4 yearly review of modern awards – Penalty Rates
[2017] FWCFB 1001
•23 FEBRUARY 2017
| [2017] FWCFB 1001 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
(AM2014/305)
JUSTICE ROSS, PRESIDENT | MELBOURNE, 23 FEBRUARY 2017 |
4 yearly review of modern awards – penalty rates – hospitality and retail sectors
CONTENTS
Chapters | |
1. | Introduction [1] |
2. | The Decision: An Overview |
3. | Legislative Framework |
4. | Award Modernisation and the Transitional Review |
5. | Submissions overview 5.1 Principal parties [302] |
6. | Weekend work 6.1 Overview of data and evidence [424] |
7. | The Hospitality Sector 7.1 Overview [691] 7.1.1 Features of the hospitality sector 7.2 Hospitality Industry (General) Award 2010 [745] 7.2.1 The claims 7.3 Registered and Licenced Clubs Award 2010 [907] 7.3.1 The claims 7.4 Restaurant Industry Award 2010 [1010] 7.4.1 The Claims 7.5 Fast Food Industry Award 2010 [1161] 7.5.1 The Claims |
8. | The Retail Sector 8.1 Overview [1410] 8.1.1 Features of the Retail Sector 8.2 General Retail Industry Award 2010 [1466] 8.2.1 The claims 8.3 Pharmacy Industry Award 2010 [1721] 8.3.1 The claims |
9. | Public Holiday Penalty Rates |
10. | The Right to Refuse Work [1982] |
11. | Transitional Arrangements [1998] |
12. | Next Steps [2030] |
| ATTACHMENTS Attachment A—List of witnesses | |
ABBREVIATIONS
AAWI | average annualised wage increases |
ABI | Australian Business Industrial and the New South Wales Business Chamber |
ABS | Australian Bureau of Statistics |
ACCI | Australian Chamber of Commerce and Industry |
ACTU | Australian Council of Trade Unions |
AFEI | Australian Federation of Employers and Industries |
Ai Group | Australian Industry Group |
AIRC | Australian Industrial Relations Commission |
AHA | Australian Hotels Association |
AMSRS | Australian Market and Social Research Society |
ANZSIC | Australian and New Zealand Standard Industrial Classification |
APESMA | The Association of Professional Engineers, Scientists and Managers, Australia |
ARA | Australian Retailers Association |
ARS | Award Reliance Survey |
ASR | Australian Survey Research Group Pty Ltd |
AWRS | Australian Workplace Relations Study |
Benchmarking Survey | restaurant and catering benchmarking survey conducted by RCI in 2014 |
CAI | Clubs Australia Industrial |
Clubs Award | Registered and Licensed Clubs Award 2010 |
CoE | Characteristics of Employment Survey |
Coffs Club Agreement | Coffs Ex Services Memorial and Sporting Club Enterprise Agreement 2015 [AE415387] |
Commission 1 | Fair Work Commission |
EA Survey | Survey by Elections Australia Pty Ltd of RCI Members |
EEBTUM | Employee Earnings, Benefits and Trade Unions Membership |
EEH | Employee Earnings and Hours |
Fast Food Award | Fast Food Industry Award 2010 |
FW Act | Fair Work Act 2009 (Cth) |
FWO | Fair Work Ombudsman |
FWO Wave 2 Report | National Hospitality Industry Campaign Restaurants, Caf�’s and Catering (Wave 2) |
FWO Wave 3 Report | National Hospitality Industry Campaign 2012–15 Takeaway Foods (Wave 3) |
HERRC industries | hospitality, entertainment, retail, restaurants and cafes |
HILDA | Household, Income and Labour Dynamics in Australia |
Hospitality Award | Hospitality Industry (General) Award 2010 |
Hospitality Employers | Australian Hotels Association and the Accommodation Association of Australia |
Hospitality and Retail Awards | Hospitality, Restaurant, Retail, Fast Food and Pharmacy Awards (see [1915]) |
IPART | NSW Independent Pricing and Regulatory Tribunal |
Jetty survey | survey by Jetty Research |
KPMG Clubs Report | KPMG ‘National Club Census 2011’ |
MGA | Master Grocers Australia Limited |
NES | National Employment Standards |
NRA | National Retailers Association |
PC Final Report | Productivity Commission Inquiry Report: Workplace Relations Framework |
PGA | The Pharmacy Guild of Australia |
Pharmacy Award | Pharmacy Industry Award 2010 |
QSR | Quick Service Restaurants |
RCI | Restaurant & Catering Industrial |
Request | Request by Minister for Employment and Workplace Relations to modernise awards in accordance with s.576C(1) of the WR Act |
Restaurant Award | Restaurant Industry Award 2010 |
Retail Award | General Retail Industry Award 2010 |
Retail employers | Australian Retailers Association, National Retail Association and Master Grocers Association |
Review | 4 yearly review of modern awards |
SDA | Shop, Distributive and Allied Employees Association |
Taskforce Report | Final Report of the Visitor Economy Taskforce: A Plan to Double Overnight Visitor Expenditure to NSW by 2020 |
TPCA Act | Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 |
Transitional Review | Transitional (or 2 year) review of modern awards under Item 6 of Schedule 5 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 |
Victorian Shops Interim Award | Shop, Distributive and Allied Employees Association - Victorian Shops Interim Award 2000 |
WAD | Workplace Agreements Database |
WR Act | Workplace Relations Act 1996 |
1. Introduction
4 yearly review
[1] Section 156 of the Fair Work Act 2009 (the FW Act) provides that the Fair Work Commission (the Commission) must conduct a review of all modern awards every four years (the Review).
[2] As detailed in a statement issued on 6 February 2014, 2 the Review consists of an Initial stage (dealing with jurisdictional issues), a Common issues stage and an Award stage (which would review all modern awards in four groups).3
[3] As part of the Review, various employer bodies have made application to vary penalty rate provisions in a number of modern awards. These applications have been heard together.
[4] In an Issues Paper dated 24 February 2014, the Commission indicated its preliminary view that proposals to vary penalty rates would not be dealt with as a common issue, but would be dealt with in the Award stage of the Review. 4 This preliminary view was confirmed in a Statement and Directions issued on 17 March 2014 and it was noted that the penalty rates matter would be dealt with by a separately constituted Full Bench. 5
[5] The modern awards subject to claims are:
Award title | Award code | Matter No. |
Fast Food Industry Award 2010 | MA000003 | AM2014/267 |
General Retail Industry Award 2010 | MA000004 | AM2014/270 |
Hospitality Industry (General) Award 2010 | MA000009 | AM2014/272 |
Pharmacy Industry Award 2010 | MA000012 | AM2014/209 |
Registered and Licensed Clubs Award 2010 | MA000058 | AM2014/283 |
Restaurant Industry Award 2010 | MA000119 | AM2014/284 |
[6] This decision deals with those claims.
[7] Table 1 below sets out claims employer parties have made to reduce weekend penalty rates in respect of each award that is the subject of this decision. Table 1 sets out the current penalty rates for work performed on a Saturday and Sunday in each award, and the proposed change for each award is highlighted in red text.
Table 1
Weekend Penalty Rates
Full-time | Part-time | Casual (inclusive of casual loading) | ||||
% of permanent base rate | % of permanent base rate | % of permanent base rate | ||||
Sat | Sun | Sat | Sun | Sat | Sun | |
Restaurant Industry Award 2010 | 125 | 150 | 125 | 150 | 150 | 150 (175)1 |
Restaurant Industry Award 2010 2 (proposed by RCI) | 125 | 125 | 125 | 125 | 150 | 150 |
Registered and Licensed Clubs Award 2010 | 150 | 175 | 150 | 175 | 150 | 175 |
Registered and Licensed Clubs Award 2010 (proposed by CAI) | 125 | 150 | 125 | 150 | 150 | 150 |
General Retail Industry Award 2010 | 125 | 200 | 125 | 200 | 135 | 200 |
General Retail Industry Award 2010 (proposed by the Retail Employers and ABI3) | 125 | 150 | 125 | 150 | 135 | 150 |
Hospitality Industry (General) Award 2010 | 125 | 175 | 125 | 175 | 150 | 175 |
Hospitality Industry (General) Award 2010 (proposed by AHA and AAA) | 125 | 150 | 125 | 150 | 150 | 150 |
Fast Food Industry Award 2010 | 125 | 150 | 125 | 150 | 150 | 175 |
Fast Food Industry Award 2010 (proposed by RCI) | 125 | 125 | 125 | 125 | 150 | 150 |
Fast Food Industry Award 2010 (proposed by Ai Group) | 125 | 125 | 125 | 125 | 150 | 150 |
Pharmacy Industry Award 2010 4 | 200, 125, 150, 175 | 200 | 200, 125, 150, 175 | 200 | 225, 150, 175, 200 | 225 |
Pharmacy Industry Award 2010 (proposed by the Pharmacy Guild) | 200, 125, 150 | 200, 150, 175 | 200, 125, 150 | 200, 150, 175 | 200, 125, 150 | 200, 150, 175 |
1 Level 1–2 employees receive a penalty rate of 150% on Sundays, Level 3–6 casual employee receive 175%.
2 ABI have made a claim in relation to the Restaurant Award to reduce the public holiday rate only.
3 The Retail employers are also seeking to reduce the penalty rate for shiftworkers on Sunday from 200% to 150%.
4 There are currently up to four penalty rates, based on the time of working
[8] The principal parties to the proceedings are identified in Chapter 5.1.
[9] In a statement on 8 September 2016 directions were issued in which we sought to clarify the status of the various claims before us in the penalty rates proceedings. A draft summary of the claims was issued along with the statement, requesting parties’ comments.
[10] Australian Business Industrial and the New South Wales Business Chamber (ABI) confirmed that the variations to the Hair and Beauty Industry Award 2010 which had been proposed by ABI and the Hair and Beauty Australia Industry Association, were no longer pressed. Correspondence was also received from Restaurant & Catering Industrial (RCI) confirming that its claim in respect of clauses 34.4(c) and 34.4(d) of the Restaurant Industry Award 2010 was no longer pressed.
[11] No correspondence was received from other parties in relation to the draft summary.
[12] A finalised version of the summary was republished as a statement on 12 October 2016. 6
[13] In addition to the claims set out in Table 1 above, a number of other claims have been made. These claims generally relate to the public holidays clause, for example the Hospitality Employers (the Australian Hotels Association and the Accommodation Association of Australia) seek to introduce a two-tiered regime into the Hospitality Award in respect of public holiday penalty rates under which higher penalty rates are prescribed for work performed on the public holidays specified under s.115(1) of the FW Act. Other claims seek to reduce the existing penalties paid for work on public holidays. We set out all these claims in more detail in Chapter 9. Claims have also been made seeking changes to the early/late night work penalties in a number of the awards.
