Motor Traders' Association of New South Wales and others
[2012] FWA 9731
•14 NOVEMBER 2012
Note: An appeal pursuant to s.604 (C2012/6219) was lodged against this decision - refer to Full Bench decision dated 5 March 2013 [[2013] FWCFB 1228] for result of appeal.
[2012] FWA 9731 |
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REASONS FOR 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
Motor Traders' Association of New South Wales and others
(AM2012/52, AM2012/95, AM2012/113, AM2012/210, AM2012/220 and AM2012/263)
Clerical industry | |
SENIOR DEPUTY PRESIDENT KAUFMAN | MELBOURNE, 14 NOVEMBER 2012 |
Review of modern awards - Clerks-Private Sector Award 2010
INTRODUCTION
[1] This decision concerns applications made by , the Motor Traders’ Association of New South Wales (MTANSW), Australian Business Industrial (ABI), the Australian Industry Group (AiG), the Australian Municipal, Administrative, Clerical and Services Union (ASU), Business SA and the Victorian Employers’ Chamber of Commerce and Industry (VECCI) to vary the Clerks—Private Sector Award 2010 (Award) as part of the two-year review of modern awards pursuant to Schedule 5, Item 6, of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (the Transitional Act).
[2] The six applications were listed for mention/and or directions on 26 June 2012. Directions were issued on 11 July 2012, requiring the parties to file submissions before the matter was listed for hearing on 24 and 25 September 2012. Submissions were received from all the applicants, as well as from the Australian Federation of Employers and Industries (AFEI) and the Australian Council of Trade Unions (the ACTU).
[3] Following the hearing, a Statement was issued on 5 October 2012 1 setting out my observations on the ASU’s application to delete the annualised salaries provision, and to afford the parties an opportunity to consider and comment upon those observations. The matter was listed for further hearing in respect of this issue only on 19 October 2012. The ASU maintained its position as did the employers.
THE APPLICATIONS/SUBMISSIONS
[4] The ASU sought to vary the title of the Award and extend the Award’s coverage to include employees within the travel agency industry, and to insert clauses regarding casual conversion and dispute resolution training, as well as varying the following clauses:
- Clause 14 - Redundancy.
- Clause 17 - Annualised salaries.
- Clause 26 - Rest breaks.
- Clause 28 - Shiftwork (specifically night shift work).
[5] The application made by VECCI sought variations regarding Clause 7 - Award flexibility, which will be dealt with by a Full Bench, and the definition of ‘standard rate’ contained in Clause 3.1.
[6] Business SA’s applications sought variations in relation to Clause 12 - Casual employment, Clause 19 - Allowances, specifically the laundry allowance contained in Clause 19.2, and the insertion of a definition of ‘year’ into Clause 15 - Classifications.
[7] The ABI application proposed a variation to Clause 11 - Part-time employment and Clause 28 - Shiftwork, specifically the provisions regarding afternoon shift.
[8] The AiG and MTANSW also sought variations regarding Clause 28 - Shiftwork in relation to the afternoon shift.
THE LEGISLATIVE FRAMEWORK
[9] Sch. 5, Item 6 of the Transitional Act provides:
6 Review of all modern awards (other than modern enterprise awards and State reference public sector modern awards) after first 2 years
(1) As soon as practicable after the second anniversary of the FW (safety net provisions) commencement day, FWA must conduct a review of all modern awards, other than modern enterprise awards and State reference public sector modern awards.
(2) In the review, FWA must consider whether the modern awards:
(a) achieve the modern awards objective; and
(b) are operating effectively, without anomalies or technical problems arising from the Part 10A award modernisation process.
(2A) The review must be such that each modern award is reviewed in its own right. However, this does not prevent FWA from reviewing 2 or more modern awards at the same time.
(3) FWA may make a determination varying any of the modern awards in any way that FWA considers appropriate to remedy any issues identified in the review.
(4) The modern awards objective applies to FWA making a variation under this item, and the minimum wages objective also applies if the variation relates to modern award minimum wages.
(5) FWA may advise persons or bodies about the review in any way FWA considers appropriate.
(6) Section 625 of the FW Act (which deals with delegation by the President of functions and powers of FWA) has effect as if subsection (2) of that section included a reference to FWA’s powers under subitem (5).
[10] Further provisions of the Act are also applicable and relevant to the 2012 Review. Section 134 provides as follows:
134 The modern awards objective
What is the modern awards objective?
(1) FWA must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account:
(a) relative living standards and the needs of the low paid; and
(b) the need to encourage collective bargaining; and
(c) the need to promote social inclusion through increased workforce participation; and
(d) the need to promote flexible modern work practices and the efficient and productive performance of work; and
(e) the principle of equal remuneration for work of equal or comparable value; and
(f) the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; and
(g) the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards; and
(h) the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy.
This is the modern awards objective.
...
138 Achieving the modern awards objective
A modern award may include terms that it is permitted to include, and must include terms that it is required to include, only to the extent necessary to achieve the modern awards objective and (to the extent applicable) the minimum wages objective.
APPROACH OF FAIR WORK AUSTRALIA TO THE 2012 REVIEW
[11] In June 2012, the 2012 Review Full Bench 2 published a decision3 (the June Decision) addressing the legislative provisions applicable to the 2012 Review and the scope of the 2012 Review. The Full Bench observed:
“[63] Under sub item 6(3) of Schedule 5, the Tribunal has a broad discretion to vary any of the modern awards in any way that it considers necessary to remedy any issues identified in the Review. However, sub item 6(4) provides that in making such a variation the Tribunal must take into account the modern award objective in s.134 of the FW Act, and, if varying modern award and minimum wages, the minimum wages objective in s.284.”
