfair to apply the Storage Services Award to an industry that it is completely unsuited to and that to avoid that, we need to clarify the coverage of the Horticulture Award, not expand it but simply clarify, in our submission, what it was always intended to cover.

PN1607

Relevance is another key criteria in the preamble to section 134 and, of course, relevance goes to is an award relevant to the industry that it is intending to cover, and the Horticulture Award is highly relevant, the Storage Services Award is completely irrelevant and should be irrelevant to this industry because it is completely unsuited to the industry.

PN1608

I won't go through all the 134 points but just a few of them. The issue of collective bargaining, there is plenty of evidence before the Commission of the problems that are currently there. This lack of certainty about award coverage is impeding enterprise bargaining in the industry and therefore 134(1)(b) strongly supports the variations that we are seeking.

PN1609

Equally, 134(1)(c) is a highly relevant criteria, the need to increase workforce participation. We have highlighted in our submission the extract from the recent Full Bench decision in the Casual and Part-Time Employment case where that Full Bench was dealing with applications to vary the casual provisions in the Horticulture Award. The Full Bench set out some very relevant issues in the context of deciding that there should be some new overtime obligations brought into the award, but that if the provisions did not suit the way the industry operates and the high level of flexibility that is needed, the Bench said that what would happen is employers would simply cut back the hours of the casuals and that that would have the effect, of course, of reducing the incomes and the participation of the people in the workforce.

PN1610

We would say that if this variation is not made, there will be less employment in the horticulture industry and if the variation is made that will boost or at least maintain workforce participation. Not making the variation would move against that element of 134.

PN1611

With 134(1)(d), this is central to the issue, the need to promote flexible modern work practices and the efficient and productive performance of work. The way the industry is going, as the evidence has shown, is there is a lot of consolidation that has occurred and is occurring, more efficient methods of producing crops and distributing crops to market. If the variation is not made - the idea that to avoid coverage under an award that is completely unsuited to the industry, you'd have to have a separate storage and distribution facility on every plot of land is extremely inefficient, of course, and completely nonsensical.

PN1612

As the evidence showed, a lot of those plots of land where crops are grown don't have any power. Mr Robertson made the point that when you look at power prices, including critically in South Australia, you need to have centralised facilities for dealing with crops for any business of any size.

PN1613

When it comes to the issue of employment costs and productivity under 134(1)(f), we have set out in our submission - and referred back to Annexure A of our December submission - the differences between the provisions in the Horticulture Award and the Storage Services Award, and the NUW has also included materials on this. As we have identified at paragraph 154, the provisions of the Storage Services Award are completely unsuited to the nature of the horticulture industry and the Horticulture Award is suited to it. It is flexible, the Horticulture Award, that is, it enables the industry to operate as it needs to operate. It would be extremely inefficient and excessively costly to try to apply an award that's designed for major warehouses in suburban areas to operations in the horticulture industry. I won't go through all the differences that are summarised, but we draw the Bench's attention, as I have said, to Attachment A to our December submission.

PN1614

In terms of 134(1)(g), the need for a simple, easy to understand and stable and sustainable award, our arguments about ambiguity and uncertainty that I will refer to in a moment very much support this. There is no doubt that the award at the moment is ambiguous and uncertain. We wouldn't have been arguing about what it means for so many days if it wasn't. It is abundantly clear that it's uncertain and therefore it can't be simple and easy to understand. There are some other submissions there made about employment growth, inflation and so on and we would submit that our application is consistent with all of those points.

PN1615

If I can turn now to our application under 160. Many of our arguments that we've gone through in the other parts of our submission strongly support our 160 application to vary the award to remove ambiguity and/or uncertainty. We think that clause 4 of the award, on any assessment, is both ambiguous and uncertain and needs to be addressed through the variation that we proposed. Everyone agrees that the Tenix decision is an appropriate authority, but that decision strongly supports the variation that we are seeking because, of course, the first step is to find ambiguity and uncertainty and, if you find that, then, as that Full Bench said:

PN1616

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 more than one contention.

PN1617

You have before you strong arguments, certainly from the employer parties, that the provisions are ambiguous and uncertain and you have much more cursory arguments from the unions that they are not, but, on any reasonable assessment, there are ambiguous and uncertain provisions, and that decision of Polites SDP in that 170MX matter that we talk about at paragraph 170 is also very relevant about the meaning of uncertainty.

PN1618

We set out after that the reasons why the clause is uncertain. As Mr Bourke pointed out, the words "in connection with" are in the current clause and there's a lot of debate and disagreement about what those words mean. We allege they mean what we have stated, that they would include all of the activities that we say are covered and should be covered. The NUW and AWU argue that that is not the case. So, there are rival contentions advanced, arguable cases made out and we submit that the Commission should err on the side of finding an ambiguity or uncertainty as the Full Bench in Tenix stated.

PN1619

For all the reasons that we've set out, we would say that it's very firmly in the public interest that the 160 variation should be made, that there is an ambiguity and uncertainty and that it's in the public interest then to cure that through the variations that we have proposed.

PN1620

We come then to the issue of the operative date. As was set out in the preliminary jurisdictional issues decision, you can grant a retrospective operative date during the four yearly review in circumstances where there is a 160 application and an award review application, which is exactly what you've got before you.

PN1621

We argue that there are definitely exceptional circumstances in this matter. We have cited four matters that Ai Group has been involved in just to highlight that there's nothing particularly unusual about retrospective operative date that you might, and hopefully will, grant in these proceedings.

PN1622

The first matter is a matter before Lawler VP in an application made by Ai Group to vary the Telecommunication Services Award. That was an application where we sought an operative date of 1 January 2010. There was an issue that had come up about the national training wage provisions. The variation was made and, interestingly, then Lawler VP expressed some concern about, "Okay, if I make that variation retrospective, will any employees who had actually been paid money be asked by their employers to pay that money back?"

PN1623

We argued, and we make the same point again, that that is not an issue in reality because obviously if someone is covered under an enterprise agreement, it applies, but, even if they aren't, they have a common law contract of employment and there would be no basis for seeking money back, but what Lawler VP said is that he wanted to be sure that that wouldn't occur and he actually varied the Telecommunications Award and put a clause in there that stayed there until just the other day, 1 July this year, when most modern awards were varied for that new clause that just imports by reference the National Training Wage Schedule in the Miscellaneous Award, so it went out from 1 July.

