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STANDING COMMITTEE ON EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
29/04/2009
Fair Work (Transitional Provisions and Consequential Amendments) Bill 2009

CHAIR —We welcome to the committee the Australian Services Union. Thank you for your submission. Do you have any amendments or additions to make to that submission?

Ms White —We do. We want to table a further short submission, which I refer to, if we could. It contains a number of examples and really reiterates a number of matters that we have talked about previously and some things that have happened since we put in our submission that we think it will illuminate.

CHAIR —Thank you. We invite you to make an opening statement to be followed by questions from the committee.

Ms White —Thank you, Senators, for this opportunity to appear on behalf of the Australian Services Union. We welcome this opportunity to make further oral submissions to the committee and to respond to questions that you may have. We hope to be brief in our opening remarks. We have filed written submissions and they deal with four main issues. Firstly, we talk about the impact of award modernisation on our members and the need for better transitional protections to ensure that no employee is worse off as a result of award modernisation. Secondly, we talk about the continuing substandard AWAs, ITEAs and non-union agreements. We also raise, thirdly, special workplace determinations for low-paid employees and, fourthly, the transitional arrangements for non-federal system employees.

I will first talk about the question of award modernisation, which I have been known in other forums to describe as the most soul-destroying process that I have ever been engaged in during my industrial career—and I have dealt with number of significant matters, not the least of which were the collapse of a major airline and the Kennett era. This has been a fairly soul-destroying process in that after the two-year duration and then the five years beyond that for the enterprise awards, the best we can hope for if we are going to be 100 per cent successful is to keep what we have. And we are probably the union with the most experience in this process in that we have filed 60 submissions and have had to consider every single industry that the Australian Industrial Relations Commission has dealt with. When I say that the process has been soul-destroying, I do not necessarily blame the government, but what I do say is that the way in which it has been enacted by the Industrial Relations Commission and the process that has been adopted have been lacking in a number of respects.

As I have drawn to your attention, we have prepared a further document to bring the committee up to date with developments in award modernisation, especially in the way that they affect those employees who will be employed under the terms of the modern clerks award. If I take you to the document, it has a summary in the first 13 paragraphs and then from pages 4 to 29 we go through what has happened to the modern clerks award. On the last two pages we give an example, which I will take you to shortly, about some of the issues that arise from the take-home pay orders issues. The document deals with the question of employees’ disadvantage arising from award modernisation. The ASU has already been—and we expressed this last time—concerned with the lowering of standards in modern awards, particularly as a result of cuts to conditions of employment and the imposition of an exemption level in the awards and in particular in the Clerks—Private Sector Award.

You might recall that last time we raised with you the clerks modern award. I take you to paragraphs 13 to 26, starting on page 6, of the supplementary document. That gives you an extensive list of matters that have been taken away from a number of employees—in fact, the majority of employees—who receive over $851 a week. Anyone who earns over $851 a week will no longer have access to matters on that list. The problems do not stop there. They have now been exacerbated by cuts to the conditions for call centre employees employed under the modern clerks award and the modern finance award. They now have lesser terms and conditions than other employees working under the same award. We describe those cuts at page 10, paragraph 25. So what has happened since we last met with you and described those earlier cuts is that the commission has decided to impose on both of these awards, the modern clerks award and a modern finance award, for any person working in an in house call centre, a set of conditions that they have never had imposed on them, anywhere in Australia, before.

It does not stop there. It happened without any submission either from the employees or from the employers. It just happened behind closed doors without any warning. As it now stands in relation to the clerks award, up to three-quarters of a million employees are potentially affected by the commission’s persistence in stripping the award conditions from clerks earning no more than $851 per week. At our estimate, about 340,000 may now be affected by the extended ordinary time hours to include Saturday mornings. Our best estimate is that about 280,000 in-house call centre employees will have extended ordinary hours on Saturday mornings and those various conditions I pointed to on page 10, clause 25, which they never had previously. As you will see, that is not just a list about working on Saturday mornings; they are substantial changes to the penalty rates that apply. It is ordinary time, and it has never been ordinary time on Saturdays for clerical and administrative employees. So these are not insubstantial changes. Because the clerks award appears to be considered in every single industry, it is an ongoing process. I cannot say, as I sit here today, that there will not in fact be more changes depending on what the next industry round brings towards us.

