Registered and Licensed Clubs Award 2010 Hospitality Industry (General) Award 2010
[2019] FWCFB 349
•21 MARCH 2019
| [2019] FWCFB 349 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
Registered and Licensed Clubs Award 2010
Hospitality Industry (General) Award 2010
(AM2017/39)
VICE PRESIDENT HATCHER | SYDNEY, 21 MARCH 2019 |
Application by Clubs Australia - Industrial
Introduction
[1] Clubs Australia - Industrial (CAI), a registered organisation, has applied for the modern award which currently applies to its members, the Registered and Licensed Clubs Award 2010 (Clubs Award), to be revoked, and for the Hospitality Industry (General) Award 2010 (Hospitality Award) to be varied to expand its coverage to encompass that of the Clubs Award and to accommodate some particular features of the Clubs Award. The genesis of CAI’s current application lies in an earlier application made by CAI as part of the 4 yearly review of modern awards for a reduction in weekend and public holiday penalty rates in the Clubs Award. The reductions sought were, for full-time and part-time employees, from 150% to 125% on Saturdays, 175% to 150% on Sundays, and 250% to 200% on public holidays and, for casual employees, from 175% to 150% on Sundays and 250% to 200% on public holidays (inclusive of the casual loading). This application, together with other applications seeking reductions to weekend and public holiday penalty rates in other awards, was determined in the Penalty Rates Decision issued by a five-member Full Bench of the Commission on 23 February 2017. 1 The Full Bench rejected CAI’s claim, concluding:
“[994] On the material presently before us we are not satisfied that the variations proposed are necessary to ensure that the modern award sought to be varied achieves the modern awards objective. In short, CAI has not established a merit case sufficient to warrant the granting of the claim.”
[2] However the Full Bench went on to say:
“[995] If these were simply inter partes proceedings we would dismiss the CAI claim. But the claim has been made in the context of the Review and s.156 imposes an obligation on the Commission to review each modern award. There is also, at least on face value, a disconnect between the present provisions in the Clubs Award and those that will apply within the hospitality industry more broadly.
[996] We have given consideration to the next steps to be taken in respect of the review of weekend penalty rates in the Clubs Award. It seems to us that there are 2 options in respect of the future conduct of this aspect of these proceedings.
[997] Option 1: We could make determinations revoking the Clubs Award and varying the coverage of the Hospitality Award so that it covers the class of employers and employees presently covered by the Clubs Award. Any such determinations would have to comply with the statutory provisions relating to changing the coverage of modern awards and to the revocation of modern awards (ss.163 and 164 respectively). Such a course would obviously avoid the need to conduct any further Review proceedings in respect of the Clubs Award.
[998] Extending the coverage of the Hospitality Award and revoking the Clubs Award would also have the desirable outcome of rationalising the awards applying to the hospitality sector and providing greater consistency in the regulation of penalty rates in the sector. We would also observe that the ‘merger’ of the Hospitality and Clubs Awards is consistent with the ‘need to ensure a simple, easy to understand… modern award system’, which is one of the considerations we are required to make into account in determining whether a modern award meets the modern awards objective’ (s.134(1)(g) of the FW Act).
[999] Option 2: CAI and any other interested party could be provided with a further opportunity to advance a properly based merit case in support of any changes they propose in respect of weekend penalty rates.
[1000] It is our provisional view that option 1 has merit and warrants further consideration…”
[3] In paragraphs [1001]-[1008] of the decision the Full Bench set out a number of matters which it regarded as supportive of the provisional view it had expressed. The two primary matters identified were the degree of commonality in the work performed by employees under the two awards and the desirability of greater consistency between penalty rates in the hospitality sector. It will be necessary for us to discuss these matters in greater detail later in this decision having regard to the evidence adduced before us. The Full Bench then indicated that it would give interested parties the opportunity to make submissions concerning the two options it had identified.
[4] In the Penalty Rates Decision the Full Bench separately determined to vary the Hospitality Award to reduce the Sunday penalty rate from 175% to 150% and the public holiday penalty rate from 250% to 225% for full-time and part-time employees only. In brief summary, the Full Bench’s decision in respect of the Sunday penalty rate was based on findings that the level of disutility for employees under the award working Sundays was much less than it had been in the past (while still being higher than for Saturdays for many workers) 2 and that the current level of penalty rates led employers to reduce labour costs by restricting trading hours, staff numbers and service provision on Sundays.3 This led to the ultimate conclusion that the Sunday penalty rate was neither fair nor relevant and thus did not meet the modern awards objective. The Full Bench also identified that a reduction in the Sunday penalty rate would promote flexible modern work practices because it would facilitate employers extending operating hours and providing additional services on Sundays,4 and it would also lead to some additional employment.5 The Full Bench took into account and gave significant weight to the effect a reduction in the penalty rate would have upon the incomes of employees who usually worked on Sundays, but found that this would partly be ameliorated by the capacity to work additional hours on Sundays and would also be relevant to the consideration of transitional arrangements for the implementation of any such reduction.6
[5] In determining that a reduction in the public holiday penalty was necessary to achieve the modern awards objective, the Full Bench took into account the need to maintain proportionality with the reduced Sunday penalty rate, 7 the advent of s 114 of the Fair Work Act 2009 (FW Act) which somewhat alleviated the disutility in working on public holidays,8 and that the reduction would increase employment and have a number of positive effects on business.9
[6] It may be noted that while paragraph [998] of the Penalty Rates Decision, which we have earlier quoted, described “greater consistency” in penalty rates in the broader hospitality sector as a “desirable outcome”, the Full Bench did not attempt to achieve uniformity of penalty rates in the awards in that sector (in particular the Hospitality Award, the Restaurant Industry Award 2010 and the Fast Food Industry Award 2010), nor did it regard competition between employers covered by different awards in the sector as a matter supporting either uniformity or greater consistency in penalty rates.
[7] In a subsequent decision issued on 5 June 2017 (Penalty Rates - Transitional Arrangements Decision), 10 the Full Bench determined that this reduction to the Sunday penalty rate in the Hospitality Award would be phased in over a period of two years so that it would not be implemented fully until 1 July 2019.11 In the same decision, the Full Bench referred to the conclusions it had reached in relation to the Clubs Award in the Penalty Rates Decision, and emphasised the provisional nature of its preference for the option of revoking the Clubs Award and absorbing its coverage into the Hospitality Award. The Full Bench said (footnotes omitted):
“[233] At [1000] of the Penalty Rates decision we expressed the provisional view that option 1 had merit and warranted further consideration. We provided an opportunity for interested parties to express a view as to the future conduct of this aspect to these proceedings and, in particular, invited submissions on the two options set out above.
[234] In correspondence dated 2 May 2017 Clubs Australia (Industrial) indicated a preference for option 1. Whereas in its submission RSL Victoria opposes option 1 and states that it does not intend to ‘agitate any further arguments in support of changes to penalty rates the subject of the Clubs Australia (Industrial) application’.
[235] United Voice submits that Clubs Australia (Industrial) should not be permitted to relitigate its failed claim for variations to weekend penalty rates but acknowledges that option 1 raises ‘quite a different issue’.
[236] The provisional views expressed in the Penalty Rates decision were just that and we sought further submissions before making any decision on that aspect. In the circumstances the appropriate way forward is for Clubs Australia (Industrial) (or any other interested party) to file an application setting out the course of action it proposes. That application will be allocated to a Full Bench and it will be a matter for that Full Bench, after providing the interested parties with an opportunity to be heard, to determine the future conduct of the matter.”
[8] In response to this, CAI filed its application on 28 July 2017. That application has been the subject of a number of amendments during the course of the proceedings. This decision is ultimately concerned with the final amended application which was filed by CAI on 26 September 2018. We will describe the main features of the final amended application in due course, but it will first be necessary to set out the relevant history and principal features of the Clubs Award and the Hospitality Award.
The Clubs Award and the Hospitality Award
[9] The relevant history concerning the establishment of the Clubs Award in the course of the award modernisation process conducted by a Full Bench of the Australian Industrial Relations Commission (AIRC) in 2008-2009 was usefully summarised in paragraphs [910]-[914] of the Penalty Rates Decision. In summary, the award modernisation Full Bench initially expressed the provisional view that the entire hospitality industry could be covered by one award that incorporated coverage of the licensed and registered clubs sector “with or without some special conditions and/or appropriate transitional provisions”, 12 and on 12 September 2008 the AIRC published an exposure draft of a single award covering the hospitality industry. That exposure draft relevantly provided in clause 31.1 for penalty rates for permanent employees of time and a quarter on Saturdays and time and three quarters on Sundays.
[10] This course of establishing a single modern hospitality award which encompassed the clubs sector was strongly opposed by CAI (then named in its rules as the Licensed Clubs’ Association of Australia but using the name “Clubs Australia”) from the outset of the award modernisation process. In a submission filed in the AIRC in June 2008, CAI contended:
“It is the view of the Clubs Australia that an Award should be made as part of this process, to encompass all registered and licensed Clubs nationally. That is to say that it is our position that a national Club industry Award should be made, that is separate and distinct from any other rationalised hospitality industry Award that may be made as part of this process.
We submit that any such rationalised industrial instrument having application to all Clubs nationally should have application to all employees employed by Clubs. This includes all employees employed in the hospitality operations of Clubs as well as greenkeepers and gardening staff, maintenance staff, clerical and administrative employees. The Club Industry would be concerned if occupational awards such as greenkeepers and clerks would cover those occupations within the club industry.
. . .
We make this submission and have reached this position, as we believe that the Club industry in Australia is a separate and distinct industry from most other industries in the hospitality sector. We make this submission based upon the following reasons:
• Clubs are not-for-profit organisations
• Clubs are community based and community run organisations
• Clubs are established on the basis of interest mutuality
• Clubs are subject to separate and distinct regulations and regulatory framework
• They are required to adopt a set of rules (a constitution) subject to the provisions of the applicable regulatory framework.
• They are subject to control by members and only members and bona-fide visitors can avail themselves of the facilities;
• They do not pay a dividend to their members so any excess funds are channeled back into the community;
• Each club is committed to maximizing local support and offering affordable social opportunities in a fun, safe and friendly environment in order to raise funds in furtherance of their community objectives.
• Employees of Clubs provide a service to their members which goes beyond the service provided in a commercial establishment.
• In many Regional Areas employees of Community Clubs are multi-skilled in that they perform work across a range of functions such as Clerical, greenkeeping and counter service.
• Clubs offer a variety of sports, activities and entertainment for its patrons and members that are not normally offered and other hospitality venues.
It is submitted that based on the above facts, there are good and cogent reasons for the Club Industry to be considered as an industry in its own right and to be dealt with separately in the award modernisation process.
Clubs Australia is confident that it will be able to negotiate successfully with the appropriate Unions to develop an industrial instrument that will be rationalised, modernised and simplified that will have application nationally and hopefully be able to provide benefits for all parties concerned.”
[11] In a further submission filed on 1 August 2008, CAI continued to emphasise that the clubs industry was a “separate and distinct industry from the hospitality industry” and that while clubs did provide hospitality services, “the scope of the [clubs] industry extends beyond the provision of such services”. In this respect CAI submitted:
“In continuing and reiterating our previous submissions, Clubs are groups of people sharing a common interest, who combine to provide facilities to promote and pursue that interest. Clubs provide popular venues for socialising, inexpensive forms of entertainment, sports and activities and are major economic contributors to local communities, particularly in regional Australia.
It is the Clubs that provide for continual funding to the affiliated sporting teams to provide and maintain the necessary facilities and equipment to allow them to play; the Clubs provide facilities and equipment and fund the surf clubs to continue to provide a public service of safety on the beaches; Clubs provide many services to the elderly and returned services personnel, including aged care homes and other facilities. These are just examples of the community funding that Clubs provide throughout Australia.
