NSW Farmers' (Industrial) Association
[2010] FWA 4576
•21 JULY 2010
[2010] FWA 4576 |
|
DECISION |
Fair Work Act 2009
s.158 - Application to vary or revoke a modern award
NSW Farmers' (Industrial) Association
(AM2010/47)
Agricultural industry | |
COMMISSIONER LEWIN | MELBOURNE, 21 JULY 2010 |
[1] This decision concerns an application by the New South Wales Farmers’ (Industrial) Association (NSWFIA) to vary the Pastoral Industry Award 2010 (the modern award). The application was lodged in Fair Work Australia on 8 April 2010.
[2] The NSWFIA seek to vary the modern award in relation to the minimum engagement of part-time and casual employees, “keep” arrangements in accordance with the definition of “keep” in clause 3.1 and in relation to vehicle allowance provisions for Shearing Operations employees.
[3] Directions were posted on the Fair Work Australia Award Modernisation website and interested parties were notified of these directions. The applicant was directed to file full written Submissions in support of the application by the close of business on Friday 7 May 2010. Other interested parties were directed to file full written Submissions by Friday 14 May 2010.
[4] Pursuant to the Directions posted on the Award Modernisation website, On 21 April 2010, Business SA filed Submissions in support of the NSWFIA’s proposed reduction to the minimum engagement for part-time and casual employees. On 6 May 2010, the National Farmers’ Federation filed full written Submissions in support of the application. On 13 May 2010 the Australian Workers’ Union (the AWU) filed Submissions in opposition to the application.
[5] Upon receipt of the submissions of all parties, I sought the views of the NSWFIA and the AWU as to whether the parties wished that the Tribunal conduct a Hearing or whether the matter ought to be determined on the papers. The AWU did not express a preference. The NSWFIA held the view that a Hearing would be the most expeditious way to determine the matter.
[6] On 16 June 2010, the application was listed for Hearing on 21 June 2010 at Sydney. On 21 June, Ms Denita Wawn appeared on behalf of the NSWFIA and the National Farmers’ Federation (the NFF). No other parties appeared at the Hearing.
The application and variations sought
[7] Firstly, the application seeks to vary clauses 10.3(e) and 10.4(f) of the modern award which are set out below:
“10.3(e): An employer is required to roster a part-time employee for a minimum of three consecutive hours on any shift.
10.4(f): On each occasion a casual employee, other than a casual pieceworker, is required to attend for work, casual employees are entitled to a minimum payment of three hours’ work at the appropriate rate.”
[8] The application seeks to vary these clauses by changing the minimum engagements in the abovementioned clauses from three hours to two hours.
[9] Secondly, the application seeks to insert a new sub-clause to be numbered clause 28.3 the modern award as follows:
“28.3 - With Keep Rate
If keep is provided then the minimum wage will be the rates prescribed above less $107.77 per week.”
[10] The proposed “With Keep” rate of pay provides a minimum wage for Farm and Livestock Hands with a deduction of $107.77 per week from the normal weekly minimum wage when a farm and livestock hand is employed on a ‘with keep’ basis in accordance with the definition of “keep” in clause 3.1 of the modern award.
[11] Finally, the application seeks to vary the application of clauses 43.6(b) and 47.1(a) of the modern Award which are set out below:
“46.3(b) Vehicle allowance—all employees
Where an employee, by prior arrangement and agreement with an employer, uses the employee’s own motor vehicle to travel to and from the shed the employee will be paid a vehicle allowance of $0.74 per kilometre for travel by the most direct practicable route between the shed and the employee’s normal place of residence.
47.1(a) An employee will be reimbursed all fares, or be compensated for motor vehicle expenses at a rate of $0.74 per kilometre, to travel the most direct route to and from the shed at the commencement and conclusion of a period of engagement at a shed from the closest of:
(i) the employee’s place of residence;
(ii) the employee’s previous place of work; or
(iii) the place of engagement.
[12] The application seeks to vary the application of the abovementioned clauses by inserting a new transitional arrangement for payment of the vehicle allowances in the abovementioned clauses of the modern award in accordance with the model transitional provisions applicable to modern awards, generally, so that the obligation to make the payment prescribed would be phased in over 5 years.
