4 yearly review of modern awards—Annual leave

[2015] FWCFB 3406

[2015] FWCFB 3406    

FAIR WORK COMMISSION

dECISION

Fair Work Act 2009

s.156—4 yearly review of modern awards

4 yearly review of modern awards—Annual leave

(AM2014/47)

Justice Ross, President
SENIOR DEPUTY PRESIDENT HARRISON
COMMISSIONER HAMPTON MELBOURNE, 11 June 2015

4 yearly review of modern awards - annual leave common issue - excessive annual leave - cashing out of annual leave - close-down - granting leave in advance - payment of annual leave entitlements on termination - electronic funds transfer and paid annual leave - purchased leave.

CONTENTS

Chapters		Paragraph
1.	Introduction	[1]
2.	The Context	[11]
3.	The Evidence	[39]
4.	The Claims	[59]
4.1      Excessive annual leave	[59]
4.2      Cashing out of annual leave	[220]
4.3      Annual Close-down	[336]
4.4      Granting leave in advance	[384]
4.5      Payment of annual leave entitlements on termination	[416]
4.6      Electronic funds transfer and paid annual leave	[430]
5.	Purchased Leave	[458]
6.	Next Steps	[467]
Attachments
A	Employer Group Parties
B	Index of Material
C	Witness Statements
D	New Subclause for Excessive Annual Leave
E	Replacement Subclause for Excessive Annual Leave
F	Analysis of Excessive Annual Leave Provisions in Awards
G	New Subclause for Close-Down
H	New Subclause for Annual Leave in Advance
I	New Subclause for EFT Payment
J	Legislative Provisions relating to Annual Leave

ABBREVIATIONS

ABS	Australian Bureau of Statistics
ACCI	Australian Chamber of Commerce and Industry
Act	Fair Work Act 2009 (Cth)
ACTU	Australian Council of Trade Unions
AFPCS	Australian Fair Pay and Conditions Standard
Ai Group	Australian Industry Group
AIRC	Australian Industrial Relations Commission
AMWU	“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
AWALI 2010	Australian Work and Life Index 2010
2008 Award Modernisation decision	Award Modernisation decision of 19 December 2008 re making of priority modern awards
CFMEU	Construction, Forestry, Mining and Energy Union
Commission	Fair Work Commission
EFT	Electronic Funds Transfer
Employer Group	See Group of employers listed at Attachment A
FWC	Fair Work Commission
HILDA	Household, Income and Labour Dynamics in Australia survey
NAPSA	Notional Agreement Preserving State Award
NES	National Employment Standards
Review	4 yearly review of modern awards under s.156 of the Fair Work Act 2009
SDA	Shop, Distributive and Allied Employees Association
TAI 2002	The Australia Institute Survey, 2002
TCFUA	Textile, Clothing and Footwear Union of Australia
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
Transitional Review—Annual Leave decision	Modern Awards Review 2012—Annual Leave decision
Work Choices Act	Workplace Relations Amendment (Work Choices) Act 2005 (Cth)
WR Act	Workplace Relations Act 1996 (Cth)

1. Introduction

1. The Fair Work Act 2009 (Cth) (the Act) provides that the Fair Work Commission (the Commission) must ensure that modern awards together with the National Employment Standards (NES) provide a fair and relevant minimum safety net of terms and conditions. Modern awards and the NES interact in different ways. A modern award may include any terms that the award is expressly permitted to include by a provision of Part 2-2 of the Act (which deals with the NES). A modern award may also include terms that are ancillary or incidental to the operation of an entitlement of an employee under the NES or that supplement the NES. One of the minimum standards in the NES is paid annual leave. This decision is part of the 4 yearly review of modern awards and it deals with the variation of modern awards in relation to a number of issues regarding paid annual leave.[1]

Background

1. Section 156 of the Act provides that the Commission must conduct a 4 yearly review of modern awards (the Review) as soon as practicable after 1 January 2014.

1. As detailed in a statement issued on 6 February 2014,[2] the Review consists of an Initial stage, dealing with jurisdictional issues, a Common issues stage and an Award stage.

1. What constitutes a “common issue” was defined in a statement issued on 17 March 2014[3] in terms of a proposal for a significant variation or change across the award system, such as applications which seek to change a common or core provision in most, if not all, modern awards. A matter identified as a common issue will be referred to a Full Bench for determination in a “stand alone” proceeding, as distinct from having the issue determined on an award-by-award basis during the Award stage of the Review. After a consultation process the Commission determined the matters which would be dealt with as “common issues” during the Review; one of those matters was annual leave. [4]

1. The scope of the matters to be considered in the context of the annual leave common issue was published in a statement on 7 April 2014 as follows:

(i)        cashing out of annual leave;

(ii)       excessive annual leave;

(iii)      annual close-down;

(iv)      granting leave in advance;

(v)       purchased leave;

(vi)      payment of annual leave entitlements on termination; and

(vii)     electronic funds transfer (EFT) and paid annual leave. [5]

1. This decision deals with the above matters.

1. In relation to the issue of purchased leave, the Australian Industry Group (Ai Group) initially proposed a model clause to be inserted into each modern award that would allow employees additional annual leave in a year with a corresponding reduction in salary, either for the period of their annual leave (such as half pay for twice the standard annual leave period) or throughout the year.[6] This claim was not pressed further during these proceedings and we return to the matter later in this decision.

1. Interested parties were directed to file proposed variation determinations and a list of awards to which the proposed variations would apply. Directions were also issued regarding the filing of comprehensive written submissions and any evidence to be relied upon in support of the propositions advanced. Hearings took place on 20 and 21 August 2014, 16 October 2014 and 1 December 2014. Ai Group and the Australian Chamber of Commerce and Industry (ACCI) coordinated discussions with various employer groups (the Employer Group)[7] and presented a common position in respect of proposed variations relating to each of the matters addressed in this decision. The full list of organisations making up the Employer Group is at Attachment A.

1. A series of conciliation conferences took place in conjunction with the hearings outlined above, but ultimately a consent position could not be reached and all of the matters were contested.

1. We propose to deal with some contextual issues first, before turning to the particular claims before us.

1. The Context

1. We begin by making some brief observations about the legislative context for the Review. We note that these issues are canvassed in more detail in the 4 yearly Review of Modern Awards: Preliminary Jurisdictional Issues decision[8] and we adopt and apply that decision.

1. The Act provides that the Commission must conduct a 4 yearly review of modern awards (s.156(1)). Section 156(2) deals with what has to be done in a Review:

“(2)       In a 4 yearly review of modern awards, the FWC:

(a)       must review all modern awards; and

(b)       may make:

(i)        one or more determinations varying modern awards; and

(ii)       one or more modern awards; and

(iii)      one or more determinations revoking modern awards; and

(c)       must not review, or make a determination to vary, a default fund term of a modern award.

Note 1:   Special criteria apply to changing coverage of modern awards or revoking modern awards (see sections 163 and 164).

Note 2:   For reviews of default fund terms of modern awards, see Division 4A.”

1. Subsections 156(3) and (4) deal with the variation of modern award minimum wages in a Review and are not relevant for present purposes.

1. Section 156(5) provides that in a review each modern award is reviewed in its own right, however, this does not prevent the Commission from reviewing two or more modern awards at the same time.

1. The general provisions relating to the performance of the Commission’s functions apply to the Review. Sections 577 and 578 are particularly relevant in this regard. In conducting the Review the Commission is able to exercise its usual procedural powers, contained in Division 3 of Part 5-1 of the Act. Importantly, the Commission may inform itself in relation to the Review in such manner as it considers appropriate (s.590).

1. The modern awards objective is central to the Review. The modern awards objective applies to the performance or exercise of the Commission’s “modern award powers”, which are defined to include the Commission’s functions or powers under Part 2-3 of the Act. The Review function in s.156 is in Part 2-3 of the Act and so will involve the performance or exercise of the Commission’s “modern award powers”. It follows that the modern awards objective applies to the Review.

1. The modern awards objective is set out in s.134 of the Act, as follows:

“134      The modern awards objective

What is the modern awards objective?

(1)       The FWC must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account:

(a)       relative living standards and the needs of the low paid; and

(b)       the need to encourage collective bargaining; and

(c)       the need to promote social inclusion through increased workforce participation; and

(d)       the need to promote flexible modern work practices and the efficient and productive performance of work; and

(da)     the need to provide additional remuneration for:

(i)        employees working overtime; or

(ii)       employees working unsocial, irregular or unpredictable hours; or

(iii)      employees working on weekends or public holidays; or

(iv)      employees working shifts; and

(e)       the principle of equal remuneration for work of equal or comparable value; and

(f)       the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; and

(g)       the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards; and

(h)       the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy.

This is the modern awards objective.

When does the modern awards objective apply?

(2)       The modern awards objective applies to the performance or exercise of the FWC’s modern award powers, which are:

(a)       the FWC’s functions or powers under this Part; and

(b)       the FWC’s functions or powers under Part 2–6, so far as they relate to modern award minimum wages.

Note:     The FWC must also take into account the objects of this Act and any other applicable provisions. For example, if the FWC is setting, varying or revoking modern award minimum wages, the minimum wages objective also applies (see section 284).”

1. The modern awards objective is directed at ensuring that modern awards, together with the NES, provide a “fair and relevant minimum safety net of terms and conditions” taking into account the particular considerations identified in paragraphs 134(1)(a) to (h). The objective is very broadly expressed.[9] The obligation to take into account the matters set out in paragraphs 134(1)(a) to (h) means that each of these matters must be treated as a matter of significance in the decision-making process.[10]

1. No particular primacy is attached to any of the s.134 considerations and not all of the matters identified will necessarily be relevant to a particular proposal to vary a modern award.

1. There is a degree of tension between some s.134 considerations. The Commission’s task is to balance the various considerations and ensure that modern awards, together with the NES, provide a fair and relevant minimum safety net of terms and conditions.

