Industrial Relations Commission of New South Wales CITATION : KU Children's Services (Other Than Teachers) (State) Award 1998 [2000] NSWIRComm 94 APPLICANT PARTIES : KU Children's Services RESPONDENT Australian Liquor Hospitality and Miscellaneous Workers' Union, Miscellaneous Workers Division, New South Wales Branch FILE NUMBER: IRC 7343 of 1997 CORAM: Glynn J CATCHWORDS : Fixed term employment - Special Case principle - Onus - Public interest - Gainful employment LEGISLATION CITED : Industrial Relations Act 1996 s 10 s 17 s 66 s 69 Centre Based and Mobile Child Care Services Regulation (No 2) 1996 s 34 Clark v Mid North Coast Health Service (Unreported, Cambridge C, 98/4263, 1/10/99) Cooper v Darwin Rugby League (1994) 57 IR 238 Crown Employees (Ancillary Staff in Schools) 1978 AR 158 Crown Employees (Teachers, Locality Allowance etc) Award 1981 AR 1017 CASES CITED : Crown Employees (Teachers - Technical Education Department - Overtime) Award (Teachers - Tech Education Award) 1969 AR 29 National Tertiary Education Industry v Australian Higher Education Industrial Association (1997) 74 IR 326 and Print Q0702, 11/5/98 NSW Office of the Board of Studies and NSW Teachers' Federation (Unreported, Schmidt J, IRC99/6190, 17/12/99) O'Sullivan v Farrer (1989) 168 CLR 210 Public Hospital (Medical Officers) Award 1974 AR 540 South Maitland Railways Pty Ltd (Wages Division) Award 1967 AR 537 State Wage Case 1999 (1999) 88 IR 363 HEARING DATES: 07/02/1998 - 12/14/1999 DATE OF JUDGMENT: 06/13/2000 APPLICANT Mr J Murphy of Counsel Ms S Stanko KU Children's Services LEGAL REPRESENTATIVES: RESPONDENT Ms P Lowson of Counsel Mr A Magner Australian Liquor Hospitality and Miscellaneous Workers' Union, Miscellaneous Workers Division, New South Wales Branch JUDGMENT: - 65 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: GLYNN J 13 JUNE 2000 MATTER NO IRC7343 OF 1997 KU CHILDREN'S SERVICES (OTHER THAN TEACHERS) (STATE) AWARD 1998 Application by KU Children's Services for a new award JUDGMENT 1 KU Children's Services (KU) filed an application for a new award entitled the KU Children's Services (Other Than Teachers) (State) Award 1998 (the 1998 KU Award) on 24 December 1997. 2 It was proposed that that new award would: … consolidate the KU Children's Services (Other Than Teachers) (State) Consent Award made 11 September 1996 which is Schedule B attached [264 IG 302], the variation to this award made 8 July 1997 (copy of Exhibit Not Marked attached) as well as the respective terms and conditions from the parent award the Miscellaneous Workers' (Kindergartens and Child Care Centres) (State) Award … This new award shall also include a new definition of "Fixed Term Employee"… 3 The Grounds and Reasons to support the application were: 1. The current award has expired. 2. The parties have been in dispute over the terms and conditions of employment of employees to be engaged on fixed term contracts. 3. The making of the new award will resolve this dispute. 4 On 13 January 1998, an affidavit of urgency was filed on behalf of KU, seeking an urgent hearing on the basis that while KU had fixed term positions available and wished the recruitment process for those positions to commence on 19 January 1998, KU and the Australian Liquor Hospitality and Miscellaneous Workers' Union, Miscellaneous Workers Division, New South Wales Branch (the union) were still in dispute over the terms of employment of such staff. 5 Conciliation was undertaken by Harrison DP on 15 January 1998 and the matter later reallocated to myself. Further conciliation before me failed to achieve a resolution of the differences between KU and the union, and the matter proceeded to arbitration. 6 At a Report Back on 30 January 1998, a timetable for the exchange of documents was agreed. The parties thought one day would be sufficient to complete the hearing, but for greater caution a second day was reserved, those days being 23 and 24 February. 7 On 23 February, the Commission was advised that the timetable had not been complied with. A further agreed timetable was put in place, to culminate in a hearing over three days on 2, 3 and 9 July. 8 The hearing commenced as rescheduled on 2 July 1998, Ms M Underwood being called as KU's first witness. (The hearing for 3 July had been vacated by consent on 23 June.) I do not find it either constructive or a productive use of time to detail the course of the hearing over the following 15 months. Examination of the file shows that the pattern of hearings/vacation of dates by consent continued from then forward and that some 30 hearing days were eventually utilised. (A further attempt at conciliation before another member of the Commission on 26 August 1999 was not successful.) 9 KU called the following witnesses: Michelle Underwood, Manager Long Day Care Services and Business Development for KU. Ms Underwood possesses a Diploma in Teaching (Early Childhood), has had 15 years teaching experience in child care centres with KU and, in total, over 30 years experience in the early childhood industry. Her responsibilities in her present position include the management of centres that are known as "work based/sponsored services", together with AMEP (Adult Migrant Education Program). Narelle Coad, originally Centre Consultant, KU. Her responsibilities included providing management support for KU Services at 3 Sydney University Centres, 2 long day care centres, 2 pre-schools and 4 after school care programs. Formerly Director for 3 years of Wattle Lane Child Care Centre, a work based service. Her latest role was as the Defence Child Care Program Co-ordinator. The services under that Program relate to child care centres accommodating families working at various defence forces bases. They are work based services. Malcolm Thurston, employed by TAFE as Manager Services, Sydney Institute of Technology. His overall responsibilities included overseeing the management of the TAFE child care at Ultimo and Petersham. (At the time his affidavit was sworn - 24 May 1998 - those two centres had been managed under a recently concluded contract with KU). Mr Thurston's statement relates to the Sydney Institute of Technology rather than to TAFE as a whole. 10 The following witnesses were called by the union: Maria Bassili, employed by KU under the provisions of the Miscellaneous Workers' - Kindergartens and Child Care Centres, &c. (State) Award (the parent award) and of the KU Children's Services (Other than Teachers) (State) Award (the KU Award) at the Fairfield Adult Migrant Education Program (AMEP) child care centre. She was first employed by KU at Blacktown AMEP on 16 July 1990 and at Fairfield AMEP in January 1993. Janee Binnie, employed by the Hunter Institute of Technology (TAFE) at Carinya Child Care centre (Carinya) under the parent award. Previous to her employment at Carinya she worked for KU as a casual Child Care Worker. Silvana Failla, previously employed by KU as a child care worker in accordance with the provisions of the parent award and of the KU Award. She was first employed by KU on 19 July 1993. She stopped working for KU in January 1999. Annie Owens, Branch Secretary of the union. Included in her responsibilities is the children's services industry. Since May 1997 she has participated in award negotiations and discussions in relation to both the parent award and the KU Award. Gay Richardson, employed in accordance with the parent award as a child carer at the House at Pooh Corner Child Care Centre, a 67 place long day care centre located on the Kensington Campus of the University of N.S.W. Monica McAuliffe, manager, TAFE's Children's Services within the Department of Education and Training (DOEAT). There are 20 TAFE campuses, 18 of them as at 6 May 1999, owned and operated by TAFE, the other two (Petersham and Ultimo) managed by KU in accordance with TAFE policies, including the staff to child ratio. Her position is a centralised position as part of TAFE management and is responsible for policies, coordinating the centres, providing support to the staff in centres, staff development, and providing advice to Institutes on provision of children's services. The Institutes are separate bodies who have a certain amount of autonomy but are still under the umbrella of TAFE and many of the policies and procedures are from TAFE. 11 In response to a summons to produce issued pursuant to s 165 of the Industrial Relations Act, 1996 (the 1996 Act) by the union, the Department of Education and Training produced five lever arch files containing Service Provision Reports, together with a three page summary of the material in those files, that summary having been compiled at the instance of the Manager of TAFE Children's Services. The union later wrote to the Department seeking further particulars limited to 3 TAFE centres. The Department produced three additional cartons of documents. Although the union and KU were able to make use of parts of that material, the use of it was limited as to comparisons sought to be made with material produced by KU, because of the differences in approach to record keeping in the child care centres concerned. 12 The union tried to overcome its problems with that material by arranging for Ms McAuliffe to give evidence. Ms McAuliffe's first appearance before the Commission was in accordance with an agreement reached with the Department by the parties, but not discussed with the Commission, that her evidence would be restricted to the explanation of documents produced by the Department. At a later stage of the proceedings, a summons to attend was issued by the union to overcome problems that inevitably arose as a consequence of the original approach. Wage Fixing Principles 13 The question as to which is the correct principle under which to process this application was raised by Ms Lowson of counsel after she was very late in the proceedings briefed for the union, Mr Magner of the union having previously appeared on its behalf. She queried whether the Special Case principle might not be the appropriate principle. If it were, the application would need to be processed before a Full Bench of the Commission, unless otherwise allocated by the President. 14 Ms Stanko on behalf of KU submitted that, firstly, it was not a matter that needed to be determined given the time that had elapsed and, secondly, the application fell to be decided in accordance with the Enterprise Agreement principle. 15 The State Wage Case 1999 [(1999) 88 IR 363] was handed down on 3 June 1999. The Wage Fixing Principles contained in that decision included the following: 2. When an Award may be Varied or Another Award Made Without the Claim Requiring Consideration as a Special Case In the following circumstances an award may, on application, be varied or another award made without the application requiring consideration as a special case: (a) to include previous State Wage increases in accordance with Principle 3; (b) to incorporate test case standards in accordance with Principle 4; (c) to adjust allowances and service increments in accordance with Principle 5; (d) to adjust wages pursuant to work value changes in accordance with Principle 6; (e) where the application is consented to by the parties; (f) to adjust wages for the State Wage Case 1999 in accordance with Principle 8; and (g) to approve of an enterprise arrangement reached in accordance with Principle 11. … 16 KU's application did not fit within any of the circumstances set out in paras (a) to (g). That being so the provisions of the Special Case principle had to be considered. That principle is in the following terms: 10 Special Case Except for the flow on of test case provisions, any claim for increases in wages and salaries, or changes in conditions in awards, other than those allowed elsewhere in the principles, will be processed as a special case before a Full Bench of the Commission, unless otherwise allocated by the President. This principle does not apply to applications for awards consented to by the parties, which will be dealt with in the terms of the Act, or to enterprise arrangements, which will be dealt with in accordance with the Enterprise Arrangements principle. 17 Having considered the submissions, I formed the view that the application as it then stood did fall to be decided within the Special Case principle and so advised His Honour the President. The following determination was made by him: Determination Pursuant to s193 of the Industrial Relations Act 1996 and Principle 10 of the State Wage Case 1999 Principles. KU Children's Services (Other Than Teachers) (State) Award 1998 - Application by KU Children's Services for a new award - IRC97/7343 Having considered the reference to the President of the Commission by the Honourable Justice Glynn in this matter dated 19 October 1999, and the matters set out therein, I determine that these proceedings, including any Special Case aspect of them, are to be dealt with by Her Honour. Dated this 25th day of October 1999 Wright J President 18 This application is therefore determined in accordance with the Special Case principle. In so doing, the Commission, will, in accordance with the requirements of the Preamble to the Wage Fixing Principles, State Wage Case 1999 [(1999) 88 IR 363 at 399] apply structural efficiency considerations. 19 Following a similar Determination to that set out above, Schmidt J in Re Dispute: NSW Office of the Board of Studies and the NSW Teachers' Federation (unreported; IRC99/6190; 17/12/99) set out the onus that falls on an applicant in special case proceedings and which is applicable in these proceedings: In Occupational Health Nurses' Superannuation (State) Award (unreported; Bauer J, Schmidt J and French C; 6 November 1996) the Commission discussed the onus which fell on an applicant in special case proceedings, which was that described by the Commission in Court Session in Teachers (Non Government Schools) (State) Award and other Awards (unreported; Fisher P, Sweeney J and Varnum DP; 17 August 1990). Applicants in a special case must meet the ordinary requirements that a case must be made out on the evidence and matters of the cost of the claim and the public interest also arise for consideration. Final Claim 20 The claim as finally amended, over objection, at the time of final submissions, is for a variation to the KU Children' Services (Other Than Teachers) (State) Consent Award 1996 (the KU Award 1996) (302 IG 264) in the following terms: 1. Add the following new subclause (v) to Clause 3, Definitions: "(v) "Fixed Term Employee" means an employee (not employed in a pre-school service) engaged pursuant to Clause 4A of this Award. 2. Renumber subclauses 3(v) and 3(vi) to 3(vi) and 3(vii) respectively. 3. Add the following new Clause 4A, Fixed Term Employees: "4A. Fixed Term Employees Notwithstanding anything contained in the parent awards [sic] the employer may engage employees on a full-time or part-time basis for a specified period which is not less than 3 months nor more than 2 years on the following terms: (a) Such employees: (i) shall accrue pro-rata sick leave and be able to carry their sick leave accrual from one engagement to the next, provided that the break in service is not more than three months. (ii) shall have their period of service deemed as continuous for the purpose of long service leave provided that the break in service is not more than three months; (iii) shall be entitled to pro-rata leave (bereavement leave; jury duty leave; examination and study leave; attendance at in-service [courses] etc.) provided for under the award; (iv) shall be eligible for casual employment with the employer outside any periods of fixed term employment; (v) shall not be entitled to take RDO's [sic] during term time - RDO's [sic] are to be taken during non-term time. (vi) shall be paid their annual leave entitlement at termination and shall not be entitled to take their annual leave during term-time. (vii) shall be paid pro-rata annual leave loading at termination. (viii) shall be entitled to parental leave once their period of service is a continuous aggregate period of 52 weeks - breaks of not more than 3 months of service shall not be deemed to be a break in service for this purpose, excluding periods of casual service. (b) Where a fixed term employee has taken parental leave and upon return to work the employees position no longer exists, the employer will endeavour to try and place such employee in an alternative position. (c) Any replacement employees of fixed term employees and [sic] will only be offered employment for the duration of the original fixed term employee's period of engagement. Such employee shall be advised of the nature of the period of employment accordingly. (d) As the duration of fixed term contract employment is generally to be within a calendar year only, such employees cannot be guaranteed a position upon resumption of parental leave. (e) Fixed Term Employees will not be entitled to any redundancy provisions on termination, either upon conclusion of period(s) of parental leave or generally. (f) Fixed Term Employees may be terminated by the employer within a period of fixed term employment provided that the employer gives two weeks notice of such termination, or payment in lieu of notice. In such circumstances, the employer is not required to make redundancy payments under the award or Act. (g) Fixed Term Employees may terminate their employment by providing written notice of two weeks or forfeiture of wages accordingly. In such circumstances, the employee shall not be entitled to pro-rata annual leave loading on termination or for continuity of service for the purpose of long service leave in the event of re-employment. (h) Fixed Term Employees will be treated by the employer as permanent employees for the purpose of applications for permanent positions within KU in accordance with KU's Staff Appointment and Transfer Policy, including internally advertised positions. (i) Permanent employees will not be directed to be engaged in fixed term positions. 