4 yearly review of modern awards
[2017] FWCFB 3001
•5 JUNE 2017
| [2017] FWCFB 3001 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
JUSTICE ROSS, PRESIDENT |
|
4 yearly review of modern awards – penalty rates – hospitality and retail sectors – transitional arrangements
INDEX
Chapters | Paragraph | |
1. | Introduction | [1] |
2. | The Penalty Rates decision – provisional views | [9] |
3. | General Issues 3.1 ‘Reconsideration’ of the Penalty Rates decision 3.2 The onus issue 3.3 The power to make transitional arrangements and discretionary considerations (i) Employment effects (ii) Relative disutility of Sunday work (iii) The modern awards objective 3.4 Take home pay orders 3.5 Red circling 3.6 Delayed implementation | [14] [16] [46] [54] [78] [83] [91] [93] [110] [127] |
4. | Summary of relevant considerations | [141] |
5. | The Modern Awards – Sunday Penalty Rates 5.1 Fast Food Award 5.2 Hospitality Award 5.3 Retail Award 5.4 Pharmacy Award | [158] [163] [187] [197] [215] |
6. | Public holiday penalty rates | [224] |
7. | Other matters – (i) The Clubs Award (ii) The Restaurant Award (iii) the Pharmacy Award (iv) Proposed change in terminology (v) The Hair and Beauty Award (vi) Loaded rates | [231] [232] [237] [241] [243] [257] [261] |
8. | Next Steps | [272] |
Attachments A – List of submissions received since Penalty Rates decision B – Questions on notice | ||
ABBREVIATIONS
ABI | Australian Business Industrial and the New South Wales Business Chamber |
ACCI | Australian Chamber of Commerce and Industry |
Act | Fair Work Act 2009 (Cth) |
ACTU | Australian Council of Trade Unions |
AFEI | Australian Federation of Employers and Industries |
AHA | Australian Hotels Association |
Ai Group | Australian Industry Group |
AIRC | Australian Industrial Relations Commission |
ARA | Australian Retailers Association |
CCIQ | Chamber of Commerce and Industry Queensland |
CCIWA | Chamber of Commerce and Industry of Western Australia |
Commission | Fair Work Commission |
Clubs Award | Registered and Licensed Clubs Award 2010 |
Fast Food Award | Fast Food Industry Award 2010 |
Hospitality Award | Hospitality Industry (General) Award 2010 |
Hospitality Employers | Australian Hotels Association and the Accommodation Association of Australia |
Hospitality and Retail Awards | Hospitality, Restaurant, Retail, Fast Food and Pharmacy Awards |
NRA | National Retail Association |
PC Final Report | Productivity Commission Inquiry Report: Workplace Relations Framework |
Pharmacy Award | Pharmacy Industry Award 2010 |
Pharmacy Guild | The Pharmacy Guild of Australia |
RAFFWU | Retail and Fast Food Workers Union |
RCI | Restaurant and Catering Australia |
Restaurant Award | Restaurant Industry Award 2010 |
Retail Associations | Australian Retailers Association, National Retail Association and Master Grocers Australia |
Retail Award | General Retail Industry Award 2010 |
Review | 4 yearly review of modern awards |
SDA | Shop, Distributive and Allied Employees Association |
Small Business Ombudsman | Small Business and Family Enterprise Ombudsman |
TPCA Act | Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) |
Transitional Review | Transitional (or 2 year) review of modern awards under Item 6 of Schedule 5 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 |
1. Introduction
[1] On 23 February 2017 we issued a decision (the Penalty Rates decision) 1 dealing with the weekend and public holiday penalty rates and some related matters in a number of modern awards in the hospitality and retail sectors. The modern awards in question are:
- Fast Food Industry Award 2010 (the Fast Food Award);
- General Retail Industry Award 2010 (the Retail Award);
- Hospitality Industry (General Award 2010 (the Hospitality Award);
- Pharmacy Industry Award 2010 (the Pharmacy Award);
- Registered and Licensed Clubs Award 2010 (the Clubs Award); and
- Restaurant Industry Award 2010 (the Restaurant Award).
[2] Specifically, the Penalty Rates decision determined that the existing Sunday penalty rates in the Hospitality, Fast Food, Retail and Pharmacy Awards did not achieve the modern awards objective, as they do not provide a fair and relevant minimum safety net.
[3] Broadly speaking the effect of the Penalty Rates decision was to reduce Sunday penalty rates to 150 per cent for full-time and part-time employees and to 175 per cent for casual employees, in the Hospitality, Fast Food, Retail and Pharmacy Awards, as shown in Table 1 below. Except in the Fast Food Award, we did not propose a reduction in the Sunday penalty rates to the same level as the Saturday penalty rates, noting that for many workers Sunday work has a higher level of disutility than Saturday work, though the extent of the disutility is much less than in times past.
Table 1
Proposed changes to Sunday penalty rates in the Hospitality and Retail Awards
Award | Sunday Penalty Rate | |
Hospitality Award Full-time and part-time employees: | Current 175 per cent 175 per cent | Proposed 150 per cent 175 per cent |
Fast Food Award (Level 1 employees only) Full-time and part-time employees: Casual employees: | 150 per cent 175 per cent | 125 per cent 150 per cent |
Retail Award full-time and part-time employees: Casual employees: | 200 per cent 200 per cent | 150 per cent 175 per cent |
Pharmacy Award (7.00 am – 9.00 pm only) Full-time and part-time employees: Casual employees: | 200 per cent 225 per cent | 150 per cent 175 per cent |
[4] In relation to the Fast Food Award, for reasons associated with the preferences of the relevant employees and the limited impact of Sunday work upon those employees (see Chapter7.5 of the Penalty Rates decision), we decided to reduce the Sunday penalty rate, for Level 1 employees from 150 per cent to 125 per cent (for full-time and part-time employees) and from 175 per cent to 150 per cent (for casual employees). We did not propose to change the Sunday penalty rate for Level 2 and 3 employees. Level 2 and 3 employees are, generally speaking, regarded as ‘career’ employees with the major chains whereas casual and part-time crew members (Level 1 employees) are usually regarded as ‘non-career’ employees.
[5] The Penalty Rates decision also reduced the public holiday penalty rates in the Hospitality and Retail Awards (except for the Clubs Award). 2 In essence, the existing rates for full-time and part-time employees were to be reduced from 250 per cent to 225 per cent and the public holiday rates for casuals were set at 250 per cent.
[6] In addition to the changes to Sunday penalty rates the Full Bench decided to vary some of the penalty provisions in relation to early/late night work in the Restaurant and Fast Food Awards 3. In particular, we decided to vary the span of hours which attracted the 15 per cent loading in the Restaurant and Fast Food Awards such that the loading applies to work performed between midnight and 6.00 am (not 7.00 am as it is at present). We also decided to vary the Fast Food Award to provide that the 10 per cent evening work loading applies to work between 10.00 pm and midnight (as is currently the case in the Restaurant Award), on the basis that the existing 9.00 pm threshold for the payment of the evening work loading was simply an error.
[7] In our subsequent decision of 17 March 2017 4 we decided that the changes to the late night penalties would commence on 1 July 2017. The basis of that decision was our acceptance of a submission put by the Shop, Distributive and Allied Employees Association (SDA) that the objective of establishing a simple and easy to understand modern award system is best served by the establishment of generally consistent transitional arrangements arising from the Penalty Rates decision.
[8] This decision deals with the implementation of our decision to reduce Sunday and public holiday penalty rates in certain Hospitality and Retail sector modern awards. We also deal with the future conduct of a range of other proceedings. We begin by referring to some provisional views we expressed in the Penalty Rates decision regarding the implementation of the Sunday penalty rate reduction.
2. The Penalty Rates decision – provisional views
[9] In the Penalty Rates decision we observed that a substantial proportion of the employees covered by the modern awards which were the subject of the proceedings are ‘low paid’ (within the meaning of s.134(1)(a)) and that the award variations proposed would be likely to reduce the earnings of some of those employees and have a negative effect on their relative living standards and on their capacity to meet their needs. At [2000] of that decision we said:
‘The immediate implementation of all of the variations we propose would inevitably cause some hardship to the employees affected particularly those who work on Sundays. There is plainly a need for appropriate transitional arrangements to mitigate such hardship.’
[10] The various submissions before us at that time gave little attention to the implementation of any variations to penalty rates arising from the proceedings. Consequently, we invited further submissions on the appropriate transitional arrangements. To assist those parties who wished to make submissions as to the form of such transitional arrangements we expressed some provisional views (at [2021] of the Penalty Rates decision), as follows:
(i) Contrary to the views expressed by the Productivity Commission we do not think it appropriate to delay making any changes to Sunday penalty rates for 12 months, at which time the reductions apply in full. The Productivity Commission’s proposal imposes an unnecessary delay on the introduction of any reduction in Sunday penalty rates and would give rise to a sharp fall in earnings for some affected employees.
The Productivity Commission suggests that a 12 month delay would allow the affected employees to ‘review their circumstances’ so that they ‘can seek other jobs, increase their training and make other labour market adjustments’.
As we have mentioned, the employees affected by these changes are low paid and have limited financial resources. It is unlikely that they will be able to afford the costs associated with increasing their training.
Further, workers in the Accommodation and Food Services and Retail sectors have lower levels of educational attainment than the total workforce, which is likely to limit their capacity to obtain other employment. As noted in the Peetz and Watson Report:
‘… while a majority of tertiary students who are employed work in either retail or hospitality (i.e. accommodation and food services) industries, this does not mean that most people who work in those industries are tertiary students. Nor does it indicate that they are not in need …
Pay rates in retail therefore affect not only tertiary students but also a significant number of other people who are likely to be dependent on earnings from this industry as their principal or sole source of income.’
(ii) If ‘take home pay orders’ are an available option then they may mitigate the effects of a reduction in Sunday penalty rates. But we do not favour any general ‘red circling’ term which would preserve the current Sunday penalty rates for all existing employees. A consequence of such a term would be that different employees of the one employer may be employed on different terms and conditions. Such an outcome would add to the regulatory burden on business (a relevant consideration under s.134(1)(f)).
(iii) The reductions in Sunday penalty rates should take place in a series of annual adjustments on 1 July each year (commencing 1 July 2017) to coincide with any increases in modern award minimum wages arising from Annual Wage Review decisions.
(iv) As to the number of annual instalments, the 5 annual instalment process which accompanied the making of the modern awards is too long for present purposes. It will be recalled that the Award Modernisation Full Bench was dealing with an array of award provisions that were the subject of transitional arrangements including minimum wages, whereas we are only dealing with one provision, Sunday penalty rates. It is likely that at least 2 instalments will be required (but less than 5 instalments). The period of adjustment required will depend on the extent of the reduction in Sunday penalty rates, the availability of ‘take home pay orders’ and the circumstances applying to each modern award. The most significant reduction is for full-time and part-time employees covered by the Retail Award (from 200 per cent to 150 per cent), it follows that a longer period of adjustment may be required in this award, than for the other awards before us.5 (references omitted)
[11] We issued directions on 23 February 2017 seeking submissions from interested parties in respect of the above provisional views. Some 32 submissions were received from interested parties (with 17 further submissions in reply). A list of the submissions received is set out at Attachment A.
