National Union of Workers Commercial Radio Australia Ltd Business SA
[2012] FWA 8757
•17 OCTOBER 2012
[2012] FWA 8757 |
|
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
National Union of Workers
Commercial Radio Australia Ltd
Business SA
(AM2012/87, AM2012/124 and AM2012/264)
Commercial sales | |
SENIOR DEPUTY PRESIDENT KAUFMAN | MELBOURNE, 17 OCTOBER 2012 |
Modern Awards Review 2012 - application to vary the Commercial Sales Award 2010.
Introduction
[1] The National Union of Workers (NUW), Commercial Radio Australia Ltd (CRA) and Business SA have each applied to vary the Commercial Sales Award 2010 1 (the Award). These applications are 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 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 NUW application seeks to amend clause 10.4 of the Award, which relates to conditions of casual employment.
[3] The CRA application seeks to amend clauses 23 and 24.3 of the Award. Clause 23 relates to overtime and penalties when employees undertake work outside the ordinary hours of work outlined in clause 21. Clause 24.3 relates to the payment of leave loading to employees absent from work on annual leave.
[4] The Business SA application also seeks to amend clause 23 of the Award.
[5] I have not referred to those parts of the applications that were not pressed by the various parties.
[6] As part of the 2012 Review, interested parties were directed to file submissions in either support of or opposition to the variation. Submissions were received from each of the applicants, as well as the Australian Industry Group (the AiG), Australian Business Industrial (ABI), and the Australian Federation of Employers and Industries (the AFEI).
[7] Hearings were conducted in Melbourne with parties appearing by video link from Sydney and Adelaide. Ms E. Barrett appeared for the NUW, Ms S Haynes appeared for ABI, Mr S Burke appeared for the CRA, Ms G Vaccaro appeared for the AiG, Mr H Wallgren appeared for Business SA and Mr S Forster appeared for the AFEI.
Clause 10.4
[8] Clause 10.4 of the Award reads:
10.4 Casual employment
(a) A casual employee is an employee engaged as such.
(b) A casual employee must be paid per hour at the rate of 1/38th of the weekly rate prescribed for the class of work performed, plus 25%. This loading is instead of entitlements to leave and other matters from which casuals are excluded by the terms of this award and the NES.
[9] The NUW seeks to add the following sub clause to the current clause:
(c) An employer is required to roster a casual employee for a minimum of three consecutivehours on any shift.
Clause 23
[10] Clause 23 of the Award reads:
23. Overtime and penalty rates
23.1 Overtime
An employee directed by the employer to perform any duty after 6.00 pm Monday to Friday inclusive, or in excess of the ordinary hours of work provided in clause 21 - Ordinary hours of work and rostering will be paid at a rate of time and a half.
23.2 Saturday work
An employee directed by the employer to perform any duty on a Saturday will be paid at a rate of time and a half, with a minimum payment of two hours.
23.3 Sunday work
An employee directed to perform work on a Sunday will be paid at a rate of double time, with a minimum payment of three hours.
23.4 Time off instead
Where agreement is reached between the employer and the employee, the employer may grant time off instead of the payments prescribed above on the basis of one hour off for each hour worked.
[11] CRA seeks to insert additional wording into clauses 23.1, 23.2 and 23.3 along the lines of “of the applicable rate set out in clause 13.1”, “calculated on the Standard Rate” or “calculated on the base rate of pay”.
[12] Business SA, in its amended application, seeks to delete the current clause and replace it with the following:
“23. Overtime and penalties
23.1 Overtime
An employee directed by the employer to perform any duty after 6.00pm Monday to Friday inclusive, or in excess of the ordinary hours of work provided in Clause 21 – Ordinary Hours of Work and Rostering will be paid at a rate of time and half.
Overtime performed on a Saturday will be paid at a rate of time and a half, with a minimum payment of two hours, except where such overtime is continuous with ordinary hours of work.
Overtime performed on a Sunday will be paid at a rate of double time, with a minimum payment of three hours, except where such overtime is continuous with ordinary hours of work.