4. This variation shall take effect on and from . 21 The fixed term employment proposed will not apply to preschool services, as originally sought, but it would apply to long day care services. 22 It was claimed that, at every point, fixed term employees under KU's proposal would be treated more beneficially than temporary employees under the award, eg they would receive pro rata long service leave and accrue an entitlement to other forms of leave which temporary employees cannot. Background to the Application 23 Ms Underwood described KU Children's Services. KU was established in 1895 and is a non profit organisation. It is the largest employer of child care in New South Wales outside Government. It has some 130 different services which include work based care, pre-schools, long day care, occasional care, out of school hours care, adult migrant education programmes and mobile services. (The application, as originally pressed, would affect all those services but KU later indicated it would accept modification of the application to certain services). As already indicated, the application if granted would not apply in the pre-school service area. 24 KU is the largest manager of work based centres in Australia. Work based services are grouped primarily into three categories: TAFE, Universities and corporate. The corporate sector includes both private sector employers and Government or statutory authorities. 25 At present KU administers some 19 work based centres in New South Wales - two TAFE centres, six University centres and eleven corporate centres. 26 The client base (ie parents and their children) of work based services is restricted to employees or, in the case of University and TAFE centres, students, of the "sponsor". Ms Underwood accepted that the restrictions were not total, in that, in some circumstances, places were offered to children from the general community. 27 In relation to work based centres, KU has to comply with the terms of management contracts made with the centre sponsor. Such contracts are for a fixed term, generally for approximately three years. Typically, KU tenders for the management of work based centres and the tenders are very competitive. 28 The sponsors nominate to KU the number of weeks per annum that the service will operate and this varies dependent upon the needs at the sponsor's workplace. 29 From one calendar year to the next KU cannot guarantee that the numbers of children will be the same in any centre. This means that KU cannot guarantee all employees permanent employment. KU has to be in a position to respond to changes at short notice. Circumstances tend to dictate that KU can not be involved in the planning process of either the sponsor or of the provider of the child care service. 30 KU had problems as to how it could address fluctuations of attendances, both as to downturns and, in fewer cases, the increasing numbers of children attending at long day care centres and traditional day care. 31 KU is not in favour of standing down employees and in any case the award capacity, if it exists as is contended by the union, to stand staff down for four weeks would not necessarily resolve the problem in TAFE, for instance, when there are some 16 weeks of lower attendances. KU gave consideration to varying the award to make provision for, say, a 12-week period of stand-down per annum. However, that option would not resolve the difficulty of not being able to employ staff with certainty from one year to another. 32 KU did give serious consideration to the option of engaging staff on a permanent basis and then making them redundant as needed. Because KU was aware that there could be circumstances in which the period of employment at any one time might be less than 12 months, it was decided that it was not responsible to give prospective employees the expectation of permanent employment whilst knowing that quite likely there would be the need to make them redundant within twelve months. KU did not wish to have the situation of employees for instance, borrowing money for mortgages and then facing the prospect of unemployment. 33 Another option available under the KU Award given serious consideration was the employment of staff as casuals. Once more, this does not provide a resolution to the problem of, say, 30 weeks of work per annum, a criteria that it was said KU on average does meet. Under the terms of the current award casual employees are restricted to working 20 days at any one time. Further, it is not desirable from the point of service to have different persons dealing with the children and for the need for such employees to be shown each time they are employed how that particular service operates. 34 KU's position was that if KU were to have the flexibility of employing staff on a fixed term basis, at universities and at TAFE it would have a core of staff and that would be the majority of the staff. A core staff of permanent employees is absolutely essential for the operation of the centre for the consistency of care for families, and to give the programme its underlying consistency. Then, for the busy period, or the times when enrolments went above anticipated levels, KU would use the fixed term contracts to match the staffing to the demand for child care and so cover the periods that KU was confident it could utilise those employees. The fixed term employees would usually be unqualified child care workers who provide the back up essential to the operation. At the end of those periods KU could then review the situation and see what adjustments it would need to make to staff based on the next enrolments. Submissions - KU 35 Final submissions for KU were delivered in two stages, the first by Ms Stanko and the second by Mr Murphy of counsel appearing for the first time on behalf of KU. 36 In her submissions, Ms Stanko stated that there were two main issues before the Commission: 1. the fundamental difference between the parties as to whether there ought to be any form of fixed term employment; and 2. the terms and conditions of such employment and what, if any, safeguards needed to be included to protect the rights of the parties if KU succeeded in its application. 37 Ms Stanko described the application as KU's last resort in trying to obtain the flexibility of employment in the situation where, primarily, there are a considerable number of weeks per annum where children are not in attendance at the services and therefore employees are not able to be gainfully employed at those times. In TAFE and University services, for instance, the number of children present would fluctuate between term and non-term time. The availability of fixed term contracts would allow the staffing to be enrolment driven so KU would wait until KU could determine what was the profile of the service and then staff to that level. 38 The position is further complicated by the fact that the regulations for child care services determine minimum staffing ratios and minimum qualifications to be held by staff. 39 The key point of the application is that KU is simply seeking to extend the flexibility of temporary employment to circumstances other than those set out in the parent award. KU's application is based on the parent award's definition of "temporary employee". The proposed new clause incudes some benefits for temporary employees, those benefits either not available under the parent award or only currently available to permanent employees under the KU Award. 40 The current award provisions in relation to the employment of staff are restrictive because the periods the centres have to be open exceeds the period of useful employment for a number of employees in a number of services. KU already uses the flexibility available in provisions that go to part-time and casual employees available in the KU Award 1996 and in the the parent award, including the provision for temporary employees (cl 3(iv) ) in the latter award. Other existing award flexibilities utilised relate to rostered days off, the timing of the taking of annual leave at Christmas and the standing down of employees in certain circumstances. 41 KU has consistently stated that it does not intend to employ existing permanent employees on a fixed term contract basis. 42 Ms Stanko supported KU's application by reference to the similar definitions of "temporary teacher" in the Teachers (Non-Government Early Childhood Services Centres other than Pre-Schools) (State) Award (Teachers (Non-Government etc) Award) (300 IG 150 at 152) (cl 2(a)(iii): not more than full centre year/not less than 20 days) (the award applies to teachers outside of KU who are employed in long day care settings) and in the Teachers (KU Children's Services) (State) Award (304 IG 449 at 452) (cl 2(h): not more than a full year/not less than 20 days). 43 Mr Murphy submitted that the starting point for consideration is the undoubted right at common law for employees and employers to enter into a contract for a specified period of time (i.e. a fixed term contract). It is a right unfettered by statute in New South Wales, except to some extent in certain areas of public sector employment, as, for instance, by s 38 of the Public Sector Management Act 1988 and s 50 of the Teaching Services Act. 44 The concept of temporary employment is not something unusual, and is not something repugnant to the system of industrial regulation established under the Industrial Relations Act 1996 (NSW). It is a common, well understood, well known concept. The Industrial Arbitration Act 1940 by and large left the conditions of employment and matters such as that to be determined by the former Industrial Commission. The modern trend as reflected in the 1996 Act seems to be the legislation imposes certain fetters in relation to particular conditions of employment, eg equal remuneration, maximum hours, minimum sick leave provisions, parental leave, part-time work and the like. Given that the legislature has taken on a more hands on approach in setting parameters within which the Commission operates, eg part-time work, it is interesting to note that the area of temporary or fixed term employment has been left at large. 45 Where awards do purport to fetter or impose restrictions on the rights of parties, those awards, including the parent award in this case, have departed from the clear common law right of parties to enter into such contracts. KU says those restrictions ought to be modified in the terms put forward in its proposed cl 4A. 46 The so called existing flexibilities are insufficient to meet KU's needs. The evidence discloses that in certain long-day care centres operated by KU that there is a reduction, primarily in the months of December, January and February, in demand and, as a consequence of that, an inability to gainfully employ the full complement of staff generally required for the later period from March through to November. The evidence of Mr Thurston confirmed the evidence of Ms Underwood and Ms Coad in relation to the reduction in the level of usage. 47 KU is under no obligation to "invent" work in order to occupy the full complement of staff over the whole period of the year, despite the downturn in demand. To suggest otherwise would be entirely contrary to the notion of "gainful employment". The fact that other centres which are managed directly by TAFE or a university, operate differently to those managed by KU on behalf of its clients is entirely irrelevant. KU is entitled to manage its centres according to its needs and the needs of its clients. Those needs dictate that the required number of staff at a given centre reduces for a significant portion of the year. 48 KU does not believe it to be either sensible or responsible to achieve the result it seeks by simply employing people in an apparently permanent situation in March, then terminating them in November due to turn down. KU rejects the union's criticism of KU's preferred approach. 49 The employment of casuals for periods of nine months, an approach put forward by the union, is also rejected by KU. To do so would be an abuse of the concept of casuals. 50 Employees will not be forced into taking up fixed term contract positions. In terms of the positions, if there is a permanent position, it is not an intention to convert that into a fixed term position. But these things cannot be set in concrete for all time. If there are numbers of permanent positions in a centre which, for example, closes down, something needs to be done. KU did not wish to be placed in a situation where there is now a permanent position and that will have to continue as such for ever more. 51 The proposition by the Union that KU needs to demonstrate some economic need is entirely misconceived. What KU needs to do is persuade the Commission, on the basis of evidence and submissions, that the variation it seeks is appropriate and that it will deliver enhanced flexibility and productivity. 52 The continued viability of an employer is not the test when one is seeking to introduce flexibility and productivity. In national and state wage case decisions productivity and fairness are to the fore and it is not consistent with those concepts to have numbers of people employed over the summer months when demand is reduced by 20, 30 per cent, to a point where some of those people cannot be reasonably gainfully employed. 53 The term "ideological" has been used by the union in relation to some of KU's witnesses. What is before the Commission is a union ideologically opposed to the concept of fixed term employment on any basis at all and which will raise any arguments it can find in an attempt to dissuade the Commission from varying the award in the manner sought, not because those arguments or concerns are matters that cannot be negotiated or resolved, but because it simply wishes to place whatever obstacle it can in the path of the achievement of fixed term employment within KU's workforce. That was demonstrated by the fact that when KU sought to amend the proposal to make it clear that permanent employees would not be directed to be engaged in fixed term positions, something said on a number of occasions from the outset to be the concern of the union, counsel for the union opposed the application to amend. The union opposes amendments designed specifically to address the concerns it has raised. It is a position of total opposition, no matter how far KU is prepared to go to meet its concerns. 54 To the extent that the Commission forms the view that temporary or fixed term employment should be permitted, but considers there is some force in the concerns raised by the union's witnesses, to the extent that the application even as further amended does not satisfy the Commission in relation to those concerns, it is open to the Commission to give a decision in principle in favour of the concept and to direct the parties into conference with a report back, and if necessary, determination by the Commission on those particular matters. The union was ultimately driven into conceding that that ought to occur if, against everything it had put, the Commission took a different view. Consultation with the union can only really take place if there is a ruling from the Commission that fixed term employment is appropriate and that the parties work out the detail. Ms Lowson indicated if that was the position the union would be sensible about that and engage in that process. 