[2018] FWCFB 7263

FAIR WORK COMMISSION

DECISION

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

4 yearly review of modern awards – Restaurant Industry Award 2010 – Hospitality Industry (General) Award 2010 – substantive issues
(AM2017/57; AM2017/59)

Restaurant Industry Hospitality Industry
JUSTICE ROSS, PRESIDENT DEPUTY PRESIDENT MASSON COMMISSIONER LEE	MELBOURNE, 12 DECEMBER 2018

4 yearly review of modern awards – Restaurant Industry Award 2010 – Hospitality Industry (General) Award 2010 – substantive issues.

Chapters		Page	Paragraph
1	Introduction	1	[1]
2	The Review	3	[9]
3	Hospitality Award	9	[25]
3.1 The Hospitality sector	9	[25]
3.2 The Claims	11	[32]
4	Restaurant Award	36	[135]
4.1 The Restaurant sector	36	[135]
4.2 The Claims	[141]
5	Tool Allowance – the common claim	59	[212]
6	Conclusion	64	[243]
7	Next steps	65	[248]
Attachments
Attachment A: Summary of legislative provisions relating to the service of alcohol by juniors		77
Attachment B: Background to the current tool allowance provisions in the Hospitality and Restaurant Awards		81
Attachment C: Draft variation determination – Hospitality award		90
Attachment D: Draft variation determination – Restaurant award		106
Tables		Paragraph
Table 1: Employee characteristics of Hospitality industry, 2016		[30]
Table 2: Comparison of Annual Wage Review increases and the Take away and fast foods component of the Consumer Price Index		[102]
Table 3: Tradespersons rate and amount deducted for ‘A meal’ in the Hospitality Award		[103]
Table 4: Food and Beverage stream classification comparison		[117]
Table 5: Employee characteristics of Cafes and restaurants, 2016		[139]
Table 6: Impact of proposed change in minimum rates		[161]

Abbreviations
Penalty Rates Decision	4 Yearly Review of Modern Awards - Penalty Rates (Hospitality and Retail Sectors)
AAA	Accommodation Association of Australia
ABI	Australian Business Industrial and the New South Wales Business Chamber
ABS	Australian Bureau of Statistics
ANZIC	Australian and New Zealand Industrial Classification
AEU	Australian Education Union v State of Victoria (Department of Education and Early Childhood Development)
the Associations	Australian Hotels Association, the Accommodation Association of Australia and the Motor Inn, Motel and Accommodation Association
CBWP	competency based wage progression
Census	Australian Census of Population and Housing
Commission	Fair Work Commission
CPI	Look for first use – before [210]
F&B2	Food and Beverage Attendant Grade 2
Food Precincts Report	Food Precincts Activities – a report on compliance activities undertaken by the Fair Work Ombudsman, July 2018
FWO	Fair Work Ombudsman
FW Act	Fair Work Act 2009 (Cth)
the Retail Award	General Retail Industry Award 2010
the Hospitality Award	Hospitality Industry (General) Industry Award 2010
IFA	Individual flexibility arrangement
NES	National Employment Standards
RCI	Restaurant and Catering Industrial Association
the Review	4 yearly review of modern awards
the ‘BOOT’	In relation to an IFA - ‘result in the employee being better off overall at the time the agreement is made than if the agreement had not been made’
the Restaurant Award	Restaurant Industry Award 2010
‘tools CPI’	Tools and equipment for house and garden is an expenditure class in the sub-group of Household appliances, utensils and tools (within the Furnishings, household equipment and services group)
the ‘trade rate’	the deductible amount for a meal was set at 1 per cent of the minimum wage rate for tradespersons in the award
Transitional Review	Review under Schedule 5, Item 6 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009

1. Introduction

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

[2] A number of substantive claims have been made to vary the Hospitality Industry (General) Industry Award 2010 (the Hospitality Award) and the Restaurant Industry Award 2010 (the Restaurant Award) as part of the Review. In accordance with the Statement¹ issued on 24 October 2017 and the Decision issued on 21 March 2018, 2 a Full Bench has been constituted to deal with these substantive claims.

[3] Directions were issued on 21 May, 3 19 September4 and 14 November 2018.5 Parties seeking variations were directed to file written submissions and any witness statements or documentary material in which they wished to rely on. Submissions and or evidence in support of, or in opposition to, proposed claims were filed by the following parties:

• Australian Business Industrial and the New South Wales Business Chamber (ABI); 6

• Australian Hotels Association, the Accommodation Association of Australia and the Motor Inn, Motel and Accommodation Association (collectively, the Associations); 7

• Restaurant and Catering Industrial Association (RCI); 8 and

• United Voice. 9

[4] A Mention 10 was held on 9 November 2018 to consider the programming of the substantive claims made in relation to the Hospitality Award. A report was subsequently issued on 14 November 2018,11 which outlined the claims that remained outstanding and proposed a process for determining the outstanding matters. In the report the Commission made the following directions:

• The Associations and United Voice were to file a joint report setting out the matters agreed to in respect of the Hospitality Award and a draft variation determination giving effect to that agreement;

• United Voice was to file any documentary material it wished to rely on in support of its tool allowance claim; and

• ABI was to file a short written submission outlining their position in respect of the claims being pressed by United Voice.

[5] The Associations and United Voice filed a joint report 12 on 20 November 2018 in accordance with the directions. United Voice indicated that it did not intend to file further documentary material in support of its tool allowance claims. ABI filed a submission13 on 19 November 2018 outlining their position.

[6] These matters were heard on 26 and 27 November 2018. The transcript of the proceedings and the submissions are available on the 4 yearly review section of the Commission’s website. 14

[7] The proceedings in respect of these two awards have been case managed together due to the commonality of the interested parties. Each award has been reviewed in its own right (see s 156(5)).

[8] It is necessary to first say something about the Commission’s task in the Review before turning to the matters before us.

2. The Review

[9] Section 156 deals with the conduct of the Review and s 156(2) provides that the Commission must review all modern awards and may, among other things, make determinations varying modern awards. In this context ‘review’ has its ordinary and natural meaning of ‘survey, inspect, re-examine or look back upon’. 15 The discretion in s 156(2)(b)(i) to make determinations varying modern awards in a Review, is expressed in general, unqualified, terms.

[10] If a power to decide is conferred by a statute and the context (including the subject-matter to be decided) provides no positive indication of the considerations by reference to which a decision is to be made, a general discretion confined only by the subject matter, scope and purposes of the legislation will ordinarily be implied. 16 However, a number of provisions of the FW Act which are relevant to the Review operate to constrain the breadth of the discretion in s 156(2)(b)(i). In particular, the Review function is in Part 2-3 of the FW Act and hence involves the performance or exercise of the Commission’s ‘modern award powers’ (see s 134(2)(a)). It follows that the ‘modern awards objective’ in s 134 applies to the Review.

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

[12] The modern awards objective is in s 134:

‘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

(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).’

[13] The modern awards objective is to ‘ensure that modern awards, together with the NES, provide a fair and relevant minimum safety net of terms and conditions’, taking into account the particular considerations identified in ss 134(1)(a)–(h) (the s 134 considerations).

[14] The modern awards objective is very broadly expressed. 17 It is a composite expression which requires that modern awards, together with the NES, provide ‘a fair and relevant minimum safety net of terms and conditions’, taking into account the matters in ss 134(1)(a)–(h).18 Fairness in this context is to be assessed from the perspective of the employees and employers covered by the modern award in question.19

[15] 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. 20 No particular primacy is attached to any of the s 134 considerations21 and not all of the matters identified will necessarily be relevant in the context of a particular proposal to vary a modern award.

[16] It is not necessary to make a finding that the award fails to satisfy one or more of the s 134 considerations as a prerequisite to the variation of a modern award. 22 Generally speaking, the s 134 considerations do not set a particular standard against which a modern award can be evaluated; many of them may be characterised as broad social objectives.23 In giving effect to the modern awards objective the Commission is performing an evaluative function taking into account the matters in s 134(1)(a)–(h) and assessing the qualities of the safety net by reference to the statutory criteria of fairness and relevance.

[17] Further, the matters which may be taken into account are not confined to the s 134 considerations. As the Full Court observed in Shop, Distributive and Allied Employees Association v The Australian Industry Group 24 (Penalty Rates Review):

‘What must be recognised, however, is that the duty of ensuring that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions itself involves an evaluative exercise. While the considerations in s 134(a)-(h) inform the evaluation of what might constitute a “fair and relevant minimum safety net of terms and conditions”, they do not necessarily exhaust the matters which the FWC might properly consider to be relevant to that standard, of a fair and relevant minimum safety net of terms and conditions, in the particular circumstances of a review. The range of such matters “must be determined by implication from the subject matter, scope and purpose of the” Fair Work Act (Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 39-40).’ 25

[18] Section 138 of the Act emphasises the importance of the modern awards objective:

‘138 Achieving the modern awards objective

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

[19] 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. 26

[20] In 4 Yearly Review of Modern Awards - Penalty Rates (Hospitality and Retail Sectors) decision (the Penalty Rates decision) 27 the Full Bench summarised the general propositions applying to the Commission’s task in the Review, as follows:

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

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

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

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

• the legislative context which pertained at that time may be materially different from the Fair Work Act 2009 (Cth);

• the extent to which the relevant issue was contested and, in particular, the extent of the evidence and submissions put in the previous proceeding will bear on the weight to be accorded to the previous decision; or

• the extent of the previous Full Bench’s consideration of the contested issue. The absence of detailed reasons in a previous decision may be a factor in considering the weight to be accorded to the decision.’ 28

[21] Where an interested party applies for a variation to a modern award as part of the Review, the proper approach to the assessment of that application was described by a Full Court of the Federal Court in Anglo American as follows: 29

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

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

[22] In the same decision the Full Court also said: ‘...the task was not to address a jurisdictional fact about the need for change, but to review the award and evaluate whether the posited terms with a variation met the objective.’ 30

[23] We will apply the above observations in this decision. In doing so it is convenient to note here that:

• s 134(1)(b) speaks of ‘the need to encourage collective bargaining’. As a general proposition we are not persuaded that any of the variations we propose to make would ‘encourage collective bargaining’, it follows that this consideration does not provide any support for those variations;

• s 134(1)(e) requires that we take into account ‘the principle of equal remuneration for work of equal or comparable value’. The claims would apply equally to men and women workers. Section 134(1)(e) is neutral to our consideration of the claim before us; and

• the consideration in s 134(1)(h) is not relevant in the present context; no party contended to the contrary.

