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
Modern Awards Review 2012—Annual leave
(AM2012/8, AM2012/11, AM2012/20, AM2012/23, AM2012/31, AM2012/32, AM2012/33,
AM2012/35, AM2012/36, AM2012/42, AM2012/86, AM2012/91, AM2012/92, AM2012/94,
AM2012/98, AM2012/106, AM2012/108, AM2012/113, AM2012/122, AM2012/125,
AM2012/145, AM2012/147, AM2012/150, AM2012/151, AM2012/153, AM2012/154,
AM2012/163, AM2012/165, AM2012/166, AM2012/167, AM2012/,168, AM2012/172,
AM2012/173, AM2012/177, AM2012/178, AM2012/179, AM2012/180, AM2012/181,
AM2012/195, AM2012/202, AM2012/204, AM2012/209, AM2012/216, AM2012/221,
AM2012/228, AM2012/231, AM2012/232, AM2012/235, AM2012/240, AM2012/245,
AM2012/256)
VICE PRESIDENT WATSON
SENIOR DEPUTY PRESIDENT ACTON
DEPUTY PRESIDENT GOOLEY SYDNEY, 24 JANUARY 2014.
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 - Transitional
Review - annual leave provisions in particular modern awards - payment during annual close
down - Fair Work Act 2009 - s.90.
Introduction
[1] The Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
(the Transitional Provisions Act) provides that the Fair Work Commission1 must conduct a
review of all modern awards2 as soon as practicable after 1 January 2012 (the Transitional
Review). This Full Bench has been allocated all applications dealing with annual leave. In a
decision3 dated 2 September 2013 the Full Bench dealt with the various applications before it.
However one matter, concerning payment for annual leave during an annual close down, was
left undecided because it had not been subject to detailed submissions from all interested
parties.
[2] The original application by Australian Business Industrial (ABI) sought to vary a
number of awards which contained a provision that did not appear to take into account the
revised concept in the National Employment Standards (NES) of annual leave accruing
progressively. The Full Bench majority identified a further list of awards that contained such a
provision and proposed that those covered by all of the awards containing such a provision
should be given an opportunity to make submissions on whether these awards should be
varied in line with the proposal of the ABI.
[2014] FWCFB 255
DECISION
E AUSTRALIA FairWork Commission
[2014] FWCFB 255
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[3] Interested parties were invited to make submissions regarding this matter. Written
submissions were received from:
ABI;
The Spotless Group;
The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries
Union” known as the Australian Manufacturing Workers’ Union (AMWU);
The Australian Workers’ Union (AWU); and
United Voice.
[4] The matter was listed for hearing on 18 November 2013. At the hearing, Mr L Izzo
appeared for ABI, Mr N Swancott appeared for United Voice, Ms L Cottam appeared for the
AWU and Mr J Moriarty appeared for the AMWU.
The variations sought
[5] The awards in question generally note that annual leave is provided for in the NES and
provide additional terms dealing with matters not dealt with in the NES. The general
entitlement to annual leave is contained in s.87 of the Fair Work Act 2009 (the Act). Section
87(2) provides that an employee’s entitlement to paid annual leave accrues progressively
during a year of service according to the employee’s ordinary hours of work, and accumulates
from year to year. Section 90 of the Act provides for payment during a period of annual leave
at the employee’s base rate of pay for the employee’s ordinary hours of work in the period.
[6] Various awards contain a provision in similar terms to the following clause in the
Asphalt Industry Award 20104 (Asphalt Industry Award):
“24.4 Close-down
(a) Where an employer intends temporarily to close (or reduce to nucleus)
during the Christmas/New Year period for the purpose, amongst others,
of allowing annual leave to the employees concerned or a majority of
them, the employer may give those employees one month’s notice in
writing of an intention to apply the provisions of this clause.
(b) In the case of any employee employed after notice has been given,
notice must be given to that employee on the date they are offered
employment.
(c) An employee who has accrued sufficient annual leave at the date of
closing in accordance with clause 24.4(a) must be:
(i) given annual leave commencing from the date of closing; and
[2014] FWCFB 255
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(ii) paid 1/12th of their ordinary pay for any period of employment
between accrual of the employee’s right to the annual leave and
the date of closing.
(d) Any employee who has not accrued sufficient annual leave at the date
of closing must be:
(i) given leave without pay from the date of closing; and
(ii) paid for any public holiday during such leave for which the
employee is entitled to payment.”
