2 Fresh Pty Ltd as Trustee for the K-Tong Trust, Cafe 21 Trust, Caltex Berrima Trust, Fresh Fillings Trust, BP Palms Trust, Speakers Corner Trust
[2012] FWA 3163
•13 APRIL 2012
[2012] FWA 3163 |
|
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
2 Fresh Pty Ltd as Trustee for the K-Tong Trust, Cafe 21 Trust, Caltex Berrima Trust, Fresh Fillings Trust, BP Palms Trust, Speakers Corner Trust
(AG2011/3910)
COMMISSIONER SIMPSON | BRISBANE, 13 APRIL 2012 |
Application for approval of the 2Fresh Pty Ltd as Trustee Enterprise Agreement 2011.
[1] An application has been made for approval of an enterprise agreement known as the 2Fresh Pty Ltd as Trustee Enterprise Agreement 2011 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by 2 Fresh Pty Ltd as Trustee for the K-Tong Trust, Cafe 21 Trust, Caltex Berrima Trust, Fresh Fillings Trust, BP Palms Trust, Speakers Corner Trust (the Applicant). The Agreement is a single enterprise agreement.
[2] I contacted through my Associate Mr Chris Mossman of MacPherson + Kelley lawyers, the representative of the Applicant to advise that I had concerns with the application in regard to the arrangements for the payment of casual staff on weekends and enquired if the Applicant would consider an undertaking to address that concern. I received a subsequent submission in support of an argument that the Restaurant Industry Award 2010 (RIA) only requires the payment of a weekend penalty rates for casuals where the casual employee is performing “ordinary time”.
[3] The Applicant proposed a draft undertaking for consideration to the effect that the Applicant intended only permanent employees would be required to work on weekends and that casuals would only be required to perform overtime where there were insufficient permanent employees and only with the consent of the casual employee, therefore such work would not be ordinary time and would not attract weekend penalties.
[4] I wrote to the Applicant’s representative on 1 March 2012 advising that I was not satisfied by the proposed draft undertaking as the proposed undertaking still allowed for weekend work to be worked by casuals with no penalty payment. I also raised concerns in that correspondence about arrangements for salaried employees and the Northern Territory district allowance.
[5] The weekend casual rate for the purposes of the BOOT under the RIA is a transitional rate as the transitional instrument is AP812953 Hotels, Motels, Wine Saloons, Catering, Accommodation, Clubs and Casino Employees (Northern Territory) Award 2002. The modern award provides rates of 150% and 175% for all casual employees working on Saturdays and Sundays respectively (award clause 34.1). The transitional award provides for a rate of 175% on Saturday and 200% on Sunday (clause 12.4). On that basis at the time the application was made the transitional provisions in the RIA provide the rate for a casual on a Saturday is 165% and 190% on Sunday.
[6] On the basis of my concerns the matter was listed for hearing on 3 April 2012. The Applicant’s representative provided a supplementary submission for the purposes of the hearing. As part of that submission the Applicant’s representative offered undertakings regarding salaried employees and the district allowance which I subsequently advised in the course the hearing would address my concern regarding those issues.
[7] The outstanding issue remains the rate of pay under the Agreement for casual employees engaged on weekends. The Applicant pressed a claim during the hearing that the RIA should be interpreted differently to, for example the Hospitality Industry Award 2010 (HIA)in the way that the award applies to casuals performing work on weekends. The Applicant compared the respective weekend penalty clauses. The words at clause 32.1 in the Hospitality Industry Award 2010 read as follows:
Penalty rates
32.1 An employee performing work on the following days will be paid the following percentage of the minimum wage rate in clause 20—Minimum wages for the relevant classification:
Monday to Friday | Saturday | Sunday | Public holiday | |
Full-time and part-time | 100 | 125 | 175 | 250 |
Casual (inclusive of the 25% casual loading) | 125 | 150 | 175 | 275 |
[8] The words at clause 34.1 of the RIA read as follows:
Penalty rates
Penalty rates for work on weekends and public holidays
34.1 An employee working ordinary time hours on the following days will be paid the following percentage of the minimum wage in clause 20—Minimum wages for the relevant classification:
Type of employment | Monday to Friday | Saturday | Sunday | Public holidays |
% | % | % | % | |
Full-time and part-time | 100 | 125 | 150 | 250 |
Casual (inclusive of 25% casual loading) | 125 | 150 | 175 | 250 |
[9] The Applicant argues that as the RIA at clause 34.1 makes express reference to the term “ordinary time” as opposed to the expression “work” in the HIA, that the RIA must have been intended to operate differently to the HIA, and that non-ordinary time worked on a weekend would not attract a penalty rate.
