[2015] FWCFB 8810
The attached document replaces the document previously issued with the above code on
24 December 2015.
Amended to insert additional matter number in preamble and insert Attachment 2.
Associate to the President, Justice Ross
Dated 4 January 2016
1
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
4 yearly review of modern awards—Pastoral Award 2010
(AM2014/239 and AM2015/23)
JUSTICE ROSS, PRESIDENT
DEPUTY PRESIDENT KOVACIC
COMMISSIONER SAUNDERS
MELBOURNE, 24 DECEMBER 2015
4 yearly review of modern awards – Pastoral Award 2010 – crutching rates for rams and ram
stags – ‘learner shearers’ – coverage – annualised salaries – woolclassers formula.
1. Background
[1] Section 156 of the Fair Work Act 2009 (Cth) (the Act) provides that the Commission
must conduct a 4 yearly review of modern awards as soon as practicable after 1 January 2014
(the Review). As detailed in a Statement issued on 6 February 2014,1 the Review consists of
an Initial stage, dealing with jurisdictional issues, a Common issues stage and an Award
stage. The Pastoral Award 2010 is in Group 3 of the Award Stage. This decision deals with a
number of proposed variations to the Pastoral Award 2010 that have arisen in the context of
the Award Stage of the Review. The relevant background may be shortly stated.
[2] A Statement issued on 23 January 20152 dealt with the programming of Group 3 and 4
awards as part of the Review. Initial conferences were held on 18 November 2014 and 30
March 2015 in relation to the Group 3 awards. Prior to the conference on 30 March 2015
interested persons were provided an opportunity to identify the nature of any changes they
intend to propose during the review of Group 3 awards. The Commission subsequently
published a summary of proposed variations in relation to each of the Group 3 awards.
[3] A mention was held on 29 April 2015 to discuss scheduling issues relating to the
Pastoral Award 2010 and a Statement issued on 30 April3 set out the initial process for
dealing with various claims to vary the award.
[4] Parties were directed to file proposed draft determinations by 4 June 2015 outlining
each variation they were seeking to the award during the Review and the matter was listed for
a further mention and programming on 11 June 2015. Parties were encouraged to have
discussions among themselves with a view to reaching agreement in relation to the respective
claims and/or narrowing the issues in dispute.
[2015] FWCFB 8810
DECISION
E AUSTRALIA FairWork Commission
[2015] FWCFB 8810
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[5] After the mention on 11 June 2015, directions were issued to deal with the substantive
issues in relation to the Pastoral Award 2010. Subsequent discussions between the parties
resolved the various issues in dispute and the variations now sought are generally supported
by the National Farmers’ Federation (NFF), the Shearing Contractors Association of Australia
(the Shearing Contractors) and The Australian Workers’ Union (AWU). Before turning to
those proposed variations we will make reference to the relevant legislative context for the
Review.
2. The Legislative context
[6] The matters we propose to briefly refer to about the legislative context for the Review
are canvassed in more detail in the 4 yearly Review of Modern Awards: Preliminary
Jurisdictional Issues decision4, we adopt and apply that decision.
[7] Subsection 156(2) deals with what must be done in the Review:
‘(2) In a 4 yearly review of modern awards, the FWC:
(a) must review all modern awards; and
(b) may make:
(i) one or more determinations varying modern awards; and
(ii) one or more modern awards; and
(iii) one or more determinations revoking modern awards.
(c) must not review, or make a determination to vary, a default fund term of a modern
award.
Note 1: Special criteria apply to changing coverage of modern awards or revoking modern
awards (see sections 163 and 164).
Note 2: For reviews of default fund terms of modern awards, see Division 4A.’
[8] Subsection 156(5) provides that in a Review each modern award must be reviewed in
its own right, however, this does not prevent the Commission from reviewing two or more
modern awards at the same time.
[9] The ‘scope’ of the Review was considered in the Preliminary Jurisdictional Issues
Decision.5
[10] In the Review the Commission will proceed on the basis that prima facie the modern
award being reviewed achieved the modern awards objective at the time it was made.
Variations to modern awards should be founded on merit based arguments that address the
relevant legislative provisions, accompanied by probative evidence directed to what are said
to be the facts in support of a particular claim. The extent of the argument and material
required will depend on the circumstances.
[11] The modern awards objective (in s.134) applies to the performance or exercise of the
Commission’s ‘modern award powers’, which are defined to include the Commission’s
functions or powers under Part 2-3 of the Act. The Review function in s.156 is in Part 2-3 of
the Act and so will involve the performance or exercise of the Commission’s ‘modern award
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powers’. It follows that the modern awards objective applies to the Review. The modern
awards objective is set out in s.134(1), as follows:
134 The modern awards objective
What is the modern awards objective?
(1) The 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
(da) the need to provide additional remuneration for:
(i) employees working overtime; or
(ii) employees working unsocial, irregular or unpredictable hours; or
(iii) employees working on weekends or public holidays; or
(iv) employees working shifts; 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.
[12] Section 138 of the Act is also relevant, it emphasises the importance of the modern
awards objective, in these terms:
‘A modern award may include terms that it is permitted to include, and must include terms that
it is required to include, only to the extent necessary to achieve the modern awards objective
and (to the extent applicable) the minimum wages objective.’
[13] Section 138 provides that terms only be included in a modern award ‘to the extent
necessary to achieve the modern awards objective’. To comply with s.138 the terms included
in modern awards must be ‘necessary to achieve the modern awards objective’. What is
‘necessary’ in a particular case is a value judgment taking into account the s.134
considerations, to the extent that they are relevant having regard to the submissions and
evidence directed to those considerations. Before varying a modern award in the Review, the
Commission must be satisfied that the variation is necessary to achieve the modern awards
objective.
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[14] While the Commission must take into account the various matters in s.134(1)(a) to (h),
the relevant question is whether the variation proposed is necessary to achieve the modern
awards objective. It is, however, not necessary to make a finding that the modern award under
review has failed to satisfy at least one of the s.134(1) considerations.6
[15] There are other aspects of the statutory provisions which are relevant in the context of
the present matter. The first concerns the terms that can be or must be included in a modern
award. Section 136 is relevant in this regard, it provides:
‘136 What can be included in modern awards
Terms that may or must be included
(1) A modern award must only include terms that are permitted or required by:
(a) Subdivision B (which deals with terms that may be included in modern awards); or
(b) Subdivision C (which deals with terms that must be included in modern awards);
or
(c) section 55 (which deals with interaction between the National Employment
Standards and a modern award or enterprise agreement); or
(d) Part 2-2 (which deals with the National Employment Standards).
Note 1: Subsection 55(4) permits inclusion of terms that are ancillary or incidental to, or that
supplement, the National Employment Standards.
Note 2: Part 2-2 includes a number of provisions permitting inclusion of terms about particular
matters.
Terms that must not be included
(2) A modern award must not include terms that contravene:
(a) Subdivision D (which deals with terms that must not be included in modern
awards); or
(b) section 55 (which deals with the interaction between the National Employment
Standards and a modern award or enterprise agreement).
Note: The provisions referred to in subsection (2) limit the terms that can be included in
modern awards under the provisions referred to in subsection (1).’
[16] Section 139(1) is in Subdivision B and deals with terms that may be included in
modern awards. It provides, relevantly for present purposes, that:
‘(1) A modern award may include terms about any of the following matters:
(a) minimum wages (including wage rates for junior employees, employees with a
disability and employees to whom training arrangements apply), …
(f) annualised wage arrangements that:
(i) have regard to the patterns of work in an occupation, industry or enterprise; and
(ii) provide an alternative to the separate payment of wages and other monetary
entitlements; and
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(iii) include appropriate safeguards to ensure that individual employees are not
disadvantaged; …
(g) allowances, including for any of the following:
(i) expenses incurred in the course of employment;
(ii) responsibilities or skills that are not taken into account in rates of pay;
(iii) disabilities associated with the performance of particular tasks or work in
particular conditions or locations; …’
[17] Section 163 is also relevant to one of the proposed variations and we deal with that
provision later. We now turn to the substantive claims before us.
3. The Substantive Claims
[18] This decision deals with five substantive claims:
(i) crutching rates for rams and ram stags;
(ii) provisions relating to ‘learner shearers’;
(iii) the definition of ‘broadacre field crops’;
(iv) annualised salaries; and
(v) the method of calculating the Woolclassers allowances formula.
[19] The AWU, NFF and the Shearing Contractors are in agreement in respect of matters
(i), (iii), (iv) and (v). Australian Business Industrial and the NSW Business Chamber Ltd
(ABI) and Business SA do not oppose the variations sought in respect of these matters. There
is also a measure of agreement in respect of the AWU’s proposed variation regarding ‘learner
shearers’ (matter (ii)), but part of the variation sought is the subject of a reservation by the
various employer organisations. We will come to that matter in due course.
[20] The AWU, NFF and the Shearing Contractors tendered a statement of agreed facts in
relation to the claims in respect of the crutching rates for rams and rams stags and regarding
learner shearers7. A copy of that statement is set out at Attachment 1.
(i) Crutching rates for rams and ram stags8
[21] The AWU is seeking to amend clause 45.2(d) of the award that provides special rates
for crutching stud ewes and lambs by inserting the following additional special rate:
‘For crutching rams and ram stags – double the rates prescribed in clause 45.2(a).’
[22] The process of crutching is a limited kind of shearing, where wool is removed ‘from
the crutch area of sheep for various purposes, such as to avoid infection from the blowfly;
prior to lambing; to treat skin underneath; prior to sale or slaughter’.9 The current award
prescribes minimum rates for crutching in clause 45.2(a):
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45.2 Rates for crutching
(a) Piecework rates—if not found employee:
Per 100
$
At sheds
Per 100
$
Other than
at sheds
Full crutching, that is, shearing the inside parts of the
legs, between the legs, and around and above the
tail. In addition when required:
removing wool that has been struck by
blowfly;
lifting the bottom leg and shearing that leg
prior to turning the sheep around and above
the tail; and/or
giving up to two blows above the tail
83.24 71.76
All other crutching 66.02 57.41
For wigging or ringing 31.57 31.57
For either wigging or ringing in addition to crutching 8.61 8.61
For wigging and ringing 51.67 51.67
For wigging and ringing in addition to crutching—
crutching rate plus
14.35 14.35
For cleaning the belly of any ewe above the teats (no
more than two blows of the machine
or shears)—crutching rates plus
7.18 7.18
[23] Two other provisions of the current award are also relevant:
(i) clause 45.2(d) provides that shearers are paid one and a quarter of the rates
prescribed in clause 45.1(a) for crutching stud ewes and their lambs; and
(ii) clause 45.1(b) provides that in the context of the shearer’s formula, the rate to be
paid for shearing rams (other than special stud rams) and ram stags is double the rate
for flock sheep.
[24] At present the Pastoral Award 2010 does not specify a particular rate for crutching
rams and ram stags, such work falls into the category of ‘All other crutching’. The AWU is
proposing the insertion of an additional provision to the effect that double the minimum rates
must be paid for crutching rams and ram stags. The NFF and the Shearing Contractors support
the proposed variation. ABI does not oppose a variation in the form sought by the AWU.10
[25] Two broad lines of argument are advanced in support of the variation proposed:
(i) that the provision sought had been an award provision for many years but was
‘unintentionally omitted’ from the Pastoral Award 2010 in the Part 10A award
modernisation process; and
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(ii) the provision of double rates for crutching rams and ram stags is appropriate
having regard to the nature of the work, the level of skill and responsibility and the
conditions under which the work is done.
[26] The claim is supported by the uncontested evidence of four witnesses.11 It is
convenient to first deal with the relevant award history, before turning to the work value
justification for the claim and the evidence.
[27] In 1907 O’Connor J, the President of the then Commonwealth Court of Conciliation
and Arbitration, made an award in settlement of an industrial dispute in the pastoral industry
dealing with, among other things, the rates of pay for shearers. The resultant award included
the following term:
‘For shearing rams over six months old the rate shall in each State be double the rate for
shearing ordinary flock sheep in that State’.12
[28] The 1907 award did not deal with crutching, but in 1911 Higgins J made an award
between substantially the same parties covering, among other things, shearing and crutching
operations. In relation to crutching his Honour said:
‘There is a claim for minimum rates for crutching sheep. The practice of crutching has of late
become ‘almost universal’ (according to Dalgety’s Wool Review), because of the spread of
the blow fly pest. There was no claim for crutching rates in 1907, and no award on the
subject; and, as a result of the want of regulation, the rates follow no definite principle, and the
returns induce discontent...
Now, crutching is mostly done by shearers. Crutching is, in fact, a limited shearing; but at
least three or four times as many sheep can be crutched as can be shorn at the same time, and
the rates should be correspondingly less. On the other hand, the job of crutching the sheep on
a station takes a much shorter time than the shearing, and does not give steady earnings for
several weeks to the shearer; the time lost in travelling bears a larger proportion to the
crutcher’s earnings; and some allowances have to be made on these accounts. The claim for
crutching is 6s per 100 with rations, or 7s per 100 without rations; but these figures are
obviously pointed to fly crutching. As far as I can make out from the very conflicting figures
put before me, a rate of 5s per 100 with rations, or 6s per 100 without rations, could be fairly
expected to produce for the average crutcher a weekly net wage of ₤3, including in the ₤3 the
10s for relief of the home. I do not feel justified in prescribing any higher rate as a minimum,
but of course it is open to the parties to agree to a higher rate. 6s per 100, without rations, is
the usual rate at present of the Federal Sheep Shearing Company, and throughout New South
Wales the most general rates are the rates which I prescribe – 5s per 100 with rations, and 6s
per 100 without rations. I also provide a minimum for time payment. It is important that the
employers should have an option to pay the men by time, as in some cases there are reasons
for crutching sheep with exceptional care. I fix the time rate at 11s per day with rations.’13
[29] It is to be observed that at that time there was no claim for a higher rate for crutching
rams and stag rams, though as his Honour recognised in prescribing a minimum for time
payment, ‘in some cases there are reasons for crutching sheep with exceptional care’.
