1
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Items 9 and 13B Sch. 5—Take-home pay
David Owens, Raymond Zak, Noel Leonard, Gary Owens and Ian Ross
(C2015/4711, C2015/4712, C2015/4716, C2015/4726, C2015/4754)
DEPUTY PRESIDENT KOVACIC MELBOURNE, 29 MARCH 2016
Applications for take home pay orders – applicants have not suffered suffered a
modernisation-related reduction in take-home pay as per Item 8(3) of Schedule 5 of the Fair
Work (Transitional Provisions and Consequential Amendments) Act 2009 (TPCA Act) nor is
it appropriate to make the take-home pay orders sought under clause 2.4 of the Security
Services Industry Award 2010 as provided for in Item 13B of Schedule 5 of the TPCA Act –
applications dismissed.
[1] Messrs David Owens, Raymond Zak, Noel Leonard, Gary Owens and Ian Ross (the
Applicants) each made applications which were received by the Fair Work Commission (the
Commission) over the period 9 to 14 July 2015 under Items 9 and 13B of Schedule 5 of the
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the TPCA
Act) seeking take home pay orders to remedy a reduction in pay they suffered as a result of
the operation of the transitional provisions in the Security Services Industry Award 20101 (the
Award.
[2] By way of background, the Applicants are employed as security guards by Secom
Australia Pty Ltd (Secom – the Respondent) and work at the Deep Space Station at
Tidbinbilla in the ACT. The Applicants are employed under the Award.
[3] The applications were heard by the Commission on 30 July 2015. At the hearing,
Mr Gary Owens, one of the Applicants, appeared on behalf of the Applicants, while Mr Sam
Gillani, Secom’s Human Resources Manager, appeared with Mr Mark Izzard, Secom’s
General Manager Protective Services, for the Respondent.
[4] For the reasons set out below, I am not satisfied that the Applicants have suffered a
modernisation-related reduction in take-home pay as per Item 8(3) of Schedule 5 of the TPCA
Act. As such, there is no basis for the Commission to make the take-home pay orders sought
under Item 9 of Schedule 5 of the TPCA Act. Further, I do not consider it appropriate to make
the take-home pay orders sought under clause 2.4 of the Award as provided for in Item 13B of
Schedule 5 of the TPCA Act.
1 MA000016
[2016] FWC 1884
DECISION
E AUSTRALIA FairWork Commission
[2016] FWC 1884
2
Background
[5] When the Award was made it included a number of transitional provisions, one of
which concerned the Space Tracking Station Allowance (the Allowance). The Applicants
were paid the Allowance in accordance with the Award. The Allowance ceased to operate on
31 December 2014 as a result of the operation of the Award’s transitional provisions. The
relevant Award provisions are set out below:
“2. Commencement and transitional
2.4 Neither the making of this award nor the operation of any transitional
arrangements is intended to result in a reduction in the take-home pay of employees
covered by the award. On application by or on behalf of an employee who suffers a
reduction in take-home pay as a result of the making of this award or the operation of
any transitional arrangements, the Fair Work Commission may make any order it
considers appropriate to remedy the situation.
Schedule B—Additional Transitional Provisions
B.3 Space tracking station allowance
An employee engaged at the Deep Space Station, Tidbinbilla, A.C.T., must be paid an
allowance of 12.5% of the standard rate per week.
This allowance is payable when an employee is on annual leave, sick leave and/or
public holidays but is not to be used in calculating other extra payments prescribed by
this award.
B.7 This schedule ceases to operate on 31 December 2014.
[6] The Applicants were advised by Secom by letter dated 26 May 2015 that the
Allowance ceased to operate on 31 December 2014 and would therefore no longer be paid.
Secom did not seek to recover the Allowance payments made to the Applicants during 2015.
[7] The Applicants unsuccessfully sought to resolve their concerns with Secom, with the
Commonwealth Scientific and Industrial Research Organisation (CSIRO), which manages the
Tidbinbilla complex and to which Secom is contracted, also unsuccessfully attempting to
mediate a resolution of the matter. At the time that the Allowance ceased to operate, it was
worth just under $95.00 per week. The Applicants are employed as Security Officer Level 1
employees, with the minimum weekly rate specified in the Award for that classification at the
time of their applications being $738.10 per week.