The transitions bill’s only remedy for these cuts in pay and conditions is the proposed take-home pay guarantee, but we see it as no guarantee at all. I draw to your attention that, despite what the Australian Industry Group may say to you here, the day after this bill was introduced the employers, including the Australian Industry Group, in the airlines industry award modernisation proceedings that we have been involved in quite heavily were urging the commission to relax its approach to award modernisation since the take-home pay orders could fix the problem. They said on the record in the commission on that day exactly the opposite of what they have said to you on page 13 in their written submission. As it stands at the moment in the airline operations award, the commission is considering the position that they put at that time. This is clearly not the case, because the orders apply to existing employees only, not all employees in an industry or occupation. It covers money amounts only and, therefore, cannot compensate for loss of conditions such as having to work on Saturday mornings and other non-financial issues, and it does not apply if an employee changes jobs or is promoted.

On that last point we have taken the opportunity to do one calculation for you—one of what we would expect to be many—and that is at pages 12 and 13 of our supplementary submission. What we have done here is extract what for a person who is a casual clerk at level 2 currently—

Senator ABETZ —Can I just interrupt you so I can get a feel for what sort of job a casual clerk level 2 would be. What is a real life example that will give me some idea of it? Would it be a bank teller? If you cannot think of one, proceed.

Ms White —Off the top of my head, I cannot think of one.

Mr Harvey —Telephone betting clerk.

Ms White —A casual telephone betting clerk would probably be a level 2. I think that is probably right. Currently, if they are at level 2 they would be casual. Say they work 30 hours per week in Victoria. They have enterprise agreements, but that is the sort of work that it would be—on the phone. Say they were under the Victorian clerical administration award at level 2. At 12 months they are on a second level. We have extracted what they would be paid if they were on the award as at today. As of 1 January, because of the change in the award, they would translate to a level 1 year 2. You can see from our supplementary submission that their rate of pay would go down to $16.05 under the take-home. Consequently, if they work 30 hours per week, their money would go down and their yearly pay would go down.

The casual loading, as you see, was 33⅓ per cent for clerks in Victoria. As of 1 January, it goes down to 25 per cent, not 33⅓ per cent. In New South Wales it was 28 per cent and it goes to 25 per cent. You can see that because of the award modernisation there is a gap. That would lead to a take-home pay order of $2,806 based on those figures. We have presumed that casuals are covered. You may not know, but casuals are often regarded as on daily hire. It is unclear to us whether or not take-home pay in the act applies to a casual. We presume it applies to a casual, but it does not actually say. If you said that they were on daily hire, theoretically this might not even apply at all and they may not be entitled to it. But let us say they are.

CHAIR —You indicated that the take-home orders do not apply to new employees. If someone is on a casual hire process, what is to stop the employer from simply saying, ‘I’m going to finish you up now, have a day’s gap and then start you again’? Is there anything to stop that?

Ms White —We cannot see that there is anything to stop that. I guess it will be how this is interpreted and what an existing employee—

CHAIR —And if it does not apply to new employees you then have that absolute incentive to put that person off.

Ms White —You could. We have presumed that that incentive is not there. We have taken the high moral road and hoped that nobody is going to take that. If you had been a casual for 20 years and you had been employed for 30 hours a week as a regular casual, we would hope that people would not. I am in the business of hoping, perhaps. Employers frequently disappoint me. But let us say they do not. We take this other thing. There is another way in this act that they can get round it. All they have to do is promote a person from level 1 to level 2. Because they have been promoted, because of the way the transitional bill works, they could promote them on 2 January to level 2 and that employee would not be entitled to a take-home pay order. But the way in which the award has been structured, they would still be on less money than they would have been had it not been for the award modernisation.

CHAIR —In this example you get promoted to lesser pay.