[24] We turn first to the claims in respect of the Hospitality Award and begin with some background information on the sector.

3. Hospitality Award

3.1 The Hospitality sector

[25] The information below presents an update on the profile of the Hospitality industry as published in the Penalty Rates decision. 31

[26] The Australian Bureau of Statistics (ABS) data of direct relevance to the Hospitality Award are limited.

[27] A paper 32 by Commission staff provides a framework for ‘mapping’ modern award coverage to the Australian and New Zealand Industrial Classification(ANZSIC). Using this framework, the Hospitality Award is mapped to six separate ANZSIC industry classes:

1. 4400—Accommodation;

2. 4511—Cafes and restaurants;

3. 4513—Catering services;

4. 4520—Pubs, taverns and bars;

5. 9201—Casino operation; and

6. 4123—Liquor retailing.

[28] The aggregation of these industry classes will be referred to as the Hospitality industry.

[29] The Australian Census of Population and Housing (Census) is the only data source that contains all of the employment characteristics in Table 1 for the Hospitality industry.

[30] The most recent data, for August 2016, show that there were around 446 000 employees in the Hospitality industry. Table 1 compares certain characteristics of employees in the Hospitality industry with employees in ‘all industries’.

Table 1: Employee characteristics of Hospitality industry, 2016

Hospitality industry		All industries
(No.)	(%)	(No.)	(%)
Gender
Male	200 868	45.1	4 438 604	50.0
Female	244 835	54.9	4 443 125	50.0
Total	445 703	100.0	8 881 729	100.0
Full-time/part-time status
Full-time	179 036	41.9	5 543 862	65.8
Part-time	248 077	58.1	2 875 457	34.2
Total	427 113	100.0	8 419 319	100.0
Highest year of school completed
Year 12 or equivalent	311 158	70.6	5 985 652	68.1
Year 11 or equivalent	42 638	9.7	856 042	9.7
Year 10 or equivalent	63 600	14.4	1 533 302	17.4
Year 9 or equivalent	14 980	3.4	273 180	3.1
Year 8 or below	6593	1.5	112 429	1.3
Did not go to school	2001	0.5	26 356	0.3
Total	440 970	100.0	8 786 961	100.0
Student status
Full-time student	105 696	23.9	715 436	8.1
Part-time student	27 712	6.3	491 098	5.6
Not attending	309 672	69.9	7 618 177	86.3
Total	443 080	100.0	8 824 711	100.0
Age (5 year groups)
15–19 years	61 894	13.9	518 263	5.8
20–24 years	100 154	22.5	952 161	10.7
25–29 years	73 998	16.6	1 096 276	12.3
30–34 years	55 260	12.4	1 096 878	12.3
35–39 years	36 683	8.2	972 092	10.9
40–44 years	29 689	6.7	968 068	10.9
45–49 years	26 812	6.0	947 187	10.7
50–54 years	23 551	5.3	872 485	9.8
55–59 years	19 257	4.3	740 822	8.3
60–64 years	12 168	2.7	469 867	5.3
65 years and over	6234	1.4	247 628	2.8
Total	445 700	100.0	8 881 727	100.0
Average age	32.3	39.3
Hours worked
1–15 hours	102 363	24.0	977 997	11.6
16–24 hours	80 810	18.9	911 318	10.8
25–34 hours	64 906	15.2	986 138	11.7
35–39 hours	64 105	15.0	1 881 259	22.3
40 hours	45 732	10.7	1 683 903	20.0
41–48 hours	30 648	7.2	858 120	10.2
49 hours and over	38 556	9.0	1 120 577	13.3
Total	427 120	100.0	8 419 312	100.0

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

Source: ABS, Census of Population and Housing, 2016

[31] The profile of Hospitality industry employees differs from the profile of employees in ‘All industries’ in five aspects:

• Hospitality industry employees are more likely to be female (54.9 per cent, compared with 50 per cent of all employees);

• Over half (58.1 per cent) of Hospitality industry employees are employed on a part-time basis (i.e. less than 35 hours per week), compared with only 34.2 per cent of all employees;

• Around one quarter (24.0 per cent) of Hospitality industry employees work 1–15 hours per week compared with only 11.6 per cent of all employees;

• Over one third (36.4 per cent) of Hospitality industry employees are aged between 15 and 24 years compared with only 16.6 per cent of all employees; and

• Around three in ten (30.1 per cent) Hospitality industry employees are students (23.9 per cent are full-time students and 6.3 per cent study part time) compared with 13.7 per cent of all employees.

3.2 The Claims

3.2.1 Unopposed claims

[32] The Associations and United Voice have had productive discussions in relation to a number of the substantive claims. As a result of those discussions the Associations and United Voice have agreed that the Hospitality Award be varied to give effect to the following claims (collectively, the agreed position):

(i) Item 3 – Definition of ‘junior employee’

[33] It is proposed that a definition of ‘junior employee’ be inserted in clause 3.1 (Definitions) in the following terms: 33

‘junior employee means an employee under the age of 20 who is not undertaking a nationally recognised traineeship or apprenticeship’.

(ii) Item 7 – Progression arrangements and pay scales for apprentices

[34] It is proposed that a competency based pay scale for apprentices be inserted into the Hospitality Award, as new clause 14.12, in the following terms:

‘14.12 Competency based progression

(a) For the purpose of competency based wage progression in clause 20.4 an apprentice will be paid at the relevant wage rate for the next stage of their apprenticeship if:

(i) competency has been achieved in the relevant proportion of the total units of competency specified in clause 20.4 for that stage of the apprenticeship. The units of competency which are included in the relevant proportion must be consistent with any requirements in the training plan; and

(ii) any requirements of the relevant State/Territory apprenticeship authority and any additional requirements of the relevant training package with respect to the demonstration of competency and any minimum necessary work experience requirements are met; and

(iii) either:

(A) the Registered Training Organisation (RTO), the employer and the apprentice agree that the abovementioned requirements have been met; or

(B) the employer has been provided with written advice that the RTO has assessed that the apprentice meets the abovementioned requirements in respect to all the relevant units of competency and the employer has not advised the RTO and the apprentice of any disagreement with that assessment within 21 days of receipt of the advice.

(b) If the employer disagrees with the assessment of the RTO referred to in clause 14.12(a)(iii)(B) above, and the dispute cannot be resolved by agreement between the RTO, the employer and the apprentice, the matter may be referred to the relevant State/Territory apprenticeship authority for determination. If the matter is not capable of being dealt with by such authority it may be dealt with in accordance with the dispute resolution clause in this award. For the avoidance of doubt, disputes concerning other apprenticeship progression provisions of this award may be dealt with in accordance with the dispute resolution clause.

(c) For the purposes of this clause, the training package containing the qualification specified in the contract of training for the apprenticeship, sets out the assessment requirements for the attainment of the units of competency that make up the qualification. The definition of “competency” utilised for the purpose of the training packages and for the purpose of this clause is the consistent application of knowledge and skill to the standard of performance required in the workplace. It embodies the ability to transfer and apply skills and knowledge to new situations and environments.

(d) The apprentice will be paid the wage rate referred to in clause 14.12(a) from the first full pay period to commence on or after the date on which an agreement or determination is reached in accordance with clause 14.12(a)(iii) or on a date as determined under the dispute resolution process in clause 14.12(b).

(e) If the apprentice disagrees with the assessment of the RTO referred to in clause 14.12(a), and the dispute cannot be resolved by agreement between the RTO, the employer and the apprentice, the apprentice may refer the matter to the relevant State/Territory apprenticeship authority for determination. If the matter is not capable of being dealt with by such authority it may be dealt with in accordance with the dispute resolution clause in this award. For the avoidance of doubt, disputes concerning other apprenticeship progression provisions of this award may be dealt with in accordance with the dispute resolution clause.’ 34

[35] It is also proposed that clause 20.4 be deleted and a new provision relating to apprentice wages be inserted. The new provisions would include competency based wage progression (CBWP) and amendments to terminology such as replacing references to ‘standard weekly rate’ with ‘standard hourly rate’.

(iii) Item 18A – Fork-lift driver allowance

[36] The Associations seek to amend the fork-lift driver allowance at clause 21.2(a), to clarify the application of the allowance to part-time and casual employees. The allowance is an all-purpose allowance which is currently expressed as either a weekly rate for full-time employees or a daily rate for part-time or casual employees. The amendment is not opposed.

(iv) Item 23 – Ordinary hours of work – Full-time employees

[37] It is proposed that subclauses 29.1(a) and (c) are amended to insert ‘accrued day off’ to distinguish between a day off in accordance with the provision and a ‘rostered day off’ as defined in the award. A number of ancillary amendments are also proposed and are set out in Exhibit A1.

[38] It is convenient to say something now about whether the agreed variations are necessary to ensure that the Hospitality Award achieves the modern awards objective.

[39] The amendments to the definition of ‘junior employee’ and to the status of the fork lift driver allowance add clarity and are consistent with the objective of making the Hospitality Award simple and easier to understand. We would make the same observation in relation to the agreed amendments to clauses 3.1, 26.5, 29.1(a), 29.1(c), 30.2, 33.3(b), 37.1(b)(i) and Schedule H.1(d), regarding the insertion of the term ‘accrued day off’. These amendments make clear the distinction between an unpaid day off work (e.g. one of the eight days off provided in each 152 hour four week cycle) and a paid accrued rostered day off (e.g. the accrued rostered day off per 160 hour four week cycle). We are satisfied that the variations are necessary to ensure that the Hospitality Award achieves the modern awards objective and, in particular, to ensure that the award is simple and easy to understand.

