Restaurant and Caterers Employers Association of Queensland Industrial Organisation of Employers v Liquor, Hospitality and Miscellaneous Union
[2010] FWA 7524
•26 OCTOBER 2010
Note: An appeal pursuant to s.604 (C2010/5481) was lodged against this decision - refer to Full Bench decision dated 3 March 2011 [[2011] FWAFB 1391] for result of appeal.
[2010] FWA 7524 |
|
DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Item 7 Sch. 3—Variation of transitional instrument
Restaurant and Caterers Employers Association of Queensland Industrial Organisation of Employers
v
Liquor, Hospitality and Miscellaneous Union
(C2010/4579)
COMMISSIONER SIMPSON | BRISBANE, 26 OCTOBER 2010 |
Modern Award transitional percentage - penalty rates for casual employees transitioning from the Hospitality Industry - Restaurant, Catering and Allied Establishments Award - South-Eastern Division 2002 - no jurisdiction - application dismissed.
[1] This is an Application by the Restaurant and Caterers’ Association of Queensland Industrial Organisation of Employers (“the Applicant”) pursuant to Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (“TPCA Act”). The relief sought in the Application was set out in the following terms.
“Statement by Fair Work Australia to confirm the Modern Award transitional percentage and phasing in of penalty rates for casual employees transitioning from the Hospitality Industry - Restaurant, Catering and Allied Establishments Award - South - Eastern Division 2002 and associated transitional instruments.”
[2] The Application named the Liquor Hospitality and Miscellaneous Workers Union (“the Respondent”) as a respondent to the application.
[3] The grounds as stated in the application included:
“ ..........
To give effect to the transitional instruments derived from Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009.
To give effect to the Award Modernisation Decision (transitional arrangements) [2009] AIRCFB 800 2 September 2009 and [2009] AIRCFB 942 3 December 2009.
To give effect to Schedule A Transitional Provisions in the Restaurant Industry Award 2010 and the Hospitality Industry (General) Award 2010.”
[4] The matter was listed for Mention on Monday 30 August 2010. A further listing for Mention occurred on Monday 27 September 2010. At that Mention it was agreed by both the Applicant and the Respondent that the Application be dealt with on the papers. A directions order was issued requiring that both parties file submissions and any further relevant material in Fair Work Australia by Tuesday 5 October 2010.
[5] At the Mention on the 27 September I sought to clarify specifically the item in Schedule 3 of the TPCA Act that the Applicant believed Fair Work Australia had jurisdiction to deal with the application under.
“....That’s this question of an argument that there’s an ambiguity. Look, I’ve got to say, looking at the application, it appears to me that’s really what you’re asking the tribunal to turn its mind to.
Yes. We looked at that and then we thought we probably should make the application under item 7, because the transitional instruments, because they had ceased to apply - and I think the full bench is looking at the termination of those instruments, as well, as a separate matter. We thought that rather than trying to, you know, vary those instruments when they were so close to being terminated, it was probably best to make the application principally under item 7, and that’s what we discussed at the last mention. Are you there?
Yes, I am. I’m just looking at item 7 now. So how is it you say that I have jurisdiction to make a determination about item 7.
Well, we look at that item and we believe that because we’re making the application now before the instruments are terminated, it does give the tribunal the power, you know, to give a remedy. Now, what shape that remedy forms - we believe it could be a statement or a decision or whatever you decide to do as a result of hearing from the parties, but we believe that item gives you the power, or the tribunal the power, to do what we’re seeking without having to vary the actual instrument. 1“
[6] The relevant provisions in this matter in the Hospitality Industry - Restaurant, Catering and Allied Establishments Award - South - Eastern Division 2002 are as follows:
4.3 Casual employment
...
4.3.3 These loadings are payable separately and are not to be compounded:
(a) 23% for all ordinary hours worked;
(b) 73% where the rate of pay is prescribed as time and a-half,
(c) 123% where the rate of pay prescribed as double time; and
(d) 173% where the rate of pay is prescribed as double time and a-half.
6.5 Week-end work
Employees, other than casuals, shall be paid for all time worked within their ordinary working hours on a Saturday or Sunday at the rate of time and a-half.