[12] In a Statement 6 issued on 5 April 2017 a series of Questions on Notice were put to parties in respect of a range of issues relating to the implementation of the Penalty Rates decision. The Questions on Notice are set out at Attachment B. The submissions received, including the responses to the Questions on Notice, were summarised in a Background Document issued on 5 May 2017.7 Parties were afforded an opportunity to make oral submissions at a hearing held on 9 May 2017.
[13] It is convenient to deal with a number of general issues covered in the submissions, before turning to the specific circumstances pertaining to each of the modern awards.
3. The General Issues
[14] The general issues canvassed in the submissions may be conveniently categorised as follows:
- the ‘reconsideration’ of the Penalty Rates decision;
- the ‘onus’ issue;
- the power to make transitional arrangements and discretionary considerations;
- take home pay orders;
- the ‘red circling’ proposal; and
- delayed implementation.
[15] We now turn to deal with each of the ‘general issues’.
3.1 ‘Reconsideration’ of the Penalty Rates decision
[16] In its submission of 24 March 2017 United Voice “reserved its rights in respect of the efficacy of the finding that cuts should be made to penalty rates” and contended in its alternative submission in relation to transitional arrangements, that the Sunday penalty rate reduction in the Hospitality Award ‘should not be implemented’. The basis for this proposition is the conclusion in the Penalty Rates decision that a substantial proportion of the employees affected are ‘low paid’, that the proposed variations ‘are likely to reduce the earnings of those employees and have a negative impact on their relative living standard and their capacity to meet their needs’ and that the cuts to Sunday penalty rates for permanent employees under the Hospitality Award would have an ‘adverse impact’ on the earnings of these employees. 8
[17] United Voice also drew attention to the following aspect of our decision:
‘…it needs to be borne in mind that the primary purpose of such penalty rates is to compensate employees for the disutility associated with working on Sundays rather than to address the needs of the low paid. The needs of the low paid are best addressed by the setting and adjustment of modern award minimum rates of pay (independent of penalty rates).’ 9
[18] In respect of the above observation United Voice submits that ‘it is incorrect to conclude that because penalty rates are directed at disutility it is inappropriate or unnecessary to consider the needs of the low paid as provided for by s 134(1)(a) in this review’ and, further, that:
‘The fact that the Act requires the Commission to consider the needs of the low paid when setting minimum wages does not relieve the Commission of its function to properly consider the needs of the low paid as part of the four yearly review, and in consideration of the applications made by employer proponents for reductions to penalty rates.’
[19] The Australian Council of Trade Unions (ACTU) advances a submission in similar terms and calls on the Fair Work Commission (the Commission) ‘to make no orders to implement the proposed reductions in Sunday penalty rates’, on the basis that:
‘. . . implementing the Decision would be inconsistent with the objects of (the Act) which include providing workplace laws that are fair to working Australians. . . and with the modern awards objective which requires that the Commission ensure that the minimum safety net is fair and relevant, including taking into account the ‘relative living standards and the needs of the low paid.’ 10
[20] The Federal Opposition advanced a general submission, contending that the Commission’s decision to cut penalty rates in the Retail, Hospitality, Pharmacy and Fast Food Awards should be ‘set aside’. Three broad lines of argument were advanced in support of the submission put:
(i) the Penalty Rates decision ‘does not give appropriate weight to the direct impact on workers of cutting penalty rates and reducing their take home pay’; 11
(ii) any variation of a modern award which results in the reduction of take home pay is inconsistent with the legislative purpose of s.134(1)(da) of the Act; 12 and
(iii) there are no transitional arrangements which could ameliorate the impact of the penalty rate cuts or prevent significant disadvantage to the employees affected by the Penalty Rates decision. 13
[21] The State Governments of Queensland 14, South Australia15, Victoria16 and Western Australia17 also opposed any reduction to penalty rates, as did the ACT18 and NT19 Governments. The NSW Opposition20, the Tasmanian Opposition21 APESMA22 and the Retail and Fast Food Workers Union (RAFFWU) 23 also opposed the implementation of the Penalty Rates decision.
[22] In addition to the three points identified above a range of other considerations were advanced in support of the general proposition that the Penalty Rates decision should be ‘set aside’ or ‘not implemented’, including the adverse impact of reductions in penalty rates on the gender pay gap, collective bargaining and the economy.
[23] The Australian Industry Group (Ai Group) oppose the setting aside of the Penalty Rates decision and submit that the parties advancing that proposition have not demonstrated that:
- there exists a misapprehension of the law or of the facts;
- a lack of natural justice was afforded to a party; or
- the Full Bench failed to afford an opportunity to be heard on an issue.
[24] In the course of its submission Ai Group refer to a number of authorities in support of the general proposition that a court or tribunal will only consider setting aside its decision in limited circumstances. 24 In particular, Ai Group drew our attention to the following passage from the judgement of the Full Federal Court in Wenkart v Pantzer (No 3)25where it was held that in order to set aside a decision:
‘What must be demonstrated is that the Court has apparently proceeded upon the basis of some misapprehension of the facts or of the relevant law. The Court should not allow a party to re-agitate arguments already put and dealt with under the guise of an application that the Court reconsider its judgment.’ 26
[25] Ai Group also submits that parties seeking to set aside the Penalty Rates decision have failed to discharge the heavy burden required and are seeking to set aside the decision so that they may re-put earlier submissions against the reduction in Sunday penalty rates.
[26] Australian Business Industrial and the New South Wales Business Chamber (jointly ABI) submit it is inappropriate for the Commission to re-open, or for the parties to re-litigate, the matters that have been determined in the Penalty Rates decision 27 and that the Commission is not empowered to vary or revoke its decision pursuant to s.603(3) of the Fair Work Act 2009 (the Act).28 ABI also submits that if a party believes the Commission has improperly exercised its functions in the Penalty Rates decision or that the decision is affected by some error, then it should seek judicial review of the decision in the Federal Court.29
[27] In relation to the last point we note that United Voice has indicated its intention to seek judicial review of the Penalty Rates decision alleging jurisdictional error. 30 Further, on 4 May 2017, the SDA filed a further submission advising of its intention to seek judicial review of any determinations the Commission may make giving effect to the Penalty Rates decision. 31
[28] The Pharmacy Guild of Australia (Pharmacy Guild) 32, Retail Associations33, Australian Federation of Employers and Industry (AFEI)34 and Australian Chamber of Commerce and Industry (ACCI)35 also submit that the Commission should reject the submissions which ask us to revoke or not implement the Penalty Rates decision.
[29] Those parties who contend that we should ‘set aside’ or not implement the Penalty Rates decision did not identify the source of the power to take the action proposed.
[30] Section 603 of the Act sets out the Commission’s power to vary or revoke decisions:
603 Varying and revoking the FWC’s decisions
(1) The FWC may vary or revoke a decision of the FWC that is made under this Act (other than a decision referred to in subsection (3)).
Note: If the FWC makes a decision to make an instrument, the FWC may vary or revoke the instrument under this subsection (see subsection 598(2)).
(2) The FWC may vary or revoke a decision under this section:
(a) on its own initiative; or
(b) on application by:
(i) a person who is affected by the decision; or
(ii) if the kind of decision is prescribed by the regulations—a person prescribed by the regulations in relation to that kind of decision.
(3) The FWC must not vary or revoke any of the following decisions of the FWC under this section:
(a) a decision under Part 2-3 (which deals with modern awards)
(b) a decision under section 235 or Division 4, 7, 9 or 10 of Part 2-4 (which deal with enterprise agreements);
(c) a decision under Part 2-5 (which deals with workplace determinations);
(d) a decision under Part 2-6 (which deals with minimum wages);
(e) a decision under Division 3 of Part 2-8 (which deals with transfer of business);
(f) a decision under Division 8 of Part 3-3 (which deals with protected action ballots);
(g) a decision under section 472 (which deals with partial work bans);
(h) a decision that is prescribed by the regulations.
Note: The FWC can vary or revoke decisions, and instruments made by decisions, under other provisions of this Act (see, for example, sections 447 and 448).
[31] Subsection 603(1) confers a discretion to vary or revoke ‘a decision of the FWC that is made under this Act (other than a decision referred to in subsection (3)). Subsection 603(3)(a) expressly excludes decisions under Part 2-3 of the Act. The Penalty Rates decision is a decision under Part 2-3 of the Act, it follows that s.603 does not provide a source of power for the revocation of that decision.
[32] Given that the legislature may be said – by the enactment of s.603 – to have turned its mind to the circumstances in which a Commission decision may be varied or revoked, it may be that the common law principles referred to by Ai Group are impliedly excluded. 36 However, for the reasons which follow, it is not necessary for us to determine whether there is an implied power to revoke a decision and, if there is, the circumstances in which the power may be exercised.
[33] As we have mentioned, those who contend that we should ‘set aside’ or not implement the Penalty Rates decision advance three broad lines of argument in support of that proposition (see [20] above). We propose to deal with each of those in turn.
[34] The first proposition is that the Penalty Rates decision gave either no weight or insufficient weight to the impact on the affected employees of cutting penalty rates. In essence, it is said that the Full Bench failed to take into account the ‘relative living standards and the needs of the low paid’, as it was required to do by s.134(1)(a). In our view, there is no substance to this proposition.
[35] Chapter 3.2 of the Penalty Rates decision deals with the statutory framework and, relevantly, the Full Bench observes that:
- the modern awards objective applies to the Review (at [113]); and
- s.134(1)(a) requires that the Commission take into account ‘relative living standards and the needs of the low paid’ (at [165]).
[36] Further, the impact of the proposed reductions in penalty rates upon affected employees was expressly considered in the context of each of the relevant modern awards:
- the Hospitality Award
- United Voice’s lay witness evidence: [784]–[815];
- s.134(1)(a): [817]–[824] and [886].
- the Fast Food Award
- the SDA called no lay witness evidence in respect of the impact upon employees of the proposed reduction in penalty rates;
- s.134(1)(a): [1356]–[1359].
- the Pharmacy Award
- SDA and APESMA lay witness evidence: [1815]–[1821];
- s.134(1)(a): [1826]–[1830].
- the Retail Award
- SDA lay witness evidence: [1623]–[1654];
- s.134(1)(a): [1656]–[1661].
[37] In addition to the fact that s.134(1)(a) was expressly considered and taken into account, it needs to be borne in mind that the Act accords no particular primacy to any one of the s.134 considerations and, further, while the Commission must take into account the matters set out at s.134(1)(a)–(h), the relevant question is whether the modern award, together with the NES, provides a fair and relevant minimum safety net of terms and conditions. In respect of the Hospitality, Fast Food, Retail and Pharmacy Awards, the Penalty Rates decision determined that the existing Sunday penalty rates did not achieve the modern awards objective, as they did not provide a fair and relevant minimum safety net.