[40] The proposed variation to the progression arrangements and pay scales for apprentices introduces CBWP for apprentices. CBWP may be described as a system of wages progression that:

‘means that upon the acquisition of competencies associated with a particular year or stage of the apprenticeship, the apprentice is entitled to be paid the minimum wage rate associated with the next year or stage’ 35

[41] CBWP for apprentices was the subject of detailed consideration in the Modern Awards Review 2012 – Apprentices, Trainees and Juniors decision, 36 in which the Full Bench said:

‘[295] We are satisfied that it is consistent with the modern awards objective for the Commission to facilitate the introduction of CBWP for apprentices in awards where it is not already provided for. We agree with the submission of the Commonwealth that the adoption of CBWP in awards supports the modern awards objective of promoting flexible modern work practices and the efficient performance of work (s.134(1)(d) of the Act). We are also satisfied that such a provision will promote productivity in that it will facilitate a more skilled workforce (s.134(1)(f)).’ 37

[42] The proposed amendments in respect of apprentices permits CBWP where that method of progression is permitted in the relevant State or Territory that administers the apprenticeship arrangements. In effect the variations will mean that the award will provide for both CBWP (where permitted in a State or Territory) and time-based progression. The proposed amendments will also expand the range of apprenticeship options available to better align the apprenticeship provisions and the trade classifications in the award.

[43] We are satisfied that the proposed variation will assist the low paid to meet their needs (s 134(1)(a)) and promote flexible and efficient workplaces (s 134(1)(d)). None of the other s 134 considerations are relevant to these particular variations. No party contended to the contrary. Taking into account the s 134 considerations (insofar as they are relevant) we are satisfied that the variation proposed is necessary to ensure that the Hospitality Award achieves the modern awards objective.

3.2.2 Opposed claims

[44] In their joint report the Associations and United Voice set out the claims which are opposed. 38 These claims are dealt with below.

(i) Items 20 and 28 – Public holidays

[45] Clause 32.2 provides that employees (other than casuals) who work on public holidays may by agreement be paid, either:

• 225% of their ordinary hourly wage rate; or

• 125% of their ordinary hourly wage rate plus equivalent paid time is added to the employee’s annual leave or one day instead of such public holiday will be allowed to the employee during the week in which the public holiday they have worked, falls.

[46] The Associations seek a variation of clauses 27.2(c) and 32.2(b) to allow an employer and employee to extend the period in which they can take time off in lieu for time worked on a public holiday.

[47] The initial variation proposed by the Associations to clause 32.2(b) is in red:

‘(b) Employees (other than casuals) who work on a prescribed holiday may, by agreement, perform such work at their applicable ordinary hourly rate plus 25% additional loading rather than the penalty rate prescribed in clause 32.1, provided that equivalent paid time is added to the employee’s annual leave or one day instead of such public holiday will be allowed to the employee during the week in which such holiday falls. Provided that such holiday may be allowed to the employee within 28 days of such holiday falling due, or at other such time as agreed by the employer and the employee’.

[48] A similar variation was initially sought to clause 27.2(c),:

‘(c) An employee other than a casual working on Christmas Day when it falls on a weekend, and is not prescribed as a public holiday under the NES will be paid an additional loading of 25% of their applicable ordinary hourly rate for the hours worked on that day and will also be entitled to the benefit of a substitute day, or at other such time as agreed by the employer and the employee’.

[49] In our view the current requirement that the accrued time off be taken ‘within 28 days’ is too restrictive. The imposition of such a short time period may mean that employees are forced to take the accrued time off at a time that doesn’t suit them. They may wish to add the accrued time off to a later period of annual leave or use it to ‘bridge’ between a period between a later public holiday and an RDO. The existing time limitation may also create operational challenges for employers, particularly small and medium businesses (and hence be inconsistent with s 134(1)(d)).

[50] We have concluded that it is necessary to vary clauses 27.2(c) and 32.2(b) to provide greater flexibility in relation to the time within which accrued time off is to be taken. The question is – the nature and extent of that flexibility.

[51] The difficulty with the Associations’ initial proposal was that it provided no outer limit on the period within which the accrued time off is to be taken. The variation initially proposed may also be contrasted with the existing award term dealing with the taking of time off in lieu of overtime, in clause 33.4 of the award, which contains a number of safeguards which are absent from the Associations’ initial proposal.

[52] We raised these concerns with the parties during the course of the proceedings. The Associations and United Voice subsequently advanced a joint, consent, variation that aligns the provision with the safeguards that apply to the taking of time off in lieu of overtime. We think this is an appropriate outcome. The Associations and United Voice propose that the following paragraph be inserted after clause 27.2(c):

‘(d) Despite the requirement to take time off within 28 days of accruing it in clause 27.2 (c), an employee and an employer may agree to extend the period for taking the accrued time off to within 6 months of its accrual subject to the following:

(i) The agreement is recorded in writing and retained as an employee record;

(ii) The accrued time off is taken at a time or times within the period of 6 months agreed by the employee and the employer;

(iii) If the accrued time off is not taken within the period of 6 months, the employer must pay the employee for the accrued time off in the next pay period following those 6 months; and

(iv) If, on the termination of the employee’s employment, accrued time off for working on a public holiday has not been taken, the employer must pay the employee for the accrued time off.’

[53] An amendment in similar terms is proposed in relation to clause 32.2.

[54] Interested parties were provided with an opportunity to comment on the joint proposal advanced by the Associations and United Voice. No party opposed the joint proposal.

[55] The variation of clauses 27.2 and 32.2 in the manner proposed is consistent with the promotion of flexible modern work practices (s 134(1)(d)). None of the other s 134 considerations are relevant to this particular claim. No party contended to the contrary. Taking into account the s 134 considerations (insofar as they are relevant) we are satisfied that the variation proposed is necessary to ensure that the Hospitality Award achieves the modern awards objective.

(ii) Item 21 – Ordinary hours of work – Full time and part-time employees

[56] The Associations seek to vary clause 29.1(a) of the Hospitality Award by introducing a new method by which hours of work can be averaged, namely for the average of 38 hours per week to be worked as ‘76 hours over a two week period’.

[57] Clause 29.1(a) currently provides:

‘(a) The average of 38 hours per week is to be worked in one of the following ways:

• a 19 day month, of eight hours per day;

• four days of eight hours and one day of six hours;

• four days of nine and a half hours per day;

• five days of seven hours and 36 minutes per day;

• 152 hours each four week period with a minimum of eight days off each four week period;

• 160 hours each four week period with a minimum of eight days off each four week period plus a rostered day off;

• any combination of the above.’

[58] The Associations’ submission in support of the variation is set out at paragraphs 184 to 204 of its submission of 24 July 2018 as follows:

‘187. The first additional averaging way is:

● 76 hours over a two week period;

188. It is submitted that an averaging arrangement of this nature is permitted by section 63(1) of the FW Act, and is consistent with section 134(1)(d) of the modern awards objective.

189. The HIGA allows employers to pay employees on a fortnightly basis at clause 26.2, and rostering practices to enable a full time employee to average their hours over a two week period complements this fortnightly payment basis.

190. The Associations submit that many hospitality employers use a fortnightly pay cycle.

191. The Associations submit that this arrangement simply creates an option between the arrangements currently available that average hours of a four week cycle and those that provide for the performance of work over a single week.

192. The introduction of this arrangement has no impact on other entitlements or protections available to an employee in accordance with the HIGA nor does it have an impact on the HIGA meeting the modern awards objective, specifically s.134 (1) (da).’ 39

[59] United Voice opposes the proposed variation. The relevant submissions are at paragraphs 56 to 57 of United Voice’s submission in reply of 18 September 2018, as follows:

‘56. The first variation sought is for the average of 38 hours per week to be worked as ‘76 hours over a two week period’. The Hospitality Award already provides 6 different ways in which hours of work can be averaged out. There are already sufficient options available for an employer to enable them to roster appropriately for the business.

57. This proposed variation is unnecessary.’ 40

[60] During the course of the proceedings we indicated that if we were minded to vary clause 29(1)(a) in the manner proposed then, consistent with the other averaging options in the clause, it should read:

• 76 hours over a two week period with a minimum of four days off each two week period. (emphasis added)

[61] The Associations accepted that the inclusion of the additional words was appropriate. United Voice’s primary position was to oppose the claim but in the event the Commission was minded to grant the claim, it submitted that it would be appropriate to insert the additional words. 41

[62] The variation of the Hospitality Award in the manner proposed is consistent with the promotion of flexible modern work practices (s 134(1)(d)). None of the other s 134 considerations are relevant. No party contended to the contrary. Taking into account the s 134(1) considerations (insofar as they are relevant) we are satisfied that the variation proposed is necessary to ensure that the Hospitality Award achieves the modern awards objective.

(iii) Item 27 – Penalty rates – Public holidays

[63] Clause 32.2(2) deals with minimum engagement periods for working on a public holiday:

‘(a) An employee other than a casual working on a public holiday will be paid for a minimum of four hours’ work. A casual employee working on a public holiday will be paid for a minimum of two hours’ work’.

[64] The Associations’ claim seeks to make it clear that the minimum engagement periods in clause 32.2(a) refer to all hours worked during a shift and not only to the hours worked on the day that is the public holiday. The Associations’ initial proposal was to add the following sentence at the end of clause 32.2(a):

‘Hours of work performed on the day immediately before or immediately after a public holiday that form part of one continuous shift are counted as part of the employee’s minimum engagement’. 42

[65] This proposal was refined during the course of the proceedings and ultimately the Associations sought to vary clause 32.2(a) as follows:

‘(a) An employee other than a casual working on a public holiday will be paid for a minimum of four hours’ work. A casual employee working on a public holiday will be paid for a minimum of two hours’ work. Hours of work performed on the day immediately before a public holiday, or immediately after a public holiday, and that form part of one continuous shift, are counted as part of the minimum hours worked for the purposes of this clause.

Illustrative Example 1 – Full Day Public Holiday

A full-time employee is rostered to work an 8 hour shift from 4:30pm on Thursday 25 January until 1:00am on Friday 26 January (Australia Day public holiday). The employee takes their half hour unpaid meal break at 8:30pm. Although the employee has only worked one hour on the public holiday, the employee’s overall shift length was at least 4 hours and therefore satisfies the minimum payment requirement.

The full-time employee will receive payment of 7 hours at the ordinary hourly rate (plus late night penalties) and 1 hour at the public holiday rate.

Illustrative Example 2 – Part Day Public Holiday

A casual employee is rostered to work in a regional town on the same day as the town’s annual show day which falls on the first Friday of a month. The town celebrates the annual show with a part day public holiday which is observed from 12:00pm to 5:00pm. The casual employee works from 4:00pm until 7:00pm. Although the employee has only worked one hour on the part day public holiday, the casual employee’s overall shift length was at least 2 hours and therefore satisfies the minimum payment requirement.

