The Australian Workers' Union v Australian Trainers' Association
[2009] FWA 418
•9 October 2009
[2009] FWA 418 |
|
DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Part 3, Item 12 - Application to vary pre-reform or transitional award
v
Australian Trainers' Association
(C2009/10058)
HORSE TRAINING INDUSTRY AWARD 1998
(ODN C NO. 3039 of 1975) [AP783476CRV]
HORSE TRAINING INDUSTRY AWARD 1998 [TRANSITIONAL]
(ODN C NO. 3039 OF 1975) [AT783476CRV]
Industries not otherwise assigned | |
COMMISSIONER LEWIN | MELBOURNE, 9 OCTOBER 2009 |
Application to vary the Horse Training Industry Award 1998 and the Horse Training Industry Transitional Award 1998 – ordinary hours – date of operation.
[1] This decision concerns applications by The Australian Workers’ Union (the AWU) to vary the Horse Training Industry Award 1998 and the Horse Training Industry Transitional Award 1998.
[2] The applications seek to vary the awards by providing that the ordinary hours of work as prescribed by each shall be 38 per week. The awards currently provide that the ordinary hours of work shall be 40 per week. The awards also provide that work performed in addition to the ordinary hours of work in excess of or outside the ordinary hours as prescribed shall be paid for at overtime rates.
[3] The relevant clauses are set out below.
“18. HOURS OF WORK
18.1 The ordinary hours of work for all employees shall be 40 hours per week to be worked within rostered hours in five full days, or four full days and two half days, Monday to Saturday.
18.2 No employee shall be required to work after twelve noon as part of the ordinary hours in any week on the two days rostered as the employee’s two half-days off during any particular working week.
18.3 A roster setting out the five days or the four days and two half-days to be worked in any one week, Monday to Saturday, by each employee shall be posted up on Monday of the preceding week.
18.4 By arrangement with the employer, stablehands may agree to change their rostered half-days off in any week.
19. OVERTIME
19.1 Reasonable overtime
19.1.1 Subject to clause 19.1.2 an employer may require an employee to work reasonable overtime at overtime rates.
19.1.2 An employee may refuse to work overtime in circumstances where the working of such overtime would result in the employee working hours which are unreasonable having regard to:
19.1.2(a) any risk to employee health and safety;
19.1.2(b) the employee’s personal circumstances including any family responsibilities;
19.1.2(c) the needs of the workplace or enterprise.
19.1.2(d) the notice (if any) given by the employer of the overtime and by the employee of his or her intention to refuse it; and
19.1.2(e) any other relevant matter.
19.2 All work performed in excess of or outside the ordinary hours prescribed by clause 18 - Hours of work, of this award shall be paid at the rate of one and a half times of the employee’s normal rate of pay for the first three hours of overtime and twice the normal rate of pay for the rest of the overtime.
19.3 An employee required to work on a Sunday shall be paid for all such work at double rates with a minimum of three hours.
19.4 Time off in lieu
In lieu of receiving payment for overtime, the employee may elect to take time off. The overtime payment otherwise payable to the employee shall be reduced by an amount calculated at the ordinary time rate of pay for the duration of any period the employee elects to be and is absent.
19.5 Stand by
An employee directed to stand by in readiness to work outside the normal duties or to do watch keeping or guard duties outside the ordinary working hours shall, until released, be paid at overtime rates for all time so engaged.”
[4] The applications were filed on 9 July 2009 and on 10 July 2009 and were originally assigned to Senior Deputy President Lacy. For reasons which are relevant and explained below, Senior Deputy President Lacy was unable to deal with the applications in the usual way. Consequently, the applications were allocated to me and were received in my chambers on 19 August 2009. On that day I listed the matter for hearing on 10 September 2009 at 10.00 am. At 12.51 pm on 9 September 2009 I received the following communication from the Australian Trainers Association (the ATA).
“We are instructed that yesterday, Mr John Alducci, CEO of the ATA was informed that the Australian Workers’ Union had filed an application to vary the Horse Training Industry Award 1998 and the Horse Training Industry Award 1998 [Transitional] (the Awards) (the Application). In particular, the Application seeks to vary the ordinary hours of work contained in the Awards.
