The Queensland Cane Growers Association Union of Employers
[2011] FWA 7759
•8 NOVEMBER 2011
[2011] FWA 7759 |
|
DECISION |
Fair Work Act 2009
s.160 - Application to vary a modern award to update or omit name of employer, organisation or outworker entity
The Queensland Cane Growers Association Union of Employers
(AM2010/97)
Sugar industry | |
COMMISSIONER SPENCER | BRISBANE, 8 NOVEMBER 2011 |
Application to vary Sugar Industry Award 2010 (MA000087).
Introduction
[1] This determination arises from an application made by the Queensland Cane Growers Association Union of Employers (the Applicant) to vary the Sugar Industry Award 2010 (the Award) 1in relation to wages for Youths 18-19 years and Youths under 18 years in the Cultivation/Cane Production stream. The variation sought was to insert wage rates for these junior employees on the grounds that they had been omitted from the Sugar Industry Award 2010 (the Award) during the Award Modernisation process.
[2] The variation as sought was objected to by The Australian Workers’ Union of Employees, Queensland (the AWU). A hearing was scheduled but subsequently cancelled, as the parties agreed for the matter to be determined on the papers. Submissions and evidence were filed. Although not all of the material provided by the parties has been referred to in this decision, all of such has been considered in making this determination.
Jurisdiction of the Applicant
[3] Pursuant to s.158 of the Fair Work Act 2009 (Cth) (the Act), applications to vary, omit or include terms (other than outworker terms or coverage terms) in a modern award may be made by either:
(a) an employer, employee or organisation that is covered by the modern award; or
(b) an organisation that is entitled to represent the industrial interests of one or more employers or employees that are covered by the modern award.
[4] The AWU objected to the Applicant’s standing, on the basis that it was not an ‘organisation’ as recognised by s.12 of the Act; in that it had not been registered under the Fair Work (Registered Organisations) Act 2009 (Cth) (the Registered Organisations Act) at the time of making the application. Therefore, it was submitted that the Applicant could not make an application pursuant to s.158(1) Item 1(a) or (b) of the Act.
[5] The Applicant later provided submissions that they had applied for transitional recognition, and that this was subsequently granted by Fair Work Australia (FWA). The Applicant provided correspondence from FWA in evidence of the registration.
[6] On this material, it is clear that at the time of making the application, the Applicant was not a registered organisation. Therefore, the Applicant did not have standing to bring this application. However the Applicant has since rectified this, accordingly FWA is able to act on its own initiative, pursuant to s.589 (3), to allow for the subsequent registration of the organisation to be recognised as the Applicant, and, in the alternative this to make this application on FWA’s own initiative pursuant to s.160(2)(a).
[7] The Canegrower’s Organisation has significant history in the Sugar Industry. I recognise the registration of the organisation, and also move the application pursuant to s160(2)(a) to remove any uncertainty regarding the application.
Relevant legislation
[8] FWA has jurisdiction to vary a modern award pursuant to s.160 of the Act. That section is as follows:
160 Variation of modern award to remove ambiguity or uncertainty or correct error
(1) FWA may make a determination varying a modern award to remove an ambiguity or uncertainty or to correct an error.
(2) FWA may make the determination:
(a) on its own initiative; or
(b) on application by an employer, employee, organisation or outworker entity that is covered by the modern award.
[9] FWA must consider the modern award objectives as set out in s.157 when considering a variation to a modern award. That section is as follows:
157 FWA may vary etc. modern awards if necessary to achieve modern awards objective
(1) FWA may:
(a) make a determination varying a modern award, otherwise than to vary modern award minimum wages; or
...
if FWA is satisfied that making the determination or modern award outside the system of 4 yearly reviews of modern awards is necessary to achieve the modern awards objective.
...
(2) FWA may make a determination varying modern award minimum wages if FWA is satisfied that:
(a) the variation of modern award minimum wages is justified by work value reasons; and
(b) making the determination outside the system of annual wage reviews and the system of 4 yearly reviews of modern awards is necessary to achieve the modern awards objective.
Note: As FWA is varying modern award minimum wages, the minimum wages objective also applies (see section 284).
...
[10] As the application for variation is in relation to minimum wages for junior employees, s.284 of the Act is also relevant. It is set out as follows:
284 The minimum wages objective
What is the minimum wages objective?
(1) FWA must establish and maintain a safety net of fair minimum wages, taking into account:
(a) the performance and competitiveness of the national economy, including productivity, business competitiveness and viability, inflation and employment growth; and
(b) promoting social inclusion through increased workforce participation; and
(c) relative living standards and the needs of the low paid; and
(d) the principle of equal remuneration for work of equal or comparable value; and
(e) providing a comprehensive range of fair minimum wages to junior employees, employees to whom training arrangements apply and employees with a disability.
