Modern Awards Review 2012—Annual leave

[2014] FWCFB 255

[2014] FWCFB 255

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

Modern Awards Review 2012—Annual leave
(AM2012/8, AM2012/11, AM2012/20, AM2012/23, AM2012/31, AM2012/32, AM2012/33, AM2012/35, AM2012/36, AM2012/42, AM2012/86, AM2012/91, AM2012/92, AM2012/94, AM2012/98, AM2012/106, AM2012/108, AM2012/113, AM2012/122, AM2012/125, AM2012/145, AM2012/147, AM2012/150, AM2012/151, AM2012/153, AM2012/154, AM2012/163, AM2012/165, AM2012/166, AM2012/167, AM2012/,168, AM2012/172, AM2012/173, AM2012/177, AM2012/178, AM2012/179, AM2012/180, AM2012/181, AM2012/195, AM2012/202, AM2012/204, AM2012/209, AM2012/216, AM2012/221, AM2012/228, AM2012/231, AM2012/232, AM2012/235, AM2012/240, AM2012/245, AM2012/256)

VICE PRESIDENT WATSON
SENIOR DEPUTY PRESIDENT ACTON
DEPUTY PRESIDENT GOOLEY SYDNEY, 24 JANUARY 2014

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 - Transitional Review - annual leave provisions in particular modern awards - payment during annual close down - Fair Work Act 2009 - s.90.

Introduction

[1] The Fair Work (Transitional Provisions and Consequential Amendments)Act 2009 (the Transitional Provisions Act) provides that the Fair Work Commission 1 must conduct a review of all modern awards2 as soon as practicable after 1 January 2012 (the Transitional Review). This Full Bench has been allocated all applications dealing with annual leave. In a decision3 dated 2 September 2013 the Full Bench dealt with the various applications before it. However one matter, concerning payment for annual leave during an annual close down, was left undecided because it had not been subject to detailed submissions from all interested parties.

[2] The original application by Australian Business Industrial (ABI) sought to vary a number of awards which contained a provision that did not appear to take into account the revised concept in the National Employment Standards (NES) of annual leave accruing progressively. The Full Bench majority identified a further list of awards that contained such a provision and proposed that those covered by all of the awards containing such a provision should be given an opportunity to make submissions on whether these awards should be varied in line with the proposal of the ABI.

[3] Interested parties were invited to make submissions regarding this matter. Written submissions were received from:

● ABI;

● The Spotless Group;

● The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU);

● The Australian Workers’ Union (AWU); and

● United Voice.

[4] The matter was listed for hearing on 18 November 2013. At the hearing, Mr L Izzo appeared for ABI, Mr N Swancott appeared for United Voice, Ms L Cottam appeared for the AWU and Mr J Moriarty appeared for the AMWU.

The variations sought

[5] The awards in question generally note that annual leave is provided for in the NES and provide additional terms dealing with matters not dealt with in the NES. The general entitlement to annual leave is contained in s.87 of the Fair Work Act 2009 (the Act). Section 87(2) provides that an employee’s entitlement to paid annual leave accrues progressively during a year of service according to the employee’s ordinary hours of work, and accumulates from year to year. Section 90 of the Act provides for payment during a period of annual leave at the employee’s base rate of pay forthe employee’s ordinary hours of work in the period.

[6] Various awards contain a provision in similar terms to the following clause in the Asphalt Industry Award 2010 4 (Asphalt Industry Award):

“24.4 Close-down

(a) Where an employer intends temporarily to close (or reduce to nucleus) during the Christmas/New Year period for the purpose, amongst others, of allowing annual leave to the employees concerned or a majority of them, the employer may give those employees one month’s notice in writing of an intention to apply the provisions of this clause.

(b) In the case of any employee employed after notice has been given, notice must be given to that employee on the date they are offered employment.

(c) An employee who has accrued sufficient annual leave at the date of closing in accordance with clause 24.4(a) must be:

(i) given annual leave commencing from the date of closing; and

(ii) paid 1/12th of their ordinary pay for any period of employment between accrual of the employee’s right to the annual leave and the date of closing.

(d) Any employee who has not accrued sufficient annual leave at the date of closing must be:

(i) given leave without pay from the date of closing; and

(ii) paid for any public holiday during such leave for which the employee is entitled to payment.”