The types of Clubs that form the Club industry in Australia are as diverse as the size and employment numbers. They include:
• Sporting (all codes of football, yachting and sailing, cricket, golf, bowls, racing)
• Services (RSL, church, union, political etc)
• Cultural (Italian, Croatian, etc)
• Regional (District Clubs etc)
• Recreational (surf clubs)
• Social (bridge club)”
[12] CAI went on to identify nine reasons why the clubs industry was separate and distinct from the hospitality industry:
“1. Clubs are not-for-profit organisations – unlike enterprises in the hospitality sector clubs are not run as profit based enterprises. It is for these reasons that most Clubs operate differently and are run differently to other enterprises in the hospitality sector.
2. In many Regional Areas employees of Community Clubs are multi-skilled in that they perform work across a range of functions such as Clerical, greenkeeping and counter service – In many Clubs, clerical and greenkeeping staff also perform work in the hospitality operations of the Club. This is not a situation that is likely to occur in other establishments in the hospitality sector.
3. Clubs offer a variety of sports, activities and entertainment for its patrons and members that are not normally offered at other hospitality venues – other establishments within the hospitality sector do not offer the same level of activities and entertainment. In that respect there are many tasks and positions not normally found in other enterprises and establishments in the hospitality sector.
4. Clubs are community based and community run organisations – this is not the case in other industries in the hospitality sector. They do not pay a dividend based upon profits made and excess funds are channeled back into the community. Additionally, there exists the concept and role of stewardship whereby staff and management recognise that the Club's resources belong to the whole club and must be used and preserved for the benefit of its members
5. Clubs are established on the basis of interest mutuality – no other industry or enterprise in the hospitality sector is established on this basis. It is for this reason that volunteers are often found working alongside full-time, part-time and casual employees. This is particularly the case in small and medium sized Clubs.
6. Clubs are subject to separate and distinct regulations and regulatory framework – this regulatory framework requires different staffing arrangements to those in other industries in the hospitality sector
7. Clubs are required to adopt a set of rules (a constitution) subject to the provisions of the applicable regulatory framework. Such regulatory framework means that the Clubs are subject to control by members and only members and bona-fide visitors can avail themselves of the facilities;
8. Each club is committed to maximizing local support and offering affordable social opportunities in a fun, safe and friendly environment in order to raise funds in furtherance of their community objectives.
9. Employees of Clubs provide a service to their members which goes beyond the service provided in a commercial establishment.”
[13] CAI’s submission also pointed to a number of differences in the trading operations of the clubs as compared to other hospitality venues, including that labour costs were a higher proportion of total expenses than for pubs, bars and taverns; the main source of revenue for clubs was gambling; clubs offered a greater diversity of services which required a greater degree of multi-skilling on the part of employees; clubs were not public establishments but rather, with some exceptions, provided service to members and their guests; and club managers had traditionally been represented by the Club Managers’ Association, Australia (CMAA) and were subject to detailed award regulation.
[14] CAI’s position was supported by the Liquor, Hospitality and Miscellaneous Union (LHMU), as United Voice was then known. In a submission also filed on 1 August 2008, the LHMU said:
“The LHMU has been in discussion in recent weeks with union and employer interests in the Hospitality Industry (including Clubs). There is still strong support for the separation of licensed clubs from the general Hospitality industry. The LHMU has therefore submitted a draft Clubs Award and has modified the proposed Hospitality Industry Modern Award (HIMA) to exclude clubs.”
[15] In a submission also filed on 1 August 2008, the Australian Hospitality Association (AHA) also supported the creation of a Clubs Award separate from the Hospitality Award which it envisaged would cover pubs, taverns, casinos and accommodation. The CMAA took the same position in a submission filed on 31 July 2008. No interested party supported the position of the licensed and registered clubs sector being encompassed in a single hospitality award.
[16] Subsequently, on 6 March 2009, the LHMU filed a further submission in which it stated that it and the CMAA had held a number of meetings with CAI, and that substantial agreement had been reached on the terms of a new award to cover the licensed and registered clubs sector. A copy of the proposed draft award was attached to the submission. On the same day CAI filed a further submission which confirmed that a draft award for the clubs sector had been negotiated and (but for a small number of identified items) had been agreed. CAI noted: “In essence all parties agreed for the need for the [Registered and Licensed Clubs Industry Award] and feel the attached document reflects the uniqueness of the registered and licensed clubs industry”. The draft contained, as an agreed term, a penalty rates provision under which full-time and part-time employees were to receive penalty rates of 150% for work on Saturdays, 175% on Sundays and 250% on public holidays. That is, CAI’s preference for a club industry-specific award caused it to agree to a 150% penalty on Saturdays rather than being covered by a wider hospitality industry award with a penalty rate of 125% as had been proposed in the 12 September 2008 exposure draft.
[17] The award modernisation Full Bench acceded to the approach urged upon it by the parties. In a decision issued on 22 May 2009, 13 the Full Bench said:
“[100] The question of award coverage for licensed and registered clubs first arose in the priority stage of award modernisation. We deferred a final conclusion, noting that it might be possible to include the sector in the Hospitality Modern Award and the potential overlap in relation to events staged by clubs and grounds management and maintenance.
[101] There is general support amongst employer and employee associations in the industry for a separate licensed and registered clubs modern award. While it might be possible to include clubs within the Hospitality Modern Award, with some sector specific arrangements, we have decided to make a separate clubs award. We publish a draft Registered and Licensed Clubs Award 2010. The LHMU and CAI provided a draft award, in a largely agreed form, and we have used this as the basis of the exposure draft.”
[18] After the small number of non-agreed matters were resolved, the Clubs Award in its final form was published on 4 September 2009 and took effect from 1 January 2010. It contained the weekend penalty rates that had been agreed to by CAI and the LHMU in their earlier draft award. The Hospitality Award was developed separately after the award modernisation Full Bench’s decision of 22 May 2009 and likewise took effect on 1 January 2010. As will be demonstrated, there are significant similarities between the two awards, but from the outset the Hospitality Award contained a lower penalty rate of 125% for work on Saturdays performed by full-time and part-time employees.
[19] Clause 4.1 of the Clubs Award provides that it covers employers of employees engaged in “the performance of all or any work in or in connection with or for clubs registered or recognised under State, Territory or Commonwealth legislation and their employees in the classifications within Schedule C – Classifications, to the exclusion of any other modern award”. The term “club” is defined in clause 3 as follows:
“club means any club which is registered and licensed under the provisions of relevant State or Commonwealth Statutes (Liquor and/or Gaming Acts, Associations’ Incorporation Acts or Corporations Acts) and which is established and operates on a not-for-profit basis for the benefit of members and the community”
[20] Clause 4.2 provides, “to avoid doubt”, that it covers the work of bar attendants and stewards employed in a club situated on a football ground, cricket ground or sports ground and persons engaged as greenkeepers, ground attendants, gardeners, propagators, lawn mower and motor roller drivers and general labourers in the construction and maintenance of bowling greens and golf courses. Clause 4.2 also specifies some categories of employees who are not covered by the Clubs Award, and clause 4.3 provides that the award does not apply to employees of employers covered by four other specified modern awards, one of which is the Hospitality Award.
[21] Clause 4.1 of the Hospitality Award provides that it covers employers in the “hospitality industry” and their employees in the classification in Schedule D – Classification Definitions of the Award to the exclusion of any other award, subject to the exclusion of employers in a number of identified “industries”, one of which is “clubs registered or recognised under State or Territory legislation” and another of which is “restaurants covered by the Fast Food Industry Award 2010, the Registered and Licensed Clubs Award 2010 or the Restaurant Industry Award 2010”. Clause 4.2 defines the expression “hospitality industry” as follows:
“4.2 For the purpose of clause 4.1, hospitality industry includes hotels; motor inns and motels; boarding establishments; condominiums and establishments of a like nature; health or recreational farms; private hotels, guest houses, serviced apartments; caravan parks; ski lodges; holiday flats or units, ranches or farms; hostels, or any other type of residential or tourist accommodation; wine saloons, wine bars or taverns; liquor booths; resorts; caterers; restaurants operated in or in connection with premises owned or operated by employers otherwise covered by this award; casinos; and function areas and convention or like facilities operating in association with the aforementioned.”
[22] Clause 17.2 of the Clubs Award provides for minimum rates of pay for employees in 14 classification levels – an “Introductory” level and Levels 1-13. Levels 1-6 contain subsidiary classifications for food and beverage attendants/supervisors, guest service attendants, kitchen attendants, child care workers, clerks, cooks, doorpersons/timekeepers/security officers, front office staff, leisure attendants, maintenance and horticultural employees, storepersons, forklift drivers, handypersons, and club managers at clubs with a gross annual revenue of less than $500,000. The rates for the Introductory Level and Levels 1-6 are expressed as weekly and hourly amounts. Levels 7-13 constitute a system of classifications for managers, and the rates are expressed not just as weekly and hourly amounts but also as annual salaries where they are applicable. Clause 17.3(a)(i) provides that a range of provisions in the award, including the provisions concerning ordinary hours of work, overtime and penalty rates (except for public holidays), do not apply to an employee in a managerial classification who is paid 20% in excess of the prescribed salary, and clause 17.3(a)(ii) provides that a range of additional provisions do not apply where a manager is paid 50% more than the prescribed salary. In addition, clause 17.3(b) provides that a number of award provisions do not apply to maintenance and horticultural employees in Levels 1-4 where they agree to a salary not less than 33% in excess of the prescribed weekly rate. Schedule C provides the definitions for each of these classifications and sub-classifications.
[23] Clause 20.1 of the Hospitality Award provides for an Introductory Level classification, and also Levels 1-6 which contain the same sub-classifications as the Clubs Award except that that they do not contain child care workers, refer to gardeners instead of maintenance and horticultural employees and do not include club managers at clubs with a gross annual revenue of less than $500,000. The rates of pay (expressed as weekly and hourly rates) for the Introductory Level and Levels 1-6 are the same as those for the corresponding classifications in the Clubs Award. However the Hospitality Award does not contain the managerial classifications in Levels 7-13 of the Clubs Award. Instead, clause 20.2 simply provides for a single minimum salary for “Managerial staff (Hotels)” which is lower than that for the lowest of the managerial classifications in the Clubs Award. Additionally the Hospitality Award contains a further feature not found in the Clubs Award, namely a separate classification stream for casino gaming employees in clause 20.3. The classification definitions are contained in Schedule D, and the Introductory Level and the sub-classifications for Levels 1-6 are defined in a way which is the same as, or highly similar to, those for the corresponding classifications in Schedule C of the Clubs Award.
[24] Bothawards provide for a 38 hour week, which may be worked in a number of specified ways. With one exception, these are the same in both awards (see clause 26.3 of the Clubs Award and clause 29.1(a) of the Hospitality Award). There are differences in the awards as to the number of hours which may be worked in each day before the payment of overtime penalty rates. Both awards provide that ordinary hours may be worked on any day of the week, except that clause 26.6 of the Clubs Award provides, in respect of maintenance and horticultural employees, that ordinary hours must be worked Monday-Friday and on Saturday mornings only. Both awards provide for penalty rates for ordinary hours worked on weekends and public holidays but, as earlier explained, there was a reduction to Sunday and public holiday penalty rates for full-time and part-time employees under the Hospitality Award as a result of the Penalty Rates Decision. The following table sets out the comparative position:
Saturday | Sunday | Public Holiday | |
% | % | % | |
Clubs Award | |||
Full-time and part-time | 150 | 175 | 250 |
Casual (inclusive of 25% casual loading) | 150 | 175 | 250 |
Maintenance and horticultural employees | 150 for first 2 hours, then 200 | 200 | 250 |
Hospitality Award – pre Penalty Rates decision | |||
Full-time and part-time | 125 | 175 | 250 |
Casual (inclusive of 25% casual loading) | 150 | 175 | 250 |
Hospitality Award – from 1 July 2019 | |||
Full-time and part-time | 125 | 150 | 225 |
Casual (inclusive of 25% casual loading) | 150 | 175 | 250 |
[25] It may be seen that the Saturday penalty rates for full-time and part-time employees under the Clubs Award have always been higher than under the Hospitality Award, and as a result of the Penalty Rates Decision the Sunday and public holiday penalty rates for full-time and part-time employees under the Clubs Award are now also higher than under the Hospitality Award.