The casual employee will receive payment of 1 hour at the casual public holiday rate, and 2 hours at the casual Monday to Friday hourly rate.’

[66] The Associations’ submission in support of the variation is set out at paragraphs 207 to 214 of its submission of 24 July 2018 as follows:

‘207. Clause 32.2(a) proscribes a minimum number of hours for payment in relation to work performed on a public holiday. Further, an employee is entitled to the minimum number of hours payment specified in clause 32.2(a) even where they do not work those minimum hours.

208. Clause 32.2(a) does not state that the payment must be either four hours’ (for permanent employees) or two hours’ (for casual employees) at the applicable public holiday hourly rate.

209. The Associations submit that where an employee performs work immediately prior to a public holiday and continues to work on the actual public holiday, or performs work immediately after a public holiday after having started work on the actual public holiday, the work performed on the non-public holiday is counted toward the minimum number of hours for payment.

210. For example, an employee commences work at 10pm on Thursday, 25 January 2018. The following day is Australia Day; a public holiday, and the employee works until 2am on 26 January. The employee will receive four hours payment for work performed, with only two of the hours paid at the applicable public holiday rate.

211. The Associations seek to vary clause 32.2(a) to provide clarity on the operation of this clause.

...

213. It is submitted that by clarifying the operation of clause 32.2(a), the proposed variation makes this clause more efficient and effective.

214. Accordingly, the Associations submit that the proposed variation meets the modern awards objective having regard to section 134.1(g).’ 43

[67] United Voice opposes the proposed variation. The relevant submissions are at paragraphs 78 to 80 of United Voice’s submissions in reply of 18 September 2018, as follows:

‘78. Clause 32.2(a) provides a benefit for employees in ensuring that an employee will receive adequate hours of payment for the disutility of working on a public holiday.

79. The variation proposed by the AHA reduces the actual minimum engagement period for employees on public holidays, and would have the effect of weakening the benefit that clause 32.2(a) currently provides for employees working on public holidays. This is inconsistent with s134 (1) (da) (iii) of the modern awards objectives.

80. The variation sought by the AHA should be rejected.’ 44

[68] The intent of clause 32.2(a) is to ensure that employees who are required to perform work on public holidays receive a minimum payment. If the hours worked in a ‘stand alone’ shift are all worked on a public holiday then the minimum payment (4 hours for full-time and part-time; 2 hours for casuals) is to be paid at the public holiday rate. The provision is intended to provide a financial disincentive to rostering employees to work for a short period on a public holiday. For example, absent the provision an employer may roster a part time employee to work a 3 hour shift on Christmas day (see clause 29.2(a)). In such circumstances clause 32.2(a) operates to ensure that the employee receives a minimum payment equivalent to the payment for four hours work at the appropriate public holiday rate.

[69] The variation proposed by the Associations preserves the deterrent effect of the clause while avoiding anomalous outcomes. For example, under the current clause a part-time employee may be rostered for an 8 hour shift commencing at 5pm on the day prior to a public holiday (say a Friday) and finishing at 1am on the public holiday. In such circumstances clause 32.2(a)) is open to the interpretation that the employee would receive a minimum payment of 16 hours pay:

• 7 hours at their minimum hourly rate, plus

• 4 hours at the public holiday rate (225%) (i.e. 9 hours at the minimum hourly rate).

[70] Such an outcome is excessive in circumstances where the employee has worked a continuous shift of more than the minimum four hour engagement required by clause 32.2(a). It does not provide ‘a fair and relevant minimum safety net of terms and conditions’ as required by the modern awards objective.

[71] United Voice submits that the proposed variation is inconsistent with s134(1)(da)(iii). We disagree. Section 134(1)(da) is one of the considerations we are required to take into account in ensuring that all modern awards, together with the NES, provide a fair and relevant minimum safety net of terms and conditions, it states that the Commission must take into account:

‘(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’. (emphasis added)

[72] Contrary to United Voice’s submission s134(1)(da) does not mandate the payment of additional remuneration for working on a public holiday; nor does it provide a statutory bar to the variation of a modern award to reduce the minimum payment for work on a public holiday. So much is clear from the following passage from the Penalty Rates decision: 45

‘[194] … 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 ‘the need for additional remuneration’ must be construed in context, and the context tells against the proposition that s.134(1)(da) requires additional remuneration be provided for working in the identified circumstances.

[195]Section s.134(1)(da) is a relevant consideration, it is not a statutory directive that additional remuneration must be paid to employees working in the circumstances mentioned in paragraphs 134(1)(da)(i), (ii), (iii) or (iv)…

[196]Importantly, the requirement to take a matter into account does not mean that the matter is necessarily a determinative consideration. This is particularly so in the context of s.134 because s.134(1)(da) is one of a number of considerations which we are required to take into account. No particular primacy is attached to any of the s.134 considerations. The Commission’s task is to take into account the various considerations and ensure that the modern award provides a ‘fair and relevant minimum safety net’.

[73] We accept that in some circumstances the variation proposed will adversely impact on ‘relative living standards and the needs of the low paid’ (s 134(1)(a)), as low paid employees may receive a lesser minimum payment for working on a public holiday. This is a consideration which tells against the proposed variation.

[74] But, we are also satisfied that the variation would promote ‘flexible modern work practices and the efficient productive performance of work’ (s 134(1)(d)), by appropriately setting a minimum engagement period. The variation will impact positively on business by reducing employment costs (s 134(1)(f)) and will ensure that the award is simple and easy to understand (s 134(1)(g)). These considerations all favour making the variation sought.

[75] We would also observe that if clause 32.2(a) is varied in the manner proposed employees working on public holidays will continue to receive ‘additional remuneration’ for performing such work (s 134(1)(da)(iii)). None of the other s 134 considerations are relevant to this particular claim. No party contended to the contrary.

[76] Taking into account the s 134 considerations (insofar as they are relevant) we are satisfied that the variations proposed are necessary to ensure that the Hospitality Award achieves the modern awards objective.

(iv) Item 36A – Deductions for provision of employee accommodation and meals

[77] The Associations seek to vary clause 39 to enable an employer to deduct $8.37 per meal instead of per week. Clause 39 provides (deductions for services other than meals omitted):

‘39.1 Right to make deductions

When an employer provides their employees with accommodation, meals or both, then the employer may deduct an amount of money from the employee’s wages in accordance with this clause.

39.2 Adult employees

The amounts set out in the table below may be deducted from the wages of an adult employee for the provision of accommodation, meals or both by their employer. The same amounts may be deducted from the wages of a junior employee in receipt of adult wages.

Service provided	Deduction $ per week
A meal	8.37

NOTE: The ‘Single room and 3 meals a day’ amount is calculated at 25% of the standard weekly rate. The following internal relativity is then applied:

%
A meal	1% of the standard weekly rate

39.3 Junior employees receiving junior rates

The amounts set out in the table below may be deducted from the wages of a junior employee who is being paid junior rates of pay for the provision of accommodation, meals or both by the employer. The amount which may be deducted depends on the age of the employee.

Service provided	Age	Deduction	Deduction per week
% of adult deduction	$
A meal	Same rate all ages	—	8.37

39.4 Deductions for meals

An employer may deduct an amount from an employee’s wages for providing the employee with a meal only if:

(a) the employee does not live in accommodation provided by the employer; and

(b) the meal is provided during the employee’s normal working hours.’

[78] The Associations’ submission in support of the proposed variations is set out in its submission of 24 July 2018. 46 In short, it is contended that the reference to a deduction of $8.37 per week for the provision of a meal is an error and that the permitted deduction is $8.37 per meal. The Associations seek to make good their contention by reference to the relevant pre-reform instruments and the award modernisation process. It is submitted that the error should be rectified to ensure that the provision is simple and easy to understand and apply, consistent with the modern awards objective.

[79] United Voice opposes the proposed variation. The relevant submissions are set out in United Voice’s submissions in reply of 18 September 2018. 47 In short, United Voice submits that while conditions under pre-reform awards may have some relevance they are not determinative, and increasing the deduction as proposed will have a significant adverse financial impact on low paid employees such that it will not meet the modern awards objective. As to the amount of deduction sought to be permitted - $8.37 per meal – United Voice submits:

‘The deduction proposed by the AHA is not equivalent and excessive when considered against the cost of providing a meal to an employee within a hospitality enterprise’. 48

[80] United Voice also points to the ‘relativities’ across clause 39.2 and submits that the variation proposed would give rise to various ‘inconsistencies’:

‘When a single room and 3 meals a day are provided, the deduction permitted is $209.35 per week. When a single room and no meals are provided, the deduction permitted is $198.88 per week. The difference in the two amounts is $10.47, and that is for the provision of 21 meals. Similarly, when a shared room and 3 meals a day are provided the deduction permitted is $204.12 per week. When a shared room and no meals are provided the deduction permitted is $193.65 per week. The difference in the two amounts is again $10.47. To increase the deduction for meals from a per week amount to a per meal amount would result in the cost per meal being excessive when compared with the other permitted deductions.’ 49

[81] We accept that the reference to ‘per week’ is a drafting error and that the deduction should be applied per meal. But that is not the end of the matter, the Associations’ claim must be assessed in the light of the modern awards objective and the other relevant provisions of the FW Act. In particular, it gives rise to a question as to whether a deduction of $8.37 per meal is fair and whether it is a prohibited term, within the meaning of s 151. It also raises the issue of whether any deduction in relation to employees under 18 is lawful, absent the written consent of the employee’s parent or guardian (s 326(4)).

[82] Section 151 provides:

‘Terms about payments and deductions for benefit of employer etc.

A modern award must not include a term that has no effect because of:

(a) subsection 326(1) (which deals with unreasonable deductions for the benefit of an employer); or

(b) subsection 326(3) (which deals with unreasonable requirements to spend or pay an amount); or

[83] The Explanatory Memorandum provides a guide as to the purpose of s 151:

‘587. Clause 151 prohibits a modern award from including a term that is of no effect because:

• the term includes unreasonable payments and deductions for the benefit of an employer (subclause 326(1)); or

• the term relates to unreasonable requirements in relation to how employees spend their wages or other amounts (subclause 326(3)).

