[2015] FWCFB 644
The attached document replaces the document previously issued with the above code on 11
February 2015.
The Housing Industry Association was incorrectly referred to as the Housing Industry
Australia, and has been amended accordingly.
Katie Hossain
Associate to Justice Boulton, Senior Deputy President
Dated 12 February 2015.
1
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
4 yearly review of modern awards - transitional provisions
(AM2014/190)
JUSTICE BOULTON, SENIOR DEPUTY PRESIDENT
DEPUTY PRESIDENT KOVACIC
COMMISSIONER BULL
SYDNEY, 11 FEBRUARY 2015
4 yearly review of modern awards - Common Issues - Transitional Provisions relating to
accident pay, district allowances and redundancy - applications for removal of sunset
provisions - modern awards objective - terms containing State-based differences - model
transitional accident pay provision in awards - accident pay provision in the Black Coal
Mining Industry Award 2010 - model transitional district allowance provision in awards
relating to Western Australia and the Northern Territory - provision for Broken Hill
allowance in some awards - deletion of obsolete provisions from awards.
[1] These matters concern the transitional provisions dealing with accident pay, district
allowances and redundancy entitlements which were inserted into most modern awards
pursuant to the decision of the Award Modernisation Full Bench in the Award Modernisation
Decision 2008.1 The transitional provisions were expressed to operate for a period until 31
December 2014 (the sunset provisions), during which time the parties would have the
opportunity to give consideration to the future award regulation of those entitlements.2
[2] As part of the 4 yearly review of modern awards, the following applications were
made in relation to the relevant transitional provisions:
Applications by the Australian Council of Trade Unions (ACTU) to delete the sunset
provisions in the transitional provisions in some 112 modern awards relating to
accident pay and district allowances;
An application by the Mining and Energy Division of the Construction, Forestry,
Mining and Energy Union, (CFMEU) to delete the sunset provision in the accident
1 [2008] AIRCFB 1000.
2 Ibid at [87].
[2015] FWCFB 644 [Note: Judicial review of this decision [NSD 569 of
2015]; refer to the Federal Court decision dated 14 September 2015
[2015] FCAFC 131 for result of appeal.]
DECISION AND REASONS FOR
DECISION
E AUSTRALIA FairWork Commission
http://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2015/2015fcafc0131
[2015] FWCFB 644
2
pay provision in the Black Coal Mining Industry Award 2010 (the Black Coal
Award); and
Applications by the Australian Industry Group (Ai Group) to delete the transitional
provisions relating to accident pay, district allowances and redundancy from all
applicable awards.
[3] A background paper on the transitional provisions dealing with accident pay, district
allowances and redundancy was prepared by the research area of the Fair Work Commission
(the Commission) in June 2014. A series of conferences were convened by the President of
the Commission regarding the Transitional Provisions Common Issues.3 In July 2014 the
above-mentioned applications were referred to the Full Bench for hearing and determination.
[4] A timetable was established for the filing of submissions and evidence in relation to
the Transitional Provisions Common Issues. Written outlines of submissions, together with
evidence and other material, were filed by interested parties, mainly in September 2014, and
there were proceedings on 29 to 31 October 2014 before the Full Bench in which further
submissions were presented by the parties.
[5] At the conclusion of the proceedings on 31 October 2014, the Full Bench announced
its decision as follows:
“[4] Given the operative periods for the transitional provisions in modern awards,
we consider that it is appropriate for the Full Bench to announce our decision, at least
in relation to some of the matters before us, as early as possible.
[5] We have decided not to grant the ACTU application to delete the sunset
provisions in the transitional Accident Pay and District Allowance provisions in
modern awards. We do not consider that the case has been made out for the
continuation of those transitional provisions having regard to the basis on which they
were inserted by the Award Modernisation Full Bench in 2008 and to the submissions
and material presented in the proceedings before us.
[6] In particular we note that no party has sought the inclusion in modern awards
of a national standard on accident pay to apply to all award covered employees, as was
anticipated by the Award Modernisation Decision 2008.4 We also note that no
substantive case has been advanced such that the allowances applying in Western
Australia and the Northern Territory “should be a permanent feature of the awards
and, if so, the basis for their fixation and adjustment.”5 We also refer to the
requirement that the Commission have regard, in considering the ACTU application,
to the modern awards objective in section 134 and the requirements of sections 139
and 154 of the Fair Work Act 2009.
[7] In relation to the CFMEU application regarding the Black Coal Mining
Industry Award 2010, we have decided to delete clause 18.8 of that Award with effect
3 The conferences were held on 5 February, 26 February, and 3 June 2014.
4 [2008] AIRCFB 1000 at [87].
5 Ibid at [81].
[2015] FWCFB 644
3
from 31 December 2014. In this regard, we consider that the accident pay provision in
the Award provides a clear national standard for the particular industry as described in
the Award Modernisation Decision 2008.6
[8] In relation to the AiG application to delete transitional arrangements relating to
redundancy in modern awards, we have decided to vary the relevant awards with
effect from 1 January 2015. In this regard, we note that the transitional redundancy
provisions will by their terms cease to operate on 31 December 2014 and that no party
has opposed the removal of these provisions from awards.
[9] We will publish the reasons for this decision, and our decision on the other
applications relating to the Transitional Provisions Common Issues which were dealt
with in the proceedings, in due course.”
[6] We now provide the further reasons and decisions in relation to the applications before
the Full Bench.
The relevant transitional provisions
[7] The applications before the Full Bench relate to the transitional provisions dealing
with accident pay, district allowances and redundancy entitlements which were inserted into
most modern awards when they were first made.
[8] It is important at the outset of our consideration of the present applications to
recognise the basis upon which the Award Modernisation Full Bench inserted the provisions
relating to these matters on a transitional basis into modern awards.
