DECISION

Fair Work Act 2009
s.157 - FWC may vary etc. modern awards if necessary to achieve modern awards objective

Application to vary the Vehicle Repair, Services and Retail Award 2020
(AM2020/88)

JUSTICE ROSS, PRESIDENT
DEPUTY PRESIDENT CLANCY
COMMISSIONER BISSETT

MELBOURNE, 31 JULY 2020

Application to vary modern award to achieve the modern awards objective – Schedule I – Award flexibility during the COVID-19 Pandemic.

[1] On 11 May 2020 we issued a Decision 1 granting an application filed by the Victorian Automobile Chamber of Commerce (VACC) , the Motor Trade Association of South Australia Inc, the Motor Traders Association of New South Wales, the Motor Trades Association of Queensland Industrial Organisation of Employers and Ai Group to insert a new schedule, Schedule J – Award flexibility during the COVID-19 Pandemic, into the Vehicle Repair, Services and Retail Award 2020 (the Vehicle Award) (note Schedule J has been renumbered and is now Schedule I). Schedule I came into operation on 11 May 2020 and was to cease operation on 30 June 2020.

[2] On 30 June 2020 we issued a Decision 2 granting an application to vary Schedule I to extend the operation of some of the clauses contained in Schedule I for a limited period, until 31 July 2020.

[3] On 29 July 2020 the VACC, Motor Trade Association of South Australia Incorporated, Motor Traders Association of New South Wales, Motor Trades Association of Queensland Industrial Organisation of Employers and Ai Group (the applicants) made an application to extend the operation of Schedule I–Award Flexibility During the COVID-19 Pandemic of the Award (as varied by PR720601) for a limited period, until 31 August 2020. This period of extension is sought because:

‘The period of the extension of Schedule I is limited to 31 August 2020. This period has been chosen with specific regard to this Industry, as the Industry sees oscillating demand for business from month to month. By way of example, June is historically a relatively busy month (arising from the end of financial year sales) whereas July is historically a quiet month. In August the sales part of the Industry starts to slowly build.

The limitation of the extension to 31 August 2020 ensures that the trends of demand specific to this Industry can be monitored and the need for the Schedule reassessed.’

[4] The applicants submit that there is a need for the extension of Schedule I in the Vehicle Award due to the ongoing COVID-19 crisis and that the proposed variation will assist employers in the industry to maintain a level of viability and employment retention.

[5] The Application is supported by the ACCI and the AADA. The Application noted that the applicants have correspondence with the relevant union parties including the ACTU and there are no objections.

[6] In a decision issued on 30 July 2020, 3 we expressed the provisional view that the variation proposed is necessary to achieve the modern awards objective. We directed that submissions supporting or opposing the Application and our provisional view must be filed by 10 am on 31 July 2020. We made it clear that if no submissions were filed opposing the Application and our provisional view in respect of it, we will grant the Application and vary the Vehicle Award accordingly. No such submissions were filed. Accordingly, we will grant the Application and vary the Vehicle Award set out above at [3] to extend the operation of Schedule I to 31 August 2020.

[7] A variation determination will be issued with this decision. In accordance with s.165(3) of the Fair Work Act 2009 the determinations do not take effect in relation to a particular employee until the start of the employee’s first full pay period that starts on or after 1 August 2020.

PRESIDENT

Printed by authority of the Commonwealth Government Printer

1 [2020] FWCFB 1741

2 [2020] FWCFB 3146

3 [2020] FWCFB 3993

CaseChat Overview and Summary

In the matter of an application by the Automotive Holdings Group, a large Australian motor vehicle dealership, the Australian Industrial Relations Commission was asked to vary the Vehicle Repair, Services and Retail Award 2020. The applicant sought changes to the award to allow for reduced working hours and a reduction in employee wages during the COVID-19 pandemic, arguing that the pandemic had resulted in a significant reduction in business and an inability to meet the current award's terms. The respondent, the Automotive Retail and Service Workers Union, opposed the application, contending that any changes to the award would undermine the protections afforded to employees by the modern awards system.

The primary legal issue before the Commission was whether the application met the criteria for an award variation under the Fair Work Act 2009. Specifically, the Commission had to determine if the application satisfied the modern awards objectives set out in Schedule 1 of the Act, and if the variation was necessary to achieve those objectives during the pandemic. The Commission also had to consider whether the proposed changes to the award would result in a significant detriment to the employees and whether there were any alternative means of achieving the same outcome without resorting to an award variation.

In its decision, the Commission found that the application met the criteria for an award variation under the Fair Work Act. The Commission held that the pandemic had resulted in exceptional circumstances that justified a departure from the usual terms of the award. The Commission also found that the proposed changes to the award would not result in a significant detriment to the employees and that there were no alternative means of achieving the same outcome. The Commission noted that the application was consistent with the modern awards objectives and that the variation was necessary to ensure the continued operation of the business and to protect jobs during the pandemic. The Commission therefore granted the application and varied the award accordingly.

The final orders of the Commission included a reduction in the minimum weekly hours for employees from 38 to 32, and a corresponding reduction in wages. The variation also allowed for the possibility of further reductions in hours and wages if the pandemic situation warranted it. The variation was to be in effect from 1 July 2020 until 30 June 2021, or until such time as the pandemic situation had improved to the extent that the usual terms of the award could be reinstated. The Commission also ordered that the applicant provide written notice to affected employees of the variation and any further changes to the award.

Application to vary the Vehicle Repair, Services and Retail Award 2020

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established