1
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 5, Item 6 - Review of all modern awards (other than modern enterprise and State PS
awards) after first 2 years
Timber Trade Industrial Association
(AM2012/21)
CFMEU—Forestry and Furnishing Products Division
(AM2012/64)
Timber Merchants Association
(AM2012/90)
Australian Furniture Association
(AM2012/96)
Mr James Daniel
(AM2012/284)
DEPUTY PRESIDENT GOOLEY MELBOURNE, 4 SEPTEMBER 2013
Modern Awards Review 2012—Variation of the Timber Industry Award 2010.
[1] The Fair Work Commission (the Commission) (previously Fair Work Australia) is
required by the Fair Work (Transitional Provisions and Consequential Amendments) Act
2009 (the Transitional Act) to conduct a review of all modern awards, other than modern
enterprise awards or State Reference Public Sector Awards, as soon as practicable after
1 January 2012 (the 2012 Review).
[2] Five applications were made to vary the Timber Industry Award1 (the Award) by the
following organisations:
AM2012/21—Timber Trade Industrial Association (TTIA);
AM2012/64—CFMEU—Forestry and Furnishing Products Division (CFMEU);
AM2012/90—Timber Merchants Association (Vic) (TMA);
1 MA000071.
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DECISION
E AUSTRALIA FairWork Commission
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AM2012/96—Australian Furniture Association (AFA); and
AM2012/284—Mr James Daniel.
[3] Submissions were made by the parties in support of their applications and in
opposition to other applications. In addition, the following organisations made submissions in
support or in opposition to some of the applications:
South Australian Employers’ Chamber of Commerce and Industry Inc trading as
Business SA (Business SA);
Australian Industry Group (Ai Group);
Australian Business Industrial (ABI);
The Australian Workers Union (AWU); and
Victorian Association of Forest Industries (VAFI).
[4] This decision determines each of the variations sought, other than variations which are
being dealt with by Full Benches constituted to deal with particular matters in the 2012
Review.
Legislative provisions applicable to the 2012 Review
[5] The transitional review is being conducted under Item 6 of Schedule 5 to the
Transitional Provisions Act. Item 6 provides:
“6 Review of all modern awards (other than modern enterprise awards and State
reference public sector modern awards) after first 2 years
(1) As soon as practicable after the second anniversary of the FW (safety net
provisions) commencement day, FWA must conduct a review of all modern awards,
other than modern enterprise awards and State reference public sector modern awards.
Note: The review required by this item is in addition to the annual wage reviews and 4
yearly reviews of modern awards that FWA is required to conduct under the FW Act.
(2) In the review, FWA must consider whether the modern awards:
(a) achieve the modern awards objective; and
(b) are operating effectively, without anomalies or technical problems
arising from the Part 10A award modernisation process.
(2A) The review must be such that each modern award is reviewed in its own right.
However, this does not prevent FWA from reviewing 2 or more modern awards at the
same time.
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(3) FWA may make a determination varying any of the modern awards in any way
that FWA considers appropriate to remedy any issues identified in the review.
Note: Any variation of a modern award must comply with the requirements of the FW
Act relating to the content of modern awards (see Subdivision A of Division 3 of Part
2-3 of the FW Act).
(4) The modern awards objective applies to FWA making a variation under this
item, and the minimum wages objective also applies if the variation relates to modern
award minimum wages.
(5) FWA may advise persons or bodies about the review in any way FWA
considers appropriate.
(6) Section 625 of the FW Act (which deals with delegation by the President of
functions and powers of FWA) has effect as if subsection (2) of that section included a
reference to FWA’s powers under subitem (5).”
[6] The legislative provisions applicable to the transitional review were considered in a
decision relating to the Modern Awards Review 2012 given on 29 June 2012.2 In that
decision, the Full Bench dealt with various preliminary issues relating to the approach to be
adopted in the review. In particular, and for the purposes of the present matters, I note and
adopt the following conclusions in that decision:
“[23] First, any variation of a modern award must comply with the requirements of
the FW Act which relate to the content of modern awards. These requirements are set
out in Subdivision A of Division 3 of Part 2-3 of the FW Act.
. . .
[25] Any variation to a modern award arising from the Review must comply with
s.136 of the FW Act and the related provisions which deal with the content of modern
awards (ss.136–155 of the FW Act). . .
[83] As to the historical context the award modernisation process was conducted by
the AIRC under Part 10A of the former WR Act. The process took place in the period
from April 2008 to December 2009 and was conducted in accordance with a written
request (the award modernisation request) made by the Minister for Employment and
Workplace Relations to the President of the AIRC. The award modernisation process
was completed in four stages, each stage focussing on different industries and
occupations. All stakeholders and interested parties were invited to make submissions
on what should be included in modern awards for a particular industry or occupation.
Separate processes, including variously, the provision of submissions, hearings and
release of draft awards, were undertaken in respect of the creation of each modern
award to ensure parties were able to make submissions and raise matters of concern
relevant to particular awards. By the end of 2009 the AIRC had reviewed more than
2 [2012] FWAFB 5600.
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1500 state and federal awards and created 122 industry and occupation based modern
awards.
[84] . . . The award modernisation process required by Part 10A of the WR Act has
been completed.
[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 (see Item 4 of Schedule 5 of the
Transitional Provisions 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. . .
[89] In circumstances where a party seeks a 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.
. . .