[26] The other provisions of the two awards are highly similar. Both awards have the same model of flexible part-time employment provisions as a result of the Casual and Part-time Employment Decision of 5 July 2017. 14 The main difference is that the Clubs Award contains a number of provisions specifically applicable to managerial classifications that do not appear in the Hospitality Award, such as provisions concerning meal allowances (clause 18.1(a)(ii)), recall to duty (clause 27), professional development leave (clause 33) and accommodation (clause 35).
CAI’s claim
[27] As earlier stated, CAI’s application went through a number of iterations. In its original form, it proposed that the Hospitality Award be varied to include a large range of clubs-specific provisions derived from the Clubs Award in conjunction with the expansion of its coverage to encompass the clubs sector. However the final version of its application filed on 26 September 2018 significantly reduced the number of provisions from the Clubs Award proposed to be incorporated into the Hospitality Award upon the Clubs Award’s revocation. The main variations it proposed for the Hospitality Award were as follows:
(1) The coverage provision in clause 4.1 would be varied so that the award covers not only the “hospitality industry” but also “all or any work in or in connection with or for a club”, and the definition of “club” in clause 3 of the Clubs Award would be added to clause 3 of the Hospitality Award. In addition, the current clause 4.2 of the Clubs Award, to which we have earlier made reference, would be incorporated as clause 4.2 of the varied Hospitality Award. The current coverage exclusions in clause 4 of the Hospitality Award for clubs registered or recognised under State or Territory legislation and for restaurants covered by the Clubs Award would be removed.
(2) The classification structure in clause 20.1 would be varied so that:
• the sub-classification of “Child care worker (clubs)” is added to the same levels in the classifications structure as is currently the case in the Clubs Award;
• references to the sub-classification of “Gardener” are replaced with “Maintenance and horticultural employee”;
• in Level 5, the sub-classification of “Food and beverage supervisor” is re-named as “Food and beverage and gaming attendant grade 5” (in line with the current Clubs Award);
• the sub-classification of “Club manager of a club with a gross annual revenue of less than $500,000” is added to Level 6; and
• new Levels 7-13 have been added to incorporate the classification stream for club managers currently contained in the Clubs Award.
(3) Definitions taken from the Clubs Award in relation to the proposed modifications to the classification would be added to clause 3 and Schedule C in line with the current Clubs Award.
(4) The provisions concerning casual fitness instructors, junior employees and management trainees currently contained in clause 17 of the Clubs Award would be incorporated as clubs-specific provisions in clause 20 of the Hospitality Award.
(5) Specific beneficial entitlements in the Clubs Award applicable to bingo callers (minimum engagement of three hours), maintenance and horticultural employees (may not be required to perform indoor duties; reimbursement for supply of tools; training allowance; span of hours) and club managers (meal entitlements; expenses; accrued rostered days off; recall to duty; accommodation; professional development leave; uniform reimbursement) would be placed in the Hospitality Award.
(6) The salaries provisions from the Clubs Award applicable to club managers and maintenance and horticultural employees would be placed in clause 27.4 of the Hospitality Award.
(7) The superannuation funds applicable to the clubs industry would be added to the list of funds in clause 28.4 of the Hospitality Award to which an employer may contribute.
(8) The provisions for the pattern of working ordinary hours currently contained in the Clubs Award would be placed in clause 29.1(b) of the Hospitality Award as a clubs only provision (with the existing provision being applicable to the hospitality industry).
(9) The meal and crib break provisions currently in the Clubs Award would be placed in clauses 31.6-31.12 of the Hospitality Award as clubs-only provisions.
(10) The penalty rates provisions in clause 32.1 would be altered so that full-time and part-time clubs employees (other than maintenance and horticultural employees) would phase from their current Saturday and Sunday penalties under the Clubs Award to those currently in the Hospitality Award as follows:
| Saturdays | Sundays | |
| % | % | |
| 1 July 2019 | 145 | 170 |
| 1 July 2020 | 135 | 160 |
| 1 July 2021 | 125 | 150 |
(11) The current penalty rates provisions for maintenance and horticultural employees in the Clubs Award would be placed in clause 32.1 of the Hospitality Award.
(12) The definition of a shiftworker currently contained in the Clubs Award would be placed in clause 34.1 of the Hospitality Award as a clubs-only provision.
(13) Clause 37.1(b)(i), which entitles a full-time employee to an extra day’s pay, an alternative day off or an additional day’s leave when their rostered day off falls on a public holiday, would be deleted.
[28] As an alternative position intended to minimise the extent of clubs-specific provisions in the Hospitality Award, CAI proposed that the provisions concerning junior rates, hours of employment and meal breaks for club employees could cease effect from 1 January 2020.
[29] Under CAI’s application, the Clubs Award would be revoked simultaneously with the variations it proposed to the Hospitality Award taking effect.
[30] CAI’s application was opposed by United Voice, the Australian Workers’ Union (AWU), the CMAA, the Professional Golfers Association of Australia (PGA), the Australian Golf Course Superintendents’ Association (AGCSA), the RSL and Services Club Association Queensland Inc. (RSLAQ), the Federation of Community, Sporting and Workers Clubs (FCSWC), and the 141 individual clubs set out in the Schedule to this decision. The AHA took a neutral position at the level of general principle, but opposed specific aspects of CAI’s application and submitted that if the Hospitality Award was varied to extend its coverage to the clubs industry, then clubs-specific provisions should be contained in a club-specific schedule to the award. We also note that, although it did not appear in the proceedings before us, RSL Victoria lodged a submission on 24 March 2017 opposing the revocation of the Clubs Award. RSL clubs in Victoria appear to constitute sub-branches of RSL Victoria.
CAI’s case in support of the application
[31] CAI advanced its application to vary the Hospitality Award and revoke the Clubs Award on the following bases:
(1) The application made by CAI was contemplated by the Full Bench in the Penalty Rates Decision, and the issue of penalty rates for clubs employees was not determined to finality in that decision notwithstanding that the CAI had failed to establish a merits case for any reduction in penalty rates.
(2) The Full Bench in the Penalty Rates Decision expressed concern over the appropriateness of a separate Clubs Award in circumstances where there was a high degree of commonality in work performed under the Clubs Award and the Hospitality Award. This was supported by a similar conclusion expressed in the Casual and Part-Time Employment Decision. 15
(3) The Clubs Award did not meet the modern awards objective in s 134(1) in circumstances where the work of employees in the club industry and employees covered by the Hospitality Award was the same (or very similar), but the Clubs Award required the payment of higher penalty rates for work on weekends and public holidays than did the Hospitality Award. Employees in the club industry shared the same or very similar profile as employees in the hospitality industry such that the disutility for work on weekends and public holidays was the same, and thus differential penalty rates could not be justified.
(4) The operation of the Clubs Award in terms similar to the terms of the Hospitality Award (other than in respect of penalty rates) detracts from the operation of an award system that avoids unnecessary overlap of modern awards and is intended to be simple and easy to understand (s 134(1)(g)).
(5) The Commission has previously considered whether a proposed variation to ensure consistency across awards will make the safety net simpler and easier to understand, and held in Re Four Yearly Review - Annual Leave Decision 16 that it would have those effects.
(6) Once the Hospitality Award was varied to set minimum terms and conditions for employees in the clubs industry, the Clubs Award would become obsolete for the purposes of s 164(a) and the Hospitality Award would be an appropriate award to cover clubs employees for the purposes of s 164(b).
(7) The evidence in the proceedings demonstrated that there were the following features of commonality between the clubs industry and the hospitality industry:
• both industries have participants who supply food services in restaurants, clubs and bars;
• both industries have participants who supply beverage (and related food) services in clubs and bars;
• both industries have participants who provide live entertainment services;
• both industries have some (larger) participants who supply accommodation services;
• both industries have participants who are regulated by licencing legislation, including liquor licencing and gaming licencing;
• both industries have participants who trade similar hours, including significant weekend trading and public holiday trading;
• both industries have a similar split of male and female employees;
• both industries have a similar split of full-time and part-time hours;
• both industries have a similar age profile of employees;
• both industries employ persons in similar roles and performing similar duties (as demonstrated by the similarity in classifications in the Clubs Award and the Hospitality Award);
• both industries currently have the same award rates of pay for employees classified at the Introductory Level or Levels 1-6;
• in some clubs, food and beverage services have been outsourced to hospitality groups whose employees are covered by the Hospitality Award; and
• in some States and Territories (such as the ACT), both industries were historically regulated by a common award.
(8) While the application does not involve a comparison of the competitive features or costs structures of the clubs industry and the hospitality industry from an economic perspective, it recognised that in general terms the club industry is in its service offerings involved in a level of competition with the hospitality industry but faces a labour cost for working weekends and public holidays for which there is no logical basis.
(9) The merger of the Clubs Award and the Hospitality Award would not result in a modern award that was complex or unwieldy or difficult to use.
(10) The reversal of its position on the need for a separate Clubs Award was justifiable because:
• at the time of the award modernisation process the clubs industry had a traditional high incidence of part-time employment and the hospitality industry had a low incidence, but this disparity was unlikely to continue in the light of the variation to the part-time employment provisions in the Hospitality Award;
• the service offerings of the club industry were now largely assimilated with the service offering of the hospitality industry; and
• the Full Bench in the Penalty Rates Decision had itself identified the need to examine the appropriateness of maintaining a separate award for the clubs industry.
(11) The effect on employees of the reduction in weekend penalty rates which would result from the grant of CAI’s application would be minimised by the transitional arrangements which it proposed (which were consistent with those introduced in the Hospitality Award following the Penalty Rates Decision), and by the fact that the reductions would operate at the same time as increases in the minimum award rates of pay pursuant to annual wage reviews.
(12) In considering the matters required to be taken into account under s 134(1), the Commission should find (using the paragraph designations in the subsection):
(a) the reduction in weekend and public holiday penalty rates would have an adverse impact on relative living standards and the needs of the low paid, especially those clubs employees in lower classifications who work on weekends and public holidays, but this would be legitimately addressed by the proposed transitional arrangements;
(b) the need to encourage collective bargaining would on one view be unaffected by a reduction in penalty rates, although on another view this may encourage collective bargaining particularly if unions want employers to maintain the current level of penalty rates;
(c) in relation to the need to promote inclusion through increased workforce participation, it was likely that additional employment would occur as a result of a decrease in penalty rates on weekends and public holidays, although this may be difficult to quantify and the increase in employment may only be modest;
(d) the need to promote flexible work practices and the efficient and productive performance of work would be unaffected by a reduction in penalty rates was a neutral consideration;
(da) the need to provide additional remuneration for working on weekends would not be adversely impacted by a reduction in penalty rates and was a neutral consideration, because there was no greater disutility working on weekends in the clubs industry than the hospitality industry given the similarity in the workforce gender and age profile in the two industries, because work on weekends and public holidays was a feature of the clubs industry, and because employees in the clubs industry would continue to receive additional remuneration for working on weekends and public holidays;
(e) the principle of equal remuneration for work of equal or comparable value weighed in favour of the application since it would equalise weekend and public holidays remuneration for food, bar, gaming and leisure attendants in the hospitality and clubs industries;
(f) the likely impact on business was a consideration in favour of the reduction in weekend and public holiday penalty rates as employment costs will axiomatically or self-evidently fall;
(g) the need for a simple and easy to understand, modern award system was a neutral consideration insofar as it related to a reduction in weekend and public holiday penalty rates; and
(h) the likely impact on employment growth, inflation and the sustainability, performance and competitiveness of the national economy was, in the light of the absence of material addressing the issue, a neutral consideration.
