1
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Item 9 Sch. 5—Take-home pay
Melinda Hunt
v
Interchange Australia
(C2013/5960)
DEPUTY PRESIDENT BOOTH SYDNEY, 13 NOVEMBER 2013
Conditions of employment - application for take-home pay order.
[1] On 9 September 2013 Mrs Melinda Hunt (the applicant) made an application to the
Fair Work Commission (the Commission) under Schedule 3 Part 5 Item 9 of the Fair Work
(Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) for
an order remedying an alleged reduction in her take-home pay resulting from the making of a
modern award.
[2] The matter was listed for conference for 30 September 2013 and later changed to
28 October 2013 at the request of the applicant. This date was vacated due to the
unavailability of Interchange Australia (the respondent). I decided to request written
submissions from the parties. With the agreement of the parties this decision is based upon
those submissions, the last of which was received on 1 November 2013.
Background
[3] The applicant has been employed by the respondent since 12 August 2009 as a casual
Weekend Events Coordinator.
[4] The applicant was covered by the Social and Community Services Employees (State)
Award (the State Award) until 1 January 2010 when the Social, Community, Home Care and
Disability Services Industry Award 2010 (the Modern Award) came into operation.
[5] The applicant works on a Saturday.
[6] Clause 7 - Casual Employees, of the State Award provided relevantly as follows:
“7.1 A casual employee shall mean an employee engaged to perform work of a short-
term and/or irregular nature.
7.2 A casual employee shall be paid an hourly rate equal to one-thirty eighth of the
appropriate weekly rate prescribed by Clause 21 - Rates of Pay, plus an additional
loading of fifteen (15%) per cent.
[2013] FWC 8813
DECISION
E AUSTRALIA FairWork Commission
[2013] FWC 8813
2
7.3 Pursuant to the Annual Holidays Act 1944, casual employees are entitled to
payment in lieu of annual leave at the end of each engagement in addition to
entitlements under this clause, i.e. an amount equal to one-twelfth (8.33%) of the
employee’s ordinary pay for such period of engagement.
....NOTE: To calculate the appropriate rate of pay for a casual employee the formula
is: appropriate hourly rate + 15% = sub total (1) [+appropriate shift penalty = subtotal
(2)] + 8.33% = total.”
[7] Clause 11 - Hours of Work, of the State Award provided relevantly as follows:
“11.4 Week-End Work
[....] (b) An employee who is not a shift worker who works ordinary hours on a
Sunday shall be paid a loading of 75% in addition to their ordinary rate of pay.”
[8] From 1 January 2010 Clause 26 Saturday and Sunday work of the Modern Award
provided as follows:
“26. Saturday and Sunday work
26.1 Employees whose ordinary working hours include work on a Saturday and/or
Sunday, will be paid for ordinary hours worked between midnight on Friday and
midnight on Saturday at the rate of time and a half, and for ordinary hours worked
between midnight on Saturday and midnight on Sunday at the rate of double time.
These extra rates will be in substitution for and not cumulative upon the shift
premiums prescribed in clause 29—Shiftwork.
26.2 Casual employees who work less than 38 hours per week will not be entitled to
payment in addition to any casual loading in respect of their employment between
midnight on Friday and midnight on Sunday.”
[9] The Modern award was varied on 31 July 2013 and Clause 26 was changed to provide
as follows from the first pay period to operate on or after 1 August 2013:
“26. Saturday and Sunday work
26.1 Employees whose ordinary working hours include work on a Saturday and/or
Sunday, will be paid for ordinary hours worked between midnight on Friday and
midnight on Saturday at the rate of time and a half, and for ordinary hours worked
between midnight on Saturday and midnight on Sunday at the rate of double time.
These extra rates will be in substitution for and not cumulative upon the shift
premiums prescribed in clause 29—Shiftwork.
26.2 Casual employees who work less than 38 hours per week will be paid in respect
of their employment between midnight on Friday and midnight on Sunday in
accordance with clause 26.1. The rates prescribed in clause 26.1 will be in substitution
for and not cumulative upon the casual loading prescribed in clause 10.4(b).”
[2013] FWC 8813
3
[10] The respondent did not implement the Modern Award from 1 January 2010 and
instead continued to implement the provisions of the State Award until May 2013, the effect
of which was to continue the higher loading on the applicant’s base rate of pay for working on
a Saturday.
[11] As a result of the implementation of the relevant provision of the Modern Award by
the respondent from 5 August 2013 the applicant alleges that her take home pay has been
reduced.
Statutory framework
[12] The Transitional Act provides:
Part 3—Avoiding reductions in take-home pay from Part 10A award
modernisation process
8 Part 10A award modernisation process is not intended to result in reduction in take-
home pay
(1) The Part 10A award modernisation process is not intended to result in a reduction
in the take-home pay of employees or outworkers.
(2) An employee’s or outworker’s take-home pay is the pay an employee or outworker
actually receives:
(a) including wages and incentive-based payments, and additional amounts
such as allowances and overtime; but
(b) disregarding the effect of any deductions that are made as permitted by
section 324 of the FW Act.
Note: Deductions permitted by section 324 of the FW Act may (for example) include
deductions under salary sacrificing arrangements.