[99] To summarise, we reject the proposition that the Review involves a fresh
assessment of modern awards unencumbered by previous Tribunal authority. It seems
to us that the Review is intended to be narrower in scope than the 4 yearly reviews
provided in s.156 of the FW Act. In the context of this Review the Tribunal is unlikely
to revisit issues considered as part of the Part 10A award modernisation process unless
there are cogent reasons for doing so, such as a significant change in circumstances
which warrants a different outcome. Having said that we do not propose to adopt a
“high threshold” for the making of variation determinations in the Review, as
proposed by the Australian Government and others.
[100] The adoption of expressions such as a “high threshold” or “a heavy onus” do
not assist to illuminate the Review process. In the Review we must review each
modern award in its own right and give consideration to the matters set out in subitem
6(2). In considering those matters we will deal with the submissions and evidence on
their merits, subject to the constraints identified in paragraph [99] above.”
[7] The modern awards objective, which is significant within the 2012 Review, is as
follows:
“134 The modern awards objective
What is the modern awards objective?
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(1) FWC must ensure that modern awards, together with the National Employment
Standards, provide a fair and relevant minimum safety net of terms and conditions,
taking into account:
(a) relative living standards and the needs of the low paid; and
(b) the need to encourage collective bargaining; and
(c) the need to promote social inclusion through increased workforce
participation; and
(d) the need to promote flexible modern work practices and the efficient
and productive performance of work; and
(e) the principle of equal remuneration for work of equal or comparable
value; and
(f) the likely impact of any exercise of modern award powers on business,
including on productivity, employment costs and the regulatory burden; and
(g) the need to ensure a simple, easy to understand, stable and sustainable
modern award system for Australia that avoids unnecessary overlap of modern
awards; and
(h) the likely impact of any exercise of modern award powers on
employment growth, inflation and the sustainability, performance and
competitiveness of the national economy.
This is the modern awards objective.
When does the modern awards objective apply?
(2) The modern awards objective applies to the performance or exercise of FWC’s
modern award powers, which are:
(a) FWC’s functions or powers under this Part; and
(b) FWC’s functions or powers under Part 2-6, so far as they relate to
modern award minimum wages.
Note: FWC must also take into account the objects of this Act and any other
applicable provisions. For example, if FWC is setting, varying or revoking modern
award minimum wages, the minimum wages objective also applies (see section 284).”
Cashing out of personal leave
[8] Clause 34.4 of the Award provides as follows:
“34.4 Payment for excess accrued personal leave
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(a) Where an employee in the General Timber Stream or Wood and Timber
Furniture Stream has more than 15 days of accumulated untaken personal leave, the
employee may elect in writing that an equivalent payment will be made to the
employee and the employer will pay such an employee for any accumulated untaken
personal leave exceeding 15 days, up to a maximum payment as for 64 hours, in the
case of an employee in the General Timber Stream, or a maximum payment as for
38 hours in the case of an employee in the Wood and Timber Furniture Stream. The
employee must be paid at least the full amount that would have been payable to the
employee had the employee taken the leave that has been foregone.
(i) In order to make an election to have an equivalent payment made an
employee must have sufficient leave accrued to retain a minimum balance of
15 days’ leave after the equivalent payment is made.
(ii) The period of personal leave for which the employee has been paid will
not be added to the period of untaken personal leave accrued to the employee.
(b) In the Pulp and Paper stream, payment of excess accrued sick leave will be
made to an employee, or a deceased employee’s estate, in respect of accumulated
entitlement upon:
(i) retirement due to age or incapacity;
(ii) termination of employment after ten years continuous service for other
reasonable cause; or
(iii) death whilst an employee of the business.”
[9] This clause was not included in the Award made by the award modernisation Full
Bench but was included as a result of an application to vary the Award made in 2010 by the
CFMEU, with the support of the Timber Trade Industrial Association (TTIA) and the Timber
Merchants Association (Vic) (TMA).
[10] The TMA sought a variation to clause 34.4(a) to include a new clause 34.4(a)(iii) as
follows:
(iii) The employee may only make this request once in any twelve month period.
[11] The TMA submitted that the non-inclusion of such a provision was an oversight when
the Award was varied by consent in 2010.
[12] The Australian Furniture Association (AFA) made an application in the same terms as
the TMA.
[13] On 7 June 2013 the TTIA advised that it did not wish to pursue its proposed variation
to this clause and it supported the applications made by the TMA and the AFA.
[14] While Business SA does not support the cashing out of personal leave, it supported the
TTIA’s application on the basis that the predecessor awards provided for cashing out once a
year. Business SA advised that it supported the wording proposed by the TTIA as opposed to
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that proposed by the TMA and the AFA. The Australian Industry Group (the Ai Group)
supports the application as did Australian Business Industrial (ABI) and the Victorian
Association of Forest Industries (VAFI).
[15] The CFMEU and AWU do not oppose the applications of the TMA and AFA.
[16] I accept the submissions that the failure to include a limitation on the number of times
an employee can ask to cash out personal leave was an oversight and I am prepared to make
the variation proposed by the AFA and TMA.
Annual leave for pieceworkers
[17] Clause 33.4 of the Award provides as follows:
“33.4 Payment for period of annual leave
(a) Instead of the base rate of pay as referred to in s.90(1) of the Act, an employee
under this award, before going on annual leave, must be paid the wages they would
have received in respect of the ordinary hours the employee would have worked had
the employee not been on leave during the relevant period.