1. The modern awards objective requires the Commission to take into account, among other things, the need to ensure a “stable” modern award system (s.134(1)(g)). The need for a “stable” modern award system supports the proposition that a party seeking to vary a modern award in the context of the Review must advance a merit argument in support of the proposed variation. The extent of the merit argument required will depend on the variation sought. As the Full Bench observed in the 4 yearly Review of Modern Awards: Preliminary Jurisdictional Issues decision:

“Some proposed changes may be self evident and can be determined with little formality. However, where a significant change is proposed it must be supported by a submission which addresses the relevant legislative provisions and be accompanied by probative evidence properly directed to demonstrating the facts supporting the proposed variation.”[11]

1. The Review is broader in scope than the transitional (or 2 year) review (Transitional Review) of modern awards provided for in Item 6 of Schedule 5 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009, and is the first full opportunity to consider the content of modern awards. However, the broad scope of the Review does not obviate the need for a merit argument to be advanced in support of a proposed variation. As the Full Bench in Re Security Services Industry Award 2010 recently observed:

“[8] While this may be the first opportunity to seek significant changes to the terms of modern awards, a substantive case for change is nevertheless required. The more significant the change, in terms of impact or a lengthy history of particular award provisions, the more detailed the case must be. Variations to awards have rarely been made merely on the basis of bare requests or strongly contested submissions. In order to found a case for an award variation it is usually necessary to advance detailed evidence of the operation of the award, the impact of the current provisions on employers and employees covered by it and the likely impact of the proposed changes. Such evidence should be combined with sound and balanced reasoning supporting a change. Ultimately the Commission must assess the evidence and submissions against the statutory tests set out above, principally whether the award provides a fair and relevant minimum safety net of terms and conditions and whether the proposed variations are necessary to achieve the modern awards objective. These tests encompass many traditional merit considerations regarding proposed award variations.”[12]

1. In the Review the Commission will proceed on the basis that prima facie the modern award being reviewed achieved the modern awards objective at the time that it was made.[13] The proponent of a variation to a modern award must demonstrate that if the modern award is varied in the manner proposed then it would only include terms to the extent necessary to achieve the modern awards objective (see s.138). What is “necessary” in a particular case is a value judgment based on an assessment of the s.134 considerations having regard to the submissions and evidence directed to those considerations.[14]

1. In performing functions and exercising powers under a part of the Act (including Part 2-3—Modern Awards) the Commission must take into account the objects of the Act and any particular objects of the relevant part (see s.578(a)). The object of Part 2-3 is expressed in s.134 (the modern awards objective) to which we have already referred. The object of the Act is set out in s.3 as follows:

“3         Object of this Act

The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:

(a)       providing workplace relations laws that are fair to working Australians, are flexible for businesses, promote productivity and economic growth for Australia’s future economic prosperity and take into account Australia’s international labour obligations; and

(b)       ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders; and

(c)       ensuring that the guaranteed safety net of fair, relevant and enforceable minimum wages and conditions can no longer be undermined by the making of statutory individual employment agreements of any kind given that such agreements can never be part of a fair workplace relations system; and

(d)       assisting employees to balance their work and family responsibilities by providing for flexible working arrangements; and

(e)       enabling fairness and representation at work and the prevention of discrimination by recognising the right to freedom of association and the right to be represented, protecting against unfair treatment and discrimination, providing accessible and effective procedures to resolve grievances and disputes and providing effective compliance mechanisms; and

(f)       achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action; and

(g)       acknowledging the special circumstances of small and medium-sized businesses.”

1. We now turn to the provisions of the Act relating to annual leave.

1. As we have mentioned, the Act provides that modern awards, together with the NES, are intended to provide a fair and relevant minimum safety net of terms and conditions of employment. The NES are minimum standards that apply to the employment of national system employees. The NES are set out in Part 2-2 of the Act. Division 6 of Part 2-2 (ss.86–94) deals with annual leave.

1. Part 2-1 of the Act provides that the NES cannot be excluded by modern awards or enterprise agreements. Section 55 deals with the interaction between the NES and a modern award or enterprise agreement:

“55        Interaction between the National Employment Standards and a modern award or enterprise agreement

National Employment Standards must not be excluded

(1)       A modern award or enterprise agreement must not exclude the National Employment Standards or any provision of the National Employment Standards.

Terms expressly permitted by Part 2–2 or regulations may be included

(2)       A modern award or enterprise agreement may include any terms that the award or agreement is expressly permitted to include:

(a)       by a provision of Part 2–2 (which deals with the National Employment Standards); or

(b)       by regulations made for the purposes of section 127.

Note:    In determining what is permitted to be included in a modern award or enterprise agreement by a provision referred to in paragraph (a), any regulations made for the purpose of section 127 that expressly prohibit certain terms must be taken into account.

(3)       The National Employment Standards have effect subject to terms included in a modern award or enterprise agreement as referred to in subsection (2).

Note:     See also the note to section 63 (which deals with the effect of averaging arrangements).

Ancillary and supplementary terms may be included

(4)       A modern award or enterprise agreement may also include the following kinds of terms:

(a)       terms that are ancillary or incidental to the operation of an entitlement of an employee under the National Employment Standards;

(b)       terms that supplement the National Employment Standards;

but only to the extent that the effect of those terms is not detrimental to an employee in any respect, when compared to the National Employment Standards.

Note 1:   Ancillary or incidental terms permitted by paragraph (a) include (for example) terms:

(a) under which, instead of taking paid annual leave at the rate of pay required by section 90, an employee may take twice as much leave at half that rate of pay; or

(b) that specify when payment under section 90 for paid annual leave must be made.

Note 2:   Supplementary terms permitted by paragraph (b) include (for example) terms:

(a) that increase the amount of paid annual leave to which an employee is entitled beyond the number of weeks that applies under section 87; or

(b) that provide for an employee to be paid for taking a period of paid annual leave or paid/personal carer’s leave at a rate of pay that is higher than the employee’s base rate of pay (which is the rate required by sections 90 and 99).

Note 3:   Terms that would not be permitted by paragraph (a) or (b) include (for example) terms requiring an employee to give more notice of the taking of unpaid parental leave than is required by section 74.

Enterprise agreements may include terms that have the same effect as provisions of the National Employment Standards

(5)       An enterprise agreement may include terms that have the same (or substantially the same) effect as provisions of the National Employment Standards, whether or not ancillary or supplementary terms are included as referred to in subsection (4).

Effect of terms that give an employee the same entitlement as under the National Employment Standards

(6)       To avoid doubt, if a modern award includes terms permitted by subsection (4), or an enterprise agreement includes terms permitted by subsection (4) or (5), then, to the extent that the terms give an employee an entitlement (the award or agreement entitlement) that is the same as an entitlement (the NES entitlement) of the employee under the National Employment Standards:

(a)       those terms operate in parallel with the employee’s NES entitlement, but not so as to give the employee a double benefit; and

(b)       the provisions of the National Employment Standards relating to the NES entitlement apply, as a minimum standard, to the award or agreement entitlement.

Note:    For example, if the award or agreement entitlement is to 6 weeks of paid annual leave per year, the provisions of the National Employment Standards relating to the accrual and taking of paid annual leave will apply, as a minimum standard, to 4 weeks of that leave.

Terms permitted by subsection (4) or (5) do not contravene subsection (1)

(7)       To the extent that a term of a modern award or enterprise agreement is permitted by subsection (4) or (5), the term does not contravene subsection (1).

Note:    A term of a modern award has no effect to the extent that it contravenes this section (see section 56). An enterprise agreement that includes a term that contravenes this section must not be approved (see section 186) and a term of an enterprise agreement has no effect to the extent that it contravenes this section (see section 56).”

1. A term of a modern award or enterprise agreement has no effect to the extent that it contravenes s.55 of the Act.

1. Relevantly, for the purpose of s.55(2), Part 2-2 provides that a modern award is expressly permitted to include terms:

·  providing for the cashing out of annual leave (ss.93(1) and (2));

·  requiring an employee, or allowing for an employee to be required, to take paid annual leave in particular circumstances, but only if the requirement is reasonable (s.93(3)); and

·  otherwise dealing with the taking of paid annual leave (s.93(4)).

1. We deal with these provisions later.

1. A modern award may also include terms that are incidental or ancillary to the operation of NES entitlements and terms that supplement the NES, provided that the effect of those terms is not detrimental to an employee in any respect when compared to the NES (s.55(4)).

1. In dealing with matters arising in the Review, the Commission will have regard to the relevant historical context and will take into account previous decisions relevant to any contested issue. The particular context in which those decisions were made will also be considered.

1. The annual leave provisions in modern awards have been the subject of consideration by the Commission and its predecessors over many years. On 30 May 2014, the Commission released a background paper[15] which sets out the legislative basis of the annual leave provisions in modern awards and the history of annual leave entitlements in awards.

1. During the award modernisation process conducted by the Australian Industrial Relations Commission (AIRC) under Part 10A of the Workplace Relations Act 1996 (WR Act) a number of employer organisations sought to have cashing out provisions included in modern awards. The Award Modernisation Full Bench deemed that cashing out provisions would “undermine the purpose of annual leave and give rise to questions about the amount of annual leave to be prescribed”.[16]

1. The substance of a number of the matters before us were also the subject of claims during the Transitional Review.

1. In the Modern Awards Review 2012—Annual Leave decision (Transitional Review—Annual Leave decision)[17] the Full Bench, by majority, rejected a range of applications to vary the annual leave provisions in various modern awards. The majority’s decision turned on the limited nature of the Commission’s task in the Transitional Review. The scope of the Transitional Review was the subject of detailed consideration by a five member Full Bench in the Modern Awards Review 2012 decision.[18] The Full Bench said:

“To summarise, we reject the proposition that the Review involves a fresh assessment of modern awards unencumbered by previous Tribunal authority. It seems to us that the Review is intended to be narrower in scope than the 4 yearly reviews provided in s.156 of the FW Act. In the context of this Review the Tribunal is unlikely to revisit issues considered as part of the Part 10A award modernisation process unless there are cogent reasons for doing so, such as a significant change in circumstances which warrants a different outcome. Having said that we do not propose to adopt a “high threshold” for the making of variation determinations in the Review, as proposed by the Australian Government and others.”[19]

1. In the Transitional Review—Annual Leave decision the majority applied the above statement and dismissed the applications.[20]

1. Of course, as we have mentioned, this Review is broader in scope than the Transitional Review and provides the first full opportunity to consider the content of modern awards.