[7] The purpose of the Application was directed at resolving an issue concerning how casual loading is required to be paid under the transitional provisions contained within the Modern Restaurant Industry Award 2010 and the Modern Hospitality (General) Award 2010 for employees previously employed under the Hospitality Industry - Restaurant, Catering and Allied Establishments Award - South - Eastern Division 2002 [AN140144].
APPLICANTS SUBMISSION
[8] In its submission the Applicant set out the legislative framework underpinning award modernisation. The Applicant set out that the Hospitality Industry - Restaurant, Catering and Allied Establishments Award South Eastern Division 2002 (“transitional instrument”) is a Notional Agreement Preserving State Award (NAPSA) and a transitional instrument under Schedule 3 of the TPCA Act and that it was superseded by the Modern Restaurant Industry Award 2010 and the Modern Hospitality (General) Award 2010.
[9] The Applicant sought a remedy from Fair Work Australia pursuant to Schedule 3 Item 7. That item reads as follows:
7 No loss of accrued rights or liabilities when transitional instrument terminates or ceases to apply:
(1) If a transitional instrument terminates, or ceases to apply in relation to a person, that does not affect:
(a) any right or liability that a person acquired, accrued or incurred before the transitional instrument terminated or ceased to apply; or
(b) any investigation, legal proceeding or remedy in respect of any such right or liability.
(2) Any such investigation, legal proceeding or remedy may be instituted, continued or enforced as if the transitional instrument had not terminated or ceased to apply.
(3) This item has effect subject to a contrary intention in this Act or in the FW Act.
[10] It was the Applicants primarily submission that FWA had the power to make a Statement of Decision under this item in Schedule 3 providing that weekend penalty rates should be phased in for casuals under the respective modern awards.
[11] In the alternative the Applicant submitted that FWA may apply the provisions of Schedule 3 item 10 which states:
10 All kinds of transitional instrument: variation to remove ambiguities etc.
(1) On application by a person covered by a transitional instrument, FWA may make a determination varying the instrument:
(a) to remove an ambiguity or uncertainty in the instrument; or
(b) to resolve an uncertainty or difficulty relating to the interaction between the instrument and a modern award; or
(c) to remove terms that are inconsistent with Part 3-1 of the FW Act (which deals with general protections), or to vary terms to make them consistent with that Part.
Note: For variation of a transitional instrument to resolve an uncertainty or difficulty relating to the interaction between the instrument and the National Employment Standards, see item 26.
(2) A variation of a transitional instrument operates from the day specified in the determination, which may be a day before the determination is made.
[12] In its submission the Applicant made reference to proceedings in the Queensland Industrial Relations Commission in 1996 and provided excerpts of transcript at the time regarding the making of the Award. It also made reference to a Queensland Industrial Relations Commission Full Bench decision on 3 April 2001 in respect of casual loading that resulted in Queensland state awards being varied from a 19% casual loading to a 23% casual loading.
[13] The Applicant in its submission also drew attention to the Stage 4 Award Modernisation consultations before a Full Bench of the Australian Industrial Relations Commission on 4 November 2009 and exchanges on transcript between representatives of the industry and members of the Full Bench concerning the interpretation of clause 4.3 and 6.5 of the transitional instrumenttosay that the matter was left unresolved by the Full Bench.
[14] Further the Applicant advised in its submission that following the decision of the Award Modernisation Full Bench to provide for weekend penalty rates for casual employees under the Modern Restaurant Industry Award 2010 and the Modern Hospitality Industry (General) Award 2010 it became an issue for the Applicant and its members in calculating the phased transitional rates from the transitional instrument.
[15] With reference to Schedule A of the respective Modern Awards the Applicant produced a table to highlight what it believed to be the correct phased in rates applicable under the transitional provisions in the two Modern Awards.
[16] The Applicant states that the calculations it prepared were confirmed as being correct by the Fair Work Ombudsman in correspondence dated 19 August 2010. The Applicant provided the Tribunal with a copy of that correspondence. The signatory to the letter provided only includes a first name. In short the letter indicates that the Fair Work Ombudsman believed the calculations as provided by the Applicant were correct.
