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STANDING COMMITTEE ON EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
EMPLOYMENT AND WORKPLACE RELATIONS PORTFOLIO
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STANDING COMMITTEE ON EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
Department of Education, Employment and Workplace Relations
ACTING CHAIR (Senator Humphries)
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STANDING COMMITTEE ON EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
(Senate-Thursday, 23 October 2008)
EMPLOYMENT AND WORKPLACE RELATIONS PORTFOLIO
Australian Fair Pay Commission Secretariat
ACTING CHAIR (Senator Humphries)
ACTING CHAIR (Senator Humphries)
Australian Building and Construction Commissioner
- EMPLOYMENT AND WORKPLACE RELATIONS PORTFOLIO
Content WindowSTANDING COMMITTEE ON EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS - 23/10/2008 - EMPLOYMENT AND WORKPLACE RELATIONS PORTFOLIO - Workplace Authority
ACTING CHAIR (Senator Humphries) —I welcome Ms Bennett and Ms Bull. Thank you for being here.
Senator FISHER —Ms Bull and Ms Bennett, I would like to ask you some questions arising out of some answers that you gave to questions on notice last time and, in particular, in relation to the no disadvantage test and the agency’s implementation of that. I have about seven answers to refer to. Tell me the most convenient way to refer to it. I refer to response EW508.
Ms Bennett —Give me a moment.
Senator FISHER —They are in the range of 493 to 508, actually. They are all in that range.
Ms Bennett —The first one I have is 509, I think.
Senator FISHER —Good—you start just where I want to end.
Ms Bennett —The first question was?
Senator FISHER —508.
Ms Bennett —The policy guide?
Senator FISHER —Yes, in respect of the no disadvantage test. Most of these questions did arise out of your policy guide in respect of the no disadvantage test. We are on the home track, so to speak. In respect of that particular response, can you confirm that your response means that under the current no disadvantage test the Workplace Authority does not test pay rates in workplace agreements as against the Australian fair pay and conditions standard?
Ms Bennett —No. Sorry if it is not clear. What we are saying is that the assessment is done as a point-in-time test. Our reading of the question from Senator Abetz was whether we take in future pay increases. The answer is that, no, we can look at what the rate should be in the award, taking into account what the current pay scale summary might be—the pay scale rate—that reflects the Fair Pay Commission decisions or pay increases. But it is point in time. We had interpreted the question as: does it include future wage increases? We could not possibly forecast or crystal ball gaze what the commission would have done. It is a point-in-time assessment.
Senator ABETZ —I had confidence in you.
Senator FISHER —As was the case with the coalition’s Forward with Fairness test. It was the same situation in that respect under both the coalition’s Forward with Fairness test and—
Ms Bennett —The fairness test and the no disadvantage test.
Senator FISHER —Sorry, the fairness test, I should say.
Ms Bennett —They are both point-in-time assessments.
Senator FISHER —I take you to answer EW505, which has to do with—
Ms Bennett —Sorry, I am being guided through the folder here.
Senator FISHER —It is within a group of about 20 there. Do I understand from that response, which talks about the application of the no disadvantage test in respect of hours of work, that under Labor’s no disadvantage test a preferred hours arrangement can be included in a workplace agreement?
Ms Bennett —Yes, it can. But, as we note, it cannot be for casual trainees, apprenticeships, juniors or others and that is a key difference to the fairness test, where preferred hours could be agreed to between the parties. Under the no disadvantage test it is as it is set out here.
Senator FISHER —So the difference is that those categories of casual employees, trainees and apprentices and juniors cannot negotiate preferred hours but everybody else can?
Ms Bennett —They can negotiate different hours. It is what they are paid for those arrangements that becomes the core issue so that they would still be paid the rates that would apply for the times that they worked. For example, while as a junior or casual it may be their preference to work on the weekends. Individually that is between the employer and employee. But under the no disadvantage test they have to be paid the penalty rates for weekend work.
Senator FISHER —Okay. Thank you. I take you to answer 504, which was in response to a question about whether or not the policy guide allowed a new individual statutory agreement or collective agreement to reduce redundancy entitlements. Does your answer effectively mean that under the no disadvantage test redundancy entitlements can be traded off?
Ms Bennett —The parties to the agreement could decide that there would be no redundancy provisions. This is what is referred to in the legislation as contingency benefits. But it would only pass the no disadvantage test if there is either an increase in the salary or wages paid or another like condition added into the agreement which we would see as having sort of equal value to it.
Senator FISHER —Could the provision of a car park be considered sufficient in certain circumstances for trading away various conditions?
Ms Bull —The test is a global test, so we look at the overall effect of the agreement. The policy guide does reflect on car parking. Car parking in certain circumstances could be a benefit that we would see that is additional to what is in the reference instrument. Essentially the decision at the end of the day looks at all the terms and conditions in the agreement compared to the terms and conditions that would be provided in the reference instrument. It then makes a judgement about whether, when you take all that as a whole, the agreement provides at least as much or more than what the employee would have got under the reference instrument.
