Finance Sector Union of Australia
[2015] FWCFB 2224
•10 APRIL 2015
| [2015] FWCFB 2224 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 6, Item 4 - Application to make a modern award to replace an enterprise instrument.
(EM2013/98)
Reserve Bank of Australia
(EM2013/147)
RESERVE BANK OF AUSTRALIA SALARIED EMPLOYEES AWARD 2000
Banking, finance and insurance industry | |
VICE PRESIDENT WATSON | MELBOURNE, 10 APRIL 2015 |
Applications by Finance Sector Union of Australia and Reserve Bank of Australia for a modern enterprise award for Reserve Bank of Australia Salaried Employees Award 2000 - Case for modern enterprise award established - Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 - Schedule 6 Item 4, Schedule 6 Item 6, Schedule 6 Item 9 - Fair Work Act 2009, s. 134.
Introduction
[1] This decision relates to applications to make a modern enterprise award to replace the Reserve Bank of Australia Salaried Employees Award 2000 (the RBA Award). The applications are made by the Reserve Bank of Australia (the RBA) and the other party to the Award, the Finance Sector Union of Australia (the FSU).
[2] The RBA initially made an application to also replace the Reserve Bank of Australia Maintenance Staff Award 2001. However, in later submissions it indicated that it does not intend to pursue that part of its application as the three employees that this Award covers would be covered by the proposed modern enterprise award, or the relevant industry award in the event that the proposed modern enterprise award is not made.
[3] The RBA is in a unique position, being a statutory body established by the Reserve Bank Act 1959, is a commonwealth authority and part of the public sector although it also operates in the banking industry. In addition, the Public Governance, Performance and Accountability Act 2013 also applies. Its primary activities include the formulation and implementation of monetary policy, setting payments system policy, promoting financial stability, issuing bank notes, providing specialist banking and registry services and managing Australia’s gold and foreign currency reserves. It is submitted that because of the diversity of functions which are not replicated in the private banking system, this means that employees perform a range of unique functions which are not covered by the Banking, Finance and Insurance Award 2010 (BFI Award). Employees of the Bank are not public servants. The Public Service Act has no application to them.
[4] We note that the Bank has one wholly owned subsidiary—Note Printing Australia for which we have already decided to make an enterprise award.
[5] We have delayed finalising our decision in this matter pending a consideration of all applications relating to the modernisation of enterprise awards in the banking and finance industry.
The Legislative Task
[6] The role of the Commission in an application to make a modern enterprise award is governed by sub-item 4(5) of Schedule 6 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) which provides:
“(5) In deciding whether or not to make a modern enterprise award, and in determining the content of that award, the FWC must take into account the following:
(a) the circumstances that led to the making of the enterprise instrument rather than an instrument of more general application;
(b) whether there is a modern award (other than the miscellaneous modern award) that would, but for the enterprise instrument, cover the persons who are covered by the instrument, or whether such a modern award is likely to be made in the Part 10A award modernisation process;
(c) the content, or likely content, of the modern award referred to in paragraph (b) (taking account of any variations of the modern award that are likely to be made in the Part 10A award modernisation process);
(d) the terms and conditions of employment applying in the industry in which the persons covered by the enterprise instrument operate, and the extent to which those terms and conditions are reflected in the instrument;
(e) the extent to which the enterprise instrument provides enterprise-specific terms and conditions of employment;
(f) the likely impact on the persons covered by the enterprise instrument, and the persons covered by the modern award referred to in paragraph (b), of a decision to make, or not make, the modern enterprise award, including any impact on the ongoing viability or competitiveness of any enterprise carried on by those persons;
(g) the views of the persons covered by the enterprise instrument;
(h) any other matter prescribed by the regulations.”
[7] It is also necessary to consider the modern enterprise awards objective: Item 6 of Schedule 6 of the Transitional Act. This is a legislative requirement for the Commission to recognise, in the context of the modern awards objective and the minimum wage objective, that modern enterprise awards may provide terms and conditions tailored to reflect employment arrangements that have been developed in relation to the relevant enterprises. The modern awards objective, set out in s.134 of the Fair Work Act 2009 (the Act), is as follows:
“134 The modern awards objective
What is the modern awards objective?