588. Although such terms are of no effect, this clause ensures that such terms are not included in awards, as their inclusion (even though inoperative) could be confusing and create uncertainty.’

[84] Section 324 deals with ‘permitted deductions’, the relevant part states:

‘(1) An employer may deduct an amount from an amount payable to an employee in accordance with subsection 323(1) if:

…

(a) the deduction is authorised by or under a modern award or an FWC order;

…

Note 2: Certain terms of modern awards, enterprise agreements and contracts of employment relating to deductions have no effect (see section 326). A deduction made in accordance with such a term will not be authorised for the purposes of this section.’

[85] Section 325 provides:

‘325 Unreasonable requirements to spend or pay amount

(1) An employer must not directly or indirectly require an employee to spend, or pay to the employer or another person, an amount of the employee’s money or the whole or any part of an amount payable to the employee in relation to the performance of work, if:

(a) the requirement is unreasonable in the circumstances; and

(b) for a payment—the payment is directly or indirectly for the benefit of the employer or a party related to the employer.

Note: This subsection is a civil remedy provision (see Part 4-1).

(1A) An employer (the prospective employer) must not directly or indirectly require another person (the prospective employee) to spend, or pay to the prospective employer or any other person, an amount of the prospective employee’s money if:

(a) the requirement is in connection with employment or potential employment of the prospective employee by the prospective employer; and

(b) the requirement is unreasonable in the circumstances; and

(c) the payment is directly or indirectly for the benefit of the prospective employer or a party related to the prospective employer.

Note: This subsection is a civil remedy provision (see Part 4-1).

(2) The regulations may prescribe circumstances in which a requirement referred to in subsection (1) or (1A) is or is not reasonable.’

[86] Section 326 provides that certain terms have no effect:

‘Unreasonable deductions for benefit of employer

(1) A term of a modern award, an enterprise agreement or a contract of employment has no effect to the extent that the term permits, or has the effect of permitting, an employer to deduct an amount from an amount that is payable to an employee in relation to the performance of work, if the deduction is:

(a) directly or indirectly for the benefit of the employer or a party related to the employer; and

(b) unreasonable in the circumstances.

(2) The regulations may prescribe circumstances in which a deduction referred to in subsection (1) is or is not reasonable.

Unreasonable requirements to spend or pay an amount

(3) A term of a modern award, an enterprise agreement or a contract of employment has no effect to the extent that the term:

(a) permits, or has the effect of permitting, an employer to make a requirement that would contravene subsection 325(1); or

(b) directly or indirectly requires an employee to spend or pay an amount, if the requirement would contravene subsection 325(1) if it had been made by an employer.

Deductions or payments in relation to employees under 18

(4) A term of a modern award, an enterprise agreement or a contract of employment has no effect to the extent that the term:

(a) permits, or has the effect of permitting, an employer to deduct an amount from an amount that is payable to an employee in relation to the performance of work; or

(b) requires, or has the effect of requiring, an employee to make a payment to an employer or another person;

if the employee is under 18 and the deduction or payment is not agreed to in writing by a parent or guardian of the employee.’

[87] As set out earlier, s 151 relevantly provides that a modern award must not include a term which has no effect because of ss 326(1) and (4).

[88] It seems clear that subclauses 39.2 and 39.3 are terms that permit ‘an employer to deduct an amount from an amount that is payable to an employee in relation to the performance of work’ and such a deduction is ‘directly or indirectly for the benefit of the employer’. No party contended to the contrary.

[89] The central question is whether such a deduction is ‘unreasonable in the circumstances’ within the meaning of s 326(1)(c)(ii). This expression was considered by Bromberg J in Australian Education Union v State of Victoria (Department of Education and Early Childhood Development) (AEU). 50

[90] In the course of his judgment in AEU, Bromberg J made a number of general observations about the proper construction of s 326. In particular, His Honour concluded that whether a deduction is ‘unreasonable in the circumstances’ is a question of fact and degree dependent upon the relevant surrounding circumstances 51 and then proceeded to identify a number of considerations that are likely to be relevant (though not exhaustive). These considerations appear at [177] – [182] of the judgment and, those which are relevant in the present context may be summarised as follows:

‘1. Consideration must commence from the premise that the ultimate purpose of the scheme is to protect employees from practices that have the effect of denying them the benefit of the remuneration they have earned and are thus entitled to fully enjoy.

2. The extent to which the employer or its related party has benefited will likely be relevant. It will be relevant to assess whether the employee has been taken advantage of in some way, with the result that part of the benefit of his or her remuneration has been lost to the employer. A benefit to the employer is not, of itself, a reason for finding that a deduction was unreasonable. There is nothing wrong in an employer gaining a benefit, but, if that benefit is gained at the expense of the employee, that would tend to indicate unreasonableness. It is the possibility of an unreasonable transfer of the benefit from its intended recipient—the employee—to the employer, which is fastened upon by s.326(1)(c).

3. The phrase ‘in the circumstances’ is of wide import and a broad approach is to be taken to the extent of the circumstances which are considered.’

[91] Having regard to the protective purpose of s 326, a deduction made pursuant to clauses 39.2 and 39.3 may be ‘unreasonable in the circumstances’ within the meaning of s 326(1)(c)(ii) if the deduction is disproportionate to the cost to the employer of providing the meal and if the informed consent of the employee is not required.

[92] Further, as currently drafted, clauses 39.2 and 39.3 are terms which permit an employer to deduct an amount that is payable to an employee under 18 years of age in circumstances where the deduction is ‘not agreed to in writing by a parent or guardian of the employee’. Accordingly, these terms would have no effect in relation to employees under 18 years of age, because of s 326(4), and hence are terms that must not be included in a modern award, because of s 151(c).

[93] The appropriate course is to vary the term to make it clear that deductions for the provision of meals will not apply to employees under 18 years of age, unless it has been agreed to in writing by a parent or guardian of the employee.

[94] To the extent that the purpose of these terms is compensatory, they do not contain a mechanism for ensuring that any deduction made is proportionate to the cost of providing a meal, in all cases. To deal with this issue it would be appropriate to insert a qualification to these terms, as follows:

‘Any deduction made pursuant to clauses 39.2 and 39.3 must not be unreasonable in the circumstances.’

[95] It would also be appropriate to provide that the employee must consent to the provision of the meal, having been informed that a deduction will be made.

[96] Subject to dealing with the quantum of the permitted deduction (and the means for its adjustment), we are satisfied that the amendments we propose to clauses 39.2 and 39.3 are such that deductions made in compliance with the term would not be ‘of no effect’ (because of the operation of ss 151 and 326) and hence there would be no prohibition from including such a term in a modern award.

[97] We now turn to consider whether a deduction of $8.37 per meal is ‘unreasonable in the circumstances’ (s 326(1)(b)) and the related question of whether such a term provides ‘a fair and relevant minimum safety net of terms and conditions’ (s 134).

[98] In assessing the reasonableness of the quantum of the proposed deduction - $8.37 per meal – it is relevant to examine how that figure was arrived at. In 2004 proceedings before the then Australian Industrial Relations Commission the deductible amount for a meal was set at 1 per cent of the minimum wage rate for tradespersons in the award (the ‘trade rate’). 52 The application was determined by consent on 31 August 2004 and the consent order varied the Hospitality Industry – Accommodation, Hotels, Resorts and Gaming Award 1998 to update the deductible amounts and to provide an automatic adjustment of those amounts by reference to movements in the ‘trade rate’.

[99] The method for adjusting the quantum of the meal allowance deduction may be contrasted with the adjustment mechanism which applies to other meal allowance provisions in the Hospitality Award.

[100] Clause 21.1(a)(i) provides that in certain circumstances employees are to be paid a meal allowance, :

‘21.1(a)(i) Expenses incurred in the course of employment

Meal allowance

An employee required to work overtime for more than two hours without being notified on the previous day or earlier that they will be so required to work must either be supplied with a meal by the employer or be paid an allowance of $12.97.’

[101] The meal allowance in clause 21.1(a)(i) is adjusted by reference to movements in the Takeaway and fast foods component of the Consumer Price Index (CPI). By contrast, the meal deduction provision in clause 39.2 is adjusted by reference to increases to the ‘trade rate’, effectively through Annual Wage Review increases. The two methods of adjustment gave rise to different results.

[102] The table below (Table 2) compares the annual and cumulative increases of annual wage review decisions to the ‘trade rate’, with movements in the Take away and fast foods component of the CPI. Annual wage review decisions take effect from 1 July each year. The CPI for Take away and fast foods is for the March quarter, as this is the period applied when adjusting allowances.

Table 2: Comparison of Annual Wage Review increases and the Take away and fast foods component of the Consumer Price Index

Annual Wage Review	Take away and fast foods
2010	4.8*	2.7
2011	3.4	3.0
2012	2.9	2.8
2013	2.6	3.2
2014	3.0	1.9
2015	2.5	2.1
2016	2.4	2.2
2017	3.3	1.1
2018	3.5	2.1
Cumulative increase	32.3%	23.1%

Note: CPI increases are for the March quarter of each year. *Increase awarded was a flat dollar amount of $26, therefore, the percentage increase applies only to the national minimum wage.

Source: Annual Wage Review decisions; ABS, Consumer Price Index, Australia, Sep 2018, Catalogue No. 6401.0.

[103] Table 3 presents the ‘trade rate’ in the Hospitality Award and the amount deducted for a meal, both based on Annual Wage Review decisions. The right-hand column shows the amount deducted for ‘a meal’ if it was indexed to the CPI for Take away and fast foods. The increase from the Annual Wage Review 2009–10 decision was a flat dollar amount of $26. This equates to an increase of 4.1 per cent at the tradespersons rate (rounded to the nearest 10 cents).

Table 3: Tradespersons rate and amount deducted for ‘A meal’ in the Hospitality Award

Tradespersons rate	Amount deducted for ‘a meal’	If increase based on Take away and fast foods in CPI
2010	$663.60	$6.64	$6.64
2011	$686.20	$6.86	$6.84
2012	$706.10	$7.06	$7.03
2013	$724.50	$7.25	$7.25
2014	$746.20	$7.46	$7.39
2015	$764.90	$7.65	$7.55
2016	$783.30	$7.83	$7.72
2017	$809.10	$8.09	$7.80
2018	$837.40	$8.37	$7.96
Cumulative increase from 2010	26.2%	26.1%	19.9%
Cumulative increase from 2010	$173.80	$1.73	$1.32

Source: MA000009; ABS, Consumer Price Index, Australia, Sep 2018, Catalogue No. 6401.0.

