Kenneth Wright v Kilmore Racing Club Inc
[2010] FWA 4359
•16 JUNE 2010
[2010] FWA 4359 |
|
DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 5, Item 9 - Application for an order remedying reduction in take-home pay resulting from a modern award
Kenneth Wright
v
Kilmore Racing Club Inc.
(C2010/3696)
COMMISSIONER BISSETT | MELBOURNE, 16 JUNE 2010 |
Application for an order remedying reduction in take-home pay resulting from a modern award.
[1] This is an application by Mr Wright for an order to remedy a reduction in take-home pay under Schedule 5, Item 9 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act).
[2] Mr Wright is employed by the Kilmore Racing Club as a casual mobile barrier driver at harness racing events (as is relevant for this application 1). He is covered by the Racing Clubs Events Award 20102 as a Grade 4 Racecourse Attendant. Under that award he is entitled to be paid $16.78 per hour with a casual loading of 25%.
[3] Mr Wright thought he may have been covered by the Entertainment and Broadcasting Industry (Recreational Grounds etc Victoria) Award 2000 3 prior to 1 January 2010.
[4] Mr Wright’s employer indicated that he believed Mr Wright had been award free prior to 1 January 2010 with respect to the work for which this take-home pay order is sought. He had, until the modern award took effect, been paid on a ‘sessional’ basis for his work.
[5] Prior to the modern award the employer claims that Mr Wright was entitled to the national minimum wage of $14.31 per hour plus the default casual loading of 20% with no minimum engagement period or entitlement to penalty rates.
[6] Mr Wright’s employer however provided Mr Wright with many of the conditions under the Entertainment and Broadcasting Industry (Recreational Grounds etc Victoria) Award 2000, including payment based on a six hour minimum engagement, and payment for any time worked beyond the six hours.
[7] At the end of 2009 Mr Wright was actually being paid $116.19 for each ‘session’ he worked as a mobile barrier driver. 4 At a minimum of 6 hours payment this equates to a rate of $19.36 per hour. This figure included the casual loading. If Mr Wright worked on a Sunday (which he did from time to time) he was paid at double the ‘session’ rate (reflecting double time payable for Sunday work in the Entertainment and Broadcasting Industry (Recreational Grounds etc Victoria) Award 2000).
[8] If Mr Wright was covered by the Entertainment and Broadcasting Industry (Recreational Grounds etc Victoria) Award 2000 prior to 1 January 2010 the most likely classification for the work he performed as a mobile barrier driver would have been General Attendant Grade 1. 5 The relevant rate of pay for a six hour engagement including casual loading of 25% was $105.24. This equates to $17.54 per hour (or $14.03 per hour plus a 25% casual loading of $3.51).
[9] Under the Racing Clubs Events Award 2010 the minimum engagement period for a casual employee is four hours. Mr Wright is now being paid under that award at the specified hourly rate of $16.78 plus a 25% casual loading (a total of $20.98 per hour) and is paid for all hours worked with a minimum payment of four hours.
[10] Mr Wright’s employer argued that, as there was no award that applied to Mr Wright prior to 1 January 2010, the rate of pay for his classifications, the casual loading and the public holiday penalties are all better under the modern award than those which Mr Wright had been entitled to receive. The employer however, recognising that the introduction of the modern award would effect the minimum engagement period previously enjoyed by Mr Wright, determined to commence paying the modern award provisions with respect to the rate of pay, casual loadings and public holiday penalty to Mr Wright from 1 January 2010 and not phase in those changes or wait until 1 July 2010. 6
[11] Mr Wright claims he has suffered a reduction in his take-home pay caused by award modernisation. He seeks an order from Fair Work Australia to remedy this. He says that he had taken home $116.19 for each period of work until 1 January 2010 when the amount of pay he takes home for each period of work has reduced to between about $90 and $115.39.
[12] Mr Wright’s employer suggests that any reduction in take-home pay is due to ‘variations to the quantity of work or pattern of work’ that occur due to the casual nature of the work. 7
Statutory Provisions
[13] Item 8 of Schedule 5 of the Transitional Act provides:
Part 3—Avoiding reductions in take-home pay
8 Part 10A award modernisation process is not intended to result in reduction in take-home pay
(1) The Part 10A award modernisation process is not intended to result in a reduction in the take-home pay of employees or outworkers.