[14] We deal with each claim in detail later in this decision.
[15] As noted in the Statement issued 17 December 2014, further proposals to alter penalty rates in other modern awards will be dealt with on an award-by-award basis in the award stage of the Review. 7
1.1. The Process
[16] After a consultation process, a consensus emerged among interested parties that the modern awards and issues in relation to penalty rates would be dealt with jointly but sequenced into three ‘groups’, as follows:
(i) Common evidence—evidence relevant to the consideration of claims in all awards and industry sectors.
(ii) Hospitality group—includes the following awards:
Amusement, Events and Recreation Award 2010
Hospitality Industry (General) Award 2010
Registered and Licensed Clubs Award 2010
Restaurant Industry Award 2010
(iii) Retail group—includes the following awards:
Dry Cleaning and Laundry Industry Award 2010
Fast Food Industry Award 2010
General Retail Industry Award 2010
Hair and Beauty Industry Award 2010
Pharmacy Industry Award 2010
[17] Applications to vary the Amusement, Events and Recreation Award 2010, Dry Cleaning and Laundry Industry Award 2010 and Hair and Beauty Industry Award 2010 were withdrawn by the parties at various points in the proceedings. 8
[18] A number of conferences were held and various procedural Statements issued by the Commission dealing with a range of programming and scheduling matters. There was general agreement that ‘common evidence’ would be heard first and separate to the particular evidence relating to the Hospitality group and the Retail group, followed by a submission process.
[19] Common evidence is evidence that is relevant to the consideration of claims in all of the relevant awards and industry sectors, and would generally be provided by an expert. Such evidence could include government reports and statistical or social commentary material. Award or industry-specific evidence would be presented during the Hospitality and Retail group stages.
[20] Final directions and a hearing timetable were issued in a Statement on 3 March 2015. 9 The directions set out the process for the filing of evidence (including witness statements from expert witnesses and lay witnesses across the three streams), objections to any evidence, submissions, proposed findings and survey material.
[21] The directions and timetable were revised on 7 August 2015, 10 after a number of parties sought variations to the 3 March 2015 directions.
[22] Parties were advised that issues in relation to the penalty rate payable on a public holiday in the awards referred to in paragraph [5] of this decision were to be dealt with during these proceedings, and not as part of the common issue public holiday proceedings. 11
[23] The Commission heard evidence on 8–25 September, 1 October, 12–28 October, 4– 6 November, 15–16 and 21 December 2015. Evidence was given by 143 lay and expert witnesses of whom 128 were required for cross-examination. Witnesses included employers and employees from the relevant industry sectors, appearing either in person or from around Australia (including regional locations) via videolink. The expert evidence included academics with expertise in economics and workplace relations. A complete list of witnesses is attached to this decision at Attachment A.
[24] A number of Mentions have been held concurrently while evidence is being heard, dealing with scheduling of witnesses, objections to evidence (both expert and lay), legal professional privilege claims and applications for confidentiality orders. As part of these proceedings, the Commission has issued 38 Orders for the production of documents, and eight confidentiality orders.
[25] In total there have been 39 days of hearings and an additional 15 mentions and conferences.
[26] The dates for filing final submissions were revised following requests from the parties, and final hearings in the matter were held from 11–15 April 2016 and 28 September 2016. The final written submission was received on 4 February 2017.
[27] In addition to material received from parties, the Commission has published its own research material. Three reports have been prepared and published by the Workplace and Economic Research Section of the Commission to assist parties with their submissions in the matter:
(i) Industry profile – Accommodation and food services
(ii) Industry profile – Retail trade
(iii) Changing work patterns
[28] These reports have been updated and republished a number of times to take into account new data. The most recent update to all three reports was on Friday 20 January 2017 to take into account the following:
- Australian Bureau of Statistics (ABS) Employee Earnings and Hours, May 2016; and
- Household, Income and Labour Dynamics in Australia (HILDA) survey, 2015.
[29] A Research Reference List was published on the Commission’s website on 15 January 2016 containing references that had been cited in the substantive evidence of expert witnesses and the submissions of the parties. Additional publications identified by staff of the Commission that may be of relevance were also included in the list. Interested persons were given an opportunity to comment on the list 12. The Research Reference List is contained in Attachment B.
[30] The conduct of the Review has been open and transparent, in accordance with s.577 of the FW Act. The Commission’s website has been used extensively to provide information to any interested person in order to facilitate broad participation in the Review. Interested persons were encouraged to subscribe to the dedicated penalty rates subscription notification service to keep them informed about the penalty rates matter.
[31] On 15 January 2016 13, revised directions were issued directing that:
‘Any interested person who is not a party to the proceedings may put forward a position (and file material in support of their position) in relation to varying the penalty rate provisions in the above awards by no later than 4.00pm Wednesday 17 February 2016.’
[32] This direction was publicly advertised in major newspapers nationally on 20 January 2016. 14 Some 5845 public contributions from individual employees and employers were received and published on the Commission’s website15 and 55 additional confidential contributions were forwarded to the Full Bench and provided to the principal parties, but not published.
[33] Throughout the process and in addition to the 5845 public contributions, 36 submissions have been received from organisations who are not principal parties to the proceedings. These organisations included Members of Parliament and State governments, unions, student organisations, community groups, small businesses, churches and industry groups. Of these submissions 14 supported a reduction to the current penalty rates regime and 22 did not support any change to the current system. These submissions are addressed in Chapter 5.3.
2. The Decision: An Overview
2.1 The Legislative context and proposed changes in penalty rates
[34] Section 156 of the FW Act provides that the Commission must conduct a 4 yearly review of modern awards (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.
[35] This decision deals with the review of the weekend and public holiday penalty rates and some related matters, in a number of Hospitality and Retail awards.
[36] The Commission’s task in the Review is to decide whether a particular modern award achieves the modern awards objective. If it does not then it is to be varied such that it only includes terms that are ‘necessary to achieve the modern awards objective’ (s.138).
[37] The modern awards objective in s.134(1) of the FW Act is central to the Review. The modern awards objective is to ‘ensure that modern awards, together with the National Employment Standards (NES) provide a fair and relevant minimum safety net of terms and conditions’, taking into account the particular considerations identified in sections 134(1)(a) to (h). Fairness in this context is to be assessed from the perspective of the employees and employers covered by the modern award in question. ‘Relevant’ is intended to convey that a modern award should be suited to contemporary circumstances. We deal with the relevant legislative provisions in more detail in Chapter 3.
[38] Historically, industrial tribunals have expressed the rationale for penalty rates in terms of both the need to compensate employees for working outside ‘normal hours’ (the compensatory element) and to deter employers from scheduling work outside ‘normal’ hours (the deterrence element). 16
[39] Having regard to more recent authority, the terms of the modern awards objective, and the scheme of the FW Act, we have concluded that deterrence is no longer a relevant consideration in the setting of weekend and public holiday penalty rates. We accept that the imposition of a penalty rate may have the effect of deterring employers from scheduling work at specified times or on certain days, but that is a consequence of the imposition of an additional payment for working at such times or on such days, it is not the objective of those additional payments. Compensating employees for the disutility associated with working on weekends and public holidays is a primary consideration in the setting of weekend and public holiday penalty rates.
[40] We note that the Productivity Commission has expressed a different view in respect of public holiday penalty rates:
‘… by definition, genuine public holidays are intended to serve a special community role and, as such, there are strong grounds to limit the expectation that they are for working. In that sense, the original concept of deterrence continues to have relevance’. 17
[41] We accept that public holidays, by their nature, are intended ‘to serve a special community role’ and that the expectation (and practice) is that the vast majority of employees do not work on public holidays. But these features do not support the adoption of deterrence as an objective in setting public holiday penalty rates. However, these features are relevant to determining the amount of compensation to be provided to employees who work on public holidays, given the additional disutility associated with working on a day when the vast majority of other employees are enjoying a day of leisure.
[42] A central contention advanced by the Shop, Distributive and Allied Employees Association (SDA) and United Voice in these proceedings is that before the Commission can vary a modern award in the Review, it must first be satisfied that since the making of the modern award there has been a material change in circumstances pertaining to the operation or effect of the award such that the modern award is no longer meeting the modern awards objective (the ‘material change in circumstances test’). If adopted the proposed test would require the proponent of a variation to establish that there has been a material change in circumstances since the modern award was made. The proposed ‘material change in circumstances’ test seeks to place a constraint on the discretion conferred by s.156 which is not warranted by the terms of this section or the relevant statutory context and purpose. There is no such express or implied requirement in s.156.
[43] We reject the proposition advanced by the Unions. The adoption of the proposed ‘material change in circumstances test’ would obfuscate the Commission’s primary task in the Review, determining whether the modern award achieves the modern awards objective. To adopt such a test would add words into s.156 in circumstances where it is not necessary to do so in order to achieve the legislative purpose. For completeness we record our agreement with the point advanced by the Australian Industry Group (Ai Group) in its submission in reply 18 that the variation of a modern award may be warranted if it was established that there was a ‘material change in circumstances’ since the modern award was made, but the establishment of such a change is not a condition precedent to the variation of a modern award in the Review.
[44] As mentioned, the modern awards objective is central to the Review. In determining whether an award achieves the modern awards objective the Commission must take into account a range of considerations, including those set out in s.134(1)(da). Relevantly, s.134(1)(da)(iii) requires that we take into account the ‘need to provide additional remuneration’ for ‘employees working on weekends or public holidays’.
[45] An assessment of ‘theneed to provide additional remuneration’ to employees working in the circumstances identified 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);
(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.
[46] Assessing the extent of the disutility of working at such times or on such days (issue (i) above) includes an assessment of the impact of such work on employee health and work-life balance, taking into account the preferences of the employees for working at those times.
[47] Section 134(1)(da) speaks of the ‘need to provide additional remuneration’ for employees performing work in the circumstances mentioned. We note that the minority inthe Restaurants 2014 Penalty Rates decision 19 made the following observation about s.134(1)(da): ‘…the objectiverequires additional remuneration for working on weekends’.20
[48] To the extent that the above passage suggests that s.134(1)(da) ‘requires additional remuneration for working on weekends’, we respectfully disagree. We acknowledge that the provision speaks of ‘the need for additional remuneration’ and that such language suggests that additional remuneration is required for employees working in the circumstances identified in paragraphs 134(1)(da)(i) to (iv). But the expression must be construed in context and the context tells against the proposition that s.134(1)(da) requires that each modern award must provide additional remuneration for working in the identified circumstances.
[49] The various employer parties have sought reductions in Sunday and public holiday penalty rates. These claims are summarised in Tables 1 and 74. There were also some claims to vary the penalty payments for early/late night work in some awards.