We refer to your email which we received this morning, which attached a copy of the Application. We note the Application was filed with Fair Work Australia on 9 July 2009, and that it is listed for hearing before Commissioner Lewin at Fair Work Australia tomorrow.
We advise that pursuant to clause 7 of the awards, the parties bound by the Awards include the AWU and its officers and members and, the ATA and its members and employers who have some business in the horse training industry.
As the ATA is a party to the Award, and further, as any decision in respect of the Application will affect the members of the ATA and employers in the horse training industry, it is essential that the ATA be present at the hearing of the Application.
In order to provide the ATA with sufficient opportunity to consider the Application and obtain appropriate legal advice, we are instructed to request that Commissioner Lewin adjourn the hearing of the Application for a period of at least 7 days.”
[5] The application for adjournment was granted and the matter was listed for hearing on 18 September. At the hearing on 18 September Mr T Costa appeared for the AWU and Mr S Harris and Mr J Alducci appeared for the ATA. At the hearing the ATA stated that it did not object to the variations sought but wished to put submissions in relation to the operative date of the variations. The ATA and the AWU were afforded an opportunity to file written submissions in relation to the appropriate date of operation of the variations. Each filed such submissions and this process was completed on Monday 28 September 2009.
[6] Subsequently, when those written submissions were filed the ATA apparently changed its position by withdrawing the consent indicated on 18 September and opposing the variations sought. Although as will be seen below the submissions filed by the ATA contains contradictory terms which are fundamental to the issue to be determined.
[7] A written submission was filed by the Victorian Employers’ Chamber of Commerce and Industry (VECCI), which was served upon the parties and referred to at the hearing on 18 September in the following terms.
“The Victorian Employers’ Chamber of Commerce and Industry (“VECCI”) makes the following comments with respect to the draft order forwarded by facsimile on 10 September 2009.
In respect to clause 10.4.2 and 18.1 VECCI does not oppose the application.
The Workplace Relations Act 1996 dictates that an employer must not, require or request employees to work beyond an average of 38 hours per week. The Workplace Relations Regulations provides for a transitional period for transitional and common rule awards in Victoria that ended on the 26 March 2009.
VECCI does not oppose the variation as it will serve to remove any ambiguity between the Hours of Work in the Australian Fair Pay and Conditions Standard contained in the Workplace Relations Act 1996 and the Horse Training Industry Award 1998.
We note further that the National Employment Standards under the Fair Work Act 2009 and the Horse and Greyhound Training Award 2010 both dictate a 38 hour week.”
[8] The AWU submits that the variations are appropriate and that the date of the variations should be 27 March 2009. The ATA submits that if the variations are made, the date of operation of the variations should be 1 November 2009. The AWU submits that in the alternative to the date of 27 March 2009, the operative date of the variations should be 9 July 2009, the date upon which the application was filed.
[9] The AWU’s submissions deal with the relevant statutory provisions and it is convenient to extract the following parts of these submissions for the purposes of this decision.
“1. These submissions are made in reply to the Submissions of the Australian Trainers’ Association (ATA) filed on 25 September 2009. The submissions of the ATA were made in accordance with the directions of Commissioner Lewin on 18 September 2009 following the preliminary hearing of this matter.
2. Whilst appearing at Fair Work Australia (FWA) on 18 September 2009 the ATA expressed that it did not oppose the application of the AWU. The ATA requested leave to prepare submissions regarding the proposed operation date that is included in the draft orders prepared by the AWU. The ATA’s position was reiterated in paragraph 2 of their written submissions. The submissions of the ATA however are not consistent. Paragraph 2 of the written submissions and the oral submissions of the ATA are contradicted by paragraph 15 which requests that the AWU’s application be dismissed.
3. At the preliminary hearing the AWU provided extensive submissions in support of our application and we rely on those submissions. Should the ATA have legitimate concerns with our application these would have been more appropriately raised at the preliminary hearing. The failure of the ATA to do so has deprived the AWU of procedural fairness and contravenes the direction of Fair Work Australia directing the ATA to prepare submissions solely regarding the operation date of the application.