1. The Evidence

1. Ai Group, ACCI and other employer bodies conducted a joint employer survey in May 2014 about matters relating to annual leave (the Employer Survey).[21]

1. The Ai Group’s submission notes that the scope of the Employer Survey was limited to Ai Group, ACCI and affiliate organisation members.[22] The survey instrument was distributed by the employer organisations to their membership lists together with a covering email which, in neutral terms, requested employers to complete the survey.[23] Some 4137 employers responded to the survey, consisting of 3713 full responses and 424 incomplete responses. Responses varied according to the survey question, with partial responses for certain questions.[24] The number of responses to the Employer Survey was significantly larger than other employer surveys, such as the ACCI Small Business Survey, which only had around 1500 responses.[25]

1. The Australian Council of Trade Unions (ACTU) and a number of individual unions advanced a number of criticisms of the Employer Survey, including:

·  it lacked methodological rigour;

·  the Employer Survey was not sent to a random, stratified population of employers and so cannot be said to be representative of employers as a whole;

·  some of the questions were leading, in the sense that they suggested answers; and

·  on analysis, the responses to the Employer Survey did not support the contentions advanced by the Employer Group.[26]

1. The ACTU submitted that the Employer Survey should be given no weight in the Commission’s consideration of the Employer Group’s claims.[27]

1. There is some force to a number of the criticisms made of the Employer Survey.

1. The Employer Survey is not a stratified random sample of the Australian business population,[28] nor does it purport to be.[29] However, the Employer Survey was said to be broadly representative of the population of employers in each state and territory.[30] At least one of the survey questions (Question 8) may be regarded as leading, but we do not regard this as a substantive criticism. The questions predominantly allowed for objective responses and, where a question appeared to assume a particular state of affairs, that was explained by the sequencing of the questions. For example, Questions 5 and 6 asked:

“Since 1 January 2010, have any of your organisation’s employees asked to cash out a portion of their annual leave? Choose one of the following answers.

·  Yes

·  No

·  Unsure”

“If yes, how many requests have you received?

·  1

·  2–5

·  5–20

·  20+”

1. The Employer Survey was completed online and Question 6 was only asked if there was an affirmative response to Question 5.[31]

1. Some difficulty arises from the fact that the Employer Survey did not ask businesses whether their workforce comprised employees to whom modern awards apply (or the extent of use of modern award application in that workplace). As a consequence, it is difficult to determine whether a response recorded by a business was in reference to an employee’s modern award or enterprise agreement. For example, Question 8 of the Employer Survey asked “... what has been the reason or reasons giving rise to the refusal [of a request to cash out a portion of an employee’s annual leave]?” The respondent had four responses to consider, with one response being “we were unable to agree because our award or agreement does not permit ...” This response does not make clear whether a business was referring to a modern award or enterprise agreement.

1. Taking account of all these issues we are satisfied that the Employer Survey provides a valuable insight into the practical issues facing employers in the management of the existing annual leave arrangements and we will take the Employer Survey responses into account. The Employer Survey utilised the available databases in order to maximise the number of responses. A substantial number of responses were received (relative to other employment surveys) and the respondents were reasonably representative of the population of employers in each state and territory. The methodological limitations with the survey (i.e. it was not a random stratified sample) mean that the results cannot be extrapolated such that they can be said to be representative of all employers.

1. In addition to the Employer Survey, various employer bodies and the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) tendered witness statements during the course of the proceedings:

Ai Group	Ms Kristina Flynn Mr Ben Waugh
ACCI	Ms Fiona Corbett Mr Julian Frederick Arndt
Ai Group and ACCI	Mr Eugene Kalenjuk
Accommodation Association of Australia	Mr Stuart Lamont Ms Nicki Passanisi Ms Joyce Lawson
Restaurant & Catering Australia	Mr David Murrie Mr Antonio D’Arienzo
Master Builders Australia Limited	Mr Geoffrey Charles Thomas
Housing Industry Association	Ms Melissa Adler
AMWU	Mr Warren Butler

1. We propose to make some general observations about some of this evidence now and we refer to it in more detail in our consideration of the particular claims.

1. ACCI and Ai Group filed a joint expert accounting report by Mr Eugene Kalenjuk, a partner at PricewaterhouseCoopers, which dealt with the financial impact of employees accruing substantial leave balances.

1. The evidence of Mr Ben Waugh related to the Employer Survey and the evidence of Ms Kristina Flynn, Ms Fiona Corbett and Ms Melissa Adler dealt with issues raised by employer members of their respective organisations.

1. The statements of Mr Stuart Lamont, Ms Nicki Passanisi, Ms Joyce Lawson, Mr David Murrie and Mr Antonio D’Arienzo (tendered by the Accommodation Association of Australia and Restaurant & Catering Australia) were in the form of a common template and all asserted that:

·  annual leave liability and excessive accrual of leave is an ongoing issue for their respective companies;

·  they believe that the cashing out of annual leave would be beneficial for their companies and employees; and

·  they support the applications by their respective organisations.

1. Evidence of this character is of very little assistance. It is plainly in a template form and expresses the witnesses’ belief as to the benefits of a cashing out provision, but not the factual basis for that belief. Statements by five employers that they support the claims made by their association on their behalf adds nothing to the substance of the arguments advanced in support of the employer claims.

1. A similar observation may be made about much of Mr Geoffrey Charles Thomas’ statement. Mr Thomas’ statement was largely in the form of a submission in support of the claims sought by the Employer Group. He expressed a range of opinions said to be based on his “experience as outlined in paragraph 1” of his statement, as follows:

“I make this statement based on my experience as an industrial relations practitioner in the Departments of Navy (1973 to 1975) and Defence (1975 to 1985), the Australian Nuclear Science and Technology Organisation (1988 to 1996) and the Master Builders Association of New South Wales (1998 to 2013).”[32]

1. This statement does not qualify Mr Thomas as an expert, in the sense of qualifying him to give opinion evidence.

1. The AMWU (Vehicle Division) filed two witness statements from Mr Warren Butler. The majority of Mr Butler’s evidence related to close-down provisions and the manufacturing and vehicle repair, service and retail industries.

1. In addition to the Employer Survey and the witness evidence, the submissions referred to other research relevant to the determination of the claims. We deal with this material later in our consideration of the specific claims before us. We also note that during the course of oral submissions a number of parties made a range of factual assertions from the bar table,[33] which were challenged by other parties.[34] We have not had regard to any of the challenged assertions.

1. We now turn to deal with each of the specific claims before us.

1. The Claims

4.1     Excessive annual leave

1. The Employer Group sought to insert the following clause into 70 modern awards:

“Excessive Annual Leave

Despite anything else in this clause, an employer may direct an employee to take paid annual leave if:

(a)       the employee has accrued at least six (6) weeks of annual leave;

(b)       the employer gives the employee four (4) weeks’ notice to take the annual leave; and

(c)       the employee retains at least four (4) weeks of accrued annual leave after the direction is given by the employer.”[35]

1. The ACCI and Ai Group submissions advanced a number of arguments in support of their proposal. It is convenient to deal first with the propositions which relate to the various matters the Commission must take into account pursuant to s.134(1) of the Act.

Promoting the efficient and productive performance of work (s.134(1)(d))

1. ACCI relied on a number of research reports[36] in support of the proposition that taking annual leave is critical to preventing burnout and poor health[37] and that such leave assists in maintaining job safety and satisfaction.[38] In addition to the academic research, ACCI relied on a number of arbitral decisions which have accepted that the actual taking of leave increases productivity as a result of a more balanced and rested workforce. It is contended that allowing employers to direct the taking of annual leave “should ensure a more balanced, rested and (accordingly) productive workforce”[39] and that such an outcome advances the objectives of s.134(1)(d).

The likely impact on business, including on productivity, employment costs and the regulatory burden (s.134(1)(f))

1. Ai Group and ACCI submitted that excessive leave accruals create substantial contingent liabilities for businesses and give rise to cash flow problems when accrued annual leave is paid upon the termination of employment. ACCI submitted that:

“ By allowing employers to direct employees to reduce excessive leave accruals, the model clause reduces the regulatory burden on employers. It allows employers to positively manage their finances, allowing for investment in other profit-generating aspects of a business.”[40]

1. It was contended that allowing employers to direct employees to reduce excessive leave accruals by taking leave advances the objectives of s.134(1)(f).

A simple, easy to understand, stable and sustainable modern award system (s.134(1)(g))

1. ACCI submitted that prior to 2006 (when the responsibility for annual leave broadly shifted to the federal jurisdiction) employers had the ability to direct employees to take annual leave, subject to adequate notice (said to be “typically but not invariably two weeks”).[41] On this basis ACCI advanced the following submission:

“7.26 There is no indication on the face of the FW Act or elsewhere that Parliament intended to depart from this prevailing position. Rather, and as discussed at section 4 above, it should be understood from the structure of Division 6 of Part 2-2 of the FW Act that Parliament expected the Commission to establish industry-specific machinery in awards to allow for the continued directing of annual leave by employers (particularly where agreement cannot be reached for the taking of leave).

7.27 The history that has allowed employers to direct employees to take excessive annual leave suggests that the Australian population generally has an appreciation and understanding of this machinery within industrial regulation. It is not a concept that would be confusing or difficult for the population to adapt to. Rather, it has been in existence for the majority of recent history.

7.28 In such circumstances, allowing employers to direct employees to take excessive annual leave does not conflict with section 134(1)(g) and, in many ways, advances the objectives of the section.”[42]

1. It was also submitted that granting the Employer Group’s claim would reduce the potential for disputes about the taking of annual leave.

Employment growth and the sustainability, performance and competitiveness of the national economy (s.134(1)(h))

1. ACCI submitted that granting the Employer Group’s claim would advance the objectives of s.134(1)(h) by reducing the regulatory burden on employers and through the positive impact the increased taking of leave will have on the Australian tourism industry:

“7.29 For the reasons already outlined at paragraphs 7.16 to 7.23, the model clause will reduce the regulatory burden on businesses and allow them to divert funds currently set aside for excessive leave accruals to profit generating investments.