[50] Generally speaking, no changes are sought in relation to Saturday penalty rates. 21
[51] We have reviewed the Saturday penalty rates in 4 of the 6 modern awards before us and (subject to the observations at [65] and [66]) we are satisfied that the existing Saturday penalty rates achieve the modern awards objective – they provide a fair and relevant minimum safety net. The review of Saturday penalty rates in the Clubs and Pharmacy Awards is to be the subject of further proceedings (see [994]–[1009] and [1872]–[1892]).
[52] Variations to modern awards must be justified on their merits. The extent of the merit argument required will depend on the circumstances. Significant changes where merit is reasonably contestable should be supported by an analysis of the relevant legislative provisions and, where feasible, probative evidence.
[53] We have decided that the existing Sunday penalty rates in 4 of the modern awards before us (the Hospitality, Fast Food, Retail and Pharmacy Awards) do not achieve the modern awards objective, as they do not provide a fair and relevant minimum safety net.
[54] Except in the Fast Food Award (for the reasons set out at [1394]–[1397]), we do not propose to reduce the Sunday penalty rates to the same level as the Saturday penalty rates. As we mention shortly, for many workers Sunday work has a higher level of disutility than Saturday work, though the extent of the disutility is much less than in times past. In this regard we also note that it is implicit in the claims advanced by most of the employer interests that they accept the proposition that the disutility associated with Sunday work is higher than the disutility associated with Saturday work. If this was not the case then they would have proposed that the penalty rates for Sunday and Saturday work be the same, but they did not.
[55] The reductions in Sunday penalty rates we have determined are set out below:
Award | Sunday Penalty Rate |
Hospitality Award full-time and part-time employees: (no change for casuals) | 175 per cent → 150 per cent |
Fast Food Award (Level 1 employees only) Full-time and part-time employees: Casual employees: | 150 per cent → 125 per cent 175 per cent → 150 per cent |
Retail Award Full-time and part-time employees: Casual employees: | 200 per cent → 150 per cent 200 per cent → 175 per cent |
Pharmacy Award (7.00 am – 9.00 pm only) Full-time and part-time employees: Casual employees: | 200 per cent → 150 per cent 225 per cent → 175 per cent |
[56] In relation to the Fast Food Industry Award 2010, for reasons associated with the preferences of the relevant employees and the limited impact of Sunday work upon those employees (see Chapter7.5), we have decided to reduce the Sunday penalty rate, for level 1 employees from 150 per cent to 125 per cent (for full-time and part-time employees) and from 175 per cent to 150 per cent (for casual employees). We do not propose to change the Sunday penalty rate for Level 2 and 3 employees.
[57] The differential treatment of Level 1 versus Level 2 and 3 employees is on the basis that Level 2 and 3 employees experience a higher level of disutility associated with Sunday work than that experienced by level 1 employees. The evidence supports the retention of the current Sunday penalty rate for level 2 and 3 employees. In this context we note that level 2 and 3 employees are, generally speaking, regarded as ‘career’ employees with the major chains whereas casual and part-time crew members (level 1 employees) are usually regarded as ‘non-career’ employees.
[58] We also note that in addition to the changes to Sunday penalty rates we have decided to vary some of the penalty provisions in relation to early/late night work in the Restaurants and Fast Food Awards (see [1126]–[1137], [1154], [1324]–[1334] and [1391])
[59] As to the Pharmacy Industry Award 2010, at this stage, we are not persuaded to make the changes proposed to the loadings for work before 7.00 am and between 9.00 pm and midnight, on weekends and Monday to Friday. We deal with the next steps in the review of this award in Chapter 12.
[60] On the material presently before us we are not satisfied that the variations proposed to the Registered and Licensed Clubs Award 2010 and the Restaurant Industry Award 2010 are necessary to ensure that these awards achieve the modern awards objective. In short, the employer organisations concerned have not established a merit case sufficient to warrant the granting of their claims. We deal with the deficiencies in the cases put and the next steps in relation to the review of these 2 awards in Chapter 11 at [2044]–[2050].
[61] We have also decided to reduce the public holiday penalty rates in the Hospitality and Retail Awards (except for the Clubs Award, for the reasons set out at [1915]).
[62] We also conclude that the two-tiered approach to public holiday penalty rates advanced by the Hospitality Employers lacks merit. The distinction sought to be drawn between those public holidays expressly mentioned in s.115(1)(a) and the other days declared or prescribed by or under a law of a State or Territory as a public holiday (s.115(1)(b)), is illusory. In that regard we concur with the views expressed in the 1994 Public Holidays Test Case decisions and the Modern Awards Review 2012 – Public Holidays decision, that, in essence, the number and standardisation of public holidays across Australia is primarily an issue for the Commonwealth, State and Territory legislatures.
[63] The effect of our decision in respect of public holiday penalty rates is shown (in marked up format) in Table 2 below.
Table 2
Proposed public holiday penalty rates in the Hospitality and Retail awards
Award title | Public holiday penalty rates (%) | |
Full-time & part-time | Casual | |
Hospitality Award (cl. 32) |
|
|
Restaurant Award (cl. 34) |
| 250 |
Clubs Award (cl. 29) | 250 | 250 |
Retail Award (cl. 29) |
|
|
Fast Food Award (cl. 30) |
|
|
Pharmacy Award (cl. 31) |
|
|
[64] The changes we propose to make to Sunday and public holiday penalty rates will result in greater consistency in penalty rate settings in the Hospitality and Retail Awards .
[65] In each of the Sunday and public holiday penalty rates we have fixed we have adopted what the Productivity Commission Inquiry Report: Workplace Relations Framework (PC Final Report) describes as the ‘default approach’ to setting the appropriate rate for casual employees (see [333]–[338]). Under this approach the rate of pay for casual employees is always 25 percentage points above the rate of pay for non-casual employees. Hence if the Sunday penalty rate for full-time and part-time employees is 150 per cent, the Sunday rate for casuals will be 150 + 25 = 175 per cent.
[66] We note that the approach we have adopted may have implications for the rate paid to casuals for Saturday work under the Retail Award. We refer to that issue at [1716]–[1720]. It may also result in a shift from casual to part-time employment in respect of those employed in the modern awards which we propose to vary.
[67] The decision to reduce Sunday and public holiday penalty rates in these awards is based on our conclusions with respect to the common evidence (see Chapter 6) and our assessment of the evidence in relation to each of these particular awards (see Chapters 7.2, 7.5, 8.2 and 8.3).
[68] In Chapter 6 we consider the ‘common evidence’ adduced in these proceedings and deal with the incidence and effects of weekend work and the employment effects of reducing penalty rates. The following propositions emerge from the common evidence before us:
1. There is a disutility associated with weekend work, above that applicable to work performed from Monday to Friday. Generally speaking, for many workers Sunday work has a higher level of disutility than Saturday work, though the extent of the disutility is much less than in times past.
2. We agree with the assessment in the PC Final Report that there are likely to be some positive employment effects from a reduction in penalty rates, though it is difficult to quantify the precise effect. Any potential positive employment effects from a reduction in penalty rates are likely to be reduced due to substitution and other effects.
[69] As to proposition 1 above, we are aware that our conclusion is different to that in the PC Final Report. However, in the proceedings before us we have had the opportunity to consider evidence not available to the Productivity Commission, such as the Pezzullo Weekend Work Report, the Rose Report and the Sands Report in addition to a substantial amount of lay employer and employee evidence. None of the above reports concluded that the activities conducted on, and attitudes towards, Saturdays and Sundays were identical.
[70] As to proposition 2, the Hospitality and Retail Employers’ lay evidence supports the proposition that the current level of Sunday penalty rates has led employers to reduce labour costs associated with Sunday trading by imposing a number of operational limitations, such as:
- restricting trading hours;
- lowering staff levels; and
- restrictions on the type and range of services provided.
[71] The Hospitality and Retail Employers’ lay evidence also supports the proposition that a reduction in penalty rates is likely to lead to:
- increased trading hours on Sundays and public holidays;
- a reduction in the hours worked by some owner operations;
- an increase in the level and range of services offered on Sundays and public holidays; and
- an increase in overall hours worked.
[72] We do not suggest that these changes will apply uniformly across all hospitality and retail businesses. The actual impact of a reduction in Sunday penalty rates will depend on the circumstances applying to individual businesses.
[73] As to public holiday penalty rates, we note that the disutility of working on public holidays is greater than the disutility of working on Sundays (which in turn is greater than Saturday work). The notion of relative disutility supports a proportionate approach to the fixation of weekend and public holiday penalty rates. In determining the appropriate penalty rate for public holiday work we have had regard to the level of Sunday penalty rates in the Hospitality and Retail Awards (after applying the decisions we have made to reduce those rates).
[74] We also note that the disutility in relation to public holidays has been ameliorated somewhat by the introduction of the statutory right to refuse to work on such days, on reasonable grounds. Contrary to ABI’s submission, we would not characterise s.114(3) of the FW Act as making public holiday work ‘voluntary’ (it is a limited right to refuse to work, on reasonable grounds), but it is still a significant contextual matter which was not taken into account when the existing 250 per cent penalty was set.
[75] In addition, public holiday work is more common in the Hospitality and Retail sectors and, on the evidence before us, reducing the public holiday penalty rate will increase employment and have a number of positive effects on business.
[76] It is important to appreciate that the conclusions we have reached in relation to the weekend and public holiday penalty rates in the Hospitality and Retail Awards is largely based on the circumstances relating to these particular awards. The Hospitality and Retail sectors have a number of characteristics which distinguish them from other industries.
[77] The distinguishing characteristics of the Hospitality and Retail sectors are alluded to in the PC Final Report, where it explains the rationale for focussing on the ‘HERRC’ (hospitality, entertainment, retail, restaurants and cafes) industries.
‘… 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.’ 22 (footnotes omitted)
[78] The data on weekend work shows that workers in the Retail and Hospitality sectors are more likely to work on weekends than workers in other industries. As shown in Table 3A below (see [457]).
Table 3A 23
Proportion of employees who work on weekends, by industry
Industry | 2002–2008 | 2009–2016 |
Accommodation and food services | 58.6 | 60.8 |
Retail trade | 44.4 | 47.6 |
All employees | 25.9 | 27.5 |
[79] The sections that provide an overview of the Retail and Hospitality sectors (see Chapters 7.1 and 8.1) also highlight some differences between these two sectors and other industries. Both industries are much more likely to comprise small businesses (employing fewer than 20 persons) than across all industries and fewer businesses in both the Hospitality and Retail sectors operate on weekdays only, with a greater proportion working 6 or 7 days a week (an average of 6.2 to 6.7 days a week) than businesses across all industries (an average of 5.8 days) as shown in Table 3B below.