FWA Jurisdiction to Vary Pre-Reform Awards
4. The AWU’s application to vary the Awards was lodged on 9 July 2009 after the Workplace Relations Act 1996 (WRA) repeal day. Accordingly the Fair Work Act (Transitional Provisions and Consequential Amendments Act) 2009 (FW (TPCA) Act) governs the variation of the Awards. TheFW (TPCA) Act at Schedule 3, Part 3, item 9 provides:
“9 Transitional instruments can only be varied or terminated in limited circumstances
(1) A transitional instrument cannot be varied except under:
(a) a provision of this Part or the regulations; or
(b) item 26 (which deals with resolving difficulties with the interaction between transitional instruments and the National Employment Standards); or
(c) Part 2 of Schedule 5 (which deals with the WR Act award modernisation process); or
(d) Division 2 of Part 2 of Schedule 6 (which deals with the enterprise instrument modernisation process); or
(e) Schedule 8 (which deals with workplace agreements and workplace determinations made under the WR Act); or
(f) Schedule II (which deals with transfer of business); or
(g) Part 3 of Schedule 2 (which deals with conduct before the WR Act repeal day).”
5. Item 9 requires FWA to vary the Awards in accordance with provisions of Part 9 to the FW (TPCA) Act. Our application relies on two provisions under this part; they are Item 10 and Item 12 of Part 3 of Schedule 3 of the FW (TPCA) Act. Item 10 provides:
“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 modem 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.”
6. Item 12 of Part 3 of Schedule 3 of the FW (TPCA) Act empowers certain provisions of the WRA, the item states:
“12 Awards: continued application of WR Act provisions about variation and revocation
(1) Subject to this item, Divisions 5 (other than subsections 554(1) to (4)) and 6 of Part 10 of the WR Act continue to apply on and after the WR Act repeal day in relation to transitional instruments that are awards as if references to the Commission were instead references to FWA.
Note: Items 10 and 11 apply instead of subsections 554(1) to (4) of the WR Act.
(2) FWA must perform its powers and functions under Divisions 5 and 6 in a way that furthers the objects of Part 10 of the WR Act:”
7. The legislative requirements provide three grounds in support of our application:
“a) Section 552(1)(c) WRA “the variation is essential to the maintenance of minimum safety net entitlements;”
b) Section 552(1)(g) WRA the variation is made “in circumstances prescribed by the regulations;” and
c) Item 10, Schedule 3 of FW (TPCA) Act "to remove ambiguity or uncertainty.”
Maintenance of Minimum Safety Net Entitlements
8. In our application the AWU seeks to amend Clause 18.1 of the Awards which refers to “the ordinary hours of work.” Currently under clause 18 employees are required to work 40 ordinary hours a week. This does not include reasonable additional overtime as overtime is dealt with separately in the Awards at clause 19.
9. Item 2 of Part 2 of Schedule 4 of the FW (TPCA) Act provides for the continuation of certain minimum entitlements under the WRA for the period between the WRA repeal date and the commencement of the National Employment Standards (NES), the “Bridging Period.” Item 2 states:
“2 Continued application of the Australian Fair Pay and Conditions Standard leave and work hours provisions
Divisions 3, 4, 5 and 6 of Part 7 of the WR Act continue to apply during the bridging period.
Note 1: Part 7 of the WR Act contains the Australian Fair Pay and Conditions Standard. Part3 of Schedule 9 to this Act provides for the continued application of Division 2 of Part 7 (which deals with wages).
Note 2: Part 4 of Schedule 3 to this Act provides for the continued application of the rules about the interaction between transitional instruments and the Australian Fair Pay and Conditions Standard.”
10. The preservation of minimum entitlements under the WRA provides for the continued operation of Section 226 of the WRA which guarantees maximum ordinary hours of work of 38 hours a week to all employees, subject to the WRA Regulations. Section 226 provides:
“226 The guarantee
(1) An employee must not be required or requested by an employer to work more than:
(a) either:
(i) 38 hours per week; or
(ii) subject to subsection (3) . if the employee and the employer agree in writing that the employee's hours of work are to be averaged over a specified averaging period that is no longer than 12 months-an average of 38 hours per week over that averaging period; and
(b) reasonable additional hours.
Note 1: An employee and an employer may agree that the employee is to work less than 38 hours per week or less than an average of 38 hours per week over the employee's averaging period.