55 In relation to the submissions of the Labor Council, KU entirely rejected the opinion expressed by Mr Christodoulou as to sub-cl (i) of the proposed cl 4A that KU can "recommend, could possibly harass, could possibly pressure existing employees into a fixed term employment but they will not direct". On the issue of potential harassment KU has demonstrated its bona fides by amending the provision to make it clear it will not impact on permanent employment. That amendment was also opposed by the union. 56 A number of important awards which cover large number of employees across a range of industries - storemen and packers, transport, retail, steel, restaurants, clubs, security, including some to which the union is a party, do not restrict fixed term employment. Amongst others is the Health Employees Conditions of Employment (State) Award, an award in the public sector that covers tens of thousands of employees in hospitals and area health services. The sort of abuse of fixed term contracts, dealt with by Cambridge C in Clark v Mid North Coast Health Service (unreported; 98/4263; 1/10/99), would not be available under the proposal put forward. If that was abused in that way, the Commission is entirely capable of effecting a remedy. 57 In relation to the Pay Equity Report and reliance placed on that, that Report was very important and documents a very important exercise in this Commission. It is too important an issue to be misused and it is misused in the submissions of the Labor Council and of the union in this case. This application is not about remuneration, it is about a quite common, quite unsurprising form of employment. On that point one of the factors which makes this case "special" is that it involves an employer seeking the Commission's endorsement for a form of employment which is common in many industries governed by awards of the Commission. It has nothing to do with under remuneration of female employees. Submissions - Union 58 Ms Lowson, on instructions, placed on record that to the extent that KU says it has responded to concerns of the union in its amendments to its application, those concerns have perhaps been inferred from matters that have arisen in evidence, but do not reflect any attempt by the union to engage with KU to improve its application, because the union would not want any inference to be drawn that it has in some way done anything other than oppose this application. 59 The applicant appeared to rely on the following issues in support of its claim: (1) fluctuation in child care numbers, (2) economic necessity (3) insufficient work; not gainful employment and (4) impact on employment. 60 Having regard to the evidence that has been brought by the applicant in support of its claim, the provisions of wage fixing and the Special Case principle, the public interest test set out in s 17 of the 1996 Act, and the ordinary rules of litigation as to onus in arbitrated proceedings, the Commission would not grant this application. 61 The union's primary submission is that KU, having come to the Commission claiming the need to vary the KU Award, has not discharged the evidentiary onus it bears. The Briginshaw v Briginshaw ( (1938) 60 CLR 336 at 362) test is applicable in these proceedings. Whether or not Briginshaw applies, on the balance of probabilities the application has not been made out. The evidence simply is not there. The application should fail on that basis. 62 To the extent that there is evidence, there is only evidence in relation to some eight work based centres. The claim must fail to the extent it was intended to apply at other centres. 63 The respondent's position is that the current award provides sufficient flexibility. Nothing has been put forward by KU to precisely explain why it is that the provisions of the award would not adequately address the need for flexibility which it says it has. 64 The clause sought by the applicant is really of a completely different nature to the work contemplated in the existing provisions, which contemplate specific periods of engagement to cover specific absences. What the applicant wants is a capacity to employ persons at the same child care centre year after year after year without paying them for periods of time at KU's convenience, whether that be over the Christmas break or the July vacation period or any period whatsoever. 65 In order to be successful in the claim, KU would have to indicate some sort of economic need for the variation or perhaps would have to indicate some off-setting benefits to the employees, given the nature of the application. 66 What is the economic necessity to have this provision when the applicant is successfully able to tender for contracts under the current award terms? The absence of those contracts in evidence means the Commission has no evidence about the economic issues which allegedly arise in respect of those contractual arrangements. To the extent that this employer is relying on economic need to introduce this provision into the award, the same high standards contemplated by principle 14 in relation to a claim of economic necessity, as demonstrated by the vigorous approach in AMIEU, WA v WA Meat Commission [(1993) 49 IR 104] should be applied. 67 The application itself has a number of difficulties. In cl 4A and (a)(i) and (ii) it provides that if the break in service is for more than three months, then employees shall not be able to carry their sick leave accrual and their long service leave accrual from engagement to engagement. However, KU has produced no evidence whatsoever as to whether the three month break in service is more than or less likely to operate to exclude or include employees in this benefit. There is nothing to prevent an employer manipulating the terms of engagement to ensure there is more than a three month break between periods of employment so that those employees do not receive the benefits of the clause, and then employ those persons as casuals as required. 68 The essence of the fixed term contract employment application is a lack of availability of work in certain periods of time. The evidence is that in fact work may well be available and work has been made available to persons who have been engaged on fixed term contracts, eg Ms Bassili who worked two to three weeks in casual employment. 69 The applicant suggested it intended to keep permanent staff with some temporary support staff. This is not reflected in its application. KU has not produced any figures to demonstrate what it says would be a satisfactory establishment of core versus temporary staff for a fixed term contract. 70 The variation would mean a significant diminution in the terms and conditions of employment of child care workers. The sort of losses that an employee would undergo includes specific losses of income over a period of non employment. There is loss of entitlements to redundancy, loss of accrual of sick leave benefits and long service leave benefits. In addition to those specific losses, there are non specific losses. The question of insecurity is a significant matter, eg the evidence of Ms Failla and why she would not bother applying for a loan in circumstances of fixed term engagement. 71 There is the question of status for persons involved in this industry. Permanent employment carries with it, whether part time or full time, a certain amount of status for a person, a certain amount of security. Fixed term work is appropriate in the limited circumstances that arise in the award currently. It is not appropriate that fixed term employment should become the norm. 72 There is no evidence to show why KU cannot employ permanent full time or other sorts of staff to cater for any extra demand. The inference is that the only reason that fixed term employee contracts is sought is it will involve greater profitability to KU in respect of those children attending. It is simply a sham to suggest that this contract provision will by itself create employment, which appears to be the second basis on which KU has brought this application. 73 The union, like the Labor Council, concedes that there are fluctuations in enrolments. However, there is no evidence to demonstrate the links between the income derived from children attending child care centres; the link between fluctuations in child care numbers and staffing requirements established by the child care regulations; the steps taken to manage fluctuations in the uptake of child care places and the anticipated application of the fixed term employee variation so as to address the alleged overstaffing arising from the fluctuations in child care numbers. To the extent these are issues which could be managed by KU, employees should not have to bear the burden. 74 The whole of the evidence such as that of Jane Binnie demonstrated that fluctuation in child numbers is not necessarily even as great as that relied upon by KU. Hers is credible evidence that the Commission would be entitled to rely upon in its entirety to find that if there is a problem of fluctuating numbers it is a management problem. It is not a problem that needs to be addressed by so-called flexible staff. 75 Miss McAuliffe gave evidence about how TAFE centres managed fluctuation in child care numbers. There is nothing in the evidence suggesting the same could not be done in KU centres. Staff take leave, some centres offer vacation care and this covers the staffing. 76 Overall Mr Thurston's evidence was a drive for cost effectiveness. 77 Where evidence shows fluctuations on a week to week basis, Ms Coad's evidence shows that a reduction in numbers does not necessarily equate with a reduction in income. Therefore, it does not mean KU has an economic viability problem. 78 The material tendered in July and November of 1998 was not updated by the applicant during the course of the proceedings. Indeed, the inference to be drawn from Ms Underwood's evidence on 29 October 1999 is that there has been some degree of overall improvement in respect of child care services. 79 Further the fact of fluctuations of itself does not mean that a child care worker may be recognised as seasonal. There is nothing in the evidence to suggest that child care work has somehow been transformed from regular work to seasonal work. (I note that the reference to employment of staff in children's centres as being "on a seasonal basis" was made in a letter by the Acting General Manager of DOEAT, and was not a term used by KU.) 80 The second part of the applicant's claim is that during periods of lower attendance of the children at child care centres there is insufficient work for child care workers to perform. The evidence is that there is no need for KU to invent the work. Evidence was brought by the respondent to the effect that these periods of time are gainfully used, not directly in care of children certainly, but in relation to matters that are essential to the good management and welfare of the child care centres. The evidence is that a well-run child care centre that offers vacation care, is able to provide sufficient work and indeed is not able to meet the demands for vacation care that are brought, because of the need to provide leave during the downturn period. 81 The context with this case is that one employer in the whole child care industry is claiming to have a need for fixed term employment. The effect of the fixed term employment could be that persons would be out of work for periods of time without income. 82 The union is not submitting that this issue can be addressed by saying that persons during the period of non-employment by KU should be paid half pay, nor is it suggesting that a proper approach is to introduce a stand down clause or to put a stand down clause in the award with half pay. 83 The union says that there is a history of cases which indicates that fixed term employment is a source of industrial grievance and the Commission would have to be well satisfied as to the need to introduce such a clause in the KU award before it did so. 84 The union also relied upon two decisions of a Full Bench of the AIRC: National Tertiary Education Industry Union v Australian Higher Education Industrial Association [(1997) 74 IR 326] and the later decision which in form was the settlement of an order to give effect to a decision to make an award (Print Q0702; 11/5/98). In those cases there were six categories and six categories only where such employment was found to be appropriate. 85 The Commission is bound by s 10 of the 1996 Act. The fact this is a variation application is not excluded by s 10. The Commission must be satisfied that this variation involved fair and reasonable conditions of employment. The respondent says it does not in that it is unfair, it is unreasonable and should not be granted. 86 The second prohibition in Regulation 5(B) of the Industrial Relations (General) Regulation 1996 would apply quite possibly to the fixed term employment provision that currently exists in the parent award with regards access to the unfair dismissal provisions. If this variation were granted that provision would seem to make it more difficult for a person engaged on contracts of less than six months to have access to the unfair dismissal provisions, e.g. someone in Ms Bassili's position in a three month period. 87 Cooper v Darwin Rugby League [(1994) 57 IR 238] considered the particular provisions of the Federal jurisdiction and as to whether a fixed term contract which also had a notice provision was excluded from remedies as to unfair dismissal by those regulations. Northrup J found it did not. The complexities arising out of the contracts of this sort and their possible interaction with the unfair dismissal provisions can be seen to lead to some difficulties. 88 In conclusion employer flexibility is being sought at the cost of employee security; savings to the employer means a loss to the employees. The Commission will find that there is not sufficient evidence to make out the claim at all, especially in the light of the contradictions in it. Even if the Commission was satisfied that there was some evidence, then when this is balanced against the potential detriment against employees, the Commission would not grant the application sought. Submissions - Union - In reply 89 As to the dispute notified by the union in respect of termination of employment of two employees at the Ultimo child care centre, Ms Lowson acknowledged that to be a subsidiary matter. The thrust of the respondent's submissions were to raise an issue as to how the Commission might assess KU as an employer and how KU may implement this award variation if it were to be granted. It is one matter the Commission was invited to take into account, as with a great many matters, and it is of limited relevance but nevertheless important. Mr Murphy had suggested the union's submissions somehow indicated that there had been a finding of victimisation. Of course, there was no such finding. The union took a view about a connection between the dismissal of employees and the filing of evidence which was rejected by KU. The respondent accepts there is no finding by the Commission concerning victimisation, prejudice or duress, or any link between termination and the giving of evidence. 90 The union's position is that it does not see that the applicant has demonstrated the need, nor does it see a particular need for a fixed term contract with all the loss of benefits to employees that would otherwise accrue from continuity of service with one employer. Given its position it is therefore logical for it to have opposed applications by KU to amend and no adverse inference can be drawn against the union in that respect. 91 In the overall scheme of things there are many flexibilities available which can be used and are less detrimental than a fixed term contract. Amongst those flexibilities is the use of casuals, but the union does not say that is the only flexibility available. 92 The union says the matters that were broadly considered in the Pay Equity Inquiry are irrelevant but asks whether the change of the sort being sought by KU would be inserted into a male-dominated award without any thought of compensation to employees. 93 The union put an alternative submission, but only if the Commission finds that it is satisfied that the applicant has established the need for some more flexible employment arrangements than those already available under the KU and parent awards. The union has conceded that if the Commission finds the application made out that the union should be directed to confer, subject to exercising its statutory rights. 