[30] In 1936 Delthridge CJ varied the Pastoral Award in relation to, among other things,
the piece rates for crutching. The variation provided for double the flock rates for rams and
stag rams, and 25 per cent above the flock rates for stud ewes and their lambs. The variation
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essentially reflected the agreed position as between the parties, as his Honour noted in his
judgment.
‘Employers ask that clause 6 be varied as to add piece-work rates for rams, stud ewes and their
lambs. They suggest double flock rates for rams and 25 per cent, about flock rates for the stud
ewes and their lambs. The union asks for a similar variation as to rams and ram stags claiming
double rates. The clause will be varied as follows:
Order that clause to be varied thus –
Insert as items (8) and (9) in sub-clauses (1) and (2) the following:-
(8) For rams and ram stags double the amounts in the foregoing items (1) to (6)
inclusive.
(9) For stud ewes and their lambs one and a quarter of the amount in the appropriate
preceding item or items in this sub-clause.’14
[31] In 1965 Commissioner Donovan made a new award, in settlement of various disputes,
to be known as the Pastoral Industry Award 1965 (the 1965 Award). The new award
incorporated various increases in minimum wages, piece rates and allowances, and continued
to provide that the rate for crutching rams and ram stags be double the rate prescribed for
flock sheep.15
[32] On 16 June 1987 Commissioner Merriman made an award16- the Pastoral Industry
Award 1986 (the 1986 Award) – which superceded the 1956 Award. The double rate for
crutching rams and stag rams remained a term of the 1986 Award (at clause 15(a)(viii)).
[33] The definition of crutching and the piece rate applicable to lighter forms of crutching
(eg the ‘New England crutch’) have been the subject of a number of arbitral decisions over
the years17, but the double rate for crutching rams and stag rams remained unaltered until
1996.
[34] It appears that the provision of double rates for crutching rams and ram stags was
removed from the 1986 Award by an order of Commissioner Oldmeadow dated 24 June
1996.18 The order sought to vary the 1986 Award to give effect to the October 1995 Third
Safety Net Adjustment and Section 150A Review decision19. Prior to the order clause
15(a)(viii) of the 1986 Award provided:
‘15 Rates for Crutching
The minimum rates for crutching at sheds shall be:
(a) Piecework rates – if ‘not found’ ...
(viii)For rams and ram stags – double the rates prescribed in paragraphs (i) to (vi) ...
(x) For the purpose of this clause ‘ram stags’ and ‘stud ewes’ shall have the
meanings given to them respectively in subclause 14(b) of this Award.’
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[35] Commissioner Oldmeadow’s order deleted subclause 15(a) in its entirety and replaced
it with a provision which omitted subclauses 15(a)(viii) and (x). It appears that the omission
of these provisions was inadvertent, there is certainly nothing in the relevant decision to
suggest that it was deliberate.20
[36] On 30 June 1998, Commissioner Merriman issued the Allowable Matters decision in
relation to the Pastoral Industry Award 1998.21 Double rates for crutching rams and ram stags
were not included in the 1998 Award, presumably because the provision had been removed
from the predecessor award (the 1986 Award) in 1996. The transition to pre-reform awards
and Australian Pay and Classification Scales from 27 March 2006 under the Work Choices
legislative regime meant that the terms of the 1998 Award were effectively preserved. Award
modernisation saw the terms of the pre-reform award dealing with rates for crutching adopted
in the Pastoral Award 2010. There is no specific mention of crutching rates for rams and ram
stags in the Statement22 accompanying the release of the exposure draft for the Pastoral
Award 2010 or the subsequent Decision23 to make the Pastoral Award 2010.
[37] It is apparent that until the making of the 1998 Pastoral Industry Award double rates
for crutching rams and ram stags had been a long standing award provision. It is also clear
from the uncontested evidence of Messrs Hanlon24; McCalman25; O’Connor26 and O’Hare27
that the current practice in the pastoral industry is that double rates are usually paid for
crutching rams and ram stags.
[38] We now turn to the relevant provisions of the Act. As we have mentioned, s.134 (the
modern awards objective) is applicable – that is, the Commission must be satisfied that the
variation is necessary to ensure that the Pastoral Award 2010, together with the National
Employment Standards, provide ‘a fair and relevant minimum safety net of terms and
conditions’, taking into account the matters in s.134(1)(a) to (h), insofar as they are relevant.
[39] Further, when setting, varying or revoking a modern award minimum wages the
minimum wages objective is also relevant. The minimum wages objective is set out in s.284,
as follows:
‘284 The minimum wages objective
What is the minimum wages objective?
(1) FWC must establish and maintain a safety net of fair minimum wages, taking into account:
(a) the performance and competitiveness of the national economy, including
productivity, business competitiveness and viability, inflation and employment
growth; and
(b) promoting social inclusion through increased workforce participation; and
(c) relative living standards and the needs of the low paid; and
(d) the principle of equal remuneration for work of equal or comparable value; and
(e) providing a comprehensive range of fair minimum wages to junior employees,
employees to whom training arrangements apply and employees with a disability.
This is the minimum wages objective.
When does the minimum wages objective apply?
(2) The minimum wages objective applies to the performance or exercise of:
(a) FWC’s functions or powers under this Part; and
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(b) FWC’s functions or powers under Part 2-3, so far as they relate to setting, varying
or revoking 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 modern awards objective also applies (see section 134).
Meaning of modern award minimum wages
(3) Modern award minimum wages are the rates of minimum wages in modern awards,
including:
(a) wage rates for junior employees, employees to whom training arrangements apply
and employees with a disability; and
(b) casual loadings; and
(c) piece rates.
Meaning of setting and varying modern award minimum wages
(4) Setting modern award minimum wages is the initial setting of one or more new modern
award minimum wages in a modern award, either in the award as originally made or by a later
variation of the award. Varying modern award minimum wages is varying the current rate of
one or more modern award minimum wages.’
[40] The provisions which specifically apply to the Review are in ss 156(3) and (4), which
provide as follows:
‘(3) In a 4 yearly review of modern awards, the FWC may make a determination varying
modern award minimum wages only if the FWC is satisfied that the variation of modern
award minimum wages is justified by work value reasons.
(4) Work value reasons are reasons justifying the amount that employees should be paid for
doing a particular kind of work, being reasons related to any of the following:
(a) the nature of the work;
(b) the level of skill or responsibility involved in doing the work;
(c) the conditions under which the work is done.’
[41] The AWU submits that subsections 156(3) and (4) do not apply to its proposal to vary
the Pastoral Award 2010 to provide double the minimum rate for crutching rams and ram
stags. It is submitted that ss.156(3) and (4) only apply to determinations ‘varying modern
award minimum wages’ and that as the AWU’s claim seeks to set a minimum wage for
crutching rams and ram stags, ss.156(3) and (4) have no application. It is on that basis that the
AWU contends that the relevant statutory provision is the minimum wages objective in s.284.
[42] In support of its submission the AWU points to the difference in language between
s.156(3) and s.284. Subsection 156(3) is directed at determinations made in the context of a 4
yearly review ‘varying modern award minimum wages’. The minimum wages objective
applies to the Commission’s functions or powers in the Review ‘so far as they relate to
setting, varying or revoking modern award minimum wages’ (s.284(2)(b)).
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[43] It is plain from s.284(4) that the legislature intended there to be a distinction between
setting and varying modern award minimum wages, as distinct meanings have been given to
these terms. It follows from the difference in language between s.156(3), which only refers to
‘varying’ minimum wages, and s.284, which refers to ‘setting’, ‘varying’ or ‘revoking’
minimum wages, that there is some force in the AWU’s contention that s.156(3) does not
apply to the setting or revoking of modern award minimum wages in the Review. But, for the
reasons which follow, it is unnecessary for us to determine that issue in the present
proceedings.
[44] Properly characterised the AWU’s proposal is not a claim to set a new modern award
minimum wage for the crutching of rams and ram stags. Subsection 284(4) defines the setting
of modern award minimum wages in terms of the ‘initial setting of one or more new modern
minimum wages’. This is to be contrasted with the varying of modern award minimum wages
which is defined as ‘varying the current rate of one or more modern award minimum wages’.
[45] The Pastoral Award 2010 already contains a minimum rate for the crutching of rams
and ram stags, such work falls within the category of ‘All other crutching’. The AWU claim
seeks to increase the rate currently prescribed for undertaking that work and on that basis is
more aptly described as an application seeking a determination ‘varying modern award
minimum wages’. Accordingly, contrary to the AWU’s submission, ss.156(3) and (4) are
applicable to the claim to increase the minimum rate for crutching rams and ram stags.
Further, as such a variation involves the Commission’s functions or powers under Part 2-3,
the minimum wages objective is also applicable (s.284(2)).
[46] For completeness we would observe that even if s.156(3) did not apply to the current
claim that would not necessarily mean that work value considerations were irrelevant to our
consideration of the claim. It seems to us that such matters may well be relevant to the
establishment of ‘a safety net of fair minimum wages’, as required by the minimum wages
objective (s.284(1)). But it is unnecessary for us to express a concluded view on that issue
and we do not propose to do so.
[47] Subsection 156(3) confers a discretion on the Commission to vary modern award
minimum wages in a 4 yearly review of modern awards. The discretion is only enlivened if
the Commission is satisfied that the variation is ‘justified by work value reasons’.
[48] As s.156(4) makes clear, work value reasons are ‘reasons justifying the amount that
employees should be paid or doing a particular kind of work’. Work value reasons are reasons
related to any of the following:
‘(a) the nature of the work;
(b) the level of skill or responsibility involved in doing the work;
(c) the conditions under which the work is done.’
[49] The factors identified in s.156(4) are consistent with the considerations which have
historically informed work value assessments by the Commission and predecessor tribunals.
Such assessments call for the exercise of broad judgment.28 As Munro J observed in
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v HPM
Industries29:
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‘…experience of work value cases suggests that work value equivalence is a relative measure,
sometimes dependent upon an exercise of judgment. A history of such cases would disclose
that a number of evaluation techniques have been applied for various purposes and with
various outcomes from time to time.’
[50] It is common ground between the NFF, AWU and the Shearing Contractors that the
variation of the Pastoral Award 2010 to provide for double rates for the crutching of rams and
ram stags ‘is appropriate having regard to the nature of the work, the level of skill and
responsibility and the conditions under which the work is done’.30 The common position of
the parties is supported by the uncontested evidence before us. The evidence supports the
following findings:
rams and stag rams are generally better cared for, larger in size and have more
wool, than flock sheep;31
it takes three to four times longer to crutch rams and stag rams than it takes to
crutch flock sheep;32
rams and stag rams take longer to crutch than flock sheep because of their size and
the care that needs to be taken to ensure that they are not injured.33
[51] We are satisfied that the variation proposed is justified by work value reasons. We
now turn to the minimum wages objective.
[52] The minimum wages objective requires the Commission to ‘establish and maintain a
safety net of fair minimum wages’, taking into account the matters in s.284(1)(a) to (e),
insofar as they are relevant. The considerations in s.284(1)(a) and (c) are relevant for present
purposes.
[53] The impact of an increase in modern award minimum wages on the ‘performance and
competitiveness of the national economy’ (s.284(1)(a)) will usually be relevant to the
Commission’s consideration of any such claim, though the weight attributed to this matter
will depend on the circumstances. In the context of this case it is common ground that the
evidence supports a finding that despite the absence of an award provision the prevailing
practice is to pay double rates for crutching rams and ram stags. It follows that the economic
impact of making the variation proposed will be very limited. In these circumstances, while
we have taken into account the matter in s.284(1)(a), we attach little weight to this
consideration.
[54] Section 284(1)(c) requires that we take into account ‘relative living standards and the
needs of the low paid’. In successive Annual Wage Review decisions the Expert Panel has
accepted that award reliant employees who receive a rate of pay (as a full time equivalent)
which would place them below two thirds of median adult ordinary time earnings, are ‘low
paid’ within the meaning of s.284(1)(c) (and s.134(1)(a)). In the Annual Wage Review
2014-15 decision the Expert Panel provided a table which estimated two-thirds of median
weekly earnings based on data from the two main ABS surveys of the distribution of
earnings: the Employee Earnings, Benefits and Trade Union Membership (EEBTUM); and
the Employee Earnings and Hours survey (EEH).34
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[55] The lack of contemporary data on the earnings of shearers makes it difficult to
determine whether they are to be regarded as ‘low paid’ within the meaning of s.284(1)(c)
(and s.134(1)(a)). The most recent data available on the earnings of full-time employee
shearers appears to be that provided in the ABS, Australian Census of Population and
Housing (Census 2011).35 In the 2011 Census, 1,520 persons identified as being full-time
employee shearers, with a further 743 as part-time employee shearers, 90 as employees who
were away from work and 78 as employees whose hours of work were not stated.36 The
estimated total weekly average personal income of full-time shearers was $945.72, in 2011.37
[56] The EEBTUM shows that two-thirds of median weekly earnings in 2011 was
$733.33.38 The proportion of full-time employee shearers whose total weekly personal
income fell below the EEBTUM 2011 two-thirds median weekly earnings threshold of
$733.33 was 17.2 per cent, while a further 21.2 per cent of full-time employees had incomes
of $600–$799.39 It is not known what proportion of these employees earned below two-third
median weekly earnings.
[57] The proportion of shearers below the two-thirds threshold (17.2 per cent) may
underestimate the number of full-time employee shearers who are considered low-paid based
on the two-thirds median of weekly earnings. The total personal income measure from the
2011 Census captures the total of all wages/salaries, government benefits, pensions,
allowances and other income (such as interest) that the persons usually receives. The
EEBTUM income measure is based solely on an employee’s wages/salary.
[58] In addition to the data limitations there is little presently before us about the
contemporary working patterns and arrangements applicable to shearers. As an occupation
shearing has historically had a number of distinct features. As Higgins J observed in 1911:
‘These shearers are wanderers. To get a series of sheds, they usually go to northern sheds
first, where the seasons come earlier, and they work southwards towards their homes. It does
not pay them usually to have less than three sheds, and to get these in succession they have to
follow the course of the sun, from latitude to latitude ...
