| [2022] FWC 1202 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
ss.157, 160—Variation of modern award
Australian Municipal, Administrative, Clerical and Services Union
(AM2017/51)
LABOUR MARKET ASSISTANCE INDUSTRY AWARD 2020
[MA000099]
VICE PRESIDENT HATCHER |
SYDNEY, 17 MAY 2022 |
Application to vary a modern award to remove ambiguity or uncertainty – Labour Market Assistance Industry Award 2020
[1] The Australian Municipal, Administrative, Clerical and Services Union (ASU) has made an application 1 under s 160 of the Fair Work Act 2009 (Cth) (FW Act) to vary the Labour Market Assistance Industry Award 2020 (2020 LMAI Award). The President of the Commission has directed me to exercise the Commission’s powers under ss 157 and 160 of the FW Act in relation to this application.
[2] In its application the ASU contended that provisions of the 2020 LMAI Award concerning penalty rates for casuals working on a public holiday are ambiguous and uncertain. Specifically, the ASU contended that clause 29.2, titled “Payment for working on a public holiday”, creates ambiguity and uncertainty because it does not refer to the applicable provisions for casual employees.
[3] Clause 29.2 provides: “Payment for working on a public holiday is provided for in clause 21.2(c)”.
[4] Clause 21.2(c) applies only to full-time and part-time employees and provides:
(c) Public holidays
An employee who, with the approval of the employer, works on a public holiday will be paid at the following rates:
(i) 250% of the minimum hourly rate for work performed between 6.00 am and 8.00 pm, and not exceeding 10 hours in one day; or
(ii) 350% of the minimum hourly rate for work performed outside the hours in clause 21.2(c)(i) or in excess of 10 hours in one day.
[5] Clause 21.3(c) applies to casual employees and provides:
(c) Public holidays
An employee who, with the approval of the employer, works on a public holiday will be paid at the following rates:
(i) 312.5% of the minimum hourly rate for work performed between 6.00 am and 8.00 pm, and not exceeding 10 hours in one day; or
(ii) 437.5% of the minimum hourly rate for work performed outside the hours in clause 21.3(c)(i) or in excess of 10 hours in one day.
[6] The ASU contended that this ambiguity should be rectified by varying clause 29.2 to also include a cross-reference to clause 21.3(c), which contains the rate of pay for casual employees working on a public holiday.
[7] In addition, the ASU contended in its application that further amendments to Schedule B.2.1 of the 2020 LMAI Award were required to reflect the actual rates of pay applicable to casual employees in accordance with the percentages prescribed by clause 21.3(c). It was submitted that this was a further ambiguity or uncertainty which should be rectified by the Commission. The ASU sought that the Commission vary Schedule B.2.1 to rectify this uncertainty or ambiguity.
[8] I held a directions hearing on 27 October 2021 at which the ASU’s was the only appearance.
[9] I subsequently issued a decision 2 on 5 April 2022 (April decision) in which I stated that it was my preliminary view that there was ambiguity and uncertainty in terms of the interaction between clause 21.3(c), clause 29.2 and clause B.2.1 of Schedule B (as contended by the ASU), but I did not consider that it should be remedied by varying the 2020 LMAI Award in the manner proposed by the ASU. My reasons are set out in that decision.
[10] I stated that my provisional view was that the penalty rates in both clauses 21.2(c)(ii) and 21.3(c)(ii) of the 2020 LMAI Award were in error. I expanded upon my provisional view in paragraph [28] of the April decision as follows: 3
“… The rate for all hours worked by full-time or part-time employees on a public holiday, whether ordinary time or overtime, should be 250%, and the equivalent rate for casual employees should be 312.5%, inclusive of the casual loading. The rates specified in Schedule B to the LMAI Award should be varied so that they are calculated in accordance with these percentages, and the cross-reference in clause 29.2 should be varied as proposed by the ASU. This error should be corrected pursuant to either s 157 or 160 of the FW Act.”
[11] A draft determination was published in conjunction with the April decision setting out the proposed variations to the 2020 LMAI Award to give effect to the provisional view.
[12] Interested parties were invited to respond to the provisional view within 14 days of the April decision being issued (that is, by 19 April 2022). As at that date, no party had provided any response to the provisional view. For more abundant caution, on 22 April 2022 my associate contacted the ASU to check whether it intended to provide a response to my provisional view. The ASU’s initial response to this inquiry, sent by its National Industrial Officer by email, was:
“The ASU’s preliminary view is that it is unlikely we will file any further submissions.
I have been unable to confirm our position with one key stakeholder.
I, respectfully, request an extension to COB Tuesday 27 April [sic] to confirm our response.”
[13] The ASU was granted an extension of time until Wednesday 27 April 2022 to file any submissions in response. 4 The ASU filed a submission on 27 April 2022 opposing the provisional view.
The ASU’s submissions
[14] In its submission, the ASU relied on the approach set out in its application as the correct approach to addressing the ambiguity contained in the 2020 LMAI Award. Specifically, the ASU contends that I should not proceed with my provisional view to vary clauses 21.2(c)(ii) and 21.3(c)(iii) of the 2020 LMAI Award, as the variations are not permitted because the preconditions for the Commission to exercise power under ss 157 and 160 of the FW Act have not been satisfied.