(a) Accident Pay
[9] In relation to accident pay, the Award Modernisation Full Bench accepted that
accident pay may be characterised as an allowance.7 The Full Bench noted that accident pay
entitlements can be found in a number of awards and other instruments and that, while there is
a general pattern to the entitlements, there is a great diversity in the detail of the provisions.8
It was also noted that whilst accident pay is an allowable matter for the purpose of modern
awards it was not an allowable matter under the Work Choices amendments to the previous
legislation.9 The Full Bench observed that the cost of accident pay to employers and the value
to employees was a function of both the level of the award entitlement and the level of
benefits provided through the relevant workers’ compensation schemes.10
[10] The Full Bench concluded its consideration of accident pay as follows:
“[87] In light of these considerations we have decided to deal with accident pay on a
transitional basis. Our intention is to preserve accident pay arrangements until 31
6 Ibid at [88].
7 Ibid at [83].
8 Ibid at [84].
9 Ibid at [85].
10 Ibid at [86].
[2015] FWCFB 644
4
December 2014. We anticipate that in the period prior to that date an opportunity
will arise to consider the formulation of a national standard to apply to all award
covered employees. This task will be made considerably easier if uniformity is
developed in relation to workers compensation schemes.
[88] Where the accident pay scheme applying in a particular industry is clear we shall
include the terms of the scheme in the relevant modern award. Where there are a
variety of schemes operating, whether on a State or sectoral basis, in the industry to be
covered by a modern award we shall include a generally worded clause which is
designed to preserve the operation of each of those schemes until the end of the
transition period. The clause will be in the following form:
‘1.1 Subject to clause 1.2, an employee is entitled to accident pay in
accordance with the terms of:
(a) a NAPSA that would have applied to the employee immediately
prior to 1 January 2010 or an award made under the Workplace
Relations Act 1996 (Cth) that would have applied to the employee
immediately prior to 27 March 2006, if the employee had at that time
been in their current circumstances of employment and no agreement
made under the Workplace Relations Act 1996 (Cth) had applied to the
employee; and
(b) that would have entitled the employee to accident pay in excess of
the employee’s entitlement to accident pay, if any, under any other
instrument.
1.2 The employee’s entitlement to accident pay under the NAPSA or award is
limited to the amount of accident pay which exceeds the employee’s
entitlement to accident pay, if any, under any other instrument.
1.3 This clause does not operate to diminish an employee’s entitlement to
accident pay under any other instrument.
1.4 This clause ceases to operate on 31 December 2014.’ ”
(b) District Allowances
[11] In relation to district allowances applying in Western Australia and the Northern
Territory, the Award Modernisation Full Bench noted that, although historically the
allowances were related to the cost of living in the relevant geographic areas, if such
provisions were to be part of the modern award system there would need to be a consistent
and fair national basis for their fixation and adjustment.11 The Full Bench decided as follows:
“[81] In relation to the allowances in NAPSAs and pre-reform awards operating in
Western Australia, it is appropriate that those should be maintained in modern awards
until there is a proper opportunity to consider whether they should be a permanent
11 Ibid at [80].
[2015] FWCFB 644
5
feature of the awards and, if so, the basis for their fixation and adjustment. We do not
intend to provide for any automatic adjustment at this stage. Because of the nature of
the Northern Territory allowance, it cannot be maintained for more than five years
and, because of the decision of the Full Bench, it should not be adjusted during that
period. We shall provide that the district, locality or remote area allowances, described
generally as district allowances, applying in Western Australia and the Northern
Territory be preserved for a period of five years in a transitional provision. Most of the
modern awards contain the following standard clause:
‘1.1 Northern Territory
An employee in the Northern Territory is entitled to payment of a district
allowance in accordance with the terms of an award made under the Workplace
Relations Act 1996 (Cth):
(a) that would have applied to the employee immediately prior to
1 January 2010, if the employee had at that time been in their current
circumstances of employment and no agreement made under that Act
had applied to the employee; and
(b) that would have entitled the employee to payment of a district
allowance.
1.2 Western Australia
An employee in Western Australia is entitled to payment of a district allowance
in accordance with the terms of a NAPSA or an award made under the
Workplace Relations Act 1996 (Cth):
(a) that would have applied to the employee immediately prior to
1 January 2010, if the employee had at that time been in their current
circumstances of employment and no agreement made under that Act
had applied to the employee; and
(b) that would have entitled the employee to payment of a district
allowance.
1.3 This clause ceases to operate on 31 December 2014.’
[82] In order to assist those covered by the award, administrative arrangements will be
made to prepare and publish a list of the relevant allowances. There can be a full
examination of all the matters relevant to the allowances sometime after 1 January
2010 either on application or as part of the review contemplated by the Fair Work
Bill.”
(c) Redundancy
[2015] FWCFB 644
6
[12] In relation to redundancy provisions, the Award Modernisation Full Bench considered
several matters relating to the maintenance of a fair minimum safety net for employees. The
Full Bench decided that as a general rule the small business exemption determined in the
Termination, Change and Redundancy decisions of 198412 should be maintained.13
[13] The Full Bench also decided that differentials in some awards based on redundancy
pay schemes in State awards and legislation should be included on a transitional basis in
modern awards. The Full Bench said:
“[61] There are a number of different redundancy pay schemes in State awards and
legislation which are reflected in NAPSAs. These schemes sometimes include
provisions which are more beneficial for employees than those contained in the NES.
Provisions in this category include more generous redundancy pay scales, redundancy
pay for employees of small businesses, different calculations for base pay and so on. It
is appropriate that these interstate differentials be taken into account in transitional
provisions. Most awards will contain a transitional provision as follows:
‘1.1 Subject to clause 1.2, an employee whose employment is terminated by an
employer is entitled to redundancy pay in accordance with the terms of a
NAPSA:
(a) that would have applied to the employee immediately prior to 1 January
2010, if the employee had at that time been in their current circumstances of
employment and no agreement made under the Workplace Relations Act 1996
(Cth) had applied to the employee; and
(b) that would have entitled the employee to redundancy pay in excess of the
employee’s entitlement to redundancy pay, if any, under the NES.