[104] It is apparent from Table 3 that had the amount that may be deducted for a meal been adjusted in line with the Take away and fast food component of the CPI, the quantum of the permitted deduction would currently be $7.96, not $8.37.

[105] Given that both of these provisions deal with the cost of providing or purchasing a meal, there is no logical reason why these amounts are adjusted by different mechanisms. The takeaway and fast food component of the CPI is the most relevant, and the award will be varied to provide that in future both provisions will be adjusted by movements in that index. No party took a different view.

[106] Mr Ryan, on behalf of the Associations submitted that in food businesses generally the cost of a meal is ‘around about two thirds of the ultimate sale, predicated on a profit margin of about 10%’. 53 Mr Ryan went on to submit:

‘And this is just talking very anecdotally, but coincidentally if an employee works in clause 21.1(a) there’s a meal allowance for an employee who works overtime for more than two hours without being notified the previous day or earlier, they must be supplied with a meal by the employer or paid an allowance of $12.97, and one could argue that should that amount be the same as the deductable amount, but going against that argument would be that well, that’s to compensate the employee to purchase a meal and they don’t necessarily have to purchase it cost price from their employer. But quite coincidentally in an approximate basis $8.37 is around about two-thirds of the $12.97. Again, it’s just arrived there for different reasons.

But if one wanted to assess whether that was a reasonable amount on the general proposition that cost of production is roughly two-thirds and there’s an allowance for purchasing a meal elsewhere and the deduction amount is two-thirds of that amount I would submit that you’re approximately on the money.’ 54

[107] We note that the profit and loss statements provided by the witnesses in these proceedings show a slightly higher profit margin than that submitted by the Associations, of 10.85% and 11.84%.

[108] If the deductible meal amount was set at $7.96 this would represent about 61% (i.e. 7.96/12.97) of the meal allowance payable to an employee under clause 21.1(a)(i), in circumstances where that amount is intended to reimburse an employee for the cost of purchasing a meal. In our view such an outcome represents an appropriate relationship between these two amounts.

[109] We acknowledge that the determination of the quantum of the deductible meal amount is not an exact science. But having regard to the considerations mentioned we are satisfied that an amount of $7.96 is fair. For the reasons given we propose to vary clause 39 as follows:

• the right to make deductions (clause 39.1) will be subject to two qualifications:

○ deductions must not be made from the wages of employees under 18 years of age unless they have been agreed to in writing by a parent or guardian of the employee,

○ any deduction made pursuant to clause 39 must not be unreasonable in the circumstances,

• an employee must consent to the provision of a meal, having been informed of the amount that will be deducted from their wages for the meal, before any deduction may be made;

• the reference to a deduction of $8.37 per week will be varied to $7.96 per meal;

• in the future the quantum of the meal allowance deduction will be adjusted by reference to movements in the takeaway and fast food component of the CPI.

[110] We acknowledge that the variations proposed will adversely impact on ‘relative living standards and the needs of the low paid’ (s 134(1)(a)), in that it will permit a deduction per meal. This is a consideration that tells against the proposed variation.

[111] The variations will also impact positively on business by increasing income (s 134(1)(f)) and will ensure that the award is simple and easy to understand (s 134(1)(g)). These considerations favour making the variation sought. Taking into account the s 134 considerations (insofar as they are relevant) we are satisfied that the variations we propose are necessary to ensure that the Hospitality Award achieves the modern awards objective.

(v) Item 38 – Classifications

[112] The Associations seek to vary the classification definition for ‘Food and Beverage Attendant Grade 2’ (F&B2) in Schedule D.2.1 by inserting the words ‘taking reservations, greeting and seating guests’ as a new duty.

[113] The current F&B2 classification at Schedule D.2.1 is as follows:

‘Food and beverage attendant grade 2 means an employee who has not achieved the appropriate level of training and who is engaged in any of the following:

• supplying, dispensing or mixing of liquor including the sale of liquor from the bottle department;

• assisting in the cellar or bottle department;

• undertaking general waiting duties of both food and/or beverage including cleaning of tables;

• receipt of monies;

• attending a snack bar; and

• engaged on delivery duties.’

[114] The Associations submit that the variation sought is ‘not a material one, but rather is reflective of the actual duties likely to be performed by an employee employed as a F&B2 and is consistent with the comparable classification in the Restaurants Award, which includes ‘taking reservations, greeting and seating guests’.

[115] The Associations submit that the level 2 classifications in the Hospitality and Restaurant Awards are similar and, further:

‘it is not practical or realistic for those tasks and the seating of guests to only be assigned to Grade 3 employees given that this duty, and exclusion of this duty from the F&B2 classification is inconsistent with the modern awards objective’ 55

[116] United Voice opposes the proposed variation. The relevant submissions are at paragraphs 99 to 104 of United Voice’s submission in reply of 18 September 2018, as follows:

‘99. We disagree with the characterisation of this proposed change as immaterial.

100. The proposed variation, if made, will lead to employees who are currently classified as Food and Beverage Attendant Grade 3 being demoted to Grade 2, with the associated loss of wages.

101. Taking reservations, greeting and seating guests is properly recognised in the Hospitality Award as a higher level duty which requires a greater level of skill than tasks such as general waiting duties, attending a snack bar and delivery duties.

102. In Restaurant and Catering Association of Victoria [2014] FWCFB 1996, evidence was adduced about the work performed by Food and Beverage Attendants under the Restaurant Industry Award 2010 (Restaurants Award). The decision was made on the evidence before the Commission and specifically in relation to the Restaurants Award.

103. Section 156 of the Act requires that each award must be reviewed in its own right and the AHA has not placed probative evidence before the Commission regarding the work of Food and Beverage Attendants under the Hospitality Award that justifies the variation sought.

104. The variation sought by the AHA should be rejected.’

[117] We accept that the current definitions for a F&B2 classification in the Hospitality Award and the Restaurant Award are similar, as shown by Table 4 below (differences are highlighted in red text):

Table 4:Food and Beverage stream classification comparison

Restaurant Award (Schedule B.2)	Hospitality Award (Schedule D.2.1)
Food and Beverage Grade 2
B.2.2 Food and beverage attendant grade 2 means an employee who has not achieved the appropriate level of training and who is engaged in any of the following: (a) supplying, dispensing or mixing of liquor; (b) assisting in the cellar; (c) undertaking general waiting duties of both food and/or beverage including cleaning of tables; (d) receipt of monies; (e) attending a snack bar; (f) delivery duties; (g) taking reservations, greeting and seating guests.	Food and beverage attendant grade 2 means an employee who has not achieved the appropriate level of training and who is engaged in any of the following: • supplying, dispensing or mixing of liquor including the sale of liquor from the bottle department; • assisting in the cellar or bottle department; • undertaking general waiting duties of both food and/or beverage including cleaning of tables; • receipt of monies; • attending a snack bar; and • engaged on delivery duties.

[118] It is also relevant to observe that both awards cover restaurants. The Restaurant Award is an industry award which covers employers in the restaurant industry and their employees in the classifications listed in Schedule B (see clause 4.1). The ‘restaurant industry’ is defined in clause 3.1 as follows:

‘restaurant industry means restaurants, reception centres, night clubs, cafes and roadhouses, and includes any tea room, café, and catering by a restaurant businessbut does not include a restaurant operated in or in connection with premises owned or operated by employers covered by any of the following awards:

(a) Hospitality Industry (General) Award 2010;

(b) Registered and Licensed Clubs Award 2010; or

(c) Fast Food Industry Award 2010’

[119] The Hospitality Award covers employers in the hospitality industry and their employees in the classifications listed in Schedule D (see clause 4.1). The ‘hospitality industry’ is defined in clause 4.2:

‘hospitality industry includes hotels; motor inns and motels; boarding establishments; condominiums and establishments of a like nature; health or recreational farms; private hotels, guest houses, serviced apartments; caravan parks; ski lodges; holiday flats or units, ranches or farms; hostels, or any other type of residential or tourist accommodation; wine saloons, wine bars or taverns; liquor booths; resorts; caterers; restaurants operated in or in connection with premises owned or operated by employers otherwise covered by this award; casinos; and function areas and convention or like facilities operating in association with the aforementioned.’ (emphasis added)

[120] Hence restaurants operated in or in connection with a hospitality venue (such as a hotel or motel) are covered by the Hospitality Award. All other restaurants (i.e. ‘free standing’ restaurants not operated in or in connection with a hospitality venue) are covered by the Restaurant Award. The Restaurant Award expressly excludes restaurants operated in or in connection with premises owned or operated by employers covered by the Hospitality Award, the Registered and Licensed Clubs Award 2010 or the Fast Food Award 2010.

[121] Further, the July 2017 Casual and part-time employment decision 56 also noted the similarities between the Restaurant and Hospitality Awards:

‘[537] RCI originally made a claim for alterations to the part-time employment provisions of the Restaurant Award, with its claim being advanced on a basis similar to those of the Hospitality Associations and CAI. However at the hearing on 29 February 2016 RCI withdrew that claim, saying that “it may be a matter that is more appropriate for the award stage of proceedings”.

[538] Notwithstanding this, because we consider it likely that the circumstances of the restaurant and catering industry with respect to the workability of the current award part-time employment are substantially the same as those for the hospitality and clubs industries, we have formed the provisional view that there is a strong basis for the part-time employment clause in the Restaurants Award to be altered in the same way as for the Hospitality Award and the Clubs Award. We will invite interested parties to make further submissions and, if necessary, adduce evidence in relation to this proposition.’

39. Provision of employee accommodation and meals

39.1 Right to make deductions

Subject to clauses 39.2 and 39.3, an employer may deduct an amount from the wages of an employee for the provision of either meals or accommodation or both.

39.2 Deductions not to be unreasonable

Any deduction made under clause 39 must not be unreasonable in the circumstances.

39.3 Deductions for employees under 18 years of age

Deductions must not be made under clause 39 from the wages of an employee who is under 18 years of age unless the deductions have been agreed to in writing by the employee's parent or guardian.

