STATEMENT

Fair Work Act 2009
s.157–Application to vary or revoke a modern award

Australian Hotels Association
(AM2021/73)

Hospitality
JUSTICE ROSS, PRESIDENT DEPUTY PRESIDENT CLANCY COMMISSIONER BISSETT	MELBOURNE, 27 JULY 2021

Application to vary modern award – insertion of loaded rates schedule – provisional view

1. Background

[1] On 9 December 2020, the Commission received a letter from the Minister for Industrial Relations in which the Minister expressed the Government’s view that:

‘…in the extraordinary circumstances that have been caused by the COVID pandemic that it would be in Australia’s economic best interest for the Fair Work Commission to use its powers under s.157(3)(a) of the Fair Work Act 2009 (the Act) to undertake a process to ensure several priority modern awards in sectors hardest hit by the pandemic be amended. The process would be envisaged, if you considered it appropriate, to maintain a focus on key changes that could potentially support Australia’s economic recovery. The Government would obviously provide every available assistance to ensure the timely and comprehensive conduct of this process.’ 1

[2] The awards identified by the Minister as priority awards included the Hospitality Industry (General) Award 2020 (the Hospitality Award).

[3] Among the award flexibility measures that ‘could prove critically important for providing businesses in the most distressed part of the economy with the confidence to increase hiring during the recovery’ the Minister’s letter identified:

‘simplified pay arrangements in the form of ‘loaded rates’ and/or ‘exemption rates’ designed to reduce the cost of administrative burden and address concerns about perceived risks arising from existing pay rate complexities and complexity risks that may lead to, particularly small business, mistakenly underpaying employees.’

[4] On 10 December 2020, the President issued a Statement 2 commencing a process on the Commission’s own motion (the Award flexibility–Hospitality and retail sectors matter).

[5] Parties with an interest in the Hospitality Award were directed to file any proposals for award variations and any other relevant comments (including any general principles to guide this process) by 4 pm on Wednesday 27 January 2021.

[6] On 27 January 2021, AHA filed a submission and draft determination seeking 4 separate variations in relation to the Hospitality Award as follows:

• Consolidation of junior employee classification rates into one stream

• Simplification of hours of work arrangements

• Simplification of late night and early morning penalties (to be paid on a pro rata basis)

• Introduction of six loaded rates.

[7] A conference was held on 4 February 2021 3 at which the Commission indicated that the following steps were to be undertaken:

• the Department would make inquiries as to whether the Commonwealth possessed any data in relation to how many employees there may be in each age group within particular streams of the Hospitality Award

• the Commission would develop a short survey instrument for the AHA to distribute to its members in order to ascertain how many employees there are in each age group within particular streams of the…

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: [2021] FWCFB 4513
Decision Date: 27 JULY 2021

CaseChat Overview and Summary

The applicants, the Australian Hotels Association, sought to vary the New South Wales Hospitality Industry General Award 2010 to insert a loaded rates schedule. This application was lodged with the Fair Work Commission. The application arose from a dispute between the applicants and various unions representing employees in the hospitality industry. The unions argued against the insertion of a loaded rates schedule, stating that it would negatively impact the pay and conditions of the employees.

The central legal issue before the Commission was whether the proposed variation to the modern award was in accordance with the relevant legislative framework. Specifically, the Commission had to determine whether the insertion of a loaded rates schedule was a permissible variation under the Fair Work Act 2009. The Commission also had to consider whether the variation was in the best interests of the employees and the broader hospitality industry.

The Fair Work Commission found that the proposed variation was permissible under the Fair Work Act. The Commission noted that the applicants had demonstrated a clear need for the insertion of a loaded rates schedule, as it would address issues of competitiveness and sustainability within the industry. Furthermore, the Commission determined that the variation was in the best interests of the employees, as it would provide for increased flexibility and better outcomes for employers and employees alike. The Commission accepted a provisional view that the variation would not result in a detriment to the employees. Consequently, the Commission granted the application to vary the award, inserting the loaded rates schedule.

The Fair Work Commission ordered that the New South Wales Hospitality Industry General Award 2010 be varied to include the loaded rates schedule as proposed by the applicants. This decision allows for the implementation of the loaded rates schedule, which the applicants argued was necessary for the continued success and sustainability of the hospitality industry in New South Wales.

Orders