[12] The 2012 Review Full Bench also made comments about the scope of the 2012 Review and the circumstances in which a variation might be made when such a variation seeks to revisit matters that had been dealt with and determined under the Part 10A process:
“[85] Two points about the historical context are particularly relevant. The first is that awards made as a result of the award modernisation process are now deemed to be modern awards for the purposes of the FW Act (see Item 4 of Schedule 5 of the Transitional Provisions Act). Implicit in this is a legislative acceptance that the terms of the existing modern awards are consistent with the modern awards objective. The second point to observe is that the considerations specified in the legislative test applied by the Tribunal in the Part 10A process is, in a number of important respects, identical or similar to the modern awards objective which now appears in s.136.
...
[86] Although the Tribunal is not, as a non-judicial body, bound by principles of stare decisis, as a matter of policy and sound administration it has generally followed previous Full Bench decisions relating to the issue to be determined, in the absence of cogent reasons for not doing so. In another context three members of the High Court observed in Nguyen v Nguyen:
“When a court of appeal holds itself free to depart from an earlier decision it should do so cautiously and only when compelled to the conclusion that the earlier decision is wrong. The occasion upon which the departure from previous authority is warranted are infrequent and exceptional and pose no real threat to the doctrine of precedent and the predictability of the law: see Queensland v The Commonwealth (1977) 139 CLR 585 per Aickin J at 620 et seq.”
[87] While the Tribunal is not a court, the public interest considerations underlying these observations have been applied with similar, if not equal, force to appeal proceedings in the Tribunal. In Re Dalrymple Bay Coat Terminal Pty Ltd a Full Bench summarised the position in relation to single members sitting at first instance as follows:
“There is not a developed system of stare decisis in this jurisdiction. However it is clearly desirable for members of the Commission sitting alone to adhere to Full Bench decisions which are relevant to the matter being determined. Such a policy aids consistent decision making which in turn provides the parties to Commission proceedings with greater certainty.”
[88] These policy considerations tell strongly against the proposition that the Review constitutes a “fresh assessment” unencumbered by previous Tribunal authority.
[89] In circumstances where a party seeks a variation to a modern award in the Review and the substance of the variation sought has already been dealt with by the Tribunal in the Part 10A process, the applicant will have to show that there are cogent reasons for departing from the previous Full Bench decision, such as a significant change in circumstances, which warrant a different outcome.”
[References omitted]
[13] Where, on the making of a modern award, an evidentiary case has been presented, direct submissions have been made and Fair Work Australia has made a determination about the relevant award provision on the basis of that material, cogent reasons will need to be advanced for departing from the award provision in the 2012 Review.
[14] On the issue of the application of section 138 of the Act to the 2012 Review, the 2012 Review Full Bench stated:
“[33] We are satisfied that s.138 is relevant to the Review. The section deals with the content of modern awards and for the reasons given at paragraph [25] of our decision it is a factor to be considered in any variation to a modern award arising from the Review. We also accept that the observations of Tracey J in SDAEA v NRA (No.2), as to the distinction between that which is “necessary” and that which is merely desirable, albeit in a different context, are apposite to any consideration of s.138.
[34] While s.138 is relevant to the Review there is still the question of the extent of its impact and the circumstances in which it will have on an application to a variation determination. The supplementary submissions revealed a diversity of views about these issues. We are not persuaded that these issues have been the subject of sufficient debate at this stage. The precise impact of s.138 is a question best considered in the context of a particular application. We agree with the RCAV’s supplementary submission that “the nature of the evidence and the facts as found arising from that evidence will condition the exercise of power and the ultimate outcome required to be determined by the review.”
[15] It is apparent that those seeking a variation to a modern award in the 2012 Review must demonstrate that the award is not achieving the modern awards objective, or that it is not operating effectively, without anomalies or technical problems arising from the Part 10A award modernisation process. Further, it follows, that the variation sought must address one or both of these defects, or that there are other cogent reasons for making the variation as part of the 2012 Review.
AWARD TITLE
[16] The ASU submits that the Award would more appropriately be entitled ‘Clerical and Administrative Employees Award 2010’, to make it more consistent with its coverage clause. It submits that the current title, Clerks—Private Sector Award 2010, limits the public perception of award coverage to a restricted number of employees, whereas the ‘critical mass’ of predecessor awards had ‘administrative employees’ in their title.
[17] I am not persuaded by the ASU’s argument. In my view it has not demonstrated that there is a public perception that the Award is limited as it contends. It has led no evidence.
[18] VECCI submitted that a variation to the name of the Award, given its three years of operation, is itself likely to cause confusion. It further submitted that there would likely be an administrative cost and inconvenience involved in changing records to reflect a name change.
[19] I tend towards VECCI’s submissions on this matter. Currently, the Award covers “employees engaged wholly or principally in clerical work, including administrative duties of a clerical nature... ”. in my view this adequately describes the nature of the work covered by it.
[20] Further the ASU has not demonstrated that the Award, whilst it has its current title, does not meet the modern awards objective. Nor has it shown that the variation is necessary or desirable in order that the Award could better achieve that objective. The title will not be altered.
COVERAGE - TRAVEL AGENTS
[21] The ASU seeks to vary the Award by including travel agent specific classifications and conditions into the Award. The proposed variation is opposed by AFEI, the AiG, ABI, VECCI and Business SA.