[7] ABI proposes that subclauses (c) and (d) should be replaced with the following:
“(c) Where an employee has been given notice pursuant to clause X(a) and the
employee has:
(i) accrued sufficient paid annual leave to cover the full period of closing,
the employee must take paid annual leave for the full period of closing;
(ii) insufficient accrued annual leave to cover the full period of closing, the
employee must take paid annual leave to the full amount accrued and leave
without pay for the remaining period of the closing; or
(iii) no accrued annual leave, the employee must take leave without pay for
the full period of closing.
(d) Public holidays that fall within the period of close down will be paid as
provided for in this award and will not count as a day of annual leave or leave without
pay.”
[8] The following awards contain a similar provision:
Asphalt Industry Award 20105
Cement and Lime Award 20106
Concrete Products Award 20107
Premixed Concrete Award 20108
Quarrying Award 20109
Aquaculture Industry Award 201010
Car Parking Award 201011
Cleaning services Award 201012
[2014] FWCFB 255
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Gas Industry Award 201013
Gardening and Landscaping Services Award 201014
Horse and Greyhound Training Award 201015
Miscellaneous Award 201016
Pest Control Industry Award 201017
Racing Clubs Events Award 201018
Racing Industry Ground Maintenance Award 201019
Security Services Industry Award 201020
Silviculture Award 201021
Surveying Award 201022
The Meaning and Intent of the Provisions
[9] It appears clear from the historical material provided by the parties that the clauses in
question were transposed from other instruments that contemplated a scheme for accruing
annual leave on an annual basis and the payment of pro rata annual leave accruals where an
employee had insufficient accrued leave accrued for the period of an annual shutdown. These
schemes included the Annual Holidays Act 1944 (NSW) and the Labour and Industry Act
1958 (Vic). By operation of the previous award and legislative provisions the clause had the
effect of providing the maximum payment of accrued annual leave to employees during a
shutdown and a corresponding minimisation of leave without pay. There was no notion of an
additional payment over and above the ordinary annual leave payments due.
[10] The continuation of this wording in conjunction with the obligation under the NES to
accrue annual leave progressively and make payment at the employee’s base rate of pay, gives
rise to an argument that clauses such as clause 24.4(c)(ii) of the Asphalt Industry Award
provide for an additional payment over and above the amount that would otherwise be
payable for an absence on annual leave.
[11] The parties appearing before us either contended that the provision was confusing and
uncertain or had difficulty enunciating its meaning. No party was able to provide a basis for
an interpretation that an additional payment is payable. We agree with the ABI that the
wording arose in a different legislative scheme and was never intended to provide for a
payment in addition to the annual leave payment under the NES. The current provisions in the
modern awards to which we have referred represent anomalies or technical problems arising
from the Part 10A award modernisation process which prevent those modern awards
operating effectively. We consider that the situation should be remedied in this review of
awards. We will make variations to all of the awards containing such a provision generally in
[2014] FWCFB 255
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line with the wording proposed by ABI. Determinations will be made varying the various
awards in accordance with this decision.
Corrections to original decision
[12] In correspondence to the Commission a number of minor corrections to our 2
September decision have been identified. Corrections have been made to that decision in line
with that correspondence.
VICE PRESIDENT WATSON
Appearances:
Mr L Izzo appeared on behalf of Australian Business Industrial.
Mr N Swancott appeared on behalf of United Voice.
Ms L Cottam appeared on behalf of the Australian Workers Union.
Mr J Moriarty appeared on behalf of the Australian Manufacturing Workers’ Union.
Hearing details:
2013.
Melbourne.
November, 18.
Printed by authority of the Commonwealth Government Printer
Price code C, PR546674
1 Fair Work Australia became the Fair Work Commission on 1 January 2013.
2 Other than enterprise awards and State Reference Public Sector Awards.
3 [2013] FWCFB 6266.
4 MA000054.
5 Ibid.
6 MA000055.
7 MA000056.
8 MA000057.
9 MA000037.
10 MA000114.
11 MA000095.
12 MA000022.
THE OF THE FAIR WORK C. SEN THE NOISS
http://www.fwc.gov.au/documents/modern_awards/award/ma000037/default.htm
http://www.fwc.gov.au/documents/modern_awards/award/ma000057/default.htm
http://www.fwc.gov.au/documents/modern_awards/award/ma000056/default.htm
http://www.fwc.gov.au/documents/modern_awards/award/ma000055/default.htm
[2014] FWCFB 255
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13 MA000061.
14 MA000101.
15 MA000008.
16 MA000104.
17 MA000097.
18 MA000013.
19 MA000014.
20 MA000016.
21 MA000040.
22 MA000066.
