Submission to Fair Work Australia - MODERN AWARDS REVIEW 2012 PUBLIC HOLIDAYS (AM2012/134 AND OTHERS)
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Submission to Fair Work
Australia
MODERN AWARDS REVIEW 2012
PUBLIC HOLIDAYS
(AM2012/134 AND OTHERS)
17 September 2012MODERN AWARDS REVIEW 2012
PUBLIC HOLIDAYS
(AM2012/134 AND OTHERS)
1. Introduction
1.1. The Australian Industry Group (Ai Group) makes this submission in response
to the application by the Australian Council of Trade Unions (ACTU) to vary
over 100 modern awards in respect of public holiday provisions (ACTU
Application) and applications by various unions which reflect the terms of the
ACTU’s application.
1.2. The ACTU Application seeks the inclusion of model clauses relating to public
holidays. The clauses would provide the following entitlements:
• Full-time employees who do not work a five day Monday to Friday week
and part-time employees who work on average five days or more per
week would receive either an additional days wages, an alternative day
off or an additional day of annual leave if a public holiday falls on a day
in which they would not ordinarily be rostered to work (the Full-
time/Part-time Claim).
• A prohibition on the scheduling of a rostered day off (RDO) on a public
holiday, or if an RDO coincides with a public holiday the employee
would be entitled to take their RDO on an alternate weekday (the RDO
Claim).
• An employee would be entitled to an additional 50% loading for work
performed on Christmas Day in circumstances where that day falls on
either a Saturday or Sunday and is not regarded as the public holiday
(the Christmas Day Claim).
Modern Awards Review 2012 17 September 2012 Ai Group 2
Public Holidays AM2012/134 and Others1.3. Ai Group opposes all elements of the ACTU Application for the reasons set out
in this submission.
2. Jurisdiction and Statutory Provisions
2.1. On 29 June 2012 a Full Bench of Fair Work Australia (FWA) issued a
decision1 (Preliminary Decision) concerning the relevant statutory provisions
and principles applicable to the review of modern awards under Item 6 of
Schedule 5 of the Fair Work (Transitional Provisions and Consequential
Amendments) Act 2009 (FW Transitional Act).
2.2. The Preliminary Decision identified that section 138 of the Fair Work Act 2009
(FW Act) is relevant to the Modern Award Review 2012 (Review).2 Section
138 of the FW Act provides:
“A modern award may include terms that it is permitted to include, and must
include terms that it is required to include, only to the extent necessary to
achieve the modern awards objective and (to the extent applicable) the
minimum wages objective.”
2.3. The critical principle which flows from the operation of section 138 is that a
modern award can only include such terms that are “necessary” to achieve the
modern awards objective. In considering the distinction between “necessary”
and “merely desirable” the Full Bench endorsed the following analysis of
Tracey J in Shop, Distributive and Allied Employees Association v National
Retail Association (No 2 ) [2012] FCA 480 (SDA v NRA (No2)):
“That which is necessary must be done. That which is desirable does not carry
the same imperative for action.”3
1
[2012] FWAFB 5600
2
[2012] FWAFB 5600; at [33]
3
[2012] FCA 480; at 46
Modern Awards Review 2012 17 September 2012 Ai Group 3
Public Holidays AM2012/134 and Others2.4. What is “necessary” to achieve the modern awards objective may vary
depending on the nature of the application which is before the Tribunal.4
However, the Full Bench importantly identified that the starting point in
considering any application is a presumption that the modern award does
comply with the modern awards objective:
“[85] Two points about the historical context are particularly relevant. The
first is that awards made as a result of the award modernisation process are
now deemed to be modern awards for the purposes of the FW Act… Implicit in
this is a legislative acceptance that the terms of the existing modern awards
are consistent with the modern awards objective. The second point to observe
is that the considerations specified in the legislative test applied by the
Tribunal in the Part 10A process is, in a number of important respects,
identical or similar to the modern awards objective which now appears in
s.136.”5
(Emphasis added)
2.5. This is an important proposition given that the ACTU submissions in support of
their application assert that the modern awards subject to their proposed
variation are not consistent with the modern awards objectives. Such a
proposition is inescapable from the submission that “neither Modern Awards
nor the National Employment Standards provide a comprehensive safety net
of public holidays”.6
2.6. Ai Group submits that none of the materials filed by the ACTU support such an
assertion.
4
[2012] FWAFB 5600; at [34]
5
Ibid; at [85].
6
Submissions of the ACTU relating to public holidays (AM2012/134) 13 August 2012; at 6
Modern Awards Review 2012 17 September 2012 Ai Group 4
Public Holidays AM2012/134 and Others2.7. Modern awards have been held by a Full Bench of the Tribunal to meet the
requirements of section 576B of the Workplace Relations Act 1996 and those
requirements are very similar to section 134 (Modern Awards Objective) of the
FW Act, a point highlighted above and by FWA in its Preliminary Decision.7
2.8. The ACTU’s submission argues that their proposed variation “cannot be seen
as one which seeks a “fresh assessment”, or one in which “the substance of
the variation sought has already been dealt with by the Tribunal in the Part
10A process.”8
2.9. In making this submission the ACTU was clearly conscious of the comments
made in the Preliminary Decision regarding the public interest considerations
associated with the Tribunal ensuing consistency with previous Full Bench
decisions of FWA and the Australian Industrial Relations Commission (AIRC)
as follows:
“[88] These policy considerations tell strongly against the proposition that the
Review constitutes a “fresh assessment” unencumbered by previous Tribunal
authority.
[89] In circumstances where a party seeks variation to a modern award in
the Review and the substance of the variation sought has already been dealt
with by the Tribunal in the Part 10A process, the applicant will have to show
that there are cogent reasons for departing from the previous Full Bench
decision, such as a significant change in circumstances, which warrant a
different outcome.”9
(Emphasis added)
2.10. Ai Group acknowledges that application of the Public Holiday Test Case
Decisions was not a matter which was widely agitated as part of the Part 10A
proceedings, even though it was agitated in the proceedings relating to at least
7
[2012] FWAFB 5600; at [85]
8
Ibid; at 11
9
[2012] FWAFB 5600; at [88] and [89].