Table 3B 24
Structure and operations, 2014
Retail trade | Accommodation and food services | All industries | |
(%) | (%) | (%) | |
Operating days | |||
Weekdays only | 18.9 | 8.6 | 48.8 |
Weekdays and Saturday | 37.1 | 5.3 | 17.5 |
Some weekdays and weekend | 2.8 | 5.4 | 2.3 |
Operating 7 days | 40.6 | 80.5 | 31.1 |
Other | np | np | 0.4 |
100.0 | 100.0 | 100.0 | |
Average number of operating days per week | 6.2 | 6.7 | 5.8 |
Average years of operation under current ownership | 18.9 | 15.6 | 18.5 |
Note: np = not published due to estimate having a relative standard error of greater than 50 per cent.
[80] Data on the characteristics of employees in these industries presented in Chapters 7.1 and 8.1 show that they are more likely to be female, younger (under 25 years), work part-time hours, be employed on a casual basis and be award reliant than employees in other industries. Employees in these industries are also more likely to be low paid.
[81] Given the distinguishing characteristics of the Hospitality and Retail sectors, the decisions we have made in respect of the Hospitality and Retail Awards provide no warrant for the variation of penalty rates in other modern awards. Each case must be determined on its merits. We note the views expressed in the PC Final Report in this regard:
‘There is no case for common penalty rates across all industries The Commission is not recommending a reduction in the Sunday penalty rates beyond HERRC. Regulated penalty rates as currently constructed for essential services and many other industries are justifiable. The original justifications have not altered materially: they align with working arrangements that often involve rotating shifts across the whole week, are not likely to reduce service availability meaningfully, are commensurate with the skills of the employees, and are unlikely to lead to job losses.’ 25
[82] We deal with the implementation of our decision in Chapter 11: Transitional Arrangements.
[83] In the numerous submissions before us little attention was given to the implementation of any variations to Sunday penalty rates arising from these proceedings. One exception was in the PC Final Report which recommends that 12 months’ notice of any change be given, rather than an extended transition process involving staggered small changes to Sunday penalty rates. We also note that some submissions also alluded to the need to protect the take home pay of workers affected by any changes to penalty rates.
[84] A substantial proportion of award-reliant employees covered by these modern awards are low paid and the reductions in Sunday penalty rates we have determined are likely to reduce the earnings of those employees who currently work on Sundays. As observed in the Productivity Commission Inquiry Report: Workplace Relations Framework (PC Final Report), in general, most existing employees would probably face reduced earnings as it is improbable that, as a group, existing workers’ hours on Sundays would rise sufficiently to offset the income effects of penalty rate reductions.
[85] The evidence of the SDA and United Voice lay witnesses puts a human face on the data and provides an eloquent individual perspective on the impact of the award variations. Many of these employees earn just enough to cover weekly living expenses, saving money is difficult and unexpected expenses produce considerable financial distress. The immediate implementation of all of the variations we propose would inevitably cause some hardship to the employees affected, particularly those who work on Sundays. There is plainly a need for appropriate transitional arrangements to mitigate such hardship.
[86] We have concluded that appropriate transitional arrangements are necessary to mitigate the hardship caused to employees who work on Sundays. We have not reached a concluded view as to the form of those transitional arrangements and we propose to seek submissions from interested parties as to that issue. For the assistance of those parties who wish to make submissions as to the form of the transitional arrangements we have expressed the following provisional views:
(i) Contrary to the views expressed by the Productivity Commission we do not think it appropriate to delay making any changes to Sunday penalty rates for 12 months, as it would impose an unnecessary delay on the introduction of any reduction in Sunday penalty rates and would give rise to a sharp fall in earnings for some affected employees at the end of the 12 month period.
(ii) If ‘take home pay orders’ are an available option then they may mitigate the effects of a reduction in Sunday penalty rates. But we do not favour any general ‘red circling’ term which would preserve the current Sunday penalty rates for all existing employees.
(iii) The reductions in Sunday penalty rates should take place in a series of annual adjustments on 1 July each year (commencing 1 July 2017) to coincide with any increases in modern award minimum wages arising from Annual Wage Review decisions.
(iv) As to the number of annual instalments, the 5 annual instalment process which accompanied the making of the modern awards is too long for present purposes. It is likely that at least 2 instalments will be required (but less than 5 instalments). The period of adjustment required will depend on the extent of the reduction in Sunday penalty rates, the availability of ‘take home pay orders’ and the circumstances applying to each modern award.
[87] The changes to public holiday penalty rates will take effect on 1 July 2017.
[88] We deal with the next steps in these proceedings in Chapter 12. The matters addressed include:
- transitional arrangements having regard to the impact of the Sunday penalty reductions for some employees;
- the potential further review of the Clubs Award, the Restaurants Award and other retail modern awards;
- the terminology of penalty rates; and
- the potential for loaded rates in retail modern awards.
[89] As to the last matter, a ‘loaded rate’ in this context refers to a rate which is higher than the applicable minimum hourly rate specified in the modern award and is paid for all hours worked instead of certain penalty rates (such as the penalty rates for Saturday and Sunday work).
[90] It seems to us that, subject to appropriate safeguards, schedules of ‘loaded rates’ may make awards simpler and easier to understand, consistent with the considerations in s.134(1)(g). Schedules of ‘loaded rates’ would also allow small businesses to access additional flexibility without the need to enter into an enterprise agreement.
[91] We also note that the Fair Work Ombudsman (FWO) has reported significant levels of non-compliance in the Hospitality and Retail awardswhich are before us. It appears from the various FWO reports we mention in Chapter 12 that some businesses in the Hospitality and Retail sectors already provide ‘flat’ (or loaded) rates of pay, in order to simplify their payroll process, but they underestimate the additional premium (or loading) required in order to compensate employees for the loss of penalty rates, resulting in non-compliance. The insertion of ‘loaded rates’ schedules in these modern awards may have a positive effect on award compliance.
[92] In raising this matter, we are alive to the potential complexity involved in the task of developing schedules appropriately for loaded rates. It has to be borne in mind that any loaded rate will remain part of the safety net and will have to be fair and relevant. Determining an appropriate loaded rate would not be straightforward. For example, an employee who worked the vast majority of their hours on a weekend or late at night, when a penalty rate would apply, would require a higher loaded rate than, say, an employee who worked the vast majority of their hours during the ordinary spread of hours, Monday to Friday.
[93] Any loaded rate and the associated roster configuration, would, of course, need to be relevant to the needs of industry and employees. Accordingly, there would be benefit in further engagement with interested parties as to the dominant roster patterns in the relevant industries so that appropriate rates can be developed.
[94] We envisage that the development of loaded rates will be an iterative process undertaken in consultation with interested parties. That process will commence after we have determined the transitional arrangements in respect of the reductions in Sunday penalty rates.
3. The Legislative Framework
3.1 Statutory construction – general observations
[95] This part of our decision deals with the legislative provisions relevant to these proceedings. We begin by making some general observations about the task of statutory construction.
[96] The starting point is to construe the words of a statute according to their ordinary meaning having regard to their context and legislative purpose. Context includes the existing state of the law and the mischief the legislative provisions was intended to remedy. 26 Regard may also be had to the legislative history in order to work out what a current legislative provision was intended to achieve.27
[97] Each provision of the FW Act must be read in context by reference to the language of the FW Act as a whole. 28 The relevant legislative context may operate to limit a word or expression of wide possible connotation.29 The literal meaning (or the ordinary grammatical meaning) of the words of a statutory provision may be displaced by the context and legislative purpose, as the majority observed in Project Blue Sky:
‘… the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.’ 30
[98] The provisions of an act must be read together such that they fit with one another. This may require a provision to be read more narrowly than it would if it stood on its own. 31
[99] More recently, in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue 32 (Alcan)the High Court described the task of legislative interpretation in the following terms:
‘This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.’
[100] We now turn to the specific provisions relevant to these proceedings.
3.2 The relevant statutory provisions
[101] Section 156 of the FW Act provides that the Commission must conduct a 4 yearly review of modern awards as soon as practicable after 1 January 2014. 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.
[102] The requirement in s.156(5) to review each modern award ‘in its own right’, is intended to ensure that the Review is conducted ‘by reference to the particular terms and the particular operation of each particular award rather than by a global assessment based upon generally applicable considerations’. 33 However, while the review of each modern award must focus on the particular terms and operation of the particular award, this does not mean that the review of a modern award is to be confined to a single holistic assessment of all of its terms.34 In these proceedings we are considering whether the relevant modern awards achieve the modern awards objective in relation to the penalty payments they prescribe for working at certain times.
[103] Subsection 156(5) provides that in the Review each modern award is reviewed in its own right, however, this does not prevent the Commission from reviewing 2 or more modern awards at the same time.
[104] The Commission must be constituted by a Full Bench to conduct the Review and to make determinations and modern awards in the Review (see ss.616(1), (2) and (3) of the FW Act). Section 582 of the FW Act provides that the President may give directions about the conduct of the Review.
[105] In addition to s.156 a range of other provisions in the FW Act are relevant to the Review: s.3 (objects of the Act); s.55 (interaction with the NES); Part 2-2 (the NES); s.134 (the modern awards objective); s.135 (special provisions relating to modern award minimum wages); Divisions 3 (terms of modern awards) and 6 (general provisions relating to modern award powers) of Part 2-3; s.284 (the minimum wages objective); s.577 (performance of functions and exercise of powers of the Commission); s.578 (matters the Commission must take into account in performing functions and exercising powers); and Division 3 of Part 5-1 (conduct of matters before the Commission).
[106] The general provisions relating to the performance of the Commission’s functions apply to the Review. Sections 577 and 578 are particularly relevant in this regard. Section 577 states:
‘FWC must perform its functions and exercise its powers in a manner that:
(a) is fair and just; and
(b) is quick, informal and avoids unnecessary technicalities; and
(c) is open and transparent; and
(d) promotes harmonious and cooperative workplace relations.
Note: The President also is responsible for ensuring that FWC performs its functions and exercises its powers efficiently etc. (see section 581).’
[107] Section 578 states:
‘In performing functions or exercising powers, in relation to a matter, under a part of this Act (including this Part), FWC must take into account:
(a) the objects of this Act, and any objects of the part of this Act; and
(b) equity, good conscience and the merits of the matter; and
(c) the need to respect and value the diversity of the work force by helping to prevent and eliminate discrimination on the basis of race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.’
[108] As stated in s.578(a), in performing functions and exercising powers under a part of the FW Act (including the Review function under Part 2-3 Modern Awards) the Commission must take into account the objects of the FW Act and any particular objects of the relevant part. The object of Part 2-3 is expressed in s.134, the modern awards objective. The object of the FW Act is set out in s.3, as follows:
‘3 Object of this Act
The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:
(a) providing workplace relations laws that are fair to working Australians, are flexible for businesses, promote productivity and economic growth for Australia’s future economic prosperity and take into account Australia’s international labour obligations; and
(b) ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders; and
(c) ensuring that the guaranteed safety net of fair, relevant and enforceable minimum wages and conditions can no longer be undermined by the making of statutory individual employment agreements of any kind given that such agreements can never be part of a fair workplace relations system; and
(d) assisting employees to balance their work and family responsibilities by providing for flexible working arrangements; and
(e) enabling fairness and representation at work and the prevention of discrimination by recognising the right to freedom of association and the right to be represented, protecting against unfair treatment and discrimination, providing accessible and effective procedures to resolve grievances and disputes and providing effective compliance mechanisms; and
(f) achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action; and
(g) acknowledging the special circumstances of small and medium-sized businesses.’
