Michael Hanger

[2010] FWA 7339

[2010] FWA 7339

FAIR WORK AUSTRALIA

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

Michael Hanger
(C2010/4532)

SENIOR DEPUTY PRESIDENT RICHARDS BRISBANE, 20 SEPTEMBER 2010

Summary - take home pay order sought - decline in remuneration not attributable to award modernisation process - employee not employed prior to commencement of the award modernisation process - application dismissed.

[1] This is an application by Mr Michael Hanger 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”). He was employed by PHD Plumbing Supplies.

[2] Given that Mr Hanger’s employer was not involved in plumbing installation but in the supply of plumbing equipment, the terms and conditions of Mr Hanger’s employment appear to be regulated by the General Retail Award 2010 (“the Award”).

[3] It appears, on the most beneficial reading of the classifications therein, that Mr Hanger is employed as a Retail Employee Level 3.

[4] Mr Hanger has contended that he has experienced a reduction in take home pay.

STATUTORY PROVISIONS

[5] 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.”

[6] The Revised Explanatory Memorandum for the Transitional Act, at Item 221, relevantly reads as follows:

“[...] 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.”

[7] The Applicant commenced employment on 8 July 2010.

[8] The Modern Award, therefore, had not started to apply to him from the date of its commencement and the Applicant has not suffered a change in his circumstances, as they have been the operative circumstances since the commencement of his employment.

[9] For these reasons alone, Items 8(3) (a), (b) and (c) of Schedule 5 of the Transitional Act are not met, and not able to be met, and the application must fail.

[10] Item 8(3)(d) of Schedule 5 of the Transitional Act is not able to be met because the reason the Applicant has not suffered a reduction in pay that is attributable to modern award process.

[11] What appears to have occurred at the workplace level is that the employer has at its own instigation re-arranged the meal breaks. The consequent effect of this has been to increase the duration of Mr Hanger’s unpaid meal breaks. This means that Mr Hanger’s paid hours of work have been reduced to 7.6 hours a day from 8 hours a day. Thus Mr Hanger’s remuneration has decreased.

[12] While other issues may arise from this re-arrangement of the unpaid meal breaks, the decrease in Mr Hanger’s remuneration is not attributable to the modern award process.

[13] Mr Hanger’s application must therefore also fail for reason his apparent reduction in take home pay is not attributable to the award modernisation process but to the managerial actions taken by his employer for unrelated purposes.

CONCLUSION

[14] Because of the reasons given above, I dismiss the application for a take-home-pay order under Schedule 5, Item 9 of the Transitional Act.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr M Hanger for himself

Mr M Thompson for the Respondent

Hearing details:

2010.

Brisbane:

September 13.

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