Cases against CAI’s application
United Voice
[32] United Voice contended that:
• CAI’s application to simultaneously amend the Hospitality Award and revoke the Clubs Award could not be successful under the framework of the FW Act because the Commission could not be satisfied that the former award should or could be varied to cover employees currently covered by the latter award;
• the statutory framework required that, in order for the Commission to grant CAI’s application, it had to be satisfied that the variations to the Hospitality Award were necessary to meet the modern awards objective and that the Hospitality Award, as varied, was appropriate for the employees formerly covered by the Clubs Award;
• it was significant that s 164(b), which concerned one of the circumstances in which the Commission was permitted to revoke a modern award, was concerned with the interests of employees only, and the test of appropriateness in s 164(b) established a “high bar” which should be approached on the basis that no employee should be left worse off;
• the sole purpose of CAI’s application to abolish the Clubs Award was to obtain cuts to weekend and public holiday penalty rates for the permanent workers under the Clubs Award;
• the proposition that clubs and hospitality businesses were “the same” was not established on the evidence, and indeed CAI had not adduced any evidence about the nature of work at clubs or hospitality venues;
• the assertion that clubs were at a competitive disadvantage compared to hospitality venues did not bear scrutiny, since the evidence did not support it and, in fact, clubs in the majority of states and the largest states enjoyed a significant advantage over hospitality venues because of the regulatory framework applying to electronic gaming machines;
• CAI did not attribute any degree of competition to penalty rates, nor did it draw any connection between a reduction in penalty rates payable to a small proportion of the workforce and a more competitive market for clubs, so that complaints about “unfair competition” had no merit or credibility;
• CAI’s application was made without regard for the harm that cutting weekend penalty rates would cause to employees employed on a permanent basis, or to the detrimental effect of the removal of other provisions of the Clubs Award;
• evidence of permanent clubs employees who worked on weekends and public holidays demonstrated that they would suffer significant financial effects and a lower standard of living if the proposed penalty rates reductions proceeded, with no opportunity to make up their loss through working additional hours;
• clubs employees required to regularly work on weekends and public holidays suffer significant social disutility as a result and often only work weekends because the penalty rates assist with their need to make a living;
• the losses to affected employees would not be ameliorated by the proposed transitional arrangements or by any future wage adjustments arising from annual wage reviews;
• the scale of employer opposition to CAI’s application could not rationally be reconciled with the claim that clubs were suffering from unfair competition due to penalty rates, and raised questions concerning the adequacy of CAI’s consultation with its membership and whether the application should properly be understood as something that clubs actually want;
• the real reason for the commercial concerns of clubs related to revenue from electronic gaming machines (EGMs), and in this respect clubs enjoyed a significant regulatory advantage;
• in relation to the s 134(1) considerations, paragraphs (a), (da) and (g) weighed against CAI’s application, paragraphs (b), (c), (d), (e), (f) and (h) were neutral considerations, and none weighed in favour of the application; and
• coverage of clubs employees by the Hospitality Award would not be appropriate as required by s 164(b) because it would render at least permanent employees working weekends and public holidays who are not maintenance and horticultural employees worse off, and would leave widely disparate groups of employees under a single award; and
• such coverage was also not appropriate having regard to the history of the Clubs Award, which it could be inferred was considered by the AIRC award modernisation Full Bench to be the appropriate award to cover clubs employees.
Australian Workers’ Union
[33] The AWU, whose coverage of clubs employees included maintenance and horticultural employees working on bowling greens and golf courses, and all clubs employees in Queensland except south-east Queensland, submitted:
• the purpose of CAI’s application was to achieve its desire to secure cuts to the penalty rates payable to permanent employees working on Saturdays, Sundays and public holidays;
• CAI’s case did not engage with the relevant legislative requirements, but focused merely on potential similarities between the clubs industry and the hospitality industry, which was an insufficient basis for a proposal of the significance which it advanced;
• the frequency of CAI’s amendments to its claim showed that it was merely seeking the path of least resistance to its goal of reducing weekend and public holiday penalty rates;
• it was necessary that the modern awards objective be met for both the claimed variations to the Hospitality Award and the revocation of the Clubs Award;
• CAI had not demonstrated that the Clubs Award was not currently meeting the modern awards objective or that its revocation was required to achieve the modern awards objective, nor had it demonstrated this with respect to the proposed variations to the Hospitality Award;
• in respect of the s 134(1) matters, paragraphs (a), (b), (da) and (g) weighed against the grant of CAI’s claim, and the other matters were neutral;
• the bulk of CAI’s evidentiary case was largely irrelevant to the modern awards objective, including its primary proposition concerning commonality of work between the clubs industry and the hospitality industry;
• CAI had offered no analysis to demonstrate any correlation between the reduction in penalty rates and the proposition that a significant proportion of clubs were suffering financial distress;
• likewise CAI did not demonstrate how the Commission exercising its modern award powers to reduce penalty rates was a necessary action to take in response to alleged competition between clubs and other hospitality venues;
• CAI’s application also sought reductions in other conditions of employment for clubs employees, including additional payment for broken shifts and higher duties, and to junior rates, but its case did not address the merit of any of these changes;
• CAI had conveniently abandoned its long-held belief that the clubs industry was unique in order to pursue cuts to penalty rates; and
• CAI had not consulted with member clubs in making its application and there was evidence of a lack of support for its application amongst clubs.
Club Managers’ Association Australia
[34] The CMAA generally adopted the submission of United Voice, and further submitted that the differences between the clubs industry and the wider hospitality sector identified in CAI’s submissions to the award modernisation Full Bench which led to the establishment of the separate Clubs Award had not materially changed, and accordingly there was no proper basis for the revocation of the Clubs Award. The Clubs Award was not obsolete and had operated effectively since it took effect. The CMAA also submitted that the Clubs Award contained a career path for club managers that was aligned with the attainment of specified nationally recognised qualifications, was integrated with an entitlement to professional development leave, and had been developed over a long period of time, and that “cherry picking Managers’ conditions in the Clubs Award and randomly plonking them in the Hospitality Award” defeated the objective of a holistic career progression for all levels of clubs employees.
Professional Golfers Association of Australia
[35] The PGA, which is the peak body for golf professionals in Australia, submitted that golf professionals did not work in the hospitality industry but rather the majority of them were employed by not-for-profit community-based organisations whose central activity was to provide recreational facilities for people with common interests. Its survey evidence demonstrated that 55% of employed golf professionals were covered by the Clubs Award (with 44% covered by the Amusement, Events and Recreation Award 2010). A significant proportion of golf professionals’ income was, it submitted, derived from weekend and public holiday penalty rates, with the result that golf professionals under the Clubs Award would suffer a substantial reduction in their incomes. To the extent that golf clubs provided restaurant, bistro or bar facilities, this was to cater for golfers and not the general public, was not part of the clubs’ core function, and often ran at a loss. The PGA submitted that to the extent that clubs found themselves in financial distress (which included about half of the golf clubs in NSW), this was the result of poor governance and business models rather than pay rates and, in any event, the number of clubs in distress was falling.
Australian Golf Course Superintendents’ Association
[36] The AGCSA, which is the peak body for “sportsturf professionals” and encompasses maintenance staff, agronomists and horticulture staff at golf course, sportsfields and grounds and bowling clubs, submitted that it was opposed to CAI’s application to revoke the Clubs Award because it would reduce the conditions of employment of maintenance and horticultural employees. It submitted that CAI’s application would have a detrimental impact on low paid employees and did not have wide industry support.
RSL and Services Club Association Queensland Inc.
[37] The RSLAQ, which represented 65 registered and licensed RSL and services clubs in Queensland, a number of which are among the largest clubs in the State, opposed CAI’s application based on a motion passed at its quarterly meeting in June 2017 and since endorsed by unanimous feedback from members and subsequent meetings and through email communications. It submitted that nothing had occurred since 2009 that would warrant a departure from the long-held view of the clubs industry that it was a distinct industry sector requiring separate award coverage, and that in proceeding with its application CAI had engaged in little consultation with the industry. It submitted that the Clubs Award had served the industry well since it was made, there was no broad industry support for its revocation, and the incorporation of provisions drawn from the Clubs Award into the Hospitality Award would make the Hospitality Award complex, difficult to interpret and might result in costly mistakes for employers. The proposed reduction in penalty rates, the RSLAQ submitted, would not benefit clubs; rather, it submitted, the current level of penalty rates provided a level of competitiveness over other hospitality sectors which made it easier to attract quality staff. The RSLAQ also expressed the concern that if the Clubs Award was revoked and clubs placed under the Hospitality Award, clubs would cease to be “masters of their own destiny” and the terms and conditions of employment in the clubs industry might be influenced and impacted by other hospitality industry bodies.
Federation of Community, Sporting and Workers Clubs
[38] According to its website, the FCSWC has 50 member clubs in New South Wales. 17 Its submission simply stated that it did not support the CAI application, supported the continued operation of the Clubs Award including its current penalty rates, considered its members’ staff to be highly valued by members, management, boards and local communities, and did not wish to see staff face a pay cut from a reduction in weekend and public holiday penalty rates.
Individual clubs
[39] The 141 individual clubs generally lodged submissions in a standard form that was in the same terms as the FCSWC’s submission. We note that some of these clubs are members of RSLAQ, the FCSWC and/or CAI.
Statutory framework
[40] CAI’s application was made in the context of the current 4 yearly review of modern awards undertaken pursuant to s 156 of the FW Act. Section 156 was repealed by the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act 2018 effective retrospectively from 1 January 2018, but clause 26 of Schedule 1 to the FW Act (which was added by the amending Act) requires the Commission to continue to apply s 156 to the current review as if it had not been repealed. Section 156(2) of the FW Act identified the task to be undertaken in a 4 yearly review as follows:
What has to be done in a 4 yearly review?
(2) In a 4 yearly review of modern awards, the FWC:
(a) must review all modern awards; and
(b) may make:
(i) one or more determinations varying modern awards; and
(ii) one or more modern awards; and
(iii) one or more determinations revoking modern awards; and
(c) must not review, or make a determination to vary, a default fund term of a modern award.
[41] However the conduct of the 4 yearly review is subject to s 138, which provides:
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.
[42] The modern awards objective to which s 138 refers is set out in s 134(1) as follows:
What is the modern awards objective?
(1) The FWC 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
(da) the need to provide additional remuneration for:
(i) employees working overtime; or
(ii) employees working unsocial, irregular or unpredictable hours; or
(iii) employees working on weekends or public holidays; or
(iv) employees working shifts; 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.
[43] Section 134(2)(a) provides that the modern awards objective applies to the performance or exercise of the Commission’s functions or powers under Pt 2-3 of the FW Act.
[44] The general principles applicable to the conduct of the 4 yearly review were recently summarised in Alpine Resorts Award 2010 18 as follows:
• section 156(2) provides that the Commission must review all modern awards and may, among other things, make determinations varying modern awards;
• “review” has its ordinary and natural meaning of “survey, inspect, re-examine or look back upon”; 19
• the discretion in s 156(2)(b)(i) to make determinations varying modern awards in a review, is expressed in general, unqualified, terms, but the breadth of the discretion is constrained by other provisions of the FW Act relevant to the conduct of the review;
• in particular the modern awards objective in s 134 applies to the review;
• the modern awards objective is very broadly expressed,20 and is a composite expression which requires that modern awards, together with the NES, provide “a fair and relevant minimum safety net of terms and conditions”, taking into account the matters in ss 134(1)(a)–(h);21
• fairness in this context is to be assessed from the perspective of the employees and employers covered by the modern award in question; 22
• the obligation to take into account the s 134 considerations means that each of these matters, insofar as they are relevant, must be treated as a matter of significance in the decision-making process; 23
• no particular primacy is attached to any of the s 134 considerations and not all of the matters identified will necessarily be relevant in the context of a particular proposal to vary a modern award; 24
• it is not necessary to make a finding that the award fails to satisfy one or more of the s 134 considerations as a prerequisite to the variation of a modern award; 25
• the s 134 considerations do not set a particular standard against which a modern award can be evaluated; many of them may be characterised as broad social objectives; 26
• in giving effect to the modern awards objective the Commission is performing an evaluative function taking into account the matters in s 134(1)(a)–(h) and assessing the qualities of the safety net by reference to the statutory criteria of fairness and relevance;
• what is necessary is for the Commission to review a particular modern award and, by reference to the s 134 considerations and any other consideration consistent with the purpose of the objective, come to an evaluative judgment about the objective and what terms should be included only to the extent necessary to achieve the objective of a fair and relevant minimum safety net; 27
• the matters which may be taken into account are not confined to the s 134 considerations; 28
• section 138, in requiring that 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, emphasises the fact it is the minimum safety net and minimum wages objective to which the modern awards are directed; 29
• what is necessary to achieve the modern awards objective in a particular case is a value judgment, taking into account the s 134 considerations to the extent that they are relevant having regard to the context, including the circumstances pertaining to the particular modern award, the terms of any proposed variation and the submissions and evidence; 30
• where an interested party applies for a variation to a modern award as part of the 4 yearly review, the task is not to address a jurisdictional fact about the need for change, but to review the award and evaluate whether the posited terms with a variation meet the objective. 31
[45] In respect of the current 4 yearly review, s 156(2)(b)(iii) (as applied by clause 26 of Schedule 1 of the FW Act) empowers the Commission to make determinations revoking modern awards. Because this is a power contained in Pt 2-3, the modern awards objective applies to the exercise of this power by virtue of s 134(2)(a). Additionally, s 157(1)(c) empowers the Commission generally to make a determination revoking a modern award if it is satisfied that this is necessary to achieve the modern awards objective.