[109] In conducting the Review the Commission is able to exercise its usual procedural powers, contained in Division 3 of Part 5-1 of the FW Act. Importantly, the Commission is not bound by the rules of evidence and procedure (s.591) and may inform itself in relation to any matter before it in such manner as it considers appropriate (s.590(1)).
[110] The Review is to be distinguished from inter partes proceedings. Section 156 imposes an obligation on the Commission to review all modern awards and each modern award must be reviewed in its own right. The Review is conducted on the Commission’s own motion and is not dependent upon an application by an interested party. Nor is the Commission constrained by the terms of a particular application. 35 The Commission is not required to make a decision in the terms applied for (s.599) and, in a Review, may vary a modern award in whatever terms it considers appropriate, subject to its obligation to accord interested parties procedural fairness and the application of relevant statutory provisions, such as ss.134, 138 and 578.
[111] The scope of the Review was considered in the 4 Yearly Review of Modern Awards: Preliminary Jurisdictional Issues Decision. 36 We adopt and apply that decision and in particular the following propositions:
(i) The Review is broader in scope than the Transitional Review of modern awards completed in 2013.
(ii) In conducting the Review the Commission will have regard to the historical context applicable to each modern award.
(iii) 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.
(iv) Variations to modern awards should be founded on merit based arguments. The extent of the argument and material required will depend on the circumstances.
[112] We now turn to the relevance of the ‘modern awards objective’ to the Review.
3.3 The modern awards objective
(i) General observations
[113] The modern awards objective applies to the performance or exercise of the Commission’s modern award powers, which are defined to include the Commission’s functions or powers under Part 2-3 of the FW Act. The Review function is set out in s.156, which is in Part 2-3 and so will involve the performance or exercise of the Commission’s modern award powers. It follows that the modern awards objective applies to the Review.
[114] 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).’
[115] 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 sections 134(1)(a) to (h) (the s.134 considerations). The objective is very broadly expressed. 37 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. 38 No particular primacy is attached to any of the s.134 considerations and not all of the matters identified will necessarily be relevant in the context of a particular proposal to vary a modern award.
[116] While the Commission must take into account the s.134 considerations, the relevant question is whether the modern award, together with the NES, provides a fair and relevant minimum safety net of terms and conditions. As to the proper construction of the expression ‘a fair and relevant minimum safety net of terms and conditions’ we would make three observations.
[117] First, fairness in this context is to be assessed from the perspective of the employees and employers covered by the modern award in question. So much is clear from the s.134 considerations, a number of which focus on the perspective of the employees (e.g. s.134(1)(a) and (da)) and others on the interests of the employers (e.g. s.134(1)(d) and (f)). Such a construction is also consistent with authority. In Shop Distributive and Allied Employees Association v $2 and Under (No. 2) 39Giudice J considered the meaning of the expression ‘a safety net of fair minimum wages and conditions of employment’ in s.88B(2) of the Workplace Relations Act 1996 (Cth) (the WR Act). That section read as follows:
‘88B Performance of Commission’s functions under this Part …
(2) In performing its functions under this Part, the Commission must ensure that a safety net of fair minimum wages and conditions of employment is established and maintained, having regard to the following:
(a) the need to provide fair minimum standards for employees in the context of living standards generally prevailing in the Australian community;
(b) economic factors, including levels of productivity and inflation, and the desirability of attaining a high level of employment;
(c) when adjusting the safety net, the needs of the low paid.’
[118] As to the assessment of fairness in this context his Honour said:
‘In relation to the question of fairness it is of course implicit that the Commission should consider fairness both from the perspective of the employees who carry out the work and the perspective of employers who provide the employment and pay the wages and to balance the interests of those two groups. This must be done in the context of any broader economic or other considerations which might affect the public interest.’ 40
[119] While made in a different (albeit similar) statutory context the above observation is apposite to our consideration of what constitutes a ‘fair … safety net’ in giving effect to the modern awards objective. We would also endorse the following observation by the Full Bench in the Equal Remuneration Decision 2015:
‘We consider, in the context of modern awards establishing minimum rates for various classifications differentiated by occupation, trade, calling, skill and/or experience, that a necessary element of the statutory requirement for ‘fair minimum wages’ is that the level of those wages bears a proper relationship to the value of the work performed by the workers in question.’ 41
[120] Second, the word ‘relevant’ is defined in the Macquarie Dictionary (6th Edition) to mean ‘bearing upon or connected with the matter in hand; to the purpose; pertinent’. In the context of s.134(1) we think the word ‘relevant’ is intended to convey that a modern award should be suited to contemporary circumstances. As stated in the Explanatory Memorandum to what is now s.138:
‘527 … the scope and effect of permitted and mandatory terms of a modern award must be directed at achieving the modern awards objective of a fair and relevant safety net that accords with community standards and expectations.’ (emphasis added)
[121] Finally, as to the expression ‘minimum safety net of terms and conditions’, the conception of awards as ‘safety net’ instruments was introduced by the Industrial Relations Reform Act 1993 (Cth) (the 1993 Reform Act). The August 1994 Review of Wage Fixing Principles decision 42summarised the changes made to the legislative framework by the 1993 Reform Act. In particular, the Commission noted that:
‘The Act now clearly distinguishes between the arbitrated award safety net and the bargaining stream. It intends that the actual wages and conditions of employment of employees will be increasingly determined through bargaining at the workplace or enterprise.
Under the Act the Commission, while having proper regard to the interests of the parties and the wider community, is now required to ensure, so far as possible, that the award system provides for ‘secure, relevant and consistent wages and conditions of employment’ (s 90AA(2)) so that it is an effective safety net ‘underpinning direct bargaining’ (s 88A(b)).’
[122] Relevantly for present purposes, the 1993 Reform Act inserted s.88A into the Industrial Relations Act 1988 (Cth) (the IR Act). Section 88A set out the objects to Part VI – Dispute Resolution and Settlement, in the following terms:
‘88A The objects of this Part are to ensure that:
(a) wages and conditions of employment are protected by a system of enforceable awards established and maintained by the Commission; and
(b) awards act as a safety net of fair minimum wages and conditions of employment; and
(c) awards are simplified and suited to the efficient performance of work according to the needs of particular workplaces or enterprises; and
(d) the Commission’s functions and powers in relation to making and varying awards are performed and exercised in a way that encourages the making of agreements between employers and employees at the workplace or enterprise level.’ (emphasis added)
[123] The protective nature of the award safety net at that time is apparent from the language used in s.88A(a) and (b). 43
[124] The Workplace Relations and Other Legislation Amendment Act 1996 (WROLA Act) renamed the IR Act the WR Act and, among other things, restricted the range of matters that would be dealt with in federal awards (see s.89A WR Act) and repealed what had been Part VI C of the IR Act, which dealt with ‘Paid Rates Awards’. The objects of Part VI were amended but the characterisation of awards as a ‘safety net’ which ‘protected’ wages and conditions of employment, remained. It is not necessary to canvass the various legislative amendments from the WROLA Act to the FW Act.
[125] The objects of the FW Act are set out in s.3 (see [108]), relevantly s.3(b) speaks of:
‘ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and minimum wage orders.’
[126] It is apparent from the scheme of the FW Act that modern awards and the NES ‘underpin’ enterprise agreements, through the operation of s.55 and the ‘better off overall test’ (s.186(2)(d) and s.193). 44 Under s.57 a modern award does not apply to the extent that an enterprise agreement applies to a particular employment relationship, even where the award deals with matters not covered in the agreement.45
[127] In their reply submission the Australian Chamber of Commerce and Industry, Australian Business Industrial and the New South Wales Business Chamber (the joint employer reply submission) submit that the reference to a ‘minimum safety net’ in s.134(1) means the ‘least … possible’ to create a ‘minimum floor’:
‘The notion of a ‘safety’ ‘net’ is effectively the creation of a floor ensuring employees are ‘caught’ preventing them from being exposed to ‘hurt, injury, danger or risk’.
The addition of the term ‘minimum’ reinforces the level that this floor is calibrated to: namely, ‘… the least quantity or amount possible …’
The creation of the minimum safety net by sections 134 and 284 of the FW Act illuminates what the phrase ‘only to the extent necessary’ in s 138 relates to.
That is, section 138 is dictating that the Commission may only include terms in a modern award to the extent necessary to create a minimum floor. Once this minimum floor is created, section 138 restrains the Commission from going any further irrespective of what historically would be called the ‘general industrial merits of the case’.’ 46
[128] The proposition advanced relies on dictionary definitions of some individual words within s.134(1). But the argument advanced pays scant regard to the fact the modern awards objective 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’. The joint employer reply submission gives insufficient weight to the statutory directive that the minimum safety net be ‘fair and relevant’. Further, in giving effect to the modern awards objective the Commission is required to take into account the s.134 considerations, one of which is ‘relative living standards and the needs of the low paid’ (s.134(1)(a)). The matters identified tell against the proposition advanced in the joint employer reply submission.
[129] We conclude our general observations about the modern awards objective by noting that the nature of modern awards under the FW Act is quite different from the awards made under previous legislative regimes. 47 In times past awards were made in settlement of industrial disputes. The content of these instruments was determined by the constitutional and legislative limits of the tribunal’s jurisdiction; the matters put in issue by the parties (i.e. the ‘ambit’ of the dispute) and the policies of the tribunal as determined from time to time in wage fixing principles or test cases. An award generally only bound the employers, employer organisations and unions who had been parties to the industrial dispute that gave rise to the making of the award and were named as respondents. Modern awards are very different to awards of the past.
[130] Modern awards are not made to prevent or settle industrial disputes between particular parties. Rather, the purpose of modern awards, together with the NES and national minimum wage orders, is to provide a safety net of fair, relevant and enforceable minimum terms and conditions of employment for national system employees (see ss.3(b) and 43(1)). They are, in effect, regulatory instruments that set minimum terms and conditions of employment for the employees to whom the modern award applies (see s.47).
