PN1

VICE PRESIDENT CATANZARITI: Thank you, I'll take the appearances.

PN2

MR J BOURKE: If the Commission pleases, I appear with my learned friend Ms Gillian Walker for Mitolo Group and Maranello Trading.

PN3

VICE PRESIDENT CATANZARITI: Thank you, Mr Bourke.

PN4

MR Y BAKRI: If the Commission pleases, my name is Bakri. I appear for the National Union of Workers.

PN5

VICE PRESIDENT CATANZARITI: Thank you, Mr Bakri.

PN6

MR B ROGERS: If it please the Commission, my name is Rogers, initial B. I am the general manager for the National Farmers' Federation.

PN7

VICE PRESIDENT CATANZARITI: Thank you, Mr Rogers.

PN8

MR S SMITH: If it please the Commission, I appear for the Australian Industry Group, Smith, initial S, with Ms Vaccaro. I also lodge an appearance for the Voice of Horticulture, who can't be here today but will be here tomorrow.

PN9

VICE PRESIDENT CATANZARITI: Yes, I understand that, Mr Smith: thank you.

PN10

MR SMITH: Thank you.

PN11

MR S CRAWFORD: If it please the Commission, Crawford, initial S, with Walsh, initial R, appearing for the AWU. Can I at this point request leave for me to depart shortly? I'm just in a matter at the Federal Circuit Court. Ms Walsh will be here in my absence.

PN12

VICE PRESIDENT CATANZARITI: Yes, that's fine, Mr Crawford.

PN13

MR CRAWFORD: Thank you.

PN14

MS E MACDOUGALL: If it pleases the Commission, my name is MacDougall, initial E. I seek leave to appear on behalf of Gayndah Packers Pty Ltd.

PN15

VICE PRESIDENT CATANZARITI: Thank you, Ms MacDougall. All right, permission to appear is granted to the parties who seek permission to appear. Now, just some housekeeping matters before we start: the matter is currently set for three days this week and three days in July and two days in August. If I deal with the August dates first: correspondence has emanated from the Commission acknowledging there is a problem on 2 August and offering 3 and 4 August as replacements. We've not heard any communication that's a difficulty. Is 3 and 4 August acceptable to everyone?

PN16

MR BOURKE: No objection at our end.

PN17

MR SMITH: Yes.

PN18

VICE PRESIDENT CATANZARITI: Yes, now the second part of that is there has been a request that that be heard in Melbourne. Given the bench has been reconstituted to three people the bench will sit in Melbourne if that's the parties' request. Does that remain the request?

PN19

MR BAKRI: From our side of the bar table it would be preferable but we will fit in with whatever the Commission - - -

PN20

VICE PRESIDENT CATANZARITI: Well, we're going to go through two different scenarios: one is 3 and 4 August and then the July dates where there are some witnesses. Do you prefer that to Melbourne?

PN21

MR BAKRI: The hearing in Melbourne that we would prefer is 3 and 4 August and - - -

PN22

VICE PRESIDENT CATANZARITI: 3 and 4 August?

PN23

MR BAKRI: Yes.

PN24

VICE PRESIDENT CATANZARITI: All right, well, as I understand it there was silence on the other side saying neither accept or reject. So in that case we'll move 3 and 4 August to Melbourne. What about the July dates? Is there any issue about those dates remaining in Sydney?

PN25

MR BAKRI: There is not from our point of view.

PN26

VICE PRESIDENT CATANZARITI: All right, so the July dates will remain in Sydney. There may be a slightly later start on July 4 at 10.30. Other than that I note that the issue of objections has been canvassed previously before Deputy President Dean. I understand that the accommodation has been reached that there are no formal objections as such and the matters will be dealt with as the evidence unfolds in terms of the fact that as of submissions really rather than objections. Are there any other housekeeping matters from the parties? Right, we then note that there is a draft timetable. It will commence then with the opening statement from Mitolo Group.

PN27

MR BOURKE: If the Commission pleases - could I first with trepidation hand up to the Commission some more paper? We have bound copies of our three volumes of submissions for the Commission - working copies.

PN28

VICE PRESIDENT CATANZARITI: Is that different to the two volumes that were in last year's documents?

PN29

MR BOURKE: It's the same.

PN30

VICE PRESIDENT CATANZARITI: The same.

PN31

MR BOURKE: Could we also hand up our - we've done a folder, an opening folder. Well, can I just say with respect, the negotiation skills of the bench have been demonstrated. Yes, so you should also have a white folder, which is our materials in relation to opening. So Mitolo Group and Maranello, which I'll from here on just simply refer to as Mitolo, seek variations to the Horticulture Award pursuant to the four-year review under section 156. Alternatively we seek equivalent variations under section 160 to remove ambiguity or uncertainty and we seek such variations to commence from 1 January 2010.

PN32

The net effect of the changes we seek is to insure that our employees that work at the Angle Vale Road site, which is in Virginia in South Australia, are covered by the Horticulture Award and not the storage award. That work involves the separating of waste material coming from agricultural land and in relation to Mitolo that is potatoes and onions: the sorting and grading of such vegetables, the washing, treating and packing of the crops and forwarding of the produce. We say this work, if it's not covered by the Horticulture Award should be covered by the Horticulture Award. It is the best fit and shouldn't be covered by the Storage Services Award.

PN33

Could we take the Commission to our opening folder and just show the Commission some photographs of the work we are talking about? If one goes to our white opening folder at tab 10, there's a statement there of Ms Colquhoun and if one goes - there is pagination - if ones goes to page 18 - - -

PN34

VICE PRESIDENT CATANZARITI: Yes - when I read what was already filed, Mr Bourke, it had struck me - I was wondering how we're going to - I understand this, whether pictures is going to be enough or whether this is the sort of matter, regrettably, that may require inspections down the track because as I understand it the union's position is pretty much against saying this - they're saying it is cold storage work.

PN35

MR BOURKE: Can I say - and I can speak from personal experience, having gone to Angle Vale, it is a revelation because the visit does tell a story. If I can say you have the Mitolo appeal where it was said in relation to an agreement that was voted up, a Full Bench said the relevant BOOT test was the storage award and made a passing comment about the facility there being only 35 kilometres from Adelaide. You go to Adelaide and you drive out to this facility very quickly, unlike Sydney. You're quickly in a rural setting. It's a rural environment. It's zoned primary industry and the other thing is, you get in your car and you drive about five minutes and there is all these farms around of Mitolo; of Mitolo.

PN36

The produce is being brought straight off the farm into this facility and the facility is currently being treated and the union's position is as if we are running a facility that packs and stores TVs, computers - we don't. It is absolutely integrated into agricultural environment and can we say we would encourage the Commission to consider a view but our reluctance to ask for that was the sheer inconvenience.

PN37

VICE PRESIDENT CATANZARITI: It was more inconvenient when there was five members of the bench.

PN38

MR BOURKE: Yes.

PN39

VICE PRESIDENT CATANZARITI: It's now changed.

PN40

MR BOURKE: Yes.

PN41

VICE PRESIDENT CATANZARITI: I must say for my part at least I thought about it because I was struggling with the diametrically opposed arguments - - -

PN42

MR BOURKE: Yes.

PN43

VICE PRESIDENT CATANZARITI: - - and trying to form the view wholly on pictures, which is what is being put. But the bench will consider that over the morning tea adjournment.

PN44

MR BOURKE: Yes. Can we just take you to the pictures and I will take you to one other thing and I will come to this in the opening: not only does Mitolo have farms all around this facility, they've got competitors all around this facility. Competitors who are - they're potato producers, they're competing in the same market but because they've got their facility, what's said to be behind the farm gate, they're on a different award. They've got a competitive advantage because we don't shy away from the fact that penalty regime under the Horticulture Award is a lot more lenient. It's a lot more flexible. It's not as unforgiving. It's deliberately so because of the very nature of horticulture: seasonal, weather-driven, timeline-critical because you have - you're not a TV. You've got perishable goods, need to get to market.

PN45

You'll hear evidence nearly all our produce, when it hits that facility, is dispatched to market same day. Occasionally it might take another one to two days. Potatoes that are best before life of 10 days. This is absolutely integrated with the produce coming off the farms and as I said, you go down the road from Mitolo and there is a place called Zerella. Direct competitor - they have just had in March this year an agreement made with the NUW approved with the BOOT test. All parties agreed, the Commission agreed, was under the Horticulture Award.

PN46

They are paying in terms of the underlying award, lower penalty rates than what we have to pay if we're under the storage award. Only difference - they've got a virtually identical facility. You'll see it - identical facility for washing, treating, grading, packing, dispatching potatoes. But because about 1 per cent of their product, they also grow on that property and the NUW say that's enough. They're behind the farm gate. They're under the Horticulture Award. We, because we don't grow product, we're under the storage award. We're under the same award that covers people moving, packing, shipping TVs.

PN47

It's wrong. It's wrong and we say that arbitrariness is entirely inconsistent with modern agriculture, modern economy, modern award. Can we take the Commission to the photos, starting at - you'll see - it's a bit hard to see the numbers. They're in the top right-hand corner.

PN48

VICE PRESIDENT CATANZARITI: You want to tender this folder as an exhibit?

PN49

MR BOURKE: If the Commission pleases.

PN50

VICE PRESIDENT CATANZARITI: It's probably easier to do that, so Mitolo Group's opening documents will be exhibit 1.

EXHIBIT #1 MITOLO GROUP'S OPENING SUBMISSION DOCUMENTS

PN51

MR BOURKE: If the Commission pleases. If you open up - on the left-hand side there is a page 18 on the right-hand side because it's double-sided. You'll see an oversize and that is product being directly put from Mitolo farms into big containers and taken straight to the facility. You then have in 19 those containers being taken straight to the facility at Angle Vale Road and then if you move to 21 the product is being washed. So far away from the storage of TVs. You then move to 26. You'll see these grading lines. 27, you'll see this is where they - there's the final grading check and one of the witnesses to be called - Kay Rowt by the NUW - that's her job.

PN52

That is her job and that exact task is done at Zerella down the road, a kilometre away and if she did that exact same job she's under the Horticulture Award. If she does it at our property and the unions say we're under the storage award. Then you move to the next page: you'll see the best before, 19 June. This is product that was packed 9 June 2014 so time is absolutely critical. Then if you could move to 39, this is unsaleable waste we have pulled off the product that was brought into the facility and it's been shipped off the facility. It's highly agricultural; highly agricultural.

PN53

Okay, I want to say something first about who Mitolo is. I'll say something about why we should be if we're not already under the Horticulture Award. Three, I want to say why we want to be under the Horticulture Award and four, I want to say why a variation meets the criteria for modern awards and alternatively we'll deal with the ambiguity and certainty point. So what the evidence will show is that Mitolo is a large-scale potato and onion producer. It's business is substantially in South Australia. It operates through various entities but the bottom line is at the end of the day it's a family business.

PN54

It's been operating since 1972. It has over 400 employees. At the Angle Vale Road site there is 240 workers who do the type of work I've just shown. There is another 110-odd workers who do land preparation, growing and harvesting. Most of the work is potatoes: it's 80 per cent. 20 per cent is onions. There is also a presence, which I won't address you on - they have a presence in New South Wales. In South Australia you'll see in the evidence we grow potatoes in Virginia, exactly where the facility is, a matter of kilometres away. We also grow in Riverland, Mallee. We have some 7,000 acres under cultivation for potatoes and onions.

PN55

Angle Vale, we have 21 locations where those potatoes - I'll just talk about potatoes from now - are grown. Angle Vale which fits into that arrangement - agricultural arrangement, we're talking eight hectares. Our major customers: wholesale markets, supermarkets. On any view on the evidence you will see this is a highly-integrated business structure. It is zoned - the exact area where the facility is placed is zoned primary production and precinct description horticulture. As we said, it is surrounded by farmland.

PN56

What we have - why we are not under the Horticulture Award, the unions say, is ha, ha, ha, you're not behind a farm gate because we don't grow any spuds there. What you will see from the union's arguments is no defence of the logic of the arbitrariness of the farm gate test. What you see is them saying, "Look, the first part of the award they focussed on the farm gate." That's it. They completely ignore that this is a review. Does it - after we've had the award for four years more and you look at the experience - does it justify that arbitrary outcome, that arbitrary line, where Zerella one kilometre down the road work exactly the same under a completely different award?

PN57

DEPUTY PRESIDENT SAMS: How many employees does Zerella have?

PN58

MR BOURKE: I don't know the answer to that but you will see it's a similar-sized business. It's a similar-sized business and the facility is a similar size and during the opening we'll show you the aerial shots of the facility. They're virtually exactly the same. They are a serious, major player, Zerella. Can we go back to - can we go now to - I hope you all have a volume 1. Sorry, 450 employees - so it's pretty much exactly the same. Could you go to our sky blue volume 1, tab 10? This is the set-up. You'll see there at the top all the various locations in South Australia where potatoes are grown on Mitolo farms.

PN59

You've got on the right-hand side top-up supply: we take about 5 per cent from other suppliers that are all dealt with under our name. But rather than having behind a farm gate on one view at some 10 locations a facility that does washing, grading, treating, packing, dispatching, we've got it in a central location. But the outcome of that is a more unforgiving, more inflexible award but we are sitting in the agriculture sector in our submission, undeniably. We are horticulture. We should be having the flexibility that drove the horticulture modern award. The underlying philosophy - - -

PN60

VICE PRESIDENT CATANZARITI: On this document you've got 10 growing sites that funnel into one site for processing, is that - - -

PN61

MR BOURKE: Correct - and can we just - just to highlight the arbitrariness of this outcome, you'll see up the top, Nildottie. It's up the top, two to the right. We only just bought that site September last year. That site had its own facility on it for washing, et cetera, through to packing. So that site under the farm gate test was under the Horticulture Award. That work - that exact work - we have now shifted to the central location in Virginia. Under the union's position, not behind a farm gate, you now come under the storage award.

PN62

Now, can we now go to - sorry?

PN63

VICE PRESIDENT CATANZARITI: On the document you've got Virginia as a growing site as well so there is stuff growing at Virginia as well?

PN64

MR BOURKE: Correct - around Virginia, correct. Could we take - can we take the Commission now to tab 18, which is a Google map? You have to look at this this way. If you go about the middle of the top of the page and take your eye down you see Angle Vale Road. If you hold it up this way, Angle Vale Road - that's where the facility is and then you will see all these other farms around. If you go the top of the page to the right-hand side there's two farms: Curtis and Penfield. You move back to the left and then drop down, you see Roberts Road, Virginia.

PN65

Move further to the left, slightly, and drop down: you see Latz Road, Virginia. Drop down a bit further, you see Taylors Road, Virginia. Move over to the right you see Penfield Road, Virginia. This is all rural territory. All those farms are Mitolo, which feed this facility, are within about 8 kilometres; a short drive. The product, the produce is dug up and very quickly brought on to the facility.

PN66

DEPUTY PRESIDENT SAMS: What are all those things that look like Rubik cubes everywhere?

PN67

MR BOURKE: They tend to be storage sheds.

PN68

DEPUTY PRESIDENT SAMS: I see.

PN69

MR BOURKE: Sorry - and glasshouses and greenhouses, sorry. Now, this all blew up when we made a collective agreement and sought it to be certified and we were found that we sat in relation to the BOOT test under the storage award and the decision was Mitolo Group v NUW [2015] FWC FB 2525. At paragraph 59 of that decision the Full Bench said, look, you raised a lot of issues about the Horticulture Award. A lot of people intervened. Why don't you come back and thrash this out during the four-year review? We're here.

PN70

Now, in our submission one task with respect that the Commission needs to grapple with is is the farm gate an appropriate dividing line? We'll come back to this because even the term, "farm gate" - it's not straightforward, what it means. One thing you'll see from the unions - although they say, "farm gate, farm gate - you're not farm gate" - that's their submission; do they tell you what farm gate is? No. But we say fundamentally look at an award that it's intended to serve the horticulture sector and are you seriously saying we're not in the horticulture sector? We're not in the horticulture industry?

PN71

As we've said, we've heard nothing defending the arbitrariness of a farm gate, except that's what they first came up with in the first cut of the award. But just on, "What is the farm gate" - is the farm gate a physical farm gate so that when Zerella down the road, 1 kilometre, have a facility about the same size as us but 1 per cent of their product is grown behind that gate NUW say, "Horticulture Award." Exactly the same work as what our workers do, 1 kilometre up the road. Or is the farm gate really something more about - okay, what would a traditional mum-and-dad farm do?

PN72

What a mum-and-dad farm does is they not only dig up the potato, they get it ready for sale. So what do you have to do? You have to wash it, you have to grade it, you have to pack it, you have to get it ready for dispatch. That's what we do but we do it in a separate location. On that level we are behind a farm gate but we're in a centralised facility with farms all around us. What in our submission is consistent with the modern award - you don't want the structure of a business driven by, "I'm trying to fit in with the right award." You want business structures to be driven by economies of scale, efficiency, and if you choose that you shouldn't have to pay a penalty: "Aha, you're in the storage award now because you've chosen economies of scale and centralisation." Then there is your issue of the farm gate - is the NUW correct? Do you only have to do 1 per cent of your product behind a farm gate and your facility gets a tick or does it mean all the product that's processed has to come from that same property? If that's the case, you create a nightmare position where if we want to come within the Horticulture Award we have to have a plant in every single facility and every single farm - total nightmare.

PN73

VICE PRESIDENT CATANZARITI: So the product that's actually grown at the particular site - there's some product grown at Virginia site - that is in the farm gate?

PN74

MR BOURKE: On the NUW's position - - -

PN75

VICE PRESIDENT CATANZARITI: If your competitive analysis is correct, any product that's grown on the site at least that part of the product must be in the farm gate.

PN76

MR BOURKE: Correct. But the NUW's position - - -

PN77

VICE PRESIDENT CATANZARITI: But the rest of the product is not?

PN78

MR BOURKE: Well, that is the question. That is the ambiguity. The NUW's position is as long as you've got some product behind the farm gate, where the facility is, all product you bring in is behind the farm gate because they ticked off - they made the Zerella enterprise agreement and that is the arrangement. Zerella has farms all around where its facility is. It brings product in but about 1 per cent of its product it grows in the same location.

