The Commonwealth of Australia acting through the Secretaries of the Parliamentary Departments: Clerk of the Senate, Department of the Senate; Clerk of the House of Representatives, Department of the House of...
[2016] FWCFB 3567
•30 May 2016
| [2016] FWCFB 3567 |
| FAIR WORK COMMISSION |
REASONS FOR DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 6, Item 4—Application to make a modern award to replace an enterprise instrument
Parliamentary Departments Staff Award 1998
(EM2013/66)
Commonwealth employment | |
VICE PRESIDENT CATANZARITI | BRISBANE, 30 MAY 2016 |
Application for a modern enterprise award to replace the Parliamentary Departments Staff Award 1998 - whether modern enterprise award should be made - modern enterprise award should be made in the circumstances - order to be settled by member of full bench.
Introduction
[1] This decision relates to an application under item 4 of Schedule 6 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) for the Fair Work Commission to make a modern enterprise award to replace the Parliamentary Departments Staff Award 1998 (Current Enterprise Award).
[2] The application was made by the Commonwealth of Australia (applicant), acting through the Secretaries of the each of the following Parliamentary Departments:
● Clerk of the Senate, Department of the Senate;
● Clerk of the House of Representatives, Department of the House of Representatives;
● Secretary, Department of Parliamentary Services; and
● Parliamentary Budget Officer, Parliament Budget Office.
[3] On 28 April 2016 the applicant filed the following material in support of the application:
● Joint outline of submissions (Exhibit “A”);
● Statement of Dr Rosemary Gay Laing, Clerk of the Senate (Exhibit “B”);
● Draft Order; and
● Draft of the Proposed Award.
[4] The application was supported or otherwise not opposed by the respondents to the application (namely, the):
● Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union;
● Australian Nurses and Midwifery Federation;
● Australian Workers’ Union
● Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union;
● Construction, Forestry, Mining and Energy Union (CFMEU);
● Community and Public Services Union (CPSU);
● Media, Entertainment and Arts Alliance; and
● National Union of Workers
[5] The application was heard by us on 23 May 2016.
[6] At the hearing of this matter:
● Mr J Lovell from Ashurst, Solicitor with persmission pursuant to s.596(2)(a) of the Fair Work Act 2009, appeared on behalf of the Commonwealth of Australia;
● Mr M Taylor for the CPSU; and
● Mr S Maxwell on behalf of the CFMEU.
[7] At the conclusion of the hearing we announced our decision to make the Parliamentary Service Enterprise Award 2016 (Proposed Award) which had been agreed between the parties subject to the finalisation of its terms in conference with Commissioner Johns.
[8] On 25 May 2016 the parties jointly filed a further amended version of the Proposed Award incorporating amendments proposed during the Hearing, namely the inclusion of the revised model term for the cashing out of annual leave.
[9] These are the reasons for our decision.
The approach
[10] The approach to be taken to the making of an enterprise modern award was established by a Full Bench in Commonwealth of Australia acting through the Minister Assisting the Prime Minister for the Public Service v the Community and Public Sector Union and Others. 1 We adopt that approach in this matter.
The legislative requirements
[11] The role of the Commission in an application to make a modern enterprise award is governed by sub-item 4(5) of Schedule 6 to the Fair Work (Transitional Provisions and Consequential Amendments Act 2009 (Transitional Act) which provides:
(5) In deciding whether or not to make a modern enterprise award, and in determining the content of that award, the FWC must take into account the following:
(a) the circumstances that led to the making of the enterprise instrument rather than an instrument of more general application;
(b) whether there is a modern award (other than the miscellaneous modern award) that would, but for the enterprise instrument, cover the persons who are covered by the instrument, or whether such a modern award is likely to be made in the Part 10A award modernisation process;
(c) the content, or likely content, of the modern award referred to in paragraph (b) (taking account of any variations of the modern award that are likely to be made in the Part 10A award modernisation process);
(d) the terms and conditions of employment applying in the industry in which the persons covered by the enterprise instrument operate, and the extent to which those terms and conditions are reflected in the instrument;
(e) the extent to which the enterprise instrument provides enterprise-specific terms and conditions of employment;
(f) the likely impact on the persons covered by the enterprise instrument, and the persons covered by the modern award referred to in paragraph (b), of a decision to make, or not make, the modern enterprise award, including any impact on the ongoing viability or competitiveness of any enterprise carried on by those persons;
(g) the views of the persons covered by the enterprise instrument;
(h) any other matter prescribed by the regulations.