This is the minimum wages objective.
When does the minimum wages objective apply?
(2) The minimum wages objective applies to the performance or exercise of:
(a) FWA’s functions or powers under this Part; and
(b) FWA’s functions or powers under Part 2-3, so far as they relate to setting, varying or revoking modern award minimum wages.
Note: FWA must also take into account the objects of this Act and any other applicable provisions. For example, if FWA is setting, varying or revoking modern award minimum wages, the modern awards objective also applies (see section 134).
Meaning of modern award minimum wages
(3) Modern award minimum wages are the rates of minimum wages in modern awards, including:
(a) wage rates for junior employees, employees to whom training arrangements apply and employees with a disability; and
(b) casual loadings; and
(c) piece rates.
Meaning of setting and varying modern award minimum wages
(4) Setting modern award minimum wages is the initial setting of one or more new modern award minimum wages in a modern award, either in the award as originally made or by a later variation of the award. Varying modern award minimum wages is varying the current rate of one or more modern award minimum wages.
Variation sought
[11] The variation sought by the Applicant was as follows:
The following wages apply to field, experiment stations and cane tester employees classified under clause 37 – Classifications:
Classification | Minimum weekly wage | Minimum hourly wage |
Cultivation/Cane Production
YTH1 Youths under 18 Years | 345.93 | 9.10 |
YTH2 Youths 18-19 Years | 413.27 | 10.88 |
[12] Clause 37 of the Award currently is as follows:
Wages
[Varied by PR997992, PR509118]
The following wages apply to field, experiment stations and cane tester employees classified under clause 37 - Classifications
[38 varied by PR997992, PR509118 ppc 01Jul11]
Classification | Minimum weekly wage | Minimum hourly wage |
$ | $ | |
Cultivation/Cane Production | ||
CPT (Inductee/Trainee) | 595.00 | 15.66 |
CP1 (Level 1) | 639.60 | 16.83 |
CP2 (Level 2) | 661.70 | 17.41 |
[13] However, the Applicant submitted that formal calculations for the Youth rates should be left to FWA, as was the case for other classifications during the Award Modernisation process. Further to this in the Applicant’s submissions 2 they requested FWA to insert what appeared in the NAPSA Sugar Field Sector Award - State 2005 at clause 5.2.2.
[14] Clause 5.2.2 of the NAPSA included the following relativities for the Cultivation/Cane Production. The Parties’ draft Award (for which AWU was noted as party to the draft) for the Modern Award as at 20 April 2009 - set out the field sector rates as follows, based on the NAPSA relativities:
Employee Classifications | Relativities | Southern District Per Week* 20 April 2009 | Illustrative wage, % of CP2 (Level 2) - currently $661.70 |
% | $ | ||
Grade 2 | 100 | 668.85 | 661.70 |
Grade 1 | 95 | 645.65 | 628.62 |
Inductee/Trainee | 85 | 597.35 | 562.45 |
Youths 18-19 Years | 70 | 432.55 | 463.19 |
Youths Under 18 Years | 56 | 367.75 | 370.55 |
[15] The current rates have been included in the final column.
[16] It is noted that the wage rates in this table bear no relationship to the relativity expressed in the adjacent column. That is not a point of contention among the parties
Grounds for variation
[17] The Applicant submitted that there was an error made in the translation of the award-based transitional instrument, the Sugar Field Sector Award - State 2005 notional agreement preserving a state award (the NAPSA). 3
[18] The Applicant submitted that the Youth classifications have been part of the Award system in Queensland since 1913; and that specifically in relation to the NAPSA, Youth rates have been included since 1994; and that these had not previously been objected to by the AWU.
[19] The Applicant further submitted that the omission of these Youth rates is the difference between a young person being employed; and not employed, as it provides an important entry level employment into the industry.
[20] Mr Selwyn Cronin provided evidence in relation to the application. Mr Cronin stated that he had been an employer in the Sugar Cane field sector since 1970, and that he had employed young people in his operations. Mr Cronin was covered by the Modern Award from 1 January 2011. Mr Cronin provided evidence that (on the basis of the Award as it currently stood) he would be subjected to substantial additional costs with respect to the employment of young persons; and that this would affect his decision to employ young people.