PN79

DEPUTY PRESIDENT SAMS: Well, I assume there is some historical context to all of this, is there, that we'll be told about apart from the recent experience with the approval of the agreement?

PN80

MR BOURKE: Historical context for the evolution of the farm gate?

PN81

DEPUTY PRESIDENT SAMS: Well, that, and what happened to Zerella.

PN82

MR BOURKE: Well, we are not Zerella.

PN83

DEPUTY PRESIDENT SAMS: No, no, but you keep referring to it.

PN84

MR BOURKE: Zerella is being called - because that is a classic case study to demonstrate why there needs to be fixing up of the coverage in relation to horticulture - that exactly the same work 1 kilometre up the road gets a tick because 1 per cent of their product is behind the fence. In our submission that's just - that arbitrariness is inconsistent with modern business, modern horticulture, modern award objectives. We've had no explanation how this is rational, this is logical. The NUW have confirmed that is their position; that's good enough.

PN85

The risk is - and you can infer this does occur - people, primary producers, will put token amounts of produce on its central locations where they have their washing through to packing facilities in order to fit under the Horticulture Award and that shouldn't occur because that is generating inefficiencies and we know what follows inefficiencies: increased costs, increased prices, lack of competitiveness. In our submission, consistent with the objects of a modern award, you want a level playing field.

PN86

You want people where they're doing exactly the same work - washing through to packing - as part of a horticulture industry competing on a level playing field and not having Zerella, one of our major competitors, under an award where there is greater flexibility in terms of penalties, to what the unions say we are covered by simply because we've chosen a central facility where we don't have any product growing there as well. In our submission one test - whether there's a need for variation - is this outcome really arbitrary?

PN87

You could talk about why do they do it, why do they not do it but at the end of the day this is a review. Does it stand scrutiny? In our submission, it doesn't. Now, can we go back to Zerella? Could you go to our opening folder, the white one, at tab 10?

PN88

VICE PRESIDENT CATANZARITI: Mr Bourke, I'll make exhibit 2 the three blue folders.

PN89

MR BOURKE: Thank you.

PN90

VICE PRESIDENT CATANZARITI: I note that they do include witness statements but I won't make the witness statements part of the exhibit.

PN91

MR BOURKE: Thank you.

EXHIBIT #2 OPENING SUBMISSION MATERIALS FOR MITOLO GROUP

PN92

MR BOURKE: If you go back to the bundle of photographs - if you go to page 40 you'll see a big sign with an, "M," up the top. Now, if you see that with the car, then you've got that big sign - that is a photo at the front gate of the facility, looking out: rural land as far as you can see. Then if you move to page 53 you stand at the front gate, outside the front gate, of our facility. You look to the left, you see the sign of Zerella, our major competitor, 1 kilometre to the left, down the road, director competitor, exactly the same facility, doing exactly the same things under a different award.

PN93

The NUW's witness, Kay Rowt, if she quit Mitolo tomorrow and walked down the road 1 kilometre doing exactly the same work - grading - she would be under a different award. We know that is the NUW's position because they ticked off - they're a party to the Zerella agreement. Going back to the folder, can you go to page 42? That there is an aerial shot of the facility where the washing through to grading and packing is done. You then move to page 51 and you'll see an aerial shot of a very similar-looking facility but on the right-hand side there is some area for the growing of produce. That is the difference.

PN94

DEPUTY PRESIDENT SAMS: Page 51, Zerella - - -

PN95

Then if you go back to page 47 - sorry, yes, Zerella - I apologise. I didn't say that. On the right-hand side, that is where you see there part of their 1 per cent of produce grown and then you look at page 47. On the same property where we have our facility, you'll see that we previously grew seeds and we did variety trials on page 47, 48, 49 through to 50. We're not doing that at the moment but that was found not to be of sufficient agricultural character to give the facility to come within the Horticulture Award but you've got the 1 per cent of potatoes being grown down at Zerella makes the cut and is approved. Could we, as part of our opening, tender the Zerella enterprise agreement, which was approved as meeting the BOOT test under the Horticulture Award? I won't take you to it now - - -

PN96

DEPUTY PRESIDENT SAMS: So what do you do in this area that you say were trials, that are not done now?

PN97

MR BOURKE: It was trialling different styles of potato varieties.

PN98

DEPUTY PRESIDENT SAMS: But what do you do now?

PN99

MR BOURKE: Currently there's nothing there.

PN100

DEPUTY PRESIDENT SAMS: It's vacant?

PN101

MR BOURKE: It's fallow.

PN102

VICE PRESIDENT CATANZARITI: That will be exhibit 3.

EXHIBIT #3 ZERELLA ENTERPRISE AGREEMENT

PN103

MR BOURKE: Can I just say something about this enterprise agreement made with the NUW and Zerella: we say also in terms of the best fit, whether we're half-storage award or Horticulture Award, have a look at the classifications. We are the best fit in terms of classifications. What's interesting is under this enterprise agreement have the union and Zerella chosen the classifications in the storage award, and put that into the enterprise agreement? No, they've chosen virtually word-for-work - a few slight changes - the classifications in the storage award - sorry, Horticulture Award for the very same work we do in our facility at Angle Vale Road.

PN104

Then can you move - if you're staying with - - -

PN105

VICE PRESIDENT CATANZARITI: So there's presumably reference to grading and soaking, et cetera, in their classification structure?

PN106

MR BOURKE: Correct, correct - and that is one point we will make. One very important step for primary produce is grading. That's not quality control. Quality control is, "Is this potato unfit?" But grading is to grade the potato: is it a premium potato, is it a low-grade potato? It affects what market it will go to, what client you will go to. It's a critical phase. You don't have even a contemplation in the storage award of a grading activity. Kay Rowt, who does grading and the unions say under the storage award, you won't find a job. They have to put a square peg in a round whole and say, "It's quality control." It's not. Quality control is something different and they have quality controllers at this facility. That just simply demonstrates - - -

PN107

DEPUTY PRESIDENT SAMS: So are these the same variety of potato, because there's various kinds, kipfler and so forth?

PN108

MR BOURKE: I think there are different varieties, as I understand it.

PN109

DEPUTY PRESIDENT SAMS: I see. Anyway, just take - - -

PN110

MR BOURKE: Yes, thank you. Yes, there is a number of varieties Zerella and Mitolo do and they compete across those varieties. Can I move to page 43 because not only - if you pick up the page this way again and you go from the left, about two inches in - sorry I'm not using metric - so you'll remember the earlier Google shot which showed all our farms around Mitolo, we've got all competitors around it. You'll see Zerella directly above Mitolo - Horticulture Award.

PN111

You drop down the page from Mitolo, you see Virginia farm, direct competitor, horticulture. Then you move over to the top of the page to the right, about two inches in, you see Gawler River, another competitor, Horticulture Award. You're talking Virginia farm, less than 5 kilometres; Gawler River, less than 10 kilometres away and doing the same thing, different awards, competitors. Now as I said the unions - their main point seems to be farm gate was the for the first cut of the award, ha, ha. We say that is simply emptying content to the fact this is a review.

PN112

The second point they advance is, well, don't change anything because people will be paid less if they're under the Horticulture Award compared to the storage award. There's no doubt the base rates are less, slightly less. The penalty regime is not as generous under the Horticulture Award so we say that's not an answer to the case. That may be a consideration but at the end of the day, if the issue of coverage all turned on which award do you get paid more it would be spelled out in the legislation. It's not. At the end of the day it is simply one point to consider but we say the fundamental point here is why is there greater flexibility with the Horticulture Award? It's because of the need for flexibility and the fact if our facility is not under a farm gate, we still need exactly the same flexibility. We're under exactly the same pressures in terms of weather, seasons, perishable product.

PN113

This shouldn't become simply a beauty contest: who's going to get paid more under what award? But can we further say this: it's artificial to simply compare rates between storage award, Horticulture Award. The bottom line is these rates are in the awards at the moment. The Commission can call on their own experience in looking at the regime across - in the context of all awards and say, "Is this okay?" One thing that's not questioned is that the rates and the penalties regime in the Horticulture Award are appropriate because remember the modern award is just to set a minimum safety net, not bottom-line pay.

PN114

There is no suggestion in the submissions that when the Horticulture Award was first made it did not meet adequately that requirement of setting an appropriate safety net and reflective of the fact there's no questioning that it is an appropriate safety net, there is no application to amend the rates or the penalty regime. So we've got that comfort. In our submission at the end of the day whether Kay Rowt or Mark Johnston say they'll be worse off, that's their opinion - is really beside the point because as I said, the rates are there and they can be read in their context and they're not questioned in being adequate minimum rates.

PN115

DEPUTY PRESIDENT SAMS: Presumably the enterprise agreement you sought to have approved had higher rates?

PN116

MR BOURKE: It had higher rates but it didn't have - as I understand it it didn't have a penalty regime that met the BOOT test when compared with the storage award.

PN117

DEPUTY PRESIDENT SAMS: I see.

PN118

MR BOURKE: Yes.

PN119

DEPUTY PRESIDENT SAMS: So that was the focus?

PN120

MR BOURKE: I think that was the key thing that caused it to fail. Now, one of the NUW witnesses, Mr Johnston - he's given an extensive statement saying, "If I'm under the Horticulture Award I'm worried I'll be made as piece work." The union - it's a false point. The union don't seem to have told him that under clause 15 he can only become a piece worker if he agrees. The award says you can't be coerced and if there was any abuse of that power, you would be expecting the union to seek a variation of that provision in the modern award and there is not.

PN121

So at the end of the day, we come back to the fundamental point: what should be driving the Horticulture Award in terms of coverage should be industry. What industry are you in? What industry are Zerella in, what industry are all our competitors in, what are we in? There is only one answer. Second, looking at the classifications that are covered and we fit those classifications, the storage award doesn't. It doesn't even have grading. That has been unmasked. The NUW, they ran with the classifications in the Horticulture Award when it came to Zerella.

PN122

But what we have is the unions wanting a third requirement: we can tick industry, we can tick classification; let's have another one, location. Once you get to location it becomes indefensible. It's some mum-and-dad level - maybe location says something about whether you're in horticulture or not but not anymore, in terms of modern agriculture. But they want the third - location, got to be behind the farm gate, as we said, whatever that means. Have they dealt with why Mitolo doesn't need the flexibility of the Horticulture Award but Zerella does? No, they don't touch it. They don't touch it.

PN123

We say at the end of the day, just simply location, farm gate, is with respect simplistic, unforgiving, arbitrary and doesn't generate appropriate business outcomes; modern outcomes. I'm just going to cite these sections rather than take the Commission to them, just for time sake. The NUW say we're caught by section 156(3). That deals with the fact in relation to the making of minimum wages under the modern award, or varying them, and that we have to meet certain requirements under that we haven't been. Sorry, the case is about coverage, not minimum rates. We're not seeking to change the minimum rates under the modern award and note one, under section 156(2), shows the clear distinction in the Act between coverage issues and minimum rates issues.

PN124

NUW then say 136(1) applies: "You haven't met that." That is varying or cancelling award where you're going to leave people award-free; modern award-free, and we're not doing that. No one is suggesting we are. You're either one award or the other. Can I just draw also the Commission's attention - when you go to section 132, the guide to the modern awards, it talks about making modern awards for industries or occupations, not locations. Now, maybe a location might be a factor in determining whether someone is in the horticulture industry or not but not hard line, unforgiving line as to, "Let's have a look at your gate." Then we say we tick off the bulk of the criteria under section 134 in terms of efficiency, effectiveness, competitiveness - I won't step the Commission through them all - flexibility and simple.

PN125

Once you have the dividing line as the farm gate, which actually isn't even in the award itself but appears to be the de facto demarcation, it's not simple. It's difficult. As we've said, where does the farm gate begin and end? It's not simple. It needs to be fixed. I'll just give you a couple of examples of the difficulty with the farm gate. Do you have to grow something behind the farm gate or does it just have to be agricultural land, because on the evidence with potatoes you generally rotate. So you grow on one area of land and you won't use it again for another five years, four years. So for the periods where it's fallow, there is no agricultural activity going on in that sense. Are you behind the farm gate? Two: do you have to be on the same certificate of title? Does it have to be owned by the same - does all the activity have to be owned by the same entity or can it be part of an enterprise?

PN126

If you ever do take a view of the Virginia area you'll see one thing: the Highway Commission of South Australia - they love this area because they can put a road through something - through a property - and you won't be knocking down anyone's house. You'll see roads going through peoples' properties, all over Virginia, and you'll see these types of things happen. I'm not making it up. You'll have a block of land, facility, crops and there is a risk someone is going to put a road through there and so the facility is on the other side of the road now, the crops are on one side. Are you no longer under the farm gate?

PN127

This is how arbitrary, inflexible, all this is.

PN128

DEPUTY PRESIDENT SAMS: So no one actually lives on the property?

PN129

MR BOURKE: There might be some worker accommodation on these properties. But generally it's not permanent: people don't tend to live on these properties. If you look at the NUW, AWU submissions, they don't deal with any of this. It's all too hard. All too hard - all they do is quote the fact that in the original state with the original award, they said farm gate. Now, I just want to deal with one other point too: the NUW at paragraph 79, they say - they seem to concede, "Your case, it does show that these changes are" - they are "nearly desirable." They're conceding, "desirable."

PN130

They say you've got to show they're necessary and they cite an authority, SDA v National Retail [2012] 205 Federal Court Reports 227. Well, you won't find anything in the four-year review regime that says you have to decide it's necessary to make a variation. Apply the criteria, 134. If you decide, "I think it should be made," you can make it. The term, "necessary," sits within 138 in relation to the type of terms you may want to put in an award. It's directed to the fact you don't want big, fat modern awards that are enormous and become a burden on business - become a regulatory burden. But there is otherwise no such check here. We're not asking for new terms. No one is arguing we do need a term regarding coverage. It's question of what it should be. Now, can we come to the AWU? Can I just say, need to observe - if you read the submission - unnecessarily disrespectful response to our submissions.

PN131

What do they say? Again, they don't defend the logic. They say, "There is nothing wrong with having just location as the decider whether you're in an industry or not." They roll out in paragraph 33 - they say, "Have a look at this award." They quote clause 1.4 of the Fruit and Vegetable Growing Industry Award 2002, state award. They say that's the gold standard. It picks up exact activities we do: handling, treating, packing, dispatching of fruit and vegetables - exactly what we do, that we want coverage for.

PN132

But you have a look at their gold standard clause - it doesn't talk about that it has to occur on a farm or behind the farm gate. It says or from - on or from fruit and veg farms throughout Queensland. It doesn't even have to be your own product. Well, we fit within their gold standard clause and in fact ours is strong because it's our product: it's our potatoes, it's our onions. Their model clause, we fit into it but they will deny us our amendment that we seek under the Horticulture Award. It doesn't stack up.

PN133

We say if there is some test of necessity, we meet it. This needs to be fixed. We otherwise rely on section 160. We note 165(2), that we will need exceptional circumstances if any variation is to be retrospective. But unless it is it's clear there is going to be disputation over what the situation is between 1 January 2010 and the time of any variation. Coming back to farm gate, we really say - and this is a point picked up by the NFF - what you're really talking about is traditional farm activity, seed to bag: what needs to be done before it can go to the first point of sale.

PN134

All this work has to be done if you want to be in the horticulture business and we do it with our own produce but we're left out.

PN135

VICE PRESIDENT CATANZARITI: What would you say to the proposition that if Mitolo was not producing the products - not growing the products at all - and all it did was operate the facility, would that make a difference?

PN136

MR BOURKE: It could definitely make a difference.

PN137

VICE PRESIDENT CATANZARITI: Because I'm just looking at the Leo Tolstoy submissions of the NUW - it's not very useful for the parties to put in temperate submissions in. They don't seem to draw a distinction in any way in that form.

PN138

MR BOURKE: No.

PN139

VICE PRESIDENT CATANZARITI: Conceivably somebody could just have a facility and do nothing else; no production.

PN140

MR BOURKE: Correct - and you may fairly look at that and go, "No, you're not agriculture."

PN141

VICE PRESIDENT CATANZARITI: Yes.

PN142

MR BOURKE: But in our submissions, whichever way you want to - excuse the expression - slice and dice the situation, we're sitting in horticulture. I know the storage award picks up produce but also contemplates merchandise such as TVs. But we are fundamentally horticulture and we shouldn't be sitting in storage. We'll take you to the storage award during closing but you'll see the storage award is a default award. The storage award provides that if there's a more preferable award you default to that. But under the current regime we default to storage award on the NUW's position because missing farm gate.

PN143

Can we step you through just briefly what we do have in our opening folder, which is exhibit 1? We've got the proposed timetable, which we will update. We've got some key chronological events. If you go to page 3 on tab 2, at the top you have the 25 June 2014 vote. Further down, 21 April, where we lost in front of the Full Bench. This is a reflection why we need retrospectivity: just go down to 10 February. We had litigation involving a claim on the basis that we were under - we were not paying under the storage award.

PN144

We said, "We're going to seek a declaration in the Federal Court that we're covered by the Horticulture Award," and that claim was withdrawn on 5 May. We've then got - we've attempted to summarise - it might be useful - various business operations as indicated by the evidence and accompanying submissions in respect of that and propose to take the Commission through that. We've set out in tag 8 our marked-up version of the amendment we want. We've provided the Commission with - at tabs 11 and 12 - full copies of the horticulture and storage award. At tab 13 we've set out on the left-hand side the relevant roles in terms of the activities at our facility and how they would fit in classifications under the various horticulture and storage award. What you'll see if you go to page 2 - that fundamental step of grading. There is nothing in the storage award.

PN145

So we say in terms of coverage, the classifications best fit the facility and are supportive of an amendment to the coverage clause. Unless there is any questions, if the Commission pleases, I propose to call Paula Colquhoun.

PN146

VICE PRESIDENT CATANZARITI: Yes - I note in the timetable we got there's going to be a series of opening statements.

PN147

MR BOURKE: Sorry - yes. I apologise for that - getting ahead of myself.

PN148

VICE PRESIDENT CATANZARITI: All right. Yes, we'll take an adjournment until 11.30.

SHORT ADJOURNMENT [11.11 AM]

RESUMED [11.36 AM]

PN149

VICE PRESIDENT CATANZARITI: Thank you, Mr Smith.