[46] Section 164 sets out special requirements that also apply to the revocation of a modern award (whether or not this is done as part of the 4 yearly review):
164 Special criteria for revoking modern awards
The FWC must not make a determination revoking a modern award unless the FWC is satisfied that:
(a) the award is obsolete or no longer capable of operating; or
(b) all the employees covered by the award are covered by a different modern award (other than the miscellaneous modern award) that is appropriate for them, or will be so covered when the revocation comes into operation.
[47] The grant of CAI’s application would involve the Commission exercising modern awards powers in two respects simultaneously:
(1) the variation of the Hospitality Award in order to accommodate coverage of the clubs sector; and
(2) revocation of the Clubs Award.
[48] In order for us to take the first step, we would need to be satisfied that the variations to the Hospitality Award proposed by CAI are necessary in order for that award to achieve the modern awards objective. In respect of the second step, it would also be necessary for us to be satisfied that this would achieve the modern awards objective and in addition that either the precondition in s 164(a) or that in s 164(b) is satisfied.
[49] There has been little consideration to this point of the s 164 criteria for revocation. However we derive some assistance from paragraph 627 of the Explanatory Memorandum for the Fair Work Bill 2008, whichsaid:
“An award may become obsolete by the making of a new modern award. In such cases it is envisaged that commencement of the new award and revocation of the existing award would be co-ordinated to ensure no gap in award coverage.”
[50] Two things may be derived from the above passage. The first is that the making of a new modern award with a particular area of coverage will render an existing modern award with the same area of coverage obsolete for the purpose of s 164(a) and therefore capable of revocation. It seems to us that, by parity of reasoning, the same proposition would apply to a situation where a modern award is varied to give it an extended area of coverage which overlaps entirely with the coverage of a pre-existing modern award, so that the latter would also become obsolete for the purpose of s 164(a) and revocable. If so, then in the current case a determination to vary the Hospitality Award in the terms proposed by CAI in order to achieve the modern awards objective would have the consequential effect of rendering the Clubs Award obsolete and thus permitting its revocation without requiring any consideration of s 164(b). That would mean that the primary focus in this case must be on whether the proposed variations to the Hospitality Award in the context of the potential to expand its coverage to include employees currently covered by the Clubs Award are necessary in order for the modern awards objective to be achieved.
[51] Second, the practical way in which the provision would apply is that the revocation of the obsolete award would occur simultaneously with the making of the new award (or, on our extrapolation from the Explanatory Memorandum, the extension to the coverage of another award) so that there is no period during which the relevant class of employees is left not covered by another modern award. Section 164(b) also contemplates a similar approach in that the criterion of appropriateness is applied to a different modern award that already covers the relevant class of employees or will cover them when the revocation takes effect. That was the approach taken when the Commission, as part of the current 4 yearly review, determined that the Quarrying Award 2010 should be revoked at the same time as varying the Cement and Lime Award 2010 to become the Cement, Lime and Quarrying Award and to pick up the coverage of the Quarrying Award. 32
Findings on the evidence
The evidence
[52] The parties to the proceedings adduced evidence from the following witnesses:
Clubs Australia – Industrial:
• Anthony Trimarchi - Manager of Policy and Government at the Registered Clubs Association of New South Wales 33
• Gwyn Rees - Chief Executive of The Licensed Clubs Association of the ACT 34
• George Addison - Government Relations Manager (Qld) of CAI 35
• Neil Murray - COO of Community Clubs Victoria 36
• Lisa Petrie - Human Resources Manager of St George Leagues Club 37
• Chris Mossman - Executive Manager of Workplace Relations for Clubs NSW and the Executive Director/Secretary of CAI 38
United Voice:
• Rob Docker - CEO of the Tradies Group 39
• Neale Genge - Company Secretary and General Manager at Casino Returned Servicemen’s Memorial Club 40
• Daniel Constable - CEO of Port Macquarie Golf Club 41
• Deanna Kelly - Gaming Attendant at Central Coast Leagues Club 42
• Mark Unwin - CEO of The Australian Golf Course Superintendents’ Association 43
• Magdalena Gorman - Supervisor at Doyalson Wyee RSL 44
• Sandra King - Cashier and Gaming Attendant at Tewantin Noosa RSL 45
• Emilio Valenti - Bar Supervisor at Tea Tree Gully Club 46
• Peter Cooper - Senior Industrial Advocate at the CMAA 47
Club Managers’ Association Australia:
• Sharon Tassell - General Manager at Henry Lawson Sports Club 48
• Allen Peter - Federal Secretary of the CMAA 49
• Matthew Dagg - General Manager at North Burleigh Surf Life Saving Supporters Association and North Burleigh Surf Life Saving Club 50
• Zoe Clegg - Professional Development Manager of the CMAA 51
• David Hiscox - Company Secretary and General Manager at Dapto Leagues Club Ltd 52
Professional Golfers Association of Australia:
• Vicki Crowe - National Human Resources Manager (People & Culture) of the PGA 53
• Geoff Stewart - General Manager – Membership and Education of the PGA 54
• Gavin Kirkman - CEO of the PGA 55
RSL and Services Club Association Queensland Inc.
• Timothy Wright - General Manager of the Greenbank RSL Services Club Inc. 56
[53] In addition, the parties (particularly CAI) tendered a considerable amount of documentary material.
Overview of the clubs industry
[54] CAI tendered two documents which provide useful and objective overview information about the clubs industry in Australia. The first was the “2015 National Clubs Census” prepared by KPMG at the request of Clubs NSW and published in August 2016 (2016 KPMG Report). An earlier 2011 version of the Clubs Census (2011 KPMG Report) was discussed extensively in paragraphs [922]-[948] of the Penalty Rates Decision (and was also placed into evidence before us). The second was Australian Bureau of Statistics 2016 census data on labour force characteristics in the clubs sector and the hospitality sector generally (ABS labour force data).
[55] The KPMG Report stated the following key findings:
• the clubs industry consisted of a total of 6,413 individual clubs across Australia servicing over 13.2 million members and others in the broader community;
• the clubs industry contributed an estimated $8.3 billion to the Australia economy, constituting 0.5% of GDP and up 18% on 2011;
• the industry paid an estimated total of $2.6 billion in Commonwealth and State taxes;
• the industry made a “social contribution” (consisting of community donations, subsidised access to facilities and volunteering) of a total of $5 billion, of which direct and in-kind donations amounted to $286 million; and
• the industry employed a headcount of just under 131,000 persons, which constitutes a slight fall from 2011, and amounts to around 85,000 full-time equivalents (FTEs);
[56] The 2016 KPMG Report contained a number of significant findings about the revenue received by clubs from EGMs and their financial viability. In respect of EGM revenue, it was found that there had been a change in the structure of the industry since 2011, with a small increase in the number of clubs receiving no EGM revenue (totalling 4,449 out of 6,413, up 17) and a significant increase in the number of clubs earning $5 million or more in EGM revenue (314 in total, up 76). However there had been a large reduction in the number of clubs earning from $200k - $5 million in EGM (1073 in total, down 303). In relation to EGM revenue, the 2016 KPMG Report emphasised that differences in the regulatory framework in the states concerning the operation of EGMs meant that there were large differences in EGM revenue as between the states. On the one hand, in Western Australia no club earned EGM revenue and in South Australia EGM revenue only made up less than 10% of club revenue, while in New South Wales and the ACT EGM revenue made up over half of all club revenue.
[57] The 2016 KPMG Report assessed the financial viability of clubs measured by earnings before interest, income tax, depreciation and amortisation (EBITDA) as a proportion of total revenue. Where EBITDA was more than 25% of revenue, it was classed as “flourishing”, 15-25% was “solid”, 10-15% was “stable”, 5-10% was “distress” and below 5% was “serious distress”. Clubs in the distress category were described as requiring changes to ensure viability, and in relation to those in the serious distress category the 2016 KPMG Report said “there are serious questions as to whether the club can continue as a going concern”. Overall, there had since 2011 been an increase in the number of clubs in a flourishing or solid financial position, from 27% to 36%, and a decrease in the number of clubs in distress or serious distress from 51% to 41%. Smaller clubs were more likely to be in distress or serious distress, and less likely to be in a flourishing or solid financial position, than larger clubs. There were also differences between the type of clubs, so that for example bowling clubs and golf clubs had facilities that required significant investment and ongoing maintenance as part of their primary mission, and changes in the level of demand might affect the sustainability of these clubs. Overall, the highest proportion of clubs in distress or serious distress were golf clubs and leagues clubs, while the lowest were RSL clubs and community clubs.
[58] The economic contribution of $8.3 billion was unevenly distributed between the states, so that New South Wales contributed 45% of this, Victoria 18%, Queensland 17%, South Australia 9%, Western Australia 6% and the ACT 4%.
[59] In respect of employment, the number of employees in the clubs industry on a headcount basis had dropped slightly, from 131,500 to just under 131,000. Of these, 27% were employed on a full-time basis, 12% were part-time, 59% were casual and 2% were trainees or apprentices. The 2016 KPMG Report found that 53% of clubs employees were women. The age profile of the workforce was: 32% were 24 years of age or younger, 41% from ages 25 to 44, and 25% from 45 to 64.
[60] It may be noted that there is a major discrepancy, as well as some other significant differences, in the clubs industry labour force statistics between the 2016 KPMG Report and the 2011 KPMG Report. According to the 2011 KPMG Report, there were approximately 96,000 persons employed in the clubs industry. That discrepancy with the 2016 KPMG Report was not explained. The composition of employees has significantly changed: the 2011 KPMG Report said that 28% of employees were full-time, 21% were part-time, 49% were casual and 2% were trainees and apprentices. This difference may be the result of the Clubs Award having, until the Casual and Part-time Employment Decision of 5 July 2017, more restrictive part-time employment provisions than the pre-modern instrument which applied before 2010 in a number of states, especially New South Wales. 57
[61] The 2011 KPMG Report also contained some information which was not the subject of updating in the 2016 KPMG Report. Some of that information, although now somewhat dated, remains relevant. In particular:
• the average number of employees per club varies significantly between states at 41 for the ACT, 28 for New South Wales and 15 or less for all the other states, and is a result of the fact that there is a higher proportion of large clubs in the ACT and New South Wales;
• the clubs industry was managed by a total of 54,000 directors or equivalents, who were mostly unpaid volunteers;
• the industry also used more than 123,00 volunteers in the provision of sporting assistance, and used over 250,000 volunteers in total;
• clubs’ access to a large pool of volunteer labour, with an average of 39 volunteers per club, facilitated them in providing low cost facilities and funding community activities.
[62] The 2016 ABS labour force data showed that the clubs sector of the hospitality industry had the following characteristics:
• 44.1% of employees worked full-time hours and 55.9% worked part-time hours;
• 19.7% worked 1-15 hours per week, 16.4% worked 16-24 hours per week, 19.8% worked 25-34 hours per week, and 44% worked 35 or more hours per week;
• the workforce was 53.9% female and 46.1% male;
• 27.9% of the workforce was aged 15-24, 36.1% was aged 25-44, and 31.1% was aged 45-64;
[63] It should be noted that the ABS labour force data for the clubs sector does not however include those clubs that are not categorised as providing hospitality services. This difficulty is discussed in greater detail later in this decision.
