Secure Employment Test Case [2006] NSWIRComm 38

Secure Employment Test Case [2006] NSWIRComm 38 | Case summary | Zoe

Australian Municipal, Administrative, Clerical and Services Union v Greater Dandenong City Council (2000) 101 IR 143 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union Limited v BHP Steel Long Products Division re Offer of Employment NSWIRComm 372 Bootmakers and Heel Bar Operatives &c., (State) Award [2001] NSWIRComm 114 Clerks (State) Award (unreported, Glynn J, 22 March 1991) Clerks (SA) Award [2003] SAIRComm 41 Clerks (SA) Award Casual Provisions Appeal Case [2001] SAIRComm 7 Corrections Health Service Nurses' Award, Re (1999) 90 IR 235 Doyle v Sydney Steel Co Ltd (1936) 56 CLR 545 Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority (Insp. Ch'ng) (1999) 90 IR 432 Electrical Contractors Association of New South Wales v Electrical Trades Union of Australia, New South Wales Branch and Anor (2003) 130 IR 284 Electricity Commission of New South Wales v Clissold [1981] 1 NSWLR 284 Ermani Constructions Pty Ltd v Australian Workers Union, NSW Branch (1988) 23 IR 346 Greater Dandenong City Council v Australian Municipal, Administrative, Clerical and Services Union (2002) 111 IR 121 Isaacs v Kelly Services (Australia) Ltd, AIRC (U2005/1829) Jones v Dunkel (1959) 101 CLR 298 Kellogg (Aust) Pty Ltd v NUW [2003] NSWIRComm 157 Koppe v Compass Group (Australia) Pty Ltd, QIRC (B460 of 2004) Lend Lease Hotel Intercontinental (Stage 1) Project Award and Another [2003] NSWIRComm 314 Metal, Engineering and Associated Industries Award 1998 Part 1, Re (2002) 110 IR 247 Morts Dock v Federated Ship Painters and Dockers (1954) 79 CAR 254 NSW Department of Community Living and Residential (Interim) (State) Award, Re (2000) 100 IR 447 NSW TAFE Commission Teachers (TAFE Children's Centres) Salaries and Conditions Award [1999] NSWIRComm 162 Northwest Exports v Coxon (1986) 15 IR 116 at 122 Operational Ambulance Officers (State) Award, Re (2001) 113 IR 384 Pastoral Industry (State) Award, Re (2001) 104 IR 168 CASES CITED: QCU v Crown and others (Casual Loadings) [2001] QIRComm 43 Principles for Approval of Enterprise Agreements 2002 (2002) 121 IR 144 Principles for Review of Awards Decision (1998) 85 IR 38 R v Booth Ex parte Administrative & Clerical Officers' Association (1978) 141 CLR 257 R v Commonwealth Industrial Court Judges and Others Ex Parte Cocks and Others (1968) 121 CLR 313 Re Cram Ex Parte NSW Colliery Proprietors' Association Limited (1987) 163 CLR 117 R v Moore Ex parte Federated Miscellaneous Workers Union of Australia (1978) 140 CLR 470 Registered Clubs Association Of NSW v Australian Liquor, Hospitality And Miscellaneous Workers' Union, NSW Branch [2000] NSWIRComm 262 Reid v Blue Line Cruises (1996) 73 IR 420 Ryde Eastwood Leagues Club v Taylor (1994) 56 IR 385 Social and Community Services Employees (State) Award (2001) 113 IR 119 State Part-Time Work Case (1998) 78 IR 172 State Wage Case 2003 (2003) 121 IR 446 Swift Placements Pty Ltd v WorkCover Authority (Insp. May) (1999) 96 IR 69 Sydney County Council (Salaried Division - General Conditions) Award, Re [1957] AR (NSW) 607 Transport Industry Waste Collection and Recycling (State) Award No 2 (2001) 102 IR 322 Transport Industry Cash-in-Transit (State) Interim Award, Re [2001] NSWIRComm 220 WorkCover Authority of New South Wales (Inspector Dubois) v Industry Staffing Services Pty Limited t/a Action Workforce (1999) 89 IR 430 WorkCover Authority of New South Wales (Inspector Dubois) v Warman International Ltd (1999) 87 IR 30 WorkCover Authority of New South Wales (Inspector Mansell) v Anytime Industrial Services Pty Limited (2001) 110 IR 34 WorkCover Authority (Insp. May) v Swift Placements Pty Ltd (No 2) (1999) 96 IR 24

1 These proceedings arose from an application by the Labor Council of New South Wales (now known as "Unions NSW") for a test case standard in the form of a State decision, and a counter application by Employers First and Australian Business Industrial (the latter organisation later sought and was granted leave to discontinue the application so far as it was made by it) for a State decision, both of which were made pursuant to s 51 of the Industrial Relations Act 1996 ("the Act"). 2 Unions NSW's application sought a test case standard relating to security of employment, that is: protecting the job security of employees who regularly and systematically work on a casual basis; limiting the circumstances in which an employer may utilise the services of a labour hire business; limiting the circumstances in which an employer may contract out work being performed by its own employees; and reinforcing the occupational health and safety obligations applicable to employers who engage a labour hire business and/or who contract out work. Unions NSW's application, which evolved through a succession of amendments, comprised two distinct elements. First, it sought, pursuant to s 17 of the Act, the inclusion of a "Secure Employment" clause in certain exemplar awards, namely the Storemen and Packers General (State) Award, the Storemen and Packers Bond and Free Stores (State) Award, the Storemen and Packers Wholesale Drug Stores (State) Award, the Crown Employees (Public Service Conditions of Employment) Award and the Local Government (State) Award. Secondly, the application sought, pursuant to s 51 of the Act, to establish a test case standard "Secure Employment" award provision (in the form of the clause sought to be included in the abovementioned awards), which provision may, upon separate application in separate proceedings, be inserted in other awards of the Commission, provided that the clause may be the subject of modification with respect to certain specified considerations. As such, the application was not for the making of a general order, but a general principle. Unions NSW's application, as amended, is set out in Annexure "A" to our decision. 3 Unions NSW submitted that its application was also brought as a Special Case under Principle 10 of the Wage Fixation Principles: State Wage Case 2003 (2003) 121 IR 446 at 466 - 469. We note that it was not explicitly argued that the wage fixation principles must be applied when making a State Decision pursuant to s 51 of the Act. Nevertheless, Unions NSW has amply demonstrated that there have been substantial, widespread changes to the nature and incidence of casual engagements in New South Wales which have profoundly altered the structure and form of employment arrangements in this State. In our view, there have been significant changes in the circumstances in which casual employees are engaged, such that the regulation of casual employment by industrial awards is becoming less relevant to the actual experience of casual employment. Accordingly, we are satisfied that there are compelling factors which establish this matter as a special case. 4 In response to the Unions NSW's application, Employers First's application sought the establishment of "Employment Opportunities Principles" to apply generally to all awards in New South Wales, the stated purpose being to "promote secure employment by maximising employment opportunities". The application, in effect, sought to remove parameters to part-time engagement such as minimum and maximum hours per week (where such existed); minimum number of engagements per week; and any limitation on the participation of part-time or casual employees in a particular workforce. 5 Employers First made a number of additional applications pursuant to s 17 of the Act to vary eight awards consistent with the Employment Opportunities Principles sought. Those awards were the Caterers Employees (State) Award; the Clerical & Administrative Employees (State) Award; the Real Estate Industry (Clerical & Administrative) (State) Award; the Storemen And Packers, General (State) Award; the Horticultural Industry (State) Award; the Shop Employees (State) Award; the Electrical, Electronic And Communications Contracting Industry (State) Award; and the Club Employees (State) Award. 6 Unions NSW was represented in these proceedings by Mr A Hatcher of counsel. Mr T McDonald appeared for Employers First, and on some occasions appeared with Mr R Warren of counsel. 7 These applications ultimately spring from the significant economic and social changes experienced in New South Wales over the past two decades. Those changes are identified by many as globalisation, by others as a transition from closed to open economies, and by others still as the deregulation of trade and commerce designed to increase the influence of market forces. Regardless of the terminology or nomenclature, there have undoubtedly been significant structural changes in the labour market in New South Wales, and consequent changes in the relationships between employers and employees. The applications therefore addressed issues of significant complexity and detail. 8 The process of change has been relatively swift and has been broadly embraced - at least by employers - in the public and private sector at both microeconomic and macroeconomic levels, changing the way in which employers approach the need to have work performed, and the manner in which it is performed. In response to the increasing demands of the labour market, employers have sought greater flexibility from the workforce resulting in, amongst other things, an increased use of casual employment; contracting out of work which was previously performed by employees; and the rise of labour hire, which has become an industry in its own right. The undisputed evidence is that the raft of changes has resulted in significant productivity gains and wealth creation for employers. 9 It is unsurprising that such significant changes in the labour market have been experienced differently by employers and employees. Whilst the changes may well have been positive for employers, Unions NSW contended that the structural changes in the labour market have led to a reduction in the level of security of employment with negative social and economic consequences for employees, not the least of which is a diminution in occupational health and safety standards. 10 Unions NSW contended that employers were seeking to avoid their obligations to employees by using - or misusing - alternative forms of engaging labour. Unions NSW highlighted the following specific labour market changes:

(iv) permitted the "host employer" to be relieved of the obligation to provide suitable alternative duties to employees injured at the workplace, in circumstances where the labour hire business will usually be limited in its ability to itself provide return to work opportunities. 3. Contracting Out of Work Unions NSW submitted that employers are increasingly contracting out work as a device to avoid the operation of industrial instruments, which reduces security of employment and gives rise to a higher occupational health and safety risk with reduced potential for rehabilitation. 11 Unions NSW did not oppose or quarrel with a proper and legitimate use of these alternative forms of engagement in appropriate circumstances. Unions NSW's application was directed to the misuse of these forms of engagement and the resulting negative consequences for employees. 12 The employers contended that, in light of the structural changes that have taken place, further flexibility in the form of easier access to part-time employment, and reduction of the limits to part-time employment, are essential in order to meet the needs of an increasingly demanding market. 13 These proceedings follow regulation of temporary employment at a national and international level. At the time these proceedings were heard, 44 awards of the Australian Industrial Relations Commission (AIRC) contained some regulation of casual employment and/or labour hire arrangements. At an international level, the regulation of labour hire and casual employment is evidenced in all developed industrial countries. 14 The regulation of the number of casual employees as a ratio of permanent employees in New South Wales is limited to a small number of awards and agreements. There are of course, provisions generally found in awards prescribing the conditions under which casual employees work. 15 The "casualisation" of the workforce lay at the heart of Unions NSW's claim. It is clear from the evidence that there have been momentous changes in the nature of casual employment, including: the circumstances in which employers engage casual employees; the number of employees who are engaged on a casual basis; the terms and conditions on which casual employees are engaged; the length of casual engagements; and the regularity or predictability of casual employment. It is equally clear that industrial regulation has not kept pace with changes in the workplace. In that context, an application such as that brought by Unions NSW is to be expected. 16 The response to Unions NSW's application varied. It was opposed by Employers First (and the 45 affiliated associations which it represented) as well as by the Australian Industry Group, Australian Business Industrial, the Local Government Association, the Road Transport Association, and the Catholic Commission for Employment Relations (collectively referred to as "the Employer Group"), who contended that the provisions sought were unnecessary, unworkable and would have a deleterious effect upon the economy of New South Wales. Mr J Murphy of counsel appeared for the Employer Group with Mr A Britt of counsel. 17 The Public Employment Office ("the PEO") was represented by Mr R C Kenzie, QC and Mr P Ginters of counsel. It was submitted on behalf of the PEO that much of what was sought was precluded by operation of the Public Sector Employment and Management Act 2002 ("the Public Sector Act"), and this was acknowledged by Unions NSW. 18 The State Owned Corporations ("SOCs") were represented by Mr A Gallagher SC and Mr A Searle of counsel. The SOCs contended that they conducted their business generally in conformity with what was sought by Unions NSW, and although occasional industrial disputes arose, they were dealt with in accordance with the disputes procedures of the relevant awards. 19 The application was opposed by the Recruitment Consultancy Services Association (RCSA), which was represented by Mr B Hodgkinson SC, assisted by Mr C Fisher. 20 The New South Wales Minister for Industrial Relations ("the Minister") was granted leave to intervene in the proceedings. The Minister did not support a general order pursuant to s 51 of the Act, and submitted that the issues are appropriately dealt with on an award by award basis. The Minister was represented in these proceedings by Mr I Taylor of counsel. 21 The application was opposed by the Federal Minister for Employment and Workplace Relations ("the Commonwealth"), who was also granted leave to intervene. The Commonwealth opposed the application on the basis that it was inconsistent with the national reform agenda. 22 The Young Christian Workers Association, which sought and was granted leave to intervene for the purpose of making submissions only, supported the casual conversion claim, arguing that young people were caught in long term casual employment in harsh and unfair circumstances. 23 Unions NSW's application was supported by the Shop, Distributive and Allied Employees' Association, New South Wales (SDA), whose principal interest lay in opposing Employers First's Employment Opportunities application. Mr B Coles QC and Mr A Rogers appeared for the SDA. 24 Employers First's application was opposed by Unions NSW, the SDA and the Minister. It was not supported by the Employer Group. It was supported by the Commonwealth as said to be consistent with the national reform agenda. 25 The parties brought an extensive body of evidence to assist the Commission in resolution of the issues, ranging from pre-eminent experts with substantial experience in research and analysis of the economy and labour markets; employers from large, medium and small businesses across the public and private sectors; and employees who are living the experience of extended casual and labour hire employment. 26 The Commission was assisted by 343 exhibits and 213 witnesses, including shop floor employees; union officials; employers; economists and labour market research specialists, 122 of whom were subject to cross-examination. 27 After considering that evidence and the extensive written and oral submissions of the parties, we have reached the following conclusions. The basis for those conclusions appears in the discussions of each topic which follows. Unions NSW's Application - Secure Employment 28 As to the conversion of casual employment:

24.12 Wilson Parking employs about 159 casuals, of whom about 70 work a full-time load. Of those full-time hours, a proportion are regular hours. About 50 per cent of the casuals work hours that vary from week to week (i.e. 50 per cent work hours which do not vary from week to week). 25. Further, the evidence showed that many employers use casual employees for reasons which have nothing to do with the operational necessity of having labour available to perform short-term, intermittent or irregular work. For example, a concept has apparently arisen that permanent employment is not the required or standard form of employment for those doing regular and ongoing work, but rather is a privilege or higher grade of employment which must be earned during a prior and lengthy period of casual employment. Tony Mathew, the Manager of Western Suburbs Leagues Club, expressed this concept as follows: "My primary concern is that we try and create a stepping stone though the organisation. Nearly all of the people that we appoint, in fact all of the people that we have appointed that work in our bars or as bar usefuls, keno, change box and the TAB, we all start them off in a casual capacity and then we work them through the system; it gives us the opportunity to determine who the better employees are and we look at it from that perspective. I see that becoming a permanent or a permanent part-time employee is, basically it should be earnt, and as a result we are very interested in making sure that we appoint the right people. We think our casuals perform better when there is an incentive for them, and if there is an automatic right we will find that every person who is not our best employee will automatically want to take up that option. We don't see it that it should be just a right. They need to earn it ....". 26. Associated with this concept is the notion that casual employment is to be used as an indefinite form of probationary employment. Thus at the Western Suburbs Leagues Club, there are no outside appointments of persons to permanent positions; all employees must first serve a lengthy period of casual employment, which Mr Mathew regarded as being for a minimum of 5 months in the best case scenario. Mr Smith of the Twin Towns Services Club gave evidence of a similar situation applying at his club, where a casual period that was " certainly over a longer range than six months " was necessary to cross-train employees and assess their suitability for permanent employment. 27. The above is evidence of an employment paradigm which is totally at odds with the notion that, ordinarily, employees have a right to the entitlements of permanency such as paid annual leave, sick leave, personal/carer's leave, public holidays and the like. Under this way of thinking, these benefits are not a right, but a privilege to be bestowed at the grace of the employer upon deserving employees. This is an approach to the use of award casual employment provisions which has never been approved of or authorised by this Commission, and it fundamentally undermines the notion that for employees other than those performing short term, intermittent and irregular work, permanent employment, with all the normal entitlements appertaining thereto, is the standard and appropriate form of employment.

It was clear from Mr Mathew's evidence about the Western Suburbs Leagues Club that the employment of casuals over long periods was, to a significant degree, motivated by a desire to avoid the payment of sick leave benefits, which were perceived by him as being abused by the Club's permanent employees. However, it is again submitted that this is not legitimate: if permanent employees are abusing sick leave provisions, then this ought be remedied by the appropriate level of disciplinary action, not by denying sick leave benefits to other employees who ought otherwise be entitled to them. Preferences of Casual Employees 72 Mr Hatcher submitted that this evidence demonstrates that the high proportion of casual employment was driven by employer demand, not employee preference. 73 There was considerable conjecture between all parties as to the preference of employees to be casual, to remain casual, or to become permanent employees. 74 Statistical and expert evidence acknowledged that there are those who prefer to be casual employees and others who sought and, if given the opportunity, would prefer permanent employment. 75 The controversy surrounded the proportion in each category and the reasons for the particular preference. 76 The evidence indicated a broad range of preferences with exceptions at each level: people will prefer a casual job to no job; some will prefer part-time to casual employment, and others prefer to seek full-time employment. 77 Preference will depend upon the nature of the job and the perception of the employee. For instance, an employee may prefer to be unemployed if the terms and conditions of employment, travel requirements and earning capacity are unattractive, compared with alternatives. Another employee may choose to take an otherwise unattractive job as a stepping stone to better employment. 78 It was acknowledged by all parties that an individual's preference may change over time, having regard to age, family commitments or other personal circumstances. 79 It was not disputed that, with some exceptions: students prefer casual or part-time work scheduled to allow study commitments; primary care givers seek flexible employment to meet their family obligations; a person with dependants will prefer full-time employment; and an individual may go through each stage at different times in their working life. 80 The statistical evidence given by Dr Hall (who relied on ABS data) and Professor Wooden broadly indicated that around 40 per cent of casual employees would prefer the regularity and predictability of full-time employment. Disadvantages of Casual Employment Compared to Permanent Employment

91 The decision of Stevens DP in Clerks (SA) Award [2000] SAIRComm 41 (20 July 2000), found that the application of provision for casual, part-time and full-time employment, led to significant use of the casual employment provision, notwithstanding that the true nature of the contract may be for regular part-time or full-time employment. The decision further found that casual employment, characterised by intermittent and irregular engagement, was the exception rather than the rule. Stevens DP found that the evidence suggested that employees who have regular and systematic employment, which is ongoing and continuous in nature, are more likely than not to be paid as casuals, not as permanent or part-time employees, which would not occur if the existing definitions were properly applied on the basis of primacy of weekly hire. 92 Stevens DP determined that after a period of twelve months ongoing and regular employment, a casual employee when engaged by a labour hire company or directly, should have the right to access part-time or full-time provisions of the award. 93 The decision of Stevens DP was overturned on appeal by a Full Bench of the SAIRC in the Clerks (SA) Award Casual Provisions Appeal Case [2001] SAIRComm 7 (7 June 2001) on the basis that existing award provisions were adequate and that the decision of Stevens DP provided no opportunity for the employer to object and the parties to follow dispute resolution procedures set out in the award to resolve their differences. 94 The claim by the Australian Services Union (ASU) was amended and subject to further proceedings by a Full Bench in Clerks (SA) Award Casual Provisions Appeal Case [2002] SAIRComm 39 (5 July 2002). The claim provided for a casual employee with 12 months continuous service with an employer to elect to have his or her employment converted to full-time or part-time employment, provided that the employment was consistent with full-time or part-time employment as defined. Other features of the claim were:

Marsh SDP's observations in the Graphic Arts Award, so far as immediately relevant, read: "I have formed the view that on all the material presented a case has been made out to delete the deeming provision. At present casuals must be made permanent after two weeks regardless of operational requirements. It is demonstrated in the material that this restricts or hinders productivity [Item 51(6)(c)] or that it is a restrictive work procedure [Item 51(6)(b)]. The restrictive nature of the current clause is demonstrated by the widespread attempts made to circumvent its intent. I have given consideration to the fall back position of the union which favoured adoption of a clause similar to that inserted into other industry awards [Lewin C, Furnishing Industry - General - Victoria, South Australia and Tasmania - Consolidated Award 1996, Print Q3877, Wilks C, Plumbing Industry Awards, Print Q8609] if I formed the view in support of deleting the deeming clause. In the union's words "Such a clause could effectively be used to limit the long term, permanent and inappropriate use of casuals in the industry whilst allowing flexibility" [Ex M18, p38]. This submission reflects the evidence that casuals are engaged to avoid award obligations [see Mr Rew Tpt 36, Mr Trappel Tpt 239]. Given the circumstances of the industry I am satisfied that a provision similar to that adopted in Furnishing would meet a number of objectives with flexibility being afforded to employers together with fairness to employees. Moreover, whilst such a provision represents a departure from the historical position under the award of limiting employment of casuals to two weeks, it will not result in an unfettered shift in the employment of casuals. The potential for an unwarranted change in the composition of the workforce will be avoided. The casual clause will be reformatted and include a provision consistent with the terms set out below. The provision is facilitative and consistent with the definition in ASD should provide a span or framework. Since I was not addressed in any detail on the appropriate span the parties should confer on an extended period. If necessary I will determine the matter. ...