[22] The ASU tendered an indicative classification structure derived from documents produced by the Travel Industry Careers Association Australia in support of the inclusion of the travel agents classifications it seeks to have included in the Award. The ASU submits that the Award is the most appropriate award to cover the work performed by travel industry employees. It submits that the General Retail Industry Award 2010 4, which some of the employers suggest may cover these employees, is not appropriate. Further the ASU submits that the variation is consistent with the modern awards objective and is appropriate in the circumstances.
[23] AFEI and the AiG oppose the ASU application in relation to coverage and submit that this matter that has already been considered in at least two Full Bench decisions 5 and that no cogent reasons have been provided as to why these issues should be revisited.
[24] This view was echoed by Business SA which submitted that this matter had been resolved during the award modernisation process and that the ASU has not provided sufficient grounds to justify departing from the previous Full Bench decision.
[25] AiG further submits that the fact there isn’t specific coverage of travel agents in the Award or the General Retail Industry Award 2010, doesn’t mean that travel agents or the work of travel agents isn’t covered by either award (or another award). It submits that it isn’t necessary to have a specific title or reference to travel agents in order for their coverage to be clear or understood.
[26] ABI opposes the ASU application in relation to coverage of travel agents. It refers to the Modern Awards Review 2012 decision in June this year in which the Full Bench indicated that:
“...to the extent that any Review application seeks to alter the coverage of a modern award, the requirements set out in ss.162–164 in Division 6 of Part 2-3 of the FW Act will be relevant.”
[27] ABI submits that accordingly, it is necessary to take into account section 163(1) of the Fair Work Act 2009 which provides:
163 Special criteria relating to changing coverage of modern awards
Special rule about reducing coverage
(1) FWA must not make a determination varying a modern award so that certain employers or employees stop being covered by the award unless FWA is satisfied that they will instead become covered by another modern award (other than the miscellaneous modern award) that is appropriate for them.”
[28] ABI submits that currently there is tension between the Award and the General Retail Industry Award 2010 in relation to coverage of travel agents, and the question as to which award applies is one of fact to be determined at the time such an issue arises for determination.
[29] VECCI supports the ABI submission on this pointand further submits that the ‘online career information’ tendered by the ASU as evidence that travel consultants perform clerical or administrative work is neither relevant nor probative to the exercise of determining their primary function.
[30] VECCI submit that the application must fail on a basic analysis of the ‘primary function test’ which has been applied regarding award coverage matters for the last two decades.
[31] It may be that there is a need to have specific award coverage for travel agents, however a good deal more evidence than has been provided by the ASU would be required.
[32] I would also need to be satisfied that employers in the travel industry were aware of the application and had an opportunity to make submissions, not only on whether or not travel agents should be included, but if they were on the appropriate classification structure and job descriptors.
[33] I am not satisfied that it is appropriate for me to accede to this aspect of the ASU’s application at this time, however I will reserve liberty for it to apply to have this aspect of its application relisted.
CASUAL CONVERSION
[34] The ASU seeks the inclusion of a casual conversion clause, which would allow casual employees to convert to permanent employment after six months of employment. This variation is opposed by the AiG, ABI, AFEI, Business SA, MTANSW and VECCI.
[35] The ASU notes that the Full Bench had considered casual conversion clauses during the Part 10A Award Modernisation proceedings and relevantly stated:
“[51] .... Modern awards can contain a casual conversion provision. In light of the arbitral history of such provisions in the federal jurisdiction we shall maintain casual conversion provisions where they currently constitute an industry standard, but we shall only extend them in exceptional circumstances. The modern awards reflect this approach...” 6
[36] In an attempt to demonstrate that that such a clause was an industry standard, the ASU points to a number of predecessor awards which contained casual conversion clauses and also identifies the modern awards that contain a casual conversion clause.
[37] The ASU further submits that “there is sufficient evidence illustrating the high incidence of casual employment amongst employees covered by” the Award. The ASU relied on the survey to which I have already referred in relation to annualised salaries. However, as none of the employees who responded to the survey was employed on a casual basis, the results of the survey are irrelevant on this aspect of the case.
[38] The parties opposing this application each made submissions that the inclusion of a casual conversion clause was not an industry standard.
[39] Specifically, the AiG noted that the ASU’s submission that there has been an increase in casual employment is unfounded and that even if the inclusion of such a clause is desirable, it is not necessary for the Award to operate effectively or to achieve the modern awards objective.
[40] MTANSW further submitted that the Full Bench assessed the position accurately as to where such provisions are an industry standard and nothing significant has arisen since to provide a cogent reason for a change now.
[41] VECCI submitted that pointing out what applied in the past, or what applies in other industries and occupations is not, in and of itself, a cogent reason to re-agitate this matter.
[42] I generally accept what was put by the employers on this issue. It appears that this particular question was considered by a Full Bench of the Australian Industrial Relations Commission during the Part 10A Award Modernisation Process. The ASU did not lead any evidence that would persuade me that there is a cogent, or indeed any, reason as to why I should accede to this part of its application.
[43] The Award without that clause meets the modern awards objective. The ASU has not demonstrated that including it will better achieve that objective. I will not insert a casual conversion clause into the Award.
DISPUTE RESOLUTION TRAINING LEAVE
[44] The ASU seeks to include a dispute resolution training leave provision into the dispute resolution clause of the Award.