[17] The Applicant provided the Respondent with its calculations on 24 August 2010 and the Respondent in correspondence dates 26 August 2010 advised the Applicant it disagreed with those calculations.
RESPONDENTS SUBMISSION
[18] The respondent submits that the application is ambiguous and misconceived. The Respondent submitted that the Applicant had capacity to bring a competent application in one of the following forms:
1. Application to vary a transitional instrument under item 10 of schedule 3 of the TPCA Act,
2. Application to vary the modern award under section 160 of the Fair Work Act 2009,
3. Interpretation of an industrial instrument in a court of competent jurisdiction, such as the Federal Court of Australia.
[19] In the alternative the matter could be tested by the Respondent bringing wage complaints against various employers. Notwithstanding its view that the application should be struck out the Respondent addressed the substance of the application.
[20] The Respondent submitted that casuals are entitled to weekend penalty rates in accordance with clause 4.3.3 of the transitional instrument.
[21] The Respondent submitted that interpretation of clause 6.5 and its relationship with clause 4.3.3 was raised during the award modernisation consultation process and that the Full Bench of the Australian Industrial Relations Commission confirmed the Respondents interpretation, or in the alternative at least the Full Benches dicta on that point is a relevant consideration.
[22] The Respondent provided as an attachment to its submission transcript of the proceedings. The Respondent drew particular attention to the following parts of that transcript:
Mr Hart ... Restaurant and Catering Australia argues that any modern workplace attempting to meet the conflicting demands of consumer trading hours and expectations an employee’s needs for work and family balance should not pay penalty rates outside those hours. Restaurant and Catering Australia acknowledges that our proposal in relation to penalty rates and overtime did adopt a different approach to other awards. The association defends this approach on the basis that the variation from the Minister did call for the Commission to establish a penalty rate and overtime regime that appropriately recognise the restaurant and catering industries core trading and the labour intensive nature of the work in the industry.
It did not call on the Commission to establish a penalty rate and overtime regime that appropriate recognised current awards that cover industries in similar sectors. Restaurant and Catering Australia supports the concern expressed by the two south-east Queensland restaurants in their 16 October submissions that the Commission seemed to have accepted the LHMUs evidence on the treatment of casual employees under the South-east Queensland Restaurant Award. If this evidence was significant in the Commission’s decision regarding weekend penalties then the decision needs to be reassessed as the statement in the submission suggested that the NAPSA excluded casual employees from weekend penalties. Their submission was incorrect in that regard.....
SDP Watson - Mr Hart, is that a correct reading of the South Eastern Division Award having regard to clause 4.3 of that award?....
Mr Hart: -Well, we believe that the award does not allow for penalty rates for casuals on weekends and that the analysis in the decision was not correct and the submission was not correct.
SDP Watson:-Well, clause 4.3.2 of that award provides for the payment of casuals of the appropriate full time rate with the addition of appropriate loadings as prescribed in clause 4.3.3.
SDP Watson: -(b) indicates73 per cent where the rate of pay is prescribed as time and a half. Doesn’t that suggest that the table in the statement was correct?
Mr Hart: -Well, the advice I received is the statement was not correct. I am happy to go back and have a look at it again, your Honour.
SDP Watson: - Yes, so it’s clause 4.3.
Mr Hart: 4.3, thank you. If we can turn to evening allowances then, your Honour, Restaurant and Catering Australia acknowledges that.... 2.
[23] A further section of transcript from the Full Bench was referred to as follows;
Mr Foy: I would be surprised at that. One point I would like to clarify, in regards the error that was pointed out by the Restaurant and Caterers Association in the information that was provided to you about the penalty rates paid to casual staff on weekends in south-east Queensland. I refer to the South East Queensland Restaurant and Caterers Award. This is AN140144. Section 6.5 it excludes casuals from penalties on weekends. The information that was provided that there was 173 per cent penalty rates paid to casuals on Saturdays and Sundays by our reckoning is incorrect.
SDP Watson: Clause 6.5 provides a time and a half rate for employees other than casuals but don’t you have to go to clause 4.3 to see what you have to pay casuals at various times including 73 per cent loading where the rate of pay for the full time employee is time and a half?