[38] The second broad line of argument in support of the contention that the Penalty Rates decision be set aside or not implemented is the proposition that any variation of a modern award which results in the reduction of take home pay is inconsistent with the legislative purpose of s.134(1)(da) of the Act. This argument is advanced by the Federal Opposition at paragraphs 1.2.3–1.2.4 of its submission:
‘In 2013, the Gillard Government amended the modern awards objective to ensure that the Commission, in varying modern awards, must take into account the need to provide additional remuneration for employees working outside normal hours, such as employees working overtime or on weekends. 37 At the time, the Minister for Workplace Relations, Bill Shorten, said
It was never contemplated that the legislation would allow variations of modern awards to result in a reduction of the safety net. While we respect the independence of the Commission, any variation of a modern award which results in the reduction of take-home pay is unacceptable and inconsistent with the intention of the Parliament.’ 38
“Our bill makes it clear that this Labor government believes in the value and utility of penalty rates…”
[39] The proper construction of s.134(1)(da) was the subject of detailed consideration in the Penalty Rates decision (see [184]–[203]), relevantly for present purposes, the Full Bench said (at [193]–[198]):
‘As mentioned, s.134(1)(da) speaks of the ‘need’ to provide additional remuneration. We note that the minority in Re Restaurant and Catering Association of Victoria (the Restaurants 2014 Penalty Rates decision) made the following observation about s.134(1)(da):
“…the objective requires additional remuneration for working on weekends. As the current provisions do so, they meet this element of the objective.” (emphasis added)
To the extent that the above passage suggests that s.134(1)(da) ‘requires additional remuneration for working on weekends’, we respectfully disagree. We acknowledge that the provision speaks of ‘the need for additional remuneration’ and that such language suggests that additional remuneration is required for employees working in the circumstances identified in paragraphs 134(1)(da)(i) to (iv). But the expression ‘the need for additional remuneration’ must be construed in context, and the context tells against the proposition that s.134(1)(da) requires additional remuneration be provided for working in the identified circumstances.
Section s.134(1)(da) is a relevant consideration, it is not a statutory directive that additional remuneration must be paid to employees working in the circumstances mentioned in paragraphs 134(1)(da)(i), (ii), (iii) or (iv). Section 134(1)(da) is a consideration which we are required to take into account…
Importantly, the requirement to take a matter into account does not mean that the matter is necessarily a determinative consideration. This is particularly so in the context of s.134 because s.134(1)(da) is one of a number of considerations which we are required to take into account. No particular primacy is attached to any of the s.134 considerations. The Commission’s task is to take into account the various considerations and ensure that the modern award provides a ‘fair and relevant minimum safety net’.
A further contextual consideration is that ‘overtime rates’ and ‘penalty rates’ (including penalty rates for employees working on weekends or public holidays) are terms that may be included in a modern award (s.139(1)(d) and (e)); they are not terms that must be included in a modern award. As the Full Bench observed in the 4 yearly review of modern awards – Common issue – Award Flexibility decision:
“… s.134(1)(da) does not amount to a statutory directive that modern awards must provide additional remuneration for employees working overtime and may be distinguished from the terms in Subdivision C of Division 3 of Part 2-3 which must be included in modern awards…”
Further, if s.134(1)(da) was construed such as to require additional remuneration for employees working, for example, on weekends, it would have significant consequences for the modern award system, given that about half of all modern awards currently make no provision for weekend penalty rates. If the legislative intention had been to mandate weekend penalty rates in all modern awards then one would have expected that some reference to the consequences of such a provision would have been made in the extrinsic materials.’ (references omitted)
[40] Contrary to the submission put, we are not persuaded that the terms of s.134(1)(da), construed in context, support the proposition that there is no power to vary a modern award if such a variation results in a reduction in take home pay.
[41] Further, the modern awards objective is that the Commission ensure that modern awards, together with the NES, ‘provide a fair and relevant minimum safety net of terms and conditions’. As observed in the Penalty Rates decision, fairness in this context is to be assessed from the perspective of the employees and employers covered by the modern award in question and the word ‘relevant’ is intended to convey that a modern award should be suited to contemporary circumstances. 39 The notion that the terms and conditions in modern awards can never be reduced, if such a variation results in a reduction in take home pay, seems inconsistent with the key concepts inherent in the modern awards objective. For the reasons given we are not persuaded that there is any substance in the proposition advanced.
[42] The third line of argument is that there are no transitional arrangements which could ameliorate the impact of the penalty rates reductions so as to prevent significant disadvantage to the employees affected.
[43] We accept that while the transitional arrangements determined in this decision will ameliorate the adverse impact of our decision upon the employees affected, it will not remove that impact and the implementation of the variations we propose (albeit over an extended time period) are still likely to reduce the earnings of the employees affected. The phased reductions in Sunday penalty rates that we intend to make will be implemented at the same time as the implementation of any increases arising from the Annual Wage Review decision. This will usually mean that the affected employees will receive an increase in their base hourly rate of pay at the same time as they are affected by a reduction in Sunday penalty rates. As such, the take home pay of the employees concerned may not reduce to the same extent as it otherwise would – but it is also important to acknowledge that they will receive a reduction in the earnings they would have received but for the implementation of the Penalty Rates decision. Accordingly, any Annual Wage Review increase cannot be said to ameliorate the impact of our decision. It is the phased implementation of the Sunday penalty rate cuts which provides a degree of amelioration.
[44] However, while we accept that the reductions we have determined will adversely impact employees, that is a matter that we have already considered and balanced in the Penalty Rates decision and it is not a basis upon which we would propose to ‘set aside’ or ‘not implement’ the Penalty Rates decision. Nor are we persuaded that the range of other considerations advanced in support of the general proposition provide a sufficiently cogent basis for adopting the course proposed. Each of these matters was considered in the Penalty Rates decision.
[45] For the reasons given, we reject the proposition that we should set aside or not implement the Penalty Rates decision.
3.2 The onus issue
[46] In its reply submission ACCI submits that:
‘The burden of proof…should lie with any party wishing to depart from the Commission’s provisional view...Unions and those supporting them must bear the burden of convincing the Commission that it should depart from its provisional views on implementation.’ 40
[47] The proposition advanced is misconceived, for two reasons.
[48] First, the views expressed in the Penalty Rates decision in respect of the transitional arrangements for the implementation of the reductions in Sunday penalty rates were provisional views only. As we have mentioned, the submissions before us at that time had given little attention to the implementation of any variations to Sunday penalty rates arising from the proceedings. Nor was this issue the subject of any significant oral argument. In these circumstances the provisional views were provided to assist those parties who wished to make submissions as to the form of the transitional arrangements. We note that United Voice, the SDA and a number of employer organisations have proposed transitional arrangements which differ from the provisional views we have expressed. The provisional views were not provided with the intention of creating an additional hurdle for those who wished to express a contrary view.
[49] Second, it is doubtful how far the notion of onus of proof is relevant at all to Commission proceedings, 41 as Woodward J observed in McDonald v Director – General of Social Security,42in respect of administrative tribunals, generally:
‘The first point to be made is that the onus (or burden) of proof is a common law concept, developed with some difficulty over many years, to provide answers to certain practical problems of litigation between parties in a court of law. One of the chief difficulties of the concept has been the necessity to distinguish between its so-called "legal" and "evidential" aspects.
The concept is concerned with matters such as the order of presentation of evidence and the decision a court should give when it is left in a state of uncertainty by the evidence on a particular issue.
The use outside courts of law of the legal rules governing this part of the law of evidence should be approached with great caution. This is particularly true of an administrative tribunal which, by its statute "is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate"
Such a tribunal will still have to determine practical problems such as the sequence of receiving evidence and what to do if it is unable to reach a clear conclusion on an issue, but it is more likely to find the answer to such questions in the statutes under which it is operating, or in considerations of natural justice or common sense, than in the technical rules relating to onus of proof developed by the courts. However these may be of assistance in some cases where the legislation is silent.’ 43
[50] We acknowledge that in inter partes adversarial proceedings (such as applications for equal remuneration orders under Part 2-7 44 or for orders, under s.418, that industrial action stop45) applicants may be said to bear the burden of persuading the Commission as to the existence of the requisite jurisdictional facts. But, whatever may be the position with respect to inter partes proceedings, these are 4 yearly review proceedings. Section 156 imposes an obligation on the Commission to review all modern awards. The Review is conducted on the Commission’s own motion and is not dependent upon an application by an interested party. The Review is plainly distinguishable from inter partes proceedings.
[51] The Commission’s task in the Review is to determine whether a particular modern award achieves the modern awards objective. If a modern award is not achieving the modern awards objective then it is to be varied such that it only includes terms that are ‘necessary to achieve the modern awards objective’ (s.138).
[52] Also, as we said in the Penalty Rates decision 46 variations to modern awards must be justified on their merits and the extent of the merit argument required will depend on the circumstances. But that observation is not intended to import the common law notion of onus or burden of proof. Ultimately, the Commission must be satisfied that a modern award is not achieving the modern awards objective and requires variation.
[53] To some extent Review proceedings may be said to be analogous to the determination by a court of the proper meaning and effect of an industrial instrument. In the Review it is for the Commission to determine whether a modern award achieves the modern awards objective, informing itself as it sees fit. Similarly, in construing the proper meaning and effect of an industrial instrument, the question for determination is a matter for the court. As White J observed in NTEU v La Trobe University: 47
‘It is appropriate to commence by reference to the University’s submission with respect to onus. The University submitted that the appellant had borne the onus at first instance of establishing that its construction of cl 74 was correct and, accordingly, that the issue raised on the appeal was whether it had discharged that onus.
In my opinion, it is inappropriate to approach the determination of the appeal on that basis. As the primary Judge recognised, the question before him was one of construction, that is, the determination of the proper meaning and effect of cl 74. Questions of that kind do not involve an onus in the sense of the moving party having to discharge an evidentiary or persuasive burden. That is because there is but one correct construction of cl 74. That construction does not vary according to which of the parties to the litigation is the moving party. To hold that the moving party has an onus is to suppose that there is an available meaning for the moving party to displace. That is an erroneous view.’ 48
3.3 The power to make transitional arrangements and discretionary considerations
[54] In the Penalty Rates decision we expressed a concluded view as to the need to provide appropriate transitional arrangements, in the following terms:
‘The immediate implementation of all of the variations we propose would inevitably cause some hardship to the employees affected, particularly those who work on Sundays. There is plainly a need for appropriate transitional arrangements to mitigate such hardship…
We have given some consideration to the form of the transitional arrangements to apply to the reductions in Sunday penalty rates we propose. We have concluded that appropriate transitional arrangements are necessary to mitigate the hardship caused to employees who work on Sundays.’ 49
[55] One of the questions on notice put to all parties in the present proceedings was in the following terms:
‘It appears to be common ground that the Commission should take steps to mitigate the impact of the Decision on the affected employees.
Does any interested party take a different view?’
[56] Ai Group, 50 ACCI,51 the Pharmacy Guild52 and the SDA53 responded by acknowledging that we should take steps to mitigate the impact of the reduction in penalty rates on the affected employees, though they differed as to how this was to be done. Of the principal parties, only RCI54 expressed a contrary view. It proposed the full implementation of the Penalty Rates decision from no later than 1 July 2017.55
[57] We have considered the submissions made and confirm the views expressed in the Penalty Rates decision that there is a need for appropriate transitional arrangements to mitigate hardship.
