DECISION

Fair Work Act 2009
s.160—Variation of modern award

Australian Municipal, Administrative, Clerical and Services Union
(AM2017/51)

LABOUR MARKET ASSISTANCE INDUSTRY AWARD 2020
[MA000099]

Application to vary a modern award to remove ambiguity or uncertainty – Labour Market Assistance Industry Award 2020

Introduction

[1] The Australian Municipal, Administrative, Clerical and Services Union (ASU) has made an application 1 pursuant to s 160 of the Fair Work Act 2009 (FW Act) to vary the Labour Market Assistance Industry Award 2020 (LMAI Award). Section 160 empowers the Commission to make a determination varying a modern award to remove an ambiguity or uncertainty or correct an error. In its application, the ASU contends that the provisions of the LMAI Award concerning the penalty rates for casuals when working on a public holiday are ambiguous and uncertain.

[2] Clause 21 of the LMAI Award is entitled “Overtime”. Clause 21.2(c) of the LMAI Award provides, in respect of full-time and part-time employees, that an employee who works on a public holiday (with the approval of the employer) will be paid at the rate of 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, and at the rate of 350% of the minimum hourly rate for work outside the 6.00 am to 8.00 pm span, or in excess of 10 hours. Clause 21.3(c) provides, in respect of casual employees, as follows:

(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.

[3] Clause 21.3(c) reflects the application of the 25% casual loading, on a compounding basis, to the public holiday rates for full-time and part-time employees prescribed by clause 21.2(c).

[4] Clause 29.2 of the LMAI Award provides:

29.2 Payment for working on a public holiday

Payment for working on a public holiday is provided for in clause 21.2(c).

[5] The hourly rates for casual employees in each classification when working on a public holiday are set out in clause B.2.1 of Schedule B to the LMAI Award. There is a single column of rates set out, with no separate provision for rates in accordance with clauses 21.3(c)(i) and (ii). The rates are calculated at 275% of the minimum hourly rate for each classification.

[6] The ASU contends in its application that ambiguity or uncertainty exists in two respects:

1. Clause 29.2 only cross-refers to clause 21.2(c), which only applies to full-time and part-time employees. It makes no reference to clause 21.3(c), which prescribes the public holiday penalty rates for casual employees.

2. The hourly rates in clause B.2.1 of Schedule B are not calculated in accordance with the percentages prescribed by clause 21.3(c).

[7] In light of the above ambiguities/uncertainties, the ASU’s application seeks that the LMAI Award be varied so that clause 29.2 cross-refers to clause 21.3(c) in respect of casual employees, and clause B.2.1 is varied so that the casual hourly rates for public holidays are calculated in accordance with the percentage amounts specified in clause 21.3(c).

[8] I conducted a directions hearing in relation to this matter on 27 October 2021. The only appearance was by the ASU. At that directions hearing, I indicated that in the absence of any contradictor, I proposed to simply make a decision on the basis of the grounds articulated in the ASU’s application. I also indicated that if I decided, in accordance with the ASU’s application, that the LMAI Award should be varied, I would publish a draft determination with the decision, that any interested parties would be given a period of 14 days to comment upon that draft determination and, if there was no opposition, the LMAI Award would then be varied.

Consideration

[9] I am satisfied that the LMAI Award is ambiguous and uncertain in respect of the interaction between clause 21.3(c), clause 29.2 and clause B.2.1 of Schedule B as contended by the ASU. However, my provisional view is that this should not be remedied by the award variations proposed by the ASU because, for the reasons set out below, the ambiguities/uncertainties appear to reflect a broader underlying error in the way that public holiday penalty rates generally in clauses 21.2 and 21.3 have been expressed.

[10] The original 2010 version of the LMAI Award (2010 Award) was made by the award modernisation Full Bench of the Australian Industrial Relations Commission on 4 December 2009 2 and came into effect on 1 January 2010. In respect of working ordinary time on public holidays, clauses 28.1 and 28.2 of the 2010 Award provided:

28.1  Public holidays are provided for in the NES. This clause contains additional provisions.

28.2 Payment for working on a public holiday

An employee who works on a public holiday will be paid at the rate of double time and a half of their ordinary rate of pay for all time worked.

[11] In respect of working overtime on public holidays, clause 23.2(c) provided:

23.2 Overtime rates

…

(c) An employee who, with the approval of the employer, works on a public holiday will be paid, in addition to the payment for the public holiday, at the following rates:

(i) time and a half for work performed during ordinary hours of work; and/or

(ii) double time and a half for work performed outside ordinary hours of work.

[12] The terms of clauses 23.2(c) and 28.2 of the 2010 Award, as made, reproduce the terms of the equivalent provisions in an exposure draft of an Employment Services Industry Award 2010 published by the award modernisation Full Bench on 25 September 2009. As is apparent from a Statement issued by the award modernisation Full Bench on the same day,  3 the terms of this exposure draft were based on those of two pre-reform awards: the Community Employment, Training and Support Services Award 1999 and the Group Training (Victoria) Award 1999.