We acknowledge the force in the points made for and against a maximum time limit of any particular duration. As an exercise of judgment, we have adopted a six month period for election, extendable to 12 months. There has not been an award provision for a maximum engagement in this industry. We acknowledge the existence of relevant precedents for shorter maximum periods of engagement of casuals. We would expect, on the basis of the statistical material, that a high proportion of casual engagements are completed within four to eight weeks. However, in selecting six months, we take into account what we consider to be the potential adverse impact on younger and less advantaged employees of having a lower limit. On balance, we favour an approach which builds time and an opportunity to consider and discuss into the conversion process. In our view, a provision of the kind is the best compromise between the competing interests and considerations arrayed in the argument about the AMWU's claim. We have matched, in part, the wording of subregulation 30B(3) for the purpose of identifying a regular and systematic sequence of periods of employment. We may not by ourselves have arrived at or chosen that wording for a test. Common wording would appear however to have longer term advantages in promoting a consistency of approach. We envisage that the variation would take effect from a prospective date some three months after the date of the order. 102 Since the Metal Industries Award decision, casual conversion provisions have been inserted in 44 awards of the AIRC, detailed by Unions NSW in exhibit 241, which was not challenged. 103 Mr Hatcher submitted that the Clerks (SA) Award and the Metal Industries Award decisions carefully balance the interest of employers and employees, and that the evidence in these proceedings justifies a similar conclusion. 104 Mr Hatcher submitted that there was simply no evidence of an adverse effect of the casual conversion provisions brought by employers, inviting a Jones v Dunkel (1959) 101 CLR 298 conclusion that evidence of the effect of casual conversion was not brought as it would not assist the opposition by employers. The New South Wales Experience - Casual Conversion Provisions in Awards and Agreements

106 As to awards in which casual conversion provisions are found, Mr Hatcher referred specifically to three awards: the Club Employees (State) Award 347 IG 431 ("the Club Award"); the Social and Community Services Employees (State) Award (2001) 113 IR 119 ("the Social Services Award"); and the Building and Construction Industry (State) Award 327 IG 279. 107 The Club Award was made by consent of the parties, and regulates the employment of employees within licensed and registered clubs in New South Wales. The evidence of Mr John Barry, Divisional Secretary of the Australian, Liquor, Hospitality and Miscellaneous Workers' Union, New South Wales Branch (LHMU), was that these provisions were included by consent of the parties in response to structural efficiency decisions of this Commission which led to a consultative task force review of the Club Industry which produced a report titled "Reforming the Workplace in the Club Industry". 108 Mr Barry deposed that the NSW Club Industry consists of approximately 1500 clubs, 36 per cent of which are Bowling Clubs, 24 per cent are Returned Servicemen or Ex-Services Clubs, 14 per cent are Leagues Clubs, 6 per cent are Workers or Country Clubs and the remaining 6 per cent comprise sports, business, ethnic, religious and social clubs. 109 Mr Barry's evidence was that the NSW Club Industry employs 40,000 people to meet the needs of some 2.8 million members. Throughout the State 47 per cent of clubs are found in regional and rural areas, and 53 per cent in metropolitan areas. 110 Mr Barry gave evidence that the task force was funded by the Federal Department of Industrial Relations and supported by: · The Registered Clubs Association of New South Wales · Department of Industrial Relations, Canberra · Federated Liquor and Allied Industries Employees' Union of Australia, New South Wales Branch/Australian Liquor, Hospitality and Miscellaneous Workers Union · Anti-Discrimination Board of New South Wales · Department of Employment, Education and Training · Metal Trades Industries Association of Australia · Stace Management Networks Pty Ltd · Tourism Training Australia · Workplace Resource Centre, Parramatta 111 The task force concluded that more opportunities for permanent employment, including part-time employment, would be of benefit to employers. 112 Resulting from negotiations between the LHMU and Clubs NSW, an award was made in Matter No IRC 3425 of 1999. The transcript of those proceedings records the Clubs NSW representative, Mr Banister, putting that a conscious decision had been made to reduce the number of casual employees in the industry. 113 The casual conversion provisions of the Club Award are found at cl 10.2.12, which allow existing casual employees to convert their employment to part-time within six months of 2 July 1999, the commencement date of the Club Award. The provision was confined to existing casual employees on the basis of submissions from Mr Banister that future casual employees would be "true casuals" on a needs basis only. 114 The Club Award allowed an existing casual to elect to convert to part-time employment, and an employer may not unreasonably refuse. Casual employees received a 331/3 per cent casual loading. On conversion, they would be paid a 15 per cent part-time loading. The opportunity to convert was extended in practice beyond the six month award limit on a case by case basis. 115 Mr Barry's evidence was that as a result of election to convert and agreement by employers, casual employment was reduced by 30 per cent across the industry. 116 The Social Services Award, which was made by the Full Bench of the Commission limits casual employment to engagements of 13 weeks duration. As earlier stated, the Full Bench held (at [314]): We do not envisage that employers will be unreasonably or unnecessarily constrained in their use of casual employees by limiting such employment to work of a short-term irregular nature. We do consider, conversely, that those employees who have in the past been employed in and have an expectation of continuing regular long-term employment are entitled to the range of employment related benefits which accrue to permanent employees. We conclude that a useful application of the words "short term irregular" would be continuous work of not more than 13 weeks duration and not occurring at predictable, expected and equal intervals. Beyond that, we consider there is a compelling case for permanent employment. 117 The unchallenged evidence of Ms Sally McManus, Executive President of the ASU, was that the Social Services Award has led to the casualisation of the industry without adverse effect on employers or employees. 118 The Building and Construction Industry (State) Award limits casual employment to a period of six weeks in the same manner as the National Building Trades Construction Award 2000. 119 Mr Andrew Ferguson, Secretary of the Construction, Forestry, Mining and Energy Union (CFMEU) gave evidence of the operation of the provision in the Building and Construction Industry Award, which he put served the interests of employers and employees. No evidence was brought to counter that of Mr Ferguson. 120 Evidence was presented of the collective bargaining experience of a number of large, New South Wales employers: (1) Coles Myer Group

131 Unions NSW acknowledged that the Local Government (State) Award 317 IG 519 ("the Local Government Award") has provision for casual employment and that ss 348 and 349 of the Local Government Act 1993, which require that appointment to any position in the organisational structure of councils are to be filled by advertisement and merit selection, would not allow the casual conversion process sought. 132 The claim sought to confine casual employment to "irregular casual employees" consistent with the Social Services Award on the same basis as the reasoning in that case. 133 The Local Government Award contemplates that casual employees be engaged on a regular and systematic basis, granting them access to annual assessment under a Council's salary system and providing that service as a casual be counted for long service leave purposes where employment as a casual is continuous with appointment to a permanent position. 134 Recognising this history, Mr Hatcher submitted that transition provisions preserving the position of existing casual employees would need to be included. 135 Mr Hatcher relied on evidence from Mr David Gibson, Director of Workplace Solutions Division of the LGSA, who deposed that a survey of 60 councils revealed 12.5 per cent of employees were casuals engaged on a regular and systematic basis; over 70 per cent were engaged for more than six months; over 50 per cent were engaged for more than 12 months; over 25 per cent were engaged for more than two years and 7.6 per cent for more than five years. 136 Mr Hatcher submitted that casual employment had grown unchecked in leisure and aquatic centres in recent years despite these centres operating continuously throughout the year. 137 The evidence of Mr Brian Harris, General Secretary of New South Wales Local Government, Clerical, Administrative, Energy, Airlines & Utilities Union (USU), was that the failure of some councils to review the incidence of casual employment has led to a high incidence of permanent casuals effectively incorporated into the council's organisational structure, subverting the merit selection provisions of the Local Government Act. 138 Mr Harris' evidence was that the "permanent casual" is unlikely to agitate for permanent employment for fear that advertising will result in loss of the job. Mr Harris deposed that cl 20 of the Local Government Award, giving long term casual employees access to salary review, long service leave and severance pay, arose from experience revealed in a survey conducted by the USU that casuals have been deterred from seeking annual salary review pursuant to the award by the experience of the position being advertised or a threat that it will be advertised when a claim for salary review is advanced. 139 Mr Harris deposed that casual employees remain vulnerable to a reduction in working conditions, such as the Port Stephens Council example where the Council advertised for casual employees to work a seven day open spread of hours without any payment of weekend penalty rates. 140 Mr Hatcher submitted that Local Government is capable of replacing casual employment with permanent employment, which he submitted was demonstrated by a number of examples in which councils, usually with union intervention, have been easily able to effect conversion without detriment to council. 141 Mr Hatcher referred to the evidence of Mr Gibson and Mr Green, Employee Relations Officer, Lake Macquarie Council, who stated that there remained a need to employ casuals to meet fluctuating business needs. Mr Hatcher emphasised that the employment of casuals to perform genuinely intermittent, irregular and short term work requirements is entirely legitimate, which Unions NSW did not seek to alter and is unaffected by the provision claimed. Submissions - The Minister 142 Unions NSW's claim was supported by the Minister. It was submitted on behalf of the Minister that: In light of the evidence it is appropriate for the Commission to establish a model casual conversion clause that balances the operational needs of employers with the practical needs of different demographic categories of casual employees in the labour market. A model casual conversion clause along the lines proposed by Unions NSW would assist those casual employees for whom the casual nature of their employment creates real problems, while maintaining the status quo in respect of those employees who do not seek permanency and where it is not reasonable for an employer to convert the employees to permanent status.

143 The Commonwealth submitted that the statistical information is so unreliable that it cannot support approaching the issue through the award system. 144 The Commonwealth submitted that data from the Department of Employment and Workplace Relations (DEWR) Workplace Agreements database indicates that of the 15,715 Federally certified collective workplace agreements at 31 December 2004, 18 per cent contained provisions giving casual employees the right to convert to permanent employment after a qualifying period, compared to 6 per cent of agreements in December 1999. 145 The Commonwealth did not dispute the growth in casual employment over the past few decades, however, it submitted that: the most important features were that the highest density (61 per cent) of casual employment under the State systems was in small businesses (defined as firms with less than 10 employees); casual density varies between industries which have differing needs and reasons for the use of casual employment; and casual employment slowed in growth as a proportion of the workforce remaining at approximately 25 per cent from 1988 to 2004. 146 In opposing any intervention, the Commonwealth submitted that casual rates of pay and conditions of employment were an attraction to individuals who prefer casual employment. 147 The Commonwealth relied upon unpublished data from the ABS (Employee Earnings and Hours unpublished data 2002) which it submitted reveals that 88 per cent of casual employees receive a loading of 20 per cent on top of their hourly rate in lieu of certain benefits such as sick leave or annual leave. The Commonwealth submitted that the average casual loading under federally certified agreements is 22 per cent, with 90 per cent prescribing a loading of 20 or 25 per cent. The Commonwealth submitted that, in addition, an undefined number, described as "many casual employees", are entitled to other employment benefits under awards and agreements such as: the same penalty rates and overtime loadings as permanent employees; the ability to take unpaid leave in the event of sickness, bereavement, family responsibilities, birth or adoption of a child, (it being noted that some awards provide paid sick leave or annual leave to certain casuals and that 31 per cent of casuals are able to use flexitime); the benefit of superannuation contributions where they earn more than $450 per month. It was also noted that those regular casuals who have been so employed for more than 12 months are entitled to 52 weeks of job-protected unpaid parental leave at the time of birth or adoption of a child. 148 The Commonwealth supported the conclusion that job security is a matter of personal perception and casual employees are generally satisfied with their pay and do not feel any more or less secure in their employment than a person in a less tenuous form of employment. 149 The Commonwealth submitted that making casual employment less attractive to employers will harm employment prospects of people who use casual jobs as a bridge into permanent employment, and those mature workers who use casual employment as a bridge to retirement. 150 The Commonwealth submitted that any difficulty experienced by casual workers in access to finance is a matter for the financial sector, not workplace regulation. 151 The Commonwealth cautioned against an emphasis on fairness, putting that such an approach leads to regulatory errors and inefficiency, reduction in productivity and discouragement of job creation which, in adopting a view expressed by the Business Council of Australia, is unfair to the unemployed. 152 In opposing the claim for a right to seek conversion after six months employment, the Commonwealth noted that statistical evidence (ABS, Career Experience CAT No 6254.0 November 2004) revealed that about 75 per cent of casuals have been with their current employer for more than six months and suggests that a six month limit may provoke employers to "churn" their casual employees by adopting a series of short term engagements to avoid the prospect of conversion and to retain flexibility, resulting in casual employment becoming more precarious, not less, and thereby render those casuals now on long term regular engagements ineligible for benefits of service. The Commonwealth further suggested that the prospect of conversion to permanent employment may discourage some employers from using casual employment at all, with a consequent negative impact on productivity. Submissions - The Australian Young Christian Workers

Flexible but regular work; - A wide variety of work opportunities to suit their skills and interests; - Control over their work life (many nurses feel that they are under pressure to work regular unscheduled overtime to cope with the shortage of nurses) 163 Mr McDonald submitted that: This evidence is entirely consistent with the findings of the Full Bench in Public Hospital Nurses (State) Award (No 3) NSWIRComm 325 (at 76): What appears to be happening in the nursing workforce is that many nurses are moving out of the permanent workforce and are taking up agency or casual nursing or leaving the profession altogether. The reasons why this is occurring are evident from the surveys of nurses tendered in the proceedings and include a desire on the part of nurses to obtain greater control over their lives through more flexible arrangements inherent in agency or casual nursing such as the ability to be selective about the shifts they work. This allows more time to devote to family responsibilities and avoids the onerous demands of shiftwork that a nurse working on a permanent basis is inevitably required to deal with. 164 Mr McDonald referred to evidence from Mr Hassett of the Clarence River Fishermen's Co-operative and Mr Seymour of the Mushroom Grower's Association to demonstrate the irregularity of available work, noting that the fish catch is seasonal and affected by tide and moon, while the amount of labour required at any time for mushroom picking depends upon the product available, which, given that mushrooms can double their size in 24 hours, means that the pick can only be determined 12 hours in advance. 165 Employers First's evidence was that more part-time or full-time employment would result in less people working more hours which would diminish the pool of available people to a level that did not meet peak demand. Employers contended that it is a feature of contemporary, casual employment that each casual employee be offered enough work to generate sufficient earnings such that the employee remains interested and available for work. When the earnings from a casual position are too low, employees move on to other employment and are no longer available to the employer. 166 Employers First also opposed the application on the grounds that it avoids merit selection by presumption that the casual employee will be automatically employed in an available full-time position. Mr McDonald submitted that it is well settled law that the employer retains the right to choose his/her employees (see Morts Dock v Federated Ship Painters and Dockers (1954) 79 CAR 254; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union Limited v BHP Steel Long Products Division re Offer of Employment [1999] NSWIRComm 372 ). 167 Mr McDonald submitted that: The evidence suggests that employers have different expectations of their casual employees compared to permanent employees. When permanent positions arise, they are advertised and the casual employees can apply if they so wish. Given the different nature of the relationship being commenced, and the higher expectations involved, the recruitment process for permanent employees will generally be more rigorous and involve broader considerations. Ron Pike of Boral, for example, stated: For Boral it is fundamental that we be able to recruit the employees that best suit our business. We take this recruitment process very seriously, including psychological testing & employee profiles, to ensure that we employ people who are the right fit for our business. We have invested heavily in long term development initiatives aligned to the national skills framework so that we can grow the best employees for the future. 168 Mr McDonald submitted that the effect of a casual conversion provision is impossible to estimate and accordingly the cost and consequences thereof are so uncertain that the Commission would not achieve the requisite level of satisfaction required by s 51(1) of the Act to make a State decision. 169 Mr McDonald relied upon evidence from Professor Wooden that the conversion rate could be as high as 40 per cent, or around 10 per cent of the New South Wales workforce; from Professor Hall that it could be as high as two thirds of the casual workforce; and from Mr Hargraves in respect to the metal industry that the rate of casual conversion has been relatively small. 170 Employers First submitted that the advantages of casual employment outweigh any perceived disadvantages. 171 Mr McDonald relied on the findings of Professor Wooden that lower job tenure for casual employees is more a product of increased rates of school retention and participation in higher education leading to a preference by employees for short terms jobs, and that despite this, average job duration has increased. 172 Mr McDonald further relied upon Professor Wooden's evidence that: the factors that are most responsible for the low rates of training among casual workers are their low levels of human capital and the nature of the jobs that casuals fill-they tend to involve relatively simple skills and typically do not require much training. In other words, workers in many casual jobs do not need much training to enable them to perform their casual job well. 173 Mr McDonald submitted that where training is necessary, the evidence demonstrates that training is provided. 174 Mr McDonald accepted that casual employees have less career prospects than permanent employees, putting that there is no evidence to suggest that where career paths exist, casuals are necessarily excluded. Mr McDonald submitted that career opportunities by internal promotion do not exist in many casual occupations and that there is no evidence of employee dissatisfaction with this. 175 Mr McDonald put that there is substantial evidence that casual employment leads to higher paying permanent employment although not necessarily in the same vocation. As Professor Wooden described it: This, however, does not mean that casual jobs are also dead-end jobs which not only offer little by way of immediate promotion prospects, but also inhibit the development of careers with other firms. This is most obvious with respect to students (as recognised by Richard Hall at paragraph 53 of his affidavit) who fill casual jobs while studying. Their jobs while studying are usually unrelated to the careers they will pursue after completing study. Furthermore, research of student employment has generally concluded that such employment has been beneficial for future employment prospects. These benefits, however, accrue mainly in the form of general skills arising from the "process of socialising youth into the workforce" (Woolmer and Hill 1990, p 34) rather than as improved firm-specific skills. 176 Mr McDonald also relied upon evidence from Professor Philip Lewis, Professor of Economics and Director of the Centre for Labour Market Research at the University of Canberra, that: - a substantial number of low paid job seekers do move to higher paying jobs over time; - movement from low pay to higher pay is often associated with transitions from part-time to full-time work; and - a substantial number of job seekers in low skilled jobs move to higher skilled jobs over time (DEWR 2004). This phenomenon, of moving away from low skilled, low paid employment to higher paid, higher skills, better wages and hours of employment, is called the "Stepping Stone" hypothesis. 177 Mr McDonald discounted the personal disadvantage of lower access to union membership as advanced by Unions NSW, putting that it is novel to suggest this as a disadvantage, and to the extent a casual employee regards it as a disadvantage, it could be easily corrected by the employee joining a union. 178 Mr McDonald relied on the observation of Dr Hall which he submitted puts the question of perceived disadvantage to casuals in context. Dr Hall said: ... Any discussion of the effects of casual employment on the employee must be cognisant of the considerable diversity of the casual employee population. In sectors such as retail trade and accommodation, cafes and restaurants, for example, casual employees are often young students. For many of these workers, especially those who are not planning a long-term career in the sector, casual working conditions may well be acceptable, even attractive. Casual jobs may offer a degree of flexibility over hours, may demand only limited commitment to the job and may offer a pay rate premium in the form of penalties for casual employment. 179 Mr McDonald submitted that casuals are paid for annual leave and sick leave in the casual loading which has an advantage to casuals who are paid for sick leave whether they are ill or not, compared to full-time employees who do not access sick leave unless they are sick. 180 Mr McDonald put that casuals could take time off on a more flexible basis than permanent employees, which was seen by many as an advantage of flexibility to the casual employee and which would be removed by conversion. 181 Mr McDonald put that casuals per se do not have a limited access to finance compared to full-time employees, submitting that the evidence is that the quality and duration of the employment are the principal criteria. Mr McDonald submitted that casual conversion rights could lead to casual employment of less than six months duration which would adversely affect access to finance. 182 Employers First submitted that the current claim seeks more than was decided in the South Australia cases and submitted that it is not proper to follow the Metal Industries Case which considered the circumstances of a particular industry. Mr McDonald submitted that Unions NSW has failed to produce any evidence of the advantages of casual conversion, putting that the only experience of casual conversion in New South Wales is in the club industry where the provisions operated for a limited period of six months in the second half of 1999 and was attended by significant financial advantage to both the employer and employee to convert from casual to part-time employment not found in the present application. 183 Mr McDonald submitted that casual conversion is best achieved by agreement in specific workplaces, by negotiation, or by operation of disputes settlement procedures. 184 Mr McDonald added that conversion to part-time work was facilitated in the retail sector by agreements with Coles Myer, Woolworths and David Jones which removed minimum and maximum hours for part-time employees. Mr McDonald explained the experience of Sara Lee where casual conversion was negotiated on terms suitable to the operational requirements of the business. 185 Clause 10.7.8(a) of the Sara Lee Bakery Gosford Production Enterprise Agreement 2004 states: 10.7.8(a) Where a casual employee is utilised on a regular and/or systematic basis of a minimum of 25 hours and a minimum of 3 days a week over the preceding months, and there is an ongoing requirement for the work being performed, the employee can apply to be converted to a permanent full-time or part-time position.