94 In those circumstances the union supports any restrictions that the Commission would see as being appropriate, whether or not they are ones where a concession has been made by KU which could apply; for example, that the term of the contract be reduced from two years to one year or some lesser amount. The union also says the Commission should take all steps to minimise the impact of such flexible arrangements on employees, and to that end - and it is very much a submission in the alternative - the union would endorse the directions of the parties to confer in respect of introducing limited amounts of more flexibility in the award. Such flexibility should not involve fixed term employment contracts or any other flexibility that would involve lost continuity of employment, and also that such flexibility would preserve, as far as possible, the financial position of employees in the context of that increased flexibility. Submissions - Labor Council 95 Mr Chris Christodoulou made submissions on behalf of the Labor Council of New South Wales in support of the position of its affiliate, the Australian Liquor and Hospitality Miscellaneous Workers' Union, that this Commission should reject the proposal put forward by the KU Children's Services to introduce fixed term employment. 96 The Labor Council had been appraised of the contents of the awards applicable to the Kindergarten Union, and it was its view that those awards together already provide KU with ample flexibilities in dealing with what would be regarded as any fluctuation in enrolment numbers. 97 In the view of the Labor Council, these flexibilities already tip the balance in favour of the employer. The proposal by the KU, if agreed to by this Commission, would be unjust and unfair because it would add to what is already generally the child care workers' precarious employment and, in particular, the bargaining position that they are in. 98 Australia already has experienced one of the highest increases in casual and temporary employment work in the OECD, a submission supported by an extract supplied from a book by the Australian Centre for Industrial Relations Research and Training entitled "The Australian at Work". The Labor Council fully endorsed ACIRRT's comments on the effects that casual or temporary employment place on the employees: job insecurity, psychological pressure and limitation of future options because of the financial uncertainty. 99 The proposal put forward by KU is both unconditional and non-restrictive in its application, with the result that each and every new employee respectively of KU could end up with a fixed term employment contract. There is nothing to limit its application in any way. Fixed term employment could replace permanent employment as the pre-eminent form of employment by KU in the future. 100 The position of fixed term employment would have further imbalances by the ability of the employer to terminate the employee during the fixed term of employment (para (f) ) and also by para (i) which states that permanent employees will not be directed to be engaged in fixed term positions. Now, what that is basically saying is that the KU can recommend, could possibly harass, could possibly pressure existing permanent employees into fixed term employment but they will not direct. Certainly that is of concern. 101 Labor Council's view is that the proposal provides the employer with so much flexibility, including the ability to have absolute power in determining a person's ongoing employment future, that the proposal will seriously disadvantage the employees of the KU for a number of reasons. There is a relatively low unionisation rate in the industry and it is recognised as in part being one factor possibly in contributing to the relatively low pay in the industry (see Pay Equity Inquiry: Vol.1, pages 157, 177, 178). It would potentially weaken what is already a very weak bargaining position for childcare workers. Childcare workers do not readily take industrial action to improve or protect their conditions of employment because of those other environmental circumstances in which they work. 102 If KU's proposal were to be accepted then it is inevitable that this provision will flow through to the rest of the childcare industry. KU, which is one of the biggest employers in New South Wales, would be able to obtain such a flexibility and then be at a competitive advantage to other childcare centres, including the private sector in New South Wales. 103 The proposal, as indicated, has a potential to be abused, in a sense that workers would really have no certainty of ongoing employment once their fixed term employment discontinued. There may be ongoing work, but they are not the persons chosen to be given that ongoing work, because in KU's own proposal, once an employee's fixed term is up, that person needs to reapply for ongoing employment. 104 Although the employer might attest that it did not intend to introduce all these fixed term employment arrangements in the future, there is nothing in the proposal to suggest that it cannot. They do not limit the numbers of people that can be used in their centres with this proposal. 105 [At the conclusion of his submissions, Mr Christodoulou was advised by Mr Murphy of two further proposed amendments to the application going to the minimum engagement period and the treatment of fixed term employees as permanent employees if applying for permanent positions. Mr Christodoulou said that that information did not change Labor Council's mind about the position it had put forward.] 106 In relation to those submissions, I note that the Labor Council supported its affiliate, the respondent union, in its opposition to the application. The majority of its submissions were generalisations, not directed to specific evidence in these proceedings, one example being the Table attached to the ACIRRT publication. That Table in fact discloses that of all of the industry divisions there identified, the division covering child care work, namely community services, has between 1984 and 1993 experienced the lowest rate of growth of casuals as a percentage of total employees (less than 1% over 10 years). 107 The list of awards added, over objection by Ms Lowson, to Mr Murphy's submissions was produced in response to submissions made by Mr Christodoulou, in which he asserted that "as with most awards, the applicable KU Award provides for casual and part-time employment as well as a [sic] fixed term employment in certain defined circumstances". I did not find that reference helpful and the need for KU to reply to it with a list of awards that did not contain provisions as to fixed term contracts, resulted in an unproductive use of the Commission's, Mr Murphy's and Ms Lowson's time. Consideration 108 Ms Stanko's submissions dealt with the background to this application by KU and with the rationale for KU seeking the option of an extension beyond the "temporary employee" provision in the parent award to "fixed term employees" in the KU Award. 109 Evidence was advanced by KU directed to substantiating its claim that the ability to employ persons on fixed term contacts would overcome problems it had experienced for some years in being able to employ the number of staff that could be appropriately adjusted to cover decreases and increases in the numbers of children enrolled, with particular regard to the TAFE, university and work based centres. Its position was that centres are staffed to the anticipated levels of enrolments. When those children do not enrol the centre is operating at a deficit to the extent that it is overstaffed. If KU had some level that it could move to once the enrolments were confirmed, it would not end up overstaffed. It is up to KU to match its management and staffing of the centre to the demand. 110 Currently when the numbers of children attending in a centre are greater than the regular attendance pattern, KU accommodates that need by putting on additional staff. 111 Award provisions currently used to cover the low utilisation periods at centres, particularly the long period between November to March are those directing the time annual leave is to be taken, the "stockpiling" of RDOs and the standing down without pay of employees who have insufficient leave entitlements to cover 4 weeks annual leave. 112 According to Ms McAuliffe, TAFE centres adopted similar measures to those adopted by KU when, during TAFE breaks, the number of children was reduced quite significantly: staff take all leave, including annual leave and RDOs as well as any leave accrued in lieu of overtime worked. 113 The position of the union was and continues to be, one of absolute opposition to the fixed term employment provisions sought to be included by KU in the award. Even the union's very reluctantly put alternative submission seeks that, should the Commission find that KU had established some need for the variation sought, the parties be directed to discuss flexible arrangements other than fixed term contracts. That opposition can only be to the variation as sought, not to a position in principle, because the parent award already includes a provision for "temporary employees" in certain specified situations. KU has availed itself of those provisions in the course of its operations. 114 Clause 3(iv) of the parent award (297 IG 874 at 876) is in the following terms: (iv) Temporary Employee - (a) Means an employee engaged to work full-time or part- time for a specified period which is not more than two years but no less than 20 days. (b) Such employees shall be engaged solely for the following specified purposes: (i) to replace existing employees proceeding on annual leave, maternity leave, long service leave, workers' compensation or leave without pay; (ii) to occupy specially funded positions; (iii) to occupy positions approved by the Department of Community Services which vary a centre's licence. In relation to stand downs, that same award provides, in cl 4(ii) that: (ii) Payment During Vacations - Notwithstanding the foregoing provisions, where an establishment is closed during a vacation period and no work is available, an employee shall be paid the ordinary rate of pay during such a period, provided that during the Christmas vacation only an employee with insufficient credit of annual leave to maintain the ordinary rate of pay during the said vacation period may be stood down without pay for a maximum of four weeks. External Factors affecting the Operation of Child Care Centres 115 Ms Underwood deposed that in order to comply with Government funding requirements, centres must be open for a minimum of 48 weeks per annum. This is to ensure that the parents are eligible for child care assistance. 116 Child care assistance is the government funding which helps the parents meet the fees. It is paid to the centre on behalf of the parent. The parent then pays a reduced fee. It is means tested and it is created so that students, for instance, may obtain maximum benefits because typically they have no other income. In the case of TAFE and universities, because the academic terms total approximately 36 weeks per annum only, technically the services do not need to operate 48 weeks a year but are bound to do so in order to meet the requirement that enables the students to access child care assistance. Therefore when the students are not using a service it cannot be closed. It has to be operational. Ms Coad described the Wattle Lane centre, a work based centre sponsored by a newspaper for its employees as "unique" in that it was required to be open for 52 weeks of the year. 117 The Centre Based and Mobile Child Care Services Regulation (No 2) 1996 (the Regulation) provides in s 34 as follows: 34 Staff to child ratios (1) The licensee of a service must ensure that the ratio of primary contact staff to children being provided with the service is: (a) 1:5 in respect of all children who are under the age of 2 years, and, (b) 1:8 in respect of all children who are 2 or more years of age but under 3 years of age, and (c) 1:10 in respect of all children who are 3 or more years of age but under 6 years of age. (2) The licensee of a service must ensure that, on and after 1 June 1997, at least 2 persons who are staff (whether or not primary contact staff) of the service are present on the premises of the service whenever children are being provided with the service at the premises. 118 As can be seen from the above, it is the ages of the children attending which will determine what staff profile in the first instance that KU must have. A second factor affecting that profile will be the levels directed by the particular sponsor. 119 Ms Coad explained that as children move through a service and become two, three, four or five years all the ratio of staff requirements change. Fixed term contracts could be utilised, for instance, if a large number of under twos who were 20 months old, would turn two during the year. In that case, the centre would not want to employ someone for a long period or permanently to be with the younger group, because when they turned two the ratio of staff requirements would change. Staff needs would again change when they turned three. Evidence 120 The union criticised the evidence adduced by KU, and, in particular, the evidence provided in schedules as to the numbers of children attending various child care centres. The data provided by Ms Underwood related to some eight out of eighteen services, because KU had tried to address a cross section of such services. There was difficulty in obtaining the raw data because enrolments had not been as closely monitored previously as they were after mid 1997, at which time changes to funding had made the likelihood of vacancies and the financial management of services, as she said, fairly critical. The figures in her tables, being averaged do not give a really clear picture of variations such as that some of the children are only in for half a day and not a full day. 121 Ms Underwood's evidence was given over a lengthy period of time, her statements being dated 30 April 1998, 5 May 1999 and 23 August 1999. At the beginning of that period waiting lists no longer existed though they had in the past. In her later evidence, waiting lists had again been reinstated. 122 The information supplied by TAFE relating to 11 centres also presented a snapshot of enrolments, rather than attendances, for week five of each semester from 1996 to 1998. 123 In my view, the tables tendered by KU in relation to attendances at a number of child care centres provide an indication, or, as Ms Coad said, a snapshot, rather than an exact picture of the enrolments on a day to day or even on a week to week basis. They form part of the mosaic of oral and documentary evidence I have taken into account. TAFE/University Centres 124 There are eleven TAFE Institutes in New South Wales altogether, with a training network which is also considered an Institute. Eight of those Institutes have child care centres. There are only twenty child care centres located amongst the 120 TAFE college campuses. Students from any campus, in or across Institutes, can access those centres. 125 The university and TAFE centres cater primarily for children of students. If there are places still available, they can be offered to children of staff. If there are still vacancies, those vacancies may be offered to people in the local community, a situation that occurs particularly when vacation care is being offered between semesters. In general, although there are some notable exceptions as the evidence of Ms Binnie showed, offers to the community do not fill many of the vacancies. 126 In relation to Ms Coad's evidence, the attachment to her statement clearly shows, when compared with a community based service, a significant drop in utilisation in the university day care centres at certain periods. She said that in the university child care centres there tended to be a high staff need throughout the year, then that drops throughout the four month period from November to February. 127 Mr Thurston's evidence as to the pattern of usage at TAFE child care premises, and that there was insufficient work for all employees at certain times, confirmed that of Ms Underwood. He also described the difficulties in attracting children from the community to fill vacancies including the fact that TAFE students are able to book their children for half a day only. 128 Whether or not KU can offer vacancies to the community to take up the slack as to numbers of children attending a centre, it not a decision KU can make independently of the wishes of the centre's particular sponsor, whether that be TAFE, university or the relevant corporate employer. 