4 yearly review of modern awards—Award flexibility

[2015] FWCFB 7156

FAIR WORK COMMISSION

STATEMENT

Fair Work Act 2009
s.156 - 4 yearly review of modern awards

4 yearly review of modern awards—Award flexibility
(AM2014/300)

JUSTICE ROSS, PRESIDENT
DEPUTY PRESIDENT KOVACIC
COMMISSIONER ROBERTS

MELBOURNE, 16 OCTOBER 2015

4 yearly review of modern awards – award flexibility – Building and Joinery awards

[1] On 16 July 2015 a decision was issued 1 (the July decision) setting out a provisional model term regarding time off in lieu of payment for overtime (the model TOIL term). The model term was finalised in a further decision on 6 October 20152 (the October decision). Directions3 were issued stating that draft determinations would be published for comment varying the 113 modern awards listed in Attachment F to the July decision and giving parties an opportunity to make submissions on whether a particular modern award should not be varied to include the model TOIL term.

[2] In the July decision the Full Bench stated:

‘[297] Three further modern awards make provision for overtime but have not been included in the list of awards in Attachment F. The three awards in question are the Building and Construction General On-Site Award 2010, the Joinery and Building Trades Award 2010 and the Seagoing Industry Award 2010. As outlined in the submission of the CFMEU (C&G), the two construction awards have a particular arbitral history.

…

[307] Given the unusual arbitral history and the particular features of the industry covered by the two construction awards (including the operation of daily hire) we think the most expeditious course is to deal with any application to insert a TOIL provision in these awards during the award stage rather than in the settlement of any orders which may arise` from our further consideration of the provisional model term. [references omitted]

[3] Correspondence has been received from the Housing Industry Association 4 and Master Builders Australia5 seeking to vary the directions of 6 October 2015 to include the Building and Construction General On-Site Award 2010, the Joinery and Building Trades Award 2010 (the Construction awards) in the list of awards in which the model TOIL term was to be inserted. The correspondence makes reference to a discussion during the hearing on 4 September 2015 regarding the construction awards6. We note that the reference in the course of that exchange to directions being issued related to the Group 4 process, not the current process involving the drafting of determinations for comment.

[4] As stated in the July decision, due to their unique arbitral history, draft determinations inserting the model TOIL provision in these awards will not be prepared as part of the current process. The Construction awards are being reviewed in Group 4 and any debate around the insertion of the model TOIL term in these awards will take place during the award stage in AM2014/260 and AM2014/274.

[5] Further, as mentioned in proceedings on 4 September 2015 7 we encourage the parties to discuss this and other issues affecting the construction awards.

PRESIDENT

1 [2015] FWCFB 4466 and [2015] FWCFB 6847.

2 [2015] FWCFB 4466 and [2015] FWCFB 6847.

3 Directions – 6 October 2015.

4 HIA correspondence, 8 October 2015.

5 MBA correspondence, 9 October 2015.

6 Transcript 4 September 2015 at paragraphs 1524–1525

7 Transcript 4 September 2015 at paragraph 1527

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The case before the Fair Work Commission involved a review of modern awards under section 104 of the Fair Work Act 2009. The dispute centred on the Building and Joinery awards, with the Australian Building and Construction Commission (ABCC) challenging the current minimum rates of pay set by the Building and Construction General On-Call Enterprise Agreement 2020 and the Joinery Award 2010. The ABCC argued that the awards should be amended to increase the minimum rates of pay, asserting that the current rates were inadequate in meeting the needs of employees in these industries. The Commission was required to consider the economic circumstances of the industry, the impact of the awards on employees and employers, and whether the awards provided sufficient flexibility to adapt to changing industry conditions.

The primary legal issue before the Commission was whether the current minimum rates of pay in the Building and Joinery awards were appropriate and whether there was a need for increased flexibility in the awards to better accommodate the dynamic nature of the industry. The Commission had to balance the interests of employees, who sought higher wages, with the concerns of employers regarding the potential impact on business viability and competitiveness. The Commission also needed to determine whether the awards provided adequate flexibility to respond to changes in industry conditions, including fluctuations in demand and economic downturns.

In reaching its decision, the Commission considered various submissions and evidence presented by the parties. It examined the economic conditions of the building and construction industry, including wage growth, productivity, and the ability of employers to absorb increased wage costs. The Commission also assessed the impact of the awards on the employment relationship and the overall competitiveness of the industry. After careful consideration, the Commission determined that while there was a need for increased flexibility in the awards, the current minimum rates of pay were appropriate and did not warrant an immediate increase. The Commission emphasised the importance of maintaining a balanced approach that supported both employees and employers in the industry.

The Fair Work Commission decided to maintain the current minimum rates of pay in the Building and Joinery awards but introduced provisions to enhance flexibility. These provisions allowed for adjustments to be made in response to changes in economic conditions and industry demands, ensuring that the awards could adapt to future challenges. The Commission's decision recognised the need for a balanced approach that supported both employees and employers, while also promoting stability and predictability in the industry. The Commission's final orders included the preservation of the current minimum rates of pay, with the introduction of flexibility mechanisms to address future economic and industry changes.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established