4 yearly review of modern awards – General Retail Industry Award 2010 - [2018] FWCFB 5897

[2018] FWCFB 5897 [Note: a correction has been issued to this document; the changes arising have been incorporated in this version at [275] and [284]]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.156 - 4 yearly review of modern awards

4 yearly review of modern awards – General Retail Industry Award 2010

(AM2017/43)

General retail industry
Justice ross, president VICE PRESIDENT HATCHER Commissioner Lee	MELBOURNE, 27 SEPTEMBER 2018

4 yearly review of modern awards – General Retail Industry Award 2010 – award specific penalty rates claims.

Chapters		Paragraph
Introduction	[1]
The Review	[5]
3.	General Retail Industry 3.1 The data 3.2 Features of the Retail Sector 3.3 General Retail Industry Employees	[23] [27] [33]
4.	Other Contextual Matters 4.1 The Productivity Commission Report 4.2 The Penalty Rates Decision	[58] [71]
5.	The Evidence 5.1 The Retail Employers’ evidence 5.2 The SDA’s evidence	[85] [157]
6.	The Claims 6.1 Sunday shiftworker penalty rate 6.2 SDA Claim	[189] [223]
7.	Transitional Arrangements	[264]
ATTACHMENTS Attachment 1—Witness Statements and exhibits Attachment 2—Penalty Rates in pre-reform instruments Attachment 3— Index of material

ABBREVIATIONS

ABI	Australian Business Industrial and the New South Wales Business Chamber
ABS	Australian Bureau of Statistics
Anglo American	CFMEU v Anglo American Metallurgical Coal Pty Ltd
ANZSIC	Australian and New Zealand Standard Industrial Classification
ARA	Australian Retailers Association
ARS	Award Reliance Survey
AWRS	Australian Workplace Relations Study
Borland Report	Report by Professor Jeff Borland
Casuals Case	4 yearly review of modern awards – Casual employment and part-time employment decision
Census	Census of Population and Housing
CoE	Characteristics of Employment Survey
Commission	Fair Work Commission
CXI Research Group	Customer Experience and Insight Research Group
EEH	Survey of Employee Earnings and Hours
Fast Food Award	Fast Food Industry Award 2010
Act	Fair Work Act 2009 (Cth)
HERRC industries	Hospitality, entertainment, retail, restaurant and cafés
HILDA	Household, Income and Labour Dynamics in Australia
Hospitality Award	Hospitality Industry (General) Award 2010
IGA	Independent Grocers of Australia
Junior Rates Case	Modern Awards Review 2012 – Junior Rates Decision
MGA	Master Grocers Australia Limited
NES	National Employment Standards
NPS	Net Promoter Score
PC	Productivity Commission
PC Final Report	Productivity Commission Inquiry Report: Workplace Relations Framework
Penalty Rates Decision	4 yearly review of modern awards – Penalty Rates – hospitality and retail industries decision
Penalty Rates Review	Shop, Distributive and Allied Employees Association v The Australian Industry Group
Pharmacy Award	Pharmacy Industry Award 2010
Retail Award	General Retail Industry Award 2010
Retail Employers	Australian Retailers Association and Master Grocers Association
Retail sector	Division G—Retail trade (from the Australian and New Zealand Standard Industrial Classification 2006)
Review	4 yearly review of modern awards
Sands Report	Retail Industry Store-Based Employee Experience and Perceptions of Working on Weekday Evenings and Saturdays
Sands Survey	Survey by Survey Sample International for Dr Sean Sands
SDA	Shop, Distributive and Allied Employees Association
Transitional Arrangements Decision	4 yearly review of modern awards – penalty rates – hospitality and retail sectors – transitional arrangements decision
YO	Years old

Introduction

Section 156 of the Fair Work Act 2009 (Cth) (the Act) requires the Fair Work Commission (the Commission) to conduct a 4 yearly review of modern awards as soon as practicable after 1 January 2014 (the Review). Subsection 156(2) deals with what must be done in the Review and provides that the Commission must review all modern awards and may, among other things, make determinations varying modern awards.

The decision deals with two claims to vary the General Retail Industry Award 2010 (the Retail Award) as part of the Review. The Australian Retailers Association and Master Grocers Australia (the Retail Employers) seek to vary clause 30.3(c) to reduce the rates payable for shiftwork performed on Sundays. If granted the variation would reduce the Sunday shiftwork rate from 200 per cent to 175 per cent for full time and part-time employees and from 225 per cent to 200 per cent for casual employees.

The Shop, Distributive and Allied Employees Association (SDA) seeks to vary the penalty rates for casuals on Saturday and for evening work on Monday to Friday. In short, the SDA seeks a penalty payment of an additional 25 per cent for ordinary hours worked by casual employees after 6pm Monday to Friday, and for all ordinary hours worked on a Saturday.

It is necessary to first say something about the Commission’s task in the Review before turning to describe the Retail industry and some other important contextual matters.

The Review

Section 156 deals with the conduct of the Review and s.156(2) provides that the Commission must review all modern awards and may, among other things, make determinations varying modern awards. In this context ‘review’ has its ordinary and natural meaning of ‘survey, inspect, re-examine or look back upon’.[1] The discretion in s.156(2)(b)(i) to make determinations varying modern awards in a Review, is expressed in general, unqualified, terms.

If a power to decide is conferred by a statute and the context (including the subject matter to be decided) provides no positive indication of the considerations by reference to which a decision is to be made, a general discretion confined only by the subject matter, scope and purposes of the legislation will ordinarily be implied.[2] However, a number of provisions of the Act which are relevant to the Review operate to constrain the breadth of the discretion in s.156(2)(b)(i). In particular, the Review function is in Part 2-3 of the Act and hence involves the performance or exercise of the Commission’s ‘modern award powers’ (see s.134(2)(a)). It follows that the ‘modern awards objective’ in s.134 applies to the Review.

A range of other provisions of the Act and s.138 (achieving the modern awards objective) are also relevant to the Review: s.3 (object of the Act); s.55 (interaction with the National Employment Standards (NES)); Part 2-2 (the NES); s.135 (special provisions relating to modern award minimum wages); Division 3 (terms of modern awards) and Division 6 (general provisions relating to modern award powers) of Part 2-3; s.284 (the minimum wages objective); s.577 (performance of functions etc. by the Commission); s.578 (matters the Commission must take into account in performing functions etc.), and Division 3 of Part 5-1 (conduct of matters before the Commission).

The modern awards objective is set out in s.134 of the FW Act. It states:

‘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).’

The modern awards objective is to ‘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 the particular considerations identified in ss.134(1)(a)–(h) (the s.134 considerations).

The modern awards objective is very broadly expressed.[3] It is a composite expression which requires that modern awards, together with the NES, provide ‘a fair and relevant minimum safety net of terms and conditions’, taking into account the matters in ss.134(1)(a)–(h).[4] Fairness in this context is to be assessed from the perspective of the employees and employers covered by the modern award in question.[5]

The obligation to take into account the s.134 considerations means that each of these matters, insofar as they are relevant, must be treated as a matter of significance in the decision-making process.[6] No particular primacy is attached to any of the s.134 considerations[7] and not all of the matters identified will necessarily be relevant in the context of a particular proposal to vary a modern award.

In giving effect to the modern awards objective the Commission is performing an evaluative function taking into account the matters in s.134(1)(a)–(h) and assessing the qualities of the safety net by reference to the statutory criteria of fairness and relevance. It is not necessary to make a finding that the award fails to satisfy one or more of the s.134 considerations as a prerequisite to the variation of a modern award.[8] Generally speaking, the s.134 considerations do not set a particular standard against which a modern award can be evaluated; many of them may be characterised as broad social objectives.[9]

Nor is it necessary for the Commission to conclude that the award, or a term of it as it currently stands, does not meet the modern awards objective. Rather, it is necessary for the Commission to review a particular modern award and, by reference to the s.134 considerations and any other consideration consistent with the purpose of the objective, come to an evaluative judgment about the objective and what terms should be included, only to the extent necessary to achieve the objective of a fair and relevant minimum safety net.’[10]

In the 4 Yearly Review of Modern Awards – Penalty Rates (Hospitality and Retail Sectors decision (the Penalty Rates Decision)[11] the Commission made a number of observations about the s.134 considerations, which are apposite to the matters before us:

· s.134(1)(a): a threshold of two thirds of median (adult) ordinary time earnings provides a suitable benchmark for determining who is ‘low paid’. There is, however, no single accepted measure of two-thirds of median (adult) ordinary time earnings. The two main ABS surveys of the distribution of earnings are the Characteristics of Employment Survey[12] (the CoE) and the Survey of Employee Earnings and Hours[13] (the EEH).[14]

· The most recent data for the ‘low paid’ threshold is set out below:

CoE (August 2017) [15]	$845.33
EEH (May 2016)[16]	$917.33

· The assessment of relative living standards focuses on the comparison between award-reliant workers and other employed workers, especially non-managerial workers.[17]

· Award reliance is a measure of the proportion of employees whose pay rate is set according to the relevant award rate specified for the classification of the employee and not above that rate.[18] Relevantly for present purposes, the most recent data shows that 34.5 per cent of the retail trade industry employees are award reliant, which is as among the most award-reliant industries.[19]

· s.134(1)(b): It is likely that employee and employer decision-making about whether or not to bargain is influenced by a complex mix of factors, not just the level of penalty rates in the relevant modern award.

· s.134(1)(c): obtaining employment is the focus of s.134(1)(c). The broader notion of promoting social inclusion (in s.134(b) is also relevant in considering the level of penalty rates in a modern award as they may impact upon an employee’s remuneration and hence their capacity to engage in community life and the extent of their social participation. The likely impact of any exercise of modern award powers on ‘employment growth’ is one of the other matters we are required to take into account (s.134(1)(h)). These considerations (ss.134(1)(c) and (h)) require us to assess the likely impact of any proposed change to penalty rates on employment growth, in terms of jobs and hours worked.[20]

· s.134(1)(da): speaks of the need to provide additional remuneration to employees working in the circumstances identified in paragraphs 134(1)(da)(i)–(iv). This requires a consideration of a range of matters, including:

(i) the impact of working at such times or on such days on the employees concerned (i.e. the extent of the disutility);[21]

(ii) the terms of the relevant modern award, in particular whether it already compensates employees for working at such times or on such days (e.g. through ‘loaded’ minimum rates or the payment of an industry allowance which is intended to compensate employees for the requirement to work at such times or on such days); and

(iii) the extent to which working at such times or on such days is a feature of the industry regulated by the particular modern award.[22]

· Ultimately, however, the issue is whether an award which prescribes a particular penalty rate provides ‘a fair and relevant minimum safety net.’ A central consideration in this regard is whether a particular penalty rate provides employees with ‘fair and relevant’ compensation for the disutility associated with working at the particular time(s) to which the penalty attaches.[23]

· Five further points may be made about s.134(1)(da):

(i) ‘additional remuneration’ means remuneration in addition to what employees would receive for working what are characterised as ‘normal hours’, ie reasonably predictable hours worked Monday to Friday within the spread of hours prescribed in the relevant modern award.[24]

(ii) s.134(1)(da) is a relevant consideration not a statutory directive that additional remuneration be provided for working in the identified circumstances.[25]

(iii) s.134(da) does not prescribe or mandate a fixed relationship between the remuneration of those employees who, for example, work on weekends or public holidays, and those who do not. The additional remuneration paid to the employees whose working arrangements fall within the scope of the descriptors in s.134(1)(da)(i)–(v) will depend on, among other things, the circumstances and context pertaining to work under the particular modern award.[26]

(iv) s.134(1)(da) identifies a number of circumstances in which we are required to take into account the need to provide additional remuneration (i.e. those in paragraphs 134(1)(da)(i) to (iv)). Working ‘unsocial … hours’ is one such circumstance (s.134(1)(da)(i)) and working ‘on weekends or public holidays’ (s.134(1)(da)(iii)) is another. The inclusion of these two, separate, circumstances means that it is not necessary to establish that the hours worked on weekends or public holidays are ‘unsocial … hours’. Rather, we are required to take into account the need to provide additional remuneration for working on weekends or public holidays, irrespective of whether working at such times can be characterised as working ‘unsocial … hours’.[27]