39.4 Deductions for meals

An employer may only deduct an amount from an employee’s wages for providing the employee with a meal if:

(a) the employee does not live in accommodation provided by the employer; and

(b) the meal is provided during the employee’s normal working hours; and

(c) the employee has been informed of the amount that will be deducted from the employee's wages for the meal and has consented to the meal being provided.

39.5 Deductions for accommodation or accommodation and meals—Adult employees

An employer may deduct from the wages of an adult employee, or the wages of a junior employee on adult rates, the amounts specified in column 2 of Table 1-Employees on adult rates for the service specified in column 1 provided by the employer.

Table 1—Employees on adult rates

Column 1 Service provided by employer	Column 2 Deduction $ per week
Single room and 3 meals a day	209.35
Shared room and 3 meals a day	204.12
Single room only, no meals	198.88
Shared room only, no meals	193.65

NOTE: The ‘Single room and 3 meals a day’ amount is calculated at 25% of the standard weekly rate. The following internal relativity is then applied:

%
Single room and 3 meals a day	100
Shared room and 3 meals a day	97.5
Single room only, no meals	95.0
Shared room only, no meals	92.5

39.6 Deductions for accommodation or accommodation and meals—Junior rates

An employer may deduct from the wages of a junior employee on junior rates aged as specified in column 2 of Table 2 – Employees on junior rates, the amount specified in column 4 for the service specified in column 1 provided by the employer.

Table 2—Employees on junior rates

Column 1 Service provided by employer	Column 2 Age	Column 3 Deduction	Column 4 Deduction per week
% of adult deduction	$
Single room and 3 meals a day	15 yrs & under	45	94.21
16 yrs	55	115.14
17 yrs	70	146.55
18 yrs	80	167.48
19 yrs	90	188.42
Shared room and 3 meals a day	15 yrs & under	45	91.85
16 yrs	55	112.27
17 yrs	70	142.88
18 yrs	80	163.30
19 yrs	90	183.71
Single room only; no meals	15 yrs & under	45	89.50
16 yrs	55	109.38
17 yrs	70	139.22
18 yrs	80	159.10
19 yrs	90	178.99
Shared room only; no meals	15 yrs & under	45	87.14
16 yrs	55	106.51
17 yrs	70	135.56
18 yrs	80	154.92
19 yrs	90	174.29

39.7 Amount of deduction for meals

An employer may deduct an amount of $7.96 from an employee’s wages for providing the employee with a meal.

39.8 Adjustment of amount of deduction for meals

(a) At the time of any adjustment to the standard rate, the amount specified in clause 39.7 (or that amount as increased under this clause) will be increased by an adjustment factor.

(b) The adjustment factor is the percentage movement in the consumer price index figure for the Take away and fast foods expenditure class published by the Australian Bureau of Statistics for the Eight Capitals Consumer Price Index (Cat No. 6401.0):

(i) for the first increase, since [date of commencement of clause 39.7] ; and

(ii) for any subsequent increase, since the amount was last increased under this clause

20. By deleting the definition of food and beverage attendant grade 2 in clause D.2.1 of Schedule D and inserting the following:

Food and beverage attendant grade 2 means an employee who has not achieved the appropriate level of training and who is engaged in any of the following:

• supplying, dispensing or mixing of liquor including the sale of liquor from the bottle department;

• assisting in the cellar or bottle department;

• undertaking general waiting duties of both food and/or beverage including cleaning of tables

• receipt of monies;

• attending a snack bar;

• engaged on delivery duties; and

• taking reservations, greeting and seating guests.

21. By deleting Schedule H.1(d) and inserting the following:

(d) Where a part-time or full-time employee is usually rostered to work ordinary hours between 7.00 pm and midnight, but as a result of having a rostered day off or an accrued day off provided in this award, does not work, the employee will be taken to be a on a public holiday for such hours and paid their ordinary rate of pay for those hours.

22. By updating the table of contents and cross-references accordingly.

B. This determination comes into operation from [XX December 2018]. In accordance with s.165(3) of the Fair Work Act 2009 these items do not take effect until the start of the first full pay period on or after [date to be inserted].

PRESIDENT

Printed by authority of the Commonwealth Government Printer

Attachment D: Draft variation determination – Restaurant award

MA000119 PRXXXXX X

DRAFT DETERMINATION

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

4 yearly review of modern awards – Restaurant Industry Award 2010 – substantive issues

(AM2017/57)

RESTAURANT INDUSTRY AWARD 2010

[MA000119]

Restaurants
JUSTICE ROSS, PRESIDENT DEPUTY PRESIDENT MASSON COMMISSIONER LEE	MELBOURNE, XX DECEMBER 2018

4 yearly review of modern awards – Restaurant Industry Award 2010– substantive issues.

A. Further to the Full Bench decision issued by the Fair Work Commission on XX December 2018 [2018] FWCFB XXXX, the above award is varied as follows:

1. By inserting a new clause 14.12 as follows:

14.12 Competency based progression

(a) For the purpose of competency based wage progression in clause 20.2 an apprentice will be paid at the relevant wage rate for the next stage of their apprenticeship if:

(i) competency has been achieved in the relevant proportion of the total units of competency specified in clause 20.2 for that stage of the apprenticeship. The units of competency which are included in the relevant proportion must be consistent with any requirements in the training plan; and

(ii) any requirements of the relevant State/Territory apprenticeship authority and any additional requirements of the relevant training package with respect to the demonstration of competency and any minimum necessary work experience requirements are met; and

(iii) either:

(A) the Registered Training Organisation (RTO), the employer and the apprentice agree that the abovementioned requirements have been met; or

(B) the employer has been provided with written advice that the RTO has assessed that the apprentice meets the abovementioned requirements in respect to all the relevant units of competency and the employer has not advised the RTO and the apprentice of any disagreement with that assessment within 21 days of receipt of the advice.

(b) If the employer disagrees with the assessment of the RTO referred to in clause 14.12(a)(iii)(B) above, and the dispute cannot be resolved by agreement between the RTO, the employer and the apprentice, the matter may be referred to the relevant State/Territory apprenticeship authority for determination. If the matter is not capable of being dealt with by such authority it may be dealt with in accordance with the dispute resolution clause in this award. For the avoidance of doubt, disputes concerning other apprenticeship progression provisions of this award may be dealt with in accordance with the dispute resolution clause.

(c) For the purposes of this clause, the training package containing the qualification specified in the contract of training for the apprenticeship, sets out the assessment requirements for the attainment of the units of competency that make up the qualification. The definition of “competency” utilised for the purpose of the training packages and for the purpose of this clause is the consistent application of knowledge and skill to the standard of performance required in the workplace. It embodies the ability to transfer and apply skills and knowledge to new situations and environments.

(d) The apprentice will be paid the wage rate referred to in clause 14.12(a) from the first full pay period to commence on or after the date on which an agreement or determination is reached in accordance with clause 14.12(a)(iii) or on a date as determined under the dispute resolution process in clause 14.12(b).

(e) If the apprentice disagrees with the assessment of the RTO referred to in clause 14.12(a), and the dispute cannot be resolved by agreement between the RTO, the employer and the apprentice, the apprentice may refer the matter to the relevant State/Territory apprenticeship authority for determination. If the matter is not capable of being dealt with by such authority it may be dealt with in accordance with the dispute resolution clause in this award. For the avoidance of doubt, disputes concerning other apprenticeship progression provisions of this award may be dealt with in accordance with the dispute resolution clause.

2. By deleting clause 20.2 and inserting the following:

20.2 Apprentice wages

(a) Minimum wages

(i) A person who has completed a full apprenticeship for which there is a trade qualified classification provided for in this award, must be paid no less than the standard hourly rate for each hour worked.

(ii) Except where clause 20.2(a)(iii) is applicable an employee will be paid in accordance with the following table:

Percentage of the rate prescribed in clause Error! Reference source not found. for a Cook grade 3	Minimum weekly wage	Minimum hourly wage
%	$	$
1st year	55	460.57	12.12
2nd year	65	544.31	14.32
3rd year	80	669.92	17.63
4th year	95	795.53	20.94

(iii) Competency based wage progression

Where the relevant apprenticeship legislation allows competency based progression and the training contract does not specify otherwise, an employee apprenticed in a trade after < date of the Determination> will be paid the percentage of the standard hourly rate for each hour worked, in accordance with the following table:

(A) Four year apprenticeship (nominal term)

Stage of apprenticeship	Minimum training requirements on entry	% of the standard hourly rate
Stage 1	On commencement and prior to the attainment of the minimum training requirements specified for Stage 2	55
Stage 2	On attainment of 25% of the total competencies specified in the training plan for the relevant AQF Certificate III qualification; or 12 months after commencing the apprenticeship, whichever is the earlier	65
Stage 3	On attainment of 50% of the total competencies specified in the training plan for the relvant AQF Certificate III qualification; or 12 months after commencing Stage 2, whichever is the earlier	80
Stage 4	On attainment of 75^ of the total competencies specified in the training plan for the relevant AQF Certificate III qualification; or 12 months after commencing Stage 3, whichever is the earlier.	95

(b) Proficiency payments – cooking trade

(i) Application

Proficiency pay as set out in clause 20.2(b)(ii) will apply to apprentices who have successfully completed their schooling in a given year.

(ii) Payments

Apprentices will receive the rate of pay of a qualified cook during the latter half of the fourth year of the apprenticeship where the standard of proficiency has been attained on one, two or three occasions on the following basis:

(1) one occasion only:

• for the first nine months of the fourth year of apprenticeship, the normal fourth year rate of pay;

• thereafter, the standard hourly rate.

(2) on two occasions:

• for the first six months of the fourth year of apprenticeship, the normal fourth year rate of pay;

• thereafter, the standard hourly rate.

(3) on all three occasions:

• for the entire fourth year, the standard hourly rate.

(c) Adult apprentices

(i) The minimum wage of an adult apprentice who commenced on or after 1 January 2014 and is in the first year of their apprenticeship must be 80% of the rate prescribed for a Cook grade 3, or the rate prescribed by clause 20.2(a) for the relevant year of the apprenticeship, whichever is the greater.