1.2 The employee’s entitlement to redundancy pay under the NAPSA is limited
to the amount of redundancy pay which exceeds the employee’s entitlement to
redundancy pay, if any, under the NES.
1.3 This clause does not operate to diminish an employee’s entitlement to
redundancy pay under any other instrument.
1.4 This clause ceases to operate on 31 December 2014.’ ”
[14] It is clear that the Award Modernisation Full Bench anticipated that there would be
further developments and consideration given by the parties during the five-year transitional
period as to whether and if so in what form provisions relating to accident pay and district
allowances should be included in modern awards as part of the safety net. However it is
noted that no applications were made for the variation or review of these provisions until after
the commencement of the current 4 yearly review of awards.
12 Print F6230, (1984) 8 IR 34, 2 August 1984 and Print F7262, (1984) 9 IR 115, 1, 14 December 1984.
13 [2008] AIRCFB 1000 at [60].
[2015] FWCFB 644
7
[15] We now turn to deal with the applications for award variations before us.
The ACTU applications
[16] The ACTU applications seek the deletion of the sunset provisions which provide that
the transitional clauses dealing with accident pay and district allowances cease to operate on
31 December 2014. In making the applications, the ACTU noted that some of its affiliates
might seek to deal with substantive aspects of the ACTU's claims in relation to accident pay
and district allowances in the relevant award by award stage of the four-yearly review.
(a) Accident Pay
[17] In support of the applications relating to accident pay, the ACTU submitted that:
Accident pay is an allowance that can be included in modern awards under
s.139(1)(g) of the Fair Work Act 2009 (the Act);
The development of a national standard of accident pay has not been achieved
largely because harmonisation or uniformity of workers’ compensation schemes has
not been able to be achieved within the timeframe contemplated by the Award
Modernisation Full Bench;
In the absence of a uniform national workers’ compensation scheme, it is appropriate
to retain accident pay provisions in modern awards on a permanent basis in order to
ensure that employees have access to a fair and relevant safety net;
Accident pay is not a term or condition of employment which is determined by
reference to State or Territory boundaries or which is expressed to operate in one or
more, but not every, State and Territory (s.154(1)); and
The retention of the existing accident make-up pay entitlements is necessary to
ensure that modern awards are meeting the modern awards objective in s.134 of the
Act.
[18] The ACTU submitted that it is necessary to deal with all other aspects of accident pay,
apart from the removal of the sunset provisions, on an award by award basis during the award
stage of the 4 yearly review. In this regard the ACTU indicated that its affiliated unions may
seek to insert varying accident pay provisions dealing with matters such as quantum, time
limits and the relationship with leave entitlements into their relevant modern awards.
[19] The applications to delete the sunset provisions in the accident pay clauses in modern
awards were opposed by the employer groups which participated in the proceedings. The
main submissions were put on behalf of the Australian Chamber of Commerce and Industry
(ACCI) and the Ai Group.
[20] The ACCI submitted that:
the Award Modernisation Full Bench did not generally endorse or create an accident
pay clause to form part of the minimum safety net but rather "preserved" various
[2015] FWCFB 644
8
existing arrangements until the end of the transition period by which time it was
anticipated that the issue of accident pay would be revisited;
the accident pay provisions cannot be included in modern awards as part of the
minimum safety net as the provisions which would be preserved in awards if the
sunset provisions are deleted do not meet the modern awards objective in s. 134 of
the Act;
no probative evidence has been advanced in support of the provisions as required by
the Commission in the Preliminary Issues Decision relating to the 4 yearly review of
modern awards;14
the ACTU claim offends ss.139 and 154 of the Act; and
as a matter of general principle it is undesirable to express terms and conditions in
modern awards by reference to external instruments/documents.
[21] The ACCI referred to the accident pay clause in the Graphic Arts, Printing and
Publishing Award 201015 as illustrating the complexity involved for employers in the
interpretation and application of the current accident pay transitional provisions in modern
awards. This complexity was a further reason for rejecting the ACTU's applications.
[22] The Ai Group submitted that the ACTU applications should be rejected for the
following reasons:
it was not intended by the Award Modernisation Full Bench that the model accident
pay clause would continue beyond 31 December 2014;
no party has proposed that the Full Bench should, in the context of the current
review, develop a national standard relating to accident pay as was envisaged by the
Award Modernisation Full Bench;
there never has been a national accident pay standard as most pre-modern awards
and Notional Agreements Preserving State Awards (NAPSAs) did not include
accident pay provisions;
there would be a significant cost impact on employers if the existing accident pay
provisions are extended;
it is more appropriate that compensation for injured workers should be dealt with
through the workers’ compensation system, not the award system;
the maintenance of provisions in modern awards which preserve accident pay
provisions which have different effects in different States and Territories would be
contrary to s.154 of the Act; and
14 ‘4 Yearly Review of Modern Awards: Preliminary Jurisdictional Issues’ [2014] FWCFB 1788.
15 Clause 26, MA000026.
[2015] FWCFB 644
9
the ACTU has not established that the extended operation of the current accident pay
provisions is necessary to achieve the modern awards objective (s.138) or that the
retention of the accident pay provisions is necessary to ensure that modern awards
provide a fair and relevant minimum safety net (s.134).
[23] The other employer groups which appeared in the proceedings16generally supported
the submissions of the ACCI and the Ai Group.
[24] Having considered the submissions presented, we decided to reject the ACTU's
application to delete the sunset provisions in the transitional accident pay provisions in
modern awards.17
[25] There are two main reasons for the rejection of the ACTU application.
