United Voice v Compass Group (Australia) Pty Ltd

[2011] FWA 2283

[2011] FWA 2283

FAIR WORK AUSTRALIA

RECOMMENDATION

Fair Work Act 2009
s.739—Dispute resolution under the modern award

United Voice
v
Compass Group (Australia) Pty Ltd
(C2010/6011)

COMMISSIONER THATCHER SYDNEY, 14 APRIL 2011

Issue

[1] The Hospitality Industry (General) Award 2010 (the modern award) provides for transitional arrangements for the introduction of minimum wages under the modern award for employees covered by transitional minimum wage instruments. Schedule A (Transitional Provisions) applies to NSW.

[2] For employees who are the subject of this dispute, the transitional minimum wage instrument is the NSW Canteen Workers Award NAPSA (the NAPSA).

[3] In respect of the employees who are the subject of this dispute, the parties seek a recommendation on what rates in the NAPSA should be used for the calculation of transitional amounts. United Voice says that the rates should be the rates in the NAPSA that the Compass Group (Australia) Pty Ltd trading as ESS Support Services Worldwide (Compass Group) paid to the employees prior to the operation of the modern award rates. The Compass Group says that the rates should be the rates that the employees had an entitlement to under the NAPSA at that time.

Agreed facts

[4] Eighteen individuals are represented by the United Voice. Sixteen are current employees and two are former employees of Compass Group.

[5] The employees are/were employed (in relation to Compass Group’s contract with the Commonwealth) to deliver garrison support services in the Riverina Murray Valley (RMV). Sixteen are/were based at the Kapooka Military Area and two at the RAAF Base, Wagga Wagga.

[6] The individuals fall into the following categories:

(a) A number of employees were paid the equivalent of a Grade 3 under the NAPSA at the rate of $15.61. Compass Group says this number is 13 and the United Voice Union says this number is 12.

Compass Group claims that the employees do not perform duties that fall within the Grade 3 NAPSA classification; instead their true NAPSA classification is Grade 2. To date this has not been disputed by the Union. The Grade 2 rate in the NAPSA was $14.94. It is agreed that the equivalent classification of a Grade 2 NAPSA employee would be the classification of Level 2 Kitchen Attendant Grade 2 or Level 2 Food & Beverage Attendant Grade 2 under the modern award. Compass Group has classified these employees as Level 2 Kitchen Attendant Grade 2 or Level 2 Food & Beverage Attendant Grade 2 under the modern award. To date the classification of employees under the modern award has not been disputed by United Voice or by the employees directly.

(b) A number of employees were paid the equivalent of a Grade 4 under the NAPSA at the rate of $16.10. Compass Group says this number is 3 and the Union says this number is 4.

Compass Group claims that the employees do not perform duties that fall within the Grade 4 NAPSA classification; instead their true NAPSA classification is Grade 2. To date this has not been disputed by the Union. The Grade 2 rate in the NAPSA was $14.94. It is agreed that the equivalent classification of a Grade 2 NAPSA employee would be the classification of Level 2 Kitchen Attendant Grade 2 or Level 2 Food & Beverage Attendant Grade 2 under the modern award. Compass Group has classified these employees as Level 2 Food & Beverage Attendant Grade 2 under the modern award. To date the classification of employees under the modern award has not been disputed by United Voice.

(c) One former employee was paid the equivalent of a Grade 6 under the NAPSA at the rate of $18.13. It is claimed by Compass Group that he does not possess any formal chef qualifications and so did not fall under the definition of a Grade 6 in the NAPSA. To date this has not been disputed by the Union. The Grade 4 rate in the NAPSA was $16.10. It is agreed that the equivalent modern award classification for a Grade 4 under the NAPSA was a Level 3 Cook Grade 2. Compass Group has classified this employee as a Level 3 Cook Grade 2. To date the classification of employees under the modern award has not been disputed by United Voice.

(d) One former employee was paid the equivalent of a Grade 3 under the NAPSA at a rate of $15.61. She commenced an apprenticeship and became entitled to apprentice wages. Despite this Compass Group maintained her base rate at $15.61.

[7] The Respondent reviewed the relevant NAPSA classification applicable for each employee at the same time as it determined the modern award classification and calculated the transitional rate. This exercise was completed in August 2010.

Full Bench Decision

[8] It is relevant that the Award Modernisation decision dated 2 September 2009 of the Full Bench included:

“[6] In this part of the decision we refer to some of the more important statutory provisions relevant to our consideration of transitional provisions. Section 576A of the WR Act, which is identical to cl.1 of the consolidated request, sets out the object of Part 10A. Section 576C of the WR Act sets out a range of factors to which the Commission must have regard in carrying out the award modernisation process. Both sections are relevant. Section 576T of the WR Act makes provision for transitional provisions. It reads:

‘576T Terms that contain State-based differences

(1) A modern award must not include terms and conditions of employment that:

(a) are determined by reference to State or Territory boundaries; or

(b) do not have effect in each State and Territory.

(2) Despite subsection (1), a modern award may include terms and conditions of employment of the kind referred to in subsection (1) for a period of up to 5 years starting on the day on which the modern award commences.

(3) If, at the end of the period of 5 years starting on the day on which a modern award commences, the modern award includes terms and conditions of employment of the kind referred to in subsection (1), those terms and conditions of employment cease to have effect at the end of that period.’

[7] It is apparent that s.576T requires that modern awards not include terms which apply by reference to State or Territory boundaries or which do not apply in all States and Territories. It provides, however, that such terms may be included in modern awards for a period of up to five years. In its decision of 3 April 2009 the Commission made the following observations about s.576T:

‘[19] In its 23 January 2009 statement the Commission sought proposals and submissions as to the manner in which transitional issues should be dealt with [[2009] AIRCFB 50]. Most modern awards will contain terms which involve changes in minimum terms and conditions for many employees. That is because modern awards will replace a number, in some cases many, pre-reform awards and NAPSAs and establish a uniform safety net for employees and employers formerly covered by those pre-reform awards and NAPSAs. The effect of s.576T is that while modern awards must not include terms and conditions of employment that are determined by reference to State or Territory boundaries, a modern award may include such terms for an initial period of five years. It is no doubt the legislature’s intention to permit the Commission to include transitional provisions in modern awards to cushion the impact of changes in wages and other conditions. In the case of employees such provisions might deal with any reductions in their terms and conditions. In the case of employers the focus might be on increases in costs.’ 1

[8] We confirm those observations. It is also important that we indicate our view that the Commission’s power to make transitional provisions is not limited to the removal of differences in the conditions applying in the various States and Territories. If necessary, the Commission can make transitional provisions relating to other conditions which are not appropriate for a modern award.” (Emphasis added)

Recommendation

[9] In my view the intention of the transitional arrangements was to phase in the difference between the rates of pay that employees were receiving and the modern award rates.

[10] The Compass Group’s review of the classifications of the employees was completed after the transitional arrangements became operative from 1 July 2010.

[11] I recommend that for the purpose of calculating the transitional arrangements, the rates immediately prior to 1 July 2010 be the rates that the employees had been actually paid with reference to the NAPSA.

COMMISSIONER

 1   [2009] AIRCFB 345.

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