Modern Awards Review 2012 17 September 2012 Ai Group 5
Public Holidays AM2012/134 and Othersone modern award.10 Despite this fact, the approach which the AIRC adopted
in relation to other test case provisions, in particular claims arising from the
1984 Termination, Change and Redundancy test case are relevant when
considering the ACTU’s claims.
2.11. Additionally, an application similar to the ACTU’s Christmas Day claim has
recently been the subject of a decision of a Full Bench of FWA.11 The Full
Bench rejected the applications made by various unions to vary a range of
modern awards. This too is important in considering the ACTU’s Application.
2.12. As for the contention that the ACTU Application does not call for a “fresh
assessment” but instead relies on the “principles” from the Public Holiday Test
Case Decisions, this does not stand up to scrutiny.
2.13. Relevant to this contention is whether in fact the ACTU Application is
consistent with the principles which were reflected in the Public Holiday Test
Case Decisions, how the decisions were implemented in those awards which
were varied and whether AIRC decisions made almost two decades ago under
very different legislation should be relied upon as a basis for varying over 100
modern awards.
2.14. In conducting its review of modern awards the matters which the Tribunal is to
have regard are detailed in Item 6(2) of the FW Transitional Act. Whether
these matters represent an exhaustive expression of the matters relevant to
the Review was considered by the Full Bench in its Preliminary Decision.
Whilst refusing to rule out that there may be other relevant considerations, the
Full Bench identified that caution should be used in relying on any other
criteria:
10
[2010] FWAFB 9290 at para [46] re. the Banking, Finance and Insurance Modern Award 2010.
11
[2010] FWAFB 9290
Modern Awards Review 2012 17 September 2012 Ai Group 6
Public Holidays AM2012/134 and Others“[48] While it is clear that the tribunal must consider the specific matters
mentioned in subitem 6(2) and those aspects of the FW Act to which we have
previously referred, it is not clear to us what other matters may be relevant in
the context of the Review. We are not prepared to determine this issue in the
abstract, absent any factual context, but it seems to us that a cautious
approach should be taken to the consideration of matters other than those
mentioned in subitem 6(2) and those aspects of the FW Act we have referred
to earlier in this decision. It is an error of law for the Tribunal to rely on
irrelevant material.”
(Emphasis added)
2.15. The ACTU submission focuses substantially on the AIRC’s Public Holidays
Test Case Decisions in support of its application. To the extent that this is
proffered as an additional consideration beyond those articulated in sub-item
6(2), Ai Group contends that the decisions were made almost two decades
ago, under a very different legislative regime with different legislative criteria
underpinning the terms of awards. As such, the decisions are not relevant to
the Review and to rely upon them would lead to precisely the “error of law”
which the Full Bench of FWA cautioned against.
2.16. Ai Group also notes the ACTU submission that:
“The lack of uniformity in the application of the relevant Public Holiday Test
Case principles to modern awards generally is an “anomaly” arising from the
Part 10A Modern Award process within the meaning (of) sic item 6(2)(b) of
Schedule 5 of the FW(TPCA) Act.”12
2.17. Such a submission is not valid. There is no basis for a submission that
uniformity of public holiday provisions was an intended outcome of the Part
10A award modernisation process.
12
Submissions of the ACTU relating to public holidays (AM2012/134) 13 August 2012; at 4
Modern Awards Review 2012 17 September 2012 Ai Group 7
Public Holidays AM2012/134 and Others2.18. Furthermore we contend that any lack of uniformity in the application of the
“relevant Public Holiday Test Case principles” were a feature of the federal
award system well before commencement of the Part 10A award
modernisation process. AIRC Test Case decisions were never intended to be
incorporated within individual awards without consideration of the
circumstances of the relevant industries and occupations. Commonly, the
provisions incorporated in awards to implement a test case decision varied
somewhat from award to award.
2.19. Even if the ACTU was able to establish that there was an anomaly in the pre-
modern federal award system relating to the Public Holidays Test Case
Decisions (and we strongly submit that no such anomaly existed) this is not an
anomaly which is appropriately remedied through application of sub-item
6(2)(b) of the FW Transitional Act and indeed is beyond the statutory power as
it is not an anomaly “arising from the Part 10A award modernisation
process.”13
2.20. To the extent that the ACTU advances its application pursuant to sub-item
6(2)(a) of the FW Transitional Act, section 134 (Modern Awards Objective)
articulates the matters which FWA must take into account.
3. Public Holidays Test Case Decisions
3.1. A substantial portion of the ACTU submission is directed towards analysis of
four Full Bench decisions of the AIRC14 collectively referred to as the Public
Holiday Test Case Decisions.
13
FW Transitional Act; Sub-item 6(2)(b)
14
Print L4534, Print L7799, Print L7971 and Print L9178.
Modern Awards Review 2012 17 September 2012 Ai Group 8
Public Holidays AM2012/134 and Others3.2. The ACTU’s contentions in relation to the relevance of the Public Holidays
Test Case Decisions rest on the following two arguments:
• that “the incorporation of key principles from the Public Holiday Test
Case are necessary to achieve the modern award objective within the
meaning or item 6(2)(a);”15 and
• that if the Tribunal accepts that “the principles established in the Test
Case are of continuing relevance to the provision of a fair and relevant
minimum safety net of terms and conditions, then it will not be
necessary nor particularly relevant to examine why the Test Case
principles were not more widely applied prior to the modernisation
process.”16
3.3. Ai Group rejects both propositions and submits that there is no basis for
applying an 18 year old test case to the modern awards system.
3.4. However, if the Tribunal is prepared to consider the ACTU’s claim then
consideration of the absence of what the ACTU refers to as “the Test Case
principles” from federal awards is a necessary and important inquiry because
to do otherwise would see the Tribunal ignore the reasons why the modern
awards subject to the ACTU Application are in their current terms.
The Public Holidays Test Case principles are not necessary to achieve the
modern award objective
3.5. The ACTU asserts that its application and model provisions are consistent with
the principles emanating from the Public Holidays Test Case Decisions and
that inclusion of such terms is necessary to achieve the modern awards
objective.