[26] First, we do not consider that the case has been made out for the continuation of the
transitional accident pay provisions having regard to the basis on which they were inserted
into modern awards. In this regard we note that no party has sought the inclusion in modern
awards of a national standard on accident pay to apply to all award covered employees, as was
anticipated by the Award Modernisation Decision 2008. Further we note that it has not been
demonstrated in the proceedings before us that the accident pay entitlements which would
continue to operate if the sunset provisions are removed would provide a clear national
accident pay scheme applying under the relevant modern awards.18
[27] In these circumstances, we do not consider that we should depart from the position
determined by the Award Modernisation Full Bench in 2008 that the continuation in modern
awards of the diverse accident pay arrangements applying under pre-modern awards and
NAPSAs should be for a limited period only.
[28] Second, in our view the removal of the sunset provisions, and therefore the
determination that the current transitional accident pay provisions should continue to apply, is
not appropriate having regard to the modern awards objective in s.134 of the Act (see also
s.138).
[29] Whilst we do not rule out the possibility that accident pay provisions may be necessary
and appropriate in some modern awards in order to provide a fair and relevant minimum
safety net of terms and conditions, we do not consider that the current transitional accident
pay provisions can continue to be included in awards consistent with the modern awards
objective. This is because, as submitted by the employer groups, the transitional provisions
are complex and both difficult to understand and apply. The application of the provisions is
to be ascertained having regard to the relevant terms of pre-reform awards and instruments,
most if not all of which are no longer in operation. We agree with the submission of the
ACCI that as a general principle it is undesirable to express terms and conditions in modern
awards by reference to external instruments and documents.
16 The Housing Industry Association (HIA), the National Farmers’ Federation (NFF), the Australian Meat Industry Council
(AMIC), and the Chamber of Commerce and Industry of Western Australia (CCIWA).
17 [2014] FWCFB 7767.
18 [2008] AIRCFB 1000 at [88].
[2015] FWCFB 644
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[30] The maintenance of accident pay provisions in modern awards in the terms of the
current transitional provisions would not contribute towards ensuring that Australia has "a
simple, easy to understand, stable and sustainable modern award system" (s.134(1)(g)) and
would have adverse impacts in terms of the regulatory burden on business (s.134(1))f)).
Further those provisions do not meet the requirement that any allowance included in a modern
award must be "clearly identified" in the award (see s.139(2)).
[31] For these reasons we determined that the ACTU application which simpliciter sought
the deletion of the sunset provision in the model accident pay clauses in modern awards
should be refused.
[32] The submissions of most of the employer groups included a submission to the effect
that the preservation or continued operation of the existing accident pay provisions in modern
awards would be contrary to s.154 of the Act. Section 154 provides that a modern award
must not contain a term that is determined by reference to State or Territory boundaries or is
expressed to operate in one or more, but not every, State or Territory.
[33] For present purposes, the relevant parts of s.154 are subsections (1) and (2) which
provide as follows:
“154 Terms that contain State-based differences
General rule--State-based difference terms must not be included
(1) A modern award must not include terms and conditions of employment
(State-based difference terms) that:
(a) are determined by reference to State or Territory boundaries; or
(b) are expressed to operate in one or more, but not every, State and
Territory.
When State-based difference terms may be included
(2) However, a modern award may include State-based difference terms if the
terms were included in the award:
(a) in the award modernisation process; or
(b) in accordance with subsection (3);
but only for up to 5 years starting on the day on which the first modern award
that included those terms came into operation.”
[34] We were not given a detailed explanation in the proceedings of the operation of
particular accident pay clauses in each of the relevant modern awards and the extent to which
the entitlements would contravene s.154 of the Act. We do, however, accept that when
determining the accident pay entitlement under a modern award flowing from the model
clause it is necessary to have regard to the relevant terms of the predecessor awards and
instruments and that some of the pre-reform instruments contain terms which limit the
application of the relevant accident pay scheme by reference to State boundaries. In this
regard, we note that the Award Modernisation Full Bench did not determine that the model
clause preserving the accident pay entitlements in the pre-reform awards and instruments
would be contrary to s.576T of the Workplace Relations Act 1996, the precursor provisions to
s.154 of the Act. However the Full Bench did limit the operation of such terms to a period of
5 years – the term contemplated by s.576T for the operation of modern award terms
containing State-based differences.
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[35] In these circumstances we cannot make any overall assessment as to whether the
model accident pay clauses as they apply in the relevant modern awards would offend s.154
of the Act. This would require an analysis of the operation of the accident pay provisions in
each of the relevant modern awards. Such an analysis was not undertaken by the parties in
the present proceedings. In any event it is not necessary for us to make a final ruling on this
matter as we have, for the reasons given above, decided to reject the ACTU applications
seeking the deletion of the sunset provision in the model accident pay clause in the relevant
modern awards.
[36] There were submissions in the proceedings about the possibility of crafting modern
award terms that would maintain the previously applicable State-based accident pay schemes
in a manner that would not contravene s.154 of the Act. In this regard there was some
reference to the different costs to employers in different States as a result of differential
entitlements of workers under the State workers’ compensation schemes. It was submitted by
the Ai Group inter alia that accident pay provisions would contravene s.154 of the Act
because the entitlement will fluctuate based on the level of payments available under State
workers’ compensation schemes. It was said that to the extent that these schemes are State-
based the provisions will have force either within or referable to State boundaries and in that
sense will contravene s.154 of the Act.19
[37] We doubt that the mere fact that the cost of accident make-up pay to an employer in
any individual case may differ from employee to employee and from State to State would
mean that the accident pay provision could be said inherently to offend s.154. The differences
and inconsistencies in such circumstances would be the result of differences which exist
between the State workers’ compensation schemes rather than differences relating to any
general entitlement of employees covered by a modern award to accident make-up payments.
[38] These are matters which will need to be considered by the parties in the context of the
further proceedings before the Full Bench regarding applications for the inclusion of accident
pay provisions into modern awards.
(b) District Allowances
[39] The ACTU submitted that district allowances should be retained in awards as they are
relevant to the circumstances of workers living and working in geographically remote areas
and are needed in order to compensate them for the disadvantages involved. It was also
submitted that district allowances are necessary to ensure that modern awards are meeting the
modern awards objective.