[10] The Applicant’s representative went to a range of authorities for the purposes of interpreting the expression “ordinary time”. It was put that it is generally accepted ordinary hours are those defined in the applicable award, and as the RIA does not prescribe ordinary hours for casuals and in the absence of an award definition ordinary hours are the employees regular, normal, customary or usual hours.
[11] The Applicant sought to rely upon the RIA being created following a Ministerial request for the AIRC to create a modern award covering the restaurant and catering industry separate to hospitality, accommodation or gaming. The Applicant argued its interpretation is consistent with the Full Bench of the AIRC’s approach of having regard to the special requirements of the restaurant industry.
[12] The Applicant provided an example of a casual employee working pursuant to the terms of the RIA who had agreed with the employer to work 10 ordinary hours per week, however in a particular week the employer requests that the employee work an additional 5 hours on a Saturday morning. The Applicant argues in that instance the casual employee would not receive the penalty in clause 34.1 of the RIA as they were working overtime, not ordinary time. The Applicant says this is a different result to that under the HIA.
[13] The Applicant’s proposed Agreement defines a maximum number of hours and a spread of hours in which casuals may perform ordinary time (clause 14.1) which is between 7pm and 10pm Monday to Friday. On that basis the Applicant argues casuals cannot perform regular, normal, customary or usual hours on a weekend under the Agreement, and therefore such hours cannot be ordinary hours as described in clause 34.1. The Applicant contrasts the Agreement with the Award where it says an employee could not refuse to work ordinary hours on a weekend. The Applicant argues this should be characterised as a benefit to a casual employee.
[14] I have considered the submissions of the Applicant and the authorities on which the Applicant relies. I do not agree with the Applicant’s interpretation of clause 34.1. I do not accept that the Full Bench of the AIRC could have intended for the outcome the Applicant contends, that being that if a casual employee performs work on a Saturday or Sunday a penalty rate of pay will apply to such work if the casual performs it regularly, normally, customarily or usually however if they do not the Saturday or Sunday penalty does not apply.
[15] While I acknowledge as has been put by the Applicant that the RIA does not in express terms establish maximum daily or weekly ordinary hours of work for casual employees, it is however counterintuitive to extrapolate from that the interpretation proposed. The award drafters would not have intended casual employees performing work over and above their usual hours to be denied a penalty rate for working hours on a Saturday or Sunday that they would not normally perform.
[16] I have read the Statement of the AIRC Award Modernisation Full Bench issued on 25 September 2009 concerning exposure drafts for Stage 4 modern awards with particular reference to paragraphs 181 to 240. At paragraph 186 of that Statement the Full Bench drew attention to a variation to the Minister’s consolidated request made on 26 August 2009 that dealt with part-time work and added the following new paragraph:
- offering additional hours of work to part-time employees; and
- employing part-time employees rather than casual employees.”
“Overtime penalty rates – part-time work
53 The Commission should ensure that the hours of work and associated overtime penalty arrangements in the retail, pharmacy and any similar industries the Commission views as relevant do not operate to discourage employers from:
[17] Paragraphs 195 to 201 deal with arrangements for part time employees. The interpretation contended for by the Applicant that casual employees be engaged without penalty on weekends when working other than their usual hours would be contrary to the Ministerial request as it would discourage employers from offering additional hours to part-timers who would be entitled to a penalty when casuals would not. This is a sound reason to reject the Applicant’s interpretation.
[18] Paragraphs 231 to 233 of the Full Bench’s Statement concerning the exposure draft of the RIA read as follows:
- penalty payments for casual employees;
- a 15% penalty for work between midnight and 7.00am Monday to Friday;
- a 25% penalty for work on Saturday, in addition to the 25% casual loading in the case of casual employees;
- a 50% penalty for work by casual employees on Sunday, in addition to the 25% casual loading; and
- a 150% penalty for work on public holidays by full-time and part-time employees.”