(v) s.134(1)(da)(ii) the use of the disjunctive ‘or’ makes it clear that the provision is dealing with separate circumstances: ‘unsocial, irregular or unpredictable hours’. Section 134(1)(da)(ii) requires that we take into account the need to provide additional remuneration for employees working in each of these circumstances. The expression ‘unsocial … hours’ includes working late at night and or early in the morning, given the extent of employee disutility associated with working at these times. ‘Irregular or unpredictable hours’ is apt to describe casual employment.[28]

· s.134(1)(f): is expressed in very broad terms, it requires us to take into account the likely impact of any exercise in modern award powers ‘on business including’ (but not confined to) the specific matters mentioned, i.e. ‘productivity, employment costs and regulatory burden’. It is axiomatic that the exercise of modern award powers to vary a modern award to reduce penalty rates is likely to have a positive impact on business, by reducing employment costs for those businesses that require employees to work at times, or on days, which are subject to a penalty rate. Similarly, an increase in penalty rates will have a negative impact on businesses, by increasing employment costs for businesses that require employees to work at times which are subject to the increased penalty rate. The impact of a reduction or increase in penalty rates upon productivity is less clear.[29]

· s.134(1)(h): the requirement to take into account the likely impact of any exercise of modern award powers on ‘the sustainability, performance and competitiveness of the national economy’ (emphasis added) focuses on the aggregate (as opposed to sectoral) impact of an exercise of modern award powers.[30]

The matters which may be taken into account in determining whether a modern award constitutes a fair and relevant minimum safety net of terms and conditions are not confined to the s.134 considerations. As the Full Court observed in Shop, Distributive and Allied Employees Association v The Australian Industry Group[31] (Penalty Rates Review):

‘What must be recognised, however, is that the duty of ensuring that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions itself involves an evaluative exercise. While the considerations in s 134(a)-(h) inform the evaluation of what might constitute a “fair and relevant minimum safety net of terms and conditions”, they do not necessarily exhaust the matters which the FWC might properly consider to be relevant to that standard, of a fair and relevant minimum safety net of terms and conditions, in the particular circumstances of a review. The range of such matters “must be determined by implication from the subject matter, scope and purpose of the Fair Work Act (Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 39-40).’[32]

Section 138 of the Act emphasises the importance of the modern awards objective:

‘138 Achieving the modern awards objective

A modern award may include terms that it is permitted to include, and must include terms that it is required to include, only to the extent necessary to achieve the modern awards objective and (to the extent applicable) the minimum wages objective.’

As noted by the Full Federal Court in CFMEU v Anglo American Metallurgical Coal Pty Ltd (‘Anglo American’):

‘The words “only to the extent necessary” in s.138 emphasise the fact that it is the minimum safety net and minimum wages objective to which the modern awards are directed. Other terms and conditions beyond the minimum are to be the product of enterprise bargaining, and enterprise agreements under Pt 2-4.’[33]

What is ‘necessary’ to achieve the modern awards objective in a particular case is a value judgment, taking into account the s.134 considerations to the extent that they are relevant having regard to the context, including the circumstances pertaining to the particular modern award, the terms of any proposed variation and the submissions and evidence.[34] A distinction is to be drawn between that which is ‘necessary’ and that which is merely desirable, as Tracey J observed in Shop, Distributive and Allied Employees Association v National Retail Association (No.2):[35]

‘In reaching my conclusion on this ground I have not overlooked the SDA’s subsidiary contention that a distinction must be drawn between that which is necessary and that which is desirable. That which is necessary must be done. That which is desirable does not earn the same imperative for action. Whilst this distinction may be accepted it must also be acknowledged that reasonable minds may differ as to whether particular action is necessary or merely desirable.’[36]

In the Penalty Rates Case[37] the Full Bench summarised the general propositions applying to the Commission’s task in the Review, as follows:

‘1. The Commission’s task in the Review is to determine whether a particular modern award achieves the modern awards objective. If a modern award is not achieving the modern awards objective then it is to be varied such that it only includes terms that are ‘necessary to achieve the modern awards objective’ (s.138). In such circumstances regard may be had to the terms of any proposed variation, but the focal point of the Commission’s consideration is upon the terms of the modern award, as varied.

2. Variations to modern awards must be justified on their merits. The extent of the merit argument required will depend on the circumstances. Some proposed changes are obvious as a matter of industrial merit and in such circumstances it is unnecessary to advance probative evidence in support of the proposed variation. Significant changes where merit is reasonably contestable should be supported by an analysis of the relevant legislative provisions and, where feasible, probative evidence.

3. In conducting the Review it is appropriate that the Commission take into account previous decisions relevant to any contested issue. For example, the Commission will proceed on the basis that prima facie the modern award being reviewed achieved the modern awards objective at the time it was made. The particular context in which those decisions were made will also need to be considered.

4. The particular context may be a cogent reason for not following a previous Full Bench decision, for example:

· the legislative context which pertained at that time may be materially different from the Fair Work Act 2009 (Cth);
· the extent to which the relevant issue was contested and, in particular, the extent of the evidence and submissions put in the previous proceeding will bear on the weight to be accorded to the previous decision; or

· the extent of the previous Full Bench’s consideration of the contested issue. The absence of detailed reasons in a previous decision may be a factor in considering the weight to be accorded to the decision.’[38]

Where an interested party applies for a variation to a modern award as part of the Review, the proper approach to the assessment of that application was described by a Full Court of the Federal Court in Anglo American as follows:[39]

‘[28] The terms of s 156(2)(a) require the Commission to review all modern awards every four years. That is the task upon which the Commission was engaged. The statutory task is, in this context, not limited to focusing upon any posited variation as necessary to achieve the modern awards objective, as it is under s 157(1)(a). Rather, it is a review of the modern award as a whole. The review is at large, to ensure that the modern awards objective is being met: that the award, together with the National Employment Standards, provides a fair and relevant minimum safety net of terms and conditions. This is to be achieved by s 138 – terms may and must be included only to the extent necessary to achieve such an objective.

[29] Viewing the statutory task in this way reveals that it is not necessary for the Commission to conclude that the award, or a term of it as it currently stands, does not meet the modern award objective. Rather, it is necessary for the Commission to review the award and, by reference to the matters in s 134(1) and any other consideration consistent with the purpose of the objective, come to an evaluative judgment about the objective and what terms should be included only to the extent necessary to achieve the objective of a fair and relevant minimum safety net.’

In the same decision the Full Court also said: ‘...the task was not to address a jurisdictional fact about the need for change, but to review the award and evaluate whether the posited terms with a variation met the objective.’[40]

We will apply the above principles in this decision.

General Retail Industry

3.1 The data

The data in this section are based on the Commission’s report General retail industry profile.[41] The data presented are collected from four sources: the Australian Bureau of Statistics (ABS), the Fair Work Commission’s Australian Workplace and Relations Study (AWRS) and the Award Reliance (AR) survey and the Household Income and Labour Dynamics in Australia (HILDA) survey. The ABS data contains a number of surveys on the performance, structure and characteristics of industries. The AWRS, the AR and HILDA surveys are large-scale quantitative surveys that collectively provide information on enterprises, employees and households. Further information on the Commission’s data sources is located on its website.[42]

There are 4 levels within the Australian and New Zealand Standard Industrial Classification (ANZSIC) structure: division, subdivision, group and class. The most readily available data are at the division level (or 1-digit level) and the following data are presented at this level. In this instance, the relevant division of ANZSIC is Division G: Retail trade (for convenience we refer to this as the Retail sector). The following presents the subdivisions, groups and classes within the Retail sector:

· 39 Motor vehicle and motor vehicle parts retailing

·391 Motor vehicle retailing

· 3911 Car retailing

· 3912 Motor cycle retailing

· 3913 Trailer and other motor vehicle retailing

·392 Motor vehicle parts and tyre retailing

· 3921 Motor vehicle parts retailing

· 3922 Tyre retailing

· 40 Fuel retailing

·400 Fuel retailing

· 4000 Fuel retailing

· 41 Food retailing

·411 Supermarket and grocery stores

· 4110 Supermarket and grocery stores

·412 Specialised food retailing

· 4121 Fresh meat, fish and poultry retailing

· 4122 Fruit and vegetable retailing

· 4123 Liquor retailing

· 4129 Other specialised food retailing

· 42 Other store-based retailing

·421 Furniture, floor coverings, houseware and textile goods retailing

· 4211 Furniture retailing

· 4212 Floor covering retailing

· 4213 Houseware retailing

· 4214 Manchester and other textile goods retailing

·425 Electrical and electronic goods retailing

· 4221 Electrical, electronic and gas appliance retailing

· 4222 Computer and computer peripheral retailing

· 4229 Other electrical and electronic goods retailing

·423 Hardware, building and garden supplies retailing

· 4231 Hardware and building supplies retailing

· 4232 Garden supplies retailing

·424 Recreational goods retailing

· 4241 Sport and camping equipment retailing

· 4242 Entertainment media retailing

· 4243 Toy and game retailing

· 4244 Newspaper and book retailing

· 4245 Marine equipment retailing

· 425 Clothing, footwear and personal accessory retailing

· 4251 Clothing retailing

· 4252 Footwear retailing

· 4253 Watch and jewellery retailing

· 4259 Other personal accessory retailing

·426 Department stores

·427 Pharmaceuticals and other store-based retailing

· 4271 Pharmaceutical, cosmetic and toiletry goods retailing

· 4272 Stationery goods retailing

· 4273 Antique and used goods retailing

· 4274 Flower retailing

· 4279 Other store-based retailing n.e.c.

· 43 Non-store retailing and retail commission-based buying and/or selling

·431 Non-store retailing

·432 Retail commission-based buying and/or selling.

A paper[43] by Commission staff provides a framework for ‘mapping’ modern award coverage to the ANZSIC. Table 1 shows how the Retail Award is ‘mapped’ with the relevant industry class. The ANZSIC classes included in the profile relate to Division G: Retail trade, Division L: Rental, hiring and real estate services, Division N: Administrative and support services and Division S: Other services.

Table 1[44]
General Retail Industry Award 2010 ‘mapped’ to ANZSIC class

ANZSIC class included in profile

General Retail Industry

4110 – Supermarket and grocery stores
4121 – Fresh meat, fish and poultry retailing
4122 – Fruit and vegetable retailing
4129 – Other specialised food retailing
4211 – Furniture retailing
4213 – Houseware retailing
4214 – Manchester and other textile goods retailing
4221 – Electrical, electronic and gas appliance retailing
4222 – Computer and computer peripheral retailing
4229 – Other electrical and electronic goods retailing
4231 – Hardware and building supplies retailing
4241 – Sport and camping equipment goods retailing
4242 – Entertainment media retailing
4243 – Toy and game retailing
4244 – Newspaper and book retailing
4245 – Marine equipment retailing
4251 – Clothing retailing
4252 – Footwear retailing
4253 – Watch and jewellery retailing
4259 – Other personal accessory retailing
4260 – Department stores
4272 – Stationary good retailing
4273 – Antique and used goods retailing
4274 – Flower retailing
4279 – Other store-based retailing n.e.c
6632 – Video and other electronic media rental and hiring
6639 – Other goods and equipment rental and hiring n.e.c.
7220 – Travel agency and tour arrangement services
9421 – Domestic appliance repair and maintenance
9499 – Other repair and maintenance n.e.c.
9532 – Photographic film processing

We propose to first set out the data relating to the Retail sector and the employers who operate within it, before turning to the characteristics of employees in the Retail sector. It should be noted that the data in some of the tables presented in this section may not add up to 100, due to rounding. Throughout this section most of the data on the Retail sector is presented at the 1-digit level. Information specific to the industry class mapped to the Retail Award can only be obtained using the ABS Census of Population and Housing (Census) data. These data are used to describe the characteristics of employees in the General retail industry.

