National Union of Workers
[2012] FWA 7212
•23 AUGUST 2012
[2012] FWA 7212 |
|
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
National Union of Workers
(AM2012/85)
Oil and gas industry | |
VICE PRESIDENT WATSON | SYDNEY, 23 AUGUST 2012 |
Review of modern awards - application to vary the Oil Refining and Manufacturing Award 2010 - compassionate leave - where award modernisation Full Bench has decided not to supplement NES - social inclusion Fair Work (Transitional Provisions and Consequential Amendments) Act 2009, Sch 5 Item 6. Fair Work Act 2009 ss.134, 138.
Introduction
[1] This decision concerns an application by the National Union of Workers (NUW) to vary the Oil Refining and Manufacturing Award 2010 1(the Award). The application is made under Sch. 5, Item 6 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) as part of the review of all modern awards of which Fair Work Australia is required to conduct after the first two years of all modern awards coming into effect (the 2012 Review).
[2] The application concerns a variation to the compassionate leave entitlements under the Award. As part of the 2012 Review, interested parties were directed to file submissions in either support or opposition of the variation. The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) provided correspondence indicating that they agreed to the variation sought. The Oil Industry Industrial Committee (OIIC) and related entities engaged in the oil industry in Australia, opposed the variation.
[3] At the hearing of this matter in Melbourne, Mr D Mujkic appeared on behalf of the NUW and Ms Q Le appeared on behalf of the OIIC.
[4] Compassionate leave is presently dealt with in clause 27 of the Award. It reads:
“Personal/carer’s leave and compassionate leave are provided for in the NES.”
[5] The NUW application seeks to vary the compassionate leave provision so that the clause will supplement the NES by providing an additional day of compassionate leave on each permissible occasion (as defined in s.104 of the Act).
Background
[6] The Award was made at the conclusion of the award modernisation process which was conducted by the Australian Industrial Relations Commission (AIRC) under part 10A of the former Workplace Relations Act 1996 (Part 10A process). The Part 10A process was completed in four stages, with each stage focussing on different industries and occupations. All stakeholders and any other interested parties were invited to make submissions on what should be included in modern awards.
[7] Separate consultations were conducted individually by members of the award modernisation Full Bench in respect of each modern award that was to be created to allow parties the opportunity to make submissions and raise any matters of concern.
[8] On 19 December 2008, the award modernisation Full Bench published the Stage 1 modern awards and its accompanying decision. 2 In this decision, the standard provision for compassionate leave was established. It provided that modern awards would make reference to the compassionate leave provisions of the National Employment Standards (NES) (standard compassionate leave provision).
[9] The Award was not dealt with in Stage one of the Part 10A process.
[10] On 9 March 2009, the OIIC made a submission which enclosed a draft award proposing that the Award adopt the standard compassionate leave clause put forward by the award modernisation Full Bench in Stage one of the Part 10A process.
[11] During consultation meetings with Senior Deputy President Harrison on 24 March 2009, the Australian Workers’ Union (AWU) made the submission that in some existing awards the bereavement provisions (which included compassionate leave) provided for three days of leave. 3 The AWU submitted that they would file a letter alerting the Tribunal to the more beneficial provisions. However no such letter was ever filed.4
[12] On 22 May 2009, the award modernisation Full Bench published the exposure Draft Oil Refining and Manufacturing Award 2010 (Exposure Draft Award) which contained the standard compassionate leave provision.
[13] The NUW made submissions in response to the Exposure Draft Award on 12 and 23 June 2012. On both occasions it made no comment in relation to compassionate leave.
[14] On 4 September 2009, the award modernisation Full Bench published the Award in its final form which contained the standard compassionate leave provision (2009 Full Bench Award Decision). 5
Legislation
[15] Sch. 5, Item 6 of the Transitional Act provides:
“(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).”
[16] 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
[17] In June 2012, the 2012 Review Full Bench 6 issued a decision7 (June Decision) addressing the legislative provisions applicable to the 2012 Review and the scope of the 2012 Review. The Full Bench stated at paragraph [63] the approach to be adopted by the Tribunal when making a variation. It reads:
“[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.”
[18] The 2012 Review Full Bench also made comments about the scope of the 2012 Review and the circumstances where a variation should be made when such a variation seeks to revisit matters that had been dealt with and determined under the Part 10A process.
[19] Paragraphs [85] to [89] of the decisions read as follows:
“[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).
[20] These statements provide guidance on the importance of recent considerations of the award provisions sought to be varied as part of the 2012 Review. Where an evidentiary case has been presented, direct submissions have been made and the Tribunal 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.
[21] On the issue of the application of s.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.”
Submissions of the parties
[22] The NUW submits that the variation sought should be made because it:
- is necessary to achieve the modern awards objective to the extent required by s.138 and to provide a “fair and minimum safety net of terms and conditions taking into account the promotion of social inclusion though increased workforce participation.” 8
- is permitted by the Act, in particular Subdivision B of Division 3, Part 2-3 and s.55;
- does not contravene the Act, in particular Subdivision D of Division 3 and part 2-3;
- is consistent with and promotes the objects of the Act.
[23] Further, the NUW rely on s.578(c) of the Act in support of the variation being made. Section 578(c) provides:
“578 Matters FWA must take into account in performing functions etc.
In performing functions or exercising powers, in relation to a matter, under a part of this Act (including this Part), FWA must take into account:
...
(c) the need to respect and value the diversity of the work force by helping to prevent and eliminate discrimination on the basis of race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.”
