PN1

VICE PRESIDENT HATCHER: Mr Christodoulou and Mr Zevari?

PN2

MR ZEVARI: Yes, your Honour. Just to let you know, Mr Ward is attending to the matters that he took on notice yesterday and he'll be in shortly. I just wanted to let you know that.

PN3

VICE PRESIDENT HATCHER: I thought you were doing that.

PN4

MR ZEVARI: I've attended to them, he is reviewing them, your Honour.

PN5

VICE PRESIDENT HATCHER: All right. Mr Christodoulou?

PN6

MR CHRISTODOULOU: Thank you, your Honour. Given that Mr Ward has covered so much ground in his submission, I'll attempt to only draw upon the evidence he has not specifically gone to in my closing submissions. I would ask that the bench of course have regard to the objects of the Act when it is dealing with this issue, but in particular I do want to refer back to the statement that her Honour Deputy President Booth made during the conciliation on 15 October 2015. That statement is found in exhibit 4 of my evidence, at attachment G.

PN7

There were a shared number of objectives in that statement of all the parties and I just want to reiterate those now very quickly. The first objective was that we wanted to (a) have a wage system that was a fair, equitable, non‑discriminatory wage outcome to contribute to a living income for employees in supported employment. I emphasise the words "living income" because there is an intersection of course between the wages paid in ADEs and all the other pension entitlements that people get. When you combine that for supported employees, there is a living income.

PN8

(b) continued opportunity for employment - and I emphasise the word "continued" - in supported employment settings to build and maintain the self‑esteem and sense of purpose for employees. (c) sustainable employment opportunities in viable ADEs and again I talk about the word "viable". (d) to provide security and confidence to employees, parents and carers for the future. They were the four objectives shared by all the parties.

PN9

I doubt, I must say, having heard the submissions and evidence of AED Legal, that these objectives are shared as between the parties now; but I must say given where the Commission may be heading - or the bench may be heading in relation to the possibility of further discussions around a particular new wage system that the Commission may have in mind, I'm hoping that those shared objectives can be renewed by the parties.

PN10

I would say this: in terms of those agitating to have the Supported Wage System forced upon the industry, I think they will have you believe that this is a relatively straightforward matter. That is, you have the SWS out there that is worked in open employment and as a consequence it can easily be supplanted in an ADE environment.

PN11

Greenacres does not accept the general proposition put by AED Legal that Greenacres, when employing supported employees, does so on the basis that we employ them in the knowledge that we accept that they can only perform limited tasks or duties and, therefore, we have to accept having to pay the higher premium or artificial higher premium if the Supported Wage System was adopted. We employ people with disabilities and match their skills to the work that we have available or indeed create for them. The Greenacres wage tool has various levels where work of different value is assigned and, as people improve their skills, they are able to carry out that work at a higher remunerated level.

PN12

Greenacres does reject the general tenor that has been put by AED Legal in these proceedings that if we cannot afford to pay higher wages under the SWS, that that really means we're not commercially viable or that if people with disabilities do not perform to a particular standard, then they should be terminated. We exist to keep people with disabilities in employment in the absence of other arrangements being made available.

PN13

I will go now to the Greenacres wage tool and address that briefly, because I know it will be addressed also by the Endeavour Foundation. Greenacres supports the submission, can I say, of ABLA as they related to the impact of the Federal Court decision with respect to the BSWAT in terms of the implications that that decision may have on this Commission's considerations. We also will be supporting and do support the submissions made by the Endeavour Foundation, as we understand them to be, during their opening submissions.

PN14

Greenacres contends that AED Legal have not established good reason for the Greenacres wage tool to be removed from the SESA Award. The Greenacres wage tool is administered by in-house trainers - and I will come to the issue that your Honour raised and asked Mr Ward. We have a view about that and we'll express that in a moment, but we do employ in‑house trainers who collect historical data and records in terms of wage assessment for our supported employees.

PN15

We have in my statement, exhibit 5 at paragraph 42 in attachment 15 - we actually show the Commission and give the Commission copies of the documents we sign off around assessment, so that you can see there quite clearly how we review people's work and assess their work in accordance with the Greenacres assessment tool. Underpinning those assessment procedures is of course data in our data system that is used with respect to doing the analysis of where people should sit and how they should progress in the structure.

PN16

Mr Ward has already dealt in some detail with the differences between our tool and the BSWAT, and we maintain that the Greenacres tool does not operate in the same way as the BSWAT, as the assessment of our supported employees is made against the actual work performed and the skills required to perform that work.

PN17

We strongly support the use of in‑house trainers and supervisors to assess and classify people to the wage levels under the Greenacres Award. I do refer the bench - and I won't go to it now - to the evidence of Mark Wynen that's found in exhibit 59 at attachment 1, where contained in there is actually a statement that has been signed off by almost all of our trainers and supervisors where they make reference to the use of independent assessors.

PN18

The bench should note that many of these workers, trainers and supervisors who have signed that statement are members of the ASU and United Voice, and do spend much of their time implementing the wage tool. The implications of moving to the model of external assessors may affect some of these positions. I put it no higher than that at this point in time.

PN19

There is another reason why I think the move to independent assessors needs to be considered and I have another option for the bench to consider in relation to this. First of all, each assessment does cost around $600. I'm not sure whether the Commonwealth would pay for those assessments at this stage for any new tool other than the SWS; so, if you think about it, there are 20,000 around Australia times $600. It's not an insignificant amount of money.

PN20

Secondly, with the Greenacres tool we actually assess regularly the wage levels and therefore it's not a matter of just assessing everybody every 12 months. People are regularly assessed and therefore their wage level can change depending upon what work they are doing and their skill development. I can tell you just recently when we asked for a wage assessor to come in and do an SWS assessment, it took them two and a half months to get to Greenacres, so there is an issue of practicality around this.

PN21

It may well be a better option - if the Commission wants to have some level of comfort that people are being classified or assessed correctly - that in terms of whatever determination method is agreed to by the Commission, that maybe it should be the role of the Fair Work Ombudsman or a team within the Fair Work Ombudsman's office to actually do audits of organisations such as ADEs to check that we are properly classifying or assessing employees.

PN22

That would still require some resources to be put into that office, but I think there you would get a much better and consistent approach than having a whole range of independent assessors out there trying to do assessing or indeed any type of other audit. So we would prefer a model, if we're going to go down that path, of in‑house assessments but with an organisation or persons that can audit what we do on a regular basis. I say no more about that unless you have a question about that, your Honour.

PN23

The evidence did show, with respect to the Greenacres tool, that there was inconsistencies when applying the tool amongst different employers who have taken some different approaches. We don't walk away from that. That is one of the difficulties associated when you have something that sits outside of the award and you have people trying to interpret things differently. Notwithstanding, the SWS does suffer from the same difficulties because of the approach that different independent assessors may also take on an individual basis with employers. We have heard the evidence of Mr MacFarlane and Mr Burridge in relation to that.

PN24

At this point let me take issue with one thing that Mr Harding did say in relation to the Greenacres tool and where he insists that it encompasses supervisors. Well, let me say the tool is found in my statement at exhibit 5, at attachment A, the tool that is referred to in the award. It does not have any reference at all in that tool to supported employees carrying out supervisory work of the nature contemplated in higher levels of the SES classification structure, nor do we at Greenacres apply that tool in that way.

PN25

We do concede that our tool was developed over 15 years ago, as were many others. It was endorsed by the Australian Industrial Relations Commission at the time, but we do believe it would benefit from a significant review so the tool could be better administered by employers. That is the reason why in our initial submissions and indeed in the evidence that I filed in exhibit 4 at paragraphs 45 to 47, we do say the tool does need to be reviewed so we can better define the levels, improve the administration of the tool and in fact to change the language or make the language very clear that we are talking about work that is commensurate with grade 2 and grade 2 only.

PN26

VICE PRESIDENT HATCHER: Reviewed by whom?

PN27

MR CHRISTODOULOU: Well, in my submissions we have said that we would be happy to sit down with United Voice and do that. In fact that was contemplated in our discussions with United Voice when we made our last enterprise agreement. We did say we would wait for these proceedings and, subject to these proceedings, we did want to review the tool. I personally can see some anomalies in it, in the way it was crafted in terms of the language and I can see how people can interpret things in a different way. So, therefore, I think it does need to be updated.

PN28

Of course if that was the case and our tool does survive, we of course would come back to put to the Commission what changes we would want to make to the tool, for the very reason I would outline - and I have outlined before, which I think to some extent has been accepted by this Commission. That is, whatever the wage determination system is, it ought be embedded in the award. We can't have these tools sitting to the side where people or organisations can either interpret them differently or indeed change them without any reference back to this Commission.

PN29

The last point I would make doesn't relate specifically to the Greenacres tool, but I think it may relate to a new way moving forward. I would agree that the general classification structures in the award certainly do need reviewing and should have been reviewed in this award review, other than the fact that all of us were caught up in this main issue around wage determination for supported employees.

PN30

The structure you see in the award is not dissimilar to the structure that was in the Flagstaff Award that again is contained in my evidence, which was the precursor award to the award that's before you now. That was constructed back in 1991 and really the classification structures haven't changed a great deal since then, other than I might add when the 1991 Flagstaff Award was created the words "and/or" were never there, so I'm not sure who put those words in that Mr Harding refers to.

PN31

In any event, I have dealt with the question of embedding our tool in any event in the award should it survive, but as a general principle I think that any wage determination method needs to be in the award and should not sit outside the award.

PN32

VICE PRESIDENT HATCHER: Does that approach envisage us retaining a variety of tools, as you say, embedded in the award for the future as a permanent feature?

PN33

MR CHRISTODOULOU: Yes. If the Commission forms the view that there are a variety of tools that should remain, my view would be that they should be appended to the award and form part of the award.

PN34

VICE PRESIDENT HATCHER: That still leads to the result that the employer can select a tool which renders a particular outcome.

PN35

MR CHRISTODOULOU: Yes.

PN36

VICE PRESIDENT HATCHER: And leads to different results for employees with equivalent levels of capacity depending upon what tool the employer chooses to use.

PN37

MR CHRISTODOULOU: The only thing I might say with respect to that - but I'm not sure this is administratively possible - is whether there would be a clause in the award which would somehow direct the employer to nominate the tool and advise the Commission or some body that this is the tool that they are using so it is clear to everybody as to what tool is being used. Yes, but I agree with your Honour that that is a problem that your Honour has raised.

PN38

I think it's important for this Commission to really understand how we got to where we are now. Of course significant reforms - that's all I want to say about the Greenacres tool. In terms of the history of the development and implementation of the SWS, I think it's really important that the Commission understand that. The reforms around employment and working rights for people with disabilities did begin in the late 1980s with the consequence of the Disability Services Act coming into play in 1986.

PN39

The evidence of my statement in exhibit 4 at paragraphs 11 to 13 show the reforms in the sector were driven also by a number of reports and recommendations in those reports, these being the Ronalds Report titled "National employment initiatives for people with disabilities", August 1990, a summary of which can be found again in my statement in exhibit 5 at attachment D, and of course the Dunoon Report which can be found in Mr Cain's evidence in exhibit 16, attachment F.

PN40

The clear intention of the government in the 1990s was to develop a system to secure more people with disabilities open employment outcomes whilst at the same time converting those people with disabilities engaged in then sheltered workshops as employees with rights of work. Again that evidence is found in my statement in exhibit 4, but the history of wage determination for people with disabilities in both open and supported employment can be found in a more valuable document which is - and I will be taking the Commission to this, and you may choose or not choose to get it out because I will be referring to some paragraphs, but it's contained in exhibit 63, annexure A of Mr Packard's evidence.

PN41

It is a copy of the Australian government's submission to the 2006 Australian Fair Pay Commission wage‑setting review, chapter 11. It's minimum wages for people with disabilities. This is a pretty important document in the scheme of things which I think the Commission would be wise to read in full, although I will take the Commission to some paragraphs in that document in a moment.

PN42

DEPUTY PRESIDENT BOOTH: Mr Christodoulou, could you just say those exhibit numbers and attachments again.

PN43

MR CHRISTODOULOU: Yes. In exhibit 63, annexure A.

PN44

DEPUTY PRESIDENT BOOTH: Yes.

PN45

MR CHRISTODOULOU: I must say with respect to this document it makes it really abundantly clear that the SWS was designed specifically for open employment, but we'll go to that a little bit later on. Having said that, a number of advocacy groups have been pushing for the SWS to be imposed on disability enterprises for a very long time. I again refer to the document that I have just indicated it would be wise for the bench to look at. If you go to paragraph 11.94 of that document, you will see:

PN46

The Disability Employment Action Centre (DEAC) and the National Council on Intellectual Disability (NCID) -

PN47

which is, I stand to be corrected, Inclusion Australia -

PN48

are two organisations that represent people with a disability. These organisations have argued that all business services should be required to use the SWS to implement pro rata wages for their employees.

PN49

VICE PRESIDENT HATCHER: Sorry, Mr Christodoulou, did you say exhibit 63?

PN50

MR CHRISTODOULOU: Yes.

PN51

VICE PRESIDENT HATCHER: That is a statement of 25 September 2017.

PN52

MR CHRISTODOULOU: Is that Mr Packard's statement?

PN53

COMMISSIONER CAMBRIDGE: There is another one.

PN54

VICE PRESIDENT HATCHER: There is a second one. The first one doesn't seem to have any annexures.

PN55

MR CHRISTODOULOU: I might be wrong then.

PN56

VICE PRESIDENT HATCHER: 64.

PN57

MR CHRISTODOULOU: Have your Honours got that document now?

PN58

VICE PRESIDENT HATCHER: Yes.

PN59

MR CHRISTODOULOU: Okay. You will see in that paragraph 11.94 - the point I would simply want to make is that this is not a new position of the advocacy groups. They have been pursuing the SWS being appropriate for disability enterprises for quite some time. I will take you a bit later on to why in this particular decision of the then Fair Work Commission that was rejected.

PN60

Can I say this: the evidence has shown in these proceedings that many advocacy groups - or some advocacy groups at best only want disability enterprises to play a role, if any, in assisting people with disabilities into open employment. I say at worst some people and groups would be happy to see the end of what they describe as segregated employment. They would say in these circumstances the government should intervene to find support employee jobs and in any event possibly supported employees may have to go into day programs.

PN61

In my evidence that is found in my witness statement, exhibit 5, at paragraphs 30, 31 and 32 - and I'll take you specifically to exhibit 5, attachment 9. This is off the web site of People With Disability Australia. That is PWDA. On page 1 of that attachment contained in my evidence, they say this: they want people with disabilities to have real jobs. It goes on to say that their policy has called for governments to lead by example and increase employment targets for people with disabilities in public service positions.

PN62

Then they say they want an end to Australian Disability Enterprises' model of segregated employment. Then it goes on to say they're going to achieve that through the wage justice campaign. Be under no misapprehension, the wage justice campaign is what we are here doing. The wage justice campaign is to put the SWS in the SESA Award. I will say no more about that. That web site, those words, stand on their own.

PN63

Of course we also have that position supported by Mr MacFarlane in transcript on the 8th of the 2nd, found at paragraphs 1691, 1702 and 1716, but in particular at exhibit 12 which is Mr MacFarlane's submission to FaCSIA in terms of a Human Rights Commission application, where on page 6 of that in the sixth paragraph he says:

PN64

Philosophically, demographically and economically the ADE segregated model is clearly outmoded. This model of employment service provision defies reasonable definition of integration and social inclusion.

PN65

Clearly one of ADE's chief witnesses in relation to how good the SWS is, also in his own view does not support Australian Disability Enterprises.

PN66

VICE PRESIDENT HATCHER: Ultimately what is the relevance of this? I mean, we have got an award which predicates the existence of a sector. We don't have the power to make the policy decisions to do this and the evidence suggests that even though it has caused some difficulty, there are some ADEs that proceed on using the SWS.

PN67

MR CHRISTODOULOU: Yes, I think you're right. Not a lot of weight probably is placed on this. I would simply outline that there is some connection to pursuing an SWS in ADEs because if wages are inflated and they go up, of course ADEs will close. That's the position we're putting. That of course would not worry some of the people who are supporting the SWS being inserted in the award because they don't like the model of an ADE.

PN68

MR HARDING: Your Honour, I object to this line of submission only because it's palpably unfair on a Browne v Dunn basis. None of that was put to any of the witnesses. They were cross‑examined about specific philosophical views.

PN69

VICE PRESIDENT HATCHER: Mr Harding, you deal with this in a reply submission. Mr Christodoulou, I'm not sure how this is relevant.

PN70

MR CHRISTODOULOU: Okay. I'll move on, your Honour.

PN71

VICE PRESIDENT HATCHER: What may be relevant is the evidence about the business impacts of ADEs that for one reason or another have adopted the SWS system.

PN72

MR CHRISTODOULOU: Yes. I won't go on further with that submission, your Honour. I will just deal very briefly now with - and I want to be clear about this - the relevance of the SWS as it might apply to people with intellectual disabilities. There was some information brought forward in relation to - and it's found in exhibit 33, annexure A. I'll take the Commission to that.

PN73

Many people with disabilities who find their way into open employment go through - find their way into open employment via what's called a DES program; or a Disability Employment Service program. Many of those people go to those programs because they're referred by Centrelink to those programs. DES providers will often place people in open employment and convince the employer that they've got the opportunity to use the SWS as a method of assessing wages. That's what the SWS was designed to do; to assist in that process.

PN74

Now, if I take you to exhibit 33 and found in annexure A, and take you to page 10, you'll see there is a box up there and it says, "The profile of DES participants." 44 per cent of DES participants have a physical disability, 38 per cent have a psychiatric disability and only 4 per cent have an intellectual disability. What follows from that, in my view, is that given the SWS is predominantly used in the DES program, there must be only a very, very small percentage of people with intellectual disabilities that may have the SWS assessment system used in open employment.

PN75

The reason again I raise this is that I simply say this: if there were to be job losses as a consequence of cost increases associated with any new wage determination method, the chances of people with intellectual disabilities and particularly the cohorts that we have in Australian disability enterprises would be very, very difficult. Again I refer to the submissions of the South Coast Labour Council in that regard, dated 11 December, who detail the labour market conditions in Illawarra and the unlikely prospect of supported employees finding positions should they not have supported employment jobs.

PN76

In relation to the SWS leading to job losses, we think the evidence that has been brought to the Commission is fairly powerful in this regard. I can take you to the evidence in my statement at exhibit 4, at paragraphs 35 and 36 and attachments F and F1, where the overall increase as we've assessed would be anywhere between 60 and 115 per cent. If we use only the data provided by the qualified SWS assessors - the company who did that was a company called LEED and they're found in my evidence. They were done back in 2014. This result there would be quite catastrophic because it is at the higher end of the increases in costs that we're alluding to.

PN77

The evidence of Mr Harvey at exhibit 50, who is our general manager, he has actually looked at the LEED assessments but also looked at what the results might be using the modified supported wage system and some of the results that came out in the trial. The best case scenario - best case being the least cost to the organisation - would be 50 per cent and he has not included any additional costs that would flow on to leave entitlements or the accrual of leave.

PN78

Other organisations have also provided evidence in these proceedings with respect to projected costs and implementing the SWS. Mr Donne has done that in exhibit 40, at paragraphs 77 to 91. Mr Ken Baker of course in his exhibit, which is found in exhibit 52, annexure A, the KPNG Report, analyses the costs. Of course I want to take you back to this document annexure A of Mr Packard's statement, because if you go to paragraph 11.101, you will see there at 11.101 the government says:

PN79

The extent to which the SWS would overvalue employees of business services is demonstrated by the labour cost impact of implementing the SWS throughout the business services sector. FaCSIA estimate that mandatory implementation of the SWS would increase the total wage bill for the sector by approximately $45 million (59 per cent) above the cost of implementing the BSWAT.

PN80

"Above the cost of implementing the BSWAT." I would have thought that if we in our own enterprises haven't done our calculations correctly, I presume that the bureaucracy of government has and they say it's 50 per cent.

PN81

VICE PRESIDENT HATCHER: Mr Christodoulou, isn't the government just going to meet the shortfall?

PN82

MR CHRISTODOULOU: No, and I'll come to that in a moment. They are not going to meet the shortfall. They should meet the shortfall, but I will come to that later in my submissions.

PN83

VICE PRESIDENT HATCHER: Mr Christodoulou, before you put that document away, can I just ask you some questions by reference to paragraphs 11.97 and 11.98.

PN84

MR CHRISTODOULOU: Yes, I was going to go to that.

PN85

VICE PRESIDENT HATCHER: Particularly the example used in 11.98 where it talks about a measurement of 80 per cent productivity in two different jobs where the jobs themselves have different work value, but SWS would produce the same wage outcome. You see that?

PN86

MR CHRISTODOULOU: Yes.

PN87

VICE PRESIDENT HATCHER: That's the critique of - - -

PN88

MR CHRISTODOULOU: I was going to go to this section later on, but I'll deal with that now. In 11.97, it actually indicates very clearly how - illustrates how low value work would be over‑valued and, you're right - you said 11.98, your Honour?