[45] In pursuing this variation, the ASU acknowledged that this issue had been considered by a Full Bench early in the award modernisation proceedings. The Full Bench relevantly noted “... Dispute resolution training leave, although quite common in pre-reform awards prior to the Work Choices amendments, has never been a test case provision. We have decided to maintain dispute resolution training leave where it is a prevailing industry standard.” 7
[46] The ASU submitted that a dispute resolution training provision was a prevailing industry standard prior to the introduction of the modern awards and listed a number of predecessor awards which it submits contained a dispute resolution training clause or a clause to similar effect. It also referred to 15 modern awards which it says contain a dispute resolution training provision.
[47] It was further submitted that this type of clause is consistent with the objects of the Act and that it ‘fell through the net’ because of the tight timeframe for the award modernisation process and that such a clause would not impose a significant cost to employers as it only applies to employee representatives where they exist.
[48] AiG, ABI, Business SA, the AFEI and MTANSW oppose the inclusion of this clause.
[49] AiG submitted that the inclusion of such a clause would impose a significant cost on employers, especially smaller employers.
[50] ABI concurred with the AiG’s submission on the cost of such a clause and submitted because of the impact on employment costs, such a variation would be contrary to the modern awards objective.
[51] ABI, Business SA, AFEI and MTANSW each submitted that dispute resolution training clauses were not a prevailing industry standard and that this is evidenced by the Full Bench declining to include this type of clause in the Award during its creation.
[52] MTANSW specifically objected to the evidence led by the ASU and put that the awards specified by the ASU appeared to be sector or company specific and not of general application.
[53] It appears to me that this particular issue was decided by the Full Bench and the ASU has not satisfied me that cogent reasons exist for departing from the Full Bench decision.
[54] In my view, the Award meets the modern awards objective without a dispute resolution training clause and the ASU has not demonstrated to me that it would better meet that objective were the clause to be included. I am not prepared to include the clause sought by the ASU.
SMALL BUSINESS REDUNDANCY
[55] The ASU seeks to vary the Award to provide for redundancy entitlements for employees of small business employers previously covered by federal transitional awards.
[56] It submits that such a variation will assist in achieving the modern awards objective of fair and relevant award conditions and that restoring redundancy entitlements for small business employees until 31 December 2014 is consistent with the current transitional provisions for employees previously covered by NAPSAs and Division 2B State awards.
[57] The ASU submits that it has several members employed by small employers who have since 1 January 2010 lost a basic minimum entitlement to redundancy pay.
[58] This variation was opposed by VECCI, MATNSW, the AiG, AFEI and ABI.
[59] VECCI submitted that the inclusion of a small business redundancy provision would exclude a term of the NES and therefore offend section 30 of the Act.
[60] Further VECCI, repeating the argument made during award modernisation proceedings, submits that as a result of the Work Choices amendments 8 to the Workplace Relations Act 1996, small business redundancy became a non-allowable award matter.
[61] MTANSW also opposed the variation on this basis, submitting that under the Work Choices amendments commencing 27 March 2006 redundancy severance pay was an allowable award matter under section 513 but only within the meaning of section 513(4). They submitted that, in effect, this meant redundancy severance pay was only an allowable matter to a business with 15 or more employees.
[62] VECCI, AFEI, ABI, Business SA and the AiG each submitted that as this matter has already been considered, and ultimately dismissed, by a Full Bench during award modernisation proceedings 9. The Full Bench stated:
“[60] Seen in the context of the history we have set out, the terms of the NES indicate an intention to adopt the Commission’s 1984 decision in relation to small business—that employees of employers of fewer than 15 employees should not be entitled to redundancy pay. We are obliged by the terms of the NES to observe the small business exemption. We therefore conclude that the draft provision would exclude a term of the NES contrary to the terms of s.30. We also find that it is not necessary to include the provision in modern awards generally to ensure the maintenance of the safety net. As a general rule, therefore, the small business exemption will be maintained. We shall make an exception for federal awards and industries in which there was no small business exemption prior to the Redundancy Case 2004. Among the priority modern awards the only award in this category is the Textile industry award. The terms of the Textile industry award will include the small business redundancy pay provisions previously in the Clothing Trades Award 1999. 10 The provision will only apply to the clothing industry.”
[63] It is the view of these employer parties that the intention of the Full Bench is quite clear and that the ASU has not shown cogent reasons to depart from the Full Bench’s position or that any significant change in circumstances which warrants a different outcome.
[64] ABI also submitted that the variation is not in line with the modern awards objective, as the cost of redundancy payments for small businesses would have a negative impact on the large number of small employers covered by the Award, contrary to section 134(1)(f) of the Act.
[65] Broadly, for the reasons advanced by the employers, I am not persuaded to vary the Award in respect of redundancy payments to employees of small employers.
[66] I am of the view that to include such a clause within the Award would conflict with the National Employment Standards contained within the Act. Further, the ASU has not demonstrated that the Award in its current form does not achieve the modern awards objective or that the inclusion of the clause would better achieve it.
ANNUALISED SALARIES
[67] The ASU seeks to remove clause 17, the annualised salaries provision, of the Award. This variation is opposed by all parties that have made an application in relation to the review of the Award, as well as the AFEI. The ACTU filed submissions in support of this variation.
[68] In pursuing this variation, the ASU tendered a survey to support the removal of clause 17. The ASU submitted that this survey indicated that a majority of employees surveyed were not given a choice as to whether or not to be paid on this basis, considered that the conditions pertaining to the arrangement had been adequately explained, had never reviewed the arrangement to compare it with award entitlements and would not, given the choice, prefer to be paid in accordance with award conditions.