Note 2: A requirement for an employee to work a particular number of hours may come, for example, from an award or a workplace agreement.
(1A) An employer only contravenes subsection (1) if the employer requests or requires an employee to work more than the hours mentioned in subsection (1), and the employee works those hours.
Calculating the number of hours worked
(2) For the purposes of paragraph (1)(a), in calculating the number of hours that an employee has worked in a particular week, or the average number of hours that an employee has worked per week over an averaging period, the hours worked by the employee arc taken to include any hours of authorised leave taken by the employee during the week, or during that period.
Start of averaging period
(3) For the purpose of subparagraph (1 )(a)(ii), if an employee starts to work for an employer after the start of a particular averaging period that applies to the employee, that averaging period is taken in relation to the employee not to include the period before the employee started to work for the employer.
Reasonable additional hours
(4) For the purposes of paragraph (1)(b), in determining whether additional hours that an employee is required or requested by an employer to work additional reasonable additional hours, all relevant factors must be taken into account. Those factors may include but are not limited to, the following;
(a) any risk to the employee’s health and safety that might reasonably he expected to arise if the employee worked the additional hours;
(b) the employee’s personal circumstances (including family responsibilities);
(c) the operational requirements of the workplace or enterprise, in relation to which the employee is required or requested to work the additional hours;
(d) any notice given by the employer of the requirement or request that the employee work the additional hours;
(e) any notice given by the employee of the employee’s intention to refuse to work the additional hours;
(f) whether any of the additional hours are on a public holiday;
(g) the employee’s hours of work over the 4 weeks ending immediately before the employee is required or requested to work the additional hours.
Note: An employee and an employer may agree that the employee may take breaks during any additional hours worked by the employee.
Definition
(1) In this section:
“public holiday” means:
(a) a day declared by or under a law of a State or Territory to be observed generally within the State or Territory, or a region or that State or Territory as a public holiday by people who work in that State, Territory or region, other than:
(i) a union picnic day: or
(ii) a day or kind of day, that is excluded by regulations made for the purposes of this paragraph from counting as a public holiday: or a day that under (or in accordance with a procedure under) a law of a State or Territory, or an award or workplace agreement is substituted for a day referred to in paragraph (a).”
11. Although the Section 226 guarantee entitles all employees to a maximum of 38 ordinary hours work per week, the guarantee’s operation was postponed in regard to common rule and transitional awards in Victoria. The postponement is provided in Chapter 7, Regulation 2.4A of the WRA Regulations, however Regulation 2.4A ceased to have effect on 27 March 2009. Regulation 2.4A(3) came into operation on 27 March 2006 and states:
“2.4A Hours of work
(1) Division 3 of Part 7 of the Act (hours of work) does not apply to the employment of an employee while the employee’s employment is subject to a transitional award or a common rule.
(2) In subregulation (1):
common rule means a common rule that has effect because of Subdivision E of Division 1of Part 7 of Schedule 6 to the Act.
employee has the meaning given by section 858 of the Act.
employment has the meaning given by section 858 of the Act.
transitional award has the meaning given by clause 2 of Schedule 6 to the Act.
(3) Subregulation (1) ceases to have effect at the end of the period of 3 years that starts on the reform commencement:”
12. In accordance with Regulation 2.4A, Chapter 7, the 38 hour week guarantee now applies to award employees in Victoria. The guarantee is a minimum safety net entitlement and is expressed as such in the WRA. The legislative provision for a 38 hour week operates irrespective of the Awards provision at clause 18 for a 40 hour week. In Note 2 to Section 226 WRA, the Act explains that employers are prohibited from requiring their employees from working more than 38 ordinary hours a week through the operation of an award.
13. The AWU has had the opportunity to review the letter provided by the Fair Work Ombudsman (FWO) provided to Mr Wayne Lee of the ATA, dated 4 August 2009. The FWO letter concerns the operation of the 38 hour week guarantee in relation to awards that stipulate a 40 hour week. The FWO letter suggests that the 40 hour requirement in clause 18 of the Awards is the 38 hour minimum standard plus 2 hours reasonable additional “unpaid” overtime and therefore is a legal requirement. This is a false construction of the Awards. Clause 18 specifically refers to “ordinary hours” and is not expressed to include overtime. Overtime is provided for in the Awards at Clause 19 and all overtime is subject to penalty rates under this clause.