23.2 Time off instead
Where agreement is reached between the employer and the employee, the employer may grant time off instead of the payments prescribed above on the basis of one hour off for each hour worked.
23.3 - Penalty payments
(a) Saturday work
An employee directed by the employer to perform ordinary hours of work on a Saturday will be paid at a rate of time and a half, with a minimum payment of two hours.
(b) Sunday work
An employee directed by the employer to perform ordinary hours of work on a Sunday will be paid at a rate of double time, with a minimum payment of three hours.”
Clause 24.3
[13] Clause 24.3 of the Award reads:
24.3 Leave loading
(a) During a period of annual leave an employee who does not receive commission must also be paid a loading of 17.5% calculated on the employee’s base rate of pay in s.90(1) of the Act.
(b) Where the employee receives commission, such employee will, in addition to their ordinary pay, receive either the average of the commission payments earned over the preceding 12 months or the loading prescribed in clause 24.3(a), whichever is the greater.
[14] CRA seeks to add the following sub clauses to the current clause:
“(c) Where an Advertising Sales Representative receives commission during a period of annual leave, they must also be paid a loading of 17.5% calculated in the employee’s base rate of pay is s.90(1) of the Act.
(d) Where an Advertising Sales Representative who is ordinarily entitled to commission, but does not receive commission during a period of annual leave, such Advertising Sales Representative will, in addition to their base rate of pay, receive either the average of the commission payments earned over the preceding 12 months or the loading prescribed in clause 24.3(a), whichever is the greater.”
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 Fair Work Act (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 issued a decision 2 (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 Fair Work Australia 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 decision 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] Recent 2012 Modern Award Review decisions have adopted the sentiments that where 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.
[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.”
[22] It is apparent that those seeking a variation to a modern award in the 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.
Background
[23] 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 Workplace Relations Act 1996. 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.
[24] 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.
The History of Making the Award
[25] It is necessary to relate how the Award, which was dealt with in Stage 3 of the Part 10A award modernisation process, came into existence.
[26] In a statement issued by the Australian Industrial Relations Commission in May 2009, the Full Bench stated:
“[231] We have included parts of the wholesale industry in the proposed storage services and wholesale award dealt with earlier. In this part of our statement we deal with commercial travellers. We have decided to make a modern award covering commercial travellers. We publish a draft Commercial Travellers Award 2010.
[232] The draft includes advertising sales representatives but not telephone sales persons. The latter will be covered by the Clerks Modern Award. The coverage of the award will be limited to employers and employees not covered by an industry award. An exemption provision is found in the Commercial Sales (Victoria) Award 199965 but is not a feature of awards and NAPSAs applying outside Victoria. No provision has been made for an exemption rate at this stage.
[233] Once again the question of allowances arises. All of the NAPSAs have different allowance provisions. Mainly we have adopted those from the pre-reform award. Similarly the overtime and weekend work provisions come from that award. Further proposals designed to standardise these and other conditions will be welcomed.” 3
[27] In the Award Modernisation Decision 4 the Full Bench said:
“Commercial Sales Award 2010
[275] There have been few alterations to the exposure draft. We have amended the coverage to make it clear that the award does not cover employers and employees covered by the Clerks Modern Award, the Contract Call Centres Award 2010,75 or the Graphic Arts, Printing and Publishing Award 2010.76 More flexibility was sought by employers in New South Wales in relation to part-time hours of work. The provision upon which we have decided is consistent with the existing regulation of part-time hours in Victoria and Queensland. Although the relevant award in New South Wales has more liberal hours provisions, it also contains a limitation on the number of part-time employees that may be employed.
[276] The Commercial Radio Association sought a provision for the cashing-out of annual leave. This position was supported by the media interests. There is no such provision in the current awards or NAPSAs and we have decided not to provide for it. We note that we have adopted the standard motor vehicle allowance in lieu of the rather complicated formula in the exposure draft. Should this give rise to unforeseen difficulties the issue can be reconsidered at a later stage.”
Application by the NUW to vary Clause 10.4 - Casual Employment
[28] The NUW seeks to amend clause 10.4 by inserting 10.4(c) to provide that “an employer is required to roster a casual employee for a minimum of three consecutive hours on any shift”.