15
Submissions of the ACTU relating to public holidays (AM2012/134) 13 August 2012; at 10
16
Ibid; at 12
Modern Awards Review 2012 17 September 2012 Ai Group 9
Public Holidays AM2012/134 and Others3.6. This contention is not sustainable. The status of the decisions as a test case
should have no bearing on the merits of the ACTU Application, as these
decisions were made under a very different industrial and statutory regime.
3.7. It is trite to say that FWA’s powers to vary modern awards are limited by the
terms of the FW Act and the modern awards objective. What is of greater
significance in the context of the ACTU Application is recognition of the
manner in which the Tribunal’s award making and variation powers have
changed in the last two decades. The criteria which were relevant to the Public
Holidays Test Case Decisions, as reflected in the Industrial Relations Reform
Act 1993 (1993 Act), are markedly different from the considerations which
now guide FWA’s functions. The is highlighted through comparison of the
objects of the respects Acts and those objects which relate specifically to the
award making powers of the Tribunals.
Industrial Relations Reform Act Fair Work Act 2009
1993
Objects of Act Object of this Act
Section 3 - The principal object of this Section 3 - The object of this Act is to
Act is to provide a framework for the provide a balanced framework for
prevention and settlement of cooperative and productive workplace
industrial disputes which promotes relations that promotes national
the economic prosperity and welfare economic prosperity and social
of the people of Australia by: inclusion for all Australians by:
(a) encouraging and facilitating the (a) providing workplace relations
making of agreements, between the laws that are fair to working
parties involved in industrial relations, Australians, are flexible for
to determine matters pertaining to the businesses, promote productivity and
relationship between employers and economic growth for Australia's future
employees, particularly at the economic prosperity and take into
workplace or enterprise level; and account Australia's international
labour obligations; and
(b) providing the means for:
(i) establishing and maintaining an (b) ensuring a guaranteed safety net
of fair, relevant and enforceable
effective framework for protecting
wages and conditions of employment minimum terms and conditions
through the National Employment
Modern Awards Review 2012 17 September 2012 Ai Group 10
Public Holidays AM2012/134 and Othersthrough awards; and Standards, modern awards and
national minimum wage orders; and
(ii) ensuring that labour standards
meet Australia's international (c) ensuring that the guaranteed
obligations; and safety net of fair, relevant and
(c) providing a framework of rights enforceable minimum wages and
conditions can no longer be
and responsibilities for the parties
involved in industrial relations which undermined by the making of
statutory individual employment
encourages fair and effective
bargaining and ensures that those agreements of any kind given that
such agreements can never be part of
parties abide by agreements between
a fair workplace relations system; and
them; and
(d) assisting employees to balance
(d) enabling the Commission to
prevent and settle industrial disputes: their work and family responsibilities
by providing for flexible working
(i) so far as possible, by conciliation; arrangements; and
and
(e) enabling fairness and
(ii) where necessary, by arbitration; representation at work and the
and prevention of discrimination by
(e) encouraging the organisation of recognising the right to freedom of
representative bodies of employers association and the right to be
and employees and their registration represented, protecting against unfair
under this Act; and treatment and discrimination,
providing accessible and effective
(f) encouraging and facilitating the procedures to resolve grievances and
development of organisations, disputes and providing effective
particularly by reducing the number of compliance mechanisms; and
organisations in an industry or
enterprise; and (f) achieving productivity and fairness
through an emphasis on enterprise-
(g) helping to prevent and eliminate level collective bargaining
discrimination on the basis of race, underpinned by simple good faith
colour, sex, sexual preference, age, bargaining obligations and clear rules
physical or mental disability, marital governing industrial action; and
status, family responsibilities,
pregnancy, religion, political opinion, (g) acknowledging the special
national extraction or social origin. circumstances of small and medium-
sized businesses.
Section 88A - The objects of this Section 134 - What is the modern
Part are to ensure that: awards objective?
(1) FWA must ensure that modern
(a) employees are protected by
awards, together with the National
awards that set fair and enforceable
Employment Standards, provide a fair
minimum wages and conditions of
employment that are maintained at a and relevant minimum safety net of
terms and conditions, taking into
Modern Awards Review 2012 17 September 2012 Ai Group 11
Public Holidays AM2012/134 and Othersrelevant level; and account:
(b) awards (other than paid rates (a) relative living standards and the
awards) act as a safety net of needs of the low paid; and
minimum wages and conditions of
(b) the need to encourage collective
employment underpinning direct
bargaining; and
bargaining; and
(c) the need to promote social
(c) awards are suited to the efficient
inclusion through increased workforce
performance of work according to the
participation; and
needs of particular industries and
enterprises, while employees' (d) the need to promote flexible
interests are also properly taken into modern work practices and the
account; and efficient and productive performance
of work; and
(d) regard is had, in connection with
making, reviewing and varying (e) the principle of equal
awards, to stable and appropriate remuneration for work of equal or
relativities based on skill, comparable value; and
responsibility and the conditions (f) the likely impact of any exercise of
under which work is performed, and modern award powers on business,
on the need for skill-based career including on productivity, employment
paths; and costs and the regulatory burden; and
(e) the Commission's functions and (g) the need to ensure a simple, easy
powers in relation to making and to understand, stable and sustainable
varying awards are performed and modern award system for Australia
exercised in a way that both: that avoids unnecessary overlap of
(i) gives employees prompt access to modern awards; and
fair and enforceable minimum wages (h) the likely impact of any exercise
and conditions of employment, so far of modern award powers on
as they do not already have them; employment growth, inflation and the
and sustainability, performance and
(ii) encourages the prevention and competitiveness of the national
settlement of industrial disputes by economy.
the making of agreements under Part
VIB.
(Emphasis added)
Modern Awards Review 2012 17 September 2012 Ai Group 12
Public Holidays AM2012/134 and Others3.8. The emphasised sections clearly reveal a greater focus on flexibility and
productivity, and also on the National Employment Standards having a
substantial role to play in establishing the safety net. Indeed, not only was
there no equivalent nationally legislated minimum conditions for employees
under the 1993 Act but the federal award system had not undergone award
simplification to ensure that awards only contained “allowable award matters”.