[13] The Community Employment, Training and Support Services Award 1999 4 (AP772299) contained the following provisions concerning payment for work on a public holiday:

18.4.2 Where any employee who, with the authorisation of the employer, works on a public holiday she/he shall be paid, in addition to public holiday pay prescribed in clause 25 - Public holidays hereof, at:

18.4.2(a) time and one-half for work performed during ordinary hours of work; and/or,

18.4.2(b) double time and one-half for work performed outside ordinary hours of work.

. . .

25.1 An employee shall be entitled to holidays on the following days without deduction of pay: …

[provisions specifying prescribed public holidays not reproduced]

. . .

25.3 Subject to 25.5 an employee who works on a public holiday as defined above, shall be paid at the holiday rate of double time and one half of the appropriate hourly rate of pay.

. . .

25.5 An employer and his or her employees may agree to substitute another day for any prescribed in this clause. For this purpose, the consent of the majority of affected employees shall constitute agreement.

[14] The Group Training (Victoria) Award 1999 (AP783267) 5 contained provisions concerning payment for working on public holidays to the same effect as the above.

[15] The meaning of the public holiday provisions of the 2010 Award is in my view clear. The rate for working any hours on a public holiday (not including the casual loading in the case of a casual employee) was double time and a half, or 250%, as prescribed by clause 28.2. There was no contradiction between clauses 28.2 and 23.2(c) of the 2010 Award in respect of ordinary-time hours because the rates prescribed by clause 23.2(c) were, as the chapeau stated, “in addition to the payment for the public holiday”. That payment is the payment prescribed by the NES provision in s 116 of the FW Act - that is, payment at the employee’s base rate of pay (as defined by s 16, which will equate to the minimum rate of pay for award purposes) for the employee’s ordinary hours of work on that day. Therefore, when clause 23.2(c)(i) prescribed a rate of time and a half, or 150%, for ordinary time hours worked on public holidays, that was in addition to the single-time rate (100%) also payable for ordinary hours under s 116, making a total rate of double time and half (250%). Clause 23.3(c)(ii) then prescribed double time and a half for overtime hours (250%), for which no payment was prescribed by s 116.

[16] The position was essentially the same under the two pre-reform awards. In the case of the Community Employment, Training and Support Services Award 1999, the rate of time and a half for ordinary hours worked prescribed by clause 18.4.2(a) was “in addition to public holiday pay prescribed in clause 25 - Public holidays”. The public holiday pay referred to was that prescribed by clause 25.1 – that is, the pay the employee would be entitled to if the employee did not work on the public holiday, namely single time for the ordinary hours that would have been worked if the day was not a public holiday. The equivalent provisions of the Group Training (Victoria) Award 1999 had the same meaning and effect.

[17] The 2010 Award became the subject of review as part of the four yearly review of all modern awards then required by the FW Act. The Commission published an initial exposure draft for this award in 2015, together with a comparison document. 6 This noted that the abovementioned clauses had been rearranged numerically (clause 23.2 became 14.2 and clause 28.2 became clause 20.2) and some terminology was amended, but the payments remained in their respective clauses. The initial exposure draft7 set out the clauses as follows:

14.2 Overtime rates

(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 during ordinary hours of work; and/or

(ii) 350% of the minimum hourly rate for work performed outside ordinary hours of work.

…

20.2 Payment for working on a public holiday

An employee who works on a public holiday will be paid at 250% of the minimum hourly rate for all time worked.’

[18] The exposure draft included the following note to interested parties:

“Parties are asked to comment on how clause 20.2 interacts with clause 14.2(c), given clause 14.2(c) provides for 250% of the minimum hourly rate for time worked during ordinary hours, and 350% of the minimum hourly rate for time worked outside of ordinary hours.”

[19] It is apparent that the Commission’s exposure draft proceeded on the basis of an error concerning the meaning of the existing public holiday provisions of the 2010 Award. The error was that it was assumed that the overtime rate prescribed in clause 23.2(c)(ii) of the 2010 Award of double time and a half (250%) was, like that in clause 23.2(c)(i), in addition to the single time (100%) rate for the public holiday, when, as explained above, the payment for the public holiday required by s 116 of the FW Act does not apply to overtime. This error led to the rate of 350% for overtime on public holidays referred to in clause 14.2(c)(ii) of the exposure draft.

[20] This error was picked up by some parties in their submissions in response to the exposure draft. In a submission filed 14 April 2016, 8 Jobs Australia submitted that:

“(c) The pre-reform award (Community Employment Training and Support Staff Award 1999 – AP772299CRV) provided a separate penalty rate for overtime on a public holiday and that is reflected in the current overtime clause.