PN150

MR SMITH: Thank you, sir. If the Commission pleases, I'll be relatively brief in the opening submissions because I'd like to develop our main arguments in our closing submissions but similar to Mitolo, Ai Group is pursuing variations under section 156 and 160 in these proceedings and just for the clarity of the Full Bench, we did file a draft determination on 21 October and the three aspects of that draft determination that we're pressing in these proceedings are paragraphs 1, 3 and 5.

PN151

VICE PRESIDENT CATANZARITI: Just a second - - -

PN152

MR SMITH: Yes, tab 5 of Mitolo's opening submissions folder.

PN153

VICE PRESIDENT CATANZARITI: Yes, we've also got a separate folder with your submissions in it. You're pursuing 1, 3 and 5?

PN154

MR SMITH: 1, 3 and 5 - as the Commission will recall, we sent an email through on 31 May indicating that with the issue around broadacre field crops - - -

PN155

VICE PRESIDENT CATANZARITI: Yes, separately - - -

PN156

MR SMITH: - - we're continuing to have discussions. So that is items 2 and 4 in the draft determination: we've undertaken to report back by the end of August on those discussions. We understand that on the employer's side, the other employer parties, are similarly pursuing the variations.

PN157

VICE PRESIDENT CATANZARITI: Just - in the document, 5 does deal with broadacre. Have I got the wrong version of the draft?

PN158

MR SMITH: Item 5 deals with the broadacre issue but item 3 - sorry, item 2 is the other one that comes out. That at the moment in the award has a reference to the pastoral award; so the proposed amendment removes the reference to the pastoral award.

PN159

VICE PRESIDENT CATANZARITI: So for the purposes of the present application you are not proceeding with item 2?

PN160

MR SMITH: Yes.

PN161

VICE PRESIDENT CATANZARITI: And item 4?

PN162

MR SMITH: And item 5.

PN163

VICE PRESIDENT CATANZARITI: Item 5?

PN164

MR SMITH: Yes - so it's items 1 - - -

PN165

VICE PRESIDENT CATANZARITI: Three and 4?

PN166

MR SMITH: 1, 3 and 4 - sorry, I think I said 1, 3 and 5.

PN167

VICE PRESIDENT CATANZARITI: You did, yes - that confused me, yes.

PN168

MR SMITH: It's a typo. During these proceedings we will argue that the amendments that we are seeking are consistent with the coverage that was intended when the modern award was made. Now, in the stage 2 award modernisation decision, at paragraph 53, the Full Bench referred to the coverage of the Horticultural Award stopping at the farm gate. In the agricultural industry, including in the horticultural industry, the, "farm gate," is a widely-used term. It refers to the activities which are carried out by the producer up to the first point of sale from the producer to its customer.

PN169

We would submit that the Full Bench probably understood that conception of farm gate when it made the statement about the delineation of this award. We don't know for sure because they did not explain what they meant by, "the farm gate." But the concept of the farm gate in the agricultural industry has no reference or relevance to the location of work. It is a concept: it is not a physical thing. The concept of farm gate is directly connected to the concept of farm gate price. The farm gate price, again, is a commonly-used term not only in the agricultural industry but in economic literature for the purposes of analysis of horticultural and agricultural products.

PN170

Again, it is this concept that it relates to the activities which are carried out by the producer up to the first point in sale. Now, the debate in the award modernisation proceedings in which we were heavily involved needs to be seen in context. Now, Ai Group was the main employer party involved in the food manufacturing award proceedings, in the storage services award proceedings and in the context of the horticultural industry. There were two main employer parties: Ai Group and the NFF. So we were deeply involved in the development of all three of those awards and there was a significant issue that arose around the AMWU's claims about food processing and where that concept started and finished and this is the context that the reference to the farm gate by the Full Bench needs to be viewed in.

PN171

It was saying that the delineation between the Horticulture Award and the food processing award was the farm gate. So, for example, take Mitolo or Zerella, the two major potato producers: they would sell potatoes, of course, into supermarkets, but a lot of them also go to, say, Simplot, to turn them into chips and potato chips and other things that you use potatoes for. As soon as Mitolo sells its potatoes to Simplot, that's gone through the farm gate. Simplot then turn them into frozen products and other things and that was in our submission what the Full Bench was referring to when it was talking about the farm gate.

PN172

VICE PRESIDENT CATANZARITI: It's a lack of processing? So if, for example, the potatoes were canned on the site, to be sold as canned potatoes, then it would be processed and therefore wouldn't be the farm gate?

PN173

MR SMITH: Yes, we would submit that the farm gate is a notion about what the producer does. So Mitolo grows potatoes, it bags them, it grades them, et cetera; sends them off either to Simplot or one of the other food companies or to the supermarkets or other customers. When it goes to the customer, whatever the customer does with it - a lot of those companies put their products either before they go into their food-processing operations or after they've come out of that in cold storage and that has gone through the farm gate because those companies like Oxford Cold Storage and all the other big cold storage companies are storage facilities. They're not producing the products.

PN174

In our submission at paragraph 58 there is a critical diagram in there that we would like to come back to in our closing submissions and it's important for the purposes of the evidence; paragraph 58 in our written submissions from December.

PN175

VICE PRESIDENT CATANZARITI: Yes, I have that.

PN176

MR SMITH: What this paragraph shows is where the farm gate would be located in the context of relevant awards. So you've got the Horticulture Award, which applies to growing, washing, grading, packing of crops. When the producer sells the products that it produces to a supermarket chain like Coles or Woolworths it's gone through the farm gate. Obviously when it's sold in Woollies it's under the retail award. If it sells it to Simplot, Hines, et cetera, it's gone through the farm gate and then the food processing award applies. Then when it's turned into frozen chips, for example, and sold at Woollies, again the retail award applies.

PN177

If it goes to - typically what happens with those products is the major food manufacturers, and sometimes the retailers, will use those cold storage companies - the major ones - to store products and that would be the storage services award but none of that is done by the producer. We think this issue is being over-complicated, in our submission, that it's quite clear what the farm gate is and that farm gate sits exactly as we've suggested it sits in that diagram.

PN178

As we've pointed out, we believe that's entirely consistent with the decision of the Full Bench, properly understood, because the producing of horticultural crops involves a number of integrated and interconnected processes that often take place across numerous different locations to insure the efficient use of resources and to meet production and other needs. That includes the activities at the beginning of the process, such as sowing, planting, et cetera; in the middle of the process, such as harvesting and picking; and finally at the end of the process, washing, packing, storing, grading, sending it off to the customer.

PN179

It's all part of the integrated process of the horticultural production chain and it would be extremely disruptive and it should be seen as nonsensical to separate that out when it is one process from start to finish. The processes that we're going to be focussing on with the evidence and our submissions are those that occur within the farm gate as we argue this notion should be properly understood. Now, the classifications in the Horticulture Award lend weight to this because they cover all of the various activities within that process, including storing, grading, cleaning, bagging, et cetera.

PN180

They're completely suitable for the horticultural industry and the activities carried out. Look at the storage services award classification structure: shows that it is not at all suitable to the integrated nature of the horticultural industry. Now, similar to the classifications, the other terms in the storage services award don't suit the industry. We've attached to the back of our submission from December an analysis of the provisions in the storage services award and the Horticulture Award to highlight the differences and we'll go into that in more detail in our closing submissions.

PN181

Now, the fact is that very, very few horticultural businesses use the storage services award. Now, the NUW may be able to find one or two that have responded to claims that it has made to use that award but right throughout the horticulture industry the Horticulture Award is being used for all of these integrated activities. It would impose crippling costs on the industry if the storage services award was applied. We'll be calling three witnesses in the proceedings: Mr Robbie Davis, Mr Bryan Robertson and Mr Mark Cody.

PN182

All of them have a great deal of experience in the horticulture industry and their evidence will demonstrate firstly the critical linkages between all of these activities, right from the start to the end of the process; secondly, the strict fitness-for-purpose specifications that governments and major retailers apply to vegetables producers, which require these linkages to be maintained and enable quality to be assured at each stage of the process; thirdly, the need for sorting, packing, grading and dispatch activities to often be carried out on a separate piece of land to where the crops are grown, as my friend representing Mitolo has pointed out.

PN183

Fourthly, they will hopefully convince you that the concept of the farm gate is a very well-known concept in the horticulture industry and it is not related to the physical location of where products are grown or other activities are carried out. A few other things they will highlight: they will give evidence that the Horticulture Award, in their experience, is very widely applied throughout the industry and not the storage services award and the cost pressures and so on that the industry has to endure.

PN184

Now, for the past few years the NUW has embarked upon a concerted campaign to try to force the bigger horticultural businesses to use the storage services award. So far, that campaign has been very unsuccessful. But it's vital that the amendments that we're seeking in these proceedings be made and we submit that it's vital that the amendments be made retrospectively to 1 January 2010 because all this time, the vast, vast majority of horticulture businesses have been using the Horticulture Award, not the storage services award, and there may be cost risks for a number of businesses - certainly some businesses - if there isn't a retrospective operative date. So we would leave our opening submissions there and develop those arguments further in our closing submissions.

PN185

VICE PRESIDENT CATANZARITI: What I might do is mark the draft determination as exhibit AIG1 and the opening submissions and the written ones, excluding the witness statements, as exhibit AIG2.

EXHIBIT #AIG1 AI GROUP DRAFT DETERMINATION

EXHIBIT #AIG2 AI GROUP OPENING SUBMISSIONS

PN186

MR SMITH: Thank you.

PN187

VICE PRESIDENT CATANZARITI: Thank you. Mr Rogers.

PN188

MR ROGERS: Thank you, Commission. I don't think that I'll need to be as comprehensive as Mr Smith and Mr Bourke. I just need to make the point relatively briefly that as the peak industry body representing farmers nationwide, we've made this application for a variation to the Horticulture Industry Award to insure that it applies irrespective of the specific site or the operations or land use on which those operations occur. The Horticulture Award provides flexibility in recognition of the unique pressures which the horticultural industry faces. Mr Bourke has listed some of those pressures but those includes optimal harvesting times, risk of spoilage, weather and workforce availability.

PN189

We say that flexibility needs to extend to offsite washing, sorting, grading, treating and packaging of horticultural goods. We say that the offsite facilities are not established - don't change the essential nature of that work or bring it outside of the operation of the award. Those offsite facilities are established for purely commercial and practical reasons, to make the best use of the available land so that viable farming land isn't used for these packing activities when it could be used for growing crops.

PN190

For logistical and transport arrangements, because of economies of scale, to best comply with regulatory requirements and for workforce convenience, just to name a few - so we say that it's viable that the horticultural industry award applies to these facilities for commercial reasons and for the reason that Mr Bourke and Mr Smith have indicated. We would also say that the pre-modern - and I think the evidence will show that the pre-modernisation horticultural awards weren't limited to these sorts of onsite packing, grading, treating, washing activities. There was no intention within the modernisation process for that to change. Indeed, the modernisation process was - will aspire to create industry awards and we say that's what happened to the Horticulture Award. It wasn't an occupational award, it was an industry award.

PN191

So that is my opening statement in brief. In support of that we have filed and served five witness statements. I'm informed that two of those witnesses aren't required for cross-examination: Mr Keith Rice, Mr Gavin Scurr and Brett Guthrie.

PN192

VICE PRESIDENT CATANZARITI: Let's just get that into evidence now so that they're doing because they're not going to be in cross-examination. Mr Rice was the first one?

PN193

MR ROGERS: Mr Keith Rice.

PN194

VICE PRESIDENT CATANZARITI: Yes, so that will be exhibit NFF1.

EXHIBIT #NFF1 WITNESS STATEMENT OF KEITH RICE

PN195

MR ROGERS: Mr Gavin Scurr.

PN196

VICE PRESIDENT CATANZARITI: Gavin Scurr - NFF2.

EXHIBIT #NFF2 WITNESS STATEMENT OF GAVIN SCURR

PN197

MR ROGERS: Mr Brett Guthrie.

PN198

VICE PRESIDENT CATANZARITI: NFF3.

EXHIBIT #NFF3 WITNESS STATEMENT OF BRETT GUTHRIE

PN199

MR ROGERS: Yes, so there are two other witness statements which we have served: Mr Derek Lightfoot and Mr Phillip Turnbull. They are required for cross-examination.

PN200

VICE PRESIDENT CATANZARITI: Yes, I see that.

PN201

MR ROGERS: I think I need to draw the Commission's attention to the fact that came to my attention yesterday afternoon: Mr Lightfoot has informed me that there's a passage - paragraph 10 of his statement is erroneous.

PN202

VICE PRESIDENT CATANZARITI: Mr Lightfoot is going to be called for cross-examination - we can deal with it then.

PN203

MR ROGERS: We'll deal with that then - he was quite keen that I should bring this to the Commission's attention so he's not seen to be - - -

PN204

VICE PRESIDENT CATANZARITI: Yes, well, we'll note there's an error but we can fix it.

PN205

MR ROGERS: Great - so with respect, unless there are any questions, they're my opening statements.

PN206

VICE PRESIDENT CATANZARITI: That's fine. What that does of course is it truncates the timetable even further, with those witnesses dropping out. We have had a discussion, Mr Bourke, over the morning tea adjournment. We do think we will have a view and we will come back to the bit later today about when to fit that in. It will be within the hearing dates.

PN207

MR BOURKE: Thank you, your Honour.

PN208

VICE PRESIDENT CATANZARITI: Yes.

PN209

MR BAKRI: If I could indicate I wish to be heard on the idea of a view.

PN210

VICE PRESIDENT CATANZARITI: Yes, we'll hear you now, then.

PN211

MR BAKRI: Thank you.

PN212

VICE PRESIDENT CATANZARITI: You'll need to be rather convincing.

PN213

MR BAKRI: We have - - -

PN214

VICE PRESIDENT CATANZARITI: Are you going to oppose a view?

PN215

MR BAKRI: No, we are at one with Mitolo, in that we think there is some utility in a view.

PN216

VICE PRESIDENT CATANZARITI: Yes.

PN217

MR BAKRI: We think that it will put the Commission in the best possible position to assess the evidence. Without having a view it's quite artificial. We agree with that. However, what we say is that if a view is to occur in the circumstances of this case, which is an award review which would not just apply to Mitolo but would apply to various other workplaces, it's appropriate for the Full Bench to also consider the various features of other packing and processing facilities. Now, I don't stand here and say that we should do a survey of a large number of sites but I am instructed to propose that there is at least at this point one site which conveniently is located just out of Adelaide which should be included in the view. That is the SA Potato Co site, which is referred to in the witness statement of George Robertson, one of the NUW's witnesses.

PN218

VICE PRESIDENT CATANZARITI: That is under the storage award, is it?

PN219

MR BAKRI: It is under the storage award and it is quite different in many respects to the Mitolo property.

PN220

VICE PRESIDENT CATANZARITI: Is the SA Potato site a site where SA Potato, where ever it is, actually grows its own product?

PN221

MR BAKRI: I'm instructed that that is the case.

PN222

VICE PRESIDENT CATANZARITI: Then, what - it transports the product to a particular central facility? Is that - - -

PN223

MR BAKRI: That's right - that is right.

PN224

VICE PRESIDENT CATANZARITI: Mr Bourke, you might take instructions on that.

PN225

MR BOURKE: Yes, thank you.

PN226

VICE PRESIDENT CATANZARITI: It does seem at first blush that it would be worthwhile seeing it at the same time.

PN227

MR BOURKE: I think we can say we have no issue with that, if the Commission pleases.

PN228

MR BAKRI: If I could also - - -

PN229

VICE PRESIDENT CATANZARITI: The Full Bench would also like to see Zerella, if that were able to be accommodated on the same view.

PN230

MR BOURKE: Yes, we will make inquiries, if your Honour pleases.

PN231

MR BAKRI: If I could flag one other issue: I've been able to get instructions about SA Potatoes. There is another organiser who my instructor has sought to speak to that has been unable to because he's been in meetings. There may be one other site that we propose. I'll come back to that this afternoon, if that is acceptable.

PN232

VICE PRESIDENT CATANZARITI: Well, let's hope they're all in South Australia.

PN233

MR BAKRI: Yes, indeed.

PN234

VICE PRESIDENT CATANZARITI: Because we don't want to turn this into a long drawn out - - -

PN235

MR BAKRI: Indeed, we don't want to do a road trip.

PN236

VICE PRESIDENT CATANZARITI: That's right.

PN237

MR BAKRI: Thank you, Vice President.

PN238

VICE PRESIDENT CATANZARITI: Yes, all right. We'll then have Ms MacDougall.

PN239

MS MACDOUGALL: Thank you. If the Commission pleases, my opening statement - given the factual circumstances, there is, in fact, a lot of similarity between the opening statements that have been made by Mitolo Group and also Ai Group so much of this will be familiar to the Bench already.

PN240

Before I commence, I would like to please hand up to the Bench a replacement copy of our outline of submissions, if I may. There aren't, rather, any substantive changes to those submissions. Primarily some formatting issues associated with an extract that's been derived from the annual leave decision that was incorrectly replicated so for the sake of accuracy, I do wish to fix that.

PN241

The Bench would be aware that as part of these proceedings, Gayndah Packers - - -

PN242

VICE PRESIDENT CATANZARITI: You're not, in this part of the proceedings, now calling witnesses, is that - - -

PN243

MS MACDOUGALL: I beg your pardon?

PN244

VICE PRESIDENT CATANZARITI: In the original statements you filed, there were witness statements but they're not ‑ - -

PN245

MS MACDOUGALL: I beg your pardon, I'll deal with that, yes.

PN246

VICE PRESIDENT CATANZARITI: Are they going to be called? Because they're not on the list, on the first round, are they?

PN247

MS MACDOUGALL: Yes, Ms Tonsing is on the list for 3 o'clock today.

PN248

VICE PRESIDENT CATANZARITI: She will be called today?

PN249

MS MACDOUGALL: Yes, that's correct.

PN250

VICE PRESIDENT CATANZARITI: That's right.

PN251

DEPUTY PRESIDENT SAMS: We can replace your submission, can we, with the one you've just handed up?

PN252

MS MACDOUGALL: Yes, please.