14. Further there is no provision included in the Awards that subjects the operation of the alleged reasonable additional “unpaid” overtime to the scrutiny of Section 226(4) of the WRA. In accordance with Section 226(4) employers must have regard to a number of relevant factors before they require their employees to work reasonable additional overtime. The requirement for a mandatory 2 additional hours a week does not allow for consideration of these factors.
15. The application to vary the Awards to implement the minimum safety net entitlement is consistent with the requirements of Section 553 of the WRA:
a) The variation is not inconsistent with a decision of the AFPC;
b) The variation would only provide minimum safety net entitlements consistent with the requirements under the WRA; and
c) The variation would not operate as a disincentive to agreement- making at the workplace level.
16. It is clear from the legislative instruments that an employer can not require an employee to do more than 38 hours a week as “ordinary hours” and as such this is a minimum safety net entitlement and should be formally recognised in the Awards.”
[10] The submissions of the ATA are as follows.
“Introduction - position of ATA
1. The Australian Trainers’ Association (“ATA”) makes these submissions in accordance with the directions of Fair Work Australia (Lewin C) of 18 September 2008, in relation to the AWU’s application to vary the Awards.
2. The ATA does not in principle oppose the Awards being varied to alter the ordinary hours of work from 40 to 38, but opposes the retrospective variation of them effective 27 March 2009 as sought by the AWU.
3. The ATA submits that the variation of the Awards should be prospective only, from 1 November 2009. This would:
• be consistent with the Workplace Relations Act 1996 (“WRA”) (see below);
• avoid an administrative nightmare and the spectre of industry-wide retrospective award breaches;
• give adequate notice to employers in the industry; and result in the new ordinary hours applying during the Spring Racing Carnival.
Relevance of WRA provisions
4. Relevant provisions of Divisions 5 and 6 of Part 10 of the WRA continue to apply on and after the WRA repeal day in relation to transitional awards as if references to the Commission were instead references to FWA: Schedule 3, item 12 to the Fair Work (Transitional Provisions and ConsequentialAmendments) Act 2009 (“FW (TPCA) Act”). Pre-reform awards are given continued existence after the WRA repeal as transitional awards by Schedule 3, item 2 to the FW (TPCA) Act. Schedule 6 to the WRA continues to apply on and after the WRA repeal day in accordance with Schedule 20 to the FW (TPCA) Act: Schedule 20, item 1 FW (TPCA) Act.
5. Section 226 of the WRA relevantly provided that an employee must not be required or requested by an employer to work more than 38 hours per week and "reasonable additional hours", with effect from 27 March 2006. In the case of common rule awards such as the Awards the subject of this application, s. 226 (as part of Division 3 of Part 7) did not apply to the Awards for three years after 27 March 2006: see regulation 2.4A of Chapter 7 of the Workplace RelationsRegulations 2006 (“WRR”).
6. This does not mean that somehow the 38 hour ordinary hours guarantee automatically came into force on 27 March 2009 for those employees covered by the Awards. Unless and until the Awards were varied, the 40 hour ordinary hours provisions in the Awards continue to apply. Section 5 I6(2) of the WRA provided in effect that despite the introduction of the Australian Fair Pay and Conditions Standard, an award could contain a term about ordinary time hours of work. The Awards contained such provisions in clause 18.1 of each Award, which provided that “ordinary hours of work for all employees shall be 40 hours per week”.
7. Subitem 33(2) of Schedule 3 to the FW (TPCA) Act provides definitively and decisively that “[i]f a transitional instrument that applies to [an] employee specifies, or provides for the determination of, the employee’s ordinary hours of work are as specified in, or determined in accordance with, that instrument.” This clearly over rides any possible effect of s. 226 WRA.
8. The fact that the Awards provided for 40 hours of ordinary hours per week would in itself conclusively demonstrate that, even if s.226 somehow overrode the Awards (which it certainly does not purport to do), the extra 2 hours above 38 would amount to “reasonable additional hours” within the meaning of s.226( I)(b) WRA.