[29] Business SA, the AFEI and the AiG opposed the variation sought by the NUW. CRA does not oppose or consent to the variation. ABI adopted the written submissions of AFEI in respect of its submissions that the NUW has not presented cogent reasons to revisit the issue of minimum engagement for casual employees.
Submissions of the parties
[30] The NUW, in its written submissions, puts it that the variation meets the Modern Awards Objective as follows:
“Section 134(a) of the FW Act
9. The modern award needs to provide for a minimum engagement period of three hours for casual employees so that the modern award meets the modern award objective of providing “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…”
10. Not having a guarantee of minimum hours puts at risk the income and job security of casual workers. Any reduction in the protection associated with the minimum daily engagement worsens the disadvantages faced by casuals. With an increasing number of people experiencing precarious casual work, minimum engagement periods provide some security of income.
- At paragraph 35 of his decision in National Retail Association Limited [2010] FWA 8595 (10 November 2010), Vice President Watson stated:
- Vice President Watson stated at paragraph 40 of his decision in National Retail Association Limited ([2011] FWA 3777 (20 June 2011):
11. Having a minimum engagement period prevents employees being engaged for shorter periods and consequently receiving less pay for each engagement even though their travel costs and other expenses (for example, childcare), may remain the same.
12. This rationale behind the minimum engagement period was identified by Vice President Watson in two different decisions (both of which were upheld by Full Benches of Fair Work Australia on appeal). In the first decision, Vice President Watson rejected the argument that the minimum engagement period for all casual employees of three hours in the General Retail Award 2010 should be reduced for two hours. In the second decision, Vice President Watson held that the minimum engagement for casual employees should be reduced to 90 minutes only in the case of fulltime secondary school students working on a school day where employment for a longer period than 90 minutes was impossible and where they and a parent or guardian had agreed to the minimum engagement not being three hours.
“…I acknowledge the particular impact on some individuals in Victoria. I also acknowledge the strength of arguments that it is desirable to provide youth with employment opportunities. It follows that award provisions which limit opportunities for youth employment should be avoided if possible. However the interests of fairness to employees generally must be considered and balanced against other objectives. For example, a general reduction in the minimum engagement period could mean that many casual employees are engaged for shorter periods and consequently receive less pay for each engagement even though the travel costs of attending work are unchanged.”
“… There is a long history of minimum engagement periods for part time and casual employees providing protection for employees from employer expectations of working short periods where the cost and inconvenience of attending the workplace outweighs the benefits received from the engagement. The minimum engagement period does not preclude shorter periods of work - provided payment for the minimum period is made.”
13. A minimum engagement period of three hours for casual employees would also better protect the position of part-time employees. Under the modern award, part-time employees must receive a minimum payment of 3 hours (clause 10.3(c)). Having the same minimum engagement for casual employees would reduce the risk of employers replacing part-time work with casual shifts; for example a permanent three hour shift may be replaced with three one-hour shifts (especially given that this may avoid the need for the employer to provide an employee with meal breaks under clause 22 of the modern award).
Section 134(b) of the FW Act
14. The NUW submits that having a minimum engagement period of three hours for casuals would not discourage collective bargaining and in fact may promote it. If the minimum engagement period of three hours for casual employees was included in the modern award, employers and employees could negotiate about how it would apply (provided of course that the collective agreement passed the ‘better off overall test’ in section 193 of the FW Act).
Section 134(c) of the FW Act
15. Unless a minimum engagement period of three hours is included, the modern award does not best meet the criterion in section 134(c) of the FW Act “to promote social inclusion through increased workplace participation”– in fact it does the opposite.
16. ABS data shows that employees spend on average 55 minutes commuting each day. Without a minimum engagement period of three hours, employees may spend more time travelling to work than they do at work. For employees that require a certain number of hours a week, a greater number of short shifts can also be a greater disruption to their life - making it more difficult to meet family responsibilities and other commitments, let alone be involved in society.