7.30 Additionally, however, compelling employees to take leave is directly supportive of a major industry within the economy – Australian tourism. If employees take leave, one of the most likely outcomes is that such employees will travel on holidays. Although some travel may occur overseas, one of the key beneficiaries of employee travel will likely be the Australian tourism industry. It is for this reason that Tourism Australia is currently running a campaign, ‘No Leave No Life’, encouraging employees to take their annual leave. Campaign materials have been filed as ACCI Exhibit D.”[43]

1. In addition to the submissions set out above, Ai Group pointed to the fact that the Act places no restriction on the time period during which accrued annual leave entitlements must be taken:

“This means that, absent an award provision, many employees may simply elect to perpetually accrue their annual leave and only ever receive the benefits of the entitlement as a payment on termination.”[44]

1. Ai Group submitted that granting the Employer Group’s claim would encourage employees to take their accrued leave consistent with the traditional justification for annual leave entitlements:

“It is trite to observe that taking a break through a period of annual leave will have benefits for employees and for their families. However, it will also have positive effects for businesses such as increased productivity and workforce morale, and reduced work health and safety risks.”[45]

1. The ACTU accepted that it was desirable that employees take, rather than excessively accrue, their entitlement to paid annual leave:

“We strongly agree that employees should be taking leave for their rest and recreation and also for occupational health and safety reasons ... It is clear that employees should be taking leave: it is beneficial for them personally but also it makes them more productive employees and reduces the risk of workplace illness.”[46]

1. However, the ACTU opposed the Employer Group’s claim—both at a conceptual level and in relation to the elements of the model term proposed.

1. At a conceptual level, the ACTU submitted that the problem of excessive annual leave accruals “substantially lies not with employees seeking to hoard annual leave, but rather that despite section 88 of the FW Act, employers are unwilling to grant annual leave at times that suit the employee”.[47] The ACTU submitted that employers should not have “the ultimate or default say in when annual leave is taken”[48] and that the Employer Group’s model term was unlikely to achieve its objectives:

“The proposed clause is unlikely to achieve the benefits espoused by the employer groups because it fails to provide an employee with any autonomy as to when they take their annual leave. The proposal fails to foster any positive interaction between the employer and employee; rather, it simply provides an employer with the ability to dictate to an employee who has accrued six weeks’ annual leave to take it with four weeks’ notice.”[49]

1. While the ACTU criticised the model advanced by the Employer Group it did not advance any viable alternative means of addressing the problem of excessive accruals of paid annual leave. The ACTU did, however, propose a number of “additional safeguards” in the event that the Commission was minded to adopt an excessive leave term.[50] We have had regard to these submissions, and the employer submissions in reply, in framing a proposed model clause.

1. As to the particular elements of the Employer Group’s model clause, the ACTU advanced the following criticisms:

·   the proposed model clause fails to include any obligation on an employer to first seek to reach agreement with an employee before directing that a period of accrued leave be taken;[51]

·   six weeks’ annual leave is not an excessive accrual[52], and two years of accrued leave was proposed as a definition of “excessive” accrued leave[53]; and

·   four weeks’ notice is inadequate for an employee to get his or her affairs in order to take a period of paid annual leave[54] and at least eight weeks’ notice is required.[55]

1. While there is some force in the ACTU’s criticisms, they ultimately go to the content of any model term rather than mounting a persuasive case that it is not appropriate to make any variations to modern awards to address the problem of excessive accruals of paid annual leave.

1. We propose to deal with the relevant historical and legislative context first before turning to the merits of the claim.

1. Prior to the commencement of the NES and modern awards, federal and state legislation and awards commonly provided employers with a right to direct employees to take annual leave.

1. For example, the pre-modern Metal, Engineering and Associated Industries Award 1998 provided:

“7.1.9     Time of taking leave

7.1.9(a)  Annual leave shall be given at a time fixed by the employer within a period not exceeding six months from the date when the right to leave accrued.

7.1.9(b)  An employer can require an employee to take annual leave by giving not less than four weeks’ notice of the time when such leave is to be taken.

7.1.9(c)  By agreement between an employer and an employee, annual leave may be taken at any time provided it is done within two years from the date when the right to leave accrued.”

1. In New South Wales, s.3 of the Annual Holidays Act 1944 (NSW) provides:

“(4) The annual holiday shall be given by the employer and shall be taken by the worker before the expiration of a period of six months after the date upon which the right to such holiday accrues: Provided that the giving and taking of the whole or any separate period of such annual holiday may, with the consent in writing of the Industrial Registrar, or Deputy Industrial Registrar appointed under the Industrial Relations Act 1996, be postponed for a period to be specified by such Registrar in any case where he or she is of opinion that circumstances render such postponement necessary or desirable. ...

(6)(a)    The employer shall give each worker at least one month’s notice of the date from which the worker’s annual holiday shall be taken.”

1. The capacity to postpone a period of annual leave by application to the Industrial Registrar, envisaged by s.3(4) of the Annual Holidays Act 1944 (NSW), is rarely utilised.[56]

1. Section 12 of the Queensland Industrial Relations Act1999 deals with taking of annual leave:

“12        Taking annual leave

(1)       An employee and employer may agree when the employee is to take annual leave.

(2)       If the employee and employer cannot agree, the employer —

(a)       may decide when the employee is to take leave; and

(b)       must give the employee at least 14 days written notice of the starting date of the leave.”

1. A joint Ai Group, ACCI and ACTU document setting out the legislative provisions relating to annual leave in the WR Act and relevant state and territory legislation is at Attachment J (the Joint Exhibit).[57]

1. The Workplace Relations Amendment (Work Choices) Act 2005 (Work Choices Act) shifted the vast majority of the workforce[58] to the federal system and introduced a statutory set of minimum conditions, the Australian Fair Pay and Conditions Standard (the AFPCS), which applied to all federal system employees. The Work Choices Act also inserted s.16(1) into the WR Act which, relevantly for present purposes, had the effect of excluding any state or territory law which dealt with annual leave. Section 16(1) had the effect of creating an “exclusion zone”[59] for federal system employers and employees from the operation of state and territory annual leave laws.

1. The AFPCS is a legislative antecedent to what is now the NES. Section 236 of the WR Act dealt with the taking of leave, as follows:

“236      Rules about taking annual leave

General rules

(1)       Subject to this section and section 233, an employee is entitled to take an amount of annual leave during a particular period if:

(a)       at least that amount of annual leave is credited to the employee; and

(b)       the employee’s employer has authorised the employee to take the annual leave during that period.

(2)       To avoid doubt, there is no maximum or minimum limit on the amount of annual leave that an employer may authorise an employee to take.

(3)       Any authorisation given by an employer enabling an employee to take annual leave during a particular period is subject to the operational requirements of the workplace or enterprise in respect of which the employee is employed.

(4)       An employer must not unreasonably:

(a)       refuse to authorise an employee to take an amount of annual leave that is credited to the employee; or

(b)       revoke an authorisation enabling an employee to take annual leave during a particular period.

Shut downs

(5)       An employee must take an amount of annual leave during a particular period if:

(a)       the employee is directed to do so by the employee’s employer because, during that period, the employer shuts down the business, or any part of the business, in which the employee works; and

(b)       at least that amount of annual leave is credited to the employee.

Extensive accumulated annual leave

(6)       An employee must take an amount of annual leave during a particular period if:

(a)       the employee is directed to do so by his or her employer; and

(b)       at the time that the direction is given, the employee has annual leave credited to him or her of more than ¹/₁₃ of the number of nominal hours worked by the employee for the employer during the period of 104 weeks ending at the time that the direction is given; and

(c)       the amount of annual leave that the employee is directed to take is less than, or equal to, ¼ of the amount of credited annual leave of the employee at the time that the direction is given.”

1. The Explanatory Memorandum to the Workplace Relations Amendment (Work Choices) Bill 2005 states:

“533. Section 92H(6) [which became s.236] would enable an employer to direct an employee to take a period of paid annual leave if the employee has an annual leave credit greater than ¹/₁₃ of the number of nominal hours worked over a two year period (an amount equivalent to 8 weeks for an employee working 38 hours per week over that period). In this situation, the employer may direct the employee to take up to ¼ of his or her annual leave credit. The intention of this provision is to ensure that:

·  employees regularly take periods of leave for rest and recreation, and

·  employers are not required to pay out excessive untaken leave accruals when an employee’s employment ends.

Illustrative Example

Lucas has been employed by Chocolates Galore Pty Ltd for four and a half years, working 38 nominal hours each week. In that time, he has accrued 684 hours (the equivalent of 90 days) of annual leave, of which he has taken 228 hours (the equivalent of 30 days), leaving a balance of 456 hours (or 60 days).

As Lucas enjoys his job he’s only ever taken a week or two of his annual leave each year to go surfing.

Lucas’s current balance of annual leave is more than 304 hours (or 40 days), which is what he would normally accrue over a 24 month period.

In this case, his employer could direct him to take up to one quarter (or 76 hours) of his accrued annual leave balance.”

1. Section 236(6) of the WR Act provided that an employer could direct an employee to take an amount of annual leave during a particular period if the employee had “extensive accumulated annual leave”. “Extensive accumulated annual leave” was defined by s.236(6)(b) and generally amounted to eight weeks’ accrued leave for full-time employees. There was no notice requirement for an employer directing an employee to take excessive leave, but there was a limit to the quantum of leave that the employee could be directed to take, being 25 per cent of the employee’s balance. So if an employee had eight weeks’ accrued leave the employee could be directed to take up to two weeks’ leave.

1. We now turn to the relevant provisions of the Act.

1. The Act does not require an employee to take their accrued paid annual leave within any particular timeframe. Section 88, which deals with the taking of annual leave, states:

“88        Taking paid annual leave

(1)       Paid annual leave may be taken for a period agreed between an employee and his or her employer.

(2)       The employer must not unreasonably refuse to agree to a request by the employee to take paid annual leave.”

1. Sections 93 and 139(1) are relevant insofar as they deal with the terms which may be included in a modern award.

1. Subsections 93(3) and (4) of the Act are relevant in the context of this claim and provide as follows:

“Terms about requirements to take paid annual leave

(3)       A modern award or enterprise agreement may include terms requiring an employee, or allowing for an employee to be required, to take paid annual leave in particular circumstances, but only if the requirement is reasonable.

Terms about taking paid annual leave

(4)       A modern award or enterprise agreement may include terms otherwise dealing with the taking of paid annual leave.” (emphasis added)

1. Section 139(1)(h) provides that a modern award may include terms about any of the following matters:

“(h)       leave, leave loadings and arrangements for taking leave.” (emphasis added)

1. Subject to the requirement to take leave being reasonable, it seems to us that a modern award term which provides that an employee can be required to take a period of annual leave to reduce the employee’s excessive level of accrued paid annual leave is a term of the type contemplated by s.93(3) of the Act. We are fortified in this conclusion by the terms of the Explanatory Memorandum to the Fair Work Bill 2008 which states:

“381. Subclause 93(3) permits terms to be included in an award or agreement that require an employee, or that enable an employer to require or direct an employee, to take paid annual leave in particular circumstances, but only if the requirement is reasonable. This may include the employer requiring an employee to take a period of annual leave to reduce the employee’s excessive level of accrual or if the employer decides to shut down the workplace over the Christmas/New Year period.