[12] Item 6 links the modern enterprise award objective to the modern award objective and the minimum wages objective found at ss.134 and 284 of the Act. It provides:
6 The modern enterprise awards objective
(1) The modern awards objective and the minimum wages objective apply to the FWC making a modern enterprise award under this Division.
(2) However, in applying the modern awards objective and the minimum wages objective, the FWC must recognise that modern enterprise awards may provide terms and conditions tailored to reflect employment arrangements that have been developed in relation to the relevant enterprises. This is the modern enterprise awards objective.
[13] This is a legislative requirement for the Commission to recognise, in the context of the modern awards objective and the minimum wage objective, that modern enterprise awards may provide terms and conditions tailored to reflect employment arrangements that have been developed in relation to the relevant enterprises. The modern awards objective, set out in s.134 of the Fair Work Act 2009 (the Act), is as follows:
“134 The modern awards objective
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.”
[14] It is also relevant to draw attention to item 11 of Division 3 which provides:
11 Enterprise instrument modernisation process is not intended to result in reduction in take-home pay
(1) The enterprise instrument modernisation process is not intended to result in a reduction in the take-home pay of employees.
(2) An employee’s take-home pay is the pay an employee actually receives:
(a) including wages and incentive-based payments, and additional amounts such as allowances and overtime; but
(b) disregarding the effect of any deductions that are made as permitted by section 324 of the FW Act.
Note: Deductions permitted by section 324 of the FW Act may (for example) include deductions under salary sacrificing arrangements.
(3) An employee suffers a modernisation-related reduction in take-home pay if, and only if:
(a) a modern enterprise award made in the enterprise instrument modernisation process starts to apply to the employee when the award comes into operation; and
(b) the employee is employed in the same position as (or a position that is comparable to) the position he or she was employed in immediately before the modern enterprise award came into operation; and
(c) the amount of the employee’s take-home pay for working particular hours or for a particular quantity of work after the modern enterprise award comes into operation is less than what would have been the employee’s take-home pay for those hours or that quantity of work immediately before the award came into operation; and
(d) that reduction in the employee’s take-home pay is attributable to the enterprise instrument modernisation process.
[15] Item 11 highlights the injunction contained in the original request provided by the then Minister which related to disadvantage to employees.
The application of the legislative task
[16] We now turn to each of the matters that we took into account.
The circumstances that led to the making of the enterprise instrument rather than an instrument of more general application: Item 4(5)(a)
[17] The applicant provided a history of the Current Enterprise Award. That history can be summarised as follows:
(a) Parliamentary Service employees have not traditionally been subject to instruments of general application. The terms and conditions of employment applying to Parliamentary Service employees have, together with terms and conditions applying to Australian Public Service employees, historically been determined separately to the rest of the Australian workforce;
(b) In recognition of the independence of the Parliament and its employees, it was determined in 1997 that Parliamentary Service employees should be engaged pursuant to a separate piece of legislation to other Commonwealth public servants. In 1999 the Parliamentary Service Act 1999 was passed by the Commonwealth Parliament;
(c) The Parliamentary Departments Staff Award 1998 was made as a result of the Award Simplification process conducted pursuant to Item 51 of Part 2 of Schedule 5 of the Workplace Relations and Other Legislation Amendment Act 1996, out of a combination of the following instruments:
● Parliamentary Departments Administrative Staff Award 1995;
● Parliamentary Maintenance, Stores and Gardens Staff Award 1995;
● Parliament of Australia Hansard Reporters (Department of the Parliamentary Reporting Staff) Award 1995;
● Australian Public Service General Employment Conditions Award 1995 (insofar as it applied to Parliamentary Service employees);
● Australian Public Service Home Based Work (Interim Award) 1994;
● Public Service Arbitrator’s Determination No 119 of 1951 (Common Rule re Sick Leave); and
● Public Service Arbitrator’s Determination No 24 of 1925 (Common Rule re Accidents).