[131] Nor are there named respondents to modern awards. Modern awards apply to, or cover, certain persons, organisations and entities (see ss.47 and 48), but these persons, organisations and entities are not ‘respondents’ to the modern award in the sense that there were named respondents to awards in the past. The nature of this shift is made clear by s.158 which sets out who may apply for the making of a determination making, varying or revoking a modern award. Under previous legislative regimes the named respondents to a particular award would automatically have the requisite standing to make such applications; that is no longer the case. 48
[132] Under the FW Act modern awards form part of a minimum safety net which provides ‘fair, relevant and enforceable minimum terms and conditions’ of employment to national system employees. As such, modern awards, together with the NES and national minimum wage orders, provide a minimum set of terms and conditions that must be provided to the employees to whom a modern award applies. And, as we have mentioned, modern awards also underpin enterprise bargaining.
(ii) Section 138 and the modern awards objective
[133] Section 138 of the FW Act emphasises the importance of the modern awards objective in the following terms:
‘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.’
[134] To comply with s.138 the terms included in modern awards must be ‘necessary to achieve the modern awards objective’.
[135] In Shop, Distributive and Allied Employees Association v National Retail Association (No.2) 49 Tracey J considered the proper construction of the expression ‘the Commission is satisfied that making [a determination varying a modern award] … is necessary to achieve the modern awards objective’, in s.157(1). His Honour held:
‘The statutory foundation for the exercise of FWA’s power to vary modern awards is to be found in s 157(1) of the Act. The power is discretionary in nature. Its exercise is conditioned upon FWA being satisfied that the variation is “necessary” in order “to achieve the modern awards objective”. That objective is very broadly expressed: FWA must “provide a fair and relevant minimum safety net of terms and conditions” which govern employment in various industries. In determining appropriate terms and conditions regard must be had to matters such as the promotion of social inclusion through increased workforce participation and the need to promote flexible working practices.
The subsection also introduced a temporal requirement. FWA must be satisfied that it is necessary to vary the award at a time falling between the prescribed periodic reviews.
The question under this ground then becomes whether there was material before the Vice President upon which he could reasonably be satisfied that a variation to the Award was necessary, at the time at which it was made, in order to achieve the statutory objective …
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 carry 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. It was open to the Vice President to form the opinion that a variation was necessary.’ 50
[136] The above observation – in particular the distinction between that which is ‘necessary’ and that which is merely desirable – is apposite to our consideration of s.138. Further, we agree with the observation that reasonable minds may differ as to whether a particular award term or proposed variation is necessary (within the meaning of s.138), as opposed to merely desirable. It seems to us that 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. 51
[137] The SDA and United Voice submit that the terms of s.138 require that the Commission be satisfied that the variations proposed by the various employer parties are necessary to achieve the modern awards objective. 52The submission put focuses attention on the particular variation proposed, rather than on the terms of the modern award, as varied.
[138] We do not think the Unions’ contention is correct. In the Preliminary Jurisdictional Issues decision the Full Bench considered what had to be demonstrated by the proponent of an award variation and concluded that:
‘To comply with s138 the formulation of terms which must be included in modern awards or terms which are permitted to be included in modern awards must be terms ‘necessary to achieve the modern awards objective’… In the Review the proponent of a variation to a modern award must demonstrate that if the modern award is varied in the manner proposed then it would only include terms to the extent necessary to achieve the modern awards objective.’ 53
[139] The above proposition is supported by the terms of s.138 and the legislative context. Section 138 requires that ‘[A] modern award may include terms … only to the extent necessary to achieve the modern awards objective’. The section focuses attention on the terms of a modern award, rather than on the terms of a proposed variation. Further, as we have mentioned, the jurisdictional basis for the Review is s.156. Section 157 deals with the variation of modern awards outside the system of 4 yearly reviews. Section 157(1) states, relevantly:
‘The FWC may:
(a) Make a determination varying a modern award … if the FWC is satisfied that making the determination … outside the system of 4 yearly reviews of modern awards is necessary to achieve the modern awards objective.’ (emphasis added)
[140] Section 157(1) makes express reference to the Commission being satisfied that the ‘determination varying a modern award’ is necessary to achieve the modern awards objective. There is no such express reference in either s.138 or s.156. The difference in the language used in ss.138, 156 and 157 tells against the proposition advanced by the SDA and United Voice.
[141] Contrary to the Unions’ contention the Commission’s task in the Review is to make a finding as to 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. The approach outlined is supported by the terms of s.138 itself, the legislative context and the judgement of the Full Court of the Federal Court in National Retail Association v Fair Work Commission. 54
[142] We now turn to the application of the modern awards objective to the issues raised in these proceedings.
(iii) The modern awards objective and weekend penalty rates
[143] Historically industrial tribunals have expressed the rationale for weekend penalty payments in terms of both the need to compensate employees for working outside ‘normal hours’ (the compensatory element) and to deter employers from scheduling work outside ‘normal’ hours (the deterrence element). 55 For example, in the 1947 Weekend Penalty Rates case Drake-Brockman ACJ and Sugarman J made the following observation about the expression ‘penalty rate’:
1382 SDA final submission, 21 March 2016, at para. 234
1383 SDA final submission, 21 March 2016, at para. 235
1384 SDA final submission, 21 March 2016, at para. 236
1385 [2013] FWCFB 4000 at [441]
1386 Exhibit SDA 32
1387 Exhibit SDA 33, Exhibit SDA 34
1388 Exhibit SDA 31
1389 Exhibit SDA 35, Exhibit SDA 36
1390 Exhibit SDA 36
1391 Exhibit SDA 39, Exhibit SDA 40
1392 Exhibit SDA 43
1393 Exhibit SDA 43
1394 Exhibit Retail 2
1395 Exhibit Retail 2
1396 Exhibit Retail 2
1397 Exhibit Retail 2 at p. 95
1398 Exhibit Retail 2
1399 Exhibit SDA 32
1400 SDA final submission, 21 March 2016, at para. 326
1401 Exhibit SDA 32 at pp. 19–22
1402 Exhibit SDA 32 at p. 27
1403 Exhibit SDA 32 at pp. 27–28
1404 Exhibit SDA 32 at pp. 27–29
1405 Exhibit SDA 32 at pp. 29–33
1406 Exhibit SDA 32 at pp. 33–36
1407 Exhibit SDA 32 at pp. 37–38
1408 ARA and others final submission, 12 February 2016, at para. 85(a); Exhibit Retail 2 at pp. 29–30
1409 ARA and others final submission, 12 February 2016, at para. 85(b); Exhibit Retail 2 at p. 86
1410 ARA and others final submission, 12 February 2016, at para. 85(c); Exhibit Retail 2 at p. 87
1411 ACCI, ABI and NSWBC final submission, 2 February 2016, at para. 16.2; Exhibit Retail 2 at p. 12
1412 ACCI, ABI and NSWBC final submission, 2 February 2016, at para. 16.3; Exhibit Retail 2 at p. 12
1413 SDA final submission, 21 March 2016, at paras 192–193
1414 Common Exhibit 1 at p. 425, Figure 11.1
1415 Common Exhibit 1 at p. 425; unpublished data provided to the Productivity Commission from the ABS and based on Campbell J & Chen L (2015), Improved Time varying Day Adjustment in SEASABS, ABS, Canberra
1416 Common Exhibit 1 at p. 426, Figure 11.2
1417 Common Exhibit 1 at p. 426; data from Aztec (2014) and information provided by the Shopping Centre Council of Australia (sub. DR342, p. 1) for supermarkets and shopping centres respectively
1418 Common Exhibit 1 at p. 462
1419 Common Exhibit 1 at p. 463
1420 Common Exhibit 1 at p. 462
1421 Exhibit Retail 2 at pp. 60, 73
1422 Exhibit Retail 2 at p. 59
1423 Exhibit Retail 2 at p. 82
1424 Exhibit Retail 2 at p. 57
1425 Exhibit Retail 2 at p. 77
1426 Exhibit Retail 2 at p. 75
1427 ACCI, ABI and NSWBC final submission, 2 February 2016, at para. 17.9; Exhibit Retail 2 at pp. 63, 65
1428 ARA and others final submission, 12 February 2016, at paras 103(a), 104; Exhibit Retail 2 at pp. 63–72
1429 ARA and others final submission, 12 February 2016, at para. 103(f); Exhibit Retail 2 at p. 60
1430 ARA and others final submission, 12 February 2016, at para. 106; Exhibit Retail 2 at pp. 76, 91
1431 ARA and others final submission, 12 February 2016, at para. 107; Exhibit Retail 2 at pp. 77–78. Also ACCI, ABI and NSWBC final submission, 2 February 2016, at para. 22.5
1432 ARA and others final submission, 12 February 2016, at para. 109; Exhibit Retail 2 at p. 75
1433 ARA and others final submission, 12 February 2016, at para. 116; Exhibit Retail 2 at p. 69
1434 ACCI, ABI and NSWBC final submission, 2 February 2016, at para. 17.10; Exhibit Retail 2 at p. 63
1435 ACCI, ABI and NSWBC final submission, 2 February 2016, at paras 17.12–17.13; Exhibit Retail 2 at p. 63
1436 ARA and others final submission, 12 February 2016, at paras. 133–134; Exhibit Retail 2 at pp. 64–65
1437 ARA and others final submission, 12 February 2016, at paras 38–39; Exhibit Retail 2 at p. 74, Figure 52
1438 ARA and others final submission, 12 February 2016, at para. 41; Exhibit Retail 2 at p. 67
1439 ARA and others final submission, 12 February 2016, at para. 42; Exhibit Retail 2 at p. 66
1440 Sands Cross-examination, 25 September 2015, PN9907
1441 Sands Cross-examination, 25 September 2015, PN9917–PN9924
1442 Sands Cross-examination, 25 September 2015, PN10028
1443 Sands Cross-examination, 25 September 2015, PN10031–PN10033
1444 See SDA Final Submissions, 21 March 2016 at paras 186–198; Also note that some of these submissions were subsequently withdrawn: see Transcript at para 27526
1445 SDA final submission, 21 March 2016, at para. 190
1446 SDA final submission, 21 March 2016, at para. 191
1447 SDA final submission, 21 March 2016, at para. 196; Sands Cross-examination, 25 September 2015, PN10034–PN10035
1448 SDA final submission, 21 March 2016, at para. 197
1449 SDA final submission, 21 March 2016, at para. 194
1450 Exhibit Retail 2 at p. 62
1451 Exhibit Retail 2 at p. 75
1452 Exhibit Retail 2 at pp. 65, 68
1453 Exhibit Retail 2 at p. 66
1454 Exhibit Retail 2 at pp. 69–70
1455 Exhibit Retail 2 at p. 85
1456 Exhibit Retail 2 at p. 86
1457 Exhibit Retail 2 at p. 86
1458 Exhibit Retail 2 at p. 86
1459 Exhibit Retail 2 at p. 87
1460 Exhibit Retail 2 at pp. 87–88
1461 Exhibit Retail 2 at p. 88
1462 ARA and others final submission, 12 February 2016, at para. 84(a); Exhibit Retail 2 at pp. 85–86
1463 ARA and others final submission, 12 February 2016, at para. 84(b); Exhibit Retail 2 at p. 86
1464 ARA and others final submission, 12 February 2016, at para. 84(c); Exhibit Retail 2 at p. 86
1465 ARA and others final submission, 12 February 2016, at para. 84(d); Exhibit Retail 2 at p. 86
1466 ARA and others final submission, 12 February 2016, at para. 84(e); Exhibit Retail 2 at pp. 86, 92–93
1467 ARA and others final submission, 12 February 2016, at para. 84(f); Exhibit Retail 2 at p. 86
1468 ARA and others final submission, 12 February 2016, at para. 84(g); Exhibit Retail 2 at p. 86
1469 ARA and others final submission, 12 February 2016, at para. 84(g); Exhibit Retail 2 at p. 73
1470 ARA and others final submission, 12 February 2016, at para. 84(h); Exhibit Retail 2 at pp. 61, 86, 89
1471 ARA and others final submission, 12 February 2016, at para. 90; Exhibit Retail 2 at p. 91
1472 ARA and others final submission, 12 February 2016, at paras 92–93; Exhibit Retail 2 at pp. 90–91
1473 ARA and others final submission, 12 February 2016, at para. 95; Exhibit Retail 2 at p. 81
1474 ACCI, ABI and NSWBC final submission, 2 February 2016, at paras 27.64; Exhibit Retail 2 at p. 60–61
1475 Transcript, at PN9890–PN9891
1476 Transcript, at PN9943–PN9952
1477 See Common Exhibit 1 at pp. 424–425; Barron: Exhibit Retail 3, at paras 14 and 15; Goddard: Exhibit Retail 4, at paras 19 and 21; d’Oreli: Exhibit 8, at para 13
1478 For example, Goddard: Exhibit Retail 4 at paras 11 and 12; Gough: Exhibit Retail 5 at para 11, Antonieff: Exhibit Retail 6 at para 9, Daggett: Exhibit Retail 7 at para 9; and d’Oreli: Exhibit Retail 8 at para 11.