[15] As to s 157 of the FW Act, which permits the Commission to vary modern awards if it is necessary to achieve the modern awards objective, the ASU submitted that the Commission did not provide any reasons in the April decision as to why the proposed changes to the 2020 LMAI Award should be made pursuant to s 157. In any event, the ASU submitted, it did not consider that the proposed changes are indeed required to meet the modern awards objective under s 157 of the FW Act. The ASU does not provide any further reasons for its position in its submissions.
[16] As to s 160, which permits the Commission to vary modern awards to remove ambiguity or uncertainty or to correct error, the ASU submits that, consistent with Re Australian Industry Group, 5 in order for the power in s 160 to be available, the Commission must identify a mistake that did not support its intention. The ASU does not consider that this condition has been met, because the intention of the Commission in drafting clauses 21.2(c)(ii) and 21.3(c)(ii) of the 2020 LMAI Award was clear at the time, and is supported by the current drafting.
[17] Further, the ASU submits that in reaching my provisional view I misunderstood the Full Bench Statement in 4 yearly review of modern awards – Award stage – Group 3 (Group 3 Decision). 6 In support of this position, the ASU submits that:
• My reference in the decision to the following extract from the Group 3 Decision, which referred to submissions made by Australian Business Industrial and the NSW Business Chamber (ABI), was based on a misinterpretation:
“[291] ABI submit that clause 20.2 of the exposure draft—which provides that ‘An employee who works on a public holiday will be paid at 250% of the minimum hourly rate for all time worked’— should be amended so that it instead reads as follows:
‘Payment for working on public holiday is provided for in clause 14.2(c).’
[292] ABI submit that having the entitlement in two places will cause confusion. Furthermore, ABI support the Commission’s redrafting of clause 14.2(c) of the exposure draft, which has been redrafted in order to clarify the applicable penalty rates for ordinary hours and outside the span of ordinary hours, in a manner consistent with the Plain Language Guidelines. We agree with ABI’s proposed change and will amend the exposure draft accordingly.”
• My misunderstanding lay in interpreting paragraph [291] of the Group 3 Decision as meaning that an employee will be paid 250 percent of their ordinary rate of pay for all time worked. Rather, it was submitted that the ABI’s submissions addressed the question of how clause 20.2 interacted with clause 14.2(c) in circumstances where clause 14.2(c) provides for 250 percent of the minimum hourly rate for time worked during ordinary hours and 350 percent of the minimum hourly rate for time worked outside of ordinary hours. The ASU contended that in this context, the ABI’s submission was confined to ensuring there was only one point of reference to the 250 percent public holiday rate, and not intending to raise any concerns about the rate of 350 percent of the minimum hourly rate being paid for hours worked outside the span of ordinary hours.
• The final determination which was ultimately made by the Commission in relation to the 2020 LMAI Award is consistent with this understanding of the ABI’s submissions. 7
[18] In this context, the ASU has submitted that my provisional view was based on a disagreement with how s 116 of the FW Act interacts with the 2020 LMAI Award, and that an error which would enliven the Commission’s power under s 160 has not been identified. The ASU submits that it disagrees with my interpretation of s 116 of the FW Act as expressed in the decision, in particular, that s 116 does not apply to overtime hours worked on a public holiday. The ASU notes that s 55 of the FW Act permits modern awards to supplement provisions contained in the National Employment Standards (NES). In the ASU’s submission, clauses 21.2(c)(ii) and 21.3(c)(ii) of the 2020 LMAI Award should be read as supplementing s 116 of the FW Act to the benefit of employees. The ASU does not consider that any of the terms of the NES, nor ss 55 or 56 are contravened by the provisions.
[19] In these circumstances, the ASU submits that the Commission should not vary clauses 21.2(c)(ii) and 21.3(c)(ii) as proposed, and relies on its position as to the variation of these clauses as stated in its application of 14 October 2021, which have been summarised above.
[20] The ASU’s submissions do not address the substantive matter identified in the April decision which formed the basis of the provisional view, namely that when the Commission made the 2020 LMAI Award in the course of the 4 yearly review of modern awards, which took effect on 4 May 2020, it unintentionally increased the penalty rate for overtime performed on a public holiday outside of ordinary hours from 250% to 350% for full-time and part-time employees. This was the ultimate consequence of an exposure draft published by the Commission in 2015 which redrafted the public holiday overtime provisions based on a misinterpretation of the meaning of the existing provisions in the Labour Market Assistance Industry Award 2010 (2010 LMAI Award). Notably, the ASU does not contend that, prior to 4 May 2020, the 2010 LMAI Award provided for a 350% penalty rate for overtime performed outside of ordinary hours on a public holiday, nor does it dispute my interpretation of the relevant provisions of the 2010 LMAI Award and the pre-modernisation awards from which they were derived.
