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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] FWCFB 255
Decision Date: 24 January 2014

CaseChat Overview and Summary

In this case, the Full Bench of the Fair Work Commission was tasked with reviewing various modern awards concerning the payment of annual leave during annual shutdowns. The Australian Business Industrial (ABI) had initiated an application seeking variations in several awards that contained provisions which appeared inconsistent with the progressive accrual of annual leave under the National Employment Standards (NES). The Bench had previously addressed the applications but had deferred a decision on the payment during annual shutdowns due to incomplete submissions. The Bench invited submissions from interested parties, including ABI, The Spotless Group, the Australian Manufacturing Workers’ Union (AMWU), the Australian Workers’ Union (AWU), and United Voice.

The central legal issue was whether the provisions in several awards, which provided for additional payments during annual shutdowns, were consistent with the NES's progressive accrual of annual leave and the requirement to pay annual leave at the base rate of pay. The awards in question contained clauses that appeared to provide for payments in excess of the ordinary annual leave payments. The Bench had to determine whether these clauses represented an anomaly or technical problem arising from the award modernisation process and whether they should be varied to align with the NES.

The Bench found that the clauses in question were remnants from previous legislative schemes and did not intend to provide for additional payments beyond the ordinary annual leave payments. Given the confusion and uncertainty surrounding these provisions, the Bench agreed with ABI that the situation should be remedied. The Bench decided to vary the awards to align with the wording proposed by ABI, ensuring that the annual shutdown provisions no longer provided for payments in excess of the ordinary annual leave payments. The Bench also corrected minor errors in its previous decision.

This decision underscores the importance of aligning modern awards with contemporary employment standards to prevent anomalies and ensure clarity and fairness in employment conditions.

Orders