PN1624

If I could just hand up a copy of the determination that was made by Lawler VP so that the Bench can see the words that were put in. You can see there clause 3, 14.4(b), it was a provision that was just put in for an abundance of caution that said, essentially, if an employee had been paid money and they had legitimately been paid that money and it wasn't an overpayment, et cetera, as Lawler VP highlighted in that part of his decision, then there would be no obligation to pay that money back. That, as I said, sat there until just the other day and, so far as I'm aware, it never had any work to do but provided whatever comfort it was intended to provide. For our part, we would not oppose a similar provision going into the Horticulture Award.

PN1625

There was another couple of cases that we'd also like to refer to. One is set out there at paragraph 183/184 and this is a decision of Bolton J relating to the Black Coal Award. As Commissioner Saunders is well aware there's a lot of potential debate about the coverage of that award and there was a variation made in an attempt to provide a bit more clarity about that, and Bolton J made that retrospective to 1 January 2010 and he was satisfied that exceptional circumstances exist.

PN1626

There are two other older cases that Ai Group was involved in that are mentioned at 188. One was a matter handled by a Full Bench headed by Munro J in National Engineering and this was a matter where the AMWU came along many years after an existing practice had been in place and argued that they wanted all the back pay and the Full Bench said, "Well, we're satisfied that equity would be better served by making a retrospective variation to the award".

PN1627

There was also another matter that was quite a significant matter at the time because it went on in the Commission as well as in the Full Federal Court relating to vehicle manufacturing operations, but this was an issue where there was an interpretation that was in place in the industry about public holiday provisions. The Full Federal Court decided on a different interpretation and a Full Bench of the Commission varied the award retrospectively to reinstate what was clearly the industry interpretation that had been applied.

PN1628

So we'd argue in these proceedings that equity is better served by making the retrospective variation. If you had any doubt about it then the sort of provision that Lawler VP put in to the Telecommunications Award would deal with the abundance of caution that you might see as necessary, but we don't think there is any live issue or realistic issue of anyone being required to pay any moneys back. Obviously people are using right through the industry the Horticulture Award at the moment with a couple of exceptions that the NUW has potentially alluded to.

PN1629

So there's just a couple of other issues I'd like to mention in the NUW and AWU submissions. Most of the issues in those submissions are dealt with in detail in our submissions, and our position would be very clear. There's just a few other issues. The NUW has argued about section 163(1) of the Act, and what they describe as the special rule about award coverage. They devoted a huge chunk of their submission to this alleged special rule about award coverage, and the issue is very easily dealt with because that provision applies when the Commission makes a variation to a modern award which has the effect of certain employers and employees stopping being covered by that award. There is no application before you to vary the Storage Services Award, so section 163(1) has no application whatsoever. It's completely irrelevant. And obviously the application is to vary the Horticulture Award and no one is suggesting that our application is intended to narrow the coverage in any way, so it's a completely irrelevant point, and it's surprising that so much of the NUW submission is devoted to it.

PN1630

With the AWU's submission there are submissions there about the Mitolo case. I've covered what our view is on Mitolo, and I don't need to go over that again. There's submissions there about the farm gate and the OECD definition that Mr Crawford referred to, and as I mentioned earlier what he put to Ms Davis was quite clear in what she came back with. It's a concept in the Australian context. It's not a gate hanging off a farm.

PN1631

One thing that Mr Crawford does point to in the AWU's submissions is a decision of Hamberger SDP in a case in 2010, and for the Bench's information it's important that this is understood what this case was about. It was an application by the NUW to vary the Horticulture Award to insert LUCRF as a default superannuation fund. It was quite a short, simple case. The NUW wanted their super fund put into the Horticulture Award and the employer party involved, the NFF, objected to that. Hamberger SDP rejected the NUW's application and he made a few comments about the farm gate through his own, I guess, assessment of what he looked at amongst the award modernisation materials, but there were no detailed arguments at all about any of these issues about farm gates, so there were obviously no inspections in the matter. There was no evidence in the matter. It was a short matter. AI Group wasn't involved in the matter, so none of the issues that we've raised about the intent during the award modernisation process, none of that was before him.

PN1632

What his Honour based his rejection of the application on was a transcript of a consultation before Lewin C in 2008. That was the early consultation at the very start of the process before the award had obviously been made, and even the reference that his Honour referred to was a fairly vague reference in our submission. So that very short decision, we would submit, shouldn't be given any weight given the much more extensive materials that are before this Bench. Of course, that transcript was long before – not only was the Horticulture Award coverage clause finalised it was before the award was varied to insert the references to storing, grading, packing, forwarding, et cetera, through that December 2009 variation.

PN1633

There's another point that the AWU make about section 143(2) and the requirement that an award cover an employer rather than this issue of enterprise and Mr Bourke has dealt with this issue but we would submit that the response to this is very obvious. The proposed variation does not stop the award applying to an employer. It applies to an employer now and will continue to apply to an employer. The concept of an enterprise in the drafting relates really to is the employer in the horticulture industry or not, and there's nothing particularly unusual about putting words into a coverage clause intended to give some clarity to whether an employer is in a particular industry, and I mentioned before the Black Coal Award and there's words there that try to clarify that, but there's also lots of other awards; the Telecommunications Services Award talk about an employer whose principal function is in that industry; the Call Centre Award has similar wording; the Professionals Award as it relates to IT professionals and Telco professionals talks about businesses principally engaged in the IT industry, so words are commonly put into awards to help clarify the industry that the employer operates in, and the words that we are seeking and to do that doesn't stop the award applying to an employer. It just clarifies whether they are legitimately in the horticulture industry or not, and not in an expansive way, and in an entirely reasonable way because the employer obviously has to be connected to the growing activities.

PN1634

So for all of those reasons we'd submit that our proposed variation meets all of the statutory requirements in 134, 156 and 160 and all the other provisions and we'd urge the Full Bench to vary the award as sought with that retrospective operative date of 1 January 2010, if the Commission pleases.