[40] It was said that the majority of district allowances which apply in Western Australia
have a consistent basis for their setting and that there was extensive work done to develop the
indices that determine the level and nature of the allowances. In this regard, reference was
made to the General Order made by the Western Australian Industrial Commission in Court
Session in May 198020 and to subsequent decisions of the Western Australian Commission in
19 Transcript at PN1293 and 1317-1323.
20 60 WAIG 1141. We note that in its decision the Commission in Court Session stated that they thought it was undesirable
that there should be a permanent general prescription for district allowances and suggested that the matter be looked at
[2015] FWCFB 644
12
adjusting district allowances. It was said that the allowances were determined using a
consistent process that incorporates isolation, climatic conditions and regional price
differences and that these considerations remain relevant in contemporary circumstances. The
ACTU submitted that the aim of consistency and fairness would be best met by allowing the
current entitlements to district allowances to remain through the removal of the sunset
provision and by allowing for parties who wish to extend the entitlements to seek to do so in
the award stage of the 4 yearly review.
[41] The ACTU submitted that district allowances are able to be included as terms of
modern awards and are not contrary to s.154 of the Act. The Explanatory Memorandum
makes it abundantly clear that s.154 permits modern awards to contain district allowances:
“597. It is not intended that clause 154 would prohibit modern awards including terms
that have differing practical operation in different States and Territories, provided that
they are capable of applying in each State or Territory. For example, a modern award
could contain a provision that allowed for the payment of a remote location allowance
or tropical allowance to address a particular degree of remoteness or particular climatic
conditions.”21
[42] The ACTU acknowledged that district allowances are confined to particular locations.
However it was said that these locations are not set by State or Territory boundaries and they
do not discriminate on a State or Territory basis in terms of where they operate. District
allowances operate in locations which justify additional payments for a variety of reasons and
their operation is independent of State or Territory boundaries.
[43] In relation to the modern awards objective, the ACTU submitted that the deletion of
the sunset provision and the continued operation of the district allowance provisions would
ensure that the relative living standards of the low paid are not reduced (s.134(1)(a)) and may
encourage industrial parties to bargain for other terms and conditions of employment which
benefit employees in locations which are subject to district allowances (s.134(1)(b)). The
failure to retain district allowances could in some cases have the effect of acting as a
disincentive for employees in remote locations to seek employment or to remain in the
workforce, given the additional payments available under some social security income
support schemes to residents of remote areas (s.134(1)(c)). Generally it was put that
employers and employees understand the existing district allowance provisions and that it
would be unfair for workers in remote localities to lose these entitlements.
[44] The Shop, Distributive and Allied Employees’ Association (SDA) supported the
ACTU's submissions. The Western Australian Branch of the SDA submitted that the benefits
of existing district allowances should be preserved until the conditions imposed by the Award
on an award by award basis with regard to the nature of the employment in question under each award (see at page 1152).
See also comments of the Commission in Court Session in matters 241 and 280 of 1991 (decision 16 April 1991 making
annual adjustments to location allowances in the General Order).
21 Explanatory Memorandum to the Fair Work Bill 2009 at [597]. Further, the Second Reading Speech provided that the
restrictions imposed on modern awards containing state-based differences would ‘not prevent the Commission including
in awards terms and conditions that are appropriate and based on objectively ascertainable regional circumstances and on
the evidence of the parties that such a term or condition is necessary to ensure a fair minimum safety net.’ Julia Gillard
MP, Second Reading Speech, Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008, House
of Representatives Hansard, 17 March 2008, 1851.
[2015] FWCFB 644
13
Modernisation Full Bench have been met, namely that there is an enquiry into whether district
allowances should become a permanent feature of awards and, if so, how they should be fixed
and adjusted. It was said that such an enquiry is likely beyond the scope of the current
proceedings but that such an enquiry would satisfy the Commission that there exists a rational
system for the inclusion of district allowances in modern awards – applicable on a national
basis and consistent and fair in relation to fixation and adjustment. It was submitted that
modern awards should provide for the payment of an allowance, applicable in all States and
Territories, to compensate employees for disabilities associated with the performance of work
in harsh climatic conditions and/or remote locations. An interim order should be made
preserving the benefit of district allowance clauses until such time that the enquiry can be
completed.
[45] The employer parties opposed the ACTU applications in relation to district
allowances.
[46] The ACCI submissions in relation to district allowance clauses were similar to what
was put in relation to accident pay provisions. In particular, it was submitted that the ACTU
applications offend ss.139(2) and 154 of the Act and cannot be included in modern awards as
part of the minimum safety net. It was said that the case against the continued operation of
the district allowance clauses is stronger than in relation to accident pay provisions having
regard to the text included in modern awards which provides that district allowance
entitlements only apply to employees in the Northern Territory and Western Australia. This
clearly offends s.154(1)(b) as being “expressed to operate in one or more, but not every, State
or Territory".
[47] The ACCI provided an analysis of the awards covered by the ACTU applications. It
was said that only 58 of the 98 modern awards are linked to transitional instruments providing
an entitlement to a district allowance. It was therefore said that district allowances are not a
generally accepted industrial benefit. It was also said that the granting of the ACTU
applications would result in a complex, difficult to understand and unstable set of entitlements
to district allowances being left in modern awards. Those entitlements will need to be
determined by reference to instruments that no longer operate and which are difficult to
locate. It was also unclear from the ACTU applications how it was proposed that such
allowances would be varied in the future. In relation to the other 40 awards the ACCI
submitted that the continuation of the transitional district allowance provisions past 31
December 2014 would serve no purpose.
[48] The Chamber of Commerce and Industry of Western Australia (CCIWA) supported
the submissions made by ACCI and provided further analysis of district allowances applicable
in Western Australia. The CCIWA referred to the methodology regarding the calculation of
district allowances in Western Australia adopted in 1980 and the approach of the Western
Australian Industrial Relations Commission in updating the cost of living component of the
allowances. It was submitted that there have been substantial changes both in terms of
economic development and living standards within regional areas of Western Australia since
the allowances were established and that the allowances and the adjustment mechanism do not
reflect the current circumstances of employees working in those areas.