The Applicant’s case
[8] The Applicants stated in their applications that:
while the security companies contracted to the CSIRO at the Tidbinbilla complex
had changed periodically over time, it was common for security staff to transfer to
the incoming contractor and remain at the site;
Secom had been present at the Tidbinbilla complex for almost three years;
[2016] FWC 1884
3
their service at Tidbinbilla predates award modernisation;
their duties had essentially remained unchanged since 2005, with the number of
security staff having decreased over that period and the workload having increased
as a result; and
they will be significantly worse off in terms of take-home pay as a result of the
Allowance ceasing to operate.
[9] At the hearing, the Applicants set out the background to their applications and
reiterated much of what was stated in their applications. In addition, the Applicants submitted,
among other things, Secom is likely to have factored in the cost of the Allowance in its tender
for the Tidbinbilla contract. Assuming that was the case, the Applicants questioned why
Secom was not passing on the amount to them. The Applicants also disputed key aspects of
Secom’s submissions and expressed the view that they had been “fleeced” to the tune of about
$5,000 per annum. The Applicants also highlighted that when Secom assumed the contract for
provision of security services at the Tidbinbilla complex it had written to security guards on
5 September 2014 in the following terms:
“Due to the employment transferring between related entities, your service at Secom
ACT will be recognized and counted towards continuity of leave entitlements …
Your employment remains subject to the Security Services Industry Award 2010 and
the current conditions of employment will remain unchanged.”2
[10] In conclusion, the Applicants submitted that the Commission should make an order
requiring Secom to pay them an amount equivalent to the Allowance and emphasised that
allowances can be included in a take-home pay order.
The Respondent’s case
[11] Secom contended in its Form F47D – Response to an application for a take-home pay
order (multiple employees/outworkers) that there had been no reduction in take-home pay
arising out of the introduction of the Award on 1 January 2010 and the first transitional
increase occurred on 1 July 2014. Secom further contended that there was an increase in
minimum rates arising from the introduction of the Award. In support of that contention,
Secom pointed out that the rate of pay for a Security Officer Level 1 in the pre-reform Award,
the Security Employees (A.C.T.) Award, 19983, was $582.90 per week prior to award
modernisation, with the equivalent rate under the Award $614.46 per week – a difference of
$31.56 per week. Secom also contended that the lower wage rate transitioned as per the
Award until the two wage rates were aligned on 1 July 2014.
[12] Against that background, Secom submitted that the Applicants’ amount of take-home
pay for working particular hours had not decreased and that their hourly rate of pay had
increased.
[13] Beyond that, Secom stated in its Form F47D that the Allowance was not transitioned
in the same way as other allowances in the Award, highlighting that the allowances specified
2 Exhibit O1
3 AP796056
[2016] FWC 1884
4
in clause 15 of the Award continued to operate while the Allowance was not immediately
removed from the Award but ceased to operate on 31 December 2014 as per the Award.
[14] At the hearing, Secom largely reiterated the above contentions and submitted that the
Applicants were not worse off as a result of the making of the Award. In its oral submissions,
Secom relied upon the decision in Bjoern Fisher v Glad Security Pty Ltd4. With regard to the
abovementioned letter of 5 September 2014 to security guards, Secom contended that it
simply provided that the Applicants terms and conditions of employment continued to be
governed by the Award and that it ceased paying the Allowance in accordance with the
Award.
The statutory framework
[15] Part 3 of Schedule 5 of the TPCA Act deals with avoiding reductions in take-home
pay. Specifically Items 8 and 9 of Schedule 5 of the TPCA Act provides as follows:
“Part 3—Avoiding reductions in take-home pay
8 Part 10A award modernisation process is not intended to result in
reduction in take-home pay
(1) The Part 10A award modernisation process is not intended to result in a
reduction in the take-home pay of employees or outworkers.
(2) An employee’s or outworker’s take-home pay is the pay an employee or
outworker actually receives:
(a) including wages and incentive-based payments, and additional amounts
such as allowances and overtime; but
(b) disregarding the effect of any deductions that are made as permitted by
section 324 of the FW Act.
Note: Deductions permitted by section 324 of the FW Act may (for example) include
deductions under salary sacrificing arrangements.
(3) An employee suffers a modernisation-related reduction in take-home pay if,
and only if:
(a) a modern award made in the Part 10A award modernisation process
starts to apply to the employee when the award comes into operation;
and
(b) the employee is employed in the same position as (or a position that is
comparable to) the position he or she was employed in immediately
before the modern award came into operation; and
(c) the amount of the employee’s take-home pay for working particular
hours or for a particular quantity of work after the modern award comes
into operation is less than what would have been the employee’s
take-home pay for those hours or that quantity of work immediately
before the award came into operation; and
4 [2010] FWA 3678
[2016] FWC 1884
5
(d) that reduction in the employee’s take-home pay is attributable to the
Part 10A award modernisation process.