3.2 Features of the Retail Sector

(i) General economic indicators

Key indicators for the Retail sector are presented in Table 2. The data show that the industry accounted for:

· almost $400 billion of sales and 4.5 per cent of value added to the economy;

· over 10 per cent of employment, almost 9 per cent of actual hours worked per week in all jobs and over 8 per cent of wages;

· almost 6 per cent of all businesses and over 16 per cent of all award-reliant non-managerial employees;

· almost 2 per cent of investment;

· almost 20 per cent of total underemployment; and

· almost $19 billion in company gross operating profit.

Table 2[45]
Economic indicators of the Retail sector

Retail sector	Percentage of all industries
Industry value added ($m) (March 2018)^a	77 274	4.5
Sales ($m) (March 2018)^a,c	399 039	15.4
Employment (‘000s) (May 2018)^b	1 293	10.4
Actual hours worked per week in all jobs (‘000s) (May 2018)^b	36 856	8.9
Company gross operating profit ($m) (March 2018)^a,c	18 848	5.8
Wages ($m) (March 2018)^a,d	43 563	8.2
Gross fixed capital formation ($m) (June 2017)	8 147	1.9
Businesses (June 2017)^e	130 387	5.8
Award-reliant non-managerial employees (‘000s) (May 2016)^d	368	16.2
Underemployment (‘000s) (May 2018)^b	215	19.5

Note: (a) sum of four quarters; (b) average over the four quarters; (c) All industries excluding Agriculture, forestry and fishing, Education and training, Health care and social assistance and some subdivisions of Finance and insurance services; (d) all industries excluding Agriculture, forestry and fishing; (e) All industries excluding the public sector.

Industry value added and sales are seasonally adjusted and expressed in real terms from chain volume estimates. Employment is expressed in seasonally adjusted terms. Actual hours worked per week in all jobs and underemployment are expressed in original terms. Company gross operating profits and wages are seasonally adjusted from current price estimates. Gross fixed capital formation is expressed in original and real terms, from chain volume estimates.

(ii) Business size

As shown in Table 3, small businesses accounted for over half of all businesses in the Retail sector. Businesses in the Retail sector were more likely to be employing businesses relative to businesses across all industries.

Table 3[46]
Percentage of businesses by business size, June 2017

Retail sector	All industries
(%)	(%)
All businesses
Non-employing	41.9	61.2
Small	53.7	36.3
Medium	4.2	2.3
Large	0.2	0.2
100.0	100.0
Employing businesses
Small	92.4	93.5
Medium	7.2	6.0
Large	0.4	0.5
100.0	100.0

Note: Small businesses employ less than 20 persons, medium businesses employ 20 to 199 persons and large businesses employ 200 or more persons. The publication only includes actively trading businesses in the market sector and excludes entities that are in the public sector.

(iii) Industry concentration

Industry concentration measures competition within an industry, as it estimates the degree to which a small number of businesses account for a large proportion of total production within that industry.

As shown in Table 4, large businesses in the Retail sector accounted for around 47 per cent of total employment, sales and service income, industry value added and half of wages and salaries in 2016–17. These proportions were higher than for total selected industries. Medium businesses in the Retail sector accounted for lower proportions of total employment and wages and salaries, while lower proportions were reported across each measure for small and non-employing businesses in the Retail sector compared with total selected industries.

Table 4[47]
Total employment, wages and salaries, sales and service income, and industry value added by business size, 2016–17

Percentage of industry total
Employment	Wages and salaries	Sales and service income	Industry value added
(%)	(%)	(%)	(%)
Retail sector
Small and non-employing	33.8	26.4	26.8	28.9
Medium	18.9	23.5	26.6	23.7
Large	47.8	50.1	46.6	47.4
100.0	100.0	100.0	100.0
Total selected industries
Small and non-employing	43.8	28.1	33.9	34.7
Medium	24.0	27.6	24.9	22.1
Large	32.1	44.2	41.2	43.3
100.0	100.0	100.0	100.0

Note: Small and non-employing businesses employ less than 20 persons, medium businesses employ 20 to 199 persons and large businesses employ 200 or more persons. Total selected industries exclude Financial and insurance services as businesses in this industry were not in the scope of the survey. Small and non-employing businesses cannot be disaggregated.

(iv) Operating days

The Commission’s AWRS collected information on all non-farm Australian enterprises with five or more employees.[48] Table 5 presents data on operating days for enterprises in the Retail sector compared with enterprises across all industries. The data shows that the highest proportion of enterprises in the Retail sector operated 7 days per week, followed by weekdays and Saturday (Table 5). These two groups combined accounted for over three-quarters of enterprises in the Retail sector and around half of enterprises across all industries, with the remaining proportion of enterprises across all industries operating weekdays only.

Table 5[49]
Operating days, 2014

Retail sector	All industries
(%)	(%)
Operating days
Weekdays only	18.9	48.8
Weekdays and Saturday	37.1	17.5
Some weekdays and weekend	2.8	2.3
Operating 7 days	40.6	31.1
Other	np	0.4
100.0	100.0
Average number of operating days per week	6.2	5.8
Average years of operation under current ownership	18.9	18.5

Note: np = not published due to estimate having a relative standard error of greater than 50 per cent.

(v) Modern award usage

The Commission’s AR Survey collected information on modern award usage among non-public award-reliant organisations.[50] In the Retail sector, the most common modern award used by award-reliant organisations in 2013 was the General Retail Industry Award 2010, with more than six in 10 award-reliant organisations using this award. It was also the second most common modern award used by award-reliant organisations across all industries (Table 6).

Table 6[51]
Top 10 modern awards used in the Retail sector, percentage of award-reliant organisations, 2013

Retail sector	All industries
(%)	(%)
General Retail Industry Award 2010	61.5	15.1
Vehicle Manufacturing, Repair, Services and Retail Award 2010	11.6	6.6
Pharmacy Industry Award 2010	10.9	2.1
Clerks—Private Sector Award 2010	8.9	16.0
Meat Industry Award 2010	4.0	0.9
Manufacturing and Associated Industries and Occupations Award 2010	2.5	4.7
Road Transport and Distribution Award 2010	2.0	2.3
Hospitality Industry (General) Award 2010	1.0	13.3
Fast Food Industry Award 2010	0.9	1.8
Nursery Award 2010	0.8	0.4

Note: An award-reliant organisation has at least one employee that receives the exact award rate of pay.

3.3 General retail industry employees

(i) Award reliance

In the Retail sector, a higher proportion of non-managerial employees were reliant on award rates of pay compared with all industries, offset by a lower proportion of employees on individual arrangements in May 2016 (Table 7). However, the most common method of setting pay for the Retail sector was collective agreements.

Table 7[52]
Methods of setting pay, May 2016

Retail sector	All industries
(%)	(%)
Award only	34.5	24.5
Collective agreement	37.6	38.9
Individual arrangement	27.9	36.6
All methods of setting pay	100.0	100.0

(ii) Employee turnover

Information on employee turnover can be analysed using data on the duration of employment with their current employer. This can be obtained from the HILDA Survey. Chart 1 compares duration with current employer for employees in the Retail sector and employees across all industries. In 2016, employees in the Retail sector were more likely to experience a shorter duration of employment with their current employer than employees across all industries. Almost half of employees had been with their current employer for less than three years and around seven in ten employees had been with their current employer for less than six years.

Chart 1[53]
Employment duration with current employer for employees in the Retail sector, 2016

(iii) Composition of employment

Table 8 shows that the total workforce in the Retail sector comprised around 10 per cent of total employment in May 2018. More than half of the workforce in the Retail sector were female and a higher proportion were employed part-time (52.0 per cent) relative to all industries (32.3 per cent).

Table 8[54]
Composition of employed persons, May 2018

Total employment	Percentage of total employment
Male		Female		Total		Total
Full- time	Part- time	Full- time	Part- time	Male	Female	Full- time	Part- time
No. (’000s)	(%)	(%)	(%)	(%)	(%)	(%)	(%)	(%)
Retail sector	1267.9	27.7	17.3	20.3	34.6	45.0	55.0	48.0	52.0
All industries	12 574.4	42.9	10.1	24.8	22.2	53.0	47.0	67.7	32.3

Note: Data may not sum to 100 due to rounding. All data are expressed in original terms.

The Retail sector has a relatively higher proportion of youth, with people aged between 15 and 24 years more likely to be employed in the Retail sector, comprising almost one in three employed persons aged 24 years or under compared with less than one in six employed persons across all industries (Table 9).

Table 9[55]
Employed persons by age, May 2018

Age	Retail sector		All industries
(Years)	No. (‘000s)	Percentage of employment	Percentage of employment
15–19	178.1	14.0	5.5
20–24	221.1	17.4	9.9
25–34	272.5	21.5	23.7
35–44	227.1	17.9	21.6
45–54	187.3	14.8	20.5
55–59	78.3	6.2	8.7
60–64	67.7	5.3	5.9
65 and over	35.8	2.8	4.2
Total	1267.9	100.0	100.0

Note: All data are expressed in original terms.

(iv) Average hours worked

Table 10 shows that the total average hours actually worked per week in all jobs in May 2018 were lower for the Retail sector than across all industries. While this was also the case for part-time workers, total average hours actually worked per week in all jobs for full-time workers were relatively similar.

Table 10[56]
Average hours actually worked in all jobs, by industry group of main job and full/part-time status, May 2018

Industry group	Average hours actually worked in all jobs
Full-time	Part-time	Total
Retail sector	40.5	16.6	28.1
All industries	40.6	17.6	33.2

Note: Actual hours of work refers to the hours actually worked during normal periods of work (including overtime) over a specified reference week. It excludes meal breaks, paid/unpaid time ‘on call’, commuting time and time off during work hours to attend educational activities not connected to the job. The actual hours of work over a specified period may be affected if the person took personal/annual leave, went on strike, changed job, or similar reasons.

(v) Forms and conditions of employment

The ABS defines casual employees as employees without paid leave entitlements.[57]

Although over half of workers in the Retail sector were employees with paid leave entitlements in May 2018, the proportion of casual employees in the Retail sector was higher relative to all industries (Table 11).

Table 11[58]
Employed persons by employment type in main job, May 2018

Retail sector		All industries
No. (’000s)	Percentage of employment	Percentage of employment
Employee	1128.9	89.0	83.4
With paid leave entitlements	690.2	54.4	62.4
Without paid leave entitlements	438.7	34.6	21.0
Owner manager of enterprise with employees	74.1	5.8	5.7
Owner manager of enterprise without employees	63.1	5.0	10.7
Contributing family worker	1.8	0.1	0.2
Total	1267.9	100.0	100.0

Note: All data are expressed in original terms.

Almost 40 per cent of employees in the Retail sector were casual employees,[59] which is higher than the all industries average. Full-time employees in the Retail sector were more likely to be employed with paid leave entitlements while part-time employees were more likely to be casual employees (Table 12).

Table 12[60]
Employees with and without paid leave, May 2018

Full-time		Part-time		All employees
With paid leave	Without paid leave	With paid leave	Without paid leave	With paid leave	Without paid leave
(%)	(%)	(%)	(%)	(%)	(%)
Retail sector	89.7	10.3	37.6	62.4	61.1	38.9
All industries	88.5	11.5	45.6	54.4	74.9	25.1

Note: All data are expressed in original terms.

Using the May 2016 EEH, the following data presents a profile of casual employees in the Retail sector. Table 13 shows that compared with casual employees in all industries, casual employees in the Retail sector were more likely to be:

· female (67.0 per cent, compared to 57.2 per cent for all industries);

· work less than 35 hours per week (which the ABS defines as part time)[61] (96.4 per cent, compared to 87.0 per cent for all industries);

· aged between 15 and 24 years (58.0 per cent, compared to 36.4 per cent for all industries); and

· reliant on award rates of pay (60.7 per cent, compared to 45.1 per cent for all industries).