Ms White —Exactly. You could be promoted on 2 January and you would get less pay. There are countless examples of this, but this illustrates it. There will be plenty of take-home pay orders and issues that arise. As we have said, the ASU has never accepted the position that no-disadvantage rules should only apply to existing employees. We oppose any fall in the safety net for any class of employees. We just do not see any justification for it. In addition, we believe that disadvantages not restricted simply to money matters—conditions such as not having to work on Saturday mornings as part of the ordinary hours of work—have to be considered as well. These are equally valuable to many employees. As we say in paragraph 1 at page 4 in our supplementary submission, our estimate is there are 340,000 clerical workers in South Australia, Tasmania, ACT and Queensland who can now be compelled to work on Saturday mornings and there will be no take-home pay order for that loss.

I turn now to the substandard agreements. The union’s submissions deal also with continuing substandard agreements, which the bill will allow to exist indefinitely unless terminated. The ASU opposes this and has proposed a means for testing these agreements and setting them aside if they would fail the new BOOT. The ASU supports the submissions of the ACTU in this regard. The ASU also has members who were forced onto substandard AWAs in the dying days of Work Choices, notably those at Qantas Valet Parking, about which we have spoken to the committee before in the Senate hearings on the Fair Work Bill. The bill proposes a certain drop-dead day for instruments applying to non-federal system employees. We think that it is in the public interest that there be one minimum standard for all agreements going forward, not a range of standards for employees unlucky enough to have been forced onto poor standard agreements at some point during the Work Choices era. Our submissions talk about how this can be done.

I turn now to special low-pay determinations. The ASU has many members who are low paid, at least in the sense proposed by the legislation—that is, they are paid substantially on the award. This will be the case particularly in the social and community services sector. This is because the employers of those members have no capacity to bargain because they cannot adjust their income in response to pay higher wages because they are funded by government, for example.

The act makes certain provisions for assistance to such employers in the bargaining process. The ASU did welcome those provisions; however, now the bill limits access to special low-pay determinations to employees who have never been covered by a collective agreement, according to the explanatory memorandum. We submit that this is just plain wrong. Why should employees who otherwise might be entitled to these provisions be denied because they once had coverage under a collective agreement?

That agreement may have only dealt with only one or two matters or may have been a greenfields agreement, which they themselves did not enter into. Agreements that have covered one or two matters, might have had salary sacrificing for superannuation or salary-packaging arrangements or it may have been a short-term arrangement to assist an employer in difficulty. It may have been an agreement which simply reflected award coverage so it applied nationally to otherwise state award based employers and employees. There are a number of reasons why such an agreement may have operated in the past, but the employees now finds themselves paid substantially on the award and otherwise entitled to specific assistance to enable them to get a special determination. The ASU submits that item 22 of schedule 7 should be scrapped.

Finally, I turn to non-federal system employees. Clause 20 of schedule 3 of the bill proposes that transitional instruments based on the C&A power will cease to have effect on 27 March 2011 to the extent that employers covered by them are not federal system employers. This date is not so far away but there is no resolution of outstanding issues for non-federal system employers in sight. The ASU represents many such employers, particularly in local government, social and community services and elsewhere. We have many awards for these employees based on the C&A power.

Ongoing award and agreement coverage for these employers must be resolved urgently. The local government, the social and community and the not-for-profit sectors are major employers. It is not in the public interest to have the status of these sectors in limbo any longer. The ASU is aware of the constitutional issues involved, but we cannot resolve them ourselves. This is one of the biggest transitional issues facing the new system, but it is not addressed. The ASU notes that certain actions have been taken by some state governments about local government, but not by others. The union’s position is that in each state the whole of each sector must be in either the state or national system. There cannot be any uncertainty or half-and-half coverage. This would not be in the public interest. It is time we say for something to be done about it to eliminate the uncertainty.

CHAIR —The original award modernisation request set a fairly tough objective for the commission to go through this process with the aim of not disadvantaging employees or employers. You have given us some very clear and I think good examples to consider where you say there is quite a significant disadvantage to employees. Is it a matter of swings and roundabouts though? Are people compensated in other ways or do you say this has been a very one-sided result against the members you cover? We do have employers saying that there are all these extras and there are no swings and roundabouts. In fact, we have not heard anyone come and tell us that they are happy with the process yet, but we have not finished the inquiry.