(4) …
9 Orders remedying reductions in take-home pay
Employees
(1) If the FWC is satisfied that an employee, or a class of employees, to whom a
modern award applies has suffered a modernisation-related reduction in take-
home pay, the FWC may make any order (a take-home pay order) requiring, or
relating to, the payment of an amount or amounts to the employee or
employees that the FWC considers appropriate to remedy the situation.
Outworkers
(2) If the FWC is satisfied that an outworker, or a class of outworkers, to whom
outworker terms in a modern award relate has suffered a modernisation-related
reduction in take-home pay, the FWC may make any order (a take-home pay
order) requiring, or relating to, the payment of an amount or amounts to the
outworker or outworkers that the FWC considers appropriate to remedy the
situation.
General provisions
(3) The FWC may make a take-home pay order only on application by:
(a) an employee or outworker who has suffered a modernisation-related
reduction in take-home pay; or
(b) an organisation that is entitled to represent the industrial interests of
such an employee or outworker; or
(c) a person acting on behalf of a class of such employees or outworkers.
(4) If the FWC is satisfied that an application for a take-home pay order has
already been made in relation to an employee or a class of employees, or an
outworker or a class of outworkers, the FWC may dismiss any later application
that is made under these provisions in relation to the same employee or
employees, or the same outworker or outworkers.”
[16] Regulation 3B.04 of the Fair Work (Transitional Provisions and Consequential
Amendments) Regulations 2009 (the TPCA Regulations) amends Schedule 5 of the TPCA Act
by inserting Part 3A after Part 3. The relevant items in Part 3A are set out below.
“Part 3A––Avoiding reductions in take-home pay from modern award or
transitional arrangements
13A Modern award terms giving FWA power to make take-home pay orders
(1) A modern award may include terms that give FWA power to make an order (a
take-home pay order) remedying a reduction in take-home pay suffered by an
employee or outworker, or a class of employees or outworkers, as a result of
the making of a modern award or the operation of any transitional
[2016] FWC 1884
6
arrangements in relation to the award (whether or not the reduction in take-
home pay is a modernisation-related reduction in take-home pay).
(2) An employee’s or outworker’s take-home pay is the pay an employee or
outworker actually receives:
(a) including wages and incentive-based payments, and additional amounts
such as allowances and overtime; but
(b) disregarding the effect of any deductions that are made as permitted by
section 324 of the FW Act.
Note: Deductions permitted by section 324 of the FW Act may (for example) include
deductions under salary sacrificing arrangements.
(3) This Part applies to an employee or outworker, or a class of employees or
outworkers, to whom a modern award applies if the employee, employees,
outworker or outworkers are likely to suffer a reduction in take-home pay
attributable to the making of a modern award or the operation of any
transitional arrangements in relation to the award.
13B Orders remedying reductions in take-home pay
(1) If FWA makes a take-home pay order under the terms of a modern award it
must do so in accordance with this Part.
(2) Without limiting the kind of take-home pay order that may be made under the
terms of a modern award, one or more of the following orders may be made:
(a) an order compensating a reduction in take-home pay that has already
been suffered;
(b) an order requiring the payment of an amount of take-home pay;
(c) an order preventing a reduction in take-home pay from occurring.
(3) FWA may make a take-home pay order only on application by:
(a) an employee or outworker who has suffered a reduction in take-home
pay; or
(b) an organisation that is entitled to represent the industrial interests of
such an employee or outworker; or
(c) a person acting on behalf of a class of such employees or outworkers.
(4) If FWA is satisfied that an application for a take-home pay order has already
been made in relation to an employee or outworker, or a class of employees or
outworkers, FWA may dismiss any later application that is made in relation to
the same employee, employees, outworker or outworkers.”
Consideration of the issues
[17] Item 8(3) of Schedule 5 of the TPCA Act sets out when an employee suffers a
modernisation-related reduction in take-home pay. An analysis of the material before the
Commission, drawing primarily on the Applicant’s contentions and submissions, indicates
that:
[2016] FWC 1884
7
the Award, which was made as part of the award modernisation process, applied to
the Applicants from when it came into operation; and
the Applicants are employed in the same positions as they were employed in
immediately before the Award came into operation; and
the Applicants’ take-home pay for working particular hours or for a particular
quantity of work after the Award came into operation was not less than their
take-home pay for those hours or that quantity of work immediately before the
Award came into operation as they continued to be paid the Allowance until around
mid-2015.