382. In assessing the reasonableness of a requirement or direction under this subclause it is envisaged that the following are all relevant considerations:

·   the needs of both the employee and the employer’s business;

·   any agreed arrangement with the employee;

·   the custom and practice in the business;

·   the timing of the requirement or direction to take leave; and

·   the reasonableness of the period of notice given to the employee to take leave.”

1. As to s.93(4), the words “otherwise dealing with the taking of annual leave” (emphasis added) is a reference to a term for dealing with the taking of annual leave other than a term of the type contemplated by s.93(3). The relevant extract from the Explanatory Memorandum provides as follows:

“Subclause 93(4) enables an award or agreement to include other terms about the taking of paid annual leave – e.g., the taking of paid annual leave in advance of accrual.”[60]

1. We also note that different arrangements apply in relation to award/agreement free employees. Subsections 94(5) and (6) provide as follows:

“Requirements to take paid annual leave

(5)       An employer may require an award/agreement free employee to take a period of paid annual leave, but only if the requirement is reasonable.

Note:    A requirement to take paid annual leave may be reasonable if, for example:

(a)        the employee has accrued an excessive amount of paid annual leave; or

(b)         the employer’s enterprise is being shut down for a period (for example, between Christmas and New Year).

Agreements about taking paid annual leave

(6)        An employer and an award/agreement free employee may agree on when and how paid annual leave may be taken by the employee.

Note:     Matters that could be agreed include, for example, the following:

(a)         that paid annual leave may be taken in advance of accrual;

(b)        that paid annual leave must be taken within a fixed period of time after it is accrued;

(c)         the form of application for paid annual leave;

(d)        that a specified period of notice must be given before taking paid annual leave.”

1. The award modernisation process conducted by the AIRC under Part 10A of the WR Act also provides part of the historical context. The process took place from April 2008 to December 2009 and was conducted in accordance with a written request (the award modernisation request) made by the Minister for Employment and Workplace Relations to the President of the AIRC. The award modernisation process was completed in four stages, each stage focussing on different industries and occupations. All stakeholders and interested parties were invited to make submissions on what should be included in modern awards for a particular industry or occupation. Separate processes, including the provision of submissions, hearings and release of draft awards, were undertaken in respect of the creation of each modern award to ensure parties were able to make submissions and raise matters of concern in relation to particular awards. By the end of 2009 the AIRC had reviewed more than 1500 state and federal awards and created 122 industry- and occupation-based modern awards.

1. In its 19 December 2008 Award Modernisation decision (2008 Award Modernisation decision), the Award Modernisation Full Bench made some observations about the right of an employer to direct an employee to take accrued leave, as set out below:

“[95] As we noted in our statement of 12 September 2008, it has not been possible to develop a single model clause for annual leave. While some parties have sought greater uniformity in the area, there is a wide range of differing provisions in the awards and NAPSAs that we are dealing with. In many cases the provisions are more generous to employees than the provisions of the NES. Areas in which this can be observed are the quantum of holiday pay, leave loading and the definition of shift worker. In considering what should be included in the modern award on each of these matters we have attempted to identify or formulate a standard entitlement in the area covered by the modern award rather than preserving a range of differing entitlements. This involves a degree of rationalisation at the award level only and will not result in standard provisions across all awards.

[96] There are also some issues concerning the time of taking leave. The time of taking leave is referred to in para.33 of the consolidated request and s.36(1)(b) of the NES. Section 36(1)(b) reads:

‘36      Modern awards may include certain kinds of provisions

(1)       A modern award may include provisions of any of the following kinds:

…

(b)       provisions requiring an employee (or allowing for an employee to be required) to take paid annual leave in particular circumstances;

...’

[98] One issue that has arisen repeatedly, and is provided for in the NES, is the right of an employer to require that an employee take arrears of annual leave. We think that an employer should have the ability to reduce annual leave liability by compelling employees to take annual leave provided appropriate notice is given. While there may be different approaches to this question, in each of the awards there will be some provision which will give the employer the ability to take action to reduce arrears.”[61]

1. In 2010, the Award Modernisation Full Bench considered seven applications to vary the General Retail Industry Award 2010.[62] In relation to excessive leave, it considered an application by the Shop, Distributive and Allied Employees Association (SDA) which sought to limit the ability of an employer to compel an employee to take leave where more than eight weeks’ leave had accrued.[63] The Full Bench dismissed the application stating that the SDA had not made an appropriate case to support the application.[64]

1. The Full Bench also considered three applications to vary the Fast Food Industry Award 2010.[65] One application, which was jointly filed by the National Retail Association Ltd and Ai Group, sought to include a provision permitting an employer to direct an employee to take annual leave where more than eight weeks’ leave was accrued. The SDA opposed the variation.[66] The Full Bench denied the application to vary the award to include a provision in relation to excessive leave on the grounds that no history of such provisions had been established and the variation was opposed.[67]

1. At present, 79 modern awards contain excessive leave provisions.[68] We deal with these provisions and the awards that the Employer Group is seeking to vary later in our decision.

1. We now turn to the merits of the Employer Group’s claim. We deal first with the extent to which employees do not utilise their full paid leave entitlement and the issues associated with the accrual of “excessive leave”.

1. The evidence clearly establishes that most employees accrue a portion of their paid annual leave entitlement and that a significant proportion of employees have six weeks or more of such accrued leave.

1. A paper by Skinner and Pocock examined, among other things, the utilisation of paid leave and the reasons why employees did not utilise their full paid entitlement.[69] It presents data which is a subset of the Australian Work and Life Index 2010 (AWALI 2010) survey. The AWALI 2010 survey is a national stratified random survey of 2803 Australian workers conducted using computer assisted telephone interviews over four weekends in March and April 2010. The survey asked questions about the use of paid annual leave in 2009. The authors’ study replicates and extends a study conducted by The Australia Institute in 2002 (TAI 2002) on Australian’s uptake of paid leave.[70]

1. Skinner and Pocock found that in 2009, only 40.3 per cent of full-time employees used all of their paid leave, leaving about 60 per cent who had not taken some portion of their leave. Similar results were obtained in the TAI 2002 survey (only 38.8 per cent of employees used all their paid leave).

1. As shown in Table 1, women and men reported that they utilised their full leave entitlement at similar levels. As to the uptake of leave by reference to employee circumstances, Skinner and Pocock noted:

“Uptake of leave, or the lack thereof, is consistent across family type, life stage and household income, although there are some differences in the rate of leave uptake, with more of those who are older, single parents and middle-income earners using all of their leave (data available upon request). It is interesting to note that the presence of children under 18 is not associated with a higher rate of leave use.”[71]

Table 1:         Used all paid leave by gender, age and parenting status, AWALI 2010 and TAI 2002

AWALI 2010			TAI 2002
Men (%)	Women (%)	All (%)	Men (%)	Women (%)	All (%)
All	41.0	39.2	40.3	37.7	41.2	38.8
Age
18–24 years	34.3	37.3*	35.3	-	-	-
25–34 years	40.1	31.9	37.5	-	-	37.2
35–49 years	41.1	42.9	41.7	-	-	35.8
50–59 years	45.6	43.6	44.6	-	-	50.2
60+ years	44.9	38.5	43.2	-	-	-
Parenting responsibility
Children < 18 years	40.5	39.6	40.3	-	-	43.5
No Children < 18 years	41.4	38.9	40.3	-	-	35.7
Household composition
Single parent	57.9*	42.9*	47.5	-	-
Couple with children	41.7	40.4	41.5	-	-
Couple without children	40.7	41.0	40.8	-	-
Single without children	42.0	36.0	40.0	-	-
Household income
< $30,000	**	**	**	-	-	**
$30,000–$59,999	44.2	39.6	42.5	-	-	42.1
$60,000+	40.1	39.0	39.7	-	-	38.5

Notes: *Estimates unreliable due to insufficient sample size; **Estimate not provided due to inadequate sample size “-” data not available. TAI data only included those aged 25–59 years.

Source: Skinner N and Pocock B (2013), ‘Paid annual leave in Australia: Who gets it, who takes it and implications for work-life interference’, Journal of Industrial Relations 55(5), p.686.

1. The Skinner and Pocock findings are consistent with three other research papers[72] and the results from the Employer Survey.

1. Wooden and Warren reported on the extent of usage of paid annual leave in Australia using new data collected in Wave 5 of the Household, Income and Labour Dynamics in Australia (HILDA) survey, and concluded that the majority of employees do not take their full annual leave entitlement each year.[73]

1. The HILDA survey is a household panel survey that began in 2001, with a large nationally representative sample of Australian households. All members of responding households from Wave 1 form the basis of the panel to be followed over time, though interviews are only conducted with persons aged 15 years or older. The data on annual leave comes from responses to two questions. The first identifies whether a respondent has spent any time on paid annual leave during the 12 months preceding the interview. All persons answering in the affirmative are then asked how many days (or weeks) they spent on paid annual leave during that 12 month period. These questions were included for the first time in Wave 5 and so we only have information about patterns of leave usage over a single one year period.

1. Table 2 presents summary statistics on both the proportion of workers taking any paid annual leave and the average number of days taken by persons employed at the date of interview. The table shows that just over half of all employed persons took at least one day of paid annual leave during the one year reference period and on average, just nine days of annual leave were taken.

Table 2:         Paid annual leave by current employment status, HILDA survey Wave 5

Employment status	% taking any paid leave	Mean leave days	Mean leave days taken by those who took leave
Employees	60.2	10.0	16.7
Employees of own business	39.9	6.9	17.4
Own account workers	12.4	1.7	14.0
All employed	53.8	8.9	16.6

Source: Wooden M and Warren D (2008), ‘Paid Annual Leave and Working Hours: Evidence from the HILDA Survey’, Journal of Industrial Relations 50(4), p.666.