129 In my view, it is not so easy to keep the numbers of children up by recourse to community placements in TAFE or university centres, and so be able to retain or employ more staff, as was suggested by the union, when the number of placements from the primary groups serviced drops. Community places are only available to maximise income when all primary users' needs have been met. They can only be guaranteed for short periods which often does not suit the needs of community users, who are often working parents. 130 KU's evidence as to the pattern of utilisation at KU centres was similar to that given by, or through, Ms McAuliffe and Mr Thurston as to centres operated directly by TAFE. That evidence from TAFE was that "enrolments are high at the beginning of each semester and tend to decline towards the end of the semester as parents complete courses and sit for exams. Attendance is very low during TAFE breaks and non teaching weeks. Many centres offer vacation care for school aged children during these times with reduced staffing and consequently reduced capacity". 131 TAFE and universities have similar cycles. There are lecture weeks, there are marking weeks, there are stuvac-type weeks and exam weeks as well as close-down weeks. The lecture periods are the peak times and they do not exceed the 36 weeks of the academic year. It was said that the peak times for TAFE particularly are very predictable and very precise. 132 TAFE has some 16 weeks down time, that being four weeks of close down, eight weeks of vacation care and four weeks of low times. KU's experience was that for that 16 week period students or the lecturers make very little use of the child care provided by KU. KU operates vacation care during some of the down periods. 133 TAFE centres typically are the ones that would end up with overstaffing i.e. a higher ratio of staff to children even by KU's standards. That is because TAFE has a lot longer downtime than many services and there are particular times in the year when TAFE students are just not in attendance. 134 However, it seems that further changes that could affect staffing are already in train. Ms McAuliffe said that even now it is not a blanket rule that TAFE child care centres close down over Christmas. Because some courses are running during TAFE breaks, centres may be required to be open in the January period. She said that TAFE is actually moving to a 50 week year. When and how that occurs will depend upon the requirements of each Institute and how they organise their classes. 135 There is also another layer of variability that affects staffing, that layer being based on the profile of students who enrol in TAFE courses, so that even from term to term the enrolments can vary and can be unpredictable. TAFE courses can be as short as eight weeks, while others may extend over two years. A number of TAFE courses have lectures only for the morning and not the full day. In TAFE services, the centres provide half-day care for children which complicates the staffing levels. Enrolments in the morning sessions are far higher than those in the afternoon. 136 TAFE students are charged on a sessional basis. A session is a morning or an afternoon. TAFE policy actually restricts the amount of child care that students can use to around half an hour outside of lecture times so that if their lectures finish they are required to collect their children. It is not an option for them to take a full day if they do not need it for their lectures. 137 For enrolments to such centres, people can just turn up on enrolment day. They come to the centre and enrol in the centre when they enrol in their course. 138 There are difficulties trying to forecast use of a centre. KU does survey the existing users of a centre at the end of a TAFE year, but it can only survey those families who are using the service at that time. Because TAFE has such a high turnover of students, KU's experience is that there will be a very few students who are returning and therefore KU can only survey a small part of its potential users. Even then, those students who are looking to enrol might be doing other studies or applying for admission to TAFE, not knowing whether they have been successful. 139 The Acting General Manager of DOEAT advised that: In relation other aspects of the information specified in the above summons. I wish to advise that staff in TAFE Children's Centres other than early childhood directors accrue rostered days off and are required to take all leave during TAFE breaks. The majority of staff in TAFE Children's Centres are permanent employees. In some circumstances temporary staff are employed full time or in a job share position. There are currently two centres which employ staff on a seasonal basis to accommodate the fluctuating demand in term time and TAFE breaks. Staff may be employed on a fixed term through the Jobs Education and Training Scheme which is funded by the Commonwealth. The scheme provides funding for child care for single parents participating in education or training. 140 Ms McAuliffe said she was not familiar with the two centres mentioned above saying that she did not necessarily know how the staff are employed at each particular time. That was an Institute issue and did not come through her section. The Institutes were responsible for recruiting staff for the child care centres. 141 Ms McAuliffe's understanding of "temporary staff" as employed at TAFE child care centres, was that when a vacancy occurs, TAFE would employ someone on a temporary basis until that position was filled on a permanent basis. Temporary employees also covered absences of staff on sick or maternity leave. Such temporary employees could also be employed when a centre may initially be set up at half capacity, and then as student demand increased, the staffing levels may be increased. Until those levels were finalised, temporary staff would be employed. 142 I do not accept the union's submissions that the situation at KU child care centres is the same as at other TAFE centres, that the evidence was that TAFE did not need fixed term employment like a KU centre and that if TAFE does not have that need neither does KU. 143 The evidence of Ms McAuliffe as to the different patterns of operation of various TAFE Institutes explains how Ms Binnie's experience at Carinya could differ from that of Mr Thurston and of the TAFE centres managed by KU. Such evidence gives further support to KU's claims that because patterns of usage vary so much and are so difficult to predict, a further option of employment is necessitated, namely that of "fixed term employment", to cope with that unpredictability. AMEP Centres 144 The difficulties for KU in staffing the six AMEP centres managed by KU was the subject of evidence from Ms Underwood: … 10. The AMEP Program for english language are no longer scheduled as blocks of ten week sessions but vary from one service to another. This makes it very difficult for KU to plan for staffing levels. 11. On average, the parents attend classes for 20 hours per week. Usually, this is 4 hours per day but may vary at each service. 12. All parents are entitled to a maximum of 510 hours of tuition and child care or whatever is needed for parents to reach a level of 'functional english'. 13. As far as the provision of child care is concerned, this means that a parent could utilise 510 hours or only 100 hours. [or none or any number up to 510 as determined by the parent.] 14. This is a variable that is very difficult to assess. KU needs to be in a position to exercise flexibility in its staffing levels in order to accommodate this need. 15. Not all students of the AMEP Program require child care. This further variable contributes to the need for KU to be flexible in its staffing levels. 16. The term starting and finishing dates vary each year and from Centre to Centre dependent upon the particular educational needs of the families enrolled at the time. 17. Unlike a 'typical' child care centre, AMEP Centres are expected to provide multiple sessions of care per day to match the english language classes provided. 18. Typically in other mainstream centres, the structures are based around only 1 or 2 sessions per day.41 … 20. The ACL organisation determines the language tuition provided by the AMEP Program in the provision of tuition for parents. 21. KU does not have any in-put into that program. 22. This means that KU is provided with a timetable of classes running at a particular centre with the number of child care places needed for that service. 23. The notice given to KU is very short. Sometimes, this can only be 5 days before the commencement of courses. Again, this means that KU must be in a position to respond quickly to those changing needs. … 28. Centres have a core of permanent staff which is complemented as required with limited term appointment staff. The temporary employees are not necessarily required from one term to another. 29. Permanent staff are generally attached to one centre and are not required to transfer to other centres. 30. On the other hand, limited term appointments may be required to move from one centre to another to meet the needs of the service. 31. The reason for moving limited term appointments between centres is to accommodate the differing language and cultural requirements of each service. For example, it may be that centre A in Course 1 requires a staff member fluent in Italian. For Course 2, there may not be any parents/children of Italian background but there might be a need for a staff member of Spanish background. In that case, it would be necessary to change the mix of staff to meet those requirements. 32. Usually, the children in care do not speak any english. 33. This is often the first time that the children are in a formal child care setting or been away from their parents. A number of the children who attend the Child Care Centres come to us as Humanitarian/Refugee Children, meaning they have experienced various degrees of torture or trauma. 34. In order to ensure the highest quality delivery of service to the children in AMEP centres, the staffing ratios are higher than in community based centres or even work based care… 35. KU cannot afford to employ all staff in AMEP on a permanent basis and would not be able to gainfully employ them due to the on-going changing needs of the english language program. … 37. Not all permanent staff are full-time employees - some work between 20 and 30 hours per week. 38. From course to course, the hours of work of permanent staff vary subject to the requirements of the education centre. 145 Ms Underwood anticipated that KU would be employing more people on fixed term contracts in AMEP centres than in TAFE or university centres. That was because of the peculiar needs of that service some of which are explained in paras 32 and 33 above. 146 Ms Bassili's evidence in certain respects, confirmed and complemented that given by Ms Underwood and Ms Coad. At the beginning of 1999 she had, prior to the start of the AMEP programme, worked as a casual for 2 weeks because at that time the centre was uncertain as to the number of children who would be enrolled. Not all children on the waiting list turned up. It was generally in that period that she would be advised if she was to be employed during the coming term. 147 Ms Bassili had been employed by KU for varying periods in each year from 1990 onwards. Prior to July 1999, she worked in accordance with 4 limited term contracts per annum. She did not get paid for about 10 weeks each year. Following a change to AMEP funding arrangements in July 1998, the periods of the contracts were changed from the previous 10 weeks to 6 months, running from July to December then January to June. It seemed though, that the 2 weeks casual work still preceded a decision as to whether she would be employed on one of those contracts. 148 In 1993 Ms Bassili had been offered employment at Fairfield when the number of children at the Blacktown centre decreased. (That was in accordance with KU's policy as reiterated many times in these proceedings, that termination of employment when numbers of children decrease in a particular centre is a last resort.) 149 In relation to the described changes within AMEP, I note that such changes would, in my view, reinforce KU's case that it needs flexibility. Work Based Centres 150 Ms Coad described work based defence forces child care centres, transferred only as recently as January 1999 to KU management. The number of children in the centres can fluctuate quite markedly in accordance with the posting cycles of their parents. Postings occur over a three to four month period in the first part of the year. It is only after the posting levels have settled down that KU can examine its longer term staffing needs. At the time of giving her evidence (19 March 1999), Ms Coad said KU was still investigating why the pattern of enrolments in that period had been so erratic. 151 KU's approach to staffing in that case was very similar to that described by Ms McAuliffe as being used in new TAFE run centres: starting out with a core base of staff and adding, as needed, casuals (the latter it was stated not being acceptable to parents, staff and children) until, after some stabilisation of number, the employment of more permanent staff. 152 In a work based centre, the sponsor dictates the number of places to be available and the number of children in any particular age group. The numbers of children and the mix of ages can change at very short notice as the sponsor's employees come and go. In such cases, if the ratio of staff/children required by the Centre Based etc Regulation is affected, KU does not have the option of denying access to child care for any additional children, as a community service could, but must, if necessary, employ more staff to provide the necessary service. 153 Ms Coad said what she did as the director at Wattle Lane was to assess the needs for the year, looking at the age range of the children and anticipating enrolments from the waiting list. She would then know the high needs of the year and its time period. Knowing how the children would move through the service during the year, she would be able to predict the period of time when she would either need extra staff, or to downsize the staffing profile. 154 Ms Underwood also noted that it is clear that there is a changing work pattern where there is a higher incidence of people working part-time which means that parents do not require child care on a full time basis as had been the case in the past. This impacts upon the levels and nature of the services needed. To meet those changes KU needs maximum flexibility. Typically, work-based services have lower enrolments on Mondays and Fridays. Gainful Employment 155 The union disputed KU's contention that not all employees could be gainfully employed during the 16 weeks down time at TAFE. Ms Underwood's definition of "gainfully employed" was that employees were fulfilling a necessary task that falls within their core job description. The union suggested that during down time, employees could do such tasks as cleaning, preparing resources, filing, tidying the centre or be sent on training courses. 156 Ms Underwood addressed the suggestions advanced by the union's witnesses. The trained staff are responsible for maintaining developmental recording and for writing of programmes for the group of children for whom they are directly responsible. Childcare workers, who are the unqualified staff, implement the programme as a team approach and they also give feedback to the trained person in terms of observations, or comments, for the trained person to then evaluate and interpret. 157 When children are not in attendance, or the numbers of children attending are low KU has focused on trying to maximize the use of staff time. The tasks KU would have for them when enrolments were low would be tasks e.g. cleaning, sorting equipment or other domestic tasks, that were not the core responsibility of their role, that being to care for children. They may prepare resources, ie they may cut up paper, they could tidy cupboards. At times when enrolments are low, KU also requires staff to take leave to the extent that their leave is possible to be taken. 158 In KU centres the majority of the cleaning is done by contract cleaners who attend on a daily basis. Tidying cupboards is not something a cleaner would normally do because the staff will screen where they want the material and what material they want. The other cleaning that is performed by the centre's staff mostly relates to ongoing cleaning of the environment where children are playing, or where there are nappy change procedures (that also includes making sure the environment is clean from one nappy change to the next). However, food preparation, lunch, craft activities and such cleaning activities relate to the presence of children attending the service. Obviously with less children present there are fewer such tasks needing to be undertaken. 