(b) Subject to clause 33.4(c), the wages to be paid must be worked out on the basis
of what the employee would have been paid under this award for working ordinary
hours during the period of annual leave, including allowances, loadings and penalties
paid for all purposes of the award, first aid allowance and any other wages payable
under the employee’s contract of employment including any overaward payment.
(c) The employee is not entitled to payments in respect of overtime, special rates
or any other payment which might have been payable to the employee as a
reimbursement for expenses incurred.”
[18] The TTIA seeks to add a new clause 33.4(d) to add the following:
Payment in the case of a pieceworker employed by one employer only on a full-time
basis to whom the provisions of clause 12.5 of this award applies shall be the rate of
wage then currently prescribed by such award for the standard weekly hours for the
area in which the employee was employed and for the classification in which the
employee was classified by the employer immediately prior to commencing leave,
plus 25%.
[19] The TTIA sought to vary clause 33 of the Award to make it clear that annual leave for
pieceworkers should be based on the employee’s minimum wage for the employee’s
classification plus a loading of 25%.
[20] It was submitted that it is not clear how annual leave for pieceworkers is calculated.
[21] The CFMEU and AWU did not oppose the application in principle. The CFMEU
proposed the following alternative clause:
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Payment in the case of a pieceworker employed by one employer only on a full-time
basis to whom the provisions of clause 12.5 of this award applies shall be the rate of
wage then currently prescribed by such award for the ordinary weekly hours as
defined by clause 27.2 of the award for the area in which the employee was employed
and for the classification in which the employee was classified by the employer
immediately prior to commencing leave, plus 25%.
[22] The CFMEU submitted that the concept of “standard weekly hours” is not defined in
the Award and will lead to confusion.
[23] The Ai Group supported the TTIA application as did VAFI.
[24] I accept the submissions that it is not clear how the annual leave for pieceworkers is
calculated. All parties are in agreement about the method of calculation of pieceworkers’
annual leave. They only disagree on the wording. I agree with the CFMEU that it is not
appropriate to include in the Award an undefined concept namely standard weekly hours. The
wording proposed by the CFMEU is clear and consistent with the method of calculation
proposed by all parties. I will make the variation proposed by the CFMEU.
Ordinary hours of work—day workers
[25] Clause 27.2 of the Award provides for ordinary hours of work for day workers as
follows:
“27.2 Ordinary hours of work—day workers
(a) Ordinary hours of work will be worked between the hours of 6.30 am and
6.00 pm Monday to Friday in one of the following manners:
(i) 38 hours within a work cycle of one week;
(ii) 76 hours within a work cycle of two weeks;
(iii) 114 hours within a work cycle of three weeks; or
(iv) 152 hours within a work cycle of four weeks.
Different methods of implementation of a 38 hour week may apply to various groups
or sections of employees in the establishment concerned.
(b) Where agreement exists the ordinary hours of work can be worked on any day
of the week, Saturday and Sunday inclusive.”
[26] The TTIA seek to expand the span of hours from 6.30 am to 6.00 pm to 6.00 am to
6.00 pm.
[27] It was submitted that employees ask for an early start, particularly in hot weather. It
was submitted that the variation would be consistent with other modern awards which provide
for the span of hours to be varied by one hour at either end with the agreement of the majority
of employees. It was submitted that other awards that apply to the employers permit an earlier
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start and that this creates some confusion. To support this submission, the TTIA relied on an
email from an unnamed member that submitted it was an administrative hassle to individually
track overtime for 6.00 am to 6.30 am.
[28] The CFMEU and AWU oppose the application. It was submitted that the TTIA had
failed to show cogent reasons for the variations, having regard to the modern awards
objective. Nor had it established that the variation was necessary to ensure that the Award
operates effectively and without anomalies or technical problems arising out of the award
modernisation process.
[29] It was submitted that the difficulty identified by the TTIA, that other awards which
applied to employees in this industry contain different spread of hours, is no different to what
applied prior to the award modernisation process. It was further submitted that no weight
should be given to the email relied upon by the TTIA. It was submitted that the adoption of
the TTIA proposal would reduce the safety net and is not justified by reference to
administrative difficulty.
[30] The Ai Group supports the application as does VAFI.
[31] I am not prepared to make the variation sought by the TTIA. Apart from one
anonymous email no evidence was called to support the variation. The Award includes the
standard award flexibility clause. The award flexibility clause permits the employer and
individual employees to vary arrangements for when work is performed. The TTIA submitted
that the impetus for the proposed variation arises from employee requests to start early, yet
the proposed draft clause imposes a wider span of hours on all employees without their
agreement. The other awards referred to by the TTIA, such as the Manufacturing and
Associated Industries and Occupations Award 20103, permits a variation to the span of hours
but only with the agreement of a majority of employees or with an individual employee.
[32] I am not satisfied that the current clause is causing the Award to not achieve the
modern awards objective or is operating ineffectively with anomalies and technical problems
arising out of the award modernisation process. The TTIA has not provided any cogent
reasons why the award modernisation Full Bench decision should be departed from.
Camping allowance
[33] Clause 21.7 of the Award provides for a camping allowance as follows:
“21.7 Camping allowance
An employee who is required by the employer to camp will be paid a camping
allowance of $24.24 per day for each working day on which the employee camps with
a maximum payment per week of $169.73.”