Ms White —I would be surprised if the Australian Industry Group does not punch the air over the contract call centres. They have been saying publicly in the papers that it was the greatest thing since sliced bread. Who would not? They never in their wildest dreams thought that would happen. No-one in their wildest dreams would have thought there would be a policy where $100,000 was the threshold and that would find a clerk who earns $851, or less than half of $100,000 a year, exempt from things like dispute-settling procedures, ordinary time hours and shift penalties. Who would have thought that?

So this is not an outcome that anyone would have predicted. We did not predict it. All we can say is we probably have the most experience of any union at the front line in every industry because of the clerks award and we have not seen a net gain. In fact, as it continues on it gets worse. We thought we had reached the high-water mark with the exemption level at $851, but we did not realise that the call centre issue would then be thrown into our estimate of 280,000 people who work in call centres—and that is probably conservative because it does not even say what a call centre employee is. So we did not expect these sorts of results. On a number of occasions we did not even have the opportunity to argue against it, because it was not in the exposure draft and it appears in the final draft, when no-one had submitted it. So this is not a process that we envisaged from the policy position, nor what the minister put to the commission.

Senator ABETZ —If I may, what you have put to us is very interesting, and I suppose in my years as a lawyer I learned that there are always two sides to a story. Whilst the Australian Industry Group might provide some commentary on this, I am wondering about major call centre employers. Would that be Vodafone? Who would be one of the major call centre employers?

Ms White —There is a contract employer. A significant number of employers have in-house call centres.

Senator ABETZ —This is what I am trying to get at: I would be very interested in hearing from a major employer of call centre employees and a major employer of clerks as to what they would say to your submission and if you could nominate potential employers in those two categories. If they are willing to say as well that they did not submit anything along this line and they were as surprised as the ASU then I would be interested in that, but unfortunately we do not have a submission from those specific employers. Perhaps you want to think about it and let committee secretariat know, because what I would be proposing, Chair, is that the committee secretariat then forward that to those employers to see if they would be willing to respond to the submission. I think, in fairness, there are some live issues here, on the face of it. That is all I am saying.

Mr Harvey —It might be helpful if I unpack a little what happened in the call centre industry award. In one sense, we and the employers—which in this case means the Australian Industry Group—were absolutely united in what we asked of the Industrial Relations Commission in the award modernisation process with regard to this particular industry, which I think was information, communications and technology. There were a number of subsectors in that industry, but one of them was the contract call centre industry. A number of unions, including the ASU as a main union in this area, and the Australian Industry Group some years ago negotiated the terms of a specific award to cover the contract call centre industry. There were a couple of matters in that that ended up being arbitrated, as I recall, by the commission, but by and large the parties—the unions, and the employers represented by the Australian Industry Group—came to an agreement that there was a need for a specific award to operate in the contract call centre industry.

So the contract call centre industry is a very specifically defined industry. It applies to those call centres which are not in an industry of their own, if you like. So they are not in the airline industry or the finance industry but they are organisations which take call centre type work on contract for a third-party employer. The award expressed that to be in that industry and covered by that award you had to have more than one client, so you could not just be in the finance industry or in the airline industry and operating a call centre. So it was the industry of contract call centres. Ironically, it only had five major respondents, and we can certainly give the committee their names if you like—it is a matter of public record. It was also a common rule award in Victoria, but it applied to a very clearly defined sector.

The industry parties—us in this case and AiG—went to the commission and said, ‘We’d like you in this award modernisation process to make a modern contract call centre award.’ I was the advocate at the time and we, the industry, were united on our side of the table about what that should be. The commission in its exposure draft of awards decided not to make a contract call centre award but actually took the flexibilities and the provisions of that award, designed for that one particular industry, and decided to put them en masse into the clerks private sector award and then apply them to every type of call centre employee, although without defining ‘call centre’.

We went back in the second stage of the process and said: ‘We think you’ve got that wrong. We actually want a contract call centre award,’ and AiG said the same thing. At the end of the day the commission in stage 2 awards made a contract call centre award, but they still imported all the special conditions that had been agreed or arbitrated for the particular industry of contract call centres. They still put the flexibilities from that award, particularly as it relates to weekend work, as we have indicated in our supplementary submission, in the clerks private sector award. They then said, ‘These apply to all call centre employees,’ although they do not define what a call centre is, but you can work it out a bit from the classification structure.