Retrospective award variation – principles
9. In any event, awards can be varied only on the grounds or in the circumstances set out in s.552 WRA. None of those grounds or circumstances apply in the present case. For example, the variation sought by the AWU is not essential to the maintenance of minimum safety net entitlements (dealt with in Part 12 of the WRA): see s.552(1)(c) . Nor does it seek to remove an ambiguity or uncertainty: s.552(1)(d) read with s.554(1) (or more precisely with item 10 Schedule 3 of the FW (TPCA) Act). Accordingly, by force of s.552 WRA as applied by item 12 of Schedule 3 of the FW (TPCA) Act, FWA is expressly enjoined not to vary the Awards. For that reason alone, it should dismiss this application.
10. Further, awards should not be varied with retrospective effect except where there are exceptional circumstances to justify doing so: s.572(2) WRA. This is so because an order varying an award is an “award-related order” as referred to in that sub-section: see definition of “award-related order” in s. 4 WRA. The policy reason behind this legislative provision is obvious, as is that of the principle of statutory interpretation that legislation is not to be construed as retrospective unless the legislative intention to that effect “appears with reasonable certainty”, as this will “confer or impose or otherwise affect rights and liabilities which the law had defined by reference to the past events” Maxwell v Murphy (1957) 96 CLR 26 1 at 267 per Dixon CJ.
11. Persons order their affairs based on the law as it exists at the time of their actions. To retrospectively alter those legal obligations is, except in exceptional circumstances, completely unjust in relation to the individual and a recipe for a society in disarray, which is why the policy of the law is against retrospective variation or amendment.
Application of principles
12. There are no exceptional circumstances to warrant a retrospective variation here. The enactment of s.226 of the WRA and the three year non-application period with respect to common rule awards by virtue of reg. 2.4A of Chapter 7 of the WRR does not constitute such a circumstance. The clear purpose of that regulation is to allow a reasonable period for any necessary variations to transitional awards and common rules to be made. Any application to vary should have been made during that three year period. The variation now belatedly sought by the AWU does not become automatic, nor is it justified by “exceptional circumstances”, because that three year period has passed.
13. Further, if the 38 hour guarantee did apply automatically after the elapse of the three year period on 27 March 2009, as seems to be part of the AWU's argument, then there would be no need for a variation of the Awards. Rather, it would be a matter for award breach penalty claims in the appropriate Courts which would again highlight the injustice of the effective retrospective variation or alteration in the ordinary hours obligation, which was still thought to be 40, as provided by the Awards, even after 27 March 2009.
14. Finally, the National Employment Standards of the Fair Work Act 2009, referred to by the AWU in its application at paragraph 2, are irrelevant as theydo not come into force until 1 January 2010.
Conclusion
15. Even though the ATA has previously put its position that it did not oppose the application, only its operative date, it has now had an opportunity to fully consider the law, particularly the matters in paragraphs 4-8 of this submission. Accordingly, for the reasons set out above, the ATA now submits that the application to vary the Awards should be dismissed.
16. Further, the AWU has put, as its only basis for the application, that the 38 hour week came into operation by force of law on 29 March 2009.The variation was necessary to be consistent with that position and remove ambiguity and uncertainty in the industry.
By reason of the matters set out in paragraphs 4-8 of this submission, that basis of the application is unfounded. Since no other basis for the application has been advanced, the application should be dismissed.
17. In the alternative to each of the above, if FWA is minded to vary the Award, for the reasons set out in paragraphs 9- 11 of this submission, that variation should not be retrospective, particularly when the date sought by the AWU of 29 March 2009 has no relevance in law. The variation must be prospective and the ATA proposes, as it has done consistently, a date of operation of I November 2009.”
[11] It is clear from the above that the issues to be determined include various technical and legal dimensions concerning the operation of section 226 of the Workplace Relations Act 1996, the preservation of the operation of those provisions and interaction with other legislative provisions. In essence, in this respect, the AWU submits that the variations sought with effect from 27 March 2009 simply align the terms of the awards with the extant legal obligations of the employers covered by the awards, by force of the statutory provisions reflected in s.226 and their preservation. Collaterally, it is at least inferred by this submission that in order to comply with the relevant statutory provisions the Tribunal should bring the award into line therewith, by means of the variations sought, with effect from 27 March 2009.