[69] The ASU further submitted that the survey results showed that just under 5% of those responding believed that their annualised salary arrangement compensate them for entitlements they would otherwise have received under the Award. Approximately one third were unsure.
[70] It is worth noting that the survey tendered was based on the responses of approximately 63 people, which in reality, is a miniscule proportion of those covered by the Award
[71] On 22 October 2012 I declined to delete an annualised salaries clause in the Contract Call Centres Award 2010 (the CCC Award) 11 in the Review of that award12. The ASU had sought the deletion of that clause on similar grounds to those it propounds in this application.
[72] In my reasons for decision I traced the history of the making of the CCC Award, an analysis that required an examination of the history of the insertion of the annualised salaries clause into this Award. Although there are differences in the wording of the clauses in the CCC Award and the Award, their genesis is similar, as is their effect, albeit the clause in the Award applies to all employees covered by it.
[73] The number of award clauses against which an annualised salary can be offset is not the same between the two awards. Nevertheless, for the purposes of the Review, the differences between the two awards are not of such a nature as would lead to a different conclusion.
[74] Apart from the insufficient size of the sample surveyed, the answers given would not persuade me that there is any need to remove the annualised salaries clause from the Award.
[75] In refusing to remove the annualised salaries clause in the Award, I adopt my reasoning in the review of the Contract Call Centres Award 2010.
REST BREAKS
[76] The ASU submits that the rest break provision contained in clause 26.2 of the Award should be reviewed as part of the Modern Awards Review 2012. In its view, this clause is inconsistent with the original intent of the entitlement.
[77] The ASU submits that the original intent of the rest breaks entitlement in the Award was to have two 10-minute rest breaks for a full-time employee working a 38-hour week, 7.6 hours per day. The ASU submits that this is in line with similar provisions in the Aged Care Industry Award 2010 13 and the Pharmacy Industry Award 201014.
[78] This particular clause was subject to an application to vary made by ABI in 2009. 15 The application was dealt with by a Full Bench16 that amended the variation and relevantly stated:
“[14] Paid rest breaks are required to be given under the award in addition to the unpaid meal break to be given within five hours of commencing work. The stated purpose of the application by ABI is to limit the number of rest breaks when employees work less than eight hours on a day. ABI submits that on the current wording of the clause two rest breaks would be required to be given in all circumstances, including to a casual employee working a minimum engagement of three hours.
[15] Following a hearing of the application ABI submitted a revised order providing for one rest break when a period of duty is between three and eight hours and two rest breaks when a period of duty is at least eight hours. The ASU accepted that it is not appropriate to have two rest breaks for a three hour engagement. It sought an opportunity to indicate its position further but failed to do so.
[16] We accept the merit of the application and will issue an order amending cl.26.2 in terms of the amended draft order filed on 17 December 2010.”
[79] The ASU submits that there was a mistake in the drafting of the variation in respect of the reference to ‘eight hours’ rather than ‘7.6 hours’, and that this constitutes a technical anomaly. The ABI application was originally in relation to casual and part-time employees working between three and five hours and potentially getting a second rest break.
[80] AiG, AFEI, VECCI and MTANSW oppose the ASU’s submissions.
[81] AiG and the ABI noted that the matter has been addressed by a Full Bench and that the ASU had the opportunity to respond to the proposed clause by ABI during those proceedings but failed to do so.
[82] ABI further submitted that there is no ambiguity or anomaly or other technical problem arising from the clause 26.2 of the Award as it currently stands.
[83] AFEI and VECCI submitted that there does not appear to be a cogent reason to revisit a matter already decided by a Full Bench and the clause appears to operate effectively.
[84] VECCI further submitted that on the face of the materials from those proceedings, there is nothing ‘disingenuous’ about how the matter was decided. Consequently, there does not appear to be an anomaly or technical problem arising out of the modernisation process.
[85] MTANSW opposes the proposed variation to rest breaks. It submits that in ultimately awarding one rest break for a normal day of work and two breaks for longer days of at least 8 hours, the Full Bench reflected the mixed award position on this under the awards being reviewed and determined a balanced position.
[86] I am not minded to vary the clause. It is clear that the matter has been considered by the Full Bench and decided against the ASU.
[87] The ASU has not led any evidence that would persuade me to vary the clause, nor do I believe that the current clause is anomalous or unfair or that varying it is necessary or desirable, in order for the Award would achieve the modern awards objective; it already does.
AWARD FLEXIBILITY
[88] VECCI seek to amend clause 7.1 of the Award to add ‘minimum engagement period’ and ‘preferred hours option’ as terms in respect of which individual agreements may be made between employers and one or more employees. This submission was supported by the AiG and MTANSW.
[89] As set out in the President’s Statement of 27 April 2012 17, award flexibility is one of a number of ‘common issues’ identified, and is to be dealt with by a Full Bench.
[90] The directions issued in this matter on 11 July 2012 directed parties to confine their materials to issues that are not being considered by a Full Bench. Accordingly, I was not required to decide this issue.
DEFINITION - ‘STANDARD RATE’
[91] VECCI seeks vary clause 3.1 of the Award on the basis that the existing definition of ‘standard rate’ is ambiguous and uncertain. The definition currently reads as follows:
standard rate means the minimum weekly wage for a Level 2 in clause 16—Minimum weekly wages
[92] VECCI submits that, as there are two ‘Level 2’ minimum rates of pay contained in the Award, varying the definition to specify the intended year level would eliminate any confusion. VECCI seeks to insert the words ‘Year 1’ after ‘Level 2’ so that the amended clause would read:
“standard rate means the minimum weekly wage for a Level 2, Year 1 in clause 16—Minimum weekly wages”
[93] This variation is supported by the AiG, Business SA and MTANSW. MTANSW further submits that if the variation is made, it should be subject to retrospective operation back to 1 January 2010 to avoid potential underpayment claims.