159 Filing duties are really the clerical responsibility or the director's responsibility. A lot of administrative work is computer based, so there is not a lot that the child care workers are actually able to do. On that point, there is also a demarcation problem as to what award should they be under, what tasks are they actually performing. 160 During the quieter times at TAFE and university employees could be sent to training courses, but KU is still paying its staff, be they at work or at training. Ms Bassili, for instance, was sent by KU to do a 10 week course in 1991. The cost of training is added on to the cost of employment. There are not fees coming in to offset those costs. 161 I accept KU's contention that there are employees, who if permanently employed over 52 weeks of the year, would not be gainfully employed during certain periods eg the down times at TAFE and universities or the start up periods of TAFE, university and work based centres when enrolments have not been finalised and the numbers of children are uncertain and fluctuating. The union's submissions do not take into account the purpose of employment of the majority of staff who would most likely be offered fixed term employment, those being the unqualified staff. Employment Options - Employee Views 162 At present the relevant awards provide for permanent employees, temporary employees under certain circumstances and casuals. The advantages that Ms Bassili and Ms Failla saw in permanent employment, were access to such benefits as long service leave, maternity leave and payment for weeks they now do not receive payment because they are not employed for those weeks. The problem was that for the most part of their evidence they were being asked to compare the advantages of permanent employment as against fixed term employment, which was not what KU's application offered. When the application had been explained to her, Ms Bassili said that fixed term would be more beneficial to her than casual employment. That was because fixed term employees would be entitled to sick leave, RDOs, long service leave, and longer notice as to termination. She also expressed the view that fixed term employment would be better from the children's perspective, because the children get used to the one person and if they see that person for a long time they feel more secure within themselves. 163 Overall, Ms Bassili was in no doubt that, of the three options: permanent, fixed term or casual, she would prefer permanent employment. She has not applied for a permanent position within KU, because some years ago having raised the matter with an adviser, advice was given that permanents were not employed because the program was funded by the Immigration Department. 164 Ms Bassili at the time of giving her evidence could work up to a maximum of 5 hours per day over 5 days. The centre where she works is open between 9 am and 5 pm, the morning session being from 9 am to 1 pm, and the afternoon session 1 pm to 5 pm. She was happy where she was working and the hours she was working. She said that the permanent staff were lovely people and she felt really comfortable working with everyone. Her morale was low at times because she would just have preferred to have been permanent staff. The stresses at work she had referred to in her affidavit concerned the insecurity each year of not knowing whether she would have a job or not. After some consideration, Ms Bassili said that since 1990 she would have liked to work 25 hours, but not 38 hours per week, for 52 weeks a year. 165 Ms Stanko submitted that, on the evidence, Ms Failla might be an employee whom it suited to work on a fixed term contract. Ms Lowson strongly rejected that submission saying that it misrepresented Ms Failla's evidence. Whether or not Ms Failla found fixed term employment "attractive", to use Ms Lowson's word, she certainly found it preferable to working as a casual as she did in her last period of employment. In my view, where Ms Failla's evidence was of interest, was not so much in relation to her earlier working arrangements, but as to her feelings when she later worked as a casual. That occurred as an outcome of a dispute between the union and KU as to her then working arrangements. Whatever the earlier arrangements had been, they did not lead to the feelings of dissatisfaction she had when she worked as a casual within the terms of the award in a series of rolling 20 day casual contracts. In relation to that latter period working as a casual for a year at the Ultimo Centre, she said in cross-examination that she felt that there were problems because, as a professional she was trying as much as possible to perform as a permanent staff member, but as a casual she felt she had to justify herself in her job. She felt that other people saw her position in a different perspective. 166 I note that part-time work had suited her earlier, when she, of her own volition, had moved from permanent to part time work. At the time she left KU in January 1999, she would have liked to have been back in permanent employment, as her preferred option. Reduction of Conditions 167 The union claimed that to grant the variation would mean a significant diminution of the terms and conditions of employees, including specific losses of income over a period of non-employment. 168 Ms Bassili stated in her affidavit that she felt she was seriously disadvantaged financially as a consequence of her temporary status. In her oral evidence, she quantified that disadvantage as being $4,000 a year. She had not used a pen and paper to make her calculations, but thought, based on her hourly rate and the 10 weeks she did not work each year, it would be approximately that amount. It would seem that the serious disadvantage Ms Bassili raised really related back to a comparison made by her with permanent employment over a 52 week period as against her current fixed term employment. 169 Ms Failla said in her affidavit that she had not been able to obtain bank loans "because of my temporary status of employment". In cross-examination she confirmed that she had not made any such applications. 170 In relation to the union's claim that conditions for employees would be reduced should the claim be granted, I do not see that employees' husbanding RDOs and annual leave to take at the end of a period of fixed term employment, imposes hardship, as was claimed by the union, above any that is already allowed for by current award provisions. It is a sensible approach to personal financial management, made in the knowledge that at the end of the year they are going to be faced with periods without income. 171 That particular complaint of the union went directly to KU's refusal to employ people as permanents and then to make them redundant a few months later. In such cases, an employee would have no warning that thought might need to be given to the time leave was taken and furthermore, could have entered into financial and other commitments on the basis of having a permanent job. In my view, it is far better for employees to have such knowledge, and be able to make plans to alleviate the situation. I do not see that having that knowledge is a reduction in conditions for the employees. 172 Many of the union's arguments against granting the application such as the claimed loss of benefits of continuity of employment, are predicated on the basis that fixed term employment will replace full time permanent employment, and so enable KU to save costs. 173 Those arguments rest on a false basis. KU has disclaimed such an intention and put forward reasons to support that disclaimer. 174 On the evidence, to replace permanent employment with fixed term employment would be against KU's own interests. Ms Coad said that in her experience she had never had a really high need for fixed term employees. It would not be desirable to have a fifty:fifty mix of permanent to fixed term. That was for a number of reasons: a core staff is needed for continuity within the team; employees needed to know and to understand KU's policies, practices and procedures and to actually carry that knowledge through year after year. Such core staff were preferable to fixed term because the fixed term person, having acquired that knowledge, leaves and possibly does not come back. 175 On a similar basis, for her, as a manager, fixed term staff were preferable to casual employees because the time invested with a new staff member is a one-off period rather than on the frequent, even day to day, basis required when new casuals came in to a centre. That freed up time to deal with administration. The fixed term person added continuity for both children and staff, developed the knowledge of KU's practices and policies and had more of a team understanding, as compared with the casual who came on a day to day basis. 176 Ms Coad's comment "it's really hard to find where you [a casual] fit in" very much echoes Ms Failla's description of her feelings when working as a casual in accordance with the terms of the settlement of the dispute between the union and KU. 177 Ms Coad suggested a ratio of approximately 20:80 fixed term employees as against permanent employees. However, when asked to give an indication from her experience at Wattle Lane Child Care Centre as to what percentage she would have liked to employ, she said that it changed each year she was there because different children of different ages were enrolled each year. 178 Ms Underwood said it would be unlikely that KU would be engaging employees for as little as four weeks on fixed term contracts because of the administrative work load involved. Fixed term contracts require a lot of administration through pay roll and letters and KU would seek to minimise that administrative work as much as possible. Costs 179 In Ms Underwood's experience there is now a greater onus on KU to be accountable for labour costs and this has been more prominent since around 1994. The cost of labour in the management of centres is high in that child care is a labour intensive service. The labour cost is approximately 85 per cent of the total cost in providing the service. To date KU has retained all of its management contracts for the provision of work-based services, a fact on which the union based its claim that KU could continue to operate without the need for fixed term contracts. That submission might have more validity if the basis for KU's application was economic necessity. It is not. KU acknowledges that costs are of concern to it. As a prudent service provider it would be astonishing if that were not the case. 180 KU actually staffs its centres above the required ratios. It follows from that that when enrolments drop, the result will be that KU staffing is even more above the basic ratios laid down in the Regulation. If KU's concerns were purely financial, as the union appears to suggest, its first remedy would be very simple - bring its ratio of staff to children back into line with that required by the Regulation. That would result in fewer employees being needed with immediate consequent savings in costs. 181 Furthermore, the proposed clause is not likely to save costs, but it is more likely to increase them, simply by the fact that employees will have aggregated longer periods of service, for instance, in areas such as sick leave. General 182 The union submitted that the Commission is required to act in accordance to equity and good conscience in considering matters. It was said that the Commission would be entitled to be concerned as to the terminating of the employment by KU of two witnesses after they agreed to give evidence in these proceedings. It is not a directly relevant issue whether the applicant made out its claim, but it is an issue the Commission would take into consideration, for example, when having regard to the way in which the applicant may use this variation if it were to be granted to it. It was said that that submission was made with some regret by the union, because, apart from these proceedings Ms Binnie's evidence indicates KU has a reputation of being a better employer. 183 In relation to that submission made with "some regret" the union, in submissions in reply, accepted that there had been no finding by the Commission of any link between termination of the two employees (one being Ms Failla) and the giving of evidence. 184 I proceed on that basis, not on that of the union's perception. 185 Ms Lowson of counsel for the union was highly critical of Ms Stanko the advocate for KU as to the management of KU's case and for her final submissions. That criticism was strongly rejected by Mr Murphy. An examination of the transcript shows that, prior to Ms Lowson's appearance, that submission clearly left her client open to strong criticism, if KU had responded in kind. That was not done. 186 Mr Magner who had appeared on the union's behalf and Ms Stanko had accommodated each other's difficulties, including the absence overseas of Mr Magner for some weeks. In my view, two lay advocates did the best they could in the situation of a hotly contested case, and one of increasing tension, and in relation to an application which, on the union's side, roused deep emotions. 187 I find the attack made by the union on the credibility of the applicant's witnesses, and in particular, on Ms Underwood and on Mr Thurston, quite unwarranted. It reflected no credit on the respondent pressing such an attack. It was an attack that, if a tit for tat approach was adopted, once again left the union wide open for criticism. However, it was said by Mr Murphy that this is not a matter that is going to turn on questions of credit or creditability and KU did not wish to be heard to be attacking credit or credibility of the union although it had had some difficulty of reconciling in some cases the union's affidavit evidence with the oral evidence. Specific Provisions 188 The parent award, as set out earlier, stipulates in cl 3(iv)(a) that a temporary employee can be engaged for a period of not more than two years but no less than 20 days. As originally framed, KU's application mirrored that provision. On 26 November 1999, the application was amended, over objection, to increase the minimum period for fixed term employment from the 20 days originally proposed, to 3 months, it being KU's intention to alleviate the concerns of the union. 189 The "no less than 20 days" requirement has the effect of being a next step up from casual employment which may be utilised in periods of "not more than 20 days". KU may wish to reconsider this aspect, because if, for instance, it was one employee engaged on a casual basis for a series of 20 days, with the appropriate break, rather than different employees over a 2 or 3 month period, the continually employed "casual" could miss out on entitlements otherwise available under cl 4A. 190 Ms Failla said the casual list was not always the same because, once people get to know that there is a casual who is good at his/her job, such casuals are asked to become permanent. The option of a fixed term contract could offer a further opportunity to those casuals to progress to full time employment if they wish to pursue that course. 191 If the union proposes that KU can employ casuals on a roll over basis every 20 days, I do not see why the further step of extending employment to a period of time less than permanent full time employment should not be permitted, with benefits above those attaching to casual employment. In the light of Ms Failla's evidence as to her feelings that, as a casual, she was not part of the team at the centre, a feeling quite different from when she had had longer periods of employment, it seems that the proposed provision would grant her and other employees, the opportunity to have such longer employment periods. 192 Ms Underwood said that from her experience as manager, and from reports made to her in that capacity, she knew that some persons had a preference for less than full time work for various reasons: family, eg to be with children in school holidays; students combining work and studies (as Ms Failla did at one stage); to gain work experience and also former permanent employees who simply want some time out to explore new options but also to maintain an income. 193 As to the alleged inconsistency in the two years as opposed to one year, KU notes it is open to the Commission, if it thinks the two year maximum duration is inappropriate in the light of KU's evidence that the period over which it wishes to employ people on a fixed term basis occurs in a calendar year, to so rule. 194 Although Ms Underwood indicated that the anticipated maximum duration for temporary contracts would be 12 months, I do not see any reason why the 2 year maximum in the parent award should be departed from and not be carried over into the KU award. 