1
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
4 yearly review of modern awards—Annualised salaries
(AM2014/239 and AM2016/13)
Agricultural industry
JUSTICE ROSS, PRESIDENT MELBOURNE, 31 MAY 2016
4 yearly review of modern awards - award stage - annualised salary - Pastoral Award 2010 -
common issue.
Introduction
[1] On 24 December 2015, a Full Bench issued a decision1 (the December 2015 decision)
dealing with a number of proposed variations to the Pastoral Award 2010 (Pastoral Award),
as part of the Award stage of the 4 yearly review of modern awards (the Review). One of the
matters dealt with in the December 2015 decision was a variation sought by the National
Farmers’ Federation (NFF)2 to insert an annualised salary term into the Pastoral Award.
[2] This Statement deals with a broader review of annualised salary terms in modern
awards.
Background
[3] Section 139 (1)(f) provides that a modern award may include annualised salary terms
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;
[4] In the December 2015 decision,3 the Full Bench indicated that it was satisfied that the
term proposed by the NFF for insertion into the Pastoral Award met the requirements of
1 [2015] FWCFB 8810.
2 NFF submission, 13 March 2015 at paragraph 4.
3 [2015] FWCFB 8810 at [170]
[2016] FWC 3520
STATEMENT
E AUSTRALIA FairWork Commission
https://www.fwc.gov.au/documents/decisionssigned/html/2015FWCFB8810.htm
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014239andor-sub-NFF-130315.pdf
https://www.fwc.gov.au/documents/decisionssigned/html/2015FWCFB8810.htm
[2016] FWC 3520
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sections (i) and (ii), but that there was a need to give further consideration to the requirements
of section 139(1)(f)(iii) of the Act.
[5] As part of the Review the NFF has also indicated that it intends to apply to vary the
Horticulture Award 2010 to insert an annualised salary clause.4 In addition, the South
Australian Wine Industry Association Incorporated has advised that it will seek the inclusion
of an annualised salary clause in the Wine Industry Award 20105.
[6] Applications have also been made to vary existing annualised salary clauses in four
other modern awards, :
Clerks—Private Sector Award 2010;
Contract Call Centres Award 2010;
Hospitality Industry (General) Award 2010;and
Restaurant Industry Award 2010.
[7] The issues raised in these applications include:
(i) the inclusion of a provision to allow for the reconciliation of an annualised
salary arrangement for managers6;
(ii) inclusion of a mechanism to ensure employees are not disadvantaged if the
annualised salary arrangement ends (but employment continues) before the
completion of a year7;
(iii) a proposed variation to expressly include absorption of the annual leave
loading in the calculation of annualised salaries8;
(iv) a requirement that the annualised wage arrangement pass “better off overall
test” in comparison with an employee with an equivalent work pattern covered
by the general provisions of the award9;
(v) an additional safeguard to ensure the employees to whom an annualised salary
arrangement applies are not required to work unreasonable hours in excess of
the employee’s agreed ordinary hours of work10;
(vi) a right to access and copy employer records of start and finish times of work11;
(vii) additional requirements relating to the making of an agreement including that
the agreement between the employer and employee be in writing, be signed by
both parties and a copy provided to the employee12;
(viii) the inclusion of a provision allowing both the employer and employee to
terminate the arrangement on notice or by agreement13
4 NFF submission, 13 March 2015 at paragraphs 4 and 5.
5 South Australian Wine Industry Association Incorporated submission, 2 March 2015.
6 United Voice submission 12 November 2015
7 United Voice submission 12 November 2015
8 Restaurant and Catering Industrial submission 2 March 2015
9 United Voice submission 2 March 2015
10 United Voice submission 2 March 2015
11 United Voice submission 2 March 2015
12 Australian Services Union submission 2 March 2015
[2016] FWC 3520
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(ix) that the arrangement be subject to an annual review14.
[8] Of the 122 modern awards, 19 contain an annualised salary term and the safeguards in
those terms vary. A list of the 19 awards with annualised salary terms is set out at Attachment
B. As indicated in the December 2015 decision, in those awards that contain an annualised
salary term, it was usually the case that similar provisions formed part of the relevant pre-
reform instruments and, as a consequence, the form and content of such terms was not the
subject of much debate during the award modernisation process.
[9] During the Transitional Review in 2012 the ASU made applications to delete
annualised salary clauses in two modern awards. Those applications were dismissed on the
basis that no cogent reasons had been advanced for the changes sought and that a thorough re-
examination of issues covered within the award modernisation process did not fall within the
scope of the Transitional Review.
[10] However, the 4 yearly modern awards review is broader in scope than the Transitional
Review and provides an opportunity to comprehensively review such terms.15
Conclusion and next steps
[11] In light of the above, I am satisfied that a broader review of all annualised salary terms
is required.
[12] I note that in the December 2015 decision the Full Bench proposed to give further
consideration to this issue in relation to the Pastoral Award and stated at [170] :
“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.”