Jurisdiction
[13] The AWU objected to the application for the variations on the basis that Fair Work Australia does not have the jurisdiction to grant the applications as the NFF do not address the requirements of ss.134 or 157 of the Act in that they have not demonstrated that the variation is required to provide a fair and relevant minimum safety net of terms and conditions of employment. Sections 134 and 157 of the Act are set out below:
“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.
When does the modern awards objective apply?
(2) The modern awards objective applies to the performance or exercise of FWA’s modern award powers, which are:
(a) FWA’s functions or powers under this Part; and
(b) FWA’s functions or powers under Part 2-6, so far as they relate to modern award minimum wages.
Note: FWA must also take into account the objects of this Act and any other applicable provisions. For example, if FWA is setting, varying or revoking modern award minimum wages, the minimum wages objective also applies (see section 284).
157 FWA may vary etc. modern awards if necessary to achieve modern awards objective
(1) FWA may:
(a) make a determination varying a modern award, otherwise than to vary modern award minimum wages; or
(b) make a modern award; or
(c) make a determination revoking a modern award;
if FWA is satisfied that making the determination or modern award outside the system of 4 yearly reviews of modern awards is necessary to achieve the modern awards objective.
Note 1: FWA must be constituted by a Full Bench to make a modern award (see subsection 616(1)).
Note 2: Special criteria apply to changing coverage of modern awards or revoking modern awards (see sections 163 and 164).
Note 3: If FWA is setting modern award minimum wages, the minimum wages objective also applies (see section 284).
(2) FWA may make a determination varying modern award minimum wages if FWA is satisfied that:
(a) the variation of modern award minimum wages is justified by work value reasons; and
(b) making the determination outside the system of annual wage reviews and the system of 4 yearly reviews of modern awards is necessary to achieve the modern awards objective.
Note: As FWA is varying modern award minimum wages, the minimum wages objective also applies (see section 284).
(3) FWA may make a determination or modern award under this section:
(a) on its own initiative; or
(b) on application under section 158.”
Approach to the Application
[14] In my view, the issues raised in the Submission of the AWU in relation to the operation of the abovementioned provisions are not properly characterised as jurisdictional in nature. However, while I am satisfied that jurisdiction exists to deal with the application I accept that consideration of the application and the exercise of any power to vary the modern award must conform to the mandatory statutory requirements above.
[15] In the case of National Retail Association Ltd and Others 1, Vice President Watson dealt with this subject as follows:
“[15] The legislative scheme provides that variations to awards are not generally available outside the scheduled reviews of awards. In the intervening period an applicant must satisfy FWA that a proposed variation “is necessary to achieve the modern awards objective.” Limited other opportunities for variations also exist to remove an ambiguity or uncertainty or to correct an error. The test in s 157(1) is the test the applicants need to meet. In my view this legislative test displaces general merit considerations in an application of this type.
[16] The SDA submitted that the test in s 157 is a significant hurdle the applicants are required to overcome and that variations to awards outside the scheduled reviews of awards will be the exception. The SDA also drew my attention to the explanatory memorandum accompanying the Fair Work Bill which indicates that award variations outside the four yearly reviews will be permitted in “exceptional circumstances.” The SDA submitted that the requirement of being necessary to achieve the modern awards objective means something “indispensible or requisite” and that the applicants must establish that the modern awards objective cannot be achieved unless the variation is made. The other parties did not contest the thrust of these submissions. In my view the submissions reflect the legislative requirements. I adopt that general approach.”
[16] I respectfully agree with the Vice President and will follow the approach set out above.
Minimum Engagement
[17] I will first address the variation sought to the minimum engagement for part-time and casual employees prescribed by the modern award. The NFF seeks to reduce the minimum engagement of part-time and casual employees from three hours to two hours. Whilst NSWFIA did not call or table any evidence in support of the proposed variation, reliance was placed on the circumstances of the dairy industry and particular reference was made to casual employees engaged to carry out milking operations.
[18] It was submitted that milking operations could be carried out in less than three hours and that the modern award provisions are therefore excessive and impose on inappropriate cost upon employers in the dairy industry when engaging casual employees. It was suggested that while it was probably the case that casual employees engaged to milk cows would be engaged twice a day it was suggested consideration should be given to instances of single engagements in a day for one milking. I have proceeded on the assumption that what has been put in relation to casual employees is equally relied upon insofar as the application seeks a reduction in the minimum engagement provisions applicable to part-time employees.