[58] We note that in response to Question 3.1, no party contended that we lacked the requisite power to make appropriate transitional arrangements. It seems to us that such a power necessarily follows from the terms of the modern awards objective, that is, fairness requires that the reductions in Sunday penalty rates be subject to appropriate transitional arrangements. 56
[59] What then is to guide the exercise of the Commission’s discretion in the determination of appropriate transitional arrangements?
[60] At paragraph [43] of its submission, Ai Group submits that in determining the transitional arrangements for the reduction in penalty rates, the Full Bench must act consistently with:
‘(a) its statutory charter, including the exercise its powers under the FW Act in a manner that is fair and just (see section 577(a) of the FW Act);
(b) its principle that fairness is assessed from the perspective of both employer and employee (and not simply from the perspective of the employee) (see Penalty Rates Decision at [37], [117], [118], [151], [885], [1701], [1877], [1948]);
(c) the objects of the relevant Part (see section 578(a) of the FW Act);
(d) the merits of the matter (see section 578(b) of the FW Act);
(e) its findings and conclusions in the Penalty Rates Decision;
(f) the evidence in the proceedings;
(g) the extent of the reductions in the existing Sunday penalty rates; and
(h) the approach adopted by other Full Benches to the staggered introduction of reductions in penalty rates.’57
[61] We put a question on notice to all parties setting out the above extract from Ai Group’s submission and asking whether any interested party held a contrary view.
[62] The Hospitality Employers agreed with Ai Group and did not advance a contrary view. ABI generally agreed with the proposition advanced by Ai Group but added that the Commission had an obligation to ensure that any transitional arrangements meet the modern awards objective and are included only to the extent necessary to meet that objective (as required by s.138 of the Act).
[63] The SDA accepted that in fixing appropriate transitional arrangements we must act consistently with the matters identified in subparagraphs (a), (c), (d), (e), (f) and (g) of Ai Group’s submissions. The SDA did not agree that we must (or should) act consistently with the matters described in subparagraphs (b) and (h).
[64] United Voice agreed that the matters identified in subparagraphs (a) to (g) of Ai Group’s submission are relevant to the task of determining appropriate transitional arrangements for both Sunday and public holiday penalty rate reductions. In respect of subparagraph (b), United Voice submitted that the position of the employees affected was particularly relevant, but did not put it more highly than that. 58 As to the matter identified in subparagraph (h), United Voice submits that while the decisions of other Full Benches may be illustrative, the relevant considerations may be quite different between previous cases and this case.
[65] We agree with ABI that any transitional arrangements must meet the modern awards objective and must only be included in a modern award to the extent necessary to meet that objective. It seems to us that this is the overriding statutory requirement and accordingly it is our central focus.
[66] As to the s.134 considerations (set out in s.134(1)(a)–(h)) our findings in the Penalty Rates decision in respect of those matters will be relevant and, further, the setting of transitional arrangements will require a particular focus on:
- relative living standards and the needs of the low paid (s.134(1)(a));
- the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden (s.134(1)(f)); and
- the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards (s.134(1)(g)).
[67] We also agree with the proposition that we must perform our functions and exercise our powers in a manner which is ‘fair and just’ (as required by s.577(a)) and must take into account the objects of the Act and ‘equity, good conscience and the merits of the matter’ (s.578).
[68] As to the other matters identified by Ai Group, we agree that the evidence and our findings and conclusions in the Penalty Rates decision are relevant; as is the extent of the reductions in existing Sunday penalty rates.
[69] We also agree with the proposition that fairness is a relevant consideration, given that the modern awards objective speaks of a ‘fair and relevant minimum safety net’. Contrary to the SDA’s submission, fairness in this context is to be assessed from the perspective of both the employees and employers covered by the modern award in question. 59 While the impact of the reductions in penalty rates on the employees affected is a plainly relevant and important consideration in our determination of appropriate transitional arrangements, we agree with Ai Group that it is not appropriate to ‘totally subjugate’ the interests of the employers to those of the employees.60
[70] Contrary to Ai Group’s submission, we reject the proposition that we ‘must act consistently with …the approach adopted by other Full Benches to the staggered introduction of reductions in penalty rates’ (para (h) at [61] above).
[71] Although the Commission is not bound by principles of stare decisis it has generally followed previous Full Bench decisions. In another context three members of the High Court observed in Nguyen v Nguyen:
‘Where a court of appeal holds itself free to depart from an earlier decision it should do so cautiously and only when compelled to the conclusion that the earlier decision is wrong. The occasion upon which the departure from previous authority is warranted are infrequent and exceptional and pose no real threat to the doctrine of precedent and the predictability of the law: see Queensland v The Commonwealth per Aickin J at 620.’ 61
[72] While the Commission is not a court, the public interest considerations underlying these observations have been applied with similar, if not equal, force to appeal proceedings in the Commission. 62 As a Full Bench of the Australian Industrial Relations Commission observed in Cetin v Ripon Pty Ltd (T/as Parkview Hotel) (Cetin)63:
‘Although the Commission is not, as a non-judicial body, bound by principles of stare decisis, as a matter of policy and sound administration it has generally followed previous Full Bench decisions relating to the issue to be determined, in the absence of cogent reasons for not doing so.’ 64
[73] However, as observed by the Full Bench in the Preliminary Jurisdictional Issues decision, while it is appropriate to take account of previous decisions relevant to a contested issue arising in the Review, it is necessary to consider the context in which those decisions were made. The particular context may be a cogent reason for not following a previous Full Bench decision, for example:
- the legislative context which pertained at that time may be materially different from the Act;
- the extent to which the relevant issue was contested and, in particular, the extent of the evidence and submissions put in the previous proceeding will be relevant to the weight to be accorded to the previous decision; or
- the extent of the previous Full Bench’s consideration of the contested issue. The absence of detailed reasons in a previous decision may be a factor in considering the weight to be accorded to the decision.
[74] Ai Group contended that in considering the appropriate transitional arrangements in the matters before us we should apply the reasoning of the majority in the 2014 Restaurants Penalty Rates decision. 65In that matter, the decision was handed down on 14 May 2014 and on 4 June 2014 a determination66 was made to vary the award so as to reduce the level of penalty rates payable to certain casual employees for Sunday work, to take effect on 1 July 2014 (some 7 weeks after the substantive decision). No reasons were given for the decision to implement the reduction in penalty rates on 1 July 2014, without any transitional provisions.
[75] We reject the proposition advanced by Ai Group, for three reasons. First, the determination of appropriate transitional arrangements is a discretionary decision which depends on the relevant context. The determination of such issues in other cases is of limited assistance. The policy considerations which underpin the proposition that a previous Full Bench decision should usually be followed is more apposite to the determination of legal issues – such as the proper construction of the Act – not discretionary decisions.
[76] Second, the legislative context was different – the 2014 Restaurants Penalty Rates decision was determined in the Transitional Review and, third, the issue of appropriate transitional provisions does not appear to have been the subject of much debate in those proceedings (a point conceded by Ai Group 67) and nor were any reasons given for the operative date determined.
[77] As mentioned above, the findings and conclusions in the Penalty Rates decision are relevant to our determination of appropriate transitional arrangements. Certain findings and conclusions were specific to particular modern awards (and we refer to them when we turn to deal with each modern award) and others generally applied to each of the modern awards before us. It is convenient to mention here the three general findings and conclusions. They relate to the employment effects of the proposed reductions in Sunday penalty rates; the relative disutility of Sunday work; and the conclusion as to whether the existing rates met the modern awards objective.
(i) Employment effects
[78] In the substantive proceedings a number of expert witnesses gave evidence in relation to the employment effects of penalty rates. This material is dealt with in Chapter 6.3 of the Penalty Rates decision and on the basis of that evidence we concluded that ‘reducing penalty rates may have a modest positive effect on employment’. 68
[79] In respect of a number of particular modern awards we indicated that the employer lay evidence supported that general conclusion:
- Hospitality Award (at [829])
- Retail Award (at [1666])
- Pharmacy Award (at [1835])
[80] In relation to the Fast Food Award the Penalty Rates decision noted that there was a paucity of direct evidence from industry participants about the employment effects of reducing the Sunday penalty rate 69 and concluded that;
‘On the basis of the common evidence . . . a reduction in the Sunday penalty rate in the Fast Food Award (from 150 per cent to 125 per cent) is likely to lead to some increase in employment, albeit only a modest increase.’ 70
[81] A number of the submissions advanced by employer organisations in these proceedings contend that a shorter transition period will result in positive employment effects materialising earlier. While this is so, the above findings from the Penalty Rates decision need to be borne in mind. In particular, the views expressed about the potential for positive employment effects consequent upon a reduction in Sunday penalty rates were somewhat muted and cautious. As such, the force of the various employer submissions which rely on positive employment effects to support a shorter transition period are somewhat diminished.
[82] However, it is relevant to note that the findings in the Penalty Rates decision in respect of the positive effect of a reduction in Sunday penalty rates were not limited to the employment effects. In particular, we concluded that the evidence supported the proposition that a reduction in penalty rates is likely to lead to:
- increased trading hours on Sundays and public holidays;
- a reduction in the hours worked by some owner operators;
- an increase in the level and range of services offered on Sundays and public holidays; and
- an increase in overall hours worked.
(ii) The relative disutility of Sunday work
[83] As observed in the Penalty Rates decision, the issue in the substantive proceedings was whether the relevant modern award(s) prescribed a Sunday penalty rate that provide a ‘fair and relevant minimum safety net’ and that:
‘A central consideration in this regard is whether a particular penalty rate provides employees with ‘fair and relevant’ compensation for the disutility associated with working at the particular time(s) to which the penalty attaches.’ 71
[84] The common evidence in respect of the relative disutility of weekend work (and, relevantly, Sunday work) is dealt with in Chapters 6.1 and 6.2 of the Penalty Rates decision. On the basis of that evidence we concluded that:
‘There is a disutility associated with weekend work, above that applicable to work performed from Monday to Friday. Generally speaking, for many workers Sunday work has a higher level of disutility than Saturday work, though the extent of that disutility is much less than in times past.’ 72
[85] The above conclusion was relied on in respect of each of the 4 modern awards in which it was decided to reduce Sunday penalty rates.
[86] In respect of the Hospitality Award we said (at [860]):
‘We now turn to matter (i), the extent of the disutility of, relevantly, Sunday work. In addition to the findings set out in Chapter 6, the lay witness evidence led by United Voice spoke to the adverse impact of weekend work on the ability of hospitality sector employees to engage in social and familial activities. While for some of those witnesses Sunday work had a particularly adverse impact, most simply referred to the impact of weekend work and did not distinguish between Saturday and Sunday work.’ 73
[87] As to the Fast Food Award we said (at [1376] – [1378] and [1388] – [1390]):
‘As mentioned in Chapter 3, compensating employees for the disutility associated with working on weekends is a primary consideration in the setting of weekend penalty rates. Assessing the extent of the disutility of working at such times or on such days (issue (i) above) includes an assessment of the impact of such work on employee health and work-life balance, taking into account the preferences of the employees for working at those times. In the Fast Food industry, Sunday work is not associated with a higher rate of safety incidents (i.e. number of reported incidents divided by number of employees working).
