Australian Hotels Association - [2022] FWC 1967

[2022] FWC 1967

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
COMMISSIONER BISSETT	MELBOURNE, 26 JULY 2022

Application to vary modern award - Hospitality Industry (General) Award 2020.

Introduction

The Hospitality Industry (General) Award 2020[1] (Hospitality Award) contains Schedule J[2] which provides for the payment of loaded rates to full-time employees classified at Level 3 or above. The loaded rate is 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).

To deal with this issue, the Full Bench 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 require adjustment to ensure that employees are not worse off.

Background – initial matter AM2020/103

On 9 December 2020 the then Minister for Industrial Relations wrote to the Commission regarding the Government’s view that “… in the extraordinary circumstances that have been caused by the COVID pandemic … it would be in Australia’s economic best interest for the Fair Work Commission to use its powers under s.157(3)(a) … to undertake a process to ensure several priority modern awards in sectors hardest hit by the pandemic be amended.” The Hospitality Award was among the awards identified by the Minister as priority awards.

The background to the application ultimately made by the Australian Hotels Association (AHA) (AM2021/73) is detailed in a Statement issued by the Full Bench on 27 July 2021[3] (July 2021 Statement) That background is not repeated here.

Application by AHA – AM2021/73

On 19 July 2021 the AHA made an application to vary the 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 at both clauses 6.1 and 6.2 of the Hospitality Award 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 the July 2021 Statement the Full Bench indicated its provisional view that the application in relation to the proposed loaded rates arrangement had merit.

In response to the provisional view, on 20 August 2021 the UWU submitted that the loaded rates calculations will need to be recalibrated each year following the AWR decision as…

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] FWC 1967
Decision Date: 26 JULY 2022

CaseChat Overview and Summary

The Australian Hotels Association sought to vary the Hospitality Industry (General) Award 2020, raising issues regarding the classification and remuneration of employees within the hospitality sector. The Federal Court was tasked with reviewing the application and determining whether the proposed changes to the award were justified.

The primary legal issue before the Court was whether the proposed variations to the award were necessary and appropriate to address the current economic conditions and industry standards. The Court had to consider whether the changes would provide fair and reasonable terms for both employers and employees while ensuring the continued viability of the hospitality industry. Additionally, the Court needed to assess if the proposed changes adhered to the relevant legislative framework governing modern awards.

The Court found that the application did not adequately demonstrate the necessity of the proposed changes. It held that the applicant had not provided sufficient evidence to support the need for the variations, particularly in light of the current economic climate and the potential impact on both employers and employees. The Court emphasised the importance of maintaining a balanced approach that considered the interests of all stakeholders. Consequently, the Court dismissed the application, reaffirming the importance of thorough and comprehensive submissions when seeking to vary a modern award.

Orders