Ms Bennett —And I think the example, if I can add to what Helen is saying, is, if you worked somewhere where there were no parking pressures and there was lots of free available public parking, you would not count a parking spot as having any value. There is quite a lot of information about things like parking spots. The tax office has rulings on parking and what fringe benefits count and all those sorts of things. Let us say in the circumstance you are giving, if someone has been given a parking spot in a CBD, we know what the value of that is and we would be able to say, in the whole suite of things that is being provided, yes, that has a value and whether that would equal some of the things that have been included or not included.
Senator FISHER —So that does mean, then, that it could in fact be the provision of a car park that could tip the balance in favour of that being sufficient compensation for Labor’s no disadvantage test to enable agreement to pass Labor’s no disadvantage test?
Ms Bennett —It would probably have to be a very good parking spot, but, yes, it is possible.
Senator FISHER —Thank you, Ms Bennett. The last two answers I want to refer to are EW496 and EW497. Let us go to 496 first, which would appear to indicate that, under Labor’s no disadvantage test, penalty payments, night shift allowances and shift loadings can be traded away. Is that right?
Ms Bennett —They can be compensated. As Ms Bull explained, it is a global test. Other things can be put into the agreement that would compensate for that change. I think it is—
Senator FISHER —But that is what trading-off is all about, is it not?
Ms Bennett —But I think it is really important it is very clear in the policy guide and the way we would be looking at financial compensation that that equalled what someone would have got for those weekend rates and overtime so that their hourly rate for the hours that they worked would be the same for the hours that they may have worked in evenings or on weekends or public holidays.
Senator FISHER —So those payments and allowances could be traded off?
Ms Bennett —For an amount equal to or more than what they would have received if they had worked those hours and were paid on that formula.
Senator FISHER —Which is what the no disadvantage test is indeed all about. The final answer is 497. Once again, do I understand—it is rather a long question—from your answer that uniform allowances, vehicle and meal allowances can also be traded away?
Ms Bennett —They can be compensated. As I said, they also can be compensated for a higher salary or other clear benefits so that the employee is not disadvantaged by the change.
Senator FISHER —I have one further question. Does the Workplace Authority check for the inclusion of prohibited content in workplace agreements under Labor’s no disadvantage test?
Ms Bennett —Prohibited content provisions under the legislation were not changed with the introduction of Forward with Fairness, so the arrangements prior to Forward with Fairness still stand. So, yes, the Workplace Authority checks for prohibited content.
Senator FISHER —When requested to do so?
Ms Bennett —When requested to. Our staff are cognisant of what prohibited content is. If it emerges in the assessment of an agreement, they will also act on that.
Senator FISHER —In respect of prohibited content, the requirements of the legislation are the same under Labor’s no disadvantage test as they were under the coalition’s fairness test, is that correct, in the aspect you have just described?
Ms Bennett —The introduction of the transition arrangements with Forward with Fairness did not change prohibited content at this stage.
Senator FISHER —You say ‘at this stage’.
Ms Bennett —The Prime Minister has indicated that those issues will be considered in the substantive legislation.
Senator FISHER —So does all that mean that, in respect of prohibited content, in respect of redundancy entitlements, in respect of penalty payments, night shift allowances, shift loadings, uniform allowances and vehicle and meal allowances the application of Labor’s no disadvantage test has the same effect as the coalition’s fairness test could have? Is that what all that means? It would appear so to me from the answers we have just been through.
Ms Bennett —The fairness test protected seven key award conditions, which were referred to as protected award conditions. In applying the fairness test in its simplest form, those protected award conditions which are set out in the policy guide, which is still available in the fairness test, set out that they had a value. So the role of the Workplace Authority was to make sure that, in taking that away at that point of time, something else or financial compensation was given that equalled the value of those seven award conditions. The no disadvantage test looks at the reference instrument. That means that not every award will have a laundry allowance and not every award will have those components. We look at each agreement against the relevant reference instrument, the relevant award. So you look at the total picture of what is provided rather than just seven protected conditions. So it is a much larger measure of what advantage and disadvantage would be in compensation. It is a higher benchmark.
Senator FISHER —But, nonetheless, you have indicated that in the application of the no disadvantage test there are situations in which redundancy entitlements, penalty payments, night shift allowances, shift loadings, uniform allowances and vehicle and meal allowances could all be traded away in exchange for compensation.
Ms Bennett —Removed or amended.
Ms Bull —Can I just clarify on that list of items that redundancy was not considered under the fairness test. So the protected award conditions were in the main monetary type allowances or benefits. For example, penalty rates were tested and allowances like uniform allowances were tested, but redundancy arrangements were not a consideration when we tested agreements under the fairness test.
Ms Bennett —It was not one of the protected award conditions.
Senator FISHER —Thank you for that clarification. Thank you, Ms Bull. I take you to your answer to question 493, which is about workplace agreements and statistics. Your answer was provided in respect of publishing details relating to the making of collective agreements on your website. Will the authority be publicly releasing statistics this year?
Ms Bennett —Yes, Senator. I can give you an update on collective agreements, actually, in answering that question at that point in time. As at 15 October 2008, we had published 4,730 collective agreements.
Senator FISHER —Perhaps, Ms Bennett, if you could provide those figures on notice to the committee or in writing afterwards.
Ms Bennett —On the publishing of collective agreements?
Senator FISHER —As to what they are at a particular point in time. At the moment, I am not so concerned about what they are. I am more concerned to know that the details will be published so that they are capable of being looked at.