(d) The issue could be resolved by amending clause 20.2 to read “An employee who works on a public holiday will be paid at 250% of the minimum hourly rate for all work performed during ordinary hours of work”. 9

[21] In a submission filed on 15 April 2016, 10 Australian Business Industrial and the NSW Business Chamber (ABI) submitted that:

“Clause 20.2 provides that an employee will be paid at a rate of 250% of the minimum hourly rate for all time worked on a public holiday, as opposed to clause 14.2 which prescribes that an employee will be paid 250% of the minimum hourly rate for work performed on a public holiday during ordinary hours of work, and 350% of the minimum hourly rate for work performed on a public holiday that is outside the ordinary hours of work. We submit that clause 20.2 should be preferred to clause 14.2 and that all time worked on a public holiday be paid at a rate of 250% of the minimum hourly rate for all time worked. We note that this approach is consistent with the terms of the PreReform Award which only prescribes a rate of 250% for time worked on a public holiday.” 11

[22] However, it appears that these parties did not subsequently press their opposition to the 350% penalty rate for overtime on public holidays. In a decision issued 6 July 2017, 12 the Full Bench which carried out the review of the 2010 Award said:

“[72] The parties agreed that clause 20.2 of the exposure draft should be amended for consistency with clause 14.2(c) and had no further submissions in relation to the wording proposed for that clause.

[73] It was agreed that clause 14.2(c) of the exposure draft reflected the position under the current award. In addition, the parties proposed amendments to clauses 14.2(c)(i) and 14.2(c)(ii) to clarify how the overtime provision operated as follows:

(a) in relation to clause 14.2(c)(i) the parties proposed the following wording be inserted:

‘250% of the minimum hourly rate for work performed during the span of hours worked between 6.00 am and 8.00 pm, and not exceeding 10 hours in one day; and/or’.

(b) the parties proposed the following wording in respect of clause 14.2(c)(ii):

‘350% of the minimum hourly rate for work performed outside the span of hours worked between 6.00 am and 8.00 pm, or in excess of 10 hours in one day.’”

[23] A further revised exposure draft was published on 18 July 2017 incorporating those changes.

[24] On 9 August 2017, ABI filed a submission which suggested amending clause 20.2 and submitted the following:

“Our clients propose amending clause 20.2 to make reference to clause 14.2(c) on the basis that having two clauses relating to the payment on public holidays will cause ambiguity and confusion. Our clients propose the following wording: “Payment for working on a public holiday is provided for in clause 14.2(c).”

[25] In a decision issued 13 March 2018, 13 the Full Bench considering these submissions stated:

“[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.”

[26] The change made by the Full Bench was reflected in the further revised exposure draft published on 1 March 2019. The provision formed part of the LMAI Award which was made on 4 May 2020. 14

[27] The provisions of the 2010 Award and, subsequently, the LMAI Award, relating to overtime for casual employees were subject to separate review by a Full Bench as part of the “overtime for casuals” common issue aspect of the 4 yearly review of modern awards. In a decision issued on 18 August 2020, 15 the Full Bench determined that the casual loading in the LMAI Award was payable on overtime on a compounding basis (that is, it was applied to the overtime rate rather than the ordinary-time rate).16 On 30 October 2020, the LMAI Award was varied to give effect to this decision.17 Clause 21.3(c) in its current form is the result of this variation.

[28] Therefore, my provisional view is that the penalty rates in both clauses 21.2(c)(ii) and 21.3(c)(ii) are in error. 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.

Next steps

[29] A draft determination reflecting the provisional view expressed in paragraph [28] shall be published in conjunction with this decision. Interested parties may, within 14 days of the date of this decision, file any submissions they wish to make as to that provisional view and the terms of the draft determination. If no party expresses any opposition, I will proceed to vary the LMAI Award in the terms of the draft determination.

VICE PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR740035>

 1   ASU, Application, filed 14 October 2021

 2   [2009] AIRCFB 945, PR991065

 3   [2009] AIRCFB 865 at [112]

 4   Consolidated up to and including 1 October 2008

 5   Consolidated up to and including 30 September 2008

 6   LMAI Award comparison document 18 December 2015

 7   LMAI Award Exposure Draft, 18 December 2015

 8   Jobs Australia, Submission, 14 April 2016.

 9   Jobs Australia, Submission, 14 April 2016, para 8

 10   ABI & NSW Business Chamber, Submission, 15 April 2016

 11   ABI & NSW Business Chamber, Submission, 15 April 2016, para 9.6

 12   [2017] FWCFB 3433

 13   [2018] FWCFB 1405

 14   PR718394

 15   [2020] FWCFB 4350

 16   Ibid at [116]-[127]

 17   PR723994