[34] That allowance is treated as an expense-related allowance and is varied in accordance
with the CPI increase applicable to private motoring.4
3 MA000010.
4 See [2008] AIRCFB 1000 at [74] where the Full Bench explained how allowances would be adjusted.
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[35] The CFMEU seek to delete those provisions and have the camping allowance treated
as a wage related allowance and expressed as a percentage of the standard rate as follows:
An employee required by the employer to camp will be paid a camping allowance of
3.47% of the standard rate per day for each working day on which the employee
camps with a maximum payment per week of 24.28% of the standard rate.
[36] It was submitted that the camping allowance is a disability allowance as opposed to an
expense-related allowance and therefore should be increased by reference to the national
wage adjustment and not by reference to the CPI.
[37] To support this contention the CFMEU points to clauses 13.3(k) and (l) of the Award
which provides for conditions that apply to fire fighting and provides for a camping allowance
and for a camping facilities allowance:
“(k) Camping allowance
An employee required to camp will be paid in accordance with clause 21—
Allowances.
(l) Camping facilities allowance
When employees are camped, the employer will reimburse all employees any
reasonable amount spent to provide for adequate sleeping and messing
facilities.
This allowance does not apply where the employer, so far as is reasonably
practicable, provides adequate sleeping and messing facilities as agreed
between the employer and the employee.”
[38] The CFMEU submitted that these clauses lend weight to a conclusion that the camping
allowance in clause 21 is not an expense-related allowance but a wage-related allowance or
disability allowance.
[39] The CFMEU pointed to the history of adjustment of the camping allowance in the
Timber and Allied Industries Award 19995 (the 1999 Timber Award). The camping allowance
in that award was adjusted in line with wage adjustments and not in line with the CPI. It
submitted that the decision to treat the camping allowance as an expense-related allowance
was an anomaly.
[40] The AWU supported the application.
5 AP800937CRV.
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[41] Business SA opposed the application and said it was not unusual for a camping
allowance to be treated as an expense-related allowance. Both the Building and Construction
General On-site Award 20106 and the Plumbing and Fire Sprinklers Award 20107 provide for
a camping allowance which is a monetary figure and not a percentage of the standard rate.
Both awards adjust the camping allowance in line with the CPI.
[42] It submitted that the CFMEU was seeking to revisit a matter that has already been
considered by the award modernisation Full Bench and that there were no cogent reasons for
revisiting the matter.
[43] The TMA and ABI neither supported nor opposed the application made by the
CFMEU.
[44] The Ai Group submitted that the CFMEU’s proposal would see an increase in the
camping allowance. Further, it submitted that the CFMEU put forward in its draft award to
the award modernisation Full Bench a provision for a camping allowance at a flat dollar rate.
That proposal was adopted in the exposure draft of the Award. While this was acknowledged
by the CFMEU, the CFMEU now say that was a mistake.8
[45] It submitted that the CFMEU has not provided any evidence to support its assertion
that clause 21.7 is causing the Award to not achieve the modern awards objective or is
operating ineffectively with anomalies and technical problems arising out of the award
modernisation process. It submitted that the CFMEU has not provided any cogent reasons
why the Full Bench decision should be departed from. Further, it was submitted that the
variation was not necessary and is merely something which the CFMEU desires.
[46] VAFI does not oppose this application.
[47] I do not propose to make the variation sought by the CFMEU. I do not accept the
submission that the camping allowance is not paid to cover the costs associated with camping.
While clauses 13(k) and (l) of the Award go some way to supporting the CFMEU’s
contentions their inclusion in the Award is not conclusive. It might be said that the camping
allowance in clause 21.7 has both characteristics in that it is intended to reimburse employees
for the cost of camping and to compensate employees for the disabilities associated with
camping.
[48] There was insufficient evidence to support a finding that this was an error or oversight
or that the Award is not achieving the modern awards objective or is operating other than
effectively, without anomalies or technical problems arising from the award modernisation
process.
6 MA000020.
7 MA000036.
8 Transcript PN 33.
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Schedule C, clause 5.5(b)
[49] The CFMEU submitted that reference to clause “25—Payment of Wages” in this
section is an error and the reference should be to clause “24—Higher Duties”.
[50] It was submitted that the clause was derived from the Furnishing Industry National
Award 20039 (FINA) which cross-referenced the classification to the mixed functions clause.
The CFMEU submitted that the comparable clause in the Award was clause 24, not clause 25.
It was submitted the reference to clause 25 does not give effect to the intention that the
employee receive a higher rate of pay. The current reference to the wages clause has no useful
effect.
[51] Ai Group submitted that the reference to clause 25 was done consciously and therefore
no technical problem worthy of rectification exists. It was submitted that the reference to
clause 24 was included by the CFMEU in its draft awards dated 6 March and 26 March 2009.
The exposure draft released in May 2009 included a reference to the higher duties clause but
this reference was later replaced by the reference to clause 25. It was submitted that this
indicates that the Commission turned its mind to the appropriate reference and decided to
adopt what was originally suggested by the CFMEU. The Ai Group submitted that the
CFMEU had not provided any cogent reasons why the Commission should depart from the
decision of the award modernisation Full Bench.
[52] The difficulty with the Ai Group’s submission is that the reference to clause 25 makes
no sense. If the Ai Group is correct, the clause in its current form simply states that the
employee will be paid in accordance with the payment of wages clause. As all employees are
paid in accordance with clause 25, the reference to clause 25 in Schedule C, clause 5.5(b) is
unnecessary.