1479 For example, Barron: Exhibit Retail 3 at para 12; Goddard: Exhibit Retail 4 at para 13, and d’Oreli: Exhibit Retail 8 at para 12
1480 For example, Barron: Exhibit Retail 3 at paras 12 and 18; Daggett: Exhibit Retail 7 at para 19(b)
1481 Exhibit ABI 9 at [29]
1482 To be put into this category, respondents did not need to state “wages” (see PN17528–PN17529)
1483 For example, Barron: Exhibit Retail 3 at para 12; Gough: Exhibit Retail 5 at para 19(b) and Daggett: Exhibit Retail 7 at para 19(a)
1484 For example, Barron: Exhibit Retail 3 at para 26; Antonieff: Exhibit Retail 6 at para 18(b)
1485 For example, Antonieff: Exhibit Retail 6 at para 17 and Daggett: Exhibit Retail 7 at para 19(f)
1486 For example, Barron: Exhibit Retail 3 at paras 12, 13 and 28; d’Oreli: Exhibit Retail 8 at para 14
1487 For example, Barron: Exhibit Retail 3 at paras 15 and 18; Goddard: Exhibit Retail 4 at paras 13 and 14; and d’Oreli: Exhibit Retail 8 at para 21
1488 See Antonieff: Exhibit Retail 6 at para 19 and Daggett: exhibit Retail 7 at para 21
1489 For example, Barron: Exhibit Retail 3 at paras 13, 27 and 28; Goddard: Exhibit Retail 4 at paras 31–32
1490 Transcript at PN17208
1491 Order of Catanzariti VP, 3 March 2016
1492 Exhibit SDA 32
1493 Exhibit SDA 33, Exhibit SDA 34
1494 Exhibit SDA 31
1495 Exhibit SDA 35, Exhibit SDA 36
1496 Exhibit SDA 36
1497 Exhibit SDA 39, Exhibit SDA 40
1498 Exhibit SDA 43
1499 Exhibit SDA 43
1500 Exhibit SDA 16
1501 Exhibit SDA 16 at para 14
1502 Exhibit SDA 16 at paras 13, 15 and 16
1503 Transcript at PN17946; also see PN17879–PN17918
1504 Exhibit SDA 17
1505 Exhibit SDA 17 at paras 4, 8 and 9
1506 Transcript at PN18003–PN18004
1507 Transcript at PN18034–PN18038
1508 Exhibit SDA 17 at 4 and 10
1509 Exhibit SDA 18
1510 Transcript at PN17991–17993
1511 Exhibit SDA 18
1512 Transcript at PN18087
1513 Transcript at PN18088
1514 Exhibit SDA 18 at para 6, 12 and 13
1515 Exhibit SDA 19
1516 Transcript at PN18146–PN18153
1517 Exhibit SDA 19 at paras 11, 12 and 16
1518 Transcript at PN18193
1519 Exhibit SDA 19 at paras 14 and 15
1520 Transcript at PN18156
1521 Exhibit SDA 20
1522 Transcript at PN18229
1523 Ibid at PN18232
1524 Exhibit SDA 20 at paras 7, 8, 12 and 13
1525 Transcript at PN18252–PN18254
1526 Exhibit SDA 21
1527 Transcript at PN18278
1528 Exhibit SDA 21 at para 11
1529 Transcript at PN18282
1530 Exhibit SDA 21 at para 12 and 13
1531 Exhibit SDA 22
1532 Transcript at PN18337–PN18339
1533 Exhibit SDA 22 at paras 10–12
1534 See para [1628] above
1535 ABI writing closing submissions, 2 February 2016, at para 32.5
1536 For example, Barron: Exhibit Retail 3 at para 12; Goddard: exhibit Retail 4 at para 13, and d’Oreli: Exhibit Retail 8 at para 12
1537 For example, Barron: Exhibit Retail 3 at paras 12 and 18; Daggett: Exhibit Retail 7 at para 19(b)
1538 Exhibit ABI 9 at [29]
1539 To be put into this category, respondents did not need to state “wages” (see PN17528–PN17529)
1540 For example, Barron: Exhibit Retail 3 at para 12; Gough: Exhibit Retail 5 at para 19(b) and Daggett: Exhibit Retail 7 at para 19(a)
1541 For example, Barron: Exhibit Retail 3 at para 26; Antonieff: Exhibit Retail 6 at para 18(b)
1542 For example, Antonieff: Exhibit Retail 6 at para 17 and Daggett: Exhibit Retail 7 at para 19(f)
1543 For example, Barron: Exhibit Retail 3 at paras 12, 13 and 28; d’Oreli: Exhibit Retail 8 at para 14
1544 For example, Barron: Exhibit Retail 3 at paras 15 and 18; Goddard: Exhibit Retail 4 at paras 13 and 14; and d’Oreli: Exhibit Retail 8 at para 21
1545 See Antonieff: Exhibit Retail 6 at para 19 and Daggett: exhibit Retail 7 at para 21
1546 For example, Barron: Exhibit Retail 3 at paras 13, 27 and 28; Goddard: Exhibit Retail 4 at paras 31–32
1547 Exhibit SDA 36, at p. 7 and pp. 17–18
1548 See [1567]
1549 Exhibit Retail 2 at p. 75
1550 Exhibit Retail 2 at pp. 65, 68
1551 Exhibit Retail 2 at p. 66
1552 Exhibit Retail 2 at pp. 69–70
1553 ABI written closing submissions, 2 February 2016, at para 39
1554 Transcript at PN26991–PN26994
1555 ABI Additional Submission, 2 May 2016 at para 2(a)
1556 Common Exhibit 1 at p. 497
1557 Common Exhibit 1, Vol 1, p. 497
1558 [2008] AIRCFB 550 at [83]
1559 SDA submission – 1 August 2008, pp. 1–2
1560 SDA draft award – 1 August 2008, cl. 55
1561 Ibid, cl. 58.10
1562 PGA submission – 1 August 2008
1563 PGA draft award – 1 August 2008, cl. 16.1
1564 Exposure Draft – Retail Industry Award 2010 – 12 September 2008, cl.29.2
1565 [2008] AIRCFB 717 at [84]–[92]
1566 APESMA submission – 10 October 2008, para 11
1567 PGA submission – 10 October 2008, para 39–40
1568 PGA further submission – 23 October 2008
1569 Ibid, table 1 p. 4
1570 Ibid, para 7
1571 [2008] AIRCFB 1000 at [283]–[286]
1572 Pharmacy Industry Award 2010 – published 19 December 2008
1573 PGA submissions – 29 May 2009, Part 1 – p. 4
1574 PGA submissions – 29 May 2009
1575 Award Modernisation Request Variation – 26 August 2009
1576 [2009] AIRCFB 835 at [12]
1577 [2009] AIRCFB 978 at [2]
1578 [2009] AIRCFB 978 at [17] and [23]
1579 [2010] FWAFB 662 at [10]–[12]
1580 SDA submission - award modernisation proceedings – 10 June 2016, para 38
1581 PGA submissions - award modernisation proceedings – 9 June 2016
1582 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
1583 ABS, Census of Population and Housing, 2011
1584 Exhibit PG 35
1585 Exhibit PG 35 at p. 9
1586 IBISWorld (2014), Pharmacy in Australia: in search of a remedy, IBISWorld Industry report G4271a
1587 Exhibit PG 35 at p. 11
1588 Exhibit PG 2
1589 Exhibit PG 3
1590 Exhibit PG 4
1591 Exhibit PG 5
1592 Exhibit PG 6
1593 Exhibit PG 7
1594 Exhibit PG 8
1595 Exhibit PG 9
1596 Exhibit PG 10
1597 Exhibit PG 11
1598 Exhibit PG 12
1599 Exhibit PG 13
1600 Exhibit PG 14
1601 Exhibit PG 15
1602 Exhibit PG 16
1603 Exhibit PG 17
1604 Exhibit PG 18
1605 Exhibit PG 19
1606 Exhibit PG 20
1607 Exhibit PG 22
1608 Exhibit PG 23
1609 Exhibit PG 24
1610 Exhibit PG 25
1611 Exhibit PG 22
1612 Mr Heffernan, PN13334, PN13338. Mr Chong, PN13946–13948, Logan PN15234, El-Ahmad PN14350–PN14351
1613 See for example: PN14552 and PN15162
1614 See for example: Transcript at PN12928–PN12929, PN12291–122293, PN14915–PN14916, PN14919–PN14926, PN15149, PN15175 and PN15220.
1615 See cross-examination of Mr Da Rui Transcript at PN13064; Mr Heffernan at PN13313; Mr Quinn On at PN13413; Mr Tassone at PN12167; Ms Spiro at PN14673.