PN253

VICE PRESIDENT CATANZARITI: We'll make that then exhibit GP1.

EXHIBIT #GP1 OUTLINE OF SUBMISSIONS OF GAYNDAH PACKERS

PN254

MS MACDOUGALL: We've also filed a witness statement for Ms Tonsing. Would it be convenient to deal with - - -

PN255

VICE PRESIDENT CATANZARITI: We'll deal with that when she's in the witness box.

PN256

MS MACDOUGALL: In the witness box. The Full Bench would be aware that as part of the proceedings, Gayndah has proposed that the coverage clause of the Horticultural Award also be amended and the proposal is in common with the variations that have been sought by Ai Group and Mitolo Group and also the National Farmers Federation. We filed a draft determination on 21 October 2016, which I trust that the Bench has at hand.

PN257

Having regard to the matters sitting around the broadacre discussions, it would seem prudent, following suit of my learned friend from Ai Group, that the item concerning the amendment to broad acre not be pressed as part of that determination.

PN258

VICE PRESIDENT CATANZARITI: Yes, well it may be worthwhile, before tomorrow, if the employers could have a discussion about whether it's one document that is the determination if there is an agreement amongst you.

PN259

MS MACDOUGALL: Certainly, we were supportive of that version.

PN260

VICE PRESIDENT CATANZARITI: If there's two versions, fine, but we'll just make it clearer so we know what we're looking at it.

PN261

MS MACDOUGALL: Indeed. In summary, we rely on the materials that were provided and filed in respect of those submissions and the witness statement of Len Tonsing. I don't wish to traverse all of the detail in the outline of submissions but what I would like to do is amplify some of the main points and address any questions that may fall from the Bench.

PN262

What I'd like to do firstly though is to say who we are. Gayndah Packers is a company that – or the evidence will show that Gayndah Packers is a company that's situated in Queensland, in North Queensland, 360 kilometres north west of Brisbane, and Gayndah is in the citrus industry so we've got the good fortune of covering potatoes and also citrus industry.

PN263

It packs lemons and limes all year round and mandarins, being Imperials and Murcott seasonally, so it experiences the same highs and lows from a seasonal peak flow of fruit. The fruit that's graded and packed at Gayndah's shed comes from orchards that are owned by the owners of Gayndah Packers. The shed is not on an orchard per se but there's a direct link in relation to the citrus industry by virtue of the fact that our owners run their own orchards.

PN264

These owners are also three former members of a co‑operative. Historically Gayndah Packers was a co‑operative, a citrus growers co-operative, for some 40 odd years, and the evidence will show that in 2014 three of the members purchased the co-operative and by reason of a different structural, corporate structural, arrangement, imposed a corporate entity that is separate from the actual entities which provide their fruit to the packing shed.

PN265

The evidence will also show that there's a small proportion of contract packing that takes place and when I use the term contract packing, they are outside growers who provide their fruit to the packing shed, some of which is under the Gaypak brand and some orchards effectively pack their own fruit. But the large proportion, 80 percent, is derived from the orchards owned by the owners of Gayndah.

PN266

Put simply, as part of the review process, Gayndah Packers want a modern award system that delivers fair and relevant minimum safety net. We submit that this can be achieved by varying the coverage clause of the award that's been proposed which would have the effect of confirming that the employees in their packing shed, who are working in connection with the horticultural enterprise, are covered by the Horticultural Award. This would remove any uncertainty in relation to that.

PN267

We submit that there are sound and balanced reasons for varying the award. Firstly, clause four of the award currently provides that employers are covered when they're in the horticultural industry as well as employees whose employers are in the horticultural industry and we contend that the definition of horticultural industry is capable of not being restricted to the location but as a consequence of the Mitolo decision, we now have a degree of uncertainty.

PN268

I think the historical context is relevant and my learned friend from Mitolo touched on the Queensland award which applied prior to the award modernisation process, and that award is the Fruit and Vegetable Growing Industry Award, and that was a feeder award into the current modern award. Relevantly, its coverage terms didn't limit the scope of the award to locations. It was really quite clear that the horticultural activities, which traverse picking, handling, treating, and really importantly, grading, and packing and dispatching, that it was all fruit on and from fruit and vegetable farms, vineyards, orchards and plantations throughout Queensland.

PN269

That clause unambiguously covered sheds operating as Gayndah's shed does. Again, the Mitolo decision has resulted in this level of uncertainty because of these notions around the farm gate and whilst I accept that our written submissions don't traverse this concept of farm gate, the reality is that by adopting a physical arrangement, it will limit the coverage – or by limiting the coverage to this physical farm gate, it means that for Gayndah, where there are other like businesses in the immediate area who have packing sheds on their land, it will be an absolute disconnect between the pay and conditions that are then paid to Gayndah employees vis‑à‑vis the employees of those that work in packing sheds elsewhere, and this is all despite the fact that we have a direct connection to the citrus industry through the owners who operate these orchards.

PN270

It also begs the question as to whether or not Gayndah ought plant some trees in order to remove that certainty in the absence of a variation being approved. The fundamental nature of Gayndah's business is not storage and warehouse and warehousing. It really is in the citrus industry. The produce is perishable. There are short timeframes within which fruit is provided for processing and grading, again a key component in relation to the value of profit that would ultimately be made.

PN271

The notions around storage and warehousing that are usually or traditionally understood under the Storage Services Award don't apply here and the Storage Services Award talks about goods and merchandise but here, it is all about produce and perishable produce, so produce that is influenced by weather, supplier volume and demand and those matters, Ms Tonsing does give evidence in respect to - in her statement.

PN272

Given the seasonal peaks in the industry, it's imperative that the working environment is dynamic and the Horticultural Award delivers that. There's capacity to roster staff without the constraints that would otherwise exist under the Storage Services Award and this is unique to the industry and whether or not it's citrus or it's potato or it's another type of produce, it's right across the horticultural industry and it requires this level of flexibility.

PN273

We also submit that the classifications don't properly translate and whilst Ms Tonsing has given evidence in her attempts to properly translate those classifications, there is a real disconnect in relation to the grading classification and, again, there's a real emphasis around the importance of that because of how it feeds into the quality of the end product that then is then unsold. From Gayndah's perspective, any application of the Storage Services Award is going to have a significant financial and operational impact.

PN274

Coming back to my comments about the need for flexibility in having a dynamic work arrangement whereby you can respond to the peaks in the season. From an operational perspective, that's really important. From a cost perspective, Ms Tonsing has given evidence in relation to what that looks like because clearly the storage services pay rates are higher. There's an analysis and some evidence there in relation to their experience and what they perceive and what they've assessed that cost impact would look like.

PN275

VICE PRESIDENT CATANZARITI: Your client does not have a history of agreements or any desire to have an agreement? It relies exclusively on the award does it?

PN276

MS MACDOUGALL: It does rely on the award, that's correct. That's correct. It really then is critical that the uncertainty in relation to the award is removed and so ‑ ‑ ‑

PN277

VICE PRESIDENT CATANZARITI: Has any organisation or employee challenged that proposition?

PN278

MS MACDOUGALL: Not at all, no. My instructions are is that that's not the case. In terms of – sorry, just to clarify, in terms of - - -

PN279

VICE PRESIDENT CATANZARITI: The coverage, the award coverage.

PN280

MS MACDOUGALL: The coverage, yes. No employees - and the unions have not challenged that.

PN281

VICE PRESIDENT CATANZARITI: Does that sit with the competitors of the company? That is, are they similarly on the award or do they have a - - -

PN282

MS MACDOUGALL: Yes, they all apply, the horticultural. All of the packing sheds within the Gayndah area all apply the Horticultural Award. That's anecdotal but they're my instructions.

PN283

VICE PRESIDENT CATANZARITI: I'll take your word for it.

PN284

MS MACDOUGALL: We submit that if the variation isn't granted, then when looking at the provisions of the requirements under section 134, it's really important from the impact of the business around productivity and employment costs of relieving the regulatory burden, or not relieving rather but the regulatory burden, that if the variation isn't made, then those employments costs are going to make Gayndah uncompetitive.

PN285

Ms Tonsing gives evidence in relation to the inability to be able to pass on those higher rates because ultimately if they were to pass on those higher rates, then they will potentially lose a proportion of the contract packing and it will become uncompetitive and it's a very competitive space. With respect to section 134(g), having regard to ensure a simple and easy understandable modern award system, it's only appropriate that the businesses covered by these awards are able to interpret them properly and apply them properly.

PN286

There ought not to be any uncertainty in relation to that. Again, Ms Tonsing has done her own assessment in relation to the classifications and finds that there are inconsistencies in relation to those. We'll also lead evidence in relation to the ongoing sustainability of the business as well. Again, coming back to the cost impact and the fact that there's not significant margin in relation to the income that's derived from the fruit.

PN287

VICE PRESIDENT CATANZARITI: Do you say that Gayndah Packers fits comfortably within the diagram that Mr Smith drew our attention to?

PN288

MS MACDOUGALL: May I - - -

PN289

VICE PRESIDENT CATANZARITI: It's paragraph 58 of the AIG exhibit.

PN290

MS MACDOUGALL: It would be our submission that Gayndah Packers would fit within the far left section, within the Horticultural Award in regard to the undertakings. It has a direct connection to the industry notwithstanding – here we have an issue around an associated entity, hence the determination, so that we can remove any suggestion that they're not within the industry.

PN291

Again, we've got fruit from orchards that are owned by the three owners of Gayndah being fed into the packing shed. It would be unfair for Gayndah Packers to have the Storage Services Award apply when there is such , we say, a direct connection whilst, of course, there aren't – the shed is not on an orchard. The nexus is sufficient in relation to how closely tied they are.

PN292

With respect to the evidence that Ms Tonsing will lead, she will give evidence in relation to - - -

PN293

VICE PRESIDENT CATANZARITI: Well you probably don't need to in your opening go into what – she's going to be on this afternoon.

PN294

MS MACDOUGALL: Yes.

PN295

VICE PRESIDENT CATANZARITI: Let's just try to shorten the opening a little so you can move into the evidence.

PN296

MS MACDOUGALL: Indeed. If there are no questions from the Bench, they are my opening statements.

PN297

VICE PRESIDENT CATANZARITI: Thank you. Mr Bourke, we'll move to your first witness.

PN298

MR BOURKE: Thank you. The Commission pleases, I call Paula Colquhoun and she will take the oath.

<PAULA COLQUHOUN, SWORN [12.19 PM]

EXAMINATION-IN-CHIEF BY MR BOURKE [12.20 PM]

PN299

MR BOURKE: Commission pleases. Ms Colquhoun, would you please tell the Commission - face the Commission and state your full name?‑‑‑Paula Colquhoun.

PN300

Your professional address?‑‑‑1304 Angle Vale Road, Virginia, South Australia.

PN301

Your occupation?‑‑‑Group human resource manager.

PN302

Have you made three statements in relation to this matter?‑‑‑Yes, I have.

PN303

Yes. If the Commission pleases, the first statement is part of exhibit 2 volume one behind tab 5 with some attachments running from tab 6 to tab 25 and we have a folder of – a copy of Ms Colquhoun's statements for her to use in the witness box. The Commission pleases. Ms Colquhoun, do you have a copy at tab 5 of that folder you have of your first statement dated 23 December 2016 together with annexures behind tab 6 to 25?‑‑‑Yes.

PN304

Have you recently re-read that statement?‑‑‑Yes.

PN305

Are the contents true and correct?‑‑‑Yes.

*** PAULA COLQUHOUN XN MR BOURKE

PN306

I tender that statement, the Commission pleases.

PN307

VICE PRESIDENT CATANZARITI: Is that exhibit 4? Josh? Exhibit 4, thank you.

EXHIBIT #4 WITNESS STATEMENT OF PAULA COLQUHOUN DATED 23/12/2016

PN308

MR BOURKE: The Commission could then go to our opening folder, the white folder, which is exhibit 1, and go to tab 10.

PN309

VICE PRESIDENT CATANZARITI: Wasn't there one in tab 9 as well, Mr Bourke?

PN310

MR BOURKE: Yes, I'll be taking that – that's the reply statement.

PN311

VICE PRESIDENT CATANZARITI: You'll do, I gather, 15 June first?

PN312

MR BOURKE: Ms Colquhoun, do you have in front of you the supplementary statement you've made dated 15 June 2017? It's at the back of your folder?‑‑‑Yes.

PN313

Have you recently re-read that statement?‑‑‑Yes.

PN314

Are the contents true and correct?‑‑‑Yes.

PN315

VICE PRESIDENT CATANZARITI: We don't seem to have that in the folder. We've got the witness statement at number nine and in 10 we've got the photographs. We're supposed to have it in 10 as a supplementary statement, it's not in our folder then.

PN316

MR BOURKE: Yes, sorry.

PN317

VICE PRESIDENT CATANZARITI: It's not in the white folder you gave us this morning.

PN318

MR BOURKE: Yes, I understand. Could we provide just one copy and we'll organise for two copies? Apologise for that.

*** PAULA COLQUHOUN XN MR BOURKE

PN319

DEPUTY PRESIDENT SAMS: Is that the one of 59 pages?

PN320

MR BOURKE: That's correct, your Honour. Ms Colquhoun, do you have a statement running for nine pages dated 15 June 2017 entitled Supplementary Witness Statement together with an attachment running to page 59?‑‑‑Yes.

PN321

Have you recently re-read that statement?‑‑‑Yes.

PN322

Are the contents true and correct?‑‑‑Yes, they are.

PN323

I tender that statement. I will organise, Commission pleases - - -

PN324

VICE PRESIDENT CATANZARITI: No, we have it but it was filed previously, not in your folder, that's the only difference. It's exhibit 5.

EXHIBIT #5 SUPPLEMENTARY WITNESS STATEMENT OF PAULA COLQUHOUN DATED 15/06/2017

PN325

VICE PRESIDENT CATANZARITI: If you wish to make a correction to the white folder, perhaps you should do so in any event because the index is wrong on the white folder.

PN326

MR BOURKE: Yes, thank you. Could you go please to tab 9. Do you have there a witness statement you made in reply dated 17 May 2017?‑‑‑Tab 9?

PN327

It may not be tab 9 in your folder?‑‑‑Sorry, the witness statement in reply?

PN328

Yes, statement in reply?‑‑‑Yes. Yes, I do.

PN329

Have you recently re-read that statement?‑‑‑Yes.

PN330

Are the contents true and correct?‑‑‑Yes.

PN331

I tender that statement, the Commission pleases?

*** PAULA COLQUHOUN XN MR BOURKE

PN332

VICE PRESIDENT CATANZARITI: Exhibit 6.

EXHIBIT #6 WITNESS STATEMENT IN REPLY OF PAULA COLQUHOUN DATED 17/05/2017

PN333

MR BOURKE: Just remain there, please.

PN334

VICE PRESIDENT CATANZARITI: Thank you, Mr Crawford.

CROSS-EXAMINATION BY MR BAKRI [12.25 PM]

PN335

MR BAKRI: Ms Colquhoun, I understand that the entities which form the Mitolo Group of companies each undertake particular activities for the business. That's right, yes?‑‑‑Predominantly, yes.

PN336

I understand that the Maranello trading entity undertakes the group's potato growing operations in South Australia, so land preparation, growing and harvesting, is that correct?‑‑‑Yes, as well as some other functions as well.

PN337

The Mitolo entity operates the Angle Vale Road facility and undertakes the packing and processing work for the group, is that right?‑‑‑Correct, yes.

PN338

Some seed propagation?‑‑‑Yes.

PN339

You've given evidence that a few of the employees at the Angle Vale site who generally undertake packing and processing work undertake land preparation, growing and harvesting work at the growing sites in the area and I think the numbers you gave were 16 employees in the last 12 months. You agree with me that these employees did this work as a secondary job?‑‑‑It could have been a 50/50 split.

PN340

But it was a for a limited period of time?‑‑‑It was during a harvest period, yes.

PN341

Yes, and it was infrequently. It was a for distinct period of time, just the harvest period?‑‑‑That's correct, as well as there were actually other longer term workers performing some secondary work as well.

PN342

When these employees from the Angle Vale Road, so I just want you to think about these employees for a second, when these employees undertake the land preparation, growing or harvesting work during the harvest time, do they do this as employees of Maranello Trading?‑‑‑No. As Mitolo Group.

*** PAULA COLQUHOUN XXN MR BAKRI

PN343

You agree with me that the Mitolo Group, I should say, made a choice to divide the tasks undertaken between the Mitolo entity and the Maranello Trading entity?‑‑‑I'm sorry, can you repeat that, please.

PN344

Do you agree that at some point in time, the Mitolo Group of companies has made a choice to divide the tasks that are undertaken between the various entities?‑‑‑We do have two agreements and the reason for those two agreements we have was because back in 2009 there was actually two separate awards that covered both those functions separately.

PN345

That's not quite what I asked you. We'll come back to that?‑‑‑Okay, sorry.

PN346

The group of companies has the view, doesn't it, that there are some benefits in dividing the land preparation, growing and harvesting work on the one hand and the work performed at the Angle Vale Road site on the other hand. You'd agree with that?‑‑‑No.

PN347

You don't agree that the land preparation, growing or harvesting work is done by one entity and the packing and processing work is done by another?‑‑‑I agree that they are done, yes. They're done - - -

PN348

Thus you would agree that it's been divided within the group in that way?‑‑‑Yes.

PN349

The group decided to divide the work in that way because there are some benefits that arise to the group from dividing the work in that way, yes?‑‑‑I believe it's more of a risk factor and a financial decision to divide the company by different entities. I'm sorry, I'm not understanding.

PN350

Yes, but you agree that there are benefits that arise from the division of the work in such a way?‑‑‑No, I don't agree.

PN351

You'd agree that the group has the view that there are some benefits in having some employees perform the land preparation, growing and harvesting work and other employees at the Angle Vale Road site performing the other work, yes? There are some benefits in having the work divided in that way?‑‑‑I would need to think through what those benefits would be. To divide the work. I mean it's still the same functions, whether it's within the – to prepare, I guess, the full farming, from seeding all the way through, so I' not sure we're thinking about dividing product or functions, I'm sorry.