[12] As the application was not filed until 9 July 2009 it would seem imperative for the AWU’s submission in relation to the effects of s.226 of the Workplace Relations Act 1996 to be accepted for the date of 27 March 2009 to be awarded. If the claimed legal effect of s.226 is to oblige the employers bound by the awards to pay their employees as if the awards prescribed that the “ordinary hours of work” were 38 hours per week, effective from 27 March 2009, the variations sought with effect from that date would not change the legal obligations of the employers. It might also then be reasonably submitted that not only would there be no prejudice to those employers but that it would be desirable to remove any ambiguity or uncertainty about those legal obligations by providing alignment between the provisions of the award and the legal effect of s.226 of the Workplace Relations Act 1996 and its preservation.
[13] As an arbitral and administrative authority, the Tribunal cannot make a legally effective determination of the obligations of the employers covered by the awards arising under s.226 of the Workplace Relations Act 1996 and related subsequent statutory enactments. Moreover, to my knowledge, no court of competent jurisdiction has dealt with the issue or the provisions so as to determine the matter in accordance with the submissions of the AWU. The AWU provided no reference to any decision or order of a court which upholds its submission concerning the legal effect of s.226 upon the employers bound by the award. My researches reveal that some reference to and consideration of those provisions is contained in two decisions of the Federal Magistrates Court of Australia 1. On my reading of those decisions, the effect of the relevant provisions is treated solely as a limitation on the right of an employer to require the performance of more than 38 hours of work per week, or an average thereof, and a reasonable number of additional hours.
[14] It has long been held that a Tribunal, such as the Australian Industrial Relations Commission, and I think by extension Fair Work Australia, is entitled to reach intermediate conclusions concerning the extant legal rights, duties and obligations of parties to or affected by proceedings before it and may need to do so for the purposes of exercising its jurisdiction, powers and discretion. Nevertheless, there is a distinction between situations where an issue cannot be effectively determined in the absence of necessary conclusions of this kind and those where there is no practical necessity to reach such conclusions. This case in my view falls into the latter category. If the AWU is correct in relation to its contentions regarding the effect of s.226 of the Workplace Relations Act 1996 and subsequent statutory enactments then any variation to the awards which post date 27 March 2009 will not detract from the legal rights of employees arising under the statutory provisions. This is because the statutory provisions will have overriding effect above and beyond the provisions of the award. On the other hand, if the Tribunal were to accept the AWU’s submissions in error and to impose obligations upon the employers covered by the awards, by reducing the ordinary hours from 40 to 38, from 27 March 2009, it might have significantly changed the legal obligations of those employers, retrospectively, without proper foundation or reason. This is because the legal effect of the variations would be that any work performed beyond 38 hours since that date would have to be paid for at the overtime rates prescribed by the awards.
[15] I have considered the history of the legislative provisions which are the subject of the contentions of the AWU and the ATA. I am inclined to the view that the submissions of the AWU are confused by the use of the words “ordinary hours of work”. In my view, the imposition of a terminology of “ordinary hours”upon the relevant statutory provisions in those submissions is, essentially, to give rise to an inference concerning the liability of employers to make overtime payments. On my reading of s.226 and the various other statutory provisions which are relevant to the assertions made by the AWU’s submissions, I have considerable doubt that the conclusions contended for by the AWU are correct. In my view, those provisions do not operate to give rise to a liability upon employers to pay for hours of work performed beyond 38 at the overtime rates prescribed by an award. Rather, in my view, the effect of s.226 is simply to limit the number of hours of work which an employer can request an employee to perform. While some of the extrinsic materials relevant to the enactment of s.226 of the Workplace Relations Act 1996 refer to ordinary hours I do not think that they exhibit an intention of the legislature to determine when overtime rates will apply. However, I do not intend to traverse to conclusion the complex, arguably ambiguous and seemingly contestable, potential legislative consequences of the relevant statutory provisions. For this reason and those expressed in the preceding paragraph, I have decided that I will deal with the applications in the usual way, without reaching any determination of the contentions of the parties concerning the legal effects of s.226 of the Workplace Relations Act 1996 and related statutory enactments.