PN1635

VICE PRESIDENT CATANZARITI: Thank you, Mr Smith. Mr Rogers?

PN1636

MR ROGERS: Thank you, your Honour. I'm mindful of your comments at the outset about having access to our written submissions. I take it you have mine which were filed on 31 July, so I don't propose to rehash that to any length now. I just would like to make a couple of brief points. I'll be very short.

PN1637

The principal point I want to make is that it doesn't appear to be an issue that the Horticultural Award was crafted with flexibility built into it to allow farmers to address unique challenges which they face, and that challenge can be, I think, fairly succinctly summarised as the challenge to get produce to market at its best within the short timeframe the perishable nature of the produce allows while dealing with the variable nature of weather, crop volumes and other pressures. That point doesn't seem to be seriously at issue.

PN1638

It's our submission that the evidence shows that this challenge flows from field through to the packing shed irrespective of the location of the packing shed, whether that shed is onsite or offsite. Those challenges have a significant impact on the sector's labour needs, and it's our submission that there is no basis in logic or principle for a different award to apply whether the packing is done onsite or offsite.

PN1639

It's our submission that the evidence shows a variation is vital to the sector, but more importantly the variation would give effect to the modern award objectives expressed in section 134 of the Fair Work Act and Mr Bourke and Mr Stevens [sic] have gone into great detail as to why that should be the case, and I won't cover the same territory now.

PN1640

The only other point that I want to make, and this is obvious, and I'm sure it's clear to you, but I feel that I should make it because it might get lost in these proceedings which is focused on the big players, and as the representative of the National Farmers' Federation we represent all farmers, and obviously this variation would have an impact upon all the players. It would have an impact on the smaller farmers who lease a shed in town so they can free up some farming land to grow crops. It will have an impact on the smaller farmers who form cooperatives so that they can share costs, share risk, share the administrative burdens of running the sheds and to take advantage of the economies to scale, and it would affect the smaller farmers who use their neighbour's sheds because that's just the most cost effective way for them to pack their goods, or they might rely on the services of these cooperatives.

PN1641

So they're my submissions, your Honours. If there's nothing further, I'd encourage you to make the variations sought.

PN1642

VICE PRESIDENT CATANZARITI: No. Thank you.

PN1643

MR ROGERS: Thank you.

PN1644

MS MACDOUGALL: Thank you, your Honours. Likewise I will also – won't re-agitate our written submissions that have been filed in relation to the proceedings. I would however like to highlight a few key areas and also address a couple of matters arising from both the AMWU and the AWU submissions.

PN1645

DEPUTY PRESIDENT SAMS: I think you mean the AWU.

PN1646

VICE PRESIDENT CATANZARITI: AWU.

PN1647

MS MACDOUGALL: I beg your pardon. Thank you, yes. Gayndah Packers, the employer parties involved in these proceedings, clearly there has been a significant focus in relation to the operations of Mitolo. I think it's important however that, and we strongly support all of the arguments that have been put forward by the Mitolo parties and also Ai Group and the National Farmers' Federation, but it is important to observe that there are other employers in the agricultural/horticultural industry that are affected by the current ambiguity and uncertainty in relation to the operation of the award, and that includes Gayndah Packers. So from its perspective it is participating in these proceedings so that it has an opportunity to share that message and to put forward its position.

PN1648

I guess not unlike the other arguments that have been put forward by the other parties our submissions traverse the interpretation of the current horticultural coverage definition. We would certainly invite the Commission to find that Gayndah Packers properly would fall within the type of work that is certainly consistent with the definition under the horticultural industry at the moment, and also have regard to the historical context particularly in Queensland, because the predecessor award is very clear in relation to the fact that it covered work of the type that came on and from orchards. So there was no locational limitation in relation to that.

PN1649

We have also addressed a number of the matters in section 134 of the Act. I won't take you through each of those, but I do wish to highlight a couple in particular going to section 134(1)(d) which is the need to promote flexible work practices and the efficient productive performance of work. As the Bench is aware there has been significant evidence in relation to the need for the horticultural industry to be able to have a flexible modern award system and the horticultural award provides that. There are some significant flexibilities under the horticultural award that assist businesses to respond to seasonable peaks in work arrangements, the rostering of that work and being able to generally be flexible in relation to the spread of hours. There are, we accept, differences in relation to the application of penalties and so forth, but the Horticultural Award ultimately has been approved by the Commission as a fair and minimum standard, and it's suitable for this particular industry.

PN1650

We commenced our opening submissions indicating that Gayndah Packers wanted a modern award system that would deliver a fair and relevant safety net. Our position hasn't changed in relation to that, and we think that the variation that has been proposed by Gayndah Packers and also more broadly in the same terms as the employer parties will achieve this.

PN1651

In terms of the AMWU submissions ‑ ‑ ‑

PN1652

VICE PRESIDENT CATANZARITI: AWU again.

PN1653

MS MACDOUGALL: AWU, I beg your pardon again. I'd like to make the observation that the AWU relied at hearing on the ABS ANZSIC codes and the propositions are put forward in relation to these ANZSIC codes again at page 13 of the submissions. The proposition ultimately that was put forward is that any level of contract packing that was performed by Gayndah Packers would ultimately place the business into the industry of packing services by virtue of the definition and by virtue of the fact that there is provision in that definition for packing fruit and vegetables.

PN1654

Mr Crawford, on behalf of the AWU, put a line of questioning in cross-examination to Ms Tonsing in relation to her acceptance as to whether or not she in fact accepted the proposition that the business fell within that, and certainly the transcript reflects that her acceptance that they do pack fruit and vegetables, however the transcript also reveals that there was a correction in relation to her evidence regarding those propositions, so we respectfully say that the AWU has incorrectly accepted her evidence regarding that and we consider that little to no weight should be given to the ANZSIC codes on the basis that the AWU hasn't provided any expert evidence in relation to the operation of the ANZSIC codes and specifically whether or not work done for a contract basis in this environment would fall within that. I think certainly - more broadly the reference to the packing services is a sub-classification of the administrative and support services and it's clear on the face of the evidence that Gayndah Packers is not in the business of administrative support services. Its owners run orchards. The owners put their fruit through the packing shed that is owned by Gayndah Packers. They are in the horticultural industry. Furthermore, the employees don't only do packing activities. As the Bench has heard there's a significant emphasis in relation to the importance of grading fruit. That is no different to what occurs at the Gayndah Packers packing shed.