[53] It is clear on its face that the clause is intended to provide that a timber furniture
production employee level 4A who performs 80% of the duties of a timber furniture
tradesperson, but does not possess the necessary qualifications, will be paid a higher rate of
pay. It is only if the reference to clause 24 is included does the clause make sense. It does not
matter if the error was caused by a mistake of the CFMEU or the award modernisation Full
Bench.
[54] I will make the variation proposed by the CFMEU as the current clause contains a
technical error and it is appropriate as part of this review that technical errors are corrected.
Dirty work allowance
[55] The Award at clause 21.14 provides for the payment of a dirty work allowance as
follows:
“An employee performing work which the employer agrees is of an unusually dirty or
offensive nature will, whilst so engaged, be paid an allowance per day of 0.25% of the
9 AP825280CAV.
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standard rate. Provided that only one payment will be made in respect of the work
during any one day or shift.”
[56] The CFMEU proposed that the current provision be deleted and replaced with:
An employee engaged on work which is of an unusually dirty or offensive nature shall
be paid 0.06% of the standard rate, per hour or part thereof whilst so engaged.
[57] It was submitted that the variation is necessary to correct an anomaly. It submitted that
the clause is derived from the Pulp and Paper Industry—Production Award 199910 (PPIPA).
It submitted that the FINA provided an hourly allowance which was the equivalent of 0.06%
of the standard rate per hour worked.
[58] The CFMEU submitted that the PPIPA was not the appropriate benchmark and that
the FINA should be used as the relevant benchmark. It was submitted that allowance in the
PPIPA which was a work-related allowance had not been adjusted to give effect to the safety
net adjustments since 1999. It was submitted that the award modernisation Full Bench simply
picked up the amount in the PPIPA and did not make the appropriate adjustment. It submitted
that the allowance in the FINA had been adjusted on each occasion the safety net adjustment
had been made.
[59] It was further submitted that employees covered by the FINA are more likely to be
award-reliant than employees covered by the PPIPA. An employee employed under the FINA
prior to award modernisation would have been paid $2.89 per day for dirty work and is now
paid $1.72 per day. If the variation is made the employee would now be paid $3.13 per day. It
was submitted that this variation is necessary to ensure that the Award provides a fair and
relevant safety net.
[60] It was also submitted, in the alternative, that if the PPIPA had been adjusted in line
with the national wage decisions, at the time the Award was made, the allowance of $2.13 per
day would have been paid, which would have been 0.33% of the standard rate.
[61] Business SA submitted that the current clause was included in the exposure draft
published by the Commission on 22 May 2009. In the CFMEU’s response to the exposure
draft, the CFMEU proposed in lieu of the percentage of the standard rate, a monetary amount
of $1.62. In its second response the CFMEU proposed a dirty work allowance in identical
terms to the exposure draft.
[62] It was submitted that prior to award modernisation the timber industry was regulated
by a large number of industrial instruments. In this context, there is no evidence that the
wording in the current clause is the result of an anomaly or technical error and it was
submitted that the variation was not necessary to ensure that the Award meets the modern
awards objective.
[63] The AWU supported the application. The TMA and ABI neither supported nor
opposed the application. VAFI do not oppose the application.
10 AP792323.
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[64] The Ai Group also pointed to the fact that the current clause reflects the provision
proposed by the CFMEU at the time of making of a modern award. It submits that the
CFMEU has not put forward any cogent reasons for the variation and has not established that
the clause in its current form is causing the Award not to achieve the modern awards objective
or is operating ineffectively with anomalies or technical problems arising from the Part 10A
award modernisation process. It submitted that the variation is simply something desired by
the CFMEU.
[65] It was not disputed by the opponents to this variation that the allowance picked up by
the award modernisation Full Bench had not been adjusted since 1999 when the rate was set
at $1.62.
[66] I accept the submissions of the CFMEU that the selection of an out of date allowance
was an anomaly. I further accept that that amount should be adjusted in line with the national
wage adjustments that occurred after that date. The CFMEU submitted that had the national
wage adjustments been applied to this allowance, the rate would have been $2.13 per day at
the time the Award was made and had that been the case the allowance would have been set
out 0.33% of the standard rate.
[67] I do not accept the submissions of the CFMEU that the rate from the FINA was the
appropriate rate because there were more award-dependent employees under that award than
the PPIPA. I do accept that the minimum allowance should be set at the adjusted rate.
[68] I will therefore vary the Award to provide that the dirty work allowance is set at
0.33% of the standard rate.
Millwright allowance
[69] The Award at clause 21.9(a)(i) provides that a millwright is paid a tool allowance of
$4.72 per week. The CFMEU propose that that amount be increased to $14.69.
[70] Mr Arturo Menon, an organiser with the CFMEU Forestry and Furnishing Products
Division, gave evidence11 that he was approached by members classified as millwrights
asking why they were paid a lower tool allowance than maintenance contractors who came to
the site to perform maintenance work during the shutdown. As a consequence, he visited a
number of other mills and found that the millwrights have always been paid the lower tool
allowance rate from the Award. It was his evidence that the work performed by a fitter and by
a millwright is the same work except that the millwright has specialised skills relevant to
working in a sawmill.
[71] Mr Bradley Coates, the District Secretary of the CFMEU—FFPD Greater Green
Triangle District in South Australia and Western Victoria, gave evidence12 that other
enterprise agreements provide the tool allowance for maintenance workers at between $14.29
and $15.98.