(1) The FWC 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
(da) the need to provide additional remuneration for:
(i) employees working overtime; or
(ii) employees working unsocial, irregular or unpredictable hours; or
(iii) employees working on weekends or public holidays; or
(iv) employees working shifts; 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.”
[8] We turn to consider these factors in relation to the circumstances of this case.
The circumstances that led to the making of the enterprise instrument rather than an instrument of more general application: Item 4(5)(a)
[9] The RBA Award has its origins in the Reserve Bank of Australia General Conditions of Employment Agreement 1993 which consolidated the core terms of the RBA’s staff handbook and internal publications. This was negotiated with the then Commonwealth Bank Officers Association. Following a consent application the Salaried Employees Award 1995 was made as there was no other appropriate award that could cover the RBA or to which it could have become a party. The 2000 RBA Award arose from the award simplification process conducted in accordance with the Workplace Relations and Other Legislation Amendment Act 1996.
[10] The FSU submits that the RBA Award was developed in the circumstances of changing industrial regulation and changes in the industry itself, including deregulation and technological change. The RBA submits that the terms and conditions contained in the RBA Award have remained largely consistent over time and that they are the result of the RBA’s industrial history and the long period of bargaining and negotiation that has occurred between the bank, its employees and the relevant unions.
Whether there is a modern award that would, but for the enterprise instrument, cover the persons who are covered by the instrument: Item 4(5)(b)
[11] The parties submit that most of the persons covered by the RBA Award would be covered by the BFI Award if the enterprise award was not modernised. The RBA does however recognise that given the vast array of functions that it carries out, ranging from the production and issuance of the nation’s bank notes to setting monetary policy, there are a number of other awards that would be relevant to the coverage of employees intended to be covered by the proposed modern enterprise award.
[12] The bank submits that if it were to be covered by the BFI Award then there would be seven other awards which would cover the work. They are:
● Professional Employees Award 2010
● Graphic Arts, Printing and Publishing Award 2010
● Journalists Published Media Award 2010
● Nurses Award 2010
● Joinery and Building Trades Award 2010
● Manufacturing and Associated Industries and Occupations Award 2010, and
● Electrical, Electronic and Communications Contracting Award 2010.
[13] It is stated by the bank, although we make finding in this regard that there may be a further 12 employees who would be covered by the Miscellaneous Modern Award 2010.
[14] The rationalisation of award coverage for an enterprise is an argument in favour of making a modern enterprise award.
The content of the modern awards referred to in paragraph (b): Item 4(5)(c)
[15] The FSU submits that the terms of the industry award are largely settled and major changes are not expected during the 2014 award review process. The FSU acknowledges that there are many similarities between the enterprise award and the industry award but also important differences.
[16] The RBA submits that the proposed modern enterprise award provides a different safety net for employees than the industry award. It submits that the key differences include:
● fewer ordinary hours per week
● span of hours (this is because of the nature of its operation)
● shift work
● higher minimum salaries with the exception of Level 1 having regard to the nature of the work.
● higher motor vehicle and meal allowances
● longer meal breaks and longer breaks during shift work
● more generous personal leave entitlements,
● more generous compassionate/bereavement leave entitlements
● a rostered day off scheme
● leave in lieu of travelling time
● flexible work arrangements, and
● paid and unpaid parental leave entitlements.
A number of these differences are historical in nature but also reflect the fact that the bank is of a different character from the other private sector banks.
The terms and conditions of employment applying in the industry: Item 4(5)(d)
[17] The FSU submits that regard must be had to the incidence of enterprise awards in the banking industry. In terms of numbers of employees, it estimates that about two-thirds of employees are covered by enterprise agreements (in which it is involved) which utilise an enterprise award rather than the industry award.