Section 134(d)-(h)
17. The NUW submits that the criteria in sections 134(d)-(h) of the FW Act do not mean that a three hour minimum engagement period would not meet the modern award [sic] objective. The fact that the three hour minimum engagement for casual employees was not raised as an issue by employers during the award modernisation process and that it was a longstanding condition in the commercial sales industry suggests that it has never caused issues for employers.
Ensuring the modern award is operating effectively, without anomalies or technical problems arising from the Part 10A award modernisation process.
18. The NUW submits that the non-inclusion of a minimum engagement period for casual employees represents an error or anomaly arising from the award modernisation process that needs to be rectified.”
[31] Business SA, in its written submissions, stated:
“2.2 In Stage 3 of the Award Modernisation Process, the National Union of Workers requested a minimum engagement of three hours to be included in the Exposure Draft of the Commercial Sales Award 2010. However, this was unsuccessful with the Full Bench making a Modern Award that did not provide for a minimum engagement for casual employees.
2.3 The application seeks to revisit a matter that has already been determined by the Full Bench, but fails to explain how Clause 10.4 results in the Modern Award operating ineffectively or causes technical problems. Point 18 of NUW’s submission states that the “non-inclusion of a minimum engagement period for casual employees represents an error or anomaly”. However, no further details are provided to show that the Full Bench clearly intended a minimum engagement period to be included or that it was the consensus of the participants in the award modernisation parties for this to be included.
2.4 In its Decision on the relevant legislative context for the Modern Awards Review 2012, 29 June 2012, [2012] FWAFB 5600, the Full Bench stated that “In the context of this Review the Tribunal is unlikely to revisit issues considered as part of the Part 10A award modernisation process unless cogent reasons for doing so, such as a significant change in circumstances which warrants a different outcome”. Business SA fails to see any significant change in circumstances that would warrant a change to Clause 10.4. Further, it is not shown that the matter of minimum engagement for casual employees was overlooked by the Full Bench during the award modernisation process or that the wording of Clause 10.4 is the result of an inadvertent mistake, error or omission.
2.5 The Commercial Sales Award 2010 is not unique in not prescribing a minimum engagement period for casual employees. There are examples of other Modern Awards, such as the Professional Employees Award 2010, Architects Award 2010 and the Surveying Award 2010, where the Full Bench decided to not include a minimum engagement period for casual employees. Business SA does not agree that the non-inclusion of a minimum engagement period for casual employees results in the Modern Award not achieving the modern awards objective per se.
2.6 While previous industrial instruments may have provided for a minimum engagement period for casual employees, there are also examples of the Commercial Sales Award 2010 providing greater entitlements that were contained in some of the previous awards, such as the 25 per cent casual loading, higher base rate of pay and greater proportion of the adult rate for junior employees. Hence, the making of the Modern Award may have resulted in more generous entitlements in some cases and a reduction in other entitlements in other circumstances.
2.7 Overall the application does not provide sufficient grounds to justify departing from the previous Full Bench decision in relation to the Commercial Sales Award 2010.”
[32] AIG, in its written submissions, stated:
2.2. Contrary to the NUW’s position, we submit that the absence of a minimum engagement period for casual employees covered by the Award is not an anomaly or technical problem arising from the award modernisation process, nor is the variation necessary to ensure that the Award is achieving the modern award [sic] objective.
2.3. The issue of minimum engagement periods for casual employees under the Award was raised by the NUW during the Part 10A Award Modernisation Process. In its submission to the Tribunal dated 23 June 2009, the NUW argued in support of a minimum engagement period for casual employees. Despite the NUW’s submissions, the Tribunal decided not to insert a minimum engagement period.
2.4. The NUW has failed to provide any evidence in support of its view that the Award is failing to achieve the modern awards objective because of the absence of a minimum engagement period.
2.5. The modern awards objective is found in s.134 of the Fair Work Act 2009 (FW Act) and is very similar to the objectives in s.576B of Part 10A of the Workplace Relations Act 1996 (Cth) (WR Act) that underpinned the award modernisation process. The Tribunal was required to make modern awards, in accordance to the objectives in s.576B of the WR Act. Therefore, in effect the Tribunal has already decided that the Award meets such objectives without the inclusion of a minimum engagement period.