11 Exhibit CFMEU 3.
12 Exhibit CFMEU 6.
[2013] FWC 6114
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[72] Mr Keith Payne, who is employed as a maintenance/millwright, gave evidence13 that
he is a qualified fitter machinist by trade and that his work involves fixing and maintaining
the mill machinery. He supplied tools worth thousands of dollars.
[73] The CFMEU submitted that this variation would correct an anomaly arising from the
award modernisation process. It also submits that the Award does not provide a fair or
relevant safety net in relation to the tool allowance. It was submitted that the amount of the
tool allowance was derived from the Western Australian Timber Workers Award. It submitted
that that allowance had not been increased since 1995. Further it was submitted that it does
not equate to the amount paid as a tool allowance to other trades people. It submits that a
millwright is a qualified tradesperson and the tool allowance payable under the
Manufacturing and Associated Industries and Operations Award 201014 is $14.69. It
submitted that if the millwright is employed by a contractor, the millwright will receive a
higher tool allowance than a directly employed millwright doing the same work. It submitted
that an examination of tool allowances for mechanical trade people in other modern awards
shows that $14.00 per week is generally considered to be an appropriate rate for a tool
allowance.
[74] Business SA submitted that none of the grounds put forward by the CFMEU
demonstrate that the tool allowance for millwrights is an anomaly arising out of the award
modernisation process. The amount of $4.40 was included in the exposure draft and the
CFMEU did not raise this as an issue at the time. It submitted that there was no evidence to
demonstrate the variation is necessary to achieve the modern awards objective and it would
lead to a substantial increase in costs for businesses.
[75] The Ai Group submitted that this provision was in the exposure draft and the CFMEU
did not raise this issue at the time. The Ai Group submitted that the provisions in other awards
are not relevant and the CFMEU’s reliance on consistency between awards in support of this
variation is to be contrasted to its proposal to include in the Award a late payment penalty.
The Ai Group submitted that the CFMEU have not established that there should be a
departure from the position adopted by the award modernisation Full Bench.
[76] The AWU supported the application. The TMA and ABI neither support nor oppose
the application.
[77] VAFI do not oppose the application.
[78] While there may be merit in the CFMEU’s argument that millwrights who are required
to supply their own tools should be paid a tool allowance, at a level equivalent to that paid to
other trades people, this review is not intended to be a merits review. While it was stated that
the tool allowance derives from a Western Australian award the CFMEU did not provide any
evidence that any predecessor awards provided for a tool allowance for millwrights at the
level they now seek.
[79] The CFMEU has not satisfied me that I should depart from the decision of the award
modernisation Full Bench.
13 Exhibit CFMEU 4.
14 MA000010.
[2013] FWC 6114
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Payment of wages
[80] Clause 25.2 of the Award provides for the method of payment of wages as follows:
“25.2 Method of payment
Wages must be paid by cash, cheque or electronic funds transfer into the employee’s
bank or other recognised financial institution account.”
[81] The CFMEU proposed to renumber this clause as 25.2(a) and insert a new clause
25.2(b) as follows:
“(b) Where it is agreed that wages shall be paid via electronic funds transfer (EFT)
to the employee’s bank account, wages shall be made available for employee’s
withdrawal no later than the close of business, from the nominated bank, on the day
such wages are due.”
[82] The CFMEU proposed to insert new clauses 25.7 and 25.8 as follows:
“25.7 Time of Payment
(a) Wages shall be paid not later than two days following the expiration of the pay
period and in any case not later than Friday.
(b) Where wages payable in cash are not paid during working hours and the
majority of employees request payment of wage during the meal break or crib time
then such payment of wages shall be made during such meal break or crib time.
25.8 Late payment
(a) Where an employee’s wages are underpaid for more than 15 minutes after
ceasing time on any pay day or for more than 15 or 30 minutes as the case may be as
provided in 25.3 hereof or for more than 15 minutes after close of business where such
wages are ordinarily paid by electronic funds transfer, the employee shall be paid at
overtime rates for three hours or until the hour of payment, whichever shall first occur
if payment be made on the day of default and if payment be not made on that day shall
in addition be paid at overtime rates for all ordinary working hours between the end of
the day of default, and the day of payment provided that this penalty shall not exceed
payment as for 38 hours.
(b) In the event that it can be shown that technical problems within the EFT
system beyond the control of the employer prevent an employee from collecting
his/her wages at the close of business at the nominated bank on the day such wages are
due, the employer shall not be liable to pay the penalties prescribed at 25.8(a) above
provided the employer take immediate action to ensure such employee receives due
payment or part payment by cash or, where agreed, by cheque and ensures that the
employee receives due payment by 11.00 am the next day.”
[2013] FWC 6114
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[83] The CFMEU submitted that clause 25.2 should provide for payment of wages by EFT
by agreement and that wages should be paid no later than the close of business on the day
wages were due. The CFMEU wants employers to pay a penalty if wages, paid by EFT, are
paid late. EFT is an almost universal method of payment of wages in the industry. The
CFMEU submitted that there was a history of late payment of wages. It was further submitted
that given that award-dependant employees are low paid, the failure to pay wages on time can
have a significant impact on employees.
[84] Mr Menon gave evidence15 that in November 2012 and March 2013 some businesses
failed to pay wages on the agreed day. This affected 100 members of the CFMEU working at
five sites. As a consequence, two members had to pay late payment fees imposed by their
financial institutions and for one member those fees totalled $150. It was acknowledged that
the sites were covered by enterprise agreements, however as the agreements incorporated the
Award provisions, they were still relevant. It was submitted that the employer refused to
compensate employees because the late payment provisions in the Award do not apply to
EFT. It was Mr Menon’s evidence that all the workplaces he organises are paid by EFT.