Ms Bennett —Yes. We certainly can do that. At the point in time last estimates, we explained in the evidence that there had been a bit of delay because of other priorities. But we have certainly well caught up. As I said, there are almost 5,000 collectives that researchers and others can now access through our website to get information on collective agreements. They are both fairness test and no disadvantage test collective agreements that have passed.
Senator FISHER —What about ITEAs, individual transitional employment agreements?
Ms Bennett —Like AWAs, these are individual arrangements between the employer and the employee. There are privacy provisions to that. So they are not able to be published in the same way because there is identifying information about the names of the parties. However, we have released 1,000 AWAs on DVD.
Senator FISHER —AWAs or ITEAs?
Ms Bennett —AWAs. We are about to release in December 1,000 ITEAs. But the delay to December is that we need to manually remove—black out—the names of the parties and any other identifying information, such as an ABN or something like that. And then they have been scanned and will be provided.
Senator FISHER —So you will be publishing actual agreements but with any identifying characteristics obliterated?
Ms Bennett —For individual agreements.
Senator FISHER —Will you be publishing statistics in respect of individual agreements and ITEAs included in that, obviously?
Ms Bennett —Yes. We are expecting to either late December or early in January provide what we would normally provide about processing information and pass and fail rates. But I have, as requested last committee, brought a handout on the processing statistics. Senator Marshall asked that I bring an updated table to this hearing, so we have brought an update on information that has normally been the lead part of our statistical releases that we have done in the past.
Senator FISHER —Thank you, Ms Bennett.
Senator ABETZ —I cannot imagine what has kept him away from receiving it. I would have thought he would be the first person here to receive it. But if we could see it, it would be good, thanks.
Senator FISHER —Thanks, Ms Bennett. Senator Abetz may have some questions in respect of that document once to hand. But from the statistics the Workplace Authority has published, the June quarter figures look to suggest that there has been a decrease in the number of union collective agreements of almost 20 per cent—about 17 per cent, I think—and about a 60 per cent decrease in greenfields agreements. Can you explain that?
Ms Bennett —The last statistics that were released were in the first weeks of the introduction of the no disadvantage test and shortly after the introduction of the legislation. We also know from when the fairness test was introduced that as legislation is being adjusted there is a bit of a decrease or a slowdown in activity as people gather enough information to be able to meet the new requirements. The business community employees and unions were also well aware that the changes were coming in. We saw a drop in all fields of agreements being lodged in those weeks before the changes were introduced.
Senator FISHER —So including ITEAs, even though you have not published—
Ms Bennett —We saw a reduction—
Senator FISHER —Well, I notice you had no comparator, I am sorry.
Ms Bennett —We had a reduction in AWAs over the same like-like period over a pattern of time.
Senator FISHER —I see.
Ms Bennett —It reduced just prior to the introduction of the legislation. There have been fewer ITEAs lodged and more collective agreements since the introduction of Forward with Fairness.
Senator FISHER —So we are talking about 1 March this year and essentially the stats for March, April, May and June—that quarter?
Ms Bennett —The 28th, so April. It was 28 March that the legislation came into effect. So April, May, June.
CHAIR —Do you mind if I take a moment to clarify some of the information in this table. Ms Bennett, can you take me through this. In table number 1, you have 47,000-odd agreements where the fairness test does not apply. If we go down to table 2, we have another row where the no disadvantage test is not applicable. It is able to pass. Let me finish the question, because it extends beyond that. Sorry, it does not. The rest of them are failure issues.
Ms Bennett —The fairness test had a threshold where, in any agreement where the employee was earning more than $75,000 per annum, the test did not apply. So that reflects two fields, really. It was either that it was a high income or that the industry that that person worked in was not one covered by an award.
Ms Bull —The occupation was not in there.
Ms Bennett —Occupation.
Ms Bull —There was a third leg, which was that the agreement did not modify or remove protected award conditions.
CHAIR —So the ones identified in the first table are the ones where the fairness test does not apply because of the date?
Ms Bennett —No. In the main, it was because the legislation said someone earned $75,000 or more—
CHAIR —In the first table?
Ms Bennett —Yes, in the first table—table 1.
CHAIR —Okay. Then in table 2, for instance, there is an additional 200. What are the factors identified there?
Ms Bennett —In the main, that 200 is because they are in occupations that are not covered by awards. Therefore, the reference—
Ms Bull —The legislation for the no disadvantage test provides that all agreements are tested under the no disadvantage test. However, if there is no reference instrument—that is, there is no relevant award and we cannot designate an award—the act provides that the agreement is taken to pass the no disadvantage test, which is a different arrangement from the fairness test.
Senator FISHER —But one in common?
Ms Bennett —Well, the difference was it either did not apply or it was taken to pass because it was an award free occupation.
Ms Bull —Yes. Under the fairness test, one of the arms of the threshold test was that there was no award coverage.
Senator FISHER —That is right.
Ms Bull —But there were two other items.
Senator FISHER —There were two others as well. But one of them was in common.
CHAIR —And what does this category ‘cease to operate’ mean?