Mr Foy: Full time employees do get that penalty rate.
SDP Watson: But clause 4.3 deals with casual employment and prescribes a rate of 73 per cent penalty where full time employees receive time and a half, does it not?
Mr Foy: Well, my understanding is that section 6.5 excludes casuals from penalty rates.
SDP Watson: Section 6.5 is a provision dealing with full time employees but you have to go to clause 4.3, do you not, to find out what has to be paid to casual employees under the award?
Mr Foy: We are referring to the same award? Yes.
SDP Watson: We are, AN140144. Do we have the Award there?
Justice Giudice: Mr Foy, I don’t think there’s any need for us to take up time on this particular issue. It’s something you can check and if you want to say something about it later by all means do, but I think the basis for the figure in the exposure draft has been explained.
Mr Foy: All right, your Honour, thank you.
Justice Giudice: And if there’s further controversy about it you can let us know today or some other time.
Mr Foy: I will indeed.
Justice Giudice: Yes.
[24] Finally the Respondents made reference to submissions from the Union in the same matter.
Mr Swancott: Your Honour. The LHMU filed a written submission in relation to this exposure draft. In that written submission we concentrated on two matters only and we did so on the basis that we acknowledged that the Commission had revisited previous decisions it had made on the basis that the amendment to the Request made by the Minister, that it had, if I can be presumptuous and say a difficult job to do in the circumstances. And while we were not ecstatic about some of the content of the exposure draft we saw it as a balance. The two matters that we dealt with in our written submission went more to matters of principle than they did to aggregate levels if you like of allowances or payments. And I don’t intend to go into detail but simply to remind the Bench of our areas of concerns.
The first dealt with the public holidays test case decision and the appropriate treatment of casual employees who are required to work on public holidays. The second dealt with late evening penalty payments. And while the first dealt with, in our submission, a firm and decided Commission principle the second we acknowledge deals with a discretionary or averaging approach, but we commend to the Commission an alternate approach to the one that was arrived at in the exposure draft. Your Honours heard from Mr Hoy from Morgan’s Seafood and the controversy concerning the rate of pay or the rate of payment of casual employees in south east Queensland on weekends.
Your Honours, I should explain that the LHMU in preparing its written submissions started from the extremely good work done by the Commission’s registry in the research page where the essential components of clause 4.3.3 of the south east Queensland award are set out in the table prepared by the registry more than a year ago for restaurant employees in the manner that they are subsequently set out in LHMU’s submissions and carried over into the exposure draft. So if we are wrong in our interpretation in the south east Queensland award we are in good company. And I hand up for the Full Bench a document published by the Queensland Government’s unit called Wageline which sets out a summary of award requirements in relation to the Hospitality Industry, Restaurant, Catering and Allied Establishments Award South East Division 2002, which is the relevant award.
If I could take your Honours to page 2 of the document on the left hand side the heading Casual, it sets out there the essential elements and makes a reference to clause 4.3 as the payments required for casual employees by employers covered by the award. Now, your Honour, I don’t claim to be the final arbiter of the meaning of the various clauses of the award but we actually don’t see an ambiguity in the clauses although we are aware that a number of restaurants in south east Queensland operate by reference to clause 6.5 of that award and without any reference at all to clauses 4.3. I think that’s a matter upon which they may need to get further legal advice, but suffice to say that if it is the case that casual employees receive no supplementary payment for work on Sundays in restaurants in south east Queensland, well, we say that that’s contrary to the principles of this Commission, it’s contrary to the principles of most other state Commissions and it shouldn’t be followed as a precedent. 3
CONSIDERATION
[25] It is to the credit of the Applicant that they are making an effort to seek to bring some finality to how it is that they can correctly go about advising their members on the way to comply with the Modern Restaurant Industry Award 2010 and the Modern Hospitality (General) Award 2010 and the transitional provisions within those awards.