[94] The ASU opposes the variation on the basis that it is not necessary to achieve the modern awards objective, as the current clause has not been an issue of confusion for employees or members of the ASU. Further, the ASU questioned why the lower ‘Year 1’ rate should be used rather than the ‘Year 2’ rate.
[95] In my view, the current wording of the clause is unclear and it is indeed uncertain how this clause is to operate.
[96] It seems that employers use Level 2, Year 1 as the appropriate definition of “standard rate”. That the ASU can contend that it should be Level 2, Year 2 highlights the potential for conflict.
[97] VECCI’s proposed amendment will remove an anomaly and ensure that the Award is operating effectively.
[98] The more natural meaning for ‘standard rate’ is that contended for by VECCI. Had the Full Bench intended that it to be Level 2, it would no doubt have said so.
[99] The clause will be varied to reflect this. In my view the circumstances are sufficiently exceptional to make the variation operate from the coming into operation of the Award.
CASUAL EMPLOYMENT
[100] Business SA seeks to amend clause 12.2 of the Award to clarify the application of penalties, overtime and shift allowances to the casual rate of pay. The proposed variation is supported by the AiG, MTANSW and VECCI, and opposed by the ASU.
[101] Business SA submits that the Award doesn’t define the appropriate calculation method for a casual employee and refers to a Full Bench award modernisation decision which, although in relation to a different industry, discusses the basis upon which casual employees should be paid overtime. The Full Bench stated:
“[150]Some concern was raised in relation to the basis upon which a casual employee should be paid overtime. Two examples were given. The first is the separate calculation of overtime on the ordinary rate and the calculation of the casual loading also on the ordinary rate. The second is the cumulative approach. The ordinary rate plus the casual loading forms the rate for the purpose of the overtime calculation. We believe that the correct approach is to separate the calculations and then add the results together, as illustrated by the first example, rather than compounding the effect of the loadings.” 18
[102] Accordingly, Business SA submits that the non-cumulative approach would be the appropriate calculation to apply in the Award and that this should be clarified in the award.
[103] The ASU opposes the proposed variation on the basis that it is not necessary and was not raised by any other party as an issue of concern.
[104] The ASU submits that the current clause reflects the drafting of casual clauses in the greater majority of predecessor clerical awards and that business SA has not provided any evidence of confusion to support its claim that the variation is necessary to support the modern awards objective.
[105] I am inclined to agree with the ASU. Business SA led no evidence that there is confusion about how the payment is to be calculated. It referred to an opinion of the Fair Work Ombudsman that is consistent with what was said by the Full Bench.
[106] In my view the proposed variation is neither necessary nor desirable.
LAUNDRY ALLOWANCE
[107] Business SA seeks to clarify the laundry allowance for part-time and casual employees by varying clause 19.2(c) of the Award. Clause 19.2(c) of the Award currently provides:
19. Allowances
...
19.2 Clothing and footwear
...
(c) When an employee is required to wear and launder a uniform any cost of the uniform must be reimbursed and the employee must be paid $3.55 for laundry expenses per week.
[108] Business SA submitted that as clause 19.2(c) does not differentiate between the different categories of employment, it may be misinterpreted as to how this allowance applies.
[109] As there is no equivalent ‘pro-rata’ provision in relation to casual employees, Business SA submits that the clause is confusing and accordingly propose a new clause that enables pro-rata payment to part-time and casual employees. It proposes to replace the current provision with the following:
“(c) When an employee is required to wear and launder a uniform any cost of the uniform must be reimbursed and the employee must be paid the following applicable allowance:
(i) For a full-time employee - $3.55 for laundry expenses per week;
(ii) For a part-time or casual employee – $0.71 per shift.”
[110] Business SA submitted that the clause may be interpreted in two ways, both of which lead to an undesirable outcome.
[111] First, given clause 11.2 of the Award, part-time employees may be paid the allowance on a pro-rata basis while casual employees were paid the full weekly allowance regardless of their ordinary weekly hours.
[112] Second, the clause could be interpreted to mean that the allowance of $3.55 per week is payable regardless of the actual hours worked by the employee. This could potentially result in a full-time employee receiving a much lower allowance on a per shift basis compared to a part-time or casual employee.
[113] This variation is supported by MTANSW and the AiG. The AiG noted that the variation would remedy the inconsistency in respect of the payment of the laundry allowance. I do not believe that the circumstances require a retrospective date of operation.
[114] MTANSW also put that the variation should operate retrospectively from 1 January 2010 to avoid potential underpayment claims.
[115] The ASU opposes the application regarding laundry allowance as it has never been an issue either before or after modernisation. It submits that predecessor clerical awards did not define such entitlements in this way.
[116] In my view it is logical that an employee, who only works, say, one shift per week, would not launder the uniform on a weekly basis. Therefore a per shift allowance is appropriate for employees who work on such a basis.
[117] It is worth noting that the pro-rata provision in Clause 11.2 of the Award somewhat has the same effect of this variation for part-time employees; however this clause does not apply to casual employees. In my view casual employees should be treated in the same manner as part-time employees in this regard. The variation will have the effect of achieving this outcome, as well as clarifying a potential ambiguity or anomaly in the Award for both categories of employee.