The Ai Group survey provides a useful source of information on employee disutility associated with Sunday work. The Ai Group employee survey results show a marked difference in the willingness to work some or more hours on a Sunday based on age (see Chart 45). Almost three in four respondents (73 per cent) aged under 21 years of age were willing to work some or more hours on a Sunday, compared to just over half (56 per cent) employees aged 21 years or older. The responses to a number of other, related, survey questions also show a strong correlation to the age of the respondent, namely:
-
Preferred day to work: generally speaking, the preference for working only weekdays (i.e. Monday to Friday) – and by inference the preference to not work on weekends – increased with age. Twice as many respondents aged 21 years and over (54 per cent) preferred not to work on weekends compared to those aged 14 to 20 years (26 per cent).
-
Negative impact of Sunday work: a significantly higher proportion of respondents aged 21 years and over (55.1 per cent) reported some or a lot of negative impact of working on Sundays on spending time with family and friends, compared to respondents aged 14 to 20 years (42.3 per cent). Almost three times as many employees aged 21 years and over (15.4 per cent) reported a lot of negative impact, compared to those aged 14 to 20 years (5.2 per cent). Similarly, just over half (51.2 per cent) of respondents aged 14 to 20 years reported ‘no impact of working on Sundays on spending time with family and friends, compared to 39 per cent of respondents aged 21 years and over.
It is also likely that the correlation between the reported experiences and preferences and age is influenced by the student status of the employee respondent. In this regard we note that 73.4 per cent of full-time students indicated that they would work some or more hours on a Sunday, if offered.1203 Full-time students also indicated a much stronger preference for working a mix of weekdays and weekends (70.3 per cent) than non-students (41.7 per cent).’ 74
. . .
The central issue is whether the existing Sunday penalty rate provides a ‘fair and relevant minimum safety net’. In relation to level 1 employees we have concluded that the existing Sunday penalty rate is neither fair nor relevant. The evidence as to the work preferences and experiences of level 1 employees leads us to conclude that the existing penalty rate overcompensates those employees for the level of disutility associated with Sunday work. That evidence supports a reduction in the Sunday penalty rate, for level 1 employees, from 150 per cent to 125 per cent.
The position in respect of level 2 and 3 employees is quite different. There is a clear distinction between the reported preferences and experiences of level 1 employees (using those aged 14 to 20 years as a proxy), and those employees classified at levels 2 and 3. In terms of reported preferences, level 1 employees (compared to level 2 and 3 employees) are more likely to express a preference for weekend work (either weekends only or a mix of weekdays and weekends) and a willingness to work some or more hours on a Sunday.
In terms of their reported experiences, level 2 and 3 employees (compared to level 1 employees) are more likely to report some or a lot of negative impact from working on Sundays on spending time with family and friends and less likely to report no impact of working on Sundays on spending time with family and friends. 75
[88] As to the Retail Award we said (at [1678] – [1679]):
‘We now turn to matter (i), the extent of the disutility of, relevantly, Sunday work. In addition to the findings set out in Chapter 6, the lay witness evidence led by the SDA spoke to the adverse impact of weekend work on the ability of retail sector employees to engage in social and family activities.
While for some of those witnesses Sunday work had a particularly adverse impact, others simply referred to the impact of weekend work and one said that the intrusion into their social activities of Saturday and Sunday work was ‘about the same’. 76
[89] As to the Pharmacy Award we said (at [1851]):
‘We now turn to matter (i), the extent of the disutility of, relevantly, Sunday work. In addition to the findings set out in Chapter 6, the lay witness evidence led by the SDA and APESMA (albeit limited) spoke to the adverse impact of weekend work on the ability of pharmacy employees to engage in social and family activities.’ 77
[90] The finding that the relative disutility of Sunday work (as opposed to Saturday work) is ‘much less than in times past’ informed our conclusion that the existing Sunday penalty rates in the Hospitality, Fast Food, Retail and Pharmacy Awards do not provide a fair and relevant safety net. We now turn to that conclusion.
(iii) Modern awards objective
[91] In relation to the Hospitality, Fast Food, Retail and Pharmacy Awards, the Penalty Rates decision expressed consistent findings as to the modern awards objective, namely that the existing Sunday penalty rates are neither fair nor relevant. 78 The decision in respect of these 4 modern awards was summarised at [53] of the Penalty Rates decision:
‘We have decided that the existing Sunday penalty rates in 4 of the modern awards before us (the Hospitality, Fast Food, Retail and Pharmacy Awards) do not achieve the modern awards objective, as they do not provide a fair and relevant minimum safety net.’ 79
[92] The finding that the existing Sunday penalty rates in the Hospitality, Fast Food, Retail and Pharmacy Awards do not achieve the modern awards objective (because they do not provide a fair and relevant safety net) is a consideration which plainly supports the timely implementation of the reduction in Sunday penalty rates in these awards.
3.4 Take-home pay orders
[93] We now turn to the issue of ‘take-home pay orders’. In short, the purpose of a take-home pay order is to compensate an employee for any reduction in their pay as a result of the making of a modern award or the transitional arrangements in a modern award. The relevant statutory provisions are not without a degree of complexity.
[94] Take-home pay orders are dealt with in the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the TPCA Act), as modified by the Fair Work (Transitional Provisions and Consequential Amendments) Regulations 2009 (the TP Regulations). Take-home pay orders can only be made under Part 3, item 9 of Schedule 5 to the TPCA Act in respect of a ‘modernisation-related reduction in take-home pay’. An employee suffers a ‘modernisation-related reduction in take-home pay’ in the prescribed circumstances, which include that the reduction in take-home pay is attributable to the Part 10A award modernisation process (item 8(3)(d)) or to certain variations to modern awards to deal with residual issues arising from the award modernisation process (item 8A(4)(e)). 80 Persons employed after the commencement of the modern award are not eligible for an item 9 take-home pay order (items 8(3)(b) and 8A(4)(c)).
[95] The Commission is also empowered to make take-home pay orders under clauses in modern awards, based on the model transitional provisions inserted in awards by the Award Modernisation Decision of 1 September 2009 81. In the Award Modernisation Decision the Full Bench stated that the model transitional provisions were designed to protect the take-home pay of those workers affected by the introduction of modern awards, as well as those affected by the operation of transitional provisions in those awards, being transitional provisions which provided for ‘a phased reduction in pre-modern award conditions’.82
[96] The take-home pay order clause included in the modern awards which were the subject of the Penalty Rates decision is in the following terms:
‘Neither the making of this award nor the operation of any transitional arrangements is intended to result in a reduction in the take-home pay of employees covered by the award. On application by or on behalf of an employee who suffers a reduction in take-home pay as a result of the making of this award or the operation of any transitional arrangements, the Fair Work Commission may make any order it considers appropriate to remedy the situation.’
[97] Item 13A of Part 3A was inserted in Schedule 5 to the TPCA Act to ensure the validity of these transitional provisions, and was given retrospective operation from 1 January 2010 to align with the commencement of modern awards. The Fair Work (Transitional Provisions and Consequential Amendments) Amendment Regulations 2010 (No. 1) (the TP Amendment Regulations) amended the TP Regulations to insert Part 3A in Schedule 5 to the TPCA Act (new regulation 3B.04).
[98] Item 13A provides that modern awards may include terms that give the Commission power to make a take-home pay order where an employee has suffered a reduction in take-home pay, where that reduction is a result of the making of a modern award or the operation of any transitional arrangements in relation to the award (whether or not the reduction is a modernisation-related reduction in take-home pay).
[99] The Explanatory Statement to the TP Amendment Regulations provides as follows:
Regulation 3B.04 modifies Schedule 5 of the Act to ensure that modern awards can contain provisions which confer power on FWA to make take-home pay orders.
The AIRC, as part of the award modernisation process, included transitional provisions in modern awards allowing FWA to make take-home pay orders. The award take-home pay provisions allow FWA to make orders to remedy reductions in an employee’s take-home pay caused by the making of the modern award or the operation of transitional arrangements in the award.
The Government is concerned to ensure that it is not open to argue that the take-home pay provisions in modern awards are invalid because, as a statutory body, FWA only has the powers conferred on it by statute (not by the terms of an award). The protection afforded by such provisions in modern awards assists in ensuring that the award modernisation process does not result in the take-home pay of employees being reduced. Consequently, the Government considers it desirable that there be no doubt about the validity of such provisions in modern awards. This regulation removes any such doubt.
Regulation 3B.04 modifies Schedule 5 to the Act by inserting new Part 3A which validates provisions in modern awards that confer power on FWA to make take-home pay orders (this is achieved by new item 13A). New item 13A ensures that modern awards have always been able to confer power on FWA to make take-home pay orders remedying reductions in take-home pay suffered by an employee or class of employees because of the making of a modern award or the operation of transitional arrangements in the award. The new item allows award terms to confer power on FWA to remedy reductions in take-home pay even if those reductions are not a ‘modernisation-related reduction in take-home pay’ within the meaning of the Act.
New item 13A is intended to allow modern awards to include terms protecting the take-home pay of a broader class of employees than the take-home pay provisions in Part 3 of Schedule 5 to the Act. Modern awards include provisions allowing new employees (i.e. those employed after the commencement of the modern award) to obtain a take-home pay order with respect to reductions in take-home pay that occur as a result of the transitional arrangements in the award (a reference to the phasing in of differences between the pay rates in pre-modernised awards and modern awards) This is different to the take-home pay provisions in Part 3 of Schedule 5 which require the employee to be employed in the same position as the position he or she was employed in immediately before the modern award came into operation (see item 8(3)(b) of Schedule 5 to the Act). The validation of these provisions in modern awards furthers the commitment made by the Government that the award modernisation process not reduce the take‑home pay of employees.83
[100] Item 13A of the TPCA Act and the take-home pay order clauses in modern awards are limited to reductions in take-home pay suffered by employees as a result of the award modernisation process, including as a result of any transitional arrangements phasing in differences between the pay rates in pre-modernised awards and modern awards. Item 13A was inserted to address both the inclusion of take-home pay order terms in modern awards, and their scope, which expands the class of employees eligible to seek a take-home pay order to include employees employed after the commencement of modern awards (who are not eligible for a take-home pay order under Part 3, item 9 of Schedule 5 to the TPCA Act).
[101] Any reductions in take-home pay arising from the Penalty Rates decision will not be attributable to the award modernisation process or any residual issues arising from that process, but, rather, will result from the variation of specified modern awards as part of the 4 yearly review of modern awards. It follows that take-home pay orders are not available to mitigate the impact of the proposed reduction in Sunday (or public holiday) penalty rates.
[102] One of the questions on notice put to all parties in the present proceedings was in the following terms:
‘It seems to be common ground that the take home pay order provisions of the TPCA Act are not an available option to mitigate the impact of the reductions in penalty rates set out in the Penalty Rates decision.
Does any interested party take a different view?’
[103] No party expressed a view contrary to that posed in the question. Ai Group 84, ACCI85, the Hospitality Employees86, ABI87, the Pharmacy Guild88, RCI89, the SDA90 and United Voice91 all submitted that the take-home pay provisions of the TPCA Act were not an available option to mitigate the impact of the reductions in penalty rates.