PN89

VICE PRESIDENT HATCHER: The example used there.

PN90

MR CHRISTODOULOU: Yes, yes. That's right. The 80 per cent productivity as against someone doing a wider range of work also receiving that. It's the argument that we have been running and I will come to again later on, that under the SWS a person who is doing a very simple task or a couple of simple tasks - and that's what their skill avails them to do - can actually score higher than a person doing more complex work. I will illustrate that in more detail in a moment with some other material that's in the evidence that hasn't been brought to the Commission's attention yet.

PN91

VICE PRESIDENT HATCHER: Right. Well, coming to the question now, in reference to the example in 11.98 - just thinking out aloud - I'm just wondering whether that could be corrected by having a first step of sizing the job by reference to a full award rate job. For example, in this case the narrow job might be sized at 60 per cent of a full award rate job. The wider job might be assessed at 90 per cent of a full award rate job. Then, once you've sized the job, you could do an SWS assessment on the properly sized job.

PN92

MR CHRISTODOULOU: Yes, yes. I think that is a way. If I'm following your Honour, if we say there is a job which involves a number of tasks and we say, look, that job itself would be a job that someone could do which really equates to 60 per cent of what otherwise, I guess, a person without a disability could do - - -

PN93

VICE PRESIDENT HATCHER: Well, a person who would be doing a job that would attract the full award rate.

PN94

MR CHRISTODOULOU: Full award wage. Okay. I'm not sure how you arrive at the 60 per cent though.

PN95

VICE PRESIDENT HATCHER: Let's assume you had a technique which said because we compare the award classification to what you're actually doing, the award says you have to do a range of the type of these duties. You're doing one simple duty. We have a technique which says that's 60 per cent of a full award job.

PN96

MR CHRISTODOULOU: Okay.

PN97

VICE PRESIDENT HATCHER: How you get there is the hard part.

PN98

MR CHRISTODOULOU: Yes.

PN99

VICE PRESIDENT HATCHER: Then you say, well, having arrived at that figure we will size the job at 60 per cent; then you do an SWS assessment on that task and you might say you get 40 per cent or 80 per cent or 60 per cent.

PN100

MR CHRISTODOULOU: Yes, it's conceivable you could do something like that. I'm just not sure how you arrive at the first part of it. That's all.

PN101

VICE PRESIDENT HATCHER: Isn't that what the Greenacres tool does in some form? That is, it categorises jobs in a certain way.

PN102

MR CHRISTODOULOU: Yes.

PN103

VICE PRESIDENT HATCHER: So it would be an analogy of categorising jobs by some means by reference to a job that attracts the full award rate.

PN104

MR CHRISTODOULOU: Yes, yes. I think if you - yes, you can do that. That's what indeed the Greenacres tool does do, in the sense that it outlines a whole range of possible tasks that a person can be doing at a particular level and that's creating the level, and it's determining, well, that's the percentage for that job, I guess, and then within that what we have is a different type of productivity output at that level.

PN105

So conceivably it can be done, but I still think given some of the problems we have found already with the way things are worded in tools, finding the best way of constructing or defining those levels is what I think would be the complex task to carry out.

PN106

VICE PRESIDENT HATCHER: But in theory it would preserve a role for the SWS, but correct for the problem identified in 11.98?

PN107

MR CHRISTODOULOU: Yes, yes, it would. I'll move on, your Honour. Just in terms of job losses then, we say the evidence is there in relation to the cost increases associated with the SWS. Just in terms of Greenacres itself, the KPMG report found in my evidence in exhibit 5, attachment 6, clearly outlines the difficulties faced by our organisation and projects those difficulties into the future. We have been suffering deficits of over $400,000 a year and any significant increase in any event would cause our organisation to have to restructure; but depending on the magnitude of the increase, definitely it would possibly mean closure of our enterprises and the consequences that follow from that.

PN108

In terms of the SWS being inappropriate for ADEs, I will skip some of the things I was going to say because I think that Mr Ward has already put some of those propositions to you, except I have in my evidence at exhibit 6, paragraph 46, again just wanting to illustrate - and I've done this by attaching at attachment E the duty statement of a cleaner. What the SWS does is if a person can only do one or two tasks of what would otherwise be a three‑page duty statement of a cleaner, they conceivably would get 100 per cent of the cleaner's rate.

PN109

I will give you this example because it's a real example of Greenacres. We have a number of our supported employees that empty garbage bins. They're capable of doing that. We actually get groups of them to go and do it together. They probably can go around the buildings and empty garbage bins as quickly as you and me. We don't necessarily have to empty the garbage bins as often as we do, but we give them that task to do.

PN110

Now, if they were assessed under the SWS they would actually get the full award rate, yet doing anything else other than emptying the garbage bins - they can't go and clean the toilets, they can't go and mop the floors, they can't go and disinfect in the kitchen - it's just a ludicrous proposition that somehow that one task can be compared to what would otherwise be the work you would expect of a grade 2 worker.

PN111

VICE PRESIDENT HATCHER: Is that all they do?

PN112

MR CHRISTODOULOU: No. In that example, they do other tasks at the level that they're capable of doing. In the SWS you normally would - because you have to assess people on the task they spend most of their time on, in this particular case you would have one person that probably spends maybe 25 per cent of their time possibly going around emptying bins and then they might do some other things like do some packing of NADS and all the cosmetic products, but they're all within what we call our A‑level tasks.

PN113

Conceivably that person - in fact there are a couple of people, because they work in groups. They could both get 100 per cent or their wages would be artificially lifted by virtue of the fact that they could actually do that reasonably quickly. Now, as I said before, maybe the way we resolve that is we don't empty the bins so often and therefore take them off that task, because they happen to be really quick at doing that particular task; but that's the perverse nature of how the SWS actually works.

PN114

We also have the evidence from our general manager, John Harvey, at exhibit 50, on the operations of Greenacres; the complex nature and the diverse work that occurs. You have similar evidence that has been put in by Rob Kirkham at exhibit 51; Heath Dickens, exhibit 31; Anthony Rohr, exhibit 35; Steve Burgess, exhibit 22. They all give you a good flavour of what goes on in an ADE and the very diverse nature of the work and activities we carry out.

PN115

Now, in my statement at exhibit 5, attachment 3, I have outlined in some detail a document that has been produced over the last couple of years; an analysis of the SWS in much more detail. I will not take you to that. It goes to several pages. It's there for the Commission to look at if it finds it relevant to do so. What I do want to do is go to the trial that is found in exhibit 2. Now, in terms of exhibit 2 - I don't have a hard copy of it, but I will get it up.

PN116

What I wanted to do - and I did give Mr Harding a copy of this - I wanted to only look at the analysis of what came out of that trial from the Greenacres perspective and what I've taken is only the data in that trial, because it goes across, you know, 20 or so pages, and tried to put the results into a document. I don't necessarily need to tender it, but it would be good to give a copy to the Commission.

PN117

Now, what this does, it actually outlines the results of the trial that was conducted at Greenacres. The trial is very interesting and the outcomes are very interesting. First of all, you will see the first three people are people that do higher level work at Greenacres in our body bag section. Under the trial they all scored lower than what we currently pay at Greenacres and, in fact, the first person considerably lower.

PN118

VICE PRESIDENT HATCHER: What is the reference to duration?

PN119

MR CHRISTODOULOU: So there are two methods apparently under the SWS that assessors can use when they assess. Duration is - I think it's just using a clock. You know, counting using a clock. The tally method - and I stand to be corrected - is where someone has already worked out the number of products that should be completed in the time and you don't put the stopwatch other than the start and the finish, and you just count the products at the end.

PN120

As I understand it, there are two slightly different methods of doing the timing. You will see there are slightly different results, but, in any event, what it does show you is the people that were doing more complex work actually in our body bag section got lower results. Interestingly enough - well, it's not so much interesting as sort of expected, you would have some people that were doing packing, particularly employee 4, that got a much lower result, in which case they would still remain at 15 per cent because that's the minimum that we pay. In the SWS the minimum I think is going to be 12.5 per cent that came in under the modification.

PN121

Again, employee 5 would have a decrease, but you'll see there are significant increases in terms of employee 10, employee 8 and employee 6. If I could just - - -

PN122

VICE PRESIDENT HATCHER: You mean employee 9?

PN123

MR CHRISTODOULOU: Sorry, employee 9. Yes, employee 9. So if you go to employee 10, the increase there is 269 per cent and that's interesting because there is a decrease in employee 1 of 77.5 per cent They are the two extremes of the situation.

PN124

VICE PRESIDENT HATCHER: Assuming you could implement wage reductions, does this support your case about the cost of the SWS?

PN125

MR CHRISTODOULOU: Yes, it does, and I'll tell you why it does. I will tell you why it does. Because the people that we have as packing - and you will see there has only been one decrease there. Whilst there have been some decreases there, the reality is that the minimum you can pay someone is going to be 12.5 per cent. You don't know, but we know who the people are that scored the increases in these results.

PN126

Now, 95 per cent of employees that we have at Greenacres actually do packing work at levels A, B and C. If there can be any doubt about that, we've actually provided the Commission, in my evidence, with a copy of all the levels of all our employees so you can see where they fit under the Greenacres tool. You will see 95 per cent of the people are at levels A, B and C which are predominantly packing. Notwithstanding this, there would be fluctuations in some people that would go down under the SWS. The bulk would go up and significantly up. This just verifies our own internal costing proposals. That document about where our people sit, can be found in attachment 8 of exhibit 5. It's quite a long document, but the Commission can have a look at that and I guess this is further verification of the costing cost where people doing low skilled work, in the main under the SWS, will have greatly inflated wage increases.

PN127

So we say that the issues of productive output versus skills, or work value type arrangements, also is very well understood by our employees. We have been consulting our carers and supported employees about the issue, so they very, very much understand what the debate's about. Many of them understand why they get their rates of pay and why some are lower than others, so I want to take you to some of that evidence so the Commission can be clear about this, as it hasn't been taken yet. This is evidence directly from either supported employees or their carers.

PN128

At 2GDS2, and that's exhibit 99 at paragraphs 1, 2, 3 and 4, the person there says:

PN129

I used to do work at Greenacres when it was a sheltered workshop, we had no rights at work. In those years I got paid according to how fast we could work.

PN130

I think what she meant by that, they were doing piece work at the time.

PN131

I used to get stressed out and it made my anxiety much worse. Now I get paid primarily according to our skills, there is no pressure to work fast. I get paid less than a sewing machine operator because that work is more complicated.

PN132

Then - - -

PN133

VICE PRESIDENT HATCHER: Where does that person work?

PN134

MR CHRISTODOULOU: That person would work in a combination of jobs but, at the moment, I think is working in our balloon section, tying little balloons up that are put on sticks for Valentine's Day, Happy Birthday, et cetera. I'm not sure if the Bench can remember seeing at the inspection.

PN135

VICE PRESIDENT HATCHER: That was adjacent to the sewing area, was it, or not?

PN136

MR CHRISTODOULOU: No, it was in building 2.

PN137

VICE PRESIDENT HATCHER: How would that person know about the sewing work?

PN138

MR CHRISTODOULOU: Sorry?

PN139

VICE PRESIDENT HATCHER: How would that person know about the sewing work?

PN140

MR CHRISTODOULOU: Because at our meetings that person goes to the meetings. That person is well-versed about what's going on and when we've explained what's going on at our meetings that we've had, and we only had one three weeks' before these proceedings, we reiterate the results of what we do versus the results of what might happen with the SWS and why someone's wage might be at this level, under the Greenacres' tool, and the skill levels that we have.

PN141

By the way, all of the witness, some of which are here today, and that person is here today actually, were available to be cross-examined and the other side chose for them not to be cross-examined.

PN142

We also have the evidence of 2GDS1, it's found at exhibit 91, and at paragraph 11 of that fairly long statement, she goes into some detail about the whole question of skills and productivity. Now, I don't seek to read all of that out, it goes to nearly half a page, this is a person that has the following disabilities, or has had the following conditions: major depression, alcohol dependence, personality disorder avoidance, acrophobia, social phobia, anxiety disorder and self-harm. This is a person primarily with a mental illness but actually has quite a good understanding, is very literate in her own right. She's written a four page statement but, at that paragraph 11, goes specifically with why she feels a productivity based system would not be appropriate for her in her circumstances.

PN143

In addition to the SWS artificially lifting wages for lower value work, it also doesn't provide and in no way discounts for all the down time that does take place in a disability enterprise, when we provide all the additional training, both vocational and non-vocational, to supported employee during working hours. It also does not capture many of the social activities, the counselling sessions, the interventions associated with behaviour issues, the provision of medication, personal hygiene matters that occur with supported employees. The SWS does not capture that down time.

PN144

VICE PRESIDENT HATCHER: It will do, to some degree, in the modified form?

PN145

MR CHRISTODOULOU: No.

PN146

VICE PRESIDENT HATCHER: Why's that?

PN147

MR CHRISTODOULOU: It won't, not in the modified form at all. So - - -

PN148

VICE PRESIDENT HATCHER: Wasn't the provision of 50 per cent - capacity to assess by 50 per cent on historical records meant to fix that deficiency?

PN149

MR CHRISTODOULOU: Yes, but those historical records that we have, that's - we still have to assess in the same way an assessor would assess, that is whether people stay on task, so if someone goes off task, they've just walked away from their bench, the clock's still on, yes, we can record that through historical data, but when that person has an episode and we need to take them away and look after that person, support that person, the clock stops.

PN150

VICE PRESIDENT HATCHER: Why's that?

PN151

MR CHRISTODOULOU: Because that's how the SWS works, it doesn't say the clock keeps going.

PN152

VICE PRESIDENT HATCHER: That's a general proposition but I thought the purpose of this historical data was to allow you to take into account all the time they spent at work and measure their output against all that time.

PN153

MR CHRISTODOULOU: Well, I stand to be corrected because if the SWS does, to some extent, able to capture all this downtime, which I will go to, they're not the only things, then that would be of somewhat more benefit to employers, there's no doubt about that. It still doesn't resolve some of the underlying issues around the work value and the like, but that would still be of some benefit.

PN154

VICE PRESIDENT HATCHER: The document you handed up before, with the 10 employees, was that the current SWS or the modified SWS?

PN155

MR CHRISTODOULOU: Sorry?

PN156

VICE PRESIDENT HATCHER: The document with the 10 employees - - -

PN157

MR CHRISTODOULOU: Yes, that was done using the modified SWS, although, don't forget, there was no historical data we could offer in those circumstances.

PN158

VICE PRESIDENT HATCHER: All right. So if the modified SWS was fully implemented, and you had the data that you could use, that might modify some of these results?

PN159

MR CHRISTODOULOU: Yes, it could well do so. It could well do so. In fact, I think if you look back at the assessments we did back in with the lead organisation, back in 2014, there was on occasion there where someone got 80 per cent of the award wage. We had a talk to the assessors, "Can you do that again because this person - let's just move away and observe", and the person got 10 per cent. So it also depends on the environment the person's in, whether they think the supervisor's close by or whatever.

PN160

The other thing that the Commission ought, and I think your Honour's raised this before with the modification, don't forget that if there is a discrepancy or a difference of opinion, and if it's more than 20 per cent, then you fall back to what the independent - so that, in itself, doesn't necessarily help, if you've got that artificial 20 per cent there.

PN161

So, again, I just want to take you to the evidence about downtime now, rather than just that opening statement. There's evidence of the type of social activities that are found in my statement, in exhibit 6, paragraph 17, again I won't take you to that but the evidence is there.

PN162

VICE PRESIDENT HATCHER: Mr Christodoulou, at your enterprise is that treated as paid time?

PN163

MR CHRISTODOULOU: Yes. And I'm sure, if you asked Mr Harding, that he would say no, that the clock would stop in those circumstances. They will just say, "If you are going to have paid social activities, well that's not productive work. You've made that decision, you pay for that." I'm sure he'd probably say that.

PN164

The evidence, in my statement at exhibit 5, attachment 11, 13 and 14, demonstrates, and we've got it all listed there, all of the paid training that we do, both non-vocational and vocational training. So there's quite a bit of that. Again, when we take groups of people off the shop floor to give them that type of training, again, I don't think, this is my understanding, that the SWS, even in its modified form, discounts that in any way.

PN165

Again, we have our half hour shop floor meetings, a month, which involve all of our 240 employees. Again, there's evidence there about the type of topics that we discuss and a lot of those topics, your Honour, are topics that would never been talked about in any open employment setting because they deal with people's behaviours, what happened on the bus coming to work, they deal with social activities, they remind people of things that you wouldn't need to be reminded of every day about what your responsibilities are when you're in a work environment. But those meetings are important and again the SWS would hot discount for that down time.

PN166

Of course, it is true, and I'm going to get to this issue of funding, but our trainers, apart from - are funded to assist people with disabilities to do their work, to provide them with that support, to provide them with that training. And so there can be no doubt about this, the DMI funding that Cambridge C talked about, I think, yesterday is not a wage subsidy for ADEs. In fact, the guidelines are very specific, it's not a wage subsidy to pay wages for supported employees, it's money paid to the ADE to allow us to employ the necessary personnel to provide support to our supported employees. I think what's happening is that ADE Legal are trying to confuse that funding when they criticise the classification structure when we talk about supervision and support.

PN167

VICE PRESIDENT HATCHER: So, Mr Christodoulou, this is a basic question that I don't know the answer, is DMI funding paid in open employment?

PN168

MR CHRISTODOULOU: No. There are other payments made to employers. I think you'll find that the document I referred to earlier, which is the discussion document, found in exhibit 33, annexure A, this is the document where the government now wanting ADE to respond to, it's called Ensuring a Stronger Future for Supported Employment. There's a lot of statistics in there, including what funding is currently available to employers, both in open and supported employment settings. So the answers, probably, that you're after are in that document, your Honour.

PN169

VICE PRESIDENT HATCHER: But as the NDIS is rolled out, so DMI funding is replaced by funding directly to the disabled person, they could then use that funding to go into open employment?

PN170

MR CHRISTODOULOU: They could do, but let me just check something - yes, under the NDIS at the moment, if the employee chooses in their package that they want supported employment, and they choose to stay or come to Greenacres, we will be funded the same way as we're funded now except the level of funding has changed. What they've now done at the moment is they've averaged the funding so that - no, it's changed again - sorry, your Honour.

PN171

MR MUSSO: Sorry, I just want to clarify a couple of things here. The arrangement for employees - - -

PN172

VICE PRESIDENT HATCHER: Mr - - -?

PN173

MR P MUSSO: Mr Musso.

PN174

VICE PRESIDENT HATCHER: Yes, Mr Musso - for the record, yes.

PN175

MR MUSSO: Yes, the funding arrangements for employees who transfer from DSS funding to the NDIS remains effectively the same rate. It's effectively the same support funding. What else I wanted to clarify is that the Disability Employment Services program sits outside of the NDIS; it is not part of it, and funding for that program is not provided through the NDIS. DES is a Commonwealth employment program. Thank you, your Honour.

PN176

VICE PRESIDENT HATCHER: Just so I understand that, can you or can you not, if you're currently in supported employment and there is funding going to the ADE to support that employment, can you under the NDIS say look, I want to move to open employment and I want that funding to go with me?

PN177

MR MUSSO: You can make the decision to access open employment while you're still receiving supported employment, but you cannot transfer the funding with you. DES uses an entirely different funding model.

PN178

VICE PRESIDENT HATCHER: Thank you.

PN179

MR CHRISTODOULOU: So we get the funding. We get the funding. If a supported employee decided they want to do open employment and were able to transfer out, we would lose that funding. Does that clarify things, your Honour?

PN180

VICE PRESIDENT HATCHER: And it would be a different funding model from DES that would be applicable?

PN181

MR CHRISTODOULOU: Yes, or alternatively they may - the supported employee may have received in their NDIS some other moneys to enable them to do some other forms of training that have assisted them to go and achieve open employment.

PN182

VICE PRESIDENT HATCHER: Thank you.

PN183

MR CHRISTODOULOU: In terms of that training that we provide, can I also say this about training generally? Apart from all the downtime training that we provide, of course the role of the trainer is to do one‑on‑one training on the shop floor to develop people's skills, and group training at the same time. But we also can sometimes encourage individuals to develop their skills in a way that doesn't enhance our production but enhances their capability, and so if I go to the evidence and the statement of 2GDS1, exhibit 98, at paragraph 11, that person says:

PN184

Greenacres allows me to organise the better day group in paid time. We all attend in paid time.

PN185

That group varies from between six to 12 people.

PN186

I'm not sure how you measure productivity here for ourself or group. Greenacres recognised my skill and let me chill out when I need to.

PN187

So in my statement, exhibit 5, attachment 4, I actually provide an analysis of the modified supported wage proposal, and we actually did - and it's a matter of public record because we've shared it with other employers, although we did put it in the conciliation - we did say to the other side look, if you can accommodate some more modifications maybe we can look at that, and those modifications went to the issue of the differential of the work value and skills, and it also went to how you accommodate the downtime, and we could not reach any agreement on that proposal. In fact, we didn't have much of a conversation about the proposal because it was rejected fairly quickly when it was put up. I might add - yes, I'll keep going. I've dealt with the DMI.