[21] The Applicant submitted that youth wages rates were present in the following pre-reform instruments:
● Sugar Milling Industry Award State 2005 (QLD)
● Sugar Field Workers (state) Consolidated Award [NSW]
[22] The Applicant conceded that a 2 April 2009 draft of the Modern Award contained Field Sector Wages incorporating youth classifications they had relied on was not lodged with the then Australian Industrial Relations Commission (the AIRC). However, the Applicant submitted despite confirming the final Modern Award draft that did not contain the Field Sector Junior rates that it had provided an earlier submission to the AIRC at the time of award modernisation which proposed an amendment to the exposure draft of the Award with respect to Youth classifications. The Applicant argued it was never the intention of the industrial parties at the time of the award modernisation process to delete these Youth classifications.
[23] In this regard, the Applicant pointed to the submissions made by the AWU to the AIRC which included Youth rates; and the submissions made by the Australian Sugar Milling Council (ASMC) (during the Award Modernisation process) that included junior rates also. The Applicant also referred to their earlier submissions seeking an amendment to the Award to incorporate wage rates from the NAPSA, which include Youth rates.
AWU objection
[24] The AWU submitted that FWA’s power to vary modern awards is discrete; and that the variation sought requires FWA to determine first whether an error has occurred.
[25] The AWU submitted that there cannot be an error just because the Youth rates existed in the award system prior to the Modern Award being made.
[26] In relation to the Award Modernisation process, the AWU submitted that the Applicant had provided submissions as part of that process on 6 March 2009 which did not address Youth rates. It was identified that on 22 May 2009, the AIRC had released an exposure draft of the Award which did not include Youth rates, and that this draft had been open for comment. In the Applicant’s response submissions to this of 16 June 2009, Youth rates were not raised. Further, at the hearing on 3 July 2009, the Applicant again did not raise Youth rates; but did so in a subsequent submission made on 10 July 2009 to the AIRC to retain the NAPSA wage and classification structure.
[27] It was submitted by the AWU that the AIRC expressed a clear intention to substantially depart from the NAPSA provisions relating to wages and classifications; and therefore the omission of Youth rates was not an error.
[28] The AWU further submitted that if the Applicant legitimately holds concerns in relation to the Youth rates, then it is appropriate for that matter to be raised as part of the four-yearly review incumbent upon FWA, and not as a separate application to vary the Award.
Considerations
[29] In consideration of the treatment of junior rates during the Award Modernisation process; several parties (including the Canegrowers and the AWU) made submissions supporting the inclusion of junior rates in the Sugar Industry Award during the Stage 2 Award Modernisation proceedings. These same parties provided draft Awards which included general junior rates clauses. However, junior rates were not raised by these parties in a significant way during the hearings.
[30] During the 27th March 2009 hearing, Mr Warren of the Australian Sugar Milling Council Pty Ltd listed ‘unapprenticed juniors’ amongst issues that he believed ‘.....are going to be addressed I think by the Full Bench.’ 4
[31] Submissions from the Queensland Sugar Limited, the AMWU, and the AWU included a draft clause for Junior or Unapprenticed Junior rates.
[32] In their correspondence dated 6 March 2009 Canegrowers gave their “support for the draft Sugar Industry Award which included with the ASMC submission”. The ASMC draft contained general junior rates. In a further submission on 10 July 2009 Canegrowers objected to the wages in clause 35 of the Exposure draft in relation to Field sector employees (which did not include junior rates). They suggested the rates from the Queensland NAPSA, the Sugar Field Industry Award - State 2005 [AN140282] including junior rates should be used as the basis of these rates instead.
[33] The Exposure drafts produced by the Tribunal included junior rates for the milling, distillery, refinery and maintenance sectors only. Although submissions were again received from the same parties following the Exposure drafts being made available, they did not refer to the lack of general junior rates.
[34] None of the Statements of Decision issued during the Stage 3 Award Modernisation proceedings addressed junior rates in the Sugar Industry. The final Modern Award was issued with the same junior rates clause as the Exposure draft (i.e. only covering the milling, distillery, refinery and maintenance sectors).
[35] In the Modern Award; junior rates do not cover any junior employees working in field work and bulk terminal operations of the sugar industry [Part 7 and Part 9]
[36] It is clear however that previously industrial instruments in this industry included junior rates in the field sector and the bulk terminal operations sector.
[37] The issue of whether to insert junior rates into a modern award was considered by Senior Deputy President Acton in relation to the Joinery and Building Trades Award 2010. 5 One of the main arguments advanced by the Applicant in that application was that non-apprenticed, non-trainee junior employee wage rates were contained in a number of transitional minimum wage instruments that previously covered the employees covered by the Modern Award under that application.