[16] The ATA in their submissions draw attention to the preservation of the provisions of Division 5 (other than sections 554(1) to (4)) of the Workplace Relations Act 1996 in respect of the awards subject to the applications. For the purposes of this decision I am satisfied that the variations sought meet the statutory requirements set out in s.552 and s.553 of the Workplace Relations Act 1996. In particular, in my view, the Commission may vary the awards consistently with s.552(1)(c) and s.553(4) of the Workplace Relations Act 1996. While there may be some uncertainty in relation to the current status of the Commission’s Principles concerning award variations in relation to the maintenance of a minimum safety net I consider they are still relevant to these matters. It is to be noted that by decisions of the Full Bench 2, a claim for a variation to the hours provisions of an award, so as to prescribe ordinary hours of 38 per week, is not to be regarded as a claim above the safety net. Accordingly, the applications in this matter may be dealt with by a single member. In PR002005, the Full Bench3 relevantly describes the evolution of the award system and the safety net of minimum conditions of employment. In paragraph 1 of the Statement of Principles at Attachment A to the decision in that matter, the role of the safety net and changes thereto are referred to as follows.
“This evolving award system will remain the safety net referred to in the Act. It will, and is intended by the legislature to, change in response to economic, social and industrial circumstances.”
[17] Nothing was put to me in opposition to the applications, which refers to the requirements of those Principles or the circumstances of their current operation, so as to cause me to refuse the applications on merit. Those principles clearly contemplate that “standard hours” as they are referred to may be reduced to 38. Principle 7 of that Statement of Principles refers to the cost impact of such changes. Nothing was put to me by the employer representatives on this subject, however, I intend to take this consideration into account when determining the date(s) of operation of the variations I intend to make proposed by the parties.
[18] In my view, having regard to the overwhelming provision of ordinary hours of 38 per week by awards and decisions of the Commission, the statutory policy evidenced by s.226 of the Workplace Relations Act 1996 and the National Employment Standards, in relation to “ordinary hours of work”, which take effect on 1 January 2010, an award provision that “ordinary hours of work” shall be 38 can now be properly characterised as a standard, which has evolved as a response to economic, social and industrial circumstances so as to be appropriately characterised as forming a minimum safety of conditions of employment in relation to the subject of ordinary or “standard” hours.
[19] I now turn to the question of the appropriate date of the variations sought. There has been a delay in bringing this matter to a conclusion. The reasons for the delay are various. Unfortunately, due to some administrative changes to the composition of Fair Work Australia affecting Senior Deputy President Lacy, who it was anticipated would become a member of the Tribunal but who has in the meantime accepted an appointment as the Administrator of Christmas Island and the Cocos Keeling Islands, there was a delay in dealing with the matter between 9 July and 19 August 2009. The matter was then adjourned at the request of the ATA from 10 September to 18 September and once again at the request of the ATA, to enable submissions in relation to the operative date of the variations sought, to 28 September.
[20] The request of the ATA to have the hearing of 10 September vacated was on the basis that the ATA, apparently had not been served with notice of the application and was not aware of its nature until 8 September. While the applications of the AWU suggested that the ATA had been served prior to the 8th of September there was a lack of proof of such service. At the hearing on 18 September I allowed Mr Costa the opportunity to file appropriate proof of service of the applications subsequent to 9 July but prior to 8 September. No filing was made in this respect.
[21] The delay caused by the administrative issues concerning the composition of Fair Work Australia are the fault of neither party. Moreover if the application was not served upon the ATA prior to 8 September that must be a relevant consideration. However, while the matter was adjourned from 10 to 18 September by that time the ATA had resolved not to oppose the substantive variations sought by the applications but later retracted this position and opposed the variations sought. I think the history of the proceedings in this matter have an extra ordinary dimension. I consider that there is some justification for consideration of the date of operation of the variations sought. However the costs of any retrospective operation of the variations should be minimised. I have decided that the variations will operate from the first full pay period commencing on or after 18 September 2009.
COMMISSIONER
Appearances:
Mr T Costa for the AWU
Mr S Harris for the ATA
Hearing details:
2009
18 September
Melbourne
Final written submissions:
28 September 2009
1 [2009] FMCA 37 & [2009] FMCA 881
2 L4700
3 [2005] AIRC 508
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<Price code C, AP783476CRV, AT783476CRV PR989551>
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