Modern Awards Review 2012—Annual Leave - [2013] FWCFB 6266

[2013] FWCFB 6266 [Note: a correction has been issued to this document]

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, 2 SEPTEMBER 2013

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 - Transitional Review - annual leave provisions in particular modern awards - modern awards objective - Fair Work Act 2009 - Schedule 5, Item 6.

CONTENTS	Paragraph
Decision of Senior Deputy President Acton and Deputy President Gooley
Introduction	[1]
Legislative context	[5]
Consideration of the claims	[9]
(a) Cashing out of annual leave	[11]
(b) Requirement to take annual leave	[51]
(c) Additional one twelfth payment	[82]
(d) Leave loading provision	[103]
(e) Leave loading calculation	[109]
(f) Leave loading on advanced leave	[126]
(g) Leave loading on termination	[129]
(h) Payment for a period of annual leave	[141]
(i) Definition of a shiftworker	[156]
(j) Other claims	[181]
Conclusion	[189]
Decision of Vice President Watson	[195]

Abbreviations

AAA	Accommodation Association of Australia
ABI	Australian Business Industrial
AIRC	Australian Industrial Relations Commission
FW Act	Fair Work Act 2009 (Cth)
ACTU	Australian Council of Trade Unions
AMWU	“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
ANF	Australian Nursing Federation
AFEI	Australian Federation of Employers and Industries
Ai Group	The Australian Industry Group
APESMA	The Association of Professional Engineers, Scientists and Managers, Australia
ARA	Australian Retailers Association
ASIAL	Australian Security Industry Association Ltd
ASU	Australian Municipal, Administrative, Clerical and Services Union
AWU	Australian Workers’ Union
Banks	Australia and New Zealand Banking Group Limited, Commonwealth Bank of Australia Limited, Westpac Banking Corporation Limited and GE Capital Finance Australasia Pty Ltd
BIAQ	Baking Industry Association Queensland - Union of Employers
BSCAA	Building Services Contractors Association of Australia, New South Wales Division
CEPU	Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
CFMEU	Construction, Forestry, Mining and Energy Union
FSU	Finance Sector Union of Australia
FWA	Fair Work Australia
FWC	Fair Work Commission
HBIA	Hair and Beauty Industry Association
HIA	Housing Industry Association
Law Firms	Allens Linklaters (formerly Allens Arthur Robinson), Allen & Overy, Arnold Bloch Liebler, Ashurst Australia, Baker & McKenzie, Clayton Utz, Corrs Chambers Westgarth, Davies Collison Cave, Dibbs Barker, Herbert Smith Freehills, Gilbert + Tobin, Hall & Wilcox, Herbert Geer, King & Wood Mallesons, Lander & Rogers, Maddocks, K&L Gates (formerly Middletons), Minter Ellison, Norton Rose Fullbright, Piper Alderman, and Russell Kennedy
MBA	Master Builders Australia Limited
MUA	The Maritime Union of Australia

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: [2013] FWCFB 6266
Decision Date: 2 SEPTEMBER 2013

CaseChat Overview and Summary

This case involved a review of various modern awards in Australia, focusing on the annual leave provisions. The Fair Work Commission (FWC) was required to conduct a review of all modern awards, other than modern enterprise awards and State reference public sector modern awards, as soon as practicable after the second anniversary of the Fair Work (Safety Net Provisions) Act commencement day. The review was intended to consider whether the modern awards achieved the modern awards objective and were operating effectively, without anomalies or technical problems arising from the Part 10A award modernisation process. The applicants, including various industry associations and unions, sought to vary various matters associated with annual leave in various modern awards.

The legal issues the court was required to decide included whether the proposed variations to the modern awards were necessary to achieve the modern awards objective and were operating effectively, without anomalies or technical problems arising from the award modernisation process. The court had to consider the merits of each application and whether the proposed variations satisfied the legislative test. The court also had to consider the interaction between the National Employment Standards (NES) and modern awards, as well as the interaction between modern awards and enterprise agreements.

The court's reasoning and outcome were that the approach adopted by the majority of the Full Bench was too restrictive and inconsistent with the legislative mandate. The court held that the review of modern awards should involve a broad judgement concerning the fairness and relevance of the minimum safety net of terms and conditions, taking into account the factors in the modern awards objective. The court found that some provisions of the modern awards were not achieving the modern awards objective or operating effectively because they were not providing a fair and relevant minimum safety net of terms and conditions.

The court concluded that the proper application of the approach should lead to variations concerning the right of an employer to direct employees to take accumulated annual leave, the incorporation of annual leave loading into awards, the payment of annual leave loading on termination of employment, the ability to make an award flexibility agreement with an employee regarding the operation of the annual leave provisions and cashing out of annual leave, and the timing of annual leave payments for employees paid by electronic funds transfer.

Final orders were made to vary the relevant modern awards in accordance with the majority decision of the Full Bench. The variations included the insertion of specific clauses regarding the right of an employer to direct employees to take accumulated annual leave, the incorporation of annual leave loading into awards, the payment of annual leave loading on termination of employment, the ability to make an award flexibility agreement with an employee regarding the operation of the annual leave provisions and cashing out of annual leave, and the timing of annual leave payments for employees paid by electronic funds transfer. The specific variations varied depending on the modern award being reviewed.

Orders