[7] ABI proposes that subclauses (c) and (d) should be replaced with the following:

“(c) Where an employee has been given notice pursuant to clause X(a) and the employee has:

(i) accrued sufficient paid annual leave to cover the full period of closing, the employee must take paid annual leave for the full period of closing;

(ii) insufficient accrued annual leave to cover the full period of closing, the employee must take paid annual leave to the full amount accrued and leave without pay for the remaining period of the closing; or

(iii) no accrued annual leave, the employee must take leave without pay for the full period of closing.

(d) Public holidays that fall within the period of close down will be paid as provided for in this award and will not count as a day of annual leave or leave without pay.”

[8] The following awards contain a similar provision:

● Asphalt Industry Award 2010 5

● Cement and Lime Award 2010 6

● Concrete Products Award 2010 7

● Premixed Concrete Award 2010 8

● Quarrying Award 2010 9

● Aquaculture Industry Award 2010 10

● Car Parking Award 2010 11

● Cleaning services Award 2010 12

● Gas Industry Award 2010 13

● Gardening and Landscaping Services Award 2010 14

● Horse and Greyhound Training Award 2010 15

● Miscellaneous Award 2010 16

● Pest Control Industry Award 2010 17

● Racing Clubs Events Award 2010 18

● Racing Industry Ground Maintenance Award 2010 19

● Security Services Industry Award 2010 20

● Silviculture Award 2010 21

● Surveying Award 2010 22

The Meaning and Intent of the Provisions

[9] It appears clear from the historical material provided by the parties that the clauses in question were transposed from other instruments that contemplated a scheme for accruing annual leave on an annual basis and the payment of pro rata annual leave accruals where an employee had insufficient accrued leave accrued for the period of an annual shutdown. These schemes included the Annual Holidays Act 1944 (NSW) and the Labour and Industry Act 1958 (Vic). By operation of the previous award and legislative provisions the clause had the effect of providing the maximum payment of accrued annual leave to employees during a shutdown and a corresponding minimisation of leave without pay. There was no notion of an additional payment over and above the ordinary annual leave payments due.

[10] The continuation of this wording in conjunction with the obligation under the NES to accrue annual leave progressively and make payment at the employee’s base rate of pay, gives rise to an argument that clauses such as clause 24.4(c)(ii) of the Asphalt Industry Award provide for an additional payment over and above the amount that would otherwise be payable for an absence on annual leave.

[11] The parties appearing before us either contended that the provision was confusing and uncertain or had difficulty enunciating its meaning. No party was able to provide a basis for an interpretation that an additional payment is payable. We agree with the ABI that the wording arose in a different legislative scheme and was never intended to provide for a payment in addition to the annual leave payment under the NES. The current provisions in the modern awards to which we have referred represent anomalies or technical problems arising from the Part 10A award modernisation process which prevent those modern awards operating effectively. We consider that the situation should be remedied in this review of awards. We will make variations to all of the awards containing such a provision generally in line with the wording proposed by ABI. Determinations will be made varying the various awards in accordance with this decision.

Corrections to original decision

[12]
In correspondence to the Commission a number of minor corrections to our 2 September decision have been identified. Corrections have been made to that decision in line with that correspondence.

VICE PRESIDENT WATSON

Appearances:

Mr L Izzo appeared on behalf of Australian Business Industrial.

Mr N Swancott appeared on behalf of United Voice.

Ms L Cottam appeared on behalf of the Australian Workers Union.

Mr J Moriarty appeared on behalf of the Australian Manufacturing Workers’ Union.

Hearing details:

2013.

Melbourne.

November, 18.

 1   Fair Work Australia became the Fair Work Commission on 1 January 2013.

 2   Other than enterprise awards and State Reference Public Sector Awards.

 3  [2013] FWCFB 6266.

 4  MA000054.

 5   Ibid.

 6  MA000055.

 7  MA000056.

 8  MA000057.

 9  MA000037.

 10  MA000114.

 11  MA000095.

 12  MA000022.

 13  MA000061.

 14  MA000101.

 15  MA000008.

 16  MA000104.

 17  MA000097.

 18  MA000013.

 19  MA000014.

 20  MA000016.

 21  MA000040.

 22  MA000066.

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