The first impression given by the large tallies and the large gross earnings of shearers is
undoubtedly that the men are very handsomely paid, and employers are apt, very naturally, to
fix their minds on that which concerns themselves most – the big amount of money which they
have to disburse – rather than on the net returns to the shearer. But the shearer is not a man in
the next street to the shed awaiting employment. He has usually to be drawn from
considerable distances, and has to be compensated, not only for his time at the shed, but for his
time and expenses on the road, and not only for his time of actual work at the shed, but for the
time he has to wait at the shed, prevented from working because of wet weather, stoppage of
machinery etc.’40
[59] While there have clearly been changes in shearing operations since 1911 – notably in
technological advances and work organisation – it remains a seasonal and, to some extent,
itinerant occupation.
[60] The submissions before us proceeded on the assumption that s.284(1)(c) and
(s.134(1)(a)) were relevant and on that basis we are prepared to accept, for present purposes,
that at least a significant proportion of shearers are ‘low paid’. The matter may be the subject
of further debate in any subsequent proceedings. For present purposes it is sufficient to note
that the variation proposed will increase the wages required to be paid to shearers who
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undertake this work and who are presently paid the ‘All other crutching’ rate specified in the
award. As such the variation proposed takes account of the ‘needs of the low paid’.
[61] We turn briefly to the other s.284(1) considerations. We are not persuaded that the
matters in s.284(1)(b), (d) and (e) are relevant to this particular issue.
[62] We are satisfied that making the variation proposed will ‘establish…a safety net of fair
minimum wages’, as required by the minimum wages objective.
[63] We now turn to the modern awards objective.
[64] We note first that there is a degree of overlap between the considerations set out in
ss.134 and 284. The following considerations in each provision are expressed in the same
terms:
relative living standards and the needs of the low paid (s.134(1)(a) and
s.284(1)(c));
the need to promote social inclusions through increased workforce participation
(s.134(1)(c) and s.284(1)(b)); and
the principle of equal remuneration for work of equal or comparable value
(s.134(1)(e) and s.284(1)(d)).
[65] Sections 134 and 284 each require the Commission to take into account a range of
economic considerations, though they are differently expressed, for instance:
employment growth and inflation are mentioned as separate considerations under
the modern awards objective (s.134(1)(h)), but in the minimum wage objective
these factors appear subsidiary to the performance and competitiveness of the
national economy (s.284(1)(a)); and
the modern awards objective requires the Commission to take into account ‘the
likely impact of any exercise of modern award powers on … the sustainability,
performance and competitiveness of the national economy’ (s.134(1)(h)), whereas
the ‘sustainability’ of the national economy is not mentioned in the minimum
wages objective.
[66] In the Annual Wage Review 2014–15 decision41 the Expert Panel considered the effect
of these differences in expression and concluded as follows:
‘Despite these textual differences, we accept the thrust of ACCI’s submission, that the
underlying intention of the various economic considerations referred to in ss.284 and 134 is
that the Panel take into account the effect of its decisions on national economic prosperity and
in so doing give particular emphasis to the economic indicators specifically mentioned in the
relevant statutory provisions. Such an approach is supported by the object of the Act.’42
[67] While the above observation was made in the context of an Annual Wage Review it is
also apposite to the matter before us. For the reasons given, the variation of the Pastoral
[2015] FWCFB 8810
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Award 2010 to provide for double rates for crutching rams and ram stags will have very
limited impact and in such circumstances the various economic considerations (s.134(1)(f)
and (h)) do not weigh against making the variation proposed.
[68] We turn briefly to the other s.134(1) considerations. As we have mentioned in the
context of our consideration of the minimum wages objective, we have taken into account the
‘needs of the low paid’ (s.134(1)(a)).
[69] The ‘need to encourage collective bargaining’ (s.134(1)(b)) is a neutral consideration
in relation to this claim. No party contended otherwise. No party suggested that the variation
of the award to reflect what largely occurs in practice would have any impact on collective
bargaining.
[70] We are not persuaded that the matters in s.134(1)(c), (d), (da), (e) and (g) are relevant
to this particular claim.
[71] We are satisfied that making the variation proposed is necessary to ensure that the
Pastoral Award 2010, together with the National Employment Standards, provides ‘a fair and
relevant minimum safety net of terms and conditions’, in accordance with s.134 of the Act.
[72] For the reasons given we are satisfied that the variation proposed is justified by work
value reasons; is necessary to meet the modern awards objective; and will ‘establish…a safety
net of fair minimum wages’ as required by the minimum wages objective. We will grant the
claim sought.
(ii) Learner shearers
[73] The AWU seeks to replace the current term dealing with ‘learner shearers’. The
current award provision is:
44.4 Shearers and learner shearers
(a) Shearers will be engaged to shear and/or crutch sheep.
(b)A learner Shearer will be engaged as such on production of proof that they qualify
for such status.
[74] The AWU seeks to replace the above provision with the following:
‘44.4 Shearers and learner shearers
Shearers
Shearers will be engaged to shear and/or crutch sheep.
Learner shearers
(i) A learner shall mean a shearer or intending shearer who has not yet shorn
five thousand sheep.
(ii) Of every four stands used at shearing operations and in shearing operations
where four stands only are used, one at least shall be given to or reserved for
a learner who is available at the start of the shed. This does not require a
stand to be left vacant if a learner is not available. Provided that A learner
who starts in a shed as a learner may continue to be regarded as a learner
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under this clause for a run of sheds, although he or she becomes a shearer,
not a learner, before the run of sheds is completed.
(iii) It shall be obligatory upon such learner to produce to his/her employer or
intended employer a certificate, log book or equivalent in the following form
showing the number of sheep he or she has shorn:
LEARNER’S CERTIFICATE TO BE PRESENTED AT EACH SHEARING
Issued to ……………………………..
Home address ………………………………
Date of issue of certificate ………………………………….
Age ……………………………………..
Date Station Total
Sheep
Shorn
Average
tally per
day (whole
days)
Signature
of Owner or
Manager or
Shed
Overseer
Signature
of Learner
Total
shorn
prior to
issue of
this
certificate
(iv) The earnings of a learner shearer employed in a shed of four or more stands
shall not be less than he or she would have received had he or she been
employed for the same period as an adult shed hand, plus a combs and cutters
allowance of $19.99 per week. Provided that this guaranteed payment shall
only apply to one specified learner where four stands only are used and to
one specified learner in every four stands used where more than four stands
are used at the shearing. The agreement of such specified learner shall be
endorsed “learner” at the time it is signed.’
[75] The underlined words are the subject of some contention between the various parties
[76] The NFF submit that there is merit in helping users to understand and apply the
‘learner shearer’ provisions, including through a definition of ‘learner’ and a mechanism to
record the number of sheep shorn for the purpose of applying that definition.
[77] The NFF’s position is that the agreement between the parties43 is reflected in the draft
determination proposed by the AWU. The NFF agrees to the form of words proposed
provided the Commission is satisfied that the ‘one in four term’ is a permitted matter. If the
Commission is not satisfied on that point then the underlined sections set out above should be
deleted to address that consequence.44
[78] The NFF’s principal concern is that some aspects of the proposed learner shearer term
may not be about matters that can be included in modern awards under s.136 of the Act. In
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17
particular, the first sentence of proposed clause 44.4(ii) requires a fixed minimum allocation
of stands for learner shearers. It provides as follows:
‘Of every four stands used at shearing operations and in shearing operations where four stands
only are used, one at least shall be given to or reserved for a learner who is available at the
start of the shed.’ (the ‘one in four’ term)
[79] The NFF contends that, properly characterised, the ‘one in four’ term is about limiting
certain work areas to a particular use. This is said to be different to existing clause 49.7,
which deals with the allotment of stands by outlining how stands will be allocated in practice
to avoid disputes, without restricting their use during a shearing. So characterised it is
submitted that the ‘one in four’ term is not about a matter that must be included in modern
awards (ss.143 – 149D) and nor is it about a matter that may be included in modern awards
(ss.139 – 141). Further, it is submitted that the ‘one in four’ term is not incidental to any of
the subject matters that must or may be included in a modern award and nor is it essential for
the purpose of making the term operate in a practical way (s.142); further, the term is more
than a machinery term, in that it deals with substantive workplace conditions.
[80] The NFF also observes that the proposed learner shearer terms can operate practically
and effectively without any limitation on the use of stands, by defining learner shearer, setting
their minimum rate of pay and providing for records to be kept so that whether a person is a
‘learner shearer’ can be readily ascertained.
[81] We note that ABI and Business SA express similar concerns about the ‘one in four’
term.
[82] The Shearing Contractors submit that the inclusion of the ‘one in four term’ would be
contrary to the following modern award objectives:
(a) the need to promote flexible workplace practices and the efficient and productive
performance of work (s.134(1)(d));
(b) the likely impact of any exercise of modern award powers on business, including on
productivity, employment costs and the regulatory burden (s.134(1)(f); and
(c) the likely impact of any exercise of modern award powers on employment growth,
inflation and the sustainability, performance and competitiveness of the national
economy (s.134(1)(h)).
[83] The Shearing Contractors also contend, in the alternative, that the proposed wording
for the ‘one in four’ term be amended, as follows:
(a) delete the words ‘or reserved for’ in subclause 44.4(ii), on the basis that those words
contradict the concept of engaging a learner ‘who is available at the start of the shed’;
and
(b) insert the words ‘suitable and’ before the word ‘available’ in subclause 44.4(ii), in
order to take into account that not every person who presents themselves to an
employer as a ‘learner shearer’ may be suitable for the position.
[2015] FWCFB 8810
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[84] The AWU contends that the ‘one in four’ term is a term which may be included in a
modern award on the basis that it is term about ‘career structures’ (one of the matters set out
in s.139(1)) or, in the alternative, it is essential for the purpose of making other terms about
learner shearers operate in a practical way, as permitted by s.142.
[85] We propose to deal first with the relevant award history before turning to the proposed
term and the issue in contention.
[86] An award provision reserving a certain number of pens for ‘learners’ was first
introduced in 1917. In Australian Workers Union v Pastoralists’ Federal Council of
Australia and others45, Higgins J determined as follows:
‘Learners
In order to keep up the supply of competent shearers, both sides desire that
compulsory provision should be made for the employment of a certain proportion of
‘learners’ – lads who have not shorn at three sheds. The clause which I have framed,
for one pen in every ten to be given to or reserved for a learner, is consented by both
sides.’46
[87] As we mentioned earlier, in 1965 Commissioner Donovan made a new award – the
1965 Award – clause 22 of which dealt with the employment of learners, in the following
terms:
22- EMPLOYMENT OF LEARNERS
(a) Herein “learner” means a shearer or intending shearer who has not yet shorn five thousand
sheep.
(b) Of every five stands used at shearing operations and in shearing operations where four
stands only are used, one at least shall be given to or reserved for a learner. Provided that a
learner who starts in a shed as a learner may continue to be regarded as a learner under this
clause for a run of sheds, although he becomes a shearer, not a learner before the run of sheds
is completed.
(c) It shall be obligatory upon such learner to produce to his employer or intended employer,
or any authorised representative of any of the parties to this award, if and when required, a
certificate in the following form, showing the number of sheep he has shorn:-
LEARNERS’ CERTIFICATE.
(To be Presented at Each Shearing)
Issued to ....................................................................................
Home address ...........................................................................
Date of issue of certificate ..................................Age .............
Date Station Total sheep
shorn
Average
tally per
day (whole
days)
Signature
of owner or
manager or
shed
overseer
Signature
of learner
Total sheep
shorn prior
to issue of
this
certificate
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(d) The earnings of a learner employed in a shed of four or more stands shall be not less than
the earnings to which he would have been entitled had he been employed for the same period
as an adult shed hand, plus an amount of 13s. per week for combs and cutters.
Provided that the foregoing obligation upon the employer to make such guaranteed payment
shall only apply to one specified learner where four stands only are used and to one specified
learner in every five stands used where five or more stands are used at the shearing. The
agreement of such specified learner shall at the time it is signed be endorsed “learner”.
(e) The provisions of this clause shall not apply to stud shearings.47
[88] The 1965 Award was varied shortly after it was made to change the proportion of
stands reserved for learners. Clause 22(b) was varied to provide:
‘Of every four stands used at shearing operations and in shearing operations where four stands
only are used, one at least shall be given to or reserved for a learner.’
[89] In the decision which made this variation Commissioner Donovan said,:
‘After considering the submissions of the parties on this matter I have decided to vary the
current award so that it will now provide that of every four stands used at shearing operations
one at least shall be given to a learner.’48
[90] The 1965 Award was later replaced by the 1986 Award. Clause 22 of the 1965 Award
– the ‘Employment of Learners’ remained, largely unaltered, as clause 22 of the 1986 Award.
[91] Clause 22 was removed from the Pastoral Award when the award was modernised in
1998. The removal of clause 22 at that time was presumably on the basis that it dealt with a
non allowable matter, but it is unclear from the relevant decision. The decision in question
dealt with an application by the NFF to vary the 1986 Award pursuant to Item 49 of Part 2 of
Schedule 5 of the Workplace Relations and Other Legislation Act 1996. The application was
consented to by the employer and union parties to the award. In a short decision dealing with
the application Commissioner Merriman states:
‘In respect of this application I am satisfied as to the following matters:
1. The applicant has made reasonable attempts to reach agreement with the other parties to
the award about how the award should be varied and about the treatment of matters that
are not allowable matters.
2. Once varied in accordance with the application before me the award will deal only with
allowable award matters.
3. The application is consistent with the criteria in sub item 7 and 8 of Item 49 of part 2 of
Schedule 5 of the WROLA Act 1996.
4. The application is consistent with the Award Simplication Decision principles [Print
P7500].’
[92] While it may be inferred from the above extract that the award was varied to remove
non allowable matters, there is no specific reference to clause 22.
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[93] In relation to the issue in contention, it is common ground that the ‘one in four’ term is
not a provision which must be included in a modern award. Hence the issue is whether it is a
term which may be included, pursuant to s.139, or whether it is a term permitted by s.142.
[94] The AWU contends that the term is about ‘career structures’ as expressed in
s.139(1)(a), which states:
‘(1) A modern award may include terms about any of the following matters:
(a) minimum wages (including wage rates for junior employees, employees with a disability
and employees to whom training arrangements apply), and:
(i) skill-based classifications and career structures; and
(ii) incentive-based payments, piece rates and bonuses;...’