[18] It can be seen from this brief overviewthat the Current Enterprise Awardhas had a long and distinct history. This factor weighed in favour of making a modern enterprise award.
Whether there is a modern award (other than the miscellaneous modern award) that would, but for the enterprise instrument, cover the persons who are covered by the instrument, or whether such a modern award is likely to be made in the Part 10A award modernisation process: Item 4(5)(b).
[19] It was submitted that there is no single award that would, but for the Proposed Award, cover all employees who are covered by the Current Enterprise Award.
[20] It was submitted by the parties that if the Current Enterprise Award was not modernised then it would be likely that at a number of different modern industry and occupational awards would cover its employees. They include:
● Graphic Arts, Printing and Publishing Award 2010;
● Health Professionals and Support Services Award 2010;
● Joinery and Building Trade Award 2010;
● Manufacturing and Associated Industries and Occupations Award 2010; and
● Professional Employees Award 2010.
[21] It may be observed that coverage by a large number of modern awards may lead to difficulties in enterprise bargaining. Further, it might lead to an unnecessary fragmentation of the award safety net and would fail to achieve the modern awards objective.
[22] Further, it was submitted that if a modern enterprise award was not made, then a significant majority of employees would be covered by the Miscellaneous Award 2010 [MA000104](the Miscellaneous Award).
[23] As was made clear in the award modernisation Full Bench decision dated 4 December 2009 ([2009] AIRCFB 945 at paragraph 153):
“We agree with those who have suggested that the coverage of the award is very narrow and likely to be limited in time where emerging industries are concerned or where the expansion of coverage of a modern award is involved. Accordingly we do not think the award should contain a comprehensive safety net designed for any particular occupation or industry. Rather it should contain basic conditions only, leaving room for the application of an appropriate safety net in another modern award in due course.”
[24] The Miscellaneous Award was not created or designed to be a universal safety net but to be a transition point to another modern award whose coverage may require review. These circumstances weighed favour of creating a modern enterprise award.
The content, or likely content, of the modern award referred to in paragraph (b) (taking account of any variations of the modern award that are likely to be made in the Part 10A award modernisation process): Item 4(5)(c)
[25] It was submitted that the content of the modern industry and occupational awards are specific to each particular occupation and are not an appropriate safety net given the history of the Parliamentary Service and its industrial regulation.
[26] It is apparent from the history of the industrial arrangements which have applied to the applicant that the content of the various industry specific modern awards do not reflect the needs, terms and conditions of its employees. This factor weighed in favour of making a modern enterprise award.
The terms and conditions of employment applying in the industry in which the persons covered by the enterprise instrument operate, and the extent to which those terms and conditions are reflected in the instrument: Item 4(5)(d)
[27] The parties directed the Commission’s attention to the decision in Coleambally Irrigation Co-operative Limited v AWU and ors [2014] FWCFC 2170 in which the parties submitted that the Commission considered enterprise agreements that appeared to cover activities in the relevant industry.
[28] The parties submitted that the following instruments apply to employees covered by the Current Enterprise Award:
● Department of the House of Representatives Enterprise Agreement 2012 -2015;
● Department of the Senate Enterprise Agreements 2012 – 2015;
● Department of Parliamentary Services Enterprise Agreement 2011; and
● Parliamentary Departments Staff Award 1998 supplemented by common law agreements or determinations made pursuant to s.24(1) of the Public Service Act 1999 (for employees of the Parliamentary Budget Office)
[29] The parties submitted that the following terms and conditions of the Current Enterprise Awardare reflected in the instruments above:
● Clause 10 and 11 – Parliamentary Service specific classifications;
● Clause 27.2 – Flextime;
● Clause 31 – a more generous entitlement to personal leave; and
● Clause 18 – a more generous entitlement to redundancy pay.
[30] These factors weighed in favour of making a modern enterprise award.