[49] The Ai Group also opposed the ACTU applications. It was submitted that the district
allowance provisions cannot be retained past 31 December 2014 having regard to s.154 of the
Act. It was also put that such provisions should not be included in modern awards as they are
[2015] FWCFB 644
14
not necessary to achieve the modern awards objective (s.138). In relation to the Northern
Territory allowances, the Ai Group referred to the decision of a Full Bench of the Australian
Conciliation and Arbitration Commission in 1984 which considered the continuing relevance
of the allowances having regard to changes and developments in the Territory.22 The Full
Bench in that case determined that, although having regard to its conclusions it could be
argued that the allowances should be abolished or phased out, the proper course was to retain
the district allowances at their existing level but without further adjustment by indexation or
otherwise. The Full Bench said that: "In this way the allowances will lose their significance
over time." The Ai Group submitted that the matters which the allowances sought to address,
namely factors going to isolation and climate, are no longer relevant in relation to the
Northern Territory and that the allowances with respect to employees in Western Australia,
Broken Hill and Queensland are similarly no longer relevant.
[50] The Ai Group also referred to the complex task which was involved for employers in
determining whether an employee is eligible for a district allowance under the current
provisions. It was submitted that the retention of the district allowance clause in its present
form would be contrary to the modern awards objective as it requires ongoing reference to a
range of pre-reform instruments which vary in their coverage, structure and the quantum of
allowances (s.134(1) (f) and (g)).
[51] The other employer groups which appeared in the proceedings generally supported the
submissions of the ACCI and the Ai Group.
[52] Having considered the submissions presented, we decided to reject the ACTU's
applications to delete the sunset provisions in the transitional district allowance provisions in
modern awards.23
[53] The main reason for this decision is simply that the current transitional district
allowances provisions cannot be retained in awards consistent with s.154 of the Act. By the
terms of those provisions, they operate only in respect of Western Australia and the Northern
Territory. Subsection 154(1)(b) provides that a modern award must not include terms that
"are expressed to operate in one or more, but not every, State or Territory." In these
circumstances, it would be inappropriate to remove the sunset provisions and thereby purport
to continue in operation the current district allowance provisions.
[54] Apart from this, we do not consider that those provisions can be retained in awards
consistent with the modern awards objective (ss.134 and 138). In particular, we consider that
the provisions in their present form are complex, difficult to understand and apply and
contrary to what is sought to be achieved through the modern award system (see s.134(1)(f)
and (g)).
[55] Further, we do not consider that a proper case has been made out in the present matter
for this Full Bench to depart from the decision taken by the Award Modernisation Full Bench
in 2008, namely that the district allowances operating in Western Australia should be
preserved in modern awards for a transitional period only and "until there is a proper
opportunity to consider whether they should be a permanent feature of the awards and, if so,
22 Decision - District Allowance Clauses - Northern Territory Awards, Print F4832, 10 April 1984.
23 [2014] FWCFB 7767.
[2015] FWCFB 644
15
the basis for their fixation and adjustment."24 As we noted in our decision, no substantive
case was advanced in the proceedings before us for the retention of the allowances applying in
Western Australia. In this regard, it has been indicated that the ACTU and affiliated unions
will seek to have provisions inserted into various modern awards which provide compensation
for employees working in remote localities and/or under harsh conditions and which are
drafted having regard to the relevant provisions of the Act. This may provide the opportunity
for the “full examination of all matters relevant to the allowances” to be undertaken, as
contemplated by the Award Modernisation Full Bench.
[56] The position regarding the Northern Territory allowances is somewhat different. We
note that there were very limited submissions put to us which specifically addressed these
allowances. Given the history of the allowances and the decisions taken by industrial
tribunals regarding their nature and continuing relevance, we do not envisage that these
allowances could be retained in modern awards.
[57] In relation to the ACTU applications, there are four awards which contain provision
for Broken Hill allowance in the district allowance clause.25 The provision for the allowance
is in the following terms:
“Broken Hill
An employee in the County of Yancowinna in New South Wales (Broken Hill)
will in addition to all other payments be paid an allowance for the exigencies of
working in Broken Hill of 4.28% of the standard rate.”
[58] The sunset provision in the district allowance clause in the awards applies in relation
to the whole clause, including to the Broken Hill allowance.
[59] There was little put by way of submission in the proceedings as to what should be the
position regarding the Broken Hill allowance. The ACTU applications sought the removal of
the sunset provision which would leave the Broken Hill allowance, together with the district
allowances in Western Australia and the Northern Territory, in operation. We have rejected
the ACTU applications for the removal of the sunset provisions so far as they relate to district
allowances in Western Australia and the Northern Territory. We must however decide
whether this should be the result also in relation to the Broken Hill allowance in the four
modern awards.
[60] Little or no attention was given to this matter by most parties to the proceedings. The
South Australia, Northern Territory and Broken Hill Branch of the SDA submitted that the
maintenance of the allowance meets the modern awards objective and in particular provides
entitlements under the relevant awards for low-paid workers who would be adversely affected
by the removal of the allowance.
[61] The Ai Group in its applications sought the deletion from modern awards of the
transitional provisions relating to district allowances on the basis that such clauses would be
24 [2008] AIRCFB 1000 at [80].
25 Fast Food Industry Award 2010, MA000003, clause 19.9(c); General Retail Industry Award 2010, MA000004, clause
20.13(c); Hair and Beauty Industry Award 2010, MA000005, clause 22.3; and Pharmacy Industry Award 2010,
MA000012, clause 19.7(c).
[2015] FWCFB 644
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obsolete after 31 December 2014 and are no longer necessary to achieve the modern awards
objective (s.138). It was submitted that the district allowances with respect to employees in
Western Australia, Broken Hill and Queensland were, in a similar way as the allowances in
the Northern Territory, no longer relevant.