The commission have taken what the industry—us and the employers covered by the contract call centre award—were happy about and they have applied it to everybody who might be considered to be working in a call centre, which is radically different to what the industry asked for. Nobody asked for that, which is the point we have made in our submissions. Nobody actually asked for it but that is what we have, for some unknown reason. It is bizarre to us and has wide ramifications for anybody who might be considered to be working in a call centre and covered by the clerks private sector award.

Because the commission did the same thing with regard to the finance industry, if somebody works in a call centre for a bank, an insurance company, a credit union or a health insurance company—which are to be covered by the finance sector modern award—they are now subject to these different terms and conditions of employment, which they did not have before, based on conditions which applied to five employers in the contract call centre industry. That was a very long-winded answer but I think we need to explain what has happened there. We think that no employer group actually said that, and we certainly did not say that is what we wanted as an outcome from the award modernisation process.

Senator ABETZ —It may have been a long explanation but I for one am better informed as to the circumstances and I thank you for that. I now want ask you possibly a more provocative question. This is what the Labor Party said they would do at the last election: award modernisation, with the AIRC the umpire. Don’t you have to cop it sweet when the umpire comes down with a decision that is not necessarily to your liking? Or are you saying that there was something else in the Labor Party’s promises at the last election which would have militated against such an outcome as you are now concerned about?

Ms White —The ASU does not think that the way in which the policy has been implemented by the Australian Industrial Relations Commission was envisaged in the references. There were not even one or two lines of explanation as to why such massive things occurred, which is what happened with the exemption level decision, in anything that I read. We could not possibly anticipate it happening and we certainly do not believe it was the intention. We think there is a communication problem with the commissioning, in that they do not appear to understand the impact on the ground that this is going to have.

Senator ABETZ —So the outcome, about which you have expressed concern, would not allow the government to say that no worker would be worse off under the new policies. Workers clearly are worse off, as you have set out.

Ms White —This has still got seven months to go, and I am in the business of hope. As far as we are concerned, award modernisation will not cease for the Australian Services Union and our members and the people covered by the awards until midnight on 31 December 2009, so it ain’t over till it’s over—because our experience has certainly shown that the clerks award is a live issue.

Senator ABETZ —All right. Can I say that, as things stand as at 10.20 am on 29 April 2009, under this regime workers will be worse off than they were before?

Ms White —If at 10.20 am it applied to anybody, yes they would be, but at the moment it does not apply to anyone and it will not apply until—

Senator ABETZ —And you do live in hope.

Ms White —I live in hope. I am an optimist.

Senator ABETZ —Thank you for that. In your supplementary submission you talk about 1.1 million clerical/admin workers in the private sector. In general terms, what is the percentage of your coverage of the admin/clerical work force in the private sector?

Ms White —Not 1.1 million.

Senator ABETZ —Is it roughly 20 per cent? Less? More?

Ms White —We would have to look at the sectors. Our density is different in different sectors, and the 1.1 million private sector employees also include other people who have coverage, so it includes the Finance Sector Union. I do not know what the density is.

Senator ABETZ —If you do not have the figure to proffer, that is fine.

Ms White —I do not have the figure.

Senator ABETZ —I have been reading through the submissions, and, unless I have missed something, nobody has submitted in relation to the conscientious objection clauses that currently stand in the workplace relations legislation. As I understand it, they will be transported into the new legislation without amendment. Have there been any difficulties from your organisation with those conscientious objection clauses as they operate?

Mr Harvey —Not in our experience. They are relatively little used. You are referring, Senator, to the ones that enabled an employer to gain a conscientious objection certificate?

Senator ABETZ —Yes, and also employees, as I understand it.

Ms White —I have never seen it.

Mr Harvey —I have been doing this job for a long time but I can recall only one or two employers that our organisers would have visited who sought to use that exemption provision, and that would have been a very long time ago. I cannot recall anything like that in the last 20 years.

Senator ABETZ —So basically it is operating without any concern, at least to your union.

Mr Harvey —I do not think we could point to a practical example. On the other hand, we thought the previous provisions were unfair and unwarranted and could be used, but I cannot point you to an example of where they were being used to deny right of entry for unions. But it was certainly—

Senator ABETZ —Sorry, I am not talking about conscientious objection to right of entry. I am talking about the conscientious objection clauses in relation to being a member of an employer or employee organisation.

