Confederation of A.C.T. Industry

[2012] FWA 10367

[2012] FWA 10367

FAIR WORK AUSTRALIA

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 5, Item 6 - Review of all modern awards (other than modern enterprise and State PS awards) after first 2 years

Confederation of A.C.T. Industry
(AM2012/249)

Children’s services
DEPUTY PRESIDENT HAMILTON	MELBOURNE, 18 DECEMBER 2012

Modern Awards Review 2012 - application to vary the Children’s Services Award 2010 - Family Day Care Workers.

Introduction

[1] This decision concerns an application by the ACT and Region Chamber of Commerce and Industry (ACT Chamber) to vary the Children’s Services Award 2010 (Award). 1The applications are made under Schedule 5, Item 6 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) as part of the review of all modern awards which Fair Work Australia is required to conduct after the first two years of all modern awards coming into effect (2012 Review).

[2] The applicant sought an adjournment of its application, and it was accordingly not dealt with in my earlier decision in relation to the award 2. A further conciliation conference was held in relation to the matter. The parties were directed to file final written submissions by 7 December 2012.

[3] I have had regard to the earlier submissions put, and the final submission by the applicant.

The Legislation

[4] Schedule 5, Item 6 of the Transitional Act provides:

“(1) As soon as practicable after the second anniversary of the FW (safety net provisions) commencement day, FWA must conduct a review of all modern awards, other than modern enterprise awards and State reference public sector modern awards.

(2) In the review, FWA must consider whether the modern awards:

(a) achieve the modern awards objective; and

(b) are operating effectively, without anomalies or technical problems arising from the Part 10A award modernisation process.

(2A) The review must be such that each modern award is reviewed in its own right. However, this does not prevent FWA from reviewing 2 or more modern awards at the same time.

(3) FWA may make a determination varying any of the modern awards in any way that FWA considers appropriate to remedy any issues identified in the review.

(4) The modern awards objective applies to FWA making a variation under this item, and the minimum wages objective also applies if the variation relates to modern award minimum wages.

(5) FWA may advise persons or bodies about the review in any way FWA considers appropriate.

(6) Section 625 of the FW Act (which deals with delegation by the President of functions and powers of FWA) has effect as if subsection (2) of that section included a reference to FWA’s powers under subitem (5).”

[5] Provisions of the Fair Work Act 2009 (the Act) are also applicable and relevant to the 2012 Review. Sections 134 and 138 provide as follows:

“134 The modern awards objective

What is the modern awards objective?

(1) FWA must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account:

(a) relative living standards and the needs of the low paid; and

(b) the need to encourage collective bargaining; and

(c) the need to promote social inclusion through increased workforce participation; and

(d) the need to promote flexible modern work practices and the efficient and productive performance of work; and

(e) the principle of equal remuneration for work of equal or comparable value; and

(f) the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; and

(g) the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards; and

(h) the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy.

This is the modern awards objective.

. . .

138 Achieving the modern awards objective

A modern award may include terms that it is permitted to include, and must include terms that it is required to include, only to the extent necessary to achieve the modern awards objective and (to the extent applicable) the minimum wages objective.”

History of the Award

[6] It is relevant to again repeat the history of the making of this award, in order to ascertain the nature of the decision made with respect to the family day care centre during the making of the award. The Full Bench expressly decided not to extend the application of the award to that sector. The award was made by the Award Modernisation Full Bench during the 4th stage of the award modernisation process. The Award Modernisation Full Bench said in September 2009: 3

“[93] We publish a draft Children’s Services Award 2010. The classification structures for childcare employees have, in recent times, been the subject of work value assessments by the Commission and this is reflected in the exposure draft. The structure includes family day care co-ordinators. We recognise that these classifications may also be included in the exposure draft for the Social, Community, Home Care and Disability Services Industry Award 2010. Award coverage will depend on the industry of the employer.

[94] We have not included family day care workers in the draft award. The only award currently covering these workers is confined in its operation to the Australian Capital Territory.”

[7] The Award Modernisation Full Bench said in December 2009: 4

“[69] Following submissions and consultations on the exposure draft changes have been made to this award to reflect the consensus of the major parties on span of hours, minimum shift lengths, overtime for part-time employees and junior rates. We have also rectified an error in the classification structure concerning the level for employees classified as ‘E’ workers under the Western Australian transitional award-based instrument and limited the application of non-contact time to employees with programming responsibilities. There are also some minor changes to allowances.

[70] We have taken into account the views of the parties with respect to the transitional provisions. This has resulted in some modification of the model clause. We have also taken into account the position of non-teaching staff in pre-schools who currently work according to the same provisions, with respect to school vacations, as teachers. The exposure draft has been altered in some other respects to make the conditions of teachers and children’s services employees in the same workplace more consistent.”

Submissions

[8] The applicant submitted that a revised application should be granted. It submitted that under its proposed award provisions for family day care workers pieceworkers could earn at least 15% more per hour than the minimum hourly rate prescribed in the award for the type of employment and the classification level of the employee, and a higher percentage above the award for workers caring for at least four children. It submitted that the award does not operate effectively and efficiently for the residential based family day care operating in the ACT. Undesirable consequences had flown from the modernisation process and the termination of the pre-modern ACT award instrument covering family day care services.

[9] The applicant was not supported by any other party. United Voice agreed that current award provisions are inadequate, and claimed that there was an anomaly or technical problem. It submitted that it did not agree with the insertion of a piece rate system into the award. Rather the award should be varied to provide family day care workers to be covered by the award classification system of minimum wage rates, and classified according to skill, responsibility and qualifications in the same way that other workers are. UV attached a witness statement from Ms.Wolthof, which related to difficulties she experienced in relation to the change in award regulation following the making of the modern award. She opposed the application made in this case. Mrs.Wolthof wrote two further submissions, emphasising her concern about the issue of award coverage of the sector. She raised the issue of who in the family day care sector is covered by the award.

