FAIR WORK COMMISSION - Sch. 5, Item 6—Review of all modern awards (other than modern enterprise and State PS awards) after first 2 years

[2013] FWC 5482

[2013] FWC 5482

The attached decision replaces the document previously issued with the above code on 30 September 2013.

An incorrect citation in the second footnote has been corrected and typographical corrections have been made in paragraphs [17] and [24].

Matthew Jordon

Acting Associate to Deputy President Smith

Dated 23 October 2013

[2013] FWC 5482

FAIR WORK COMMISSION

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

Australian Federation of Employers and Industries and others
(AM2012/238 and others)

BANKING, FINANCE AND INSURANCE AWARD 2010
[MA000019]

Banking finance and insurance industry
DEPUTY PRESIDENT SMITH	MELBOURNE, 30 SEPTEMBER 2013

Modern Award Review 2012—Banking Finance and Insurance Award 2010—classification structures, cashing out of annual leave and the time when leave can be taken, together with a variation to the definition of afternoon shift work.

Introduction

[1] These are applications to vary the Banking Industry Award 2010 [MA000019] (the Award) to deal with classification structures, the time when leave can be taken, together with a variation to the definition of afternoon shift work.

[2] The applications are as follows:

AM2012/256

An application by the ANZ Banking Group Limited and the Commonwealth Bank of Australia and related entities. In this decision these applicants will be collectively referred to as the Banks.

The application seeks to amend the level 6 classification as it is uncertain, difficult to apply and does not meet the modern award objective; provide a requirement to take annual leave and to alter the finishing time for an afternoon shift.

AM2012/238

An application by Australian Federation of Employers and Industries (AFEI) seeking to provide for the afternoon shift to finish between 7.00 pm and midnight.

AM2012/283

An application by Suncorp Staff Pty Ltd seeking to amend the definition of the level 6 classification; provide clarification to annualised salaries; require evidence of expenses incurred; clarification in relation to safe travel home entitlements and clarification in relation to shift commencements.

AM2013/3

An application by Abacus Australian Mutual seeking to provide that, by agreement between the employer and the employee, a part-time employee may work up to 76 hours per fortnight at ordinary time rates.

[3] The matters were heard in April 2013 but some discussion ensued between some of the parties and the position did not become clear until early July 2013. For convenience I deal with each subject matter as some appear in more than one application.

Background to this Review

[4] In approaching these matters I have done so against the background of a number of Full Bench decisions which describe how a review under Item 6 of Schedule 5 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 should be approached. In particular, I have had regard to the decision of the Full Bench in the Modern Awards Review Decision 1 and the Modern Award Review 2012 - Penalty Rates2. In addition, consideration has been given to s.134 of the Fair Work Act 2009 (the Act) and to ensure that awards are operating effectively without anomalies or technical problems arising from the Part 10A award modernisation process.

The variations sought

1. The level 6 classification

[5] This was a matter over which negotiation took place between the parties following the hearing but regrettably agreement was not reached and as such the matter now falls for determination. An appropriate starting point is the level 6 definition contained in the modern award:

Level 6

Those employed at this level perform a middle managerial role primarily to control the conduct of a part of the employer’s business and in which decisions are regularly made and responsibility accepted on matters relating to the administration and conduct of the part of the business. Those responsible for managing more than 10 people must be classified at this level.

Indicative job list—branch manager, human resources or fraudulent relations manager, financial planners, information technology specialists, relationship manager, senior analyst, subject matter manager, divisional manager.

[6] Banking services, Finance and investment services, Health insurance industry and the Insurance industry were considered as a part of Stage 2 in the award modernisation process. When the exposure draft of the modern award was published 3 it contained the definition for a level 6 employee outlined above and the following clause:

13.2 Exemption rate

The following clauses will not apply to employees who are paid a salary, before overtime payments and shiftwork allowances, which is more than 15% above the Level 5 minimum weekly rate:

• clause 20.1–Span of hours;



• clause 21.1–Overtime and penalty rates other than call centres;



• clause 21.2(c)–Overtime and penalty rates call centres; and



• clause 16.2(b)(ii)–Stand-by and call-back allowances.

[7] By decision of the Full Bench 4 the exemption clause was removed as a consequence of a variation to the award modernisation request made by the Minister for Employment and Workplace Relations on 2 May 2009 to include the following new paragraph 2(f):

2. The creation of modern awards is not intended to:

. . . . . . 

(f) exempt or have the effect of exempting employees who are not high income employees, from modern award coverage or application, unless there is a history of exempting employees from coverage across a wide range of pre-reform awards and NAPSAs in the relevant industry or occupation.