(ii) The minimum wage of an adult apprentice who commenced on or after 1 January 2014 and is in the second and subsequent years of their apprenticeship must be the rate for the lowest adult classification in clause 20.1, or the rate prescribed by clause 20.2(a) for the relevant year of the apprenticeship, whichever is the greater.

(iii) A person employed by an employer under this award immediately prior to entering into a training agreement as an adult apprentice with that employer must not suffer a reduction in their minimum wage by virtue of entering into the training agreement, provided that the person has been an employee in that enterprise for at least six months as a full-time employee or twelve months as a part-time or regular and systematic casual employee immediately prior to commencing the apprenticeship. For the purpose only of fixing a minimum wage, the adult apprentice must continue to receive the minimum wage that applies to the classification specified in clause 20.1in which the adult apprentice was engaged immediately prior to entering into the training agreement.

3. By deleting clause 24.3(a) – clothing, equipment and tools allowance and inserting the following:

(a) Where a cook or an apprentice cook is required to use their own tools (and is not in receipt of a tool allowance), the employer must pay an allowance of $1.73 per day or part thereof up to a maximum of $8.49 per week.

4. By deleting clause 39 in its entirety.

5. By updating the table of contents and cross-references accordingly.

PRESIDENT

Printed by authority of the Commonwealth Government Printer

1 [2017] FWC 5530.

2 [2018] FWCFB 1548 at [396].

3 [2018] FWC 2761. Amended directions also issued on 3 and 20 July 2018.

4 [2018] FWC 5779.

5 Report to the Full Bench and Directions - Restaurant and Hospitality Award, 14 November 2018.

6 ABI and NSWBC submission in reply, 5 November 2018; submission in reply, 19 November 2018.

7 AHA and others submission in reply, 18 September 2018; submission, 24 July 2018; submission, 8 February 2018; submission, 24 November 2017; submission, 13 October 2016.

8 RCI correspondence of 13 July 2018; submission in reply of 18 September 2018.

9 United Voice submission, 24 July 2018; submission in reply, 2 November 2018.

10 Transcript, 9 November 2018.

11 Report to the Full Bench – Restaurant and Hospitality Award, 14 November 2018.

12 AHA and others Joint Report, 20 November 2018.

13 ABI and NSWBC submission, 19 November 2018.

14 Transcript, 26 November 2018 and Transcript, 27 November 2018.

15 Shop, Distributive and Allied Employees Association v The Australian Industry Group[2017] FCAFC 161 at [38].].

16 O’Sullivan v Farrer(1989) 168 CLR 210 at [12]-[13].

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

18 [2017] FWCFB 1001 at [128]; Shop, Distributive and Allied Employees Association v The Australian Industry Group[2017] FCAFC 161 at [41]–[44].

19 [2018] FWCFB 3500 at [21]-[24].

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

21 Shop, Distributive and Allied Employees Association v The Australian Industry Group[2017] FCAFC 161 at [33].

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

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

24 Shop, Distributive and Allied Employees Association v The Australian Industry Group[2017] FCAFC 161.

25 Ibid at [48].

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

27 [2017] FWCFB 1001.

28 Ibid at [269].

29 CFMEU v Anglo American Metallurgical Coal Pty Ltd[2017] FCAFC 123.

30 Ibid at [46].

31 [2017] FWCFB 1001 at [760] – [765].

32 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.

33 AHA and others submission, 13 October 2016.

34 AHA and others submission, 20 November 2018.

35 [2013] FWCFB 5411 at [270].

36 Ibid.

37 [2013] FWCFB 5411 at [295].

38 During the course of the hearing the Associations withdrew the claims in Item 2 – Multi hiring arrangements; part of Item 21 – dealing with averaging over 26 weeks; and Item 39 – in part, dealing with the Clerical Grade 3 classification. See AHA correspondence, 26 November 2018.

39 AHA and others submission, 24 July 2018.

40 United Voice submission in reply, 18 September 2018.

41 Transcript, 27 November 2018 at PN224.

42 AHA submissions, 13 October 2016 at para 22; submission, 12 November 2015 at paras 24 – 28.

43 AHA and others submission, 24 July 2018 at paras 207-214.

44 United Voice submission in reply, 18 September 2018 at paras 78-80.

45 [2017] FWCFB 1001 at [194] to [196].

46 AHA and others submission, 24 July 2018 at paras 218-232.

47 United Voice submissions in reply, 18 September 2018 at paras 89 to 96.

48 Ibid at para 94.

49 Ibid at para 95.

50 Australian Education Union v State of Victoria (Department of Education and Early Childhood Development) (AEU) [2015] FCA 1196.

51 Ibid at [176].

52 Matter C2004/4556 Transcript 31 August 2004 at [30] to [38].

53 Transcript, 27 November 2018 at PN272 – PN273.

54 Ibid at PN277 – PN278.

55 AHA and others submission, 24 July 2018 at para 247.

56 [2017] FWCFB 3541.

57 [2014] FWCFB 1996.

58 See Exhibit A13 at [39]; Exhibit A14 at [35] and Exhibit A21 at [44].

59 United Voice submission, 24 July 2018.

60 AHA and others submission, 18 September 2018 at paras 11-12; Joint Report, 20 November 2018 at para 4.

61 ABI and NSWBC submissions in reply, 5 November 2018 at paras 4.1 – 4.14.

62 RCI submission in reply, 18 September 2018.

63 [2017] FWCFB 1001 at [1018]-[1022].

64 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.

65 RCI also sought the payment of wages provisions be varied to allow for payment on all days of the week. This claim has been referred to the Payment of Wages common issue Full Bench for determination.

66 Exhibit RCI1; Transcript 26 November 2018 at PN34 to PN327.

67 Exhibit RCI2; Transcript 26 November 2018 at PN355-PN493.

68 RCI submission, 2 March 2015; submission of 12 October 2016; submission of 24 July 2018.

69 RCI submission, 24 July 2018 at para 22.

70 RCI submission, 24 July 2018.

71 United Voice submission in reply, 2 November 2018.

72 Witness Statement of Kris Raymond Bunder, 24 July 2018 at para 15.

73 Transcript, 26 November 2018 at PN104.

74 Ibid at PN68 – PN74.

75 Ibid at PN163 and PN186.

76 Transcript, 26 November 2018 at PN186.

77 Ibid at PN281-PN282, PN288.

78 Witness Statement of Francis Edmund Brailey, 24 July 2018 at paras 14 – 16.

79 Transcript, 26 November 2018 at PN373 – PN374.

80 Ibid at PN386 – PN392.

81 Ibid at PN421 and PN423.

82 Ibid at PN398 – PN399.

83 Transcript, 26 November 2018 at PN556.

84 Ibid at PN556.

85 RCI submission, 2 March 2015 at para 13; submission, 12 October 2016 at para 25.

86 RCI submission, 24 July 2018 at para 5.

87 Ibid.

88 PR610285.

89 RCI submission, 24 July 2018 at paras 6 – 9.

90 Fair Work Ombudsman, Food Precincts Activity Report, July 2018, page 3. Note: This figure includes employees covered by the Restaurant Industry Award 2010, Hospitality Industry (General) Award 2010 and the Fast Food Industry Award 2010, accessed at Fair Work Ombudsman, ‘FWO’s Food Precincts campaign returns $471,904 in wages owed to hospitality workers’, 11 July 2018, accessed at United Voice submission in reply, 2 November 2018.

93 Witness Statement of Kris Raymond Bunder, 24 July 2018 at paras 20 - 23.

94 Transcript, 26 November 2018 at PN204 - PN216.

95 Ibid at PN209.

96 Transcript, 26 November 2018 at PN239 and PN265.

97 Ibid at PN239.

98 Ibid at PN244.

99 Transcript, 26 November 2018 at PN254.

100 Ibid at PN255.

101 Ibid at PN258.

102 Ibid, 26 November 2018 at PN251 – PN252.

103 Witness Statement of Francis Edmund Brailey, 24 July 2018 at paras 17 – 18.

104 Transcript, 26 November 2018 at PN440 – PN448.

105 Transcript, 26 November 2018 at PN450 – PN451 and PN468.

106 Transcript, 26 November 2018 at PN465, PN467 and PN489.

107 Ibid at PN457 – PN459 and PN466.

108 VECCI at Transcript paragraphs 184-185; NRA at Transcript paragraphs 209-212.

109 [2008] AIRCFB 550 at [70].

110 [2013] FWCFB 2170.

111 Transcript, 26 November 2018 at PN558 and PN560.

112 Transcript, 26 November 2018 at PN209.

113 Ibid at PN258.

114 Ibid at PN489.

115 Ibid.

116 Transcript, 26 November 2018 at PN258.

117 [2013] FWCFB 2170 at [201]-[202].

118 United Voice submission in reply, 2 November 2018 at para 15.

119 Fair Work Ombudsman, Food Precincts Activity Report, July 2018, page 3. Note: This figure includes employees covered by the Restaurant Industry Award 2010, Hospitality Industry (General) Award 2010 and the Fast Food Industry Award 2010, accessed at Fair Work Ombudsman, ‘FWO’s Food Precincts campaign returns $471,904 in wages owed to hospitality workers’, 11 July 2018, accessed at [2016] FWCFB 3177 at [135]–[140].

122 See MA000009 as at 19 December 2008 and MA000119 as at 4 December 2009.

123 [2013] FWC 5736.

124 PR540249.

125 Transcript 26 November 2018 at PN418.

126 ABS, Consumer Price Index, Concepts Sources and Methods, Australia, 2017, Catalogue No. 6461.0, p. 61.

127 ABS, Consumer Price Index, Concepts Sources and Methods, Australia, 2017, Catalogue No. 6461.0, p. 68.

128 United Voice submission, 24 July 2018 at Annexure A.

129 Ibid at paras 24 – 26.

130 Ibid at para 36.

131 Ibid at para 30.

132 Transcript, 27 November 2018 at PN17-PN19.

133 United Voice submission, 24 July 2018 at para 38.

134 Transcript, 27 November 2018 at PN47-PN51.

135 Transcript, 27 November 2018 at PN71 and PN183-PN188; see ABI submission, 5 November 2018 at paras 5.15(a) to (g).

136 RCI submission in reply, 18 September 2018 at paras 14-15.

4 yearly review of modern awards – Restaurant Industry Award 2010 – Hospitality Industry (General) Award 2010 – substantive issues