[104] We note that the Small Business and Family Enterprise Ombudsman (Small Business Ombudsman) submitted that ‘at the end of the transition period, the Fair Work Commission should consider granting take-home pay orders for individuals to mitigate the effects of any gap that remains between the amounts of their earnings with and without application of the Sunday penalty rate’. 92
[105] We put a question on notice to the Small Business Ombudsman in the following terms:
‘What is the source of the Commission’s power to make the take home pay orders proposed?’
[106] No response was received. Given the lack of response and our view as to the scope of the power conferred by the TPCA Act and TP Regulations to make take-home pay orders we do not propose to adopt the Small Business Ombudsman’s proposal.
[107] We also put a question on notice to the Australian Government in the following terms:
‘Is there any present intention to amend the Fair Work Act 2009 (Cth) to provide the Commission with a discretion to make take-home pay orders that may mitigate the impact upon affected employees of a variation to a modern award?’
[108] The Australian Government’s response did not directly address the question put but we took it from the response given that it had no present intention to amend the Act to provide the Commission with the discretion to make take-home pay orders. In the Background Paper published on 5 May 2017 we stated that if our assumption was incorrect then the Australian Government should inform us of its position at the hearing on 9 May 2017. No further response was received from the Australian Government and it made no oral submissions at the hearing on 9 May 2017.
[109] In summary then, the position is that ‘take-home pay orders’ are not an available option to mitigate the impact of the reductions in penalty rates determined in the Penalty Rates decision and the Australian Government has no present intention to amend the Act to provide the requisite power to make such orders.
3.5 The red circling proposal
[110] ‘Red circling’ refers to the practice of preserving the status quo for existing employees and only imposing a particular change on employees engaged after a specified date. In the present context it would mean an award term which would preserve the current Sunday and public holiday penalty rates for all existing employees, but the reduced penalty rates would apply to all new employees.
[111] In the Penalty Rates decision we expressed the provisional view that we did not favour any general ‘red circling’ term which would preserve the current Sunday penalty rates for all existing employees, noting that:
‘A consequence of such a term would be that different employees of the one employer would be employed on different terms and conditions. Such an outcome would add to the regulatory burden on business (a relevant consideration under s.134(1)(f).’ 93
[112] In their written submission of 24 March 2017, the SDA submit that the Commission should establish different transitional arrangements for future employees and existing employees 94 in the Retail, Fast Food and Pharmacy Awards. In particular, the SDA proposes that the Commission issue determinations which include the following terms for ‘existing employees’95:
‘(a) Following proper and full determination in proceedings of the annual wage review Employers must continue to pay employees the rate of pay prescribed by the relevant Award as at that time for Sunday work (“the preserved rate”) until such time that the rate of pay for Sunday work under the Award equals or exceeds the preserved rate.
(b) Employers will not dismiss, injure in their employment or alter to their prejudice the position of any employee entitled to be paid the preserved rate (including by a reduction in shifts or changes in rosters) by reason of, or for reasons which include, that entitlement.’ (emphasis added)
Note: At the hearing on 9 May 2017 the SDA advised it no longer relied upon the words ‘Following proper and full determination proceedings of the annual wage review’. It was submitted that the red circling would be fixed by reference to the rates applying as at the date of the decision and any further decision the Commission issues to implement the penalty rates decision.’ 96
[113] The SDA acknowledge the Commission’s provisional view that it does not favour any general ‘red circling’ preserving the current Sunday penalty rates for existing employees, but submit that ‘...it is incumbent on the Commission to give substantial weight to s.134(1)(a) when considering appropriate transitional arrangements. This can be achieved by establishing transitional arrangements for existing employees.’ 97
[114] The SDA’s submission is directed at the Sunday penalty rate reductions in the Fast Food, Retail and Pharmacy Awards.
[115] United Voice took a contrary position, submitting that:
‘United Voice does not agree with any ‘red circling’ provisions in the transitional arrangements. Such arrangements have the potential to create a two-tier workforce. It is undesirable to have employees performing the same work, at the same time, while on different rates of pay. Further, because ‘red circled’ employees are more expensive, there is a risk that such employees will be rostered to work less hours than newer, less expensive, employees. Further, we are not confident that the proposal at paragraph 14(b) of the SDA submission . . . can properly safeguard ‘red-circled’ employees from unlawful adverse action.
United Voice does not advance a red circling proposal.’ 98
[116] The RAFFWU agreed with this aspect of United Voice’s submissions. 99 The ACTU generally supported the submissions of the SDA and United Voice, but made no specific comment in respect of the red circling proposal advanced by the SDA.100 Nor did the SDA’s proposal receive any direct support from any other party in the proceedings.
[117] The various employer parties and the Fair Work Ombudsman 101 opposed the adoption of a ‘red circling’ term which would preserve current Sunday penalty rates for existing employees. Ai Group and ABI opposed the SDA’s proposal on both jurisdictional and merit grounds.
[118] It is not necessary for us to express a concluded view as to whether there is the requisite power to include a term of the type sought by the SDA in a modern award, as we are not persuaded of the merit of doing so.
[119] Contrary to the submissions advanced by the SDA we are of the view that the introduction of such a term would:
- create significant potential for disharmony and conflict between employees performing the same work at the same time but receiving different Sunday penalty rates (contrary to s.577(d)); and
- make the transition to ‘fair and relevant’ Sunday penalty rates more complex (adding to the ‘regulatory burden’ on business (s.134(1)(f)) and making the modern award system less simple and easy to understand (s.134(1)(g)).
[120] As to the second point, the introduction of a term of the type proposed would require employers to apply two different regimes in respect of Sunday penalty rates – the current rates for employees employed as at the date of implementation (i.e. 1 July 2017) (the ‘existing employees’) and the new rates for employees employed after the implementation date (the ‘new employees’). This would be so even if the ‘existing employees’ had not previously worked on Sundays and hence could be said to have suffered no reduction in their take home pay as a result of the Penalty Rates decision. Indeed an employer who had never previously operated it’s business on a Sunday, but decided to do so in the future, would be obliged to pay ‘existing employees’ a higher Sunday penalty rate than ‘new employees’. We also agree with the submission of United Voice that there is a risk that ‘red circled employees’ may suffer disadvantage in comparison with new employees and that safeguarding such employees may be difficult.
[121] There is also a significant degree of complexity, and uncertainty, in the operation of the proposed term and in particular the duration of the ‘red circling’ arrangement. Paragraph (a) of the proposed term provides that existing employees are paid what is described as ‘the preserved rate’, until ‘such time as the rate of pay for Sunday work under the award equals or exceeds the preserved rate.’
[122] It appears that what is envisaged is that the ‘preserved rate’ is the actual rate of pay existing employees currently receive for Sunday work, which is in turn a function of their existing hourly rate of pay and the current Sunday penalty rate. An adult full-time/part-time employee classified as a Retail Employee Level 1, currently receives $38.88 per hour for Sunday work (i.e. a base hourly rate of pay of $19.44 plus ‘an additional 100 per cent loading’ for Sunday work 102). If the proposed reduction in Sunday penalty rates was implemented immediately the relevant hourly rate for Sunday work would fall to $29.16 per hour (i.e. $19.44 base hourly rate of pay and an additional 50% loading for Sunday work).
[123] What is apparently intended is that existing employees continue to receive the preserved rate for Sunday work ($38.88 per hour in the example above) until such time as ‘the rate of pay for Sunday work under the Award equals or exceeds the preserved rate’. Implicit in the proposal is that the base hourly rates of pay in the relevant awards will increase over time - consequent upon increases in modern award minimum rates of pay in Annual Wage Reviews – such that at some future point in time the award rate of pay for Sunday work will be equal to or exceed the preserved rate of pay. In the example given above this would occur when the base rate of pay for a full-time/part-time adult employee classified as a Retail Employee Level 1 was increased to $25.92. This is so because $25.92 plus an additional 50 per cent loading for Sunday work (the new Sunday penalty rate) equals $38.88 (the ‘preserved rate’).
[124] Hence, the SDA’s proposed ‘red circling’ term would operate until the base hourly rate for a Retail Employee Level 1 has increased by over 33 per cent. While it is not possible to predict with any degree of certainty how long this may take, if one uses the methodology proposed by Ai Group (which implies successive Annual Wage Review adjustments of 2.5 per cent) then allowing for the compounding effect of successive annual increases it would take 12 years. In our view such an extended period is not appropriate.
[125] A further complication may arise if future Annual Wage Review increases were awarded on a basis other than as a uniform percentage adjustment – such as a flat dollar adjustment, or a differential increase with flat dollar adjustments to a certain classification level and percentage increases above that level. If Annual Wage Review increases in modern award wages were made on a basis other than as a uniform percentage adjustment it raises the prospect that the period of operation of the SDA’s proposed ‘red circling’ term may vary depending by classification. This would be so because the base hourly rate for particular classification levels would be adjusted in different ways and hence may exceed the ‘preserved rate’ at different times.
How would such a proposal work in practice?
1.4 Question for all parties:
All parties are asked to comment on the ACOSS proposal.
1.5 Questions for CCIWA
[10] CCIWA submits that ‘we believe that the proportion of employees who are reliant upon existing Sunday penalty rates to meet household expenses is low’.
What is the factual basis for this submission? (Note: expand on the material referred to at [13]–[20] of CCIWA’s submission)
2. Take-home pay orders
[11] Take-home pay orders are dealt with in several sections of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (the TPCA Act), as modified by the Fair Work (Transitional Provisions and Consequential Amendments) Regulations 2009 (the TP Regulations).
[12] Item 9 of Schedule 5 to the TPCA Act provides that if the Commission is satisfied that an employee, or a class of employees, to whom a modern award applies has suffered a modernisation related reduction in take-home pay the Commission may make a take-home pay order concerning the payment of an amount(s) to the employee(s) which the Commission considers appropriate to remedy the situation. Item 9 limits the power to make a take-home pay order to orders remedying ‘modernisation related’ reductions in take-home pay. Item 8(3) sets out the circumstances where an employee suffers a ‘modernisation related’ reduction in take-home pay. Item 8(3) requires, relevantly, that the employee be employed in the same position (or comparable position) that they were employed in immediately before the modern award came into operation. Hence persons employed after the commencement of the modern award are not eligible for an Item 9 take-home pay order.
[13] Part 3A of Schedule 5 was inserted by amendments to the TP Regulations made by the Fair Work (Transitional Provisions and Consequential Amendments) Amendment Regulations 2010 (No. 1) (the TP Amendment Regulations).
[14] Regulation 3B.04 of the TP Regulations modifies Schedule 5 of the TPCA Act by inserting Part 3A, after Part 3. Item 13A(1) of Part 3A of Schedule 5 to the TPCA Act provides that:
‘A modern award may include terms that give FWA power to make an order (a take-home pay order) remedying a reduction in take-home pay suffered by an employee or outworker, or a class of employees or outworkers, as a result of the making of a modern award or the operation of any transitional arrangements in relation to the award (whether or not the reduction in take-home pay is a modernisation-related reduction in take-home pay).’