*** PAULA COLQUHOUN XXN MR BAKRI

PN352

I'll tease that out a bit with you. You would agree with me that the tasks performed by the employees engaged at the Angle Vale Road workplace is different to the land preparation, growing and harvesting work?‑‑‑Yes.

PN353

You accept that there are certain skills that an employee needs to have to be able to undertake the packing and processing work?‑‑‑Yes but there are still a crossover of skills between the two.

PN354

But you'd agree that the harvesting work is very different to the packing and processing work, yes?‑‑‑Yes, they do differ.

PN355

You'd characterise that difference as very different?‑‑‑They are different by nature but it's still dealing with the same product, yes.

PN356

In your second statement, which is titled the reply statement, you've given evidence that some employees who perform grading duties in a centralised facility are rostered to the seed shed from time to time. Ms Rowt will give evidence that the company usually hires backpackers to do this work and that employees from the packing shed are only sent to the seed shed if there are no backpackers and that if a worker is sent over to the seed shed it would be for a maximum of five to six weeks per year. Do you agree with that evidence?‑‑‑Not necessarily, no.

PN357

Do you agree that the company usually hires backpackers to do the work?‑‑‑We do have backpackers that work at that facility. However, they are rostered to fill gaps and within the business. We also roster our permanent workers to fill gaps in different areas of the business as well, so we'll use both of different types of our labour the seed shed as well.

PN358

Would you agree with Ms Rowt that the employees from the packing shed are only sent across to the seed shed, that's, I believe, shed C, if there are no backpackers available?‑‑‑No, I don't.

PN359

Would you agree that if a worker is sent over to the seed shed from the packing shed, it would be for a maximum of five to six weeks per year?‑‑‑I have not done that analysis, I'm sorry. We fill gaps to rosters to – yes, I guess to get the work done is something I haven't really done an analysis on.

PN360

But you can't say that it's for any more than five or six weeks? You don't know?‑‑‑Our seed shed actually does run for 12 months of the year, so it would – depending on staff availability and fluctuations.

*** PAULA COLQUHOUN XXN MR BAKRI

PN361

You give evidence that some of Mitolo Group's produce comes from external growers. You'd agree with me that when this work is undertaken at the Angle Vale Road site, so when the produce is bought from external growers, the only work done by Mitolo Group employees in relation to this produce is the packing and processing work. Do you agree with that?‑‑‑No.

PN362

What have I missed?‑‑‑You've missed washing, which is a predominant – and removal of waste. For any local grower that we actually buy produce in, we basically are receiving in raw product so, we're needing to tip it, remove all the waste, ship away the waste, determine what's in that product, whether how much premium, how many smalls and all of the above, and they need to be sorted and sent off to the appropriate grading lines for packing.

PN363

Right, so you're disagreeing with my use of the term packing and processing?‑‑‑Yes.

PN364

Just to clarify, I'm using that as shorthand to describe the duties - - -?‑‑‑Okay.

PN365

VICE PRESIDENT CATANZARITI: Well, you might step outside for a moment, thank you. I think this is an important point. Shut the door, please, on the way out.

<THE WITNESS WITHDREW [12.35 PM]

PN366

VICE PRESIDENT CATANZARITI: Mr Crawford, and this is for the benefit of the parties generally, this is actually, under the modern award review and different rules apply under modern award reviews, if you're going to challenge the credit of a witness (indistinct) is one thing, and that - - -

PN367

MS MACDOUGALL: Excuse me, Vice President, sorry to interrupt, my witness, Ms Tonsing, is sitting in the back of the courtroom.

PN368

VICE PRESIDENT CATANZARITI: Any witnesses should be excused, should leave the room.

PN369

MS MACDOUGALL: I apologise, your Honour.

PN370

VICE PRESIDENT CATANZARITI: Mr Bakri. Sorry, yes, Mr Bakri. I said Crawford.

*** PAULA COLQUHOUN XXN MR BAKRI

PN371

MR BAKRI: That's okay, that's okay.

PN372

VICE PRESIDENT CATANZARITI: Yes, I said Mr Crawford. Sorry about – look, as I was just saying, this is an award review and having been involved in a number of award reviews, there are different ways in which these matters proceed from the traditional credit case, right, if you're going to challenge the question of credit. If you're going to do that, then it needs to be made very clear, right, and what turns on it, turns on it, but more importantly, you can't do these matters in a shorthand way which you're about to do, right. You can't say packing means one thing when we're talking about grading and washing and other things, right.

PN373

MR BOURKE: Yes.

PN374

VICE PRESIDENT CATANZARITI: It's just not going to help the Bench. The Bench, in an award review, is here to be educated, right. That's what happens in award reviews and therefore, as I've – for example, the penalty rates which I sat on, we take in all the evidence, right, and it's really important that the parties focus on that as allowing the evidence to flow properly, right.

PN375

If you are going to make some point that a related company is not – because they're related companies and one minute the company's doing something or other, if that's sort of the submission, then where that takes us who knows. I mean, that may not help us in what is the actual work being done by any part of that company, right. I did allow it to flow for a bit but it's not going to be much help unless you're actually going to run some credit point.

PN376

MR BOURKE: Vice President, I can indicate that it's not my intention to run a credit point and in my submission, there is some relevance to the cross-examination that I have conducted but it's not in the manner that's been understood. In using the term packing and processing, I'm trying to avoid having to use the very long acronym that's been adopted in the Mitolo submission. It's been used as a ‑ ‑ ‑

PN377

VICE PRESIDENT CATANZARITI: But I think you have to do that in this sense, that Mr Smith, in his opening submissions, draws a distinction where there is processing and processing is not the same as, one view, as packing and washing and grading, so for us to be educated, we need to know where you say, as NUW, where the line is on the farm gate if you're disagreeing ultimately with Mr Smith's view of what the farm gate is.

PN378

MR BOURKE: Yes. Perhaps the way forward is for me to clarify with this witness that when I've said packing and processing I'm referring to the duties performed in the Angle Vale Road site. That is my intention there. It's not - because the acronym's - - -

PN379

VICE PRESIDENT CATANZARITI: Well, it's a matter for you but at the end of the day, we're going to have a view of the site and one thing that appears to occur on the site is washing and grading, right.

PN380

MR BOURKE: Yes.

PN381

VICE PRESIDENT CATANZARITI: We're not asking about it, it does not help us.

PN382

MR BOURKE: Yes. Yes, I'll take that on notice.

PN383

VICE PRESIDENT CATANZARITI: Just saying packing and processing, which is not a reflection of what actually happens, won't assist. I mean, as I say, in an award review, we're there to sort of learn as much about what actually happens when we're being asked here specifically to say that the modern award review objectives have not been met by the way this current award is structured. We really need to get as much information out of the witnesses as possible.

PN384

MR BOURKE: Thank you, Vice President.

PN385

VICE PRESIDENT CATANZARITI: All right. You may bring the witness back, thanks.

<PAULA COLQUHOUN, RECALLED [12.39 PM]

CROSS-EXAMINATION BY MR BAKRI, CONTINUING [12.39 PM]

PN386

VICE PRESIDENT CATANZARITI: Thank you, Ms Colquhoun, you're resumed on your former oath. Sorry, just before you start, the witnesses have come back in the room have they? Well the witnesses should not be in the room.

PN387

MS MACDOUGALL: Yes, thank you, Vice President.

PN388

VICE PRESIDENT CATANZARITI: And part, because we don't know who's in the room, the parties might, amongst themselves, actually remind them, the normal rules do apply in relation to witnesses.

PN389

MS MACDOUGALL: I apologise.

*** PAULA COLQUHOUN XXN MR BAKRI

PN390

MR BAKRI: Thank you, Vice President. Ms Colquhoun, you've given evidence that some of Mitolo Group's produce comes from external growers. When work is undertaken in relation to this external produce at the Angle Vale Road site, that that is all the work that occurs in relation to external produce?‑‑‑At the Angle Vale site, yes, correct.

PN391

It's not the situation that employees of the group would go and harvest that produce? It would be delivered by the external producers. Am I right in understanding that?‑‑‑That's correct, yes.

PN392

Yes. I take it that the Mitolo Group at some point considered whether to have facilities similar to the Angle Vale Road facility at each of its growing sites instead of just a central facility. Is that something that was considered?‑‑‑Yes, it was. Can I extend on that? I can, please? Is that okay? It would obviously be a consideration for any fully integrated horticultural business such as ours. However, for us particularly, we are required to rotate our land every four years. Yes, we have 21 locations but each one of those locations can have up to 20 separate individual growing circles or growing pivots. Many of those sites don't have electricity, internet connection, so certainly consideration would be there but there's a lot of factors in relation to where we could place those facility.

PN393

VICE PRESIDENT CATANZARITI: Sorry, can I just follow that up. When you say you have to rotate a site, does that mean the land lays fallow because of the planting cycles?‑‑‑That's right, that's right.

PN394

Well, it would help us if you - - -?‑‑‑Sure, to give you a little bit extra? Sure, so the potatoes are grown on one of those large circles. Don't know when you've been in an aeroplane you'll see them, a big round circle from the aerial view, so we will – we'll plant only a crop once every four years. So it will take 128 days – sorry, about 120 days for that crop to grow, and it will be potatoes, and for the rest of that time, that land will sit flat, we won't use that for growing produce, and we can only use that one circle once every four years and that's due to land health, disease management. It must be to do with the product or potatoes particularly because the product is actually in the ground, the potato's in the ground. So you've got disease issues and things like that.

PN395

MR BAKRI: Ms Colquhoun, you would agree, based on that answer, that explanation, that the reason that the Mitolo Group has opted for the centralised facility at Angle Vale Road, is that it was assessed that this would be the most beneficial option for the business, yes?‑‑‑Yes, but Mitolo Group, like a lot of other farming business, has grown over many years to the point where you are sort of almost forced to grow out further, to grow larger scale. So the site has been there since around about 1972 but the business has grown as well.

*** PAULA COLQUHOUN XXN MR BAKRI

PN396

You'd agree that using the centralised facility has a number of economic benefits to the company?‑‑‑No, I don't necessarily agree.

PN397

Do you agree that it allows the group to make the most money possible? Compared to if you had packing facilities or rather facilities similar to the Angle Vale Road site at each site? Would you agree it puts the group in the best position to make the most money possible?‑‑‑As a centralised facility, yes, it does. It certainly would be financially viable to have a facility on every single site, that the cost of that plant, you just simply couldn't do it.

PN398

It's also more difficult to source labour for the type of work done at the Angle Vale Road facility in a remote area. It's more difficult to source that sort of labour if you get too far from Adelaide. Do you agree with that?‑‑‑Skilled labour, yes. If you're talking probably working holiday visas, no.

PN399

When you're referring to skilled labour, you're referring to the labour, the work performed at the Angle Vale Road site, is that right?‑‑‑Yes.

PN400

Having the centralised facility at Angle Vale Road allows you to source the appropriately skilled workers that you need, yes?‑‑‑Yes.

PN401

You then agree that the group, the Mitolo Group, having the centralised facility has allowed the group to derive a number of benefits?‑‑‑Yes, it has.

PN402

Economic benefits?‑‑‑Yes, there's fors and against.

PN403

Yes, and operational benefits, yes?‑‑‑Yes.

PN404

You've given evidence that the group recently acquired the assets of the Oakville Group?‑‑‑Yes.

PN405

When the Mitolo Group purchased the assets, it included a standalone facility at, I believe the pronunciation's Nildottie?‑‑‑Nildottie.

PN406

Nildottie?‑‑‑Yes.

PN407

Where work could be undertaken similar to the work undertaken at Angle Vale Road?‑‑‑Correct, yes.

*** PAULA COLQUHOUN XXN MR BAKRI

PN408

That's right, yes?‑‑‑Yes.

PN409

When the Nildottie facility was purchased, it was functioning and able to be used by the Mitolo Group?‑‑‑It was, yes.

PN410

It was an available option?‑‑‑No.

PN411

Instead of using the facility, the Nildottie facility, the group, the Mitolo Group, opted to transport produce from the newly acquired Oakville Group companies to the Angle Vale Road facility. That's right, yes?‑‑‑Yes.

PN412

This was because the group had decided that this would be the preferable option?‑‑‑Yes. That plant was extremely old, quite unsafe. It needed a lot of modifications to be able to pack the produce for the customers that we supply as well and was not viable for us to maintain it in that state.

PN413

VICE PRESIDENT CATANZARITI: Was any of that equipment transferred to the central location?‑‑‑Some of it has, we have. We've decommissioned quite a lot of it. Some that we have moved down, it needed substantial modification on it and some work. There was – to us, there was no point in having two big wash plants and facilities. That facility was quite old. Wasn't financially viable.

PN414

MR BAKRI: The reason that the group decided to maintain one centralised facility at Angle Vale Road was that the group could derive a number of benefits from this, yes?‑‑‑Yes.

PN415

You've given evidence that if you applied the Storage Services and Wholesale Award to the Mitolo Group's employees, this would have an impact on competitiveness in respect of its wage costs and you compared in comparison to other potato and onion suppliers who have the benefit of full coverage of the Horticulture Award. Is your evidence that there – no, I'll withdraw that. Has the Mitolo Group quantified the financial benefits of having centralised packing and processing facility?‑‑‑I'm sorry, in which terms. Can you clarify your question?.

*** PAULA COLQUHOUN XXN MR BAKRI

PN416

In terms of you've agreed with me that there are benefits that the group derives from having a centralised facility. You've agreed with me that those benefits include financial or economic benefits. Has the group – you've undertaken some analysis here, in your evidence, as to the additional wage cost. Has the group, or to your knowledge, has the group quantified, calculated what benefits are derived from having the centralised facility as opposed to having various facilities?‑‑‑I'm sorry, I wouldn't be privy to that. That would be a financial accounting – a business model I would have thought that I haven't got privy to, I'm sorry.

PN417

But to your knowledge, you don't know of any such analysis as being done?‑‑‑No, I'm sorry, but that's something, I guess, the family would do.

PN418

You've given evidence that the Mitolo Group does not intend to reduce current pay and conditions regardless of the outcome of this proceeding. I just want to clarify exactly what that means?‑‑‑Sure.

PN419

Can you advise whether Mitolo is saying that it will maintain the current wages and conditions?‑‑‑The current hourly rates that we're paying under our current agreement, yes.

PN420

It's also saying that the current wage and conditions will apply to both the current and future employees?‑‑‑The current hourly rates, yes.

PN421

I want to ask you a few questions about the task of grading. It's correct, isn't it, that when an employee is undertaking the task of grading, they're assessing the quality of the produce. Do you agree with that?‑‑‑No, I don't, no.

PN422

But it's correct, isn't it, that the task involves deciding whether the produce is a premium product or a lower grade product, yes?‑‑‑What it actually does is there's specifications that are set by the individual supermarkets that can change daily or it can change depending on seasons as well and what the graders are actually doing is going through, checking for size, defects, colour, shading, to ensure that those products meet the specifications. They don't perform the same functions as what our end of line quality team do.

PN423

Yes, I understand that you're saying that the end of line quality employees are undertaking different tasks. You'd agree with me that both the graders and the quality control employees, in slightly different ways, are assessing the quality of the product, yes?‑‑‑They're ensuring the product meets the customer specifications.

PN424

That is that it is of a requisite quality to meet those specifications?‑‑‑We refer it to grading. It's in a horticultural function, so we refer to our graders as graders. That's predominantly what that role is.

*** PAULA COLQUHOUN XXN MR BAKRI

PN425

But you can't disagree that it's an assessment of quality?‑‑‑It's – I guess, yes, it's ensuring that it's meeting customer specifications, it's what the customer is after, so if we want to say it's the quality, they're ensuring that it is but they don't have the full entitlement or so the full rights what a quality inspector would have.

PN426

Thank you. Vice President, that's the cross-examination for today but if I could flag that it's agreed between the NUW and the Mitolo Group that this witness will be recalled in the next sitting period and the reason for that is that the third statement was filed late last week. What we have sought, and we've reached a consent, I'm pleased to say reached a consent position, is to enable us to have the opportunity to seek instructions, adequate instructions, that we have an – we wouldn't oppose the further statement if we could have the opportunity to finish the cross‑examination in the circumstances where we've obtained full instructions. They're the questions for today but I do flag - - -

PN427

VICE PRESIDENT CATANZARITI: Your further recalling the witness is limited to exhibit 5?

PN428

MR BAKRI: To the matters, to the matters that arise in exhibit 5, indeed.

PN429

VICE PRESIDENT CATANZARITI: Yes, all right, thank you. Well that's right.

PN430

MR BAKRI: Thank you.

PN431

VICE PRESIDENT CATANZARITI: Well does that mean you're going to do – sorry, Mr - - -

PN432

MR CRAWFORD: Excuse me, your Honour. I have a couple of questions.

PN433

VICE PRESIDENT CATANZARITI: Mr Crawford's got some questions then we'll go you, Mr - - -

PN434

MR CRAWFORD: Thank you.

PN435

VICE PRESIDENT CATANZARITI: Is that going to be the case generally that both the unions are going to be cross‑examining each witness?

PN436

MR CRAWFORD: Not always but we're certainly conscious that you don't want to hear the same questions over and over again.

*** PAULA COLQUHOUN XXN MR BAKRI

PN437

VICE PRESIDENT CATANZARITI: Exactly.

PN438

MR CRAWFORD: It will be the NUW first and I'll attempt to try and make sure I only - - -

PN439

VICE PRESIDENT CATANZARITI: Yes, and usually in these modern award review cases, from my experience, the union side agree so they don't cover the same field of the witnesses.

PN440

MR CRAWFORD: Yes, we have, yes. That's our intent and feel free to pick me up if you feel repeating stuff.

PN441

VICE PRESIDENT CATANZARITI: Yes. Go ahead, Mr Crawford.

CROSS-EXAMINATION BY MR CRAWFORD [12.55 PM]

PN442

MR CRAWFORD: Ms Colquhoun, at paragraph 67 of your first statement, I think the 23 December 2016 statement, you talk about the transport of raw product to the facility located at the Angle Vale Road site, is that correct?‑‑‑Yes, that is correct.

PN443

Is that transportation work - what award would that be covered by?‑‑‑Those workers would be covered under the Road Transport Award.