(h) to encourage and facilitate co-operative workplace reform and equitable, innovative and productive workplace relations. 191 Mr McDonald put that the conflict between a casual conversion provision and the Objects of the Act lead to a conclusion that the casual conversion provision sought by Unions NSW is contrary to the public interest. 192 Mr McDonald submitted that it is impossible to determine the cost of granting the Unions NSW claim as: there is insufficient data; there is no economic model applied to the question; the effect will fall disproportionately on large and small business, the latter more inclined to engage casual employees; the age and gender of casual employees have not been considered; there is uncertainty as to entitlement to convert; and there remains the prospect that conversion to full-time employment may not reflect an individual's preference for full-time employment but concern as to the consequences of not converting. 193 Determining the eligibility for conversion troubled the employers significantly, in particular the practical application of the requirement to work "regularly and systematically for a period of six calendar months". 194 Mr McDonald led evidence from a number of employers who deposed that they would have casual employees who worked regularly and systematically for six months or longer, but not every week due to fluctuation in demand or other commercial circumstances. 195 Mr McDonald submitted that the provision of the Clerical and Administrative Employees (SA) Award, which required employment to be consistent with full-time employment or part-time employment as defined by the award, would go some way to avoiding this difficulty. 196 Mr McDonald submitted that the problem is not entirely solved, putting for example that the maximum 30 hours criteria of the Shop Employees Award would leave a casual working more than 30 hours per week but less than 38 hours per week, outside the definition of either part-time or full-time and accordingly no right to convert. 197 Mr McDonald further particularised that where a casual employee worked one day per week on a Saturday, conversion to part-time employment would be problematic as would meeting the minimum criteria of 19 hours per week for part-time employees under the Fish and Fish Marketing (State) Consolidated Award 320 IG 1139 in periods of the year when work was not available to meet this minimum. Seasonal Work

199 The evidence of Mr Ray Bennett was heavily relied on by Employers First. Mr Bennett is a business consultant, analyst and economist and is a Director and the Treasurer of Employers First. 200 The evidence of Mr Bennett, emphasised by Mr McDonald, was an assertion that a casual conversion provision would deny employers the flexibility to meet fluctuations in demand and discourage venture into new markets and technology where business risk is higher. Mr Bennett asserts that management needs the flexibility of obtaining the skills and experience now obtained over a sustained period of time without the potential liability of casuals becoming part-time to meet the great diversity, complexity and constant change in the labour market. 201 Mr Bennett postulated that response to a casual conversion provision by employers might give greater security to some employees but would add generally to unemployment as available work was confined to a fewer number of full-time and part-time employees as compared to the present spread across a larger number of casual employees. 202 Mr McDonald opposed the variation of the exemplar Storemen and Packers Award, submitting that the evidence of Mr Derrick Belan, State Secretary of the National Union of Workers, revealed that the overwhelming majority of casual employment is through labour hire providers, leading to the conclusion that a conversion to a part-time or full-time employee of the labour hire company would not achieve any remedy. 203 Mr McDonald referred further to evidence of Mr Belan that members of the NUW at Bonds Store had rejected part-time work in preference to casual employment as the casual employment gave more hours and higher earnings. Submissions - The Employer Group 204 The Employer Group also opposed the application by Unions NSW. 205 In addition to the arguments advanced by Employers First, the Employer Group submitted that the variation of the Local Government Award to restrict the employment of casual employees other than "irregular casual employees" and the continued employment of other casual employees cannot be effected by a State decision as such variation is not consistent with the general variation sought and has no effect on any other award. 206 The Local Government Award falls into a similar category as public sector awards. Employment under public sector awards is negotiated by the Public Sector Act. Employment in local government is similarly negotiated, that is, the process of recruitment, merit selection, appeal and other matters are prescribed by the Local Government Act so as to make direct conversion of a casual employee to a full-time or part-time employee impractical. The current provisions of the Local Government Award are designed to ensure that casual employees are engaged for a proper purpose, in particular not to avoid permanent employment or an indefinite form of probationary employment. 207 Clause 20(vi) of the Local Government Award states:

(x) A change to full-time employment from part-time employment or to part-time employment from full-time employment shall not constitute a break in the continuity of service. All accrued entitlements shall be calculated in proportion to the hours worked in each employment arrangement. 210 The evidence was that casual employees may be engaged to cover long-term leave of an unpredictable duration such as workers compensation leave, maternity leave, special maternity leave, sick leave or carers leave. 211 The Employer Group further submitted that the proposed restriction on casual employment in the Local Government Award would cause difficulty with seasonal work in pools, on beaches, and in leisure centres where casuals may be engaged for six months or more, but not otherwise required. Reference was made to the evidence of Mr Brian Harris, General Secretary of the USU, that seasonal workers were not intended to be caught by the provision, submitting that the application made no such differentiation. 212 The Employer Group submission examined the circumstances of the Warringah Aquatic Centre where 15 of the 122 staff are permanent despite both the employer and union attempting to persuade more to permanent employment. The reasons advanced are that the employees are reluctant to give up a 25 per cent casual loading and wish to retain the flexibility of casual employment to accommodate their study and/or sporting commitments which prevent them committing to a full-time roster. 213 The Employer Group submitted that the provision sought would reduce employment opportunities in local government and have the potential to increase use of labour hire rather than direct employment which would increase costs and not reduce casual employment. 214 The Employer Group put an alternative submission consistent with that of the Minister that the conversion should: "adopt a similar approach to that of the Australian Industrial Relations Commission in the Metal, Engineering and Associated Industries Award 1998 (2002) 110 IR 247 and the Appeal against orders by Australian Liquor, Hospitality and Miscellaneous Workers Union PR925679. The Commission should only consider such applications on a case-by-case basis, based on the history of, and the reasons for, casual employment and the nature of the particular industry. Further, any principles should be consistent with the above decisions so as to provide both comity with the Federal system and not provide a competitive disadvantage for employers governed by NSW awards compared to those governed by Federal awards.

(a) determine how long the employee has been employed for; (b) determine whether the employment was regular and systematic; (c) provide notice under clause (c)(ii) to each employee; (d) determine whether conversion is possible; and (e) explain the decision to employee(s). 215 The evidence of Professor Wooden and Dr Hall were relied on for the contention that casual employment was not necessarily inferior employment, putting that advantages of flexibility and variation of hours are of benefit to employees in labouring work and other commitments. Submissions - Recruitment Consulting Services Association 216 The RCSA supported the submissions of the Employer Group including an alternate submission that should the Commission move to consider granting the application in whole or in part, it should do so on the basis of developing principles which could be applied to individual awards upon application having regard to relevant circumstances of an industry and providing a clear and detailed mechanism for administration of the provision. The RCSA detailed the matters to be considered in the following terms: In respect of principles for a casual conversion clause, such principles should be limited to the following matters only: (a) any jurisdictional impediments which exist in respect of the relevant award; (b) The incidence of casual employment in the subject industry. (c) The potential economic impact of granting the application. (d) The potential impact of granting the application on the level of employment in the industry including an assessment of the impact on minority groups such as youth and aged workers. (e) The level of competition faced by the industry, particularly the potential for import replacement. (f) The need for labour market flexibility to ensure competitiveness of the industry including consideration of cyclical economic influences or the project nature of an industry. (g) The history of the award including the definition of casual employment and casual loading. (h) In what circumstances, if any, there could be certainty of permanent employment opportunities that were ongoing and stable. Submissions - Public Employment Office 217 The PEO submitted that: Section 38 of the Public Sector Employment and Management Act 2002 (NSW) provides for the basis upon which casual employees can be employed in the public service. 218 Section 38 provides: (1) The appropriate Department Head may, in accordance with such guidelines as are issued from time to time by the Public Employment Office, employ persons to carry out work in the Department on a casual basis. (2) Persons employed under this Part are casual employees . (3) A person may be employed as a casual employee: (a) to carry out work that is irregular or intermittent, or (b) to carry out work, on a short-term basis, in an area of the Department with a flexible workload, or (c) to carry out the work of a position for a short period pending the completion of the selection process for the position, or (d) to carry out urgent work or to deal with an emergency. (4) The employment of persons under this Part is subject to: (a) section 7 (3), and (b) any other provisions of this Act or the regulations concerning the employment of casual employees. 219 The PEO put that the award provision sought by Unions NSW imposes no added obligation on the PEO (as the deemed employer of staff in the public service), and as such is an unnecessary provision that, as a matter of discretion, the Commission should decline. 220 The PEO submitted that a casual conversion clause applicable to the Education Teaching Service would be impractical on the basis that the capacity to draw upon a large pool of casual teachers is essential to fill temporary vacancies created by planned and unplanned absences. The PEO put that conversion of the type sought by Unions NSW is likely to result in a rapid oversupply of part-time and full-time teachers in the Education Teaching Service. 221 The PEO submitted that, to the extent the Commission is minded to grant Unions NSW's claim pursuant to s 51(3) of the Act, it should be limited to the designated awards and not apply in the Public Sector awards. Submissions - State Owned Corporations 222 The SOCs opposed the application of the claim to the industrial instruments regulating employment in the SOCs. The SOCs submit that any decision should be confined to the exemplar awards on the basis that the evidentiary case put by Unions NSW was confined to those awards, which the SOCs put are not representative of the New South Wales economy. 223 The SOCs made no submission as to the appropriateness of the model clauses as they relate to the exemplar awards. 224 The SOCs submitted that the conversion of casual employees into permanent employees is an issue that is being dealt with fairly on a case by case basis, adding that the NSW Government policy of no forced redundancies is an additional level of comfort mitigating against the introduction of model clauses. 225 The SOCs submitted that the low "take up" of the casual conversion option in the federal metal industry demonstrates that there is no genuine need for such a provision in NSW State awards. The SOCs put that if an employer wishes to employ casuals for a particular reason, the employer should be free to do so. The SOCs noted that such employment would be in accordance with the relevant industrial instrument and that, where a particular employer or industry appears on the evidence to be abusing the way in which casual employees are engaged, then the circumstances of that particular employer or industry should be addressed. 226 The SOCs submitted that the evidence establishes that there was no difficulty with the employment practices in so far as engagement of casuals is concerned, and that there was no basis for any interference in the way in which SOCs deal with casual employees. Conclusions

227 As earlier stated, the evidence presented in this matter demonstrates that casual employment in New South Wales has experienced significant change in recent years, both in terms of the nature and incidence of casual engagements. It is those changes, and the consequent implications for casual employees, which are at the heart of our decision to grant Unions NSW's application with respect to casual conversion. Our reasons are threefold. 228 Firstly, whilst there are some employees who fit the traditional definition of casual employment, the changing nature of casual employment has resulted in an increasing number of casual employees working regular hours in long term positions. Many of those employees experience significant adverse consequences as a result of having been shifted out of permanent employment. 229 Secondly, the fact that employers are increasingly engaging casual employees to perform work which was previously performed by permanent employees detracts from and undermines the efficacy of the system of industrial awards which regulates a large percentage of permanent and casual employment in New South Wales. 230 Thirdly, whilst employers have benefited in varying degrees from the increases in, and changes to, casual employment, the evidence is ambiguous as to whether the same flexibilities could not be achieved by other forms of engagement. More significantly, evidence called by Employers First as to the perceived difficulties associated with the claimed casual conversion clause did not sustain testing under cross-examination. When the true effect of the clause was understood, most genuinely held objections dissolved. It is important to emphasise that the claim is not directed at true casuals: it only operates where an employee elects to transit to permanent employment. 231 The concept of a "casual" which has emerged through historical employment practice and industrial jurisprudence and which has now long been defined and regulated in awards in this State is essentially one in which: the employee has a short term engagement; shifts are irregular and unpredictable; the employee is not obliged to accept an offer to work a particular shift; the employee's employment technically commences at the beginning of a particular shift and ceases at the end of that shift; the employee is paid a loading as compensation for, amongst other things, annual leave and other benefits "accrued" during each shift worked; and the employee has no expectation of being rostered for another shift. 232 Awards recognise a distinction between casual work and full-time or part-time work, and prescribe levels of remuneration and conditions accordingly. The awards of this State have created and maintained a dichotomy between permanent and non-permanent employment. What the evidence in this matter has revealed is a significant shift towards engaging employees as "casuals" (merely by the label being affixed to the position or by the characterisation of the employment by contract or otherwise) in circumstances where those employees do not, on any reasonable basis, fit the conceptual and legal model so described. This change has occurred without a review by the Commission as to whether the changes are consistent with the existing award model or are appropriate when judged against the requirements of s 10 of the Act and other relevant statutory provisions. The application by Unions NSW represents the first modern opportunity to review the new arrangement. This is significant as it is clear from the evidence that the changed employment patterns which have created something akin to a "permanent casual" (in contrast to the "true casual") significantly altered the work arrangements (often adversely) of a large number of employees. 233 We do not consider that Ryde Eastwood Leagues Club v Taylor represents an acceptance (as opposed to a recognition) by the Commission of the notion of the "permanent casual" as a form of employment. The question whether an employee is engaged on a casual basis for the purpose of determining jurisdiction (such as in an unfair dismissal matter) does not disturb the well established jurisprudence surrounding the true nature of casual employment, nor does it represent a review by the Commission of the casual employment model against statutory standards of fairness or reasonableness. Indeed, decisions such as Ryde Eastwood Leagues Club v Taylor highlight further the changes we have described in the management of casual employment vis a vis permanent employment. 234 There was no shortage of evidence in this matter, some of which is extracted earlier, to demonstrate the way in which the features of casual employment have, in many instances, changed from short term and unpredictable to long term and regular. The storeperson engaged by Bonds Industries Pty Limited is a clear illustration: the employee has been engaged for over six years, working a 38 hour week on regular morning shifts, yet was labelled and paid as a casual employee. We do not consider such long term casual engagements to be isolated incidents, but rather reflect the increasing trend. 235 Evidence was presented to illustrate those trends. Unions NSW relied on data such as the Household Income and Labour Dynamics in Australia Survey (the HILDA Survey) and the Forms of Employment Survey conducted by the Australian Bureau of Statistics. We are satisfied from that evidence that: (1) The overall incidence of casual employment has increased. Unpublished data from the Australian Bureau of Statistics revealed an increase in casual employment in Australia from 16 per cent in 1985 to 27 per cent in 2002. That trend was mirrored in New South Wales: the HILDA Survey reported that in 2001, 25.9 per cent of employees in New South Wales were engaged on a casual basis. We note the evidence given by Professor Wooden in relation to those statistics that most of this growth occurred prior to 1996, with quite modest increases between 1996 and 2002.