Effect on employees of the proposed reduction in penalty rates
[64] It was not in dispute that the reduction in penalty rates which would flow from the grant of CAI’s application would cause a reduction in the take home pay of employees currently covered by the Clubs Award who worked on weekends and public holidays. However it is necessary to set out the extent of the reductions involved since, unlike the outcome in the Penalty Rates Decision, what would be involved is lower penalty rates for Saturdays as well as Sundays and public holidays.
[65] United Voice called four witnesses who gave evidence concerning the personal effect penalty rate reductions would have upon them. Magdalena Gorman, who is employed full-time as a supervisor at Doyalson Wyee RSL Club, has a roster which requires her to work Thursday to Sunday, and is paid at Level 5 rates under the Clubs Award. She is a single mother and supports one child. Her evidence was that her weekly expenses totalled average $754 per week, and she received a single parent allowance from Centrelink of $296 per fortnight. The reduction in penalty rates proposed by CAI, if applied to her, would lead to a loss of $113.15 per week (on the award rates as at May 2018 and 20 hours work per weekend). This may be calculated as constituting an almost 10% cut to her weekly income. She described the consequences of this in the following terms:
“If this happens, then the loss of income would mean that I would need to find ways to cut back on expenses.
My son may have to miss out on going to school excursions and school camps. We may not have a family holiday or greatly reduce the choice and location of holidays to less desirable destinations. I would have to use more of my savings to cover expenses which would be concerning for me as I would have less back up funds for emergencies.
As a full time employee I can work a maximum of 38 hours per week. I already work the maximum number of hours.
• there was no evidence that the penalty rates currently existing in the clubs sector caused clubs to be at any identifiable disadvantage in any competition with hospitality venues or that such penalty rates have any significance in that context; and
• the evidence before us concerning the workforce profile of the clubs sector as compared to the hospitality sector was not sufficient to demonstrate that the level of disability for permanent employees working weekends and public holidays in the clubs sector was the same as that in the hospitality sector.
[119] The AIRC award modernisation Full Bench was persuaded to establish a separate Clubs Award at the urging of CAI supported by United Voice and the CMAA. The submissions of CAI at the time identified a range of factors which distinguished the clubs sector from the broader hospitality sector and justified the establishment of a separate award. All of those differences were accepted by the parties and the Full Bench in the making of the separate Clubs Award and remain relevant to the present exercise including the competing considerations arising from the modern awards objective. They also impact upon the degree to which the findings in the Penalty Rates Decision in respect of the Hospitality Award can safely be applied to the clubs sector.There is no consensus in the clubs sector, even on the employer side, that the basis upon which the award modernisation Full Bench acted should be reversed, and the perception of the clubs industry being distinct and requiring its own award remains strongly entrenched in significant sections of the industry.
[120] In respect of penalty rates, there is one critical matter which arises from the circumstances in which the Clubs Award was made by the award modernisation Full Bench. As earlier stated, there was an initial exposure draft for a single hospitality industry award which covered the clubs industry. That exposure draft proposed that the penalty rates for full-time and part-time employees be 125% for Saturdays and 175% for Sundays. CAI strongly opposed being covered by such an award, and proposed (in conjunction with United Voice and the CMAA) a separate clubs industry award with penalty rates for full-time and part-time employees of 150% for Saturdays and 175% for Sundays. That is, the result urged by CAI was for a separate award with a higher Saturday penalty rate than that foreshadowed for the general hospitality industry. The award modernisation Full Bench was persuaded to take the course proposed, which is why the Clubs Award has a higher Saturday penalty rate for permanent employees than the Hospitality Award. Not surprisingly, it has not been contended that the award modernisation Full Bench acted in error in taking this course. Nor has anything been put before us to demonstrate that any new development or change in circumstances since the award modernisation process was undertaken has altered the premise upon which the award modernisation Full Bench acted and the 150% Saturday penalty rate for clubs was established. Further, we note that there has been no challenge by CAI in these proceedings to the conclusion expressed in the Penalty Rates Decision that “[g]enerally speaking, for many workers Sunday work has a higher level of disutility than Saturday work, though the extent of the disutility is much less than in times past”. 103
[121] There has been no independent justification advanced for a reduction to the Sunday penalty rate in the Clubs Award apart from the adoption of the Hospitality Award provisions. In this respect, the position here is entirely different from that dealt with in the Penalty Rates Decision, where the Full Bench had before it extensive employer evidence concerning change in the disutility associated with working on Sundays for employees working under that award and the potential benefits of a reduction in the penalty rate. With respect to the public holiday penalty rate, it may be accepted as a general proposition that employees currently under the Clubs Award will have benefited from the application of s 114 of the FW Act and (although this was not a feature of CAI’s case) that this is relevant to the level of disutility when working on public holidays in the same way as it was considered to be in the Penalty Rates Decision. However, absent the coverage of the Clubs Award being absorbed into the Hospitality Award as sought by CAI, the current Sunday penalty rate in the Clubs Award will remain, and no issue of disproportionality will arise between that rate and the current public holiday rate. This is in contrast to the position in the Penalty Rates Decision whereby, once it was determined that there should be a reduction to the Sunday penalty rate, it became apparent that the public holiday penalty rate was no longer proportionate to that rate. No other independent basis for a reduction in public holiday penalty rates was raised by CAI.
[122] There is a superficial attraction in the proposition that the number of awards applicable to similar or comparable sectors of the economy should be reduced. That may be desirable where, for example, particular employers operate in multiple sectors under multiple awards or may move from one sector to another as their businesses evolve. In those situations a simplification of the regulatory regime may have benefits. However, there are also potential detriments in taking such a course. Awards may have particular conditions that are tailored with precision for the requirements of a particular sector, and merging awards to achieve full commonality of regulation will result in that degree of tailoring being lost. Alternatively, if the merger of awards is done in a way that preserves some or all of such provisions for one sector, the new award may become more complex to the extent that it becomes two awards in one and the objective of greater regulatory simplicity is not achieved.
[123] We cannot identify any particular benefit that would arise from revoking the Clubs Award and expanding the coverage of the Hospitality Award. It is not currently the case that any employers have operations which straddle the two awards, or that an employer may move from one award to the other, so no regulatory advantage is gained from the merger of the two awards in that respect. Some clubs may contract out functions to specialist employers who are not covered by the Clubs Award, but there was no evidence that this has caused any regulatory confusion or difficulty and, in any case, the examples of this disclosed in the evidence were primarily restaurants contracted out to employers covered by the Restaurant Industry Award. Although we do not wish to overstate the position, the modified Hospitality Award proposed by CAI is unavoidably more complex to a degree than the current awards, and we take into account that the terms of the proposed award did not receive the support of the AHA.
[124] It is also the case that the proposed merged award contains inconsistencies which are difficult to rationalise and may be productive of future difficulty. The proposed award retains the higher weekend penalty rates for maintenance and horticultural employees currently found in the Clubs Award, without any explanation being advanced as to why they would not participate in alignment of penalty rates considered desirable by CAI. It also appears to be the case that these higher penalty rates would become applicable to gardeners in hotels currently covered by the Hospitality Award, without there being any explanation afforded for this. The merged award would also contain the classification structure and career path for club managers only currently found in the Clubs Award, while the far less beneficial existing provisions for hotel managers would be retained. Again, there is a lack of cogent explanation for this in the context of CAI’s case that employees in the clubs sector and the hospitality sector largely perform the same work and that their employers compete with each other. As earlier stated, the proposed new award would also effect change to a range of other conditions currently found in the Clubs Award without there having been any evidence or a merits based case about the consequences of this for clubs and clubs employees.
[125] We do not therefore consider that CAI’s proposed variations to the Hospitality Award to subsume the coverage of the Clubs Award are necessary to or would achieve the modern awards objective. In short, they would inflict economic harm on clubs employees without any identifiable countervailing benefit to clubs, their employees, the hospitality sector or the public interest. In reaching this conclusion, we have taken into account the considerations set out in s 134(1) of the FW Act in the following way (using the paragraph designations in the subsection):
(a) The variations insofar as they involve a reduction in weekend and penalty rates for permanent clubs employees would detrimentally affect the relative living standards and needs of the low paid (and would be likely to expand the numbers of low paid employees). This weighs heavily against the grant of the application.
(b) We do not consider that collective bargaining would be encouraged or discouraged, so this is a neutral consideration.
(c) There is no basis to conclude that the grant of CAI’s application would increase employment and thus promote social inclusion through increased workforce participation, so this is a neutral consideration.
(d) We do not consider that CAI’s application would promote flexible modern work practices and the efficient and productive performance of work. In this connection we note in particular that the clubs industry is already able to service peak customer demand on weekends and public holidays. This is therefore a neutral consideration.
(da) Clubs employees will receive additional remuneration when working overtime, unsocial, irregular or unpredictable hours, weekends and public holidays, and shifts, whether the application is granted or not. This is a neutral consideration.
(e) CAI submitted that the grant of its application would achieve equal remuneration for work of equal or comparable value, in that it would end the situation in which permanent employees under the Hospitality Award receive less remuneration for working on weekends and public holidays than permanent employees under the Clubs Award. This submission is misconceived, since s 302(2) makes it clear that s 134(1) is concerned with gender pay disparities. 104 There is no gender element in this case and accordingly this is a neutral consideration.
(f) We do not consider that the exercise of modern awards powers to modify the Hospitality Award as proposed by CAI would have any discernible beneficial effect on business insofar as productivity and the regulatory burden are concerned. It would reduce employment costs for clubs but, for the reasons already stated, we do not consider that any substantial benefit would follow from this, and there may be detrimental effects. This is a neutral consideration.
(g) We do not consider that the grant of the application would make the modern award system simpler, easier to understand, or more sustainable. It is likely to add some degree of complexity to the award regulation of the club industry and the hospitality industry, and would disrupt the stability of the award regulation of those industries. There is no issue of any overlap in the coverage of the Clubs Award or the Hospitality Award. This is a consideration which weighs against the grant of the application.
(h) There is no basis to conclude the grant (or rejection) of CAI’s application would have any discernible impact on employment growth, inflation, or the sustainability, performance and competitiveness of the national economy.
[126] Cumulatively, the s 134(1) factors weigh against the grant of CAI’s application. For the reasons given, we decline to grant the application either in the primary or alternative terms proposed.
“Red circling”
[127] Section 599 of the FW Act provides that the Commission is not required to make a decision in relation to an application in the terms applied for. As already explained, we are not satisfied that the transitional provisions proposed by CAI in its application would significantly ameliorate the economic harm it would inflict upon permanent clubs employees who work on weekends and public holidays. However, in a Statement which we issued on 11 July 2018, 105 we invited parties to address us on a potential alternative transitional arrangement whereby, if the Clubs Award was revoked and the Hospitality Award varied to incorporate its coverage, existing full-time and part-time employees who are currently covered by the Clubs Award would have their existing weekend and public holiday penalty rates maintained for the duration of their employment, with any reduced penalty rates applicable only to new full-time and part-time employees. Transitional arrangements of this nature are often described as “red-circling” existing employees.
[128] Red-circling was rejected as a suitable transitional arrangement in the implementation of the Sunday penalty rates reduction determined in the Penalty Rates Decision. In the Penalty Rates – Transitional Arrangements Decision issued on 5 June 2017 106 the Full Bench said (in response to a proposed red-circling term advanced by the Shop, Distributive and Allied Employees Association in respect of the General Retail Industry Award 2010):
“[119] Contrary to the submissions advanced by the SDA we are of the view that the introduction of such a term would:
• create significant potential for disharmony and conflict between employees performing the same work at the same time but receiving different Sunday penalty rates (contrary to s.577(d)); and
• make the transition to ‘fair and relevant’ Sunday penalty rates more complex (adding to the ‘regulatory burden’ on business (s.134(1)(f)) and making the modern award system less simple and easy to understand (s.134(1)(g)).