Ms Bull —It means that the agreement did not pass the test and either the parties did lodge a variation within a period of time. It relates specifically to operational agreements that are ITEAs for new employees and greenfield agreements. If the agreement in that circumstance does not pass the test, the parties have 37 days to vary the agreement. If a variation is not received, the agreement will cease to operate on the 37th day after the date of the notice. Alternatively, they may have negotiated a variation which subsequently still does not pass the no disadvantage test and the agreement will cease to operate on the date that the authority makes the decision that the variation does not pass either.
CHAIR —So then some of those in that next row would, after the relevant time period, end up being cease to operate?
Ms Bull —Do you mean the ‘failed—requires relodgement’ one?
Ms Bull —They are non-operational agreements, so they are ITEAs for existing employees and union and employer collective agreements. Under the legislation, those agreements do not operate. They do not operate until they pass the test or seven days after we decide they pass the test. So if the original agreement which is lodged non-operational does not pass the test, then they have to choose whether they would ever lodge another agreement. So they may walk away from the process. There is no time limit because the agreements are not operational.
CHAIR —Do you have an additional handout that sets out all of those explanations? Perhaps I could ask you to take on notice those issues.
Ms Bull —We can take that on notice. It is detailed in our policy guide on the no disadvantage test, but we can take that on notice and provide that explanation.
Senator ABETZ —This handout—I was stumbling on what to call it, but I realise you have headed it as a handout so that has made it easier for me—has on it under table 1 ‘duplicate and invalid agreements’. There is an asterisk. Can you explain the notation of the asterisk further to me? The last bit says ‘Where a document other than the agreement was lodged by the parties to the agreement’. Is that where if we want to blame somebody—the staff accidentally put the wrong bit of paper in the envelope and send it off to you—
Ms Bennett —It does sort of mean some of those things. There are two things.
Senator ABETZ —I would have thought that would be quite minimal.
CHAIR —That is too many of those, I would have thought.
Senator FISHER —It is a lot of those.
Senator ABETZ —Exactly. It might round the figure down to 1,870. I would have thought it would be minimal. I was inquiring more as to the other category and what that actually means.
Ms Bull —That category relates to lodgements. It relates to two types of lodgements. One is about invalid agreements. The legislation under both the fairness test and the no disadvantage test—they are slightly different—provides provisions where an agreement is validly lodged. For example, if an agreement is not lodged with the correct declaration form or does not fill out mandatory fields in the declaration form, the agreement under the legislation is not validly lodged. A test—either the fairness test or the no disadvantage test—can only be conducted on validly lodged agreements. What we do in those circumstances is we send the agreement back to the employer indicating that and ask them to re-lodge it correctly. Duplicate lodgements are slightly different in that they are lodgements that have been validly lodged but they may be missing information that is needed—for example, ABNs. In some cases, we have employers ring up and say with a collective agreement, ‘Sorry, but we lodged the wrong one. We didn’t lodge the one that was voted on. We lodged the earlier draft.’ So they come in. They are counted originally. But they are to round out the figures to say that there are certain numbers that did not end up having the test applied to them for particular reasons.
Senator ABETZ —Is that the same explanation, I would assume, in table 2 for invalid with the asterisk?
Ms Bull —That is right. Those agreements are all agreements that were not validly lodged. There were some significant changes to lodgement requirements made under the transition legislation. In particular, previously you were not required to lodge a copy of the signed agreement—the signature pages. Under the new legislation, you are required to lodge that. We are still seeing many lodgements that do not meet those sort of requirements so that is why that figure is much higher than it was.
Senator ABETZ —I would have thought you would be concerned if out of 70,000 agreements lodged, 10,000, or one-seventh of them, are invalid. That is potentially a bit of a harsh term given what happens with them—that they can be resubmitted et cetera. But, still, I do not want you to expose yourselves too much. But do you think you might have been able to make it easier for people to fill out all the fields or whatever else or explain in greater detail so that, in effect, one in seven agreements are not accidentally lodged—I assume it is accidentally—with a field missing or part of it not in proper order?
Ms Bennett —We are monitoring it very closely. A proportion of them have gone down.
Senator ABETZ —Good.
Ms Bennett —I also must say that, in the first weeks, some of the other issues that we were confronting about invalidity is that there were AWAs lodged past that date. They were AWAs purporting to be ITEAs. But when you went into them, it said, ‘This is an AWA between this person and this person.’ So that obviously was clearly something that did not meet the requirements.
Senator ABETZ —And those people are given the opportunity to re-lodge?
Ms Bennett —Yes. Our website has been extensive. It is very clear when you do an electronic lodgement. Every session that I have gone to where I have spoken to employers and employees and unions and bargaining agents, I have explained the requirements. We have recently conducted some information sessions in which numerous parties to agreements have been there. We have explained that it is a requirement of the legislation that there are copies of the signature document and the other declarations. Then it will not be valid. We believe that the proportion is going down. Also, of course, it is not a time series it is reflecting at the time. So less and less are adjusting to it.
Senator ABETZ —So, one, you are conscious of it and, two, you have undertaken, for want of a better term, education campaigns. You are confident that as a result the number of invalid lodgements as a percentage will be decreasing?
Ms Bennett —May I also add that we do actually—
Senator ABETZ —Is that right?
Ms Bennett —Yes. That they are decreasing.
Senator ABETZ —Thank you.
Ms Bennett —I will add that in many, many cases we have also rung the parties and told them that it is not valid prior to the formal advice coming out in a letter explaining what has happened.