3.9. It is open for FWA to draw inferences against the ACTU Application from the
absence of reference to the principles which emanated from the Public
Holidays Test Case Decisions within the terms of Part 10A of the Workplace
Relations (Forward with Fairness) Act 2008, the Minister’s Award
Modernisation Request, the terms of the FW Act and the terms of the FW
Transitional Act. This absence of positive recognition is more telling given that
in some cases that which is expressed in these statutes and instruments
represents a direct departure from the test case principles. Indeed section 116
of the FW Act appears to be directly inconsistent with the ACTU’s Full-
time/Part-time Claim.
3.10. Similarities can also be drawn between the ACTU’s claims in these
proceedings and the claim made by the ACTU and other unions as part of the
Part 10A proceedings for inclusion of small business redundancy provisions in
all modern awards. In rejecting this claim the observations of the Full Bench of
the AIRC are apropos:
“[59] We have decided to deal with this matter by reference to the arbitral and
legislative history of redundancy pay for employees of small business. The
Commission’s Termination, Change and Redundancy decisions of 1984 are
the source of the general standard of redundancy pay in the federal
jurisdiction. In the second of those decisions the Commission provided an
exemption for small business employers from the obligation to pay redundancy
pay. Although the decision was of a test case nature, the small business
Modern Awards Review 2012 17 September 2012 Ai Group 13
Public Holidays AM2012/134 and Othersexemption was not included in all federal awards. It was specifically not
included in some awards because of the nature of the industry covered by the
award. The award governing the clothing industry was one such award. In the
Redundancy Case 2004 a Full Bench of the Commission considered
applications to review the test case standard established in 1984. The Bench
increased the existing severance pay scale and partially removed the small
business exemption. Pursuant to the decision small business employees were
entitled to redundancy pay but the scale of payments was lower than that
applying to other employees. The Parliament subsequently enacted legislation
to nullify the removal of the small business exemption in the Redundancy
Case 2004. Thereafter the position which had been introduced in 1984
continued to apply. The terms of the NES maintain the exemption for small
business.
[60] Seen in the context of the history we have set out, the terms of the NES
indicate an intention to adopt the Commission’s 1984 decision in relation to
small business—that employees of employers of fewer than 15 employees
should not be entitled to redundancy pay. We are obliged by the terms of the
NES to observe the small business exemption. We therefore conclude that the
draft provision would exclude a term of the NES contrary to the terms of s.30.
We also find that it is not necessary to include the provision in modern awards
generally to ensure the maintenance of the safety net. As a general rule,
therefore, the small business exemption will be maintained. We shall make an
exception for federal awards and industries in which there was no small
business exemption prior to the Redundancy Case 2004. Among the priority
modern awards the only award in this category is the Textile industry award.
The terms of the Textile industry award will include the small business
redundancy pay provisions previously in the Clothing Trades Award 1999. The
provision will only apply to the clothing industry.”
Modern Awards Review 2012 17 September 2012 Ai Group 14
Public Holidays AM2012/134 and Others3.11. Similarly the terms of the NES reflect no intention to adopt the principles of the
Public Holidays Test Case Decisions within the modern award system. Public
Holidays are a matter that is dealt with by the NES and the ability for a modern
award to also cover this area is tightly constrained. Indeed, the NES only
recognises eight specific public holidays as compared to the larger number
recognised in the Public Holidays Test Case Decisions. Also, in respect of
substitution of public holidays there is only one circumstance where the NES
provides for substitution beyond the holidays which may be substituted in
accordance with State or Territory laws;17 that is where an employee and
employer agree to the substitution.18
3.12. Ai Group submits that it is the legislature’s intention that entitlements as they
relate to public holidays are to be primarily regulated by the NES. It is for this
reason that sections 55 and 56 of the FW Act expressly limit the manner in
which NES matters can be dealt with in modern awards.
3.13. Further, the Award Modernisation Request expressly limited the manner in
which NES matters could be dealt with in modern awards:
“Interaction with the National Employment Standards
28. The NES consist of 10 legislated minimum conditions of employment for all
employees covered by the federal system. The NES will establish a simple
legislative framework of minimum entitlements with straightforward application
or machinery rules that are essential to the operation of each entitlement. The
NES will operate in conjunction with a relevant modern award to provide a fair
safety net of minimum entitlements for award covered employees.
29. A modern award may cross reference a provision of the NES. A modern
award may replicate a provision of the NES only where the Commission
17
Section 115(2) of the FW Act
18
Section 115(3) and 115(4) of the FW Act.
Modern Awards Review 2012 17 September 2012 Ai Group 15
Public Holidays AM2012/134 and Othersconsiders this essential for the effective operation of the particular modern
award provision. Where a modern award replicates a provision of the NES,
NES entitlements will be enforceable only as NES entitlements and not as
provisions of the modern award.
30. A modern award cannot exclude the NES or any provision of the NES.
However, a modern award can provide ancillary of incidental detail in relation
to the operation of an entitlement under the NES but only to the extent that the
term is not detrimental in any respect, when compared to the NES.
31. Subject to paragraphs 34 and 35 below, a modern award may include
industry-specific detail about matters in the NES.
32. Subject to paragraph 34 below, a modern award may supplement the NES
where the Commission considers it necessary to do so to ensure the
maintenance of a fair minimum safety net for employees covered by the
modern award, having regard to the terms of this request and the existing
award provisions (including under NAPSAs) for those employees, such as
small business redundancy entitlements or the rate of pay at which various
types of leave is taken. The Commission may only supplement the NES where
the effect of these provisions is not detrimental to an employee in any respect,
when compared to the NES.
33. The NES provides that particular types of provisions are able to be
included in modern awards even though they might otherwise be inconsistent
with the NES. The Commission may include provisions dealing with these
issues in a modern award. The NES allows, but does not require, modern
awards to include terms that:
• provide for loadings to be paid to school-based trainees and school-
based apprentices in lieu of certain entitlements;
----
Modern Awards Review 2012 17 September 2012 Ai Group 16
Public Holidays AM2012/134 and Others• provide for the substitution of public holidays by agreement between
an employer and employee;
-----
• specify further situations in which section 119 (redundancy pay)
does not apply to the termination of an employee’s employment.
------
35. Other than expressly authorised under this request, the Commission must
not include a term in a modern award on the basis that it would be an
allowable modern award matter where the substance of the matter is dealt
with under the NES.”
