DECISION

Fair Work Act 2009
s.156—4 yearly review of modern awards

4 yearly review of modern awards—Annualised Wage Arrangements
(AM2016/13)

Review of annualised salary provisions in modern awards – final determinations.

Introduction

[1] On 7 April 2022 we issued a decision 1 in relation to two outstanding issues from the common issue proceeding concerning annualised wage arrangements within the 4 yearly review of modern awards. These issues were identified as follows:

1. What should be the “outer limit” numbers of penalty rate hours and overtime hours prescribed in the annualised wage arrangements provisions to be placed in the Hospitality Industry (General) Award 2020 (Hospitality Award), the Restaurant Industry Award 2020 (Restaurant Award) and the Marine Towage Award 2020 (Marine Towage Award). 2

2. Whether annualised wage arrangements under the Health Professionals and Support Services Award 2020 (Health Professionals Award) should be available in respect of employees classified as Health Professional Levels 1-3? 3

[2] That decision contains detailed background about the history of the matter and the submissions received from the parties in relation to the outstanding issues, which we do not propose to revisit here.

[3] We published draft determinations in conjunction with the decision giving effect to our proposed changes to the four awards. Interested parties were given 14 days in which to make submissions as to the terms of the draft determinations, but not as to the merit issues which have already been determined. 4

[4] On 21 April 2022 submissions were received from the Australian Industry Group (Ai Group) 5 and the Australian Hotels Association (AHA).6 These submissions related only to the draft determinations for the Restaurant Award and the Hospitality Award.

The Ai Group’s submissions

[5] The Ai Group’s submissions relate to the Restaurant Award and the Hospitality Award only.

[6] As to the Restaurant Award, the Ai Group submitted as follows:

•  Proposed clause 20.1(a) contains an incorrect clause reference in that it refers to “clause 20” (which relates to annualised salary arrangements) but should refer to clause 18 which contains the minimum rates of pay; and

•  The presence of the words “this provisions of” in proposed clause 20.1(b)(i) was a typographical error and these words should be deleted.

[7] In relation to the Hospitality Award, the Ai Group submitted that the word “clause” had been omitted from proposed clause 24.2(b)(i) before the reference to “29.2(a)”, and should be included.

The AHA’s submissions

[8] The AHA’s submissions relate to the Hospitality Award only. The AHA submitted that there were two monetary entitlements contained in the Hospitality Award which had not been reflected in the list of items in proposed clause 24.4(a) as being a provision of the Award that could be incorporated into an annualised salary. These were the entitlement to a payment where an unpaid meal break is not given (clauses 16.5 and 16.6) and the additional public holiday arrangements for full time employees in clause 35.3 of the Hospitality Award.

[9] The AHA submitted that this omission was inconsistent with what it said was our intention to preserve the status quo in relation to the monetary entitlements that can be incorporated into an annualised salary under the Award. It was submitted that this was set out in paragraph [47] of the 7 April 2022 decision which relevantly stated: “…annual leave loading and allowances will be included in the list of entitlements able to be incorporated by agreement into an annualised wage arrangement under the Hospitality Award, since this is already permitted under this award…”. 7

[10] The AHA submitted that proposed clause 24.4(a) should be redrafted as follows to include these monetary entitlements (with proposed amendments underlined):

(i) clause 16.5/16.6—Payment for higher rate if break not allowed

(ii) clause 18—Minimum rates;

(iii) clause 26—Allowances;

(iv) clause 29—Penalty rates;

(v) clause 28—Overtime; and

(vi) clause 30.3—Payment for annual leave loading.

(vii) clause 35.3— Additional public holiday arrangements for full time employees

Consideration

[11] The typographical errors identified in the Ai Group’s submissions will be corrected in the final determinations.

[12] The first change to the determination for the Hospitality Award proposed in the AHA’s submissions will not be made. Clause 16.2 relevantly entitles employees to an unpaid meal break for shifts of more than 6 hours, to be provided within the first 6 hours. In respect of such shifts, clauses 16.5 and 16.6 of the Hospitality Award provide that, if the employer does not provide the employee with unpaid meal break to which they are entitled under clause 16.2, the employer must pay the employee an additional amount of 50 percent of the employee’s hourly rate from 6 hours after the employee started work until the employee is given a break or the shift ends. This payment is plainly not an “allowance” of the type to which we referred in paragraph [47] of our 7 April 2022 decision; it is rather to be characterised as a penalty rate payable if the employer does not comply with clause 16.2. We do not consider, as a matter of policy, that such a payment should be capable of inclusion in an annualised wage arrangement. If permitted, this might encourage the erroneous belief amongst employers who have entered into an annualised wage arrangements with employees that they are thereby permanently excused from providing the unpaid meal breaks required by clause 16.2. This would subvert the intention of clause 16, which is directed to the provision of meal breaks in the first instance.

[13] We will make the second change proposed by the AHA. Clause 35.3 of the Hospitality Award provides:

35.3 Additional public holiday arrangements for full-time employees

An employer must, if the rostered day off or accrued day off of a full-time employee falls on a public holiday, do one of the following:

(a) pay the employee an extra day’s pay; or

(b) give the employee an alternative day off within 28 days; or

(c) give the employee an additional day’s annual leave.

[14] The effect of clause 35.3 is that the employer has the right to elect which of the three alternative forms of compensation in paragraphs (a)-(c) will be provided to the employee if the employee’s rostered or accrued day off falls on a public holiday. We see no reason why an employer cannot make a permanent election in favour of the payment in (a) and have that, by agreement, incorporated in an annualised wage arrangement. Accordingly, the final determination will include a reference to clause 35.3(a) in clause 24.2(a).

[15] The final determinations will take effect on the dates stated for each award in our 7 April 2022 decision.

VICE PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR741283>

 1   [2022] FWCFB 51

 2   Ibid at [1] citing [2019] FWCFB at [2]

 3   Ibid at [1] citing [2019] FWCFB at [9] – [10]

 4   Ibid at [84]

 5   Australian Industry Group (fwc.gov.au)

 6   Australian Hotels Association (fwc.gov.au)

 7   [2022] FWCFB 51 at [47]