[18] A majority of the Bank’s employees are engaged under the Reserve Bank of Australia Workplace Agreement 2011. The agreement was in the course of being renegotiated when this matter was heard. Enterprise agreements are the principle source of terms and conditions at the Bank.
The extent to which the RBA Award provides enterprise-specific terms and conditions of employment: Item 4(5)(e)
[19] The Acting Employee Relations Manager of the RBA, Mr Scott Sherman, and the National Industrial Officer of the FSU, Mr Donald Peddie, gave evidence about the enterprise-specific terms of the RBA Award. They contended that enterprise-specific terms of the RBA Award include the classification and minimum salary rates, 35 hour working week, span of ordinary hours, rostered day off scheme, leave in lieu of travelling time, superannuation, parental leave and part-time work following parental leave, personal leave, annual leave, clause 5 coverage, dispute resolution, overtime, shift work, and public holidays. Again, these matters, in many cases, can be seen as arising from the different nature of the work and functions of the bank.
The likely impact on the persons covered by the RBA Award, and the persons covered by the modern awards referred to in paragraph (b), of a decision to make, or not make, the modern enterprise award: Item 4(5)(f)
[20] The FSU submits that the proposed modern enterprise award would have no impact on the RBA’s ongoing viability or competitiveness as the draft lodged with the Commission seeks only to retain enterprise-specific terms of the existing instrument and add mandatory terms.
[21] The RBA agrees that there will be no adverse impact on the RBA as a result of the decision to make the modern enterprise award and submits that the proposed modern enterprise award would provide a more relevant and appropriate safety net for the purposes of the better off overall test given the industrial history and working arrangements currently in place at the RBA.
The views of the persons covered by the enterprise instrument: Item 4(5)(g)
[22] The RBA and the FSU are in favour of modernising the enterprise award. In a survey commissioned by the FSU the research indicated that of the RBA employees who completed the survey, 67 per cent would prefer that the RBA Award continue to provide for their entitlements.
Any other matter prescribed by the regulations: Item 4(5)(h)
[23] There are no other matters prescribed.
Should a modern enterprise award be made?
[24] Because of its unique nature it appears to us that the role and function of the Reserve Bank does not sit in the same category as the general area of private banking and finance. Whilst some of its activities are similar in nature to other banks and financial institutions they are nonetheless unique. The government nature of the institution and its role in Australian monetary policy has influenced the terms and conditions of employment.
[25] The key issue for us is whether these differences are truly enterprise specific or whether or not the BFI Award should be the underpinning safety net and the existing differences more appropriately dealt with only in enterprise agreements. To date they have been reflected in both, as the enterprise award has continued by operation of the Act. However the rationalisation of award coverage in the banking industry calls for a reconsideration of that issue. In our view it is important to consider the ongoing utility of maintaining an enterprise award for the Reserve Bank.
[26] The fundamental differences between the Reserve Bank and all other employers covered by the BFI Award including its public sector nature, the activities it undertakes, its crucial role in Australian monetary policy and the history of quite different award terms leads us to the conclusion that the making of a modern enterprise award is the better way to achieve the modern awards objective. If the RBA Award is modernised the terms will need to be reviewed with some care. It may be that the salary rates in the award will need to be revised to ensure that the key classification is consistent with other modern awards and that any variations to other minimum rates is based upon the maintenance of internal relativities having regard to the work performed.
[27] In all of the circumstances we are persuaded that we should make an enterprise award.
Conclusions
[28] We will make a Reserve Bank of Australia Award 2015. However, it appears to us that some fine tuning may be necessary and to this end we refer the settlement of the Order to Deputy President Smith with recourse to this Full Bench if necessary.
VICE PRESIDENT
Appearances:
Mr T. Frost for the Reserve Bank of Australia.
Mr J. McKenna of counsel for the Finance Sector Union of Australia.
Hearing details:
2014.
Melbourne.
17 October.
Printed by authority of the Commonwealth Government Printer
<Price code C, AP794934, PR562622 >
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