(Emphasis Added)
3.14. These facts, together with the clear departure within the NES from principles
contained in the Public Holidays Test Case Decisions, supports Ai Group’s
submission that the matters identified within the decisions should be given no
weight in considering whether the modern awards as presently drafted satisfy
the modern awards objective or require variation.
3.15. Should the Tribunal, despite the foregoing submissions, be minded to afford
additional weight to the ACTU Application by virtue of the Public Holidays Test
Case Decisions, Ai Group questions whether the model terms proposed
actually accord with the principles of the test case decisions as asserted by
the ACTU. This submission is enlivened when one has regard to the terms of
pre-modern awards that were varied pursuant to the test case decisions and
their alignment with that which is sought by the ACTU in its application.
3.16. No pre-modern awards were varied in similar terms to what the ACTU is
proposing.
Modern Awards Review 2012 17 September 2012 Ai Group 17
Public Holidays AM2012/134 and OthersImplementation of the Test Case principles in pre-modern awards
3.17. The process of award modernisation required the AIRC when making modern
awards to have particular regard to the terms of pre-modern awards to ensure
that employees were not disadvantaged and that employers’ costs did not
increase.19 Where there was a prevailing principal federal award in the
relevant industry the Full Bench of the AIRC often had particular regard to that
instrument in determining the terms of the modern award.20
3.18. Accordingly, the terms of pre-modern awards, particularly those used as a
basis for the development of the modern awards, are relevant to the issues
under consideration during the Review. To ignore the terms of pre-modern
awards would ignore a key reason why a modern award may be in particular
terms.
3.19. In this regard the ACTU’s submission that FWA should not be concerned with
whether the Public Holidays Test Case provisions were reflected in a particular
pre-modern award, but only whether the principles from the test case “are
relevant to the provision of a fair and relevant minimum safety net”21 entirely
disregards the “historical context”22 of the modern award, a matter which the
Full Bench has decided is “particularly relevant” to the Review.23
3.20. Modern awards created by the Part 10A process are regarded as modern
awards under the FW Act.24 Accordingly, the reasons for these decisions and
any constraints or considerations mandated as part of that process cannot be
ignored.
19
Minister for Employment and Workplace Relations Award Modernisation Request 9 November 2009
20
See for example Manufacturing and Associated Industries and Occupations Award 2010
21
Submissions of the ACTU relating to public holidays (AM2012/134) 13 August 2012; at 12
22
[2012] FWAFB 5600; at [85]
23
Ibid; at [85]
24
Item 4 of Schedule 5 of the FW Transitional Act and [2012] FWAFB 5600; at [85]
Modern Awards Review 2012 17 September 2012 Ai Group 18
Public Holidays AM2012/134 and Others4. ACTU Claim: “Public holidays falling on non-working days”
4.1. The ACTU seeks the following “model” award provision:
“Public Holidays falling on Non Working Days
1. This section applies to
a) full time employees who do not regularly work a five day, Monday to
Friday week; and
b) part-time (non casual) employees who work 5 days or more per week
averaged over a four week cycle.
2. When a public holiday falls on a day the employee would not be rostered
to work in any event, the employee must receive either:
a) an additional day’s wages;
b) an alternative day off at the base rate of pay, to be taken within 28
days; or
c) an additional day of annual leave.
3. The rate of pay for part-time employees must be calculated according to
the number of hours rostered per day, or if this is not fixed, the average
number of hours worked per day in the preceding 28 days.
4. The employee is entitled to elect the form of compensation they will
receive in accordance with the provisions of this clause.”
4.2. The ACTU’s proposed clause would have the following very costly impacts
upon employers:
Modern Awards Review 2012 17 September 2012 Ai Group 19
Public Holidays AM2012/134 and OthersFull-time employees
• A full-time employee who works under a pattern of hours whereby 8, 10 or
12 hour days or shifts are worked and who, as a consequence has one or
more week days off each week, fortnight or four week cycle, would be
entitled to one of the following forms of compensation (at the employee’s
election) for every public holiday which falls on a non-working day:
o An additional day’s wages (ie. 8, 10 or 12 hours wages for each
day, depending upon the length of the employee’s “day”);
o an alternative day off at the base rate of pay, to be taken within 28
days (ie. 8, 10 or 12 hours off for each day, depending upon the
length of the employee’s “day”);
o An additional day’s annual leave (ie. 8, 10 or 12 hours of extra leave
for each day, depending upon the length of the employee’s “day”,
together with annual leave loading or any higher shift loading for the
day).
• A full-time employee who works under a pattern of hours whereby 8, 10 or
12 hour days or shifts are worked and who, as a consequence has one or
more week days off each week, fortnight or four week cycle, would be
entitled to the above compensation for each public holiday which falls on
the weekend (eg. Easter Saturday and Easter Sunday), regardless of
whether Saturday and Sunday are ordinary working days for the employee.
• A full-time employee whose ordinary hours fall between Monday and
Friday and who regularly works overtime on a weekend would be entitled
to an additional day’s wages, day off or day of annual leave for each public
holiday which falls on the weekend despite the fact that Saturday and
Sunday are not ordinary working days for the employee.
Modern Awards Review 2012 17 September 2012 Ai Group 20
Public Holidays AM2012/134 and Others• Given that it is unclear what is meant by the term “a day the employee
would not be rostered to work in any event”, a full-time employee may be
entitled to an additional day’s wages, day off or day of annual leave even
when the employee works overtime on a public holiday and receives public
holiday penalty rates.
Part-time employees
• A part-time employee who works under a pattern of hours whereby the
employee works 5 days or more per week averaged over a four week cycle
would be entitled to an additional day’s wages, day off or day of annual
leave for each public holiday which falls on a non-working week day for the
employee.
• A part-time employee who works under a pattern of hours whereby the
employee works 5 days or more per week averaged over a four week cycle
would be entitled to the above compensation for each public holiday which
falls on the weekend, regardless of whether Saturday and Sunday are
ordinary working days for the employee.
• A part-time employee who does not work 5 ordinary days or more per week
but who works some overtime would in many cases be entitled to an
additional day’s wages, day off or day of annual leave for each public
holiday which falls on a non-working day for the employee (ie. where the
ordinary time and overtime added up to 5 days or more).