2.6. In their decision on the Preliminary Issue ([2012] FWAFB 5600) for the Modern Awards Review 2012, the Full Bench said:
“[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.”
2.7. We submit that there are no cogent reasons why the previous Full Bench authority should be departed from.”
[33] AFEI, in its written submissions, stated:
“3. The decision of the Full Bench of FWA in AM2012/08 and Others, [2012] FWAFB 5600, concerning the relevant legislative context and scope of the two yearly modern awards review is relevant to the current application. In that decision the Full Bench stated:
“[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 cogent reasons for departing from the previous Full Bench decision, such as a significant change in circumstances, warranting a different outcome” [Our emphasis]
4. The subject matter of the current application was properly considered by the Australian Industrial Relations Commission (‘AIRC’) during Stage 3 of the Part 10A award modernisation process (AM2009/63) in which the modern award was made.
5. Indeed, the NUW made written submissions to the AIRC in AM2009/63 on 23 June 2009 concerning the exposure draft of the modern award and specifically sought the inclusion of a three-hour casual minimum engagement period. The NUW’s oral submissions to the AIRC concerning the exposure draft included:
“…there have been some slight amendments in respect of minimum shift payments, minimum hours of engagement, payment of wages, the arrangement of the 38 hour week and also the payment for casuals working in excess of 38 hours per week…We think that their reinsertion would create a better safety net for workers in this industry.” (Our emphasis)
6. Despite the above submissions, the modern award, like the exposure draft, does not include a three-hour minimum engagement.
7. The applicant has provided no evidence in support of its proposed variation to suggest the decision of the AIRC not to include a casual minimum engagement period was in error.
8. Indeed, the application made on 8 March 2012 did not specify any grounds in support of the variation sought. The NUW’s subsequent outline of submissions in support of the application submitted on 23 July 2012 included no evidence as to why the variation ought be made.
9. In accordance with the decision of the Full Bench of FWA in [2012] FWAFB 5600, the application ought be rejected on the basis that the issue of casual minimum engagements was properly considered during the Part 10A award modernisation process and no cogent reasons have been proffered by the NUW to warrant a departure from the existing provision.
Applications by Business SA and CRA to vary Clause 23 - Overtime and Penalty Rates
[34] Business SA seeks to amend clause 23, it submits, to clearly differentiate between ordinary hours and overtime.
[35] The NUW opposed the variation sought by Business SA. Business SA amended its application in an attempt to address NUW’s concerns. CRA neither opposed nor supported the application, but submitted that the proposed amendment is not simple to understand and prefers the wording in its application to amend clause 23. ABI supported Business SA’s application.
[36] NUW did not oppose CRA’s application.
Submissions of the parties
[37] In its amended application, Business SA stated:
“Business SA is making this application under item 6, Schedule 5, Part 2 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 and in accordance with the President of Fair Work Australia’s Statement [2011] FWA 7975 on 17 November 2011.
In accordance with item 6(4), Schedule 5, Part 2 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 the application is consistent with the Modern Awards objective in section 134 of the Fair Work Act 2009.In particular, the application focuses on the objective in section 134(g) “to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards”. The application aims to improve clarity, certainty and make the award easier to understand and apply, by removing uncertainty and ambiguity in the matters above.
Business SA understand that the National Union of Workers had some concerns with the proposed variation. The redrafted Clause 23.1 seeks to address these concerns by clearly including a minimum engagement for work undertaken on Saturdays and Sundays.
The reasons for the proposed variations are as follows:
1. Clause 23 of the Commercial Sales Award 2010 addresses overtime and penalties in the same heading. This may potentially cause confusion to employers as to whether a payment relates to ordinary hours of work performed or overtime worked. To reduce uncertainty and ambiguity it is proposed that the overtime and penalty provisions in this Clause are more clearly separated by addressing the Saturday and Sunday penalties under a new subclause 23 –Penalty payments.
Further, to clarify that the payments for work on Saturday and Sunday relate to ordinary hours and not overtime worked on these days, it its proposed that a reference to ordinary hours be inserted in the Saturday and Sunday penalty clauses.”