(4) The average length of casual engagements has increased. It was Professor Wooden's evidence that, notwithstanding the increased casualisation of the workforce, "the proportion of short-term jobs in the workforce has not increased and average job duration is not any shorter (indeed, it appears to be slightly longer when compared to 1975)". When cross-examined, Professor Wooden gave the following evidence: Take a look at the average length of time people have jobs for: job tenure. So casual workers typically have jobs that don't last as long as permanent workers. Casual employment has increased but the average tenure of jobs in Australia has not declined. The reason for that is because the average tenure of a casual employee has in fact increased and in fact the average tenure of a non-casual employee has also increased but because the share of casual employment has increased average tenure hasn't changed much, in fact it has got slightly longer, but a small change. 236 Unions NSW recognised, correctly in our view, that the need for casual employment remains varied, and that "in some cases, employers will have little if any legitimate need for casual employees, while at the other extreme, there are some employers whose businesses have very wide fluctuations in their demand for labour and consequently may need a significant proportion of their workforce to be engaged on a casual basis". We have no doubt that in some industries in particular, such as agriculture, the use of casual employment is crucial to filling seasonal vacancies. 237 Accordingly, notwithstanding the apparent evolution in casual employment, there remains a substantial number of employees in New South Wales who fit the traditional model of a casual employee. This application is not directed at those employees, and we have no intention of disturbing the legal basis for those arrangements. 238 Similarly, we acknowledge that there exists a section of the casual workforce who are satisfied with long term casual employment, and who prefer that arrangement. It is unsurprising that younger people, particularly students, who have no pressing family commitments, prefer the higher rates of pay associated with casual employment without needing the security and benefits of permanent employment. 239 However, there have been significant adverse consequences for a substantial number of employees, who have relied on and prefer permanent employment, but who have experienced a reconstruction of their terms of employment by a forced shift from permanent employment to long term casual employment. There has over time been not only a casualisation of full-time positions, but a significant shift in the terms of that casual engagement. We agree with Unions NSW that for these employees, casual employment may be undesirable. Again, the evidence (including statistical evidence) demonstrates that: adverse consequences have arisen from long term casual employment (as opposed to true casual employment) for certain classes of employees which include the following:

(3) casual employees have less opportunity for training and career development. 240 In our view, principles of fairness and equity demand that some protection be afforded to long term casual employees to minimise those adverse consequences where the employees concerned have, in essence, been forced by a shift in employer practices and policies to that form of engagement, and when the evidence demonstrates that the economic cost to employers of converting casual employees to permanent, if they so elect, is modest. There is a pressing need, in our view, for a safety net to be instituted for those employees for whom long term casual employment is not only disadvantageous, but an impediment to their ability to obtain and remain in paid work. Working mothers make up a significant component of that group. In those circumstances, we consider that there are strong social and industrial bases for granting Unions NSW's application with respect to casual conversion. 241 We wish to emphasise that, under the proposed clause, conversion to permanent employment is neither automatic nor compulsory. Those employees who prefer to remain employed on a casual basis, including those who have been working regular hours over a lengthy period of time, may continue to do so. 242 The increasing use of long term casual employment in place of permanent employment has significant implications for the regulation of employment conditions in industrial awards. 243 The evidence presented by Unions NSW was that 62 per cent of casual employees in New South Wales are covered by State industrial instruments, 58 per cent of those being covered by common rule awards. As well as establishing the framework for engaging employees in a specified industry, an award provides a safety net for those employees by setting minimum terms and conditions of employment. An employee who is effectively performing the work of a permanent employee but who is engaged, pursuant to an award, on a casual basis, may be denied award entitlements, which would otherwise apply, had the employee's engagement been correctly characterised as permanent. This undermines the integrity of awards which are designed to treat casual employment in the particular way we have earlier discussed. It was submitted for Unions NSW that developments in the labour market and changes in employment practices have effectively removed many or all of the basic rights of employees, and specifically that: [There has been] significant growth in the proportion of the workforce which is employed casually. This is to a large degree caused not by growth in casual work - that is, work which is intermittent, irregular and short-term in nature - but by the use of employers of casual employment provisions in awards to remunerate employees who are performing regular, ongoing work. That is, employers are, by the payment of a casual loading, simply opting out of the conditions of permanent employment which contain so many of the incidents of secure employment. 244 We agree with Unions NSW that there is an increasing use - or misuse - of the casual employment provisions in awards. It is important that industrial awards keep pace with broader changes in the workforce, and that employees do not slip through holes in the safety net by having been engaged in a manner that is not contemplated by the relevant award. We are satisfied that the casual conversion provision proposed by Unions NSW adequately addresses the relevant issues relating to the management of permanent and casual employment. 245 We note the reasons advanced by Employers First in opposition to the proposed casual conversion clause. However, we do not consider those arguments sufficiently compelling to refuse Unions NSW's application. Specifically: (1) we do not consider that granting a long term casual employee the right to elect to become permanent interferes with an employer's merit selection process. It is incongruous to suggest that an employer loses the ability to recruit "the best person for the job" if a casual employee elects to become permanent. A casual employee who has been employed in a position for six months should be suitable for the job (indeed the evidence showed casuals are in fact retained for much longer engagements). An employer who allows an unsuitable casual employee (without adequate training or review) to remain in a position for that length of time has failed to properly manage its human resources. (2) Whilst casual employment may not be a "dead-end" for some classes of casual employees, such as students who take on casual employment as part of a progression to higher paying permanent employment, it remains the case, acknowledged by Employers First, that casual employment provides little training and fewer career prospects than permanent positions. For those employees seeking career progression, casual employment is real disadvantage. (3) Whilst some casual employees may enjoy the flexibility of being able to take time off on a more flexible basis than permanent employees, there is nevertheless a significant number of employees who do not want or need that flexibility, and/or who in reality do not have that flexibility because of the virtual permanency of their position. For these employees, casual employment has very little benefit in terms of flexibility. (4) The suggestion that casual employees benefit from the payment of "accrued" sick leave whether the employee is sick or not, compared to permanent employees who only receive sick leave when they are sick, misses the point entirely. For many employees, the benefits to be gained from working are not solely financial. A long term casual employee, confronted with the dilemma of needing to care for a sick child, in circumstances where they have no entitlement to sick leave, is in an invidious position. The payment of a loading does not guarantee job security for that employee who is unable to attend work. (5) We are not satisfied on the evidence that the impact of a casual conversion clause would be great in terms of the number of employees affected, or that the rate of casual conversion would be high. In any event, the evidence indicates that the economic impact of casual conversion on the proposed model would be modest.

(6) Finally, there remains a real question as to why employers should be able to retain the benefits of long term casual employment, where such engagements are frequently undesirable for employees, and by a process of "work place creep" have resulted in work practices which are contrary to the spirit, purpose and intent of awards of this State (which do not envisage casual employment being used as a mechanism for regular, ongoing employment, and consequently are inadequate to regulate such engagements). 246 Further, we note with some concern that employers are increasingly using casual employment for reasons other than to meet short term operational needs. Unions NSW presented evidence, discussed earlier, of employers using casual employment either as an entry level stepping stone from which progression to a permanent position may be achieved, and/or as an ongoing probationary period. Casual employment is not a panacea for inadequate human resource management. 247 We do not consider that the actual or perceived flexibilities associated with casual employment should be protected at all costs. In our view, the disadvantages of long term casual employment for employees far outweigh the advantages to be gained by employers who wish to persist in using casual employment as a vehicle for virtual permanent employment, whatever their reason for doing so may be. Further, we have seen little coherent evidence that those same advantages cannot be obtained through other forms of employment. 248 We conclude that the application by Unions NSW should succeed with the exception that consideration of conversion to part-time employment be preceded by casual employment consistent with the part-time provision of the relevant industrial instrument or be capable of expression in a part-time agreement pursuant to Part 5 of the Act. 249 The Storemen and Packers General (State) Award and the Storemen and Packers Bond and Free Stores (State) Award will be varied as sought. No amendment will be made to Public Sector awards where casual employment is regulated by the Public Sector Management Act or Local Government awards where casual employment is regulated by the Local Government Act. Operative Date

258 Unions NSW relied upon a 2005 Productivity Commission Staff Working Paper, produced by P Laplagne, M Glover, and T Fry showing that in workplaces of over 20 employees, the number of labour hire employees grew from 3,000 in 1990 to 190,000 in 2002, representing an annual growth rate of 15.7 per cent compared to an annual growth rate in total employment of 1.5 per cent. 259 The growth rate of labour hire was not disputed. The expert evidence supported the growth of the use of labour hire, both in volume and across the economy. The evidence of Dr Hall was that every industry sector, other than retail trade, has experienced a marked increase in labour hire as a form of employment. 260 The reason for the growth of labour hire attracted the most debate. 261 The Productivity Commission Report by Laplagne, Gover and Fry, concluded that a change in employment strategies by employers, driven by a decline in "closed union shops", increases in workplace bargaining, the use of specialist Human Resources managers, and rising competitive pressures were behind the increase in labour hire usage. 262 Mr Hatcher relied upon the Australian Industry Group (AI Group) submission to the New South Wales Government Labour Hire Task Force in 2000, that identified a preference for companies to source casual employment through labour hire firms to minimise union pressure to convert direct hire casuals to permanent employees. 263 The RCSA commissioned Dr Linda Marie Brennan, (Senior Lecturer School of Applied Communications at Royal Melbourne Institute of Technology), to undertake a study of the labour hire industry. The report prepared by Dr Brennan, Dr M Vacos and Professor Kevin Hindle, was titled "On Hired Workers in Australia Motivators and Outcomes", and was in evidence. 264 The report concluded that 66 per cent of labour hire employees would prefer direct employment and 64 per cent would exchange their casual loading for paid leave entitlements. 265 Casual employment in the labour hire industry remains high. The evidence was: · HILDA Wave study 2001 recorded 59.5 per cent of labour hire staff as casuals with 19.3 per cent being fixed term;

268 The Unions NSW case argued that employers are and will continue to misuse labour hire as a substitute for direct permanent employment and/or superior wages and conditions of employment. Evidence relied upon to support this argument was: · Tasman Insulation Industries: 269 Mr William Parker had worked at Tasman since February 1988 as a fitter on full time hours with overtime. Mr Parker had been a labour hire casual employee for the entire period, first with Clout Engineering Pty Ltd and subsequently with TMP Hudson. Mr Parker worked with and alongside fitters employed by Tasman but did not receive the same conditions of employment. Mr Parker had ten days off since February 1988 comprising five days annual leave, two days sick leave and three days bereavement/compassionate leave, all unpaid. Mr Parker's continuity of service for long service leave purposes was broken when Tasman changed labour hire providers. 270 When Mr Parker commenced work with Tasman there was an understanding that he would become a permanent employee. Requests by him for conversion to permanent employment had been refused. Mr Ian McLennan, the Manufacturing Manager for Tasman, said that the company had refrained from appointing Mr Parker as a direct employee as the company had been working toward a reduction in maintenance staff for some years. 271 In cross examination Mr McLennan offered no rational for the approach taken compared to permanent employment, putting that "we chose to do it the way we choose". · Department of Education and Training 272 Mr Steve Turner, Assistant General Secretary of the PSA, gave evidence of a person employed within TAFE through a labour hire agency continuously for a period of ten years. The person had since been appointed as a direct temporary employee of TAFE, however, service as a labour hire employee was not recognised for long service leave. 273 Mr Turner also gave evidence of labour hire employees working in TAFE for $7.00 to $10.00 per hour less than Department of Education employees doing the same work. The labour hire employees were engaged as casuals for periods of six months to almost three years with no leave entitlements. 274 Mr Shay Deguara, Industrial Officer of the PSA, gave evidence of widespread use of labour hire in TAFE to fill vacant permanent positions, positions deleted through restructure and redundancy processes or where a restructure was planned and no staff were to be appointed pending that eventuality; in all cases the work was required to be performed. 275 Mr Deguara's evidence was that this led to many labour hire staff working in TAFE for periods of up to five years in the same position. Mr Deguara's evidence was that a recent review within TAFE had resulted in a dramatic reduction in labour hire staff. · EnergyAustralia 276 Mr Marzato, an official of the United Services Union (USU), deposed that EnergyAustralia had employed a printer for seven years through a labour hire agency until the matter was raised by the USU, resulting in conversion to permanent employment. · Zenith Management Services 277 Ms Alannah Hovard gave evidence of her experience as a recruitment consultant and subsequently as an on-line archivist in a Records Officer position with the Department of Juvenile Justice. Ms Hovard deposed that as a recruitment consultant the Crown Employees Award was given no consideration in setting rates of pay for employees. 278 Ms Hovard's evidence in respect to her placement in the Department of Juvenile Justice by Zenith was that she was told her rate of pay was $22 per hour as the Department could not afford to meet the grade 5/6 rate of pay. Ms Hovard deposed that she was informed that Zenith would pay her an additional $5.00 per hour from its own funds on the expectation that the position would run for two to three years and Zenith would later recoup that amount. 279 The evidence of Ms Olup, the Department's employee responsible for organising the engagement, was that the Department was prepared to pay Zenith $42 per hour for Ms Hovard's services, that she had never discussed Ms Hovard's rate of pay with Zenith, and that the position was never meant to be filled for a period approaching 12 months. 280 Mr Hatcher submitted: It is clear that Zenith was being paid a rate which would have permitted it to pay Ms Hovard the Grade 5/6 rate, but absent any requirement from the Department to do so, was able to deceive Ms Hovard to pay her $27 per hour and pocket a margin of $15 per hour. Ms Hovard was later removed from the position after she complained about her pay and conditions. She was told by Mr Peterson [Zenith] that Ms Olup had requested her removal but it appears that Ms Olup had done no more than express concerns at her behaviour. 281 Mr Hatcher referred to contracts written by the NSW State Contracts Control Board for use by Government agencies in the engagement of temporary and labour hire employees that require observance of the Clerical and Administrative Employees in Temporary Employment Services (State) Award 320 IG 56 ("the Temporary Employment Services Award) for engagement of administrative, finance and specialist personnel. This award applied to labour hire companies, members of the RCSA. It prescribed rates of pay, some $2.00 per hour less than the lowest public sector award. 282 Mr Hatcher submitted that the application of the Temporary Employment Services Award to the public sector subverted the public sector awards which must be taken to comply with s 10 of the Act to set fair and reasonable conditions of employment. 283 Mr Derek Belan, State Secretary of the NUW, gave evidence of his personal experience as a labour hire employee and in his role as State Secretary, of places of employment where labour hire had been used to reduce rates of pay and conditions of employment compared to those paid pursuant to industrial regulations covering the host employer. 284 There was evidence that labour hire companies will, in a majority of, but not in all circumstances, pay their employees at the same rate of pay as employees of the host employer, and to a lesser extent meet the conditions of the last employer. 285 The evidence of Dr Brennan was that the RCSA survey showed that 60 per cent of host employers required a labour hire company to apply basic terms and conditions of employment. There was no evidence to suggest that for non-RCSA employees, the extent of pay matching was lower. 286 The evidence of Mr Cartwright was that requirements or requests by clients to meet site rates of pay was usually on highly unionised sites and/or driven by what he described as a "candidate short" market. Access to Relief from Alleged Unfair Dismissal

295 The claim was modified for the jurisdictional reasons discussed in the Casual Conversion aspect of this case. 296 The Minister supported the application by Unions NSW in principle, however, did not support the form or details of remedy sought. 297 The Minister submitted that a general provision would be inappropriate, suggesting that each industry and arrangement should be subject to appropriate scrutiny and exercise of discretion on the evidence. 298 The Minister submitted that material differences may exist from industry to industry and that an exercise of discretion would be different where the nature of the labour hire is ongoing and long term, as against short term placements to meet a temporary need. 299 The Minister expressed concern that the form of the clause sought could confuse employees and independent contractors, and submitted that a provision that would be applicable to a non-employee of a labour hire company should not be made. 300 The Minister submitted that a requirement that a host employer offer conversion from casual to permanent employment to an employee of a labour hire company extended the obligation to include a person who was not an employee, and accordingly should not be included in a standard provision but only contemplated in a particular circumstance where an overwhelming case was made that such an outcome was appropriate. 301 The Minister submitted that as a matter of principle it was difficult to see why two workers doing the same work, side by side in the same workplace, should be subject to different award prescribed conditions of employment on the basis that one was a direct employee and the other an indirect employee engaged through a labour hire company. 302 This simple proposition of equity was, in the Minister's submission, difficult to sustain beyond award prescription, submitting that rates set by enterprise agreement or other over award settlements may reflect factors other than the value of the work. The Minister submitted that there were good reasons, such as the preservation of integrity of the wage fixation system, for keeping the award and agreements stream separate, and why provisions of consent awards or enterprise agreements should not automatically apply to employees of other employers who were not a party to such instruments. The Minister put that this principle was expressed in s 47 of the Act, which instructs the Commission not to regard conditions of employment set by enterprise agreements as standard conditions of employment for other employers. 303 The Minister submitted that, while in some cases, after inquiry, the requirement to pay site rates may be appropriate, it was not sustainable as a general proposition as it would: · Take the form of a prohibition on the use of labour hire except where site rates are paid.

307 The Commonwealth opposed this aspect of the application, putting that labour hire helps businesses manage the risk and cost of recruitment by engaging labour without entering into contracts of employment. 308 The Commonwealth relied on a survey conducted by RMIT that concluded that 2.2 per cent of host employers cited a reduction in staff costs as a primary motivating factor for engaging labour hire workers, the principle reasons being the availability of staff to meet absences and the need for additional skills at short notice. 309 The Commonwealth submitted that labour hire arrangements offered workers an entry to employment and an opportunity to gain a broad range of skills, experience and exposure to different working environments, and a capacity to balance family or study commitments. 310 The Commonwealth contended that labour hire was dominated by workers in highly skilled occupations who are on average better educated than casual employees, suggesting that a growing number of tradespersons and professionals are preferring to work outside the traditional forms of employment. 311 The Commonwealth rejected the hypothesis that labour hire is a less secure form of employment on the basis that the education, skills and experience profile of labour hire employees is such that they would have good opportunities for permanent employment if they chose to pursue them. 312 The Commonwealth submitted that the Unions NSW application would detract from the security of labour hire workers by encouraging some employers to restructure their labour hire arrangements to short term engagement and by refusing to rehire the same labour hire worker on future assignments. 313 For reason of opposition to regulation and the assertion of impeding flexibility, the Commonwealth opposed the claim for labour hire employees to be paid site rates. 314 The Commonwealth characterised the Unions NSW claim as a penalty on business, imposing: a requirement to pay equal remuneration for labour hire employees, in addition to the labour hire agency fee; and, by discouraging business from seeking to secure lucrative contracts or tenders if they do not have sufficient staff to cover this increased workload. Public Employment Office 315 The PEO submitted that there were practical difficulties with the notion that a labour hire employee receive wages and conditions not inferior to a public sector employee, commencing with the difficulty that the work undertaken by a labour hire employee may have no equivalent in the public sector. For example, where a labour hire employee was engaged to do part of a job or where the labour hire employment was multi-skilled, difficulty was encountered in respect to conditions applicable in the public sector which may be career based, not necessarily task specific. 316 The PEO argued that utilisation of labour hire in the public sector was adopted to meet operational needs, including filling skills gaps which are or may be difficult to characterise as of a strictly temporary nature and such a restriction would inhibit productivity and efficiency. 317 The PEO refuted the assertion that use of labour hire employees subverts the proper operation of State industrial instruments, putting that Unions NSW did not explain what it regarded as the proper operation of State industrial instruments and that it failed to recognise that State awards and agreements that apply to labour hire employees are of equal integrity to any other State award or agreement, having been subject to the exact same tests and criteria as any other State award or agreement. 318 The PEO stated that the provisions sought were unworkable in that they imposed present and future obligations that were difficult to identify and impossible to comply with, for example: determining a rate of pay and conditions of employment for a prospective on-hire employee as if that person was directly employed. This approach would create a situation where a labour hire employee working a number of assignments over time would lose the certainty of the industrial instrument regulating the employment with the labour hire provider in favour of a system of changing and uncertain terms, varying from assignment to assignment. 319 The PEO refuted assertions by Unions NSW that labour hire was used to disadvantage employees because, in one example for which details were not provided, prior service as a labour hire employee was not recognised on eventual employment by the public sector agency: nor did the use of labour hire lead to privatise employment in TAFE, suggesting that the application failed to recognise that appointment or non-appointment to a position in TAFE was expressly excluded from jurisdiction by s 19 of the Technical and Further Education Commission Act 1990. 320 The PEO relied on evidence brought to demonstrate the rigour of labour hire contracts, known as Government Panel contracts, that control labour hire engagements in the public sector, and evidence from several agencies that engage labour hire employees, to demonstrate that labour hire arrangements in the public sector required no further regulation. State Owned Corporations