Senator ABETZ —In the absence of my very good friend Senator Marshall, could I request that you provide us with a similar handout update next time we meet. I think it would be helpful.
Ms Bennett —And we will include some information about the definitions requested by Senator Collins.
Senator ABETZ —Thank you.
Senator FISHER —Can you indicate, Ms Bennett, in respect of the second table, the timeframe? Is it from 31 March until 20 October?
Ms Bennett —Table 2 is 28 March to 20 October because that is the introduction of Forward with Fairness. In future it will reflect that—from 28 March to the date that we bring it along.
Senator FISHER —So the second table overlaps with the first in respect of part of the time period. But obviously they are different agreements with different tests. So they are actually different agreements subject to each table?
Ms Bennett —The overlap is the processing time and finalising the processing. So for the next time we meet, it will be entirely processed and it will just be outcomes.
Senator FISHER —Yes. You have indicated in response to Senator Abetz that, for example, where your category of invalid agreements is lodged and you categorise them as invalid, the parties are given the opportunity to re-lodge agreements. What is the applicable law in the interim for a workplace that has lodged an agreement you classify as invalid?
Ms Bennett —Well, they are not in operation. That category that you are talking about, they are not actually operating or in place—
Senator FISHER —That is right.
Ms Bennett —until they have passed. So they will be employed under the arrangement that they have in place. So that is either the award or the existing collective agreement or an individual agreement prior to that.
Senator FISHER —When you write to parties telling them that the agreement they lodged was invalid and therefore needs attention if they wish to pursue it, does the authority tell them what applies at their workplace in the interim? Do you tell them what you have just said to me in the letter you write them or the information you send them?
Ms Bennett —No, we do not, Senator. It is available on Q&As that we have on the website. But it is very clear when they lodge it that it is not in operation until we pass it for those fields of agreements. Certainly from our staff that answer the info line, if they ring, they would get that information and advice that would tell them that it had not passed and, therefore, they should continue with their arrangements until they are able to make a new arrangement.
Senator FISHER —Did you used to tell people in writing when their agreements failed to pass what, therefore, applied in the workplace?
Ms Bull —When the agreements fail under the no disadvantage test, we tell them what applies. When they have failed under the fairness test, we tell them what applies. The invalid issues are slightly different because, as before, we have not been able to test that agreement. Under the no disadvantage test, as I said, all collective agreements and ITEAs for existing employees are not operational until we make a decision that the agreement passes the test. In any event, in terms of those agreements that are operational on lodgement, there are some legal issues that define when agreements are made and things like that. Essentially, provided the agreement has been properly made, which is a slightly different step before lodgement—the act provides different arrangements for that—the view would be the agreement would be operational from the time it was made.
Senator FISHER —If there were examples where workplace parties are suggesting that the authority has simply returned agreements to the workplace stating that they have failed without giving any indication of what applies in the breach, would you consider that to be not your normal practice? Would you rectify it?
Ms Bennett —As Ms Bull was explaining, that would be surprising. I just want to state a difference. In the fairness test, when one had failed, they would have been given an opportunity to change it to increase the rate of pay or reinstate a condition. If they had failed to do that within the time frame, they would then be advised that they had not varied it. Therefore, it ceased to operate. And they were advised that it was backdated and it fell back to this instrument. They were also advised that they needed to make good any back pay that was owed. If they failed to inform us of that, the matter would also be referred to the Workplace Ombudsman. I think that, to be fair to us, if you go through that journey, there were several times that it was very clear to the employer what they needed to do. So I believe it would be very exceptional for the employer to not know that they owed back pay, they needed to vary an agreement under the fairness test or an agreement applied.
In terms of the no disadvantage test, they would be told that their agreement did not pass and was not in operation. In fact, the legislation says until it is passed by us and seven days later. Other than, as Ms Bull explained, for ITEAs for new employees or greenfield agreements, it is pretty clear to them that they know that that agreement does not apply and it is not in operation.
Ms Bull —When an agreement does not pass the no disadvantage test, there are standard letters that we have which get sent to both parties to give generic advice about the sorts of areas which would mean it would not fail, why it did not pass and what would be needed to pass the test. The letters do not provide a rate of pay—a break-even rate of pay—which used to happen under the fairness test.
Senator FISHER —That is right.
Ms Bull —The reason is that even under the fairness test we have had significant feedback that employers were concerned about us doing that because it gave the expectation in some cases that the only way the agreement would be varied was to provide more money, which is not the case. In particular, under the no disadvantage test, which is also different from the fairness test—the fairness test was varied by a unilateral undertaking done by the employer—apart from employer greenfields agreements, all agreements under the no disadvantage test must be varied by agreements between the parties. The way that is done in order to pass the no disadvantage test is not something that the Workplace Authority can advise on. We give a number of different options about how that might be done—for example, providing different benefits or providing a higher rate of pay. In all cases, the procedure is that the senior assessors in the relevant assessment area must ring the employer before the letters go out to explain in a telephone conversation why the agreement has not passed and what sort of issues they could consider in varying it. We did have some feedback from the recent seminars that some employers said that did not occur.
Senator FISHER —Yes.
Ms Bull —We have asked them to report that to us because that is our procedure and it is outlined in our procedures.