1. Table 2 shows that a large proportion of employees did not take any paid annual leave in the one year reference period, and that average leave usage was only half of the entitlement of most full-time employees (i.e. four weeks). But, as Wooden and Warren noted, the data presented in the above table does not provide a good guide to how usage of leave compares with entitlements.[74] There are a number of reasons for this, including that: over one-quarter of the employee workforce are employed on a casual basis and so do not have any annual leave entitlements; part-time employees will typically be entitled to less than 20 days’ paid annual leave; and some workers covered by the data in Table 2 will have been employed with their current employer for less than one year and so will not have accrued four weeks’ leave.

1. A better guide to the extent to which leave entitlements are being used is provided by focusing on the sub-sample of employees who state that their employer provides them with paid annual leave, they have been employed with their current employer for at least one year, and report usual weekly working hours of 35 or more. Wooden and Warren stated that almost 90 per cent of this group reported taking at least one day of paid annual leave during the year, with the mean leave taken being 16.1 days. Further information on the pattern of leave usage for this group is provided in Chart 1, which reveals a wide distribution around the mean.

Chart 1:         Distribution of paid annual leave days—Full-time employees with leave entitlements and at least one year’s service

Source: Wooden M and Warren D (2008), ‘Paid Annual Leave and Working Hours: Evidence from the HILDA Survey’, Journal of Industrial Relations 50(4), pp.667.

1. On the basis of the data set out in Chart 1, Wooden and Warren concluded as follows:

“While 20 days (or 4 weeks) is the most common response, the majority (63%) reported taking less than 20 annual leave days during the year.”[75]

1. Cameron and Denniss report on the results of a survey conducted by the Australian Institute and beyondblue. The relevant aspects of their findings and conclusions are set out below:

“Over half of the respondents (52 per cent), equating to six million workers, did not take all their leave in 2012. Higher earners, with incomes over $80,000, are less likely to take all their leave and those in large workplaces (with more than 100 employees) are less likely to take their full annual leave: 69 per cent of respondents working in organisations of 100–200 employees and 59 per cent in organisations with more than 200 employees, compared to an average 48 per cent of respondents across all other workplaces. It is worth noting, however, that half of respondents in all workplaces with up to 100 employees reported that they did not take all their annual leave entitlement in 2012.”[76]

1. ACCI also tendered material produced by Tourism Australia for the “No leave, No life” campaign. This material included research findings—about annual leave accrual in Australia. For the purpose of this research, “leave stockpilers” were defined as employees with 25 days or more of accrued annual leave. The “Key Facts” reported from the research are set out below:

“Key Facts

1.        Australia has 129 million days of accrued annual leave by full-time employees. This equates to $33.3 billion in wages as of September 2011 (Roy Morgan Research)

2.        Annual leave accrual by full-time employees has grown by 11% from December 2006 to December 2008 (Roy Morgan Research)

3.        Annual leave accrual is endemic across all sizes of business and industries. No business is too big or small to feel the impact of accrued leave. Annual leave stockpiling has become entrenched workplace behaviour potentially affecting every business regardless of size or type

4.        1 in 4 of Australian full-time employees are leave stockpilers (Roy Morgan Research)

5.        73% of stockpilers consider work/life balance (WLB) an important aspect of their life

·      Female stockpilers place greater importance on WLB [80%] compared to males [69%]

6.        70% of stockpilers agree that annual leave positively impacts work/life balance (WLB)

·      Stronger amongst females (78%) than males (67%)

7.        Only 56% of stockpilers believe that their employer is generally supportive of leave taking

·      Highest amongst government employees [60%] and lowest amongst SME (49%)

·      Stockpilers who believe their employer is supportive of leave-taking have higher intention to take an Australian holiday [64%) than those who do not (51%)

8.        80% of stockpilers cite personal barriers to leave-taking

·      Availability of funds is the biggest concern (40%)

·      Fitting around partner’s availability is also difficult (28%)

·      Deliberate accrual for emergencies (26%) or big trip (24%) is third most common reason

9.        57% of stockpilers consider work related barriers prevent them from taking leave compared to 48% of non stockpilers

·      Concern about workload before and after leave is the main barrier (30%)

·      Lack of resources for cover is second (26%)

·      Difficulty of scheduling leave when desired [21%] or around projects (21%) rank third

10.      Stockpilers’ strongest perceived benefits of annual leave are passive in nature

·      Relaxation (75%)

·      Quality time with family and friends (73%)

·      Long term health (69%)

11.      Females are more likely to have sole responsibility for decisions about leave taking (47%) compared to males (34%)

12.      Whilst over half of leave stockpilers are employed in private industry, employees in the public sector are more likely to accrue leave than their private sector counterparts.”

1. The Tourism Australia material tendered provides little information about the methodology used and for that reason we do not place much weight on the above findings, other than to note that they are consistent with the other research.

1. The data from the Employer Survey show similar results to that in the research to which we have referred. Questions 11–14 of the Employer Survey are directed at the issue of excessive leave accrual. We deal with Questions 12–14 later; Question 11 was as follows:

“11. What percentage of your employees have annual leave balances of 6 or more weeks:

·    none

·    1–20%

·    21–50%

·    51–70%

·    70%+

·    Unsure”

1. Some 2552 employers (about 68 per cent of all responses) had at least one employee with an accrued paid annual leave balance of six weeks or more. Of these employers, 683 reported that over 20 per cent of their employees had accrued paid annual leave balances of six weeks or more.[77]

1. The evidence canvassed above (at paragraphs [99]– [115]) supports the following findings:

(i)        most employees do not use their full paid annual leave entitlement (the NES provides that non-casual employees are entitled to four weeks’ paid annual leave (shiftworkers as referred to in s.87(1) are entitled to five weeks)); and

(ii)       the lack of annual leave utilisation is broadly consistent across family type, life stage and household income; and

(iii)      a significant proportion of employees have six weeks or more accrued annual leave.

1. As we have mentioned, the purpose of annual leave is to provide employees with a period of rest and recreation. A corollary of excessive accrual of annual leave is that employees are not receiving the benefit for which the leave was intended. In the proceedings before us it was generally accepted that not taking a reasonable portion of leave can give rise to a serious threat to the health and safety of the employees concerned. This consensus is reflected in the academic research.

1. Skinner and Pocock cite existing research which suggests that not taking paid leave represents a serious risk to the health and wellbeing of the employees concerned and they summarised the relevant research in the following terms:

“There is also a physiological and psychological need for opportunities for rest and recovery from periods of sustained daily and weekly effort at work (Van Hooff et al., 2007).

The issue of paid annual leave is less frequently discussed in working time research and in wider public policy discourse. Longer breaks from work in the form of paid leave are a crucial aspect of working time that have significant implications for health and well-being. Breaks from work of more than a day or two provide the opportunity for more substantial rest and recovery from work demands than a lunch break, evening at home or weekend can provide (Trenberth and Dewe, 2002). This is especially the case in typically busy dual-earner or sole-parent/-worker households, in which weekdays and weekends are often busy and tightly scheduled, and especially so for parents.

Not taking paid leave is a serious threat to health. Middle-aged men at risk of cardiovascular disease significantly reduce their risk of death from this disease and other causes when they take more annual vacations (Gump and Matthews, 2000). In a large longitudinal cohort study of healthy women, it was found that infrequent vacations and tension increase the risk of both heart attack and coronary death (Eaker et al., 1992). Paid leave often provides greater opportunities to engage in enjoyable and meaningful leisure activities, which have been shown to be an effective therapy for depression, anxiety and burnout.”[78]

1. The adverse impact of not taking annual leave is canvassed by Cameron and Denniss who state that the results of the survey they conducted indicate a strong correlation between work-related stress and anxiety and not taking leave breaks:

“... respondents who did not take all their annual leave in 2012 were markedly more likely to report having negative feelings about work than those who did take all their leave entitlement.”[79]

1. Chart 2 shows that of the group who did not take their full leave entitlement, 39 per cent felt stressed about work; 28 per cent felt anxious; 24 per cent were worried and 21 per cent were overwhelmed by their work. By comparison, of those who did take their full annual leave, 29 per cent were stressed; 24 per cent were anxious; 17 per cent were worried and 14 per cent felt overwhelmed by their work.

Chart 2:         Taking full annual leave and feelings about work

Source: Cameron P and Denniss R (2013), ‘Hard to get a break? Hours, leave and barriers to re-entering the Australian workforce’, The Australia Institute, Institute Paper No. 13, November 2013 at p. 27.

1. Cairncross and Waller surveyed the implications of employees working longer hours and not taking their full annual leave entitlements. The authors expressed some tentative conclusions and identified a need for further research:

“In light of the data pertaining to the impost on the Australian economy of workplace accidents and occupational stress, it is currently guesswork to surmise what the benefits may be of holidays in terms of increased productivity and decreased accident and illness costs in Australia. However, it is reasonable to assume given the value of a holiday to the tourism and hospitality industry (Bureau of Tourism Research), and the physical (Dennis 2003) and psychological costs of long working hours (Bent 1998) together with the value of a holiday in reducing stress (Etzion 2003), there is value in further research establishing the true economic value of taking full annual leave entitlement each year. ...

The examination of the literature suggests that in-depth research is required into the psychological and economic reasons for Australians not taking their holidays Etzion (2003), for example, has established that people who take their leave are more productive and exhibit fewer symptoms of workplace stress. The potential social and physical cost to individuals and the potential cost to the economy of the current low uptake of annual leave makes it imperative to see if a lower workplace accident rate can be obtained by those employees who do have a reasonable holiday break each year. If this is the case then it may be that there is some value in compulsory leave clauses being negotiated into employment instruments.”[80]

1. There is little doubt that not taking annual leave gives rise to a risk of fatigue at work. Safe Work Australia describes fatigue as “a state of mental and/or physical exhaustion which reduces a person’s ability to perform work safely and effectively”. Fatigue can adversely affect health and safety at the workplace—it reduces alertness which may lead to errors and an increase in incidents and injuries.[81] Safe Work Australia observed that the best way to control the health and safety risks arising from fatigue is to eliminate the factors causing fatigue at the source. One of the control measures for fatigue risks which Safe Work Australia suggests can be built into a work schedule is:

[84] Ai Group submission and witness statements, 20 June 2014, Witness statement of Mr Ben Waugh, Attachment E at p. 27.

[85] Skinner, N and Pocock, B (2013) Paid Annual Leave in Australia: Who gets it, who takes it and implications for work-life balance, Journal of Industrial Relations, 21 August 2013, Vol. 55 at p. 682.