[95] The Explanatory Memorandum to what became s.139(1)(a) states:
‘Minimum wages
530. Paragraph 139(1)(a) provides for minimum wages to be included in modern awards.
This allows modern awards to include terms about minimum wages, including wage rates for
junior employees, employees with a disability and employees to whom training arrangements
apply. It would also allow modern awards to include terms about skill based classifications
and career structures, incentives based payments, piece rates and bonuses.’
[96] As to s.142, it provides:
142 Incidental and machinery terms
Incidental terms
(1) A modern award may include terms that are:
(a) incidental to a term that is permitted or required to be in the modern award; and
(b) essential for the purpose of making a particular term operate in a practical way.
Machinery terms
(2) A modern award may include machinery terms, including formal matters (such as a title,
date or table of contents).
[97] Hence, to be permitted by s.142 we must be satisfied that the ‘one in four’ term is
incidental to a term permitted by s.139(1) and is essential for the purpose of making a
particular term operate in a practical way.
[98] During the course of the proceedings on 9 December 2015 we indicated that we would
be seeking further submissions in relation to this aspect of the learner shearer claim49 and that
is the course we propose to adopt. Directions will be issued shortly setting out the timetable
for such submissions and providing interested parties with an opportunity to reply to any
submissions filed. We will finalise our consideration of this claim after taking into account
any further submissions filed.
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(iii) Definition of ‘broadacre field crops’
[99] Clause 4 of the Pastoral Award 2010 deals with the coverage of the award. Subclause
4.1 states:
‘This award applies to employers through Australia in the pastoral industry and their
employees in the classifications set out in this award to the exclusion of any other modern
award.’ (emphasis added)
[100] The ‘pastoral industry’ is defined in subclause 4.2, relevantly for present purposes, as
follows:
‘Pastoral industry means all employers and employees who are engaged in or in connection
with:
…(e) the sowing, raising or harvesting of broadacre field crops and other crops grown as part
of a broadacre mixed farming enterprise; …’ (emphasis added)
[101] Clause 3.1 defines ‘broadacre field crops’ in the following terms:
‘broadacre field crops means canola, wheat, hay, barley, oats, rice, triticale, maize, millet,
chickpeas, cotton, faba beans, lucerne, lupins, pigeon peas, sorghum, soybean, sunflower, and
other crops grown as part of a broadacre mixed farming enterprise.’
[102] The definition of ‘broadacre field crops’ also appears in the definition of ‘broadacre
mixed farming enterprise’:
broadacre mixed farming enterprise:
means a farming enterprise consisting of the growing of broadacre field crops as defined;
includes the rearing, management, and grazing of livestock;
means a farming enterprise which combines both; or
means a farming enterprise which in addition to any of the above grows other crops, for the
purposes of crop rotation or the rearing, management, and grazing of livestock as part of a
mixed farming enterprise.
[103] The NFF seeks to vary the definition of ‘broadacre field crops’ by replacing the
current definition with the following text:
broadacre field crops means grains, seeds, grasses, silage, legumes, fibre, flowers, and other
crops grown as part of a broadacre mixed farming enterprise.
[104] To make the change easier to understand, it is also proposed that the following table be
included in any annotated version of the Award, once made.
Examples of crops Descriptor
canola, wheat, barley, oats, rice, triticale, maize, millet Grains
canola seed, sunflower seed Seeds
hay, sorghum Grasses
mixed grasses and grains Silage
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Examples of crops Descriptor
hay, soybean, pigeon peas, lupins, lucerne, faba beans, chickpeas Legumes
cotton Fibre
sunflowers Flowers
[105] The current definition seeks to define ‘broadacre field crops’ by reference to particular
crops – such as canola and wheat – rather than using more generic descriptions such as
‘grains’ and ‘legumes’. The essence of the NFF’s submission is that the current definition is
inflexible and does not reflect current farming practice. We agree.
[106] The production of broadacre field crops has increased substantially over the past 20
years. A December 2010 report by the Reserve Bank of Australia on ‘Trends in the Farm
Sector’ concluded:
‘The composition of farm production has shifted somewhat towards cropping over the past
two decades, with crops now accounting for over half of farm output. Moreover, there have
been considerable changes within the cropping and livestock sub industries in response to
changes in relative prices, changing preferences and technological advances. In particular, the
cropping mix has shifted away from grains in favour of other crops...’50
[107] The NFF submits that these developments support the need for flexibility in the
provisions of the Pastoral Award 2010 which seeks to define these activities.
[108] The proposed variation is supported by the uncontested evidence of Mr Charlie
Thomas.51 According to Mr Thomas, ‘new and emerging crops are a feature of the Australian
pastoral industry’.52 Two examples illustrate this point.
[109] The first is quinoa, a cereal that has recently become fashionable in the Australian
consumer market as a ‘super food’. The first Australian commercial quinoa crop was grown
in 2007 in Tasmania and seed trials of quinoa commenced in WA in 2013, as part of a Rural
Industries Research and Development Corporation (RIRDC) funded project. An RIRDC
Report of February 201553 concluded that a quinoa industry in Australia was ‘potentially
viable’:
‘Presently there is strong demand for the grain and provided suitable varieties and Australian
agronomic practices can be developed, a niche industry should be possible.’54
[110] In terms of the potential economic value of providing quinoa as a diversification
option for farmers, the RIRDC concluded:
‘Significant – quinoa grows in marginal cropping areas and does not require good quality
soils.
Quinoa is an annual that can be incorporated into existing crop rotations and used as a
diversification option.’55
[111] The second example – alkaloid poppies – demonstrates how a new crop can expand
over time. Poppies are grown commercially under licence for pharmaceutical production
(primarily to produce morphine and related products) and cultivation is subject to a range of
regulatory requirements.
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[112] In the mid 1970’s Tasmanian Alkaloids Pty Ltd (later a subsidiary of Johnson &
Johnson), contracted farmers to grow poppies in Tasmania and built a processing factory in
northern Tasmania.
[113] There are now three poppy processors in Tasmania and over 800 growers with a total
of 30,000 hectares of poppies under cultivation. The industry employs about 1000 people and
grosses in excess of $100 million per annum. Tasmania is considered to be the most efficient
(lawful) producer of poppies in the world, with the highest yield per hectare of any opiate
producing country.56 More recently, poppies are being grown commercially in Victoria and
the Northern Territory.57
[114] We are satisfied that amending the definition of ‘broadacre field crops’ so that it
describes crops grown in the pastoral industry in a generic way will ensure that new and
emerging crops are within coverage of the Pastoral Award 2010.
[115] There are special rules in the Act dealing with the variation of coverage terms. Special
rules apply to changing the coverage terms of modern awards. Section 163 provides:
‘163 Special criteria relating to changing coverage of modern awards
Special rule about reducing coverage
(1) The FWC must not make a determination varying a modern award so that certain
employers or employees stop being covered by the award unless the FWC is satisfied that they
will instead become covered by another modern award (other than the miscellaneous modern
award) that is appropriate for them.
Special rule about making a modern award
(2) The FWC must not make a modern award covering certain employers or employees unless
the FWC has considered whether it should, instead, make a determination varying an existing
modern award to cover them.
Special rule about covering organisations
(3) The FWC must not make a modern award, or make a determination varying a modern
award, so that an organisation becomes covered by the award, unless the organisation is
entitled to represent the industrial interests of one or more employers or employees who are or
will be covered by the award.
The miscellaneous modern award
(4) The miscellaneous modern award is the modern award that is expressed to cover
employees who are not covered by any other modern award.’
[116] As the claim is for the variation of a modern award, s.163(2) is not relevant as it only
applies to the making of a modern award. It is clear from the context that the legislature
intended to draw a distinction between varying the coverage of an existing modern award and
making a new modern award (compare ss 163(1) and (2), and the use of the words ‘make’ and
‘varying’ in s.163(3)).
[117] In the course of oral argument the NFF confirmed that the proposed change in the
definition of ‘broadacre field crops’:
[2015] FWCFB 8810
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would not stop certain employers or employees being covered by the award (and
hence s.163(1) is not relevant);
would not have the effect that an organisation not entitled to represent the industrial
interests of one or more employers or employees who are or will be covered by the
award, becomes covered by the award (and hence s.163(3) is not relevant); and
is not intended to substantially change the coverage of the award but rather to ensure
that employers who currently sow, raise or harvest broadacre field crops are not
excluded from coverage simply because they shift production to an emerging crop
which does not fall within the scope of the existing definitions of ‘broadacre field
crops’.58
[118] We now turn to the modern awards objective. The considerations in s.134(1)(d), (f),
(g) and (h) are particularly relevant. We have taken into account that the proposed variation
to the definition of ‘broadacre field crops’ will:
support flexible modern work practices by aligning the definitions in the Pastoral
Award 2010 with developments in the range and type of crops grown on Australian
farms (s.134(1)(d));
increase certainty of award coverage and reduce regulatory burden as a consequence
(s.134(1)(f));
facilitate the diversification of farm businesses so that they remain innovative,
adaptive and responsive to changing market demands (s.134(1)(f));
make the coverage clause of the award simpler and easier to understand
(s.134(1)(g)); and
support the competitiveness of the agricultural sector by facilitating the
diversification of farm businesses, which will in turn benefit the national economy
(s.134(1)(h)).
[119] We are satisfied that making the variation proposed is necessary to ensure that the
Pastoral Award 2010 achieves the modern awards objective. We will grant the claim sought.
(iv) Annualised salaries
[120] The NFF seeks a variation to the Award to insert a new annualised salaries clause, in
the following terms:
‘18 - Annualised salaries
The following provisions are to apply to employees employed in any of the classifications
contained in clauses 27, 33 or 39 of the award.
18.1 Annual salary instead of award provisions
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(a) An employer may reach agreement with an employee to pay the employee an annual salary
in satisfaction of any or all of the following provisions of the award:
(i) clauses 28, 34 and 40—Minimum weekly wages;
(ii) clauses 17 and 29 —Allowances and special allowances;
(iii) clauses 31, 36 and 42 —Overtime and penalty rates;
(iv) clause 23.4 —Annual leave loading; and
(v) clauses 26, 32, 38 and 43 – Payment for public holidays.
(b) Where an annual salary is paid, the employer must retain a written copy of the agreement
reached with the employee, which includes the annual salary that is payable and the provisions
of this award that will be satisfied by payment of the annual salary as well as the date on
which the salary arrangement commences.
18.2 Annual salary not to disadvantage employees
(a) The annual salary must be no less than the amount the employee would have received
under this award for the work performed over the year for which the salary is paid (or if the
employment ceases earlier over such lesser period as has been worked).
(b) The annual salary of the employee must be reviewed by the employer at least annually to
ensure that the compensation is appropriate having regard to the award provisions which are
satisfied by the payment of the annual salary.
18.3 Base rate of pay for employees on annual salary arrangements
For the purposes of the NES, the base rate of pay of an employee receiving an annual salary
under this clause comprises the portion of the annual salary equivalent to the relevant
minimum wage in clause 28, 34 or 40, whichever is applicable, and excludes any incentive
based payments, bonuses, loadings, monetary allowances, overtime and penalties or payment
for public holidays.
18.4 The annual salary of the employee will be paid during all periods of paid leave.
[121] The claim is supported by the uncontested evidence of Ms Gracia Kusuma59. Ms
Kusuma is the Industrial Relations Manager of NSW Farmers Association and in that capacity
supervises a team which provides advice and assistance to members on workplace relations
matters. Some 4500 members have access to this service. The following aspects of Ms
Kusuma’s evidence are particularly relevant:
‘5. One of the frequent enquiries we receive relates to reviewing members' proposed
employment conditions for their employees from a compliance perspective and subsequently
formalising them as employment contracts or Individual Flexibility Agreements.
6. On average based on the team's experience, around 50% of members who seek assistance
with drafting or reviewing employment contracts want annualised salary arrangements with
their employees.
7. Annualised salary arrangements are preferred by members in certain circumstances because
they provide consistency of pay for employees, incentivise employees to complete assigned
tasks within normal work hours, and take away the need for clock watching.
8. Farming activities are very much dependent on seasonality, with somewhat predictable
peaks and troughs of workload over the course of the year, especially for farmers in cropping
and mixed farming. The busiest times are during sowing and harvesting, when work is
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rostered over 7 days of the week, and long days are common. By the same token, there are
times during the year when there is little productive work to be done, for example during wet
weather periods and once the harvest is complete.
9. Annualised salary arrangements enable farmers to average work hours over the course of
the year, and give employees a stable income. …
15. The majority of farming operations are small businesses. In the case of our membership,
around 99% of our members employ 10 or less employees.’
[122] As we have mentioned, s.139(1)(f) permits the inclusion in modern awards of a term
about annualised wage arrangements. However, s.139(1)(f) only permits annualised wage
arrangements that meet certain criteria (set out in s.139(1)(f)(i) to (iii)), namely arrangements
that:
(i) have regard to the patterns of work in an occupation, industry or enterprise;
(ii) provide an alternative to the separate payment of wages and other monetary
entitlements; and
(iii) include appropriate safeguards to ensure that individual employees are not
disadvantaged.
[123] In support of its claim the NFF submitted that changing patterns of work due to
seasonal variability and harvest peaks and troughs are prevalent in the pastoral industry,
making it difficult to implement regular rosters and stable payment arrangements in many
workplaces. It was submitted that for this reason ‘many employers implement annual salaries
arrangements to provide predictability of cashflow and certainty of income for employees...’.
[124] The NFF submits that the proposed variation is necessary to ensure that the Pastoral
Award 2010 achieves the modern awards objective:
‘The current working hours in the pastoral industry require flexibility in payment
arrangements in the form of an annualised salary that better reflects the practical realities of
this industry.’
[125] The proposed clause meets the requirements of s.139(1)(ii) and, on the basis of Ms
Kusuma’s uncontested evidence, we are satisfied that the proposed clause has regard to the
patterns of work in the pastoral industry (as required by s.139(1)(i)).