PN1655

The AWU also has not led any evidence which clarifies how any overlap would be treated, and I note that Mr Crawford also conceded that the classifications are different to awards, and he did accept that they are more of an economic classification rather than a legal term. So I think my submission is that the proposition completely ignored the evidence that employees perform vital work that's associated with grading, and it also is somewhat ridiculous, with respect, the suggestion that Gayndah Packers would fall within the building, cleaning or pest control industry as is articulated in the ANZSIC code.

PN1656

Turning to the NUW's submissions; again we strongly support the observations that were made by Mr Bourke and also Mr Smith in relation to the arguments put forward by the NUW. I would like to note that the NUW's submissions at page 18, paragraph 78, 80 and also 83 highlight or rather propose that essentially the evidentiary case run by the employer parties is all about Mitolo. Unfortunately that ignores all of the evidence albeit we've brought one witness from Gayndah Packers, but it is a very narrow view I think of looking at the proceedings and the evidence that is before the Commission. The evidence that is before the Commission is that the uncertainty in relation to the operation and coverage of the Horticultural Award is far more expansive and it will affect all employers in the horticultural space.

PN1657

Again in terms of the practical implications if the Storage Services Award was to apply the issues around farm gate and physical farm gate are really quite fundamental for Gayndah Packers. It will be subject to award terms that will result in an equal playing field as a consequence of other packing sheds in the Gayndah region that do have those sheds on farms, and as the Bench is aware there is evidence that before the Commission, potentially anecdotal, that the many other operators in the Gayndah region that do have packing sheds that are not on farms also apply the Horticultural Award, so it will ultimately lean to an absolute inconsistency in that small region if the variation is not made.

PN1658

We also submit that none of the evidence that's been led by the NUW really challenges the evidence of Gayndah Packers. Certainly the evidence that's been put on by Ms Rault and Mr Kazmi responds to the evidence of the Mitolo parties and Mr Robertson's first statement really essentially goes to the financial impact of any changes. In that respect it would be considered that our evidence is largely uncontested.

PN1659

Finally, I'd like to comment on the draft determination and I guess reiterate the comments that have been made by Mr Bourke and Mr Smith in terms of the intention to ensure that there's clarity around the application and which employers and which entities are going to be covered by the award. So it's important and particularly say for an entity like Gayndah Packers who its owners are independent owners but collaboratively have come together to create this corporate entity which has arisen out of ultimately a cooperative that existed for some 40 years. So it's really important that the terminology within the determination is actually going to cover, not only related entities, associate entities, but also individuals that form part of an enterprise or part of a joint venture.

PN1660

My final submission is that having regard to the evidence that is before the Commission, both evidence that's been put forward by Gayndah Packers and also the employer parties we think that there's a very persuasive case to be made out and we certainly invite the Commission to make the variation as has been put forward. If there are no further questions?

PN1661

VICE PRESIDENT CATANZARITI: No. Thank you. We will take the luncheon adjournment. We'll be back at 1.30 and we'll sit until 10 to 4. Thank you. The Commission is ‑ ‑ ‑

PN1662

MR BAKRI: Your Honour, if I may be heard on the further conduct of this matter?

PN1663

VICE PRESIDENT CATANZARITI: Yes. Yes.

PN1664

MR BAKRI: The parties have put together a timetable that I understand to be by consent which had seen the employer parties making submissions today, the union parties making submissions tomorrow. We have proceeded at a cracking pace which is very good. I ‑ ‑ ‑

PN1665

VICE PRESIDENT CATANZARITI: If you're asking to vacate it to tomorrow I'm not going to grant the request.

PN1666

MR BAKRI: To?

PN1667

VICE PRESIDENT CATANZARITI: We will sit in an hour's time.

PN1668

MR BAKRI: Your Honour, I wish to be heard to explain.

PN1669

VICE PRESIDENT CATANZARITI: Tell us why. We've got detailed written submissions. You should be ready to proceed.

PN1670

MR BAKRI: Yes. Your Honour, I may not persuade you but if I can be heard on this matter. As your Honour may have recalled this matter was previously listed for yesterday and today. It got shifted to today and tomorrow. I think solely on the basis due to my unavailability being in the Federal Court Monday to Wednesday of this week. I was in the Federal Court briefed in another matter Monday to Wednesday. I have organised for a conference with my client at 4 pm today to seek instructions on some key matters to enable me to adequately represent my client. My concern, your Honour - I don't wish this hearing to go any longer than it needs to. My concern is that if we proceed today my client will be disadvantaged, and I don't make that submission lightly.

PN1671

VICE PRESIDENT CATANZARITI: You would need to explain that to me, because for my part there are detailed written submissions. There's been no new material raised in the submissions today, so how is your client disadvantaged?

PN1672

MR BAKRI: There are matters that have been raised today, and raised in the written submissions filed early this week.

PN1673

VICE PRESIDENT CATANZARITI: What are they? What are they?

PN1674

MR BAKRI: If I can clarify that matters that were raised in the written submissions which have been touched on today, I accept that there's nothing blatantly new today, that I need to seek instructions on. I have not had an opportunity to do that having been engaged in another hearing for the last three days.

PN1675

Your Honour, further to this, yesterday there was communications, I understand between my instructor and those instructing my learned friends as to whether the NUW would be prepared to make submissions or with a view about making submissions today, and the position we expressed, and it was between the parties and the Commission wasn't privy to this, was that our preference would be – we would not be in a position to proceed today.

PN1676

I don't make this request lightly and I'm trying to deal with it head on. It's an uncomfortable submission to make but I am concerned that if I do not have an opportunity to seek instructions my client will be disadvantaged.

PN1677

VICE PRESIDENT CATANZARITI: What's the AWU's – sorry – yes, I was right the first time. The AWU, what's their position?

PN1678

MR DE CARNE: Yes. Understandably since Mr Crawford is with his wife and she's in labour I wouldn't mind the opportunity to have over the course of the evening, but I don't seek to press that or go head long into making submissions otherwise.