PN444

Although you – I withdraw that. Do you also accept that within the Mitolo Group you have some workers that are covered by the Manufacturing Award, probably workers performing work of a technical nature?‑‑‑Yes, if they're qualified trade assistants, yes.

PN445

Yes, and do you also accept within the Mitolo Group there's employees performing work covered by the Wine Industry Award?‑‑‑That would be our vineyards but that sits – sit separately from the Mitolo but that's - - -

PN446

Is that within the Mitolo Group?‑‑‑Sorry? Yes, it is one of the entities, yes, the vineyards.

PN447

Would the Mitolo Group have any workers that are covered by the Clerks Award?‑‑‑Yes, like our accounts payable staff, our assistant accountants, yes.

*** PAULA COLQUHOUN XXN MR CRAWFORD

PN448

Whilst you say this is one big integrated business, the reality is regardless of the outcome in this case, the Mitolo Group's going to have workers covered by a number of different modern awards, won't they?‑‑‑Yes, they will, yes.

PN449

Does the Mitolo Group accept that the award coverage for the Angle Vale Road site is currently clear?‑‑‑No, it's not clear.

PN450

Does the Mitolo Group accept that there's a Full Bench decision which specifically determined award coverage for that site?‑‑‑There was, yes.

PN451

Did the Mitolo Group appeal that Full Bench decision?‑‑‑Yes, we did.

PN452

To the Federal Court?‑‑‑Yes. There was a - - -

PN453

MR BOURKE: Sorry. There's no right of appeal to the Federal Court.

PN454

VICE PRESIDENT CATANZARITI: No, there's - - -

PN455

MR BOURKE: There's judicial review. It's totally different ball game.

PN456

MR CRAWFORD: I've used the wrong term, I apologise. Do you accept that initially there was a first instance decision by a member of the Commission that the relevant award for the BOOT test was the Storage Services Award, is that correct?‑‑‑That was correct.

PN457

Then an appeal was lodged to a Full Bench which affirmed that that was the correct award, is that correct?‑‑‑That was correct, yes.

PN458

Was that the end of the litigation?‑‑‑I'm sorry, can you re‑term that. I'm unsure.

PN459

Well this second Full Bench - - -

PN460

VICE PRESIDENT CATANZARITI: Well doesn't the Full Bench decision say a bit more than that, to be fair, Mr Crawford?

PN461

MR CRAWFORD: Well it certainly identified the relevant award for that site.

*** PAULA COLQUHOUN XXN MR CRAWFORD

PN462

VICE PRESIDENT CATANZARITI: Yes, but it then invites other things to happen.

PN463

MR CRAWFORD: Well that's a separate - - -

PN464

VICE PRESIDENT CATANZARITI: Anyway, I'm not sure where this helps us on an award review if you're saying that ‑ anyway, it's a matter for you but remember this is an award review as to whether the award actually still works.

PN465

MR CRAWFORD: I get that point but I mean there are – it's an important point that the conditions of employment for employees are determined with reference to an award so it is an important credibility point for the Mitolo Group, in our view.

PN466

VICE PRESIDENT CATANZARITI: Well you put it in as a question of credit now, is that what you assert?

PN467

MR CRAWFORD: In a way, but I mean I think it's an important - - -

PN468

VICE PRESIDENT CATANZARITI: Well not in a way. It's either a credit point or it's not. Putting as a credit point, you better put it squarely as a credit point.

PN469

MR CRAWFORD: Right. Well I mean I did squarely ask the question does the Mitolo Group accept that the current award coverage for the Angle Vale Road site is clear?‑‑‑No. As it stands, no. It's very ambiguous to us.

PN470

All right. Do you accept that – I mean, you did accept before that a Full Bench of the Commission did make a decision on that point. That's correct, isn't it?‑‑‑Yes.

PN471

Did the Mitolo Group take any further action to dispute ‑ no, sorry. Did the Mitolo Group take any further action in relation to that proceeding? Did they appeal or seek review of that Full Bench decision?‑‑‑We took the advice that was actually in that second appeal and that was if we had concerns and take the opportunity for the modern award review, so that's why we're here right now.

PN472

But you're seeking variations to the current award, that's correct isn't it?‑‑‑That's correct, yes.

*** PAULA COLQUHOUN XXN MR CRAWFORD

PN473

That doesn't impact upon what the status of the current award does it?‑‑‑Potentially it can, I guess if the undertakings are backdated.

PN474

As we stand here today, no variation has been made. There is a Full Bench decision about award coverage for the Angle Vale site isn't there?‑‑‑As it stands, I believe, yes.

PN475

Yes. My friend from the NUW made mention earlier to the Mitolo Group investing further resources into the Angle Vale Road site, I think by the acquisition of the Oakville Group, is that correct?‑‑‑That is correct.

PN476

I believe your most recent statement also refers to the construction of some new dams at the site, is that correct?‑‑‑That is correct.

PN477

All right, so despite the Full Bench currently clearly stating that that site is covered by the Storage Services Award, the Mitolo Group is continuing to invest resources into that site isn't it?‑‑‑Yes, it is.

PN478

Can I please refer you to paragraph 113 of your first statement, the 23 December 2016 statement. In that paragraph you give some evidence about the working hours of employees, I believe, at the Angle Vale Road site, is that correct?‑‑‑That's correct.

PN479

At paragraph 113.2, you say the employees generally work between the hours of 5.00 am and 7.00 pm Monday to Saturday, is that correct?‑‑‑That was correct at the time of my statement but our operation hours have changed. So yes, that's correct.

PN480

If I'm an individual employee, am I working throughout that whole period from 5.00 am to 7.00 pm for six days per week?‑‑‑No. Your hours will vary daily.

PN481

Are there some employees that work 14 hours per day for six days a week?‑‑‑We try to avoid it as much as we can but with a perishable product in the market and as well as the fact that with potatoes, you just don't know what you're going to get out of the load and how long the day's going to be. You might need to bring more loads down to fulfil the orders, slow down the grading lines if the product quality's not very good so therefore then it's taking you long to wash or to pack it, so that the hours will vary. I can't make comment on that, I'm sorry.

*** PAULA COLQUHOUN XXN MR CRAWFORD

PN482

I guess within that 14 hour span, is there a group of employees that comes on to replace an existing group of employees or it's more that one group of employees is working throughout that whole period?‑‑‑It depends on the time of the year, the shed that they may be working in and the product quality and the season. It can change.

PN483

Is it common for employees to work 14 hour shifts?‑‑‑Occasionally they have worked a 14 hour shift. However, we avoid that as much as we possibly can.

PN484

At paragraph 126, and other paragraphs in the vicinity of that paragraph, you talk about potential costs of - - -

PN485

VICE PRESIDENT CATANZARITI: Which statement you're now in?

PN486

MR CRAWFORD: Sorry, the first statement, 23 December 2016.

PN487

VICE PRESIDENT CATANZARITI: Yes.

PN488

MR CRAWFORD: At paragraph 126 of that statement, you talked about the cost under the Horticulture Award and the Storage Services Award. Has the Mitolo Group provided any data about its revenue for the Full Bench to consider in these proceedings?‑‑‑I'm actually not privy to that information, I'm sorry. It's a family owned business and I wouldn't have had access to that information.

PN489

But you haven't provided any information in your witness statement about the revenue for the Mitolo Group have you?‑‑‑No, no.

PN490

You haven't provided any information about the profit levels for the group have you?‑‑‑No, I'm not privy to that at all, I'm sorry.

PN491

You're able to go away and work out the potential cost for the Mitolo Group depending on award coverage but you're not able to work out how much revenue or profit the Mitolo Group makes, is that correct?‑‑‑That is correct because I'm privy to the information under my management and under my control, which is employee related data and payroll data. I don't have access to profit and loss statements or financials, I'm sorry.

PN492

May I hand the witness a document?

PN493

VICE PRESIDENT CATANZARITI: Yes. How long does your ‑ ‑ ‑

*** PAULA COLQUHOUN XXN MR CRAWFORD

PN494

MR CRAWFORD: Not much longer. It's the last - - -

PN495

VICE PRESIDENT CATANZARITI: Thank you. What's the basis that you're asking this witness about an article from a journal? What's her expertise to ask a question about this award review case?

PN496

MR CRAWFORD: I was going to take the witness to some general information about the economic performance of the horticultural industry and I was going to ask her if it is consistent with the Mitolo Group's experience.

PN497

VICE PRESIDENT CATANZARITI: How does that assist when she's a human resources manager?

PN498

MR CRAWFORD: Sorry?

PN499

VICE PRESIDENT CATANZARITI: How does it assist the Bench when her qualification is as a human resources manager? You could ask the question but I'm not sure whether it's useful what a human resources manager thinks on this point.

PN500

MR CRAWFORD: I'll be quick, your Honour. The document I've handed to the witness is titled Horticulture Outlook for 2021-22 by Sarah Smith and Andrew Cameron. It's from an ABARES document titled Agricultural Commodities March Quarter 2017. Your Honour, I would like to have that document marked, if it's possible.

PN501

VICE PRESIDENT CATANZARITI: MFI1.

MFI #1 HORTICULTURE OUTLOOK FOR 2021-22 BY SARAH SMITH AND ANDREW CAMERON

PN502

MR CRAWFORD: Ms Colquhoun, can I please take you to page 83 of that document. Do you have that?‑‑‑Yes, I do.

PN503

Can you see in bold at the top there's gross value figures, nominal and real and then gross value figures are separated for fruit and tree nuts excluding grapes and then vegetables?‑‑‑Yes.

*** PAULA COLQUHOUN XXN MR CRAWFORD

PN504

Starting first with gross value/nominal value, do you accept that for that period 2014 to 2015 through to 2021 to 22 the forecast is for a consistent improvement in terms of gross value for the horticultural industry?‑‑‑Yes, but I also note it is a forecast so I guess with the horticultural industry, you just need a drought or something like that then it will sort of change, so. But yes, I agree that's what that says on here.

PN505

Yes, and just quickly, if you go to the fruit and tree nuts, or perhaps more relevantly the vegetables section, for the nominal value, do you accept that, again, that the forecast figures are for a continual improvement through the 2021 to 22?‑‑‑I agree on that forecast, yes, if that's where those figures are, yes.

PN506

If you go about halfway down the page there's an exports section and if I take you to the vegetables part of the export section, the nominal figures, do you accept that, again, the export figures are forecast to continually grow for vegetables all the way through to 2021 to 22?‑‑‑I do but also note you can't actually export potatoes so I don't think that would have much of an impact on our business.

PN507

They can't be imported either, I think that's right?‑‑‑No, that's correct.

PN508

There's minimal – well obviously there's no threat from overseas potatoes in Australia is there?‑‑‑No.

PN509

Do you accept, looking at those figures, that the general forecast is positive for the horticulture industry?‑‑‑Speaking by experience, that is a forecast. However, going back about four years ago, there was a lot of water shortage and drought and businesses did it quite tough so, again, it is a forecast. I'm not too sure where this information has come from, but it's - - -

PN510

It's a Commonwealth government publication?‑‑‑Okay. Yes, I agree it's on there.

PN511

You have accepted that – I mean, we're only going off the forecast in this document, I accept that, but based on the forecast in this document, you accept it's a positive forecast isn't it?

*** PAULA COLQUHOUN XXN MR CRAWFORD

PN512

VICE PRESIDENT CATANZARITI: Mr Crawford, there's nothing stopping you tendering this document in your case. The document is a document. This witness saying that she agrees with the document put in front her does not assist. Is there a question you wish to ask this witness? Because that – the Full Bench will receive this material, as you can any articles, et cetera, help us in award review but asking a witness to identify an article that you – is not the right way of approaching the task, Mr Crawford.

PN513

MR CRAWFORD: Just one final question. Is the – you might not be able to answer it but are you aware of the forecast within the Mitolo Group of whether that's positive in terms of its economic performance for the near future?‑‑‑I believe from an employment point of view, that's all I can make a comment on in regards to what's in my control, it's staffing numbers, that we are looking at staying probably stable where we are right now.

PN514

Nothing further, thank you.

PN515

VICE PRESIDENT CATANZARITI: Thank you. Mr Bourke.

PN516

MR BOURKE: No re-examination, your Honour.

PN517

DEPUTY PRESIDENT SAMS: Ms Colquhoun, could I just – so I'm clear, that in terms of the two competing awards, you don't actually pay and have conditions appropriate to those awards? You have an old collective agreement don't you?‑‑‑We do have an old agreement, we do, yes. That was what was going into replace the first time round in 2014.

PN518

The first agreement?‑‑‑Correct, yes.

PN519

Is it still the desire of the company to have an enterprise agreement?‑‑‑Yes, yes. As long as it fits with the employees, they're happy with that. They were happy with that agreement. We had 158 votes, I think, to eight for those employees, so yes, we'd certainly be looking at doing a new agreement with our employees once we've got the coverage confirmed.

PN520

You're refraining from taking any steps to do that because of this coverage issue?‑‑‑Absolutely, absolutely, yes, we've sat back.

PN521

VICE PRESIDENT CATANZARITI: Anything arising?

PN522

MR CRAWFORD: No, your Honour.

PN523

VICE PRESIDENT CATANZARITI: Thank you. The Commission will adjourn until 2 o'clock. You're excused.

<THE WITNESS WITHDREW [1.11 PM]

*** PAULA COLQUHOUN XXN MR CRAWFORD

LUNCHEON ADJOURNMENT [1.11 PM]

RESUMED [2.03 PM]

PN524

VICE PRESIDENT CATANZARITI: Thank you. Yes, I believe the next witness is going to be called by - - -

PN525

MR BOURKE: Correct, but just one housekeeping matter, your Honour, and I think there's no objection, with leave of the Commission, for Paula Colquhoun to remain present in the body of the Commission.

PN526

VICE PRESIDENT CATANZARITI: If there's no objection, then she can stay.

PN527

MR BOURKE: Thank you.

PN528

VICE PRESIDENT CATANZARITI: Is that the case?

PN529

MR BAKRI: It is the case.

PN530

VICE PRESIDENT CATANZARITI: Yes.

PN531

MS MACDOUGALL: Thank you.

PN532

VICE PRESIDENT CATANZARITI: Thank you, Ms MacDougall. This is the last witness for today, correct?

PN533

MS MACDOUGALL: That's correct. Thank you, your Honour. If it pleases the Commission, may I call our witness, Len Tonsing.

PN534

THE ASSOCIATE: Could you state your name and full address please.

PN535

MS TONSING: Helen Elizabeth Tonsing, (address supplied).

<HELEN ELIZABETH TONSING, SWORN [2.04 PM]

EXAMINATION-IN-CHIEF BY MS MACDOUGALL [2.05 PM]

*** HELEN ELIZABETH TONSING XN MS MACDOUGALL

PN536

VICE PRESIDENT CATANZARITI: Please be seated.

PN537

MS MACDOUGALL: Ms Tonsing, your full name is Helen Elizabeth Tonsing?‑‑‑That's correct.

PN538

Your address is (address supplied)?‑‑‑That's correct.

PN539

You're employed by Gayndah Packers as the administration manager?‑‑‑That's correct.

PN540

Have you prepared a statement for the purposes of these proceedings?‑‑‑Yes, I have.

PN541

Have you a copy of that statement with you? Just been handed to you?‑‑‑Yes, I do.

PN542

Have you recently read that statement?‑‑‑I have.

PN543

I understand that you wanted to make a correction in relation to your name on that statement?‑‑‑Yes. It has Len. Len is just a nickname or an abbreviation from Helen, so my legal name is just Helen Elizabeth.

PN544

Shall we correct that for the record, please. I understand that you wish to qualify a statement at paragraph 13 of your statement?‑‑‑Yes, I do. Our business comprises of the 13 orchards, 10 of which are by the owners of Gayndah Packers and three are by outside growers which pack under the Gaypak brand.

PN545

Thank you, Ms Tonsing. I also understand that you wish to correct the attachments to LT4. Ms Tonsing has provided me with replacement aerial photographs and I'd be pleased if I could provide those.

PN546

VICE PRESIDENT CATANZARITI: That's the three photographs?‑‑‑It is.

PN547

MS MACDOUGALL: That's correct.

PN548

VICE PRESIDENT CATANZARITI: Thank you.

*** HELEN ELIZABETH TONSING XN MS MACDOUGALL

PN549

MS MACDOUGALL: Your Honour, I would like to – I'll withdraw that, sorry. Ms Tonsing, can you please explain the correction to those images?‑‑‑Yes. On the one with the Gayndah Packers, I don't have a correct one in front of me, but it should say Gayndah Packers depicting nine of the 10 of the owner's orchards.

PN550

I beg your pardon, sorry. If I may?‑‑‑Thank you. Thank you. It's – yes, it's the one with the big blue – that's got the distance to Gayndah Packers, so I just amended the Gayndah Packers showing nine of the 10 of the owner's orchards and then on the original one, I had some of the lettering mixed up with the kilometres. My apologies on that. I just fixed that error.

PN551

Are there any more changes - - -

PN552

VICE PRESIDENT CATANZARITI: I must say, it's still, in the photocopy we've got, it is still – the first two ones are difficult to read, if anything turns on where the red arrows are. The third one is much easier to read.

PN553

MS MACDOUGALL: Would it be of assistance, your Honour, if we provided following today a - - -

PN554

VICE PRESIDENT CATANZARITI: Yes, a soft copy would be probably easier to look at.

PN555

MS MACDOUGALL: Indeed. We'll provide that to the Commission. Yes, I would like to tender that, thank you. Or it is an amended - - -

PN556

VICE PRESIDENT CATANZARITI: Yes, that will exhibit GP2.

EXHIBIT #GP2 AMENDED AERIAL PHOTOGRAPHS

PN557

MS MACDOUGALL: Are there any more changes to your statement, Ms Tonsing?‑‑‑No, that's it.

PN558

Your statement, is it paragraph - - -?‑‑‑Yes, that is 66.

PN559

Is everything in your statement true and correct to the best of your knowledge?‑‑‑It is.

PN560

Your Honour, I tender the statement.

*** HELEN ELIZABETH TONSING XN MS MACDOUGALL

PN561

VICE PRESIDENT CATANZARITI: Yes. On reflection, what I might do is re-insert the pages as part of what is exhibit GP2.