[120] As to the second point, the introduction of a term of the type proposed would require employers to apply two different regimes in respect of Sunday penalty rates – the current rates for employees employed as at the date of implementation (i.e. 1 July 2017) (the ‘existing employees’) and the new rates for employees employed after the implementation date (the ‘new employees’). This would be so even if the ‘existing employees’ had not previously worked on Sundays and hence could be said to have suffered no reduction in their take home pay as a result of the Penalty Rates decision. Indeed an employer who had never previously operated its business on a Sunday, but decided to do so in the future, would be obliged to pay ‘existing employees’ a higher Sunday penalty rate than ‘new employees’. We also agree with the submission of United Voice that there is a risk that ‘red circled employees’ may suffer disadvantage in comparison with new employees and that safeguarding such employees may be difficult.
[121] There is also a significant degree of complexity, and uncertainty, in the operation of the proposed term and in particular the duration of the ‘red circling’ arrangement…”
[129] Those parties opposing CAI’s application also opposed the introduction of any red-circling arrangement. It is sufficient to refer to United Voice’s submission that the conclusions reached by the Full Bench in the Penalty Rates – Transitional Arrangements Decision were equally applicable herein that it would create significant potential for disharmony between employees doing the same work at the same time but receiving different pay, would add complexity to the award system and make it less simple and easy to understand, and give rise to a risk that red-circled employees may suffer disadvantage in comparison with new employees and that safeguarding them would be difficult.
[130] Red-circling was not embraced by CAI as a viable alternative path to the revocation of the Clubs Award and the incorporation of the coverage of clubs into the Hospitality Award. Although CAI accepted that an expanded Hospitality Award containing red-circling provisions for permanent clubs employees’ penalty rates would be an “appropriate” award for such employees for the purpose of s 164(b), it nonetheless submitted that this course should not be taken because:
• it would entail the existing clubs employees being continued to be overcompensated for working on Saturdays, Sundays and public holidays;
• it would subjugate the interests of employers in the clubs industry to those of employees;
• it would lead to employees of the employer being engaged on different terms and conditions; and
• it would introduce a degree of complexity in the transitional arrangements and add to the regulatory burden.
[131] Having regard to these submissions and the Penalty Rates - Transitional Arrangements Decision, we conclude that the modification of CAI’s application by the adoption of red-circling as a transitional arrangement for the application of lower penalty rates to permanent employees in the clubs sector would not lead to the modern awards objective being attained. Although a red-circling arrangement would prevent any direct reduction of the take-home pay of existing permanent employees who work on weekends, and thus impact upon the extent to which the s 134(1)(a) consideration is a factor weighing against the grant of the application in some form, it would give rise to a range of problems of which the following are the most significant:
(1) There would be significant difficulties in defining who would constitute the existing permanent employees who would be protected by the red circling arrangement. As discussed in the Penalty Rates - Transitional Arrangements Decision, if it encompassed any existing permanent employee, it would mean that an employee who had never worked on a weekend or a public holiday before would be entitled to the higher penalty rates if they ever did so in the future. If the red circling arrangement only applied to existing permanent employees who currently work on weekends, there would be a host of questions concerning what is necessary to qualify for that designation and the extent of the preservation of entitlements to apply. For example, United Voice’s witness Mr Valenti works a Tuesday to Saturday roster, but does not work on Sundays; the question would then arise whether only his existing Saturday penalty rate should be preserved or whether he should also retain an entitlement to the Sunday penalty rate in the event that he ever worked on a Sunday in the future.
(2) A red-circling arrangement would necessarily create a financial incentive for an employer to substitute the employment or hours of an existing permanent employee for a new employee, or to convert the existing permanent employee to casual employment, or to minimise the rostering of weekend and public holiday work for such an employee. Accordingly it would need to be supplemented by safeguarding provisions to prevent detrimental outcomes to the class of employees it is intended to protect. The design of safeguarding provisions to prevent these outcomes would involve considerable difficulty and potential legal and practical complexity.
Conclusion
[132] We do not consider that the grant of CAI’s application to vary the Hospitality Award so that it covered the clubs industry would achieve the modern awards objective, and accordingly the Hospitality Award will not be varied in this respect. Consequently there is no basis for the statutory preconditions in s 164 of the FW Act for the revocation of the Clubs Award to be satisfied: the Clubs Award is not obsolete or incapable of operation, and the employees covered by it would not be covered by any other modern award were it to be revoked.
[133] CAI’s application is dismissed.
VICE PRESIDENT
Appearances:
H.J. Dixon SC of Counsel and A. Gotting of Counsel on behalf of Clubs Australia – Industrial
C. Dowling SC of Counsel and K. Bourke of Counsel and on behalf of United Voice
P. Imber and P. Cooper on behalf of Club Managers Association Australia
Z. Duncalfe on behalf of the Australian Workers’ Union
P. Ryan on behalf of Australian Hotels Association
G. Arnold on behalf of QLD RSL and Clubs
Hearing details:
2018.
Sydney:
2 – 12 July.
Printed by authority of the Commonwealth Government Printer
<PR704018>
SCHEDULE Individual clubs opposing CAI’s application | ||
Name | Date | |
1. | Coboolture RSL | 31 August 2017 |
2. | Maclean Lower Clarence Services Club Ltd | 12 September 2017 |
3. | Victoria Point Sharks Sporting Club Inc and Cleveland Sharks Sporting Club | 22 September 2017 |
4. | Randwick Bowling Club | 20 October 2017 |
5. | Redlands RSL and Stradbroke RSL | 25 October 2017 |
6. | Rockdale Tennis Club | 1 November 2017 |
7. | Rathmines Labor Club | 2 November 2017 |
8. | Club Harrington | 2 November 2017 |
9. | Parkes Services Club | 3 November 2017 |
10. | Lalor Bowling Club | 3 November 2017 |
11. | Illawarra Leagues Club | 6 November 2017 |
12. | Buckingham Bowls Club Inc. | 6 November 2017 |
13. | Wellington Golf Club | 6 November 2017 |
14. | West Tamworth League Club Ltd, Wests Diggers and The Courts @ East | 6 November 2017 |
15. | Sutherland District Trade Union Club | 9 November 2017 |
16. | Darebin RSL Sub- Branch Inc | 10 November 2017 |
17. | Gosnells Bowling Club | 10 November 2017 |
18. | South Grafton Bowling Sports and Recreation Club | 10 November 2017 |
19. | Talbingo Club | 13 November 2017 |
20. | Kotara Bowling Club | 14 November 2017 |
21. | University of Adelaide Club | 16 November 2017 |
22. | Cugden Leagues Club | 16 November 2017 |
23. | Capella Tennis Club | 16 November 2017 |
24. | Redcliffe Harness Racing Club | 16 November 2017 |
25. | Pittsworth Bowls Club | 21 November 2017 |
26. | Tarcutta RSL & Citizens Club | 21 November 2017 |
27. | Collinsville Bowls Club | 22 November 2017 |
28. | Moodiarrup Sports Complex Inc | 27 November 2017 |
29. | Lake Conjola Bowling & Recreation Club Ltd | 27 November 2017 |
30. | Gunnedah Golf Club | 29 November 2017 |
31. | Cardiff Bowling Club Co-op Limited | 29 November 2017 |
32. | Port Macquarie Golf Club | 29 November 2017 |
33. | Warialda Golf & Bowling Club Ltd | 6 December 2017 |
34. | Windale Gateshead Bowling Club | 7 December 2017 |
35. | Club Merbein | 8 December 2017 |
36. | Mildura Working Man’s Club | 8 December 2017 |
37. | Wynnum Manly Yacht Club | 8 December 2017 |
38. | Austrian Australian Club | 11 December 2017 |
39. | Weipa Bowls Club | 14 December 2017 |
40. | Binjour Bowls Club | 18 December 2017 |
41. | Tamworth City Bowling Club | 22 December 2017 |
42. | Kattaning Bowls Club | 22 December 2017 |
43. | Brighton Bowls Club | 22 December 2017 |
44. | Moe RSL Sub-branch | 2 January 2018 |
45. | Moonie Sports Club | 2 January 2018 |
46. | Port Sorell Bowls Club | 8 January 2018 |
47. | Bramble Bay Bowls Club | 16 February 2018 |
48. | Greenbank RSL Services Club | 13 March 2018 |
49. | Redlands Multi Sports Club | 16 April 2018 |
50. | Queensland Railways Institute Ipswich Branch | 14 June 2018 |
51. | Diggers Services Club | 4 July 2018 |
52. | Padstow RSL Club | 27 July 2018 |
53. | Cranbourne Sports and Entertainment Centre | 30 July 2018 |
54. | Bellambi Bowling Club | 30 July 2018 |
55. | Hat Head Bowling Club | 30 July 2018 |
56. | Moe Racing Club and Bairnsdale Sporting and Convention Centre | 31 July 2018 |
57. | Canberra Highland Society and Burns Club | 31 July 2018 |
58. | Narrandera Ex-Servicemen's Club | 31 July 2018 |
59. | Lake Conjola Bowling & Recreation Club Ltd | 1 August 2018 |
60. | Blackwood Community RSL | 1 August 2018 |
61. | Lithgow Workman’s Club | 1 August 2018 |
62. | Wangi RSL Club | 2 August 2018 |
63. | The Hobart Workers’ Club | 3 August 2018 |
64. | Public Schools Club | 3 August 2018 |
65. | Adelaide Bowling Club | 6 August 2018 |
66. | Canberra Labor Club | 6 August 2018 |
67. | Currarong Bowling Club | 6 August 2018 |
68. | Gulgong RSL Club | 7 August 2018 |
69. | Southern Districts Workingmans Club | 7 August 2018 |
70. | Braidwood Servicemens Club | 7 August 2018 |
71. | Port Bouvard Recreation & Sporting | 7 August 2018 |
72. | Altona Bowling Club | 7 August 2018 |
73. | Braidwood Servicemens Club | 7 August 2018 |
74. | Cabramatta Golf Club | 8 August 2018 |
75. | Kingscliff Beach Bowls Club | 8 August 2018 |
76. | German Australian Association of Tasmania | 9 August 2018 |
77. | Gunnedah Golf Club | 9 August 2018 |
78. | Belconnen Soccer Club | 10 August 2018 |
79. | German Austrian Club of Australia | 10 August 2018 |
80. | Exeter Golf Club Inc. | 13 August 2018 |
81. | Australian Croatian National Hall | 13 August 2018 |
82. | Oaklands RSL Bowling Club | 13 August 2018 |
83. | Donnybrook Country Club | 13 August 2018 |