PN188

I just want to spend just a little bit of time on ADEs and our purpose, and of course the Commission is well‑versed now why we exist, but I think it's really important that the Commission understands that many of our people have actually tried open employment and they've come back to our disability enterprise as a consequence of open employment not being able to accommodate them and the support they required. If you go to - - -

PN189

VICE PRESIDENT HATCHER: Mr Cain's evidence was that transition from ADE to open employment was much less successful than going straight to open employment, wasn't it?

PN190

MR CHRISTODOULOU: He may be right about that, because I can't talk of the people that go via the DES system, but you see the people that come to ADEs are people that - - -

PN191

VICE PRESIDENT HATCHER: Different characteristics.

PN192

MR CHRISTODOULOU: That's right, and they come via a different channel. But I think it's important that I take you to these examples: 2GDS1, exhibit 98, paragraph 3:

PN193

When I was in open employment I was treated like a brainless, dumb‑ass idiot, e.g. I needed to ask the warehouse manager a question. I said I know this is probably a stupid question. Before I could say anything else, he said: There is no stupid questions, only stupid people. Needless to say, I didn't finish the question.

PN194

She goes on in paragraph 9, and she's talking - she's got quite a long statement here - she says:

PN195

If I was in open employment -

PN196

She does have a question there -

PN197

I wouldn't be here -

PN198

I presume she means Greenacres -

PN199

because of my age. 61 is past 50. No one would want me. I'd be totally depressed all over again. Isolation breeds bad thoughts. Bad thoughts breed suicidal thoughts. Suicidal thoughts breeds death.

PN200

She goes on or the person goes on and says in paragraph 10:

PN201

All of this might contribute to an increase of suicidal self‑harm. We are safe from ridicule as it is. I can't go back to being treated like a brainless, dumb‑ass idiot.

PN202

Then at 2GDS3, the person there says at paragraph 11:

PN203

In the past I have spent time in open employment including -

PN204

I won't name the two employers on record, your Honour -

PN205

to name a few. While working there I did enjoy my experience at times, though I don't think open employment is for me because of the demands of this work and the lack of on‑site support. I often felt like an outsider and the work made me feel stressed at times.

PN206

I then go to the statement of Jessica Ratcliffe‑Harrison at paragraph 7 and 8:

PN207

I worked in open employment at -

PN208

Again, I won't name the employer -

PN209

They took me on the knowledge I had a learning disability and knowing I didn't have time‑management and money skills. Open employment wasn't supportive and didn't work out for me. I found it really hard to work in open employment. We kind of agreed not to work at -

PN210

Names an employer -

PN211

anymore and got the sack.

PN212

Then there is a third statement from GDS3 and this is a carer who is talking about her son:

PN213

When he left school he tried working in open employment, helping clean out in a food outlet chain. Management was helpful but it was a very isolating experience for him not being able to communicate well or relate to the other young people who worked there. He felt like an outsider, he was sad and he didn't want to go back.

PN214

So they're just some of - and it's only a small number of a bigger number who have tried open employment and have come back to a disability enterprise setting, and of course the converse is that there are hundreds of people, particularly at Greenacres, that love being at work, and again I go to the evidence of 2GDS1:

PN215

Greenacres has changed my life. I know I can go to work for three‑and‑a‑half days per week, up from two, then three days. I can now look at some people. I am walking around the buildings. I can say hello to some of my work mates after they say hello to me.

PN216

Then you've got 2GDS3:

PN217

I began permanent employment at Greenacres enterprises in 2013. I was able to attend work independently by catching the bus and gained confidence in dealing with members of the public.

PN218

Then you've got, again, Jessica Ratcliffe:

PN219

I get to work with my trainers and talk about issues I have related to my post‑traumatic stress. I love working at Greenacres and I have come a long way since I started there. I have moved up so many levels and have reached as far as I have based on my skills and ability to work. I am on a higher paid level and continue to keep up the good work. If it wasn't for my hard work and trainers I wouldn't be where I am today.

PN220

And so I guess what I'm trying to put there is that we do have settings that are about supporting employees and supporting supported employees. We also have, can I say - and this is found in my witness statement in the evidence, in exhibit 4, attachment F - we have an independent audit that occurs each year. These independent auditors change from time‑to‑time, but one of their roles is to actually bring supported employees together without management and to ask them a whole range of questions about how they feel about working at Greenacres, and so again things like:

PN221

I'm happy to work here because we are allowed to have some fun while at work, as long as we do our job. They give me some good jobs here because they know that I like to learn new things. I like working here because it gives me purpose. The socialisation at Greenacres is great because it helps me grow. I like working at Greenacres because you get treated with dignity and respect.

PN222

There's lots of other comments there and I take you to that, or you can read that in your own time. Certainly further in cross‑examination of Mr Cain, I think last Friday, he did say on transcript, I think from paragraphs 2490 to 2498, he did answer yes to all of our questions regarding the way people with a disability and supported employees do interact with people without disabilities and the positives that can come from working in a disability enterprise.

PN223

On the question of the construction of jobs for supported employees, I did want to take your Honours back to the document, the Australian government submission that was on minimum wages, because at paragraphs 96 and 97 you will see there that there were attempts, as I said earlier, for a number of organisations to push the SWS into business enterprises at that stage, and the Commonwealth said this:

PN224

First, the SWS was specifically designed for the use in open employment. This was acknowledged at the time the SWS was being developed.

PN225

It goes on to say:

PN226

The joint submission to the AIRC proposing the SWS in 1994 states the SWS is to apply to open employment only.

PN227

You'll see there's a comment there from the ACTU president, who says:

PN228

Sheltered employment will remain a separate and distinct area of activity. The model clause will not apply with respect to people who engage in such an environment.

PN229

And so on, and then of course in '97, about the construct of jobs, it says:

PN230

The SWS is inappropriate for business enterprises because it tends to significantly overvalue workers, in particular jobs. In many situations it reduces wage outcomes that make employees with a disability uncompetitive in the wage market. This is because the sole determinant of pro rata wages under SWS is a single measure of productivity. This does not suit the unique character of employment in business service enterprises as generally these jobs are redesigned to narrow the range of tasks performed by employees. This is in response to the often limited capabilities of employees in the sector. Productivity alone is not a good proxy for the value of an employee who is working in a job that is much narrower than a job that attracts full wages in open employment. To properly assess the employee's work value in such circumstances is necessary to measure the overall capabilities of employees rather than productivity alone.

PN231

That is a government submission, their own analysis at the time back in 2006, and I would suggest that nothing great has changed from when that submission was made to this institution back then.

PN232

VICE PRESIDENT HATCHER: We might inquire later in the day whether that remains the Australian government's position.

PN233

MR CHRISTODOULOU: Can I just say the other thing, and I alluded to this earlier when we talked about the objectives that were in the statement of her Honour Booth DP, the question of income and job security are major factors that we say need to be considered by this Commission when we look at this issue. The evidence in my statement at exhibit 5, attachment 7, shows the total income that employees receive - and we've done this for only these categories of hours: 16 hours a week, 24 hours a week and 35 hours a week - but it shows in all cases where starting from the percentage of I think it's 15 per cent going upwards, that in all cases when you combine the wage and the pension entitlements for the supported employees, that they actually receive greater than the minimum wage for the hours that they work. There's no doubt about that. They are better off than a person without a disability in terms of the hours that they work and the minimum wage. That's supported again in evidence, not just our calculations in that attachment in my statement, but supported in the evidence of GDS1 where she says - and this is a carer who's talking on behalf of her daughter:

PN234

Her wages from GDS supplements her pension entitlements. Overall she has a total income of $606.20 per week. My understanding is the minimum wage is now $18.29 per hour. If a person without a disability worked 21 hours a week they would be on an income of $389.10 per week.

PN235

So in that particular case it's considerably more. In 2GDS1:

PN236

While I've been at Greenacres I've been able to progressively receive pay rises.

PN237

She then goes on to say:

PN238

My weekly wage is $200.88. My weekly pension -

PN239

It has got there ranges from $431.65 to $482 per week, and then she goes on and says she also gets a mobility allowance of $94 per fortnight. I haven't done that calculation. She hasn't put it in her statement, but I'd suggest with those figures that particular supported employee, again for the hours that she works, receives much more by way of combination of her wage and disability support pension than what would otherwise be paid had she been a person without a disability on the minimum wage.

PN240

VICE PRESIDENT HATCHER: Mr Christodoulou, do you have much longer to go?

PN241

MR CHRISTODOULOU: I have half an hour.

PN242

VICE PRESIDENT HATCHER: We might take a morning tea adjournment for about 10 minutes.

SHORT ADJOURNMENT�� [11.35 AM]

RESUMED�� [12.01 PM]

PN243

VICE PRESIDENT HATCHER: Mr Christodoulou?

PN244

MR CHRISTODOULOU: Yes, thank you, your Honour. Just going back to some of the examples in relation to this issue of income, I'll give one more - sorry, there are further examples in 2GDS3, in exhibit 100, and the statement of GDS2 in exhibit 66, but I will read the part of the statement of GDS3 in exhibit 67 at paragraphs 12, 13 and 14 where this carer says of her son:

PN245

Currently he obtains a total of $438.70 per week from his Centrelink disability support pension. He earns $179 per week from Greenacres. He works 26 hours per week. His total income is $617.80 per week. The minimum wage is $18.29. If he was working 26 hours a week on the minimum wage he would earn $475.54.

PN246

In my evidence at exhibit 5, attachment 8, we have provided our calculations where the average supported employee at Greenacres, if we did get to this catastrophic situation where we had to close, would lose on average $125 a week and then just fall back to the disability support pension, and of course that will be more catastrophic for the supported employees, particularly those that live independently or those that live in low income households; this would have a devastating effect. Job losses would affect people not only in terms of income but in terms of their social inclusion and the like. The evidence from GDS1 at exhibit 65, paragraph 17, says that:

PN247

Her daughter would be devastated if she could not work and miss out on the friendships she has developed. The interaction with her support staff and the social interaction that GDS provides is invaluable and cannot be measured just in terms of money.

PN248

In the evidence statement of 2GDS3 at exhibit 100, paragraph 8, she says:

PN249

Working at Greenacres I have made some friends which appear as though they will be lifelong. If it wasn't for my job I would be sitting at home and couldn't have found all these wonderful people and my love of my life.

PN250

At the evidence statement, GDS2, exhibit 66, this carer says:

PN251

Greenacres is not just about the extra income that supplements the pension. It is about feeling included, having support, meeting up with friends and feeling proud about myself.

PN252

Another carer says at GDS3, exhibit 67:

PN253

A question posed to me was what would he do if there was not a job available at Greenacres and how it might affect him and the family. I put the question to him and he said: I would miss my friends and my girlfriend. I'm not sure what would happen.

PN254

So we do maintain that job security for supported employees should be a major consideration for the Commission in these proceedings. We maintain that the Bench should put in place a wage determination approach similar to the rest of the workforce, that is, one primarily based on the skills to do the work of a particular value. In terms of the ABLA work value classification structure, we do support that as an option. We've made that very clear in our submissions. We believe the proposal is not unlike a typical classification structure applying to people without disabilities, that is, it does have wage levels which are determined by virtue of the level of supervision, initiative, but of course mainly the value of work performed. I must say this, and I would put this on record, that that classification structure is not foreign and has never been foreign to AED Legal. It was put forward in the conciliation process quite some time ago, but yet again there was not any preparedness to look at anything other than the supported wage system. So in terms of any deficiencies it might have, there was never an opportunity to have proper negotiations around the proposal that ABL contends for in these proceedings.

PN255

Can I just deal now with the question of the rights of work clause? I know that that is being agitated by Our Voice, but we fully support that clause. I think it is true, certainly in the Greenacres enterprise agreement, we have certain provisions in that where we do recognise the rights of employees to be members of the union, and certainly at Greenacres we certainly provide information to our supported employees and carers about the relevance of unions and their rights. In fact, we've had some quality circles training around that issue. But I think it is incumbent on employers to do some extra things in this space given the nature of the industry, and I think the rights of work clause that is being put forward by Our Voice tries to do that. What it attempts to do is to put some obligations on employers to provide information to supported employees, their carers, their guardians about their right to be members of unions and be represented in the workplace, about their right to actually seek information from the Fair Work Ombudsperson, about providing information to guardians and their families and supported employees about who they can go and see when they have to make informed decisions about things that affect their work. And then in one of the clauses it does make the point that there needs to be a level of consultation, but with respect to any issues that the employer might - decisions they might make or contemplate that could be detrimental - and I use the word "detrimental" to the supported employees - of course, you can't open the box and say well every single decision the employer makes, that everything needs to be consulted about; that would be impractical, but particularly anything detrimental that could affect a supported employee, and we list those things - some difficult workplace change, grievances, redundancy, disciplinary matters, performance appraisals, wage assessments - we say that there needs to be provision where we provide information to the supported employee, guardians, carers, their representatives, in relation to that.

PN256

I won't say anything more about that, other than I think the clause has merit. I think the bulk of employers in this industry are fair employers. They seek to treat their employees with dignity and respect, but like any other industry there can be no doubt you will always have some employers that may not make decisions in a way that would be fair, and therefore some additional protections in this regard, I think, if it's available for the Commission to put such a clause in this particular award, it should do so.

PN257

We say the decision that this Commission will make is going to be of some consequence. This is - and you've heard the evidence - quite a complex matter and indeed this may well be the first country in the world actually, I think, where an institution that sets wages and conditions is actually determining an issue like this. I think in other countries probably things have been done via government policy and the like, but you've never had an industrial relations institution, I think, like the Fair Work Commission having to make a decision like this in other countries. So it is an important decision and it should be seen as such.

PN258

If I could deal with the issue - and can I say it is a sad fact that there has been a failure of government policy in this whole area, not just in the last four years but I think in the last two decades. If you go back and look at the Ronalds Report, and I know it well because I was on the steering committee that referred to Chris Ronalds or she referred to us in developing that report, there was a proposal in that report that in fact whatever the wage determination method might be to assess a level of wages, the government should then actually subsidise the rest of the wage up until the award wage. Had the government done that, which was a proposal then put by the ACTU back then, we wouldn't be here today. It would have just been an internal assessment - there would have been a top‑up and everyone would have been on the full award wage. But that was rejected at the time, primarily why? Because there was a concern that by doing that people would lose the benefit of the disability support pension, and that was a real concern at the time. It's still a concern now, but nonetheless there could have been ways of dealing with that issue.

PN259

It is a fact now that we do have this letter in exhibit 47, which is the government's only position that is public at the moment in relation to its current funding, and you will see that what it puts there is that those organisations in ADEs that move across to a productivity‑based wage tool, and they were referring there to the SWS, that they would be prepared to, one, to supplement the increases by 100 per cent in the first 12 months, 75 per cent in the second 12 months, 50 per cent in the next six months, and 25 per cent in the final six months. So it was a three‑year supplementation and after that you're on your own. One of the reasons why the bulk of the industry never took that offer up is because they all knew that given the wage costs associated with moving to the SWS, even with that supplementation, there's no way you could restructure your business to be able to resolve the issue of wage costs going up by more than 50 per cent or more.

PN260

What we say about the government's offer is this: the evidence in these proceedings demonstrates that unless the funding is going to be ongoing, that is that there is a funding formula which picks up the increases and then it's put into the funding formula of the ADEs, this particular proposal is not going to resolve the issues of any significant wage increases that might arise out of the decision.

PN261

Secondly, it only relates to the issue of a productivity based tool, and so what we would say to the government, and I'm sure they're listening, is that really the government should go back and relook at their position because I think what it should be doing is saying, well, if there are any wage costs associated with whatever the decision of this Commission makes, that they should be available even if it wasn't a purely productivity based assessment system. But that's not what the current position is with respect to the government.

PN262

The second-last point I'd make in this regard, even if this Commission determined that the supported wage system � sorry, even if the government, sorry, I take that back, even if the government decided it would actually pay 100 per cent ongoing funding to organisations of the increases associated with going across to the SWS what I put to you, even if that was the case, the SWS is still an inequitable way, in my view, of determining because of disparities that you would have between people that do, as I've indicated before, the simple type work or complex work, et cetera.

PN263

It's interesting to note with respect to the government, and I make this point, that in the equal remuneration case where there was an arbitration there significant increases arising into the SCHADS award, the government of the day made a decision that it would provide ongoing funding in their funding formulas to take into consideration those wage increases. They weren't phased out like the funding we get now from the government and other community organisations incorporate the increases in the SCHADS award. They don't stop. They're built into the funding model.

PN264

So it's interesting that the government would do that for an industry of workers who don't have disabilities yet would in some ways have a very narrow approach to how they might fund increases in this particular case for supported employees; a different approach for people without disabilities than people with disabilities. I suggest the government needs to have a look at that with respect to the funding model.

PN265

I'll finish on two last points, so I'm nearly there, your Honour. Firstly, AED Legal, the HSU, PWDA, who purport to represent supported employees in these proceedings have brought little, if any, evidence to indicate that their position to impose the SWS on ADEs is driven by widespread discontent amongst supported employees or their carers. Indeed the only evidence that's come forward comes primarily from supported employees and/or their carers who are satisfied with the current employment arrangements and the real value that ADEs play in their lives. Indeed Inclusion Australia, who was involved in two years of conciliation, have not chosen not to be formally represented in these proceedings. So I'm not sure now whether they've changed their view about the SWS. But that should not be lost upon this Commission in terms of the weight of evidence coming from the people, the workers themselves in terms of the position that we put.

PN266

Finally, and subject to any other questions the Bench may have, I want to finish with the evidence of a supported employee as identified in GDS2. On Wednesday in the Australian Parliament she actually had written a poem which is actually contained in her evidence that's been filed in these proceedings. Well, she had that poem read into transcript by her � sorry, into Hansard. I'll take that back, into Hansard by her member of Parliament, Sharon Bird, member for Cunningham, so it's appropriate that I read her evidence into this transcript, and she wrote a poem because she feels so strongly about what's happening and it's called My Job Counts. It says, and I'll read it, and I'll finish. It says:

PN267

My job at Greenacres Disability Services means so much to me.

PN268

Making lots of friends and happy memories as I'm sure you will all agree.

PN269

It's not about the money that I receive;

PN270

it's about the life skills that I can learn and achieve.

PN271

Coming to work and feeling proud each day

PN272

I know that I have done an important job today.

PN273

That's why the Fair Work Commission of Australia should listen to us all as a nation and we stand strong because we are not failures.

PN274

Please listen to us the Federal Government of today because we are telling you that my job counts in so many different ways.

PN275

This is a shout out to all and one please accept our pay system for all so the future will be bright one and all.

PN276

We will keep fighting till the end so we can all stand tall so we can all just live happily after all.

PN277

And I close my submissions with that.

PN278

VICE PRESIDENT HATCHER: Thank you.

PN279

MR WARD: We have some matters arising. I'm in your Honour's hands, we can deal with them now before lunch, after lunch. I'll just let the Bench know.

PN280

VICE PRESIDENT HATCHER: We might deal with them later. Ms Walsh?

PN281

MS WALSH: Thank you, your Honour. If I'm correct the author of the poem is here today or was earlier on because I was talking to her. I probably need or we probably need some direction here, your Honour and Commissioners. As you are aware we have no expertise in how this actually gets to be. There's two simple requests: one is to update the modern award with the word "nominee" which is consistent with the terminology used by Medicare, NDIS and other government agencies. It has been before all parties. I am not sure of the approach by the advocacy parties, but they have had time to consider it so perhaps we need to get their opinion before we move any further on it.

PN282

VICE PRESIDENT HATCHER: No, no, Ms Walsh, you just say whatever you want to say about it.

PN283

MS WALSH: All right.

PN284

VICE PRESIDENT HATCHER: And we will receive those submissions.

PN285

MS WALSH: All right, then. So the reason we think this is necessary is that the current award doesn't actually put in place sufficient process or mechanisms for the family � well, particularly for the workers, and it's the workers who actually will be the recipients of whatever wage awards are determined. So we believe that entering this into the award in a formal way gives the workers more protection. It assists their family carers, and even the employers to provide necessary information when and where it is needed.

PN286

The current award is antiquated in its terminology because many of these workers do not have parents. Many of them have siblings, and the word "guardianship" is now being replaced anyway. Family carers of course, in most cases, are the people with the knowledge, the love and responsibility, so there are many, many sections in the award where this occurs, this terminology occurs, and in some cases it's just any representative if applicable type thing. So we just need to ensure that the modern award reflects current Federal policy as to how people may act on behalf of people who have limited advocacy skills and legal capacity, and this is our suggestion. Obviously the Commission will determine where it goes. It is important that wherever it goes, whether it's just a subsection that's referred to as a class somewhere in the award, that is a matter of process for the Commission. We don't have that sort of knowledge. But we need to protect the rights of the workers. We need to acknowledge that there will always be issues, and we'd like to see a formal mechanism for that to be included that puts some responsibility also back on the employer to ensure that both the supported employees, where necessary, and family carers or representatives or nominees are appropriately educated as to what processes are in the award for them to follow in the event of the circumstances we list.