Table 13[62]
Casual employee characteristics in Retail sector, May 2016

Retail sector	All industries
(%)	(%)
Gender
Male	33.0	42.8
Female	67.0	57.2
Total	100.0	100.0
Full-time/part-time status
Full-time	3.6	13.0
Part-time	96.4	87.0
Total	100.0	100.0
Age (5 year groups)
15–19 years	34.2	17.3
20–24 years	23.8	19.1
25–29 years	8.4	11.6
30–34 years	6.5	8.8
35–39 years	4.6	7.8
40–44 years	4.9	7.3
45–49 years	6.8	7.8
50–54 years	3.3	6.7
55–59 years	2.9	6.2
60–64 years	3.4	4.7
65 years and over	1.3	2.8
Total	100.0	100.0
Method of setting pay
Award	60.7	45.1
Collective agreement	32.1	28.6
Individual arrangements	7.1	26.2
Total	100.0	100.0

(vi) Work schedule

Table 14 shows the prevalence and types of shiftwork arrangements used in enterprises in the Retail sector and across all industries using data obtained from the Commission’s AWRS. A lower proportion of enterprises in the Retail sector used shiftwork arrangements while a higher proportion used short shifts of 4 hours or less, compared with all industries. The most common shiftwork arrangements used in both enterprises in the Retail sector and across all industries were set rosters and eight-hour shifts.

Table 14[63]
Prevalence and types of shiftwork arrangements, 2014

Retail sector	All industries
(%)	(%)
Uses shiftwork arrangements	17.9	23.8
Types of shiftwork arrangements
Rotating rosters	56.2	57.1
Set rosters	86.2	77.6
Early morning shifts	45.8	62.2
Afternoon shifts	72.7	71.9
Evening and night shifts	61.7	70.8
Standard business hours	78.2	69.7
Split/broken shifts	15.5	36.1
Standby/on call	35.8	39.8
8-hour shifts	86.2	80.3
12-hour shifts	20.7	27.8
Short shifts of 4 hours or less	59.5	53.7
Other	–	3.6

Using the HILDA survey, Table 15 shows the current work schedule for employees in their main job in 2016. While the most common work schedule for employees in the Retail sector and all industries was a regular daytime schedule, this work schedule covered a higher proportion of employees across all industries. Employees in the Retail sector were more likely to work a regular evening shift than employees across all industries.

Table 15[64]
Current work schedule in main job, employees, 2016

Retail sector	All industries
(%)	(%)
A regular daytime schedule	65.9	75.7
A regular evening shift	8.3	4.7
A regular night shift	np	2.3
A rotating shift (changes from days to evenings to nights)	11.9	9.4
Split shift (two distinct periods each day)	np	1.1
On call	np	0.9
Irregular schedule	9.9	5.7
Other	np	0.3*
Total	100.0	100.0

Note: * Estimate has a relative standard error between 25 and 50 and should be used with caution. np = not published due to estimate having a relative standard error greater than 50 per cent.

(vii) Earnings

As shown in Table 16, most employees in the Retail sector received the adult rate of pay in May 2016; however, this proportion was lower than for all industries. The proportion of employees that received a junior rate of pay was over three times the proportion across all industries.

Table 16[65]
Employees by rate of pay, May 2016

Retail sector	All industries
(%)	(%)
Adult rate of pay	85.4	94.0
Junior rate of pay	13.7	4.1
Apprentice or trainee	0.9*	1.9
Disability rate	0.04*	0.1
All rates of pay	100.0	100.0

Note: * Estimate has a relative standard error between 25 and 50 per cent and should be used with caution.

Average weekly earnings in the Retail sector in May 2018 were lower than for all industries across each measure reported in Table 17. Average weekly earnings for full-time adult employees in the Retail sector were around three quarters of average weekly earnings for full-time adult employees in all industries.

Table 17[66]
Average weekly earnings, May 2018

Retail sector	All industries	Ratio of the Retail sector relative to all industries
($)	($)	(%)
Average weekly earnings, all employees	741.00	1207.40	61.4
Average weekly earnings, full-time adult employees	1179.00	1650.60	71.4
Average weekly ordinary time earnings, full-time adult employees	1161.30	1585.30	73.3
Average weekly ordinary time earnings, full-time adult male employees	1191.40	1677.10	71.0
Average weekly ordinary time earnings, full-time adult female employees	1115.90	1433.40	77.8

Note: All data are expressed in original terms.

Using the EEH for May 2016, data on earnings are available for all adult employees and full-time non-managerial employees paid at the adult rate. An analysis of these data found that around six in 10 full-time non-managerial employees paid at the adult rate in the Retail sector had earnings that were below the average earnings for these employees ($1102.70).[67]

Chart 2 shows the distribution of hourly total cash earnings for adult employees in the Retail sector in May 2016. It reveals that for the Retail sector, the distribution is relatively more concentrated toward the lower end of the wage distribution than the earnings of adult employees across all industries. Relative to all industries, the Retail sector had a higher proportion of employees earning up to $29 per hour.

Chart 2[68]
Distribution of hourly total cash earnings, adult employees, May 2016

Note: Earnings are calculated at $1 intervals up to and including the amount presented (e.g. $17 includes amounts over $16 per hour and up to and including $17 per hour) for adult employees in the federal jurisdiction. Earnings of employees who received a casual loading were discounted by 25 per cent.

(viii) Penalty payments

The Commission’s AWRS collected detailed data on employees’ wages and identified employees that received penalty rates. Around one in 10 employees received penalty rates, both in the Retail sector and across all industries (Table 18). Compared with other methods of setting pay, employees on award rates of pay were more likely to receive penalty rates, both within the Retail sector and across all industries.

Table 18[69]
Percentage of employees who receive penalty rates, by method of setting pay, 2014

Retail sector	All industries
(%)	(%)
Award	19.0	22.0
Other methods	5.5	6.2
All employees	10.6	10.6

Note: ‘Other methods’ of setting pay include enterprise agreements and individual arrangements. The sample analysed was restricted to employees that reported working for businesses that either operated 6 or 7 days in a week, operated on weekends or used shiftwork arrangements. ‘Penalty rates’ are collected in the AWRS by asking participants for the gross (before-tax) amount received for penalty payments (for work performed outside standard hours).

(ix) ‘Low paid’ employees in the Retail sector

A threshold of two-thirds of median full-time wages provides ‘a suitable and operational benchmark for identifying who is low paid’,[70] within the meaning of s.134(1)(a).

The most recent data for median earnings is for August 2017 from the ABS CoE survey. Data on median earnings are also available from the EEH for May 2016. These are compared to the minimum weekly wages in the Retail Award as determined in the Annual Wage Review 2016–17, effective 1 July 2017 (Chart 3).

The data shows that the full-time weekly wage for most classifications in the Retail Award was below the EEH measure of two-thirds of median full-time earnings except for Retail Employee Level 8 classification. Most classifications were also below the CoE measure of two-thirds of median full-time earnings except for Retail Employee Levels 6, 7 and 8.

Chart 3[71]
Comparison of minimum weekly wages in the General Retail Industry Award 2010 and two-thirds of median full-time earnings

Note: Weekly earnings from the Characteristics of Employment Survey are earnings in the main job for full-time employees. Weekly earnings from the Survey of Employee Earnings and Hours are weekly total cash earnings for full-time adult non-managerial employees.

(x) Profile of a ‘typical’ Retail industry employee

The following information presents an employee profile of the General retail industry for data from the 2016 Census of Population and Housing (Census). The General retail industry is determined based on a framework[72] developed by Commission staff. Using this framework the Retail Award is ‘mapped’ to the industry classes listed in Table 1.

The 2016 Census data show that there were around 737 000 employees in the General retail industry. Table 19 compares characteristics of employees in the General retail industry with employees in ‘all industries’.

Table 19[73]
Employee characteristics of General retail industry, 2016

General retail industry		All industries
(No.)	(%)	(No.)	(%)
Gender
Male	288 658	39.2	4 438 604	50.0
Female	448 052	60.8	4 443 125	50.0
Total	736 710	100.0	8 881 729	100.0
Full-time/part-time status
Full-time	299 173	42.5	5 543 862	65.8
Part-time	404 069	57.5	2 875 457	34.2
Total	703 242	100.0	8 419 319	100.0
Highest year of school completed
Year 12 or equivalent	464 045	63.6	5 985 652	68.1
Year 11 or equivalent	87 395	12.0	856 042	9.7
Year 10 or equivalent	139 143	19.1	1 533 302	17.4
Year 9 or equivalent	29 759	4.1	273 180	3.1
Year 8 or below	8069	1.1	112 429	1.3
Did not go to school	1401	0.2	26 356	0.3
Total	729 812	100.0	8 786 961	100.0
Student status
Full-time student	159 063	21.7	715 436	8.1
Part-time student	33 813	4.6	491 098	5.6
Not attending	539 540	73.7	7 618 177	86.3
Total	732 416	100.0	8 824 711	100.0
Age (5 year groups)
15–19 years	122 038	16.6	518 263	5.8
20–24 years	138 728	18.8	952 161	10.7
25–29 years	90 156	12.2	1 096 276	12.3
30–34 years	72 477	9.8	1 096 878	12.3
35–39 years	58 330	7.9	972 092	10.9
40–44 years	58 620	8.0	968 068	10.9
45–49 years	57 077	7.7	947 187	10.7
50–54 years	52 676	7.2	872 485	9.8
55–59 years	43 447	5.9	740 822	8.3
60–64 years	27 848	3.8	469 867	5.3
65 years and over	15 309	2.1	247 628	2.8
Total	736 706	100.0	8 881 727	100.0
Average age	34.2	39.3
Hours worked
1–15 hours	182 536	26.0	977 997	11.6
16–24 hours	115 082	16.4	911 318	10.8
25–34 hours	106 452	15.1	986 138	11.7
35–39 hours	133 827	19.0	1 881 259	22.3
40 hours	79 141	11.3	1 683 903	20.0
41–48 hours	43 669	6.2	858 120	10.2
49 hours and over	42 533	6.0	1 120 577	13.3
Total	703 240	100.0	8 419 312	100.0

Note: Part-time work is defined as employed persons who worked less than 35 hours in all jobs during the week prior to Census night. Totals may not sum to the same amount due to non-response. For full-time/part-time status and hours worked, data on employees that were currently away from work (that reported working zero hours), were not presented.

The profile of the General retail industry employees differs from the profile of employees in ‘All industries’ in five important respects:

· General retail industry employees are predominately female (60.8 per cent, compared to 50 per cent of all employees);

· over half (57.5 per cent) of General retail industry employees are employed part-time (i.e. less than 35 hours per week), compared with only 34.2 per cent of all employees;

· over one quarter (26.0 per cent) of General retail industry employees work 1–15 hours per week compared with only 11.6 per cent of all employees;

· over one third (35.4 per cent) of General retail industry employees are aged between 15 and 24 years compared with only 16.6 per cent of all employees; and

· over one quarter (26.3 per cent) of General retail industry employees are students (21.7 per cent are full-time students and 4.6 per cent study part time) compared with 13.7 per cent of all employees.

Between 2011 and 2016, employment within the General retail industry increased by around 18 000.[74] Over this period:

· the proportion of employees that were female or worked part time remained relatively stable;

· the proportion of employees aged between 15–19 years reduced (from 19.9 per cent to 16.6 per cent); and

· the proportion of employees whose highest level of education is Year 12 or equivalent increased (from 56.9 per cent to 63.6 per cent).

(xi) Retail households and financial stress

A comparison of financial stress indicators between all employee households and households that have at least one adult employee working in the Retail sector (Retail employee households) is presented for 2016 using HILDA data. Across most of the financial stress indicators, Retail employee households were more likely than all employee households to experience financial stress. This suggests that their financial resources are more limited than other households (Table 20).

Table 20[75]
Financial stress experienced by employee households, 2016

Financial stress indicators	Retail employee households	All employee households
Unable to raise $3000 in a week for something important	6.9	4.7
Could not pay electricity, gas or telephone bills on time	7.0	7.2
Could not pay the mortgage or rent on time	4.8*	3.4
Pawned or sold something	3.5*	2.3
Went without meals	2.1*	1.5
Could not afford to heat home	1.4*	1.2
Sought assistance from welfare/community organisation	1.1*	0.9
Sought financial help from friends or family	9.0	6.7
Any stress	18.4	14.4
Low stress (1–2)	13.2	11.0
Moderate stress (3–4)	4.1	2.7
High stress (5 or more incidences of financial stress)	1.0	0.7
Observations	664	4984

Note: *Relative standard error is between 25 and 50 per cent and should be interpreted with caution.

Employee households are those households whose main source of income is from wages or salary. Retail employee households are those with at least one employee employed in the Retail sector.