[126] However, a modern award can only include a term about annualised wage
arrangements that, relevantly, includes ‘appropriate safeguards that ensure that individual
employees are not disadvantaged’.
[127] The NFF submits that the proposed variation contains a number of safeguards to
ensure that employees are not disadvantaged by the operation of the term, namely:
(i) the arrangement must be agreed in writing;
(ii) employees must receive at least what they would have received over the year
under the Award;
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(iii) the annual salary rate is payable during all periods of paid leave; and
(iv) the arrangements do not apply to shearing operations.
[128] Before turning to consider whether the proposed term includes ‘appropriate
safeguards’ we propose to consider some of the relevant authorities and the legislative
context.
[129] During the award modernisation process the Australian Industrial Relations
Commission (the AIRC) did not generally insert annualised salary provisions into awards
unless there was a widespread history of such provisions in the relevant antecedent
instruments.60 In its decision of 19 December 2008 the AIRC Award Modernisation Full
Bench rejected the proposition that annualised payment arrangements be adopted as a general
standard in modern awards, for the following reasons:
‘[69] Although annualised wage and salary provisions are a common feature of workplace
agreements they are very rare in the Commission’s awards. By far the predominant method of
calculating entitlements is weekly, based on ordinary hours, penalties, overtime etc. This is a
system with which employees, particularly employees who are safety net dependent, are
familiar. No doubt many employees arrange their affairs on that basis. While employers
invoked the need for flexibility there is always the potential for employee disadvantage which
through fear of reprisal or ignorance employees are unable to correct. There are also some
practical problems associated with the concept in industries in which short hour employment
is common and in which working hours may vary unpredictably. While flexibility might be
important, when safety net entitlements are at issue employers would be required to keep a
record of hours in any event to ensure that the annualised pay was sufficient to meet those
entitlements. Finally, in some industries employers may be able to implement annualised pay
arrangements without breaching the award. We assume that this occurs in many areas of
employment already. Annual salaries are of course also a feature of many workplace
agreements.
[70] As indicated we have decided not to adopt a standard provision for annualised wages and
salaries in modern awards. Where such provisions already exist in relevant awards we have
maintained them. The matter could be revisited in one of the regular award reviews which
have been foreshadowed. We also note that the Clerks—Private Sector Award 2010 will
include an overtime exemption provision which will go part of the way to addressing claims
for annualised salaries in that award. We deal with this later. The parties to the Rail Industry
Award 2010 agreed that the award should contain an annualised wage and salary provision but
could not agree on all of the terms. We deal with that matter later also.’61
[130] Only 19 of the 122 modern awards contain an ‘annualised salaries’ term,62 and in the
modern awards which contain such a term it was usually the case that similar provisions were
in the relevant pre-modernised instruments. Absent such a historical context the AIRC
rejected a number of applications to insert provisions for annualised payment arrangements,
for example in the Real Estate Industry Award 201063 and the General Retail Industry Award
201064.
[131] In most instances the annualised payment arrangement term inserted into a modern
award reflected the form of such a term in relevant pre-modernised instruments and was
included in the modern award by consent, or was unopposed. As a consequence the form and
content of such terms was not the subject of much debate during the award modernisation
process. There were two exceptions in this regard.
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[132] First, in proceedings leading to the making of the Rail Industry Award 2010 the parties
generally agreed on the insertion of an annualised salary term but disagreed on its contents.
In its decision of 19 December 2008 the Award Modernisation Full Bench addressed this
issue, in the following terms:
‘We have accepted the submissions of the parties that annualised salary arrangements are a
common feature in the industry and we note that a clause dealing with this matter was
contained in drafts proposed by both RSCC and the rail unions. However, they were not in the
same terms.
The rail unions submitted that entering into such an arrangement should only be by agreement
between the employer and employee concerned. We agree and the clause in the award has
been drafted accordingly. Additionally the rail unions sought a provision about assumptions
that may have been made about overtime or penalty components to be absorbed into the
annualised wage. There is merit in these submissions and our clause reflects them.
We have made a number of other changes to the terms of the clause as contained in the
exposure draft. It now provides that a copy of the agreement is to be given to the employee
and kept by the employer as a time and wages record. We have also inserted provisions
dealing with the manner in which the agreement may be terminated.’65
[133] The clause determined by the Award Modernisation Full Bench is at clause 18 –
Annualised wage and salary arrangements – of the Rail Industry Award 2010, which states:
18 Annualised wage and salary arrangements
18.1 An employer and an employee may agree to enter into an annualised salary
arrangement instead of any or all of the following provisions of this award:
Clause 14—Classifications and minimum wage rates;
Clause 15—Allowances and expenses;
Clause 23—Overtime and penalty rates; and
Clause 24.3—annual leave loading.
18.2 Where an annualised salary is paid the employer must specify in writing the annual
salary that is payable and what provisions of this award will not apply as a result of
the annualised salary arrangement.
18.3 The annual salary must be no less than the amount the employee would have been
entitled to receive under the rates and allowances prescribed by this award. The annual
salary is paid in full satisfaction of any obligation to otherwise make payments to the
employee under this award and may be relied upon to set off any such obligation,
whether of a different character or not.
18.4 In addition to the requirements of clause 18.3, any written agreement under this clause
must specify each separate component of the annualised wage or salary arrangement
and any overtime or penalty assumptions and calculations commuted into the
annualised arrangement.
18.5 The employer must give the employee a copy of the agreement and keep the
agreement as a time and wages record.
18.6 The agreement may be terminated:
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(a) by the employer or the employee giving 12 months’ notice of termination, in
writing, to the other party and the agreement ceasing to operate at the end of the
notice period; or
(b) at any time, by written agreement between the employer and the individual
employee.
[134] It is to be noted that the clause determined by the AIRC included the following
safeguards:
the annualised salary arrangement is to be by agreement, in writing, between the
employer and employee;
the agreement must specify the annual salary that is payable and the provisions of
the award that will not apply as a result of the agreement; and
the employer must give the employee a copy of the agreement and keep the
agreement as a time and wages record.
[135] The second instance where the content of the term was contested was in relation to the
Clerks-Private Sector Award 2010.
[136] In November 2009 an application was made by the Australian Municipal,
Administrative, Clerical and Services Union (ASU) to vary the Clerks-Private Sector Award
2010 to delete the ‘exemption clause’ in the award. In its decision concerning that application
the Full Bench said:
66
‘[8] Exemption provisions are clauses expressed in a variety of ways which provide that certain
clauses of the award do not apply to particular classes of employees. They are most common in
instruments covering “white collar” employment. In some cases they are expressed to exclude
the application of particular clauses of the award and in other cases they specify the particular
clauses which do apply. The range of matters excluded varies but usually includes clauses
dealing with hours of work and overtime. The class of employee to which the exemption
provision applies is commonly defined by reference to a particular wage or salary level or a
margin above the relevant classification rate. In some cases the right of an employer to
remunerate above the exemption provision is not subject to employee agreement. In other
cases agreement is required.
[9] The ASU submits that the effect of inserting an exemption provision into the Clerks—
Private Sector Award 2010 is to exclude certain employees who are not high income
employees from most award provisions.
[10] Employers submit that the exemption provision provides flexibility, particularly in
relation to senior employees who tend to be employed to perform the duties of a role rather
than the more traditional requirement of spending particular periods of time at work.’
[137] The Full Bench then proceeded to discuss the history of exemption provisions within
clerical awards which had operated throughout Australia and made a number of other
observations before concluding as follows:
67
‘[25] In all of the circumstances we consider that the exemption provision should be removed
but that flexible working arrangements should be available with respect to clerical
employment and that these should be subject to appropriate safeguards and processes to ensure
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that employees clearly understand and agree to any arrangements which may differ from base
award entitlements. We propose to delete the exemption provision in cl.17. However, we
propose to insert an annualised salaries clause. The wording of the clause is in line with
clauses in some other modern awards. It provides for an alternative way to remunerate
employees, safeguards against disadvantage and a formal process to establish and maintain the
annualised salary arrangement...’
[138] The annualised salaries clause determined by the Award Modernisation Full Bench is
clause 17, which states:
17. Annualised salaries
17.1 Annual salary instead of award provisions
(a) An employer may pay an employee an annual salary in satisfaction of any or all of the
following provisions of the award:
(i) clause 16—Minimum weekly wages;
(ii) clause 19 – Allowances;
(iii) clauses 27 and 29 – Overtime and penalty rates; and
(iv) clause 29.3 – Annual leave loading
(b) Where an annual salary is paid the employer must advise the employee in writing of
the annual salary that is payable and which of the provisions of this award will be
satisfied by payment of the annual salary.
17.2 Annual salary not to disadvantage employees
(a) The annual salary must be no less than the amount the employee would have received
under this award for the work performed over the year for which the salary is paid (or
if the employment ceases earlier over such lesser period as has been worked).
(b) The annual salary of the employee must be reviewed by the employer at least annually
to ensure that the compensation is appropriate having regard to the award provisions
which are satisfied by the payment of the annual salary.
17.3 Base rate of pay for employees on annual salary arrangements
For the purposes of the NES, the base rate of pay of an employee receiving an annual salary
under this clause comprises the portion of the annual salary equivalent to the relevant rate of
pay in clause 16—Minimum weekly wages and excludes any incentive-based payments,
bonuses, loadings, monetary allowances, overtime and penalties.
[139] An annualised salaries clause in the same terms as that inserted in the Clerks—Private
Sector Award 2010 was also inserted in the Banking Finance and Insurance Award 201068
and in the Mining Industry Award 2010.69
[140] The ASU made a subsequent application to vary clause 17 of the Clerks—Private
Sector Award 2010 so that agreement between the employer and employee was required
before any such arrangement could be entered into. In its decision dismissing that application
the Full Bench said:
70
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‘[8] Awards operate in conjunction with contracts of employment. It is generally accepted that
clerical employees are commonly remunerated by way of annualised salaries whether the
relevant award expressly provides for such arrangements or not. It is also generally accepted
that if the salary is expressly paid in compensation of all award entitlements and the amount
paid exceeds the amount due under the award then the arrangement is not inconsistent with the
award. The intention of the ASU in making its application is that the only arrangements which
can legally be entered into are those expressly provided for in the award.
[9] It is apparent that the terms of the relevant awards and NAPSAs were taken into account in
formulating the annualised salaries clause in the Commission’s decision of 16 November
2009. We believe that the safeguards in the modern award are appropriate in the circumstances
of clerical employment. Further, we are concerned that the variation sought by the ASU may
reduce existing flexibility and require changes in practices which have operated for many
years. The ASU has not made a case for imposing a limitation on existing arrangements.’
[141] A later Full Bench decision dealt with an application to vary the annualised salaries
clause then in the Oil Refining and Manufacturing Award 2010.
71
The Full Bench noted that
it was addressing a similar issue to that raised in the Clerks Award decision referred to above,
namely whether the agreement of the employee should be required before an employer may
pay that employee an annualised salary. The Full Bench decided to insert an annualised
salaries clause in the same terms as had been inserted into the Clerks—Private Sector Award
2010, observing that annualised salaries for clerks were widespread in the oil industry and that
the clause contained safeguards to ensure an employee is not disadvantaged by being
remunerated by way of an annualised salary.
72
[142] We note that in both the Clerks Award and the Oil Award the decisions turned on the
circumstances pertaining in those industries.
[143] There are a number of other Commission decisions dealing with annualised salaries to
which we wish to refer.
[144] As part of the two year review of modern awards pursuant to Item 6 of Schedule 5 to
the Fair Work (Transitional Provisions and Consequential Amendments) Act 1009 (Cth) (the
Transitional Review), the ASU made applications to delete the annualised salaries clause in
two modern awards – the Contract Call Centres Award 2010 and the Clerks – Private Sector
Award 1010. Both applications were heard by Senior Deputy President Kaufman, and
dismissed.73
[145] In his decision in the Clerks – Private Sector Award 2010 the Senior Deputy President
made some observations about the scope of the Transitional Review before giving his reasons
for dismissing the application:
‘[15] It is apparent that those seeking a variation to a modern award in the 2012 Review must
demonstrate that the award is not achieving the modern awards objective, or that it is not
operating effectively, without anomalies or technical problems arising from the Part 10A
award modernisation process. Further, it follows, that the variation sought must address one or
both of these defects, or that there are other cogent reasons for making the variation as part of
the 2012 Review....
[67] The ASU seeks to remove clause 17, the annualised salaries provision, of the Award. This
variation is opposed by all parties that have made an application in relation to the review of
the Award, as well as the AFEI. The ACTU filed submissions in support of this variation.
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[68] In pursuing this variation, the ASU tendered a survey to support the removal of clause 17.
The ASU submitted that this survey indicated that a majority of employees surveyed were not
given a choice as to whether or not to be paid on this basis, considered that the conditions
pertaining to the arrangement had been adequately explained, had never reviewed the
arrangement to compare it with award entitlements and would not, given the choice, prefer to
be paid in accordance with award conditions.
[69] The ASU further submitted that the survey results showed that just under 5% of those
responding believed that their annualised salary arrangement compensate them for
entitlements they would otherwise have received under the Award. Approximately one third
were unsure.
[70] It is worth noting that the survey tendered was based on the responses of approximately
63 people, which in reality, is a miniscule proportion of those covered by the Award
[71] On 22 October 2012 I declined to delete an annualised salaries clause in the Contract Call
Centres Award 2010 (the CCC Award) 11 in the Review of that award12. The ASU had
sought the deletion of that clause on similar grounds to those it propounds in this application.
[72] In my reasons for decision I traced the history of the making of the CCC Award, an
analysis that required an examination of the history of the insertion of the annualised salaries
clause into this Award. Although there are differences in the wording of the clauses in the
CCC Award and the Award, their genesis is similar, as is their effect, albeit the clause in the
Award applies to all employees covered by it.
[73] The number of award clauses against which an annualised salary can be offset is not the
same between the two awards. Nevertheless, for the purposes of the Review, the differences
between the two awards are not of such a nature as would lead to a different conclusion.
[74] Apart from the insufficient size of the sample surveyed, the answers given would not
persuade me that there is any need to remove the annualised salaries clause from the Award.