195 In relation to the proposed three month break, Mr Murphy said it is not, as was suggested by the union, KU's intention to engage everyone for such periods that the break is three and a half months and the continuity provisions KU is attempting to put in will be frustrated. He said that if there is a concern about that, let KU and the union talk about some other maximum break or some other basis of going forward altogether. 196 The benefits that would accrue to the employees through the proposed cl.4A would only accrue provided that the break in service would not be more than three months. The evidence showed that employees at TAFE services would be the ones who would be most likely re-employed within that three month period, those at university services and work based services less frequently. Ms Coad's evidence was that for university centres, there was a four month period (November to February) when the numbers of children attending are reduced. The work based services would have fixed term contracts on a needs basis and those services are not as predictable as the university or TAFE services. 197 Ms Coad said that as a family friendly employer KU would negotiate a fixed term contract with an employee who might otherwise be a day or so outside the three month break stipulated in the proposed cl 4A in order to ensure that the employee would be employed within the required period to achieve the benefits provided by the clause. She could make that decision for the services for which she was responsible. 198 The "day or two" outside the specific break period seems to me to indicate a particularly rigid approach. Furthermore, access to the benefits of a fixed term provision should not depend upon the attitude and goodwill of the particular person who might be in a position to make such decisions. 199 It also seems to me that to nominate a specific break, be it 3 months or something else, could have its difficulties, in circumstances where it is KU who will dictate when a fixed term starts and finishes. 200 Ms Coad referred to guidelines within which KU would negotiate fixed term contracts that would ensure a less than three month down time. I do not know whether guidelines actually exist or were simply anticipated. In any event, I think it is not merely a matter of merit but also of necessity that such guidelines be instituted in relation to whatever the period of the break may eventually be. 201 According to the union, the whole sub-cl (a)(viii) is completely contrary to the concept of parental leave, that being that leave is available to persons to take and ensures that on their return there is a job available. It was said that, in fact, if fixed term engagements were to apply and if someone went on parental leave during or at the end of the fixed term and wanted to have a job to come back to, there is no entitlement preserved. 202 Ms Stanko said that sub-cl (a)(viii) was really a reflection of Part 4, Division 1 of Chapter 2 of the 1996 Act which deals with parental leave. Examination of that Part shows that KU's proposal in cl 4A(a)(viii) is an advance on the Act. Under the 1996 Act an employee is entitled to parental leave only if the employee has had at least 12 months of continuous service with the employer (s 57). Under KU's proposal the employee shall be entitled to parental leave once their period of service is a continuous aggregate period of 52 weeks, with reference to not more than 3 months break in service being deemed not to be breaks. Clause 4A(b) and (c) reflect, insofar as they can reflect in relation to the different forms of permanent and fixed term employment being dealt with, s 66 (return to work after parental leave) and s 69 (replacement employees) of the 1996 Act. 203 It seems to me that the union seeks, in relation to return from parental leave, conditions in advance of those provided for eligible permanent employees under the legislation. Section 66 provides as follows: 66 Return to work after parental leave (1) An employee returning to work after a period of parental leave is entitled to be employed in: (a) the position held by the employee immediately before proceeding on that leave, or (b) if the employee worked part-time because of the pregnancy before proceeding on maternity leave—the position held immediately before commencing that part-time work, or (c) if the employee was transferred to a safe job under section 70 before proceeding on maternity leave—the position held immediately before the transfer. (2) If the position no longer exists but there are other positions available that the employee is qualified for and is capable of performing, the employee is entitled to be employed in a position as nearly as possible comparable in status and pay to that of the employee's former position. … 204 In the event that the previous position no longer exists and there are no other positions available for the employee in terms of s 66(2), the Act does not provide for any further benefit for the employee. There is certainly no requirement, as appears to be the union's position, that the employer must find a position for that person. 205 It was claimed by the union that cl (e), redundancy, goes to the heart of this application and contrasts with the provisions of cl 27 of the parent award. It said that the provisions of this proposed variation ensure that a person who may be employed for an aggregate period of some years with KU, who may have been continuously employed on continuous terms of engagement over the course of one year, would be deprived of any redundancy payments as provided for in the parent award. If KU were to make redundancies, that clause would lead to a significant saving for KU and the union says that the issue of saving money and nothing else, is what drives this application for more flexible employment provisions. 206 The redundancy provisions (cl 27) of the parent award apply in respect of weekly and part-time employees. It does not apply in the case of casual employees or of employees engaged for a specific period of time (i.e. temporary employees, cl 3(iv) ) or for a specified task or where employment is terminated due to the ordinary and customary turnover of labour. The clause does not apply to employees with less than one year's continuous service and for such employees, the employer has only a general obligation to give them an indication of redundancy at the first available opportunity and to take steps to facilitate their obtaining suitable alternative employment. 207 The union's submissions as to the effect of cl 4A on redundancy payments appear to be predicated on the basis that KU intends that all of KU's permanent employees will end up on fixed term contracts. There was no evidence to support that submission. KU's evidence is all to the contrary. When reductions in staffing are needed KU's first approach is to look for alternative positions into which to transfer staff so that their employment can continue. Its second position is that it would then reduce hours to reflect the hours of employment needed. The union accepted that either transferring staff elsewhere or reducing hours is an appropriate management process where necessary. As far as reduction of hours is concerned within the terms of the award there is some degree of flexibility. The union said it has co-operated with KU in such circumstances in the past. 208 KU said it adopts redundancies as the last resort alternative. It has invested time and energy in training, so therefore KU would look to keep them as employees by transferring them to another site of employment. Ms Bassili's experience confirmed that approach. 209 Ms Underwood said that in the period between 24 November 1997 and 5 March 1999, two work based long day care centres had closed. 210 The union attacked KU's position that it did not wish to offer employees "permanent" employment in the full knowledge that at the end of a few months it would have to terminate those employees, on the basis that Ms Underwood's evidence was of only two people made redundant by KU. That attack is baseless. The redundancies were of permanent employees in the terms of the current award. That figure could be vastly different if KU had employed employees on what it regards as a basis raising false hopes for those employees. 211 Although employees with less than 12 months service have no entitlement to redundancy payments, KU may need to consider para (e) in the light of the proposed paragraphs (a)(iii) and (viii) and the situation of "fixed term employees" whose aggregated period of service totals more than 52 weeks. 212 The union submitted that sub-cl (f) renders a contract to be not a contract of fixed term engagement. There is no certainty to any employee who is engaged on a fixed term contract. They may have organised their life around that fixed term contract, and at any time without cause the employer may terminate on two weeks notice. 213 Ms Stanko relied on the provisions (one week) (cl 13.3) of the Teachers (Non-government etc) Award as a comparison for the period of two weeks notice of termination proposed by KU in cl 4A(g). However, examination of cl 13.3 and cl 13.4 of that award shows that at least one weeks notice is to be given if the temporary teacher has been employed for a period less than four weeks (cl 13.4). For a temporary teacher employed in excess of four weeks the period of notice, by a combination of cl 13.3 and cl 13.4, would appear to be at least four weeks (300 IG 150 at 170). 214 Ms Underwood said that if new employees were taken on under negotiation in these fixed term contracts, KU could guarantee employment for the term of their contract. That evidence does not sit with the 2 weeks termination provision. 215 The difficulty faced by KU in seeking a provision in the terms it has, with the proposal for 2 weeks notice of termination is emphasised by what was said by a Full Bench of the AIRC in NTEIU v AHEIA (unreported; Munro J, Watson, SDP and Smith C; Print Q0702; 11/5/98 at 40): Our decision of 18 August 1997 outlines the main points of our reasons. Fixed-term employment is a distinct type of employment for the purposes of relief against an unfair termination of employment. We are satisfied there are compelling grounds why a reasonable employer should restrict the use of fixed term employment to circumstances which warrant a departure from the minimum conditions associated with standard full-time or part-time employment. We accept it will be appropriate for an institution to resort to fixed-term employment to ensure it has flexible staffing arrangements to meet the exigencies covered by the circumstances we have comprehensively defined in clauses 2.3.1 to 2.3.6. Conversely, once the employer elects to use a fixed-term employment, it is reasonable that the employer give full effect to the consequences of that election. In other words, it is not reasonable to purport to convert fixed-term employment to a less secure, less protected form of indefinite term employment by including provision for ordinary notice of termination prior to the expiration of the contract, or by the systemic rolling over of contracts from term to term. Such practices belie the important differences between the two types of employment and are characteristic of the inappropriate use of fixed-term contracts in the past. The incidents of fixed-term employment, and the duties we have determined to cover serial fixed-term employments, reflect our view of what should be the minimum standards observed by a reasonable employer using that type of employment in this industry. In particular in this context, the relative exemption of fixed-term employment from relief against unfair termination of employment is predicated upon such employment expiring upon the completion of the term. It may reasonably be expected that an institutional employer offering a term contract will perform the contract and not dishonour the contract by premature unilateral termination unless the employee's conduct amounts to a repudiation of the contract. 216 In relation to the proposed par (f) KU cannot have it all ways: a fixed term, provision within that fixed term for termination and, in any case of the latter eventuality, no redundancy or any form of compensatory payment, other than payment in lieu. I note that there also exists the possibility that not all employees who may be employed on fixed term contracts will enjoy the proposed benefits, for instance, an AMEP employee first employed from January to June, 1999, but whose next contract is for the period July to December, 2000 would not do so. Ms Stanko advised during the course of proceedings that the notice provision in relation to a fixed term employee was "a touch unique" and KU might be prepared to review its position on that point. It would be appropriate to do so. 217 On 26 November 1999, over objection, the application was amended to include a new para (h), that being of a provision that would require fixed term employees to be treated by the employer as permanent employees for the purposes of application for permanent positions in KU in accordance with KU's Staff Appointment and Transfer Policy. The effect of para (h) is that fixed term employees would be treated more favourably than outside applicants for a position at KU. Mr Murphy said that, to the extent that the employees can have some confidence in being re-employed on further contract, para (h) has sought to ensure that fixed term employees would be given, as far as it can be given, some degree of confidence as to their future. 218 KU's Staff Appointment and Transfer Policy was not before the Commission. It is to be made available to the union for its consideration in the conferences to take place in accordance with this decision. 219 Concerns were raised by the Labor Council and by the union as to para (i). In reply Mr Murphy said that para (i) was an attempt to lift the concerns voiced by the union and by Labor Council that KU could use the provision, if granted, to replace permanent positions with fixed term positions. Any assertion that permanent employees have been harassed or persuaded by KU, as was a possibility suggested by Mr Christodoulou, to take up fixed term employment, could be the subject of an urgent notification of dispute by the union, to enable any such assertion to be examined by the Commission. 220 If successful in this application KU has stated very forcefully that it did not intend to go out and employ all staff on fixed term contracts, but intended to retain a core of permanent staff with "add ons", to use Ms Underwood's term, of fixed term contract employees, for reasons set out earlier. 221 Ms Stanko and Mr Murphy explained some of the proposed sub-clauses as being points of clarification eg sub-cl (a)(iv) is included to show that KU does not wish to restrict its employees to fixed term contracts, but outside those contracts KU would also use those same employees from a casual list when it does not have other employees available. 222 It seems to me that para (c) which was stated in submissions to mean that persons who replace fixed term employees will not be treated as temporary employees, but will be treated as fixed term employees, may need further clarification. 223 Those provisions otherwise appear to me to be benign and could strengthen the proposed clause. 224 Some problems with the application raised by the union, eg access to unfair dismissal provisions, may have to await resolution by this Commission at some appropriate time, if indeed, they have not already been considered in the plethora of authorities already available in that area. 225 The union indicated that, in the event that the Commission made a decision in principle, the union would consider participating in future conferences. Ms Lowson was instructed to put on the record that that should not be seen as waiving any statutory rights that could arise. 226 The Commission has before it a number of matters raised both by the union and by KU that might be further considered in relation to the proposed variation. 227 Under cross examination, Ms Owens outlined a number of concerns that she held in relation to fixed term employment, including: … (b) The ability to terminate an employee on a fixed term contract prior to the expiry of the term of that contract; … (d) The entitlement to parental leave which does not guarantee a return to work; (e) The apparent inconsistency between the maximum length of a fixed term contract (ie two years) and the statement that fixed term contracts are generally to be within the calendar year; … (g) The possibility that KU will draw its temporary employees from the ranks of people who would otherwise be permanent employees; (h) The absence of any limitation on the application. (Three items originally in that list have been addressed by KU in its final amended application.) 