[62] We note that the Broken Hill allowance is in different terms to the transitional
provisions relating to district allowances in Western Australia and the Northern Territory.
The entitlement to the allowance is specified in the four awards and is expressed as a
percentage figure of the standard rate under the award. It does not require reference to any
other instruments. The calculation of the allowance is therefore straightforward and the
allowance is not a term or condition of employment determined by reference to State or
Territory boundaries.
[63] In these circumstances, we cannot conclude on a similar basis as in relation to the
district allowances in Western Australia and the Northern Territory that the Broken Hill
allowance should not be maintained as part of the safety net for workers covered by the
relevant awards. On the basis of the limited material before us, we are satisfied that the
maintenance of the Broken Hill allowance in the awards is appropriate having regard to the
modern awards objective (ss.134 and 138) and other relevant considerations. The allowance
will therefore be retained in the awards.
[64] In so deciding, we note that some of the unions in the proceedings have made
application for the inclusion of nationally applicable remote allowance provisions in modern
awards and that the SDA has indicated its support for these claims. It may therefore be
appropriate for the parties to the awards to revisit the Broken Hill allowance having regard to
the outcome of such claims.
The Black Coal Mining Industry Award 2010
[65] The CFMEU sought the deletion of the sunset provision (clause 18.8) from the
accident pay clause in the Black Coal Award.
[66] The clause in the Black Coal Award is not in the same terms as the model accident pay
clause inserted into most modern awards by the Award Modernisation Full Bench. Clause 18
of the Black Coal Award sets out the accident pay entitlement in substantially the same terms
as in the award it was intended to supersede26 and applies to all employees within the
coverage of the award. However a sunset provision was included in the modern award when
it was made.
[67] Clause 18 of the Black Coal Award provides as follows:
“18. Accident pay
An employee in receipt of weekly payments under the provisions of applicable
workers compensation legislation will be entitled to receive accident pay from
the employer subject to the following conditions and limitations:
18.1 Payment to be made during incapacity
26 Coal Mining Industry (Production and Engineering) Consolidated Award 1997.
[2015] FWCFB 644
17
An employer must pay, or cause to be paid, accident pay during the incapacity
of the employee, within the meaning of the applicable workers compensation
legislation:
(a) until such incapacity ceases; or
(b) until the expiration of a period of 78 weeks from the date of injury;
whichever event will first occur, even if the employer terminates the
employee’s employment within the period.
18.2 Meaning of accident pay
For the purposes of this clause accident pay means:
(a) For the initial period of 39 weeks from the date of injury, a weekly
payment representing the difference between the weekly amount of
compensation paid to the employee under the applicable workers
compensation legislation and the weekly amount that would have been
received by virtue of this award had the employee been on paid
personal leave at the date of the injury (provided the latter amount is
greater than the former amount).
(b) For a further period of 39 weeks a weekly payment representing the
difference between the weekly amount of compensation paid to the
employee under the applicable workers compensation legislation and
the rate prescribed from time to time for the classification of the
incapacitated employee at the date of the injury (provided the latter
amount is greater than the former amount).
18.3 Pro rata payments
In respect of incapacity for part of a week the amount payable to the employee
as accident pay will be a direct pro rata.
18.4 When not entitled to payment
An employee will not be entitled to any payment under this clause in respect of
any period of paid annual leave or long service leave, or for any paid public
holiday.
18.5 Redemptions
In the event that an employee receives a lump sum in redemption of weekly
payments under the applicable workers compensation legislation, the liability
of the employer to pay accident pay as herein provided will cease from the date
of such redemption.
18.6 Damages independent of the Acts
Where the employee recovers damages from the employer or from a third party
in respect of the said injury independently of the applicable workers
compensation legislation, such employee will be liable to repay to the
employer the amount of accident pay which the employer has paid under this
clause and the employee will not be entitled to any further accident pay
thereafter.
[2015] FWCFB 644
18
18.7 Calculation of period
The 78 week period commences from the first day of incapacity for work, which
may be subsequent to the date of injury. Intermittent absences arising from the
one injury are to be cumulative in the assessment of the 78 week limitation.
18.8 Clause ceases to operate
This clause ceases to operate on 31 December 2014.”
[68] In support of its application, the CFMEU tendered a comprehensive statement by Mr
Andrew Vickers, the General Secretary of the Mining and Energy Division of the CFMEU.
The statement provided a detailed explanation of the history of accident pay provisions in the
coal mining industry. It was said that accident pay has a long and largely uncontroversial
history as an award provision in the coal mining industry and that the key decisions of
industrial tribunals introducing or enhancing accident pay standards in the industry have had
regard to the special characteristics of the industry and, in particular, its inherent safety
hazards and associated high risk of injury to employees.
[69] It was submitted by the CFMEU that the accident pay provision in the Black Coal
Award should be continued having regard to the long history of the provision and its
characteristics. It was said that the accident pay clause has largely existed in its current form
since 1980. It is simply drafted and easy to understand and is well understood by employees
and employers in the coal mining industry. It was submitted that the clause is a necessary part
of a fair and relevant minimum safety net of terms and conditions for workers in the coal
mining industry, having regard to the matters referred to in s.134 of the Act. It does not
offend s.154 as the accident pay entitlement under the award is uniform and not subject to
inter-State differentials. It was said that it applies equally to every employee and employer
covered by the award, regardless of the State or Territory in which the employer and
employee are located.