PN1679

VICE PRESIDENT CATANZARITI: We'll deal with your submissions at 1.30.

PN1680

MR BAKRI: The AWU's?

PN1681

VICE PRESIDENT CATANZARITI: Yes, the AWU's submissions will proceed at 1.30. There's no basis for them to vacate.

PN1682

MR DE CARNE: There would be a basis. I think I could make a persuasive argument that there is, however if it is to proceed ‑ ‑ ‑

PN1683

VICE PRESIDENT CATANZARITI: Sorry, what's the argument? Mr Crawford was always uncertain whether he would be at this hearing. Written submissions have been filed. What's the basis for your adjournment?

PN1684

MR DE CARNE: Just an opportunity to have more time after considering the employers' position, but if the Commission is minded to proceed today let's proceed.

PN1685

VICE PRESIDENT CATANZARITI: The Commission is minded to proceed today in relation to your submissions. The Commission will adjourn until 1.30.

PN1686

MR BOURKE: Sorry ‑ ‑ ‑

PN1687

VICE PRESIDENT CATANZARITI: Yes, Mr Bourke?

PN1688

MR BOURKE: I just say that we are unaware of any email about pushing back the NUW's submissions till tomorrow.

PN1689

VICE PRESIDENT CATANZARITI: Yes, all right. Yes?

PN1690

MR BAKRI: I withdraw that submission. I misunderstood the instructions and that's my fault. The communications are with the AWU. I do apologise.

PN1691

VICE PRESIDENT CATANZARITI: These are important allegations being made.

PN1692

MR BAKRI: Your Honour, with respect, it's not an allegation.

PN1693

VICE PRESIDENT CATANZARITI: It's a suggestion that some deal has been done in relation to the matter.

PN1694

MR BAKRI: But there was, your Honour. There's a timetable which was by consent.

PN1695

VICE PRESIDENT CATANZARITI: Yes. I'm aware of that timetable which was dated 7 July which foreshadowed that the matter would take two days.

PN1696

MR BAKRI: Yes. I do withdraw that comment. I do apologise.

PN1697

VICE PRESIDENT CATANZARITI: Yes, exactly. There are detailed written submissions. The Bench will consider your request over the luncheon adjournment as to whether we will not continue this afternoon. Thank you. The Commission is adjourned.

PN1698

MR BAKRI: As the Commission pleases.

LUNCHEON ADJOURNMENT [12.31 PM]

RESUMED [1.38 PM]

PN1699

VICE PRESIDENT CATANZARITI: Although an inconvenience we'll agree to your request to hear you tomorrow morning, and we'll do that at 9 o'clock.

PN1700

MR BAKRI: As the Commission pleases. I do apologise for the inconvenience.

PN1701

VICE PRESIDENT CATANZARITI: Yes. We do anticipate tomorrow morning the hearing will conclude by about 11. Thank you.

PN1702

MR BAKRI: Thank you.

PN1703

VICE PRESIDENT CATANZARITI: But we will proceed with Mr de Carne's material. Thank you.

PN1704

MR DE CARNE: Yes. If the Commission pleases, one of our primary submissions throughout these proceedings has been geographical limitations in the industrial awards were the norm prior to modernisation, such as those referred to in our initial submissions, and geographical limitations remain a feature of the modern award systems such as those upon farms and the issue we're dealing with.

PN1705

Mitolo Group's initial submissions filed on 23 December acknowledge this; they identify 13 awards whereby coverage is determined on the locational basis. This shows that it's common in the modern award system for the same type of work to be covered by different awards depending on where the work is performed. You can add the Building and Construction Onsite to the list.

PN1706

Clause 4.9 of the Onsite Award confines coverage to onsite work. This means numerous forms of work such as concrete batching, traffic control, asphalting, and cleaning are only covered by the onsite work if the work is taken onsite. An organisation or association, as we have here, mounting an argument that they have a fully integrated business doesn't justify crossing the historical boundaries set for rural workers.

PN1707

The Mitolo Group did more than that that was put today by Mr Bourke. The Mitolo decision, at paragraph 58, made very clear that the ordinary meaning of the coverage provision was determined by the Commission. The Australian Industry Group asked the Commission to consider the issues fresh. They did that in their final submission. They do that because they need the Full Bench to depart from the interpretations set out in the Mitolo appeal decision.

PN1708

We've been criticised for not making a big deal about the interpretation of the award. The reason that we don't need to do that is because if there's an ordinary meaning that's where the increase stops. It's not correct that, as the Ai Group put it, that we've got two rival opinions on the interpretation of a provision. That gives rise to an ambiguity. That's totally incorrect in terms of interpretative principles at law and interpretative principles adopted by this Commission.

PN1709

Just to say I'm not complying with an award or I don't comply with a determination doesn't give rise to an ambiguity nor does it give rise to an argument to backdate the application of a provision. It's clear that the words "upon farm" mean what that means. It means upon the farm. The reason that farm gate isn't included in the words in the operative provision is because the words "upon farm" are there. While our primary position is we don't need to look at the soil from where these provisions came, and the ordinary meaning can just be adopted, well, just have a little look at that because it's quite interesting.

PN1710

The term farm gate in the award modernisation decision clearly refers to the location of work. The employers have been presented a self-serving and subjective interpretation of employer witnesses in the following forms of evidence from people that don't operate across the industry. At tab 46 of Mitolo Group's 23 December material, in a decision of Hamberger SDP, that decision was referred to today by Mr Smith. In that decision the Senior Deputy President addressed the construction of clause 4.2 of the Horticultural Industry Award much like the Full Bench did in the Mitolo appeal, and determined it meant that it only covered activities such as those; picking, packing and storing to the extent that those activities happened on the farms.

PN1711

If I could just take the Commission to that decision. At paragraph 9 the Senior Deputy President expresses that there was:

PN1712

Discussion about whether the coverage of the Horticulture Award 2010 extends beyond the 'farm gate'.

PN1713

So the issue was dealt with:

PN1714

Having examined the transcript of the consultations before Commissioner Lewin that led to the development of the modern award I am satisfied that the reference to 'upon farms, orchards and/or plantations' should be regarded as qualifying all the activities listed in the preceding paragraph. The phrase 'including fruit and vegetables' merely emphasises that these products are included in the concept of 'horticultural crops'. The effect of this construction is that the modern award only covers activities such as picking, packing, storing et cetera to the extent those activities happen on farms, orchards and/or plantations.