[15] Item 13A(1) restricts the type of reduction that it applies to as one that occurs ‘as a result of the making of a modern award or the operation of any transitional arrangements in relation to the award’. Accordingly, it may be that it was not intended that awards would include terms that allow for making of take home pay orders in all circumstances. The purpose of the amendments made by the TP Amendment Regulations is discussed in the Explanatory Statement accompanying the TP Amendment Regulations.
2.1 Question for all parties:
[16] It seems to be common ground that the take home pay order provisions of the TPCA Act are notan available option to mitigate the impact of the reductions in penalty rates set out in the Decision.
Does any interested party take a different view?
2.2 Question for the Australian Government:
Is there any present intention to amend the Fair Work Act 2009 (Cth) (the FW Act) to provide the Commission with a discretion to make take home pay orders that may mitigate the impact upon effected employees of a variation to a modern award?
2.3 Question for the Small Business and Family Enterprise Ombudsman:
[17] The Ombudsman recommends that ‘at the end of the transition period, the Fair Work Commission should consider granting take home pay orders for individuals to mitigate the effects of any gap that remains between the amounts of their earnings with and without application of the Sunday penalty rate’.
What is the source of the Commission’s power to make the take home pay orders proposed?
3. ‘Phasing in’
3.1 Questions for all parties
[18] It appears to be common ground that the Commission has power to make transitional arrangements relating to the staggered introduction of the reduction to existing Sunday penalty rates.
Does any interested party take a different view?
[19] At paragraph [43] of its submission, Ai Group submits that in determining the transitional arrangements for the Sunday penalty rate, the Full Bench must act consistently with:
‘(a) its statutory charter, including the exercise its powers under the FW Act in a manner that is fair and just (see section 577(a) of the FW Act);
(b) its principle that fairness is assessed from the perspective of both employer and employee (and not simply from the perspective of the employee) (see Penalty Rates Decision at [37], [117], [118], [151], [885], [1701], [1877], [1948]);
(c) the objects of the relevant Part (see section 578(a) of the FW Act);
(d) the merits of the matter (see section 578(b) of the FW Act);
(e) its findings and conclusions in the Penalty Rates Decision;
(f) the evidence in the proceedings;
(g) the extent of the reductions in the existing Sunday penalty rates; and
(h) the approach adopted by other Full Benches to the staggered introduction of reductions in penalty rates.’
Does any interested party hold a contrary view?
Is it also relevant that the terms of a particular modern award may limit the incidence of Sunday work (as proposed by the Retail Associations at paragraph [14] of its submission)?
[20] In its submission ABI and NSWBC contend that an appropriate transitional arrangement needs to balance the needs of the low paid and the regulatory burden and disemployment factors referred to at paragraphs 4.2 and 4.3 of their submission. ABI and NSWBC submit that an appropriate way in which to achieve this balance is for the Commission to ask the following question:
‘Which transitional proposal will provide a substantive opportunity to employees to mitigate any adverse effects of the Decision whilst not significantly prejudicing the employment and regulatory benefits associated with the Decision?’
All parties are invited to comment on the question posed by ABI and NSWBC and whether it is the appropriate question for the Commission to direct itself to in these proceedings.
3.2 Question for the Australian Government:
[21] The Government notes that the reductions in certain Sunday penalty rates that occurred during the award modernisation process were phased in in equal instalments over a 5 year period – from 2010 to 2015 – and that the Restaurant Industry Award 2010 Appeal decision reduced penalty rates and no phasing in occurred.
Does the Government have a view on the merits of phasing in the penalty rate reductions we have determined and, if so, what phasing method is appropriate in each award?
3.3 Questions for the NRA:
[22] The NRA submits that lengthy phasing in provisions would impede collective bargaining.
If the transitional arrangements are determined why would the length of phasing in have any adverse impact on collective bargaining?
The award modernisation penalty rate reductions were phased in over 5 years, what impact, if any, did that have on collective bargaining?
3.4 Questions for United Voice
[23] At paragraph [15] of its submission, United Voice supports the Productivity Commission’s proposed 12 month delay in implementing the reduction to Sunday penalty rates and at paragraph [19] proposes a two-year delay to the implementation of the reduction in Sunday penalty rates for permanent employees under the Hospitality Award and the public holiday rate for employees under the Hospitality Award and for permanent employees under the Restaurant Award.
Does United Voice agree the submission advanced differs significantly from the Productivity Commission proposal?
If not, in what way does United Voice’s proposal reflect the Productivity Commission’s?
3.5 Question for the ACTU and the SDA
[24] The ACTU and the SDA also propose a 2 year delay to the implementation of the penalty rate reductions.
What justification is advanced in support of the 2 year delay?
4. ‘Red Circling’
[25] At paragraph [14] of its submission, the SDA submits that the Commission should preserve the current Sunday penalty rates for all existing employees by issuing the following variation determinations:
‘(a) Following proper and full determination in proceedings of the annual wage review employers must continue to pay employees the rate of pay prescribed by the relevant Award as at that time for Sunday work (“the preserved rate”) until such time that the rate of pay for Sunday work under the Award equals or exceeds the preserved rate.
(b) Employers will not dismiss, injure in their employment or alter to their prejudice the position of any employee entitled to be paid the preserved rate (including by a reduction in shifts or changes in rosters) by reason of, or for reasons which include, that entitlement.’
4.1 Questions for all parties:
What is the source of the Commission’s power to preserve the current Sunday penalty rates for existing employees as advanced by the SDA?
If the Commission is vested with such a power, what do the other parties say about the merits of the proposal advanced by the SDA?
Other than the SDA’s proposal in relation to the Retail, Fast Food and Pharmacy Awards, are there any other ‘red circling’ proposals being advanced by any other party?
4.2 Question for the Australian Government:
[26] The Government submits that ‘Given the implementation issues that would arise from red circling, the FWC will need to carefully weigh up the costs and benefits and potential impact of such an approach’.
The Government is asked to elaborate on the ‘costs and benefits and potential impact’ of the red circling approach including that proposed by the SDA in respect of the General Retail Industry Award 2010.
4.3 Question for the SDA
[27] The SDA submits (at [12]) that ‘[f]uture employees are, by definition, not subjected to [these] specific forms of disruption and detriment occasioned by the reductions in Sunday penalty rates’.
If the SDA’s red circling proposal is adopted, why is it necessary to phase in the reduction at all?
5. General Retail Industry Award 2010
[28] The Retail Associations submit that the decision to reduce the Sunday penalty rate applies equally to shiftworkers (see [53]–[55] of the Retail Associations submission).
5.1 Question for the SDA:
Does the SDA oppose the submission advanced by the Retail Associations? If so, on what basis?
1 [2017] FWCFB 1001
2 For the reasons set out [2017] FWCFB 1001 at [1915]
3 See [2017] FWCFB 1001 at [1126]–[1137], [1154], [1324]–[1346] and [1391]
4 [2017] FWCFB 1551
5 [2017] FWCFB 1001
6 [2017] FWCFB 1934
7 Note the Background Paper was corrected and republished on 26 May 2017 to incorporate comments from parties
8 [2017] FWCFB 1001 at [824]
9 [2017] FWCFB 1001 at [823]
10 ACTU submission 24 March 2017 at para 5
11 Federal Opposition submission, 24 March 2017 at para 1.1.3
12 Ibid at paras 1.2.3 – 1.2.4
13 Ibid at para 4.1.3 and following
14 Qld Government submission, 24 March 2017
15 SA Government submission, 24 March 2017
16 Victorian Government submission, 24 March 2017
17 WA Government submission, 24 March 2017
18 ACT Government submission, 24 March 2017
19 NT Government submission 27 March 2017
20 NSW Opposition submission 24 March 2017
21 Tasmanian Opposition submission 24 March 2017
22 APESMA submission, 24 March 2017 at paras 5–11
23 RAFFWU submission 24 March 2017
24 Ai Group submission in reply 21 April 2017 at paras 17–19
25 [2013] FCAFC 162
26 Ibid at [22]; Also see Davis v Insolvency and Trustee Service Australia (No 2) (2011) 190 FCR 437 at 439-440, [4] and [6]
27 ABI submission in reply, 20 April 2017, at paras 2.6–2.7
28 ABI submission in reply, 20 April 2017, at paras 2.8–2.11
29 ABI submission in reply, 20 April 2017, at para 2.12
30 United Voice submission in reply, 20 April 2017
31 SDA further submission 4 May 2017
32 Pharmacy Guild submission in reply 21 April 2017, at para 2
33 Retail Associations submission in reply, 21 April 2017 at para 5
34 AFEI submission in reply, 7 April 2017 at para 2
35 ACCI submission in reply, 21 April 2017 at paras 9–17
36 See R v Wallis; Ex parte Employers Association of Wool Selling Brokers (1949) 78 CLR 529 at 550 per Dixon J, an application of the maxim expressum facit cessare tacitum. Further, there is a well-established principle that what cannot be done directly cannot be done indirectly, see: Commonwealth v State of Queensland (1920) 29 CLR 1 at 15; Toohey v Gunther (1928) 41 CLR 181 at 195 and R v Gough; Ex parte Australasian Meat Industry Employees’ Union (1965) 114 CLR 394 at 422; Caltex Oil (Aust) Pty Ltd v Best (1990) 170 CLR 516 at p522-523; see also DK Singh ‘What Cannot be Done Directly Cannot be Done Indirectly: Part I’ (1959) 32 ALR 374 and DK Singh, ‘What Cannot be Done Directly Cannot be Done Indirectly: Part II’ (1959) 33 ALJ 3.
37 Bill Shorten (Minister for Employment and Workplace Relations), Fair Work Amendment Bill 2013, Second Reading Speech, 21 March 2013
38 Federal Opposition submission 24 March 2017 at paras 1.2.3–1.2.4
39 [2017] FWCFB 1001 at [117] and [120]
40 ACCI submission 21 April 2017, at para 6–7
41 Australian National Railways Commission v Rutjen’s Print N1939, 27 May 1996 per Ross VP, Harrison DP and Larkin C. at p. 11; Coal and Allied Operations Pty Ltd v AFMEPKIU (1997) 73 IR 311 at 317–318
42 (1984) 1 FCR 354
43 Ibid at [356]
44 Equal Remuneration Decision 2015 [2015] FWCFB 8200 at [246]
45 Coal and Allied Operations Pty Ltd v AFMEPKIU (1997) 73 IR 311 at 317–318
46 [2017] FWCFB 1001 at [269]
47 (2015) 254 IR 238
48 Ibid at [103]–[104]
49 [2017] FWCFB 1001 at [2000] and [2021]
50 Ai Group submission in reply and responses to questions on notice, 21 April 2017
51 ACCI submission in reply and responses to questions on notice, 21 April 2017
52 Pharmacy Guild, submission in reply and responses to questions on notice, 21 April 2017
53 SDA, submission in reply and responses to questions on notice, 21 April 2017
54 Restaurant and Catering Industrial, submission in reply and responses to questions on notice, 21 April 2017
55 We note that AFEI’s written submission of 24 March 2017 also proposed that the changes be implemented ‘in full on 1 July 2017’. AFEI was not a principal employer party in the substantive proceedings. See [2017] FWCFB 1001 at [302]
56 We note that, as contended by ABI, the power to insert transitional arrangements may also be derived from subdivision B of Part 2-3 of the Act.