[75] In refusing to remove the annualised salaries clause in the Award, I adopt my reasoning
in the review of the Contract Call Centres Award 2010.’74
[146] The reasoning in respect of a similar application relating to the Contract Call Centres
Award 2010, to which his Honour refers above, is as follows:
‘[21] I will treat the ASU submission as being that the variation sought should be made
because the inclusion of the annualised salary arrangements clause in the CCC Award
prevents it from meeting the modern awards objective in that it “does not provide a ‘fair and
relevant minimum safety net of terms and conditions’ with respect to the minimum rates for
employees” in the three classifications to which the clause applies, taking account of:
the need to encourage collective bargaining [s 134(1)(b)];
the need to promote social inclusion though increased workforce participation [s 134(1)(c)];
and
the need to ensure a simple, easy to understand, stable and sustainable modern award system
for Australia that avoids unnecessary overlap of modern awards [s 134(1)(g)].
[22] The ASU further submits that the Award does not meet item 6(2)(b) of Schedule 5 of the
Transitional Act in that, whilst it contains both an annualised salary arrangements provision
and an Award Flexibility provision, the Award does not operate effectively without anomalies
or technical problems arising from the Part 10A award modernisation process.
[23] As to the need to encourage collective (“enterprise” is the word used by the ASU)
bargaining, the ASU submits that the employees in the three classifications the subject of cl
http://www.austlii.edu.au/au/cases/cth/FWA/2012/9731.html#P287_28985
http://www.austlii.edu.au/au/cases/cth/FWA/2012/9731.html#P286_28946
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18.5 have no ability to bargain about the award provisions for which the annualised salary
arrangements clause is required to compensate them.
[24] This submission cannot be correct. The mere fact that an annualised salary, with the
various award entitlements absorbed into it, is paid does not prevent bargaining about whether
an enterprise agreement should contain an annualised salary arrangements clause. Nor does it
prevent bargaining about what entitlements of the nature of those set out in cl 18.5(b) should
be included in any enterprise agreement, the quantum of any such allowances or which of
them should be the subject of any annualised salary arrangements clause.
[25] As to the need to promote social inclusion through increased workforce participation the
ASU submits:
In the paper Social Inclusion: Outlining economic implications of social
inclusion/exclusion, the Department of Education, Employment and Workplace
Relations (DEEWAR) broadly defines social inclusion as focus on social relations and
“the extent to which people are able to participate in social affairs and attain power to
influence decisions that affect them.” This includes participation in the labour market.
There is no opportunity for employees in the higher classifications to participate in the
determination of essential award conditions. The greater majority of employees
covered by the award are female and non-unionised and are therefore already under-
represented in the labour market in regard to both participation and the ability to have
a say in the terms and conditions of their work.
[Reference deleted]
[26] This submission is untenable. Whether or not there is an “opportunity for employees in
the higher classifications to participate in the determination of award conditions” says nothing
about participation in the labour market, has no demonstrated connection with the fact that
there is an annualised salary arrangements clause in the Award and ignores the fact that it is
the ASU that represented clerical employees in the making of the Award. Further, those
employees are not excluded from the coverage of the Award.
[27] Further, I do not consider that the annualised salary arrangements clause is relevant to the
need to promote social inclusion, which is one of the matters to be taken into account in
ensuring that modern awards provide a fair and relevant minimum safety net of terms and
conditions (the modern awards objective).
[28] As to the need to ensure a simple, easy to understand, stable and sustainable modern
award system for Australia that avoids unnecessary overlap of modern awards, the ASU
submits:
Individual flexibility clauses are included by statute in all modern awards and are
intended to provide the appropriate safeguards for an employer and employee to
negotiate and genuinely agree to a salary arrangement that will benefit both parties.
An annualised salary clause circumvents this process and can create confusion about
whether the award flexibility clause or the annualised salary provision should apply.
[29] Clause 7 of the Award deals with award flexibility and applies to all employees covered
by the Award. Clause 18.5 only applies to the three highest classifications in the Award. The
existence of cl 18.5 does not circumvent the ability of any employee to vary the application of
the terms referred to in cl 7. Arguably, in the case of the three highest classifications, the
entitlements for which those of them on annual salary arrangements are compensated for by
the salary arrangements clauses, 20, 24 and 27.4, could nonetheless be the subject of an
individual flexibility agreement. I do not accept the ASU’s submission that these employees
are implicitly denied access to the individual flexibility clause, or that they are denied the right
to negotiate arrangements to meet their individual needs around when work is performed,
overtime rates, penalty rates, allowances and leave loading. No evidence was adduced to the
effect that the coexistence of clauses 7 and 18.5 creates “confusion about whether the award
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flexibility clause or the annualised salary provision should apply.” Each has separate work to
do and they are not inconsistent with each other.
[30] Even if I am wrong about ability of the employees in the three highest classifications to
negotiate such arrangements, that does not go to the need to ensure a simple, easy to
understand, stable and sustainable modern award system for Australia that avoids unnecessary
overlap of modern awards. Section 134(1)(g) speaks of unnecessary overlap of modern
awards, not of terms within a modern award.
[31] As to the ASU’s submission that whilst the Award contains both an annualised salary
arrangements provision and an award flexibility provision, the Award does not operate
effectively without anomalies or technical problems arising from the Part 10A award
modernisation process, the ASU largely makes the same argument that it does in relation to s
134(1)(g). There is no evidence to support the ASU’s assertions.
[32] As well as submitting that the Award, whilst containing cl 18.5 does not meet the modern
awards objective, the ASU submits that there are cogent reasons for its removal and that the
provision was not adequately considered by the Australian Industrial Relations Commission
“when compared to the consideration given to the Award Flexibility provision.”
The cogent reasons for its removal are said to be “based on the principles of equity, fairness
and changed circumstances”, which are that the provision is:
Inherently inequitable and discriminatory as it applies only to employees in the
higher classification levels;
Inherently unfair as no employee agreement is required;
No longer necessary for employers now that all modern awards have compulsory award
flexibility provisions; and
More appropriate in Enterprise Agreements where actual pay rates apply and annualised pay
arrangements can be agreed, monitored and more reliably reviewed by employees.”
[33] In my view, none of these matters is made out, let alone is has the ASU demonstrated that
there is a cogent reason for the removal of the clause. By its nature it is more appropriately
applied to employees in the higher classifications. It is not unfair merely because no employee
agreement is required. Most award clauses apply absent employee or employer agreement.
The award flexibility clause does not do the same work as that done by cl 18.5. I do not accept
that such a clause is more appropriate in an enterprise agreement, and whether or not it is, is
probably irrelevant to the review…
[39] In the 2012 Review Fair Work Australia must consider whether the Award achieves the
modern awards objective. If the Award fails to do so in any respect, then Fair Work Australia
must consider whether the proposed variation would render the Award such that it does
achieve that objective. In my view the ASU has not established that the Award, because it
contains the annualised salaries clause, is not consistent with the modern awards objective. It
follows that the deletion of the clause will not achieve, or better achieve, that objective.
[40] It is manifestly undesirable that an Award that resulted from the agreed adoption of the
Contract Call Centres Award 2003, which itself was made by consent after lengthy
negotiations involving not only the ASU and AiG, but with other unions as well as the ACTU,
should not be disturbed in the 2012 Review without, Fair Work Australia being provided with
very strong cogent reasons for so doing. This, the ASU has failed to do.
[41] Not only was the Award based on the Contract Call Centre’s consent award, but that
award largely replicated another consent award to which the ASU was also a party - the
Telecommunications Services Industry Award 2002.
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[42] On 5 October 2012, I issued a statement seeking further submissions on the interaction
between the common law in relation to offsetting payments against award provisions and the
annualised salaries clause.
[43] At a further hearing on 19 October 2012, the ASU maintained its position that the clause
should be deleted, as did the employers that it should be retained.
[44] Having heard the parties, I am further confirmed in my view that the clause should not be
deleted. Whatever be the position at common law, the current clause provides the parties with
certainty as to what may be offset if an annual salary is paid, what procedures must be
followed, as well as providing certain safeguards to employees.
[45] In my view the deletion of clause 18 would cause confusion, particularly as to what, if
anything, can be offset and as to whether employees could be paid by way of an annual salary
at all. Its deletion would also, in my view, disadvantage the employees affected because, as a
matter of law, they could be remunerated by way of annualised salaries without any of the
protections provided by the clause.
[46] For the above reasons the application is dismissed.’75
[147] There was an appeal from his Honour’s decision in the Clerks Award matter. In
refusing permission to appeal the Full Bench made some observations about an ACTU
submission regarding the proposition that annualised salaries arrangements should be entered
into by agreement with the relevant employee and employer:
‘[22] With respect to the ACTU’s submissions, we point out that the “Annualised salaries”
clause in the Clerks Award is a base award entitlement, and part of the safety net of terms and
conditions provided by the Clerks Award. The safety net in the FW Act being the minimum
terms and conditions in the National Employment Standards, modern awards and national
minimum wage orders.76
[23] We also point out the FW Act does not require that the annualised wage arrangements in
modern awards provide for the parties’ agreement to such arrangements. We do not think there
is any warrant for regarding the words “arrangements” or “alternative” in s.139(1)(f) of the
FW Act as incorporating the concept of “agreement”.
[24] Further, we point out that subsequent to the Full Bench decision that included the
“Annualised salaries” clause in the Clerks Award, a Full Bench of FWA specifically dealt
with an ASU application to vary that “Annualised salaries” clause so as to require the parties’
agreement to an annual salary. The Full Bench of FWA dismissed the ASU application…’ 77
[148] Finally, in Re South East Water Corporation (SE Water) a Full Bench of the
Commission inserted an annualised salaries term into the Water Industry Award 2010.78 The
relevant term applies to persons engaged at classification levels 9 and 10 and the Full Bench
observed that ‘persons engaged at these two levels are principally in managerial positions and
have traditionally been paid by way of an annual salary’.79
[149] In SE Water the form of the clause was in dispute. The applicant employer sought a
clause in similar terms to that in the Clerks—Private Sector Award 2010, to which we have
referred earlier. The ASU opposed the applicant’s proposed clause describing it as ‘a weak
clause with inadequate safeguards’80 and submitted that the annualised salaries clauses in a
number of other modern awards were to be preferred. The modern awards identified by the
ASU included the Rail Industry Award 2010, to which we earlier referred; the Pharmacy
Industry Award 2010; the Manufacturing and Associated Industries and Occupations Award
2010; Oil Refining and Manufacturing Award 2010; and the Broadcasting and Recorded
Entertainment Award 2010.
[2015] FWCFB 8810
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[150] The Full Bench made the following observations about the ASU’s submissions:
‘[27] We observe that the clauses in the modern awards referred to by the ASU were inserted
by consent of the parties and not the subject of Full Bench scrutiny in any contested hearing.
We also observe that to some extent the ASU identifies provisions it submits are superior from
a number of awards. It identifies these provisions as containing what it called "inbuilt features"
which constitute additional safeguards it submits should be contained in an annualised salaries
clause.81 It summarised those features. They were that the annualised salary must be agreed
and in writing, that the parties to it must have genuinely made the agreement without coercion
or duress, the components of the annualised salary agreement must be listed, there was to be
no disadvantage to the employee, a copy of the agreement must be kept as a time and wages
record, there must be annual reviews of the agreement, the employee was entitled to involve a
relevant union or an employee nominated representative and, finally, the agreement can be
terminated by either party with 12 months' notice or at anytime if agreed.’82
[151] The Full Bench went on to consider the submissions put by the parties and to
determine the content of the relevant clause, as follows:
‘[30] Subject to the matters we address in paragraph [32], we have not been persuaded that
there is anything about the employers and employees at classification Levels 9 and 10 in the
Water Award that warrants a departure by this Full Bench from taking a similar approach to
that taken in earlier Full Bench decisions dealing with contested cases about the terms of an
annualised salaries clause. The observations made by the Full Benches in the November 2009
Clerks Award decision and the February 2010 Clerks Award decision are equally applicable to
this matter. No persuasive submission was made for us to rule in a manner inconsistent with
those decisions. Similarly, the decision of the Full Bench in March 2013, which endorsed the
comments Senior Deputy President Kaufman had made about the need for a clause in terms
similar to those SEW here seeks are also applicable to this application.
[31] We have not been persuaded there is anything about the attributes of the water industry or
its administrative and professional employees at the higher classification levels in the Water
Award which justifies us departing, in any significant way, from making a ruling consistent
with each of the Full Bench decisions we have identified above.
[32] We have, however, decided to introduce three additional requirements into the clause that
we have decided should be inserted into the Water Award. They will, to some extent, address
the need for the “safeguards” the ASU submitted were necessary. The requirements concern
additional details which are to be in writing, including the classification level of the employee,
the identification of the date on which the annualised salary arrangement commences and that
a copy of the arrangement is to be provided to the employee. Nothing that was put to us in the
hearing suggests that these requirements will place any unreasonable burden on employers or
employees.
[33] We have not made any reference to the role a union may have. If any employee has
concerns about the operation of the clause or their annualised salary arrangement they may
raise that concern under clause 9 of the Water Award, the dispute resolution clause. That
clause makes it clear that an employee is entitled to have a person, organisation or association
represent them in any dispute to which the clause applies. Depending on the nature of the
complaint an employee may have, they may also have rights which may be pursued under the
general protections provisions of the Act.
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[34] We have also not found it necessary to place any additional obligations upon an employer
in respect to the written wages records it should keep. In this respect, we note that obligations
about the details that must be kept are adequately regulated by Part 3-6 of the Fair Work
Regulations 2009.
[35] We have considered the submissions of APESMA opposing the introduction of any
annualised salaries clause into the Water Award. For the reasons we have given we were
persuaded such a clause was appropriate for employees at the higher classification levels in the
Water Award. For the same reasons we do not accept the submission that annualised salaries
can adequately be introduced under the terms of clause 7, the award flexibility clause.