PN287

VICE PRESIDENT HATCHER: Ms Walsh, the current consultation and dispute resolution clauses refer to a representative of the employee. Is that inadequate for some reason?

PN288

MS WALSH: But the representative, your Honour, could be anybody.

PN289

VICE PRESIDENT HATCHER: Yes.

PN290

MS WALSH: And it could well be that the supported employee probably may choose someone that may not have their best interests at heart. I believe that the words were used so "nominee", and I suppose you could say that, well, representative/nominee it's the same thing, but there are fairly strict guidelines written into, you know, Commonwealth issues around entitlements that use the word "nominee". I mean, try and ring up Centrelink or DFS or any of those places and get information that you need to provide care for your family member, and if you're not the nominee then you don't get past the 1300 response.

PN291

DEPUTY PRESIDENT BOOTH: So that raises the question for me, Ms Walsh, as to whether practically speaking if the supported nominee didn't formally nominate someone ‑ ‑ ‑

PN292

MS WALSH: Yes.

PN293

DEPUTY PRESIDENT BOOTH: ‑ ‑ ‑and the word "nominee" appeared and was defined in that way in all these different places in the award whether that might actually leave the supported employee without any support.

PN294

MS WALSH: I guess it's a matter for other people to determine but we didn't actually see nominee as being the only words in the award. There may be guardian in place and in that case the guardian would be, because they're still there, because, you know, guardianship won't be phased out in a very quick space of time. So it could be nominee, it could be � we would like to see it added. We want the word "representative" I guess replaced by "nominee".

PN295

VICE PRESIDENT HATCHER: Sorry, it's still the disabled person nominating somebody.

PN296

MS WALSH: It is, but if you have the other words in there � I mean, if you continue to retain the word "carer", "parent", "family", "guardian", "advocate" or union assistance", does it make it too wieldy?

PN297

VICE PRESIDENT HATCHER: But aren't all those people covered by the term representative?

PN298

MS WALSH: It doesn't state that, or not to my knowledge, state that in the award.

PN299

VICE PRESIDENT HATCHER: I mean, just as a matter of normal English representative just means someone you select to represent you. That could be any of those people. It could be a fellow employee, it could be a union, it could be a parent, carer, guardian, nominee, anyone.

PN300

MS WALSH: Yes. The thing is though that with the representative what obligation does that actually place on the employer to ensure that someone who they assessed may not be capable of making serious decisions actually is I guess represented in the issues that we raise.

PN301

VICE PRESIDENT HATCHER: I understand that. But how does nominee change the situation?

PN302

MS WALSH: It doesn't I don't believe but it would fit in very comfortably with the existing Commonwealth schemes and systems. It is part of the NDIS. It's part of Centrelink. It's part of Medicare. It's part of any of the Commonwealth government I guess institutions, for want of a better word, that families have to deal with all the time.

PN303

VICE PRESIDENT HATCHER: Does it have a legislative meaning somewhere?

PN304

MS WALSH: No. It doesn't. It's just � and perhaps, you know, the Bench is probably more familiar with that than I. It's their choice of giving the vulnerable person the opportunity and also protects privacy so that people can't get information or purport to be representing them if in fact there is no stated, you know, representative or nominee. It was something that was thrashed out by our executive. I'm charged with the responsibility of putting it to the Bench, but it is a matter for the Bench and the applicant parties to determine.

PN305

VICE PRESIDENT HATCHER: Thank you.

PN306

MS WALSH: But the rights at work part was considered to be more critical and because we need to ensure there is adequate protection. We are, as we all know, in a time of industrial turmoil concerning this group of people and the model of services that are a life to them, not just a job. So we believe that they need more protection and we've called it rights at work, because that's what we saw it as, but it could well be that it is just something that's added to the award that somebody goes to as a � I have no idea, I have to be honest. It is we put it to the Bench for due consideration and that's all we can do at this stage. Thank you.

PN307

I would then refer following on from the points that Mr Christodoulou has raised we have provided to the Commission 55 statements and I'm not going to speak to all of those because I wouldn't do them justice. However, they speak for themselves and I would just draw your attention to � everyone has them, I understand � to submission number 3 and submission number 4. They go to the heart of what we, as an organisation, state we represent. We represent lifetime carers of very vulnerable people, and this is a husband and wife situation where they are married and live as a married couple, both attend an ADE, both been together for quite some time and they live in that arrangement because they have the support of family.

PN308

Moving on from that one we then move to I guess to support the comments made by Mr Christodoulou and the query that has - it's fazed a lot of us. We would all love to see our family members out in open employment being a totally inclusive group within society. There is not a parent that I know who wouldn't use that as a guide, however, the eventuality of it is that we also have family members who have tried open employment and for whom it has not worked for various reasons, and there are four submissions in these. I didn't even think to go down that path until it was raised. So if I could just put on the record for people to read at their leisure, it is submission number 20 and page 2 of 3; it is submission number 24, page 2 of 2; it is submission number 20, page 2 of 3, and it is submission number 43, page 2 of 3. Those submissions come from North Queensland, Victoria, and the other two I think are New South Wales from memory. I don't propose to say any more about the witness statements. They speak for themselves and I leave it to the board and all parties to read them at their leisure.

PN309

We are here today with no expert witnesses or legal counsel. We contend that there is no such thing as an expert parent, and in that situation we wouldn't put any of our families through the ordeal of what they would have to do to prove their case. Rather we speak for them. But before doing that we also will endorse the financial stats provided by Mr Christodoulou. We could have done all that as well but if we had have done them there are some things that I would've added into them that I haven't seen added in, and I guess that's just my accounting background, and that is that there is not a dollar value attributed in any of the calcs to deal with the rule of thumb benefits of government concessions, and if you were to compare, I guess, an abled bodied person who is on Newstart with the figures that were provided by Mr Christodoulou and you will see some of them also in the submissions provided by families.

PN310

Then the safety net, and I know this is not political correctness but the safety net for our family members is their pension. We would like to see moving forward better education of our families as to the benefits of I guess trialling some of the open employment experiences, but the hazard with that, and we lived it, we know it, the hazards with that are that the experience has shown open employment does not provide the regular hours of the supported employment, and there are many reasons for that, and often tied to � and these submissions to which I point you show why; that then they have issues that they have to deal with Centrelink on and sometimes those issues come back if they exceed the thresholds that create enormous problems for them. They can't deal with them, and then families have to deal with them and we ‑ ‑ ‑

PN311

VICE PRESIDENT HATCHER: So, Ms Walsh, I think I'll say again we're not charged with some policy choice between open employment and supported employment.

PN312

MS WALSH: I understand that.

PN313

VICE PRESIDENT HATCHER: We're proceeding on the basis that supported employment exists; there's an award which covers it ‑ ‑ ‑

PN314

MS WALSH: Yes.

PN315

VICE PRESIDENT HATCHER: ‑ ‑ ‑and we have to determine how wages are fixed for those persons, so obviously ‑ ‑ ‑

PN316

MS WALSH: Yes.

PN317

VICE PRESIDENT HATCHER: ‑ ‑ ‑if we went down some path it might have an economic impact upon supported employment, and you would be entitled to address those issues, but we're not making any policy decision about a preference between open employment and supported employment.

PN318

MS WALSH: Thank you. I guess what I wanted to get into the record is we support both.

PN319

VICE PRESIDENT HATCHER: All right.

PN320

MS WALSH: Open employment especially if it's attainable. So trying to stay within the relevant issues I will start our closing submission by stating that we wouldn't be here today if the Federal Government had not abrogated its responsibility in the social policy issues in this area. We wouldn't be here today if our family members could self-advocate, and those networks empowered by government to advocate on our behalf have chosen that I guess our support for supported employment because we see it as specialised services rather than segregated services doesn't sit comfortably with their ideological philosophies. I endorse and support their right to have their own view, but we probably shouldn't be here today based on those.

PN321

Our closing relies for its accuracy on evidence from these hearings, various documents which we have provided to all parties and the public records of the industrial Commission which have overseen the transition of awards and wage liberation from the previous ad hoc regime of the seventies to what we have here today. It remains an ongoing journey to improve but retain a business model created from need, nurtured by communities, valued by people with a disability, their families and carers. Our ADEs are not the standard commercial model and that aspect has been well-documented and thrashed out by all of the evidence over the past two weeks.

PN322

There are some givens in all this debate; points that are agreed by all parties. I will provide our interpretation of them: (1) the majority of workers in our ADEs have an intellectual disability. The ADE model has a duality of focus. It is the victim of both social and employment and economic policy. The move of Australia's public policy from the medical model of disability to the social model of disability provides great benefits but comes with risk and some of that risk continues when the Commonwealth actually chooses to abrogate their responsibility to handle the social part of the duality of focus, and the government funded advocacy organisations charged with I guess presenting our point of view dominate the future.

PN323

That as community focused businesses, ADE workers with higher levels of disability requiring significant levels of personal and workplace support will have lower levels of productivity compared with those who have disabilities that are less severe. Workers who do transition from our ADEs into the goal of open employment do so in small numbers. Many seek to return within 12 months for a multitude of reasons and we don't intend to go into that. But the modified supported wage system trial results were inclusive. That's the formal conclusion, so there can be no argument about that that our ADEs and the work they do is valued by the communities they serve; that the nature of the work is to provide job opportunities for people with a disability who would struggle to obtain let alone keep a job in the open employment sphere especially when Australia's unemployment and underemployment for able bodied persons continues to be such a national challenge.

PN324

The issue of deconstruct jobs, tasks, duties and where they fit within the award provisions has been well thrashed out and we don't intend to go there. That the lack of viability for our ADEs, which are a not for profit model, community model, has had a lack of viability as a problem for many years. This has been exacerbated and will continue to be exacerbated by the shrinking community dollar, shrinking volunteer base, and an aging workforce as life expectancy rates have increased.

PN325

So much for our points of agreement. Let's move on to why we are here. Based on the evidence provided confirmed by our supplementary documents the public AIRC, FWC records and our own witness statements from members, none of us are here by chance. None of us are here by choice. All of us are here by design. Sadly that design is because of a breakdown, or an abrogation by the Federal Government of their responsibility and the philosophical views of the advocacy network.

PN326

VICE PRESIDENT HATCHER: So to be clear what's the abrogation by the Federal Government that you're talking about?

PN327

MS WALSH: They've admitted over the years that the group of people whom we represent are voiceless. They are not people with a disability who can self-advocate. They have limited legal capacity, and despite that having been pointed out to them formally, publicly, I've got all the papers, all the primary source documents, the Federal Government have chosen not to provide that specific group of people with sufficient resources to liaise, collaborate and cooperate with the organisations they have funded, and it is very obvious within these hearings and you've only got to go back 10 years, this goes back to 2003, it is very obvious that the body empowered to represent us, who still claims to do so, actually where are they? They're not here.

PN328

VICE PRESIDENT HATCHER: Who are you talking about?

PN329

MS WALSH: That's the National Council on Intellectual Disability who have now become Inclusion Australia, and we have heard and we have witnessed that they're not a party. They have neither supported nor objected to these whole proceedings. Behind it all they have been involved in empowering its instigation, but you've heard from the advocacy bodies that how many of them have visited an ADE; how many of them are actually representative of the national picture. The answer for us is none.

PN330

The Federal Government knows that. We've made several applications for funding to provide the necessary resources. You know, we're just parents, and we are operating out of bedrooms. I have appeared here as you know. The resource I have is a phone. I'm in a motel room with no resources, nothing. I am not ‑ ‑ ‑

PN331

VICE PRESIDENT HATCHER: So is Inclusion Australia funded by the Federal Government?

PN332

MS WALSH: My understanding was that they always were as the National Council on Intellectual Disability but we heard from Mr Cain that his position is a paid position. I think there was an issue with funding and perhaps the advocacy network can answer that question better than I. My understanding is that they were defunded, however, I know from the latest round of funding that they received � I think they were given the lion's share of I think it was about 1.2 million under the NDIS for community involvement and that sort of thing. I can't answer that.

PN333

VICE PRESIDENT HATCHER: So in summary, the point is the Federal Government has not provided financial support to anybody that genuinely represents the interests of supported employees and their carers?

PN334

MS WALSH: Yes. They're totally voiceless.

PN335

VICE PRESIDENT HATCHER: Right.

PN336

MS WALSH: The Federal Government knows that.

PN337

VICE PRESIDENT HATCHER: Thank you.

PN338

MS WALSH: They've been made aware of it many times. So to understand the contention we have just put forward and which you have rightly queried it's necessary for us to go back to history, and I guess I have � the points that I am presenting on behalf of our members drill down on the information that Mr Christodoulou has provided you from the Ronalds and Dunoon reports we have provided, and to understand that, we need to understand the history, but particularly the part played by the AIRC and now the Fair Work Commission as far back as 2002. This is a relevant part of our submission because if we don't learn from the mistakes of the past and the history that records them, we are deemed to repeat the mistakes and we only need to look at the international issue put forward by Ms Powell to understand that.

PN339

VICE PRESIDENT HATCHER: So, Ms Walsh, obviously you'll need to go through this, but what's he outcome you're advocating for in terms of wage fixation just so I understand where this is all going? I mean, that could be retaining the status quo ‑ ‑ ‑

PN340

MS WALSH: No.

PN341

VICE PRESIDENT HATCHER: ‑ ‑ ‑going down the ABI path, adopting SWS or some unknown fourth option, so ‑ ‑ ‑

PN342

MS WALSH: We have been a participant in the journey of industrial reform for 15 years and the thing that I guess needs to be formulated is where do we go from here? We don't have the answer. We are the recipients of the decision which is made by the Bench. If it assists the Bench and the employers ‑ ‑ ‑

PN343

VICE PRESIDENT HATCHER: Ms Walsh, you're here to help us make the right decision.

PN344

MS WALSH: Right.

PN345

VICE PRESIDENT HATCHER: So I want to know what you want to see happen in the future.

PN346

MS WALSH: I want to see a variety of tools ‑ ‑ ‑

PN347

VICE PRESIDENT HATCHER: Yes.

PN348

MS WALSH: ‑ ‑ ‑retained in the award. I believe that if the current application is upheld and that's totally a matter for the Bench, that there would be considerable detrimental impact I guess on the whole sector.

PN349

How the Bench determines some of the inequalities and inequities that are apparent in all tools then that is a matter for people much better qualified than we. We support continued consultation and we would support whatever decision the Bench makes after due deliberation of all of the options. We have listened to some of them. We are comfortable with the wage value � and it's not a new tool. It's a classification model put forward. We considered that with our limited ability in those issues, and believe that the current system is not tight enough. It doesn't place enough clarity in the existing tools. Some of the tools are being used and that includes the SWS I guess on the discretion of employers and subjective analysis. So is that helpful, your Honour?

PN350

VICE PRESIDENT HATCHER: Yes. I just want to know what you want us to do, so ‑ ‑ ‑

PN351

MS WALSH: What I want you to do is I want to see this application rejected by the Bench, and I'd like to put forward the reasons that we believe that is necessary.

PN352

VICE PRESIDENT HATCHER: Go ahead.

PN353

MS WALSH: Thank you. So if we � we have provided an excerpt of our family carers' submission to the AIRC in 2003. We've provided an excerpt of the DEAC, NCID submission to the same review. For future reference, DEAC is now AED and the NCID, the National Council on Intellectual Disability is now Inclusion Australia. You must just find this whole sector initials so confusing. But the three players in this game why we're here today remain the same three people; that's Ms Wilson, Mr Cain and myself representing different areas but critical areas to the whole debate.

PN354

We've provided an analysis of the AED wage justice website which details the history of the advocacy movement. You may find that helpful, but you may find it more confusing over time. That website has already been referenced by other parties to these hearings, so we believe it to be relevant. The history references, the national caucus, and you will see some of our historical documents actually mentioned that. It was a group of eight consumer organisations, one of which was the National Council on Intellectual Disability. The caucus has been replaced by the Australian Federation of Disability Organisation, commonly known as AFDO, A-F-D-O. Aligned to that is DANA, D-A-N-A. That's the Disability Advocacy Network of Australia. Then there's PWDA, People with a Disability Australia who have provided their organisational submission supporting AED's application. Then finally there's Inclusion Australia, previously the National Council on Intellectual Disability, and other funded advocacy bodies are then attached to the Disability Advocacy Network.

PN355

VICE PRESIDENT HATCHER: So what's the nature of PWDA? What's the ‑ ‑ ‑

PN356

MS WALSH: PWDA it's an organisation, a national organisation, which is a resurrection of what used to be Disabled People International. The history of that is well explained in our analysis of the AED legal wage justice documentation. Disabled Persons International was, and was for many years, and it was aligned then to the international body that's why it had the Australia after it, and they again did have a very � I'm not criticising their policy, I'm saying their philosophies at the time were no different to what they are now.

PN357

VICE PRESIDENT HATCHER: Are they a membership organisation or an advocacy organisation?

PN358

MR WARD: They are an advocacy organisation. But they do do a lot of good work, and I'm not critical of the work they do. The issue is that we are directed by the Commonwealth, and this goes to the abrogation issue, we are directed by the Commonwealth to approach these organisations if we have an issue that requires, you know, input from our sector. So the problem for us is that the constitution of PWDA is for people with a disability only; that we as family carers can actually have input as associate members but we cannot have a vote on policy. There is very good history that we have questioned that PWDA adequately understands the issues of our family carers and why they need to have a voice within that area. The government knows they don't represent us. They know all of these organisations don't represent us for the reasons that are self-obvious. But they are a funded body. If you looked at their financial statements you would find they get a significant amount of money; that this enables participation in the UN convention and input into other areas of policy from which we are I guess not permitted.

PN359

Sitting over those advocacy organisations there's a National Disability Council which comprises the chairperson of four specific organisations, and they are advocacy organisations. Those four organisations are the National, Ethnic, Disability Alliance and they should be there, First Persons Disability Network and they should be there, Women with Disabilities Australia, certainly, People with Disability Australia, certainly, but because there is oversight needed this is all Federal tax payer funds. They have direct links to Federal Government on disability policy issues.

PN360

Sitting to the side there is a separate Carers and Disability Council. We have provided to you the issue of associating our family members with carers because Carers Australia has been wonderful to us, but they have provided funds outside their budget. They are a service provider. They are not an advocacy organisation. They couldn't sit by and see our families excluded from this whole three years of drama when two years ago we had to say, "Look, we can't afford to continue to do this at our own cost, but there is a need for a voice", so hopefully, your Honour, that answers your question.

PN361

VICE PRESIDENT HATCHER: Can we just pause there? Ms Walsh, we might adjourn for lunch now, and we'll resume at 2 pm.

PN362

MS WALSH: Thank you very much, your Honour.

LUNCHEON ADJOURNMENT�� [12.57 PM]

RESUMED�� [2.11 PM]

PN363

VICE PRESIDENT HATCHER: Yes, Ms Walsh?

PN364

MS WALSH: Thank you, your Honour, and thank you also for the time out. I think I might have needed it, probably a little bit more than you did.

PN365

VICE PRESIDENT HATCHER: All right.

PN366

MS WALSH: I realise that there is limited time here, so after consultations with my executive - the phone is very handy - I will bring the case a lot tighter with the following comments. On behalf of our members we support the classification structure put forward by ABL. The classification structure needs more work, but work also needs to be done on the existing tools to ensure clarification of language and methodologies. We support the modified SWS in the award. It is not suited for every ADE operation, but no one ADE in Australia is the same as the others. Some services currently use it and that should remain as an option for those, and any other future service that may find it useful to their application. There should not be one single tool, and I will go back to the record to substantiate our reason for that.

PN367

If I refer to PN para 180 to 187 of the AIRC case 2005/4617, which is from memory 27 June 2005, Mr Macken was the Commonwealth representative and the BSWAT was their tool. His comments were:

PN368

Subject to the requirement that the particular tool satisfies Standard 9, it has been the government's view for a long time that no one particular tool ought to be mandated, and that the quite extensive experience and expertise that's available in this sector in relation to wage assessments should not be swept aside by a single wage assessment process, that there ought to be capacity to use tools other than the BSWAT, other than the SWS, and other than any one single tool.

PN369

He then goes on to say at para 188:

PN370

The supported wage system was developed for application in open employment. It wasn't developed with any regard to the unique needs of business services and wasn't at any time intended to be applied generally to that sector.

PN371

And I think that ought to be, in his words, "fairly uncontroversial." Generally speaking, and it isn't true in every instance, but generally speaking the SWS isn't well‑suited to the needs of the sector, because it works in a one‑dimensional way. It assesses productivity only.