Both partners in a couple family household, the lone parent in a lone parent household and the lone person of a lone person household must report financial stress for that particular household to be considered as such. Observations from multi-family households, other related family households and group households are excluded.

Other contextual matters

Two other contextual matters are relevant to the determination of the claims before us:

· The Productivity Commission Report; and

· The Penalty Rates Decision.

4.1 The Productivity Commission Report

The Productivity Commission Inquiry Report: Workplace Relations Framework (the PC Final Report) was published by the Productivity Commission on 30 November 2015 following an inquiry into the ‘Workplace Relations Framework’ arising from a request made by the Commonwealth Government pursuant to Parts 2 and 3 of the Productivity Commission Act 1998 (Cth).[76] Penalty rates for long hours and night work are considered in Chapter 9 and weekend penalty rates are considered in Chapters 10, 13, 14, 15 and Appendix F of the report. Chapters 11 and 12 dealt with the shift to a 7 day consumer economy and the social effects of weekend work.

The consideration of penalty rates in the PC Final Report was limited to penalty rates that apply to the hospitality, entertainment, retail, restaurant and café industries, referred to as the HERRC industries in the report. The Productivity Commission (the PC) explains the rationale for focussing on the HERRC industries, as follows:

‘… the appropriate level for regulated penalty rates for weekend work — particularly on Sundays in a number of discretionary consumer service industries — has become a highly contested and controversial issue. The industries of greatest concern are hospitality, entertainment, retail, restaurants and cafes (HERRC). These are industries where consumer expectations of access to services has expanded over time so that the costs of penalty rates affect consumer amenity in ways they did not when penalty rates were first introduced. Such industries are also important sources of entry-level jobs for, among others, relatively unskilled casual employees and young people (particularly students) needing flexible working arrangements. The provision of discretionary, and therefore demand responsive, services on weekends is less frequent in most other industries, which is a key (but not only) rationale for a focus of concerns on the HERRC industries. It is notable that the FWC is currently also considering appropriate penalty rates in awards, and that their focus almost exactly matches the group of industries that the Productivity Commission has identified as the most relevant.’[77] (footnotes omitted)

The modern awards considered by the PC to be applicable to the HERRC industries are:

· Restaurant Industry Award 2010;

· Registered and Licensed Clubs Award 2010;

· General Retail Industry Award 2010;

· Hospitality Industry (General) Award 2010;

· Amusement, Events and Recreation Award 2010;

· Fast Food Industry Award 2010;

· Pharmacy Industry Award 2010; and

· Hair and Beauty Industry Award 2010.[78]

In relation to weekend penalty rates the central recommendation in the PC Final Report (Recommendation 15.1) was that the Commission should, as part of its current award review process:

set Sunday penalty rates that are not part of overtime or shiftwork at the higher rate of 125 per cent and the existing Saturday award rate for permanent employees in the hospitality, entertainment, retail, restaurant and café industries;
- set weekend penalty rates to achieve greater consistency between the above industries, but without the expectation of a single rate across all of them; and
investigate whether weekend penalty rates for casuals in these industries should be set so that casual penalty rates on weekends would be the sum of the casual loading and the revised penalty rates applying to permanent employees, with the principle being that there should be a clear rationale for departing from this.[79]

The last point is of particular interest in the context of the matter before us. At Attachment F3 of the PC Final Report the PC notes that there are three basic models for calculating penalty rates for casuals and concludes that the ‘default approach’ is ‘the optimal approach’.[80] Under the default method the casual loading is added to the penalty rate applying to a permanent employee. The ‘default method’ is the approach sought to be implemented by the SDA in these proceedings.

The PC’s consideration of this issue led it to conclude that there may be grounds for some casual penalty rates to rise on Saturdays:

‘The conflation of the casual loading and the premium rate for weekend work can hide the anomalous treatment of weekend rates for casuals in some awards. In principle, a wage system should not favour the employment of a person with identical competencies over another, yet this occurs in some awards for weekend work …

For neutrality of treatment, the casual loading should be added to the penalty rate of a permanent employee when calculating the premium rate of pay over the basic wage rate for weekend work. This would make an employer indifferent, at the margin, between hiring a permanent employee over a casual employee…

Achieving neutrality would require that penalty rates for casual employees would rise on Saturday’s for some awards (as in the Retail Award).’[81]

The PC went on to urge that care be taken in changing casual penalty rates:

‘However, a major proviso is that the current regulated pay levels set for casual employees are ‘rough and ready’ and may not take into account the generally lower average skills and experience of those employees. Were this to be true, achieving parity in the employer costs of employing casuals compared with permanent employees might only have the appearance of ‘equal pay for equal work’ and would disadvantage the employment of casuals. That would be unfortunate given that casual jobs are an important vehicle for gaining entry to the labour market for the disadvantaged, the young, and those needing flexible working arrangements. In that context, the wage regulator should make the presumption that casual penalty rates should fully take account of the casual loading, but should not adopt that principle without closely considering its impacts on such workers.’[82] (emphasis added)

The above statement may be broken up into two propositions:

1.The current regulated pay levels are ‘rough and ready’ and may not take into account the generally lower average skills and experience of those employees.
2.If proposition 1 is true, then achieving parity in the cost of employing casuals would disadvantage the employment of casuals. This would be unfortunate because casual jobs are an important vehicle for gaining entry to the labour market for the disadvantaged, the young and those needing flexible working arrangements.

The first proposition is plainly wrong and is not supported by any of the parties before us.[83] The classification structure in the Retail Award is competency based and requires employees to be classified according to their skill level (see clause 16.2). Further, the prescription of lower rates of pay for ‘junior’ employees takes account of the lower experience of those employees. As the Commission observed in the Junior Rates Case[84] the rates for ‘juniors’ reflected ‘the general lack of experience of young employees’.[85]

The first proposition provides the premise for the second proposition, that is, the PC’s observation that parity ‘would disadvantage the employment of casuals’. So much is clear from the use of the expression ‘were this to be true’. As the premise is false the latter observation lacks any foundation. That being said, we deal later with the proposition—put by the Retail Employers—that increasing penalty rates for casuals would result in a number of existing casual employees being worse off: ‘consequences may include loss of casual hours, loss of employment, loss of flexibility of being a casual employee’.[86]

The SDA submits that there is no evidence of a direct causal link between the availability of casual jobs and young and disadvantaged workers obtaining employment. It submits that the likely impact of the changes it proposes on casual employment will be small and will not have a major impact on the capacity for young and disadvantaged individuals to enter the labour market. This is said to be so because:

(i)The retail industry only accounts for 15.5 per cent of casual jobs, hence any small change in the share of casual jobs in the retail industry will not have a significant impact.[87]

(ii)Other paths into employment in the retail industry and in other industries exist for young and disadvantaged workers.[88]

(iii)A 2017 study by Inga Lass and Mark Wooden showed that on average, less than half of people who moved into employment from unemployment moved into casual employment.[89]

(iv)Junior rates in the Retail Award still provide an incentive for hiring young employees.[90] [91]

The SDA relies on Professor Borland’s expert evidence in support of these propositions.

This aspect of Professor Borland’s evidence was in response to the PC’s observation that ‘casual jobs are an important vehicle for gaining entry to the labour market for the disadvantaged, the young and those needing flexible working arrangements’. However, that observation was linked to the second proposition set out above—that achieving ‘neutrality would disadvantage casual employees. As we have mentioned, the PC’s second proposition is predicated upon the correctness of proposition 1—which is not supported by any of the parties before us and is plainly wrong. In these circumstances it is unnecessary for us to consider the correctness of the PC’s observation and nor is it necessary for us deal with this aspect of Professor Borland’s evidence.

4.2 The Penalty Rates Decision

The Penalty Rates Decision determined that the existing Sunday penalty rates in the Hospitality, Fast Food, Retail and Pharmacy Awards did not achieve the modern awards objective, as they do not provide a fair and relevant minimum safety net. The effect of the Penalty Rates Decision was, relevantly, to reduce Sunday penalty rates to 150 per cent for full-time and part-time employees in the Retail Award and to 175 per cent for casual employees.

There are three other matters addressed in the Penalty Rates Decision and the Transitional Arrangements decision which are relevant for present purposes.

First, section 8.2.2 of the Penalty Rates Decision sets out the background to the Retail Award. In those proceedings the SDA submitted that:

‘the Sunday rate issue was very much a live issue in the context of the Award Modernisation process … it was contested in different ways with numerous issues presented’.[92]

The Retail Employers took a contrary position and emphasised the fact that during the award modernisation:

· no witnesses were called to give evidence;

· no expert evidence was presented; and

· the Award Modernisation Full Bench did not undertake any analysis of the proceeding disabilities associated with working on weekends, or the relative disabilities as between Saturday and Sunday work, rather the focus of the AIRC was on ‘bringing together disparate State and Territory award conditions’.[93]

The Full Bench concluded:

‘[1491]As mentioned in Chapter 3, in conducting the Review it is appropriate that the Commission take into account previous decisions relevant to any contested issue and will proceed on the basis the prima facie the modern award being reviewed achieved the modern awards objective at the time it was made. The extent of a previous Full Bench’s consideration of a contested issue is relevant to assessing the weight to be attributed to that decision. It is apparent from an examination of the relevant decisions that the Award Modernisation Full Bench did not undertake a detailed or considered review of the penalty rates in the Retail Award. Rather, understandably enough in view of the time constraints on the award modernisation process, the Full Bench gave effect to the existing penalty rates in the ‘critical mass’ of pre-reform instruments.’[94]

The parties in the proceedings before us take a contrary view to the position they advanced in the Penalty Rates Case. The Retail Employers placed considerable reliance on the award history in their written submissions[95] contending that:

‘the current GRIA provisions regarding casual employee weekday evening and Saturday penalty rates were the result of careful consideration by the AIRC’.[96]

The SDA say that the award history is irrelevant.[97]

We deal with these submissions later.

Second, in the Penalty Rates Case the Retail Employers had sought to amend the Retail Award to reduce the rates payable for shiftwork performed on Sundays. The changes sought are set out below in a marked up version of clause 30.3(c):

30.3 Rate of pay for shiftwork

(c) Any shiftwork performed on a Sunday will be paid at the rate of ~~200%~~ 175% (~~225%~~ 200% for casuals) of the ordinary time rate of pay.[98]

This claim was not addressed by the Retail employers in their submissions in the Penalty Rates proceedings but was raised in the subsequent transitional arrangements proceedings. The relevant extracts from the Transitional Arrangements decision are as follows:

‘[210] The Retail Associations contend that the decision to reduce the Sunday penalty rate applies equally to shiftworkers under the Retail Award and advance the following submission in support of that contention:

‘Despite not being specifically addressed in the Penalty Rates Case decision, the Retail Associations have operated on the basis that the decision to reduce the Sunday penalty rate, applies equally to shiftworkers under the Retail Award.

The Retail Associations make this assumption on the basis of the FWC’s findings that the current Sunday penalty rate is neither fair nor relevant, and the disutility of Sunday work has reduced over time. There is nothing before the FWC to suggest that shiftworkers should be treated any differently to permanent employees under the Retail Award.

As such, these submissions of the Retail Associations are intended to apply equally to shiftworkers under the Retail Award. The Retail Associations propose that from 1 July 2017 the rate for shiftwork performed on Sundays be 175% (200% for casuals) of the ordinary time rate.’[99]

[211] In response to this submission we posed the following question on notice[100] to the SDA:

5.1 Question for the SDA:

Does the SDA oppose the submission advanced by the Retail Associations? If so, on what basis?

[212] The SDA responded to the question put that it opposed the Retail Employers submission and submitted that:

‘it is an impermissible attempt to invite the Commission to introduce a further reduction to penalty rates which is not the subject of the decision. The Commission has invited the parties to make submissions on transitional matters, not to request further cuts after the substantive case has been conducted.’[101]

[213] We note that there was no evidence in the substantive proceedings as to the number of shiftworkers covered by the Retail Award; indeed there was no evidence at all directed specifically at this aspect of the Retail Employers claim. We also note that the Retail Employers did not address this issue in their submissions or otherwise draw attention to the matter.