[38] In this decision the Senior Deputy President was not persuaded to insert the junior rates and gave the following reasoning.
“The witness evidence from the employers who undertake glass and glazing work was to the effect that they would be less inclined to employ junior employees who are not apprentices or trainees if they have to pay them adult employee wage rates. However, the evidence also revealed that notwithstanding the availability of non-apprenticed, non-trainee junior employee wage rates in the transitional minimum wage instruments that covered employees who perform glass and glazing work and who are now covered by the JBT Modern Award, the number of non-apprenticed, non-trainee junior employees employed on glass and glazing work is extremely small. 6 The evidence about whether this extremely small number of junior employees were or are actually employed on non-apprenticed, non-trainee junior wage rates was even more limited.”
[39] The biggest point of difference in the application before the Senior Deputy President and the current application is the potential number of junior workers to be employed, under the “Field Work” Classification of the Sugar Industry Award 2010; and the importance of this work for youth in these regions.
[40] The issue of whether to insert junior rates into a modern award was considered by Vice President Watson in relation to the Cleaning Services Award 2010. 7 The variation sought was to include junior rates for trolley collectors; a distinct group or classification of employees under the award:
“It is clear that the employers involved in the processes leading to the making of the Cleaning Services Award were primarily from the contract cleaning industry. Trolley collection contractors had limited involvement even though it was determined that they would fall within the scope of the award. An application by the SDA to include them within the General Retail Award was rejected by the award modernisation Full Bench on 22 December 2009
I am satisfied in these circumstances that the position of trolley collection contractors has not been fully considered in the making of the Cleaning Services Award. As a result a number of important matters relevant to the content of the award have not been considered until this application. These matters include the widespread use of juniors, the widespread existence of junior rates in applicable pre-existing instruments and the immediate cost impact on trolley collection contractors of making the Cleaning Services Award. In my view, had these matters been considered, efforts would have been made to minimise the cost impact of the changes brought about by the making of the award...
I note that employees of trolley collection contractors were previously able to employ junior employees on junior rates under retail awards that applied in New South Wales, Queensland and the Australian Capital Territory and under building services awards that applied in Western Australia and Victoria.” 8
[41] Similar conclusions can be drawn in relation to the current application to the Sugar Field Sector prior to the introduction of the Modern Award.
Conclusion
[42] It is noted that the Applicants originally sought junior rates for the Field Sector to be part of the Modern Award and that junior rates were previously applicable to the Field Sector. The Field Sector is obviously the significant originating part of the Sugar Industry and labour is often drawn from the local townships. The evidence of Mr Cronin, was that the lack of junior rates for the field sector, substantially increased his labour costs and negatively impacted on the employment of young people in the sector.
[43] The Parties’ draft variations for the Sugar Industry Modern Award included at various stages junior rates for the Field Sector. Reference was made to the applicable percentages for juniors in the relevant NAPSA. In consideration of all of the submissions and various drafts of the Award it is determined that the final omission of Field Sector junior rates from the Sugar Industry Award provides an ambiguity or uncertainty. This is particularly so as the resulting position is that the Field Sector is the only sector of the industry after the implementation on the Modern Award that does not have junior rates whereas the Field Sector had such prior.
[44] It is confirmed that on review of the material an oversight has occurred in the Wages Schedule Clause 38 under the Cultivation/Cane Production stream whereby the wages for youths 18 - 19 years and youths under 18 years have been omitted.
[45] Accordingly as sought by the Applicants; that the rates should reflect the NAPSA; the following junior rates are to be inserted. From the AWU’s perspective these rates provide an increased amount than the variation originally provided by the Applicants.
[46] Junior rates for all other parts of the industry were granted. Accordingly to remedy the error, pursuant to s 160(1) the application to provide junior rates is granted. The resulting junior rates are as follows:
The minimum wage rate payable to juniors must be the following percentages of the minimum adult weekly wage rate corresponding to classification CP2 (Level 2).
Age | % of the minimum weekly rate for CP2 (Level 2) |
Youths 18-19 Years | 70 |
Youths Under 18 Years | 56 |
[47] I Order accordingly. A separate variation is issued.
COMMISSIONER
1 MA000087
2 Submissions of the Applicant [10].
3 AN140282 - Qld
4 Transcript 27 March 2009, PN 197.
5 [2010] FWA 8752, [15].
6 Exhibit ABI 6 and transcript in AM2010/80 at PN300-303, 317-318, 431, 545 and 552.
7 2010 FWA 3317.
8 [2009] AIRCFB 983.
Printed by authority of the Commonwealth Government Printer
<Price code C, MA000087 PR516591>
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