PN372

We ask the Bench to dismiss the AED application because they haven't provided sufficient evidence other than assumptions, assertions and witnesses who presented evidence which was either conflicted or narrow. We also firmly believe that, and in fact the evidence provided in these hearings substantiates that mandating the SWS as the only tool within the award would create significant commercial detrimental impact on our ADEs. The introduction of - and the figures vary - the record confirms 59 per cent from the Commonwealth, 29 per cent as used in the AAT case of 2016 0787, 29 per cent from the advocacy organisations themselves, and from the NDS sector it's, and the KPG - KMPG, whatever - reports around about anywhere from 30 to 50. So we believe that increased costs of that magnitude will impact on the ability and the income of income to our ADEs. That would lead to possible price rises for them to maintain their competition in a very, very tight market, and in the long term it would impact on the overall operations of the ADEs. We have been provided with evidence that currently ADEs are operating at a loss within some of the organisations and on consolidation they are able to carry that loss; however, a rise and increase in wages of that magnitude would increase costs, and rationalisation would lead to, necessarily, to closure of some services for them to be able to meet their obligations under the Corporations Law and the articles of association.

PN373

So we ask that the AED application be dismissed and that the Bench gives serious consideration to the matters which we support and which generally are supported by the sector. We think that we have adequately proven that the key stakeholders in this whole issue have not been included, have not been consulted, and that the whole case put forward by the applicants is neither credible nor representative. On behalf of our members, we ask that please give us a break, and that is directly addressed to the advocacy sector. Our families have had to deal with the BSWAT drama, and all at the one time - the roll out of the NDIS, the BSWAT payment system, and now three years of this. They need a break. The whole sector needs some security. It has to be impacting from a commercial perspective on their ability to sell their product. I know from my own professional experience it has impacted commercially on their ability to provide security to their existing customer base, but also the wider marketing community, and it also has restricted their capacity to recruit. Thank you very much. I hope that that has summed up in a much shorter way the issues which we bring to the Bench and we ask for you to consider them. Thank you.

PN374

VICE PRESIDENT HATCHER: Thank you. Mr Stroppiana?

PN375

MR STROPPIANA: Yes, your Honour.

PN376

VICE PRESIDENT HATCHER: Mr Stroppiana, if it's easier for you to stay seated, you can do so. It's up to you.

PN377

MR STROPPIANA: Thank you, your Honour.

PN378

VICE PRESIDENT HATCHER: As long as you stay close to the microphone.

PN379

MR STROPPIANA: I'll move the microphone. Thank you, your Honour. Your Honour, the Endeavour Foundation relies upon the material it has already filed in these proceedings, which includes an outline of submissions, a witness statement of Mr Andrew Donne, and a witness statement of Mr Scott Reed. Your Honour, one matter I need to deal with is the statement of Mr Scott Reed has not yet been tendered into evidence I understand. I'd seek to have that statement tendered. That's a statement filed on 14 November 2017, a statement of 28 paragraphs with two attachments.

PN380

VICE PRESIDENT HATCHER: Just hold on a second. The statement of Scott Reed, undated, will be marked exhibit 183.

EXHIBIT #183 WITNESS STATEMENT OF SCOTT REED

PN381

MR STROPPIANA: Thank you. Your Honour, the Endeavour Foundation is opposing the application of AED Legal seeking to amend clause 14.4 of the awards. Specifically we are seeking for the Greenacres tool to be retained as one of the tools contained in the list at 14.4 of the award. Your Honour, the relevant statutory provisions, as we would see them, are section 134 of the Act. Section 134 of the Act requires that:

PN382

The FWC must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions -

PN383

taking into account various matters. Your Honour, I'd like to address those two criteria, both fair and relevant. We say that "fair" for supported employees are working in the unique environment of ADEs; tools such as the Greenacres tool is a fair tool. ADEs are very unique enterprise and has already been mentioned. They have a duality of focus. It's both a focus on providing opportunities for employment for supported employees, whilst at the same time pursuing commercial interests. That duality of focus was referred to in the decision of Buchanan J in the Nojin case and he makes reference to a report prepared - I'll just turn to that, sorry, your Honour - he makes reference to a report of 2000, a report by KPMG Consulting, prepared by KPMG on behalf of the Department of Family and Community Services, and at paragraph 33 of his judgment there are some extracts from the report, and I draw this Full Bench's attention specifically to one of those paragraphs contained at paragraph 33 of his Honour's judgment, and this is an extract from the KPMG report:

PN384

Business Services must have at their core, a dual focus, the provision of supported employment and the operation of a commercially viable business. Their duality of focus demands that they balance two effectively competing requirements to achieve success.

PN385

The way those competing priorities manifest itself is the, on the one hand, the requirement and the desire of attempts by Business Services, by ADEs, to provide opportunities for employment for supported employees, and your Honours had the opportunity to visit our site at Mount Druitt, which predominantly undertakes packaging duties and there's over 200 supported employees who work at that site, and your Honour and Commissioner would have seen many employees doing tasks, many of those tasks of a manual, labour‑intensive nature, and that reflects perfectly this duality of focus, both the focus on the commercial reality of providing a service at an economical price to our customers whilst at the same time providing opportunities for employment for employees who would struggle to find employment upon the open market. I would venture to say that if your Honours and Commissioner visited a packaging plant operated by a commercial company that had its focus on maximising a shareholder's return you would find something completely different. You would find a highly‑automated plant, with very few employees, large equipment, highly‑automated, operating at a far more efficient rate than what you would have seen at our Mount Druitt plant. In that context, an employee with a disability who may obtain open employment at a, for example, a Visy packaging plant, that employee would be assessed under the SWS tool, as they should be, and if that employee can produce results and output at a 50 per cent benchmark of an able‑body employee, then of course it is absolutely appropriate that that employee be paid 50 per cent of the relevant award or industrial instrument rate.

PN386

But of course to compare a commercial operation with the way an ADE operates is a completely inappropriate exercise. It's not comparing apples with apples. They are completely different, and in this regard I think the witness statement that was tendered of Mr Scott Reed is very important. Mr Reed is the manager of our plant in Maryborough in regional Queensland. Its predominant activity is timber work. Maryborough is certainly a centre of lumber and timer work in Queensland. Mr Reed in his statement describes that there are 49 supported employees employed at our Maryborough plant. Three of those are assessed using the SWS tool; 46 are assessed using the Greenacres tool. In his statement at paragraph 27, he talks about what a comparable plant being operated solely by an enterprise that wasn't an ADE, so he's saying a comparable plant with non‑supported employees could be operated by eight to 10 employees at the most. Again, that's a very pointed illustration that is being made here, that Mr Reed as the plant manager with many years' experience in the industry is basically saying that if the plant was operating solely for a profit motive, if it automated and if it operated like a commercial business, it would potentially have eight to 10 employees compared to 49.

PN387

Your Honour, the point I'm making is that ADEs are very specific and unique to our organisations, that do have this duality of purpose, and because of that there are special considerations which are reflected in this award. The definition of supported employment itself I think is very useful in this regard. The definition is contained at 3.1 of the award and it refers to the definition contained at section 7 of the Disability Services Act. What section 7 provides is:

PN388

Supported employment services means services to support the paid employment of persons with disabilities, being persons:

PN389

(a) for whom competitive employment at or above the relevant award wage is unlikely; and

PN390

(b) who, because of their disabilities, need substantial ongoing support to obtain or retain paid employment.

PN391

So this award, the Supported Employment Services Award, is in many respects unlike any other award of this Commission. It is true that it does cover able‑body employees, but for the most part it covers employees who, picking up on the definition at section 7, employees for whom employment in the competitive open mark is unlikely. So it's a very unique award which covers a very specific band of employees who would otherwise find it very difficult to participate in paid employment, and this is also reflected in the workforce which Endeavour has, and the evidence of Mr Donne at paragraph 66 of his statement is that 85 per cent of Endeavour's supported employees - and we have over 2300 supported employees - 85 per cent of those employees are graded at level A and B pursuant to the Greenacres tool, which of course are the first two levels. There are five levels in the tool, with level E being the highest level. So what the assessment shows is we have a very large percentage of our workforce, 85 per cent, at those two lowest levels of the Greenacres tool, that I would submit that those employees would struggle to find employment and who would struggle to obtain employment on the open market.

PN392

So the first submission I would make is that the retention of the Greenacres tool within the award is absolutely consistent with the objectives of 134 of the Act. Of course, with particular reference to 134(1)(c), being the need to promote social inclusion through increased workforce participation.

PN393

VICE PRESIDENT HATCHER: Mr Stroppiana, is the position that you support the retention of the Greenacres tool as one of a number of other tools including SWS?

PN394

MR STROPPIANA: Your Honour, our position is that the modified SWS is part of the award and no one is suggesting that that should not be the case, and as I've already indicated, your Honour, we certainly have employees who are paid pursuant to the SWS. So yes, our position, your Honour, is that in addition to the modified SWS, the Greenacre tool should be retained as a tool listed at 14.4. I'm not submitting that every tool needs to be retained. I'm not submitting there should not be opportunity to rationalise the number of tools. But we are - - -

PN395

VICE PRESIDENT HATCHER: Mr Stroppiana, one of the points that has been clearly made by a number of parties is that applied to the same work and a person of the same level of capacity, the Greenacres tool and the SWS, even in its modified form, would lead to two quite different results in terms of pay outcome.

PN396

MR STROPPIANA: Yes, that's certainly possible, your Honour.

PN397

VICE PRESIDENT HATCHER: So how is it consistent with the modern award objective to have a fair and relevant safety net that you have an award prescription which allows an employee to choose different tools leading to different wage outcomes, for a person doing the same work with the same level of incapacity?

PN398

MR STROPPIANA: Your Honour, absolutely right, it is a lamentable but inevitable consequence of having multiple wage assessment tools contained in the award. That should not be interpreted as (indistinct) simply the retention of the supported wage system with no other tool. In terms of the specific inquiry, yes, there is that possibility, and the way that operates isn't perfect or desirable, but the test is that the award is fair and relevant, not that the award be perfect.

PN399

VICE PRESIDENT HATCHER: I struggle to understand how it could be said to be fair if at one enterprise a person doing a type of work with a certain level of incapacity is paid less than an equivalent person at a different enterprise, simply because of the tool that the employer chooses.

PN400

MR STROPPIANA: Your Honour, certainly, as I said, that is an unfortunate consequence of multiple tools, and you know, no one can suggest that that outcome would not occur. I would say it is fair on this basis, your Honour, and these comments obviously are specifically related to the Greenacres tool. We would say it's fair because the Greenacres tool itself has a mechanism for employees to move on to the SWS tool. I know that is not a full answer to your point, but it does have a mechanism where employees are subject to achieving - you know, that level E classification can migrate on to the SWS tool. I would also say it's fair in this respect, that as an employer in the industry, Endeavour doesn't have the ability to arbitrarily set wages. The rates of pay we pay to our employees are described in very great detail within the Greenacres tool. We are bound - and it's completely appropriate of course - we are bound to comply with those provisions of the Greenacres tool. So we would say in respect of our employees, it is a fair outcome, because the tool was applied consistently and we are complying with those guidelines which are contained in a tool which is approved within the award.

PN401

VICE PRESIDENT HATCHER: Thank you.

PN402

MR STROPPIANA: Your Honour, the other provisions I'd like you to just simply refer to, section 156 of the award, and the only submission that I'd seek to make in respect of that provision is that in terms of work value reasons, there is no or little evidence before this Commission which would justify a variation, as sought by AED Legal, to the award. There is insufficient material on which the Commission could act, or should act, based upon the material which is currently available. Similarly, your Honour, we would say that in terms of section 284 of the award, in terms of the minimum wage objectives - and I know this topic was discussed at length yesterday - we would say the award, and certainly our submission is the award as it currently stands does comply and does satisfy the minimum wage objectives contained at section 284 of the award, and your Honour, I'm happy to work through an example of why we believe that's the case.

PN403

VICE PRESIDENT HATCHER: If you wish.

PN404

MR STROPPIANA: Sure. Your Honour, the Supported Employment Services Award, like all other awards, meets these objectives. There's obviously one additional component of the Supported Employment Services Award. Like every other award approved by this Commission, the Supported Employment Services Award has a classification list. That classification list contains seven classifications and the minimum wages contained, and that's at clause 14.2 of the award. In respect of employees with a disability, every award of this Commission, with the exception of the Supported Employment Services Award, contains the standard supported work system clause, and wage rates for people with a disability are determined pursuant to the SWS system. It's no different with this award, with the exception that in addition to the SWS system there are multiple other tools. However, the minimum wage objectives are met, because supported employees and employees pursuant to this award have their wages determined either by the SWS or another approved tool as listed in the award. Each of those tools contains - and I'll take you specifically to the Greenacres tool - but each of those tools contain a list of wage rates for ordinary employees, which are determined by an assessment, and so a minimum rates for supported employees are certainly contained within those awards.

PN405

In respect of the Greenacres tool, and I'm specifically referring to the analysis of wage assessment tools used by Business Services - this is the report which is Annexure 2 to the statement of Mr Donne, which is an attachment to a number of statements. This is the report which is referred to in the award at section 14.4(d). So when you go to that report, and I'll specifically refer you - sorry, your Honour, at page 43 of that report and it's headed up, "G Pearson and Associates" - so page 43 of that report contains wage level and increments to be applied with the Greenacres tool. So if I am a supported employee and I've been assessed using the tool as a level B employee and competent, I know by reference to this tool that my wage rate should be 22.5 per cent of the applicable classification I'm employed under. Your Honour, on that basis I would submit that the award as it currently sits, by reference to the various tools listed in this report and the additional report contained at subparagraph (e) of clause 14.4, satisfy the minimum wage objectives.

PN406

Your Honour, there's basically, if I can summarise it, there's two lines of argument which have been put to this Commission as to why clause 14.4 should be amended to remove the list of tools with the exclusion of the supported wage system tool. The first line of argument is on the basis of clause 153 of the Act. Given that that section of the Act has already been covered in detail by other applicants I don't propose to take you to it, other than to say that that section does provide for the provision of wage rates for people with a disability and that there is no breach, on the face of it, of section 153 of the Act, simply because this award contains tools which set wage rates for employees with a disability.

PN407

There's been again much discussion about the Nojin decision and whether the existing tools suffer from the same defects which were identified in the decision of the Full Federal Court in the Nojin case, and again, I don't propose to go through it in great detail, other than to say that the BSWAT tool was held that there was indirect discrimination between employees with an intellectual disability compared to the way you've treated employees with a physical disability. The BSWAT tool paid employees at the grade 1 rate, which was the rate applicable for basic, routine duties, essentially of a manual nature. Notwithstanding this, the BSWAT tool utilised criteria which was assessing them for matters which fell outside of and beyond the level 1 grading. The tool itself relied upon an interview process, which resulted in a natural disadvantage for people with an intellectual disability compared to those with a physical disability, and it was evidence of employees being assessed at scores of zero when they actually were competent, and one example that comes to mind was in relation to attending and being aware of meetings and interviews, and the evidence was that Mr Nojin was attending meetings but he scored zero during the interview because he failed to mention it, and the tool of course took an all or nothing approach. So we would simply submit, your Honour, that those sort of features which resulted in the BSWAT tool being found to be discriminatory under section 6 of the Disability Discrimination Act just simply aren't available, and there's no evidence on which this Commission could make a finding which would in any way support the view that the Greenacres tool is discriminatory. The Greenacres tool and the evidence before the Commission is that the Greenacres tool utilises the level 2 and above wage rates; there's no interview assessment; assessments are done by means of observation rather than interviews; it doesn't adopt an all or nothing approach; there's a pathway to the supported wage system. So there's no evidence which this Commission could form a view that the Greenacres tool is discriminatory or it should be removed from the award on the basis of section 153.

PN408

The second line of argument, your Honour, which has been put to this Commission is that the tools in 14.4 should be removed and with simply the modified SWS system being the only tool, on the basis that the clause as it currently stands renders the award safety net for employees with a disability liable to instability are fairness and undue complexity.

PN409

There are a couple of things we'd like to say in respect of that, your Honour. We would say that the SWS tool itself is not a simple tool. It is a complex tool. It is subject to, you know, individual assessment. So simply moving to the SWS tool does not guarantee a consistency of approach. The evidence that was relied upon by the applicants in respect of this claim related to the evidence firstly of Mr Rob MacFarlane. In respect of his evidence we would repeat the submissions which have already been made that large sections of his evidence related to the application of the tool in open employment settings rather than in settings within ADE's. Certainly there was some evidence of that but large sections of his witness statement related to open employment. Mr MacFarlane is an advocate for the SWS tool and during cross-examination he confirmed his view that competence and testing in his view is not appropriate. His view of the way the tool works related to a process of negotiation which of itself naturally leads to conclusions about how this tool can be applied consistently. So we would say that in terms of the consistency the applicants haven't made out the argument that the current award is unduly complex.

PN410

Evidence was also provided by Mr Cain. Mr Cain confirmed that he doesn't have experience within the supported employee services industry. His experience is as, and you know, he described himself as a disability policy advocate, you know, he's not trained in the SWS tool, he's not trained in any of the tools. He has never witnessed an assessment using the Greenacre tool or any of the other tools with the exception of the SWS tool. So again his involvement in the industry is very limited. I put to him the last time he visited an ADE outside of the demonstration trials which are referred to in his third statement of 14 December, and from my recollection that conversation was that he visited a site in 2011. So his industry experienced is limited and his evidence should be treated with caution. He's not someone from the industry who has extensive industry experience. In his statement he makes findings about the tools in 14.4. He makes the finding at paragraph 85 of his statement that says many of the tools contain no direct relevance to work, value of work, and measure matters � you know, irrelevant to the work (indistinct). But there is no analysis of every tool. There's no material upon which this Commission could be satisfied that that view has been substantiated. So we would say that great caution should be exercised when considering the evidence of both Mr Cain and Mr MacFarlane.

PN411

What we would say is that the application and the suitability with the modified SWS tool is unresolved and the evaluation of the trial (indistinct) answer, and that's exhibit 3 in these proceedings. And I won't take you to those conclusions. I know they've been referred to during the evidence but � and Mr Cain himself confirmed the trial wasn't conclusive, as he did confirm during cross-examination that the application of the SWS tool in an ADE context does require � there are additional challenges when work is being done within a group. There are additional challenges when trying to assess a role which may not have (indistinct) outside open employment.

PN412

So, your Honour, there's also been a lot of talk about costings and the fact that there is no concrete material before this Commission that we could be satisfied with costings. I would like to highlight for the Commission's attention the costings section of the evaluation report which is exhibit 3, specifically page 42 of that report under the heading, "Wage outcomes." And I acknowledge that the authors of this report themselves do put in a caution that the data does not provide a reliable indication of wage outcomes. But it is the best that we have given that the trial involved 28 years and 191 supported employees.

PN413

So what the results of the trial were is that across the sample the average outcome in terms of productivity and therefore percentage of the wage rate was 48.9 per cent. So what that means is that across 195 supported employees who participated in the trial, the average wage outcome would be a wage rate of 48.9 per cent of the full award rate. That is, to be frank, remarkably similar to the results that we experienced during the trial at our Wacol plant and the evidence of Mr Donne in the trial referred to � so the evidence of Mr Donne, or the ten employees of Endeavour, and I'm referring to paragraph 79 of Mr Donne's statement, was that the average wage outcome increased from 24.1 per cent to 47.6 per cent, so very similar. The wage average wage outcome from the trial, from the 191 employees who participated in the trial of 48.9 per cent would for our Wacol plant, represent a doubling of wage rates. Current average wage rates for Wacol is 24.1 per cent. The average in the trial was 48.9 per cent. Similarly, Mr Donne has provided evidence in his statement of the potential costs of having to move exclusively to the modified SWS and utilising the methodology Mr Donne has used. He calculated a figure in excess of 18 million dollars. So, your Honour, we would say that the cost ramifications are real, that whilst there may be riders and uncertainty of the results of the trial they are the best we've got, and certainly the evidence of Mr Donne is that wage increases of that magnitude simply could not be absorbed and that there would have to be either closures or significant restructures in our operations.

PN414

Similar evidence, your Honour, is found in the statement of Mr Reed. As I have already referred to, Mr Reed makes the point in his statement that the timber plant at Maryborough in its current form employs 49 employees. Mr Reed also makes the statement that in the event we were required to move to the modified SWS tool he would not be able to pass on those additional costs to our customers because we compete against commercial operators. So we don't have the ability to pass on those costs to our customers. And Mr Reed makes the point that in the event we move to the SWS exclusively we would need to either invest heavily in capital and reduce our number of employees, otherwise it would unlikely the site would remain open. So this is the very real consequence of adopting and moving to the modified SWS tool, and why we would urge the Commission to exercise great caution in respect of the application before it, in respect of clause 14.4.

PN415

Your Honour, there are a couple of things I just wanted to respond to quickly which were referred to in submissions today. The first thing was the suggestion by United Voice that the Nojin decision is authority for the suggestion that competency testing that the inclusion of competency testing when assessing a supported employee is discriminatory. Her Honour Justice Katzmann in her judgment, and I know this paragraph has already been referred to but in her judgment at paragraph 268 of the judgment makes the point, and I'll read the sentence and it's the second sentence in the paragraph:

PN416

If competencies must be measured independently of productivity consistently with the objectives of the Act that should be done in such a way as to eliminate as far as possible its inequitable aspects.