[214] In the circumstances the appropriate course is for the Retail Employers (or any other interested party) to file an application to vary the Retail Award in respect of the Sunday rate applicable to shiftworkers. Such an application would then be determined in conjunction with the SDA’s claim in respect of Saturday and late night rates for casuals.’[102]

The Retail Employers subsequently filed an application to vary the Retail Award (in the terms set out at [79] above) and that is the matter before us.

Third, in the Penalty Rates Decision the Full Bench noted the references in the PC Final Report to the interaction between penalty rates and casual loadings[103] and said:

‘[337]The PC Final Report argued that, in order for employers to be indifferent or neutral (at the margin) in choosing between a permanent and casual employee, the ‘default’ method should be preferred. As we observe later, the casual loading is paid to compensate casual employees for the nature of their employment and the fact that they do not receive the range of entitlements provided to full-time and part-time employees, such as annual leave, personal/carer’s leave, notice of termination and redundancy benefits.

[338]For our part we would observe that the ‘default’ approach is also consistent with one of the considerations we are required to take into account in determining whether a modern award satisfies the modern awards objective, in that it provides a casual loading that is simple and easy to understand, consistent with s.134(1)(g) of the FW Act.’[104]

In relation to the interaction between casual loadings and penalty rates in the Retail Award the Full Bench said:

‘[1704]We now turn to the application of weekend penalty rates in the Retail Award to casual employees. The Retail Award provides that casual employees are paid a casual loading of 25 per cent.

[1705]Casuals are currently paid an additional 10 per cent for work performed on a Saturday between 7.00 am and 6.00 pm, that is in addition to the 25 per cent casual loading. It is not clear whether the 10 per cent premium is compounded upon the casual rate of 125 per cent of the applicable minimum hourly rate or whether it is simply added to the 125 per cent such that casuals are paid 135 per cent of the applicable hourly rate. But for present purposes, and for the sake of convenience, we will refer to the Saturday rate for casuals as 135 per cent, for work performed during 7.00 am and 6.00 pm.

[1706]It is also relevant to observe that clause 30.3(c) of the Retail Award provides that:

‘Any shiftwork performed on a Sunday will be paid at the rate of 200% (225% for casuals) of the ordinary time rate of pay.’

[1707]Yet, curiously, the Sunday rate for non-shift casuals is 200 per cent (inclusive of the 25 per cent casual loading), which is the same as the Sunday rate for full-time and part-time employees.

[1708]While these provisions no doubt have some history, they are plainly inconsistent and appear to lack logic and merit.

[1709]For instance, how is it that a casual employee working on a Saturday between 7.00 am and 6.00 pm is paid a premium of 135 per cent, but a casual working at, say, 6.00 am on a Saturday (or after 6.00 pm) is only paid the casual loading (i.e. 125 per cent)? Working early on a Saturday (at say 5.00 am or 6.00 am) or working late (say after 9.00 pm) may be said to attract a higher level of disutility than working between 7.00 am and 6.00 pm, yet casual employees receive less for working at these times.

[1710]The position in respect of Sunday work is even more curious. Casuals who work shiftwork on a Sunday are paid the Sunday loading (i.e. 225 per cent in total). In these proceedings the Retail Employers are seeking to reduce the premiums for shiftwork on Sunday, yet the proposal advanced retains the differential between full-time/part-time employees (at 150 per cent) and casual employees (at 175 per cent). If casual shiftworkers who work on Sunday are entitled to the Sunday loading plus their casual loading why is it that casual non-shiftworkers are treated differently?

[1711]Casual loadings and weekend penalty rates are separate and distinct forms of compensation for different disabilities. Penalty rates compensate for the disability (or disutility) associated with the time at which work is performed.

[1712]The casual loading is paid to compensate casual employees for the nature of their employment and the fact that they do not receive the range of entitlements provided to full-time and part-time employees, such as annual leave, personal carer’s leave, notice of termination and redundancy benefits.

[1713]Importantly, the casual loading is not intended to compensate employees for the disutility of working on Sundays.

Nor does the fact of the SDA’s March 2015 application warrant the immediate implementation of the increases. Even if it is accepted that employers were put on notice as to the possibility of an increase one might ask, so what? Until such a possibility becomes a reality it is highly unlikely that any proactive steps would be taken by employers to ameliorate the effect of such increases. Indeed if accepted the same argument could be applied to the reduction in Sunday penalty rates for shiftworkers as the ARA filed submissions and a draft determination in respect of that issue in February 2015.

We do think there is merit in the points raised in the SDA’s reply submission, in particular:

· a phase in period of almost 5 years is simply too long;

· the existing anomaly in respect of the Saturday penalty rates for casuals should be addressed as quickly as practicable (though we think the SDA overstates the extent of the anomaly, see [233] to [243] above); and

· contrary to the Retail Employers’ proposal, the operative date of the phased increases should not be 1 July. The timetable proposed by the Retail employers would mean that employers may face an Annual Wage Review increase and an increase in casuals’ penalty rates simultaneously. As the SDA submits ‘it seems illogical to compound the potential change in wages’.

In respect of the adjustment to the Saturday rate for casuals and the extension of the evening work Monday to Friday penalty we have decided that the transitional arrangements below are necessary to ensure that the Retail Award achieves the modern awards objective:

Saturday work – casuals

1 November 2018 A casual employee must be paid an additional 15 per cent for all work performed on a Saturday

1 October 2019 A casual employee must be paid an additional 20 per cent for all work performed on a Saturday

1 March 2020 A casual employee must be paid an additional 25 per cent for all work performed on a Saturday

Evening work: Monday to Friday

1 November 2018 An additional 5 per cent will be paid to casuals for hours worked after 6pm

1 October 2019 An additional 10 per cent will be paid to casuals for hours worked after 6pm

1 March 2020 An additional 15 per cent will be paid to casuals for hours worked after 6pm.

1 October 2020 An additional 20 per cent will be paid to casual for hours worked after 6pm

1 March 2021 An additional 25 per cent will be paid to casuals for hours worked after 6pm

Variation determinations will be published shortly.

PRESIDENT

Appearances:

W. Friend QC (with Mr Tierney) appeared for SDA

P. Wheelahan (with Mr Tindley) appeared for Australian Retailers Association and the Master Grocers Australia.

Hearing details:

2018.
Melbourne.
14 and 15 August.

Final submissions

Shop, Distributive and Allied Employees’ Association, 30 August 2018 and 6 September 2018

Australian Retail Association and Masters Grocers Australia, 30 August 2018 and 6 September 2018

ATTACHMENT 1 – Witness Statements and exhibits

Sean James Sands	Expert Report, Transcript [188]	Exhibit ARA1, ARA2, SDA6 and SDA7
Joanne Elson	Statement of Joanne Elson, 22 July 2018, Transcript [470]	Exhibit ARA3
Campbell Vears	Statement of Campbell Vears,23 July 2018, Transcript [583]	Exhibit ARA4
Terry Slaughter	Statement of Terry Slaughter, 23 July 2018, Transcript [629]	Exhibit ARA5
Jordan Freeman	Statement of Jordan Freeman, 23 July 2018, Transcript [732]	Exhibit ARA6
Anita Dorwald	Statement of Anita Dorwald, 23 July 2018, Transcript [672]	Exhibit ARA7
Professor Jeffrey Ian Borland	Expert Report, Transcript [47]	Exhibit SDA1, SDA2, SDA3, SDA4, SDA5

ATTACHMENT 2: penalty rates in pre-reform instruments (Amended 15 August 2018)^[297]

NOTE: This comparison contains late night/evening and Saturday penalty rates only.

The analysis is for a simple comparison only – readers should refer to the instruments for details of monetary allowances and exceptions.

Award			Evening rate (Monday-Friday)			Saturday rate
Casual loading	Span of ordinary hours	F/T & P/T	Casual (incl. casual loading)	Span of ordinary hours	F/T & P/T	Casual (incl. casual loading)
Modern	General Retail Industry Award 2010 [MA000004]	25%	After 6pm to 9pm or after 6pm to 11pm	125%	125%	7am to 6pm or 7am to 11pm[298]	125%	135%
Federal Federal	Shop, Distributive and Allied Employees Association - Victorian Shops Interim Award 2000 AP796250 (clauses 10.4 & 18.1)	25%[299]	After 6.00pm to 9pm (or 10pm for two week days per week for Class A Exempt shops)	125%	125% (some exceptions apply in clause 10.4)	7am to 6pm[300] (or up until 10pm for Class A Exempt shops)	36% (approx)[301]	36% (approx)[302]
	Retail, Wholesale and Distributive Employees (NT) Award 2000 AP794741 (clause 28.7)	20%	From 6.30pm to 9.30 pm One late night only in any week	125%	145%	7am to 6.30pm	Monetary allowance (clause 28.7.2)	120% + monetary allowance (clause 28.7.2)
	Retail and Wholesale Industry – Shop Employees - Australian Capital Territory - Award 2000 AP794740 (clauses 28)	15%	6.00- 9.00 pm Friday only	125%	115%[303]	7am to 6pm[304] 5am- 6pm (newsagents)	Monetary allowance (clause 28.2)	(Appropriate adult weekly rate/38) + ($41.20/7.6) x 115%[305]
NSW	Shop Employees’ State Award AN120499	15% [306] 24.53% incl annual leave	After 6pm to 9pm Thursday or Friday	125%	124.53% (General shops only)	7am to 6pm	125%	124.53% plus $7.00 or $14.40 which is approx. 131.93% to 142.29% (General shops only)
Qld	Retail Industry Award - State 2004 AN140257 (clause 6.1)	23%	After 6.00pm to 9.30pm One late night (Non-Exempt) To midnight all nights (Exempt and independent)	125%	123%	Various[307]	125%	123%
SA	Retail Industry (SA) Award AN150130 (clauses 6.3, 4.4, Sched 1 & 2)	20%	After 6.00pm to 9.30pm Either one late night or 5 nights[308]	125%[309]	120%	7am to 5.30pm	125%[310]	120%
Tas	Retail Trades Award AN170088 (clauses 12 & 21)	20%	After 6m to 9.30pm Thursday and Friday[311]	Loaded rate	120% + loaded rate	7am to 6.30pm	Loaded rate	120% + loaded rate
WA	Shop and Warehouse (Wholesale and Retail Establishments) State Award 1977, The AN160292 (clauses 7, 9, 13 & 48)	25 % for shifts under 7.6 hours, 20% for shifts more than 7.6 hours	After 6.00pm to 9pm but only one day of late night trading (general retail and special shops)[312] Special retail shops and small shops ordinary hours to 11.30 pm	$4.29	120% + $4.29 per hour loading for general retail shops 140% to 145% (20% evening loading and 20-25% casual loading) for special (pharmacy) and small shop employees	7am to 6pm (general retail shops)[313]	Overtime may apply (i.e loaded weekly rate)	140% ordinary time (approx)[314]

ATTACHMENT 3—Index of material

Commission Documents

General Retail Industry Award 2010
AIRC Decision on Priority Awards [2008] AIRCFB 1000	19 December 2008
Preliminary Jurisdictional Issues Decision – [2014] FWCFB 1788	17 March 2014
Decision – [2017] FWCFB 1001 Penalty Rates Decision	23 February 2017
Background Document – Penalty Rates – Transitional arrangements (Late night and Saturday penalty rates)	5 May 2017 (amended version uploaded to website on 15 August 2018)
Background Document – 4 yearly review of modern awards – Penalty Rates	5 May 2017
Decision – [2017] FWCFB 3001 Penalty Rates – Transitional arrangements	5 June 2017
Statement – [2017] FWCFB 3617	6 July 2017
Statement – [2017] FWC 4109	4 August 2017
Industry Profile – General Retail Industry	30 July 2018 (updated on 22 August 2018)
Legislative framework document	9 August 2018

Transcripts

Transcript of Mention	3 April 2018
Transcript of Mention	30 July 2018
Transcript of Hearing	14 August 2018
Transcript of Hearing	15 August 2018

Notices of listing

Notice of listing amended – for Mention	3 April 2018
Notice of listing amended – for Mention	30 July 2018
Notice of listing amended – for Hearing	14 August 2018 and 15 August 2018