[38] Business SA stated in its written submissions:
“3.2.1 Clause 23 currently covers the circumstances in which overtime rates are payable and penalties for working ordinary hours on Saturdays and Sundays. However, the current structure of clause 23 leaves room for further differentiating between overtime payments and penalties and the different circumstances in which work attracts overtime rates versus penalty payments.
3.2.2Subclause 23.1 states that overtime is payable where work is performed after 6.00pm Monday-Friday or in excess of the ordinary hours in clause 21. The lack of specific references to Saturdays and Sundays in subclause 23.1, but the references to “any duty on a Saturday” in subclause 23.2 and “directed to perform work on a Sunday”, suggests that the payments in 23.2 and 23.3 are payable for ordinary hours as well and overtime performed on these days. This is because “any duty” and “work performed on a Sunday” does not differentiate whether the work or duty relates to ordinary hours or overtime.
3.2.3 However, the current structure and wording of clause 23 has the potential of causing uncertainty as to the relevant payments for work performed. For example, given that there is no specific reference to overtime in either subclause 23.2 or 23.3, this could create the incorrect impression that overtime is exclusively dealt with in subclause 23.1 and the overtime payment therefore is time and half regardless of which day of the week overtime is performed. Hence, an employer may mistakenly provide time and half for overtime on a Sunday rather than double time.
3.2.4 To clarify the application of overtime and penalties in clause 23, Business SA proposes that clause 23 be replaced with a new clause 23. Under Business SA’s proposal, subclause 23.1 would be varied to incorporate the overtime payment for Sundays of double time. This would clarify that the payment for overtime performed Monday to Saturday is time and half, whereas the payment for overtime on a Sunday is double time. This would also result in subclause 23.1 dealing with all instances of overtime, rather than addressing the overtime payment in three separate subclauses.
3.2.5 The current subclause 23.4 would become subclause “23.2 - Time off instead”. Given that time of lieu relates to the overtime provisions in subclause 23.1, it seems logical and clearer to address time of lieu immediately after overtime.
3.2.6 Further, under the proposed clause 23 a new subclause “23.3 – Penalty payments” would be inserted covering the Saturday penalty as a subclause (a) and Sunday as a subclause (b). Specific references to “ordinary hours” would also be included under 23.3(a) and (b) to further clarify that these payments relate to ordinary hours only. In the event that overtime was performed on a Saturday or a Sunday, the overtime payment would be addressed by subclause 23.1.
3.2.7 The proposed variations would result in clause 23.1 covering all instances of overtime and new subclause 23.3 covering the penalty payment for performing ordinary hours on a Saturday and Sunday.”
[39] The NUW opposed the variation and stated the following in their written submissions:
“12. The NUW opposes BSA’s application to vary clause 23 (overtime and penalty rates).
13. The NUW submits that clause 23 in the modern award provides sufficient clarity as to the applicable overtime and penalty rates for employees covered by the modern award.
14. The use of the words “any work” and “directed to perform work” in clauses 23.2 and 23.3 are simple in their construction and easy to understand. The NUW says that the conditions in clause 23.2 apply to any work performed on a Saturday and the conditions in clause 23.3 apply to any worked performed on a Sunday.
15. The NUW is concerned that BSA’s proposed variation has the effect that under the terms of the modern award:
a. Employees will no longer receive a minimum payment of 2 hours for working overtime on Saturdays.
b. Employees will no longer be paid at double time rates for working overtime on Sundays.
c. Employees will no longer receive a minimum payment of 3 hours for working overtime on Sundays.
16. The NUW submits this is a nonsensical outcome because it is irrelevant whether employees are performing ordinary or overtime work as they are still performing the work during anti-social hours.
17. The outcome would also be inconsistent with what was provided for in the majority of pre-reform awards and Notional Agreements Preserving State Awards that the modern award replaced.
18. The variation sought by BSA is neither consistent with (nor necessary to achieve) the modern award [sic] objective to ensure “a fair and relevant minimum safety net of terms and conditions”; nor is it necessary to ensure that award operates effectively.”