[118] The clause will be varied in the manner sought by Business SA.
DEFINITION - ‘YEAR’
[119] Business SA seeks to insert a definition for ‘year’ into clause 15 of the Award. The proposed variation reads as follows:
“15.3 ‘Year’ in respect to the minimum weekly wages in clause 16 shall mean any service within the classification level of clerical work, including administrative duties of a clerical nature. The onus is on the employee to provide reasonable evidence to verify their service within the industry.”
[120] Business SA submits that the proposed clause was sourced from the “Clerks’ (South Australia) Award NAPSA’ which defined “service” as “any adult service as a clerk within the industry of clerks”. This clause did not find its way into the Award during the Part 10A Award Modernisation process, thus Business SA submit that the proposed variation will eliminate any confusion or uncertainty regarding the interpretation of the Award.
[121] There were no submissions opposing this variation.
[122] In my view, the proposed variation is to the benefit of employees, as it clarifies that any service in the classification level of clerical work, whether with a person’s current employer or not, is to be taken into account in determining an employee’s classification level.
[123] As the proposed clause operates to the employee’s benefit, and as the knowledge of length of service with a previous employer is that of the employee, it is appropriate for the employee to bear the onus of demonstrating the length of service in the classification.
[124] I will accede to Business SA’s application to vary the Award in this manner.
PART-TIME EMPLOYMENT
[125] ABI proposes a variation to clause 11.4 which would allow an employer and a part-time employee to agree to work in excess of their normal hours up to a maximum of 38 hours per week. The proposed variation would be limited to additional time worked during the ordinary hours of operation of the business and payment would be made at ordinary time rates.
[126] Clauses 11.4 and 11.6 of the Award currently provide:
11.4 Changes in hours may only be made by agreement in writing between the employer and employee. Changes in days can be made by the employer giving one week’s notice in advance of the changed hours.
...
11.6 All time worked in excess of the hours as agreed under clause 11.3 or varied under clause 11.4 will be overtime and paid for at the rates prescribed in clause 27—Overtime rates and penalties (other than shiftworkers).
[127] The specific variation sought by ABI is the addition of the following sentence to clause 11.4:
“A part-time employee may agree to work in excess of their normal hours as agreed in clause 11.3 and will be paid at ordinary time up to a maximum of 38 hours per week provided that the additional time worked is during the ordinary hours of operation of the business.”
[128] ABI submits that the current clause creates a barrier to business needs and flexible modern work practices. It submits that the current operation of the clause acts as a disincentive for employers to provide staff with additional hours and that creates a reliance on a casual workforce to the detriment of other employees.
[129] ABI also cited the financial cost for employers in paying overtime for work in excess of agreed hours and the impracticality of the notice period stipulated in the award for changing agreed hours as reasons for the variation.
[130] ABI submits that these issues cannot be resolved through the award flexibility clause and that this variation creates a safety net term that is both fair and relevant and for the benefit of both the employer and employee.
[131] AiG, Business SA, MTANSW and VECCI support the variation sought by ABI. The ASU opposes the variation.
[132] AiG submits that the proposed variation reflects modern business practices and would enable workplaces to operate flexibly. Business SA submits that the current clause is restrictive and impedes business as well as employee needs by acting as a barrier to part-time employment.
[133] The ASU submits that the variation sought would not provide a fair and relevant minimum safety net of terms and conditions for part-time employees covered by the award in the same way that a critical mass of predecessor awards did previously.
[134] The ASU further submitted that the award flexibility clause would address any desire for an individual flexibility arrangement genuinely sought by either an employer or employee and that the proposed variation is not necessary to achieve the modern awards objective.
[135] I have decided not to accede to ABI’s proposal. As with many of the other changes sought in this matter, no evidence has been adduced such as would persuade me that the current clause does not meet the modern awards objective or that it is anomalous or working inefficiently. I am satisfied that the Award, whilst it contains the clause, meets that objective.
SHIFTWORK PROVISIONS
[136] Shiftwork is defined in clause 28 of the Award as follows:
28.1 Definitions
(a) Afternoon shift means any shift finishing after 6.00 pm and at or before midnight.
(b) Night shift means any shift finishing after midnight, and at or before 8.00 am
(c) Permanent night shift means a night shift which does not rotate with another shift or shifts or day work and which continues for a period of not less than four consecutive weeks.
[137] The parties highlighted two aspects of this clause for review, the definition of night shift and the definition of afternoon shift.
‘Night shift’
[138] The ASU submits that there is an anomaly in the current definition of ‘night shift’ regarding when an employee is entitled to penalty rates. The ASU submitted that an employee who begins a shift between midnight and 6.00 am and finishes after 8.00 am does not attract any penalty. The ASU submits that the applicable night shift penalty should be paid in this situation and seeks to vary the Award by replacing the current clause 28.1(b) with the following:
“(b) Night shift means any shift commencing between midnight and 6.00 am or finishing after midnight and at or before 8.00 am.”
[139] VECCI supports the ASU’s variation in principle and submits that the effect of the current clause could not have been intended during the award modernisation process, it however submits that the variation proposed does not achieve the clarification required.
[140] VECCI has reservations regarding the proposed wording, in particular the use of the word ‘or’ between the two qualifying conditions, which it submits may have a far broader effect than intended.