Directions

Directions	6 April 2018
Directions	24 August 2018

Summary of submissions

Summary of submissions concerning:

· The ARA’s claim for a reduction in the rate of pay for shiftwork performed on a Sunday

o Variation to clause 30.3(c)

· The SDA’s claim regarding casual evening penalties and casual Saturday penalties

o Seeks the full casual loading for such employees at all times which incur penalty rates

26 July 2018

Australian Retails Association and Master Grocers Association

Document	Date
Submission and draft determination	13 February 2015
Closing submissions	12 February 2016
Submission	24 March 2017
Submission	21 April 2017
Submission – Application to vary – draft determination	28 July 2017
Correspondence and correspondence in reply from FWC (request for further information about Full Bench)	27 March 2018
Submission	21 May 2018
Submission and evidence in reply	23 July 2018
Submission – proposed findings	8 August 2018
Correspondence – source of data	22 August 2018
Submission – shiftworkers and proposed transitional arrangements	30 August 2018
Submission in reply – shiftworkers and proposed transitional arrangements	6 September 2018

Shop, Distributive and Allied Employees’ Association

Document	Date
Submission	2 March 2015
Draft determination	17 July 2015
Correspondence (confirming SDA had previously filed variation application)	28 March 2017
Correspondence – General Retail Award – relisting request	7 March 2018
Submission	21 May 2018
Submission – expert report	4 June 2018
Submission in reply	23 July 2018
Submission – FWC background paper 5 May 2017	6 August 2018
Submission – proposed findings	8 August 2018
Closing submission – outline	15 August 2018
Submission – shiftworkers and proposed transitional arrangements	30 August 2018
Submission in reply – shiftworkers and proposed transitional arrangements	6 September 2018

Australian Business Industrial and the NSW Business Chamber

Document	Date
Submission	13 August 2018

[1] Shop, Distributive and Allied Employees Association v The Australian Industry Group (2017) 253 FCR 368 at [38].

[2] O’Sullivan v Farrer (1989) 168 CLR 210 at [12] per Mason CJ, Brennan, Dawson and Gaudron JJ.

[3] Shop, Distributive and Allied Employees Association v National Retail Association (No 2) (2012) 205 FCR 227 at [35].

[4] [2017] FWCFB 1001 at [128]; Shop, Distributive and Allied Employees Association v The Australian Industry Group (2017) 253 FCR 368 at [41]–[44].

[5] [2018] FWCFB 3500 at [21]–[24].

[6] Edwards v Giudice (1999) 94 FCR 561 at [5]; Australian Competition and Consumer Commission v Leelee Pty Ltd [1999] FCA 1121 at [81]–[84]; National Retail Association v Fair Work Commission (2014) 225 FCR 154 at [56].

[7] Shop, Distributive and Allied Employees Association v The Australian Industry Group (2017) 253 FCR 368 at [33].

[8] National Retail Association v Fair Work Commission (2014) 225 FCR 154 at [105]–[106].

[9] See National Retail Association v Fair Work Commission (2014) 225 FCR 154 at [109]–[110]; albeit the Court was considering a different statutory context, this observation is applicable to the Commission’s task in the Review.

[10] Ibid at [28]–[29].

[11] [2017] FWCFB 1001.

[12] ABS, Characteristics of Employment, Australia, August 2017, Catalogue No. 6333.0.

[13] ABS, Employee Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0.

[14] [2017] FWCFB 1001 at [166].

[15] ABS, Characteristics of Employment, Australia, August 2017, Catalogue No. 6333.0, Table 7.1.

[16] ABS, Employee, Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0, Data Cube 8.

[17] [2016] FWCFB 3500 at [371].

[18] [2017] FWCFB 1001 at [170].

[19] [2018] FWCFB 3500 at [195].

[20] [2017] FWCFB 1001 at [179]–[181].

[21] This includes an assessment of the impact of such work on employee health and work-life balance, taking into account the preferences of the employees for working at those times.

[22] [2017] FWCFB 1001 at [45].

[23] Ibid at [202].

[24] Ibid at [192].

[25] Ibid at [195].

[26] Ibid at [199].

[27] Ibid at [202].

[28] Ibid at [200]–[201].

[29] Ibid at [218]–[219].

[30] Ibid at [229].

[31] Shop, Distributive and Allied Employees Association v The Australian Industry Group (2017) 253 FCR 368.

[32] Ibid at [48].

[33] CFMEU v Anglo American Metallurgical Coal Pty Ltd [2017] FCAFC 123 at [28]-[29]; cited with approval in Shop, Distributive and Allied Employees Association v The Australian Industry Group (2017) 253 FCR 368 at [45].

[34] See generally: Shop, Distributive and Allied Employees Association v National Retail Association (No.2) (2012) 205 FCR 227.

[35] Shop, Distributive and Allied Employees Associates v National Retail Association (No.2) (2012) 205 FCR 227.

[36] Ibid at [46]; also see [2017] FWCFB 1001 at [136].

[37] [2017] FWCFB 1001.

[38] Ibid at [269].

[39] CFMEU v Anglo American Metallurgical Coal Pty Ltd (2017) FCR 337 at [28]–[29].

[40] Ibid at [46].

[41] General retail industry profile, 22 August 2018.

[42] Fair Work Commission, Award Reliance Survey, 2013, data manual: and Fair Work Commission, Australian Workplace Relations Study, 2014:

[43] Preston M, Pung A, Leung E, Casey C, Dunn A and Richter O (2012) ‘Analysing modern award coverage using the Australian and New Zealand Industrial Classification 2006: Phase 1 report’, Research Report 2/2012 Fair Work Australia:

[44] Fair Work Commission, Modern awards and relevant ANZSIC classes: ABS, Australian National Accounts: National Income, Expenditure and Product, Mar 2018, Catalogue No. 5206; ABS, Business Indicators, Australia, Mar 2018, Catalogue No. 5676.0; ABS, Counts of Australian Businesses, including Entries and Exits, Jun 2013 to Jun 2017, Catalogue No. 8165.0; ABS, Australian System of National Accounts, 2016–17, Catalogue No. 5204.0; ABS, Employee Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0; ABS, Labour Force, Australia, Detailed, Quarterly, May 2018, Catalogue No. 6291.0.55.003.

[46] ABS, Counts of Australian Businesses, including Entries and Exits, Jun 2013 to Jun 2017, Catalogue No. 8165.0.

[47] ABS, Australian Industry, 2016–17, Catalogue No. 8155.0.

[48] Yuen K, Rozenbes D and Farmakis-Gamboni S (2015), Award reliance and business size: a data profile using the Australian Workplace Relations Study, Research Report 1/2015, Fair Work Commission, p. 2.

[49] Fair Work Commission, Australian Workplace Relations Study, 2014.

[50] Wright S and Buchanan J (2013), Award Reliance, Research Report 6/2013, Fair Work Commission, p. vii.

[51] Fair Work Commission, Award Reliance Survey, 2013.

[52] ABS, Employee Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0.

[53] HILDA survey Wave 16, 2016.

[54] ABS, Labour Force, Australia, Detailed, Quarterly, May 2018, Catalogue No. 6291.0.55.003.

[55] Ibid.

[56] Ibid.

[57] ABS, Characteristics of Employment, Aug 2017, Catalogue No. 6333.0, Explanatory notes.

[58] ABS, Labour Force, Australia, Detailed, Quarterly, May 2018, Catalogue No. 6291.0.55.003.

[59] Table 11, 438,700 employees had no paid leave entitlements out of a total of 1,128,900 employees (38.9 per cent).

[60] ABS, Labour Force, Australia, Detailed, Quarterly, May 2018, Catalogue No. 6291.0.55.003.

[61] ABS, Employee Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0, Glossary.

[62] ABS, Microdata: Employee, Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0.55.001.

[63] Fair Work Commission, Australian Workplace Relations Study, 2014.

[64] HILDA survey Wave 16, 2016.

[65] ABS, Employee Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0.

[66] ABS, Average Weekly Earnings, Australia, May 2018, Catalogue No. 6302.0.

[67] ABS, Employee Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0.

[68] ABS, Microdata: Employee, Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0.55.001.

[69] Fair Work Commission, Australian Workplace Relations Study, 2014.

[70] [2017] FWCFB 1001 at [166].

[71] MA000004; ABS, Characteristics of Employment, Australia, August 2017, Catalogue No. 6333.0; ABS, Employee Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0.

[72] Preston M, Pung A, Leung E, Casey C, Dunn A and Richter O (2012) ‘Analysing modern award coverage using the Australian and New Zealand Industrial Classification 2006: Phase 1 report’, Research Report 2/2012, Fair Work Australia.

[73] ABS, Census of Population and Housing, 2016.

[74] ABS, Census of Population and Housing, 2011 and 2016.

[75] HILDA survey Wave 16, 2016.

[76] PC Final Report at p. v.

[77] Ibid at p. 406.

[78] Ibid at p. 411, Table 10.1.

[79] Ibid at p. 497.

[80] Ibid at p. 1125.

[81] Ibid at p. 496.

[82] Ibid at p. 497.

[83] Retail Employers submission, 23 July 2018 at para. 52; Transcript, 15 August 2018 at PN1070–PN1077; SDA submission, 21 May 2018 at paras 15–20.

[84] [2014] FWCFB 1846.

[85] Ibid at [104].

[86] Retail Employers submission, 23 July 2018 at para. 55.

[87] Exhibit SDA 5 at para. 4.8(a).

[88] Ibid at para 4.8(b).

[89] Ibid at para 4.8(b).

[90] Ibid at para 4.8(c).

[91] SDA proposed findings on expert evidence at 9(b)(i)–(iv).

[92] [2017] FWCFB 1001 at [1490].

[93] Ibid at [1489].

[94] Ibid at [1491].

[95] Retail Employers submission, 23 July 2018 at paras 10–12 and paras 28–31.

[96] Ibid at para. 31(a).

[97] Transcript, 15 August 2018 at PN952–PN953.

[98] [2017] FWCFB 10001 at [1468].

[99] Retail Associations’ submission, 24 March 2017 at paras 53–55.

[100] [2017] FWCFB 1934, at Attachment B, Question 5.1.

[101] SDA submission in reply, 21 April 2017 at para. 53.

[102] [2017] FWCFB 1001 at [210]–[214].

[103] Ibid at [333]–[337].

[104] Ibid at [337]–[338].

[105] Common Exhibit 1, Vol. 1 at p. 497.

[106] Ibid at p. 497.

[107] Exhibit ARA 1 and Transcript of 14 August 2018 at PN189–PN428.

[108] Exhibit ARA 1 at pp. 4–5.

[109] Ibid at p. 5.

[110] Transcript, 14 August 2018 at PN231–PN232.

[111] Ibid at PN263.

[112] Exhibit ARA 1 at p. 7; and Transcript, 14 August 2018 at PN283–PN287.

[113] Exhibit ARA 1 at p. 7.

[114] Ibid at p. 13.

[115] Ibid at p. 14.

[116] Ibid.

[117] Ibid.

[118] Ibid at p. 22.

[119] Ibid at p. 7.

[120] Ibid at Table 17, p. 24.

[121] Ibid at pp. 26–27.

[122] Ibid at p. 24.

[123] Ibid at p. 25.

[124] Ibid at p. 26.

[125] Ibid at Table 18, pp. 27–28.

[126] Ibid at Table 22, p. 32.

[127] Ibid at Table 19, pp. 28–29.

[128] Ibid at Table 23, p. 34.

[129] Ibid at p. 33.

[130] Ibid at Table 26, p. 39.

[131] Ibid.

[132] Ibid at Table 28, p. 41.

[133] Ibid at Table 30, pp. 43–44.

[134] Ibid.

[135] Ibid at Table 28, p. 41.

[136] Ibid.

[137] Ibid.

[138] Ibid at Table 30, pp. 43–44.

[139] Ibid at Table 30, pp. 43–44.

[140] Ibid at Table 32, p. 36.

[141] Ibid at Table 27, p. 40.

[142] Ibid at Table 28, p. 41.

[143] Ibid.

[144] Ibid at p. 5.

[145] Table 9 at [36].

[146] [2013] FWCFB 4000 at [441].