(3) An employee suffers a modernisation-related reduction in take-home pay if:
(a) a modern award made in the Part 10A award modernisation process starts to
apply to the employee when the award comes into operation; and
(b) the employee is employed in the same position as (or a position that is
comparable to) the position he or she was employed in immediately before the
modern award came into operation; and
(c) the amount of the employee’s take-home pay for working particular hours
or for a particular quantity of work after the modern award comes into
operation is less than what would have been the employee’s take-home pay for
those hours or that quantity of work immediately before the award came into
operation; and
[2013] FWC 8813
4
(d) that reduction in the employee’s take-home pay is attributable to the
Part 10A award modernisation process.
(4) An outworker who is not an employee suffers a modernisation-related reduction in
take-home pay if:
(a) when a modern award that contains outworker terms comes into operation,
the outworker is a person to whom outworker terms in the modern award
relate; and
(b) the outworker is performing the same work as (or work that is similar to)
the work he or she was performing immediately before the modern award came
into operation; and
(c) the amount of the outworker’s take-home pay for working particular hours
or for a particular quantity of work after the modern award comes into
operation is less than what would have been the outworker’s take-home pay for
those hours or that quantity of work immediately before the award came into
operation; and
(d) that reduction in the outworker’s take-home pay is attributable to the
Part 10A award modernisation process.
9 Orders remedying reductions in take-home pay
Employees
(1) If FWA is satisfied that an employee, or a class of employees, to whom a modern
award applies has suffered a modernisation-related reduction in take-home pay, FWA
may make any order (a take-home pay order) requiring, or relating to, the payment of
an amount or amounts to the employee or employees that FWA considers appropriate
to remedy the situation.
Outworkers
(2) If FWA is satisfied that an outworker, or a class of outworkers, to whom outworker
terms in a modern award relate has suffered a modernisation-related reduction in take-
home pay, FWA may make any order (a take-home pay order) requiring, or relating
to, the payment of an amount or amounts to the outworker or outworkers that FWA
considers appropriate to remedy the situation.
(2A) Without limiting the kind of take-home pay order that may be made under
subitems (1) and (2), one or more of the following orders may be made:
(a) an order compensating a reduction in take-home pay that has already been
suffered;
(b) an order requiring the payment of an amount of take-home pay;
(c) an order preventing a reduction in take-home pay from occurring.
[2013] FWC 8813
5
General provisions
(3) FWA may make a take-home pay order only on application by:
(a) an employee or outworker who has suffered a modernisation-related
reduction in take-home pay; or
(b) an organisation that is entitled to represent the industrial interests of such an
employee or outworker; or
(c) a person acting on behalf of a class of such employees or outworkers.
(4) If FWA is satisfied that an application for a take-home pay order has already been
made in relation to an employee or a class of employees, or an outworker or a class of
outworkers, FWA may dismiss any later application that is made under these
provisions in relation to the same employee or employees, or the same outworker or
outworkers.
Consideration
[13] The effect of the transitional Act is that if an applicant can satisfy the Commission that
he or she has suffered a modernisation related reduction in his or her take-home pay the
Commission is permitted to make an order remedying that reduction. That order is called a
Take Home Pay Order.
[14] The applicant is employed as a Weekend Event Coordinator on a casual basis and
works on Saturdays. It is appropriate to consider her hourly rate of pay as her hours of work
vary from week to week.
[15] Her hourly rate of pay for work performed on a Saturday immediately prior to
1 January 2010 was $47.71 per hour.
[16] Her hourly rate of pay on a Saturday before and after the operation of the Modern
Award on 1 January 2010 to date is set out below:1
Pre
1/1/10
From
1/1/10
From
30/6/10
From
9/2/11
From
29/6/11
From
9/7/12
From
10/12/12
From
24/6/13
From
8/7/13
From
5/8/13
$47.71 $47.71 $47.71 $50.18 $50.88 $48.75 $50.16 $50.16 $51.48 $45.72
[17] It can be seen that the effect of the respondent maintaining the higher rate of pay
throughout the period was such that the applicant’s hourly rate of pay exceeded the amount
she received immediately prior to the operation of the Modern Award on 1 January 2010 for
the period up to 5 August 2013 when the hourly rate became $45.72.
[18] I consider that the relevant comparison with the applicant’s current rate of pay is the
pre-modern award rate of pay of $47.71 and accordingly she is now paid $1.99 per hour less
than the rate she was entitled to be paid prior to the operation of the modern award.
[19] I am satisfied that the applicant has met the criteria set out in Item 8(3) of the
Transitional Act in that a modern award made in the Part 10A award modernisation process
[2013] FWC 8813
6
applied to the applicant when the award came into operation and the applicant is employed in
the same position (or a position that is comparable to) the position she was employed in
immediately before the modern award came into operation.
[20] I have concluded that the amount of the applicant’s take-home pay for working
particular hours after the Modern Award came into operation, from 5 August 2013, is less
than what would have been her take-home pay for those hours immediately prior to the
Modern Award coming into operation and that the reduction in her take-home pay is
attributable to the Part 10A award modernisation process.
[21] I conclude that the applicant has suffered an award modernisation related reduction in
take-home pay and I have decided to grant her application. An order will be issued with this
decision.
DEPUTY PRESIDENT
Final written submissions:
1 November 2013
Printed by authority of the Commonwealth Government Printer
Price code C, PR544337
1 Uncontradicted submissions of Melinda Hunt - 29 October 2013
ORK COMMISSION