84. | Karingal Bowling Club | 13 August 2018 |
85. | Moranbah Bowls Club | 14 August 2018 |
86. | Lithgow Golf Club | 14 August 2018 |
87. | Brooms Head Bowling Club | 15 August 2018 |
88. | The Albury Club | 15 August 2018 |
89. | Lansdowne Bowling Club | 15 August 2018 |
90. | Boyne Tannum Bowls Club | 16 August 2018 |
91. | Chinchilla Club | 16 August 2018 |
92. | Rockingham Bowling Club | 16 August 2018 |
93. | Barraba RSL & Recreational Club Ltd | 16 August 2018 |
94. | Lara Sporting Club | 16 August 2018 |
95. | Denman RSL | 17 August 2018 |
96. | Red Rock Bowling & Recreation Club Ltd | 20 August 2018 |
97. | West Cairns Bowls Club | 20 August 2018 |
98. | Albany Bowling Club | 20 August 2018 |
99. | Railways Football Club | 21 August 2018 |
100. | Frederickton Golf Club | 21 August 2018 |
101. | Claremont Football Club | 21 August 2018 |
102. | Bowraville & District Ex-Services Club Limited | 24 August 2018 |
103. | Lawson Bowling Club | 24 August 2018 |
104. | Woodford Golf Club | 27 August 2018 |
105. | Moranbah Golf Club | 27 August 2018 |
106. | Goolgowi Ex-Servicemen’s Memorial Club | 28 August 2018 |
107. | Hilton Park Bowling Club W.A. | 28 August 2018 |
108. | Bicheno RSL Sub Branch | 28 August 2018 |
109. | Hornsby RSL Club | 28 August 2018 |
110. | Morwell RSL Sub Branch Inc | 28 August 2018 |
111. | Peak Hill Bowling Club | 28 August 2018 |
112. | Scottsdale RSL Ex Servicemen's Memorial & Community Club | 28 August 2018 |
113. | Pacific Palms Recreation Club | 30 August 2018 |
114. | Newcastle Leagues Club | 31 August 2018 |
115. | Alexandra House Sports Club | 31 August 2018 |
116. | Daylesford Bowling Club | 31 August 2018 |
117. | Bunnaway Golf Club | 31 August 2018 |
118. | Tin Can Bay RSL | 31 August 2018 |
119. | Windale Gateshead Bowling Club Co-Op | 5 September 2018 |
120. | South Perth Bowling Club | 6 September 2018 |
121. | Texas Golf Club | 6 September 2018 |
122. | Tamworth Golf Club | 7 September 2018 |
123. | Uralla Golf Club | 12 September 2018 |
124. | South Sydney Graphic Arts Club | 12 September 2018 |
125. | Kendenup Country Club | 17 September 2018 |
126. | Cadell Club | 18 September 2018 |
127. | Millmerran MBC | 19 September 2018 |
128. | Primrose Sands RSL | 24 September 2018 |
129. | Club Macquarie | 25 September 2018 |
130. | Lithgow Bowling Club t/a Club Lithgow | 26 September 2018 |
131. | American River Community & Sports Association | 26 September 2018 |
132. | The Commercial Sporting and Recreation Club Inc | 8 October 2018 |
133. | Bibela Bowls Club Inc | 8 October 2018 |
134. | Murrumbidgee Country Club | 16 October 2018 |
135. | Federal Golf Club | 16 October 2018 |
136. | Building Workers Club | 17 October 2018 |
137. | Turners Beach Bowls & Community Club Inc | 22 October 2018 |
138. | Australian Croatian Club | 24 October 2018 |
139. | East Maitland Bowling Club | 24 October 2018 |
140. | Maroubra Seals Sports & Community Club | 25 October 2018 |
141. | Nambucca Leagues and Sports Club Ltd | 5 November 2018 |
1 [2017] FWCFB 1001
2 Ibid at [883]
3 Ibid at [853]
4 Ibid at [854]-[855]
5 Ibid at [829]
6 Ibid at [818]–[823]
7 Ibid at [1949]-[1954]
8 Ibid at [1955]
9 Ibid at [1956]
10 [2017] FWCFB 3001
11 Ibid at [198]
12 [2008] AIRCFB 717 at [47]; [2008] AIRCFB 1000 at [113]
13 [2009] AIRCFB 450
14 [2017] FWCFB 3541
15 [2017] FWCFB 3541
16 [2015] FWCFB 3406
17 Blacktown Workers Club, Bulli Workers Club, Cabra-Vale Ex-Active Servicemen’s Club, Campbelltown RSL, Campbelltown Catholic Club, City Trade Union Bowling Club, Club Central Hurstville, Club Central Menai, C.ex Coffs Harbour, C.ex Urunga, C.ex Woolgoolga, Dora Creek Workers Club, Dubbo RSL Club, Fingal Bay Bowls Sports & Recreation Club, Goulburn Workers Club, Gulgong RSL Club, Graphic Arts Club Mascot, Lantern Club, Lithgow & District Workmen’s Club, Liverpool Catholic Club, Mingara Recreation Club, Mooney Workers Club, Mt Pritchard & District Community Club, Mt Pritchard-Harbord Diggers, Mt Pritchard-Manly Bowling Club, Narromine United Services Memorial Club, Newtown RSL, North Sydney Leagues Club, North Sydney Seagulls, Pearl Club Chatswood, Petersham RSL, Randwick Labor Club, Revesby Workers Club, Revesby Bowling & Recreation Club, Richmond Club Limited, Singleton Diggers, Springwood Sports Club, Sutherland District Trade Union Club, Sutherland Tradies Helensburgh, Teralba Bowling Club, The Westport Club, Thurgoona Country Club, Toronto District Workers Club, Wagga Wagga RSL, Wagga Wagga Commercial Club, Warragamba Workers & Sporting Club, West Pennant Hills Sports Club, West Tradies, West Wallsend Workers Club, Weston District Workers Club.
18 [2018] FWCFB 4984 at [52]
19 Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161, 253 FCR 368, 272 IR 88 at [38]
20 Shop, Distributive and Allied Employees Association v National Retail Association (No 2) [2012] FCA 480, 205 FCR 227, 219 IR 382 at [35]
21 Penalty Rates Decision [2017] FWCFB 1001, 265 IR 1 at [128]; Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161, 253 FCR 368, 272 IR 88 at [41]-[44]
22 Re Annual Wage Review 2017-2018 [2018] FWCFB 3500, 279 IR 215 at [21]-[24]
23 Edwards v Giudice [1999] FCA 1836, 94 FCR 561 at [5]; Australian Competition and Consumer Commission v Leelee Pty Ltd [1999] FCA 1121 at [81]-[84]; National Retail Association v Fair Work Commission [2014] FCAFC 118, 225 FCR 154, 244 IR 461 at [56]
24 Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161, 253 FCR 368, 272 IR 88 at [33]
25 National Retail Association v Fair Work Commission [2014] FCAFC 118, 225 FCR 154 at [105]-[106]
26 Ibid at [109]-[110]; albeit the Court was considering a different statutory context, this observation is applicable to the Commission’s task in the Review
27 Ibid at [28]-[29]; Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161, 253 FCR 368, 272 IR 88 at [49]
28 Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161, 253 FCR 368, 272 IR 88 at [48]
29 CFMEU v Anglo American Metallurgical Coal Pty Ltd [2017] FCAFC 123, 252 FCR 337 at [23]; cited with approval in Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161, 253 FCR 368, 272 IR 88 at [45]
30 See generally: Shop, Distributive and Allied Employees Association v National Retail Association (No.2) [2012] FCA 480, 205 FCR 227, 219 IR 382
31 Ibid at [46]
32 See 4 yearly review of modern awards -Award stage - Group 1 [2018] FWCFB 3802 at [119]-[120]
33 Witness Statement – 23 October 2017, Exhibit 1; Oral Evidence – Transcript 2 July 2018, PNs 427-961
34 Witness Statement – 21 October 2017, Exhibit 9; Supplementary Statement – 7 June 2018, Exhibit 10; Oral Evidence – Transcript 3 July 2018, PNs 969-1581
35 Witness Statement – undated, Exhibit 14; Supplementary Statement – 8 June 2018, Exhibit 15; Oral Evidence – Transcript 3 July 2018, PNs 1593-2049
36 Witness Statement – 23 October 2017, Exhibit 20; Supplementary Statement – 6 June 2018, Exhibit 21; Oral Evidence – Transcript 3 July 2018, PNs 2339-2574
37 Witness Statement – 23 October 2017, Exhibit 22; Oral Evidence – Transcript 4 July 2018, PNs 2757-3233
38 Witness Statement – 8 June 2018, Exhibit 26; Oral Evidence – Transcript 4 July 2018, PNs 3238-3900
39 Witness Statement – 10 May 2018, Exhibit 19; Oral Evidence – Transcript 3 July 2018, PNs 2118-2337, 2576-2729
40 Witness Statement – 8 May 2018, Exhibit 34; Oral Evidence – Transcript 4 July 2018, PNs 3989-4196
41 Witness Statement – 10 May 2018, Exhibit 35; Oral Evidence – Transcript 5 July 2018, PNs 4217-4597
42 Witness Statement – 14 May 2018, Exhibit 36; Oral Evidence – Transcript 5 July 2018, PNs 4613-4708
43 Witness Statement – 10 May 2018, Exhibit 37; Oral Evidence – Transcript 5 July 2018, PNs 4734-4948
44 Witness Statement – 10 May 2018, Exhibit 38; Oral Evidence – Transcript 5 July 2018, PNs 4963-5042
45 Witness Statement – 14 May 2018, Exhibit 49
46 Witness Statement – 15 May 2018, Exhibit 51; Oral Evidence - Transcript 9 July 2018, PNs 6758-6823
47 Witness Statement – 7 May 2018, Exhibit 39; Oral Evidence - Transcript 5 July 2018, PNs 5046-5287
48 Witness Statement – 10 May 2018, Exhibit 45; Oral Evidence – Transcript 6 July 2018, PNs 6393-6572
49 Witness Statement – 9 May 2018, Exhibit 46; Oral Evidence – Transcript 6 July 2018, PNs6581-6733
50 Witness Statement – 8 May 2018, Exhibit 53; Oral Evidence – Transcript 9 July 2018, PNs6829-7060
51 Witness Statement – undated, Exhibit 53; Oral Evidence – Transcript 9 July 2018, PNs7067-7165
52 Witness Statement – undated, Exhibit 54; Oral Evidence – Transcript 9 July 2018, PNs7201-7433
53 Witness Statement – 11 May 2018, Exhibit 41; Oral Evidence – Transcript 5 July 2018, PNs5291-5563
54 Witness Statement – 17 May 2018, Exhibit 42; Oral Evidence – Transcript 6 July 2018, PNs5593-5784
55 Witness Statement – 17 May 2018, Exhibit 43; Oral Evidence – Transcript 6 July 2018, PNs5789-5901, 5945-6056
56 Witness Statement – 10 May 2018, Exhibit 44; Oral Evidence – Transcript 6 July 2018, PNs6064-6321
57 [2017] FWCFB 3541 at [520]-[522], [525]-[528], [535]
58 Exhibit 38 paras 26-32
59 Exhibit 36 paras 27-32
60 Exhibit 49 paras 21-24
61 Exhibit 51 paras 18-19
62 See eg. Exhibit 34 para 14
63 [2017] FWCFB 1001 at [460]
64 See C Jimenez and D Rozenbenes, Research Report 1/2017 – Award-reliant workers in the household income distribution, published by the Commission in February 2017, at Table 4.
65 See Annual Wage Review 2016-17 [2017] FWCFB 3500 at [369]-[370]
66 Statistical report – Annual Wage Review 2018-19, Fair Work Commission website, Table 8.2 p.38
67 Exhibit 34 para 34, Exhibit 54 paras 32-33
68 Transcript 4 July 2018, PNs 3081-3087
69 Exhibit 38, paras 17-19
70 Exhibit 36 para 21
71 Exhibit 49 paras 11-14
72 Exhibit 51 para 12
73 Exhibit 35 para 21
74 Exhibit 34 para 32
75 See e.g. Exhibit 34 para 33
76 [2014] FWCFB 1996
77 Ibid at [141]
78 Australian and New Zealand Standard Industrial Classification
79 [2017] FWCFB 1001 at [1004]
80 Ibid at [969]-[978]
81 [2017] FWCFB 1001 at [779]
82 Transcript 4 July 2018, PNs 3089-3093
83 Transcript 4 July 2018, PNs 3101-3126
84 Transcript 4 July 2018, PN 3136
85 Exhibit 54 para 31
86 Exhibit 44 paras 10-11
87 Exhibit 52 paras 13, 16
88 Exhibit 54 para 26
89 Exhibit 1 Annexure 6
90 Exhibit 26 paras 56-57
91 [2017] FWCFB 3541
92 Ibid at [516]-[517]
93 Ibid at [520]-[521]
94 Ibid at [523]-[535]
95 Ibid at [471]-[472]
96 Transcript 4 July 2018, PNs 2840-2844, 3094-3098
97 Exhibit 44 para 12
98 Exhibit 44 para 13
99 Exhibit 35 para 30
100 Exhibit 34 paras 28-30
101 Exhibit 19 paras 14-17, 29
102 Transcript 12 April 2016, PN26729
103 [2017] FWCFB 1001 at [689]
104 See 4 yearly review of modern awards - Family and Domestic Violence Leave[2018] FWCFB 1691 at [296]
105 [2018] FWCFB 4116
106 [2017] FWCFB 3001
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