[8] No consideration was given at the time to the impact of that amendment to the operation of the remaining aspects of the award.

[9] The substance of the arguments put by those in favour of altering this definition is that the level 6 classification contained in the Award has the potential to cover certain managerial employees who have not been traditionally covered by awards consistent with the alteration to the request and contrary to s.143(7) of the Act. Section 143(7) provides:

Employees not traditionally covered by awards etc.

(7) A modern award must not be expressed to cover classes of employees:

(a) who, because of the nature or seniority of their role, have traditionally not been covered by awards (whether made under laws of the Commonwealth or the States); or

(b) who perform work that is not of a similar nature to work that has traditionally been regulated by such awards.

Note: For example, in some industries, managerial employees have traditionally not been covered by awards.

[10] It was argued that the definition attached to level 6 presents an anomaly or technical problem which warrants correction. Further, it was argued that an ambiguity or uncertainty exists 5 because the use of the term “middle management” could be susceptible to various meanings.

[11] In addition, it was argued by the Banks that because the draft modern award contained an exemption provision for senior managerial employees and this was removed late in the process, this is a significant change contemplated by the scope decision 6.

[12] It is argued by the Banks that the level 6 classification contains two references which create uncertainty of application and could lead to covering person at the banks who were not previously award covered. The two references are:

(a) the reference to “ middle managerial”; and

(b) the imperative that any employee responsible for managing more than 10 people must be classified at level 6.

[13] Evidence was provided from Mr Ben Walker, Manager Global Employee Relations at Australia and New Zealand Banking Group Limited (ANZ) and Mr Tony Moroun, Executive Manager—Workplace Relations at Commonwealth Bank of Australia (Commonwealth) and Mr Michael Carroll, Workplace Advisor at the Commonwealth. There was no cross-examination of these witnesses.

[14] The evidence of Mr Walker canvassed the current award coverage together with what it might describe as middle management in its Retail, Corporate and Commercial operations. The evidence of Mr Moroun covered the same issues. From this evidence two matters are worthy of note. In relation to the Commonwealth there are approximately 1850 employees who are not currently covered and in relation to the ANZ that figure is 1600 although there is limited coverage. Mr Carroll provided evidence on the position of related entitles of the Commonwealth.

[15] The Banks provided an alternative clause for consideration:

This level covers those employed at this level who perform a middle managerial role primarily to control the conduct of a part of the employer’s business and in which decisions are regularly made and responsibility accepted on matters relating to the administration and conduct of the part of the business. Those responsible for managing more than 10 people must be classified at this level provided that this level 6 classification does not cover classes of employees:

(a) who, because of the nature or seniority of their role, were not traditionally covered by awards; or

(b) who perform work that is not of a similar nature to work that has previously been regulated by awards.

Indicative job list—branch manager, human resources or fraudulent relations manager, financial planners, information technology specialists, relationship manager, senior analyst, subject matter manager, divisional manager.

(The marking highlights the alterations.)

[16] The Australian Federation of Employers and Industries did not seek a variation in respect to this matter. Suncorp Staff Pty Ltd (Suncorp) supported the submission of the Banks but added that a person who was responsible for managing more than 10 people could also be a senior manager and the previous Suncorp award 7 did not cover senior managers. Suncorp endorsed the submissions of the Banks about the term middle manager being ambiguous or uncertain.

[17] Abacus Australian Mutuals (Abacus) is an industry association representing 101 members comprised of credit unions, building societies and mutual banks. It relied upon the submission of the Banks. Abacus provided evidence from Ms D Brown a senior lawyer with Abacus. In Ms Brown’s statement the level 6 definitions was sought to be altered by deleting reference to managing more than 10 people. Evidence on this issue was also given by Mr A Johns, manager employee relations with Heritage Bank Ltd. Mr Johns added to the deletion sought by Ms Brown to include financial planners, information technology specialists and senior analysts.

[18] To begin, the Finance Sector Union of Australia (FSU) submitted that the Banks were not covered by the award and would only be so if their existing enterprise awards were not modernised but lapsed. In this connection, whilst not pressed, FSU draw attention to section s.158 item 5.

[19] FSU outlined the various levels of award regulation including exemptions for all employees above a particular level; exemption for employees above a particular level from certain provision within the award and exemptions for persons earning more than a particular amount. It submitted that the Award was made from an irregular background of different levels of award coverage. The FSU submitted that it would be a significant variation to the safety net if employees were now removed from award coverage. In particular it would remove an unspecified number of employees who currently have access to an unfair dismissal remedy as a result of being covered by the award and receiving an income in excess of the high income threshold. 8

[20] An important argument by FSU was that s.163(1) provided that the Fair Work Commission (the Commission) must not make a determination varying a modern award so that certain employees stop being covered by the award. The section provides:

163(1) The FWC must not make a determination varying a modern award so that certain employers or employees stop being covered by the award unless the FWC is satisfied that they will instead become covered by another modern award (other than the miscellaneous modern award) that is appropriate for them.