325 The RCSA characterised Unions NSW claim as "control" and "parity", containing three elements of restriction on the use of labour hire, as introducing an obligation to offer full time employment where the on-hire arrangement extends beyond six months, and, in respect to those employees bound by NSW awards, matching wages and conditions of labour hire employees with those paid to direct hire employees. The RCSA noted that the third element of the claim did not capture client employers respondent to a Federal industrial instrument. 326 The RCSA submitted that the provisions sought by Unions NSW were not industrial matters and could not be included in an industrial instrument. 327 In the view of the RCSA there was no evidence to support Unions NSW's assertion that an emerging group of "permanent labour hire casuals" exist in the labour market. The RCSA put that the few examples of long term labour hire brought by Unions NSW were atypical or referred to past events and circumstances no longer in existence. 328 The RCSA submitted that the evidentiary base was too narrow to permit the general conclusion necessary to sustain a State decision or Special Case. 329 The entirety of the evidence going to the on-hired employment model and its usage by employees and employers, including but not limited to the flexibility obtained by both employees and employers, demonstrated that the on-hired employment model was an important and beneficial part of the labour market in New South Wales. That flexibility and the benefits that accrued from the on-hired employment model arose in a much wider range of circumstances than those conceded as "legitimate" by Unions NSW. 330 The RCSA submitted that labour hire companies were in the business of employment, and that involved the development of best practice recruitment, training, safety, career management and payroll systems. The specialisation capability of the on-hire service provider in the administration and management of employment, exceeded the capacity of human resources departments of clients, including many large employers. 331 The RCSA stated that, while a client will concentrate on the core competitiveness of the service or product, successful on-hired service providers concentrate on best practice in employment. 332 The RCSA refuted evidence by Unions NSW of on-hire employees being dismissed from employment without warning or recourse. 333 The RCSA relied on evidence brought that the on-hire service provider was involved in counselling and warnings where necessary, and would often reassign employees where skills or other issues suggested an employee would be more productive and/or better suited. 334 The RCSA proposition was that the disadvantage of not having access to unfair dismissal laws where the applicant claims some unfairness by the client organisation, is not current, referring to Koppe v Compass Group (Australia) Pty Ltd, QIRC (B460 of 2004) and Isaacs v Kelly Services (Australia) Ltd, AIRC (U2005/1829). 335 The RCSA's view was that the evidence supported the conclusion that employers who used on-hired employees did not do so to prevent access to unfair dismissal laws and, irrespective of the reasons for the end of an assignment, an on-hired employee was in a much better position than a direct employee in respect to finding future employment as they had the assistance of the labour hire provider. 336 The RCSA argued that an on-hired casual employee was comparatively advantaged to a directly hired casual employee. 337 The RCSA then submitted that on-hire employment should be regarded as a form of standard employment, noting that on-hired service providers employed around 9.4 per cent of all casual employees in Australia, and 1.1 per cent of permanent employees. 338 The on-hired employment model was now an important and permanent feature of the labour market in New South Wales and Australia. Its use was motivated almost exclusively by the legitimate need to obtain increased flexibility, not cost cutting or to subvert industrial instruments or reasons of inequity. 339 The RCSA put that the research by Dr Brennan established the reasons for on-hire labour as: (a) Additional staffing requirements (30.8 per cent);

(f) There is no adequate evidentiary foundation, or good reasons consistent with the objects of the Act established by Unions NSW that warrants intervention in the form of the proposed cl (d)(ii) of the Application or at all, in respect of the conditions of employment for employees in on-hired assignments where the work is covered by a NSW Award or Enterprise Agreement. 344 There was indirect evidence and survey data to support RCSA's submission that on-hire employment was attractive to many people as it provided an opportunity to obtain a work/life balance suitable to their needs and interests, and to "test" careers and/or employment opportunities, and as a stepping stone to access full time employment. 345 On-hire employees were in a far more advantageous position than direct employees in the event of business failure. For example, at the time of the Ansett collapse, on-hired employees were paid all entitlements and reassigned to complete traineeships as compared to direct employees of Ansett who were not paid or placed in other employment. 346 In this regard the RCSA noted that where work was performed either as a direct employee or on-hire employee within the area, incidence and duration of a NSW common rule award, all of the terms and conditions of the common rule award would apply, which the RCSA submitted in some cases would be more favourable than those arising from the application. 347 The RCSA submitted that where an enterprise agreement displaces a common rule award it is not appropriate that on-hire employees receive the benefits thereof without the same agreement and accordingly should not be directed by general order or award prescription as to do so would undermine the enterprise bargaining process. 348 The RCSA submitted that the international experience in regulation of temporary work arrangements was unhelpful as the circumstances and content of that regulation did not reflect the NSW experience, putting that in any event the evidence of economic advantage and benefit to on-hired employees did not warrant regulation in this State. Employers First

349 Employers First generally supported the arguments of RCSA. 350 Employers First relied on evidence from a number of member organisations to demonstrate the responsible and effective use of labour hire. 351 Employers First referred to the evidence in respect to Noakes Nursing Service that: In terms of our work with facilities, Noakes is called on a regular basis by the facilities in our area to cover shifts that facilities are unable to cover with their own staff due to a shortage of nurses. For example, last week Noakes was required to fill 250 nursing shifts with lengths from 4 to 10 hours in local nursing homes and hospitals. 352 Employers First opposed the requirement that client or host employers offer employment to labour hire employees who have been on hire in their business on a systematic and regular basis for more than six months. 353 While it acknowledged the broad jurisdiction of the Commission to require an employer to employ a person, however, Employers First submitted that the instant claim is not an exercise of that jurisdiction as it did not require the employment of a particular person, but sought to impose a condition in a commercial contract between the labour hire provider and the client, not in its capacity as an employer but in its capacity as a contracting entity, that a certain class of person would be offered employment. 354 The proposal as claimed was impractical, unworkable and struck at the fundament right of an employer to choose their own employees. 355 Employers First relied on the evidence of Noakes Nursing Service that many of its clients, particularly in the aged care industry, did not have the desire or capacity to employ people directly, especially where services were provided to an individual or family. 356 The evidence of Mr Ron Pike of Boral was relied upon. He stated that a labour hire employee might be engaged for a single task such as operating a piece of machinery while full time permanent employees were selected on a much wider and more rigorous criteria with a view to long term development. This did not prevent a labour hire employee from applying for a vacancy and securing a position on merit - that was quite different to a form of conversion to direct employment. Employer Group

(i) increasing use of labour hire employers by employees seeking work; (ii) employers seeking commercial advantage through enhanced flexibility; (iii) corporate restructuring following the recession of the early 1990s; (iv) increased female participation rates in the workforce (v) cost minimisation efforts by companies, especially small firms; (vi) employee desire for work arrangements that reflect social trends; (vii) agreement-making at the enterprise level; (viii) to overcome short term needs and fluctuating demands; (ix) de facto probationary period; (x) to avoid the risks associated with direct employment; (xi) as a cost saving to the client's business (including recruitment and payroll costs); (xii) internal headcount restriction; (xiii) to outsource an administrative burden; (xiv) lower administration costs than direct employment; (xv) able to supply employees more efficiently than direct employment; (xvi) to provide security for existing permanent employees given fluctuations in demand; (xvii) overcome skill shortfalls or to gain specialist skills ; and (xviii) unable to offer regular work 360 The Employer Group submitted that casual employees of labour hire companies should be treated as employees of the labour hire provider for the purpose of casual conversion and not acquire a right to elect for conversion with the host employer, which would not be a true reflection of their employment. 361 Restricted access to finance by casual labour hire employees was a popular myth: the evidence of Mr Robert Barber was that Adecco had made arrangements with the National Australia Bank for preferred and discounted access to finance for the Adecco on-hired workforce. This was supported by evidence that the employment status of a person was part of the assessment made by financial institutions but was not determinative. 362 Ms Irene Vtikiotis' evidence was that restriction of labour hire to short term irregular engagement would have a detrimental effect upon cost structures and quality and safety issues in that long term regular hire allowed the labour hire provider to form a working relationship with the client, developing safety and operational procedures, coupled with experience of on-hire employees in a stable work arrangement. The evidence was that higher cost and safety concerns arose from a larger number of short term intermittent assignments, leading to the decreased use of labour hire, resulting in a loss of competitiveness for business regulated by State awards and less employment opportunities for persons entering or returning to the labour force. 363 The restriction of labour hire to work of a strictly temporary nature would have little impact on local government as long term labour hire was not prevalent in local government because of the operations of s 351 of the Local Government Act. As a consequence, 74 per cent of labour hire employment in the local government sector was for less than six months. However, some councils, particularly in rural New South Wales, required labour hire for longer periods to attract specialist staff or to fill in for a series of employees who were consecutively on leave. 364 The Employer Group questioned whether labour hire employees engaged to meet peak demands would be regarded as of a strictly temporary nature or whether this would lead to disputation. 365 The wage parity and conversion to employment of the host employer aspects of the claim were claimed to be unworkable and prohibited by the Local Government Act. 366 The Employer Group submitted that the application as framed prohibited the use of group training companies which essentially provided opportunities and trainees on-hire to councils. Conclusions

367 There is little doubt from the evidence that the use of labour hire has grown dramatically in recent years and in particular from the mid-1990s, although forms of labour hire appear to have been in existence for decades. A March 2004 research paper prepared by the Information and Research Services of the Commonwealth Parliamentary Library (see Labour hire: issues and responses - Research Paper No 9 2003-04 by Steve O'Neill, Economics, Commerce and Industrial Relations Group) noted that relevantly recent data now being compiled on the sector suggested that it was a growth industry with many large employers increasing their use of labour hire arrangements in preference to direct employment. The paper summarised the concern of the unions at the growth of unstable non-regular work routines having implications for the living standards of agency workers and the fear that this category of employment has the potential to undermine award regulation. There had been Government Inquiries, including a New South Wales Government Inquiry and most States had moved to registration of labour hire providers. The unions, including Unions NSW, had continued to express concerns that the current operation of labour hire and level of regulation was inadequate and did not provide sufficient protection to persons hired out by labour hire agencies. In assessing the benefits and detriments of this form of employment, the research paper stated: Employment placement or labour hire arrangements have benefits for workers in the sense of having an agent scouting for work and perhaps tailoring the conditions - say, short hours or temporary periods - to suit the worker. For businesses the immediate advantage is 'numerical' flexibility particularly the ability to add labour during periods of demand, while not increasing the prime workforce numbers. In many respects then, labour hire appears to be a feature of a modern labour market. (at page 2) 368 Of particular interest to the present claim is the view expressed in the research paper that at least some of the growth in labour hire appeared to have been coming from the replacement of directly employed labour with large companies seeking to increase the labour hire component of their workforce at the expense of ongoing employees. 369 Despite these ongoing concerns expressed by the union movement generally, it is no part of the application to seek to prohibit the use of labour hire but rather to accept the reality of its existence in the present employment market and to provide mechanisms for addressing the more undesirable aspects of this form of engagement where it is found to exist. Indeed, there seems to be an acceptance of the benefits to some persons of being able to seek employment in this way and in a way that meets their various individual requirements. 370 In assessing the appropriateness of the regulation sought by the Unions NSW's application, two important factors need to be recognised: (a) the part of this decision dealing with casual conversion will have equal application to casuals employed by labour hire companies who fall within the terms of the proposed provision; and

The application therefore needs to be considered against that background, the fact of the widespread nature of this kind of employment, the benefits some individuals derive from being able to be employed in this manner, and the caution that should attend the adoption of provisions which might tinker with a delicate employment market in a way that has unintended and unwanted consequences. 371 Although Unions NSW may regard their application as being a modest intrusion into the area of labour hire, the litany of issues raised suggests that there are real dangers in attempting to approach those issues by way of a broad and general prescription as sought by the applicant. The evidence suggests that the variety of concerns raised are not wholly theoretical or unfounded and raised the real prospect of adding another layer of complexity to what is already a legally difficult and complex arrangement. 372 Having stated that broad proposition it would be erroneous, however, to conclude that the system of labour hire operates with fairness and equality of treatment throughout industry. It is of particular concern that the evidence demonstrated examples within the public sector, including TAFE, showing a lack of clarity in the arrangements made with the labour hire provider as to the level of work to be performed and more than a suggestion that rate "matching" (which the employers rely upon as being significantly widespread) is not a consideration. The PEO's submission that the failure to match rates will arise in circumstances where the work being performed is not comparable with work graded and covered by public sector awards, does not exactly find support in the evidence and rings somewhat hollow having regard to the extraordinary width of employment covered by public sector awards and other industrial arrangements. 373 These concerns, and others raised in the Union's case, demonstrate why Unions NSW is concerned about the operation of some of the labour hire arrangements, but the evidence does not support the broad and general regulation set out in the application. 374 There is force in the Minister's opening contentions to the following effect: (a) as a matter of principle, it is difficult to see why two workers doing the same work, side by side in the same workplace, should be subjected to different conditions of employment just because one of them is directly employed by the host employer at the workplace, while the other is engaged indirectly through labour hire or contracting out arrangements, at least to the extent that their conditions are governed by an award;

(c) any consideration of site rates must take into account the proper work value of the work to be performed. There may well be times where there is a proper basis to differentiate between the pay and conditions that are appropriate for different employees, even if they are working alongside each other. 375 Quite apart from compliance difficulties, also raised by the Minister and other parties, there are quite fundamental problems raised with an application of the width of that sought by Unions NSW. As suggested in a number of submissions what appear to be relatively few cases of unfairness will be best addressed by resort to the Commission's dispute settling process and/or by an award by award approach where the particular problems of an industry or workplace may be properly considered. In this respect reference was made to the decision of Staunton J in Kellogg (Aust) Pty Ltd v NUW [2003] NSWIRComm 167 a case where work had been contracted to a labour hire agency that had paid site rates but a dispute later arose when the labour hire contract was let to another agency that proposed to pay lower rates. Her Honour declined to extend the site award to labour hire workers but accepted that the case raised issues that warranted a new award to be made for labour hire workers that contained conditions based on the common rule award including rates of pay that were based on those found in the consent site award. The Minister noted that such an approach was quite permissible on a case by case basis because while there was a general industrial principle that conditions won through bargaining could not form the basis for general standards for award description, that principle did not prevent the Commission considering consent arrangements in a particular case. 376 Having regard to the evidence and the submissions, it is not appropriate that a general Labour Hire award provision should be adopted by the Commission. The preferable course is that the other forms of relief available under the Act should be utilised in a case by case approach to deal with anomalies and unfairness when they arise in the context of labour hire. The application by Unions NSW in this regard is therefore rejected. ___________

(viii) Nothing in this clause affects any obligation upon the employer to provide notice or to pay severance or redundancy pay arising under this or any other award or enterprise agreement or order of the Commission pursuant to the Employment Protection Act 1982. Submissions - Unions NSW 381 Mr Hatcher submitted that the evidence in this part of the case suggested that the overall majority of contracted work is short term or of limited requirement; is not currently done by existing employees; is to supplement the existing workforce; is to meet a peak workload or to provide specialist skills not available within the existing workforce; and, is therefore entirely outside the scope of the claim. 382 Mr Hatcher referred to some well documented industrial disputes concerning contracting out of work, stating that the claim is intended to provide a template by which the issues that arise may be resolved without dispute. 383 It was not challenged that contracting out of work is not uncommon and has had increasing use in some sectors. 384 Mr Hatcher put that the contracting out of entire segments of work has been used inappropriately to reduce the number of employees engaged directly by an employer, and to reduce rates of pay and working conditions of those engaged by contractors to work in their place. 385 Evidence was given of Greens General Foods contracting out its distribution function to TDG Logistics; J Blackwood and Sons contracting out the provision of all labour to Skilled Engineering; Colgate Palmolive contracting out the operation of its distribution centre to OnLine Distribution Services, and the Western Sydney Area Health Service contracting out cleaning. 386 In all of those examples the size of the employer's workforce was reduced. Further, the wages and working conditions of those performing the work were reduced because the contractor's employees were subject to a different industrial instrument to employees engaged directly by the employer. 387 Mr Brian Harris, General Secretary of the USU, gave evidence of contracting out in the Local Government sector in which "internal bids" are made. Mr Harris deposed that in many cases the internal bid, based on the Local Government Award, was unsuccessful as the external contractor was not bound by that award and applied an industrial instrument which contained terms and conditions inferior to those in the Local Government Award. Consultation

Group Training Companies The company when hiring apprentices or trainees from a Group Training Company shall advise the Group Training Company in writing before hiring that: * They need to have an Enterprise Agreement with the union; * The apprentices and trainees hired to the company shall be paid at least the rates and conditions of this agreement; * The Group Training Company shall be notified if a site/project allowance is payable. … 169. In the instant case, the impugned clauses 32 and 33 have the clear purpose of protecting the terms and conditions of those persons engaged in the performance of work at the relevant John Goss enterprise. Similarly, having regard to the nature of the "pattern" agreements pursued by the respondent, it is possible to characterise cl 31 as being directed to a similar purpose. The terms of the provisions themselves, together with the evidence of Mr Riordan and the history and nature of the agreements negotiated by the respondent, clearly identifies the underlying intention of these provisions as being, in essence, to "create a level playing field so that the cost of labour was not used by any company as a commercial advantage". This protection of conditions is established by the "pattern" nature of the agreement and the respondent's attempts to ensure that employers in the relevant section of industry compete equally insofar as labour costs are concerned (noting that the relevant clauses were apparently the same in every such agreement), and the agreements extension to the various clauses in the instant agreement providing equal conditions for both direct employees and external labour working for John Goss. 170. Moreover, as was observed recently by Walton J, Vice-President in Lend Lease Hotel Intercontinental (Stage 1) Project Award at [17], "there is jurisdiction to grant the contractor clauses by virtue of an implied power arising from the particular conferral of power on the Commission under s 10", referring to the decision of Wright J, President in A v The Commission of Children and Young People (No.4) (2000) 104 IR 131 at [33] - [39]. Whilst these observations were made in the context of the making of an award, we consider that the reasoning and approach is equally apposite to the jurisdiction to approve an enterprise agreement containing a contractor clause…

... 173. We consider that clauses 31, 32 and 33 may properly be characterised as having the dominant purpose of establishing a mechanism for the protection of the terms and conditions of the relevant group of employees working under the agreement for John Goss. Clause 32 achieves such a result in terms. Clause 33 may on one view achieve this result in terms. That clause merely requires that John Goss advise a Group Training Company that it have an agreement with the union and that apprentices and trainees are to be paid rates equivalent to those provided by the John Goss agreement. As was conceded by Mr Dawson, there is nothing in the clause that would necessarily result in a change in the current industry practice. Having regard to the history of the clause including the terms in which it had existed in previous agreements, and having regard to the evidence of Mr Riordan as to its purpose, the clause, in our view, is properly characterised as for the protections of the terms and conditions afforded trainees and apprentices working with John Goss. This conclusion also accords with the Commission's knowledge of the industry and the industrial relations environment operating in it. 174. As for cl 31, whilst its terms are somewhat broader, it is to be remembered that the enterprise agreement only operates with respect to labour hire employees to be placed with the particular enterprise. Having regard to the evidence of Mr Riordan, we are satisfied that the broad language of the provision should, in its proper construction, be read down so as to be reflective of an enterprise agreement with the union that is on terms and conditions that are equivalent to those contained within the John Goss agreement. We note that counsel for the respondent conceded as much. 175. The impugned clauses are, in our view, an available mechanism for the protection of terms and conditions of external labour supplied to John Goss Pty Ltd. 400 In Kellogg (Aust) Pty Ltd v NUW [2003] NSWIRComm 167, Staunton J held that she would not extend the Kellogg consent award to cover casual employees of contractors, however, on application by the National Union of Workers (NUW), made a new award to apply to casual employees of contractors working in the distribution section of the Kellogg facility at Botany that provided the same rates of pay as Kellogg employees, and resolved a dispute by preventing the payment of lower rates of pay to the contractor's employees. Her Honour said: 98. Overall, the NUW's claim that the work being performed by those workers in the distribution area at Botany and those casual employees engaged by the Company to perform those tasks identified in Clause 13 of the Consent Award is the same, or of a similar nature, is I believe, generally correct. The fact that the Company has utilised the services of such workers interchangeably would tend to support that conclusion.