• Given that it is unclear what is meant by the term “a day the employee
would not be rostered to work in any event”, a part-time employee may be
entitled to an additional day’s wages, day off or day of annual leave even
when the employee works overtime on a public holiday and receives public
holiday penalty rates.
Modern Awards Review 2012 17 September 2012 Ai Group 21
Public Holidays AM2012/134 and Others4.3. Ai Group strongly opposes the unions’ claim. The ACTU’s clause appears to
be based somewhat on the clause which was negotiated between Ai Group
and the Metal Trades Federation of Unions (AMWU, AWU, CEPU, CFMEU,
LHMU and NUW) during the metal industry award simplification negotiations
between 1996-98, but many employer protections in the clause have been
removed. A similar clause to the one negotiated between Ai Group and the
MTFU is in the Manufacturing and Associated Industries and Occupations
Award 2010 (Manufacturing Modern Award) at subclause 44.3.
Background to subclause 44.3 of the Manufacturing Modern Award
4.4. As part of the package of changes to implement the 38 hour week in the early
1980s the following paragraph (k) was included within Clause 22 – Holidays
and Sunday Work, of the Metal Industry Award 1984:
“Rostered day off falling on public holiday
(k)(i) An employee who works continuous work and who by the
circumstances of the arrangement of his ordinary hours of work is
entitled to a rostered day off which falls on a public holiday prescribed
by this clause shall, at the discretion of the employer, be paid for that
day 7 hours 36 minutes at ordinary rates or have an additional day
added to his annual leave. This provision shall not apply when the
holiday on which he is rostered off falls on a Saturday or Sunday.
(ii) In the case of an employee whose ordinary hours of work are arranged
in accordance with subclauses (b)(iii) or (b)(iv) or (e) of clause 18A, the
weekday to be taken off shall not coincide with a public holiday fixed in
accordance with subclauses (a), (b) or (c) hereof. Provided that, in the
event that a public holiday is prescribed after the employee has been
given notice of his weekday off in accordance with subclause (g) of
clause 18A of this award and the public holiday falls on the weekday the
Modern Awards Review 2012 17 September 2012 Ai Group 22
Public Holidays AM2012/134 and Othersemployee is to take off, the employer shall allow the employee to take
the day off on an alternative weekday.
4.5. During the award simplification negotiations between Ai Group and the Metal
Trades Federation of Unions (MTFU) in 1996-1998, Ai Group proposed a new
clause to replace the above clause given that the clause did not adequately
address:
• Situations where 10 or 12 hour shifts were worked;
• Flexible working hours arrangements where hours were banked.
4.6. A new clause was negotiated between Mr Stephen Smith of Ai Group and Mr
Julius Roe of the AMWU and the clause was inserted into the Metal,
Engineering and Associated Industries Award 1998 by consent. The final
clause resulted from what became an extensive negotiation process. In fact, of
all the clauses in the simplified award this clause was the subject of the most
discussion and negotiation between Ai Group and the unions.
5.1. The agreed clause was inserted into the Award through the Metal Industry
Award Simplification Decision (Print P9311) of Her Honour Senior Deputy
President Marsh. The clause is reproduced below:
7.5.4 Rostered day off falling on public holiday
(a) Except as provided for in 7.5.4(b) where a full-time employee’s
ordinary hours of work are structured to include a day off and such day
off falls on a public holiday, the employee is entitled, at the discretion
of the employer, either:
(i) 7 hours and 36 minutes pay at ordinary rates; or
(ii) 7 hours 36 minutes added to his or her annual leave; or
(iii) a substitute day off on an alternative week day.
Modern Awards Review 2012 17 September 2012 Ai Group 23
Public Holidays AM2012/134 and OthersThis shall not apply where the rostered day off falls on a Saturday or a
Sunday.
(i) Where an employee has credited time accumulated (see
5.11.6), then such credited time should not be taken as a day
off on a public holiday.
(ii) If an employee is rostered to take credited time as a day off
on a week day and such week day is prescribed as a public
holiday after the employee was given notice of the day off,
then the employer shall allow the employee to take the time
off on an alternative week day.
(iii) Paragraphs (i) and (ii) do not apply in relation to days off
which are specified in an employee’s regular roster or pattern
of ordinary hours. Paragraph 7.5.4(a) shall apply in such
circumstances.”
4.7. In order to explain the provisions of the new, simplified award to member
companies, Ai Group published an annotated version of the award in 1998.
The relevant annotation for subclause 7.5.4 is reproduced below:
Ai Group ANNOTATION:
Subclause 7.5.4 is an important provision which is designed to cater for the
wide variety of working hours arrangements which might be in operation under
this Award. It is designed to provide a practical and equitable arrangement
when a public holiday falls on a non-working day for a particular employee.
Two distinctly different situations are provided for:
Situation 1: where the public holiday falls on a day off which is specified in an
employee’s ‘regular roster or patter of ordinary hours”
For example:
Modern Awards Review 2012 17 September 2012 Ai Group 24
Public Holidays AM2012/134 and Others• a rostered day off for an employee working under a 19 day, 4 week
cycle; or
• days off which are specified in an 8, 10 or 12 hour shift roster.
Situation 2: where time has been accumulated by an employee and such
time is taken off in a flexible manner rather than in accordance
with a regular roster or pattern.
For example, where time has been banked under the time off in lieu of
overtime arrangement in 6.4.1(d).
The provisions of 7.5.4(a) apply to situation 1. The employer has the discretion
to choose which of the three alternatives will apply on each occasion that a
public holiday falls on a day off.
The provisions of subclause 7.5.4(b) apply to Situation 2. In such
circumstances, an employer cannot require an employee to take accumulated
time off on a public holiday.
Employees are not entitled to the benefits set out in subclause 7.5.4 in respect
of public holidays which fall on a Saturday or Sunday.
4.8. On 1 August 2008, during the Priority Stage of the Award Modernisation
Process, Ai Group and the MTFU tendered a joint draft award. The relevant
clause (6.5.5) in the joint draft award was identical to subclause 7.5.4 above.