[19] The AWU’s Submissions stated that the provisions of the modern award in relation to minimum engagements reflect the draft award submitted by the National Farmers’ Federation during the award modernisation process and were contained in the exposure draft issued by Fair Work Australia during that process. No submissions contrary to the current provisions being put by the NFF or any other party between the publication of the exposure draft and the making of the modern award.
[20] Moreover, the AWU submitted that consideration should be given to the likely circumstances in which an employee would be engaged on a casual basis for a milking(s) which would involve travel to and from the place of work at the employee’s expense and in their own time for limited recompense.
[21] The lack of evidence in relation to the circumstances of the employers and employees affected by the minimum engagement provisions of the award makes me reluctant to cause a variation to the relevant terms of the modern award. It is to be noted that the variation sought would have effect across the whole of the modern award’s coverage. Only certain circumstances in the dairy industry have been relied upon. Moreover, the particularity of the engagement of casual and part-time employees for milking operations is not subject to any evidence of a factual nature. I am not able to fully discern the extent of such engagements, the incidence of those engagements or to understand the likely effect on employees undertaking such engagements in the particular circumstances of the dairy industry and more broadly across the diverse range of coverage of the modern award.
[22] Notwithstanding this lack of evidence I consider that in dealing with such an application it may be necessary to distinguish between different types of employment arrangements applicable to employees employed under the terms of the modern award and in particular those engaged on milking operations. Where employees are engaged on a part-time basis, for instance, to perform two milkings every day, seven days a week, these circumstances would seem to require comparative consideration as against irregular casual engagements which might be for a single milking in a day or on a few days a week with no expectation of ongoing employment of a substantive nature. Depending upon the facts revealed by a proper evidentiary enquiry other considerations may well be relevant.
[23] I am also influenced by the history of the award modernisation process as outlined by the AWU’s submissions which are not substantially contested.
[24] There would also likely be a very broad issue as to the desirability of different minimum engagement provisions applying to different areas of the pastoral industry and different operational aspects of the Award’s coverage in various industry sectors to consider.
[25] On what is before me, I am unable to be satisfied that the variations sought are necessary to achieve the modern awards objective. In my judgment to be so satisfied a more substantial and thorough enquiry and evidentiary basis would be necessary to reach a judgment that a variation to the minimum engagement provisions is necessary to give effect to the modern awards objective. Moreover, on what is before me, if it were the case that such necessity were to be made out, the appropriate variation would be confined to milking engagements of casual and possibly part-time employees in the dairy industry and the specific variation, if any, would have to take account of all the relevant facts affecting employers and employees involved in such different engagements and meet the relevant factual circumstances accordingly. The Tribunal would have to accept that the general nature of the minimum engagement provisions should give way to provisions tailored to the facts of particular operations in the Pastoral Industry such as the milking of cows. It would certainly be the case that the types and number of operations undertaken by employees across the coverage of the award would be very significant. The case, as made out, is insufficient in this respect also.
[26] In the alternative to the variation sought NSWFIA suggest that a variation to a level below the minimum standards prescribed by the modern award could be agreed to by employees. In my view, the comments and conclusions set out above apply equally to this suggestion.
[27] For all these reasons I have decided not to grant the application or the proposed alternative.
Keep Rate
[28] I note that no party including the AWU filed a submission contesting the merit of the NSWFIA’s submissions in relation to the inclusion of a “with keep” rate of pay in the relevant part of the modern award.
[29] In my view, a “with keep” rate of pay should be included in the modern award. It is clear from the inclusion of a “with keep” definition in clause 3.1 of the modern award that a corresponding “with keep” rate of pay was erroneously omitted from the Award. On what is before me I consider that the omission or non inclusion of a “keep rate” was an oversight and for the relevant statutory purposes an error which should be corrected by Fair Work Australia. The inclusion of the provision as sought by the NSWFIA is necessary to achieve the modern awards objective by ensuring the internal coherence of the scheme of minimum rates of pay to apply under the relevant part of the modern award’s operation in the industry. An order will issue accordingly.