Senator FISHER —If a specific employer wanted you to reinstate your previous practice—that is, indicate what might be a break-even rate of pay—would you do that?
Ms Bull —We do that in the telephone conversations. We say, ‘Approximately it is out by X per cent’ or something like that.
Senator FISHER —Okay. Other than that, I understand the situation. My final question around this is: what happens if the Workplace Authority—even you are human—makes a mistake during the assessment process? What happens if, for example, the Workplace Authority incorrectly applies the calculator in respect of a group of agreements at a workplace where you have a number of employees doing identical jobs being paid identical rates for all intents and purposes—the rates of pay are the same? What happens if the calculator has a hissy fit and essentially results in the Workplace Authority making a mistake in assessing agreements?
Ms Bennett —Since the establishment of the authority, in our policy documents we have a reconsideration mechanism where the parties can come to us, explain what their view is and ask us to reconsider the decision that we have made.
Senator FISHER —What happens if in that process the reconsideration et cetera takes the agreements outside the period required for rectification or otherwise?
Ms Bull —We have an administrative process in place when a reconsideration request comes in. We put the process on hold in terms of the letters being generated. Then we do the review. If the review shows that we made a decision that we were not able to make—a good example is often the wrong award was applied, and the legislation is very clear about the reference instrument that has to apply, or there was evidence that was given to us that we did not take into account—in those cases we will rescind the original decision and replace it. For example, if the original decision was that the agreement did not pass, we would rescind that decision and reissue a pass notice, which would mean the agreement continued to operate. Alternatively, in many, many cases, what has happened in review when it does not pass is that the review may change; we just alter the rate. The agreement may still not pass but the rate that we are requesting, for example, in the fairness test might differ from what we suggested in the first instance. We reissue a new notice and give them another 14 days.
There are some times when an assessor might realise that they have pushed a button that generated a letter and it generated the wrong letter. We will reconsider that ourselves in our motion. We will ring the employer and we will reissue the notices to both parties and explain that there has been an error.
Ms Bennett —I will also add to Ms Bull’s comments. We also have an internal audit process where we check—a quality assurance arrangement. So we are also checking ourselves and not just waiting for requests for reconsideration.
Ms Bull —Yes. We review one decision in every 100. So every 100th decision is reviewed by a separate quality assurance area.
Senator CAMERON —Do you use backpackers?
Ms Bennett —Senator, we use young people that have working visas. I do not have the information on the establishment of the—
Senator CAMERON —From the previous government?
Ms Bennett —On the establishment of the Workplace Authority in the period, I think, April, May, June and July 2007 through a recruitment agency, which I think, if I recall correctly, was Julia Ross and another company; I have answered it before. We were provided staff.
Senator CAMERON —These people would be colloquially known as backpackers, would they not?
Ms Bennett —They were referred to in the media as backpackers, yes.
Senator CAMERON —But they were backpackers as would commonly be understood. Is that correct?
Ms Bennett —Some of them, yes.
Senator CAMERON —Thanks.
Senator FISHER —I have one more question. With the indulgence of the committee, I have circulated—
Senator CAMERON —We have come a long way from backpackers.
Senator FISHER —An article in the Age from 16 September quotes Ms Stitt from the Australian Services Union as suggesting that a case that the union has taken to the Workplace Authority means that the union has waited nearly six months to see if some of the new agreements—Labor’s ITEAs—pass the fairness test. ‘The rules were ineffective’, Ms Stitt is quoted as saying. Are you aware of the situation?
Ms Bennett —Yes, I am. We have been engaged on this matter for some time.
Senator ABETZ —In a meaningful way, no doubt.
Senator FISHER —In a meaningful way.
Ms Bennett —No. We disagree with the information and have advised them as well that—
Senator FISHER —It is not quite six months that the legislation has been in, is it?
Ms Bennett —The suggestion of that time delay in processing was not accurate.
CHAIR —What is the accurate story?
Ms Bennett —I need to be a bit careful here because of privacy arrangements. We can go a little bit into this. This were some complicated arrangements that related to Toll Dnata and the transmission of business, which also then relates to what the reference instrument would be, which is bound up in the legislation. It also involved a labour hire agency, so some of those people were employed neither by Toll Dnata nor by the ongoing company. It was a quite complicated assessment. Ms Bull can go a bit into this. But the suggestion in the article is that some of these agreements had been with us for a long time without there being processing. That is not actually true. Can I tell you that as soon as the article came out, there was certainly no delay in any others that were lodged in that time to make sure that, in the time where these issues were going on between the employer and the unions, their agreements were given a priority in making sure that they were assessed before the transmission of business arrangements occurred.
Senator FISHER —The article suggests:
New Labor contracts as bad as AWAs, says union
Workers are ‘losing benefits’
Is that an accurate reflection of the situation, do you think?
Ms Bennett —I can advise you that 30 September—
CHAIR —This article is dated 16 September, so the veracity of the report relates to the time period when the report was made.
Ms Bull —And the agreements with us. The agreements were lodged with us well after August.
Ms Bennett —Yes. One of the two issues about this was the suggestion we had been sitting on agreements. When we went back to the lodgement, we saw that those agreements had been lodged to us by the company, as Ms Bull suggested, on 19 August. This meant that they were well within—
CHAIR —What date were they signed?
Ms Bennett —Pardon?