4.9. The clause which the AIRC Full Bench included in the Manufacturing Modern
Award has slightly simpler wording but has the same effect as subclause 7.5.4
above. The relevant clause is reproduced below:
Modern Awards Review 2012 17 September 2012 Ai Group 25
Public Holidays AM2012/134 and Others“44.3 Rostered day off falling on public holiday
(a) Except as provided for in clauses 44.3(b) and (c) and where the
rostered day off falls on a Saturday or a Sunday, where a full-time
employee’s ordinary hours of work are structured to include a day off
and such day off falls on a public holiday, the employee is entitled, at
the discretion of the employer, to either:
(i) 7.6 hours of pay at the ordinary time rate; or
(ii) 7.6 hours of extra annual leave; or
(iii) a substitute day off on an alternative week day.
(b) Where an employee has credited time accumulated pursuant to clause
34.6, then such credited time should not be taken as a day off on a
public holiday.
(c) If an employee is rostered to take credited time accumulated pursuant
to clause 34.6, as a day off on a week day and such week day is
prescribed as a public holiday after the employee was given notice of
the day off, then the employer must allow the employee to take the
time off on an alternative week day.
(d) Clauses 44.3(b) and (c) do not apply in relation to days off which are
specified in an employee’s regular roster or pattern of ordinary hours
as clause 44.3(a) applies to such days off.”
The key differences between the ACTU’s proposed ‘model’ clause and
subclause 44.3 in the Manufacturing Modern Award
4.10. Key differences between the ACTU’s proposed ‘model’ clause and subclause
44.3 in the Manufacturing Modern Award are:
Modern Awards Review 2012 17 September 2012 Ai Group 26
Public Holidays AM2012/134 and Others• The ACTU’s clause extends to public holidays which fall on weekends,
whereas subclause 44.3 excludes public holidays which fall on
weekends;
• The ACTU’s clause applies to full-time and part-time employees
whereas subclause 44.3 only applies to full-time employees;
• The ACTU’s clause has application with regard to ordinary hours and
overtime hours, whereas subclause 44.3 only deals with patterns of
ordinary hours;
• Under subclause 44.3, the employer has the right to determine which of
the three compensation options will be implemented whereas under the
ACTU’s clause the employee is given the right to determine this;
• Under subclause 44.3, the entitlement is “7.6 hours of pay” whereas
under the ACTU’s clause the entitlement is “an additional day’s wages”
which will be 8, 10 or 12 hours depending upon the length of the
employee’s “day”;
• Under subclause 44.3, the entitlement is “7.6 hours of extra annual
leave” whereas under the ACTU clause the entitlement is “an additional
day of annual leave” which will be 8, 10 or 12 hours (plus leave loading
or any higher shift loading) depending upon the length of the
employee’s “day”;
• Under the ACTU’s clause the alternative day off must be taken within
28 days, whereas this restriction is not included in subclause 44.3.
4.11. Including a clause similar to 44.3 in the Manufacturing Modern Award in all
modern awards would be costly for thousands of employers because this
clause is relatively generous and is not included in most modern awards.
Modern Awards Review 2012 17 September 2012 Ai Group 27
Public Holidays AM2012/134 and Others4.12. Of course, the far more generous clause proposed by the ACTU would result
in huge cost increases for employers. There would also be a significant
reduction in productivity given the large amount of extra time off that
employees would receive.
Public holiday entitlements for shift workers
4.13. The ACTU’s clause would result in employees who regularly work on
weekends receiving an additional day off whenever a public holiday falls on a
weekend.
4.14. For many employees this would be “double-dipping” because it is common for
awards to provide for a fifth week of annual leave for shift workers who are
regularly rostered to work on public holidays which fall on a weekend. Such
employees receive the additional week of annual leave in addition to public
holiday penalty rates for working on the holiday.
4.15. Ai Group opposes the ACTU’s proposed clause, and opposes the concept of a
model clause dealing with public holidays.
Public holiday entitlements for part-time employees
4.16. There is a longstanding principle which applies to public holiday entitlements
for part-time employees. That is, a part-time employee is entitled to be paid
when absent on a public holiday which falls on an ordinary working day for the
employee, but not on other days.
4.17. This principle is enshrined within section 116 of the FW Act as follows:
“116 Payment for absence on public holiday
If, in accordance with this Division, an employee is absent from his or
Modern Awards Review 2012 17 September 2012 Ai Group 28
Public Holidays AM2012/134 and Othersher employment on a day or part-day that is a public holiday, the
employer must pay the employee at the employee’s base rate of pay for
the employee’s ordinary hours of work on the day or part-day.
Note: If the employee does not have ordinary hours of work on the
public holiday, the employee is not entitled to payment under this
section. For example, the employee is not entitled to payment if the
employee is a casual employee who is not rostered on for the public
holiday, or is a part-time employee whose part-time hours do not
include the day of the week on which the public holiday occurs.
(Emphasis added)
4.18. The Explanatory Memorandum for the Fair Work Bill 2008 provides the
following explanation of section 116:
“460. Clause 116 entitles an employee to payment when absent from work
on a public holiday. Where an employee is absent on a day or part-day that is
a public holiday under this Division, the employer is liable to pay the employee
at his or her base rate of pay for ordinary hours of work.
461. An employee is not entitled to any payment for absence on a public
holiday if they would not ordinarily have worked on that day.
Modern Awards Review 2012 17 September 2012 Ai Group 29
Public Holidays AM2012/134 and OthersIllustrative example
Erika usually works overtime in addition to her ordinary hours of work on
Tuesdays, receiving penalty rates for the overtime hours under a modern
award. Erika is absent on the public holiday on Tuesday, 26 January 2010.
Erika is entitled to her base rate of pay for her ordinary hours. She is not
entitled to payment for the overtime hours she would have worked had it not
been a public holiday.
Erika’s colleague Toby is a part-time employee who is rostered to work
Wednesday to Friday only. As Toby’s ordinary hours of work do not include
Tuesdays, Toby is not entitled to payment for the public holiday on 26 January
2010.
Another employee, Holger is on unpaid parental leave for the first half of 2010.
Holger would not be entitled to payment for the public holiday on 26 January
2010.”