PN417

So on my submission what her Honour is saying is that if competencies are to be measured, used in a way to assess the tool for supported employees they cannot have the type of inequitable aspects which were evident with this one. So certainly on my submission the judgment doesn't support the submission that was made that the simple inclusion of competencies is of itself discriminatory. Similarly there was reference to the evidence of Mr Donne and his response to an answer under cross-examination about pay rates to a forklift driver and whether someone who was operating a forklift would be paid at the level E rate. Now the response of Mr Donne was that that may not be the case if the employee did not obtain at least 80 per cent achievement of the underpinning work skills. What Mr Donne is simply reflecting is the way the Greenacres tool operates. As I said earlier in my submissions, your Honour, Endeavour or any employee in this industry cannot arbitrarily set wage rates. Wage rates are determined by the award the tools referred to therein. We've adopted the Greenacres tool and we've honour bound and required to ensure as far as possible and to the best of our ability, we apply that Greenacres tool. So there's nothing remarkable about the evidence of Mr Donne that we'd seek to utilise in applying the Greenacre tool as it appears in what's referred to as the Pearson report, which is referred to in the award, which is the document which we say governs the way we need to pay our employees if we use that tool.

PN418

Additionally, your Honour, there was the submission of the HSU regarding supported employee (indistinct). Your Honour, the only point I would make about that is that we'd argue that Mr Donne was not cross-examined whatsoever in relation to this matter. These matters are covered in detail in his witness statement at paragraphs 112 through to 115. Those paragraphs are self-evident that Endeavour took over Scope ADE's in May 2015 and at that stage the employee came last at being assessed by the � utilising the SkillsMaster tool and that its wage rates had been maintained. So again we would say that there is no basis for the making of that submission. Nothing turns upon it, we would say. But we just wanted to ensure we corrected the record there.

PN419

Your Honour, there has also been discussion around the suitability of otherwise of an award making reference to external material and I know an authority has been referred to you. There's two points I would like to make about that. Firstly, every award of this Commission including this award and every other award incorporates the standard SWS clause, the model clause. And the model clause in every award makes reference to the supported wage system without providing a detailed explanation, and that detailed explanation is contained external to the award in a separate document. And obviously that's the supported wage system handbook, July 2017 which is exhibit 10 in these proceedings. So every award in this Commission incorporates or makes reference to, or relies upon the use of external material. So we would say there's nothing remarkable or industrially concerning about the fact that the award currently refers to a report which is external to the award. Similarly, in the same vein the Meat Industry Award, your Honour, of this Commission at clause 24 contains a payment by results clause. And what this clause reflects is the tradition in the meat industry to pay piece work or for work undertaken by employees. And clause 24 of the Meat Industry Award provides an entire framework whereby an employer can provide a payment by results system at an abattoir which subject to qualifications contained in clause 24 provide the basis of payment for employees. That basis of payment is normally based on productivity, whether that be beast process per shift, and it is completely outside of the award. There's the normal safeguards around ensuring that that's available to employees and any changed agreement is agreement (indistinct) employees. So it's completely outside of the Meat Industry Award. So again we would say there is nothing remarkable or concerning about material sitting outside of an award.

PN420

Similarly, your Honour, there has been comments made about the desirability or otherwise of wage assessments being done by employers. And to reiterate what was said yesterday by Mr Harley, it is the case that there's no evidence whatsoever before this Commission that assessments done by employees within the industry are done other than in a professional, competent and objective manner, no evidence whatsoever, as is there is no evidence that assessments done by independent SWS assessors are done otherwise then in an objective, competent, professional manner. So again I just simply make the point that there is no evidence currently before the Commission which would cast doubt on the objectivity or professionalism of such assessments.

PN421

Finally, your Honour, just in respect of the issue around the letter from the Department which has been discussed and the suggestion that that provides two operators like Endeavour and other ADE's a safety net and that we shouldn't be alarmed if the modified SWS was the only tool. I would simply like to reiterate the comments that have already been made that the letter doesn't provide any guarantees, any increase in funding and on Mr Cain's own evidence, his estimate, I think, was 77 or 78 million dollars. Now that's a very large amount of money if the industry moved to the modified SWS. Such an allocation of money would be subject to the usual ebbs and flows of budgetary cycles and budgetary processes, as well as any change in government. So we would say that there is no guaranteed safety net.

PN422

Your Honour, unless there's any other issues they are my submissions.

PN423

VICE PRESIDENT HATCHER: All right, thank you, Mr Stroppiana. Mr Thompson?

PN424

MR THOMPSON: Thank you, your Honour. My instructions are - - -

PN425

VICE PRESIDENT HATCHER: Again, Mr Thompson, f it's easier to stay seated you may do so.

PN426

MR THOMPSON: All right. My instructions are that the Commonwealth will not be making any submission today. However I have also been instructed that if the Commission has any specific questions that it would like to put to the Department we would be happy to take those on notice and come back to the Commission with a written response.

PN427

VICE PRESIDENT HATCHER: All right, there's a few matters. Firstly, I think all the members of the Bench might have some questions, but I have three primary questions. The first is regarding the letter which was addressed to me dated 8 November 2017 from the secretary from the Department, and particularly what the government means in the last paragraph of that letter � this is exhibit 8, when it says that if - - -

PN428

MR THOMPSON: Your Honour, perhaps if I can interrupt.

PN429

VICE PRESIDENT HATCHER: Yes.

PN430

MR THOMPSON: The instructions on that particular matter, the Department has no further information to provide.

PN431

VICE PRESIDENT HATCHER: Let me ask the question first and then you can tell me that. I mean, this letter has been sent for some purpose and I want to understand what the purpose is. So you've said that "the government will ensure future policy settings, allow for the ongoing viability of ADE's for employees, their family and carers and the businesses while also meeting the Australia's obligations under international law." So that proposition has been volunteered to the Commission and we need to know what it means. For example, there's been an estimate that if the Commission made the decision to mandate the SWS as the sole wage assessment tool for the ADE sector it would have a sectoral cost if 78 million dollars per year. Does the letter mean that the government would partly or wholly contribute funding to make up for that cost?

PN432

MR THOMPSON: Thank you for the question, your Honour. As mentioned, my instructions on that particular point are that at this point in time the Department has no further information to provide but I will relay those comments.

PN433

VICE PRESIDENT HATCHER: The proposition is said to be the government's proposition so presumably some instruction might need to be taken from the relevant minister.

PN434

MR THOMPSON: Yes. We will seek instructions on that.

PN435

VICE PRESIDENT HATCHER: All right. The second thing is, from my part, and Mr Thompson, do you have access to the exhibits?

PN436

MR STROPPIANA: I don't, your Honour.

PN437

VICE PRESIDENT HATCHER: I will give you the reference and if it's necessary we can provide you with the document but reference was made in the submissions earlier today to the further statement of Hugh Kenneth Packard. Mr Christodoulou, can you remind me of the exhibit number?

PN438

MR CHRISTODOULOU: Yes, 33, your Honour.

PN439

VICE PRESIDENT HATCHER: Thirty-three. No, it's not 33.

PN440

MR HARDING: It's exhibit 64, your Honour.

PN441

VICE PRESIDENT HATCHER: Sixty-four, yes. Exhibit 64, and that had attached to it an extract from a submission which this Australian government made in 2006 to the Australia Fair Pay Commission under the Workplace Relations Act concerning minimum wages for the disabled sector, and specifically paragraphs 11.95 through to 11.98 of that submission on pages 366 through to 367, expressed the view that SWS was not an appropriate wage assessment tool for the supported employment sector. So the question is whether that remains the position of the Australian government or whether it now has some different position which it wishes to articulate. And the third question is whether it is accepted given that the SWS is a tool developed by the Department, whether it is accepted that the Commission has the power to by award, determine any further modifications to the SWS wage assessment tool which is would consider appropriate. All right, so they're my questions.

PN442

MR THOMPSON: Thank you, your Honour. We'll take that - - -

PN443

VICE PRESIDENT HATCHER: And I think the other members of the Bench might have a few additional questions.

PN444

DEPUTY PRESIDENT BOOTH: Thank you, I just have a couple. Mine also derives from the letter from Ms Campbell of 8 November of 2017, Mr Thompson, and it relates to the government's view that other tools in the SES Award are a matter for the award parties and the Fair Work Commission. I'd like to know whether the Commonwealth would continue to support whatever wage assessment matters are determined by the Commission through the financial support to independent assessors to work in the ADE sector to implement such a tool, and particularly whether or not the Commonwealth would be in a position or interested in doing that if the tool incorporated features other than productivity. And then the other goes to a different point and it's a question about the continuation of what is loosely known or colloquially known or known in acronym, or even initialism, and that's the DMI funding, and that is whether or not it's intended for the future to continue the transfer of the equivalent quantum of DMI funding into an individual's NDIS plan and have that available ongoingly to ADEs, or whether that is a transitional arrangement.

PN445

VICE PRESIDENT HATCHER: All right, so I think they're all the questions. How long might you need to supply an answer to the Commission to those questions?

PN446

MR THOMPSON: We will be guided by the Commission and we'll certainly make our best efforts to get those responses as soon as possible, perhaps in the next week or two if that was suitable.

PN447

VICE PRESIDENT HATCHER: Right, so we'll give you 14 days. All right.

PN448

MR THOMPSON: Perhaps if we can seek instructions on that one and we'll certainly make our best efforts to get responses as soon as possible.

PN449

VICE PRESIDENT HATCHER: I again emphasise, the Department having sent the letter which is exhibit 8, how significantly we regard it as being given a proper explanation about its contents.

PN450

MR THOMPSON: Thank you, sir.

PN451

VICE PRESIDENT HATCHER: All right, Mr Ward, do you want to deal with your matters now?

PN452

MR WARD: Yes, I can, your Honour, and I'll try and do them very, very quickly, if I can. We took five matters on notice and I'll just deal with them one by one. The first question we took on notice was about the providence of the current classification structure in the SESA Award. We have prepared a folder in relation to that if I could hand it up. That folder contains the original award modernisation statement related to the supported employment services area. The Liquor, Hospitality and Miscellaneous Union Supported Employment Services Award 2005, the exposure draft in award modernisation for the Supported Employment Services Award and the ultimate decision. The first statement is useful because it explains which NAPSAs and awards the Commission looked at. Can I just simply say this, and you have to do this by way of extrapolation. If one looks at the LHMU classification structure one looks at what was in the exposure draft and then one looks at what is in the final award it appears to us that the providence of the current structure is predominantly the LHMU 2005 Award. There's a variety of specific changes to it but it kind of looks like it so if that assists the Bench we provide that information to the Bench.

PN453

VICE PRESIDENT HATCHER: And do we know where that 2005 Award structure came from?

PN454

MR WARD: I could look, your Honour. It's not a mystery, I just don't have that material available at this time. If that would help I'll take that on notice and we'll get that back to you next week if we can.

PN455

VICE PRESIDENT HATCHER: Yes. All right.

PN456

MR WARD: Does your Honour wish to mark that folder?

PN457

VICE PRESIDENT HATCHER: No.

PN458

MR WARD: No. That's fine. Two very short matters then, a couple of decisions. I failed to provide a page to one of our authorities yesterday but rather than provide the page now I'll simply give the reference. It was the National Wage Case August 1998 at 25IR at 170, and the page I took the Commission to which I didn't have is page 179. I was asked the question which I think might have been answered this morning about the number of persons of an intellectual disability working in open employment. I think that was discussed with Mr Christodoulou. I think he would have taken you this morning, as far as I can recall, to exhibit 33, Annexure A, page 10. That document is the Department of Social Services discussion paper, "Ensuring a strong future for supportive employment." That is the most recent set of statistics around that issue and I direct the Bench to that if they want to answer that question.

PN459

Lastly, I make some submissions that the equal remuneration decision of 2015 made some comments about work value. It does. I've got copies for the Bench if that assists. One might debate whether or not this is (indistinct) ratio but I'm referring � I've handed up the Equal Remuneration Decision 2015, [2015] FWCFB 2800, and I simply direct the Bench to two parts. I won't take you to it. Paragraph 272 to 274 discusses section 156. The more important paragraph is 292 and if the Bench just briefly go to that, this again is a discussion of how 156, and in particular 156.3 work and literally in the middle of that paragraph the Bench say this. "There is no datum point requirement in that definition", that being the definition of work value reasons. And then they've gone on to explain the relevance of that to the case. So that is at least a positive observation that concerns the discussion I had with her Honour Deputy President yesterday that 156.3 doesn't require a datum point such as the old approach.

PN460

Can I also say that in our researches overnight there has been one work value case in the four yearly review, and I apologise for not bringing it to the Commission's attention earlier given that we appeared in it. If we could hand up copies of that. That is the Four Yearly Review of Modern Awards Pastoral Award 2010, the Full Bench decision presided over by the President, [2015] FWCFB 8810. I won't take you to it but the relevant paragraphs are paragraph 40 through to 49 and the Bench there traverse in large measure the discussions I was having with the presiding member yesterday, taking the Bench through 156, 284, and it's very much on a par with the discussions we had yesterday about difference between (indistinct) and varying. In that case there was an application � I should be careful how I say this, I'm not very good in rural so it's "crutching rams", more money for crutching rams, by the - - -

PN461

DEPUTY PRESIDENT BOOTH: It would have been an interesting inspection.

PN462

MR WARD: I didn't do it but one of our people said that that is the case. There was an attempt to get an increase in the rates of pay for crutching rams and there was the debate about whether or not that required worked value. The Australian Workers Union said it's not about not worked value because we're � I think they said we're setting something new, or whatever. Ultimately the Bench made a conclusion that there was a minimum rate in the award that would apply to the work and that what they were actually seeking to do was to increase the remuneration to the person receiving that minimum rate, and therefore it had to be work value and 1563 applied. But along that journey there is a conversation arising around 156 and 284 which the Bench - I take you to.

PN463

There was one more matter that was put to us yesterday which was questioned, and that is whether or not in some new formulation we would be comfortable with external assessors. I apologise to the Bench. We have referred that matter back to our client's working group. I will have to give that answer next week in writing. It will be next week. But if I can have leave to provide that answer in writing next week.

PN464

VICE PRESIDENT HATCHER: All right, yes.

PN465

MR WARD: If the Commission pleases.

PN466

VICE PRESIDENT HATCHER: All right. Nobody else? Mr Harding, in reply?

PN467

MR MUSSO: Yes, your - - -

PN468

VICE PRESIDENT HATCHER: Sorry, Mr Musso?

PN469

MR MUSSO: I would like to make a closing statement, if I may.

PN470

VICE PRESIDENT HATCHER: All right. Sorry.

PN471

MR MUSSO: Your Honour, I make this statement on behalf of NDS who I appear for who have been involved in these proceedings on behalf of our membership, which includes 143 not for profit organisations that provide supported employment services. That's 81 per cent of organisations nationally that offer those services. Now as you would be aware, NDS remains strongly opposed to the AED legal variation determination seeking to remove all the tools in the award bar the SWS. And I'd like to clarify something, as well, if I may, that's been raised during the course of the hearings. Despite assertions that have been made NDS is not opposed to the SWS being used by disability enterprises to determine the wages of their supported employees. We are simply opposed to the use of the SWS being mandatory for disability enterprises. This position has been clearly stated in numerous submissions that we provided to the Commission in the course of this matter. In addition NDS has supported the inclusion in the award of the modifications to the SWS following our participation in the 2016 trial of those modifications, and I can refer you specifically to the submission dated 21 August 2017.

PN472

NDS remains concerned about the application of the SWS in supported employment settings, hence our opposition to it being mandated as the sole wage assessment mechanism. Again I was going to refer to the witness statement provided by Hugh Packard, exhibit 64, citing the 2006 Commonwealth government submission to the AFPC, which you briefly mentioned to the representative of the Commonwealth. I wanted to add some historical context about what I perceive was in that submission and what I feel it clearly stated, and it clearly stated that at the time the SWS was developed for the sole use in open employment settings. That is, it was specifically designed not to be applied in supported employment settings. In addition that submission went on to state in very great detail why it's considered that the SWS was not suitable to be applied in supported employment settings. Now I won't read those extracts. They are obviously in the government's submissions which is an annexure to Mr Packard's statement. But I think the language in there is very clear and I would be very disappointed if the Commonwealth was to come back and say that their position on this matter had somehow changed in the course of time, even with the adoption of the modifications which I'll make a few remarks about, as well.

PN473

NDS's view continues to be that wage assessment tools that only measure an employee with disabilities' relative production output do not take into account the complexities of supported employment settings. Nor do they take into account the commercial and economic considerations associated with running a disability enterprise. We are not of the opinion that the SWS modifications have adequately addressed those concerns. Consequently we are of the view that the SWS has not been successfully demonstrated in disability enterprises as was stated in the valuation report of the modified SWS trial.

PN474

I would also like to return to the concept of productivity as it is used in relation to supported wage system assessments and the concept of the rate of relative production output as raised by Mr Smith in his submission, which is exhibit 39. The SWS when assessing productivity is really assessing � well, that's "productivity", in inverted commas � it is really assessing the employees' rate of productive output of a good or service compared to a benchmark. In supported employment, because of the nature of an employee's disability they may not be able to produce goods or services that result in revenue from the sales of those goods or service that covers their wage, covers their wage on costs, covers the costs of the inputs used, or covers the other costs that are incurred when employing a workforce to run a business. No business can remain viable if they are operating under those constraints, especially one that has a workforce largely composed of people with disability.

PN475

NDS, as I mentioned before, has cited the observations of ARTD Consultants who were engaged by DSS to conduct an evaluation of the trial of the modifications to the SWS. Exhibit 3, the evaluation reports executive summary identified some key issues relation to the modifications, that raised doubts about the applicability of the SWS in several types of supported employment settings. These specifically included group work settings and production lines which are work settings where an individual employee's rate of productive output cannot be isolated and then accurately assessed, unless what I consider to be illegitimate considerations are taken into account when doing that. But they have been covered in detail during the course of this hearing.

PN476

The report's executive summary also states in the conclusion, "The trial has not provided a clear case that the modified SWS can be consistently applied by ADE's and assessors to provide an accurate assessment of supported employee productivity across the range of ADE operating context." Just further to that, in addition to our concerns about the mandating of the SWS as supported employment providers we have also tendered as evidence, attachment to exhibit 53, the KPMG report assessing the impact of increasing wage costs on disability enterprises. Again we have highlighted the headline figures from that report before. I will just briefly mention them now. The key findings were that a 40 per cent increase in the wages of supported employees would see 85 per cent of disability enterprises in deficit with four in ten making losses of above 250,000. And the report effectively confirmed that disability enterprises could not absorb higher wage costs without the loss of a large number of jobs. And that would affect the jobs of almost 11,000 supported employees across the sector.

PN477

There were several NDS members who provided evidence during the course of this matter identified in the impact of wage increases, following their organisation's adoption of the SWS. The increases were significant and had resulted in financial viability concerns for those organisations. Even with the inclusion of the modifications to the SWS and the award NDS remains unconvinced that the resulting wage increases could be easily absorbed by disability enterprises. We also note that there has been no formal study of the impact of wage rises that would result from the adoption of the SWS including the modifications, hence our concern about disability enterprises having no choice other than to use it.

PN478

At this point I would also like to raise, or seek some clarification from the Commission about the use of those modifications and I feel that this relates directly to the purpose of the review of the award, and that is that when the modifications are officially adopted as of 1 July 2018, what is the status of the use of the modifications for those organisations that currently use the SWS in its existing incarnation? This is very important because our members have strongly indicated that they would seek to use all of the modifications when determining wages for their supported employees. We appreciate this raises concerns about the interpretation of clause 16.6 in the award exposure draft, which is the no decrease in wages clause except in the instance of the regression of an employee's disability, and I am raising this purely from the perspective of our members using the SWS who have cited financial viability concerns due to their adopting the SWS in its current format.

PN479

Finally I would like to clarify some statements that were made earlier, or clarify the rules and regulations as they apply to the assessment of people with disability by the Commonwealth, especially in relation to the determination of work capacity. It is an extremely important issue, it relates directly to how people are streamed into different Commonwealth disability employment support services and how that determines their eligibility to receive support, in particular from a Disability Employment Service.

PN480

Now, the current supported employment demographic would include people who have received an employment services assessment which has determined that they have a work capacity of less than eight hours a week. As a result of that assessment result they are consequently ineligible for the DES program. So we believe that it is incorrect to state that supported employees by and large, and that is the existing supported employment cohort of around 20,000-odd people nationally. It is incorrect that they could cease their jobs in supported employment and go and find jobs in mainstream settings, with or without the assistance of a DES. In fact I take that back, they would not be able to access a DES because they would not be eligible to having not met the criterion for work capacity in the ESAT, the employment services assessment.

PN481

Now, as a result if they were eligible for the NDIS they would be offered non-vocational based supports instead and would not be offered funded supports to provide employment through the NDIS. That is all I have to say at this point.