(2) An employee’s or outworker’s take-home pay is the pay an employee or outworker actually receives:
(a) including wages and incentive-based payments, and additional amounts such as allowances and overtime; but
(b) disregarding the effect of any deductions that are made as permitted by section 324 of the FW Act.
Note: Deductions permitted by section 324 of the FW Act may (for example) include deductions under salary sacrificing arrangements.
(3) An employee suffers a modernisation-related reduction in take-home pay if, and only if:
(a) a modern award made in the Part 10A award modernisation process starts to apply to the employee when the award comes into operation; and
(b) the employee is employed in the same position as (or a position that is comparable to) the position he or she was employed in immediately before the modern award came into operation; and
(c) the amount of the employee’s take-home pay for working particular hours or for a particular quantity of work after the modern award comes into operation is less than what would have been the employee’s take-home pay for those hours or that quantity of work immediately before the award came into operation; and
(d) that reduction in the employee’s take-home pay is attributable to the Part 10A award modernisation process.”
[14] The Revised Explanatory Memorandum for the Transitional Act contains the following explanation with respect to take-home pay orders:
The scope for take-home pay orders is tightly constrained. The intention is that orders can only be made where:
• there is an actual reduction in take-home pay - if award rates decrease, but an employee’s pay does not decline (because pay is maintained by their employer), an order cannot apply;
• award modernisation is the operative or immediate reason for a reduction in take-home pay. 8
[15] A take-home pay order under Item 9 of Schedule 5 of the Transitional Act can only be made if the employee suffers a modernisation-related reduction in take-home pay as defined in item 8.
[16] In determining if an employee has suffered such a reduction a consideration of each of the elements in item 8(3) must be considered.
A Part 10A modern award starts to apply
[17] There is no doubt that, at the time the Racing Club Events Award 2010 came into operation on 1 January 2010, it started to apply to Mr Wright in his employment as a mobile barrier driver. His classification under the award is Racecourse Attendant Grade 4.
[18] Despite this, there are some matters in the modern award which do not apply until 1 July 2010. In Request from Minister for Employment and Workplace Relations - 28 March 2008 (Award Modernisation), 9 (the Transitional Provisions decision) a Full Bench of the Australian Industrial Relations Commission decided:
[30] …that phasing should commence on 1 July 2010. The effect will be that where the phasing provisions are included in an award the pre-modern award conditions relating to minimum wages, casual and part-time loadings, Saturday, Sunday, public holiday, evening and other penalties and shift allowances will continue to apply until 1 July 2010 when the modern award obligations will commence. Despite the fact that the legislation contemplates the introduction of modern awards from 1 January 2010, a delay of six months in the implementation of the phasing arrangements is reasonable when the range and nature of the changes which will be required are properly taken into account. There will be a further four instalments on 1 July of each year concluding on 1 July 2014. Consistent with s.287 of the Fair Work Act, the changes in wages and conditions covered by the phasing arrangements will operate from the first pay period on or after 1 July in each year.
[19] Despite this phasing – which would, as is relevant to this matter, go to wages and casual loading – for the reasons explained above Mr Wright is receiving the minimum wages and the 25% casual loading specified in the award. In addition the employer has paid the full public holiday rate of 250% with no phasing of that amount.
The employee is employed in the same or comparable position
[20] Mr Wright is employed in the same position as a mobile barrier driver as he was prior to the modern award applying to him.
The amount of take-home pay for working particular hours or quantity of hours is less than immediately prior to the award coming into operation
[21] Mr Wright, on 31 December 2009 was receiving the equivalent of $19.36 per hour, inclusive of causal loading. He was, at the time, entitled to $17.54 (including a 25% casual loading) if the Entertainment and Broadcasting Industry (Recreational Grounds etc Victoria) Award 2000 applied or $17.17 per hour (including a 20% causal loading) if he was entitled only to the federal minimum wage. In either case Mr Wright was being paid above the minimum entitlements.