[24] The NUW submits that the AIRC has recognised that an entitlement to bereavement leave allows employees to balance and reconcile work and family responsibilities. 9 The NUW submits that some awards that previously applied to the oil and gas industry provided for 3 days of bereavement leave, that a reduction to this entitlement is a step backwards in the promotion of social inclusion through workforce participation and this situation is not consistent with s. 578(c). As such, the variation would “promote the objects of the FW Act and to the extent that it would prevent indirect discrimination on the basis of sex and family or carers responsibilities.”10
[25] OIIC opposes the application for the following reasons:
● it is an attempt to revisit as issue that was considered under the Part 10A process and the NWU has not established any cogent reasons for departing from the 2009 Full Bench Award Decision;
● there is no cogent reason or basis to vary the Award having regard to the matters which the Tribunal is required to consider, namely the achievement of the modern awards objective or the effective operation of the Award. The mere fact that the “variation sought...might be allowable, or not unlawful, is not a sufficient basis for the Tribunal to make the variation.” 11
● an extra day of compassionate leave will not have any effect, positive or negative on workforce participation or social inclusion and maintaining the 2 day per occasion minimum for compassionate leave does not involve indirect discrimination.
● the compassionate leave provision in the Award as it presently exists, is consistent with the approach of the Tribunal in a large number of modern awards. The existence of more generous compassionate leave provisions in previous awards is not a sufficient reason for varying the award. OIIC produced an analysis which showed that of the 119 modern awards that contain the standard compassionate leave provisions, more than 60 of these modern awards replaced awards that provided for a more generous entitlement. 12 There is nothing unique about the Award that would require a disruption to the approach taken by the award modernisation Full Bench in determining that it is fair and appropriate to provide the NES entitlement in awards where there was historically a more generous entitlement.
Should the variation be made?
[26] OIIC sought to rely on paragraph [85] of the June decision to submit that the 2012 Review Full Bench was suggesting that the legislature should be taken to have determined that the current terms of modern awards are consistent with the modern awards objective and this presents a barrier to the current application. As the relevant legislative provision was passed by Parliament before the content of modern awards was finalised, I do not see how this could be the case. I take the 2012 Review Full Bench to be indicating that the commonality between the test for making modern awards under the Workplace Relations Act 1996 and the status of modern awards under the Act involve substantially the same objectives and if the objectives were clearly achieved, then an award variation application would need to be assessed against this background.
[27] The June decision in relation to the 2012 Review referred to above, provides guidance as to the approach to be adopted where a variation sought has already been dealt with in the Part 10A process. It is necessary to show that there are cogent reasons for departing from a previous Full Bench decision. I do not take the 2012 Review Full Bench to be extending that proposition to all award conditions - otherwise the review would be of little utility and it would be doubtful that the Tribunal would be carrying out its statutory obligation to consider at the time of the review and on the material presented at the time, whether the Award achieves the modern awards objective.
[28] In this matter it is significant that the application concerns a matter dealt with expressly in the NES. It is also significant that the award modernisation Full Bench during the Part 10A process, decided on a standard provision for compassionate leave in all but three of the 122 modern awards in the terms of the existing provision of this Award. It did so when there was a more generous pre-existing entitlement in 60 of those awards. It is clear therefore that the approach of the award modernisation Full Bench was not to supplement the NES compassionate leave provisions by more generous award entitlements even where more generous award entitlements existed at the time the Award was made. Even though there was no express statement to this effect in relation to the Award in question, the widespread nature of the standard compassionate leave clause demonstrates that the clause was the result of a conscious decision of the award modernisation Full Bench not to supplement the NES in relation to compassionate leave.
[29] In the 2012 Review Fair Work Australia must consider whether the Award achieves the modern awards objective. In my view the NUW has not established that the compassionate leave provision which references the NES entitlement is not consistent with the modern award objective. In my view the NES entitlement is a fair and relevant minimum safety net entitlement and is not inconsistent with the needs and other considerations in the modern awards objective. Providing an additional day of leave on each permissible occasion, as sought in the application, is not required for the modern awards objective to be achieved.
[30] This conclusion is supported by the standard nature of the existing provision. If it were otherwise, then the terms of a large number of other awards would be held to be inconsistent with the modern awards objective because the circumstances of those awards are indistinguishable from this Award. Compassionate leave is properly viewed as a general workplace entitlement. Its utilisation is unlikely to be uniform across the workforce. Rather, its use will depend on the need for the benefit of particular employees. Industry circumstances are not relevant to the level of the entitlement. The award modernisation Full Bench expressly considered the general level of the entitlement and determined not to supplement the NES.
[31] Further, I do not consider that the modern awards objective of promoting social inclusion has any real significance in relation to this application. Promoting social inclusion is directed to removing exclusionary practices. It has not been demonstrated how this would be achieved by granting an additional day of compassionate leave in this industry. No case for varying the conclusion of the award modernisation Full Bench has been established.
Conclusion
[32] For the above reasons the application is dismissed. The award will not be varied in the manner sought.
VICE PRESIDENT WATSON
Appearances:
D Mujkic for the National Union of Workers.
Q Le for the Oil Industry Industrial Committee.
Hearing details:
2012.
Melbourne.
July, 20.
1 MA000072.
2 [2008] AIRCFB 1000.
3 See for example the Oil and Gas Industry bulk Liquid Terminals Award 2006 ( AP822096CRV, clause 29), the Wholesale Oil Products- Refining and Warehousing -Award 2002 (AP815945CRV, clause 29) and the Laboratory Employees’ (Oil Companies) Award 2001 ( AP809146, clause 27A).
4 Transcript of proceedings before Senior Deputy President Harrison, 24 March 2009 at PN484.
5 [2009] AIRCFB 826.
6 The award modernisation Full Bench was reconstituted to undertake the 2012 Review.
7 [2012] FWAFB 5600.
8 Exhibit M1, at para 18-19.
9 Ibid at para 21.
10 Ibid at para 22.
11 Exhibit L1 at para 17.
12 Ibid at attachment B.
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