Mr Harvey —It is so rare.

Senator ABETZ —It is of no consequence to you?

Ms White —It does not fall within my experience.

Senator ABETZ —It has not been on your radar.

Ms White —No.

Senator ABETZ —Thank you very much for that.

CHAIR —We are running out of time but we still have a couple of minutes.

Senator HUMPHRIES —I have a couple of clarification questions. On the lost conditions you refer to on page 6 of your supplementary submission, are you saying that these conditions in that second column have been adversely affected, as in reduced in effect or something, or are you saying they have been lost altogether?

Ms White —What the new clerks award says is that if you earn over $851 a week those things do not apply to you.

Senator HUMPHRIES —So you do not get a meal allowance, a vehicle allowance, a first aid allowance, a living away from home allowance—all those things just disappear?

Mr Harvey —Nor access to the dispute-settling clause in the award. Yes, they are gone completely. The way the award has been phrased by the commission, it simply says at clause 17.1, ‘except as to the provisions of’ redundancy, superannuation, annual leave, personal carer’s leave and compassionate leave, public holidays and community service leave, the award ‘will not apply to employees employed by the week who are in receipt of a weekly wage rate in excess of 15 per cent above’ the level 5 wage rate, which is $740. Fifteen per cent above that is $851. So the award does not apply. You are taken out of the award coverage except with regard to those five matters, which are basically matters which are in the National Employment Standards or superannuation, which is a legislated entitlement in the main. So, yes, the award is gone completely; dead.

Senator HUMPHRIES —My understanding of award modernisation was that it meant you would take a range of different employment conditions, salaries and so on in a particular industry or field and you would try to get a standard, so not the highest or lowest common denominator but a midpoint was chosen to embrace all the particular occupations within the particular industry or sector. If that was the principle that was being applied here, there must be somebody else somewhere else who is benefiting from the reductions in conditions which are being imposed on these particular workers. Is that the case, to your knowledge?

Mr Harvey —No. In this particular case what the commission has done is take an exemption level provision from the New South Wales NAPSA, the New South Wales state clerks award, and applied it to everybody who will be employed under the terms of this modern award in the future. So if the situation has not changed for employees in New South Wales who were previously exempted from the award, it has changed adversely for everybody else in those circumstances in every other state in the country.

Senator HUMPHRIES —So NAPSA in New South Wales was at the bottom of the rung of comparable conditions around the country?

Ms White —It was. In Victoria, for example, there was not an exemption on anything. There was a range, but this is the lowest common denominator. We will also argue that whether or not the NAPSA delivered exactly what is here is another matter, too.

CHAIR —It is a bit puzzling for me. Are you actually saying that at $851 a week you are still bound by the award but you get no protections from it and no conditions from it? You are not actually award free, as the $100,000 threshold is.

Senator JACINTA COLLINS —What was the basis of that exemption in the New South Wales NAPSA?

Ms White —It was lost in the mists of time.

Senator JACINTA COLLINS —So this is different to the $100,000 exemption, but for some reason the commission has applied this in the same fashion that was envisaged for the $100,000.

Mr Harvey —No, and it is a very important question. It is not applied in the same fashion. With regard to so-called high-income employees, there is the notion in the act of a proper bargain—that is, the employee must be offered a guarantee of certain earnings over a 12-month period and if the employee accepts that offer then they are deemed to be not covered by the award because they have got that guarantee. With regard to the exemption rate, it is completely different. There is no guarantee and there is no bargain. The employee gets no choice as to whether to accept or not. It is just if you hit $851 week, or $44,000 a year, you are out of the award except for those five conditions. End of story.

CHAIR —But that is an absolutely clear contradiction of government policy.

Mr Harvey —We would say so.

Ms White —We would say so, yes, and we have raised this at every opportunity. We have tried to re-litigate it with the commission because it just seems completely against government policy. As Mr Harvey has explained, there are get-out clauses even for people who are over $100,000. This is targeted at low-paid, female, clerical and administrative workers in a way that is not seen in any other award. That is why this is soul destroying. We are not alone in this in that something similar has happened to our friends in the finance sector.

CHAIR —That will give us something to ask the department.