228 It was also suggested by the union that the existing stand-down provisions of the award might be an area that could be examined further. 229 In the event that the Commission granted the application in principle, KU earlier indicated a number of areas that could be further explored: (a) the circumstances under which a fixed term employee may be terminated prior to the expiry of the term of the contract; (b) ratios of fixed term employees to permanent employees either in individual centres or in relation to KU's overall number of permanent employees; (c) the effect of a break between engagements of periods in excess of three months. Wage Fixing Principles 230 I repeat my earlier finding that this application is determined in accordance with the Special Case principle and state that the Commission in its determination has applied structural efficiency considerations. 231 The union contended that this application seeks to reduce employees' entitlements and not give anything back in return, thus changing the conditions in the KU Award to the detriment of those employees. 232 The decision in In re South Maitland Railways Pty Ltd (Wages Division) Award (1967 AR 537 at 589) supports the principle that reductions in pay should only occur in special circumstances. They do not include circumstances which are within management's capacity to overcome. In this case the question of fluctuating numbers can be dealt with by management. That being the case, the employees should not bear the burden of a reduction in pay. 233 In In re Crown Employees (Ancillary Staff in Schools) (1978 AR 158) an application for school ancillary staff was brought in the context of existing employment of persons and the standing down of those persons over the Christmas period. What was being sought was to ameliorate an existing condition of employment which meant that these persons were not being paid. An appeal against an award granting such ancillary staff half pay for the period (other than when on annual leave) was dismissed. 234 Work place flexibility should not be elevated in some way so that it is to be given more consideration and workers' interests given less. 235 Obviously the Commission is entitled to and should have regard to issues of efficiency and productivity and that is one of the objects of the Act but the Commission would have to be satisfied that this variation would be productive and would also, in making an assessment, have to measure its impact against the employees. 236 KU has only a limited history of fixed term employment, insufficient to establish the need for such flexibility and wants to extend it beyond what is already available in the award. The Commission would not be satisfied that a special case has been established which would enable this applicant to be granted the application sought. 237 Mr Christodoulou in his submissions raised the issue of low pay in the child care industry, referring to the report of the Pay Equity Inquiry. Ms Owens also referred to the low wage rates in the child care industry, and to a profile of employees in the industry as being of young women. That latter description was a generalisation not supported by the evidence. 238 This application does not go to pay rates. 239 The benefits available to the employees on fixed term contracts are those described by Ms Stanko and include: (A) the accrual of pro rata sick leave and the capacity to be able to carry the sick leave accrual from one engagement to the next, provided that the break in service is not more than three months; [period to be subject to further discussions] (B) a slightly improved benefit than under the Long Service Leave Act which only permits continued service where the break in employment is less than two months; (C) entitlement to pro rata leave, i.e. bereavement leave, jury duty leave, examination and study leave, attendance at in-service courses, et cetera; (D) payment of pro rata annual leave loading at termination; (E) parental leave has been an issue that KU has had some difficulty in addressing because of the envisaged nature of fixed term employment. Its proposed sub-clause is really a reflection of the provisions in the Act. 240 Structural efficiencies that KU will gain by the granting of the application include increased flexibility in matching staff to enrolments, the ability to employ staff only for periods of need thus assisting to keep down costs, and, as a consequence, keep down fees for parents, continuity of care for the children and continuity of contact with parents, less time unproductively spent having to brief a series of casuals and training them in the ways of a particular centre with particular children and, in so doing, freeing up permanent and long term staff to develop their own roles rather than picking up duties more properly those of the unqualified staff. 241 Insofar as the Special Case principle and the general proposition as to structural efficiency in the Preamble are concerned, I am satisfied that the change in conditions that granting this application for variation of the KU Award to include for fixed term employment, will bring about is not one that would offend the wage fixing principles in any respect. Variation and the Public Interest 242 In its final form KU's application sought to vary an award after its nominal term had expired. That fact brought s 17 of the 1996 Act into play. 243 Section 17 of the Industrial Relations Act 1996 (the 1996 Act) provides: 17 Variation or rescission of award (1) The Commission may vary or rescind an award. (2) Sections 11, 13 and 15 apply to any such variation or rescission. The other provisions of this Division continue to apply to the award as varied. (3) An award may be varied or rescinded in any of the following circumstances only: (a) at any time with the mutual consent of all the parties to the making of the original award, (b) at any time to give effect to a decision of the Full Bench of the Commission under section 50 or 51 (National and State decisions), (c) during its nominal term if the Commission considers that it is not contrary to the public interest to do so and that there is a substantial reason to do so, (d) after its nominal term if the Commission considers that it is not contrary to the public interest to do so. (4) This section extends to a variation or rescission of an award in the course of an arbitration by the Commission under Chapter 3 to resolve an industrial dispute. Note. Section 169 also enables an award to be varied at any time to remove unlawful discrimination. 244 The 1996 KU Award took effect from 11 September 1996 and was expressed to remain in force thereafter for a period of 12 months (cl 21). Clause 20A, Leave Reserved in relation to a definition of Temporary Employee was inserted into that KU Award on 8 July 1997. Leave reserved is intended to be taken advantage of after the making of the award. 245 Section 17(3)(c) and (d) of the 1996 Act permits the variation of an award either during or after its nominal term. 246 I accept the submission of Mr Murphy that on the face of the application filed in 1997, and even as effectively varied, over objection, by way of Exhibit 30, on 1 November 1999, that the application proposed a new award, but that the parties, specifically the union, have proceeded on the basis that what was effectively being sought was the introduction of temporary or fixed term employment by way of a variation, pursuant to s 17, of the current KU award which expired but continues to have life by virtue of the provisions of the 1996 Act. 247 On 26 November 1999, KU's application to further amend the claim, made, as was said by Mr Murphy, in order that the proceedings could, in a sense, be brought in a proper form, was granted, over objection by the union. 248 In relation to s 17 and the public interest, Ms Lowson submitted that: 91. Pursuant to section 17 of the Act the Commission may only vary an expired award if it is satisfied that it is in the public interest so to do. S17(3)(d) was of particular relevance. 92. Public interest is not defined in the Industrial Relations Act. The classic statement of the interpretation of the phrase is found in O'Sullivan v Farrer (1989) 168 CLR 210 at 216. 93. In considering what is in the public interest in these proceedings the Commission must have regard to broader industrial issues than those simply facing the parties involved. Matters that are relevant for the Commission to take into account include the following: (i) The negative impact on reduced job security on society generally including, for example, the likelihood of social welfare dependence by employees who are "between contracts". (ii) The possible extension of fixed term contracts not only to other areas of the childcare industry but to other industries as well. (iii) The obligations under the Act including section 10 and all the objects esp. 5.3(c)(d). (iv) The lack of any legislative intention expressed through the 1996 Act to introduce such flexible work arrangements. Contrast the position Federally, where the legislation has significantly departed from centralised bargaining, noting that the same scheme is expressly not present in the New South Wales jurisdiction. (v) The role of the Commission in giving particular consideration to the needs of the low paid. 96. Certainly the public interest would not be served by the introduction of a form of employment within the award making system that represents job insecurity and reduced income for individuals affected, the possible deleterious impact on childcare as a career choice, and the likelihood of increased industrial disputation on matters arising form such variation. 249 In her oral submissions she contended that it is not in the public interest for child care workers to be singled out as being the subject of an award application which would provide to the employer a great capacity to employ persons flexibly. 250 The provision of child care services is not simply a baby sitting service. Children in child care services are being cared for by qualified, partially qualified and unqualified people who are providing care for children more and more in at least a quasi professional way. The care of those children is of significant importance in relation to those childrens' welfare, not only in relation to their time in the child care centre but also as they interact with their family. 251 The Commission would be very concerned that there would be no change to the terms and conditions of employees at child care centres that would in any way have a deleterious effect in the quality of care being provided to children which the union contends this application does. 252 KU conceded that it has to meet the requirements of s 17. In reply to the union's submissions that s 17 of the Act provides that the Commission may only vary an expired award if it is satisfied that it in the public interest to do so, Mr Murphy submitted that that is a complete misstatement of the provision. Sub section 17(3) identifies the circumstances in which an award may be varied or rescinded. Sub-section 17(3)(d) is to the effect that an award may only be varied after its nominal term "if the Commission considers that it is not contrary to the public interest to do so" (emphasis added). KU does not have to satisfy the Commission that it is in the public interest to make the variation sought, but rather, that it is not contrary to the public interest. Applications to vary awards which have no impact upon the public interest (ie public interest neutral) may be permitted. 253 In any event, KU submits that the evidence before the Commission establishes that it is in the public interest to vary the award as sought. There is public interest in enhancing the viability of KU's operations whilst at the same time enhancing the employment opportunities for childcare workers. There is certainly nothing before the Commission that would support the finding that the variation is contrary to the public interest. 254 I have taken into account consideration of "public interest" as found in In re Crown Employees (Teachers-Technical Education Department - Overtime) Award (Teachers - Tech Education Award) (1969 AR 29 at 33), in In re Crown Employees (Teachers, Locality Allowance etc) Award [1981 AR 1017 at 1049-1050] and in In Re Public Hospital (Medical Officers) Award [1974 AR 540 at 548-541]. 255 In O'Sullivan v Farrer (1989) 168 CLR 210 at 216, the High Court stated: Indeed, the expression "in the public interest", when used in a statute, classically imports a discretionary value judgment to be made by reference to undefined factual matters, confined only "in so far as the subject matter and the scope and purpose of the statutory enactments may enable… given reasons to be [pronounced] definitely extraneous to any objects the legislature could have had in view": Water Conservation and Irrigation Commission (N.S.W) v Browning, per Dixon J (1947) 74 CLR, 492 at 505 256 In the Teachers - Tech. Education Award (1969 AR 29 at 33) Sheldon J described a particular practice of the Public Service Board as being "basically indefensible because fairness is sacrificed on the altar of economy". A similar finding is not supported by the evidence in relation to KU's application. 257 I find that the evidence shows that to vary the KU Award to insert, as an additional option as a term of employment, a provision for the employment of persons for fixed terms, together with associated conditions to protect both employee and employer in relation to such fixed term employment would not, in the terms of s 17(3)(d), be contrary to the public interest. 258 Furthermore, the evidence of both KU and the union confirmed that continuity of care was in the best interests of the children, their parents, their carers and of KU. That, I find, is strongly positive as to the public interest. There is certainly no element in it contrary to the public interest in the terms of s 17(3)(d). Conclusions 259 In relation to the union's contention that it is up to KU as management to so organise its affairs that permanent employment can be offered, it is not sufficient that the union shows how award provisions can be juggled to provide outcomes it says would satisfy KU's needs. KU says they are not sufficient, either in a practical or in a philosophical sense that would satisfy either its own needs or what it regards as its obligations to employees, and brings the evidence to sustain its stance. 260 In any event, it is the prerogative of management to decide whether such juggling of provisions is an exercise in which it wishes to indulge itself. In this case, KU says quite strongly that the existing provisions do not suit its needs. Ms Stanko detailed the reasons, which are set out earlier as to why some of the options, suggested by the union, were not acceptable. KU in this application, has advanced a further provision for inclusion in the KU Award that it says would satisfy its requirements. It has sought, at the same time, to ensure that the provision has advantages for the employees as well as for itself. 261 I find that KU has substantiated its claim that fixed term employment is appropriate in some limited circumstances as an additional option to the forms of employment now available to it in accordance with the KU Award in conjunction with the parent award. 262 However, KU has not satisfied me that the application, even as amended, should be granted in its present form. On that point, KU accepted that the evidence was restricted to child care centres attached to educational institutions, such as TAFE and universities and also to corporate employers. It did not oppose a variation to the KU Award which would be restricted to such centres. 263 I find that the variation is to be limited to TAFE, university and corporate child care centres. 264 In the light of the above findings and of my earlier consideration as to the proposed new clause, I direct the parties to confer as to the final form in which cl 4A is to be inserted into the award. 265 The parties are to report back to the Commission on 13 July 2000 as to progress made after their further discussions. 266 In the event that agreement is not reached, the Commission will determine any outstanding issues. ____________________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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