[141] MTANSW offered an alternative variation based on the clause in the Vehicle Manufacturing, Repair, Services and Retail Award 2010 19:
“(a) Afternoon shift means any shift commencing after noon and not later than 6.pm (except for a day worker engaged under clause 25 where the ordinary hours finish no later than 7.00 pm)
(b) Night shift means any shift commencing after 6.00 pm and not later than 4.am”
[142] ABI, AFEI and the AiG oppose the variation, submitting that the current night shift definition is clear and there is no anomaly or technical problem, as it is apparent elsewhere in the Award that overtime is payable for work performed outside the span of hours.
‘Afternoon shift’
[143] ABI and the AiG seek to vary clause 28.1(a) to align the definition of ‘afternoon shift’ with the spread of ordinary hours for a day worker outlined in clause 25.1(b). Clause 25.1(b) provides that:
25. Ordinary hours of work (other than shiftworkers)
25.1 Weekly hours of work—day workers
...
(b) The ordinary hours of work (for day workers) may be worked from 7.00 am to 7.00 pm Monday to Friday and from 7.00 am to 12.30 pm Saturday...
[144] ABI, the AiG and MTANSW submit that when clause 25.1 and 28.1(a) are read together, an employee working a day shift finishing after 6.00 pm and at or before 7.00 pm on a Monday to Friday, could be deemed to be an afternoon shift worker and thereby entitled to the afternoon shift loading for the entire shift. These parties seek to vary clause 28.1(a) as follows:
“(a) Afternoon shift means any shift finishing after 7.00pm and at or before midnight.”
[145] ABI submits that the proposed variation is directed toward achieving the modern awards objective; in particular, it submits that the current clause creates an unnecessary administrative burden on employers.
[146] AiG seeks a retrospective operative date of 1 January 2010 to ensure companies are not exposed to back pay risks as a result of the error in the Award. AiG submits that a retrospective variation is permitted under Item 6(3) of Schedule 5 of the TPCA Act 2009. Alternatively, the application is pressed under section 160 of the Fair Work Act 2009 on the basis that the terms of the Award are uncertain and that retrospective variations are permitted under that section.
[147] AFEI, Business SA and VECCI support the variation and agree that an inconsistency between the span of day work hours and the finishing time for an afternoon shift exists in the Award as it currently stands.
[148] The ASU opposes the proposed variations to the definition of ‘afternoon shift’ and submits that the proposed variation confuses the separate and distinct definition of shift work and ordinary day work within the ordinary span of hours. It contends that definitions of shift work and ordinary hours for day workers should remain separate arrangements of work and should not be confused or conflated so as unsociable hours are increasingly treated like ordinary hours.
[149] I am attracted towards the ASU submissions on this matter. In my view clauses 25 and 28 have different work to do as they operate in respect of different types of employees; day workers and shiftworkers respectively.
[150] I do not accept the submissions of ABEI, AFEI and AiG that the overtime provisions apply for work performed by shift workers outside the normal span of hours.
[151] Although clause 25 specifies a span of hours from 7.00 am to 7.00 pm on Mondays to Fridays and 7.00 am to 12.30 pm on Saturdays, there is no such specification in clause 28, which mandates only a maximum span of 10 hours per day.
[152] Nevertheless, it appears to me that the current definitions of afternoon and night shifts suffer from the vice that no commencement time is specified, leading to the anomaly identified by the ASU in relation to night shift.
[153] It is inherently desirable, to avoid uncertainty and for administrative convenience, that the latest time to end the afternoon shift and/or to commence the night shift should be consistent with the end of the span of hours of the day shift for day workers.
[154] I am not satisfied that the variations proffered by the parties in this matter will best resolve the issues identified. In my view, the following variation is appropriate:
(a) Afternoon shift means any shift finishing after 7.00 pm and at or before midnight.
(b) Night shift means any shift finishing after midnight, and at or before 7.00 am
[155] As this particular formulation was not proposed by any party to these proceedings, I will allow any interested party to file and serve written submissions on this issue within seven days of the date of this decision before issuing a determination to vary the Award. Given the nature of the variation, I do not believe that it should operate retrospectively.
SENIOR DEPUTY PRESIDENT
Appearances:
Mr N. Barkatsas and Mr M. Ritchie for the Victorian Employers’ Chamber of Commerce and Industry
Mr A. Baumgartner for the Motor Traders’ Association of New South Wales
Mr S. Forster for the Australian Federation of Employers and Industries
Mr J. Nucifora for the Australian Municipal, Administrative, Clerical and Services Union
Mr P. Ryan, by leave, for the Australian Road Transport Industrial Organization
Ms G.Vaccaro for the Australian Industry Group
Mr A. Vernier, by leave, Ms A. Symes and Mr S.Haynes on behalf of Australian Business Industrial
Mr H. Wallgren for Business SA.
Hearing details:
2012
Melbourne, Sydney and Adelaide
26 June, 24 September and 19 October
Final written submissions:
2012
18 October
1 [2012] FWA 8600
2 The award modernisation Full Bench was reconstituted to undertake the 2012 Review.
3 [2012] FWAFB 5600.
4 MA000004
5 [2009] AIRCFB 450 and [2010] FWAFB 248
6 [2008] AIRCFB 1000
7 Paragraph [46] of [2008] AIRCFB 1000, 19 December 2008
8 Workplace Relations Amendment (Work Choices) Act 2005
9 [2008] AIRCFB 1000
10 AP772144CAV.
11 MA000023
12 [2012] FWA 9025
13 MA000018 Clause 24.2
14 MA000012 Clause 28.3
15 AM2009/157
16 [2010] FWAFB 248, 20 January 2010
17 [FWAFB] 2012 ...
18 [2009] AIRCFB 345
19 MA000089
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