Senator BILYK —Do we have an explanation for this? I know how they did it; I want to know why they did it.

Ms White —There are one or two lines in a decision.

Mr Harvey —This was introduced by the commission in its 19 December decision, which was the final decision about the clerks private sector award. It is fair to say that one or two employer groups, particularly one in New South Wales, said they wanted the exemption rate that was currently in the New South Wales award maintained but other employers either did not address the issue or they supported, for example, annualised salary courses, which have been a feature of AiG submissions. They were happy with an annualised salary clause within, for example, the contract call centre award and the telecommunications services industry award but did not really advocate—and AiG can correct us if we are wrong on this—exemption rates as such. It suddenly appeared.

The commission’s 19 December decision last year said, ‘We’ve included an exemption rate with regard to overtime in the clerks award, and we will mention that again later in the decision’, but when you go to the clause in the award, which I just read out, which has been maintained, it is not an overtime exemption rate, it is an ‘everything other than those five conditions’ I mentioned. But there is actually no explanation as to why. As Ms White indicated, we re-argued that case—I got quite passionate about it back in February—

CHAIR —So, it is not a mistake? You have actually had an opportunity to put it to the commission?

Mr Harvey —I thought it may have been a mistake when they said ‘here is an overtime exemption rate’ and then did something different. I genuinely thought it may have been a mistake. But we did argue the thing quite passionately and in the 3 April decision they refer to the fact that we were a bit concerned about it. So they certainly know what we think about it. But in the 3 April decision they said, ‘We have heard from the ACTU on that’—the ACTU made submissions on behalf of the Financial Sector Union and us—’and from the Australian Services Union but we do not have enough evidence on the matter before us now to completely remove the exemption rate. We will have to deal with that at some point in the future.’ So there is a possibility. This is the hope that we are talking about—that we will address that point at some time in the future. We are not exactly sure what the mechanism for that is at the moment but it is not a mistake. It is just based on importing what we would say is an antiquated provision from one state award, in effect, and imposing it on everybody under that award in terms of the clerks private sector award and then, in the case of the finance sector award, extending it to everybody in the finance industry—400,000-odd employees are covered by that award. In that case I think there was an exemption rate in a credit union’s award which applied to one or two per cent of the people in that industry. We certainly do not think it is a mistake but you cannot find detailed explanations from the commission. That is not the nature of these award modernisation decisions. They just say, ‘This is what we have done.’

Senator HUMPHRIES —You said this process will continue until the end of the year; are there further determinations to be made by the commission in respect of your members in that process?

Mr Harvey —There are. The stage 3 award matters have got to be dealt with—the clerks award. In every private sector industry the clerks are dealt with. In stage 4 there are issues—they may determine to roll-in other industries, for instance the legal industry has not been dealt with. Whether our submission about the legal industry is successful or whether they decide to roll it into the private sector clerks award, I do not know at this stage. It is a live issue.

Senator HUMPHRIES —But will not mitigate the sort of evidence you have put in front of us about the wholesale loss of conditions?

Ms White —Well, it could make it worse! Based on what has happened at every stage, we are not going upwards; we are going down. So yes, it is potentially going to get worse. I am an optimist so I have hope, but it could get worse.

Senator ABETZ —Just to make it clear, Mr Harvey, exemption rates have been part of the clerks award for some time. Is that right?

Ms White —No, Senator. They have been part of the New South Wales clerical NAPSA, if you like. That is where the provision comes from. One state award had an exemption provision in it like that; the clerks ACT award had a partial exemption clause in it. The coverage of that is about 15,000 employees; that is our estimate. In all of the other states and territories there was either absolutely no limitation on the award coverage, other than by reference to the classification structure, or there might have been an annualised salary clause, which we would submit is a creature of a completely different complexion, really. It is not an exemption clause; it is more of the nature of the bargain that I was talking about before where, under certain circumstances, you could agree to sort of roll-up certain terms and conditions and do them on an annualised basis. We say that the commission has taken the provision from one award and applied it nationally, basically, which we think is inappropriate.

CHAIR —Thank you for your very interesting submission, and thank you for your supplementary submission and your presentation to the committee today.

Proceedings suspended from 10.37 am to 10.54 am