Australian Hotels Association - [2022] FWCFB 162

[2022] FWCFB 162

FAIR WORK COMMISSION

STATEMENT

Fair Work Act 2009

s.158—Application to vary or revoke a modern award

Australian Hotels Association

(AM2021/73)

Hospitality industry
JUSTICE ROSS, PRESIDENT DEPUTY PRESIDENT CLANCY COMMISSIONER BISSETT	MELBOURNE, 26 AUGUST 2022

Application to vary modern award – Schedule J—Loaded Rate Arrangements – Hospitality Industry (General) Award 2020.

Introduction

[1] Schedule J[1] of the Hospitality Industry (General) Award 2020 (Hospitality Award) provides for the payment of loaded rates to full-time employees classified at Level 3 or above in satisfaction of the requirement to pay overtime, penalty rates (except public holidays penalties) and the split shift allowance.

During the hearing of the application which resulted in the insertion of the loaded rates into the Hospitality Award the United Workers’ Union (UWU) submitted that the loaded rate percentages would need to be recalibrated each year to deal with any potential increase to the split shift allowance flowing from the Annual Wage Review (AWR).

In response to that issue we indicated that a conference would be convened by Commissioner Bissett following the publication of the 2021-22 AWR decision to discuss whether the loaded rates in Schedule J require adjustment to ensure that employees are not worse off.

The Commission issued its decision in the Annual Wage Review 2021–22[2] on 15 June 2022 and a determination[3] was published on 28 June 2022 to varying the Hospitality Award.

Commissioner Bissett issued a Statement[4] in respect of these issues and listed the matter for conference on 16 August 2022.

Commissioner Bissett’s Statement[5] outlined that Commission staff had undertaken a BOOT analysis of the loaded rates contained in Schedule J which indicated that some employees would be worse off following the decision in the Annual Wage Review 2021–22[6]

Correspondence was then received from the:

· Australian Hotels Association; and
· United Worker’s Union

Attached to this Statement is the Report to the Full Bench prepared by Commissioner Bissett which states:

‘[15] Arising from this review it is proposed that the rates be recalibrated such that the Level 3, 40 hour, Monday to Friday rate only increase from 110.20% to 110.30% and that clauses J.5.1 and J.5.2 be amended as per Schedule A.

[16] As the determination issued in the Annual Wage Review 2021–22 will commence operation on 1 October 2022, the Full Bench may consider that the determination in this matter should come into effect on 2 October 2022 to avoid any confusion as to the timing of the adjustments.’

Consideration and next steps

The change proposed in Commissioner Bissett’s Report is agreed between the parties as a suitable resolution to the problem identified in our initial decision inserting the loaded rates.

It is our provisional view that the variation should be made in the terms set out in the Report to the Full Bench. A draft determination has been prepared and will be published with this statement.

Any submissions opposing our provisional view are to be filed by 4pm on Friday
9 September 2022. Any submissions are to be…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] FWCFB 162
Decision Date: 26 AUGUST 2022

CaseChat Overview and Summary

In this case, the Australian Hotels Association (AHA) sought to vary the Hospitality Industry (General) Award 2020 to incorporate a simplified pay arrangement in the form of loaded rates. This was to reduce administrative costs and risks arising from existing pay complexities. The dispute was considered by the Fair Work Commission, where the AHA’s application to vary the award was initially supported by a provisional view from the Full Bench, but later found to be unsuitable for certain classifications of employees.

The central legal issue was whether the loaded rates proposed by the AHA would leave employees financially worse off compared to the existing hourly rates and loadings. This involved a detailed analysis of the loaded rates against the existing pay structures to ensure that the proposed changes did not disadvantage employees.

The Commission conducted an analysis and found that while most of the loaded rates were suitable, the 110.20% Monday to Friday 40 hour loaded rate was not suitable for standard Level 3 Award employees, as they would be 6 cents worse off on the worst-case roster pattern. The Commission subsequently issued a determination varying the Hospitality Award to address this issue, maintaining the suitability of the loaded rates for other classifications.

In the absence of opposition, the Commission’s provisional view will be confirmed, and the variation will be made operative from 2 October 2022. The court has thus resolved the dispute by ensuring that employees are not financially worse off due to the changes in the award.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Consideration and next steps The change proposed in Commissioner Bissett’s Report is agreed between the parties as a suitable resolution to the problem identified in our initial decision inserting the loaded rates. It is our provisional view that the variation should be made in the terms set out in the Report to the Full Bench. A draft determination has been prepared and will be published with this statement. Any submissions opposing our provisional view are to be filed by 4pm on Friday 9 September 2022. Any submissions are to be sent to Chambers.Ross.J@fwc.gov.au. In the absence of any opposition, we will confirm our provisional view and the variation will be made in the terms set out in the draft determination, operative 2 October 2022. On 19 July 2021 the AHA made an application to vary the Hospitality Industry (General) Award 2020[7] (Hospitality Award) to “incorporate a new schedule to provide a simplified pay arrangement in the form of loaded rates to reduce administrative costs and risks arising from existing pay complexities”. A BOOT analysis of the loaded rates contained in the AHA draft determination was conducted by Commission staff on 20 July 2021. That analysis indicated that the rates in Schedule K (as it was then) at both clauses K.6.1 and K.6.2 of the Hospitality Award would result in employees earning more under the loaded rate when compared to the hourly rates and loadings applicable under the Hospitality Award when working within the parameters set out in clause 6. In a Statement[8] issued by the Full Bench on 27 July 2021 (July 2021 Statement) the Full Bench indicated its provisional view that the application in relation to the proposed loaded rates arrangement had merit. In a Decision[9] issued on 3 September 2021 (September 2021 Decision) the Full Bench said: The Commission issued its decision in the Annual Wage Review 2021–22[10] on 15 June 2022. Subsequently a Determination[11] was published on 28 June 2022 to vary the Hospitality Award relevantly as follows: In accordance with the September 2021 Decision, the revised loaded rates in the Hospitality Award were subject to analysis to ensure that they continued to leave workers not financially worse off than they otherwise would be if the loaded rate did not apply. That review found that the 110.20% Monday to Friday 40 hour loaded rate in clause J.5.1 of the Hospitality Award is no longer suitable for standard Level 3 Award employees. This employee will be 6 cents worse off on the worst-case roster pattern that can be worked under this loaded rate. The 110.20% Monday to Friday 40 hour loaded rate remains suitable for all other classifications subject to the loaded rates scheme in Schedule J (previously Schedule K). The remaining 5 loaded rates in clause J.5.1 remain suitable for all classifications subject to the loaded rates scheme in Schedule J. In accordance with the September 2021 Decision I issued a Statement on 26 July 2022 (July 2022 Statement)[12] in which I outlined the background and provided the analysis of the loaded rates against the unloaded rates as prepared by Commission staff. A conference of the interested parties was scheduled for Tuesday 16 August 2022. The parties were also asked to express any preliminary view they may have on how the identified issue might be addressed.