[40] CRA stated in its written submissions:
“1. CRA has no objection to the overall concept of the separation of overtime and penalties in clause 23 of the Award. However, CRA's involvement with the Award relates to "Advertising Sales Representatives" (as defined in the Award) who are unlikely to be required to work overtime "...continuous with ordinary hours of work" early on a Saturday morning. As a result, CRA neither supports nor opposes the Application.
2. In the event that the Tribunal is minded to accept the Application, CRA submits that use of the following words in the proposed subclause 23.1 "...except where such overtime is continuous with ordinary hours of work" are neither simple, nor easy to understand.
3. Additionally, in the event that the Tribunal is minded to accept the Application, CRA submits:
a. that each of the references in the proposed subclause 23.1 to payment "...at a rate of [time and a half/double time]" should be followed by the words "of the applicable rate set out in clause 13". CRA relies upon its submissions dated 19 July 2012 (see paragraphs 19 to 24) in support of this submission; and
b. that each of the references in the proposed subclauses 23.3(a) and 23.2(b) to payment "...at a rate of [time and a half/double time]" should be followed by the words "of the applicable rate set out in clause 13". CRA relies upon its submissions dated 19 July 2012 (see paragraphs 19 to 24) in support of this submission.”
[41] ABI submitted the following:
“2.8 ABI submits that the variation sought by Business SA will not change the operation of overtime and penalty payments.
2.9 It is apparent that the variations sought are designed to change the structure of the provisions so that they are easier to read and understand.”
Application by CRA to vary Clause 24 - Leave Loading
[42] CRA made an application to amend how leave loading is calculated under clause 24.3. The NUW opposed the variation.
Submissions of the parties
[43] In its application, CRA stated:
“9.1 CRA submits that the proposed variations to clause 24.3 of the Award will provide a consistent, transparent and fair entitlement for annual leave loading for "Advertising Sales Representatives". In particular, the variations will ensure that in circumstances where an "Advertising Sales Representative", who is otherwise entitled to receive commission, does not in fact receive commission during a period of annual leave, they will receive annual leave loading calculated at the higher rate ie their average commission payments over the past 12 months.
9.2 CRA further submits that the proposed variations to clause 24.3 of the Award will promote flexible modern work practices, particularly those where Advertising Sales Representatives are remunerated by way of the minimum Award wage plus commissions, and the efficient and productive performance of work.19 Clause 24.3 of the Award, in its current form, has the effect of penalising employers in the Commercial Radio Industry who employ "Advertising Sales Representatives" by requiring the employers to pay annual leave loading of amounts significantly above those payable to other Award-covered Australian employees in other industries. It is for these reasons that CRA submits that it is appropriate for an "Advertising Sales Representative" specific annual leave loading clause to be inserted at clause 24.3 of the Award.”
[44] The NUW stated in its submissions:
“4. The NUW opposes the application of CRA to vary clause 24.3 (leave loading).
5. There were two objectives behind the introduction of annual leave loading: firstly, to compensate employees for extra payments they would normally receive if they were not on annual leave; and secondly, to help employees meet additional holiday-related expenses.
6. Annual leave loading of 17.5% has been recognised as not sufficient to meet the first objective in some situations; for example, industrial instruments generally provide that shift workers are entitled to their usual shift allowance instead of the loading if it is greater.
7. The annual leave loading provision in the modern award must be retained in its current form to ensure that Advertising Sales Representatives are compensated for the loss of commission payments that they would have earned (regardless of whether they are paid immediately or later) during their period of annual leave.
8. The only way that an Advertising Sales Representative could receive their usual amount of commission when they are on annual leave is if commission on their sales is not paid immediately. However, this just means that the negative impact of taking annual l eave would be felt later on – when Advertising Sales Representative are not receiving the commission they would have earned during the period in which they took annual leave.
9. CRA acknowledges that its concerns arise out of “the specific payment terms of applicable commission schemes”. CRA can then deal with these concerns by amending these schemes; it is not appropriate to amend the modern award.
