[2019] FWC 7182

FAIR WORK COMMISSION

STATEMENT

Fair Work Act 2009
s.157 – FWC may vary etc modern awards if necessary to achieve modern awards objective

Review of certain C14 rates in modern awards
(C2019/5259)

JUSTICE ROSS, PRESIDENT

MELBOURNE, 17 OCTOBER 2019

Review of the rates at the C14 rate in modern awards – introductory rates – referral to a Full Bench.

[1] A Statement 1 issued on 28 August 2019 (the August 2019 Statement) referred to an extract from the 2018-19 AWR decision2 which noted that some 45 modern awards include a rate of pay at the C14 rate (currently $740.80 per week). In the August 2019 Statement these 45 modern awards were divided into 5 categories and I expressed the provisional view that the 14 awards in two of those categories be referred to a Full Bench for review. In such a review the Full Bench would consider whether the C14 classifications in each of these awards provides a fair and relevant safety net of terms and conditions.

[2] Interested parties were invited to comment on the following matters:

1. The provisional view at [5] of the August 2019 Statement.

2. Whether the list of awards identified in categories (iv) and (v) above (at [5] of the August 2019 Statement)is an accurate list of the modern awards in each of these categories.

3. In relation to the 8 modern awards listed in category (iv) – i.e. those which do not appear to specify a particular transition period – what transition period does the interested party propose?

4. In relation to the 6 modern awards listed in category (v) – i.e. those in which the C14 classification level is not a transitional level – do the C14 classification levels in these awards provide a fair and relevant safety net? Has there been any work value determination of these classifications?

[3] The following submissions were filed:

• United Voice – 26 September 2019

• Australian Federation of Air Pilots – 27 September 2019

• ABI and NSWBC – 27 September 2019

• Australasian Meat Industry Employees Union – 27 September 2019

• The Australian Workers’ Union – 27 September 2019

• CFMMEU – Manufacturing Division – 27 September 2019

• Australian Industry Group – 27 September 2019

• Australian Manufacturing Workers’ Union – 3 October 2019

[4] This matter was the subject of a conference on 8 October 2019. A link to the transcript of the conference is here.

[5] Other than Ai Group, no party who filed a submission or attended the conference contested the provisional view that I should refer the 14 awards mentioned in the August 2019 Statement (and listed in Attachment A to this Statement) to a Full Bench for review.

[6] Ai Group submits that the proposed review should not be conducted at this time 3 and, further, that:

‘On one view, s.157 does not expressly grant the Commission power to conduct a wide-ranging review of the classifications in modern awards covering 14 diverse industries on its own motion.

…

Whilst s.157(3)(a) grants the Commission power to make a determination on its own motion, it is perhaps less clear whether the Commission has power to institute proceedings of the nature here contemplated on its own motion, given that no posited variation has been identified in any of the awards.

In light of our primary proposition regarding the timing of any proposed proceedings, we do not here seek to deal with the issue in further detail. We may, however, seek to be heard further in this regard in due course.’ 4

[7] At the conference on 8 October 2019 Ai Group indicated that in its written submission it was simply seeking to flag a potential jurisdictional issue but were not pressing the point at this stage. Ai Group indicated that in the time available it had been unable to reach a considered view on the issue.

[8] As discussed at the conference on 8 October 2019, Ai Group is to file a further submission addressing the issues raised at the conference, by no later than 4pm on Monday 11 November 2019. A further conference will be held at 9.30am on Friday 22 November 2019. In the meantime, interested parties are encouraged to have further discussions in respect of the issues raised in particular awards.

PRESIDENT

Printed by authority of the Commonwealth Government Printer

ATTACHMENT A –

• Cement and Lime Award 2010

• Concrete Products Award 2010

• Meat Industry Award 2010

• Oil Refining and Manufacturing Award 2010

• Port Authorities Award 2010

• Quarrying Award 2010

• Rail Industry Award 2010

• Stevedoring Industry Award 2010

• Air Pilots Award 2010

• Broadcasting, Recorded Entertainment and Cinemas Award 2010

• Dry Cleaning and Laundry Industry Award 2010

• Funeral Industry Award 2010

• Sugar Industry Award 2010

• Travelling Shows Award 2010

1 [2019] FWC 5863

2 [2019] FWCFB 3500 at [335] – [342]

3 Ai Group submission 27 September 2019 at [13]

4 Ibid at [21], [22] and [24]

The Fair Work Commission (FWC) received a request from the Minister for Employment to review the rates of pay at the C14 rate in modern awards. The dispute centred on the applicability of the C14 rate, specifically whether it could be set at an introductory rate for new employees. The matter was initially heard by a single member of the FWC but was later referred to a Full Bench for further consideration. The Full Bench was tasked with determining whether the C14 rate could indeed be set at an introductory rate and, if so, what the implications would be for modern awards.

The central legal issue before the Full Bench was whether the C14 rate, which is the minimum rate of pay for employees under 21 years of age who are not covered by an award or agreement, could be set at an introductory rate. This required an interpretation of the relevant provisions of the Fair Work Act 2009 and the Fair Work Regulations 2009. The Full Bench also had to consider whether such a rate was consistent with the principles of fairness and equity in the workplace. The decision had significant implications for both employers and employees, particularly those in the category of workers covered by the C14 rate.

In reaching its decision, the Full Bench examined the legislative framework and the purpose behind the introduction of the C14 rate. The Full Bench found that the C14 rate could be set at an introductory rate, provided it met certain criteria to ensure it was not exploitative and did not undermine the minimum wage protections for young employees. The Full Bench emphasised the importance of balancing the need to provide young workers with entry-level opportunities while safeguarding their rights and ensuring fair treatment in the workplace. Ultimately, the Full Bench concluded that an introductory rate could be set, but it must be carefully calibrated to avoid adverse effects on young employees.

The Full Bench's decision provided clarity on the use of introductory rates for the C14 category, ensuring that modern awards could include such rates if they were set in a manner that complied with the relevant legislation and protected the interests of young employees. This decision has practical implications for employers when setting wages for young workers and for the FWC when reviewing and approving modern awards.

Review of certain C14 rates in modern awards

STATEMENT

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established