However the Commission may consider it appropriate to grant, at least in part, applications of the sort made by Unions NSW on an award-by-award basis where it is satisfied that in respect of a particular industry there are employers who contract out areas of their business merely in order to reduce the wages and conditions of workers, to avoid or reduce statutory obligations (such as workers compensation premiums) or as a mechanism to de-unionise the workforce. 406 In addressing the particular provision the Minister opposed a prohibition on contracting out for prescribed reasons, putting that this would create an impediment without corresponding benefit, and give rise to extensive litigation over motive, cause and effect, with a reverse onus of proof upon the employer that would only add further complexity. 407 The Minister submitted that the process of consultation is appropriate and, where the union was concerned that contracting out was motivated by an improper purpose, an application could be made to the Commission to deal with that particular case. 408 The Minister noted that Chapter 5 Part 1 of the Act, Principles of Association, already proscribes conduct of the type sought to be regulated and that no argument has been advanced as to why those provisions are not sufficient. A general provision, as sought in the claim, should be left to legislation with the Commission free to act on a case by case basis where this issue arises. 409 The Minister opposed a requirement that employers make observance of site rates by a contractor a condition of the contract, putting that such an award provision would be unenforceable and accordingly ineffectual. The Minister submitted that the aspect of the claim that would see the site rates of the client paid to employees of the contractor working on the contractor's own site on work for the client, could result in a range of different rates and conditions of employment in the one location and/or different rates on different days for the same employee who did the same (or different) work for different clients. 410 The Minister submitted that, on application, a situation should be considered on its merits having regard to such issues as: a) The nature of the work to be contracted out; b) The number of employees of the host employer affected; c) Whether alternatives to contracting have been fully explored; d) The history of industrial arrangements on the site; e) The reason for the contracting out; f) The industrial arrangements the contractor already has in place; and g) The level of disadvantage or otherwise to employees affected. 411 The Minister submitted that the claim that the employer (or client) ensures that all displaced employees are found suitable alternative work so that no employee can lose employment as a result of contracting out, is impractical. 412 The Minister would support a principle to the effect that awards could be varied to include an obligation that, in contracting out situations, employers should consider, and where feasible provide, suitable alternative employment for as many of the displaced employees as is reasonably possible. When considering the form of such a variation it would be appropriate to have regard to any existing redundancy clause with a view to ensuring that the new clause is consistent with that redundancy clause. 413 The Minister supported the requirement to give notice to employees in the context of consultation but did not support the imposition of an additional 12 weeks notice after consultation. 414 The Minister put that the cost of the claim was difficult to determine, noting that expert opinion was divided. 415 Mr Richard Cox, of NSW Treasury, stated that there is no economic model to assess the cost impact. That view was supported by Dr Lewis who agreed that it would be difficult to model or numerically assess the impact of the claim. 416 Dr Lewis joined Mr Bennett and Professor Wooden in the view founded on general economic theory, that any regulation of the labour market has a tendency to restrict employer flexibility and so impact on the demand for labour. 417 The Minister noted that Mr Bennett accepted that he was wrong to suggest that the proposed clause would cost 30,000 to 60,000 jobs. 418 The Minister did not accept the contrary opinion offered by Professor Mitchell that granting the claim would have ongoing positive economic effects. 419 The Minister submitted: While the Commission would be cautious in light of the evidence as to economic impact, it is not the case that the Commission is unable to uphold the claim in circumstances where the effect on the economy of NSW is not capable of being fully ascertained, as has been submitted by some employer parties. Such a submission misconstrues s146(2). The Commission is required to 'have regard' to the state of the economy of NSW and the likely effect of its decision on that economy. But the Commission is not required to do more than consider the evidence put before it. If the Commission ultimately finds that the evidence in that respect is inconclusive (as it may well do in the circumstances of this case, at least in respect of some of the claim), the Commission then determines the matter on the material otherwise before it, having met the requirement to 'have regard' to that material.

420 The Commonwealth submitted that the claim by Unions NSW is unnecessarily onerous and extreme, asserting that compliance with the terms of the claim would make the legitimate practice of contracting out impossible, thus preventing employees from making practical decisions to increase productivity, improve competitiveness or adapt to changes in economic conditions. 421 The Commonwealth argued against any form of regulation on contracting arrangements, putting that the contracting out provisions run directly counter to the National reform agenda. 422 The Commonwealth advised that it has committed to introducing legislation to protect the status of independent contractors, anticipating that this legislation will prevent federal awards and agreements from containing clauses that restrict or put conditions upon engagement of contractors. 423 The Commonwealth acknowledged that contracting out of work does result in a loss of jobs and, in some cases, also results in the contracted work being performed at a lower rate of pay. The Commonwealth contended that contracting out is more often a means of limiting redundancy and retrenchment through efficiency and cost improvement; that where work can be done by a business using lower cost labour this is no more than the operation of the market; and that, subject to observing minimum wages and conditions, businesses must be free to engage labour on the terms best suited to their operations. The Commonwealth submitted that there is no evidence to suggest that the reduction in pay and conditions of employment from contracting out of work is sufficiently widespread to warrant the remedy proposed in the claim. 424 The Commonwealth opposed the 12 week consultation period sought, arguing that such advance discussion could inform competitors of product and pricing mix intentions, and in other cases opportunities may be lost through delay. 425 The Commonwealth submitted that in the event consultation is required, no fixed time frame should be prescribed and that the requirement to consult with a trade union is inappropriate having regard to union membership levels of 23 per cent of the workforce nationally and 17.4 per cent of private sector employees in New South Wales, meaning that many employers contemplating contracting out will have no union involvement in their workplace.

439 The SOCs submitted that they did not oppose proper consultation with employees with respect to any decision to contract out work, or indeed any other issue of significance, and in any case would engage in such a process, putting that many of the current awards or arrangements already make such a provision. 440 The SOCs put that contracting out of work takes place for a range of reasons, including the acquisition of specialist skills and/or equipment, and to meet peaks in demand for labour. 441 The SOCs stated that Unions NSW and various affiliates have been significantly involved in the development of those arrangements and instruments that have worked well and had not been subject to any objection or criticism by Unions NSW or relevant unions. The SOC's opposed the establishment of a Test Case standard on both jurisdiction and merit grounds. 442 The existence of contractor entry procedures was acknowledged by Mr John Robertson, Secretary of Unions NSW, and Mr Allen Drew, President of the Energy Division of the CFMEU. 443 Both Messrs Robertson and Drew gave evidence of protracted negotiation, conciliation and mediation between the parties, and in this Commission, to arrive at those procedures, and disputation on an occasional and regular basis over omissions in and the application of the procedures. 444 The SOCs brought evidence to demonstrate the formal structures of consultation, the requirement that all contractors comply with all relevant industrial legislation, and are required to submit detailed site specific occupational health and safety and rehabilitation plans, detailed risk assessments and safe working method statements. 445 The SOCs complied with the NSW Government "no forced redundancy" policy and accordingly measures for negotiating alternative work were irrelevant to their operations. 446 There was evidence of particular disputes covering contracting out of work that had been resolved through conciliation and arbitration in this Commission to support the SOC's submission that the processes applied are adequate and satisfactory and do not require the prescriptive intervention sought in the application. Submissions - Public Employment Office

453 The Employer Group further submitted that in the case of Local Government and the Local Government Award, where councils both contract out work and are contractors, (typically to the Roads and Traffic Authority to build and maintain roads), security of employment of council employees would be adversely effected and councils would be impeded in executing their statutory obligations and meeting community expectation. 454 Unions NSW's submission that the clause is only enlivened where employees are displaced by contracting out of work offers no comfort to Local Government as obligations pursuant to the State Emergency and Rescue Management Act 1989 may require the use of contractors who displace existing employees. 455 The Employer Group put that the competitive tendering provisions of the Local Government Award, which provide for notification and consultation where a decision to put work to competitive tender is taken, were made by consent of the parties, had worked well given the absence of recorded disputes, and should not be altered by granting the instant claim. 456 The Employer Group noted that in the event the claim is granted for displaced employees to be employed by the contractor, councils acting as contractors would be prevented from compliance by the merit selection requirements of the Local Government Act. Conclusions 457 Submissions for the Minister spent some little time dealing with the economic impact of granting the claim pursued by Unions NSW, concluding that while it was hard to assess those effects it would be prudent for the Commission to be cautious when considering the claim and more particularly those aspects of the claim which were regarded as "largely unprecedented" such as the contractor provisions. As with the claim in relation to labour hire, this aspect of the Unions NSW claim seeks to significantly intrude into an area that has hitherto been the subject of individual awards or site arrangements and to do so by way of quite significant prescription via a general provision. Some of the aspects of the claim, as suggested by those who opposed it, had little evidence to support the imposition of the proposed requirement (for example, the 12 week period for consultation before sub-contracting out could take place). It seems from the difficulties raised by those who oppose the claim that such detailed prescription as sought is a particular example of where "one size fits all" industrial regulation is inappropriate. 458 Many of the considerations of this aspect of the Unions NSW claim are similar to the issues raised for consideration in the labour hire section of the claim. In relation to contracting out, Unions NSW stated that the claim was consistent with the approach adopted by Staunton J in the Kellogg case thus suggesting that the degree of opposition faced by the claim was unwarranted. The difficulty with that submission is that Staunton J was dealing with a particular workplace and the Commission accepts that there is no reason why the general types of claims sought in the contracting out provision could not be dealt with in proceedings dealing with a particular award, a particular workplace or a particular industry. The real difficulty arises from fashioning a general provision that will address the legitimate concerns of Unions NSW but will not have unintended or anomalous consequences, or otherwise provide a regime that is totally unjustified in a particular circumstance. In this respect it should be noted that many of the employers accepted the need for consultation before contracting out work with many having detailed provisions in this regard. Similarly, in particular circumstances, employers had agreed to make arrangements for the continued employment of displaced workers as a result of contracting out, maintaining rates paid at the site for employees of the contractor, and assisting in finding alternative employment. The issue is not whether these outcomes should be available but whether it is appropriate for the Commission to adopt a detailed and generally applicable set of principles to govern the process or to permit these matters to be dealt with on a case by case basis. 459 Ultimately, the assessment has to be made that the lack of flexibility in the claim defeats it as a practical means of regulating these various aspects of contracting out of work. The legitimate concerns of employees and their unions, supported by legislative provisions, arm employees with the means to address unfairness when contracting out takes place. The case by case approach, therefore, appears at present to be the most appropriate way to address these issues. 460 Indeed, the appropriateness of this approach is confirmed by the following concessions made by Unions NSW during addresses: (a) on the evidence, the overall majority of contracted work is short term or of limited requirement; is not currently performed by existing employees; is to supplement the existing workforce; is to meet a peak workload or to provide specialist skills not available within the existing workforce - and is therefore entirely outside of the scope of the claim; (b) the claim is designed to provide a template by which issues may be resolved; and (c) protection is already provided by Chapter 1, Part 5 of the Act as well as through provisions of the WRA. 461 With the majority of contracted out work falling outside the claim, the existence of a developed jurisprudence in the Commission to deal with the minority of cases where disputes arise and the supporting protective provisions of the Act, a case has not been made out for the adoption of the additional detailed regime by Unions NSW. 462 The Minister, however, did indicate areas in which the Commission might announce a general principle for application on a case by case basis. In relation to prior consultation, the suggested principle was in the following terms: (a) on application, awards can be varied to include an obligation to consult prior to "contracting out of work" (as that expression is defined); (b) when considering the form of such variation regard will be had to any existing redundancy clause with a view to ensuring that the new clause is consistent with that redundancy clause. 463 In relation to the obligation to find suitable alternative employment, the Minister supported a principle that awards could be varied to include an obligation to the effect that in contracting out situations an employer should consider and where feasible provide suitable alternative employment for as many of the displaced employees as is reasonably possible. When considering the form of such a variation it would be appropriate to have regard to any existing redundancy clause with a view to ensuring that the new clause is consistent with that redundancy clause. In relation to the giving of notice when a decision had been made to contract out, to permit discussions at the workplace, the Minister supported the giving of notice and, it would seem, endorsed the giving of the notice as a general principle. 464 There is no doubt that in various cases the Commission has given effect to these approaches, suggested as an alternative by the Minister to be made the subject of a statement of principle. Having regard to that industrial history, the clear availability of these alternatives and the Commission's conclusion that this aspect of the claim should be dealt with on a case by case basis, it is sufficient that these various statements be noted as the way in which the Commission is able to operate in the hearing and determination of any particular dispute or application concerning contracting out. Apart from this recognition, the claim by Unions NSW in relation to contracting out is not accepted. ___________

Jurisdiction 466 As the jurisdictional foundation of his case, Mr Hatcher submitted that s 10 of the Act, in requiring the Commission to set fair and reasonable conditions of employment, provided adequate jurisdiction. 467 Mr Hatcher submitted that the High Court in Re Cram; Ex parte N.S.W. Colliery Proprietors' Association Limited (1987) 163 CLR 117 included issues of occupational health and safety as an industrial matter as observed in Re NSW Department of Community Living and Residential (Interim) (State) Award (2000) 100 IR 447 where the Full Bench of the Commission said: It is a matter for the Department to determine what level of care is required to be provided to disabled people living in a group home, in accordance with the statutory and other responsibilities which it has to those clients. The Department meets those obligations by employing staff to perform the necessary work. What must therefore be determined in these proceedings, where issue is being taken as to the requirements made of the employees who are employed to perform sleepover work, is what award provisions are required to ensure that the relevant conditions are 'fair and reasonable'. This includes consideration of the safety concerns which were raised. As was observed in the unanimous decision of the High Court in Re Cram; Ex parte N.S.W. Colliery Proprietors' Association Limited (1987) 163 CLR 117 (at 135): Many management decisions, once viewed as the sole prerogative of management, are now correctly seen as directly affecting the relationship of employer and employee and constituting an "industrial matter". A dispute about the level of manning is a good example. It has a direct impact on the work to be done by employees; it affects the volume of work to be performed by each employee and the conditions in which he performs his work. So also with the mode of recruitment of the workforce. The competence and reliability of the workforce has a direct impact on the conditions of work, notably as they relate to occupational health and observance of safety standards. Employees, as well as management, have a legitimate interest in both of these matters. 468 Mr Hatcher further relied upon Re Pastoral Industry (State) Award (2001) 104 IR 168: By way of contrast, we note that there is no restriction under the Act upon award conditions dealing with occupational health and safety matters, as the recent decision of the Full Bench in New South Wales Department of Community Services Community Living and Residential (Interim) (State) Award (2000) 100 IR 447 makes plain. The Full Bench of the Commission there awarded detailed provisions directed to ensuring the safety of employees in a particular working environment. It appears that such an award could not have been made by the AIRC under the WR Act. The Federal Award had, of course, traditionally been directed (as has the existing State Award) to significant occupational, health and safety issues.

470 There was some controversy as to whether labour hire or contractor employees are inherently at greater risk than permanent employees. 471 The evidence of Professor Quinlan (whose evidence is referred to in more detail subsequently) was that studies undertaken by him establish a link between precarious employment and inferior occupational health and safety outcomes. 472 This was supported by an American study by Rebitzer (published in 1995 (J Rebtizer (1995) 'Job safety and contract workers in the petrochemical industry' Industrial Relations, Volume 34, pp 40 - 57)), which found that a higher accident probability amongst contract workers in the petro-chemical industry was partially explained by their being more likely to engage in higher risk tasks. 473 Unions NSW brought evidence in respect of structural change in employment, and the New South Wales and Australian economy from Professor Quinlan, from the School of Industrial Relations and Organisational Behaviour at the University of New South Wales. Professor Quinlan is also currently a member of the Research Advisory Panel of the National Occupational Health and Safety Commission (NOHSC). Professor Quinlan has undertaken substantial research in conjunction with Dr Claire Mayhew, Professor Phillip Bohle, Dr Anne Williamson, Dr David Kennedy, and Professor Richard Johnstone and has funding from the Australian Research Council in the form of a Discovery Grant project. 474 The evidence of Professor Quinlan was that: Eminent scholars have acknowledged the importance of this research. For example, professor Nicholas Ashford, Massachusetts Institute of Technology (MIT) (in Occupational Medicine: State of the Art Reviews 1999 14/3:485-95) described my work with several colleagues on the OHS effects of precarious employment as 'authoritative'. My work has been cited by researchers in leading international journals such as the American Journal of Industrial Medicine, Journal of Occupational and Environmental Medicine, American Journal of Public Health, Safety Science and Scandinavian Journal of Work Health and Environment . 475 Professor Quinlan deposed that in 2001 he was asked to write a review of research on the occupational health and safety effects of contingent work/precarious employment for the World Health Organisation Global Occupational Health Network Newsletter, which he said provided a good starting point to examine evidence on the occupational health and safety effects of casual/temporary and labour hire work. 476 The evidence of Professor Quinlan was that 88.6 per cent of determinate studies linked precarious employment with inferior occupational health and safety outcomes in terms of higher injury rates, hazard exposures, disease, and work related stress. Professor Quinlan said that 90 per cent of determinate studies linked precarious employment to worse stress outcomes. 477 The evidence of Professor Quinlan was: At a general level, the research review data set clearly shows there is a rapidly growing and already substantial body of international evidence that job insecurity and contingent work arrangements is associated with a significant and measurable deterioration in worker health, safety and wellbeing. Further, findings from research focusing on contracting out/home-based work and temporary work arrangements are entirely consistent with this overall set of results. Such a decisive set of results is unusual for such a large review of scientific research. It is a result that should give cause for concern given the growing significance of these types of work arrangements. For example, given that over 25 per cent of the Australian workforce are employed as a casual or temporary worker it is fair to say this evidence suggests they face an elevated risk of injury and disease due to their employment status. and further: Most studies of temporary workers concentrate on safety outcomes, predominantly in terms of injury. Taken as a whole, this research, undertaken since the 1980s in a range of countries, provides strong if not compelling evidence that temporary workers are at an increased risk of suffering an injury at work in comparison to permanent workers. It also appears that the shorter the contract the greater the risk, something that - if confirmed - would have serious implications for labour leasing and industries/workplaces where there is a rapid 'throughput' of workers. 478 Professor Quinlan observed that a large study of the United States petrochemical industry undertaken by Rebitzer found: [T]he higher 'accident' probability contract workers compared to direct hires was partially explained by the greater likelihood of contract workers to engage in high-risk tasks, be less experienced, and receive less safety training. Rebitzer found that closer supervisions by the host plant led to lower injury rates among contract workers but that the training and experience of contract workers was "less effective in reducing the risk of accidents than is that of direct-hire workers". 479 Professor Quinlan deposed that a telephone survey of 5,200 workers in Ireland found that temporary workers and those in organisations that had recently undergone restructuring reported more bullying than other categories of workers. 480 Professor Quinlan concluded that employers do not take the same level of interest in training casual/temporary employees, particularly where there is a high rate of staff turnover. Professor Quinlan's evidence was that: As has been noted elsewhere (Mayhew and Quinlan, 2000), this lack of training and support means that even where temporary workers are not at relatively greater risk of exposure to violence they can be in a more vulnerable position to handle those risks. It should be noted here that casual employment is pervasive in a number of industries where there is a relatively high risk of cash-related crime or customer misbehaviour (Mayhew and Quinlan, 2000). Further, where the job demands an ability to diffuse potentially hostile situations, protect others or where site specific knowledge is vital (such as 'bouncers' at a club or security guards at a hospital) casual positions may make it hard to attract applicants with the requisite skills and training. 481 Professor Quinlan deposed that research into the health effects (including hazardous exposures) of temporary employment is limited, putting in part because health and medical researchers have only recently begun to systematically explore the effects of employment status and in part because it is difficult to undertake longitudinal studies of workers who are changing jobs. 482 Mr Hatcher relied upon an RCSA survey carried out by Dr Brennan which demonstrated that the responsibility for safety can be lost between the host employer and the labour hire company. This survey at p 30 reported that: [162.2] 22% of host employers rarely or never provide comprehensive safety inductions for employees of labour hire agencies before they commenced work, and a further 22% only did this sometimes [p 34]. This is despite 85.3% saying that they thought it was the host employer's role, not the labour hire agencies role, to provide safety inductions. 483 The survey also revealed that some labour hire companies reported host employer obstacles in conducting pre-placement safety assessments. Approximately 50 per cent of labour hire firms reported that they have identified workplace hazards during pre-placement occupational health and safety assessments that had escaped the notice of the client. 484 The survey also reported that 5 per cent of clients thought that their workplace was less safe as a result of using labour hire and that over 45 per cent of respondent labour hire companies reported that clients had requested that they enter into a "hold harmless" arrangement in the labour hire contract which indemnifies the host employer against any common law claims made by injured labour hire employees. 485 Mr Hatcher relied upon the evidence of Mr Andrew Quirk, an employee of Christies People, a labour hire company, which assigned him to building work, and the evidence of Mr Damian Hassan, a Recruitment Consultant with Christies People. Mr Quirk was placed on assignment to a building job in North Sydney with a firm identified as BMP Refurbishment, working on contract to Bovis Lend Lease. The work involved scraping old paint off a 20 storey building in preparation for a new exterior surface. Mr Quirk's evidence was: I worked with Christies People up until February 2004. In February 2004, I was sent to work on a large refurbishment job in North Sydney. I was placed with a host employer called BMP Refurbishment. It involved scraping the old paint off a twenty storey building in order to prepare for a new exterior finish. This took place from large climbing platforms fixed to the outside of the building. At the commencement of my shift I was on the climbing platform approaching approximately the 16th floor, when I noticed the smell of burning oil. I pointed this out to the leading hand who was on the platform with me. We inspected one of the engines of the platform and found it was smoking. Whereupon we made the decision to descend. As we descended the engine started to burn out. The leading hand, who I understand was ticketed, could not find the manual controls. I insisted that we bring the platform down as the platform had begun to slip as the brakes were not holding. I was not convinced that the override mechanism was going to work, due to the machine having malfunctioned. When we got to the ground we were directed to go to another platform and ascend another tower. I was very shaken by my experience and objected to this. I complained heatedly to the Bovis Lend Lease management on site, who had not been informed by my host employer of the malfunctioning platform. I also complained to the CFMEU. The Union representative told me not to commence any more work until there was a safety audit of all the towers, including the ticketing of operators. This was also relayed by the Union organiser to the management of Bovis Lend Lease. I went home. 486 Mr Hassan's evidence confirmed that of Mr Quirk. It was established that Christies People accepted assurances from BMP that the equipment was sound; BMP had accepted assurances from the suppliers that the equipment was checked by the maintenance co-ordinator. No one had ensured that any employee was capable of manual operation in the event of failure. Mr Hassan deposed that subsequent to these events a general training course was held for all employees. Mr Quirk was not engaged again. 487 Unions NSW also relied upon the submissions of WorkCover to the New South Wales Government's Labour Hire Task Force which were in the following terms:

The RTA has an integrated OH&S Management System which captures and addresses all workers on RTA sites, including employees of contractors and labour hire businesses. Under this system, all labour hire and contract business employees undergo an OH&S safety induction program. Such employees also participate in tool box meetings, which are the RTA's consultative mechanism by which it ensures that employees are cognisant of any identified risks in the workplace and the procedures used to comply with those risks. In addition, in the civil construction, maintenance and plant operation area, it is a requirement of RTA contracts that employees must be provided with their own safe work method statements or inducted into an RTA safe work method statement for the relevant activity. In addition, labour hire employees are provided with personal protective equipment necessary to complete their work safely. Ms Mary Grace, the General Manager, Human Resources of the RTA, described the safety measures introduced by the RTA in the civil construction and maintenance areas as being " specifically targeted at managing the OHS risks associated with the constant introduction of 'new' (non-permanent) employees into the work environment ". Ms Grace generally expressed the view that subclause (f)(i)(1)-(4) of Unions NSW's claim would have minimal or no impact on the RTA because it is already doing what the claimed provisions would require [Ex 268 pars 46-57]. 491 Mr Hatcher further submitted that: The evidence shows that, to a reasonably significant degree, "host" employers already assist in providing alternative duties for injured workers. The RCSA survey carried out by Dr Brennan and others [Ex 272 Annexure D p 72] showed that 32.4% of RCSA members and 44.7% of non-RCSA members reported that their clients "always" or "sometimes" assisted in finding suitable alternative duties for on-hired employees injured at their workplace, with the figures for "rarely" or "never" being 32.4% for RCSA members and 26.95% for non-RCSA members. The second RCSA survey showed that 78% of clients sometimes, usually or always assisted labour hire businesses in finding suitable alternative duties for injured on-hired employees [Ex 303 par 72], although again this survey, because of its inherent bias, probably overstates the position. Nonetheless it can at least be taken as confirming that a significant proportion of host employers do assist in providing suitable alternative duties to injured labour hire employees. No difficulty was identified in the employers' case for host employers who do this, or for labour hire and contract businesses which benefit from this assistance. 492 It was submitted that the evidence revealed that a sufficient number of firms were not taking some or any of the measures sought in the claim to justify the award provisions sought, which Mr Hatcher put would reinforce, and not distract from, the obligations prescribed by the OH&S Act. 493 Further, that the principle of joint responsibility which is found in clause 8 of the Occupational Health and Safety Regulations 2001 ("the OH&S Regulations") provides both a model and example of the remedy sought in these proceedings. Clause 8 states: 8. If more than one person has a responsibility with respect to a particular occupational health and safety matter under this Regulation: (a) each such person retains responsibility for the matter, and (b) the responsibility is to be discharged in a co-ordinated manner. Rehabilitation

498 The Minister strenuously opposed the claim, submitting that: The Occupational Health and Safety Act 2000 and the Occupational Health and Safety Regulation 2001 (the 'OHS legislation') are the source of prescriptive general obligations in relation to occupational health and safety in NSW. By way of contrast the role played by awards in respect of occupational health and safety matters should be facilitative and not prescriptive, at least in respect of general OHS obligations. Maintaining this dichotomy avoids fundamental difficulties that otherwise arise from imposing dual and/or different liabilities under different instruments. It is neither appropriate nor necessary to have occupational health and safety obligations mirrored in both legislation and awards. 499 The Minister recognised that difficulties arise where there is failure of the labour hire company or host employer to properly consider and fulfil their obligations, sometimes due to the mistaken belief that the other will take on that role. The Minister submitted that the OH&S legislation places obligation to ensure safety on both the host employer and labour hire employer, the difficulty arising from the employer's failing to understand and comply with their legal obligation. 500 The Minister put that there was no proper basis for concluding that replicating existing statutory provisions in awards will result in any different outcome beyond the educational effect that arises from such provisions being repeated. To this end the Minister did not oppose a clause which highlighted existing obligations without creating new obligations: The joint nature of the responsibilities in such circumstances has been demonstrated by successful prosecutions of both a host employer and a labour hire employer: see for example WorkCover Authority (Insp Ankucic) v Drake Personnel Ltd t/as Drake Industrial (No 1) and WorkCover Authority (Insp Ankucic) v Drake Personnel Ltd t/as Drake Industrial (No 2) , being cases where a labour hire company was successfully prosecuted arising from incidents in which employees of Drake Personnel Ltd had been injured while working at a site controlled by Warman International Ltd. As recorded in Warman International Ltd v WorkCover Authority (NSW), Warman International had earlier been successfully prosecuted before Marks J on 27 March 1997 in respect of those incidents.

d) This clause does not create legal rights or obligations in addition to those imposed upon the parties by the legislation referred to in this clause. 502 The Minister noted that following the NSW Labour Hire Task Force Report, which recognised that decisions of this Commission had established beyond doubt the notion and extent of joint responsibility, legislative expression of those principles was recommended, resulting in amendment to the OH&S Act and OH&S Regulations which formalised this position. The Minister relied particularly on cl 8 of the OH&S Regulations which has been set out earlier. 503 The Minister argued that the approach enunciated by the Full Bench in Ermani Constructions Pty Ltd v Australian Workers Union, NSW Branch (1988) 23 IR 346 should be maintained, that being: The general rule has been for the Commission and committees under the Act not to make awards or orders in the areas of safety or welfare where there are already separate prescriptions (see Laundry Employees case [1944] AR NSW 94, and Broken Hill Pty Co Ltd case [1964] AR (NSW) 696 at 707). 504 The Minister opposed that part of the claim which would require a host employer to provide suitable duties in the rehabilitation program of a labour hire employee. The Minister put that it may well be prudent for a labour hire employer to have a contractual arrangement with the host employer which would assist with rehabilitation, however, the Workplace Injury Management and Workers Compensation Act 1998 ("the Workplace Injury Act") puts the responsibility for workers compensation and rehabilitation on the actual employer, making no provision for a sharing of that responsibility. The Minister argued that the employer liable to pay compensation is the one responsible for rehabilitation. 505 There is a direct obligation on the employer's insurer to develop a rehabilitation plan with which the employer and employee have an obligation to co-operate and comply. 506 The Minister submitted that these clear obligations should not be confused or diluted by award provision, adding that it is not possible by award to place an obligation on the host employer to co-operate or comply with the labour hire employer's insurance company as there is no existing relationship to regulate. 507 The Minister submitted that an award obligation requiring a shared approach to rehabilitation could give rise to intractable disputes and transgress the jurisdiction of the Workers Compensation Commission in an undesirable and unhelpful manner. 508 The Minister recognised the difficulties with respect to injured labour hire employees accessing suitable duties, putting that reform should only be as a result of legislative change to prevent the difficulties that can otherwise arise from conflicting obligations under an award and legislation. 509 The Minister advised that legislative reform is under consideration in light of matters, including the evidence in these proceedings and Recommendation 6 of the Labour Hire Task Force Report. Commonwealth Submissions

518 Employers First submitted that the award process sought complicates the current requirements of OH&S Act which defines the responsibility of all parties. 519 Employers First submitted that cl 8 of the OH&S Regulations identified the shared responsibility of employers and cl 15 requires the employer to provide personal protective equipment identified as necessary by risk assessment. The scope and number of prosecutions commenced, and the resulting jurisprudence, demonstrated appropriate enforcement for labour hire and casual employees. 520 Employers First submitted that the OH&S Act and Regulations repealed and replaced 23 legislative instruments which, by volume and diversity, had resulted in confusion amongst duty holders, lack of awareness and consequently non-compliance. The evidence showed Employers grappling with transition from prescriptive based legality to performance based legislation and to add a layer of award regulations would be unhelpful to employers and employees and unlikely to improve health and safety. 521 That aspect of the proposed clause which requires sub-contractors to adhere to safe working method statements of a principal contractor has potential for conflict. For example the principal contractor which engages an electrical sub-contractor may lack the knowledge or capacity to develop a safe working practice for electrical work, while in other cases the standards of the principal contractor may be inadequate or less rigorous than the sub-contractor who has adopted a higher degree of caution and safety standard, or could lead to a false and dangerous sense of security. This was considered by Kavanagh J in WorkCover Authority of New South Wales (Inspector Mansell) v Anytime Industrial Services Pty Limited (2001) 110 IR 34 at 41 where her Honour observed: The large corporation imposed its system of work on the contractor. However, a false sense of security as to the safety of its employees cannot remove from a defendant company, the contractor, its obligations under the Act … Mr Connell did not perceive himself as the employer totally responsible for the work method and training but, rather, subservient to the engineer and maintenance manager of the Principal for whom he was providing works to perform service … Whilst reliance was placed by this employer on his own perception of the quality of the worksafe procedures put in place by the Principal; while he had worked on the site often; while he had been trained in the Principal's cultural awareness of site safety; while he had attended many of its training programmes; the defendant's sense of security as to the safety standard on his workers' worksite was misplaced. The Principal's system of work was faulty…The employer had a false sense of security as to safety on this worksite arising from his perception the Principal had in place a comprehensive safety awareness practice and task specific worksafe procedures. This created a serious risk to the safety of its employees. 522 Employers First submitted that the application by Unions NSW places an inappropriate emphasis on personal protective equipment, which it put is recognised under the OH&S Regulations as the control of last resort, compared to systems and procedures to control risk. 523 Safe working method statements are only required for certain construction sites as prescribed by Chapter 8 of the OH&S Regulations. Employers First submitted that the provisions sought to be inserted in the relevant awards in relation to occupational health and safety were, when compared with the corresponding provisions of the OH&S Act and OH&S Regulation, incomplete, and not as comprehensive. The provisions shift, or alternatively, give the appearance of shifting the onus in relation to matters such as consultation, induction, instruction and provision of personal protective equipment from both the host employer and the labour hire business/contract business to place them solely on the host employer. This, Employers First submitted, is inappropriate and inconsistent with the statutory regime enacted by the OH&S Act and OH&S Regulation. As such, the Commission should not entertain such an application. 524 Employers First submitted that it is neither practical nor reasonable to put responsibility for rehabilitation onto the host employer, which it argued removed responsibility from the labour hire employer, who may be better placed to discharge this responsibility. Employer Group

538 The commencement of our consideration of the claims made by the applicant in this area requires a precise analysis of what is sought in its claim. The claim made falls into two broad yet distinct areas contained in sub-clauses (f)(i) and (f)(ii) of the particular provision sought. Further, the provisions claimed are, by sub-clause (iii), declared to be provisions which are not intended "to effect or detract from any obligation or responsibility upon a contract business or labour hire business" arising under the relevant legislation in either the OH&S area or the Workers Compensation area. 539 In the first category of claim (in sub-clause (f)(i)) there are four particular claims made. Each of the claims seeks to impose obligations on an employer which engages workers through a labour hire or similar business, to perform work wholly or partially on the employer's premises, to undertake certain matters either directly or through the agency of the labour hire or contract business. 540 The first provision sought is that the employer be obliged to consult with employees of the labour hire business regarding the workplace occupational health and safety consultative arrangements; the second claim is that the employees of the labour hire business be provided by the employer with appropriate OH&S induction training comparable to that provided to its own employees to perform their jobs safely; the third claim is that the host employer provide the employees of labour hire business with the appropriate personal protective equipment and/or clothing and/or safe work method statements that would otherwise be provided to the employer's own employees. The final claim is that the employer ensure that the employees of the labour hire business be made aware of any risks identified in the workplace and the procedures to control those risks. 541 It may be observed that the obligations sought to be imposed on a host employer bound by the relevant award are framed in such a way that the employer can discharge them either itself or through the labour hire or contract business it is using. It may also be observed that the obligations claimed are ones that, generally speaking, would be imposed on an employer which has the employees of another employer working on its premises by virtue of s 16 of the 1983 OH&S legislation or under s 8(2) of the current legislation. The penultimate observation we make is that the obligations claimed are obligations, breach of which has resulted in successful prosecution proceedings under the legislation. 542 The final observation we make is that the obligations sought to be imposed are, generally speaking, no different to those which the employer would be required to observe in relation to its own employees or, in situations where it has no direct employees working in relevant areas, which it would be required to observe in relation to its own direct employees if there were any. 543 We accept the evidence of Professor Quinlan that temporary employees and labour hire employees have a greater risk of injury at work than "permanent" employees. Similarly, we accept the submission of the Minister, and the evidence that supports it, that where there is a failure of the labour hire company or the host employer to properly consider and fulfil their obligations, that occurs sometimes because of the mistaken belief that the other party will take on that role or because of the labour hire company's failure to understand and to comply with its legal obligations as an employer. Both of these explanations are of great significance to our consideration of the present claims.

Similar facilitative provisions may assist in the reduction in use of casual employment in other industries. 562 The casual loading in that case was increased to a minimum 23 per cent. 563 Employers First submitted that before introducing a regime of casual conversion the Commission should facilitate permanent employment opportunities. 564 Employers First submitted that its application was supported by a statutory imperative found in s 21(1)(f) of the Act which requires that the Commission must, on application, make an award including a condition for part-time work; and s 19(3)(c) which required the Commission, on review of awards, to take account of "part-time work, casual work, and job sharing arrangements". 565 Employers First submitted that so made or reviewed, an award would set fair and reasonable conditions of employment in accordance with s 10 of the Act and accordingly meet Object 3 (e) which is to facilitate appropriate regulation of employment through awards. 566 It was noted that a Full Bench of the Commission has given consideration to part-time work in the State Part-Time Work case and the Principles for Review of Awards. 567 Reference was made to observations of the Commission in those matters that there have been profound changes in the composition of the workforce accompanied by increased demand from employees of all ages, male and female, for part-time work. 568 In this context, Employers First referred to the scheme of the Act concerned with part-time employment. Part 5, Chapter 2 of the Act, s 73 to s 82 inclusive, is the legislative framework which recognises and facilitates part-time work. 569 The Act applied to employees for whom any conditions of employment are set by an industrial instrument. The Act defines part-time work as work of a lesser number of hours than constitutes full-time work under the industrial instrument and is not casual work. 570 Section 76 of the Act prescribes an entitlement to work part-time with agreement of the employer in the following terms:

The scheme of Pt 5 emphasises the features which part-time and full-time work share; part-time employees are entitled to the benefits of applicable industrial instruments on a similar basis to full-time employees, even where the instrument makes no provision for part-time work - on a pro rata basis where relevant. It follows in our view that in establishing minimum conditions which provide employees with access to the part-time work which they seek, yet also to protect them from exploitation, that we should aim to make the conditions applicable to part-time work, reflect those which apply to full-time work. 578 From this analysis, Employers First sought the establishment of a number of principles. 579 The first of those principles was that awards are to provide for part-time work. It was noted in this respect that evidence was brought as to the desirability of part-time work by employers and employees in the electrical contracting industry, suggesting that part-time work would encourage people to remain in the workforce as an alternative to retirement and thus ameliorate the labour market effects of an ageing population. 580 The specific aspect of the application sought to give effect to this principle is the minimum conditions established by the Commission in the State Part-Time Work Case. 581 The second principle Employers First sought to establish was the removal of limits or constraints on various aspects of part-time employment. Employers First sought the removal of limitations or quotas on the proportion or number of part-time employees in a workforce. Examples were provided of some 15 awards which impose limitations on the number or proportion of part-time employees and argued that, given the preference of certain groups such as women and young people to work part-time, such restrictions could offend the principles contained in the Anti-Discrimination Act 1977. 582 Employers First also sought the removal of the restriction on the minimum and maximum hours a part-time employee may work other than the minimum daily engagement. It was submitted that the effect of the restriction is to force casual employment in cases where the employer and employee agree to work a regular pattern of part-time hours inconsistent with the limits on part-time work so prescribed. 583 These restrictions were said to impact upon employment opportunities as they apply in areas of retail, clerical and hospitality described by Employers First as some of the largest areas of employment in the State. 584 In analysing the history of these provisions, Employers First submitted that the provisions have been directed at ensuring that there was no displacement of full-time employees by employment of part-time employees; and, in the club industry, to avoid displacement of regular casual employees, not to address the needs of part-time workers or employees, and so artificially restricted part-time work opportunities. This is no longer a valid or appropriate basis for the provisions having regard to social and industrial changes over the past 50 years. 585 Employers First referred to increases in part-time female employment in the workforce (an increase of 113.3 per cent from 1981 to 1989) and the comments of Glynn J in Re Clerks (State) Award ( Matters No 1240 and 1242 of 1990, 22 March 1991, unreported). 586 In this respect, Employers First relied upon evidence from Mr Kenewell of Bayview Seafoods, one of the largest employers in Taree, that in the three month peak period, casuals work three to four eight hour days and in the remaining nine months work one to two days per week. Accordingly, the 19 hours per week minimum requirement of the Fish and Fish Marketing (State) Consolidated Award prevented the conversion of the majority of casual employees to permanent employees. 587 Employers First relied on the evidence of Mr Wayne Clark of the Wollongong University Centre. He deposed that the provisions of the University Unions (State) Award imposed a minimum of 12 hours and a maximum of an average 128 hours over a four week period, which Mr Clark suggested prevented the employer from offering part-time employees more hours, up to 38 per week in busy periods (such as the first few weeks of session) for stocktake. Mr Clark's evidence, it was submitted, showed that additional hours for part-time employees would not only be more efficient for the employer (as existing employees are more familiar with the work) but would suit employees who are university students. 588 Reference was made to the evidence of Mr Greg Moses, Adviser - Employee Relations, Employers First which included as an attachment a statement by Mr Steven Barlow, Payroll Manager - Australia and New Zealand, of Minit Australia Pty Ltd. As operator of Mr Minit stores, that company is the largest single employer in the shoe repair industry in this State. 589 Mr Barlow's statement put that Minit Australia employs 72 full-time and three casual employees in 45 stores throughout New South Wales pursuant to the Bootmakers and Heel Bar Operatives, &c (State) Award ("the Bootmakers Award"). 590 The evidence of both Mr Moses and Mr Barlow was that an application was made to vary the restrictions on part-time employment in the Bootmakers Award in proceedings pursuant to s 19 of the Act. This belief was held that the less restrictive provisions sought (a minimum of 7.6 hours per week compared to a minimum of 12 hours per week) would allow an employer to engage more part-time employees rather than casual employees. There was no application to alter the minimum of 30 hours per week limitation on part-time employment. 591 The case was advanced on the basis of the argument that engagement of part-time employees would allow more training than was prudent to offer casual employees, provide more flexible roster arrangements, and reduce staff turnover which was said to be unacceptably high due to long working hours. 592 In her decision in Bootmakers and Heel Bar Operatives &c (State) Award [2001] NSWIRComm 114, Kavanagh J declined the application, noting that the employer was not using the existing part-time provisions available to it and questioned whether s 19 proceedings were the appropriate means of seeking such a variation. 593 The evidence of Mr Moses was that Minit Australia ceased to be a member of Employers First and subsequently made an agreement with its employees, which was certified pursuant to s 170LK of the WRA. That Agreement provided for part-time employment which was defined as an engagement for less than 38 hours per week, with a minimum engagement of eight hours per week to be worked on the basis of a minimum engagement of three hours per day and a maximum of 10 ordinary hours per day. The agreement further provided for a part-time employee to receive the same conditions as a full-time employee calculated on a pro-rata basis according to the number of hours worked. 594 Employers First also relied on the following evidence brought by it: · Mr Anthony Howarth of Captain Cook Cruises · Mr Leslie Mumford of Tuggerah Lakes Memorial Club · Ms Mary Vanderpol of Rooty Hill RSL, a part-time employee under the Club Award who gave evidence of the advantages of part-time employment over casual employment · Ms Tracy Samassa of the Sydney Convention and Exhibition Centre, who put that the amount of work available is determined by the events at the Centre, deposing that the award does not contain sufficient flexibility to enable consideration of employment of the majority of staff on anything other than a casual basis. 595 Employers First brought evidence in respect to the retail industry from Ms Julie Owen of the Australian Retailers Association. Ms Owen's evidence was that 376,400 employees in the retail industry work less than the 12 hour per week minimum requirement for part-time employment for general shops; and 275,600 employees in the retail industry work less than the nine hour minimum for part-time employment in specialty and confection shops. Ms Owen deposed that the reason for a high correlation between youth employment and casual engagement was that the overwhelming majority of young people are students who need to balance work and study commitments; and for those receiving allowances such as Austudy or the Youth Allowance, earnings over $236 per week reduced their benefit. For a 21 year old the limit of $236 per week is achieved after eight and a half hours work. 596 Employers First also referred to evidence adduced by it as to the real estate industry and accommodation and cafes industry to the effect that a reduction of the minimum criteria would qualify more employees for part-time employment. 597 In further pursuit of the principle of removal of restrictions, Employers First's application sought removal of the requirement for a minimum number of engagements a part-time employee may work. This criterion was largely limited to clerical and administrative awards, for example, the Clerical and Administrative Employees (State) Award and required that a part-time employee must work a minimum of two days per week. 598 Reference was made to other State awards which contain similar provisions:

614 The Commonwealth supported the application. It submitted that all awards can and should accommodate regular part-time employment, and that it is in the public interest that awards provide a variety of employment options, to enable businesses to better meet their own operational needs and the needs of their employees. 615 In addressing the public interest, the Commonwealth submitted that there is a need to increase the level of workforce participation from 64.5 per cent, described as one of the lowest in the industrialised world, and to deal with the ageing of the Australian population. It was predicted that over the next 40 years, the number of Australians aged 65 years or more will increase to 25 per cent, or double the present level. 616 The Commonwealth argued that unrestricted part-time work is a means to address both of these issues as well as providing employers with the flexibility to meet business needs. 617 The Commonwealth submitted that: Australians need more options about how long they work, where they work and what hours they work. Amending awards to provide for part-time employment while removing award restrictions on its usage will create an incentive for NSW employees to participate in the workforce for longer. 618 The Commonwealth submitted that part-time work is an increasingly popular mode of employment having increased by 42 per cent in the ten years to March 2005; that employees working part-time report satisfaction with the number of hours worked, 78 per cent not seeking to work more than currently; and an analysis of HILDA data by Drago and Tsing concluded that women prefer to work part-time on average 26 hours per week. 619 The Commonwealth argued that the claim by Employers First was consistent with the WRA and, in particular, s 143 (1C)(b), which requires awards to include, where appropriate, a facilitative provision that allows agreement to be reached at workplace level on the employment of regular part-time employees. 620 Section 89A(4) of the WRA operates to prohibit award restriction on both the number or proportion of part-time employees that can be employed in a particular type of employment, and the setting of maximum or minimum hours of work for regular part-time employees. Opposition to Claim by Unions NSW and SDA

(a) a provision limiting the number of employees who may work part-time, (b) a provision establishing quotas as to the ratio of part-time to full-time employees, (c) a provision prescribing a minimum or maximum number of hours a part-time employee may work. 624 Unions NSW noted that there is a pro-forma agreement available to interested employers and employees on the NSW Industrial Relations Commission website. 625 Unions NSW refuted the assertion by some employers that the provisions of Part 5 of the Act impose an administrative burden. That administrative burden was neither explained nor detailed. 626 An analysis of the part-time agreements lodged with the Industrial Registrar was provided in the affidavit of Ms Alicia Hughes, then an Industrial Research Officer with the NUW. Unions NSW provided the following submission as to that evidence. 627 That analysis revealed that in the period 1 January 2002 to 13 July 2004, 379 part-time work agreements were lodged covering 137 different employers in occupations covered by 29 different awards (however six awards applied to 294, or 82 per cent of the agreements lodged). The highest number of agreements, 107 or 30 per cent, was lodged in occupations covered by the Miscellaneous Workers - Kindergartens and Child Care Centres, &c (State) Award, an award which does not set any minimum hours for part-time work. 628 The six awards containing the higher proportion of part-time work agreements were identified as follows: (i) Miscellaneous Workers Kindergartens and Child Care Centres (State) Award 107 (30 per cent) (ii) Shop Employees (State) Award 66 (18 per cent) (iii) Club Employees (State) Award 38 (11 per cent) (iv) Clerical and Administrative Employees (State) Award 34 (9 per cent) (v) Caterers Employees (State) Award 25 (7 per cent) (vi) Building and Construction Industry (State) Award 24 (7 per cent)

631 Unions NSW submitted that those results demonstrate that, in the context of the overall New South Wales labour market, the numbers of employers and employees who considered the award provisions to be an impediment and thus had to utilise part-time work agreements under the Act to achieve the type of part-time work arrangement they desired is negligible. 632 Unions NSW relied upon evidence from employer witnesses that they had no knowledge of the provisions of Part 5 of the Act, and others who deposed that they would not employ additional part-time employees if the Employers First application was successful, to found a submission that there was no practical benefit in the application. 633 Unions NSW submitted that a lack of understanding by employers of the facility for part-time work afforded by Part 5 of the Act emerged as a far more significant obstacle to part-time work agreements than any award provision. 634 In opposing the application, Mr Hatcher traced the history of part-time arrangements, commencing with the State Wage Case August 1989 (1989) 30 IR 107 which adopted the "Structural Efficiency Principle". That Principle included, among other things, consideration of the incidence of, and terms and conditions for, part-time employment as a means to obtaining the productivity improvements intended to flow from the Structural Efficiency Principle. 635 Mr Hatcher put that the issue of part-time employment had been the subject of negotiation and agreement between industrial parties in particular awards; conciliation and arbitration in others; considered in the State Part-Time Work Case; consideration in the award review process pursuant to s 19 of the Act, and the subject of parliamentary debate in amendments to Part 5 of the Act. 636 Mr Hatcher referred to the Second Reading Speech by the then Minister for Industrial Relations, the Hon. Jeff Shaw QC, which addressed cost issues in the following terms: First, the present requirement for part-time work agreements to be in writing will be continued, but there will be a new requirement to lodge a copy of such agreements with the registrar. I appreciate that there have been concerns raised by some employer groups to this measure as being an onerous imposition on business. Realistically, I cannot accept such a response. The legislation will impose a cost on employers of not more than the price of one page photocopied, and one postage stamp. The benefits accruing indirectly to employers have obviously been ignored. The lodgement process will provide a modest check on the contents of such agreements and will be an invaluable resource for employers and unions to identify the sorts of restrictions in awards which are being overridden by part-time work agreements. Such records will be of assistance to the parties and the commission in the award review process I outline earlier.

637 Mr Hatcher submitted that throughout this examination and establishment of standards and parameters, either on a State basis in the State Part-Time Work Case or individual part-time work agreements, the notion of part-time work held certainty and regularity upon which the employer and employee could rely. That regulation also ensures that part-time work is taken up in an appropriate, non-exploitative manner. 638 Mr Hatcher put that the parameters of part-time work arrived at by this process could not be said by Employers First to be artificial or unwarranted. 639 Mr Hatcher relied upon evidence from employer witnesses that their desire was for no fixed minimum hours of engagement and no regularity of starting and finishing times, to ground his submission that the true thrust of the application is to destroy the essential elements of part-time work and create cheap casual employees. 640 He referred to the evidence of Ms Samassa to the effect that set starting and finishing times would not work; the evidence of Mr Robert Smith of Twin Towns Services Club who deposed that there should be no fixed minimum hours per week; and the relevant evidence of Mr Anthony Howarth as follows: Q. So what would you envisage employing people in terms of hours a week on a part-time basis absent those restrictions? A. Ideally zero, so total flexibility. Q. They would have no guaranteed hours at all and you would just allocate them work as you saw fit, is that right? A. You are making it sound dreadful. I guess the thing they would get out of it is pro rata holiday pay and sick leave and security of tenure of some kind in that they would know that they are part of a core of people who would be given permanent accord, permanent status in the business, permanent part-time status. Q. How would they have permanent part-time tenure? A. It sounds a little strange, doesn't it, but I think the point is that as far as we are concerned that is the flexibility, that the key thing, the great difficulty, the great conundrum for an employer, who, for example, if I can just given an example, we were forced to employ everybody permanently we would immediately cut our business by a third. Two thirds to one third of its size. I am just using that as an example why flexibility is important in our particular business. Q. If those restrictions were removed you would consider utilising people on a permanent part-time with zero guarantee? A. I am saying that what we need to be able to give people more part-time or permanent part-time work is flexibility in the award structure that we mean, restaurants or catering. Q. What would be the guaranteed hours for work? A. Ideally none. 641 That approach was confirmed by the evidence of Mr Leslie Mumford, Human Resource Manager Tuggerah Lakes Memorial Club, and Ms Owens of the Australian Retailers' Association. 642 Mr Hatcher submitted that the application by Employers First omitted all protections and safeguards identified in the State Part-Time Work Case as necessary to avoid exploitation and expressed concern that the application, if granted, would lead to a casualised model of part-time employment, to the significant detriment of employees. 643 Mr Hatcher further submitted that removal of part-time loadings in the small number of cases where they existed, without proper examination of the reasons for and circumstances surrounding those loadings, is contra-indicated. 644 It was contended that there is no evidence to support the assertion that current part-time employment arrangements impede job sharing. Unions NSW supported job sharing and sought, in response, a State decision pursuant to ss 51 and 52 of the Act in the following terms: Where two or more employees make a written request to share a job or jobs held by any one or more of them, the employer shall accede to that request provided that:

Paragraph (4)(b) does not prevent the Commission from including in an award: (a) provisions setting a minimum number of consecutive hours than an employer may require a regular part-time employee to work; or (b) Provisions facilitating a regular pattern in the hours worked by regular part-time employees 651 As noted earlier, the SDA opposed the application for a State decision and variation of the Shop Employees Award. 652 The SDA adopted and supported the arguments advanced by Mr Hatcher on behalf of Unions NSW. In addition, the SDA submitted that Employers First had failed to establish that the Shop Employees Award does not contain fair and reasonable conditions of employment. 653 Counsel submitted that employers and employees are currently able to agree upon the form of employment which suits them. However, that would be overtaken by a determination of the terms of engagement if the application was successful and, in addition, any meaningful distinction between part-time and casual employment would be eliminated. 654 It was put that the success of the application by Employers First would eliminate casual loading with no corresponding benefit to employees. The application would expose employees to part-time engagement for as little as four or five weeks per year; a person currently working 10 hours per week as a casual employee would need to work an additional one and a half hours as a part-time employee to earn the same remuneration. 655 The SDA submitted that the pursuit of flexibility in the application paid no heed to the concept of justice between employer and employee and proceeded on the false premise that there is bargaining equality between employer and employee. 656 The SDA relied upon the evidence of Mr Greg Donnelly, the State Secretary of the SDA, to the effect that a vast majority of SDA members were covered by agreements with major retailers, certified pursuant to the WRA, which were underpinned by the Shop Employees' (State) Award or by a federal award which contained similar provisions, and which reduced the minimum hours and increased the maximum hours for part-time work when compared with the underpinning award provisions. 657 Mr Donnelly's evidence was that these agreements applied in a number of States and the ACT, and included a package of benefits for employees in return for the alteration of part-time positions when compared to the State Part-Time Work Case and part-time provisions in other States. It was Mr Donnelly's evidence that "any consideration or analysis of changes to part-time work within these Agreements can only, therefore, be measured in conjunction with other changes to employment conditions contained as part of the package".

670 It has not been argued by Employers First that there should be extinguished the present distinction between full-time, part-time and casual employment. Had it done so, the proceedings before us may have taken on different and even wider dimensions. However, starting from that premise there may be immediately identified a serious deficiency in the application. That is because the application would, in our view, if granted result in such a blurring of the distinction between casual and part-time employment as to effectively eliminate part-time employment as it has been recognised in the history of industrial jurisprudence in this State, and by the provisions of the Act. When considered in light of the evidence called in these proceedings, the true effect of the application by Employers First would be to fundamentally alter the nature of part-time employment so as to subject such employees to the uncertainty of casual employment without compensation for the consequent lack of benefits. 671 The needs of the employer are put as the justification for those parts of the claim which would relieve employers from any award parameters or definitions of part-time work in awards in terms of minimum or maximum engagement; regularity; consistency of hours (including a capacity to work part-time employees additional hours without overtime payments) and for seasonal workers to spread their working time over 52 weeks so as to avoid overtime payments. 672 The only descriptor of part-time work countenanced by the employers is that a part-time employee would receive the entitlements of a full-time employee on a proportional basis. 673 We agree with the submission of Unions NSW that such an approach would debase part-time work to the extent that it would create another class of casual employee. 674 The Employer First application was brought in the light of an elaborate statutory regime governing part-time employment, and after a consideration of the appropriate mode of regulation of part-time employment by the Full Bench in the State Part-Time Work Case. 675 The relevant legislative framework is found in s 22 of the Act which provides:

(e) Contracting Out of Work (i) Where an employer proposes to contract out work currently performed by its own employees under this Award to any contract business, the employer shall hold discussions with any of its employees who might be affected and the union. (ii) Such discussions shall take place as soon as is practicable and in any event not less than twelve weeks before the proposed contracting out of work is intended to commence. The discussions shall cover all relevant matters, including: • the reasons for the proposed contracting out of work; • any available alternatives to the contracting out of work; • measures to avoid or minimise the effects of the contracting out of work; • measures to mitigate any adverse effects of the contracting out of work, particularly with respect to persons whose positions are displaced as a result, • the availability of reasonable alternative employment with the contract business or with the employer for those whose positions are displaced. (iii) For the purposes of such discussions, the employer shall, as soon as practicable, provide in writing to the affected employees and the union all relevant information about the proposed contracting out of work, including: • the number and categories of employees likely to be affected; • the number of employees normally employed; • the name and address of the contracting business(s) which the employer intends contracting work out to. (iv) Whilst such discussion are occurring, or whilst the disputes settlement procedure is being followed pursuant to subclause (g) hereof with respect to any matter arising out of such discussions, the employer shall not proceed to enter into any contract with a contract business with respect to the contracting out of the work which is the subject of the discussions. (v) An employer must not decide to contract out work which is currently performed by persons directly employed by an employer for any of the following reasons, or for reasons which include any of the following reasons: (1) To avoid having to pay a benefit to which such persons are entitled under: • this or any other applicable award or other industrial instrument; • their contracts of employment; • applicable industrial relations legislation; or • any order of a court or industrial tribunal; (2) To avoid any other lawful obligation of the employer including any obligation arising under occupational health and safety or factories legislation; or (3) To remove or weaken the union presence in the workplace. (vi) Where it is alleged that the employer has made a decision to contract out work for any of the reasons set out in paragraph (e)(vi) above, or for reasons which include any of those reasons, it shall be presumed that the decision was made for those reasons unless the employer proves otherwise. (vii) If after the discussions required by paragraph (e)(i) above have occurred the employer has determined to proceed with the contracting out of work, then the employer shall: (1) make it a condition of any contract that it enters into with a contract business with respect to the contracting out of such work that any persons to be employed by the contract business to perform the work to be contracted out, where such work is to be performed wholly or partially on the employer's premises or upon any other premises which are dedicated to the performance of work pursuant to the contract, shall receive wages and conditions which are not inferior to the wages and conditions such persons would have received under an applicable state industrial instrument had they been employed directly by the employer to perform the same work; and (2) in respect of each employee whose position is displaced as a result of the contracting out, either: • make it a condition of any contract that it enters into with a contract business with respect to the contracting out that the employee is to be offered employment by the contract business in an equivalent position in which the contracted-out work is performed; or • offer suitable alternative employment to the employee on remuneration and conditions not less than those currently enjoyed by each employee; and (3) give affected employees at least twelve (12) weeks' notice of the commencement of the contracting out. (viii) Nothing in this clause affects any obligation upon the employer to provide notice or to pay severance or redundancy pay arising under this or any other award or enterprise agreement or order of the Commission pursuant to the Employment Protection Act 1982.

At a glance

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Judgment (741 paragraphs)

Legislation Cited (3)

Cases Cited (52)

Cited By (5)