[147] Exhibit ARA 1 at Table 26, p.39 and General retail industry profile at Table 19, p. 28.

[148] Ibid.

[149] Exhibit ARA 1 at Table 26, p. 39 and General retail industry profile at Table 12, p. 12.

[150] [2017] FWCFB 1001 at [1571].

[151] Transcript, 14 August 2018 at PN234.

[152] Ibid at PN236.

[153] Ibid at PN254–PN255.

[154] SDA outline of closing submissions, 15 August 2018 at Appendix C, para. 3.

[155] The Retail Employers proposed findings, 8 August 2018 at paras 4–5.

[156] Exhibit ARA 1 at p. 33.

[157] Ibid at Table 20, p. 30.

[158] Ibid.

[159] Ibid at Table 24, p. 36.

[160] The Retail Employers proposed findings, 8 August 2018 at para. 11.

[161] Exhibit ARA 2, Table 2 at p.8.

[162] Exhibit ARA 1 at p. 7.

[163] Ibid at Table 4, p. 11.

[164] Ibid at p. 11.

[165] Ibid at pp. 30–31

[166] Ibid at p. 33.

[167] Ibid at Table 24, p. 36.

[168] Ibid at pp. 37–38.

[169] Transcript, 14 August 2018 at PN372.

[170] Ibid at PN385.

[171] Ibid at PN388–PN389.

[172] [2017] FWCFB 1001 at [1377] to [1378] ad [1388] to [1396]

[173] Witness Statement of Joanne Elson dated 22 July 2018, Exhibit ARA3; Witness Statement of Campbell Vears dated 23 July 2018, Exhibit ARA4; Witness Statement of Terry Robert Slaughter dated 23 July 2018, Exhibit ARA5; Witness Statement of Jordan James Freeman dated 23 July 2018, Exhibit ARA6; Witness Statement of Anita Monique Dorwald dated 23 July 2018, Exhibit ARA7.

[174] Transcript, 14 August 2018 at PN467–PN579.

[175] Ibid at PN629–PN728.

[176] Ibid at PN760–PN842.

[177] Ibid at PN730–PN759.

[178] Ibid at PN581–PN622.

[179] Ibid at PN471.

[180] Ibid at PN475.

[181] Ibid at PN764.

[182] Ibid at PN787.

[183] Ibid at PN634.

[184] Ibid at PN660–PN670.

[185] Retail Employers proposed findings, 8 August 2018 at paras 6–8.

[186] Ibid at para. 7.

[187] [2017] FWCFB 1001 at [1619](ii).

[188] See the note to Table 3 at [28].

[189] See Table 3 at [28].

[190] See Table 4 at [30].

[191] Exhibit SDA 5 at para 2.23 and Exhibit SDA 4 at Table 4, p. 9.

[192] Elson transcript, 14 August 2018 at PN539–PN550; Slaughter transcript, 14 August 2018 at PN681–PN690 and PN705–PN706; and Dorwald transcript, 14 August 2018 at PN774–PN785.

[193] Transcript, 14 August 2018 at PN576.

[194] Ibid at PN719–PN721.

[195] Ibid at PN654–PN657.

[196] Ibid at PN520–PN523.

[197] Ibid at PN821.

[198] Exhibit ARA 4.

[199] Ibid at para. 5.

[200] Exhibit ARA 6.

[201] Ibid at paras 6, 8.

[202] Ibid at para. 10.

[203] Exhibit ARA 4 at paras 9–10; Retail Employers proposed findings, 8 August 2018 at para 14.

[204] Exhibit ARA 1 at p. 23, Table 16.

[205] See [94].

[206] Exhibit SDA 5.

[207] Ibid at para. 1.2.

[208] Transcript 14 August 2018 at PN47–PN184.

[209] PC Final Report at p. 497.

[210] Exhibit SDA 5 at paras 2.3, 2.8.

[211] Ibid at para. 2.10.

[212] Ibid.

[213] Ibid at para. 2.11.

[214] Ibid at para. 2.14.

[215] Ibid at para. 2.15; Manning A (2016), ‘The elusive employment effect of the minimum wage’, Centre for Economic Performance, London School of Economics and Political Science, Discussion Paper No. 1428.

[216] Exhibit SDA 5 at para. 2.16.

[217] Transcript, 14 August 2018 at PN117.

[218] Ibid at PN101.

[219] Exhibit SDA 5 at para. 2.22.

[220] Ibid at para. 2.23; ABS, Characteristics of Employment, August 2017, Catalogue No. 6333.0.

[221] Exhibit SDA 5 at para. 2.23.

[222] Ibid at para. 2.24; ABS, Characteristics of Employment, August 2017, Catalogue No. 6333.0.

[223] Ibid at para. 2.24.

[224] Ibid at para. 2.25.

[225] Ibid at pp 7–10.

[226] Ibid at para. 2.28.

[227] Ibid at para 3.22(c). Borland states that it is important to bear in mind the reasons why the actual impact on the weekly total cost of labour is likely to be less than the estimates of the maximum impact. It is apparent that he is referring here to the matters raised in paragraphs 2.10–2.15.

[228] Ibid at para 2.10.

[229] Ibid at para 2.11.

[230] Ibid at para 2.13.

[231] Ibid at paras 3.3–3.4.

[232] Ibid at para. 3.6.

[233] Ibid at paras 3.5–3.6.

[234] Ibid at para. 3.7; PC Final Report at pp. 412–413.

[235] Ibid at para. 3.18.

[236] Ibid at para. 3.20.

[237] Ibid at para. 3.21; Fair Work Commission, Industry profile—Retail trade, material to assist AM2014/305—Penalty Rates Case.

[238] Exhibit SDA 5 at para. 3.21.

[239] Ibid at para. 3.21.

[240] Ibid at para. 3.22.

[241] Ibid at para 4.1(b).

[242] Ibid at para. 4.6.

[243] Ibid at para. 4.3.

[244] Ibid at para. 4.3–4.4.

[245] Retail Employers submission, 6 September 2018 at para. 15.

[246] Transcript, 14 August 2018 at PN79–PN81.

[247] Ibid at PN116, PN118, PN125.

[248] Ibid at PN88–89, PN92, PN10–PN103, PN125.

[249] Ibid at PN84.

[250] Ibid at PN86.

[251] Retail Employers reply submission, 6 September 2018 at para. 17.

[252] Transcript, 14 August 2018 at PN123.

[253] Retail Employers reply submission, 6 September 2018 at para. 18; Transcript, 14 August 2018 at PN88–PN89, PN92, PN101–PN103, PN125.

[254] Transcript, 14 August 2018 at PN92–93.

[255] Ibid at PN89.

[256] Ibid at PN101, PN133.

[257] Ibid at PN133.

[258] Exhibit SDA 5 at paras 1.5(b), 3.22(c).

[259] Ibid at paras 3.19, 3.22(a).

[260] Ibid at para. 3.19.

[261] Ibid at paras 3.1, 3.19.

[262] Ibid at paras 3.21, 3.22(b).

[263] ABI submission, 13 August 2018.

[264] Retail Employers submission, 21 May 2018 at para. 18.

[265] Ibid at para. 19; [2017] FWCFB 1001 at [54].

[266] Ibid at para. 18.

[267] [2017] FWCFB 1001 at [55].

[268] SDA submission in reply, 23 June 2018.

[269] Retail Employers submission, 30 August 2018 at paras 9–10.

[270] SDA submission, 6 September 2018 at para. 9.

[271] [2017] FWCFB 1001 at [1701].

[272] Ibid at [689].

[273] See Chart 3 at [51].

[274] See Table 20 at [56].

[275] [2010] FWAFB 379.

[276] Ibid at [24].

[277] Ibid at [670].

[278] [2017] FWCFB 1001 at [1700].

[279] Ibid at [1709].

[280] Retail Employers submission, 23 July 2018 at para. 76.

[281] [2017] FWCFB 1001 at [224]–[225].

[282] [2017] FWCFB 3001.

[283] [2017] FWCFB 1001 at [142].

[284] Ibid at [117]–[119].

[285] Ibid at [148].

[286] Retail Employers submission, 30 August 2018 at para. 17.

[287] SDA submission, 6 September 2018 at para. 12.

[288] Retail Employers submission, 6 September 2018 at para. 11.

[289] Retail Employers submission, 30 August 2018 at para. 23.

[290] Retail Employers submission, 30 August 2018 at para. 25.

[291] Ibid at para. 26.

[292] SDA submission, 30 August 2018 at para. 9.

[293] Ibid at para. 11.

[294] Ibid at para. 12.

[295] SDA submissions, 6 September 2018 at paras 17–18.

[296] Exhibit SDA 5 at para 1.5(a).

[297] This table excludes shiftwork penalties and rates.

[298] Printed by authority of the Commonwealth Government Printer

These span of hours apply to most employees however there are some exceptions that apply in the award. See cl 27.2 (b)(i) and (ii).

[299] An ordinary casual loading of approximately 33% may apply if the casual employee receives, at the election of the employer, the entitlement to annual leave (an additional 1/12^th of the appropriate ordinary hourly rate) under cl 10.4.2(e).

[300] These span of hours apply to most employees however there are some exceptions that apply in the award. For example, newsagents’ ordinary hours are from 5am to 6pm.

[301] Additional monetary amounts apply in clause 18.2.1; we have calculated the equivalent percentage to be a loading of approx. 36 per cent.

[302] Various additional rates apply in clause 10.4; we have calculated the equivalent percentage to be a loading of approx. 36 per cent.

[303] Cl 13.4.3(a) of the Retail and Wholesale Industry – Shop Employees - Australian Capital Territory - Award 2000 states that for time worked within the ordinary hours of work Monday to Friday, an hourly rate equal to the appropriate weekly rate divided by 38 plus 15 per cent.

[304] The span of ordinary hours displayed does not include warehouse and wholesale employees as per cl 23.4 of the Retail and Wholesale Industry – Shop Employees - Australian Capital Territory - Award 2000.

[305] See cl 13.4.3(b) for more information.

[306] The award provides for a casual loading of 15 per cent but casual employees were also entitled to the1/12th annual leave loading under the Holidays Act 1944.

[307] The span of ordinary hours varies on a Saturday depending on what part of Queensland the work is being performed. In addition, there are different ordinary hours depending on the type of business the employee was working in. For example, there are different ordinary hours for independent and non-exempt shops.

[308] There are different span of hours and loadings that apply to night fill employees, see cl 4.7.3

[309] This penalty applies to employees working in establishments which, as at 1 December 2004, did not trade after 12.30pm on a Saturday (see cl 6.3.2–6.3.2.2). Employees working in establishments after 1 December 2004 are paid a higher base rate of pay inclusive of ordinary and overtime rates under Schedule 2. Different provisions apply for employees in cafes, restaurants, takeaway chicken and fish shops and retail outdoor salespersons.

[310] This penalty applies to employees working in establishments which, as at 1 December 2004, did not trade after 12.30pm on Saturday and those employees working in cafes, canteens and restaurants (cl 6.3.1–cl 6.3.1.1). Employees working in establishments after 1 December 2004 are paid a higher base rate of pay inclusive of ordinary and overtime rates under Schedule 2. Different provisions apply for employees in cafes, restaurants, takeaway chicken and fish shops and retail outdoor salespersons.

[311] The span of ordinary hours may be extended to include Monday, Tuesday and Wednesday under cl 21(b).

[312] Note: Special retail shops have same late night provisions as General Retail Shops. However s12D of the Retail Trading Hours Act 1987 (WA) states that a special retail shop is required to be closed after 11.30 pm.

[313] Note: This excludes span of ordinary hours and rates for nightfill workers.

[314] Clause 7(5) of the Shop and Warehouse (Wholesale and Retail Establishments) State Award 1977 provides for the following calculation:

Weekly rate for full time worker Monday to Friday/38) + (Weekly rate for ordinary hours between Monday and Saturday with the completion of ordinary hours after 1.00p.m. Saturday - weekly rate for ordinary hours Monday to Friday 7.6) x 120%

4 yearly review of modern awards – General Retail Industry Award 2010

[2018] FWCFB 5897

27 SEPTEMBER 2018