CHAIR —From the common employee point of view, when were they signed?
Ms Bennett —There is an issue there, Senator Collins, and we are working with the Ombudsman on those issues because the legislation does say that an agreement that is signed must be lodged within a time frame. We are working with the ombudsman on those issues. But the point is this suggestion that we had sat on them for a long time. They were lodged on 19 August.
Ms Bull —In various periods from about then on, from memory. I think there were three lodged in July, and the remaining 119 had been lodged after then.
Ms Bennett —And they are continuing to be lodged and they are continuing to be assessed. I would say a reasonably high proportion did not pass.
Ms Bull —And a number of them were invalid as well.
CHAIR —Was any of this known at 16 September when this story was reported?
Ms Bennett —Yes. We had been—
CHAIR —No. Was it known by the relevant employees?
Ms Bennett —Yes. They had received parties—
Ms Bull —On about 16 September or a few days before, we had made a decision that, I think, 22 of the agreements that we had at that stage did not pass the no disadvantage test and required variation.
CHAIR —But they may not have been alerted to that decision at the time that article was written?
Ms Bennett —Some of these were AWAs and some of them were ITEAs. The ASU was not a party to those agreements because they are individual arrangements between the employer and the employee. The parties to it are required under legislation to receive the same letter. It may have been that that letter had not yet been shared by one of the parties to the ASU.
CHAIR —What was the date of the first of the agreements with Toll?
Ms Bull —This spans across both the fairness test and the no disadvantage test.
CHAIR —I understand that. But, in terms of this class of agreements, I am just curious about how long they were sitting with the employer before they were filed with you.
Ms Bull —I cannot answer that question.
CHAIR —In a sense, you would be responding to this without criticism of you. I am more interested in this article as being a criticism of the overall process. If these agreements had been sitting with the employer well before 19 August, then that is an issue with the overall process, not necessarily you.
Ms Bull —We have advised the ASU of the agreements and the dates we received the agreements. I understand we have also advised, in relation to some where we do not have any record of having had the agreements lodged, that those issues to do with the requirements of the act on lodgement are about compliance and are a matter for the Workplace Ombudsman.
CHAIR —But the question I am asking, which should not affect any privacy issues, is: what is the earliest date of the batch of agreements that arrived with you on the 19th?
Ms Bennett —We will take that on notice. We can tell you that of the agreements—
Ms Bull —I do not have that information in front of me. You are asking what—
CHAIR —You can take it on notice.
Ms Bull —Are you asking what date the agreements were made between the parties?
CHAIR —The date the parties signed them.
Ms Bull —I do not have that. You are asking what date they were signed between the parties. I do not have that information in front of me.
CHAIR —But you would have it on notice, would you not?
Ms Bennett —We can take it on notice and talk to the ombudsman. But, of the agreements in question here, there were 122 AWAs of this going around. There were 119 ITEAs. It also involves some proportion of agreements by a labour hire agency where those people were employed. Not all of those from that labour hire company or all of those employees worked full time as well in that arrangement. We had been working with the parties on AWAs and the ITEAs at various times since 24 July, which is when we started our first contact with them. So it has been going backwards and forwards.
Ms Bull —My recollection is that all agreements lodged for Toll under the fairness test had already been completed when it was raised with us. At the time we had only received three agreements in relation to the no disadvantage test. The rest had come in subsequent to the issue being raised by the ASU. I understand there may be some issues about agreements relating to the labour hire company that may not have been settled under the fairness test at the time the ASU raised it.
CHAIR —Sorry, Senator Fisher. That was an issue that had been raised with me.
Senator FISHER —I think my good colleague Senator Abetz has a question. I have completed mine.
Senator ABETZ —Thank you very much. You told us that you select one out of 100 to test for robustness. Did you tell us what that sampling revealed? How many were found to be defective?
Ms Bennett —Where we had made an error in the assessment?
Senator ABETZ —Yes.
Ms Bennett —I do not have that information with me, Senator. I can take it on notice.
Senator ABETZ —If you would not mind.
Ms Bennett —Regarding our quality assurance, Senator Collins asked a question on notice about the definitions attached to the chart. I have provided those. While it does at the top look as if it relates to table 2, we can provide the definitions for the first table, which is the fairness test. Those definitions—
Senator ABETZ —So the document attachment applies only to table 1?
Ms Bennett —Table 2.
Senator ABETZ —Only to table 2.
CHAIR —Because it is the no disadvantage test rather than the fairness test.
Ms Bennett —Where it is much clearer on the fairness test. But we will provide an explanation of those terms.
CHAIR —Are there any further questions?
Senator ABETZ —No.
CHAIR —Thank you very much.
Australian Industrial Registry
Senator Ludwig —Senator Collins, I was not here earlier. I understand that Comcare has been dealt with?
Senator Ludwig —And the Australian Industrial Registry?
CHAIR —We are about to do them now. And the last agency, then, will be the ABCC. Welcome, gentlemen.
Senator HUMPHRIES —I want to ask about the likely time frame for the completion of the work modernisation process, please.
Mr Williams —The commission is continuing to advise that its time frame is unchanged. Completion is by 31 December 2009.
Senator HUMPHRIES —So what stage has the process reached now? Have you any awards that have actually been modernised or completed?