PN482

VICE PRESIDENT HATCHER: Thank you.

PN483

MR MUSSO: Thank you, your Honours and Commissioner.

PN484

VICE PRESIDENT HATCHER: Mr Harding in reply.

PN485

MR HARDING: Your Honours and Commissioner there are a number of things that I need to say in reply but I will do my best to keep it short and sweet in light of the time. In some respects I feel as if the train is just about ready to leave the station in terms of whether we ought to have some classification system in the award in light of the discussion that has occurred and so what I am about to say at least to some extent tries to correct some of the problems that we say our opponents have stated in relation to the criticisms of our case.

PN486

But also to say in the event the Full Bench was minded to adopt a classification system that was different to the one proposed by ABI, and I'll say a bit more about that in a moment, there is in our submission an importance in having a singular system that particularly regulates the work that will be performed by the employees in a way that is simple and easy to understand. We say the SWS can achieve that role but if we are wrong about that and the Full Bench takes a different view then we think that the Full Bench would really have to start from scratch in terms of identifying a classification system that would work.

PN487

It is of some significance in that respect that the ABI proposal was put on the basis that this was a work value assessment. Then there was the concession that, no, it's an individual assessment, not a work value assessment. Mr Ward got up and said, no, that's not our intention and the words must have gone wrong, must have been a drafting error. Then he has conceded there is no evidence of their proposal actually operating in practice or of being tested. So what we are met with is no more than an intention, we don't have a proposal, we have an intention. If that intention is there ought to be some system of classification in the award pertaining to this category of worker then, as I said, I think it will have to be a classification system that starts from scratch because I think the ABI proposal has fallen over at the first hurdle and has been exposed for what is is, which is a system of individual assessment based on the characteristics of an individual employee rather than a classification of work.

PN488

VICE PRESIDENT HATCHER: What I am hearing really is that it is a concept being advanced in order to kick off a discussion.

PN489

MR HARDING: Yes, well, I accept that but I don't think it's a concept - that's not the starting point, that can't be the starting point. The starting point has to be to start again and have a consideration of what a classification system would look like if there is going to be one.

PN490

I might add, you were urged by Mr Ward to disregard the evidence of Mr MacFarlane and Mr Cain insofar as they criticised the ABI claim. Well, of course, in my submission, that is entirely unfair because of course they were criticising the text of the ABI proposal which, for the reasons I have just mentioned, has fallen off.

PN491

Now, in that respect what I think we come back to is that, as far as the AED is concerned is that the SWS, we say, still provides an appropriate method by which one can assess the work productivity of an employee. We have started from the proposition that there is no need to change the award classifications, as in grade 2, and there has been some debate about whether that is so and whether in fact the award classifications have some problem in their description because of the way in which they are described.

PN492

There are other awards of similar descriptions and if I can take you to a few examples just to illustrate the point. I am going to hand up a number now. The one I am starting with is the Nursery Award 2010 and Grade 1A is the commencing grade for the Nursery Award. It tell us that a person in this grade has no previous experience of the industry and has no formal qualifications. They carry out general nursing and labouring duties of a routine and repetitive and/or manual nature mainly under supervision for a period of no longer than three months.

PN493

Grade 1B has a similar definition after three months, established routines, methods and procedures. Then I draw your attention to the third paragraph under Grade 1B which tells us that in relation to the functions set out therein, "any one or more of the skill levels set out below will engage the grade".

PN494

VICE PRESIDENT HATCHER: But isn't it critical that the employer can require the employee to do any one or more? That is, some or all of them? And if that requirement is made the employee would be expected to be able to do, if necessary, all of them?

PN495

MR HARDING: No, the critical issue, your Honour, is that they require them to do only one of them, if they accept that they are still obliged to pay that award rate.

PN496

VICE PRESIDENT HATCHER: Sure.

PN497

MR HARDING: So the embodied work value, the embodied work value in the grade is the doing of at least one. Any additional work that the employer can require, well, still requires them to pay the same rate of pay.

PN498

VICE PRESIDENT HATCHER: Yes.

PN499

MR HARDING: So in the end the work value is expressed in the doing of at least one, that gets them a rate, if they do more, it gets them the same rate.

PN500

VICE PRESIDENT HATCHER: That's one perspective, the other perspective may be that the work value is reflected in the fact that the employee can be required if necessary to do all of those functions.

PN501

MR HARDING: That could never be a description of anything we've seen in supported employment.

PN502

VICE PRESIDENT HATCHER: Except that I think - that might be true at the base level of work, you know, in terms of those who can only perform one skill or one task. But of course there are employees, on the evidence, in ADEs who perform more than one task.

PN503

DEPUTY PRESIDENT BOOTH: But of course, Mr Harding, these things - apart from the fact that I don't think they can be described as skill levels - they also couldn't be described as tasks, they're roles, cleaning is a role. You could have a hundred tasks - - -

PN504

MR HARDING: What about moving plants or packing shelves or picking and grading?

PN505

DEPUTY PRESIDENT BOOTH: Some of these roles have potentially lots of tasks and some of them conceivably would have fewer tasks but they're definitely not tasks.

PN506

COMMISSIONER CAMBRIDGE: But isn't the key to this the understanding that a whole gamut of these things would be anticipated.

PN507

MR HARDING: That's the problem though, Commissioner, which is the award in its terms doesn't seem to necessarily anticipate that. I hear my learned friend when he said, well, look, the whole award system - and he referred to a number of national wage cases, has been predicated on the notion that skill levels will increase and that there is necessarily a reflection built therein, in the idea that an employer can expect a range of things from the employee. My point, and the reason I raise these award descriptors is that the awards the Commission has made, and I've given you some examples of manual work, don't seem to necessarily reflect that. As I have said, it might be right to say that the employer could require an employee to perform a range of tasks at these grades. But the award in its terms, and I'm looking here as a matter of text, an employee could turn up to the court tomorrow if an employer said, I want you to do ten of these roles and the employee said, well - and they don't and they are only required to do one and enforce the award against the employer.

PN508

So my only point about that is that, and I see Commissioner you are perhaps not accepting it, I will persist notwithstanding. The work value that the Commission has articulated through these base level grades in manual type work has been expressed in terms that anticipates the performance of work of a particular kind which could be one or more, one or more. The modern award we are considering is expressed in exactly that way. In fact it is expressed in terms of tasks.

PN509

COMMISSIONER CAMBRIDGE: This is a Taylorist notion, this goes back to what awards looked like in the 1930s and 40s where you had these enormously long lists of classifications and there were these minor variations. What we did was we said, well, that's a really silly way of doing this and we said, we are going to put these all within a generic sort of level and that's where we've got to this point. You are actually taking us back to the individual identification of the Taylorist position for all of these sorts of things.

PN510

MR HARDING: That's the first time I've been accused of being a Taylorist. No, I am not. The award governs in a general way the class of work that has been dealt with by the grade and it does so in terms of the skill, it does so in terms of the level of supervision and level of responsibility. I am not going to shrink from that, that is the way in which awards have developed over time.

PN511

But in terms of construing the award, in terms of construing what it could require, those indicative tasks give us some indication - they are aids to construction. They give us some indication of what is within the scope. What is being put against us, Commissioner, is that Grade 2 doesn't really adequately describe the kind of work that is done in ADEs because the work ranges from basic to complex albeit it's all Grade 2 work.

PN512

VICE PRESIDENT HATCHER: I mean, you look at Grade 1B of this Nursery Award, I mean, it really embodies what the normal concept of the full award rate job is. For example, the second paragraph, there's a requirement to train other employees in the skills of their own grade by means of personal instruction and demonstration and actually any of those tasks underneath.

PN513

MR HARDING: Yes.

PN514

VICE PRESIDENT HATCHER: Now, with the greatest of respect, it would be difficult to identify anybody in the supported employment sector, who has the capacity to do that sort of task.

PN515

MR HARDING: Except that they do it. The Greenacres level E category, an employee can be assessed on the assistance they give to other ADE employees.

PN516

VICE PRESIDENT HATCHER: It's an assessment factor but it's not that.

PN517

MR HARDING: Okay. My only point about that is that if the Commission is going down the path of reclassifying the work, our position is one should not necessarily assume that the work value embodied in the task that the award refers to is somehow lower as its starting point because we are - as Buchanan J said in Nojin, talking about the very basic tasks at the very base level of award regulation, and there is a risk that the Commission, by suggesting that there is something lower than this, undermines that standard. A person who is working in open employment covered by the Nursery Award who has an intellectual disability doing the task of moving pots would be entitled to a grade 1B rate of pay.

PN518

VICE PRESIDENT HATCHER: With a productivity assessment.

PN519

MR HARDING: With a productivity assessment, exactly, but there is - - -

PN520

VICE PRESIDENT HATCHER: An assessment which would never be applied to a non-disabled person.

PN521

MR HARDING: No, that's true and we accept the fact, your Honour, that in terms of that assessment there is reason why that should be done for this class of employees. I think there's no difference between us, between myself and my opponents, about the notion that the Act authorises the Commission to insert special rates and conditions in respect of disabled employees, and it's accepted that it can do so by way of the SWS which has a productivity measure because that's appropriate to this class of employee, and that's the approach the Commission has taken in every modern award.

PN522

VICE PRESIDENT HATCHER: I wonder if the Greenacres model really says that - if you're coming close - if they were applying this to a nursery function, Greenacres would seem to say you're coming close to somebody who can meet all this, they're happy to apply the SWS. It's only the people who can't get in within this sort of descriptor but are forming a deconstructed (indistinct) different approach. But as I read the Greenacres model, if you can do this sort of stuff they're happy for SWS to apply as it would in open employment.

PN523

MR HARDING: I don't read the Greenacres model like that, your Honour.

PN524

VICE PRESIDENT HATCHER: I might be paraphrasing it.

PN525

MR HARDING: I mean - and the example that I think we were discussing earlier on about the forklift driver illustrates that point. So they could have the person doing the forklift job, they're driving the forklift and you'll still get a discount because there's an assessment of their underlying work skills which brings them down to the next wage level even though they're driving the forklift.

PN526

If I can just refer to the Nojin case - I was going to refer to it later - but my friends have spoken about Nojin and said, well, it doesn't really apply in this situation because BSWAT was such a different tool, and it has not been part of AED's cost that the Nojin decision stands as a template for how one determines or assesses the tools that are currently in 14.4.

PN527

The reliance on Nojin from the point of view of the AED, my client, is the approach that the court took to analysing the issues that arose in respect of BSWAT, and those are apparent in many places in Buchanan J's reasons but I draw particular attention to paragraph 146 of his Honour's reasons. There are other examples but this one illustrates the point, where his Honour says:

PN528

There is no doubt that BSWAT has support at many levels. In my view, that is not sufficient

PN529

VICE PRESIDENT HATCHER: What paragraph?

PN530

MR HARDING: 146, your Honour. I will skip through it. His Honour is talking there about training and so forth, and also the direct examination of actual work. And in relation to work value he is comparing that to open employment where he says:

PN531

Such workers are not themselves assessed that way. That is because it would be irrelevant to their real work value to do so. It was equally irrelevant to the real work value of Mr Nojin and Mr Prior. They were subjected to a process which produced an assessment score that did not fairly relate to what they actually did. It provided a comparison with a theoretical idea, which had been adjusted so as to be not too easily attained, rather than a straightforward comparison with the efforts and output of someone working at the Grade 1 level � i.e. a comparison which related to what the Grade 1 rate of pay was fixed for. Such a comparison occurs for disabled people in open employment.

PN532

VICE PRESIDENT HATCHER: That is - competencies were not relevant to the actual award criteria for grade 1 rate of pay.

PN533

MR HARDING: Yes, but your Honour, he is focusing on the output at the end of the day of the worker based on what they actually did, and that's the point we're seeking to emphasise. The work that they actually did, his Honour is saying, was at the grade 1 rate, and for that they were discounted by reference to irrelevant competencies. Putting it in a Greenacres circumstance, if I can use that example, again returning to the forklift driver, the actual work that was done by the forklift driver is driving the forklift, yet there was a discount applied by reference to underpinning work skills.

PN534

VICE PRESIDENT HATCHER: Going back to your Nursery Award example, grade 1B, it would not be irrelevant to take into account to perform that range of duties if required to do so. The reason why a disabled employee may be doing only one task all the time is because they're incapable of doing any of the others and that's why they're not assigned that work. Whereas if you had an employee with a lesser degree of disability or a non-disabled employee, they could be - and it may not happen all the time, it may be five or ten (indistinct) time - be required to do any of these other things.

PN535

MR HARDING: That's true, your Honour. That is true and perhaps I haven't made myself clear because the premise of the AED case is really a comparison between open employment for a person with an intellectual disability and ADE employment. In an open employment setting, as I think I've just mentioned, if a person with intellectual disability employed under the Nursery Award could only do one of these tasks, they would get the rate of pay prescribed by this award subject to a productivity assessment.

PN536

It's not right - and I suppose this comes back to the proposition we advanced right at the outset which is that there is a direct comparison between open employment on the one hand and ADE employment on another in relation to work. We accept there are some differences. The most significant of those is scale. But in terms of the work we don't accept that there's a difference, and in fact in transcript on Friday of last week your Honour asked Mr Cain a question about open employment. It starts at PN2507 and concludes at PN2509, where your Honour the presiding member said:

PN537

One example I gave: SWS will just take the discreet task the disabled person was doing, measure it against some sort of benchmark and then assign a percentage regardless of the fact that the job has been carved out for the specific purpose of having that person being able to do it?

PN538

Mr Cain's answer was yes. That's how the SWS works.

PN539

The reports that Mr Cain had put into evidence, exhibit 179(sic), my learned friend Mr Ward said this is all about the negotiating model. I'm not sure what he refers to. The article from Mr Luking(?), albeit an American article, deals precisely with a situation in which the job didn't exist and had to be made for the person with the intellectual disability, and the example that is given in that article, I draw your attention to that at page 268 and 269. I don't intend to go through it unless you want me to but there's the example.

PN540

Mr MacFarlane's evidence was - and there is some criticism being made of him for this, but his evidence is, we had to go out and find the work, and then when we've gone out and found it we've explained to employers how this person could perform the tasks that they want them to perform, and then the job is carved out is a matter that conforms to the abilities of the individual worker. That's the evidence of what occurs in ADE employment. We carve out a job, we make it suitable for the abilities of the individual worker. I think Mr MacFarlane said the jobs aren't advertised, we have to go and get them, and when we've gone and got them we make them work for the individual. In that situation you're dealing with a direct comparability between open employment for an intellectually disabled person and ADE employment for an intellectually disabled person. It's an apples and apples comparison.

PN541

Scale we accept might be an issue but that refers to the operational circumstances of ADEs, not the work. There was some question about what proportion of the persons who are assessed for SWSs had intellectual disabilities, and there have been various figures bounded around, 4 per cent, 11 per cent. Mr Cain's evidence is it's 68 per cent. It's 68 per cent of those who are using SWS assessments are those with intellectual disabilities, and the evidence of that is on paragraph 130 of his witness statement, the second witness statement which is exhibit 16, and annexure A of that statement on page 27, and then he references an annexure K which is a PowerPoint presentation given by the DSS.

PN542

That proposition is put to him in evidence and he confirms that position at PN2447. It's actually put to him:

PN543

But does it not follow from that that the majority of SWS assessments are in relation to non-intellectually disabled people?

PN544

No, he says it's the opposite.

PN545

Mr Ward said the SWS works really well for people with physical disabilities. I don't know how he knows that but leaving that aside, the evidence actually is that SWS assessments occur mostly for people with intellectual disabilities, not physical disabilities.

PN546

Attention has been drawn to annexure A.

PN547

VICE PRESIDENT HATCHER: Before you go on, obviously some of those - 16 per cent will be ADEs and I guess the larger bulk on it will be in open employment, is that right?

PN548

MR HARDING: Yes.

PN549

VICE PRESIDENT HATCHER: So do we have a figure of the proportion of those in open employment who did not have an intellectual disability but would be assessed under SWS?

PN550

DEPUTY PRESIDENT BOOTH: It would have to be the balance of (indistinct).

PN551

VICE PRESIDENT HATCHER: But some of those are ADE people.

PN552

MR HARDING: I don't - I can't tell you. He goes on in - maybe this is it - PN2547 and gives a figure of 7.4 per cent of the population - no, he's referring there to those in open employment with an intellectual disability, not those who use the SWS. So I can't tell you, your Honour. That's a matter of great significance, in my submission, because it's another comparability point as between ADE employment and open employment.

PN553

Attention was drawn to annexure A, to exhibit 33, which is the discussion paper "Ensuring a strong future for supported employment" and the figure of 4 per cent having an intellectual disability. That of course is a figure pertaining to DES participants, and Mr Cain was cross-examined by Mr Christodoulou about this report and he points out there are two subprograms which are referred to on page 9 of that report.

PN554

The first subprogram has people, employment support services for job seekers with permanent disability and an assessed need for regular ongoing support in the workplace in open employment, and the second category is those who don't need that, and his evidence in cross-examination is that it's the first category where you'll find the 68 per cent of those who are having SWS assessments. The four per cent is a combination of the two subprograms. So it's misleading to say that only four per cent of people with intellectual disabilities are using the SWS on the evidence.

PN555

There's been some criticism of Mr Cain and Mr MacFarlane. All I can say in relation to Mr Cain is that despite the criticisms that have been made against him he is clearly someone who knows his stuff. He gave very forthright answers to complex questions. The information he gave was given in a way that was forthright and studied and persuasive. Insofar as there's some suggestion that he has an axe to grind the Commission should ignore. He's entitled to a viewpoint. That viewpoint should not be conflated with the accuracy of the evidence that he gave. He was accepted as an expert in Nojin and relied on by the Full Court.

PN556

Mr MacFarlane is the only person who's given evidence in this Commission with the level of experience that he has as an SWS assessor. He expressed a philosophical view when cross-examined about the position that he put to the Human Rights Commission. Who cares what his philosophical view is. What he did in his evidence was to give persuasive descriptions using actual examples of how open employment worked, how it is jobs were carved out, how it was that they were obtained, and how it is then the SWS assessments were undertaken.

PN557

There has been a bit of debate about exactly what goes on in this negotiation process and I think what's occurred is there's been a slippage following the evidence that he gave about the extent of those negotiations. At paragraph 22 of his statement he talked about the SWS being very flexible and relying on negotiation and collaboration amongst stakeholders who analyse the job and agree on the number of duties and tasks to be assessed, the unit of measurement, the time taken, et cetera. His evidence in cross-examination was clearly that what is negotiated is the unit of measurement, not the duties; not having a conversation about what tasks. It's the employer who identifies the duties, but there is a discussion he says with the employer about how to measure the performance of those duties in order to establish the benchmark.

PN558

That's perfectly appropriate. I mean, ultimately the employer wants work performed in the way they want it performed and the productivity, the output, if you're going to have a system of assessment where there is no predetermined benchmark established by an award prescription or an agreement prescription there's got to be because we're dealing with individual workplaces and individual employees in those workplaces. The only way it can be done is by identifying a unit of measurement that will work according to the tasks the employer sets and that's his evidence.

PN559

VICE PRESIDENT HATCHER: How does that benchmark work in ADEs where there may be no employee performing the work who would meet some employer benchmark, that is it's artificial, isn't it? I mean, open employment, is that a pool of non-disabled people who would be doing some of the same duties and you can take the benchmark from them, but in an ADE setting where you've established a task in order that one or more disabled people can do it, isn't the whole notion of a benchmark for that artificial?

PN560

MR HARDING: But the whole thing is artificial, your Honour. Whether it's open employment or ADEs. You know, the example, the face up example in Coles, where you take one worker who � you know, a non-disabled worker, who might have a myriad of additional tasks, extract from that the facing up duties because that's the task he's going to allocate to the intellectually disabled person and ask them to perform it. That's artificial. It's just as artificial as an ADE. What's the difference? The central point is that in both situations you're creating a specific set of duties for the capabilities of the individual worker. That is artificial and it's because it's ultimately governed by the limitations that are implied by the disability. Disability is an individual concept. The manifestations of disability are individual therefore you could never, you could just simply never generalise and identify a benchmark in every situation. You ultimately always have to work from the proposition that if you're going to give a job to a person with particular limitations, whatever they might be, you're got to start with that, work out where the benchmark is, and then you measure the output.

PN561

COMMISSIONER CAMBRIDGE: You could measure the facing against the full gamut of the work. That would be an objective determination.

PN562

MR HARDING: Except that you're not measuring the output of the individual worker because it would be an unfair assessment because you're not asking that worker to do that for the range of duties. You'd be deflating, if I could unfairly, the productivity.

PN563

VICE PRESIDENT HATCHER: But you're not asking them to do it because you know they can't.

PN564

MR HARDING: Yes, I know, but then that's what I'm saying though, which is that the whole thing is artificial in that sense. If you're assessing productivity you can only access it against the tasks that the employee is going to perform.