[21] Against the background of:

● The alteration to the request made by the Minister which caused the removal of exemption provisions;

● The subsequent variation to the award which did not consider the interaction between the removal of the exemption and the classification structure;

● The possibility of multiple coverage; and

● The description of “middle management” within which various institutions seek to operate.

[22] I find that there is a technicality which requires attention together with uncertainty in the application of the Award. My focus is of course on those covered by the Award but I am not unmindful of the position put forward by the Banks. It may be that the current interaction with the enterprise awards and the modern award creates additional obligations. The possibility of multiple coverage problems is to be avoided. It is clear that some further definition is required so that mere nomenclature is not a determinate of the coverage of the Award but indeed the nature of the work and level of seniority with an institution.

[23] I propose to vary the definition of level 6 to provide:

This level covers those who perform a middle managerial role primarily to control the conduct of a part of the employer’s business and in which decisions are regularly made and responsibility accepted on matters relating to the administration and conduct of the part of the business. Those responsible for managing more than 10 people must be classified at this level provided that this level 6 classification does not cover classes of employees:

(a) who, because of the nature or seniority of their role, were not traditionally covered at all by awards; or

(b) who perform work that is not of a similar nature to work that has previously been regulated by at all by awards.

Indicative job list—branch manager, human resources or fraudulent relations manager, financial planners, information technology specialists, relationship manager, senior analyst, subject matter manager, divisional manager.

[24] By adopting this course the Award will not apply to those, who because of their seniority of their role, were not covered by awards. It does no more that recognise the statutory injunction contained in s.143(7). In taking this course I am satisfied that in a very real sense the variation will not remove employees from coverage as those employees should not have been covered in the first place. It would not be appropriate in a review to make a variation which would remove coverage and this connection. I am concerned to ensure that those employees, who have coverage, even in a limited way, do not lose that coverage. To avoid doubt this variation should not disturb award coverage of those employees to whom some sections of awards previously applied. This is why I have included reference to “at all”. It should not be forgotten that this is a minimum safety net. In not altering the indicative job list I have decided that it is important to concentrate on seniority and coverage rather than providing that a job title could impact upon the coverage of an award. I will provide the parties to the proceedings with 14 days to comment upon the proposed terms of the variation to ensure that unintended consequences do not arise from the decision made.

2. Definition of afternoon shift

[25] AFEI, supported by others, seek a variation to the shift work provisions. At present the Award provides:

22.8 Shiftwork

Shiftwork may be worked on the following basis.

(a) The following definitions will apply in relation to this clause:

(i) shiftworker means an employee whose ordinary hours of work are worked in accordance with the shifts defined in this clause;

(ii) afternoon shift means any shift finishing between 6.00 p.m. and midnight;

(iii) early morning shift means any shift commencing between 4.00 a.m. and 7.00 a.m.; and

(iv) night shift means any shift finishing between midnight and 8.00 a.m.

Provided that employees who, in accordance with this clause, work ordinary hours up to 9.00 pm on any one night between Monday to Friday inclusive, will not be considered shiftworkers for the purposes of this award.

[26] AFEI is concerned that the finishing time for an afternoon shift is different from the ordinary spread of hours which is 7 am to 7 pm (clause 22.1). It seeks to align the finishing of the afternoon shift with the spread of hours at 7 pm. It is suggested that an employee who finishes work between 6 pm and 7 pm may be considered as performing ordinary hours as well as shift work. This is said to be anomalous and creates uncertainty.

[27] FSU oppose the variation and cite the decision of the Full Bench in 2009 which refused to vary the shift work provisions. The decision referred to deals with call centres. The decision recorded:

The Banks submitted that if the FSU application was granted, further variations would be required to provide clarification in respect of the interaction between shiftwork and hours of work provisions. The FSU opposed a number of the variations proposed by the banks, however did not oppose the inclusion of the words “… on Monday to Friday and on Saturday between 8.00 am and 12 noon” at the end of cl.21.8(b).

In our view the amendment to the consolidated request has a clear intent and reflects a different approach to that adopted by the Commission in making the relevant provisions. The variation sought by the FSU is consistent with the amended request. We have therefore decided to grant the application. We do not believe that a case has been made out for changes 9.