1616 SDA submissions, 21 March 2016 at para 518
1617 Ibid at para 563
1618 Exhibit PG 15 at para 11
1619 Exhibit PG 9 at paras 28–29
1620 See Annexure C to the PGA’s Submissions in reply and Exhibits PG 15, 18, 20, 22 and 23
1621 Exhibit PG 22 at para 5
1622 Exhibit PG 6 at paras 12–13
1623 Exhibit PG 9 at paras 12–13 and 17
1624 Exhibit PG 12 at paras 14 and 22
1625 Exhibit PG 13 at para 18
1626 Exhibit PG 18 at paras 10 and 12
1627 Exhibit PG 19 at para 19
1628 Exhibit PG 3 at paras 12 and 16
1629 Exhibit PG 4 at paras 37 and 39
1630 Exhibit PG 5 at paras 15 and 21
1631 Exhibit PG 7 at para 21
1632 PN13532
1633 Exhibit PG 10 at paras 11–12
1634 Exhibit PG 12 at para 21
1635 Exhibit PG 14 at para 30
1636 Exhibit PG 18 at para 24
1637 Exhibit PG 22 at paras 12–13
1638 Exhibit PG 8 at paras 30–31
1639 Exhibit PG 12 at para 26
1640 Exhibit PG 13 at para 19
1641 Exhibit PG 14 at para 31
1642 Exhibit PG 20 at paras 17 and 19
1643 Exhibit PG 2 at paras 27–29 and 19 and PN12146
1644 PN12441
1645 Exhibit PG 3 at paras 19–20
1646 Transcript at PN12615–12616
1647 Transcript at PN12531
1648 Exhibit PG 4 at paras 31, 45 and 47
1649 PN12977 and PN12978
1650 Exhibit PG 6 at paras 17–18
1651 Exhibit PG 8 at paras 33–35
1652 Exhibit PG 9 at paras 32–34
1653 Exhibit PG 10 at para 21 and 27
1654 Exhibit PG 11 at paras 25–26 and PN14297
1655 Exhibit PG 12 at paras 32 and 34
1656 PN14684
1657 Exhibit PG 15 at paras 24–25
1658 Exhibit PG 16 at para 30
1659 PN14921
1660 Exhibit PG 17 at para 17
1661 Exhibit PG 19 at paras 22–23
1662 Exhibit PG 20 at paras 2223
1663 Exhibit PG 22 at paras 17–18
1664 Exhibit PG 5 at paras 23–24
1665 Exhibit PG 6 at paras 17–18
1666 Exhibit PG 8 at paras 33–35
1667 Exhibit PG 10 at para 21 and 27
1668 Exhibit PG 12 at paras 32 and 34
1669 Exhibit PG 14 at paras 36–37
1670 Exhibit PG 19 at paras 22–23
1671 Exhibit PG 20 at paras 2223
1672 Exhibit PG 22 at paras 17–18
1673 Exhibit PG 25 at p. 5
1674 Exhibits PG 29 and PG 30
1675 Exhibit PG 35
1676 Exhibit PG 34
1677 Exhibit PG 29 at para 33
1678 See Transcript at PN22292
1679 Annexure A to Exhibit PG 29
1680 Transcript at PN22314
1681 PN22323–PN22324; Exhibit SDA-37
1682 PN22330
1683 PN22268
1684 Exhibit SDA 38.
1685 Transcript at PN22374–PN22377
1686 PN22299–PN22317; PN22401–PN22431
1687 Exhibit PG29
1688 Also see Mr Armstrong’s evidence at Transcript PN22478
1689 SDA Submissions, 21 March 2016, at para 472
1690 Exhibit PG 35
1691 Exhibit SDA 33
1692 Exhibit SDA 41
1693 Exhibit PG 36
1694 Exhibit PG 36 at p. 19
1695 SDA final submission at p. 180, para. 543
1696 SDA final submission at p. 180, para. 545
1697 Transcript at PN24749
1698 Transcript at PN24753
1699 Order of Catanzariti VP, 25 February 2016
1700 Exhibit SDA 15
1701 Exhibit SDA 15 at para 8
1702 Exhibit SDA 15 at paras 7 and 8
1703 Order of Catanzariti VP, 9 March 2016
1704 Exhibit APESMA 1
1705 Exhibit APESMA 1
1706 Exhibit APESMA 1 at paras 8–9
1707 Transcript at para 19789
1708 Exhibit APESMA 1, at paras 11–12
1709 Transcript at para 19798
1710 Transcript at para 19799
1711 PGA Final Submissions at para 171
1712 PGA Final Submissions at para 174
1713 Ibid at para 177
1714 PC Final Report at p. 465
1715 See Exhibits PG 2, PG 4, PG 5, PG 7–PG 15 and PG 18–PG 25
1716 See Exhibits PG 3, PG 6, PG 13, PG 16, PG 17, PG 18–PG 20 and PG 23
1717 PGA Final Submissions at para 179
1718 Exhibit PG 2 at para 20
1719 Shiftwork provisions are set out in clause 30 of the Retail Award
1720 Public Holidays Act 1981 (NT), s.6
1721 Statutory Holidays Act 2000 (Tas), s.5
1722 Holidays Act 1983 (Qld), s.4
1723 Queensland Government, ‘2017 Show Holiday Dates’, Public, School and Show Holidays, < accessed 20 January 2017.
1724 See Fair Work Ombudsman, ‘List of Public Holidays’, < accessed: 20 January 2017.
1725 [1990] AR (NSW) 305
1726 Ibid, at [318]
1727 Ibid, at [321]
1728 McCallum, R, Moore, M and Edwards, J (2012), Towards more productive and equitable workplaces: an evaluation of the Fair Work legislation, Australian Government, Canberra.
1729 McCallum, R, Moore, M and Edwards, J (2012), Towards more productive and equitable workplaces: an evaluation of the Fair Work legislation, Australian Government, Canberra, at p. 103.
1730 Ibid, pp. 102–103
1731 The report recommended that existing State and Territory holidays should be grandfathered: Australian Government Productivity Commission (2015), Workplace Relations Framework: Productivity Commission Inquiry Report Volume 1, No. 76, at p. 21.
1732 Australian Government Productivity Commission (2015), Workplace Relations Framework: Productivity Commission Inquiry Report Volume 1, No. 76, at p. 55, Recommendation 16.2; also at p. 540, Recommendation 16.2.
1733 The report recommended that sick, annual or other forms of existing leave entitlements that applied on the date of the new State public holiday should still apply: Australian Government Productivity Commission (2015), Workplace Relations Framework: Productivity Commission Inquiry Report Volume 1, No. 76, at p. 21.
1734 Exhibit ABI1, at [45]
1735 Ibid
1736 AHA and AAA submissions, 3 February 2016, at [48]
1737 AHA and AAA submissions, 3 February 2016, at [333]–[334]
1738 United Voice closing submissions, 21 March 2016, at [415]
1739 Common Exhibit 1 at p. 503
1740 Common Exhibit 1
1741 Print K7601, 6 May 1993
1742 [2013] FWCFB 2168
1743 [2013] FWCFB 2168 at [109]–[112]
1744 Print L4534, 4 August 1994 (Hancock ADP, MacBean SDP and O’Shea C) on p. 19
1745 Written closing submissions filed on behalf of ACCI, NSWBC and ABI, 2 February 2016
1746 See transcript at PN26445–PN26455 and PN26829
1747 Re: Metal, Engineering and Associated Industries Award (2000) 110 IR 247
1748 Ibid at [196]
1749 Common Exhibit 1 at p. 496
1750 Given that their skills and patterns of work are identical
1751 SDA Final Submissions – 21 March 2016, para 42
1752 $2 and under (No 1) PR926620; $2 and under (No 2) PR941526
1753 Workplace Relations Act 1996, Part XV
1754 $2 and under (No 1) PR926620
1755 Shop, Distributive & Allied Employees’ Association – Victorian Shops Interim Award 2000
1756 $2 and under (No 2) PR941526, at [123]
1757 SDA Final submissions – 21 March 2016, at paras 69–72
1758 Transcript at PN26991–PN26999 and PN27564–PN27568
1759 SDA submission – SDA submissions – right to refuse to work on a Sunday – 16 May 2016 at [3]
1760 Submissions of United Voice on the Right to Refuse Sunday Work, 16 May 2016 at para 5
1761 Common Exhibit 1 at pp. 480–481
1762 Common Exhibit 1 at p. 495
1763 Federal Opposition Submission to the Fair Work Commission Review of Modern Awards – Penalty Rates, 21 March 2016 at paras 17 and 18
1764 [2009] AIRCFB 800 at [39] and [243]
1765 [2009] AIRCFB 800 at [28]–[30]
1766 Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) sch 5 pt 3A item 13A(1), as modified by the TP Regulations, reg 3B.04(2)
1767 [2014] FWCFB 9412 at [16]
1768 126 applications under Schedule 5, Item 9; 3 applications under Schedule 5, Item 12 and 11 applications under Schedule 5, item 13B. The majority of these applications have been made by an individual while others were made by unions on behalf of a class of employees.
1769 Melinda Hunt v Interchange Australia[2013] FWC 8813. The most recent decision was issued on 29 March 2016; it dismissed 5 applications on the basis that the applicants had not suffered a modernisation-related reduction in take-home pay, [2016] FWC 1884.
1770 See Industry Profile – Accommodation and food services, pp. 31–32, Figure 5.2 and Industry Profile – Retail trade, p. 43, Figure 5.2
1771 Exhibit SDA 36 at p. 20
1772 We note that there is some doubt about the outer limit of the span of hours in the Fast Food Award, see [1335]
1773 See Industry Profile – Accommodation and food services, pp. 31–32, Figure 5.2 and Industry Profile – Retail trade, p. 43, Figure 5.2
1774 Exhibit SDA 36 at p. 20
1775 PC Final Report at p. 406
1776 [2013] FWCFB 1635
1777 Ibid at [329]–[331]
1778 [2013] FWC 3712 at [5]
1779 See Table 17 at [698] and Table 50 at [1417]
1780 [2015] FWCFB 3406 at [299]–[300]
1781 ABS, Employee Earnings and Hours, Australia, May 2014, Catalogue No. 6306.0
1782 Fair Work Ombudsman, ‘National Hospitality Campaign 2012–2015: Accommodation, pubs, taverns and bars’, November 2013, Fair Work Ombudsman, ‘National hospitality industry campaign report 2014–2015: Restaurants, Cafes and Catering (Wave 2 Report)’, June 2015, Fair Work Ombudsman, ‘National hospitality industry campaign report 2015–2016: Takeaway foods (Wave 3 Report)’, March 2016, Fair Work Ombudsman, ‘National retail industry campaign report 2010–2011’, November 2011, Fair Work Ombudsman, ‘•National pharmacy campaign report 2012–2013’ December 2013, Note casual employees under this award are paid a standard loading of 50% for all time worked Monday to Sunday (other than overtime).
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