PN1715

A lot of attention has been drawn to the AWU Common Rule Victorian Award because it was mentioned as providing the conditions in the award modernisation decision of the Australian Industrial Commission. In our opening submissions, or our reply submissions rather, the AWU addressed a few other awards or pre-reform awards, and we note these aren't new material; they're within the exhibits of Mitolo referred to in the list, and I can take you to those paragraph references and page numbers if need be. But in the AWU's initial submission there was an award referred to which hasn't been criticised. There's one that has been criticised by Mitolo, but there's one that wasn't; a couple that weren't.

PN1716

The award reference that was criticised by Mitolo today in their written submissions was the Queensland Award and we just say the Mitolo's construction of that at paragraph 19 is entirely absurd. The reason for the word "from" doesn't operate with the words "throughout the State of Queensland". It's nonsensical. The word "from" is in there because of the word "dispatching from". We put that in at paragraph 33 of our reply submissions. So the word "dispatching" necessitates the need of the word "from". You can't dispatch on something.

PN1717

Mitolo's closing submissions are entirely incorrect in terms of grammatical construction. If we just look at the paragraph before the word "throughout" it can't be the case that their submission is correct. Every State award would have limiting words related to the State, "upon farms in that State". That's also buttressed by the fact that within that State at that time there was an Agricultural Produce and Grain Stores Award, so those awards worked together; one was for dispatching from a farm; another was for storing. That was the status quo at the time that the Full Bench of the Australian Industrial Relations Commission made their decision.

PN1718

But that's the award reference that was criticised. The one that wasn't criticised, and it seems to have just fallen out of view of Mitolo's submissions, they focused on that Queensland Award and with an erroneous construction of it, is the New South Wales Award. That's set out also in Mitolo's material. That's set out from page 274 in their exhibit. That award, if the Commission is minded to review it, is almost identical in its coverage clause to the current modern award. The AIRC saw fit to use the basis for the current award as the New South Wales State Award coverage clause. They're almost identical except the words "upon farm" precede the list of activities that you undertake upon that farm rather than after the list of activities. So not only did the Industrial Relations Commission turn its mind to that it actually exercised its mind to amend it to add perfect clarity; that those words preceding "upon farms" are not ambiguous. There is no ambiguity and no argument can be made that there is an ambiguity with a straight face.

PN1719

If we look at also the, I guess, soil from where this grew there's an argument made by Mitolo that the AIRC in award modernisations gave little consideration to the farm gate, and the term farm gate, but in their own material on one day - if you turn to page 308 of the Mitolo material, on one day that term was referred to on 13 occasions. So much so that Lewin C said, "Let's deal with those issues outside of the farm gate in other proceedings".

PN1720

Mrs Colquhoun for the NFF explicitly told the AIRC at the time in Lewin C that the approach of the NFF was that everything that happens on the farm should be caught in the scope of the agricultural industry which was behind the farm gate. In that one day 13 occasions it was referred to. There were stages in these proceedings when Agricultural scope had been set matters that were left for further stages would be dealt with later and that is how the process unfolded.

PN1721

Mr Smith said today that it was early on in the proceedings. That's the reason that it was early in the proceedings, and Mr Smith also said correctly today that the AWU did submit a non-locationally based award and it's true that they did. It also had much superior conditions to the conditions that have found their way into the current Horticultural Award because the concept was that before the Commission made the decision when it was going to end at the geographical farm gate, if we were roping in things that had to do with work of packing and storing and things of that nature that could have been off site the conditions would've been superior.

PN1722

So while a lot of attention has been placed on this Common Rule Victorian Award when we're looking at the coverage clause of the current award, we can't divorce ourselves of the thinking that that didn't come from this Common Rule Victorian Award. It actually came from a New South Wales State Award which listed exclusions very similar to the way that the exclusions have been listed in the modern award. This is all before the Commission today. This has all been dealt with in terms of evidence put before the Commission and by Mitolo themselves. The National Farmers' Federation, they support this miss-application.

PN1723

VICE PRESIDENT CATANZARITI: Is that strictly right? I mean the sequence is it may have begun that way, but wasn't there an intervention when there was a complaint by the industry. If you look at – so, in one sense, Mr de Carne, it looks like you're trying to change a bit of history. If you look at paragraph 57 of the AiG's submissions where the history is referred to, so it may well have been this journey was occurring and people were parking various things, and then it looked like a typical outcome was going to occur in relation to Horticulture, and then there was an intervention by the then Deputy Prime Minister, and in the end, where we are today, maybe we don't like the outcome of what the Horticultural Award actually says, but there was an intervention.

PN1724

MR DE CARNE: Yes. That's correct. But it didn't intervene to the extent that it touched the farm gate nor upon farms which shows that ‑ ‑ ‑

PN1725

VICE PRESIDENT CATANZARITI: No, but it changed the terms and conditions which is what is the problem.

PN1726

MR DE CARNE: Yes, even if you look – I don't have it before me now, but if you look at the Ministerial request it talks about the harvest and packing; it doesn't talk about the storing and grading. The ministerial request dealt with an outcry from an industry, and there were certain changes in terms of the harvest period, but it didn't change the application of the award provision. It didn't go to that extent. It was an outcry from the National Farmers' Federation primarily at the time, and the National Farmers' Federation at the time - and this is also in the material, this isn't rewriting history, I'll just read it. The submissions, and these are at page 247, tab 29 of Mitolo's material, the submission of the National Farmers' Federation were:

PN1727

Consistent with paragraph 4(b) of the request the application clauses in both draft awards are intended to cover all work undertaken on the farm behind the farm gate and to include the dispatch and forwarding of produce or livestock where this activity is undertaken by farm employees.

PN1728

Their position couldn't have been clearer, and on that 27 November transcript, Ms Colquhoun and all participants refer to the farm gate. They all refer to it because it was notoriously known. There's no susceptible meaning. It was notoriously known that farm gate was the term used to set a geographical boundary. That geographical boundary was also within the Industrial Relations Act in New South Wales with the definition of rural ‑ ‑ ‑

PN1729

VICE PRESIDENT CATANZARITI: How does that stack up with the evidence we have of Zerella where if you can get around it by putting one per cent of your product behind a farm gate? I mean, ultimately the Commission lives in a real world.