[70] The CFMEU application was opposed by some employer groups. In its written
submissions, the ACCI recognised that the Black Coal Award contains a substantive clause
dealing with accident pay which operates in its own right without reference to award-based
transitional instruments but which "curiously" contains a transitional end date of 31 December
2014. It was also submitted that the clause stands apart from the model transitional accident
pay clause in other awards and does not suffer the "frailties" of s.139(2) or s.154 of the Act.27
The ACCI did not consent or oppose the variation sought by the CFMEU. The Ai Group
submitted that the accident pay clause in the Black Coal Award falls foul of s.154(1)(a) of the
Act because the entitlement will fluctuate based on the level of payments under the relevant
workers’ compensation schemes. It was said that to the extent that these schemes are State-
based the provisions will have force either within or referable to State boundaries and in that
sense will contravene s.154 of the Act.28 The Coal Mining Industry Employer Group
supported the submissions of the Ai Group.29
27 Transcript at PN1216-1222, 1224.
28 Transcript at PN1293 and 1317-1323.
29 Written submission by the solicitors for the Coal Mining Industry Employer Group dated 5 September 2014.
[2015] FWCFB 644
19
[71] As stated in our decision, we consider that the accident pay provision in the Black
Coal Award provides a clear national standard for the particular industry as described in the
Award Modernisation Decision 2008.30 In this regard, there was a significant amount of
material presented by the CFMEU in the proceedings regarding the history and application of
the provision and relevant decisions of industrial tribunals. The application of the provision is
understood in the industry and does not depend on reference to other industrial instruments.
The provision does not in our view include State-based terms or conditions of employment
contrary to s.154 of the Act. As stated above, we do not consider that the fact that the
provision may operate in the context of different State workers’ compensation schemes, and
that the level of make-up payments may therefore vary for workers in different States, would
of itself lead to the conclusion that the provision contravenes s.154.
[72] For these reasons, we decided to remove the sunset provision in clause 18 of the Black
Coal Award.
The Ai Group applications
[73] The Ai Group sought the deletion of the transitional provisions relating to accident
pay, redundancy and district allowances in all modern awards which currently contain these
provisions. The basis for the amendments proposed by the Ai Group was that the existing
provisions would cease to operate on 31 December 2014 and would thereafter be obsolete. It
was submitted that the deletion of obsolete provisions in awards has obvious merit and is
consistent with the modern awards objective in s.134, particularly the need to ensure a simple
and easy to understand award system (s.134(1)(g)).
[74] There was no opposition to the removal of the transitional redundancy provisions in
modern awards and, in our decision of 31 October 2014, it was determined that these
provisions would be deleted.
[75] In relation to the model transitional provisions dealing with accident pay and district
allowances applying in Western Australia and the Northern Territory, it was submitted by the
Ai Group that the only opposition to their removal was based on the ACTU's applications to
remove the sunset provisions in the relevant award clauses.
[76] Given the decisions made in relation to the ACTU's applications for the removal of the
sunset provisions, it is appropriate to remove from modern awards the model transitional
accident pay and district allowances provisions which ceased to operate on 31 December
2014. It is our understanding that the deletion of these provisions, as sought by the Ai Group
and in the light of the outcome of the ACTU's applications, was not opposed by any party.
The deletion from modern awards of provisions which are no longer in operation is consistent
with the modern awards objective (ss.134 and 138).
Orders
[77] Orders will be made varying the relevant modern awards to give effect to the decisions
reached by the Full Bench. The Ai Group should prepare and file draft orders to vary the
relevant awards by removing obsolete provisions relating to accident pay, redundancy and
30 [2008] AIRCFB 1000 at [88].
[2015] FWCFB 644
20
district allowances. The SDA should prepare and file draft orders in relation to the four
awards containing provision for Broken Hill allowance. The draft orders should be filed
within 14 days of this decision. The determination varying the Black Coal Award has already
been made.31
SENIOR DEPUTY PRESIDENT
Appearances:
T. Clarke, J. Dolan for the Australian Council of Trade Unions (ACTU).
A. Bukarica, A. Thomas for the Construction, Forestry, Mining and Energy Union (CFMEU) -
Mining and Energy Division.
S. Maxwell for the CFMEU - Construction Division.
R. Reed for the CFMEU - Forestry Division.
K. Harper for the Association of Professional Engineers, Scientists and Managers Australia
(APESMA).
M. Moretta for the Shop, Distributive and Allied Employees Association (SDA) - Victorian
Branch.
S. Millman, D. Rafferty for the SDA - Western Australia Branch.
B. Cagney for the SDA - South Australia, Northern Territory and Broken Hill Branch.
M. Nguyen for “Automotive, Food, Metals, Engineering, Printing and Kindred Industries
Union” known as the Australian Manufacturing Workers’ Union (AMWU).
L. Weber for the AMWU - Vehicle Division.
J. Knight for the Australian Municipal, Administrative, Clerical and Services Union (ASU).
J. Blaxland forThe Australian Workers’ Union (AWU).
V. Wiles for the Textile, Clothing and Footwear Union of Australia (TCFUA).
J. Murphy for the United Firefighters Union of Australia (UFUA).
A. McCarthy for the Australian Nursing and Midwifery Federation (ANMF).
N. Ward for Australian Chamber of Commerce and Industry (ACCI), Australian Business
Industrial (ABI), the NSW Business Chamber Ltd, Restaurant and Catering Australia
(R&CA), the Accommodation Association of Australia (AAA), Motor Inn Motels and
Accommodation Association, Master Plumbers and Mechanical Services Association of
Australia (MPMSAA), Printing Industries Association of Australia (PIAA), the Australian
Federation of Employers and Industries (AFEI), the Victorian Automotive Chamber of
Commerce (VACC), Master Builders Australia.
B. Ferguson, R. Bhatt for The Australian Industry Group (Ai Group).
31 PR559442, 19 December 2014.
[2015] FWCFB 644
21
M. Adler for the Housing Industry Association (HIA).
S. McKinnon, G. Kusuma for the National Farmers’ Federation (NFF).
G. Johnston, K. McKell for the Australian Meat Industry Council (AMIC).
P. Moss for the Chamber of Commerce and Industry of Western Australia (CCIWA).
Hearing details:
2014
Sydney
29 October.
30 October.
31 October.
Printed by authority of the Commonwealth Government Printer
Price code C, PR560445