[26] The Applicant has sought to argue that the transitional award should be interpreted in a particular manner and has sought to make that argument previously before the Full Bench of the AIRC in the Award Modernisation consultations. The Full Bench did not make a ruling on the interpretation of the clauses within the Hospitality Industry - Restaurant, Catering and Allied Establishments Award - South - Eastern Division 2002 as that was not the issue before the Full Bench. However the transcript indicates at least one member of the Full Bench was indicating at the time concerns about the interpretation as put by the Restaurant and Caterers’ Association and another employer.
[27] This application is evidence that the parties continue to interpret the transitional instrument differently.
[28] The Respondent has argued that the application before me now is not the appropriate mechanism to achieve the objective of the Applicant. I believe that submission has merit.
[29] I do not believe Schedule 3 Item 7 of the TPCA Act was intended to be a vehicle for interpreting clauses within transitional instruments. The item is an explanatory provision that preserves rights and liabilities however it is not a provision of power for the Tribunal to amend or interpret a transitional instrument.
[30] I also believe I do not have jurisdiction to deal with the application under Schedule 3 item 10. It is my clear view that no ambiguity, uncertainty or difficulty exists in the transitional instrument to give rise to the jurisdiction to make a determination to vary the transitional instrument.
[31] Uncertainty clearly still exists within the membership of the Applicant, and perhaps more broadly amongst employers who were previously covered by the transitional instrument regarding the appropriate rates of pay for casual employees who are now covered by the two modern awards. This I believe has the potential to lead to industrial disruption.
[32] For those reasons I have decided to make a general comment about clause 4.33 and clause 6.5 to explain why I believe no ambiguity, uncertainty or difficulty exists that might give rise to jurisdiction to vary the transitional instrument. These comments are not findings of law or fact regarding interpretation of the transitional instrument but could be of assistance to the parties.
[33] I did not find the QIRC transcript referred to by the Applicant at the time of the making of what is now the transitional instrument as persuasive that it was intended at the time that casuals be paid only standard casual loading (whether that be 19% or later 23% as it pertained at the particular point in time) when working on weekends.
[34] The Applicant also drew attention in its submission to a QIRC Full Bench decision that casual loading was never intended to be compounded on top of weekend penalties. However the Applicant has not provided what I would see as convincing material that in either of the QIRC proceedings or decisions it has referred to that it was the intention of the QIRC that the Award would only provide for a loading of 19% or later 23% for casuals on weekends.
[35] It appears to me that the rates of pay applicable for casuals under the award were expressly dealt with in clause 4.6 of the Award as it was as at the making of the Award as from 10 January 1997. 4 Clause 4.6 of the Award was to later become clause 4.3.
[36] The entitlements set out in clause 4.3.3 of the Award as I read them are not intended to be compounded on top of weekend rates as the clause expressly on its own terms deals with the question of what the appropriate rate of pay for a casual employee is in circumstances where a rate of time and one half applies, a rate of double time applies, or a rate of double time and one half applies under the award. Clause 4.3.3 provides specifically for the appropriate rate of pay for circumstances where a penalty would otherwise apply such as provided for in clause 6.5 Week-end work.
[37] It seems reasonably clear that clause 6.5 has no work to do in regard to casual employees because the applicable rate of pay for casual employee has already been dealt with in the award at clause 4.3.
[38] Clause 6.5 it seems is directed to the rate of pay for permanent employee’s not casual employees. On that basis it would appear there would be good reason to believe that the advice in the correspondence provided by the Fair Work Ombudsman dated 19 August 2010 is not correct. It is often the case and I suspect so in this instance that the Fair Work Ombudsmen has not had the benefit of the material put before me by the parties in this application. It is with the benefit of that material that I have made those comments.
[39] Having made those comments the substantive question regarding interpretation has not been tested at law and unless or until that occurs parties should exercise caution in implementing this commentary.
CONCLUSION
[40] For the reasons set out above I have decided the application must be dismissed for want of jurisdiction under either Schedule 3 item 7 or Schedule 3 item 10 of the TPCA Act.
COMMISSIONER
1 Transcript PN11-14
2 Transcript AM2008/24 and others Wednesday 4 November 2009 PN2350 - 2359
3 Transcript AM2008/24 and others Wednesday 4 November 2009 PN2517 - 2520
4 Applicants Submission Attachment 1
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