[36] We are satisfied that the clause we have decided upon is necessary to achieve the modern
awards objective. In this respect it is a clause which is consistent with s.134(1)(d) in that it
will promote flexible modern work practices and the efficient and productive performance of
work. Consistent with s.134(1)(f) it should have a positive impact on the regulatory burden on
employers and reduce employment costs associated with payroll. It should provide to both
employers and employees, wishing to enter into an annualised salaries arrangement, a simple
and easy to understand provision consistent with s134(1)(g).’83
[152] The clause inserted into the Water Industry Award 2010 provides as follows:
14.2 Annualised salaries
The following provisions are to apply to employees employed in classification Levels 9 and 10
in accordance with Schedule B of this award.
14.2.1 Annual salary instead of award provisions
(a) An employer may pay an employee an annual salary in satisfaction of any
or all of the following provisions of this award:
(i) clause 14—Minimum wages;
(ii) clause 19—Allowances;
(iii)clauses 25.5 and 26—shiftwork penalty rates and Overtime and;
(iv)clause 27.3—Annual leave loading
(b) Where an annual salary is paid the employer must provide written advice to
the employee of the following:
(i) the annual salary that is payable and which of the provisions of
this award will be satisfied by payment of the annual salary;
(ii) the date on which the salary arrangement commences;
(iii)the award level classification for the role; and
(iv) the terms of clause 14.2.2 of this award.
14.2.2 Annual salary not to disadvantage employees
(a) The annual salary must be no less than the amount the employee would
have received under this award for the work performed over the year for
which the salary is paid (or if the employment ceases earlier over such
lesser period as has been worked).
(b) The annual salary of the employee must be reviewed by the employer at
least annually to ensure that the compensation is appropriate having regard
to the award provisions which are satisfied by the payment of the annual
salary.
[2015] FWCFB 8810
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14.2.3 Base rate of pay for employees on annual salary arrangements
For the purposes of the NES, the base rate of pay of an employee receiving an annual
salary under this clause comprises the portion of the annual salary equivalent to the
relevant rate of pay in clause 14—Minimum wages and excludes any incentive-based
payments, bonuses, loadings, monetary allowances, overtime and penalties.
[153] Three general observations may be made about the decisions to which we have
referred.
[154] First, the Commission has adopted a cautious approach to the insertion of annualised
wage arrangements in modern awards. In the 21 modern awards that contain such a term it
was usually the case that similar provisions formed part of the relevant pre-modernised
instruments.
[155] Second, the safeguards that have been incorporated in annualised wage arrangement
terms in modern awards have varied depending on the circumstances relating to the particular
award.
[156] Third, the Review is broader in scope than the Transitional Review and as such is the
first real opportunity to fully examine the appropriateness of the safeguards to be incorporated
in such terms.
[157] We would also make some particular observations about the SE Water decision, as it
is the most recent Full Bench decision dealing with this issue.
[158] The first point is that the SE Water decision is distinguishable from the matter
presently before us in the following respects:
the predecessor awards to the Water Industry Award 2010 contained provisions
limiting senior employees entitlements to overtime;
annualised salaries are a common feature in the water industry;
the clause in question applies to senior employees who are principally in managerial
positions and have traditionally been paid by way of an annual salary; and
the decision was made in the context of the Transitional Review.
[159] The second point is that, contrary to the Full Bench’s observation in SE Water, the
annualised salaries term in the Rail Industry Award 2010 was not inserted by consent but
rather, as we have set out earlier, was the subject of a contested hearing.
[160] The final point we wish to make about the SE Water decision concerns the observation
(at [34] of that decision) that it was unnecessary to specify that written records be kept
because that issue was adequately regulated by Part 3-6 of the Fair Work Regulations 2009.
For the reasons which follow there is cause to doubt the correctness of that observation.
[161] Employer obligations in relation to employee records and pay are set out in Division 3
of Part 3-6 of the Fair Work Regulations 2009. The requirements in respect of employee
records are quite specific. For instance, there is a requirement to keep a copy of an individual
[2015] FWCFB 8810
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flexibility arrangement entered into by an employer and employee (reg. 3.38) and if an
employer gives a guarantee of annual earnings under s.330 of the Act, the guarantee is a kind
of employee record that the employer must make and keep (reg. 3.39). There is no
requirement to make and keep a record of an annualised wage arrangement.
[162] One of the purposes of annualised salaries is to provide income stability in
circumstances where the hours worked fluctuates over the course of a year. As Senior Deputy
President Polites observed in Re: Energy Developments Limited – AWU Hydrocarbon Gas
and Energy Award:
‘... the concept of an annualised salary is that on occasions employees will work less
than the notional times provided for in the salary and on occasions they will work
more.’84
[163] To ensure that employees are not disadvantaged by such arrangements the relevant
term usually provides that the annual salary must be no less than the amount the employee
would have been entitled to receive under the rates and allowances prescribed by the award.
The modern award term may also provide for the review of any annual salary to ensure that it
is appropriate having regard to the award provisions which are satisfied by its payment.
These two elements are features of the NFF’s proposed clause.
[164] Inherent in these safeguards is the notion that the annualised wage paid can be
compared to what the employee would have been paid had all of the provisions of the modern
award applied. In other words, to ensure an employee is not disadvantaged the annualised
wage paid must be capable of being compared to what the employee would have received if
the annualised wage arrangement was not in place. Such a comparison necessarily requires
that records be kept of the allowances, overtime and penalty rates that would have been
payable.
[165] The difficulty is that where an employee is paid pursuant to an annualised wage term
in a modern award it is unclear whether there is a requirement to keep an employee record in
respect of, for example, overtime hours worked.
[166] Regulation 3.34 deals with the requirement to make and keep employee records in
respect of overtime by an employee, it provides:
3.34 Records—overtime
For subsection 535(1) of the Act, if a penalty rate or loading (however described) must be paid
for overtime hours actually worked by an employee, a kind of employee record that the
employer must make and keep is a record that specifies:
(a) the number of overtime hours worked by the employee during each day; or
(b) when the employee started and ceased working overtime hours.
Note: Subsection 535(1) of the Act is a civil remedy provision. Section 558 of the Act and Division 4 of
Part 4-1 deal with infringement notices relating to alleged contraventions of civil remedy provisions.
(emphasis added)
[167] Regulation 3.34 only requires an employee record to be made and kept if ‘a penalty
rate … must be paid for overtime hours actually worked by an employee’. The essence of an
annualised wage arrangement is that penalty rates for overtime hours do not need to be paid,
[2015] FWCFB 8810
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because they are comprehended within the annualised wage. It would seem to follow that if
an annualised wage arrangement is in place then there is no requirement to make and keep an
employee record of the number of overtime hours worked by the employee each day.
[168] A similar issue arises in relation to recording any entitlements to allowances or penalty
rates. Regulation 3.33 provides as follows:
3.33 Records—pay
(1) For subsection 535(1) of the Act, a kind of employee record that an employer must make
and keep is a record that specifies:
(a) the rate of remuneration paid to the employee; and
(b) the gross and net amounts paid to the employee; and
(c) any deductions made from the gross amount paid to the employee.
(2) If the employee is a casual or irregular part-time employee who is guaranteed a rate of pay
set by reference to a period of time worked, the record must set out the hours worked by the
employee.
(3) If the employee is entitled to be paid:
(a) an incentive-based payment; or
(b) a bonus; or
(c) a loading; or
(d) a penalty rate; or
(e) another monetary allowance or separately identifiable entitlement;
the record must set out details of the payment, bonus, loading, rate, allowance or entitlement.
Note: Subsection 535(1) of the Act is a civil remedy provision. Section 558 of the Act and Division 4 of
Part 4-1 deal with infringement notices relating to alleged contraventions of civil remedy provisions.
(emphasis added)
[169] As appears to be the case with overtime records, the obligation to make and keep an
employee record of allowances or penalty rates only arises if the employee is ‘entitled to be
paid’ such payments.
[170] The matters we have identified highlight the need for careful consideration to be given
to the ‘appropriate safeguards’ to be incorporated in an annualised wage arrangements term to
‘ensure that individual employees are not disadvantaged’ (as required by s.139(1)(f)(iii)). We
propose to give further consideration to this issue. We will issue a Statement in due course
setting out some provisional views as to the content of an appropriate annualised wage
arrangement term for insertion into the Pastoral Award 2010. Interested parties will be given
an opportunity to comment and the matter will be the subject of a further hearing.
(vi) Woolclassers formula
[171] The variation proposed to the ‘woolclassers formula’ is a technical rather than
substantive amendment and is intended to resolve an issue which arises when the minimum
[2015] FWCFB 8810
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rates in the award are adjusted following an Annual Wage Review decision. The rates
applicable to a woolclasser level 2 illustrate the issue.
[172] Woolclassers are either paid a weekly minimum rate or by a pieceworker rate. Clause
45.8(a) provides that the minimum weekly rate for a woolclasser level 2 is $1298.45. Clause
45.8(a)(ii) sets out how this minimum rate is calculated:
(ii) The woolclasser level 2 minimum weekly rate is arrived at according to the following
formula:
$
Base 755.59
Woolrolling and other shed hands work 75.93
Subtotal 1 831.52
Plus casual loading of 25% (of subtotal 1) 207.88
Subtotal 2 1039.40
Plus conditions allowance 107.15
Plus enterprise flexibility (including hours) and wet weather allowance 151.89
Total 1298.44
Rounded to the nearest 5 cents 1298.45
[173] The piecework rate applicable to a woolclasser is set out in clause 45.8,:
‘The piecework rate formula is $1298.45 (Woolclasser level 2) divided by 4 = $324.61.’
[174] This piecework rate then applies per 1000 sheep and/or lambs (see clause 45.6(a)).
[175] Clause 45.8(f) contains the formula for calculating various woolclassers’ allowances,:
Employees who do not receive piecework rates may be entitled to the following allowances:
Allowance % of standard rate per week
Conditions 602.3
Enterprise flexibility 853.8
Woolrolling 426.8
Bookkeeping 277.5
[176] While expressed as applying to ‘employees who do not receive piecework rates’ the
formula in clause 45.8(f) is in fact also relevant to woolclassers who are remunerated by
piecework. This is so because the piecework rate formula is simply a proportion of the
minimum weekly rate (see clause 45.8 above), and the weekly rate includes both the base rate
and allowances relevant to the woolclasser’s level of skill, experience and responsibility.
[2015] FWCFB 8810
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[177] The short point is that the allowances applicable to woolclassers are factored into the
relevant piecework rate because that rate is calculated by reference to the woolclassers
formula (which incorporates the relevant allowances) and the NFF submits that the award
should be varied to reflect this position.85
[178] The NFF seeks a variation to clause 45.8(f) of the Award to replace the following
sentence:
(f) Employees who do not receive piecework rates may be entitled to the following
allowances:
with:
(f) Woolclassers allowances formula
Allowances payable to Woolclassers under clause 45.8 are calculated in accordance
with the following formula:
[179] The approach proposed is consistent with that taken in other parts of the Pastoral
Award 2010, where formulas are used to explain how particular rates of pay, including
piecework payments, are calculated. For example:
(a) The Shearers’ formula in clause 45.1(a) underpins all other wage rates for shearers
in the award; and
(b) The Crutching formula in clause 45.2(c) sets out the calculation of crutching rates
for both piecework rates and allowances. The heading to clause 45.2(a) and terms
of clause 45.2(b) both make clear that the formula in clause 45.2(c) applies in each
case, so that crutching rates are calculated in proportion to the ‘Shearers’ per 100
rate.
[180] The NFF submits that the proposed variation ‘will ensure that the text of the Award
reflects both the intention and practical operation of the Woolclassers formula, so that all
parties adopt the same formula when calculating adjustments to Woolclassers allowances
following the Annual Wage Review’.86
[181] We now turn to the modern awards objective.
[182] The proposed variation will make the award simpler and easier to understand which
takes account of the matter in s.134(1)(g). We are not persuaded that the matters specified in
s.134(1)(a), (b), (c), (d), (e), (f) and (h) are relevant to this particular claim.
[183] We are satisfied that the variation proposed is necessary to ensure that the Pastoral
Award 2010 achieves the modern awards objective. We will grant the claim sought.
4. Next Steps
[184] For the reasons given we propose to vary the Pastoral Award 2010 to grant the claims
made in relation to:
the rate to be paid for crutching rams and ram stags;
the definition of broadacre field crops; and
[2015] FWCFB 8810
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the Woolclassers allowance formula.
[185] A draft variation determination giving effect to our decision is set out at Attachment 2
and will be posted on the 4 Yearly Review of Modern Awards website. Interested parties will
have until 4pm Friday 5 February 2016 to comment on the draft variation determination.
[186] Further submissions are sought in relation to the ‘one in four’ aspect of the AWU’s
learner shearer claim. Directions will be issued shortly setting out the timetable for such
submissions and providing interested parties with an opportunity to reply to any submissions
filed.
[187] In relation to the NFF’s claim to insert an annualised wage arrangements term into the
award, we will issue a Statement in due course setting out some provisional views as to the
content of such a term. Interested parties will be given an opportunity to comment and the
matter will be the subject of a further hearing.
[188] There is one final matter. A typographical error in clause 45.2(d) requires rectification.
Clause 45.2(d) provides:
‘For crutching stud ewes and their lambs – one and a quarter of the rates prescribed in clause
45.1(a).’ (emphasis added)
[189] The cross reference to clause 45.1(a) should be to clause 45.2(a). A correction order
was made on 12 December 2013,87 but has not been translated into the published award or the
exposure draft. We will take steps to ensure that this is done.
PRESIDENT
Printed by authority of the Commonwealth Government Printer
Price code J, PR575275
Appearances:
S Crawford for The Australian Workers’ Union
S McKinnon for the National Farmers’ Federation
J Arndt for Australian Business Industrial and the New South Wales Business Chamber
Hearing details:
Sydney.
2015.
December 9.
https://www.fwc.gov.au/awards-and-agreements/modern-award-reviews/4-yearly-review/award-stage/award-review-documents/MA000035?m=AM2014/239
[2015] FWCFB 8810
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Attachment 1
MATTER AM2014/239 4 yearly review of the Pastoral Award 2010
STATEMENT OF AGREED FACTS BETWEEN THE AWU, NFF AND SCAA
REGARDING THE CRUTCHING OF RAMS AND RAM STAGS AND LEARNER
SHEARERS
Background
This document contains a statement of agreed facts between the following parties:
The Australian Workers’ Union (AWU);
The National Farmers’ Federation (NFF); and
The Shearing Contractors Association of Australia (SCAA).