PN565

I suppose you could do a benchmark by saying, well, our worker, our ordinary worker in Coles does this duty, this duty, this duty, this duty, and in that circumstance there's a benchmark that is established which is the basis for the productivity that the individual worker would give, but that would be entirely unfair and lead to a situation in which wages would be substantially depressed because you're not measuring like with like; you're measuring duties that are never performed, to use the example of Buchanan J, with those that are.

PN566

COMMISSIONER CAMBRIDGE: No, the duties are both performed by the person that's not disabled but there's a whole gamut of them. There's maybe 30.

PN567

MR HARDING: Yes.

PN568

COMMISSIONER CAMBRIDGE: This is, as I say, you just pick out one that the disabled person is going to perform and you make an analysis of that, and you make a comparison, and you value that. You say, well, okay, that's worth perhaps 30, 40, 50 per cent of the full range of the job.

PN569

MR HARDING: This is where I came back to this analysis of the classification grades in the award and why they were expressed in the manner that they are because in open employment if you're employed under the Nursery Award you will create this artificial ‑ ‑ ‑

PN570

COMMISSIONER CAMBRIDGE: I know your argument about that. You're going over the same things again but ‑ ‑ ‑

PN571

MR HARDING: No, no, I know, but I'm trying to answer your question, Commissioner, because it's artificial in the sense that you're not comparing the disabled person against - the non-disabled person can do everything. This is the whole notion of the carve out that Mr MacFarlane is talking about where you carve out a job, you allocate specific duties to the worker based on what they can do, and then you measure productivity. That's how it works. That's the way SWS assessments work.

PN572

COMMISSIONER CAMBRIDGE: No, but there's a step missing and that is that the carve out has to be firstly properly assigned. It's a bit like where the benchmark is getting fixed under the SWS ‑ ‑ ‑

PN573

MR HARDING: Yes.

PN574

COMMISSIONER CAMBRIDGE: ‑ ‑ ‑is perhaps - there's a step in between that where you have to look at just that facing to use the example and then firstly assess that against the full work gamut and then maybe do the productivity assessment or the � it's really just an output assessment.

PN575

MR HARDING: Yes.

PN576

COMMISSIONER CAMBRIDGE: On what happens after that.

PN577

MR HARDING: You probably could do it like that, Commissioner, but what I'm saying to you is on the evidence, and I'm relying on the evidence and making it referrable to my point about the comparability of open employment on the one hand and ADE employment on the other, is the evidence tells us that there's a carve out of a particular job for a particular individual according to their particular limitations, and that's the basis for the benchmark. That's what the evidence tells us.

PN578

COMMISSIONER CAMBRIDGE: Of course the problem in the ADE is that we don't have the starting point of the full gamut of the big job so to speak, the total picture, to start with. We're starting from back here.

PN579

MR HARDING: I suppose we're going around in circles a little bit here, Commissioner.

PN580

COMMISSIONER CAMBRIDGE: Yes.

PN581

MR HARDING: But you could be starting from there in open employment anyway because ultimately you're working out what the person can do, and then saying, well, okay, how do you do the measurement?. In an ADE setting I think the Vice President's question was, well, isn't it entirely artificial because there's no one other than disabled people doing that work, and, yes, that's true, but again the evidence tells us there maybe no one doing the work, the particular job that the disabled person is doing in open employment either. This may be a new job in which case, what's the difference?

PN582

VICE PRESIDENT HATCHER: A lot of that submission assumes the use of SWS and open employment has somewhere been given the golden tick and we should just apply it. I'm not sure that's a safe assumption.

PN583

MR HARDING: Except the Commission has utilised the SWS in every single award and said that is the golden tick.

PN584

VICE PRESIDENT HATCHER: Yes, but it's maybe subject to review.

PN585

MR HARDING: Right. I can't comment on that, your Honour. What I can say is that as the law currently stands the SWS forms part of the awards that the Commission has made and has done for a long time. There is some suggestion that the SWS has never been suitable for ADEs, and can I make a couple of points about that: firstly, it might be right to say that when, back in 1994, when the Full Bench of the then Commission adopted the SWS as the standard it was intended for open employment. That's what the Full Bench decision says. I don't run away from that. But, you know, that was 1994 and things have moved on. We know the SWS is used in ADEs. We know it's used by the biggest employer in ADEs as part of the Greenacres tool. We also know that there's been a process of modifying the SWS to make it suitable for a more general utilisation of ADEs and Mr Musso has just got up and said that his members intend to utilise the modifications. The handbook specifically says that the SWS could be utilised in ADEs.

PN586

I probably just need to deal with a couple of things that were raised by Mr Ward yesterday. There was a conversation about I think it's section 284(4) of the Act, and whether modern award rates have been set for this industry. In my submission, they have, and section 284(4) doesn't apply. Subsection (4) only speaks about setting modern award rate minimum wages as the initial setting. This award has been in operation since 2010. It's applied to disabled workers since 2010. There are rates prescribed in the award and those rates are the basis upon which the tools operate. There's been an initial setting.

PN587

VICE PRESIDENT HATCHER: The full award rate has been set, but there's been no � I mean, I thought it was part of your case that the variety of tools mean that there is no standard rate for ‑ ‑ ‑

PN588

MR HARDING: It is.

PN589

VICE PRESIDENT HATCHER: ‑ ‑ ‑disabled employees who are given tasks or given a level of capacity.

PN590

MR HARDING: Yes. It is part of my case, but I was simply addressing that I think the conversation that occurred between yourself and Mr Ward was somehow or other there's necessarily no meeting of section 134 because they haven't been set. Maybe I was wrong about that. But my point about that is it definitely is the case that clause 14.4 deals with the setting of a rate and therefore our case is there's no engagement of the work value provisions of the Act because we're dealing with setting or varying, but subsection (4) of 284 only deals with the setting in a very particular context, namely the initial setting. It doesn't preclude the Commission from setting rates again in circumstances where it has decided that the prima facie approach that it's taken in the four yearly case, or established in the four yearly review case, has been displaced and there's that prima facie assumption of it meeting the award objective no longer applies, and that's the case.

PN591

Section 153(1) of the Act - and there has been a discussion around what that means in this context. Let me just get to it. In our written submissions - I think the first and the last set of submissions - we dealt reasonably extensively with section 153. The only issue that we raise with respect to that provision is to say that in its current form, clause 14.4 falls foul of 153(1), because it is not saved by subsection (3). Now, that is not to say that one can't insert a discriminatory rate.

PN592

MR WARD: The SWS case.

PN593

MR HARDING: No. The Commission is entitled to set a discriminatory rate, which, of course, the SWS achieves, because, as a pro rata, it's less than the minima that applies to all workers, as long as it's the only method that applies to all disabled employees or a class thereof. The problem with clause 14.4 is (indistinct) a multitude, and the multitude operates, when you look at the provision on the basis - at the employee level - it doesn't operate on a class - there's no prohibition on the employer saying, "Well, I'm going to apply - I'm going to choose this tool for this employee over there, and another tool for another employee", because the choice in clause 14.4 is unfettered. The way in which the evidence operates is that various tools used by various employers in respect of groups of employees, but clause 14.4, in its terms, doesn't preclude that from occurring, or doesn't require that from occurring, rather. And that's our only objection to clause 14.4 in respect of 153(1). There is no argument that you could adopt a single tool - we say it should be the SWS - and apply it to all disabled employees.

PN594

VICE PRESIDENT HATCHER: So 14.4, as it currently stands, offends 153.

PN595

MR HARDING: Yes.

PN596

VICE PRESIDENT HATCHER: So therefore, it has no effect under 137.

PN597

MR HARDING: Correct, which means you're going to have to change the clause.

PN598

VICE PRESIDENT HATCHER: Well, how can we phase it out? It has no effect.

PN599

MR HARDING: That's good question, your Honour. I hadn't given thought to that. And potentially, there's a problem in relation to the phase out if it's right. I accept that, as a matter of language. I've spoken about Nojin, and relied on it for the approach that we have. I don't think I need to add to that. Mr Ward criticised our reliance on the international instruments, and said - and referred to a couple of cases about that. The first referred to I think it Re Fisher, which extracts the Teoh principle, from the High Court's decision in Minister for Immigration v Teoh. In opening the case, I specifically referred to the Teoh principle, although in the transcript it has been recorded as the toe principle. It was supposed to be the Teoh principle, and given I didn't hear much of what was going in Sydney at the time, given the problems with communication, maybe that explains why it's recorded as the toe principle.

PN600

Suffice to say, that operates in the context of ambiguity. In my submission, ambiguity should - and the cases, in my submission, will support this - ambiguity is not a narrow concept. And in the context of 134, particularly given the tension that the Full Bench in Re, the four-yearly review identified as between the various factors demonstrates that ambiguity can exist, or does exist in that provision, and accordingly, the Teoh principle can be utilised to assist in construing the Act in a way that's conformant with the international instruments. That's the first thing to say about it.

PN601

The second thing to say is, as my friend points out, the Full Court in the penalty rate case specifically upheld the Full Bench's approach to 134, which adopted a construction which relied on aligning 134 to community standards, or "contemporary standards", I think is the language they've utilised. The international instruments plainly reflect contemporary standards as they apply to disabled workers. So the Full Bench can have regard to those international instruments in construing 134 in the particular circumstances of this case.

PN602

I reiterate the article that I relied on in the opening, which talked about equal pay for work of equal value, and there will, doubtless, be debate about that. I relate that to the comparison that I seek to draw, between open employment and ADE employment, in relation to the work. In my submission, if it's right to say there is a comparability between those two forms of employment, then it supports the engagement of that principle as it applies to ADE employees.

PN603

Now, on the transitional arrangements, notwithstanding what I've said about section 153(1), in the event that we go there, my friend has suggested a transitional period of eight years as potentially applicable, which is an excessively long time. There might be a need to adjust the industry over a period of two or three, but eight years is too long, in circumstances in which - on our case, anyway - these employees are not being remunerated correctly, and that needs to be fixed.

PN604

Obviously, it needs to be fixed in a way that's sensible, and works, but, necessarily, employees shouldn't be left for a very long time before they receive proper remuneration. I draw attention to the fact that the conciliation process which led to the modified support - the SWS - has taken a considerable period, and whatever happens as a result of this case is on top of that. I have no criticism about the time that it has taken in respect of the conciliation process, but it's just a fact, that it has taken some time.

PN605

If I can go to some of the statements made by Christodoulou. Reliance was specifically placed on annexure A to Exhibit 64, which I think is the Australian Government submission, which you've asked some questions of our friends in Canberra, who spoke, which was nice. Reliance was placed on paragraphs 11.97 through to 11.99. Could I say about that that this submission was formulated in 2006. It was done in the context of BSWAT, when the Commonwealth had that scheme, and then Nojin came along. Some of the analysis that is made by the Australian Government in this submission is completely inconsistent with the findings of the Full Court in Nojin, so therefore, the submission simply has to be read in that way.

PN606

VICE PRESIDENT HATCHER: Well, that may be so, about what it says about BSWAT, but insofar as it criticises SWS, one wonders why the Government kept on funding and supporting the scheme when it had that criticism.

PN607

MR HARDING: Well, that was my next point. Notwithstanding what happened with BSWAT, that's exactly what the Commonwealth did. Necessarily, by conduct, if not by words, the Commonwealth's position has changed.

PN608

COMMISSIONER CAMBRIDGE: But that might just be a case of the absence of some clear alternative.

PN609

MR HARDING: Well, many alternatives, Commissioner. They could have picked one of the other tools - there's no reason why they couldn't have - but they didn't. They could have backed the ABI tool, but they've said nothing about it. What we do know, as a fact, there has been support for the SWS by the Commonwealth consistently, notwithstanding what they've said in this submission.

PN610

It might also be inferred, from the fact that the Full Court criticised BSWAT, that the Australian Government has changed its position, in terms of its analysis of the SWS, in light of the instruction and correction that was given by the Full Court. And I must say, that is apparent in paragraph 266 of Justice Katzmann's judgment, where her Honour said, "The evidence of a substantial disparity between competency and productivity scores in both trials of the BSWAT led to a conclusion there was a flaw in the design."

PN611

Now, that distinction between productivity and competency is reflected in the paragraphs that - in the Australian Government submission. I accept that the BSWAT operated on particular grounds, when it has looked at competency, but nonetheless, what her Honour is criticising is the design of the tool, given the substantial differences between those two outcomes. And in the submission, what the Australian Government is suggesting is that there's an overvaluation of work, by virtue of the SWS. But her Honour didn't find criticism necessarily in the outcome of productivity; she said, "You can't have the two stand together, and think that you've got a properly designed tool."

PN612

I should add that, in my submission, in any event, clause 11.97 of that submission speaks about value, while productivity, from the perspective of work value that is valuable to the employer, rather than value that is, in a strict sense, work value that is understood by this Commission.

PN613

I also draw attention to paragraph 79 of his Honour Justice Buchanan's reasons, which I won't go to. There was some reference to the ARDT report and its findings. In my submission, one needs to read the whole report. Really, the ARDT report found that the - whether or not the modified SWS could be applied was simply inconclusive, and they specifically identified problems with implementation as part of the key reasons why it was inconclusive. If I can rely on IV of that report, pages 9 and 15. I might add that much - when you read the ARDT report in relation to the issues of implementation against the evidence of the understanding of ADE of the SWS, one can see the problem. Mr Christodoulou in submissions was stopping the clock when someone was wandering off from a work station as how one assesses work productivity under the SWS. The evidence is completely contrary to that.

PN614

VICE PRESIDENT HATCHER: How does it work in the modified SWS where if the discrepancy between the two sets of data is more than 20 per cent you ignore the one that takes the wider frame and just take the one that has the narrow frame? I would have thought it would be the other way round, that the larger the discrepancy, the greater the need to take into account the historical data.

PN615

MR HARDING: I don't know the reasons why that was put the way that it was. At first blush I agree with you, but perhaps there was a reason. Maybe it was that the historical data - bearing in mind ABS may not have collected it, it may have gone wrong in some way, and that the preference was then to have the objective system determine what the productivity was in the event that there was a discrepancy of such a nature.

PN616

Mr Christodoulou relied on a table as evidence of the impact of the SWS, utilising the data that was I think in the demonstration project. We've also done a table that uses the same data, and if I can hand that up. Much of this information is recorded in Mr Christodoulou's table. I did wish to draw your attention to the variations between the Greenacres tool in terms of a rate of pay, and the assessment. You will note in fact that in many respects it went down, not up, at least for these group of peoples.

PN617

VICE PRESIDENT HATCHER: I thought that was his point, that to a significant degree the SWS disadvantaged employees doing more complex tasks.

PN618

MR HARDING: Yes, but I think - leaving aside the sewing component - and you will have to read the demonstration project about sewing because there are some specific issues in relation to that - and then looking at the packing, there is a correspondence between the number of tasks performed and the output. So the person who is doing eight tasks had an output of 68.6 per cent and had the highest pay increase compared to Greenacres, for instance.

PN619

Likewise, the one who was doing four tasks, apart from - had an increase of $3.95 in their rate of pay compared to Greenacres. The complex simple distinction that Mr Christodoulou adverts to of course relies on how Greenacres has classified work of sewing on the one hand and packing on the other, because that represents the basis for the difference.

PN620

And we don't necessarily accept that there is a necessary complexity when sewing is compared to packing. In fact I think in Mr Branningham's evidence yesterday he contrasted sewing as a basic task with embroidering as a more complex task. I accept that there may not be a necessary correspondence between the way in which work is done in Mr Christodoulou's enterprise and the way it's done under the Amero tool. But nonetheless, that's the explanation for the differences between sewing and packing on this example.

PN621

We rely on it, and it's a very narrow sample. We don't rely on it to say conclusively that there will not be increased rates of pay if the SWS was introduced, we agree that there will be. We don't necessarily accept that it will be to the extent that is being suggested against us, and at least on this narrow example those rates of pay were not substantially different.

PN622

VICE PRESIDENT HATCHER: Did the Greenacres have a minimum of 15 per cent?

PN623

MR CHRISTODOULOU: Yes, your Honour. Actually, the tool has a minimum of 12.5, but as an employer we pay 15.

PN624

VICE PRESIDENT HATCHER: I'm just saying number 4 may be artificial in the sense that the modified SWS would actually produce a pay rate of 12.5 per cent.

PN625

MR HARDING: Yes, that's right, it would be, but. And I might add it's important to understand here that despite the fact that it has got "modified SWS", as I understand it the demonstration project actually just did a point in time assessment because there wasn't historical data, so it has got to be viewed in that way. We certainly don't shy away from the proposition that historical data is a good thing and should be part of the SWS assessment.

PN626

And so we certainly don't want to suggest by this table that this is conclusive evidence of anything in particular, it just provides further context to the submission that Mr Christodoulou made about the impact of the SWS on its costs.

PN627

I do want to just say a couple of brief things about the submissions made by Mr Stroppiana today. One thing that's for us and one thing that's against us, he referred to some evidence, I think from Mr Reed, from recollection, about his comparison between open employment in the timber industry where you might have machinery operating and only employ eight to 10 employees as somehow significant to the Full Bench's assessment of how the SWS is intended to operate.

PN628

With regard to that, it's entirely irrelevant. The comparison, as I've said, that the AED makes is between open employment and ADE employment, and not necessarily with employment that has no disability effect at all. He also pointed out, against my opponents, in fact, that there's no difficulty necessarily in a modern award incorporating by reference the SWS. As a matter of - in the ordinary course I would say that it's more desirable to have the award stipulate with certainty what the rights are, what the obligations are.

PN629

The SWS is a very mature system; the documents are public, they're available, they're described; as Mr Stroppiana has said, they are expressed in the same way in every modern award; and that stands in stark contrast - stark contrast to the remainder of the tools, which are not public and had to be obtained for the purposes of this Commission by notices to produce.

PN630

It also stands in stark contrast to other parts of the clause, for instance the Pearson report. That is public in the sense that it can be found on the DSS web site. One has to go searching in order to find it. That is different from how the SWS operates, where the information is widely available.

PN631

Finally I wanted to conclude by reference to the list of findings that my learned friend Mr Ward invited the Commission to make. In my submission you don't need to make any of those findings. All of those findings start from a premise that in my submission is wrong on the evidence and can't be made. For instance, finding 1:

PN632

ADE enterprises fundamentally differ from open employment in terms of their goals, purpose, and the model they adopt.

PN633

In my submission that finding is not open. "ADEs, in distinction to open employment" - this is finding 2 -

PN634

specifically re-engineer work to accommodate the capabilities of a person with a disability rather than to determine the most efficient form of work to produce profit and recruit into it.

PN635

The second part of that finding is perhaps correct; the first part is incorrect insofar as it's suggested there is actually a distinction between ADE employment and open employment. You will note that despite what we might say about Mr Smith's evidence, which we say can't be accepted as a statement of expert opinion, he did accept that in relation to his experience at open employment, customisation occurs. The only evidence against that - and Mr MacFarlane and Mr Cain - is in fact Mr Dickens, who had six to 12 months of experience doing that work.

PN636

Finding 3 is:

PN637

The SWS, even with is rough edges taken off, was always designed for open employment. It's not fit for purpose.

PN638

Again, you can't make that finding, in my submission. It's simply not open. It ignores the efforts that the parties have gone to in the last three years to modify the SWS so that it can be applied. It also ignores the evidence of the fact that it is applied in ADEs, and has been the case in Mambourin, since 1996; and others as well; and also the evidence that the largest employer in this industry utilised the SWS above 55 per cent. It just can't be not fit for purpose if it's being so widely utilised. Finding 4:

PN639

The SWS has produced significant negative impacts on operations and their viability when it has been adopted.

PN640

In my submission that's not consistent with the evidence of the adoption by the SWS. It's true to say that many of those who have utilised the SWS apart from Mambourin have reported an increase in their costs, but they were unable to be very specific about the extent to which their costs rose. There was restructuring that occurred: so what? So what? The business had to adapt to a new circumstance, and that's what it did. That's not a reason not to adopt the SWS, that's just a response to the fact that a new model of wages was adopted and they had to adapt to that circumstance. Finding 5:

PN641

The award should contain a classification structure specifically designed to describe the work performed by employees.

PN642

I think we've covered that territory and I don't need to say any more about that. Submissions have been made by Ms Walsh and Mr Christodoulou pertaining to the motivations of the AED and also other disability rights organisations. With respect, those views are irrelevant to the issues that this Commission has to consider.

PN643

Whatever may be going on in the argy bargy outside this Commission, the AED's position is the one that has been articulated here. And there is no reason why the Commission ought to adopt or discount that position by reference to externally-generated viewpoints, whatever the accuracy of those might be. They're the submissions in reply from the AED.

PN644

VICE PRESIDENT HATCHER: Thank you. We thank the parties and their advocates for their very detailed submissions. Once we have received the answers to our questions from the Department and any further material contemplated, we will reserve our decision. We're now adjourned.

ADJOURNED INDEFINITELY�� [4.45 PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #183 WITNESS STATEMENT OF SCOTT REED....................... PN380