[86] Skinner, N and Pocock, B (2013) Paid Annual Leave in Australia: Who gets it, who takes it and implications for work-life balance, Journal of Industrial Relations, 21 August 2013, Vol. 55 at p.694.

[87] ACCI outline of submissions, 20 June 2014 at para 7.14.

[88] [1915] AR 235 at [237]–[238].

[89] [1915] AR 235 at [237]–[238].

[90] (1936) 36 CAR 738.

[91] (1936) 36 CAR 738 at [747].

[92] Eden D (2001), ‘Vacations and other respites: Studying stress on and off the job’, in Robertson I (eds) International Review of Industrial and Organisational Psychology, Vol 16, New York, John Wiley & Sons pp 121-146, cited in Skinner, N and Pocock, B (2013) Paid Annual Leave in Australia: Who gets it, who takes it and implications for work-life balance, Journal of Industrial Relations, 21 August 2013, Vol. 55 at p.682

[93] Cited in Skinner, N and Pocock, B (2013) Paid Annual Leave in Australia: Who gets it, who takes it and implications for work-life balance, Journal of Industrial Relations, 21 August 2013, Vol. 55, p.82. at pp. 682–683

[94] Westman & Etzion (2001) at pp. 595, 602–603, cited in Skinner, N and Pocock, B (2013) Paid Annual Leave in Australia: Who gets it, who takes it and implications for work-life balance, Journal of Industrial Relations, 21 August 2013, Vol. 55, at p.682

[95] Etzion, D. 2003, ‘Annual vacation: duration of relief from job stressors and burnout.’ Anxiety, Stress and Coping, 16(2), at pp. 223–224.

[96] Skinner, N and Pocock, B (2013) Paid Annual Leave in Australia: Who gets it, who takes it and implications for work-life balance, Journal of Industrial Relations, 21 August 2013, Vol. 55 at pp. 688–689

[97] Skinner, N and Pocock, B (2013) Paid Annual Leave in Australia: Who gets it, who takes it and implications for work-life balance, Journal of Industrial Relations, 21 August 2013, Vol. 55 at p.689

[98] Skinner, N and Pocock, B (2013) Paid Annual Leave in Australia: Who gets it, who takes it and implications for work-life balance, Journal of Industrial Relations, 21 August 2013, Vol. 55 at p. 689.

[99] Skinner, N and Pocock, B (2013) Paid Annual Leave in Australia: Who gets it, who takes it and implications for work-life balance, Journal of Industrial Relations, 21 August 2013, Vol. 55 at p. 695.

[100] Ai Group correspondence, 21 May 2014, Attachment A at p. 1; varied by Ai Group correspondence, 15 October 2014, Attachment A at p. 1.

[101] See also Attachment F; figure amended from 83 in the 30 May 2014 Background Paper.

[102] Sometimes described as ‘18 months of annual leave accrued’: Cemetery Industry Award 2010 at clause 24.3.

[103] Nurses Award 2010, cl.31.2; Security Services Industry Award 2010, cl.24.3; Asphalt Industry Award 2010, cl.25.5; Broadcasting and Recorded Entertainment Award 2010, cl.23.6; Cement and Lime Award 2010, cl. 24.5; Gardening and Landscaping Services Award 2010, cl. 24.4; Gas Industry Award 2010, cl.25.4; Horse and Greyhound Training Award 2010, cl. 23.4; Premixed Concrete Award 2010, cl. 24.5; Quarrying Award 2010, cl.29.5; Racing Clubs Events Award 2010, cl.30.4; Racing Industry Ground Maintenance Award 2010, cl.24.3; Silviculture Award 2010, cl.29.4; Sporting Organisations Award 2010, cl.25.4; Textile, Clothing, Footwear and Associated Industries Award 2010, cl.41.4; Black Coal Mining Industry Award 2010, cl.25.4; Air Pilots Award 2010, cl.27.4; Architects Award 2010, cl.20.2; Ambulance and Patient Transport Industry Award 2010, cl.30.8; Mobile Crane Hiring Award 2010, cl.25.2; Ports, Harbours and Enclosed Water Vessels Award 2010, cl.22.4; Aquaculture Industry Award 2010, cl. 23.4.

[104] The Nurses Award 2010 (cl.31.2) provides that ‘Annual leave will be given and taken within six months of the employee becoming entitled to annual leave of more than five weeks’; Also see the Black Coal Mining Industry Award 2010, cl.25.4 (‘unless otherwise agreed, annual leave will be taken within 12 months of the date the employee received the annual leave entitlement’); Air Pilots Award 2010, cl.27.4 (‘Normally, annual leave will be granted and will be taken within 12 months from the date on which it falls due or alternatively 15 months from the date of commencement of the preceding period of leave’); Architects Award 2010, cl.20.2 (‘The employee must be allowed to take annual leave at a time agreed with the employer, within four months after it is due’); Ambulance and Patient Transport Industry Award 2010, cl.30.8 (‘Annual leave will be taken within six months of the employee becoming entitled to take it unless alternative arrangements are agreed between the employer and employee’); Mobile Crane Hiring Award 2010, cl. 25.2 (‘Leave will be given and will be taken within six months from the date when the right to annual leave occurred and after not less than four weeks notice to the employees’); Ports, Harbours and Enclosed Water Vessels Award 2010, cl.22.4 (‘Annual leave must be taken within six months of the entitlement accruing’).

[105] Higher Education Industry—General Staff—Award 2010, cl.30.1(a) and Higher Education Industry—Academic Staff—Award 2010, cl.23.1 (‘at least two months prior to the date on which the employee is to take the leave’); Also note that the Ports, Harbours and Enclosed Water Vessels Award 2010, cl. 22.4 provides that ‘An employer may require an employee to take a period of annual leave provided the employee is given at least 14 days’ notice’.

[106] Section 127 provides that the Regulations may permit modern awards to include terms that would or might otherwise be contrary to Part 2-2 or s.55, or prohibit modern awards from including terms that would or might otherwise be permitted by Part 2-2 or s.55. No such regulations have been made.

[107] Ai Group submission and witness statements, 20 June 2014 at paras 17–18 and 20–21.

[108] Ai Group submission and witness statements, 20 June 2014 at para 33.

[109] [2015] FWCFB 3124 at para 25.

[110] [2015] FWCFB 3124 at paras 25–28.

[111] Ai Group correspondence, 21 May 2014; ACCI correspondence, 21 May 2014.

[112] Re Just Cuts (Canberra and Queanbeyan) Agreement 2000-2003, Print T3829, 30 November 2000 at para 16.

[113] Review of Wage Fixing Principles – October 1993 (1993) 50 IR 285 at [320]; Enterprise Flexibility Test Case (1995) 59 IR 430 at [457].

[114] [2008] AIRCFB 1000 at paras 99–100.

[115] [2009] AIRCFB 50 at paras 3–4 and 8–9.

[116] [2009] AIRCFB 345 at para 4.

[117] For example see Re Journalists Published Media Award 2010 (2009) 187 IR 192 at [116]; Re Commercial Sales Award 2010 [2009] AIRCFB 826 at [276]; Re Meat Industry Award 2010 [2009] AIRCFB 942 at [11]. 

[118] Seafood Processing Award 2010 at clause 27.8.

[119] Seafood Processors and Exporters Council and others Parties’ Draft awards—Seafood Processing Industry Award, 6 April 2009.

[120] [2010] FWAFB 9985.

[121] [2010] FWAFB 9985.

[122] CFMEU v Fair Work Australia and Newlands Coal Pty Ltd [2011] FCA 719 at [83].

[123] Enterprise bargaining commenced in October 1991 through the ‘Prices and Incomes Accord Mark VII’ however note the principle of enterprise bargaining was federally legislated in 1993 via the Industrial Relations Reform Act 1993 (Cth).

[124] ACCI submission, 27 November 2014; ACTU submission, 27 November 2014; TCFUA submission, 27 November 2014; Ai Group submission, 27 November 2014; BHP Billiton correspondence and submission, 27 November 2014; Housing Industry Association correspondence, 27 November 2014.

[125] AE406974.

[126] For example clause 33.4 the Downer EDI Engineering Electrical Pty Ltd (Tasmania) Greenfield Agreement 2013 [AE406442].

[127] For example clause 9.15.6 of the Diver Consolidated Industries (DCI) Enterprise Agreement 2013 [AE407170] which provides for cashing out of annual leave only once an employee has been with the employer for 10 years or more.

[128] For example clause 20.3 of The Westin Melbourne Enterprise Agreement 2012 [AE407158].

[129] [2013] FWCFB 1635 at para 229.

[130] Transcript at paras 1506 and 1522.

[131] Transcript at paras 1527 and 1532.

[132] Ai Group submission and witness statements, 20 June 2014, Witness statement of Mr Ben Waugh, Attachment E at p. 15.

[133] Ai Group submission and witness statements, 20 June 2014, Witness statement of Ms Kristina Flynn at para 21.

[134] ACCI outline of submissions, 20 June 2014, Witness statement of Ms Fiona Corbett at para 7.

[135] [2014] FWCFB 3500 at paras 392 and 400.

[136] ACTU submission, 27 November 2014 at para 35.

[137] [2014] FWCFB 3500 at para 72.

[138] ACCI outline of submissions, 20 June 2014 at paras 6.24–6.26; Ai Group submission and witness statements, 20 June 2014 at para 126.

[139] Pepsi Seven-Up Bottlers Perth Pty Ltd v FCT (1995) 62 FCR 289 at [298]–[299] per Hill J.

[140] Fair Work Act 2009, s.134(f).

[141] [2012] FWAFB 7858 at paras 38–45.

[142] [2013] FWCFB 4000 at para 140.

[143] ACCI outline of submissions, 20 June 2014 at para 6.9.

[144] Mitchell R and Fetter J (2003) ‘The individualisation of employment relationships and the adoption of high performance work practices: Final Report’, University of Melbourne at p. 9.

[145] Mitchell R and Fetter J (2003) ‘The individualisation of employment relationships and the adoption of high performance work practices: Final Report’, University of Melbourne at p. 9.

[146] Mitchell R and Fetter J (2003) ‘The individualisation of employment relationships and the adoption of high performance work practices: Final Report’, University of Melbourne at pp. 6–8.