The document has been prepared in support of variations sought by the parties on a consent
basis to the Pastoral Award 2010 2010.
Crutching rates for rams and ram stags
The parties agree that:
1. The process of crutching is a limited kind of shearing, where wool is removed “from the
crutch area of sheep for various purposes, such as to avoid infection from the blowfly; prior to
lambing; to treat skin underneath; prior to sale or slaughter” (Pastoral Industry Award 1986,
Print J9497, 26 September 1991 at page 1).
2. Double rates for crutching rams and ram stags were first introduced by consent into the
Federal Pastoral Award 2010 in 1936.
3. Wage rates under the Pastoral Industry Award 1965 were increased on work value grounds
following a decision of McKenzie C of the Australian Conciliation and Arbitration
Commission on 29 September 1981 (Pastoral Industry Award, 1965 352/81 MD Print E7720).
Double rates for crutching of rams and ram stags were retained in the Award at this time.
4. The task of crutching has been the subject of a number of shed inspections in connection with
the Pastoral Award 2010 over the years. In 1989, Deputy President Riordan of the Australian
Industrial Relations Commission observed in a decision on crutching rates that: “every
conceivable manner of crutching a sheep has been demonstrated in one or other of the
proceedings in relation to this disputation” (P143 Dec 793/89 S Print H9979, 26 October 1989
at page 7). The decision retained the double time rate for crutching rams and ram stags.
5. In the same decision, Riordan DP observed (at page 8):
[2015] FWCFB 8810
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“As a result of the inspections I have reached the conclusion that a major element in
the performance of the work, insofar as the time taken to perform it is concerned,
relates to the effort in actually getting hold of the sheep and dragging it in a proper
manner and positioning it correctly in order to be able to shear the wool required to be
removed.”
6. In part, this shows the historical basis for double rates for crutching rams and ram stags - the
effort required to crutch a ram or ram stag is greater because of the size and weight of the
animal.
7. In addition, for both stud ewes and rams, extra care needs to be taken around the crutch given
the importance of the animal as breeding stock.
8. On 30 June 1998, Commissioner Merriman issued the Allowable Matters decision in relation
to the Pastoral Industry Award 1998.88 Double rates for crutching rams and ram stags were not
included in the 1998 Award.
9. The transition to pre-reform awards and Australian Pay and Classification Scales from 27
March 2006 under the Work Choices regime meant that the terms of the 1998 Award were
effectively preserved.
10. From 2010, award modernisation saw the terms of the pre-reform award dealing with rates for
crutching adopted in the Pastoral Award 2010 2010.
11. Including double rates for the crutching of rams and ram stags in the Pastoral Award 2010
2010 by reference to wages which have been established on work value grounds over many
years is appropriate having regard to the nature of the work, the level of skill and
responsibility and the conditions under which work is done.
Learner shearers
The parties agree that:
1. Learner shearer terms have been a feature of the Federal Pastoral Award 2010 for many years.
2. In 1917, the definition of “learner shearer” was “lads who have not shorn at three sheds”. This
definition was maintained until 1938, when it was varied to mean “a shearer who has not yet
shorn 5000 sheep”.
3. Awarding the variation, Chief Justice Dethridge stated that “the current definition limits
unduly the amount of training required” and “a man does not become a fully competent
shearer (as distinguished from one who should be deemed still a learner) until he has shorn
several thousands of sheep at least in different sheds and in two seasons.”
[2015] FWCFB 8810
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4. In 1948, guaranteed minimum rates for learner shearers were introduced into the Federal
Pastoral Award 2010. Justice Donovan stated that the changes were a “means of giving
learners a fairer deal. They have previously found it difficult to make fair wages in their early
shearing.” He went on to state that “the new arrangement will attract greater numbers of
young men into the industry”.89
5. As discussed above, wage rates under the Pastoral Industry Award 1965 were increased on
work value grounds following a decision of McKenzie C of the Australian Conciliation and
Arbitration Commission on 29 September 1981 (Pastoral Industry Award, 1965 352/81 MD
Print E7720). Learner shearer minimum rates were retained in the Award at this time.
6. On 30 June 1998, Commissioner Merriman issued the Allowable Matters decision in relation
to the Pastoral Industry Award 1998.90 The definition of learner shearer was retained, but other
terms including a guaranteed minimum rate of pay and the reservation of 1 in 4 stands for
learners were removed.
7. The transition to pre-reform awards from 27 March 2006 under the Work Choices regime
meant that the 1998 terms dealing with learner shearers were effectively preserved.
8. From 2010, award modernisation resulted in the terms of the pre-reform award dealing with
learner shearers being reflected in the Pastoral Award 2010 2010.
9. Setting a minimum rate of pay for learner shearers in the Pastoral Award 2010 2010 by
reference to wages which have been established on work value grounds over many years is
appropriate having regard to the nature of the work, the level of skill and responsibility and
the conditions under which work is done.
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Attachment 2 – Draft determination
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
4 yearly review of modern awards
(AM2014/239 and AM2015/23)
PASTORAL AWARD 2010
[MA000035]
Agricultural industry
JUSTICE ROSS, PRESIDENT
DEPUTY PRESIDENT KOVACIC
COMMISSIONER SAUNDERS
MELBOURNE, XX MONTH 2016
4 yearly review of moderns awards – award stage – review of Pastoral Award 2010 –
substantive issues.
A. Further to the Full Bench Decision issued on 24 December 2015 [[2015] FWCFB 8810],
the above award is varied as follows:
1. By deleting the definition of ‘broadacre field crops’ in clause 3.1 and inserting the
following:
broadacre field crops means grains, seeds, grasses, silage, legumes, fibre, flowers,
and other crops grown as part of a broadacre mixed farming enterprise
2. By deleting clause 45.2(d) and inserting the following:
(d) Special crutching rates
(i) For crutching stud ewes and their lambs – one and a quarter of the rates
prescribed in clause 45.2(a).
MA000035 PRXXXXXX
DRAFT DETERMINATION
[2015] FWCFB 8810
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(ii) For crutching rams and ram stags – double the rates prescribed in
clause 45.2(a).
3. By deleting clause 45.8(f) and inserting the following:
(f) Woolclassers allowances formula
Allowances payable to Woolclassers under clause 45.8 are calculated in
accordance with the following formula:
Allowance % of standard rate per week
Conditions 602.3
Enterprise flexibility 853.8
Woolrolling 426.8
Bookkeeping 277.5
B. This determination comes into operation from xx month 2016. In accordance with s.165(3) of
the Fair Work Act 2009 this determination does not take effect until the start of the first full pay
period that starts on or after xx month 2016.
PRESIDENT
1 [2014] FWCFB 916
2 [2015] FWC 618
3 [2015] FWC 2985
4 [2014] FWCFB 1788.
5 Ibid
6 National Retail Association v Fair Work Commission [2014] FCAFC 118 at [110]
7 Joint Exhibit 1
8 Rams are male sheep that are more than six months old and ram stags are rams that have been castrated when they are 18
months or older: clause 3 – Definitions and interpretation, Pastoral Award 2010.
9 Pastoral Industry Award 1986, Print J9497, 26 September 1991 at page 1
10 Transcript at paragraph 85
11 Leslie Hanlon, Exhibit AWU 1; Victor McCalman, Exhibit AWU 2; Terry O’Connor, Exhibit AWU 3; and Danny O’Hare,
Exhibit AWU 4.
12 Australian Workers’ Union v The Pastoralists’ Federal Council of Australia and others (1905-1907) 1 CAR 62 at 69-70
and 103
13 The Australian Workers Union v The Pastoralists Federal Council and others (1911) 5 CAR 48 at 88-90
14 Grazier’s Association of New South Wales and others v Australian Workers Union (1936) 36 CAR 295 at 296
15 Pastoral Industry – Award-Wages and working conditions (1965) 110 CAR 422 at 443, clause 14(a)(viii)
https://www.fwc.gov.au/documents/decisionssigned/html/2014FWCFB1788.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2015FWC2985.htm#P22_346
[2015] FWCFB 8810
49
16 Print G6783
17 eg Graziers Association of New South Wales and others v Australian Workers Union (1937) 37 CAR 449; NSW Farmers’
(Industrial) Association and others v Australian Workers Union, Print J9497, 26 September 1991 per Peterson J,
MacBean DP and Grimshaw C.
18 Pint N2255, 24 June 1996 per Oldmeadow C
19 Print M5600
20 See Print N2254, 4 June 1996 per Oldmeadow C
21 Re Pastoral Industry Award 1986 Q3186 (30 June 1998) per Merriman C
22 Award Modernisation Statement [2009] AIRCFB 50 at [24]
23 Award Modernisation Decision [2009] AIRCFB 345 at [54] to [59]
24 Exhibit AWU 1 at paragraph 5
25 Exhibit AWU 2 at paragraphs 7–8
26 Exhibit AWU3 at paragraphs 8–9
27 Exhibit AWU4 at paragraphs 14-15
28 (1972) 147 CAR 172 at 179-180; cited with approval in the Equal Remuneration decision 2015 [2015] FWCFB 8200 at
[280]
29 Print Q1002, 19 May 1998
30 Joint Exhibit 1 at paragraph 11
31 O’Hare statement Exhibit AWU 4 at paragraphs 6 and 7
32 Hanlon statement Exhibit AWU 1 at paragraph 7; McCalman statement Exhibit AWU 2 at paragraph 10; and O’Hare
statement Exhibit AWU 4 at paragraph 11
33 O’Hare statement Exhibit AWU 4 at paragraphs 8–12
34 Annual Wage Review 2014-15 decision [2015] FWCFB 3500 at paragraph [316]
35 The 2011 Census was identified as the only known source that could provide income data for shearers at the required 4-
digit level
36 Australian Bureau of Statistics, Census of Population and Housing, 2011. Employees whose total personal income was not
stated, or was negative, were excluded
37 Australian Bureau of Statistics, Census of Population and Housing, 2011
38 ABS, employee Earnings, Benefits and Trade Union membership, Australia, 2011, Catalogue No. 6310
39 Ibid
40 The Australian Workers Union v The Pastoralists Federal Council and others (1911) 5 CAR 48 at 74-75
41 [2015] FWCFB 3500
42 Ibid at [89]
43 ie the AWU, NFF and the Shearing Contractors
44 Transcript at paragraph 19
45 (1917) 11 CAR 409
46 Ibid at 409
47 Pastoral Industry-Award-Wages and working conditions (1965) 110 CAR 422 at 446
48 The Australian Workers’ Union v The Graziers’ Association of New South Wales and others (1967) 121 CAR 454 at 464
49 Transcript at paragraph 92
50 Rayner V. Tan N and Ward N. (2010) ‘Trends in Farm Sector Outputs and Exports’, RBA Bulletin December Quarter
2010 at p.8
51 Exhibit NFF 1
52 Ibid at paragraph 9
53 RIRDC (2015) ‘New and emerging plant industries three year RD & E plan: January 2015 to June 2018, publication No.
PRJ-009205; Attachment E to Exhibit NFF 1
[2015] FWCFB 8810
50
54 Ibid at p.40
55 Ibid at p.39
56 Victorian Parliamentary Library and Information Services (2014) Research Brief No. 3: Drugs, Poisons and Controlled
Substances (Poppy Cultivation and Processing)Amendment Bill 2013; Attachment D to Exhibit NFF 1
57 Exhibit NFF 1 at paragraph 7
58 Transcript at paragraphs 100-122
59 Exhibit NFF 2
60 Re Application by the National Retail Association to vary the General Retail Industry Award 2010 [2010] AIRCFB 1958 at
[6]
61 [2008] AIRCFB 1000 at [69]-[70]
62 Banking, Finance and Insurance Award 2010; Broadcasting and Recorded Entertainment Award 2010; Clerks – Private
Sector Award 2010; Contract Call Centres Award 2010; Hospitality Industry (General) Award 2010; Hydrocarbons
Industry (Upstream) Award 2010; Legal Services Award 2010; Local Government Industry Award 2010; Manufacturing
and Associated Industries and Occupations Award 2010; Marine Towage Award 2010; Mining Industry Award 2010; Oil
Refining and Manufacturing Award 2010; Pharmacy Industry Award 2010; Rail Industry Award 2010; Restaurant
Industry Award 2010; Salt Industry Award 2010; Telecommunications Services Award 2010; Water Industry Award
2010; Wool Storage, Sampling and Testing Award 2010
63 [2009] AIRCFB 945
64 [2010] FWAFB 1958
65 [2008] AIRCFB 1000 at paragraphs [256]-[258]
66[2009] AIRCFB 922.
67 Ibid at [21].
68 [2009] AIRCFB 923
69 [2009] AIRCFB 958
70 [2010] FWAFB 969.
71 MA000072.
72 [2010] FWAFB 1805.
73 Re Contract Call Centres Award 2010 [2012] FWA 9025; Motor Traders’ Association of New South Wales and others
[2012] FWA 9731
74 [2012] FWA 9731 at [15], [67]-[75]
75 [2012] FWA 9025 at [21]-[46]
76 Fair Work Act 2009 (Cth) s.139(1)(b)
77 Re Clerks – Private Sector Award 2010 [2010] FWAFB 969
78 [2014] FWCFB 5195
79 Ibid at [22]
80 Ibid at [26]
81 ASU 1 paragraph 7.
82 [2014] FWCFB 5195 at [27]
83 Ibid at [30]-[36]
84 PR915956
85 Transcript at paragraphs 141-143
86 NFF written submission 6 August 2015 at paragraph 78
87 See PR545345
88 Re Pastoral Industry Award 1986 Q3186 (30 June 1998) per Merriman C
89 Judgment – Pastoral Industry (20 August 1948), 31.
90 Re Pastoral Industry Award 1986 Q3186 (30 June 1998) per Merriman C
https://www.fwc.gov.au/documents/awardmod/decs/2010fwafb1805.htm
https://www.fwc.gov.au/documents/awardmod/decs/2010fwafb969.htm
https://www.fwc.gov.au/decisionssigned/html/2009aircfb922.htm