Vehicle allowance
[30] I now consider the final issue, being the application to insert a new transitional arrangement in the modern award which would apply to the vehicle allowances prescribed in respect of shearing operations. The substantive argument in support of the NFF’s application to apply a transitional period for the introduction of the allowance of 74 cents per kilometre prescribed by clauses 46.3(b) and 47.1(a) of the modern award arises from decisions of the predecessor Tribunal to Fair Work Australia, indicating that there was an element of an allowance of this kind within the travelling allowance prescribed by clause 25.1.2 of the Pastoral Industry Award 1998, which continues to be reflected in the modern award. Those decisions were made some considerable time ago. More importantly, the component which could be characterised accordingly within the award provisions applicable was never identified, much less quantified, by the Tribunal which made those decisions. It is impossible, therefore, to specifically identify this hypothetical component in the modern award on what is before me.
[31] In particular, the NSWFIA submits by reference to decisions of Commissioner Merriman of 5 February 1991 2 and the Australian Industrial Relations Commission Full Bench of 20 October 20043 that there exists an historical recognition that the costs which the vehicle allowance prescribed by clauses 46.3(b) and 47.1(a) are designed to compensate for were also elsewhere provided by the Pastoral Industry Award 1998, which formed the substantial basis upon which the modern award was made. However, these references are general in nature and were not specified in a manner which would allow the identification of each competing component of compensation now said to be in issue. It was left to the parties to deal further with this matter by the Tribunal at the time of those decisions, which did not happen.
[32] Accepting, for the sake of this decision and hypothetically, that some such dual component exists, it seems to me that to vary the award to reflect this by establishing transitional provisions, which are based on somewhat more general considerations relating to the award modernisation process is a clumsy and speculative response. While the NFF proposes a five year transitional period it is also envisaged that the subject would be revisited at the time of the 2012 award review provided for by s.156 of the Act, which would add further uncertainty and a somewhat provisional aspect to the outcome of the present application.
[33] It seems to me that if the NSWFIA contends that there is “double dipping” involved in the current award provisions, which is in the form of an identifiable amount of payment to employees in shearing teams for the use of a vehicle, other than the vehicle allowances subject to the application, then the correct approach is to identify what component of the terms of the award prescribes accordingly, the historical basis of the calculation thereof and to seek to vary the relevant award terms to accurately dispose of any “double dipping”. The present application seems to be based on the proposition that an inherently erroneous amount of vehicle allowance should be subject to the modern award’s transitional provisions because it is not possible to identify and specify the extent of the error which warrants the transitional arrangement. I am also mindful that extensive submissions were filed by employer organisations concerning the transitional provisions of the modern Pastoral Award and were dealt with by the Full Bench in its decision of 2 September 2009 4.
[34] I am not persuaded to adopt the course suggested by the NSWFA. In my view, in light of the Full Bench decision that uniform vehicle allowances in modern awards generally should not be specified as subject to model transitional arrangements, any problem 5 concerning such allowances would need to be well made out and addressed more precisely on review in order to satisfy the applicable statutory provisions. I am not satisfied that there has been an error as contemplated by the statutory provisions or that it is necessary or appropriate to vary the transitional provisions applicable under the Act, as proposed, in order to achieve the modern awards objective. The vehicle allowances are appropriate as a reimbursement of expenses at a uniform rate derived from the award modernisation process. If there is an additional provision and amount of vehicle allowance discretely contained or disguised elsewhere in the modern award, which is superfluous to such reimbursement, it should be identified on application, as would seem to be within the NSWFIA’s contemplation for the time of the 2012 review as mentioned above. If that course of action is in contemplation it is open to the NSWFIA to mount such an application in the meantime, without the need for such a delay. On what is before me, the variation proposed is not necessary or appropriate to meet the modern awards objective and is therefore declined.
COMMISSIONER
Appearances:
Ms D Wawn, National Farmers’ Federation
Hearing details:
Sydney
21 June
2010
1 [2010] FWA 5068
2 P143 Dec 092/91 M Print J6666.
3 ODN C No.395 of 1958, PR 952585.
4 [2009]AIRCFB 800 paragraphs [105] - [112].
5 [2009]AIRCFB 800 paragraph [46].
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