10. The variation sought is neither consistent with (nor necessary to achieve) the modern award [sic] objective to ensure “a fair and relevant minimum safety net of terms and conditions”; nor is it necessary to ensure that the award operates effectively.”
SHOULD THE VARIATIONS BE MADE?
Clause 10.4 - Casual employment
[45] The issue of whether to include a minimum engagement period for casual employees has been previously dealt with by Fair Work Australia.
[46] As noted in paragraph [20] of this decision, where the subject matter of the 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 the previous Full Bench decision.
[47] Submissions were made by the NUW in respect of this question during the Part 10A process. The NUW submitted that clause 10.3(c) should be varied as follows:
“an employee shall be entitled to a minimum payment as for three consecutive hours’ work on a Thursday, a Friday or a Saturday; and as for four consecutive hours’ work on any other day per week.”
The Full Bench did not specifically refer to this submission when it decided not to include it. The Award was subsequently made without the inclusion of a minimum engagement period for casuals.
[48] I am not satisfied that failing to include a minimum engagement period for casual employees amounts to an error or anomaly, nor am I satisfied that the NUW has demonstrated any cogent reasons for varying the Award to include it. The NUW has not led any evidence that would support the variation that it seeks.
[49] In the 2012 Review, Fair Work Australia must consider whether the Award achieves the modern awards objective. If the Award fails to do so in any respect, then Fair Work Australia must consider whether the proposed variation would make the Award such that it does achieve that objective.
[50] In my view the NUW has not established that the Award, with the omission of a minimum engagement period for casual employees, fails to achieve the modern awards objective, or that the inclusion of the clause will achieve, or better achieve, that objective.
[51] I am not satisfied that the variation to clause 10.4 of the Award sought by the NUW should be made.
Clause 23 - Overtime and Penalty rates
[52] It was submitted by both Business SA and CRA that clause 23 of the Award should be varied to reduce the possibility of confusion and ensure the Award operates effectively and is simple and easy to understand in accordance with the modern awards objective.
[53] In my view such a variation will remove a potential source of confusion by making it clear that the rate to be used for the calculation of overtime and penalty rates is the rate set out in clause 13.1. This is an appropriate technical change which should assist in the application of the Award.
[54] I prefer the terms of the variation sought by CRA, as I believe it clearly outlines the requirements regarding the payment of overtime and penalties without altering the effect of the Award.
[55] Clause 23.2 and 23.3 make it clear that all work performed on Saturday or Sunday is paid at time and a half and double time respectively. Therefore I am not attracted to Business SA’s proposed wording.
[56] However, for consistency, and to avoid doubt I propose to vary the sub clauses so that “perform any duty” in clauses 23.1 and 23.2 and “perform work” in clause 23.3 will each read “perform any work”.
[57] In the event that my proposed wording may have unintended consequences the parties may within seven days of the publication of these reasons, file and serve written submissions in relation only to this matter.
[58] Should I not receive any written submissions, I will issue a determination in the terms sought by CRA with the modifications I have foreshadowed in [56].
Clause 24.3 Leave loading
[59] I accept NUW’s submission in opposing CRA’s proposed variation suggested by the NUW. CRA’s concerns in relation to payments under commission schemes should be dealt with by amending those schemes rather than by varying the Award.
[60] The CRA proposal could potentially disadvantage employees who, whilst receiving commission during their annual leave, cannot earn further commission during that time.
[61] CRA’s application has not met the tests for variation as part of this Review.
[62] In the circumstances, it has not been established that the variation sought by CRA is necessary or appropriate to give effect to the modern awards objective.
SENIOR DEPUTY PRESIDENT
Appearances:
Ms E. Barrett appeared for the NUW.
Ms S. Haynes, Australian Business Lawyers & Advisors, solicitors for ABI.
Mr S. Burke, Middletons, solicitors for CRA.
Ms G. Vaccaro appeared for AiG.
Mr H Wallgren appeared for Business SA
Mr S. Forster appeared for AFEI.
Hearing details:
2012
Melbourne
June 25 and August 27
1 MA000083.
2 [2012] FWAFB 5600.
3 [2009] AIRCFB 450
4 [2009] AIRCFB 826
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