[13] However, in order to ensure consistent decision making and that all relevant issues in
relation to annualised salary arrangements are canvassed, I have determined that the NFF’s
application to vary the Pastoral Award and the applications set out above (at [5]–[6], see
Attachment A) and existing annualised salary terms in modern awards (Attachment B) will
be referred to a separately constituted Full Bench (see Attachment C) for review and
determination.
[14] It should not be assumed that the referral of these matters to a Full Bench will result in
a standard annualised salary term to be included in all awards. The content of particular
clauses will be a matter for the Full Bench.
[15] The Full Bench will issue directions in due course.
13 Australian Services Union submission 2 March 2015
14 Australian Services Union submission 2 March 2015
15 [2015] FWCFB 8810 at [156].
[2016] FWC 3520
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PRESIDENT
Printed by authority of the Commonwealth Government Printer
Price code C, PR581021, MA000035
[2016] FWC 3520
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ATTACHMENT A — Submissions received by the Commission in relation to
annualised salary clauses
Award Party seeking
variation
Claim link to
submission
Pastoral Award 2010 National Farmers’
Federation
Seek to insert an
annualised salary
provision
Sub-02/03/15
Clerks—Private Sector
Award 2010
Australian Services
Union
Propose deleting current
clause 17 and inserting a
new clause.
Sub-02/03/15
Contract Call Centres
Award 2010
Australian Services
Union
Seeks to vary clause
18.5 to include NES
entitlement for
annualised salaries.
Sub-12/11/2015
and Sub-
02/03/15
Horticulture Award
2010
National Farmers’
Federation
Seek to insert an
annualised salary
provision
Sub-13/03/15
Wine Industry Award
2010
South Australian
Wine Industry
Association
Seek to insert an
annualised salary
provision
Sub - 2/3/2015
Hospitality Industry
(General) Award 2010
United Voice Seeks to vary clause
27.1
Sub-12/11/15
and Sub-
02/03/15
Restaurant Industry
Award 2010
United Voice Seeks to vary clause 28 Sub-12/11/15
Registered and Licenced
Clubs Award 2010
United Voice Seeks to vary Clause
17.3
Sub-12/11/15
Restaurant Industry
Award 2010
Restaurant and
Catering Industrial
Seek an alteration to
clause 28.1(a) to
expressly state
annualised salaries
include absorption of the
annual leave loading
prescribed in clause
35.2(b).
Sub-02/03/15
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014284-sub-RCI-020315.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014265andors-sub-UV-131115.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014265andors-sub-UV-131115.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014272-sub-VU-020315.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014272-sub-VU-020315.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014265andors-sub-UV-131115.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014249-sub-SAWIA-020315.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014239andor-sub-NFF-130315.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014219andOrs-sub-ASU-020315.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014219andOrs-sub-ASU-020315.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014217andors-sub-asu-121115.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014219andOrs-sub-ASU-020315.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014231and239-sub-NFF-020315.pdf
[2016] FWC 3520
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ATTACHMENT B — Existing annualised salary clauses in modern awards
Number Award Clause
1. Banking, Finance and Insurance Award 2010 14
2. Broadcasting and Recorded Entertainment Award 2010 44
3. Clerks-Private Sector Award 2010 17
4. Contract Call Centres Award 2010 18
5. Hospitality Industry (General) Award 2010 27
6. Hydrocarbons Industry (Upstream) Award 2010 20
7. Legal Services Award 2010 30
8. Local Government Industry Award 2010 14
9. Manufacturing and Associated Industries and Occupations Award 2010 24
10. Marine Towage Award 2010 13
11. Mining Industry Award 2010 17
12. Oil Refining and Manufacturing Award 2010 20
13. Pharmacy Industry Award 2010 27
14. Rail Industry Award 2010 18
15. Restaurant Industry Award 2010 28
16. Salt Industry Award 2010 18
17. Telecommunications Services Award 2010 15
18. Water Industry Award 2010 14
19. Wool Storage, Sampling and Testing Award 2010 19
[2016] FWC 3520
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ATTACHMENT C — Full Bench Memorandum
MEMORANDUM
AM2016/13 and AM2014/239
4 YEARLY REVIEW OF MODERN AWARDS
- Annualised salary - Pastoral Award 2010 -
common issue
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
4 yearly review of modern awards
Pursuant to ss.618 and 582 a Full Bench comprised of Vice President Hatcher, Deputy
President Dean and Commissioner Saunders will deal with the above matter to review and
determine –
the applications set out at Attachment A of the Statement made on 31 May 2016
([2016] FWC 3520); and
the existing annualised salary terms in 19 modern awards that are set out in
Attachment B of the statement.
Justice Ross
President
31 May 2016
Copy to:
Vice President Hatcher
Deputy President Dean
Commissioner Saunders
Copy for information to:
AMOD