PN1730

MR DE CARNE: Extreme examples aren't often helpful and that's part of the problem with the evidence.

PN1731

VICE PRESIDENT CATANZARITI: Mr de Carne, we're living with the evidence. We have to deal with the evidence here. We have got direct evidence in this case where one employer is able to artificially get around the award by planting a particular product, the one percent. So is your definition that the farm gate is providing that one piece of crop behind a farm gate it's now the whole enterprise is in the farm gate?

PN1732

MR DE CARNE: No. The term "agricultural holdings" assists as well. But I will press the point that an ‑ ‑ ‑

PN1733

VICE PRESIDENT CATANZARITI: Mr de Carne, would you answer my question?

PN1734

MR DE CARNE: Your question? I would say that there's examples within every industry of employers ‑ ‑ ‑

PN1735

VICE PRESIDENT CATANZARITI: So your answer is because they're examples we should not take those into account?

PN1736

MR DE CARNE: No. I'd say that you need more than the ‑ ‑ ‑

PN1737

VICE PRESIDENT CATANZARITI: So there's no ambiguity in the award because there are examples. There's no ambiguity in the award because the examples don't help your case.

PN1738

MR DE CARNE: I will answer that question. I will answer that question. My answer is this; you've got examples from a few producers. We're talking about an industrial change that affects so many people across a nation, and that was what award modernisation was about; taking together with the nation and working out the confines and boundaries that would divide the rural and regional. We could have other extreme examples on the flip side. We don't have these yet, but we could. We could have people shipping the potatoes to huge lots in Western Sydney from Victoria and the cost of living and prices there are going to be much more extreme and harsh than those in the rural region and communities. I mean, farmers were allowed to do these things and use the same award. It was just that. It was for farmers to do it. The industrial history is there. If we're asked by the employer opponents to open up this history because they want an ambitious ambiguity argument then open it up. It's all before the Commission. Take yourself through this history.

PN1739

Some of the submissions that have been put are incorrect. They're incorrect to the extent that we're referring to the Common Rule Victorian Award for conditions. Yes, because an award modernisation has a paragraph about that. We are. A schedule of that award mind you; not the entire award. But we're not referring to the actual coverage provision from which this one came, and , I mean, Short v Hercus is a case that the Commission knows well, so if we're going to dig up the soil let's dig it up. There is a lot of history there. If we're not going to dig it up, and we're going to just do away with the ambiguity argument then that's fine. We can go to the other application that we're before. But that Horticultural State Award, clause 33 is relevant if we're going to start talking about historical pre-reform awards, and I do note that Mitolo, they saw fit to try and attack on the construction of the Queensland Award, but they didn't see fit to attack the New South Wales. They probably didn't want to draw too much attention to it.

PN1740

These things have been before the Commission. These farm gate concepts have been before the Commission and they have been determined. We don't really need to re-determine them. There is no ambiguity. Location based coverage is common. You know, we're talking about the opening the farm gate. You could open the flood gates here a little bit if you allow these variation applications. You could have people saying they have these full integrated workforces and, you know, "This doesn't make sense to the enterprise that I've set up. I don't want to comply with the award", but non-compliance disputes over whether or not an award is the award that you want to apply doesn't give rise to these arguments, and it shouldn't give rise to the Commission's inquiry on a discrete basis on a site visit, evidence that we have some producers that also have packing operations, and they should get the relief that they want in this draft determination.

PN1741

If we just turn to the draft determination, counsel from Mitolo criticised paragraph 48 of the AWU's closing submissions. They criticise that paragraph. That paragraph, it isn't long, but you have to read it in the context of the draft determination we have before us as, you know, what the Commission is asked to do here. That paragraph, it provides:

PN1742

For many reasons outlined above the AWU does not consider that the Horticultural Award should cover an employer who does not undertake farming operations.

PN1743

If we go to the definition of enterprise in the variation proposed here, enterprise is extremely broad, and enterprise can include an employer that is engaged with others in a joint venture. I note the definition of enterprise is capitalised but in the draft determination it might be a typographical error. There's no capitalised definition that it refers to. But I'm imagining that it refers to in part 3 or paragraph 3, "Horticultural enterprise", another potential typo, because that enterprise should be capitalised, "means an enterprise which as an important part of its enterprise". So that's where the operation of that definition works, "engages in raising of horticultural crops"

PN1744

So as an important part of an enterprise which could be a joint venture, which could be a joint venture, we fall into this great new application clause. There's no ambiguity there at all, is there? And I say that with an element of sarcasm for the transcript. This will create uncertainty, and we hear the NUW's submissions on that. They're quite clear on how much uncertainty there is.

PN1745

We were told today by Mitolo's counsel, "Well, if you want to work out control, you just do that". What horticultural worker knows how to log on to InfoTrack, pay a fee, and work out whether there's control or CreditorWatch. Which one? I haven't met one. I worked closely with the horticultural industry over the years. I haven't seen one of those workers who would know how to do that. I know lawyers that don't know how to do that.

PN1746

This definition of enterprise cannot be made by this Commission. It cannot be the variation. That's what Mr Crawford is talking about at paragraph 48. That's what he's speaking to. It shouldn't cover an employer who does not have a farming operation. The way that this works, and if I've read it correctly, it means that it could. You could have no farming operations. You could be an enterprise or have a part of an enterprise which is in a joint venture and an important part of that joint venture or a party to that joint venture engages in the raising of industrial crops. So what is an important part? Where does that find its way into industrial jurisprudence. I mean, it doesn't say the principal function, which is something that we've seen before. It doesn't say the dominant nature of the establishment. It doesn't follow any jurisprudence that I'm aware of, and if the Commission is aware, I mean, I would like to see it, because this important part is a very novel concept.

PN1747

Making a variation to this effect is a very significant step with many unintended consequences available to people that want to abuse the system. No system is perfect in awards and as you said there are examples where people can circumvent certain award coverage by falling into a definition, but that is the nature definitions. That is the nature of industrial work. Non-compliance isn't a reason to give rise to a variation.