The extent to which the enterprise instrument provides enterprise-specific terms and conditions of employment: Item 4(5)(e)
[31] It was submitted that there are enterprise specific terms and conditions that apply to employees of the applicant. A few are worthy of mention:
● An entitlement for employees to return to part-time work after a period of maternity leave; and
● Ceremonial leave.
[32] The parties also submitted that the rates of pay contained in the Current Enterprise Awardreflect long established relativities connected to the unique classification scheme that is utilised by Parliamentary Departments.
[33] The parties drew the Commission’s attention to both the modern awards objective and the minimum wages objective, and submitted that these objectives require the Commission to have regard to the principle of equal remuneration for work of equal or comparable value.
[34] The parties submitted that if the Proposed Award were not made, the classifications and relativities contained in the Parliamentary Departments Staff Award 1998 would be lost, which they submitted would be contrary to the principle of equal remuneration for work of equal value.
[35] The parties submitted that the Full Bench of the Commission that modernised the APS Award recognised that the existence of established salary relativities was a factor in favour of making a modern enterprise award. The parties submitted that the existence of established wage relativities is a factor in favour of making the Proposed Award.
[36] These factors weighed in favour of making a modern enterprise award.
The likely impact on the persons covered by the enterprise instrument, and the persons covered by the modern award referred to in paragraph (b), of a decision to make, or not make, the modern enterprise award, including any impact on the ongoing viability or competitiveness of any enterprise carried on by those persons: Item 4(5)(f).
[37] The parties jointly submitted that:
● While the majority of Parliamentary Service employees are covered by an enterprise agreement (or, in the case of Parliamentary Budget Office employees, common law contracts and determinations made pursuant to s.24 of the Public Service Act 1999) a decision to make, or not to make, the Proposed Award would be relevant to the operation of the better off overall test (the BOOT); and
● A decision to not make the Proposed Award would result in the BOOT being assessed against the Miscellaneous Award 2010 and the aforementioned modern awards, which do not contain terms and conditions that reflect the particular circumstances of employment in the Parliamentary Service.
[38] The parties submitted that the terms and conditions provided for in the Miscellaneous Award 2010 do not provide a fair and relevant minimum safety net for the purpose of the BOOT.
[39] The parties also submitted that making the Proposed Award would not adversely affect the viability or competitiveness of the Parliamentary Service.
[40] These factors weighed in favour of making a modern enterprise award.
The views of the persons covered by the enterprise instrument: Item 4(5)(g)
[41] All parties to the Current Enterprise Award supported the making of this modern enterprise award. No person opposed the award. Whilst consent is not decisive of the matter, it is a factor in favour of making a modern enterprise award.
Any other matter prescribed by the regulations: Item 4(5)(h)
[42] There were no regulations relevant to this criterion.
Should a modern enterprise award be made?
[43] The Parliamentary Departments are unique organisations. There is no real industry of the Parliamentary Service beyond the operations of the Parliamentary Departments and no convenient alternative award that can be said to better satisfy the modern awards objective than a modernised Parliamentary Departments Staff Award 1998.
[44] The history of the Current Enterprise Award discloses a rationale for its existence which remains current today. The terms of the Current Enterprise Award contain enterprise specific terms. While some of these can and should be contained in enterprise agreements, the fact remains that the award was developed for this enterprise, and once consolidated and modernised, remains the most suitable vehicle for a fair and relevant minimum safety net into the future. In our view there was a compelling case for the making of a modern enterprise award for the Parliamentary Service.
[45] The above factors clearly made the case for such an outcome. We considered that the Proposed Award should be made.
[46] Consequently we made the Proposed Award in the terms agreed between the parties as amended and filed in the Commission on 25 May 2016.
VICE PRESIDENT
Appearances:
J Lovell, Ashurst, for Commonwealth of Australia
M Taylor, for the Community and Public Sector Union.
S Maxwell, for the Construction, Forestry, Mining and Energy Union (CFMEU).
Hearing details:
2014.
Sydney, Canberra
May 23.
1 [2015] FWCFB 616.
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