PN562

MS MACDOUGALL: Yes, that's probably more convenient.

PN563

VICE PRESIDENT CATANZARITI: I'll pull out the old pages and put in the new pages as they are, as the exhibit GP2.

PN564

MS MACDOUGALL: Your Honour, before I finish my examination‑in‑chief, I wonder if you would indulge me to, and I think it might assist the Commission, to put some questions to Ms Tonsing to - - -

PN565

VICE PRESIDENT CATANZARITI: The normal process is you'd have a discussion with the other parties. Have you had that discussion?

PN566

MS MACDOUGALL: No, I have not, your Honour.

PN567

VICE PRESIDENT CATANZARITI: Is there any problem with some supplementary questions? It's a bit difficult to ask.

PN568

MR BAKRI: I'll say no but I reserve my right to object if I think it should have been done earlier and we're prejudiced.

PN569

VICE PRESIDENT CATANZARITI: Yes, understand that, Mr Bakri, and Mr Crawford, you're in a similar position?

PN570

MR CRAWFORD: Yes.

PN571

VICE PRESIDENT CATANZARITI: Yes. Just as a matter of protocol, notwithstanding that it's an award review, if you are going to ask supplementary questions, it's nice to sort of tell the other parties before you're going to do it.

PN572

MS MACDOUGALL: Indeed.

PN573

VICE PRESIDENT CATANZARITI: Thank you.

PN574

MS MACDOUGALL: Thank you.

*** HELEN ELIZABETH TONSING XN MS MACDOUGALL

PN575

VICE PRESIDENT CATANZARITI: Well not nice, it's appropriate.

PN576

MS MACDOUGALL: Appropriate, indeed, you're quite right. Ms Tonsing, could I take you to the first image of LT ‑ ‑ ‑?‑‑‑Example of packing shed that's close to Gayndah Packers?

PN577

Yes?‑‑‑Yes.

PN578

Could you please explain to the Commission - - -?‑‑‑So what I was trying to depict here is within the Gayndah region of where we're situated, I just picked a few packing sheds that are close to our facility and all these packings sheds would be covered by the Hort Award and they all do apply the Horticulture Award. They all are citrus packing sheds and in effect do exactly the same thing we do, they pack citrus.

PN579

VICE PRESIDENT CATANZARITI: Sorry, I'm just trying to – is it the two diamonds underneath the blue arrow you're referring to, the blue line? Is that the packing shed or is it all five of them?‑‑‑Yes. That's our packing shed, that's Gayndah Packers packing shed, and all the other red ones are just other packing sheds that are close to our packing sheds.

PN580

Just for the record, so is it four diamonds then that you're referring to?‑‑‑Two, four, five.

PN581

Five. It's all the diamonds are, in fact, not Gayndah Packers?‑‑‑Yes, they're all other packing sheds that apply the Horticulture Award.

PN582

Thank you. Yes, I missed one.

PN583

MS MACDOUGALL: Ms Tonsing, if you turn to the next aerial photograph. Could you please explain to the Commission ‑ ‑‑ ?‑‑‑So this photograph shows – sorry, have I mixed myself up here? Sorry, I think I've mixed myself up here.

*** HELEN ELIZABETH TONSING XN MS MACDOUGALL

PN584

VICE PRESIDENT CATANZARITI: The page you're being referred to, I think, is citrus packing sheds?‑‑‑Yes. So this shows the citrus packing sheds, sorry. I'm not very – I'm – maps and me, I'm sorry. This one shows the actual packing sheds around close to Gayndah Packers and it actually shows the size of the town. So we've got Gayndah Packers where the yellow arrow is on the outskirts of town and then if you look to just on the other side of the river, there's, on the start of town, there's a packing shed which applies the Hort Award. The other one, two, three, four, five on the ‑ they all apply the Horticultural Award and they're all citrus packing sheds. So the first map, my apologies, that is a citrus packing shed similar to Gayndah Packers that has contract packers and packs his own fruit on other orchards that he brings to that packing shed with a blue arrow.

PN585

Does this show half the Burnett River being dry or is it just the way it's been printed?‑‑‑It does actually show that quite a bit of it is quite – there's quite a bit of dry sand there, yes, and has – yes. Depending on when this was taken but we've had a very dry summer.

PN586

MS MACDOUGALL: Ms Tonsing, if I can take you to the final, the third image. Can you please explain to the Commission the layout of the pack sheds there?‑‑‑Okay, so where the yellow arrow is is where the actual facility is, where the packing shed is. I've depicted nine of the 10 owners orchards. The reason why not the 10th one, it goes right off the map so I just wanted to depict that in relation to the first map, our scenario is very similar to the owner of the packing shed on the first map. To just show that all citrus packing sheds in the region get fruit from other orchards and of their own orchards which aren't on the same facility or the same land as where their packing shed is, and they would all apply the Horticultural Award.

PN587

DEPUTY PRESIDENT SAMS: But Ms Tonsing, with the first diagram with the blue line pointing to the packing shed, who owned that packing shed?‑‑‑Am I allowed to say? Can I – yes, it's Bevan Young.

PN588

Right, and does Mr Young own the farms that supply the fruit to that packing shed?‑‑‑No. He has two farms which supply there and the one completely on the left, that is owned by one of our ex-packers that now packs to him and on the two on the side, right on the right side, also don't belong to him.

PN589

MS MACDOUGALL: Yes, there are no further questions, your Honour. That's my examination-in-chief, thank you.

PN590

VICE PRESIDENT CATANZARITI: Thank you. Mr Bakri.

CROSS-EXAMINATION BY MR BAKRI [2.15 PM]

*** HELEN ELIZABETH TONSING XXN MR BAKRI

PN591

MR BAKRI: Thank you, Vice President. Ms Tonsing, I understand your evidence to be that Gayndah Packers is a company that can be contracted by growers to pack their produce for them. Is that a fair way to describe it?‑‑‑No. No, they're outside growers so when I – anyone in Gayndah would refer to a contract packer, what they actually mean is an outside grower, someone that doesn't have shares in the business.

PN592

It flows from this that Gayndah does not grow produce of its own, yes?‑‑‑I think I did put that in my statement that the owners all grow produce but Gayndah Packers itself does not grow produce.

PN593

Does not. Its operations are limited to packing?‑‑‑The owners' fruit.

PN594

The owner's fruit and the fruit of external producers, yes?‑‑‑And fruit of external growers, yes.

PN595

Just to clarify the breakdown of how much of the fruit is from the owners' properties and how much is from other producers?‑‑‑So 80 percent - - -

PN596

Is from the three owners?‑‑‑From the owners.

PN597

Then the rest is from the external clients?‑‑‑Yes.

PN598

You give the following evidence in relation to what you say would happen if it was to be clarified or thought or if it was determined that the Storage and Wholesale Award was to apply to the Gayndah business. The evidence you give is that "I expect that we would lose the contracts to pack because the growers could source alternative packing sheds that could provide cheaper packing rates within the local area". I just want to clarify what sort of packing sheds you're referring to here. Are you referring to packing sheds on farms that grow produce or packings sheds located off farms that are contracted to pack produce?‑‑‑Well it could be – it all depends on where they go. If I lose them because if I push up my bin tip rate if I'm under the storage award, they would go and pack whichever facility is closest to them and that facility may be on a separate piece of land that doesn't have an orchard on it. Yes, I can't assume where they would go. They would leave.

PN599

Because under this scenario, farms that grow their own produce and have their packing sheds on a farm, those farms don't generally offer their sheds for packing work on a contract basis do they?‑‑‑They do. Other packing facilities - as on the first map, he packs for outside growers or contract packers.

PN600

Is that packing shed located on his farm?‑‑‑Yes, but not necessary – yes, it's located on his farm but I don't think he has trees on the farm that he actually has his packing shed on.

*** HELEN ELIZABETH TONSING XXN MR BAKRI

PN601

Yes, so where that packing shed is located, there's nothing else there? It's the packing shed facility?‑‑‑It's the packing facility and you'd find a few of them around.

PN602

Under that scenario, you understand that whoever owns that particular shed would also be obliged to pay the Storage and Wholesale Award rates. Do you understand that?‑‑‑No, because it's on a property that belongs to him. And his main business – because – yes, his main business is growing fruit so the Horticulture Award would apply to him.

PN603

Your understanding, in saying that you think you'll lose business, is that the Horticulture Award would apply to that person even though there weren't trees, there was not an orchard on that property?‑‑‑Yes, I believe the Hort Award would apply to him.

PN604

If we just say for a second that the Hort Award wouldn't apply and the Storage Services Award, in fact, applied, that's a legal question as to what would apply, would you then be less concerned about losing business?

PN605

MS MACDOUGALL: Objection.

PN606

VICE PRESIDENT CATANZARITI: What's the basis of the objection?

PN607

MS MACDOUGALL: Objecting to the client's in a position to be able to make a legal assessment in relation to - - -

PN608

MR BAKRI: That's not what I asked.

PN609

VICE PRESIDENT CATANZARITI: Well I don't think he's asking her to make a legal assessment. He's saying assuming that, as I understand the question, assuming that the storage award applied on the farms, not the Horticultural Award, would it mean less like the people then leave your facility to go to that facility. That's the thrust of the question. It's a legitimate question. Do you understand the question being put?‑‑‑Yes, I do. If the Storage Services Award applied to all packing sheds that packs citrus or pack any fruit, then, yes, because then we're all on a level playing field. But by putting us on the storage award, or even putting him on the Storage Services Award and putting others on the Hort Award, we're not on a level playing field, which is unfair.

*** HELEN ELIZABETH TONSING XXN MR BAKRI

PN610

MR BAKRI: Yes, so your concern that you might lose business is dependent on a situation where you were obliged to pay storage services and the other packing facility ‑ ‑ ‑?‑‑‑Yes, but if it's about the farm gate, the other packing sheds are still on farm gate so they would fall with the Hort Award. So I'm not really sure how I'm meant to respond to that because they would still fall under the Hort Award even though if that first packing shed didn't fall, two of us would be under storage award, the other 20 say would still be under the Hort Award because they're on farm.

PN611

Not quite what I asked you but we'll leave that?‑‑‑Okay.

PN612

I want you to assume for a second that the packing sheds in the area, it was clarified that they were obliged to pay the storage services, the award. In that situation, it's possible that the packing sheds may be able to increase the bin rate, yes? If there was a level playing field?‑‑‑I can't really answer what other packing sheds would do. But no, because even if I had of passed that effect onto the growers, it – yes, it just wouldn't be right because I'm passing on a cost and with the storage award, I can't react quickly to any changes so I'm restricted on what I can do or what I can offer to a grower.

PN613

What do you mean by you wouldn't be able to react quickly to any changes?‑‑‑For instance, weather events, as it affects a farmer, it affects us as a packing shed.

PN614

Yes, and how would the situation differ under the two awards or what do you mean by that?‑‑‑With the Hort Award, I have the flexibility of working the hours I work, from half past six to 4.00, starting at 6.00. I have the ability, if I have a machine breakdown, to stand my staff down. I don't have that flexibility under the storage award.

PN615

But do you understand that under the storage award you can still call in people to work at any time that you like? Do you understand that?‑‑‑Yes, but I'm limited to Monday to Friday, limited from 7.00 to 5.30, I think, unless there's a prior agreement and - - -

PN616

Your understanding is that you couldn't offer shifts at other times?‑‑‑Not at the rate that I can pay them between the 7.00 and 5.30 unless it's an agreement but it would come back down to – about the location.

PN617

Your conclusion that you would be likely to lose contracts, you'd agree that that's a guess, that may be incorrect?‑‑‑It may be.

*** HELEN ELIZABETH TONSING XXN MR BAKRI

PN618

One scenario is that growers would have the option of continuing to use Gayndah Packers or could establish their own packing sheds on the growing site. You'd agree with me that many growers would not be interested in establishing a packing shed on their property?‑‑‑Yes, I would probably agree.

PN619

In the event that your business was to put up its bin rate and growers who contract Gayndah were to take their business elsewhere, this does not necessarily mean that the three growers who use Gayndah Packers would cease using Gayndah for their own produce does it?‑‑‑No, it doesn't. They own the business.

PN620

Yes, so in that situation, we take that scenario where the external growers take their business elsewhere or make alternative arrangements, 80 percent of the packing work done would continue would it not?‑‑‑Yes, it would.

PN621

Therefore the viability of the business would not be affected?‑‑‑Actually it would be because even if I had 80 percent of the fruit, I still wouldn't be able to react to any changes that I have to do for the growers with respect to fruit coming in. It's a perishable product. I don't have 12 months to pack it.

PN622

Ms Tonsing, your evidence, as I understand it, is that you're concerned that the Gayndah Packers would lose contracts in the event that it was obliged to apply the storage award. What I want to be clear about is in the event that that occurred, that you did lose those external growers, that would not affect the viability of the business. You would still have the vast majority of work to be performed, albeit at a slightly higher rate. You'd agree with that?‑‑‑Yes, but I'd lose 20 percent of the business and the 80 percent I have left would have to cover the additional cost of the Storage Services Award for ‑ ‑ ‑

PN623

Yes, and that produce would still need to be packed, so you can't say that the viability of Gayndah Packers would necessarily be affected?‑‑‑Until I'm in the situation, sorry, I just had to get it in – until you're really in that situation where if you had to lose 20 percent of your business because, as I understand it, the section 134 of the modern awards objective is to make it fair for everyone, so if I'm forced because I have to pay a higher award to lose 20 percent of my business and the 80 percent remaining must pay an additional fee to make that business viability, that's a constraint on the business. I'm sorry, maybe I'm just looking at this completely in a black and white and not looking at all the grey areas.

PN624

The true situation is that if you were to lose the work from the external growers, it's quite likely that the work at Gayndah Packers would continue, would remain to be viable?‑‑‑It would continue. Until I'm in that situation, I don't know how long it would be still viable. I can't make an assumption 100 percent and say "Oh yes. No, we'll be viable for the next four years but then we may not be". I made the assumption that if I do lose it, it is going to put me on a back foot and it is going to be hard.

*** HELEN ELIZABETH TONSING XXN MR BAKRI

PN625

On the back foot and it will be hard but you don't really know what the extent of that would be, yes?‑‑‑No. I can make an assumption of what I think it would be.

PN626

Thank you. No further questions.

PN627

VICE PRESIDENT CATANZARITI: Thank you. Anything from you, Mr Crawford?

PN628

MR CRAWFORD: Just quickly, your Honour.

CROSS-EXAMINATION BY MR CRAWFORD [2.29 PM]

PN629

MR CRAWFORD: Ms Tonsing, how are the employees of Gayndah Packers, how are they paid currently?‑‑‑Under the Hort Award and then I have some clerical staff that are paid under the Clerical Award.

PN630

Right, but the site where the packing occurs for Gayndah Packers, there's no farm on that site is there?‑‑‑No.

PN631

Didn't the Full Bench in the Mitolo proceedings decide that a business like yours is covered by the Storage Services Award?‑‑‑I thought that was still under review. That's why we're here and I always assumed that we were under the correct award because the co‑op was under the Horticulture Award and when they took over, bought the – we just carried on with the Horticulture Award and that seemed to be the right award to apply because they own orchards just like the other packing sheds in the region own orchards and apply the Hort Award.

PN632

Despite the Mitolo Full Bench decision, Gayndah Packers is continuing to pay employees under the Horticulture Award, that's correct?‑‑‑Yes, I'm currently paying under the Horticulture Award.

PN633

Your Honour, may I hand the witness a document, and I can also check, your Honour, the document I handed to the witness before lunch, has that been marked as – is that an ‑ ‑ ‑

PN634

VICE PRESIDENT CATANZARITI: MFI was marked.

PN635

MR CRAWFORD: Was that an exhibit?

*** HELEN ELIZABETH TONSING XXN MR CRAWFORD

PN636

VICE PRESIDENT CATANZARITI: No, it's not an exhibit. It was marked as an MFI.

PN637

MR CRAWFORD: Can I tender it as an exhibit?

PN638

VICE PRESIDENT CATANZARITI: Well, you can tender it in your case. It's a question of – just one second. Just checking. We'll make it exhibit AUW1. AWU, did I say ‑ AWU.

EXHIBIT #AWU1 HORTICULTURE OUTLOOK FOR 2021-22 BY SARAH SMITH AND ANDREW CAMERON

PN639

MR CRAWFORD: AW1, thank you. Thank you, your Honour. Do you have that, Ms Tonsing?‑‑‑I do.

PN640

Can you see that it's a document prepared by the Australian Bureau of Statistics?‑‑‑I can see that.

PN641

It lists Australian and New Zealand Standard Industrial Classifications commonly referred to as ANZSIC codes and can you see on the first page there's reference to various agriculture industries, including mushroom and vegetable growing, 012, fruit and tree nut growing at 013, do you see that?‑‑‑Yes.

PN642

Do you accept on the first page there's reference to a wide range of growing industries on that first page?‑‑‑I do.

PN643

Can I now take you to page 13 of that document. Do you have that?‑‑‑Yes.

PN644

Can you see at number 732 an industry is identified as packaging services?‑‑‑I see that.

PN645

You see that?‑‑‑Yes.

PN646

Can I now hand the witness a further document, your Honour?

PN647

VICE PRESIDENT CATANZARITI: Sorry, what's the question you asked (indistinct) you've given us a document?

*** HELEN ELIZABETH TONSING XXN MR CRAWFORD

PN648

MR CRAWFORD: The additional document provides the information about what is in the packaging services industry classification.

PN649

VICE PRESIDENT CATANZARITI: Are you tendering this in to her expertise? How are we getting this document in through this witness?

PN650

MR CRAWFORD: It's a simple question of whether she accepts that the business falls within the definition of the packaging services industry.

PN651

VICE PRESIDENT CATANZARITI: Why don't you ask her that question rather than tabling - - -

PN652

MR CRAWFORD: Well with respect, your Honour, I've got to hand her the document which shows what the industry is?‑‑‑I thought this was a (indistinct).

PN653

VICE PRESIDENT CATANZARITI: What are you – you could ask her does she accept that the business of Gayndah Packaging is packaging services. You should put that question squarely. This is an award review, right, and normally award reviews, I should say, the documents don't come by surprise to witnesses. People are usually given documents in advance.