PN1748

But just back to this proposed variation, I mean, it would need to be actually amended which is late in the proceedings for it to make any sense, so while there's some valiant submissions made about the industry and our virtually integrated industry, this is subject to abuse. This creates uncertainty. This creates ambiguity. The words "upon farm" do not. The words "upon farm" create no uncertainty, and when the Full Bench of the Australian Industrial Relations Commission used the words farm gate they did so because it was notoriously known that it's easily forgotten now by Mitolo Group weren't participating, the AI Group weren't there. They weren't there earlier on either. It was stage 2 proceedings, they didn't need to be there. They were concerned with their Food Preserving Award and Manufacturing Award. We were there. The AWU was there and that was notoriously known that farm gate meant exactly that. It was notoriously known that "upon farms" says exactly what it does. There is an ordinary meaning there. To go further and try and change this because we've got a few participants in the industry, and I say that strongly, a few participants, a paucity of really good economic data on how this is going to affect anyone, and the possibility for abuse, it can't meet the modern award objective. It can't provide a proper safety net.

PN1749

VICE PRESIDENT CATANZARITI: How do you overcome the complaint about section 134(1)(e) the principal increment remuneration for work of equal or comparable value given the evidence that's before this Commission?

PN1750

MR DE CARNE: Yes. It is a consideration as are other considerations and I take that point, but, as I said, you know, these awards, how do we do that for a traffic controller, in the onsite construction industry? A traffic controller ‑ ‑ ‑

PN1751

VICE PRESIDENT CATANZARITI: Mr de Carne, can you just focus on the case in front of us rather than analogies, please? I've asked you a specific question.

PN1752

MR DE CARNE: It's an award, and it's an award system we're speaking about.

PN1753

VICE PRESIDENT CATANZARITI: So your argument, I take it then, is because the award is imperfect we should just ignore the principle, should we?

PN1754

MR DE CARNE: No. We would say that there could potentially be different labour requirements offsite and onsite, like, I mean, I wasn't at the site visit, so I can't speak to what everyone else has seen, so perhaps I'm going to be a little bit broader in the way that I speak about these things but there's different labour requirements. I mean, we could be – we've got a one kilometre is spoken about a lot in the evidence, but what if we start travelling distances to big production facilities and cooperatives? That could be very different, and it would be very different, and there would be very different machinery. We have workers in the horticultural industry that get their 12 hours that they want because they pick and then they pack onsite. If we created a different dynamic we might be taking those people out of their work. There's about to be overtime for horticultural workers. They won't enjoy that benefit if they were to pick and pack on smaller operations. The National Farmers' Federation members would care about that. Maybe not Australian Industry Groups as much, but there are different labour requirements depending on where you are. Farm work is generally done outdoors whereas packing facilities are indoors. Packing facilities are, have been given in the evidence, a 12 month operation. They could be sourced from multiple farms. It is creating a different supply chain, and that's what the employers want. They want to create a reduced cost for the employers. They don't hide from it.

PN1755

Harvesting requirements are unique. That was the reason for the change to the Ministerial request. Packing certain produce is unique. That was the reason for the change with the Ministerial request. Significant additional labour is required for a shorter period of time, but while the Commission might not like the analogy it isn't unique to this industry. There's award coverage classification overlapping provisions because of that. There's so many instances of work that could be performed in one location and another of different value. Clerical duties is a great example. If you don't have them in your award then they're elsewhere, but if they're in your award you might be subject to different requirements. It doesn't mean that we carve up and change, like, I mean, fundamentally change something that we've given due consideration by a Commission at the time in a long process that divided these lines. To re-divide these lines in these circumstances with the evidence before this Commission is very bold, and it could have very many unintended consequences. It shouldn't be persuaded by arguments led by one employer. Led by one employer; shouldn't be persuaded by those. If there's nothing further, that's the AWU's submissions.

PN1756

SENIOR DEPUTY PRESIDENT SAMS: Yes. Mr de Carne, this may not be necessarily relevant to our determination under these applications but it does strike me as a little odd that the AWU would be supporting propositions which may have the real effect of reducing or cutting out its membership in its traditional areas.

PN1757

MR DE CARNE: I don't see that to be the case if we ‑ ‑ ‑

PN1758

SENIOR DEPUTY PRESIDENT SAMS: No?

PN1759

MR DE CARNE: No, I don't. No, I don't. I don't see that to be the case. The horticultural industry definitions within award have limited relevance to the rules coverage since the changes to the Act, and this Commission knows that. So I don't see that to be a problem. But more than that the AWU being an employees' ‑ ‑ ‑

PN1760

SENIOR DEPUTY PRESIDENT SAMS: A union doesn't normally start waving flags in a support of a union that might be taking its membership.

PN1761

MR DE CARNE: It's not about the membership at this point, your Honour. It's about what's best for the workers.

PN1762

SENIOR DEPUTY PRESIDENT SAMS: I've been around a long time, Mr de Carne, and I've dealt with unions for a very, very long time, and if you're telling me that their activities are not about membership then I think you're very much mistaken.

PN1763

MR DE CARNE: No, I'm saying that the support that's been given by the AWU isn't. Doesn't that show the genuine nature of the AWU's concern for the individuals who will be affected by the proposed changes? I mean, inversely for the argument that you raise, I mean, if a union is supporting another union and if you say I don't know anything about this, that that has to do with crossing of membership, and someone's membership to rise, well, if it increases the value of the workers' output, and the AWU is here supporting it, engaging people to support it, it shows that they're genuinely concerned with the outcome that might arise from this application.

PN1764

SENIOR DEPUTY PRESIDENT SAMS: That's a very laudable sentiment.

PN1765

MR DE CARNE: They're genuinely concerned.

PN1766

SENIOR DEPUTY PRESIDENT SAMS: One I am not very familiar with, I should say.

PN1767

VICE PRESIDENT CATANZARITI: Thank you. The Commission will adjourn till 9 o'clock tomorrow.

ADJOURNED UNTIL FRIDAY, 04 AUGUST 2017 [2.10 PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #8 STATEMENT OF KYLIE DUNN DATED 01/08/17.............. PN1454