[10] Community Connections Solutions Australia (CCSA) submitted that the proposal could not be supported. It said that in NSW and the rest of Australia there was a ‘reality of a vibrant Family Day Care sector’, coexisting with the award which had operated for two years. It submitted that this issue should be reviewed with any review of the award in 2014, which would allow full and proper consultation with all relevant stakeholders.

[11] Falcan opposed the application, and submitted that family day care workers were self-determining independent contractors, finding their own clients, setting their own hours of availability, and setting their own charge rate. It submitted that the ACT award had only limited application.

Decision

[12] In June 2012, the 2012 Review Full Bench handed down a decision in relation to the 2012 Review 5. At paragraph 63 the Full Bench said:

“[63] Under sub item 6(3) of Schedule 5, the Tribunal has a broad discretion to vary any of the modern awards in any way that it considers necessary to remedy any issues identified in the Review. However, sub item 6(4) provides that in making such a variation the Tribunal must take into account the modern award objective in s.134 of the FW Act, and, if varying modern award and minimum wages, the minimum wages objective in s.284.”

[13] The Full Bench also said:

“[85] Two points about the historical context are particularly relevant. The first is that awards made as a result of the award modernisation process are now deemed to be modern awards for the purposes of the FW Act (see Item 4 of Schedule 5 of the Transitional Provisions Act). Implicit in this is a legislative acceptance that the terms of the existing modern awards are consistent with the modern awards objective. The second point to observe is that the considerations specified in the legislative test applied by the Tribunal in the Part 10A process is, in a number of important respects, identical or similar to the modern awards objective which now appears in s.136.

. . .

[86] Although the Tribunal is not, as a non-judicial body, bound by principles of stare decisis, as a matter of policy and sound administration it has generally followed previous Full Bench decisions relating to the issue to be determined, in the absence of cogent reasons for not doing so. In another context three members of the High Court observed in Nguyen v Nguyen:

‘When a court of appeal holds itself free to depart from an earlier decision it should do so cautiously and only when compelled to the conclusion that the earlier decision is wrong. The occasion upon which the departure from previous authority is warranted are infrequent and exceptional and pose no real threat to the doctrine of precedent and the predictability of the law: see Queensland v The Commonwealth (1977) 139 CLR 585 per Aickin J at 620 et seq.’

[87] While the Tribunal is not a court, the public interest considerations underlying these observations have been applied with similar, if not equal, force to appeal proceedings in the Tribunal. In Re Dalrymple Bay Coat Terminal Pty Ltd a Full Bench summarised the position in relation to single members sitting at first instance as follows:

‘There is not a developed system of stare decisis in this jurisdiction. However it is clearly desirable for members of the Commission sitting alone to adhere to Full Bench decisions which are relevant to the matter being determined. Such a policy aids consistent decision making which in turn provides the parties to Commission proceedings with greater certainty.’

[88] These policy considerations tell strongly against the proposition that the Review constitutes a “fresh assessment” unencumbered by previous Tribunal authority.

[89] In circumstances where a party seeks a variation to a modern award in the Review and the substance of the variation sought has already been dealt with by the Tribunal in the Part 10A process, the applicant will have to show that there are cogent reasons for departing from the previous Full Bench decision, such as a significant change in circumstances, which warrant a different outcome.”

[References omitted]

[14] In my view the applicant has not demonstrated cogent reasons for departing from the decision made by the Full Bench during the award modernisation process. The Full Bench expressly referred to the fact that the only award currently covering family day workers was confined in its operation to the ACT, and decided that the award should not cover such workers. It would be a major departure from that decision to now extend award regulation to the sector in NSW, Victoria, Queensland, South Australia, Western Australia, Tasmania and the Northern Territory. These States and Territories have not previously had such regulation.

[15] One submission describes the family day care sector as ‘vibrant’ in NSW and the rest of Australia, notwithstanding the existing position regarding award regulation. No attempt has been made to provide an assessment of the effect of the proposed new family day care clause on the sector throughout Australia, as opposed to the ACT. Would the sector remain ‘vibrant’? Even in the ACT there is a substantial disagreement about the appropriate form of regulation. As a matter of merit, is piecework the appropriate form of regulation? Whether or not the matter is raised in the 2014 review, as suggested in one submission, is a matter for the applicant.

[16] The application has not been made out under the terms of the transitional provisions. I dismiss the application to include a new clause 14.7 into the award.

DEPUTY PRESIDENT

Appearances:

Mr S Harris of ACT and Region Chamber of Commerce and Industry

Mr D. Morphett for Falcan Pty Ltd - T/A- Rainbow Early Learning Centre (Falcan)

Mr N Swancott of United Voice (UV)

Mr J. Gunn for Community Connections Solutions Australia (CCSA)

Ms Z Jenkins of Australian Business Industrial (ABI)

Mr. L Moloney of the Australian Childcare Centres Association (ACCA)

Ms S. Cislowski for the Australian Community Services Employers Association (ACSEA)

Hearing details:

Melbourne, Canberra, Sydney, Brisbane.

26 November:

2012.

Final written submissions:

2012

7 December

 1   MA000120.

 2   [2012] FWA 9296, 2 November 2012

 3   [2009] AIRCFB 865, 25 September 2009.

 4   [2009] AIRCFB 945, 4 December 2009.

 5   [2012] FWA 5721

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<Price code C, MA000120  PR532164 >