(Emphasis added)
4.19. The principle in section 116 of the FW Act was enshrined within the Metal,
Engineering and Associated Industries Award 1998 when subclause 7.5.4
(Rostered Day Off Falling on a Public Holiday) was inserted into the award by
consent. Paragraph 4.2.4(e) of this award stated:
“4.2.4(e) Public Holidays
Where the part-time employee’s normal paid hours fall on a public
holiday prescribed in clause 7.5 and work is not performed by the,
such employee shall not lose pay for the day. Where the employee
works on the holiday, such employee shall be paid in accordance
with Clause 7.5 of this award.”
(Emphasis added)
Modern Awards Review 2012 17 September 2012 Ai Group 30
Public Holidays AM2012/134 and Others4.20. Further, the principle was enshrined within the Manufacturing Modern Award
when subclause 44.3 (Rostered Day Off Falling on a Public Holiday) was
inserted into the award by consent. Subclause 13.9 of this award states:
“13.9 Public Holidays
(a) Where the part-time employee’s normal paid hours fall on a
public holiday prescribed in the NES and work is not performed
by the employee, such employee shall not lose pay for the day.
(b) Where the part-time employee works on the public holiday, the
part-time employee must be paid in accordance with clauses
32.4(e), 36.2(f), 37.5 and 40.9.”
(Emphasis added)
4.21. The ACTU’s proposed clause:
• Is inconsistent with section 116 of the FW Act;
• Is inconsistent with the part-time provisions in numerous awards (e.g. see
subclause 13.9 of the Manufacturing Modern Award as reproduced above);
• Would operate very unfairly for employers.
Modern Awards Review 2012 17 September 2012 Ai Group 31
Public Holidays AM2012/134 and Others5. ACTU Claim: “Rostered Day Off must not be taken on public
holiday”
5.1. The ACTU seeks the following “model” award provision:
“Rostered Day Off must not be taken on public holiday
An employee who, by the arrangement of their ordinary hours of work, is
entitled to a rostered day off, is entitled to take the rostered day off on an
ordinary working day. The rostered day off must not be scheduled on a public
holiday. Where a holiday is prescribed or declared, after the employee has
been notified of the RDO, and that holiday falls on the employee’s RDO, the
employer must allow the employee to take the RDO on an alternative
weekday.”
5.2. The above ACTU clause is illogical given that their proposed clause for “Public
Holidays Falling on Non Working Days” deals with overlapping circumstances
and is inconsistent. RDOs are of course non-working days.
5.3. The clause agreed upon between Ai Group and the MTFU for the Metals
Award 1998 and Manufacturing Modern Award (subclause 44.3) is informative
when considering the merits (or lack thereof) of the ACTU’s proposed model
clauses.
5.4. Under subclause 44.3 of the Manufacturing Modern Award, regular RDOs are
dealt with in paragraph (a) regardless of whether an RDO falls every week,
every fortnight or every 20th working day. In such circumstances the employer
can decide which of three compensation options to implement. In
circumstances where an employee does not have a regular rostered day off
but rather the employee banks time more flexibly, paragraphs 44.3(b) and (c)
operate to ensure that the employer cannot require the employee to take the
time off on a public holiday.
Modern Awards Review 2012 17 September 2012 Ai Group 32
Public Holidays AM2012/134 and Others5.5. Ai Group opposes the ACTU’s proposed clause and opposes the concept of a
model clause dealing with this topic.
6. ACTU Claim: “Christmas Day Loading”
6.1. The ACTU’s Christmas Day claim seeks the inclusion of a model clause
relating to public holidays which will result in an additional 50% loading for
work performed on Christmas Day in circumstances where that day falls on a
Saturday or Sunday and is not regarded as the public holiday.
6.2. This situation arises when a State or Territory declares a substitute day as the
Christmas Day holiday (typically the following Monday) when 25 December
falls on a Saturday or Sunday as occurred in 2010 and 2011.
6.3. An application similar to the Christmas Day claim was recently the subject of a
decision of the Full Bench of FWA.25 The AMWU, United Voice, ANF and
ASU applied to vary the Manufacturing Modern Award, Cleaning Services
Award 2010, Security Services Industry Award 2010, Nurses Award 2010 and
the Banking, Finance and Insurance Award 2010 respectively on the basis that
a variation was necessary to achieve the modern awards objective (section
157 of the FW Act) and the non-inclusion of a Christmas Day loading was an
error (section 160 of the FW Act).
6.4. The Full Bench of FWA rejected the applications by the unions (and an
application by Ai Group relating to public holiday penalty rates), in strongly
contested proceedings.
6.5. In making their decision, the Full Bench of FWA considered the Public
Holidays Test Case and said:
25
[2010] FWAFB 9290
Modern Awards Review 2012 17 September 2012 Ai Group 33
Public Holidays AM2012/134 and Others“ [44] It is apparent the Public Holiday Test Case decision of 1995 commended
the additional penalty rate in respect of Christmas Day as a principle that may
need adaption to specific circumstances. Further, while the Full Bench
expected the principle would generally be implemented, the Full Bench
acknowledged there were pre-existing diverse practices and anticipated the
principle would be applied sensitively and flexibly with due regard to special
circumstances.
[45] The additional penalty rate in respect of Christmas Day is not a prevailing
standard in the underlying award-based transitional instruments that
previously covered the employers and employees now covered by the modern
Manufacturing Award, modern Cleaning Award, modern Security Award or
modern Nurses’ Award.
[46] In respect of the modern Finance Award, the additional penalty rate where
Christmas Day both falls on a weekend and is not a “public holiday” was
specifically raised during the course of the AIRC proceedings concerning the
making of the modern Finance Award. However, the AIRC did not include it in
the modern Finance Award.
[47] Fair Work Australia’s ability to vary modern awards outside the four yearly
reviews of modern awards is constrained by the Fair Work Act. We do not
think the non-inclusion of the additional penalty rate in respect of Christmas
Day in the modern awards before us can be regarded as an error in the sense
intended by s.160 of the Fair Work Act. We have come to this conclusion
having regard to the caution expressed by the Full Bench in the Public
Holidays Test Case decision of 1995 and the other factors to which we have
just referred concerning the absence of a prevailing standard in respect of the
additional penalty rate in the relevant underlying instruments and the
additional penalty rate having been specifically raised previously but not
Modern Awards Review 2012 17 September 2012 Ai Group 34
Public Holidays AM2012/134 and OthersYou can also read