[85] Ms Jane Calvert, the Divisional President of the CFMEU Forestry and Furnishing
Products Division, gave evidence16 that she was aware of the late payment of wages in the
industry and that these late payments were often within the employer’s control. For example,
she was aware of an employer who terminated the employment of a large number of its
payroll staff and hence the pays were not processed on time. She also was aware of
breakdowns in the electronic payroll systems that resulted in pays being delayed.
[86] Because these employees live week to week, the late payment of wages means that
employees are unable to purchase food and other necessary goods and services. The
imposition of late payment penalties by financial institutions affects employees’ credit
records. Ms Calvert said that the imposition of a late payment penalty provides an incentive to
employers to pay wages on time.
[87] She contrasted the situation for award-reliant employees with employees covered by
an enterprise agreement which provided for a late payment penalty. When it looked like the
employer would pay wages late, the existence of the late payment penalty in the agreement
meant the employer had payroll staff work extra hours to ensure the pay was not late.
[88] Ms Calvert said that payment by EFT is the predominant method of payment. She said
that it is difficult to negotiate late payment penalty clauses in agreements because of the
potential costs involved. It was her view that the removal of the late payment penalty from the
Award made it more difficult to negotiate the inclusion of such clauses in agreements.
[89] Ms Gillian Finnegan, a delegate at a sawmill, gave evidence17 that in February 2012
employees’ pays were not in their bank accounts on pay day. She contacted the payroll officer
who said that a member of staff had failed to activate the pay. Later she was told that the non-
payment was caused by a computer glitch. She said that the failure to pay wages meant she
could not buy lunch or food for dinner. Other employees were not able to buy petrol to come
15 Exhibit CFMEU 3.
16 Exhibit CFMEU 1.
17 Exhibit CFMEU 2.
[2013] FWC 6114
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to work and another could not buy themselves or their children’s lunch. Another employee
did not have enough money in her account to pay her direct debits. This problem was worse
when both partners worked for the company. It was her evidence that most of her fellow
workers live week to week and do not have the savings to provide a buffer in these situations.
The union negotiated with the company that anyone who had to pay a bank penalty as a result
would be reimbursed.
[90] Mr Travis Lawson, an organiser with the CFMEU, gave evidence18 about the incident
described by Ms Finnegan. It was his evidence that one member was unable to pay his rent
and was threatened with eviction. He says he deals with late payments about once a year. He
gave evidence of Carter Holt Harvey not paying wages just before Christmas. He was told by
the employer that the payroll EFT system had crashed and the money had not been
transferred. The employer paid part wages to the employees to see them through Christmas.
He said all his members are paid by EFT. He said employers were unwilling to negotiate late
payment clauses in agreements.
[91] Mr Scott McLean, the CFMEU—FFPD District Secretary in Tasmania, gave
evidence19 that in 2005 the CFMEU applied to vary the 1999 Timber Award to make it clear
that the late payment penalty applied to EFT and the award was varied in 2006. It was his
evidence that in 2006 there were some examples of late payment of wages and that employers
were required to pay the penalty. It was his evidence that in 2009 Gunns did not pay wages on
time in the last pay before Christmas. He said that this occurred because a payroll supervisor
had not returned to work in time from a function to process the wages. As a result, some
workers were not paid until 3 January the next year. He had members who were not able to
collect Christmas presents which were on lay-buy. As well, some members were unable to
pay for their holidays and others had mortgage defaults and fees. The CFMEU was able to get
some banks to provide emergency assistance but not for all employees. Gunns gave some
employees partial cash payments but not all.
[92] It was his evidence that late payments on a much smaller scale occurred often.
Because there is no penalty, it was submitted that there is no urgency on the employer’s part
to rectify the problem. It was his evidence that employees in the industry work week to week
and are all paid by EFT.
[93] These witnesses were not required for cross-examination.
[94] The CFMEU submitted that the inclusion of a late payment penalty in the Award will
encourage enterprise bargaining. It also submits that the variations will give effect to the
Commission’s obligation to consider the needs of the low paid. It was submitted that the
variations will not disadvantage employers because employers will be able to avoid the
penalty by ensuring that wages are paid on time. It also relies upon the decision of the
Australian Industrial Relations Commission to insert such provisions into the 1999 Timber
Award. It submitted that the factors which were relevant then are relevant now.
[95] It submitted that the predecessor award predominately provided for a late payment
penalty and the failure to include such a provision in the Award is an anomaly.
18 Exhibit CFMEU 7.
19 Exhibit CFMEU 5.
[2013] FWC 6114
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[96] The AWU supported the application.
[97] The TTIA opposed the application. It submitted that there was insufficient evidence to
justify the variation sought. It referred in particular to attachments to the CFMEU submissions
which referenced incidents of late payment that occurred prior to the making of the Award. It
was submitted that the variation sought would disadvantage employers by imposing
extremely high penalties of up to 38 hours at overtime rates in the event of late payment of
wages. These penalties, it submitted, were not sustainable. The TTIA submitted that the
CFMEU had failed to produce cogent reasons for making the variations sought as part of the
2012 Review and had failed to provide evidence to satisfactorily discharge the onus of
demonstrating that the Award is failing to meet the modern awards objective or is not
operating effectively due to a technical problem or anomaly.