[21] As set out above, the ASU contends that, in the April decision, I misinterpreted paragraph [291] of the Group 3 Decision in that I read it as meaning that the Full Bench intended to award a penalty rate of 250% for all time worked on public holidays. That proposition is rejected because I did not say in my decision that I interpreted paragraph [291] in this way at all. It may be accepted that the Full Bench ultimately did intend to make clause 21.2(c) in the terms in which it now appears. As explained in the April decision at paragraph [22], that intention was founded on the agreement of the parties, noted by the Full Bench at paragraphs [72]-[73] of its decision of 6 July 2017, that the relevant provisions of the exposure draft reflected the position operating under the 2010 LMAI Award. However, that agreed position was incorrect, and led to the result whereby the public holiday penalty rate for overtime worked outside of ordinary hours was significantly increased – a result which the Full Bench plainly did not intend.
[22] As to the ASU’s submission concerning ss 55, 56 and 116 of the Fair Work Act 2009 (FW Act), the April decision did not anywhere suggest that clause 21.2(c) is inconsistent with s 116, contravenes s 55 or is of no effect by virtue of s 56. The only point about s 116 made in the decision is that it assists in understanding how the public holiday provisions of the 2010 LMAI Award were intended to operate.
[23] Accordingly, the ASU’s submissions do not raise anything which causes me to depart from the provisional view stated in the earlier decision. I confirm that provisional view. The remaining question is therefore the statutory power which should be exercised to give effect to that provisional view. In paragraph [28] of the earlier decision, I referred to either s 157 or s 160 of the FW Act as being available for this purpose.
[24] The ASU’s submission concerning the capacity to make the variations proposed in the earlier decision and the draft determination under s 160 of the FW Act has substance. It may be accepted that the errors in modern awards which s 160(1) empowers the Commission to correct are those arising from a mistake whereby the terms of a modern award do not reflect what the Commission had intended in making or varying the term. 8 In this case, as earlier stated, clause 21.2(c) is expressed in the terms intended by the Full Bench which conducted the 4 yearly review of the 2010 LMAI Award, albeit that it proceeded on the basis of an incorrect agreed position of the parties about the meaning of the relevant provisions of the 2010 LMAI Award. Accordingly, it would be unsafe to make any variations pursuant to s 160.
[25] I consider that the variations set out in the draft determination should be made under s 157(1)(a) of the FW Act by the Commission acting on its own initiative pursuant to s 157(3)(a). I am satisfied that the variation is necessary to achieve the modern awards objective in s 134(1). The safety net afforded by the 2020 LMAI Award is not fair or relevant because, as explained in the earlier decision and this decision, the penalty rate for overtime worked outside of ordinary hours on public holidays was increased from 250% to 350% from 4 May 2020 as a result of an error concerning the meaning and effect of the public holiday provisions in the 2010 LMAI Award. There was never a proper basis to increase the penalty rate in this way and no such increase was intended by the Commission. In reaching this conclusion I have taken the matters specified in s 134(1) into account in the following way (using the paragraph designations used in the subsection):
(a) Some of the lower classifications in the 2020 LMAI Award may be characterised as low paid. However, there is nothing before me which suggests that the amount of the penalty rate paid on overtime worked outside of ordinary hours on public holidays has any significant or even discernible role in respect of living standards and the needs of the low paid. Having regard to the nature of the work covered by the 2020 LMAI Award, I consider that it highly likely that such work is only very rarely performed. Accordingly, this is a neutral consideration.
(b) I do not consider that either the current clauses 21.2(c) and 21.3(c) or the proposed variations have any role in encouraging collective bargaining. This is therefore a neutral consideration.
(c) I do not consider that either the current clauses 21.2(c) and 21.3(c) or the proposed variations would promote social inclusion through increased workforce participation. This is therefore a neutral consideration.
(d) I do not consider that either the current clauses 21.2(c) and 21.3(c) or the proposed variations would promote flexible modern work practices and the efficient and productive performance of work. This is therefore a neutral consideration.
(da) Both the current clauses and the proposed variations provide additional remuneration for working overtime on public holidays. I accordingly consider this to be a neutral consideration.
(e) This consideration is not relevant.
(f) The variations may, in a very small way, operate to reduce employment costs, but will not otherwise have any discernible impact on business, including on productivity, employment costs and the regulatory burden. This is a minor factor weighing in favour of the variations.
(g) To the extent that the variations will restore the position which prevailed without difficulty until 4 May 2020, this will contribute to the stability and sustainability of the modern award system, albeit in a minor way. This weighs to a small degree in favour of the variations.
(h) The variations will have no impact, positive or negative, on employment growth, inflation and the sustainability, performance and competitiveness of the national economy. This is a neutral consideration.
[26] For the above reasons, the variations proposed in the draft determination will be made, and shall take effect from 23 May 2022. A determination to effect the variations will be published in conjunction with this decision. The ASU’s application to vary the 2020 LMAI Award under s 160 is dismissed.
VICE PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR741703>
1 ASU, Application, filed 14 October 2021
3 Ibid at [27]
4 Correspondence - extension of time
5 [2021] FWCFB 115 at [45]
8 4 yearly review of modern awards – Vehicle Manufacturing, Repair Services and Retail Award 2010 [2016] FWCFB 4418 at [73]