57 Ai Group submission, 24 March 2017 at para 43
58 Transcript, 9 May 2017 at PN29265
59 See [2017] FWCFB 1001 at [117]–[119]
60 Transcript, 9 May 2017 at PN29037
61 Nguyen v Nguyen (1990) 169 CLR 245 at 269; also see Re v Moore; ex parte Australian Telephone and Phonogram Officers’ Association (1982) 148 CLR 600
62 Re Furnishing Industry Association of Australia (Queensland) Limited Union of Employers, Print Q9115, 27 November 1998 per Giudice J, Watson SDP, Hall DP, Bacon C and Edwards C.
63 (2003) 127 IR 205 at [48]
64 Re Furnishing Industry Association of Australia (Queensland) Limited Union of Employers, Print Q9115, 27 November 1998 per Giudice J, Watson SDP, Hall DP, Bacon C and Edwards C
65 [2014] FWCFB 1996
66 PR551382
67 Transcript, 9 May 2017 at PN29303–PN29305
68 [2017] FWCFB 1001 at [688]
69 Ibid at [1362]
70 Ibid at [1367]
71 [2017] FWCFB 1001 at [202]
72 [2017] FWCFB 1001 at [689]
73 [2017] FWCFB 1001 at [860]
74 [2017] FWCFB 1001 at [1376]–[1378]
75 [2017] FWCFB 1001 at [1388]–[1390]
76 [2017] FWCFB 1001 at [1678]–[1679]
77 [2017] FWCFB 1001 at [1851]
78 Ibid at [53]–[57], [885], [1388] and [1877]
79 Ibid at [53]
80 The Fair Work (Transitional Provisions and Consequential Amendments) Amendment Regulations 2010 (No. 1) amended the TP Regulations to insert item 8A into Part 3 of Schedule 5, to address modernisation-related reductions in take-home pay from a variation to a modern award. Item 8A describes new circumstances in which a ‘modernisation-related reduction in take-home pay’ may occur, namely, variations of modern awards made under:
• item 14 of Schedule 5 to the TPCA Act (which provided for a three month period commencing on 1 January 2010 in which Fair Work Australia could vary modern awards to give effect to an award modernisation request); or
• s.157 of the Act provided the variation was made before 1 July 2010.
81 [2009] AIRCFB 800
82 [2009] AIRCFB 800 at [20]
83 Explanatory Statement, Select Legislative Instrument 2010 No. 77, Fair Work (Transitional Provisions and Consequential Amendments) Act 2009, Fair Work (Transitional Provisions and Consequential Amendments) Amendment Regulations 2010 (No. 1).
84 Ai Group submission, 24 March 2017 at paras 7–35
85 ACCI submission in reply, 21 April 2017 para 65
86 Hospitality Employers submission in reply at para 14
87 ABI and NSWBC submission in reply at para 5.1
88 Pharmacy Guild submission in reply at para 10
89 RCI submission in reply at paras 26–27
90 SDA submission in reply, 21 April 2017 paras 15–17
91 United Voice submission in reply, 20 April 2017 para 15
92 Small Business Ombudsman submission, 24 March 2017
93 [2017] FWCFB 1001 at [2021] (ii)
94 SDA submission, 24 March 2017 at [13] and see generally [14]–[20]
95 SDA submission, 24 March 2017 at [14]
96 Transcript, 9 May 2017 at PN28991–PN28994
97 SDA submission, 24 March 2017 at [15]–[16] and [18]
98 United Voice submission, 20 April 2017 at [26]–[27]
99 RAFFWU written submissions, 21 April 2017 at paras 12–13
100 ACTU submission, 21 April 2017 at para 2
101 Fair Work Ombudsman submission, 24 March 2017 at p. 1
102 Clause 29.4(c) of the Retail Award [MA000004]
103 Common Exhibit 1 at p. 495
104 [2017] FWCFB 1001 at [2021]
105 ACTU submission, 24 March 2017 at [10]
106 ACTU submission, 24 March 2017 at [13]
107 ACTU submission, 24 March 2017 at [14]
108 Award Modernisation Decision [2009] AIRCFB 800, 2 September 2009, at [30]
109 ACTU submission, 24 March 2017 at 14.
110 ACTU reply submission, 21 April 2017 at [5]
111 ACTU reply submission, 21 April 2017 at [5]
112 SDA submission, 24 March 2017 at para 10(b)
113 SDA submission in reply, 21 April 2017 at para 46
114 United Voice submission in reply 20 April 2017 at [8]
115 APESMA submission, 24 March 2017 at [20]–[22]
116 APESMA submission, 24 March 2017 at [23]
117 See [2017] FWCFB 1001 at [117]–[119]
118 Transcript, 9 May 2017 at PN29037
119 Retail Employers submission 21 April 2017 at [43]
120 ABI and NSWBC Submission in reply at para 5.1
121 SDA submission in reply, 21 April 2017 at paras 4–12
122 [2017] FWCFB 1001 at [2020]
123 Fair Work Ombudsman submission, 24 March 2017 at p. 1
124 Small Business Ombudsman, 23 March 2017. Further, Mr David Wedgwood submits that there should be a reduction in penalty rates over a four year period of five equal instalments commencing on 1 July 2017. In the alternative, Mr Wedgwood proposes a one-fifth reduction in 2017, 2018 and 2019, but with a final variation of two-fifths of the change in 2020.
125 ACTU submission, 24 March 2017 at [14]
126 CCIQ submission, 24 March 2017 at p. 2
127 AFEI submission, 27 March 2017 para 2
128 Business SA submission, 24 March 2017
129 ACCI submission, 24 March 2017 at paras 4–7
130 ACCI submission, 24 March 2017 at para 13(c)
131 CCIWA submission, 24 March 2017 at para 3
132 Ai Group submission (amended), 3 April 2017 at para 51(a)
133 Ai Group submission, 3 April 2017, para 51(a)
134 Ai Group submission, 3 April 2017, para 51(a)
135 Ai Group submission, 3 April 2017, para 51 (b) and (c)
136 Ai Group submission, 3 April 2017, para 51(i)
137 Ai Group submission, 3 April 2017, para 3(b)
138 Ai Group submission, 3 April 2017, para 3(b)
139 Ai Group submission, 3 April 2017, para 52and
140 NRA amended submission, 27 March 2017, para 4
141 SDA submission, 24 March 2017 at para 14(a)
142 SDA submission, 24 March 2017 at para 10(b)
143 SDA submission, 24 March 2017 at para 20
144 SDA submission, 24 March 2017 at para 20
145 ACTU submission, 24 March 2017 at para 14
146 ACTU submission, 24 March 2017 at para 14
147 ACTU submission, 24 March 2017 at para 14
148 [2014] FWCFB 1996
149 SDA submission in reply, 21 April 2017 at 92
150 [2017] FWCFB 1001 at [133]–[136]
151 CCIQ submission, 24 March 2017 at p2
152 AFEI submission, 27 March 2017 at para 2
153 AHA submission, 24 March 2017 at para 7
154 Business SA submission, 24 March 2017
155 ACCI submission, 24 March 2017 at para 4
156 ACCI submission, 24 March 2017 at para 13(c)
157 CCIWA submission, 24 March 2017 at para 3
158 United Voice submission, 24 March 2017 at para 15
159 United Voice submission, 24 March 2017 at para 19
160 United Voice submission, 24 March 2017 at para 19
161 United Voice submission, 24 March 2017 at para 19
162 ACTU submission, 24 March 2017 at para 14
163 AFEI submission, 27 March 2017 at para 2
164 ARA submission, 24 March 2017 at para 4
165 ABI submission, 24 March 2017 at para 3(b)
166 NRA submission, 27 March 2017 at para 3
167 NRA submission, 27 March 2017 at para 3
168 ABI submission, 24 March 2017 at para 1.3(c)
169 CCIQ submission, 24 March 2017 at p. 2
170 ABI submission, 24 March 2017 at para 1.3(c)
171 ABI submission, 24 March 2017 at para 1.3(c)
172 CCIWA submission, 24 March 2017 at para 3
173 Business SA submission, 24 March 2017
174 ACCI submission, 24 March 2017 at para 4
175 ACCI submission, 24 March 2017 at para 13(c)
176 SDA submission, 24 March 2017 at para 14(a)
177 SDA submission, 24 March 2017 at para 10(a)
178 SDA submission, 24 March 2017 at para 10(b)
179 SDA submission, 24 March 2017 at para 20
180 Retail Associations Submission, 24 March 2017 at [53]–[55]
181 See Statement issued 5 April 2017 at Attachment B, Question 5.1
182 SDA submission in reply, 21 April 2017 at [53]
183 Pharmacy Guild submission, 24 March 2017 at para 6
184 Pharmacy Guild submission, 24 March 2017 at para 7
185 Pharmacy Guild submission, 24 March 2017 at para 8
186 CCIWA submission, 24 March 2017 at para 3
187 Business SA submission, 24 March 2017
188 ACCI submission, 24 March 2017 at para 4
189 ACCI submission, 24 March 2017 at para 13(c)
190 SDA submission, 24 March 2017 at para 14(a)
191 SDA submission, 24 March 2017 at para 20
192 APESMA submission, 24 March 2017 at para 23
193 APESMA propose a 4 year delay but support the SDA model for transitioning
194 United Voice submission, 24 March 2017 at para 17
195 SDA submission, 24 March 2017 at [23]
196 [2017] FWCFB 1001 at [1898]
197 RSL Victoria submissions 24 March 2017 p. 3
198 United Voice submission, 24 March 2017 at para 61
199 Transcript, 9 May 2017 at PN29252
200 [2017] FWCFB 1001 at [1154]–[1159]
201 RCI submission, 24 March 2017
202 United Voice submission, 24 March 2017 at para 61
203 MA000009
204 MA000012
205 [2017] FWCFB 1933
206 ACTU submission, 8 May 2017 at para 2
207 APESMA submission, 8 May 2017 at para 3
208 HSU submission, 8 May 2017 at para 3
209 SDA submission, 8 May 2017 at para 15
210 CFMEU submission, 11 May 2017 (MA000071 and MA000029)
211 MUA submission, 8 May 2017, at para 6
212 ANMF submission, 5 May 2017 at para 3
213 Ai Group submission, 8 May 2017
214 ABI submission, 8 May 2017 at [4.2]
215 AHA, AAA and the PGA submission, 5 May 2017
216 [2017] FWCFB 1001 at [143]–[150]
217 [2017] FWCFB 1001 at [2059]–[2062]
218 [2017] FWCFB 1001 at [2080]–[2081]
219 ACOSS submission 24 March 2017, p. 1
220 Draft determinations in relation to the public holiday rate provisions have already been issued for comment. Consolidated draft variation determinations arising from this decision will be issued shortly. In relation to the Hospitality Award and the Restaurant Award revised draft determination will be issued reflecting certain consequential changes to the time off in lieu provisions of the relevant public holiday clauses as considered during the conference conducted by Hampton C on 21 April 2017.
221 [2017] FWCFB 1001 at [58] and [2017] FWCFB 1551 at [2]–[11]
222 MA000009
223 MA000012
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