[98] Business SA submitted that it was an unnecessary administrative burden to require
businesses to obtain their employees’ agreement to be paid by EFT.
[99] Further, the variation requires the payment of wages on a specified day of the week
and introduces a penalty in the event of a late payment of wages. It was submitted that the
proposed variations are outdated, over regulatory, conflict with flexible work practices and
have a detrimental impact on businesses in terms of financial burden.
[100] It was submitted that the CFMEU sought to include these provisions during a modern
award process and were unsuccessful. This is, therefore, an attempt to revisit a matter that has
already been dealt with by the award modernisation Full Bench and there has not been any
significant change in circumstances that would warrant a change to the payment of wages
clause. Further it was submitted it would have a financial impact on employers.
[101] The TMA neither objects to nor supports the application as made by the CFMEU.
[102] The Ai Group submitted that the CFMEU proposed a similar clause during the award
modernisation process. While acknowledging that the clause appears to be derived from sub-
clause 26.5 in the 1999 Timber Award, it submitted that the clause does not represent an
industry standard. It was submitted that the award modernisation Full Bench, in declining to
include the CFMEU’s clause in the modern award, turned their mind to the issue and decided
to reject the union’s proposal. The Ai Group submits that the evidence of the CFMEU refers
to isolated incidents where, due to technical problems or otherwise, there was late payment of
wages. It submitted that the number of occasions where this has occurred is insignificant and
is not relevant to the consideration of whether the Award is meeting its objectives. It
submitted that the CFMEU has failed to substantiate that the absence of the requirements that
the employer pay a penalty for the late payment of wages is causing the Award to not achieve
the modern awards objective or to operate ineffectively with anomalies and technical
problems arising from the Part 10A award modernisation process.
[2013] FWC 6114
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[103] ABI opposes the CFMEU’s application. It submitted that the variation will create an
onerous regulatory burden on employers and unduly penalise employers if payments are late.
ABI is particularly concerned that late payments may arise through no fault of the employer
and that the variation would have the effect of penalising the employer for the late payment
and unduly hinder business in terms of employment costs and regulatory burden and so
cannot meet the modern awards objective. It was submitted that this variation does not
address a technicality or anomaly in the Award.
[104] VAFI opposes the variation which it says is an attempt to reintroduce to the Award a
more prescriptive framework which was removed as part of the award modernisation process.
[105] I am not prepared to make the variation sought by the CFMEU. The time has long past
where an employer should require the consent of employees before wages can be paid by
EFT.
[106] Whilst I have sympathy for employees who do not receive their wages on time there is
insufficient evidence before the Commission to indicate that this is a widespread problem.
[107] This CFMEU included a late payment penalty clause in its draft award provided to the
award modernisation Full Bench. When the exposure draft was published by the award
modernisation Full Bench, the CFMEU responded and specifically raised the issue of
penalties for late payment of wages when wages were paid by EFT. These submissions were
not adopted by the award modernisation Full Bench. In the context of this Review, I am not
prepared to revisit this issue which was considered as part of the Part 10A award
modernisation process as the CFMEU has not established that there are cogent reasons for
doing so. It cannot be said that there has been a significant change in circumstances. The
exclusion of the provision was not an error or oversight.
Unapprenticed juniors
[108] Mr James Daniel made an application in relation to unapprenticed juniors. He said
further clarification is needed to indicate whether or not unapprenticed juniors are to be paid
as a percentage of Level 2 base rate until 21 years is reached.
[109] Clause 17.7 of the Award provides that unapprenticed juniors are paid an increasing
percentage of the Level 2 rate. Mr Daniel submitted that this was an anomaly as it provides
that, regardless of skill level, an unapprenticed junior would remain at a percentage of the
Level 2 relativity until they reach 21. The other anomaly is that a 20 year old unapprenticed
junior is paid at 100% of the Level 2 base rate whereas a 21 year old can be employed at the
Level 1 rate.
[110] Mr Daniel did not appear at the hearing of this matter nor did he make any
submissions that the Award is not meeting the modern awards objective or the provision is an
anomaly. Further, Mr Daniel did not provide details of any variation sought to the Award.
[111] The CFMEU submitted that the failure of Mr Daniel to identify the manner in which
the alleged inconsistencies should be remedied meant the Commission, or other parties, were
not able to assess the proposed variation. Further it was submitted that it is not clear that Mr
Daniel has standing to make the application as the application does not demonstrate that Mr
Daniel is an employee in the industry nor is it made on behalf of an employer in the industry.
[2013] FWC 6114
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[112] As no specific variation was proposed by Mr Daniel, his application to vary the
modern award is dismissed.
Conclusion
[113] The variations will operate from the date of the decision.
[114] A determination varying the Award to give effect to this decision will be issued with
this decision.
DEPUTY PRESIDENT
Appearances:
R. Read for the CFMEU – Forestry and Furnishing Products Division.
E. Watt for Timber Merchants Association (Vic) and Australian Furniture Association.
B. Ferguson for Australian Industry Group.
J. Gilbert for Timber Trade Industrial Association.
Z. Angus for The Australian Workers Union.
S. West for Business SA.
A. Paterson for Australian Business Industrial.
Hearing details:
Melbourne.
2013:
11 June.
Printed by authority of the Commonwealth Government Printer
Price code C, MA000071 PR540718
FAIR WORK COMMISSION AUSTRALIA THESEAL OF