[18] Against that background, I am not satisfied that the Applicants have suffered a
modernisation-related reduction in take-home pay as per Item 8(3) of Schedule 5 of the TPCA
Act and as required by Item 9(1) of Schedule 5. Accordingly, there is no basis for the
Commission to make the take-home pay orders sought under Item 9(1) of Schedule 5 of the
TPCA Act.
[19] The question then becomes whether the Commission can make the take-home pay
orders sought under the transitional provision at clause 2.4 of the Award. By way of
background, clause 2.4 of the Award was determined by a Full Bench of the then Australian
Industrial Relations Commission (the award modernisation Full Bench). In its decision5 the
award modernisation Full Bench had the following to say regarding the model transitional
provision:
“[20] We deal next with the possibility of reductions in take-home pay. The
provisions of Part 3 of Schedule 5 to the Transitional Act are concerned with the
maintenance of take-home pay. They deal with what happens when an employee
suffers a reduction in take-home pay as a result of a modern award coming into
operation. It is to be implied that the provisions do not apply to employees who
commence employment after the modern award has come into operation. So while the
provisions are concerned with what happens when the modern award comes into
operation, they do not deal with the potential for reductions in take-home pay resulting
from the operation of the transitional provisions. As will be seen, the model provisions
permit a phased reduction in pre-modern award conditions if they were more beneficial
for employees than the modern award. For that reason we think it is important to
provide protection for new employees from reductions in take-home pay which
otherwise might result from the operation of the transitional provisions. The model
provision specifies that neither the making of the award nor the operation of the
transitional provisions is intended to result in a reduction in take-home pay. It also
indicates that Fair Work Australia may make an order to remedy a reduction in take-
home pay. This provision will complement the power to make take-home pay orders in
item 9 of Schedule 5 to the Transitional Act. The model provision reads:
“Neither the making of this award nor the operation of any transitional provision
is intended to result in a reduction in the take-home pay of employees covered
by the award. On application by or on behalf of an employee who suffers a
reduction in take-home pay as a result of the making of this award or the
5 (2009) 187 IR 146
[2016] FWC 1884
8
operation of any transitional provision, Fair Work Australia may make any
order it considers appropriate to remedy the situation.” (Underlining added)
[20] As can be seen from the above extract, the model provision was intended “to provide
protection for new employees from reductions in take-home pay which otherwise might result
from the operation of the transitional provisions” (underlining added) as a result of “a phased
reduction in pre-modern award conditions if they were more beneficial for employees than the
modern award.” As previously noted, the Applicants stated in their applications that their
service at Tidbinbilla predates award modernisation. In other words, the circumstances in this
case fall outside the circumstances in which the award modernisation Full Bench envisaged
the Commission making a take-home pay order to address any reduction in take-home pay
resulting for the operation of the transitional provisions.
[21] The above analysis supports a finding that it would be inappropriate to make the take-
home pay orders sought under Item 13B of Schedule 5 of the TPCA Act as to do so would be
inconsistent with the award modernisation Full Bench’s intent in inserting clause 2.4 in the
Award.
Conclusion
[22] For all the above reasons, I am not satisfied that the Applicants have suffered suffered
a modernisation-related reduction in take-home pay as per Item 8(3) of Schedule 5 of the
TPCA Act. As such, there is no basis for the Commission to make the take-home pay orders
sought under Item 9 of Schedule 5 of the TPCA Act. Further, I do not consider it appropriate
to make the take-home pay orders sought under clause 2.4 of the Award as provided for in
Item 13B of Schedule 5 of the TPCA Act as to do so would be inconsistent with the award
modernisation Full Bench’s intent in inserting the model transitional provision in modern
awards, including the Award.
[23] Accordingly, the applications will be dismissed.
Appearances:
G. Owens on behalf of the Applicants.
S. Gillani and M. Izzard for the Respondent.
Hearing details:
2015.
Canberra:
July 30.
Printed by authority of the Commonwealth Government Printer
Price code C, PR578365
THE FAIR WORK COMMISSION AUSTRALIA. DEPUNPRESIDENT SEAL THE
