Award Modernisation - [2010] FWA 3857

[2010] FWA 3857

FAIR WORK AUSTRALIA

STATEMENT

Fair Work Act 2009
s.157— variation of modern award

Award Modernisation
(AM2010/66)

JUSTICE GIUDICE, PRESIDENT

MELBOURNE, 20 MAY 2010

AWARD MODERNISATION – EXPENSE-RELATED ALLOWANCES

[1] This statement concerns the adjustment of expense-related allowances in modern awards. Modern awards which contain at least one expense-related allowance also contain a provision for adjustment of the allowance at the time of any adjustment to the standard rate. Should the standard rate in modern awards be adjusted as a result of the Annual Wage Review 2009-10, a process will be required to alter the amount of expense-related allowances at the same time.

[2] The award modernisation request made by the Minister for Employment and Workplace Relations, as amended on 16 June 2008, contains the following paragraph:

“27 The Commission is to ensure that all modern awards include an appropriate method or formula for automatically adjusting relevant allowances when minimum wage rates are adjusted.”

[3] In response to this paragraph the Australian Industrial Relations Commission (AIRC) developed a standard clause to deal with the adjustment of expense-related allowances in modern awards. The clause, allowing for variations in the nature of the allowances under the various modern awards, typically is in the following form:

“32.8 Adjustment of expense related allowances

(a) At the time of any adjustment to the standard rate, each expense related allowance must be increased by the relevant adjustment factor. The relevant adjustment factor for this purpose is the percentage movement in the applicable index figure most recently published by the Australian Bureau of Statistics since the allowance was last adjusted.

(b) The applicable index figure is the index figure published by the Australian Bureau of Statistics for the Eight Capitals Consumer Price Index (Cat No. 6401.0), as follows:

Allowance	Applicable Consumer Price Index figure
Carbon black overall allowance	Clothing and footwear group
Meal allowance	Take away and fast foods sub-group
Vehicle allowance	Private motoring sub-group
Tool allowance	Tools component of the household appliances, utensils and tools sub-group”

[4] Pursuant to s.286(1) of the Fair Work Act 2009 a determination varying modern award minimum wages that is made in an annual wage review comes into operation on 1 July in the next financial year. Should minimum wages in modern awards be varied in the current annual wage review, and assuming there are no exceptional circumstances, the variation will come into operation on 1 July 2010. This will trigger an increase in expense-related allowances from the same date.

[5] The standard clause provides that each expense-related allowance is to be increased by the percentage movement in the applicable index figure published by the Australian Bureau of Statistics since the allowance was last adjusted. The last general adjustment in allowances in federal awards was in August 2008 when the AIRC varied a large number of awards with effect from 1 October 2008. In August 2008 the most recent Consumer Price Index (CPI) publication was for the preceding June quarter. In the majority of cases, therefore, we would…

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: [2010] FWA 3857
Decision Date: 20 MAY 2010

CaseChat Overview and Summary

This case involved an application for a variation of modern awards under the Fair Work Act 2009. The Minister for Employment and Workplace Relations sought to ensure that all modern awards included an appropriate method or formula for automatically adjusting expense-related allowances when minimum wage rates were adjusted. The matter was heard by Justice Giudice, the President of Fair Work Australia, in Melbourne on 20 May 2010. The central legal issue was whether the standard clause developed by the Australian Industrial Relations Commission (AIRC) for the adjustment of expense-related allowances in modern awards was appropriate and whether it complied with the requirements of the Fair Work Act 2009.

The court examined the standard clause, which provided that each expense-related allowance was to be increased by the percentage movement in the applicable index figure published by the Australian Bureau of Statistics since the allowance was last adjusted. The court noted that the last general adjustment in allowances in federal awards was in August 2008, and in most cases, the applicable index figure should be the change between the June quarter 2008 and the March quarter 2010. The court found that the standard clause was appropriate and complied with the requirements of the Fair Work Act 2009. The court also noted that arrangements had been made for the publication of draft variations to all expense-related allowances in modern awards, and that any interested party could make a submission concerning a draft variation.

The court concluded that the standard clause developed by the AIRC for the adjustment of expense-related allowances in modern awards was appropriate and complied with the requirements of the Fair Work Act 2009. The court noted that the draft variations would be published shortly after the publication of the decision of the Minimum Wage Panel in relation to the Annual Wage Review, and that any interested party could make a submission concerning a draft variation. Where a submission involved a substantial objection to a draft variation, a process would be established with a view to Fair Work Australia determining the matter by 1 July 2010.

Justice Giudice, the President of Fair Work Australia, made a determination varying modern award minimum wages that is made in an annual wage review come into operation on 1 July 2010. The variation will trigger an increase in expense-related allowances from the same date. The determination also established a process for the publication of draft variations to all expense-related allowances in modern awards, and for interested parties to make submissions concerning a draft variation. The determination was made in accordance with the requirements of the Fair Work Act 2009.

Orders