“[231] The R&CA draft accompanied a submission made on 24 July 2009. The R&CA’s approach is based on an overriding conviction that penalty payments should be minimal or non-existent during any periods when restaurants trade. The submission was filed before the Australian Government’s submission of the same date containing the clarification in paragraphs 10-12 of that submission which we have set out above. The penalty arrangements contained in the R&CA draft pay little regard to the penalty rate provisions in pre-reform awards and NAPSAs applying to restaurants and cafés. The proposal also ignores some penalties in the NSW Restaurant Award, determined by the Industrial Relations Commission of New South Wales, for full-time and casual employees for work on Saturday and between midnight and 6.00am and for casual employees for work on Sunday penalties for full-time and casual employees and Sunday penalties for casuals. R&CA had relied upon the provisions of that award during the priority stage of the modernisation process.
[232] The R&CA’s approach is directed at substantially reducing or eliminating penalty payments provided for in existing instruments applying to the restaurant industry during times when restaurants are open. That approach ignores the inconvenience and disability associated with work at nights and on weekends – which are the basis for the prevailing provisions in pre-reform awards and NAPSAs. Nor does the R&CA approach take into account the significance of penalty payments in the take-home pay of employees in the restaurant industry. A modern restaurant award based on the penalty rates proposed by the R&CA would give the operational requirements of the restaurant and catering industry primacy over all of the other considerations which the Commission is required to take into account, including the needs of the low paid and the weight of regulation. A more balanced approach is required.
[233] There is considerable diversity in the penalty provisions across pre-reform federal awards and NAPSAs in the industry. For example, in relation to penalties for Saturday and Sunday work, the SEQ Restaurant Award, the Queensland non-SEQ Restaurant Award and the WA Restaurant Award all prescribe a 50% penalty for both days, whereas the Victorian Restaurant Award provides for different rates – 25% on Saturday and 75% on Sunday. The pattern of some penalty arrangements is more clear cut. Taking all of the provisions into account, and having some regard to the employment levels under the instruments, the weight of coverage supports the following provisions, which we have included in the exposure draft:
(my emphasis)
[19] In the Full Benches decision of 4 December 2009 regarding Stage 4 awards it said the following regarding penalty rates in the RIA exposure draft:
“[188] The penalty provisions generally and the two particular penalties raised by the LHMU were subject to considerable attention by us in preparing the exposure draft. As noted in our statement of 25 September 2009, these issues raise matters requiring fine judgement to be exercised in the context of a diverse range of provisions in the relevant instruments and the terms of cl.27A of the consolidated request. Nothing was put to us which indicates that we should depart from the penalty provisions in the exposure draft and we are of the view that those provisions, including the particular penalties addressed by the LHMU, should be included in the modern award. We adhere to the reasons contained in our statement of 25 September 2009.”
[20] There is nothing I can discern from the Full Bench Statement or Decision which suggests consideration was given to the interpretation as proposed by the Applicant. It is widely understood casuals do not generally enjoy the same level of certainty as permanent employees with regard to their rostered hours of work. In the case of the RIA neither clause 31 Hours of Work or 33 Overtime make reference to casual employees.
[21] The expression “ordinary time hours” in clause 34.1 has utility for permanent full time and part time employees for the purpose of distinguishing between ordinary time rates of pay on Saturday and Sunday as compared to overtime rates. A common sense interpretation of clause 34.1 of the RIA for the purposes of work performed by casual employees is that it will attract the penalties as set out in clause 34 of the award in addition to the casual loading whenever that work is performed, subject of course to the limitations on the hours a casual may be required to work which is subject to section 62 of the Fair Work Act 2009.
[22] It follows that based on my findings above I am not prepared to approve the Agreement at this stage. A number of undertakings have been proposed which I am prepared to accept. I will require a further undertaking to address my concern that the RIA, based on its transitional provisions, provides for casuals to be paid 165% on Saturday and 190% on Sunday inclusive of casual loading in the case of employees to be covered by this Agreement. The rates of pay for casuals are marginally higher under the Agreement than the Award but by no means high enough to compensate for the Agreement providing no penalty payments for casuals on weekends.
[23] I am prepared to provide a further opportunity for the Applicant to give an undertaking, along with the previous undertakings offered by the Applicant in order that I can approve the Agreement.
[24] In the event such an undertaking is not provided by close of business Friday 20 April 2012 I intend to dismiss the Application.
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