[22] Under the Racing Clubs Events Award 2010 Mr Wright receives $20.98 per hour ($16.78 plus 25% casual loading). This is slightly above the minimum entitlements under that award as Mr Wright’s employer has chosen not to phase in the increases as he would be entitled to do.
[23] Whichever way it is considered, Mr Wright’s hourly rate of pay is increased under the modern award.
[24] The minimum engagement period applicable to Mr Wright has however changed. Under the Entertainment and Broadcasting Industry (Recreational Grounds etc Victoria) Award 2000 Mr Wright was entitled to a minimum six hour engagement and was paid as such, regardless of actual hours worked. Under the Racing Clubs Events Award 2010 the minimum payment is four hours. Any reduction in the actual pay received by Mr Wright is as a consequence of this change in the minimum engagement period.
[25] The Revised Explanatory Memorandum to the Transitional Act states that ‘it is not intended that the take-home pay orders should prevent an employer from taking action (e.g., reorganising roster arrangements) that would otherwise be lawful.’ 10
[26] The capacity to engage Mr Wright for a minimum of four hours is provided for under the modern award and such rostering is lawful. Take-home pay orders are not intended to stop the employer implementing rosters as permitted under the award.
[27] The amount of take-home pay for working particular hours has not decreased for Mr Wright – his hourly rate of pay has increased – rather the minimum payment period has changed and it is this that has affected Mr Wright’s take-home pay.
The reduction is attributable to the Part 10A award modernisation process
[28] For a reduction in take-home pay to be attributable to the Part 10A award modernisation process requires that the operative or immediate reason for the reduction in take-home pay is the modernisation process. 11 The award modernisation process entailed the bringing together a number (in most cases) of award-based transitional instruments on an industry or occupational basis to create a single modern award. For the reduction to be attributable to this process suggests that the reduction must be caused by substantive changes between the previously applicable award and the modern award that came into operation on 1 January 2010.
[29] Whether Mr Wright was covered by an award prior to 1 January 2010 or not, his reduction in take-home pay has not been caused by the making of the Racing Clubs Events Award 2010. This award saw his hourly rate of pay increase, regardless of the instrument that applied to him prior to 1 January 2010.
[30] As is clear above, the change in Mr Wright’s take-home pay is caused by a change in the minimum payment provisions. The reduction is not attributable to the Part 10A award modernisation process.
Conclusion
[31] There is no question that, on the basis of his pay slips, Mr Wright is taking home less pay now than he was prior to the operation of the Racing Clubs Events Industry Award 2010. This however is not caused by the Part 10A award modernisation process. As such there can have been no modernisation-related reduction in Mr Wright’s take-home pay. The operation of the modern award provides Mr Wright with a rate of pay that is in excess of the rate he was previously receiving and certainly above the minimum payment he was entitled to receive.
[32] For Mr Wright to be entitled to a take-home pay order he must have suffered a modernisation-related reduction in take-home pay. To have suffered such a reduction requires that each of the parts of sub-item 3 of Item 8 set out above be satisfied. This is not so in this matter.
[33] I find that Mr Wright has not suffered a modernisation-related reduction in take-home pay. He is therefore not entitled to a remedy under Schedule 5, Item 9 of the Transitional Act. The application is dismissed. An order to that effect will be issued forthwith.
COMMISSIONER
Appearances:
K. Wright for himself
M. Mooney for Kilmore Racing Club Inc.
Hearing details:
2010
Melbourne
2 June.
1 Mr Wright is also employed in a different capacity by the Racing Club for which there is no claim.
2 MA000013.
3 AP780960.
4 Exhibit W2, payslips for the periods ending 08/12/09 and 05/01/10.
5 This appears to be the only classification in the award that could cover the work of a mobile barrier driver although this function is not actually specified.
6 See Exhibit W1, in particular a letter to Mr Wright from his employer dated 3 February 2010.
7 See the employer’s Form F47B.
8 Paragraph 225.
9 [2009] AIRCFB 800 (2 September 2009).
10 Paragraph 227.
11 Revised Explanatory Memorandum, paragraph 221.
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