[147] ABS, Employee Earnings and Hours, Australia, May 2014, unpublished survey instrument, glossary.

[148] ABS, Employee Earnings and Hours, Australia, May 2014, Catalogue No, 6306.0, glossary.

[149] ABS, Employee Earnings and Hours, Australia, May 2014, Catalogue No, 6306.0, glossary.

[150] ABS, Employee Earnings and Hours, Australia, May 2014, Catalogue No, 6306.0, glossary.

[151] ABS, Employee Earnings and Hours, Australia, May 2014, Catalogue No, 6306.0, glossary. Data on owner managers of incorporated enterprises were not available and hence excluded from the analysis such that proportions calculated reflect the total of collective agreements, individual arrangements and ‘award only’ arrangements.

[152] It is noted that s.23 of the FW Act defines a small business (national system employer) as an employer that employs fewer than 15 employees.

[153] The chart in the background paper set out the 2012 data (which was the most recent data at the time the background paper was released). The May 2014 data shows the same pattern as the 2012 data.

[154] BHP Billiton’s submission, 27 November 2014 at paras 8–9.

[155] ACTU submission in reply, 1 August 2014, p. 11 at paras 37–39.

[156] ACTU submission in reply, 1 August 2014 at paras 270 and 272.

[157] AMWU outline of submissions in reply, 1 August 2014, p. 6 at para. 4.3.

[158] AMWU outline of submissions in reply, 1 August 2014, p. 7 at para 4.3.5.

[159] Transcript at para 1196.

[160] Transcript at para 1236.

[161] ACTU submission in reply, 1 August 2014, pp. 58 and 60 at paras 288, 297 and 298.

[162] ACTU submission in reply, 1 August 2014, p. 61 at para 299.

[163] [2008] AIRCFB 1000 at paras 99–100.

[164] [2009] AIRCFB 942.

[165] Transcript at para 1190; ACTU submission in reply, 1 August 2014. p. 56 at para 269.

[166] [2009] AIRCFB 942 at para 11.

[167] Construction, Forestry, Mining and Energy Union v Fair Work Australia and Newlands Coal Pty Ltd [2011] FCA 719 at [83].

[168] Transcript at paras 1418–1420.

[169] ACTU submission in reply, 1 August 2014, p. 5 at para 15.

[170] ACTU submission in reply, 1 August 2014, pp. 54–55 at para 261.

[171] Transcript at para 860.

[172] ACCI correspondence, 21 May 2014.

[173] Transcript at para 2539.

[174] The Ai Group claim notes that there are 44 modern awards that do not presently contain any provision allowing employers to implement an annual close down. It seems to us that there are 41 modern awards that do not presently contain the provision. See Attachment G for explanation of discrepancies.

[175] Transcript at paras 2139–2140.

[176] Re Metal Industry Award 1971 (1977) 191 CAR 598.

[177] [2008] AIRCFB 1000 at para 97.

[178] [2008] AIRCFB 1000 at para 97.

[179] [2009] AIRCFB 945 at para 27.

[180] Pest Control Award [AN150106] at clause 15(k).

[181] Fair Work Commission Background paper—Annual leave common issue, 30 May 2014, Attachment C at p.33.

[182] [2014] FWCFB 255. See Ai Group submission and witness statements, 20 June 2014, p. 50 at para 50.

[183] Ai Group submission 20 March 2014, p. 4 at para 2.10; Ai Group submission and witness statements, 20 June 2014, p. 20 at para 51.

[184] Ai Group submission and witness statements, 20 June 2014, pp. 24–26 at paras 71–74.

[185] Ai Group submission and witness statements, 20 June 2014, p. 20 at para 52.

[186] Ai Group submission and witness statements, 20 June 2014, p. 20 at para 53.

[187] Ai Group submission and witness statements, 20 June 2014, p. 21–23 at paras 58, 61 and 66–70.

[188] Ai Group submission and witness statements, 20 June 2014, p. 21 at para 60.

[189] See generally Ai Group submission 20 June 2014 at paragraph 76.

[190] ACCI outline of submissions, 20 June 2014 at paras 8.5–8.7.

[191] ACCI outline of submissions, 20 June 2014 at paras 8.8–8.11.

[192] ACCI outline of submissions, 20 June 2014 at paras 8.12–8.17.

[193] ACCI outline of submissions, 20 June 2014 at paras 8.18–8.20.

[194] [2008] AIRCFB 1000 at para 97.

[195] For an example of a majority clause, see Print M5600 at pp. 31–34.

[196] Ai Group correspondence, 21 May 2014, p. 11 at Schedule 6.

[197]Ai Group further submission, 19 September 2014, p. 4 at para 6; ACCI correspondence, 19 September 2014 at p. 2.

[198] The TCFUA addressed this variation in some detail and the AMWU and CFMEU did so in brief submissions.

[199] [2008] AIRCFB 717 at para 30; [2008] AIRCFB 1000 at para 95.

[200] [2008] AIRCFB 1000 at para 95.

[201] Fair Work Commission Background paper—Annual leave common issue, 30 May 2014, Attachment C. (Note the Background paper identified two additional awards as containing limited provision allowing for taking annual leave in advance of accrual - see Attachment H).

[202] Joint document filed by Ai Group, ACCI and ACTU, Legislative provisions relating to annual leave, 14 November 2014 (Attachment I); ACCI outline of submissions, 20 June 2014, p. 20 at para 9.4 refers to sections from this legislation.

[203] ACCI outline of submissions, 20 June 2014, Annexure F; Ai Group submission and witness statements, 20 June 2014, Witness statement of Mr Ben Waugh, Attachments A–G.

[204] Of the 2249 employers who answered Question 16, 951 (42 per cent) said that they agreed to such requests on 51 per cent or more occasions.

[205] Ai Group submission and witness statements, 20 June 2014, p. 28 at para 81.

[206] Ai Group submission and witness statements, 20 June 2014, p. 28 at para 82.

[207] ACCI outline of submissions, 20 June 2014, p.20 at paras 9.5, 9.9 and 9.10.

[208] Transcript at paragraphs 2176-2177.

[209] Ai Group submission and witness statements, 20 June 2014, p. 28 at paras 81–84; ACCI outline of submissions, 20 June 2014, p. 21–22 at paras 9.12–9.19.

[210] ACTU reply submissions, 1 August 2014, p. 46 at para 216.

[211] TCFUA submission, 4 August 2014, p. 21 at para 7.10.

[212] ACTU reply submission, 1 August 2014, p. 49 at para 231.

[213] The Commission’s background paper of 30 May 2014 noted this as 76.

[214] Transcript at paras 2185–2186.

[215] ACTU correspondence, 21 May 2014; ACTU submission, 20 June 2014.

[216] A point acknowledged by the ACTU, Transcript at paragraphs 86 and 281-282.

[217] [2015] FCA 136.

[218] [2015] FCA 136 at [31]-[38].

[219] ‘Towards more productive and equitable workplaces: An evaluation of the Fair Work legislation’ (2012) at pp. 99–100

[220] Commonwealth, Parliamentary Debates, House of Representatives, Fair Work Amendment Bill 2014—Second Reading Speech (the Hon. Christopher Pyne), 27 February 2014, p. 1086.

[221] Ai Group correspondence, 21 May 2014; ACCI correspondence, 21 May 2014.

[222] ACTU reply submission, 1 August 2014, pp. 69–70 at para 345.

[223] See for example s.3(6)(b) of the Annual Holidays Act 1944 (NSW); s.8 of the Annual Leave Act 1973 (ACT); s.9 of the Annual Leave Act (NT); s.13 of the Industrial Relations Act 1999 (Qld); s.235 of the Workplace Relations Act 1996 (Cth); clause 7.1.3 of the Metal, Engineering and Associated Industries Award 1998; clause 37.12 of the Timber and Allied Industries Award 1999; clause 7.1.2(a) of the Graphic Arts—General—Award 2000; clause 27(k)(i) of the Vehicle Industry—Repair, Services and Retail—Award 2002.

[224] Ai Group submission and witness statements, 20 June 2014, Witness statement of Mr Ben Waugh at Attachment A.

[225] Question 20 asked: ‘Are you charged extra fees for processing payroll outside the usual pay period?’ 563 employees answered ‘yes’, 1940 answered ‘no’ and 662 were ‘unsure’; Ai Group submission, 20 June 2014, Witness statement of Mr Ben Waugh, Attachment E.

[226] ACCI outline of submissions, 20 June 2014 at Exhibit F.

[227] ACTU reply submission, 1 August 2014, p. 69 at para 345.

[228] Transcript at paras 1898–1922.

[229] [2014] FWCFB 3202 at para 43.

[230] [2014] FWCFB 3202 at para 44.

[231] Ai Group submission, 20 March 2014.

[232] Ai Group correspondence, 21 May 2014.

[233] Skinner N and Pocock B (2013), ‘Paid annual leave in Australia: Who gets it, who takes it and implications for work-life interference’, Journal of Industrial Relations 55(5), pp.681–698 and p. 685.

[234] See Denniss R (2003) Annual Leave in Australia: An Analysis of Entitlements Usage and Preferences. The Australia Institute Discussion Paper No. 56 Canberra: The Australia Institute.

[235] Denniss R (2003) Annual Leave in Australia: An Analysis of Entitlements Usage and Preferences. The Australia Institute Discussion Paper No. 56 Canberra: The Australia Institute.

[236] Skinner, N and Pocock, B (2013) Paid Annual Leave in Australia: Who gets it, who takes it and implications for work-life balance, Journal of Industrial Relations, 21 August 2013, Vol. 55 at pp. 690–691.

[237] PR082005.

[238] PR082005 at para 218.

[239] PR082005 at para 400.

[240] [2014] FWC 2279.

[1] Ai Group correspondence, 21 May 2014; ACCI correspondence, 21 May 2014; Ai Group correspondence, 15 October 2014.

[2] Ai Group correspondence, 21 May 2014; ACCI correspondence, 21 May 2014; Ai Group correspondence, 15 October 2014.

[3] Ai Group correspondence, 21 May 2014; ACCI correspondence, 21 May 2014; Ai Group correspondence, 15 October 2014.

[4] ACCI submission, 21 May 2014 at Schedule 5; Ai Group correspondence, 21 May 2014.

[5] Ai Group correspondence, 21 May 2014; ACCI correspondence, 21 May 2014.