[28] Whilst there are no changed circumstances which would give rise to a consideration of this matter, it would seem incongruous that an award would purport to create an entitlement to a shift work penalty during ordinary hours for a day worker. There has been no evidence called which would demonstrate a real position. Given the decision of the Full Bench I will not vary the Award as this is best left to the review proper.

3. Annualised salaries

[29] Suncorp seek a variation to the award by inserting a new subclause 14.1(c).

Where an annualised salary is in satisfaction of any, or all, of the above provisions, an employee will not be entitled to additional payment for those provisions arising from this award.

[30] The FSU submit that the amendment is unnecessary given the terms of the award. I agree. In any event this clause is not unusual and has a particular history. Any amendment to the clause should only be done in the next review where all clauses in awards can be examined for the purpose of consistency.

4. Requirement to provide evidence of expenses actually incurred

[31] Suncorp seek a variation to the Award to permit employers to have a verifiable reimbursement system. Again the FSU submit that the variation is totally unnecessary. I agree. Suncorp can require employees to verify expenses actually incurred and such a request would not be unreasonable.

5. Safe travel home entitlement

[32] Currently the Award provides:

22.3 When an employee is asked to work beyond their normal finishing time and where the usual means of transport is either unavailable, impracticable or unsafe, the employer will arrange suitable transport for the employee between the place of work and the employee’s place of residence provided that where an employee chooses to use their own motor vehicle with the agreement of the employer they must be reimbursed as per clause 18.4(b) of this award.

[33] Suncorp seek to vary the Award by replacing the word “normal” with “scheduled”. It argues that whilst it is technically true that there is no “normal” finishing time, the change would have no work to do in clause 22.3. However, as an alternative position it submits that the words “normal scheduled” finishing time may be more appropriate. I will vary the award to provide for the FSU’s alternative position.

6. Part-time employees working in excess of agreed starting and finishing times

[34] Clause 10.2 regulates part-time employment and provides:

10.2 Part-time employment

(a) A part-time employee is an employee who:

(i) is engaged to work an average of fewer than 38 ordinary hours per week; and

(ii) receives, on a pro rata basis, equivalent pay and conditions to those of full-time employees who do the same kind of work.

(b) For each ordinary hour worked, a part-time employee will be paid no less than 1/38th of the minimum weekly rate of pay for the relevant classification in clause 13 Classifications and minimum wage rates.

(c) An employer must inform a part-time employee of the ordinary hours of work and starting and finishing times. All time worked at the direction of the employer in excess of these hours will be paid at the appropriate overtime rate.

[35] Abacus seeks to vary the Award to permit part-time employees, by mutual agreement, to work up to 76 hours per week at ordinary rates. It submits that such a variation would be consistent with the decision of the Commission. 10

[36] In relation to this matter, I am not satisfied that there is “such as a significant change in circumstances which warrants a different outcome.” 11

[37] There are varying approaches to part-time employment and this is a matter best dealt with in the next review.

Conclusion

[38] The main area for variation relates to the level 6 classification. In this regard I have invited the parties to comment upon the proposed draft contained in this decision within 14 days. Following those comments the matters will be listed for settlement of the orders on 21 October 2013 at noon.

DEPUTY PRESIDENT

Appearances:

M Tamvakologos Solicitor with Q. Le on behalf of the Banks.

N. Chadwick Solicitor on behalf of Abacus Australian Mutual Unity.

A. Allegretto on behalf of Suncorp Staff Pty Ltd.

P. Stuckey-Clarke on behalf of the Australian Federation of Employers and Industries.

S. West on behalf of the South Australian Employers Chamber of Commerce and Industry trading as Business SA.

G. McConville on behalf of the Finance Sector Union of Australia.

Hearing details:

2013.

Melbourne:

April, 24.

Final written submissions:

G. McConville, FSU, 14 June 2013, Submissions in reply.

S. Amendola, Ashurst, 27 June 2013.

2013.

Melbourne:

April, 24.

 1   [2012] FWAFB 5600.

 2   [2013] FWCFB 1635.

 3   23 January 2009.

 4   [2009] AIRCFB 923.

 5   Reliance was placed on the decision of Gray J in Printing & Kindred Industries Union & Anor v Davies Bros Ltd [1986] FCA 444.

 6   Modern Awards Review [2012] FWAFB 5600 at paragraph 99.

 7   Suncorp Award—State 2003.

 8   See s.382 of the Act.

 9   [2009] AIRCFB 987 at paragraphs 9 and 10.

 10   [2012] FWAFB 5600 and [2013] FWCFB 1635.

 11   Ibid paragraph 99.

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