PN654

MR CRAWFORD: Your Honour, I was planning to ask the question you just mentioned. I just wanted to give the witness the document she needs to understand what the industry actually is. This is the document that defines the packaging services industry.

PN655

VICE PRESIDENT CATANZARITI: Yes. Thank you.

PN656

MR CRAWFORD: Do you have that document, Ms Tonsing?‑‑‑I do, yes.

PN657

You'll see it's headed - again it's an Australian Bureau of Statistics document, about halfway down there's reference to class 7320 packaging services. You see that?‑‑‑Yes.

PN658

Then it reads "This class consists of units mainly engaged in packing goods in bottles, cans, cartons, collapsible tubes, plastic sachets, plastic film or bags or other containers or materials on a contract or fee basis". Do you see that?‑‑‑I do.

*** HELEN ELIZABETH TONSING XXN MR CRAWFORD

PN659

Do you see that the last dot point on the first page refers to packing fresh fruit and vegetables?‑‑‑I do.

PN660

Would you accept that the business of Gayndah Packers falls within that industry definition that I've just read to you?‑‑‑We do pack fresh fruit and vegetables but so do other packing sheds pack fresh fruit and vegetables.

PN661

But leaving aside other businesses, just focussing on your business for the moment, do you accept that your business falls within that definition?‑‑‑Yes, we pack fresh fruit and vegetables.

PN662

Yes, on a contract or fee basis, is that correct?‑‑‑Yes.

PN663

DEPUTY PRESIDENT SAMS: Mr Crawford, it might be helpful to know what the ABS uses these statistics for. For their internal statistical evaluations or is it more widely used in industry to determine, as I assume you're seeking to do, that a particular operation falls within these classifications?

PN664

MR CRAWFORD: The ANZSIC codes, your Honour, are very broadly used for research functions. I believe the Commission even prepares its own data with reference to ANZSIC codes. You'll find that on the Commission's website. I mean, these are not obscure industry references at all. They're commonly used and understood. There's a whole range of economic data that is prepared using these industries.

PN665

I guess, ultimately I'm pointing out that the business of Gayndah Packers, based on the ABS classifications, is ‑ well the ABS has a separate industry classification for the packing work on a contract or fee basis that this business does and they have a different classification compared to farms that grow produce basically. That's the point I'm making.

PN666

VICE PRESIDENT CATANZARITI: Where does the ABS have farms and also pack fresh fruit and vegetables?

PN667

MR CRAWFORD: Well there'd be overlap.

PN668

VICE PRESIDENT CATANZARITI: Yes, well how does that assist us when there's overlap?

PN669

MR CRAWFORD: Well I should add that the - - -

*** HELEN ELIZABETH TONSING XXN MR CRAWFORD

PN670

VICE PRESIDENT CATANZARITI: That's the argument in the case.

PN671

MR CRAWFORD: There would only be overlap if the farm also packs on a contract or fee basis because that's part of the definition for the packaging services industry. If the farm is only packing their own produce, they wouldn't fall within the packaging services industry definition. It says at the end of the definition that it's on a contract or fee basis.

PN672

VICE PRESIDENT CATANZARITI: You say fee basis does not include a producer of their own product?

PN673

MR CRAWFORD: No. I mean, they might be employing people to pack for their own business but not paying a fee for someone else to pack which is what the business of Gayndah Packers involves.

PN674

VICE PRESIDENT CATANZARITI: You distinguish that from the Mitolo situation would you? Is that a concession you're making based on your analysis of the Australian Bureau of Statistics?

PN675

MR CRAWFORD: Well I was putting the question to the witness of whether she accepts that the business falls within the industry definition and she appears to have accepted that?‑‑‑No.

PN676

VICE PRESIDENT CATANZARITI: Well I understand that and this an award review and you're tendering these documents in your case and we're going to be asked to make sense of these documents and you're making a point which seems to now distinguish one of the evidence from another witness. Is it a concession that you're making?

PN677

MR CRAWFORD: Well - - -

PN678

VICE PRESIDENT CATANZARITI: That's the distinguishing feature.

PN679

MR CRAWFORD: I mean, I would prefer to probably deal with that issue in closing submissions. I mean, at this stage I was just looking for confirmation from the witness that she accepts her business falls within the industry definitions and she has accepted that.

*** HELEN ELIZABETH TONSING XXN MR CRAWFORD

PN680

DEPUTY PRESIDENT SAMS: Mr Crawford, you repeatedly refer to an industry definition and the industry being the packaging services industry. This document in front of me doesn't say it's an industry. It just says packaging services and describes them in a particular way. Why do you say it's a separate industry?

PN681

MR CRAWFORD: Well I mean the ANZSIC codes work at various levels, so there are general levels. You can see on the first page there's a category A, agriculture, forestry and fishing, and then that broad classification is broken down into sub-classifications and if you - - -

PN682

VICE PRESIDENT CATANZARITI: But doesn't the 1290 mean that this is part of the agricultural code?

PN683

MR CRAWFORD: Sorry?

PN684

VICE PRESIDENT CATANZARITI: Doesn't this document, the first document, sorry, the second document, they go together.

PN685

MR CRAWFORD: Yes. The second document is providing additional clarification.

PN686

VICE PRESIDENT CATANZARITI: To the agricultural industry, amongst others.

PN687

MR CRAWFORD: The second document provides a definition of what is referred to on page 13 of the first document. The first document lists all the different classifications that the ABS uses. If you look at page 12, there's actually the broader category for packaging services is administrative and support services and then the next level down, there's a building, cleaning, pest control and other support services category and then it's broken down again and that's where you see the packaging services classification and that is defined in the second document that I've handed up?‑‑‑Can I just clarify, I said we pack fresh fruit and vegetables. I didn't say I think we fall under the packaging services. Because you said do we pack fresh fruit and vegetables and I said we do pack fresh fruit. I didn't say that I fall under pest control or building cleaning. Or support. I'm sorry, you've given me something to read and then I'm – I respond to it.

PN688

MR CRAWFORD: Look, your response is fine, you answered my question. That was all I was hoping for.

*** HELEN ELIZABETH TONSING XXN MR CRAWFORD

PN689

VICE PRESIDENT CATANZARITI: Well the difficulty I have, I must say, Mr Crawford, is that if you're saying that page 13, building, cleaning, pest control and other support services, because it refers to packaging services, therefore it must mean that they fall outside of everything else do they? They fall outside of agriculture then, on your analysis.

PN690

MR CRAWFORD: It certainly does. The discrete industry as defined in the second document is treated separately ‑ ‑ ‑

PN691

VICE PRESIDENT CATANZARITI: It goes back to my earlier question, Mr Crawford, then therefore that any packaging service becomes problematic, on your definition.

PN692

MR CRAWFORD: Well it's the ABS definition.

PN693

VICE PRESIDENT CATANZARITI: No.

PN694

MR CRAWFORD: Again, it's only – the issue only arises if the packaging work is done for a contract or fee basis. I mean, they're not our classifications, they're the ABS documents. All I'm pointing out is that

PN695

VICE PRESIDENT CATANZARITI: Yes, but you're linking it back to the modern award.

PN696

MR CRAWFORD: Well I'm making a point that the ABS, an independent government organisation, actually treats packing work done on a contract or fee basis separately to agricultural work. It's got a separate industry classification for it. It must have its reasons for that. I don't explain - - -

PN697

VICE PRESIDENT CATANZARITI: You going to be leading some expert evidence in relation to it?

PN698

MR CRAWFORD: No. The document, as far as I was going to take it, was that the ABS does define that work differently. I mean that's clear from the documents I've provided. It's up to the – I mean, the Full Bench has indicated it's looking just to be provided with evidence and then it can decide what's appropriate. That's all we're doing here and I've demonstrated that the ABS does treat work done, packing work, packing of fresh fruit and vegetables for a contract or fee basis differently to agricultural work. That's the point I'm making.

*** HELEN ELIZABETH TONSING XXN MR CRAWFORD

PN699

DEPUTY PRESIDENT SAMS: But surely it doesn't purport to give a legal definition to these terms, let alone an award definition.

PN700

MR CRAWFORD: Certainly the ANZSIC classifications are different to awards, certainly accept that, but it's more of an economic classification than a legal term, I guess, but as I've indicated before, you won't have to look very far to find reference to these ANZSIC codes being used right across Australia. I mean they are used heavily and the Commission itself does use them. I've seen various Commission documents that refers to ANZSIC codes on the Commission's website, and it is taken into account, as I understand it, in the Commission's functions.

PN701

But I'm certainly not saying it necessarily follows that the ABS definition translates into the award. I'm just saying it's a relevant factor that an independent Commonwealth government body actually treats the work differently.

PN702

DEPUTY PRESIDENT SAMS: The word.

PN703

MR CRAWFORD: The work, sorry.

PN704

DEPUTY PRESIDENT SAMS: Does it really? It's not dealing with work is it?

PN705

MR CRAWFORD: Well - - -

PN706

DEPUTY PRESIDENT SAMS: What statistic refers to work in a context of – I thought this was all about exports, what we do, how much goes here, how much is grown, where it – that sort of thing. I'm not sure that it goes to defining work does it?

PN707

MR CRAWFORD: It defines industries at various levels, a big broad level, and then sub-levels and these codes are then widely used to conduct research, prepare data. I mean, that's how it works.

PN708

VICE PRESIDENT CATANZARITI: Yes, you wish to tender those documents?

PN709

MR CRAWFORD: Yes, please, your Honour, both of them.

PN710

VICE PRESIDENT CATANZARITI: I think it's AWU2 and AWU3.

*** HELEN ELIZABETH TONSING XXN MR CRAWFORD

EXHIBIT #AWU2 DOCUMENT

EXHIBIT #AWU3 ABS STATISTICS DOCUMENT

PN711

MR CRAWFORD: Thank you. Ms Tonsing, just briefly on your witness statement, at paragraph 28 you talk about the fees charged. Do you have that?‑‑‑Yes.

PN712

$90 per bin to contract pack and about $103 per bin to the three owners?‑‑‑Yes.

PN713

What does that mean? Why are there different rates used there?‑‑‑Because with the owners, we actually market the fruit, so that's under one brand, so we actually market the brand and that's hence the price difference.

PN714

You charge a higher fee to the owners to pack their fruit because you do additional - - -?‑‑‑Because the shed belongs to the owners and it markets under their brand, which is Gaypak. Gaypak is the owners' brand.

PN715

Right, and then the packed produce is sold. Is that by you or by the owners?‑‑‑Sold to the agents, yes.

PN716

By you?‑‑‑It's despatched by us.

PN717

You receive that income?‑‑‑Which gets paid back to the growers.

PN718

But the income for selling the packed produce to the agents, does that flow directly into Gayndah Packers initially?‑‑‑Initially, yes, but it goes back to the owners or back to the growers.

PN719

Right, and do you have any idea of the price that Gayndah Packers is able to sell that packed produce for?‑‑‑Relevance.

PN720

MS MACDOUGALL: Objection, your Honour. I'm not sure of the relevance of this question.

PN721

VICE PRESIDENT CATANZARITI: Well it's not a question of relevance. It's more of a question is there going to be ‑ ‑ ‑

*** HELEN ELIZABETH TONSING XXN MR CRAWFORD

PN722

MR CRAWFORD: I'll withdraw, your Honour.

PN723

VICE PRESIDENT CATANZARITI: - - - whatever the cost of the fruit or whatever it is for each. It's not a simple answer.

PN724

MR CRAWFORD: I accept that. I'll withdraw that question. Can I turn to paragraph 53 of your statement, sub‑paragraph 53.2, do you have that?‑‑‑Yes.

PN725

Is the point you're making there that the averaging system is different under the storage award and the Horticulture Award?‑‑‑The averaging – yes.

PN726

What's your understanding about how it works?‑‑‑My understanding of the storage award isn't that fantastic because I've used the Hort Award, is that it's on a week and it's the 30 hour average per week, Monday to Friday as opposed to on the Hort Award I have a four week period. I can work Saturdays and under the storage award I can't unless I pay penalty rates.

PN727

Right, okay. Nothing further.

PN728

VICE PRESIDENT CATANZARITI: Ms MacDougall, any re‑examination?

PN729

MS MACDOUGALL: Just one question, thank you, your Honour.

RE-EXAMINATION BY MS MACDOUGALL [2.51 PM]

PN730

MS MACDOUGALL: Ms Tonsing, my learned friend took you to document AWU3, which is the ABS stats document, and he put the question to you as to did you accept that, or did you agree that, Gayndah Packing packed fresh fruit and vegetables. Are there any other duties that Gayndah Packers does in relation to the fresh fruit and vegetable, fresh fruit?‑‑‑Yes, we grade the fruit, we sort the fruit. It's just not a matter of just packing it. The fruit has to be graded and grading is not just about first – it's putting it into the relevant first, second grade, premier, whatever the specs are for the grower.

PN731

There's no further re-examination, thank you.

PN732

VICE PRESIDENT CATANZARITI: Thank you, you're excused.

<THE WITNESS WITHDREW [2.53 PM]

*** HELEN ELIZABETH TONSING RXN MS MACDOUGALL

PN733

VICE PRESIDENT CATANZARITI: Yes, Mr Bourke.

PN734

MR BOURKE: Your Honour, just a couple of housekeeping matters, and this may also bear relevance and assistance to the Commission regarding the inspection. Speaking for Mitolo, particularly in light of the fact that there is to be an inspection, we don't require Ms Rowt or Mr Robertson for cross-examination, so that in relation to our position we don't require any NUW witness for cross-examination and have no objection to the tender of those statements.

PN735

Looking at the timetable behind tab 1 of our opening folder, most likely result would be that we would have probably a very short morning on Wednesday, 5 July and would leave 6 July open.

PN736

VICE PRESIDENT CATANZARITI: Yes, it was proposed that 6 July would be the inspection date.

PN737

MR BOURKE: If the Commission pleases.

PN738

VICE PRESIDENT CATANZARITI: The other employers should let the Commission know whether they seek to cross-examine those witnesses.

PN739

MR BOURKE: Yes, thank you. Just one other matter, we would respectfully ask if Mr Crawford for the AWU has any further documents he proposes to use, he provide them to the parties by 9.40 tomorrow.

PN740

VICE PRESIDENT CATANZARITI: Yes, I was going to make that observation now, Mr Bourke. Yes, I'll make that observation just before I hear from Mr Smith. Look, just a reminder, everybody, this is actually an award review. As a member of this Commission, I have sat on a number of these reviews. In the review, parties, unless you're going to run a credit point, then you normally do give the witnesses the documents.

PN741

Because we're there to sort of get as much material as possible and it doesn't help to actually ask a witness what they think of a document when they haven't seen the document before if it's not a credit point. Bear that in mind going forward, for all parties. Yes, Mr Smith?

PN742

MR SMITH: Just one point, with the issue of the NUW's witnesses, we can confirm tomorrow whether we will require the two witnesses that have just been mentioned for cross‑examination. We certainly won't require them unless we need to but we've only just become aware of this issue. Thank you.

PN743

VICE PRESIDENT CATANZARITI: Any other housekeeping matters? No? All right, we'll adjourn until 10 o'clock tomorrow morning.

ADJOURNED UNTIL WEDNESDAY, 21 JUNE 2017 [2.55 PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #1 MITOLO GROUP'S OPENING SUBMISSION DOCUMENTS PN50

EXHIBIT #2 OPENING SUBMISSION MATERIALS FOR MITOLO GROUP PN91

EXHIBIT #3 ZERELLA ENTERPRISE AGREEMENT............................... PN102

EXHIBIT #AIG1 AI GROUP DRAFT DETERMINATION.......................... PN185

EXHIBIT #AIG2 AI GROUP OPENING SUBMISSIONS.............................. PN185

EXHIBIT #NFF1 WITNESS STATEMENT OF KEITH RICE..................... PN194

EXHIBIT #NFF2 WITNESS STATEMENT OF GAVIN SCURR................ PN196

EXHIBIT #NFF3 WITNESS STATEMENT OF BRETT GUTHRIE........... PN198

EXHIBIT #GP1 OUTLINE OF SUBMISSIONS OF GAYNDAH PACKERS PN253

PAULA COLQUHOUN, SWORN...................................................................... PN298

EXAMINATION-IN-CHIEF BY MR BOURKE.............................................. PN298

EXHIBIT #4 WITNESS STATEMENT OF PAULA COLQUHOUN DATED 23/12/2016 PN307

EXHIBIT #5 SUPPLEMENTARY WITNESS STATEMENT OF PAULA COLQUHOUN DATED 15/06/2017................................................................................................ PN324

EXHIBIT #6 WITNESS STATEMENT IN REPLY OF PAULA COLQUHOUN DATED 17/05/2017............................................................................................................... PN332

CROSS-EXAMINATION BY MR BAKRI....................................................... PN334

THE WITNESS WITHDREW............................................................................ PN365

PAULA COLQUHOUN, RECALLED.............................................................. PN385

CROSS-EXAMINATION BY MR BAKRI, CONTINUING.......................... PN385

CROSS-EXAMINATION BY MR CRAWFORD............................................ PN441

MFI #1 HORTICULTURE OUTLOOK FOR 2021-22 BY SARAH SMITH AND ANDREW CAMERON............................................................................................................ PN501

THE WITNESS WITHDREW............................................................................ PN523

HELEN ELIZABETH TONSING, SWORN..................................................... PN535

EXAMINATION-IN-CHIEF BY MS MACDOUGALL.................................. PN535

EXHIBIT #GP2 AMENDED AERIAL PHOTOGRAPHS.............................. PN556

CROSS-EXAMINATION BY MR BAKRI....................................................... PN590

CROSS-EXAMINATION BY MR CRAWFORD............................................ PN628

EXHIBIT #AWU1 HORTICULTURE OUTLOOK FOR 2021-22 BY SARAH SMITH AND ANDREW CAMERON........................................................................................ PN638

EXHIBIT #AWU2 DOCUMENT........................................................................ PN710

EXHIBIT #AWU3 ABS STATISTICS DOCUMENT...................................... PN710

RE-EXAMINATION BY MS MACDOUGALL............................................... PN729

THE WITNESS WITHDREW............................................................................ PN732