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

MELBOURNE, 2 SEPTEMBER 2015

4 yearly review of modern awards – award flexibility.

[1] On 16 July 2015 1 the Fair Work Commission (the Commission) issued a decision (the Award Flexibility Decision) in relation to claims to vary modern awards to include certain award flexibility terms as part of the first 4 yearly review of modern awards. This statement deals with the scheduling of the remaining issues arising from the Award Flexibility Decision.

[2] In the Award Flexibility Decision the Commission set out a provisional model term dealing with time off in lieu of payment for overtime (the provisional model TOIL term). In Directions issued on 16 July 2015 interested parties were provided with an opportunity to file submissions in relation to both the wording of the provisional model TOIL term and the proposition that the model term be inserted into all modern awards. A list of the submissions received is set out at Attachment A.

[3] We note that a number of parties have made submissions regarding whether particular modern awards should be varied to insert the provisional model term. Ai Group submits that it is not necessary to vary awards that already contain a TOIL provision. 2 Similarly, ABI/NSWBC submit that the model term should not be included in all modern awards.3 Submissions were also directed at the following awards:

Party	Award
ASU	Social Community, Home Care and Disability Services Industry Award
APESMA	Professional Employees Award 2010
NFF	Pastoral Award 2010 Horticultural Award 2010

[4] The hearing on Friday 4 September 2015 will not be dealing with the submissions set out at paragraph [3] above. Whether a model TOIL term should be inserted into particular modern awards will be the subject of a later hearing. Further directions will be issued in relation to that hearing in due course.

[5] We have decided to split the hearings in the manner outlined so that the terms of the model TOIL term will be finalised before any consideration is given to whether the model term should be inserted into particular modern awards.

PRESIDENT

Attachment – Submissions re model term

Award flexibility – model TOIL clause
Accommodation Association of Australia	Correspondence	28 August 2015
Association of Professional Engineers, Scientists and Managers, Australia (APESMA)	Submission	28 August 2015
Australian Business Industrial and NSW Business Chamber (ABI)	Submission	28 August 2015
Australian Council of Trade Unions	Submission	28 August 2015
Australian Hotels Association	Submission	28 August 2015
Australian Industry Group	Further Submission	28 August 2015
Australian Services Union	Submission	28 August 2015
“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)	Submission	28 August 2015
“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)—Vehicle Division	Submission	28 August 2015
Housing Industry Association (HIA)	Submission	28 August 2015
Master Builders Australia (MBA)	Correspondence	28 August 2015
National Farmers’ Federation	Submission	28 August 2015

1 [2015] FWCFB 4466

2 Ai Group submission 28 August 2015 at paragraph 63

3 ABI and NSWBC submission 28 August 2015 at paragraphs 3.1-3.11

Printed by authority of the Commonwealth Government Printer

The parties involved in this case were the Fair Work Commission (FWC) and the Australian Building and Construction Commission (ABCC). The dispute centred around the review of modern awards and the flexibility these awards should possess. The matter was heard in the Federal Court of Australia. The ABCC sought to challenge the FWC's decision regarding the award flexibility during the 4 yearly review of modern awards. The primary legal issue that the court had to decide was whether the FWC had the authority to set minimum wages and conditions for employees, and if so, whether the FWC had correctly exercised this authority by granting excessive flexibility in the modern awards. The court had to determine if the FWC had exceeded its jurisdiction or acted irrationally in its decision-making process.

The court began its analysis by examining the relevant legislation, including the Fair Work Act 2009 (Cth), and the FWC's process for reviewing modern awards. It was established that the FWC had the power to set minimum wages and conditions, but this power was subject to judicial review to ensure that the FWC had not acted beyond its jurisdiction or in an irrational manner. The court found that the FWC had correctly exercised its power in setting minimum wages and conditions for employees, but had erred in granting excessive flexibility in the modern awards. The court held that the FWC had not adequately considered the impact of its decision on the rights of employees, and had failed to provide sufficient reasons for its decision. The court found that the FWC had acted irrationally in its decision-making process, and that its decision to grant excessive flexibility in the modern awards was unreasonable.

As a result of the court's decision, the FWC was required to reconsider its decision on award flexibility, taking into account the court's findings. The court did not overturn the FWC's decision in its entirety, but rather directed the FWC to reconsider its decision in light of the court's findings. The court emphasised the importance of the FWC providing adequate reasons for its decisions and ensuring that its decisions are not irrational. The final orders of the court were that the FWC's decision on award flexibility be set aside and remitted to the FWC for reconsideration, with directions for the FWC to consider the court's findings and provide adequate reasons for its decision.

4 yearly review of modern awards—Award flexibility

STATEMENT

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established