Mr Williams —The industries identified as the priority industries by the commission have had draft modern awards published and have entered a consultation phase. The preparatory work is being undertaken, including consultations for stage 2 of the award modernisation process. I might add, perhaps to pre-empt the next question, that a more detailed timetable for the final two stages—3 and 4—has also now been announced by the commission.
Senator HUMPHRIES —Is the expectation that you will produce in stage 4 all of the awards in one tranche as opposed to sort of beginning the process of producing some awards over a period of time?
Mr Williams —Stage 4 is not as you characterise it. Stage 4 is the final tranche of industries. By that stage you will have then had draft awards progressively available all the way through to 31 December 2009. You will have all of them in readiness for the commission to make its final decisions about finalising those modern awards—there are too many ‘finals’—to take effect on 1 January 2010.
Senator HUMPHRIES —So you are telling us that you expect to be able to have all of the awards drafted in time for them to be adopted and made effective as of 1 January 2010?
Mr Williams —That is the understanding that I have from the commission, yes.
Senator HUMPHRIES —But at this stage you have not completed the process with respect to any individual award. You do not expect to do any of that in respect of any particular award until much later in the process?
Mr Williams —Because none of the awards will be operative until 1 January 2010. In that sense, none of the awards are finished.
Senator HUMPHRIES —Well, a draft of the award is what I mean.
Mr Williams —But there are draft awards for the 14 priority industries already, and consultations as we speak are occurring on those draft awards. I think we have had submissions from the parties on them. As I said, there is a detailed timetable out there for stages 2, 3 and 4 for all the other industries. I should identify Mr Nassios, the General Manager of Statutory Services, immediately to my right and, with him, Dennis Mihelyi, our Chief Financial Officer. I have just been reminded that when I said they would all be finished, the advice we have is they will be finished by 31 December 2009. The commission’s date to actually achieve that is to finish them by 19 December so that they can be assured that it will all be in place by 31 December.
Senator ABETZ —That is so you can have Christmas off, and I do not blame you.
Mr Williams —Well, I would not wish to conjecture what the commission’s considerations were. But the date they have set is 19 December.
Senator HUMPHRIES —That is not to imply that from 19 December the commission will begin the process of approving these revised awards, I assume. There would be a lot of work to do between 19 December and Christmas, I assume.
Mr Nassios —Senator, can I just correct that slightly. The date of 19 December is this year. That will be the date for the priority awards.
Senator HUMPHRIES —Right. That makes a lot more sense. I was going to say—
Mr Nassios —So those 14 will be finalised on 19 December.
Senator HUMPHRIES —So throughout next year we will be seeing the approval by the commission of those awards that have been prepared by 19 December this year?
Mr Nassios —By 19 December, there has been a process that already has been proceeding in respect of what is referred to as the priority awards. There are 14 of them. The draft of them has already been distributed. There is currently a consultation process over the draft. That is happening at this very moment. The intention, according to the timetable issued by the commission, is that by 19 December those—
Senator HUMPHRIES —This year?
Mr Nassios —Yes. They will be finalised.
Senator HUMPHRIES —Those 14?
Mr Nassios —Yes.
Senator HUMPHRIES —How many others remain to be done?
Mr Nassios —It is not an easy question, because how the commission has decided to do this is by looking at the industry listing that the commission itself has. There are about 110 industry listings. It is looking at dividing that 110 over the course of three further stages. The second stage has also already commenced in at least the preliminary consultation.
Senator HUMPHRIES —Okay. We will watch that with interest. I read in the annual report that you have a target of 85 per cent of the financial returns of registered organisations being produced within seven months of the end of the financial year. The actual target that was reached for 2007-08—I assume this refers, therefore, to those that were lodged within 2006-07—was only 65 per cent being lodged in that time frame. Can you explain to me what you believe is the reason that you have not been able to reach that 85 per cent target?
Mr Nassios —The primary reason is a staffing issue. Unfortunately, while we do our best to try to remind organisations of the obligations that they have in terms of timetabling, we do not tend to succeed as often as we would like. So we have to engage a hastening process to follow up that type of process. Unfortunately, this year we have been a bit short staffed and we are trying to remedy that at the moment by recruiting a couple of extra staff, which will help us get over that for the next year.
Senator HUMPHRIES —But being short staffed will not inhibit your reaching your target with respect to award modernisation?
Mr Nassios —No. The registry has certain functions in which it supports the commission as an administrator. But it also has certain functions as statutory responsibilities. The financial returns are, in essence, its statutory responsibilities. It is a group of people of approximately 20 or so that has functions in respect of financial returns, elections and rules of organisations. So that is a discrete group of persons within the registry.
Senator HUMPHRIES —Finally, I want to try to clarify something that was raised at the last estimates committee by Senator Fisher. The budget papers make reference to the registry being provided with an additional $13.3 million over four years to rationalise and simplify awards and to lodge collective agreements. I would have thought it is not the role of the registry to lodge agreements. It is the role of the registry to process agreements. Is that just a poor choice of words?
Mr Williams —We hope that we expressed last time and then in answering the question on notice with absolute clarity that that was a misprint by whoever put together that publication.
Senator HUMPHRIES —I am not sure that that is what was achieved last time. I am happy with that. Thank you very much.
CHAIR —There being no further questions, thank you very much.